II

103D CONGRESS

2D SESSION S. 2487

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

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

IN THE SENATE OF THE UNITED STATES

SEPTEMBER 30 (legislative day, SEPTEMBER 12), 1994

Mr. CAMPBELL (for himself, Mr. INOUYE, and Mr. MCCAIN) (by request) introduced the following bill; which was read twice and referred to the Committee on Indian Affairs

A BILL

To improve the economic conditions and supply of housing

in Native American communities by creating the Native

American Financial Services Organization, and for other

purposes.

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

3 SECTION 1. SHORT TITLE.

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

5 ‘‘Native American Financial Services Organization Act of

6 1994’’.

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

8 this Act is as follows:
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Sec. 1. Short title.

TITLE I—STATEMENT OF POLICY; DEFINITIONS

Sec. 101. Policy.

Sec. 102. Statement of purposes.

Sec. 103. Definitions.

TITLE II—NATIVE AMERICAN FINANCIAL SERVICES

ORGANIZATION

Sec. 201. Establishment of the organization.

Sec. 202. Authorized assistance and service functions.

Sec. 203. Native American lending services grant.

Sec. 204. Audits.

Sec. 205. Annual housing and economic development reports.

Sec. 206. Advisory council.

TITLE III—CAPITALIZATION OF ORGANIZATION

Sec. 301. Capitalization of the organization.

Sec. 302. Obligations and securities of the organization.

Sec. 303. Limit on total assets and liabilities.

TITLE IV—REGULATION, EXAMINATION, AND REPORTS

Sec. 401. Regulation, examination, and reports—OFHEO.

Sec. 402. Regulation of the secretary of HUD.

TITLE V—FORMATION OF NEW CORPORATION

Sec. 501. Formation of new corporation.

Sec. 502. Adoption and approval of merger plan.

Sec. 503. Consummation of merger.

Sec. 504. Transition.

Sec. 505. Effect of merger.

TITLE VI—AUTHORIZATIONS OF APPROPRIATIONS

Sec. 601. Authorization of appropriations for Native American financial institutions.

Sec. 602. Authorization of appropriations for organization.

1 TITLE I—STATEMENT OF

2 POLICY; DEFINITIONS

3 SEC. 101. POLICY.

4 Based upon the findings and recommendations by the

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

7 235, the Congress has determined that housing shortages
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1 and deplorable living conditions are at crisis proportions

2 in Native American communities throughout the United

3 States. The lack of private capital to finance housing and

4 economic development for Native Americans and Native

5 American communities seriously exacerbates this problem.

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

7 United States to improve the economic conditions and sup8 ply of housing in Native American communities through9 out the United States by creating the Native American

10 Financial Services Organization. It is anticipated that

11 when the Native American Financial Services Organiza12 tion is no longer a Congressionally chartered body cor13 porate, it will function as a tribal, state or District of Co14 lumbia corporation.

15 SEC. 102. STATEMENT OF PURPOSES.

16 The purposes of this Act are—

17 (1) to help serve the mortgage and other lend18 ing needs of Native Americans by assisting in the es19 tablishment and organization of Native American

20 Financial Institutions, developing and providing fi21 nancial expertise and technical assistance to Native

22 American Financial Institutions, including assist23 ance on how to overcome barriers to lending on Na24 tive American lands, and the past and present im25 pact of discrimination;
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1 (2) to promote access to mortgage credit in Na2 tive American communities in the Nation by increas3 ing the liquidity of financing for housing and im4 proving the distribution of investment capital avail5 able for such financing, primarily through Native

6 American Financial Institutions;

7 (3) to promote the infusion of public capital

8 into Native American communities throughout the

9 United States and to direct sources of public and

10 private capital into housing and economic develop11 ment for Native American individuals and families,

12 primarily through Native American Financial Insti13 tutions; and

14 (4) to provide ongoing assistance to the second15 ary market for residential mortgages and economic

16 development loans for Native American individuals

17 and families, Native American Financial Institu18 tions, and other borrowers by increasing the liquidity

19 of such investments and improving the distribution

20 of investment capital available for such financing.

21 SEC. 103. DEFINITIONS.

22 For purposes of this Act, the following definitions

23 shall apply:
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1 (1) The term ‘‘Alaska Native’’ means any per2 son recognized as an Alaska Native by the Federal

3 Government.

4 (2) The term ‘‘Board of Directors’’ means the

5 board of directors of the Organization.

6 (3) The term ‘‘Chairperson’’ means the chair7 person of the Board of Directors.

8 (4) The term ‘‘designated merger date’’ means

9 the specific calendar date and time of day des10 ignated by the Board of Directors under section

11 502(b).

12 (5) The term ‘‘Fund’’ means the Community

13 Development Financial Institutions Fund established

14 by the Community Development Banking and Fi15 nancial Institutions Act of 1994.

