I

104TH CONGRESS

1ST SESSION H. R. 2412

To improve the economic conditions and supply of housing in Native American

communities by creating the Native American Financial Services Organization, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 27, 1995

Mr. YOUNG of Alaska introduced the following bill; which was referred to the

Committee on Banking and Financial Services, and in addition to the

Committee on Resources, for a period to be subsequently determined by

the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To improve the economic conditions and supply of housing

in Native American communities by creating the Native

American Financial Services Organization, 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 1. SHORT TITLE.

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

5 ‘‘Native American Financial Services Organization Act of

6 1995’’.
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1 (b) TABLE OF CONTENTS.—The table of contents for

2 this Act is as follows:

Sec. 1. Short title.

TITLE I—STATEMENT OF POLICY; DEFINITIONS

Sec. 101. Policy.

Sec. 102. Statement of purposes.

Sec. 103. Definitions.

TITLE II—NATIVE AMERICAN FINANCIAL SERVICES

ORGANIZATION

Sec. 201. Establishment of the organization.

Sec. 202. Authorized assistance and service functions.

Sec. 203. Native American lending services grant.

Sec. 204. Audits.

Sec. 205. Annual housing and economic development reports.

Sec. 206. Advisory Council.

TITLE III—CAPITALIZATION OF ORGANIZATION

Sec. 301. Capitalization of the organization.

Sec. 302. Obligations and securities of the organization.

Sec. 303. Limit on total assets and liabilities.

TITLE IV—REGULATION, EXAMINATION, AND REPORTS

Sec. 401. Regulation, examination, and reports.

Sec. 402. Authority of the Secretary of Housing and Urban Development.

TITLE V—FORMATION OF NEW CORPORATION

Sec. 501. Formation of new corporation.

Sec. 502. Adoption and approval of merger plan.

Sec. 503. Consummation of merger.

Sec. 504. Transition.

Sec. 505. Effect of merger.

TITLE VI—AUTHORIZATIONS OF APPROPRIATIONS

Sec. 601. Authorization of appropriations for Native American Financial Institutions.

Sec. 602. Authorization of appropriations for organization.

3 TITLE I—STATEMENT OF

4 POLICY; DEFINITIONS

5 SEC. 101. POLICY.

6 (a) IN GENERAL.—Based upon the findings and rec7 ommendations of the Commission on American Indian,
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1 Alaska Native and Native Hawaiian Housing established

2 by the Department of Housing and Urban Development

3 Reform Act of 1989, the Congress has determined that—

4 (1) housing shortages and deplorable living con5 ditions are at crisis proportions in Native American

6 communities throughout the United States; and

7 (2) the lack of private capital to finance hous8 ing and economic development for Native Americans

9 and Native American communities seriously exacer10 bates these housing shortages and poor living condi11 tions.

12 (b) POLICY OF THE UNITED STATES TO ADDRESS

13 NATIVE AMERICAN HOUSING SHORTAGE.—It is the policy

14 of the United States to improve the economic conditions

15 and supply of housing in Native American communities

16 throughout the United States by creating the Native

17 American Financial Services Organization to address the

18 housing shortages and poor living conditions described in

19 subsection (a).

20 SEC. 102. STATEMENT OF PURPOSES.

21 The purposes of this Act are—

22 (1) to help serve the mortgage and other lend23 ing needs of Native Americans by assisting in the es24 tablishment and organization of Native American

25 Financial Institutions, developing and providing fi-
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1 nancial expertise and technical assistance to Native

2 American Financial Institutions, including assist3 ance concerning overcoming—

4 (A) barriers to lending with respect to Na5 tive American lands; and

6 (B) the past and present impact of dis7 crimination;

8 (2) to promote access to mortgage credit in Na9 tive American communities in the United States by

10 increasing the liquidity of financing for housing and

11 improving the distribution of investment capital

12 available for such financing, primarily through Na13 tive American Financial Institutions;

14 (3) to promote the infusion of public capital

15 into Native American communities throughout the

16 United States and to direct sources of public and

17 private capital into housing and economic develop18 ment for Native American individuals and families,

19 primarily through Native American Financial Insti20 tutions; and

21 (4) to provide ongoing assistance to the second22 ary market for residential mortgages and economic

23 development loans for Native American individuals

24 and families, Native American Financial Institu25 tions, and other borrowers by increasing the liquidity
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1 of such investments and improving the distribution

2 of investment capital available for such financing.

3 SEC. 103. DEFINITIONS.

4 For purposes of this Act, the following definitions

5 shall apply:

6 (1) ALASKA NATIVE.—The term ‘‘Alaska Na7 tive’’ has the meaning given the term ‘‘Native’’ by

8 section 3(b) of the Alaska Native Claims Settlement

9 Act.

10 (2) BOARD.—The term ‘‘Board’’ means the

11 Board of Directors of the Organization established

12 under section 201(a)(2).

13 (3) CHAIRPERSON.—The term ‘‘Chairperson’’

14 means the chairperson of the Board.

15 (4) COUNCIL.—The term ‘‘Council’’ means the

16 Advisory Council established under section 206.

17 (5) DESIGNATED MERGER DATE.—The term

18 ‘‘designated merger date’’ means the specific cal19 endar date and time of day designated by the Board

20 under section 502(b).

21 (6) DIRECTOR.—The term ‘‘Director’’ means

22 the Director of the Office of Federal Housing Enter23 prise Oversight of the Department of Housing and

24 Urban Development.
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1 (7) FUND.—The term ‘‘Fund’’ means the Com2 munity Development Financial Institutions Fund es3 tablished under section 104 of the Riegle Commu4 nity Development and Regulatory Improvement Act

5 of 1994.

6 (8) INDIAN TRIBE.—The term ‘‘Indian tribe’’

7 means any Indian tribe, band, nation, or other orga8 nized group or community, including any Alaska Na9 tive village or regional or village corporation as de10 fined in or established pursuant to the Alaska Na11 tive Claims Settlement Act that is recognized as eli12 gible for the special programs and services provided

13 by the Federal Government to Indians because of

14 their status as Indians.

