Text: S.386 — 111th Congress (2009-2010)All Information (Except Text)

Text available as:

Shown Here:
Public Law No: 111-21 (05/20/2009)

 
[111th Congress Public Law 21]
[From the U.S. Government Printing Office]



[[Page 123 STAT. 1616]]

Public Law 111-21
111th Congress

                                 An Act


 
  To improve enforcement of mortgage fraud, securities and commodities 
fraud, financial institution fraud, and other frauds related to Federal 
assistance and relief programs, for the recovery of funds lost to these 
   frauds, and for other purposes. <<NOTE: May 20, 2009 -  [S. 386]>> 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, <<NOTE: Fraud 
Enforcement and Recovery Act of 2009.>> 
SECTION 1. <<NOTE: 18 USC 1 note.>> SHORT TITLE.

    This Act may be cited as the ``Fraud Enforcement and Recovery Act of 
2009'' or ``FERA''.
SEC. 2. AMENDMENTS TO IMPROVE MORTGAGE, SECURITIES, COMMODITIES, 
                    AND FINANCIAL FRAUD RECOVERY AND ENFORCEMENT.

    (a) Definition of Financial Institution Amended To Include Mortgage 
Lending Business.--Section 20 of title 18, United States Code, is 
amended--
            (1) in paragraph (8), by striking ``or'' after the 
        semicolon;
            (2) in paragraph (9), by striking the period and inserting 
        ``; or''; and
            (3) by inserting at the end the following:
            ``(10) a mortgage lending business (as defined in section 27 
        of this title) or any person or entity that makes in whole or in 
        part a federally related mortgage loan as defined in section 3 
        of the Real Estate Settlement Procedures Act of 1974.''.

    (b) Mortgage Lending Business Defined.--
            (1) In general.--Chapter 1 of title 18, United States Code, 
        is amended by inserting after section 26 the following:
``Sec. 27. Mortgage lending business defined

    ``In this title, the term `mortgage lending business' means an 
organization which finances or refinances any debt secured by an 
interest in real estate, including private mortgage companies and any 
subsidiaries of such organizations, and whose activities affect 
interstate or foreign commerce.''.
            (2) Chapter analysis.--The chapter analysis for chapter 1 of 
        title 18, United States Code, is amended by adding at the end 
        the following:

``27. Mortgage lending business defined.''.

    (c) False Statements in Mortgage Applications Amended To Include 
False Statements by Mortgage Brokers and Agents of Mortgage Lending 
Businesses.--Section 1014 of title 18, United States Code, is amended 
by--

[[Page 123 STAT. 1617]]

            (1) striking ``or'' after ``the International Banking Act of 
        1978),''; and
            (2) inserting after ``section 25(a) of the Federal Reserve 
        Act'' the following: ``, or a mortgage lending business, or any 
        person or entity that makes in whole or in part a federally 
        related mortgage loan as defined in section 3 of the Real Estate 
        Settlement Procedures Act of 1974''.

    (d) Major Fraud Against the Government Amended To Include Economic 
Relief and Troubled Asset Relief Program Funds.--Section 1031(a) of 
title 18, United States Code, is amended by--
            (1) inserting after ``or promises, in'' the following: ``any 
        grant, contract, subcontract, subsidy, loan, guarantee, 
        insurance, or other form of Federal assistance, including 
        through the Troubled Asset Relief Program, an economic stimulus, 
        recovery or rescue plan provided by the Government, or the 
        Government's purchase of any troubled asset as defined in the 
        Emergency Economic Stabilization Act of 2008, or in'';
            (2) striking ``the contract, subcontract'' and inserting 
        ``such grant, contract, subcontract, subsidy, loan, guarantee, 
        insurance, or other form of Federal assistance''; and
            (3) striking ``for such property or services''.

    (e) Securities Fraud Amended To Include Fraud Involving Options and 
Futures in Commodities.--
            (1) In general.--Section 1348 of title 18, United States 
        Code, is amended--
                    (A) in the caption, by inserting ``and commodities'' 
                after ``Securities'';
                    (B) in paragraph (1), by inserting ``any commodity 
                for future delivery, or any option on a commodity for 
                future delivery, or'' after ``any person in connection 
                with''; and
                    (C) in paragraph (2), by inserting ``any commodity 
                for future delivery, or any option on a commodity for 
                future delivery, or'' after ``in connection with the 
                purchase or sale of''.
            (2) Chapter analysis.--The item for section 1348 in the 
        chapter analysis for chapter 63 of title 18, United States Code, 
        is amended by inserting ``and commodities'' after 
        ``Securities''.