16 (6) The term ‘‘Indian Tribe’’ means any Indian

17 tribe, band, nation, or other organized group or com18 munity, including any Alaska Native village or re19 gional or village corporation as defined in or estab20 lished pursuant to the Alaska Native Claims Settle21 ment Act which is recognized as eligible for the spe22 cial programs and services provided by the United

23 States to Indians because of their status as Indians.
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1 (7) The term ‘‘merger plan’’ means the plan of

2 merger adopted by the Board of Directors according

3 the section 502(a).

4 (8) The term ‘‘Native American’’ means any

5 member of an Indian Tribe. The term ‘‘Native

6 American Financial Institution’’ means a person

7 (other than an individual) that—

8 (A) qualifies as a ‘‘community development

9 financial institution’’ under the Community De10 velopment Banking and Financial Institutions

11 Act of 1994;

12 (B) satisfies the requirements established

13 by the Community Development Banking and

14 Financial Institutions Act of 1994 and the

15 Fund for applicants for assistance from the

16 Fund;

17 (C) demonstrates a special interest and ex18 pertise in serving the primary economic develop19 ment and mortgage lending needs of the Native

20 American community; and

21 (D) demonstrates that it has the endorse22 ment of the Native American community it in23 tends to serve.

24 (9) The term ‘‘Native American lender’’ means

25 a Native American Financial Institution, Native
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1 American governing body, Native American housing

2 authority or other Native American financial institu3 tion which acts as a primary mortgage or economic

4 development lender in a Native American commu5 nity.

6 (10) The term ‘‘new corporation’’ means the

7 corporation formed according to section 501.

8 (11) The term ‘‘nonqualifying mortgage loan’’

9 means a mortgage loan deemed by the Organization

10 to be of such quality, type, class or principal amount

11 as to not meet the purchase standards of the Fed12 eral National Mortgage Association or the Federal

13 Home Loan Mortgage Corporation in effect on Sep14 tember 30, 1994.

15 (12) The term ‘‘Organization’’ means the Na16 tive American Financial Services Organization.

17 (13) The term ‘‘qualifying mortgage loan’’

18 means a mortgage loan deemed by the Organization

19 to be of such quality, type, class or principal amount

20 as to meet the purchase standards of the Federal

21 National Mortgage Association or the Federal Home

22 Loan Mortgage Corporation in effect on September

23 30, 1994.

24 (14) The term ‘‘transition period’’ means the

25 period of time between the approval of the merger
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1 plan by both the Secretary of Housing and Urban

2 Development and the Secretary of the Treasury and

3 the designated merger date.

4 TITLE II—NATIVE AMERICAN FI5 NANCIAL SERVICES ORGANI6 ZATION

7 SEC. 201. ESTABLISHMENT OF THE ORGANIZATION.

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

9 PRINCIPAL OFFICE; MEMBERSHIP; VACANCIES.—

10 (1) There is established and chartered a body

11 corporate to be known as the Native American Fi12 nancial Services Organization (‘‘Organization’’). The

13 Organization shall have existence as a Congression14 ally chartered body corporate until the designated

15 merger date, at which time its charter shall termi16 nate, unless such charter is earlier surrendered by

17 the Organization. The right to revise, amend or

18 modify the Organization charter is specifically and

19 exclusively reserved to the Congress.

20 (2) The powers of the Organization shall be

21 vested in a Board of Directors. The Board of Direc22 tors shall determine the policies that govern the op23 erations and management of the Organization. The

24 principal office of the Organization shall be in the

25 District of Columbia. For purposes of venue, Orga-
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1 nization shall be considered a resident of the District

2 of Columbia.

3 (3)(A) The Board of Directors of the Organiza4 tion shall consist of nine persons, three of whom

5 shall be appointed by the President of the United

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

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

8 all in accordance with the bylaws of the Organiza9 tion. If class B stock is issued under section 301(b),

10 the Board of Directors shall consist of 13 persons,

11 and the four additional members shall be elected by

12 the class B stockholders in accordance with the by13 laws of the Organization. Each member of the

14 Board of Directors shall be elected or appointed for

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

16 initial Board of Directors shall have the following

17 terms: of the three members appointed by the Presi18 dent, one will have a two-year term, one will have a

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

20 all as designated by the President at the time of

21 their appointments; of the six members elected by

22 the class A stockholders, two will have two-year

23 terms, two will have three-year terms, and the re24 maining two will have four- year terms; and if class

25 B stock is issued and four additional members are
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1 elected by the class B stockholders, one will have a

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

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

4 members appointed by the President shall have ex5 pertise in one or more of the following areas: Native

6 American housing and economic development pro7 grams, financing in Native American communities,

8 Native American governing bodies and court sys9 tems, restricted and trust land issues, economic de10 velopment, and small consumer loans.

11 (B) The Board of Directors shall select a

12 Chairperson from among its members, except that

13 the initial Chairperson shall be selected from among

14 the members of the initial Board of Directors who

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

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

17 vacant shall be filled by appointment by the Presi18 dent of the United States, but only for the unexpired

19 portion of the term.

20 (ii) Any elected directorship that becomes va21 cant shall be filled by appointment by the Board of

22 Directors, but only for the unexpired portion of the

23 term.

