[House Report 110-903]
[From the U.S. Government Publishing Office]






110th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     110-903

======================================================================


 
 PROVIDING FOR CONSIDERATION OF THE SENATE AMENDMENT TO THE BILL (H.R. 
 3997) TO AMEND THE INTERNAL REVENUE CODE OF 1986 TO PROVIDE EARNINGS 
    ASSISTANCE AND TAX RELIEF TO MEMBERS OF THE UNIFORMED SERVICES, 
   VOLUNTEER FIREFIGHTERS, AND PEACE CORPS VOLUNTEERS, AND FOR OTHER 
                                PURPOSES

                                _______
                                

  September 29 (legislative day, September 28)--Referred to the House 
                   Calendar and ordered to be printed

                                _______
                                

  Ms. Slaughter, from the Committee on Rules, submitted the following

                              R E P O R T

                      [To accompany H. Res. 1517]

    The Committee on Rules, having had under consideration 
House Resolution 1517, by a nonrecord vote, report the same to 
the House with the recommendation that the resolution be 
adopted.

                SUMMARY OF PROVISIONS OF THE RESOLUTION

    The resolution provides for consideration of the Senate 
amendment to the House amendment to the Senate amendment to 
H.R. 3997, the Emergency Economic Stabilization Act of 2008. 
The resolution makes in order a motion by the Chairman of the 
Committee on Financial Services to concur in the Senate 
amendment to the House amendment to the Senate amendment with 
the text of the House amendment printed in this report. The 
rule waives all points of order against the motion and provides 
that the Senate amendment and the motion shall be considered as 
read. The rule provides three hours of debate on the motion 
equally divided and controlled by the chairman and ranking 
minority member of the Committee on Financial Services. The 
rule provides that the Chair may postpone further consideration 
of the motion to a time designated by the Speaker.

                         EXPLANATION OF WAIVERS

    The waiver of all points of order against the motion 
includes a waiver of clause 10 of rule XXI regarding PAYGO and 
a waiver of clause 7 of rule XVI regarding germaneness.

              SUMMARY OF THE HOUSE AMENDMENT MADE IN ORDER

    The amendment provides up to $700 billion to the Secretary 
of the Treasury to buy mortgages and other assets that are 
clogging the balance sheets of financial institutions and 
making it difficult to access credit. The amendment also 
establishes a program that would allow companies to insure 
their troubled assets.
    The amendment requires the Treasury to modify troubled 
loans wherever possible to help American families keep their 
homes. It also directs other Federal agencies to modify loans 
that they own or control. Finally, it improves the HOPE for 
Homeowners program by expanding eligibility and increasing the 
tools available to the Department of Housing and Urban 
Development to help more families keep their homes.
    The amendment requires companies that sell some of their 
bad assets to the government to provide warrants so that 
taxpayers will benefit from any future growth these companies 
may experience as a result of participation in this program. 
The amendment also requires the President to submit legislation 
that would cover any losses to taxpayers resulting from this 
program from financial institutions.
    In order to participate in this program, companies will 
lose certain tax benefits and, in some cases, must limit 
executive pay. In addition, the amendment limits ``golden 
parachutes'' and requires that unearned bonuses be returned.
    Rather than giving the Treasury all the funds at once, the 
legislation gives the Treasury $250 billion immediately, then 
requires the President to certify that additional funds are 
needed ($100 billion, then $350 billion subject to 
Congressional disapproval). The Treasury must report on the use 
of the funds and the progress in addressing the crisis. The 
amendment also establishes an Oversight Board and establishes a 
special inspector general to protect against waste, fraud and 
abuse.

               TEXT OF THE HOUSE AMENDMENT MADE IN ORDER

  In lieu of the matter proposed to be inserted by the 
amendment of the Senate to the amendment of the House to the 
amendment of the Senate, insert the following:

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Emergency 
Economic Stabilization Act of 2008''.
  (b) Table of Contents.--The table of contents for this Act is 
as follows:

Sec. 1. Short title and table of contents.
Sec. 2. Purposes.
Sec. 3. Definitions.

                 TITLE I--TROUBLED ASSETS RELIEF PROGRAM

Sec. 101. Purchases of troubled assets.
Sec. 102. Insurance of troubled assets.
Sec. 103. Considerations.
Sec. 104. Financial Stability Oversight Board.
Sec. 105. Reports.
Sec. 106. Rights; management; sale of troubled assets; revenues and sale 
          proceeds.
Sec. 107. Contracting procedures.
Sec. 108. Conflicts of interest.
Sec. 109. Foreclosure mitigation efforts.
Sec. 110. Assistance to homeowners.
Sec. 111. Executive compensation and corporate governance.
Sec. 112. Coordination with foreign authorities and central banks.
Sec. 113. Minimization of long-term costs and maximization of benefits 
          for taxpayers.
Sec. 114. Market transparency.
Sec. 115. Graduated authorization to purchase.
Sec. 116. Oversight and audits.
Sec. 117. Study and report on margin authority.
Sec. 118. Funding.
Sec. 119. Judicial review and related matters.
Sec. 120. Termination of authority.
Sec. 121. Special Inspector General for the Troubled Asset Relief 
          Program.
Sec. 122. Increase in statutory limit on the public debt.
Sec. 123. Credit reform.
Sec. 124. HOPE for Homeowners amendments.
Sec. 125. Congressional Oversight Panel.
Sec. 126. FDIC authority.
Sec. 127. Cooperation with the FBI.
Sec. 128. Acceleration of effective date.
Sec. 129. Disclosures on exercise of loan authority.
Sec. 130. Technical corrections.
Sec. 131. Exchange Stabilization Fund reimbursement.
Sec. 132. Authority to suspend mark-to-market accounting.
Sec. 133. Study on mark-to-market accounting.
Sec. 134. Recoupment.
Sec. 135. Preservation of authority.

                   TITLE II--BUDGET-RELATED PROVISIONS

Sec. 201. Information for congressional support agencies.
Sec. 202. Reports by the Office of Management and Budget and the 
          Congressional Budget Office.
Sec. 203. Analysis in President's Budget.
Sec. 204. Emergency treatment.

                        TITLE III--TAX PROVISIONS

Sec. 301. Gain or loss from sale or exchange of certain preferred stock.
Sec. 302. Special rules for tax treatment of executive compensation of 
          employers participating in the troubled assets relief program.
Sec. 303. Extension of exclusion of income from discharge of qualified 
          principal residence indebtedness.

SEC. 2. PURPOSES.

  The purposes of this Act are--
          (1) to immediately provide authority and facilities 
        that the Secretary of the Treasury can use to restore 
        liquidity and stability to the financial system of the 
        United States; and
          (2) to ensure that such authority and such facilities 
        are used in a manner that--
                  (A) protects home values, college funds, 
                retirement accounts, and life savings;
                  (B) preserves homeownership and promotes jobs 
                and economic growth;
                  (C) maximizes overall returns to the 
                taxpayers of the United States; and
                  (D) provides public accountability for the 
                exercise of such authority.

SEC. 3. DEFINITIONS.

  For purposes of this Act, the following definitions shall 
apply:
          (1) Appropriate committees of congress.--The term 
        ``appropriate committees of Congress'' means--
                  (A) the Committee on Banking, Housing, and 
                Urban Affairs, the Committee on Finance, the 
                Committee on the Budget, and the Committee on 
                Appropriations of the Senate; and
                  (B) the Committee on Financial Services, the 
                Committee on Ways and Means, the Committee on 
                the Budget, and the Committee on Appropriations 
                of the House of Representatives.
          (2) Board.--The term ``Board'' means the Board of 
        Governors of the Federal Reserve System.
          (3) Congressional support agencies.--The term 
        ``congressional support agencies'' means the 
        Congressional Budget Office and the Joint Committee on 
        Taxation.
          (4) Corporation.--The term ``Corporation'' means the 
        Federal Deposit Insurance Corporation.
          (5) Financial institution.--The term ``financial 
        institution'' means any institution, including, but not 
        limited to, any bank, savings association, credit 
        union, security broker or dealer, or insurance company, 
        established and regulated under the laws of the United 
        States or any State, territory, or possession of the 
        United States, the District of Columbia, Commonwealth 
        of Puerto Rico, Commonwealth of Northern Mariana 
        Islands, Guam, American Samoa, or the United States 
        Virgin Islands, and having significant operations in 
        the United States, but excluding any central bank of, 
        or institution owned by, a foreign government.
          (6) Fund.--The term ``Fund'' means the Troubled 
        Assets Insurance Financing Fund established under 
        section 102.
          (7) Secretary.--The term ``Secretary'' means the 
        Secretary of the Treasury.
          (8) TARP.--The term ``TARP'' means the Troubled Asset 
        Relief Program established under section 101.
          (9) Troubled assets.--The term ``troubled assets'' 
        means--
                  (A) residential or commercial mortgages and 
                any securities, obligations, or other 
                instruments that are based on or related to 
                such mortgages, that in each case was 
                originated or issued on or before March 14, 
                2008, the purchase of which the Secretary 
                determines promotes financial market stability; 
                and
                  (B) any other financial instrument that the 
                Secretary, after consultation with the Chairman 
                of the Board of Governors of the Federal 
                Reserve System, determines the purchase of 
                which is necessary to promote financial market 
                stability, but only upon transmittal of such 
                determination, in writing, to the appropriate 
                committees of Congress.

                TITLE I--TROUBLED ASSETS RELIEF PROGRAM

SEC. 101. PURCHASES OF TROUBLED ASSETS.

  (a) Offices; Authority.--
          (1) Authority.--The Secretary is authorized to 
        establish the Troubled Asset Relief Program (or 
        ``TARP'') to purchase, and to make and fund commitments 
        to purchase, troubled assets from any financial 
        institution, on such terms and conditions as are 
        determined by the Secretary, and in accordance with 
        this Act and the policies and procedures developed and 
        published by the Secretary.
          (2) Commencement of program.--Establishment of the 
        policies and procedures and other similar 
        administrative requirements imposed on the Secretary by 
        this Act are not intended to delay the commencement of 
        the TARP.
          (3) Establishment of treasury office.--
                  (A) In general.--The Secretary shall 
                implement any program under paragraph (1) 
                through an Office of Financial Stability, 
                established for such purpose within the Office 
                of Domestic Finance of the Department of the 
                Treasury, which office shall be headed by an 
                Assistant Secretary of the Treasury, appointed 
                by the President, by and with the advice and 
                consent of the Senate, except that an interim 
                Assistant Secretary may be appointed by the 
                Secretary.
                  (B) Clerical amendments.--
                          (i) Title 5.--Section 5315 of title 
                        5, United States Code, is amended in 
                        the item relating to Assistant 
                        Secretaries of the Treasury, by 
                        striking ``(9)'' and inserting 
                        ``(10)''.
                          (ii) Title 31.--Section 301(e) of 
                        title 31, United States Code, is 
                        amended by striking ``9'' and inserting 
                        ``10''.
  (b) Consultation.--In exercising the authority under this 
section, the Secretary shall consult with the Board, the 
Corporation, the Comptroller of the Currency, the Director of 
the Office of Thrift Supervision, and the Secretary of Housing 
and Urban Development.
  (c) Necessary Actions.--The Secretary is authorized to take 
such actions as the Secretary deems necessary to carry out the 
authorities in this Act, including, without limitation, the 
following:
          (1) The Secretary shall have direct hiring authority 
        with respect to the appointment of employees to 
        administer this Act.
          (2) Entering into contracts, including contracts for 
        services authorized by section 3109 of title 5, United 
        States Code.
          (3) Designating financial institutions as financial 
        agents of the Federal Government, and such institutions 
        shall perform all such reasonable duties related to 
        this Act as financial agents of the Federal Government 
        as may be required.
          (4) In order to provide the Secretary with the 
        flexibility to manage troubled assets in a manner 
        designed to minimize cost to the taxpayers, 
        establishing vehicles that are authorized, subject to 
        supervision by the Secretary, to purchase, hold, and 
        sell troubled assets and issue obligations.
          (5) Issuing such regulations and other guidance as 
        may be necessary or appropriate to define terms or 
        carry out the authorities or purposes of this Act.
  (d) Program Guidelines.--Before the earlier of the end of the 
2-business-day period beginning on the date of the first 
purchase of troubled assets pursuant to the authority under 
this section or the end of the 45-day period beginning on the 
date of enactment of this Act, the Secretary shall publish 
program guidelines, including the following:
          (1) Mechanisms for purchasing troubled assets.
          (2) Methods for pricing and valuing troubled assets.
          (3) Procedures for selecting asset managers.
          (4) Criteria for identifying troubled assets for 
        purchase.
  (e) Preventing Unjust Enrichment.--In making purchases under 
the authority of this Act, the Secretary shall take such steps 
as may be necessary to prevent unjust enrichment of financial 
institutions participating in a program established under this 
section, including by preventing the sale of a troubled asset 
to the Secretary at a higher price than what the seller paid to 
purchase the asset. This subsection does not apply to troubled 
assets acquired in a merger or acquisition, or a purchase of 
assets from a financial institution in conservatorship or 
receivership, or that has initiated bankruptcy proceedings 
under title 11, United States Code.

SEC. 102. INSURANCE OF TROUBLED ASSETS.

