H.R. 4173 Amendments: Amendments to H.R. 4173, the Frank TARP II Government Takeover of Financial Services Act

H.R. 4173

Amendments to H.R. 4173, the Frank TARP II Government Takeover of Financial Services Act

December 10, 2009 (111th Congress, 1st Session)

Staff Contact

Floor Situation

The House is scheduled to begin consideration of H.R. 4173, the TARP II Government Takeover of Financial Services Act on Thursday, December 10, 2009, under a structured rule, making the following amendments in order.


 Frank (D-MA)


The amendment provides funds ($4 billion) for mortgage assistance.  It adds the director of the CFPA to the Financial Services Oversight Council; adds a representative of the State securities commissioners as a non-voting representative on the Financial Services Oversight Council; authorizes GAO to conduct oversight of  the CFPA; creates a mutual commercial bank charter; reduces the size of the haircut that secured creditors of a firm placed into receivership; directs the Department of Treasury to study how resolution authority is granted in the bill; requires the CFPA to establish a website for consumers complaints; establishes an Office of Financial Protection; and make numerous clarifications.  Members may be concerned that the Frank Manager's amendment allows government regulators to prop up failing firms in receivership for a period of up to 3-years, and it funnels another $4 billion in existing TARP funds to unproven foreclosure relief programs.

Sessions (R-TX)


The amendment strikes provisions which create a new private right of action against credit rating agencies; the amendment contains enforcement of credit rating agencies to the SEC (current practice).

Peterson (D-MN)


The amendment provides for position limits for physical commodities, clearing of over-the counter transactions, increased transparency, reporting, and recordkeeping, and transparency of offshore trading.  It also provides for CFTC jurisdiction over swaps and SEC jurisdiction over swaps that are primarily based on securities (or narrow based security indexes).  Members may be concerned that this added government burden could impair the usefulness of derivatives as a risk mitigation tool.

Peterson (D-MN)


The amendment authorizes the CFTC to define the terms "Commercial Risk", "operating risk", and "balance sheet risk" for purposes of the Commodity Exchange Act.

Lynch (D-MA)


The amendment provides governance of clearing houses and swap exchange facilities rules.  Members may be concerned that the amendment could impede the growth of SEFs and limit their ability to provide transparency, liquidity and risk mitigation.

Murphy, Scott (D-NY)


The amendment replaces the current definition of Major Swap Participant with the definition that was reported out of the House Agriculture Committee.

Frank (D-MA)


The amendment authorizes the prudential regulators, the CFTC and the SEC, to set margin in swap and security-based swap transactions involving end users.  Members may be concerned that many businesses may abandon the derivatives markets or pass costs to the consumer.

Stupak (D-MI)


The amendment attempts to provide transparency in swaps contracts by requiring all non-cleared swaps be executed on a registered swap execution facility.  Members may be concerned that the amendment would force all non-cleared (i.e., customized) swaps to be executed on a on a registered swap execution facility.  This amendment would eviscerate the policy that many Republicans have advocated that customized swaps should be reported to a repository but not traded on an exchange or a platform.

Stupak (D-MI)


The amendment authorizes the CFTC and the SEC to ban abusive swaps, amends any proposed commercial risk definition to disregard balance sheet risk, and maintains any illegal swap entered into after enactment of this Act will not be valid.

Matsui (D-CA)


The amendment requires any mortgage servicer or lender participating in the Making Home Affordable Program, to report to the Department of Treasury on a monthly basis.  It requires Treasury to make the report available on its website within two weeks of receiving such information.  The report to Treasury must include:  A) the number of loan modification requests received; B) the number of loan modification requests being processed; C) the number of loan modification requests that have been approved; D) the number of loan modification requests that have been denied.  The amendment authorizes Treasury to publicly release any other relevant data the Secretary deems necessary.

Paulsen (R-MN)


The amendment clarifies that the non-voting members of the systemic risk council shall not be excluded from participating in any of the Council's proceedings, meetings, discussions, and deliberations. 

Kanjorski (D-PA)


The amendment strikes the provisions exempting public companies with less than $75 million in market capitalization from the requirements of the Sarbanes-Oxley Act related to the external audit of internal controls.  Members may be concerned that many small public issuers lack the resources or internal audit functions necessary to comply with this amendment.

Marshall (D-GA)


The amendment provides that no private right of action may brought forward based on any provision of the CFPA title.

McCarthy, Kevin (R-CA)


The amendment strikes section 6012 (relating to "Effect of Rule 436(G)"). The amendment would strike increased liability language that would be a barrier to entry, inhibiting increased competition in the rating agency market.

Cohen (D-TN)


The amendment strikes language that would permit FINRA to regulate investment advisers that are associated with broker dealers.