    (f) Money Laundering Amended To Define Proceeds of Specified 
Unlawful Activity.--
            (1) Money laundering.--Section 1956(c) of title 18, United 
        States Code, is amended--
                    (A) in paragraph (8), by striking the period and 
                inserting ``; and''; and
                    (B) by inserting at the end the following:
            ``(9) the term `proceeds' means any property derived from or 
        obtained or retained, directly or indirectly, through some form 
        of unlawful activity, including the gross receipts of such 
        activity.''.
            (2) Monetary transactions.--Section 1957(f) of title 18, 
        United States Code, is amended by striking paragraph (3) and 
        inserting the following:
            ``(3) the terms `specified unlawful activity' and `proceeds' 
        shall have the meaning given those terms in section 1956 of this 
        title.''.

    (g) Sense of the Congress and Report Concerning Required Approval 
for Merger Cases.--

[[Page 123 STAT. 1618]]

            (1) Sense of congress.--It is the sense of the Congress that 
        no prosecution of an offense under section 1956 or 1957 of title 
        18, United States Code, should be undertaken in combination with 
        the prosecution of any other offense, without prior approval of 
        the Attorney General, the Deputy Attorney General, the Assistant 
        Attorney General in charge of the Criminal Division, a Deputy 
        Assistant Attorney General in the Criminal Division, or the 
        relevant United States Attorney, if the conduct to be charged as 
        ``specified unlawful activity'' in connection with the offense 
        under section 1956 or 1957 is so closely connected with the 
        conduct to be charged as the other offense that there is no 
        clear delineation between the two offenses.
            (2) Report.--One year after the date of the enactment of 
        this Act, and at the end of each of the four succeeding one-year 
        periods, the Attorney General shall report to the House and 
        Senate Committees on the Judiciary on efforts undertaken by the 
        Department of Justice to ensure that the review and approval 
        described in paragraph (1) takes place in all appropriate cases. 
        The report shall include the following:
                    (A) The number of prosecutions described in 
                paragraph (1) that were undertaken during the previous 
                one-year period after prior approval by an official 
                described in paragraph (1), classified by type of 
                offense and by the approving official.
                    (B) The number of prosecutions described in 
                paragraph (1) that were undertaken during the previous 
                one-year period without such prior approval, classified 
                by type of offense, and the reasons why such prior 
                approval was not obtained.
                    (C) The number of times during the previous year in 
                which an approval described in paragraph (1) was denied.
SEC. 3. AUTHORIZATION OF ADDITIONAL FUNDING TO COMBAT MORTGAGE 
                    FRAUD, SECURITIES AND COMMODITIES FRAUD, AND 
                    OTHER FRAUDS INVOLVING FEDERAL ECONOMIC 
                    ASSISTANCE.

    (a) Authorization of Additional Appropriations for the Department of 
Justice.--
            (1) In general.--There is authorized to be appropriated to 
        the Attorney General, $165,000,000 for each of the fiscal years 
        2010 and 2011, for the purposes of investigations and 
        prosecutions and civil and administrative proceedings involving 
        Federal assistance programs and financial institutions, 
        including financial institutions to which this Act and 
        amendments made by this Act apply.
            (2) Allocations.--With respect to fiscal years 2010 and 
        2011, the amounts authorized to be appropriated under paragraph 
        (1) shall be allocated as follows:
                    (A) Federal Bureau of Investigation: $75,000,000 for 
                fiscal year 2010 and $65,000,000 for fiscal year 2011, 
                an appropriate percentage of which amounts shall be used 
                to investigate mortgage fraud.
                    (B) The offices of the United States Attorneys: 
                $50,000,000 for each fiscal year.

[[Page 123 STAT. 1619]]

                    (C) The criminal division of the Department of 
                Justice: $20,000,000 for each fiscal year.
                    (D) The civil division of the Department of Justice: 
                $15,000,000 for each fiscal year.
                    (E) The tax division of the Department of Justice: 
                $5,000,000 for each fiscal year.

    (b) Authorization of Additional Appropriations for the Postal 
Inspection Service.--There is authorized to be appropriated to the 
Postal Inspection Service of the United States Postal Service, 
$30,000,000 for each of the fiscal years 2010 and 2011 for 
investigations involving Federal assistance programs and financial 
institutions, including financial institutions to which this Act and 
amendments made by this Act apply.
    (c) Authorization of Additional Appropriations for the Inspector 
General for the Department of Housing and Urban Development.--There is 
authorized to be appropriated to the Inspector General of the Department 
of Housing and Urban Development, $30,000,000 for each of the fiscal 
years 2010 and 2011 for investigations involving Federal assistance 
programs and financial institutions, including financial institutions to 
which this Act and amendments made by this Act apply.
    (d) Authorization of Additional Appropriations for the United States 
Secret Service.--There is authorized to be appropriated to the United 
States Secret Service of the Department of Homeland Security, 
$20,000,000 for each of the fiscal years 2010 and 2011 for 
investigations involving Federal assistance programs and financial 
institutions, including financial institutions to which this Act and 
amendments made by this Act apply.
    (e) Authorization of Additional Appropriations for the Securities 
and Exchange Commission.--
            (1) In general.--There is authorized to be appropriated to 
        the Securities and Exchange Commission, $20,000,000 for each of 
        the fiscal years 2010 and 2011 for investigations and 
        enforcement proceedings involving financial institutions, 
        including financial institutions to which this Act and 
        amendments made by this Act apply.
            (2) Inspector general.--There is authorized to be 
        appropriated to the Securities and Exchange Commission, 
        $1,000,000 for each of the fiscal years 2010 and 2011 for the 
        salaries and expenses of the Office of the Inspector General of 
        the Securities and Exchange Commission.

