I

103D CONGRESS

2D SESSION H. R. 5277

To address the need for private financing of home ownership and economic

development on and near reservation lands, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

OCTOBER 7, 1994

Mr. RICHARDSON (for himself and Ms. FURSE) (both by request) introduced

the following bill; which was referred to the Committee on Banking, Finance and Urban Affairs

A BILL

To address the need for private financing of home ownership

and economic development on and near reservation lands,

and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 101. POLICY.

4 Based upon the findings and recommendations by the

5 Commission on American Indian, Alaska Native and Na6 tive Hawaiian Housing established by Public Law 101–

7 235, the Congress has determined that housing shortages

8 and deplorable living conditions are at crisis proportions

9 in Native American communities throughout the United
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1 States. The lack of private capital to finance housing and

2 economic development for Native Americans and Native

3 American communities seriously exacerbates this problem.

4 To begin to address this crisis, it is the policy of the

5 United States to improve the economic conditions and sup6 ply of Housing in Native American communities through7 out the United States by creating the Native American

8 Financial Services Organization. It is anticipated that

9 when the Native American Financial Services Organiza10 tion is no longer a Congressionally chartered body cor11 porate, it will function as a tribal, State or District of Co12 lumbia corporation.

13 SEC. 102. SHORT TITLE AND STATEMENT OF PURPOSES.

14 (a) SHORT TITLE.—This Act may be cited as the

15 ‘‘Native American Financial Services Organization Act of

16 1994’’.

17 (b) PURPOSES.—It is the purpose of this Act—

18 (1) to help serve the mortgage and other lend19 ing needs of Native Americans by assisting in the es20 tablishment and organization of Native American

21 Financial Institutions, developing and providing fi22 nancial expertise and technical assistance to Native

23 American Financial Institutions, including assist24 ance on how to overcome barriers to lending on Na-
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1 tive American lands, and the past and present im2 pact of discrimination;

3 (2) to promote access to mortgage credit in Na4 tive American communities in the Nation by increas5 ing the liquidity of financing for housing and im6 proving the distribution of investment capital avail7 able for such financing, primarily through Native

8 American Financial Institutions;

9 (3) to promote the infusion of public capital

10 into Native American communities throughout the

11 United States and to direct sources of public and

12 private capital into housing and economic develop13 ment for Native American individuals and families,

14 primarily through Native American Financial Insti15 tutions; and

16 (4) to provide ongoing assistance to the second17 ary market for residential mortgages and economic

18 development loans for Native American individuals

19 and families, Native American Financial Institu20 tions, and other borrowers by increasing the liquidity

21 of such investments and improving the distribution

22 of investment capital available for such financing.

23 SEC. 103. DEFINITIONS.

24 (a) The term ‘‘Board of Directors’’ means the board

25 of directors of the Organization.
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1 (b) The term ‘‘Chairperson’’ means the chairperson

2 of the Board of Directors.

3 (c) The term ‘‘designated merger date’’ means the

4 specific calendar date and time of day designated by the

5 Board of Directors under section 502(b).

6 (d) The term ‘‘Fund’’ means the Community Devel7 opment Financial Institutions Fund established by the

8 Community Development Banking and Financial Institu9 tions Act of 1994.

10 (e) The term ‘‘Indian Tribe’’ means any Indian tribe,

11 band, nation, or other organized group or community, in12 cluding any Alaska Native village or regional or village

13 corporation as defined in or established pursuant to the

14 Alaska Native Claims Settlement Act, which is recognized

15 as eligible for the special programs and services provided

16 by the United States to Indians because of their status

17 as Indians.

18 (f) The term ‘‘merger plan’’ means the plan of merg19 er adopted by the Board of Directors according to section

20 502(a).

21 (g) The term ‘‘Native American’’ means any member

22 of an Indian Tribe.

23 (h) The term ‘‘Native American Financial Institu24 tion’’ means a person (other than an individual) that—
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1 (1) qualifies as a ‘‘community development fi2 nancial institution’’ under the Community Develop3 ment Banking and Financial Institutions Act of

4 1994;

5 (2) satisfies the requirements established by the

6 Community Development Banking and Financial In7 stitutions Act of 1994 and the Fund for applicants

8 for assistance from the Fund;

9 (3) demonstrates a special interest and exper10 tise in serving the primary economic development

11 and mortgage lending needs of the Native American

12 community; and

13 (4) demonstrates that it has the endorsement of

14 the Native American community it intends to serve.

15 (i) The term ‘‘new corporation’’ means the corpora16 tion formed according to section 501.

17 (j) The term ‘‘nonqualifying mortgage loan’’ means

18 a mortgage loan deemed by the Organization to be of such

19 quality, type, class or principal amount as to not meet the

20 purchase standards of the Federal National Mortgage As21 sociation or the Federal Home Loan Mortgage Corpora22 tion in effect on September 30, 1994.

23 (k) The term ‘‘Organization’’ means the Native

24 American Financial Services Organization.
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1 (l) The term ‘‘qualifying mortgage loan’’ means a

2 mortgage loan deemed by the Organization to be of such

3 quality, type, class or principal amount as to meet the pur4 chase standards of the Federal National Mortgage Asso5 ciation or the Federal Home Loan Mortgage Corporation

6 in effect on September 30, 1994.

