(Reuters) - Members of Congress on Friday were reviewing draft legislative language agreed by negotiators for House and Senate Democrats and Senate Republicans on modifications to the Bush administration’s $700 billion Wall Street bailout plan.
Following is a list of features in the 102-page draft legislation as it stands so far. Lawmakers are continuing negotiations after House Republicans revolted against the plan in favor of a private sector financed mortgage insurance program.
- A Troubled Assets Relief Program (TARP) to purchase assets including mortgage-backed securities.
--$700 billion overall to be authorized in installments of $250 billion. That could be increased to $350 billion upon notification to Congress by the president.
- Government to get warrants for equity in participating companies as a way of protecting taxpayers and allowing them to benefit from any profit gains from companies participating in the program.
- Foreclosure mitigation for homeowners facing economic distress.
-Restrictions on chief executive compensation at companies that participate.
- Financial Stability Oversight Board comprised of the chairmen of the Federal Reserve, Securities and Exchange Commission and Federal Deposit Insurance Corp, and two members appointed by Congress to oversee activities of the program.
- Requires a government investigation into the causes behind the current financial crisis. Report to be delivered to Congress by June 2009.
- Regular and detailed reports on transactions and other activities under the rescue program.
- Establishes a congressional oversight panel for the program that would also submit a report on regulatory reform no later than January 20, 2009, the date a new president will take office.
- Directs that 20 percent of any future profits from the bailout fund to the Affordable Housing Fund and the Capital Magnet Fund to meet America’s housing needs.
- Requires federal financial regulatory agencies to cooperate with Federal law enforcement authorities to investigate cases of fraud or misrepresentation with respect to financial products.
- Investors who sold preferred stock in mortgage finance giants Fannie Mae and Freddie Mac, between January 1, 2008 and before September 7, 2008, to pay higher ordinary income taxes on any gains rather than the lower capital gains tax rate. The government announced the seizure of Fannie and Freddie on September 7.
Editing by Tim Dobbyn