15 (9) MERGER PLAN.—The term ‘‘merger plan’’

16 means the plan of merger adopted by the Board

17 under section 502(a).

18 (10) NATIVE AMERICAN.—The term ‘‘Native

19 American’’ means any member of an Indian tribe.

20 (11) NATIVE AMERICAN FINANCIAL INSTITU21 TION.—The term ‘‘Native American Financial Insti22 tution’’ means a person (other than an individual)

23 that—

24 (A) qualifies as a community development

25 financial institution under section 103 of the
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1 Riegle Community Development and Regulatory

2 Improvement Act of 1994;

3 (B) satisfies the requirements established

4 by the Riegle Community Development and

5 Regulatory Improvement Act of 1994 and the

6 Fund for applicants for assistance from the

7 Fund;

8 (C) demonstrates a special interest and ex9 pertise in serving the primary economic develop10 ment and mortgage lending needs of the Native

11 American community; and

12 (D) demonstrates that the person has the

13 endorsement of the Native American commu14 nity that the person intends to serve.

15 (12) NATIVE AMERICAN LENDER.—The term

16 ‘‘Native American lender’’ means a Native American

17 governing body, Native American housing authority,

18 or other Native American Financial Institution that

19 acts as a primary mortgage or economic develop20 ment lender in a Native American community.

21 (13) NEW CORPORATION.—The term ‘‘new cor22 poration’’ means the corporation formed in accord23 ance with title V.

24 (14) NONQUALIFYING MORTGAGE LOAN.—The

25 term ‘‘nonqualifying mortgage loan’’ means a mort-
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1 gage loan that is determined by the Organization, on

2 the basis of the quality, type, class, or principal

3 amount of the loan, to fail to meet the purchase

4 standards of the Federal National Mortgage Asso5 ciation or the Federal Home Loan Mortgage Cor6 poration in effect on September 30, 1994.

7 (15) ORGANIZATION.—The term ‘‘Organiza8 tion’’ means the Native American Financial Services

9 Organization established under section 201.

10 (16) QUALIFYING MORTGAGE LOAN.—The term

11 ‘‘qualifying mortgage loan’’ means a mortgage loan

12 that is determined by the Organization, on the basis

13 of the quality, type, class or principal amount of the

14 loan, to meet the purchase standards of the Federal

15 National Mortgage Association or the Federal Home

16 Loan Mortgage Corporation in effect on September

17 30, 1994.

18 (17) TRANSITION PERIOD.—The term ‘‘transi19 tion period’’ means the period beginning on the date

20 on which the merger plan is approved by both the

21 Secretary of Housing and Urban Development and

22 the Secretary of the Treasury and ending on the

23 designated merger date.
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1 TITLE II—NATIVE AMERICAN FI2 NANCIAL SERVICES ORGANI3 ZATION

4 SEC. 201. ESTABLISHMENT OF THE ORGANIZATION.

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

6 PRINCIPAL OFFICE; MEMBERSHIP; VACANCIES.—

7 (1) CREATION.—

8 (A) IN GENERAL.—There is established

9 and chartered a corporation to be known as the

10 Native American Financial Services Organiza11 tion.

12 (B) PERIOD OF TIME.—The Organization

13 shall be a congressionally chartered body cor14 porate until the earlier of—

15 (i) the designated merger date; or

16 (ii) the date on which the charter is

17 surrendered by the Organization.

18 (C) CHANGES TO CHARTER.—The right to

19 revise, amend, or modify the Organization char20 ter is specifically and exclusively reserved to the

21 Congress.

22 (2) BOARD OF DIRECTORS; PRINCIPAL OF23 FICE.—

24 (A) BOARD.—The powers of the Organiza25 tion shall be vested in a Board of Directors.
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1 The Board shall determine the policies that

2 govern the operations and management of the

3 Organization.

4 (B) PRINCIPAL OFFICE; RESIDENCY.—The

5 principal office of the Organization shall be in

6 the District of Columbia. For purposes of

7 venue, the Organization shall be considered to

8 be a resident of the District of Columbia.

9 (3) MEMBERSHIP.—

10 (A) IN GENERAL.—

11 (i) NINE MEMBERS.—Except as pro12 vided in clause (ii), the Board shall consist

13 of 9 members, 3 of whom shall be ap14 pointed by the President and 6 of whom

15 shall be elected by the class A stockhold16 ers, in accordance with the bylaws of the

17 Organization.

18 (ii) THIRTEEN MEMBERS.—If class B

19 stock is issued under section 301(b), the

20 Board shall consist of 13 members, 9 of

21 whom shall be appointed and elected in ac22 cordance with clause (i) and 4 of whom

23 shall be elected by the class B stockhold24 ers, in accordance with the bylaws of the

25 Organization.
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1 (B) TERMS.—Each member of the Board

2 shall be elected or appointed for a 4-year term,

3 except that the members of the initial Board

4 shall be elected or appointed for the following

5 terms:

6 (i) Of the 3 members appointed by

7 the President—

8 (I) 1 member shall be appointed

9 for a 2-year term;

10 (II) 1 member shall be appointed

11 for a 3-year term; and

12 (III) 1 member shall be ap13 pointed for a 4-year term;

14 as designated by the President at the time

15 of the appointments.

16 (ii) Of the 6 members elected by the

17 class A stockholders—

18 (I) 2 members shall each be

19 elected for a 2-year term;

20 (II) 2 members shall each be

21 elected for a 3-year term; and

22 (III) 2 members shall each be

23 elected for a 4-year term.
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1 (iii) If class B stock is issued and 4

2 additional members are elected by the class

3 B stockholders—

4 (I) 1 member shall be elected for

5 a 2-year term;

6 (II) 1 member shall be elected

7 for a 3-year term; and

8 (III) 2 members shall each be

9 elected for a 4-year term.