7 (m) The term ‘‘transition period’’ means the period

8 of time between the approval of the merger plan by both

9 the Secretary of Housing and Urban Development and the

10 Secretary of the Treasury and the designated merger date.

11 SEC. 201. ESTABLISHMENT OF THE ORGANIZATION.

12 (a) CREATION; BOARD OF DIRECTORS; POLICIES;

13 PRINCIPAL OFFICE; MEMBERSHIP; TERM; VACANCIES.—

14 (1) There is established and chartered a body

15 corporate to be known as the Native American Fi16 nancial Services Organization (‘‘Organization’’). The

17 Organization shall have existence as a Congression18 ally chartered body corporate until the designated

19 merger date, at which time its charter shall termi20 nate, unless such charter is earlier surrendered by

21 the Organization. The right to revise, amend or

22 modify the Organization charter is specifically and

23 exclusively reserved to the Congress.

24 (2) The powers of the Organization shall be

25 vested in a Board of Directors. The Board of Direc-
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1 tors shall determine the policies that govern the op2 erations and management of the Organization. The

3 principal office of the Organization shall be in the

4 District of Columbia. For purposes of venue, Orga5 nization shall be considered a resident of the District

6 of Columbia.

7 (3)(A) The Board of Directors of the Organiza8 tion shall consist of nine persons, three of whom

9 shall be appointed by the President of the United

10 States to serve at the President’s pleasure and six

11 of whom shall be elected by the class A stockholders,

12 all in accordance with the bylaws of the Organiza13 tion. If class B stock is issued under section 301(b),

14 the Board of Directors shall consist of 13 persons,

15 and the four additional members shall be elected by

16 the class B stockholders in accordance with the by17 laws of the Organization. Each member of the

18 Board of Directors shall be elected or appointed for

19 a term of four years, except that the members of the

20 initial Board of Directors shall have the following

21 terms: of the three members appointed by the Presi22 dent, one will have a two-year term, one will have a

23 three-year term, and one will have a four-year term,

24 all as designated by the President at the time of

25 their appointments; of the six members elected by
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1 the class A stockholders, two will have two-year

2 terms, two will have three-year terms, and the re3 maining two will have four-year terms; and if class

4 B stock is issued and four additional members are

5 elected by the class B stockholders, one will have a

6 two-year term, one will have a three-year term, and

7 the remaining two will have four-year terms. All

8 members appointed by the President shall have ex9 pertise in one or more of the following areas—Na10 tive American housing and economic development

11 programs, financing in Native American commu12 nities, Native American governing bodies and court

13 systems, restricted and trust land issues, economic

14 development, and small consumer loans.

15 (B) The Board of Directors shall select a

16 Chairperson from among its members, except that

17 the initial Chairperson shall be selected from among

18 the members of the initial Board of Directors who

19 have been appointed or elected to four-year terms.

20 (C)(i) Any appointed directorship that becomes

21 vacant shall be filled by appointment by the Presi22 dent of the United States, but only for the unexpired

23 portion of the term.

24 (ii) Any elected directorship that becomes va25 cant shall be filled by appointment by the Board of
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1 Directors, but only for the unexpired portion of the

2 term.

3 (D) Any member of the Board of Directors may

4 continue to serve after the expiration of the term of

5 office to which the director was appointed or elected

6 until a successor has been appointed or elected, and

7 qualified.

8 (b) POWERS OF THE ORGANIZATION.—The Organi9 zation shall have power—

10 (1) to adopt, alter, and use a corporate seal;

11 (2) to adopt bylaws, consistent with this Act,

12 regulating, among other things, the manner in

13 which—

14 (A) the business of the Organization shall

15 be conducted;

16 (B) the elected directors of the Organiza17 tion shall be elected;

18 (C) the stock of the Organization shall be

19 issued, held, and disposed of;

20 (D) the property of the Organization shall

21 be disposed of; and

22 (E) the powers and privileges granted to

23 the Organization by this Act and other law

24 shall be exercised and enjoyed;
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1 (3) to make and perform contracts, agreements,

2 and commitments, including entering into a coopera3 tive agreement with the Fund;

4 (4) to prescribe and impose fees and charges

5 for services provided by the Organization;

6 (5) to settle, adjust, and compromise, and with

7 or without consideration or benefit to the Organiza8 tion to release or waive in whole or in part, in ad9 vance or otherwise, any claim, demand, or right of,

10 by, or against the Organization, provided that such

11 settlement, adjustment, compromise, release or waiv12 er shall not be adverse to the interests of the United

13 States;

14 (6) to sue and be sued, complain and defend, in

15 any tribal, State, Federal, or other court;

16 (7) to acquire, take, hold, and own, and to deal

17 with and dispose of any property;

18 (8) to determine its necessary expenditures and

19 the manner in which the same shall be incurred, al20 lowed, and paid, and appoint, employ, and fix and

21 provide for the compensation and benefits of offi22 cers, employees, attorneys, and agents as the Board

23 of Directors determines reasonable and not incon24 sistent with the provisions of this section;
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1 (9) to incorporate a new corporation under

2 State, District of Columbia, or tribal law, as pro3 vided in section 501;

4 (10) to adopt a plan of merger, as provided in

5 section 502;

6 (11) to consummate the merger of the Organi7 zation into the new corporation, as provided in sec8 tion 503; and

9 (12) to have succession until the designated

10 merger date or any earlier date on which the Orga11 nization surrenders its Federal charter.