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

25 continue to serve after the expiration of the term of
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1 office to which the director was appointed or elected

2 until a successor has been appointed or elected, and

3 qualified.

4 (b) POWERS OF THE ORGANIZATION.—The Organi5 zation shall have power—

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

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

8 regulating, among other things, the manner in

9 which—

10 (A) the business of the Organization shall

11 be conducted;

12 (B) the elected directors of the Organiza13 tion shall be elected;

14 (C) the stock of the Organization shall be

15 issued, held, and disposed of;

16 (D) the property of the Organization shall

17 be disposed of; and,

18 (E) the powers and privileges granted to

19 the Organization by this Act and other law

20 shall be exercised and enjoyed;

21 (3) to make and perform contracts, agreements,

22 and commitments, including entering into a coopera23 tive agreement with the Fund;

24 (4) to prescribe and impose fees and charges

25 for services provided by the Organization;
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1 (5) to settle, adjust, and compromise, and with

2 or without consideration or benefit to the Organiza3 tion to release or waive in whole or in part, in ad4 vance or otherwise, any claim, demand, or right of,

5 by, or against the Organization, provided that such

6 settlement, adjustment, compromise, release or waiv7 er shall not be adverse to the interests of the United

8 States;

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

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

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

12 with and dispose of any property;

13 (8) to determine its necessary expenditures and

14 the manner in which the same shall be incurred, al15 lowed, and paid, and appoint, employ, and fix and

16 provide for the compensation and benefits of offi17 cers, employees, attorneys, and agents as the Board

18 of Directors determines reasonable and not incon19 sistent with the provisions this section;

20 (9) to incorporate a new corporation under

21 State, District of Columbia or tribal law, as provided

22 in section 501;

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

24 section 502;
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1 (11) to consummate the merger of the Organi2 zation into the new corporation, as provided in sec3 tion 503; and

4 (12) to have succession until the designated

5 merger date or any earlier date on which the Orga6 nization surrenders its Federal charter.

7 (c) INVESTMENT OF FUNDS; DESIGNATION AS DE8 POSITARY, CUSTODIAN, OR AGENT FOR ORGANIZATION OF

9 ANY FEDERAL RESERVE BANK, FEDERAL HOME LOAN

10 BANK, OR ANY BANK DESIGNATED AS DEPOSITARY OF

11 PUBLIC MONEY.—Moneys of the Organization not re12 quired to meet current operating expenses shall be in13 vested in obligations of, or obligations guaranteed by, the

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

15 participations or other instruments that are lawful invest16 ments for fiduciary, trust or public funds. Any Federal

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

18 as to which at the time of its designation by the Organiza19 tion there is outstanding a designation by the Secretary

20 of the Treasury as a general or other depositary of public

21 money, may be designated by the Organization as a depos22 itary or custodian or as a fiscal or other agent of the Orga23 nization, and is hereby authorized to act as such deposi24 tary, custodian, or agent.
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1 (d) ACTIONS BY AND AGAINST THE ORGANIZATION;

2 JURISDICTION; REMOVAL OF ACTIONS; ATTACHMENT OR

3 EXECUTION ISSUED AGAINST THE ORGANIZATION.—Not4 withstanding section 1349 of title 28 of the United States

5 Code or any other provision of law—

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

7 agency included in sections 1345 and 1442 of such

8 title 28;

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

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

11 the United States, and the district courts of the

12 United States shall have original jurisdiction of all

13 such actions, without regard to amount or value;

14 and

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

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

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

18 which the Organization is a party may at any time

19 before the trial thereof be removed by the Organiza20 tion, without the giving of any bond or security, to

21 the district court of the United States for the dis22 trict and division embracing the place where the

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

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

25 the District of Columbia, by following any procedure
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1 for removal of causes in effect at the time of that

2 removal.

3 SEC. 202. AUTHORIZED ASSISTANCE AND SERVICE FUNC4 TIONS.

5 (a) TECHNICAL ASSISTANCE AND SERVICES.—The

6 Organization is authorized to—

7 (1) assist the Fund in the establishment and

8 organization of Native American Financial Institu9 tions;

10 (2) assist the Fund in developing and providing

11 financial expertise and technical assistance to Native

12 American Financial Institutions, including methods

13 of underwriting, securing, servicing, packaging, and

14 selling mortgage and small commercial and

15 consumer loans;

16 (3) develop and provide specialized technical as17 sistance on how to overcome barriers to primary

18 mortgage lending on Native American lands, includ19 ing issues related to trust lands, discrimination, high

20 operating costs, and inapplicability of standard un21 derwriting criteria;

22 (4) assist the Fund in providing mortgage un23 derwriting assistance (but not originate loans) under

24 contract to Native American Financial Institutions;
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1 (5) work with the Federal National Mortgage

2 Association, the Federal Home Loan Mortgage Cor3 poration, and other participants in the secondary

4 market for home mortgage instruments in identify5 ing and eliminating barriers to their purchase of Na6 tive American mortgage loans originated by Native

