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[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1461 Introduced in House (IH)]

109th CONGRESS
  1st Session
                                H. R. 1461

    To reform the regulation of certain housing-related Government-
             sponsored enterprises, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             April 5, 2005

Mr. Baker (for himself, Mr. Oxley, Mr. Ryun of Kansas, Mr. Hensarling, 
Mr. Jones of North Carolina, Mr. Davis of Kentucky, Mr. Fitzpatrick of 
 Pennsylvania, and Mr. Shays) introduced the following bill; which was 
            referred to the Committee on Financial Services

_______________________________________________________________________

                                 A BILL

 
    To reform the regulation of certain housing-related Government-
             sponsored enterprises, and for other purposes.

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

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Federal Housing 
Finance Reform Act of 2005''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title and table of contents.
Sec. 2. Definitions.
  TITLE I--REFORM OF REGULATION OF ENTERPRISES AND FEDERAL HOME LOAN 
                                 BANKS

            Subtitle A --Improvement of Safety and Soundness

Sec. 101. Establishment of the Federal Housing Finance Agency.
Sec. 102. Duties and authorities of Director.
Sec. 103. Housing Finance Oversight Board.
Sec. 104. Authority to require reports by regulated entities.
Sec. 105. Assessments.
Sec. 106. Examiners and accountants.
Sec. 107. Prohibition and withholding of executive compensation.
Sec. 108. Reviews of regulated entities.
Sec. 109. Regulations and orders.
Sec. 110. Risk-based capital requirements.
Sec. 111. Minimum and critical capital levels.
Sec. 112. Review of and authority over enterprise assets and 
                            obligations.
Sec. 113. Corporate governance of enterprises.
Sec. 114. Conforming amendments.
             Subtitle B--Improvement of Mission Supervision

Sec. 121. Transfer of program and activities approval and housing goal 
                            oversight.
Sec. 122. Review by director of new programs and activities of 
                            enterprises.
Sec. 123. Conforming loan limits.
Sec. 124. Annual housing report regarding regulated entities.
Sec. 125. Establishment of housing goals.
Sec. 126. Home purchase goal and additions, modifications, and 
                            rescissions to goals.
Sec. 127. Other requirements.
Sec. 128. Monitoring and enforcing compliance with housing goals.
Sec. 129. Enforcement.
Sec. 130. Conforming amendments.
                  Subtitle C--Prompt Corrective Action

Sec. 141. Capital classifications.
Sec. 142. Supervisory actions applicable to undercapitalized regulated 
                            entities.
Sec. 143. Supervisory actions applicable to significantly 
                            undercapitalized regulated entities.
Sec. 144. Authority over critically undercapitalized regulated 
                            entities.
Sec. 145. Conforming amendments.
                    Subtitle D--Enforcement Actions

Sec. 161. Cease-and-desist proceedings.
Sec. 162. Temporary cease-and-desist proceedings.
Sec. 163. Enforcement and jurisdiction.
Sec. 164. Civil money penalties.
Sec. 165. Removal and prohibition authority.
Sec. 166. Criminal penalty.
Sec. 167. Conforming amendments.
                     Subtitle E--General Provisions

Sec. 181. Presidentially appointed Directors of enterprises.
Sec. 182. Report on portfolio operations, safety and soundness, and 
                            mission of enterprises.
Sec. 183. Conforming and technical amendments.
Sec. 184. Effective date.
                   TITLE II--FEDERAL HOME LOAN BANKS

Sec. 201. Definitions.
Sec. 202. Directors.
Sec. 203. Federal Housing Finance Agency oversight of Federal Home Loan 
                            Banks.
Sec. 204. Debt issuing facility.
Sec. 205. Securities and Exchange Commission disclosure.
Sec. 206. Community financial institution members.
TITLE III--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY OF OFFICE OF 
 FEDERAL HOUSING ENTERPRISE OVERSIGHT AND FEDERAL HOUSING FINANCE BOARD

       Subtitle A--Office of Federal Housing Enterprise Oversight

Sec. 301. Abolishment of OFHEO.
Sec. 302. Continuation and coordination of certain regulations.
Sec. 303. Transfer and rights of employees of OFHEO.
Sec. 304. Transfer of property and facilities.
               Subtitle B--Federal Housing Finance Board

Sec. 321. Abolishment of the Federal Housing Finance Board.
Sec. 322. Continuation and coordination of certain regulations.
Sec. 323. Transfer and rights of employees of the Federal Housing 
                            Finance Board.
Sec. 324. Transfer of property and facilities.

SEC. 2. DEFINITIONS.

    Section 1303 of the Housing and Community Development Act of 1992 
(12 U.S.C. 4502) is amended--
            (1) by striking ``an enterprise'' each place such term 
        appears (except in paragraphs (4), (13)(A), and (18)) and 
        inserting ``a regulated entity'';
            (2) by striking ``the enterprise'' each place such term 
        appears (except in paragraphs (4) and (18)) and inserting ``the 
        regulated entity'';
            (3) in paragraph (5), by striking ``Office of Federal 
        Housing Enterprise Oversight of the Department of Housing and 
        Urban Development'' and inserting ``Federal Housing Finance 
        Agency'';
            (4) in each of paragraphs (8), (9), (10), and (19), by 
        striking ``Secretary'' each place that term appears and 
        inserting ``Director'';
            (5) in paragraph (13), by inserting ``, with respect to an 
        enterprise,'' after ``means'';
            (6) by redesignating paragraphs (16) through (19) as 
        paragraphs (19) through (22), respectively;
            (7) by striking paragraphs (14) and (15) and inserting the 
        following new paragraphs:
            ``(17) Regulated entity.--The term `regulated entity' 
        means--
                    ``(A) the Federal National Mortgage Association and 
                any affiliate thereof;
                    ``(B) the Federal Home Loan Mortgage Corporation 
                and any affiliate thereof; and
                    ``(C) each Federal home loan bank.
            ``(18) Regulated entity-affiliated party.--The term 
        `regulated entity-affiliated party' means--
                    ``(A) any director, officer, employee, or 
                controlling stockholder of, or agent for, a regulated 
                entity;
                    ``(B) any shareholder, affiliate, consultant, or 
                joint venture partner of a regulated entity, and any 
                other person, as determined by the Director (by 
                regulation or on a case-by-case basis) that 
                participates in the conduct of the affairs of a 
                regulated entity; and
                    ``(C) any independent contractor for a regulated 
                entity (including any attorney, appraiser, or 
                accountant), if--
                            ``(i) the independent contractor knowingly 
                        or recklessly participates in--
                                    ``(I) any violation of any law or 
                                regulation;
                                    ``(II) any breach of fiduciary 
                                duty; or
                                    ``(III) any unsafe or unsound 
                                practice; and
                            ``(ii) such violation, breach, or practice 
                        caused, or is likely to cause, more than a 
                        minimal financial loss to, or a significant 
                        adverse effect on, the regulated entity; and
                    ``(D) any not-for-profit corporation that receives 
                its principal funding, on an ongoing basis, from any 
                regulated entity.'';
            (8) by redesignating paragraphs (2) through (13) as 
        paragraphs (5) through (16), respectively; and
            (9) by inserting after paragraph (1) the following new 
        paragraphs:
            ``(2) Agency.--The term `Agency' means the Federal Housing 
        Finance Agency.
            ``(3) Authorizing statutes.--The term `authorizing 
        statutes' means--
                    ``(A) the Federal National Mortgage Association 
                Charter Act;
                    ``(B) the Federal Home Loan Mortgage Corporation 
                Act; and
                    ``(C) the Federal Home Loan Bank Act.
            ``(4) Board.--The term `Board' means the Housing Finance 
        Oversight Board established under section 1313.''.

  TITLE I--REFORM OF REGULATION OF ENTERPRISES AND FEDERAL HOME LOAN 
                                 BANKS

            Subtitle A --Improvement of Safety and Soundness

SEC. 101. ESTABLISHMENT OF THE FEDERAL HOUSING FINANCE AGENCY.

    The Housing and Community Development Act of 1992 (12 U.S.C. 4501 
et seq.) is amended by striking sections 1311 and 1312 and inserting 
the following:

``SEC. 1311. ESTABLISHMENT OF THE FEDERAL HOUSING FINANCE AGENCY.

    ``(a) Establishment.--There is established the Federal Housing 
Finance Agency, which shall be an independent agency of the Federal 
Government.
    ``(b) General Supervisory and Regulatory Authority.--
            ``(1) In general.--Each regulated entity shall, to the 
        extent provided in this title, be subject to the supervision 
        and regulation of the Agency.
            ``(2) Authority over fannie mae and freddie mac, federal 
        home loan banks, and federal home loan bank finance 
        corporation.--The Director of the Federal Housing Finance 
        Agency shall have general supervisory and regulatory authority 
        over each regulated entity and the Federal Home Loan Bank 
        Finance Corporation, and shall exercise such general regulatory 
        authority, including such duties and authorities set forth 
        under section 1313 of this Act, to ensure that the purposes of 
        this Act, the authorizing statutes, and any other applicable 
        law are carried out.
    ``(c) Savings Provision.--The authority of the Director to take 
actions under subtitles B and C shall not in any way limit the general 
supervisory and regulatory authority granted to the Director under 
subsection (b).

``SEC. 1312. DIRECTOR.