12 (c) INVESTMENT OF FUNDS; DESIGNATION AS DE13 POSITARY, CUSTODIAN, OR AGENT FOR ORGANIZATION OF

14 ANY FEDERAL RESERVE BANK, FEDERAL HOME LOAN

15 BANK, OR ANY BANK DESIGNATED AS DEPOSITARY OF

16 PUBLIC MONEY.—Moneys of the Organization not re17 quired to meet current operating expenses shall be in18 vested in obligations of, or obligations guaranteed by, the

19 United States or any agency thereof, or in obligations,

20 participations or other instruments that are lawful invest21 ments for fiduciary, trust or public funds. Any Federal

22 Reserve bank or Federal home loan bank, or any bank

23 as to which at the time of its designation by the Organiza24 tion there is outstanding a designation by the Secretary

25 of the Treasury as a general or other depositary of public
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1 money, may be designated by the Organization as a depos2 itary or custodian or as a fiscal or other agent of the Orga3 nization, and is hereby authorized to act as such deposi4 tary, custodian, or agent.

5 (d) ACTIONS BY AND AGAINST THE ORGANIZATION;

6 JURISDICTION; REMOVAL OF ACTIONS; ATTACHMENT OR

7 EXECUTION ISSUED AGAINST THE ORGANIZATION.—Not8 withstanding section 1349 of title 28 of the United States

9 Code or any other provision of law—

10 (1) the Organization shall be deemed to be an

11 agency included in sections 1345 and 1442 of such

12 title 28;

13 (2) all civil actions to which the Organization is

14 a party shall be deemed to arise under the laws of

15 the United States, and the district courts of the

16 United States shall have original jurisdiction of all

17 such actions, without regard to amount or value;

18 and,

19 (3) any civil or other action, case or controversy

20 in a tribal court, court of a State, or in any court

21 other than a district court of the United States, to

22 which the Organization is a party may at any time

23 before the trial thereof be removed by the Organiza24 tion, without the giving of any bond or security, to

25 the district court of the United States for the dis-
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1 trict and division embracing the place where the

2 same is pending, or, if there is no such district

3 court, to the district court of the United States for

4 the District of Columbia, by following any procedure

5 for removal of causes in effect at the time of that

6 removal.

7 SEC. 202. AUTHORIZED ASSISTANCE AND SERVICE FUNC8 TIONS.

9 (a) TECHNICAL ASSISTANCE AND SERVICES.—The

10 Organization is authorized to—

11 (1) assist the Fund in the establishment and

12 organization of Native American Financial Institu13 tions;

14 (2) assist the Fund in developing and providing

15 financial expertise and technical assistance to Native

16 American Financial Institutions, including methods

17 of underwriting, securing, servicing, packaging, and

18 selling mortgage and small commercial and

19 consumer loans;

20 (3) develop and provide specialized technical as21 sistance on how to overcome barriers to primary

22 mortgage lending on Native American lands, includ23 ing issues related to trust lands, discrimination, high

24 operating costs, and inapplicability of standard un25 derwriting criteria;
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1 (4) assist the Fund in providing mortgage un2 derwriting assistance (but not originate loans) under

3 contract to Native American Financial Institutions;

4 (5) work with the Federal National Mortgage

5 Association, the Federal Home Loan Mortgage Cor6 poration, and participants in the secondary market

7 for home mortgage instruments in identifying and

8 eliminating barriers to their purchase of Native

9 American mortgage loans originated by Native

10 American Financial Institutions and other lenders;

11 (6) obtain capital investments in the Organiza12 tion from Indian tribes, Native American organiza13 tions, and others;

14 (7) assist the Fund in its operation as an infor15 mation clearinghouse, providing information on fi16 nancial practices to Native American Financial In17 stitutions; and

18 (8) assist the Fund in monitoring and reporting

19 to the Congress on the performance of Native Amer20 ican Financial Institutions in meeting the economic

21 development and housing credit needs of Native

22 Americans.

23 (b) PURCHASES AND SALES OF MORTGAGES AND

24 MORTGAGE-BACKED SECURITIES.—In the event that the

25 Secretary of Housing and Urban Development determines
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1 that the combined purchases by the Federal National

2 Mortgage Association and the Federal Home Loan Mort3 gage Corporation of residential one- to four-family Native

4 American nonqualifying mortgage loans originated by Na5 tive American Financial Institutions and other lenders (1)

6 in the second year following the establishment of the Orga7 nization total less than $20,000,000, unless it can be dem8 onstrated to the Secretary of Housing and Urban Develop9 ment that such purchase goal could not be met, or (2)

10 in any succeeding year, total less than that amount which

11 the Secretary of Housing and Urban Development has de12 termined and published as a reasonable Native American

13 mortgage purchase goal for such combined purchases by

14 the Federal National Mortgage Association and the Fed15 eral Home Loan Mortgage Corporation in such year; the

16 Organization shall thereafter be permitted to make such

17 purchases. In determining such goal, the Secretary shall

18 take into account the Fund’s study of Native American

19 lending and investment required by the Community Devel20 opment Banking and Financial Institutions Act of 1994.