7 American Financial Institutions and other lenders in

8 Native American communities;

9 (6) obtain capital investments in the Organiza10 tion from Indian tribes, Native American organiza11 tions, and others;

12 (7) assist the Fund in its operation as an infor13 mation clearinghouse, providing information on fi14 nancial practices to Native American Financial In15 stitutions; and

16 (8) assist the Fund in monitoring and reporting

17 to the Congress on the performance of Native Amer18 ican Financial Institutions in meeting the economic

19 development and housing credit needs of Native

20 Americans.

21 (b) PURCHASES AND SALES OF MORTGAGES AND

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

23 Secretary of Housing and Urban Development determines

24 that the combined purchases by the Federal National

25 Mortgage Association and the Federal Home Loan Mort-
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1 gage Corporation of residential one to four family Native

2 American nonqualifying mortgage loans originated by Na3 tive American Financial Institutions and other lenders—

4 (1) in the second year following the establish5 ment of the Organization total less than

6 $20,000,000, unless it can be demonstrated to the

7 Secretary of Housing and Urban Development that

8 such purchase goal could not be met; or

9 (2) in any succeeding year, total less than that

10 amount which the Secretary of Housing and Urban

11 Development has determined and published as a rea12 sonable Native American mortgage purchase goal for

13 such combined purchases by the Federal National

14 Mortgage Association and the Federal Home Loan

15 Mortgage Corporation in such year; the Organiza16 tion shall thereafter be permitted to make such pur17 chases. In determining such goal, the Secretary shall

18 take into account the Fund’s study of Native Amer19 ican lending and investment required by the Com20 munity Development Banking and Financial Institu21 tions Act of 1994. The Organization, upon receiving

22 written confirmation from the Secretary of Housing

23 and Urban Development, is thereafter authorized,

24 without restriction as to time, to—
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1 (A) with respect to residential mortgage

2 loans originated by Native American Financial

3 Institutions which are qualifying mortgage

4 loans—

5 (i) purchase such qualifying mortgage

6 loans;

7 (ii) hold such qualifying mortgage

8 loans for a period of time not to exceed 12

9 months; and

10 (iii) resell such qualifying mortgage

11 loans to the Federal National Mortgage

12 Association, the Federal Home Loan Mort13 gage Corporation or other secondary mar14 ket participants, as provided in section

15 303(b);

16 (B) with respect to residential mortgage

17 loans originated by the Native American Finan18 cial Institutions which are nonqualifying mort19 gage loans—

20 (i) purchase such nonqualifying mort21 gage loans from the Native American Fi22 nancial Institutions for such term as the

23 Organization deems appropriate including

24 the life of the mortgage loan, provided

25 that—
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1 (I) the Organization has reason2 able assurance that the loan will be

3 repaid within the time agreed;

4 (II) the Native American Finan5 cial Institution selling the loan retains

6 a participation of not less than 10 per

7 centum in the mortgage;

8 (III) the Native American Finan9 cial Institution selling the loan agrees

10 for such period of time and under

11 such circumstances as the Organiza12 tion may require, to repurchase or re13 place the mortgage upon demand of

14 the Organization in the event that the

15 loan is in default; or

16 (IV) that portion of the outstand17 ing principal balance of the loan

18 which exceeds 80 per centum of the

19 value of the property securing such

20 loan is guaranteed or insured by a

21 qualified insurer as determined by the

22 Organization;

23 (ii) issue mortgage-backed securities

24 or other forms of participations based on
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1 pools of such nonqualifying mortgage

2 loans, as provided in section 303(c);

3 (C) to purchase, service, sell, lend on the

4 security of, and otherwise deal in—

5 (i) residential mortgages that are se6 cured by a subordinate lien against a one7 or four-family residence that is the prin8 cipal residence of the mortgagor; and

9 (ii) residential mortgages that are se10 cured by a subordinate lien against a prop11 erty comprising five or more family dwell12 ing units; and

13 (D) rights and remedies of the Organiza14 tion, including without limitation on the gener15 ality of the foregoing any rights and remedies

16 of the Organization on, under, or with respect

17 to any mortgage or any obligation secured

18 thereby, shall be immune from impairment, lim19 itation, or restriction by or under—

20 (i) any law (except laws enacted by

21 the Congress expressly in limitation of this

22 sentence) which becomes effective after the

23 acquisition by the Organization of the sub24 ject or property on, under, or with respect

25 to which such right or remedy arises or ex-
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1 ists or would so arise or exist in the ab2 sence of such law; or

3 (ii) any administrative or other action

4 which becomes effective after such acquisi5 tion. The Organization is authorized to

6 conduct its business without regard to any

7 qualification or similar statute in the Dis8 trict of Columbia, or any State or tribal ju9 risdiction.