    ``(a) Establishment of Position.--There is established the position 
of the Director of the Federal Housing Finance Agency, who shall be the 
head of the Agency.
    ``(b) Appointment; Term.--
            ``(1) Appointment.--The Director shall be appointed by the 
        President, by and with the advice and consent of the Senate, 
        from among individuals who are citizens of the United States, 
        have a demonstrated understanding of financial management or 
        oversight, and have a demonstrated understanding of capital 
        markets, including the mortgage securities markets and housing 
        finance.
            ``(2) Term.--The Director shall be appointed for a term of 
        5 years.
            ``(3) Vacancy.--A vacancy in the position of Director that 
        occurs before the expiration of the term for which a Director 
        was appointed shall be filled in the manner established under 
        paragraph (1), and the Director appointed to fill such vacancy 
        shall be appointed only for the remainder of such term.
            ``(4) Service after end of term.--An individual may serve 
        as the Director after the expiration of the term for which 
        appointed until a successor has been appointed.
            ``(5) Transitional provision.--Notwithstanding paragraphs 
        (1) and (2), the person serving as the Director of the Office 
        of Federal Housing Enterprise Oversight of the Department of 
        Housing and Urban Development on the effective date under 
        section 184 of the Federal Housing Finance Reform Act of 2005, 
        shall serve as the Director until a successor has been 
        appointed under paragraph (1).
    ``(c) Deputy Director of the Division of Enterprise Regulation.--
            ``(1) In general.--The Agency shall have a Deputy Director 
        of the Division of Enterprise Regulation, who shall be 
        designated by the Director from among individuals who are 
        citizens of the United States, have a demonstrated 
        understanding of financial management or oversight, and have a 
        demonstrated understanding of mortgage securities markets and 
        housing finance.
            ``(2) Functions.--The Deputy Director of the Division of 
        Enterprise Regulation shall have such functions, powers, and 
        duties with respect to the oversight of the enterprises as the 
        Director shall prescribe.
    ``(d) Deputy Director of the Division of Federal Home Loan Bank 
Regulation.--
            ``(1) In general.--The Agency shall have a Deputy Director 
        of the Division of Federal Home Loan Bank Regulation, who shall 
        be designated by the Director from among individuals who are 
        citizens of the United States, have a demonstrated 
        understanding of financial management or oversight, and have a 
        demonstrated understanding of the Federal Home Loan Bank System 
        and housing finance.
            ``(2) Functions.--The Deputy Director of the Division of 
        Federal Home Loan Bank Regulation shall have such functions, 
        powers, and duties with respect to the oversight of the Federal 
        home loan banks as the Director shall prescribe.
    ``(e) Deputy Director for Housing.--
            ``(1) In general.--The Agency shall have a Deputy Director 
        for Housing, who shall be designated by the Director from among 
        individuals who are citizens of the United States, and have a 
        demonstrated understanding of the housing markets and housing 
        finance.
            ``(2) Functions.--The Deputy Director for Housing shall 
        have such functions, powers, and duties with respect to the 
        oversight of the housing mission and goals of the enterprises 
        as the Director shall prescribe.
    ``(f) Acting Director.--In the event of the death, resignation, 
sickness, or absence of the Director, the Board shall, by a majority 
vote, designate either the Deputy Director of the Division of 
Enterprise Regulation, the Deputy Director of the Division of Federal 
Home Loan Bank Regulation, or the Deputy Director for Housing, to serve 
as acting Director until the return of the Director, or the appointment 
of a successor pursuant to subsection (b).
    ``(g) Limitations.--The Director and each of the Deputy Directors 
may not--
            ``(1) have any direct or indirect financial interest in any 
        regulated entity or regulated entity-affiliated party;
            ``(2) hold any office, position, or employment in any 
        regulated entity or regulated entity-affiliated party; or
            ``(3) have served as an executive officer or director of 
        any regulated entity, or regulated entity-affiliated party, at 
        any time during the 3-year period ending on the date of 
        appointment of such individual as Director or Deputy 
        Director.''.

SEC. 102. DUTIES AND AUTHORITIES OF DIRECTOR.

    (a) In General.--The Housing and Community Development Act of 1992 
(12 U.S.C. 4513) is amended by striking section 1313 and inserting the 
following new sections:

``SEC. 1313. DUTIES AND AUTHORITIES OF DIRECTOR.

    ``(a) Duties.--
            ``(1) Principal duties.--The principal duties of the 
        Director shall be--
                    ``(A) to oversee the prudential operations of each 
                regulated entity, on a consolidated basis; and
                    ``(B) to ensure that--
                            ``(i) each regulated entity operates in a 
                        safe and sound manner, including maintenance of 
                        adequate capital and internal controls;
                            ``(ii) the operations and activities of 
                        each regulated entity foster liquid, efficient, 
                        competitive, and resilient national housing 
                        finance markets (including activities relating 
                        to mortgages on housing for low- and moderate- 
                        income families involving a reasonable economic 
                        return that may be less than the return earned 
                        on other activities);
                            ``(iii) each regulated entity complies with 
                        this title and the rules, regulations, 
                        guidelines, and orders issued under this title 
                        and the authorizing statutes; and
                            ``(iv) each regulated entity carries out 
                        its statutory mission only through activities 
                        that are consistent with this title and the 
                        authorizing statutes.
            ``(2) Scope of authority.--The authority of the Director 
        shall include the authority--
                    ``(A) to review and, if warranted based on the 
                principal duties described in paragraph (1), reject any 
                acquisition or transfer of a controlling interest in an 
                enterprise; and
                    ``(B) to exercise such incidental powers as may be 
                necessary or appropriate to fulfill the duties and 
                responsibilities of the Director in the supervision and 
                regulation of each regulated entity.
    ``(b) Delegation of Authority.--The Director may delegate to 
officers and employees of the Agency any of the functions, powers, or 
duties of the Director, as the Director considers appropriate.
    ``(c) Litigation Authority.--
            ``(1) In general.--In enforcing any provision of this 
        title, any regulation or order prescribed under this title, or 
        any other provision of law, rule, regulation, or order, or in 
        any other action, suit, or proceeding to which the Director is 
        a party or in which the Director is interested, and in the 
        administration of conservatorships and receiverships, the 
        Director may act in the Director's own name and through the 
        Director's own attorneys.
            ``(2) Subject to suit.--Except as otherwise provided by 
        law, the Director shall be subject to suit (other than suits on 
        claims for money damages) by a regulated entity or director or 
        officer thereof with respect to any matter under this title or 
        any other applicable provision of law, rule, order, or 
        regulation under this title, in the United States district 
        court for the judicial district in which the regulated entity 
        has its principal place of business, or in the United States 
        District Court for the District of Columbia, and the Director 
        may be served with process in the manner prescribed by the 
        Federal Rules of Civil Procedure.

``SEC. 1313A. PRUDENTIAL MANAGEMENT AND OPERATIONS STANDARDS.

    ``(a) Standards.--The Director shall establish standards, by 
regulation, guideline, or order, for each regulated entity relating 
to--
            ``(1) adequacy of internal controls and information systems 
        taking into account the nature and scale of business 
        operations;
            ``(2) independence and adequacy of internal audit systems;
            ``(3) management of credit and counterparty risk, including 
        systems to identify concentrations of credit risk and 
        prudential limits to restrict exposure of the regulated entity 
        to a single counterparty or groups of related counterparties;
            ``(4) management of interest rate risk exposure;
            ``(5) management of market risk, including standards that 
        provide for systems that accurately measure, monitor, and 
        control market risks and, as warranted, that establish 
        limitations on market risk;
            ``(6) adequacy and maintenance of liquidity and reserves;
            ``(7) management of any asset and investment portfolio;
            ``(8) investments and acquisitions by a regulated entity, 
        to ensure that they are consistent with the purposes of this 
        Act and the Federal National Mortgage Association Charter Act, 
        the Federal Home Loan Mortgage Corporation Act, or the Federal 
        Home Loan Bank Act, as appropriate;
            ``(9) maintenance of adequate records, in accordance with 
        consistent accounting policies and practices that enable the 
        Director to evaluate the financial condition of the regulated 
        entity;
            ``(10) issuance of subordinated debt by that particular 
        regulated entity, as the Director considers necessary;
            ``(11) overall risk management processes, including 
        adequacy of oversight by senior management and the board of 
        directors and of processes and policies to identify, measure, 
        monitor, and control material risks, including reputational 
        risks, and for adequate, well-tested business resumption plans 
        for all major systems with remote site facilities to protect 
        against disruptive events; and
            ``(12) such other operational and management standards as 
        the Director determines to be appropriate.
    ``(b) Failure to Meet Standards.--
            ``(1) Plan requirement.--
                    ``(A) In general.--If the Director determines that 
                a regulated entity fails to meet any standard 
                established under subsection (a)--
                            ``(i) if such standard is established by 
                        regulation, the Director shall require the 
                        regulated entity to submit an acceptable plan 
                        to the Director within the time allowed under 
                        subparagraph (C); and
                            ``(ii) if such standard is established by 
                        guideline, the Director may require the 
                        regulated entity to submit a plan described in 
                        clause (i).
                    ``(B) Contents.--Any plan required under 
                subparagraph (A) shall specify the actions that the 
                regulated entity will take to correct the deficiency. 
                If the regulated entity is undercapitalized, the plan 
                may be a part of the capital restoration plan for the 
                regulated entity under section 1369C.
                    ``(C) Deadlines for submission and review.--The 
                Director shall by regulation establish deadlines that--
                            ``(i) provide the regulated entities with 
                        reasonable time to submit plans required under 
                        subparagraph (A), and generally require a 
                        regulated entity to submit a plan not later 
                        than 30 days after the Director determines that 
                        the entity fails to meet any standard 
                        established under subsection (a); and
                            ``(ii) require the Director to act on plans 
                        expeditiously, and generally not later than 30 
                        days after the plan is submitted.
            ``(2) Required order upon failure to submit or implement 
        plan.--If a regulated entity fails to submit an acceptable plan 
        within the time allowed under paragraph (1)(C), or fails in any 
        material respect to implement a plan accepted by the Director, 
        the following shall apply:
                    ``(A) Required correction of deficiency.--The 
                Director shall, by order, require the regulated entity 
                to correct the deficiency.
                    ``(B) Other authority.--The Director may, by order, 
                take one or more of the following actions until the 
                deficiency is corrected:
                            ``(i) Prohibit the regulated entity from 
                        permitting its average total assets (as such 
                        term is defined in section 1316(b)) during any 
                        calendar quarter to exceed its average total 
                        assets during the preceding calendar quarter, 
                        or restrict the rate at which the average total 
                        assets of the entity may increase from one 
                        calendar quarter to another.
                            ``(ii) Require the regulated entity--
                                    ``(I) in the case of an enterprise, 
                                to increase its ratio of core capital 
                                to assets.
                                    ``(II) in the case of a Federal 
                                home loan bank, to increase its ratio 
                                of total capital (as such term is 
                                defined in section 6(a)(5) of the 
                                Federal Home Loan Bank Act (12 U.S.C. 
                                1426(a)(5)) to assets.
                            ``(iii) Require the regulated entity to 
                        take any other action that the Director 
                        determines will better carry out the purposes 
                        of subtitle C than any of the actions described 
                        in this subparagraph
            ``(3) Mandatory restrictions.--In complying with paragraph 
        (2), the Director shall take one or more of the actions 
        described in clauses (i) through (iii) of paragraph (2)(B) if--
                    ``(A) the Director determines that the regulated 
                entity fails to meet any standard prescribed under 
                subsection (a);
                    ``(B) the regulated entity has not corrected the 
                deficiency; and
                    ``(C) during the 18-month period before the date on 
                which the regulated entity first failed to meet the 
                standard, the entity underwent extraordinary growth, as 
                defined by the Director.
    ``(c) Other Enforcement Authority not Affected.--The authority of 
the Director under this section is in addition to any other authority 
of the Director.''.
    (b) Independence in Congressional Testimony and Recommendations.--
Section 111 of Public Law 93-495 (12 U.S.C. 250) is amended by striking 
``the Federal Housing Finance Board'' and inserting ``the Director of 
the Federal Housing Finance Agency''.