  (a) Authority.--
          (1) In general.--If the Secretary establishes the 
        program authorized under section 101, then the 
        Secretary shall establish a program to guarantee 
        troubled assets originated or issued prior to March 14, 
        2008, including mortgage-backed securities.
          (2) Guarantees.--In establishing any program under 
        this subsection, the Secretary may develop guarantees 
        of troubled assets and the associated premiums for such 
        guarantees. Such guarantees and premiums may be 
        determined by category or class of the troubled assets 
        to be guaranteed.
          (3) Extent of guarantee.--Upon request of a financial 
        institution, the Secretary may guarantee the timely 
        payment of principal of, and interest on, troubled 
        assets in amounts not to exceed 100 percent of such 
        payments. Such guarantee may be on such terms and 
        conditions as are determined by the Secretary, provided 
        that such terms and conditions are consistent with the 
        purposes of this Act.
  (b) Reports.--Not later than 90 days after the date of 
enactment of this Act, the Secretary shall report to the 
appropriate committees of Congress on the program established 
under subsection (a).
  (c) Premiums.--
          (1) In general.--The Secretary shall collect premiums 
        from any financial institution participating in the 
        program established under subsection (a). Such premiums 
        shall be in an amount that the Secretary determines 
        necessary to meet the purposes of this Act and to 
        provide sufficient reserves pursuant to paragraph (3).
          (2) Authority to base premiums on product risk.--In 
        establishing any premium under paragraph (1), the 
        Secretary may provide for variations in such rates 
        according to the credit risk associated with the 
        particular troubled asset that is being guaranteed. The 
        Secretary shall publish the methodology for setting the 
        premium for a class of troubled assets together with an 
        explanation of the appropriateness of the class of 
        assets for participation in the program established 
        under this section. The methodology shall ensure that 
        the premium is consistent with paragraph (3).
          (3) Minimum level.--The premiums referred to in 
        paragraph (1) shall be set by the Secretary at a level 
        necessary to create reserves sufficient to meet 
        anticipated claims, based on an actuarial analysis, and 
        to ensure that taxpayers are fully protected.
          (4) Adjustment to purchase authority.--The purchase 
        authority limit in section 115 shall be reduced by an 
        amount equal to the difference between the total of the 
        outstanding guaranteed obligations and the balance in 
        the Troubled Assets Insurance Financing Fund.
  (d) Troubled Assets Insurance Financing Fund.--
          (1) Deposits.--The Secretary shall deposit fees 
        collected under this section into the Fund established 
        under paragraph (2).
          (2) Establishment.--There is established a Troubled 
        Assets Insurance Financing Fund that shall consist of 
        the amounts collected pursuant to paragraph (1), and 
        any balance in such fund shall be invested by the 
        Secretary in United States Treasury securities, or kept 
        in cash on hand or on deposit, as necessary.
          (3) Payments from fund.--The Secretary shall make 
        payments from amounts deposited in the Fund to fulfill 
        obligations of the guarantees provided to financial 
        institutions under subsection (a).

SEC. 103. CONSIDERATIONS.

  In exercising the authorities granted in this Act, the 
Secretary shall take into consideration--
          (1) protecting the interests of taxpayers by 
        maximizing overall returns and minimizing the impact on 
        the national debt;
          (2) providing stability and preventing disruption to 
        financial markets in order to limit the impact on the 
        economy and protect American jobs, savings, and 
        retirement security;
          (3) the need to help families keep their homes and to 
        stabilize communities;
          (4) in determining whether to engage in a direct 
        purchase from an individual financial institution, the 
        long-term viability of the financial institution in 
        determining whether the purchase represents the most 
        efficient use of funds under this Act;
          (5) ensuring that all financial institutions are 
        eligible to participate in the program, without 
        discrimination based on size, geography, form of 
        organization, or the size, type, and number of assets 
        eligible for purchase under this Act;
          (6) providing financial assistance to financial 
        institutions, including those serving low- and 
        moderate-income populations and other underserved 
        communities, and that have assets less than 
        $1,000,000,000, that were well or adequately 
        capitalized as of June 30, 2008, and that as a result 
        of the devaluation of the preferred government-
        sponsored enterprises stock will drop one or more 
        capital levels, in a manner sufficient to restore the 
        financial institutions to at least an adequately 
        capitalized level;
          (7) the need to ensure stability for United States 
        public instrumentalities, such as counties and cities, 
        that may have suffered significant increased costs or 
        losses in the current market turmoil;
          (8) protecting the retirement security of Americans 
        by purchasing troubled assets held by or on behalf of 
        an eligible retirement plan described in clause (iii), 
        (iv), (v), or (vi) of section 402(c)(8)(B) of the 
        Internal Revenue Code of 1986, except that such 
        authority shall not extend to any compensation 
        arrangements subject to section 409A of such Code; and
          (9) the utility of purchasing other real estate owned 
        and instruments backed by mortgages on multifamily 
        properties.

SEC. 104. FINANCIAL STABILITY OVERSIGHT BOARD.

  (a) Establishment.--There is established the Financial 
Stability Oversight Board, which shall be responsible for--
          (1) reviewing the exercise of authority under a 
        program developed in accordance with this Act, 
        including--
                  (A) policies implemented by the Secretary and 
                the Office of Financial Stability created under 
                sections 101 and 102, including the appointment 
                of financial agents, the designation of asset 
                classes to be purchased, and plans for the 
                structure of vehicles used to purchase troubled 
                assets; and
                  (B) the effect of such actions in assisting 
                American families in preserving home ownership, 
                stabilizing financial markets, and protecting 
                taxpayers;
          (2) making recommendations, as appropriate, to the 
        Secretary regarding use of the authority under this 
        Act; and
          (3) reporting any suspected fraud, misrepresentation, 
        or malfeasance to the Special Inspector General for the 
        Troubled Assets Relief Program or the Attorney General 
        of the United States, consistent with section 535(b) of 
        title 28, United States Code.
  (b) Membership.--The Financial Stability Oversight Board 
shall be comprised of--
          (1) the Chairman of the Board of Governors of the 
        Federal Reserve System;
          (2) the Secretary;
          (3) the Director of the Federal Housing Finance 
        Agency;
          (4) the Chairman of the Securities Exchange 
        Commission; and
          (5) the Secretary of Housing and Urban Development.
  (c) Chairperson.--The chairperson of the Financial Stability 
Oversight Board shall be elected by the members of the Board 
from among the members other than the Secretary.
  (d) Meetings.--The Financial Stability Oversight Board shall 
meet 2 weeks after the first exercise of the purchase authority 
of the Secretary under this Act, and monthly thereafter.
  (e) Additional Authorities.--In addition to the 
responsibilities described in subsection (a), the Financial 
Stability Oversight Board shall have the authority to ensure 
that the policies implemented by the Secretary are--
          (1) in accordance with the purposes of this Act;
          (2) in the economic interests of the United States; 
        and
          (3) consistent with protecting taxpayers, in 
        accordance with section 113(a).
  (f) Credit Review Committee.--The Financial Stability 
Oversight Board may appoint a credit review committee for the 
purpose of evaluating the exercise of the purchase authority 
provided under this Act and the assets acquired through the 
exercise of such authority, as the Financial Stability 
Oversight Board determines appropriate.
  (g) Reports.--The Financial Stability Oversight Board shall 
report to the appropriate committees of Congress and the 
Congressional Oversight Panel established under section 125, 
not less frequently than quarterly, on the matters described 
under subsection (a)(1).
  (h) Termination.--The Financial Stability Oversight Board, 
and its authority under this section, shall terminate on the 
expiration of the 15-day period beginning upon the later of--
          (1) the date that the last troubled asset acquired by 
        the Secretary under section 101 has been sold or 
        transferred out of the ownership or control of the 
        Federal Government; or
          (2) the date of expiration of the last insurance 
        contract issued under section 102.

SEC. 105. REPORTS.

  (a) In General.--Before the expiration of the 60-day period 
beginning on the date of the first exercise of the authority 
granted in section 101(a), or of the first exercise of the 
authority granted in section 102, whichever occurs first, and 
every 30-day period thereafter, the Secretary shall report to 
the appropriate committees of Congress, with respect to each 
such period--
          (1) an overview of actions taken by the Secretary, 
        including the considerations required by section 103 
        and the efforts under section 109;
          (2) the actual obligation and expenditure of the 
        funds provided for administrative expenses by section 
        118 during such period and the expected expenditure of 
        such funds in the subsequent period; and
          (3) a detailed financial statement with respect to 
        the exercise of authority under this Act, including--
                  (A) all agreements made or renewed;
                  (B) all insurance contracts entered into 
                pursuant to section 102;
                  (C) all transactions occurring during such 
                period, including the types of parties 
                involved;
                  (D) the nature of the assets purchased;
                  (E) all projected costs and liabilities;
                  (F) operating expenses, including 
                compensation for financial agents;
                  (G) the valuation or pricing method used for 
                each transaction; and
                  (H) a description of the vehicles established 
                to exercise such authority.
  (b) Tranche Reports to Congress.--
          (1) Reports.--The Secretary shall provide to the 
        appropriate committees of Congress, at the times 
        specified in paragraph (2), a written report, 
        including--
                  (A) a description of all of the transactions 
                made during the reporting period;
                  (B) a description of the pricing mechanism 
                for the transactions;
                  (C) a justification of the price paid for and 
                other financial terms associated with the 
                transactions;
                  (D) a description of the impact of the 
                exercise of such authority on the financial 
                system, supported, to the extent possible, by 
                specific data;
                  (E) a description of challenges that remain 
                in the financial system, including any 
                benchmarks yet to be achieved; and
                  (F) an estimate of additional actions under 
                the authority provided under this Act that may 
                be necessary to address such challenges.
          (2) Timing.--The report required by this subsection 
        shall be submitted not later than 7 days after the date 
        on which commitments to purchase troubled assets under 
        the authorities provided in this Act first reach an 
        aggregate of $50,000,000,000 and not later than 7 days 
        after each $50,000,000,000 interval of such commitments 
        is reached thereafter.
  (c) Regulatory Modernization Report.--The Secretary shall 
review the current state of the financial markets and the 
regulatory system and submit a written report to the 
appropriate committees of Congress not later than April 30, 
2009, analyzing the current state of the regulatory system and 
its effectiveness at overseeing the participants in the 
financial markets, including the over-the-counter swaps market 
and government-sponsored enterprises, and providing 
recommendations for improvement, including--
          (1) recommendations regarding--
                  (A) whether any participants in the financial 
                markets that are currently outside the 
                regulatory system should become subject to the 
                regulatory system; and
                  (B) enhancement of the clearing and 
                settlement of over-the-counter swaps; and
          (2) the rationale underlying such recommendations.
  (d) Sharing of Information.--Any report required under this 
section shall also be submitted to the Congressional Oversight 
Panel established under section 125.
  (e) Sunset.--The reporting requirements under this section 
shall terminate on the later of--
          (1) the date that the last troubled asset acquired by 
        the Secretary under section 101 has been sold or 
        transferred out of the ownership or control of the 
        Federal Government; or
          (2) the date of expiration of the last insurance 
        contract issued under section 102.

SEC. 106. RIGHTS; MANAGEMENT; SALE OF TROUBLED ASSETS; REVENUES AND 
                    SALE PROCEEDS.

  (a) Exercise of Rights.--The Secretary may, at any time, 
exercise any rights received in connection with troubled assets 
purchased under this Act.
  (b) Management of Troubled Assets.--The Secretary shall have 
authority to manage troubled assets purchased under this Act, 
including revenues and portfolio risks therefrom.
  (c) Sale of Troubled Assets.--The Secretary may, at any time, 
upon terms and conditions and at a price determined by the 
Secretary, sell, or enter into securities loans, repurchase 
transactions, or other financial transactions in regard to, any 
troubled asset purchased under this Act.
  (d) Transfer to Treasury.--Revenues of, and proceeds from the 
sale of troubled assets purchased under this Act, or from the 
sale, exercise, or surrender of warrants or senior debt 
instruments acquired under section 113 shall be paid into the 
general fund of the Treasury for reduction of the public debt.
  (e) Application of Sunset to Troubled Assets.--The authority 
of the Secretary to hold any troubled asset purchased under 
this Act before the termination date in section 120, or to 
purchase or fund the purchase of a troubled asset under a 
commitment entered into before the termination date in section 
120, is not subject to the provisions of section 120.

SEC. 107. CONTRACTING PROCEDURES.

  (a) Streamlined Process.--For purposes of this Act, the 
Secretary may waive specific provisions of the Federal 
Acquisition Regulation upon a determination that urgent and 
compelling circumstances make compliance with such provisions 
contrary to the public interest. Any such determination, and 
the justification for such determination, shall be submitted to 
the Committees on Oversight and Government Reform and Financial 
Services of the House of Representatives and the Committees on 
Homeland Security and Governmental Affairs and Banking, 
Housing, and Urban Affairs of the Senate within 7 days.
  (b) Additional Contracting Requirements.--In any solicitation 
or contract where the Secretary has, pursuant to subsection 
(a), waived any provision of the Federal Acquisition Regulation 
pertaining to minority contracting, the Secretary shall develop 
and implement standards and procedures to ensure, to the 
maximum extent practicable, 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)), in that solicitation or contract, including 
contracts to asset managers, servicers, property managers, and 
other service providers or expert consultants.
  (c) Eligibility of FDIC.--Notwithstanding subsections (a) and 
(b), the Corporation--
          (1) shall be eligible for, and shall be considered 
        in, the selection of asset managers for residential 
        mortgage loans and residential mortgage-backed 
        securities; and
          (2) shall be reimbursed by the Secretary for any 
        services provided.

SEC. 108. CONFLICTS OF INTEREST.

  (a) Standards Required.--The Secretary shall issue 
regulations or guidelines necessary to address and manage or to 
prohibit conflicts of interest that may arise in connection 
with the administration and execution of the authorities 
provided under this Act, including--
          (1) conflicts arising in the selection or hiring of 
        contractors or advisors, including asset managers;
          (2) the purchase of troubled assets;
          (3) the management of the troubled assets held;
          (4) post-employment restrictions on employees; and
          (5) any other potential conflict of interest, as the 
        Secretary deems necessary or appropriate in the public 
        interest.
  (b) Timing.--Regulations or guidelines required by this 
section shall be issued as soon as practicable after the date 
of enactment of this Act.