21 The Organization, upon receiving written confirmation

22 from the Secretary of Housing and Urban Development,

23 is thereafter authorized, without restriction as to time,

24 to—
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1 (1) with respect to residential mortgage loans

2 originated by Native American Financial Institutions

3 which are qualifying mortgage loans—

4 (A) purchase such qualifying mortgage

5 loans;

6 (B) hold such qualifying mortgage loans

7 for a period of time not to exceed twelve

8 months; and

9 (C) resell such qualifying mortgage loans

10 to the Federal National Mortgage Association,

11 the Federal Home Loan Mortgage Corporation

12 or other secondary market participants, as pro13 vided in section 303(b);

14 (2) with respect to residential mortgage loans

15 originated by the Native American Financial Institu16 tions which are nonqualifying mortgage loans—

17 (A) purchase such nonqualifying mortgage

18 loans from the Native American Financial In19 stitutions for such term as the Organization

20 deems appropriate including the life of the

21 mortgage loan, provided that—

22 (i) the Organization has reasonable

23 assurance that the loan will be repaid with24 in the time agreed;
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1 (ii) the Native American Financial In2 stitution selling the loan retains a partici3 pation of not less than 10 per centum in

4 the mortgage;

5 (iii) the Native American Financial

6 Institution selling the loan agrees for such

7 period of time and under such cir8 cumstances as the Organization may re9 quire, to repurchase or replace the mort10 gage upon demand of the Organization in

11 the event that the loan is in default; or

12 (iv) that portion of the outstanding

13 principal balance of the loan which exceeds

14 80 per centum of the value of the property

15 securing such loan is guaranteed or in16 sured by a qualified insurer as determined

17 by the Organization; and

18 (B) issue mortgage-backed securities or

19 other forms of participants based on pools of

20 such nonqualifying mortgage loans, as provided

21 in section 303(c);

22 (3) to purchase, service, sell, lend on the secu23 rity of, and otherwise deal in (i) residential mort24 gages that are secured by a subordinate lien against

25 a one- or four-family residence that is the principal
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1 residence of the mortgagor; and (ii) residential mort2 gages that are secured by a subordinate lien against

3 a property comprising five or more family dwelling

4 units; and

5 (4) rights and remedies of the Organization, in6 cluding without limitation on the generality of the

7 foregoing any rights and remedies of the Organiza8 tion on, under, or with respect to any mortgage or

9 any obligation secured thereby, shall be immune

10 from impairment, limitation, or restriction by or

11 under (1) any law (except laws enacted by the Con12 gress expressly in limitation of this sentence) which

13 becomes effective after the acquisition by the Orga14 nization of the subject or property on, under, or with

15 respect to which such right or remedy arises or ex16 ists or would so arise or exist in the absence of such

17 law, or (2) any administrative or other action which

18 becomes effective after such acquisition. The Organi19 zation is authorized to conduct its business without

20 regard to any qualification or similar statute in the

21 District of Columbia, or any State or tribal jurisdic22 tion.

23 SEC. 203. NATIVE AMERICAN LENDING SERVICES GRANT.

24 To the extent funds are available as provided in sec25 tion 602, and the Fund and the Organization enter into
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1 a cooperative agreement for the Organization to provide

2 technical assistance and other services to Native American

3 Financial Institutions, such agreement shall provide that

4 the initial grant payment, anticipated to be $5,000,000,

5 shall be made when the initial Organization Board of Di6 rectors takes office. The payment of the balance of

7 $5,000,000 shall be made to the Organization not later

8 than one year from the date of the initial grant payment.

9 SEC. 204. AUDITS.

10 (a) INDEPENDENT AUDITS.—

11 (1) The Organization shall have an annual

12 independent audit made of its financial statements

13 by an independent public accountant in accordance

14 with generally accepted auditing standards.

15 (2) In conducting an audit under this sub16 section, the independent public accountant shall de17 termine and report on whether the financial state18 ments of the Organization (A) are presented fairly

19 in accordance with generally accepted accounting

20 principles, and (B) to the extent determined nec21 essary by the Director of the Office of Federal

22 Housing Enterprise Oversight of the Department of

23 Housing and Urban Development, comply with any

24 disclosure requirements imposed under section 401.

25 (b) GAO AUDITS.—
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1 (1) Beginning after the first two years of the

2 Organization’s operation, unless earlier required by

3 any other statute, grant or agreement, the pro4 grams, activities, receipts, expenditures, and finan5 cial transactions of the Organization shall be subject

6 to audit by the Comptroller General of the United

7 States under such rules and regulations as may be

8 prescribed by the Comptroller General.