SEC. 103. HOUSING FINANCE OVERSIGHT BOARD.

    (a) In General.--Title XIII of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4501 et seq.) is amended by 
inserting after section 1313A, as added by section 102 of this Act, the 
following new section:

``SEC. 1313B. HOUSING FINANCE OVERSIGHT BOARD.

    ``(a) In General.--There is established the Housing Finance 
Oversight Board.
    ``(b) Duties.--The Board shall advise the Director with respect to 
overall strategies and policies in carrying out the duties of the 
Director under this title. Except as otherwise provided under this Act, 
the Board shall not exercise any executive authority.
    ``(c) Composition.--The Board shall be comprised of 5 members, as 
follows:
            ``(1) One member shall be the Director, who shall serve as 
        the Chairperson of the Board.
            ``(2) One member shall be the Secretary of the Treasury or 
        the designee of the Secretary.
            ``(3) One member shall be the Secretary of Housing and 
        Urban Development or the designee of the Secretary.
            ``(4) Two members shall be appointed by the President, by 
        and with the advice and consent of the Senate, who shall 
        include--
                    ``(A) one individual who has extensive experience 
                and expertise in the capital markets (including debt 
                markets), the secondary mortgage market, and mortgage-
                backed securities; and
                    ``(B) one individual who has extensive experience 
                and expertise in mortgage finance (including single 
                family and multifamily housing mortgage finance), 
                development of affordable housing, and economic 
                development and revitalization.
    ``(d) Full-Time Members and Staff.--
            ``(1) Full-time members.--The members of the Board pursuant 
        to subsection (c)(4) shall serve on a full-time basis.
            ``(2) Staff.--The Board may appoint and fix the 
        compensation of such staff as the Board considers necessary to 
        carry out the functions of the Board.
    ``(e) Meetings.--
            ``(1) In general.--The Board shall meet upon notice by the 
        Director, but in no event shall the Board meet less frequently 
        than once every 3 months.
            ``(2) Special meetings.--Any member of the Board may, upon 
        giving written notice to the Director, require a special 
        meeting of the Board, which shall be convened by the Director 
        within 30 days after such notice.
    ``(f) Testimony.--On an annual basis, the Board shall testify 
before Congress regarding--
            ``(1) the safety and soundness of the regulated entities;
            ``(2) any material deficiencies in the conduct of the 
        operations of the regulated entities;
            ``(3) the overall operational status of the regulated 
        entities;
            ``(4) an evaluation of the performance of the regulated 
        entities in carrying out their respective missions;
            ``(5) operations, resources, and performance of the Agency 
        and the Board; and
            ``(6) such other matters relating to the Agency, the Board, 
        and the regulated entities, and their fulfillment of their 
        missions, as the Board determines appropriate.
    ``(g) Costs.--Costs of the Board, including staff, shall be paid by 
the Agency as a cost and expense of the Agency.''.
    (b) Annual Report of the Director.--Section 1319B(a) of the Housing 
and Community Development Act of 1992 (12 U.S.C. 4521 (a)) is amended--
            (1) in paragraph (3), by striking ``and'' at the end; and
            (2) by striking paragraph (4) and inserting the following 
        new paragraphs:
            ``(4) an assessment of the Board with respect to--
                    ``(A) the safety and soundness of the regulated 
                entities;
                    ``(B) any material deficiencies in the conduct of 
                the operations of the regulated entities;
                    ``(C) the overall operational status of the 
                regulated entities;
                    ``(D) an evaluation of the performance of the 
                regulated entities in carrying out their missions, 
                including compliance of the enterprises with the 
                housing goals under subpart B of part 2 of this 
                subtitle and compliance of the Federal home loan banks 
                with the community investment and affordable housing 
                programs under subsections (i) and (j) of section 10 of 
                the Federal Home Loan Bank Act;
                    ``(E) an evaluation of the performance of the 
                Agency in fulfilling its duties and responsibilities 
                under law; and
                    ``(F) such other matters relating to the Board and 
                the fulfillment of its duties as the Board considers 
                appropriate;
            ``(5) operations, resources, and performance of the Agency; 
        and
            ``(6) such other matters relating to the Agency and its 
        fulfillment of its mission.''.

SEC. 104. AUTHORITY TO REQUIRE REPORTS BY REGULATED ENTITIES.

    Section 1314 of the Housing and Community Development Act of 1992 
(12 U.S.C. 4514) is amended--
            (1) in the section heading, by striking ``enterprises'' and 
        inserting ``regulated entities''; and
            (2) in subsection (a)--
                    (A) in the subsection heading, by striking 
                ``Special Reports and Reports of Financial Condition'' 
                and inserting ``Regular and Special Reports'';
                    (B) in paragraph (1)--
                            (i) in the paragraph heading, by striking 
                        ``Financial condition'' and inserting ``Regular 
                        reports''; and
                            (ii) by striking ``reports of financial 
                        condition and operations'' and inserting 
                        ``regular reports on the condition (including 
                        financial condition), management, activities, 
                        or operations of the regulated entity, as the 
                        Director considers appropriate''; and
                    (C) in paragraph (2), after ``submit special 
                reports'' insert ``on any of the topics specified in 
                paragraph (1) or such other topics''.

SEC. 105. ASSESSMENTS.

    Section 1316 of the Housing and Community Development Act of 1992 
(12 U.S.C. 4516) is amended--
            (1) by striking subsection (a) and inserting the following 
        new subsection:
    ``(a) Annual Assessments.--The Director shall establish and collect 
from the regulated entities annual assessments in an amount not 
exceeding the amount sufficient to provide for reasonable costs and 
expenses of the Agency, including--
            ``(1) the expenses of any examinations under section 1317 
        of this Act and under section 20 of the Federal Home Loan Bank 
        Act;
            ``(2) the expenses of obtaining any reviews and credit 
        assessments under section 1319; and
            ``(3) such amounts in excess of actual expenses for any 
        given year as deemed necessary by the Director to maintain a 
        working capital fund in accordance with subsection (e).'';
            (2) in subsection (b)--
                    (A) in the subsection heading, by striking 
                ``Enterprises'' and inserting ``Regulated Entities'';
                    (B) by realigning paragraph (2) two ems from the 
                left margin, so as to align the left margin of such 
                paragraph with the left margins of paragraph (1);
                    (C) in paragraph (1)--
                            (i) by striking ``Each enterprise'' and 
                        inserting ``Each regulated entity'';
                            (ii) by striking ``each enterprise'' and 
                        inserting ``each regulated entity''; and
                            (iii) by striking ``both enterprises'' and 
                        inserting ``all of the regulated entities''; 
                        and
                    (D) in paragraph (3)----
                            (i) in subparagraph (B), by striking 
                        ``subparagraph (A)'' and inserting ``clause 
                        (i)'';
                            (ii) by redesignating subparagraphs (A), 
                        (B), and (C) as clauses (i), (ii) and (ii), 
                        respectively, and realigning such clauses, as 
                        so redesignated, so as to be indented 6 ems 
                        from the left margin;
                            (iii) by striking the matter that precedes 
                        clause (i), as so redesignated, and inserting 
                        the following:
            ``(3) Definition of total assets.--For purposes of this 
        section, the term `total assets' means as follows:
                    ``(A) Enterprises.--With respect to an enterprise, 
                the sum of--''; and
                            (iv) by adding at the end the following new 
                        subparagraph:
                    ``(B) Federal home loan banks.--With respect to a 
                Federal home loan bank, the total assets of the Bank, 
                as determined by the Director in accordance with 
                generally accepted accounting principles.''.
            (3) in subsection (c), by inserting after the period at the 
        end the following: ``The Director may adjust the amounts of any 
        semiannual assessments for an assessment under subsection (a) 
        that are to be paid pursuant to subsection (b) by a regulated 
        entity, as necessary in the discretion of the Director, to 
        ensure that the costs of enforcement activities under subtitles 
        B and C for a regulated entity are borne only by that 
        entity.'';
            (4) in subsection (d), by striking ``If'' and inserting 
        ``Except with respect to amounts collected pursuant to 
        subsection (a)(3), if''; and
            (5) by striking subsections (e) through (g) and inserting 
        the following new subsections:
    ``(e) Working Capital Fund.--At the end of each year for which an 
assessment under this section is made, the Director shall remit to each 
regulated entity any amount of assessment collected from such regulated 
entity that is attributable to subsection (a)(3) and is in excess of 
the amount the Director deems necessary to maintain a working capital 
fund.
    ``(f) Treatment of Assessments.--
            ``(1) Deposit.--Amounts received by the Director from 
        assessments under this section may be deposited in the manner 
        provided in section 5234 of the Revised Statutes (12 U.S.C. 
        192) with respect to assessments by the Comptroller of the 
        Currency.
            ``(2) Not government funds.--The amounts received by the 
        Director from any assessment under this section shall not be 
        construed to be Government or public funds or appropriated 
        money.
            ``(3) No apportionment of funds.--Notwithstanding any other 
        provision of law, the amounts received by the Director from any 
        assessment under this section shall not be subject to 
        apportionment for the purpose of chapter 15 of title 31, United 
        States Code, or under any other authority.
            ``(4) Use of funds.--The Director may use any amounts 
        received by the Director from assessments under this section 
        for compensation of the Director and other employees of the 
        Agency and for all other expenses of the Director and the 
        Agency.
            ``(5) Availability of oversight fund amounts.--
        Notwithstanding any other provision of law, any amounts 
        remaining in the Federal Housing Enterprises Oversight Fund 
        established under this section (as in effect before the 
        effective date under section 184 of the Federal Housing Finance 
        Reform Act of 2005), and any amounts remaining from assessments 
        on the Federal Home Loan banks pursuant to section 18(b) of the 
        Federal Home Loan Bank Act (12 U.S.C. 1438(b)), shall, upon 
        such effective date, be treated for purposes of this subsection 
        as amounts received from assessments under this section.
    ``(g) Budget and Financial Reports.--
            ``(1) Financial operating plans and forecasts.--The 
        Director shall provide to the Director of the Office of 
        Management and Budget copies of the Director's financial 
        operating plans and forecasts as prepared by the Director in 
        the ordinary course of the Agency's operations, and copies of 
        the quarterly reports of the Agency's financial condition and 
        results of operations as prepared by the Director in the 
        ordinary course of the Agency's operations.
            ``(2) Rule of construction.--This subsection may not be 
        construed as implying any obligation on the part of the 
        Director to consult with or obtain the consent or approval of 
        the Director of the Office of Management and Budget with 
        respect to any reports, plans, forecasts, or other information 
        referred to in paragraph (1) or any jurisdiction or oversight 
        over the affairs or operations of the Agency.
    ``(h) Audit of Agency.--
            ``(1) In general.--The financial transactions of the Agency 
        shall be audited by the Government Accountability Office in 
        accordance with the principles and procedures applicable to 
        commercial corporate transactions and under such rules and 
        regulations as may be prescribed by the Comptroller General of 
        the United States. The audit shall be conducted at the place or 
        places where accounts of the Agency are normally kept. The 
        representatives of the Government Accountability Office shall 
        have access to all books, accounts, records, reports, files, 
        and all other papers, things, or property belonging to or in 
        use by the Agency pertaining to its financial transactions and 
        necessary to facilitate the audit, and they shall be afforded 
        full facilities for verifying transactions with the balances or 
        securities held by depositaries, fiscal agents, and custodians. 
        All such books, accounts, records, reports, files, papers, and 
        property of the Agency shall remain in possession and custody 
        of the Agency. The Agency shall be audited at least once in 
        every three years.
            ``(2) Report.--A report of each audit conducted under this 
        subsection shall be made by the Comptroller General to the 
        Congress not later than six and one-half months following the 
        close of the last year covered by such audit. The report to the 
        Congress shall set forth the scope of the audit and shall 
        include a statement of assets and liabilities and surplus or 
        deficit; a statement of surplus or deficit analysis; a 
        statement of income and expenses; a statement of sources and 
        application of funds and such comments and information as may 
        be deemed necessary to inform Congress of the financial 
        operations and condition of the Agency, together with such 
        recommendations with respect thereto as the Comptroller General 
        may deem advisable. The report shall also show specifically any 
        program, expenditure, or other financial transaction or 
        undertaking observed in the course of the audit, which, in the 
        opinion of the Comptroller General, has been carried on or made 
        without authority of law. A copy of each report shall be 
        furnished to the President and to the Agency at the time 
        submitted to the Congress.
            ``(3) Assistance and costs.--For the purpose of conducting 
        an audit under this subsection, the Comptroller General may, in 
        the discretion of the Comptroller General, employ by contract, 
        without regard to section 5 of title 41, professional services 
        of firms and organizations of certified public accountants, 
        with the concurrence of the Agency, for temporary periods or 
        for special purposes. The Agency shall reimburse the Government 
        Accountability Office for the cost of any such audit as billed 
        therefor by the Comptroller General, and the Government 
        Accountability Office shall deposit the sums so reimbursed into 
        the Treasury as miscellaneous receipts.''.

