II 

Calendar No. 579 

113TH CONGRESS 

2D SESSION S. 1217 

To provide secondary mortgage market reform, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 25, 2013 

Mr. CORKER (for himself, Mr. WARNER, Mr. JOHANNS, Mr. TESTER, Mr. 

HELLER, Ms. HEITKAMP, Mr. MORAN, Mrs. HAGAN, Mr. KIRK, Mr. 

MANCHIN, Mr. CHAMBLISS, and Mr. BEGICH) introduced the following 

bill; which was read twice and referred to the Committee on Banking, 

Housing, and Urban Affairs 

SEPTEMBER 18, 2014 

Reported by Mr. JOHNSON of South Dakota, with an amendment 

[Strike out all after the enacting clause and insert the part printed in italic] 

A BILL 

To provide secondary mortgage market reform, 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; TABLE OF CONTENTS. 

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

5 ‘‘Housing Finance Reform and Taxpayer Protection Act 

6 of 2013’’. 


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

2 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Definitions. 

TITLE I—FEDERAL MORTGAGE INSURANCE CORPORATION 

Sec. 101. Establishment. 

Sec. 102. Director. 

Sec. 103. Board of Directors. 

Sec. 104. Office of the Inspector General. 

Sec. 105. Staff, experts, and consultants. 

Sec. 106. Reports; testimony; audits. 

Sec. 107. Initial funding. 

TITLE II—DUTIES, RESPONSIBILITIES, AND STRUCTURE OF THE 

FMIC 

Subtitle A—Duties and Authorities 

Sec. 201. Duties and responsibilities of the FMIC. 

Sec. 202. Standard form credit risk-sharing mechanisms, products, structures, 

contracts, or other security agreements. 

Sec. 203. Mortgage Insurance Fund. 

Sec. 204. Insurance. 

Sec. 205. Authority to protect taxpayers in unusual and exigent market conditions. 

Sec. 206. General powers. 

Sec. 207. Exemptions. 

Subtitle B—Oversight of Market Participants 

Sec. 211. Approval of private mortgage insurers. 

Sec. 212. Approval of servicers. 

Sec. 213. Approval of issuers. 

Sec. 214. Approval of bond guarantors. 

Sec. 215. Authority to establish FMIC Mutual Securitization Company. 

Sec. 216. Additional authority relating to oversight of market participants. 

Sec. 217. Civil money penalties. 

Sec. 218. Protection of privilege and other matters relating to disclosures by 

market participants. 

Subtitle C—Transparency in Market Operations 

Sec. 221. Review of loan documents; disclosures. 

Sec. 222. Investor immunity. 

Sec. 223. Uniform securitization agreements. 

Sec. 224. Uniform mortgage database. 

Sec. 225. Electronic registration of eligible mortgages. 

Subtitle D—FMIC Structure 

Sec. 231. Office of Underwriting. 

Sec. 232. Office of Securitization. 

Sec. 233. Office of Federal Home Loan Bank Supervision. 


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TITLE III—TRANSFER OF POWERS, PERSONNEL, AND PROPERTY 

TO FMIC FROM FHFA 

Sec. 301. Powers and duties transferred. 

Sec. 302. Transfer and rights of employees of the FHFA. 

Sec. 303. Abolishment of FHFA. 

Sec. 304. Transfer of property and facilities. 

Sec. 305. Technical and conforming amendments. 

TITLE IV—IMPROVING TRANSPARENCY, ACCOUNTABILITY, AND 

EFFICACY WITHIN AFFORDABLE HOUSING 

Sec. 401. Affordable housing allocations. 

Sec. 402. Housing Trust Fund. 

Sec. 403. Capital Magnet Fund. 

Sec. 404. Additional taxpayer protections. 

TITLE V—WIND DOWN OF FANNIE MAE AND FREDDIE MAC 

Sec. 501. Repeal of GSE charters. 

Sec. 502. Wind down. 

Sec. 503. Aligning purpose of conservatorship with FMIC. 

Sec. 504. Conforming loan limits. 

Sec. 505. Portfolio reduction. 

Sec. 506. Repeal of mandatory housing goals. 

TITLE VI—IMPROVEMENTS TO FUNCTIONING OF HOUSING 

MARKET 

Sec. 601. Continuation of multifamily business of the enterprises. 

Sec. 602. Multiple lender issues. 

Sec. 603. GAO report on full privatization of secondary mortgage market. 

TITLE VII—GENERAL PROVISIONS 

Sec. 701. Authority to issue regulations. 

Sec. 702. Fair value accounting. 

Sec. 703. Rule of construction. 

Sec. 704. Severability. 

1 SEC. 2. DEFINITIONS. 

2 As used in this Act, the following definitions shall 

3 apply: 

4 (1) APPROVED BOND GUARANTOR.—The term 

5 ‘‘approved bond guarantor’’ means any entity that 

6 provides credit enhancement that is approved by the 

7 Corporation pursuant to section 214 to guarantee 

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1 rities collateralized by eligible mortgages and insured 

2 by the Corporation. 

3 (2) APPROVED ISSUER.—The term ‘‘approved 

4 issuer’’ means an issuer that is approved by the Cor5 poration pursuant to section 213— 

6 (A) to issue covered securities; and 

7 (B) to purchase insurance offered by the 

8 Corporation pursuant to title II on a covered 

9 security for which first loss credit enhancement 

10 has been secured. 

11 (3) APPROVED PRIVATE MORTGAGE INSURER.— 

12 The term ‘‘approved private mortgage insurer’’ 

13 means an insurer that is approved by the Corpora14 tion pursuant to section 211 to provide private mort15 gage insurance on eligible mortgages. 

16 (4) APPROVED SERVICER.—The term ‘‘ap17 proved servicer’’ means a servicer that is approved 

18 by the Corporation pursuant to section 212 to ad19 minister eligible mortgages. 

20 (5) AREA.—The term ‘‘area’’— 

21 (A) means a metropolitan statistical area 

22 as established by the Office of Management and 

23 Budget; and 

24 (B) for purposes of paragraph (11)(A)(ii), 

25 the median 1-family house price for an area 


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1 shall be equal to the median 1-family house 

2 price of the county within the area that has the 

3 highest such median price. 

4 (6) BOARD; BOARD OF DIRECTORS.—The terms 

5 ‘‘Board’’ and ‘‘Board of Directors’’ mean the Board 

6 of Directors of the Federal Mortgage Insurance Cor7 poration. 

8 (7) CHARTER.—The term ‘‘charter’’ means— 

9 (A) with respect to the Federal National 

10 Mortgage Association, the Federal National 

11 Mortgage Association Charter Act (12 U.S.C. 

12 1716 et seq.); and 

13 (B) with respect to the Federal Home 

14 Loan Mortgage Corporation, the Federal Home 

15 Loan Mortgage Corporation Act (12 U.S.C. 

16 1451 et seq.). 

17 (8) CORPORATION.—The term ‘‘Corporation’’ 

18 means the Federal Mortgage Insurance Corporation 

19 established under title I. 

20 (9) COVERED SECURITY.—The term ‘‘covered 

21 security’’ means a mortgage-backed security— 

22 (A) collateralized by eligible mortgages; 

23 (B) which is issued subject to a standard 

24 form credit-risk sharing mechanism, product, 

25 structure, contract, or other securitization 


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1 agreement developed by the Corporation pursu2 ant to title II; and 

3 (C) which is eligible for insurance by the 

4 Corporation pursuant to title II, which insur5 ance is purchased by an approved issuer who 

6 issues covered securities. 

7 (10) DIRECTOR.—The term ‘‘Director’’ means 

8 the Director of the Federal Mortgage Insurance Cor9 poration, unless the context otherwise requires. 

10 (11) ELIGIBLE MORTGAGE.—The term ‘‘eligible 

11 mortgage’’ means a mortgage— 

12 (A) that is a residential real estate loan se13 cured by a property with 1 to 4 single family 

14 units that has been originated in compliance 

15 with the provisions of section 1026 of title 12 

16 of the Code of Federal Regulations, as promul17 gated by the Bureau of Consumer Financial 

18 Protection pursuant to section 129C(b) of the 

19 Truth in Lending Act (15 U.S.C. 1639c(b)) 

20 (commonly referred to as the ‘‘Ability-to-Repay 

21 and Qualified Mortgage Rule’’); 

22 (B) has a maximum original principal obli23 gation amount that does not exceed the con24 forming loan limitation determined under sec25 tion 504; 


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1 (C) the outstanding principal balance of 

2 which at the time of purchase of insurance 

3 available under title II— 

4 (i) is less than 80 percent of the value 

5 of the property securing the mortgage; 

6 (ii) is not less than 80 percent but not 

7 more than 85 percent of the value of the 

8 property securing the mortgage, provided 

9 that not less than 12 percent of the unpaid 

10 principal balance of the mortgage, account11 ing for any downpayment required under 

12 subparagraph (D), is insured by— 

13 (I) an approved private mortgage 

14 insurer; or 

15 (II) lender recourse or other 

16 credit enhancement that— 

17 (aa) meets standards com18 parable to the standards required 

19 of private mortgage insurers 

20 under section 211; and 

21 (bb) is approved by the Cor22 poration; 

23 (iii) is not less than 85 percent but 

24 not more than 90 percent of the value of 

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1 vided that not less than 25 percent of the 

2 unpaid principal balance of the mortgage, 

3 accounting for any downpayment required 

4 under subparagraph (D), is insured by— 

5 (I) an approved private mortgage 

6 insurer; or 

7 (II) lender recourse or other 

8 credit enhancement that— 

9 (aa) meets standards com10 parable to the standards required 

11 of private mortgage insurers 

12 under section 211; and 

13 (bb) is approved by the Cor14 poration; or 

15 (iv) is not less than 90 percent but 

16 not more than 95 percent of the value of 

17 the property securing the mortgage, pro18 vided that not less than 30 percent of the 

19 unpaid principal balance of the mortgage, 

20 accounting for any downpayment required 

21 under subparagraph (D), is insured by— 

22 (I) an approved private mortgage 

23 insurer; or 

24 (II) lender recourse or other 

25 credit enhancement that— 


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1 (aa) meets standards com2 parable to the standards required 

3 of private mortgage insurers 

4 under section 211; and 

5 (bb) is approved by the Cor6 poration; 

7 (D) having a downpayment which shall be 

8 equal to not less than 5 percent of purchase 

9 price of the property securing the mortgage; 

10 (E) that is insured by an approved State 

11 licensed title insurance company; 

12 (F) that contains such terms and provi13 sions with respect to insurance, property main14 tenance, repairs, alterations, payment of taxes, 

15 default, reserves, delinquency charges, fore16 closure proceedings, anticipation of maturity, 

17 additional and secondary liens, and other mat18 ters, including matters that set forth terms and 

19 provisions for establishing escrow accounts, per20 forming financial assessments, or limiting the 

21 amount of any payment made available under 

22 the mortgage as the Corporation may prescribe; 

23 and 

24 (G) that contains such other terms or 

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1 tion with the Bureau of Consumer Financial 

2 Protection, may determine necessary or appro3 priate. 

4 (12) ENTERPRISE.—The term ‘‘enterprise’’ 

5 means— 

6 (A) the Federal National Mortgage Asso7 ciation and any affiliate thereof; and 

8 (B) the Federal Home Loan Mortgage 

9 Corporation and any affiliate thereof. 

10 (13) FEDERAL BANKING AGENCIES.—The 

11 term— 

12 (A) ‘‘Federal banking agency’’ means, indi13 vidually, the Board of Governors of the Federal 

14 Reserve System, the Office of the Comptroller 

15 of the Currency, the Federal Deposit Insurance 

16 Corporation, the Bureau of Consumer Financial 

17 Protection, the National Credit Union Adminis18 tration, the Securities and Exchange Commis19 sion, the Commodities Futures Trading Com20 mission, the Federal Housing Finance Agency, 

21 and the Secretary of the Treasury; and 

22 (B) ‘‘Federal banking agencies’’ means all 

23 of the agencies referred to in subparagraph (A), 

24 collectively. 


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1 (14) FEDERAL HOME LOAN BANK.—The term 

2 ‘‘Federal Home Loan Bank’’ means a bank estab3 lished under the authority of the Federal Home 

4 Loan Bank Act (12 U.S.C. 1421 et seq.). 

5 (15) FEDERAL HOME LOAN BANK SYSTEM.— 

6 The term ‘‘Federal Home Loan Bank System’’ 

7 means the Federal Home Loan Banks and the Of8 fice of Finance and any authorized subsidiary of one 

9 or more Federal Home Loan Banks. 

10 (16) FMIC CERTIFICATION DATE.—The term 

11 ‘‘FMIC certification date’’ means the date on which 

12 the Board of Directors certifies that the Corporation 

13 is operational and able to perform the insurance 

14 functions for covered securities as provided in this 

15 Act, which date shall be not later than 5 years after 

16 the date of enactment of this Act. 

17 (17) INSURED DEPOSITORY INSTITUTION.—The 

18 term ‘‘insured depository institution’’ means— 

19 (A) an insured depository institution, as 

20 defined under section 3 of the Federal Deposit 

21 Insurance Act (12 U.S.C. 1813); and 

22 (B) a credit union that meets the defini23 tion of ‘‘depository institution’’ as that term is 

24 defined under section 19(b) of the Federal Re25 serve Act (12 U.S.C. 461). 


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1 (18) SENIOR PREFERRED STOCK PURCHASE

2 AGREEMENT DEFINED.—The term ‘‘Senior Pre3 ferred Stock Purchase Agreement’’ means— 

4 (A) the Amended and Restated Senior Pre5 ferred Stock Purchase Agreement, dated Sep6 tember 26, 2008, as such Agreement has been 

7 amended on May 6, 2009, December 24, 2009, 

8 and August 17, 2012, respectively, and as such 

9 Agreement may be further amended and re10 stated, entered into between the Department of 

11 the Treasury and each enterprise, as applicable; 

12 and 

13 (B) any provision of any certificate in con14 nection with such Agreement creating or desig15 nating the terms, powers, preferences, privi16 leges, limitations, or any other conditions of the 

17 Variable Liquidation Preference Senior Pre18 ferred Stock of an enterprise issued or sold pur19 suant to such Agreement. 

20 (19) TRANSFER DATE.—The term ‘‘transfer 

21 date’’ means the date that is 1 year after the date 

22 of enactment of this Act. 


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1 TITLE I—FEDERAL MORTGAGE 

2 INSURANCE CORPORATION 

3 SEC. 101. ESTABLISHMENT. 

4 (a) ESTABLISHMENT.—There is hereby established 

5 the Federal Mortgage Insurance Corporation which shall 

6 have the powers hereinafter granted. 

7 (b) PURPOSE.—The purpose of the Corporation shall 

8 be to— 

9 (1) provide liquidity, transparency, and access 

10 to mortgage credit by supporting a robust secondary 

11 mortgage market and the production of residential 

12 mortgage-backed securities; and 

13 (2) protect the taxpayer from having to absorb 

14 losses incurred in the secondary mortgage market 

15 during periods of economic stress. 

16 (c) FEDERAL STATUS.—The Corporation shall be an 

17 independent agency of the Federal Government. 

18 (d) SUCCESSION.—The Corporation shall have suc19 cession until dissolved by Act of Congress. 

20 (e) PRINCIPAL OFFICE.—The Corporation shall 

21 maintain its principal office in the District of Columbia 

22 and shall be deemed, for purposes of venue in civil actions, 

23 to be a resident thereof. 

24 (f) AUTHORITY TO ESTABLISH OTHER OFFICES.— 

25 The Corporation may establish such other offices in such 


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1 other place or places as the Corporation may deem nec2 essary or appropriate in the conduct of its business. 

3 (g) PROHIBITION.—The Corporation shall not engage 

4 in mortgage origination. 

5 SEC. 102. DIRECTOR. 

6 (a) ESTABLISHMENT OF POSITION.—There is estab7 lished the position of the Director of the Corporation, who 

8 shall be the head of the Corporation. 

9 (b) APPOINTMENT; TERM.— 

10 (1) APPOINTMENT.—The Director shall be ap11 pointed by the President, by and with the advice and 

12 consent of the Senate, from among individuals 

13 who— 

14 (A) are citizens of the United States; and 

15 (B) have a demonstrated technical, aca16 demic, or professional understanding of, and 

17 practical, disciplinary, vocational, or regulatory 

18 experience working in, the mortgage securities 

19 markets and housing finance. 

20 (2) TERM.—The Director shall be appointed for 

21 a term of 5 years, unless removed before the end of 

22 such term for cause by the President. 

23 (3) VACANCY.— 

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1 tion of the term for which a Director was ap2 pointed shall be filled in the manner established 

3 under paragraph (1), and the Director ap4 pointed to fill such vacancy shall be appointed 

5 only for the remainder of such term. 

6 (B) ACTING DIRECTOR.— 

7 (i) DESIGNATION BY THE PRESI8 DENT.— 

9 (I) ELIGIBLE INDIVIDUALS.—If 

10 the Senate has not confirmed a Direc11 tor, the President may designate ei12 ther the individual nominated, but not 

13 yet confirmed, for the position of Di14 rector or a member of the Board of 

15 Directors to serve as the Acting Di16 rector, and such Acting Director shall 

17 have all the rights, duties, powers, 

18 and responsibilities of the Director, 

19 until such time as a Director is con20 firmed by the Senate. 

21 (II) LIMITATION.—No individual 

22 may serve concurrently as the Acting 

23 Director of the Corporation and the 

24 Director of the Federal Housing Fi25 nance Agency. 


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1 (4) SERVICE AFTER END OF TERM.—An indi2 vidual may serve as the Director after the expiration 

3 of the term for which appointed until a successor 

4 has been appointed. 

5 (5) COMPENSATION.—The Director shall be 

6 compensated at the rate prescribed for level II of the 

7 Executive Schedule under section 5313 of title 5, 

8 United States Code. 

9 (6) RULES OF CONSTRUCTION.—No indi10 vidual— 

11 (A) may serve concurrently as the Director 

12 of the Corporation and the Director of the Fed13 eral Housing Finance Agency; and 

14 (B) that has, at any time prior to, on, or 

15 after the date of enactment of this Act, served 

16 as the Director of the Federal Housing Finance 

17 Agency may serve as the Director of the Cor18 poration. 

19 (c) MEMBERSHIP ON FSOC.—The Dodd-Frank Wall 

20 Street Reform and Consumer Protection Act is amend21 ed— 

22 (1) in section 2, by amending paragraph 

23 (12)(E) to read as follows: 

24 ‘‘(E) the Federal Mortgage Insurance Cor25 poration, with respect to— 


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1 ‘‘(i) the Mortgage Insurance Fund es2 tablished under title II of the Housing Fi3 nance Reform and Taxpayer Protection 

4 Act of 2013; and 

5 ‘‘(ii) the Federal Home Loan Banks 

6 or the Federal Home Loan Bank Sys7 tem.’’; and 

8 (2) in section 111(b)(1)(H), by striking ‘‘Direc9 tor of the Federal Housing Finance Agency’’ and in10 serting ‘‘Chairperson of the Federal Mortgage Insur11 ance Corporation’’. 

12 SEC. 103. BOARD OF DIRECTORS. 

13 (a) BOARD OF DIRECTORS.— 

14 (1) VOTING MEMBERS.—The management of 

15 the Corporation shall be vested in a Board of Direc16 tors consisting of 5 voting members— 

17 (A) 1 of whom shall be the Director, who 

18 shall serve as Chairperson of the Board; and 

19 (B) 4 of whom shall be appointed by the 

20 President, by and with the advice and consent 

21 of the Senate, from among individuals who are 

22 citizens of the United States— 

23 (i) 1 of whom shall have demonstrated 

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1 cational, or regulatory experience working 

2 in, the field of asset management; 

3 (ii) 1 of whom shall have dem4 onstrated technical, academic, or profes5 sional understanding of, and practical, dis6 ciplinary, vocational, or regulatory experi7 ence working in, mortgage insurance mar8 kets; 

9 (iii) 1 of whom shall have a dem10 onstrated technical, academic, or profes11 sional understanding of, and practical, dis12 ciplinary, vocational, or regulatory experi13 ence working with, lenders having less than 

14 $10,000,000,000 in total assets; and 

15 (iv) 1 of whom shall have a dem16 onstrated technical, academic, or profes17 sional understanding of, and practical, dis18 ciplinary, vocational, or regulatory experi19 ence working with, multifamily housing de20 velopment. 

21 (2) NON-VOTING MEMBER.—The President 

22 shall appoint the Director of the Federal Housing 

23 Finance Agency as an additional non-voting member 

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1 ing member of the Board of Directors until such 

2 time as that position is abolished pursuant to title 

3 III. 

4 (3) INDEPENDENCE.— 

5 (A) IN GENERAL.—Each voting member of 

6 the Board of Directors shall be independent 

7 and neutral and maintain a fiduciary relation8 ship to the Corporation in performing his or her 

9 duties. 

10 (B) INDEPENDENCE DETERMINATION.—In 

11 order to be considered independent for purposes 

12 of this paragraph, a voting member of the 

13 Board of Directors— 

14 (i) may not, other than in his or her 

15 capacity as a member of the Board of Di16 rectors or any committee thereof— 

17 (I) accept any consulting, advi18 sory, or other compensatory fee from 

19 the Corporation; or 

20 (II) be a person associated with 

21 the Corporation or with any affiliated 

22 company thereof; and 

23 (ii) shall be disqualified from any de24 liberation involving any transaction of the 

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1 nancial interest in the outcome of the 

2 transaction. 

3 (4) RULE OF CONSTRUCTION.—No individual 

4 that has, at any time prior to, on, or after the date 

5 of enactment of this Act, served as the Director or 

6 Acting Director of the Federal Housing Finance 

7 Agency may serve as a voting member of the Board 

8 of Directors. 

9 (b) ADMINISTRATION.—Except as otherwise may pro10 vided in this Act, the Board of Directors shall administer 

11 the affairs of the Corporation fairly and impartially and 

12 without discrimination. 

13 (c) CONSULTATION.—The Board of Directors may, in 

14 carrying out any duty, responsibility, requirement, or ac15 tion authorized under this Act, consult with the Federal 

16 banking agencies or any individual Federal banking agen17 cy, as the Board determines necessary and appropriate. 

18 (d) TERMS.— 

19 (1) APPOINTED MEMBERS.—Each appointed 

20 voting member shall be appointed for a term of 5 

21 years and shall serve on a full-time basis. 

22 (2) INTERIM APPOINTMENTS.—Any voting 

23 member appointed to fill a vacancy occurring before 

24 the expiration of the term for which such member’s 


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1 predecessor was appointed shall be appointed only 

2 for the remainder of such term. 

3 (3) CONTINUATION OF SERVICE.—The Chair4 person and each appointed voting member may con5 tinue to serve after the expiration of the term of of6 fice to which such member was appointed until a 

7 successor has been appointed and qualified. 

8 (e) VACANCY.—A vacancy in the voting membership 

9 of the Board of Directors shall not affect the powers of 

10 the Board, and shall be filled in the manner in which the 

11 original appointment was made. 

12 (f) VOTING.—A majority vote of all voting members 

13 of the Board of Directors is necessary to resolve all voting 

14 issues of the Corporation. 

15 (g) MEETINGS.—The Board of Directors shall meet 

16 in accordance with the bylaws of the Corporation— 

17 (1) at the call of the Chairperson; and 

18 (2) not less frequently than once each month. 

19 (h) QUORUM.—Three voting members of the Board 

20 of Directors then in office shall constitute a quorum. 

21 (i) BYLAWS.—A majority of the voting members of 

22 the Board of Directors may amend the bylaws of the Cor23 poration. 


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1 (j) ATTENDANCE.—Members of the Board of Direc2 tors may attend meetings of the Corporation and vote in 

3 person, via telephone conference, or via video conference. 

4 (k) INELIGIBILITY FOR OTHER OFFICES DURING

5 SERVICE.— 

6 (1) IN GENERAL.—No voting member of the 

7 Board of Directors may during the time such mem8 ber is in office— 

9 (A) be an officer or director of any insured 

10 depository institution, depository institution 

11 holding company, Federal Reserve bank, Fed12 eral home loan bank, approved servicer, ap13 proved private mortgage insurer, institution 

14 that originates eligible mortgages, or institution 

15 that issues a covered security; or 

16 (B) hold stock or a controlling interest in 

17 any insured depository institution or depository 

18 institution holding company, approved servicer, 

19 approved private mortgage insurer, institution 

20 that originates eligible mortgages, or institution 

21 that issues a covered security. 

22 (2) CERTIFICATION.—Upon taking office, each 

23 voting member of the Board of Directors shall cer24 tify under oath that such member has complied with 


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1 this subsection and such certification shall be filed 

2 with the secretary of the Board of Directors. 

3 (l) STATUS OF EMPLOYEES.— 

4 (1) IN GENERAL.—A director, member, officer, 

5 or employee of the Corporation has no liability under 

6 the Securities Act of 1933 (15 U.S.C. 77a et seq.) 

7 with respect to any claim arising out of or resulting 

8 from any act or omission by such person within the 

9 scope of such person’s employment in connection 

10 with any transaction involving the Corporation. This 

11 subsection shall not be construed to limit personal li12 ability for criminal acts or omissions, willful or mali13 cious misconduct, acts or omissions for private gain, 

14 or any other acts or omissions outside the scope of 

15 such person’s employment. 

16 (2) EFFECT ON OTHER LAW.— 

17 (A) IN GENERAL.—This subsection does 

18 not affect— 

19 (i) any other immunities and protec20 tions that may be available to such person 

21 under applicable law with respect to such 

22 transactions; or 

23 (ii) any other right or remedy against 

24 the Corporation, against the United States 

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1 son other than a person described in para2 graph (1) participating in such trans3 actions. 

4 (B) RULE OF CONSTRUCTION.—This sub5 section shall not be construed to limit or alter 

6 in any way the immunities that are available 

7 under applicable law for Federal officials and 

8 employees not described in this subsection. 

9 SEC. 104. OFFICE OF THE INSPECTOR GENERAL. 

10 (a) OFFICE OF INSPECTOR GENERAL.— 

11 (1) IN GENERAL.—There is established the Of12 fice of the Inspector General of the Federal Mort13 gage Insurance Corporation. The head of the Office 

14 of the Inspector General of the Federal Mortgage 

15 Insurance Corporation is the Inspector General of 

16 the Federal Mortgage Insurance Corporation (in this 

17 section referred to as the ‘‘Inspector General’’), who 

18 shall be appointed by the President, by and with the 

19 advice and consent of the Senate. 

20 (2) ADDITIONAL RESPONSIBILITIES.—In addi21 tion to carrying out the requirements established 

22 under the Inspector General Act of 1978 (5 U.S.C. 

23 App.), the Inspector General shall— 


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1 (A) conduct, supervise, and coordinate au2 dits and investigations relating to the programs 

3 and operations of the Corporation— 

4 (i) to ensure that the first loss posi5 tion that the Corporation requires of pri6 vate market holders of covered securities 

7 insured under this Act is adequate to cover 

8 losses that might be incurred as a result of 

9 adverse economic conditions, wherein such 

10 conditions are generally consistent with the 

11 economic conditions, including national 

12 home price declines, observed in the United 

13 States during moderate to severe reces14 sions experienced during the last 100 

15 years; and 

16 (ii) with respect to the— 

17 (I) oversight and supervision of 

18 the Federal Home Loan Banks and 

19 the Federal Home Loan Bank Sys20 tem; and 

21 (II) the contracting practices and 

22 procedures of the Corporation; and 

23 (B) recommend policies for the purpose of 

24 addressing any deficiencies, inefficiencies, gaps, 


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1 or failures in the administration of such pro2 grams and operations. 

3 (3) INSPECTOR GENERAL REPORT; REPORT OF

4 INDEPENDENT ACTUARY.—Beginning 1 year after 

5 the FMIC certification date, and annually there6 after, the Inspector General and an independent ac7 tuary contracted for by the Director shall each con8 duct an examination and issue a separate report re9 garding— 

10 (A) the adequacy of insurance fees charged 

11 by the Board of Directors under title II; and 

12 (B) the adequacy of the Mortgage Insur13 ance Fund established under title II. 

14 (b) AMENDMENTS TO INSPECTOR GENERAL ACT OF

15 1978.—Section 11 of the Inspector General Act of 1978 

16 (5 U.S.C. App.) is amended— 

17 (1) in paragraph (1), by inserting ‘‘Chairperson 

18 of the Federal Mortgage Insurance Corporation;’’ 

19 after ‘‘the Director of the Federal Housing Finance 

20 Agency;’’; and 

21 (2) in paragraph (2), by inserting ‘‘the Federal 

22 Mortgage Insurance Corporation,’’ after ‘‘the Fed23 eral Housing Finance Agency,’’. 

24 (c) COMPENSATION.—The annual rate of basic pay 

25 of the Inspector General shall be the annual rate of basic 


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1 pay provided for positions at level III of the Executive 

2 Schedule under section 5314 of title 5, United States 

3 Code. 

4 SEC. 105. STAFF, EXPERTS, AND CONSULTANTS. 

5 (a) COMPENSATION.— 

6 (1) IN GENERAL.—The Board of Directors may 

7 appoint and fix the compensation of such officers, 

8 attorneys, economists, examiners, and other employ9 ees as may be necessary for carrying out the func10 tions of the Corporation. 

11 (2) RATES OF PAY.—Rates of basic pay and the 

12 total amount of compensation and benefits for all 

13 employees of the Corporation may be— 

14 (A) set and adjusted by the Board of Di15 rectors without regard to the provisions of 

16 chapter 51 or subchapter III of chapter 53 of 

17 title 5, United States Code; and 

18 (B) reasonably increased, notwithstanding 

19 any limitation set forth in paragraph (3), if the 

20 Board of Directors determines such increases 

21 are necessary to attract and hire qualified em22 ployees. 

23 (3) PARITY.—The Board of Directors may pro24 vide additional compensation and benefits to employ25 ees of the Corporation, of the same type of comVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00027 Fmt 6652 Sfmt 6401 E:\BILLS\S1217.RS S1217

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1 pensation or benefits that are then being provided by 

2 any agency referred to under section 1206 of the Fi3 nancial Institutions Reform, Recovery, and Enforce4 ment Act of 1989 (12 U.S.C. 1833b) or, if not then 

5 being provided, could be provided by such an agency 

6 under applicable provisions of law, rule, or regula7 tion. In setting and adjusting the total amount of 

8 compensation and benefits for employees, the Board 

9 of Directors shall consult with and seek to maintain 

10 comparability with the agencies referred to under 

11 section 1206 of the Financial Institutions Reform, 

12 Recovery, and Enforcement Act of 1989 (12 U.S.C. 

13 1833b). 

14 (b) DETAIL OF GOVERNMENT EMPLOYEES.—Upon 

15 the request of the Board of Directors, any Federal Gov16 ernment employee may be detailed to the Corporation 

17 without reimbursement, and such detail shall be without 

18 interruption or loss of civil service status or privilege. 

19 (c) EXPERTS AND CONSULTANTS.—The Board of Di20 rectors may procure the services of experts and consult21 ants as the Board considers necessary or appropriate. 

22 (d) TECHNICAL AND PROFESSIONAL ADVISORY COM23 MITTEES.—The Board of Directors may appoint such spe24 cial advisory, technical, or professional committees as may 

25 be useful in carrying out the functions of the Corporation. 


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1 SEC. 106. REPORTS; TESTIMONY; AUDITS. 

2 (a) REPORTS.— 

3 (1) IN GENERAL.—The Corporation shall sub4 mit, on an annual basis, to the Committee on Bank5 ing, Housing, and Urban Affairs of the Senate and 

6 the Committee on Financial Services of the House of 

7 Representatives a written report of its operations, 

8 activities, budget, receipts, and expenditures for the 

9 preceding 12-month period. 

10 (2) CONTENTS OF REPORT.—The report re11 quired under subsection (a) shall include an analysis 

12 of— 

13 (A) with respect to the Mortgage Insur14 ance Fund established under section 203— 

15 (i) the current financial condition of 

16 the Mortgage Insurance Fund; 

17 (ii) the exposure of the Mortgage In18 surance Fund to changes in those eco19 nomic factors most likely to affect the con20 dition of that fund; 

21 (iii) a current estimate of the re22 sources needed for the Mortgage Insurance 

23 Fund to achieve the purposes of this Act; 

24 and 

25 (iv) any findings, conclusions, and rec26 ommendations for legislative and adminisVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00029 Fmt 6652 Sfmt 6401 E:\BILLS\S1217.RS S1217

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1 trative actions considered appropriate to 

2 the future activities of the Corporation; 

3 (B) the secondary mortgage market, the 

4 housing market, and the economy, including 

5 through use of stress tests, and how such anal6 ysis was used to determine and set the reserve 

7 ratio for the Mortgage Insurance Fund for the 

8 preceding 12-month period; 

9 (C) whether or not the actual reserve ratio 

10 of the Mortgage Insurance Fund met— 

11 (i) the reserve ratio set for the pre12 ceding 12-month period; or 

13 (ii) the reserve ratio goals established 

14 in section 203(e); 

15 (D) how the Corporation intends to ensure 

16 that the goals set for the reserve ratio for the 

17 Mortgage Insurance Fund are to be met and 

18 maintained for the next 12-month period, and 

19 such analysis shall include a detailed and de20 scriptive plan of the actions that the Corpora21 tion intends to take pursuant to its authorities 

22 under this Act; 

23 (E) how the Corporation has provided li24 quidity, transparency, and access to mortgage 

25 credit in its support of a robust secondary 


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1 mortgage market and the production of residen2 tial mortgage-backed securities; 

3 (F) the state of the private label mortgage4 backed securities market, and such analysis 

5 shall include the submission of a reasonable set 

6 of administrative, regulatory, and legislative 

7 proposals on how to limit the Federal Govern8 ment’s footprint in the secondary mortgage 

9 market; 

10 (G) the effect that further decreases in 

11 loan limits would have on the secondary mort12 gage market, the housing market, and the econ13 omy; and 

14 (H) the state of the global covered bond 

15 market. 

16 (b) TESTIMONY.—The Chairperson of the Corpora17 tion, on a biannual basis, shall provide testimony to the 

18 Committee on Banking, Housing, and Urban Affairs of 

19 the Senate and the Committee on Financial Services of 

20 the House of Representatives. 

21 (c) AUDIT OF CORPORATION.— 

22 (1) ANNUAL AUDIT.—The Comptroller General 

23 of the United States shall annually audit the finan24 cial transactions of the Corporation in accordance 

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1 ment auditing standards as may be prescribed by 

2 the Comptroller General. 

3 (2) PLACE OF AUDIT.—The audit required 

4 under this subsection shall be conducted at the place 

5 or places where accounts of the Corporation are nor6 mally kept. 

7 (3) ACCESS.—The representatives of the Comp8 troller General shall have access to the personnel 

9 and to all books, accounts, documents, papers, 

10 records (including electronic records), reports, files, 

11 and all other papers, automated data, or property 

12 belonging to or under the control of or used or em13 ployed by the Corporation pertaining to its financial 

14 transactions and necessary to facilitate the audit re15 quired under this subsection, and such representa16 tives shall be afforded full facilities for verifying 

17 transactions with the balances or securities held by 

18 depositories, fiscal agents, and custodians. 

19 (4) POSSESSION AND CUSTODY.—All such 

20 books, accounts, documents, records, reports, files, 

21 papers, and property of the Corporation used to 

22 carry out the audit required under this subsection 

23 shall remain in the possession and custody of the 

24 Corporation. 


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1 (5) PERMISSIBLE DUPLICATION.—The Comp2 troller General may obtain and duplicate any such 

3 books, accounts, documents, records, working pa4 pers, automated data and files, or other information 

5 relevant to such audit without cost to the Comp6 troller General and the Comptroller General’s right 

7 of access to such information shall be enforceable 

8 pursuant to section 716(c) of title 31, United States 

9 Code. 

10 (6) REPORT.— 

11 (A) SUBMISSION TO CONGRESS.—The 

12 Comptroller General shall submit to Congress a 

13 report of each annual audit conducted under 

14 this subsection. 

15 (B) REQUIRED CONTENT.—The report to 

16 Congress required under subparagraph (A) 

17 shall— 

18 (i) set forth the scope of the audit; 

19 and 

20 (ii) include— 

21 (I) the statement of assets and li22 abilities and surplus or deficit; 

23 (II) the statement of income and 

24 expenses; 


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1 (III) the statement of sources 

2 and application of funds; and 

3 (IV) such comments and infor4 mation as the Comptroller General 

5 may deem necessary to inform Con6 gress of the financial operations and 

7 condition of the Corporation, together 

8 with such recommendations with re9 spect thereto as the Comptroller Gen10 eral may deem advisable. 

11 (C) COPIES.—A copy of each report re12 quired under subparagraph (A) shall be fur13 nished to the President and to the Chairperson 

14 of the Corporation at the time such report is 

15 submitted to the Congress. 

16 (7) ASSISTANCE AND COSTS.— 

17 (A) PERMITTED USE OF OUTSIDE ASSIST18 ANCE.—For the purpose of conducting an audit 

19 under this subsection, the Comptroller General 

20 may employ by contract, without regard to sec21 tion 3709 of the Revised Statutes of the United 

22 States (41 U.S.C. 5), professional services of 

23 firms and organizations of certified public ac24 countants for temporary periods or for special 

25 purposes. 


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1 (B) COST OF AUDIT COVERED BY COR2 PORATION.— 

3 (i) IN GENERAL.—Upon the request 

4 of the Comptroller General, the Chair5 person of the Corporation shall transfer to 

6 the Comptroller General from funds avail7 able, the amount requested by the Comp8 troller General to cover the reasonable 

9 costs of any audit and report conducted by 

10 the Comptroller General pursuant to this 

11 subsection. 

12 (ii) CREDIT OF FUNDS.—The Comp13 troller General shall credit funds trans14 ferred under clause (i) to the account at 

15 the Treasury established for salaries and 

16 expenses of the Government Accountability 

17 Office, and such amounts shall be available 

18 upon receipt and without fiscal year limita19 tion to cover the full costs of the audit and 

20 report. 

21 SEC. 107. INITIAL FUNDING. 

22 (a) IN GENERAL.—Section 1316 of the Federal 

23 Housing Enterprises Financial Safety and Soundness Act 

24 of 1992 (12 U.S.C. 4516) is amended by adding at the 

25 end the following: 


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1 ‘‘(i) ANNUAL ASSESSMENTS RELATING TO INITIAL

2 FUNDING OF THE FMIC.—Notwithstanding title V of the 

3 Housing Finance Reform and Taxpayer Protection Act of 

4 2013 or any other provision of law, for the period begin5 ning on the date of enactment of this subsection and end6 ing on the FMIC certification date (as that date is set 

7 forth under section 2(16) of the Housing Finance Reform 

8 and Taxpayer Protection Act of 2013, the Director, in 

9 consultation with the Chairperson of the Federal Mort10 gage Insurance Corporation, shall establish and collect 

11 from the enterprises annual assessments in addition to 

12 those required under subsection (a) in an amount not ex13 ceeding the amount sufficient to provide for the reasonable 

14 costs (including administrative costs) and expenses of the 

15 Corporation. All amounts collected under this subsection 

16 shall be transferred to the Federal Mortgage Insurance 

17 Corporation. The annual assessment shall be payable 

18 semiannually for each fiscal year, on October 1 and April 

19 1.’’. 

20 (b) TREATMENT OF ASSESSMENTS.— 

21 (1) DEPOSIT.—Amounts received by the Cor22 poration from assessments imposed under section 

23 1316(i) of the Federal Housing Enterprises Finan24 cial Safety and Soundness Act of 1992 shall be de25 posited by the Corporation in the manner provided 


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1 in section 5234 of the Revised Statutes of the 

2 United States (12 U.S.C. 192) for monies deposited 

3 by the Comptroller of the Currency. 

4 (2) NOT GOVERNMENT FUNDS.—The amounts 

5 received by the Corporation from any assessment 

6 imposed under section 1316(i) of the Federal Hous7 ing Enterprises Financial Safety and Soundness Act 

8 of 1992 shall not be construed to be Government or 

9 public funds or appropriated money. 

10 (3) NO APPORTIONMENT OF FUNDS.—Notwith11 standing any other provision of law, the amounts re12 ceived by the Corporation from any assessment im13 posed under section 1316(i) of the Federal Housing 

14 Enterprises Financial Safety and Soundness Act of 

15 1992 shall not be subject to apportionment for the 

16 purpose of chapter 15 of title 31, United States 

17 Code, or under any other authority. 

18 (4) USE OF FUNDS.— 

19 (A) IN GENERAL.—The Corporation may 

20 use any amounts received from assessments im21 posed under section 1316(i) of the Federal 

22 Housing Enterprises Financial Safety and 

23 Soundness Act of 1992— 

24 (i) for compensation of the employees 

25 of the Corporation; and 


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1 (ii) for all other expenses of the Cor2 poration. 

3 (B) TREASURY INVESTMENTS.—The Cor4 poration may request the Secretary of the 

5 Treasury to invest such portions of amounts re6 ceived from assessments imposed under section 

7 1316(i) of the Federal Housing Enterprises Fi8 nancial Safety and Soundness Act of 1992 that, 

9 in the discretion of the Corporation, are not re10 quired to meet the current working needs of the 

11 Corporation. 

12 (C) GOVERNMENT OBLIGATIONS.—Pursu13 ant to a request under subparagraph (B), the 

14 Secretary of the Treasury shall invest such 

15 amounts in Government obligations— 

16 (i) guaranteed as to principal and in17 terest by the United States with maturities 

18 suitable to the needs of the Corporation; 

19 and 

20 (ii) bearing interest at a rate deter21 mined by the Secretary of the Treasury 

22 taking into consideration current market 

23 yields on outstanding marketable obliga24 tions of the United States of comparable 

25 maturity. 


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1 TITLE II—DUTIES, RESPONSIBIL2 ITIES, AND STRUCTURE OF 

3 THE FMIC 

4 Subtitle A—Duties and Authorities 

5 SEC. 201. DUTIES AND RESPONSIBILITIES OF THE FMIC. 

6 (a) DUTIES.—The principal duties of the Corporation 

7 shall be to— 

8 (1) carry out this Act in a manner that— 

9 (A) minimizes any potential long-term neg10 ative cost on the taxpayer; and 

11 (B) ensures, to the maximum extent pos12 sible— 

13 (i) a liquid and resilient housing fi14 nance market; and 

15 (ii) the availability of mortgage credit; 

16 (2) develop standard form credit risk-sharing 

17 mechanisms, products, structures, contracts, or 

18 other security agreements that require private mar19 ket holders of a covered security insured under this 

20 Act to assume the first loss position with respect to 

21 losses incurred on such securities; 

22 (3) provide insurance on any covered security 

23 for which private market holders of such security 

24 have assumed the first loss position with respect to 

25 losses that may be incurred on such security in 


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1 order to provide a liquid and resilient housing fi2 nance market; 

3 (4) provide leadership to the housing finance 

4 market to help ensure that all geographic locations 

5 have access to mortgage credit; 

6 (5) charge and collect fees in exchange for pro7 viding such insurance, whereby such fees shall be 

8 sufficient to protect the taxpayer from the risk of 

9 providing such insurance and to fund the activities 

10 and operations of the Corporation; 

11 (6) establish and maintain a Mortgage Insur12 ance Fund; 

13 (7) facilitate securitization of eligible mortgages 

14 originated by credit unions and community and mid15 size banks without securitization capabilities; 

16 (8) ensure discipline and integrity in the mar17 ket for covered securities by setting standards for 

18 the approval of private mortgage insurers, servicers, 

19 issuers, and bond guarantors; 

20 (9) establish, operate, and maintain a database 

21 for the collection, public use, and dissemination of 

22 uniform loan level information on eligible mortgages; 

23 (10) develop, adopt, and publish standard uni24 form securitization agreements for covered securi25 ties; 


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1 (11) establish, operate, and maintain an elec2 tronic registry system for eligible mortgages that 

3 collateralize covered securities insured under this 

4 Act; 

5 (12) oversee and supervise the common 

6 securitization platform developed by the business en7 tity announced by the Federal Housing Finance 

8 Agency and established by the enterprises; and 

9 (13) ensure that credit unions and community 

10 and mid-size banks— 

11 (A) have equal access to any such common 

12 securitization platform and any other 

13 securitization platforms; and 

14 (B) are not, in their access or use of such 

15 platforms, discriminated against through dis16 counts for volume pricing or other mechanisms. 

17 (b) SCOPE OF AUTHORITY.—The authority of the 

18 Corporation shall include the authority to exercise such 

19 incidental powers as may be necessary or appropriate to 

20 fulfill the duties and responsibilities of the Corporation set 

21 forth under subsection (a). 

22 (c) DELEGATION OF AUTHORITY.—The Board of Di23 rectors may delegate to officers and employees of the Cor24 poration any of the functions, powers, or duties of the CorVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00041 Fmt 6652 Sfmt 6401 E:\BILLS\S1217.RS S1217

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1 poration, as the Board of Directors determines appro2 priate. 

3 SEC. 202. STANDARD FORM CREDIT RISK-SHARING MECHA4 NISMS, PRODUCTS, STRUCTURES, CON5 TRACTS, OR OTHER SECURITY AGREEMENTS. 

6 (a) REQUIREMENTS; SHARE OF LOSS; DIVERSITY.— 

7 Pursuant to section 201(a)(2), the Corporation shall de8 velop standard form credit-risk sharing mechanisms, prod9 ucts, structures, contracts, or other security agreements 

10 which shall require that the first loss position of private 

11 market holders of a covered security insured under this 

12 Act— 

13 (1) is adequate to cover losses that might be in14 curred as a result of adverse economic conditions, 

15 wherein such conditions are generally consistent with 

16 the economic conditions, including national home 

17 price declines, observed in the United States during 

18 moderate to severe recessions experienced during the 

19 last 100 years; and 

20 (2) is not less than 10 percent of the principal 

21 or face value of the covered security. 

22 (b) DEVELOPMENT WINDOW FOR RISK-SHARING

23 MECHANISMS.— 

24 (1) IN GENERAL.—The Corporation shall com25 plete the development and implementation of the 


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1 mechanisms, products, structures, contracts, or 

2 other security agreements required under subsection 

3 (a) not later than 5 years after the date of enact4 ment of this Act. 

5 (2) EXAMINATION OF VARIOUS MECHANISMS.— 

6 In developing the mechanisms, products, structures, 

7 contracts, or other security agreements required 

8 under subsection (a), the Corporation shall— 

9 (A) examine proposals that include a sen10 ior-subordinated deal structure, credit-linked 

11 structures, and the use of regulated guarantors 

12 with sufficient equity capital to absorb losses 

13 associated with moderate or severe economic 

14 downturns; 

15 (B) consider any risk-sharing mechanisms, 

16 products, structures, contracts, or other secu17 rity agreements undertaken by the business en18 tity announced by the Federal Housing Finance 

19 Agency and established by the enterprises to 

20 provide a common securitization platform for 

21 issuers in the secondary mortgage market; 

22 (C) consider how each proposed mecha23 nism, product, structure, contract, or other se24 curity agreement— 


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1 (i) minimizes any potential long-term 

2 negative cost to the taxpayer; 

3 (ii) impacts the availability of mort4 gage credit for— 

5 (I) small financial institutions, 

6 such as credit unions and community 

7 and mid-size banks; and 

8 (II) consumers; 

9 (iii) influences mortgage affordability; 

10 (iv) allows for loan modifications and 

11 foreclosure prevention alternatives; 

12 (v) interacts with the To-Be-An13 nounced market; and 

14 (vi) facilitates market liquidity and re15 siliency; and 

16 (D) ensure that lenders of all sizes and 

17 from all geographic locations, including rural lo18 cations, have equitable access to secondary 

19 mortgage market financing. 

20 (3) REPORT.— 

21 (A) IN GENERAL.—Not later than 1 year 

22 after the date of enactment of this Act, and an23 nually thereafter until the end of the 5-year pe24 riod provided in paragraph (1), the Corporation 

25 shall submit a report to the Committee on 


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1 Banking, Housing, and Urban Affairs of the 

2 Senate and the Committee on Financial Serv3 ices of the House of Representatives that— 

4 (i) details the benefits and drawbacks 

5 of each mechanism, product, structure, 

6 contract, or other security agreement that 

7 the Director considered in carrying out the 

8 requirement of this section; 

9 (ii) describes the operation and execu10 tion of any mechanisms, products, struc11 tures, contracts, or other security agree12 ments that the Director determines best 

13 fulfills the requirements of this section; 

14 and 

15 (iii) explains how the Corporation ar16 rived at the determination made under 

17 clause (ii). 

18 (B) SUBSEQUENT REPORTS.—After the ex19 piration of the 5-year period provided in para20 graph (1) and the submission of the report re21 quired under subparagraph (A), each time the 

22 Corporation develops an additional standard 

23 form credit risk-sharing mechanism, product, 

24 structure, contract, or other security agreement 

25 that fulfills the requirements of this section, the 


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1 Corporation shall submit a report to the Com2 mittee on Banking, Housing, and Urban Affairs 

3 of the Senate and the Committee on Financial 

4 Services of the House of Representatives ad5 dressing the identical concerns set forth under 

6 clauses (i) through (iii) of subparagraph (A). 

7 SEC. 203. MORTGAGE INSURANCE FUND. 

8 (a) ESTABLISHMENT.—There is established the 

9 Mortgage Insurance Fund, which the Corporation shall— 

10 (1) maintain and administer; and 

11 (2) use to cover losses incurred on covered secu12 rities insured under this Act, when such losses ex13 ceed the first position losses absorbed by private 

14 market holders of such securities. 

15 (b) DEPOSITS.—The Mortgage Insurance Fund shall 

16 be credited with any— 

17 (1) insurance fee amounts required to be depos18 ited in the Fund under this section; 

19 (2) guarantee fee amounts collected under sec20 tion 601; and 

21 (3) amounts earned on investments pursuant to 

22 subsection (h). 

23 (c) FIDUCIARY RESPONSIBILITY.—The Corporation 

24 has the responsibility to ensure that the Mortgage Insur25 ance Fund remains financially sound. 


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1 (d) USE.— 

2 (1) IN GENERAL.—The Mortgage Insurance 

3 Fund shall be solely available to the Corporation for 

4 use by the Corporation to carry out the functions 

5 authorized by this Act and may not be used or oth6 erwise diverted to cover any other expense of the 

7 Federal Government. 

8 (2) EXEMPTION FROM APPORTIONMENT.—Not9 withstanding any other provision of law, amounts re10 ceived by the Mortgage Insurance Fund pursuant to 

11 any fees collected under this section shall not be 

12 subject to apportionment for the purposes of chapter 

13 15 of title 31, United States Code, or under any 

14 other authority. 

15 (e) RESERVE RATIO GOALS FOR MORTGAGE INSUR16 ANCE FUND.—The Corporation shall endeavor to ensure 

17 that the Mortgage Insurance Fund attains a reserve bal18 ance— 

19 (1) of 1.25 percent of the sum of the out20 standing principal balance of the covered securities 

21 for which insurance is being provided under this title 

22 within 5 years of the FMIC certification date, and 

23 to strive to maintain such ratio thereafter, subject to 

24 subparagraph (B); and 


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1 (2) of 2.50 percent of the sum of the out2 standing principal balance of the covered securities 

3 for which insurance is being provided under this title 

4 within 10 years of the FMIC certification date, and 

5 to strive to maintain such ratio at all times there6 after. 

7 (f) MAINTENANCE OF RESERVE RATIO; ESTABLISH8 MENT OF FEES.— 

9 (1) ESTABLISHMENT OF FEES.—The Corpora10 tion shall charge and collect a fee, and may in its 

11 discretion increase or decrease such fee, in connec12 tion with any insurance provided under this title 

13 to— 

14 (A) achieve and maintain the reserve ratio 

15 goals established under subsection (e); 

16 (B) achieve such reserve ratio goals, if the 

17 actual balance of such reserve is below the goal 

18 amounts established under subsection (e); and 

19 (C) fund the operations of the Corporation. 

20 (2) FEE CONSIDERATIONS.—In exercising the 

21 authority granted under paragraph (1), the Corpora22 tion shall consider— 

23 (A) the expected operating expenses of the 

24 Mortgage Insurance Fund; 


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1 (B) the risk of loss to the Mortgage Insur2 ance Fund in carrying out the requirements 

3 under this Act; 

4 (C) the risk presented by, and the loss ab5 sorption capacity of, the credit enhancement 

6 that is provided on the pool of eligible mort7 gages collateralizing the covered security to be 

8 insured under this title; 

9 (D) economic conditions generally affecting 

10 the mortgage markets; 

11 (E) the extent to which the reserve ratio of 

12 the Mortgage Insurance Fund met— 

13 (i) the reserve ratio set for the pre14 ceding 12-month period; or 

15 (ii) the reserve ratio goals established 

16 in subsection (e); and 

17 (F) any other factor that the Corporation 

18 determines appropriate. 

19 (3) FEE UNIFORMITY.—The fee required under 

20 paragraph (1)— 

21 (A) shall be set at a uniform amount appli22 cable to all institutions purchasing insurance 

23 under this title; 

24 (B) may not vary— 

25 (i) by geographic location; or 


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1 (ii) by the size of the institution to 

2 which the fee is charged; and 

3 (C) may not be based on the volume of in4 surance to be purchased by an approved issuer. 

5 (4) DEPOSIT INTO MORTGAGE INSURANCE

6 FUND.—Any fee amounts collected under this sub7 section shall be deposited in the Mortgage Insurance 

8 Fund. 

9 (g) FULL FAITH AND CREDIT.—The full faith and 

10 credit of the United States is pledged to the payment of 

11 all amounts from the Mortgage Insurance Fund which 

12 may be required to be paid under any insurance provided 

13 under this title. 

14 (h) INVESTMENTS.—Amounts in the Mortgage Insur15 ance Fund that are not otherwise employed— 

16 (1) shall be invested in obligations of the 

17 United States; and 

18 (2) may not be invested in any covered security 

19 insured under this Act. 

20 SEC. 204. INSURANCE. 

21 (a) AUTHORITY.—The Corporation shall, upon appli22 cation and in exchange for a fee in accordance with section 

23 203(f), insure the payment of principal and interest on 

24 a covered security with respect to losses that may be in25 curred on such security. 


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1 (b) PRECONDITION; ENSURING PLACEMENT OF

2 FIRST LOSS CAPITAL.—The Corporation shall develop 

3 standards and processes to ensure that prior to making 

4 any commitment to provide insurance under this section 

5 that private market holders have taken first loss position 

6 in a covered security and that such holders have sufficient 

7 capital to cover their risk-sharing obligations. 

8 (c) CASH PAYMENTS; CONTINUED OPERATIONS.—In 

9 the event of a payment default on an eligible mortgage 

10 that collateralizes a covered security insured under this 

11 section that exceeds the first loss position assumed by a 

12 private market holder or that, in the case of an approved 

13 bond guarantor, if the guarantor has become insolvent, the 

14 Corporation shall— 

15 (1) pay, in cash when due, any shortfalls in 

16 payment of principal and interest under the eligible 

17 mortgage; and 

18 (2) continue to charge and collect any fees for 

19 the provision of insurance (in accordance with sec20 tion 203(f)) relating to the covered security. 

21 (d) FULL FAITH AND CREDIT.—The full faith and 

22 credit of the United States is pledged to the payment of 

23 all amounts which may be required to be paid under any 

24 insurance provided under this section. 


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1 (e) PROHIBITION ON FEDERAL ASSISTANCE.—Not2 withstanding any other provision of law, no Federal funds 

3 may be used to purchase or guarantee obligations of, issue 

4 lines of credit to, provide direct or indirect access to any 

5 financing provided by the United States Government to, 

6 or provide direct or indirect grants and aid to any private 

7 market holder of the first loss position on a covered secu8 rity which, on or after the date of enactment of this Act, 

9 has defaulted on its obligations, is at risk of defaulting, 

10 or is likely to default, absent such assistance from the 

11 United States Government. 

12 SEC. 205. AUTHORITY TO PROTECT TAXPAYERS IN UN13 USUAL AND EXIGENT MARKET CONDITIONS. 

14 (a) IN GENERAL.—If the Corporation, upon the writ15 ten agreement of the Chairman of the Board of Governors 

16 of the Federal Reserve System and the Secretary of the 

17 Treasury, and in consultation with the Secretary of Hous18 ing and Urban Development, determines that unusual and 

19 exigent circumstances have created or threatened to create 

20 an anomalous lack of mortgage credit availability within 

21 the housing markets that could materially and severely 

22 disrupt the functioning of the housing finance system of 

23 the United States, the Corporation may, for a period not 

24 to exceed 6 months, provide insurance in accord with sec25 tion 204 to any covered security regardless of whether 


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1 such security has satisfied the requirements of section 

2 202(a). 

3 (b) CONSIDERATIONS.—In exercising the authority 

4 granted under subsection (a), the Corporation shall con5 sider the severity of the conditions present in the housing 

6 markets and the risks presented to the Mortgage Insur7 ance Fund in exercising such authority. 

8 (c) LIMITATION.—The authority granted to the Cor9 poration under subsection (a) may not be exercised more 

10 than once in any given 3-year period. 

11 SEC. 206. GENERAL POWERS. 

12 (a) CORPORATE POWERS.—The Federal Mortgage 

13 Insurance Corporation shall have power— 

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

15 which shall be judicially noticed; 

16 (2) to enter into and perform contracts, leases, 

17 cooperative agreements, or other transactions, on 

18 such terms as it may deem appropriate, with any 

19 agency or instrumentality of the United States, or 

20 with any State, Territory, or possession, or the Com21 monwealth of Puerto Rico, or with any political sub22 division thereof, or with any person, firm, associa23 tion, or corporation; 


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1 (3) to execute, in accordance with its bylaws, all 

2 instruments necessary or appropriate in the exercise 

3 of any of its powers; 

4 (4) in its corporate name, to sue and to be 

5 sued, and to complain and to defend, in any court 

6 of competent jurisdiction, State or Federal, but no 

7 attachment, injunction, or other similar process, 

8 mesne or final, shall be issued against the property 

9 of the Corporation; 

10 (5) to conduct its business without regard to 

11 any qualification or similar statute in any State of 

12 the United States, including the District of Colum13 bia, the Commonwealth of Puerto Rico, and the Ter14 ritories and possessions of the United States; 

15 (6) to lease, purchase, or acquire any property, 

16 real, personal, or mixed, or any interest therein, to 

17 hold, rent, maintain, modernize, renovate, improve, 

18 use, and operate such property, and to sell, for cash 

19 or credit, lease, or otherwise dispose of the same, at 

20 such time and in such manner as and to the extent 

21 that it may deem necessary or appropriate; 

22 (7) to prescribe, repeal, and amend or modify, 

23 rules, regulations, or requirements governing the 

24 manner in which its general business may be con25 ducted; 


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1 (8) to accept gifts or donations of services, or 

2 of property, real, personal, or mixed, tangible, or in3 tangible, in aid of any of its purposes; and 

4 (9) to do all things as are necessary or inci5 dental to the proper management of its affairs and 

6 the proper conduct of its business. 

7 (b) EXPENDITURES.—Except as may be otherwise 

8 provided in this title, in chapter 91 of title 31, United 

9 States Code, or in other laws specifically applicable to 

10 Government corporations, the Corporation shall determine 

11 the necessity for, and the character and amount of its obli12 gations and expenditures, and the manner in which they 

13 shall be incurred, allowed, paid, and accounted for. 

14 (c) EXEMPTION FROM CERTAIN TAXES.—The Cor15 poration, including its franchise, capital, reserves, surplus, 

16 mortgages or other security holdings, and income shall be 

17 exempt from all taxation now or hereafter imposed by the 

18 United States, by any territory, dependency, or possession 

19 thereof, or by any State, county, municipality, or local tax20 ing authority, except that any real property of the Cor21 poration shall be subject to State, territorial, county, mu22 nicipal, or local taxation to the same extent according to 

23 its value as other real property is taxed. 

24 (d) EXCLUSIVE USE OF NAME.—No individual, asso25 ciation, partnership, or corporation, except the bodies corVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00055 Fmt 6652 Sfmt 6401 E:\BILLS\S1217.RS S1217

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1 porate named under section 101, shall hereafter use the 

2 words ‘‘Federal Mortgage Insurance Corporation’’ or any 

3 combination of such words, as the name or a part thereof 

4 under which the individual, association, partnership, or 

5 corporation shall do business. Violations of the foregoing 

6 sentence may be enjoined by any court of general jurisdic7 tion at the suit of the proper body corporate. In any such 

8 suit, the plaintiff may recover any actual damages flowing 

9 from such violation, and, in addition, shall be entitled to 

10 punitive damages (regardless of the existence or nonexist11 ence of actual damages) of not exceeding $100 for each 

12 day during which such violation is committed or repeated. 

13 (e) FISCAL AGENTS.—The Federal Reserve banks 

14 are authorized and directed to act as depositories, 

15 custodians, and fiscal agents for each of the bodies cor16 porate named in section 101, for its own account or as 

17 fiduciary, and such banks shall be reimbursed for such 

18 services in such manner as may be agreed upon; and each 

19 of such bodies corporate may itself act in such capacities, 

20 for its own account or as fiduciary, and for the account 

21 of others. 

22 SEC. 207. EXEMPTIONS. 

23 (a) SECURITIES EXEMPT FROM SEC REGULA24 TION.— 


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1 (1) IN GENERAL.—All covered securities in2 sured or guaranteed by the Corporation shall, to the 

3 same extent as securities that are direct obligations 

4 of or obligations guaranteed as to principal or inter5 est by the United States, be deemed to be exempt 

6 securities within the meaning of the laws adminis7 tered by the Securities and Exchange Commission. 

8 (2) CONFORMING AMENDMENT.—The first sen9 tence of section 3(a)(2) of the Securities Act of 1933 

10 (15 U.S.C. 77c(a)(2)) is amended by inserting ‘‘or 

11 any covered security, as such term is defined under 

12 section 2(9) of the Housing Finance Reform and 

13 Taxpayer Protection Act of 2013;’’ after ‘‘Federal 

14 Reserve bank;’’. 

15 (b) QRM EXEMPTION.—Section 15G(e) of the Secu16 rities Exchange Act of 1934 (15 U.S.C. 78o–11(e)) is 

17 amended— 

18 (1) in paragraph (3)(B)— 

19 (A) by striking ‘‘Association, the’’ and in20 serting ‘‘Association and the’’; and 

21 (B) by striking ‘‘and the Federal home 

22 loan banks’’; and 

23 (2) by adding at the end the following: 

24 ‘‘(7) COVERED SECURITIES INSURED BY THE

25 FEDERAL MORTGAGE INSURANCE CORPORATION.— 


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1 Notwithstanding any other provision of this section, 

2 the requirements of this section shall not apply to 

3 any covered security, as such term is defined under 

4 section 2(9) of the Housing Finance Reform and 

5 Taxpayer Protection Act of 2013, insured or guar6 anteed by the Federal Mortgage Insurance Corpora7 tion or any institution that is subject to the super8 vision of the Federal Mortgage Insurance Corpora9 tion.’’. 

10 Subtitle B—Oversight of Market 

11 Participants 

12 SEC. 211. APPROVAL OF PRIVATE MORTGAGE INSURERS. 

13 (a) STANDARDS FOR APPROVAL OF PRIVATE MORT14 GAGE INSURERS.— 

15 (1) IN GENERAL.—The Corporation shall de16 velop, adopt, and publish standards for the approval 

17 by the Corporation of private mortgage insurers to 

18 provide private mortgage insurance on eligible mort19 gages. 

20 (2) REQUIRED STANDARDS.—The standards re21 quired under paragraph (1) shall include— 

22 (A) the financial history and condition of 

23 the insurer; 

24 (B) the adequacy of the insurer’s capital 

25 structure, including whether the insurer has 


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1 sufficient capital to cover the first loss insur2 ance obligations it assumes under this Act and 

3 that might be incurred in a period of economic 

4 stress, including, but not limited to, any period 

5 of economic stress that would result in a 30 

6 percent (or greater) national home price de7 cline; 

8 (C) the general character and fitness of 

9 the management of the insurer, including com10 pliance history with Federal and State laws; 

11 (D) the risk presented by such insurer to 

12 the Mortgage Insurance Fund; 

13 (E) the adequacy of insurance and fidelity 

14 coverage of the insurer; 

15 (F) a requirement that the insurer submit 

16 audited financial statements to the Director; 

17 and 

18 (G) any other standard the Corporation 

19 determines necessary or appropriate. 

20 (b) APPLICATION AND APPROVAL.— 

21 (1) APPLICATION PROCESS.—The Corporation 

22 shall establish an application process, in such form 

23 and manner and requiring such information as the 

24 Corporation may require, for the approval of private 

25 mortgage insurers under this section. 


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1 (2) APPROVAL.—The Corporation may approve 

2 any application made pursuant to paragraph (1) 

3 provided the private mortgage insurer meets the 

4 standards adopted under subsection (a). 

5 (3) PUBLICATION.—The Corporation shall— 

6 (A) publish in the Federal Register a list 

7 of newly approved private mortgage insurers; 

8 and 

9 (B) maintain an updated list of approved 

10 private mortgage insurers on the website of the 

11 Corporation. 

12 (c) REVIEW, SUSPENSION, AND REVOCATION OF AP13 PROVED STATUS.— 

14 (1) IN GENERAL.—The Corporation may review 

15 the status of any approved private mortgage insurer 

16 if the Corporation is notified of or becomes aware of 

17 any violation by the insurer of this Act or the rules 

18 promulgated pursuant to this Act. 

19 (2) SUSPENSION OR REVOCATION.— 

20 (A) CORPORATION AUTHORITY.—If the 

21 Corporation determines, in a review pursuant to 

22 paragraph (1), that an approved private mort23 gage insurer no longer meets the standards for 

24 approval, the Corporation may suspend or re25 voke the approved status of such insurer. 


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1 (B) RULE OF CONSTRUCTION.—The sus2 pension or revocation of an approved private 

3 mortgage insurer’s approved status under this 

4 paragraph shall have no effect on the status of 

5 any covered security. 

6 (3) PUBLICATION.—The Corporation shall— 

7 (A) publish in the Federal Register a list 

8 of any approved private mortgage insurers who 

9 lost their approved status; and 

10 (B) maintain an updated list of such insur11 ers on the website of the Corporation. 

12 (d) APPEALS.— 

13 (1) IN GENERAL.— 

14 (A) APPEALS OF DENIALS OF APPLICA15 TION.—A private mortgage insurer who submits 

16 an application under subsection (b)(1) to be17 come an approved private mortgage insurer 

18 may appeal a decision of the Corporation deny19 ing such application. 

20 (B) APPEALS OF DENIALS OF BENEFITS

21 OR SUSPENSIONS OF PARTICIPATION.—An ap22 proved private mortgage insurer may appeal a 

23 decision of the Corporation suspending or re24 voking the approved status of such insurer. 


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1 (2) FILING OF APPEAL.—Any insurer who files 

2 an appeal under paragraph (1) shall file the appeal 

3 with the Corporation not later than 90 days after 

4 the date on which the person receives notice of the 

5 decision of the Corporation being appealed. 

6 (3) FINAL DETERMINATION.—The Corporation 

7 shall make a final determination with respect to an 

8 appeal under paragraph (1) not later than 180 days 

9 after the date on which the appeal is filed under 

10 paragraph (2). 

11 (e) AVOIDANCE OF CONFLICTS OF INTEREST.—With 

12 respect to any eligible mortgage collateralizing a covered 

13 security insured under this Act, an approved private mort14 gage insurer may not provide insurance both— 

15 (1) in satisfaction of the credit enhancement re16 quired under section 2(11)(C); and 

17 (2) to cover the first loss position of private 

18 market holders of such covered security. 

19 SEC. 212. APPROVAL OF SERVICERS. 

20 (a) STANDARDS FOR APPROVAL OF SERVICERS.— 

21 (1) IN GENERAL.—The Corporation shall de22 velop, adopt, and publish standards for the approval 

23 by the Corporation of servicers to administer eligible 

24 mortgages, including standards with respect to— 


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1 (A) the collection and forwarding of prin2 cipal and interest payments; 

3 (B) the maintenance of escrow accounts; 

4 (C) the collection and payment of taxes 

5 and insurance premiums; 

6 (D) the maintenance of records on eligible 

7 mortgages; 

8 (E) the establishment of foreclosure loss 

9 mitigation programs that seek to enhance inves10 tor value and prevent, to greatest extent pos11 sible, the need to trigger any claim on insur12 ance offered by the Corporation pursuant to 

13 this title; 

14 (F) the advancement of principal and in15 terest payments to investors in the case of a de16 linquency by a borrower until such time as the 

17 borrower has made all payments in arrears or 

18 the property securing the eligible mortgage has 

19 been liquidated; and 

20 (G) implementing the terms of any loss 

21 mitigation and foreclosure prevention as re22 quired by a uniform securitization agreement 

23 developed under section 223. 


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1 (2) ADDITIONAL REQUIRED STANDARDS.—The 

2 standards required under paragraph (1) shall also 

3 include— 

4 (A) the financial history and condition of 

5 the servicer; 

6 (B) the general character and fitness of 

7 the management of the servicer, including com8 pliance history with Federal and State laws; 

9 (C) the risk presented by such servicer to 

10 the Mortgage Insurance Fund; 

11 (D) a requirement that the servicer submit 

12 audited financial statements to the Corporation; 

13 and 

14 (E) any other standard the Corporation 

15 determines necessary or appropriate. 

16 (3) COORDINATION WITH OTHER REGU17 LATORS.—In developing the standards required 

18 under paragraph (1), the Corporation shall— 

19 (A) coordinate with the Bureau of Con20 sumer Financial Protection; and 

21 (B) to the extent the Corporation deter22 mines practical and appropriate, shall coordi23 nate with the other Federal banking agencies. 

24 (b) APPLICATION AND APPROVAL.— 


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1 (1) APPLICATION PROCESS.—The Corporation 

2 shall establish an application process— 

3 (A) in such form and manner and requir4 ing such information as the Corporation may 

5 require, for the approval of servicers under this 

6 section; and 

7 (B) that does not discriminate against or 

8 otherwise disadvantage small servicers. 

9 (2) APPROVAL.—The Corporation may approve 

10 any application made pursuant to paragraph (1) 

11 provided the servicer meets the standards adopted 

12 under subsection (a). 

13 (3) PUBLICATION.—The Corporation shall— 

14 (A) publish in the Federal Register a list 

15 of newly approved servicers; and 

16 (B) maintain an updated list of approved 

17 servicers on the website of the Corporation. 

18 (c) REVIEW, SUSPENSION, AND REVOCATION OF AP19 PROVED STATUS.— 

20 (1) IN GENERAL.—The Corporation may review 

21 the status of any approved servicer if the Corpora22 tion is notified of or becomes aware of any violation 

23 by the servicer of this Act or the rules promulgated 

24 pursuant to this Act, including any failure by an ap25 proved servicer to comply with terms set forth in any 


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1 uniform securitization agreement developed under 

2 section 223. 

3 (2) SUSPENSION OR REVOCATION.— 

4 (A) CORPORATION AUTHORITY.—If the 

5 Corporation determines, in a review pursuant to 

6 paragraph (1), that an approved servicer no 

7 longer meets the standards for approval, the 

8 Corporation may suspend or revoke the ap9 proved status of such servicer. 

10 (B) RULE OF CONSTRUCTION.—The sus11 pension or revocation of an approved servicer’s 

12 approved status under this paragraph shall 

13 have no effect on the status of any covered se14 curity. 

15 (3) PUBLICATION.—The Corporation shall— 

16 (A) publish in the Federal Register a list 

17 of any approved servicers who lost their ap18 proved status; and 

19 (B) maintain an updated list of such 

20 servicers on the website of the Corporation. 

21 (d) APPEALS.— 

22 (1) IN GENERAL.— 

23 (A) APPEALS OF DENIALS OF APPLICA24 TION.—A servicer who submits an application 

25 under subsection (b)(1) to become an approved 


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1 servicer may appeal a decision of the Corpora2 tion denying such application. 

3 (B) APPEALS OF DENIALS OF BENEFITS

4 OR SUSPENSIONS OF PARTICIPATION.—An ap5 proved servicer may appeal a decision of the 

6 Corporation suspending or revoking the ap7 proved status of such servicer. 

8 (2) FILING OF APPEAL.—Any servicer who files 

9 an appeal under paragraph (1) shall file the appeal 

10 with the Corporation not later than 90 days after 

11 the date on which the person receives notice of the 

12 decision of the Corporation being appealed. 

13 (3) FINAL DETERMINATION.—The Corporation 

14 shall make a final determination with respect to an 

15 appeal under paragraph (1) not later than 180 days 

16 after the date on which the appeal is filed under 

17 paragraph (2). 

18 (e) PETITIONS FOR CHANGE OF SERVICER BY PRI19 VATE MARKET HOLDERS.—The Corporation shall develop 

20 a process by which private market holders of the first loss 

21 position in a covered security may petition the Corporation 

22 for a change in approved servicers if the private market 

23 holders can demonstrate that their current approved 

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1 ment, including by failing to meet any standard identified 

2 under subsection (a)(1). 

3 SEC. 213. APPROVAL OF ISSUERS. 

4 (a) STANDARDS FOR APPROVAL OF ISSUERS.— 

5 (1) IN GENERAL.—The Corporation shall de6 velop, adopt, and publish standards for the approval 

7 by the Corporation of issuers to issue covered securi8 ties, including standards with respect to an issuer’s 

9 ability to— 

10 (A) aggregate eligible mortgage loans into 

11 pools; 

12 (B) securitize eligible mortgage loans for 

13 sale to private investors as a covered security; 

14 (C) transfer investment risk and credit to 

15 private market participants in accordance with 

16 the risk-sharing mechanisms developed by the 

17 Corporation under section 202; 

18 (D) ensure equitable access to the sec19 ondary mortgage market for covered securities 

20 for all institutions regardless of size or geo21 graphic location; 

22 (E) create mechanisms for multi-lender 

23 pools; and 

24 (F) ensure that eligible mortgage loans 

25 that collateralize a covered security insured 


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1 under this title are originated in compliance 

2 with the requirements of this Act. 

3 (2) ADDITIONAL REQUIRED STANDARDS.—The 

4 standards required under paragraph (1) shall also 

5 include— 

6 (A) the financial history and condition of 

7 the issuer; 

8 (B) the adequacy of the capital structure 

9 of the issuer; 

10 (C) the general character and fitness of 

11 the management of the issuer, including compli12 ance history with Federal and State laws; 

13 (D) the risk presented by such issuer to 

14 the Mortgage Insurance Fund; 

15 (E) the adequacy of insurance and fidelity 

16 coverage of the issuer; 

17 (F) a requirement that the issuer submit 

18 audited financial statements to the Corporation; 

19 (G) the capacity of the issuer to secure 

20 first loss credit enhancement; and 

21 (H) any other standard the Corporation 

22 determines necessary or appropriate. 

23 (b) APPLICATION AND APPROVAL.— 

24 (1) APPLICATION PROCESS.— 


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1 (A) IN GENERAL.—The Corporation shall 

2 establish an application process, in such form 

3 and manner and requiring such information as 

4 the Corporation may require, for the approval 

5 of issuers under this section. 

6 (B) APPLICATION PROCESS FOR INSURED

7 DEPOSITORY INSTITUTIONS.—If an insured de8 pository institution seeks to become an ap9 proved issuer under this section, such institu10 tion may only submit its application via a sepa11 rately capitalized affiliate or subsidiary. 

12 (2) APPROVAL.—The Corporation— 

13 (A) may approve— 

14 (i) any application made pursuant to 

15 paragraph (1) provided the issuer meets 

16 the standards adopted under subsection 

17 (a); and 

18 (ii) any application to become an ap19 proved issuer made by the Federal Home 

20 Loan Bank System; and 

21 (B) shall ensure that at least one issuer 

22 approved to issue covered securities under this 

23 section is dedicated to serving the securitization 

24 needs of credit unions and community and mid25 size banks without securitization capabilities. 


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1 (3) PUBLICATION.—The Corporation shall— 

2 (A) publish in the Federal Register a list 

3 of newly approved issuers; and 

4 (B) maintain an updated list of approved 

5 issuers on the website of the Corporation. 

6 (c) FEDERAL HOME LOAN BANK SYSTEM.— 

7 (1) IN GENERAL.—If the Federal Home Loan 

8 Bank System is approved by the Corporation to be9 come an approved issuer under this section, the Cor10 poration shall— 

11 (A) develop a process by which each indi12 vidual Federal Home Loan Bank may elect not 

13 to engage or otherwise contribute to any activ14 ity practiced by the Federal Home Loan Bank 

15 System as an approved issuer; 

16 (B) ensure that, notwithstanding section 

17 11 of the Federal Home Loan Bank Act (12 

18 U.S.C. 1431), any covered securities issued by 

19 the Federal Home Loan Bank System as an ap20 proved issuer are not issued as consolidated 

21 Federal Home Loan Bank debentures and are 

22 explicitly designated or otherwise treated as not 

23 being the joint and several obligations of any 

24 individual Federal Home Loan Bank that has 

25 made an election under subparagraph (A); and 


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1 (C) ensure that in establishing the capital 

2 standards set forth under subsection (a)(2)(B) 

3 with respect to the Federal Home Loan Bank 

4 System, that such standards shall— 

5 (i) not be applicable to any individual 

6 Federal Home Loan Bank that has made 

7 an election under subparagraph (A); 

8 (ii) be based on the volume of eligible 

9 mortgage loan originations made by the 

10 Federal Home Loan Banks that have not 

11 made an election under subparagraph (A); 

12 and 

13 (iii) not adversely impact the tradi14 tional liquidity and advance business of the 

15 Federal Home Loan Banks or the Federal 

16 Home Loan Bank System. 

17 (2) FEDERAL HOME LOAN BANK ACT.— 

18 (A) AMENDMENT.—Section 12 of the Fed19 eral Home Loan Bank Act (12 U.S.C. 1432) is 

20 amended by adding at the end the following: 

21 ‘‘(c) Subject to such regulations as may be prescribed 

22 by the Corporation, one or more Federal Home Loan 

23 Banks may establish a subsidiary. Any subsidiary estab24 lished under this subsection shall be subject to supervision 

25 by the Office of Federal Home Loan Bank Supervision 


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1 of the Corporation and shall be restricted to engaging in 

2 activities related to being an approved issuer, as that term 

3 is defined under section 2(2) of the Housing Finance Re4 form and Taxpayer Protection Act of 2013.’’. 

5 (B) EFFECTIVE DATE.—The amendment 

6 made by subparagraph (A) shall take effect on 

7 the transfer date. 

8 (d) REVIEW, SUSPENSION, AND REVOCATION OF AP9 PROVED STATUS.— 

10 (1) IN GENERAL.—The Corporation may review 

11 the status of any approved issuer if the Corporation 

12 is notified of or becomes aware of any violation by 

13 the issuer of this Act or the rules promulgated pur14 suant to this Act. 

15 (2) SUSPENSION OR REVOCATION.— 

16 (A) CORPORATION AUTHORITY.—If the 

17 Corporation determines, in a review pursuant to 

18 paragraph (1), that an approved issuer no 

19 longer meets the standards for approval, the 

20 Corporation may suspend or revoke the ap21 proved status of such issuer. 

22 (B) RULE OF CONSTRUCTION.—The sus23 pension or revocation of an approved issuer’s 

24 approved status under this paragraph shall 


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1 have no effect on the status of any covered se2 curity. 

3 (3) PUBLICATION.—The Corporation shall— 

4 (A) publish in the Federal Register a list 

5 of any approved issuers who lost their approved 

6 status; and 

7 (B) maintain an updated list of such 

8 issuers on the website of the Corporation. 

9 (e) APPEALS.— 

10 (1) IN GENERAL.— 

11 (A) APPEALS OF DENIALS OF APPLICA12 TION.—An issuer who submits an application 

13 under subsection (b)(1) to become an approved 

14 issuer may appeal a decision of the Corporation 

15 denying such application. 

16 (B) APPEALS OF DENIALS OF BENEFITS

17 OR SUSPENSIONS OF PARTICIPATION.—An ap18 proved issuer may appeal a decision of the Cor19 poration suspending or revoking the approved 

20 status of such issuer. 

21 (2) FILING OF APPEAL.—Any issuer who files 

22 an appeal under paragraph (1) shall file the appeal 

23 with the Corporation not later than 90 days after 

24 the date on which the person receives notice of the 

25 decision of the Corporation being appealed. 


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1 (3) FINAL DETERMINATION.—The Corporation 

2 shall make a final determination with respect to an 

3 appeal under paragraph (1) not later than 180 days 

4 after the date on which the appeal is filed under 

5 paragraph (2). 

6 (f) LIMITATION ON MARKET SHARE.— 

7 (1) IN GENERAL.—The Corporation may not 

8 enter into any contract, covenant, or other agree9 ment with an approved issuer, if such contract, cov10 enant, or agreement would provide the issuer a 

11 share of the covered security issuer market in excess 

12 of 15 percent of the total market, as such market 

13 is measured by the total outstanding principal bal14 ance at origination of eligible mortgages 

15 collateralizing covered securities issued in the pre16 vious 12-month period. 

17 (2) EXCEPTION.—The limitation set forth 

18 under paragraph (1) shall not apply to— 

19 (A) an approved issuer described under 

20 subsection (b)(2)(A)(ii); 

21 (B) the FMIC Mutual Securitization Com22 pany; 

23 (C) any approved issuer which securitizes 

24 only eligible mortgage loans originated by the 

25 issuer or an affiliate of the issuer; or 


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1 (D) any approved issuer to which the Cor2 poration grants a waiver pursuant to paragraph 

3 (3). 

4 (3) WAIVER.—The Corporation may, during the 

5 3-year period beginning on the FMIC certification 

6 date, grant a waiver from the limitation set forth 

7 under paragraph (1) to an approved issuer if the 

8 Corporation determines that the number of approved 

9 issuers is insufficient, such that imposition of the 

10 limitation would adversely affect the availability of 

11 mortgage credit. 

12 (g) LIMITED AUTHORITY TO HOLD ELIGIBLE MORT13 GAGE LOANS.—An approved issuer may, for a period not 

14 to exceed 6-months, hold— 

15 (1) eligible mortgage loans on the balance sheet 

16 of such issuer; and 

17 (2) the first loss position in a covered security 

18 for purposes of obtaining insurance under this title. 

19 SEC. 214. APPROVAL OF BOND GUARANTORS. 

20 (a) STANDARDS FOR APPROVAL OF BOND GUARAN21 TORS.— 

22 (1) IN GENERAL.—The Corporation shall de23 velop, adopt, and publish standards for the approval 

24 by the Corporation of bond guarantors to guarantee 

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1 rities collateralized by eligible mortgages and insured 

2 by the Corporation. 

3 (2) REQUIRED STANDARDS.—The standards re4 quired under paragraph (1) shall include— 

5 (A) the financial history and condition of 

6 the guarantor; 

7 (B) that the guarantor maintain a min8 imum capital level equal to not less than 10 

9 percent of the unpaid principal balance of out10 standing mortgage-backed securities for which 

11 the guarantor is providing insurance, net of any 

12 transactions, including derivative transactions, 

13 repurchase agreements, reverse repurchase 

14 agreements, securities lending transactions, or 

15 securities borrowing transactions, that in the 

16 determination of the Corporation are used by 

17 the guarantor to hedge or mitigate against 

18 credit risk, provided that any such hedging 

19 transaction does not diminish the total amount 

20 of loss absorption capital in the secondary 

21 mortgage market that stands in front of the in22 surance provided by the Corporation under this 

23 title; 


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1 (C) the general character and fitness of 

2 the management of the guarantor, including 

3 compliance history with Federal and State laws; 

4 (D) the risk presented by such guarantor 

5 to the Mortgage Insurance Fund; 

6 (E) the adequacy of insurance and fidelity 

7 coverage of the guarantor; 

8 (F) a requirement that the guarantor sub9 mit audited financial statements to the Direc10 tor; 

11 (G) a requirement that the guarantor meet 

12 a minimum tangible common equity level, or 

13 other minimum capital threshold as the Cor14 poration determines necessary; and 

15 (H) any other standard the Corporation 

16 determines necessary or appropriate. 

17 (b) RULE OF CONSTRUCTION.—Any covered security 

18 issued by an approved issuer and insured by an approved 

19 bond guarantor shall be deemed to have satisfied the cred20 it-risk sharing requirements under section 202(a)(1) with 

21 respect to the eligibility of that security to obtain insur22 ance under this title. 

23 (c) APPLICATION AND APPROVAL.— 

24 (1) APPLICATION PROCESS.— 


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1 (A) IN GENERAL.—The Corporation shall 

2 establish an application process, in such form 

3 and manner and requiring such information as 

4 the Corporation may require, for the approval 

5 of bond guarantors under this section. 

6 (B) APPLICATION PROCESS BY INSURED

7 DEPOSITORY INSTITUTIONS.—If an insured de8 pository institution seeks to become an ap9 proved bond guarantor under this section, such 

10 institution may only submit its application via 

11 a separately capitalized affiliate or subsidiary. 

12 (2) APPROVAL.—The Corporation may approve 

13 any application made pursuant to paragraph (1) 

14 provided the bond guarantor meets the standards 

15 adopted under subsection (a). 

16 (3) PUBLICATION.—The Corporation shall— 

17 (A) publish in the Federal Register a list 

18 of newly approved bond guarantors; and 

19 (B) maintain an updated list of approved 

20 bond guarantors on the website of the Corpora21 tion. 

22 (d) REVIEW, SUSPENSION, AND REVOCATION OF AP23 PROVED STATUS.— 

24 (1) IN GENERAL.—The Corporation may review 

25 the status of any approved bond guarantor if the 


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1 Corporation is notified of or becomes aware of any 

2 violation by the insurer of this Act or the rules pro3 mulgated pursuant to this Act. 

4 (2) SUSPENSION OR REVOCATION.— 

5 (A) CORPORATION AUTHORITY.—If the 

6 Corporation determines, in a review pursuant to 

7 paragraph (1), that an approved bond guar8 antor no longer meets the standards for ap9 proval, the Corporation shall revoke the ap10 proved status of such guarantor. 

11 (B) RULE OF CONSTRUCTION.—The rev12 ocation of an approved bond guarantor’s ap13 proved status under this paragraph shall have 

14 no effect on the status of any covered security. 

15 (3) PUBLICATION.—The Corporation shall— 

16 (A) publish in the Federal Register a list 

17 of any approved bond guarantors who lost their 

18 approved status; and 

19 (B) maintain an updated list of such guar20 antors on the website of the Corporation. 

21 (e) APPEALS.— 

22 (1) IN GENERAL.— 

23 (A) APPEALS OF DENIALS OF APPLICA24 TION.—A bond guarantor who submits an ap25 plication under subsection (c)(1) to become an 


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1 approved bond guarantor may appeal a decision 

2 of the Corporation denying such application. 

3 (B) APPEALS OF DENIALS OF BENEFITS

4 OR SUSPENSIONS OF PARTICIPATION.—An ap5 proved bond guarantor may appeal a decision of 

6 the Corporation suspending or revoking the ap7 proved status of such guarantor. 

8 (2) FILING OF APPEAL.—Any bond guarantor 

9 who files an appeal under paragraph (1) shall file 

10 the appeal with the Corporation not later than 90 

11 days after the date on which the person receives no12 tice of the decision of the Corporation being ap13 pealed. 

14 (3) FINAL DETERMINATION.—The Corporation 

15 shall make a final determination with respect to an 

16 appeal under paragraph (1) not later than 180 days 

17 after the date on which the appeal is filed under 

18 paragraph (2). 

19 (f) LIMITATIONS ON APPROVED BOND GUARAN20 TORS.—With respect to any eligible mortgage 

21 collateralizing a covered security insured under this Act, 

22 an approved bond guarantor may not provide insurance— 

23 (1) in satisfaction of the credit enhancement re24 quired under section 2(11)(C) or as an approved pri25 vate mortgage insurer pursuant to section 211; and 


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1 (2) as an approved bond guarantor under this 

2 section. 

3 (g) PERMISSION TO CARRY OUT OTHER ACTIVI4 TIES.—Nothing in this Act prohibits an approved bond 

5 guarantor from being or controlling an approved issuer, 

6 provided that each issuer and bond guarantor, inde7 pendent of each other, meet the approval standards estab8 lished by the Corporation under this title. 

9 SEC. 215. AUTHORITY TO ESTABLISH FMIC MUTUAL 

10 SECURITIZATION COMPANY. 

11 (a) IN GENERAL.—The Corporation shall establish a 

12 mutual corporation to be known as the ‘‘FMIC Mutual 

13 Securitization Company’’. 

14 (b) PURPOSE.—The purpose of the FMIC Mutual 

15 Securitization Company is to— 

16 (1) develop, securitize, sell, and otherwise meet 

17 the issuing needs of credit unions, community and 

18 mid-size banks, and non-depository mortgage origi19 nators with respect to covered securities; and 

20 (2) purchase from its member participants for 

21 cash, on a single loan basis, eligible mortgage loans 

22 to securitize in a covered security. 