10 (C) QUALIFICATIONS.—Each member ap11 pointed by the President shall have expertise in

12 1 or more of the following areas:

13 (i) Native American housing and eco14 nomic development programs.

15 (ii) Financing in Native American

16 communities.

17 (iii) Native American governing bodies

18 and court systems.

19 (iv) Restricted and trust land issues,

20 economic development, and small consumer

21 loans.

22 (D) CHAIRPERSON.—The Board shall se23 lect a Chairperson from among its members, ex24 cept that the initial Chairperson shall be se25 lected from among the members of the initial
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1 Board who have been appointed or elected to

2 serve for a 4-year term.

3 (E) VACANCIES.—

4 (i) APPOINTED MEMBERS.—Any va5 cancy in the appointed membership of the

6 Board shall be filled by appointment by the

7 President, but only for the unexpired por8 tion of the term.

9 (ii) ELECTED MEMBERS.—Any va10 cancy in the elected membership of the

11 Board shall be filled by appointment by the

12 Board, but only for the unexpired portion

13 of the term.

14 (F) TRANSITIONS.—Any member of the

15 Board may continue to serve after the expira16 tion of the term for which the member was ap17 pointed or elected until a qualified successor

18 has been appointed or elected.

19 (b) POWERS OF THE ORGANIZATION.—The Organi20 zation may—

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

22 (2) adopt bylaws, consistent with this Act, regu23 lating, among other things, the manner in which—

24 (A) the business of the Organization shall

25 be conducted;
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1 (B) the elected members of the Board shall

2 be elected;

3 (C) the stock of the Organization shall be

4 issued, held, and disposed of;

5 (D) the property of the Organization shall

6 be disposed of; and

7 (E) the powers and privileges granted to

8 the Organization by this Act and other law

9 shall be exercised;

10 (3) make and perform contracts, agreements,

11 and commitments, including entering into a coopera12 tive agreement with the Fund;

13 (4) prescribe and impose fees and charges for

14 services provided by the Organization;

15 (5)(A) settle, adjust, and compromise; and

16 (B) with or without consideration or benefit to

17 the Organization, release or waive in whole or in

18 part, in advance or otherwise, any claim, demand, or

19 right of, by, or against the Organization;

20 if such settlement, adjustment, compromise, release,

21 or waiver is not adverse to the interests of the Unit22 ed States;

23 (6) sue and be sued, complain and defend, in

24 any tribal, Federal, State, or other court;
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1 (7) acquire, take, hold, and own, and to deal

2 with and dispose of any property;

3 (8) determine the necessary expenditures of the

4 Organization and the manner in which such expendi5 tures shall be incurred, allowed, and paid, and ap6 point, employ, and fix and provide for the compensa7 tion and benefits of officers, employees, attorneys,

8 and agents as the Board determines reasonable and

9 not inconsistent with this section;

10 (9) incorporate a new corporation under State,

11 District of Columbia, or tribal law, as provided in

12 section 501;

13 (10) adopt a plan of merger, as provided in sec14 tion 502;

15 (11) consummate the merger of the Organiza16 tion into the new corporation, as provided in section

17 503; and

18 (12) have succession until the designated merg19 er date or any earlier date on which the Organiza20 tion surrenders its Federal charter.

21 (c) INVESTMENT OF FUNDS; DESIGNATION AS DE22 POSITARY, CUSTODIAN, OR AGENT.—

23 (1) INVESTMENT OF FUNDS.—Funds of the Or24 ganization that are not required to meet current op25 erating expenses shall be invested in obligations of,
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1 or obligations guaranteed by, the United States or

2 any agency thereof, or in obligations, participations,

3 or other instruments that are lawful investments for

4 fiduciary, trust, or public funds.

5 (2) DESIGNATION AS DEPOSITARY, CUSTODIAN,

6 OR AGENT.—Any Federal Reserve bank or Federal

7 home loan bank, or any bank as to which at the time

8 of its designation by the Organization there is out9 standing a designation by the Secretary of the

10 Treasury as a general or other depositary of public

11 money, may—

12 (A) be designated by the Organization as

13 a depositary or custodian or as a fiscal or other

14 agent of the Organization; and

15 (B) act as such depositary, custodian, or

16 agent.

17 (d) ACTIONS BY AND AGAINST THE ORGANIZA18 TION.—Notwithstanding section 1349 of title 28, United

19 States Code, or any other provision of law—

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

21 agency covered under sections 1345 and 1442 of

22 title 28, United States Code;

23 (2) any civil action to which the Organization is

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

25 the United States, and the appropriate district court
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1 of the United States shall have original jurisdiction

2 over any such action, without regard to amount or

3 value; and

4 (3) any civil or other action, case, or con5 troversy in a tribal court, court of a State, or in any

6 court other than a district court of the United

7 States, to which the Organization is a party, may at

8 any time before the commencement of the trial be

9 removed by the Organization, without the giving of

10 any bond or security and by following any procedure

11 for removal of causes in effect at the time of the re12 moval—

13 (A) to the district court of the United

14 States for the district and division in which the

15 action is pending;

16 (B) or, if there is no such district court, to

17 the district court of the United States for the

18 District of Columbia.

19 SEC. 202. AUTHORIZED ASSISTANCE AND SERVICE FUNC20 TIONS.

21 (a) TECHNICAL ASSISTANCE AND SERVICES.—The

22 Organization may—

23 (1) assist the Fund in the establishment and

24 organization of Native American Financial Institu25 tions;
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1 (2) assist the Fund in developing and providing

2 financial expertise and technical assistance to Native

3 American Financial Institutions, including methods

4 of underwriting, securing, servicing, packaging, and

5 selling mortgage and small commercial and

6 consumer loans;

7 (3) develop and provide specialized technical as8 sistance on overcoming barriers to primary mortgage

9 lending on Native American lands, including issues

10 related to trust lands, discrimination, high operating

11 costs, and inapplicability of standard underwriting

12 criteria;

13 (4) assist the Fund in providing mortgage un14 derwriting assistance (but not in originating loans)

