On Oct. 3, 2008, Congress passed and sent to the President the Emergency Economic Stabilization Act of 2008 (the Act), which is targeted at increasing the stability of the U.S. economy by providing relief to financial institutions whose existence has been endangered by the national/worldwide credit crisis.
The Act establishes the Office of Financial Stability and a three-tranche program to purchase an aggregate of up to $700 billion in "troubled assets" (residential or commercial mortgages, and any securities or obligations based on such mortgages) from financial institutions as well as a program to insure the payment of principal and interest on such troubled assets to financial institutions. More information on this aspect of the Act is available at this link.
The Act also contains a number of tax provisions aimed at providing relief for financial institutions and homeowners and at preventing government subsidization of executive compensation. More information on these tax provisions is available at this link
Additionally, the Act contains numerous tax provisions for energy and disaster relief and tax extenders that were not present in the bill that failed to pass on Sept. 29, 2008. More information on these tax provisions is available at this link
Waller Lansden is closely monitoring developments related to these difficult, unprecedented market conditions for our clients and friends, and we will provide continuing updates as events unfold.
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