    (f) Use of Funds.--
            (1) In general.--The funds appropriated pursuant to 
        authorization under this section shall be limited to covering 
        the costs of each listed agency or department for investigating 
        possible criminal, civil, or administrative violations and for 
        criminal, civil, or administrative proceedings involving 
        financial crimes and crimes against Federal assistance programs, 
        including mortgage fraud, securities and commodities fraud, 
        financial institution fraud, and other frauds related to Federal 
        assistance and relief programs.
            (2) Funds for training and research.--Funds authorized to be 
        appropriated under this section may be used and expended for 
        programs for improving the detection, investigation, and 
        prosecution of economic crime including financial fraud and 
        mortgage fraud. Funds allocated under this section may be 
        allocated to programs which assist State and local criminal

[[Page 123 STAT. 1620]]

        justice agencies to develop, establish, and maintain 
        intelligence-focused policing strategies and related information 
        sharing; provide training and investigative support services to 
        State and local criminal justice agencies to provide such 
        agencies with skills and resources needed to investigate and 
        prosecute such criminal activities and related criminal 
        activities; provide research support, establish partnerships, 
        and provide other resources to aid State and local criminal 
        justice agencies to prevent, investigate, and prosecute such 
        criminal activities and related problems; provide information 
        and research to the general public to facilitate the prevention 
        of such criminal activities; and any other programs specified by 
        the Attorney General as furthering the purposes of this Act.

    (g) Additional Nature of Authorizations; Availability.--The amounts 
authorized under this section are in addition to amounts otherwise 
authorized in other Acts and shall remain available until expended.
    (h) Report to Congress.--Following the final expenditure of all 
funds appropriated pursuant to authorization under this section, the 
Attorney General, in consultation with the United States Postal 
Inspection Service, the Inspector General for the Department of Housing 
and Urban Development, the Secretary of Homeland Security, and the 
Commissioner of the Securities and Exchange Commission, shall submit a 
report to Congress identifying--
            (1) the amounts expended under each of subsections (a), (b), 
        (c), (d), and (e) and a certification of compliance with the 
        requirements listed in subsection (f); and
            (2) the amounts recovered as a result of criminal or civil 
        restitution, fines, penalties, and other monetary recoveries 
        resulting from criminal, civil, or administrative proceedings 
        and settlements undertaken with funds authorized by this Act.
SEC. 4. CLARIFICATIONS TO THE FALSE CLAIMS ACT TO REFLECT THE 
                    ORIGINAL INTENT OF THE LAW.

    (a) Clarification of the False Claims Act.--Section 3729 of title 
31, United States Code, is amended--
            (1) by striking subsection (a) and inserting the following:

    ``(a) Liability for Certain Acts.--
            ``(1) In general.--Subject to paragraph (2), any person 
        who--
                    ``(A) knowingly presents, or causes to be presented, 
                a false or fraudulent claim for payment or approval;
                    ``(B) knowingly makes, uses, or causes to be made or 
                used, a false record or statement material to a false or 
                fraudulent claim;
                    ``(C) conspires to commit a violation of 
                subparagraph (A), (B), (D), (E), (F), or (G);
                    ``(D) has possession, custody, or control of 
                property or money used, or to be used, by the Government 
                and knowingly delivers, or causes to be delivered, less 
                than all of that money or property;
                    ``(E) is authorized to make or deliver a document 
                certifying receipt of property used, or to be used, by 
                the Government and, intending to defraud the Government, 
                makes or delivers the receipt without completely knowing 
                that the information on the receipt is true;

[[Page 123 STAT. 1621]]