SEC. 109. FORECLOSURE MITIGATION EFFORTS.

  (a) Residential Mortgage Loan 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 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 credit enhancements to facilitate loan 
modifications to prevent avoidable foreclosures.
  (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, 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 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.

SEC. 110. ASSISTANCE TO HOMEOWNERS.

  (a) Definitions.--As used in this section--
          (1) the term ``Federal property manager'' means--
                  (A) the Federal Housing Finance Agency, in 
                its capacity as conservator of the Federal 
                National Mortgage Association and the Federal 
                Home Loan Mortgage Corporation;
                  (B) the Corporation, with respect to 
                residential mortgage loans and mortgage-backed 
                securities held by any bridge depository 
                institution pursuant to section 11(n) of the 
                Federal Deposit Insurance Act; and
                  (C) 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, other than 
                mortgages or securities held, owned, or 
                controlled in connection with open market 
                operations under section 14 of the Federal 
                Reserve Act (12 U.S.C. 353), or as collateral 
                for an advance or discount that is not in 
                default;
          (2) the term ``consumer'' has the same meaning as in 
        section 103 of the Truth in Lending Act (15 U.S.C. 
        1602);
          (3) the term ``insured depository institution'' has 
        the same meaning as in section 3 of the Federal Deposit 
        Insurance Act (12 U.S.C. 1813); and
          (4) the term ``servicer'' has the same meaning as in 
        section 6(i)(2) of the Real Estate Settlement 
        Procedures Act of 1974 (12 U.S.C. 2605(i)(2)).
  (b) Homeowner Assistance by Agencies.--
          (1) In general.--To the extent that the Federal 
        property manager holds, owns, or controls mortgages, 
        mortgage backed securities, and other assets secured by 
        residential real estate, including multifamily housing, 
        the Federal property manager shall implement a plan 
        that seeks to maximize assistance for homeowners and 
        use its authority to encourage the servicers of the 
        underlying mortgages, and 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.
          (2) Modifications.--In the case of a residential 
        mortgage loan, modifications made under paragraph (1) 
        may include--
                  (A) reduction in interest rates;
                  (B) reduction of loan principal; and
                  (C) other similar modifications.
          (3) Tenant protections.--In the case of mortgages on 
        residential rental properties, modifications made under 
        paragraph (1) shall ensure--
                  (A) the continuation of any existing Federal, 
                State, and local rental subsidies and 
                protections; and
                  (B) that modifications take into account the 
                need for operating funds to maintain decent and 
                safe conditions at the property.
          (4) Timing.--Each Federal property manager shall 
        develop and begin implementation of the plan required 
        by this subsection not later than 60 days after the 
        date of enactment of this Act.
          (5) Reports to congress.--Each Federal property 
        manager shall, 60 days after the date of enactment of 
        this Act and every 30 days thereafter, report to 
        Congress specific information on the number and types 
        of loan modifications made and the number of actual 
        foreclosures occurring during the reporting period in 
        accordance with this section.
          (6) Consultation.--In developing the plan required by 
        this subsection, the Federal property managers shall 
        consult with one another and, to the extent possible, 
        utilize consistent approaches to implement the 
        requirements of this subsection.
  (c) Actions With Respect to Servicers.--In any case in which 
a Federal property manager is not the owner of a residential 
mortgage loan, but holds an interest in obligations or pools of 
obligations secured by residential mortgage loans, the Federal 
property manager shall--
          (1) encourage implementation by the loan servicers of 
        loan modifications developed under subsection (b); and
          (2) assist in facilitating any such modifications, to 
        the extent possible.
  (d) Limitation.--The requirements of this section shall not 
supersede any other duty or requirement imposed on the Federal 
property managers under otherwise applicable law.

SEC. 111. EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE.

  (a) Applicability.--Any financial institution that sells 
troubled assets to the Secretary under this Act shall be 
subject to the executive compensation requirements of 
subsections (b) and (c) and the provisions under the Internal 
Revenue Code of 1986, as provided under the amendment by 
section 302, as applicable.
  (b) Direct Purchases.--
          (1) In general.--Where the Secretary determines that 
        the purposes of this Act are best met through direct 
        purchases of troubled assets from an individual 
        financial institution where no bidding process or 
        market prices are available, and the Secretary receives 
        a meaningful equity or debt position in the financial 
        institution as a result of the transaction, the 
        Secretary shall require that the financial institution 
        meet appropriate standards for executive compensation 
        and corporate governance. The standards required under 
        this subsection shall be effective for the duration of 
        the period that the Secretary holds an equity or debt 
        position in the financial institution.
          (2) Criteria.--The standards required under this 
        subsection shall include--
                  (A) limits on compensation that exclude 
                incentives for senior executive officers of a 
                financial institution to take unnecessary and 
                excessive risks that threaten the value of the 
                financial institution during the period that 
                the Secretary holds an equity or debt position 
                in the financial institution;
                  (B) a provision for the recovery by the 
                financial 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 proven to be 
                materially inaccurate; and
                  (C) a prohibition on the financial 
                institution making any golden parachute payment 
                to its senior executive officer during the 
                period that the Secretary holds an equity or 
                debt position in the financial institution.
          (3) Definition.--For purposes of this section, the 
        term ``senior executive officer'' means an individual 
        who is one of the top 5 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.
  (c) Auction Purchases.--Where the Secretary determines that 
the purposes of this Act are best met through auction purchases 
of troubled assets, and only where such purchases per financial 
institution in the aggregate exceed $300,000,000 (including 
direct purchases), the Secretary shall prohibit, for such 
financial institution, any new employment contract with a 
senior executive officer that provides a golden parachute in 
the event of an involuntary termination, bankruptcy filing, 
insolvency, or receivership. The Secretary shall issue guidance 
to carry out this paragraph not later than 2 months after the 
date of enactment of this Act, and such guidance shall be 
effective upon issuance.
  (d) Sunset.--The provisions of subsection (c) shall apply 
only to arrangements entered into during the period during 
which the authorities under section 101(a) are in effect, as 
determined under section 120.

SEC. 112. COORDINATION WITH FOREIGN AUTHORITIES AND CENTRAL BANKS.

  The Secretary shall coordinate, as appropriate, with foreign 
financial authorities and central banks to work toward the 
establishment of similar programs by such authorities and 
central banks. To the extent that such foreign financial 
authorities or banks hold troubled assets as a result of 
extending financing to financial institutions that have failed 
or defaulted on such financing, such troubled assets qualify 
for purchase under section 101.

SEC. 113. MINIMIZATION OF LONG-TERM COSTS AND MAXIMIZATION OF BENEFITS 
                    FOR TAXPAYERS.

  (a) Long-Term Costs and Benefits.--
          (1) Minimizing negative impact.--The Secretary shall 
        use the authority under this Act in a manner that will 
        minimize any potential long-term negative impact on the 
        taxpayer, taking into account the direct outlays, 
        potential long-term returns on assets purchased, and 
        the overall economic benefits of the program, including 
        economic benefits due to improvements in economic 
        activity and the availability of credit, the impact on 
        the savings and pensions of individuals, and reductions 
        in losses to the Federal Government.
          (2) Authority.--In carrying out paragraph (1), the 
        Secretary shall--
                  (A) hold the assets to maturity or for resale 
                for and until such time as the Secretary 
                determines that the market is optimal for 
                selling such assets, in order to maximize the 
                value for taxpayers; and
                  (B) sell such assets at a price that the 
                Secretary determines, based on available 
                financial analysis, will maximize return on 
                investment for the Federal Government.
          (3) Private sector participation.--The Secretary 
        shall encourage the private sector to participate in 
        purchases of troubled assets, and to invest in 
        financial institutions, consistent with the provisions 
        of this section.
  (b) Use of Market Mechanisms.--In making purchases under this 
Act, the Secretary shall--
          (1) make such purchases at the lowest price that the 
        Secretary determines to be consistent with the purposes 
        of this Act; and
          (2) maximize the efficiency of the use of taxpayer 
        resources by using market mechanisms, including 
        auctions or reverse auctions, where appropriate.
  (c) Direct Purchases.--If the Secretary determines that use 
of a market mechanism under subsection (b) is not feasible or 
appropriate, and the purposes of the Act are best met through 
direct purchases from an individual financial institution, the 
Secretary shall pursue additional measures to ensure that 
prices paid for assets are reasonable and reflect the 
underlying value of the asset.
  (d) Conditions on Purchase Authority for Warrants and Debt 
Instruments.--
          (1) In general.--The Secretary may not purchase, or 
        make any commitment to purchase, any troubled asset 
        under the authority of this Act, unless the Secretary 
        receives from the financial institution from which such 
        assets are to be purchased--
                  (A) in the case of a financial 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 
                financial institution, or voting stock with 
                respect to which, the Secretary agrees not to 
                exercise voting power, as the Secretary 
                determines appropriate; or
                  (B) in the case of any financial institution 
                other than one described in subparagraph (A), a 
                warrant for common or preferred stock, or a 
                senior debt instrument from such financial 
                institution, as described in paragraph (2)(C).
          (2) Terms and conditions.--The terms and conditions 
        of any warrant or senior debt instrument required under 
        paragraph (1) shall meet the following requirements:
                  (A) Purposes.--Such terms and conditions 
                shall, at a minimum, be designed--
                          (i) to provide for reasonable 
                        participation by the Secretary, for the 
                        benefit of taxpayers, in equity 
                        appreciation in the case of a warrant 
                        or other equity security, or a 
                        reasonable interest rate premium, in 
                        the case of a debt instrument; and
                          (ii) to provide additional protection 
                        for the taxpayer against losses from 
                        sale of assets by the Secretary under 
                        this Act and the administrative 
                        expenses of the TARP.
                  (B) Authority to sell, exercise, or 
                surrender.--The Secretary may sell, exercise, 
                or surrender a warrant or any senior debt 
                instrument received under this subsection, 
                based on the conditions established under 
                subparagraph (A).
                  (C) Conversion.--The warrant shall provide 
                that if, after the warrant is received by the 
                Secretary under this subsection, the financial 
                institution that issued the warrant is no 
                longer listed or traded on a national 
                securities exchange or securities association, 
                as described in paragraph (1)(A), such warrants 
                shall convert to senior debt, or contain 
                appropriate protections for the Secretary to 
                ensure that the Treasury is appropriately 
                compensated for the value of the warrant, in an 
                amount determined by the Secretary.
                  (D) Protections.--Any warrant representing 
                securities to be received by the Secretary 
                under this subsection shall contain anti-
                dilution provisions of the type employed in 
                capital market transactions, as determined by 
                the Secretary. Such provisions shall protect 
                the value of the securities from market 
                transactions such as stock splits, stock 
                distributions, dividends, and other 
                distributions, mergers, and other forms of 
                reorganization or recapitalization.
                  (E) Exercise price.--The exercise price for 
                any warrant issued pursuant to this subsection 
                shall be set by the Secretary, in the interest 
                of the taxpayers.
                  (F) Sufficiency.--The financial institution 
                shall guarantee to the Secretary that it has 
                authorized shares of nonvoting stock available 
                to fulfill its obligations under this 
                subsection. Should the financial institution 
                not have sufficient authorized shares, 
                including preferred shares that may carry 
                dividend rights equal to a multiple number of 
                common shares, the Secretary may, to the extent 
                necessary, accept a senior debt note in an 
                amount, and on such terms as will compensate 
                the Secretary with equivalent value, in the 
                event that a sufficient shareholder vote to 
                authorize the necessary additional shares 
                cannot be obtained.
          (3) Exceptions.--
                  (A) De minimis.--The Secretary shall 
                establish de minimis exceptions to the 
                requirements of this subsection, based on the 
                size of the cumulative transactions of troubled 
                assets purchased from any one financial 
                institution for the duration of the program, at 
                not more than $100,000,000.
                  (B) Other exceptions.--The Secretary shall 
                establish an exception to the requirements of 
                this subsection and appropriate alternative 
                requirements for any participating financial 
                institution that is legally prohibited from 
                issuing securities and debt instruments, so as 
                not to allow circumvention of the requirements 
                of this section.

SEC. 114. MARKET TRANSPARENCY.

  (a) Pricing.--To facilitate market transparency, the 
Secretary shall make available to the public, in electronic 
form, a description, amounts, and pricing of assets acquired 
under this Act, within 2 business days of purchase, trade, or 
other disposition.
  (b) Disclosure.--For each type of financial institutions that 
sells troubled assets to the Secretary under this Act, the 
Secretary shall determine whether the public disclosure 
required for such financial institutions with respect to off-
balance sheet transactions, derivatives instruments, contingent 
liabilities, and similar sources of potential exposure is 
adequate to provide to the public sufficient information as to 
the true financial position of the institutions. If such 
disclosure is not adequate for that purpose, the Secretary 
shall make recommendations for additional disclosure 
requirements to the relevant regulators.

SEC. 115. GRADUATED AUTHORIZATION TO PURCHASE.