15 under contract to Native American Financial Insti16 tutions;

17 (5) work with the Federal National Mortgage

18 Association, the Federal Home Loan Mortgage Cor19 poration, and other participants in the secondary

20 market for home mortgage instruments in identify21 ing and eliminating barriers to the purchase of Na22 tive American mortgage loans originated by Native

23 American Financial Institutions and other lenders in

24 Native American communities;
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1 (6) obtain capital investments in the Organiza2 tion from Indian tribes, Native American organiza3 tions, and other entities;

4 (7) assist the Fund in the operation of the Or5 ganization as an information clearinghouse by pro6 viding information on financial practices to Native

7 American Financial Institutions; and

8 (8) assist the Fund in monitoring and reporting

9 to the Congress on the performance of Native Amer10 ican Financial Institutions in meeting the economic

11 development and housing credit needs of Native

12 Americans.

13 (b) PURCHASES AND SALES OF MORTGAGES AND

14 MORTGAGE-BACKED SECURITIES.—

15 (1) IN GENERAL.—

16 (A) AUTHORIZATION.—If a determination

17 is made in accordance with subparagraph (B),

18 the Organization may, upon receipt of a written

19 authorization from the Secretary of Housing

20 and Urban Development under this paragraph,

21 carry out any activity described in paragraph

22 (3).

23 (B) DETERMINATION.—For purposes of

24 subparagraph (A), a determination made under

25 this section is a determination by the Secretary
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1 of Housing and Urban Development that the

2 combined purchases by the Federal National

3 Mortgage Association and the Federal Home

4 Loan Mortgage Corporation of residential Na5 tive American nonqualifying mortgage loans

6 originated by Native American Financial Insti7 tutions and other lenders on housing consisting

8 of between 1 and 4 dwelling units—

9 (i) in the second year following the es10 tablishment of the Organization, total less

11 than $20,000,000 (unless the Organization

12 can demonstrate to the Secretary of Hous13 ing and Urban Development that such pur14 chase goal could not be met); or

15 (ii) in any succeeding year, total less

16 than that amount that the Secretary of

17 Housing and Urban Development has de18 termined and published as a reasonable

19 Native American mortgage purchase goal

20 (in accordance with paragraph (2)) for

21 such combined purchases by the Federal

22 National Mortgage Association and the

23 Federal Home Loan Mortgage Corporation

24 in such year.
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1 (2) FACTORS CONSIDERED.—In determining

2 the purchase goal described in paragraph (1)(B)(ii),

3 the Secretary shall take into account the study by

4 the Fund of Native American lending and invest5 ment conducted pursuant to section 117(c) of the

6 Riegle Community Development and Regulatory Im7 provement Act of 1994.

8 (3) POWERS OF THE ORGANIZATION.—Upon re9 ceiving a written authorization from the Secretary of

10 Housing and Urban Development under paragraph

11 (1), the Organization may, at any time—

12 (A) with respect to residential mortgage

13 loans originated by Native American Financial

14 Institutions that are qualifying mortgage

15 loans—

16 (i) purchase such qualifying mortgage

17 loans;

18 (ii) hold such qualifying mortgage

19 loans for a period of not to exceed 12

20 months; and

21 (iii) resell such qualifying mortgage

22 loans to the Federal National Mortgage

23 Association, the Federal Home Loan Mort24 gage Corporation, or other secondary mar-
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1 ket participants, as provided in section

2 303(b);

3 (B) with respect to residential mortgage

4 loans originated by the Native American Finan5 cial Institutions that are nonqualifying mort6 gage loans—

7 (i) purchase such nonqualifying mort8 gage loans from the Native American Fi9 nancial Institutions for such terms as the

10 Organization determines to be appropriate,

11 including the life of the mortgage loan, if,

12 with respect to any such loan—

13 (I) the Organization has reason14 able assurance that the loan will be

15 repaid within the time agreed;

16 (II) the Native American Finan17 cial Institution selling the loan retains

18 a participation of not less than 10

19 percent in the mortgage;

20 (III) the Native American Finan21 cial Institution selling the loan agrees

22 for such period of time and under

23 such circumstances as the Organiza24 tion may require, to repurchase or re25 place the mortgage upon demand of
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1 the Organization in the event that the

2 loan is in default; or

3 (IV) that portion of the outstand4 ing principal balance of the loan

5 which exceeds 80 percent of the value

6 of the property securing such loan is

7 guaranteed or insured by a qualified

8 insurer, as determined by the Organi9 zation; and

10 (ii) issue mortgage-backed securities

11 or other forms of participations based on

12 pools of such nonqualifying mortgage

13 loans, as provided in section 303(c); and

14 (C) purchase, service, sell, lend on the se15 curity of, and otherwise deal in—

16 (i) residential mortgages that are se17 cured by a subordinate lien against a prop18 erty consisting of 1 to 4 dwelling units

19 that is the principal residence of the mort20 gagor; and

21 (ii) residential mortgages that are se22 cured by a subordinate lien against a prop23 erty consisting of five or more dwelling

24 units.

25 (4) RIGHTS AND REMEDIES.—
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1 (A) IN GENERAL.—The rights and rem2 edies of the Organization, including any rights

3 and remedies of the Organization on, under, or

4 with respect to any mortgage or any obligation

5 secured thereby, shall be immune from impair6 ment, limitation, or restriction by or under any

7 State, District of Columbia, or tribal—

8 (i) law that becomes effective after the

9 acquisition by the Organization of the sub10 ject or property on, under, or with respect

11 to which such right or remedy arises or ex12 ists or would so arise or exist in the ab13 sence of such law; or

14 (ii) administrative or other action that

15 becomes effective after such acquisition.

16 (B) QUALIFICATION.—The Organization

17 may conduct its business without regard to any

18 qualification or similar requirement in the Dis19 trict of Columbia, or any State or tribal juris20 diction.

