I 

113TH CONGRESS 

1ST SESSION H. R. 3550 

To stabilize the housing and banking sectors by eliminating policies that 

distort markets and facilitate risky lending, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 20, 2013 

Mr. AMASH (for himself, Mr. DUNCAN of South Carolina, Mr. JORDAN, Mr. 

LAMBORN, Mr. MCCLINTOCK, Mr. MEADOWS, Mr. PRICE of Georgia, and 

Mr. SALMON) introduced the following bill; which was referred to the 

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

Appropriations, Science, Space, and Technology, Transportation and Infrastructure, and the Judiciary, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions 

as fall within the jurisdiction of the committee concerned 

A BILL 

To stabilize the housing and banking sectors by eliminating 

policies that distort markets and facilitate risky lending, 

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 AND TABLE OF CONTENTS. 

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

5 ‘‘New Fair Deal Banking and Housing Stability Act of 

6 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 and table of contents. 

TITLE I—REDUCING RISKY LENDING AND HOUSING MARKET 

INSTABILITY 

Subtitle A—Withdrawing Failed Government Mortgage Corporations 

PART 1—IMMEDIATE REFORMS OF GOVERNMENT-SPONSORED CORPORATIONS

Sec. 101. Repeal of housing goals for enterprises. 

Sec. 102. Repeal of Housing Trust Fund. 

Sec. 103. Repeal of Capital Magnet Fund. 

Sec. 104. Limitation on enterprise mortgage purchases. 

Sec. 105. Repeal of banking agencies’ authority relating Freddie Mac transactions. 

PART 2—MAKING SPACE FOR PRIVATE SECONDARY MARKETS

Sec. 111. Reduction of enterprise conforming loan limits. 

Sec. 112. Loan-to-value limitation on enterprise mortgage purchases. 

Sec. 113. Increased capital standards for enterprises. 

Sec. 114. Enterprise portfolio limitations. 

PART 3—ABOLITION OF FANNIE MAE AND FREDDIE MAC

Sec. 121. Abolishment of enterprises. 

Subtitle B—Termination of Insurance for Banks’ Mortgage Lending 

PART 1—IMMEDIATE REFORMS OF FHA CREDIT PROGRAMS

Sec. 131. FHA lender repurchase requirement. 

Sec. 132. Prohibition of FHA mortgage insurance for cash-out refinancings. 

Sec. 133. FHA limitation on seller concessions. 

PART 2—REDUCING TAXPAYER GUARANTEES OF MORTGAGES

Sec. 141. Reduction of FHA mortgage insurance coverage. 

Sec. 142. Increase in FHA downpayment requirement. 

PART 3—TERMINATION OF FHA CREDIT GUARANTEES

Sec. 151. Termination of FHA insurance authority. 

Subtitle C—Ending Guarantees for Government Mortgage-Backed Securities 

Sec. 161. Limitation on GNMA guarantees. 

Sec. 162. Abolishment of Ginnie Mae. 

Subtitle D—Repealing Regulations That Promote Risky Lending 

Sec. 171. Repeal of the Community Reinvestment Act of 1977. 

Sec. 172. Repeal of Dodd-Frank credit risk retention provisions. 

Sec. 173. Repeal of Dodd-Frank ability to repay and qualified mortgage provisions. 


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Sec. 174. Repeal of the Home Mortgage Disclosure Act of 1975. 

Sec. 175. Repeal of Federal Home Loan Banks Affordable Housing Program 

and housing goals. 

Sec. 176. Repeal of FDIC Affordable Housing Program. 

Subtitle E—Stopping Subsidies for Certain Obstacles to Housing Construction 

Sec. 181. Repeal of transportation planning provisions; rescission. 

Sec. 182. Termination of HUD sustainable communities initiatives; rescission. 

TITLE II—ENDING BANK BAILOUTS AND RESTORING MARKET 

DISCIPLINE 

Subtitle A—Reducing Risks to Bank Depositors and Other Creditors 

Sec. 201. Capital requirements. 

Sec. 202. FDIC insurance. 

Subtitle B—Repeal of Bailout Authorities 

Sec. 211. Repeal of FDIC powers under the systemic risk determination. 

Sec. 212. Repeal of unusual and exigent authority of the Federal Reserve. 

Sec. 213. Exchange Stabilization Fund. 

Subtitle C—Bankruptcy, Not Bailouts, for Complex Financial Institutions 

Sec. 221. Reforming the bankruptcy code to accommodate failing financial institutions. 

1 TITLE I—REDUCING RISKY 

2 LENDING AND HOUSING MAR3 KET INSTABILITY 

4 Subtitle A—Withdrawing Failed 

5 Government Mortgage Corpora6 tions 

7 PART 1—IMMEDIATE REFORMS OF 

8 GOVERNMENT-SPONSORED CORPORATIONS 

9 SEC. 101. REPEAL OF HOUSING GOALS FOR ENTERPRISES. 

10 (a) REPEAL.—The Federal Housing Enterprises Fi11 nancial Safety and Soundness Act of 1992 is amended by 

12 striking sections 1331 through 1336 (12 U.S.C. 4561–6). 


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1 (b) CONFORMING AMENDMENTS.—Federal Housing 

2 Enterprises Financial Safety and Soundness Act of 1992 

3 is amended— 

4 (1) in section 1303(28) (12 U.S.C. 4502(28)), 

5 by striking ‘‘, and, for the purposes’’ and all that 

6 follows through ‘‘designated disaster areas’’; 

7 (2) in section 1324(b)(1)(A) (12 U.S.C. 

8 4544(b)(1)(A)), by striking clauses (i), (ii), and (iv); 

9 (3) in section 1339(h) (12 U.S.C. 4569(h)), by 

10 striking paragraph (7); 

11 (4) in section 1341 (12 U.S.C. 4581)— 

12 (A) in subsection (a)— 

13 (i) in paragraph (1), by inserting ‘‘or’’ 

14 after the semicolon at the end; 

15 (ii) in paragraph (2), by striking the 

16 semicolon at the end and inserting a pe17 riod; and 

18 (iii) by striking paragraphs (3) and 

19 (4); and 

20 (B) in subsection (b)(2)— 

21 (i) in subparagraph (A), by inserting 

22 ‘‘or’’ after the semicolon at the end; 

23 (ii) by striking subparagraphs (B) and 

24 (C); and 


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1 (iii) by redesignating subparagraph 

2 (D) as subparagraph (B); 

3 (5) in section 1345(a) (12 U.S.C. 4585(a))— 

4 (A) in paragraph (1), by inserting ‘‘or’’ 

5 after the semicolon at the end; 

6 (B) in paragraph (2), by striking the semi7 colon at the end and inserting a period; and 

8 (C) by striking paragraphs (3) and (4); 

9 and 

10 (6) in section 1371(a)(2) (12 U.S.C. 

11 4631(a)(2)), by striking ‘‘with any housing goal es12 tablished under subpart B of part 2 of subtitle A of 

13 this title, with section 1336 or 1337 of this title,’’. 

14 (c) REPEAL OF REPORTING REQUIREMENTS.— 

15 (1) FANNIE MAE.—Section 309 of the Federal 

16 National Mortgage Association Charter Act (12 

17 U.S.C. 1723a) is amended by striking subsection 

18 (n). 

19 (2) FREDDIE MAC.—Section 307 of the Federal 

20 Home Loan Mortgage Corporation Act (12 U.S.C. 

21 1456) is amended by striking subsection (f). 

22 (d) TERMINATION OF AFFORDABLE HOUSING ADVI23 SORY COUNCILS.— 

24 (1) FANNIE MAE.—Section 309 of the Federal 

25 National Mortgage Association Charter Act (12 


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1 U.S.C. 1723a) is amended by striking subsection 

2 (o). 

3 (2) FREDDIE MAC.—Section 307 of the Federal 

4 Home Loan Mortgage Corporation Act (12 U.S.C. 

5 1456) is amended by striking subsection (g). 

6 SEC. 102. REPEAL OF HOUSING TRUST FUND. 

7 (a) REPEAL.—The Federal Housing Enterprises Fi8 nancial Safety and Soundness Act of 1992 is amended by 

9 striking sections 1337 and 1338 (12 U.S.C. 4567, 4568). 

10 (b) CONFORMING AMENDMENTS.— 

11 (1) FEDERAL HOUSING ENTERPRISES FINAN12 CIAL SAFETY AND SOUNDNESS ACT OF 1992.—The 

13 Federal Housing Enterprises Financial Safety and 

14 Soundness Act of 1992 is amended— 

15 (A) in section 1324(b)(1)(A) (12 U.S.C. 

16 4544(b)(1)(A)), as amended by the preceding 

17 provisions of this Act— 

18 (i) by striking clause (iii); 

19 (ii) by striking the dash after ‘‘which’’ 

20 and inserting the text of clause (v) and a 

21 period; and 

22 (iii) by striking clause (v); 

23 (B) in section 1339(b)— 

24 (i) by striking paragraph (1); 


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1 (ii) by striking the dash after ‘‘consist 

2 of’’ and inserting the text of paragraph (2) 

3 and a period; and 

4 (iii) by striking paragraph (2); and 

5 (C) in section 1345 (12 U.S.C. 4585), by 

6 striking subsection (f). 

7 (2) HOPE FOR HOMEOWNERS PROGRAM.—Sec8 tion 257(w) of the National Housing Act (12 U.S.C. 

9 1715z–23(w)) is amended— 

10 (A) by striking paragraphs (2) and (3); 

11 and 

12 (B) by redesignating paragraph (4) as 

13 paragraph (2). 

14 SEC. 103. REPEAL OF CAPITAL MAGNET FUND. 

15 (a) USE OF FUNDS.—Immediately upon the enact16 ment of this Act, any amounts in the Capital Magnet 

17 Fund established under section 1339 of the Federal Hous18 ing Enterprises Financial Safety and Soundness Act of 

19 1992 (12 U.S.C. 4569) shall be available to the Secretary 

20 of the Treasury for use only for reducing the budget def21 icit of the Federal Government. 

22 (b) REPEAL AND ABOLISHMENT OF FUND.—Section 

23 1339 of the Federal Housing Enterprises Financial Safety 

24 and Soundness Act of 1992 (12 U.S.C. 4569) is hereby 


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1 repealed and the Capital Magnet Fund established under 

2 such section is abolished. 

3 (c) CONFORMING AMENDMENT.—Section 1303(24) 

4 of the Federal Housing Enterprises Financial Safety and 

5 Soundness Act of 1992 (12 U.S.C. 4502(24)) is amended 

6 by striking subparagraph (B). 

