Thursday, September 25, 2008

Text of Barney Frank's proposed bailout legislation

From the website of the House Committee on Financial Services, here is the beginning of Rep. Barney Frank's proposed legislation. It sounds pretty reasonable to me, with many of the provisos mentioned by candidates and the press included.

2 (a) FINDINGS.—The Congress finds that— (1) the current United States financial crisis necessitates immediate action to stabilize the financial system, restore liquidity to financial institutions and the capital markets, protect savings and pensions, and preserve the availability of credit for individuals and businesses; (2) actions taken to protect consumers and minimize mortgage foreclosures are equally important objectives in promoting a resolution to this crisis and will minimize any losses and maximize the ultimate return to the taxpayer on assets purchased under this program; and (3) existing financial regulatory structures have clearly failed either to prevent the current crisis or to protect United States consumers and investors,
4 and comprehensive regulatory reform is required to restore confidence in financial markets and institutions going forward.

(b) PURPOSES.— The purposes of this Act are— (1) to immediately provide authority and facilities that the Secretary of the Treasury can use to restore liquidity and stability to United States financial markets; (2) to ensure that this authority and these facilities are used in a manner that minimizes mortgage foreclosures, maximizes the ability of United States homeowners to remain in their homes, protects individual investors, including retirement fund
investors, and minimizes initial costs and maximizes overall returns to United States taxpayers;
(3) to review, on an expedited basis, the ways that deficiencies and gaps in the current financial
regulatory system contributed to the current crisis; and (4) to act as quickly as possible to comprehensively restructure the United States financial regulatory system to protect consumers and homeowners, reform the mortgage lending and securitization process, enhance the transparency and fairness in financial markets, and ensure the future stability of the
financial system.

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