S.Amdt. 4052

SA 4052. Mr. CORKER submitted an amendment intended to be proposed to
amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself and
Mrs. Lincoln)) to the bill S. 3217, to promote the financial stability
of the United States by improving accountability and transparency in
the financial system, to end ``too big to fail'', to protect the
American taxpayer by ending bailouts, to protect consumers from abusive
financial services practices, and for other purposes; which was ordered
to lie on the table; as follows:

On page 1056, line 17, strike the second period and insert
the following: ``.

SEC. 946. REPRESENTATIONS AND WARRANTIES FOR POOL ASSETS.

(a) Representations and Warranties.--
(1) Definitions.--In this subsection--
(A) the terms ``asset-backed security'', ``servicer'', and
``sponsor'' have the meanings given those terms under
Regulation AB; and
(B) the term ``Regulation AB'' means subpart 229.1100 of
title 17, Code of Federal Regulations, or any successor
thereto.
(2) Rules required.--
(A) Compliance.--Not later than 270 days after the date of
enactment of this Act, the Commission shall issue rules, as
the Commission determines is necessary and appropriate
consistent with the protection of investors, that require any
issuance of an asset-backed security to comply with paragraph
(3).
(B) Definition.--The Commission shall, by rule, define the
term ``pool assets'' for purposes of this subsection.
(3) Periodic independent evaluation.--The pooling and
servicing agreement for an asset-backed security shall
contain provisions requiring the sponsor of the asset-backed
security to furnish to the trustee of the asset-backed
security, on a quarterly basis, a certificate or opinion from
an independent evaluator that--
(A) identifies any pool assets that in the prior quarter,
the trustee notified, or had the right to notify, the obligor
that it had an obligation to repurchase or substitute under
the terms of the pooling and servicing agreement because of a
breach or violation of a representation or warranty; and
(B) includes facts supporting a finding as to whether any
representation or warranty made with respect to any pool
asset has been breached or violated.
(4) Independent evaluator.--For purposes of paragraph (3),
an independent evaluator shall--
(A) be subject to removal upon the vote of 25 percent of
the holders of outstanding shares of the asset-backed
security; and
(B) have access to the pool asset records and related
documents of any party to the pooling and servicing agreement
and any person performing work on behalf of any party to the
pooling and servicing agreement.
(5) Exemptions.--The Commission may, by rule, exempt a
class of asset-backed securities from the rules issued under
this subsection, if the Commission determines that the
application of such rules to the class of asset-backed
securities would cause undue disruption to a segment of the
market affected by the class of asset-backed securities.
(b) Direct Review.--An investor or group of investors that
holds not less than 20 percent of the outstanding securities
of an asset-backed security (including an asset-backed
security that is not subject to the requirements under
subpart 229.1100 of title 17, Code of Federal Regulations)
that is issued or outstanding on or before the date of
enactment of this Act shall have access to all loan documents
and related documents of any servicer of the asset-backed
security (including servicing records), unless otherwise
prohibited in a contract with respect to the asset-backed
security.
(c) Enforcement.--The Commission may enforce the rules
issued under this section in the same manner as the
Commission enforces rules issued under the Securities Act of
1933 (15 U.S.C. 77a et seq.) and the Securities Exchange Act
of 1934 (15 U.S.C. 78a et seq.).
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