[Congressional Record Volume 155, Number 9 (Thursday, January 15, 2009)]
[House]
[Pages H329-H359]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               TARP REFORM AND ACCOUNTABILITY ACT OF 2009

  Mr. McGOVERN. Mr. Speaker, by direction of the Committee on Rules, I 
call up House Resolution 62 and ask for its immediate consideration.
  The Clerk read the resolution, as follows:

                               H. Res. 62

       Resolved, That at any time after the adoption of this 
     resolution the Speaker may, pursuant to clause 2(b) of rule 
     XVIII declare the House resolved into the Committee of the 
     Whole House on the state of the Union for further 
     consideration of the bill (H.R. 384) to reform the Troubled 
     Assets Relief Program of the Secretary of the Treasury and 
     ensure accountability under such Program. No further general 
     debate shall be in order. The bill shall be considered for 
     amendment under the five-minute rule. The bill shall be 
     considered as read. All points of order against provisions in 
     the bill are waived. Notwithstanding clause 11 of rule XVIII, 
     no amendment to the bill shall be in order except those 
     printed in the report of the Committee on Rules accompanying 
     this resolution. Each such amendment may be offered only in 
     the order printed in the report, may be offered only by a 
     Member designated in the report, shall be considered as read, 
     shall be debatable for the time specified in the report 
     equally divided and controlled by.the proponent and an 
     opponent, shall not be subject to amendment, and shall not be 
     subject to a demand for division of the question in the House 
     or in the Committee of the Whole. All points of order against 
     such amendments are waived except those arising under clause 
     9 or 10 of rule XXI. At the conclusion of consideration of 
     the bill for amendment the Committee shall rise and report 
     the bill to the House with such amendments as may have been 
     adopted. The previous question shall be considered as ordered 
     on the bill and any amendments thereto to final passage 
     without intervening motion except one motion to recommit with 
     or without instructions.
       Sec. 2. A motion to proceed under section 115 of the 
     Emergency Economic Stabilization Act of 2008--
       (a) shall be in order only if offered by the Majority 
     Leader or his designee; and
       (b) may be offered even following the sixth day specified 
     in subsection (d)(3) of such section but not later than the 
     legislative day of January 22, 2009.

  The SPEAKER pro tempore (Mr. Ross). The gentleman from Massachusetts 
is recognized for 1 hour.
  Mr. McGOVERN. Mr. Speaker, for the purposes of debate only, I yield 
the customary 30 minutes to the gentleman from California (Mr. Dreier). 
All time yielded during consideration of the rule is for debate only.


                             General Leave

  Mr. McGOVERN. Mr. Speaker, I also ask unanimous consent that all 
Members be given 5 legislative days in which to revise and extend their 
remarks on House Resolution 62.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Massachusetts?
  There was no objection.
  Mr. McGOVERN. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, House Resolution 62 provides for further consideration 
of H.R. 384, the Troubled Assets Recovery Program Reform Act of 2009 
under a structured rule. The rule makes in order the 11 amendments 
printed in the Rules Committee report, including a manager's amendment 
that incorporated many of the amendments submitted to the Rules 
Committee. All the amendments are debatable for 10 minutes except the 
manager's amendment, which is debatable for 40 minutes.
  The rule also provides for a motion to recommit with or without 
instructions.
  Finally, the rule contains a provision to preserve the House's 
ability to have a vote on the second $350 billion. The first TARP bill 
contained language providing for expedited consideration a disapproval 
resolution that provided for a vote not later than 6 days after the 
date Congress receives the report.
  However, because President Bush sent the request to Congress on 
January 12, the 6th day would fall on a Sunday, a day that the House is 
not in session. Therefore, the ability to move to proceed would expire 
without giving the House an opportunity to act. The language in this 
rule assures that the House will have that opportunity.
  Mr. Speaker, let me begin by saying that this is a good rule. Eleven 
amendments are made in order--five Republican and six Democratic. One 
of the Democratic amendments is the manager's amendment which 
incorporates parts or all of the 16 Democratic amendments and 
Republican amendments.
  Mr. Speaker, as I discussed yesterday, this bill is about the way the 
TARP should be spent, but it does not actually allow or preclude the 
release of the second round of these funds.
  Now, I know many of my colleagues are apprehensive about the release 
of these funds. I understand their concerns, and I share some of them. 
The Bush administration did not disburse the funds as many of us 
thought they promised. I believe that this bill that we are debating 
today and the amendments should alleviate many of these concerns.
  I believe that providing a blueprint for how these funds should be 
spent is one of the most important actions this Congress will take. We 
know jump-starting our economy is a top priority of this new 
administration and of this Congress. But we have to do it right. We 
must ensure that the funding goes to the right places--to the 
homeowners who face foreclosure, in many cases at no fault of their 
own, and the small businesses who don't have access to funds for their 
payrolls simply because the credit market is so tight.
  This bill, Mr. Speaker, attempts to get it right. Not only does this 
bill provide a blueprint on how this House believes these funds should 
be spent; it complements the roadmap already provided by President-
elect Obama about how his administration would use these funds.
  The January 12, 2009, letter from National Economic Adviser-designate 
Larry Summers details how the incoming Obama administration will 
allocate these funds, and I support these goals. But like I said 
yesterday, Mr. Speaker, we will trust the new administration, but we 
need to also verify.
  This is a good bill that will be made better with the adoption of 
many of the amendments made in order under this rule. I support this 
rule, I support the underlying bill, and I urge my colleagues to 
support both the rule and the bill.
  I reserve the balance of my time.
  Mr. DREIER. Mr. Speaker, I yield myself such time as I might consume.
  (Mr. DREIER asked and was given permission to revise and extend his 
remarks.)

[[Page H330]]

  Mr. DREIER. Mr. Speaker, I want to begin by expressing my 
appreciation to my good friend from Worcester, the distinguished vice 
chairman of the Committee on Rules, Mr. McGovern, for yielding me the 
time, the customary 30 minutes.
  And I would also like to say in response to the exchange that Mr. 
McGovern and I had yesterday, that I am more than willing and happy to 
yield at any time if he asks me to yield to him during debate. 
Yesterday, he was very reluctant to. One of the things that has 
troubled me is that as we deal with this and other issues, people begin 
with prepared statements, but as we get into a period of time during 
which I believe this institution should have a free-flowing debate, the 
option of yielding is one which should be taken up as much as possible. 
That's my perspective, and I understand the right of individuals not to 
yield, but I will say that I'm happy to yield to individuals at any 
point.
  At this point, I'm happy to yield to my distinguished friend.
  Mr. McGOVERN. I thank the gentleman.
  If I recall correctly, I did yield to the gentleman once. What I 
objected to was being interrupted in mid-sentence. But I will be happy 
to yield to the gentleman for a discourse at any time.
  Thank you.
  Mr. DREIER. If I can reclaim my time, I will simply say that I look 
forward to yielding when we're having an exchange as we proceed with 
the 111th Congress. And I always want to, as I believe this institution 
deserves, to encourage a free-flowing debate on a wide range of issues.
  Today actually, interestingly enough, Mr. Speaker, marks the first 
time, the first time in the 111th Congress--and we've gone through 
quite a bit of legislation in the last week--that we are not dealing 
with a completely closed rule. But this process has been so utterly 
flawed that this rule simply exposes just how far we have to go rather 
than standing out as a step in the right direction.
  The most serious problem is that the underlying bill is not a product 
of any semblance of order whatsoever. No hearings, no testimony, no 
markups. Now, anyone who looks at how a bill becomes a law, they 
understand that the process of hearings, testimony, markup, that's all 
part of the process. There has been absolutely no opportunity for any 
of that. No opportunity for scrutiny whatsoever as this bill was 
written.
  This has continued into this amendment process. While I appreciate 
the fact that the Democratic majority has actually considered 
amendments for the first time, we're still left guessing as to what is 
actually in this bill.
  Most of the amendments that have been accepted will never even be 
debated here on the House floor. They'll not be individually considered 
in a transparent way. And one of the great statements of the many 
statements made by President-elect Obama--and we all look forward in 5 
days to his inauguration--is that he regularly talks about the need for 
transparency. Well, a measure that we're about to consider under this 
so-called manager's amendment will not allow the kind of transparency 
that Mr. Obama believes should be the case.
  These amendments were simply added en masse into this one amendment. 
The point of considering amendments, Mr. Speaker, is not just to have 
the opportunity to improve legislation. It is also meant to be an 
opportunity for debate. It's a chance for Democratic and Republican 
Members alike, not to mention the American people, to examine the key 
components of a bill and have a real debate.
  Unfortunately, this rule simply perpetuates a very flawed process, 
protects a flawed bill, and prevents the real scrutiny that is very, 
very deservant on the way in which this $350 billion, taxpayer dollars, 
will be spent.
  The Troubled Assets Recovery Program Reform Act, the so-called TARP, 
has itself become quite troubled. As we've heard in yesterday's 
discussion, we have serious concerns for how this program has been 
implemented. We can't begin to consider the wisdom of releasing another 
$350 billion until we understand how the initial money was used. And we 
cannot begin to consider a bill to fix the system until we understand 
what exactly this bill does. These are obligations we should take 
seriously.
  In the meantime, there are a number of far more limited and targeted 
proposals that could easily be considered and enacted to address the 
economic challenges we are facing.
  Our colleagues on both sides of the aisle have proposed a number of 
ideas for restoring our economy. They have suggested options that don't 
pick winners and losers and don't ask the taxpayers to pay for an 
unaccountable program.

                              {time}  1030

  One proposal that I've advocated is a tax credit for new home 
purchases that are made with a down payment of at least 5 percent.
  The housing industry has been at the center of our economic crisis 
from the beginning. It remains the core impediment to our economic 
recovery. As home prices have fallen and foreclosures have risen, the 
impact on working families has been enormous and the impact on our 
economy has been, as we all know, very widespread. By encouraging and 
enabling responsible home purchases, we can start to clear out the 
excess supply in the housing market. This will help to stabilize 
prices, prevent foreclosures, and put us back on a path to economic 
recovery.
  Now, I don't believe that this proposal that I've outlined and have 
been talking about for the last couple of weeks is a panacea, but it is 
a targeted measure that would help to address a key economic challenge 
that we face.
  Now, I would have offered my proposals and amendment to the 
underlying bill, but it was not germane to the measure. But Mr. 
Speaker, the point that I'm making is that there are many other 
creative ideas out there that I believe should be given full 
consideration. Unfortunately, we are spending our time on a bill that 
its own author--I see the distinguished chairman of the Committee on 
Financial Services has joined us here--has indicated will not be 
enacted into law. The Democratic majority is merely concerned with 
providing what I consider to be a fig leaf for the impending vote that 
we're going to face to release this additional $350 billion.
  The underlying bill will not safeguard the taxpayers' money and it 
will not ensure that we have the proper tools to restore our economy. I 
urge my colleagues to oppose this rule and the underlying legislation.
  With that, I reserve the balance of my time.
  Mr. McGOVERN. Mr. Speaker, I just want to set the record straight. It 
is incorrect to say that there have been no hearings on this measure. 
In fact, the Financial Services Committee on Tuesday held a hearing--I 
think it began at around two o'clock in the afternoon and went into the 
evening. So there has been a hearing in the committee of jurisdiction 
on this.
  At this time, I would like to yield 4 minutes to the gentleman from 
Massachusetts (Mr. Frank).
  Mr. FRANK of Massachusetts. I thank my colleague. And we've had 
several hearings on this subject.
  Again, the timetable here has been forced by the bill we adopted last 
fall with the support of the Republican leadership and the President as 
well as the Democratic leadership. And as a concession to Members, we 
put in there that once the President asked for the second $350 billion 
it would trigger a 15-day period in which we had to act. And we believe 
it's important for the House to make clear what it wants to do here 
during that period. But we've been having hearings on this since the 
fall.
  We put into the bill last fall some good oversight. The Government 
Accountability Office put out a report last year very critical of the 
failure to demand that the financial institutions that received funds 
make clear what they were doing with them, and particularly to show to 
what extent they were re-lending. That was because we put into the bill 
that the GAO would be there from the first day in their offices. We had 
a hearing with Mr. Kashkari, the Bush appointee to run the program, and 
the GAO to deal with it. We had a further hearing on this subject in 
the fall. We then had the long hearing that the gentleman from 
Massachusetts talked about earlier this week to go into this in great 
detail on Monday.

[[Page H331]]

  We have invited all Members as of Friday to submit amendments. A 
number of Members did so. In fact, I thank the Rules Committee; they 
have put 10 amendments in order--one was a duplicate, so 10 are in 
order, five from Republicans, five from Democrats. Of the Republican 
amendments, I intend to vote for two; I intend to vote against three. 
There were also amendments that we received from some Republicans that 
we agreed to put in the manager's amendment.
  The question is simply this, and it's two-fold: First, on the broader 
question that's not before us today, do we deny to President Obama a 
set of tools that this Congress voted for last fall because a great 
majority of Members on both sides think that the Bush administration 
used them poorly? If someone drives a car badly, do you sequester the 
car and deny it to someone else who wants to drive it?
  The TARP is not some living organism with a mind of its own. It is a 
set of policy tools. A newly elected President has asked that he be 
allowed to implement those tools. We say yes, but--and we are asking 
for some serious commitments about how it's done. So that's the first 
point.
  The second point is that this money, whether or not it is spent, will 
be in a separate vote. And the ranking Republican said yesterday, well, 
let's wait for them to tell us how they plan to spend it. No, I don't 
think we should do that. I think we should tell them how we want them 
to spend it and see if they agree. And we have been having 
conversations, and they do agree.
  We are talking about subjects that have been very familiar to 
Members. We are here trying to remedy defects in the Bush 
administration's execution of this program--nothing for foreclosures, 
not enough for community banks, no restrictions on what the banks that 
receive the money use, tougher restrictions on compensation--though I 
know not everybody agrees with that. The Wall Street Journal Editorial 
Board--which I know represents the viewpoint of many on the Republican 
side--was very critical today because we are asking that money be used 
to reduce foreclosures; they say that's a waste of money. They were 
scoffing, the Wall Street Journal--and again, I think that editorial 
reflects some of the opposition we have here--they scoffed at the 
notion that we want community banks to get some of the money. And they 
said, how can you possibly want the money to go to nonfinancial 
institutions? I guess the Wall Street Journal wants to be the ``Wall-
Street-Only Journal,'' and any effort to deal with small businesses or 
automobiles, that's somehow a profanation of the temple as far as 
they're concerned.
  We have had serious discussions with the Obama administration. I 
believe it is important that we do two things: First of all, give the 
new President the right to spend the money; and, two, give him 
restrictions on how he spends it.
  Mr. DREIER. Mr. Speaker, I yield myself such time as I might consume. 
And I would simply say to my colleague that we all recognize that there 
is a pressing need out there, and the issue of foreclosures is one that 
does need to be addressed. And I know that we had a discussion in the 
Rules Committee the night before last on the issue of--and this is 
prospective, as I had said earlier--but this notion of trying to 
encourage people, prospective homebuyers, to buy up that surplus of 
housing out there by incentivizing them to put a down payment. Now, I 
know that this is an issue that transcends what we're dealing with 
today--
  Mr. FRANK of Massachusetts. Would the gentleman yield?
  Mr. DREIER. I'm happy to yield to my friend.
  Mr. FRANK of Massachusetts. I think there is a lot to be said, but it 
is, of course, entirely outside the jurisdiction of the Financial 
Services Committee.
  Mr. DREIER. Absolutely. If I could reclaim my time, I will say that I 
know that it is outside the jurisdiction of the Financial Services 
Committee, but I think it is very important for us to do everything 
that we can to look at a broad range of creative proposals to try and 
deal with this crisis.
  And I am happy to further yield to my friend.
  Mr. FRANK of Massachusetts. I thank the gentleman. And I agree with 
that. And housing has been at the center. I would note--and it's not 
directly relevant, and may, in fact, support this other proposal--but I 
would note that the homebuilders and the realtors strongly support the 
bill we are talking about today because they think it helps in other 
ways. It does not preempt what the gentleman from California is talking 
about, but those people who are most concerned with the housing 
industry support the bill and think it will be helpful.
  Mr. DREIER. I understand that. And let me reclaim my time, Mr. 
Speaker, and say that even though it does not fall within the 
jurisdiction of the Financial Services Committee, this kind of proposal 
is something that I would like to work with my colleague on and others 
on as a way to deal with the challenge of this huge supply of housing 
that exists in my State of California and in other States as well. And 
the fact that, unfortunately, over the past several years we have seen 
a wide range of people treating homes that they have purchased like 
rental units because they put zero down and have very low interest 
payments, and so they're encouraged to walk away from it, our proposal 
here is one that is designed to ensure that people actually have a 
vested interest in that home.
  And with that, I'm happy to yield 2 minutes to my very good friend 
from Hayes, Kansas (Mr. Moran).
  Mr. MORAN of Kansas. I thank the gentleman from California for 
yielding.
  I am here about a specific provision that was initially in the 
legislation that we are going to address today. In fact, I came to that 
realization over the weekend and I contacted the gentleman from 
Massachusetts (Mr. Frank), who was kind enough to return my phone call 
this past weekend. And as a result of an effort by many in this 
Congress, this provision has been removed. And I am here to commend the 
gentleman from Massachusetts and my colleagues on the Rules Committee 
for making in order a manager's amendment that will eliminate a 
provision that denies the opportunity for those who receive funds under 
TARP from owning general aviation aircraft.
  Mr. FRANK of Massachusetts. Would the gentleman yield?
  Mr. MORAN of Kansas. I have very little time, but I would yield.
  Mr. FRANK of Massachusetts. I just want to congratulate him and his 
fellow Kansans and others who brought this to our attention.
  And let's make one thing clear; we recently read--I did--in the New 
York Times about smaller communities that have lost commercial air 
service. To tell a business which is located in a community that has 
lost commercial air service that it can never charter or buy a plane is 
really to invite them to leave those communities. So it is not simply 
the airline industry that's involved here, but it is economic fairness 
for small communities where businesses located there would have no 
other option if they aren't allowed to go to private aircraft.
  Mr. MORAN of Kansas. Reclaiming my time. Again, I appreciate it for 
two reasons; a person who represents very rural America where air 
service is very limited, and someone who is from Kansas that represents 
the general aviation industry, which is very dominant. We are very 
appreciative of the fact that the provisions which would reduce 
employment in the aircraft industry and eliminate the opportunities for 
businesses to remain in rural America is stricken from this legislation 
in the manager's amendment.
  Mr. McGOVERN. I yield 3 minutes to the gentleman from California (Mr. 
Sherman).
  Mr. SHERMAN. I thank the gentleman for yielding.
  The bill is good as far as it goes, but before Congress thinks that 
we're done with the TARP program, we ought to be considering 
legislation to make it stronger and to provide additional limits.
  First, and most important, we need to prohibit those companies that 
receive funds under this program from then paying dividends to their 
existing common shareholders or using their money to go buy the shares 
held by their existing shareholders. Why are we putting capital in if 
the company is then taking the capital out, and giving it to its 
existing shareholders? That needs to be prohibited by statute. At a 
minimum, I hope we get an unequivocal letter from the incoming 
administration that they will prevent such

[[Page H332]]

transfers by regulation, and through other means.
  Second, we need to make sure that if assets are purchased from the 
banks that were buying bad bonds, that such bonds were owned by 
American entities, including those with foreign parents, and that these 
bonds were owned by American entities on September 20, 2008, which is 
when the whole dam broke. What we don't want to do is see these monies 
go to buy bad bonds that were bad investments made in Shanghai and 
Riyadh and London.
  Third, this bill under consideration, and the TARP bill, allows for 
Million-Dollar-a-Month salaries. We cannot go to the American people 
and say we have limited executive compensation except for the most 
common element of executive compensation, salaries. There ought to be a 
limit--and only on those companies, of course, that are holding 
taxpayer money. I say to those banks that want to pay more than a 
million a year, the banks that want to pay more than a million a month 
to some of their executives and say, fine, give us back the money 
first.
  And finally, as to perks, one thing that the American people have 
focused on is the use of private executive jets. This bill says you 
cannot use those--you can't own them or lease them, at least--if your 
company is based in Detroit. But if you're a Wall Street bank, buy, 
lease, fly whatever you want. That is a strange anti-Detroit dichotomy. 
Why should we prohibit these luxury jets? Because we want them to give 
us the money back. We don't want every executive on Wall Street to come 
and take the TARP money and hold on to it as long as possible.
  Second, we want to encourage jobs in the commercial aircraft 
industry, both the manufacture and operation of those Boeing jets and 
United and American Airlines. And finally, because when the banks spend 
the money on ridiculous perks, whether it be extreme limos or extreme 
jets, that's money they can't lend to businesses in our districts.
  Mr. DREIER. Mr. Speaker, at this time I am happy to yield 3 minutes 
to our very diligent former Rules Committee member, the gentleman from 
Marietta, Georgia (Mr. Gingrey).
  Mr. GINGREY of Georgia. I thank the gentleman for yielding.
  I rise in opposition to this rule, which denies Members of this House 
an opportunity to have their amendments openly debated and given an up-
or-down vote.
  The amendment which I offered, which was not made in order, would 
have very simply prohibited any additional budget authority for the 
TARP program unless at least 30 percent of the final $350 billion 
tranche is used to assist smaller, local community financial 
institutions. The 30 percent floor reflects the fact that approximately 
30 percent of our Nation's deposits are held in these institutions, 
some 7,000 of them across the country.
  Mr. Speaker, without question, these smaller institutions are 
suffering on the front lines of a crisis that they did not create. 
However, they are uniquely positioned to help provide much-needed 
credit access to ordinary citizens looking to buy a car or buy a home 
or invest in a small business.
  Allow me to give an example. With every dollar in new capital a 
community bank can raise, it will help facilitate an additional $7 to 
$10 of lending in their communities. So by guaranteeing an appropriate 
portion of TARP authority to community institutions, we can better 
ensure this capital will indeed be put to good use.

                              {time}  1045

  Mr. Speaker, when Congress first considered the economic 
stabilization package last fall, the most severe threat presented to us 
was across-the-board credit freeze that would have stopped all 
financial activity in its tracks. Well, we may have avoided a 
catastrophe on Wall Street, but now is the time to encourage lending 
and capital on Main Street. And while I am pleased to see the 
underlying bill recognizes that community financial institutions, 
including those that are privately thinly held or subchapter S should 
have are the same level of access to the program as larger 
institutions, H.R. 384 does not go far enough. We must address the 
current crisis from a systemic perspective, and my amendment, I 
believe, would have fostered meaningful participation from the smaller 
financial institutions which, after all, Mr. Speaker, are vital to the 
economic recovery of our Nation, our States, our congressional 
districts. They are the lifeblood.
  I ask my colleagues to oppose the rule.
  Mr. McGOVERN. Mr. Speaker, I have no further requests for time.
  Mr. DREIER. Will the gentleman yield so I might engage in a colloquy?
  Mr. McGOVERN. I would be happy to yield to the gentleman.
  Mr. DREIER. I thank my friend for yielding.
  Mr. Speaker, let me say that last night in the Rules Committee as 
this rule came forward, there was some concern voiced as to whether or 
not this rule may in some way preempt the opportunity for Members to, 
in fact, offer a resolution of disapproval to deal with this.
  Section 2 of the rule relates to the consideration of the resolution 
to disapprove the last $350 billion of TARP funds. Subsection b permits 
a Member to make a privileged motion to proceed on Wednesday, January 
22, when it would normally only be available this coming Sunday. 
However, subsection a limits the motion to the majority leader rather 
than any Member.
  I just want to confirm again with the gentleman from Massachusetts, 
just as we did last night in the Rules Committee, that the purpose of 
this provision is only, only to allow the majority leader to manage the 
day's schedule and will not in any way be used to deny Members an up-
or-down vote on releasing the remaining TARP funds.
  And I thank my friend for yielding to me for the question and if he'd 
like to respond.
  Mr. McGOVERN. The gentleman is correct.
  Mr. DREIER. Correct. Okay. I thank my friend for yielding on that.
  Mr. McGOVERN. Mr. Speaker, I reserve the balance of my time.
  Mr. DREIER. Mr. Speaker, I would like to yield 1 minute to a very, 
very hardworking Member, a very senior Member from Indianapolis, 
Indiana (Mr. Burton).
  Mr. BURTON of Indiana. I thank the gentleman for yielding.
  What does that mean, a ``senior Member''? I hope it doesn't mean I 
look old.
  Mr. DREIER. If the gentleman would yield, he's one term less senior 
than I.
  Mr. BURTON of Indiana. All right.
  Mr. Speaker, let me just say that Everett Dirksen, when he was a 
United States Senator, said, a billion here, a billion there, and 
you're really talking about money, real money. Now it's a trillion 
here, a trillion there, and you're talking about real money. The only 
problem is the American people are going to face hyperinflation down 
the road if we continue down this path.
  Today we are talking about an additional $350 billion, and we don't 
even know where the first $350 billion of the bailout was spent. It 
makes no sense to me to be voting for this today when we really don't 
have any accountability for the first tranche, the $350 billion that 
has already been allocated.
  People in the stock market are taking a real bath. People who have 
investments, their life investments, in the stock market are taking a 
real bath. People who are going to retire or are already retired are 
taking a real bath.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. DREIER. Mr. Speaker, at this time I am happy to yield to my 
friend from Indianapolis an additional 1 minute.
  Mr. BURTON of Indiana. Mr. Speaker, it seems to me that the people 
who are having trouble in the stock market ought to start looking at 
places to invest like the ink that's being sold to the U.S. Treasury or 
the paper that's being sold to the U.S. Treasury that's going to be 
used to print more and more and more money.
  I don't want to take the whole extra minute my colleague has 
allocated to me, and I really appreciate it, but I would like to say if 
I were talking to the President or the American people that we have to 
control spending in this place. We have to control spending. If we 
don't do that, we're going to see very high inflation which will be 
followed by very high interest rates, will put a real kibosh and a 
rubber band effect on our economy. The way to solve this problem is to 
give the American people some of their money

[[Page H333]]

back with tax cuts and to cut capital gains.
  So I would like to end up by just saying let's be more concerned 
about spending around here. Let's really start thinking about it. It's 
the people's money. The taxpayers want accountability.
  Mr. McGOVERN. Mr. Speaker, I yield myself such time as I may consume.
  I would just respond to the gentleman by saying that what we are 
debating today is not about releasing money. There's no money attached 
to this bill. In fact, all this bill does really is set conditions on 
any money that may or may not be released. This bill also preserves 
this Chamber's right to have a vote on the release of the next TARP 
tranche.
  Mr. DREIER. Will the gentleman yield?
  Mr. McGOVERN. I yield to the gentleman.
  Mr. DREIER. I thank my friend for yielding.
  And I have got to say that the notion that somehow the measure that 
we're trying to consider here today is not related to this idea of 
releasing, within this 15-day period, the additional $350 billion is 
preposterous. It's clear that it's tied together.
  Mr. McGOVERN. Mr. Speaker, reclaiming my time, I thank the gentleman 
for his observation, but I didn't say that it was not related. The 
gentleman was talking about this bill as if today we're releasing this 
money.
  What this bill does is set conditions. It makes it clear what 
Congress' intention is on how that money should be spent if it should 
be released. If the gentleman or anybody else in this Chamber wants to 
vote against releasing additional money, they will have that 
opportunity at a later date.
  Mr. Speaker, I reserve the balance of my time.
  Mr. DREIER. Mr. Speaker, at this time I am happy to yield 5 minutes 
to our friend from Columbus, Indiana, the distinguished chairman of the 
Republican Conference (Mr. Pence).
  (Mr. PENCE asked and was given permission to revise and extend his 
remarks.)
  Mr. PENCE. Mr. Speaker, I rise in opposition to the rule.
  Mr. Speaker, we are in a recession. Many American families are 
hurting. Many millions more worry that they'll lose their job next. And 
it is important that this Congress, in legislation before us today, in 
the related legislation and in upcoming bills, take action. Inaction is 
not an option. But more important than just doing something, it is 
imperative that Congress, on behalf of the American people, do the 
right thing. And I rise today to say from my heart that the American 
people know we cannot borrow and spend and bail our way back to a 
growing economy.
  This legislation, related as it is to the second half of the banking 
bailout that passed the Congress last fall, is the wrong approach. I 
opposed that legislation last fall both times it came up because I 
believe that economic freedom means the freedom to succeed and the 
freedom to fail. The decision that Congress made to give the Federal 
Government the ability to nationalize almost every bad mortgage in 
America interrupted this basic truth. There were no easy answers at the 
time. But the American people deserved to know then and deserve to know 
now there are alternatives to massive government spending and bailouts.
  We come today to consider legislation that, as the gentleman just 
stated, is preamble, if you will, to the TARP vote that may or may not 
come to this body, and I acknowledge that. But the truth is that it is 
all interrelated. And Congress and this body may soon be asked to 
approve and police the second $350 billion installment to the financial 
markets in this country approved last fall, and we will be asked to do 
so under a new set of promises from a Congress in this legislation and 
a President, neither of which's sincerity do we question on this floor 
today, but it's a set of promises about oversight and promises that 
we'll spend the money better, and I rise today to say that there is 
just simply a better way.
  Taxpayers should not be asked to pay another $350 billion for a 
bailout that could be disbursed far beyond the original authorization 
of this Congress to undetermined industries in ways that we have seen 
used already for the initial tranche of this bill. House Republicans 
believe that enough is enough. We believe, as most Americans do, that 
we cannot borrow and spend and bail our way back to a growing economy.
  The real answer that House Republicans embrace, and I believe that it 
is an answer that most Americans embrace, is that it is time for us to 
put the American taxpayer first. It's time for us to say ``no'' to more 
bailouts, however well additionally supervised, no more bailouts, no 
more excessive government spending. It's time this Congress began to 
reduce the burden of taxes on working families, small businesses, and 
family farms and began to practice the kind of fiscal discipline that 
the American people expect.
  So I rise today in opposition to this rule and the underlying bill. 
And however well-intentioned, I believe it is, in effect, only preamble 
to legislation that could come to this floor that would be the wrong 
decision for the American people. The American people want us to walk 
away from the politics of bailouts, and they want us to take this 
country in the direction where we're not releasing the power of the 
Treasury to solve our very real economic woes but we are passing the 
kind of tax relief that will release the resources, the genius, the 
courage, and the ingenuity of the American people. As President John F. 
Kennedy said, all ships will then rise on a rising tide.
  Mr. McGOVERN. Mr. Speaker, I have no further requests for time, and I 
reserve the balance of my time.
  Mr. DREIER. Mr. Speaker, I yield myself such time as I might consume 
simply to rise and compliment my friend from Columbus, our Republican 
Conference Chair, for his very thoughtful remarks on this issue. And I 
hope very much that we will be able to proceed with a strong and 
rigorous debate.
  Unfortunately, Mr. Speaker, this rule does not allow us to have the 
kind of debate that I think this institution or the American people 
deserve, and I say that again reminding our friends that the so-called 
manager's amendment takes a huge package of amendments and does not 
allow the kind of transparency about which Mr. Obama has spoken because 
we won't have time to debate them. I guess there's, what, 40 minutes 
debate, 20 minutes on each side, to discuss all of the amendments that 
have been made in order and is I do not believe an adequate amount of 
time for us to go through the kind of detail that I think the American 
people deserve and that Members of this institution deserve.
  Mr. Speaker, I will say I have been waiting patiently for one of our 
colleagues; so I just want him to know that I made an attempt to yield 
time to him. His name will not be mentioned at this point for fear that 
anyone might think that he was being derelict in his duties. I'm sure 
he is very, very busy.
  Let me say that we are proceeding on an issue which I don't believe 
we should be dealing with at this moment. The reason I say that is that 
we have not had adequate hearings, we have not had adequate 
deliberation on this question, and there is acknowledgment from our 
friend the Chair of the Committee on Financial Services that the 
measure that we will be proceeding with will never become public law. 
It is being used as a consultative tool with the incoming 
administration. Needless to say, this is a somewhat unusual procedure 
that the House is going to deal with an issue that is not going to 
become public law, and as the House is looking at this, discussions are 
taking place with the administration.