23 (c) SALE OF NECESSARY TECHNOLOGY.—Upon the 

24 FMIC certification date, the enterprises shall sell to the 

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1 ity, infrastructure, property, including intellectual prop2 erty, platform, or any other object or service of an enter3 prise that the Corporation determines necessary for the 

4 FMIC Mutual Securitization Company to carry out its ac5 tivities and operations. 

6 (d) DESIGNATION AS AN APPROVED ISSUER.—The 

7 FMIC Mutual Securitization Company shall be an ap8 proved issuer for purposes of section 213. 

9 (e) ELIGIBILITY.—Eligibility to participate as a 

10 member in the FMIC Mutual Securitization Company 

11 shall be limited to— 

12 (1) insured depository institutions having less 

13 than $15,000,000,000 in total consolidated assets at 

14 the time of the institution’s initial participation in 

15 the Company; or 

16 (2) any non-depository mortgage originator hav17 ing a minimum net worth of $2,500,000. 

18 (f) GOVERNANCE.— 

19 (1) RECOGNITION OF IMPORTANT ROLE OF

20 SMALLER INSTITUTIONS.—The Corporation shall 

21 take all necessary steps to ensure that the govern22 ance provisions of the FMIC Mutual Securitization 

23 Company reflect the important role in the mortgage 

24 market played by the small and mid-sized member 


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1 participants of the FMIC Mutual Securitization 

2 Company. 

3 (2) ESTABLISHMENT OF POSITION OF DIREC4 TOR.—There is established the position of the Direc5 tor of the FMIC Mutual Securitization Company 

6 who shall be the head of the Company. 

7 (3) BOARD OF DIRECTORS.— 

8 (A) IN GENERAL.—The management of 

9 the FMIC Mutual Securitization Company shall 

10 be vested in a Board of Directors (hereafter re11 ferred to as the ‘‘Mutual Board’’), which shall 

12 include representatives of member participants 

13 of the Company, including representatives of— 

14 (i) mortgage bankers; 

15 (ii) community banks; and 

16 (iii) credit unions. 

17 (B) INITIAL APPOINTMENT.—The Corpora18 tion shall make initial appointments of the 

19 members of the Mutual Board. Each such ini20 tial appointment shall be for a term 1 year. 

21 (C) APPOINTMENTS.—Following the initial 

22 1-year appointment of the members of the Mu23 tual Board, member participants in the FMIC 

24 Mutual Securitization Company shall elect the 


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1 members of the Mutual Board from within the 

2 membership of the Company. 

3 (D) ADMINISTRATION.—The Mutual Board 

4 shall administer the affairs of the FMIC Mu5 tual Securitization Company fairly and impar6 tially and without discrimination. 

7 (4) NO PREFERENCES FOR SIZE.—Member par8 ticipants of the FMIC Mutual Securitization Com9 pany shall have equal voting rights on any matters 

10 before the Company, regardless of the size of the in11 dividual member participant. 

12 (g) APPROVAL OF MEMBER PARTICIPANTS.— 

13 (1) IN GENERAL.—The Mutual Board shall de14 velop standards and procedures to approve the appli15 cation of member participants in the FMIC Mutual 

16 Securitization Company. 

17 (2) CONTENT OF STANDARDS.—The standards 

18 required under paragraph (1) shall include stand19 ards relating to the safety and soundness of prospec20 tive member participants, including standards re21 garding the underwriting practices of such prospec22 tive members. 

23 (3) COORDINATION WITH OTHER REGU24 LATORS.— 


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1 (A) CONSULTATION.—In approving any 

2 prospective member to become a member par3 ticipant in the FMIC Mutual Securitization 

4 Company, the Mutual Board may consult and 

5 share information with the primary prudential 

6 regulator of the prospective member. 

7 (B) PRIVILEGE PRESERVED.—Information 

8 shared pursuant to subparagraph (A) shall not 

9 be construed as waiving, destroying, or other10 wise affecting any privilege or confidential sta11 tus that a prospective member may claim with 

12 respect to such information under Federal or 

13 State law as to any person or entity other than 

14 the Mutual Board or its primary prudential 

15 regulator. 

16 (C) RULE OF CONSTRUCTION.—No provi17 sion of this subsection may be construed as im18 plying or establishing that— 

19 (i) any prospective member waives any 

20 privilege applicable to information that is 

21 shared or transferred under any cir22 cumstance to which this subsection does 

23 not apply; or 

24 (ii) any prospective would waive any 

25 privilege applicable to any information by 


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1 submitting the information directly to its 

2 primary prudential regulator, but for this 

3 subsection. 

4 (h) FUNDING AUTHORITY.— 

5 (1) AUTHORITY TO ESTABLISH MEMBERSHIP

6 FEES.—The Mutual Board shall have the authority 

7 to charge and collect fees, and may in its discretion 

8 increase or decrease such fee, on its member partici9 pants for membership in the FMIC Mutual 

10 Securitization Company, including to cover the costs 

11 of— 

12 (A) the initial capitalization of the Com13 pany; 

14 (B) the purchase of any function, activity, 

15 infrastructure, property, including intellectual 

16 property, platform, or any other object or serv17 ice from an enterprise pursuant to subsection 

18 (c); and 

19 (C) the continued operation of the Com20 pany. 

21 (2) LIMITATION.—The fees authorized under 

22 paragraph (1)— 

23 (A) shall be equitably assessed; and 


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1 (B) may be based on the volume of eligible 

2 mortgages that the member participant sells to 

3 the FMIC Mutual Securitization Company. 

4 (i) COORDINATION OF SERVICER APPROVAL.—The 

5 Mutual Board may coordinate with the Corporation to fa6 cilitate the application process for its member participants 

7 to become approved servicers of the Corporation pursuant 

8 to section 212. 

9 SEC. 216. ADDITIONAL AUTHORITY RELATING TO OVER10 SIGHT OF MARKET PARTICIPANTS. 

11 In carrying out its authorities under this subtitle, the 

12 Corporation may, in its discretion, develop, publish, and 

13 adopt such other additional standards or requirements as 

14 the Corporation determines necessary to ensure— 

15 (1) competition among approved private mort16 gage insurers, servicers, issuers, and bond guaran17 tors and other market participants in the secondary 

18 mortgage market; 

19 (2) competitive pricing among approved private 

20 mortgage insurers, servicers, issuers, and bond guar21 antors and other market participants in the sec22 ondary mortgage market; and 

23 (3) liquidity, transparency, and access to mort24 gage credit in the secondary mortgage market. 


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1 SEC. 217. CIVIL MONEY PENALTIES. 

2 (a) AUTHORITY.—In addition to any suspension or 

3 revocation of the approved status of an approved private 

4 mortgage insurer, servicer, issuer, or bond guarantor 

5 under this subtitle, the Corporation may, in its discretion, 

6 impose a civil money penalty on any such approved private 

7 mortgage insurer, servicer, issuer, or bond guarantor that 

8 has failed to comply with or otherwise violates— 

9 (1) any standard adopted by the Corporation 

10 pursuant to this subtitle; or 

11 (2) any other requirement or provision of this 

12 Act, or any order, condition, rule, or regulation 

13 issued pursuant to this Act, applicable to such pri14 vate mortgage insurer, servicer, issuer, or bond 

15 guarantor, as the case may be. 

16 (b) PROCEDURES.— 

17 (1) ESTABLISHMENT.—The Corporation shall 

18 establish standards and procedures governing the 

19 imposition of civil money penalties under this sec20 tion. Such standards and procedures— 

21 (A) shall provide for the Corporation to 

22 notify the approved private mortgage insurer, 

23 servicer, issuer, or bond guarantor, as the case 

24 may be, in writing of the determination of the 

25 Corporation to impose the penalty, which shall 

26 be made on the record; 


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1 (B) shall provide for the imposition of a 

2 penalty only after the approved private mort3 gage insurer, servicer, issuer, or bond guar4 antor, as the case may be, has been given an 

5 opportunity for a hearing on the record; and 

6 (C) may provide for review by the Corpora7 tion of any determination or order, or interlocu8 tory ruling, arising from a hearing. 

9 (2) FACTORS DETERMINING AMOUNT OF PEN10 ALTY.—In determining the amount of a penalty 

11 under this section, the Corporation shall give consid12 eration to factors including— 

13 (A) the gravity of the offense; 

14 (B) any history of prior offenses; 

15 (C) ability to pay the penalty; 

16 (D) injury to the public; 

17 (E) benefits received; 

18 (F) deterrence of future violations; and 

19 (G) such other factors as the Corporation 

20 may determine, by regulation, to be appro21 priate. 

22 (c) ACTION TO COLLECT PENALTY.—If the approved 

23 private mortgage insurer, servicer, issuer, or bond guar24 antor, as the case may be, fails to comply with an order 

25 by the Corporation imposing a civil money penalty under 


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1 this section, the Corporation may bring an action in the 

2 United States District Court for the District of Columbia 

3 to obtain a monetary judgment against the approved pri4 vate mortgage insurer, servicer, issuer, or bond guarantor, 

5 as the case may be, and such other relief as may be avail6 able. The monetary judgment may, in the court’s discre7 tion, include the attorneys’ fees and other expenses in8 curred by the United States in connection with the action. 

9 In an action under this subsection, the validity and appro10 priateness of the order imposing the penalty shall not be 

11 subject to review. 

12 (d) SETTLEMENTS.—The Corporation may com13 promise, modify, or remit any civil money penalty which 

14 may be, or has been, imposed under this section. 

15 (e) DEPOSIT OF PENALTIES.—The Corporation shall 

16 use any civil money penalties collected under this section 

17 to help fund the Mortgage Insurance Fund established 

18 under section 203. 

19 SEC. 218. PROTECTION OF PRIVILEGE AND OTHER MAT20 TERS RELATING TO DISCLOSURES BY MAR21 KET PARTICIPANTS. 

22 (a) INFORMATION SHARING AND MAINTENANCE OF

23 PRIVILEGE.—The Federal Deposit Insurance Act (12 

24 U.S.C. 1811 et seq.) is amended— 


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1 (1) in section 11(t)(2)(A) (12 U.S.C. 

2 1821(t)(2)(A)), by inserting after clause (v) the fol3 lowing: 

4 ‘‘(vii) The Federal Mortgage Insur5 ance Corporation.’’; and 

6 (2) in section 18(x) (12 U.S.C. 1828(x))— 

7 (A) by inserting ‘‘the Federal Mortgage In8 surance Corporation,’’ before ‘‘any Federal 

9 banking agency’’ each place that term appears; 

10 and 

11 (B) by striking ‘‘such agency’’ each place 

12 that term appears and inserting ‘‘Corporation, 

13 agency’’. 

14 (b) PERMISSIBLE CONSULTATION WITH FEDERAL

15 BANKING AGENCIES.— 

16 (1) IN GENERAL.—Pursuant to its authority 

17 under section 103(c), to facilitate the consultive 

18 process, the Corporation may share information with 

19 the Federal banking agencies, or any individual Fed20 eral banking agency, or any State bank supervisor, 

21 or foreign banking authority, on a one-time, regular, 

22 or periodic basis as determined by the Corporation 

23 regarding the capital, asset and liabilities, financial 

24 condition, risk management practices or any other 


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1 practice of any approved private mortgage insurer, 

2 servicer, issuer, or bond guarantor. 

3 (2) PRIVILEGE PRESERVED.—Information 

4 shared by the Corporation pursuant to paragraph 

5 (1) shall not be construed as waiving, destroying, or 

6 otherwise affecting any privilege or confidential sta7 tus that any approved private mortgage insurer, 

8 servicer, issuer, or bond guarantor or any other per9 son may claim with respect to such information 

10 under Federal or State law as to any person or enti11 ty other than such agencies, agency, supervisor, or 

12 authority. 

13 (3) RULE OF CONSTRUCTION.—No provision of 

14 this subsection may be construed as implying or es15 tablishing that— 

16 (A) any person waives any privilege appli17 cable to information that is shared or trans18 ferred under any circumstance to which this 

19 subsection does not apply; or 

20 (B) any person would waive any privilege 

21 applicable to any information by submitting the 

22 information directly to the Federal banking 

23 agencies, or any individual Federal banking 

24 agency, or any State bank supervisor, or foreign 

25 banking authority, but for this subsection. 


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1 Subtitle C—Transparency in 

2 Market Operations 

3 SEC. 221. REVIEW OF LOAN DOCUMENTS; DISCLOSURES. 

4 (a) IN GENERAL.—The Corporation shall, by rule— 

5 (1) require that approved issuers— 

6 (A) grant access to private market inves7 tors seeking to take the first loss position in a 

8 covered security to all— 

9 (i) documents relating to eligible 

10 mortgage loans collateralizing that covered 

11 security; and 

12 (ii) servicing reports of the approved 

13 servicer relating to such mortgages; and 

14 (B) disclose any other material information 

15 that a reasonable investor would want to know, 

16 and make no material omission of such infor17 mation, relating to eligible mortgage loans 

18 collateralizing a covered security; and 

19 (2) establish the timing, frequency, and manner 

20 in which such access and disclosures are made. 

21 (b) PRIVACY PROTECTIONS.—In prescribing the rules 

22 required under this section, the Corporation shall take into 

23 consideration issues of consumer privacy and all statutes, 

24 rules, and regulations related to privacy of consumer cred25 it information and personally identifiable information. 


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1 Such rules shall expressly prohibit the identification of 

2 specific borrowers. 

3 SEC. 222. INVESTOR IMMUNITY. 

4 Any private market investor that has taken the first 

5 loss position in a covered security or that has otherwise 

6 invested in any covered security insured under this Act 

7 shall have immunity and protection from civil liability 

8 under Federal and State law, and no cause of action may 

9 be brought under Federal or State law against such inves10 tor, with respect to whether or not eligible mortgages that 

11 collateralize a covered security insured under this Act have 

12 complied with the requirements of this Act, including, but 

13 not limited to, with respect to any underwriting require14 ments applicable to such mortgage, any representations or 

15 warranties made by an approved issuer or an approved 

16 bond guarantor with respect to such mortgages, or wheth17 er or not the terms of any uniform securitization agree18 ment have been met. 

19 SEC. 223. UNIFORM SECURITIZATION AGREEMENTS. 

20 (a) IN GENERAL.—The Corporation shall develop, 

21 adopt, and publish standard uniform securitization agree22 ments for covered securities which are insured under this 

23 Act. 


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1 (b) REQUIRED CONTENT.—The standard uniform 

2 securitization agreements required to be developed under 

3 subsection (a) shall include terms relating to— 

4 (1) pooling and servicing, including the develop5 ment of uniform standards and practices— 

6 (A) regarding remittance schedules and 

7 payment delays; and 

8 (B) permitting the transfer of servicing 

9 rights, if such transfer is determined to be in 

10 the best financial interest of the investor, as 

11 such interest is calculated on a net present 

12 value basis; 

13 (2) representations and warranties, including 

14 representations and warranties as to compliance or 

15 conformity with the requirements of this Act; 

16 (3) indemnification and remedies, including for 

17 the restitution or indemnification of the Corporation 

18 with respect to early term delinquencies of eligible 

19 mortgages collateralizing a covered security; 

20 (4) the qualification, responsibilities, and duties 

21 of trustees; and 

22 (5) any other terms or standards the Corpora23 tion determines necessary or appropriate. 

24 (c) DEFINING REPRESENTATION AND WARRANTY

25 VIOLATIONS.—In developing the uniform securitization 


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1 agreements required under subsection (a), the Corporation 

2 shall also develop, adopt, and publish clear and uniform 

3 standards that define and illustrate what actions, or omis4 sions to act, comprise a violation of the representations 

5 and warranties clauses that are made a part of such agree6 ments. 

7 (d) CONSULTATION.—The Corporation shall work 

8 with industry groups, including servicers, originators, 

9 issuers, and mortgage investors to develop the uniform 

10 securitization agreements required under subsection (a). 

11 SEC. 224. UNIFORM MORTGAGE DATABASE. 

12 (a) UNIFORM MORTGAGE DATABASE.—The Corpora13 tion shall establish, operate, and maintain a database for 

14 the collection, public use, and dissemination of uniform 

15 loan level information on eligible mortgages relating to— 

16 (1) loan characteristics; 

17 (2) borrower information; 

18 (3) the property securing the eligible mort19 gages; 

20 (4) loan data required at the time of application 

21 for insurance from the Corporation under this title; 

22 (5) the quality and consistency of appraisal and 

23 collateral data on eligible mortgages; 

24 (6) industry-wide servicing data standards; and 


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1 (7) such other data, datasets, information, 

2 facts, or measurements as the Corporation deter3 mines appropriate to improve and enhance loan 

4 quality and operational efficiencies within the sec5 ondary mortgage market. 

6 (b) CONSIDERATIONS.—In establishing the database 

7 required under subsection (a), the Corporation shall take 

8 into consideration, build upon, and adopt to the extent the 

9 Corporation determines appropriate, the existing data 

10 standards set forth under the Uniform Mortgage Data 

11 Program initiative established by the Federal Housing Fi12 nance Agency. 

13 (c) REGULATIONS.—The Corporation shall, by regu14 lation— 

15 (1) establish the manner and form by which 

16 any loan level information collected under subsection 

17 (a) may be accessed by the public, including whether 

18 or not to establish a fee for such access; 

19 (2) require that such loan level information be 

20 made available to the public in a uniform manner, 

21 in a form designed for ease and speed of access, ease 

22 and speed of downloading, and ease and speed of 

23 use; and 

24 (3) ensure the protection of any personally 

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1 tion, or mix of information, collected and made 

2 available for public access. 

3 (d) MONTHLY UPDATE.—The database required 

4 under subsection (a) shall be updated not less frequently 

5 than once a month. 

6 SEC. 225. ELECTRONIC REGISTRATION OF ELIGIBLE MORT7 GAGES. 

8 (a) ESTABLISHMENT OF ELECTRONIC REGISTRATION

9 SYSTEM.—The Corporation shall establish, operate, and 

10 maintain an electronic registry system for eligible mort11 gages that collateralize a covered security insured under 

12 this Act in order to automate, centralize, standardize, and 

13 improve the process of tracking changes in servicing rights 

14 and beneficial ownership interests in such eligible mort15 gages. 

16 (b) CONSIDERATIONS.—In establishing the electronic 

17 registry system required under subsection (a), the Cor18 poration shall take into consideration, build upon, and 

19 adopt to the extent the Corporation determines appro20 priate, any existing efforts of the Federal Housing Fi21 nance Agency or expertise among the private sector to de22 velop a sound, efficient system for document custody and 

23 electronic registration of mortgages, notes, titles, and 

24 liens. 


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1 Subtitle D—FMIC Structure 

2 SEC. 231. OFFICE OF UNDERWRITING. 

3 (a) ESTABLISHMENT.—There is established within 

4 the Federal Mortgage Insurance Corporation an Office of 

5 Underwriting which shall be headed by the Deputy Direc6 tor of Underwriting, who shall be appointed by the Board 

7 of Directors. 

8 (b) RESPONSIBILITIES.—The Office of Underwriting 

9 shall ensure, through oversight, analysis, and examination, 

10 that eligible mortgages that collateralize a covered security 

11 insured under this Act comply with the requirements of 

12 this Act, including with respect to— 

13 (1) the submission of complete and accurate 

14 loan data on eligible mortgages; 

15 (2) the identification of ineligible mortgage 

16 loans; 

17 (3) assisting lenders with originating high-qual18 ity, lower-risk eligible mortgages; and 

19 (4) any other activity that the Director deter20 mines appropriate. 

21 SEC. 232. OFFICE OF SECURITIZATION. 

22 (a) ESTABLISHMENT.—There is established within 

23 the Federal Mortgage Insurance Corporation an Office of 

24 Securitization which shall be headed by the Deputy DirecVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00100 Fmt 6652 Sfmt 6401 E:\BILLS\S1217.RS S1217

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1 tor of Securitization, who shall be appointed by the Board 

2 of Directors. 

3 (b) RESPONSIBILITIES.— 

4 (1) IN GENERAL.—The Office of Securitization 

5 shall— 

6 (A) oversee and supervise the common 

7 securitization platform developed by the busi8 ness entity announced by the Federal Housing 

9 Finance Agency and established by the enter10 prises, including by requiring that the platform 

11 have system capabilities to permit the issuance 

12 of multi-lender covered securities; 

13 (B) ensure that credit unions, community 

14 and mid-size banks, and small non-depository 

15 lenders have equitable access to any such plat16 form, including through the development and 

17 facilitation of options for multi-lender pools of 

18 eligible mortgages to be securitized and issued 

19 as covered securities through such platform; 

20 and 

21 (C) coordinate and consult with the Fed22 eral Home Loan Bank System to establish a 

23 securitization platform that addresses the needs 

24 of its members. 


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1 (2) RULES FOR USE OF COMMON

2 SECURITIZATION PLATFORM.— 

3 (A) IN GENERAL.—The Corporation, act4 ing through the Office of Securitization, may 

5 promulgate rules— 

6 (i) regarding the use of the common 

7 securitization platform described under 

8 paragraph (1)(A); and 

9 (ii) to permit securities other than 

10 covered securities to be issued through 

11 such platform for reasonable compensation. 

12 (B) CONTENT OF RULES.—Any rule that 

13 may be promulgated under subparagraph (A) 

14 may include a requirement that any security to 

15 be issued through the common securitization 

16 platform be subject to a uniform securitization 

17 agreement developed under section 223. 

18 (c) ESTABLISHMENT OF DATABASE TO PROVIDE NO19 TICE TO DIFFERENT CLASSES OF LIEN HOLDERS.—The 

20 Office of Securitization shall establish, operate, and main21 tain a database that— 

22 (1) can be accessed by any holder of a lien on 

23 an eligible mortgage; 


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1 (2) identifies and tracks if a junior lien or any 

2 other subordinate lien has been issued on the prop3 erty securing an eligible mortgage; 

4 (3) notifies, to the extent feasible, any senior or 

5 first lien holder of the existence of such junior or 

6 subordinate lien; and 

7 (4) informs— 

8 (A) the senior or first lien holder of the 

9 monthly performance of the junior or subordi10 nate lien; and 

11 (B) the junior or subordinate lien holder of 

12 the monthly performance of the senior or first 

13 lien. 

14 SEC. 233. OFFICE OF FEDERAL HOME LOAN BANK SUPER15 VISION. 

16 (a) ESTABLISHMENT.—There is established within 

17 the Federal Mortgage Insurance Corporation an Office of 

18 Federal Home Loan Bank Supervision which shall be 

19 headed by the Deputy Director of Federal Home Loan 

20 Bank Supervision, who shall be appointed by the Board 

21 of Directors. 

22 (b) RESPONSIBILITIES.—The Office of Federal Home 

23 Loan Bank Supervision shall— 

24 (1) oversee, coordinate, and supervise the Fed25 eral Home Loan Banks and the Federal Home Loan 


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1 Bank System, including the transition of all activi2 ties transferred to the Corporation pursuant to sec3 tion 301; and 

4 (2) supervise any authorized subsidiary of one 

5 or more Federal Home Loan Banks that is approved 

6 as an approved issuer pursuant to section 

7 213(b)(2)(A)(ii), including with respect to the initial 

8 capitalization of any such subsidiary. 

9 TITLE III—TRANSFER OF POW10 ERS, PERSONNEL, AND PROP11 ERTY TO FMIC FROM FHFA 

12 SEC. 301. POWERS AND DUTIES TRANSFERRED. 

13 (a) FEDERAL HOME LOAN BANK FUNCTIONS

14 TRANSFERRED.— 

15 (1) TRANSFER OF FUNCTIONS.—There are 

16 transferred to the Corporation all functions of the 

17 Federal Housing Finance Agency and the Director 

18 of the Federal Housing Finance Agency relating 

19 to— 

20 (A) the supervision of the Federal Home 

21 Loan Banks and the Federal Home Loan Bank 

22 System; and 

23 (B) all rulemaking authority of the Federal 

24 Housing Finance Agency and the Director of 

25 the Federal Housing Finance Agency relating 


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1 to the Federal Home Loan Banks and the Fed2 eral Home Loan Bank System. 

3 (2) POWERS, AUTHORITIES, RIGHTS, AND DU4 TIES.—The Corporation shall succeed to all powers, 

5 authorities, rights, and duties that were vested in 

6 the Federal Housing Finance Agency and the Direc7 tor of the Federal Housing Finance Agency, includ8 ing all conservatorship or receivership authorities, on 

9 the day before the transfer date in connection with 

10 the functions and authorities transferred under 

11 paragraph (1). 

12 (3) EFFECTIVE DATE.—The transfer of func13 tions under this paragraph shall take effect on the 

14 transfer date. 

15 (b) CONTINUATION AND COORDINATION OF CERTAIN

16 ACTIONS.— 

17 (1) IN GENERAL.—All regulations, orders, de18 terminations, and resolutions described under para19 graph (2) shall remain in effect according to the 

20 terms of such regulations, orders, determinations, 

21 and resolutions, and shall be enforceable by or 

22 against the Corporation until modified, terminated, 

23 set aside, or superseded in accordance with applica24 ble law by the Corporation, any court of competent 

25 jurisdiction, or operation of law. 


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1 (2) APPLICABILITY.—A regulation, order, de2 termination, or resolution is described under this 

3 subsection if it— 

4 (A) was issued, made, prescribed, or al5 lowed to become effective by— 

6 (i) the Federal Housing Finance 

7 Agency; or 

8 (ii) a court of competent jurisdiction, 

9 and relates to functions transferred by this 

10 Act; 

11 (B) relates to the performance of functions 

12 that are transferred by this section; and 

13 (C) is in effect on the transfer date. 

14 (c) DISPOSITION OF AFFAIRS.—During the period 

15 preceding the transfer date, the Director of the Federal 

16 Housing Finance Agency, for the purpose of winding up 

17 the affairs of the Federal Housing Finance Agency in con18 nection with the performance of functions that are trans19 ferred by this section— 

20 (1) shall manage the employees of such Agency 

21 and provide for the payment of the compensation 

22 and benefits of any such employees which accrue be23 fore the transfer date; and 

24 (2) may take any other action necessary for the 

25 purpose of winding up the affairs of the Office. 


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1 (d) USE OF PROPERTY AND SERVICES.— 

2 (1) PROPERTY.—The Corporation may use the 

3 property and services of the Federal Housing Fi4 nance Agency to perform functions which have been 

5 transferred to the Corporation until such time as the 

6 Agency is abolished under section 303 to facilitate 

7 the orderly transfer of functions transferred under 

8 this section, any other provision of this Act, or any 

9 amendment made by this Act to any other provision 

10 of law. 

11 (2) AGENCY SERVICES.—Any agency, depart12 ment, or other instrumentality of the United States, 

13 and any successor to any such agency, department, 

14 or instrumentality, that was providing supporting 

15 services to the Agency before the transfer date in 

16 connection with functions that are transferred to the 

17 Corporation shall— 

18 (A) continue to provide such services, on a 

19 reimbursable basis, until the transfer of such 

20 functions is complete; and 

21 (B) consult with any such agency to co22 ordinate and facilitate a prompt and reasonable 

23 transition. 

24 (e) CONTINUATION OF SERVICES.—The Corporation 

25 may use the services of employees and other personnel of 


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1 the Federal Housing Finance Agency, on a reimbursable 

2 basis, to perform functions which have been transferred 

3 to the Corporation for such time as is reasonable to facili4 tate the orderly transfer of functions pursuant to this sec5 tion, any other provision of this Act, or any amendment 

6 made by this Act to any other provision of law. 

7 (f) SAVINGS PROVISIONS.— 

8 (1) EXISTING RIGHTS, DUTIES, AND OBLIGA9 TIONS NOT AFFECTED.—Subsection (a) and section 

10 303 shall not affect the validity of any right, duty, 

11 or obligation of the United States, the Director of 

12 the Federal Housing Finance Agency, the Federal 

13 Housing Finance Agency, or any other person, that 

14 existed on the day before transfer date. 

15 (2) CONTINUATION OF SUITS.—No action or 

16 other proceeding commenced by or against the Di17 rector of the Federal Housing Finance Agency in 

18 connection with the functions that are transferred to 

19 the Corporation under this section shall abate by 

20 reason of the enactment of this Act, except that the 

21 Corporation shall be substituted for the Director of 

22 the Federal Housing Finance Agency as a party to 

23 any such action or proceeding. 

24 (g) CONFORMING AMENDMENTS.— 


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1 (1) FEDERAL HOME LOAN BANK ACT.—The 

2 Federal Home Loan Bank Act (12 U.S.C. 1421 et 

3 seq.) is amended— 

4 (A) by striking ‘‘the Director’’ and insert5 ing ‘‘the Corporation’’ each place that term ap6 pears; 

7 (B) by striking ‘‘The Director’’ and insert8 ing ‘‘The Corporation’’ each place that term ap9 pears; 

10 (C) by striking ‘‘Chairman of the Director 

11 of Governors’’ and inserting ‘‘Chairman of the 

12 Board of Governors’’ each place that term ap13 pears; 

14 (D) by striking ‘‘the Agency’’ and inserting 

15 ‘‘the Corporation’’ each place that term ap16 pears; 

17 (E) in section 2, by striking paragraphs 

18 (11) and (12) and inserting the following: 

19 ‘‘(11) CORPORATION.—The term ‘Corporation’ 

20 means the Federal Mortgage Insurance Corporation 

21 established under title I of the Housing Finance Re22 form and Taxpayer Protection Act of 2013.’’; and 

23 (F) in section 11(l)(5), in the header to 

24 such paragraph, by striking ‘‘OF THE DIREC25 TOR’’. 


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1 (2) FEDERAL HOUSING ENTERPRISES FINAN2 CIAL SAFETY AND SOUNDNESS ACT.—Section 1316 

3 of the Federal Housing Enterprises Financial Safety 

4 and Soundness Act of 1992 (12 U.S.C. 4516) is 

5 amended— 

6 (A) in subsection (a)— 

7 (i) in the matter preceding paragraph 

8 (1), by striking ‘‘the regulated entities’’ 

9 and inserting ‘‘each enterprise’’; and 

10 (ii) in paragraph (1), by striking ‘‘and 

11 under section 20 of the Federal Home 

12 Loan Bank Act’’; 

13 (B) in subsection (b), by striking para14 graph (2); 

15 (C) in subsection (c)— 

16 (i) by striking ‘‘any regulated entity’’ 

17 and inserting ‘‘any enterprise’’; 

18 (ii) by striking ‘‘the regulated entity’’ 

19 and inserting ‘‘the enterprise’’; 

20 (iii) by striking ‘‘a regulated entity’’ 

21 and inserting ‘‘an enterprise’’ each place 

22 that term appears; 

23 (iv) by striking ‘‘such regulated enti24 ty’’ and inserting ‘‘such enterprise’’ each 

25 place that term appears; and 


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1 (v) by striking ‘‘such entity’’ and in2 serting ‘‘such enterprise’’; and 

3 (D) in subsection (e)— 

4 (i) by striking ‘‘each regulated entity’’ 

5 and inserting ‘‘each enterprise’’; and 

6 (ii) by striking ‘‘such regulated enti7 ty’’ and inserting ‘‘such enterprise’’. 

8 (3) RIGHT TO FINANCIAL PRIVACY ACT OF

9 1978.—Section 1113(o) of the Right to Financial 

10 Privacy Act of 1978 (12 U.S.C. 3413(o)) is amend11 ed— 

12 (A) in the heading to the subsection, by 

13 ‘‘FEDERAL HOUSING FINANCE AGENCY’’ and 

14 inserting ‘‘FEDERAL MORTGAGE INSURANCE

15 CORPORATION’’; 

16 (B) by striking ‘‘Federal Housing Finance 

17 Agency’’ and inserting ‘‘Federal Mortgage In18 surance Corporation’’; and 

19 (C) by striking ‘‘Federal Housing Finance 

20 Agency’s’’ and inserting ‘‘Federal Mortgage In21 surance Corporation’s’’. 

22 (4) EFFECTIVE DATE.—The amendments made 

23 by this subsection shall take effect on the transfer 

24 date. 


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1 SEC. 302. TRANSFER AND RIGHTS OF EMPLOYEES OF THE 

2 FHFA. 

3 (a) TRANSFER.—Each employee of the Federal 

4 Housing Finance Agency that is employed in connection 

5 with functions that are transferred to the Corporation 

6 under section 301 shall be transferred to the Corporation 

7 for employment, not later than the transfer date, and such 

8 transfer shall be deemed a transfer of function for pur9 poses of section 3503 of title 5, United States Code. 

10 (b) STATUS OF EMPLOYEES.—The transfer of func11 tions under this title, and the abolishment of the Federal 

12 Housing Finance Agency under section 303, may not be 

13 construed to affect the status of any transferred employee 

14 as an employee of an agency of the United States for pur15 poses of any other provision of law. 

16 (c) GUARANTEED POSITIONS.—Each employee trans17 ferred under subsection (a) shall be guaranteed a position 

18 with the same status, tenure, grade, and pay as that held 

19 on the day immediately preceding the transfer. 

20 (d) APPOINTMENT AUTHORITY FOR EXCEPTED EM21 PLOYEES.— 

22 (1) IN GENERAL.—In the case of an employee 

23 occupying a position in the excepted service, any ap24 pointment authority established under law or by reg25 ulations of the Office of Personnel Management for 


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1 filling such position shall be transferred, subject to 

2 paragraph (2). 

3 (2) DECLINE OF TRANSFER.—The Corporation 

4 may decline a transfer of authority under paragraph 

5 (1), to the extent that such authority relates to a po6 sition excepted from the competitive service because 

7 of its confidential, policymaking, policy-determining, 

8 or policy-advocating character. 

9 (e) REORGANIZATION.—If the Corporation deter10 mines, after the end of the 1-year period beginning on the 

11 transfer date, that a reorganization of the combined work12 force is required, that reorganization shall be deemed a 

13 major reorganization for purposes of affording affected 

14 employee retirement under section 8336(d)(2) or 

15 8414(b)(1)(B) of title 5, United States Code. 

16 (f) EMPLOYEE BENEFIT PROGRAMS.— 

17 (1) IN GENERAL.—Any employee of the Federal 

18 Housing Finance Agency accepting employment with 

19 the Corporation as a result of a transfer under sub20 section (a) may retain, for 12 months after the date 

21 on which such transfer occurs, membership in any 

22 employee benefit program of the Agency or the Cor23 poration, as applicable, including insurance, to which 

24 such employee belongs on the transfer date if— 


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1 (A) the employee does not elect to give up 

2 the benefit or membership in the program; and 

3 (B) the benefit or program is continued by 

4 the Corporation. 

5 (2) COST DIFFERENTIAL.— 

6 (A) IN GENERAL.—The difference in the 

7 costs between the benefits which would have 

8 been provided by the Federal Housing Finance 

9 Agency and those provided by this section shall 

10 be paid by the Corporation. 

11 (B) HEALTH INSURANCE.—If any em12 ployee elects to give up membership in a health 

13 insurance program or the health insurance pro14 gram is not continued by the Corporation, the 

15 employee shall be permitted to select an alter16 nate Federal health insurance program not 

17 later than 30 days after the date of such elec18 tion or notice, without regard to any other reg19 ularly scheduled open season. 

20 SEC. 303. ABOLISHMENT OF FHFA. 

21 Effective upon the FMIC certification date, the Fed22 eral Housing Finance Agency and the position of the Di23 rector of the Federal Housing Finance Agency are abol24 ished. 


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1 SEC. 304. TRANSFER OF PROPERTY AND FACILITIES. 

2 Effective upon the FMIC certification date all prop3 erty of the Federal Housing Finance Agency shall transfer 

4 to the Corporation. 

5 SEC. 305. TECHNICAL AND CONFORMING AMENDMENTS. 

6 (a) EFFECTIVE DATE.—The amendments made by 

7 this section shall take effect on the date of enactment of 

8 this Act. 

9 (b) REFERENCES IN FEDERAL LAW.—On and after 

10 the date of enactment of this Act, any reference in Federal 

11 law to the Director of the Federal Housing Finance Agen12 cy or the Federal Housing Finance Agency, in connection 

13 with any function of the Director of the Federal Housing 

14 Finance Agency or the Federal Housing Finance Agency 

15 transferred under section 301, shall be deemed a reference 

16 to the Chairperson of the Federal Mortgage Insurance 

17 Corporation or the Federal Mortgage Insurance Corpora18 tion, as appropriate and consistent with the amendments 

19 made by this Act. 

20 (c) TITLE 18, UNITED STATES CODE.—Title 18, 

21 United States Code, is amended— 

22 (1) in section 1905, by inserting ‘‘or the Fed23 eral Mortgage Insurance Corporation’’ after ‘‘Fed24 eral Housing Finance Agency’’; 

25 (2) in section 212(c)(2)— 


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1 (A) in subparagraph (F), by striking ‘‘; 

2 and’’ and inserting a semicolon; 

3 (B) in subparagraph (G), by striking the 

4 period at the end and inserting ‘‘; and’’; and 

5 (C) by adding at the end the following: 

6 ‘‘(H) the Federal Mortgage Insurance Cor7 poration.’’; 

8 (3) in section 657, by inserting ‘‘the Federal 

9 Mortgage Insurance Corporation,’’ after ‘‘Federal 

10 Housing Finance Agency,’’; 

11 (4) in section 1006, by inserting ‘‘the Federal 

12 Mortgage Insurance Corporation,’’ after ‘‘Federal 

13 Housing Finance Agency,’’; and 

14 (5) in section 1014, by inserting ‘‘the Federal 

15 Mortgage Insurance Corporation,’’ after ‘‘Federal 

16 Housing Finance Agency,’’. 

17 (d) FLOOD DISASTER PROTECTION ACT OF 1973.— 

18 Section 102(b)(5) of the Flood Disaster Protection Act of 

19 1973 (42 U.S.C. 4012a(b)(5)) is amended in subsection 

20 (b)(5), by inserting ‘‘the Federal Mortgage Insurance Cor21 poration,’’ after ‘‘Federal Housing Finance Agency,’’. 

22 (e) TITLE 5, UNITED STATES CODE.—Title 5, 

23 United States Code, is amended— 


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1 (1) in section 5313, by inserting the following 

2 new item after the item relating to the Director of 

3 the Federal Housing Finance Agency: 

4 ‘‘Director of the Federal Mortgage Insurance 

5 Corporation.’’; and 

6 (2) in section 3132(a)(1)(D), by inserting ‘‘the 

7 Federal Mortgage Insurance Corporation,’’ after 

8 ‘‘Federal Housing Finance Agency,’’. 

9 (f) SARBANES-OXLEY ACT.—Section 

10 105(b)(5)(B)(ii)(II) of the Sarbanes-Oxley Act of 2002 

11 (15 U.S.C. 7215(b)(5)(B)(ii)(II)) is amended by inserting 

12 ‘‘or the Chairperson of the Federal Mortgage Insurance 

13 Corporation’’ after ‘‘Director of the Federal Housing Fi14 nance Agency’’. 

15 (g) FEDERAL DEPOSIT INSURANCE ACT.—The Fed16 eral Deposit Insurance Act (12 U.S.C. 1811 et seq.) is 

17 amended— 

18 (1) in section 7(a)(2)(A), by inserting ‘‘the 

19 Federal Mortgage Insurance Corporation,’’ after 

20 ‘‘Federal Housing Finance Agency,’’ each place that 

21 term appears; 

22 (2) in section 8(e)(7)(A)(vi), by inserting ‘‘, the 

23 Federal Mortgage Insurance Corporation,’’ after 

24 ‘‘Federal Housing Finance Agency’’; 


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1 (3) in section 11(t)(2)(A), by adding at the end 

2 the following: 

3 ‘‘(viii) The Federal Mortgage Insur4 ance Corporation.’’; and 

5 (4) in section 33(e), by inserting ‘‘, the Federal 

6 Mortgage Insurance Corporation,’’ after ‘‘Federal 

7 Housing Finance Agency’’. 

8 (h) RIEGLE COMMUNITY DEVELOPMENT AND REGU9 LATORY IMPROVEMENT ACT OF 1994.—Section 117(e) of 

10 the Riegle Community Development and Regulatory Im11 provement Act of 1994 (12 U.S.C. 4716(e)) is amended 

12 by inserting ‘‘the Federal Mortgage Insurance Corpora13 tion,’’ after ‘‘Federal Housing Finance Agency,’’. 

14 (i) MAHRA ACT OF 1997.—Section 517(b)(4) of the 

15 Multifamily Assisted Housing Reform and Affordability 

16 Act of 1997 (42 U.S.C. 1437f note) is amended by insert17 ing ‘‘the Federal Mortgage Insurance Corporation,’’ after 

18 ‘‘Federal Housing Finance Agency,’’. 

19 (j) TITLE 44, UNITED STATES CODE.—Section 

20 3502(5) of title 44, United States Code, is amended by 

21 inserting ‘‘the Federal Mortgage Insurance Corporation,’’ 

22 after ‘‘Federal Housing Finance Agency,’’. 

23 (k) ACCESS TO LOCAL TV ACT OF 2000.—Section 

24 1004(d)(2)(D)(iii) of the Launching Our Communities’ 

25 Access to Local Television Act of 2000 (47 U.S.C. 


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1 1103(d)(2)(D)(iii)) is amended by inserting ‘‘or the Fed2 eral Mortgage Insurance Corporation,’’ after ‘‘Federal 

3 Housing Finance Agency’’. 

4 (l) FIRREA.—The Financial Institutions Reform, 

5 Recovery, and Enhancement Act of 1989 is amended— 

6 (1) in section 1216— 

7 (A) in subsection (a)— 

8 (i) in paragraph (2), by striking ‘‘; 

9 and’’ and inserting a semicolon; 

10 (ii) in paragraph (3), by striking the 

11 period and inserting ‘‘; and’’; and 

12 (iii) by adding at the end the fol13 lowing: 

14 ‘‘(4) the Federal Mortgage Insurance Corpora15 tion.’’; and 

16 (B) in subsection (c), by inserting ‘‘the 

17 Federal Mortgage Insurance Corporation,’’ be18 fore ‘‘and the Federal Housing Finance Agen19 cy,’’; 

20 (2) in section 402(e), by striking ‘‘Federal 

21 Housing Finance Agency’’ each place that term ap22 pears and inserting ‘‘Federal Mortgage Insurance 

23 Corporation’’; 

24 (3) in section 1124, by inserting ‘‘the Federal 

25 Mortgage Insurance Corporation,’’ after ‘‘Federal 


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1 Housing Finance Agency,’’ each place that term ap2 pears; and 

3 (4) in section 1125(b), by inserting ‘‘the Fed4 eral Mortgage Insurance Corporation,’’ after ‘‘Fed5 eral Housing Finance Agency,’’. 

6 (m) EESA.—The Emergency Economic Stabilization 

7 Act of 2008 (12 U.S.C. 5201 note) is amended— 

8 (1) in section 104(b)— 

9 (A) in paragraph (4), by striking ‘‘; and’’ 

10 and inserting a semicolon; 

11 (B) in paragraph (5), by striking the pe12 riod and inserting ‘‘; and’’; and 

13 (C) by adding at the end the following: 

14 ‘‘(6) the Federal Mortgage Insurance Corpora15 tion.’’; and 

16 (2) in section 109(b), by inserting ‘‘the Federal 

17 Mortgage Insurance Corporation,’’ after ‘‘Federal 

18 Housing Finance Agency,’’. 

19 (n) DODD-FRANK ACT.—The Dodd-Frank Wall 

20 Street Reform and Consumer Protection Act (Public Law 

21 111–203) is amended— 

22 (1) in section 342(g)(1)— 

23 (A) in subparagraph (H), by striking ‘‘; 

24 and’’ and inserting a semicolon; 


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1 (B) in subparagraph (I), by striking the 

2 period and inserting ‘‘; and’’; and 

3 (C) by adding at the end the following: 

4 ‘‘(J) the Federal Mortgage Insurance Cor5 poration.’’; 

6 (2) in section 989E(a)(1), by adding at the end 

7 the following: 

8 ‘‘(J) The Federal Mortgage Insurance Cor9 poration.’’; and 

10 (3) in section 1481(b), by inserting ‘‘the Fed11 eral Mortgage Insurance Corporation,’’ after ‘‘Fed12 eral Housing Finance Agency,’’. 

13 (o) HOUSING AND URBAN-RURAL RECOVERY ACT.— 

14 Section 469 of the Housing and Urban-Rural Recovery 

15 Act of 1983 (12 U.S.C. 1701p–1) is amended, in the first 

16 sentence, by inserting ‘‘the Federal Mortgage Insurance 

17 Corporation,’’ after ‘‘Federal Housing Finance Agency,’’. 

18 (p) NEIGHBORHOOD REINVESTMENT CORPORATION

19 ACT.—Section 606(c)(3) of the Neighborhood Reinvest20 ment Corporation Act (42 U.S.C. 8105(c)(3)) is amended 

21 by inserting ‘‘, the Federal Mortgage Insurance Corpora22 tion,’’ after ‘‘Federal Housing Finance Agency’’. 

23 (q) FEDERAL INSURANCE OFFICE ACT.—Section 

24 313(r)(4) of title 31, United States Code, is amended by 


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1 inserting ‘‘the Federal Mortgage Insurance Corporation,’’ 

2 after ‘‘Federal Housing Finance Agency,’’. 

3 (r) COMMODITY EXCHANGE ACT.—Section 

4 1a(39)(E) of the Commodity Exchange Act (7 U.S.C. 

5 1a(39)(E)) is amended— 

6 (1) by striking ‘‘a regulated entity’’ and insert7 ing ‘‘an enterprise’’; and 

8 (2) by inserting before the period at the end 

9 ‘‘the Federal Mortgage Insurance Corporation in the 

10 case of a swap dealer, major swap participant, secu11 rity-based swap dealer, or major security-based swap 

12 participant that is a Federal Home Loan Bank’’. 

13 (s) TRUTH IN LENDING ACT.—The Truth in Lending 

14 Act (15 U.S.C. 1601 et seq.) is amended— 

15 (1) section 129H(b)(4), by inserting ‘‘the Fed16 eral Mortgage Insurance Corporation,’’ after ‘‘Fed17 eral Housing Finance Agency,’’; and 

18 (2) in section 129E— 

19 (A) in subsection (g)(1), by inserting ‘‘the 

20 Federal Mortgage Insurance Corporation,’’ 

21 after ‘‘Federal Housing Finance Agency,’’; and 

22 (B) in subsection (h), by inserting ‘‘the 

23 Federal Mortgage Insurance Corporation,’’ 

24 after ‘‘Federal Housing Finance Agency,’’. 


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1 (t) FFIEC.—The first sentence of section 1011 of 

2 the Federal Financial Institutions Examination Council 

3 Act of 1978 (12 U.S.C. 3310) is amended by inserting 

4 ‘‘the Federal Mortgage Insurance Corporation,’’ before 

5 ‘‘and the Federal Housing Finance Agency’’. 

6 TITLE IV—IMPROVING TRANS7 PARENCY, ACCOUNTABILITY, 

8 AND EFFICACY WITHIN AF9 FORDABLE HOUSING 

10 SEC. 401. AFFORDABLE HOUSING ALLOCATIONS. 

11 (a) FEE AND ALLOCATION OF AMOUNTS.—Subject to 

12 subsection (b), and in addition to any fees for the provi13 sion of insurance established in accordance with title II, 

14 in each fiscal year the Corporation shall— 

15 (1) charge and collect a fee in an amount equal 

16 to not less than 5 basis points and not more than 

17 10 basis points for each dollar of the outstanding 

18 principal balance of eligible mortgages collateralizing 

19 covered securities for which insurance is being pro20 vided under title II; and 

21 (2) allocate or otherwise transfer— 

22 (A) 80 percent of such fee amounts to the 

23 Secretary of Housing and Urban Development 

24 to fund the Housing Trust Fund established 

25 under section 1338 of the Federal Housing EnVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00123 Fmt 6652 Sfmt 6401 E:\BILLS\S1217.RS S1217

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1 terprises Financial Safety and Soundness Act 

2 of 1992 (12 U.S.C. 4568); and 

3 (B) 20 percent of such fee amounts to the 

4 Secretary of the Treasury to fund the Capital 

5 Magnet Fund established under section 1339 of 

6 the Federal Housing Enterprises Financial 

7 Safety and Soundness Act of 1992 (12 U.S.C. 

8 4569). 

9 (b) SUSPENSION OF CONTRIBUTIONS.—The Corpora10 tion may temporarily suspend allocations under subsection 

11 (a) upon a finding by the Corporation that such alloca12 tions are contributing, or would contribute, to the finan13 cial instability of the Mortgage Insurance Fund estab14 lished under section 203. 

15 SEC. 402. HOUSING TRUST FUND. 

16 Section 1338 of the Federal Housing Enterprises Fi17 nancial Safety and Soundness Act of 1992 (12 U.S.C. 

18 4568) is amended— 

19 (1) in subsection (a), by striking ‘‘by the enter20 prises under section 1337’’ and inserting ‘‘pursuant 

21 to section 401 of the Housing Finance Reform and 

22 Taxpayer Protection Act of 2013’’; 

23 (2) by repealing subsection (b); and 

24 (3) in subsection (c)— 


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1 (A) in paragraph (1), by striking ‘‘Except 

2 as provided in subsection (b), the’’ and insert3 ing ‘‘The’’; 

4 (B) in paragraph (4)(B), by striking 

5 ‘‘other than fiscal year 2009’’; 

6 (C) in paragraph (7)— 

7 (i) in subparagraph (A), by striking ‘‘; 

8 and’’ and inserting a semicolon; 

9 (ii) in subparagraph (B)(iv)— 

10 (I) by striking ‘‘section 132’’ and 

11 inserting ‘‘section 1132’’; and 

12 (II) by striking the period at the 

13 end and inserting a semicolon; and 

14 (iii) by adding at the end the fol15 lowing: 

16 ‘‘(C) grants and loans, including through 

17 the use of pilot programs of sufficient scale, to 

18 support the research and development of sus19 tainable homeownership and affordable rental 

20 programs, provided that such grant or loan 

21 amounts are used only for the benefit of fami22 lies whose income does not exceed 120 percent 

23 of the area median income as determined by the 

24 Secretary, with adjustments for family size; and 


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1 ‘‘(D) provide limited credit enhancement, 

2 and other forms of credit support, for product 

3 and services that— 

4 ‘‘(i) will increase the rate of sustain5 able homeownership and affordable rental 

6 by individuals or families whose income 

7 does not exceed 120 percent of the area 

8 median income as determined by the Sec9 retary, with adjustments for family size; 

10 and 

11 ‘‘(ii) might not otherwise be offered or 

12 supported by a pilot program of sufficient 

13 scale to determine the viability of such 

14 products and services in the private mar15 ket.’’; and 

16 (D) in paragraph (10)— 

17 (i) by amending subparagraph (A) to 

18 read as follows: 

19 ‘‘(A) ENSURING EFFICIENT USE OF GRANT

20 AMOUNTS.— 

21 ‘‘(i) USE FOR CERTAIN ELIGIBLE AC22 TIVITIES.—In each fiscal year, of the ag23 gregate amount allocated to a State or 

24 State designated entity under this sub25 section— 


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1 ‘‘(I) 35 percent shall be used for 

2 activities under subparagraph (A) of 

3 paragraph (7); 

4 ‘‘(II) 5 percent shall be used for 

5 activities under subparagraph (B) of 

6 paragraph (7); and 

7 ‘‘(III) 60 percent shall be used 

8 for activities under subparagraphs (C) 

9 and (D) of paragraph (7). 

10 ‘‘(ii) ENSURING BENEFITS FOR RURAL

11 COMMUNITIES.— 

12 ‘‘(I) IN GENERAL.—In each fiscal 

13 year, of the aggregate amount allo14 cated to a State or State designated 

15 entity under this subsection, the State 

16 or State designated entity shall ensure 

17 that, at a minimum, such amounts 

18 are distributed for the benefit of non19 entitlement areas in that State in the 

20 same proportion that the total amount 

21 of nonentitlement areas in that State 

22 bears to the total amount of all areas 

23 in that State. 

24 ‘‘(II) TARGETED OUTREACH TO

25 SMALLER COMMUNITIES.—In carrying 


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1 out the requirement under subclause 

2 (I), each State or State designated en3 tity shall in distributing amounts allo4 cated to that State or State des5 ignated entity give priority to non6 entitlement areas with a population of 

7 less than 20,000. 

8 ‘‘(III) DEFINITION OF NON9 ENTITLEMENT AREA.—For purposes 

10 of this clause, the term ‘nonentitle11 ment area’ has the same meaning 

12 given that term under section 

13 102(a)(7) of the Housing and Com14 munity Development Act of 1974 (42 

15 U.S.C. 5302(a)(7)).’’; and 

16 (ii) by striking subparagraph (E). 

17 SEC. 403. CAPITAL MAGNET FUND. 

18 Section 1339 of the Federal Housing Enterprises Fi19 nancial Safety and Soundness Act of 1992 (12 U.S.C. 

20 4569) is amended— 

21 (1) in subsection (b)(1), by striking ‘‘pursuant 

22 to section 1337’’ and inserting ‘‘pursuant to section 

23 401 of the Housing Finance Reform and Taxpayer 

24 Protection Act of 2013’’; and 

25 (2) in subsection (h), by striking paragraph (7). 


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1 SEC. 404. ADDITIONAL TAXPAYER PROTECTIONS. 

2 (a) ENSURING BENEFITS SUPPORT CITIZENS AND

3 LAWFUL PERMANENT RESIDENTS.—The Secretary of 

4 Housing and Urban Development and the Secretary of the 

5 Treasury, respectively, shall ensure that grant amounts al6 located to covered grantees, allocated by covered grantees 

7 to eligible recipients, or allocated to individuals by such 

8 eligible recipients are used for the benefit of only lawful 

9 permanent residents and citizens of the United States in 

10 carrying out the activities of— 

11 (1) the Housing Trust Fund; and 

12 (2) the Capital Magnet Fund. 

13 (b) NOT TO BE USED FOR POLITICAL ACTIVITIES.— 

14 Consistent with the existing requirements under sections 

15 1338(c)(10)(D) and section 1339(h)(5) of the Federal 

16 Housing Enterprises Financial Safety and Soundness Act 

17 of 1992, the Secretary of Housing and Urban Develop18 ment and the Secretary of the Treasury, respectively, shall 

19 ensure that grant amounts allocated by covered grantees 

20 to eligible recipients or allocated to individuals by such eli21 gible recipients are not used for— 

22 (1) political activities; 

23 (2) advocacy; 

24 (3) lobbying, whether directly or through other 

25 parties; 


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1 (4) influencing the selection, nomination, elec2 tion, or appointment of one or more candidates to 

3 any Federal, State or local office; 

4 (5) personal counseling services; 

5 (6) travel expenses; and 

6 (7) preparing or providing advice on tax re7 turns. 

8 (c) PENALTIES.— 

9 (1) CIVIL MONEY PENALTY.—If an eligible re10 cipient or any other individual in receipt of grant 

11 amounts described by this section violates any provi12 sion of subsection (a) or (b), the Secretary of Hous13 ing and Urban Development or the Secretary of the 

14 Treasury, as the case may be, may impose a civil 

15 penalty on such recipient or individual, as the case 

16 may be, of not more than $1,000,000 for each viola17 tion. 

18 (2) CRIMINAL PENALTIES.—Whoever, being 

19 subject to the provisions of subsection (a) or (b), 

20 knowingly participates, directly or indirectly, in any 

21 manner in conduct that results in a violation of such 

22 provisions shall, notwithstanding section 3571 of 

23 title 18, United States Code, be fined not more than 

24 $1,000,000 for each violation, imprisoned for not 

25 more than 5 years, or both. 


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1 (3) RULE OF CONSTRUCTION.—The penalties 

2 imposed under paragraphs (1) or (2) shall be in ad3 dition to any other available civil remedy or any 

4 other available criminal penalty and may be imposed 

5 whether or not the Secretary of Housing and Urban 

6 Development or the Secretary of the Treasury, as 

7 the case may be, imposes other administrative sanc8 tions. 

9 (d) DEFINITION.—As used in this section— 

10 (1) the term ‘‘covered grantee’’ means— 

11 (A) for purposes of the Housing Trust 

12 Fund, a State or State designated entity; and 

13 (B) for purposes of the Capital Magnet 

14 Fund, an eligible grantee as described under 

15 section 1339(e) of the Federal Housing Enter16 prises Financial Safety and Soundness Act of 

17 1992; 

18 (2) the term ‘‘eligible recipient’’ means— 

19 (A) for purposes of the Housing Trust 

20 Fund, a recipient as described under section 

21 1338(c)(9) of the Federal Housing Enterprises 

22 Financial Safety and Soundness Act of 1992t; 

23 and 


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1 (B) for purposes of the Capital Magnet 

2 Fund, a recipient of assistance from the Capital 

3 Magnet Fund; 

4 (3) the term ‘‘Capital Magnet Fund’’ means the 

5 Capital Magnet Fund established under section 

6 1339 of the Federal Housing Enterprises Financial 

7 Safety and Soundness Act of 1992 (12 U.S.C. 

8 4569); and 

9 (4) the term ‘‘Housing Trust Fund’’ means the 

10 Housing Trust Fund established under section 1338 

11 of the Federal Housing Enterprises Financial Safety 

12 and Soundness Act of 1992 (12 U.S.C. 4568). 

13 TITLE V—WIND DOWN OF 

14 FANNIE MAE AND FREDDIE MAC 

15 SEC. 501. REPEAL OF GSE CHARTERS. 

16 (a) FANNIE MAE.—Effective on the FMIC certifi17 cation date, the charter of the Federal National Mortgage 

18 Association is repealed and the Federal National Mort19 gage Association shall have no authority to conduct new 

20 business under such charter, except that the provisions of 

21 such charter in effect immediately before such repeal shall 

22 continue to apply with respect to the rights and obligations 

23 of any holders of— 

24 (1) outstanding debt obligations of the Federal 

25 National Mortgage Association, including any— 


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1 (A) bonds, debentures, notes, or other 

2 similar instruments; 

3 (B) capital lease obligations; or 

4 (C) obligations in respect of letters of cred5 it, bankers’ acceptances, or other similar instru6 ments; or 

7 (2) mortgage-backed securities guaranteed by 

8 the Federal National Mortgage Association. 

9 (b) FREDDIE MAC.—Effective on the FMIC certifi10 cation date, the charter of the Federal Home Loan Mort11 gage Corporation is repealed and the Federal Home Loan 

12 Mortgage Corporation shall have no authority to conduct 

13 new business under such charter, except that the provi14 sions of such charter in effect immediately before such re15 peal shall continue to apply with respect to the rights and 

16 obligations of any holders of— 

17 (1) outstanding debt obligations of the Federal 

18 Home Loan Mortgage Corporation, including any— 

19 (A) bonds, debentures, notes, or other 

20 similar instruments; 

21 (B) capital lease obligations; or 

22 (C) obligations in respect of letters of cred23 it, bankers’ acceptances, or other similar instru24 ments; or 


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1 (2) mortgage-backed securities guaranteed by 

2 the Federal Home Loan Mortgage Corporation. 

3 (c) EXISTING GUARANTEE OBLIGATIONS.— 

4 (1) EXPLICIT GUARANTEE.—The full faith and 

5 credit of the United States is pledged to the pay6 ment of all amounts which may be required to be 

7 paid under any obligation described under sub8 sections (a) and (b). 

9 (2) CONTINUED DIVIDEND PAYMENTS.—Not10 withstanding section 502 or any other provision of 

11 law, and subject to section 601, provision 2(a) (re12 lating to Dividend Payment Dates and Dividend Pe13 riods) and provision 2(c) (relating to Dividend Rates 

14 and Dividend Amount) of the Senior Preferred 

15 Stock Purchase Agreement, or any provision of any 

16 certificate in connection with such Agreement cre17 ating or designating the terms, powers, preferences, 

18 privileges, limitations, or any other conditions of the 

19 Variable Liquidation Preference Senior Preferred 

20 Stock of an enterprise issued pursuant to such 

21 Agreement— 

22 (A) shall not be amended, restated, or oth23 erwise changed to reduce the rate or amount of 

24 dividends in effect pursuant to such Agreement 

25 as of the Third Amendment to such Agreement 


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1 dated August 17, 2012, except that any amend2 ment to such Agreement to facilitate the sale of 

3 assets of the enterprises to facilitate compliance 

4 with the provisions of section 502(b) shall be 

5 permitted; and 

6 (B) shall remain in effect until the guar7 antee obligations described under subsections 

8 (a)(2) and (b)(2) are fully extinguished. 

9 (3) APPLICABILITY.—Notwithstanding section 

10 502, all guarantee fee amounts derived from the sin11 gle-family mortgage guarantee business of the enter12 prises in existence as of the FMIC certification date 

13 shall be subject to the terms of the Senior Preferred 

14 Stock Purchase Agreement. 

15 (d) FEDERAL SAFETY AND SOUNDNESS ACT.— 

16 (1) IN GENERAL.—The Federal Housing Enter17 prises Financial Safety and Soundness Act of 1992 

18 (12 U.S.C. 4501 et seq.) is amended— 

19 (A) in section 1303— 

20 (i) in paragraph (2), by striking 

21 ‘‘’Federal Housing Finance Agency’’ and 

22 inserting ‘‘Federal Mortgage Insurance 

23 Corporation’’; 

24 (ii) in paragraph (3), by striking 

25 ‘‘means’’ and all that follows through the 


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1 period at the end, and inserting ‘‘means 

2 the Federal Home Loan Bank Act.’’; 

3 (iii) by repealing paragraph (4); and 

4 (iv) in paragraph (9), by striking ‘‘Di5 rector of the Federal Housing Finance 

6 Agency’’ and inserting ‘‘Board of Directors 

7 of the Federal Mortgage Insurance Cor8 poration’’; 

9 (B) by repealing section 1313A; and 

10 (C) by repealing section 1317(d). 

11 (2) EFFECTIVE DATE.—The amendments made 

12 by paragraph (1) shall take effect on the FMIC cer13 tification date. 

14 SEC. 502. WIND DOWN. 

15 (a) WIND DOWN.— 

16 (1) AUTHORITY OF FHFA.—Beginning on the 

17 date of enactment of this Act and ending on the 

18 FMIC certification date, the Director of the Federal 

19 Housing Finance Agency, in consultation with the 

20 Corporation and the Secretary of the Treasury, shall 

21 take such action, and may prescribe such regulations 

22 and procedures, as may be necessary to wind down 

23 the operations of the enterprises in an orderly man24 ner that complies with the requirements of this Act 

25 and any amendments made by this Act. 


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1 (2) LIMITATION.—Notwithstanding any author2 ity granted to the Director of the Federal Housing 

3 Finance Agency under paragraph (1), the sale, 

4 transfer, exchange, or other disposition of any asset 

5 subject to the wind down required under this section 

6 shall be prohibited, if the Corporation— 

7 (A) in its discretion determines that such 

8 sale, transfer, exchange, or disposition would 

9 materially interfere with the ability of the Cor10 poration to carry out the requirements of this 

11 Act; and 

12 (B) notifies, in writing, the Director of the 

13 Federal Housing Finance Agency within 14 

14 days of such determination. 

15 (3) RULE OF CONSTRUCTION.—Notwith16 standing any authority granted to the Director of 

17 the Federal Housing Finance Agency under para18 graph (1), the Director of the Federal Housing Fi19 nance Agency— 

20 (A) shall have no authority to sell, trans21 fer, exchange, or otherwise dispose of any guar22 antee obligations described under subsections 

23 (a)(2) and (b)(2) of section 501; and 

24 (B) shall have no rights, claims, or title to, 

25 nor any authority to sell, transfer, exchange, or 


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1 otherwise dispose of, guarantee fee amounts de2 rived from the single-family mortgage guar3 antee business of the enterprises in existence as 

4 of the FMIC certification date. 

5 (b) DIVISION OF ASSETS AND LIABILITIES; AUTHOR6 ITY TO ESTABLISH HOLDING CORPORATION AND DIS7 SOLUTION TRUST FUND.—The action and procedures re8 quired under subsection (a)— 

9 (1) shall include the establishment and execu10 tion of plans to provide for an equitable division, dis11 tribution, and liquidation of the assets and liabilities 

12 of an enterprise, including any infrastructure, prop13 erty, including intellectual property, platforms, or 

14 any other thing or object of value, provided such 

15 plan complies with the requirements of this Act and 

16 any amendments made by this Act; and 

17 (2) may provide for establishment of— 

18 (A) a holding corporation organized under 

19 the laws of any State of the United States or 

20 the District of Columbia for the purpose of 

21 winding down an enterprise; and 

22 (B) one or more trusts to which to trans23 fer— 

24 (i) outstanding debt obligations of an 

25 enterprise; or 


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1 (ii) outstanding mortgages held for 

2 the purpose of collateralizing mortgage3 backed securities guaranteed by an enter4 prise. 

5 (c) RECOUPMENT BY SENIOR PREFERRED SHARE6 HOLDERS.— 

7 (1) IN GENERAL.—Subject to the requirements 

8 of this Act, any proceeds from the wind down of an 

9 enterprise shall be paid first to the senior preferred 

10 shareholders of each such enterprise, then to the 

11 preferred shareholders of each such enterprise, and 

12 then to the common shareholders of each such enter13 prise. 

14 (2) JOINT DETERMINATION.—The amount of 

15 any proceeds to be paid pursuant to paragraph (1) 

16 shall be jointly determined by the Director of the 

17 Federal Housing Finance Agency, the Corporation, 

18 and the Secretary of the Treasury. 

19 (3) MAXIMUM RETURN TO SHAREHOLDERS.— 

20 The wind down of each enterprise required under 

21 this section shall be managed by the Director of the 

22 Federal Housing Finance Agency, in consultation 

23 with the Corporation and the Secretary of the Treas24 ury, to obtain resolutions that maximize the return 


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1 for the senior preferred shareholders under para2 graph (1), to the extent that such resolutions— 

3 (A) are consistent with the goal of sup4 porting a sound, stable, and liquid housing 

5 market; 

6 (B) are consistent with applicable Federal 

7 and State law; 

8 (C) comply with the requirements of this 

9 Act and any amendments made by this Act; 

10 and 

11 (D) protect the taxpayer. 

12 (4) SALE OF CERTAIN ASSETS AS A GOING CON13 CERN.—Except as provided in section 601 or else14 where as required in this Act, if the Director of the 

15 Federal Housing Finance Agency, in consultation 

16 with the Corporation and the Secretary of the Treas17 ury, determines that the sale of any line of business, 

18 or any function, activity, or service of an enterprise 

19 as a going concern will maximize the return for the 

20 senior preferred shareholders as required under 

21 paragraph (3), the Director may conduct such sale, 

22 provided that— 

23 (A) under no circumstance, shall such sale 

24 transfer, convey, or authorize, or be deemed to 

25 transfer, convey, or authorize, any guarantee or 


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1 Federal support, assistance, or backing, implicit 

2 or explicit, related to any such line of business, 

3 function, activity, or service; and 

4 (B) such sale does not impede or otherwise 

5 interfere with the ability of the Federal Mort6 gage Insurance Corporation to carry out the 

7 functions and requirements of this Act. 

8 (5) RULE OF CONSTRUCTION.—For purposes of 

9 this subsection, the term ‘‘proceeds’’ does not in10 clude any guarantee fee amounts derived from the 

11 single-family mortgage guarantee business of the en12 terprises in existence as of the FMIC certification 

13 date. 

14 SEC. 503. ALIGNING PURPOSE OF CONSERVATORSHIP WITH 

15 FMIC. 

16 (a) POWER AS CONSERVATOR.—Section 

17 1367(b)(2)(D) of the Federal Housing Enterprises Finan18 cial Safety and Soundness Act of 1992 (12 U.S.C. 

19 4617(b)(2)(D)) is amended to read as follows: 

20 ‘‘(D) POWER AS CONSERVATOR.—After the 

21 date of enactment of the Housing Finance Re22 form and Taxpayer Protection Act of 2013 the 

23 Agency shall, as conservator, take such actions 

24 as are necessary— 


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1 ‘‘(i) to ensure the efficient, effective, 

2 and expeditious wind down of the enter3 prises; 

4 ‘‘(ii) to manage the affairs, assets, 

5 and obligations of the enterprises and to 

6 operate the enterprises in compliance with 

7 the requirements of the Housing Finance 

8 Reform and Taxpayer Protection Act of 

9 2013; 

10 ‘‘(iii) to assist the Federal Mortgage 

11 Insurance Corporation, in a consultative 

12 capacity, in carrying out the requirements 

13 under the Housing Finance Reform and 

14 Taxpayer Protection Act of 2013; and 

15 ‘‘(iv) to maintain liquidity and sta16 bility in the secondary mortgage market 

17 until such as time as the charters of the 

18 enterprises are revoked pursuant to title V 

19 of such Act.’’. 

20 (b) RULE OF CONSTRUCTION.—Nothing in this Act, 

21 or any amendments made by this Act, except as may be 

22 explicitly provided for in this Act, or any amendment made 

23 by this Act, shall be deemed to alter the powers, authori24 ties, rights, and duties that are vested in the Federal 

25 Housing Finance Agency and the Director of the Federal 


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1 Housing Finance Agency with respect to its supervision 

2 and regulation of the enterprises. 

3 SEC. 504. CONFORMING LOAN LIMITS. 

4 (a) IN GENERAL.—Beginning on the date of enact5 ment of this Act, the limitations governing the maximum 

6 original principal obligation of conventional mortgages 

7 that may be purchased by the Federal National Mortgage 

8 Association and the Federal Home Loan Mortgage Cor9 poration, referred to in section 302(b)(2) of the Federal 

10 National Mortgage Association Charter Act (12 U.S.C. 

11 1717(b)(2)) and section 305(a)(2) of the Federal Home 

12 Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)), 

13 respectively, shall not exceed $417,000 for a mortgage se14 cured by a single-family residence, $533,850 for a mort15 gage secured by a 2-family residence, $645,300 for a 

16 mortgage secured by a 3-family residence, and $801,950 

17 for a mortgage secured by a 4-family residence, except 

18 that such maximum limitations shall be adjusted effective 

19 January 1 of each year beginning after the date of enact20 ment of this Act, subject to the limitations in this para21 graph. Each adjustment shall be made by adding to each 

22 such amount (as it may have been previously adjusted) 

23 a percentage thereof equal to the percentage increase, dur24 ing the most recent 12-month or 4-quarter period ending 

25 before the time of determining such annual adjustment, 


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1 in the housing price index maintained pursuant to section 

2 1322 of the Federal Housing Enterprises Financial Safety 

3 and Soundness Act of 1992 (12 U.S.C. 4542). If the 

4 change in such house price index during the most recent 

5 12-month or 4-quarter period ending before the time of 

6 determining such annual adjustment is a decrease, then 

7 no adjustment shall be made for the next year, and the 

8 next adjustment shall take into account prior declines in 

9 the house price index, so that any adjustment shall reflect 

10 the net change in the house price index since the last ad11 justment. Declines in the house price index shall be accu12 mulated and then reduce increases until subsequent in13 creases exceed prior declines. 

14 (b) SPECIAL EXCEPTION FOR ALASKA, HAWAII, 

15 GUAM, AND USVI.—The limitations set forth under sub16 section (a) shall be increased by not to exceed 50 per cen17 tum with respect to properties located in Alaska, Guam, 

18 Hawaii, and the Virgin Islands. 

19 (c) HIGH-COST AREA LIMIT.—The limitations set 

20 forth under subsection (a) shall also be increased, with 

21 respect to properties of a particular size located in any 

22 area for which 115 percent of the median house price for 

23 such size residence exceeds the limitation under subsection 

24 (a) for such size residence— 


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1 (1) for the first year following the date of en2 actment of this Act, to the lesser of 150 percent of 

3 such limitation for such size residence or the amount 

4 that is equal to 115 percent of the median house 

5 price in such area for such size residence; 

6 (2) for the second year following the date of en7 actment of this Act, to the lesser of 145 percent of 

8 such limitation for such size residence or the amount 

9 that is equal to 115 percent of the median house 

10 price in such area for such size residence; 

11 (3) for the third year following the date of en12 actment of this Act, to the lesser of 135 percent of 

13 such limitation for such size residence or the amount 

14 that is equal to 115 percent of the median house 

15 price in such area for such size residence; 

16 (4) for the fourth year following the date of en17 actment of this Act, to the lesser of 130 percent of 

18 such limitation for such size residence or the amount 

19 that is equal to 115 percent of the median house 

20 price in such area for such size residence; and 

21 (5) for the fifth year following the date of en22 actment of this Act, and each year thereafter, to the 

23 lesser of 125 percent of such limitation for such size 

24 residence or the amount that is equal to 115 percent 


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1 of the median house price in such area for such size 

2 residence. 

3 SEC. 505. PORTFOLIO REDUCTION. 

4 (a) GRADUATED REDUCTION.— 

5 (1) IN GENERAL.—Each enterprise shall not 

6 own, as of any applicable date, mortgage assets in 

7 excess of— 

8 (A) as of December 31, 2013, 

9 $552,500,000,000; and 

10 (B) on December 31 of each year there11 after until the FMIC certification date, 85 per12 cent of the aggregate amount of the mortgage 

13 assets that the enterprise was permitted to own 

14 as of December 31 of the immediately pre15 ceding calendar year. 

16 (2) RETAINED PORTFOLIO TO FACILITATE OR17 DERLY WIND DOWN.—On December 31 of the year 

18 in which the FMIC certification date occurs, the 

19 Corporation shall establish an allowable amount of 

20 enterprise owned mortgage assets in an amount 

21 equal to the amount necessary to facilitate— 

22 (A) the orderly wind down of the enter23 prises; and 

24 (B) appropriate loss mitigation on any leg25 acy guarantees of the enterprises. 


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1 (b) MORTGAGE ASSETS DEFINED.—For purposes of 

2 this section, the term ‘‘mortgage assets’’ means, with re3 spect to an enterprise, assets of such enterprise consisting 

4 of mortgages, mortgage loans, mortgage-related securities, 

5 participation certificates, mortgage-backed commercial 

6 paper, obligations of real estate mortgage investment con7 duits and similar assets, in each case to the extent such 

8 assets would appear on the balance sheet of such enter9 prise in accordance with generally accepted accounting 

10 principles in effect in the United States as of September 

11 7, 2008 (as set forth in the opinions and pronouncements 

12 of the Accounting Principles Board and the American In13 stitute of Certified Public Accountants and statements 

14 and pronouncements of the Financial Accounting Stand15 ards Board from time to time; and without giving any ef16 fect to any change that may be made after September 7, 

17 2008, in respect of Statement of Financial Accounting 

18 Standards No. 140 or any similar accounting standard). 

19 SEC. 506. REPEAL OF MANDATORY HOUSING GOALS. 

20 (a) REPEAL OF HOUSING GOALS.—The Federal 

21 Housing Enterprises Financial Safety and Soundness Act 

22 of 1992 is amended by striking sections 1331 through 

23 1336 (12 U.S.C. 4561–6). 


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1 (b) CONFORMING AMENDMENTS.—The Federal 

2 Housing Enterprises Financial Safety and Soundness Act 

3 of 1992 (12 U.S.C. 4501 et seq.) is amended— 

4 (1) in section 1303(28), by striking ‘‘, and, for 

5 the purposes’’ and all that follows through ‘‘des6 ignated disaster areas’’; 

7 (2) in section 1324(b)(1)(A), by striking clauses 

8 (i), (ii), and (iv); 

9 (3) in section 1341— 

10 (A) in subsection (a)— 

11 (i) in paragraph (1), by inserting ‘‘or’’ 

12 after the semicolon at the end; 

13 (ii) in paragraph (2), by striking the 

14 semicolon at the end and inserting a pe15 riod; and 

16 (iii) by striking paragraphs (3) and 

17 (4); and 

18 (B) in subsection (b)(2)— 

19 (i) in subparagraph (A), by inserting 

20 ‘‘or’’ after the semicolon at the end; 

21 (ii) by striking subparagraphs (B) and 

22 (C); and 

23 (iii) by redesignating subparagraph 

24 (D) as subparagraph (B); 

25 (4) in section 1345(a)— 


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1 (A) in paragraph (1), by inserting ‘‘or’’ 

2 after the semicolon at the end; 

3 (B) in paragraph (2), by striking the semi4 colon at the end and inserting a period; and 

5 (C) by striking paragraphs (3) and (4); 

6 and 

7 (5) in section 1371(a)(2), by striking ‘‘with any 

8 housing goal established under subpart B of part 2 

9 of subtitle A of this title, with section 1336 or 1337 

10 of this title,’’. 

11 TITLE VI—IMPROVEMENTS TO 

12 FUNCTIONING OF HOUSING 

13 MARKET 

14 SEC. 601. CONTINUATION OF MULTIFAMILY BUSINESS OF 

15 THE ENTERPRISES. 

16 (a) IN GENERAL.—Notwithstanding any provision of 

17 title V, or any other provision of law, effective on the 

18 FMIC certification date, all functions, activities, infra19 structure, property, including intellectual property, plat20 forms, or any other object or service of an enterprise relat21 ing to the maintenance and operation of the multifamily 

22 guarantee business of an enterprise shall be transferred, 

23 without cost, to the Corporation. 

24 (b) AUTHORITY OF DIRECTOR.—The Corporation is 

25 authorized, upon such terms and conditions as it may 


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1 deem appropriate, to guarantee the timely payment of 

2 principal of and interest, on any mortgage on multifamily 

3 housing purchased by the Corporation pursuant to the 

4 transfer of an enterprise’s multifamily guarantee business 

5 under subsection (a). 

6 (c) LIMITATION ON ONGOING OPERATION OF MULTI7 FAMILY BUSINESS.—In carrying out the multifamily guar8 antee business of an enterprise transferred pursuant to 

9 subsection (a), the Corporation shall ensure that any such 

10 business continues to operate, as applicable, consistent 

11 with— 

12 (1) the Delegated Underwriting and Servicing 

13 Lender Program established by the Federal National 

14 Mortgage Association; and 

15 (2) the Program Plus Lender Program estab16 lished by the Federal Home Loan Mortgage Cor17 poration, especially the Series K Structured Pass18 Through Certificates offered by the enterprise. 

19 (d) EXPLICIT GUARANTEE.—The full faith and credit 

20 of the United States is pledged to the payment of all 

21 amounts which may be required to be paid under any 

22 guaranty— 

23 (1) issued by the Corporation pursuant to this 

24 subsection; and 


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1 (2) obligation assumed by the Corporation pur2 suant to the transfer of an enterprise’s multifamily 

3 guarantee business under subsection (a). 

4 (e) GUARANTEE FEE.— 

5 (1) IN GENERAL.—The Corporation shall collect 

6 a reasonable fee for any guaranty under this sub7 section and shall make such charges as it may deter8 mine to be reasonable for the analysis of any trust 

9 or other security arrangement proposed by an issuer 

10 of a security backed by multifamily mortgages guar11 anteed under this section. 

12 (2) DEPOSIT INTO MORTGAGE INSURANCE

13 FUND.—Any guarantee fee amounts collected under 

14 this subsection shall be deposited in the Mortgage 

15 Insurance Fund. 

16 SEC. 602. MULTIPLE LENDER ISSUES. 

17 With respect to the dwelling of a borrower that serves 

18 as security for an eligible mortgage, if the borrower enters 

19 into any credit transaction that would result in the cre20 ation of a new mortgage or other lien on such dwelling 

21 where the loan-to-value ratio of such credit transaction 

22 amount is 80 percent or more, the creditor of such new 

23 mortgage or other lien shall seek and obtain the approval 

24 of the creditor of the senior eligible mortgage loan before 

25 any such credit transaction becomes valid and enforceable. 


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1 SEC. 603. GAO REPORT ON FULL PRIVATIZATION OF SEC2 ONDARY MORTGAGE MARKET. 

3 (a) GAO REPORT.—Not later than 8 years after the 

4 date of enactment of this Act, the Comptroller General 

5 of the United States shall submit a report to the Com6 mittee on Banking, Housing, and Urban Affairs of the 

7 Senate and the Committee on Financial Services of the 

8 House of Representatives on the feasibility of maintaining 

9 a fully privatized secondary mortgage market, including 

10 recommendations on how to best carry out any displace11 ment of the insurance model established under this Act. 

12 (b) CORPORATION PLAN TO TRANSITION TO A

13 FULLY PRIVATE SECONDARY MORTGAGE MARKET.— 

14 (1) REQUIRED SUBMISSION TO CONGRESS.— 

15 Not later than 6 months after the date on which the 

16 report required under subsection (a) is submitted, 

17 the Corporation shall submit to the Committee on 

18 Banking, Housing, and Urban Affairs of the Senate 

19 and the Committee on Financial Services of the 

20 House of Representatives a plan to transition to a 

21 fully privatized secondary mortgage market. 

22 (2) REQUIRED CONTENT OF PLAN.—The plan 

23 required to be submitted under paragraph (1) shall 

24 describe, chronicle, and specify all the legislative, ad25 ministrative, and regulatory actions necessary to 

26 carry out a transition to a fully private secondary 


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1 mortgage market, including all actions necessary to 

2 dissolve the Corporation and successfully displace 

3 the insurance model established under this Act. 

4 TITLE VII—GENERAL 

5 PROVISIONS 

6 SEC. 701. AUTHORITY TO ISSUE REGULATIONS. 

7 The Corporation may prescribe such regulations and 

8 issue such guidelines, orders, requirements, or standards 

9 as are necessary to carry out this Act, or any amendment 

10 made by this Act. 

11 SEC. 702. FAIR VALUE ACCOUNTING. 

12 In any evaluation, oversight, audit, or analysis by the 

13 Corporation of the cost of the Mortgage Insurance Fund, 

14 the insurance or guarantee activities of the Corporation 

15 required under this Act, including any fee or charge in 

16 connection with the provision of such insurance or guar17 antee, or the financial transactions of the Corporation, the 

18 Corporation shall conduct any such evaluation, oversight, 

19 audit, or analysis based on the fair-value accrual account20 ing method. 

21 SEC. 703. RULE OF CONSTRUCTION. 

22 Nothing in this Act shall be construed to prohibit or 

23 otherwise restrict the ability of a holder of any loss posi24 tion in any covered security insured under this Act from 

25 restructuring, retranching, or resecuritizing such position. 


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1 SEC. 704. SEVERABILITY. 

2 If any provision of this Act or the application of any 

3 provision of this Act to any person or circumstance, is held 

4 invalid, the application of such provision to other persons 

5 or circumstances, and the remainder of this Act, shall not 

6 be affected thereby. 

7 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

9 ‘‘Housing Finance Reform and Taxpayer Protection Act of 

10 2014’’. 

11 (b) TABLE OF CONTENTS.—The table of contents for 

12 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Definitions. 

TITLE I—ELIMINATION OF FANNIE MAE AND FREDDIE MAC 

Sec. 101. Elimination of Fannie Mae and Freddie Mac. 

TITLE II—FEDERAL MORTGAGE INSURANCE CORPORATION 

Sec. 201. Establishment. 

Sec. 202. Management of Corporation. 

Sec. 203. Advisory Committee. 

Sec. 204. Office of the Inspector General. 

Sec. 205. Staff, experts, and consultants. 

Sec. 206. Reports; testimony; audits. 

Sec. 207. Specific offices. 

Sec. 208. Office of Consumer and Market Access. 

Sec. 209. Office of Multifamily Housing. 

Sec. 210. Equitable access for lenders and borrowers. 

Sec. 211. Office of Taxpayer Protection. 

TITLE III—DUTIES AND RESPONSIBILITIES OF THE FMIC 

Subtitle A—Duties and Authorities 

Sec. 301. Duties and responsibilities. 

Sec. 302. Standards for credit risk-sharing mechanisms. 

Sec. 303. Insurance; Mortgage Insurance Fund. 

Sec. 304. Loan limits; Housing Price Index. 

Sec. 305. Authority to protect taxpayers in unusual and exigent market conditions. 


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Sec. 306. General powers. 

Sec. 307. Exemptions. 

Sec. 308. Regulatory consultation and coordination. 

Sec. 309. Authority to issue regulations. 

Sec. 310. Equivalency in protection of the Mortgage Insurance Fund. 

Subtitle B—Approval and Supervision of Approved Entities for Single-family 

Activities 

Sec. 311. Approval and supervision of guarantors. 

Sec. 312. Approval and supervision of aggregators. 

Sec. 313. Approval of private mortgage insurers. 

Sec. 314. Approval of servicers. 

Sec. 315. Authority to establish and approve small lender mutuals. 

Sec. 316. Supervisory actions related to capital and solvency. 

Sec. 317. Ownership, acquisitions, and operations of covered entities. 

Subtitle C—Securitization Platform and Transparency in Market Operations 

PART I—SECURITIZATION PLATFORM

Sec. 321. Establishment of the Securitization Platform. 

Sec. 322. Management of the Platform. 

Sec. 323. Membership in the Platform. 

Sec. 324. Fees. 

Sec. 325. Purposes and obligations of the Platform. 

Sec. 326. Uniform securitization agreements for covered securities and required 

contractual terms for noncovered securities. 

Sec. 327. Approval and standards for collateral risk managers. 

PART II—TRANSPARENCY IN MARKET OPERATIONS

Sec. 331. Review of loan documents; disclosures. 

Sec. 332. National mortgage database. 

Sec. 333. Working group on electronic registration of mortgage loans. 

Sec. 334. Multiple lender issues. 

Sec. 335. Required harmonization of standards within eligible mortgage criteria. 

TITLE IV—FHFA AND FMIC TRANSITION 

Sec. 401. Definitions. 

Sec. 402. FHFA transition. 

Sec. 403. Transfer and rights of employees of the FHFA. 

Sec. 404. Transition Committee. 

Sec. 405. Transition assessments. 

Sec. 406. Transfer of powers and duties on the system certification date; continuation and coordination of certain actions. 

Sec. 407. Technical and conforming amendments relating to abolishment of 

FHFA. 

Sec. 408. Repeal of mandatory housing goals. 

TITLE V—IMPROVING TRANSPARENCY, ACCOUNTABILITY, AND 

EFFICACY WITHIN AFFORDABLE HOUSING 

Sec. 501. Affordable housing allocations. 

Sec. 502. Housing Trust Fund. 

Sec. 503. Capital Magnet Fund. 

Sec. 504. Market Access Fund. 


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Sec. 505. Additional taxpayer protections. 

Sec. 506. Promoting affordable housing investment. 

TITLE VI—TRANSITION AND TERMINATION OF FANNIE MAE AND 

FREDDIE MAC 

Sec. 601. Minimum housing finance system criteria to be met prior to system certification date. 

Sec. 602. Transition of the housing finance system. 

Sec. 603. Resolution authority; technical amendments. 

Sec. 604. Wind down. 

Sec. 605. Portfolio reduction. 

Sec. 606. Oversight of transition of the housing finance system. 

Sec. 607. Authority to establish provisional standards. 

Sec. 608. Initial fund level for the Mortgage Insurance Fund. 

Sec. 609. GAO report on full privatization of secondary mortgage market. 

TITLE VII—MULTIFAMILY 

Sec. 701. Establishment of multifamily subsidiaries. 

Sec. 702. Disposition of multifamily businesses. 

Sec. 703. Approval and supervision of multifamily guarantors. 

Sec. 704. Multifamily housing requirement. 

Sec. 705. Establishment of small multifamily property program. 

Sec. 706. Multifamily housing study. 

Sec. 707. Multifamily platform study. 

Sec. 708. Short-term residential housing. 

TITLE VIII—GENERAL PROVISIONS 

Sec. 801. Rule of construction. 

Sec. 802. Severability. 

Sec. 803. Transfer notification under TILA. 

Sec. 804. Investment authority to support rural infrastructure. 

Sec. 805. Consolidation of similar housing assistance programs. 

Sec. 806. Bureau of Consumer Financial Protection review; GAO report. 

Sec. 807. Determination of budgetary effects. 

1 SEC. 2. DEFINITIONS. 

2 As used in this Act, the following definitions shall 

3 apply: 

4 (1) AFFILIATE.—The term ‘‘affiliate’’ means any 

5 person that controls, is controlled by, or is under com6 mon control with another person. 

7 (2) AFFORDABLE RENTAL HOUSING.—The term 

8 ‘‘affordable rental housing’’ means a rental housing 

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1 , very low-, low-, and moderate-income families if the 

2 rent charged, including utilities or a utility allow3 ance, does not exceed 30 percent of the respective in4 come limit in that market area for extremely low-, 

5 very low-, low-, or moderate-income families, respec6 tively, of the size appropriate for the number of bed7 rooms in the unit, as established by the Secretary of 

8 Housing and Urban Development. 

9 (3) AGENCY TRANSFER DATE.—The term ‘‘agen10 cy transfer date’’ means the date that is 6 months 

11 after the date of enactment of this Act. 

12 (4) APPROPRIATE FEDERAL BANKING AGENCY.— 

13 The term ‘‘appropriate Federal banking agency’’ has 

14 the same meaning as in section 3(q) of the Federal 

15 Deposit Insurance Act (12 U.S.C. 1813(q)), and in16 cludes the National Credit Union Administration in 

17 the case of any credit union. 

18 (5) APPROVED AGGREGATOR.—The term ‘‘ap19 proved aggregator’’ means an entity that is approved 

20 by the Corporation pursuant to section 312. 

21 (6) APPROVED ENTITY.—The term ‘‘approved en22 tity’’ means— 

23 (A) an approved guarantor; 

24 (B) an approved multifamily guarantor; 

25 (C) an approved aggregator; 


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1 (D) an approved private mortgage insurer; 

2 and 

3 (E) an approved servicer. 