9 (2) To carry out this subsection, the represent10 atives of the General Accounting Office shall have

11 access to all books, accounts, financial records, re12 ports, files and all other papers, things, or property

13 belonging to or in use by the Organization and nec14 essary to facilitate the audit, and they shall be af15 forded full facilities for verifying transactions with

16 the balances or securities held by depositaries, fiscal

17 agents, and custodians. The representatives of the

18 General Accounting Office shall also have access,

19 upon request to the Organization or any auditor for

20 an audit of the Organization under subsection (a),

21 to any books, accounts, financial records, reports,

22 files, or other papers, things, or property belonging

23 to or in use by the Organization and used in any

24 such audit and to any papers, records, files, and re25 ports of the auditor used in such an audit.
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1 (3) A report on each such audit shall be made

2 by the Comptroller General to the Congress.

3 (4) The Organization shall reimburse the Gen4 eral Accounting Office for the full cost of any such

5 audit as billed therefor by the Comptroller General.

6 SEC. 205. ANNUAL HOUSING AND ECONOMIC DEVELOP7 MENT REPORTS.

8 The Organization shall collect, maintain, and provide

9 to the Secretary of Housing and Urban Development, in

10 a form determined by the Secretary, such data relating

11 to its mortgages on housing consisting of one to four

12 dwelling units and of more than four dwelling units and

13 to its activities relating to economic development as the

14 Secretary deems appropriate.

15 SEC. 206. ADVISORY COUNCIL.

16 (a) ESTABLISHMENT.—The Board of Directors shall

17 establish an Advisory Council.

18 (b) MEMBERSHIP.—The Advisory Council shall con19 sist of thirteen members, one representative from each of

20 the twelve districts established by the Bureau of Indian

21 Affairs and one from Hawaii. Each member shall be ap22 pointed by the Board of Directors. No fewer than six of

23 the members of the Advisory Council shall have financial

24 expertise. No fewer than nine of the Advisory Council shall

25 be Native Americans. Each member shall be appointed for
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1 a term of four years; except that the initial council shall

2 be appointed as follows: four members will have a two3 year term, four members will have a three-year term, and

4 the remaining five members will have a four-year term,

5 all as designated by the Board of Directors at the time

6 of their appointments.

7 (c) DUTIES.—The Advisory Council shall advise the

8 Board of Directors on all policy matters of the Organiza9 tion. Through the regional representation of its members,

10 the Council shall provide information to the Board from

11 all sectors of the Native American community.

12 SEC. 301. CAPITALIZATION OF THE ORGANIZATION.

13 (a) CLASS A STOCK.—The Class A stock of the Orga14 nization shall be issued to Indian Tribes. The allocation

15 shall be by population as determined by the Secretary of

16 Housing and Urban Development in consultation with the

17 Secretary of the Interior. The class A stock shall have

18 such par value and other characteristics as the Organiza19 tion provides. The class A stock shall be vested with voting

20 rights, each share being entitled to one vote. The class

21 A stock is nontransferable only and it shall be surrendered

22 to the Organization in the event the holder is no longer

23 recognized as an Indian Tribe under this Act.

24 (b) CLASS B STOCK.—The Organization is author25 ized to issue class B stock evidencing capital contributions
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1 in the manner and amount, and subject to any limitations

2 on concentration of ownership, as may be established by

3 the Organization. When authorized to be issued, the class

4 B stock shall be available for purchase by investors, and

5 shall be entitled to such dividends as may be declared by

6 the Board of Directors in accordance with subsection (c).

7 The class B stock shall have such par value and other

8 characteristics as the Organization provides. The class B

9 stock shall be vested with voting rights, each share being

10 entitled to one vote. The class B stock is transferable only

11 on the books of the Organization.

12 (c) CHARGES AND FEES; EARNINGS.—

13 (1) The Organization may impose charges or

14 fees, which may be regarded as elements of pricing,

15 with the objective that all costs and expenses of the

16 operations of the Organization should be within its

17 income derived from such operations and that such

18 operations would be fully self-supporting.

19 (2) All earnings from the operations of the Or20 ganization shall be annually transferred to the gen21 eral surplus account of the Organization. At any

22 time, funds in the general surplus account may, in

23 the discretion of the Board of Directors, be trans24 ferred to reserves.

25 (d) CAPITAL DISTRIBUTIONS.—
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1 (1) Except as provided in paragraph (2), the

2 Organization may make such capital distributions

3 (as such term is defined in section 1303 of the Fed4 eral Housing Enterprises Financial Safety and

5 Soundness Act of 1992) as may be declared by the

6 Board of Directors. All capital distributions shall be

7 charged against the general surplus account of the

8 Organization.

9 (2) The Organization may not make any capital

10 distribution that would decrease the total capital (as

11 such term is defined in section 1303 of the Federal

12 Housing Enterprises Financial Safety and Sound13 ness Act of 1992) of the Organization to an amount

14 less than the capital level for the Organization estab15 lished under section 401 without prior written ap16 proval of the distribution by the Director of the Of17 fice of Federal Housing Enterprise Oversight of the

18 Department of Housing and Urban Development.

19 SEC. 302. OBLIGATIONS AND SECURITIES OF THE ORGANI20 ZATION.

21 (a) OBLIGATIONS.—The Organization is authorized

22 to borrow money, to give security, to pay interest or other

23 return, and to issue upon the approval of the Secretary

24 of the Treasury, notes, debentures, bonds, or other obliga25 tions having maturities and bearing such rate or rates of
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1 interest as may be determined by the Organization with

2 the approval of the Secretary of the Treasury, provided

3 that such borrowing and issuing of obligations qualifies

4 as a transaction by an issuer not involving any public of5 fering under section 4(2) of the Securities Act of 1933.