                    ``(F) knowingly buys, or receives as a pledge of an 
                obligation or debt, public property from an officer or 
                employee of the Government, or a member of the Armed 
                Forces, who lawfully may not sell or pledge property; or
                    ``(G) knowingly makes, uses, or causes to be made or 
                used, a false record or statement material to an 
                obligation to pay or transmit money or property to the 
                Government, or knowingly conceals or knowingly and 
                improperly avoids or decreases an obligation to pay or 
                transmit money or property to the Government,
        is liable to the United States Government for a civil penalty of 
        not less than $5,000 and not more than $10,000, as adjusted by 
        the Federal Civil Penalties Inflation Adjustment Act of 1990 (28 
        U.S.C. 2461 note; Public Law 104-410), plus 3 times the amount 
        of damages which the Government sustains because of the act of 
        that person.
            ``(2) Reduced damages.--If the court finds that--
                    ``(A) the person committing the violation of this 
                subsection furnished officials of the United States 
                responsible for investigating false claims violations 
                with all information known to such person about the 
                violation within 30 days after the date on which the 
                defendant first obtained the information;
                    ``(B) such person fully cooperated with any 
                Government investigation of such violation; and
                    ``(C) at the time such person furnished the United 
                States with the information about the violation, no 
                criminal prosecution, civil action, or administrative 
                action had commenced under this title with respect to 
                such violation, and the person did not have actual 
                knowledge of the existence of an investigation into such 
                violation,
        the court may assess not less than 2 times the amount of damages 
        which the Government sustains because of the act of that person.
            ``(3) Costs of civil actions.--A person violating this 
        subsection shall also be liable to the United States Government 
        for the costs of a civil action brought to recover any such 
        penalty or damages.'';
            (2) by striking subsections (b) and (c) and inserting the 
        following:

    ``(b) Definitions.--For purposes of this section--
            ``(1) the terms `knowing' and `knowingly'--
                    ``(A) mean that a person, with respect to 
                information--
                          ``(i) has actual knowledge of the information;
                          ``(ii) acts in deliberate ignorance of the 
                      truth or falsity of the information; or
                          ``(iii) acts in reckless disregard of the 
                      truth or falsity of the information; and
                    ``(B) require no proof of specific intent to 
                defraud;
            ``(2) the term `claim'--
                    ``(A) means any request or demand, whether under a 
                contract or otherwise, for money or property and whether 
                or not the United States has title to the money or 
                property, that--
                          ``(i) is presented to an officer, employee, or 
                      agent of the United States; or

[[Page 123 STAT. 1622]]

                          ``(ii) is made to a contractor, grantee, or 
                      other recipient, if the money or property is to be 
                      spent or used on the Government's behalf or to 
                      advance a Government program or interest, and if 
                      the United States Government--
                                    ``(I) provides or has provided any 
                                portion of the money or property 
                                requested or demanded; or
                                    ``(II) will reimburse such 
                                contractor, grantee, or other recipient 
                                for any portion of the money or property 
                                which is requested or demanded; and
                    ``(B) does not include requests or demands for money 
                or property that the Government has paid to an 
                individual as compensation for Federal employment or as 
                an income subsidy with no restrictions on that 
                individual's use of the money or property;
            ``(3) the term `obligation' means an established duty, 
        whether or not fixed, arising from an express or implied 
        contractual, grantor-grantee, or licensor-licensee relationship, 
        from a fee-based or similar relationship, from statute or 
        regulation, or from the retention of any overpayment; and
            ``(4) the term `material' means having a natural tendency to 
        influence, or be capable of influencing, the payment or receipt 
        of money or property.'';
            (3) by redesignating subsections (d) and (e) as subsections 
        (c) and (d), respectively; and
            (4) in subsection (c), as redesignated, by striking 
        ``subparagraphs (A) through (C) of subsection (a)'' and 
        inserting ``subsection (a)(2)''.

    (b) Intervention by the Government.--Section 3731(b) of title 31, 
United States Code, is amended--
            (1) by redesignating subsection (c) as subsection (d);
            (2) by redesignating subsection (d) as subsection (e); and
            (3) by inserting the new subsection (c):

    ``(c) If the Government elects to intervene and proceed with an 
action brought under 3730(b), the Government may file its own complaint 
or amend the complaint of a person who has brought an action under 
section 3730(b) to clarify or add detail to the claims in which the 
Government is intervening and to add any additional claims with respect 
to which the Government contends it is entitled to relief. For statute 
of limitations purposes, any such Government pleading shall relate back 
to the filing date of the complaint of the person who originally brought 
the action, to the extent that the claim of the Government arises out of 
the conduct, transactions, or occurrences set forth, or attempted to be 
set forth, in the prior complaint of that person.''.
    (c) Civil Investigative Demands.--Section 3733 of title 31, United 
States Code, is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1)--
                          (i) in the matter preceding subparagraph (A)--
                                    (I) by inserting ``, or a designee 
                                (for purposes of this section),'' after 
                                ``Whenever the Attorney General''; and
                                    (II) by striking ``the Attorney 
                                General may, before commencing a civil 
                                proceeding under section 3730 or other 
                                false claims law,'' and inserting ``the

[[Page 123 STAT. 1623]]

