The public comment period for this legislation has ended.

Treasury's Legislative Proposal From Treasury Department for Authority to Buy Mortgage-Related Assets

13 section comments

Title I - Authorizing the Treasury Department to Buy Mortgage-Related Assets

Sec. 2. Purchases of Mortgage-Related Assets.

  1. Authority to Purchase.The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States.

  2. 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:

    1. appointing such employees as may be required to carry out the authorities in this Act and defining their duties;

    2. entering into contracts, including contracts for services authorized by section 3109 of title 5, United States Code, without regard to any other provision of law regarding public contracts;

    3. designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;

    4. establishing vehicles that are authorized, subject to supervision by the Secretary, to purchase mortgage-related assets and issue obligations; and

    5. issuing such regulations and other guidance as may be necessary or appropriate to define terms or carry out the authorities of this Act.

General Comments on Treasury's Legislative Proposal From Treasury Department for Authority to Buy Mortgage-Related Assets

Lee Richards on September 22, 2008

Section 2 b2: Service contracts should adhere to all pertinent laws, i.e. no "no bid" contracts, no "no supervision" contracts, etc., as have been used to disastrous effect in Iraq.

Section 2 b3: Designating private financial institutions as "financial agents of the Government" must be subject to approvals beforehand and to Congressional review. Such designations must also have built-in termination, renewable only with Congressional approval.

Section 2 b4: Vehicles established by the Treasury Secretary must not circumvent existing laws and should be subject to Congressional oversight.

Are you Kidding Me on September 22, 2008

I'm sorry, I really am unable to believe we are doing this. The first response should have instantly been. Heeeeellllll NO! I guess that's why they tried to scare them so much so their brains weren't working. Maybe now they start to wake up. Please!!!

Karl on September 23, 2008

Let me get this straight: a bunch of overpaid investors do risky things, and simply because so many of them did so many risky things we have to bail them out? And, because so many Americans overextended themselves and bit off more than they could chew, we get to pay for their irresponsibility? How about bailing me out? I've been unemployed for nearly a year, but have kept my mortgage payments up to date by dipping into my IRA. I'm acting responsibly, but still get to pay for those who acted otherwise.

zenkat on September 23, 2008

2(b)2: While the Secretary is busy handing out $700 billion to his friends on Wall Street, he will be required to follow ALL of the laws of the good ol' US-of-A, including open bidding and review processes.

2(b)3: If the Secretary finds it necessary to nationalize any financial institution, he will assure that the American taxpayer is protected by seeking equity positions and/or debt payback provisions that assure that any future profits of the financial institution are used to payback the initial taxpayer expenditures, including a fair rate of return.

Anne on September 23, 2008

Actually, this whole document needs to be scrapped. But if someone doesn't so say and mark up its most egregious contents, it might actually carry some undeserved weight in the final legislation. IMO the Treasury should not be writing self-serving bills on faux-crisis timeline like the one Sec Paulson tried to float over the weekend, giving Treas unlimited money and unlimited power, without oversight or consequences for screwing up things worse than they already are. Here's a novel approach: come to the peoples' representatives with the problem in a timely manner and let our representatives craft the solution. I call this concept "representative democracy" and was under the impression it was a foundation of our govt.

2.b.2 Scrap the authorization to enter into contracts that might be illegal under other contract laws,to avoid crazy legal entanglements down the road.

DOK on September 23, 2008

My additions, tongue only slightly in cheek for some:

2.(b)(1)(a) Employees or agents authorized, directed or otherwise caused to act under the authority of this act shall not be compensated for their services in any tangible form excepting US dollars drawn from the usual government payroll accounts. No such agent as above shall be provided compensation under this act in excess of $5,000 per month or totaling more than $120,000.

2.(b)(1)(b) All compensation to be dispensed to agents as defined in 2.(b)(1)(a) shall be publicly listed on the Secretary's website a minimum of 14 days prior to compensation being made. The listing shall consist of the amount of compensation and the identifier of the agent. After compensation is made related listings shall be updated to reflect the amount of the compensation and the date of remittance.

2.(b)(1)(c)Compensation listings as described in 2.(b)(1)(b) identifying nonhuman agents (including but not limited to corporations, trusts, committees, departments, foreign governments) shall include hyperlinks to a web page on the Secretary's website describing in detail the nature of the agent, and the identities and public contact information for the human persons who direct the actions of the agent.