  (a) Authority.--The authority of the Secretary to purchase 
troubled assets under this Act shall be limited as follows:
          (1) Effective upon the date of enactment of this Act, 
        such authority shall be limited to $250,000,000,000 
        outstanding at any one time.
          (2) If at any time, the President submits to the 
        Congress a written certification that the Secretary 
        needs to exercise the authority under this paragraph, 
        effective upon such submission, such authority shall be 
        limited to $350,000,000,000 outstanding at any one 
        time.
          (3) If, at any time after the certification in 
        paragraph (2) has been made, the President transmits to 
        the Congress a written report detailing the plan of the 
        Secretary to exercise the authority under this 
        paragraph, unless there is enacted, within 15 calendar 
        days of such transmission, a joint resolution described 
        in subsection (c), effective upon the expiration of 
        such 15-day period, such authority shall be limited to 
        $700,000,000,000 outstanding at any one time.
  (b) Aggregation of Purchase Prices.--The amount of troubled 
assets purchased by the Secretary outstanding at any one time 
shall be determined for purposes of the dollar amount 
limitations under subsection (a) by aggregating the purchase 
prices of all troubled assets held.
  (c) Joint Resolution of Disapproval.--
          (1) In general.--Notwithstanding any other provision 
        of this section, the Secretary may not exercise any 
        authority to make purchases under this Act with regard 
        to any amount in excess of $350,000,000,000 previously 
        obligated, as described in this section if, within 15 
        calendar days after the date on which Congress receives 
        a report of the plan of the Secretary described in 
        subsection (a)(3), there is enacted into law a joint 
        resolution disapproving the plan of the Secretary with 
        respect to such additional amount.
          (2) Contents of joint resolution.--For the purpose of 
        this section, the term ``joint resolution'' means only 
        a joint resolution--
                  (A) that is introduced not later than 3 
                calendar days after the date on which the 
                report of the plan of the Secretary referred to 
                in subsection (a)(3) is received by Congress;
                  (B) which does not have a preamble;
                  (C) the title of which is as follows: ``Joint 
                resolution relating to the disapproval of 
                obligations under the Emergency Economic 
                Stabilization Act of 2008''; and
                  (D) the matter after the resolving clause of 
                which is as follows: ``That Congress 
                disapproves the obligation of any amount 
                exceeding the amounts obligated as described in 
                paragraphs (1) and (2) of section 115(a) of the 
                Emergency Economic Stabilization Act of 
                2008.''.
  (d) Fast Track Consideration in House of Representatives.--
          (1) Reconvening.--Upon receipt of a report under 
        subsection (a)(3), the Speaker, if the House would 
        otherwise be adjourned, shall notify the Members of the 
        House that, pursuant to this section, the House shall 
        convene not later than the second calendar day after 
        receipt of such report;
          (2) Reporting and discharge.--Any committee of the 
        House of Representatives to which a joint resolution is 
        referred shall report it to the House not later than 5 
        calendar days after the date of receipt of the report 
        described in subsection (a)(3). If a committee fails to 
        report the joint resolution within that period, the 
        committee shall be discharged from further 
        consideration of the joint resolution and the joint 
        resolution shall be referred to the appropriate 
        calendar.
          (3) Proceeding to consideration.--After each 
        committee authorized to consider a joint resolution 
        reports it to the House or has been discharged from its 
        consideration, it shall be in order, not later than the 
        sixth day after Congress receives the report described 
        in subsection (a)(3), to move to proceed to consider 
        the joint resolution in the House. All points of order 
        against the motion are waived. Such a motion shall not 
        be in order after the House has disposed of a motion to 
        proceed on the joint resolution. The previous question 
        shall be considered as ordered on the motion to its 
        adoption without intervening motion. The motion shall 
        not be debatable. A motion to reconsider the vote by 
        which the motion is disposed of shall not be in order.
          (4) Consideration.--The joint resolution shall be 
        considered as read. All points of order against the 
        joint resolution and against its consideration are 
        waived. The previous question shall be considered as 
        ordered on the joint resolution to its passage without 
        intervening motion except two hours of debate equally 
        divided and controlled by the proponent and an 
        opponent. A motion to reconsider the vote on passage of 
        the joint resolution shall not be in order.
  (e) Fast Track Consideration in Senate.--
          (1) Reconvening.--Upon receipt of a report under 
        subsection (a)(3), if the Senate has adjourned or 
        recessed for more than 2 days, the majority leader of 
        the Senate, after consultation with the minority leader 
        of the Senate, shall notify the Members of the Senate 
        that, pursuant to this section, the Senate shall 
        convene not later than the second calendar day after 
        receipt of such message.
          (2) Placement on calendar.--Upon introduction in the 
        Senate, the joint resolution shall be placed 
        immediately on the calendar.
          (3) Floor consideration.--
                  (A) In general.--Notwithstanding Rule XXII of 
                the Standing Rules of the Senate, it is in 
                order at any time during the period beginning 
                on the 4th day after the date on which Congress 
                receives a report of the plan of the Secretary 
                described in subsection (a)(3) and ending on 
                the 6th day after the date on which Congress 
                receives a report of the plan of the Secretary 
                described in subsection (a)(3) (even though a 
                previous motion to the same effect has been 
                disagreed to) to move to proceed to the 
                consideration of the joint resolution, and all 
                points of order against the joint resolution 
                (and against consideration of the joint 
                resolution) are waived. The motion to proceed 
                is not debatable. The motion is not subject to 
                a motion to postpone. A motion to reconsider 
                the vote by which the motion is agreed to or 
                disagreed to shall not be in order. If a motion 
                to proceed to the consideration of the 
                resolution is agreed to, the joint resolution 
                shall remain the unfinished business until 
                disposed of.
                  (B) Debate.--Debate on the joint resolution, 
                and on all debatable motions and appeals in 
                connection therewith, shall be limited to not 
                more than 10 hours, which shall be divided 
                equally between the majority and minority 
                leaders or their designees. A motion further to 
                limit debate is in order and not debatable. An 
                amendment to, or a motion to postpone, or a 
                motion to proceed to the consideration of other 
                business, or a motion to recommit the joint 
                resolution is not in order.
                  (C) Vote on passage.--The vote on passage 
                shall occur immediately following the 
                conclusion of the debate on a joint resolution, 
                and a single quorum call at the conclusion of 
                the debate if requested in accordance with the 
                rules of the Senate.
                  (D) Rulings of the chair on procedure.--
                Appeals from the decisions of the Chair 
                relating to the application of the rules of the 
                Senate, as the case may be, to the procedure 
                relating to a joint resolution shall be decided 
                without debate.
  (f) Rules Relating to Senate and House of Representatives.--
          (1) Coordination with action by other house.--If, 
        before the passage by one House of a joint resolution 
        of that House, that House receives from the other House 
        a joint resolution, then the following procedures shall 
        apply:
                  (A) The joint resolution of the other House 
                shall not be referred to a committee.
                  (B) With respect to a joint resolution of the 
                House receiving the resolution--
                          (i) the procedure in that House shall 
                        be the same as if no joint resolution 
                        had been received from the other House; 
                        but
                          (ii) the vote on passage shall be on 
                        the joint resolution of the other 
                        House.
          (2) Treatment of joint resolution of other house.--If 
        one House fails to introduce or consider a joint 
        resolution under this section, the joint resolution of 
        the other House shall be entitled to expedited floor 
        procedures under this section.
          (3) Treatment of companion measures.--If, following 
        passage of the joint resolution in the Senate, the 
        Senate then receives the companion measure from the 
        House of Representatives, the companion measure shall 
        not be debatable.
          (4) Consideration after passage.--
                  (A) In general.--If Congress passes a joint 
                resolution, the period beginning on the date 
                the President is presented with the joint 
                resolution and ending on the date the President 
                takes action with respect to the joint 
                resolution shall be disregarded in computing 
                the 15-calendar day period described in 
                subsection (a)(3).
                  (B) Vetoes.--If the President vetoes the 
                joint resolution--
                          (i) the period beginning on the date 
                        the President vetoes the joint 
                        resolution and ending on the date the 
                        Congress receives the veto message with 
                        respect to the joint resolution shall 
                        be disregarded in computing the 15-
                        calendar day period described in 
                        subsection (a)(3), and
                          (ii) debate on a veto message in the 
                        Senate under this section shall be 1 
                        hour equally divided between the 
                        majority and minority leaders or their 
                        designees.
          (5) Rules of house of representatives and senate.--
        This subsection and subsections (c), (d), and (e) are 
        enacted by Congress--
                  (A) as an exercise of the rulemaking power of 
                the Senate and House of Representatives, 
                respectively, and as such it is deemed a part 
                of the rules of each House, respectively, but 
                applicable only with respect to the procedure 
                to be followed in that House in the case of a 
                joint resolution, and it supersedes other rules 
                only to the extent that it is inconsistent with 
                such rules; and
                  (B) with full recognition of the 
                constitutional right of either House to change 
                the rules (so far as relating to the procedure 
                of that House) at any time, in the same manner, 
                and to the same extent as in the case of any 
                other rule of that House.

SEC. 116. OVERSIGHT AND AUDITS.

  (a) Comptroller General Oversight.--
          (1) Scope of oversight.--The Comptroller General of 
        the United States shall, upon establishment of the 
        troubled assets relief program under this Act (in this 
        section referred to as the ``TARP''), commence ongoing 
        oversight of the activities and performance of the TARP 
        and of any agents and representatives of the TARP (as 
        related to the agent or representative's activities on 
        behalf of or under the authority of the TARP), 
        including vehicles established by the Secretary under 
        this Act. The subjects of such oversight shall include 
        the following:
                  (A) The performance of the TARP in meeting 
                the purposes of this Act, particularly those 
                involving--
                          (i) foreclosure mitigation;
                          (ii) cost reduction;
                          (iii) whether it has provided 
                        stability or prevented disruption to 
                        the financial markets or the banking 
                        system; and
                          (iv) whether it has protected 
                        taxpayers.
                  (B) The financial condition and internal 
                controls of the TARP, its representatives and 
                agents.
                  (C) Characteristics of transactions and 
                commitments entered into, including transaction 
                type, frequency, size, prices paid, and all 
                other relevant terms and conditions, and the 
                timing, duration and terms of any future 
                commitments to purchase assets.
                  (D) Characteristics and disposition of 
                acquired assets, including type, acquisition 
                price, current market value, sale prices and 
                terms, and use of proceeds from sales.
                  (E) Efficiency of the operations of the TARP 
                in the use of appropriated funds.
                  (F) Compliance with all applicable laws and 
                regulations by the TARP, its agents and 
                representatives.
                  (G) The efforts of the TARP to prevent, 
                identify, and minimize conflicts of interest 
                involving any agent or representative 
                performing activities on behalf of or under the 
                authority of the TARP.
                  (H) The efficacy of contracting procedures 
                pursuant to section 107(b), including, as 
                applicable, the efforts of the TARP in 
                evaluating proposals for inclusion and 
                contracting to the maximum extent possible of 
                minorities (as such term is defined in 1204(c) 
                of the Financial Institutions Reform, Recovery, 
                and Enhancement Act of 1989 (12 U.S.C. 1811 
                note), women, and minority- and women-owned 
                businesses, including ascertaining and 
                reporting the total amount of fees paid and 
                other value delivered by the TARP to all of its 
                agents and representatives, and such amounts 
                paid or delivered to such firms that are 
                minority- and women-owned businesses (as such 
                terms are defined in section 21A of the Federal 
                Home Loan Bank Act (12 U.S.C. 1441a)).
          (2) Conduct and administration of oversight.--
                  (A) GAO presence.--The Secretary shall 
                provide the Comptroller General with 
                appropriate space and facilities in the 
                Department of the Treasury as necessary to 
                facilitate oversight of the TARP until the 
                termination date established in section 120.
                  (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 TARP, or 
                any vehicles established by the Secretary under 
                this Act, and to the officers, directors, 
                employees, independent public accountants, 
                financial advisors, and other agents and 
                representatives of the TARP (as related to the 
                agent or representative's activities on behalf 
                of or under the authority of the TARP) or any 
                such vehicle 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.
                  (C) Reimbursement of costs.--The Treasury 
                shall reimburse the Government Accountability 
                Office for the full cost of any such oversight 
                activities as billed therefor by the 
                Comptroller General of the United States. Such 
                reimbursements shall be credited to the 
                appropriation account ``Salaries and Expenses, 
                Government Accountability Office'' current when 
                the payment is received and remain available 
                until expended.
          (3) Reporting.--The Comptroller General shall submit 
        reports of findings under this section, regularly and 
        no less frequently than once every 60 days, to the 
        appropriate committees of Congress, and the Special 
        Inspector General for the Troubled Asset Relief Program 
        established under this Act on the activities and 
        performance of the TARP. The Comptroller may also 
        submit special reports under this subsection as 
        warranted by the findings of its oversight activities.
  (b) Comptroller General Audits.--
          (1) Annual audit.--The TARP shall annually prepare 
        and issue to the appropriate committees of Congress and 
        the public audited financial statements prepared in 
        accordance with generally accepted accounting 
        principles, and the Comptroller General shall annually 
        audit such statements in accordance with generally 
        accepted auditing standards. The Treasury shall 
        reimburse the Government Accountability Office for the 
        full cost of any such audit as billed therefor by the 
        Comptroller General. Such reimbursements shall be 
        credited to the appropriation account ``Salaries and 
        Expenses, Government Accountability Office'' current 
        when the payment is received and remain available until 
        expended. The financial statements prepared under this 
        paragraph shall be on the fiscal year basis prescribed 
        under section 1102 of title 31, United States Code.
          (2) Authority.--The Comptroller General may audit the 
        programs, activities, receipts, expenditures, and 
        financial transactions of the TARP and any agents and 
        representatives of the TARP (as related to the agent or 
        representative's activities on behalf of or under the 
        authority of the TARP), including vehicles established 
        by the Secretary under this Act.
          (3) Corrective responses to audit problems.--The TARP 
        shall--
                  (A) take action to address deficiencies 
                identified by the Comptroller General or other 
                auditor engaged by the TARP; or
                  (B) certify to appropriate committees of 
                Congress that no action is necessary or 
                appropriate.
  (c) Internal Control.--
          (1) Establishment.--The TARP shall establish and 
        maintain an effective system of internal control, 
        consistent with the standards prescribed under section 
        3512(c) of title 31, United States Code, that provides 
        reasonable assurance of--
                  (A) the effectiveness and efficiency of 
                operations, including the use of the resources 
                of the TARP;
                  (B) the reliability of financial reporting, 
                including financial statements and other 
                reports for internal and external use; and
                  (C) compliance with applicable laws and 
                regulations.
          (2) Reporting.--In conjunction with each annual 
        financial statement issued under this section, the TARP 
        shall--
                  (A) state the responsibility of management 
                for establishing and maintaining adequate 
                internal control over financial reporting; and
                  (B) state its assessment, as of the end of 
                the most recent year covered by such financial 
                statement of the TARP, of the effectiveness of 
                the internal control over financial reporting.
  (d) Sharing of Information.--Any report or audit required 
under this section shall also be submitted to the Congressional 
Oversight Panel established under section 125.
  (e) Termination.--Any oversight, reporting, or audit 
requirement under this section shall terminate on the later 
of--
          (1) the date that the last troubled asset acquired by 
        the Secretary under section 101 has been sold or 
        transferred out of the ownership or control of the 
        Federal Government; or
          (2) the date of expiration of the last insurance 
        contract issued under section 102.