21 SEC. 203. NATIVE AMERICAN LENDING SERVICES GRANT.

22 (a) INITIAL GRANT PAYMENT.—If the Fund and the

23 Organization enter into a cooperative agreement for the

24 Organization to provide technical assistance and other

25 services to Native American Financial Institutions, such
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1 agreement shall, to the extent that funds are available as

2 provided in section 602, provide that the initial grant pay3 ment, anticipated to be $5,000,000, shall be made when

4 all members of the initial Board have been appointed

5 under section 201.

6 (b) PAYMENT OF GRANT BALANCE.—The payment

7 of the grant balance of $5,000,000 shall be made to the

8 Organization not later than 1 year after the date on which

9 the initial grant payment is made under subsection (a).

10 SEC. 204. AUDITS.

11 (a) INDEPENDENT AUDITS.—

12 (1) IN GENERAL.—The Organization shall have

13 an annual independent audit made of its financial

14 statements by an independent public accountant in

15 accordance with generally accepted auditing stand16 ards.

17 (2) DETERMINATIONS.—In conducting an audit

18 under this subsection, the independent public ac19 countant shall determine and report on whether the

20 financial statements of the Organization—

21 (A) are presented fairly in accordance with

22 generally accepted accounting principles; and

23 (B) to the extent determined necessary by

24 the Director, comply with any disclosure re25 quirements imposed under section 401.
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1 (b) GAO AUDITS.—

2 (1) IN GENERAL.—Beginning after the first 2

3 years of the operation of the Organization, unless an

4 earlier date is required by any other statute, grant,

5 or agreement, the programs, activities, receipts, ex6 penditures, and financial transactions of the Organi7 zation shall be subject to audit by the Comptroller

8 General of the United States under such rules and

9 regulations as may be prescribed by the Comptroller

10 General.

11 (2) ACCESS.—To carry out this subsection, the

12 representatives of the General Accounting Office

13 shall—

14 (A) have access to all books, accounts, fi15 nancial records, reports, files, and all other pa16 pers, things, or property belonging to or in use

17 by the Organization and necessary to facilitate

18 the audit;

19 (B) be afforded full facilities for verifying

20 transactions with the balances or securities held

21 by depositaries, fiscal agents, and custodians;

22 and

23 (C) have access, upon request to the Orga24 nization or any auditor for an audit of the Or25 ganization under subsection (a), to any books,
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1 accounts, financial records, reports, files, or

2 other papers, or property belonging to or in use

3 by the Organization and used in any such audit

4 and to any papers, records, files, and reports of

5 the auditor used in such an audit.

6 (3) REPORTS.—The Comptroller General of the

7 United States shall submit to the Congress a report

8 on each audit conducted under this subsection.

9 (4) REIMBURSEMENT.—The Organization shall

10 reimburse the General Accounting Office for the full

11 cost of any audit conducted under this subsection.

12 SEC. 205. ANNUAL HOUSING AND ECONOMIC DEVELOP13 MENT REPORTS.

14 Not later than 1 year after the date of enactment

15 of this Act, and annually thereafter, the Organization shall

16 collect, maintain, and provide to the Secretary of Housing

17 and Urban Development, in a form determined by the Sec18 retary, such data as the Secretary determines to be appro19 priate with respect to the Organization’s—

20 (1) mortgages on properties consisting of be21 tween 1 and 4 dwelling units;

22 (2) mortgages on properties consisting of five or

23 more dwelling units; and

24 (3) activities relating to economic development.
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1 SEC. 206. ADVISORY COUNCIL.

2 (a) ESTABLISHMENT.—The Board shall establish an

3 Advisory Council in accordance with this section.

4 (b) MEMBERSHIP.—

5 (1) IN GENERAL.—The Council shall consist of

6 13 members, who shall be appointed by the Board,

7 including 1 representative from each of the 12 dis8 tricts established by the Bureau of Indian Affairs

9 and 1 representative from the State of Hawaii.

10 (2) QUALIFICATIONS.—Not less than 6 of the

11 members of the Council shall have financial exper12 tise, and not less than 9 members of the Council

13 shall be Native Americans.

14 (3) TERMS.—Each member of the Council shall

15 be appointed for a 4-year term, except that the ini16 tial Council shall be appointed, as designated by the

17 Board at the time of appointment, as follows:

18 (A) Four members shall each be appointed

19 for a 2-year term.

20 (B) Four members shall each be appointed

21 for a 3-year term.

22 (C) Five members shall each be appointed

23 for a 4-year term.

24 (c) DUTIES.—The Council shall advise the Board on

25 all policy matters of the Organization. Through the re26 gional representation of its members, the Council shall
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1 provide information to the Board from all sectors of the

2 Native American community.

3 TITLE III—CAPITALIZATION OF

4 ORGANIZATION

5 SEC. 301. CAPITALIZATION OF THE ORGANIZATION.

6 (a) CLASS A STOCK.—The class A stock of the Orga7 nization shall—

8 (1) be issued only to Indian tribes;

9 (2) be allocated on the basis of Indian tribe

10 population, as determined by the Secretary of Hous11 ing and Urban Development in consultation with the

12 Secretary of the Interior;

13 (3) have such par value and other characteris14 tics as the Organization shall provide;

15 (4) be vested with voting rights, each share

16 being entitled to 1 vote;

17 (5) be nontransferable; and

18 (6) be surrendered to the Organization if the

19 holder ceases to be recognized as an Indian tribe

20 under this Act.

21 (b) CLASS B STOCK.—

22 (1) IN GENERAL.—The Organization may issue

23 class B stock evidencing capital contributions in the

24 manner and amount, and subject to any limitations
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1 on concentration of ownership, as may be established

2 by the Organization.

3 (2) CHARACTERISTICS.—Any class B stock is4 sued under paragraph (1) shall—

5 (A) be available for purchase by investors;

6 (B) be entitled to such dividends as may

7 be declared by the Board in accordance with

8 subsection (c);

9 (C) have such par value and other charac10 teristics as the Organization shall provide;

11 (D) be vested with voting rights, each

12 share being entitled to 1 vote; and

13 (E) be transferable only on the books of

14 the Organization.