7 SEC. 104. LIMITATION ON ENTERPRISE MORTGAGE PUR8 CHASES. 

9 (a) FANNIE MAE.—Section 302(b) of the Federal 

10 National Mortgage Association Charter Act (12 U.S.C. 

11 1717(b)) is amended by adding at the end the following 

12 new paragraph: 

13 ‘‘(7) The corporation may only purchase, make com14 mitments to purchase, service, sell, lend on the security 

15 of, or otherwise deal in a mortgage on a property com16 prising 1- to 4-family dwelling units that— 

17 ‘‘(A) bears interest at a rate that is fixed for 

18 the entire term of the mortgage; and 

19 ‘‘(B) is made— 

20 ‘‘(i) to finance the purchase of such prop21 erty that shall be occupied by the mortgagor as 

22 the mortgagor’s principal residence; or 

23 ‘‘(ii) to prepay or pay off the outstanding 

24 principal obligation under an existing mortgage 

25 or loan secured by the same property, which is 


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1 occupied by the mortgagor as the mortgagor’s 

2 principal residence, but not including a mort3 gage under which any portion of the mortgage 

4 proceeds are used for any purpose other than to 

5 prepay or pay off such existing mortgage or for 

6 any settlement costs in connection with such 

7 mortgage, as determined in accordance with 

8 guidelines issued by the Director.’’. 

9 (b) FREDDIE MAC.—Section 305(a) of the Federal 

10 Home Loan Mortgage Corporation Act (12 U.S.C. 

11 1454(a)) is amended by adding at the end the following 

12 new paragraph: 

13 ‘‘(6) The Corporation may only purchase, make com14 mitments to purchase, service, sell, lend on the security 

15 of, or otherwise deal in a mortgage on a property com16 prising 1- to 4-family dwelling units that— 

17 ‘‘(A) bears interest at a rate that is fixed for 

18 the entire term of the mortgage; and 

19 ‘‘(B) is made— 

20 ‘‘(i) to finance the purchase of such prop21 erty that shall be occupied by the mortgagor as 

22 the mortgagor’s principal residence; or 

23 ‘‘(ii) to prepay or pay off the outstanding 

24 principal obligation under an existing mortgage 

25 or loan secured by the same property, which is 


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1 occupied by the mortgagor as the mortgagor’s 

2 principal residence, but not including a mort3 gage under which any portion of the mortgage 

4 proceeds are used for any purpose other than to 

5 prepay or pay off such existing mortgage or for 

6 any settlement costs in connection with such 

7 mortgage, as determined in accordance with 

8 guidelines issued by the Director.’’. 

9 SEC. 105. REPEAL OF BANKING AGENCIES’ AUTHORITY RE10 LATING FREDDIE MAC TRANSACTIONS. 

11 Section 305 of the Federal Home Loan Mortgage 

12 Corporation Act (12 U.S.C. 1454) is amended by striking 

13 subsection (b). 

14 PART 2—MAKING SPACE FOR PRIVATE 

15 SECONDARY MARKETS 

16 SEC. 111. REDUCTION OF ENTERPRISE CONFORMING LOAN 

17 LIMITS. 

18 (a) FANNIE MAE.—Paragraph (2) of section 302(b) 

19 of the Federal National Mortgage Association Charter Act 

20 (12 U.S.C. 1717(b)(2)) is amended by striking the 7th 

21 through 11th sentences and inserting the following: ‘‘Such 

22 limitations shall not exceed $417,000 for a mortgage se23 cured by a single-family residence, $533,850 for a mort24 gage secured by a 2-family residence, $645,300 for a 

25 mortgage secured by a 3-family residence, and $801,950 


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1 for a mortgage secured by a 4-family residence, except 

2 that such maximum limitations shall be adjusted effective 

3 January 1 of each year beginning after the effective date 

4 of the New Fair Deal Banking and Housing Stability Act 

5 of 2013, subject to the limitations in this paragraph. Each 

6 adjustment shall be made by subtracting from such 

7 amount (as it may have been previously adjusted) an 

8 amount equal to 20 percent thereof.’’. 

9 (b) FREDDIE MAC.—Paragraph (2) of section 305(a) 

10 of the Federal Home Loan Mortgage Corporation Act (12 

11 U.S.C. 1454(a)(2)) is amended by striking the 6th 

12 through 10th sentences and inserting the following: ‘‘Such 

13 limitations 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 effective date 

20 of the New Fair Deal Banking and Housing Stability Act 

21 of 2013, subject to the limitations in this paragraph. Each 

22 adjustment shall be made by subtracting from such 

23 amount (as it may have been previously adjusted) an 

24 amount equal to 20 percent thereof.’’. 


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1 SEC. 112. LOAN-TO-VALUE LIMITATION ON ENTERPRISE 

2 MORTGAGE PURCHASES. 

3 (a) FANNIE MAE.—Section 302(b) of the Federal 

4 National Mortgage Association Charter Act (12 U.S.C. 

5 1717(b)) is amended by adding at the end the following 

6 new paragraph: 

7 ‘‘(7) Notwithstanding any other provision of law, the 

8 corporation may not purchase, or make commitments to 

9 purchase, any mortgage on a 1- to 4-family residence if 

10 the outstanding principal balance of the mortgage at the 

11 time of purchase exceeds 95.0 percent of the value of the 

12 property securing the mortgage, except that such percent13 age shall be adjusted effective January 1 of each year be14 ginning after the effective date of the New Fair Deal 

15 Banking and Housing Stability Act of 2013, by reducing 

16 such percentage by 1.5 percentage points.’’. 

17 (b) FREDDIE MAC.—Section 3052(a) of the Federal 

18 Home Loan Mortgage Corporation Act (12 U.S.C. 

19 1454(a)) is amended by adding at the end the following 

20 new paragraph: 

21 ‘‘(6) Notwithstanding any other provision of law, the 

22 Corporation may not purchase, or make commitments to 

23 purchase, any mortgage on a 1- to 4-family residence if 

24 the outstanding principal balance of the mortgage at the 

25 time of purchase exceeds 95.0 percent of the value of the 

26 property securing the mortgage, except that such percentVerDate Mar 15 2010 18:25 Nov 21, 2013 Jkt 039200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H3550.IH H3550

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1 age shall be adjusted effective January 1 of each year be2 ginning after the effective date of the New Fair Deal 

3 Banking and Housing Stability Act of 2013, by reducing 

4 such percentage by 1.5 percentage points.’’. 

5 SEC. 113. INCREASED CAPITAL STANDARDS FOR ENTER6 PRISES. 

7 (a) TERMINATION OF RISK-BASED STANDARD.— 

8 (1) IN GENERAL.—Section 1361 of the Federal 

9 Housing Enterprises Financial Safety and Sound10 ness Act of 1992 (12 U.S.C. 4611) is amended— 

11 (A) in the section heading, by striking 

12 ‘‘RISK-BASED’’; and 

13 (B) in subsection (a)(1), by striking ‘‘risk14 based’’ and inserting ‘‘non-risk-based’’. 

15 (2) CONFORMING AMENDMENTS.—Subtitle B of 

16 the Federal Housing Enterprises Financial Safety 

17 and Soundness Act of 1992 is amended by striking 

18 ‘‘risk-based’’ each place such term appears in the 

19 following sections and inserting ‘‘required’’: 

20 (A) Section 1364(a) (12 U.S.C. 4614(a)). 

21 (B) Section 1366(a)(2)(B) (12 U.S.C. 

22 4616(a)(2)(B)). 

23 (C) Section 1369C(a) (12 U.S.C. 4622(a)). 

24 (b) INCREASE IN MINIMUM CAPITAL LEVELS.—Sec25 tion 1362(a) of the Federal Housing Enterprises FinanVerDate Mar 15 2010 18:25 Nov 21, 2013 Jkt 039200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\H3550.IH H3550

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1 cial Safety and Soundness Act of 1992 (12 U.S.C. 

2 4612(a)) is amended— 

3 (1) in paragraph (1), by inserting before the 

4 semicolon at the end the following: ‘‘; except that 

5 such percentage shall be adjusted effective January 

6 1 of each year beginning after the effective date of 

7 the New Fair Deal Banking and Housing Stability 

8 Act of 2013, by increasing such percentage (as it 

9 may have been previously adjusted) by 0.7 percent10 age points’’; 

11 (2) in paragraph (2), by inserting before ‘‘; 

12 and’’ the following: ‘‘; except that such percentage 

13 shall be adjusted effective January 1 of each year 

14 beginning after the effective date of the New Fair 

15 Deal Banking and Housing Stability Act of 2013, by 

16 increasing such percentage (as it may have been pre17 viously adjusted) by 0.15 percentage points’’; and 

18 (3) in paragraph (3), by inserting before the pe19 riod at the end the following: ‘‘; and except that 

20 such percentage shall be adjusted effective January 

21 1 of each year beginning after the effective date of 

22 the New Fair Deal Banking and Housing Stability 

23 Act of 2013, by increasing such percentage (as it 

24 may have been previously adjusted) by 0.15 percent25 age points’’. 


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1 (c) INCREASE IN CRITICAL CAPITAL LEVELS.—Sec2 tion 1363(a) of the Federal Housing Enterprises Finan3 cial Safety and Soundness Act of 1992 (12 U.S.C. 

4 4613(a)) is amended— 

5 (1) in paragraph (1), by inserting before the 

6 semicolon at the end the following: ‘‘; except that 

7 such percentage shall be adjusted effective January 

8 1 of each year beginning after the effective date of 

9 the New Fair Deal Banking and Housing Stability 

10 Act of 2013, by increasing such percentage (as it 

11 may have been previously adjusted) by 0.7 percent12 age points’’; 

13 (2) in paragraph (2), by inserting before ‘‘; 

14 and’’ the following: ‘‘; except that such percentage 

15 shall be adjusted effective January 1 of each year 

16 beginning after the effective date of the New Fair 

17 Deal Banking and Housing Stability Act of 2013, by 

18 increasing such percentage (as it may have been pre19 viously adjusted) by 0.15 percentage points’’; and 

20 (3) in paragraph (3), by inserting before the pe21 riod at the end the following: ‘‘; and except that 

22 such percentage shall be adjusted effective January 

23 1 of each year beginning after the effective date of 

24 the New Fair Deal Banking and Housing Stability 

25 Act of 2013, by increasing such percentage (as it 


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1 may have been previously adjusted) by 0.15 percent2 age points’’. 

3 SEC. 114. ENTERPRISE PORTFOLIO LIMITATIONS. 

4 The Housing and Community Development Act of 

5 1992 (12 U.S.C. 4611 et seq.) is amended by striking sec6 tion 1369E (12 U.S.C. 4624) and inserting the following 

7 new section: 

8 ‘‘SEC. 1369E. RESTRICTION ON MORTGAGE ASSETS OF EN9 TERPRISES. 