                                Attorney General, or a designee, may, 
                                before commencing a civil proceeding 
                                under section 3730(a) or other false 
                                claims law, or making an election under 
                                section 3730(b),''; and
                          (ii) in the matter following subparagraph 
                      (D)--
                                    (I) by striking ``may not delegate'' 
                                and inserting ``may delegate''; and
                                    (II) by adding at the end the 
                                following: ``Any information obtained by 
                                the Attorney General or a designee of 
                                the Attorney General under this section 
                                may be shared with any qui tam relator 
                                if the Attorney General or designee 
                                determine it is necessary as part of any 
                                false claims act investigation.''; and
                    (B) in paragraph (2)(G), by striking the second 
                sentence;
            (2) in subsection (i)(2)--
                    (A) in subparagraph (B), by striking ``, who is 
                authorized for such use under regulations which the 
                Attorney General shall issue''; and
                    (B) in subparagraph (C), by striking ``Disclosure of 
                information to any such other agency shall be allowed 
                only upon application, made by the Attorney General to a 
                United States district court, showing substantial need 
                for the use of the information by such agency in 
                furtherance of its statutory responsibilities.''; and
            (3) in subsection (l)--
                    (A) in paragraph (6), by striking ``and'' after the 
                semicolon;
                    (B) in paragraph (7), by striking the period and 
                inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(8) <<NOTE: Definition.>> the term `official use' means 
        any use that is consistent with the law, and the regulations and 
        policies of the Department of Justice, including use in 
        connection with internal Department of Justice memoranda and 
        reports; communications between the Department of Justice and a 
        Federal, State, or local government agency, or a contractor of a 
        Federal, State, or local government agency, undertaken in 
        furtherance of a Department of Justice investigation or 
        prosecution of a case; interviews of any qui tam relator or 
        other witness; oral examinations; depositions; preparation for 
        and response to civil discovery requests; introduction into the 
        record of a case or proceeding; applications, motions, memoranda 
        and briefs submitted to a court or other tribunal; and 
        communications with Government investigators, auditors, 
        consultants and experts, the counsel of other parties, 
        arbitrators and mediators, concerning an investigation, case or 
        proceeding.''.

    (d) Relief From Retaliatory Actions.--Section 3730(h) of title 31, 
United States Code, is amended to read as follows:
    ``(h) Relief From Retaliatory Actions.--
            ``(1) In general.--Any employee, contractor, or agent shall 
        be entitled to all relief necessary to make that employee, 
        contractor, or agent whole, if that employee, contractor, or 
        agent is discharged, demoted, suspended, threatened, harassed, 
        or in any other manner discriminated against in the terms and 
        conditions of employment because of lawful acts done by the

[[Page 123 STAT. 1624]]

        employee, contractor, or agent on behalf of the employee, 
        contractor, or agent or associated others in furtherance of 
        other efforts to stop 1 or more violations of this subchapter.
            ``(2) Relief.--Relief under paragraph (1) shall include 
        reinstatement with the same seniority status that employee, 
        contractor, or agent would have had but for the discrimination, 
        2 times the amount of back pay, interest on the back pay, and 
        compensation for any special damages sustained as a result of 
        the discrimination, including litigation costs and reasonable 
        attorneys' fees. An action under this subsection may be brought 
        in the appropriate district court of the United States for the 
        relief provided in this subsection.''.

    (e) False Claims Jurisdiction.--Section 3732 of title 31, United 
States Code, is amended by adding at the end the following new 
subsection:
    ``(c) Service <<NOTE: Applicability.>> on State or Local 
Authorities.--With respect to any State or local government that is 
named as a co-plaintiff with the United States in an action brought 
under subsection (b), a seal on the action ordered by the court under 
section 3730(b) shall not preclude the Government or the person bringing 
the action from serving the complaint, any other pleadings, or the 
written disclosure of substantially all material evidence and 
information possessed by the person bringing the action on the law 
enforcement authorities that are authorized under the law of that State 
or local government to investigate and prosecute such actions on behalf 
of such governments, except that such seal applies to the law 
enforcement authorities so served to the same extent as the seal applies 
to other parties in the action.''.

    (f) Effective <<NOTE: 31 USC 3729 note.>> Date and Application.--The 
amendments made by this section shall take effect on the date of 
enactment of this Act and shall apply to conduct on or after the date of 
enactment, except that--
            (1) subparagraph (B) of section 3729(a)(1) of title 31, 
        United States Code, as added by subsection (a)(1), shall take 
        effect as if enacted on June 7, 2008, and apply to all claims 
        under the False Claims Act (31 U.S.C. 3729 et seq.) that are 
        pending on or after that date; and
            (2) section 3731(b) of title 31, as amended by subsection 
        (b); section 3733, of title 31, as amended by subsection (c); 
        and section 3732 of title 31, as amended by subsection (e); 
        shall apply to cases pending on the date of enactment.
SEC. 5. FINANCIAL CRISIS INQUIRY COMMISSION.