6 Obligations issued by the Organization under this section

7 shall not be obligations of, nor shall payment of the prin8 cipal of or interest on such obligations be guaranteed by,

9 the United States or any agency thereof, and the obliga10 tions shall so plainly state.

11 (b) RESALES OF QUALIFYING MORTGAGE LOANS.—

12 The sale or other disposition by the Organization of quali13 fying mortgage loans under section 202(b)(1) shall be

14 upon such terms and conditions relating to resale, repur15 chase, substitution, replacement or otherwise as the Orga16 nization may prescribe, except that the Organization may

17 not guarantee or insure the payment of any mortgage loan

18 sold under section 202(b)(1).

19 (c) SECURITIES BACKED BY NONQUALIFYING MORT20 GAGE LOANS.—Securities in the form of debt obligations

21 or trust certificates of beneficial interest, or both, and

22 based upon nonqualifying mortgage loans held and set

23 aside by the Organization under section 202(b)(2), may

24 be issued upon the approval of the Secretary of the Treas25 ury and shall have such maturities and shall bear such
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1 rate or rates of interest as may be determined by the Or2 ganization with the approval of the Secretary of the Treas3 ury provided that such issuing of securities qualifies as

4 a transaction by an issuer not involving any public offering

5 under section 4(2) of the Securities Act of 1933.

6 (d) PROHIBITIONS AND RESTRICTIONS; CREATION

7 OF LIENS AND CHARGES; RANK AND PRIORITY; CAUSES

8 OF ACTION TO ENFORCE; JURISDICTION; SERVICE OF

9 PROCESS.—The Organization may, by regulation or by

10 writing executed by the Organization, establish prohibi11 tions or restrictions upon the creation of indebtedness or

12 obligations of the Organization or of liens or charges upon

13 property of the Organization, including after-acquired

14 property, and create liens and charges, which may be

15 floating liens or charges, upon all or any part or parts

16 of the property of the Organization, including after-ac17 quired property. Such prohibitions, restrictions, liens, and

18 charges shall have such effect, including without limitation

19 on the generality of the foregoing such rank and priority,

20 as may be provided by regulations of the Organization or

21 by writings executed by the Organization, and shall create

22 causes of action which may be enforced by action in the

23 United States District Court for the District of Columbia

24 or in the United States district court for any judicial dis25 trict in which any of the property affected is located. Proc-
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1 ess in any such action may run to and be served in any

2 judicial district or any place subject to the jurisdiction of

3 the United States.

4 (e) VALIDITY OF PROVISIONS; VALIDITY OF RE5 STRICTIONS, PROHIBITIONS, LIENS, OR CHARGES.—The

6 provisions of this section and of any restriction, prohibi7 tion, lien, or charge referred to in subsection (b) shall be

8 fully effective notwithstanding any other law, including

9 without limitation on the generality of the foregoing any

10 law of or relating to sovereign immunity or priority.

11 SEC. 303. LIMIT ON TOTAL ASSETS AND LIABILITIES.

12 The aggregate of—

13 (1) the total equity of the Organization, includ14 ing all capital from any issuance of class B stock;

15 and

16 (2) the total liabilities of the Organization, in17 cluding all obligations issued or incurred by the Or18 ganization,

19 shall not at any time exceed $20,000,000.

20 SEC. 401. REGULATION, EXAMINATION, REPORTS—OFHEO.

21 (a) EFFECTIVE DATE OF SECTION.—The provisions

22 of this section shall be effective on the date the Secretary

23 of Housing and Urban Development makes the determina24 tion in accordance with the provisions of section 202(b),
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1 that the Organization is authorized to purchase and sell

2 mortgages and mortgage-backed securities.

3 (b) IN GENERAL.—The Organization shall be subject

4 to the regulatory authority of the Office of Federal Hous5 ing Enterprise Oversight of the Department of Housing

6 and Urban Development with respect to all matters relat7 ing to the financial safety and soundness of the Organiza8 tion.

9 (c) DUTY OF DIRECTOR OF OFHEO.—The duty of

10 the Director of the Office of Federal Housing Enterprise

11 Oversight shall be to ensure that the Organization is ade12 quately capitalized and operating safely as a Congression13 ally chartered body corporate.

14 (d) POWERS OF DIRECTOR OF OFHEO.—The Direc15 tor of the Office of Federal Housing Enterprise Oversight

16 shall have all of the exclusive powers granted the Director

17 under section 1313 (b), (d), and (e) of the Housing and

18 Community Development Act of 1992, as determined by

19 the Director to be necessary or appropriate to regulate the

20 operations of the Organization.

21 (e) REPORTS TO DIRECTOR OF OFHEO.—

22 (1) The Organization shall submit to the Direc23 tor of the Office of Federal Housing Enterprise

24 Oversight annual reports of the financial condition

25 and operations of the Organization which shall be in
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1 such form, contain such information, and be submit2 ted on such dates as the Director shall require.

3 (2) The Organization shall also submit to the

4 Director any other reports required by the Director

5 pursuant to section 1314 of the Housing and Com6 munity Development Act of 1992.