Peters (D-MI)


The amendment authorizes the FDIC to make assessments for the Systemic Dissolution Fund used to repay any shortfalls in Troubled Asset Relief Program (TARP).

Watt (D-NC)


The amendment revises the exclusion for auto dealers under the Consumer Financial Protection Agency Act by clarifying what auto dealer activities are excepted.

Frank (D-MA), Kanjorski (D-PA)


The amendment attempts to mitigate unintended consequences resulting from the definitional change of NRSRO from "Nationally Recognized Statistical Rating Organization to "Nationally Registered Statistical Rating Organization."  Members may be concerned that the amendment would retain the current NRSRO designation.

Conyers (D-MI)


The amendment allows bankruptcy courts to extend repayment periods, reduce excessive interest rates and fees, and adjust the principal balance of the mortgage to a home's fair market value as necessary to prevent foreclosure and revised to allow the VA, FHA, and RHS to take steps to facilitate mortgage modifications. 

Burgess (R-TX)


The amendment strikes the word "orderliness" from the list of items the Financial Services Oversight Council must advise Congress on how to improve financial regulatory developments.

Burgess (R-TX)


The amendment indexes to inflation any mitigatory action imposed by the Financial Services Oversight Council involving the sale, divestiture or transfer of more than $10 billion in total assets by a financial holding company subject to stricter standards.

Burgess (R-TX)


The amendment requires the Federal Reserve to define the term "significantly undercapitalized" at a threshold the Fed determines to be prudent for the effective monitoring, management and oversight of the financial system.

Burgess (R-TX)


The amendment sets an outer time limit of two years to the amount of time the GAO can use to audit the Federal Reserve.

Burgess (R-TX)


The amendment removes from the GAO study of the SEC's "revolving door" the requirement to determine if employees of the SEC who are later employed by financial institutions "have engaged in information sharing".

Herseth Sandlin (D-SD)


The amendment directs the SEC to take into account the relative risk profile of different classes of funds when it is developing the new registration regime for private funds.

Garrett (R-NJ)


The amendment allows rating agency firms to deregister as Nationally Recognized Statistical Rating Organizations (NRSRO), provided such NRSRO certifies that it received less than $250 million during its last full fiscal year in compensation for providing credit ratings on securities and money market instruments issued in the U.S.

Dent (R-PA)


The amendment states a sense of Congress that mortgage lenders should provide loan applicants with a simplified summary of their loan contracts, including an easy-to-read list of the basic loan terms, payment information, the existence of prepayment penalties or balloon payments, and escrow information.

Moore, Dennis (D-KS)


The amendment attempts to specify only the tax policies, licensing and other regulatory requirements of the home State of the policyholder govern a surplus lines transaction, as well as allows sophisticated commercial entities direct access to the surplus lines market. The amendment also prohibits States from voiding established, contractual arbitration agreements between reinsurers and primary companies.

Wittman (R-VA)


The amendment attempts to clarify the applicability of exceptions to allow banks to announce, advertise, publicize, and/or deal in any lottery that benefits nonprofit tax-exempt organizations.

Minnick (D-ID)


The amendment authorizes the CFPA to define unfair, deceptive, or abusive acts or practices.

Bartlett (R-MD)


The amendment provides for State loan originator supervisory authority to review and grant exceptions on a case by case basis to the mortgage originators lifetime ban.

Schakowsky (D-IL)


The amendment provides the Director of the CFPA with authority to issue regulations for reverse mortgage transactions within one year of enactment.

Kilroy (D-OH)


The amendment attempts to make explicit that financing for the Systemic Dissolution Fund would come exclusively from assessments on industry, without recourse to the American taxpayer.

Murphy, Scott (D-NY)


The amendment repeals a prohibition on the payment of interest on business checking accounts.

Minnick (D-ID)


The amendment creates a Consumer Financial Protection Council (CFPC) of regulators with rule-making authority in safety and soundness of institutions and consumer protections regarding all financial products.  The CFPC would be comprised of 12 members including the Secretary of Treasury, Secretary of Housing and Urban Development, the Chairman of the Federal Reserve, the chairman of the CFTC and SEC, among other federal and state regulators. 

Bachus (R-AL)


The Republican alternative establishes a new chapter of the bankruptcy code to resolve certain non-bank financial institutions; creates a consumer protection council comprised of existing federal regulators to revise and promulgate model regulations to enhance consumer protection and improve disclosure; strengthens anti-fraud provisions; regulates over-the-counter derivatives markets; addresses executive compensation; removes statutory reliance on credit ratings; reforms the Government Sponsored Enterprises (Fannie Mae and Freddie Mac); and creates a Federal Insurance Office