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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.

May 20, 2009
[S. 386]

Fraud
Enforcement and
Recovery Act of
2009.
18 USC 1 note.

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:
‘‘§ 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:

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‘‘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—

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(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.—

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123 STAT. 1619

(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.

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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.

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(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

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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) 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.

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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;

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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) 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

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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;
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

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Definition.

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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) 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

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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 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 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.

Applicability.

31 USC 3729
note.

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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;

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(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;

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(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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(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 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,

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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

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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 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

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(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.

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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.

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Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102