SEC. 117. STUDY AND REPORT ON MARGIN AUTHORITY.

  (a) Study.--The Comptroller General shall undertake a study 
to determine the extent to which leverage and sudden 
deleveraging of financial institutions was a factor behind the 
current financial crisis.
  (b) Content.--The study required by this section shall 
include--
          (1) an analysis of the roles and responsibilities of 
        the Board, the Securities and Exchange Commission, the 
        Secretary, and other Federal banking agencies with 
        respect to monitoring leverage and acting to curtail 
        excessive leveraging;
          (2) an analysis of the authority of the Board to 
        regulate leverage, including by setting margin 
        requirements, and what process the Board used to decide 
        whether or not to use its authority;
          (3) an analysis of any usage of the margin authority 
        by the Board; and
          (4) recommendations for the Board and appropriate 
        committees of Congress with respect to the existing 
        authority of the Board.
  (c) Report.--Not later than June 1, 2009, the Comptroller 
General shall complete and submit a report on the study 
required by this section to the Committee on Banking, Housing, 
and Urban Affairs of the Senate and the Committee on Financial 
Services of the House of Representatives.
  (d) Sharing of Information.--Any reports required under this 
section shall also be submitted to the Congressional Oversight 
Panel established under section 125.

SEC. 118. FUNDING.

  For the purpose of the authorities granted in this Act, and 
for the costs of administering those authorities, the Secretary 
may use the proceeds of the sale of any securities issued under 
chapter 31 of title 31, United States Code, and the purposes 
for which securities may be issued under chapter 31 of title 
31, United States Code, are extended to include actions 
authorized by this Act, including the payment of administrative 
expenses. Any funds expended or obligated by the Secretary for 
actions authorized by this Act, including the payment of 
administrative expenses, shall be deemed appropriated at the 
time of such expenditure or obligation.

SEC. 119. JUDICIAL REVIEW AND RELATED MATTERS.

  (a) Judicial Review.--
          (1) Standard.--Actions by the Secretary pursuant to 
        the authority of this Act shall be subject to chapter 7 
        of title 5, United States Code, including that such 
        final actions shall be held unlawful and set aside if 
        found to be arbitrary, capricious, an abuse of 
        discretion, or not in accordance with law.
          (2) Limitations on equitable relief.--
                  (A) Injunction.--No injunction or other form 
                of equitable relief shall be issued against the 
                Secretary for actions pursuant to section 101, 
                102, 106, and 109, other than to remedy a 
                violation of the Constitution.
                  (B) Temporary restraining order.--Any request 
                for a temporary restraining order against the 
                Secretary for actions pursuant to this Act 
                shall be considered and granted or denied by 
                the court within 3 days of the date of the 
                request.
                  (C) Preliminary injunction.--Any request for 
                a preliminary injunction against the Secretary 
                for actions pursuant to this Act shall be 
                considered and granted or denied by the court 
                on an expedited basis consistent with the 
                provisions of rule 65(b)(3) of the Federal 
                Rules of Civil Procedure, or any successor 
                thereto.
                  (D) Permanent injunction.--Any request for a 
                permanent injunction against the Secretary for 
                actions pursuant to this Act shall be 
                considered and granted or denied by the court 
                on an expedited basis. Whenever possible, the 
                court shall consolidate trial on the merits 
                with any hearing on a request for a preliminary 
                injunction, consistent with the provisions of 
                rule 65(a)(2) of the Federal Rules of Civil 
                Procedure, or any successor thereto.
          (3) Limitation on actions by participating 
        companies.--No action or claims may be brought against 
        the Secretary by any person that divests its assets 
        with respect to its participation in a program under 
        this Act, except as provided in paragraph (1), other 
        than as expressly provided in a written contract with 
        the Secretary.
          (4) Stays.--Any injunction or other form of equitable 
        relief issued against the Secretary for actions 
        pursuant to section 101, 102, 106, and 109, shall be 
        automatically stayed. The stay shall be lifted unless 
        the Secretary seeks a stay from a higher court within 3 
        calendar days after the date on which the relief is 
        issued.
  (b) Related Matters.--
          (1) Treatment of homeowners' rights.--The terms of 
        any residential mortgage loan that is part of any 
        purchase by the Secretary under this Act shall remain 
        subject to all claims and defenses that would otherwise 
        apply, notwithstanding the exercise of authority by the 
        Secretary under this Act.
          (2) Savings clause.--Any exercise of the authority of 
        the Secretary pursuant to this Act shall not impair the 
        claims or defenses that would otherwise apply with 
        respect to persons other than the Secretary. Except as 
        established in any contract, a servicer of pooled 
        residential mortgages owes any duty to determine 
        whether the net present value of the payments on the 
        loan, as modified, is likely to be greater than the 
        anticipated net recovery that would result from 
        foreclosure to all investors and holders of beneficial 
        interests in such investment, but not to any individual 
        or groups of investors or beneficial interest holders, 
        and shall be deemed to act in the best interests of all 
        such investors or holders of beneficial interests if 
        the servicer agrees to or implements a modification or 
        workout plan when the servicer takes reasonable loss 
        mitigation actions, including partial payments.

SEC. 120. TERMINATION OF AUTHORITY.

  (a) Termination.--The authorities provided under sections 
101(a), excluding section 101(a)(3), and 102 shall terminate on 
December 31, 2009.
  (b) Extension Upon Certification.--The Secretary, upon 
submission of a written certification to Congress, may extend 
the authority provided under this Act to expire not later than 
2 years from the date of enactment of this Act. Such 
certification shall include a justification of why the 
extension is necessary to assist American families and 
stabilize financial markets, as well as the expected cost to 
the taxpayers for such an extension.

SEC. 121. SPECIAL INSPECTOR GENERAL FOR THE TROUBLED ASSET RELIEF 
                    PROGRAM.

  (a) Office of Inspector General.--There is hereby established 
the Office of the Special Inspector General for the Troubled 
Asset Relief Program.
  (b) Appointment of Inspector General; Removal.--(1) The head 
of the Office of the Special Inspector General for the Troubled 
Asset Relief Program is the Special Inspector General for the 
Troubled Asset Relief Program (in this section referred to as 
the ``Special Inspector General''), who shall be appointed by 
the President, by and with the advice and consent of the 
Senate.
  (2) The appointment of the Special Inspector General shall be 
made on the basis of integrity and demonstrated ability in 
accounting, auditing, financial analysis, law, management 
analysis, public administration, or investigations.
  (3) The nomination of an individual as Special Inspector 
General shall be made as soon as practicable after the 
establishment of any program under sections 101 and 102.
  (4) The Special Inspector General shall be removable from 
office in accordance with the provisions of section 3(b) of the 
Inspector General Act of 1978 (5 U.S.C. App.).
  (5) For purposes of section 7324 of title 5, United States 
Code, the Special Inspector General shall not be considered an 
employee who determines policies to be pursued by the United 
States in the nationwide administration of Federal law.
  (6) The annual rate of basic pay of the Special Inspector 
General shall be the annual rate of basic pay provided for 
positions at level IV of the Executive Schedule under section 
5315 of title 5, United States Code.
  (c) Duties.--(1) It shall be the duty of the Special 
Inspector General to conduct, supervise, and coordinate audits 
and investigations of the purchase, management, and sale of 
assets by the Secretary of the Treasury under any program 
established by the Secretary under section 101, and the 
management by the Secretary of any program established under 
section 102, including by collecting and summarizing the 
following information:
          (A) A description of the categories of troubled 
        assets purchased or otherwise procured by the 
        Secretary.
          (B) A listing of the troubled assets purchased in 
        each such category described under subparagraph (A).
          (C) An explanation of the reasons the Secretary 
        deemed it necessary to purchase each such troubled 
        asset.
          (D) A listing of each financial institution that such 
        troubled assets were purchased from.
          (E) A listing of and detailed biographical 
        information on each person or entity hired to manage 
        such troubled assets.
          (F) A current estimate of the total amount of 
        troubled assets purchased pursuant to any program 
        established under section 101, the amount of troubled 
        assets on the books of the Treasury, the amount of 
        troubled assets sold, and the profit and loss incurred 
        on each sale or disposition of each such troubled 
        asset.
          (G) A listing of the insurance contracts issued under 
        section 102.
  (2) The Special Inspector General shall establish, maintain, 
and oversee such systems, procedures, and controls as the 
Special Inspector General considers appropriate to discharge 
the duty under paragraph (1).
  (3) In addition to the duties specified in paragraphs (1) and 
(2), the Inspector General shall also have the duties and 
responsibilities of inspectors general under the Inspector 
General Act of 1978.
  (d) Powers and Authorities.--(1) In carrying out the duties 
specified in subsection (c), the Special Inspector General 
shall have the authorities provided in section 6 of the 
Inspector General Act of 1978.
  (2) The Special Inspector General shall carry out the duties 
specified in subsection (c)(1) in accordance with section 
4(b)(1) of the Inspector General Act of 1978.
  (e) Personnel, Facilities, and Other Resources.--(1) The 
Special Inspector General may select, appoint, and employ such 
officers and employees as may be necessary for carrying out the 
duties of the Special Inspector General, subject to the 
provisions of title 5, United States Code, governing 
appointments in the competitive service, and the provisions of 
chapter 51 and subchapter III of chapter 53 of such title, 
relating to classification and General Schedule pay rates.
  (2) The Special Inspector General may obtain services as 
authorized by section 3109 of title 5, United States Code, at 
daily rates not to exceed the equivalent rate prescribed for 
grade GS-15 of the General Schedule by section 5332 of such 
title.
  (3) The Special Inspector General may enter into contracts 
and other arrangements for audits, studies, analyses, and other 
services with public agencies and with private persons, and 
make such payments as may be necessary to carry out the duties 
of the Inspector General.
  (4)(A) Upon request of the Special Inspector General for 
information or assistance from any department, agency, or other 
entity of the Federal Government, the head of such entity 
shall, insofar as is practicable and not in contravention of 
any existing law, furnish such information or assistance to the 
Special Inspector General, or an authorized designee.
  (B) Whenever information or assistance requested by the 
Special Inspector General is, in the judgment of the Special 
Inspector General, unreasonably refused or not provided, the 
Special Inspector General shall report the circumstances to the 
appropriate committees of Congress without delay.
  (f) Reports.--(1) Not later than 60 days after the 
confirmation of the Special Inspector General, and every 
calendar quarter thereafter, the Special Inspector General 
shall submit to the appropriate committees of Congress a report 
summarizing the activities of the Special Inspector General 
during the 120-day period ending on the date of such report. 
Each report shall include, for the period covered by such 
report, a detailed statement of all purchases, obligations, 
expenditures, and revenues associated with any program 
established by the Secretary of the Treasury under sections 101 
and 102, as well as the information collected under subsection 
(c)(1).
  (2) Nothing in this subsection shall be construed to 
authorize the public disclosure of information that is--
          (A) specifically prohibited from disclosure by any 
        other provision of law;
          (B) specifically required by Executive order to be 
        protected from disclosure in the interest of national 
        defense or national security or in the conduct of 
        foreign affairs; or
          (C) a part of an ongoing criminal investigation.
  (3) Any reports required under this section shall also be 
submitted to the Congressional Oversight Panel established 
under section 125.
  (g) Funding.--(1) Of the amounts made available to the 
Secretary of the Treasury under section 118, $50,000,000 shall 
be available to the Special Inspector General to carry out this 
section.
  (2) The amount available under paragraph (1) shall remain 
available until expended.
  (h) Termination.--The Office of the Special Inspector General 
shall terminate on the later of--
          (1) the date that the last troubled asset acquired by 
        the Secretary under section 101 has been sold or 
        transferred out of the ownership or control of the 
        Federal Government; or
          (2) the date of expiration of the last insurance 
        contract issued under section 102.

SEC. 122. INCREASE IN STATUTORY LIMIT ON THE PUBLIC DEBT.

  Subsection (b) of section 3101 of title 31, United States 
Code, is amended by striking out the dollar limitation 
contained in such subsection and inserting 
``$11,315,000,000,000''.

SEC. 123. CREDIT REFORM.

  (a) In General.--Subject to subsection (b), the costs of 
purchases of troubled assets made under section 101(a) and 
guarantees of troubled assets under section 102, and any cash 
flows associated with the activities authorized in section 102 
and subsections (a), (b), and (c) of section 106 shall be 
determined as provided under the Federal Credit Reform Act of 
1990 (2 U.S.C. 661 et. seq.).
  (b) Costs.--For the purposes of section 502(5) of the Federal 
Credit Reform Act of 1990 (2 U.S.C. 661a(5))--
          (1) the cost of troubled assets and guarantees of 
        troubled assets shall be calculated by adjusting the 
        discount rate in section 502(5)(E) (2 U.S.C. 
        661a(5)(E)) for market risks; and
          (2) the cost of a modification of a troubled asset or 
        guarantee of a troubled asset shall be the difference 
        between the current estimate consistent with paragraph 
        (1) under the terms of the troubled asset or guarantee 
        of the troubled asset and the current estimate 
        consistent with paragraph (1) under the terms of the 
        troubled asset or guarantee of the troubled asset, as 
        modified.