10 ‘‘(a) RESTRICTION.—No enterprise shall own, as of 

11 any applicable date in this subsection or thereafter, mort12 gage assets in excess of— 

13 ‘‘(1) as of December 31, 2013, 

14 $550,000,000,000; or 

15 ‘‘(2) as of December 31 of each year thereafter, 

16 80 percent of the aggregate amount of mortgage as17 sets that the enterprise was permitted to own pursu18 ant to this section as of December 31 of the imme19 diately preceding calendar year. 

20 ‘‘(b) DEFINITION OF MORTGAGE ASSETS.—For pur21 poses of this section, the term ‘mortgage assets’ means, 

22 with respect to an enterprise, assets of such enterprise 

23 consisting of mortgages, mortgage loans, mortgage-related 

24 securities, participation certificates, mortgage-backed 

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1 vestment conduits and similar assets, in each case to the 

2 extent such assets would appear on the balance sheet of 

3 such enterprise in accordance with generally accepted ac4 counting principles in effect in the United States as of 

5 September 7, 2008 (as set forth in the opinions and pro6 nouncements of the Accounting Principles Board and the 

7 American Institute of Certified Public Accountants and 

8 statements and pronouncements of the Financial Account9 ing Standards Board from time to time; and without giv10 ing any effect to any change that may be made after Sep11 tember 7, 2008, in respect of Statement of Financial Ac12 counting Standards No. 140 or any similar accounting 

13 standard).’’. 

14 PART 3—ABOLITION OF FANNIE MAE AND 

15 FREDDIE MAC 

16 SEC. 121. ABOLISHMENT OF ENTERPRISES. 

17 (a) REPEAL OF CHARTERS.— 

18 (1) FANNIE MAE.—Effective upon the expira19 tion of the 5-year period beginning on the date of 

20 the enactment of this Act, the Federal National 

21 Mortgage Association Charter Act (12 U.S.C. 1716 

22 et seq.) is repealed and the Federal National Mort23 gage Association shall have no authority to conduct 

24 new business under such charter, except that the 

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1 fore such repeal shall continue to apply with respect 

2 to the rights and obligations of any holders of— 

3 (A) outstanding debt obligations of the 

4 Federal National Mortgage Association, includ5 ing any— 

6 (i) bonds, debentures, notes, or other 

7 similar instruments; 

8 (ii) capital lease obligations; or 

9 (iii) obligations in respect of letters of 

10 credit, bankers’ acceptances, or other simi11 lar instruments; or 

12 (B) mortgage-backed securities guaranteed 

13 by the Federal National Mortgage Association. 

14 (2) FREDDIE MAC.—Effective upon the expira15 tion of the 5-year period beginning on the date of 

16 the enactment of this Act, the Federal Home Loan 

17 Mortgage Corporation Act (12 U.S.C. 1451 et seq.) 

18 is repealed and the Federal Home Loan Mortgage 

19 Corporation shall have no authority to conduct new 

20 business under such charter, except that the provi21 sions of such charter in effect immediately before 

22 such repeal shall continue to apply with respect to 

23 the rights and obligations of any holders of— 


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1 (A) outstanding debt obligations of the 

2 Federal Home Loan Mortgage Corporation, in3 cluding any— 

4 (i) bonds, debentures, notes, or other 

5 similar instruments; 

6 (ii) capital lease obligations; or 

7 (iii) obligations in respect of letters of 

8 credit, bankers’ acceptances, or other simi9 lar instruments; or 

10 (B) mortgage-backed securities guaranteed 

11 by the Federal Home Loan Mortgage Corpora12 tion. 

13 (3) EXISTING GUARANTEE OBLIGATIONS.— 

14 (A) EXPLICIT GUARANTEE.—The full faith 

15 and credit of the United States is pledged to 

16 the payment of all amounts which may be re17 quired to be paid under any obligation de18 scribed under paragraphs (1) and (2). 

19 (B) APPLICABILITY.—Except for amounts 

20 determined necessary for use for winding up the 

21 affairs of the enterprises pursuant to subsection 

22 (b), all guarantee fee amounts derived from the 

23 mortgage guarantee business of the enterprises 

24 in existence as of the expiration of the 5-year 

25 period beginning on the date of the enactment 


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1 of this Act shall be deposited into the Treasury 

2 of the United States, for purposes of deficit re3 duction. 

4 (b) WIND-DOWN OF ENTERPRISES.— 

5 (1) TERMINATION OF CURRENT CONSERVATOR6 SHIP.—Upon the expiration of the 5-year period be7 ginning on the date of the enactment of this Act, the 

8 Director of the Federal Housing Finance Agency 

9 shall, with respect to each enterprise, appoint the 

10 Federal Housing Finance Agency as receiver under 

11 section 1367 of the Federal Housing Enterprises Fi12 nancial Safety and Soundness Act of 1992 and carry 

13 out such receivership under the authority of such 

14 section and in accordance with this Act and any 

15 amendments made by this Act. 

16 (2) WIND DOWN.—During the 5-year period 

17 that begins upon the date of the enactment of this 

18 Act, the Director of the Federal Housing Finance 

19 Agency, in consultation with the Secretary of the 

20 Treasury, shall take such action, and may prescribe 

21 such regulations and procedures, as may be nec22 essary and consistent with the receiverships pursu23 ant to paragraph (1) to wind down the operations of 

24 the enterprises in an orderly manner that complies 


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1 with the requirements of this Act and any amend2 ments made by this Act. 

3 (3) DIVISION OF ASSETS AND LIABILITIES; AU4 THORITY TO ESTABLISH HOLDING CORPORATION

5 AND DISSOLUTION TRUST FUND.—The action and 

6 procedures required under paragraph (2)— 

7 (A) shall include the establishment and 

8 execution of plans to provide for an equitable 

9 division, distribution, and liquidation of the as10 sets and liabilities of each enterprise, including 

11 any infrastructure, property, including intellec12 tual property, platforms, or any other thing or 

13 object of value, provided that such plans shall— 

14 (i) provide for the sale, at auction, of 

15 the servicing rights to mortgages guaran16 teed by an enterprise under terms that en17 sure that a purchaser of such servicing 

18 rights shall assume a first loss position in 

19 the event of a default under such a mort20 gage in an amount equal to 20 percent of 

21 the aggregate amount of such loss and the 

22 Federal Government shall be liable to the 

23 purchaser for the remainder of such loss; 


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1 (ii) provide for the sale, at auction, of 

2 any other assets of an enterprise having 

3 value; and 

4 (iii) comply with the requirements of 

5 this Act and any amendments made by 

6 this Act; 

7 (B) may provide for establishment of a 

8 holding corporation organized under the laws of 

9 any State of the United States or the District 

10 of Columbia for the purpose of winding down 

11 an enterprise; and 

12 (C) shall provide for establishment of one 

13 or more trusts to which to transfer— 

14 (i) outstanding debt obligations of an 

15 enterprise; or 

16 (ii) outstanding mortgages held for 

17 the purpose of collateralizing mortgage18 backed securities guaranteed by an enter19 prise. 

20 (c) CONFORMING AMENDMENTS TO FEDERAL HOME

21 LOAN BANK ACT.—Effective upon the expiration of the 

22 5-year period that begins on the date of the enactment 

23 of this Act, the Federal Home Loan Bank Act is amend24 ed— 


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1 (1) in section 10(a)(3)(B) (12 U.S.C. 

2 1430(a)(3)(B)), by striking ‘‘(including without limi3 tation, mortgage-backed securities issued or guaran4 teed by the Federal Home Loan Mortgage Corpora5 tion, the Federal National Mortgage Corporation, 

6 and the Government National Mortgage Associa7 tion)’’; and 

8 (2) in section 16(a) (12 U.S.C. 1436(a)), by 

9 striking ‘‘, in obligations, participations, or other in10 struments’’ and all that follows through ‘‘section 

11 306 of the Federal Home Loan Mortgage Corpora12 tion Act,’’. 

13 Subtitle B—Termination of Insur14 ance for Banks’ Mortgage Lend15 ing 

16 PART 1—IMMEDIATE REFORMS OF FHA CREDIT 

17 PROGRAMS 

18 SEC. 131. FHA LENDER REPURCHASE REQUIREMENT. 

19 Title II of the National Housing Act (12 U.S.C. 1707 

20 et seq.) is amended by adding at the end the following 

21 new section: 

22 ‘‘SEC. 259. LENDER REPURCHASE REQUIREMENT. 

23 ‘‘The Secretary may not newly insure any mortgage 

24 on a 1- to 4-family residential property unless the mort25 gagee under such mortgage enters into such binding 


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1 agreements as the Secretary considers necessary to ensure 

2 that, if the mortgagor is in default with respect to the 

3 mortgagor’s obligation to make payments under the mort4 gage for 30 or more consecutive days during the 6-month 

5 period beginning upon origination of the mortgage, the 

6 mortgagee will, upon notice by the Secretary, repurchase 

7 such mortgage in an amount equal to the remaining prin8 cipal obligation under the mortgage, as determined in ac9 cordance with guidelines issued by the Secretary.’’. 

10 SEC. 132. PROHIBITION OF FHA MORTGAGE INSURANCE 

11 FOR CASH-OUT REFINANCINGS. 

12 Title II of the National Housing Act (12 U.S.C. 1707 

13 et seq.), as amended by the preceding provisions of this 

14 Act, is further amended by adding at the end the following 

15 new section: 

16 ‘‘SEC. 260. PROHIBITION OF CASH-OUT REFINANCINGS. 

17 ‘‘The Secretary may not newly insure any mortgage 

18 on a 1- to 4-family residential property under which— 

19 ‘‘(1) a portion of the mortgage proceeds are 

20 used to prepay or pay off the outstanding principal 

21 obligation under an existing mortgage or loan se22 cured by the same residential property; and 

23 ‘‘(2) any portion of the mortgage proceeds are 

24 used for any purpose other than to prepay or pay off 

25 such existing mortgage and for any settlement costs 


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1 in connection with such mortgage, as determined in 

2 accordance with guidelines issued by the Secretary.’’. 

3 SEC. 133. FHA LIMITATION ON SELLER CONCESSIONS. 

4 Title II of the National Housing Act (12 U.S.C. 1707 

5 et seq.), as amended by the preceding provisions of this 

6 Act, is further amended by adding at the end the following 

7 new section: 

8 ‘‘SEC. 261. LIMITATION ON SELLER CONCESSIONS. 

9 ‘‘The Secretary may not newly insure any mortgage 

10 on a 1- to 4-family residential property with respect to 

11 which the seller of the property subject to such mortgage 

12 (or any third party or entity that is reimbursed directly 

13 or indirectly by the seller) contributes toward the acquisi14 tion of the property by the mortgagor any amount in ex15 cess of 3 percent of the total closing costs (as determined 

16 by the Secretary) in connection with such acquisition.’’. 