                              {time}  1100

  It is unusual, to say the least. Now, I recognize that we are in near 
unprecedented times, and we need to deal responsibly with the economic 
downturn through which the United States of America and the world is 
now going. But I don't believe that we should be casting aside our 
responsibility as Members of this institution to do the right thing.
  I think that the right thing for us is to actually spend the time and 
effort looking at creative solutions. At this moment, there is a 
hearing taking place among our Republican economic stimulus group. I 
was there earlier this morning. We have a couple of very thoughtful 
witnesses who I suspect are still testifying. The former Governor of 
Massachusetts and Presidential candidate, Mitt Romney; the former 
president and CEO of eBay, Meg Whitman,

[[Page H334]]

were testifying just as I was leaving, and there are several other 
witnesses coming before this working group of which I am privileged to 
be a part.
  There are lots of ideas that are coming to that hearing, not just 
from the witnesses, Mr. Speaker, but from the American people as well. 
Those are actually being voiced at that hearing.
  So here we are, I believe, rushing ahead with legislation that is not 
going to become law and, quite possibly, allowing an additional $350 
billion to be expended on this very, very troubled, troubled asset 
relief plan. I, for one, believe it is wrong for us to do it as we are 
doing it.
  So, Mr. Speaker, I urge my colleagues to vote ``no'' on this rule and 
to vote ``no'' on the underlying legislation.
  With that, I yield back the balance of my time.
  Mr. McGOVERN. Mr. Speaker, the Bush economic policies over the 8 
years have been a failure. They have been a miserable failure. We have 
an incredibly high number of people who have lost their jobs. December 
marked the second highest number of foreclosures in the history of the 
United States of America. We have the highest deficit and the highest 
debt in the history of our country.
  Unless we do something, something big and something bold, the economy 
will get worse. We have the worst economy since the Great Depression.
  People don't want to hear anymore speeches. People don't want to hear 
anymore excuses. The people of this country don't want us to stand on 
the House floor and say we feel your pain.
  What people want is action and people want smart, bold, big, 
effective action by this Congress. What we are doing here today is 
trying to put forward in blueprint so if, in fact, anymore money is 
going to be released as part of the TARP, that it is clear where that 
money will be spent. We are not content to just take the next 
administrations at their word.
  We want to make it very clear where Congress stands. This is a chance 
for people to decide. If you are for foreclosure relief, then you 
should be supporting the bill that Chairman Frank has put forward. If 
that's not important to you, then you can vote ``no.'' If you want 
accountability, then you should support this bill. If that's not 
important, then put it aside.
  If you think that the United States House of Representatives should 
have a say in how this money is spent, then I think you should support 
this bill. If not, then fine. You don't have to support it.
  Mr. DREIER. Will the gentleman yield?
  Mr. McGOVERN. I am happy to yield to the gentleman from California.
  Mr. DREIER. I thank my friend for yielding.
  Mr. Speaker, I would just like to say the gentleman we were waiting 
for earlier has arrived. I was wondering if I might reclaim a little of 
my time and allow my friend to offer his remarks.
  Mr. McGOVERN. I have no objection to that.
  The SPEAKER pro tempore. Without objection, the gentleman is 
recognized.
  There was no objection.
  Mr. DREIER. So the gentleman will be able to continue his very 
brilliant closing statement.
  Mr. McGOVERN. Why don't I reserve my final close and let you yield.
  Mr. DREIER. Brilliant idea.
  At this time, Mr. Speaker, I would be very, very happy to yield 2 
minutes to my friend from Palm Harbor, Florida (Mr. Bilirakis).
  Mr. BILIRAKIS. I thank the gentleman for yielding.
  Mr. Speaker, I rise in opposition to this restrictive rule. The last 
Congress approved transferring $350 billion of this Nation's wealth to 
Wall Street with little transparency, less accountability and, worst of 
all, with no real effect on our failing economy.
  Many of our constituents are opposed to the use of the money to bail 
out Wall Street. Some of them are so angry at Congress they no longer 
trust anyone in government.
  I submitted an amendment to the Rules Committee that would have 
required institutions receiving bailout funds to disclose the 
compensation of their highest-paid executives and directed the Treasury 
Department to maintain a searchable database of that information.
  Unfortunately, my amendment was made out of order. This Congress is 
entrusting $700 billion of taxpayers' moneys to executives on Wall 
Street, and yet Congress won't even require those same executives to 
disclose what they are paying themselves.
  I believe we need this information to help us make informed decisions 
about the use of taxpayers' money to help the people and companies that 
greatly contributed to our current economic crisis. Our constituents 
deserve to know how those to whom we have given their money are using 
it. If Congress fails to insist on at least the most basic mechanisms 
of transparency while handing billions to Wall Street, we will have 
victimized the American people and done irreparable harm to the 
reputation of this institution.
  I hope in the future the majority heeds our incoming President's call 
for bipartisanship in this body and openness in government, goals 
towards which my amendment would have made progress.
  Mr. DREIER. Mr. Speaker, I yield myself the balance of our time, and 
the gentleman from Massachusetts is going to offer his closing 
statements then.
  I would just like to take a moment if I might, Mr. Speaker. The 
distinguished chairman of the Financial Services Committee, Mr. Frank, 
as he reminded us in the Rules Committee the day before yesterday, and 
I came to Congress in 1980. We did so at a very challenging economic 
time for the United States.
  I would like to remind our colleagues that Ronald Reagan was elected 
President the same day that Mr. Frank and I were elected to serve in 
the House of Representatives. At that time we were dealing with double-
digit unemployment, interest rates that were well into double digits 
and economic news that was, in fact, very, very dire.
  Now, I am no way diminishing, diminishing, the seriousness of the 
economic challenges that we face today, but I think that it is very 
important for us to note that the economy that Ronald Reagan inherited, 
when some of us first arrived here, was, in fact, in a more serious and 
dire circumstance than we face today. The reason I say that is that it 
has become a standard line over the last week or two to say that we 
are, in fact, in the most serious economic time since the Great 
Depression.
  Now, I hope and pray that that is not the case, but, again, if we 
look at simply the numbers that existed in the early part of the 1980s, 
when Mr. Frank and I arrived here in the Congress, to what they are 
today, we still have a lot of work to do, but I believe that Ronald 
Reagan faced more serious challenges than we face now.
  Now, I will say that I don't know what tomorrow is going to bring. No 
one knows what tomorrow is going to bring, but I believe that the 
solutions that we put into place in the early 1980s were, in fact, very 
positive ones, which brought about marginal rate reduction, which 
increased by $1 trillion the flow of revenues to the Federal Treasury 
through the 1980s. And, yes, we did see an increase in the size of the 
Federal deficit.
  This Congress ended up spending an awful lot more money than had been 
anticipated or than Ronald Reagan or some of the rest of us would have 
wanted. We also know that there was a dramatic buildup in defense 
spending that took place during the 1980s, and I believe at this 
juncture we have seen the great benefit of that.
  In fact, this year we marked the very important 20th anniversary of 
many, many, many of the great accomplishments that came from what 
Ronald Reagan did during the 1980s.
  Mr. FRANK of Massachusetts. Will the gentleman yield?
  Mr. DREIER. Of course, I am happy to yield to my friend, the 
distinguished Chair of the Committee on Financial Services.
  Mr. FRANK of Massachusetts. He says that Ronald Reagan didn't like 
the spending of the Congress during his administration. Of course, for 
6 of those 8 years he had a Republican Senate, but the point is, if he 
didn't like it, he exercised great self-restraint because he never 
vetoed one of those spending bills that he apparently didn't like.
  Mr. DREIER. Well, if I could reclaim my time, I would say that Ronald 
Reagan did not like a lot of that spending. Maybe he tolerated some of 
that spending, is what I might acknowledge.

[[Page H335]]

  But the fact is there was more spending than Ronald Reagan or any of 
the rest of us would have liked in the 1980s on a wide range of 
programs, but I did acknowledge the dramatic increase in defense 
spending. Again, this year, 2009, marks the 20th anniversary of the 
crumbling of the Berlin Wall and dramatic changes that took place in 
Asia, Africa, Europe that I think need to be realized that came from 
that very, very difficult economic challenge that Ronald Reagan 
inherited in 1981.
  So I would say, Mr. Speaker, that I think it's important for us to 
use the kinds of solutions that worked in the early 1980s, if we can. 
All I am arguing, as we look at the debate on this rule and the 
underlying legislation that, we, unfortunately, are not turning to 
those very thoughtful time tested alternatives.
  It's for that reason that I urge my colleagues to vote ``no'' on this 
rule and on the underlying legislation. I appreciate my colleagues 
allowing our friend from Florida to have the chance to speak.
  I yield back the balance of my time.
  Mr. McGOVERN. Mr. Speaker, I just want to close by saying that I 
appreciate the history lesson on Ronald Reagan and the Berlin Wall and 
all the other things that were mentioned.
  But the harsh reality is that people are suffering. As we speak, 
people are losing their homes. The foreclosure numbers in December were 
the second highest, were the second highest in the history of this 
country. People need help now. We need to do something now.
  So the point of this legislation is to help provide a blueprint for 
this new administration which has already outlined similar views but to 
basically reinforce what they have said they want to do, to help 
provide foreclosure relief, more accountability, to be able to help 
small businesses get the credit they need, so they can employ more 
people. We need to get this economy on the right track, and Congress 
should have a say in it.
  So I would urge my colleagues to vote ``yes'' on the underlying bill 
and I would urge them to vote ``yes'' on the bill. I urge a ``yes'' 
vote on the previous question.
  Ms JACKSON-LEE of Texas. Thank you, Mr. Speaker, for affording me 
this opportunity to address H. Res. 62, the rule providing for 
consideration of H.R. 384, the TARP Reform and Accountability Act of 
2009. I believe the rule can be supported by every Member of the House.
  Mr. Speaker, I was pleased to work with Chairman Frank and his staff 
on significant portions of this Manager's Amendment to ensure that 
small and minority businesses along with local, community, and private 
banks gain fair and equitable access to the TARP funds. Small 
businesses are the backbone of our Nation, and unfortunately, they have 
not been afforded the opportunity that large financial institutions 
have received to TARP funds and loans. With the ever worsening economic 
crisis, we must ensure in this legislation that small and minority 
businesses and community banks are afforded an opportunity to benefit 
from this important legislation. I am very pleased that this Manager's 
Amendment does just this.
  This bill will amend the TARP provisions of the Emergency Economic 
Stabilization Act of 2008 (EESA) to strengthen accountability, close 
loopholes, increase transparency, and most importantly, require the 
Treasury Department to take significant steps on foreclosure 
mitigation. Mr. Speaker, I was particularly pleased to work with 
Chairman Frank and his staff on significant portions of the Manager's 
Amendment to this legislation which ensures that small and minority 
businesses along with local, community, and private banks gain fair and 
equitable access to the TARP funds.
  It's been 3 months since the Treasury started disbursing TARP funds. 
Just in time perhaps for a lot of big banks, however smaller banks have 
been locked out so far. A lot of small banks certainly are in need of 
relief as the real estate crisis continues to unfold and hundreds have 
already applied.
  According to recent reports, the Treasury Department has yet to issue 
``the necessary guidelines for about 3,000 additional private banks. 
Most of them are set up as partnerships, with no more than 100 
shareholders. They are not able to issue preferred shares to the 
government in exchange for capital injections, as other banks can.'' 
While Treasury officials state they are ``working on a solution,'' for 
these private banks time is of the essence.
  The Treasury Department has handed out more than $155 billion to 77 
banks. Of that sum, $115 billion has gone to the eight largest banks. 
Community banks hold 11 percent of the industry's total assets and play 
a vital role in small business and agriculture lending. Community banks 
provide 29 percent of small commercial and industrial loans, 40 percent 
of small commercial real estate loans and 77 percent of small 
agricultural production loans.
  Specifically, I worked with Chairman Frank on the language in the 
Manager's Amendment. In Section 107, the Manager's Amendment creates an 
Office of Minority and Women Inclusion, which will be responsible for 
developing and implementing standards and procedures to ensure the 
inclusion and utilization of minority and women-owned businesses. These 
businesses will include financial institutions, investment banking 
firms, mortgage banking firms, broker-dealers, accountants, and 
consultants. Furthermore, the inclusion of these businesses should be 
at all levels, including procurement, insurance, and all types of 
contracts such as the issuance or guarantee of debt, equity, or 
mortgage-related securities. This office will also be responsible for 
diversity in the management, employment, and business activities of the 
TARP, including the management of mortgage and securities portfolios, 
making of equity investments, the sale and servicing of mortgage loans, 
and the implementation of its affordable housing programs and 
initiatives.
  Section 107 also calls for the Secretary of the Treasury to report to 
Congress in 180 days detailed information describing the actions taken 
by the Office of Minority and Women Inclusion, which will include a 
statement of the total amounts provided under TARP to small, minority, 
and women-owned businesses. The Manager's Amendment in Section 404 also 
has clarifying language ensuring that the Secretary has authority to 
support the availability of small business loans and loans to minority 
and disadvantaged businesses. This will be critical to ensuring that 
small and minority businesses have access to loans, financing, and 
purchase of asset-backed securities directly through the Treasury 
Department or the Federal Reserve.
  Mr. Speaker, and I urge my colleagues to support this rule.
  Mr. McGOVERN. Mr. Speaker, I yield back the balance of my time, and I 
move the previous question on the resolution.
  The previous question was ordered.
  The resolution was agreed to.
  A motion to reconsider was laid on the table.
  The SPEAKER pro tempore. Pursuant to House Resolution 62 and rule 
XVIII, the Chair declares the House in the Committee of the Whole House 
on the state of the Union for the further consideration of the bill, 
H.R. 384.

                              {time}  1113


                     In the Committee of the Whole

  Accordingly, the House resolved itself into the Committee of the 
Whole House on the State of the Union for the further consideration of 
the bill (H.R. 384) to reform the Troubled Assets Relief Program of the 
Secretary of the Treasury and ensure accountability under such Program, 
and for other purposes, with Mr. Ross (Acting Chair) in the chair.
  The Clerk read the title of the bill.
  The Acting CHAIR. When the Committee of the Whole House rose on 
Wednesday, January 14, 2009, all time for general debate, pursuant to 
House Resolution 53, had expired.
  Pursuant to House Resolution 62, no further general debate is in 
order, and the bill shall be considered read for amendment under the 5-
minute rule.
  The text of the bill is, as follows:

                                H.R. 384

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``TARP 
     Reform and Accountability Act of 2009''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.

           TITLE I--MODIFICATIONS TO TARP AND TARP OVERSIGHT

Sec. 101. New conditionality for TARP-assisted institutions.
Sec. 102. Executive compensation and corporate governance.
Sec. 103. New lending by insured depository institutions that is 
              attributable to TARP investments and assistance.
Sec. 104. Other protections for the taxpayer.
Sec. 105. Availability of TARP funds to smaller community institutions.
Sec. 106. Increase in size and authority of Financial Stability 
              Oversight Board.
Sec. 107. Clarification.

                      TITLE II--FORECLOSURE RELIEF

Sec. 201. TARP foreclosure mitigation plan and implementation.

[[Page H336]]

Sec. 202. Elements of plan.
Sec. 203. Program alternatives.
Sec. 204. Systematic foreclosure prevention and mortgage modification 
              plan established.
Sec. 204. Modification of plan.
Sec. 205. Servicer safe harbor.
Sec. 206. Report by Congressional Oversight Panel.

          TITLE III--AUTO INDUSTRY FINANCING AND RESTRUCTURING

Sec. 301. Short title.
Sec. 302. Direct loan provisions.

                  TITLE IV--CLARIFICATION OF AUTHORITY

Sec. 401. Consumer loans.
Sec. 402. Municipal securities.
Sec. 403. Commercial real estate loans.

           TITLE V--HOPE FOR HOMEOWNERS PROGRAM IMPROVEMENTS

Sec. 501. Changes to HOPE for Homeowners Program.
Sec. 502. Funding of increased HOPE for Homeowners Program credit 
              subsidy costs.

                     TITLE VI--HOME BUYER STIMULUS

Sec. 601. Home buyer stimulus program.

                       TITLE VII--FDIC PROVISIONS

Sec. 701. Permanent increase in deposit insurance.
Sec. 702. Extension of restoration plan period.
Sec. 703. Borrowing authority.
Sec. 704. Systemic risk special assessments.

           TITLE I--MODIFICATIONS TO TARP AND TARP OVERSIGHT

     SEC. 101. NEW CONDITIONALITY FOR TARP-ASSISTED INSTITUTIONS.

       (a) In General.--Section 113 of the Emergency Economic 
     Stabilization Act of 2008 (12 U.S.C. 5223) is amended by 
     adding at the end the following new subsections:
       ``(e) Reporting, Monitoring and Accountability.--
       ``(1) Periodic public reporting on use of assistance.--The 
     Secretary shall require any assisted institution that became 
     an assisted institution on or after October 3, 2008, to 
     publicly report, not less than quarterly, on such 
     institution's use of the assistance .
       ``(2) Additional requirements and compliance.--The 
     Secretary--
       ``(A) may establish additional reporting and information 
     requirements for any direct or indirect recipient of any 
     assistance or benefit at any time on or after October 3, 
     2008, that involves the obligation or expenditure, loan, or 
     investment of funds available to the Secretary under this 
     title; and
       ``(B) shall establish appropriate mechanisms to ensure 
     appropriate use and compliance with all terms of any use of 
     funds made available under this title.
       ``(3) Consultation.--The Secretary shall consult with the 
     appropriate Federal banking agencies in establishing the 
     reporting requirements under this subsection that are 
     applicable to insured depository institutions.
       ``(f) Use and Accountability for Use of Funds.--
       ``(1) Insured depository institution.--
       ``(A) Investment in or other injection of funds into a 
     depository institution.--As a condition for the provision of 
     any investment in the capital or assets of, or any other 
     provision of assistance to or for the benefit of, any insured 
     depository institution, the Secretary shall incorporate into 
     the agreement for such investment or assistance an agreement 
     between the depository institution and the appropriate 
     Federal banking agency with respect to such institution on 
     the manner in which the funds are to be used and benchmarks 
     that the institution is required to meet in using the funding 
     so as to advance the purposes of this Act to strengthen the 
     soundness of the financial system and the availability of 
     credit to the economy.
       ``(B) Examinations.--In the case of any assisted insured 
     depository institution that became an assisted institution on 
     or after October 3, 2008, the appropriate Federal banking 
     agency shall specifically review at least once annually the 
     use, by the institution, of funds made available under this 
     Act and compliance by the institution with the requirements 
     established by or pursuant to this title or by agreement of 
     the institution with the Secretary or the appropriate Federal 
     banking agency, including executive compensation and any 
     other specific agreement terms. Such review may be conducted 
     in connection with the regular full-site examination, or any 
     other examination.
       ``(C) Compliance procedures required.--Each appropriate 
     Federal banking agency shall prescribe regulations requiring 
     assisted insured depository institutions to establish and 
     maintain procedures designed to assure and monitor the 
     compliance of such depository institutions with the 
     requirements established by or pursuant to this title or by 
     agreement of the institution with the Secretary or such 
     agency.
       ``(2) Use of tarp funds for mergers or acquisitions.--
     Effective as of the date of the enactment of the TARP Reform 
     and Accountability Act of 2009, no assisted institution that 
     became an assisted institution at any time on or after 
     October 3, 2008, may merge or consolidate with any insured 
     depository institution or, either directly or indirectly, 
     acquire the assets of, or assume liability to pay any 
     deposits made in, any insured depository institution, and no 
     Federal banking agency may approve any such action under 
     section 18(c) of the Federal Deposit Insurance Act, while any 
     of such assistance is outstanding unless, prior to the 
     approval of such agency, the Secretary has determined in 
     consultation with any relevant Federal banking agencies 
     that--
       ``(A) such action will reduce risk to the taxpayer; or
       ``(B) the transaction could have been consummated without 
     funds provided under this title.
       ``(3) Nondepository institutions.--In the case of any 
     assisted institution that became an assisted institution on 
     or after October 3, 2008, and is not described in and subject 
     to paragraph (1), the Secretary shall establish such 
     reporting requirements and require any other conditions or 
     agreements no less stringent than those applicable to 
     assisted insured depository institutions, including 
     requirements to conduct examinations of the books, affairs, 
     and procedures of any such financial institution by the 
     Secretary or by delegation to the Board.
       ``(g) No Impediment to Withdrawal.--Subject to consultation 
     with the appropriate Federal banking agencies, the Secretary 
     may permit an insured depository institution to repay any 
     assistance previously provided under this title to such 
     depository institution without regard to whether the 
     depository institution has replaced such funds from any other 
     source.''.
       (b) Definitions.--Section 3 of the Emergency Economic 
     Stabilization Act of 2008 (12 U.S.C. 5202) is amended by 
     adding at the end the following new paragraphs:
       ``(10) Definitions relating to insured depository 
     institutions.--The terms `depository institution', `insured 
     depository institution', `Federal banking agency' and 
     `appropriate Federal banking agency' have the same meanings 
     as in section 3 of the Federal Deposit Insurance Act.
       ``(11) Assisted institution.--The terms `assisted 
     institution' or `assisted insured depository institution' 
     means any such institution that receives, directly or 
     indirectly, any assistance or benefit that involves the 
     obligation or expenditure, loan, or investment of funds 
     available to the Secretary under title I.''.

     SEC. 102. EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE.

       (a) In General.--Section 111 of the Emergency Economic 
     Stabilization Act of 2008 (12 U.S.C. 5221) is amended by 
     adding at the end the following new subsections:
       ``(e) Across-the-Board Executive Compensation and Corporate 
     Governance Requirements.--
       ``(1) Standards required.--Effective as of the date of the 
     enactment of the TARP Reform and Accountability Act of 2009 
     and notwithstanding any provision of, and in addition to any 
     requirement of subsection (a), (b), or (c) (other than the 
     definitions in subsection (b)(3)), the Secretary shall 
     require any assisted institution to meet standards for 
     executive compensation and corporate governance while any 
     assistance under this title is outstanding.
       ``(2) Specific requirements.--The standards established 
     under paragraph (1) shall include--
       ``(A) limits on compensation that exclude incentives for 
     senior executive officers of an assisted institution which 
     received assistance under this title to take unnecessary and 
     excessive risks that threaten the value of such institution 
     during the period that any assistance under this title is 
     outstanding;
       ``(B) a provision for the recovery by such institution of 
     any bonus or incentive compensation paid to a senior 
     executive officer based on statements of earnings, gains, or 
     other criteria that are later found to be materially 
     inaccurate;
       ``(C) a prohibition on such institution making any golden 
     parachute payment to a senior executive officer during the 
     period that the assistance under this title is outstanding;
       ``(D) a prohibition on such institution paying or accruing 
     any bonus or incentive compensation, during the period that 
     the assistance under this title is outstanding, to the 25 
     most highly-compensated employees; and
       ``(E) a prohibition on any compensation plan that would 
     encourage manipulation of such institution's reported 
     earnings to enhance the compensation of any of its employees.
       ``(3) Divestiture.--During the period in which any 
     assistance under this title to any assisted institution is 
     outstanding, the institution may not own or lease any private 
     passenger aircraft, or have any interest in such aircraft, 
     except that such institution shall not be treated as being in 
     violation of this provision with respect to any aircraft or 
     interest in any aircraft that was owned or held by the 
     institution immediately before receiving such assistance, as 
     long as the recipient demonstrates to the satisfaction of the 
     Secretary that all reasonable steps are being taken to sell 
     or divest such aircraft or interest.
       ``(4) Applicability to prior assistance.--Notwithstanding 
     any limitations included in subsection (a), (b), or (c) with 
     regard to applicability, the Secretary may apply the 
     requirements of and the standards established under this 
     subsection to any assisted institution that received any 
     assistance under this title on or after the date of the 
     enactment of the TARP Reform and Accountability Act of 2009.
       ``(f) Board Observer.--The Secretary may require the 
     attendance of an observer delegated by the Secretary, on 
     behalf of the Secretary, to attend the meetings of the board 
     of directors of any assisted institution that became an 
     assisted institution on or after

[[Page H337]]

     October 3, 2008, and any committees of such board of 
     directors, while any assistance under this title is 
     outstanding.''.
       (b) Repeal of De Minimis Exception.--Section 111(c) of the 
     Emergency Economic Stabilization Act of 2008 (12 U.S.C. 
     5221(c)) is amended by striking ``and only where such 
     purchases per financial institution in the aggregate exceed 
     $300,000,000 (including direct purchases),''.

     SEC. 103. NEW LENDING BY INSURED DEPOSITORY INSTITUTIONS THAT 
                   IS ATTRIBUTABLE TO TARP INVESTMENTS AND 
                   ASSISTANCE.

       Section 7(a) of the Federal Deposit Insurance Act (U.S.C. 
     1817(a)) is amended by adding at the end the following new 
     paragraph:
       ``(12) Lending increases attributable to investment or 
     other assistance under the troubled assets relief program.--
       ``(A) In general.--Each report of condition filed pursuant 
     to this subsection by an insured depository institution which 
     received an investment or other assistance under the Troubled 
     Assets Relief Program established by the Emergency Economic 
     Stabilization Act of 2008 or section 136(d) of the Energy 
     Independence and Security Act of 2007 shall report the amount 
     of any increase in new lending in the period covered by such 
     report (or the amount of any reduction in any decrease in new 
     lending) that is attributable to such investment or 
     assistance, to the extent possible.
       ``(B) Alternative measure.--If an insured depository 
     institution that is subject to subparagraph (A) cannot 
     accurately quantify the effect that an investment or other 
     assistance under such Troubled Assets Relief Program has had 
     on new lending by the institution, the insured depository 
     institution shall report the total amount of the increase in 
     new lending, if any, in the period covered by such report.
       ``(C) Designation of reporting requirement.--The Federal 
     banking agencies and the Secretary of the Treasury shall 
     specify the form, content, and manner of reports required 
     under this paragraph.''.

     SEC. 104. OTHER PROTECTIONS FOR THE TAXPAYER.

       (a) Warrant Requirements.--Subsection (d) of section 113 of 
     the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 
     5223(d)) is amended by striking paragraph (1) and inserting 
     the following new paragraph:
       ``(1) Warrants.--
       ``(A) In general.--The Secretary may not provide any 
     assistance under this title to any institution, unless the 
     Secretary, receives from the institution--
       ``(i) in the case of an institution the securities of which 
     are traded on a national securities exchange, a warrant 
     giving the right to the Secretary to receive nonvoting common 
     stock or preferred stock in such institution, or voting 
     stock, with respect to which the Secretary agrees not to 
     exercise voting power, whichever the Secretary determines 
     appropriate; or
       ``(ii) in the case of an institution other than one 
     described in clause (i), a warrant for common or preferred 
     stock, or an instrument that is the economic equivalent (as 
     determined by the Secretary) of such a warrant in the 
     financial institution (in the case of a mutual association), 
     holding company of the financial institution, or any company 
     that controls a majority stake in the financial institution, 
     whichever the Secretary determines appropriate.
       ``(B) Amount.--
       ``(i) In general.--The warrants or instruments described in 
     subparagraph (A) with respect to an assisted institution 
     shall have a value equal to 15 percent of the aggregate 
     amount of all assistance provided to the institution under 
     this title. Such warrants or instruments shall entitle the 
     Government to purchase--

       ``(I) nonvoting common stock, up to a maximum amount of 15 
     percent of the issued and outstanding common stock of --

       ``(aa) the assisted institution; or
       ``(bb) in the case of an assisted institution, the 
     securities of which are not traded on a national securities 
     exchange, a holding company or company that controls a 
     majority of the stock thereof (in this section referred to as 
     the `warrant common'); and

       ``(II) preferred stock having an aggregate liquidation 
     preference equal to 15 percent of such aggregate loan amount, 
     less the value of common stock available for purchase under 
     the warrant common (in this section referred to as the 
     `warrant preferred').