4 (7) APPROVED GUARANTOR.—The term ‘‘ap5 proved guarantor’’ means an entity that is approved 

6 by the Corporation pursuant to section 311. 

7 (8) APPROVED MULTIFAMILY GUARANTOR.—The 

8 term ‘‘approved multifamily guarantor’’ means an 

9 entity that is approved by the Corporation pursuant 

10 to section 703. 

11 (9) APPROVED PRIVATE MORTGAGE INSURER.— 

12 The term ‘‘approved private mortgage insurer’’ means 

13 an entity that is approved by the Corporation pursu14 ant to section 313. 

15 (10) APPROVED SERVICER.—The term ‘‘approved 

16 servicer’’ means an entity that is approved by the 

17 Corporation pursuant to section 314. 

18 (11) AREA.—The term ‘‘area’’ means a metro19 politan statistical area, a micropolitan statistical 

20 area, and a noncore area, as such areas may be estab21 lished by the Office of Management and Budget. 

22 (12) BOARD; BOARD OF DIRECTORS.—The terms 

23 ‘‘Board’’ and ‘‘Board of Directors’’ mean the Board 

24 of Directors of the Federal Mortgage Insurance Cor25 poration, unless the context otherwise requires. 


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

2 means the Chairperson of Board of Directors of the 

3 Federal Mortgage Insurance Corporation, unless the 

4 context otherwise requires. 

5 (14) CHARTER.—The term ‘‘charter’’ means— 

6 (A) with respect to the Federal National 

7 Mortgage Association, the Federal National 

8 Mortgage Association Charter Act (12 U.S.C. 

9 1716 et seq.); and 

10 (B) with respect to the Federal Home Loan 

11 Mortgage Corporation, the Federal Home Loan 

12 Mortgage Corporation Act (12 U.S.C. 1451 et 

13 seq.). 

14 (15) COMMUNITY DEVELOPMENT FINANCIAL IN15 STITUTION.—The term ‘‘Community Development Fi16 nancial Institution’’ has the same meaning as in sec17 tion 103 of the Riegle Community Development and 

18 Regulatory Improvement Act of 1994 (12 U.S.C. 

19 4702). 

20 (16) COMMUNITY LAND TRUST.—The term ‘‘com21 munity land trust’’ means a nonprofit organization 

22 or State or local government that owns real property 

23 and leases the land through homeownership programs 

24 that— 

25 (A) use a ground lease to— 


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1 (i) make real property affordable to 

2 low- or moderate-income borrowers; and 

3 (ii) stipulate a preemptive option to 

4 purchase the real property from the home 

5 owner at resale so that the affordability of 

6 the real property is preserved for successive 

7 low- and moderate-income borrowers; 

8 (B) monitor properties to ensure afford9 ability is preserved over resales; and 

10 (C) support homeowners to promote success11 ful homeownership and prevent foreclosure. 

12 (17) CORPORATION.—The term ‘‘Corporation’’ 

13 means the Federal Mortgage Insurance Corporation 

14 established under title II. 

15 (18) COVERED ENTITY.—The term ‘‘covered enti16 ty’’ means— 

17 (A) an approved guarantor; 

18 (B) an approved multifamily guarantor; 

19 and 

20 (C) an approved aggregator that is neither 

21 an insured depository institution nor an affiliate 

22 of an insured depository institution. 

23 (19) COVERED GUARANTEE TRANSACTION.— 

24 (A) DEFINITION.—The term ‘‘covered guar25 antee transaction’’ means a transaction, as that 


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1 term shall be defined by the Corporation by regu2 lation, involving the agreement to guarantee— 

3 (i) any eligible mortgage loan; 

4 (ii) any pool of such eligible mortgage 

5 loans; or 

6 (iii) the payment of principal and in7 terest on covered securities collateralized by 

8 eligible mortgage loans before payments in9 sured by the Corporation are made. 

10 (B) RULES OF CONSTRUCTION.—A covered 

11 guarantee transaction— 

12 (i) shall not be construed to be— 

13 (I) a contract for sale of a com14 modity for future delivery or a swap 

15 under the Commodity Exchange Act; 

16 or 

17 (II) a contract of insurance or re18 insurance under any Federal or State 

19 law regulating the sale, underwriting, 

20 provision, or brokerage of insurance; 

21 (ii) shall not be subject to any require22 ment of the Commodity Exchange Act; and 

23 (iii) shall not be subject to any require24 ment imposed under State law pertaining 


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1 to the sale, underwriting, provision, or bro2 kerage of insurance or reinsurance. 

3 (20) COVERED MARKET-BASED RISK-SHARING

4 TRANSACTION.— 

5 (A) DEFINITION.—The term ‘‘covered mar6 ket-based risk-sharing transaction’’ means any 

7 private market transaction, as that term shall be 

8 defined by the Corporation by regulation, involv9 ing a covered security issued subject to a stand10 ard risk-sharing mechanism, product, contract, 

11 or other security agreement approved by the Cor12 poration under section 302. 

13 (B) RULES OF CONSTRUCTION.—A covered 

14 market-based risk-sharing transaction— 

15 (i) shall not be construed to be a con16 tract of insurance or reinsurance under any 

17 Federal or State law regulating the sale, 

18 underwriting, provision, or brokerage of in19 surance; and 

20 (ii) shall not be subject to any require21 ment imposed under State law pertaining 

22 to the sale, underwriting, provision, or bro23 kerage of insurance or reinsurance. 

24 (21) COVERED SECURITY.—The term ‘‘covered se25 curity’’ means— 


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1 (A) a single-family covered security; and 

2 (B) a multifamily covered security. 

3 (22) CREDIT RISK-SHARING MECHANISM.—The 

4 term ‘‘credit risk-sharing mechanism’’ means any 

5 mechanism, product, structure, contract, or security 

6 agreement by which a private market holder assumes 

7 the first loss position, or any part of such position, 

8 associated with the pool of eligible mortgage loans 

9 collateralizing a covered security, or by which an ap10 proved guarantor or approved multifamily guarantor 

11 manages the credit risk related to guarantees provided 

12 for covered securities. 

13 (23) CSP.—The term ‘‘CSP’’ means the 

14 securitization infrastructure announced by the Fed15 eral Housing Finance Agency on October 4, 2012, 

16 and developed by the enterprises while under con17 servatorship, under the authority of the Federal Hous18 ing Finance Agency pursuant to the Safety and 

19 Soundness Act, and commonly referred to as the 

20 ‘‘common securitization platform’’. 

21 (24) DAYS.—The term ‘‘days’’ means— 

22 (A) with respect to any period of time less 

23 than or equal to 10 days, business days; and 

24 (B) with respect to any period of time 

25 greater than 10 days, calendar days. 


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1 (25) DEPOSITORY INSTITUTION HOLDING COM2 PANY.—The term ‘‘depository institution holding com3 pany’’ has the same meaning as section 3(w)(1) of the 

4 Federal Deposit Insurance Act (12 U.S.C. 

5 1813(w)(1)). 

6 (26) ELIGIBLE BORROWER.—The term ‘‘eligible 

7 borrower’’ means a borrower who— 

8 (A) applies for an eligible mortgage loan; 

9 and 

10 (B) meets the standards required of a bor11 rower to be approved for an eligible mortgage 

12 loan. 

13 (27) ELIGIBLE MORTGAGE LOAN.—The term ‘‘eli14 gible mortgage loan’’ means— 

15 (A) an eligible single-family mortgage loan; 

16 and 

17 (B) an eligible multifamily mortgage loan. 

18 (28) ELIGIBLE MULTIFAMILY MORTGAGE LOAN.— 

19 The term ‘‘eligible multifamily mortgage loan’’ means 

20 a commercial real estate loan— 

21 (A) secured by a property with— 

22 (i) 5 or more residential units; or 

23 (ii) 2 or more residential units, if the 

24 requirement under clause (i) is waived by 


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1 the Corporation for purposes of carrying 

2 out a demonstration or pilot program; 

3 (B) the primary source of repayment for 

4 which is expected to be derived from rental in5 come generated by the property; 

6 (C) the term of which may not be less than 

7 5 years but not more than 40 years, except that 

8 the term may be less than 5 years subject to 

9 standards set by the Corporation; 

10 (D) that satisfies any additional under11 writing criteria established by the Corporation to 

12 balance supporting access to capital with man13 aging credit risk to the Mortgage Insurance 

14 Fund, including— 

15 (i) a maximum loan-to-value ratio; 

16 (ii) a minimum debt service coverage 

17 ratio; and 

18 (iii) considerations for restrictive or 

19 special uses of a property, including non20 residential uses, properties for seniors, man21 ufactured housing, and affordability restric22 tions, and the impact of such uses on 

23 clauses (i) and (ii); and 


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1 (E) that satisfies any additional under2 writing criteria that may be established by the 

3 Corporation. 

4 (29) ELIGIBLE SINGLE-FAMILY MORTGAGE

5 LOAN.—The term ‘‘eligible single-family mortgage 

6 loan’’ means— 

7 (A) a loan that— 

8 (i) has been originated in compliance 

9 with minimum standards issued by the Cor10 poration by regulation, provided that such 

11 standards— 

12 (I) are uniform and equal in 

13 kind, nature, and application regard14 less of— 

15 (aa) the originator of the 

16 mortgage loan; or 

17 (bb) the role performed by an 

18 approved entity with respect to 

19 the mortgage loan; 

20 (II) are, to the greatest extent pos21 sible, substantially similar to the regu22 lations issued by the Bureau of Con23 sumer Financial Protection under sec24 tion 129C(b) of the Truth in Lending 

25 Act (15 U.S.C. 1639c); and 


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1 (III) permit— 

2 (aa) residential real estate 

3 loans secured by a property with 

4 1 to 4 single-family units, includ5 ing units that are not owner-occu6 pied; 

7 (bb) loans secured by manu8 factured homes, as defined in sec9 tion 603(6) of the National Manu10 factured Housing Construction 

11 and Safety Standards Act of 1974 

12 (42 U.S.C. 5402(6)); 

13 (cc) residential real estate 

14 loans secured by a property with 

15 1 to 4 single-family units that are 

16 originated by a State housing fi17 nance agency, as defined in sec18 tion 106 of the Housing and 

19 Urban Development Act of 1968 

20 (12 U.S.C. 1701x); 

21 (dd) loans originated by a 

22 Community Development Finan23 cial Institution; 

24 (ee) loans originated by a 

25 mission-based nonprofit lender; 


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1 (ff) loans secured by real 

2 property in a permanently afford3 able homeownership program or 

4 community land trust; and 

5 (gg) loans to entities that 

6 provide non-owner occupied rental 

7 housing with care providers for 

8 individuals with intellectual and 

9 developmental disabilities; 

10 (ii) has a maximum original principal 

11 obligation amount that does not exceed the 

12 applicable loan limitation established under 

13 section 304; 

14 (iii) has an outstanding principal bal15 ance at the time of purchase of insurance 

16 available under title II that does not exceed 

17 80 percent of the value of the property se18 curing the loan, unless— 

19 (I) for such period and under 

20 such circumstances as the Corporation 

21 may require, the seller agrees to repur22 chase or replace the loan upon demand 

23 of the Corporation in the event the 

24 loan is in default; 


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1 (II) an approved private mort2 gage insurer guarantees or insures— 

3 (aa) not less than 12 percent 

4 of the unpaid principal balance of 

5 the loan, accounting for any down 

6 payment required under clause 

7 (iv), for loans in which the un8 paid principal balance exceeds 80 

9 percent but not more than 85 per10 cent of the value of the property 

11 securing the loan; 

12 (bb) not less than 25 percent 

13 of the unpaid principal balance of 

14 the loan, accounting for any down 

15 payment required under clause 

16 (iv), for loans in which the un17 paid principal balance exceeds 85 

18 percent but not more than 90 per19 cent of the value of the property 

20 securing the loan; 

21 (cc) not less than 30 percent 

22 of the unpaid principal balance of 

23 the loan, accounting for any down 

24 payment required under clause 

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1 paid principal balance exceeds 90 

2 percent but not more than 95 per3 cent of the value of the property 

4 securing the loan; and 

5 (dd) not less than 35 percent 

6 of the unpaid principal balance of 

7 the loan, accounting for any down 

8 payment required under clause 

9 (iv), for loans in which the un10 paid principal balance exceeds 95 

11 percent of the value of the prop12 erty securing the loan; or 

13 (III) that portion of the unpaid 

14 principal balance of the loan which ex15 ceeds 80 percent of the value of the 

16 property securing the loan is subject to 

17 other credit enhancement that— 

18 (aa) meets standards com19 parable to the standards required 

20 of private mortgage insurers 

21 under subclause (II); and 

22 (bb) is approved by the Cor23 poration; 

24 (iv) has a down payment that is— 


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1 (I) for a first-time homebuyer, as 

2 that term shall be defined by the Cor3 poration by regulation, equal to not 

4 less than 3.5 percent of the purchase 

5 price of the property securing the loan; 

6 or 

7 (II) for non first-time home8 buyers, equal to— 

9 (aa) not less than 3.5 percent 

10 of the purchase price of the prop11 erty securing the loan, if such 

12 purchase occurs prior to the sys13 tem certification date or less than 

14 1 year after the system certifi15 cation date; 

16 (bb) not less than 4 percent 

17 of the purchase price of the prop18 erty securing the loan, if such 

19 purchase occurs during the period 

20 that begins 1 year after the system 

21 certification date and ends less 

22 than 2 years after the system cer23 tification date; 

24 (cc) not less than 4.5 percent 

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1 erty securing the loan, if such 

2 purchase occurs during the period 

3 that begins 2 years after the sys4 tem certification date and ends 

5 less than 3 years after the system 

6 certification date; or 

7 (dd) not less than 5 percent 

8 of the purchase price of the prop9 erty securing the loan, if such 

10 purchase occurs during any pe11 riod after the period set forth in 

12 item (cc); 

13 (v) satisfies standards related to estab14 lishing title or marketability of title, as 

15 may be required by the Corporation, which 

16 standards may include the required pur17 chase of title insurance on the property se18 curing the loan; 

19 (vi) contains such terms and provi20 sions with respect to insurance, property 

21 maintenance, repairs, alterations, payment 

22 of taxes, default, reserves, delinquency 

23 charges, foreclosure proceedings, anticipa24 tion of maturity, additional and secondary 

25 liens, and other matters, including matters 


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1 that set forth terms and provisions for es2 tablishing escrow accounts, performing fi3 nancial assessments, or limiting the amount 

4 of any payment made available under the 

5 loan as the Corporation may prescribe; and 

6 (vii) contains such other terms, charac7 teristics, or underwriting criteria as the 

8 Corporation, in consultation with the Bu9 reau of Consumer Financial Protection, 

10 may determine necessary or appropriate; or 

11 (B) a loan refinanced pursuant to the au12 thority granted under section 305(i). 

13 (30) ENTERPRISE.—The term ‘‘enterprise’’ 

14 means— 

15 (A) the Federal National Mortgage Associa16 tion and any affiliate thereof; and 

17 (B) the Federal Home Loan Mortgage Cor18 poration and any affiliate thereof. 

19 (31) EXTREMELY LOW-INCOME.—The term ‘‘ex20 tremely low-income’’ means— 

21 (A) in the case of owner-occupied units, in22 come not in excess of 30 percent of the median 

23 income of the area; and 

24 (B) in the case of rental units, income not 

25 in excess of 30 percent of the median income of 


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1 the area, with adjustments for smaller and larger 

2 families, as determined by the Secretary of 

3 Housing and Urban Development. 

4 (32) FEDERAL HOME LOAN BANK.—The term 

5 ‘‘Federal Home Loan Bank’’ means a bank estab6 lished under the authority of the Federal Home Loan 

7 Bank Act (12 U.S.C. 1421 et seq.). 

8 (33) FEDERAL HOME LOAN BANK SYSTEM.—The 

9 term ‘‘Federal Home Loan Bank System’’ means the 

10 Federal Home Loan Banks and the Office of Finance 

11 and any authorized subsidiary of one or more Federal 

12 Home Loan Banks. 

13 (34) FHFA RELATED TERMS.— 

14 (A) FEDERAL HOUSING FINANCE AGENCY.— 

15 The term ‘‘Federal Housing Finance Agency’’ 

16 shall mean— 

17 (i) prior to the agency transfer date, 

18 the Federal Housing Finance Agency estab19 lished under section 1311 of the Safety and 

20 Soundness Act (12 U.S.C. 4511); 

21 (ii) on and after the agency transfer 

22 date but prior to the system certification 

23 date, the Federal Housing Finance Agency 

24 established within the Corporation under 

25 title IV; and 


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1 (iii) on and after the system certifi2 cation date, the Corporation. 

3 (B) FHFA DIRECTOR.—The term ‘‘FHFA 

4 Director’’ has the same meaning as the term 

5 ‘‘Director’’ in section 401(1). 

6 (35) FEDERAL REGULATORY AGENCIES.—The 

7 term— 

8 (A) ‘‘Federal regulatory agency’’ means, in9 dividually, the Board of Governors of the Federal 

10 Reserve System, the Office of the Comptroller of 

11 the Currency, the Federal Deposit Insurance 

12 Corporation, the Bureau of Consumer Financial 

13 Protection, the National Credit Union Adminis14 tration, the Securities and Exchange Commis15 sion, the Commodity Futures Trading Commis16 sion, and the Federal Housing Finance Agency; 

17 and 

18 (B) ‘‘Federal regulatory agencies’’ means all 

19 of the agencies referred to in subparagraph (A), 

20 collectively. 

21 (36) FIRST LOSS POSITION.—The term ‘‘first loss 

22 position’’ means, with regard to a covered security— 

23 (A) either— 

24 (i) the fully-funded position to which 

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1 sulting from the nonperformance of under2 lying mortgage loans will accrue and be ab3 sorbed, to the full extent of the holder’s in4 terest in such position; or 

5 (ii) the guarantee provided by an ap6 proved guarantor or approved multifamily 

7 guarantor with respect to an eligible single8 family mortgage loan, pool of eligible single9 family mortgage loans, or a single-family 

10 covered security or eligible multifamily 

11 mortgage loan, pool of eligible multifamily 

12 mortgage loans, or a multifamily covered 

13 security, as applicable; and 

14 (B) the position or guarantee described 

15 under subparagraph (A), as applicable, which is 

16 required to absorb any initial credit loss on a 

17 covered security prior to the Corporation becom18 ing obligated to make any payment of insurance 

19 in accordance with this Act. 

20 (37) HUD-APPROVED HOUSING COUNSELING

21 AGENCY.—The term ‘‘HUD-approved housing coun22 seling agency’’ means an agency certified by the Sec23 retary of Housing and Urban Development under sec24 tion 106(e) of the Housing and Urban Development 

25 Act of 1968 (12 U.S.C. 1701x(e)). 


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1 (38) INSURED DEPOSITORY INSTITUTION.—The 

2 term ‘‘insured depository institution’’ means— 

3 (A) an insured depository institution, as 

4 defined under section 3 of the Federal Deposit 

5 Insurance Act (12 U.S.C. 1813); and 

6 (B) an insured credit union, as defined 

7 under section 101 of the Federal Credit Union 

8 Act (12 U.S.C. 1752). 

9 (39) ISSUER.—For a noncovered security, the 

10 term ‘‘issuer’’ shall have the same meaning as under 

11 the Securities Act of 1933 (15 U.S.C. 77b) and the 

12 rules and regulations promulgated thereunder. The 

13 Platform shall not be deemed to be an issuer of non14 covered securities for purposes of the Securities Act of 

15 1933. 

16 (40) LOW-INCOME.—The term ‘‘low-income’’ 

17 means— 

18 (A) in the case of owner-occupied units, in19 come not in excess of 80 percent of median in20 come of the area; and 

21 (B) in the case of rental units, income not 

22 in excess of 80 percent of median income of the 

23 area, with adjustments for smaller and larger 

24 families, as determined by the Secretary of 

25 Housing and Urban Development. 


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1 (41) MARKET PARTICIPANT.—The term ‘‘market 

2 participant’’ means any— 

3 (A) approved entity; 

4 (B) private market holder; and 

5 (C) member of the Securitization Platform. 

6 (42) MEDIAN INCOME.—The term ‘‘median in7 come’’ means, with respect to an area, the unadjusted 

8 median family income for the area, as determined 

9 and published annually by the Secretary of Housing 

10 and Urban Development. 

11 (43) MISSION-BASED NONPROFIT LENDER.—The 

12 term ‘‘mission-based nonprofit lender’’ means an or13 ganization that— 

14 (A) is exempt from taxation pursuant to 

15 section 501(c)(3) of the Internal Revenue Code of 

16 1986; 

17 (B) makes— 

18 (i) residential real estate loans for the 

19 purpose of promoting or facilitating home20 ownership for poor or low- or moderate-in21 come, disabled, or other disadvantaged per22 sons or families; or 

23 (ii) real estate loans for the purpose of 

24 promoting or facilitating affordable rental 

25 housing for low-income persons or families 


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1 and subject to any other additional criteria 

2 established by the Corporation; 

3 (C) sets interest rates on such loans that— 

4 (i) are lower than the bank prime loan 

5 rate, as determined under the Federal Re6 serve Statistical Release of selected interest 

7 rates (commonly referred to as the ‘‘H.15’’) 

8 by the Board of Governors of the Federal 

9 Reserve System, for the last day of the most 

10 recent weekly release of such rates; or 

11 (ii) are, after adjusting for inflation, 

12 no-interest loans or loans with interest rates 

13 at or below the interest rates for mortgage 

14 loans generally available in the market; 

15 (D) except as described under subparagraph 

16 (B), does not engage in the business of a mort17 gage originator or mortgage broker; 

18 (E) conducts its activities in a manner that 

19 serves public or charitable purposes; 

20 (F) receives funding and revenue and 

21 charges fees in a manner that does not 

22 incentivize the organization or its employees to 

23 act other than in the best interests of its clients; 


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1 (G) compensates employees in a manner 

2 that does not incentivize employees to act other 

3 than in the best interests of its clients; and 

4 (H) meets such other requirements as the 

5 Corporation determines appropriate. 

6 (44) MODERATE-INCOME.—The term ‘‘moderate7 income’’ means 

8 (A) in the case of owner-occupied units, in9 come not in excess of median income of the area; 

10 and 

11 (B) in the case of rental units, income not 

12 in excess of median income of the area, with ad13 justments for smaller and larger families, as de14 termined by the Secretary of Housing and 

15 Urban Development. 

16 (45) MORTGAGE AGGREGATOR.—The term 

17 ‘‘mortgage aggregator’’ means a person that— 

18 (A) arranges, in connection with a single19 family covered security, a credit-risk sharing 

20 mechanism that is approved by the Corporation 

21 pursuant to section 302; 

22 (B) issues such single-family covered secu23 rity through the Securitization Platform; 

24 (C) does not originate eligible single-family 

25 mortgage loans; and 


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1 (D) is not affiliated with a person that ac2 tively engages in the business of originating eli3 gible single-family mortgage loans. 

4 (46) MORTGAGE-BACKED SECURITY.—The term 

5 ‘‘mortgage-backed security’’ means an asset-backed se6 curity, as defined in section 3(a) of the Securities Ex7 change Act of 1934 (15 U.S.C. 78c(a)), that is 

8 collateralized by— 

9 (A) a mortgage loan, including any residen10 tial real estate loan or commercial real estate 

11 loan; or 

12 (B) a collateralized mortgage obligation of 

13 mortgage-backed securities. 

14 (47) MORTGAGE ORIGINATOR.—The term ‘‘mort15 gage originator’’ has the same meaning as in section 

16 103(cc)(2) of the Truth in Lending Act (15 U.S.C. 

17 1602(cc)(2)). 

18 (48) MULTIFAMILY BUSINESS.—The term ‘‘mul19 tifamily business’’ means the activities and processes 

20 of the enterprises of— 

21 (A) purchasing, selling, lending on the secu22 rity of, or otherwise dealing in multifamily 

23 mortgage loans; 

24 (B) securitizing a pool of multifamily mort25 gage loans; and 


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1 (C) issuing multifamily securities. 

2 (49) MULTIFAMILY COVERED SECURITY.—The 

3 term ‘‘multifamily covered security’’ means a multi4 family mortgage-backed security— 

5 (A) collateralized by eligible multifamily 

6 mortgage loans; and 

7 (B) that is insured by the Corporation pur8 suant to section 303. 

9 (50) MULTIFAMILY MORTGAGE-BACKED SECU10 RITY.—The term ‘‘multifamily mortgage-backed secu11 rity’’ means a mortgage-backed security collateralized 

12 by commercial real estate loans secured by properties 

13 with 5 or more residential units in accordance with 

14 the requirements of this Act. 

15 (51) NONCOVERED SECURITY.—The term ‘‘non16 covered security’’ means any mortgage-backed security 

17 other than a covered security. 

18 (52) NONELIGIBLE MORTGAGE LOAN.—The term 

19 ‘‘noneligible mortgage loan’’ means any mortgage 

20 loan other than an eligible mortgage loan. 

21 (53) OFFICE OF FINANCE.—The term ‘‘Office of 

22 Finance’’ means the Office of Finance in the Federal 

23 Home Loan Bank System. 

24 (54) PERMANENTLY AFFORDABLE HOMEOWNER25 SHIP PROGRAM.—The term ‘‘permanently affordable 


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1 homeownership program’’ includes programs admin2 istered by community land trusts, nonprofit organiza3 tions, or State or local governments that— 

4 (A) use a ground lease, deed restriction, 

5 subordinate loan, or similar legal mechanism 

6 to— 

7 (i) make real property affordable to 

8 low- or moderate-income borrowers; and 

9 (ii) stipulate a preemptive option to 

10 purchase the real property from the home11 owner at resale to preserve the affordability 

12 of the real property for successive low- and 

13 moderate-income borrowers; 

14 (B) monitor properties to ensure afford15 ability is preserved over resales; and 

16 (C) support homeowners to promote success17 ful homeownership and prevent foreclosure. 

18 (55) PERSON.—The term ‘‘person’’ means an in19 dividual, corporation, company (including a limited 

20 liability company or joint stock company), associa21 tion (incorporated or unincorporated), mutual or co22 operative organization, partnership, trust, estate, so23 ciety, or any other legal entity. 

24 (56) PLATFORM; SECURITIZATION PLATFORM.— 

25 The terms ‘‘Platform’’ and ‘‘Securitization Platform’’ 


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1 mean the securitization infrastructure established 

2 under part I of subtitle C of title III. 

3 (57) PLATFORM DIRECTORS.—The term ‘‘Plat4 form Directors’’ means the board of directors of the 

5 Securitization Platform. 

6 (58) PLATFORM SECURITY.—The term ‘‘Platform 

7 security’’ means a mortgage-backed security issued 

8 through the Securitization Platform. 

9 (59) PRIVATE LABEL MORTGAGE-BACKED SECU10 RITIES MARKET.—The term ‘‘private label mortgage11 backed securities market’’ means the market in which 

12 noncovered securities are issued, bought, and sold. 

13 (60) PRIVATE MARKET HOLDER.—The term 

14 ‘‘private market holder’’ means the holder or holders, 

15 other than an approved guarantor or an approved 

16 multifamily guarantor, of the first loss position with 

17 respect to eligible mortgage loans collateralizing any 

18 covered security insured in accordance with this Act. 

19 (61) REGULATED ENTITY.—The term ‘‘regulated 

20 entity’’ means— 

21 (A) the Federal National Mortgage Associa22 tion and any affiliate thereof; 

23 (B) the Federal Home Loan Mortgage Cor24 poration and any affiliate thereof; 

25 (C) any Federal Home Loan Bank; and 


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1 (D) the Securitization Platform. 

2 (62) RESIDENTIAL REAL ESTATE LOAN.—The 

3 term ‘‘residential real estate loan’’ includes any— 

4 (A) real estate mortgage loan; 

5 (B) personal property loan secured solely by 

6 the home itself; 

7 (C) hybrid land-home loan for a manufac8 tured home, as defined in section 603(6) of the 

9 National Manufactured Housing Construction 

10 and Safety Standards Act of 1974 (42 U.S.C. 

11 5402(6)), to which the requirements of para12 graph (29)(A)(v) shall not apply; and 

13 (D) mortgage loan secured by real property 

14 in a community land trust or permanently af15 fordable homeownership program. 

16 (63) SAFETY AND SOUNDNESS ACT.—The term 

17 ‘‘Safety and Soundness Act’’ means the Federal Hous18 ing Enterprises Financial Safety and Soundness Act 

19 of 1992 (12 U.S.C. 4501 et seq.). 

20 (64) SENIOR PREFERRED STOCK PURCHASE

21 AGREEMENT.—The term ‘‘Senior Preferred Stock Pur22 chase Agreement’’ means— 

23 (A) the Amended and Restated Senior Pre24 ferred Stock Purchase Agreement, dated Sep25 tember 26, 2008, as such Agreement has been 


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1 amended on May 6, 2009, December 24, 2009, 

2 and August 17, 2012, respectively, and as such 

3 Agreement may be further amended and restated, 

4 entered into between the Department of the 

5 Treasury and each enterprise, as applicable; and 

6 (B) any provision of any certificate in con7 nection with such Agreement creating or desig8 nating the terms, powers, preferences, privileges, 

9 limitations, or any other conditions of the Vari10 able Liquidation Preference Senior Preferred 

11 Stock of an enterprise issued or sold pursuant to 

12 such Agreement. 

13 (65) SINGLE-FAMILY ACTIVITIES.—The term 

14 ‘‘single-family activities’’ means the activities and 

15 processes of the Corporation in providing insurance 

16 for single-family covered securities as provided in this 

17 Act. 

18 (66) SINGLE-FAMILY COVERED SECURITY.—The 

19 term ‘‘single-family covered security’’ means a single20 family mortgage-backed security— 

21 (A) collateralized by eligible single-family 

22 mortgage loans; and 

23 (B) that is insured by the Corporation pur24 suant to section 303. 


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1 (67) SMALL MORTGAGE LENDER.—The term 

2 ‘‘small mortgage lender’’ means a community bank, 

3 credit union, mid-sized bank, non-depository institu4 tion, Community Development Financial Institution, 

5 mission-based nonprofit lender, or housing finance 

6 agency that originates residential real estate loans or 

7 commercial real estate loans. 

8 (68) STANDARDIZED COVERED SECURITY; STAND9 ARDIZED SECURITY FOR SINGLE-FAMILY COVERED SE10 CURITIES.—The terms ‘‘standardized covered secu11 rity’’ and ‘‘standardized single-family covered secu12 rity’’ mean a single-family covered security that is— 

13 (A) issued through the Platform; and 

14 (B) in a form, and includes the standard15 ized and uniform terms for the security and 

16 transaction that have been, developed by the 

17 Platform Directors and approved by the Cor18 poration for use across various issuances. 

19 (69) STANDARDIZED NONCOVERED SECURITY; 

20 STANDARDIZED SECURITY FOR SINGLE-FAMILY NON21 COVERED SECURITIES.—The terms ‘‘standardized 

22 noncovered security’’ and ‘‘standardized single-family 

23 noncovered security’’ mean a single-family noncovered 

24 security that is— 

25 (A) issued through the Platform; and 


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1 (B) in a form, and includes the standard2 ized and uniform terms for the security and 

3 transaction that have been, developed by the 

4 Platform Directors for use across various 

5 issuances. 

6 (70) STATE.—The term ‘‘State’’ means any 

7 State, territory, or possession of the United States, the 

8 District of Columbia, the Commonwealth of Puerto 

9 Rico, the Commonwealth of the Northern Mariana Is10 lands, Guam, American Samoa, or the United States 

11 Virgin Islands or any Federally recognized Indian 

12 tribe, as defined by the Secretary of the Interior 

13 under section 104(a) of the Federally Recognized In14 dian Tribe List Act of 1994 (25 U.S.C. 479a–1(a)). 

15 (71) SYSTEM CERTIFICATION DATE.—The term 

16 ‘‘system certification date’’ means the date on which 

17 the Board of Directors certifies that the requirements 

18 of section 601 have been met. 

19 (72) VERY LOW-INCOME.— 

20 (A) IN GENERAL.—The term ‘‘very low-in21 come’’ means— 

22 (i) in the case of owner-occupied units, 

23 families having incomes not greater than 50 

24 percent of the median income of the area; 

25 and 


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1 (ii) in the case of rental units, families 

2 having incomes not greater than 50 percent 

3 of the median income of the area, with ad4 justments for smaller and larger families, as 

5 determined by the Secretary of Housing and 

6 Urban Development. 

7 (B) RULE OF CONSTRUCTION.—For pur8 poses of the Housing Trust Fund established 

9 under section 1338 of the Safety and Soundness 

10 Act (12 U.S.C. 4568), the Capital Magnet Fund 

11 established under section 1339 of the Safety and 

12 Soundness Act (12 U.S.C. 4569), and the Market 

13 Access Fund established under section 504, the 

14 term ‘‘very low-income’’ means— 

15 (i) in the case of owner-occupied units, 

16 income in excess of 30 percent but not 

17 greater than 50 percent of the median in18 come of the area; and 

19 (ii) in the case of rental units, income 

20 in excess of 30 percent but not greater than 

21 50 percent of the median income of the 

22 area, with adjustments for smaller and 

23 larger families, as determined by the Sec24 retary of Housing and Urban Development. 


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1 TITLE I—ELIMINATION OF 

2 FANNIE MAE AND FREDDIE MAC 

3 SEC. 101. ELIMINATION OF FANNIE MAE AND FREDDIE MAC. 

4 (a) FANNIE MAE.—Effective on the agency transfer 

5 date, the Corporation shall take all steps necessary to dis6 solve and eliminate the Federal National Mortgage Associa7 tion pursuant to the provisions of this Act. The charter for 

8 the Federal National Mortgage Association shall be repealed 

9 pursuant to title VI. 

10 (b) FREDDIE MAC.—Effective on the agency transfer 

11 date, the Corporation shall take all steps necessary to dis12 solve and eliminate the Federal Home Loan Mortgage Cor13 poration pursuant to the provisions of this Act. The charter 

14 for the Federal Home Loan Mortgage Corporation shall be 

15 repealed pursuant to title VI. 

16 TITLE II—FEDERAL MORTGAGE 

17 INSURANCE CORPORATION 

18 SEC. 201. ESTABLISHMENT. 

19 (a) ESTABLISHMENT.—Effective on the agency trans20 fer date, there is established the Federal Mortgage Insurance 

21 Corporation, which is charged with ensuring the safety and 

22 soundness of, and compliance with laws and regulations, 

23 fair access to financial services, and fair treatment of cus24 tomers by the institutions and other persons subject to its 


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1 jurisdiction and which shall have the powers hereinafter 

2 granted. 

3 (b) PURPOSE.—The purpose of the Corporation shall 

4 be to— 

5 (1) facilitate a liquid, transparent, and resilient 

6 single-family and multifamily mortgage credit market 

7 by supporting a robust secondary mortgage market, 

8 including during the transition to the new housing fi9 nance system; 

10 (2) provide insurance on any mortgage-backed 

11 security that satisfies the requirements under this Act 

12 to become a covered security; 

13 (3) monitor and supervise approved entities to 

14 the extent provided in this Act; 

15 (4) supervise the regulated entities; 

16 (5) facilitate the broad availability of mortgage 

17 credit and secondary mortgage market financing 

18 through fluctuations in the business cycle for eligible 

19 single-family and multifamily lending across all— 

20 (A) regions; 

21 (B) localities; 

22 (C) institutions; 

23 (D) property types, including housing serv24 ing renters; and 

25 (E) eligible borrowers; 


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1 (6) ensure continued, widespread availability of 

2 an affordable, long-term, fixed rate, prepayable mort3 gage, such as a 30-year fixed rate mortgage; and 

4 (7) preserve and maintain a liquid forward exe5 cution market for eligible single-family mortgage 

6 loans and single-family covered securities, such as the 

7 To-Be-Announced market. 

8 (c) GENERAL SUPERVISORY AND REGULATORY AU9 THORITY.— 

10 (1) IN GENERAL.—Each approved entity shall, to 

11 the extent provided in this Act, be subject to the su12 pervision and regulation of the Corporation. 

13 (2) REGULATED ENTITIES; OFFICE OF FI14 NANCE.—The Corporation shall have general regu15 latory authority over each regulated entity and the 

16 Office of Finance, and shall exercise such general reg17 ulatory authority to ensure that the purposes of this 

18 Act, any amendments made by this Act, and any 

19 other applicable law as to which the Corporation has 

20 responsibility under this Act are carried out. 

21 (d) FEDERAL STATUS.—The Corporation shall be an 

22 independent agency and an instrumentality of the Federal 

23 Government. 

24 (e) SUCCESSION.—The Corporation shall have succes25 sion until dissolved by an Act of Congress. 


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1 (f) PRINCIPAL OFFICE.—The Corporation shall main2 tain its principal office in the District of Columbia and 

3 shall be deemed, for purposes of venue in civil actions, to 

4 be a resident thereof. 

5 (g) AUTHORITY TO ESTABLISH OTHER OFFICES.—The 

6 Corporation may establish such other offices in such other 

7 place or places as the Corporation may deem necessary or 

8 appropriate in the conduct of its business. 

9 (h) PROHIBITION.—The Corporation shall not engage 

10 in mortgage loan origination. 

11 SEC. 202. MANAGEMENT OF CORPORATION. 

12 (a) BOARD OF DIRECTORS.— 

13 (1) MEMBERS.—The management of the Cor14 poration shall be vested in a Board of Directors con15 sisting of 5 members who shall be appointed by the 

16 President, by and with the advice and consent of the 

17 Senate, from among individuals who— 

18 (A) are citizens of the United States; and 

19 (B) have demonstrated technical, academic, 

20 or professional understanding of, and practical, 

21 disciplinary, vocational, or regulatory experience 

22 working in, housing and housing finance. 

23 (2) POLITICAL AFFILIATION.—Not more than 3 

24 of the members of the Board of Directors may be 

25 members of the same political party. 


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1 (3) DUTIES.—The Board of Directors shall ad2 vise the Chairperson regarding overall strategies and 

3 policies to carry out the duties and purposes of this 

4 Act. 

5 (b) CHAIRPERSON AND VICE CHAIRPERSON.— 

6 (1) CHAIRPERSON.— 

7 (A) DESIGNATION.—1 of the members ap8 pointed pursuant to subsection (a)(1) shall be 

9 designated by the President to serve as Chair10 person of the Board of Directors. 

11 (B) TERM.—Except as provided in sub12 section (c)(1)(A), the Chairperson shall be ap13 pointed for a term of 5 years, unless removed be14 fore the end of such term by the President under 

15 subparagraph (C). 

16 (C) REMOVAL FOR CAUSE.—The President 

17 may remove the Chairperson for inefficiency, ne18 glect of duty, or malfeasance in office. 

19 (D) DUTIES AND AUTHORITIES.— 

20 (i) IN GENERAL.—The Chairperson— 

21 (I) shall— 

22 (aa) be the active executive 

23 officer of the Corporation, subject 

24 to supervision by the Board of Di25 rectors; 


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1 (bb) oversee the prudential 

2 operations of each regulated enti3 ty; and 

4 (cc) ensure that each ap5 proved entity and regulated entity 

6 operates in a safe and sound 

7 manner, including— 

8 (AA) through the main9 tenance of adequate capital, 

10 standards, and internal con11 trols; and 

12 (BB) by ensuring com13 pliance with the rules, regu14 lations, guidelines, and or15 ders issued pursuant to this 

16 Act; and 

17 (II) may exercise such incidental 

18 powers as may be necessary or appro19 priate to assist the Corporation in ful20 filling the duties and responsibilities of 

21 the Corporation in the supervision and 

22 regulation of each approved entity and 

23 regulated entity. 

24 (ii) DELEGATION.—The Chairperson 

25 may delegate to officers and employees of 


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1 the Corporation any of the functions, pow2 ers, or duties of the Chairperson, as the 

3 Chairperson considers appropriate. 

4 (2) VICE CHAIRPERSON.— 

5 (A) DESIGNATION.—1 of the members ap6 pointed pursuant to subsection (a)(1) shall be 

7 designated by the President to serve as Vice 

8 Chairperson of the Board of Directors. 

9 (B) TERM.—Except as provided in sub10 section (c)(1)(B), the Vice Chairperson shall be 

11 appointed for a term of 5 years, unless removed 

12 before the end of such term by the President 

13 under subparagraph (C). 

14 (C) REMOVAL FOR CAUSE.—The President 

15 may remove the Vice Chairperson for ineffi16 ciency, neglect of duty, or malfeasance in office. 

17 (3) ACTING CHAIRPERSON.— 

18 (A) DURING VACANCY IN THE POSITION OF

19 CHAIRPERSON.—Except as provided in section 

20 402, in the event of a vacancy in the position of 

21 Chairperson of the Board of Directors or during 

22 the absence or disability of the Chairperson, the 

23 Vice Chairperson shall act as Chairperson. 

24 (B) DURING VACANCIES IN THE POSITION

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1 cept as provided in section 402, in the event of 

2 vacancies in the positions of Chairperson and 

3 Vice Chairperson, or during the absence or dis4 ability of both the Chairperson and the Vice 

5 Chairperson, the President shall designate 1 of 

6 the other members appointed pursuant to sub7 section (a)(1) as Acting Chairperson. 

8 (C) RETENTION OF AUTHORITY.—Any per9 son confirmed to serve as Chairperson, or acting 

10 as Chairperson, whether designated to act as 

11 such by the President under this paragraph or 

12 acting in such capacity by operation of this 

13 paragraph or section 402, shall for the period 

14 that such person is serving as Chairperson or 

15 acting as Chairperson— 

16 (i) act for all purposes as the Chair17 person; and 

18 (ii) have all the rights, duties, powers, 

19 and responsibilities of the Chairperson. 

20 (c) STAGGERED TERMS; TERM CONTINUATION.— 

21 (1) TERMS.— 

22 (A) TERM OF INITIAL CHAIRPERSON.—The 

23 initial member of the Board of Directors ap24 pointed pursuant to subsection (a)(1) and desVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00197 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 ignated as Chairperson under subsection (b)(1) 

2 shall serve a term of 30 months. 

3 (B) TERM OF INITIAL VICE CHAIR4 PERSON.—The initial member of the Board of 

5 Directors appointed pursuant to subsection 

6 (a)(1) and designated as Vice Chairperson under 

7 subsection (b)(2) shall serve a term of 30 months. 

8 (C) TERM OF OTHER APPOINTED MEM9 BERS.—1 of the other initial members of the 

10 Board of Directors appointed pursuant to sub11 section (a)(1) and not designated as Chairperson 

12 or Vice Chairperson under subsection (b) shall 

13 serve a term of 30 months and the other 2 initial 

14 members shall serve a term of 4 years. 

15 (D) ALL OTHER TERMS.—After the expira16 tion of the initial terms under subparagraphs 

17 (A) through (C), all subsequent members of the 

18 Board of Directors appointed pursuant to sub19 section (a)(1) shall serve for a term of 5 years. 

20 (2) CONTINUATION OF SERVICE.—Each member 

21 of the Board of Directors appointed pursuant to sub22 section (a)(1), including any member appointed to 

23 serve as Chairperson or Vice Chairperson, may con24 tinue to serve after the expiration of the term of office 

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1 ration of the next session of Congress subsequent to 

2 the expiration of said fixed term of office. 

3 (d) VACANCY; MANNER OF FULFILLMENT.—Any va4 cancy on the Board of Directors shall be filled in the man5 ner in which the original appointment was made, and the 

6 person appointed to fill such vacancy shall be appointed 

7 only for the remainder of such term. 

8 (e) COMPENSATION OF MEMBERS.— 

9 (1) CHAIRPERSON.—The Chairperson shall re10 ceive compensation at the rate prescribed for Level II 

11 of the Executive Schedule under section 5313 of title 

12 5, United States Code. 

13 (2) OTHER APPOINTED MEMBERS.—All members 

14 of the Board of Directors not described in paragraph 

15 (1) shall receive compensation at the rate prescribed 

16 for Level III of the Executive Schedule under section 

17 5314 of title 5, United States Code. 

18 (f) INELIGIBILITY FOR OTHER OFFICES DURING

19 SERVICE; POSTSERVICE RESTRICTION.— 

20 (1) RESTRICTIONS DURING SERVICE.—No mem21 ber of the Board of Directors may, during the time 

22 such member is serving in such capacity and for the 

23 2-year period beginning on the date such member 

24 ceases to serve as a member of the Board of Direc25 tors— 


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1 (A) be an officer, employee, or director of 

2 any— 

3 (i) insured depository institution; 

4 (ii) insured depository institution 

5 holding company; 

6 (iii) Federal Reserve bank; 

7 (iv) regulated entity; 

8 (v) approved entity; or 

9 (vi) non-bank financial institution or 

10 company that originates eligible mortgage 

11 loans; or 

12 (B) hold stock or have beneficial ownership 

13 in any— 

14 (i) insured depository institution; 

15 (ii) insured depository institution 

16 holding company; 

17 (iii) regulated entity; 

18 (iv) approved entity; or 

19 (v) non-bank financial institution or 

20 company that originates eligible mortgage 

21 loans. 

22 (2) CERTIFICATION.—Upon taking office, each 

23 member of the Board of Directors shall certify under 

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1 ply, with this subsection and such certification shall 

2 be filed with the secretary of the Board of Directors. 

3 (g) STATUS OF DIRECTORS, OFFICERS, AND EMPLOY4 EES.— 

5 (1) IN GENERAL.—A member of the Board of Di6 rectors, officer, or employee of the Corporation has no 

7 liability under the Securities Act of 1933 (15 U.S.C. 

8 77b et seq.) with respect to any claim arising out of 

9 or resulting from any act or omission by such person 

10 within the scope of such person’s employment in con11 nection with any transaction involving the disposi12 tion of assets (or any interests in any assets or any 

13 obligations backed by any assets) by the Corporation. 

14 This subsection shall not be construed to limit per15 sonal liability for criminal acts or omissions, willful 

16 or malicious misconduct, acts or omissions for private 

17 gain, or any other acts or omissions outside the scope 

18 of such person’s employment. 

19 (2) EFFECT ON OTHER LAW.—This subsection 

20 does not affect— 

21 (A) any other immunities and protections 

22 that may be available to such person under ap23 plicable law with respect to such transactions; or 

24 (B) any other right or remedy against the 

25 Corporation, against the United States under 


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1 applicable law, or against any person other than 

2 a person described in paragraph (1) partici3 pating in such transactions. 

4 (3) RULE OF CONSTRUCTION.—This subsection 

5 shall not be construed to limit or alter in any way 

6 the immunities that are available under applicable 

7 law for Federal officials and employees not described 

8 in this subsection. 

9 (h) INDEPENDENCE.— 

10 (1) IN GENERAL.—Each member of the Board of 

11 Directors shall be independent in performing his or 

12 her duties. 

13 (2) INDEPENDENCE DETERMINATION.—In order 

14 to be considered independent for purposes of this sub15 section, a member of the Board of Directors— 

16 (A) may not, other than in his or her ca17 pacity as a member of the Board of Directors or 

18 any committee thereof— 

19 (i) accept any consulting, advisory, or 

20 other compensatory fee from the Corpora21 tion; or 

22 (ii) be a person associated with the 

23 Corporation or with any affiliate of the 

24 Corporation; and 


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1 (B) shall be disqualified from any delibera2 tion involving any transaction of the Corpora3 tion in which the member has a financial inter4 est in the outcome of the transaction. 

5 (i) ADMINISTRATION.—Except as may be otherwise 

6 provided in this Act, the Board of Directors shall admin7 ister the affairs of the Corporation fairly and impartially 

8 and without discrimination. 

9 (j) VOTING.—A majority vote of all members of the 

10 Board of Directors is necessary to resolve all voting issues 

11 of the Corporation. 

12 (k) MEETINGS.—The Board of Directors shall meet in 

13 accordance with the bylaws of the Corporation— 

14 (1) at the call of the Chairperson; and 

15 (2) not less frequently than once each quarter. 

16 (l) QUORUM.—3 members of the Board of Directors 

17 then in office shall constitute a quorum. 

18 (m) BYLAWS.—A majority of the members of the Board 

19 of Directors may amend the bylaws of the Corporation. 

20 SEC. 203. ADVISORY COMMITTEE. 

21 (a) ESTABLISHMENT.— 

22 (1) IN GENERAL.—The Corporation shall estab23 lish an Advisory Committee for the purpose of advis24 ing the Office of Consumer and Market Access and the 

25 Board of Directors on developments in the primary 


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1 and secondary mortgage markets that have material 

2 effects on the ongoing mission of the Corporation. 

3 (2) DUTIES.—The Advisory Committee shall pro4 vide advice and recommendations to the Office of 

5 Consumer and Market Access and the Board of Direc6 tors as to material developments in the following 

7 areas: 

8 (A) Housing prices and affordability. 

9 (B) The effectiveness of consumer protec10 tions in the housing market. 

11 (C) Volume and characteristics of eligible 

12 mortgage loan originations. 

13 (D) The condition of the rental housing 

14 market. 

15 (E) Small lender participation in the sec16 ondary mortgage market. 

17 (F) Access to credit in rural and under18 served communities. 

19 (G) Competition among approved entities. 

20 (H) Fair, equitable, and nondiscriminatory 

21 access to mortgage credit for individuals and 

22 communities. 

23 (b) COMPOSITION AND QUALIFICATIONS.— 

24 (1) IN GENERAL.—The Advisory Committee shall 

25 be composed of 14 members as follows: 


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1 (A) 1 member who shall have a dem2 onstrated technical, academic, or professional 

3 understanding of, and practical, disciplinary, 

4 vocational, or regulatory experience working 

5 with, non-depository mortgage originators hav6 ing less than $10,000,000,000 in total assets. 

7 (B) 1 member who shall have a dem8 onstrated technical, academic, or professional 

9 understanding of, and practical, disciplinary, 

10 vocational, or regulatory experience working 

11 with, credit unions having less than 

12 $10,000,000,000 in total assets. 

13 (C) 1 member who shall have a dem14 onstrated technical, academic, or professional 

15 understanding of, and practical, disciplinary, 

16 vocational, or regulatory experience working 

17 with, banks having less than $10,000,000,000 in 

18 total assets. 

19 (D) 1 member who shall have a dem20 onstrated technical, academic, or professional 

21 understanding of, and practical, disciplinary, 

22 vocational, or regulatory experience working 

23 with, banks having more than $500,000,000,000 

24 in total assets. 


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1 (E) 1 member who shall have a dem2 onstrated technical, academic, or professional 

3 understanding of, and practical, disciplinary, 

4 vocation, or regulatory experience working with, 

5 regional banks having more than 

6 $10,000,000,000 and less than $500,000,000,000 

7 in total assets. 

8 (F) 1 member who shall have a dem9 onstrated technical, academic, or professional 

10 understanding of, and practical, disciplinary, 

11 vocational, or regulatory experience with private 

12 mortgage insurance. 

13 (G) 1 member who shall have a dem14 onstrated technical, academic, or professional 

15 understanding of, and practical, disciplinary, 

16 vocational, or regulatory experience with 

17 securitization. 

18 (H) 1 member who shall have a dem19 onstrated technical, academic, or professional 

20 understanding of, and practical, disciplinary, 

21 vocational, or regulatory experience with inves22 tor protection and institutional investors. 

23 (I) 1 member who shall have a dem24 onstrated technical, academic, or professional 


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1 understanding of, or practical, disciplinary, or 

2 vocational experience with consumer protection. 

3 (J) 1 member who shall have a dem4 onstrated technical, academic, or professional 

5 understanding of, or practical, disciplinary, or 

6 vocational experience with policies and programs 

7 to support sustainable homeownership. 

8 (K) 1 member who shall have a dem9 onstrated technical, academic, or professional 

10 understanding of, or practical, disciplinary, or 

11 vocational experience with multifamily housing 

12 development. 

13 (L) 1 member who shall have a dem14 onstrated technical, academic, or professional 

15 understanding of, or practical, disciplinary, or 

16 vocational experience with affordable rental 

17 housing. 

18 (M) 1 member who shall have a dem19 onstrated technical, academic, or professional 

20 understanding of, or practical, disciplinary, or 

21 vocational experience with asset management. 

22 (N) 1 member who shall have a dem23 onstrated professional understanding of and vo24 cational experience with State bank, non-bank, 

25 or insurance regulation. 


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1 (2) EXPERIENCE WITH RURAL HOUSING.—Of the 

2 members of the Advisory Committee identified under 

3 subparagraphs (B) and (C) of paragraph (1), at least 

4 1 shall be required to have practical, disciplinary, or 

5 vocational experience working in rural areas and 

6 with rural borrowers. 

7 (3) EXPERIENCE WITH FAIR LENDING.—Of the 

8 members of the Advisory Committee identified under 

9 paragraph (1), at least 1 shall be required to have 

10 demonstrated practical, academic, disciplinary, or vo11 cational experience with fair lending practices and 

12 policies and programs that promote fair, equitable, 

13 and nondiscriminatory access to credit in underserved 

14 markets. 

15 (c) MEMBER SELECTION.—Members of the Advisory 

16 Committee shall be appointed to the Committee by the 

17 Chairperson, subject to approval by a majority of the Board 

18 of Directors. 

19 (d) MEETINGS.—The Advisory Committee shall meet 

20 no less frequently than once during each calendar quarter. 

21 SEC. 204. OFFICE OF THE INSPECTOR GENERAL. 

22 (a) OFFICE OF INSPECTOR GENERAL.— 

23 (1) ESTABLISHMENT.—On the agency transfer 

24 date, there is established the Office of the Inspector 


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1 General of the Federal Mortgage Insurance Corpora2 tion. 

3 (2) HEAD OF OFFICE.— 

4 (A) IN GENERAL.—The head of the Office of 

5 the Inspector General of the Federal Mortgage 

6 Insurance Corporation shall be the Inspector 

7 General of the Federal Mortgage Insurance Cor8 poration, who shall be appointed by the Presi9 dent, by and with the advice and consent of the 

10 Senate, in accordance with section 3(a) of the 

11 Inspector General Act of 1978 (5 U.S.C. App.). 

12 (B) TRANSITIONAL PROVISION.—Notwith13 standing subparagraph (A), during the period 

14 beginning on the agency transfer date and end15 ing on the date on which the Inspector General 

16 of the Federal Mortgage Insurance Corporation 

17 is confirmed, the person serving as the Inspector 

18 General or the Acting Inspector General for the 

19 Office of the Inspector General within the Fed20 eral Housing Finance Agency on the date that is 

21 1 day prior to the agency transfer date shall act 

22 for all purposes as, and with the full powers of, 

23 the Inspector General of the Federal Mortgage 

24 Insurance Corporation. 


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1 (3) OFFICE OF THE INSPECTOR GENERAL AU2 THORITIES.—Beginning on the agency transfer date, 

3 the authority of the Office of the Inspector General of 

4 the Federal Mortgage Insurance Corporation shall in5 clude all rights and responsibilities of the Office of the 

6 Inspector General of the Federal Housing Finance 

7 Agency as such rights and responsibilities existed on 

8 the date that is 1 day prior to the agency transfer 

9 date. 

10 (b) PROVISION OF PROPERTY AND FACILITIES.—The 

11 Chairperson shall provide the Office of the Inspector Gen12 eral of the Federal Mortgage Insurance Corporation with— 

13 (1) appropriate and adequate office space at 

14 each central and field office location established by the 

15 Corporation, together with such equipment, office sup16 plies, and communications facilities and services as 

17 may be necessary for the Inspector General of the 

18 Federal Mortgage Insurance Corporation to operate 

19 such offices; and 

20 (2) the necessary maintenance services for— 

21 (A) any office provided under paragraph 

22 (1); and 

23 (B) the equipment and facilities located in 

24 any such office. 


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1 (c) HIRING OF EMPLOYEES, EXPERTS, AND CONSULT2 ANTS.—Notwithstanding paragraphs (7) and (8) of section 

3 6(a) of the Inspector General Act of 1978 (5 U.S.C. App.), 

4 the Inspector General of the Federal Mortgage Insurance 

5 Corporation may select, appoint, and employ such officers 

6 and employees as may be necessary— 

7 (1) for carrying out the functions, powers, and 

8 duties of the Office of the Inspector General; and 

9 (2) to obtain the temporary or intermittent serv10 ices of experts or consultants or an organization of ex11 perts or consultants, subject to the applicable laws 

12 and regulations that govern such selections, appoint13 ments, and employment, and the obtaining of such 

14 services, within the Corporation. 

15 (d) SUBMISSION OF BUDGET.— 

16 (1) IN GENERAL.—For each fiscal year, the In17 spector General of the Federal Mortgage Insurance 

18 Corporation shall transmit a budget estimate and re19 quest for funds to the Chairperson. 

20 (2) REQUIRED CONTENT.—The budget request re21 quired under paragraph (1) shall— 

22 (A) specify— 

23 (i) the aggregate amount of funds re24 quested for such fiscal year for the oper25 ations of the Office of the Inspector General 


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1 of the Federal Mortgage Insurance Corpora2 tion; and 

3 (ii) the amount requested for all train4 ing needs, including a certification from the 

5 Inspector General that the amount requested 

6 satisfies all training requirements for the 

7 Office of the Inspector General of the Fed8 eral Mortgage Insurance Corporation for 

9 that fiscal year; and 

10 (B) specifically— 

11 (i) identify and specify any resources 

12 necessary to support the Council of the In13 spectors General on Integrity and Effi14 ciency; and 

15 (ii) justify the need for any resources 

16 identified and specified under clause (i). 

17 (e) AMENDMENTS TO INSPECTOR GENERAL ACT OF

18 1978.—The Inspector General Act of 1978 (5 U.S.C. App.) 

19 is amended— 

20 (1) in section 6(e)(3), by inserting ‘‘Federal 

21 Mortgage Insurance Corporation’’ after ‘‘Federal 

22 Emergency Management Agency’’; 

23 (2) in section 8G(a)(2), by striking ‘‘the Federal 

24 Housing Finance Board’’; and 

25 (3) in section 12— 


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1 (A) in paragraph (1), by striking ‘‘Director 

2 of the Federal Housing Finance Agency’’ and in3 serting ‘‘Chairperson of the Federal Mortgage In4 surance Corporation’’; and 

5 (B) in paragraph (2), by striking ‘‘Federal 

6 Housing Finance Agency’’ and inserting ‘‘Fed7 eral Mortgage Insurance Corporation’’. 

8 (f) EFFECTIVE DATE.—The amendments made by this 

9 section shall take effect on the agency transfer date. 

10 SEC. 205. STAFF, EXPERTS, AND CONSULTANTS. 

11 (a) COMPENSATION.— 

12 (1) IN GENERAL.—The Board of Directors may 

13 appoint and fix the compensation of such officers, at14 torneys, economists, examiners, and other employees 

15 as may be necessary for carrying out the functions of 

16 the Corporation. 

17 (2) RATES OF PAY.—Rates of basic pay and the 

18 total amount of compensation and benefits for all em19 ployees of the Corporation may be— 

20 (A) set and adjusted by the Board of Direc21 tors without regard to the provisions of chapter 

22 51 or subchapter III of chapter 53 of title 5, 

23 United States Code; and 

24 (B) reasonably increased, notwithstanding 

25 any limitation set forth in paragraph (3), if the 


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1 Board of Directors determines such increases are 

2 necessary to attract and hire qualified employees. 

3 (3) PARITY.—The Board of Directors may pro4 vide additional compensation and benefits to employ5 ees of the Corporation, of the same type of compensa6 tion or benefits that are then being provided by any 

7 agency referred to under section 1206 of the Financial 

8 Institutions Reform, Recovery, and Enforcement Act 

9 of 1989 (12 U.S.C. 1833b) or, if not then being pro10 vided, could be provided by such an agency under ap11 plicable provisions of law, rule, or regulation. In set12 ting and adjusting the total amount of compensation 

13 and benefits for employees, the Board of Directors 

14 shall consult with and seek to maintain com15 parability with the agencies referred to under section 

16 1206 of the Financial Institutions Reform, Recovery, 

17 and Enforcement Act of 1989 (12 U.S.C. 1833b). 

18 (b) DETAIL OF GOVERNMENT EMPLOYEES.—Upon the 

19 request of the Board of Directors, any Federal Government 

20 employee may be detailed to the Corporation without reim21 bursement from the Corporation, and such detail shall be 

22 without interruption or loss of civil service status or privi23 lege. 


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1 (c) EXPERTS AND CONSULTANTS.—The Corporation 

2 may procure the services of experts and consultants as the 

3 Corporation considers necessary or appropriate. 

4 (d) TECHNICAL AND PROFESSIONAL ADVISORY COM5 MITTEES.—The Board of Directors may appoint such spe6 cial advisory, technical, or professional committees as may 

7 be useful in carrying out the functions of the Corporation. 

8 SEC. 206. REPORTS; TESTIMONY; AUDITS. 

9 (a) REPORTS.— 

10 (1) IN GENERAL.—After the system certification 

11 date, the Corporation shall submit, on an annual 

12 basis, to the Committee on Banking, Housing, and 

13 Urban Affairs of the Senate and the Committee on 

14 Financial Services of the House of Representatives a 

15 written report of its operations, activities, budget, re16 ceipts, and expenditures for the preceding 12-month 

17 period. 

18 (2) CONTENTS OF REPORT.—The report required 

19 under subsection (a) shall include— 

20 (A) an analysis of— 

21 (i) with respect to the Mortgage Insur22 ance Fund established under section 

23 303(e)— 

24 (I) the current financial condition 

25 of the Mortgage Insurance Fund; 


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1 (II) the exposure of the Mortgage 

2 Insurance Fund to economic conditions 

3 and an analysis of any stress tests con4 ducted with respect to the Fund; 

5 (III) an estimate of the resources 

6 needed for the Mortgage Insurance 

7 Fund to achieve the purposes of this 

8 Act; and 

9 (IV) any findings, conclusions, 

10 and recommendations for legislative 

11 and administrative actions considered 

12 appropriate to the future activities of 

13 the Corporation; 

14 (ii) whether or not the actual reserve 

15 ratio of the Mortgage Insurance Fund 

16 met— 

17 (I) the reserve ratio set for the 

18 preceding 12-month period; or 

19 (II) the reserve ratio goals estab20 lished in section 303(e)(7); 

21 (iii) the detailed plan of the Corpora22 tion to ensure that the goals set for the re23 serve ratio for the Mortgage Insurance Fund 

24 are met and maintained for the next 12- 

25 month period; 


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1 (iv) the state of the private label mort2 gage-backed securities market, including the 

3 submission of a reasonable set of adminis4 trative, regulatory, and legislative proposals 

5 on how to limit the Federal Government’s 

6 footprint in the secondary mortgage market; 

7 (v) how and the extent to which the 

8 Corporation and the Small Lender Mutual 

9 established under section 315(a)(1) has ful10 filled its obligations to ensure that commu11 nity and mid-size banks, credit unions, and 

12 other small lenders have equitable and 

13 meaningful access to the secondary mort14 gage market; and 

15 (vi) the report required under section 

16 208(b)(2)(B); 

17 (B) a discussion of the significant problems 

18 faced by consumers in shopping for or obtaining 

19 mortgage credit or services; 

20 (C) a justification of the Corporation’s 

21 budget for the preceding 12-month period; 

22 (D) a list of the significant rules and orders 

23 adopted by the Corporation, as well as other sig24 nificant initiatives conducted by the Corpora25 tion, during the preceding 12-month period and 


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1 the plan of the Corporation for rules, orders, or 

2 other initiatives to be undertaken during the 

3 next 12-month period; 

4 (E) a list, with a brief statement of the 

5 issues, of the public supervisory and enforcement 

6 actions to which the Corporation was a party 

7 during the preceding 12-month period; 

8 (F) the actions of the Corporation taken re9 garding rules, orders, and supervisory actions 

10 with respect to covered entities; and 

11 (G) an assessment of significant actions by 

12 State attorneys general or State regulators relat13 ing to Federal law within the Corporation’s ju14 risdiction. 

15 (b) TESTIMONY.—After the system certification date, 

16 the Chairperson shall appear annually before the Com17 mittee on Banking, Housing, and Urban Affairs of the Sen18 ate and the Committee on Financial Services of the House 

19 of Representatives to provide testimony on the report sub20 mitted under subsection (a). 

21 (c) REPORTS TO THE OFFICE OF MANAGEMENT AND

22 BUDGET.— 

23 (1) FINANCIAL OPERATING PLANS AND FORE24 CASTS.—The Corporation shall provide to the DirecVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00218 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 tor of the Office of Management and Budget copies of 

2 the— 

3 (A) Corporation’s financial operating plans 

4 and forecasts as prepared by the Corporation in 

5 the ordinary course of its operations; and 

6 (B) quarterly reports of the Corporation’s 

7 financial condition and results of operations as 

8 prepared by the Corporation in the ordinary 

9 course of its operations. 

10 (2) RULE OF CONSTRUCTION.—This subsection 

11 shall not be construed to— 

12 (A) require any obligation on the part of 

13 the Corporation to consult with, or obtain the 

14 consent or approval of, the Director of the Office 

15 of Management and Budget with respect to any 

16 reports, plans, forecasts, or other information re17 ferred to in paragraph (1); or 

18 (B) authorize any jurisdiction or oversight 

19 by the Director of the Office of Management and 

20 Budget over the affairs or operations of the Cor21 poration. 

22 (d) AUDIT.— 

23 (1) ANNUAL AUDIT.—The Comptroller General of 

24 the United States shall annually audit— 


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1 (A) the financial transactions of the Cor2 poration; and 

3 (B) the Mortgage Insurance Fund. 

4 (2) AUDITING STANDARDS.—The audit required 

5 under this subsection shall be completed in accordance 

6 with the United States generally accepted government 

7 auditing standards as may be prescribed by the 

8 Comptroller General. 

9 (3) PLACE OF AUDIT.—The audit required under 

10 this subsection shall be conducted at the place or 

11 places where accounts of the Corporation are nor12 mally kept. 

13 (4) ACCESS.—Notwithstanding any other provi14 sion of law, upon request and in such reasonable form 

15 as the Comptroller General may request, the Comp16 troller General shall have access to— 

17 (A) any records, books, accounts, documents, 

18 reports, files, papers, property, or other informa19 tion under the control of or used by the Corpora20 tion; 

21 (B) any records or other information under 

22 the control of a person or entity acting on behalf 

23 of or under the authority of the Corporation, to 

24 the extent that such records or other information 


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1 are relevant to an audit required under this sub2 section; and 

3 (C) the officers, directors, employees, finan4 cial advisors, staff, working groups, and agents 

5 and representatives of the Corporation (relating 

6 to the activities on behalf of the Corporation of 

7 such agent or representative). 

8 (5) RULE OF CONSTRUCTION.—All records, books, 

9 accounts, documents, reports, files, papers, property, 

10 or other information referred to in paragraph (4) 

11 shall remain in the possession and custody of the Cor12 poration. 

13 (6) COPIES.—The Comptroller General may, as 

14 the Comptroller General considers appropriate, make 

15 and retain copies of the records, books, accounts, doc16 uments, reports, files, papers, property, or other infor17 mation to which the Comptroller General is granted 

18 access under paragraph (3). 

19 (7) REPORT.— 

20 (A) SUBMISSION TO CONGRESS.—The 

21 Comptroller General shall submit to Congress a 

22 report of each annual audit conducted under this 

23 subsection not later than six and one-half months 

24 following the close of the year covered by such 

25 audit. 


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1 (B) REQUIRED CONTENT.—The report re2 quired under subparagraph (A) shall— 

3 (i) set forth the scope of the audit; and 

4 (ii) include— 

5 (I) the statement of assets and li6 abilities, as well as any surplus or def7 icit; 

8 (II) the statement of income and 

9 expenses; 

10 (III) the statement of sources and 

11 application of funds; 

12 (IV) such comments and informa13 tion as the Comptroller General may 

14 deem necessary to inform Congress of 

15 the financial operations and condition 

16 of the Corporation and the Mortgage 

17 Insurance Fund, together with such 

18 recommendations with respect thereto 

19 as the Comptroller General may deem 

20 advisable; and 

21 (V) a description of any program, 

22 expenditure, or other financial trans23 action or undertaking observed in the 

24 course of the audit, which, in the opin25 ion of the Comptroller General, has 


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1 been carried on or made without au2 thority of law. 

3 (C) COPIES.—A copy of each report re4 quired under subparagraph (A) shall be fur5 nished to the President and to the Chairperson 

6 at the time such report is submitted to Congress. 

7 (8) ASSISTANCE AND COSTS.— 

8 (A) PERMITTED USE OF OUTSIDE ASSIST9 ANCE.—For the purpose of conducting an audit 

10 under this subsection, the Comptroller General 

11 may employ by contract, without regard to sec12 tion 3709 of the Revised Statutes of the United 

13 States (41 U.S.C. 6101), professional services of 

14 firms and organizations of certified public ac15 countants for temporary periods or for special 

16 purposes. 

17 (B) COST OF AUDIT COVERED BY CORPORA18 TION.— 

19 (i) IN GENERAL.—Upon the request of 

20 the Comptroller General, the Chairperson 

21 shall transfer to the Comptroller General 

22 from funds available the amount requested 

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1 ducted by the Comptroller General pursuant 

2 to this subsection. 

3 (ii) CREDIT OF FUNDS.—The Comp4 troller General shall credit funds transferred 

5 under clause (i) to the account at the 

6 United States Treasury established for sala7 ries and expenses of the Government Ac8 countability Office, and such amounts shall 

9 be available upon receipt and without fiscal 

10 year limitation to cover the full costs of the 

11 audit and report. 

12 SEC. 207. SPECIFIC OFFICES. 

13 (a) ESTABLISHMENT.— 

14 (1) GENERAL AUTHORITY.—The Corporation— 

15 (A) shall establish within the Corporation 

16 any office required to be established by this Act; 

17 (B) may establish such other offices or sub18 offices as are necessary and proper for the func19 tioning of the Corporation; and 

20 (C) may eliminate or consolidate any office 

21 or suboffice established under subparagraph (B). 

22 (2) APPOINTMENTS.—Except as may otherwise 

23 be specifically provided, the head of any office estab24 lished pursuant to paragraph (1) shall be appointed 

25 by the Board of Directors. 


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1 (b) UNDERWRITING.—The Corporation shall establish 

2 an Office of Underwriting in the Corporation, whose func3 tions shall include ensuring that eligible single-family mort4 gage loans that collateralize single-family covered securities 

5 insured under this Act comply with the requirements of this 

6 Act and minimize risk to the Mortgage Insurance Fund. 

7 (c) SECURITIZATION.—The Corporation shall establish 

8 an Office of Securitization in the Corporation, whose func9 tions shall include— 

10 (1) overseeing and supervising the Securitization 

11 Platform established under part I of subtitle C of title 

12 III; and 

13 (2) ensuring that small mortgage lenders have 

14 equitable access to— 

15 (A) the Securitization Platform, including 

16 through the development and facilitation of op17 tions such as multi-guarantor pools and multi18 lender pools of eligible single-family mortgage 

19 loans to be securitized and issued as single-fam20 ily covered securities through such Platform; and 

21 (B) any small lender mutual established or 

22 approved under section 315. 

23 (d) FEDERAL HOME LOAN BANKS.— 

24 (1) IN GENERAL.—Upon the system certification 

25 date, the Corporation shall establish an Office of FedVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00225 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 eral Home Loan Bank Supervision in the Corpora2 tion, whose functions shall include— 

3 (A) overseeing, coordinating, and super4 vising the Federal Home Loan Banks and the 

5 Federal Home Loan Bank System; 

6 (B) supervising any authorized subsidiary 

7 of 1 or more Federal Home Loan Banks that is 

8 an approved aggregator pursuant to section 

9 312(m), including with respect to the capitaliza10 tion of any such subsidiary; 

11 (C) serving as the central point of coordina12 tion within the Corporation with respect to any 

13 regulations or regulatory actions relating to the 

14 role of a Federal Home Loan Bank, or sub15 sidiary or joint office thereof, as a covered entity; 

16 and 

17 (D) monitoring whether any regulation or 

18 regulatory action taken with respect to a Federal 

19 Home Loan Bank, or subsidiary or joint office 

20 thereof, approved under section 312 in its role as 

21 a covered entity does not adversely impact the 

22 traditional liquidity and advance mission of the 

23 Federal Home Loan Banks and Federal Home 

24 Loan Bank System. 


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1 (2) TRANSFER OF FUNCTIONS.—Effective on the 

2 system certification date, there are transferred to the 

3 Office of Federal Home Loan Bank Supervision in 

4 the Corporation all functions of the Federal Housing 

5 Finance Agency of the Corporation relating to— 

6 (A) the supervision of the Federal Home 

7 Loan Banks and the Federal Home Loan Bank 

8 System; and 

9 (B) all rulemaking authority of the Federal 

10 Housing Finance Agency of the Corporation re11 lating to the Federal Home Loan Banks and the 

12 Federal Home Loan Bank System. 

13 SEC. 208. OFFICE OF CONSUMER AND MARKET ACCESS. 

14 (a) ESTABLISHMENT.—The Corporation shall establish 

15 an Office of Consumer and Market Access in the Corpora16 tion, whose functions shall include the responsibilities set 

17 forth under subsection (b). 

18 (b) RESPONSIBILITIES.— 

19 (1) ADMINISTERING THE MARKET ACCESS

20 FUND.—The Office of Consumer and Market Access 

21 shall administer the Market Access Fund established 

22 under section 504. 

23 (2) MONITORING, COORDINATING, AND FACILI24 TATING THE NEEDS OF UNDERSERVED MARKETS.— 


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1 (A) IN GENERAL.—The Office of Consumer 

2 and Market Access shall— 

3 (i) monitor, on a macro level, the na4 tional, regional, and area single-family and 

5 multifamily housing finance markets to 

6 identify underserved markets, communities, 

7 and consumers in accordance with the mar8 ket segments identified and defined under 

9 section 210; 

10 (ii) coordinate with Federal and State 

11 agencies regarding existing policies and ini12 tiatives that address— 

13 (I) the housing needs of under14 served markets, communities, and con15 sumers; and 

16 (II) the affordable housing needs 

17 of markets, communities, and con18 sumers; and 

19 (iii) provide information on business 

20 practices and technical assistance to market 

21 participants regarding communities identi22 fied as underserved with regards to address23 ing the housing needs of consumers in that 

24 community. 


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1 (B) ANNUAL STATE OF COVERED SECURI2 TIES MARKET REPORT.— 

3 (i) IN GENERAL.—The Office of Con4 sumer and Market Access shall, on an an5 nual basis, submit a report to Congress on 

6 the state of the covered securities market, 

7 and make such report available to the pub8 lic. 

9 (ii) REQUIRED CONTENT.—The report 

10 required under clause (i) shall include— 

11 (I) an assessment of the extent to 

12 which the covered securities market is 

13 providing liquidity to eligible bor14 rowers in all segments of the mortgage 

15 origination primary market, including 

16 underserved segments identified and 

17 defined by the Corporation under sec18 tion 210; and 

19 (II) recommendations for such leg20 islative, regulatory, or administrative 

21 actions as may be necessary to address 

22 any deficiencies in the availability of 

23 mortgage credit in any market or re24 gion identified pursuant to clause (i) 


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1 via existing Federal programs or the 

2 covered securities market. 

3 (iii) RELIANCE ON PUBLIC DATA.—In 

4 preparing each report required under this 

5 subparagraph, the Office of Consumer and 

6 Market Access— 

7 (I) shall use, to the maximum ex8 tent practicable, publicly available 

9 data and data otherwise collected 

10 under this Act; and 

11 (II) shall not include or review 

12 any confidential information or infor13 mation collected by the Corporation as 

14 part of its supervisory or examination 

15 authorities that is confidential. 

16 (C) INCENTIVE STUDY.—The Office of Con17 sumer and Market Access shall, on a biennial 

18 basis, conduct a study on incentives to encourage 

19 mortgage lenders and mortgage originators to 

20 address the housing needs of underserved markets 

21 and communities. 

22 (D) INCLUSION IN ANNUAL REPORT.—The 

23 Corporation shall include the report required in 

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1 paragraph (C) in the annual report required 

2 under section 206. 

3 (E) CONSULTATION.—The Office of Con4 sumer and Market Access shall consult with the 

5 Federal Home Loan Banks and any small lender 

6 mutual established or approved under section 

7 315 on approaches, methods, and practices de8 signed to address the housing needs of under9 served markets and communities. 

10 SEC. 209. OFFICE OF MULTIFAMILY HOUSING. 

11 The Corporation shall establish an Office of Multi12 family Housing in the Corporation, whose functions shall 

13 include— 

14 (1) developing, adopting, and publishing specific 

15 eligibility criteria to ensure that eligible multifamily 

16 mortgage loans that collateralize multifamily covered 

17 securities insured under this Act comply with the re18 quirements of this Act; and 

19 (2) performing any other activity relating to the 

20 multifamily housing finance system that the Corpora21 tion may determine appropriate to fulfill the require22 ments of this Act. 


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1 SEC. 210. EQUITABLE ACCESS FOR LENDERS AND BOR2 ROWERS. 

3 (a) EQUITABLE ACCESS IN UNDERSERVED MARKET

4 SEGMENTS.— 

5 (1) IN GENERAL.—Subject to subsection (b), the 

6 Corporation shall seek to support the primary mort7 gage market for eligible mortgage loans on an equi8 table, nondiscriminatory, and non-exclusionary basis 

9 to help ensure that all eligible borrowers have access 

10 to mortgage credit, including underserved segments of 

11 the primary mortgage market as identified and de12 fined by the Corporation under paragraph (2). 

13 (2) UNDERSERVED MARKET SEGMENTS.—The 

14 Corporation shall, by regulation, identify and define 

15 not more than 8 segments of the primary mortgage 

16 market in which lenders and eligible borrowers have 

17 been determined to lack equitable access to the housing 

18 finance system facilitated by the Corporation. The 

19 regulation required under this paragraph shall set 

20 forth the criteria by which the Corporation identified 

21 such underserved market segments. The identified un22 derserved market segments required to be identified 

23 and defined under this paragraph may include the 

24 following: 

25 (A) Historically underserved communities, 

26 including rural and urban areas. 


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1 (B) Manufactured housing. 

2 (C) Small balance loans. 

3 (D) Low- and moderate-income credit4 worthy borrowers. 

5 (E) Preservation of existing housing stock 

6 created by State or Federal laws. 

7 (F) Affordable rental housing. 

8 (3) REPORTS ON SERVING UNDERSERVED MAR9 KET SEGMENTS.— 

10 (A) ANNUAL REPORTS.—The Corporation 

11 shall require that each approved guarantor and 

12 approved aggregator engaged in a covered guar13 antee transaction or in a covered market-based 

14 risk-sharing transaction submit on annual basis 

15 a public report describing the actions taken by 

16 such approved guarantor or approved aggregator 

17 during the year, consistent with its business 

18 judgment, to provide credit to the underserved 

19 market segments identified and defined by the 

20 Corporation pursuant to this subsection, includ21 ing corporate practices designed to serve such 

22 identified market segments. The annual report 

23 required under this subparagraph shall be ap24 proved by the board of directors and signed by 

25 the chief executive officer of the approved guarVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00233 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 antor or approved aggregator submitting the re2 port. 

3 (B) REPORT TEMPLATE.—The Corporation 

4 may establish an optional template for the an5 nual report required under subparagraph (A). 

6 (C) REPORT NOT SUBJECT TO PRIOR RE7 VIEW OR APPROVAL.—An annual report required 

8 under subparagraph (A) shall not be subject to 

9 prior review or approval by the Corporation. 

10 (D) COORDINATION WITH OTHER FEDERAL

11 AND STATE AGENCIES.—The Corporation shall, 

12 in establishing the requirements for the annual 

13 report required under subparagraph (A), coordi14 nate with other Federal and State agencies, as 

15 necessary, to reduce duplicative reporting re16 quirements. 

17 (b) LIMITATIONS.— 

18 (1) LIMITATION ON USE OF AUTHORITIES AND

19 INFORMATION.—In carrying out this title, the Cor20 poration shall not interfere with the exercise of busi21 ness judgment of an approved aggregator or approved 

22 guarantor in determining which specific mortgage 

23 loans to include in a covered guarantee transaction or 

24 a covered market-based risk-sharing transaction, in25 cluding through the Corporation’s use of— 


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1 (A) the approval process for a guarantor or 

2 an aggregator established under subtitle B of 

3 title III; 

4 (B) its general supervisory and examina5 tion authorities under subtitle B of title III; or 

6 (C) information collected under this section, 

7 section 501, or section 208. 

8 (2) RULE OF CONSTRUCTION.—Nothing in this 

9 subsection shall prevent the imposition of the variable 

10 incentive-based fees authorized in section 501 nor 

11 shall it exempt covered entities from compliance with 

12 the Fair Housing Act (42 U.S.C. 3601 et seq.) and 

13 the Equal Credit Opportunity Act (15 U.S.C. 1691 et 

14 seq.) as required in section 408(d). 

15 (3) CONSISTENCY WITH SAFETY AND SOUND16 NESS.—The Corporation shall take appropriate meas17 ures designed to ensure that the requirements under 

18 this section are implemented in a manner consistent 

19 with safety and soundness principles. 

20 SEC. 211. OFFICE OF TAXPAYER PROTECTION. 

21 (a) ESTABLISHMENT.—The Corporation shall establish 

22 an Office of Taxpayer Protection whose functions shall in23 clude the responsibilities set forth under subsection (b). 

24 (b) RESPONSIBILITIES.— 


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1 (1) STUDY ON MARKET CONCENTRATION AND

2 THE IMPACT OF THE FMIC GUARANTEE.—The Office 

3 of Taxpayer Protection shall, on a semi-annual basis, 

4 conduct a study and submit to the Committee on 

5 Banking, Housing, and Urban Affairs of the Senate 

6 and the Committee on Financial Services of the 

7 House of Representatives a report on— 

8 (A) market concentration in the secondary 

9 mortgage markets, including the exposure of the 

10 Mortgage Insurance Fund to the top 10 largest 

11 approved aggregators and approved guarantors, 

12 as measured by the total outstanding principal 

13 balance at origination of eligible single-family 

14 mortgage loans collateralizing single-family cov15 ered securities for which such aggregator or 

16 guarantor has obtained insurance provided 

17 under this Act in the previous 6 months; 

18 (B) the general state of underwriting stand19 ards in the origination of eligible single-family 

20 mortgage loans and the effect of insurance pro21 vided under this Act on such underwriting 

22 standards; 

23 (C) whether the insurance provided under 

24 this Act produces a subsidy to any approved en25 tity or approved entities; 


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1 (D) a comparison of the treatment in the 

2 secondary mortgage markets of mortgage-backed 

3 securities guaranteed by the Government Na4 tional Mortgage Association and single-family 

5 covered securities insured under this Act, which 

6 shall include— 

7 (i) a discussion of the characteristics 

8 of— 

9 (I) mortgage loans collateralizing 

10 mortgage-backed securities guaranteed 

11 by the Government National Mortgage 

12 Association; and 

13 (II) eligible single-family mort14 gage loans collateralizing single-family 

15 covered securities insured under this 

16 Act; and 

17 (ii) an analysis of any actions taken 

18 in the secondary mortgage markets to ma19 nipulate the guarantee provided by the Gov20 ernment National Mortgage Association and 

21 the insurance provided under this Act to the 

22 advantage of the secondary mortgage mar23 kets; and 

24 (E) what steps the Corporation has taken to 

25 minimize any potential long-term costs to the 


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1 taxpayers and the Mortgage Insurance Fund re2 lating to risks identified in subparagraphs (A) 

3 through (D). 

4 (2) ANNUAL REPORT ON TAXPAYER PROTECTION

5 AND THE EXPOSURE OF THE MORTGAGE INSURANCE

6 FUND.— 

7 (A) IN GENERAL.—The Office of Taxpayer 

8 Protection shall, on an annual basis, submit a 

9 report to the Committee on Banking, Housing, 

10 and Urban Affairs of the Senate and the Com11 mittee on Financial Services of the House of 

12 Representatives containing the information re13 quired under subparagraph (B). 

14 (B) REQUIRED CONTENT.—The report re15 quired under subparagraph (A) shall— 

16 (i) include an analysis of the adequacy 

17 of— 

18 (I) the first loss position required 

19 under this Act, including the suffi20 ciency of any permissible risk-sharing 

21 or risk mitigation permitted as a sub22 stitute for equity capital intended to 

23 cover the initial credit losses on a cov24 ered security prior to use of any 

25 amounts in the Mortgage Insurance 


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1 Fund, the ability of the first loss posi2 tion to absorb credit loss on covered se3 curities, and to protect taxpayers; and 

4 (II) the performance of eligible 

5 single-family mortgage loans 

6 collateralizing single-family covered se7 curities insured under this Act based 

8 upon current underwriting standards 

9 and how that performance differs from 

10 the performance of noneligible mort11 gage loans based upon the under12 writing standards for such noneligible 

13 mortgage loans, including with respect 

14 to— 

15 (aa) debt to income ratio; 

16 (bb) loan to value ratios; 

17 (cc) credit history; 

18 (dd) loan documentation; 

19 (ee) occupancy status; 

20 (ff) credit enhancements; 

21 (gg) housing counseling by a 

22 HUD-approved housing coun23 seling agency; 

24 (hh) loan payments; 


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1 (ii) the purpose of the loan, 

2 such as to refinance or purchase a 

3 home; 

4 (jj) the type of loan product, 

5 such as a 30-year fixed interest 

6 rate mortgage loan, a 15-year 

7 fixed interest rate mortgage loan, 

8 or an adjustable interest rate 

9 mortgage loan; 

10 (kk) the mortgage loan origi11 nation channel; and 

12 (ll) such other underwriting 

13 criteria that would be useful to 

14 the Director of Taxpayer Protec15 tion; and 

16 (ii) provide recommendations for such 

17 legislative, regulatory, or administrative ac18 tions to— 

19 (I) address any need to further 

20 limit overexposure of the Mortgage In21 surance Fund to any 1 approved enti22 ty or business practice; 

23 (II) foster and encourage a robust 

24 private secondary mortgage market for 

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1 gage-backed securities that are not 

2 guaranteed by the Government Na3 tional Mortgage Association; and 

4 (III) assist the Corporation in 

5 protecting taxpayers, including a rec6 ommendation as to whether a counter7 cyclical increase of the reserve ratio of 

8 the Mortgage Insurance Fund or of the 

9 capital standards required of indi10 vidual approved guarantors is nec11 essary to protect taxpayers. 

12 (3) ANNUAL REPORT ON SYSTEM-WIDE LEVER13 AGE.—The Office of Taxpayer Protection shall, on an 

14 annual basis, submit to the Committee on Banking, 

15 Housing, and Urban Affairs of the Senate and the 

16 Committee on Financial Services of the House of Rep17 resentatives a report on system-wide leverage in the 

18 secondary mortgage market. 

19 (4) ANNUAL REPORT ON EARLY PAYMENT DE20 FAULTS.—The Office of Taxpayer Protection shall, on 

21 an annual basis, submit to the Committee on Bank22 ing, Housing, and Urban Affairs of the Senate and 

23 the Committee on Financial Services of the House of 

24 Representatives a report on early payment defaults 

25 on eligible single-family mortgage loans for the preVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00241 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 ceding year, which shall include any eligible single2 family mortgage loan that becomes delinquent or that 

3 is in default within 24 months of the origination of 

4 the loan. 

5 (5) INCLUSION IN ANNUAL REPORT.—The Cor6 poration shall include the reports required under 

7 paragraphs (2) and (3) in the annual report required 

8 under section 206. 

9 (6) RELIANCE ON PUBLIC DATA.—In preparing 

10 each report required under this section, the Office of 

11 Taxpayer Protection— 

12 (A) shall use, to the maximum extent prac13 ticable, publicly available data and data other14 wise collected under this Act; and 

15 (B) shall not include or review any con16 fidential information or information collected by 

17 the Corporation as part of its supervisory or ex18 amination authorities that is confidential. 

19 TITLE III—DUTIES AND 

20 RESPONSIBILITIES OF THE FMIC 

21 Subtitle A—Duties and Authorities 

22 SEC. 301. DUTIES AND RESPONSIBILITIES. 

23 (a) DUTIES.—The principal duties of the Corporation 

24 shall be to— 


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1 (1) carry out this Act in a manner that fulfills 

2 the purposes of the Corporation as described in sec3 tion 201(b); 

4 (2) minimize any potential long-term cost to the 

5 taxpayer, including through the use of the Mortgage 

6 Insurance Fund, the assessment of insurance fees, and 

7 the approval of approved entities and credit risk8 sharing mechanisms; 

9 (3) facilitate fair access to the secondary mort10 gage market for small mortgage lenders originating 

11 eligible single-family and multifamily mortgage 

12 loans, including through the establishment, approval, 

13 and oversight of small lender mutuals; 

14 (4) ensure integrity and discipline in the mort15 gage market, particularly by monitoring the safety 

16 and soundness of regulated entities and approved en17 tities; 

18 (5) ensure that approved entities maintain the 

19 capacity to further the requirements of the Corpora20 tion pursuant to section 201(b)(5) and that approved 

21 guarantors, approved multifamily guarantors, and 

22 approved aggregators are in compliance with section 

23 210(a)(3); 

24 (6) promote the standardization of the secondary 

25 mortgage market through the use of uniform 


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1 securitization agreements, servicing agreements, and 

2 the Securitization Platform; 

3 (7) increase transparency in single-family and 

4 multifamily mortgage markets, including through the 

5 National Mortgage Database; and 

6 (8) ensure continued, widespread availability of 

7 an affordable, long-term, fixed rate, prepayable mort8 gage, such as a 30-year fixed rate mortgage. 