2.(b)(1)(d)Any compensation paid under the authority of this Act which is not in compliance with 2.(b)(1)(a), 2.(b)(1)(b) and 2.(b)(1)(c) shall be deducted from the compensation paid to the Secretary and no further bonus, gift, adjustment, or income tax refund beyond the Secretary's base wage shall be paid or owed to the Secretary for a period of 2 years from the date the offending compensation payment is made.

2.(b)(6)(a) No action, regulation, authority, contract, agreement, definition or designation (herein, 'instrument') initiated, created, compelled, implied or hinted at by the Secretary or agents thereof under the authorities granted by this act shall exist for a term exceeding 30 days.

DOK on September 23, 2008

2.(b)(6)(b)The secretary may renew previous such instruments at his discretion by, and only by, physically signing, with a pen, each individual page of a document affirming one and only one such instrument, where said signature consists of the Secretaries full legal name and the date of signing. Six (6) witnesses who are required to be present at the signing must then also sign said document in reverse alphabetical order of the second letter of the signatory's middle name. In such case that the signatory does not have a middle name, the Secretary shall assign the signatory a nickname in the form of "the ".

2.(b)(6)(c) Witnesses to the signing of documents described in 2.(b)(6)(b) may not be compensated for their services, excepting that the Secretary may personally shake their hand and purchase one (1) beer per signatory, to be consumed by the signatory and paid for from his personal funds.

2.(b)(6)(d) Any instrument (see 2.(b)(6)(a)) initiated, created, modified or compelled to be acted upon shall be publicly listed and described on the Secretary's website and the RSS feed for the website updated to announce the availability of the listing. The Secretary may also chose to Twitter the availability of significant new listings. Such listing and announcements shall be made no less than 24 hours before they come into effect.

2.(b)(7) No agency, including but not limited to: the Secretary, Congress, the President or any court of law; shall create actions, regulations or authorities with the power to nullify, modify or subvert 2.(b)(6).

2.(b)(8)(a) The holder of any parcel of land for which any mortgage upon or the terms of the mortgage upon has ever been purchased, modified, or caused to be sold, transferred, modified or otherwise acted upon under the authorities granted by this act shall have unrevocable immunity from compelled sale or other deprivation of use of said parcel through the principle of eminent domain, until the year 2100 has passed. This immunity shall remain in effect independent of the modification or revocation of this act.

2.(b)(8)(b)Clause 2.(b)(8)(a) shall not be interpreted so as to prohibit the creation of easements for the purpose of placement and access to power, water, sewer or telecommunications infrastructure, or for the purpose of access to adjacent land.

2(b)(5)(a) The Secretary shall not issue regulations, guidance or definitions that serve to modify, nullify, circumvent or otherwise subvert the requirements of this Act.

Don on September 23, 2008

2(a) Authority to Purchase.The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions that will repay taxpayers before any and all other parties , mortgage-related assets from any financial institution having its headquarters in the United States.

Ryan on September 25, 2008

Too many rules, if Paulson is really going to take care of us, sorry 'the problem', then this could be written like this:

a. Authority to Purchase. The Secretary can do whatever he wants, whenever he wants, however he wants. Please don't ask questions.

Look at how much money we are saving, this would fit on one piece of paper, I bet the old rules took at least two. Now the bailout is only $699,999,999,999.99, excluding interest of course.

Jim on September 28, 2008

What exactly happens to the failed mortgages? Maybe I missed it, but is the US Treasury going to become a collection agency with federal authority to recover individual home owner defaults? Do we want another arm of the IRS? I still feel strongly that centralized government, in any form, is wrong. Let the market do what the market does.

Tony Mallen Perth Australia on September 30, 2008

This problem has been unfolding since before the New Year and especially since May/June. When the US sneezes we here normally get a cold. In this instance our red light antenna went up and most of us went for fixed deposits with our four Banks with AA+ rating based on the 70% deposits to 30% property/shares/trusts ratio and we watch it all unfold. You are right not to trust your White house whose veracity is questionable. This whole affair has been drafted with indecent haste. It should be debated and restructured in your Congress on the basis of the very good comments put forward by the folk on this site. 1929 was the precursor of a war which started in 1939(42) for the US. Sectional interest should be shelved to get it right. First cab off the rank should be the Mortgage related assets which relate to the traumatic loss of residence by ordinary people who were hit by interest rate rises. Bail out the mortgagees first.