       ``(ii) Common stock warrant price.--The exercise price on a 
     warrant or instrument described in paragraph (1) shall be--

       ``(I) the 15-day trailing average, as of 1 day prior to the 
     date on which any commitment to provide assistance under this 
     title was entered into, of the market price of the common 
     stock of the assisted institution; or
       ``(II) in the case of an assisted institution, which is a 
     mutual association or the securities of which are not traded 
     on a national securities exchange, the economic equivalent of 
     the market price described in clause (I), as determined by 
     the Secretary.

       ``(iii) Terms of preferred stock warrant.--

       ``(I) In general.--The initial exercise price for the 
     preferred stock warrant shall be $0.01 per share or such 
     greater amount as the corporate charter may require as the 
     par value per share of the warrant preferred. The Government 
     shall have the right to immediately exercise the warrants.
       ``(II) Redemption.--The warrant preferred may be redeemed 
     at any time after exercise of the preferred stock warrant at 
     100 percent of its issue price, plus any accrued and unpaid 
     dividends.''.

       (b) Repeal of Certain Exception.--Section 113(d)(3) of the 
     Emergency Economic Stabilization Act of 2008 (12 U.S.C. 
     5223(d)(3)) is amended by striking subparagraph (A).
       (c) Technical and Conforming Amendments.--Section 113(d)(2) 
     of the Emergency Economic Stabilization Act of 2008 (12 
     U.S.C. 2553(d)) is amended by striking subparagraph (E).

     SEC. 105. AVAILABILITY OF TARP FUNDS TO SMALLER COMMUNITY 
                   INSTITUTIONS.

       (a) Prompt Action.--The Secretary shall promptly take all 
     necessary actions to make available funds under title I of 
     the Emergency Economic Stabilization Act of 2008 to smaller 
     community financial institutions.
       (b) Comparable Terms.--If any institution becomes an 
     assisted institution after the date of the enactment of this 
     Act, such funding for depository institutions that--
       (1) have submitted applications on which no action has been 
     taken, such as institutions that are C corporations 
     (including privately held institutions) and community 
     development financial institutions; or
       (2) are of a type for which the Secretary has not yet 
     established an application deadline or for which any such 
     deadline has not yet occurred as of the date of the enactment 
     of this Act, such as institutions that are non-stock 
     corporations, S-corporations, mutually-owned insured 
     depository institutions (as defined in section 3 of the 
     Federal Deposit Insurance Act),

     shall receive such funding on terms comparable to the terms 
     applicable to institutions that received funding prior to the 
     date of the enactment of this Act.
       (c) Definitions.--For purposes of this section, the terms 
     ``S Corporation'' and ``C Corporation'' shall have the same 
     meaning given to those terms in section 1361(a) of the 
     Internal Revenue Code of 1986.

     SEC. 106. INCREASE IN SIZE AND AUTHORITY OF FINANCIAL 
                   STABILITY OVERSIGHT BOARD.

       (a) Authority.--Section 104 of the Emergency Economic 
     Stabilization Act of 2008 (12 U.S.C. 2514) is amended--
       (1) by redesignating subsections (g) and (h) as subsections 
     (h) and (i), respectively; and
       (2) by inserting after subsection (f) the following new 
     subsection:
       ``(g) Review and Decisionmaking.--After conducting any 
     review under this section of a policy determination made by 
     the Secretary, the Financial Stability Oversight Board may 
     overturn any such policy determination by a \2/3\ vote of all 
     members of such board.''.
       (b) Appointment of 3 Additional Members.--Section 104(b) of 
     the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 
     2514(b)) is amended--
       (1) by striking ``and'' at the end of paragraph (4);
       (2) by striking the period at the end of paragraph (5) and 
     inserting a semicolon; and
       (3) by adding at the end the following new paragraphs:
       ``(6) the Chairperson of the Board of Directors of the 
     Federal Deposit Insurance Corporation; and
       ``(7) 2 members appointed by the President, by and with the 
     consent of the Senate, from among individuals who are not 
     officers or employees of the United States Government.''.

     SEC. 107. CLARIFICATION.

       Section 101 of the Emergency Economic Stabilization Act of 
     2008 (12 U.S.C. 2514(b)) is amended by adding at the end the 
     following new subsection:
       ``(f) Clarification.--Any provision of capital to, purchase 
     of equity in, or assistance provided to any institution under 
     this title shall be considered to be a purchase of troubled 
     assets for purposes of this title.''.

                      TITLE II--FORECLOSURE RELIEF

     SEC. 201. TARP FORECLOSURE MITIGATION PLAN AND 
                   IMPLEMENTATION.

       (a) Plan Required.--Notwithstanding any provision of title 
     I of the Emergency Economic Stabilization Act of 2008, none 
     of the funds otherwise available to the Secretary of the 
     Treasury (in this title referred to as the ``Secretary'') 
     pursuant to section 115(a)(3) of such Act shall be available 
     to the Secretary after March 15, 2009, unless a comprehensive 
     plan to prevent and mitigate foreclosures on residential 
     properties, in accordance with the requirements of this 
     title, has been developed by the Secretary and approved by 
     the Financial Stability Oversight Board by such date.
       (b) Commitment of Resources.--The comprehensive plan 
     established pursuant to subsection (a) shall require the 
     commitment of funds made available to the Secretary under 
     title I of the Emergency Economic Stabilization Act of 2008 
     in an amount up to $100,000,000,000, but in no case less than 
     $40,000,000,000.
       (c) Implementation Required.--The Secretary shall begin 
     committing funds available to the Secretary under title I of 
     the Emergency Economic Stabilization Act of 2008 to implement 
     the comprehensive plan established pursuant to subsection (a) 
     by not later than April 1, 2009.
       (d) Certification.--If by May 1, 2009, the Secretary does 
     not commit more than the minimum of $40,000,000,000 as 
     required under subsection (b), the Secretary shall certify to 
     the Congress, no later than May 15, 2009, the specific 
     reasons that such additional funds have not been committed.

[[Page H338]]

     SEC. 202. ELEMENTS OF PLAN.

       (a) Required Elements.--The comprehensive plan established 
     pursuant to section 201(a) shall comply with the following 
     requirements:
       (1) Owner-occupied residences only.--The programs 
     implemented under the plan shall prevent and mitigate 
     foreclosures specifically on owner-occupied residential 
     properties.
       (2) Leveraging of private capital.--The plan shall leverage 
     private capital to the maximum extent possible consistent 
     with the purpose of preventing and mitigating foreclosures on 
     such properties.
       (3) Use of program alternatives.--The actions to be taken 
     under the plan shall consist of one, or a combination of more 
     than one, of the program alternatives set forth in section 
     203.
       (b) Concentrations of Foreclosures.--The comprehensive plan 
     established pursuant to section 201(a) may include provisions 
     designed to prevent and mitigate foreclosures on residential 
     properties located in areas that are most seriously affected 
     by such foreclosures.

     SEC. 203. PROGRAM ALTERNATIVES.

       The program alternatives set forth in this section are as 
     follows:
       (1) Systematic loan modification program.--The systematic 
     foreclosure prevention and mortgage modification program 
     under section 204.
       (2) Reduction of hope for homeowners program costs.--A 
     program under which the Secretary--
       (A) provides coverage for fees under the HOPE for 
     Homeowners Program under section 257 of the National Housing 
     Act (12 U.S.C. 1715z-23), as amended by title V of this Act; 
     or
       (B) ensures the affordability of interest rates of 
     mortgages insured under such Program.
       (3) Buy-down of second lien mortgages.--A program under 
     which the Secretary makes available to owners of owner-
     occupied residential properties a direct mortgage loan the 
     proceeds of which shall be used only to reduce the 
     outstanding debt of such owner under an existing second lien 
     mortgage on such residential property, for the purpose of 
     facilitating loan modification, subject to such reductions in 
     the principal of such existing second lien mortgages as the 
     Secretary may require.
       (4) Servicer incentives and assistance.--A program under 
     which the Secretary may make payments to servicers who 
     implement modifications to mortgages that result in mortgages 
     that meet such requirements as the Secretary shall establish.
       (5) Loan purchases.--A program under which the Secretary, 
     or one or more entities that the Secretary, in consultation 
     with the Secretary of Housing and Urban Development, enters 
     into a contract with to carry out the program under this 
     paragraph, which may include the Federal Deposit Insurance 
     Corporation and entities selected as contractors under 
     section 107 of the Emergency Economic Stabilization Act of 
     2008, purchases whole loans for the purpose of modifying or 
     refinancing the loans.

     SEC. 204. SYSTEMATIC FORECLOSURE PREVENTION AND MORTGAGE 
                   MODIFICATION PLAN ESTABLISHED.

       (a) In General.--The systematic foreclosure prevention and 
     mortgage modification program under this section shall be a 
     program established by the Secretary, in consultation with 
     the Chairperson of the Board of Directors of the Federal 
     Deposit Insurance Corporation and the Secretary of Housing 
     and Urban Development, that--
       (1) provides lenders and loan servicers with certain 
     compensation to cover administrative costs for each loan 
     modified according to the required standards; and
       (2) provides loss sharing or guarantees for certain losses 
     incurred if a modified loan should subsequently re-default.
       (b) Program Administration.--The Secretary, in consultation 
     with the Secretary of Housing and Urban Development, may 
     contract with one or more entities, including the Federal 
     Deposit Insurance Corporation and entities selected as 
     contractors under section 107 of the Emergency Economic 
     Stabilization Act of 2008, to conduct the program activities 
     required under the program under this section.
       (c) Program Components.--The program established under 
     subsection (a) may include the following components:
       (1) Eligible borrowers.--The program shall be limited to 
     loans secured by owner-occupied properties.
       (2) Exclusion for early payment default.--To promote 
     sustainable mortgages, loss sharing or guarantees shall be 
     available only after the borrower has made a specified 
     minimum number of payments on the modified mortgage.
       (3) Standard net present value test.--In order to promote 
     consistency and simplicity in implementation and audit, the 
     Secretary shall prescribe a standardized net present value 
     analysis for participating lenders and servicers comparing 
     the expected net present value of modifying past due loans 
     compared to the net present value of foreclosing on them will 
     be applied. Under this test, standard assumptions shall be 
     used to ensure that a consistent standard for affordability 
     is provided based on a ratio of the borrower's mortgage-
     related expenses for the first priority mortgage-to-gross 
     income specified by the Secretary.
       (4) Systematic loan review by participating lenders and 
     servicers.--Participating lenders and servicers shall be 
     required to undertake a systematic review of all of the loans 
     under their management, to subject each loan to a standard 
     net present value test to determine whether it is a suitable 
     candidate for modification, and to offer modifications for 
     all loans that pass this test. The penalty for failing to 
     undertake such a systematic review and to carry out 
     modifications where they are justified would be 
     disqualification from further participation in the program 
     until such a systematic program was introduced.
       (5) Modifications.--Modifications may include any of the 
     following:
       (A) Reduction in interest rates and fees.
       (B) Term or amortization extensions.
       (C) Forbearance or forgiveness of principal.
       (D) Other similar modifications.
       (6) Simplified loss share calculation.--In order to ensure 
     the administrative efficiency and effective operation of the 
     program, the Secretary shall define appropriate measures for 
     loss sharing or guarantees designed to reduce the risk and 
     loss upon redefault of modified mortgages in order to provide 
     adequate incentives to lenders, servicers, and investors to 
     modify eligible mortgages and avoid unnecessary foreclosures. 
     Interim modifications shall be allowed.
       (7) De minimis test.--To lower administrative costs, a de 
     minimis test shall be used to exclude from loss sharing any 
     modification that does not lower the monthly payment at least 
     10 percent.
       (8) 8 year limit on loss sharing payment.--The loss sharing 
     guarantee shall terminate at the end of the 8-year period 
     beginning on the date the modification was consummated.
       (d) Alternative Components.--The Secretary may, with the 
     approval of the Board, implement foreclosure prevention and 
     mitigation actions other than those included pursuant to 
     subsection (c) in the comprehensive plan initially approved 
     by the Board pursuant to section 201(a) that the Secretary 
     believes would provide equivalent or greater impact on 
     foreclosure mitigation.
       (e) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary to implement this section and 
     prevent evasions thereof.
       (f) Troubled Assets.--The costs incurred by the Federal 
     Government in carrying out the loan modification program 
     established under this section shall be covered out of the 
     funds made available to the Secretary of the Treasury under 
     section 118 of the Emergency Economic Stabilization Act of 
     2008 or such other funds as may be available to the 
     Secretary.
       (g) Report.--Before the end of the 6-month period beginning 
     on the date of the enactment of this Act, the Secretary shall 
     submit a progress report to the Congress containing such 
     findings and such recommendations for legislative or 
     administrative action as the Secretary may determine to be 
     appropriate.

     SEC. 204. MODIFICATION OF PLAN.

       (a) In General.--If the Secretary, in consultation with the 
     Chairperson of the Board of Directors of the Federal Deposit 
     Insurance Corporation and the Secretary of Housing and Urban 
     Development, determines at any time that modification of the 
     comprehensive plan initially approved by the Board pursuant 
     to section 201(a) (as such plan may subsequently have been 
     modified pursuant to this section), or that modification of 
     any component program element, is necessary to maximize the 
     prevention of foreclosures on residential properties or 
     minimize costs to taxpayers of such foreclosure mitigation, 
     the Secretary may modify the plan or program element, but 
     only to the extent such modifications are approved by the 
     Board.

     SEC. 205. SERVICER SAFE HARBOR.

       (a) Safe Harbor.--
       (1) Loan modifications and workout plans.--Notwithstanding 
     any other provision of law, and notwithstanding any 
     investment contract between a servicer and a securitization 
     vehicle or investor, a servicer that acts consistent with the 
     duty set forth in section 129A(a) of Truth in Lending Act (15 
     U.S.C. 1639a) shall not be liable for entering into a loan 
     modification or workout plan with respect to any such 
     mortgage that meets all of the criteria set forth in 
     paragraph (2)(B) to--
       (A) any person, based on that person's ownership of a 
     residential mortgage loan or any interest in a pool of 
     residential mortgage loans or in securities that distribute 
     payments out of the principal, interest and other payments in 
     loans on the pool;
       (B) any person who is obligated to make payments determined 
     in reference to any loan or any interest referred to in 
     subparagraph (A); or
       (C) any person that insures any loan or any interest 
     referred to in subparagraph (A) under any law or regulation 
     of the United States or any law or regulation of any State or 
     political subdivision of any State.
       (2) Ability to modify mortgages.--
       (A) Ability.--Notwithstanding any other provision of law, 
     and notwithstanding any investment contract between a 
     servicer and a securitization vehicle or investor, a 
     servicer--
       (i) shall not be limited in the ability to modify 
     mortgages, the number of mortgages that can be modified, the 
     frequency of loan modifications, or the range of permissible 
     modifications; and
       (ii) shall not be obligated to repurchase loans from or 
     otherwise make payments to the securitization vehicle on 
     account of a

[[Page H339]]

     modification, workout, or other loss mitigation plan for a 
     residential mortgage or a class of residential mortgages that 
     constitute a part or all of the mortgages in the 
     securitization vehicle,

     if any mortgage so modified meets all of the criteria set 
     forth in subparagraph (B).
       (B) Criteria.--The criteria under this subparagraph with 
     respect to a mortgage are as follows:
       (i) Default on the payment of such mortgage has occurred or 
     is reasonably foreseeable.
       (ii) The property securing such mortgage is occupied by the 
     mortgagor of such mortgage.
       (iii) The servicer reasonably and in good faith believes 
     that the anticipated recovery on the principal outstanding 
     obligation of the mortgage under the particular modification 
     or workout plan or other loss mitigation action will exceed, 
     on a net present value basis, the anticipated recovery on the 
     principal outstanding obligation of the mortgage to be 
     realized through foreclosure.
       (3) Applicability.--This subsection shall apply only with 
     respect to modifications, workouts, and other loss mitigation 
     plans initiated before January 1, 2012.
       (b) Legal Costs.--If an unsuccessful action is brought 
     against a servicer by any person described in subparagraph 
     (A), (B), or (C) of subsection (a)(1), such person shall bear 
     any actual legal costs of the servicer, including reasonable 
     attorney fees and expert witness fees, incurred in good faith 
     in such action, as determined by the court.
       (c) Reporting.--Each servicer that engages in loan 
     modifications or workout plans subject to the safe harbor in 
     subsection (a) shall report to the Secretary on a regular 
     basis regarding the extent, scope and results of the 
     servicer's modification activities. The Secretary shall 
     prescribe regulations specifying the form, content, and 
     timing of such reports.
       (d) Definition of Securitization Vehicles.--For purposes of 
     this section, the term ``securitization vehicle'' means a 
     trust, corporation, partnership, limited liability entity, 
     special purpose entity, or other structure that--
       (1) is the issuer, or is created by the issuer, of mortgage 
     pass-through certificates, participation certificates, 
     mortgage-backed securities, or other similar securities 
     backed by a pool of assets that includes residential mortgage 
     loans; and
       (2) holds such mortgages.

     SEC. 206. REPORT BY CONGRESSIONAL OVERSIGHT PANEL.

       The Congressional Oversight Panel established by section 
     125 of the Emergency Economic Stabilization Act of 2008 shall 
     submit a report to the Congress, not later than July 1, 2009, 
     regarding--
       (1) the actions taken by the Secretary pursuant to this 
     title;
       (2) the impact and effectiveness of such actions on 
     foreclosures on residential properties; and
       (3) the effectiveness of such actions from the standpoint 
     of minimizing costs to the taxpayers.

          TITLE III--AUTO INDUSTRY FINANCING AND RESTRUCTURING

     SEC. 301. SHORT TITLE.

       This title may be cited as the ``TARP Reform and 
     Accountability Act of 2009''.

     SEC. 302. DIRECT LOAN PROVISIONS.

       (a) In General.--The Emergency Economic Stabilization Act 
     of 2008 (division A of Public Law 110-343) is amended by 
     adding at the end the following:

         ``TITLE IV--AUTO INDUSTRY FINANCING AND RESTRUCTURING

     ``SEC. 401. PURPOSES.

       ``The purposes of this title are--
       ``(1) to clarify and confirm the authority and facilities 
     to restore liquidity and stability to domestic vehicle 
     manufacturers in the United States; and
       ``(2) to ensure that such authority and such facilities are 
     used in a manner that--
       ``(A) results in a viable and competitive domestic 
     automobile industry that minimizes adverse effects on the 
     environment;
       ``(B) enhances the ability and the capacity of the domestic 
     automobile industry to pursue the timely and aggressive 
     production of energy-efficient advanced technology vehicles;
       ``(C) preserves and promotes the jobs of American workers 
     employed directly by the domestic automobile industry and in 
     related industries;
       ``(D) safeguards the ability of the domestic automobile 
     industry to provide retirement and health care benefits for 
     the industry's retirees and their dependents; and
       ``(E) stimulates manufacturing and sales of automobiles 
     produced by automobile manufacturers in the United States.

     ``SEC. 402. PRESIDENTIAL DESIGNATION.

       ``(a) Designation.--The President shall designate one or 
     more officers from the Executive Branch having appropriate 
     expertise in such areas as economic stabilization, financial 
     aid to commerce and industry, financial restructuring, energy 
     efficiency, and environmental protection (who shall 
     hereinafter in this title be collectively referred to as the 
     `President's designee') to carry out the purposes of this 
     title, including the facilitation of restructuring necessary 
     to achieve the long-term financial viability of domestic 
     automobile manufacturers, who shall serve at the pleasure of 
     the President.
       ``(b) Additional Persons.--The President or the President's 
     designee may also employ, appoint, or contract with 
     additional persons having such expertise as the President or 
     the President's designee believes will assist the Government 
     in carrying out the purposes of this title.
       ``(c) Participation by Other Agency Personnel.--Other 
     Federal agencies may provide, at the request of the 
     President's designee, staff on detail from such agencies for 
     purposes of carrying out this title.

     ``SEC. 403. BRIDGE FINANCING.

       ``(a) In General.--The President's designee shall authorize 
     and direct the disbursement of bridge loans or enter into 
     commitments for lines of credit to each automobile 
     manufacturer that submitted a plan to the Congress on 
     December 2, 2008 (hereafter in this title referred to as an 
     `eligible automobile manufacturer'), and has submitted a 
     request for such loan or commitment. Nothing in this section 
     shall preclude the President's designee from authorizing and 
     directing the disbursement of bridge loans or entering into 
     commitments for lines of credit to other entities.
       ``(b) Amount of Assistance.--The President's designee shall 
     authorize bridge loans or commitments for lines of credit to 
     each eligible automobile manufacturer in an amount that is 
     intended to facilitate the continued operations of the 
     eligible automobile manufacturer and to prevent the failure 
     of the eligible automobile manufacturer, consistent with the 
     plan submitted on December 2, 2008, and subject to available 
     funds.

     ``SEC. 404. RESTRUCTURING PROGRESS ASSESSMENT.

       ``(a) Establishment of Measures for Assessing Progress.--
     Not later than February 1, 2009, the President's designee 
     shall determine appropriate measures for assessing the 
     progress of each eligible automobile manufacturer toward 
     transforming the plan submitted by such manufacturer to the 
     Congress on December 2, 2008, into the restructuring plan to 
     be submitted under section 405(b).
       ``(b) Evaluation of Progress on Basis of Restructuring 
     Progress Assessment Measures.--
       ``(1) In general.--The President's designee shall evaluate 
     the progress of each eligible automobile manufacturer toward 
     the development of a restructuring plan, on the basis of the 
     restructuring progress assessment measures established under 
     this section for such manufacturer.
       ``(2) Timing.--Each evaluation required under paragraph (1) 
     for any eligible automobile manufacturer shall be conducted 
     at the end of the 15-day period beginning on the date on 
     which the restructuring progress assessment measures were 
     established by the President's designee for such eligible 
     automobile manufacturer.

     ``SEC. 405. SUBMISSION OF PLANS.

       ``(a) Negotiated Plans.--
       ``(1) Facilitation.--
       ``(A) In general.--Beginning on the date of any 
     disbursement under the facility, the President's designee 
     shall seek to facilitate agreement on any restructuring plan 
     to achieve and sustain the long-term viability, international 
     competitiveness, and energy efficiency of an eligible 
     automobile manufacturer, negotiated and agreed to by 
     representatives of interested parties (in this title referred 
     to as a `negotiated plan') with respect to any eligible 
     automobile manufacturer.
       ``(B) Interested parties.--For purposes of this section, 
     the term `interested party' shall be construed broadly so as 
     to include all persons who have a direct financial interest 
     in a particular automobile manufacturer, including--
       ``(i) employees and retirees of the eligible automobile 
     manufacturer;
       ``(ii) trade unions;
       ``(iii) creditors;
       ``(iv) suppliers;
       ``(v) automobile dealers; and
       ``(vi) shareholders.
       ``(2) Actions of the president's designee.--
       ``(A) In general.--For the purpose of achieving a 
     negotiated plan, the President's designee may convene, chair, 
     and conduct formal and informal meetings, discussions, and 
     consultations, as appropriate, with interested parties of an 
     eligible automobile manufacturer.
       ``(B) Clarification.--The Federal Advisory Committee Act 
     shall not apply with respect to any of the activities 
     conducted or taken by the President's designee pursuant to 
     this title.
       ``(b) Restructuring Plan.--Not later than March 31, 2009, 
     each eligible automobile manufacturer shall submit to the 
     President's designee a restructuring plan to achieve and 
     sustain the long-term viability, international 
     competitiveness, and energy efficiency of the eligible 
     automobile manufacturer (in this title referred to as the 
     `restructuring plan') in accordance with this section. The 
     President's designee shall approve the restructuring plan if 
     the President's designee determines that the plan will result 
     in--
       ``(1) the repayment of all Government-provided financing, 
     consistent with the terms specified in section 408, or 
     otherwise agreed to;
       ``(2) the ability--
       ``(A) to comply with applicable fuel efficiency and 
     emissions requirements;
       ``(B) to commence domestic manufacturing of advanced 
     technology vehicles, as described in section 136 of the 
     Energy Independence and Security Act of 2007 (Public Law 110-
     140; 42 U.S.C. 17013); and
       ``(C) to produce new and existing products and capacity;

[[Page H340]]

       ``(3) the achievement of a positive net present value, 
     using reasonable assumptions and taking into account all 
     existing and projected future costs, including repayment of 
     any financial assistance provided pursuant to this title;
       ``(4) the ability to rationalize costs, capitalization, and 
     capacity with respect to the manufacturing workforce, 
     suppliers, and dealerships of the eligible automobile 
     manufacturer;
       ``(5) proposals to restructure existing debt, including, 
     where appropriate, the conversion of debt to equity, to 
     improve the ability of the eligible automobile manufacturer 
     to raise private capital; and
       ``(6) a product mix and cost structure that is competitive 
     in the marketplace.
       ``(c) Extension of Negotiations and Plan Deadline.--
     Notwithstanding the time limitations in subsection (b), the 
     President's designee, upon making a determination that the 
     interested parties are negotiating in good faith, are making 
     significant progress, and that an additional period of time 
     would likely facilitate agreement on a negotiated plan, and 
     upon notification of the Congress, may extend for not longer 
     than 30 additional days the negotiation period under 
     subsection (b).

     ``SEC. 406. FINANCING FOR RESTRUCTURING.

       ``Upon approval by the President's designee of a 
     restructuring plan, the President's designee may provide 
     financial assistance to an eligible automobile manufacturer 
     to implement the restructuring plan.

     ``SEC. 407. DISAPPROVAL AND CALL OF LOAN.

       ``If the President's designee has not approved the 
     restructuring plan at the expiration of the period provided 
     in section 405 for submission and approval of the 
     restructuring plan, the President's designee shall call the 
     loan or cancel the commitment within 30 days, unless a 
     restructuring plan is approved within that period.

     ``SEC. 408. TERMS AND CONDITIONS.

       ``(a) Duration.--The duration of any loan made under this 
     title shall be 7 years, or such period as the President's 
     designee may determine with respect to such loan.
       ``(b) No Prepayment Penalty.--A loan made under this title 
     shall be prepayable without penalty at any time.
       ``(c) Information Access.--As a condition for the receipt 
     of any financial assistance made under this title, an 
     eligible automobile manufacturer shall agree--
       ``(1) to allow the President's designee to examine any 
     books, papers, records, or other data of the eligible 
     automobile manufacturer, and those of any subsidiary, 
     affiliate, or entity holding an ownership interest of 50 
     percent or more of such automobile manufacturer, that may be 
     relevant to the financial assistance, including compliance 
     with the terms of a loan or any conditions imposed under this 
     title; and
       ``(2) to provide in a timely manner any information 
     requested by the President's designee, including requiring 
     any officer or employee of the eligible automobile 
     manufacturer, any subsidiary, affiliate, or entity referred 
     to in paragraph (1) with respect to such manufacturer, or any 
     person having possession, custody, or care of the reports and 
     records required under paragraph (1), to appear before the 
     President's designee at a time and place requested and to 
     provide such books, papers, records, or other data, as 
     requested, as may be relevant or material.
       ``(d) Oversight of Transactions and Financial Condition.--
       ``(1) Duty to inform.--During the period in which any loan 
     extended under this title remains outstanding, the eligible 
     automobile manufacturer which received such loan shall 
     promptly inform the President's designee of--
       ``(A) any asset sale, investment, contract, commitment, or 
     other transaction proposed to be entered into by such 
     eligible automobile manufacturer that has a value in excess 
     of $100,000,000; and
       ``(B) any other material change in the financial condition 
     of such eligible automobile manufacturer.
       ``(2) Authority of the president's designee.--During the 
     period in which any loan extended under this title remains 
     outstanding, the President's designee may--
       ``(A) review any asset sale, investment, contract, 
     commitment, or other transaction described in paragraph (1); 
     and
       ``(B) prohibit the eligible automobile manufacturer which 
     received the loan from consummating any such proposed sale, 
     investment, contract, commitment, or other transaction, if 
     the President's designee determines that consummation of such 
     transaction would be inconsistent with or detrimental to the 
     long-term viability of the eligible automobile manufacturer.
       ``(3) Procedures.--The President's designee may establish 
     procedures for conducting any review under this subsection.
       ``(e) Consequences for Failure To Comply.--The terms of any 
     financial assistance made under this title shall provide that 
     if--
       ``(1) an evaluation by the President's designee under 
     section 404(b) demonstrates that the eligible automobile 
     manufacturer which received the financial assistance has 
     failed to make adequate progress towards meeting the 
     restructuring progress assessment measures established by the 
     President's designee under section 404(a) with respect to 
     such recipient;
       ``(2) after March 31, 2009, the eligible automobile 
     manufacturer which received the financial assistance fails to 
     submit an acceptable restructuring plan under section 405(b), 
     or fails to comply with any conditions or requirement 
     applicable under this title or applicable fuel efficiency and 
     emissions requirements; or
       ``(3) after a restructuring plan of an eligible automobile 
     manufacturer has been approved by the President's designee, 
     the auto manufacturer fails to make adequate progress in the 
     implementation of the plan, as determined by the President's 
     designee,

     the repayment of any loan may be accelerated to such earlier 
     date or dates as the President's designee may determine and 
     any other financial assistance may be cancelled by the 
     President's designee.

     ``SEC. 409. TAXPAYER PROTECTION.