7 (3) Each report shall contain a declaration by

8 the president, vice president, treasurer, or any other

9 officer designated by the Board of Directors of the

10 Organization to make such declaration, that the re11 port is true and correct to the best of such officer’s

12 knowledge and belief.

13 (f) FUNDING OFHEO OVERSIGHT.—

14 (1) The Director of the Office of Federal Hous15 ing Enterprise Oversight shall assess and collect

16 from the Organization such amounts as are nec17 essary to reimburse the Office for the reasonable

18 costs and expenses of the activities undertaken by

19 the Office to carry out the duty of the Director

20 under paragraph (2), including the costs of examina21 tions and overhead expenses.

22 (2) Annual assessments imposed by the Direc23 tor shall be—

24 (A) imposed prior to October 1 of each

25 year;
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1 (B) collected at such time or times during

2 each assessment year as determined necessary

3 or appropriate by the Director;

4 (C) deposited into the Federal Housing

5 Enterprises Oversight Fund established by sec6 tion 1316(f) of the Housing and Community

7 Development Act of 1992; and

8 (D) available, to the extent provided in ap9 propriations Acts, for carrying out the Direc10 tor’s responsibilities under this section.

11 SEC. 402. REGULATION OF THE SECRETARY OF HUD.

12 Except for the authority of the Director of the Office

13 of Federal Housing Enterprise Oversight as provided in

14 section 401, the Secretary of Housing and Urban Develop15 ment shall have general regulatory power over the Organi16 zation and shall make such rules and regulations applica17 ble to the Organization as determined necessary or appro18 priate by the Secretary of Housing and Urban Develop19 ment to ensure that the purposes of this Act are accom20 plished.

21 SEC. 501. FORMATION OF NEW CORPORATION.

22 (a) IN GENERAL.—In order to continue the accom23 plishment of the purposes of this Act beyond the terms

24 of the Federal charter of the Organization, the Board of

25 Directors shall, not later than 10 years after the date of
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1 enactment of this Act, cause the formation of a new cor2 poration under the laws of any Tribe, any State of the

3 United States or the District of Columbia.

4 (b) POWERS OF NEW CORPORATION NOT PRE5 SCRIBED.—Except as provided in this section, the new

6 corporation may have whatever corporate powers and at7 tributes permitted under the laws of the jurisdiction of its

8 incorporation which the Board of Directors shall deter9 mine, in its business judgment, to be appropriate.

10 (c) USE OF NAFSO NAME PROHIBITED.—The new

11 corporation may not use in any manner the names ‘‘Native

12 American Financial Services Organization’’, ‘‘NAFSO’’ or

13 any variation of either thereof.

14 SEC. 502. ADOPTION AND APPROVAL OF MERGER PLAN.

15 (a) IN GENERAL.—Not later than ten years after the

16 date of enactment of this Act, the Board of Directors shall

17 prepare, adopt, and submit to the Secretary of Housing

18 and Urban Development and the Secretary of the Treas19 ury for approval, a plan for merging the Congressionally

20 chartered Organization into the nonfederally chartered

21 new corporation.

22 (b) DESIGNATED MERGER DATE.—

23 (1) The Board of Directors shall establish the

24 designated merger date in the merger plan as a spe25 cific calendar date and time of day at which the
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1 merger of the Organization into the new corporation

2 shall be effective.

3 (2) The Board of Directors may change the

4 designated merger plan by adopting an amended

5 plan of merger.

6 (3) Except as provided in paragraph (4), the

7 designated merger date in the merger plan or any

8 amended merger plan shall be not later than eleven

9 years after the date of enactment of this Act.

10 (4) The Board of Directors may adopt an

11 amended plan of merger that designates a date later

12 than eleven years after the date of enactment of this

13 Act if the Board of Directors submits to both the

14 Secretary of Housing and Urban Development and

15 the Secretary of the Treasury a report—

16 (A) stating that an orderly merger of the

17 Organization into the new corporation is not

18 feasible before the last date designated by the

19 Board of Directors;

20 (B) explaining why an orderly merger of

21 the Organization into the new corporation is

22 not feasible before the last date designated by

23 the Board of Directors;

24 (C) describing the steps that have been

25 taken to consummate an orderly merger of the
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1 Organization into the new corporation not later

2 than eleven years after the date of enactment of

3 this Act; and

4 (D) describing the steps that will be taken

5 to consummate an orderly and timely merger of

6 the Organization into the new corporation.

7 (5) In no case shall any date designated by the

8 Board of Directors in an amended merger plan be

9 later than 23 years after the date of enactment of

10 this Act.

11 (6) In no case shall the consummation of an or12 derly and timely merger of the Organization into the

13 new corporation occur later than thirteen years after

14 the date of enactment of this Act.

15 (c) GOVERNMENTAL APPROVALS OF MERGER PLAN

16 REQURIED.—The merger plan or any amended merger

17 plan shall not be effective until it has been approved by

18 both the Secretary of Housing and Urban development

19 and the Secretary of the Treasury.

