PRIA, Government Policy, Made Personal

Summary

Allows the Secretary of the Treasury to set up the Troubled Asset Relief Program (TARP) to buy troubled assets or promise to buy them from any financial institution. The program must follow the chapter’s rules and the policies the Secretary creates. The Secretary must run TARP through an Office of Financial Stability inside the Treasury, led by an Assistant Secretary appointed by the President and confirmed by the Senate (an interim assistant can be named by the Secretary). The Secretary must consult the Federal Reserve Board, the FDIC, the Comptroller of the Currency, the Office of Thrift Supervision, the National Credit Union Administration, and the Secretary of Housing and Urban Development. The Secretary can hire staff, sign contracts, name financial firms as government agents, create supervised entities to buy, hold, and sell troubled assets, and issue rules and guidance. Before the earlier of 2 business days after the first purchase or 45 days after October 3, 2008, the Secretary must publish guidelines on how purchases will work, how assets are priced and valued, how asset managers are chosen, and what assets qualify. The Secretary must try to prevent unfair profit by sellers (for example, stopping sales to the government at more than the seller paid). That prevention does not apply to assets from a merger or acquisition, or from a financial institution in conservatorship, receivership, or that has filed for bankruptcy under title 11.

Title 12, §5211

Banks and Banking, Source: USLM XML via OLRC

(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 chapter 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 chapter 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)Omitted

(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, the Chairman of the National Credit Union Administration Board, 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 chapter, including, without limitation, the following:

(1)The Secretary shall have direct hiring authority with respect to the appointment of employees to administer this chapter.

(2)Entering into contracts, including contracts for services authorized by section 3109 of title 5.

(3)Designating financial institutions as financial agents of the Federal Government, and such institutions shall perform all such reasonable duties related to this chapter 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 chapter.

(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 October 3, 2008, 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 chapter, 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.

Notes & Related Subsidiaries

Editorial Notes

References in Text

This chapter, referred to in subsecs. (a)(1), (2), (c), and (e), was in the original “this Act” and was translated as reading “this division”, meaning div. A of Pub. L. 110–343, Oct. 3, 2008, 122 Stat. 3765, known as the Emergency Economic Stabilization 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. Codification Section is comprised of section 101 of div. A of Pub. L. 110–343. Subsec. (a)(3)(B) of section 101 of div. A of Pub. L. 110–343 amended section 5315 of Title 5, Government Organization and Employees, and section 301 of Title 31, Money and Finance.

§5211 Purchases of Troubled Assets