Issue |
Paulson Plan |
Frank-Dodd |
Final Bill |
$ |
700B with no strings. |
700B – Delivered in 150B traunches that can be delayed by Congressional disapproval (and a Presidential signature) |
250B – Immediately available to the Secretary.
100B – Available upon report to Congress, certified by the President.
350B – Available ONLY upon Congressional action.
|
Insurance (House Republican Model) |
NONE |
NONE |
Requirement to establish mandatory insurance/guarantee program at no expense to the taxpayer. “Pay to play” for participating companies, based on risk. Outlays reduced by premiums collected.
|
Executive Compensation |
Not Specifically Addressed |
Far reaching executive compensation standards that would affect companies not even involved in this financial crisis. Additionally, the bill lowered the deduction on executive pay to $400,000 for ALL companies. |
Workable prohibitions on executive compensation to ensure bad actors are not rewarded. In a total takeover (like what happened with AIG), there will be no golden parachutes or severance pay. For equity participation, over $300M total ban for top 5 executives on golden parachutes and tax deduction limit on compensation above $500,000.
|
Oversight/Transparency |
|
Onerous, unworkable and repetitive reporting and oversight requirements, hindering proper implementation of program. |
Establishment of bipartisan oversight commission, split evenly between minority and majority.
Practical reporting requirements to ensure proper reports to Congress and the public.
Creation of a Special Inspector General
Creates a financial stability oversight board
Implements strict conflict of interest and unjust enrichment rules
If after 5 years the government has a net loss of taxpayer funds as a consequence of the purchase program, the President will be required to submit a legislative proposal to recoup such funds from program beneficiaries.
|
“Say on Pay”
Union Take Over of Corporate Boards
|
|
So-called “say on pay” or “proxy access” which propose to mandate a nonbinding shareholder vote on proxy access and other corporate governance issues for all companies in which the Treasury Department buys a direct stake in certain assets.
|
OUT |
Affordable Housing Slush Fund (ACORN Fund) |
|
Included a giveaway that would force taxpayers to bankroll a slush fund for ACORN – an organization fraught with controversy for, among other scandals, its fraudulent voter registration activities on behalf of Democratic candidates. |
OUT |
Bankruptcy “Cramdown” (aka, trial bar give-away) |
|
Included so-called “cramdown” provisions allowing bankruptcy judges to reduce mortgage principal under the guise of helping those at risk of foreclosure. If enacted into law, the provision would be a bonanza for trial lawyers and undercut the effectiveness of any economic recovery effort by making it even harder to value mortgage-backed securities.
|
OUT |
Mark-to-Market Accounting
|
|
|
GAO study on the impacts of mark-to-market accounting standards and effects on the banking crisis. Restatement of existing authority to suspend mark-to-market.
|
Equity/Warrants
|
|
Mandatory equity interest in all participating firms. |
Mandatory equity interests in total takeover scenario. Proportional equity interest based on percentage of assets sold if deemed appropriate Secretary. |
Tax benefits for community banks
|
|
|
Ability for community banks to take capital losses on GSE assets against ordinary income. |