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CCH Issues White Paper on Financial Rescue Plan
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RIVERWOODS, Ill., Oct. 6 /PRNewswire/ -- CCH, part of Wolters Kluwer Law &Business, has published a white paper, The Economic Bailout: An Analysis ofthe Economic Emergency Stabilization Act(http://www.cch.com/Press/news/CCHWhitePaper_Bailout.pdf), by CCH banking lawanalysts Katalina M. Bianco, JD and John M. Pachkowski, JD. Wolters KluwerLaw & Business is a leading provider of research information and softwaresolutions in key specialty areas for legal and business professionals(business.cch.com).
President Bush signed the Emergency Economic Stabilization Act of 2008, orEESA, into law within two hours of its final passage in the House ofRepresentatives on October 3, 2008, and declared that the legislation was"essential to helping America's economy weather this financial crisis."
The law provides the Treasury Department up to $700 billion to purchase,manage and sell assets held by financial institutions that are considered tobe "troubled" or "toxic," under a program known as the Troubled Asset ReliefProgram, or TARP.
The CCH white paper includes a compelling timeline, counting down keyevents from the takeover of Fannie Mae and Freddie Mac on September 7 to theoriginal "bailout" plan by Treasury Secretary Paulson put forward on September23.
The original plan was extensively elaborated and modified as it was castinto legislative language, then rejected by the House on September 29 andfinally, after being packaged with an array of tax provisions and a raising ofthe FDIC insurance limits, was passed into law.
White Paper Details Taxpayer Protection, Oversight
The white paper details the many layers of taxpayer protection in the TARPprogram, including prohibitions on unjust enrichment and obtaining maximumreturn for the federal government. The Treasury Secretary will be required toprotect taxpayers by using market mechanisms, namely purchasing assets at thelowest price and using auctions or reverse auctions to maximize taxpayerresources.
Multiple layers of oversight are also called for in the law. Itestablishes a Financial Stability Oversight Board and a CongressionalOversight Panel. The Treasury Secretary is required to disclose descriptions,amounts and pricing of assets acquired under the TARP and judicial review ofthe program is authorized.
"This is quite a change from the first Treasury Department proposal, inwhich the asset purchase program had no oversight provisions," white paperco-author Pachkowski noted.
The white paper also examines a number of compensation-related provisionsin the new law, involving incentive compensation, claw-back provisions andgolden parachutes.
The white paper concludes by looking at some of the potential difficultiesfacing the program.
"The complexity of some of the securities, and the difficulty ofaccurately valuing them, could be a stumbling block to the law's intended goalof stabilizing the economy," white paper co-author Bianco observed.
About the Authors
Katalina M. Bianco, JD, is a banking law analyst and editor of the CCHnewsletter, Subprime, Mortgage, and Securitization Law Update. She alsocontributes to the CCH Federal Banking Law Reporter, CCH Mortgage ComplianceGuide and Bank Digest.
John M. Pachkowski, JD, is a banking law analyst and contributor to theCCH Federal Banking Law Reporter and Bank Digest. Pachkowski is the author ofAnti-Money Laundering and Bank Secrecy: Compliance and the USA PATRIOT Act,and co-author of the CCH Financial Privacy Law Guide.
About Wolters Kluwer Law & Business
Wolters Kluwer Law & Business is a leading provider of research productsand software solutions in key specialty areas for legal and businessprofessionals, as well as casebooks and study aids for law students. Its majorproduct lines include Aspen Publishers, CCH, Kluwer Law International andLoislaw. Its markets include law firms, law schools, corporate counsel andprofessionals requiring legal and compliance information. Wolters Kluwer Law &Business, a unit of Wolters Kluwer, is based in New York City and Riverwoods,Ill.
