S.Amdt. 4453

SA 4453. Mr. BROWNBACK submitted an amendment intended to be proposed by him to the bill H.R. 3221, moving the United States toward greater energy independence and security, developing innovative new technologies, reducing carbon emissions, creating green jobs, protecting consumers, increasing clean renewable energy production, and modernizing our energy infrastructure, and to amend the Internal Revenue Code of 1986 to provide tax incentives for the production of renewable energy and energy conservation; which was ordered to lie on the table; as follows:

At the end, add the following new title:

TITLE VIII--FEDERAL RESERVE

SEC. 801. FINDINGS.

Congress finds that--

(1) recent disruptions in the housing market and the market for mortgage-backed securities have had an adverse impact on the availability and price of credit associated with home mortgages;

(2) improving the ability of Government agencies, government-sponsored enterprises, financial institutions, and investors to better assess risks associated with mortgage lending is critical to the restoration of confidence and liquidity to those markets;

(3) the proper evaluation of risks associated with individual loans requires not only an evaluation of information about the prospective borrower and assessment of the adequacy if the collateral, but also the reliability and accuracy of information submitted by originators to prospective underwriters;

(4) developing a timely system of rating loans that incorporates an objective and standardized evaluation of risks associated with loans originated or funded initially by individual entities or institutions; and

(5) such a system would facilitate a more accurate rating of securities that loans are included in.

SEC. 802. RULEMAKING REQUIRED.

(a) Study and Evaluation.--

(1) In general.--Not later than 90 days after the date of enactment of this Act, the Board of Governors of the Federal Reserve System (in this title, referred to as the “Board”) shall, in a manner determined by the Chairman of the Board, undertake an evaluation and study of the efficacy of including risks associated with the quality controls and data accuracy of market participants in the rating of individual mortgage loans.

(2) Consultation.--In conducting the study and evaluation required by this subsection, the Board shall consult with private sector entities to evaluate private sector products that may exist and be currently utilized by various market participants to quantify risks associated with originator and lender quality controls and information.

(b) Rulemaking.--Not later than 180 days after the date of completion of the study and evaluation prescribed under subsection (a), the Board shall promulgate regulations to implement a system of creating scores associated with mortgage loans that incorporates information about borrowers, originators, underwriters, and lenders. Such system shall be developed in a manner that allows for a more objective and complete evaluation of risks associated with individual loans to facilitate their inclusion in mortgage backed securities.

(c) Requirement for Securitization and Guarantee.--Beginning 180 days after the effective date of the regulations promulgated under this section, it shall be unlawful to include any loan as part of any mortgage backed security offered for sale by any Government agency, government-sponsored enterprise, or financial institution that is subject to regulation by the Board or the Securities and Exchange Commission.