17 PART 2—REDUCING TAXPAYER GUARANTEES OF 

18 MORTGAGES 

19 SEC. 141. REDUCTION OF FHA MORTGAGE INSURANCE COV20 ERAGE. 

21 Title II of the National Housing Act (12 U.S.C. 1707 

22 et seq.), as amended by the preceding provisions of this 

23 Act, is further amended by adding at the end the following 

24 new section: 


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1 ‘‘SEC. 262. REDUCTION OF MORTGAGE INSURANCE COV2 ERAGE. 

3 ‘‘Notwithstanding any other provision of this title, 

4 the Secretary may not insure, or make any commitment 

5 to insure, any portion of any mortgage on a 1- to 4-family 

6 residential property in excess of the amount equal to the 

7 following percentage of the original principal obligation of 

8 the mortgage: 

9 ‘‘(1) In the case of any such mortgage insured 

10 after the date of the enactment of the New Fair 

11 Deal Banking and Housing Stability Act of 2013, 

12 80 percent of such original principal obligation, sub13 ject to paragraphs (2) through (5). 

14 ‘‘(2) In the case of any such mortgage insured 

15 after the expiration of the 1-year period beginning 

16 on the date of the enactment of such Act, 70 percent 

17 of such original principal obligation, subject to para18 graphs (3) through (5). 

19 ‘‘(3) In the case of any such mortgage insured 

20 after the expiration of the 2-year period beginning 

21 on the date of the enactment of such Act, 60 percent 

22 of such original principal obligation, subject to para23 graphs (4) through (5). 

24 ‘‘(4) In the case of any such mortgage insured 

25 after the expiration of the 3-year period beginning 

26 on the date of the enactment of such Act, 50 percent 


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1 of such original principal obligation, subject to para2 graph (5). 

3 ‘‘(5) In the case of any such mortgage insured 

4 after the expiration of the 4-year period beginning 

5 on the date of the enactment of such Act, 40 percent 

6 of such original principal obligation.’’. 

7 SEC. 142. INCREASE IN FHA DOWNPAYMENT REQUIRE8 MENT. 

9 Subparagraph (A) of section 203(b)(9) of the Na10 tional Housing Act (12 U.S.C. 1709(b)(9)(A)) is amend11 ed— 

12 (1) by striking ‘‘(A) IN GENERAL.—A mort13 gage’’ and inserting the following: 

14 ‘‘(A) IN GENERAL.— 

15 ‘‘(i) PAYMENT REQUIREMENT.—A 

16 mortgage’’; 

17 (2) by striking ‘‘3.5 percent of the appraised 

18 value of the property’’ and inserting ‘‘the percentage 

19 of the appraised value of the property specified in 

20 clause (ii)’’; and 

21 (3) by adding at the end the following new 

22 clause: 

23 ‘‘(ii) PERCENTAGE OF APPRAISED

24 VALUE OF PROPERTY.—The percentage of 


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1 the appraised value of a property specified 

2 in this clause is— 

3 ‘‘(I) for a mortgage insured 

4 under this section after the date of 

5 the enactment of the New Fair Deal 

6 Banking and Housing Stability Act of 

7 2013, 5.0 percent, subject to sub8 clauses (II) through (V); 

9 ‘‘(II) for a mortgage insured 

10 under this section after the expiration 

11 of the 1-year period beginning on the 

12 date of the enactment of the New 

13 Fair Deal Banking and Housing Sta14 bility Act of 2013, 6.5 percent, sub15 ject to subclauses (III) through (V); 

16 ‘‘(III) for a mortgage insured 

17 under this section after the expiration 

18 of the 2-year period beginning on the 

19 date of the enactment of the New 

20 Fair Deal Banking and Housing Sta21 bility Act of 2013, 8.0 percent, sub22 ject to subclauses (IV) and (V); 

23 ‘‘(IV) for a mortgage insured 

24 under this section after the expiration 

25 of the 3-year period beginning on the 


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1 date of the enactment of the New 

2 Fair Deal Banking and Housing Sta3 bility Act of 2013, 9.5 percent, sub4 ject to subclause (V); and 

5 ‘‘(V) for a mortgage insured 

6 under this section after the expiration 

7 of the 4-year period beginning on the 

8 date of the enactment of the New 

9 Fair Deal Banking and Housing Sta10 bility Act of 2013, 11.0 percent.’’. 

11 PART 3—TERMINATION OF FHA CREDIT 

12 GUARANTEES 

13 SEC. 151. TERMINATION OF FHA INSURANCE AUTHORITY. 

14 (a) TERMINATION.—Effective upon the expiration of 

15 the 5-year period beginning on the date of the enactment 

16 of this Act, the Secretary of Housing and Urban Develop17 ment may not insure, guarantee, or make any mortgage 

18 or other loan pursuant to any of the following provisions 

19 of law: 

20 (1) NATIONAL HOUSING ACT.—Titles I, II, V, 

21 VI, VII, VIII, IX, and XI of the National Housing 

22 Act (12 U.S.C. 1702 et seq., 1707 et seq., 1731a et 

23 seq., 1736 et seq., 1747 et seq., 1748 et seq., 1750 

24 et seq., 1749aaa et seq.). 


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1 (2) ENERGY EFFICIENT MORTGAGES PRO2 GRAM.—Section 106 of the Energy Policy Act of 

3 1992 (12 U.S.C. 1701z–16) or section 513 of the 

4 Housing and Community Development Act of 1992 

5 (Public Law 102–550; 106 Stat. 3786). 

6 (3) FLEXIBLE SUBSIDY PROGRAM.—Section 

7 201 of the Housing and Community Development 

8 Amendments of 1978 (12 U.S.C. 1715z–1a). 

9 (4) LOAN GUARANTEES FOR INDIAN HOUS10 ING.—Section 184 of the Housing and Community 

11 Development Act of 1992 (12 U.S.C. 1715z–13a). 

12 (5) LOAN GUARANTEES FOR NATIVE HAWAIIAN

13 HOUSING.—Section 184A of the Housing and Com14 munity Development Act of 1992 (12 U.S.C. 1715z– 

15 13b). 

16 (6) MULTIFAMILY MORTGAGE CREDIT PRO17 GRAM.—Section 542 of the Housing and Community 

18 Development Act of 1992 (12 U.S.C. 1715z–22). 

19 (b) REPEALS.—Effective upon the expiration of the 

20 period referred to in subsection (a), the provisions of law 

21 specified in such subsection are repealed. 

22 (c) TRANSFER OF FHA FUNCTIONS TO SECRETARY

23 OF THE TREASURY.—Effective upon the expiration of the 

24 period referred to in subsection (a), all FHA functions are 

25 transferred to the Secretary of the Treasury, but only to 


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1 the extent necessary to fulfill outstanding obligations of 

2 the Department of Housing and Urban Development 

3 under such provisions and windup the business of the De4 partment of Housing and Urban Development under such 

5 provisions. 

6 (d) RESOLUTION AND TERMINATION OF FHA FUNC7 TIONS.— 

8 (1) RESOLUTION OF FUNCTIONS.—The Sec9 retary of the Treasury shall— 

10 (A) complete the disposition and resolution 

11 of FHA functions in accordance with this sec12 tion; and 

13 (B) resolve all FHA functions that are 

14 transferred to the Secretary under subsection 

15 (c). 

16 (2) TERMINATION OF FUNCTIONS.—All FHA 

17 functions that are transferred to the Secretary under 

18 subsection (c) shall terminate on the date all obliga19 tions of the FHA, and all obligations of others to 

20 the FHA, in effect immediately before the expiration 

21 of the period referred to in subsection (a) have been 

22 satisfied, as determined by the Secretary of the 

23 Treasury. 

24 (3) REPORT TO CONGRESS.—Upon making the 

25 determination described in paragraph (2), the SecVerDate Mar 15 2010 18:25 Nov 21, 2013 Jkt 039200 PO 00000 Frm 00031 Fmt 6652 Sfmt 6201 E:\BILLS\H3550.IH H3550

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1 retary of the Treasury shall report the determination 

2 to the Committee on Financial Services of the House 

3 of Representatives and the Committee on Banking, 

4 Housing, and Urban Affairs of the Senate. 

5 (e) DUTIES OF SECRETARY OF THE TREASURY.— 

6 (1) IN GENERAL.—The Secretary of the Treas7 ury shall be responsible for the implementation of 

8 this section, including— 

9 (A) the administration and wind-up of all 

10 FHA functions transferred to the Secretary 

11 under subsection (c); 

12 (B) the administration and wind-up of any 

13 outstanding obligations of the Federal Govern14 ment under any programs terminated by this 

15 section; and 

16 (C) taking such other actions as may be 

17 necessary to wind-up any outstanding affairs of 

18 the FHA. 

19 (f) PERSONNEL.—Effective upon the expiration of 

20 the period referred to in subsection (a), there are trans21 ferred to the Department of the Treasury all individuals, 

22 who— 

23 (1) immediately before such expiration, were of24 ficers or employees of the Department of Housing 

25 and Urban Development; and 


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1 (2) in their capacity as such an officer or em2 ployee, performed functions that are transferred to 

3 the Secretary under subsection (c). 

4 (g) EXERCISE OF AUTHORITIES.—Except as other5 wise provided by law, a Federal official to whom a function 

6 is transferred by this section, for purposes of performing 

7 the function and subject to subsection (c), exercise all au8 thorities under any other provision of law that were avail9 able with respect to the performance of that function to 

10 the official responsible for the performance of the function 

11 immediately before the effective date of the transfer of the 

12 function under this section. 

13 (h) TRANSFER OF ASSETS.—Except as otherwise 

14 provided in this section so much of the personnel, prop15 erty, records, and unexpended balances of appropriations, 

16 allocations, and other funds employed, used, held, avail17 able, or to be made available in connection with a function 

18 transferred to an official or agency by this section shall 

19 be available to the official or the head of that agency, re20 spectively, at such time or times as the Director of the 

21 Office of Management and Budget directs for use in con22 nection with the functions transferred. 

23 (i) DELEGATION AND ASSIGNMENT.—Except as oth24 erwise expressly prohibited by law, an official to whom 

25 functions are transferred under this section (including the 


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1 head of any office to which functions are transferred under 

2 this section) may delegate any of the functions so trans3 ferred to such officers and employees of the office of the 

4 official as the official may designate, and may authorize 

5 successive redelegations of such functions as may be nec6 essary or appropriate. No delegation of functions under 

7 this subsection or under any other provision of this section 

8 shall relieve the official to whom a function is transferred 

9 under this section of responsibility for the administration 

10 of the function. 

11 (j) AUTHORITY OF SECRETARY OF THE TREASURY

12 WITH RESPECT TO FUNCTIONS TRANSFERRED.— 

13 (1) DETERMINATIONS.—If necessary, the Sec14 retary of the Treasury shall make any determination 

15 of the functions that are transferred under this sec16 tion. 