SEC. 106. EXAMINERS AND ACCOUNTANTS.

    (a) Examinations.--Section 1317 of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4517) is amended--
            (1) in subsection (b)--
                    (A) by inserting ``of a regulated entity'' after 
                ``under this section''; and
                    (B) by striking ``to determine the condition of an 
                enterprise for the purpose of ensuring its financial 
                safety and soundness'' and inserting ``or appropriate'' 
                ; and
            (2) in subsection (c)--
                    (A) in the second sentence--
                            (i) by striking ``The'' and inserting 
                        ``During the 3-year period that begins upon the 
                        date of the enactment of the Federal Housing 
                        Finance Reform Act of 2005, the''; and
                            (ii) by inserting ``to conduct examinations 
                        under this section'' before the period; and
                    (B) in the third sentence, by striking ``from 
                amounts available in the Federal Housing Enterprises 
                Oversight Fund''.
    (b) Enhanced Authority to Hire Examiners and Accountants.--Section 
1317 of the Housing and Community Development Act of 1992 (12 U.S.C. 
4517) is amended by adding at the end the following new subsection:
    ``(g) Appointment of Accountants, Economists, and Examiners.--
            ``(1) Applicability.--This section applies with respect to 
        any position of examiner, accountant, and economist at the 
        Agency, with respect to supervision and regulation of the 
        regulated entities, that is in the competitive service.
            ``(2) Appointment authority.--The Director may appoint 
        candidates to any position described in paragraph (1)--
                    ``(A) in accordance with the statutes, rules, and 
                regulations governing appointments in the excepted 
                service; and
                    ``(B) notwithstanding any statutes, rules, and 
                regulations governing appointments in the competitive 
                service.''.
    (c) Repeal.--Section 20 of the Federal Home Loan Bank Act (12 
U.S.C. 1440) is amended--
            (1) in the section heading, by striking ``reports'' and 
        inserting ``gao audits'';
            (2) in the third sentence, by striking ``the Board and'' 
        each place such term appears; and
            (3) by striking the first two sentences and inserting the 
        following: ``The Federal home loan banks shall be subject to 
        examinations by the Director to the extent provided in section 
        1317 of the Federal Housing Enterprises Financial Safety and 
        Soundness Act of 1992 (12 U.S.C. 4517).''.
    (d) Effective Date.--This section and the amendments made by this 
section shall take effect on the date of the enactment of this Act.

SEC. 107. PROHIBITION AND WITHHOLDING OF EXECUTIVE COMPENSATION.

    (a) In General.--Section 1318 of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4518) is amended--
            (1) in the section heading, by striking ``of excessive'' 
        and inserting ``and withholding of executive'';
            (2) by redesignating subsection (b) as subsection (d); and
            (3) by inserting after subsection (a) the following new 
        subsections:
    ``(b) Factors.--In making any determination under subsection (a), 
the Director may take into consideration any factors the Director 
considers relevant, including any wrongdoing on the part of the 
executive officer, and such wrongdoing shall include any fraudulent act 
or omission, breach of trust or fiduciary duty, violation of law, rule, 
regulation, order, or written agreement, and insider abuse with respect 
to the regulated entity.
    ``(c) Withholding of Compensation.--In carrying out subsection (a), 
the Director may require a regulated entity to withhold any payment, 
transfer, or disbursement of compensation to an executive officer, or 
to place such compensation in an escrow account, during the review of 
the reasonableness and comparability of compensation.''.
    (b) Conforming Amendments.--
            (1) Fannie mae.--Section 309(d) of the Federal National 
        Mortgage Association Charter Act (12 U.S.C. 1723a(d)) is 
        amended by adding at the end the following new paragraph:
    ``(4) The corporation shall not transfer, disburse, or pay 
compensation to any executive officer, or enter into an agreement with 
such executive officer, without the approval of the Director, for 
matters being reviewed under section 1318 of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 
4518).''.
            (2) Freddie mac.--Section 303(h) of the Federal Home Loan 
        Mortgage Corporation Act (12 U.S.C. 1452(h)) is amended by 
        adding at the end the following new paragraph:
    ``(4) The Corporation shall not transfer, disburse, or pay 
compensation to any executive officer, or enter into an agreement with 
such executive officer, without the approval of the Director, for 
matters being reviewed under section 1318 of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 
4518).''.
            (3) Federal home loan banks.--Section 7 of the Federal Home 
        Loan Bank Act (12 U.S.C. 1427) is amended by adding at the end 
        the following new subsection:
    ``(l) Director's Approval of Compensation.--Notwithstanding any 
other provision of this section, a Federal home loan bank shall not 
transfer, disburse, or pay compensation to any executive officer, or 
enter into an agreement with such executive officer, without the 
approval of the Director, for matters being reviewed under section 1318 
of the Federal Housing Enterprises Financial Safety and Soundness Act 
of 1992 (12 U.S.C. 4518).''.

SEC. 108. REVIEWS OF REGULATED ENTITIES.

    Section 1319 of the Housing and Community Development Act of 1992 
(12 U.S.C. 4519) is amended--
            (1) by striking the section designation and heading and 
        inserting the following:

``SEC. 1319. REVIEWS OF REGULATED ENTITIES.''; AND

            (2) by inserting after ``any entity'' the following: ``that 
        the Director considers appropriate, including an entity''.

SEC. 109. REGULATIONS AND ORDERS.

    Section 1319G of the Housing and Community Development Act of 1992 
(12 U.S.C. 4526) is amended--
            (1) by striking subsection (a) and inserting the following 
        new subsection:
    ``(a) Authority.--The Director shall issue any regulations, 
guidelines, and orders necessary to carry out the duties of the 
Director under this title, the Federal National Mortgage Association 
Charter Act, the Federal Home Loan Mortgage Corporation Act, and the 
Federal Home Loan Bank Act to ensure that the purposes of this title 
and such Acts are accomplished.''; and
            (2) by striking subsection (c).

SEC. 110. RISK-BASED CAPITAL REQUIREMENTS.

    (a) In General.--Section 1361 of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4611) is amended to read as follows:

``SEC. 1361. RISK-BASED CAPITAL LEVELS FOR REGULATED ENTITIES.

    ``(a) In General.--
            ``(1) Enterprises.--The Director shall, by regulation, 
        establish risk-based capital requirements for the enterprises 
        to ensure that the enterprises operate in a safe and sound 
        manner, maintaining sufficient capital and reserves to support 
        the risks that arise in the operations and management of the 
        enterprises.
            ``(2) Federal home loan banks.--The Director shall 
        establish risk-based capital standards under section 6 of the 
        Federal Home Loan Bank Act for the Federal home loan banks.
    ``(b) Required Registration Under the Securities Exchange Act of 
1934.--
            ``(1) In general.--Each regulated entity shall register at 
        least one class of the capital stock of such regulated entity, 
        and maintain such registration with the Securities and Exchange 
        Commission, under the Securities Exchange Act of 1934.
            ``(2) Enterprises.--Each enterprise shall comply with 
        sections 14 and 16 of the Securities Exchange Act of 1934.
    ``(c) No Limitation.--Nothing in this section shall limit the 
authority of the Director to require other reports or undertakings, or 
take other action, in furtherance of the responsibilities of the 
Director under this Act.''.
    (b) Federal Home Loan Banks Risk-Based Capital.--Section 6(a)(3) of 
the Federal Home Loan Bank Act (12 U.S.C. 1426(a)(3)) is amended--
            (1) by striking subparagraph (A) and inserting the 
        following new subparagraph:
                    ``(A) Risk-based capital standards.--The Director 
                shall, by regulation, establish risk-based capital 
                standards for the Federal home loan banks to ensure 
                that the Federal home loan banks operate in a safe and 
                sound manner, with sufficient permanent capital and 
                reserves to support the risks that arise in the 
                operations and management of the Federal home loans 
                banks.''; and
            (2) in subparagraph (B), by striking ``(A)(ii)'' and 
        inserting ``(A)''.

