12 U.S.C. § 5214 — Financial Stability Oversight Board

Page 1802 TITLE 12—BANKS AND BANKING § 5214 (2) providing stability and preventing disrup- tion 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 di- rect purchase from an individual financial in- stitution, the long-term viability of the finan- cial institution in determining whether the purchase represents the most efficient use of funds under this chapter; (5) ensuring that all financial institutions are eligible to participate in the program, without discrimination based on size, geog- raphy, form of organization, or the size, type, and number of assets eligible for purchase under this chapter; (6) providing financial assistance to finan- cial institutions, including those serving low- and moderate-income populations and other underserved communities, and that have as- sets 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 pre- ferred government-sponsored enterprises stock will drop one or more capital levels, in a man- ner sufficient to restore the financial institu- tions to at least an adequately capitalized level; (7) the need to ensure stability for United States public instrumentalities, such as coun- ties and cities, that may have suffered signifi- cant 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 sec- tion 402(c)(8)(B) of title 26, except that such authority shall not extend to any compensa- tion arrangements subject to section 409A of such title; and (9) the utility of purchasing other real estate owned and instruments backed by mortgages on multifamily properties. (Pub. L. 110–343, div. A, title I, § 103, Oct. 3, 2008, 122 Stat. 3770.) Editorial Notes REFERENCES IN TEXT This chapter, referred to in text, was in the original ‘‘this Act’’ and was translated as reading ‘‘this divi- sion’’, meaning div. A of Pub. L. 110–343, Oct. 3, 2008, 122 Stat. 3765, known as the Emergency Economic Sta- bilization Act of 2008, to reflect the probable intent of Congress. For complete classification of division A to the Code, see Short Title note set out under section 5201 of this title and Tables. § 5214. 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 chapter, including— (A) policies implemented by the Secretary and the Office of Financial Stability created under sections 5211 and 5212 of this title, in- cluding the appointment of financial agents, the designation of asset classes to be pur- chased, and plans for the structure of vehi- cles used to purchase troubled assets; and (B) the effect of such actions in assisting American families in preserving home own- ership, stabilizing financial markets, and protecting taxpayers; (2) making recommendations, as appro- priate, to the Secretary regarding use of the authority under this chapter; and (3) reporting any suspected fraud, misrepre- sentation, or malfeasance to the Special In- spector General for the Troubled Assets Relief Program or the Attorney General of the United States, consistent with section 535(b) of title 28. (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 Fi- nance Agency; (4) the Chairman of the Securities Exchange Commission; and (5) the Secretary of Housing and Urban De- velopment. (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 pur- chase authority of the Secretary under this chapter, 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 chapter; (2) in the economic interests of the United States; and (3) consistent with protecting taxpayers, in accordance with section 5223(a) of this title. (f) Credit review committee The Financial Stability Oversight Board may appoint a credit review committee for the pur- pose of evaluating the exercise of the purchase authority provided under this chapter and the assets acquired through the exercise of such au- thority, as the Financial Stability Oversight Board determines appropriate. (g) Reports The Financial Stability Oversight Board shall report to the appropriate committees of Con- gress and the Congressional Oversight Panel es- tablished under section 5233 of this title, not less frequently than quarterly, on the matters de- scribed under subsection (a)(1). (h) Termination The Financial Stability Oversight Board, and its authority under this section, shall terminate Page 1803 TITLE 12—BANKS AND BANKING § 5215 on the expiration of the 15-day period beginning upon the later of— (1) the date that the last troubled asset ac- quired by the Secretary under section 5211 of this title has been sold or transferred out of the ownership or control of the Federal Gov- ernment; or (2) the date of expiration of the last insur- ance contract issued under section 5212 of this title. (Pub. L. 110–343, div. A, title I, § 104, Oct. 3, 2008, 122 Stat. 3770.) Editorial Notes REFERENCES IN TEXT This chapter, referred to in text, was in the original ‘‘this Act’’ and was translated as reading ‘‘this divi- sion’’, meaning div. A of Pub. L. 110–343, Oct. 3, 2008, 122 Stat. 3765, known as the Emergency Economic Sta- bilization Act of 2008, to reflect the probable intent of Congress. For complete classification of division A to the Code, see Short Title note set out under section 5201 of this title and Tables. § 5215. Reports (a) In general Before the expiration of the 60-day period be- ginning on the date of the first exercise of the authority granted in section 5211(a) of this title, or of the first exercise of the authority granted in section 5212 of this title, whichever occurs first, and every 30-day period thereafter, the Secretary shall report to the appropriate com- mittees of Congress, with respect to each such period— (1) an overview of actions taken by the Sec- retary, including the considerations required by section 5213 of this title and the efforts under section 5219 of this title; (2) the actual obligation and expenditure of the funds provided for administrative expenses by section 5228 of this title during such period and the expected expenditure of such funds in the subsequent period; and (3) a detailed financial statement with re- spect to the exercise of authority under this chapter, including— (A) all agreements made or renewed; (B) all insurance contracts entered into pursuant to section 5212 of this title; (C) all transactions occurring during such period, including the types of parties in- volved; (D) the nature of the assets purchased; (E) all projected costs and liabilities; (F) operating expenses, including com- pensation for financial agents; (G) the valuation or pricing method used for each transaction; and (H) a description of the vehicles estab- lished to exercise such authority. (b) Tranche reports to Congress (1) Reports The Secretary shall provide to the appro- priate committees of Congress, at the times specified in paragraph (2), a written report, in- cluding— (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 exer- cise of such authority on the financial sys- tem, 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 chapter that may be necessary to address such chal- lenges. (2) Timing The report required by this subsection shall be submitted not later than 7 days after the date on which commitments to purchase trou- bled assets under the authorities provided in this chapter first reach an aggregate of $50,000,000,000 and not later than 7 days after each $50,000,000,000 interval of such commit- ments is reached thereafter. (c) Regulatory modernization report The Secretary shall review the current state of the financial markets and the regulatory sys- tem and submit a written report to the appro- priate committees of Congress not later than April 30, 2009, analyzing the current state of the regulatory system and its effectiveness at over- seeing the participants in the financial markets, including the over-the-counter swaps market and government-sponsored enterprises, and pro- viding recommendations for improvement, in- cluding— (1) recommendations regarding— (A) whether any participants in the finan- cial markets that are currently outside the regulatory system should become subject to the regulatory system; and (B) enhancement of the clearing and set- tlement of over-the-counter swaps; and (2) the rationale underlying such rec- ommendations. (d) Sharing of information Any report required under this section shall also be submitted to the Congressional Over- sight Panel established under section 5233 of this title. (e) Sunset The reporting requirements under this section shall terminate on the later of— (1) the date that the last troubled asset ac- quired by the Secretary under section 5211 of this title has been sold or transferred out of the ownership or control of the Federal Gov- ernment; or (2) the date of expiration of the last insur- ance contract issued under section 5212 of this title. (Pub. L. 110–343, div. A, title I, § 105, Oct. 3, 2008, 122 Stat. 3771.) Editorial Notes REFERENCES IN TEXT This chapter, referred to in subsecs. (a)(3) and (b)(1)(F), (2), was in the original ‘‘this Act’’ and was