    (a) Establishment of Commission.--There is established in the 
legislative branch the Financial Crisis Inquiry Commission (in this 
section referred to as the ``Commission'') to examine the causes, 
domestic and global, of the current financial and economic crisis in the 
United States.
    (b) Composition of the Commission.--
            (1) Members.--The Commission shall be composed of 10 
        members, of whom--
                    (A) 3 members shall be appointed by the majority 
                leader of the Senate, in consultation with relevant 
                Committees;
                    (B) 3 members shall be appointed by the Speaker of 
                the House of Representatives, in consultation with 
                relevant Committees;

[[Page 123 STAT. 1625]]

                    (C) 2 members shall be appointed by the minority 
                leader of the Senate, in consultation with relevant 
                Committees; and
                    (D) 2 members shall be appointed by the minority 
                leader of the House of Representatives, in consultation 
                with relevant Committees.
            (2) Qualifications; limitation.--
                    (A) In general.--It is the sense of the Congress 
                that individuals appointed to the Commission should be 
                prominent United States citizens with national 
                recognition and significant depth of experience in such 
                fields as banking, regulation of markets, taxation, 
                finance, economics, consumer protection, and housing.
                    (B) Limitation.--No person who is a member of 
                Congress or an officer or employee of the Federal 
                Government or any State or local government may serve as 
                a member of the Commission.
            (3) Chairperson; vice chairperson.--
                    (A) In general.--Subject to the requirements of 
                subparagraph (B), the Chairperson of the Commission 
                shall be selected jointly by the Majority Leader of the 
                Senate and the Speaker of the House of Representatives, 
                and the Vice Chairperson shall be selected jointly by 
                the Minority Leader of the Senate and the Minority 
                Leader of the House of Representatives.
                    (B) Political party affiliation.--The Chairperson 
                and Vice Chairperson of the Commission may not be from 
                the same political party.
            (4) Meetings, quorum; vacancies.--
                    (A) Meetings.--
                          (i) Initial meeting.--The initial meeting of 
                      the Commission shall be as soon as possible after 
                      a quorum of members have been appointed.
                          (ii) Subsequent meetings.--After the initial 
                      meeting of the Commission, the Commission shall 
                      meet upon the call of the Chairperson or a 
                      majority of its members.
                    (B) Quorum.--6 members of the Commission shall 
                constitute a quorum.
                    (C) Vacancies.--Any vacancy on the Commission 
                shall--
                          (i) not affect the powers of the Commission; 
                      and
                          (ii) be filled in the same manner in which the 
                      original appointment was made.

    (c) Functions of the Commission.--The functions of the Commission 
are--
            (1) to examine the causes of the current financial and 
        economic crisis in the United States, specifically the role of--
                    (A) fraud and abuse in the financial sector, 
                including fraud and abuse towards consumers in the 
                mortgage sector;
                    (B) Federal and State financial regulators, 
                including the extent to which they enforced, or failed 
                to enforce statutory, regulatory, or supervisory 
                requirements;
                    (C) the global imbalance of savings, international 
                capital flows, and fiscal imbalances of various 
                governments;
                    (D) monetary policy and the availability and terms 
                of credit;

[[Page 123 STAT. 1626]]

                    (E) accounting practices, including, mark-to-market 
                and fair value rules, and treatment of off-balance sheet 
                vehicles;
                    (F) tax treatment of financial products and 
                investments;
                    (G) capital requirements and regulations on leverage 
                and liquidity, including the capital structures of 
                regulated and non-regulated financial entities;
                    (H) credit rating agencies in the financial system, 
                including, reliance on credit ratings by financial 
                institutions and Federal financial regulators, the use 
                of credit ratings in financial regulation, and the use 
                of credit ratings in the securitization markets;
                    (I) lending practices and securitization, including 
                the originate-to-distribute model for extending credit 
                and transferring risk;
                    (J) affiliations between insured depository 
                institutions and securities, insurance, and other types 
                of nonbanking companies;
                    (K) the concept that certain institutions are ``too-
                big-to-fail'' and its impact on market expectations;
                    (L) corporate governance, including the impact of 
                company conversions from partnerships to corporations;
                    (M) compensation structures;
                    (N) changes in compensation for employees of 
                financial companies, as compared to compensation for 
                others with similar skill sets in the labor market;
                    (O) the legal and regulatory structure of the United 
                States housing market;
                    (P) derivatives and unregulated financial products 
                and practices, including credit default swaps;
                    (Q) short-selling;
                    (R) financial institution reliance on numerical 
                models, including risk models and credit ratings;
                    (S) the legal and regulatory structure governing 
                financial institutions, including the extent to which 
                the structure creates the opportunity for financial 
                institutions to engage in regulatory arbitrage;
                    (T) the legal and regulatory structure governing 
                investor and mortgagor protection;
                    (U) financial institutions and government-sponsored 
                enterprises; and
                    (V) the quality of due diligence undertaken by 
                financial institutions;
            (2) to examine the causes of the collapse of each major 
        financial institution that failed (including institutions that 
        were acquired to prevent their failure) or was likely to have 
        failed if not for the receipt of exceptional Government 
        assistance from the Secretary of the Treasury during the period 
        beginning in August 2007 through April 2009;
            (3) to submit a report under subsection (h);
            (4) to refer to the Attorney General of the United States 
        and any appropriate State attorney general any person that the 
        Commission finds may have violated the laws of the United States 
        in relation to such crisis; and