9 (b) SCOPE OF AUTHORITY.—The authority of the Cor10 poration shall include the authority to exercise such inci11 dental powers as may be necessary or appropriate to fulfill 

12 the duties and responsibilities of the Corporation set forth 

13 in this Act. 

14 (c) DELEGATION OF AUTHORITY.—The Board of Di15 rectors may delegate to any duly authorized employee or 

16 representative any power vested in the Corporation by law. 

17 SEC. 302. STANDARDS FOR CREDIT RISK-SHARING MECHA18 NISMS. 

19 (a) APPROVAL.— 

20 (1) AUTHORITY.—The Corporation shall develop, 

21 adopt, and publish, after notice and comment, stand22 ards for the consideration and, as appropriate, the 

23 approval of credit risk-sharing mechanisms that shall 

24 require that the first loss position of private market 

25 holders on single-family covered securities is— 


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1 (A) adequate to cover losses that might be 

2 incurred in a period of economic stress, includ3 ing national and regional home price declines, 

4 such as those observed during moderate to severe 

5 recessions in the United States; and 

6 (B) not less than 10 percent of the principal 

7 or face value of the single-family covered security 

8 at the time of issuance. 

9 (2) FRAUD PROHIBITION.— 

10 (A) PROHIBITION.—It shall be unlawful for 

11 any person to intentionally create and issue any 

12 instrument or security as a first loss position on 

13 a single-family covered security that such person 

14 knows or in the exercise of reasonable care should 

15 have known does not satisfy the requirements of 

16 this section. 

17 (B) PENALTY.—Violations of subparagraph 

18 (A) shall be punishable in accordance with sec19 tion 1343 of title 18, United States Code. 

20 (b) APPROVAL OF CREDIT RISK-SHARING MECHA21 NISMS.— 

22 (1) CONSIDERATIONS FOR APPROVAL OF VARIOUS

23 MECHANISMS.—In approving credit risk-sharing 

24 mechanisms under subsection (a), the Corporation 

25 shall— 


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1 (A) consider proposals that include credit2 linked structures or other instruments that are 

3 designed to absorb credit losses on single-family 

4 covered securities; 

5 (B) consider any credit risk-sharing mecha6 nisms undertaken by the enterprises; 

7 (C) ensure that the first loss position is 

8 fully funded to meet the requirements of sub9 section (a)(1)(B); 

10 (D) ensure that each type of proposed mech11 anism— 

12 (i) enables the Corporation to verify 

13 that the first loss position is fully funded; 

14 (ii) minimizes any potential long-term 

15 cost to the taxpayer; 

16 (iii) accommodates the availability of 

17 mortgage credit on equal and transparent 

18 terms in the secondary mortgage market 

19 for— 

20 (I) small mortgage lenders; and 

21 (II) lenders from all geographic 

22 locations, including rural locations; 

23 (iv) allows for broad availability of 

24 mortgage credit and secondary mortgage 

25 market financing through fluctuations in 


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1 the business cycle for eligible single-family 

2 lending across all— 

3 (I) regions; 

4 (II) localities; 

5 (III) institutions; 

6 (IV) property types, including 

7 housing serving renters; and 

8 (V) eligible borrowers; 

9 (v) fulfills the requirements under sec10 tion 314 with respect to loan modifications 

11 and foreclosure prevention; 

12 (vi) does not prevent the securitization 

13 of refinanced or modified eligible single14 family mortgage loans within single-family 

15 covered securities during a period when the 

16 authority under section 305(i) is exercised; 

17 (vii) does not diminish market liquid18 ity and resiliency; 

19 (viii) does not prevent the refinancing 

20 of underwater eligible single-family mort21 gage loans; and 

22 (ix) does not present an unnecessary 

23 risk to the Mortgage Insurance Fund; 

24 (E) consider whether the approval of any 

25 credit risk-sharing mechanism will impair the 


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1 operation and liquidity of forward market execu2 tions for eligible single-family mortgage loans 

3 and single-family covered securities, such as the 

4 To-Be-Announced market, taking into consider5 ation other risk-sharing options available to 

6 market participants; and 

7 (F) take necessary steps to prevent abuse 

8 and deceptive practices in the use of the credit 

9 risk-sharing mechanisms, including by— 

10 (i) creating appropriate standards re11 lating to— 

12 (I) the vintages or categories of 

13 covered securities that are referenced by 

14 a credit risk-sharing mechanism; 

15 (II) standardization of the terms 

16 and features of credit risk-sharing 

17 structures; and 

18 (III) measures that prevent the 

19 duplicative sale by a guarantor of the 

20 same mortgage credit risk in the same 

21 pool of eligible single-family mortgage 

22 loans; and 

23 (ii) requiring additional disclosures 

24 and affirmative representations that must 


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1 be made by entities that create and issue 

2 credit risk-sharing mechanisms. 

3 (2) NOTICE AND PUBLICATION.—The Corpora4 tion shall— 

5 (A) provide prompt notice to any person 

6 seeking approval for a credit risk-sharing mecha7 nism of the approval or denial of that credit 

8 risk-sharing mechanism; and 

9 (B) make available detailed information re10 garding approved mechanisms on the website of 

11 the Corporation. 

12 (3) REVIEW OF APPROVED CREDIT RISK-SHARING

13 MECHANISMS.— 

14 (A) AUTHORITY TO SUSPEND.—The Cor15 poration may, from time to time and in its dis16 cretion— 

17 (i) conduct reviews of approved credit 

18 risk-sharing mechanisms to determine 

19 whether such credit risk-sharing mecha20 nisms continue to satisfy the considerations 

21 for approval under paragraph (1); 

22 (ii) assess the functioning of the for23 ward market for eligible single-family mort24 gage loans and single-family covered securi25 ties, including the To-Be-Announced marVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00249 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 ket, to determine whether any approved 

2 credit risk-sharing mechanism has adversely 

3 affected the liquidity or resiliency of such 

4 market; and 

5 (iii) suspend the approval of— 

6 (I) any credit risk-sharing mecha7 nism that it determines does not sat8 isfy the considerations for approval 

9 under paragraph (1); or 

10 (II) any credit risk-sharing mech11 anism that it determines has adversely 

12 affected the liquidity or resiliency of 

13 the forward market for eligible single14 family mortgage loans and single-fam15 ily covered securities, including the To16 Be-Announced market. 

17 (B) RECONSIDERATION.— 

18 (i) DEVELOPMENT OF EXPEDITED

19 PROCESS.—The Corporation shall develop 

20 an expedited process for the reinstatement of 

21 the approval of any credit risk-sharing 

22 mechanism that is suspended under sub23 paragraph (A)(iii). 

24 (ii) REVISION OF MECHANISM.—If a 

25 credit risk-sharing mechanism is suspended 


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1 under subparagraph (A)(iii), the credit 

2 risk-sharing mechanism may be adapted or 

3 revised, as necessary, for reconsideration for 

4 reinstatement of the approval of the credit 

5 risk-sharing mechanism under the expedited 

6 process developed under clause (i). 

7 (C) NO EFFECT ON EXISTING MECHA8 NISMS.—The suspension of the approval of any 

9 credit risk-sharing mechanism under subpara10 graph (A)(iii) shall have no effect on the status 

11 of single-family covered securities and related in12 struments using the credit risk-sharing mecha13 nism that were issued prior to the suspension. 

14 (4) ADDITIONAL CREDIT RISK-SHARING MECHA15 NISMS.— 

16 (A) APPROVAL.—In addition to credit risk17 sharing mechanisms approved by the Corpora18 tion under subsection (a), the Corporation shall 

19 consider and may approve additional fully-fund20 ed credit risk-sharing mechanisms that— 

21 (i) may be employed by an approved 

22 guarantor to manage the credit risk relating 

23 to guarantees provided for single-family 

24 covered securities; and 


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1 (ii) do not represent the first loss posi2 tion with respect to single-family covered se3 curities. 

4 (B) RULE OF CONSTRUCTION.—Nothing in 

5 this paragraph shall be construed to limit an ap6 proved guarantor from engaging in other forms 

7 of risk-sharing or risk mitigation using mecha8 nisms that have not been considered or approved 

9 by the Corporation. 

10 (5) REPORTS.— 

11 (A) IN GENERAL.—Not later than 1 year 

12 after the agency transfer date, and annually 

13 thereafter until the system certification date, the 

14 Corporation shall submit a report to the Com15 mittee on Banking, Housing, and Urban Affairs 

16 of the Senate and the Committee on Financial 

17 Services of the House of Representatives that— 

18 (i) discusses each credit risk-sharing 

19 mechanism that the Chairperson considered 

20 in carrying out the requirements of this sec21 tion; 

22 (ii) describes how the operation and 

23 execution of each approved credit risk-shar24 ing mechanism fulfills the requirements of 

25 this section; and 


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1 (iii) explains how the Corporation ar2 rived at the determinations made under 

3 clause (ii), including a discussion of the 

4 data considered. 

5 (B) SUBSEQUENT REPORTS.—On the system 

6 certification date and annually thereafter, the 

7 Corporation shall publish in the Federal Register 

8 a list of the credit risk-sharing mechanisms that 

9 the Corporation approved or suspended, address10 ing the identical concerns set forth under clauses 

11 (i) through (iii) of subparagraph (A) and, with 

12 respect to any suspension, the considerations 

13 under paragraph (1) that are no longer satisfied. 

14 (C) MULTIFAMILY REPORTS.—The Corpora15 tion shall include in the reports prepared under 

16 subparagraphs (A) and (B) a description of the 

17 credit risk-sharing mechanisms approved by the 

18 Corporation for multifamily guarantors pursu19 ant to section 703. 

20 (c) COLLATERAL DIVERSIFICATION STANDARDS.—The 

21 Corporation shall establish standards, after notice and com22 ment, for the appropriate minimum level of diversification 

23 for eligible single-family mortgage loans that collateralize 

24 single-family covered securities that are issued subject to an 

25 approved credit risk-sharing mechanism in order to reduce 


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1 the credit risk such single-family covered securities could 

2 pose to the Mortgage Insurance Fund. 

3 (d) RULE OF CONSTRUCTION.—Nothing in this section 

4 shall be construed to require the Corporation to approve 

5 any credit risk-sharing mechanism. 

6 (e) APPLICABILITY OF THE COMMODITY EXCHANGE

7 ACT AND SECURITIES ACT OF 1933.— 

8 (1) EXEMPTION FROM THE COMMODITY EX9 CHANGE ACT; PRIOR CONSULTATION REQUIRED.— 

10 (A) EXEMPTION.—No counterparty that en11 ters into a swap, as that term is defined in sec12 tion 1a of the Commodity Exchange Act (7 

13 U.S.C. 1a), for purposes of structuring any cred14 it risk-sharing mechanism that is approved by 

15 the Corporation pursuant to this section, which 

16 credit risk-sharing mechanism is designed to be 

17 used or is used by a private market holder to as18 sume losses and to reduce the specific risks aris19 ing from losses realized under such credit risk20 sharing mechanism associated with any single21 family covered security insured in accordance 

22 with section 303 or section 305, shall be deemed, 

23 by reason of such swap transaction, to be a com24 modity pool, as that term is defined in section 


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1 1a of the Commodity Exchange Act (7 U.S.C. 

2 1a). 

3 (B) PRIOR CONSULTATION REQUIRED.—Be4 fore approving any credit risk-sharing mecha5 nism that would be exempt from the Commodity 

6 Exchange Act pursuant to subparagraph (A), the 

7 Corporation shall consult with the Commodity 

8 Futures Trading Commission. 

9 (2) EXEMPTION FROM SECTION 27B OF THE SE10 CURITIES ACT OF 1933; PRIOR CONSULTATION RE11 QUIRED.— 

12 (A) EXEMPTION.—Any credit risk-sharing 

13 mechanism that is approved by the Corporation 

14 pursuant to this section, which credit risk-shar15 ing mechanism is designed to be used or is used 

16 by a private market holder to assume losses and 

17 to reduce the specific risks arising from losses re18 alized under such credit risk-sharing mechanism 

19 associated with any single-family covered secu20 rity insured in accordance with section 303 or 

21 section 305, shall be exempt from section 27B of 

22 the Securities Act of 1933 (15 U.S.C. 77z-2a). 

23 (B) PRIOR CONSULTATION REQUIRED.—Be24 fore approving any credit risk-sharing mecha25 nism that would be exempt from section 27B of 


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1 the Securities Act of 1933 pursuant to subpara2 graph (A), the Corporation shall consult with the 

3 Securities and Exchange Commission. 

4 SEC. 303. INSURANCE; MORTGAGE INSURANCE FUND. 

5 (a) AUTHORITY.—The Corporation shall, in exchange 

6 for a fee in accordance with subsection (e)(8), insure the 

7 payment of principal and interest on a covered security 

8 with respect to any failure to pay on such covered security 

9 subject to the requirements of this section. 

10 (b) TERMS AND CONDITIONS.— 

11 (1) IN GENERAL.—The Corporation shall, by reg12 ulation, establish terms and conditions for the provi13 sion of insurance under this Act. 

14 (2) SINGLE-FAMILY.—The terms and conditions 

15 required to be established under paragraph (1) shall, 

16 for single-family covered securities, include terms and 

17 conditions that ensure— 

18 (A) eligible single-family mortgage loans 

19 collateralizing single-family covered securities 

20 have been delivered to the Platform; and 

21 (B) with respect to each single-family cov22 ered security, either— 

23 (i) private market holders have taken a 

24 first loss position that satisfies the require25 ments of section 302; or 


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1 (ii) an approved guarantor has pro2 vided a guarantee in satisfaction of the re3 quirements of section 311. 

4 (3) MULTIFAMILY.—The terms and conditions 

5 required to be established under paragraph (1) shall, 

6 for multifamily covered securities, include terms and 

7 conditions that ensure, with respect to each multi8 family covered security, that an approved multi9 family guarantor has provided a guarantee in satis10 faction of the requirements of section 703. 

11 (c) CASH PAYMENTS; CONTINUED OPERATIONS.—The 

12 Corporation shall facilitate the timely and unconditional 

13 payment of principal and interest on covered securities in14 sured under this Act by paying, in cash when due, any 

15 shortfalls in principal and interest due on the covered secu16 rity, and continuing to charge and collect any fees for the 

17 provision of insurance (in accordance with subsection 

18 (e)(8)) relating to the covered security in the event of any 

19 losses that may be incurred (1) in excess of a payment de20 fault on the covered security that exceeds the first loss posi21 tion assumed by a private market holder, (2) in the case 

22 of a covered security that is guaranteed by an approved 

23 guarantor or approved multifamily guarantor as a result 

24 of the insolvency of the guarantor, or (3) upon the failure 

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1 trator for the covered security funds in amounts necessary 

2 to make timely payment of principal and interest due on 

3 the covered security. 

4 (d) COST RECOVERY.—In the event the Corporation 

5 makes a payment on a covered security based on subsection 

6 (c)(3), the Corporation shall recover such amount paid, and 

7 reasonable costs and expenses, from the servicer or guar8 antor. 

9 (e) MORTGAGE INSURANCE FUND.— 

10 (1) ESTABLISHMENT.—On the agency transfer 

11 date, there shall be established the Mortgage Insurance 

12 Fund, which the Corporation shall— 

13 (A) maintain and administer; 

14 (B) use to carry out the insurance functions 

15 authorized under this Act, including any func16 tion or action authorized under section 305; and 

17 (C) invest in accordance with the require18 ments of paragraph (10). 

19 (2) DEPOSITS.—The Mortgage Insurance Fund 

20 shall be credited with any— 

21 (A) fee amounts required to be deposited in 

22 the Fund under this section; 

23 (B) amounts earned on investments pursu24 ant to paragraph (10); 


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1 (C) assessment amounts authorized to be de2 posited into the Fund under section 405(b); and 

3 (D) assessment amounts required to be de4 posited into the Fund under section 608(c). 

5 (3) FEES FOR SINGLE-FAMILY AND MULTIFAMILY

6 COVERED SECURITIES.—In determining the amount 

7 of any fee to be charged by the Corporation under this 

8 section, the Corporation shall charge a separate fee for 

9 single-family covered securities and multifamily cov10 ered securities, as appropriate for each asset class. 

11 (4) SEPARATE ACCOUNTING REQUIRED.—The 

12 Corporation shall keep and maintain separate ac13 counting for deposits in the Mortgage Insurance Fund 

14 related to fee amounts charged and collected for the 

15 insurance of single-family covered securities and mul16 tifamily covered securities. 

17 (5) FIDUCIARY RESPONSIBILITY.—The Corpora18 tion has the responsibility to ensure that the Mortgage 

19 Insurance Fund remains financially sound. 

20 (6) USE AND TREATMENT OF AMOUNTS IN THE

21 FUND.— 

22 (A) IN GENERAL.—The Mortgage Insurance 

23 Fund shall be solely available to the Corporation 

24 for use by the Corporation to carry out the funcVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00259 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 tions authorized by this Act, for the expenses of 

2 the Corporation, and for— 

3 (i) compensation of the employees of 

4 the Corporation; 

5 (ii) purposes of— 

6 (I) funding the CSP; and 

7 (II) establishing the 

8 Securitization Platform under section 

9 321, multifamily subsidiaries under 

10 section 701, the initial Small Lender 

11 Mutual under section 315, and any 

12 other entity authorized by this Act that 

13 facilitates an orderly transition to the 

14 new housing finance system; and 

15 (iii) covering all other expenses of the 

16 Corporation. 

17 (B) PROHIBITION.—The Mortgage Insur18 ance Fund may not be used or otherwise diverted 

19 to cover any other expense of the Federal Govern20 ment. 

21 (C) EXEMPTION FROM APPORTIONMENT.— 

22 Notwithstanding any other provision of law, 

23 amounts in the Mortgage Insurance Fund shall 

24 not be subject to apportionment for the purposes 


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1 of chapter 15 of title 31, United States Code, or 

2 under any other authority. 

3 (D) NOT GOVERNMENT FUNDS.—Amounts 

4 in the Mortgage Insurance Fund shall not be 

5 construed to be Government or public funds or 

6 appropriated money. 

7 (7) RESERVE RATIO GOALS FOR MORTGAGE IN8 SURANCE FUND.—The Corporation shall— 

9 (A) endeavor to ensure that the Mortgage 

10 Insurance Fund attains a reserve ratio— 

11 (i) of 1.25 percent of the sum of the 

12 outstanding principal balance of the covered 

13 securities for which insurance is being pro14 vided under this title within 5 years of the 

15 system certification date; and 

16 (ii) of 2.50 percent of the sum of the 

17 outstanding principal balance of the covered 

18 securities for which insurance is being pro19 vided under this title within 10 years of the 

20 system certification date; and 

21 (B) after the expiration of the period re22 ferred to in subparagraph (A)(ii), endeavor to 

23 ensure that the Mortgage Insurance Fund main24 tains a reserve ratio of not less than 2.50 percent 

25 of the sum of the outstanding principal balance 


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1 of the covered securities for which insurance is 

2 being provided under this title. 

3 (8) MAINTENANCE OF RESERVE RATIO; ESTAB4 LISHMENT OF FEES.— 

5 (A) ESTABLISHMENT OF FEES.—The Cor6 poration shall charge and collect a fee, and may 

7 in its discretion increase or decrease such fee, in 

8 connection with any insurance provided under 

9 this title to— 

10 (i) achieve and maintain the reserve 

11 ratio goals established under paragraph (7); 

12 and 

13 (ii) fund the operations of the Corpora14 tion. 

15 (B) FEE CONSIDERATIONS.—In establishing 

16 fees under subparagraph (A), the Corporation 

17 shall consider— 

18 (i) the expected operating expenses of 

19 the Mortgage Insurance Fund; 

20 (ii) the risk of loss to the Mortgage In21 surance Fund in carrying out the require22 ments under this Act; 

23 (iii) the risk presented by, and the loss 

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1 vided on the pool of eligible mortgage loans 

2 collateralizing the covered security to be in3 sured under this title; 

4 (iv) economic conditions generally af5 fecting the mortgage markets; 

6 (v) the extent to which the reserve ratio 

7 of the Mortgage Insurance Fund met— 

8 (I) the reserve ratio set for the 

9 preceding 12-month period; or 

10 (II) the reserve ratio goals estab11 lished in paragraph (7); and 

12 (vi) any other factors that the Corpora13 tion determines appropriate. 

14 (C) FEE UNIFORMITY.—The fee required 

15 under subparagraph (A)— 

16 (i) except as provided in subparagraph 

17 (D), shall be set at a uniform amount ap18 plicable to all institutions purchasing in19 surance under this title; 

20 (ii) may not vary— 

21 (I) by geographic location; or 

22 (II) by the size of the institution 

23 to which the fee is charged; and 

24 (iii) may not be based on the volume 

25 of insurance to be purchased. 


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1 (D) SEPARATE AND DISTINCT FEES BASED

2 ON CREDIT RISK-SHARING MECHANISMS.—Noth3 ing in subparagraph (C) shall prohibit or be 

4 construed to prohibit the Corporation from 

5 charging separate and distinct fees under this 

6 paragraph based on the type or form of credit 

7 risk-sharing mechanism applicable to the covered 

8 security to be insured under this title. 

9 (E) DEPOSIT INTO MORTGAGE INSURANCE

10 FUND.—Any fee amounts collected under this 

11 paragraph shall be deposited in the Mortgage In12 surance Fund. 

13 (9) FULL FAITH AND CREDIT.—The full faith 

14 and credit of the United States is pledged to the pay15 ment of all amounts from the Mortgage Insurance 

16 Fund which may be required to be paid under any 

17 insurance provided under this title. 

18 (10) INVESTMENTS.— 

19 (A) IN GENERAL.—The Board of Directors 

20 may request the Secretary of the Treasury to in21 vest such portion of amounts in the Mortgage In22 surance Fund that, in the judgment of the 

23 Board, is not required to meet the current needs 

24 of the Corporation. 


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1 (B) ELIGIBLE INVESTMENTS.—Pursuant to 

2 a request under subparagraph (A), the Secretary 

3 of the Treasury shall invest such portions in ob4 ligations of the United States with maturities 

5 suitable to the needs of the Corporation, as deter6 mined by the Board, and bearing interest at a 

7 rate determined by the Secretary of the Treas8 ury, taking into consideration, at the time of the 

9 investment, market yields on outstanding mar10 ketable obligations of the United States of com11 parable maturity. 

12 (C) PROHIBITED INVESTMENTS.—Amounts 

13 in the Mortgage Insurance Fund may not be in14 vested in any— 

15 (i) covered security insured under this 

16 title; or 

17 (ii) mortgage-backed security issued by 

18 the enterprises. 

19 (f) MANDATORY LOSS REVIEW BY THE INSPECTOR

20 GENERAL OF THE FEDERAL MORTGAGE INSURANCE COR21 PORATION.— 

22 (1) IN GENERAL.—If the Mortgage Insurance 

23 Fund is required to make any payment of principal 

24 or interest, or both, on a covered security with respect 

25 to losses incurred on such covered security to any 


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1 holder of such covered security, the Inspector General 

2 of the Federal Mortgage Insurance Corporation 

3 shall— 

4 (A) review and make a written report to the 

5 Corporation regarding the decision of the Cor6 poration to insure such covered security and the 

7 supervision by the Corporation of all market 

8 participants involved in the creation, issuance, 

9 servicing, guarantee of, or insurance of such cov10 ered security, which shall— 

11 (i) ascertain why the covered security 

12 resulted in a loss to the Mortgage Insurance 

13 Fund; and 

14 (ii) make recommendations for pre15 venting any such loss in the future; and 

16 (B) provide a copy of the report required 

17 under subparagraph (A) to— 

18 (i) the Comptroller General of the 

19 United States; 

20 (ii) the appropriate Federal banking 

21 agency or State regulatory authority, as ap22 propriate, of any market participant in23 volved in the creation, issuance, servicing, 

24 guarantee of, or insurance of such covered 

25 security; and 


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1 (iii) the Committee on Banking, Hous2 ing, and Urban Affairs of the Senate and 

3 the Committee on Financial Services of the 

4 House of Representatives. 

5 (2) DEADLINE FOR REPORT.—The Inspector 

6 General of the Federal Mortgage Insurance Corpora7 tion shall comply with paragraph (1) as expeditiously 

8 as possible, but in no event shall the report required 

9 under paragraph (1) be submitted later than 6 

10 months after the date on which the loss was incurred. 

11 (3) PUBLIC DISCLOSURE REQUIRED.— 

12 (A) IN GENERAL.—The Corporation shall 

13 disclose any report on losses required under this 

14 subsection, upon request under section 552 of 

15 title 5, United States Code, without excising— 

16 (i) any portion under section 552(b)(5) 

17 of that title; or 

18 (ii) any information under paragraph 

19 (4) (other than trade secrets) or paragraph 

20 (8) of section 552(b) of that title. 

21 (B) EXCEPTION.—Subparagraph (A) does 

22 not require the Corporation to disclose the name 

23 of any holder of the covered security, or informa24 tion from which the identity of such a person 

25 could reasonably be ascertained. 


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1 (4) REVIEW BY COMPTROLLER GENERAL.—The 

2 Comptroller General of the United States shall, under 

3 such conditions as the Comptroller General deter4 mines to be appropriate, review any report made 

5 under paragraph (1) and recommend to the Corpora6 tion improvements in the supervision of market par7 ticipants. 

8 SEC. 304. LOAN LIMITS; HOUSING PRICE INDEX. 

9 (a) ESTABLISHMENT.—The Corporation shall establish 

10 limitations governing the maximum original principal ob11 ligation of eligible single-family mortgage loans that may 

12 collateralize a covered security to be insured by the Cor13 poration under this title. 

14 (b) CALCULATION OF AMOUNT.—The limitation set 

15 forth under subsection (a) shall be calculated with respect 

16 to the total original principal obligation of the eligible sin17 gle-family mortgage loan and not merely with respect to 

18 the amount insured by the Corporation. 

19 (c) MAXIMUM LIMITS.— 

20 (1) IN GENERAL.—Except as provided in para21 graph (2), the maximum limitation amount under 

22 this subsection shall not exceed $417,000 for a mort23 gage loan secured by a 1-family residence, for a mort24 gage loan secured by a 2-family residence the limit 

25 shall equal 128 percent of the limit for a mortgage 


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1 loan secured by a 1-family residence, for a mortgage 

2 loan secured by a 3-family residence the limit shall 

3 equal 155 percent of the limit for a mortgage loan se4 cured by a 1-family residence, and for a mortgage 

5 loan secured by a 4-family residence the limit shall 

6 equal 192 percent of the limit for a mortgage loan se7 cured by a 1-family residence, except that such max8 imum limitations shall be adjusted effective January 

9 1 of each year beginning after the effective date of this 

10 Act, subject to the limitations in this paragraph. 

11 Each adjustment shall be made by adding to each 

12 such amount (as it may have been previously ad13 justed) a percentage thereof equal to the percentage 

14 increase, during the most recent 12-month or 4-quar15 ter period ending before the time of determining such 

16 annual adjustment, in the housing price index main17 tained by the Chairperson pursuant to subsection (d). 

18 If the change in such house price index during the 

19 most recent 12-month or 4-quarter period ending be20 fore the time of determining such annual adjustment 

21 is a decrease, then no adjustment shall be made for 

22 the next year, and the next upward adjustment shall 

23 take into account prior declines in the house price 

24 index, so that any adjustment shall reflect the net 

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1 ment. Declines in the house price index shall be accu2 mulated and then reduce increases until subsequent 

3 increases exceed prior declines. 

4 (2) HIGH-COST AREA LIMITS.—The limitations 

5 set forth in paragraph (1) may be increased by not 

6 more than 50 percent with respect to properties lo7 cated in Alaska, Guam, Hawaii, and the Virgin Is8 lands. Such foregoing limitations shall also be in9 creased, with respect to properties of a particular size 

10 located in any area for which 115 percent of the me11 dian house price for such size residence exceeds the 

12 limitation for such size residence set forth under 

13 paragraph (1), to the lesser of 150 percent of such 

14 limitation for such size residence or the amount that 

15 is equal to 115 percent of the median house price in 

16 such area for such size residence. 

17 (d) HOUSING PRICE INDEX.— 

18 (1) NATIONAL INDEX.—The Corporation shall es19 tablish and maintain a method of assessing a na20 tional average single-family house price for use in 

21 calculating the loan limits for eligible single-family 

22 mortgage loans under subsection (c), and other aver23 ages as the Corporation considers appropriate, in24 cluding— 


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1 (A) averages based on different geographic 

2 regions; and 

3 (B) an average for houses whose mortgage 

4 collateralized single-family covered securities. 

5 (2) CONSIDERATIONS.—In establishing the meth6 od described under subsection (a), the Corporation 

7 may take into consideration the data collected in car8 rying out the functions described under section 332, 

9 and such other data, existing house price indexes, and 

10 other measures as the Corporation considers appro11 priate. 

12 SEC. 305. AUTHORITY TO PROTECT TAXPAYERS IN UN13 USUAL AND EXIGENT MARKET CONDITIONS. 

14 (a) IN GENERAL.—If the Corporation, upon the writ15 ten agreement of the Chairman of the Board of Governors 

16 of the Federal Reserve System and the Secretary of the 

17 Treasury, and in consultation with the Secretary of Hous18 ing and Urban Development, determines that unusual and 

19 exigent circumstances have created or threaten to create an 

20 anomalous lack of mortgage credit availability within the 

21 single-family housing market, multifamily housing market, 

22 or entire United States housing market that could materi23 ally and severely disrupt the functioning of the housing fi24 nance system of the United States, the Corporation may, 

25 for a period of 6 months— 


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1 (1) provide insurance in accordance with section 

2 303 to any single-family covered security regardless of 

3 whether such security has satisfied the requirements of 

4 section 302; and 

5 (2) establish provisional standards for approved 

6 entities, notwithstanding any standard required 

7 under subtitle B or section 703, pursuant to section 

8 607. 

9 (b) CONSIDERATIONS.—In exercising the authority 

10 granted under subsection (a), the Corporation shall consider 

11 the severity of the conditions present in the housing markets 

12 and the risks presented to the Mortgage Insurance Fund in 

13 exercising such authority. 

14 (c) TERMS AND CONDITIONS.—Insurance provided 

15 under subsection (a) shall be subject to such additional or 

16 different limitations, restrictions, and regulations as the 

17 Corporation may prescribe. 

18 (d) BAILOUT STRICTLY PROHIBITED.—In exercising 

19 the authority granted under subsection (a), the Corporation 

20 may not— 

21 (1) provide aid to an approved entity or an af22 filiate of the approved entity, if such approved entity 

23 is in bankruptcy or any other Federal or State insol24 vency proceeding; or 


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1 (2) provide aid for the purpose of assisting a 

2 single and specific company to avoid bankruptcy or 

3 any other Federal or State insolvency proceeding. 

4 (e) NOTICE.—Not later than 7 days after authorizing 

5 insurance or establishing provisional standards under sub6 section (a), the Corporation shall submit to the Committee 

7 on Banking, Housing, and Urban Affairs of the Senate and 

8 the Committee on Financial Services of the House of Rep9 resentatives a report that includes— 

10 (1) the justification for the exercise of authority 

11 to provide such insurance or establish such provi12 sional standards; 

13 (2) evidence that unusual and exigent cir14 cumstances have created or threatened to create an 

15 anomalous lack of mortgage credit availability within 

16 the single-family housing market, multifamily hous17 ing market, or entire United States housing market 

18 that could materially and severely disrupt the func19 tioning of the housing finance system of the United 

20 States; and 

21 (3) evidence that failure to exercise such author22 ity would have undermined the safety and soundness 

23 of the housing finance system. 

24 (f) ADDITIONAL EXERCISE OF AUTHORITY.— 


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1 (1) IN GENERAL.—Subject to the limitation 

2 under subsection (g), the authority granted to the 

3 Corporation under subsection (a) may be exercised for 

4 2 additional 9-month periods within any given 3- 

5 year period, provided that the Corporation, upon the 

6 written agreement of the Chairman of the Board of 

7 Governors of the Federal Reserve System and the Sec8 retary of the Treasury, and in consultation with the 

9 Secretary of Housing and Urban Development— 

10 (A) determines— 

11 (i) for a second exercise of authority 

12 under subsection (a), by an affirmative vote 

of 2 13 ⁄3 or more of the Board of Directors then 

14 serving, that a second exercise of authority 

15 under subsection (a) is necessary; or 

16 (ii) for a third exercise of authority 

17 under subsection (a), by an affirmative vote 

of 2 18 ⁄3 or more of the Board of Directors then 

serving, and an affirmative vote of 2 19 ⁄3 or 

20 more of the Board of Governors of the Fed21 eral Reserve System then serving, that a 

22 third exercise of authority under this section 

23 is necessary; and 

24 (B) provides notice to Congress, as provided 

25 under subsection (e). 


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1 (2) ORDER OF EXERCISE OF AUTHORITY.—Any 

2 additional exercise of authority under this subsection 

3 may occur consecutively or non-consecutively. 

4 (g) LIMITATION.—The authority granted to the Cor5 poration under this section may not be exercised more than 

6 3 times in any given 3-year period, which 3-year period 

7 shall commence upon the initial exercise of authority under 

8 subsection (a). 

9 (h) NORMALIZATION AND REDUCTION OF RISK.—Fol10 lowing any exercise of authority under this section, the Cor11 poration shall— 

12 (1) establish a timeline for approved entities to 

13 meet the approval standards set forth in this Act; and 

14 (2) in a manner and pursuant to a timeline that 

15 will minimize losses to the Mortgage Insurance Fund, 

16 establish a program to either— 

17 (A) sell, in whole or in part, the first loss 

18 position on covered securities issued pursuant to 

19 this section to private market holders; or 

20 (B) transfer for value to approved entities, 

21 or work with approved entities to sell, in whole 

22 or in part, the first lost position on covered secu23 rities issued pursuant to this section. 

24 (i) AUTHORITY TO RESPOND TO SUSTAINED NATIONAL

25 HOME PRICE DECLINE.— 


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1 (1) AUTHORITY.—In the event of a significant 

2 decline of national home prices, in at least 2 consecu3 tive calendar quarters, the Corporation, by an affirmative vote of 2 4 ⁄3 or more of the Board of Directors then 

5 serving, may for a period of 6 months permit the 

6 transfer of guarantees of eligible mortgage loans that 

7 secure covered securities if such eligible mortgage 

8 loans are refinanced, regardless of the value of the un9 derlying collateral securing such eligible mortgage 

10 loans. 

11 (2) ADDITIONAL EXERCISE OF AUTHORITY.—The 

12 authority granted to the Corporation under para13 graph (1) may be exercised for additional 6-month 

14 periods, if upon each additional extension of such authority there is an affirmative vote of 2 15 ⁄3 or more of 

16 the Board of Directors then serving. 

17 (3) LIMITATION.—The Corporation shall not pro18 vide insurance under this section to any covered secu19 rity that includes mortgage loans that do not meet the 

20 definition of an eligible mortgage loan, as defined in 

21 this Act, except for mortgage loans refinanced from el22 igible mortgage loans in covered securities. 

23 (4) RULE OF CONSTRUCTION.—No provision in 

24 this section shall be construed as permitting the Cor25 poration to lower any other requirement related to the 


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1 requirements set forth under the definition of an eligi2 ble mortgage loan. 

3 SEC. 306. GENERAL POWERS. 

4 (a) CORPORATE POWERS.—The Federal Mortgage In5 surance Corporation shall have the power— 

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

7 which shall be judicially noticed; 

8 (2) to enter into, execute, and perform contracts, 

9 leases, cooperative agreements, or other transactions, 

10 on such terms as it may deem appropriate, with any 

11 agency or instrumentality of the United States, or 

12 with any political subdivision thereof, or with any 

13 person, firm, association, or corporation; 

14 (3) to execute, in accordance with its bylaws, all 

15 instruments necessary or appropriate in the exercise 

16 of any of its powers; 

17 (4) in its corporate name, to sue and to be sued, 

18 and to complain and to defend, in any court or tri19 bunal of competent jurisdiction, Federal or State, but 

20 no attachment, injunction, or other similar process, 

21 mesne or final, shall be issued against the property of 

22 the Corporation; 

23 (5) to conduct its business without regard to any 

24 qualification or similar statute in any State of the 

25 United States; 


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1 (6) to lease, purchase, or acquire any property, 

2 real, personal, or mixed, or any interest therein, to 

3 hold, rent, maintain, modernize, renovate, improve, 

4 use, and operate such property, and to sell, for cash 

5 or credit, lease, or otherwise dispose of the same, at 

6 such time and in such manner as and to the extent 

7 that it may deem necessary or appropriate; 

8 (7) to prescribe, repeal, and amend or modify, 

9 rules, regulations, or requirements governing the 

10 manner in which its general business may be con11 ducted; 

12 (8) to accept gifts or donations of services, or of 

13 property, real, personal, or mixed, tangible, or intan14 gible, in aid of any of its purposes; 

15 (9) to appoint and supervise personnel employed 

16 by the Corporation; 

17 (10) to establish and maintain divisions, units, 

18 or other offices within the Corporation, including 

19 those established in sections 207, 208, 209, and 211 

20 in order to carry out the responsibilities of this Act, 

21 and to satisfy the requirements of other applicable 

22 law; and 

23 (11) to manage the affairs of the Corporation 

24 and conduct the business of the Corporation, as nec25 essary. 


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1 (b) LITIGATION AUTHORITY.— 

2 (1) IN GENERAL.—In enforcing any provision of 

3 this Act, any regulation or order prescribed under 

4 this Act, or any other provision of law, rule, regula5 tion, or order, or in any other action, suit, or pro6 ceeding to which the Corporation is a party or in 

7 which the Corporation is interested, and in the ad8 ministration of conservatorships and receiverships, 

9 the Corporation may act in the Corporation’s own 

10 name and through attorneys or other agents acting on 

11 behalf of the Corporation. 

12 (2) SUBJECT TO SUIT.—Except as otherwise pro13 vided by law, the Corporation shall be subject to suit 

14 (other than suits for claims for money damages) by 

15 a regulated entity or market participant with respect 

16 to any matter under this Act or any other applicable 

17 provision of law, rule, order, or regulation under this 

18 Act, in the United States district court for the judi19 cial district in which the regulated entity or market 

20 participant has its principal place of business, or in 

21 the United States District Court for the District of 

22 Columbia, and the Corporation may be served with 

23 process in the manner prescribed by the Federal Rules 

24 of Civil Procedure. 


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1 (c) EXPENDITURES.—Except as may be otherwise pro2 vided in this title, the Corporation shall determine the ne3 cessity for, and the character and amount of its obligations 

4 and expenditures, and the manner in which they shall be 

5 incurred, allowed, paid, and accounted for. 

6 (d) EXEMPTION FROM CERTAIN TAXES.—The Cor7 poration, including its franchise, capital, reserves, surplus, 

8 mortgage loans or other security holdings, and income shall 

9 be exempt from all taxation now or hereafter imposed by 

10 the United States, by any territory, dependency, or posses11 sion thereof, or by any State, county, municipality, or local 

12 taxing authority, except that any real property of the Cor13 poration shall be subject to State, county, municipal, or 

14 local taxation to the same extent according to its value as 

15 other real property is taxed. 

16 (e) EXCLUSIVE USE OF NAME.—No individual, asso17 ciation, partnership, or corporation, except the body cor18 porate named under section 201, shall hereafter use the 

19 words ‘‘Federal Mortgage Insurance Corporation’’ or any 

20 combination of such words, as the name or a part thereof 

21 under which such individual, association, partnership, or 

22 corporation shall do business. Violations of the foregoing 

23 sentence may be enjoined by any court of general jurisdic24 tion at the suit of the proper body corporate named under 

25 section 201. In any such suit, the plaintiff may recover any 


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1 actual damages flowing from such violation, and, in addi2 tion, shall be entitled to punitive damages (regardless of the 

3 existence or nonexistence of actual damages) of not exceed4 ing $1,000 for each day during which such violation is com5 mitted or repeated. 

6 (f) FISCAL AGENTS.—The Federal Reserve banks are 

7 authorized and directed to act as depositories, custodians, 

8 and fiscal agents for the Corporation, for its own account 

9 or as fiduciary, and such banks shall be reimbursed for such 

10 services in such manner as may be agreed upon, and the 

11 Corporation may itself act in such capacities, for its own 

12 account or as fiduciary, and for the account of others. 

13 (g) OTHER POWERS.—The Corporation is authorized 

14 to assess and collect fees on regulated entities and approved 

15 entities, including for applications, examinations, and 

16 other purposes, as authorized by this Act. 

17 (h) FEDERAL HOME LOAN BANK ASSESSMENT.—The 

18 Corporation shall have the authority to assess a fee on the 

19 Federal Home Loan Banks to cover the necessary costs re20 lated to supervising the Federal Home Loan Banks. The 

21 costs associated with the secondary market activities of the 

22 Federal Home Loan Banks pursuant to section 312 shall 

23 be covered by the fee charged pursuant to this subsection. 

24 (i) RULE OF CONSTRUCTION RELATED TO FAIR HOUS25 ING.—Nothing in this Act shall be construed as authorizing 


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1 the Corporation to waive, repeal, amend, or modify require2 ments relating to fair housing law, including those require3 ments under the Fair Housing Act (42 U.S.C. 3601 et seq.) 

4 and the Equal Credit Opportunity Act (15 U.S.C. 1691 et 

5 seq.). 

6 SEC. 307. EXEMPTIONS. 

7 (a) SECURITIES EXEMPT FROM SECURITIES AND EX8 CHANGE COMMISSION REGULATION.— 

9 (1) COVERED SECURITIES.— 

10 (A) IN GENERAL.—All securities insured or 

11 guaranteed by the Corporation shall, to the same 

12 extent as securities that are direct obligations of 

13 or obligations guaranteed as to principal or in14 terest by the United States, be deemed to be ex15 empt securities within the meaning of the laws 

16 administered by the Securities and Exchange 

17 Commission. 

18 (B) CONFORMING AMENDMENT.—The first 

19 sentence of section 3(a)(2) of the Securities Act 

20 of 1933 (15 U.S.C. 77c(a)(2)) is amended by in21 serting ‘‘or any security insured or guaranteed 

22 by the Federal Mortgage Insurance Corpora23 tion;’’ after ‘‘Federal Reserve bank;’’. 


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1 (2) CREDIT RISK-SHARING MECHANISMS.—Sec2 tion 27B(c) of the Securities Act of 1933 (15 U.S.C. 

3 77z-2a(c)) is amended— 

4 (A) in paragraph (1), by striking ‘‘or’’ at 

5 the end; 

6 (B) in paragraph (2), by striking the period 

7 at the end and inserting ‘‘; or’’; and 

8 (C) by adding at the end the following: 

9 ‘‘(3) purchases or sales of any asset-backed secu10 rity that is a credit risk-sharing mechanism approved 

11 by the Federal Mortgage Insurance Corporation in 

12 accordance with section 302 or section 703(c) of the 

13 Housing Finance Reform and Taxpayer Protection 

14 Act of 2014, which credit risk-sharing mechanism is 

15 designed to be used or is used, as determined by the 

16 Federal Mortgage Insurance Corporation, by a pri17 vate market holder to assume losses and to reduce the 

18 specific risks arising from losses realized under such 

19 credit risk-sharing mechanism associated with any 

20 pool of eligible mortgage loans that collateralizes a 

21 covered security insured in accordance with section 

22 303 or 305 of that Act.’’. 

23 (b) QRM EXEMPTION.—Section 15G(e) of the Securi24 ties Exchange Act of 1934 (15 U.S.C. 78o–11(e)) is amend25 ed— 


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1 (1) in paragraph (3)(B)— 

2 (A) by striking ‘‘Association, the’’ and in3 serting ‘‘Association and the’’; and 

4 (B) by striking ‘‘and the Federal home loan 

5 banks’’; and 

6 (2) by adding at the end the following: 

7 ‘‘(7) COVERED SECURITIES INSURED BY THE

8 FEDERAL MORTGAGE INSURANCE CORPORATION.— 

9 Notwithstanding any other provision of this section, 

10 the requirements of this section shall not apply to any 

11 covered security, as such term is defined under section 

12 2 of the Housing Finance Reform and Taxpayer Pro13 tection Act of 2014, insured or guaranteed by the Fed14 eral Mortgage Insurance Corporation or any institu15 tion that is subject to the supervision of the Federal 

16 Mortgage Insurance Corporation.’’. 

17 (c) COUNTERPARTIES EXEMPT FROM THE COMMODITY

18 EXCHANGE ACT.—Section 1a(10) of the Commodity Ex19 change Act (7 U.S.C. 1a(10)) is amended by adding at the 

20 end the following: 

21 ‘‘(C) EXEMPTION.—Solely as it relates to 

22 the specific role of a counterparty in connection 

23 with the swap transaction described in this 

24 paragraph, the term ‘commodity pool’ does not 

25 include any counterparty that enters into any 


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1 swap for purposes of structuring a credit risk2 sharing mechanism that is approved by the Fed3 eral Mortgage Insurance Corporation in accord4 ance with section 302 or section 703(c) of the 

5 Housing Finance Reform and Taxpayer Protec6 tion Act of 2014, which credit risk-sharing mech7 anism is designed to be used or is used, as deter8 mined by the Federal Mortgage Insurance Cor9 poration, by a private market holder to assume 

10 losses and to reduce the specific risks arising 

11 from losses realized under such credit risk-shar12 ing mechanism associated with any pool of eligi13 ble mortgage loans that collateralizes a covered 

14 security insured in accordance with section 303 

15 or 305 of that Act.’’. 

16 SEC. 308. REGULATORY CONSULTATION AND COORDINA17 TION. 

18 (a) CONSULTATION PERMITTED.—The Corporation 

19 may, in carrying out any duty, responsibility, requirement, 

20 or action authorized under this Act, consult with the Fed21 eral regulatory agencies, any individual Federal regulatory 

22 agency, the Secretary of the Treasury, the Secretary of 

23 Housing and Urban Development, any State banking regu24 lator, any State insurance regulator, and any other State 


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1 agency, as the Corporation determines necessary and ap2 propriate. 

3 (b) COORDINATION REQUIRED.—The Corporation 

4 shall, as required by this Act, in carrying out any duty, 

5 responsibility, requirement, or action authorized under this 

6 Act, coordinate with the Federal regulatory agencies, any 

7 individual Federal regulatory agency, the Secretary of the 

8 Treasury, the Secretary of Housing and Urban Develop9 ment, any State banking regulator, any State insurance 

10 regulator, and any other State agency. 

11 (c) AVOIDANCE OF DUPLICATION.—To the fullest ex12 tent possible, the Corporation shall— 

13 (1) avoid duplication of examination activities, 

14 reporting requirements, and requests for information; 

15 (2) rely on examination reports made by other 

16 Federal or State regulatory agencies relating to an 

17 approved entity and its subsidiaries, if any; and 

18 (3) ensure that approved entities are not subject 

19 to conflicting supervisory demands by the Corpora20 tion and other Federal regulatory agencies. 

21 (d) PROTECTION OF PRIVILEGES.— 

22 (1) IN GENERAL.—Pursuant to the authorities 

23 provided under subsections (a) and (b), to facilitate 

24 the consultative process and coordination, the Cor25 poration may share information with the Federal regVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00286 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 ulatory agencies, any individual Federal regulatory 

2 agency, the Secretary of the Treasury, the Secretary 

3 of Housing and Urban Development, any State bank 

4 supervisor, any State insurance regulator, any other 

5 State agency, or any foreign banking authority, on a 

6 one-time, regular, or periodic basis, as determined by 

7 the Corporation, regarding the capital assets and li8 abilities, financial condition, risk management prac9 tices, or any other practice of any market partici10 pant. 

11 (2) PRIVILEGE PRESERVED.—Information 

12 shared by the Corporation pursuant to paragraph (1) 

13 shall not be construed as waiving, destroying, or oth14 erwise affecting any privilege or confidential status 

15 that any market participant or any other person may 

16 claim with respect to such information under Federal 

17 or State law as to any person or entity other than 

18 such agencies, agency, supervisor, or authority. 

19 (3) RULE OF CONSTRUCTION.—No provision of 

20 this subsection may be construed as implying or es21 tablishing that— 

22 (A) any person waives any privilege appli23 cable to information that is shared or transferred 

24 under any circumstance to which this subsection 

25 does not apply; or 


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1 (B) any person would waive any privilege 

2 applicable to any information by submitting the 

3 information directly to the Federal regulatory 

4 agencies, any individual Federal regulatory 

5 agency, any State bank supervisor, any State in6 surance regulator, any other State agency, or 

7 any foreign banking authority, but for this sub8 section. 

9 (e) FEDERAL AND STATE AUTHORITY PRESERVED.— 

10 Unless otherwise expressly provided by this section, no pro11 vision of this section shall limit or be construed to limit, 

12 in any way, the existing authority of any Federal agency 

13 or State regulatory authority. 

14 SEC. 309. AUTHORITY TO ISSUE REGULATIONS. 

15 (a) GENERAL AUTHORITY.—The Corporation may 

16 prescribe such regulations and issue such guidelines, orders, 

17 requirements, or standards as are necessary to— 

18 (1) carry out this Act, or any amendment made 

19 by this Act; and 

20 (2) ensure— 

21 (A) competition among approved entities in 

22 the secondary mortgage market; 

23 (B) liquidity in the secondary mortgage 

24 market and the forward execution market for eli25 gible single-family mortgage loans and singleVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00288 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 family covered securities, such as the To-Be-An2 nounced market; and 

3 (C) mitigation of systemic risk in the sec4 ondary mortgage market. 

5 (b) CAPITAL STANDARDS.— 

6 (1) IN GENERAL.—For each type of covered enti7 ty the Corporation shall establish, by regulation, cap8 ital standards and related solvency standards nec9 essary to implement the provisions of this Act. 

10 (2) DEFINITIONS.— 

11 (A) IN GENERAL.—The regulations required 

12 under this subsection shall define all such terms 

13 as are necessary to carry out the purposes of this 

14 subsection. 

15 (B) CONSIDERATIONS IN DEFINING INSTRU16 MENTS AND CONTRACTS THAT QUALIFY AS CAP17 ITAL.—In defining instruments and contracts 

18 that qualify as capital pursuant to subpara19 graph (A), the Corporation— 

20 (i) shall include such instruments and 

21 contracts that will absorb losses before the 

22 Mortgage Insurance Fund; and 

23 (ii) may assign significance to those 

24 instruments and contracts based on the naVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00289 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 ture and risks of such instruments and con2 tracts. 

3 (C) CONSIDERATIONS IN DEFINING CAPITAL

4 RATIOS.—Solely for the purposes of calculating a 

5 capital ratio appropriate to the business model 

6 of the applicable entity pursuant to subpara7 graph (A), the Corporation shall consider for the 

8 denominator— 

9 (i) total assets; 

10 (ii) total liabilities; 

11 (iii) risk in force; or 

12 (iv) unpaid principal balance. 

13 (3) DESIGNED TO ENSURE SAFETY AND SOUND14 NESS.—The capital and related solvency standards es15 tablished under this subsection shall be designed to— 

16 (A) ensure the safety and soundness of a 

17 covered entity; 

18 (B) minimize the risk of loss to the Mort19 gage Insurance Fund; 

20 (C) in consultation and coordination with 

21 the Board of Governors of the Federal Reserve 

22 System, the Federal Deposit Insurance Corpora23 tion, the Office of the Comptroller of the Cur24 rency, and the National Credit Union Adminis25 tration, reduce the potential for regulatory arbiVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00290 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 trage between capital standards for covered enti2 ties and capital standards promulgated by Fed3 eral regulatory agencies for insured depository 

4 institutions and their affiliates; and 

5 (D) be specifically tailored to accommodate 

6 a diverse range of business models that may be 

7 employed by covered entities. 

8 (4) SUPPLEMENTAL CAPITAL REQUIREMENTS.— 

9 In order to prevent or mitigate risks to the secondary 

10 mortgage market of the United States that could arise 

11 from the material financial distress or failure, or on12 going activities, of covered entities that are large ap13 proved aggregators or large approved guarantors that 

14 engage in covered guarantee transactions, the Cor15 poration, by regulation— 

16 (A) shall establish supplemental capital re17 quirements for covered entities that are large ap18 proved aggregators or large approved guarantors; 

19 and 

20 (B) may establish such other standards for 

21 covered entities that are large approved 

22 aggregators or large approved guarantors that 

23 the Corporation determines necessary or appro24 priate. 


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1 (c) MARKET SHARE LIMITATION FOR CERTAIN LARGE

2 ENTITIES.—The Corporation shall establish, by regulation, 

3 market share limitations for large approved aggregators 

4 and large approved guarantors that would take effect only 

5 in the event the Corporation has reason to believe the sup6 plemental standards established under subsection (b)(4) are 

7 insufficient to prevent or mitigate risks to the secondary 

8 mortgage market of the United States that could arise from 

9 the material financial distress or failure, or ongoing activi10 ties, of such approved aggregators and approved guaran11 tors. 

12 (d) RECOGNITION OF DISTINCTIONS BETWEEN THE

13 APPROVED ENTITIES AND THE FEDERAL HOME LOAN

14 BANKS.— 

15 (1) IN GENERAL.—Prior to promulgating any 

16 regulation or taking any other formal or informal ac17 tion of general applicability and future effect relating 

18 to the Federal Home Loan Banks, including the 

19 issuance of an advisory document or examination 

20 guidance, the Chairperson, in consultation with the 

21 Office of Federal Home Loan Bank Supervision, shall 

22 consider the differences between the Federal Home 

23 Loan Banks and approved entities with respect to— 

24 (A) the Banks’— 

25 (i) cooperative ownership structure; 


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1 (ii) mission of providing liquidity to 

2 its members; 

3 (iii) affordable housing and commu4 nity development mission; 

5 (iv) capital structure; and 

6 (v) joint and several liability; and 

7 (B) any other differences that the Corpora8 tion considers appropriate. 

9 (2) CAPITAL CONSIDERATIONS.—The Corpora10 tion, in coordination with the Office of Federal Home 

11 Loan Bank Supervision, shall establish capital stand12 ards, as required under section 309(b), with respect to 

13 a Federal Home Loan Bank, or subsidiary or joint 

14 office thereof, that is approved as an aggregator under 

15 section 312, that— 

16 (A) are adequate to support the role of a 

17 Federal Home Loan Bank as a covered entity, 

18 consistent with the safe and sound operations of 

19 the Bank or Banks involved; and 

20 (B) do not adversely impact the traditional 

21 liquidity and advance business of the Federal 

22 Home Loan Bank System or the marketability 

23 or creditworthiness of Federal Home Loan Bank 

24 consolidated obligations. 


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1 (e) REGULATIONS RELATING TO FORCE-PLACED IN2 SURANCE.— 

3 (1) IN GENERAL.—The Corporation shall, by reg4 ulation, set standards for the purchase of force-placed 

5 insurance by market participants. 

6 (2) LIMITATION.—No standards developed, 

7 adopted, or published under paragraph (1) shall con8 cern the regulation of the business of insurance or 

9 preempt any State law, regulation, or procedure con10 cerning the regulation of the business of insurance. 

11 (f) USE AND PROTECTION OF PERSONALLY IDENTIFI12 ABLE INFORMATION.— 

13 (1) PRIVACY CONSIDERATIONS.—In collecting in14 formation from any person, in publicly releasing in15 formation held by the Corporation, or in requiring 

16 approved entities to publicly report information, the 

17 Corporation shall take steps to ensure that propri18 etary, personal, or confidential consumer information 

19 that is protected from public disclosure under section 

20 552(b) or 552a of title 5, United States Code, or any 

21 other provision of law, is not made public. 

22 (2) TREATMENT OF APPROVED ENTITIES.—With 

23 respect to the application of any provision of the 

24 Right to Financial Privacy Act of 1978 to a disclo25 sure by an approved entity subject to this subsection, 


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1 the approved entity shall be treated as if it were a 

2 ‘‘financial institution’’ as defined in section 1101 of 

3 that Act (12 U.S.C. 3401). 

4 (3) NON DISCLOSURE.— 

5 (A) IN GENERAL.—Unless otherwise speci6 fied by this Act, any personally identifiable in7 formation obtained or maintained by the Cor8 poration in connection with any supervision or 

9 enforcement authority or function, including the 

10 Office of General Counsel and Office of the In11 spector General of the Federal Mortgage Insur12 ance Corporation, may not be disclosed to any 

13 non supervisory or non enforcement office, divi14 sion, or employee of the Corporation, or to any 

15 other Federal or State agency unless— 

16 (i) the information is necessary and 

17 appropriate for such office, division, or em18 ployee of the Corporation to comply with 

19 this Act, and the office, division, or em20 ployee cannot reasonably obtain the infor21 mation through the normal course of busi22 ness of such office, division, or employee; 

23 (ii) the other Federal or State agency 

24 has satisfied any conditions of information 

25 sharing that the Corporation may establish, 


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1 including treatment of personally identifi2 able information and sharing of informa3 tion that shall conform to the standards for 

4 protection of the confidentiality of person5 ally identifiable information and for data 

6 integrity and security that are applicable to 

7 Federal agencies; or 

8 (iii) the records are relevant to a le9 gitimate law enforcement inquiry, or intel10 ligence or counterintelligence activity, inves11 tigation, or analysis related to inter12 national terrorism within the jurisdiction of 

13 the receiving entity. 

14 (B) PROTECTION OF PERSONALLY IDENTIFI15 ABLE INFORMATION BY SPECIFIC OFFICES.—Any 

16 office created under section 207(a)(1)(B) shall— 

17 (i) develop standards regarding treat18 ment and confidentiality of personally iden19 tifiable information and the collection and 

20 sharing of information that are tailored to 

21 the purpose or mission of the office; and 

22 (ii) obtain approval from the Chair23 person of the standards developed under 

24 clause (i) prior to the operation of the office. 


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1 (g) CONSUMER PRIVACY.—The Corporation shall not 

2 obtain from an approved entity any personally identifiable 

3 financial information about a consumer from the financial 

4 records of the approved entity, except— 

5 (1) if the financial records are reasonably de6 scribed in a request by the Corporation and the con7 sumer provides written permission for the disclosure 

8 of such information by an approved entity to the Cor9 poration; or 

10 (2) as may be specifically permitted or required 

11 under other applicable provisions of law and in ac12 cordance with the Right to Financial Privacy Act of 

13 1978 (12 U.S.C. 3401 et seq.). 

14 (h) OPTION FOR APPROVED GUARANTORS AND AP15 PROVED AGGREGATORS.— 

16 (1) ESTABLISHMENT OF PROCESS FOR AP17 PROVAL.—The Corporation may, if it determines nec18 essary or appropriate, establish a process and criteria 

19 for approved guarantors and approved aggregators to 

20 apply to the Corporation for approval to operate a 

21 cash window for the purchase of individual eligible 

22 single-family mortgage loans. 

23 (2) REQUIREMENTS.—If the Corporation estab24 lishes a process and criteria under paragraph (1), the 

25 Corporation— 


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1 (A) may grant approval to an approved 

2 guarantor or an approved aggregator that ap3 plies to operate a cash window for the purchase 

4 of individual eligible single-family mortgage 

5 loans only if the Corporation determines that— 

6 (i) the approved guarantor or ap7 proved aggregator meets the criteria estab8 lished under paragraph (1); and 

9 (ii) the operation of the cash window 

10 would not pose a risk to the Mortgage In11 surance Fund; and 

12 (B) to ensure the safety and soundness of 

13 each approved guarantor and approved 

14 aggregator, shall establish standards for the regu15 lation, supervision, and operation of each cash 

16 window that an approved guarantor or approved 

17 aggregator is approved to operate under this 

18 paragraph. 

19 SEC. 310. EQUIVALENCY IN PROTECTION OF THE MORT20 GAGE INSURANCE FUND. 

21 In order to protect the Mortgage Insurance Fund and 

22 promote multiple sources of first loss positions, the Corpora23 tion shall seek to ensure equivalent loss absorption capacity 

24 between approved credit risk-sharing mechanisms pursuant 


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1 to section 302 and capital standards for approved guaran2 tors pursuant to section 311. 

3 Subtitle B—Approval and Super4 vision of Approved Entities for 

5 Single-family Activities 

6 SEC. 311. APPROVAL AND SUPERVISION OF GUARANTORS. 

7 (a) STANDARDS FOR APPROVAL OF GUARANTORS.— 

8 (1) IN GENERAL.—The Corporation shall de9 velop, adopt, and publish standards for the approval 

10 by the Corporation of guarantors to guarantee the 

11 timely payment of principal and interest on securi12 ties collateralized by eligible single-family mortgage 

13 loans and insured by the Corporation. 

14 (2) REQUIRED STANDARDS.—The standards re15 quired under paragraph (1) shall include— 

16 (A) the financial history and condition of 

17 the guarantor; 

18 (B) a requirement that the guarantor main19 tain capital levels as defined by the Corporation, 

20 pursuant to subsection (g); 

21 (C) the capability of the management of the 

22 guarantor; 

23 (D) the general character and fitness of the 

24 officers and directors of the guarantor, including 

25 the compliance history of the guarantor’s officers 


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1 and directors with Federal and State laws and 

2 the rules and regulations promulgated by self3 regulatory organizations (as defined in section 

4 3(a)(26) of the Securities Exchange Act of 1934 

5 (15 U.S.C. 78c(a)(26)), as applicable; 

6 (E) the risk presented by the guarantor to 

7 the Mortgage Insurance Fund; 

8 (F) the adequacy of insurance and fidelity 

9 coverage of the guarantor; 

10 (G) the ability of the guarantor to— 

11 (i) at the discretion of the guarantor, 

12 transfer investment risk and credit risk to 

13 private market holders in the single-family 

14 market in accordance with the credit risk15 sharing mechanisms approved by the Cor16 poration under section 302; 

17 (ii) create mechanisms to guarantee 

18 multi-lender pools; and 

19 (iii) ensure that eligible single-family 

20 mortgage loans that collateralize a single21 family covered security insured under this 

22 title are originated in compliance with the 

23 requirements of this Act; 

24 (H) the capacity of the guarantor to take 

25 the first loss position; 


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1 (I) that the guarantor has the capacity to 

2 guarantee eligible single-family mortgage loans 

3 in a manner that furthers the purposes of the 

4 Corporation described in section 201(b)(5); 

5 (J) a requirement that the guarantor timely 

6 issue publicly available audited financial state7 ments on an annual basis prepared in accord8 ance with generally accepted accounting prin9 ciples used in the industry; 

10 (K) that the guarantor is in compliance 

11 with section 210(a)(3); 

12 (L) that the guarantor has substantial ana13 lytical capabilities to effectively manage credit 

14 risk; 

15 (M) that the guarantor does not originate 

16 eligible single-family mortgage loans and is not 

17 an affiliate of a person that actively engages in 

18 the business of originating eligible single-family 

19 mortgage loans; and 

20 (N) any other standard the Corporation de21 termines necessary to protect the Mortgage Insur22 ance Fund. 

23 (3) RULE OF CONSTRUCTION.—Nothing in sub24 paragraph (I) of paragraph (2) shall be construed to 

25 prevent the Corporation from approving a small or 


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1 specialty guarantor, provided that the guarantor has 

2 the capacity to adequately diversify its risk to meet 

3 appropriate safety and soundness concerns. 

4 (4) CONSULTATION AND COORDINATION.—To 

5 promote consistency and minimize regulatory conflict, 

6 the Corporation shall consult and coordinate with ap7 propriate Federal and State regulators and officials 

8 when developing standards pursuant to this sub9 section. 

10 (b) APPLICATION AND APPROVAL.— 

11 (1) APPLICATION PROCESS.— 

12 (A) IN GENERAL.—The Corporation shall 

13 establish an application process, in such form 

14 and manner and requiring such information as 

15 the Corporation may require, for the approval of 

16 a guarantor under this section. 

17 (B) APPLICATION REVIEW.—The Corpora18 tion shall establish internal timelines for its 

19 processing of an application under this section, 

20 including timelines for any action to approve or 

21 to deny an application under this section. 

22 (C) PROHIBITION ON CONTROL BY INSURED

23 DEPOSITORY INSTITUTIONS OR AFFILIATES OF

24 INSURED DEPOSITORY INSTITUTIONS.— 


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1 (i) IN GENERAL.—It shall be unlawful 

2 for an insured depository institution or an 

3 affiliate of an insured depository institution 

4 to control an approved guarantor. 

5 (ii) RULE OF CONSTRUCTION REGARD6 ING CONTROL.—For purposes of this sub7 paragraph, any insured depository institu8 tion or affiliate of an insured depository in9 stitution has control over an approved 

10 guarantor if the company directly or indi11 rectly or acting through 1 or more other 

12 persons owns, controls, or has power to vote 

13 10 percent or more of any class of voting 

14 shares of the approved guarantor. 

15 (2) APPROVAL.—The Corporation may approve 

16 any application made pursuant to paragraph (1), 

17 provided the guarantor meets the standards estab18 lished under subsection (a). 

19 (3) DENIAL.—The Corporation shall have the au20 thority to deny any application made pursuant to 

21 paragraph (1) if an officer or director of the guar22 antor has, at any time prior to the date of the ap23 proval of such application, been— 


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1 (A) subject to a statutory disqualification 

2 pursuant to section 3(a)(39) of the Securities 

3 Exchange Act of 1934 (15 U.S.C. 78c(a)(39)); or 

4 (B) suspended, removed, or prohibited from 

5 participation pursuant to section 8(g) of the 

6 Federal Deposit Insurance Act (12 U.S.C. 

7 1818(g)), prohibited from certain action pursu8 ant to paragraphs (6) or (7) of section 8(e) of the 

9 Federal Deposit Insurance Act (12 U.S.C. 

10 1818(e)), subject to an action resulting in a 

11 written agreement or other written statement 

12 under section 8(u)(1) of the Federal Deposit In13 surance Act (12 U.S.C. 1818(u)(1)), for which a 

14 violation may be enforced by an appropriate 

15 Federal banking agency, or subject to any final 

16 order issued with respect to any administrative 

17 enforcement proceeding initiated by such agency 

18 under section 8 of the Federal Deposit Insurance 

19 Act (12 U.S.C. 1818). 

20 (4) NOTICE AND PUBLICATION.—The Corpora21 tion shall— 

22 (A) provide prompt notice to a guarantor of 

23 the approval or denial of any application of the 

24 guarantor to become an approved guarantor 

25 under this section; 


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1 (B) publish a notice in the Federal Register 

2 upon approval of any guarantor; and 

3 (C) maintain an updated list of approved 

4 guarantors on the website of the Corporation. 

5 (c) REQUIREMENT TO MAINTAIN APPROVAL STATUS.— 

6 (1) AUTHORITY TO ISSUE ORDER.—If the Cor7 poration determines that an approved guarantor no 

8 longer meets the standards for such approval or vio9 lates a requirement under this Act, including any 

10 standard, regulation, or order promulgated in accord11 ance with this Act, the Corporation may— 

12 (A) suspend or revoke the approved status of 

13 the approved guarantor; or 

14 (B) take any other action with respect to 

15 such approved guarantor as may be authorized 

16 under this Act. 

17 (2) RULE OF CONSTRUCTION.—The suspension or 

18 revocation of the approved status of an approved 

19 guarantor under this section shall have no effect on 

20 the status as a covered security of any covered secu21 rity collateralized by eligible mortgage loans with 

22 which the approved guarantor contracted prior to the 

23 suspension or revocation. 

24 (3) PUBLICATION.—The Corporation shall— 


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1 (A) promptly publish a notice in the Fed2 eral Register upon suspension or revocation of 

3 the approval of any approved guarantor; and 

4 (B) maintain an updated list of such ap5 proved guarantors on the website of the Corpora6 tion. 

7 (4) DEFINITION.—In this subsection, the term 

8 ‘‘violate’’ includes any action, taken alone or with 

9 others, for or toward causing, bringing about, partici10 pating in, counseling, or aiding or abetting, a viola11 tion of the requirements under this Act. 

12 (d) PRUDENTIAL STANDARDS FOR SUPERVISION.—The 

13 Corporation shall prescribe prudential standards for ap14 proved guarantors in order to— 

15 (1) ensure— 

16 (A) the safety and soundness of approved 

17 guarantors; and 

18 (B) the maintenance of approval standards 

19 by approved guarantors; and 

20 (2) minimize the risk presented to the Mortgage 

21 Insurance Fund. 

22 (e) REPORTS AND EXAMINATIONS.—For purposes of 

23 determining whether an approved guarantor is fulfilling the 

24 requirements under this Act, the Corporation shall have the 

25 authority to require reports from and examine an approved 


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1 guarantor, in the same manner and to the same extent as 

2 the Federal Deposit Insurance Corporation has with respect 

3 to an insured depository institution under the provisions 

4 of subsection (a) of section 9 of the Federal Deposit Insur5 ance Act (12 U.S.C. 1819). 

6 (f) ENFORCEMENT.—The Corporation shall have the 

7 authority to enforce the provisions of this Act with respect 

8 to an approved guarantor, in the same manner and to the 

9 same extent as the Federal Deposit Insurance Corporation 

10 has with respect to an insured depository institution under 

11 the provisions of subsections (b) through (n) of section 8 

12 of the Federal Deposit Insurance Act (12 U.S.C. 1818). 

13 (g) CAPITAL STANDARDS.— 

14 (1) IN GENERAL.—Pursuant to the requirement 

15 to establish capital and related solvency standards 

16 under section 309(b), the Corporation shall establish 

17 standards for approved guarantors that require an 

18 approved guarantor to— 

19 (A) hold 10 percent capital; and 

20 (B) maintain solvency levels adequate for 

21 the approved guarantor to withstand losses that 

22 might be incurred by the approved guarantor in 

23 a period of economic stress, including national 

24 and regional home price declines, such as those 


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1 observed during moderate to severe recessions in 

2 the United States. 

3 (2) RISK-SHARING CONSIDERATIONS.—For pur4 poses of paragraph (1), the Corporation shall consider 

5 the extent, amount, and form of risk-sharing and risk 

6 mitigation through the use by approved guarantors of 

7 credit risk-sharing mechanisms approved pursuant to 

8 section 302(b)(4). The Corporation shall allow such 

9 risk-sharing and risk mitigation to fulfill required 

10 amounts of capital to be held under paragraph (1)(A) 

11 such that it ensures an equivalent amount of loss ab12 sorption capacity as required under section 

13 302(a)(1)(B) while maintaining an appropriate 

14 structure of capital as determined by the Corporation. 

15 (3) STRESS TESTS.—The Corporation shall con16 duct appropriate stress tests of each approved guar17 antor that has total assets of more than 

18 $10,000,000,000, provided that such stress tests shall 

19 be— 

20 (A) specifically tailored to the business 

21 model of the approved guarantor; and 

22 (B) utilized to— 

23 (i) ensure the safety and soundness of 

24 the approved guarantor; and 


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1 (ii) minimize the risk the approved 

2 guarantor may present to the Mortgage In3 surance Fund. 

4 (h) RESOLUTION AUTHORITY FOR FAILING GUARAN5 TORS.— 

6 (1) IN GENERAL.—Notwithstanding any other 

7 provision of Federal law, the law of any State, or the 

8 constitution of any State, the Corporation shall— 

9 (A) have the authority to act, in the same 

10 manner and to the same extent, with respect to 

11 an approved guarantor as the Federal Deposit 

12 Insurance Corporation has with respect to an in13 sured depository institution under subsections (c) 

14 through (s) of section 11 of the Federal Deposit 

15 Insurance Act (12 U.S.C. 1821), section 12 of the 

16 Federal Deposit Insurance Act (12 U.S.C. 1822), 

17 and section 13 of the Federal Deposit Insurance 

18 Act (12 U.S.C. 1823), while tailoring such ac19 tions to the specific business model of the ap20 proved guarantor, as may be necessary to prop21 erly exercise such authority under this sub22 section; 

23 (B) in carrying out any authority provided 

24 in subparagraph (A), act, in the same manner 

25 and to the same extent, with respect to the MortVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00309 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 gage Insurance Fund as the Federal Deposit In2 surance Corporation may act with respect to the 

3 Deposit Insurance Fund under the provisions of 

4 the Federal Deposit Insurance Act set forth in 

5 subparagraph (A); 

6 (C) prescribe regulations governing the ap7 plicable rights, duties, and obligations of an ap8 proved guarantor placed into resolution under 

9 this subsection, its creditors, counterparties, and 

10 other persons, as the Corporation deems nec11 essary to properly exercise the authority pro12 vided in subparagraph (A); 

13 (D) consistent with the authorities provided 

14 in subparagraph (A), immediately place an in15 solvent approved guarantor into receivership; 

16 and 

17 (E) upon placing an approved guarantor 

18 into receivership, treat single-family covered se19 curities insured by the Corporation under section 

20 303 in the same manner as the Federal Deposit 

21 Insurance Corporation treats deposit liabilities 

22 under section 11(d)(11)(A)(ii) of the Federal De23 posit Insurance Act and insured deposits under 

24 section 11(f) of the Federal Deposit Insurance 

25 Act, where the Corporation shall have the same 


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1 right of subrogation as the Federal Deposit In2 surance Corporation has under section 11(g) of 

3 the Federal Deposit Insurance Act. 

4 (2) LEAST-COST RESOLUTION REQUIRED.—The 

5 Corporation may not exercise any authority under 

6 paragraph (1) with respect to any approved guar7 antor unless the total amount of the expenditures by 

8 the Corporation and obligations incurred by the Cor9 poration in connection with the exercise of any such 

10 authority with respect to such approved guarantor is 

11 the least costly to the Mortgage Insurance Fund, con12 sistent with the least cost approach specified in the 

13 Federal Deposit Insurance Act (12 U.S.C. 1811 et 

14 seq.), of all possible methods for meeting the Corpora15 tion’s obligations under this Act and expeditiously 

16 concluding its resolution activities, subject to section 

17 13 of the Federal Deposit Insurance Act where the 

18 Corporation and the Board of Directors shall have the 

19 same authority as the Federal Deposit Insurance Cor20 poration and the Federal Deposit Insurance Corpora21 tion’s board of directors. 

22 (3) TAXPAYER PROTECTION.—The Corporation, 

23 in carrying out any authority provided in this sub24 section, shall prescribe regulations to ensure that any 

25 amounts owed to the United States, unless the United 


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1 States agrees or consents otherwise, shall have pri2 ority following administrative expenses of the receiver 

3 when satisfying unsecured claims against an ap4 proved guarantor, or the receiver therefor, that are 

5 proven to the satisfaction of the receiver. 

6 (i) HEARING.—Upon notice of denial of an applica7 tion for approval under subsection (b) or upon a notice of 

8 suspension or revocation of the approved status of an ap9 proved guarantor under subsection (c), the applicant or ap10 proved guarantor shall be afforded a hearing under sub11 section (h) of section 8 of the Federal Deposit Insurance 

12 Act (12 U.S.C. 1818(h)), in the same manner and to the 

13 same extent as if the Corporation were the appropriate Fed14 eral banking agency, provided that the approved guarantor 

15 submits a request to the Corporation for a hearing not later 

16 than 10 days after the date on which the notice is published 

17 under subsection (b)(3) or (c)(3). 

18 (j) OTHER ACTIVITIES.—An approved guarantor shall 

19 be prohibited from being an approved aggregator. 

20 (k) PROVISION OF POOL LEVEL INSURANCE.—Subject 

21 to such standards as the Corporation may provide, an ap22 proved guarantor may provide insurance or other credit en23 hancement on a pool of eligible single-family mortgage 

24 loans collateralizing a single-family covered security in25 sured under this title. 


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1 (l) PROHIBITED ACTIVITY.—An approved guarantor 

2 may not— 

3 (1) originate eligible single-family mortgage 

4 loans; or 

5 (2) be an affiliate of a person that actively en6 gages in the business of originating eligible single7 family mortgage loans. 

8 (m) GUARANTORS REQUIRED TO PAY CLAIMS.—Sub9 ject to such standards as the Corporation may provide, an 

10 approved guarantor may not for any reason withhold pay11 ment of funds that would ensure holders of single-family 

12 covered securities receive timely payment of principal and 

13 interest on single-family covered securities. The Corporation 

14 shall by regulation develop a process for the mediation and 

15 resolution of disputed payment amounts. 

16 SEC. 312. APPROVAL AND SUPERVISION OF AGGREGATORS. 

17 (a) STANDARDS FOR APPROVAL OF MORTGAGE

18 AGGREGATORS.— 

19 (1) IN GENERAL.—The Corporation shall de20 velop, adopt, and publish standards for the approval 

21 by the Corporation of mortgage aggregators to deliver 

22 eligible single-family mortgage loans to the 

23 Securitization Platform for securitization by such 

24 aggregator as a single-family covered security. 


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1 (2) REQUIRED STANDARDS.—The standards re2 quired under paragraph (1) shall include standards 

3 with respect to the ability of mortgage aggregator 

4 to— 

5 (A) aggregate eligible single-family mort6 gage loans into pools, including multi-lender 

7 pools, as appropriate; 

8 (B) transfer investment risk and credit risk 

9 to private market participants in accordance 

10 with the credit risk-sharing mechanisms ap11 proved by the Corporation under section 302; 

12 (C) ensure equitable access to the secondary 

13 mortgage market for single-family covered securi14 ties for all institutions regardless of size or geo15 graphic location; and 

16 (D) ensure that eligible single-family mort17 gage loans that collateralize a single-family cov18 ered security insured under this title are origi19 nated in compliance with the requirements of 

20 this Act. 

21 (3) ADDITIONAL REQUIRED STANDARDS.—The 

22 standards required under paragraph (1) shall also in23 clude— 

24 (A) the financial history and condition of 

25 the mortgage aggregator; 


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1 (B) the adequacy of the capital structure of 

2 the mortgage aggregator; 

3 (C) the capability of the management of the 

4 mortgage aggregator; 

5 (D) the general character and fitness of the 

6 officers and directors of the mortgage aggregator, 

7 including the compliance history of the mortgage 

8 aggregator’s officers and directors with Federal 

9 and State laws and the rules and regulations 

10 promulgated by self-regulatory organizations (as 

11 defined in section 3(a)(26) of the Securities Ex12 change Act of 1934 (15 U.S.C. 78c(a)(26)), as 

13 applicable; 

14 (E) the risk presented by the mortgage 

15 aggregator to the Mortgage Insurance Fund; 

16 (F) the adequacy of insurance and fidelity 

17 coverage of the mortgage aggregator; 

18 (G) a requirement that the mortgage 

19 aggregator submit audited financial statements 

20 to the Corporation; 

21 (H) that the mortgage aggregator has the 

22 capacity to aggregate mortgage loans in a man23 ner that furthers purposes of the Corporation de24 scribed in section 201(b)(5); 


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1 (I) that the mortgage aggregator is in com2 pliance with section 210(a)(3); and 

3 (J) any other standard the Corporation de4 termines necessary to protect the Mortgage Insur5 ance Fund. 

6 (4) RULE OF CONSTRUCTION.—Nothing in sub7 paragraph (H) of paragraph (3) shall be construed to 

8 prevent the Corporation from approving a small or 

9 specialty mortgage aggregator, provided that the 

10 mortgage aggregator has the capacity to adequately 

11 diversify its risk to meet appropriate safety and 

12 soundness concerns of the Corporation. 

13 (5) CONSULTATION AND COORDINATION.—To 

14 promote consistency and minimize regulatory conflict, 

15 the Corporation shall consult and coordinate with ap16 propriate Federal and State regulators and officials 

17 when developing standards pursuant to this sub18 section. 

19 (b) APPLICATION AND APPROVAL.— 

20 (1) APPLICATION PROCESS.— 

21 (A) IN GENERAL.—The Corporation shall 

22 establish an application process, in such form 

23 and manner and requiring such information as 

24 the Corporation may require, for the approval of 

25 a mortgage aggregator under this section. 


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1 (B) APPLICATION REVIEW.—The Corpora2 tion shall establish internal timelines for its 

3 processing of an application under this section, 

4 including timelines for any action to approve or 

5 to deny an application under this section. 

6 (2) APPROVAL.—The Corporation may approve 

7 any application made pursuant to paragraph (1), 

8 provided the mortgage aggregator meets the standards 

9 established under subsection (a). 

10 (3) DENIAL.—The Corporation shall have the au11 thority to deny any application made pursuant to 

12 paragraph (1) if an officer or director of the mortgage 

13 aggregator has, at any time prior to the date of the 

14 approval of such application, been— 

15 (A) subject to a statutory disqualification 

16 pursuant to section 3(a)(39) of the Securities 

17 Exchange Act of 1934 (15 U.S.C. 78c(a)(39)); or 

18 (B) suspended, removed, or prohibited from 

19 participation pursuant to section 8(g) of the 

20 Federal Deposit Insurance Act (12 U.S.C. 

21 1818(g)), prohibited from certain action pursu22 ant to paragraphs (6) or (7) of section 8(e) of the 

23 Federal Deposit Insurance Act (12 U.S.C. 

24 1818(e)), subject to an action resulting in a 

25 written agreement or other written statement 


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1 under section 8(u)(1) of the Federal Deposit In2 surance Act (12 U.S.C. 1818(u)(1)), for which a 

3 violation may be enforced by an appropriate 

4 Federal banking agency, or subject to any final 

5 order issued with respect to any administrative 

6 enforcement proceeding initiated by such agency 

7 under section 8 of the Federal Deposit Insurance 

8 Act (12 U.S.C. 1818). 

9 (4) NOTICE AND PUBLICATION.—The Corpora10 tion shall— 

11 (A) provide prompt notice to a mortgage 

12 aggregator of the approval or denial of any ap13 plication of the mortgage aggregator to become 

14 an approved aggregator under this section; 

15 (B) publish a notice in the Federal Register 

16 upon approval of any mortgage aggregator; and 

17 (C) maintain an updated list of approved 

18 aggregators on the website of the Corporation. 

19 (c) REQUIREMENT TO MAINTAIN APPROVAL STATUS.— 

20 (1) AUTHORITY TO ISSUE ORDER.—If the Cor21 poration determines that an approved aggregator no 

22 longer meets the standards for such approval or vio23 lates a requirement under this Act, including any 

24 standard, regulation, or order promulgated in accord25 ance with this Act, the Corporation may— 


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1 (A) suspend or revoke the approved status of 

2 the approved aggregator; or 

3 (B) take any other action with respect to 

4 such approved aggregator as may be authorized 

5 under this Act. 

6 (2) RULE OF CONSTRUCTION.—The suspension or 

7 revocation of the approved status of an approved 

8 aggregator under this section shall have no effect on 

9 the status as a covered security of any covered secu10 rity collateralized by eligible mortgage loans with 

11 which the approved aggregator contracted prior to the 

12 suspension or revocation. 

13 (3) PUBLICATION.—The Corporation shall— 

14 (A) promptly publish a notice in the Fed15 eral Register upon suspension or revocation of 

16 the approval of any approved aggregator; and 

17 (B) maintain an updated list of such ap18 proved aggregators on the website of the Corpora19 tion. 

20 (4) DEFINITION.—In this subsection, the term 

21 ‘‘violate’’ includes any action, taken alone or with 

22 others, for or toward causing, bringing about, partici23 pating in, counseling, or aiding or abetting, a viola24 tion of the requirements under this Act. 

25 (d) PRUDENTIAL STANDARDS FOR SUPERVISION.— 


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1 (1) IN GENERAL.—Subject to subsection (k)(1), 

2 the Corporation shall prescribe prudential standards 

3 for approved aggregators in order to— 

4 (A) ensure— 

5 (i) the safety and soundness of ap6 proved aggregators; and 

7 (ii) the maintenance of approval 

8 standards by approved aggregators; and 

9 (B) minimize the risk presented to the 

10 Mortgage Insurance Fund. 

11 (2) RECOGNITION OF DISTINCTIONS BETWEEN

12 AGGREGATORS THAT ARE INSURED DEPOSITORY IN13 STITUTIONS, AFFILIATES OF INSURED DEPOSITORY IN14 STITUTIONS, AND THOSE THAT ARE NOT.—In car15 rying out the requirements under paragraph (1), the 

16 Corporation shall— 

17 (A) distinguish between prudential stand18 ards for approved aggregators that are insured 

19 depository institutions, approved aggregators 

20 that are affiliates of insured depository institu21 tions, and approved aggregators that are neither 

22 insured depository institutions nor affiliates of 

23 insured depository institutions; and 

24 (B) consult and coordinate with Federal 

25 and State banking agencies when establishing 


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1 prudential standards for approved aggregators 

2 that are insured depository institutions and ap3 proved aggregators that are affiliates of insured 

4 depository institutions, in order to minimize du5 plication of and conflicts with the prudential 

6 standards set by the appropriate Federal or 

7 State banking agencies of insured depository in8 stitutions or the affiliates of insured depository 

9 institutions. 

10 (3) RULE OF CONSTRUCTION.—Nothing in this 

11 section shall supersede the prudential standards estab12 lished by the appropriate Federal banking agencies. 

13 (e) REPORTS AND EXAMINATIONS.—For purposes of 

14 gathering information to determine whether an approved 

15 aggregator is fulfilling the requirements under this Act, the 

16 Corporation shall have the authority to require reports from 

17 and examine an approved aggregator as follows: 

18 (1) NOT INSURED DEPOSITORY INSTITUTIONS OR

19 AFFILIATES.—For an approved aggregator that is 

20 neither an insured depository institution nor an affil21 iate of an insured depository institution, the Corpora22 tion shall have the authority to require reports from 

23 and examine an approved aggregator, in the same 

24 manner and to the same extent as the Federal Deposit 

25 Insurance Corporation has with respect to an insured 


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1 depository institution under the provisions of sub2 section (a) of section 9 of the Federal Deposit Insur3 ance Act (12 U.S.C. 1819). 

4 (2) INSURED DEPOSITORY INSTITUTIONS AND AF5 FILIATES.—For an approved aggregator that is an 

6 insured depository institution or an affiliate of an in7 sured depository institutions: 

8 (A) USE OF EXISTING REPORTS TO REDUCE

9 EXAMINATIONS.—To the fullest extent possible, 

10 the Corporation shall— 

11 (i) rely on the examinations, inspec12 tions, and reports of the appropriate Fed13 eral or State banking agencies; 

14 (ii) avoid duplication of examination 

15 activities, reporting requirements, and re16 quests for information; and 

17 (iii) ensure that the depository institu18 tion holding company and the subsidiaries 

19 of the depository institution holding com20 pany are not subject to conflicting super21 visory demands by the Corporation and ap22 propriate Federal and State banking agen23 cies. 

24 (B) EXAMINATION AUTHORITY.—If the Cor25 poration determines that the examinations, inVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00322 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 spections, and reports obtained pursuant to sub2 paragraph (A) are insufficient for the Corpora3 tion to adequately supervise an approved 

4 aggregator for compliance with this Act, the Cor5 poration shall have the authority to require re6 ports from and examine the approved aggregator 

7 for compliance with this Act, in the same man8 ner and to the same extent as the Board of Gov9 ernors of the Federal Reserve System has with 

10 respect to a subsidiary of a bank holding 

11 companyunder the provisions of paragraphs (1) 

12 and (2) of subsection (c) of section 5 of the Bank 

13 Holding Company Act (12 U.S.C. 1844). 

14 (C) REGULATORY NOTICE.— 

15 (i) REGULATORY NOTICE.—Before com16 mencing an examination of an approved 

17 aggregator under this paragraph, the Cor18 poration shall provide reasonable notice to, 

19 and coordinate with, the appropriate Fed20 eral or State banking agency or State regu21 latory agency. 

22 (ii) RULE OF CONSTRUCTION.—Noth23 ing in this Act shall limit the authority of 

24 the Corporation to require reports of and 

25 examine an approved aggregator— 


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1 (I) to verify the sale of, and funds 

2 received from, the first loss position; 

3 and 

4 (II) when the Corporation becomes 

5 aware— 

6 (aa) of a material threat to 

7 the safety and soundness of the 

8 approved aggregator; 

9 (bb) that the approved 

10 aggregator is in material viola11 tion of this Act or the rules pro12 mulgated by the Corporation pur13 suant to this Act; or 

14 (cc) that the activities of the 

15 approved aggregator threaten the 

16 financial stability of the housing 

17 finance system or the Mortgage 

18 Insurance Fund. 

19 (f) ENFORCEMENT.—The Corporation shall have the 

20 authority to enforce the provisions of this Act with respect 

21 to an approved aggregator, in the same manner and to the 

22 same extent as the Federal Deposit Insurance Corporation 

23 has with respect to an insured depository institution under 

24 the provisions of subsections (b) through (n) of section 8 

25 of the Federal Deposit Insurance Act (12 U.S.C. 1818), proVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00324 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 vided that to the extent that the Corporation and an appro2 priate Federal banking agency are each authorized to en3 force prudential standards with respect to an approved 

4 aggregator that is an insured depository institution or an 

5 affiliate of an insured depository institution, the appro6 priate Federal banking agency shall have primary author7 ity to enforce such standards. 