SEC. 111. MINIMUM AND CRITICAL CAPITAL LEVELS.

    (a) Minimum Capital Level.--Section 1362 of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4612) is amended--
            (1) in subsection (a), by striking the subsection heading 
        and inserting ``Enterprises'' ; and
            (2) by striking subsection (b) and inserting the following 
        new subsections:
    ``(b) Federal Home Loan Banks.--For purposes of this subtitle, the 
minimum capital level for each Federal home loan bank shall be the 
minimum capital required to be maintained to comply with the leverage 
requirement for the bank established under section 6(a)(2) of the 
Federal Home Loan Bank Act (12 U.S.C. 1426(a)(2)).
    ``(c) Regulatory Discretion to Increase Level.--Notwithstanding 
subsections (a) and (b), the Director may, by regulations issued under 
section 1319G(b), establish a minimum capital level that is higher than 
the level specified in subsection (a) for an enterprise or the level 
specified in subsection (b) for a Federal home loan bank.
    ``(d) Authority to Require Temporary Increase.--Notwithstanding 
subsections (a) and (b) and any minimum capital level established 
pursuant to subsection (c), the Director may, by order, increase the 
minimum capital level for a regulated entity for such period as the 
Director may provide if the Director--
            ``(1) makes any of the determinations specified in 
        subparagraphs (A) through (C) of section 1364(c)(1); or
            ``(2) determines that the regulated entity has violated any 
        of the prudential management and operations standards 
        established pursuant to section 1313A and, as a result of such 
        violation, is operating in an unsafe and unsound manner.
    ``(e) Authority to Establish Additional Capital and Reserve 
Requirements for Particular Programs.--The Director may, at any time by 
order or regulation, establish such capital or reserve requirements 
with respect to any program or activity of a regulated entity as the 
Director considers appropriate to ensure that the regulated entity 
operates in a safe and sound manner, with sufficient capital and 
reserves to support the risks that arise in the operations and 
management of the regulated entity.''.
    (b) Critical Capital Levels.--
            (1) In general.--Section 1363 of the Housing and Community 
        Development Act of 1992 (12 U.S.C. 4613) is amended--
                    (A) by striking ``For'' and inserting ``(a) 
                Enterprises.--For''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(b) Federal Home Loan Banks.--
            ``(1) In general.--For purposes of this subtitle, the 
        critical capital level for each Federal home loan bank shall be 
        such amount of capital as the Director shall, by regulation 
        require.
            ``(2) Consideration of other critical capital levels.--In 
        establishing the critical capital level under paragraph (1) for 
        the Federal home loan banks, the Director shall take due 
        consideration of the critical capital level established under 
        subsection (a) for the enterprises, with such modifications as 
        the Director determines to be appropriate to reflect the 
        difference in operations between the banks and the 
        enterprises.''.
            (2) Regulations.--Not later than the expiration of the 120-
        day period beginning on the effective date under section 184, 
        the Director of the Federal Housing Finance Agency shall issue 
        regulations pursuant to section 1363(b) of the Housing and 
        Community Development Act of 1992 (as added by paragraph (1) of 
        this subsection) establishing the critical capital level under 
        such section.

SEC. 112. REVIEW OF AND AUTHORITY OVER ENTERPRISE ASSETS AND 
              OBLIGATIONS.

    Subtitle B of title XIII of the Housing and Community Development 
Act of 1992 (12 U.S.C. 4611 et seq.) is amended--
            (1) by striking the subtitle designation and heading and 
        inserting the following:

 ``Subtitle B--Required Capital Levels for Regulated Entities, Special 
    Enforcement Powers, and Reviews of Assets and Obligations''; and

            (2) by adding at the end the following new section:

``SEC. 1369E. REVIEWS OF ENTERPRISE ASSETS AND OBLIGATIONS.

    ``(a) In General.--The Director shall conduct, on a periodic basis, 
a review of the on-balance sheet assets and off-balance sheet 
obligations of each enterprise.
    ``(b) Authority to Require Disposition or Acquisition.--Pursuant to 
such a review, the Director may by order require an enterprise, under 
such terms and conditions as the Director determines to be appropriate, 
to dispose of or acquire any asset or obligation, if the Director 
determines that such action is consistent with the safe and sound 
operation of the enterprise or with the purposes of this Act, the 
Federal National Mortgage Association Charter Act, or the Federal Home 
Loan Mortgage Corporation Act.''.

SEC. 113. CORPORATE GOVERNANCE OF ENTERPRISES.

    The Housing and Community Development Act of 1992 is amended by 
inserting before section 1323 (12 U.S.C. 4543) the following new 
section:

``SEC. 1322A CORPORATE GOVERNANCE OF ENTERPRISES.

    ``(a) Board of Directors.--
            ``(1) Membership.--
                    ``(A) In general.--No person may serve on the board 
                of directors of an enterprise for more than 10 years or 
                past the age of 72, whichever comes first; except that 
                a member of a board of directors may serve his or her 
                full term if he or she has served less than 10 years or 
                is 72 years on the date of his or her election or 
                appointment to the board.
                    ``(B) Waiver.--Upon the written request of an 
                enterprise, the Director may waive, in the Director's 
                sole discretion and for good cause, the limits on the 
                service of a board member under subparagraph (A).
            ``(2) Independence.--A majority of seated members of the 
        board of directors of each enterprise shall be independent 
        board members, as defined under rules set forth by the New York 
        Stock Exchange, as such rules may be amended from time to time.
            ``(3) Frequency of meetings.--To carry out its obligations 
        and duties under applicable laws, rules, regulations, and 
        guidelines, the board of directors of an enterprise shall meet 
        at least eight times a year and not less than once a calendar 
        quarter.
            ``(4) Non-management board member meetings.--The non-
        management directors of an enterprise shall meet at regularly 
        scheduled executive sessions without management participation.
            ``(5) Quorums; prohibition on proxies.--For the transaction 
        of business, a quorum of the board of directors of an 
        enterprise shall be at least a majority of the seated board of 
        directors and a board member may not vote by proxy.
            ``(6) Information.--The management of an enterprise shall 
        provide a board member of the enterprise with such adequate and 
        appropriate information that a reasonable board member would 
        find important to the fulfillment of his or her fiduciary 
        duties and obligations.
            ``(7) Annual review.--At least annually, the board of 
        directors of each enterprise shall review, with appropriate 
        professional assistance, the requirements of laws, rules, 
        regulations, and guidelines that are applicable to its 
        activities and duties.
    ``(b) Committees of Boards of Directors.--
            ``(1) Frequency of meetings.--Any committee of the board of 
        directors of an enterprise shall meet with sufficient frequency 
        to carry out its obligations and duties under applicable laws, 
        rules, regulations, and guidelines.
            ``(2) Required committees.--Each enterprise shall provide 
        for the establishment, however styled, of the following 
        committees of the board of directors:
                    ``(A) Audit committee.
                    ``(B) Compensation committee.
                    ``(C) Nominating/corporate governance committee.
        Such committees shall be in compliance with the charter, 
        independence, composition, expertise, duties, responsibilities, 
        and other requirements set forth under section 10A(m) of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78j-1(m)), with 
        respect to the audit committee, and under rules issued by the 
        New York Stock Exchange, as such rules may be amended from time 
        to time.
    ``(c) Compensation.--
            ``(1) In general.--The compensation of board members, 
        executive officers, and employees of an enterprise--
                    ``(A) shall not be in excess of that which is 
                reasonable and appropriate;
                    ``(B) shall be commensurate with the duties and 
                responsibilities of such persons,
                    ``(C) shall be consistent with the long-term goals 
                of the enterprise;
                    ``(D) shall not focus solely on earnings 
                performance, but shall take into account risk 
                management, operational stability and legal and 
                regulatory compliance as well; and
                    ``(E) shall be undertaken in a manner that complies 
                with applicable laws, rules, and regulations.
            ``(2) Reimbursement.--If an enterprise is required to 
        prepare an accounting restatement due to the material 
        noncompliance of the enterprise, as a result of misconduct, 
        with any financial reporting requirement under the securities 
        laws, the chief executive officer and chief financial officer 
        of the enterprise shall reimburse the enterprise as provided 
        under section 304 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 
        7243). This provision does not otherwise limit the authority of 
        the Agency to employ remedies available to it under its 
        enforcement authorities.
    ``(d) Code of Conduct and Ethics.--
            ``(1) In general.--An enterprise shall establish and 
        administer a written code of conduct and ethics that is 
        reasonably designed to assure the ability of board members, 
        executive officers, and employees of the enterprise to 
        discharge their duties and responsibilities, on behalf of the 
        enterprise, in an objective and impartial manner, and that 
        includes standards required under section 406 of the Sarbanes-
        Oxley Act of 2002 (15 U.S.C. 7264) and other applicable laws, 
        rules, and regulations.
            ``(2) Review.--Not less than once every three years, an 
        enterprise shall review the adequacy of its code of conduct and 
        ethics for consistency with practices appropriate to the 
        enterprise and make any appropriate revisions to such code.
    ``(e) Conduct and Responsibilities of Board of Directors.--The 
board of directors of an enterprise shall be responsible for directing 
the conduct and affairs of the enterprise in furtherance of the safe 
and sound operation of the enterprise and shall remain reasonably 
informed of the condition, activities, and operations of the 
enterprise. The responsibilities of the board of directors shall 
include having in place adequate policies and procedures to assure its 
oversight of, among other matters, the following:
            ``(1) Corporate strategy, major plans of action, risk 
        policy, programs for legal and regulatory compliance and 
        corporate performance, including prudent plans for growth and 
        allocation of adequate resources to manage operations risk.
            ``(2) Hiring and retention of qualified senior executive 
        officers and succession planning for such senior executive 
        officers.
            ``(3) Compensation programs of the enterprise.
            ``(4) Integrity of accounting and financial reporting 
        systems of the enterprise, including independent audits and 
        systems of internal control.
            ``(5) Process and adequacy of reporting, disclosures, and 
        communications to shareholders, investors, and potential 
        investors.
            ``(6) Extensions of credit to board members and executive 
        officers.
            ``(7) Responsiveness of executive officers in providing 
        accurate and timely reports to Federal regulators and in 
        addressing the supervisory concerns of Federal regulators in a 
        timely and appropriate manner.
    ``(f) Prohibition of Extensions of Credit.--An enterprise may not 
directly or indirectly, including through any subsidiary, extend or 
maintain credit, arrange for the extension of credit, or renew an 
extension of credit, in the form of a personal loan to or for any board 
member or executive officer of the enterprise, as provided by section 
13(k) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(k)).
    ``(g) Certification of Disclosures.--The chief executive officer 
and the chief financial officer of an enterprise shall review each 
quarterly report and annual report issued by the enterprise and such 
reports shall include certifications by such officers as required by 
section 302 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7241).
    ``(h) Change of Audit Partner.--An enterprise may not accept audit 
services from an external auditing firm if the lead or coordinating 
audit partner who has primary responsibility for the external audit of 
the enterprise, or the external audit partner who has responsibility 
for reviewing the external audit has performed audit services for the 
enterprise in each of the five previous fiscal years.
    ``(i) Compliance Program.--
            ``(1) Requirement.--Each enterprise shall establish and 
        maintain a compliance program that is reasonably designed to 
        assure that the enterprise complies with applicable laws, 
        rules, regulations, and internal controls.
            ``(2) Compliance officer.--The compliance program of an 
        enterprise shall be headed by a compliance officer, however 
        styled, who reports directly to the chief executive officer of 
        the enterprise. The compliance officer shall report regularly 
        to the board of directors or an appropriate committee of the 
        board of directors on compliance with and the adequacy of 
        current compliance policies and procedures of the enterprise, 
        and shall recommend any adjustments to such policies and 
        procedures that the compliance officer considers necessary and 
        appropriate.
    ``(j) Risk Management Program.--
            ``(1) Requirement.--Each enterprise shall establish and 
        maintain a risk management program that is reasonably designed 
        to manage the risks of the operations of the enterprise.
            ``(2) Risk management officer.--The risk management program 
        of an enterprise shall be headed by a risk management officer, 
        however styled, who reports directly to the chief executive 
        officer of the enterprise. The risk management officer shall 
        report regularly to the board of directors or an appropriate 
        committee of the board of directors on compliance with and the 
        adequacy of current risk management policies and procedures of 
        the enterprise, and shall recommend any adjustments to such 
        policies and procedures that the risk management officer 
        considers necessary and appropriate.
    ``(k) Compliance With Other Laws.--
            ``(1) Deregistered or unregistered common stock.--If an 
        enterprise deregisters or has not registered its common stock 
        with the Securities and Exchange Commission under the 
        Securities Exchange Act of 1934, the enterprise shall comply or 
        continue to comply with sections 10A(m) and 13(k) of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78j-1(m), 78m(k)) 
        and sections 302, 304, and 406 of the Sarbanes-Oxley Act of 
        2002 (15 U.S.C. 7241, 7243, 7264), subject to such requirements 
        as provided by subsection (l) of this section.
            ``(2) Registered common stock.--An enterprise that has its 
        common stock registered with the Securities and Exchange 
        Commission shall maintain such registered status, unless it 
        provides 60 days prior written notice to the Director stating 
        its intent to deregister and its understanding that it will 
        remain subject to the requirements of the sections of the 
        Securities Exchange Act of 1934 and the Sarbanes-Oxley Act of 
        2002, subject to such requirements as provided by subsection 
        (l) of this section.
    ``(l) Modification of Certain Provisions.--In connection with 
standards of Federal or State law (including the Revised Model 
Corporation Act) or New York Stock Exchange rules that are made 
applicable to an enterprise by section 1710.10 of the Director's rules 
(12 C.F.R. 1710.10) and by subsections (a), (b), (g), (i), (j), and (k) 
of this section, the Director, in the Director's sole discretion, may 
modify the standards contained in this section or in part 1710 of the 
Director's rules (12 U.S.C. Part 1710) in accordance with section 553 
of title 5, United States Code, and upon written notice to the 
enterprise.''.