15 (c) CHARGES AND FEES; EARNINGS.—

16 (1) CHARGES AND FEES.—The Organization

17 may impose charges or fees, which may be regarded

18 as elements of pricing, with the objectives that—

19 (A) all costs and expenses of the oper20 ations of the Organization should be within the

21 income of the Organization derived from such

22 operations; and

23 (B) such operations would be fully self24 supporting.
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1 (2) EARNINGS.—All earnings from the oper2 ations of the Organization shall be annually trans3 ferred to the general surplus account of the Organi4 zation. At any time, funds in the general surplus ac5 count may, in the discretion of the Board, be trans6 ferred to the reserves of the Organization.

7 (d) CAPITAL DISTRIBUTIONS.—

8 (1) IN GENERAL.—Except as provided in para9 graph (2), the Organization may make such capital

10 distributions (as such term is defined in section

11 1303 of the Federal Housing Financial Safety and

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

13 Board. All capital distributions shall be charged

14 against the general surplus account of the Organiza15 tion.

16 (2) RESTRICTION.—The Organization may not

17 make any capital distribution that would decrease

18 the total capital (as such term is defined in section

19 1303 of the Federal Housing Financial Safety and

20 Soundness Act of 1992) of the Organization to an

21 amount less than the capital level for the Organiza22 tion established under section 401, without prior

23 written approval of the distribution by the Director.
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1 SEC. 302. OBLIGATIONS AND SECURITIES OF THE ORGANI2 ZATION.

3 (a) IN GENERAL.—

4 (1) AUTHORIZATION.—The Organization may—

5 (A) borrow funds to give security or pay

6 interest or other return; and

7 (B) issue upon the approval of the Sec8 retary of the Treasury, notes, debentures,

9 bonds, or other obligations having maturities

10 and bearing such rate or rates of interest as

11 may be determined by the Organization with

12 the approval of the Secretary of the Treasury;

13 if such borrowing and issuing of obligations qualifies

14 as a transaction by an issuer not involving any pub15 lic offering under section 4(2) of the Securities Act

16 of 1933.

17 (2) RESTRICTIONS.—

18 (A) IN GENERAL.—Obligations issued by

19 the Organization under this section shall not be

20 obligations of the United States or any agency

21 of the United States.

22 (B) NO GUARANTEES.—Payment of the

23 principal of or interest on such obligations shall

24 not be guaranteed by the United States or any

25 agency of the United States. The obligations is-
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1 sued by the Organization under this section

2 shall so plainly state.

3 (b) RESALES OF QUALIFYING MORTGAGE LOANS.—

4 The sale or other disposition by the Organization of quali5 fying mortgage loans under section 202(b) shall be on

6 such terms and conditions relating to resale, repurchase,

7 substitution, replacement or otherwise as the Organization

8 may prescribe, except that the Organization may not guar9 antee or insure the payment of any mortgage loan sold

10 under section 202(b).

11 (c) SECURITIES BACKED BY NONQUALIFYING MORT12 GAGE LOANS.—Securities in the form of debt obligations

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

14 based upon nonqualifying mortgage loans held and set

15 aside by the Organization under section 202(b)—

16 (1) may be issued upon the approval of the Sec17 retary of the Treasury; and

18 (2) shall have such maturities, and shall bear

19 such rate or rates of interest, as may be determined

20 by the Organization with the approval of the Sec21 retary of the Treasury;

22 if such issuance qualifies as a transaction by an issuer

23 not involving any public offering under section 4(2) of the

24 Securities Act of 1933.
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1 (d) PROHIBITIONS AND RESTRICTIONS; CREATION

2 OF LIENS AND CHARGES.—

3 (1) IN GENERAL.—The Organization may, by

4 regulation or by writing executed by the Organiza5 tion—

6 (A) establish prohibitions or restrictions on

7 the creation of indebtedness or obligations of

8 the Organization or of liens or charges upon

9 property of the Organization, including after-ac10 quired property; and

11 (B) create liens and charges, which may be

12 floating liens or charges, upon all or any part

13 or parts of the property of the Organization, in14 cluding after-acquired property.

15 (2) EFFECT.—Any prohibition, restriction, lien,

16 or charge established under paragraph (2) shall—

17 (A) have such effect, including such rank

18 and priority, as may be provided by regulations

19 of the Organization or by any writing executed

20 by the Organization; and

21 (B) create a cause of action which may be

22 enforced by action in the United States district

23 court for the District of Columbia or in the

24 United States district court for any judicial dis-
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1 trict in which any of the property affected is lo2 cated.

3 (3) JURISDICTION; SERVICE OF PROCESS.—

4 Process in any action described in paragraph (2)

5 may run to or be served in any judicial district or

6 in any place subject to the jurisdiction of the United

7 States.

8 (e) VALIDITY OF PROVISIONS; VALIDITY OF RE9 STRICTIONS, PROHIBITIONS, LIENS, OR CHARGES.—This

10 section and any restriction, prohibition, lien, or charge re11 ferred to in subsection (b) shall be fully effective notwith12 standing any other law, including any law of or relating

13 to sovereign immunity or priority.

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

15 The aggregate of—

16 (1) the total equity of the Organization, includ17 ing all capital from any issuance of class B stock;

18 and

19 (2) the total liabilities of the Organization, in20 cluding all obligations issued or incurred by the Or21 ganization;

22 shall not at any time exceed $20,000,000.
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1 TITLE IV—REGULATION,

2 EXAMINATION, AND REPORTS

3 SEC. 401. REGULATION, EXAMINATION, AND REPORTS.

4 (a) EFFECTIVE DATE OF SECTION.—This section

5 shall take effect on the date on which the Secretary of

6 Housing and Urban Development makes a determination

7 in accordance with section 202(b) that the Organization

8 may purchase and sell mortgages and mortgage-backed se9 curities.

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

11 to the regulatory authority of the Office of Federal Hous12 ing Enterprise Oversight of the Department of Housing

13 and Urban Development with respect to all matters relat14 ing to the financial safety and soundness of the Organiza15 tion.