17 (2) INCIDENTAL TRANSFERS.—The Secretary 

18 of the Treasury, at such time or times as the Sec19 retary shall provide, may make such determinations 

20 as may be necessary with regard to the functions 

21 transferred by this section, and to make such addi22 tional incidental dispositions of personnel, assets, li23 abilities, grants, contracts, property, records, and 

24 unexpended balances of appropriations, authoriza25 tions, allocations, and other funds held, used, arising 


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1 from, available to, or to be made available in connec2 tion with such functions, as may be necessary to 

3 carry out the provisions of this section. 

4 (k) SAVINGS PROVISIONS.— 

5 (1) AUTHORITY REGARDING OUTSTANDING

6 COMMITMENTS.—Notwithstanding the repeals under 

7 subsection (b), the Secretary may insure, guarantee, 

8 or make any mortgage for which a commitment to 

9 insure, guarantee, or make was made before the ef10 fective date of such repeals under the provision of 

11 law repealed. Any such mortgage shall be subject to 

12 the terms of the provisions of law repealed as in ef13 fect immediately before such repeal. 

14 (2) EFFECT ON OUTSTANDING MORTGAGE IN15 SURANCE.—Any mortgage insurance, funds, or ac16 tivities subject, before repeal, to a provision of law 

17 repealed by subsection (b) shall continue to be gov18 erned by the provision as in effect immediately be19 fore repeal. 

20 (3) EXISTING RIGHTS, DUTIES, AND OBLIGA21 TIONS NOT AFFECTED.—Subsections (a) and (b) 

22 shall not affect the validity of any right, duty, or ob23 ligation of the United States, the Secretary of Hous24 ing and Urban Development, or any other person, 

25 which— 


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1 (A) arises under any provision of law re2 pealed by subsection (b); and 

3 (B) existed immediately before the effective 

4 date of such repeals. 

5 (4) LEGAL DOCUMENTS.—All orders, deter6 minations, rules, regulations, permits, grants, loans, 

7 contracts, agreements, certificates, licenses, and 

8 privileges— 

9 (A) that have been issued, made, granted, 

10 or allowed to become effective by the Secretary 

11 of Housing and Urban Development, any officer 

12 or employee of any office transferred by this 

13 section, or any other Government official, or by 

14 a court of competent jurisdiction, in the per15 formance of any function that is transferred by 

16 this section, and 

17 (B) that are in effect upon the expiration 

18 of the period referred to in subsection (a) (or 

19 become effective after such date pursuant to 

20 their terms as in effect upon such expiration), 

21 shall continue in effect according to their terms 

22 until modified, terminated, superseded, set 

23 aside, or revoked in accordance with law by the 

24 President, any other authorized official, a court 

25 of competent jurisdiction, or operation of law. 


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1 (5) PROCEEDINGS.—This section shall not af2 fect any proceedings or any application for any bene3 fits, service, license, permit, certificate, or financial 

4 assistance pending upon the expiration of the period 

5 referred to in subsection (a) before an office trans6 ferred by this section, but such proceedings and ap7 plications shall be continued. Orders shall be issued 

8 in such proceedings, appeals shall be taken there9 from, and payments shall be made pursuant to such 

10 orders, as if this section had not been enacted, and 

11 orders issued in any such proceeding shall continue 

12 in effect until modified, terminated, superseded, or 

13 revoked by a duly authorized official, by a court of 

14 competent jurisdiction, or by operation of law. Noth15 ing in this paragraph shall be considered to prohibit 

16 the discontinuance or modification of any such pro17 ceeding under the same terms and conditions and to 

18 the same extent that such proceeding could have 

19 been discontinued or modified if this section had not 

20 been enacted. 

21 (6) NONABATEMENT OF ACTIONS.—No action 

22 or other proceeding commenced by or against the 

23 Secretary of Housing and Urban Development in 

24 connection with functions transferred to the Sec25 retary of the Treasury under subsection (c) shall 


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1 abate by reason of the enactment of this section, ex2 cept that the Secretary of the Treasury shall be sub3 stituted for the Secretary of Housing and Urban De4 velopment as a party to any such action or pro5 ceeding. 

6 (7) SUITS.—This section shall not affect suits 

7 commenced before the expiration of the period re8 ferred to in subsection (a), and in all such suits, 

9 proceeding shall be had, appeals taken, and judg10 ments rendered in the same manner and with the 

11 same effect as if this section had not been enacted. 

12 If any Government officer in the official capacity of 

13 such officer is party to a suit with respect to a func14 tion of the officer, and under this section such func15 tion is transferred to any other officer or office, then 

16 such suit shall be continued with the other officer or 

17 the head of such other office, as applicable, sub18 stituted or added as a party. 

19 (8) ADMINISTRATIVE PROCEDURE AND JUDI20 CIAL REVIEW.—Except as otherwise provided by this 

21 section, any statutory requirements relating to no22 tice, hearings, action upon the record, or administra23 tive or judicial review that apply to any function 

24 transferred by this section shall apply to the exercise 

25 of such function by the head of the Federal agency, 


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1 and other officers of the agency, to which such func2 tion is transferred by this section. 

3 (l) AVAILABILITY OF EXISTING FUNDS.—Existing 

4 appropriations and funds available for the performance of 

5 functions, programs, and activities terminated pursuant to 

6 this section shall remain available, for the duration of 

7 their period of availability, for necessary expenses in con8 nection with the termination and resolution of such func9 tions, programs, and activities. Upon the expiration of all 

10 contracts and agreements with respect to such functions, 

11 programs, and activities, any unexpended balances of the 

12 funds referred to in this subsection shall be deposited in 

13 the Treasury as miscellaneous receipts. 

14 (m) REFERENCES.—Any reference in any other Fed15 eral law, Executive order, rule, regulation, or delegation 

16 of authority, or any document of or pertaining to a depart17 ment or office from which a function is transferred by this 

18 section— 

19 (1) to the head of such department or office is 

20 deemed to refer to the head of the department or of21 fice to which the function is transferred; or 

22 (2) to such department or office is deemed to 

23 refer to the department or office to which the func24 tion is transferred. 


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1 (n) DEFINITIONS.—For purposes of this section, the 

2 following definitions shall apply: 

3 (1) FHA.—The term ‘‘FHA’’ means the Sec4 retary of Housing and Urban Development, but only 

5 to the extent of the operations, authority, and func6 tions of the Secretary pursuant to the provisions of 

7 law repealed by subsection (b). 

8 (2) FHA FUNCTIONS.—The term ‘‘FHA func9 tions’’ means functions under the provisions of law 

10 repealed by subsection (b) that, immediately before 

11 the effective date of such repeals, are authorized to 

12 be performed by the Secretary of Housing and 

13 Urban Development or any officer or employee of 

14 the Department of Housing and Urban Develop15 ment, or any office of the Department of Housing 

16 and Urban Development. 

17 (3) FUNCTION.—The term ‘‘function’’ includes 

18 any duty, obligation, power, authority, responsibility, 

19 right, privilege, activity, or program. 

20 (4) OFFICE.—The term ‘‘office’’ includes any 

21 office, administration, agency, bureau, institute, 

22 council, unit, organizational entity, or component 

23 thereof. 


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1 Subtitle C—Ending Guarantees for 

2 Government Mortgage-Backed 

3 Securities 

4 SEC. 161. LIMITATION ON GNMA GUARANTEES. 

5 Subsection (g) of section 306 of the Federal National 

6 Mortgage Association Charter Act (12 U.S.C. 1721(g)) is 

7 amended by adding at the end the following new para8 graph: 

9 ‘‘(4) The Association may not enter into commit10 ments to issue guarantees under this subsection in an ag11 gregate amount— 

12 ‘‘(A) in any month commencing after the date 

13 of the enactment of the New Fair Deal Banking and 

14 Housing Stability Act of 2013, that exceeds 

15 $38,000,000,000, subject to subparagraphs (B) 

16 through (F); 

17 ‘‘(B) in any month commencing after the expi18 ration of the 1-year period beginning on the date of 

19 the enactment of the New Fair Deal Banking and 

20 Housing Stability Act of 2013, that exceeds 

21 $32,000,000,000, subject to subparagraphs (C) 

22 through (F); 

23 ‘‘(C) in any month commencing after the expi24 ration of the 2-year period beginning on the date of 

25 the enactment of the New Fair Deal Banking and 


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1 Housing Stability Act of 2013, that exceeds 

2 $24,000,000,000, subject to subparagraphs (D) 

3 through (F); 

4 ‘‘(D) in any month commencing after the expi5 ration of the 3-year period beginning on the date of 

6 the enactment of the New Fair Deal Banking and 

7 Housing Stability Act of 2013, that exceeds 

8 $16,000,000,000, subject to subparagraphs (E) and 

9 (F); 

10 ‘‘(E) in any month commencing after the expi11 ration of the 4-year period beginning on the date of 

12 the enactment of the New Fair Deal Banking and 

13 Housing Stability Act of 2013, that exceeds 

14 $8,000,000,000, subject to subparagraph (F); and 

15 ‘‘(F) in any month commencing after the expi16 ration of the 5-year period beginning on the date of 

17 the enactment of the New Fair Deal Banking and 

18 Housing Stability Act of 2013, that exceeds $0.’’. 

19 SEC. 162. ABOLISHMENT OF GINNIE MAE. 

20 (a) ABOLISHMENT AND TRANSFER.—Effective upon 

21 the expiration of the 5-year period beginning on the date 

22 of the enactment of this Act— 

23 (1) the Government National Mortgage Associa24 tion is abolished; and 


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1 (2) all functions that, immediately before the 

2 expiration of such period are authorized to be per3 formed by the Association, any officer or employee 

4 of the Association acting in that capacity, or any of5 fice of the Association, are transferred to the Sec6 retary of the Treasury. 

7 (b) REPEALS.— 

8 (1) CHARTER.—For provisions repealing the or9 ganic authority of the Government National Mort10 gage Association, see section 121(a)(1) of this Act. 

11 (2) ADMINISTRATIVE EXPENSES PROVISION.— 

12 Effective upon the expiration of the period referred 

13 to in subsection (a), subsection (b) of section 306 of 

14 the Housing Act of 1959 (12 U.S.C. 1721 note) is 

15 hereby repealed. 

16 (c) RESOLUTION AND TERMINATION OF FHA FUNC17 TIONS.— 

18 (1) RESOLUTION OF FUNCTIONS.—The Sec19 retary of the Treasury shall— 

20 (A) complete the disposition and resolution 

21 of FHA functions in accordance with this sec22 tion; and 

23 (B) resolve all FHA functions that are 

24 transferred to the Secretary under subsection 

25 (a)(2). 