SEC. 124. HOPE FOR HOMEOWNERS AMENDMENTS.

  Section 257 of the National Housing Act (12 U.S.C. 1715z-23) 
is amended--
          (1) in subsection (e)--
                  (A) in paragraph (1)(B), by inserting before 
                ``a ratio'' the following: ``, or thereafter is 
                likely to have, due to the terms of the 
                mortgage being reset,'';
                  (B) in paragraph (2)(B), by inserting before 
                the period at the end ``(or such higher 
                percentage as the Board determines, in the 
                discretion of the Board)'';
                  (C) in paragraph (4)(A)--
                          (i) in the first sentence, by 
                        inserting after ``insured loan'' the 
                        following: ``and any payments made 
                        under this paragraph,''; and
                          (ii) by adding at the end the 
                        following: ``Such actions may include 
                        making payments, which shall be 
                        accepted as payment in full of all 
                        indebtedness under the eligible 
                        mortgage, to any holder of an existing 
                        subordinate mortgage, in lieu of any 
                        future appreciation payments authorized 
                        under subparagraph (B).''; and
          (2) in subsection (w), by inserting after 
        ``administrative costs'' the following: ``and payments 
        pursuant to subsection (e)(4)(A)''.

SEC. 125. CONGRESSIONAL OVERSIGHT PANEL.

  (a) Establishment.--There is hereby established the 
Congressional Oversight Panel (hereafter in this section 
referred to as the ``Oversight Panel'') as an establishment in 
the legislative branch.
  (b) Duties.--The Oversight Panel shall review the current 
state of the financial markets and the regulatory system and 
submit the following reports to Congress:
          (1) Regular reports.--
                  (A) In general.--Regular reports of the 
                Oversight Panel shall include the following:
                          (i) The use by the Secretary of 
                        authority under this Act, including 
                        with respect to the use of contracting 
                        authority and administration of the 
                        program.
                          (ii) The impact of purchases made 
                        under the Act on the financial markets 
                        and financial institutions.
                          (iii) The extent to which the 
                        information made available on 
                        transactions under the program has 
                        contributed to market transparency.
                          (iv) The effectiveness of foreclosure 
                        mitigation efforts, and the 
                        effectiveness of the program from the 
                        standpoint of minimizing long-term 
                        costs to the taxpayers and maximizing 
                        the benefits for taxpayers.
                  (B) Timing.--The reports required under this 
                paragraph shall be submitted not later than 30 
                days after the first exercise by the Secretary 
                of the authority under section 101(a) or 102, 
                and every 30 days thereafter.
          (2) Special report on regulatory reform.--The 
        Oversight Panel shall submit a special report on 
        regulatory reform not later than January 20, 2009, 
        analyzing the current state of the regulatory system 
        and its effectiveness at overseeing the participants in 
        the financial system and protecting consumers, and 
        providing recommendations for improvement, including 
        recommendations regarding whether any participants in 
        the financial markets that are currently outside the 
        regulatory system should become subject to the 
        regulatory system, the rationale underlying such 
        recommendation, and whether there are any gaps in 
        existing consumer protections.
  (c) Membership.--
          (1) In general.--The Oversight Panel shall consist of 
        5 members, as follows:
                  (A) 1 member appointed by the Speaker of the 
                House of Representatives.
                  (B) 1 member appointed by the minority leader 
                of the House of Representatives.
                  (C) 1 member appointed by the majority leader 
                of the Senate.
                  (D) 1 member appointed by the minority leader 
                of the Senate.
                  (E) 1 member appointed by the Speaker of the 
                House of Representatives and the majority 
                leader of the Senate, after consultation with 
                the minority leader of the Senate and the 
                minority leader of the House of 
                Representatives.
          (2) Pay.--Each member of the Oversight Panel shall 
        each be paid at a rate equal to the daily equivalent of 
        the annual rate of basic pay for level I of the 
        Executive Schedule for each day (including travel time) 
        during which such member is engaged in the actual 
        performance of duties vested in the Commission.
          (3) Prohibition of compensation of federal 
        employees.--Members of the Oversight Panel who are 
        full-time officers or employees of the United States or 
        Members of Congress may not receive additional pay, 
        allowances, or benefits by reason of their service on 
        the Oversight Panel.
          (4) Travel expenses.--Each member shall receive 
        travel expenses, including per diem in lieu of 
        subsistence, in accordance with applicable provisions 
        under subchapter I of chapter 57 of title 5, United 
        States Code.
          (5) Quorum.--Four members of the Oversight Panel 
        shall constitute a quorum but a lesser number may hold 
        hearings.
          (6) Vacancies.--A vacancy on the Oversight Panel 
        shall be filled in the manner in which the original 
        appointment was made.
          (7) Meetings.--The Oversight Panel shall meet at the 
        call of the Chairperson or a majority of its members.
  (d) Staff.--
          (1) In general.--The Oversight Panel may appoint and 
        fix the pay of any personnel as the Commission 
        considers appropriate.
          (2) Experts and consultants.--The Oversight Panel may 
        procure temporary and intermittent services under 
        section 3109(b) of title 5, United States Code.
          (3) Staff of agencies.--Upon request of the Oversight 
        Panel, the head of any Federal department or agency may 
        detail, on a reimbursable basis, any of the personnel 
        of that department or agency to the Oversight Panel to 
        assist it in carrying out its duties under this Act.
  (e) Powers.--
          (1) Hearings and sessions.--The Oversight Panel may, 
        for the purpose of carrying out this section, hold 
        hearings, sit and act at times and places, take 
        testimony, and receive evidence as the Panel considers 
        appropriate and may administer oaths or affirmations to 
        witnesses appearing before it.
          (2) Powers of members and agents.--Any member or 
        agent of the Oversight Panel may, if authorized by the 
        Oversight Panel, take any action which the Oversight 
        Panel is authorized to take by this section.
          (3) Obtaining official data.--The Oversight Panel may 
        secure directly from any department or agency of the 
        United States information necessary to enable it to 
        carry out this section. Upon request of the Chairperson 
        of the Oversight Panel, the head of that department or 
        agency shall furnish that information to the Oversight 
        Panel.
          (4) Reports.--The Oversight Panel shall receive and 
        consider all reports required to be submitted to the 
        Oversight Panel under this Act.
  (f) Termination.--The Oversight Panel shall terminate 6 
months after the termination date specified in section 120.
  (g) Funding for Expenses.--
          (1) Authorization of appropriations.--There is 
        authorized to be appropriated to the Oversight Panel 
        such sums as may be necessary for any fiscal year, half 
        of which shall be derived from the applicable account 
        of the House of Representatives, and half of which 
        shall be derived from the contingent fund of the 
        Senate.
          (2) Reimbursement of amounts.--An amount equal to the 
        expenses of the Oversight Panel shall be promptly 
        transferred by the Secretary, from time to time upon 
        the presentment of a statement of such expenses by the 
        Chairperson of the Oversight Panel, from funds made 
        available to the Secretary under this Act to the 
        applicable fund of the House of Representatives and the 
        contingent fund of the Senate, as appropriate, as 
        reimbursement for amounts expended from such account 
        and fund under paragraph (1).

SEC. 126. FDIC AUTHORITY.

  (a) In General.--Section 18(a) of the Federal Deposit 
Insurance Act (12 U.S.C. 1828(a)) is amended by adding at the 
end the following new paragraph:
          ``(4) False advertising, misuse of fdic names, and 
        misrepresentation to indicate insured status.--
                  ``(A) Prohibition on false advertising and 
                misuse of fdic names.--No person may represent 
                or imply that any deposit liability, 
                obligation, certificate, or share is insured or 
                guaranteed by the Corporation, if such deposit 
                liability, obligation, certificate, or share is 
                not insured or guaranteed by the Corporation--
                          ``(i) by using the terms `Federal 
                        Deposit', `Federal Deposit Insurance', 
                        `Federal Deposit Insurance 
                        Corporation', any combination of such 
                        terms, or the abbreviation `FDIC' as 
                        part of the business name or firm name 
                        of any person, including any 
                        corporation, partnership, business 
                        trust, association, or other business 
                        entity; or
                          ``(ii) by using such terms or any 
                        other terms, sign, or symbol as part of 
                        an advertisement, solicitation, or 
                        other document.
                  ``(B) Prohibition on misrepresentations of 
                insured status.--No person may knowingly 
                misrepresent--
                          ``(i) that any deposit liability, 
                        obligation, certificate, or share is 
                        insured, under this Act, if such 
                        deposit liability, obligation, 
                        certificate, or share is not so 
                        insured; or
                          ``(ii) the extent to which or the 
                        manner in which any deposit liability, 
                        obligation, certificate, or share is 
                        insured under this Act, if such deposit 
                        liability, obligation, certificate, or 
                        share is not so insured, to the extent 
                        or in the manner represented.
                  ``(C) Authority of the appropriate federal 
                banking agency.--The appropriate Federal 
                banking agency shall have enforcement authority 
                in the case of a violation of this paragraph by 
                any person for which the agency is the 
                appropriate Federal banking agency, or any 
                institution-affiliated party thereof.
                  ``(D) Corporation authority if the 
                appropriate federal banking agency fails to 
                follow recommendation.--
                          ``(i) Recommendation.--The 
                        Corporation may recommend in writing to 
                        the appropriate Federal banking agency 
                        that the agency take any enforcement 
                        action authorized under section 8 for 
                        purposes of enforcement of this 
                        paragraph with respect to any person 
                        for which the agency is the appropriate 
                        Federal banking agency or any 
                        institution-affiliated party thereof.
                          ``(ii) Agency response.--If the 
                        appropriate Federal banking agency does 
                        not, within 30 days of the date of 
                        receipt of a recommendation under 
                        clause (i), take the enforcement action 
                        with respect to this paragraph 
                        recommended by the Corporation or 
                        provide a plan acceptable to the 
                        Corporation for responding to the 
                        situation presented, the Corporation 
                        may take the recommended enforcement 
                        action against such person or 
                        institution-affiliated party.
                  ``(E) Additional authority.--In addition to 
                its authority under subparagraphs (C) and (D), 
                for purposes of this paragraph, the Corporation 
                shall have, in the same manner and to the same 
                extent as with respect to a State nonmember 
                insured bank--
                          ``(i) jurisdiction over--
                                  ``(I) any person other than a 
                                person for which another agency 
                                is the appropriate Federal 
                                banking agency or any 
                                institution-affiliated party 
                                thereof; and
                                  ``(II) any person that aids 
                                or abets a violation of this 
                                paragraph by a person described 
                                in subclause (I); and
                          ``(ii) for purposes of enforcing the 
                        requirements of this paragraph, the 
                        authority of the Corporation under--
                                  ``(I) section 10(c) to 
                                conduct investigations; and
                                  ``(II) subsections (b), (c), 
                                (d) and (i) of section 8 to 
                                conduct enforcement actions.
                  ``(F) Other actions preserved.--No provision 
                of this paragraph shall be construed as barring 
                any action otherwise available, under the laws 
                of the United States or any State, to any 
                Federal or State agency or individual.''.
  (b) Enforcement Orders.--Section 8(c) of the Federal Deposit 
Insurance Act (12 U.S.C. 1818(c)) is amended by adding at the 
end the following new paragraph:
          ``(4) False advertising or misuse of names to 
        indicate insured status.--
                  ``(A) Temporary order.--
                          ``(i) In general.--If a notice of 
                        charges served under subsection (b)(1) 
                        specifies on the basis of particular 
                        facts that any person engaged or is 
                        engaging in conduct described in 
                        section 18(a)(4), the Corporation or 
                        other appropriate Federal banking 
                        agency may issue a temporary order 
                        requiring--
                                  ``(I) the immediate cessation 
                                of any activity or practice 
                                described, which gave rise to 
                                the notice of charges; and
                                  ``(II) affirmative action to 
                                prevent any further, or to 
                                remedy any existing, violation.
                          ``(ii) Effect of order.--Any 
                        temporary order issued under this 
                        subparagraph shall take effect upon 
                        service.
                  ``(B) Effective period of temporary order.--A 
                temporary order issued under subparagraph (A) 
                shall remain effective and enforceable, pending 
                the completion of an administrative proceeding 
                pursuant to subsection (b)(1) in connection 
                with the notice of charges--
                          ``(i) until such time as the 
                        Corporation or other appropriate 
                        Federal banking agency dismisses the 
                        charges specified in such notice; or
                          ``(ii) if a cease-and-desist order is 
                        issued against such person, until the 
                        effective date of such order.
                  ``(C) Civil money penalties.--Any violation 
                of section 18(a)(4) shall be subject to civil 
                money penalties, as set forth in subsection 
                (i), except that for any person other than an 
                insured depository institution or an 
                institution-affiliated party that is found to 
                have violated this paragraph, the Corporation 
                or other appropriate Federal banking agency 
                shall not be required to demonstrate any loss 
                to an insured depository institution.''.
  (c) Unenforceability of Certain Agreements.--Section 13(c) of 
the Federal Deposit Insurance Act (12 U.S.C. 1823(c)) is 
amended by adding at the end the following new paragraph:
          ``(11) Unenforceability of certain agreements.--No 
        provision contained in any existing or future 
        standstill, confidentiality, or other agreement that, 
        directly or indirectly--
                  ``(A) affects, restricts, or limits the 
                ability of any person to offer to acquire or 
                acquire,
                  ``(B) prohibits any person from offering to 
                acquire or acquiring, or
                  ``(C) prohibits any person from using any 
                previously disclosed information in connection 
                with any such offer to acquire or acquisition 
                of,
        all or part of any insured depository institution, 
        including any liabilities, assets, or interest therein, 
        in connection with any transaction in which the 
        Corporation exercises its authority under section 11 or 
        13, shall be enforceable against or impose any 
        liability on such person, as such enforcement or 
        liability shall be contrary to public policy.''.
  (d) Technical and Conforming Amendments.--Section 18 of the 
Federal Deposit Insurance Act (12 U.S.C. 1828) is amended--
          (1) in subsection (a)(3)--
                  (A) by striking ``this subsection'' the first 
                place that term appears and inserting 
                ``paragraph (1)''; and
                  (B) by striking ``this subsection'' the 
                second place that term appears and inserting 
                ``paragraph (2)''; and
          (2) in the heading for subsection (a), by striking 
        ``Insurance Logo.--'' and inserting ``Representations 
        of Deposit Insurance.--''.