       ``(a) Warrants.--
       ``(1) In general.--The President's designee may not provide 
     any loan under this title, unless the President's designee, 
     or such department or agency as is designated for such 
     purpose by the President, receives from the eligible 
     automobile manufacturer--
       ``(A) in the case of an eligible automobile manufacturer, 
     the securities of which are traded on a national securities 
     exchange, a warrant giving the right to the President's 
     designee to receive nonvoting common stock or preferred stock 
     in such eligible automobile manufacturer, or voting stock, 
     with respect to which the President's designee agrees not to 
     exercise voting power, whichever the President's designee 
     determines appropriate; or
       ``(B) in the case of an eligible automobile manufacturer 
     other than one described in subparagraph (A), a warrant for 
     common or preferred stock, or an instrument that is the 
     economic equivalent (as determined by the President's 
     designee) of such a warrant in the holding company of the 
     eligible automobile manufacturer, or any company that 
     controls a majority stake in the eligible automobile 
     manufacturer, whichever the President's designee determines 
     appropriate.
       ``(2) Amount.--
       ``(A) In general.--The warrants or instruments described in 
     paragraph (1) shall have a value equal to 20 percent of the 
     aggregate amount of all loans provided to the eligible 
     automobile manufacturer under this title. Such warrants or 
     instruments shall entitle the Government to purchase--
       ``(i) nonvoting common stock, up to a maximum amount of 20 
     percent of the issued and outstanding common stock of--

       ``(I) the eligible automobile manufacturer; or
       ``(II) in the case of an eligible automobile manufacturer, 
     the securities of which are not traded on a national 
     securities exchange, a holding company or company that 
     controls a majority of the stock thereof (in this section 
     referred to as the `warrant common'); and

       ``(ii) preferred stock having an aggregate liquidation 
     preference equal to 20 percent of such aggregate loan amount, 
     less the value of common stock available for purchase under 
     the warrant common (in this section referred to as the 
     `warrant preferred').
       ``(B) Common stock warrant price.--The exercise price on a 
     warrant or instrument described in paragraph (1) shall be--
       ``(i) the 15-day trailing average, as of the day before the 
     date on which any commitment to provide a loan was entered 
     into, of the market price of the common stock of the eligible 
     automobile manufacturer which received any loan under this 
     title; or
       ``(ii) in the case of an eligible automobile manufacturer, 
     the securities of which are not traded on a national 
     securities exchange, the economic equivalent of the market 
     price described in clause (i), as determined by the 
     President's designee.
       ``(C) Terms of preferred stock warrant.--
       ``(i) In general.--The initial exercise price for the 
     preferred stock warrant shall be $0.01 per share or such 
     greater amount as the corporate charter may require as the 
     par value per share of the warrant preferred. The Government 
     shall have the right to immediately exercise the warrants.
       ``(ii) Redemption.--The warrant preferred may be redeemed 
     at any time after exercise of the preferred stock warrant at 
     100 percent of its issue price, plus any accrued and unpaid 
     dividends.
       ``(iii) Other terms and conditions.--Other terms and 
     conditions of the warrant preferred shall be determined by 
     the President's designee to protect the interests of 
     taxpayers.
       ``(3) Application of other provisions of law.--Except as 
     otherwise provided in this section, the requirements for the 
     purchase of warrants under section 113(d)(2) of the Emergency 
     Economic Stabilization Act of 2008 (division A of Public Law 
     110-343) shall apply to any warrant or instrument described 
     in paragraph (1), including the antidilution protection 
     provisions therein.
       ``(b) Executive Compensation and Corporate Governance.--
       ``(1) In general.--During the period in which any financial 
     assistance under this title remains outstanding, the eligible 
     automobile manufacturer which received such assistance shall 
     be subject to--
       ``(A) the standards established by the President's designee 
     under paragraph (2); and
       ``(B) the provisions of section 162(m)(5) of the Internal 
     Revenue Code of 1986, as applicable.
       ``(2) Standards required.--The President's designee shall 
     require any eligible automobile manufacturer which received 
     any financial assistance under this title to meet appropriate 
     standards for executive compensation and corporate 
     governance.

[[Page H341]]

       ``(3) Specific requirements.--The standards established 
     under paragraph (2) shall include--
       ``(A) limits on compensation that exclude incentives for 
     senior executive officers of an eligible automobile 
     manufacturer which received assistance under this title to 
     take unnecessary and excessive risks that threaten the value 
     of such manufacturer during the period that the loan is 
     outstanding;
       ``(B) a provision for the recovery by such automobile 
     manufacturer of any bonus or incentive compensation paid to a 
     senior executive officer based on statements of earnings, 
     gains, or other criteria that are later found to be 
     materially inaccurate;
       ``(C) a prohibition on such automobile manufacturer making 
     any golden parachute payment to a senior executive officer 
     during the period that the loan is outstanding;
       ``(D) a prohibition on such automobile manufacturer paying 
     or accruing any bonus or incentive compensation during the 
     period that the loan is outstanding to the 25 most highly-
     compensated employees; and
       ``(E) a prohibition on any compensation plan that would 
     encourage manipulation of such automobile manufacturer's 
     reported earnings to enhance the compensation of any of its 
     employees.
       ``(4) Divestiture.--During the period in which any 
     financial assistance provided under this title to any 
     eligible automobile manufacturer is outstanding, the eligible 
     automobile manufacturer may not own or lease any private 
     passenger aircraft, or have any interest in such aircraft, 
     except that such eligible automobile manufacturer shall not 
     be treated as being in violation of this provision with 
     respect to any aircraft or interest in any aircraft that was 
     owned or held by the manufacturer immediately before 
     receiving such assistance, as long as the recipient 
     demonstrates to the satisfaction of the President's designee 
     that all reasonable steps are being taken to sell or divest 
     such aircraft or interest.
       ``(5) Definitions.--For purposes of this subsection, the 
     following definitions shall apply:
       ``(A) Senior executive officer.--The term `senior executive 
     officer' means an individual who is one of the top five most 
     highly paid executives of a public company, whose 
     compensation is required to be disclosed pursuant to the 
     Securities Exchange Act of 1934, and any regulations issued 
     thereunder, and non-public company counterparts.
       ``(B) Golden parachute payment.--The term `golden parachute 
     payment' means any payment to a senior executive officer for 
     departure from a company for any reason, except for payments 
     for services performed or benefits accrued.
       ``(c) Prohibition on Payment of Dividends.--Except with 
     respect to obligations owed pursuant to law to any 
     nonaffiliated party or any existing contract with any 
     nonaffiliated party in effect as of December 2, 2008, no 
     dividends or distributions of any kind, or the economic 
     equivalent thereof (as determined by the President's 
     designee), may be paid by any eligible automobile 
     manufacturer which receives financial assistance under this 
     title, or any holding company or company that controls a 
     majority stake in the eligible automobile manufacturer, while 
     such financial assistance is outstanding.
       ``(d) Other Interests Subordinated.--
       ``(1) In general.--In the case of an eligible automobile 
     manufacturer which received a loan under this title, to the 
     extent permitted by the terms of any obligation, liability, 
     or debt of the eligible automobile manufacturer in effect as 
     of December 2, 2008, any other obligation of such eligible 
     automobile manufacturer shall be subordinate to such loan, 
     and such loan shall be senior and prior to all obligations, 
     liabilities, and debts of the eligible automobile 
     manufacturer, and such eligible automobile manufacturer shall 
     provide to the Government, all available security and 
     collateral against which the loans under this title shall be 
     secured.
       ``(2) Applicability in certain cases.--In the case of an 
     eligible automobile manufacturer referred to in paragraph 
     (1), the securities of which are not traded on a national 
     securities exchange, a loan under this title to the eligible 
     automobile manufacturer shall--
       ``(A) be treated as a loan to any holding company of, or 
     company that controls a majority stake in, the eligible 
     automobile manufacturer; and
       ``(B) be senior and prior to all obligations, liabilities, 
     and debts of any such holding company or company that 
     controls a majority stake in the eligible automobile 
     manufacturer.
       ``(e) Additional Taxpayer Protections.--
       ``(1) Discharge.--A discharge under title 11, United States 
     Code, shall not discharge an eligible automobile 
     manufacturer, or any successor in interest thereto, from any 
     debt for financial assistance received pursuant to this 
     title.
       ``(2) Exemption.--Any financial assistance provided to an 
     eligible automobile manufacturer under this title shall be 
     exempt from the automatic stay established by section 362 of 
     title 11, United States Code.
       ``(3) Interested parties.--Notwithstanding any provision of 
     title 11, United States Code, any interest in property or 
     equity rights of the United States arising from financial 
     assistance provided to an eligible automobile manufacturer 
     under this title shall remain unaffected by any plan of 
     reorganization, except as the United States may agree to in 
     writing.

     ``SEC. 410. OVERSIGHT AND AUDITS.

       ``(a) Comptroller General Oversight.--
       ``(1) Scope of oversight.--The Comptroller General of the 
     United States shall conduct ongoing oversight of the 
     activities and performance of the President's designee.
       ``(2) Conduct and administration of oversight.--
       ``(A) GAO presence.--The President's designee shall provide 
     to the Comptroller General appropriate space and facilities 
     for purposes of this subsection.
       ``(B) Access to records.--To the extent otherwise 
     consistent with law, the Comptroller General shall have 
     access, upon request, to any information, data, schedules, 
     books, accounts, financial records, reports, files, 
     electronic communications, or other papers, things, or 
     property belonging to or in use by the President's designee, 
     at such reasonable time as the Comptroller General may 
     request. The Comptroller General shall be afforded full 
     facilities for verifying transactions with the balances or 
     securities held by depositaries, fiscal agents, and 
     custodians. The Comptroller General may make and retain 
     copies of such books, accounts, and other records as the 
     Comptroller General deems appropriate.
       ``(3) Reporting.--The Comptroller General shall submit 
     reports of findings under this section to Congress, regularly 
     and not less frequently than once every 60 days. The 
     Comptroller General may also submit special reports under 
     this subsection, as warranted by the findings of its 
     oversight activities.
       ``(b) Special Inspector General.--It shall be the duty of 
     the Special Inspector General established under section 121 
     of Public Law 110-343 to conduct, supervise, and coordinate 
     audits and investigations of the President's designee in 
     addition to the duties of the Special Inspector General under 
     such section and for such purposes. The Special Inspector 
     General shall also have the duties, responsibilities, and 
     authorities of inspectors general under the Inspector General 
     Act of 1978, including section 6 of such Act. In the event 
     that the Office of the Special Inspector General is 
     terminated, the Inspector General of the Department of the 
     Treasury shall assume the responsibilities of the Special 
     Inspector General under this subsection.
       ``(c) Access to Records of Borrowers by GAO.--
     Notwithstanding any other provision of law, during the period 
     in which any financial assistance provided under this title 
     is outstanding, the Comptroller General of the United States 
     shall have access, upon request, to any information, data, 
     schedules, books, accounts, financial records, reports, 
     files, electronic communications, or other papers, things, or 
     property belonging to or in use by the eligible automobile 
     manufacturer, and any subsidiary, affiliate, or entity 
     holding an ownership interest of 50 percent or more of such 
     eligible automobile manufacturer (collectively referred to in 
     this section as `related entities'), and to any officer, 
     director, or other agent or representative of the eligible 
     automobile manufacturer and its related entities, at such 
     reasonable times as the Comptroller General may request. The 
     Comptroller General may make and retain copies of such books, 
     accounts, and other records as the Comptroller General deems 
     appropriate.

     ``SEC. 411. REPORTING AND MONITORING.

       ``(a) Reporting on Consummation of Loans.--The President's 
     designee shall submit a report to the Congress on each bridge 
     loan made under this title not later than 5 days after the 
     date of the consummation of such loan.
       ``(b) Reporting on Restructuring Progress Assessment 
     Measures.--The President's designee shall submit a report to 
     the Congress on the restructuring progress assessment 
     measures established for each manufacturer under section 
     404(a) not later than 10 days after establishing the 
     restructuring progress assessment measures.
       ``(c) Reporting on Evaluations.--The President's designee 
     shall submit a report to the Congress containing the detailed 
     findings and conclusions of the President's designee in 
     connection with the evaluation of an eligible automobile 
     manufacturer under section 404(b).
       ``(d) Reporting on Consequences for Failure to Comply.--The 
     President's designee shall submit a report to the Congress on 
     the exercise of a right under section 408(e) to accelerate 
     indebtedness of an eligible automobile manufacturer under 
     this title or to cancel any other financial assistance 
     provided to such eligible automobile manufacturer, and the 
     facts and circumstances on which such exercise was based, 
     before the end of the 10-day period beginning on the date of 
     the exercise of the right.
       ``(e) Monitoring.--The President's designee shall monitor 
     the use of loan funds received by eligible automobile 
     manufacturers under this title, and shall report to Congress 
     once every 90 days (beginning 30 days after the date of 
     enactment of this title) on the progress of the ability of 
     the recipient of the loan to continue operations and proceed 
     with restructuring processes that restore the financial 
     viability of the recipient and promote environmental 
     sustainability.

     ``SEC. 412. REPORT TO CONGRESS ON LACK OF PROGRESS TOWARD 
                   ACHIEVING AN ACCEPTABLE NEGOTIATED PLAN.

       ``(a) Authority To Facilitate a Negotiated Plan.--At any 
     such time as the President's designee determines that action 
     is necessary to avoid disruption to the economy or to achieve 
     a negotiated plan, the President's designee shall submit to 
     Congress a report outlining any additional powers and 
     authorities necessary to facilitate

[[Page H342]]

     the completion of a negotiated plan required under section 
     405.
       ``(b) Impediments to Achieving Negotiated Plans.--If the 
     President's designee determines, on the basis of an 
     evaluation by the President's designee of the progress being 
     made by an eligible automobile manufacturer toward meeting 
     the restructuring progress assessment measures established 
     under section 404, that adequate progress is not being made 
     toward achieving a negotiated plan by March 31, 2009, the 
     President's designee shall submit to Congress a report 
     detailing the impediments to achievement of a negotiated plan 
     by the eligible automobile manufacturer.

     ``SEC. 413. SUBMISSION OF PLAN TO CONGRESS BY THE PRESIDENT'S 
                   DESIGNEE.

       ``Upon submission of a report pursuant to section 412(b), 
     the President's designee shall provide to Congress a plan 
     that represents the judgement of the President's designee as 
     to the steps necessary to achieve the long-term viability, 
     international competitiveness, and energy efficiency of the 
     eligible automobile manufacturer, consistent with the factors 
     set forth in section 405(b), including through a negotiated 
     plan, a plan to be implemented by legislation, or a 
     reorganization pursuant to chapter 11 of title 11, United 
     States Code.

     ``SEC. 414. COORDINATION WITH OTHER LAWS.

       ``(a) In General.--No provision of this title may be 
     construed as altering, affecting, or superseding--
       ``(1) the provisions of section 129 of division A of the 
     Consolidated Security, Disaster Assistance, and Continuing 
     Appropriations Act, 2009, relating to funding for the 
     manufacture of advanced technology vehicles;
       ``(2) any existing authority to provide financial 
     assistance or liquidity for purposes of the day-to-day 
     operations in the ordinary course of business or research and 
     development.
       ``(b) Antitrust Provisions.--
       ``(1) In general.--Subject to paragraphs (2) and (4), the 
     antitrust laws shall not apply to meetings, discussions, or 
     consultations among an eligible automobile manufacturer and 
     its interested parties for the purpose of achieving a 
     negotiated plan pursuant to section 405(a)(2).
       ``(2) Exclusions.--Paragraph (1) shall not apply with 
     respect to price-fixing, allocating a market between 
     competitors, monopolizing (or attempting to monopolize) a 
     market, or boycotting.
       ``(3) Antitrust agency participation.--The Attorney General 
     of the United States and the Federal Trade Commission shall, 
     to the extent practicable, receive reasonable advance notice 
     of, and be permitted to participate in, each meeting, 
     discussion, or consultation described in paragraph (1).
       ``(4) Preservation of enforcement authority.--Paragraph (1) 
     shall not be construed to preclude the Attorney General of 
     the United States or the Federal Trade Commission from 
     bringing an enforcement action under the antitrust laws for 
     injunctive relief.
       ``(5) Sunset.--Paragraph (1) shall apply only with respect 
     to meetings, discussions, or consultations that occur within 
     the 3-year period beginning on the date of the enactment of 
     this title.
       ``(6) Definition.--For purposes of this subsection, the 
     term `antitrust laws'--
       ``(A) has the same meaning as in subsection (a) of the 
     first section of the Clayton Act (15 U.S.C. 12(a)), except 
     that such term includes section 5 of the Federal Trade 
     Commission Act (15 U.S.C. 45), to the extent that such 
     section 5 applies to unfair methods of competition; and
       ``(B) includes any provision of State law that is similar 
     to the laws referred to in subparagraph (A).

     ``SEC. 415. TREATMENT OF RESTRUCTURING FOR PURPOSES OF 
                   APPLYING LIMITATIONS ON NET OPERATING LOSS 
                   CARRYFORWARDS AND CERTAIN BUILT-IN LOSSES.

       ``Section 382 of the Internal Revenue Code of 1986 shall 
     not apply in the case of an ownership change resulting from 
     this title or pursuant to a restructuring plan approved under 
     this title.

     ``SEC. 416. CLARIFICATION OF AVAILABILITY OF FINANCIAL 
                   SUPPORT FOR FINANCING ARMS.

       ``The authority of the President's designee to provide 
     assistance to any eligible automobile manufacturer includes 
     the authority to provide support to finance company 
     affiliates of the manufacturer to ensure that such affiliates 
     have the necessary resources to continue to provide needed 
     credit, including through dealer and other financing of 
     consumer and business auto and other vehicle loans and dealer 
     floor plan loans.''.

                  TITLE IV--CLARIFICATION OF AUTHORITY

     SEC. 401. CONSUMER LOANS.

       Title I of the Emergency Economic Stabilization Act of 2008 
     (12 U.S.C. 5211 et seq.) is amended by adding at the end the 
     following new section:

     ``SEC. 137. CLARIFICATION OF AUTHORITY REGARDING CONSUMER 
                   LOANS.

       ``The authority of the Secretary to take any action under 
     this title includes the authority to establish or support 
     facilities to support the availability of consumer loans, 
     including loans for autos and other vehicles and student 
     loans, including through purchase of asset-backed securities, 
     directly or through the Board or any Federal reserve bank.''.

     SEC. 402. MUNICIPAL SECURITIES.

       Section 103 of the Emergency Economic Stabilization Act of 
     2008 (12 U.S.C. 5211) is amended by inserting after 
     subsection (f) (as added by section 401 of this title) the 
     following new subsection:
       ``(g) Clarification of Authority Regarding Municipal 
     Securities.--
       ``(1) Clarification.--The authority of the Secretary to 
     take any action under this title includes the authority to 
     provide support to State and local governments, and other 
     issuers of municipal securities, which are having difficulty 
     accessing appropriate financing in the capital markets. Such 
     support includes the direct purchase of municipal securities 
     and providing credit enhancement in connection with municipal 
     securities whose purchase is financed under any facility 
     provided by the Board or any Federal reserve bank.
       ``(2) Definition.--For purposes of this subsection, the 
     term `municipal security' has the meaning given the term 
     `State or local bond' in section 103(c) of the Internal 
     Revenue Code of 1986 (26 U.S.C. 103(c)) and the regulations 
     issued thereunder.''.

     SEC. 403. COMMERCIAL REAL ESTATE LOANS.

       Title I of the Emergency Economic Stabilization Act of 2008 
     (12 U.S.C. 5211 et seq.) is amended by adding after section 
     137 (as added by section 401 of this title) the following new 
     section:

     ``SEC. 138. CLARIFICATION OF AUTHORITY REGARDING COMMERCIAL 
                   REAL ESTATE LOANS.

       ``The authority of the Secretary to take any action under 
     this title includes the authority to establish or support 
     facilities to support the availability of commercial real 
     estate loans, including through purchase of asset-backed 
     securities, directly or through the Board of Governors of the 
     Federal Reserve System or any Federal reserve bank.''.

           TITLE V--HOPE FOR HOMEOWNERS PROGRAM IMPROVEMENTS

     SEC. 501. CHANGES TO HOPE FOR HOMEOWNERS PROGRAM.

       Section 257 of the National Housing Act (12 U.S.C. 1715z-
     23) is amended--
       (1) in subsection (e)--
       (A) by striking paragraph (1);
       (B) in paragraph (2)(B), by striking ``90 percent'' and 
     inserting ``93 percent'';
       (C) by striking paragraph (7);
       (D) in paragraph (9), by striking ``by procuring'' and all 
     that follows through ``by any other method''; and
       (E) by redesignating paragraphs (2), (3), (4), (5), (6), 
     (8), (9), (10), and (11) as paragraphs (1), (2), (3), (4), 
     (5), (6), (7), (8), and (9), respectively;
       (2) in subsection (h)(2), by striking ``, or in any case in 
     which a mortgagor fails to make the first payment on a 
     refinanced eligible mortgage'';
       (3) by striking subsection (i) and inserting the following 
     new subsection:
       ``(i) Annual Premiums.--
       ``(1) In general.--For each refinanced eligible mortgage 
     insured under this section, the Secretary shall establish and 
     collect an annual premium in an amount equal to not less than 
     0.55 percent of the amount of the remaining insured principal 
     balance of the mortgage and not more than 0.75 percent of 
     such remaining insured principal balance, as determined 
     according to a schedule established by the Board that assigns 
     such annual premiums based upon the credit risk of the 
     mortgage.
       ``(2) Reduction or termination during mortgage term.--
     Notwithstanding paragraph (1), the Secretary may provide that 
     the annual premiums charged for refinanced eligible mortgages 
     insured under this section are reduced over the term of the 
     mortgage or that the collection of such premiums is 
     discontinued at some time during the term of the mortgage, in 
     a manner that is consistent with policies for such reduction 
     or discontinuation of annual premiums charged for mortgages 
     in accordance with section 203(c).'';
       (4) in subsection (k)--
       (A) by striking the subsection heading and inserting ``Exit 
     Fee'';
       (B) in paragraph (1), in the matter preceding subparagraph 
     (A), by striking ``such sale or refinancing'' and inserting 
     ``the mortgage being insured under this section''; and
       (C) by striking paragraph (2);
       (5) in subsection (s)(3)(A)(ii), by striking ``subsection 
     (e)(1)(B) and such other'' and inserting ``such'';
       (6) in subsection (v), by inserting after the period at the 
     end the following: ``The Board shall conform documents, 
     forms, and procedures for mortgages insured under this 
     section to those in place for mortgages insured under section 
     203(b) to the maximum extent possible consistent with the 
     requirements of this section.'';
       (7) in subsection (w)(1)(C), by striking ``(e)(4)(A)'' and 
     inserting ``(e)(3)(A)''; and
       (8) by adding at the end the following new subsection:
       ``(x) Payment to Existing Loan Servicer.--The Board may 
     establish a payment to the servicer of the existing senior 
     mortgage for every loan insured under the HOPE for Homeowners 
     Program.''.

     SEC. 502. FUNDING OF INCREASED HOPE FOR HOMEOWNERS PROGRAM 
                   CREDIT SUBSIDY COSTS.

       Section 257 of the National Housing Act (12 U.S.C. 1715z-
     23) is amended by adding after subsection (x) (as added by 
     section 501 of this title) the following new subsection:
       ``(y) Funding of Credit Subsidy Costs of 2009 Amendments.--
     Notwithstanding section

[[Page H343]]

     1338(b) of the Housing and Community Development Act of 1992 
     (12 U.S.C. 4568(b)) and subsection (w) of this section--
       ``(1) to the extent amounts are available to the Secretary 
     of the Treasury pursuant to section 118 of the Emergency 
     Economic Stabilization Act of 2008, the Secretary shall use 
     such amounts to cover any increase in the net costs to the 
     Federal Government of the HOPE for Homeowners program under 
     this section resulting from the amendments made by title V of 
     the TARP Reform and Accountability Act of 2009, and actions 
     authorized by title I of the Emergency Economic Stabilization 
     Act of 2008 shall include such use; and
       ``(2) any remaining net costs to the Federal Government of 
     the HOPE for Homeowners program under this section not 
     resulting from the amendments made under this title shall be 
     paid, and the Secretary of the Treasury shall be reimbursed 
     for such costs, in accordance with the provisions of such 
     section 1338 and subsection (w) of this section.''.

                     TITLE VI--HOME BUYER STIMULUS

     SEC. 601. HOME BUYER STIMULUS PROGRAM.

       (a) In General.--The Secretary of the Treasury (in this 
     title referred to as the ``Secretary'') shall carry out a 
     program using the authority made available by section 1117 of 
     the Housing and Economic Recovery Act of 2008 to stimulate 
     demand for home purchases and reduce unsold inventories of 
     residential properties, which shall include ensuring the 
     availability of affordable interest rates on mortgages made 
     for the purchase, by qualified home buyers, of 1- to 4-family 
     residential properties.
       (b) Purchase Obligations and Securities Using HERA 
     Authority.--The Secretary shall execute the program under 
     this section through the purchase of obligations and other 
     securities issued by--
       (1) the Federal National Mortgage Association, pursuant to 
     the authority under section 304(g) of the Federal National 
     Mortgage Association Charter Act (12 U.S.C. 1719(g)),
       (2) the Federal Home Loan Mortgage Corporation, pursuant to 
     the authority under section 304(l) of the Federal Home Loan 
     Mortgage Corporation Act (12 U.S.C. 1455(l)), and
       (3) any Federal Home Loan Bank, pursuant to the authority 
     under section 11(l) of the Federal Home Loan Bank Act (12 
     U.S.C. 1431(l)),

     as added by section 1117 of the Housing and Economic Recovery 
     Act of 2008 (Public Law 110-289).
       (c) Use of Loan Originators and Portfolio Lenders.--The 
     program under this section shall provide mechanisms to ensure 
     availability of such mortgages for home purchase having 
     affordable interest rates through financial institutions that 
     act as loan originators or as portfolio lenders.
       (d) Availability of Affordable Loans Under HOPE for 
     Homeowners Program.--The Secretary, in consultation with the 
     Secretary of Housing and Urban Development, shall ensure that 
     the affordable interest rates made available through the 
     program under this section are made available in connection 
     with mortgages made for refinancing eligible mortgages, as 
     such term is defined in section 257 of the National Housing 
     Act (12 U.S.C. 1715z-23), to be insured under the HOPE for 
     Homeowners Program under such section.
       (e) Targeting.--In carrying out the program under this 
     section, the Secretary may take into consideration the impact 
     of activities under the program on geographical areas having 
     the greatest number of properties with foreclosed-upon 
     mortgages.

                       TITLE VII--FDIC PROVISIONS

     SEC. 701. PERMANENT INCREASE IN DEPOSIT INSURANCE.

       (a) Amendments to Federal Deposit Insurance Act.--Section 
     11(a)(1) of the Federal Deposit Insurance Act (12 U.S.C. 
     1821(a)) is amended--
       (1) in paragraph (1)(E), by striking ``$100,000'' and 
     inserting ``$250,000''
       (2) in paragraph (1)(F)(i), by striking ``2010'' and 
     inserting ``2015'';
       (3) in subclause (I) of paragraph (1)(F)(i), by striking 
     ``$100,000'' and inserting ``$250,000'';
       (4) in subclause (II) of paragraph (1)(F)(i), by striking 
     ``the calendar year preceding the date this subparagraph 
     takes effect under the Federal Deposit Insurance Reform Act 
     of 2005'' and inserting ``calendar year 2008''; and
       (5) in paragraph (3)(A)(iii), by striking ``, except that 
     $250,000 shall be substituted for $100,000 wherever such term 
     appears in such paragraph''.
       (b) Repeal of EESA Provision.--Section 136 of the Emergency 
     Economic Stabilization Act (Public Law 110-343; 122 Stat. 
     3765) is hereby repealed.
       (c) Amendment to Federal Credit Union Act.--Section 207(k) 
     of the Federal Credit Union Act (12 U.S.C. 1787(k) is 
     amended--
       (1) in paragraph (3)--
       (A) by striking the opening quotation mark before 
     ``$250,000'';
       (B) by striking ``, except that $250,000 shall be 
     substituted for $100,000 wherever such term appears in such 
     section''; and
       (C) by striking the closing quotation mark after the 
     closing parenthesis; and
       (2) in paragraph (5), by striking ``$100,000'' and 
     inserting ``$250,000'';

     SEC. 702. EXTENSION OF RESTORATION PLAN PERIOD.

       Section 7(b)(3)(E)(ii) of the Federal Deposit Insurance Act 
     (12 U.S.C. 1817(b)(3)(E)(ii)) is amended by striking ``5-year 
     period'' and inserting ``8-year period''.

     SEC. 703. BORROWING AUTHORITY.

       Section 14(a) of the Federal Deposit Insurance Act (12 
     U.S.C. 1814(a)) is amended--
       (1) by striking ``$30,000,000,000'' and inserting 
     ``$100,000,000,000''; and
       (2) by inserting prior to the last sentence, the following 
     new sentence: ``The Corporation may request in writing to 
     borrow, and the Secretary may authorize and approve the 
     borrowing of, additional amounts above $100,000,000,000 to 
     the extent that the Board of Directors and the Secretary 
     determine such borrowing to be necessary.''.

     SEC. 704. SYSTEMIC RISK SPECIAL ASSESSMENTS.