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1 (2) TERMINATION OF FUNCTIONS.—All FHA 

2 functions that are transferred to the Secretary under 

3 subsection (a)(2) shall terminate on the date all obli4 gations of the FHA, and all obligations of others to 

5 the FHA, in effect immediately before the expiration 

6 of the period referred to in subsection (a) have been 

7 satisfied, as determined by the Secretary of the 

8 Treasury. 

9 (3) REPORT TO CONGRESS.—Upon making the 

10 determination described in paragraph (2), the Sec11 retary of the Treasury shall report the determination 

12 to the Committee on Financial Services of the House 

13 of Representatives and the Committee on Banking, 

14 Housing, and Urban Affairs of the Senate. 

15 (d) DUTIES OF SECRETARY OF THE TREASURY.— 

16 (1) IN GENERAL.—The Secretary of the Treas17 ury shall be responsible for the implementation of 

18 this section, including— 

19 (A) the administration and wind-up of all 

20 FHA functions transferred to the Secretary 

21 under subsection (c); 

22 (B) the administration and wind-up of any 

23 outstanding obligations of the Federal Govern24 ment under any programs terminated by this 

25 section; and 


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1 (C) taking such other actions as may be 

2 necessary to wind-up any outstanding affairs of 

3 the FHA. 

4 (e) PERSONNEL.—Effective upon the expiration of 

5 the period referred to in subsection (a), there are trans6 ferred to the Department of the Treasury all individuals, 

7 who— 

8 (1) immediately before such expiration, were of9 ficers or employees of the Department of Housing 

10 and Urban Development; and 

11 (2) in their capacity as such an officer or em12 ployee, performed functions that are transferred to 

13 the Secretary under subsection (c). 

14 (f) EXERCISE OF AUTHORITIES.—Except as other15 wise provided by law, a Federal official to whom a function 

16 is transferred by this section, for purposes of performing 

17 the function, exercise all authorities under any other provi18 sion of law that were available with respect to the perform19 ance of that function to the official responsible for the per20 formance of the function immediately before the effective 

21 date of the transfer of the function under this section. 

22 (g) TRANSFER OF ASSETS.—Except as otherwise 

23 provided in this section so much of the personnel, prop24 erty, records, and unexpended balances of appropriations, 

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1 able, or to be made available in connection with a function 

2 transferred to an official or agency by this section shall 

3 be available to the official or the head of that agency, re4 spectively, at such time or times as the Director of the 

5 Office of Management and Budget directs for use in con6 nection with the functions transferred. 

7 (h) DELEGATION AND ASSIGNMENT.—Except as oth8 erwise expressly prohibited by law, an official to whom 

9 functions are transferred under this section (including the 

10 head of any office to which functions are transferred under 

11 this section) may delegate any of the functions so trans12 ferred to such officers and employees of the office of the 

13 official as the official may designate, and may authorize 

14 successive redelegations of such functions as may be nec15 essary or appropriate. No delegation of functions under 

16 this subsection or under any other provision of this section 

17 shall relieve the official to whom a function is transferred 

18 under this section of responsibility for the administration 

19 of the function. 

20 (i) AUTHORITY OF SECRETARY OF THE TREASURY

21 WITH RESPECT TO FUNCTIONS TRANSFERRED.— 

22 (1) DETERMINATIONS.—If necessary, the Sec23 retary of the Treasury shall make any determination 

24 of the functions that are transferred under this sec25 tion. 


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1 (2) INCIDENTAL TRANSFERS.—The Secretary 

2 of the Treasury, at such time or times as the Sec3 retary shall provide, may make such determinations 

4 as may be necessary with regard to the functions 

5 transferred by this section, and to make such addi6 tional incidental dispositions of personnel, assets, li7 abilities, grants, contracts, property, records, and 

8 unexpended balances of appropriations, authoriza9 tions, allocations, and other funds held, used, arising 

10 from, available to, or to be made available in connec11 tion with such functions, as may be necessary to 

12 carry out the provisions of this section. 

13 (j) SAVINGS PROVISIONS.— 

14 (1) AUTHORITY REGARDING OUTSTANDING

15 COMMITMENTS.—Notwithstanding the repeals under 

16 subsection (b), the Secretary may insure any mort17 gage for which a commitment to insure was made 

18 before the effective date of such repeals under the 

19 provision of law repealed. Any such mortgage shall 

20 be subject to the terms of the provisions of law re21 pealed as in effect immediately before such repeal. 

22 (2) EFFECT ON OUTSTANDING MORTGAGE IN23 SURANCE.—Any mortgage insurance, funds, or ac24 tivities subject, before repeal, to a provision of law 

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1 erned by the provision as in effect immediately be2 fore repeal. 

3 (3) EXISTING RIGHTS, DUTIES, AND OBLIGA4 TIONS NOT AFFECTED.—Subsections (a) and (b) 

5 shall not affect the validity of any right, duty, or ob6 ligation of the United States, the Secretary of Hous7 ing and Urban Development, or any other person, 

8 which— 

9 (A) arises under any provision of law re10 pealed by subsection (b); and 

11 (B) existed immediately before the effective 

12 date of such repeals. 

13 (4) LEGAL DOCUMENTS.—All orders, deter14 minations, rules, regulations, permits, grants, loans, 

15 contracts, agreements, certificates, licenses, and 

16 privileges— 

17 (A) that have been issued, made, granted, 

18 or allowed to become effective by the Secretary 

19 of Housing and Urban Development, any officer 

20 or employee of any office transferred by this 

21 section, or any other Government official, or by 

22 a court of competent jurisdiction, in the per23 formance of any function that is transferred by 

24 this section, and 


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1 (B) that are in effect upon the expiration 

2 of the period referred to in subsection (a) (or 

3 become effective after such date pursuant to 

4 their terms as in effect upon such expiration), 

5 shall continue in effect according to their terms 

6 until modified, terminated, superseded, set 

7 aside, or revoked in accordance with law by the 

8 President, any other authorized official, a court 

9 of competent jurisdiction, or operation of law. 

10 (5) PROCEEDINGS.—This section shall not af11 fect any proceedings or any application for any bene12 fits, service, license, permit, certificate, or financial 

13 assistance pending upon the expiration of the period 

14 referred to in subsection (a) before an office trans15 ferred by this section, but such proceedings and ap16 plications shall be continued. Orders shall be issued 

17 in such proceedings, appeals shall be taken there18 from, and payments shall be made pursuant to such 

19 orders, as if this section had not been enacted, and 

20 orders issued in any such proceeding shall continue 

21 in effect until modified, terminated, superseded, or 

22 revoked by a duly authorized official, by a court of 

23 competent jurisdiction, or by operation of law. Noth24 ing in this paragraph shall be considered to prohibit 

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1 ceeding under the same terms and conditions and to 

2 the same extent that such proceeding could have 

3 been discontinued or modified if this section had not 

4 been enacted. 

5 (6) NONABATEMENT OF ACTIONS.—No action 

6 or other proceeding commenced by or against the 

7 Secretary of Housing and Urban Development in 

8 connection with functions transferred to the Sec9 retary of the Treasury under subsection (c) shall 

10 abate by reason of the enactment of this section, ex11 cept that the Secretary of the Treasury shall be sub12 stituted for the Secretary of Housing and Urban De13 velopment as a party to any such action or pro14 ceeding. 

15 (7) SUITS.—This section shall not affect suits 

16 commenced before the expiration of the period re17 ferred to in subsection (a), and in all such suits, 

18 proceeding shall be had, appeals taken, and judg19 ments rendered in the same manner and with the 

20 same effect as if this section had not been enacted. 

21 If any Government officer in the official capacity of 

22 such officer is party to a suit with respect to a func23 tion of the officer, and under this section such func24 tion is transferred to any other officer or office, then 

25 such suit shall be continued with the other officer or 


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1 the head of such other office, as applicable, sub2 stituted or added as a party. 

3 (8) ADMINISTRATIVE PROCEDURE AND JUDI4 CIAL REVIEW.—Except as otherwise provided by this 

5 section, any statutory requirements relating to no6 tice, hearings, action upon the record, or administra7 tive or judicial review that apply to any function 

8 transferred by this section shall apply to the exercise 

9 of such function by the head of the Federal agency, 

10 and other officers of the agency, to which such func11 tion is transferred by this section. 

12 (k) AVAILABILITY OF EXISTING FUNDS.—Existing 

13 appropriations and funds available for the performance of 

14 functions, programs, and activities terminated pursuant to 

15 this section shall remain available, for the duration of 

16 their period of availability, for necessary expenses in con17 nection with the termination and resolution of such func18 tions, programs, and activities. Upon the expiration of all 

19 contracts and agreements with respect to such functions, 

20 programs, and activities, any unexpended balances of the 

21 funds referred to in this subsection shall be deposited in 

22 the Treasury as miscellaneous receipts. 

23 (l) REFERENCES.—Any reference in any other Fed24 eral law, Executive order, rule, regulation, or delegation 

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1 ment or office from which a function is transferred by this 

2 section— 

3 (1) to the head of such department or office is 

4 deemed to refer to the head of the department or of5 fice to which the function is transferred; or 

6 (2) to such department or office is deemed to 

7 refer to the department or office to which the func8 tion is transferred. 

9 (m) DEFINITIONS.—For purposes of this section, the 

10 following definitions shall apply: 

11 (1) ASSOCIATION.—The term ‘‘Association’’ 

12 means the Government National Mortgage Associa13 tion. 

14 (2) FUNCTION.—The term ‘‘function’’ includes 

15 any duty, obligation, power, authority, responsibility, 

16 right, privilege, activity, or program. 

17 (3) OFFICE.—The term ‘‘office’’ includes any 

18 office, administration, agency, bureau, institute, 

19 council, unit, organizational entity, or component 

20 thereof. 

21 (4) SECRETARY.—The term ‘‘Secretary’’ means 

22 the Secretary of the Treasury. 


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1 Subtitle D—Repealing Regulations 

2 That Promote Risky Lending 

3 SEC. 171. REPEAL OF THE COMMUNITY REINVESTMENT 

4 ACT OF 1977. 

5 The Community Reinvestment Act of 1977 (12 

6 U.S.C. 2901 et seq.) is hereby repealed. 

7 SEC. 172. REPEAL OF DODD-FRANK CREDIT RISK RETEN8 TION PROVISIONS. 

9 (a) CREDIT RISK RETENTION.—Section 15G of the 

10 Securities Exchange Act of 1934 (15 U.S.C. 78o–11) is 

11 hereby repealed. 

12 (b) STUDY.—Subsection (c) of section 941 of the 

13 Dodd-Frank Wall Street Reform and Consumer Protec14 tion Act is hereby repealed. 

15 SEC. 173. REPEAL OF DODD-FRANK ABILITY TO REPAY AND 

16 QUALIFIED MORTGAGE PROVISIONS. 

17 Section 129C of the Truth in Lending Act (15 U.S.C. 

18 1639c) is amended— 

19 (1) by striking subsections (a) and (b); and 

20 (2) by redesignating subsections (c) through (i) 

21 as subsections (a) through (g), respectively. 