SEC. 114. CONFORMING AMENDMENTS.

    (a) 1992 Act.--Part 1 of subtitle A of title XIII of the Housing 
and Community Development Act of 1992 (12 U.S.C. 4511 et seq.), as 
amended by the preceding provisions of this Act, is further amended--
            (1) by striking ``an enterprise'' each place such term 
        appears in such part (except in sections 1313(a)(2)(A), 
        1313A(b)(2)(B)(ii)(I), and 1316(b)(3)) and inserting ``a 
        regulated entity'';
            (2) by striking ``the enterprise'' each place such term 
        appears in such part (except in section 1316(b)(3)) and 
        inserting ``the regulated entity'';
            (3) by striking ``the enterprises'' each place such term 
        appears in such part (except in sections 1312(c)(2), 
        1312(e)(2), 1317(g)(1), and 1319B(a)(4)(D)) and inserting ``the 
        regulated entities'';
            (4) by striking ``each enterprise'' each place such term 
        appears in such part and inserting ``each regulated entity'';
            (5) by striking ``Office'' each place such term appears in 
        such part (except in sections 1312(b)(5), 1315(b), and 1316(g), 
        and subsections (c) and (d) of section 1317) and inserting 
        ``Agency'';
            (6) in section 1315 (12 U.S.C. 4515)--
                    (A) in subsection (a)--
                            (i) in the subsection heading, by striking 
                        ``Office Personnel'' and inserting ``In 
                        General''; and
                            (ii) by striking ``The'' and inserting 
                        ``Subject to titles III and IV of the Federal 
                        Housing Finance Reform Act of 2005, the'';
                    (B) by striking subsection (d); and
                    (C) by redesignating subsections (e) and (f) as 
                subsections (d) and (e), respectively;
            (7) in section 1316(c) (12 U.S.C. 4516(c)), by striking 
        ``any enterprise'' and inserting ``any regulated entity'';
            (8) in section 1319A (12 U.S.C. 4520)--
                    (A) by striking ``(a) In General.--Each 
                enterprise'' and inserting ``Each regulated entity''; 
                and
                    (B) by striking subsection (b);
            (9) in section 1319B (12 U.S.C. 4521), by striking 
        ``Committee on Banking, Finance and Urban Affairs'' each place 
        such term appears and inserting ``Committee on Financial 
        Services''; and
            (10) in section 1319F (12 U.S.C. 4525), striking all that 
        follows ``United States Code'' and inserting ``, the Agency 
        shall be considered an agency responsible for the regulation or 
        supervision of financial institutions.''.
    (b) Amendments to Fannie Mae Charter Act.--The Federal National 
Mortgage Association Charter Act (12 U.S.C. 1716 et seq.) is amended--
            (1) by striking ``Director of the Office of Federal Housing 
        Enterprise Oversight of the Department of Housing and Urban 
        Development'' each place such term appears, and inserting 
        ``Director of the Federal Housing Finance Agency'', in--
                    (A) section 303(c)(2) (12 U.S.C. 1718(c)(2));
                    (B) section 309(d)(3)(B) (12 U.S.C. 
                1723a(d)(3)(B)); and
                    (C) section 309(k)(1); and
            (2) in section 309--
                    (A) in subsections (d)(3)(A) and (n)(1), by 
                striking ``Banking, Finance and Urban Affairs'' each 
                place such term appears and inserting ``Financial 
                Services''; and
                    (B) in subsection (n)(1), by inserting ``the 
                Director of the Federal Housing Finance Agency,'' after 
                ``Senate,''.
    (c) Amendments to Freddie Mac Act.--The Federal Home Loan Mortgage 
Corporation Act is amended--
            (1) by striking ``Director of the Office of Federal Housing 
        Enterprise Oversight of the Department of Housing and Urban 
        Development'' each place such term appears, and inserting 
        ``Director of the Federal Housing Finance Agency'', in--
                    (A) section 303(b)(2) (12 U.S.C. 1452(b)(2));
                    (B) section 303(h)(2) (12 U.S.C. 1452(h)(2)); and
                    (C) section 307(c)(1) (12 U.S.C. 1456(c)(1));
            (2) in sections 303(h)(1) and 307(f)(1) (12 U.S.C. 
        1452(h)(1), 1456(f)(1)), by striking ``Banking, Finance and 
        Urban Affairs'' each place such term appears and inserting 
        ``Financial Services'';
            (3) in section 306(i) (12 U.S.C. 1455(i))--
                    (A) by striking ``section 1316(c)'' and inserting 
                ``section 306(c)''; and
                    (B) by striking ``section 106'' and inserting 
                ``section 1316''; and
            (4) in section 307(f)(1) (12 U.S.C. 1456(f)(1)), by 
        inserting ``the Director of the Federal Housing Finance 
        Agency,'' after ``Senate,''.

             Subtitle B--Improvement of Mission Supervision

SEC. 121. TRANSFER OF PROGRAM AND ACTIVITIES APPROVAL AND HOUSING GOAL 
              OVERSIGHT.

    Part 2 of subtitle A of title XIII of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4541 et seq.) is amended--
            (1) by striking the designation and heading for the part 
        and inserting the following:

   ``PART 2--PROGRAM AND ACTIVITIES APPROVAL BY DIRECTOR, CORPORATE 
         GOVERNANCE, AND ESTABLISHMENT OF HOUSING GOALS''; and

            (2) by striking sections 1321 and 1322.

SEC. 122. REVIEW BY DIRECTOR OF NEW PROGRAMS AND ACTIVITIES OF 
              ENTERPRISES.

    (a) In General.--Part 2 of subtitle A of title XIII of the Housing 
and Community Development Act of 1992 is amended by inserting before 
section 1323 (12 U.S.C. 4543) the following new section:

``SEC. 1321. REVIEW AND APPROVAL BY DIRECTOR OF NEW PROGRAMS AND 
              BUSINESS ACTIVITIES OF ENTERPRISES.