       Section 13(c)(4)(G)(ii) of the Federal Deposit Insurance 
     Act (12 U.S.C. 1823(c)(4)(G)(ii)) is amended to read as 
     follows:
       ``(ii) Repayment of loss.--

       ``(I) In general.--The Corporation shall recover the loss 
     to the Deposit Insurance Fund arising from any action taken 
     or assistance provided with respect to an insured depository 
     institution under clause (i) from 1 or more special 
     assessments on insured depository institutions, depository 
     institution holding companies (with the concurrence of the 
     Secretary of the Treasury with respect to holding companies), 
     or both, as the Corporation determines to be appropriate.
       ``(II) Treatment of depository institution holding 
     companies.--For purposes of this clause, sections 7(c)(2) and 
     18(h) shall apply to depository institution holding companies 
     as if they were insured depository institutions.
       ``(III) Regulations.--The Corporation shall prescribe such 
     regulations as it deems necessary to implement this clause. 
     In prescribing such regulations, defining terms, and setting 
     the appropriate assessment rate or rates, the Corporation 
     shall consider: the types of entities that benefit from any 
     action taken or assistance provided under this subparagraph; 
     economic conditions; the effects on the industry; and such 
     other factors as the Corporation deems appropriate.''.

  Mr. DAVIS of Illinois. Mr. Chair, I rise in strong support of the 
TARP Reform and Accountability Act. This bill greatly strengthens the 
safeguards for using taxpayer dollars for the TARP program. Two 
provisions promise to provide critical aid to Chicago. Requiring the 
Treasury to direct $100 billion to foreclosure mitigation provides hope 
to the hundreds of thousands of Chicagoans and families across the 
Nation who are struggling with foreclosure. Moreover, directing the 
Treasury to use TARP funds to benefit small financial institutions will 
help strengthen these financial institutions that play such an 
important role in Chicago. Hundreds of community banks in Chicago are 
teetering on collapse. These companies provide important support to 
small businesses and minorities, and, as of yet, they have not received 
aid from the Treasury.
  I especially want to thank Chairman Frank for including language that 
highlights the importance of considering consumer protections when 
determining which classes of consumer loans to support. Congresswoman 
Yvette Clarke and I have worked actively along with 16 other Members to 
urge the Treasury and Federal Reserve to proceed cautiously when using 
taxpayer funds for the student loan industry, ensuring that both 
financial and consumer protections are considered. We strongly support 
ensuring that students have the money they need to attend institutions 
of higher education. However, we must make certain that any such plan 
aids students and does not simply line the pockets of for-profit 
lenders.
  Certain groups of students require private student loans to attend 
school. Unlike Federal student loans, private student loans typically 
lack any form of consumer protection (such as fixed interest rates, 
income-contingent and income-based repayment options, or debt discharge 
in the case of disability or death). Moreover, private student loan 
lenders enjoy Federal protections from bankruptcy that other consumer 
creditors do not. Specifically, unlike other types of consumer debt, 
private student loans are protected from discharge during bankruptcy 
except under extreme circumstances. Thus, an individual who accumulates 
thousands of dollars in debt for purchases of cars or luxury goods can 
obtain relief via bankruptcy; however, a teacher with private student 
loans cannot.
  Given these circumstances, we hope the Treasury and Federal Reserve 
will construct its student loan plan carefully to mitigate against 
adverse consequences for private student loan borrowers, especially in 
light of current economic conditions. Should taxpayer money be used to 
support private student lenders of non-federal loans, we strongly urge 
that the Treasury and Federal Reserve require consumer protections 
similar to those afforded to Federal student loans as a condition of 
receipt of Federal rescue funds. Federal student loans have consumer 
protections; private student loans subsidized by the Treasury-Fed plan 
should have such protections as well. Further, we recommend instituting 
steps to assess the underwriting standards of lenders who seek Federal 
relief to determine if the

[[Page H344]]

lenders extended credit to particularly vulnerable consumers and 
whether credit was extended with onerous terms or conditions. Similar 
to the executive compensation restrictions of the Treasury-Fed plan, 
these restrictions would help focus Federal dollars on stimulating 
lending while protecting taxpayers and borrowers.
  I thank Chairman Frank and House leadership for developing this bill, 
and I urge my colleagues to support its passage.
  Mr. HOYER. Mr. Chair, last fall, at the urging of President Bush, 
Treasury Secretary Paulson, and Federal Reserve Chairman Bernanke, 
Congress took extraordinary action to stabilize America's financial 
markets and limit the scope of an economic crisis. I know that the 
Troubled Assets Relief Program (TARP) was one of the most difficult 
votes that anyone in this Chamber had ever taken. But passing that bill 
was the right thing to do--and even with all of the turmoil of the past 
months, my mind hasn't changed.
  On the other hand, I don't think anyone in this Chamber is happy with 
TARP, either. As it has done so many times in the last 8 years, the 
Bush administration failed to follow congressional intent when it came 
to executing a law. The administration has failed to fight the wave of 
foreclosures at the source of this crisis, and it did too little to 
maximize the effectiveness of TARP funds in helping to restore our 
economy's flow of credit. Nor did the administration adequately track 
how taxpayer money was spent to ensure that banks were using it for the 
intended purposes.
  We cannot in good conscience approve another $350 billion request 
without confidence that those failures will be remedied.
  This bill strengthens accountability and oversight measures, so that 
we can get necessary loans flowing again to families and businesses. It 
requires detailed reports from recipients of TARP funds and ensures 
that those funds un-thaw credit. It provides even stronger limits on 
executive compensation, so that taxpayers can be sure their money is 
not funding million-dollar Park Avenue apartments for CEOs. It 
clarifies the Treasury Department's authority to use TARP funds to 
benefit small financial institutions, auto companies, consumers, and 
municipalities. And it insists that Treasury immediately commit $100 
billion to fight foreclosures and help Americans keep their homes.
  President-elect Obama has promised that ``we are going to 
fundamentally change some of the practices in using this next phase of 
the program.'' I agree wholeheartedly, and this bill is a strong first 
step toward that change. But I also want to make clear that the same 
high standards of oversight ought to apply to any administration, 
Republican or Democratic. TARP funds must be watched with the same 
diligence we would expect from any lender--and how much more so when 
the source of the funds is the American taxpayer, when the principal 
runs into twelve digits, and when the stakes are so high?
  Mr. Chair, Lyndon Johnson said--in words I've quoted before on this 
floor and I'm sure I'll quote again--``It's not hard to do the right 
thing. It's hard to know what the right thing is.''
  In this crisis, the problems are as complex as our end goal is 
simple: Businesses hiring, families thriving, America growing once 
again. But I am convinced that passing this bill is the right thing 
today. I hope and trust that my colleagues will see it the same way.
  Ms. CORRINE BROWN of Florida. Mr. Chair, I want to thank Chairman 
Frank for his leadership in developing this bill. I appreciate the time 
you and your staff have spent on the issues important to the American 
people. You were instrumental in getting an amendment regarding tax 
credits in the manager's amendment.
  I want to speak on the situation today. I voted for TARP when it was 
brought up last year. I am extremely disappointed as to how the banking 
industry used the taxpayer funds.
  The way the administration disbursed the first half of the TARP funds 
was not in the interest of the American people. It was in the interest 
of those who caused this crisis in the first place. The investment 
bankers, and elite financiers in New York were the first in line to 
claim some money and then left nothing for the people holding the bag, 
the homeowners and the small businesspeople like those from my district 
in Florida.
  The administration moved from helping those who held mortgages that 
were in foreclosure to bailing out the large banks. These banks took 
that money and put it in their pockets. They paid their shareholders 
and continued to pay bonuses to their executives. The banks called in 
their loans and eliminated lines of credit. They bought other banks. 
They closed businesses and used every legal means to get as much money 
as they could. What the banking industry did was not our intent.
  The Europeans used the government money to help stimulate the 
economy. Every pound or euro given to banks was required to be loaned 
out. As opposed to the banks here who called in loans and did away with 
lines of credit.
  I would like to ask Chairman Frank a couple of questions at this 
time:
  ``Chairman Frank, I am very concerned the money we are authorizing 
for the TARP program will not make it to the American people and will 
not be used for what we are intending it to be used for. We need to get 
money to people for (1) to end the foreclosures, of which thousands a 
day are happening all over the country, (2) auto loans--people can't 
get credit to buy a car and (3) school loans--the banks are calling in 
the notes, prohibiting our young people from getting an education.
  The American people need this money.
  What protections have you included in the bill to ensure this 
happens?''
  Second, I have a question regarding the re-appraisal of real estate 
collateral that is affecting the home builders in our country. I have 
an amendment in front of the rules committee which would permit lenders 
to extend or modify loan terms for home builders, so they could 
continue to pay interest without forcing them to pay large sums to the 
principal while in this economic crisis.
  I understand this issue is not covered by this bill. What assurances 
do I have that you will consider this issue in the future in your 
committee?
  Mr. Chairman, thank you very much for your explanations. In my 
district, along with most of the country, people cannot get the loans 
to consume, which is the basis for our economy. I am pleased you 
included these provisions in the bill, to help small businesses all 
over our country.
  Thank you for your hard work on this bill, to bring relief to those 
who are suffering from foreclosures and for your firm leadership on 
this issue for the many years you have served the people of 
Massachusetts and America.
  It is important the TARP funds being spent by the Administration be 
used for the benefit of the American people. From what I have seen, it 
does not.
  Mr. DINGELL. Mr. Chairman, I rise in support of the manager's 
amendment to H.R. 384, the ``TARP Reform and Accountability Act of 
2009.'' Let me begin by thanking the distinguished chairman of the 
Committee on Financial Services for his fine work on H.R. 384, as well 
as for his cooperation in the past in my efforts to ensure that TARP 
funds were made available to the domestic automotive industry, as well 
as to domestic automotive financing companies. I look forward to 
working with him in the future to see that TARP funds are properly 
allocated and their use and effectiveness be subject to impartial 
oversight by the Congress.
  As debate on the use of TARP funds has progressed, I have 
consistently maintained that recipients of those funds all be subject 
to uniform oversight requirements. It pleases me that the manager's 
amendment to H.R. 384 includes additional public reporting requirements 
for entities that have received or will receive TARP funds in the 
future.
  The question of oversight aside, I have also long maintained that the 
root of the Nation's current economic crisis lies in the collapse of 
the housing market. Too little has been done in the past year to 
stabilize the market and help financially distressed homeowners. The 
manager's amendment wisely addresses this problem by requiring that a 
specific portion of the next tranche of TARP funds be dedicated to 
mitigate foreclosures on residential mortgages within 7 days of 
enactment of H.R. 384. This is of particular importance and will 
hopefully be of great assistance to my State, Michigan, which 
unfortunately has one of the Nation's highest foreclosure rates.
  While stabilizing the housing market is a large part of the solution 
to the current recession, I must reiterate my belief that the Congress 
should take action to support the domestic manufacturing industry, and 
in particular, our ailing automakers. I would note that foreign markets 
for automobiles are contracting, and other governments are 
contemplating or have already taken measures to help automakers with 
production facilities in their countries. A key part of the automotive 
industry's troubles in the United States is the lack of credit 
available to consumers. The manager's amendment retains H.R. 384's 
grant of authority to the Treasury to provide support to the financing 
arms of automakers, which will in turn allow consumers and businesses 
access to previously unavailable lines of credit for the purchase of 
new vehicles. I voice my wholehearted support for this sensible 
provision, especially as the collective future of our automakers is 
tied directly to the health of their financing arms.
  I would again thank the chairman for his gracious cooperation in the 
past on this and many other issues. The manager's amendment contains 
prudent measures to improve oversight and administration of the 
Troubled Asset Relief Program, and I would urge my colleagues to 
support its passage.
  The Acting CHAIR. No amendment to the bill is in order except those 
printed in House Report 111-3. Each

[[Page H345]]

amendment may be offered only in the order printed in the report, by a 
Member designated in the report, shall be considered read, shall be 
debatable for the time specified in the report, equally divided and 
controlled by the proponent and an opponent of the amendment, shall not 
be subject to amendment, and shall not be subject to a demand for 
division of the question.


         Amendment No. 1 Offered by Mr. Frank of Massachusetts

  The Acting CHAIR. It is now in order to consider amendment No. 1 
printed in House Report 111-3.
  Mr. FRANK of Massachusetts. I rise to offer that amendment, Mr. 
Chairman.
  The Acting CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 1 offered by Mr. Frank of Massachusetts:
       Page 3, line 16, after the period insert the following: 
     ``Such reporting may be required directly for nondepository 
     institutions or through the appropriate Federal banking 
     agency, as provided in section 103.''.
       Page 4, line 15, strike ``As'' and insert ``Except as 
     provided in section 105, as''.
       Page 4, line 18, before the second comma insert ``made 
     after the date of the enactment of the TARP Reform and 
     Accountability Act of 2009''.
       Page 5, line 1, strike ``funding'' and insert 
     ``assistance''.
       Page 5, line 10, strike ``funds'' and insert 
     ``assistance''.
       Page 6, line 23, strike ``funds'' and insert 
     ``assistance''.
       Page 7, after line 11, insert the following:
       (4) Renter protection.--In the case of any foreclosure on 
     any dwelling or residential real property securing an 
     extension of credit made under a contract entered into after 
     the date of the enactment of this Act, any successor in 
     interest in such property pursuant to the foreclosure shall 
     assume such interest subject to--
       (A) the provision, by the successor in interest, of a 
     notice to vacate to any bona fide tenant at least 90 days 
     before the effective date of the notice to vacate; and
       (B) the rights of any bona fide tenant, as of the date of 
     such notice of foreclosure--
       (i) under any bona fide lease entered into before the 
     notice of foreclosure to occupy the premises until the end of 
     the remaining term of the lease or the end of the 6-month 
     period beginning on the date of the notice of foreclosure, 
     whichever occurs first, subject to the receipt by the tenant 
     of the 90-day notice under subparagraph (A); or
       (ii) without a lease or with a lease terminable at will 
     under State law, subject to the receipt by the tenant of the 
     90-day notice under subparagraph (A).
       (5) Bona fide lease or tenancy.--For purposes of this 
     paragraph (1), a lease or tenancy shall be considered bona 
     fide only if--
       (A) the mortgagor under the contract is not the tenant;
       (B) the lease or tenancy was the result of an arms-length 
     transaction; or
       (C) the lease or tenancy requires the receipt of rent that 
     is not substantially less than fair market rent for the 
     property.
       Page 7, line 14, strike ``may permit an'' and insert 
     ``shall permit an assisted''.
       Page 7, line 18, before the first period insert the 
     following: ``, and when such assistance is repaid, the 
     Secretary shall liquidate warrants associated with such 
     assistance at the current market price''.
       Page 8, line 6, strike ``means'' and insert ``mean''.
       Page 8, strike lines 19 through 21 and insert the 
     following:
       ``(1) Standards required.--Notwithstanding any''.
       Page 8, line 25, strike ``assisted institution'' and insert 
     ``institution that became an assisted institution after the 
     date of the enactment of the TARP Reform and Accountability 
     Act of 2009''.
       Page 9, lines 6 through 8, strike ``an assisted institution 
     which received assistance under this title'' and insert 
     ``such institution''.
       Page 10, strike lines 5 through 16.
       Page 10, line 17, strike ``(4)'' and insert ``(3)''.
       Page 10, line 23, strike ``on or after'' and insert 
     ``before''.
       Page 12, line 24, before the first period, insert ``, and 
     shall require such reports to be provided to the appropriate 
     State bank supervisor (as defined in section 3 of the Federal 
     Deposit Insurance Act)''.
       Page 13, line 4 and 5, strike ``striking paragraph (1) and 
     inserting'' and inserting ``adding at the end''.
       Strike line 6 on page 13 and all that follows through page 
     16, line 18, and insert the following:
       ``(4) Amount.--For assistance provided after the date of 
     the enactment of the TARP Reform and Accountability Act of 
     2009, and except as provided in title III of such Act, the 
     warrants or instruments described in this section shall have 
     a value at least equal to 15 percent of the aggregate amount 
     of such assistance.''.
       Strike line 23 on page 16 and all that follows through page 
     17, line 2.
       Page 17, line 6, strike ``make available funds'' and insert 
     ``provide assistance''.
       Page 17, line 8, before the period insert ``, including 
     such institutions that are privately held''.
       Page 17, strike lines 9 through 12 and insert the 
     following:
       (b) Comparable Terms.--An institution that receives 
     assistance after the date of the enactment of the TARP Reform 
     and Accountability Act of 2009, shall do so on terms 
     comparable to the terms applicable to institutions that 
     received assistance prior to the date of the enactment of 
     such Act of 2009: Provided, That the institution--
       Page 17, line 13, strike ``have submitted applications'' 
     and inserting ``has submitted an application''.
       Page 17, line 18, strike ``are'' and insert ``is''.
       Page 17, line 25, strike the comma and insert a period.
       Page 18, strike lines 1 through 3.
       Page 19, after line 12, insert the following:

     SEC. 107. INCLUSION OF WOMEN AND MINORITIES.

       (a) Office of Minority and Women Inclusion.--The Secretary 
     of the Treasury shall establish an Office of Minority and 
     Women Inclusion, or designate an office of the entity, that 
     shall be responsible for carrying out this section and 
     ensuring compliance by the Secretary and each assisted 
     institution (as such term is defined in section 3 of the 
     Emergency Economic Stabilization Act of 2008) with the 
     requirements of this section. The Office shall be responsible 
     for all matters of the entity relating to diversity in 
     management, employment, and business activities in accordance 
     with such standards and requirements as the Secretary shall 
     establish regarding the use of assistance provided under 
     title I of such Act.
       (b) Inclusion in All Levels of Business Activities.--The 
     Secretary and each assisted institution shall develop and 
     implement standards and procedures to ensure, to the maximum 
     extent possible, the inclusion and utilization of minorities 
     (as such term is defined in section 1204(c) of the Financial 
     Institutions Reform, Recovery, and Enforcement Act of 1989 
     (12 U.S.C. 1811 note)) and women, and minority- and women-
     owned businesses (as such terms are defined in section 
     21A(r)(4) of the Federal Home Loan Bank Act (12 U.S.C. 
     1441a(r)(4)) (including financial institutions, investment 
     banking firms, mortgage banking firms, asset management 
     firms, broker-dealers, financial services firms, 
     underwriters, accountants, brokers, investment consultants, 
     and providers of legal services) in all business and 
     activities of the Secretary and each assisted institution at 
     all levels, including in procurement, insurance, and all 
     types of contracts (including contracts for the issuance or 
     guarantee of any debt, equity, or mortgage-related 
     securities, the management of its mortgage and securities 
     portfolios, the making of its equity investments, the 
     purchase, sale and servicing of single- and multi-family 
     mortgage loans, and the implementation of its affordable 
     housing program and initiatives). The processes established 
     by the Secretary and each assisted institution for review and 
     evaluation for contract proposals and to hire service 
     providers shall include a component that gives consideration 
     to the diversity of the applicant.
       (c) Applicability.--This section shall apply to all 
     contracts of the Secretary of the Treasury and assisted 
     institutions for services of any kind, including services 
     that require the services of investment banking, asset 
     management entities, broker-dealers, financial services 
     entities, underwriters, accountants, investment consultants, 
     and providers of legal services.
       (d) Reports to Congress.--Not later than 180 days after the 
     date of the enactment of this Act, the Secretary shall report 
     to the Congress detailed information describing the actions 
     taken by the Office and assisted institutions pursuant to 
     this section, which shall include a statement of the total 
     amounts provided by the Secretary and assisted institutions 
     under title I of the Emergency Economic Stabilization Act of 
     2008 to third party contractors since the last such report 
     and the percentage of such amounts paid to businesses 
     described in subsection (b) of this section.

     SEC. 108. ANALYSIS OF USE OF ASSISTANCE.

       (a) Requirement.--The Secretary of the Treasury shall 
     regularly analyze timely and detailed information concerning 
     the use of assistance provided under title I of the Emergency 
     Economic Stabilization Act of 2008 by assisted institutions 
     to ensure that the program established under title I of such 
     Act is meeting the goals of the program.
       (b) Agency Collection.--The Secretary of the Treasury shall 
     require the Federal banking agencies (as defined in section 3 
     of the Federal Deposit Insurance Act) and any other Federal 
     agency the Secretary chooses to report detailed information 
     to the Secretary on the use of assistance provided by the 
     Secretary under the Emergency Economic Stabilization Act of 
     2008 in a standard electronic form on no less than a 
     quarterly basis.
       (c) Source of Information.--The data collected and analyzed 
     under subsections (a) and (b)--
       (1) shall come from existing reports filed by all assisted 
     institutions where possible, including depository 
     institutions and nondepository institutions, with the 
     principal Federal regulator of each such institution, if any; 
     and
       (2) and should be sufficiently detailed and timely to 
     enable the Secretary to determine the effectiveness of the 
     program established

[[Page H346]]

     under title I of the Emergency Economic Stabilization Act of 
     2008 in stimulating prudent lending and strengthening bank 
     capital.
       (d) Adjustments and Recommendations.-- If the Secretary of 
     the Treasury determines that--
       (1) the goals of the program established under title I of 
     the Emergency Economic Stabilization Act of 2008 are not 
     being met, the Secretary shall work with the Federal agencies 
     supplying the information under subsection (b) to encourage 
     such agencies to provide the recipients of assistance under 
     such title with recommendations for better meeting the goals 
     of the program; and
       (2) the goals of the program are not being met following 
     the recommendations and adjustments made in accordance with 
     paragraph (1), the Secretary shall adjust the future uses of 
     assistance provided under such title.

     SEC. 109. DATABASE OF USE OF TARP FUNDS.

       The Secretary of the Treasury shall create and maintain a 
     fully searchable database, accessible on the Internet at no 
     cost to the public, that contains the name of each entity 
     receiving funds made available under section 115(a) of the 
     Emergency Economic Stabilization Act of 2008 (12 U.S.C. 
     5225(a)) and the purpose for which such entity is receiving 
     such funds.
       Page 19, line 13, strike ``107'' and insert ``110''.
       Page 19, line 16, strike ``subsection'' and insert 
     ``subsections''.
       Page 19, line 20, strike the quotation marks and the last 
     period.
       Page 19, line after line 20, insert the following:
       ``(g) Qualified Property.--
       ``(1) Guarantee.--Upon the request of a lessee of qualified 
     property in leases where the lessee economically defeased its 
     rent and purchase option payments, the Secretary may serve as 
     a guarantor with respect to all payment obligations of such 
     lessee with respect to any defeased lease transaction that is 
     in technical default because of a downgrade of a financial 
     guarantor. Such guarantee shall be on such terms and 
     conditions as are determined by the Secretary.
       ``(2) Definitions.--For purposes of this subsection, the 
     following definitions shall apply:
       ``(A) Qualified property.--The term `qualified property' 
     means domestic property subject to a lease entered into prior 
     to November 1, 2007, in which a State or local government 
     authority (as defined in section 5302(a) of title 49, United 
     States Code) is the lessee.
       ``(B) Guarantor.--The term `guarantor' includes any 
     guarantor, surety, and payment undertaker.''.
       Page 20, before line 1 insert the following new section:

     SEC. 111. INVESTMENT OF TARP FUNDS IN CREDIT UNIONS TAKEN 
                   INTO ACCOUNT IN DETERMINATION OF NET WORTH.

       (a) In General.--Section 216(o)(2) of the Federal Credit 
     Union Act (12 U.S.C. 1790d(o)(2)) is amended by striking 
     subparagraph (A) and inserting the following new 
     subparagraph:
       ``(A) with respect to any insured credit union, means--
       ``(i) the retained earnings balance of the credit union, as 
     determined under generally accepted accounting principles, 
     together with any amounts that were previously the retained 
     earnings of any other credit union with which the credit 
     union has combined; and
       ``(ii) any donated equity, permanent, and perpetual capital 
     deposits, or other primary capital made available under Title 
     I of the Emergency Economic Stabilization Act of 2008, as 
     determined by regulation or order of the Board with due 
     regard for the accepted capital standards for United States 
     depository institutions generally; and''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect at the end of the 30-day period beginning 
     on the date of the enactment of this Act.

     SEC. 112. TREASURY FACILITATED AUCTION.

       Section 113(b) of the Emergency Economic Stabilization Act 
     of 2008 (12 U.S.C. 5223(b)) is amended to read as follows:
       ``(b) Use of Market Mechanisms.--
       ``(1) In general.--In making purchases under this Act, the 
     Secretary shall--
       ``(A) make such purchases at the lowest price that the 
     Secretary determines to be consistent with the purposes of 
     this Act; and
       ``(B) maximize the efficiency of the use of taxpayer 
     resources by using market mechanisms, including auctions or 
     reverse auctions, where appropriate.
       ``(2) Auction facilitation.--
       ``(A) In general.--The Secretary shall, in coordination 
     with institutions that volunteer to participate, and not 
     using any funds under this title for purchases, facilitate an 
     auction of troubled assets owned by such institutions to 
     third party purchasers.
       ``(B) Report.--If the auction described in subparagraph (A) 
     does not take place within the 3 month period following the 
     date of the enactment of the TARP Reform and Accountability 
     Act of 2009, the Secretary shall issue a report to the 
     Congress stating--
       ``(i) why such auction has not taken place; and
       ``(ii) by what mechanism the Secretary feels that troubled 
     assets could most expeditiously be valued and liquidated.''.
       Page 20, after line 4, insert the following:
       (a) Commitment of Resources.--Notwithstanding any provision 
     of title I of the Emergency Economic Stabilization Act of 
     2008, not later than seven days after the date of the 
     enactment of the TARP Reform and Accountability Act of 2009, 
     the Secretary of the Treasury (in this title referred to as 
     the ``Secretary'') shall commit funds made available to the 
     Secretary under title I of the Emergency Economic 
     Stabilization Act of 2008 in an amount of at least 
     $100,000,000,000, unless the Secretary certifies otherwise 
     under subsection (d), but in no case less than 
     $40,000,000,000, for the purposes of foreclosure mitigation. 
     Not less than $20,000,000,000 of this amount shall be 
     dedicated to the program described under section 204 of this 
     Act. The Secretary shall consult with the Chairperson of the 
     Board of Directors of the Federal Deposit Insurance 
     Corporation regarding the administration of the program.
       Page 20, line 5, strike ``(a)'' and insert ``(b)''.
       Page 20, strike ``of the Treasury'' in line 8 and all that 
     follows through `` `Secretary')'' in line 9.
       Page 20, line 11, after ``to'' insert ``use the funds 
     committed under subparagraph (a) to''.
       Page 20, strike lines 16 through 21.
       Strike ``committing funds'' in line 23 of page 20 and all 
     that follows through ``of 2008'' on page 21, line 1.
       Page 21, line 2, strike ``(a)'' and insert ``(b)''.
       Page 21, line 3, strike ``by May 1, 2009,''.
       Page 21, lines 4 and 5, strike ``more than the minimum of 
     $40,000,000,000 as required'' and insert ``at least 
     $100,000,000,000 in the plan established''.
       Page 21, lines 6 and 7, strike ``, no later than May 15, 
     2009,'' and insert ``in the plan''.
       Page 21, line 7, strike ``additional funds'' and insert 
     ``amounts''.
       Page 21, after line 8, insert the following:
       (e) Clarification.--For purposes of this title, the term 
     ``residential properties'' shall include 1- to 4-family 
     residential properties.
       Page 21, line 11, strike ``201(a)'' and insert ``201(b)''.
        Page 21, lines 23 and 24, strike ``one, or a combination 
     of more than one,'' and insert ``the systematic foreclosure 
     prevention and mortgage modification program under section 
     204 and a combination''.
       Page 21, after line 25, insert the following:
       (4) Workforce and outreach.--The plan shall set forth how 
     the Secretary intends to develop, second, or contract for 
     appropriate staffing to carry out the plan and the component 
     programs and to ensure that private mortgage servicers 
     utilizing the programs established by the Secretary will 
     provide sufficient staffing and resources to engage in the 
     outreach, loss mitigation activities, and homeowner education 
     necessary for successful foreclosure mitigation.
       Page 22, line 2, strike ``201(a)'' and insert ``201(b)''.
        Page 22, strike lines 9 through 11.
       Page 22, line 12, strike ``(2)'' and insert ``(1)''.
       Page 22, line 23, strike ``(3)'' and insert ``(2)''.
       Page 23, line 8, strike ``(4)'' and insert ``(3)''.
       Page 23, line 13, strike ``(5)'' and insert ``(4)''.
       Page 23, line 10, after ``servicers'' insert the following: 
     `` ``, including servicers that are not affiliated with a 
     depository institution,''.
       Page 23, line 19, after ``Corporation'' insert ``, regional 
     public-private partnerships,''.
       Page 23, after line 22, insert the following:
       (5) Substitution of trust.--A program under which 
     modifications are allowed to the securitization trust 
     agreements with respect to securities secured by pools of 
     mortgages to allow a new qualified buyer to be substituted on 
     a foreclosed property or a delinquent mortgage without 
     seeking new financing.
       Page 24, line 18, after ``with'' insert ``the Chairperson 
     of the Federal Deposit Insurance Corporation and''.
       Page 27, line 19, strike ``201(a)'' and insert ``201(b)''.
       Page 28, line 3, strike ``118'' and insert ``title I''.
       Page 28, line 12, strike ``204'' and insert ``205''.
       Page 28, line 18, strike ``201(a)'' and insert ``201(b)''.
       Page 29, line 1, strike ``205'' and insert ``206''.
       Strike line 21 on page 31 and all that follows through page 
     32, line 2.
       Page 32, line 3, strike ``(c)'' and insert ``(b)''.
       Page 32, line 10, strike ``(d)'' and insert ``(c)''.
       Page 32, after line 19, insert the following:

     SEC. 207. FORECLOSURE PREVENTION FOR AFFORDABLE HOUSING.

       Section 109 of the Emergency Economic Stabilization Act of 
     2008 (12 U.S.C. 5219) is amended to read as follows:

     ``SEC. 109. FORECLOSURE MITIGATION EFFORTS.