20 (d) REVISION OF DISAPPROVED MERGER PLAN RE21 QUIRED.—If either the Secretary of Housing and Urban

22 Development or the Secretary of the Treasury, or both,

23 disapprove the merger plan or any amended merger plan,

24 the disapproving Secretary or Secretaries shall so notify

25 the Organization and indicate the reasons for that dis-
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1 approval, and the Organization shall submit to the Sec2 retary or Secretaries an amended merger plan responsive

3 to such reasons within thirty days from the date of notifi4 cation of disapproval.

5 (e) NO STOCKHOLDER APPROVAL OF MERGER PLAN

6 REQUIRED.—No approval or consent of the stockholders

7 of the Organization shall be required to accomplish the

8 merger of the Organization into the new corporation.

9 SEC. 503. CONSUMMATION OF MERGER.

10 The Board of Directors shall cause the merger of the

11 Organization into the new corporation to be accomplished

12 according to the merger plan approved by the Secretary

13 of Housing and Urban Development and the Secretary of

14 the Treasury and all applicable requirements of the law

15 of the jurisdiction of incorporation of the new corporation.

16 SEC. 504. TRANSITION.

17 (a) CONTINUATION OF RIGHTS, DUTIES, AND RE18 STRICTIONS.—Except as provided in this section, the Or19 ganization shall, during the transition period, continue to

20 have all of the rights, privileges, duties, and obligations,

21 and be subject to all of the limitations and restrictions,

22 set forth in this Act.

23 (b) COLLATERALIZATION OF OUTSTANDING OBLIGA24 TIONS.—The Organization shall provide for all debt obli25 gations of the Organization which are outstanding on the
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1 day before the designated merger date to be secured as

2 to principal and interest by obligations of the United

3 States held in trust for the holders of such obligations.

4 The collateralization and the trust shall be subject to such

5 requirements, terms and conditions as the Secretary of the

6 Treasury deems necessary or appropriate.

7 (c) ISSUANCE OF NEW OBLIGATIONS DURING TRAN8 SITION PERIOD.—As needed to carry out the purposes for

9 which it was formed, the Organization may, during the

10 transition period, continue to issue obligations under sec11 tion 303, provided that any new obligation issued during

12 the transition period shall mature before the designated

13 merger date.

14 SEC. 505. EFFECT OF MERGER.

15 (a) TRANSFER OF ASSETS AND LIABILITIES.—

16 (1) At the designated merger date, all property,

17 real, personal, and mixed, and all debts due on

18 whatever account, and all other choses in action and

19 all and every other interest of or belonging to or due

20 to the Organization shall be transferred to and vest21 ed in the new corporation without further act or

22 deed, and title to any property, whether real, per23 sonal, or mixed, shall not in any way be impaired by

24 reason of the merger.
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1 (2) At the designated merger date, the new cor2 poration shall be responsible and liable for all obliga3 tions and liabilities of the Organization and neither

4 the rights of creditors nor any liens upon the prop5 erty of the Organization shall be impaired by the

6 merger.

7 (b) TERMINATION OF THE ORGANIZATION AND ITS

8 FEDERAL CHARTER.—At the designated merger date, the

9 surviving corporation of the merger shall be the new cor10 poration, the Federal charter of the Organization shall

11 terminate, and the separate existence of the Organization

12 shall terminate.

13 (c) REFERENCES TO THE ORGANIZATION IN ACTS OF

14 CONGRESS.—From and after the designated merger date,

15 any reference to the Organization in any Act of Congress

16 or in any rule or regulation promulgated under any Act

17 of Congress shall not be deemed to refer to the new cor18 poration.

19 (d) SAVINGS CLAUSE.—

20 (1) The merger of the Organization into the

21 new corporation shall not abate any proceeding com22 menced by or against the Organization before the

23 designated merger date, except that the new cor24 poration shall be substituted for the Organization as
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1 a party to any such proceeding as of the designated

2 merger date.

3 (2) All contracts and agreements to which the

4 Organization is a party and which are in effect on

5 the day before the designated merger date shall con6 tinue in effect according to their terms, except that

7 the new corporation shall be substituted for the Or8 ganization as a party to those contracts and agree9 ments as of the designated merger date.

10 (3) Nothing in this Act affects the trust respon11 sibility of the United States or any legal obligation

12 or remedy arising therefrom.

13 SEC. 601. AUTHORIZATION OF APPROPRIATIONS FOR NA14 TIVE AMERICAN FINANCIAL INSTITUTIONS.

15 There is authorized to be appropriated, without fiscal

16 year limitation, to the Fund $20,000,000 to provide finan17 cial assistance to Native American Financial Institutions.

18 To the extent that a Native American Financial Institu19 tion receives a portion of such appropriation, such monies

20 shall not be considered as matching funds required of the

21 Native American Financial Institution under the Commu22 nity Development Banking and Financial Institutions Act.
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1 SEC. 602. AUTHORIZATION OF APPROPRIATIONS FOR OR2 GANIZATION.

3 The Secretary of Housing and Urban Development

4 is authorized, to the extent and in the amounts provided

5 in advance in appropriation Acts, to provide up to

6 $10,000,000 to the Fund for the funding of a cooperative

7 agreement to be entered into by the Fund and the Organi8 zation for the technical assistance and other services to

9 be provided by the Organization to the Native American

10 Financial Institutions.

Æ

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