Fraud Enforcment & Recovery Act (“FERA”)

Fraud Enforcement and Recovery Act of 2009

http://www.gpo.gov/fdsys/pkg/PLAW-111publ21/pdf/PLAW-111publ21.pdf

PUBLIC LAW 111–21—MAY 20, 2009 123 STAT. 1617

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.

Be it enacted by the Senate and House of Representatives of

the United States of America in Congress assembled,

SECTION 1. 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) D

EFINITION OF FINANCIAL INSTITUTION AMENDED T

NCLUDE 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) M

ORTGAGE LENDING BUSINESS DEFINED

.—

(1) I

N GENERAL

.—Chapter 1 of title 18, United States Code,

is amended by inserting after section 26 the following:

‘‘§ 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) C

HAPTER 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.’’.

ALSE STATEMENTS IN MORTGAGE APPLICATIONS A

MENDED

O INCLUDE FALSE STATEMENTS BY MORTGAGE B

ROKERS AND

GENTS OF MORTGAGE LENDING BUSINESSES

.—Section 1014 of title

18, United States Code, is amended by—

18 USC 1 note.

Fraud

Enforcement and

Recovery Act of

2009.

May 20, 2009

[S. 386]

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123 STAT. 1618 PUBLIC LAW 111–21—MAY 20, 2009

(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) M

AJOR FRAUD AGAINST THE GOVERNMENT AMENDED T

NCLUDE ECONOMIC RELIEF AND TROUBLED ASSET RELIEF P

ROGRAM

UNDS

.—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) S

ECURITIES FRAUD AMENDED TO INCLUDE FRAUD I

NVOLVING

PTIONS AND FUTURES IN COMMODITIES

.—

(1) I

N 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

future delivery, or any option on a commodity for future

delivery, or’’ after ‘‘in connection with the purchase or

sale of’’.

(2) C

HAPTER 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) M

ONEY LAUNDERING AMENDED TO DEFINE P

ROCEEDS OF

PECIFIED UNLAWFUL ACTIVITY

.—

(1) M

ONEY 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) M

ONETARY 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) S

ENSE OF THE CONGRESS AND REPORT C

ONCERNING

EQUIRED APPROVAL FOR MERGER CASES

.—

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PUBLIC LAW 111–21—MAY 20, 2009 123 STAT. 1619

(1) S

ENSE 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) R

EPORT

.—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.

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) A

UTHORIZATION OF ADDITIONAL A

PPROPRIATIONS FOR THE

EPARTMENT OF JUSTICE

.—

(1) I

N 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) A

LLOCATIONS

.—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.

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123 STAT. 1620 PUBLIC LAW 111–21—MAY 20, 2009

$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) A

UTHORIZATION OF ADDITIONAL A

PPROPRIATIONS FOR THE

OSTAL 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.

UTHORIZATION OF ADDITIONAL A

PPROPRIATIONS FOR THE

NSPECTOR GENERAL FOR THE DEPARTMENT OF HOUSING AND U

RBAN

EVELOPMENT

.—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) A

UTHORIZATION OF ADDITIONAL A

PPROPRIATIONS FOR THE

NITED 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) A

UTHORIZATION OF ADDITIONAL A

PPROPRIATIONS FOR THE

ECURITIES AND EXCHANGE COMMISSION

.—

(1) I

N 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) I

NSPECTOR 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) U

SE OF FUNDS

.—

(1) I

N 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) F

UNDS 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

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PUBLIC LAW 111–21—MAY 20, 2009 123 STAT. 1621

justice agencies to develop, establish, and maintain intelligencefocused

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) A

DDITIONAL 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) R

EPORT 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) C

LARIFICATION 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) L

IABILITY FOR CERTAIN ACTS

.—

‘‘(1) I

N 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;

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123 STAT. 1622 PUBLIC LAW 111–21—MAY 20, 2009

‘‘(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) R

EDUCED 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) C

OSTS 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) D

EFINITIONS

.—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

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PUBLIC LAW 111–21—MAY 20, 2009 123 STAT. 1623

‘‘(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;

‘‘(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

(4) in subsection (c), as redesignated, by striking ‘‘subparagraphs

(A) through (C) of subsection (a)’’ and inserting ‘‘subsection

(a)(2)’’.

(b) I

NTERVENTION 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.’’.

IVIL 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

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123 STAT. 1624 PUBLIC LAW 111–21—MAY 20, 2009

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

‘‘(8) 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) R

ELIEF FROM RETALIATORY ACTIONS

.—Section 3730(h) of

title 31, United States Code, is amended to read as follows:

‘‘(h) R

ELIEF FROM RETALIATORY ACTIONS

.—

‘‘(1) I

N 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

Definition.