    ``(a) Limitation on Authority to Undertake Programs and 
Activities.--An enterprise may not undertake any new program, including 
a pilot program, or any new business activity except in accordance with 
the procedures set forth in this section and orders and regulations 
issued under this section.
    ``(b) New Programs.--
            ``(1) Prior approval requirement.--An enterprise may not 
        commence any new program before it has obtained the approval of 
        the Director, pursuant to this subsection, for the new program.
            ``(2) Application.--The Director shall, by order or 
        regulation, require that an enterprise shall, to obtain a 
        determination by the Director regarding approval of a new 
        program by the enterprise, submit to the Director a written 
        application for the new program in a format as prescribed by 
        the Director.
            ``(3) Notice.--Immediately upon receipt of a complete 
        application for a new program, the Director shall cause to be 
        published in the Federal Register notice of the receipt of such 
        application and of the period for public comment pursuant to 
        paragraph (4) regarding such new program, and a description of 
        the new program proposed by the application.
            ``(4) Public comment period.--During the 30-day period 
        beginning upon publication pursuant to paragraph (3) of a 
        notice regarding such an application, the Director shall 
        receive public comments regarding the new program.
            ``(5) Determination.--Not less than 15 days after the 
        conclusion of the public comment period pursuant to paragraph 
        (4) regarding an application but not more than 30 days after 
        the conclusion of such comment period, the Director shall 
        approve, conditionally approve, or reject such program, in 
        writing.
            ``(6) Standard for approval.--The Director may approve, or 
        conditionally approve, a new program of an enterprise only if 
        the Director determines, taking into consideration any relevant 
        information and comments received during the public comment 
        period, that such new program--
                    ``(A) does not contravene and is not inconsistent 
                with the purposes of this title, the Federal National 
                Mortgage Association Charter Act, or the Federal Home 
                Loan Mortgage Corporation Act, as such purposes are 
                determined taking into consideration the definitions of 
                the terms `primary mortgage market' and `secondary 
                mortgage market' pursuant to section 1303;
                    ``(B) is not otherwise inconsistent with the safety 
                and soundness of the enterprise; and
                    ``(C) is in the public interest.
    ``(c) Business Activities.--
            ``(1) Authority of director to prohibit activities.--The 
        Director shall have authority to prohibit any business activity 
        by an enterprise if the Director determines, in writing, that 
        such activity--
                    ``(A) contravenes or is inconsistent with the 
                purposes of this title, the Federal National Mortgage 
                Association Charter Act, or the Federal Home Loan 
                Mortgage Corporation Act;
                    ``(B) is otherwise inconsistent with the safety and 
                soundness of the enterprise; or
                    ``(C) is not in the public interest.
            ``(2) Notification of new business activities.-- An 
        enterprise that undertakes any new business activity shall 
        provide written notice of the activity to the Director and may 
        commence the new business activity only in accordance with 
        paragraph (4).
            ``(3) Director determination of applicable procedure.--
                    ``(A) Timing.--Immediately upon receipt of any 
                notice under paragraph (2) regarding a new business 
                activity, the Director shall undertake a determination 
                under subparagraph (B) of this paragraph regarding the 
                business activity.
                    ``(B) Determination and treatment as new program.--
                If the Director determines that any new business 
                activity consists of, relates to, or involves any new 
                program--
                            ``(i) the Director shall notify the 
                        enterprise of the determination;
                            ``(ii) the new business activity described 
                        in the notice shall be considered a new program 
                        for purposes of this section; and
                            ``(iii) the Director shall prohibit the 
                        enterprise from carrying out the activity 
                        except to the extent that approval for the 
                        activity is obtained pursuant to subsection 
                        (b).
            ``(4) Commencement.--An enterprise may commence a new 
        business activity--
                    ``(A) if the Director issues a written approval 
                regarding such business activity, immediately upon such 
                issuance or at such other time as provided by the 
                Director in such letter; or
                    ``(B) if, during the 30-day period beginning upon 
                receipt by the Director of notice pursuant to paragraph 
                (2) regarding a new business activity, the Director has 
                not issued to the enterprise a written approval or 
                denial of the new business activity, upon the 
                expiration of such 30-day period.
    ``(d) Approval and Conditional Approval.--The Director may at any 
time conditionally approve the undertaking of a particular new program 
or business activity by an enterprise and set forth the terms and 
conditions that apply to the program or activity with which the 
enterprise shall comply if it undertakes the new program or activity. 
Such approval may, in the discretion of the Director, be in the form of 
a written agreement between the enterprise and the Director and shall 
be subject to such terms and conditions therein. Such a written 
agreement or conditional approval shall be enforceable under subtitle 
C.
    ``(e) Effect on Other Authorities.--
            ``(1) Examinations.--Nothing in this section may be 
        construed to limit, in any manner, any other authority or right 
        the Director may have under other provisions of law to conduct 
        an examination of an enterprise.
            ``(2) Requests for information.--Nothing in this section 
        may be construed to limit the right of the Director at any time 
        to request additional information from an enterprise concerning 
        any business activity.
            ``(3) No implied right of action.--This section shall not 
        create any private right of action against an enterprise or any 
        director or executive officer of an enterprise, or impair any 
        private right of action under other applicable law.
            ``(4) No limitation.--Nothing in this section may be 
        construed to restrict the general supervisory and regulatory 
        authority of the Director over all programs, products, 
        activities, or business operations of any kind.
    ``(f) Report on Programs and Business Activities.--Not later than 
the expiration of the 180-day period beginning on the effective date 
under section 184 of the Federal Housing Finance Reform Act of 2005, 
each enterprise shall submit to the Director a report identifying and 
describing each program and business activity of the enterprise engaged 
in or existing as of the submission of the report.
    ``(g) Regulations.--The Director shall by order or regulation issue 
rules and procedures to implement this section, including in the 
discretion of the Director, such definitions, interpretations, forms, 
and other guidances as the Director considers appropriate.''.
    (b) Definitions.--Section 1303 of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4502), as amended by section 2 of 
this Act, is further amended--
            (1) by redesignating paragraphs (16) through (22) as 
        paragraphs (19) through (25), respectively;
            (2) by inserting after paragraph (15) the following new 
        paragraph:
            ``(18) New business activity.--The term `new business 
        activity' means, with respect to an enterprise, any business 
        activity of the enterprise that--
                    ``(A) the enterprise was not engaging in on the 
                effective date under section 184 of the Federal Housing 
                Finance Reform Act of 2005; and
                    ``(B) that the enterprise is not authorized, 
                pursuant to the provisions of section 1321(c), to 
                offer, undertake, transact, conduct, or engage in.'';
            (3) by redesignating paragraphs (14) and (15) as paragraphs 
        (16) and (17), respectively;
            (4) by inserting after paragraph (13) the following new 
        paragraph:
            ``(15) Mortgage markets.--The terms `primary mortgage 
        market' and `secondary mortgage market' shall have such 
        meanings as the Director shall, by regulation, prescribe 
        consistent with the Federal National Mortgage Association 
        Charter Act and the Federal Home Loan Mortgage Corporation Act. 
        The Director shall issue such regulations not later than the 
        expiration of the 6-month period beginning on the effective 
        date under section 184 of the Federal Housing Finance Reform 
        Act of 2005.'';
            (5) by redesignating paragraphs (5) through (13) as 
        paragraphs (6) through (14), respectively; and
            (6) by inserting after paragraph (4) the following new 
        paragraph:
            ``(5) Business activity.--The term `business activity' 
        means, with respect to an enterprise any offering, undertaking, 
        transacting, conducting, or engaging in any conduct or activity 
        by an enterprise, as the Director shall provide.''.

SEC. 123. CONFORMING LOAN LIMITS.

    (a) Fannie Mae.--Section 302(b)(2) of the Federal National Mortgage 
Association Charter Act (12 U.S.C. 1717(b)(2)) is amended by striking 
the 7th and 8th sentences and inserting the following new sentences: 
``Such limitations shall not exceed $359,650 for a mortgage secured by 
a single-family residence, $460,400 for a mortgage secured by a 2-
family residence, $556,500 for a mortgage secured by a 3-family 
residence, and $694,600 for a mortgage secured by a 4-family residence, 
except that such maximum limitations shall be adjusted effective 
January 1 of each year beginning with 2006, subject to the limitations 
in this paragraph. Each adjustment shall be made by adding to or 
subtracting from each such amount (as it may have been previously 
adjusted) a percentage thereof equal to the percentage increase or 
decrease during the 12-month period ending with the previous October in 
the housing price index maintained by the Director of the Federal 
Housing Finance Agency (pursuant to section 1322 of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4541)).''.
    (b) Freddie Mac.--Section 305(a)(2) of the Federal National 
Mortgage Association Charter Act (12 U.S.C. 1454(a)(2)) is amended by 
striking the 6th and 7th sentences and inserting the following new 
sentences: ``Such limitations shall not exceed $359,650 for a mortgage 
secured by a single-family residence, $460,400 for a mortgage secured 
by a 2-family residence, $556,500 for a mortgage secured by a 3-family 
residence, and $694,600 for a mortgage secured by a 4-family residence, 
except that such maximum limitations shall be adjusted effective 
January 1 of each year beginning with 2006, subject to the limitations 
in this paragraph. Each adjustment shall be made by adding to or 
subtracting from each such amount (as it may have been previously 
adjusted) a percentage thereof equal to the percentage increase or 
decrease during the 12-month period ending with the previous October in 
the housing price index maintained by the Director of the Federal 
Housing Finance Agency (pursuant to section 1322 of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4541)).''.
    (c) Housing Price Index.--Subpart A of part 2 of subtitle A of 
title XIII of the Housing and Community Development Act of 1992 (as 
amended by the preceding provisions of this Act) is amended by 
inserting after section 1321 (as added by section 122 of this Act) the 
following new section:

``SEC. 1322. HOUSING PRICE INDEX.

    ``(a) In General.--The Director shall establish and maintain a 
method of assessing the national average 1-family house price for use 
for adjusting the conforming loan limitations of the enterprises. In 
establishing such method, the Director shall take into consideration 
the monthly survey of all major lenders conducted by the Federal 
Housing Finance Agency to determine the national average 1-family house 
price, the House Price Index maintained by the Office of Federal 
Housing Enterprise Oversight of the Department of Housing and Urban 
Development before the effective date of the Federal Housing Finance 
Reform Act of 2005, any appropriate house price indexes of the Bureau 
of the Census of the Department of Commerce, and any other indexes or 
measures that the Director considers appropriate.
    ``(b) GAO Audit.--
            ``(1) In general.--At such times as are required under 
        paragraph (2), the Comptroller General of the United States 
        shall conduct an audit of the methodology established by the 
        Director under subsection (a) to determine whether the 
        methodology established is an accurate and appropriate means of 
        measuring changes to the national average 1-family house price.
            ``(2) Timing.--An audit referred to in paragraph (1) shall 
        be conducted and completed not later than the expiration of the 
        180-day period that begins upon each of the following dates:
                    ``(A) Establishment.--The date upon which such 
                methodology is initially established under subsection 
                (a) in final form by the Director.
                    ``(B) Modification or amendment.--Each date upon 
                which any modification or amendment to such methodology 
                is adopted in final form by the Director.
            ``(3) Report.--Within 30 days of the completion of any 
        audit conducted under this subsection, the Comptroller General 
        shall submit a report detailing the results and conclusions of 
        the audit to the Director, the Committee on Financial Services 
        of the House of Representatives, and the Committee on Banking, 
        Housing, and Urban Affairs of the Senate.''.