10 SEC. 203. NATIVE AMERICAN LENDING SERVICES GRANT.

11 To the extent funds are available as provided in sec12 tion 602, and the Fund and the Organization enter into

13 a cooperative agreement for the Organization to provide

14 technical assistance and other services to Native American

15 Financial Institutions, such agreement shall provide that

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

17 shall be made when the initial Organization Board of Di18 rectors takes office. The payment of the balance of

19 $5,000,000 shall be made to the Organization not later

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

21 SEC. 204. AUDITS.

22 (a) INDEPENDENT AUDITS.—

23 (1) The Organization shall have an annual

24 independent audit made of its financial statements
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1 by an independent public accountant in accordance

2 with generally accepted auditing standards.

3 (2) In conducting an audit under this sub4 section, the independent public accountant shall de5 termine and report on whether the financial state6 ments of the Organization—

7 (A) are presented fairly in accordance with

8 generally accepted accounting principles; and

9 (B) to the extent determined necessary by

10 the Director of the Office of Federal Housing

11 Enterprise Oversight of the Department of

12 Housing and Urban Development, comply with

13 any disclosure requirements imposed under sec14 tion 401.

15 (b) GAO AUDITS.—

16 (1) Beginning after the first two years of the

17 Organization’s operation, unless earlier required by

18 any other statute, grant or agreement, the pro19 grams, activities, receipts, expenditures, and finan20 cial transactions of the Organization shall be subject

21 to audit by the Comptroller General of the United

22 States under such rules and regulations as may be

23 prescribed by the Comptroller General.

24 (2) To carry out this subsection, the represent25 atives of the General Accounting Office shall have
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1 access to all books, accounts, financial records, re2 ports, files and all other papers, things, or property

3 belonging to or in use by the Organization and nec4 essary to facilitate the audit, and they shall be af5 forded full facilities for verifying transactions with

6 the balances or securities held by depositaries, fiscal

7 agents, and custodians. The representatives of the

8 General Accounting Office shall also have access,

9 upon request to the Organization or any auditor for

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

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

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

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

14 such audit and to any papers, records, files, and re15 ports of the auditor used in such an audit.

16 (3) A report on each such audit shall be made

17 by the Comptroller General to the Congress.

18 (4) The Organization shall reimburse the Gen19 eral Accounting Office for the full cost of any such

20 audit as billed therefor by the Comptroller General.

21 SEC. 205. ANNUAL HOUSING AND ECONOMIC DEVELOP22 MENT REPORTS.

23 The Organization shall collect, maintain, and provide

24 to the Secretary of Housing and Urban Development, in

25 a form determined by the Secretary, such data relating
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1 to its mortgages on housing consisting of one to four

2 dwelling units and of more than four dwelling units and

3 to its activities relating to economic development as the

4 Secretary deems appropriate.

5 SEC. 206. ADVISORY COUNCIL.

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

7 establish an Advisory Council.

8 (b) MEMBERSHIP.—The Advisory Council shall con9 sist of 13 members, 1 representative from each of the 12

10 districts established by the Bureau of Indian Affairs and

11 one from Hawaii. Each member shall be appointed by the

12 Board of Directors. No fewer than six of the members of

13 the Advisory Council shall have financial expertise. No

14 fewer than nine of the Advisory Council shall be Native

15 Americans. Each member shall be appointed for a term

16 of four years; except that the initial council shall be ap17 pointed as follows: four members will have a two-year

18 term, four members will have a three- year term, and the

19 remaining five members will have a four-year term, all as

20 designated by the Board of Directors at the time of their

21 appointments.

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

23 Board of Directors on all policy matters of the Organiza24 tion. Through the regional representation of its members,
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1 the Council shall provide information to the Board from

2 all sectors of the Native American community.

3 TITLE III—CAPITALIZATION OF

4 ORGANIZATION

5 SEC. 301. CAPITALIZATION OF THE ORGANIZATION.

6 (a) CLASS A STOCK.—The class A stock of the Orga7 nization shall be issued to Indian Tribes. The allocation

8 shall be by population as determined by the Secretary of

9 Housing and Urban Development in consultation with the

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

11 such par value and other characteristics as the Organiza12 tion provides. The class A stock shall be vested with voting

13 rights, each share being entitled to 1 vote. The class A

14 stock is nontransferable only and it shall be surrendered

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

16 recognized as an Indian Tribe under this Act.

17 (b) CLASS B STOCK.—The Organization is author18 ized to issue class B stock evidencing capital contributions

19 in the manner and amount, and subject to any limitations

20 on concentration of ownership, as may be established by

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

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

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

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

25 The class B stock shall have such par value and other
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1 characteristics as the Organization provides. The class B

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

3 entitled to 1 vote. The class B stock is transferable only

4 on the books of the Organization.

5 (c) CHARGES AND FEES; EARNINGS.—

6 (1) The Organization may impose charges or

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

8 with the objective that all costs and expenses of the

9 operations of the Organization should be within its

10 income derived from such operations and that such

11 operations would be fully self-supporting.

12 (2) All earnings from the operations of the Or13 ganization shall be annually transferred to the gen14 eral surplus account of the Organization. At any

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

16 the discretion of the Board of Directors, be trans17 ferred to reserves.