SEC. 127. COOPERATION WITH THE FBI.

  Any Federal financial regulatory agency shall cooperate with 
the Federal Bureau of Investigation and other law enforcement 
agencies investigating fraud, misrepresentation, and 
malfeasance with respect to development, advertising, and sale 
of financial products.

SEC. 128. ACCELERATION OF EFFECTIVE DATE.

  Section 203 of the Financial Services Regulatory Relief Act 
of 2006 (12 U.S.C. 461 note) is amended by striking ``October 
1, 2011'' and inserting ``October 1, 2008''.

SEC. 129. DISCLOSURES ON EXERCISE OF LOAN AUTHORITY.

  (a) In General.--Not later than 7 days after the date on 
which the Board exercises its authority under the third 
paragraph of section 13 of the Federal Reserve Act (12 U.S.C. 
343; relating to discounts for individuals, partnerships, and 
corporations) the Board shall provide to the Committee on 
Banking, Housing, and Urban Affairs of the Senate and the 
Committee on Financial Services of the House of Representatives 
a report which includes--
          (1) the justification for exercising the authority; 
        and
          (2) the specific terms of the actions of the Board, 
        including the size and duration of the lending, 
        available information concerning the value of any 
        collateral held with respect to such a loan, the 
        recipient of warrants or any other potential equity in 
        exchange for the loan, and any expected cost to the 
        taxpayers for such exercise.
  (b) Periodic Updates.--The Board shall provide updates to the 
Committees specified in subsection (a) not less frequently than 
once every 60 days while the subject loan is outstanding, 
including--
          (1) the status of the loan;
          (2) the value of the collateral held by the Federal 
        reserve bank which initiated the loan; and
          (3) the projected cost to the taxpayers of the loan.
  (c) Confidentiality.--The information submitted to the 
Congress under this section may be kept confidential, upon the 
written request of the Chairman of the Board, in which case it 
shall made available only to the Chairpersons and Ranking 
Members of the Committees described in subsection (a).
  (d) Applicability.--The provisions of this section shall be 
in force for all uses of the authority provided under section 
13 of the Federal Reserve Act occurring during the period 
beginning on March 1, 2008 and ending on the after the date of 
enactment of this Act, and reports described in subsection (a) 
shall be required beginning not later than 30 days after that 
date of enactment, with respect to any such exercise of 
authority.
  (e) Sharing of Information.--Any reports required under this 
section shall also be submitted to the Congressional Oversight 
Panel established under section 125.

SEC. 130. TECHNICAL CORRECTIONS.

  (a) In General.--Section 128(b)(2) of the Truth in Lending 
Act (15 U.S.C. 1638(b)(2)), as amended by section 2502 of the 
Mortgage Disclosure Improvement Act of 2008 (Public Law 110-
289), is amended--
          (1) in subparagraph (A), by striking ``In the case'' 
        and inserting ``Except as provided in subparagraph (G), 
        in the case''; and
          (2) by amending subparagraph (G) to read as follows:
                  ``(G)(i) In the case of an extension of 
                credit relating to a plan described in section 
                101(53D) of title 11, United States Code--
                          ``(I) the requirements of 
                        subparagraphs (A) through (E) shall not 
                        apply; and
                          ``(II) a good faith estimate of the 
                        disclosures required under subsection 
                        (a) shall be made in accordance with 
                        regulations of the Board under section 
                        121(c) before such credit is extended, 
                        or shall be delivered or placed in the 
                        mail not later than 3 business days 
                        after the date on which the creditor 
                        receives the written application of the 
                        consumer for such credit, whichever is 
                        earlier.
                  ``(ii) If a disclosure statement furnished 
                within 3 business days of the written 
                application (as provided under clause (i)(II)) 
                contains an annual percentage rate which is 
                subsequently rendered inaccurate, within the 
                meaning of section 107(c), the creditor shall 
                furnish another disclosure statement at the 
                time of settlement or consummation of the 
                transaction.''.
  (b) Effective Date.--The amendments made by subsection (a) 
shall take effect as if included in the amendments made by 
section 2502 of the Mortgage Disclosure Improvement Act of 2008 
(Public Law 110-289).

SEC. 131. EXCHANGE STABILIZATION FUND REIMBURSEMENT.

  (a) Reimbursement.--The Secretary shall reimburse the 
Exchange Stabilization Fund established under section 5302 of 
title 31, United States Code, for any funds that are used for 
the Treasury Money Market Funds Guaranty Program for the United 
States money market mutual fund industry, from funds under this 
Act.
  (b) Limits on Use of Exchange Stabilization Fund.--The 
Secretary is prohibited from using the Exchange Stabilization 
Fund for the establishment of any future guaranty programs for 
the United States money market mutual fund industry.

SEC. 132. AUTHORITY TO SUSPEND MARK-TO-MARKET ACCOUNTING.

  (a) Authority.--The Securities and Exchange Commission shall 
have the authority under the securities laws (as such term is 
defined in section 3(a)(47) of the Securities Exchange Act of 
1934 (15 U.S.C. 78c(a)(47)) to suspend, by rule, regulation, or 
order, the application of Statement Number 157 of the Financial 
Accounting Standards Board for any issuer (as such term is 
defined in section 3(a)(8) of such Act) or with respect to any 
class or category of transaction if the Commission determines 
that is necessary or appropriate in the public interest and is 
consistent with the protection of investors.
  (b) Savings Provision.--Nothing in subsection (a) shall be 
construed to restrict or limit any authority of the Securities 
and Exchange Commission under securities laws as in effect on 
the date of enactment of this Act.

SEC. 133. STUDY ON MARK-TO-MARKET ACCOUNTING.

  (a) Study.--The Securities and Exchange Commission, in 
consultation with the Board and the Secretary, shall conduct a 
study on mark-to-market accounting standards as provided in 
Statement Number 157 of the Financial Accounting Standards 
Board, as such standards are applicable to financial 
institutions, including depository institutions. Such a study 
shall consider at a minimum--
          (1) the effects of such accounting standards on a 
        financial institution's balance sheet;
          (2) the impacts of such accounting on bank failures 
        in 2008;
          (3) the impact of such standards on the quality of 
        financial information available to investors;
          (4) the process used by the Financial Accounting 
        Standards Board in developing accounting standards;
          (5) the advisability and feasibility of modifications 
        to such standards; and
          (6) alternative accounting standards to those 
        provided in such Statement Number 157.
  (b) Report.--The Securities and Exchange Commission shall 
submit to Congress a report of such study before the end of the 
90-day period beginning on the date of the enactment of this 
Act containing the findings and determinations of the 
Commission, including such administrative and legislative 
recommendations as the Commission determines appropriate.

SEC. 134. RECOUPMENT.

  Upon the expiration of the 5-year period beginning upon the 
date of the enactment of this Act, the Director of the Office 
of Management and Budget, in consultation with the Director of 
the Congressional Budget Office, shall submit a report to the 
Congress on the net amount within the Troubled Asset Relief 
Program under this Act. In any case where there is a shortfall, 
the President shall submit a legislative proposal that recoups 
from the financial industry an amount equal to the shortfall in 
order to ensure that the Troubled Asset Relief Program does not 
add to the deficit or national debt.

SEC. 135. PRESERVATION OF AUTHORITY.

  With the exception of section 131, nothing in this Act may be 
construed to limit the authority of the Secretary or the Board 
under any other provision of law.

                  TITLE II--BUDGET-RELATED PROVISIONS

SEC. 201. INFORMATION FOR CONGRESSIONAL SUPPORT AGENCIES.

  Upon request, and to the extent otherwise consistent with 
law, all information used by the Secretary in connection with 
activities authorized under this Act (including the records to 
which the Comptroller General is entitled under this Act) shall 
be made available to congressional support agencies (in 
accordance with their obligations to support the Congress as 
set out in their authorizing statutes) for the purposes of 
assisting the committees of Congress with conducting oversight, 
monitoring, and analysis of the activities authorized under 
this Act.

SEC. 202. REPORTS BY THE OFFICE OF MANAGEMENT AND BUDGET AND THE 
                    CONGRESSIONAL BUDGET OFFICE.

  (a) Reports by the Office of Management and Budget.--Within 
60 days of the first exercise of the authority granted in 
section 101(a), but in no case later than December 31, 2008, 
and semiannually thereafter, the Office of Management and 
Budget shall report to the President and the Congress--
          (1) the estimate, notwithstanding section 502(5)(F) 
        of the Federal Credit Reform Act of 1990 (2 U.S.C. 
        661a(5)(F)), as of the first business day that is at 
        least 30 days prior to the issuance of the report, of 
        the cost of the troubled assets, and guarantees of the 
        troubled assets, determined in accordance with section 
        123;
          (2) the information used to derive the estimate, 
        including assets purchased or guaranteed, prices paid, 
        revenues received, the impact on the deficit and debt, 
        and a description of any outstanding commitments to 
        purchase troubled assets; and
          (3) a detailed analysis of how the estimate has 
        changed from the previous report.
Beginning with the second report under subsection (a), the 
Office of Management and Budget shall explain the differences 
between the Congressional Budget Office estimates delivered in 
accordance with subsection (b) and prior Office of Management 
and Budget estimates.
  (b) Reports by the Congressional Budget Office.--Within 45 
days of receipt by the Congress of each report from the Office 
of Management and Budget under subsection (a), the 
Congressional Budget Office shall report to the Congress the 
Congressional Budget Office's assessment of the report 
submitted by the Office of Management and Budget, including--
          (1) the cost of the troubled assets and guarantees of 
        the troubled assets,
          (2) the information and valuation methods used to 
        calculate such cost, and
          (3) the impact on the deficit and the debt.
  (c) Financial Expertise.--In carrying out the duties in this 
subsection or performing analyses of activities under this Act, 
the Director of the Congressional Budget Office may employ 
personnel and procure the services of experts and consultants.
  (d) Authorization of Appropriations.--There are authorized to 
be appropriated such sums as may be necessary to produce 
reports required by this section.

SEC. 203. ANALYSIS IN PRESIDENT'S BUDGET.

  (a) In General.--Section 1105(a) of title 31, United States 
Code, is amended by adding at the end the following new 
paragraph:
          ``(35) as supplementary materials, a separate 
        analysis of the budgetary effects for all prior fiscal 
        years, the current fiscal year, the fiscal year for 
        which the budget is submitted, and ensuing fiscal years 
        of the actions the Secretary of the Treasury has taken 
        or plans to take using any authority provided in the 
        Emergency Economic Stabilization Act of 2008, 
        including--
                  ``(A) an estimate of the current value of all 
                assets purchased, sold, and guaranteed under 
                the authority provided in the Emergency 
                Economic Stabilization Act of 2008 using 
                methodology required by the Federal Credit 
                Reform Act of 1990 (2 U.S.C. 661 et seq.) and 
                section 123 of the Emergency Economic 
                Stabilization Act of 2008;
                  ``(B) an estimate of the deficit, the debt 
                held by the public, and the gross Federal debt 
                using methodology required by the Federal 
                Credit Reform Act of 1990 and section 123 of 
                the Emergency Economic Stabilization Act of 
                2008;
                  ``(C) an estimate of the current value of all 
                assets purchased, sold, and guaranteed under 
                the authority provided in the Emergency 
                Economic Stabilization Act of 2008 calculated 
                on a cash basis;
                  ``(D) a revised estimate of the deficit, the 
                debt held by the public, and the gross Federal 
                debt, substituting the cash-based estimates in 
                subparagraph (C) for the estimates calculated 
                under subparagraph (A) pursuant to the Federal 
                Credit Reform Act of 1990 and section 123 of 
                the Emergency Economic Stabilization Act of 
                2008; and
                  ``(E) the portion of the deficit which can be 
                attributed to any action taken by the Secretary 
                using authority provided by the Emergency 
                Economic Stabilization Act of 2008 and the 
                extent to which the change in the deficit since 
                the most recent estimate is due to a reestimate 
                using the methodology required by the Federal 
                Credit Reform Act of 1990 and section 123 of 
                the Emergency Economic Stabilization Act of 
                2008.''
  (b) Consultation.--In implementing this section, the Director 
of Office of Management and Budget shall consult periodically, 
but at least annually, with the Committee on the Budget of the 
House of Representatives, the Committee on the Budget of the 
Senate, and the Director of the Congressional Budget Office.
  (c) Effective Date.--This section and the amendment made by 
this section shall apply beginning with respect to the fiscal 
year 2010 budget submission of the President.

SEC. 204. EMERGENCY TREATMENT.

  All provisions of this Act are designated as an emergency 
requirement and necessary to meet emergency needs pursuant to 
section 204(a) of S. Con. Res 21 (110th Congress), the 
concurrent resolution on the budget for fiscal year 2008 and 
rescissions of any amounts provided in this Act shall not be 
counted for purposes of budget enforcement.

                       TITLE III--TAX PROVISIONS

SEC. 301. GAIN OR LOSS FROM SALE OR EXCHANGE OF CERTAIN PREFERRED 
                    STOCK.