Wolters Kluwer is a leading global information services and publishingcompany. The company provides products and services globally for professionalsin the health, tax, accounting, corporate, financial services, legal andregulatory sectors. Wolters Kluwer has annual revenues (2007) of €3.4 billion($4.8 billion), maintains operations in over 33 countries across Europe, NorthAmerica and Asia Pacific and employs approximately 19,500 people worldwide.Wolters Kluwer is headquartered in Amsterdam, the Netherlands. For moreinformation, visit http://www.wolterskluwer.com.
SOURCE CCH, part of Wolters Kluwer Law & Business
The law provides the Treasury Department up to $700 billion to purchase,manage and sell assets held by financial institutions that are considered tobe "troubled" or "toxic," under a program known as the Troubled Asset ReliefProgram, or TARP.
The CCH white paper includes a compelling timeline, counting down keyevents from the takeover of Fannie Mae and Freddie Mac on September 7 to theoriginal "bailout" plan by Treasury Secretary Paulson put forward on September23.
The original plan was extensively elaborated and modified as it was castinto legislative language, then rejected by the House on September 29 andfinally, after being packaged with an array of tax provisions and a raising ofthe FDIC insurance limits, was passed into law.
White Paper Details Taxpayer Protection, Oversight
The white paper details the many layers of taxpayer protection in the TARPprogram, including prohibitions on unjust enrichment and obtaining maximumreturn for the federal government. The Treasury Secretary will be required toprotect taxpayers by using market mechanisms, namely purchasing assets at thelowest price and using auctions or reverse auctions to maximize taxpayerresources.
Multiple layers of oversight are also called for in the law. Itestablishes a Financial Stability Oversight Board and a CongressionalOversight Panel. The Treasury Secretary is required to disclose descriptions,amounts and pricing of assets acquired under the TARP and judicial review ofthe program is authorized.
"This is quite a change from the first Treasury Department proposal, inwhich the asset purchase program had no oversight provisions," white paperco-author Pachkowski noted.
The white paper also examines a number of compensation-related provisionsin the new law, involving incentive compensation, claw-back provisions andgolden parachutes.
The white paper concludes by looking at some of the potential difficultiesfacing the program.
"The complexity of some of the securities, and the difficulty ofaccurately valuing them, could be a stumbling block to the law's intended goalof stabilizing the economy," white paper co-author Bianco observed.
About the Authors
Katalina M. Bianco, JD, is a banking law analyst and editor of the CCHnewsletter, Subprime, Mortgage, and Securitization Law Update. She alsocontributes to the CCH Federal Banking Law Reporter, CCH Mortgage ComplianceGuide and Bank Digest.
John M. Pachkowski, JD, is a banking law analyst and contributor to theCCH Federal Banking Law Reporter and Bank Digest. Pachkowski is the author ofAnti-Money Laundering and Bank Secrecy: Compliance and the USA PATRIOT Act,and co-author of the CCH Financial Privacy Law Guide.
About Wolters Kluwer Law & Business
Wolters Kluwer Law & Business is a leading provider of research productsand software solutions in key specialty areas for legal and businessprofessionals, as well as casebooks and study aids for law students. Its majorproduct lines include Aspen Publishers, CCH, Kluwer Law International andLoislaw. Its markets include law firms, law schools, corporate counsel andprofessionals requiring legal and compliance information. Wolters Kluwer Law &Business, a unit of Wolters Kluwer, is based in New York City and Riverwoods,Ill.
Wolters Kluwer is a leading global information services and publishingcompany. The company provides products and services globally for professionalsin the health, tax, accounting, corporate, financial services, legal andregulatory sectors. Wolters Kluwer has annual revenues (2007) of €3.4 billion($4.8 billion), maintains operations in over 33 countries across Europe, NorthAmerica and Asia Pacific and employs approximately 19,500 people worldwide.Wolters Kluwer is headquartered in Amsterdam, the Netherlands. For moreinformation, visit http://www.wolterskluwer.com.
SOURCE CCH, part of Wolters Kluwer Law & Business
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