       ``(a) Residential Mortgage Servicing Standards.--To the 
     extent that the Secretary acquires mortgages, mortgage backed 
     securities, and other assets secured by residential real 
     estate, including multifamily housing, the Secretary shall 
     implement a plan that seeks to maximize assistance for 
     homeowners and renters and use the authority of the Secretary 
     to encourage the servicers of the underlying mortgages, 
     considering net present value to the taxpayer, to take 
     advantage of the HOPE for Homeowners Program under section 
     257 of the National Housing Act or other available programs 
     to minimize foreclosures. In addition, the Secretary may use 
     loan guarantees and

[[Page H347]]

     credit enhancements to facilitate loan modifications to 
     prevent avoidable foreclosures on single-family and 
     multifamily housing.
       ``(b) Coordination.--The Secretary shall coordinate with 
     the Corporation, the Board (with respect to any mortgage or 
     mortgage-backed securities or pool of securities held, owned, 
     or controlled by or on behalf of a Federal reserve bank, as 
     provided in section 110(a)(1)(C)), the Federal Housing 
     Finance Agency, the Secretary of Housing and Urban 
     Development, and other Federal Government entities that hold 
     troubled assets to attempt to identify opportunities for the 
     acquisition of classes of troubled assets that will improve 
     the ability of the Secretary to improve the loan modification 
     and restructuring process and, where permissible, to permit 
     bona fide tenants who are current on their rent to remain in 
     their homes under the terms of the lease. In the case of a 
     mortgage on a residential rental property, including a 
     qualified low-income building under section 42 of the 
     Internal Revenue Code of 1986, the plan required under this 
     section shall include protecting Federal, State, and local 
     rental subsidies and protections, and ensuring any 
     modification takes into account the need for operating funds 
     to maintain decent and safe conditions at the property.
       ``(c) Consent to Reasonable Loan Modification Requests.--
     Upon any request arising under existing investment contracts, 
     the Secretary shall consent, where appropriate and 
     considering net present value to the taxpayer, to reasonable 
     requests by homeowners and owners of multifamily housing, 
     including qualified low-income buildings under section 42 of 
     the Internal Revenue Code of 1986, for loss mitigation 
     measures, including term extensions, rate reductions, 
     principal write downs, increases in the proportion of loans 
     within a trust or other structure allowed to be modified, or 
     removal of other limitation on modifications.''.
       Page 32, line 20, strike ``206'' and insert ``208''.
       Page 33, after line 6, insert the following (and conform 
     the Table of Contents accordingly):

     SEC. 209. MORTGAGE MODIFICATION DATA COLLECTING AND 
                   REPORTING.

       (a) Reporting Requirements.--Not later than 120 days after 
     the date of the enactment of this Act, and quarterly 
     thereafter, the Comptroller of the Currency, in coordination 
     with the Director of the Office of Thrift Supervision, shall 
     submit a report to the Committee on Banking, Housing, and 
     Urban Affairs of the Senate, the Committee on Financial 
     Services of the House of Representatives, and the Joint 
     Economic Committee on the volume of mortgage modifications 
     reported to the Office of the Comptroller of the Currency and 
     the Office of Thrift Supervision, under the mortgage metrics 
     program of each such Office, during the previous quarter, 
     including the following:
       (1) The total number of mortgage modifications resulting in 
     each of the following:
       (A) Additions of delinquent payments and fees to loan 
     balances.
       (B) Interest rate reductions and freezes.
       (C) Term extensions.
       (D) Reductions of principal.
       (E) Deferrals of principal.
       (F) Combinations of modifications described in subparagraph 
     (A), (B), (C), (D), or (E).
       (2) The total number of mortgage modifications in which the 
     total monthly principal and interest payment resulted in the 
     following:
       (A) An increase.
       (B) Remained the same.
       (C) Decreased less than 10 percent.
       (D) Decreased 10 percent or more.
       (b) Data Collection.--
       (1) Required.--
       (A) In general.--Not later than 60 days after the date of 
     the enactment of this Act, the Comptroller of the Currency 
     and the Director of the Office of Thrift Supervision, shall 
     issue mortgage modification data collection and reporting 
     requirements to institutions covered under the reporting 
     requirement of the mortgage metrics program of the 
     Comptroller or the Director.
       (B) Inclusiveness of collections.--The requirements under 
     subparagraph (A) shall provide for the collection of all 
     mortgage modification data needed by the Comptroller of the 
     Currency and the Director of the Office of Thrift Supervision 
     to fulfill the reporting requirements under subsection (a).
       (2) Report.--The Comptroller of the Currency shall report 
     all requirements established under paragraph (1) to each 
     committee receiving the report required under subsection (a).
       Page 52, strike ``obligation'' in line 19 and all that 
     follows through ``2008'' in line 21 and insert ``existing 
     vested legal rights and the Constitution''.
       Page 63, line 9, after the first period insert the 
     following: ``In determining which classes of consumer loans 
     to support, the Secretary may consider the applicable 
     regulatory structure and level of consumer protection 
     afforded to such loans.''.
       Page 63, line 11, strike ``103'' and insert ``101''.
       Page 63, line 13, strike ``(f)'' and insert ``(g)''.
       Page 63, line 13, strike ``401'' and insert ``110''.
       Page 63, line 15, strike ``(g)'' and insert ``(h)''.
       Page 64, line 8, before the first period insert the 
     following: ``or any other entity eligible to issue bonds the 
     interest on which is excludable from gross income for Federal 
     income tax purposes.''.
       Page 64, line 19, after ``estate loans,'' insert 
     ``including loans for multifamily housing,''.
       Page 64, after line 22, insert the following new sections:

     SEC. 404. SMALL BUSINESS LOANS.

       Title I of the Emergency Economic Stabilization Act of 2008 
     (12 U.S.C. 5211 et seq.) is amended by adding after section 
     138 (as added by section 403 of this title) the following new 
     section:

     ``SEC. 139. CLARIFICATION OF AUTHORITY REGARDING SMALL 
                   BUSINESS LOANS.

       ``The authority of the Secretary to take any action under 
     this title includes the authority to establish or support 
     facilities to support the availability of small business 
     loans, including farm loans, loans to minority and 
     disadvantaged businesses, debtor-in-possession financing, 
     dealer floor plan financing, and any other small business 
     loans, including through purchase of asset-backed securities, 
     directly or through the Board or any Federal reserve bank.''.

     SEC. 405. COMMERCIAL LOANS.

       Title I of the Emergency Economic Stabilization Act of 2008 
     (12 U.S.C. 5211 et seq.) is amended by adding after section 
     139 (as added by section 404 of this title) the following new 
     section:

     ``SEC. 140. CLARIFICATION OF AUTHORITY REGARDING COMMERCIAL 
                   LOANS.

       ``The authority of the Secretary to take any action under 
     this title includes the authority to establish or support 
     facilities to support the availability of commercial loans, 
     including through purchase of asset-backed securities, 
     directly or through the Board or any Federal reserve bank.''.

     SEC. 406. AUTOMOBILE FLEET PURCHASE LOANS.

       Title I of the Emergency Economic Stabilization Act of 2008 
     (12 U.S.C. 5211 et seq.) is amended by adding after section 
     140 (as added by section 405 of this title) the following new 
     section:

     ``SEC. 140. CLARIFICATION OF AUTHORITY REGARDING AUTOMOBILE 
                   FLEET PURCHASE LOANS.

       ``The authority of the Secretary to take any action under 
     this title includes the authority to establish or support 
     facilities to support the availability of automobile fleet 
     purchase loans, including loans for the automobile rental 
     industry and other fleet purchasers, including through 
     purchase of asset-backed securities, directly or through the 
     Board or any Federal reserve bank.''.

     SEC. 407. CERTIFICATION.

       Subsection (a) of section 105 of the Emergency Economic 
     Stabilization Act of 2008 (12 U.S.C. 5215(a)) is amended--
       (1) in paragraph (2), by striking ``and'' at the end;
       (2) in paragraph (3), by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following new paragraph:
       ``(4) the use of the authority for the purposes specified 
     in the amendments made by title IV of the TARP Reform and 
     Accountability Act of 2009.''.
       Strike line 1 on page 68 and all that follows through page 
     69, line 2.
       Page 69, line 7, strike ``carry out'' and insert 
     ``establish and implement, within 60 days of the date of the 
     enactment of the TARP Reform and Accountability Act of 
     2009,''.
       Page 69, lines 8 and 9, strike ``using the authority made 
     available by section 1117 of the Housing and Economic 
     Recovery Act of 2008''.
       Page 69, lines 11 and 12, strike ``which shall include 
     ensuring'' and insert ``by providing mechanisms to ensure''.
       Page 69, line 12, after ``affordable'' insert ``, below-
     market''.
       Strike line 15 on page 69 and all that follows through page 
     70, line 13, and insert the following:
       (b) Implementation.--The Secretary shall execute the 
     program under this section using the authority to purchase 
     obligations and other securities issued by the Federal 
     National Mortgage Association, the Federal Home Loan Mortgage 
     Corporation, and the Federal Home Loan Banks made available 
     by the Housing and Economic Recovery Act of 2008 and such 
     other authority as the Secretary may have (other than that 
     provided by title I of the Emergency Economic Stabilization 
     Act of 2008) to make affordable, below-market interest rates 
     available directly through portfolio lenders.
       Page 70, line 14, strike ``(d)'' and insert ``(c)''.
       Page 70, line 17, after ``affordable'' insert ``, below-
     market''.
       Strike line 24 on page 70 and all that follows through page 
     71, line 3, and insert the following:
       (e) Targeting for Housing Disaster Areas.--
       (1) In general.--In carrying out the program under this 
     section, the Secretary shall take into consideration impact 
     of activities under the program on housing disaster areas.
       (2) Report.--Not later than 60 days after the Secretary 
     first has authority to purchase troubled assets pursuant to 
     section 115(a)(3) of the Emergency Economic Stabilization Act 
     of 2008 (12 U.S.C. 5225(a)(3)), the Secretary shall--
       (A) evaluate the impact of existing Federal foreclosure 
     prevention activities on housing disaster areas;
       (B) make a determination of whether the foreclosure rates 
     and anticipated default rates in such areas have been 
     adequately reduced; and

[[Page H348]]

       (C) submit a report to the Congress that describes the 
     impact of such activities and the determination of the 
     Secretary under subparagraph (B).
       (3) Alternative proposals.-- If the Secretary determines 
     that the foreclosure rates and anticipated default rates in 
     housing disaster areas have not been adequately reduced, the 
     Secretary shall--
       (A) consider carrying out alternative proposals, including 
     a proposal under which the Federal Government makes available 
     affordable mortgages, including refinancings, through 
     subsidized financing or mortgage purchases; and
       (B) establish and carry out alternative programs as the 
     Secretary considers necessary to ensure that foreclosure 
     prevention efforts are most effective in the areas of 
     greatest need, including housing disaster areas.
       (4) Housing disaster areas.--For purposes of this section, 
     the term ``housing disaster area'' means a geographic area 
     having both--
       (A) a high foreclosure rate during the 12 months preceding 
     the date of the enactment of this Act, as measured by 
     percentages of homes in or having gone through foreclosure 
     during such period and compared to other areas; and
       (B) a substantial decline in home prices during the 12 
     months preceding the date of the enactment of this Act, as 
     measured by the Office of Federal Housing Enterprise and 
     Oversight and compared to other areas.
       Page 72, line 20, strike ``1814(a)'' and insert 
     ``1824(a)''.
       At the end of the bill, add the following new title:

    TITLE VIII--REPORTS ON THE GUARANTEE OF CERTAIN CITIGROUP ASSETS

     SEC. 801. REPORTS REQUIRED.

       (a) Treasury Reports.--Not later than 30 days after the 
     date of the enactment of this Act, the Secretary of the 
     Treasury, in coordination with the Chairperson of the Board 
     of Directors of the Federal Deposit Insurance Corporation, 
     shall issue a report to the Committee on Financial Services 
     of the House of Representatives, the Committee on Banking of 
     the Senate, and to the Comptroller General of the United 
     States containing the following:
       (1) The authority under which the Citigroup guarantee and 
     purchases were made.
       (2) A complete accounting of the specific loans, 
     securities, and any other financial instruments in the asset 
     pool covered by the Citigroup guarantee.
       (b) GAO Report.--Not later than 60 days after the date the 
     Secretary of the Treasury issues the report required by 
     subsection (a), the Comptroller General of the United States 
     shall issue a report to the Committee on Financial Services 
     of the House of Representatives and the Committee on Banking 
     of the Senate examining the probable long-term cost to the 
     Federal Government of the Citigroup guarantee.
       (c) Citigroup Guarantee Defined.--For the purpose of this 
     section, the term ``Citigroup guarantee'' means the agreement 
     announced November 23, 2008, between Citigroup and the 
     Treasury and the Federal Deposit Insurance Corporation to 
     guarantee or purchase, partly through the use of funds 
     authorized under the Emergency Economic Stabilization Act of 
     2008 (12 U.S.C. 5201 et seq.), an asset pool of approximately 
     $306 billion of loans and securities backed by residential 
     and commercial real estate and other such assets on 
     Citigroup's balance sheet.

                TITLE IX--GAO STUDY OF FINANCIAL CRISIS

     SEC. 901. STUDY REQUIRED.

       The Comptroller General of the United States shall--
       (1) conduct an in-depth study of the root causes of the 
     financial crisis; and
       (2) submit a report to the Congress and the President, and 
     transmit a copy to the Secretary of the Treasury, containing 
     the findings and conclusions of the Comptroller General with 
     respect to the study under paragraph (1), together with such 
     recommendations for legislative and administrative action as 
     the Comptroller General may determine to be appropriate 
     before the end of the 6-month period beginning on the date of 
     the enactment of this Act.

     SEC. 902. TREASURY STRATEGY AND TIMELINE.

       Using the findings and conclusions of the Comptroller 
     General in the report under section 901(2), within 30 days, 
     the Secretary of the Treasury shall issue an overall strategy 
     and timeline for implementing the recommendations contained 
     in the report with the goal of financial stability and the 
     well-being of taxpayers.

  The Acting CHAIR. Pursuant to House Resolution 62, the gentleman from 
Massachusetts (Mr. Frank) and a Member opposed each will control 20 
minutes.
  The Chair recognizes the gentleman from Massachusetts.

                              {time}  1115

  Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself such time as 
I may consume.
  Mr. Chairman, when we determined that because the President was going 
to be triggering this request we should act on this bill, we sent out a 
notice to all Members inviting amendments. We received a large number 
of amendments and we agreed that many of them made a great deal of 
sense. Some of them we think clarify what was already the intention of 
the bill. This amendment includes a variety of those. There will be 
Members here on the floor who want to talk about it.
  For example, you heard the gentleman from Kansas (Mr. Moran) talk 
about the removal of the provision that would have restricted the use 
of private aircraft. That is one of the things that is in here. There 
are other things that are important to various Members who will be 
addressing them. They aim at enforcing better the accountability and 
essentially increasing some of the restrictions on the recipient 
institutions. I will be discussing these and other matters with some 
other Members.
  At this point, I reserve the balance of my time.
  Mr. GARRETT of New Jersey. Mr. Chairman, I claim the time in 
opposition.
  The Acting CHAIR. The gentleman is recognized for 20 minutes.
  Mr. GARRETT of New Jersey. Mr. Chairman, I yield myself such time as 
I may consume.
  Mr. Chairman, just before this meeting out here on the floor, I was 
in my office back in Cannon meeting with and on the phone with 
constituents back at home discussing the fact of the difficult plight 
we find ourselves and the economy in in this country right now, 
specifically with regard to homeowners, the problems that they are 
having with paying their mortgages and the like, the difficulty overall 
with the economy, with the rising unemployment rates, the problems in 
the credit markets and the like.
  The question they ask, of course, is what is Congress about to do 
with this situation. The conversation always turns around to what has 
Congress done in the first place, and, of course, we know what that is.
  Several months ago, I guess it was in September, this Congress was 
told by the administration and agreed to by the other side of the aisle 
that unless Congress acted expeditiously, the sky was going to fall in, 
and that what Congress had to do was authorize and appropriate $700 
billion to bail out the situation.
  Well, we have since that time spent $350 billion of that sum, and the 
callers that I heard from from home that I was just referring to before 
are saying, what did it achieve? What did we accomplish? Unemployment 
is still high, the housing market is still tight, home prices are still 
falling, and all that we really did was to bail out Wall Street, is the 
way some people couch it.
  The question then comes up, how did we go through that process. I 
have to tell the people back at home, not in a very transparent and 
open manner. Quite honestly, it was in a rushed matter. We rushed 
through a piece of legislation that started out at three pages and then 
turns out to well over 100, without a single hearing, without a single 
markup, without a single discussion really in committee as to whether 
there would be transparency and accountability and the like.
  Well, sir, now we are about to do the same thing next week, I 
understand, when President-elect Obama has requested that we spend the 
next $350 billion, again without the appropriate oversight. So I 
commend the chairman for taking the step to try to begin to begin the 
process of providing some of that degree of accountability, 
transparency and oversight.
  But I do raise the same question that the people asked me on the 
phone today that I was talking to: Why are we rushing to judgment on 
it? Why are we going through it in the same manner, the same failed 
policy reasons, the same procedural manner that we did before, without 
a hearing, without a discussion, without a markup in committee, so that 
both sides of the aisle could come together with their good ideas in 
order to achieve what the American public wants, to right the economy, 
to not put the taxpayer on a hook, and to do so that the taxpayer is 
protected. Why are we doing it in the same failed policy procedure we 
did in the past without that ability for input?
  Now, the chairman will say, well, we have ability because the Rules 
Committee allowed a number of amendments. We will be debating those 
amendments shortly, 10 or 11 amendments I believe we will have at that 
point in time.

[[Page H349]]

  The chairman will agree that is not the best way to achieve what we 
are trying to for the American people. The best way is to have an open, 
honest discussion in committee, allow the experts to come in and 
testify, allow Members from both sides of the aisle to have input, and 
allow it to go through the committee to get that desired result.
  That was not done with TARP 1, that really is not being done with 
TARP 2. So I rise in opposition to this failed policy and procedure 
that we are doing here today as well.
  With that, I reserve the balance of my time.
  Mr. FRANK of Massachusetts. Mr. Chairman, I first yield myself 30 
seconds to correct the gentleman from New Jersey.
  The gentleman from New Jersey said that President Obama was 
requesting these funds. In fact, President Bush requested the funds. He 
did it after President-elect Obama asked him to, but I think it ought 
to be clear on the record, this is a continuation of the Bush policy 
and it was President Bush who in fact requested the funds. President 
Obama could not request them until next week. The President did it at 
the request of the President-elect, but it was President Bush who did 
it.
  I now yield 2 minutes to the gentleman from Rhode Island (Mr. 
Kennedy).
  (Mr. KENNEDY asked and was given permission to revise and extend his 
remarks.)
  Mr. KENNEDY. Thank you, Mr. Chairman. I rise to engage the chairman 
in a colloquy.
  Mr. Chairman, I am extremely concerned at the current state of 
affairs with credit card regulations as my constituents see these 
extraordinary interest rates affecting their credit cards. I am 
appalled that companies continue to engage in predatory practices, like 
double-cycle billing and inadequate notification periods and 
retroactive rate hikes for these credit cards.
  I am seeing these predatory practices continue, in spite of the fact 
that the Federal Reserve has recently finalized a rule that will ban 
many of these predatory practices. Unfortunately, these reforms are not 
scheduled to go into place until July 2010, and then they will save our 
consumers over $10 billion a year.
  I think it would be outrageous to see us bail out these banks, and 
yet see them also continue to gouge these consumers of ours, these 
taxpayers at the other end of the ledger on these predatory practices. 
I would like to work with the chairman to see that we address this 
issue in forthcoming legislation.
  Mr. FRANK of Massachusetts. If the gentleman will yield, as he knows, 
because he was a strong supporter, the Committee on Financial Services, 
once we became the majority, in fact put through this House a bill that 
was even tougher in some ways than what the Federal Reserve did, and I 
think was the spur to the Federal Reserve acting. Unfortunately, it 
wasn't acted on in the Senate, but I thought it was good that we passed 
it. I know there are Members who say if we can't know the Senate is 
going to pass something, we shouldn't even try. We have rejected that. 
We did pass that bill.
  The gentlewoman from New York (Mrs. Maloney) has been a leader here. 
She will be bringing that bill up again, and we want to apply those 
principles not just to TARP recipients, but to all credit card 
companies. We expect to do it quickly. The gentleman is absolutely 
right. We should not wait until 2010. I hope that we will have this 
bill on the floor by March, and we will be able, and the gentleman's 
input has been very helpful to us, to pass this bill that will become 
law very soon.
  Mr. KENNEDY. I want to salute the gentleman for the transparency and 
accountability standards that he has in the manager's amendment, and 
encourage additional funds to go to the foreclosure problem that he has 
identified in his manager's amendment.
  Mr. GARRETT of New Jersey. Mr. Chairman, I yield myself such time as 
I may consume.
  It is interesting to find out that our chairman, who oftentimes 
berates our side of the aisle for distancing ourselves from our 
President, now I find that he is already distancing himself from the 
President-to-be, President-elect Obama.
  While he is correct while being overly technical about it by saying 
that it was President Bush who actually filed the paperwork and made 
the submission to this House and to the Congress in order for the 
request of the additional TARP funds, he seems to be distancing himself 
from his party's candidate and his party's and all this Nation's 
President-elect Obama, for it was President-elect Obama who did go to 
President Bush and did request that this Congress facilitate the 
passage of the additional $350 billion.
  Now, the chairman may not like the fact that President-elect Obama is 
requesting it. Maybe, quite candidly, the chairman has the same 
concerns that I do, that President-elect Obama failed to give us a 
plan, which makes it hard for either one of us, quite candidly, to be 
able to discuss either in committee or here on the Floor in a rational 
and logical manner what it is exactly we will be spending the $350 
billion on.
  So I will join with the chairman in being concerned and outraged that 
President-elect Obama has not given us a plan. But it is concerning 
that the chairman points to President Bush, when he knows it is 
President-elect Obama who instigated this in the first place.
  But I will yield.
  Mr. FRANK of Massachusetts. The gentleman has transformed my 
correcting his error into distancing myself from President Obama. I 
said when I got up that it was done by President Bush at the request of 
President Obama.
  Mr. GARRETT of New Jersey. I reclaim my time. Thank you. I understand 
what he said before, but then you have to always point to the words 
that came after that, and he was alluding to the fact that it actually 
came to the floor from President Bush when, yes, it was President-elect 
Obama who initiated it.
  But for the fact that President-elect Obama initiated it, President 
Bush, as far as I know, has never made a statement that he would have 
unilaterally made that request. I have never seen anything in the 
media, and I may be wrong, but I have never seen anything in the media 
or otherwise saying that President Bush was about to come to this 
Congress and ask for those additional funds.
  It was President-elect Obama, for good or for bad, and I think for 
the fact that we don't have a plan here, quite candidly, Mr. Chairman, 
to discuss and debate today, more for the bad than the good that we are 
coming here without such a plan.
  I reserve the balance of my time.
  Mr. FRANK of Massachusetts. I will yield myself 1 minute.
  The gentleman from New Jersey has built that castle in the air 
because I corrected his flat error. He said President-elect Obama asked 
for it. He did not. I said that President Bush asked for it at the 
request of President-elect Obama. How my correcting his error became 
distancing myself from the new President is beyond me.
  In fact, President Bush's administration did want the second $350 
billion. The gentleman is wrong in saying they didn't. Secretary 
Paulson was deterred from doing that, however, because we told him that 
we were sufficiently disappointed in the way it had been administered 
and that if he asked for it we would probably reject it, and that only 
if he came to some agreement with the new President and the Congress 
could that go forward. So those are the facts.
  Yes, the outgoing administration wanted it. They withheld because 
they were told they wouldn't get it unless they had cooperation, and 
then the two administrations jointly did that. There is no distancing 
when I make that point.
  In fact, the central point here about the TARP is this: We believe 
quite to the opposite that we are distancing ourselves from Mr. Obama. 
We believe that because Bush used this badly is no reason to give Obama 
not a chance to use it well.
  I now yield 2 minutes to the gentleman from Kansas (Mr. Moore).
  Mr. MOORE of Kansas. Mr. Chairman, I thank the chairman.
  Mr. Chairman, I rise today in support of Chairman Frank's manager's 
amendment and the underlying legislation. I want to thank Chairman 
Frank and his excellent staff for working with me to address a concern 
I had with the original draft bill.

[[Page H350]]

  On Tuesday, I talked to our Kansas Governor, Kathleen Sebelius. We 
were concerned about a provision in the bill that would have required 
financial firms participating in TARP to divest their companies of 
corporate business aircraft.
  While it is clear that the auto executives were very insensitive to 
the American taxpayers when they flew in their private jets last 
November to request billions of dollars in Federal assistance, a 
blanket prohibition against the corporate use of business aircraft 
would have had the unintended consequence of hurting the general 
aviation industry and its workers, which is important to Kansas.
  With nearly 44,000 Kansans who work for aviation companies like 
Cessna, Beechcraft, Learjet and Boeing, as well as their contracting 
counterparts like Garmin and Honeywell, many Kansas families depend on 
this industry. And the impact would have been felt not just in Kansas. 
General aviation contributes more than $150 billion a year to the U.S. 
economy and employs more than 1.2 million people.
  I want to thank again Chairman Frank and his staff for responding to 
our concerns and for striking this provision. This is good news for 
Kansans and aviation workers across this country. These are difficult 
times. I urge my colleagues to support the manager's amendment and this 
bill to ensure these TARP funds are responsibly allocated with strong 
oversight protections for the American taxpayer.
  Mr. GARRETT of New Jersey. Mr. Chairman, I yield 5 minutes to the 
gentleman from Texas (Mr. Hensarling), a leader on this issue and more 
importantly a leader on the issue of reviving our economy in general 
and in a free market manner which will not put the American taxpayer on 
the hook.
  Mr. HENSARLING. Mr. Chairman, I thank the gentleman for yielding.
  Mr. Chairman, I again question why we are even here today. I observe 
again that those who have risen to be the largest critics of the TARP 
bill were the ones who wrote the TARP bill. So, number one, why weren't 
the standards, the accountability, the provisions that some are seeking 
today, why weren't they there originally? That is question number one.
  Question number two is: Why are we having to have a vote that turns 
off the spigot of an extra $350 billion of taxpayer money, as opposed 
to turn it on?
  So why are we even having to have this vote, Mr. Chairman, I think is 
an interesting question that the American people want to know the 
answer to.
  Now, already if you look at the actions of the Federal Reserve, if 
you look at the actions of Treasury, Mr. Chairman, we are already up to 
somewhere in the neighborhood of $7 trillion to $8 trillion of 
potential liability taxpayer exposure. I don't necessarily believe the 
taxpayer will have to pay it all. I hope and pray that the taxpayer 
will get some return on his investment.