  (a) In General.--For purposes of the Internal Revenue Code of 
1986, gain or loss from the sale or exchange of any applicable 
preferred stock by any applicable financial institution shall 
be treated as ordinary income or loss.
  (b) Applicable Preferred Stock.--For purposes of this 
section, the term ``applicable preferred stock'' means any 
stock--
          (1) which is preferred stock in--
                  (A) the Federal National Mortgage 
                Association, established pursuant to the 
                Federal National Mortgage Association Charter 
                Act (12 U.S.C. 1716 et seq.), or
                  (B) the Federal Home Loan Mortgage 
                Corporation, established pursuant to the 
                Federal Home Loan Mortgage Corporation Act (12 
                U.S.C. 1451 et seq.), and
          (2) which--
                  (A) was held by the applicable financial 
                institution on September 6, 2008, or
                  (B) was sold or exchanged by the applicable 
                financial institution on or after January 1, 
                2008, and before September 7, 2008.
  (c) Applicable Financial Institution.--For purposes of this 
section:
          (1) In general.--Except as provided in paragraph (2), 
        the term ``applicable financial institution'' means--
                  (A) a financial institution referred to in 
                section 582(c)(2) of the Internal Revenue Code 
                of 1986, or
                  (B) a depository institution holding company 
                (as defined in section 3(w)(1) of the Federal 
                Deposit Insurance Act (12 U.S.C. 1813(w)(1))).
          (2) Special rules for certain sales.--In the case 
        of--
                  (A) a sale or exchange described in 
                subsection (b)(2)(B), an entity shall be 
                treated as an applicable financial institution 
                only if it was an entity described in 
                subparagraph (A) or (B) of paragraph (1) at the 
                time of the sale or exchange, and
                  (B) a sale or exchange after September 6, 
                2008, of preferred stock described in 
                subsection (b)(2)(A), an entity shall be 
                treated as an applicable financial institution 
                only if it was an entity described in 
                subparagraph (A) or (B) of paragraph (1) at all 
                times during the period beginning on September 
                6, 2008, and ending on the date of the sale or 
                exchange of the preferred stock.
  (d) Special Rule for Certain Property Not Held on September 
6, 2008.--The Secretary of the Treasury or the Secretary's 
delegate may extend the application of this section to all or a 
portion of the gain or loss from a sale or exchange in any case 
where--
          (1) an applicable financial institution sells or 
        exchanges applicable preferred stock after September 6, 
        2008, which the applicable financial institution did 
        not hold on such date, but the basis of which in the 
        hands of the applicable financial institution at the 
        time of the sale or exchange is the same as the basis 
        in the hands of the person which held such stock on 
        such date, or
          (2) the applicable financial institution is a partner 
        in a partnership which--
                  (A) held such stock on September 6, 2008, and 
                later sold or exchanged such stock, or
                  (B) sold or exchanged such stock during the 
                period described in subsection (b)(2)(B).
  (e) Regulatory Authority.--The Secretary of the Treasury or 
the Secretary's delegate may prescribe such guidance, rules, or 
regulations as are necessary to carry out the purposes of this 
section.
  (f) Effective Date.--This section shall apply to sales or 
exchanges occurring after December 31, 2007, in taxable years 
ending after such date.

SEC. 302. SPECIAL RULES FOR TAX TREATMENT OF EXECUTIVE COMPENSATION OF 
                    EMPLOYERS PARTICIPATING IN THE TROUBLED ASSETS 
                    RELIEF PROGRAM.

  (a) Denial of Deduction.--Subsection (m) of section 162 of 
the Internal Revenue Code of 1986 is amended by adding at the 
end the following new paragraph:
          ``(5) Special rule for application to employers 
        participating in the troubled assets relief program.--
                  ``(A) In general.--In the case of an 
                applicable employer, no deduction shall be 
                allowed under this chapter--
                          ``(i) in the case of executive 
                        remuneration for any applicable taxable 
                        year which is attributable to services 
                        performed by a covered executive during 
                        such applicable taxable year, to the 
                        extent that the amount of such 
                        remuneration exceeds $500,000, or
                          ``(ii) in the case of deferred 
                        deduction executive remuneration for 
                        any taxable year for services performed 
                        during any applicable taxable year by a 
                        covered executive, to the extent that 
                        the amount of such remuneration exceeds 
                        $500,000 reduced (but not below zero) 
                        by the sum of--
                                  ``(I) the executive 
                                remuneration for such 
                                applicable taxable year, plus
                                  ``(II) the portion of the 
                                deferred deduction executive 
                                remuneration for such services 
                                which was taken into account 
                                under this clause in a 
                                preceding taxable year.
                  ``(B) Applicable employer.--For purposes of 
                this paragraph--
                          ``(i) In general.--Except as provided 
                        in clause (ii), the term `applicable 
                        employer' means any employer from whom 
                        1 or more troubled assets are acquired 
                        under a program established by the 
                        Secretary under section 101(a) of the 
                        Emergency Economic Stabilization Act of 
                        2008 if the aggregate amount of the 
                        assets so acquired for all taxable 
                        years exceeds $300,000,000.
                          ``(ii) Disregard of certain assets 
                        sold through direct purchase.--If the 
                        only sales of troubled assets by an 
                        employer under the program described in 
                        clause (i) are through 1 or more direct 
                        purchases (within the meaning of 
                        section 113(c) of the Emergency 
                        Economic Stabilization Act of 2008), 
                        such assets shall not be taken into 
                        account under clause (i) in determining 
                        whether the employer is an applicable 
                        employer for purposes of this 
                        paragraph.
                          ``(iii) Aggregation rules.--Two or 
                        more persons who are treated as a 
                        single employer under subsection (b) or 
                        (c) of section 414 shall be treated as 
                        a single employer, except that in 
                        applying section 1563(a) for purposes 
                        of either such subsection, paragraphs 
                        (2) and (3) thereof shall be 
                        disregarded.
                  ``(C) Applicable taxable year.--For purposes 
                of this paragraph, the term `applicable taxable 
                year' means, with respect to any employer--
                          ``(i) the first taxable year of the 
                        employer--
                                  ``(I) which includes any 
                                portion of the period during 
                                which the authorities under 
                                section 101(a) of the Emergency 
                                Economic Stabilization Act of 
                                2008 are in effect (determined 
                                under section 120 thereof), and
                                  ``(II) in which the aggregate 
                                amount of troubled assets 
                                acquired from the employer 
                                during the taxable year 
                                pursuant to such authorities 
                                (other than assets to which 
                                subparagraph (B)(ii) applies), 
                                when added to the aggregate 
                                amount so acquired for all 
                                preceding taxable years, 
                                exceeds $300,000,000, and
                          ``(ii) any subsequent taxable year 
                        which includes any portion of such 
                        period.
                  ``(D) Covered executive.--For purposes of 
                this paragraph--
                          ``(i) In general.--The term `covered 
                        executive' means, with respect to any 
                        applicable taxable year, any employee--
                                  ``(I) who, at any time during 
                                the portion of the taxable year 
                                during which the authorities 
                                under section 101(a) of the 
                                Emergency Economic 
                                Stabilization Act of 2008 are 
                                in effect (determined under 
                                section 120 thereof), is the 
                                chief executive officer of the 
                                applicable employer or the 
                                chief financial officer of the 
                                applicable employer, or an 
                                individual acting in either 
                                such capacity, or
                                  ``(II) who is described in 
                                clause (ii).
                          ``(ii) Highest compensated 
                        employees.--An employee is described in 
                        this clause if the employee is 1 of the 
                        3 highest compensated officers of the 
                        applicable employer for the taxable 
                        year (other than an individual 
                        described in clause (i)(I)), 
                        determined--
                                  ``(I) on the basis of the 
                                shareholder disclosure rules 
                                for compensation under the 
                                Securities Exchange Act of 1934 
                                (without regard to whether 
                                those rules apply to the 
                                employer), and
                                  ``(II) by only taking into 
                                account employees employed 
                                during the portion of the 
                                taxable year described in 
                                clause (i)(I).
                          ``(iii) Employee remains covered 
                        executive.--If an employee is a covered 
                        executive with respect to an applicable 
                        employer for any applicable taxable 
                        year, such employee shall be treated as 
                        a covered executive with respect to 
                        such employer for all subsequent 
                        applicable taxable years and for all 
                        subsequent taxable years in which 
                        deferred deduction executive 
                        remuneration with respect to services 
                        performed in all such applicable 
                        taxable years would (but for this 
                        paragraph) be deductible.
                  ``(E) Executive remuneration.--For purposes 
                of this paragraph, the term `executive 
                remuneration' means the applicable employee 
                remuneration of the covered executive, as 
                determined under paragraph (4) without regard 
                to subparagraphs (B), (C), and (D) thereof. 
                Such term shall not include any deferred 
                deduction executive remuneration with respect 
                to services performed in a prior applicable 
                taxable year.
                  ``(F) Deferred deduction executive 
                remuneration.--For purposes of this paragraph, 
                the term `deferred deduction executive 
                remuneration' means remuneration which would be 
                executive remuneration for services performed 
                in an applicable taxable year but for the fact 
                that the deduction under this chapter 
                (determined without regard to this paragraph) 
                for such remuneration is allowable in a 
                subsequent taxable year.
                  ``(G) Coordination.--Rules similar to the 
                rules of subparagraphs (F) and (G) of paragraph 
                (4) shall apply for purposes of this paragraph.
                  ``(H) Regulatory authority.--The Secretary 
                may prescribe such guidance, rules, or 
                regulations as are necessary to carry out the 
                purposes of this paragraph and the Emergency 
                Economic Stabilization Act of 2008, including 
                the extent to which this paragraph applies in 
                the case of any acquisition, merger, or 
                reorganization of an applicable employer.''.
  (b) Golden Parachute Rule.--Section 280G of the Internal 
Revenue Code of 1986 is amended--
          (1) by redesignating subsection (e) as subsection 
        (f), and
          (2) by inserting after subsection (d) the following 
        new subsection:
  ``(e) Special Rule for Application to Employers Participating 
in the Troubled Assets Relief Program.--
          ``(1) In general.--In the case of the severance from 
        employment of a covered executive of an applicable 
        employer during the period during which the authorities 
        under section 101(a) of the Emergency Economic 
        Stabilization Act of 2008 are in effect (determined 
        under section 120 of such Act), this section shall be 
        applied to payments to such executive with the 
        following modifications:
                  ``(A) Any reference to a disqualified 
                individual (other than in subsection (c)) shall 
                be treated as a reference to a covered 
                executive.
                  ``(B) Any reference to a change described in 
                subsection (b)(2)(A)(i) shall be treated as a 
                reference to an applicable severance from 
                employment of a covered executive, and any 
                reference to a payment contingent on such a 
                change shall be treated as a reference to any 
                payment made during an applicable taxable year 
                of the employer on account of such applicable 
                severance from employment.
                  ``(C) Any reference to a corporation shall be 
                treated as a reference to an applicable 
                employer.
                  ``(D) The provisions of subsections 
                (b)(2)(C), (b)(4), (b)(5), and (d)(5) shall not 
                apply.
          ``(2) Definitions and special rules.--For purposes of 
        this subsection:
                  ``(A) Definitions.--Any term used in this 
                subsection which is also used in section 
                162(m)(5) shall have the meaning given such 
                term by such section.
                  ``(B) Applicable severance from employment.--
                The term `applicable severance from employment' 
                means any severance from employment of a 
                covered executive--
                          ``(i) by reason of an involuntary 
                        termination of the executive by the 
                        employer, or
                          ``(ii) in connection with any 
                        bankruptcy, liquidation, or 
                        receivership of the employer.
                  ``(C) Coordination and other rules.--
                          ``(i) In general.--If a payment which 
                        is treated as a parachute payment by 
                        reason of this subsection is also a 
                        parachute payment determined without 
                        regard to this subsection, this 
                        subsection shall not apply to such 
                        payment.
                          ``(ii) Regulatory authority.--The 
                        Secretary may prescribe such guidance, 
                        rules, or regulations as are 
                        necessary--
                                  ``(I) to carry out the 
                                purposes of this subsection and 
                                the Emergency Economic 
                                Stabilization Act of 2008, 
                                including the extent to which 
                                this subsection applies in the 
                                case of any acquisition, 
                                merger, or reorganization of an 
                                applicable employer,
                                  ``(II) to apply this section 
                                and section 4999 in cases where 
                                one or more payments with 
                                respect to any individual are 
                                treated as parachute payments 
                                by reason of this subsection, 
                                and other payments with respect 
                                to such individual are treated 
                                as parachute payments under 
                                this section without regard to 
                                this subsection, and
                                  ``(III) to prevent the 
                                avoidance of the application of 
                                this section through the 
                                mischaracterization of a 
                                severance from employment as 
                                other than an applicable 
                                severance from employment.''.
  (c) Effective Dates.--
          (1) In general.--The amendment made by subsection (a) 
        shall apply to taxable years ending on or after the 
        date of the enactment of this Act.
          (2) Golden parachute rule.--The amendments made by 
        subsection (b) shall apply to payments with respect to 
        severances occurring during the period during which the 
        authorities under section 101(a) of this Act are in 
        effect (determined under section 120 of this Act).

SEC. 303. EXTENSION OF EXCLUSION OF INCOME FROM DISCHARGE OF QUALIFIED 
                    PRINCIPAL RESIDENCE INDEBTEDNESS.

  (a) Extension.--Subparagraph (E) of section 108(a)(1) of the 
Internal Revenue Code of 1986 is amended by striking ``January 
1, 2010'' and inserting ``January 1, 2013''.
  (b) Effective Date.--The amendment made by this subsection 
shall apply to discharges of indebtedness occurring on or after 
January 1, 2010.

                                  
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