8 (g) CAPITAL STANDARDS.—For approved aggregators 

9 that are neither an insured depository institution nor an 

10 affiliate of an insured depository institution the following 

11 shall apply: 

12 (1) IN GENERAL.—Pursuant to the requirement 

13 to establish capital and related solvency standards 

14 under section 309(b), the Corporation shall establish 

15 standards for approved aggregators that require an 

16 approved aggregator— 

17 (A) to hold capital in an amount com18 parable to that which is required to be held by 

19 insured depository institutions and their affili20 ates with respect to their applicable aggregating 

21 activities; and 

22 (B) to maintain solvency levels adequate for 

23 the approved aggregator to withstand losses that 

24 might be incurred by the approved aggregator in 

25 a period of economic stress, including national 


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1 and regional home price declines, such as those 

2 observed during moderate to severe recessions in 

3 the United States. 

4 (2) STRESS TESTS.—The Corporation shall con5 duct appropriate stress tests of each approved 

6 aggregator that has total assets of more than 

7 $10,000,000,000, provided that such stress tests shall 

8 be— 

9 (A) specifically tailored to the business 

10 model of the approved aggregator; 

11 (B) utilized to— 

12 (i) ensure the safety and soundness of 

13 the approved aggregator; and 

14 (ii) minimize the risk the approved 

15 aggregator may present to the Mortgage In16 surance Fund; and 

17 (C) coordinated with the Board of Gov18 ernors of the Federal Reserve System, if the ap19 proved aggregator is an affiliate of an insured 

20 depository institution. 

21 (h) RESOLUTION AUTHORITY FOR FAILING

22 AGGREGATORS.— 

23 (1) IN GENERAL.—Notwithstanding any other 

24 provision of Federal law, the law of any State, or the 

25 constitution of any State, the Corporation shall— 


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1 (A) have the authority to act, in the same 

2 manner and to the same extent, with respect to 

3 an approved aggregator that is not an insured 

4 depository institution as the Federal Deposit In5 surance Corporation has with respect to an in6 sured depository institution under subsections (c) 

7 through (s) of section 11 of the Federal Deposit 

8 Insurance Act (12 U.S.C. 1821), section 12 of the 

9 Federal Deposit Insurance Act (12 U.S.C. 1822), 

10 and section 13 of the Federal Deposit Insurance 

11 Act (12 U.S.C. 1823), while tailoring such ac12 tions to the specific business model of the ap13 proved aggregator, as may be necessary to prop14 erly exercise such authority under this sub15 section; 

16 (B) in carrying out any authority provided 

17 under subparagraph (A), act, in the same man18 ner and to the same extent, with respect to the 

19 Mortgage Insurance Fund as the Federal Deposit 

20 Insurance Corporation may act with respect to 

21 the Deposit Insurance Fund under the provisions 

22 of the Federal Deposit Insurance Act set forth in 

23 subparagraph (A); 

24 (C) prescribe regulations governing the ap25 plicable rights, duties, and obligations of an apVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00327 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 proved aggregator that is not an insured deposi2 tory institution placed into resolution under this 

3 subsection, its creditors, counterparties, and 

4 other persons, as the Corporation deems nec5 essary to properly exercise the authority pro6 vided in subparagraph (A); and 

7 (D) consistent with the authorities provided 

8 in subparagraph (A), immediately place an in9 solvent approved aggregator that is not an in10 sured depository institution into receivership. 

11 (2) RULE OF CONSTRUCTION.—If an insolvent 

12 approved aggregator is an insured depository institu13 tion, the Corporation shall recommend, in writing, to 

14 such approved aggregator’s appropriate Federal bank15 ing agency or State banking regulator to resolve such 

16 approved aggregator, which agency shall have sole au17 thority to resolve such aggregator pursuant to section 

18 11(c) of the Federal Deposit Insurance Act (12 U.S.C. 

19 1821(c)) and other appropriate sections of the Federal 

20 Deposit Insurance Act (12 U.S.C. 1811 et seq.) or ap21 propriate Federal or State law, as applicable. 

22 (3) LEAST-COST RESOLUTION REQUIRED.—The 

23 Corporation may not exercise any authority under 

24 paragraph (1) with respect to any approved 

25 aggregator that is not an insured depository instituVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00328 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 tion unless the total amount of the expenditures by 

2 the Corporation and obligations incurred by the Cor3 poration in connection with the exercise of any such 

4 authority with respect to such approved aggregator is 

5 the least costly to the Mortgage Insurance Fund, con6 sistent with the least cost approach specified in the 

7 Federal Deposit Insurance Act (12 U.S.C. 1811 et 

8 seq.), of all possible methods for meeting the Corpora9 tion’s obligations under this Act and expeditiously 

10 concluding its resolution activities, subject to section 

11 13 of the Federal Deposit Insurance Act where the 

12 Corporation and the Board of Directors shall have the 

13 same authority as the Federal Deposit Insurance Cor14 poration and the Federal Deposit Insurance Corpora15 tion’s board of directors. 

16 (4) TAXPAYER PROTECTION.—The Corporation, 

17 in carrying out any authority provided in this sub18 section, shall prescribe regulations to ensure that any 

19 amounts owed to the United States, unless the United 

20 States agrees or consents otherwise, shall have pri21 ority following administrative expenses of the receiver 

22 when satisfying unsecured claims against an ap23 proved aggregator, or the receiver therefor, that are 

24 proven to the satisfaction of the receiver. 


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1 (i) HEARING.—Upon notice of denial of an applica2 tion for approval under subsection (b) or upon a notice of 

3 suspension or revocation of the approved status of an ap4 proved aggregator under subsection (c), the applicant or ap5 proved aggregator shall be afforded a hearing under sub6 section (h) of section 8 of the Federal Deposit Insurance 

7 Act (12 U.S.C. 1818(h)), in the same manner and to the 

8 same extent as if the Corporation were the appropriate Fed9 eral banking agency, provided that the approved aggregator 

10 submits a request to the Corporation for a hearing not later 

11 than 10 days after the date on which the notice is published 

12 under subsection (b)(3) or (c)(3). 

13 (j) OTHER ACTIVITIES.—An approved aggregator shall 

14 be prohibited from being an approved guarantor. 

15 (k) INFORMATION SHARING REGARDING INSURED DE16 POSITORY INSTITUTIONS AND AFFILIATES OF INSURED DE17 POSITORY INSTITUTIONS.— 

18 (1) BY THE CORPORATION.—To the extent the 

19 Corporation has relevant information indicating that 

20 an approved aggregator that is an insured depository 

21 institution or an affiliate of an insured depository in22 stitution (A) faces a material threat to its safety and 

23 soundness, including insufficient capital, (B) may be 

24 in material violation of Federal banking law, or (C) 

25 may threaten the financial stability of the housing fiVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00330 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 nance system or the Mortgage Insurance Fund, the 

2 Corporation shall notify, in writing, such appropriate 

3 Federal banking agency that such conditions exist. 

4 The Corporation shall have no authority to enforce 

5 prudential standards established by an appropriate 

6 Federal banking agency pursuant to the appropriate 

7 Federal banking agency’s authority. 

8 (2) BY FEDERAL AND STATE BANKING AGEN9 CIES.—To the extent an appropriate Federal banking 

10 agency or State banking agency has relevant informa11 tion indicating that an approved aggregator that is 

12 an insured depository institution or an affiliate of an 

13 insured depository institution (A) faces a material 

14 threat to its safety and soundness, including insuffi15 cient capital, (B) may be in material violation of this 

16 Act or the rules promulgated by the Corporation pur17 suant to this Act, or (C) may threaten the financial 

18 stability of the housing finance system or the Mort19 gage Insurance Fund, such appropriate Federal bank20 ing agency or State banking agency shall notify, in 

21 writing, the Corporation that such conditions exist. 

22 (l) RULE OF CONSTRUCTION REGARDING PRESERVA23 TION OF CORPORATION AUTHORITY.—Nothing in this sec24 tion limits, or shall be construed to limit, the authority of 

25 the Corporation to provide exemptions to, or adjustments 


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1 for, the provisions of this section based on the asset size of 

2 an approved aggregator, or other criteria, as the Corpora3 tion deems appropriate, in order to reduce regulatory bur4 dens while appropriately balancing protection of the Mort5 gage Insurance Fund. 

6 (m) FEDERAL HOME LOAN BANKS, JOINT OFFICES, 

7 AND BANK SUBSIDIARIES AS AGGREGATORS.— 

8 (1) FEDERAL HOME LOAN BANK ACT.— 

9 (A) ESTABLISHMENT OF JOINT OFFICES

10 AND SUBSIDIARIES.— 

11 (i) AMENDMENT.—Section 12 of the 

12 Federal Home Loan Bank Act (12 U.S.C. 

13 1432) is amended by adding at the end the 

14 following: 

15 ‘‘(c) Subject to such regulations as may be prescribed 

16 by the Agency, in coordination with the Federal Mortgage 

17 Insurance Corporation, 1 or more Federal Home Loan 

18 Banks may establish a subsidiary or joint office in any 

19 form under the laws of any State, subject to the approval 

20 of the Corporation. Any subsidiary or joint office estab21 lished under this subsection shall be restricted to engaging 

22 in activities related to being an approved aggregator, as 

23 that term is defined under section 2 of Housing Finance 

24 Reform and Taxpayer Protection Act of 2014. 


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1 ‘‘(d) Subject to such regulations as may be prescribed 

2 by the Agency, in coordination with the Federal Mortgage 

3 Insurance Corporation, 1 or more Federal Home Loan 

4 Banks or any subsidiary or joint office of a Federal Home 

5 Loan Bank established under subsection (c) may apply to 

6 become, and may become, an approved aggregator, as that 

7 term is defined under section 2 of the Housing Finance Re8 form and Taxpayer Protection Act of 2014.’’. 

9 (ii) EFFECTIVE DATE.—The amend10 ments made by clause (i) shall take effect on 

11 the system certification date. 

12 (B) CDFIS.— 

13 (i) AMENDMENT.—Section 10(a) of the 

14 Federal Home Loan Bank Act (12 U.S.C. 

15 1430(a)) is amended— 

16 (I) in paragraph (2)(B), by in17 serting ‘‘or community development fi18 nancial institution (as defined in sec19 tion 103 of the Riegle Community De20 velopment and Regulatory Improve21 ment Act of 1994 (12 U.S.C. 4702))’’ 

22 after ‘‘community financial institu23 tion’’; and 

24 (II) in paragraph (3)(E), by in25 serting ‘‘or community development fiVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00333 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 nancial institution (as defined in sec2 tion 103 of the Riegle Community De3 velopment and Regulatory Improve4 ment Act of 1994 (12 U.S.C. 4702))’’ 

5 after ‘‘community financial institu6 tion’’. 

7 (ii) EFFECTIVE DATE.—The amend8 ment made by clause (i) shall take effect on 

9 the agency transfer date. 

10 (2) NOT CONSOLIDATED DEBT.—Notwithstanding 

11 section 11 of the Federal Home Loan Bank Act (12 

12 U.S.C. 1431), any covered security secured by eligible 

13 mortgage loans transferred to the Platform by a Fed14 eral Home Loan Bank or subsidiary or joint office 

15 thereof, acting as an approved aggregator, shall not be 

16 designated as, or considered to be the joint and sev17 eral obligations of the Federal Home Loan Banks. 

18 SEC. 313. APPROVAL OF PRIVATE MORTGAGE INSURERS. 

19 (a) STANDARDS FOR APPROVAL OF PRIVATE MORT20 GAGE INSURERS.— 

21 (1) IN GENERAL.—The Corporation shall de22 velop, adopt, and publish standards for the approval 

23 by the Corporation of private mortgage insurers to 

24 provide private mortgage loan insurance on eligible 


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1 single-family mortgage loans that collateralize single2 family covered securities. 

3 (2) REQUIRED STANDARDS.—The standards re4 quired under paragraph (1) shall include— 

5 (A) the financial history and current finan6 cial condition, including capital and loss re7 serves to comply with any applicable State law 

8 or regulation, of the private mortgage insurer; 

9 (B) the capability of the management of the 

10 private mortgage insurer; 

11 (C) the general character and fitness of the 

12 officers and directors of the private mortgage in13 surer, including the compliance history of the 

14 private mortgage insurer’s officers and directors 

15 with Federal and State laws and the rules and 

16 regulations promulgated by self-regulatory orga17 nizations (as defined in section 3(a)(26) of the 

18 Securities Exchange Act of 1934 (15 U.S.C. 

19 78c(a)(26)), as applicable; 

20 (D) that the private mortgage insurer has 

21 the capacity to insure eligible single-family 

22 mortgage loans in a manner to comply with any 

23 applicable State law or regulation and that fur24 thers the purposes of the Corporation as de25 scribed in section 201(b)(5); 


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1 (E) the risk presented by the private mort2 gage insurer to the Mortgage Insurance Fund; 

3 (F) the adequacy of insurance and fidelity 

4 coverage of the private mortgage insurer; 

5 (G) a requirement that the private mortgage 

6 insurer submit audited financial statements to 

7 the Corporation; and 

8 (H) any other standard the Corporation, 

9 after notice and public comment, determines nec10 essary to avoid significant risk to the Mortgage 

11 Insurance Fund, provided the standard does not 

12 materially conflict with State law. 

13 (3) RULE OF CONSTRUCTION.—Nothing in sub14 paragraph (D) of paragraph (2) shall be construed to 

15 prevent the Corporation from approving a small or 

16 specialty private mortgage insurer, provided that the 

17 private mortgage insurer has the capacity to ade18 quately diversify its risk to meet solvency standards 

19 required by any applicable State law or regulation. 

20 (4) CONSULTATION AND COORDINATION.—To 

21 promote consistency and minimize regulatory conflict, 

22 the Corporation shall consult and coordinate with ap23 propriate Federal regulators and State regulators and 

24 officials when developing standards pursuant to this 

25 subsection. 


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1 (b) APPLICATION AND APPROVAL.— 

2 (1) APPLICATION PROCESS.— 

3 (A) IN GENERAL.—The Corporation shall 

4 establish an application process, in such form 

5 and manner and requiring such information as 

6 the Corporation may require, for the approval of 

7 a private mortgage insurer under this section. 

8 (B) APPLICATION REVIEW.—The Corpora9 tion shall establish internal timelines for its 

10 processing of an application under this section, 

11 including timelines for any action to approve or 

12 to deny an application under this section. 

13 (C) NOTIFICATION.—The Corporation shall 

14 notify the appropriate State insurance regulator 

15 upon receipt of any application by a private 

16 mortgage insurer to become an approved private 

17 mortgage insurer under this section. 

18 (2) APPROVAL.—The Corporation may approve 

19 any application made pursuant to paragraph (1), 

20 provided the private mortgage insurer meets the 

21 standards established under subsection (a). 

22 (3) DENIAL.—The Corporation shall have the au23 thority to deny any application made pursuant to 

24 paragraph (1) if an officer or director of the private 


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1 mortgage insurer has, at any time prior to the date 

2 of the approval of such application, been— 

3 (A) subject to a statutory disqualification 

4 pursuant to section 3(a)(39) of the Securities 

5 Exchange Act of 1934 (15 U.S.C. 78c(a)(39)); or 

6 (B) suspended, removed, or prohibited from 

7 participation pursuant to section 8(g) of the 

8 Federal Deposit Insurance Act (12 U.S.C. 

9 1818(g)), prohibited from certain action pursu10 ant to paragraphs (6) or (7) of section 8(e) of the 

11 Federal Deposit Insurance Act (12 U.S.C. 

12 1818(e)), subject to an action resulting in a 

13 written agreement or other written statement 

14 under section 8(u)(1) of the Federal Deposit In15 surance Act (12 U.S.C. 1818(u)(1)), for which a 

16 violation may be enforced by an appropriate 

17 Federal banking agency, or subject to any final 

18 order issued with respect to any administrative 

19 enforcement proceeding initiated by such agency 

20 under section 8 of the Federal Deposit Insurance 

21 Act (12 U.S.C. 1818). 

22 (4) NOTICE AND PUBLICATION.—The Corpora23 tion shall— 

24 (A) provide prompt notice to a private 

25 mortgage insurer of the approval or denial of 


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1 any application of the private mortgage insurer 

2 to become an approved private mortgage insurer 

3 under this section; 

4 (B) publish a notice in the Federal Register 

5 upon approval of any private mortgage insurer; 

6 (C) maintain an updated list of approved 

7 private mortgage insurers on the website of the 

8 Corporation; and 

9 (D) provide prompt notice to the appro10 priate State insurance regulator upon the ap11 proval or denial of any application of a private 

12 mortgage insurer to become an approved private 

13 mortgage insurer under this section. 

14 (5) GRANDFATHERED INSURERS OF THE ENTER15 PRISES.—Any private mortgage insurer who was ap16 proved to insure mortgage loans for an enterprise on 

17 the date that is 1 day before the date the Corporation 

18 publishes the provisional standards for the approval 

19 of private mortgage insurers required under section 

20 607(a)(2), and was in good standing as of such 

21 date— 

22 (A) shall be deemed conditionally approved 

23 for a period of 1 year from the date on which 

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1 ards for the approval of private mortgage insur2 ers required under section 607(a)(2); 

3 (B) shall, not later than the date which is 

4 6 months after date on which the Corporation 

5 publishes the standards required under sub6 section (a), apply for approved status via the ap7 plication process described in this subsection to 

8 be eligible for approved status; and 

9 (C) shall, provided the private mortgage in10 surer has complied with subparagraph (B), re11 ceive a determination from the Corporation as to 

12 the approval or denial of its application to be13 come an approved private mortgage insurer 

14 prior to the expiration of the 1-year period de15 scribed under subparagraph (A). 

16 (c) REQUIREMENT TO MAINTAIN APPROVAL STATUS.— 

17 (1) AUTHORITY TO ISSUE ORDER.—If the Cor18 poration determines that an approved private mort19 gage insurer no longer meets the standards for such 

20 approval or violates a requirement under this section, 

21 including any standard, regulation, or order promul22 gated in accordance with this Act, the Corporation 

23 may— 

24 (A) provide prompt notice to the appro25 priate State insurance regulator that the CorVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00340 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 poration determines that an approved private 

2 mortgage insurer no longer meets the standard 

3 for such approval; 

4 (B) suspend or revoke the approved status of 

5 the approved private mortgage insurer; or 

6 (C) take any other action with respect to 

7 such approved private mortgage insurer as may 

8 be authorized under this Act. 

9 (2) RULE OF CONSTRUCTION.—The suspension or 

10 revocation of the approved status of an approved pri11 vate mortgage insurer under this section shall have no 

12 effect on the status as a covered security of any cov13 ered security collateralized by eligible mortgage loans 

14 with which the approved private mortgage insurer 

15 contracted prior to the suspension or revocation. 

16 (3) PUBLICATION.—The Corporation shall— 

17 (A) promptly publish a notice in the Fed18 eral Register upon suspension or revocation of 

19 the approval of any approved private mortgage 

20 insurer; and 

21 (B) maintain an updated list of such ap22 proved private mortgage insurers on the website 

23 of the Corporation. 

24 (4) DEFINITION.—In this subsection, the term 

25 ‘‘violate’’ includes any action, taken alone or with 


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1 others, for or toward causing, bringing about, partici2 pating in, counseling, or aiding or abetting, a viola3 tion of the requirements under this Act. 

4 (d) STATE REGULATION.—The appropriate State in5 surance regulator of an approved private mortgage insurer 

6 has primary authority to examine and supervise the ap7 proved private mortgage insurer. 

8 (e) REPORTS AND EXAMINATIONS.— 

9 (1) IN GENERAL.—For purposes of determining 

10 whether an approved private mortgage insurer is ful11 filling the requirements under this Act, the Corpora12 tion may, in coordination with the appropriate State 

13 insurance regulator of the approved private mortgage 

14 insurer, including providing the appropriate State 

15 insurance regulator the opportunity to join the Cor16 poration in an on-site examination, examine or re17 view any approved private mortgage insurer if the 

18 Corporation has substantial reason to believe— 

19 (A) that an approved private mortgage in20 surer has engaged in a material violation or pat21 tern of violations of this Act or the rules promul22 gated pursuant to this Act; or 

23 (B) that the activities of an approved pri24 vate mortgage insurer may threaten the finanVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00342 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 cial stability of the housing finance system or the 

2 Mortgage Insurance Fund. 

3 (2) 3-YEAR COMPLIANCE EXAMINATION.—In ad4 dition to the authority under paragraph (1), the Cor5 poration shall conduct an examination of an ap6 proved private mortgage insurer once, but not more 

7 than once, every 3 years, provided the approved pri8 vate mortgage insurer has not been examined on-site 

9 by an appropriate State insurance regulator. 

10 (3) COORDINATION.—In conducting an exam or 

11 review authorized pursuant to paragraph (1) or para12 graph (2), the Corporation shall— 

13 (A) provide reasonable notice to, and co14 ordinate with, the appropriate State insurance 

15 regulator for an approved private mortgage in16 surer before commencing an examination of the 

17 approved private mortgage insurer under this 

18 section; 

19 (B) to the fullest extent possible, avoid du20 plication of examination activities, reporting re21 quirements, and requests for information, includ22 ing by relying on existing examinations, inspec23 tions, and reports of the appropriate State in24 surance regulator; and 


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1 (C) ensure that the approved private mort2 gage insurer is not subject to conflicting super3 visory demands by the Corporation and State 

4 insurance regulators, as appropriate. 

5 (4) NOTICE OF DETERMINATION.—The State in6 surance regulator of an approved private mortgage 

7 insurer shall notify the Corporation if there has been 

8 a final determination that the approved private mort9 gage insurer is in a hazardous financial condition 

10 provided that the Corporation agrees to maintain the 

11 confidentiality or privileged status of the document, 

12 material, or other information received from the State 

13 insurance regulator of the approved private mortgage 

14 insurer. 

15 (f) ENFORCEMENT.— 

16 (1) IN GENERAL.—The Corporation shall have 

17 the authority to enforce the provisions of this section 

18 with respect to a private mortgage insurer, in the 

19 same manner and to the same extent as the Federal 

20 Deposit Insurance Corporation has with respect to an 

21 insured depository institution under the provisions of 

22 subsections (b) through (n) of section 8 of the Federal 

23 Deposit Insurance Act (12 U.S.C. 1818), provided the 

24 Corporation demonstrates that such enforcement acVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00344 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 tion is necessary to avoid significant risk to the Mort2 gage Insurance Fund. 

3 (2) NOTIFICATION.—Prior to taking any enforce4 ment action against an approved private mortgage 

5 insurer, the Corporation shall promptly notify, con6 sult, and coordinate with the appropriate State insur7 ance regulator. 

8 (g) RESOLUTION AUTHORITY.— 

9 (1) IN GENERAL.—For any approved private 

10 mortgage insurer that the Corporation has substantial 

11 reason to believe is insolvent, as defined by applicable 

12 State law, and would otherwise be subject to receiver13 ship proceedings under such applicable State law, the 

14 Corporation shall recommend, in writing, that the 

15 State insurance regulator for such approved private 

16 mortgage insurer take such actions as are necessary 

17 and authorized under applicable State law to resolve 

18 such approved private mortgage insurer. 

19 (2) BACKUP AUTHORITY.—Notwithstanding the 

20 requirement under paragraph (1), if, after the end of 

21 the 60-day period beginning on the date on which the 

22 Corporation provides its written recommendation 

23 pursuant to paragraph (1), the appropriate State in24 surance regulator has not filed the appropriate judi25 cial action in the appropriate State court to place 


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1 such approved private mortgage insurer into receiver2 ship under the laws and requirements of the State, the 

3 Corporation shall have the authority to stand in the 

4 place of the appropriate regulatory agency and file 

5 the appropriate judicial action in the appropriate 

6 State court to place such approved private mortgage 

7 insurer into receivership under the laws and require8 ments of the State. 

9 (h) HEARING.—Upon notice of denial of an applica10 tion for approval under subsection (b) or upon a notice of 

11 suspension or revocation of the approved status of an ap12 proved private mortgage insurer under subsection (c), the 

13 applicant or approved private mortgage insurer shall be af14 forded a hearing under subsection (h) of section 8 of the 

15 Federal Deposit Insurance Act (12 U.S.C. 1818(h)), in the 

16 same manner and to the same extent as if the Corporation 

17 were the appropriate Federal banking agency, provided that 

18 the approved private mortgage insurer submits a request 

19 to the Corporation for a hearing not later than 10 days 

20 after the date on which the notice is published under sub21 section (b)(3) or (c)(3). 

22 (i) RULE OF CONSTRUCTION REGARDING PRESERVA23 TION OF CORPORATION AUTHORITY.—Nothing in this sec24 tion limits, or shall be construed to limit, the authority of 

25 the Corporation to provide exemptions to, or adjustments 


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1 for, the provisions of this section based on the asset size of 

2 approved private mortgage insurers, or other criteria, as 

3 the Corporation deems appropriate, in order to reduce regu4 latory burdens while appropriately balancing the protection 

5 of the Mortgage Insurance Fund. 

6 SEC. 314. APPROVAL OF SERVICERS. 

7 (a) STANDARDS FOR APPROVAL OF SERVICERS.— 

8 (1) IN GENERAL.—The Corporation shall, by reg9 ulation, establish standards for the approval by the 

10 Corporation of servicers to administer eligible single11 family mortgage loans, including standards with re12 spect to— 

13 (A) the collection and forwarding of prin14 cipal and interest payments; 

15 (B) the maintenance of escrow accounts; 

16 (C) the collection and payment of taxes and 

17 bona fide insurance premiums; 

18 (D) the maintenance of records on eligible 

19 single-family mortgage loans; 

20 (E) the establishment of loss mitigation op21 tions that seek to enhance value and prevent, to 

22 greatest extent possible, the need to trigger a 

23 claim on insurance offered by the Corporation 

24 pursuant to this title, including by— 


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1 (i) establishing, by rule, a consistent 

2 process through which borrowers, who have 

3 submitted an initial loan modification re4 quest, will be evaluated by servicers and the 

5 securitization trust for an affordable loan 

6 modification; and 

7 (ii) providing clear guidance regarding 

8 the treatment of second lien holders, taking 

9 into consideration the priority and subordi10 nation of liens under Federal and State 

11 laws; 

12 (F) the advancement of principal and inter13 est payments to investors in the case of a delin14 quency by a borrower until such time as the bor15 rower has made all payments in arrears, the bor16 rower has entered into a repayment plan or 

17 modification, an approved entity or regulated 

18 entity has purchased the loan, or the property se19 curing the eligible single-family mortgage loan 

20 has been liquidated, including specification that 

21 the servicer shall recover advances upon perma22 nent modification of a borrower’s mortgage loan; 

23 (G) the establishment of procedures under 

24 which the servicer may initiate or continue a 


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1 foreclosure, in accordance with applicable Fed2 eral and State laws and regulations that— 

3 (i) take into account— 

4 (I) the servicer’s evaluation of, 

5 and agreements with, borrowers for loss 

6 mitigation options pursuant to sub7 paragraph (E); 

8 (II) potential losses caused by 

9 delays in collateral recovery; and 

10 (III) the need to minimize risks to 

11 the Mortgage Insurance Fund; and 

12 (ii) provide the borrower, upon request, 

13 documentation establishing the right of the 

14 mortgagee to foreclose; 

15 (H) the provision of eligible single-family 

16 mortgage loan information to borrowers, upon 

17 request, including a copy of the pooling and 

18 servicing agreement and securitization trust re19 quirements that address the ability of the 

20 servicer to offer loss mitigation options; and 

21 (I) implementing the terms of any loss miti22 gation and foreclosure prevention as required by 

23 any uniform securitization agreement developed 

24 under section 326. 


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1 (2) ADDITIONAL REQUIRED STANDARDS.—The 

2 standards required under paragraph (1) shall also in3 clude— 

4 (A) the financial history and condition of 

5 the servicer; 

6 (B) the capability of the management of the 

7 servicer; 

8 (C) the general character and fitness of the 

9 officers and directors of the servicer, including 

10 the compliance history of the servicer’s officers 

11 and directors with Federal and State laws and 

12 the rules and regulations promulgated by self13 regulatory organizations (as defined in section 

14 3(a)(26) of the Securities Exchange Act of 1934 

15 (15 U.S.C. 78c(a)(26)), as applicable; 

16 (D) the risk presented by such servicer to 

17 the Mortgage Insurance Fund; and 

18 (E) minimum operational and management 

19 standards for the servicer, including with respect 

20 to— 

21 (i) internal controls; 

22 (ii) recordkeeping; 

23 (iii) internal audit systems; 

24 (iv) the maintenance of adequate li25 quidity and reserves; and 


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1 (v) reporting standards to the Corpora2 tion and investors, including audited finan3 cial statements. 

4 (3) COORDINATION, CONSISTENCY, AND COM5 PARABILITY.—To promote consistency and minimize 

6 regulatory conflict, the Comptroller of the Currency, 

7 the Board of Governors of the Federal Reserve System, 

8 the Federal Deposit Insurance Corporation, the Bu9 reau of Consumer Financial Protection, the National 

10 Credit Union Administration, and the Corporation 

11 shall— 

12 (A) consult and coordinate with each other 

13 in developing and issuing regulations with re14 spect to the rules and standards for the servicing 

15 of eligible single-family mortgage loans; and 

16 (B) review existing regulations with respect 

17 to mortgage loan servicing rules and standards. 

18 (4) CONSULTATION AND COORDINATION WITH

19 STATE REGULATORS.—To promote consistency and 

20 minimize regulatory conflict, the Corporation shall 

21 consult and coordinate with appropriate State regu22 lators in developing and issuing regulations with re23 spect to the rules and standards for the servicing of 

24 eligible single-family mortgage loans. 

25 (b) APPLICATION AND APPROVAL.— 


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1 (1) APPLICATION PROCESS.—The Corporation 

2 shall establish an application process— 

3 (A) in such form and manner and requir4 ing such information as the Corporation may re5 quire, for the approval of a servicer under this 

6 section; and 

7 (B) that does not discriminate against or 

8 otherwise disadvantage small servicers. 

9 (2) APPROVAL.— 

10 (A) IN GENERAL.—The Corporation may 

11 approve any application made pursuant to 

12 paragraph (1) provided the servicer meets the 

13 standards adopted under subsection (a). 

14 (B) PROMPT NOTICE.—The Corporation 

15 shall notify any applicant seeking to become an 

16 approved servicer under this section of the deci17 sion of the Corporation with respect to such ap18 proval as promptly as practicable. 

19 (3) DENIAL.—The Corporation shall have the au20 thority to deny any application made pursuant to 

21 paragraph (1) if an officer or director of the servicer 

22 has, at any time prior to the date of the approval of 

23 such application, been— 


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1 (A) subject to a statutory disqualification 

2 pursuant to section 3(a)(39) of the Securities 

3 Exchange Act of 1934 (15 U.S.C. 78c(a)(39)); or 

4 (B) suspended, removed, or prohibited from 

5 participation pursuant to section 8(g) of the 

6 Federal Deposit Insurance Act (12 U.S.C. 

7 1818(g)), prohibited from certain action pursu8 ant to paragraphs (6) or (7) of section 8(e) of the 

9 Federal Deposit Insurance Act (12 U.S.C. 

10 1818(e)), subject to an action resulting in a 

11 written agreement or other written statement 

12 under section 8(u)(1) of the Federal Deposit In13 surance Act (12 U.S.C. 1818(u)(1)), for which a 

14 violation may be enforced by an appropriate 

15 Federal banking agency, or subject to any final 

16 order issued with respect to any administrative 

17 enforcement proceeding initiated by such agency 

18 under section 8 of the Federal Deposit Insurance 

19 Act (12 U.S.C. 1818). 

20 (4) GRANDFATHERED SERVICERS OF THE EN21 TERPRISES.—Any servicer who was approved to serv22 ice mortgage loans for an enterprise on the date that 

23 is 1 day before the date of enactment of this Act, and 

24 was in good standing as of such date, shall be deemed 

25 to be an approved servicer for purposes of initial 


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1 servicer approval by the Corporation and thereafter 

2 subject to the requirements of this section as an ap3 proved servicer. 

4 (5) SMALL SERVICER EXEMPTION.— 

5 (A) IN GENERAL.—The Corporation shall, 

6 by regulation, provide exemptions to, or adjust7 ments for, the provisions of this section for ap8 proved servicers that service 7,500 or fewer eligi9 ble single-family mortgage loans, in order to re10 duce regulatory burdens while appropriately bal11 ancing protection of the Mortgage Insurance 

12 Fund. 

13 (B) LIMITATION OF EXEMPTION ELIGI14 BILITY.—An approved servicer and its subsidi15 aries and affiliates shall be considered a single 

16 entity for purposes of the exemption under sub17 paragraph (A). 

18 (6) RESPA AMENDMENT.—Section 6 of the Real 

19 Estate Settlement Procedures Act of 1974 (12 U.S.C. 

20 2605) is amended by adding at the end the following: 

21 ‘‘(n) SMALL SERVICER EXEMPTION.— 

22 ‘‘(1) IN GENERAL.—The Bureau shall, by regula23 tion, provide exemptions to, or adjustments for, the 

24 provisions of this section for servicers that service 

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1 ulatory burdens while appropriately balancing con2 sumer protections. 

3 ‘‘(2) LIMITATION OF EXEMPTION ELIGIBILITY.— 

4 An approved servicer and its subsidiaries and affili5 ates shall be considered a single entity for purposes 

6 of the exemption under paragraph (1).’’. 

7 (7) PUBLICATION.—The Corporation shall— 

8 (A) publish a notice in the Federal Register 

9 upon approving any servicer under this section; 

10 and 

11 (B) maintain an updated list of approved 

12 servicers on the website of the Corporation. 

13 (c) REVIEW, SUSPENSION, AND REVOCATION OF AP14 PROVED STATUS.— 

15 (1) REVIEW.— 

16 (A) IN GENERAL.—The Corporation may 

17 examine or review any approved servicer if the 

18 Corporation has substantial reason to believe 

19 that a servicer has engaged in a material viola20 tion or pattern of violations of this Act or the 

21 rules promulgated pursuant to this Act, includ22 ing— 

23 (i) any failure by an approved servicer 

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1 form securitization agreement developed 

2 under section 326; or 

3 (ii) through the identification of any 

4 information indicating abnormal eligible 

5 single-family mortgage loan performance 

6 within the loan portfolio of the approved 

7 servicer. 

8 (B) 2-YEAR COMPLIANCE EXAMINATION.—In 

9 addition to the authority under subparagraph 

10 (A), the Corporation shall conduct an examina11 tion or review of an approved servicer once, but 

12 not more than once, every 2 years, provided how13 ever that such examination or review shall be 

14 limited to compliance with this Act or regula15 tions promulgated under this Act. 

16 (C) COORDINATION.—In conducting an 

17 exam or review authorized pursuant to subpara18 graph (A) or subparagraph (B), the Corporation 

19 shall— 

20 (i) provide reasonable notice to, and 

21 coordinate with, the appropriate Federal 

22 banking agency, the Bureau of Consumer 

23 Financial Protection, or State regulatory 

24 agency, as appropriate, for an approved 

25 servicer that is regulated by such Federal 


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1 banking agency, the Bureau of Consumer 

2 Financial Protection, or State regulatory 

3 agency before commencing an examination 

4 of the approved servicer under this section; 

5 and 

6 (ii) to the fullest extent possible— 

7 (I) rely on the examinations, in8 spections, and reports of the appro9 priate Federal banking agency, the Bu10 reau of Consumer Financial Protec11 tion, or State regulatory agency, as 

12 appropriate, for an approved servicer 

13 that is regulated by such Federal bank14 ing agency, the Bureau of Consumer 

15 Financial Protection, or State regu16 latory agency; 

17 (II) avoid duplication of exam18 ination activities, reporting require19 ments, and requests for information; 

20 and 

21 (III) ensure that approved 

22 servicers are not subject to conflicting 

23 supervisory demands by the Corpora24 tion, appropriate Federal banking 

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1 nancial Protection, or State regulatory 

2 agencies, as appropriate. 

3 (D) SELF CERTIFICATION.— 

4 (i) IN GENERAL.—To facilitate any 

5 exam or review authorized pursuant to sub6 paragraph (A) or subparagraph (B), each 

7 approved servicer shall, on an annual basis 

8 and in accordance with such requirements 

9 as the Corporation may establish, certify in 

10 writing to the Corporation that the ap11 proved servicer is in compliance with the 

12 standards identified under paragraphs (1) 

13 and (2) of subsection (a), all other require14 ments of this Act, and any rules promul15 gated pursuant to this Act. 

16 (ii) PENALTY FOR FALSE OR MIS17 LEADING CERTIFICATIONS.— 

18 (I) ENFORCEMENT.—The Cor19 poration shall have the authority to 

20 impose enforcement penalties with re21 spect to an approved servicer who sub22 mits a certification under clause (i) 

23 that contains false or misleading infor24 mation, in the same manner and to the 

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1 surance Corporation has with respect 

2 to insured depository institutions 

3 under the provisions of subsections (b) 

4 through (n) of section 8 of the Federal 

5 Deposit Insurance Act (12 U.S.C. 

6 1818), except that the penalties under 

7 subsection (j) of such section 8 shall 

8 not apply. 

9 (II) NOTIFICATION.—If the Cor10 poration takes any enforcement action 

11 against an approved servicer, the Cor12 poration shall notify the approved 

13 servicer’s appropriate Federal banking 

14 agency, the Bureau of Consumer Fi15 nancial Protection, or State regulator, 

16 if applicable. 

17 (2) SUSPENSION OR REVOCATION.— 

18 (A) CORPORATION AUTHORITY.—If the Cor19 poration determines, in any exam or review au20 thorized pursuant to paragraph (1), that an ap21 proved servicer no longer meets the standards for 

22 approval, the Corporation may suspend or re23 voke the approved status of such servicer. 

24 (B) RULE OF CONSTRUCTION.—The suspen25 sion or revocation of an approved servicer’s apVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00359 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 proved status under this paragraph shall have no 

2 effect on the status of any covered security. 

3 (3) PUBLICATION.—The Corporation shall— 

4 (A) publish in the Federal Register a list of 

5 any approved servicers who have their approved 

6 status suspended or revoked; and 

7 (B) maintain an updated list of such 

8 servicers on the website of the Corporation. 

9 (d) APPEALS.— 

10 (1) IN GENERAL.— 

11 (A) APPEALS OF DENIALS OF APPLICA12 TION.—A servicer who submits an application 

13 under subsection (b)(1) to become an approved 

14 servicer may appeal a decision of the Corpora15 tion denying such application. 

16 (B) APPEALS OF DENIALS OF BENEFITS OR

17 SUSPENSIONS OF PARTICIPATION.—An approved 

18 servicer may appeal a decision of the Corpora19 tion suspending or revoking the approved status 

20 of such servicer. 

21 (2) FILING OF APPEAL.—Any servicer who files 

22 an appeal under paragraph (1) shall file the appeal 

23 with the Corporation not later than 90 days after the 

24 date on which the person receives notice of the deci25 sion of the Corporation being appealed. 


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1 (3) FINAL DETERMINATION.—The Corporation 

2 shall make a final determination with respect to an 

3 appeal under paragraph (1) not later than 180 days 

4 after the date on which the appeal is filed under 

5 paragraph (2). 

6 (e) TRANSFER OF MORTGAGE SERVICING DUTIES.— 

7 (1) IN GENERAL.—For any eligible single-family 

8 mortgage loan or pool of eligible single-family mort9 gage loans collateralizing a single-family covered se10 curity insured by the Corporation under this title and 

11 in accordance with rules promulgated by the Corpora12 tion, the Corporation may require the approved 

13 servicer of any such eligible single-family mortgage 

14 loan or pool of eligible single-family mortgage loans 

15 to enter into a subservicing arrangement with any 

16 independent specialty servicer approved by the Cor17 poration. 

18 (2) RULES.—The rules required under para19 graph (1) shall— 

20 (A) set forth with clarity the performance 

21 conditions of an approved servicer that would 

22 warrant or necessitate the use of the authority 

23 granted to the Corporation under this subsection; 

24 (B) require that the performance condition 

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1 thority be of such type or character so as to ma2 terially and adversely affect the ability of the 

3 Corporation to recover any amounts owed to the 

4 Corporation; 

5 (C) for purposes of subparagraph (B), de6 fine the term ‘‘materially and adversely affect’’; 

7 (D) require that any approved servicer 

8 whose servicing duties are subject to this sub9 section be provided a reasonable amount of time, 

10 provided that such time does not present a risk 

11 to the Mortgage Insurance Fund, to rebut, ad12 dress, or correct any determination of the Cor13 poration regarding a performance condition de14 scribed under subparagraph (A); 

15 (E) only permit the Corporation to carry 

16 out the authority granted under this subsection 

17 upon expiration of the time-period allowed under 

18 subparagraph (D); 

19 (F) limit the scope of any such authority to 

20 eligible single-family mortgage loans that share 

21 similar underwriting, borrower, and perform22 ance characteristics; 

23 (G) ensure that the scope of any such au24 thority is not applied broadly and without fur25 ther limitation; and 


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1 (H) notwithstanding subparagraphs (B) 

2 through (G), provide that an approved servicer 

3 may be subject to more extensive programmatic 

4 discipline or correction measures, as determined 

5 by the Corporation, if, during any 5-year pe6 riod— 

7 (i) the servicing duties that are the 

8 subject of the current use of the Corpora9 tion’s authority under this subsection marks 

10 the third instance of the use of such author11 ity with respect to the same approved 

12 servicer; and 

13 (ii) with respect to the prior 2 separate 

14 and individual instances of the use of such 

15 authority, the same approved servicer failed 

16 to cure any identified performance condi17 tions or implement corrective measures as 

18 determined by the Corporation pursuant to 

19 subparagraph (D). 

20 (3) CESSATION OF COMPENSATION.—If a transfer 

21 of servicing duties occurs under paragraph (1), the 

22 approved servicer from whom such servicing duties 

23 are extinguished shall cease to receive compensation 

24 for any such servicing activities related to those du25 ties. 


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1 (4) SERVICER SUCCESSION PLANS.— 

2 (A) IN GENERAL.—The Corporation may es3 tablish a succession plan for each approved 

4 servicer, including provisions for— 

5 (i) a specialized servicer to replace the 

6 approved servicer if the performance of the 

7 eligible single-family mortgage loan pool 

8 serviced by such approved servicer deterio9 rates to specified levels; and 

10 (ii) a plan to achieve continuity of 

11 contact for borrowers upon the replacement 

12 of the approved servicer. 

13 (B) RULE OF CONSTRUCTION.—Nothing in 

14 this paragraph shall be construed as authorizing 

15 the Corporation to circumvent, evade, or other16 wise disregard the rules established in para17 graphs (1) and (2) when facilitating a transfer 

18 of servicing rights. 

19 (f) PETITIONS FOR CHANGE OF SERVICER BY PRIVATE

20 MARKET HOLDERS.— 

21 (1) DEVELOPMENT OF PROCESS.—The Corpora22 tion shall develop a process by which private market 

23 holders of the first loss position in a single-family 

24 covered security may petition the Corporation for a 

25 change in approved servicers, including specialized 


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1 servicers for individual eligible single-family mort2 gage loans, if the private market holders can dem3 onstrate that its investment was not appropriately 

4 protected by the current approved servicer, including 

5 by failing to meet any standard or requirement iden6 tified under paragraphs (1) and (2) of subsection (a). 

7 (2) CESSATION OF COMPENSATION.—If a change 

8 in approved servicers is approved under paragraph 

9 (1)— 

10 (A) the change must occur within 30 days 

11 after the petition is approved by the Corpora12 tion; and 

13 (B) once the change required under sub14 paragraph (A) has occurred, the approved 

15 servicer from whom such servicing rights are ex16 tinguished shall cease to receive compensation for 

17 any such servicing activities related to those 

18 rights. 

19 (g) NOTICE OF TRANSFER OF SERVICING RIGHTS BY

20 CURRENT SERVICER.— 

21 (1) NOTICE TO FMIC.—The Corporation shall de22 velop a process by which an approved servicer shall 

23 provide notice to the Corporation of any transfer of 

24 any servicing rights of such approved servicer to an25 other approved servicer. 


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1 (2) AUTHORITY OF FMIC TO PREVENT, HALT, OR

2 RESCIND A TRANSFER.—The process required to be de3 veloped under paragraph (1) shall include the devel4 opment of procedures to permit the Corporation to 

5 prevent, halt, or rescind any transfer of servicing 

6 rights from an approved servicer to a servicer that is 

7 not approved to service eligible single-family mortgage 

8 loans under this section or to any servicer whose ap9 proved status has been suspended or revoked pursuant 

10 to subsection (c)(2). 

11 (h) GENERAL AUTHORITY WITH RESPECT TO THE

12 TRANSFER OF SERVICING RIGHTS.—The Corporation may 

13 develop such other standards with respect to the transfer 

14 of servicing rights by approved servicers as the Corporation 

15 determines necessary and appropriate to facilitate an or16 derly transfer of servicing rights after the suspension or rev17 ocation of the approved status of a servicer pursuant to sub18 section (c)(2). 

19 (i) STUDY OF SERVICER COMPENSATION RELATED TO

20 NON-PERFORMING SINGLE-FAMILY MORTGAGE LOANS.— 

21 (1) IN GENERAL.—The Corporation shall carry 

22 out a study of servicing compensation for non-per23 forming single-family mortgage loans, including al24 ternatives to existing servicing compensation struc25 tures. 


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1 (2) RECOMMENDATIONS.—The study required 

2 under paragraph (1) shall include recommendations 

3 for the optimal structure of servicer compensation, in 

4 order to— 

5 (A) improve service for borrowers; 

6 (B) reduce financial risk to servicers; and 

7 (C) provide flexibility for guarantors to bet8 ter manage non-performing single-family mort9 gage loans. 

10 (3) REPORT.—Not later than 1 year after the 

11 date of enactment of this Act, the Chairperson shall 

12 issue a report to the Congress containing any findings 

13 and determinations made in carrying out the study 

14 required under paragraph (1). 

15 (j) RULE OF CONSTRUCTION.—Nothing in this section 

16 shall prohibit a mortgage originator from retaining rights 

17 to service the eligible single-family mortgage loans it origi18 nated, provided that the mortgage originator— 

19 (1) meets the standards to be an approved 

20 servicer under subsection (a); or 

21 (2) qualifies for an exemption under subsection 

22 (b)(5). 

23 SEC. 315. AUTHORITY TO ESTABLISH AND APPROVE SMALL 

24 LENDER MUTUALS. 

25 (a) ESTABLISHMENT OF SMALL LENDER MUTUALS.— 


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1 (1) IN GENERAL.—The Corporation shall estab2 lish 1 entity known as the ‘‘Small Lender Mutual’’, 

3 which shall be an approved small lender mutual, 

4 owned by and operated for the benefit of its members, 

5 for the purposes of subsection (b). 

6 (2) APPROVAL OF OTHER SMALL LENDER

7 MUTUALS.—The Corporation shall, by regulation, es8 tablish standards for the approval by the Corporation 

9 of such other small lender mutuals as may be nec10 essary to facilitate the purposes described in sub11 section (b). 

12 (b) PURPOSES.—The purpose of the Small Lender Mu13 tual established under subsection (a)(1) and any small lend14 er mutual approved under subsection (a)(2) (in this section 

15 collectively referred to as a ‘‘small lender mutual’’) shall 

16 be as follows: 

17 (1) To address the needs of small mortgage lend18 ers with respect to covered securities. 

19 (2) To purchase eligible mortgage loans to 

20 securitize a covered security from its member partici21 pants— 

22 (A) for cash, on a single loan basis; or 

23 (B) through the sale of a portion of a multi24 lender pool or multi-guarantor pool collateralized 


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1 by eligible mortgage loans securitized in a cov2 ered security. 

3 (3) To obtain all necessary and appropriate 

4 credit enhancements for covered securities to support 

5 the lending activities of small mortgage lenders. 

6 (4) To implement policies and procedures that 

7 ensure that the access rules and fees of any small 

8 lender mutual are not prohibitive and do not dis9 criminate against originators of eligible mortgage 

10 loans or any entity that aggregates eligible mortgage 

11 loans on the basis of size, composition, business line, 

12 or loan volume. 

13 (5) To appropriately manage the risk of the 

14 Small Lender Mutual to ensure the continued safety 

15 and soundness of such mutual. 

16 (c) PROVISIONS TO ENSURE THE EFFECTIVE OPER17 ATIONS OF SMALL LENDER MUTUALS.— 

18 (1) REQUIREMENT TO ASSESS NEEDS OF SMALL

19 LENDER MUTUAL.—Not later than 1 year after the 

20 date of enactment of this Act, the Federal Housing 

21 Finance Agency shall conduct an assessment of the 

22 intellectual property, technology, infrastructure, and 

23 processes of the enterprises relating to the operation 

24 and maintenance of the systems needed to ensure 

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1 gage market to determine the needs of the Small 

2 Lender Mutual established under subsection (a)(1). 

3 The assessment required under this paragraph shall 

4 be submitted to the Transition Committee established 

5 under section 404, or the Board if confirmed pursu6 ant to section 404(d), and included in the transition 

7 plan required under section 602. 

8 (2) AUTHORITY TO MANAGE DISPOSITION OF EN9 TERPRISE INFRASTRUCTURE.—After the agency trans10 fer date and before the system certification date, the 

11 Federal Housing Finance Agency, consistent with 

12 title VI— 

13 (A) shall dispose of the intellectual prop14 erty, technology, infrastructure, and processes of 

15 the enterprises relating to the operation and 

16 maintenance of the systems needed for small 

17 mortgage lenders to access the secondary mort18 gage market; and 

19 (B) may manage such disposition through 

20 the sale, transfer, licensing, or leasing of such in21 tellectual property, technology, infrastructure, 

22 and processes of an enterprise to the Small Lend23 er Mutual established under subsection (a)(1) to 

24 ensure that the Small Lender Mutual can access 


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1 the secondary mortgage market and fulfill the 

2 purposes of the section. 

3 (3) TRANSFER OF NECESSARY TECHNOLOGY.— 

4 After the agency transfer date and before the system 

5 certification date, the Federal Housing Finance Agen6 cy, consistent with section 604(h), may transfer to a 

7 subsidiary or subsidiaries of the enterprises any func8 tion, activity, infrastructure, property, including in9 tellectual property, technology, or any other object or 

10 service of an enterprise that the Corporation deter11 mines is necessary and available for the Small Lender 

12 Mutual established under subsection (a)(1) to carry 

13 out its activities and operations. 

14 (4) INITIAL CAPITALIZATION.— 

15 (A) IN GENERAL.—The initial capital nec16 essary for the Small Lender Mutual to be estab17 lished under subsection (a)(1) to purchase a sub18 sidiary established under paragraph (3) or to 

19 purchase, lease, or license the systems under 

20 paragraph (2)(B), and to perform all other ac21 tivities and functions of the Small Lender Mu22 tual, including the ability of the Small Lender 

23 Mutual to operate a cash window for the pur24 chase of individual eligible mortgage loans, shall 

25 be provided by the enterprises. 


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1 (B) DETERMINATION OF AMOUNT.—The 

2 amount of any initial capital required to be pro3 vided by the enterprises under subparagraph (A) 

4 shall be determined by the Corporation based on 

5 the needs of the Small Lender Mutual to carry 

6 out its activities and functions, as well as by the 

7 current volume of business from the enterprise8 approved sellers that are eligible to participate, 

9 pursuant to subsection (e), as a member of the 

10 Small Lender Mutual. 

11 (C) REPAYMENT.— 

12 (i) IN GENERAL.—The amount of any 

13 initial capital required to be provided by 

14 the enterprises under subparagraph (A) 

15 shall be repaid by the Small Lender Mutual 

16 established under subsection (a)(1) on a 

17 schedule jointly agreed to by the Small 

18 Lender Mutual and the Corporation. 

19 (ii) REPAYMENT PERIOD.— 

20 (I) IN GENERAL.—The repayment 

21 of any amounts required under clause 

22 (i) shall be completed within 7 years 

23 from the system certification date. 

24 (II) AUTHORITY TO EXTEND RE25 PAYMENT PERIOD.—The Corporation, 


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1 after consultation with the mutual 

2 board of the Small Lender Mutual es3 tablished under subsection (a)(1), may 

4 extend the repayment period set forth 

5 under subclause (I) for an additional 3 

6 years, if, in the sole discretion of the 

7 Corporation, the Corporation deems 

8 such extension necessary. 

9 (d) ENSURING FAIR COMPETITION.—The Federal 

10 Housing Finance Agency may, consistent with the public 

11 interest, for the maintenance of fair competition among all 

12 small lender mutuals, and for the purposes set forth in this 

13 section, provide, through a licensing agreement or other 

14 agreement, access to any technology or platform transferred 

15 pursuant to subsection (c)(3). 

16 (e) ELIGIBILITY.— 

17 (1) IN GENERAL.—Eligibility to participate as a 

18 member in any small lender mutual shall be limited 

19 to any— 

20 (A) insured depository institution having 

21 less than $500,000,000,000 in total consolidated 

22 assets at the time of the initial participation of 

23 the institution in the small lender mutual; 

24 (B) non-depository mortgage originator 

25 that— 


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1 (i) has a minimum net worth of 

2 $2,500,000; 

3 (ii) has annual eligible mortgage loan 

4 production of less than $100,000,000,000; 

5 and 

6 (iii)(I) prior to the system certification 

7 date, was approved to sell mortgage loans to 

8 an enterprise on the date that is 1 day 

9 prior to the establishment or approval of the 

10 small lender mutual, provided that such 

11 originator was in good standing as of such 

12 date; or 

13 (II) meets the standards established by 

14 the small lender mutual pursuant to sub15 section (l); 

16 (C) Community Development Financial In17 stitution that meets the standards established by 

18 the small lender mutual pursuant to subsection 

19 (l); 

20 (D) mission-based nonprofit lender that 

21 meets the standards established by the small 

22 lender mutual pursuant to subsection (l); 

23 (E) housing finance agency that meets the 

24 standards established by the small lender mutual 

25 pursuant to subsection (l); and 


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1 (F) Federal Home Loan Bank. 

2 (2) ACCESS OF ORIGINATORS.—An entity eligible 

3 to participate as a member of a small lender mutual 

4 may not be required to become an approved entity 

5 under this Act to access any function or operation of 

6 a small lender mutual. 

7 (3) RULE OF CONSTRUCTION.—Each entity eligi8 ble to participate as a member of a small lender mu9 tual under this section shall meet all applicable 

10 standards and requirements under this Act. 

11 (f) REPORT.—Not later than 2 years after the date on 

12 which the Small Lender Mutual is established under sub13 section (a)(1), the Corporation shall— 

14 (1) conduct and complete a study evaluating the 

15 criteria for eligibility as a member of the Small 

16 Lender Mutual under subparagraphs (A) and (B) of 

17 subsection (e)(1); and 

18 (2) submit a report to Congress, which shall in19 clude an evaluation of— 

20 (A) whether the participation levels of mem21 bers of the Small Lender Mutual under subpara22 graphs (A) and (B) of subsection (e)(1) are suffi23 cient to create the economies of scale and liquid24 ity necessary for competitive pricing in the sec25 ondary mortgage market; 


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1 (B) the ability of the Small Lender Mutual 

2 to ensure access for small mortgage lenders to the 

3 secondary mortgage market; 

4 (C) the impact of the asset and net worth 

5 eligibility criteria established in subparagraphs 

6 (A) and (B) of subsection (e)(1) on the size, com7 petitiveness, and membership of the Small Lend8 er Mutual; 

9 (D) whether the eligibility thresholds estab10 lished in subparagraphs (A) and (B) of sub11 section (e)(1) are facilitating or impeding the 

12 creation of a robust market for approved guaran13 tors; 

14 (E) whether the establishment of other eligi15 bility criteria in subparagraphs (A) and (B) of 

16 subsection (e)(1) would better serve members of 

17 the Small Lender Mutual, including such other 

18 criteria as— 

19 (i) a different asset threshold; 

20 (ii) an annual mortgage loan origina21 tion threshold; or 

22 (iii) a mortgage loan production cap; 

23 (F) whether the Small Lender Mutual is 

24 fully meeting the cash window needs of small 

25 mortgage lenders; and 


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1 (G) whether the Small Lender Mutual is 

2 adequately capitalized to meet the needs of mem3 bers of the Small Lender Mutual and protect the 

4 Mortgage Insurance Fund. 

5 (g) ELIGIBILITY THRESHOLDS.—Beginning on the 

6 date on which the Corporation submits the report required 

7 under subsection (f), the Corporation may adjust the eligi8 bility thresholds established in subparagraphs (A) and (B) 

9 of subsection (e)(1) if the Corporation, in consultation with 

10 the mutual board of a small lender mutual, determines 

11 that— 

12 (1) the thresholds do not facilitate the purposes 

13 of the small lender mutual as described in subsection 

14 (b); 

15 (2) the thresholds restrict small multifamily 

16 lenders’ participation in the small lender mutual; 

17 (3) the thresholds do not foster competition in the 

18 secondary mortgage market; or 

19 (4) the thresholds pose a risk to the Mortgage In20 surance Fund. 

21 (h) REASSESSMENT.—Beginning on the date on which 

22 the Corporation submits the report required under sub23 section (f), the Corporation shall, on an annual basis, reas24 sess the Small Lender Mutual’s eligibility thresholds. 


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1 (i) PLATFORM MEMBERSHIP.—Each small lender mu2 tual shall be a member of the Securitization Platform. 

3 (j) FUNDING AUTHORITY.— 

4 (1) AUTHORITY TO ESTABLISH MEMBERSHIP

5 FEES.—The mutual board of each small lender mu6 tual shall charge and collect fees from its member 

7 participants— 

8 (A) for membership in the small lender mu9 tual; and 

10 (B) to cover the costs of— 

11 (i) in the case of the Small Lender Mu12 tual established under subsection (a)(1)— 

13 (I) the purchase of any function, 

14 activity, infrastructure, property, in15 cluding intellectual property, tech16 nology, or any other object or service 

17 from an enterprise pursuant to sub18 section (c); 

19 (II) any initial capital for the es20 tablishment of a cash window; and 

21 (III) the repayment of amounts 

22 required under subsection (c)(4)(C), 

23 provided that any fee charged to cover 

24 such repayment amounts is applicable 

25 only to those member participants 


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1 identified and approved after the estab2 lishment date of the Small Lender Mu3 tual and before the repayment date es4 tablished under subsection 

5 (c)(4)(C)(ii); and 

6 (ii) the continued operation of the 

7 small lender mutual, including to build 

8 capital reserves and to manage risks. 

9 (2) EQUITABLE COMPENSATION OF CERTAIN

10 MEMBER PARTICIPANTS OF SMALL LENDER MU11 TUAL.—The mutual board of the Small Lender Mu12 tual established under subsection (a)(1) may, in addi13 tion to any fee required under paragraph (1), charge 

14 and collect a fee from member participants identified 

15 and approved after the repayment date established 

16 under subsection (c)(4)(C)(ii) to compensate member 

17 participants identified and approved prior to such re18 payment date for the share of the fees paid by such 

19 member participants to cover the cost of repayment 

20 amounts pursuant to paragraph (1)(B)(i)(III). 

21 (3) AUTHORITY TO INCREASE OR DECREASE

22 FEES.—The mutual board of each small lender mu23 tual may, in its discretion and upon consultation 

24 with the Corporation, increase or decrease any fee au25 thorized under paragraph (1). 


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1 (4) PROVISION OF FEE SCHEDULE TO FMIC.— 

2 The mutual board of each small lender mutual shall, 

3 on an annual basis and upon any increase or de4 crease of any fee authorized under paragraph (1), 

5 provide the Corporation with a schedule of the fees 

6 charged by the small lender mutual to its member 

7 participants. 

8 (5) LIMITATION.—The fees authorized under 

9 paragraph (1)— 

10 (A) shall be equitably assessed; and 

11 (B) shall not discriminate against origina12 tors of eligible mortgage loans or any entity that 

13 aggregates eligible mortgage loans on the basis of 

14 size, composition, business line, or loan volume. 

15 (6) AUTHORITY TO REDUCE FEES.— 

16 (A) IN GENERAL.—If a small lender mu17 tual, in consultation with the Corporation, deter18 mines that any fee or fees authorized under this 

19 subsection are prohibitive or discriminatory, the 

20 small lender mutual may, in the interest of 

21 building the membership of the small lender mu22 tual, lower any such fee or fees. 

23 (B) REASONABLENESS AND CONSIDER24 ATIONS.—Each small lender mutual shall, in 

25 consultation with the Corporation, set reasonable 


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1 criteria for any determination authorized under 

2 subparagraph (A). The criteria required to be set 

3 forth under this subparagraph shall consider the 

4 potential impact on the financial safety and 

5 soundness of the small lender mutual. 

6 (k) GOVERNANCE.— 

7 (1) RECOGNITION OF IMPORTANT ROLE OF

8 SMALLER INSTITUTIONS.—The mutual board of each 

9 small lender mutual, in consultation with the Cor10 poration, shall take all reasonable steps necessary to 

11 establish governance provisions that reflect the impor12 tant role in the mortgage market played by the mem13 ber participants of small lender mutuals. 

14 (2) MUTUAL BOARD.— 

15 (A) IN GENERAL.—The management of each 

16 small lender mutual shall be vested in a board 

17 of 15 directors (in this section referred to as the 

18 ‘‘mutual board’’), which shall include representa19 tives of approved member participants of the 

20 small lender mutual. 

21 (B) APPOINTMENT OF MUTUAL BOARD OF

22 SMALL LENDER MUTUAL.— 

23 (i) INITIAL APPOINTMENT.—The Cor24 poration shall make initial appointments of 

25 the members of the mutual board for the 


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1 Small Lender Mutual established under sub2 section (a)(1). Each such initial appoint3 ment shall be for a term of 1 year. 

4 (ii) APPOINTMENTS.—Upon expiration 

5 of the 1-year period set forth under clause 

6 (i), the member participants of the Small 

7 Lender Mutual established under subsection 

8 (a)(1) shall elect the members of the mutual 

9 board of the Small Lender Mutual from 

10 within the membership of the Small Lender 

11 Mutual. 

12 (C) INDEPENDENT DIRECTORS.—The mu13 tual board of each small lender mutual shall 

14 have at least 1 independent director to serve the 

15 public interest. The independent director re16 quired under this subparagraph shall have a his17 tory of representing consumer or community in18 terests on banking services, credit needs, housing, 

19 or financial consumer protections. 

20 (D) REPRESENTATION ON BOARD.—No 

more than 1 21 ⁄3 of the directors of the mutual 

22 board of the Small Lender Mutual may be held 

23 by a single category of member participants, 

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1 depository mortgage originators, Federal Home 

2 Loan Banks, housing finance agencies, Commu3 nity Development Financial Institutions, and 

4 mission-based nonprofit lenders. 

5 (3) REPRESENTATION TO THE PLATFORM.—The 

6 mutual board of the Small Lender Mutual shall select, 

7 on a rotating basis from representative of its direc8 tors, an individual to serve as a Platform Director 

9 under section 322. 

10 (4) REPRESENTATION OF MULTIPLE SMALL

11 LENDER MUTUALS.—If more than 1 small lender mu12 tual is approved under this section, each small lender 

13 mutual shall rotate the representation position under 

14 section 322. 

15 (5) NO PREFERENCES FOR SIZE.—Member par16 ticipants of each small lender mutual shall have equal 

17 voting rights on any matters before the small lender 

18 mutual of which it is a member, regardless of the size 

19 of the individual member participant. 

20 (6) RULE OF CONSTRUCTION.—For purposes of 

21 this subsection, a member participant and its subsidi22 aries, joint offices, and affiliates shall be treated as a 

23 single entity and shall be entitled to cast a single vote 

24 on any matters before the small lender mutual of 

25 which it is a member. 


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1 (l) APPROVAL OF MEMBER PARTICIPANTS.— 

2 (1) IN GENERAL.—Each mutual board estab3 lished under subsection (k) shall develop standards 

4 and procedures to approve the application of member 

5 participants in the small lender mutual. 

6 (2) CONTENT OF STANDARDS.—The standards re7 quired under paragraph (1) shall include standards 

8 relating to the— 

9 (A) prospective members’ compliance his10 tory with Federal and State law; 

11 (B) safety and soundness of prospective 

12 member participants; and 

13 (C) mortgage underwriting practices of the 

14 prospective member. 

15 (3) COORDINATION WITH OTHER REGULATORS.— 

16 (A) CONSULTATION.—In approving any 

17 prospective member to become a member partici18 pant in a small lender mutual, the mutual board 

19 of that small lender mutual may consult and 

20 share information with— 

21 (i) the appropriate Federal banking 

22 agency and State regulator of the prospec23 tive member; or 

24 (ii) the Bureau of Consumer Financial 

25 Protection, if the Bureau of Consumer FiVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00384 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 nancial Protection has supervisory author2 ity over the prospective member. 

3 (B) PRIVILEGE PRESERVED.—Information 

4 shared pursuant to subparagraph (A) shall not 

5 be construed as waiving, destroying, or otherwise 

6 affecting any privilege or confidential status that 

7 a prospective member may claim with respect to 

8 such information under Federal or State law as 

9 to any person or entity other than the board of 

10 directors or its appropriate Federal banking 

11 agency. 

12 (C) RULE OF CONSTRUCTION.—No provi13 sion of this subsection may be construed as im14 plying or establishing that— 

15 (i) any prospective member waives any 

16 privilege applicable to information that is 

17 shared or transferred under any cir18 cumstance to which this subsection does not 

19 apply; or 

20 (ii) any prospective would waive any 

21 privilege applicable to any information by 

22 submitting the information directly to its 

23 primary Federal or State regulator, but for 

24 this subsection. 


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1 (4) STREAMLINING FOR EXISTING LENDERS AP2 PROVED BY THE ENTERPRISES.—Each mutual board 

3 established under subsection (k) shall develop stream4 lined membership standards and procedures for any 

5 lender who was approved to sell mortgage loans to an 

6 enterprise on the date that is 1 day before the date 

7 of enactment of this Act, and was in good standing 

8 as of such date. 

9 (m) CASH WINDOW.— 

10 (1) REQUIREMENT FOR SMALL LENDER

11 MUTUALS.—Each small lender mutual shall have the 

12 ability to operate a cash window for the purchase of 

13 individual eligible single-family mortgage loans. 

14 (2) STANDARDS TO ENSURE SAFETY AND SOUND15 NESS.—To ensure the safety and soundness of each 

16 small lender mutual, the Corporation shall establish 

17 standards for the regulation, supervision, and oper18 ation of each cash window required under paragraph 

19 (1). 

20 (3) LICENSING OF CASH WINDOW TECH21 NOLOGY.—The Federal Housing Finance Agency may, 

22 consistent with the public interest and for the mainte23 nance of fair competition among entities providing 

24 cash window services, provide, through a licensing 

25 agreement or other agreement, access to any techVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00386 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 nology or platform relating to a cash window trans2 ferred under paragraph (3) of subsection (c). 

3 (n) RECOGNITION OF DISTINCTION BETWEEN SMALL

4 LENDER MUTUAL COMPANIES AND OTHER

5 AGGREGATORS.—Prior to promulgating any regulation or 

6 taking any other formal or informal action of general appli7 cability, including the issuance of an advisory document 

8 or examination guidance, the Corporation shall consider the 

9 differences between small lender mutuals and other ap10 proved aggregators with respect to— 

11 (1) the cooperative ownership structure of small 

12 lender mutuals; 

13 (2) the purposes of small lender mutuals as set 

14 forth in subsection (b); 

15 (3) the capital structure of small lender mutuals; 

16 and 

17 (4) any other differences that the Corporation 

18 considers appropriate. 

19 (o) COORDINATION OF SERVICER APPROVAL.—Each 

20 mutual board established under subsection (k) may coordi21 nate with the Corporation to facilitate the application proc22 ess for its member participants to become approved servicers 

23 of the Corporation pursuant to section 314. 


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1 (p) MULTIFAMILY STUDY.—Not later than 1 year after 

2 the agency transfer date, the Corporation shall conduct and 

3 complete a study to determine— 

4 (1) the access needs of small multifamily mort5 gage lenders to the secondary multifamily mortgage 

6 market; and 

7 (2) whether the Small Lender Mutual established 

8 under subsection (a)(1) can meet the access needs of 

9 small multifamily mortgage lenders. 

10 (q) PROHIBITED ACTIVITIES.—A small lender mutual 

11 may not guarantee any mortgage loans or mortgage-backed 

12 securities. 

13 SEC. 316. SUPERVISORY ACTIONS RELATED TO CAPITAL 

14 AND SOLVENCY. 

15 (a) CAPITAL CLASSIFICATIONS.— 

16 (1) ESTABLISHMENT.—The Corporation shall es17 tablish, by regulation, capital classifications regard18 ing the levels of capital maintained by each type of 

19 covered entity. 

20 (2) CLASSES.—In carrying out the requirement 

21 under paragraph (1), the Corporation shall classify 

22 covered entities according to the following capital 

23 classifications: 

24 (A) WELL CAPITALIZED.—A covered entity 

25 shall be classified as well capitalized if the entity 


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1 meets or exceeds all of the capital and solvency 

2 standards required under section 309(b). 

3 (B) ADEQUATELY CAPITALIZED.—A covered 

4 entity shall be classified as adequately capital5 ized if the entity meets or exceeds some, but not 

6 all, of the capital and solvency standards re7 quired under section 309(b). 

8 (C) UNDERCAPITALIZED.—A covered entity 

9 shall be classified as undercapitalized if the enti10 ty fails to meet any of the capital and solvency 

11 standards required under section 309(b). 

12 (D) SIGNIFICANTLY UNDERCAPITALIZED.— 

13 A covered entity shall be classified as signifi14 cantly undercapitalized if the entity is signifi15 cantly below any of the capital and solvency 

16 standards required under section 309(b). 

17 (E) CRITICALLY UNDERCAPITALIZED.—A 

18 covered entity shall be classified as critically 

19 undercapitalized if the entity is critically below 

20 any of the capital and solvency standards re21 quired under section 309(b). 

22 (3) DISCRETIONARY CLASSIFICATION.— 

23 (A) GROUNDS FOR RECLASSIFICATION.— 

24 The Corporation may reclassify the capital clas25 sification of a covered entity if— 


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1 (i) at any time, the Corporation deter2 mines, in writing, that the covered entity is 

3 engaging in conduct that could result in a 

4 rapid depletion of capital held by the cov5 ered entity; 

6 (ii) after notice and an opportunity for 

7 hearing, the Corporation determines that 

8 the covered entity is in an unsafe or un9 sound condition; 

10 (iii) pursuant to the requirements of 

11 this title, the Corporation deems the covered 

12 entity to be engaging in an unsafe or un13 sound practice; 

14 (iv) the covered entity does not submit 

15 a capital restoration plan within the appli16 cable time period that is substantially in 

17 compliance with regulations for such plans 

18 adopted by the Corporation; 

19 (v) the Corporation does not approve 

20 the capital restoration plan submitted by 

21 the covered entity; or 

22 (vi) the Corporation determines that 

23 the covered entity has failed to comply with 

24 the capital restoration plan and fulfill the 


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1 schedule for the plan approved by the Cor2 poration in any material respect. 

3 (B) RECLASSIFICATION.—In addition to 

4 any other action authorized under this title, in5 cluding the reclassification of a covered entity for 

6 any reason not specified in this subsection, if the 

7 Corporation takes any action described in sub8 paragraph (A), the Corporation may classify a 

9 covered entity as appropriate. 

10 (4) RESTRICTION ON CAPITAL DISTRIBUTIONS.— 

11 (A) IN GENERAL.—A covered entity shall 

12 make no capital distribution if, after making the 

13 distribution, the covered entity would be classi14 fied as anything other than well capitalized or 

15 adequately capitalized. 

16 (B) EXCEPTION.—Notwithstanding sub17 paragraph (A), the Corporation may permit a 

18 covered entity, to the extent appropriate or ap19 plicable, to repurchase, redeem, retire, or other20 wise acquire shares or ownership interests if the 

21 repurchase, redemption, retirement, or other ac22 quisition— 

23 (i) is made in connection with the 

24 issuance of additional shares or obligations 


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1 of the covered entity in at least an equiva2 lent amount; 

3 (ii) will reduce the financial obliga4 tions of the covered entity or otherwise im5 prove the financial condition of the covered 

6 entity; 

7 (iii) will enhance the ability of the cov8 ered entity to promptly meet the minimum 

9 capital level for the covered entity; 

10 (iv) contributes to the long-term finan11 cial safety and soundness of the covered en12 tity; or 

13 (v) furthers the public interest. 

14 (b) ADEQUATELY CAPITALIZED.—If a covered entity is 

15 classified as adequately capitalized: 

16 (1) MANDATORY CAPITAL RESTORATION PLAN.— 

17 The Corporation shall require the covered entity to— 

18 (A) submit to the Corporation a capital res19 toration plan; and 

20 (B) implement the plan after approval. 

21 (2) DISCRETIONARY SAFEGUARDS.—The Cor22 poration may take, with respect to an adequately cap23 italized covered entity, any of the actions authorized 

24 to be taken under subsection (c) with respect to an 

25 undercapitalized covered entity, if the Corporation deVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00392 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 termines that such actions are necessary to carry out 

2 the purposes of this subtitle. 

3 (c) UNDERCAPITALIZED.—If a covered entity is classi4 fied as undercapitalized: 

5 (1) MANDATORY CAPITAL RESTORATION PLAN.— 

6 The Corporation shall require the covered entity to— 

7 (A) submit to the Corporation a capital res8 toration plan; and 

9 (B) implement the plan after approval. 

10 (2) RESTRICTION ON ASSET GROWTH.—An 

11 undercapitalized covered entity shall not permit its 

12 average total assets during any calendar quarter to 

13 exceed its average total assets during the preceding 

14 calendar quarter, unless— 

15 (A) the Corporation has accepted the capital 

16 restoration plan of the covered entity; 

17 (B) any increase in total assets is consistent 

18 with the capital restoration plan; and 

19 (C) the ratio of capital to total assets of the 

20 covered entity increases during the calendar 

21 quarter at a rate sufficient to enable the covered 

22 entity to become adequately capitalized within a 

23 reasonable time. 

24 (3) PRIOR APPROVAL OF ACQUISITIONS AND NEW

25 ACTIVITIES.—An undercapitalized covered entity shall 


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1 not, directly or indirectly, acquire any interest in 

2 any entity or engage in a new activity, unless— 

3 (A) the Corporation has accepted the capital 

4 restoration plan of the covered entity, the covered 

5 entity is implementing the plan, and the Cor6 poration determines that the proposed action is 

7 consistent with and will further the achievement 

8 of the plan; or 

9 (B) the Corporation determines that the 

10 proposed action will further the purpose of this 

11 section. 

12 (4) REQUIRED MONITORING.—The Corporation 

13 shall— 

14 (A) closely monitor the condition of any 

15 undercapitalized covered entity; 

16 (B) closely monitor compliance with the 

17 capital restoration plan, restrictions, and re18 quirements imposed on an undercapitalized cov19 ered entity under this section; and 

20 (C) periodically review the capital restora21 tion plan, restrictions, and requirements appli22 cable to an undercapitalized covered entity to de23 termine whether the plan, restrictions, and re24 quirements are achieving the purpose of this sec25 tion. 


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1 (5) DISCRETIONARY SAFEGUARDS.—The Cor2 poration may take, with respect to an undercapital3 ized covered entity, any of the actions authorized to 

4 be taken under subsection (d) with respect to a sig5 nificantly undercapitalized covered entity, if the Cor6 poration determines that such actions are necessary to 

7 carry out the purpose of this subtitle. 

8 (d) SIGNIFICANTLY UNDERCAPITALIZED.—If a covered 

9 entity is classified as significantly undercapitalized: 

10 (1) MANDATORY CAPITAL RESTORATION PLAN.— 

11 The Corporation shall require the covered entity to— 

12 (A) submit to the Corporation a capital res13 toration plan; and 

14 (B) implement the plan after approval. 

15 (2) DISCRETIONARY SUPERVISORY ACTIONS FOR

16 SIGNIFICANTLY UNDERCAPITALIZED COVERED ENTI17 TIES.—In addition to any other actions taken by the 

18 Corporation, the Corporation may, at any time, take 

19 any of the following actions with respect to a covered 

20 entity that is classified as significantly undercapital21 ized: 

22 (A) LIMITATION ON OBLIGATIONS.—Limit 

23 any increase in, or order the reduction of, any 

24 obligations of the covered entity, including off25 balance sheet obligations. 


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1 (B) LIMITATION ON GROWTH.—Limit or 

2 prohibit the growth of the assets of the covered 

3 entity, or require reduction of the assets of the 

4 covered entity. 

5 (C) ACQUISITION OF NEW CAPITAL.—Re6 quire the covered entity to raise new capital in 

7 a form and amount determined by the Corpora8 tion. 

9 (D) RESTRICTION ON ACTIVITIES.—Require 

10 the covered entity to terminate, reduce, or modify 

11 any activity that creates excessive risk to the cov12 ered entity, as determined by the Corporation. 

13 (E) IMPROVEMENT OF MANAGEMENT.—Take 

14 1 or more of the following actions: 

15 (i) NEW ELECTION OF BOARD.—Order 

16 or hold a new election for the board of di17 rectors of the covered entity. 

18 (ii) DISMISSAL OF DIRECTORS OR EX19 ECUTIVE OFFICERS.—Require the covered 

20 entity to dismiss from office any director or 

21 executive officer who had held office for 

22 more than 180 days immediately before the 

23 date on which the covered entity became 

24 undercapitalized. 


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1 (iii) EMPLOY QUALIFIED EXECUTIVE

2 OFFICERS.—Require the covered entity to 

3 employ qualified executive officers (who, if 

4 the Corporation so specifies, shall be subject 

5 to approval by the Corporation). 

6 (e) CRITICALLY UNDERCAPITALIZED.— 

7 (1) REGULATED ENTITY.—The Corporation shall 

8 have the authority to resolve a critically under9 capitalized regulated entity pursuant to section 1367 

10 of the Safety and Soundness Act (12 U.S.C. 4617), as 

11 amended by this Act. 

12 (2) COVERED ENTITY.—The Corporation shall 

13 have the authority to resolve a covered entity that is 

14 classified as failing or critically undercapitalized 

15 pursuant to the resolution authority granted to the 

16 Corporation under section 311(h), section 312(h), sec17 tion 313(g), and section 703(i), as applicable. 

18 SEC. 317. OWNERSHIP, ACQUISITIONS, AND OPERATIONS OF 

19 COVERED ENTITIES. 

20 (a) OWNERSHIP AND ACQUISITIONS OF COVERED EN21 TITIES.—It shall be unlawful, except with the prior ap22 proval of the Corporation, for any person to— 

23 (1) directly or indirectly own, control, or have 

24 power to vote 10 percent of any class of voting shares 

25 of any covered entity (except to the extent that voting 


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1 stock is required to be purchased by Federal statute 

2 as a condition to participate in the programs of the 

3 covered entity); 

4 (2) control in any manner the election of a ma5 jority of the directors or trustees of any covered enti6 ty; 

7 (3) exercise a controlling influence over the man8 agement or policies of any covered entity; 

9 (4) merge or consolidate with any covered entity; 

10 or 

11 (5) divest a covered entity, or any substantial 

12 line of business of a covered entity, into any sur13 viving entity. 

14 (b) APPLICATION AND APPROVAL PROCESS.— 

15 (1) IN GENERAL.—The Corporation shall estab16 lish, by regulation, an application, in such form and 

17 manner and requiring such information as the Cor18 poration may require, for the approval of acquisi19 tions, mergers, consolidations, or divestitures under 

20 subsection (a). 

21 (2) APPLICATION REVIEW.—The Corporation 

22 shall— 

23 (A) establish internal timelines for its proc24 essing of applications under this section, includVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00398 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 ing timelines for any action to approve or to 

2 deny an application under this section; and 

3 (B) notify any applicant seeking to under4 take an action described under subsection (a) of 

5 the decision of the Corporation to approve or to 

6 deny their application as promptly as prac7 ticable. 

8 (c) STANDARDS FOR APPROVAL OF APPLICATION.— 

9 The Corporation shall establish, by regulation, standards 

10 for the approval by the Corporation of acquisitions, merg11 ers, consolidations, or divestitures under subsection (a). The 

12 standards required under this subsection shall, at a min13 imum, be based on— 

14 (1) the application process established by the 

15 Corporation under subsection (b)(1); 

16 (2) the financial history and condition of the ap17 plicant; 

18 (3) the capability of the management of the ap19 plicant; 

20 (4) the general character and fitness of the offi21 cers and directors of the applicant, including the com22 pliance history of the applicant’s officers and direc23 tors with Federal and State laws and the rules and 

24 regulations promulgated by self-regulatory organiza25 tions (as defined in section 3(a)(26) of the Securities 


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1 Exchange Act of 1934 (15 U.S.C. 78c(a)(26)), as ap2 plicable; 

3 (5) the risk presented by such acquisition, merg4 er, consolidation, or divestiture to the Mortgage In5 surance Fund; 

6 (6) any other standard the Corporation deter7 mines necessary to promote competition and mitigate 

8 market dislocations among covered entities in the sec9 ondary mortgage market; and 

10 (7) any other standard the Corporation deter11 mines necessary or appropriate. 

12 (d) APPROVAL.—The Corporation— 

13 (1) may approve any application made pursu14 ant to this section if the applicant meets the stand15 ards established under subsection (c); 

16 (2) may not approve— 

17 (A) any application under this section 

18 which would result in a monopoly; or 

19 (B) any other proposed acquisition or merg20 er or consolidation under this section whose effect 

21 in any area of the United States may be sub22 stantially to lessen competition, or to tend to cre23 ate a monopoly, or which in any other manner 

24 would be in restraint of trade, unless the Cor25 poration finds that the anticompetitive effects of 


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1 the proposed transaction are clearly outweighed 

2 in the public interest by the probable effect of the 

3 transaction in meeting the needs of consumers 

4 and the communities served; and 

5 (3) shall have the authority to deny any applica6 tion made pursuant to paragraph (1) if an officer or 

7 director of the applicant has, at any time prior to the 

8 date of the approval of such application, been— 

9 (A) subject to a statutory disqualification 

10 pursuant to section 3(a)(39) of the Securities 

11 Exchange Act of 1934 (15 U.S.C. 78c(a)(39)); or 

12 (B) suspended, removed, or prohibited from 

13 participation pursuant to section 8(g) of the 

14 Federal Deposit Insurance Act (12 U.S.C. 

15 1818(g)), prohibited from certain action pursu16 ant to paragraphs (6) or (7) of section 8(e) of the 

17 Federal Deposit Insurance Act (12 U.S.C. 

18 1818(e)), subject to an action resulting in a 

19 written agreement or other written statement 

20 under section 8(u)(1) of the Federal Deposit In21 surance Act (12 U.S.C. 1818(u)(1)), for which a 

22 violation may be enforced by an appropriate 

23 Federal banking agency, or subject to any final 

24 order issued with respect to any administrative 

25 enforcement proceeding initiated by such agency 


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1 under section 8 of the Federal Deposit Insurance 

2 Act (12 U.S.C. 1818). 

3 (e) RESTRICTIONS ON ENGAGING IN OTHER LINES OF

4 BUSINESS.— 

5 (1) FOR APPROVED GUARANTORS AND APPROVED

6 MULTIFAMILY GUARANTORS.—An approved guarantor 

7 or approved multifamily guarantor may not engage 

8 in any activity relating to the business of insurance, 

9 other than any activity carried out by an approved 

10 guarantor or approved multifamily guarantor and 

11 approved by the Corporation pursuant to sections 311 

12 or 703. 

13 (2) OTHER ACTIVITIES.—An approved guarantor 

14 or approved multifamily guarantor may engage in 

15 any business activity unrelated to the business of in16 surance, subject to— 

17 (A) the prior approval of the Corporation; 

18 and 

19 (B) any terms and conditions set forth by 

20 the Corporation. 

21 (3) RULE OF CONSTRUCTION.—Nothing in para22 graph (1) or (2) shall be construed to prevent an ap23 proved guarantor from being an affiliate of a private 

24 mortgage insurer if approved by the Corporation. 


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1 (f) LIMITS ON SUPPORT OR GUARANTEE ARRANGE2 MENT.— 

3 (1) IN GENERAL.—An approved guarantor or 

4 approved multifamily guarantor may not enter into 

5 any agreement, covenant, or other arrangement (in6 cluding any credit risk-sharing arrangement) with an 

7 affiliate or other person to support, guarantee, or fi8 nance any operation or activity of that affiliate. 

9 (2) SUPPORT.—Subject to any terms and condi10 tions established by the Corporation, by regulation or 

11 order, an approved guarantor or approved multi12 family guarantor may enter into an agreement, cov13 enant, or other arrangement with an affiliate solely 

14 for the purpose of supporting, guaranteeing, or fi15 nancing an operation or activity of the approved 

16 guarantor or approved multifamily guarantor. 

17 (3) RULE OF CONSTRUCTION.—Nothing in this 

18 section shall supersede the requirements under sec19 tions 23A and 23B of the Federal Reserve Act (12 

20 U.S.C. 371c, 371c-1). 

21 (g) ANTI-STEERING REQUIREMENT.— 

22 (1) IN GENERAL.—The Corporation shall, by reg23 ulation, prohibit discounts made by an approved 

24 guarantor for any mortgage originator that is an in25 vestor, or an affiliate of an investor, in the approved 


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1 guarantor that are not otherwise available to other 

2 similar mortgage originators. 

3 (2) REPORT.—The Office of the Inspector Gen4 eral of the Federal Mortgage Insurance Corporation 

5 shall, on an annual basis, submit a report to the Cor6 poration and to Congress on the practices and inter7 nal controls of approved guarantors with respect to 

8 steering or preferential treatment for their investors 

9 prohibited by this section. 

10 Subtitle C—Securitization Platform 

11 and Transparency in Market Op12 erations 

13 PART I—SECURITIZATION PLATFORM 

14 SEC. 321. ESTABLISHMENT OF THE SECURITIZATION PLAT15 FORM. 

16 (a) IN GENERAL.—The Corporation shall establish an 

17 entity known as the ‘‘Securitization Platform’’ (in this part 

18 referred to as the ‘‘Platform’’) that shall be a utility owned 

19 by and operated for the benefit of its members as— 

20 (1) a nonprofit cooperative; or 

21 (2) a cooperative entity other than as described 

22 under paragraph (1) that— 

23 (A) best achieves the purposes and obliga24 tions of the Platform under section 325; and 

25 (B) serves the public interest. 


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1 (b) REGULATED BY THE CORPORATION.—The Plat2 form shall be regulated and supervised by the Corporation. 

3 (c) INCORPORATION.— 

4 (1) NON FEDERAL STATUS.—The Platform shall 

5 not be an agency or instrumentality of the Federal 

6 Government. 

7 (2) DISCRETION AS TO LEGAL FORM.—The Cor8 poration shall determine the legal form of incorpora9 tion of the Platform. 

10 (3) SITUS OF INCORPORATION.—The Corporation 

11 shall— 

12 (A) determine in which of the several States 

13 to incorporate the Platform; and 

14 (B) have the authority to amend the State 

15 of incorporation to best effectuate the purposes 

16 and obligations of this part and other provisions 

17 of this Act. 

18 (4) TIMING OF INCORPORATION.—Not later than 

19 1 year after the agency transfer date, the Corporation 

20 shall file and submit the necessary documents to in21 corporate the Platform in the State determined under 

22 paragraph (3)(A). 

23 (d) FUNDING BY THE CORPORATION AND TRANSFER

24 OF PROPERTY.— 


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1 (1) TRANSFER OF FUNDS FROM THE CORPORA2 TION.—At a time established by the Corporation, the 

3 Corporation shall transfer to the Platform such funds 

4 as the Corporation, in consultation with the Platform 

5 Directors, determines may be reasonably necessary for 

6 the Platform to begin carrying out the activities and 

7 operations of the Platform. 

8 (2) TRANSFER OF PROPERTY.— 

9 (A) IN GENERAL.—Consistent with title VI, 

10 the Federal Housing Finance Agency, in con11 sultation with the Corporation and, as appro12 priate, the enterprises, may direct the enterprises 

13 to transfer or sell to the Platform any property, 

14 including but not limited to, intellectual prop15 erty, technology, systems, and infrastructure (in16 cluding technology, systems, and infrastructure 

17 developed by the enterprises for the CSP), as well 

18 as any other legacy systems, infrastructure, and 

19 processes that may be necessary for the Platform 

20 to carry out the functions and operations of the 

21 Platform. 

22 (B) CONTRACTUAL AND OTHER LEGAL OBLI23 GATIONS.—As may be necessary for the Corpora24 tion, the Federal Housing Finance Agency, and 

25 the enterprises to comply with legal, contractual, 


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1 or other obligations, the Federal Housing Fi2 nance Agency shall have the authority to require 

3 that any transfer authorized pursuant to sub4 paragraph (A) occurs as an exchange for value, 

5 including through the provision of appropriate 

6 compensation to the enterprises (including as 

7 provided in subparagraphs (C) and (D)), or 

8 other entities responsible for creating, or con9 tracting with, the CSP. 