18 (d) CAPITAL DISTRIBUTIONS.—

19 (1) Except as provided in paragraph (2), the

20 Organization may make such capital distributions

21 (as such term is defined in section 1303 of the Fed22 eral Housing Financial Safety and Soundness Act of

23 1992) as may be declared by the Board of Directors.

24 All capital distributions shall be charged against the

25 general surplus account of the Organization.
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1 (2) The Organization may not make any capital

2 distribution that would decrease the total capital (as

3 such term is defined in section 1303 of the Federal

4 Housing Financial Safety and Soundness Act of

5 1992) of the Organization to an amount less than

6 the capital level for the Organization established

7 under section 401, without prior written approval of

8 the distribution by the Director of the Office of Fed9 eral Housing Enterprise Oversight of the Depart10 ment of Housing and Urban Development.

11 SEC. 302. OBLIGATIONS AND SECURITIES OF THE ORGANI12 ZATION.

13 (a) OBLIGATIONS.—The Organization is authorized

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

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

16 of the Treasury, notes, debentures, bonds, or other obliga17 tions having maturities and bearing such rate or rates of

18 interest as may be determined by the Organization with

19 the approval of the Secretary of the Treasury, provided

20 that such borrowing and issuing of obligations qualifies

21 as a transaction by an issuer not involving any public of22 fering under section 4(2) of the Securities Act of 1933.

23 Obligations issued by the Organization under this section

24 shall not be obligations of, nor shall payment of the prin25 cipal of or interest on such obligations be guaranteed by,
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1 the United States or any agency thereof, and the obliga2 tions shall so plainly state.

3 (b) RESALES OF QUALIFYING MORTGAGE LOANS.—

4 The sale or other disposition by the Organization of quali5 fying mortgage loans under section 202(b)(1) shall be

6 upon such terms and conditions relating to resale, repur7 chase, substitution, replacement or otherwise as the Orga8 nization may prescribe, except that the Organization may

9 not guarantee or insure the payment of any mortgage loan

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

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

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

14 based upon nonqualifying mortgage loans held and set

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

16 be issued upon the approval of the Secretary of the Treas17 ury and shall have such maturities and shall bear such

18 rate or rates of interest as may be determined by the Or19 ganization with the approval of the Secretary of the Treas20 ury provided that such issuing of securities qualifies as

21 a transaction by an issuer not involving any public offering

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

23 (d) PROHIBITIONS AND RESTRICTIONS; CREATION

24 OF LIENS AND CHARGES; RANK AND PRIORITY; CAUSES

25 OF ACTION TO ENFORCE; JURISDICTION; SERVICE OF
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1 PROCESS.—The Organization may, by regulation or by

2 writing executed by the Organization, establish prohibi3 tions or restrictions upon the creation of indebtedness or

4 obligations of the Organization or of liens or charges upon

5 property of the Organization, including after-acquired

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

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

8 of the property of the Organization, including after-ac9 quired property. Such prohibitions, restrictions, liens, and

10 charges shall have such effect, including without limitation

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

12 as may be provided by regulations of the Organization or

13 by writings executed by the Organization, and shall create

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

15 United States District Court for the District of Columbia

16 or in the United States district court for any judicial dis17 trict in which any of the property affected is located. Proc18 ess in any such action may run to and be served in any

19 judicial district or any place subject to the jurisdiction of

20 the United States.

21 (e) VALIDITY OF PROVISIONS; VALIDITY OF RE22 STRICTIONS, PROHIBITIONS, LIENS, OR CHARGES.—The

23 provisions of this section and of any restriction, prohibi24 tion, lien, or charge referred to in subsection (b) shall be

25 fully effective notwithstanding any other law, including
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1 without limitation on the generality of the foregoing any

2 law of or relating to sovereign immunity or priority.

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

4 The aggregate of—

5 (1) the total equity of the Organization, includ6 ing all capital from any issuance of class B stock;

7 and

8 (2) the total liabilities of the Organization, in9 cluding all obligations issued or incurred by the Or10 ganization,

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

12 TITLE IV—REGULATION,

13 EXAMINATION, AND REPORTS

14 SEC. 401. REGULATION, EXAMINATION, AND REPORTS—

15 OFHEO.

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

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

18 of Housing and Urban Development makes the determina19 tion in accordance with the provisions of section 202(b),

20 that the Organization is authorized to purchase and sell

21 mortgages and mortgage backed securities.

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

23 to the regulatory authority of the Office of Federal Hous24 ing Enterprise Oversight of the Department of Housing

25 and Urban Development with respect to all matters relat-
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1 ing to the financial safety and soundness of the Organiza2 tion.

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

4 the Director of the Office of Federal Housing Enterprise

5 Oversight shall be to ensure that the Organization is ade6 quately capitalized and operating safely as a Congression7 ally chartered body corporate.

8 (d) POWERS OF DIRECTOR OF OFHEO.—The Direc9 tor of the Office of Federal Housing Enterprise Oversight

10 shall have all of the exclusive powers granted the Director

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

12 Community Development Act of 1992, as determined by

13 the Director to be necessary or appropriate to regulate the

14 operations of the Organization.