16 (c) DUTY OF DIRECTOR.—The Director shall ensure

17 that the Organization is adequately capitalized and oper18 ating safely as a congressionally chartered body corporate.

19 (d) POWERS OF DIRECTOR.—The Director shall have

20 all of the exclusive powers granted the Director under sub21 sections (b), (d), and (e) of section 1313 of the Housing

22 and Community Development Act of 1992, as determined

23 by the Director to be necessary or appropriate to regulate

24 the operation of the Organization.

25 (e) REPORTS TO DIRECTOR.—
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1 (1) ANNUAL REPORT.—Not later than 1 year

2 after the date of enactment of this Act, and annually

3 thereafter, the Organization shall submit to the Di4 rector a report describing the financial condition and

5 operations of the Organization. The report shall be

6 in such form, contain such information, and be sub7 mitted on such date as the Director shall require.

8 (2) OTHER REPORTS.—In addition to the re9 ports submitted under paragraph (1), the Organiza10 tion shall submit to the Director any report required

11 by the Director pursuant to section 1314 of the

12 Housing and Community Development Act of 1992.

13 (3) CONTENTS OF REPORT.—Each report sub14 mitted under this subsection shall contain a declara15 tion by the president, vice president, treasurer, or

16 any other officer of the Organization designated by

17 the Board to make such declaration, that the report

18 is true and correct to the best of such officer’s

19 knowledge and belief.

20 (f) FUNDING OFHEO OVERSIGHT.—

21 (1) ASSESSMENT AND COLLECTION.—The Di22 rector shall assess and collect from the Organization

23 such amounts as are necessary to reimburse the Of24 fice of Federal Housing Enterprise Oversight for the

25 reasonable costs and expenses of the activities un-
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1 dertaken by the Office of Federal Housing Enter2 prise Oversight to carry out the duties of the Direc3 tor under paragraph (2), including the costs of ex4 aminations and overhead expenses.

5 (2) REQUIREMENTS.—Annual assessments im6 posed by the Director shall be—

7 (A) imposed prior to October 1 of each

8 year;

9 (B) collected at such time or times during

10 each assessment year as determined necessary

11 or appropriate by the Director;

12 (C) deposited into the Federal Housing

13 Enterprises Oversight Fund established by sec14 tion 1316(f) of the Housing and Community

15 Development Act of 1992; and

16 (D) available, to the extent provided in ap17 propriations Acts, for carrying out the respon18 sibilities of the Director under this section.

19 SEC. 402. AUTHORITY OF THE SECRETARY OF HOUSING

20 AND URBAN DEVELOPMENT.

21 Except for the authority of the Director under section

22 401, the Secretary of Housing and Urban Development

23 shall—

24 (1) have general regulatory power over the Or25 ganization; and
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1 (2) issue such rules and regulations applicable

2 to the Organization as determined necessary or ap3 propriate by the Secretary to ensure that the pur4 poses specified in section 102 are accomplished.

5 TITLE V—FORMATION OF NEW

6 CORPORATION

7 SEC. 501. FORMATION OF NEW CORPORATION.

8 (a) IN GENERAL.—In order to continue the accom9 plishment of the purposes specified in section 102 beyond

10 the terms of the charter of the Organization, the Board

11 shall, not later than 10 years after the date of enactment

12 of this Act, cause the formation of a new corporation

13 under the laws of any tribe, any State, or the District of

14 Columbia.

15 (b) POWERS OF NEW CORPORATION NOT PRE16 SCRIBED.—Except as provided in this section, the new

17 corporation may have any corporate powers and attributes

18 permitted under the laws of the jurisdiction of its incorpo19 ration which the Board shall determine, in its business

20 judgment, to be appropriate.

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

22 corporation may not use in any manner the name ‘‘Native

23 American Financial Services Organization’’ or ‘‘NAFSO’’

24 or any variation of thereof.
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1 SEC. 502. ADOPTION AND APPROVAL OF MERGER PLAN.

2 (a) IN GENERAL.—Not later than 10 years after the

3 date of enactment of this Act, the Board shall prepare,

4 adopt, and submit to the Secretary of Housing and Urban

5 Development and the Secretary of the Treasury for ap6 proval, a plan for merging the Organization into the new

7 corporation.

8 (b) DESIGNATED MERGER DATE.—

9 (1) IN GENERAL.—The Board shall establish

10 the designated merger date in the merger plan as a

11 specific calendar date on which and time of day at

12 which the merger of the Organization into the new

13 corporation shall take effect.

14 (2) CHANGES.—The Board may change the

15 designated merger date in the merger plan by adopt16 ing an amended plan of merger.

17 (3) RESTRICTION.—Except as provided in para18 graph (4), the designated merger date in the merger

19 plan or any amended merger plan shall not be later

20 than 11 years after the date of enactment of this

21 Act.

22 (4) EXCEPTION.—Subject to the restriction

23 contained in paragraph (5), the Board may adopt an

24 amended plan of merger that designates a date later

25 than 11 years after the date of enactment of this

26 Act if the Board submits to both the Secretary of
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1 Housing and Urban Development and the Secretary

2 of the Treasury a report—

3 (A) stating that an orderly merger of the

4 Organization into the new corporation is not

5 feasible before the latest date designated by the

6 Board;

7 (B) explaining why an orderly merger of

8 the Organization into the new corporation is

9 not feasible before the latest date designated by

10 the Board;

11 (C) describing the steps that have been

12 taken to consummate an orderly merger of the

13 Organization into the new corporation not later

14 than 11 years after the date of enactment of

15 this Act; and

16 (D) describing the steps that will be taken

17 to consummate an orderly and timely merger of

18 the Organization into the new corporation.

19 (5) LIMITATION.—The date designated by the

20 Board in an amended merger plan shall not be later

21 than 12 years after the date of enactment of this

22 Act.

23 (6) CONSUMMATION OF MERGER.—The con24 summation of an orderly and timely merger of the

25 Organization into the new corporation shall not
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1 occur later than 13 years after the date of enact2 ment of this Act.