                              {time}  1130

  But to sit here and say that unless Congress somehow authorizes the 
incoming President to spend an extra $350 billion that we could spend 
ourselves, and to give him this authority, without any plan being 
presented whatsoever, I mean, Mr. Chairman, that's just something I 
don't understand. It's not something that the constituents that I 
represent in the Fifth District of Texas understand.
  Now, I do believe that the chairman is right on a couple of 
instances, that, yes, we need to know how institutions who are 
receiving TARP funds actually spend it. That's important. We need to 
have some kind of measurement of success to know what's actually 
happening here.
  But I look at the provisions of the strings that he's attempting to 
attach after the fact, when, if this was a horse leaving the barn, I 
don't think we've seen much left but his tail. But when I look at the 
strings that are being attached here, I mean, Number 1, we have 
explicit language here that most of us have concluded is picking 
winners and losers in our economy, express language dealing with the 
auto companies.
  Now, I don't want to see the auto companies fail. Nobody in America 
does. But name me an industry in America that isn't struggling. Is 
Congress so wise that they can decide which industries are deserving 
the taxpayer bailout and which aren't?
  It's one thing for the Federal Government to try to monitor the money 
supply, ensure that the money supply is proper, that would hopefully 
lift all industries, help all families, help all job creators and those 
who have the jobs.
  But it's another to start saying, well, here's the explicit plan for 
the auto industry. And if it's the auto industry today, is it the 
airlines industry tomorrow? Who is it next week?
  Again, how can everybody who's struggling bail out everybody else 
who's struggling?
  And what has become of all of this money?
  Again, it's not like this is the only $350 billion lying around. The 
Federal Reserve already has a number of credit facilities that are set 
up. We don't even know the full impact of the first $350 billion.
  And so now we have a plan that, as I understand, and I believe I've 
heard the chairman say that the Senate does not intend to vote on this, 
which is another reason I question the use of the House's time on this 
matter. But trying to have a provision that picks winners and losers in 
our economy and, specifically, in our housing industry as well.
  We know about the tragic circumstances in our housing industry. But 
what's going to make it even more tragic, Mr. Chairman, is to take 
money away from people who are current on their mortgages, or who rent, 
or who own their homes outright, to give the money to people who aren't 
current in their mortgage.
  Now, there's a couple of reasons people aren't current in their 
mortgages. Number 1, maybe it's through no fault of their own. Maybe 
they were duped by a predatory lender. Maybe they had a serious 
illness. Maybe they had a loss of job. I mean, these are serious 
setbacks, and I would hope that we could help these people.
  But, Mr. Chairman, there's a huge universe of people who engaged in 
predatory borrowing, out-and-out mortgage fraud. There's a universe of 
people who decided they would turn their homes into an ATM machine, and 
now they expect their neighbor to bail them out. There's a whole group 
who didn't really buy a home, they bought an investment and they 
decided to live in it, and now they expect their neighbor to bail them 
out.
  When you're struggling to pay your mortgage, Mr. Chairman, you 
shouldn't be compelled to have to pay your neighbors' as well.
  For all these reasons, this amendment should be defeated.
  Mr. FRANK of Massachusetts. Mr. Chairman, I first yield myself 1 
minute to say that I appreciate the intellectual honesty of the 
gentleman from Texas (Mr. Hensarling). He opposes one of the major 
thrusts of this bill and one of the major criticisms many of us had of 
the Bush administration, namely, the foreclosure relief. And the 
gentleman opposed these efforts.
  I must say that I am encouraged by the Bush appointee, Secretary of 
HUD, Mr. Preston, the Bush appointee as head of the FDIC, Ms. Bair, 
both of whom believe that we can do foreclosure protection with the 
tools in this bill, and that it can be done effectively. But I 
appreciate this is a genuine difference between us and I appreciate the 
gentleman articulating it.
  In 2007, this House passed a bill to restrict subprime lending of an 
inappropriate sort aimed at both borrowers and lenders. It would have 
made it impossible for people to borrow inappropriately, as well as to 
lend. The gentleman, I believe, opposed that. Many others, the 
gentleman from New Jersey did. There were some important philosophical 
differences.
  The Wall Street Journal, which today denounces us for trying to do 
foreclosure relief, denounced us at the time. They said when we passed 
the bill to restrict subprime lending, it was an undue interference in 
the market, and we're going to keep people from owning homes.
  The Acting CHAIR. The time of the gentleman has expired.
  Mr. FRANK of Massachusetts. I yield myself an additional 30 seconds.
  So just to be clear, whether or not there should be Federal programs 
as advocated by FDIC Chair Bair, Secretary of HUD Preston and many 
others, whether or not there should be Federal programs to reduce 
foreclosure, is a very defining difference between most of us on this 
side and most on the other side; although there

[[Page H351]]

are many on the Republican side who do agree with us that we should try 
to abate foreclosures, not just as a matter of compassion, but as 
central to solving our economic problem.
  I now yield 2 minutes to the gentlewoman from Texas (Ms. Jackson-
Lee).
  (Ms. JACKSON-LEE of Texas asked and was given permission to revise 
and extend her remarks.)
  Ms. JACKSON-LEE of Texas. Let me thank the chairman very much. And I 
might just simply say that I remember the haggling previously in the 
last year about this bill. And one of the issues was the veto threat of 
the President in not allowing us to add language earlier. We fought for 
it.
  Let me thank the chairman very much for what we've all fought for 
over the years, over the last couple of months, and that is the amount 
of, if you will, mortgage set aside money. I want to announce that over 
and over again, that there is now money included in here to directly 
work with my constituent who I sat down at her kitchen table. She gets 
$18,000 a year, but she's hardworking and she had a home that she could 
afford, except for the adjustable rate. So I want to thank for that. 
And it is something that I want more. We all want more, but we're 
starting out in that direction to be able to focus on mortgage 
workouts.
  Mr. Chairman, I'd like to engage in a colloquy at this time. Quickly, 
the Treasury Department has yet to issue the necessary guidelines for 
about 3,000 additional private banks. Most of them are set up as 
partnerships with no more than 100 shareholders. They are not able to 
issue preferred shares to the government in exchange for capital 
injections at other banks. However, they are very vital to the inner 
city. And I ask, in our work together, whether or not if you can 
explain the language.
  Mr. FRANK of Massachusetts. If the gentlewoman would yield.
  Ms. JACKSON-LEE of Texas. I'd be happy to yield.
  Mr. FRANK of Massachusetts. She's absolutely right. I appreciate her 
calling this to our attention. We have amended the bill to take into 
account these private banks, many of which serve lower-income 
communities and are themselves people of experience in this area.
  As I said yesterday when the question came up about mutuals, the form 
of ownership should not be determinative here. Whether or not they are 
performing a valid function in the economy and whether or not they can 
use these funds responsibly is all that should cover. So we did amend 
the bill at the gentlewoman's request in that manner.
  Ms. JACKSON-LEE of Texas. We thank you very much. And the language 
does move this along, and I want to thank you.
  Quickly, let me also thank you for regulating the automobile 
industry, which you promised to do, which you also worked specifically 
to provide more credit to the automobile industry. But in that light we 
talked about----
  The Acting CHAIR. The time of the gentlewoman has expired.
  Mr. FRANK of Massachusetts. I yield the gentlewoman 30 seconds.
  Ms. JACKSON-LEE of Texas. We talked about minority participation. You 
have now some language that says, not only can they benefit as small 
businesses from loans, but they can service or participate in that 
process of doing business.
  Mr. FRANK of Massachusetts. If the gentlewoman would yield.
  Ms. JACKSON-LEE of Texas. I'd be happy to yield.
  Mr. FRANK of Massachusetts. Yes. In fact, it will make the 
administration better if those administering it have knowledge of and 
represent the whole range of people to whom this is aimed. And I thank 
the gentlewoman.
  Ms. JACKSON-LEE of Texas. Well, let me thank you specifically for the 
Office of Minority and Women Inclusion. It is a great edition. And I 
would say this is a tough business. People are hurting. It's time to 
move forward on a newly regulated TARP, the American people's taxpayer 
dollars will be protected.
  Mr Chair, I rise today in strong support of H.R. 384, the Troubled 
Assets Relief Program, TARP, Reform and Accountability Act of 2009. 
This bill will amend the TARP provisions of the Emergency Economic 
Stabilization Act of 2008, EESA, to strengthen accountability, close 
loopholes, increase transparency, and most importantly, require the 
Treasury Department to take significant steps on foreclosure 
mitigation.
  Mr. Chair, I was particularly pleased to work with Chairman Frank and 
his staff on significant portions of the manager's amendment to this 
legislation which ensures that small and minority businesses along with 
local, community, and private banks gain fair and equitable access to 
the TARP funds.
  It has been 3 months since the Treasury started disbursing TARP 
funds. Just in time perhaps for a lot of big banks; however, smaller 
banks have been locked out so far. A lot of small banks certainly are 
in need of relief as the real estate crisis continues to unfold and 
hundreds have already applied.
  According to recent reports, the Treasury Department has yet to issue 
``the necessary guidelines for about 3,000 additional private banks. 
Most of them are set up as partnerships, with no more than 100 
shareholders. They are not able to issue preferred shares to the 
government in exchange for capital injections, as other banks can.'' 
While Treasury officials state they are ``working on a solution,'' for 
these private banks time is of the essence.
  The Treasury Department has handed out more than $155 billion to 77 
banks. Of that sum, $115 billion has gone to the eight largest banks. 
Community banks hold 11 percent of the industry's total assets and play 
a vital role in small business and agriculture lending. Community banks 
provide 29 percent of small commercial and industrial loans, 40 percent 
of small commercial real estate loans, and 77 percent of small 
agricultural production loans.
  This manager's amendment requires that the Treasury Department act 
promptly to permit smaller community financial institutions that have 
been shut out so far to participate on the same terms as the large 
financial institutions that have already received funds.
  Small businesses are the backbone of our Nation, and unfortunately, 
they have not been afforded the opportunity that large financial 
institutions have received to TARP funds and loans. Small businesses 
represent more than the American dream--they represent the American 
economy. Small businesses account for 95 percent of all employers, 
create half of our gross domestic product, and provide three out of 
four new jobs in this country. Small business growth means economic 
growth for the Nation. We cannot stabilize and revitalize our economy 
without ensuring the inclusion and participation of the small business 
segment of our economy. With the ever worsening economic crisis, we 
must ensure in this legislation that small and minority businesses and 
community banks are afforded an opportunity to benefit from this 
important legislation. I am very pleased that the manager's amendment 
will effect this change.
  In Section 107, the manager's amendment creates an Office of Minority 
and Women Inclusion, which will be responsible for developing and 
implementing standards and procedures to ensure the inclusion and 
utilization of minority and women-owned businesses. These businesses 
will include financial institutions, investment banking firms, mortgage 
banking firms, broker-dealers, accountants, and consultants.
  Furthermore, the inclusion of these businesses should be at all 
levels, including procurement, insurance, and all types of contracts 
such as the issuance or guarantee of debt, equity, or mortgage-related 
securities. This office will also be responsible for diversity in the 
management, employment, and business activities of the TARP, including 
the management of mortgage and securities portfolios, making of equity 
investments, the sale and servicing of mortgage loans, and the 
implementation of its affordable housing programs and initiatives.
  Section 107 also calls for the Secretary of the Treasury to report to 
Congress in 180 days detailed information describing the actions taken 
by the Office of Minority and Women Inclusion, which will include a 
statement of the total amounts provided under TARP to small, minority, 
and women-owned businesses. The manager's amendment in Section 404 also 
has clarifying language ensuring that the Secretary has authority to 
support the availability of small business loans and loans to minority 
and disadvantaged businesses.
  This will be critical to ensuring that small and minority businesses 
have access to loans, financing, and purchase of asset-backed 
securities directly through the Treasury Department or the Federal 
Reserve.
  H.R. 384 reforms TARP by increasing oversight, reporting, monitoring 
and accountability. It requires any existing or future institution that 
receives funding under TARP to provide no less than quarterly public 
reporting on its use of TARP funding. Any insured depository 
institution that receives funding under TARP is required to report 
quarterly on the amount of any increased lending, or reduction in 
decrease of lending and related activity attributable to such financial 
assistance.
  In connection with any new receipt of TARP funds, Treasury is also 
required to reach an

[[Page H352]]

agreement with the institution, and its primary Federal regulator on 
how the funds are to be used and benchmarks the institution is required 
to meet so as to advance the purposes of the act to strengthen the 
soundness of the financial system and the availability of credit to the 
economy. In addition, a recipient institution's primary Federal 
regulator must specifically examine use of funds and compliance with 
any program requirements, including executive compensation and any 
specific agreement terms.

  Mr. Chair, I am pleased that this legislation has strong requirements 
regarding executive compensation. For any new receipt of TARP funds, 
except those by small financial institutions, this legislation applies 
the most stringent non-tax executive compensation restrictions from 
EESA across the board including:
  1. Requiring Treasury to prohibit incentives that encourage excessive 
risks,
  2. Providing for claw-back of compensation received based on 
materially inaccurate statements; and
  3. Prohibits all golden parachute payment for the duration of the 
investment.
  Included in this legislation is a requirement of government board 
representation by authorizing Treasury to have an observer at board or 
board committee meetings of recipient institutions. This legislation 
changes the structure and authority of TARP board--the Financial 
Stability Oversight Board is expanded to include the Chairman of the 
FDIC and two additional members who are not currently Federal 
employees, who shall be appointed by President and subject to Senate 
confirmation. The Board will have the authority to overturn policy 
decisions of the Treasury Secretary by a two-thirds vote.
  Mr. Chair, the act provides that the second $350 billion is 
conditioned on the use of up to $100 billion, but no less than $40 
billion, for foreclosure mitigation, with plan required by March 15, 
2009. By that date, the Secretary shall develop, subject to TARP Board 
approval, a comprehensive plan to prevent and mitigate foreclosures on 
residential mortgages. The Secretary shall begin committing TARP funds 
to implement the plan no later than April 1, 2009. The Secretary must 
certify to Congress by May 15, 2009, if he has not committed more than 
required minimum $40 billion.
  The foreclosure mitigation plans must apply only to owner-occupied 
residences and shall leverage private capital to the maximum extent 
possible consistent with maximizing prevention of foreclosures. 
Treasury must use some combination of the following program 
alternatives:
  1. Guarantee program for qualifying loan modifications under a 
systematic plan, which may be delegated to the FDIC or other 
contractor;
  2. Bringing costs of Hope for Homeowner loans down, beyond mandatory 
changes in Title V below, either through coverage of fees, purchasing 
H4H mortgages to ensure affordable rates, or both;
  3. Program for loans to pay down second lien mortgages that are 
impeding a loan modification subject to any writedown by existing 
lender Treasury may require;
  4. Servicer incentives/assistance--payments to servicers in 
connection with implementation of qualifying loan modifications; and
  5. Purchase of whole loans for the purpose of modifying or 
refinancing the loans with authorization to delegate to FDIC.
  In consultation with the FDIC and HUD and with the approval of the 
Board, Treasury may determine that modifications to an initial plan are 
necessary to achieve the purposes of this act or that modifications to 
component programs of the plan are necessary to maximize prevention of 
foreclosure and minimize costs to the taxpayers.
  A safe harbor from liability is provided to servicers who engage in 
loan modifications, regardless of any provisions in a servicing 
agreement, so long as the servicer acts in a manner consistent with the 
duty established in Homeowner Emergency Relief Act, maximize the net 
present value, NPV, of pooled mortgages to all investors as a whole; 
engage in loan modifications for mortgages that are in default or for 
which default is reasonably foreseeable; the property is owner-
occupied; the anticipated recovery on the mod would exceed, on an NPV 
basis, the anticipated recovery through foreclosure.
  This bill requires persons who bring suit unsuccessfully against 
servicers for engaging in loan modifications under the act to pay the 
servicers' court costs and legal fees. It also requires servicers who 
modify loans under the safe harbor to regularly report to the Treasury 
on the extent, scope, and results of the servicer's modification 
activities.
  In addition to the above requirements, an oversight panel is required 
to report to Congress by July 1 on the actions taken by Treasury on 
foreclosure mitigation and the impact and effectiveness of the actions 
in minimizing foreclosures and minimizing costs to the taxpayers.
  H.R. 384 clarifies and confirms Treasury authorization to provide 
assistance to automobile manufacturers under the TARP. With respect to 
the assistance already provided to the domestic automobile industry, 
includes conditions of the House auto bill, including long-term 
restructuring requirements.
  There is further clarification on:
  Treasury's authority to provide support to the financing arms of 
automakers for financing activities is clarified to ensure that they 
can continue to provide needed credit, including through dealer and 
other financing of consumer and business auto and other vehicle loans 
and dealer floor loans;
  Treasury's authority to establish facilities to support the 
availability of consumer loans, such as student loans, and auto and 
other vehicle loans. Such support may include the purchase of asset-
backed securities, directly or through the Federal Reserve;
  Treasury's authority to provide support for commercial real estate 
loans and mortgage-backed securities; and
  Treasury's authority to provide support to issuers of municipal 
securities, including through the direct purchase of municipal 
securities or the provision of credit enhancements in connection with 
any Federal Reserve facility to finance the purchase of municipal 
securities.
  In addition, more reforms are enunciated for homeowners in title V. 
The home buyer stimulus provisions requires Treasury to develop a 
program, outside of the TARP, to stimulate demand for home purchases 
and clear inventory of properties, including through ensuring the 
availability of affordable mortgages rates for qualified home buyers.
  In developing such a program Treasury may take into consideration 
impact on areas with highest inventories of foreclosed properties. The 
programs will be executed through the purchase of mortgages and MBS 
using funding under HERA. Treasury will provide mechanisms to ensure 
availability of such reduced rate loans through financial institutions 
that act as either originators or as portfolio lenders.
  Under this provision, Treasury has to make affordable rates available 
under this program available in connection with Hope for Homeowner 
refinancing program.
  This legislation will give a permanent increase in FDIC and NCUA 
deposit insurance limits, it makes permanent the increase in deposit 
insurance coverage for banks and credit unions to $250,000, which was 
enacted temporarily as part of the Emergency Economic Stabilization Act 
and is scheduled to sunset on December 31, 2009, and includes an 
inflation adjustment provision for future coverage.
  Finally, I applaud Chairman Frank and the Committee on Financial 
Services for their hard work on this important piece of legislation. In 
this economic climate it is critical for us to remember that while we 
need to assist our financial institutions, we cannot do this without 
implementing reforms to protect Americans' hard-earned money.
  I strongly urge my colleagues to join me in support of this important 
legislation.
  Mr. GARRETT of New Jersey. I first yield myself 30 seconds to respond 
to the chairman's question. Yes, there is a specific philosophical 
difference with regard to keeping people in their houses. As we know, 
both sides of the aisle want to do the best that the Federal Government 
can do in this area. And the administration has already set up a 
program, the HOPE program, and taken other actions to try to facilitate 
those people who are in difficult situations to remain in their houses.
  But I believe it was Ms. Waters on your side of the aisle that raised 
the same point similar to what I raised. What do we say to the person 
who has been on time paying their bills, which is over 90 percent of 
the American public homeowners, who has been paying their bill month 
after month after month on time and saying to them, well, you know 
what? We're going to use your tax dollars to subsidize the people 
across the street with a program to help them keep when they went over 
the amount they should be spending on their homes. And that is the 
philosophical difference that we have.
  I yield now 2 minutes to the gentleman from Indiana (Mr. Burton).
  Mr. BURTON of Indiana. Let me just start off by saying I'm opposed to 
all these bailouts.
  But after having said, let me say that if we're going to do it we 
really need a comprehensive plan that's going to deal with the problems 
facing this country.
  I had home builders come into my office last week, and they told me 
that their businesses are being re-appraised, and they're going to have 
to pay the difference between what the appraisal was initially and what 
it is now, and they're driving a lot of these home builders out of 
business.
  I had some people who are commercial developers come in to see me 
last

[[Page H353]]

week, and they told me that their commercial assets are being re-
appraised, maybe 70 percent of what they were before, and they have to 
pay the difference between what they were getting and the 70 percent, 
and they're being driven out of business. So there's a huge cascading 
effect with all these problems that we're facing right now. And we're 
not addressing them in this bill or any of the other bills that I've 
seen.
  You've got people who are losing their homes. You've got home 
builders that are going out of business. You've got commercial 
developers that are going out of business because of these re-
appraisals, and there's nothing in the plans that I've seen that 
addresses these problems.
  Mr. Frank and I are good friends. But just throwing this money at 
these problems without any plan is actually crazy. And yet we did it 
with the first $350 billion tranche, and we're going to do it again, 
and then we're going to come back with a $1.2 trillion request in just 
another 2 or 3 weeks. I mean, we can't buy our way out of these 
problems. We have to have a sound business plan to deal with these 
problems. And if we don't do it, we're going to see a huge economic 
problem that's even worse than what we face today.
  So I'd like to say to Mr. Frank and my colleagues, before we start 
giving all this money away, why don't we really sit down with the 
people that are supposed to be administering this money and come up 
with a sound plan that affects the entire economy. I mean, if you're 
going to spend the money, we might as well do it the right way.
  Mr. FRANK of Massachusetts. Mr. Chairman, first I'll yield myself 30 
seconds to answer the question. What do we tell the person making 
mortgage payments why we are trying to help reduce foreclosures? And 
the major reason is that it is the improvident granting of these loans 
and the failure of many of these loans to pay off that is the single 
biggest cause of the financial crisis we're in. And a wide range of 
economists agree that until we reduce the rate of foreclosures which 
are embedded in so many securities that were, without regulation, 
scattered around the economic landscape, we will not be able to undo 
the economic problem we're in. So foreclosure diminution is part of our 
economic recovery plan.
  It also, of course, hurts property values in general.
  I now yield 1 minute to a very active member of our committee, the 
gentleman from Colorado (Mr. Perlmutter).
  Mr. PERLMUTTER. Mr. Chairman, I rise in support of the manager's 
amendment and the bill. We're in a position where $350 billion, without 
any conditions, is likely to be passed, or it's been requested and 
likely will go out the door.
  These conditions are important, and the conditions that are added 
through the manager's amendment are particularly important. One of the 
things we talked about with the original TARP bill was that money 
would, 1, buy mortgage portfolios, 2, recapitalize banks and 3, pass 
through various agencies to small businesses through the Federal home 
loan banks and through the farm credit administration.
  This manager's amendment assures that money passes directly to people 
on Main Street, including the home builders that Mr. Burton was just 
talking about, commercial realtors, commercial real estate, farmers, 
municipal bond dealers, so that credit all across the board is 
available to people and gets this economy back on track and loosens up 
credit across the United States.
  And I support the manager's amendment and ask for an ``aye'' vote.
  Mr. GARRETT of New Jersey. Mr. Chairman, I yield 3 minutes to Mr. 
Schock from Illinois.
  Mr. SCHOCK. Chairman Frank, Ranking Member Bachus and Congressman 
Garrett, first let me thank you for the opportunity to come to the 
floor and speak today.
  Chairman Frank, I congratulate you on bringing this piece of 
legislation forward, and I admire the meticulous and bipartisan nature 
in which you have crafted it.
  I would like also to thank you, the both of you, for the inclusion of 
my noncontroversial amendment into the manager's amendment. I believe 
this amendment represents a small but important step which will serve 
the good of the American people.
  My amendment is very simple. It establishes a user-friendly Web site 
where the American people can quickly and accurately see where their 
money is going.
  During debate yesterday, we heard the need for more oversight, more 
transparency, and more control over the flow of TARP funds.

                              {time}  1145

  I am glad that we here in Congress will be provided more information 
about TARP funds. However, what about the American people?
  This is their money, and I believe they need to be able to track it. 
I hope that an online database will provide a helpful tool in this 
effort. In essence, this amendment seeks to create a Google for TARP. 
This Web site will clearly display who is using the money, for what 
purposes and how their dollars will ultimately cycle back to their 
pockets. I intend this Web site to be easily searchable and to contain 
information on both specific payments and on the aggregate amounts 
received by each receiving entity. This amendment is about accurate 
accounting, openness, fair government, transparency, and hopefully, one 
day, balancing our budget.
  You know, when my constituents leave the grocery store, they know 
three things--what they've spent, what they got for their money and how 
their purchases are going to help their families. Well, the American 
people deserve to know the same thing when they, for the very first 
time, are pouring billions of the same hard-earned dollars, which they 
used to purchase groceries, into the financial and housing markets. 
Americans should be able to identify what is being spent in their name.
  Currently, the Treasury Department provides limited balance sheets, 
listing complex purchases on their Web site. The target audience of 
this Web site is for those applying for TARP funds, in other words, 
financial experts. It is not for those who are looking to see how their 
money is spent.
  Well, I'm sure my constituents are very similar to yours. They're not 
high-powered New York City investment bankers. While they have not been 
a part of this problem, they're being asked to foot the bill for it. In 
doing so, it is their right to know where their money is going, for 
what programs it is being used and how it will benefit them in the long 
run.
  While I support the bill we are considering today, I am concerned 
that these changes, while needed, will further confuse where this money 
is going. Funds will begin to cross over multiple government agencies 
to the point where anyone wanting to track the flow of money would have 
to visit multiple Web sites with his mouse in one hand and his 
calculator in the other. A person should not have to be a forensic 
accountant to decipher where his tax dollars are being allocated.
  The Acting CHAIR. The time of the gentleman has expired.
  Mr. FRANK of Massachusetts. I yield the gentleman an additional 30 
seconds.
  Mr. SCHOCK. Thank you, Mr. Frank.
  My hope is that, through this amendment, we can establish something 
similar to or what can become a part of what our President-elect has 
established under the Federal Funding Accountability and Transparency 
Act of 2006--the USAspending.gov Web site, a Web site explaining to the 
American people the different Federal agencies and how their hard-
earned money is being spent to better their lives.
  As I said, this is a commonsense amendment that seeks to improve the 
people's access to their government.
  Mr. FRANK of Massachusetts. Would the gentleman yield to me the 
remaining few seconds?
  Mr. SCHOCK. Yes, sir.
  Mr. FRANK of Massachusetts. I just want to say the gentleman said his 
amendment was noncontroversial, but noncontroversial doesn't mean 
unimportant. It is a very thoughtful amendment. It will greatly advance 
things, and I appreciate his offering it.
  The Acting CHAIR. The gentleman's time has expired.
  Mr. FRANK of Massachusetts. I yield 2 minutes to one of the Members 
who has been most active in trying to deal

[[Page H354]]

with this foreclosure problem that other Members think we should 
ignore. He is the gentleman from Maryland (Mr. Cummings).
  Mr. CUMMINGS. Mr. Chairman, I rise today in support of the manager's 
amendment offered today by Chairman Frank to H.R. 384, the TARP Reform 
and Accountability Act of 2009. I will also take this opportunity to 
commend his extraordinary leadership on this issue and to thank him and 
the Rules Committee for including language that I have proposed within 
the manager's amendment.
  The language I offer requires the Comptroller of the Currency and the 
Director of the Office of Thrift Supervision to issue mortgage 
modification data collection and reporting requirements for the banks 
they regulate and to report this information back to Congress. This 
amendment is necessary for one clear reason:
  In a December 8, 2008 report, the OCC announced that, within 3 months 
of an initial mortgage modification, nearly 36 percent of borrowers 
redefaulted by being more than 30 days past due. After 6 months, the 
rate was nearly 53 percent, and after 8 months, it was 58 percent.
  Unfortunately, no one really knows the reasons behind these redefault 
rates. This language will help us gather the information we need to 
understand what is occurring and to understand, hopefully, why it is 
occurring.
  Mr. Chairman, a RealtyTrac reported this morning that the foreclosure 
rate jumped to 81 percent in 2008 with one in every 54 households 
experiencing at least one foreclosure. This equates to nearly 2.3 
million properties.
  Foreclosure rates are projected to rise in the coming months, and it 
is, therefore, imperative to us to understand the nature of the 
modifications being made by lenders and whether they address the real 
needs of borrowers by creating terms borrowers can realistically meet.
  It is our duty to protect homeowners and to ensure transparency, 
accountability and strict standards. H.R. 384 accomplishes these 
objectives.
  Again, I want to thank Mr. Frank for his efforts, and I want to urge 
my colleagues to support this amendment and the underlying bill.
  Mr. GARRETT of New Jersey. Mr. Chairman, at this time, I yield 
another 2 minutes to the gentleman from Texas (Mr. Hensarling).
  Mr. HENSARLING. I was listening carefully to the distinguished 
chairman of the Financial Services Committee when he introduced the 
previous speaker. He said the gentleman cared passionately about the 
foreclosure mitigation, and apparently, other Members don't. I'm not 
sure who the chairman was alluding to. We certainly care about 
foreclosure mitigation on this side of the aisle.
  Mr. Chairman, there is no better foreclosure mitigation plan than 
keeping your job, number 1, having expanded opportunities for a better 
job in the future, and number 3, having a growing paycheck. That's why 
Republicans on this side of the aisle have supported a tax relief plan 
to make sure that people keep their jobs and to help small businesses. 
It's why people on this side of the aisle--why Republicans, Mr. 
Chairman--have supported a plan that would reduce the tax on future job 
creation--the capital gains tax, the tax on investment. It's why we 
have supported tax reductions for middle-income families so they can 
pay these mortgages.
  I see, unfortunately, that the chairman has left the floor, but I 
would also observe that over 2 million mortgages have been refinanced 
between the borrowers and lenders.
  Listen, a great tragedy has occurred in our housing market. Now the 
question is: With all of these losses, who is going to realize it? Is 
it going to be the borrowers and the lenders or is it going to be the 
taxpayers?
  So, if some believe there are other Members who don't care about 
foreclosure mitigation, I would say, Mr. Chairman, it appears that some 
Members don't care about the debt that they are placing on future 
generations, constraining their homeownership opportunities. They don't 
care about the fact that we are now looking, under this Congress, at 
the single largest deficit in America's history, that we are seeing red 
ink as far as the eye can see and that we are possibly planting the 
seeds for an even worse recession 5, 6, 7, 8 years from now because bad 
public policy decisions, Mr. Chairman, after 9/11 and after the dot-com 
bubble have led us to where we are today.
  Mr. DRIEHAUS. Mr. Chairman, I yield myself 1 minute.
  Thank you to the gentleman from Massachusetts for his leadership on 
this amendment and for his leadership on this issue. I stand in support 
of the manager's amendment.
  Many who support it--the Emergency Economic Stabilization Act that 
first authorized the money for TARP--despite the fact that they were 
angered by the circumstances that caused its necessity, believed it was 
essential for the Nation's economy.
  My home State of Ohio is amongst the Nation's leaders in its 
foreclosure rate, and I am keenly aware of the need for intervention to 
mitigate the increasing number of foreclosures. This measure recognizes 
that and provides relief for those who need it most, not just for 
America's homeowners, not just for America's financial institutions but 
for entire communities that are suffering and that are failing under 
the weight of the foreclosure crisis.
  I appreciate the chairman's fundamental work on this issue. Again, I 
would encourage my colleagues to support the manager's amendment.
  Mr. GARRETT of New Jersey. Mr. Chairman, at this time, I have no 
further speakers, and I would reserve my time until the gentleman from 
Massachusetts is ready to close.
  Mr. FRANK of Massachusetts. I yield 2 minutes to one of the most 
active advocates of trying to have effective foreclosure relief. She is 
the gentlewoman from Maryland (Ms. Edwards).
  Ms. EDWARDS of Maryland. Mr. Chairman, I rise today in support of the 
underlying bill and of the amendment introduced by my good friend from 
Massachusetts.
  He has been a tireless leader, the chairman has, in trying to ensure 
that this administration does right by the taxpayers and that it 
particularly does right by homeowners who are facing foreclosure.
  Like many of my colleagues, I supported the final TARP. Yet, despite 
the debate in this Congress and despite the intense discussions with 
the administration, they failed taxpayers miserably in making sure that 
homeowners are protected, that they stay in their homes and that we 
restore stability to our housing and mortgage markets.
  This amendment adds and strengthens many critically important 
provisions. I particularly support the establishment of an Office of 
Minority and Women Inclusion.
  As my colleague from Maryland noted, foreclosures continue to take 
their toll on families, communities and States across this country. 
Yesterday, of course, RealtyTrac announced that the foreclosure rate 
was up 81 percent in 2008. In fact, it's likely that, in my home State 
of Maryland, 1 in 26 homeowners will experience foreclosure this year. 
Many of those homeowners, some of those homeowners, live in my own 
neighborhood.
  I represent two counties leading our State in foreclosure numbers. If 
left unaddressed, the foreclosures will continue to increase and will 
touch even more lives. I am frustrated that this administration has 
failed and that foreclosures have skyrocketed.
  Yet it's important now for us to get it right for the American people 
and for the taxpayer. So I support the underlying bill and the 
amendment. I applaud the chairman for his leadership to make certain 
that American taxpayers are protected, that we ensure that people stay 
in their homes, that they are protected from foreclosure, that we 
stabilize our housing market, and that we provide accountability for 
taxpayers and for the administration.
  Mr. GARRETT of New Jersey. I continue to reserve the balance of my 
time.
  Mr. FRANK of Massachusetts. I yield 1 minute to the gentleman from 
Minnesota (Mr. Ellison) who has been a fierce advocate here, 
particularly of the rights of tenants, which are often overlooked in 
this process.
  Mr. ELLISON. Let me thank Chairman Frank for bringing this critical 
legislation to the floor.
  When Congress passed the emergency financial services rescue package 
last fall, we included specific provisions to help distressed 
homeowners. Unfortunately, the Bush administration decided to help out 
Wall Street with

[[Page H355]]

these funds while ignoring the needs of Main Street.
  The fact is that this piece of legislation, carefully crafted and now 
working with an amenable and a cooperative administration, is in a much 
better position to meet the needs set forth in the original 
legislation, which is to help homeowners. The bill requires at least 
$40 billion, but no more than $100 billion, be used to help distressed 
homeowners.
  Finally, I am excited to report that there is a measure that I 
authored with other Members which provides reasonable protections for 
bona fide renters, which is something I'm very happy about. I am 
pleased to be able to support this legislation today.
  Again, Mr. Chairman, let me thank our very able chairman on this 
piece of legislation so we can get our country back and moving again.
  Mr. GARRETT of New Jersey. I continue to reserve the balance of my 
time.
  Mr. FRANK of Massachusetts. The gentleman should proceed because I 
will be closing for us, and I am the last speaker.
  The Acting CHAIR. The gentleman from New Jersey is recognized for 2 
minutes.
  Mr. GARRETT of New Jersey. Mr. Chairman, the gentleman from Colorado 
said that this amendment will make sure of ``such and such,'' and he 
listed off a half a dozen things that the bill, or the amendment, will 
do.
  The reality is that the chairman will tell him this amendment will 
make sure of absolutely nothing. Why? Because this amendment will never 
become law. That's not me saying that. That's what the chairman has 
said repeatedly as well. It is not going to move in the House and the 
Senate. It is not going to be eventually signed by the President.
  Soon, we'll be voting on legislation that will, in essence, allow the 
next administration to spend $350 billion, and the American taxpayer 
will be asking us: What did we authorize that $350 billion for? For 
there was no plan, and there is no plan as we speak here today as to 
what the next administration will be spending that $350 billion for.
  Congress should not authorize, Congress should not pass any other 
legislation until we have the specifics of a plan. We should not do so 
until we have a plan that will not pick winners and losers, until we 
have a plan that will protect the American taxpayer, until we have a 
plan in place and the language before us that will not bail out the 
banks that made terrible decisions. We should not be moving legislation 
that will appropriate $350 billion until we have a plan in writing 
specifically that will not bail out borrowers who knowingly took 
inappropriate loans.
  Finally, we should not spend an additional $350 billion as we pick 
winners and losers and do nothing, absolutely nothing, for the 90-plus 
percent of American homeowners who have done absolutely everything 
right and who have paid their loans and mortgages on time and who are 
now asking: Why are they bailing out the banks and other imprudent 
lenders?
  I encourage all of my colleagues at this point in time to vote ``no'' 
on this amendment that will do absolutely nothing to ensure these 
protections to the American taxpayers. I encourage all of my colleagues 
as well to vote such that we will not appropriate an additional $350 
billion of taxpayer dollars.
  With that, I yield back the balance of my time.