[[Page 123 STAT. 1627]]

            (5) to build upon the work of other entities, and avoid 
        unnecessary duplication, by reviewing the record of the 
        Committee on Banking, Housing, and Urban Affairs of the Senate, 
        the Committee on Financial Services of the House of 
        Representatives, other congressional committees, the Government 
        Accountability Office, other legislative panels, and any other 
        department, agency, bureau, board, commission, office, 
        independent establishment, or instrumentality of the United 
        States (to the fullest extent permitted by law) with respect to 
        the current financial and economic crisis.

    (d) Powers of the Commission.--
            (1) Hearings and evidence.--The Commission may, for purposes 
        of carrying out this section--
                    (A) hold hearings, sit and act at times and places, 
                take testimony, receive evidence, and administer oaths; 
                and
                    (B) require, by subpoena or otherwise, the 
                attendance and testimony of witnesses and the production 
                of books, records, correspondence, memoranda, papers, 
                and documents.
            (2) Subpoenas.--
                    (A) Service.--Subpoenas issued under paragraph 
                (1)(B) may be served by any person designated by the 
                Commission.
                    (B) Enforcement.--
                          (i) In general.--In the case of contumacy or 
                      failure to obey a subpoena issued under paragraph 
                      (1)(B), the United States district court for the 
                      judicial district in which the subpoenaed person 
                      resides, is served, or may be found, or where the 
                      subpoena is returnable, may issue an order 
                      requiring such person to appear at any designated 
                      place to testify or to produce documentary or 
                      other evidence. Any failure to obey the order of 
                      the court may be punished by the court as a 
                      contempt of that court.
                          (ii) Additional enforcement.--
                      Sections <<NOTE: Applicability.>> 102 through 104 
                      of the Revised Statutes of the United States (2 
                      U.S.C. 192 through 194) shall apply in the case of 
                      any failure of any witness to comply with any 
                      subpoena or to testify when summoned under the 
                      authority of this section.
                          (iii) Issuance.--A subpoena may be issued 
                      under this subsection only--
                                    (I) by the agreement of the 
                                Chairperson and the Vice Chairperson; or
                                    (II) by the affirmative vote of a 
                                majority of the Commission, including an 
                                affirmative vote of at least one member 
                                appointed under subparagraph (C) or (D) 
                                of subsection (b)(1), a majority being 
                                present.
            (3) Contracting.--The Commission may enter into contracts to 
        enable the Commission to discharge its duties under this 
        section.
            (4) Information from federal agencies and other entities.--
                    (A) In general.--The Commission may secure directly 
                from any department, agency, bureau, board, commission,

[[Page 123 STAT. 1628]]

                office, independent establishment, or instrumentality of 
                the United States any information related to any inquiry 
                of the Commission conducted under this section, 
                including information of a confidential nature (which 
                the Commission shall maintain in a secure manner). Each 
                such department, agency, bureau, board, commission, 
                office, independent establishment, or instrumentality 
                shall furnish such information directly to the 
                Commission upon request.
                    (B) Other entities.--It is the sense of the Congress 
                that the Commission should seek testimony or information 
                from principals and other representatives of government 
                agencies and private entities that were significant 
                participants in the United States and global financial 
                and housing markets during the time period examined by 
                the Commission.
            (5) Administrative support services.--Upon the request of 
        the Commission--
                    (A) the Administrator of General Services shall 
                provide to the Commission, on a reimbursable basis, the 
                administrative support services necessary for the 
                Commission to carry out its responsibilities under this 
                Act; and
                    (B) other Federal departments and agencies may 
                provide to the Commission any administrative support 
                services as may be determined by the head of such 
                department or agency to be advisable and authorized by 
                law.
            (6) Donations of goods and services.--The Commission may 
        accept, use, and dispose of gifts or donations of services or 
        property.
            (7) Postal services.--The Commission may use the United 
        States mails in the same manner and under the same conditions as 
        departments and agencies of the United States.
            (8) Powers of subcommittees, members, and agents.--Any 
        subcommittee, member, or agent of the Commission may, if 
        authorized by the Commission, take any action which the 
        Commission is authorized to take by this section.