3 (c) GOVERNMENTAL APPROVALS OF MERGER PLAN

4 REQUIRED.—The merger plan or any amended merger

5 plan shall take effect on the date on which the plan is

6 approved by both the Secretary of Housing and Urban De7 velopment and the Secretary of the Treasury.

8 (d) REVISION OF DISAPPROVED MERGER PLAN RE9 QUIRED.—If either the Secretary of Housing and Urban

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

11 disapprove the merger plan or any amended merger

12 plan—

13 (1) each Secretary that disapproves the plan

14 shall notify the Organization of such disapproval and

15 indicate the reasons for the disapproval; and

16 (2) not later than 30 days after the date of no17 tification of disapproval under paragraph (1), the

18 Organization shall submit to both the Secretary of

19 Housing and Urban Development and the Secretary

20 of the Treasury for approval an amended merger

21 plan responsive to the reasons for the disapproval in22 dicated in such notification.

23 (e) NO STOCKHOLDER APPROVAL OF MERGER PLAN

24 REQUIRED.—The approval or consent of the stockholders
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1 of the Organization shall not be required to accomplish

2 the merger of the Organization into the new corporation.

3 SEC. 503. CONSUMMATION OF MERGER.

4 The Board shall ensure that the merger of the Orga5 nization into the new corporation is accomplished in ac6 cordance with—

7 (1) the merger plan approved by the Secretary

8 of Housing and Urban Development and the Sec9 retary of the Treasury; and

10 (2) all applicable laws of the jurisdiction in

11 which the new corporation is incorporated.

12 SEC. 504. TRANSITION.

13 (a) CONTINUATION OF RIGHTS, DUTIES, AND RE14 STRICTIONS.—Except as provided in this section, the Or15 ganization shall, during the transition period, continue to

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

17 and shall be subject to all of the limitations and restric18 tions, set forth in this Act.

19 (b) COLLATERALIZATION OF OUTSTANDING OBLIGA20 TIONS.—

21 (1) IN GENERAL.—The Organization shall pro22 vide for all debt obligations of the Organization that

23 are outstanding on the date before the designated

24 merger date to be secured as to principal and inter-
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1 est by obligations of the United States held in trust

2 for the holders of such obligations.

3 (2) REQUIREMENTS, TERMS, AND CONDI4 TIONS.—The collateralization and the trust referred

5 to in the preceding sentence shall be subject to such

6 requirements, terms, and conditions as the Secretary

7 of the Treasury determines to be necessary or appro8 priate.

9 (c) ISSUANCE OF NEW OBLIGATIONS DURING TRAN10 SITION PERIOD.—As needed to carry out the purposes for

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

12 transition period, continue to issue obligations under sec13 tion 303. Any new obligation issued during the transition

14 period shall mature before the designated merger date.

15 SEC. 505. EFFECT OF MERGER.

16 (a) TRANSFER OF ASSETS AND LIABILITIES.—

17 (1) TRANSFER OF ASSETS.—On the designated

18 merger date, all property, real, personal, and mixed,

19 all debts due on any account, and any other interest

20 of or belonging to or due to the Organization shall

21 be transferred to and vested in the new corporation

22 without further act or deed, and title to any prop23 erty, whether real, personal, or mixed, shall not in

24 any way be impaired by reason of the merger.
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1 (2) TRANSFER OF LIABILITIES.—On the des2 ignated merger date, the new corporation shall be

3 responsible and liable for all obligations and liabil4 ities of the Organization and neither the rights of

5 creditors nor any liens upon the property of the Or6 ganization shall be impaired by the merger.

7 (b) TERMINATION OF THE ORGANIZATION AND ITS

8 FEDERAL CHARTER.—On the designated merger date—

9 (1) the surviving corporation of the merger

10 shall be the new corporation;

11 (2) the Federal charter of the Organization

12 shall terminate; and

13 (3) the separate existence of the Organization

14 shall terminate.

15 (c) REFERENCES TO THE ORGANIZATION IN LAW.—

16 After the designated merger date, any reference to the Or17 ganization in any law or regulation shall be deemed to

18 refer to the new corporation.

19 (d) SAVINGS CLAUSE.—

20 (1) PROCEEDINGS.—The merger of the Organi21 zation into the new corporation shall not abate any

22 proceeding commenced by or against the Organiza23 tion before the designated merger date, except that

24 the new corporation shall be substituted for the Or-
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1 ganization as a party to any such proceeding as of

2 the designated merger date.

3 (2) CONTRACTS AND AGREEMENTS.—All con4 tracts and agreements to which the Organization is

5 a party and which are in effect on the day before the

6 designated merger date shall continue in effect ac7 cording to their terms, except that the new corpora8 tion shall be substituted for the Organization as a

9 party to those contracts and agreements as of the

10 designated merger date.

11 TITLE VI—AUTHORIZATIONS OF

12 APPROPRIATIONS

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

15 (a) IN GENERAL.—There are authorized to be appro16 priated to the Fund, without fiscal year limitation,

17 $20,000,000 to provide financial assistance to Native

18 American Financial Institutions.

19 (b) NOT MATCHING FUNDS.—To the extent that a

20 Native American Financial Institution receives a portion

21 of an appropriation made under subsection (a), such funds

22 shall not be considered to be matching funds required of

23 the Native American Financial Institution under section

24 108(e) of the Riegle Community Development and Regu25 latory Improvement Act of 1994.
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1 SEC. 602. AUTHORIZATION OF APPROPRIATIONS FOR OR2 GANIZATION.

3 The Secretary of Housing and Urban Development

4 may, to the extent provided in advance in an appropria5 tions Act, provide not more than $10,000,000 to the Fund

6 for the funding of a cooperative agreement to be entered

7 into by the Fund and the Organization for technical as8 sistance and other services to be provided by the Organiza9 tion to Native American Financial Institutions.

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