22 SEC. 174. REPEAL OF THE HOME MORTGAGE DISCLOSURE 

23 ACT OF 1975. 

24 The Home Mortgage Disclosure Act of 1975 (12 

25 U.S.C. 2801 et seq.) is hereby repealed. 


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1 SEC. 175. REPEAL OF FEDERAL HOME LOAN BANKS AF2 FORDABLE HOUSING PROGRAM AND HOUS3 ING GOALS. 

4 (a) AFFORDABLE HOUSING PROGRAM.—The Federal 

5 Home Loan Bank Act (12 U.S.C. 1421 et seq.) is amend6 ed— 

7 (1) in section 10 (12 U.S.C. 1430), by striking 

8 subsections (g), (h), (i), (j), and (k); and 

9 (2) by repealing section 10b (12 U.S.C. 1430b). 

10 (b) HOUSING GOALS.—Section 10C of the Federal 

11 Home Loan Bank Act (12 U.S.C. 1430C) is hereby re12 pealed. 

13 SEC. 176. REPEAL OF FDIC AFFORDABLE HOUSING PRO14 GRAM. 

15 Section 40 of the Federal Deposit Insurance Act (12 

16 U.S.C. 1831q) is hereby repealed. 

17 Subtitle E—Stopping Subsidies for 

18 Certain Obstacles to Housing 

19 Construction 

20 SEC. 181. REPEAL OF TRANSPORTATION PLANNING PROVI21 SIONS; RESCISSION. 

22 (a) REPEALS.— 

23 (1) FEDERAL-AID HIGHWAYS.—Sections 134 

24 and 135 of title 23, United States Code, and the 

25 items relating to such sections in the analysis for 

26 chapter 1 of that title, are repealed. 


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1 (2) RESEARCH, TECHNOLOGY, AND EDU2 CATION.—Section 505 of title 23, United States 

3 Code, and the item relating to that section in the 

4 analysis for chapter 5 of that title, are repealed. 

5 (3) PUBLIC TRANSPORTATION.—Sections 5303, 

6 5304, and 5305 of title 49, United States Code, and 

7 the items relating to such sections in the analysis for 

8 chapter 53 of that title, are repealed. 

9 (b) RESCISSIONS.—Effective on the date of the enact10 ment of this Act, the unobligated balances available on 

11 such date of enactment of funds made available to carry 

12 out each of the sections repealed by this section are hereby 

13 rescinded. 

14 SEC. 182. TERMINATION OF HUD SUSTAINABLE COMMU15 NITIES INITIATIVES; RESCISSION. 

16 (a) TERMINATION.—The following programs, activi17 ties, and initiatives of the Department of Housing and 

18 Urban Development are hereby terminated: 

19 (1) SUSTAINABLE COMMUNITIES INITIATIVE.— 

20 The Sustainable Communities Initiative originally 

21 established under the heading ‘‘Community Planning 

22 and Development—Community Development Fund’’ 

23 of title II of division A of the Consolidated Appro24 priations Act, 2010 (Public Law 111–117; 123 Stat. 

25 3084). 


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1 (2) SUSTAINABLE COMMUNITIES REGIONAL

2 PLANNING GRANTS.—The Regional Integrated Plan3 ning Grants program originally established under 

4 such heading. 

5 (3) COMMUNITY CHALLENGE PLANNING

6 GRANTS.—The Community Challenge Planning 

7 Grants program originally established under such 

8 heading. 

9 (4) CAPACITY BUILDING FOR SUSTAINABLE

10 COMMUNITIES.—The program for capacity building 

11 for sustainable communities originally established 

12 under such heading. 

13 (b) RESCISSIONS.—Effective on the date of the enact14 ment of this Act, the unobligated balances available on 

15 such date of enactment of funds made available to carry 

16 out each of the programs and initiatives terminated by 

17 subsection (a) are hereby rescinded. 


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1 TITLE II—ENDING BANK BAIL2 OUTS AND RESTORING MAR3 KET DISCIPLINE 

4 Subtitle A—Reducing Risks to 

5 Bank Depositors and Other 

6 Creditors 

7 SEC. 201. CAPITAL REQUIREMENTS. 

8 (a) IN GENERAL.—Notwithstanding any other provi9 sion of law, the appropriate Federal regulators shall set 

10 capital standards for financial companies as provided in 

11 this section. 

12 (b) MINIMUM CAPITAL REQUIREMENT.—Each finan13 cial company shall be required to maintain sufficient cap14 ital to remain adequately capitalized, as defined under 

15 subsection (c)(2). 

16 (c) CAPITAL CATEGORIES.— 

17 (1) WELL CAPITALIZED.—A financial company 

18 is ‘‘well capitalized’’ if the company maintains a cap19 ital level of 12 percent or more. 

20 (2) ADEQUATELY CAPITALIZED.—A financial 

21 company is ‘‘adequately capitalized’’ if the company 

22 maintains a capital level of 10 percent or more. 

23 (3) UNDERCAPITALIZED.—A financial company 

24 is ‘‘undercapitalized’’ if the company maintains a 

25 capital level of less than 10 percent. 


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1 (4) SIGNIFICANTLY UNDERCAPITALIZED.—A fi2 nancial company is ‘‘significantly undercapitalized’’ 

3 if the company maintains a capital level of less than 

4 6 percent. 

5 (5) CRITICALLY UNDERCAPITALIZED.—A finan6 cial company is ‘‘critically undercapitalized’’ if the 

7 company maintains a capital level of 2 percent or 

8 less. 

9 (d) CAPITAL CALCULATION.—In computing a finan10 cial company’s capital for purposes of this section— 

11 (1) the value of capital shall be calculated based 

12 on the current market value of the capital, and not 

13 by reference to the book value of such capital; 

14 (2) the percentage of capital maintained by a 

15 company shall be based on the total consolidated as16 sets of the company; and 

17 (3) there shall be no risk-weighting of assets. 

18 (e) PHASE-IN PERIOD.—Notwithstanding subsection 

19 (c), during the 6-year period beginning on the date of the 

20 enactment of this Act, the percentages contained in para21 graphs (1) through (5) of subsection (c) shall be treated 

22 as follows: 

23 (1) During the 1-year period following the date 

24 of the enactment of this Act, 6 percent, 4 percent, 

25 4 percent, 3 percent, and 2 percent, respectively. 


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1 (2) During the 1-year period following the pe2 riod described under paragraph (1), 7 percent, 5 

3 percent, 5 percent, 3.5 percent, and 2 percent, re4 spectively. 

5 (3) During the 1-year period following the pe6 riod described under paragraph (2), 8 percent, 6 

7 percent, 6 percent, 4 percent, and 2 percent, respec8 tively. 

9 (4) During the 1-year period following the pe10 riod described under paragraph (3), 9 percent, 7 

11 percent, 7 percent, 4.5 percent, and 2 percent, re12 spectively. 

13 (5) During the 1-year period following the pe14 riod described under paragraph (4), 10 percent, 8 

15 percent, 8 percent, 5 percent, and 2 percent, respec16 tively. 

17 (6) During the 1-year period following the pe18 riod described under paragraph (5), 11 percent, 9 

19 percent, 9 percent, 5.5 percent, and 2 percent, re20 spectively. 

21 (f) DEFINITIONS.—For purposes of this section: 

22 (1) APPROPRIATE FEDERAL REGULATOR.—The 

23 term ‘‘appropriate Federal regulator’’— 

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1 tion 3 of the Federal Deposit Insurance Act (12 

2 U.S.C. 1813); 

3 (B) means the Board of Governors of the 

4 Federal Reserve System, in the case of a 

5 nonbank financial company supervised by the 

6 Board of Governors; and 

7 (C) means the National Credit Union Ad8 ministration Board, in the case of a credit 

9 union. 

10 (2) CAPITAL.—The term ‘‘capital’’ means com11 mon equity tier 1 capital and additional tier 1 cap12 ital, as such terms are defined in the notice of final 

13 rulemaking published in the Federal Register on Oc14 tober 11, 2013 (78 Fed. Reg. 62173–74). 

15 (3) CREDIT UNION.—The term ‘‘credit union’’ 

16 includes a Federal credit union and a State credit 

17 union, as such terms are defined under section 101 

18 of the Federal Credit Union Act (12 U.S.C. 1752). 

19 (4) DEPOSITORY INSTITUTION.—The term ‘‘de20 pository institution’’ has the meaning given such 

21 term under section 3 of the Federal Deposit Insur22 ance Act (12 U.S.C. 1813). 

23 (5) DEPOSITORY INSTITUTION HOLDING COM24 PANY.—The term ‘‘depository institution holding 

25 company’’ has the meaning given such term under 


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1 section 3 of the Federal Deposit Insurance Act (12 

2 U.S.C. 1813). 

3 (6) FINANCIAL COMPANY.—The term ‘‘financial 

4 company’’ means— 

5 (A) a credit union; 

6 (B) a depository institution; 

7 (C) a depository institution holding com8 pany; and 

9 (D) a nonbank financial company super10 vised by the Board of Governors. 

11 (7) NONBANK FINANCIAL COMPANY SUPER12 VISED BY THE BOARD OF GOVERNORS.—The term 

13 ‘‘nonbank financial company supervised by the 

14 Board of Governors’’ has the meaning given such 

15 term under section 102 of the Dodd-Frank Wall 

16 Street Reform and Consumer Protection Act (12 

17 U.S.C. 5311). 

18 SEC. 202. FDIC INSURANCE. 

19 (a) REDUCTION IN MAXIMUM INSURANCE

20 AMOUNT.—Section 11(a)(1) of the Federal Deposit Insur21 ance Act (12 U.S.C. 1821(a)(1)) is amended— 

22 (1) by amending subparagraph (E) to read as 

23 follows: 

24 ‘‘(E) STANDARD MAXIMUM DEPOSIT IN25 SURANCE AMOUNT DEFINED.—For purposes of 


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1 this Act, the term ‘standard maximum deposit 

2 insurance amount’ means $150,000, adjusted 

3 as provided under subparagraph (F).’’; and 

4 (2) in subparagraph (F), by striking ‘‘April 1 

5 of 2010,’’ and inserting ‘‘April 1, 2015,’’. 

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

7 this section shall take effect on the day that is the end 

8 of the 1-year period beginning on the date of the enact9 ment of this Act. 

10 Subtitle B—Repeal of Bailout 

11 Authorities 

12 SEC. 211. REPEAL OF FDIC POWERS UNDER THE SYSTEMIC 

13 RISK DETERMINATION. 

14 The Federal Deposit Insurance Act (12 U.S.C. 1811 

15 et seq.) is amended— 

16 (1) in section 11(a)(4)(C) (12 U.S.C. 