    (e) Staff of the Commission.--
            (1) Director.--The Commission shall have a Director who 
        shall be appointed by the Chairperson and the Vice Chairperson, 
        acting jointly.
            (2) Staff.--The Chairperson and the Vice Chairperson may 
        jointly appoint additional personnel, as may be necessary, to 
        enable the Commission to carry out its functions.
            (3) Applicability of certain civil service laws.--The 
        Director and staff of the Commission may be appointed without 
        regard to the provisions of title 5, United States Code, 
        governing appointments in the competitive service, and may be 
        paid without regard to the provisions of chapter 51 and 
        subchapter III of chapter 53 of such title relating to 
        classification and General Schedule pay rates, except that no 
        rate of pay fixed under this paragraph may exceed the equivalent 
        of that payable for a position at level V of the Executive 
        Schedule under section 5316 of title 5, United States Code. Any 
        individual appointed under paragraph (1) or (2) shall be treated 
        as an employee for purposes of chapters 63, 81, 83, 84, 85, 87, 
        89, 89A, 89B, and 90 of that title.
            (4) Detailees.--Any Federal Government employee may be 
        detailed to the Commission without reimbursement from

[[Page 123 STAT. 1629]]

        the Commission, and such detailee shall retain the rights, 
        status, and privileges of his or her regular employment without 
        interruption.
            (5) Consultant services.--The Commission is authorized to 
        procure the services of experts and consultants in accordance 
        with section 3109 of title 5, United States Code, but at rates 
        not to exceed the daily rate paid a person occupying a position 
        at level IV of the Executive Schedule under section 5315 of 
        title 5, United States Code.

    (f) Compensation and Travel Expenses.--
            (1) Compensation.--Each member of the Commission may be 
        compensated at a rate not to exceed the daily equivalent of the 
        annual rate of basic pay in effect for a position at level IV of 
        the Executive Schedule under section 5315 of title 5, United 
        States Code, for each day during which that member is engaged in 
        the actual performance of the duties of the Commission.
            (2) Travel expenses.--While away from their homes or regular 
        places of business in the performance of services for the 
        Commission, members of the Commission shall be allowed travel 
        expenses, including per diem in lieu of subsistence, in the same 
        manner as persons employed intermittently in the Government 
        service are allowed expenses under section 5703(b) of title 5, 
        United States Code.

    (g) Nonapplicability of Federal Advisory Committee Act.--The Federal 
Advisory Committee Act (5 U.S.C. App.) shall not apply to the 
Commission.
    (h) Report of the Commission; Appearance Before and Consultations 
With Congress.--
            (1) Report.--On December 15, 2010, the Commission shall 
        submit to the President and to the Congress a report containing 
        the findings and conclusions of the Commission on the causes of 
        the current financial and economic crisis in the United States.
            (2) Institution-specific reports authorized.--At the 
        discretion of the chairperson of the Commission, the report 
        under paragraph (1) may include reports or specific findings on 
        any financial institution examined by the Commission under 
        subsection (c)(2).
            (3) Appearance before the congress.--
        The <<NOTE: Deadline.>> chairperson of the Commission shall, not 
        later than 120 days after the date of submission of the final 
        reports under paragraph (1), appear before the Committee on 
        Banking, Housing, and Urban Affairs of the Senate and the 
        Committee on Financial Services of the House of Representatives 
        regarding such reports and the findings of the Commission.
            (4) Consultations with the congress.--The Commission shall 
        consult with the Committee on Banking, Housing, and Urban 
        Affairs of the Senate, the Committee on Financial Services of 
        the House of Representatives, and other relevant committees of 
        the Congress, for purposes of informing the Congress on the work 
        of the Commission.

    (i) Termination of Commission.--
            (1) In general.--The Commission, and all the authorities of 
        this section, shall terminate 60 days after the date on which 
        the final report is submitted under subsection (h).
            (2) Administrative activities before termination.--The 
        Commission may use the 60-day period referred to in paragraph

[[Page 123 STAT. 1630]]

        (1) for the purpose of concluding the activities of the 
        Commission, including providing testimony to committees of the 
        Congress concerning reports of the Commission and disseminating 
        the final report submitted under subsection (h).

    (j) Authorization of Appropriation.--There is authorized to be 
appropriated to the Secretary of the Treasury such sums as are necessary 
to cover the costs of the Commission.

    Approved May 20, 2009.

LEGISLATIVE HISTORY--S. 386:
---------------------------------------------------------------------------

SENATE REPORTS: No. 111-10 (Comm. on the Judiciary).
CONGRESSIONAL RECORD, Vol. 155 (2009):
            Apr. 22, 23, 27, 28, considered and passed Senate.
            May 6, considered and passed House, amended.
            May 14, Senate concurred in House amendments with an 
                amendment.
            May 19, House concurred in Senate amendment.
DAILY COMPILATION OF PRESIDENTIAL DOCUMENTS (2009):
            May 20, Presidential remarks and statement.

                                  <all>

Share This Section