                              {time}  1200

  Mr. FRANK of Massachusetts. Mr. Chairman, it becomes clear that for 
many in the minority this is an opportunity to punish Barack Obama for 
the mistakes made by George Bush. The gentleman says we should have a 
plan. In fact, what they are objecting to is the plan.
  Here is where we differ: They have said, the gentleman who just 
spoke, the ranking member of the full committee, ``Let's ask the 
President to tell us what he plans to do.'' We want to do it the 
opposite way. We want to pass this bill to tell the President what we 
think should be done.
  Now, it doesn't get specific as to institutions. It shouldn't. We 
don't pick institutions here. We empower them and direct them, in some 
cases, to deal with the whole economy and with classes of institutions. 
There is no selection here by Congress of this or that company or even 
line of business.
  Secondly, the gentleman closed by saying why should the majority 
respond to the foreclosure issue. And the answer is that the 
foreclosure issue hurts everybody in this country. It reduces property 
values too radically. It reduces the capacity of institutions that have 
these assets that are held. It hurts pension funds. It hurts a whole 
range of people. It hurts people's 401(k)s. The whole society has 
suffered from this improvidence.
  And I would note again, in 2007, the majority in the House, when we 
became the majority, voted to ban these loans from being made whether 
the fault was on the part of the borrower or the lender. The gentleman 
from New Jersey and others condemned that, said we were interfering 
unduly with the market. He said the market would take care of it. Well, 
the market hasn't taken care of it. The market has plummeted.
  This bill does what Members say they want, and I guess they won't 
take ``yes'' for an answer. It says this is what the House believes 
should be in the plan. And no, it does not look like it's going to pass 
the Senate now, although Members on the other side rarely think that's 
a reason for us not to act. But if we pass this and the President was 
to disappoint us--and I don't expect him to; I have a great deal of 
confidence in him--and not carry this out, the bill will be alive in 
the Senate and will be available as an instrument to do it.
  Beyond that, here's the difference. We passed a law, and George Bush 
ignored the law, as he often does. There will be a great contrast 
between a President who ignored the law and a President who agrees with 
us to abide with what the House asked him to do.
  The Acting CHAIR. The question is on the amendment offered by the 
gentleman from Massachusetts (Mr. Frank).
  The question was taken; and the Acting Chair announced that the ayes 
appeared to have it.
  Mr. FRANK of Massachusetts. Mr. Chairman, I demand a recorded vote.
  The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further 
proceedings on the amendment offered by the gentleman from 
Massachusetts will be postponed.


                 Amendment No. 2 Offered by Ms. Matsui

  The Acting CHAIR. It is now in order to consider amendment No. 2 
printed in House Report 111-3.
  Ms. MATSUI. Mr. Chairman, I offer an amendment.
  The Acting CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 2 offered by Ms. Matsui:
       Page 32, after line 19 insert the following new section 
     (and redesignate the subsequent section and conform the table 
     of contents accordingly):

     SEC. 206. FORECLOSURE MORATORIUM RECOMMENDATION.

       (a) Foreclosure Deferment.--It is the sense of the Congress 
     that any institution which becomes an assisted institution on 
     or after the date of the enactment of this Act should not 
     initiate, or allow to continue, a foreclosure proceeding or a 
     foreclosure sale on any with respect to any principal 
     homeowner mortgage, until the earliest of the following:
       (1) The date by which the comprehensive plan to prevent and 
     mitigate foreclosures has been developed by the Secretary and 
     the Federal Deposit Insurance Corporation and approved by the 
     Financial Stability Oversight Board under section 201 and 
     become fully operational.
       (2) The date by which the systematic foreclosure prevention 
     and mortgage modification plan has been established by the 
     Secretary in accordance with section 204 and become fully 
     operational.
       (3) The end of the 9-month period beginning on the date of 
     the enactment of this Act.
       (b) FHA-Regulated Loan Modification Agreements.--If an 
     assisted institution to which subsection (a) applies reaches 
     a loan modification agreement with a homeowner under the 
     auspices of the Federal Housing Administration before any 
     plan referred to in paragraph (1) or (2) of such subsection 
     takes effect, subsection (a) shall cease to apply to such 
     institution as of the effective date of the loan modification 
     agreement.
       (c) Duty of Consumer to Maintain Property.--Any homeowner 
     for whose benefit any foreclosure proceeding or sale is 
     barred under subsection (a) from being instituted, continued 
     , or consummated with respect to any homeowner mortgage may 
     not, with respect to any property securing such mortgage, 
     destroy, damage, or impair such property, allow the property 
     to deteriorate, or commit waste on the property.

[[Page H356]]

       (d) Duty of Consumer to Respond to Reasonable Inquiries.--
     Any homeowner for whose benefit any foreclosure proceeding or 
     sale is barred under subsection (a) from being instituted, 
     continued, or consummated with respect to any homeowner 
     mortgage shall respond to reasonable inquiries from a 
     creditor or servicer during the period during which such 
     foreclosure proceeding or sale is barred.

  The Acting CHAIR. Pursuant to House Resolution 62, the gentlewoman 
from California (Ms. Matsui) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentlewoman from California.
  Ms. MATSUI. Mr. Chairman, I rise today to offer an amendment, along 
with Representative Kathy Castor, to help homeowners across our 
country. Our amendment expresses the sense of the Congress that 
financial institutions who receive future TARP funds should not 
foreclose on any principal homeowner until the new loan modification 
program in the bill is implemented and deemed fully operational.
  Mr. Chairman, the foreclosure crisis is the root cause of our current 
economic crisis. Sadly, there is no end in sight.
  Right now, more than 8 million homeowners are expected to face 
foreclosure over the next 4 years. That is one in six mortgages in the 
United States. The rising unemployment will cause even more Americans 
to face foreclosure.
  California, and in particular my home district of Sacramento, has 
been greatly impacted by the foreclosure crisis. I've hosted 
foreclosure workshops. I've seen the hardships and looks of desperation 
on so many faces not knowing if they will lose their home.
  At one workshop, I was approached by a woman that had a loan through 
one of the financial institutions that had taken TARP funds. When we 
met, she had been talking to the bank's representatives for a few 
months to no avail. She was one step from losing her home. It took her 
dozens of phone calls and letters over many months for her and the bank 
to settle on a new loan. I worry that without a true moratorium on 
foreclosures, people like her will not be as lucky.
  Similar situations are occurring throughout the country.
  Congress must use all of our available resources to keep Americans in 
their homes. The bill we're considering today calls for the strongest 
foreclosure prevention program to date. It requires the Treasury and 
the FDIC to develop a comprehensive systemic loan modification program 
by April 1. However, that is more than 3 months away, and the plan is 
estimated to take an additional month or two to become operational. In 
the meantime, thousands of homeowners could be foreclosed upon.
  Our goal is to help Main Street. It would be devastating if 
homeowners were foreclosed on before they had an opportunity to qualify 
for the new loan modification program under this bill.
  That is why I have offered my amendment with Congresswoman Castor 
that calls on the mortgage industry to implement a temporary timeout on 
foreclosures.
  Our constituents and businesses need breathing room to find solutions 
to help Americans stay in their home. I've been calling for a 
moratorium on foreclosures over the last 8 months. Last May, I 
introduced the Home Retention and Economic Stabilization Act that calls 
for a 9-month moratorium on foreclosures for responsible homeowners.
  Yesterday, I reintroduced the same bill, along with Senator Menendez 
in the Senate. I will continue to actively pursue a meaningful 
moratorium on foreclosures in the coming days and months.
  Until then, a timeout in foreclosures is a necessary stop-gap measure 
that will give Congress, regulators, and homeowners some breathing room 
while everyone works to craft a fair, sensible, and lasting solution to 
the foreclosure crisis. I hope that my colleagues will join me in 
supporting this amendment.
  I reserve the remainder of my time.
  Mr. GARRETT of New Jersey. Mr. Chairman, I claim the time in 
opposition.
  The Acting CHAIR. The gentleman from New Jersey is recognized for 5 
minutes.
  Mr. GARRETT of New Jersey. I yield myself 2 minutes.
  First of all, I begin by saying I appreciate the sponsor's intent 
behind the amendment. She and I join in the thought that we need to do 
all that we possibly can to deal with the terrible situation of the 
economy right now, and she is right that the subprime issue and the 
foreclosure issue is at the heart of the housing prices and the heart 
of the economic crisis that we have right now.
  The question is, what do we do about it? And the question is, what do 
we do about it in a manner to help both those people who have been 
paying on time and also help those people who are perhaps in a 
difficult situation?
  The amendment, though, as it's currently written, may have an 
unintended effect. If you effectively allow for an extended period of 
moratorium on foreclosure, that may actually have the potential of 
encouraging people from actually going to the bank to try to work 
things out. Or maybe it's not encouraging, not just encouraging them 
enough to do what is appropriate during this period of time.
  I would ask the gentlelady a question, though.
  In the form of the amendment, besides the potential policy problems, 
it would appear that the amendment is flawed technically, and for that 
reason unworkable. If I look at page 2--and if she would refer to 
that--it's set up not as a sense of Congress, which, I believe, is the 
intention behind this bill, but rather as language which would have the 
force of law. Page 2, section C, ``duty of the consumer to maintain 
property.'' It goes on to say that any homeowner whose benefit in 
foreclosure proceeding or sale is ``barred under subsection A,'' and it 
makes references to other sections of the law.
  The question is, how can a sense of Congress, therefore, actually 
have the effect of law?
  So is this an amendment that maybe has the best of intentions but was 
drafted in a manner that potentially would have the effect of law even 
though it is not a law, it is merely a sense of Congress?
  I would ask, then, in light of the fact that there is both the policy 
reason that we may agree on but have some problems with but is 
technically flawed, I would ask that the sponsor would consider 
withdrawing the amendment at this time.
  Ms. MATSUI. Mr. Chairman, I yield 1 minute to the chairman of the 
committee.
  Mr. FRANK of Massachusetts. I'll tell you what it's written to say. 
We believe that it is entirely a sense of Congress but understand the 
terrible harm that would come if it wasn't. Of course, the gentleman 
says it's not going to become law, so why he's so concerned about it, I 
don't know.
  But if it did, here is what it would do: This terrible section, 
here's what it does. It says that the borrower can't destroy the 
property. We are in danger of being too strong in insisting on 
protecting the lender. The language to which he objects--which he quite 
understandably didn't read--says ``the homeowner may not, with respect 
to any property, destroy, damage, or impair such property, allow it to 
deteriorate or commit waste.''
  So it may be that we have unduly argued that the borrower pending 
this who's got a foreclosure shouldn't trash the property.
  I will plead guilty to perhaps erring on the side of ambiguity in 
imposing on the borrower an obligation not to trash the property.
  Mr. GARRETT of New Jersey. I will yield myself just 1 more minute.
  I can simply come to the floor and speak to what the experts have 
testified in committee with problems of language of this nature. One 
is, as I've already stated, experts have said that language like this 
would encourage the situation for borrowers to not do the right thing, 
that is, to call up their lenders and say, ``I have a problem, and I 
want to engage in negotiations to try to work out the loan.''
  We know this is an ongoing problem, and that's why there's so many 
advertisements and like on TV right now to encourage people to do the 
right thing. This language would be counterproductive in that, so the 
experts say.
  And secondly, the lenders have come to the committee and testified 
before our committee that the longer the borrower remains delinquent, 
the less

[[Page H357]]

likely he or she will be able to cure the delinquency and avoid 
foreclosure.
  All this is really doing is prolonging what should be dealt with 
today. It's never to be put off to tomorrow what we should deal with 
today, and this language, unfortunately, does just that.
  With that, I reserve.
  Ms. MATSUI. Mr. Chairman, how much time do I have remaining?
  The Acting CHAIR. The gentlewoman from California has 1 minute 
remaining. The gentleman from New Jersey has 2 minutes remaining.
  Ms. MATSUI. Mr. Chairman, I would like to yield 1 minute to the 
gentlelady from Florida (Ms. Castor).
  Ms. CASTOR of Florida. Mr. Chairman, I rise in support of the Matsui-
Castor amendment. Congresswoman Matsui has summarized the amendment 
very well, and I appreciate her leadership.
  We all agree the housing crisis, foreclosures, and the related 
disintegration of value in our neighborhoods must be addressed. We know 
the statistics very well about the extent of the problem. And in 
Florida, we have the second highest rate of foreclosures.
  I did not support the $350 billion first tranche of the TARP because 
I had no confidence in the Bush administration that they were going to 
help homeowners and prevent foreclosures. I hoped and prayed that I was 
wrong, but unfortunately, that has been borne out.
  I'm now planning my fourth foreclosure workshop, and to the contrary, 
rather than discouraging homeowners, here is what I found. They cannot 
get the loss mitigation personnel on the phone. They want to work it 
out. They want a little bit of breathing room. Now where it's a vicious 
cycle because they've lost their job, they're looking for their second 
part-time job, they need a little breathing room that this amendment 
will provide.
  They're not asking for a bailout. They're not asking for billions of 
dollars that have gone to the financial institutions. They want a 
little bit of a break.
  Mr. GARRETT of New Jersey. Mr. Chairman, I yield myself 1 minute.
  I appreciate the gentlelady's comments. We have done similar programs 
such as that in talking to the people in the district as far as working 
out, what have you.
  Again, the experts--this is the third point I could have raised 
before--the experts also tell us that a foreclosure moratorium, which 
in essence is what we're talking about here, will have the unintended 
side effect also of raising up the cost of mortgages in the future.
  So what this means is for that individual who may be able to work out 
a deal today because mortgage rates are, as we know, at historic low 
rates, if this has the effect of law--which is actually how the 
language is situated here--and the moratorium were to occur and 
mortgage rates were to go up, by the time they actually sat down with 
that facilitator at the bank and worked things out, they would find 
that the mortgage rates unfortunately, due to the economies of the 
nature of this bill, the rates are higher and they are at a 
disadvantaged situation than they would be today.
  Let's have the people encouraged to work out their mortgages today. 
Work it out with their banks. I'm sure both sides of the aisle want to 
use our offices to facilitate those communications as well when people 
have problems contacting their banks. I know my office works, and I'm 
sure your office does as well to try to get that contact with them.
  And let's do that to get it done today and not put it off until 
tomorrow.
  The Acting CHAIR. The gentleman from New Jersey has 1 minute 
remaining.
  Does he yield that minute back?
  Mr. GARRETT of New Jersey. I yield back.
  The Acting CHAIR. All time for debate has expired.
  The question is on the amendment offered by the gentlewoman from 
California (Ms. Matsui).
  The amendment was agreed to.

                              {time}  1215


               Amendment No. 3 Offered by Mr. Hensarling

  The Acting CHAIR. It is now in order to consider amendment No. 3 
printed in House Report 111-3.
  Mr. HENSARLING. Mr. Chairman, I have an amendment at the desk made in 
order by the rule.
  The Acting CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 3 offered by Mr. Hensarling:
       Page 11, strike lines 1 through 7.

  The Acting CHAIR. Pursuant to House Resolution 62, the gentleman from 
Texas (Mr. Hensarling) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Texas.
  Mr. HENSARLING. Mr. Chairman, I've listened carefully to the previous 
speaker and comments from our distinguished chairman of the Financial 
Services Committee. It's quite clear to me that, come early next week, 
they're certainly going to miss President Bush. I don't know who 
they're going to start to blame every problem in the universe on come 
next week.
  I didn't come here to engage in the blame game, but I certainly can't 
let the chairman's comment pass as he said something to the effect that 
President Obama is inheriting a problem created by President Bush. 
Well, as the chairman knows, there's a lot of underlying causes to the 
predicament we find ourselves in and I'm happy to debate them at a 
later time, but I would also note that the economic policy of America 
is determined substantially by this Congress, and the economy was doing 
just fine until the Democrats took over Congress.
  Now, Mr. Chairman, as I look at the bill that is before us, again, 
there are certain areas where I agree with our distinguished chairman, 
more accountability and more transparency tends to be a good thing. But 
Mr. Chairman, there is a provision in here though that says the 
``Secretary may require an observer in the board rooms for institutions 
that receive TARP money.'' Now, Mr. Chairman, I've been around here for 
a few years and although I have no doubt that everybody is well-meaning 
in the legislation that they bring to the floor, my fear is that 
today's ``may'' shall turn out to be tomorrow's ``shall.'' And my fear 
is that today's ``observer'' will become tomorrow's ``suggester'' and 
next week will become ``the mandator.'' I think this is a terrible, 
terrible precedent. I think it bespeaks of industrial policy run by the 
government. I think it puts, again, one more of those slippery stones 
on that slippery slope to socialism.
  And Mr. Chairman, what are they observing? I mean, what specific 
policies have they been given to undertake by this United States 
Congress? What are they observing? And what I observe, Mr. Chairman, is 
that my reading of the legislation says that any ``assisted 
institution'' as defined by any institution that receives ``any direct 
or indirect recipient of assistance or benefit from TARP.'' And so I 
hope that the distinguished chairman of the Financial Services 
Committee, on his time, will enlighten us on his interpretation of how 
he wrote the underlying bill. Because does this mean that any business 
borrowing money from a bank under TARP will now be subject to an 
observer of the Federal Government? Does this mean anyone who has an 
insurance policy with AIG is now subject to an observer from the 
Federal Government?
  Since we have express language in here dealing with the auto 
industry, I hope the chairman will answer the question, does this mean 
that the Secretary of the Treasury can place an observer in every UAW 
union hall across the Nation if they receive monies under TARP?
  Now, again, I have no doubt that, although I disagree with the 
chairman on a number of issues, I know that his purpose is a noble one. 
But I also know, Mr. Chairman, that when things begin in Washington, 
they don't always end the way that they started. And so I would 
question, number one--you know, we were told at one time Social 
Security would be solvent forever; well, it's not. We were told that 
TRIA was a temporary program; well, it's not. We were told Fannie and 
Freddie would never be bailed out. And I'm sure those who said it meant 
it at the time, but circumstances change, they were bailed out. We were 
told that once House Democrats took over control, that they would rein 
in spending and balance the budget, and now we have the largest deficit 
in American history.
  So I'm fearful that this provision will grow into something that 
maybe it's

[[Page H358]]

not intended, not something that I would appreciate. And I'm also very 
curious why so many other accountability provisions dealing with home 
borrowers have seemingly fallen out of the bill, including one that the 
chairman agreed to earlier--I believe it was in April in the markup of 
the Hope for Homeowners program--when he accepted the amendment now, 
but seemingly is taking it out of the bill at this point.
  Mr. Chairman, I reserve the balance of my time.
  Mr. FRANK of Massachusetts. Mr. Chairman, I rise to claim the time in 
opposition.
  The Acting CHAIR. The gentleman from Massachusetts is recognized 
for----
  Mr. FRANK of Massachusetts. How much time did the gentleman consume?
  The Acting CHAIR. 5 minutes.
  Mr. FRANK of Massachusetts. Mr. Chairman, I am struck by the implicit 
endorsement of this amendment that I received from my friend from 
Texas. He opposed the amendment by talking not about what it does, but 
what might happen later on in a way very different from it. He did not 
appear to have much objection to the amendment itself. He is talking 
about, if we do this, it might lead to something else. Well, at that 
point object to something else.
  The argument that I'm against this because it will lead to something 
else almost always comes from Members who don't like the provision 
under debate, feel uncomfortable in explaining why, so they, therefore, 
debate a straw man. Yes, there were Members who wanted it to be 
mandatory that we put someone on the board of directors; I thought that 
was inappropriate. I don't think a Federal official with the political 
pressures to which he or she will be suffered should be voting as a 
member of the board of directors. There were others who wanted to 
require an observer in every case. We came to what I think is a very 
moderate approach, to give the Secretary of the Treasury the 
discretionary authority to do it. There may be some cases where it is 
important, some where you could forgo it.
  The fact that the budget deficit went up does not seem to be an 
argument against giving the Secretary of the Treasury a discretionary 
observer at institutions that receive any help under the TARP. And the 
fact that the gentleman would cite the budget deficit and terrorism 
risk insurance and what happened to them as reasons not to deal with 
something entirely different because as they change this might change 
does not meet my logical standards.
  Now, I will say, by the way, with terrorism risk insurance, as an 
advocate of it--along with the former chairman of the committee, Mr. 
Oxley--I never said that it would be temporary. I believe that there 
is, in fact, a public responsibility to deal with terrorism, and I 
didn't feel it was going to go away. But in any case, it's an 
irrelevancy.
  Here's the proposal: To give the Secretary of the Treasury 
discretionary authority to send an observer with the right to sit in on 
meetings if he believes that it is justified in the particular set of 
circumstances. It's not a voting member, and it's not mandatory in all 
cases. I find it hard to see what harm it would do; so, apparently, 
does my friend from Texas. Because if he were clear about the harm that 
would do, he would have documented that. Instead, he talked not about 
the harm that might come from this amendment, but from harm that might 
come at a future date when something very different from this amendment 
was put into effect. By the way, this could not grow in an evolutionary 
fashion; it would take a vote of the Congress to require this. This 
would not be something that happens accidentally; it would be something 
that would take a conscious decision.
  What we are saying here is we want more accountability. We are saying 
that we have some confidence in the Obama administration. And again, we 
are at the central issue here. Many of us believe that President Bush's 
administration did not use this authority as well as they should have. 
By the way, I agree with the administration that we are still better 
off than they would have been if they had not had the authority at all, 
but we thought it could have been used even better. The central 
question we will be addressing next week is; do we deny to the new 
President tools that the old President had that many think he misused?
  This bill is a subordinate, it says this; should we tell the new 
President that, while we in the House believe he should have the 
opportunity to deploy these tools, we have very clear ideas about what 
should be done about it?
  And we have done several hearings. This has been a very participatory 
process. I was pleased with the gentleman from California (Mr. 
Campbell) yesterday, the gentleman from Illinois (Mr. Schock) today, 
both talked about things that are positive in this.
  We have opened ourselves up and have accepted a large number of 
proposals from Members on both sides. There will be an amendment 
offered later by the gentleman from Arizona (Mr. Flake) that I intend 
to vote for and I hope the House will overwhelmingly adopt. So we are 
trying to move forward.
  If Members want to debate what we are doing or not doing, that's 
reasonable; but let me just close by saying here's where we are: We are 
proposing that the Secretary of the Treasury in the new administration 
have a discretionary right to send an observer to recipients of TARP 
funds where he thinks that would be appropriate. The gentleman from 
Texas says don't do that because TRIA became permanent, and we have a 
bigger budget deficit. And I guess hair doesn't grow on certain parts 
of the body. None of these have anything to do with the issue under 
consideration. And the absence of arguments against this, what the 
amendment proposes, gives me a sense of confidence that it's really 
pretty hard to criticize.
  Mr. Chairman, I yield back the balance of my time.
  Mr. HENSARLING. Perhaps the chairman did not hear all of my remarks--
--
  Mr. FRANK of Massachusetts. Parliamentary inquiry.
  The Acting CHAIR.
  Does the gentleman from Texas yield for a parliamentary inquiry?
  Mr. HENSARLING. I do not.
  Mr. FRANK of Massachusetts. Point of order, Mr. Chairman.
  The Acting CHAIR. The gentleman from Massachusetts will state his 
point of order.
  Mr. FRANK of Massachusetts. I was told that the gentleman's time had 
expired. I have a right to close. I waived that because I was told that 
the gentleman had consumed 5 minutes when I asked. I thought that was 
all there was on the amendment.
  The Acting CHAIR. No. The gentleman from Texas had 30 seconds 
remaining. The Chair understood the question to be--or at least the 
answer provided was--how much time the gentleman from Massachusetts 
had, which was 5 minutes.
  Mr. FRANK of Massachusetts. Oh. I apologize for my diction because I 
thought that I had asked how much time he had consumed.
  The Acting CHAIR. And the Chair apologies for any misunderstanding.
  The gentleman from Texas has 30 seconds remaining to close.
  Mr. HENSARLING. Again, perhaps the chairman of the committee missed 
some of my remarks. My concern is the way that this is drafted is we 
are giving the Secretary of Treasury the power to put an observer into 
every small business in America who borrows money from a community bank 
that gets TARP funds. That isn't what might happen, that is what does 
happen. And when the chairman says he's concerned about accountability, 
I wonder why doesn't that go to the borrower side. Why is he striking 
that portion of the bill that has borrower certification that they did 
not intentionally default on their mortgage? Why does this bill strike 
the fine or imprisonment for borrowers who make willful, false 
statements? Why does he strike the requirement of those who are found 
to have committed mortgage fraud, that they have to expunge any direct 
financial benefit? So it's kind of selective concern, I would say.
  The Acting CHAIR. The time of the gentleman has expired.
  Mr. FRANK of Massachusetts. Parliamentary inquiry, Mr. Chairman.
  The Acting CHAIR. The gentleman from Massachusetts will state his 
parliamentary inquiry.
  Mr. FRANK of Massachusetts. Do I have any time remaining?

[[Page H359]]

  The Acting CHAIR. The gentleman from Massachusetts yielded back the 
balance of his time.
  Mr. FRANK of Massachusetts. Mr. Chairman, I did that, but I did that 
because I had asked--as I think the transcript would show--how much 
time he had consumed. We apparently had a miscommunication. So I would 
ask unanimous consent that any remaining time be allowed.
  The Acting CHAIR. Is there objection to the request of the gentleman 
from Massachusetts?
  There was no objection.
  The Acting CHAIR. The gentleman from Massachusetts is recognized for 
the 10 seconds remaining before he yielded back the balance of his 
time.
  Mr. FRANK of Massachusetts. I will use the 10 seconds to say that the 
gentleman from Texas said ``may'' may become ``shall.'' ``May'' does 
not become ``shall'' without our voting.
  The Acting CHAIR. The question is on the amendment offered by the 
gentleman from Texas (Mr. Hensarling).
  The question was taken; and the Acting Chair announced that the noes 
appeared to have it.
  Mr. HENSARLING. Mr. Chairman, I demand a recorded vote.
  The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further 
proceedings on the amendment offered by the gentleman from Texas will 
be postponed.
  The Acting CHAIR. The Committee will rise informally.
  The SPEAKER pro tempore (Mr. Higgins) assumed the chair.

                          ____________________