15 (e) REPORTS TO DIRECTOR OF OFHEO.—

16 (1) The Organization shall submit to the Direc17 tor of the Office of Federal Housing Enterprise

18 Oversight annual reports of the financial condition

19 and operations of the Organization which shall be in

20 such form, contain such information, and be submit21 ted on such dates as the Director shall require.

22 (2) The Organization shall also submit to the

23 Director any other reports required by the Director

24 pursuant to section 1314 of the Housing and Com25 munity Development Act of 1992.
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1 (3) Each report shall contain a declaration by

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

3 officer designated by the Board of Directors of the

4 Organization to make such declaration, that the re5 port is true and correct to the best of such officer’s

6 knowledge and belief.

7 (f) FUNDING OFHEO OVERSIGHT.—

8 (1) The Director of the Office of Federal Hous9 ing Enterprise Oversight shall assess and collect

10 from the Organization such amounts as are nec11 essary to reimburse the Office for the reasonable

12 costs and expenses of the activities undertaken by

13 the Office to carry out the duty of the Director

14 under paragraph (2), including the costs of examina15 tions and overhead expenses.

16 (2) Annual assessments imposed by the Direc17 tor shall be—

18 (A) imposed prior to October 1 of each

19 year;

20 (B) collected at such time or times during

21 each assessment year as determined necessary

22 or appropriate by the Director;

23 (C) deposited into the Federal Housing

24 Enterprises Oversight Fund established by sec-
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1 tion 1316(f) of the Housing and Community

2 Development Act of 1992; and

3 (D) available, to the extent provided in ap4 propriations Acts, for carrying out the Direc5 tor’s responsibilities under this section.

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

7 Except for the authority of the Director of the Office

8 of Federal Housing Enterprise Oversight as provided in

9 section 401, the Secretary of Housing and Urban Develop10 ment shall have general regulatory power over the Organi11 zation and shall make such rules and regulations applica12 ble to the Organization as determined necessary or appro13 priate by the Secretary of Housing and Urban Develop14 ment to ensure that the purposes of this Act are accom15 plished.

16 TITLE V—FORMATION OF NEW

17 CORPORATION

18 SEC. 501. FORMATION OF NEW CORPORATION.

19 (a) IN GENERAL.—In order to continue the accom20 plishment of the purposes of this Act beyond the terms

21 of the Federal charter of the Organization, the Board of

22 Directors shall, not later than 10 years after the date of

23 enactment of this Act, cause the formation of a new cor24 poration under the laws of any Tribe, any State of the

25 United States, or the District of Columbia.
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1 (b) POWERS OF NEW CORPORATION NOT PRE2 SCRIBED.—Except as provided in this section, the new

3 corporation may have whatever corporate powers and at4 tributes permitted under the laws of the jurisdiction of its

5 incorporation which the Board of Directors shall deter6 mine, in its business judgment, to be appropriate.

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

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

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

10 any variation of either thereof.

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

12 (a) IN GENERAL.—Not later than [10] years after

13 the date of enactment of this Act, the Board of Directors

14 shall prepare, adopt, and submit to the Secretary of Hous15 ing and Urban Development and the Secretary of the

16 Treasury for approval, a plan for merging the Congres17 sionally chartered Organization into the nonfederally char18 tered new corporation.

19 (b) DESIGNATED MERGER DATE.—

20 (1) The Board of Directors shall establish the

21 designated merger date in the merger plan as a spe22 cific calendar date and time of day at which the

23 merger of the Organization into the new corporation

24 shall be effective.
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1 (2) The Board of Directors may change the

2 designated merger date in the merger plan by adopt3 ing an amended plan of merger.

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

5 designated merger date in the merger plan or any

6 amended merger plan shall be not later than 11

7 years after the date of enactment of this Act.

8 (4) The Board of Directors may adopt an

9 amended plan of merger that designates a date later

10 than 11 years after the date of enactment of this

11 Act if the Board of Directors submits to both the

12 Secretary of Housing and Urban Development and

13 the Secretary of the Treasury a report—

14 (A) stating that an orderly merger of the

15 Organization into the new corporation is not

16 feasible before the last date designated by the

17 Board of Directors;

18 (B) explaining why an orderly merger of

19 the Organization into the new corporation is

20 not feasible before the last date designated by

21 the Board of Directors;

22 (C) describing the steps that have been

23 taken to consummate an orderly merger of the

24 Organization into the new corporation not later
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1 than 11 years after the date of enactment of

2 this Act; and

3 (D) describing the steps that will be taken

4 to consummate an orderly and timely merger of

5 the Organization into the new corporation.

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

7 Board of Directors in an amended merger plan be

8 later than 12 years after the date of enactment of

9 this Act.

10 (6) In no case shall the consummation of an or11 derly and timely merger of the Organization into the

12 new corporation occur later than 13 years after the

13 date of enactment of this Act.