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PUBLIC LAW 111–21—MAY 20, 2009 123 STAT. 1625

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) R

ELIEF

.—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) F

ALSE CLAIMS JURISDICTION

.—Section 3732 of title 31,

United States Code, is amended by adding at the end the following

new subsection:

‘‘(c) S

ERVICE 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) E

FFECTIVE 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) E

STABLISHMENT 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) C

OMPOSITION OF THE COMMISSION

.—

(1) M

EMBERS

.—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;

31 USC 3729

note.

Applicability.

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123 STAT. 1626 PUBLIC LAW 111–21—MAY 20, 2009

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) Q

UALIFICATIONS; LIMITATION

.—

(A) I

N 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) L

IMITATION

.—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) C

HAIRPERSON; VICE CHAIRPERSON

.—

(A) I

N 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) P

OLITICAL PARTY AFFILIATION

.—The Chairperson

and Vice Chairperson of the Commission may not be from

the same political party.

(4) M

EETINGS, QUORUM; VACANCIES

.—

(A) M

EETINGS

.—

(i) I

NITIAL MEETING

.—The initial meeting of the

Commission shall be as soon as possible after a quorum

of members have been appointed.

(ii) S

UBSEQUENT 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) Q

UORUM

.—6 members of the Commission shall constitute

a quorum.

ACANCIES

.—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.

UNCTIONS 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;

flows, and fiscal imbalances of various governments;

(D) monetary policy and the availability and terms

of credit;

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PUBLIC LAW 111–21—MAY 20, 2009 123 STAT. 1627

(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-bigto-

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

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123 STAT. 1628 PUBLIC LAW 111–21—MAY 20, 2009

(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) P

OWERS OF THE COMMISSION

.—

(1) H

EARINGS 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) S

UBPOENAS

.—

(A) S

ERVICE

.—Subpoenas issued under paragraph

(1)(B) may be served by any person designated by the

Commission.

(B) E

NFORCEMENT

.—

(i) I

N 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) A

DDITIONAL ENFORCEMENT

.—Sections 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) I

SSUANCE

.—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

being present.

(3) C

ONTRACTING

.—The Commission may enter into contracts

to enable the Commission to discharge its duties under

this section.

(4) I

NFORMATION FROM FEDERAL AGENCIES AND OTHER ENTITIES

.—

(A) I

N GENERAL

.—The Commission may secure directly

from any department, agency, bureau, board, commission,

Applicability.

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PUBLIC LAW 111–21—MAY 20, 2009 123 STAT. 1629

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) O

THER 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) A

DMINISTRATIVE 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) D

ONATIONS OF GOODS AND SERVICES

.—The Commission

may accept, use, and dispose of gifts or donations of services

or property.

(7) P

OSTAL 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) P

OWERS 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) S

TAFF OF THE COMMISSION

.—

(1) D

IRECTOR

.—The Commission shall have a Director who

shall be appointed by the Chairperson and the Vice Chairperson,

acting jointly.

(2) S

TAFF

.—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) A

PPLICABILITY 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) D

ETAILEES

.—Any Federal Government employee may

be detailed to the Commission without reimbursement from

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123 STAT. 1630 PUBLIC LAW 111–21—MAY 20, 2009

the Commission, and such detailee shall retain the rights,

status, and privileges of his or her regular employment without

interruption.

(5) C

ONSULTANT 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) C

OMPENSATION AND TRAVEL EXPENSES

.—

(1) C

OMPENSATION

.—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) T

RAVEL 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) N

ONAPPLICABILITY OF FEDERAL ADVISORY COMMITTEE ACT

.—

The Federal Advisory Committee Act (5 U.S.C. App.) shall not

apply to the Commission.

(h) R

EPORT OF THE COMMISSION; APPEARANCE B

EFORE AND

ONSULTATIONS WITH CONGRESS

.—

(1) R

EPORT

.—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) I

NSTITUTION-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) A

PPEARANCE BEFORE THE CONGRESS

.—The 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) C

ONSULTATIONS 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) T

ERMINATION OF COMMISSION

.—

(1) I

N 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) A

DMINISTRATIVE ACTIVITIES BEFORE TERMINATION

.—The

Commission may use the 60-day period referred to in paragraph

Deadline.

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PUBLIC LAW 111–21—MAY 20, 2009 123 STAT. 1631

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.

(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) A

UTHORIZATION 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.

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