As of 12:20 p.m. today this bill has failed to pass the House of Representatives. For general information below is a summary of the Act.
Jay Thompson, the Phoenix Real Estate Guy, posted the entire draft of the Act on his site. It is 110 pages.
Follow the link to The Bail Out Draft
SUMMARY OF THE “EMERGENCY ECONOMIC STABILIZATION ACT OF 2008”
I. Stabilizing the Economy
The Emergency Economic Stabilization Act of 2008
(EESA) 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 for working families,
small businesses, and other companies to access credit,
which is vital to a strong a nd stable economy.
EESA also establishes a program that would allow
companies to insure their troubled assets.
II. Homeownership Preservation
EESA requires the Treasury to modify troubled loans –
many the result of predatory lending practices – 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.
III. Taxpayer Protection
Taxpayers should not be expected to pay for Wall Street’s
mistakes. The legislation 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 legislation also requires the President
to submit legislation that would cover any losses to
taxpayers resulting from this program from financial
IV. No Windfalls for Executives
Executives who made bad decisions should not be allowed to
dump their bad assets on the government, and then walk away
with millions of dollars in bonuses. In order to participate in this
program, companies will lose certain tax benefits and, in some
cases, must limit executive pay. In addition, the bill limits
“golden parachutes” and requires that unearned bonuses
V. Strong Oversight
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. EESA also establishes an Oversight
Board so that the Treasury cannot act in an arbitrary manner.
It also establishes a special inspector general to protect
against waste, fraud and abuse