10 (C) MAXIMUM RETURN TO SENIOR PRE11 FERRED SHAREHOLDERS OF THE ENTER12 PRISES.—The transfer or sale of property to the 

13 Platform under this paragraph shall, as appro14 priate, be managed by the Federal Housing Fi15 nance Agency to obtain resolutions that maxi16 mize the return for the senior preferred share17 holders of the enterprises to the extent that such 

18 resolutions— 

19 (i) are consistent with facilitating— 

20 (I) a deep, liquid, and resilient 

21 secondary mortgage market for single22 family and multifamily mortgage23 backed securities to support access to 

24 mortgage credit in the primary mort25 gage market; and 


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1 (II) an orderly transition from 

2 housing finance markets facilitated by 

3 the enterprises to housing finance mar4 kets facilitated by the Corporation with 

5 minimum disruption in the avail6 ability of loan credit; 

7 (ii) are consistent with applicable Fed8 eral and State law; 

9 (iii) comply with the requirements of 

10 this Act and the amendments made by this 

11 Act; and 

12 (iv) protect the taxpayer from having 

13 to absorb losses incurred in the secondary 

14 mortgage market. 

15 (D) REQUIRED DETERMINATIONS FOR SALE

16 OF ASSETS TO THE PLATFORM.—The Federal 

17 Housing Finance Agency may not require the 

18 enterprises to make a sale to the Platform under 

19 subparagraph (A) that involves the disposition of 

20 the property or assets of the enterprises unless 

21 the Federal Housing Finance Agency determines 

22 that the sale— 

23 (i) is consistent with an orderly transi24 tion from housing finance markets facili25 tated by the enterprises to efficient housing 


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1 finance markets facilitated by the Corpora2 tion with minimum disruption in the avail3 ability of loan credit; 

4 (ii) does not impede or otherwise inter5 fere with the ability of the Federal Housing 

6 Finance Agency or the Corporation to carry 

7 out the functions and requirements of this 

8 Act; 

9 (iii) does not transfer, convey, or au10 thorize any guarantee or Federal support, 

11 assistance, or backing, implicit or explicit, 

12 related to any such property or assets being 

13 sold; and 

14 (iv) will maximize the return for the 

15 senior preferred shareholders as required 

16 under subparagraph (C). 

17 (e) PLATFORM OPERABILITY.—The Corporation shall 

18 establish sufficient redundancies in the Platform so that in 

19 the event of operational disruption of the Platform, there 

20 is sufficient back-up capacity to— 

21 (1) process payments on existing securities 

22 issued through the Platform; and 

23 (2) structure, form, and issue new securities 

24 through the Platform. 


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1 (f) USE BY OTHER ENTITIES IN EXIGENT CIR2 CUMSTANCE.— 

3 (1) IN GENERAL.—On and after the system cer4 tification date, if the Corporation determines that 

5 operational or other problems with the Platform do 

6 not permit the Platform to operate in a manner that 

7 allows the Platform to achieve the purposes and obli8 gations of the Platform under section 325, the Cor9 poration shall have the authority to permit the Plat10 form Directors to use entities other than the Platform 

11 to perform the issuance functions required to be per12 formed through the Platform and that are necessary 

13 for the proper functioning of the secondary mortgage 

14 market. 

15 (2) RULE OF CONSTRUCTION.—Any entity per16 mitted to perform issuance functions that would ordi17 narily be expected to be performed by the Platform 

18 under paragraph (1) shall be regulated and super19 vised, as appropriate, by the Corporation as if such 

20 entity were the Platform itself. 

21 SEC. 322. MANAGEMENT OF THE PLATFORM. 

22 (a) PLATFORM DIRECTORS.— 

23 (1) AUTHORITY OF THE BOARD.— 

24 (A) IN GENERAL.—The Platform Directors 

25 shall have all the powers necessary to carry out 


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1 the purposes, powers, and functions of the Plat2 form, and in the exercise of such purposes, pow3 ers, and functions, and upon approval of the 

4 Corporation, shall adopt such rules and guidance 

5 and issue such orders as the Platform Directors 

6 deem necessary and appropriate. 

7 (B) CONFLICTS OF INTEREST.—The Plat8 form Directors shall develop policies and proce9 dures to monitor and mitigate potential conflicts 

10 of interest in carrying out the purposes, powers, 

11 and functions of the Platform. 

12 (2) INITIAL BOARD.— 

13 (A) COMPOSITION.—The initial Platform 

14 Directors shall be comprised of 5 directors, each 

15 of whom shall be appointed by the Board of Di16 rectors but none of whom shall be a member of 

17 the Board of Directors. 

18 (B) TIMING OF APPOINTMENT OF INITIAL

19 PLATFORM DIRECTORS.—The initial Platform 

20 Directors shall be appointed pursuant to sub21 paragraph (A) not later than 180 days after the 

22 later of— 

23 (i) the filing of the necessary docu24 ments to incorporate the Platform as re25 quired under section 321(c); or 


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1 (ii) the approval of the incorporation 

2 of the Platform by the relevant State. 

3 (C) TERM.— 

4 (i) IN GENERAL.—Each initial Plat5 form Director appointed pursuant to sub6 paragraph (A) shall serve for a term of 1 

7 year. 

8 (ii) AUTHORITY TO EXTEND TERM.— 

9 The Board of Directors may— 

10 (I) in its discretion, extend for an 

11 additional year the term of each initial 

12 Platform Director appointed pursuant 

13 to subparagraph (A); and 

14 (II) upon a determination by the 

15 Corporation that the Platform member16 ship does not reflect the diversity or 

17 variety of market participants required 

18 to conduct the election of the Platform 

19 Directors under paragraph (3), extend 

20 for an additional 2 years the term of 

21 each initial Platform Director ap22 pointed pursuant to subparagraph (A). 

23 (D) PURPOSE OF THE INITIAL PLATFORM

24 DIRECTORS.—The initial Platform Directors 

25 shall— 


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1 (i) draft and enact initial bylaws and 

2 other governance documents for the oper3 ation of the Platform, including policies 

4 and procedures pursuant to paragraph 

5 (1)(B); 

6 (ii) establish criteria for membership 

7 in the Platform consistent with the require8 ments of section 323; 

9 (iii) establish any necessary initial fee 

10 structures or usage fee structures under sec11 tion 324; and 

12 (iv) organize and conduct the election 

13 of the Platform Directors from the Platform 

14 members as required by paragraph (3). 

15 (3) ELECTED BOARD.— 

16 (A) REQUIRED ELECTION; TIMING OF ELEC17 TION.—Upon the expiration of the term of the 

18 members of the initial Platform Directors, the 

19 members of the Platform shall, in accordance 

20 with subparagraphs (B) through (F), elect new 

21 Platform Directors. 

22 (B) COMPOSITION.— 

23 (i) DIVERSITY.—The Platform Direc24 tors elected pursuant to this paragraph 

25 shall reflect the diverse range of Platform 


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1 members, including large, mid-size, and 

2 small business members. 

3 (ii) MEMBERS.— 

4 (I) IN GENERAL.—The Platform 

5 Directors elected pursuant to this 

6 paragraph shall be comprised of 9 di7 rectors as follows: 

8 (aa) 8 member directors, in9 cluding— 

10 (AA) 7 member directors 

11 who shall be elected from 

12 among representatives of the 

13 members in the Platform, at 

14 least 1 of whom shall rep15 resent the interests of small 

16 mortgage lenders; and 

17 (BB) 1 member director 

18 who shall be a representative 

19 of a small lender mutual, as 

20 established under section 

21 315(k). 

22 (bb) 1 independent director. 

23 (II) INDEPENDENT DIRECTOR.— 

24 The independent director elected pursu25 ant to this paragraph— 


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1 (aa) shall not be an affiliate 

2 of any member in the Platform; 

3 and 

4 (bb) shall have demonstrated 

5 knowledge of, or experience in, fi6 nancial management, financial 

7 services, risk management, infor8 mation technology, or housing fi9 nance, which may include afford10 able housing finance. 

11 (C) CHAIRPERSON.—The Chairperson of the 

12 Platform Directors shall be elected from among 

13 the Platform Directors elected under this para14 graph. 

15 (D) TERM.— 

16 (i) IN GENERAL.—Each Platform Di17 rector elected under this paragraph shall 

18 serve for a term of 2 years. 

19 (ii) STAGGERED TERMS.—Notwith20 standing clause (i)— 

21 (I) the first elected chairperson of 

22 the Platform Directors shall be elected 

23 to serve for a term of 2 years; and 


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1 (II) of the first 8 other Platform 

2 Directors not elected to serve as chair3 person: 

4 (aa) 4 shall be elected to 

5 serve for a term of 2 years. 

6 (bb) 4 shall be elected to serve 

7 an initial term of 1 year. 

8 (E) EQUAL VOTES.—Platform Directors 

9 shall have equal voting rights on any matters be10 fore the Platform Directors. 

11 (F) NOMINATION AND ELECTION PROCE12 DURES.—Procedures for the nomination and 

13 election of Platform Directors shall be prescribed 

14 by the bylaws adopted by the Platform Directors 

15 in a manner consistent with the purposes and 

16 provisions of this part. 

17 (G) RESTRUCTURING OF PLATFORM DIREC18 TORS.—The Platform Directors elected under 

19 this paragraph, with approval from the Corpora20 tion, may choose to restructure or reorganize the 

21 Platform Directors in a manner different than 

22 what is specified under this paragraph following 

23 a determination by the Platform Directors and 

24 the Corporation that a different Platform board 

25 structure or Platform board composition would 


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1 better achieve the purposes and obligations of 

2 this Act, or better serve the owners of the Plat3 form in a manner consistent with the public in4 terest. 

5 (b) EXECUTIVE OFFICERS.—The Platform Directors 

6 shall appoint a chief executive officer, chief financial officer, 

7 comptroller, chief regulatory officer, and any other officers 

8 as the Platform Directors deem necessary to carry out the 

9 management and administration of the functions and oper10 ations of the Platform. 

11 SEC. 323. MEMBERSHIP IN THE PLATFORM. 

12 (a) APPLICATION.— 

13 (1) IN GENERAL.—A person seeking to become a 

14 member in the Platform, or to be reinstated as a 

15 member in the Platform, shall file an application 

16 with the Platform Directors. 

17 (2) STANDARDS.—Consistent with achieving a 

18 broad membership that includes small mortgage lend19 ers, as well as large, mid-size, and small business 

20 members, the Platform Directors shall develop proce21 dures and standards for— 

22 (A) the application of persons seeking to be23 come members in the Platform; and 

24 (B) the approval of applicants for member25 ship in the Platform. 


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1 (3) ADDITIONAL STANDARDS FOR APPROVED EN2 TITIES.—The standards for the approval by the Plat3 form Directors of an approved entity as a member in 

4 the Platform shall be consistent with and supplement 

5 any standards, requirements, and obligations applica6 ble to the approved entity under subtitle B of this 

7 title, or any other provision of this Act. 

8 (b) MEMBERS.—The Platform Directors may approve 

9 as a member of the Platform any person that applies for 

10 membership in the Platform pursuant to subsection (a) that 

11 is— 

12 (1) a mortgage aggregator; 

13 (2) a mortgage guarantor; 

14 (3) a mortgage originator; 

15 (4) a Federal Home Loan Bank or a subsidiary 

16 or joint office approved under section 312 of one or 

17 more Federal Home Loan Banks; 

18 (5) a small lender mutual established or ap19 proved under section 315; or 

20 (6) any other market participant, provided that 

21 in the sole determination of the Platform Directors, 

22 having such market participant as a member of the 

23 Platform is necessary or helpful to fulfilling the pur24 poses and obligations of the Platform under section 

25 325. 


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1 (c) TERMINATION.—The Platform Directors may ter2 minate membership in the Platform of any member for fail3 ure to adhere to any standards established by the Platform 

4 Directors. 

5 SEC. 324. FEES. 

6 (a) IN GENERAL.—The Platform Directors may assess 

7 and collect fees, and may, in their discretion, increase or 

8 decrease such fees, from the members in the Platform— 

9 (1) for initial membership in the Platform, con10 sistent with the requirements of subsection (b); 

11 (2) to maintain ongoing membership in the Plat12 form; 

13 (3) for use of the Platform, consistent with the 

14 requirements of subsection (c); and 

15 (4) to cover the ongoing costs of the functions 

16 and operations of the Platform, including— 

17 (A) the purchase of property, technology, 

18 and systems developed by either enterprise or 

19 others; 

20 (B) to develop and invest in new technology; 

21 (C) to build a capital base that would be 

22 able to offset, or otherwise mitigate, losses that 

23 might occur due to the potential operational fail24 ure of the Platform; and 


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1 (D) to conduct any other activities ap2 proved by the Platform Directors. 

3 (b) INITIAL FEE.—Upon approval of its application 

4 to become a member in the Platform, each new approved 

5 member shall pay to the Platform a fee in an amount to 

6 be determined by the Platform Directors, provided that such 

7 fee amount is consistent with obtaining a broad member8 ship in the Platform that includes small mortgage lenders, 

9 as well as large, mid-size, and small business members. 

10 (c) USAGE FEES.— 

11 (1) ESTABLISHMENT.—Each member in the 

12 Platform shall pay usage fees, as such fees are deter13 mined by the Platform Directors. 

14 (2) REVIEW OF FEES.—The Platform Directors 

15 shall, not less than annually, review the fee structure 

16 established under this subsection and submit any re17 sulting recommendations to amend the fee structure to 

18 the Corporation. 

19 (3) ASSESSMENT AND MEASUREMENT.— 

20 (A) IN GENERAL.—Except as otherwise pro21 vided under subparagraphs (B) and (C), usage 

22 fees charged and collected under this subsection 

23 shall be equitably assessed and based upon the 

24 member’s use of the services offered by the Plat25 form, as such use is to be measured by the total 


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1 principal balance of the mortgage loans or mort2 gage-backed securities securitized for the member 

3 through the Platform. 

4 (B) TIERED FEE OPTIONS.—If the Platform 

5 Directors determine that certain entities face a 

6 barrier to use the Platform, the Platform Direc7 tors may adopt a tiered usage fee structure to 

8 promote greater access and a more competitive 

9 market for the Platform that may include dif10 ferential fee structures for usage fee charges in11 curred by housing finance agencies, small mort12 gage lenders, Community Development Financial 

13 Institutions, mission-based nonprofit lenders, 

14 community land trusts, permanently affordable 

15 homeownership programs, or other organizations 

16 selected by the Corporation. 

17 (C) TIERED FEE OPTION FOR COVERED AND

18 NONCOVERED SECURITIES.—The Platform Direc19 tors may adopt a tiered usage fee structure 

20 under this subsection that may include differen21 tial fee structures for usage fee charges for the 

22 issuance of noncovered securities that differ from 

23 the usage fees charged for the issuance of covered 

24 securities. 


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1 (4) PAYMENT.—Usage fees charged under this 

2 subsection shall be paid by the member at the time the 

3 mortgage loans or mortgage-backed securities are de4 livered by the member to the Platform. 

5 (d) CORPORATION REVIEW OF INITIAL FEES AND

6 USAGE FEES.— 

7 (1) IN GENERAL.—The Platform Directors shall 

8 submit any fee structure proposal for initial fees or 

9 usage fees under subsection (b) or (c) to the Corpora10 tion. The Corporation shall approve any initial fee or 

11 usage fee structure proposed by the Platform Directors 

12 unless the Corporation determines that the fee struc13 ture is not consistent with— 

14 (A) facilitating, a deep, liquid, and resilient 

15 secondary mortgage market for mortgage-backed 

16 securities; and 

17 (B) the purposes and obligations of the 

18 Platform under section 325. 

19 (2) AUTOMATIC ESTABLISHMENT OF FEES AB20 SENT CORPORATION DISAPPROVAL.—If the Corpora21 tion does not issue an order of disapproval of an ini22 tial fee or usage fee structure proposed by the Plat23 form Directors within 60 days following the submis24 sion of the proposed initial fee or usage fee structure 

25 to the Corporation, the proposed initial fee or usage 


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1 fee structure shall automatically go into effect for the 

2 Platform and its members. 

3 (3) IMPACT OF CORPORATION DISAPPROVAL.—If 

4 the Corporation disapproves an initial fee or usage 

5 fee structure proposed by the Platform Directors pur6 suant to this subsection, the Platform Directors 

7 may— 

8 (A) submit to the Corporation a revised fee 

9 or usage fee structure for approval; or 

10 (B) if applicable, use the existing approved 

11 fee or usage fee structure. 

12 SEC. 325. PURPOSES AND OBLIGATIONS OF THE PLATFORM. 

13 (a) PURPOSE.—The purposes of the Platform estab14 lished under section 321 are to— 

15 (1) purchase and receive from its members eligi16 ble mortgage loans or securities collateralized by eligi17 ble mortgage loans for securitization by issuers as 

18 covered securities; 

19 (2) issue through the Platform to its members 

20 standardized covered securities, or other covered secu21 rities, insured by the Corporation pursuant to this 

22 Act; 

23 (3) purchase and receive from its members non24 eligible mortgage loans or securities not collateralized 

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1 covered securities, to the extent desired or requested by 

2 its members; and 

3 (4) issue to its members standardized noncovered 

4 securities, or other noncovered securities, that are not 

5 insured by the Corporation pursuant to this Act, to 

6 the extent desired or requested by its members. 

7 (b) POWERS AND FUNCTIONS.—The powers and func8 tions of the Platform are to— 

9 (1) develop the ability to issue, and to issue, 

10 standardized covered securities, insured by the Cor11 poration pursuant to this Act, in accordance with 

12 subsection (e); 

13 (2) develop, adopt, and publish standardized 

14 securitization documents and agreements (including, 

15 but not limited to, uniform pooling, trust, and custo16 dial agreements)— 

17 (A) required for all covered securities issued 

18 by or through the Platform in accordance with 

19 section 326(a) (and which shall be made optional 

20 for all noncovered securities issued through the 

21 Platform); and 

22 (B) which— 

23 (i) shall be drafted in consultation 

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1 ment of Housing and Urban Development, 

2 and such other Federal regulatory agencies 

3 as the Platform Directors determine appro4 priate; 

5 (ii) may rely upon existing docu6 mentation and forms required by the enter7 prises or other Federal regulatory agencies, 

8 to the extent determined by the Platform 

9 Directors to be practical or appropriate; 

10 and 

11 (iii) before being issued through the 

12 Platform, shall be approved by the Corpora13 tion as being consistent with— 

14 (I) the requirements under section 

15 326(a); and 

16 (II) facilitating a deep, liquid, 

17 and resilient secondary mortgage mar18 ket for mortgage-backed securities; 

19 (3) develop standardized documents approved by 

20 the Corporation for servicing and loss mitigation 

21 standards pursuant to section 314 for eligible mort22 gage loans that collateralize the covered securities 

23 issued through the Platform to its members, which 

24 shall be based on standards set by the Corporation 

25 and which may rely upon existing documentation 


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1 and forms required by the enterprises or other Federal 

2 or State regulatory agencies, to the extent determined 

3 by the Platform Directors to be practical or appro4 priate; 

5 (4) as expressly provided in section 326(b)(2)(F), 

6 develop, adopt, and publish the required contractual 

7 terms for contracts for noncovered securities issued 

8 through the Platform, which shall be— 

9 (A) developed in consultation with the Cor10 poration, the Bureau of Consumer Financial 

11 Protection, the Department of Housing and 

12 Urban Development, and such other Federal reg13 ulatory agencies as the Platform Directors deter14 mine appropriate; and 

15 (B) before being issued through the Plat16 form, approved by the Corporation as being con17 sistent with— 

18 (i) the requirements under section 

19 326(b); and 

20 (ii) facilitating a deep, liquid, and re21 silient secondary mortgage market for mort22 gage-backed securities; 

23 (5) develop, adopt, and publish optional stand24 ardized securitization documents and agreements (in25 cluding, but not limited to, uniform pooling, trust, 


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1 and custodial agreements) tailored for noncovered se2 curities issued through the Platform, and which may 

3 be used as desired or requested by the members of the 

4 Platform, in accordance with section 326(c), and 

5 which standardized securitization documents and 

6 agreements— 

7 (A) shall be drafted in consultation with the 

8 Corporation, the Bureau of Consumer Financial 

9 Protection, the Department of Housing and 

10 Urban Development, and such other Federal reg11 ulatory agencies as the Platform Directors deter12 mine appropriate; 

13 (B) may rely upon existing documentation 

14 and forms required by the enterprises or other 

15 Federal or State regulatory agencies, to the ex16 tent determined by the Platform Directors to be 

17 practical or appropriate; and 

18 (C) before being issued through the Plat19 form, shall be approved by the Corporation as 

20 being consistent with— 

21 (i) the requirements under section 

22 326(c); and 

23 (ii) facilitating a deep, liquid, and re24 silient secondary mortgage market for mort25 gage-backed securities; 


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1 (6) the extent not otherwise provided in para2 graphs (2), (3), and (5), to endeavor to use or rely 

3 upon existing documentation and forms required by 

4 the enterprises or other Federal or State regulatory 

5 agencies, to the extent determined by the Platform Di6 rectors to be practical or appropriate; 

7 (7) establish a strong business continuity plan 

8 that meets industry best practices and establish suffi9 cient redundancies so that in the event of an oper10 ational failure of the Platform there is sufficient back11 up capacity to process payments and issue covered 

12 and noncovered securities; 

13 (8) verify that the eligible mortgage loans and se14 curities collateralized by eligible mortgage loans pur15 chased and received by the Platform, including from 

16 any small lender mutual established or approved 

17 under section 315, for securitization as covered securi18 ties, meet the requirements for covered securities 

19 under this Act and any regulations adopted by the 

20 Corporation pursuant thereto; 

21 (9) verify that the noneligible mortgage loans 

22 and securities not collateralized by eligible mortgage 

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1 covered securities, meet the requirements for non2 covered securities under this Act and any regulations 

3 adopted by the Corporation pursuant thereto; 

4 (10) for the purpose of securitization, purchase 

5 or receive from members of the Platform— 

6 (A) eligible mortgage loans, pools of eligible 

7 mortgage loans, securities collateralized by eligi8 ble mortgage loans, or outstanding mortgage9 backed securities issued by the enterprises for 

10 securitization as covered securities; and 

11 (B) noneligible mortgage loans, pools of 

12 noneligible mortgage loans, or securities 

13 collateralized by noneligible mortgage loans for 

14 securitization as noncovered securities, to the ex15 tent desired or requested by members of the Plat16 form; 

17 (11) for the purpose of securitization, facilitate 

18 the issuance of— 

19 (A) all covered securities of members of the 

20 Platform that are collateralized by eligible mort21 gage loans, or outstanding mortgage-backed secu22 rities issued by the enterprises; 

23 (B) all covered securities of members of the 

24 Platform that are pooled from— 


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1 (i) a single mortgage originator, mort2 gage aggregator, approved entity, or regu3 lated entity; or 

4 (ii) multiple mortgage originators, 

5 mortgage aggregators, approved entities, or 

6 regulated entities; 

7 (C) noncovered securities collateralized by 

8 noneligible mortgage loans received from mem9 bers of the Platform; and 

10 (D) noncovered securities collateralized by 

11 noneligible mortgage loans received from mem12 bers of the Platform that are pooled from— 

13 (i) a single mortgage originator, mort14 gage aggregator, or regulated entity; or 

15 (ii) multiple mortgage originators, 

16 mortgage aggregators, or regulated entities; 

17 (12) perform bond administration, data valida18 tion, and reporting for all covered and noncovered se19 curities issued through the Platform, including those 

20 issued on behalf of any small lender mutual estab21 lished or approved under section 315; 

22 (13) facilitate systems to lower barriers to entry 

23 for new mortgage originators and approved entities or 

24 access to membership in the Platform; 


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1 (14) provide essential functions necessary to 

2 issue standardized securities which may be compatible 

3 with the To-Be-Announced market, for covered securi4 ties and, if appropriate, noncovered securities; 

5 (15) manage operational and systems related 

6 risks associated with delivering covered and non7 covered securities and receiving eligible and non8 eligible mortgage loans; 

9 (16) develop the capability to offer securitization 

10 services to private label issuers; 

11 (17) require the servicing documentation used for 

12 mortgage loans that collateralize securities issued 

13 through the Platform to provide a standard method 

14 (which may include the use of a single electronic 

15 verification system) for a mortgagor who has been de16 nied a loan modification to verify such denial at no 

17 cost to the mortgagor; 

18 (18) facilitate the issuance of securitizations for 

19 multifamily loans, establish common documentation, 

20 or develop other requirements necessary to permit the 

21 Platform, or a subsidiary or affiliate thereof, to be 

22 used for multifamily loan securitizations if the Plat23 form Directors issue a determination that it would be 

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1 sidiary or affiliate thereof, to be used to issue or oth2 erwise facilitate multifamily loan securitizations; and 

3 (19) establish, not later than the system certifi4 cation date, a Collateral Valuation Advisory Com5 mittee— 

6 (A) which shall be comprised of 9 members 

7 appointed by the Platform Directors, including 

8 representatives of appraisers, appraisal manage9 ment companies, mortgage originators (including 

10 small mortgage lenders), investors, real estate 

11 professionals, homebuilding professionals, con12 sumer advocates, as well as Federal and State 

13 appraisal regulatory organizations; 

14 (B) the purpose of which shall be to— 

15 (i) provide recommendations to the 

16 Platform and the Corporation regarding 

17 secondary mortgage market residential ap18 praisal guidelines, standards, and reporting 

19 formats consistent with the Real Estate Set20 tlement Procedures Act (12 U.S.C. 2603), 

21 the Truth in Lending Act (15 U.S.C. 1631 

22 et seq.), and all other applicable Federal 

23 and State laws; and 

24 (ii) make recommendations regarding 

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1 ation reports, taking into account existing 

2 operational structures and contractual ar3 rangements; and 

4 (C) which, in fulfilling its purpose under 

5 this paragraph, shall, as appropriate, consult 

6 and coordinate with the Appraisal Subcommittee 

7 of the Federal Financial Institutions Examina8 tions Council established under title XI of the 

9 Financial Institutions Reform, Recovery, and 

10 Enforcement Act of 1989 (12 U.S.C. 3331 et 

11 seq.). 

12 (c) PROHIBITED ACTIVITIES.—The Platform may 

13 not— 

14 (1) guarantee any mortgage loans or mortgage15 backed securities; 

16 (2) assume or hold mortgage loan credit risk; 

17 (3) purchase any mortgage loans for cash on a 

18 single loan basis for the purpose of securitization; 

19 (4) undertake the issuance of any covered securi20 ties through the Platform unless the first loss position 

21 is already held by a private entity; 

22 (5) own or hold any mortgage loans or mortgage23 backed securities for investment purposes; 

24 (6) make or be a party to any representation 

25 and warranty agreement on any mortgage loans; or 


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1 (7) take lender representation and warranty 

2 risk. 

3 (d) INTEROPERABILITY WITH MULTIFAMILY LOAN

4 SECURITIZATION ISSUANCE.—The Platform shall be devel5 oped in a manner that may permit, and would not pre6 clude, the Platform, or any subsidiary or affiliate thereof, 

7 to be used for the issuance of multifamily loan 

8 securitizations, provided that the development of this vehicle 

9 for multifamily loan securitizations does not delay the abil10 ity of the Platform to perform its obligations under this 

11 section with respect to single-family securities by the system 

12 certification date. 

13 (e) TIMING OF PLATFORM CAPACITY TO DEVELOP AND

14 TO ISSUE STANDARDIZED SECURITIES FOR THE SINGLE15 FAMILY COVERED SECURITIES.—Not later than 2 years fol16 lowing the election of the Platform Directors under section 

17 322(a)(3), or as otherwise permitted under section 601, the 

18 Platform shall develop the Platform’s ability to issue, and 

19 issue, standardized securities for single-family covered secu20 rities. 

21 (f) DISCRETION FOR PLATFORM DIRECTORS TO ISSUE

22 STANDARDIZED SECURITIES FOR SINGLE-FAMILY NON23 COVERED SECURITIES.—The Platform Directors may de24 velop an ability for the Platform to issue standardized secu25 rities for single-family noncovered securities, if the Platform 


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1 Directors determine that sufficient demand exists among the 

2 Platform members for the Platform to issue such a product. 

3 SEC. 326. UNIFORM SECURITIZATION AGREEMENTS FOR 

4 COVERED SECURITIES AND REQUIRED CON5 TRACTUAL TERMS FOR NONCOVERED SECU6 RITIES. 

7 (a) REQUIRED UNIFORM SECURITIZATION AGREE8 MENTS FOR COVERED SECURITIES ISSUED THROUGH THE

9 PLATFORM.— 

10 (1) IN GENERAL.—The Platform Directors shall 

11 develop standard uniform securitization agreements 

12 for all covered securities to be issued through the Plat13 form, as required pursuant to section 325(b)(2). 

14 (2) REQUIRED TERMS.—The standard uniform 

15 securitization agreements required to be developed 

16 under paragraph (1) shall include terms relating to— 

17 (A) pooling and servicing, including the de18 velopment of uniform standards and practices 

19 consistent with the standards specified by the 

20 Corporation pursuant to section 314; 

21 (B) loss mitigation procedures consistent 

22 with those specified by the Corporation pursuant 

23 to section 314; 

24 (C) minimum representations and warran25 ties; 


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1 (D) indemnification and remedies, includ2 ing for the restitution or indemnification of the 

3 Corporation with respect to early term delin4 quencies of eligible mortgage loans that 

5 collateralize a covered security; 

6 (E) the requirements of the indenture for 

7 mortgage-backed securities that are exempt from 

8 the Trust Indenture Act of 1939 (15 U.S.C. 

9 77aaa et seq.) and the requirements, responsibil10 ities, and duties of trustees, as set forth in the 

11 indenture or pooling and servicing agreement; 

12 (F) the qualification, responsibilities, and 

13 duties of trustees; and 

14 (G) any other terms or standards the Plat15 form Directors, with approval of the Corpora16 tion, determine to be necessary or appropriate. 

17 (3) DEFINING REPRESENTATION AND WARRANTY

18 VIOLATIONS.—In developing the uniform 

19 securitization agreements required under paragraph 

20 (1), the Platform Directors shall also develop, adopt, 

21 and publish, upon approval by the Corporation, clear 

22 and uniform standards that define and illustrate 

23 what actions, or omissions to act, comprise a viola24 tion of the representations and warranties clauses 

25 that are made a part of such agreements. 


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1 (b) REQUIRED CONTRACTUAL TERMS FOR CONTRACTS

2 FOR ALL NONCOVERED SECURITIES ISSUED THROUGH THE

3 PLATFORM.— 

4 (1) IN GENERAL.—All contracts for noncovered 

5 securities issued through the Platform shall include a 

6 set of required contractual terms relating to the obli7 gations of the parties to each contract. 

8 (2) REQUIRED CONTRACTUAL TERMS.—The re9 quired contractual terms for agreements for all non10 covered securities issued through the Platform shall 

11 provide the obligations of the parties to a contract in12 cluding the following considerations: 

13 (A) Pooling and servicing. 

14 (B) Loss mitigation procedures. 

15 (C) Representations and warranties. 

16 (D) Indemnification and remedies. 

17 (E) The qualification, responsibilities, and 

18 duties of trustees, including, but not limited to, 

19 requirements set forth in the indenture or pool20 ing and servicing agreement, or any applicable 

21 provisions of the Trust Indenture Act of 1939 

22 (15 U.S.C. 77aaa et seq.). 

23 (F) Other terms or standards the Platform 

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1 termine to be necessary or appropriate to protect 

2 or facilitate the operation of the Platform. 

3 (3) PERMISSIBLE ADJUSTMENTS.—Parties to 

4 contracts for noncovered securities described under 

5 this subsection may supplement the required contrac6 tual terms identified under paragraph (2) with any 

7 additional contractual terms so desired by the parties 

8 to contracts for noncovered securities issued through 

9 the Platform. 

10 (c) OPTIONAL UNIFORM SECURITIZATION AGREE11 MENTS FOR NONCOVERED SECURITIES ISSUED THROUGH

12 THE PLATFORM.—The Platform Directors may develop op13 tional uniform securitization agreements for use by non14 covered securities that are issued through the Platform that 

15 include standards and obligations that are different from 

16 those included in the uniform securitization agreements for 

17 covered securities as set forth in subsection (a), provided 

18 that— 

19 (1) the agreements include the required contrac20 tual terms required for noncovered securities that are 

21 issued through the Platform set forth in subsection 

22 (b); and 

23 (2) the Platform Directors determine that suffi24 cient demand exists among the members of the Plat25 form for the Platform to issue such optional uniform 


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1 securitization agreements for use by noncovered secu2 rities. 

3 (d) AGREEMENTS FOR NONCOVERED SECURITIES

4 ISSUED OFF THE PLATFORM.—Nothing in this section shall 

5 preclude, or require, noncovered securities that are not 

6 issued through the Platform from adopting the— 

7 (1) uniform securitization agreements for covered 

8 securities issued through the Platform developed under 

9 subsection (a); 

10 (2) optional uniform securitization agreements 

11 for noncovered securities issued through the Platform 

12 developed under subsection (c); or 

13 (3) required contractual terms for contracts for 

14 noncovered securities issued through the Platform de15 veloped under subsection (b). 

16 (e) CONSULTATION REQUIRED.—The Platform Direc17 tors shall consult with market participants, including 

18 servicers, originators, issuers, and mortgage investors, and 

19 community stakeholders and representatives of homeowners 

20 in developing— 

21 (1) the uniform securitization agreements pursu22 ant to subsection (a); 

23 (2) the required contractual terms for contracts 

24 for noncovered securities issued through the Platform 

25 pursuant to subsection (b); and 


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1 (3) the optional uniform securitization agree2 ments for noncovered securities issued through the 

3 Platform pursuant to subsection (c). 

4 SEC. 327. APPROVAL AND STANDARDS FOR COLLATERAL 

5 RISK MANAGERS. 

6 (a) STANDARDS FOR APPROVAL OF COLLATERAL RISK

7 MANAGERS.—The Corporation shall develop, adopt, and 

8 publish standards for the use of collateral risk managers 

9 who may work with the Platform, as well as trustees and 

10 servicers of mortgage-backed securities to manage mortgage 

11 loan collateral, including standards with respect to— 

12 (1) tracking mortgage loan repurchases; 

13 (2) compliance with obligations under any ap14 plicable securitization documents; and 

15 (3) managing— 

16 (A) any disputes; and 

17 (B) the resolution process. 

18 (b) ADDITIONAL REQUIRED STANDARDS.—The stand19 ards required under subsection (a) shall include the review 

20 of foreclosure loss mitigation programs established under 

21 section 314 for approved servicers. 


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1 PART II—TRANSPARENCY IN MARKET 

2 OPERATIONS 

3 SEC. 331. REVIEW OF LOAN DOCUMENTS; DISCLOSURES. 

4 (a) IN GENERAL.—The Corporation, in consultation 

5 and coordination with the Securities and Exchange Com6 mission, shall, by rule— 

7 (1) require market participants, as appropriate, 

8 to make available to private market investors in con9 nection with the first loss position on a covered secu10 rity, including through use of the Securitization Plat11 form established under section 321, all— 

12 (A) documents relating to eligible mortgage 

13 loans collateralizing that covered security; and 

14 (B) servicing reports of the approved 

15 servicer relating to such eligible mortgage loans; 

16 (2) require market participants, as appropriate, 

17 to disclose to investors information that is substan18 tially similar, to the extent practicable, to disclosures 

19 required of issuers of asset-backed securities under sec20 tion 13(a) or 15(d) of the Securities Exchange Act of 

21 1934 (15 U.S.C. 78m(a), 78o(d)) until the covered se22 curity is fully paid, other than information that the 

23 Corporation determines, in consultation and coordi24 nation with the Securities and Exchange Commis25 sion, is not applicable to a covered security, a parVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00441 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 ticular type of covered security, or eligible mortgage 

2 loans collateralizing a covered security; 

3 (3) require that all disclosures must be made 

4 consistent with the antifraud provisions of the Fed5 eral securities laws; and 

6 (4) establish the timing, frequency, and manner 

7 in which such access and disclosures are made. 

8 (b) ACCESS AND DISCLOSURES.—In prescribing the 

9 rules required under subsection (a), the Corporation shall 

10 take into consideration— 

11 (1) the potential cost of such access and disclo12 sures; 

13 (2) the effect of such access and disclosures on li14 quidity in the housing finance market; and 

15 (3) the interests of investors. 

16 (c) PRIVACY PROTECTIONS.—In prescribing the rules 

17 required under subsection (a), the Corporation shall take 

18 into consideration issues of consumer privacy and all stat19 utes, rules, and regulations related to privacy of consumer 

20 credit information and personally identifiable information. 

21 Such rules shall expressly prohibit the identification of spe22 cific borrowers. 

23 SEC. 332. NATIONAL MORTGAGE DATABASE. 

24 (a) TRANSFER.—Effective on the system certification 

25 date, there are transferred to the Corporation all functions 


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1 of the Federal Housing Finance Agency of the Corporation 

2 relating to the rights, responsibilities, and obligations of the 

3 Federal Housing Finance Agency pursuant to the Inter4 Agency Agreement (or any successor thereto) entered into 

5 by the Federal Housing Finance Agency and the Bureau 

6 of Consumer Financial Protection with respect to the devel7 opment, construction, maintenance, operation, and funding 

8 of the National Mortgage Database. 

9 (b) PRIVACY.—In exercising authority under this sec10 tion, the Corporation and the Bureau of Consumer Finan11 cial Protection shall— 

12 (1) take steps to ensure the privacy of consumers, 

13 including prohibiting the identification of specific 

14 borrowers; 

15 (2) minimize the collection and storage of per16 sonally identifiable information; and 

17 (3) consider all statutes, rules, and regulations 

18 relating to the privacy of consumer credit information 

19 and personally identifiable information. 

20 (c) DUPLICATION.—The Chairperson and the Director 

21 of the Bureau of Consumer Financial Protection shall take 

22 all reasonable steps necessary to minimize conflicts and du23 plication of the data required under this section with data 

24 collected, published, or otherwise obtained by other Federal 

25 regulators, including the data disclosure system required 


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1 under section 304(f) of the Home Mortgage Disclosure Act 

2 of 1975 (12 U.S.C. 2803(f)). 

3 (d) MINIMIZE BURDEN ON REPORTING ENTITIES.—If 

4 2 or more entities are required by this section to report the 

5 same mortgage data relating to the same mortgage loan, 

6 the entities may, by agreement that is clearly commu7 nicated to the Corporation and the Bureau, determine that 

8 only 1 of such entities will report the data. If 1 of such 

9 entities reports the required mortgage data, it shall not be 

10 a violation of this section for the other entities not to report 

11 the data. 

12 (e) ACCESS TO DATA.—The Corporation and the Bu13 reau of Consumer Financial Protection shall each establish, 

14 and cause to be published in the Federal Register, the ini15 tial date on which— 

16 (1) the public shall begin to have access to any 

17 data put into the public domain, in accordance with 

18 this section and in a manner that is easily accessible 

19 to the public; and 

20 (2) all mortgage data is required to be put into 

21 the public domain, in accordance with this section. 


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1 SEC. 333. WORKING GROUP ON ELECTRONIC REGISTRATION 

2 OF MORTGAGE LOANS. 

3 (a) ESTABLISHMENT.—Not later than 180 days after 

4 the agency transfer date, the Corporation shall establish a 

5 working group to study— 

6 (1) whether the establishment of a national elec7 tronic mortgage registry system is necessary; and 

8 (2) how to establish, operate, and maintain a 

9 national electronic mortgage registry system for sin10 gle-family mortgage loans and multifamily mortgage 

11 loans. 

12 (b) COMPOSITION.—The working group established 

13 under subsection (a) shall be composed of the following: 

14 (1) The Chairperson or the Chairperson’s des15 ignee. 

16 (2) The Director of the Bureau of Consumer Fi17 nancial Protection or the Director’s designee. 

18 (3) The Chairman of the Federal Deposit Insur19 ance Corporation or the Chairman’s designee. 

20 (4) The Chairman of the Securities and Ex21 change Commission or the Chairman’s designee. 

22 (5) The Chairman of the Federal Reserve Board 

23 or the Chairman’s designee. 

24 (6) The Comptroller of the Currency or the 

25 Comptroller’s designee. 


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1 (7) A representative from the Federal Home 

2 Loan Bank System. 

3 (8) A representative from a Federal Reserve 

4 Bank. 

5 (9) Individuals selected by the Chairperson from 

6 among the following: 

7 (A) State and local government agencies 

8 and representatives, including housing finance 

9 agencies and those with expertise in property 

10 records, electronic recording, and the Uniform 

11 Commercial Code. 

12 (B) The National Conference of Commis13 sioners on Uniform State Laws 

14 (C) Industry groups, including single-fam15 ily and multifamily mortgage originators, title 

16 insurers, servicers, issuers, and investors. 

17 (D) Consumer groups, including representa18 tives of homeowners, community stakeholders, 

19 and housing organizations. 

20 (E) Individuals with technical expertise, in21 cluding those with expertise in designing, con22 structing and maintaining mortgage databases. 

23 (c) DUTIES.—The duties of the working group estab24 lished under subsection (a) are to assess and develop rec25 ommendations on the necessity for and feasibility of estabVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00446 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 lishing, operating, and maintaining a national electronic 

2 mortgage registry system for single-family mortgage loans 

3 and multifamily mortgage loans to document custody and 

4 registration of mortgage loans, notes, titles, liens, deeds of 

5 trust, and other security instruments, in order to automate, 

6 centralize, standardize, and improve the tracking of changes 

7 in— 

8 (1) the ownership of mortgage loans, deeds of 

9 trust, and other security instruments; 

10 (2) the ownership of the beneficial interest in 

11 promissory notes secured by any mortgage loan, deed 

12 of trust, or other security instrument; 

13 (3) the servicing rights for any mortgage loan, 

14 deed of trust, or other security instrument; and 

15 (4) such other information as the Corporation 

16 may require. 

17 (d) CONSIDERATIONS.—In carrying out the duties 

18 under this section, the working group established under sub19 section (a) shall consider— 

20 (1) the cost to States and localities, including 

21 any impact on revenue generated by local recording 

22 of mortgage loan documents; 

23 (2) the feasibility of allowing States and local24 ities to continue to collect fees and revenue; 


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1 (3) the implications of data accuracy on judicial 

2 or non-judicial foreclosure; 

3 (4) the need to minimize conflicting mortgage 

4 loan registry requirements; 

5 (5) the need to provide consumers with access to 

6 key information about the ownership and servicing of 

7 their mortgage loans; 

8 (6) the need to provide data accuracy, security, 

9 and privacy; 

10 (7) existing State real property and commercial 

11 laws and any such laws in development, including an 

12 electronic mortgage registry law developed as a uni13 form State law proposal; 

14 (8) the costs and benefits of developing and 

15 maintaining a national mortgage registry system, in16 cluding any potential impact on consumer mortgage 

17 credit and industry participants; 

18 (9) the feasibility of using existing industry 

19 standards and capabilities in the operation of a na20 tional mortgage registry system; and 

21 (10) any research, reports, or other work under22 taken by outside experts, including Federal and State 

23 entities. 

24 (e) REPORT.—Not later than 2 years after the date on 

25 which the working group is established under subsection (a), 


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1 the working group shall issue a publicly available report, 

2 which shall— 

3 (1) include recommendations— 

4 (A) as to whether the establishment of a na5 tional electronic mortgage registry system is nec6 essary or appropriate in the public interest or 

7 for the protection of the Mortgage Insurance 

8 Fund; and 

9 (B) on how to establish, operate, and main10 tain a national electronic mortgage registry sys11 tem for single-family mortgage loans and multi12 family mortgage loans; and 

13 (2) if the working group recommends that the es14 tablishment of the national electronic mortgage reg15 istry system is necessary or appropriate under para16 graph (1), outline the minimum requirements for 

17 such registry, which shall— 

18 (A) include considerations for the develop19 ment and implementation of electronic mortgage 

20 registry systems by State and local government 

21 agencies, including requirements to ensure accu22 rate reporting to such systems; and 

23 (B) satisfy the recommendations of this re24 port. 

25 (f) RULEMAKING.— 


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1 (1) IN GENERAL.—Beginning 5 years after pub2 lication of the report under subsection (e), the Cor3 poration may, by rule, establish a national electronic 

4 mortgage registry system for single-family mortgage 

5 loans and multifamily mortgage loans, deeds of trust, 

6 or other security instruments in accordance with the 

7 findings of the report if— 

8 (A) the Corporation determines that elec9 tronic mortgage registry systems have not been 

10 created by State and local government agencies 

11 in accordance with the minimum requirements 

12 established in the report; and 

13 (B) the establishment of a national elec14 tronic mortgage registry system for single-family 

15 mortgage loans and multifamily mortgage loans 

16 remains necessary or appropriate in the public 

17 interest or for the protection of the Mortgage In18 surance Fund. 

19 (2) CONFLICTING REPORTS.—If the Corporation 

20 establishes a national electronic mortgage registry 

21 system under paragraph (1), the Corporation shall 

22 provide approved entities a reasonable amount of 

23 time to correct a filing made in the national elec24 tronic mortgage registry system established under 

25 paragraph (1) that is in direct conflict with any filVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00450 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 ing in a State or local real property recording sys2 tem. 

3 (3) AUTHORITY TO EXTEND ESTABLISHMENT OF

4 REGISTRIES.—The Corporation, in consultation with 

5 appropriate State and local government agencies re6 sponsible for real property recordation, may extend 

7 the period of time provided under paragraph (1) for 

8 a single period of not more than 5 years if the Cor9 poration determines that the extension is necessary or 

10 appropriate. 

11 (4) CONSULTATION AND COORDINATION WITH

12 STATE AND LOCAL AGENCIES.—To promote consist13 ency in and minimize disruption to the housing fi14 nance system and systems for the local recording of 

15 mortgage loan documents, the Corporation shall con16 sult and coordinate with appropriate State and local 

17 government agencies responsible for real property rec18 ordation when developing and issuing rules under 

19 this subsection. 

20 (5) REQUIREMENTS ON RULES.—The rules and 

21 standards promulgated under this section shall recog22 nize and protect valid perfected security interests in 

23 registered mortgage-related documents. 

24 (g) RULES OF CONSTRUCTION.— 


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1 (1) LIMITATION ON LIABILITY.—Nothing in this 

2 section shall be construed as implying or establishing 

3 a private right of action against an approved entity 

4 for filings made to a national electronic mortgage reg5 istry system established under subsection (f)(1) or 

6 other filing actions taken pursuant to subsection (f). 

7 (2) LIMITATION ON SUPERVISORY OR ENFORCE8 MENT AUTHORITY.—Nothing in this section shall be 

9 construed as authorizing the Corporation, before the 

10 establishment of a national electronic mortgage reg11 istry system under subsection (f)(1), to exercise super12 visory or enforcement authority with respect to an 

13 approved entity relating to a real property filing ac14 tion in a State or local real property recording sys15 tem by the approved entity. 

16 (3) PREEMPTION.—Nothing in this section shall 

17 be construed as preempting, altering, annulling, ex18 empting, or affecting the applicability of any State or 

19 local law, including those laws relating to real prop20 erty recording or foreclosure. 

21 SEC. 334. MULTIPLE LENDER ISSUES. 

22 With respect to the dwelling of a borrower that serves 

23 as security for an eligible mortgage loan, if the borrower 

24 enters into any credit transaction that would result in the 

25 creation of a new mortgage loan or other credit lien on such 


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1 dwelling where the loan-to-value ratio of such credit trans2 action amount is 80 percent or more, the creditor (as de3 fined in section 1026.2(a)(17) of title 12 of the Code of Fed4 eral Regulations) shall notify the creditor of the senior eligi5 ble mortgage loan within 30 days after consummation of 

6 such transaction. 

7 SEC. 335. REQUIRED HARMONIZATION OF STANDARDS 

8 WITHIN ELIGIBLE MORTGAGE CRITERIA. 

9 (a) IN GENERAL.—The Corporation shall consult and 

10 coordinate with the Bureau of Consumer Financial Protec11 tion to ensure that the minimum standards issued by the 

12 Corporation with respect to eligible single-family mortgage 

13 loans pursuant to section 2(29) remain, to the greatest ex14 tent possible, substantially similar to rules promulgated by 

15 the Bureau pursuant to section 129C(b) of the Truth in 

16 Lending Act (15 U.S.C. 1639c(b)) provided that any revi17 sions to, or amendments of, such minimum standards 

18 issued by the Corporation— 

19 (1) conform to all of the other requirements set 

20 forth under section 2(29); and 

21 (2) in the determination of the Corporation, do 

22 not negatively impact the Mortgage Insurance Fund. 

23 (b) ANNUAL REPORT ON ANY CHANGES OR DIF24 FERENCES IN RULES.—The Corporation shall, on an an25 nual basis, submit to the Chair and Ranking Member of 


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1 the Committee on Banking, Housing, and Urban Affairs 

2 of the Senate and the Chair and Ranking Member of the 

3 Committee on Financial Services of the House of Represent4 atives a report that— 

5 (1) describes any changes to the minimum stand6 ards identified in subsection (a); 

7 (2) describes the economic analysis developed 

8 and used by the Corporation for any changes de9 scribed under paragraph (1) in order to ensure such 

10 changes do not violate the duties of the Corporation 

11 to protect the Mortgage Insurance Fund; and 

12 (3) identifies any changes that occurred and dif13 ferences that exist between the minimum standards 

14 developed, adopted, and maintained by the Corpora15 tion and the rules promulgated by the Bureau pursu16 ant to section 129C(b) of the Truth in Lending Act 

17 (15 U.S.C. 1639c(b)). 

18 TITLE IV—FHFA AND FMIC 

19 TRANSITION 

20 SEC. 401. DEFINITIONS. 

21 In this title— 

22 (1) the term ‘‘Director’’ means— 

23 (A) during the period beginning on the date 

24 of enactment of this Act and ending on the day 


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1 before the agency transfer date, the Director of 

2 the Existing Agency; and 

3 (B) on and after the agency transfer date, 

4 the Director of the Federal Housing Finance 

5 Agency of the Corporation appointed under sec6 tion 402(a)(2); 

7 (2) the term ‘‘Existing Agency’’ means the Fed8 eral Housing Finance Agency, as constituted on the 

9 day before the agency transfer date; 

10 (3) the term ‘‘function’’ means any duty, obliga11 tion, power, authority, responsibility, right, privilege, 

12 activity, or program; 

13 (4) the term ‘‘regulated entity’’ has the same 

14 meaning as in section 1303(20) of the Safety and 

15 Soundness Act (12 U.S.C. 4502(20)); and 

16 (5) the term ‘‘Transition Committee’’ means the 

17 Federal Mortgage Insurance Corporation Transition 

18 Committee established under section 404(a)(1). 

19 SEC. 402. FHFA TRANSITION. 

20 (a) ESTABLISHMENT.— 

21 (1) IN GENERAL.—Effective on the agency trans22 fer date, there is established in the Corporation the 

23 Federal Housing Finance Agency, which shall be 

24 maintained as a distinct entity within the Corpora25 tion. 


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1 (2) DIRECTOR.—The Federal Housing Finance 

2 Agency shall be headed by a Director, who shall be— 

3 (A) appointed by the President, by and 

4 with the advice and consent of the Senate; and 

5 (B) a non-voting member of the Board of 

6 Directors. 

7 (b) FEDERAL HOUSING FINANCE AGENCY TRANS8 FER.— 

9 (1) TRANSFER OF PROPERTY AND FUNCTIONS.— 

10 Effective on the agency transfer date and unless other11 wise specified by this Act, all property and functions 

12 of the Federal Housing Finance Agency are trans13 ferred to the Federal Housing Finance Agency of the 

14 Corporation. 

15 (2) INCUMBENT DIRECTOR.—The individual 

16 serving as the Director of the Existing Agency on the 

17 day before the agency transfer date may serve as the 

18 Director of the Federal Housing Finance Agency of 

19 the Corporation until the end of the term of such in20 dividual as Director of the Existing Agency under 

21 section 1312(b)(2) of the Safety and Soundness Act 

22 (12 U.S.C. 4512(b)(2)), as in effect on the day before 

23 the agency transfer date. 

24 (3) TRANSITION CHAIRPERSON.— 


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1 (A) IN GENERAL.—During the period begin2 ning on the agency transfer date and ending on 

3 the date on which the first individual is ap4 pointed as Chairperson under section 202, the 

5 Director shall serve as the Transition Chair6 person of the Corporation and, except as pro7 vided in subparagraph (B), shall exercise all au8 thorities of the Chairperson, unless stated other9 wise. 

10 (B) LIMITATION ON AUTHORITY.—In serv11 ing as the Transition Chairperson of the Cor12 poration pursuant to subparagraph (A), the Di13 rector shall not have the authority to establish 

14 any rule under section 2 or any rule relating to 

15 approved entities under title III. 

16 (c) POWERS AND DUTIES.— 

17 (1) IN GENERAL.—The Director of the Federal 

18 Housing Finance Agency of the Corporation shall— 

19 (A) retain and exercise all powers, includ20 ing conservatorship and receivership powers, as 

21 amended by this Act, of the Director of the Exist22 ing Agency on the day before the agency transfer 

23 date relating to the Federal Home Loan Bank 

24 System, the Federal Home Loan Banks, and the 

25 enterprises; 


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1 (B) manage and implement actions author2 ized by the Corporation related to the transition 

3 to the new housing finance system that impact 

4 the conservatorship or receivership of regulated 

5 entities; and 

6 (C) consult with other members of the Tran7 sition Committee and the Board of Directors as 

8 may be appropriate to fulfill the requirements of 

9 this Act. 

10 (2) AUTONOMY OF FHFA.—Except as provided in 

11 section 604(a)(2), or as otherwise specifically pro12 vided in this Act, the Chairperson and the Board of 

13 Directors may not— 

14 (A) intervene in any matter or proceeding 

15 before the Director, unless otherwise specifically 

16 provided by law; 

17 (B) appoint, direct, or remove any officer or 

18 employee of the Federal Housing Finance Agency 

19 of the Corporation; or 

20 (C) merge or consolidate the Federal Hous21 ing Finance Agency of the Corporation, or any 

22 of the functions or responsibilities of the Federal 

23 Housing Finance Agency of the Corporation, 

24 with any division, office, or other component of 

25 the Corporation. 


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1 (d) AGENCY EXPENDITURES AND BUDGET.— 

2 (1) IN GENERAL.—After the agency transfer date, 

3 the Director of the Federal Housing Finance Agency 

4 of the Corporation— 

5 (A) except as provided in paragraph (2), 

6 may obligate and expend amounts available to 

7 the Federal Housing Finance Agency; and 

8 (B) shall submit regular updates to the 

9 Board of Directors. 

10 (2) LIMITATION ON AMOUNT.— 

11 (A) BEFORE CHAIRPERSON APPOINTED.— 

12 During the period beginning on the agency 

13 transfer date and ending on the date on which 

14 the first individual is appointed as Chairperson 

15 under section 202, the Director shall require ap16 proval from the Transition Committee for any 

17 agency capital expenditure in excess of 

18 $5,000,000. 

19 (B) CHAIRPERSON APPOINTED.—On and 

20 after the date on which the first individual is 

21 appointed as Chairperson under section 202, the 

22 Director shall require approval from the Board 

23 of Directors for any agency capital expenditure 

24 in excess of $5,000,0000. 


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1 (e) COOPERATION.—During the period beginning on 

2 the date of enactment of this Act and ending on the system 

3 certification date, the Board of Directors and the Director 

4 shall cooperate and coordinate in the exercise of their re5 spective authorities to facilitate and achieve an orderly 

6 transition from housing finance markets facilitated by the 

7 enterprises to housing finance markets facilitated by the 

8 Corporation with minimum disruption in the availability 

9 of mortgage credit. 

10 (f) COORDINATION AND CONTINUATION OF CERTAIN

11 ACTIONS.— 

12 (1) IN GENERAL.—All regulations, orders, deter13 minations, and resolutions described in paragraph 

14 (2) shall remain in effect according to the terms of 

15 such regulations, orders, determinations, and resolu16 tions, and shall be enforceable by or against the Fed17 eral Housing Finance Agency of the Corporation 

18 until modified, terminated, set aside, or superseded in 

19 accordance with applicable law by the Federal Hous20 ing Finance Agency of the Corporation, any court of 

21 competent jurisdiction, or operation of law. 

22 (2) APPLICABILITY.—A regulation, order, deter23 mination, or resolution is described in this paragraph 

24 if it— 


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1 (A) was issued, made, prescribed, or allowed 

2 to become effective by— 

3 (i) the Existing Agency; 

4 (ii) the Federal Housing Finance 

5 Board; or 

6 (iii) a court of competent jurisdiction, 

7 and relates to functions transferred by this 

8 section; 

9 (B) relates to the performance of functions 

10 that are transferred by this section; and 

11 (C) is in effect on the agency transfer date. 

12 (g) USE OF AGENCY SERVICES.—Any agency, depart13 ment, or other instrumentality of the United States, and 

14 any successor to any such agency, department, or instru15 mentality, which was providing supporting services to the 

16 Existing Agency before the agency transfer date in connec17 tion with functions that are transferred to the Federal 

18 Housing Finance Agency of the Corporation shall— 

19 (1) continue to provide such services, on a reim20 bursable basis, until the transfer of such functions is 

21 complete; and 

22 (2) consult with any such agency to coordinate 

23 and facilitate a prompt and reasonable transition. 

24 (h) SAVINGS PROVISIONS.— 


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1 (1) EXISTING RIGHTS, DUTIES, AND OBLIGA2 TIONS NOT AFFECTED.—Subsection (a) shall not affect 

3 the validity of any right, duty, or obligation of the 

4 United States, the Director of the Existing Agency, or 

5 any other person, which— 

6 (A) arises under— 

7 (i) the Safety and Soundness Act; 

8 (ii) the Federal National Mortgage As9 sociation Charter Act; 

10 (iii) the Federal Home Loan Mortgage 

11 Corporation Act; or 

12 (iv) any other provision of law appli13 cable with respect to the Existing Agency; 

14 and 

15 (B) existed on the day before the agency 

16 transfer date. 

17 (2) CONTINUATION OF SUITS.—No action or 

18 other proceeding commenced by or against the Direc19 tor of the Existing Agency in connection with func20 tions that are transferred to the Federal Housing Fi21 nance Agency of the Corporation shall abate by rea22 son of the enactment of this Act, except that the Direc23 tor of the Federal Housing Finance Agency of the 

24 Corporation shall be substituted for the Director of the 


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1 Existing Agency as a party to any such action or 

2 proceeding. 

3 (i) TECHNICAL AND CONFORMING AMENDMENTS.— 

4 (1) FEDERAL HOUSING ENTERPRISES FINANCIAL

5 SAFETY AND SOUNDNESS ACT OF 1992.—The Safety 

6 and Soundness Act (12 U.S.C. 4501 et seq.) is amend7 ed— 

8 (A) in section 1303— 

9 (i) in paragraph (2), by striking ‘‘Fed10 eral Housing Finance Agency established 

11 under section 1311’’ and inserting ‘‘the Fed12 eral Housing Finance Agency within the 

13 Federal Mortgage Insurance Corporation es14 tablished under section 402(a)(1) of the 

15 Housing Finance Reform and Taxpayer 

16 Protection Act of 2014’’; and 

17 (ii) in paragraph (9), by striking 

18 ‘‘Federal Housing Finance Agency’’ and in19 serting ‘‘Agency’’; 

20 (B) in section 1311(a), by striking ‘‘estab21 lished’’ and all that follows through ‘‘Govern22 ment’’ and inserting ‘‘established in the Federal 

23 Mortgage Insurance Corporation, the Federal 

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1 tained as a distinct entity within the Federal 

2 Mortgage Insurance Corporation’’; 

3 (C) in section 1312— 

4 (i) in subsection (a)— 

5 (I) in the heading, by striking 

6 ‘‘ESTABLISHMENT OF POSITION’’ and 

7 inserting ‘‘DIRECTOR’’; and 

8 (II) by striking, ‘‘established the 

9 position of’’; and 

10 (ii) in subsection (b)(1), by striking 

11 ‘‘by the President’’ and all that follows 

12 through ‘‘housing finance’’ and inserting 

13 ‘‘in accordance with section 402(a)(2) of the 

14 Housing Finance Reform and Taxpayer 

15 Protection Act of 2014’’; and 

16 (D) in section 1367— 

17 (i) in subsection (a)(7), by striking 

18 ‘‘When acting’’ and inserting ‘‘Except as 

19 may be provided in section 604(a)(2) of the 

20 Housing Finance Reform and Taxpayer 

21 Protection Act of 2014, or as otherwise spe22 cifically provided for in such Act, when act23 ing’’; and 

24 (ii) by amending subsection (b)(2)(D) 

25 to read as follows: 


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1 ‘‘(D) POWER AS CONSERVATOR.— 

2 ‘‘(i) ENTERPRISES.—On and after the 

3 agency transfer date, as that term is defined 

4 in section 2 of the Housing Finance Reform 

5 and Taxpayer Protection Act of 2014, the 

6 Agency shall, as conservator, take such ac7 tions as are necessary— 

8 ‘‘(I) to wind down the operations 

9 of the enterprises in an orderly manner 

10 that complies with the requirements of 

11 such Act; 

12 ‘‘(II) to manage the affairs, assets, 

13 and obligations of the enterprises and 

14 to operate the enterprises in compli15 ance with the requirements of such Act; 

16 ‘‘(III) to undertake and carry out 

17 any sale, transfer, or disposition au18 thorized in sections 315(c), 321(d), 

19 604(i)(2), 701(b), or 702 of such Act in 

20 order to facilitate the orderly transi21 tion to the new housing finance system 

22 authorized by such Act; and 

23 ‘‘(IV) to maintain liquidity and 

24 stability in the secondary mortgage 

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1 prises shall have no authority to con2 duct new business, pursuant to title VI 

3 of such Act. 

4 ‘‘(ii) FEDERAL HOME LOAN BANKS.— 

5 The Corporation may, as conservator, take 

6 such actions as are— 

7 ‘‘(I) necessary to put a Federal 

8 Home Loan Bank in a sound and sol9 vent condition; and 

10 ‘‘(II) appropriate to carry on the 

11 business of a Federal Home Loan 

12 Bank and preserve and conserve the as13 sets and property of the Federal Home 

14 Loan Bank.’’. 

15 (2) FEDERAL HOME LOAN BANK ACT.—The Fed16 eral Home Loan Bank Act (12 U.S.C. 1421 et seq.) 

17 is amended— 

18 (A) by striking ‘‘Chairman of the Director 

19 of Governors’’ each place that term appears and 

20 inserting ‘‘Chairman of the Board of Governors’’; 

21 and 

22 (B) in section 2— 

23 (i) in paragraph (11), by striking 

24 ‘‘Federal Housing Finance Agency’’ and in25 serting ‘‘Agency’’; and 


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1 (ii) in paragraph (12), by striking 

2 ‘‘the Federal Housing Finance Agency’’ and 

3 all that follows through the period at the 

4 end and inserting ‘‘the Federal Housing Fi5 nance Agency within the Federal Mortgage 

6 Insurance Corporation established under 

7 section 402(a)(1) of the Housing Finance 

8 Reform and Taxpayer Protection Act of 

9 2014’’. 

10 (3) FEDERAL DEPOSIT INSURANCE ACT.—The 

11 Federal Deposit Insurance Act (12 U.S.C. 1811 et 

12 seq.) is amended— 

13 (A) in section 11(t)(2)(A), by inserting after 

14 clause (vii) the following: 

15 ‘‘(viii) The Federal Mortgage Insur16 ance Corporation.’’; and 

17 (B) in section 18(x)— 

18 (i) by inserting ‘‘the Federal Mortgage 

19 Insurance Corporation,’’ before ‘‘any Fed20 eral banking agency’’ each place that term 

21 appears; and 

22 (ii) by inserting ‘‘Corporation,’’ after 

23 ‘‘such Bureau,’’ each place that term ap24 pears. 


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1 (4) FEDERAL FINANCIAL INSTITUTIONS EXAMINA2 TION COUNCIL ACT OF 1978.—The Federal Financial 

3 Institutions Examination Council Act of 1978 (12 

4 U.S.C. 3301 et seq.) is amended— 

5 (A) in section 1004(a)— 

6 (i) by redesignating paragraphs (5) 

7 and (6) as paragraphs (6) and (7), respec8 tively; and 

9 (ii) by inserting after paragraph (4) 

10 the following: 

11 ‘‘(5) the Chairman of the Federal Mortgage In12 surance Corporation,’’; 

13 (B) in section 1011, in first sentence, by in14 serting ‘‘Federal Mortgage Insurance Corpora15 tion,’’ after ‘‘Financial Protection,’’; and 

16 (C) by inserting at the end the following: 

17 ‘‘SEC. 1012. ESTABLISHMENT OF THE SUBCOMMITTEE ON 

18 MORTGAGE SERVICING. 

19 ‘‘There shall be within the Council a subcommittee to 

20 be known as the ‘Subcommittee on Mortgage Servicing’, 

21 which shall consist of designees of heads of the Federal fi22 nancial institution regulatory agencies, the Bureau of Con23 sumer Financial Protection, the Federal Mortgage Insur24 ance Corporation, the Federal Housing Finance Agency, 


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1 and a representative of the State Liaison Committee estab2 lished under section 1007.’’. 

3 (5) FIRREA.—Section 1216 of the Financial 

4 Institutions Reform, Recovery, and Enhancement Act 

5 of 1989 (12 U.S.C. 1833e) is amended— 

6 (A) in subsection (a), by striking ‘‘Federal 

7 Housing Finance Agency’’ and inserting ‘‘Fed8 eral Mortgage Insurance Corporation’’; and 

9 (B) in subsection (c), by striking ‘‘Federal 

10 Housing Finance Agency’’ and inserting ‘‘Fed11 eral Mortgage Insurance Corporation’’. 

12 (6) HOUSING AND URBAN-RURAL RECOVERY ACT

13 OF 1983.—The first sentence of section 469 of the 

14 Housing and Urban-Rural Recovery Act of 1983 (12 

15 U.S.C. 1701p–1) is amended by inserting ‘‘the Fed16 eral Mortgage Insurance Corporation,’’ after ‘‘co17 operation of’’. 

18 (7) PAPERWORK REDUCTION ACT.—Section 

19 3502(5) of title 44, United States Code (commonly 

20 known as the ‘‘Paperwork Reduction Act’’), is amend21 ed by striking ‘‘Federal Housing Finance Agency’’ 

22 and inserting ‘‘Federal Mortgage Insurance Corpora23 tion’’. 

24 (8) PUBLIC LAW 93–495.—Section 111 of Public 

25 Law 93–495 (12 U.S.C. 250) is amended by inserting 


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1 ‘‘the Federal Mortgage Insurance Corporation,’’ after 

2 ‘‘Federal Housing Finance Agency,’’. 

3 (9) RIGHT TO FINANCIAL PRIVACY ACT OF 1978.— 

4 Section 1101(7) of the Right to Financial Privacy 

5 Act of 1978 (12 U.S.C. 3401(7)) is amended— 

6 (A) in subparagraph (H), by striking ‘‘; or’’ 

7 and inserting a semicolon; 

8 (B) in subparagraph (I), by striking ‘‘; 

9 and’’ and inserting ‘‘; or’’; and 

10 (C) by adding at the end the following: 

11 ‘‘(J) the Federal Mortgage Insurance Cor12 poration; and’’. 

13 (10) TITLE 5, UNITED STATES CODE.—Title 5, 

14 United States Code, is amended— 

15 (A) in section 5313, by inserting the fol16 lowing new item: 

17 ‘‘Chairperson of the Federal Mortgage Insurance 

18 Corporation.’’; and 

19 (B) in section 3132(a)(1)(D)— 

20 (i) by striking ‘‘Supervision,,’’ and in21 serting ‘‘Supervision,’’; and 

22 (ii) by inserting the ‘‘Federal Mortgage 

23 Insurance Corporation,’’ after ‘‘Federal 

24 Housing Finance Agency,’’. 


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1 (11) TITLE 18, UNITED STATES CODE.—Title 18, 

2 United States Code, is amended by striking ‘‘Federal 

3 Housing Finance Agency’’ each place such term ap4 pears in each of sections 212, 657, 1006, 1014, and 

5 1905 and inserting ‘‘Federal Mortgage Insurance Cor6 poration’’. 

7 (12) FEDERAL CREDIT UNION ACT.—Section 

8 107(7)(E) of the Federal Credit Union Act (12 U.S.C. 

9 1757(7)(E)) is amended by inserting ‘‘the Federal 

10 Mortgage Insurance Corporation,’’ before ‘‘the Federal 

11 National Mortgage Association’’. 

12 (13) BANK HOLDING COMPANY ACT.—Section 

13 5(c)(5)(B) of the Bank Holding Company Act (12 

14 U.S.C. 1844(c)(5)(B)) is amended— 

15 (A) in clause (iv), by striking ‘‘; or’’ and 

16 inserting a semicolon; 

17 (B) in clause (v), by striking the period at 

18 the end and insert ‘‘; or’’; and 

19 (C) by adding at the end the following: 

20 ‘‘(vi) an approved guarantor approved 

21 under section 311 of the Housing Finance 

22 Reform and Taxpayer Protection Act of 

23 2014.’’. 


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1 (14) CONGRESSIONAL BUDGET ACT OF 1974.— 

2 Section 504(c) of the Congressional Budget Act of 

3 1974 (2 U.S.C. 661c(c)) is amended— 

4 (A) in paragraph (1), by striking ‘‘or’’; 

5 (B) by redesignating paragraph (2) as 

6 paragraph (3); and 

7 (C) by inserting after paragraph (1) the fol8 lowing: 

9 ‘‘(2) are credit programs of the Federal Mortgage 

10 Insurance Corporation; or’’. 

11 (15) EFFECTIVE DATE.—The amendments made 

12 by this subsection shall take effect on the agency 

13 transfer date. 

14 SEC. 403. TRANSFER AND RIGHTS OF EMPLOYEES OF THE 

15 FHFA. 

16 (a) TRANSFER.— 

17 (1) IN GENERAL.—Effective on the agency trans18 fer date, each employee of the Existing Agency, in19 cluding each employee of the Office of the Inspector 

20 General of the Existing Agency, who is in good stand21 ing, shall be transferred to the Corporation for em22 ployment, and such transfer shall be deemed a trans23 fer of function for purposes of section 3503 of title 5, 

24 United States Code. 

25 (2) ASSIGNMENT.— 


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1 (A) IN GENERAL.—Except as provided in 

2 subparagraph (B), an employee transferred 

3 under paragraph (1) shall be appointed to a po4 sition in the Federal Housing Finance Agency of 

5 the Corporation. 

6 (B) EXCEPTION.—On and after the agency 

7 transfer date, the Chairperson, in consultation 

8 with the Director of the Federal Housing Fi9 nance Agency of the Corporation, may reassign 

10 an employee transferred under paragraph (1) to 

11 a component of the Corporation other than the 

12 Federal Housing Finance Agency of the Corpora13 tion, if the reassignment is in the best interest of 

14 the Corporation. 

15 (b) GUARANTEED POSITIONS.— 

16 (1) IN GENERAL.—Each employee transferred 

17 under subsection (a) shall be guaranteed a position 

18 with the same status, tenure, grade, and pay as that 

19 held on the day immediately preceding the transfer. 

20 (2) NO INVOLUNTARY SEPARATION OR REDUC21 TION.—An employee transferred under subsection (a) 

22 holding a permanent position on the day immediately 

23 preceding the transfer may not be involuntarily sepa24 rated or reduced in grade or compensation during the 

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1 cept for cause, or, in the case of a temporary em2 ployee, separated in accordance with the terms of the 

3 appointment of the employee. 

4 (c) APPOINTMENT AUTHORITY FOR EXCEPTED AND

5 SENIOR EXECUTIVE SERVICE EMPLOYEES.— 

6 (1) IN GENERAL.—In the case of an employee oc7 cupying a position in the excepted service or the Sen8 ior Executive Service, any appointment authority es9 tablished under law or by regulations of the Office of 

10 Personnel Management for filling such position shall 

11 be transferred, subject to paragraph (2). 

12 (2) DECLINE OF TRANSFER.—The Corporation 

13 may decline a transfer of authority under paragraph 

14 (1), to the extent that such authority relates to— 

15 (A) a position excepted from the competitive 

16 service because of its confidential, policymaking, 

17 policy-determining, or policy-advocating char18 acter; or 

19 (B) a noncareer appointee in the Senior 

20 Executive Service (within the meaning of section 

21 3132(a)(7) of title 5, United States Code). 

22 (d) EMPLOYEE BENEFIT PROGRAMS.— 

23 (1) IN GENERAL.—Any employee of the Existing 

24 Agency accepting employment with the Corporation 

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1 tain, for 12 months after the date on which such 

2 transfer occurs, membership in any employee benefit 

3 program of the Existing Agency or the Corporation, 

4 as applicable, including insurance, to which such em5 ployee belongs on the date of the transfer under sub6 section (a), if— 

7 (A) the employee does not elect to give up 

8 the benefit or membership in the program; and 

9 (B) the benefit or program is continued by 

10 the Corporation. 

11 (2) COST DIFFERENTIAL.— 

12 (A) IN GENERAL.—The difference in the 

13 costs between the benefits which would have been 

14 provided by the Existing Agency and those pro15 vided by this section shall be paid by the Cor16 poration. 

17 (B) HEALTH INSURANCE.—If any employee 

18 elects to give up membership in a health insur19 ance program or the health insurance program is 

20 not continued by the Corporation, the employee 

21 shall be permitted to select an alternate Federal 

22 health insurance program not later than 30 days 

23 after the date of such election or notice, without 

24 regard to any other regularly scheduled open sea25 son. 


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1 (e) ENTERPRISE EMPLOYEES.—To ensure an orderly 

2 transition to the new housing finance system established 

3 under this Act and to facilitate the organization, formation, 

4 and competency of the Corporation, the Corporation may 

5 hire employees from the enterprises. 

6 (f) REORGANIZATION.—If the Corporation determines 

7 that a reorganization of the workforce is required, the reor8 ganization shall be deemed a major reorganization for pur9 poses of affording affected employee retirement under sec10 tion 8336(d)(2) or 8414(b)(1)(B) of title 5, United States 

11 Code. 

12 SEC. 404. TRANSITION COMMITTEE. 

13 (a) ESTABLISHMENT AND PURPOSE.— 

14 (1) IN GENERAL.—Effective on the date of enact15 ment of this Act, there is established the Federal Mort16 gage Insurance Corporation Transition Committee. 

17 (2) PURPOSE.—The purpose of the Transition 

18 Committee shall be to— 

19 (A) develop a plan to facilitate an orderly 

20 transition to a new housing finance system in 

21 accordance with this Act; and 

22 (B) provide advice to the Transition Chair23 person or the Board when consulted. 

24 (b) COMPOSITION.— 


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1 (1) MEMBERS.—The Transition Committee shall 

2 be comprised of— 

3 (A) the Director; 

4 (B) the Chairman of the Federal Deposit 

5 Insurance Corporation; 

6 (C) the Comptroller of the Currency; 

7 (D) the Chairperson; and 

8 (E) any member of the Board of Directors. 

9 (2) CHAIRPERSON.— 

10 (A) BEFORE CHAIRPERSON OF CORPORA11 TION.—Until the date on which the first indi12 vidual is appointed as Chairperson under section 

13 202, the Director shall serve as the Chairperson 

14 of the Transition Committee. 

15 (B) CHAIRPERSON OF CORPORATION AP16 POINTED.—On and after the date on which the 

17 first individual is appointed as Chairperson 

18 under section 202, the Chairperson shall serve as 

19 the Chairperson of the Transition Committee. 

20 (3) ACTING OFFICIALS MAY SERVE.—In the event 

21 of a vacancy in the office of the head of a member 

22 agency, and pending the appointment of a successor, 

23 or during the absence or disability of the head of a 

24 member agency, the acting head of the member agency 


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1 shall serve as a member of the Transition Committee 

2 in the place of that agency head. 

3 (4) STAFF.—As necessary to carry out the duties 

4 of the Transition Committee, the Chairperson of the 

5 Transition Committee may— 

6 (A) before the agency transfer date, use em7 ployees of the Existing Agency; and 

8 (B) on and after the agency transfer date, 

9 use employees of the Corporation. 

10 (c) TRANSITION PLAN.— 

11 (1) DEVELOPMENT.—The Transition Committee 

12 shall develop the transition plan required by section 

13 602. 

14 (2) APPROVAL.—The transition plan may not be 

15 submitted to Congress under section 602, unless it is 

16 approved by a majority of the Transition Committee. 

17 (d) DISSOLUTION.—The Transition Committee shall be 

18 dissolved upon the later of— 

19 (1) the date on which the first individual is ap20 pointed as Chairperson under section 202; or 

21 (2) the date on which the transition plan is sub22 mitted to Congress in accordance with subsection 

23 (c)(2) and section 602. 


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1 SEC. 405. TRANSITION ASSESSMENTS. 

2 (a) IN GENERAL.—Section 1316 of the Safety and 

3 Soundness Act (12 U.S.C. 4516) is amended by adding at 

4 the end the following: 

5 ‘‘(i) ANNUAL ASSESSMENTS RELATING TO INITIAL

6 FUNDING OF THE FMIC.—Notwithstanding title VI of the 

7 Housing Finance Reform and Taxpayer Protection Act of 

8 2014 or any other provision of law, for the period beginning 

9 on the date of enactment of this subsection and ending on 

10 the system certification date (as that date is set forth under 

11 title VI of the Housing Finance Reform and Taxpayer Pro12 tection Act of 2014), the Agency shall establish and collect 

13 from the enterprises annual assessments in addition to those 

14 required under subsection (a) in an amount not exceeding 

15 the amount sufficient to provide for the reasonable costs (in16 cluding administrative costs) and expenses of the Federal 

17 Mortgage Insurance Corporation, including those purposes 

18 detailed in section 303(e)(6) of the Housing Finance Re19 form and Taxpayer Protection Act of 2014. All amounts 

20 collected under this subsection shall be transferred to the 

21 Federal Mortgage Insurance Corporation. The annual as22 sessment shall be payable semiannually for each fiscal year, 

23 on October 1 and April 1.’’. 

24 (b) TREATMENT OF ASSESSMENTS.— 

25 (1) DEPOSIT.— 


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1 (A) AMOUNTS RECEIVED BY THE CORPORA2 TION.—Amounts received by the Corporation 

3 from assessments imposed under section 1316(i) 

4 of the Safety and Soundness Act shall be depos5 ited by the Corporation in the Mortgage Insur6 ance Fund. 

7 (B) AMOUNTS RECEIVED BY THE EXISTING

8 AGENCY.—Amounts received by the Existing 

9 Agency beginning on the date of enactment of 

10 this Act until the agency transfer date from as11 sessments imposed under section 1316(i) of the 

12 Safety and Soundness Act shall be held in an ac13 count of the Existing Agency and shall be trans14 ferred to the Corporation on the agency transfer 

15 date for deposit in the Mortgage Insurance Fund 

16 in accordance with subparagraph (A). 

17 (C) EXEMPTION FROM APPORTIONMENT.— 

18 Notwithstanding any other provision of law, 

19 amounts received by the Corporation from any 

20 assessment imposed under section 1316(i) of the 

21 Safety and Soundness Act shall not be subject to 

22 apportionment for the purposes of chapter 15 of 

23 title 31, United States Code, or under any other 

24 authority. 


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1 (D) RULE OF CONSTRUCTION.—Amounts re2 ceived by the Corporation from any assessment 

3 imposed under section 1316(i) of the Safety and 

4 Soundness Act shall not be construed to be Gov5 ernment or public funds or appropriated money. 

6 (2) USE OF FUNDS.— 

7 (A) IN GENERAL.—The Existing Agency 

8 shall use amounts received from assessments im9 posed under section 1316(i) of the Safety and 

10 Soundness Act solely for the purpose of funding 

11 the Mortgage Insurance Fund on the agency 

12 transfer date. 

13 (B) TREASURY INVESTMENTS.—The Exist14 ing Agency may request the Secretary of the 

15 Treasury to invest the amounts received from as16 sessments imposed under section 1316(i) of the 

17 Safety and Soundness Act. 

18 (C) GOVERNMENT OBLIGATIONS.—Pursuant 

19 to a request under subparagraph (B), the Sec20 retary of the Treasury shall invest such amounts 

21 in Federal Government obligations— 

22 (i) guaranteed as to principal and in23 terest by the United States with maturities 

24 suitable to the needs of the Existing Agency; 

25 and 


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1 (ii) bearing interest at a rate deter2 mined by the Secretary of the Treasury, 

3 taking into consideration current market 

4 yields on outstanding marketable obliga5 tions of the United States of comparable 

6 maturity. 

7 SEC. 406. TRANSFER OF POWERS AND DUTIES ON THE SYS8 TEM CERTIFICATION DATE; CONTINUATION 

9 AND COORDINATION OF CERTAIN ACTIONS. 

10 (a) TRANSFER OF FUNCTIONS.—Effective on the sys11 tem certification date and except as provided in section 

12 332(a), there are transferred to the Corporation all func13 tions of the Federal Housing Finance Agency of the Cor14 poration and the Director thereof. 

15 (b) COORDINATION AND CONTINUATION OF CERTAIN

16 ACTIONS.— 

17 (1) IN GENERAL.—All regulations, orders, deter18 minations, and resolutions described in paragraph 

19 (2) shall remain in effect according to the terms of 

20 such regulations, orders, determinations, and resolu21 tions, and shall be enforceable by or against the Cor22 poration until modified, terminated, set aside, or su23 perseded in accordance with applicable law by the 

24 Corporation, any court of competent jurisdiction, or 

25 operation of law. 


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1 (2) APPLICABILITY.—A regulation, order, deter2 mination, or resolution is described in this paragraph 

3 if it— 

4 (A) was issued, made, prescribed, or allowed 

5 to become effective by— 

6 (i) the Existing Agency; 

7 (ii) the Federal Housing Finance 

8 Agency of the Corporation; 

9 (iii) the Federal Housing Finance 

10 Board; or 

11 (iv) a court of competent jurisdiction; 

12 (B) relates to the performance of functions 

13 that are transferred by subsection (a); and 

14 (C) is in effect on the effective date of the 

15 transfer under subsection (a). 

16 (c) USE OF AGENCY SERVICES.—Any agency, depart17 ment, or other instrumentality of the United States, and 

18 any successor to any such agency, department, or instru19 mentality, which was providing supporting services to the 

20 Federal Housing Finance Agency of the Corporation before 

21 the system certification date in connection with functions 

22 that are transferred to the Corporation under subsection (a) 

23 shall— 


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1 (1) continue to provide such services, on a reim2 bursable basis, until the transfer of such functions is 

3 complete; and 

4 (2) consult with any such agency to coordinate 

5 and facilitate a prompt and reasonable transition. 

6 (d) SAVINGS PROVISIONS.— 

7 (1) EXISTING RIGHTS, DUTIES, AND OBLIGA8 TIONS NOT AFFECTED.—Subsection (a) shall not affect 

9 the validity of any right, duty, or obligation of the 

10 United States, the Director of the Federal Housing 

11 Finance Agency of the Corporation, or any other per12 son, which— 

13 (A) arises under— 

14 (i) the Safety and Soundness Act; 

15 (ii) the Federal National Mortgage As16 sociation Charter Act; 

17 (iii) the Federal Home Loan Mortgage 

18 Corporation Act; or 

19 (iv) any other provision of law appli20 cable with respect to the Federal Housing 

21 Finance Agency; and 

22 (B) existed on the day before the system cer23 tification date. 

24 (2) CONTINUATION OF SUITS.—No action or 

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1 tor of the Federal Housing Finance Agency of the 

2 Corporation in connection with functions that are 

3 transferred to the Corporation under subsection (a) 

4 shall abate by reason of the enactment of this Act, ex5 cept that the Corporation shall be substituted for the 

6 Director of the Federal Housing Finance Agency of 

7 the Corporation as a party to any such action or pro8 ceeding. 

9 SEC. 407. TECHNICAL AND CONFORMING AMENDMENTS RE10 LATING TO ABOLISHMENT OF FHFA. 

11 (a) EFFECTIVE DATE.—The amendments made by this 

12 section shall take effect on the system certification date. 

13 (b) ACCESS TO LOCAL TV ACT OF 2000.—Section 

14 1004(d)(2)(D)(iii) of the Launching Our Communities’ Ac15 cess to Local Television Act of 2000 (47 U.S.C. 

16 1103(d)(2)(D)(iii)) is amended by striking ‘‘Federal Hous17 ing Finance Agency’’ and inserting ‘‘Federal Mortgage In18 surance Corporation’’. 

19 (c) COMMODITY EXCHANGE ACT.—Section 1a(39)(E) 

20 of the Commodity Exchange Act (7 U.S.C. 1a(39)(E)) is 

21 amended by striking ‘‘Federal Housing Finance Agency’’ 

22 and inserting ‘‘Federal Mortgage Insurance Corporation’’. 

23 (d) EMERGENCY ECONOMIC STABILIZATION ACT OF

24 2008.—The Emergency Economic Stabilization Act of 2008 

25 (12 U.S.C. 5201 note) is amended— 


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1 (1) in section 104(b)(3), by striking ‘‘the Direc2 tor of the Federal Housing Finance Agency’’ and in3 serting ‘‘the Chairperson of the Federal Mortgage In4 surance Corporation’’; 

5 (2) in section 109(b), by striking ‘‘Federal Hous6 ing Finance Agency’’ and inserting ‘‘Federal Mort7 gage Insurance Corporation’’; and 

8 (3) in section 110(a)(1)(A), by striking ‘‘Federal 

9 Housing Finance Agency’’ and inserting ‘‘Federal 

10 Mortgage Insurance Corporation’’. 

11 (e) FEDERAL NATIONAL MORTGAGE ASSOCIATION

12 CHARTER ACT.—The Federal National Mortgage Associa13 tion Charter Act (12 U.S.C. 1716 et seq.) is amended— 

14 (1) in section 303(c)(2), by striking ‘‘Director of 

15 the Federal Housing Finance Agency’’ and inserting 

16 ‘‘Chairperson of the Federal Mortgage Insurance Cor17 poration’’; and 

18 (2) in section 309— 

19 (A) in subsection (d)(3)(B)— 

20 (i) by striking ‘‘Federal Housing Fi21 nance Agency’’ and inserting ‘‘Federal 

22 Mortgage Insurance Corporation’’; and 

23 (ii) by striking ‘‘Director’’ each place 

24 that term appears and inserting ‘‘Chair25 person’’; 


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1 (B) in subsection (k)(1), by striking ‘‘Direc2 tor of the Federal Housing Finance Agency’’ and 

3 inserting ‘‘Chairperson of the Federal Mortgage 

4 Insurance Corporation’’; 

5 (C) in subsection (m)— 

6 (i) in paragraph (1), by striking ‘‘Di7 rector of the Federal Housing Finance 

8 Agency’’ and inserting ‘‘Chairperson of the 

9 Federal Mortgage Insurance Corporation’’; 

10 and 

11 (ii) in paragraph (2)— 

12 (I) by striking ‘‘Federal Housing 

13 Finance Agency’’ and inserting ‘‘Fed14 eral Mortgage Insurance Corporation’’; 

15 and 

16 (II) by striking ‘‘Director’’ each 

17 place that term appears and inserting 

18 ‘‘Chairperson’’; and 

19 (D) in subsection (n)— 

20 (i) in paragraph (1), by striking ‘‘Di21 rector of the Federal Housing Finance 

22 Agency’’ and inserting ‘‘Chairperson of the 

23 Federal Mortgage Insurance Corporation’’; 

24 (ii) in paragraph (2)(L), by striking 

25 ‘‘Director of the Federal Housing Finance 


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1 Agency’’ and inserting ‘‘Chairperson of the 

2 Federal Mortgage Insurance Corporation’’; 

3 and 

4 (iii) in paragraph (3)(B), by striking 

5 ‘‘Director of the Federal Housing Finance 

6 Agency’’ and inserting ‘‘Chairperson of the 

7 Federal Mortgage Insurance Corporation’’. 

8 (f) FEDERAL DEPOSIT INSURANCE ACT.—The Federal 

9 Deposit Insurance Act (12 U.S.C. 1811 et seq.) is amend10 ed— 

11 (1) in section 7(a)(2)(A), by striking ‘‘Federal 

12 Housing Finance Agency’’ each place that term ap13 pears and inserting ‘‘Federal Mortgage Insurance 

14 Corporation’’; 

15 (2) in section 8(e)(7)(A)(vi), by striking ‘‘Fed16 eral Housing Finance Agency’’ each place that term 

17 appears and inserting ‘‘Federal Mortgage Insurance 

18 Corporation’’; and 

19 (3) in section 33(e), by striking ‘‘Federal Hous20 ing Finance Agency’’ and inserting ‘‘Federal Mort21 gage Insurance Corporation’’. 

22 (g) FEDERAL FINANCIAL INSTITUTIONS EXAMINATION

23 COUNCIL ACT OF 1978.—The first sentence of section 1011 

24 of the Federal Financial Institutions Examination Council 


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1 Act of 1978 (12 U.S.C. 3310) is amended by striking ‘‘and 

2 the Federal Housing Finance Agency’’. 