17 1821(a)(4)(C)), by striking ‘‘other than section 

18 13(c)(4)(G)’’; and 

19 (2) in section 13(c)(4) (12 U.S.C. 

20 1823(c)(4))— 

21 (A) by striking subparagraph (G); and 

22 (B) by redesignating subparagraph (H) as 

23 subparagraph (G). 


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1 SEC. 212. REPEAL OF UNUSUAL AND EXIGENT AUTHORITY 

2 OF THE FEDERAL RESERVE. 

3 Section 13(3) of the Federal Reserve Act (12 U.S.C. 

4 343(3)) is repealed. 

5 SEC. 213. EXCHANGE STABILIZATION FUND. 

6 (a) IN GENERAL.—Section 5302 of title 31, United 

7 States Code, is amended by striking ‘‘stabilization fund’’ 

8 each place such term appears and inserting ‘‘Special 

9 Drawing Rights Fund’’. 

10 (b) CONFORMING AMENDMENTS.— 

11 (1) BALANCED BUDGET AND EMERGENCY DEF12 ICIT CONTROL ACT OF 1985.—Section 255(g)(1)(A) 

13 of the Balanced Budget and Emergency Deficit Con14 trol Act of 1985 (2 U.S.C. 905(g)(1)(A)) is amended 

15 by striking ‘‘Exchange Stabilization Fund’’ and in16 serting ‘‘Special Drawing Rights Fund’’. 

17 (2) EMERGENCY ECONOMIC STABILIZATION ACT

18 OF 2008.—The Emergency Economic Stabilization 

19 Act of 2008 (12 U.S.C. 5211 et seq.) is amended— 

20 (A) in section 131 (12 U.S.C. 5236), by 

21 striking ‘‘Exchange Stabilization Fund’’ each 

22 place such term appears in headings and text 

23 and inserting ‘‘Special Drawing Rights Fund’’; 

24 and 

25 (B) in the item relating to section 131 in 

26 the table of contents of such Act, by striking 


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1 ‘‘Exchange Stabilization Fund’’ and inserting 

2 ‘‘Special Drawing Rights Fund’’. 

3 (3) INTERNATIONAL FINANCIAL INSTITUTIONS

4 ACT.—Section 1704 of the International Financial 

5 Institutions Act (22 U.S.C. 262r–3) is amended by 

6 striking ‘‘stabilization fund’’ each place such term 

7 appears and inserting ‘‘Special Drawing Rights 

8 Fund’’. 

9 (4) SPECIAL DRAWING RIGHTS ACT.—The Spe10 cial Drawing Rights Act (22 U.S.C. 286n et seq.) is 

11 amended by striking ‘‘Exchange Stabilization Fund’’ 

12 each place such term appears and inserting ‘‘Special 

13 Drawing Rights Fund’’. 

14 (c) REFERENCES.—Any reference in a law, regula15 tion, document, paper, or other record of the United 

16 States to the ‘‘Exchange Stabilization Fund’’ shall be 

17 deemed a reference to the ‘‘Special Drawing Rights 

18 Fund’’. 

19 (d) FUNDS USED TO REDUCE THE DEBT.—The Sec20 retary of the Treasury shall liquidate all property in the 

21 Special Drawing Rights Fund (as so renamed under sub22 section (a)), other than Special Drawing Rights, and use 

23 all such amounts to reduce the public debt. 

24 (e) LIMITATION ON FUND.—Section 5302 of title 31, 

25 United States Code, is amended— 


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1 (1) in subsection (a)(1)— 

2 (A) by striking ‘‘is available to carry out’’ 

3 and inserting ‘‘is only available to carry out’’; 

4 and 

5 (B) by striking ‘‘, and for investing in obli6 gations of the United States Government those 

7 amounts in the fund the Secretary of the Treas8 ury, with the approval of the President, decides 

9 are not required at the time to carry out this 

10 section. Proceeds of sales and investments, 

11 earnings, and interest shall be paid into the 

12 fund and are available to carry out this section. 

13 However, the fund is not available to pay ad14 ministrative expenses’’; and 

15 (2) by striking subsection (b) and inserting the 

16 following: 

17 ‘‘(b) FUND ONLY TO HOLD SPECIAL DRAWING

18 RIGHTS.—Notwithstanding any other provision of law, 

19 only Special Drawing Rights may be deposited into the 

20 Special Drawing Rights Fund.’’. 

21 (f) CONFORMING AMENDMENTS.— 

22 (1) BRETTON WOODS AGREEMENTS ACT.—Sec23 tion 18 of the Bretton Woods Agreements Act (22 

24 U.S.C. 286e–3) is hereby repealed. 


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1 (2) SUPPORT FOR EAST EUROPEAN DEMOCRACY

2 (SEED) ACT OF 1989.—The Support for East Euro3 pean Democracy (SEED) Act of 1989 (22 U.S.C. 

4 5401 et seq.) is amended— 

5 (A) in section 101(b)(1) (22 U.S.C. 

6 5411(b)(1)), by striking ‘‘such as—’’ and all 

7 that follows through the end of the paragraph 

8 and inserting ‘‘such as the authority provided in 

9 section 102(c) of this Act.’’; and 

10 (B) in section 102(a) (22 U.S.C. 5412(a)), 

11 by striking ‘‘section 101(b)—’’ and all that fol12 lows through the end of the subsection and in13 serting ‘‘section 101(b), should work closely 

14 with the European Community and inter15 national financial institutions to determine the 

16 extent of emergency assistance required by Po17 land for the fourth quarter of 1989.’’. 

18 (g) TREATMENT OF CERTAIN FUNDS.—Funds that 

19 would otherwise have been deposited into the Special 

20 Drawing Rights Fund (as so renamed under subsection 

21 (a)), but for the amendments made by this section, shall 

22 instead be paid to the Secretary of the Treasury, and the 

23 Secretary of the Treasury shall use such funds to reduce 

24 the public debt. 


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1 (h) WIND-DOWN PERIOD FOR CERTAIN TRANS2 ACTIONS.—Notwithstanding any other provision of this 

3 section, during the 3-year period beginning on the date 

4 of the enactment of this Act, property other than Special 

5 Drawing Rights may be deposited, and maintained, in the 

6 Special Drawing Rights Fund as needed to fulfill any out7 standing obligations on the Fund. 

8 Subtitle C—Bankruptcy, Not Bail9 outs, for Complex Financial In10 stitutions 

11 SEC. 221. REFORMING THE BANKRUPTCY CODE TO ACCOM12 MODATE FAILING FINANCIAL INSTITUTIONS. 

13 (a) FINDINGS.—The Congress finds the following: 

14 (1) Bailouts undermine market discipline and 

15 the rule of law, resulting in doubt about property 

16 rights and insulating recipients from the con17 sequences of their mistakes. 

18 (2) A number of complex financial institutions 

19 are widely considered to be ‘‘too big to fail’’. 

20 (3) An aggravating factor in the 2008 financial 

21 crisis was uncertainty about the security and priority 

22 of claims stemming from cross-border resolution of 

23 complex financial institutions. 

24 (4) The Federal Deposit Insurance Corporation 

25 (FDIC) has historically resolved most failing U.S. 


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1 depository institutions and has the necessary exper2 tise and discretionary authority to conduct such res3 olutions quickly. 

4 (5) The FDIC’s authority did not extend to all 

5 components of very large, complex financial institu6 tions, such as insurance, stockbroker, and com7 modity broker operations. 

8 (6) The U.S. Constitution authorizes Congress 

9 to establish ‘‘uniform laws on the subject of Bank10 ruptcies through the United States’’. 

11 (7) Bankruptcy provides predictable priority for 

12 claims under the rule of law through the jurisdiction 

13 of an Article III court. 

14 (8) The lengthy adjudication of claims to en15 sure equality under the law of similarly situated 

16 creditors under bankruptcy can be problematic in 

17 the case of financial institutions but can be amended 

18 to preserve and protect value. 

19 (9) The Dodd-Frank Wall Street Reform and 

20 Consumer Protection Act did not establish a non21 discretionary, rule-of-law-based resolution process to 

22 provide certainty for creditors of failing institutions. 

23 (10) A credible resolution process could elimi24 nate the use of bailouts and other political interven25 tions. 


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1 (11) Additional reforms are necessary to bring 

2 certainty and predictability to the failure of large, 

3 complex, multinational financial institutions. 

4 (b) SENSE OF CONGRESS.—It is the sense of Con5 gress that the Committees on the Judiciary and Financial 

6 Services of the House of Representatives and the Commit7 tees on the Judiciary and Banking, Housing, and Urban 

8 Affairs of the Senate should each report legislation pro9 posing changes to existing law within each committee’s ju10 risdiction with provisions to accommodate bankruptcy pro11 ceedings for failing multinational financial institutions. 

12 Such committees should consider reforms that— 

13 (1) establish a new chapter of the bankruptcy 

14 code specifically for financial institutions, to be used 

15 in conjunction with the existing chapter 7 liquidation 

16 or chapter 11 reorganization process; 

17 (2) replace or supplement existing resolution 

18 authorities for certain kinds of institutions; 

19 (3) clarify that such resolution proceedings 

20 occur at the holding company level; 

21 (4) designate particular judges in the Second 

22 and D.C. Circuits who will hear these cases and who 

23 may appoint special masters with technical expertise 

24 to aid in the resolution; 


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1 (5) continue to use FDIC expertise to resolve 

2 such institutions under the oversight of the court; 

3 (6) remove exemptions from bankruptcy pro4 ceedings for certain subsidiaries of complex financial 

5 institutions, such as insurance and brokerage oper6 ations; 

7 (7) allow primary regulators to petition for in8 voluntary bankruptcy cases against a financial insti9 tution, to have standing and raise motions, and to 

10 file plans of reorganization; 

11 (8) establish procedures for debtor-in-possession 

12 financing to provide partial or complete payouts to 

13 some or all creditors in certain circumstances; 

14 (9) develop rules for the applicability of short15 term automatic stays for certain qualified financial 

16 contracts; 

17 (10) recapitalize reorganized institutions at the 

18 holding company level, possibly by converting long19 term debt into equity; 

20 (11) collaborate with foreign governments to 

21 avoid domestic ‘‘ring-fencing’’ of failing multi22 national financial institutions whose holding compa23 nies are located elsewhere; 

24 (12) ensure that institutions in conservatorship 

25 do not receive advantageous tax or regulatory treatVerDate Mar 15 2010 18:25 Nov 21, 2013 Jkt 039200 PO 00000 Frm 00070 Fmt 6652 Sfmt 6201 E:\BILLS\H3550.IH H3550

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1 ment over comparable financial institutions outside 

2 of the bankruptcy process; and 

3 (13) such other additional and conforming re4 forms as the Committees consider necessary. 

Æ 


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