14 (c) GOVERNMENTAL APPROVALS OF MERGER PLAN

15 REQUIRED.—The merger plan or any amended merger

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

17 both the Secretary of Housing and Urban Development

18 and the Secretary of the Treasury.

19 (d) REVISION OF DISAPPROVED MERGER PLAN RE20 QUIRED.—If either the Secretary of Housing and Urban

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

22 disapprove the merger plan or any amended merger plan,

23 the disapproving Secretary or Secretaries shall so notify

24 the Organization and indicate the reasons for that dis25 approval, and the Organization shall submit to the Sec-
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1 retary or Secretaries an amended merger plan responsive

2 to such reasons within 30 days from the date of notifica3 tion of disapproval.

4 (e) NO STOCKHOLDER APPROVAL OF MERGER PLAN

5 REQUIRED.—No approval or consent of the stockholders

6 of the Organization shall be required to accomplish the

7 merger of the Organization into the new corporation.

8 SEC. 503. CONSUMMATION OF MERGER.

9 The Board of Directors shall cause the merger of the

10 Organization into the new corporation to be accomplished

11 according to the merger plan approved by the Secretary

12 of Housing and Urban Development and the Secretary of

13 the Treasury and all applicable requirements of the law

14 of the jurisdiction of incorporation of the new corporation.

15 SEC. 504. TRANSITION.

16 (a) CONTINUATION OF RIGHTS, DUTIES, AND RE17 STRICTIONS.—Except as provided in this section, the Or18 ganization shall, during the transition period, continue to

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

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

21 set forth in this Act.

22 (b) COLLATERALIZATION OF OUTSTANDING OBLIGA23 TIONS.—The Organization shall provide for all debt obli24 gations of the Organization which are outstanding on the

25 day before the designated merger date to be secured as
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1 to principal and interest by obligations of the United

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

3 The collateralization and the trust shall be subject to such

4 requirements, terms and conditions as the Secretary of the

5 Treasury deems necessary or appropriate.

6 (c) ISSUANCE OF NEW OBLIGATIONS DURING TRAN7 SITION PERIOD.—As needed to carry out the purposes for

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

9 transition period, continue to issue obligations under sec10 tion 303, provided that any new obligation issued during

11 the transition period shall mature before the designated

12 merger date.

13 SEC. 505. EFFECT OF MERGER.

14 (a) TRANSFER OF ASSETS AND LIABILITIES.—

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

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

17 whatever account, and all other choses in action and

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

19 to the Organization shall be transferred to and vest20 ed in the new corporation without further act or

21 deed, and title to any property, whether real, per22 sonal, or mixed, shall not in any way be impaired by

23 reason of the merger.

24 (2) At the designated merger date, the new cor25 poration shall be responsible and liable for all obliga-
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1 tions and liabilities of the Organization and neither

2 the rights of creditors nor any liens upon the prop3 erty of the Organization shall be impaired by the

4 merger.

5 (b) TERMINATION OF THE ORGANIZATION AND ITS

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

7 surviving corporation of the merger shall be the new cor8 poration, the Federal charter of the Organization shall

9 terminate, and the separate existence of the Organization

10 shall terminate.

11 (c) REFERENCES TO THE ORGANIZATION IN ACTS OF

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

13 any reference to the Organization in any Act of Congress

14 [or in any rule or regulation promulgated under any Act

15 of Congress] shall not be deemed to refer to the new cor16 poration.

17 (d) SAVINGS CLAUSE.—

18 (1) The merger of the Organization into the

19 new corporation shall not abate any proceeding com20 menced by or against the Organization before the

21 designated merger date, except that the new cor22 poration shall be substituted for the Organization as

23 a party to any such proceeding as of the designated

24 merger date.
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1 (2) All contracts and agreements to which the

2 Organization is a party and which are in effect on

3 the day before the designated merger date shall con4 tinue in effect according to their terms, except that

5 the new corporation shall be substituted for the Or6 ganization as a party to those contracts and agree7 ments as of the designated merger date.

8 TITLE VI—AUTHORIZATIONS OF

9 APPROPRIATIONS

10 SEC. 601. AUTHORIZATION OF APPROPRIATIONS FOR NA11 TIVE AMERICAN FINANCIAL INSTITUTIONS.

12 There is authorized to be appropriated, without fiscal

13 year limitation, to the Fund $20,000,000 to provide finan14 cial assistance to Native American Financial Institutions.

15 To the extent that a Native American Financial Institu16 tion receives a portion of such appropriation, such monies

17 shall not be considered as matching funds required of the

18 Native American Financial Institution under the Commu19 nity Development Banking and Financial Institutions Act.

20 SEC. 602. AUTHORIZATION OF APPROPRIATIONS FOR OR21 GANIZATION.

22 The Secretary of Housing and Urban Development

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

24 in advance in appropriation Acts, to provide up to

25 $10,000,000 to the Fund for the funding of a cooperative
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1 agreement to be entered into by the Fund and the Organi2 zation for technical assistance and other services to be

3 provided by the Organization to the Native American Fi4 nancial Institutions.

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