3 (h) FEDERAL HOME LOAN BANK ACT.—The Federal 

4 Home Loan Bank Act (12 U.S.C. 1421 et seq.) is amend5 ed— 

6 (1) in section 2— 

7 (A) in paragraph (11), as previously 

8 amended by section 402(i), by striking ‘‘Agency’’ 

9 and inserting ‘‘Chairperson of the Federal Mort10 gage Insurance Corporation’’; and 

11 (B) in paragraph (12), as previously 

12 amended by section 402(i), by striking ‘‘the Fed13 eral Housing Finance Agency within the Federal 

14 Mortgage Insurance Corporation established 

15 under section 402(a)(1) of the Housing Finance 

16 Reform and Taxpayer Protection Act of 2014’’ 

17 and inserting ‘‘Federal Mortgage Insurance Cor18 poration established under section 201 of the 

19 Housing Finance Reform and Taxpayer Protec20 tion Act of 2014’’; 

21 (2) in section 10(a)(3)(B), by inserting ‘‘, subject 

22 to such regulations that the Federal Mortgage Insur23 ance Corporation may issue to ensure the safety and 

24 soundness of the Federal Home Loan Banks, covered 

25 securities insured by the Federal Mortgage Insurance 


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1 Corporation under the Housing Finance Reform and 

2 Taxpayer Protection Act of 2014’’ after ‘‘Government 

3 National Mortgage Association’’; and 

4 (3) in section 11(h), by inserting ‘‘, subject to 

5 such regulations that the Federal Mortgage Insurance 

6 Corporation may issue to ensure the safety and 

7 soundness of the Federal Home Loan Banks, covered 

8 securities insured by the Federal Mortgage Insurance 

9 Corporation under the Housing Finance Reform and 

10 Taxpayer Protection Act of 2014’’ after ‘‘Federal 

11 Home Loan Mortgage Corporation pursuant to sec12 tion 305 or section 306 of the Federal Home Loan 

13 Mortgage Corporation Act’’. 

14 (i) FEDERAL HOME LOAN MORTGAGE CORPORATION

15 ACT.—The Federal Home Loan Mortgage Corporation Act 

16 (12 U.S.C. 1451 et seq.) is amended— 

17 (1) in section 303— 

18 (A) in subsection (b)(2), by striking ‘‘Direc19 tor of the Federal Housing Finance Agency’’ and 

20 inserting ‘‘Chairperson of the Federal Mortgage 

21 Insurance Corporation’’; and 

22 (B) in subsection (h)— 

23 (i) in paragraph (2)— 

24 (I) by striking ‘‘Federal Housing 

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1 eral Mortgage Insurance Corporation’’; 

2 and 

3 (II) by striking ‘‘Director’’ each 

4 place that term appears and inserting 

5 ‘‘Chairperson;’’ and 

6 (ii) in paragraph (4), by striking ‘‘Di7 rector’’ and inserting ‘‘Chairperson’’; 

8 (2) in section 305(a)(2), by striking ‘‘Director of 

9 the Federal Housing Finance Agency’’ and inserting 

10 ‘‘Chairperson of the Federal Mortgage Insurance Cor11 poration’’; and 

12 (3) in section 307— 

13 (A) in subsection (c)(1), by striking ‘‘Fed14 eral Housing Finance Agency’’ and inserting 

15 ‘‘Federal Mortgage Insurance Corporation’’; 

16 (B) in subsection (e)— 

17 (i) in paragraph (1)— 

18 (I) by striking ‘‘Federal Housing 

19 Finance Agency’’ and inserting ‘‘Fed20 eral Mortgage Insurance Corporation’’; 

21 and 

22 (II) by striking ‘‘Director’’ each 

23 place that term appears and inserting 

24 ‘‘Chairperson’’; and 

25 (ii) in paragraph (2)— 


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1 (I) by striking ‘‘Federal Housing 

2 Finance Agency’’ and inserting ‘‘Fed3 eral Mortgage Insurance Corporation’’; 

4 and 

5 (II) by striking ‘‘Director’’ each 

6 place that term appears and inserting 

7 ‘‘Chairperson’’; and 

8 (C) in subsection (f)— 

9 (i) in paragraph (1), by striking ‘‘Di10 rector of the Federal Housing Finance 

11 Agency’’ and inserting ‘‘Chairperson of the 

12 Federal Mortgage Insurance Corporation’’; 

13 (ii) in paragraph (2), by striking ‘‘Di14 rector of the Federal Housing Finance 

15 Agency’’ each place that term appears and 

16 inserting ‘‘Chairperson of the Federal Mort17 gage Insurance Corporation’’; and 

18 (iii) in paragraph (3)(B), by striking 

19 ‘‘Director of the Federal Housing Finance 

20 Agency’’ and inserting ‘‘Chairperson of the 

21 Federal Mortgage Insurance Corporation’’. 

22 (j) FEDERAL HOUSING ENTERPRISES FINANCIAL

23 SAFETY AND SOUNDNESS ACT OF 1992.—The Safety and 

24 Soundness Act (12 U.S.C. 4501 et seq.) is amended— 

25 (1) in section 1303— 


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1 (A) in paragraph (2), as previously amend2 ed by section 402(i), by striking ‘‘the Federal 

3 Housing Finance Agency within the Federal 

4 Mortgage Insurance Corporation established 

5 under section 402(a)(1) of the Housing Finance 

6 Reform and Taxpayer Protection Act of 2014’’ 

7 and inserting ‘‘Federal Mortgage Insurance Cor8 poration established under section 201 of the 

9 Housing Finance Reform and Taxpayer Protec10 tion Act of 2014’’; 

11 (B) by striking paragraph (4) and inserting 

12 the following: 

13 ‘‘(4) [Reserved.]’’; and 

14 (C) in paragraph (9), as previously amend15 ed by section 402(i), by striking ‘‘Agency’’ and 

16 inserting ‘‘Chairperson of the Federal Mortgage 

17 Insurance Corporation’’; 

18 (2) by repealing section 1313A; 

19 (3) in section 1317— 

20 (A) by striking subsection (d); and 

21 (B) by redesignating subsections (e) through 

22 (i) as subsections (d) through (h), respectively; 

23 and 

24 (4) in section 1367— 


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1 (A) in subsection (a), in the heading, by 

2 striking ‘‘AGENCY’’ and inserting ‘‘CORPORA3 TION’’; and 

4 (B) in subsection (b), in the heading to 

5 paragraph (9)(B), as so redesignated, by striking 

6 ‘‘AGENCY’’ and inserting ‘‘CORPORATION’’. 

7 (k) FINANCIAL INSTITUTIONS REFORM, RECOVERY, 

8 AND ENHANCEMENT ACT OF 1989.—The Financial Institu9 tions Reform, Recovery, and Enhancement Act of 1989 

10 (Public Law 101–73; 103 Stat. 183) is amended— 

11 (1) in section 402(e), by striking ‘‘Federal Hous12 ing Finance Agency’’ each place that term appears 

13 and inserting ‘‘Federal Mortgage Insurance Corpora14 tion’’; 

15 (2) in section 1124, by striking ‘‘Federal Hous16 ing Finance Agency’’ each place that term appears 

17 and inserting ‘‘Federal Mortgage Insurance Corpora18 tion’’; and 

19 (3) in section 1125(b), by striking ‘‘Federal 

20 Housing Finance Agency’’ and inserting ‘‘Federal 

21 Mortgage Insurance Corporation’’. 

22 (l) FLOOD DISASTER PROTECTION ACT OF 1973.—Sec23 tion 102(f)(3)(A) of the Flood Disaster Protection Act of 

24 1973 (42 U.S.C. 4012a(f)(3)(A)) is amended by striking 

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1 serting ‘‘Chairperson of the Federal Mortgage Insurance 

2 Corporation’’. 

3 (m) HOUSING ECONOMIC RECOVERY ACT OF 2008.— 

4 Section 1002(b) of the Housing and Economic Recovery Act 

5 of 2008 (Public Law 110–289; 122 Stat. 2661) is amend6 ed— 

7 (1) in paragraph (1), by striking ‘‘Federal Hous8 ing Finance Agency’’ and inserting ‘‘Federal Mort9 gage Insurance Corporation’’; and 

10 (2) in paragraph (2), by striking ‘‘Director of 

11 the Agency’’ and inserting ‘‘Chairperson of the Fed12 eral Mortgage Insurance Corporation’’. 

13 (n) HOUSING AND URBAN-RURAL RECOVERY ACT OF

14 1983.—The first sentence of section 469 of the Housing and 

15 Urban-Rural Recovery Act of 1983 (12 U.S.C. 1701p-1) is 

16 amended by striking ‘‘Federal Housing Finance Agency,’’. 

17 (o) MULTIFAMILY ASSISTED HOUSING REFORM AND

18 AFFORDABILITY ACT OF 1997.—Section 517(b)(4) of the 

19 Multifamily Assisted Housing Reform and Affordability 

20 Act of 1997 (42 U.S.C. 1437f note) is amended by striking 

21 ‘‘Federal Housing Finance Agency’’ and inserting ‘‘Federal 

22 Mortgage Insurance Corporation’’. 

23 (p) PUBLIC LAW 93–495.—Section 111 of Public Law 

24 93–495 (12 U.S.C. 250) is amended by striking ‘‘the Direc25 tor of the Federal Housing Finance Agency,’’. 


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1 (q) NEIGHBORHOOD REINVESTMENT CORPORATION

2 ACT.—Section 606(c)(3) of the Neighborhood Reinvestment 

3 Corporation Act (42 U.S.C. 8105(c)(3)) is amended by 

4 striking ‘‘Federal Housing Finance Agency’’ and inserting 

5 ‘‘Federal Mortgage Insurance Corporation’’. 

6 (r) RIEGLE COMMUNITY DEVELOPMENT AND REGU7 LATORY IMPROVEMENT ACT OF 1994.—Section 117(e) of the 

8 Riegle Community Development and Regulatory Improve9 ment Act of 1994 (12 U.S.C. 4716(e)) is amended by strik10 ing ‘‘Federal Housing Finance Agency’’ and inserting 

11 ‘‘Federal Mortgage Insurance Corporation’’. 

12 (s) RIGHT TO FINANCIAL PRIVACY ACT OF 1978.—Sec13 tion 1113(o) of the Right to Financial Privacy Act of 1978 

14 (12 U.S.C. 3413(o)) is amended— 

15 (1) in the heading to the subsection, by striking 

16 ‘‘FEDERAL HOUSING FINANCE AGENCY’’ and insert17 ing ‘‘FEDERAL MORTGAGE INSURANCE CORPORA18 TION’’; 

19 (2) by striking ‘‘Federal Housing Finance Agen20 cy’’ and inserting ‘‘Federal Mortgage Insurance Cor21 poration’’; and 

22 (3) by striking ‘‘Federal Housing Finance Agen23 cy’s’’ and inserting ‘‘Federal Mortgage Insurance Cor24 poration’s’’. 


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1 (t) SARBANES-OXLEY ACT OF 2002.—Section 

2 105(b)(5)(B)(ii)(II) of the Sarbanes-Oxley Act of 2002 (15 

3 U.S.C. 7215(b)(5)(B)(ii)(II)) is amended by striking ‘‘Di4 rector of the Federal Housing Finance Agency’’ and insert5 ing ‘‘Chairperson of the Federal Mortgage Insurance Cor6 poration’’. 

7 (u) SECURITIES EXCHANGE ACT.—Section 15G of the 

8 Securities Exchange Act (15 U.S.C. 78o-11) is amended— 

9 (1) in subsection (b)(2), by striking ‘‘Federal 

10 Housing Finance Agency’’ and inserting ‘‘Federal 

11 Mortgage Insurance Corporation’’; and 

12 (2) in subsection (e)(4), by striking ‘‘Director of 

13 the Federal Housing Finance Agency’’ each place that 

14 term appears and inserting ‘‘Chairperson of the Fed15 eral Mortgage Insurance Corporation’’. 

16 (v) TRUTH IN LENDING ACT.—The Truth in Lending 

17 Act (15 U.S.C. 1601 et seq.) is amended— 

18 (1) section 129H(b)(4), by striking ‘‘Federal 

19 Housing Finance Agency’’ and inserting ‘‘Federal 

20 Mortgage Insurance Corporation’’; and 

21 (2) in section 129E— 

22 (A) in subsection (g)(1), by striking ‘‘Fed23 eral Housing Finance Agency’’ and inserting 

24 ‘‘Federal Mortgage Insurance Corporation’’; and 


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1 (B) in subsection (h), by striking ‘‘Federal 

2 Housing Finance Agency’’ and inserting ‘‘Fed3 eral Mortgage Insurance Corporation’’. 

4 (w) OTHER REFERENCES IN FEDERAL LAW.—On and 

5 after the system certification date, any reference to the Fed6 eral Housing Finance Agency or the Director thereof in any 

7 law, rule, regulation, certificate, directive, instruction, or 

8 other official paper in force on the system certification date 

9 shall be considered to refer and apply to the Federal Mort10 gage Insurance Corporation and the Chairperson thereof, 

11 respectively. 

12 SEC. 408. REPEAL OF MANDATORY HOUSING GOALS. 

13 (a) REPEAL OF HOUSING GOALS.—The Safety and 

14 Soundness Act is amended by striking sections 1331 

15 through 1336 (12 U.S.C. 4561–6). 

16 (b) CONFORMING AMENDMENTS.—The Safety and 

17 Soundness Act (12 U.S.C. 4501 et seq.) is amended— 

18 (1) in section 1303(28), by striking ‘‘, and, for 

19 the purposes’’ and all that follows through ‘‘des20 ignated disaster areas’’; 

21 (2) in section 1324(b)(1)(A), by striking clauses 

22 (i), (ii), and (iv); 

23 (3) in section 1341— 

24 (A) in subsection (a)— 


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1 (i) in paragraph (1), by inserting ‘‘or’’ 

2 after the semicolon at the end; 

3 (ii) in paragraph (2), by striking the 

4 semicolon at the end and inserting a period; 

5 and 

6 (iii) by striking paragraphs (3) and 

7 (4); and 

8 (B) in subsection (b)(2)— 

9 (i) in subparagraph (A), by inserting 

10 ‘‘or’’ after the semicolon at the end; 

11 (ii) by striking subparagraphs (B) and 

12 (C); and 

13 (iii) by redesignating subparagraph 

14 (D) as subparagraph (B); 

15 (4) in section 1345(a)— 

16 (A) in paragraph (1), by inserting ‘‘or’’ 

17 after the semicolon at the end; 

18 (B) in paragraph (2), by striking the semi19 colon at the end and inserting a period; and 

20 (C) by striking paragraphs (3) and (4); and 

21 (5) in section 1371(a)(2), by striking ‘‘with any 

22 housing goal established under subpart B of part 2 of 

23 subtitle A of this title, with section 1336 or 1337 of 

24 this title,’’. 


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1 (c) EFFECTIVE DATE.—The amendments made by this 

2 section shall take effect on the date of enactment of this Act. 

3 (d) REQUIRED COMPLIANCE WITH NONDISCRIMINA4 TION LAWS.— 

5 (1) APPROVED ENTITIES; PLATFORM.—Notwith6 standing any other provision of this Act, approved 

7 entities and the Securitization Platform shall comply 

8 with Federal and State nondiscrimination laws, in9 cluding the Fair Housing Act (42 U.S.C. 3601 et seq.) 

10 and the Equal Credit Opportunity Act (15 U.S.C. 

11 1691 et seq.). 

12 (2) CORPORATION.— 

13 (A) IN GENERAL.—In carrying out this Act, 

14 the Corporation shall comply with Federal and 

15 State nondiscrimination laws. 

16 (B) PERIODIC REVIEW.—The Corporation 

17 shall periodically review its policies, standards, 

18 and guidelines with respect to eligible mortgage 

19 loans, including, but not limited to, any auto20 mated underwriting systems, to ensure that such 

21 policies, standards, and guidelines are consistent 

22 with the requirements of section 408(d). 

23 (3) SAFETY AND SOUNDNESS ACT.—Section 1325 

24 of the Safety and Soundness Act (12 U.S.C. 4545) is 

25 amended— 


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1 (A) in the matter preceding paragraph (1), 

2 by striking ‘‘The Secretary’’ and inserting the 

3 following: 

4 ‘‘(a) IN GENERAL.—The Secretary’’; 

5 (B) in paragraph (1)— 

6 (i) by inserting ‘‘, approved guarantor, 

7 approved multifamily guarantor, approved 

8 aggregator, and the Securitization Plat9 form’’ after ‘‘enterprise’’; 

10 (ii) by inserting ‘‘or guarantee’’ after 

11 ‘‘purchase’’; and 

12 (iii) by inserting ‘‘or mortgage-backed 

13 security’’ after ‘‘mortgage’’; 

14 (C) in paragraph (2)— 

15 (i) by striking ‘‘(2) by regulation’’ and 

16 by inserting ‘‘(2)(A) by regulation’’; 

17 (ii) by inserting ‘‘and’’ after the semi18 colon; and 

19 (iii) by adding at the end the fol20 lowing: 

21 ‘‘(B) with respect to the market for covered guar22 antee transactions and covered market-based risk23 sharing transactions, by regulation, require each ap24 proved guarantor, approved multifamily guarantor, 

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1 retary to assist the Secretary in investigating whether 

2 a mortgage lender with which the approved guar3 antor, approved multifamily guarantor, or approved 

4 aggregator does business has failed to comply with the 

5 Fair Housing Act (42 U.S.C. 3601 et seq.);’’; 

6 (D) in paragraph (3)— 

7 (i) by striking ‘‘(3) by regulation’’ and 

8 by inserting ‘‘(3)(A) by regulation’’; 

9 (ii) by inserting ‘‘and’’ after the semi10 colon; and 

11 (iii) by adding at the end the fol12 lowing: 

13 ‘‘(B) with respect to the market for covered guar14 antee transactions and covered market-based risk15 sharing transactions, by regulation, require each ap16 proved guarantor, approved multifamily guarantor, 

17 and approved aggregator to submit data to the Sec18 retary to assist in investigating whether a mortgage 

19 lender with which the approved guarantor, approved 

20 multifamily guarantor, or approved aggregator does 

21 business has failed to comply with the Equal Credit 

22 Opportunity Act (15 U.S.C. 1691 et seq.), and shall 

23 submit any such information received to the appro24 priate Federal agencies, as provided in section 704 of 


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1 the Equal Credit Opportunity Act (15 U.S.C. 1691c), 

2 for appropriate action;’’; 

3 (E) in paragraph (4), by inserting ‘‘and the 

4 Federal Mortgage Insurance Corporation’’ after 

5 ‘‘enterprises’’; 

6 (F) in paragraph (5)— 

7 (i) by striking ‘‘(5) direct the’’ and by 

8 inserting ‘‘(5)(A) direct the’’; 

9 (ii) by inserting ‘‘and’’ after the semi10 colon; and 

11 (iii) by adding at the end the fol12 lowing: 

13 ‘‘(B) with respect to the market for covered guar14 antee transactions and covered market-based risk15 sharing transactions, apply various remedial actions, 

16 including suspension, probation, reprimand, or settle17 ment, against lenders that have been found to have 

18 engaged in discriminatory lending practices in viola19 tion of the Fair Housing Act or the Equal Credit Op20 portunity Act, pursuant to a final adjudication on 

21 the record, and after opportunity for an administra22 tive hearing, in accordance with subchapter II of 

23 chapter 5 of title 5, United States Code; and’’; 

24 (G) in paragraph (6)— 


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1 (i) by striking ‘‘(6) periodically re2 view’’ and by inserting ‘‘(6)(A) periodically 

3 review’’; 

4 (ii) by striking the period at the end 

5 and inserting ‘‘; and’’; and 

6 (iii) by adding at the end the fol7 lowing: 

8 ‘‘(B) with respect to the market for covered 

9 guarantee transactions and covered market-based 

10 risk-sharing transactions, periodically review 

11 and comment on the underwriting and appraisal 

12 guidelines of each approved guarantor, approved 

13 multifamily guarantor, and approved 

14 aggregator, and the policies, standards, and 

15 guidelines of the Securitization Platform to en16 sure that such guidelines are consistent with the 

17 Fair Housing Act and this section.’’; and 

18 (H) by adding at the end the following: 

19 ‘‘(b) DEFINITIONS.—In this section, the terms ‘ap20 proved guarantor’, ‘approved multifamily guarantor’, ‘ap21 proved aggregator’, ‘covered guarantee transaction’, ‘covered 

22 market-based risk-sharing transaction’, and ‘Securitization 

23 Platform’ have the meanings given such terms in section 

24 2 of the Housing Finance Reform and Taxpayer Protection 

25 Act of 2014.’’. 


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1 TITLE V—IMPROVING TRANS2 PARENCY, ACCOUNTABILITY, 

3 AND EFFICACY WITHIN AF4 FORDABLE HOUSING 

5 SEC. 501. AFFORDABLE HOUSING ALLOCATIONS. 

6 (a) FEE AND ALLOCATION OF AMOUNTS.—In addition 

7 to any fees for the provision of insurance established in ac8 cordance with title III, in each fiscal year the Corporation 

9 shall— 

10 (1) charge and collect a fee determined as pro11 vided in subsection (b) for each dollar of the out12 standing principal balance of all eligible mortgage 

13 loans that collateralize covered securities insured 

14 under this Act; and 

15 (2) allocate or otherwise transfer, on an annual 

16 basis— 

17 (A) 75 percent of such fee amounts to the 

18 Secretary of Housing and Urban Development to 

19 fund the Housing Trust Fund established under 

20 section 1338 of the Safety and Soundness Act 

21 (12 U.S.C. 4568); 

22 (B) 15 percent of such fee amounts to the 

23 Secretary of the Treasury to fund the Capital 

24 Magnet Fund established under section 1339 of 


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1 the Safety and Soundness Act (12 U.S.C. 4569); 

2 and 

3 (C) 10 percent of such fee amounts to the 

4 Corporation to fund the Market Access Fund es5 tablished under section 504. 

6 (b) DETERMINATION OF FEE.—The fee required to be 

7 charged under subsection (a) shall be determined as follows: 

8 (1) INITIAL FEE.—Beginning on the date of en9 actment of this Act and ending upon the date set forth 

10 under paragraph (2)(E), the fee shall be an amount 

11 equal to 10 basis points for each dollar of the out12 standing principal balance of eligible mortgage loans 

13 collateralizing covered securities insured under this 

14 Act. 

15 (2) SUBSEQUENT INCENTIVE-BASED FEE.—Not 

16 later than 6 months after the date that the Corpora17 tion has approved at least 2 approved guarantors, ap18 proved multifamily guarantors, or approved 

19 aggregators, the Corporation shall, by regulation, 

20 after notice and comment, establish a formula for de21 termining the fee that meets the following criteria: 

22 (A) AVERAGE FOR ALL FEES.—The average 

23 of fees charged on the total outstanding principal 

24 balance of all eligible mortgage loans 


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1 collateralizing covered securities insured under 

2 this Act shall be equal to 10 basis points. 

3 (B) PERMISSIBLE RANGE.—The highest 

4 basis point fee charged to an approved guar5 antor, approved multifamily guarantor, or ap6 proved aggregator engaged in a covered guar7 antee transaction or an approved aggregator en8 gaged in a covered market-based risk-sharing 

9 transaction shall not exceed 2 times the lowest 

10 basis point fee charged. 

11 (C) INCENTIVES TO SERVE UNDERSERVED

12 MARKET SEGMENTS.— 

13 (i) IN GENERAL.—The formula deter14 mined under this subsection shall provide 

15 that the amount by which any particular 

16 fee charged to an approved guarantor, ap17 proved multifamily guarantor, or approved 

18 aggregator engaged in a covered guarantee 

19 transaction or an approved aggregator en20 gaged in a covered market-based risk-shar21 ing transaction may be more or less than 

22 the average fee required under subpara23 graph (A) based upon consideration of the 

24 following factors: 


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1 (I) PERFORMANCE RELATIVE TO

2 PEERS.—The performance of each ap3 proved guarantor, approved multi4 family guarantor, or approved 

5 aggregator engaged in a covered guar6 antee transaction and each approved 

7 aggregator engaged in a covered mar8 ket-based risk-sharing transaction in 

9 serving underserved market segments, 

10 as identified and defined under section 

11 210, relative to the performance of all 

12 other approved guarantors, approved 

13 multifamily guarantors, or approved 

14 aggregators engaged in covered guar15 antee transactions or approved 

16 aggregators engaged in covered market17 based risk-sharing transactions. 

18 (II) PERFORMANCE RELATIVE TO

19 PRIMARY MARKET LOAN ORIGINATION

20 DATA.—The performance of each ap21 proved guarantor, approved multi22 family guarantor, or approved 

23 aggregator engaged in a covered guar24 antee transaction and each approved 

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1 ket-based risk-sharing transaction in 

2 serving underserved market segments, 

3 as identified and defined under section 

4 210, relative to the level of primary 

5 market mortgage originations in each 

6 of the underserved market segments so 

7 identified and defined that were facili8 tated by the approved guarantor, ap9 proved multifamily guarantor, or ap10 proved aggregator’s engagement in a 

11 covered guarantee transaction or the 

12 approved aggregator’s engagement in a 

13 covered market-based risk-sharing 

14 transaction. 

15 (III) RELATIVE EXTENT TO

16 WHICH INDIVIDUAL MARKET SEGMENTS

17 ARE UNDERSERVED.—The relative ex18 tent to which each of the underserved 

19 market segments, as identified and de20 fined under section 210, that have pri21 mary market mortgage originations fa22 cilitated by the approved guarantor, 

23 approved multifamily guarantor, or 

24 approved aggregator’s engagement in a 

25 covered guarantee transaction or the 


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1 approved aggregator’s engagement in a 

2 covered market-based risk-sharing 

3 transaction is underserved. 

4 (ii) WEIGHING FACTORS.—The formula 

5 determined under this subsection shall as6 sign such weights to each of the factors set 

7 forth under clause (i) as the Corporation de8 termines necessary and appropriate. 

9 (iii) DATA FOR MEASURING FAC10 TORS.—To measure the performance in 

11 serving underserved market segments, as 

12 identified and defined under section 210, by 

13 approved guarantors, approved multifamily 

14 guarantors, or approved aggregators en15 gaged in a covered guarantee transaction 

16 and approved aggregators engaged in a cov17 ered market-based risk-sharing transaction 

18 and the extent to which a market segment 

19 is underserved, the formula determined 

20 under this subsection shall provide for the 

21 use of— 

22 (I) the identifications and defini23 tions of underserved market segments 

24 established by the Corporation under 

25 section 210; 


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1 (II) data and other information 

2 in the annual report filed with the 

3 Corporation by each approved guar4 antor, approved multifamily guar5 antor, or approved aggregator engaged 

6 in a covered guarantee transaction and 

7 each approved aggregator engaged in a 

8 covered market-based risk-sharing 

9 transaction, as required under section 

10 210; 

11 (III) loan level data, to the extent 

12 possible in the manner required by the 

13 Home Mortgage Disclosure Act (12 

14 U.S.C. 2801 et seq.) on activities re15 lated to covered securities; and 

16 (IV) other publicly available data. 

17 (D) THIRD-PARTY ENTITY TO MEASURE

18 FACTORS.— 

19 (i) SELECTION.—The Corporation, 

20 through a competitive process, shall select 

21 an entity independent of the Corporation to 

22 gather, use, and provide to the Corporation 

23 the data required under subparagraph 

24 (C)(iii). 


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1 (ii) RANKING.—The entity selected 

2 under clause (i) shall— 

3 (I) analyze the data required 

4 under subparagraph (C)(iii); and 

5 (II) rank the approved guaran6 tors, approved multifamily guarantors, 

7 or approved aggregators engaged in 

8 covered guarantee transactions and the 

9 approved aggregators engaged in cov10 ered market-based risk-sharing trans11 actions, applying the formula estab12 lished by the Corporation. 

13 (iii) TIMING OF RANKING.—The entity 

14 selected under clause (i) shall, on an annual 

15 basis, provide the rankings required under 

16 clause (ii)(II). The annual rankings re17 quired under this clause shall begin at a 

18 time to be determined mutually by the enti19 ty selected under clause (i) and the Cor20 poration, so that the Corporation will be 

21 positioned to determine, charge, and collect 

22 the first incentive-based fees beginning on 

23 the date that is 12 months after the date of 

24 approval of at least 2 approved guarantors, 


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1 approved multifamily guarantors, or ap2 proved aggregators. 

3 (E) TIMING OF CHARGING AND COLLECTING

4 INCENTIVE-BASED FEES.— 

5 (i) FIRST INCENTIVE-BASED FEES.— 

6 Subject to paragraph (3), the Corporation 

7 shall charge and collect the first incentive8 based fees required under this subsection be9 ginning on the date that is 12 months after 

10 the date of the approval of at least 2 ap11 proved guarantors, approved multifamily 

12 guarantors, or approved aggregators. 

13 (ii) SUBSEQUENT ANNUAL INCENTIVE14 BASED FEES.—Subject to paragraph (3), 

15 the Corporation shall charge and collect in16 centive-based fees annually on the first busi17 ness day of each 12-month period that be18 gins after the expiration of the initial 12- 

19 month period set forth in clause (i). 

20 (iii) COLLECTION.— 

21 (I) PROCEDURES.—The Corpora22 tion shall, by regulation, establish pro23 cedures for collecting the incentive24 based fee required under this paraVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00513 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 graph on a periodic basis determined 

2 by the Corporation. 

3 (II) COMPLIANCE WITH PROCE4 DURES.—The Corporation shall collect 

5 all incentive-based fees required under 

6 this paragraph consistent with the pro7 cedures established pursuant to sub8 clause (I). 

9 (iv) ADJUSTMENTS TO INCENTIVE10 BASED FEES PAID.— 

11 (I) IN GENERAL.—The Corpora12 tion shall make appropriate adjust13 ments to the incentive-based fee 

14 charged to an approved guarantor, ap15 proved multifamily guarantor, or ap16 proved aggregator engaged in a covered 

17 guarantee transaction or an approved 

18 aggregator engaged in a covered mar19 ket-based risk-sharing transaction for 

20 any year based on the— 

21 (aa) application of the for22 mula established under this para23 graph to such approved guar24 antor, approved multifamily 


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1 guarantor, or approved 

2 aggregator; and 

3 (bb) measured performance of 

4 such approved guarantor, ap5 proved multifamily guarantor, or 

6 approved aggregator in that year. 

7 (II) FORM OF ADJUSTMENTS.— 

8 Any adjustments made pursuant to 

9 subclause (I) may take the form of— 

10 (aa) a credit against the fee 

11 paid by an approved guarantor, 

12 approved multifamily guarantor, 

13 or approved aggregator for the 

14 year; or 

15 (bb) an additional amount 

16 owing on the fee for the year by 

17 the approved guarantor, approved 

18 multifamily guarantor, or ap19 proved aggregator. 

20 (v) FREQUENCY OF INCENTIVE-BASED

21 FEE COLLECTION.—In determining the ap22 propriate periodic basis for collecting the 

23 incentive-based fees required under clause 

24 (iii), the Corporation shall take into consid25 eration the need to make appropriate adVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00515 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 justments to the fees under clause (iv) 

2 through credits or additional billings. 

3 (vi) RULE OF CONSTRUCTION.—Noth4 ing in this subparagraph shall be construed 

5 to waive, override, or in any manner super6 sede the requirement set forth under sub7 paragraph (A). 

8 (F) ADDITIONAL INCENTIVES TO SERVE UN9 DERSERVED MARKET SEGMENTS.— 

10 (i) FEE CREDITS FROM THE MARKET

11 ACCESS FUND.—Notwithstanding any pro12 vision of section 504 or any other provision 

13 of law, the Corporation may use up to 50 

14 percent of the amounts in the Market Access 

15 Fund, determined as of the date that an in16 centive-based fee under subparagraph (E) is 

17 to be charged in any year, to provide 1 or 

18 more approved guarantors, approved multi19 family guarantors, or approved aggregators 

20 engaged in a covered guarantee transaction 

21 or approved aggregators engaged in a cov22 ered market-based risk-sharing transaction 

23 with additional incentives to serve under24 served market segments, as identified and 

25 defined under section 210, through the 


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1 award of a credit that may be applied to re2 duce the annual fee charged to the approved 

3 guarantor, approved multifamily guar4 antor, or approved aggregator if that person 

5 exceeds performance measures related to the 

6 service of such underserved market segments 

7 established by the Corporation. 

8 (ii) RULE REQUIRED.—The Corpora9 tion shall establish, by regulation, the terms, 

10 conditions, and performance measures for 

11 the awarding of credits under clause (i). 

12 (3) OPT-OUT FROM INCENTIVE-BASED FEES.— 

13 (A) ELECTION AND WRITTEN AGREE14 MENT.—An approved guarantor, approved mul15 tifamily guarantor, or approved aggregator en16 gaged in a covered guarantee transaction or an 

17 approved aggregator engaged in a covered mar18 ket-based risk-sharing transaction may elect to 

19 be excepted from the incentive-based fee that is 

20 charged under paragraph (2) by notifying the 

21 Corporation in writing that the approved guar22 antor, approved multifamily guarantor, or ap23 proved aggregator agrees to pay the fee amount 

24 described in subparagraph (C). 


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1 (B) TIMING FOR ELECTION.—For any 12- 

2 month period for which an incentive-based fee 

3 will be charged under paragraph (2), an ap4 proved guarantor, approved multifamily guar5 antor, or approved aggregator engaged in a cov6 ered guarantee transaction or an approved 

7 aggregator engaged in a covered market-based 

8 risk-sharing transaction may make an election 

9 under subparagraph (A) not later than 3 months 

10 prior to the beginning of such 12-month period. 

11 (C) FEE AMOUNT FOR OPT-OUT.—If an ap12 proved guarantor, approved multifamily guar13 antor, or approved aggregator engaged in a cov14 ered guarantee transaction or an approved 

15 aggregator engaged in a covered market-based 

16 risk-sharing transaction makes an election under 

17 subparagraph (A), the Corporation shall charge 

18 to, and collect from, the approved guarantor, ap19 proved multifamily guarantor, or approved 

20 aggregator a fee in an amount equal to the high21 est fee charged by Corporation for the 12-month 

22 period under the ranking made under paragraph 

23 (2)(D). 

24 (D) OPT-OUT NOT TO AFFECT REPORTING

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1 paragraph (A) shall not release, diminish, or 

2 otherwise affect any requirement set forth by this 

3 Act that requires an approved guarantor, ap4 proved multifamily guarantor, or approved 

5 aggregator engaged in a covered guarantee trans6 action or an approved aggregator engaged in a 

7 covered market-based risk-sharing transaction to 

8 furnish to the Corporation such information as 

9 the Corporation is authorized by this Act to ob10 tain, including the annual report required to be 

11 filed with the Corporation under section 210. 

12 (c) CONTINUING OBLIGATION.—The fee required to be 

13 charged under subsection (a) shall be collected for the life 

14 of the covered security. 

15 (d) SUSPENSION OF CONTRIBUTIONS.—The Corpora16 tion may temporarily suspend allocations under subsection 

17 (a)(2) upon a finding by the Corporation that such alloca18 tions are contributing, or would contribute, to the financial 

19 instability of the Mortgage Insurance Fund established 

20 under section 303. 

21 (e) RULE OF CONSTRUCTION.—The cost of the fee re22 quired to be charged under subsection (a) shall not be borne 

23 by eligible borrowers. 


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1 SEC. 502. HOUSING TRUST FUND. 

2 Section 1338 of the Safety and Soundness Act (12 

3 U.S.C. 4568) is amended— 

4 (1) in subsection (a)(1)— 

5 (A) in the first sentence, by inserting ‘‘or 

6 pursuant to section 501 of the Housing Finance 

7 Reform and Taxpayer Protection Act of 2014’’ 

8 after ‘‘section 1337’’; and 

9 (B) in the second sentence, by inserting 

10 ‘‘federally-recognized tribes and’’ after ‘‘grants 

11 to’’; 

12 (2) by striking subsection (b) and inserting the 

13 following: 

14 ‘‘(b) [Reserved.]’’; 

15 (3) in subsection (c)— 

16 (A) in paragraph (1), by striking ‘‘Except 

17 as provided in subsection (b), the’’ and inserting 

18 ‘‘The’’; 

19 (B) in paragraph (2)— 

20 (i) by striking ‘‘(as such term is de21 fined in section 4 of the Native American 

22 Housing Assistance and Self-Determination 

23 Act of 1997 (25 U.S.C. 4103))’’; and 

24 (ii) by adding at the end the following: 

25 ‘‘An Indian tribe receiving grant amounts 

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1 ally recognized tribe or a tribally designated 

2 housing entity to receive such grant 

3 amounts. Nothing in this subsection shall 

4 limit or be construed to limit the ability of 

5 an Indian tribe or a tribally designated 

6 housing entity from being a permissible des7 ignated recipient of grant amounts provided 

8 by a State under this section.’’; 

9 (C) in paragraph (3)— 

10 (i) in the heading— 

11 (I) by inserting ‘‘INDIAN TRIBES

12 AND’’ before ‘‘STATES’’; and 

13 (II) by striking ‘‘BY NEEDS-BASED

14 FORMULA’’; 

15 (ii) in subparagraph (A), by striking 

16 ‘‘The Secretary shall’’ and inserting the fol17 lowing: 

18 ‘‘(i) MINIMUM TRIBAL DISTRIBU19 TIONS.— 

20 ‘‘(I) IN GENERAL.—The Secretary, 

21 acting through the Office of Native 

22 American Programs, shall distribute 

23 via competitive grants the amounts de24 termined under subclause (II) and 

25 made available under this subsection to 


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1 federally recognized tribes and tribally 

2 designated housing entities. 

3 ‘‘(II) AMOUNTS.—The total 

4 amount required to be distributed 

5 under this subclause for a fiscal year 

6 shall be the greater of $20,000,000, or 

7 2 percent of the total amount of 

8 amounts allocated for the Housing 

9 Trust Fund under this section. 

10 ‘‘(III) USE OF AMOUNTS.—Com11 petitive grant amounts received by a 

12 federally recognized tribe or a tribally 

13 designated housing entity under this 

14 clause may be used, or committed to 

15 use, only for those activities that are 

16 identified as eligible affordable housing 

17 activities under section 202 of the Na18 tive American Housing Assistance and 

19 Self–Determination Act of 1996 (25 

20 U.S.C. 4132). 

21 ‘‘(IV) EVALUATION OF APPLICA22 TIONS.— 

23 ‘‘(aa) IN GENERAL.—In eval24 uating any application for the re25 ceipt of competitive grant 


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1 amounts authorized under this 

2 clause, the Secretary, acting 

3 through the Office of Native Amer4 ican Programs, shall consider 

5 with respect to the federally recog6 nized tribe applicant or tribally 

7 designated housing entity appli8 cant and to Indian reservations 

9 and other Indian areas associated 

10 with the federally recognized tribe 

11 applicant or served by the tribally 

12 designated housing entity appli13 cant evaluation criteria, includ14 ing the following: 

15 ‘‘(AA) Level of poverty 

16 on the Indian reservation or 

17 in the Indian area. 

18 ‘‘(BB) Level of unem19 ployment on the Indian res20 ervation or in the Indian 

21 area. 

22 ‘‘(CC) Condition of 

23 housing stock on the Indian 

24 reservation or in the Indian 

25 area. 


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1 ‘‘(DD) Level of over2 crowded housing on the In3 dian reservation or in the 

4 Indian area, as measured by 

5 the number of households in 

6 which the number of persons 

7 per room is greater than 1. 

8 ‘‘(EE) Presence and 

9 prevalence of black mold on 

10 the Indian reservation or in 

11 the Indian area. 

12 ‘‘(FF) Demonstrated ex13 perience, capacity, and abil14 ity of the applicant to man15 age the development and con16 struction of affordable hous17 ing, and manage affordable 

18 housing programs, including 

19 rental housing programs, 

20 homeownership programs, 

21 and programs to assist pur22 chasers with down payments, 

23 closing costs, or interest rate 

24 buy-downs. 


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1 ‘‘(GG) Demonstrated 

2 ability of the applicant to 

3 meet the requirements under 

4 the Native American Hous5 ing Assistance and Self-De6 termination Act of 1996 (25 

7 U.S.C. 4101 et seq.), includ8 ing the timely and efficient 

9 expenditure of funds. 

10 ‘‘(HH) Such other cri11 teria as may be specified by 

12 the Secretary in order to 

13 evaluate the overall quality 

14 of the proposed project, the 

15 feasibility of the proposed 

16 project, and whether the pro17 posed project will address the 

18 housing needs on the Indian 

19 reservation or in the Indian 

20 area. 

21 ‘‘(bb) REVIEW OF DATA.—In 

22 evaluating any application for the 

23 receipt of competitive grant 

24 amounts authorized under this 

25 clause, the Secretary, acting 


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1 through the Office of Native Amer2 ican Programs, shall permit a 

3 federally recognized tribe appli4 cant or a tribally designated hous5 ing entity applicant to supple6 ment or replace, in whole or in 

7 part, any data compiled and pro8 duced by the Bureau of the Census 

9 and upon which the Secretary, 

10 acting through the Office of Native 

11 American Program, relies, pro12 vided such tribally-collected data 

13 meets the Department of Housing 

14 and Urban Development’s stand15 ards for accuracy. 

16 ‘‘(V) TREATMENT OF FUNDS.— 

17 Notwithstanding any other provision of 

18 law, competitive grant amounts re19 ceived under this clause shall not be 

20 considered Federal funds for purposes 

21 of matching other Federal sources of 

22 funds. 

23 ‘‘(VI) RULE OF CONSTRUCTION.— 

24 The requirements under clause (ii), 

25 subparagraphs (B) and (C) of this 


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1 paragraph, and paragraphs (4) 

2 through (8) and paragraph (10)(A) of 

3 this subsection shall not apply to any 

4 amounts distributed under this clause 

5 to a federally recognized tribe or a 

6 tribally designated housing entity. 

7 ‘‘(ii) STATE DISTRIBUTIONS.—From 

8 any amounts remaining in the Housing 

9 Trust Fund after the distribution of the 

10 amounts required under clause (i), the Sec11 retary shall’’; 

12 (iii) in subparagraph (B), by striking 

13 ‘‘subparagraph (A)’’ and inserting ‘‘sub14 paragraph (A)(ii)’’; and 

15 (iv) in subparagraph (C), by striking 

16 ‘‘subparagraph (A)’’ and inserting ‘‘sub17 paragraph (A)(ii)’’; 

18 (D) in paragraph (4)— 

19 (i) in subparagraph (B), by striking 

20 ‘‘other than fiscal year 2009’’; and 

21 (ii) by striking subparagraph (C), and 

22 inserting the following: 

23 ‘‘(C) MINIMUM STATE ALLOCATIONS.— 

24 ‘‘(i) IN GENERAL.—Except as provided 

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1 lowing the determination of the formula 

2 amount in paragraph (3), to any of the 50 

3 States of the United States or the District 

4 of Columbia shall be $10,000,000 and the 

5 increase in any such allocation shall be de6 ducted pro rata from the allocations made 

7 above such minimum to all other of the 

8 States (as such term is defined in section 

9 1303). 

10 ‘‘(ii) EXCEPTION.—If the allocation to 

11 the Housing Trust Fund under section 

12 501(a)(2)(A) of the Housing Finance Re13 form and Taxpayer Protection Act of 2014 

14 for a fiscal year is less than $1,000,000,000, 

15 the minimum allocation to any of the 50 

16 States of the United States or the District 

17 of Columbia shall be the greater of 

18 $5,000,000 or 1 percent of the total amount 

19 of amounts allocated for the Housing Trust 

20 Fund under this section and the increase in 

21 any such allocation shall be deducted pro 

22 rata from the allocations made above such 

23 minimum to all other of the States (as such 

24 term is defined in section 1303).’’; 

25 (E) in paragraph (5)(A)— 


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1 (i) in clause (iii), by striking ‘‘and’’ at 

2 the end; 

3 (ii) by redesignating clause (iv) as 

4 clause (v); and 

5 (iii) by inserting after clause (iii) the 

6 following: 

7 ‘‘(iv) set forth a plan for achieving geo8 graphic diversity, including the distribution 

9 of grant amounts to rural areas in propor10 tion to housing needs in those areas; and’’. 

11 (F) in paragraph (7)(A), by striking ‘‘hous12 ing under the programs identified in section 

13 1335(a)(2)(B) of this title’’ and inserting ‘‘hous14 ing subsidized under Federal law or comparable 

15 State or local laws’’; 

16 (G) in paragraph (7)(B)(iv), by striking 

17 ‘‘section 132’’ and inserting ‘‘section 1132’’; 

18 (H) in paragraph (9), by inserting ‘‘(in19 cluding a public housing agency)’’ after ‘‘agen20 cy’’; and 

21 (I) by adding at the end the following: 

22 ‘‘(11) RULE OF CONSTRUCTION.—Nothing in this 

23 subsection shall be construed to limit the ability of a 

24 federally recognized tribe or a tribally designated 


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1 housing entity from receiving grant amounts provided 

2 by a State under this section.’’; 

3 (4) in subsection (f), by adding at the end the 

4 following: 

5 ‘‘(7) TRIBAL TERMS.— 

6 ‘‘(A) IN GENERAL.—The terms ‘federally 

7 recognized tribe’, ‘Indian area’, ‘Indian tribe’, 

8 and ‘tribally designated housing entity’ have the 

9 same meaning as in section 4 of the Native 

10 American Housing Assistance and Self-Deter11 mination Act of 1996 (25 U.S.C. 4103). 

12 ‘‘(B) INDIAN RESERVATION.—The term ‘In13 dian reservation’ means land subject to the juris14 diction of an Indian tribe. 

15 ‘‘(8) RURAL AREA.—The term ‘rural area’ means 

16 any community eligible for assistance under section 

17 520 of the Housing Act of 1949 (42 U.S.C. 1490).’’; 

18 and 

19 (5) in subsection (g)(2)(D)(i), by inserting ‘‘, in20 cluding the distribution of grant amounts to rural 

21 areas in proportion to housing needs in those areas’’ 

22 after ‘‘diversity’’. 

23 SEC. 503. CAPITAL MAGNET FUND. 

24 Section 1339 of the Safety and Soundness Act (12 

25 U.S.C. 4569) is amended— 


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1 (1) in subsection (b)(1), by inserting ‘‘or section 

2 501 of the Housing Finance Reform and Taxpayer 

3 Protection Act of 2014’’ after ‘‘section 1337’’; 

4 (2) in subsection (c)— 

5 (A) in paragraph (1), by striking ‘‘; and’’ 

6 and inserting a semicolon; 

7 (B) in paragraph (2)— 

8 (i) by inserting ‘‘, activities designed 

9 to foster revitalization in areas experiencing 

10 severe economic distress and property dis11 investment, including, but not limited to, 

12 demolition, property rehabilitation, and in13 frastructure configuration,’’ after ‘‘economic 

14 development activities’’; and 

15 (ii) by inserting ‘‘and tribal’’ after 

16 ‘‘rural’’; and 

17 (3) in subsection (h)(2)(A), by inserting ‘‘or trib18 al’’ after ‘‘rural’’. 

19 SEC. 504. MARKET ACCESS FUND. 

20 (a) ESTABLISHMENT.—The Corporation shall establish 

21 a fund, to be known as the ‘‘Market Access Fund’’, which 

22 shall be maintained and administered by the Office of Con23 sumer and Market Access. 

24 (b) DEPOSITS.—The Market Access Fund shall be cred25 ited with— 


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1 (1) the share of the fee charged and collected by 

2 the Corporation under section 501; and 

3 (2) such other amounts as may be appropriated 

4 or transferred to the Market Access Fund. 

5 (c) PURPOSE.—Amounts in the Market Access Fund 

6 shall be eligible for use by grantees to address the homeown7 ership and rental housing needs of underserved or hard-to8 serve populations by— 

9 (1) providing grants and loans for research, de10 velopment, and pilot testing of innovations in con11 sumer education, product design, underwriting, and 

12 servicing; 

13 (2) offering additional credit support for certain 

14 eligible mortgage loans or pools of eligible mortgage 

15 loans, such as by covering a portion of any capital 

16 required to obtain insurance from the Corporation 

17 under this Act, provided that amounts for such addi18 tional credit support do not replace borrower funds 

19 required of an eligible mortgage loan; 

20 (3) providing grants and loans, including 

21 through the use of pilot programs of sufficient scale, 

22 to support the research and development of sustain23 able homeownership and affordable rental programs, 

24 which programs shall include manufactured homes 

25 purchased through real estate and personal property 


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1 loans and manufactured homes used as rental hous2 ing, provided that such grant or loan amounts are 

3 used only for the benefit of families whose income does 

4 not exceed 120 percent of the median income for the 

5 area as determined by the Corporation, with adjust6 ments for family size; 

7 (4) providing limited credit enhancement, and 

8 other forms of credit support, for product and services 

9 that— 

10 (A) will increase the rate of sustainable 

11 homeownership and affordable rental housing, 

12 including manufactured homes purchased 

13 through real estate and personal property loans 

14 and manufactured homes used as rental housing, 

15 by individuals or families whose income does not 

16 exceed 120 percent of the area median income as 

17 determined by the Corporation, with adjustments 

18 for family size; and 

19 (B) might not otherwise be offered or sup20 ported by a pilot program of sufficient scale to 

21 determine the viability of such products and 

22 services in the private market; 

23 (5) providing housing counseling by a HUD-ap24 proved housing counseling agency; 


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1 (6) providing incentives to achieve broader access 

2 to mortgage credit; and 

3 (7) providing grants and loans for activities de4 signed to foster revitalization in areas experiencing 

5 severe economic distress and property disinvestment, 

6 including, but not limited to, demolition, rehabilita7 tion, infrastructure configuration, and reuse of vacant 

8 land. 

9 (d) ANNUAL REPORT.— 

10 (1) IN GENERAL.—The Chairperson shall, on an 

11 annual basis, report to Congress on the performance 

12 and outcome of grants, loans, or credit support pro13 grams funded by the Market Access Fund in accord14 ance with subsection (c), including— 

15 (A) an evaluation of how each grant, loan, 

16 or credit support program— 

17 (i) succeeded in meeting or failed to 

18 meet the need of certain populations, espe19 cially extremely low-, very low-, low-, and 

20 moderate-income and underserved or hard21 to-serve populations; and 

22 (ii) succeeded in maximizing or failed 

23 to maximize the leverage of public invest24 ment made for each such grant, loan, or 

25 credit support program; and 


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1 (B) for each award of funds for a grant, 

2 loan, or credit support program by the Market 

3 Access Fund— 

4 (i) the recipient of the funds; 

5 (ii) the purpose for which the recipient 

6 received the funds; 

7 (iii) the amount of funds provided to 

8 the recipient; and 

9 (iv) the amount of funds, excluding ad10 ministrative costs, that are used to directly 

11 meet the purpose identified under clause 

12 (ii), including meeting the housing needs of 

13 extremely low-, very low-, low-, and mod14 erate-income and underserved or hard-to15 serve populations. 

16 (2) INCLUSION IN ANNUAL REPORT.—The Chair17 person shall include the report required under para18 graph (1) in the annual report required under section 

19 206. 

20 SEC. 505. ADDITIONAL TAXPAYER PROTECTIONS. 

21 (a) NOT TO BE USED FOR POLITICAL ACTIVITIES.— 

22 Consistent with the existing requirements under sections 

23 1338(c)(10)(D) and 1339(h)(5) of the Safety and Soundness 

24 Act (12 U.S.C. 4568(c)(10)(D) and 4569(h)(5)), the Sec25 retary of Housing and Urban Development, the Secretary 


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1 of the Treasury, and the Office of Community and Market 

2 Access, respectively, shall ensure that grant amounts allo3 cated by covered grantees to eligible recipients or allocated 

4 to individuals by such eligible recipients are not used for— 

5 (1) political activities; 

6 (2) political advocacy; 

7 (3) lobbying, whether directly or through other 

8 parties; 

9 (4) influencing the selection, nomination, elec10 tion, or appointment of 1 or more candidates to any 

11 Federal, State or local office; 

12 (5) personal counseling services; 

13 (6) travel expenses; and 

14 (7) preparing or providing advice on tax re15 turns. 

16 (b) PENALTIES.— 

17 (1) CIVIL MONEY PENALTY.—If an eligible recipi18 ent or any other individual in receipt of grant 

19 amounts described by this section violates any provi20 sion of subsection (a), the Secretary of Housing and 

21 Urban Development, the Secretary of the Treasury, or 

22 the Corporation, as the case may be, may impose a 

23 civil penalty on such recipient or individual, as the 

24 case may be, of not more than $1,000,000 for each 

25 violation. 


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1 (2) CRIMINAL PENALTIES.—Whoever, being sub2 ject to the provisions of subsection (a), knowingly par3 ticipates, directly or indirectly, in any manner in 

4 conduct that results in a violation of such provisions 

5 shall, notwithstanding section 3571 of title 18, United 

6 States Code, be fined not more than $1,000,000 for 

7 each violation, imprisoned for not more than 5 years, 

8 or both. 

9 (3) RULE OF CONSTRUCTION.—The penalties im10 posed under paragraphs (1) or (2) shall be in addi11 tion to any other available civil remedy or any other 

12 available criminal penalty and may be imposed 

13 whether or not the Secretary of Housing and Urban 

14 Development, the Secretary of the Treasury, or the 

15 Corporation, as the case may be, imposes other ad16 ministrative sanctions. 

17 (c) DEFINITIONS.—As used in this section— 

18 (1) the term ‘‘covered grantee’’ means— 

19 (A) for purposes of the Housing Trust 

20 Fund, a State or State designated entity; 

21 (B) for purposes of the Capital Magnet 

22 Fund, an eligible grantee as described under sec23 tion 1339(e) of the Safety and Soundness Act (12 

24 U.S.C. 4569(e)); and 


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1 (C) for purpose of the Market Access Fund, 

2 an eligible grantee as described under section 

3 504(c); 

4 (2) the term ‘‘eligible recipient’’ means— 

5 (A) for purposes of the Housing Trust 

6 Fund, a recipient as described under section 

7 1338(c)(9) of the Safety and Soundness Act (12 

8 U.S.C. 4568(c)(9)); 

9 (B) for purposes of the Capital Magnet 

10 Fund, a recipient of assistance from the Capital 

11 Magnet Fund; and 

12 (C) for purposes of the Market Access Fund, 

13 a recipient of assistance from the Market Access 

14 Fund; 

15 (3) the term ‘‘Capital Magnet Fund’’ means the 

16 Capital Magnet Fund established under section 1339 

17 of the Safety and Soundness Act (12 U.S.C. 4569); 

18 and 

19 (4) the term ‘‘Housing Trust Fund’’ means the 

20 Housing Trust Fund established under section 1338 of 

21 the Safety and Soundness Act (12 U.S.C. 4568). 

22 (d) RULE OF CONSTRUCTION.—Nothing in subsection 

23 (a) shall be construed to prevent funds from being used 

24 for— 

25 (1) HUD-approved housing counseling services; 


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1 (2) financial literacy education; or 

2 (3) application fees, permits, or other construc3 tion-related expenses, if funds are authorized for such 

4 construction. 

5 SEC. 506. PROMOTING AFFORDABLE HOUSING INVEST6 MENT. 

7 (a) HOUSING AND COMMUNITY DEVELOPMENT ACT OF

8 1992.—Paragraph (6) of section 542(c) of the Housing and 

9 Community Development Act of 1992 (12 U.S.C. 1715z10 22(c)) is amended to read as follows: 

11 ‘‘(6) GINNIE MAE SECURITIZATION.—The Gov12 ernment National Mortgage Association may, at the 

13 discretion of the Secretary, securitize any multifamily 

14 loan insured under this subsection, provided that— 

15 ‘‘(A) the Federal Housing Administration 

16 provides mortgage insurance based on the un17 paid principal balance of the loan, as shall be 

18 described by regulation; 

19 ‘‘(B) the Federal Housing Administration 

20 shall not require an assignment fee for mortgage 

21 insurance claims related to the securitized mort22 gages; 

23 ‘‘(C) the risk-sharing agreement must pro24 vide for reimbursement to the Secretary by the 

25 risk share partner or partners for either all or 


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1 a portion of the losses incurred on the loans in2 sured, regardless of whether the servicing rights 

3 or other related mortgage interest have been 

4 transferred to a different entity; and 

5 ‘‘(D) any entity that subsequently acquires 

6 the servicing rights or other related mortgage in7 terest of the risk share partner or partners shall 

8 not assume any obligation under the risk-sharing 

9 agreement.’’. 

10 (b) NATIONAL HOUSING ACT.—Clause (ii) of the first 

11 sentence of section 306(g)(1) of the National Housing Act 

12 (12 U.S.C. 1721(g)(1)) is amended— 

13 (1) by striking the semicolon and inserting a 

14 comma; and 

15 (2) by inserting before the period at the end the 

16 following: ‘‘, or which are insured under subsection 

17 (c) of section 542 of the Housing and Community De18 velopment Act of 1992 (12 U.S.C.1715z-22), subject to 

19 the terms of subsection (c)(6) of such section’’. 

20 (c) EFFECTIVE DATE; SUNSET.— 

21 (1) EFFECTIVE DATE.—The amendments made 

22 by this section shall take effect beginning on October 

23 1, 2014. 

24 (2) SUNSET.—The amendments made by this 

25 section shall expire on September 30, 2021. Effective 


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1 October 1, 2021, the provisions of paragraph (6) of 

2 section 542(c) of the Housing and Community Devel3 opment Act of 1992 (12 U.S.C. 1715z-22(c)) and 

4 clause (ii) of the first sentence of section 306(g)(1) of 

5 the National Housing Act (12 U.S.C. 1721(g)(1)), as 

6 in effect on the day before the date of the enactment 

7 of this Act, are hereby revived. 

8 TITLE VI—TRANSITION AND TER9 MINATION OF FANNIE MAE 

10 AND FREDDIE MAC 

11 SEC. 601. MINIMUM HOUSING FINANCE SYSTEM CRITERIA 

12 TO BE MET PRIOR TO SYSTEM CERTIFI13 CATION DATE. 

14 (a) SYSTEM CERTIFICATION DATE.—The system cer15 tification date shall be the date that the Board of Directors, 

16 in its sole discretion, certifies by a majority vote that— 

17 (1) the Corporation is able to undertake, in a 

18 manner found satisfactory to the Board, the duties 

19 specified by this Act, and any amendments made by 

20 this Act; and 

21 (2) all the minimum criteria set forth under sub22 section (b) with respect to the new housing finance 

23 system have been fully satisfied. 

24 (b) MINIMUM HOUSING FINANCE SYSTEM CRITERIA.— 

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1 imum criteria in determining whether to certify that the 

2 new housing finance system is ready: 

3 (1) TAXPAYER PROTECTION.—The Department of 

4 the Treasury advised the Board of Directors that laws 

5 and contracts are in place to provide for compensa6 tion to the Department for its support of the enter7 prises and the housing finance system. 

8 (2) SECURITIZATION PLATFORM AND STANDARD9 IZED SECURITIES.—The Securitization Platform is 

10 developed and able to issue standardized securities for 

11 the single-family covered securities market. 

12 (3) SMALL LENDER MUTUALS.—At least 1 small 

13 lender mutual is fully operational and able to under14 take the duties specified in section 315. 

15 (4) APPROVED ENTITIES.—A sufficient number 

16 of approved entities have been approved pursuant the 

17 provisions of subtitle B of title III— 

18 (A) to assume a reasonable level of first loss 

19 position through approved guarantors or through 

20 approved credit risk-sharing mechanisms estab21 lished under section 302; and 

22 (B) to generate a substantial volume of sec23 ondary mortgage market activity with respect to 

24 eligible single-family mortgage loans 


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1 collateralizing single-family covered securities 

2 insured in accordance with this Act. 

3 (5) MULTIFAMILY MARKET.— 

4 (A) WELL-FUNCTIONING MULTIFAMILY MAR5 KET.—The Corporation has approved multiple 

6 multifamily guarantors pursuant to title VII 

7 who are providing sufficient multifamily financ8 ing in the primary, secondary, and tertiary geo9 graphical markets, including in rural markets 

10 and through a diversity of experienced multi11 family lenders. 

12 (B) REQUIREMENTS OF THE ACT.—Ap13 proved multifamily guarantors are meeting the 

14 requirements of this Act. 

15 (C) COMPETITIVE MARKET.—There is a 

16 competitive multifamily market for approved 

17 multifamily guarantors engaging in multifamily 

18 covered securities. 

19 (D) RULE OF CONSTRUCTION.—Noncompli20 ance with the requirements of this Act by any 

21 individual approved multifamily guarantor shall 

22 not constitute grounds to prevent system certifi23 cation. 

24 (c) RULE OF CONSTRUCTION.—The Corporation shall 

25 take all steps necessary to meet each minimum housing fiVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00543 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 nance system criteria set forth under subsection (b) as expe2 ditiously and efficiently as practicable. The Corporation 

3 may commence providing guarantees on single-family or 

4 multifamily covered securities prior to meeting all the min5 imum housing finance system criteria set forth under sub6 section (b). 

7 (d) NOTIFICATION TO CONGRESS.— 

8 (1) IN GENERAL.—The Chairperson shall 

9 promptly submit to the Committee on Banking, Hous10 ing, and Urban Affairs of the Senate and the Com11 mittee on Financial Services of the House of Rep12 resentatives a written notification that the Board of 

13 Directors has certified that the criteria set forth under 

14 subsection (b) have been met. 

15 (2) TIMING.—The Corporation shall provide the 

16 notification required under paragraph (1) not later 

17 than 5 years after the date of enactment of this Act. 

18 (3) DEADLINE EXTENSIONS.— 

19 (A) FIRST EXTENSION.—If the Board of Di20 rectors is unable to make the certification re21 quired by this section prior to the deadline re22 quired in paragraph (2), the Board of Directors 

23 may, with an affirmative vote of the majority of 

24 the Board, extend the deadline an additional 2 

25 years. 


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1 (B) SECOND EXTENSION.—If, after the expi2 ration of the first extension of 2 years, the Board 

3 of Directors is unable to make the certification 

4 required by this section, the Board of Directors 

may, with an affirmative vote of at least 2 5 ⁄3 of 

6 the Board, extend the deadline an additional 2 

7 years. 

8 (C) ADDITIONAL EXTENSIONS.—If, after the 

9 expiration of the second extension of 2 years, the 

10 Board of Directors is unable to make the certifi11 cation required by this section, the Board of Di12 rectors may, with a unanimous affirmative vote 

13 of the Board and upon the written agreement of 

14 the Chairman of the Board of Governors of the 

15 Federal Reserve System and the Secretary of the 

16 Treasury, and in consultation with the Secretary 

17 of Housing and Urban Development, extend the 

18 deadline an additional year, and annually there19 after utilizing the same process described in this 

20 subparagraph until such time as the Board of 

21 Directors makes the certification required by this 

22 section. 

23 SEC. 602. TRANSITION OF THE HOUSING FINANCE SYSTEM. 

24 (a) TRANSITION PLAN.—The Transition Committee es25 tablished under section 404 shall develop a transition plan 


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1 not later than 12 months after the date of enactment of this 

2 Act to facilitate an orderly transition to the new housing 

3 finance system authorized by this Act. 

4 (b) CONTENTS OF PLAN.—The transition plan re5 quired under subsection (a) shall include— 

6 (1) estimated timeframes by which to achieve the 

7 minimum housing finance system criteria set forth 

8 under section 601(b) within 5 years after the date of 

9 enactment of this Act; 

10 (2) detailed actions that the Corporation will 

11 take to achieve such minimum criteria; 

12 (3) estimated timeframes and detailed actions 

13 that the Corporation, including the Federal Housing 

14 Finance Agency, will take to provide an orderly wind 

15 down of the Federal National Mortgage Association 

16 and the Federal Home Loan Mortgage Corporation; 

17 (4) a detailed inventory of all intellectual prop18 erty owned, held, or licensed by the enterprises, in19 cluding patents, trademarks, software, credit evalua20 tion systems, and data and information on mortgage 

21 performance and plans for utilizing any such intellec22 tual property, technology, infrastructure, or processes 

23 of the enterprises in effecting the transition plan; 


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1 (5) a description of and updates on the ongoing 

2 operations of the Corporation, including the oper3 ations of the Federal Housing Finance Agency; 

4 (6) detailed plans and timeframes for estab5 lishing, as soon as practicable, a multifamily covered 

6 securities market; 

7 (7) detailed plans and timeframes for estab8 lishing, as soon as practicable, a standardized secu9 rity issued through the Securitization Platform for 

10 the single-family covered securities market; and 

11 (8) detailed plans for increasing the level of cred12 it risk-sharing in the secondary mortgage market. 

13 (c) CONSIDERATIONS.— 

14 (1) IN GENERAL.—For purposes of facilitating 

15 an orderly transition to the new housing finance sys16 tem authorized by this Act, the Corporation shall con17 sider in determining how to best fulfill the require18 ments of this title the estimated impact of various 

19 transition options with respect to the following: 

20 (A) Housing prices and affordability. 

21 (B) The effectiveness of consumer protec22 tions in the housing market. 

23 (C) Volume and characteristics of mortgage 

24 loan originations. 


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1 (D) The condition of the rental housing 

2 market. 

3 (E) Small lender participation in the sec4 ondary mortgage market. 

5 (F) Access to credit in rural and under6 served communities. 

7 (G) Competition among market partici8 pants. 

9 (H) The condition of the multifamily hous10 ing market. 

11 (I) Innovation among secondary mortgage 

12 market participants. 

13 (J) Taxpayer repayment. 

14 (K) Private capital in the secondary mort15 gage market. 

16 (2) INCLUSION IN ANNUAL REPORT.—A descrip17 tion and analysis of each consideration required 

18 under paragraph (1) shall be included in the report 

19 required to be submitted to Congress under subsection 

20 (d). 

21 (d) REPORT TO CONGRESS.— 

22 (1) IN GENERAL.—Not later than 12 months 

23 after the date of enactment of this Act and in accord24 ance with section 404(c)(2), the Transition Committee 

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1 section (a) to the Committee on Banking, Housing, 

2 and Urban Affairs of the Senate and the Committee 

3 on Financial Services of the House of Representatives. 

4 (2) UPDATES.—Not later than 1 year after the 

5 date on which the transition plan is submitted under 

6 paragraph (1) and annually thereafter until the sys7 tem certification date, the Chairperson shall— 

8 (A) update the transition plan, subject to 

9 the requirements of subsection (b); and 

10 (B) submit such updated plan to the Com11 mittee on Banking, Housing, and Urban Affairs 

12 of the Senate and the Committee on Financial 

13 Services of the House of Representatives. 

14 SEC. 603. RESOLUTION AUTHORITY; TECHNICAL AMEND15 MENTS. 

16 (a) EFFECTIVE DATE.—The amendments made by this 

17 section shall take effect on the agency transfer date. 

18 (b) FEDERAL HOUSING ENTERPRISES FINANCIAL

19 SAFETY AND SOUNDNESS ACT OF 1992.—Section 1367 of 

20 the Safety and Soundness Act (12 U.S.C. 4617) is amend21 ed— 

22 (1) by striking ‘‘stockholder’’ and ‘‘stockholders’’ 

23 and inserting ‘‘shareholder, member,’’ and ‘‘share24 holders, members,’’, respectively, each place those 

25 terms appear; 


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1 (2) by striking ‘‘wind up’’ and ‘‘winding up’’ 

2 and inserting ‘‘wind down’’ and ‘‘winding down’’, re3 spectively, each place those terms appear; 

4 (3) in subsection (a)— 

5 (A) in paragraph (3)(G), by striking ‘‘, and 

6 there is no reasonable prospect for the regulated 

7 entity to become adequately capitalized (as de8 fined in section 1364(a)(1))’’; 

9 (B) by striking paragraph (3)(J) and in10 serting the following: 

11 ‘‘(J) INSOLVENCY.—The regulated entity is 

12 insolvent or near-insolvent.’’; 

13 (C) by striking paragraph (3)(K); 

14 (D) by redesignating paragraph (3)(L) as 

15 paragraph (3)(K); and 

16 (E) in paragraph (4)(B)— 

17 (i) in the heading, by striking ‘‘CRITI18 CALLY UNDERCAPITALIZED REGULATED EN19 TITY’’ and inserting ‘‘INSOLVENT OR NEAR20 INSOLVENT REGULATED ENTITIES’’; 

21 (ii) in the matter preceding clause (i), 

22 by striking ‘‘critically undercapitalized’’ 

23 and inserting ‘‘insolvent or near-insolvent’’; 

24 and 


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1 (iii) in clause (i), by striking ‘‘criti2 cally undercapitalized’’ and inserting ‘‘in3 solvent or near-insolvent’’; 

4 (4) in subsection (b)— 

5 (A) in paragraph (2)(B)— 

6 (i) in clause (iii), by adding ‘‘and’’ 

7 after ‘‘conservator or receiver;’’; 

8 (ii) by striking clause (iv); and 

9 (iii) by redesignating clause (v) as 

10 clause (iv); 

11 (B) in paragraph (2)(H), by striking ‘‘of 

12 proceeds realized from the performance of con13 tracts or sale of the assets of a regulated entity’’ 

14 and inserting ‘‘that funds are available’’; 

15 (C) in paragraph (2)(I)(i)(I), by striking 

16 ‘‘section 1348’’ and inserting ‘‘part II of this 

17 subtitle’’; 

18 (D) in paragraph (2)(I)(iii), by striking 

19 ‘‘section 1317 or 1379B’’ and inserting ‘‘subtitle 

20 B of this Act’’; 

21 (E) by striking paragraph (3)(A) and in22 serting the following: 

23 ‘‘(A) IN GENERAL.—The Agency— 

24 ‘‘(i) may, as receiver, determine claims 

25 in accordance with the requirements of this 


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1 subsection and any regulations prescribed 

2 under paragraph (4); and 

3 ‘‘(ii) may define the term ‘creditor’ 

4 and may distinguish between creditors, in 

5 order to facilitate the orderly administra6 tion of the regulated entity in conservator7 ship or receivership, in accordance with the 

8 requirements of this section.’’; 

9 (F) in paragraph (3)(B), by striking 

10 ‘‘closed’’; 

11 (G) in paragraph (5)(D)(iii)(II), by insert12 ing ‘‘legally enforceable and perfected’’ before ‘‘se13 curity interest’’; 

14 (H) by striking paragraph (7); 

15 (I) by redesignating paragraphs (8) through 

16 (19) as paragraphs (7) through (18), respec17 tively; and 

18 (J) in paragraph (10)(E), as so redesig19 nated— 

20 (i) in clause (ii), by striking ‘‘; and’’ 

21 and inserting a semicolon; 

22 (ii) in clause (iii), by striking the pe23 riod and inserting a semicolon; and 

24 (iii) by adding at the end the fol25 lowing: 


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1 ‘‘(iv) prohibits discrimination on the 

2 basis of race, sex, or ethnic group in the so3 licitation or consideration of offers; and 

4 ‘‘(v) mitigates the potential for serious 

5 adverse effects to the financial system.’’; and 

6 (5) by striking subsection (c) and inserting the 

7 following: 

8 ‘‘(c) PRIORITY OF EXPENSES AND UNSECURED

9 CLAIMS.— 

10 ‘‘(1) IN GENERAL.—Unsecured claims against a 

11 regulated entity, or the receiver therefor, that are 

12 proven to the satisfaction of the receiver shall have 

13 priority in the following order: 

14 ‘‘(A) Claims of the receiver for administra15 tive expenses. 

16 ‘‘(B) Any amounts owed to the United 

17 States, unless the United States agrees or con18 sents otherwise. 

19 ‘‘(C) Wages, salaries, or commissions, in20 cluding vacation, severance, and sick leave pay 

21 earned by an individual (other than an indi22 vidual described in subparagraph (F)), but only 

23 to the extent of $12,475 for each individual (as 

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1 cy) earned not later than 180 days before the 

2 date of appointment of the Agency as receiver. 

3 ‘‘(D) Contributions owed to employee benefit 

4 plans arising from services rendered not later 

5 than 180 days before the date of appointment of 

6 the Agency as receiver, to the extent of the num7 ber of employees covered by each such plan, mul8 tiplied by $12,475 (as indexed for inflation, by 

9 regulation of the Agency), less the aggregate 

10 amount paid to such employees under subpara11 graph (C), plus the aggregate amount paid by 

12 the receivership on behalf of such employees to 

13 any other employee benefit plan. 

14 ‘‘(E) Any claim arising solely from a cov15 ered guarantee transaction involving the regu16 lated entity. 

17 ‘‘(F) Any other general or senior liability of 

18 the regulated entity (which is not a liability de19 scribed under subparagraph (G), (H), or (I)). 

20 ‘‘(G) Any obligation subordinated to general 

21 creditors (which is not an obligation described 

22 under subparagraph (H) or (I)). 

23 ‘‘(H) Any wages, salaries, or commissions, 

24 including any vacation, severance, and sick leave 


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1 pay earned, owed to senior executives and direc2 tors of the regulated entity. 

3 ‘‘(I) Any obligation to shareholders or mem4 bers arising as a result of their status as share5 holders or members. 

6 ‘‘(2) CLAIMS OF THE UNITED STATES.—Unse7 cured claims of the United States shall, at a min8 imum, have a higher priority than liabilities of the 

9 regulated entity that count as regulatory capital. 

10 ‘‘(3) CREDITORS SIMILARLY SITUATED.—All 

11 creditors that are similarly situated under paragraph 

12 (1) shall be treated in a similar manner, except that 

13 the receiver may take any action (including making 

14 payments) that does not comply with this subsection, 

15 if— 

16 ‘‘(A) the Agency determines that such action 

17 is necessary to— 

18 ‘‘(i) maximize the value of the assets of 

19 the regulated entity; 

20 ‘‘(ii) maximize the present value re21 turn from the sale or other disposition of 

22 the assets of the regulated entity; 

23 ‘‘(iii) initiate and continue operations 

24 essential to implementation of the receiver25 ship or any limited-life regulated entity; 


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1 ‘‘(iv) minimize the amount of any loss 

2 realized upon the sale or other disposition of 

3 the assets of the regulated entity; or 

4 ‘‘(v) preserve the financial stability of 

5 the United States; and 

6 ‘‘(B) all creditors that are similarly situ7 ated under paragraph (1) receive not less than 

8 the amount provided in subsection (f)(2). 

9 ‘‘(4) DEFINITION.—As used in this subsection, 

10 the term ‘administrative expenses of the receiver’ in11 cludes— 

12 ‘‘(A) the actual, necessary costs and ex13 penses incurred by the receiver in preserving the 

14 assets of a failed regulated entity or liquidating 

15 or otherwise resolving the affairs of a failed regu16 lated entity; and 

17 ‘‘(B) any obligations that the receiver deter18 mines are necessary and appropriate to facilitate 

19 the smooth and orderly liquidation or other reso20 lution of the regulated entity.’’; 

21 (6) by redesignating subsections (d) through (j) 

22 as subsections (e) and (k), respectively; 

23 (7) by inserting after section (c) the following: 

24 ‘‘(d) SUBROGATION.— 


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1 ‘‘(1) IN GENERAL.—Notwithstanding any other 

2 provision of Federal law, the law of any State, or the 

3 constitution of any State, the Agency, upon the pay4 ment to any person as provided in subsection (c) in 

5 connection with any covered guarantee transaction 

6 (as that term is defined in section 2 of the Housing 

7 Finance Reform and Taxpayer Protection Act of 

8 2014), shall be subrogated to all rights of the person 

9 against such regulated entity to the extent of such 

10 payment or assumption. 

11 ‘‘(2) DIVIDENDS ON SUBROGATED AMOUNTS.— 

12 The subrogation of the Agency under paragraph (1) 

13 with respect to any regulated entity shall include the 

14 right on the part of the Agency to receive the same 

15 dividends, fees, or other amounts from the proceeds of 

16 the assets of such regulated entity and recoveries on 

17 account of stockholders’ liability as would have been 

18 payable to the person on a claim related to the cov19 ered guarantee transaction. 

20 ‘‘(3) WAIVER OF CERTAIN CLAIMS.—The Agency 

21 shall waive, in favor only of any person against 

22 whom stockholders’ individual liability may be as23 serted, any claim on account of such liability in ex24 cess of the liability, if any, to the regulated entity or 

25 its creditors, for the amount unpaid upon such stock 


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1 in such regulated entity, but any such waiver shall be 

2 effected in such manner and on such terms and condi3 tions as will not increase recoveries or dividends on 

4 account of claims to which the Agency is not sub5 rogated.’’; 

6 (8) in subsection (e), as so redesignated— 

7 (A) in paragraph (8), by adding at the end 

8 the following: 

9 ‘‘(H) RECORDKEEPING.—The Agency may 

10 prescribe regulations requiring that regulated en11 tities maintain such records with respect to 

12 qualified financial contracts (including market 

13 valuations) that the Agency determines to be nec14 essary or appropriate in order to assist the 

15 Agency as receiver for a regulated entity in being 

16 able to exercise its rights and fulfill its obliga17 tions under this paragraph or paragraph (9) or 

18 (10).’’; 

19 (B) by striking paragraph (9) and inserting 

20 the following: 

21 ‘‘(9) TRANSFER OF QUALIFIED FINANCIAL CON22 TRACTS.— 

23 ‘‘(A) IN GENERAL.—In making any transfer 

24 of assets or liabilities of a regulated entity in de25 fault which includes any qualified financial conVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00558 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 tract, the conservator or receiver for such regu2 lated entity shall either— 

3 ‘‘(i) transfer to 1 person, other than a 

4 person for which a conservator, receiver, 

5 trustee in bankruptcy, or other legal custo6 dian has been appointed or which is other7 wise the subject of a bankruptcy or insol8 vency proceeding— 

9 ‘‘(I) all qualified financial con10 tracts between any person (or any af11 filiate of such person) and the regu12 lated entity in default; 

13 ‘‘(II) all claims of such person (or 

14 any affiliate of such person) against 

15 such regulated entity under any such 

16 contract (other than any claim which, 

17 under the terms of any such contract, 

18 is subordinated to the claims of general 

19 unsecured creditors of such regulated 

20 entity); 

21 ‘‘(III) all claims of such regulated 

22 entity against such person (or any af23 filiate of such person) under any such 

24 contract; and 


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1 ‘‘(IV) all property securing, or 

2 any other credit enhancement for any 

3 contract described in subclause (I), or 

4 any claim described in subclause (II) 

5 or (III) under any such contract; or 

6 ‘‘(ii) transfer none of the financial con7 tracts, claims, or property referred to under 

8 clause (i) (with respect to such person and 

9 any affiliate of such person). 

10 ‘‘(B) TRANSFER TO FOREIGN BANK, FINAN11 CIAL INSTITUTION, OR BRANCH OR AGENCY

12 THEREOF.—In transferring any qualified finan13 cial contracts and related claims and property 

14 under subparagraph (A)(i), the Agency as re15 ceiver for a regulated entity shall not make such 

16 transfer to a foreign person unless, under the law 

17 applicable to such foreign person, to the qualified 

18 financial contracts, and to any netting contract, 

19 any security agreement or arrangement or other 

20 credit enhancement related to 1 or more qualified 

21 financial contracts, the contractual rights of the 

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1 able substantially to the same extent as per2 mitted under this section.’’; and 

3 (C) in paragraph (13)(C)(ii)— 

4 (i) by redesignating subclause (III) as 

5 subclause (IV); 

6 (ii) by striking ‘‘and’’ at the end of 

7 subclause (II); and 

8 (iii) by inserting after subclause (II) 

9 the following: 

10 ‘‘(III) apply to the rights of par11 ties to netting contracts pursuant to 

12 subtitle A of title IV of the Federal De13 posit Insurance Corporation Improve14 ment Act of 1991 (12 U.S.C. 4401 et 

15 seq.); or’’; 

16 (9) in subsection (g), as so redesignated— 

17 (A) by striking ‘‘section or at the request of 

18 the Director’’ and inserting ‘‘title’’; and 

19 (B) by striking ‘‘a conservator or a re20 ceiver’’ and inserting ‘‘the conservator or receiver 

21 hereunder, and any remedy against the Agency 

22 as conservator or receiver shall be limited to 

23 money damages determined in accordance with 

24 this title’’; 

25 (10) in subsection (j), as so redesignated— 


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1 (A) in paragraph (1)(A)(ii), by striking 

2 ‘‘shall’’ and inserting ‘‘may’’; 

3 (B) in paragraph (2)— 

4 (i) in the heading, by striking ‘‘CHAR5 TER AND ESTABLISHMENT’’ and inserting 

6 ‘‘ESTABLISHMENT OF LIMITED-LIFE REGU7 LATED ENTITIES’’; and 

8 (ii) by striking subparagraph (A) and 

9 inserting the following: 

10 ‘‘(A) TRANSFER OF REGISTERED STATUS.— 

11 If the Agency is appointed as receiver for an en12 terprise, the limited-life regulated entity estab13 lished under this subsection with respect to such 

14 enterprise shall, by operation of law and imme15 diately upon its organization, succeed to the reg16 istered status of the enterprise and thereafter op17 erate in accordance with, and subject to, this Act 

18 and any other provision of law to which an en19 terprise is subject, except as otherwise provided 

20 in this subsection.’’; 

21 (C) in paragraph (3)— 

22 (i) in the heading, by inserting ‘‘AND

23 OPERATING FUNDS’’ after ‘‘CAPITAL STOCK’’; 


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1 (ii) by redesignating subparagraphs 

2 (A) and (B) as subparagraphs (B) and (C), 

3 respectively; 

4 (iii) by inserting prior to subpara5 graph (B), as so redesignated, the following: 

6 ‘‘(A) CAPITAL NOT REQUIRED.—Notwith7 standing any other provision of Federal or State 

8 law, a limited-life regulated entity may, if per9 mitted by the Agency, operate without any cap10 ital or surplus as the Agency may in its discre11 tion determine to be appropriate.’’; 

12 (iv) in subparagraph (B), as so redes13 ignated, by striking ‘‘NO AGENCY REQUIRE14 MENT’’ and inserting ‘‘NO CONTRIBUTION

15 BY THE AGENCY REQUIRED’’; and 

16 (v) by adding at the end the following: 

17 ‘‘(D) OPERATING FUNDS.—Upon the orga18 nization of a limited-life regulated entity, and 

19 thereafter, as the Agency may, in its discretion, 

20 determine to be necessary or advisable, the Agen21 cy may make available to the limited-life regu22 lated entity, upon such terms and conditions and 

23 in such form and amounts as the Agency may in 

24 its discretion determine, funds for the operation 


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1 of the limited-life regulated entity in lieu of cap2 ital.’’; 

3 (D) in paragraph (6)— 

4 (i) in the heading, by striking ‘‘WIND5 ING UP’’ and inserting ‘‘WINDING DOWN’’; 

6 (ii) by striking subparagraph (A) and 

7 inserting the following: 

8 ‘‘(A) IN GENERAL.—Subject to subpara9 graph (B), the Agency shall wind down the af10 fairs of a limited-life regulated entity established 

11 under this subsection— 

12 ‘‘(i) with respect to a Federal Home 

13 Loan Bank, not later than 2 years after the 

14 date of its organization; and 

15 ‘‘(ii) with respect to an enterprise, 

16 within such period of time as the Agency 

17 determines to be necessary and appro18 priate.’’; and 

19 (iii) in subparagraph (B), by inserting 

20 ‘‘established under this subsection with re21 spect to a Federal Home Loan Bank’’ after 

22 ‘‘limited-life regulated entity’’; 

23 (E) in paragraph (7)(A)(iv)— 

24 (i) in the matter preceding subclause 

25 (I), by inserting ‘‘the Agency determines 


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1 that such actions are necessary to’’ after 

2 ‘‘that do not comply with this clause, if’’; 

3 and 

4 (ii) by striking subclauses (I) and (II) 

5 and inserting the following: 

6 ‘‘(I) maximize the value of the as7 sets of the regulated entity; 

8 ‘‘(II) maximize the present value 

9 return from the sale or other disposi10 tion of the assets of the regulated enti11 ty; 

12 ‘‘(III) initiate and continue oper13 ations essential to the implementation 

14 of the limited-life regulated entity; 

15 ‘‘(IV) minimize the amount of 

16 any loss realized upon the sale or other 

17 disposition of the assets of the regu18 lated entity; 

19 ‘‘(V) preserve the financial sta20 bility of the United States; and 

21 ‘‘(VI) ensure that all creditors 

22 that are similarly situated under sub23 section (c)(1) receive not less than the 

24 amount provided in subsection (f)(2).’’; 

25 and 


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1 (F) in paragraph (11)(C)— 

2 (i) in clause (i), in the matter pre3 ceding subclause (I), by striking ‘‘(other 

4 than mortgages that collateralize the mort5 gage-backed securities issued or guaranteed 

6 by an enterprise)’’; and 

7 (ii) by inserting at the end the fol8 lowing: 

9 ‘‘(ii) HEARING.—The hearing required 

10 pursuant to this subparagraph shall be be11 fore a court of the United States, which 

12 shall have jurisdiction to conduct such hear13 ing and to authorize the limited-life regu14 lated entity to obtain secured credit under 

15 clause (i).’’; and 

16 (11) by striking subsection (k)(relating to charter 

17 revocation), as so designated by Public Law 110–289. 

18 (c) RULE OF CONSTRUCTION.—Nothing in this Act, or 

19 any amendments made by this Act, except as may be explic20 itly provided for in this Act, or any amendment made by 

21 this Act, shall be deemed to alter the powers, authorities, 

22 rights, or duties that are vested in the Federal Housing Fi23 nance Agency or the Director thereof with respect to super24 vision and regulation of the enterprises, until such time as 

25 the Federal Housing Finance Agency and the position of 


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1 the Director are transferred in accordance with title IV of 

2 this Act. 

3 SEC. 604. WIND DOWN. 

4 (a) AUTHORITY OF FHFA DIRECTOR.— 

5 (1) IN GENERAL.—Beginning on the date of en6 actment of this Act and ending on the system certifi7 cation date, the FHFA Director, in consultation with 

8 the Corporation, shall take such action, and may pre9 scribe such regulations and procedures, as may be 

10 necessary to wind down the operations of the enter11 prises in an orderly manner that complies with the 

12 requirements of this Act and any amendments made 

13 by this Act. 

14 (2) LIMITATION.—Notwithstanding any author15 ity granted to the FHFA Director under paragraph 

16 (1)— 

17 (A) the sale, exchange, license, or other dis18 position of any asset for value subject to the 

19 wind down required under this section shall be 

20 prohibited, if the Corporation— 

21 (i) in its discretion determines that 

22 such sale, exchange, license, or disposition 

23 would materially interfere with the ability 

24 of the Corporation to carry out the require25 ments of this Act; and 


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1 (ii) notifies, in writing, the FHFA Di2 rector within 14 days of such determina3 tion; and 

4 (B) the Corporation may direct the conser5 vator of the enterprises to sell, exchange, license, 

6 or otherwise dispose of any asset for value subject 

7 to the wind down required under this section, if 

8 the Board of Directors certifies by a majority 

9 vote that— 

10 (i) not completing such sale, transfer, 

11 exchange, license, or other disposition for 

12 value would be inconsistent with the transi13 tion plan approved pursuant to section 602; 

14 and 

15 (ii) such sale, transfer, exchange, li16 cense, or disposition for value would not 

17 violate the duties of the conservator. 

18 (b) AUTHORITY OF CORPORATION.—Beginning on the 

19 system certification date, the Corporation shall take such 

20 action, and may prescribe such regulations and procedures, 

21 as may be necessary to wind down the operations of the 

22 enterprises in an orderly manner that complies with the 

23 requirements of this Act and any amendments made by this 

24 Act. 

25 (c) RESOLUTION PLAN.— 


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1 (1) IN GENERAL.—Each enterprise shall develop 

2 a resolution plan in order to facilitate an orderly 

3 transition to the new housing finance system author4 ized by this Act. 

5 (2) TIMING.—Each resolution plan required to 

6 be developed under paragraph (1) shall be submitted 

7 to the FHFA Director not later than 90 days after the 

8 agency transfer date. 

9 (3) CONTENTS OF PLANS.—Each resolution plan 

10 required to be developed under paragraph (1) shall 

11 include a full description and valuation of the assets, 

12 liabilities, and contractual obligations of the enter13 prise, and any other information that the FHFA Di14 rector may require. 

15 (4) RETENTION OF AUTHORITY.—Notwith16 standing any provision of a resolution plan required 

17 to be developed under paragraph (1), the Federal 

18 Housing Finance Agency and the Corporation shall 

19 retain and exercise full discretion to the extent that 

20 either the Agency or the Corporation utilizes or relies 

21 on such a resolution plan, either in whole or in part, 

22 in fulfilling any duty or responsibility required by 

23 this Act. 

24 (5) PUBLIC SUMMARY.—After reviewing each res25 olution plan required to be developed under paraVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00569 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 graph (1), the Corporation shall make available to the 

2 public a summary of each such resolution plan. 

3 (6) VALUATION STUDY.—After reviewing each 

4 resolution plan required to be developed under para5 graph (1), the Corporation shall conduct a valuation 

6 study of each enterprise’s business segments, including 

7 any technology, business unit, legacy book, and other 

8 assets and liabilities that may be sold for value in a 

9 manner consistent with the purposes and require10 ments of this Act. 

11 (d) PROHIBITION ON NEW BUSINESS.— 

12 (1) FEDERAL NATIONAL MORTGAGE ASSOCIA13 TION.— 

14 (A) NEW BUSINESS PROHIBITED.—Effective 

15 on the system certification date, the Federal Na16 tional Mortgage Association shall have no au17 thority to conduct new business under the Fed18 eral National Mortgage Association Charter Act. 

19 (B) NEW BUSINESS DEFINED.—For pur20 poses of subparagraph (A), the term ‘‘new busi21 ness’’ means any new— 

22 (i) purchase of, servicing of, or dealing 

23 in any insured or conventional mortgages 

24 by the Federal National Mortgage Associa25 tion under section 302(b) of the Federal NaVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00570 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 tional Mortgage Association Charter Act (12 

2 U.S.C. 1717(b)); 

3 (ii) purchase of a mortgage by the Fed4 eral National Mortgage Association in its 

5 secondary mortgage market operations 

6 under section 304(a) of the Federal Na7 tional Mortgage Association Charter Act (12 

8 U.S.C. 1719(a)); 

9 (iii) issue of an obligation of the Fed10 eral National Mortgage Association under 

11 section 304(b) of the Federal National Mort12 gage Association Charter Act (12 U.S.C. 

13 1719(b)), including— 

14 (I) bonds, notes, debentures, and 

15 other similar instruments; 

16 (II) capital lease obligations; 

17 (III) obligations in respect of let18 ters of credit, bankers acceptances, or 

19 other similar instruments; 

20 (IV) guarantees of new securities 

21 based on mortgages set aside; and 

22 (V) swap, security-based swap, de23 rivative product, or other similar in24 strument; 


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1 (iv) setting aside of any mortgages held 

2 by the Federal National Mortgage Associa3 tion and any new issue and sale of securi4 ties based on the mortgages so set aside 

5 under section 304(d) of the Federal Na6 tional Mortgage Association Charter Act (12 

7 U.S.C. 1719(d)); and 

8 (v) issue of a subordinated obligation 

9 of the Federal National Mortgage Associa10 tion under section 304(e) of the Federal Na11 tional Mortgage Association Charter Act (12 

12 U.S.C. 1719(e)). 

13 (C) EXCLUSION FROM NEW BUSINESS.—The 

14 term ‘‘new business’’ shall not include any 

15 new— 

16 (i) purchase by the Federal National 

17 Mortgage Association of a non-performing 

18 mortgage from a pool of mortgages pre19 viously set aside by the enterprise; 

20 (ii) issue of an obligation of the Fed21 eral National Mortgage Association if, after 

22 giving effect to the issuance, the aggregate 

23 amount of such obligations does not exceed 

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1 sets permitted to be owned by the enterprise 

2 under section 605; 

3 (iii) setting aside of mortgages pre4 viously set aside by the Federal National 

5 Mortgage Association, or any new issue and 

6 sale of securities based on the mortgages so 

7 previously set aside, to refund or replace an 

8 outstanding issue of securities based on 

9 mortgages previously set aside, if the face 

10 amount of the refunding or replacing mort11 gage-backed securities does not exceed the 

12 face amount of the mortgage-backed securi13 ties being refunded or replaced; 

14 (iv) transfer of guarantees of mortgage15 backed securities guaranteed by the Federal 

16 National Mortgage Association if the mort17 gage loans collateralizing such securities are 

18 refinanced, regardless of the value of the un19 derlying collateral and the homeowner’s 

20 current employment status and income; or 

21 (v) entry into any swap, security-based 

22 swap, or other similar instrument, or pur23 chase of sale of any derivative product, or 

24 other similar instrument, to facilitate the 

25 orderly wind down of the Federal National 


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1 Mortgage Association and appropriate loss 

2 mitigation on any outstanding guarantees 

3 of the Federal National Mortgage Associa4 tion under section 605. 

5 (D) NEW BUSINESS PROHIBITION NOT TO

6 AFFECT OUTSTANDING ENTERPRISE DEBT OR

7 GUARANTEES.—Nothing in subparagraph (A) 

8 shall adversely affect the rights and obligations 

9 of any holders of— 

10 (i) outstanding debt obligations of the 

11 Federal National Mortgage Association, in12 cluding any— 

13 (I) bonds, notes, debentures, or 

14 other similar instruments; 

15 (II) capital lease obligations; 

16 (III) obligations in respect of let17 ters of credit, bankers’ acceptances, or 

18 other similar instruments; or 

19 (IV) swap, security-based swap, 

20 derivative product, or other similar in21 strument; or 

22 (ii) mortgage-backed securities guaran23 teed by the Federal National Mortgage Asso24 ciation. 


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1 (2) FEDERAL HOME LOAN MORTGAGE CORPORA2 TION.— 

3 (A) NEW BUSINESS PROHIBITED.—Effective 

4 on the system certification date, the Federal 

5 Home Loan Mortgage Corporation shall have no 

6 authority to conduct new business under the Fed7 eral Home Loan Mortgage Corporation Act. 

8 (B) NEW BUSINESS DEFINED.—For pur9 poses of subparagraph (A), the term ‘‘new busi10 ness’’ means any new— 

11 (i) purchase of, servicing of, or dealing 

12 in any insured or conventional mortgages 

13 by the Federal Home Loan Mortgage Cor14 poration under section 305(a) of the Federal 

15 Home Loan Mortgage Corporation Act (12 

16 U.S.C. 1454(a)); 

17 (ii) issue of an obligation of the Fed18 eral Home Loan Mortgage Corporation 

19 under section 306(a) of the Federal Home 

20 Loan Mortgage Corporation Act (12 U.S.C. 

21 1455(a)), including— 

22 (I) bonds, notes, debentures, and 

23 other similar instruments; 

24 (II) capital lease obligations; 


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1 (III) obligations in respect of let2 ters of credit, bankers acceptances, or 

3 other similar instruments; 

4 (IV) guarantees of new securities 

5 based on mortgages set aside; and 

6 (V) swap, security-based swap, de7 rivative product, or other similar in8 strument; 

9 (iii) issue of mortgage-backed securities 

10 under the Federal Home Loan Mortgage 

11 Corporation Act; and 

12 (iv) issue of a subordinated obligation 

13 of the Federal Home Loan Mortgage Cor14 poration under the Federal Home Loan 

15 Mortgage Corporation Act. 

16 (C) EXCLUSION FROM NEW BUSINESS.—The 

17 term ‘‘new business’’ shall not include any 

18 new— 

19 (i) purchase by the Federal Home 

20 Loan Mortgage Corporation of a non-per21 forming mortgage from a pool of mortgages 

22 previously set aside by the enterprise; 

23 (ii) issue of an obligation of the Fed24 eral Home Loan Mortgage Corporation if, 

25 after giving effect to the issuance, the aggreVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00576 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 gate amount of such obligations does not ex2 ceed 120 percent of the amount of mortgage 

3 assets permitted to be owned by the enter4 prise under section 605; 

5 (iii) issue of mortgage-backed securi6 ties, to refund or replace an outstanding 

7 issue of mortgage-backed securities, if the 

8 face amount of the refunding or replacing 

9 mortgage-backed securities does not exceed 

10 the face amount of the mortgage-backed se11 curities being refunded or replaced; 

12 (iv) transfer of guarantees of mortgage13 backed securities guaranteed by the Federal 

14 Home Loan Mortgage Corporation if the 

15 mortgage loans collateralizing such securi16 ties are refinanced, regardless of the value of 

17 the underlying collateral and the home18 owner’s current employment status and in19 come; or 

20 (v) entry into any swap, security-based 

21 swap, or other similar instrument, or pur22 chase of sale of any derivative product, or 

23 other similar instrument, to facilitate the 

24 orderly wind down of the Federal Home 

25 Loan Mortgage Corporation and approVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00577 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 priate loss mitigation on any outstanding 

2 guarantees of the Federal Home Loan Mort3 gage Corporation under section 605. 

4 (D) NEW BUSINESS PROHIBITION NOT TO

5 AFFECT OUTSTANDING ENTERPRISE DEBT OR

6 GUARANTEES.—Nothing in subparagraph (A) 

7 shall adversely affect the rights and obligations 

8 of any holders of— 

9 (i) outstanding debt obligations of the 

10 Federal Home Loan Mortgage Corporation, 

11 including any— 

12 (I) bonds, notes, debentures, or 

13 other similar instruments; 

14 (II) capital lease obligations; 

15 (III) obligations in respect of let16 ters of credit, bankers’ acceptances, or 

17 other similar instruments; or 

18 (IV) swap, security-based swap, 

19 derivative product, or other similar in20 strument; or 

21 (ii) mortgage-backed securities guaran22 teed by the Federal Home Loan Mortgage 

23 Corporation. 

24 (3) RULE OF CONSTRUCTION.—The prohibition 

25 on new business by the Federal National Mortgage 


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1 Association and the Federal Home Loan Mortgage 

2 Corporation set forth in paragraphs (1) and (2) shall 

3 not prohibit, nor be construed to prohibit, the Cor4 poration from managing such entity. 

5 (4) EXISTING GUARANTEE OBLIGATIONS.— 

6 (A) EXPLICIT GUARANTEE.—The full faith 

7 and credit of the United States is pledged to the 

8 payment of all amounts which may be required 

9 to be paid under any obligation described under 

10 paragraphs (1) and (2), including any obliga11 tion issued on or after the system certification 

12 date to refund or replace an obligation that was 

13 outstanding on the day before the system certifi14 cation date. 

15 (B) LOAN ELIGIBILITY.—The enterprises 

16 shall include as eligible loans for the purposes of 

17 refinancing all current loans that qualify as eli18 gible mortgage loans and meet those under19 writing requirements for eligibility for same 

20 servicer refinancing, except that the enterprises 

21 may not disqualify or impose varying rules 

22 based on loan-to-value, combined loan-to-value, 

23 employment status, or income with regard to re24 financing mortgage loans that collateralize mortVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00579 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 gage-backed securities issued by an enterprise 

2 prior to the system certification date. 

3 (C) CONTINUED DIVIDEND PAYMENTS.— 

4 Notwithstanding the provisions of this section or 

5 any other provision of law, provision 2(a) (relat6 ing to Dividend Payment Dates and Dividend 

7 Periods) and provision 2(c) (relating to Divi8 dend Rates and Dividend Amount) of the Senior 

9 Preferred Stock Purchase Agreement, or any pro10 vision of any certificate in connection with such 

11 Agreement creating or designating the terms, 

12 powers, preferences, privileges, limitations, or 

13 any other conditions of the Variable Liquidation 

14 Preference Senior Preferred Stock of an enter15 prise issued pursuant to such Agreement— 

16 (i) shall not be amended, restated, or 

17 otherwise changed to reduce the rate or 

18 amount of dividends in effect pursuant to 

19 such Agreement as of the Third Amendment 

20 to such Agreement dated August 17, 2012, 

21 except that any amendment to such Agree22 ment shall be permitted if it facilitates the 

23 sale of assets of the enterprises to facilitate 

24 compliance with this title; and 


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1 (ii) shall remain in effect until the 

2 guarantee obligations described under para3 graphs (1) and (2) are fully extinguished. 

4 (D) APPLICABILITY.—Notwithstanding the 

5 provisions of this section, all guarantee fee 

6 amounts derived from the mortgage guarantee 

7 business of the enterprises in existence as of the 

8 system certification date, after satisfying the fee 

9 amounts required to be collected by section 1327 

10 of the Safety and Soundness Act (12 U.S.C. 

11 4547), shall be subject to the terms of the Senior 

12 Preferred Stock Purchase Agreement. 

13 (e) CHARTERS REVOKED.—Effective upon the date the 

14 guarantee obligations under subsection (d)(4)(A) are fully 

15 extinguished: 

16 (1) The Federal National Mortgage Association 

17 Charter Act is repealed, except as the provisions of 

18 such Act relate to the establishment, purposes, powers, 

19 authorities, duties, supervision, administration, and 

20 management of the Government National Mortgage 

21 Association. 

22 (2) The Federal Home Loan Mortgage Corpora23 tion Act is repealed. 


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1 (f) AUTHORITY TO INSURE OUTSTANDING MORTGAGE2 BACKED SECURITIES; MORTGAGE-BACKED SECURITIES OF

3 THE ENTERPRISES.— 

4 (1) AUTHORITY TO INSURE MORTGAGE-BACKED

5 SECURITIES; AUTHORITY TO DEVELOP ENTERPRISE

6 MORTGAGE-BACKED SECURITIES.—After the agency 

7 transfer date, and subject to such procedures, stand8 ards, terms, and conditions as may be adopted by the 

9 Corporation under paragraph (2), the Corporation 

10 may— 

11 (A) upon application and in exchange for a 

12 fee determined by the Corporation, provide in13 surance on outstanding mortgage-backed securi14 ties issued by the enterprises; and 

15 (B) facilitate, including through the oper16 ations of the enterprises or the utilization of the 

17 Platform, the— 

18 (i) exchange of mortgage-backed securi19 ties issued by either enterprise for covered 

20 securities; 

21 (ii) exchange of mortgage-backed secu22 rities issued by 1 enterprise for those of the 

23 other enterprise; 


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1 (iii) issuance of mortgage-backed secu2 rities by both enterprises through a single 

3 issuer; and 

4 (iv) issuance of real estate mortgage 

5 investment conduit securities, consisting of 

6 mortgage-backed securities issued by the en7 terprises. 

8 (2) DEVELOPMENT OF PROCEDURES, STANDARDS, 

9 TERMS, AND CONDITIONS.—The Corporation shall de10 velop and adopt procedures, standards, terms, and 

11 conditions to enable the Corporation and each of the 

12 enterprises, as applicable, to implement each of the 

13 activities described in paragraph (1). 

14 (3) REQUIRED PROCEDURES, STANDARDS, 

15 TERMS, AND CONDITIONS.—In the development and 

16 adoption of the procedures, standards, terms, and con17 ditions required under paragraph (2), the Corpora18 tion shall consider the effect of each activity with re19 spect to the following: 

20 (A) Lender access to the secondary mortgage 

21 market. 

22 (B) The liquidity and trading price of ex23 isting enterprise mortgage-backed securities. 


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1 (C) The ability of market participants and 

2 the enterprises to issue new mortgage-backed se3 curities. 

4 (D) The cost to the enterprises or the Cor5 poration to exchange, restructure, or insure 

6 mortgage-backed securities. 

7 (g) REPORT TO CONGRESS.— 

8 (1) IN GENERAL.—Prior to the agency transfer 

9 date, the FHFA Director shall submit a study consid10 ering the feasibility of activities described in sub11 section (f)(1) to— 

12 (A) the Committee on Banking, Housing, 

13 and Urban Affairs of the Senate; 

14 (B) the Committee on Financial Services of 

15 the House of Representatives; and 

16 (C) the Corporation. 

17 (2) UPDATES.—Following the agency transfer 

18 date, the Corporation shall provide updates on the ac19 tivities described in subsection (f)(1) in the transition 

20 plan (and in each annual update thereof) required 

21 under section 602. 

22 (h) DIVISION OF ASSETS AND LIABILITIES; AUTHOR23 ITY TO ESTABLISH HOLDING COMPANIES, TRUSTS, AND

24 SUBSIDIARIES.— 


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1 (1) IN GENERAL.—The action and procedures re2 quired under subsection (a)— 

3 (A) shall include the establishment and exe4 cution of plans to manage assets toward the liq5 uidation of liabilities and provide for an equi6 table division, distribution, and liquidation of 

7 the assets and liabilities of an enterprise, includ8 ing any infrastructure, property, including intel9 lectual property, historic data, platforms, or any 

10 other thing or object of value, provided such plan 

11 complies with the requirements of this Act and 

12 any amendments made by this Act; 

13 (B) may provide for the establishment of— 

14 (i) a holding corporation organized 

15 under the laws of any State of the United 

16 States or the District of Columbia for the 

17 purpose of winding down an enterprise or 

18 both enterprises; 

19 (ii) 1 or more trusts to which to trans20 fer— 

21 (I) outstanding debt obligations of 

22 an enterprise or both enterprises; or 

23 (II) outstanding mortgages held 

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1 gage-backed securities guaranteed by 

2 an enterprise or both enterprises; and 

3 (iii) 1 or more subsidiaries or joint 

4 ventures with private entities for the pur5 poses of facilitating an orderly wind down 

6 of one enterprise or both enterprises and the 

7 transition to the new housing finance sys8 tem; 

9 (C) may include the sale as a going concern 

10 of any holding company, trust, subsidiary, or 

11 joint venture with a private entity established by 

12 an enterprise under this subsection; and 

13 (D) may provide that any holding com14 pany, trust, subsidiary, or joint venture sold as 

15 a going concern may be utilized to facilitate the 

16 formation of— 

17 (i) a small lender mutual under sec18 tion 315; 

19 (ii) an approved guarantor; 

20 (iii) an approved multifamily guar21 antor; 

22 (iv) an approved aggregator; or 

23 (v) the Securitization Platform. 

24 (2) RULE OF CONSTRUCTION.—Any holding com25 pany, trust, subsidiary, or joint venture established 


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1 by an enterprise before or after the agency transfer 

2 date is eligible to be sold by the Federal Housing Fi3 nance Agency as a going concern for the purposes de4 scribed in this section. 

5 (i) RECOUPMENT BY SENIOR PREFERRED SHARE6 HOLDERS.— 

7 (1) MAXIMUM RETURN TO SENIOR PREFERRED

8 SHAREHOLDERS.—The wind down of each enterprise 

9 required under this section shall be managed by the 

10 Corporation to obtain resolutions that maximize the 

11 return for the senior preferred shareholders, to the ex12 tent that such resolutions— 

13 (A) are consistent with the goals of facili14 tating— 

15 (i) a deep, liquid, and resilient sec16 ondary mortgage market for single-family 

17 and multifamily mortgage-backed securities 

18 in order to support access to mortgage cred19 it in the primary mortgage market; and 

20 (ii) an orderly transition from housing 

21 finance markets facilitated by the enter22 prises to housing finance markets facilitated 

23 by the Corporation with minimum disrup24 tion in the availability of mortgage credit; 


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1 (B) are consistent with applicable Federal 

2 and State law; 

3 (C) comply with the requirements of this 

4 Act and the amendments made by this Act; and 

5 (D) protect the taxpayer from having to ab6 sorb losses incurred in the secondary mortgage 

7 market. 

8 (2) SALE OF CERTAIN ASSETS AS A GOING CON9 CERN.— 

10 (A) SALE FOR VALUE.—If the Federal 

11 Housing Finance Agency makes the determina12 tions in subparagraph (B), the Federal Housing 

13 Finance Agency may conduct a sale, exchange, 

14 license, or other disposition for value of any line 

15 of business of an enterprise, or any function, ac16 tivity, asset, intellectual property, or service of 

17 an enterprise, as a going concern. 

18 (B) REQUIRED DETERMINATIONS.—A sale 

19 under subparagraph (A) is permitted if the Fed20 eral Housing Finance Agency determines that 

21 the sale, exchange, license, or other disposition 

22 for value— 

23 (i) is consistent with the goal of an or24 derly transition from housing finance mar25 kets facilitated by the enterprises to housing 


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1 finance markets facilitated by the Corpora2 tion with minimum disruption in the avail3 ability of mortgage credit; 

4 (ii) does not impede or otherwise inter5 fere with the ability of the Federal Housing 

6 Finance Agency or the Corporation to carry 

7 out the functions and requirements of this 

8 Act; 

9 (iii) does not transfer, convey, or au10 thorize any guarantee or Federal support, 

11 assistance, or backing, implicit or explicit, 

12 related to any such business line, function, 

13 activity, or service; 

14 (iv) will maximize the return for the 

15 senior preferred shareholders as required 

16 under paragraph (1); and 

17 (v) would not result in an uncompeti18 tive primary or secondary mortgage market 

19 or otherwise limit competitiveness in the 

20 primary or secondary mortgage markets. 

21 (C) SALE OF HISTORIC DATA.—The Federal 

22 Housing Finance Agency shall conduct a sale for 

23 value of each enterprise’s historic data, including 

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1 ducting such sale, the Federal Housing Finance 

2 Agency may require that— 

3 (i) the purchaser of the historic data is 

4 the Corporation or the Securitization Plat5 form; 

6 (ii) the purchaser of the historic data 

7 makes the historic data available to the 

8 public in a searchable and easily accessible 

9 format as promptly as practicable; and 

10 (iii) the purchaser of the historic data 

11 takes appropriate steps to ensure the pri12 vacy of consumers, minimizes the collection 

13 and storage of personally identifiable finan14 cial information, and considers statutes, 

15 rules, and regulations relating to the pri16 vacy of consumer credit information and 

17 personally identifiable financial informa18 tion. 

19 SEC. 605. PORTFOLIO REDUCTION. 

20 (a) GRADUATED REDUCTION.— 

21 (1) IN GENERAL.—On December 31 of the year 

22 after the date of enactment of this Act, and on Decem23 ber 31 of each year thereafter until each enterprise 

24 reaches the allowable size of the retained single-family 

25 portfolio specified in paragraph (2), each enterprise 


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1 shall not own single-family mortgage loan assets in 

2 excess of 85 percent of the aggregate amount of the 

3 single-family mortgage loan assets that the enterprise 

4 was permitted to own as of December 31 of the imme5 diately preceding calendar year. 

6 (2) RETAINED SINGLE-FAMILY PORTFOLIO TO FA7 CILITATE ORDERLY WIND DOWN.—Not later than the 

8 date on which the system certification date occurs, the 

9 Corporation shall establish an allowable amount of 

10 enterprise-owned single-family mortgage loan assets 

11 in an amount equal to the amount necessary to facili12 tate— 

13 (A) the orderly wind down of the enter14 prises; and 

15 (B) appropriate loss mitigation on any leg16 acy guarantees of the enterprises. 

17 (b) MORTGAGE LOAN ASSETS DEFINED.—For pur18 poses of this section, the term ‘‘mortgage loan assets’’ means, 

19 with respect to an enterprise, assets of such enterprise con20 sisting of mortgage loans, mortgage-related securities, par21 ticipation certificates, mortgage-backed commercial paper, 

22 obligations of real estate mortgage loan investment con23 duits, and similar assets, in each case to the extent that 

24 such assets would appear on the balance sheet of such enter25 prise in accordance with generally accepted accounting 


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1 principles in effect in the United States as of September 

2 7, 2008 (as set forth in the opinions and pronouncements 

3 of the Accounting Principles Board and the American Insti4 tute of Certified Public Accountants and statements and 

5 pronouncements of the Financial Accounting Standards 

6 Board from time to time, and without giving any effect to 

7 any change that may be made after September 7, 2008, in 

8 respect of Statement of Financial Accounting Standards 

9 No. 140 or any similar accounting standard). 

10 SEC. 606. OVERSIGHT OF TRANSITION OF THE HOUSING FI11 NANCE SYSTEM. 

12 (a) TESTIMONY.—Beginning on the agency transfer 

13 date and ending on the system certification date, the Chair14 person shall, on an annual basis, appear before the Com15 mittee on Banking, Housing, and Urban Affairs of the Sen16 ate and the Committee on Financial Services of the House 

17 of Representatives to provide testimony on the progress 

18 made in carrying out the requirements of this title. 

19 (b) INSPECTOR GENERAL REPORT ON TRANSITION.— 

20 Beginning on the agency transfer date and ending on the 

21 system certification date, the Inspector General of the Fed22 eral Mortgage Insurance Corporation shall, on an annual 

23 basis— 

24 (1) submit a report to the Corporation and the 

25 Committee on Banking, Housing, and Urban Affairs 


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1 of the Senate and the Committee on Financial Serv2 ices of the House of Representatives— 

3 (A) on the status of the transition to the 

4 new housing finance system authorized by this 

5 Act; 

6 (B) that includes recommendations to facili7 tate an orderly transition to the new housing fi8 nance system authorized by this Act; and 

9 (C) on the impact of various actions re10 quired by this Act on borrowers and small mort11 gage lenders; and 

12 (2) appear before the Committee on Banking, 

13 Housing, and Urban Affairs of the Senate and the 

14 Committee on Financial Services of the House of Rep15 resentatives to provide testimony on the report re16 quired under paragraph (1). 

17 (c) GAO REPORT ON TRANSITION.— 

18 (1) IN GENERAL.—Not later than 18 months 

19 after the system certification date, the Comptroller 

20 General of the United States shall conduct a study 

21 and submit a report to the Committee on Banking, 

22 Housing, and Urban Affairs of the Senate and the 

23 Committee on Financial Services of the House of Rep24 resentatives reviewing the transition required by this 

25 Act. 


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1 (2) CONTENTS OF STUDY.—In conducting the 

2 study required under paragraph (1), the Comptroller 

3 General shall review— 

4 (A) all property, including intellectual 

5 property, of the enterprises that may have been 

6 sold, transferred, or licensed for value pursuant 

7 to this title or any amendment made by this 

8 title; 

9 (B) the number and market share of each 

10 type of approved entity; and 

11 (C) the amount of any taxpayer repayment. 

12 SEC. 607. AUTHORITY TO ESTABLISH PROVISIONAL STAND13 ARDS. 

14 (a) PROVISIONAL STANDARDS.— 

15 (1) IN GENERAL.—Notwithstanding any stand16 ard required under subtitle B of title III or section 

17 703, the Corporation may establish provisional stand18 ards for the approval of approved entities in order to 

19 ensure the sufficient participation of financially 

20 sound entities in the housing finance system. 

21 (2) PERIOD OF EFFECTIVENESS DURING TRANSI22 TION.—The Corporation is authorized to establish 

23 provisional standards under paragraph (1) prior to 

24 the system certification date and such provisional 

25 standards shall— 


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1 (A) be published in the Federal Register for 

2 notice and comment; and 

3 (B) remain in effect until the Corporation 

4 adopts and publishes final standards for the ap5 proval of approved entities pursuant to subtitle 

6 B of title III or section 703. 

7 (3) PERIOD OF EFFECTIVENESS DURING UN8 USUAL AND EXIGENT CIRCUMSTANCES.—The Corpora9 tion is authorized to establish provisional standards 

10 under paragraph (1) during periods when the author11 ity of the Corporation under section 305 is exercised 

12 and such provisional standards shall— 

13 (A) be published in the Federal Register; 

14 and 

15 (B) remain in effect until the final date of 

16 the timeline established by the Corporation pur17 suant to section 305(h)(1). 

18 (4) RULE OF CONSTRUCTION.—Nothing in para19 graph (2) shall be construed to allow the Corporation 

20 to delay or otherwise not implement subsection (c) in 

21 the required timeframe. 

22 (b) OVERSIGHT OF APPROVED ENTITIES.—During 

23 any period in which a provisional standard is in effect pur24 suant to subsection (a), the Corporation shall maintain all 

25 oversight and enforcement authorities with regard to apVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00595 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 proved entities in accordance with the requirements and au2 thorities of subtitles B and C of title III and section 703. 

3 (c) PHASE-IN OF CAPITAL STANDARDS FOR APPROVED

4 GUARANTORS.— 

5 (1) IN GENERAL.—The requirement under sec6 tion 311(g)(1)(A) shall take effect on the date that is 

7 8 years after the date that the Corporation approves 

8 the first approved guarantor under this section. 

9 (2) PHASE-IN.—Beginning on the date that the 

10 Corporation approves the first approved guarantor 

11 under this section and ending on the date set forth 

12 under paragraph (1), the Corporation shall— 

13 (A) require an approved guarantor to 

14 maintain an appropriate level of capital nec15 essary to help ensure an orderly transition pur16 suant to this title; and 

17 (B) increase annually, in equal increments, 

18 the required amount of capital to be held by the 

19 approved guarantor. 

20 (3) APPLICABILITY.—Each capital level required 

21 to be held by an approved guarantor under this sec22 tion, including each annual increase pursuant to 

23 paragraph (2)(B), shall only be applicable with re24 spect to new business being guaranteed by an apVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00596 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 proved guarantor on and after the date each capital 

2 level becomes effective. 

3 (d) PHASE-IN OF CAPITAL STANDARDS FOR MULTI4 FAMILY APPROVED GUARANTORS.— 

5 (1) IN GENERAL.—The requirement under sec6 tion 703(h)(1)(A) shall take effect on the date that is 

7 8 years after the date that the Corporation approves 

8 the first multifamily approved guarantor under this 

9 section. 

10 (2) PHASE-IN.—Beginning on the date that the 

11 Corporation approves the first approved multifamily 

12 guarantor under this section and ending on the date 

13 set forth under paragraph (1), the Corporation 

14 shall— 

15 (A) require an approved multifamily guar16 antor to maintain an appropriate level of cap17 ital necessary to help ensure an orderly transi18 tion pursuant to this title; and 

19 (B) increase annually, in equal increments, 

20 the required amount of capital to be held by the 

21 approved multifamily guarantor. 

22 (3) APPLICABILITY.—Each capital level required 

23 to be held by an approved multifamily guarantor 

24 under this section, including each annual increase 

25 pursuant to paragraph (2)(B), shall only be applicaVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00597 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 ble with respect to new business being guaranteed by 

2 an approved multifamily guarantor on and after the 

3 date each capital level becomes effective. 

4 SEC. 608. INITIAL FUND LEVEL FOR THE MORTGAGE INSUR5 ANCE FUND. 

6 (a) FUND AMOUNT ON SYSTEM CERTIFICATION

7 DATE.—The Corporation shall endeavor to ensure that the 

8 Mortgage Insurance Fund established under section 303 at9 tains a reserve ratio of 0.75 percent of the sum of the out10 standing principal balance of the covered securities for 

11 which insurance is projected to be provided under this Act 

12 for the 5-year period beginning on the system certification 

13 date. 

14 (b) REPORT TO CONGRESS ON PROJECTION.—The pro15 jection required under subsection (a) shall be— 

16 (1) determined by the Corporation; and 

17 (2) reported to the Committee on Banking, 

18 Housing, and Urban Affairs of the Senate and the 

19 Committee on Financial Services of the House of Rep20 resentatives. 

21 (c) ASSESSMENTS.—Pursuant to the authorities grant22 ed to the Corporation under section 1316(i) of the Safety 

23 and Soundness Act, as added by section 405, the amount 

24 of funds required to be held by the Mortgage Insurance 

25 Fund under subsection (a) shall be acquired through assessVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00598 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 ments on the enterprises. The assessments required under 

2 this subsection shall be in effect for the period beginning 

3 on the date of enactment of this Act and ending on the sys4 tem certification date. The assessments required under this 

5 subsection shall be deposited in the Mortgage Insurance 

6 Fund. 

7 SEC. 609. GAO REPORT ON FULL PRIVATIZATION OF SEC8 ONDARY MORTGAGE MARKET. 

9 (a) GAO REPORT.—Not later than 8 years after the 

10 date of enactment of this Act, the Comptroller General of 

11 the United States shall submit a report to the Committee 

12 on Banking, Housing, and Urban Affairs of the Senate and 

13 the Committee on Financial Services of the House of Rep14 resentatives on the feasibility of transitioning to and cre15 ating a fully privatized secondary mortgage market, includ16 ing recommendations on how to best carry out any displace17 ment of the insurance model established under this Act, and 

18 an assessment of the cost of mortgage credit and the impact 

19 on the economy if the secondary mortgage market is fully 

20 privatized. 

21 (b) CORPORATION PLAN.—Not later than 6 months 

22 after the date on which the report required under subsection 

23 (a) is submitted, the Corporation shall submit to the Com24 mittee on Banking, Housing, and Urban Affairs of the Sen25 ate and the Committee on Financial Services of the House 


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1 of Representatives a description of the legislative, adminis2 trative, and regulatory actions necessary to implement the 

3 recommendations of the report. 

4 TITLE VII—MULTIFAMILY 

5 SEC. 701. ESTABLISHMENT OF MULTIFAMILY SUBSIDIARIES. 

6 (a) FORMATION AND GOVERNANCE OF MULTIFAMILY

7 SUBSIDIARIES.— 

8 (1) FEDERAL NATIONAL MORTGAGE ASSOCIA9 TION.— 

10 (A) MULTIFAMILY SUBSIDIARY PLAN.—The 

11 FHFA Director, in consultation with the Sec12 retary of the Treasury, shall direct the Federal 

13 National Mortgage Association to develop a plan, 

14 not later than 180 days after the date of enact15 ment of this Act, to establish a multifamily sub16 sidiary for purposes of expeditiously meeting the 

17 multifamily market minimum criteria required 

18 under section 601. 

19 (B) ESTABLISHMENT OF MULTIFAMILY SUB20 SIDIARY.—Pursuant to section 604, the Federal 

21 Housing Finance Agency shall direct the Federal 

22 National Mortgage Association to establish a 

23 multifamily subsidiary not later than 1 year 

24 after the date of enactment of this Act. 


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1 (2) FEDERAL HOME LOAN MORTGAGE CORPORA2 TION.— 

3 (A) MULTIFAMILY SUBSIDIARY PLAN.—The 

4 FHFA Director, in consultation with the Sec5 retary of the Treasury, shall direct the Federal 

6 Home Loan Mortgage Corporation to develop a 

7 plan, not later than 180 days after the date of 

8 enactment of this Act, to establish a multifamily 

9 subsidiary for purposes of expeditiously meeting 

10 the multifamily market minimum criteria re11 quired under section 601. 

12 (B) ESTABLISHMENT OF MULTIFAMILY SUB13 SIDIARY.—Pursuant to section 604, the Federal 

14 Housing Finance Agency shall direct the Federal 

15 Home Loan Mortgage Corporation to establish a 

16 multifamily subsidiary not later than 1 year 

17 after the date of enactment of this Act. 

18 (b) TRANSFER OF FUNCTIONS.— 

19 (1) FANNIE MAE MULTIFAMILY SUBSIDIARY.— 

20 (A) IN GENERAL.—Notwithstanding the 

21 provisions under title VI or any other provision 

22 of law, effective on the date on which the multi23 family subsidiary is established under subsection 

24 (a)(1)(B), all employees, functions, activities, in25 frastructure, property, including the Delegated 


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1 Underwriting and Servicing Lender Program 

2 and other intellectual property, platforms, tech3 nology, or any other object or service of the Fed4 eral National Mortgage Association necessary to 

5 the support, maintenance, and operation of the 

6 multifamily business of the Federal National 

7 Mortgage Association shall be transferred and 

8 contributed, without cost, to the multifamily sub9 sidiary. 

10 (B) CAPITAL CONTRIBUTION.—In connec11 tion with the transfer required under subpara12 graph (A), the Federal National Mortgage Asso13 ciation shall contribute, in any form or manner 

14 the Federal Housing Finance Agency may deter15 mine, subject to the approval right of the Sec16 retary of the Treasury in the Senior Preferred 

17 Stock Purchase Agreement, any capital necessary 

18 to ensure that the multifamily subsidiary estab19 lished under subsection (a)(1)(B) has, in the de20 termination of the FHFA Director, sufficient 

21 capital to carry out its multifamily business, in22 cluding the ability to obtain warehouse lines of 

23 credit. 

24 (C) ENSURING CONTINUATION OF ONGOING

25 OPERATION OF MULTIFAMILY BUSINESS.—In carVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00602 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 rying out the multifamily business transferred 

2 pursuant to subparagraph (A), the multifamily 

3 subsidiary established under subsection (a)(1)(B) 

4 shall ensure that any such business continues to 

5 operate, as applicable, consistent with— 

6 (i) the Delegated Underwriting and 

7 Servicing Lender Program established by 

8 the Federal National Mortgage Association; 

9 (ii) any other programs, activities, and 

10 contractual agreements of the enterprises 

11 that support the enterprises’ provision of li12 quidity to the multifamily housing market; 

13 and 

14 (iii) the provisions of this title. 

15 (2) FREDDIE MAC MULTIFAMILY SUBSIDIARY.— 

16 (A) IN GENERAL.—Notwithstanding the 

17 provisions under title VI or any other provision 

18 of law, effective on the date on which the multi19 family subsidiary is established under subsection 

20 (a)(2)(B), all employees, functions, activities, in21 frastructure, property, including the K Series 

22 Structured Pass-Through Certificates originated 

23 and offered under the Program Plus Lender Pro24 gram and other intellectual property, platforms, 

25 technology, or any other object or service of the 


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1 Federal Home Loan Mortgage Corporation nec2 essary to the support, maintenance, and oper3 ation of the multifamily business of the Federal 

4 Home Loan Mortgage Corporation shall be 

5 transferred and contributed, without cost, to the 

6 multifamily subsidiary. 

7 (B) CAPITAL CONTRIBUTION.—In connec8 tion with the transfer required under subpara9 graph (A), the Federal Home Loan Mortgage 

10 Corporation shall contribute, in any form or 

11 manner the Federal Housing Finance Agency 

12 may determine, subject to the approval right of 

13 the Secretary of the Treasury in the Senior Pre14 ferred Stock Purchase Agreement, any capital 

15 necessary to ensure that the multifamily sub16 sidiary established under subsection (a)(2)(B) 

17 has, in the determination of the FHFA Director, 

18 sufficient capital to carry out its multifamily 

19 business, including the ability to obtain ware20 house lines of credit. 

21 (C) ENSURING CONTINUATION OF ONGOING

22 OPERATION OF MULTIFAMILY BUSINESS.—In car23 rying out the multifamily business transferred 

24 pursuant to subparagraph (A), the multifamily 

25 subsidiary established under subsection (a)(2)(B) 


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1 shall ensure that any such business continues to 

2 operate, as applicable, consistent with— 

3 (i) the K Series Structured Pass4 Through Certificates originated and offered 

5 under the Program Plus Lender Program 

6 established by the Federal Home Loan 

7 Mortgage Corporation; 

8 (ii) any other programs, activities, and 

9 contractual agreements of the enterprises 

10 that support the enterprises’ provision of li11 quidity to the multifamily housing market; 

12 and 

13 (iii) the provisions of this title. 

14 (c) MULTIFAMILY SUBSIDIARIES.— 

15 (1) IN GENERAL.—The multifamily subsidiaries 

16 established by the Federal National Mortgage Associa17 tion and the Federal Home Loan Mortgage Corpora18 tion under subsection (a) may retain a limited multi19 family mortgage loan portfolio to— 

20 (A) aggregate mortgage loans for pooled se21 curities executions; 

22 (B) implement pilot mortgage loan pro23 grams and other risk-sharing transactions and 

24 product modification testing; 


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1 (C) engage in the financing of properties 

2 with rent-regulatory restrictions, off-campus stu3 dent housing, and senior and assisted living de4 velopments; and 

5 (D) perform additional activities as may be 

6 established by the Corporation for the purpose of 

7 facilitating the continuation of existing multi8 family activities. 

9 (2) PORTFOLIO REDUCTION APPLICABILITY.—For 

10 purposes of expeditiously meeting the multifamily 

11 market minimum criteria required under section 601, 

12 the multifamily subsidiaries established under sub13 section (a) shall not be subject to the portfolio reduc14 tion required under section 605. 

15 SEC. 702. DISPOSITION OF MULTIFAMILY BUSINESSES. 

16 (a) AUTHORITY TO MANAGE DISPOSITION OF MULTI17 FAMILY BUSINESSES.—Notwithstanding any provision of 

18 title VI or any other provision of law, the Federal Housing 

19 Finance Agency may, on or before the system certification 

20 date, manage the sale, transfer, or disposition for value of 

21 property, including intellectual property, technology, plat22 forms, and legacy systems, infrastructure and processes of 

23 an enterprise relating to the operation and maintenance of 

24 the multifamily business of an enterprise. 


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1 (b) REQUIRED ESTABLISHMENT OF WELL-FUNC2 TIONING MULTIFAMILY COVERED SECURITY MARKET.—In 

3 exercising the authority in subsection (a), the Federal Hous4 ing Finance Agency shall manage any disposition of the 

5 multifamily business of an enterprise in a manner con6 sistent with— 

7 (1) the establishment of a well-functioning multi8 family covered security market; 

9 (2) the provision of broad access to multifamily 

10 financing; and 

11 (3) facilitating competition in the multifamily 

12 covered security market by— 

13 (A) providing open access to performance 

14 information on the legacy multifamily business 

15 of an enterprise; 

16 (B) providing for reasonable licensing of the 

17 multifamily proprietary systems of an enter18 prise; and 

19 (C) setting market share limitations, fees, or 

20 additional capital standards on multifamily 

21 business assets that were sold, transferred, or dis22 posed. 


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1 SEC. 703. APPROVAL AND SUPERVISION OF MULTIFAMILY 

2 GUARANTORS. 

3 (a) STANDARDS FOR APPROVAL OF MULTIFAMILY

4 GUARANTORS.— 

5 (1) IN GENERAL.—The Corporation shall de6 velop, adopt, and publish standards for the approval 

7 by the Corporation of multifamily guarantors to— 

8 (A) issue multifamily covered securities; 

9 and 

10 (B) guarantee the timely payment of prin11 cipal and interest on multifamily covered securi12 ties collateralized by eligible multifamily mort13 gage loans and insured by the Corporation. 

14 (2) REQUIRED STANDARDS.—The standards re15 quired under paragraph (1) shall include— 

16 (A) the financial history and condition of 

17 the multifamily guarantor; 

18 (B) a requirement that the multifamily 

19 guarantor maintain capital levels as defined by 

20 the Corporation, pursuant to subsection (h); 

21 (C) the capability of the management of the 

22 multifamily guarantor; 

23 (D) the general character and fitness of the 

24 officers and directors of the multifamily guar25 antor, including the compliance history of the 

26 multifamily guarantor’s officers and directors 


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1 with Federal and State laws and the rules and 

2 regulations promulgated by self-regulatory orga3 nizations (as defined in section 3(a)(26) of the 

4 Securities Exchange Act of 1934 (15 U.S.C. 

5 78c(a)(26)), as applicable; 

6 (E) the risk presented by the multifamily 

7 guarantor to the Mortgage Insurance Fund; 

8 (F) the adequacy of insurance and fidelity 

9 coverage of the multifamily guarantor; 

10 (G) the ability of the multifamily guarantor 

11 to— 

12 (i) ensure that eligible multifamily 

13 mortgage loans that collateralize a multi14 family covered security insured under this 

15 Act are originated in compliance with the 

16 requirements of this Act; 

17 (ii) oversee multifamily servicers and 

18 specialty servicers conducting servicing ac19 tivities on eligible multifamily mortgage 

20 loans, which may be governed under the 

21 terms of seller-servicer guides in effect at ei22 ther of the enterprises on the date of enact23 ment of this Act; and 

24 (iii) oversee counterparties in credit 

25 risk-sharing transactions; 


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1 (H) the capacity of the multifamily guar2 antor to take the first loss position, pari passu 

3 position, or transfer investment risk and credit 

4 risk to private market holders; 

5 (I) that the multifamily guarantor has the 

6 capacity to guarantee eligible multifamily mort7 gage loans in a manner that furthers the pur8 poses of the Corporation as described in section 

9 201(b)(5); 

10 (J) a requirement that the multifamily 

11 guarantor submit audited financial statements to 

12 the Corporation; 

13 (K) that the multifamily guarantor does not 

14 originate eligible multifamily mortgage loans 

15 and is not an affiliate of a person that actively 

16 engages in the business of originating eligible 

17 multifamily mortgage loans; and 

18 (L) a requirement that the multifamily 

19 guarantor has the capacity to meet the require20 ment of section 704. 

21 (3) CONSULTATION AND COORDINATION.—To 

22 promote consistency and minimize regulatory conflict, 

23 the Corporation shall consult and coordinate with ap24 propriate Federal and State regulators and officials 


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1 when developing standards pursuant to this sub2 section. 

3 (b) APPLICATION AND APPROVAL.— 

4 (1) APPLICATION PROCESS.— 

5 (A) IN GENERAL.—The Corporation shall 

6 establish an application process, in such form 

7 and manner and requiring such information as 

8 the Corporation may require, for the approval of 

9 a multifamily guarantor under this section. 

10 (B) APPLICATION REVIEW.—The Corpora11 tion shall establish internal timelines for its 

12 processing of an application under this section, 

13 including timelines for any action to approve or 

14 to deny an application under this section. 

15 (C) PROHIBITION ON CONTROL BY INSURED

16 DEPOSITORY INSTITUTIONS OR AFFILIATES OF

17 INSURED DEPOSITORY INSTITUTIONS.— 

18 (i) IN GENERAL.—It shall be unlawful 

19 for an insured depository institution or an 

20 affiliate of an insured depository institution 

21 to control an approved multifamily guar22 antor. 

23 (ii) RULE OF CONSTRUCTION REGARD24 ING CONTROL.—For purposes of this sub25 paragraph, any insured depository instituVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00611 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 tion or affiliate of an insured depository in2 stitution has control over an approved mul3 tifamily guarantor if the company directly 

4 or indirectly or acting through 1 or more 

5 other persons owns, controls, or has power 

6 to vote 10 percent or more of any class of 

7 voting shares of the approved multifamily 

8 guarantor. 

9 (D) EXPEDITED APPLICATION PROCESS.— 

10 The Corporation may establish an expedited ap11 plication process for an applicant applying to 

12 become an approved multifamily guarantor, pro13 vided that any such applicant— 

14 (i) proposes to use a credit risk-sharing 

15 mechanism approved under subsection (c); 

16 and 

17 (ii) otherwise meets the requirements of 

18 this section. 

19 (2) APPROVAL.—The Corporation may approve 

20 any application made pursuant to paragraph (1), 

21 provided the multifamily guarantor meets the stand22 ards established under subsection (a). 

23 (3) DENIAL.—The Corporation shall have the au24 thority to deny any application made pursuant to 

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1 family guarantor has, at any time prior to the date 

2 of the approval of such application, been— 

3 (A) subject to a statutory disqualification 

4 pursuant to section 3(a)(39) of the Securities 

5 Exchange Act of 1934 (15 U.S.C. 78c(a)(39)); or 

6 (B) suspended, removed, or prohibited from 

7 participation pursuant to section 8(g) of the 

8 Federal Deposit Insurance Act (12 U.S.C. 

9 1818(g)), prohibited from certain action pursu10 ant to paragraphs (6) or (7) of section 8(e) of the 

11 Federal Deposit Insurance Act (12 U.S.C. 

12 1818(e)), subject to an action resulting in a 

13 written agreement or other written statement 

14 under section 8(u)(1) of the Federal Deposit In15 surance Act (12 U.S.C. 1818(u)(1)), for which a 

16 violation may be enforced by an appropriate 

17 Federal banking agency, or subject to any final 

18 order issued with respect to any administrative 

19 enforcement proceeding initiated by such agency 

20 under section 8 of the Federal Deposit Insurance 

21 Act (12 U.S.C. 1818). 

22 (4) NOTICE AND PUBLICATION.—The Corpora23 tion shall— 

24 (A) provide prompt notice to a multifamily 

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1 plication of the multifamily guarantor to become 

2 an approved multifamily guarantor under this 

3 section; 

4 (B) publish a notice in the Federal Register 

5 upon approval of any multifamily guarantor; 

6 and 

7 (C) maintain an updated list of approved 

8 multifamily guarantors on the website of the 

9 Corporation. 

10 (c) CREDIT RISK-SHARING MECHANISMS.— 

11 (1) CONSIDERATION AND APPROVAL.—The Cor12 poration shall— 

13 (A) consider and approve credit risk-shar14 ing mechanisms that may be employed by an ap15 proved multifamily guarantor to manage the 

16 credit risk related to guarantees provided for 

17 multifamily covered securities; and 

18 (B) approve any credit risk-sharing mecha19 nism undertaken by an enterprise as of the date 

20 of enactment of this Act, including— 

21 (i) the Delegated Underwriting and 

22 Servicing Lender Program established by 

23 the Federal National Mortgage Association; 

24 (ii) the K Series Structured Pass25 Through Certificates originated and offered 


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1 under the Program Plus Lender Program 

2 established by the Federal Home Loan 

3 Mortgage Corporation; 

4 (iii) any other program, activity, or 

5 contractual agreement of an enterprise that 

6 supports the enterprise’s provision of liquid7 ity to the multifamily housing market; and 

8 (iv) any credit risk-sharing mechanism 

9 based on the mechanisms described in clause 

10 (i), (ii), or (iii), with modifications ap11 proved by the Corporation. 

12 (2) RULE OF CONSTRUCTION.—Nothing in para13 graph (1) shall be construed to— 

14 (A) prevent private market holders from 

15 taking a first loss position on multifamily cov16 ered securities guaranteed by an approved multi17 family guarantor; or 

18 (B) limit an approved multifamily guar19 antor from engaging in other forms of risk-shar20 ing using mechanisms that have not been consid21 ered or approved by the Corporation. 

22 (3) REPORT.—Each report required by section 

23 302(b)(5) shall include a description of each credit 

24 risk-sharing mechanism approved by the Corporation 

25 pursuant to this subsection. 


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1 (4) NOTICE AND PUBLICATION.—The Corpora2 tion shall— 

3 (A) provide prompt notice to any person 

4 seeking approval for a credit risk-sharing mecha5 nism of the approval or denial of that credit 

6 risk-sharing mechanism under this subsection; 

7 and 

8 (B) make available updated information re9 garding approved credit risk-sharing mecha10 nisms on the website of the Corporation. 

11 (5) APPLICABILITY OF THE COMMODITY EX12 CHANGE ACT AND SECURITIES ACT OF 1933.— 

13 (A) EXEMPTION FROM THE COMMODITY EX14 CHANGE ACT; PRIOR CONSULTATION RE15 QUIRED.— 

16 (i) EXEMPTION.—No counterparty that 

17 enters into a swap, as that term is defined 

18 in section 1a of the Commodity Exchange 

19 Act (7 U.S.C. 1a), for purposes of struc20 turing any credit risk-sharing mechanism 

21 that is approved by the Corporation pursu22 ant to this section, which credit risk-sharing 

23 mechanism is designed to be used or is used 

24 by a private market holder to assume losses 

25 and to reduce the specific risks arising from 


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1 losses realized under such credit risk-shar2 ing mechanism associated with any multi3 family covered security insured in accord4 ance with section 303 or section 305, shall 

5 be deemed, by reason of such swap trans6 action, to be a commodity pool, as that 

7 term is defined in section 1a of the Com8 modity Exchange Act (7 U.S.C. 1a). 

9 (ii) PRIOR CONSULTATION RE10 QUIRED.—Before approving any credit risk11 sharing mechanism that would be exempt 

12 from the Commodity Exchange Act pursu13 ant to subparagraph (A), the Corporation 

14 shall consult with the Commodity Futures 

15 Trading Commission. 

16 (B) EXEMPTION FROM SECTION 27B OF THE

17 SECURITIES ACT OF 1933; PRIOR CONSULTATION

18 REQUIRED.— 

19 (i) EXEMPTION.—Any credit risk-shar20 ing mechanism that is approved by the Cor21 poration pursuant to this section, which 

22 credit risk-sharing mechanism is designed 

23 to be used or is used by a private market 

24 holder to assume losses and to reduce the 

25 specific risks arising from losses realized 


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1 under such credit risk-sharing mechanism 

2 associated with any multifamily covered se3 curity insured in accordance with section 

4 303 or section 305, shall be exempt from 

5 section 27B of the Securities Act of 1933 

6 (15 U.S.C. 77z-2a). 

7 (ii) PRIOR CONSULTATION RE8 QUIRED.—Before approving any credit risk9 sharing mechanism that would be exempt 

10 from section 27B of the Securities Act of 

11 1933 pursuant to subparagraph (A), the 

12 Corporation shall consult with the Securi13 ties and Exchange Commission. 

14 (d) REQUIREMENT TO MAINTAIN APPROVAL STA15 TUS.— 

16 (1) AUTHORITY TO ISSUE ORDER.—If the Cor17 poration determines that an approved multifamily 

18 guarantor approved under this section no longer 

19 meets the standards for such approval or violates a 

20 requirement under this Act, including any standard, 

21 regulation, or order promulgated in accordance with 

22 this Act, the Corporation may— 

23 (A) suspend or revoke the approved status of 

24 the approved multifamily guarantor; or 


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1 (B) take any other action with respect to 

2 such approved multifamily guarantor as may be 

3 authorized under this Act. 

4 (2) RULE OF CONSTRUCTION.—The suspension or 

5 revocation of the approved status of an approved mul6 tifamily guarantor under this section shall have no 

7 effect on the status as a multifamily covered security 

8 of any multifamily covered security collateralized by 

9 eligible multifamily mortgage loans with which the 

10 approved multifamily guarantor contracted prior to 

11 the suspension or revocation. 

12 (3) PUBLICATION.—The Corporation shall— 

13 (A) promptly publish a notice in the Fed14 eral Register upon suspension or revocation of 

15 the approval of any approved multifamily guar16 antor; and 

17 (B) maintain an updated list of such ap18 proved multifamily guarantors on the website of 

19 the Corporation. 

20 (4) DEFINITION.—In this subsection, the term 

21 ‘‘violate’’ includes any action, taken alone or with 

22 others, for or toward causing, bringing about, partici23 pating in, counseling, or aiding or abetting, a viola24 tion of the requirements under this Act. 


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1 (e) PRUDENTIAL STANDARDS FOR SUPERVISION.—The 

2 Corporation shall prescribe prudential standards for ap3 proved multifamily guarantors in order to— 

4 (1) ensure— 

5 (A) the safety and soundness of approved 

6 multifamily guarantors; and 

7 (B) the maintenance of approval standards 

8 by approved multifamily guarantors; and 

9 (2) minimize the risk presented to the Mortgage 

10 Insurance Fund. 

11 (f) REPORTS AND EXAMINATIONS.—For purposes of 

12 determining whether an approved multifamily guarantor 

13 is fulfilling the requirements under this Act, the Corpora14 tion shall have the authority to require reports from and 

15 examine an approved multifamily guarantor, in the same 

16 manner and to the same extent as the Federal Deposit In17 surance Corporation has with respect to an insured deposi18 tory institution under the provisions of subsection (a) of 

19 section 9 of the Federal Deposit Insurance Act (12 U.S.C. 

20 1819). 

21 (g) ENFORCEMENT.—The Corporation shall have the 

22 authority to enforce the provisions of this Act with respect 

23 to an approved multifamily guarantor, in the same manner 

24 and to the same extent as the Federal Deposit Insurance 

25 Corporation has with respect to an insured depository instiVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00620 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 tution under the provisions of subsections (b) through (n) 

2 of section 8 of the Federal Deposit Insurance Act (12 U.S.C. 

3 1818). 

4 (h) CAPITAL STANDARDS.— 

5 (1) IN GENERAL.—Pursuant to the requirement 

6 to establish capital and related solvency standards 

7 under section 309(b), the Corporation shall establish 

8 standards for approved multifamily guarantors as 

9 follows: 

10 (A) GUARANTOR ACTIVITIES.—The capital 

11 standard for eligible multifamily mortgage loans 

12 that collateralize multifamily covered securities 

13 insured by the Corporation shall require an ap14 proved multifamily guarantor to hold 10 percent 

15 capital. 

16 (B) AGGREGATION ACTIVITIES.—An ap17 proved multifamily guarantor shall hold capital 

18 in an amount comparable to that which is re19 quired to be held by insured depository institu20 tions and their affiliates with respect to their ap21 plicable aggregating activities. 

22 (C) SOLVENCY LEVELS.—An approved mul23 tifamily guarantor shall maintain solvency levels 

24 adequate for the approved multifamily guarantor 

25 to withstand losses that might be incurred by the 


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1 approved multifamily guarantor in a period of 

2 economic stress, including national and regional 

3 multifamily housing price declines, such as those 

4 observed during moderate to severe recessions in 

5 the United States. 

6 (2) RISK-SHARING CONSIDERATIONS.— 

7 (A) IN GENERAL.—For purposes of para8 graph (1)(A), the Corporation shall consider the 

9 extent, amount, and form of risk-sharing and 

10 risk mitigation through the use by approved 

11 multifamily guarantors of credit risk-sharing 

12 mechanisms approved pursuant to subsection (c). 

13 The Corporation shall allow such risk-sharing 

14 and risk mitigation to fulfill required amounts 

15 of capital to be held under paragraph (1)(A) 

16 while maintaining an appropriate structure of 

17 capital as determined by the Corporation. 

18 (B) EQUIVALENT TREATMENT.—For pur19 poses of paragraph (2)(A), the Corporation shall 

20 seek to ensure equivalent capital treatment be21 tween approved credit risk-sharing mechanisms 

22 approved under subsection (c) with similar per23 formance histories. 

24 (3) OTHER CONSIDERATION.—To reflect the dif25 ferences between single-family and multifamily busiVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00622 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 nesses, the capital standards established under para2 graph (1)(A) may differ from the capital standards 

3 established under section 311 for approved guaran4 tors. 

5 (4) STRESS TESTS.—The Corporation shall con6 duct appropriate stress tests of each approved multi7 family guarantor that has total assets of more than 

8 $10,000,000,000, provided that such stress tests shall 

9 be— 

10 (A) specifically tailored to the business 

11 model of the approved multifamily guarantor; 

12 and 

13 (B) utilized to— 

14 (i) ensure the safety and soundness of 

15 the approved multifamily guarantor; and 

16 (ii) minimize the risk the approved 

17 multifamily guarantor may present to the 

18 Mortgage Insurance Fund. 

19 (i) RESOLUTION AUTHORITY FOR FAILING MULTI20 FAMILY GUARANTORS.— 

21 (1) IN GENERAL.—Notwithstanding any other 

22 provision of Federal law, the law of any State, or the 

23 constitution of any State, the Corporation shall— 

24 (A) have the authority to act, in the same 

25 manner and to the same extent, with respect to 


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1 an approved multifamily guarantor as the Fed2 eral Deposit Insurance Corporation has with re3 spect to an insured depository institution under 

4 subsections (c) through (s) of section 11 of the 

5 Federal Deposit Insurance Act (12 U.S.C. 1821), 

6 section 12 of the Federal Deposit Insurance Act 

7 (12 U.S.C. 1822), and section 13 of the Federal 

8 Deposit Insurance Act (12 U.S.C. 1823), while 

9 tailoring such actions to the specific business 

10 model of the approved multifamily guarantor, as 

11 may be necessary to properly exercise such au12 thority under this subsection; 

13 (B) in carrying out any authority provided 

14 in subparagraph (A), act, in the same manner 

15 and to the same extent, with respect to the Mort16 gage Insurance Fund as the Federal Deposit In17 surance Corporation may act with respect to the 

18 Deposit Insurance Fund under the provisions of 

19 the Federal Deposit Insurance Act set forth in 

20 subparagraph (A); 

21 (C) prescribe regulations governing the ap22 plicable rights, duties, and obligations of an ap23 proved multifamily guarantor placed into resolu24 tion under this subsection, its creditors, counter25 parties, and other persons, as the Corporation 


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1 deems necessary to properly exercise the author2 ity provided in subparagraph (A); 

3 (D) consistent with the authorities provided 

4 in subparagraph (A), immediately place an in5 solvent approved multifamily guarantor into re6 ceivership; and 

7 (E) upon placing an approved multifamily 

8 guarantor into receivership, treat multifamily 

9 covered securities insured by the Corporation 

10 under section 303 in the same manner as the 

11 Federal Deposit Insurance Corporation treats de12 posit liabilities under section 11(d)(11)(A)(ii) of 

13 the Federal Deposit Insurance Act and insured 

14 deposits under section 11(f) of the Federal De15 posit Insurance Act, where the Corporation shall 

16 have the same right of subrogation as the Federal 

17 Deposit Insurance Corporation has under section 

18 11(g) of the Federal Deposit Insurance Act. 

19 (2) LEAST-COST RESOLUTION REQUIRED.—The 

20 Corporation may not exercise any authority under 

21 paragraph (1) with respect to any approved multi22 family guarantor unless the total amount of the ex23 penditures by the Corporation and obligations in24 curred by the Corporation in connection with the ex25 ercise of any such authority with respect to such apVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00625 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 proved multifamily guarantor is the least costly to the 

2 Mortgage Insurance Fund, consistent with the least 

3 cost approach specified in the Federal Deposit Insur4 ance Act (12 U.S.C. 1811 et seq.), of all possible meth5 ods for meeting the Corporation’s obligations under 

6 this Act and expeditiously concluding its resolution 

7 activities, subject to section 13 of the Federal Deposit 

8 Insurance Act where the Corporation and the Board 

9 of Directors shall have the same authority as the Fed10 eral Deposit Insurance Corporation and the Federal 

11 Deposit Insurance Corporation’s board of directors. 

12 (3) TAXPAYER PROTECTION.—The Corporation, 

13 in carrying out any authority provided in this sub14 section, shall prescribe regulations to ensure that any 

15 amounts owed to the United States, unless the United 

16 States agrees or consents otherwise, shall have pri17 ority following administrative expenses of the receiver 

18 when satisfying unsecured claims against an ap19 proved multifamily guarantor, or the receiver there20 for, that are proven to the satisfaction of the receiver. 

21 (j) HEARING.—Upon notice of denial of an application 

22 for approval under subsection (b) or upon a notice of sus23 pension or revocation of the approved status of an approved 

24 multifamily guarantor under subsection (d), the applicant 

25 or approved multifamily guarantor shall be afforded a hearVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00626 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 ing under subsection (h) of section 8 of the Federal Deposit 

2 Insurance Act (12 U.S.C. 1818(h)), in the same manner 

3 and to the same extent as if the Corporation were the appro4 priate Federal banking agency, provided that the approved 

5 multifamily guarantor submits a request to the Corporation 

6 for a hearing not later than 10 days after the date on which 

7 the notice is published under subsection (b)(3) or (d)(3). 

8 (k) PROHIBITED ACTIVITY.—An approved multifamily 

9 guarantor may not— 

10 (1) originate eligible multifamily mortgage 

11 loans; or 

12 (2) be an affiliate of a person that actively en13 gages in the business of originating eligible multi14 family mortgage loans. 

15 (l) GUARANTORS REQUIRED TO PAY CLAIMS.—Subject 

16 to such standards as the Corporation may provide, an ap17 proved multifamily guarantor may not for any reason 

18 withhold payment of funds that would ensure holders of 

19 multifamily covered securities receive timely payment of 

20 principal and interest on multifamily covered securities. 

21 The Corporation shall by regulation develop a process for 

22 the mediation and resolution of disputed payment amounts. 

23 SEC. 704. MULTIFAMILY HOUSING REQUIREMENT. 

24 (a) IN GENERAL.—Each approved multifamily guar25 antor shall ensure, during each calendar year, that at least 


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1 60 percent of the rental housing units which are contained 

2 in the eligible multifamily mortgage loans that collateralize 

3 all multifamily covered securities guaranteed by each such 

4 approved multifamily guarantor during the previous 24- 

5 month period were, at the time of origination, affordable 

6 to low-income families. 

7 (b) DETERMINATION OF AFFORDABILITY OF RENTAL

8 HOUSING UNITS.—For purposes of subsection (a), the af9 fordability of rental housing units contained in an eligible 

10 multifamily mortgage loan shall be determined at the time 

11 of loan commitment by using— 

12 (1) the most recent rent roll for an occupied 

13 property; or 

14 (2) in the case of rental housing units that are 

15 newly constructed or substantially rehabilitated, a 

16 final pro-forma rent roll. 

17 (c) DETERMINATION OF COMPLIANCE.—The Corpora18 tion shall determine, during each calendar year, whether 

19 each approved multifamily guarantor has complied with 

20 the requirement under subsection (a). 

21 (d) SUSPENSION OR ADJUSTMENT.— 

22 (1) IN GENERAL.—The Corporation may suspend 

23 or adjust the requirement under subsection (a) for an 

24 approved multifamily guarantor or guarantors— 


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1 (A) during a period of unusual and exigent 

2 market conditions in the multifamily housing 

3 market as determined pursuant to section 305; 

4 or 

5 (B) either— 

6 (i) pursuant to information available 

7 to the Corporation demonstrating adverse 

8 market conditions in the multifamily hous9 ing market; or 

10 (ii) pursuant to a written request to 

11 suspend or adjust the requirement under 

12 subsection (a) made by an approved multi13 family guarantor, which the Corporation 

14 may grant in whole or in part. 

15 (2) CRITERIA FOR SUSPENSION OR ADJUST16 MENT.—The Corporation may suspend or adjust the 

17 requirement under subsection (a) pursuant to para18 graph (1)(B) only if— 

19 (A) market and economic conditions require 

20 such an action; or 

21 (B) efforts to meet the requirement under 

22 subsection (a) would result in— 

23 (i) the constraint of liquidity in cer24 tain market segments; 


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1 (ii) over-investment in certain market 

2 segments; or 

3 (iii) other consequences contrary to the 

4 intent of this section. 

5 (3) LIMITATION ON AUTHORITY.—The Corpora6 tion shall narrowly tailor any suspension or adjust7 ment made under paragraph (1)(B) to address the 

8 market conditions that prompted the suspension or 

9 adjustment. 

10 (4) DETERMINATION.— 

11 (A) PERIOD FOR PUBLIC COMMENT.—The 

12 Corporation shall, promptly upon a decision to 

13 pursue a suspension or adjustment under para14 graph (1)(B)(i) or upon receipt of a request 

15 under paragraph (1)(B)(ii), seek public comment 

16 on the suspension or adjustment for a period of 

17 30 days. 

18 (B) PERIOD FOR DETERMINATION.—The 

19 Corporation shall make a determination regard20 ing any proposed suspension or adjustment with21 in 30 days after the expiration of the public 

22 comment period provided under subparagraph 

23 (A). 

24 (C) EXTENSIONS.—The Corporation may 

25 extend the period for determination provided 


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1 under subparagraph (B) for a single additional 

2 15-day period, but only if the Corporation re3 quests additional information from the approved 

4 multifamily guarantor. 

5 (5) REVIEW OF SUSPENSION OR ADJUSTMENT.— 

6 (A) ANNUAL REVIEW.—The Corporation 

7 shall review any suspension or adjustment made 

8 by the Corporation under subparagraphs (A) or 

9 (B) of paragraph (1) at least annually to deter10 mine whether the suspension or adjustment satis11 fies the criteria established under paragraph (2). 

12 (B) PUBLICATION AND COMMENT.—The 

13 Corporation shall— 

14 (i) not less than annually, publish a 

15 list of all suspensions and adjustments in 

16 effect under this section; and 

17 (ii) seek public comment as to the con18 tinued necessity of such suspensions or ad19 justments. 

20 (e) MIXED INCOME LIQUIDITY STUDY AND REVIEW.— 

21 (1) STUDY.—Not later than 2 years after the 

22 date of enactment of this Act, and periodically or as 

23 market conditions warrant thereafter, the Corporation 

24 shall conduct a study of liquidity in the market for 

25 financing the new construction or substantial rehaVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00631 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 bilitation of mixed-income properties containing mul2 tifamily units that— 

3 (A) otherwise qualify under the requirement 

4 under subsection (a); and 

5 (B) are financed by tax-exempt bonds that 

6 are issued by a State or local housing finance 

7 agency. 

8 (2) ADJUSTMENT TO REQUIREMENT.—The Cor9 poration may adjust the requirement under subsection 

10 (a), subject to the procedures provided under para11 graphs (2) through (5) of subsection (d), if the Cor12 poration finds based on a study conducted under 

13 paragraph (1) that— 

14 (A) liquidity is constrained in the market 

15 for eligible multifamily mortgage loans for the 

16 mixed-income properties described in paragraph 

17 (1); and 

18 (B) it is necessary to foster liquidity in that 

19 market. 

20 (f) RULE OF CONSTRUCTION.—Nothing in this section 

21 shall be construed to authorize the Corporation to require 

22 an approved multifamily guarantor to exceed the 60 percent 

23 requirement set forth under subsection (a). 

24 (g) DEFINITIONS; APPLICABILITY TO ENTERPRISES.— 

25 In this section— 


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1 (1) the term ‘‘approved multifamily guarantor’’ 

2 includes an enterprise or any multifamily subsidiary 

3 established pursuant to section 701; 

4 (2) the term ‘‘multifamily covered security’’ in5 cludes a multifamily mortgage-backed security guar6 anteed by an enterprise or any multifamily sub7 sidiary established pursuant to section 701; and 

8 (3) the term ‘‘eligible multifamily mortgage 

9 loan’’ includes a multifamily mortgage loan 

10 collateralizing a security guaranteed by an enterprise 

11 or any multifamily subsidiary established pursuant 

12 to section 701. 

13 SEC. 705. ESTABLISHMENT OF SMALL MULTIFAMILY PROP14 ERTY PROGRAM. 

15 (a) PILOT PROGRAM.—The Corporation shall establish 

16 at least 1 pilot program, to be administered by the Office 

17 of Multifamily Housing, in consultation with the Office of 

18 Consumer and Market Access, to test and assess methods 

19 or products designed to increase secondary mortgage market 

20 access for multifamily properties comprised of not more 

21 than 50 units or with mortgages not exceeding $3,000,000 

22 (as adjusted for inflation). 

23 (b) ACTIVITIES.—In administering the pilot program 

24 required under subsection (a), the Corporation shall— 


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1 (1) review, and may approve, proposals from 

2 regulated entities or approved multifamily guaran3 tors, including proposals focused on lending by small 

4 mortgage lenders, to participate in the pilot program 

5 by carrying out activities to decrease barriers to sec6 ondary mortgage market access for multifamily prop7 erties comprised of not more than 50 units or with 

8 mortgages not exceeding $3,000,000 (as adjusted for 

9 inflation) through new risk-sharing, partnerships, or 

10 other mechanisms or incentives; and 

11 (2) establish requirements governing the activi12 ties of the pilot program, including requirements with 

13 respect to— 

14 (A) any mid-course alterations of activities 

15 permitted under the pilot program, information 

16 sharing, reporting, and evaluation of the results 

17 of a pilot program; and 

18 (B) the tracking of any allocations of 

19 amounts that may be distributed from the Mar20 ket Access Fund. 

21 (c) USE OF MARKET ACCESS FUND.—A regulated en22 tity or approved multifamily guarantor that submits a pro23 posal under subsection (b) may request, as part of the pro24 posal, allocations from the Market Access Fund as necessary 

25 to support its proposed activities. 


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1 (d) AMENDMENTS TO PILOT PROGRAM.—The Corpora2 tion may amend a pilot program established under sub3 section (a) as needed to accommodate the multifamily mort4 gage market. 

5 (e) PUBLICATION.—The Corporation shall make pub6 licly available the results of a pilot program established 

7 under subsection (a). 

8 (f) REQUIREMENT.—The Corporation shall consider 

9 the results of a pilot program established under subsection 

10 (a) for purposes of expanding and implementing new mech11 anisms to decrease barriers to secondary mortgage market 

12 access for multifamily properties comprised of not more 

13 than 50 units or with mortgages not exceeding $3,000,000 

14 (as adjusted for inflation). 

15 (g) LIMITATION ON FUNDING.—The Corporation may 

16 not use funds from the Mortgage Insurance Fund to fund 

17 any pilot program activities conducted by a regulated enti18 ty or approved multifamily guarantor under this section. 

19 SEC. 706. MULTIFAMILY HOUSING STUDY. 

20 The Office of Multifamily Housing shall conduct a 

21 study on the expansion of the Federal Home Loan Banks’ 

22 Acquired Member Assets (‘‘AMA’’) programs to eligible mul23 tifamily mortgage loans. 


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1 SEC. 707. MULTIFAMILY PLATFORM STUDY. 

2 (a) IN GENERAL.—Not later than 18 months after the 

3 system certification date, the Corporation shall conduct a 

4 study on the need, feasibility, costs, and merits of creating 

5 a cooperatively-owned, nonprofit multifamily issuance 

6 platform to securitize eligible multifamily mortgage loans. 

7 (b) CONTENT OF STUDY.—The study required under 

8 subsection (a) shall address— 

9 (1) competition between existing approved multi10 family guarantors; 

11 (2) the barriers to entry for new multifamily 

12 guarantors; 

13 (3) the costs associated with developing a new 

14 platform; 

15 (4) the funding of smaller-balance multifamily 

16 mortgage loans, including mortgage loans originated 

17 by credit unions and community and mid-size banks 

18 and other small-volume lenders in rural and other 

19 underserved communities; 

20 (5) standardized definitions and reporting and 

21 payment requirements; 

22 (6) stability in the multifamily lending market 

23 in times of stress; and 

24 (7) such other information as the Corporation 

25 determines appropriate to further the purpose of the 

26 study. 


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1 (c) CONSIDERATION.—In conducting the study re2 quired under subsection (a), the Corporation shall consider 

3 whether any identified need to establish a multifamily 

4 securitization platform can and will be met by the Platform 

5 established under section 321, or any subsidiary or affiliate 

6 thereof. 

7 (d) REPORT TO CONGRESS.—Not later than 18 months 

8 after the system certification date, the Corporation shall 

9 submit the study required under subsection (a) to the Com10 mittee on Banking, Housing, and Urban Affairs of the Sen11 ate and the Committee on Financial Services of the House 

12 of Representatives. 

13 SEC. 708. SHORT-TERM RESIDENTIAL HOUSING. 

14 (a) IN GENERAL.—Section 513 of the National Hous15 ing Act (12 U.S.C. 1731b) is amended— 

16 (1) in subsection (b)— 

17 (A) in clause (1), by striking ‘‘or’’ at the 

18 end; and 

19 (B) by inserting before the period at the end 

20 the following: ‘‘, or (3) the project is a short-term 

21 residential property (as such term is defined in 

22 subsection (e) of this section) and is subject to a 

23 mortgage insured under section 207, provided 

24 that the Secretary has made a determination 

25 pursuant to the study and report required under 


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1 section 708(b) of the Housing Finance Reform 

2 and Taxpayer Protection Act that the provision 

3 of such insurance is appropriate’’; and 

4 (2) in subsection (e)— 

5 (A) in clause (1), by striking ‘‘and’’ at the 

6 end; and 

7 (B) by inserting before the period at the end 

8 the following: ‘‘, and (3) the term ‘short-term res9 idential property’ means multifamily housing 

10 that (A) has more than 50 dwelling units that 

11 each contain a kitchen, including a full refrig12 erator and cooking surface, and bathroom facili13 ties, (B) provides mail boxes for each unit, (C) 

14 rents such units for a minimum stay of 7 days, 

15 and (D) does not provide food or beverage serv16 ices, including in-room service, daily maid serv17 ices, furnishing and laundering of linen without 

18 charge, or bellhop services’’. 

19 (b) STUDY.— 

20 (1) IN GENERAL.—Not later than 6 months after 

21 the date of enactment of this Act, the Secretary of 

22 Housing and Urban Development shall— 

23 (A) conduct and complete a study evalu24 ating the risk of the provision of insurance under 

25 section 207 of the National Housing Act (12 


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1 U.S.C. 1713) for short-term residential prop2 erties; and 

3 (B) submit a report to the Committee on 

4 Banking, Housing, and Urban Affairs of the 

5 Senate and the Committee on Financial Services 

6 of the House of Representatives, which shall in7 clude— 

8 (i) the findings of the study required 

9 under subparagraph (A); and 

10 (ii) a determination as to whether any 

11 additional risk presented to the General In12 surance Fund resulting from the provision 

13 of insurance under section 207 of the Na14 tional Housing Act (12 U.S.C. 1713) for 

15 short-term residential properties is appro16 priate. 

17 (2) CONTENTS OF STUDY.—In conducting the 

18 study required under paragraph (1)(A), the Secretary 

19 of Housing and Urban Development shall— 

20 (A) evaluate whether the provision of insur21 ance under section 207 of the National Housing 

22 Act (12 U.S.C. 1713) for short-term residential 

23 properties presents additional risk to the General 

24 Insurance Fund; and 


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1 (B) consider any additional operational 

2 and logistical costs associated with providing 

3 such insurance. 

4 (3) DEFINITIONS.—In this subsection— 

5 (A) the term ‘‘General Insurance Fund’’ 

6 means the fund established under section 519 of 

7 the National Housing Act (12 U.S.C. 1735c); 

8 and 

9 (B) the term ‘‘short-term residential prop10 erties’’ has the meaning given the term under 

11 section 513(e)(3) of the National Housing Act 

12 (12 U.S.C. 1731b(e)(3)). 

13 TITLE VIII—GENERAL 

14 PROVISIONS 

15 SEC. 801. RULE OF CONSTRUCTION. 

16 Nothing in this Act shall be construed to alter, super17 sede, or interfere with the final ruling of a court of com18 petent jurisdiction with respect to any provision of the Sen19 ior Preferred Stock Purchase Agreement or amendments 

20 thereof of an enterprise. 

21 SEC. 802. SEVERABILITY. 

22 If any provision of this Act or the application of any 

23 provision of this Act to any person or circumstance, is held 

24 invalid, the application of such provision to other persons 


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1 or circumstances, and the remainder of this Act, shall not 

2 be affected thereby. 

3 SEC. 803. TRANSFER NOTIFICATION UNDER TILA. 

4 (a) IN GENERAL.—Section 131(g) of the Truth in 

5 Lending Act (15 U.S.C. 1641(g)) is amended by striking 

6 paragraph (2) and inserting the following: 

7 ‘‘(2) DEFINITIONS.—For purposes of this sub8 section— 

9 ‘‘(A) the term ‘mortgage loan’ means any 

10 consumer credit transaction that is secured by 

11 the principal dwelling of a consumer; 

12 ‘‘(B) the term ‘securitized residential mort13 gage’ means any residential mortgage loan that 

14 serves as collateral for a fixed-income or other se15 curity that allows the holder of such security to 

16 receive payments dependent on the cash flow 

17 from such residential mortgage loan; and 

18 ‘‘(C) the term ‘servicer’— 

19 ‘‘(i) has the meaning provided in sec20 tion 129A, except that such term includes a 

21 person who receives any payments from a 

22 mortgagor, including any amounts for es23 crow accounts, and makes payments to the 

24 owner of the loan or other third parties, in25 cluding payments made after default, purVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00641 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 suant to the terms of the relevant contracts; 

2 and 

3 ‘‘(ii) excludes State and local housing 

4 agencies.’’. 

5 (b) DISCLOSURE OF FEES.—Section 5(c)(3) of the 

6 Real Estate Settlement Procedures Act (12 U.S.C. 

7 2605(c)(3)) is amended— 

8 (1) by striking ‘‘Any notice required’’ and insert9 ing the following: 

10 ‘‘(A) IN GENERAL.—Any notice required’’; 

11 and 

12 (2) by adding at the end the following: 

13 ‘‘(B) DISCLOSURE OF FEES REQUIRE14 MENT.—The transferee servicer shall provide to 

15 the borrower, not more than 15 days after the ef16 fective date of transfer of the servicing of the 

17 mortgage loan, a statement regarding the loan 

18 which shows the following: 

19 ‘‘(i) The application of all payments 

20 and charges, including the date received, as 

21 allocated to principal, interest, escrow, and 

22 other charges. 

23 ‘‘(ii) The status of the loan as of the 

24 date of the transfer including whether the 

25 loan is in default and whether any loss 


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1 mitigation application submitted by the 

2 borrower is pending. 

3 ‘‘(iii) An itemization and explanation 

4 for all arrearages claimed to be due as of 

5 the date of the transfer.’’. 

6 (c) SAFE HARBOR FOR MISTAKEN PAYMENTS; 

7 FEES.—Section 131 of the Truth in Lending Act (15 U.S.C. 

8 1641) is amended— 

9 (1) by redesignating subsection (g) as subsection 

10 (i); and 

11 (2) by inserting after subsection (f) the following: 

12 ‘‘(g) TREATMENT OF MISTAKEN LOAN PAYMENTS

13 AFTER TRANSFER.—During the 60-day period beginning 

14 on the effective date of transfer of the servicing of any 

15 securitized residential mortgage loan, a late fee may not 

16 be imposed on the consumer with respect to any payment 

17 on such loan, and no such payment may be treated as late 

18 for any other purpose, if the payment is received by the 

19 transferor servicer (rather than the transferee servicer who 

20 should properly receive payment) on or before the applicable 

21 due date, including any grace period allowed under the loan 

22 documents. 

23 ‘‘(h) FEE WAIVE UPON TRANSFER.— 


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1 ‘‘(1) IN GENERAL.—The creditor, new owner, or 

2 assignee of the mortgage loan, by itself or through its 

3 servicer, may not impose or collect— 

4 ‘‘(A) any fee that is not listed as having 

5 been incurred in the notice to the consumer of 

6 the transfer of servicing of a securitized residen7 tial mortgage loan; or 

8 ‘‘(B) any fee incurred prior to the effective 

9 date of servicing transfer that is not disclosed on 

10 a periodic statement provided to the consumer 

11 prior to the effective date of servicing transfer of 

12 a securitized residential mortgage loan. 

13 ‘‘(2) DEFINITIONS.—For purposes of this sub14 section— 

15 ‘‘(A) the term ‘securitized residential mort16 gage’ means any residential mortgage loan that 

17 serves as collateral for a fixed-income or other se18 curity that allows the holder of such security to 

19 receive payments dependent on the cash flow 

20 from such residential mortgage loan; and 

21 ‘‘(B) the term ‘servicer’— 

22 ‘‘(i) has the meaning provided in sec23 tion 129A, except that such term includes a 

24 person who receives any payments from a 

25 mortgagor, including any amounts for esVerDate Sep 11 2014 02:32 Sep 19, 2014 Jkt 039200 PO 00000 Frm 00644 Fmt 6652 Sfmt 6203 E:\BILLS\S1217.RS S1217

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1 crow accounts, and makes payments to the 

2 owner of the loan or other third parties, in3 cluding payments made after default, pur4 suant to the terms of the relevant contracts; 

5 and 

6 ‘‘(ii) excludes State and local housing 

7 agencies.’’. 

8 SEC. 804. INVESTMENT AUTHORITY TO SUPPORT RURAL IN9 FRASTRUCTURE. 

10 Section 11 of the Federal Home Loan Bank Act (12 

11 U.S.C. 1431) is amended by adding at the end the following: 

12 ‘‘(m) MISSION INVESTMENTS FOR RURAL INFRA13 STRUCTURE.—In furtherance of its mission under section 

14 5, each Federal Home Loan Bank is authorized to purchase 

15 investment grade securities from nonmember cooperative 

16 lenders that have received financing from the Federal Fi17 nancing Bank and that possess demonstrated experience in 

18 making loans to rural cooperatives. Such securities shall be 

19 secured investments collateralized by loans of the coopera20 tive lender. The purchase of such securities shall be at the 

21 sole discretion of the Bank, consistent with such regulations, 

22 restrictions, and limitations as may be prescribed by the 

23 Board.’’. 


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1 SEC. 805. CONSOLIDATION OF SIMILAR HOUSING ASSIST2 ANCE PROGRAMS. 

3 (a) REPORT.— 

4 (1) IN GENERAL.—Not later than 2 years after 

5 the date of enactment of this Act, the Corporation, the 

6 Secretary of Housing and Urban Development, the 

7 Secretary of the Treasury, the Secretary of Agri8 culture, the Secretary of Veterans Affairs, the Sec9 retary of Labor, and the Secretary of the Interior 

10 shall jointly submit to Congress a report, which 

11 shall— 

12 (A) identify and evaluate, based on need 

13 and appropriateness, specific opportunities to 

14 consolidate similar housing assistance programs, 

15 which may include the programs identified in 

16 the August 2012 Government Accountability Of17 fice report to Congress entitled ‘‘Opportunities 

18 Exist to Increase Collaboration and Consider 

19 Consolidation’’ (GAO-12-554); 

20 (B) provide recommendations to Congress 

21 for legislative action to appropriately streamline, 

22 consolidate, or eliminate similar housing assist23 ance programs identified and evaluated under 

24 subparagraph (A); and 

25 (C) identify opportunities for cross-agency 

26 collaboration of housing assistance efforts. 


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1 (2) ACCESSIBILITY.—The report submitted under 

2 paragraph (1) shall be made available on a publically 

3 accessible Internet website. 

4 (b) USE OF ADMINISTRATIVE AUTHORITY.— 

5 (1) IN GENERAL.— 

6 (A) The Director of the Office of Manage7 ment and Budget shall coordinate with the Sec8 retary of Housing and Urban Development, the 

9 Secretary of the Treasury, the Secretary of Agri10 culture, the Secretary of Veterans Affairs, the 

11 Secretary of Labor, and the Secretary of the In12 terior to consider and evaluate opportunities to 

13 eliminate, consolidate, or streamline housing as14 sistance programs. 

15 (B) The Director of the Office of Manage16 ment and Budget, in coordination with the Sec17 retary of Housing and Urban Development, the 

18 Secretary of the Treasury, the Secretary of Agri19 culture, the Secretary of Veterans Affairs, the 

20 Secretary of Labor, and the Secretary of the In21 terior, shall eliminate, consolidate, or streamline 

22 any programs identified under subparagraph 

23 (A) which they find appropriate. 

24 (2) COST SAVINGS.—Any administrative cost 

25 savings resulting from the consolidation, elimination, 


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1 or streamlining of housing assistance programs under 

2 paragraph (1) shall be transferred as follows: 

3 (A) 50 percent to the Housing Trust Fund 

4 established under section 1338 of the Federal 

5 Housing Enterprises Financial Safety and 

6 Soundness Act of 1992 (12 U.S.C. 4568). 

7 (B) 50 percent to the General Fund of the 

8 Treasury to be used for deficit reduction. 

9 (3) REPORT.—The Director of the Office of Man10 agement and Budget shall submit to Congress a re11 port on an annual basis of any actions taken to 

12 streamline similar housing assistance programs, and 

13 the cost savings resulting from such actions. 

14 (c) RULE OF CONSTRUCTION.—Nothing in this section 

15 shall be construed to grant the Director of the Office of Man16 agement and Budget, the Secretary of Housing and Urban 

17 Development, the Secretary of the Treasury, the Secretary 

18 of Agriculture, the Secretary of Veterans Affairs, the Sec19 retary of Labor, or the Secretary of the Interior any addi20 tional authority to eliminate, consolidate, or streamline 

21 housing assistance programs that they did not have prior 

22 to the date of enactment of this Act. 


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1 SEC. 806. BUREAU OF CONSUMER FINANCIAL PROTECTION 

2 REVIEW; GAO REPORT. 

3 (a) BUREAU OF CONSUMER FINANCIAL PROTECTION

4 REVIEW.— 

5 (1) IN GENERAL.—Except as provided in para6 graph (2), not later than 3 months after the date of 

7 enactment of this Act, the Bureau of Consumer Fi8 nancial Protection shall, after reviewing relevant data 

9 and consulting with stakeholders, including represent10 atives of the manufactured housing industry and rep11 resentatives of consumers and homeowners, consider 

12 and review the application of subsections (bb) and 

13 (cc) of section 103 of the Truth in Lending Act (15 

14 U.S.C. 1602) to manufactured housing loans, includ15 ing— 

16 (A) the annual percentage rate coverage test 

17 for high-cost mortgages; 

18 (B) the total points and fees coverage test 

19 for high-cost mortgages; and 

20 (C) the definition of the term ‘‘mortgage 

21 originator’’. 

22 (2) EXCEPTION.—The Bureau of Consumer Fi23 nancial Protection shall not be required to conduct 

24 the review under paragraph (1) if the Bureau does 

25 not receive relevant data relating to the review that 


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1 was not previously submitted to the Bureau on or be2 fore January 31, 2013. 

3 (3) RULE OF CONSTRUCTION.—Nothing in para4 graph (1) shall be construed to require the Bureau of 

5 Consumer Financial Protection to engage in rule6 making, including rulemaking to modify any rule re7 lating to subsection (bb) or (cc) of section 103 of the 

8 Truth in Lending Act (15 U.S.C. 1602). 

9 (b) GAO REPORT.—Not later than 10 months after the 

10 date of enactment of this Act, the Comptroller General of 

11 the United States shall conduct a study and issue a report 

12 to Congress on the manufactured housing loan market, 

13 which shall include an analysis of— 

14 (1) the loan products available in the manufac15 tured housing loan market and the performance of 

16 those products, which shall include a review of the un17 derwriting standards and portfolios of creditors that 

18 originate manufactured housing loans, such as deposi19 tory institutions and finance companies; 

20 (2) the characteristics of borrowers that partici21 pate in the manufactured housing loan market, in22 cluding— 

23 (A) the creditworthiness of the borrower; 

24 (B) the usage pattern of the borrower; and 


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1 (C) the process for evaluating and com2 paring loan products prior to purchase; and 

3 (3) the potential impact on access to mortgage 

4 credit for manufactured housing loans if subsections 

5 (bb) and (cc) of section 103 of the Truth in Lending 

6 Act (15 U.S.C. 1602) were applied to manufactured 

7 housing loans, including— 

8 (A) the annual percentage rate coverage test 

9 for high-cost mortgages; 

10 (B) the total points and fees coverage test 

11 for high-cost mortgages; 

12 (C) the definition of ‘‘mortgage originator’’; 

13 (D) borrower delinquency and default in the 

14 manufactured housing loan market; and 

15 (E) competition in the manufactured hous16 ing loan market. 

17 SEC. 807. DETERMINATION OF BUDGETARY EFFECTS. 

18 The budgetary effects of this Act, for the purpose of 

19 complying with the Statutory Pay-As-You-Go Act of 2010, 

20 shall be determined by reference to the latest statement titled 

21 ‘‘Budgetary Effects of PAYGO Legislation’’ for this Act, 

22 submitted for printing in the Congressional Record by the 

23 Chairman of the Senate Budget Committee, provided that 

24 such statement has been submitted prior to the vote on pas25 sage. 


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Calendar No. 579 

113TH CONGRESS 

2D SESSION S. 1217 

A BILL 

To provide secondary mortgage market reform, and 

S

for other purposes. 

EPTEMBER 18, 2014 

Reported with an amendment 


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