SEC. 124. ANNUAL HOUSING REPORT REGARDING REGULATED ENTITIES.

    The Housing and Community Development Act of 1992 is amended by 
striking section 1324 (12 U.S.C. 4544) and inserting the following new 
section:

``SEC. 1324. ANNUAL HOUSING REPORT REGARDING REGULATED ENTITIES.

    ``(a) In General.--After reviewing and analyzing the reports 
submitted under section 309(n) of the Federal National Mortgage 
Association Charter Act, section 307(f) of the Federal Home Loan 
Mortgage Corporation Act, and section 10(j)(12) of the Federal Home 
Loan Bank Act (12 U.S.C. 1430(j)(12)), the Director shall submit a 
report, as part of the annual report under section 1328, not later than 
October 30 of each year, to the Committee on Financial Services of the 
House of Representatives and the Committee on Banking, Housing, and 
Urban Affairs of the Senate, on the activities of each regulated 
entity.
    ``(b) Contents.--The report shall--
            ``(1) discuss the extent to which--
                    ``(A) each enterprise is achieving the annual 
                housing goals established under subpart B of this part;
                    ``(B) each Federal home loan bank is meeting the 
                contribution requirements under section 10(j)(5) of the 
                Federal Home Loan Bank Act; and
                    ``(C) each regulated entity is achieving the 
                purposes of the regulated entity established by law;
            ``(2) aggregate and analyze census tract and other relevant 
        data to assess the compliance of each enterprise with the 
        central cities, rural areas, and other underserved areas 
        housing goal and to determine levels of business in central 
        cities, rural areas, underserved areas, low- and moderate-
        income census tracts, minority census tracts, and other 
        geographical areas deemed appropriate by the Director;
            ``(3) aggregate and analyze relevant data on income to 
        assess the compliance of each enterprise with the housing goals 
        under subpart B;
            ``(4) aggregate and analyze data on income, race, and 
        gender by census tract and other relevant classifications, and 
        compare such data with larger demographic, housing, and 
        economic trends;
            ``(5) examine actions that--
                    ``(A) each enterprise has undertaken or could 
                undertake to promote and expand the annual goals 
                established under subpart B and the purposes of the 
                enterprise established by law; and
                    ``(B) each Federal home loan bank has taken or 
                could undertake to promote and expand the community 
                investment program and affordable housing program of 
                the bank established under section subsections (i) and 
                (j) of section 10 of the Federal Home Loan Bank Act;
            ``(6) examine the primary and secondary multifamily housing 
        mortgage markets and describe--
                    ``(A) the availability and liquidity of mortgage 
                credit;
                    ``(B) the status of efforts to provide standard 
                credit terms and underwriting guidelines for 
                multifamily housing and to securitize such mortgage 
                products; and
                    ``(C) any factors inhibiting such standardization 
                and securitization;
            ``(7) examine actions each regulated entity has undertaken 
        and could undertake to promote and expand opportunities for 
        first-time homebuyers;
            ``(8) describe any actions taken under section 1325(5) with 
        respect to originators found to violate fair lending 
        procedures; and
            ``(9) discuss and analyze existing conditions and trends, 
        including conditions and trends relating to pricing, in the 
        housing markets and mortgage markets.
    ``(c) Data Collection and Reporting.--
            ``(1) In general.--To assist the Director in analyzing the 
        matters described in subsection (b) and establishing the 
        methodology described in section 1322, the Director shall 
        conduct, on a monthly basis, a survey of mortgage markets in 
        accordance with this subsection.
            ``(2) Data points.--Each monthly survey conducted by the 
        Director under paragraph (1) shall collect data on--
                    ``(A) the characteristics of individual mortgages 
                that are eligible for purchase by the enterprises and 
                the characteristics of individual mortgages that are 
                not eligible for purchase by the enterprises including, 
                in both cases, information concerning--
                            ``(i) the price of the house that secures 
                        the mortgage;
                            ``(ii) the loan-to-value ratio of the 
                        mortgage, which shall reflect any secondary 
                        liens on the relevant property;
                            ``(iii) the terms of the mortgage;
                            ``(iv) the creditworthiness of the borrower 
                        or borrowers; and
                            ``(v) whether the mortgage, in the case of 
                        a conforming mortgage, was purchased by an 
                        enterprise; and
                    ``(B) such other matters as the Director determines 
                to be appropriate.
            ``(3) Public availability.--The Director shall make any 
        data collected by the Director in connection with the conduct 
        of a monthly survey available to the public in a timely manner, 
        provided that the Director may modify the data released to the 
        public to ensure that the data is not released in an 
        identifiable form.
            ``(4) Definition.--For purposes of this subsection, the 
        term `identifiable form' means any representation of 
        information that permits the identity of a borrower to which 
        the information relates to be reasonably inferred by either 
        direct or indirect means.''.

SEC. 125. ESTABLISHMENT OF HOUSING GOALS.

     Section 1331 of the Housing and Community Development Act of 1992 
(12 U.S.C. 4561) is amended by striking subsection (a) and inserting 
the following new subsection:
    ``(a) In General.--The Director shall establish, by regulation, 
housing goals under this subpart for each enterprise. The housing goals 
shall include a low- and moderate-income housing goal pursuant to 
section 1332, a special affordable housing goal pursuant to section 
1333, a central cities, rural areas, and other underserved areas 
housing goal pursuant to section 1334, a home purchase goal under 
section 1334A, and such other goals as the Director may establish under 
section 1334B. The Director shall implement this subpart in a manner 
consistent with section 301(3) of the Federal National Mortgage 
Association Charter Act and section 301(b)(3) of the Federal Home Loan 
Mortgage Corporation Act.''.

SEC. 126. HOME PURCHASE GOAL AND ADDITIONS, MODIFICATIONS, AND 
              RESCISSIONS TO GOALS.

    The Housing and Community Development Act of 1992 is amended by 
inserting after section 1334 (12 U.S.C. 4564) the following new 
sections:

``SEC. 1334A. HOME PURCHASE GOAL.

    ``(a) In General.--The Director shall establish an annual home 
purchase goal for the purchase by each enterprise of mortgages 
financing the purchase of owner-occupied single family dwelling units. 
The Director may, by regulation, establish components for such goal to 
include any or all of the following: first-time homebuyers; low- and 
moderate-income homebuyers; homebuyers in central cities, rural areas, 
and other underserved areas; and homebuyers of special affordable 
housing. The Director may, by regulation, establish the goal with 
components as percentages of enterprise business or by such other means 
as necessary to increase the enterprises' secondary market financing of 
mortgages for home purchases consistent with the enterprises' charter 
missions. The components of the goal established by the Director shall 
be enforceable as goals. The goal under this section with its 
components must be established for metropolitan and rural areas for 
which data is available.
    ``(b) Factors to Be Applied.--In establishing the home purchase 
goal under this section for an enterprise, the Director shall 
consider--
            ``(1) national housing needs;
            ``(2) economic, housing, and demographic conditions;
            ``(3) the performance and effort of the enterprises toward 
        achieving the home purchase goal in previous years;
            ``(4) the size of the conventional mortgage market serving 
        home purchasers relative to the size of the overall 
        conventional mortgage market;
            ``(5) the ability of the enterprises to lead the industry 
        in making mortgage credit available for home purchasers; and
            ``(6) the need to maintain the sound financial condition of 
        the enterprises.
    ``(c) Transition.--In order to permit a transition to the goal 
established under this section, the Director shall phase in the goal 
over a period of one year. Such goal shall not be enforceable during 
the one-year transition period.
    ``(d) Implementation During Transition.--The Director shall 
establish any requirements necessary to implement the transition 
provisions under this section by notice, after providing the 
enterprises with an opportunity to review and comment not less than 30 
days before the issuance of such notice.

``SEC. 1334B. HOUSING GOALS: ADDITIONS, MODIFICATIONS, AND RESCISSIONS.

    ``(a) In General.--The Director may, by regulation, establish 
additional annual housing goals, or modify or rescind existing housing 
goals, to address national housing needs consistent with the 
enterprises' charters for the purchase of mortgages where the Director 
determines by regulation that the housing need is greatest. The 
Director may issue a regulation which establishes or modifies any goal 
under this subsection--
            ``(1) as a percentage of the mortgage purchases of each 
        enterprise;
            ``(2) as a dollar amount of each enterprise's mortgage 
        purchases; or
            ``(3) by such other means as necessary to increase the 
        enterprises' secondary market financing of mortgages addressed 
        by the goal.
    ``(b) Factors to Be Applied.--In establishing, modifying, or 
rescinding a goal, the Director shall consider--
            ``(1) national housing needs;
            ``(2) economic, housing, and demographic conditions;
            ``(3) the performance and effort of the enterprises toward 
        achieving the need addressed by such goal in previous years;
            ``(4) the size of the conventional mortgage market serving 
        the need addressed by the goal relative to the size of the 
        overall conventional mortgage market;
            ``(5) the ability of the enterprises to lead the industry 
        in making mortgage credit available to meet the need addressed 
        by the goal; and
            ``(6) the need to maintain the sound financial condition of 
        the enterprises.
    ``(c) Timing.--The Director may exercise the authority under this 
section to issue regulations to establish, modify, or rescind housing 
goals not more than once per calendar year. Such regulations for a 
calendar year may establish, or make modifications or rescissions with 
respect to, more than one annual housing goal, but all such regulations 
for a calendar year shall be issued concurrently.
    ``(d) Transition.--In order to permit a transition to any goal 
established under this section, the Director shall phase in such goal 
over a period of one year. Such goal shall not be enforceable during 
the one-year transition period.
    ``(e) Implementation During Transition.--The Director shall 
establish any requirements necessary to implement the transition 
provisions under this section by notice, after providing the 
enterprises with an opportunity to review and comment not less than 30 
days before the issuance of such notice.''.

SEC. 127. OTHER REQUIREMENTS.

    The first sentence of section 1335(a) of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4565(a)) is amended by striking 
``low-'' and all that follows through ``1334'' and inserting ``goals 
under this subpart''.

SEC. 128. MONITORING AND ENFORCING COMPLIANCE WITH HOUSING GOALS.

    Section 1336 of the Housing and Community Development Act of 1992 
(12 U.S.C. 4566) is amended--
            (1) in subsection (a)(1), by striking ``established'' and 
        all that follows through ``1334'' and inserting ``under this 
        subpart'';
            (2) in subsection (b)--
                    (A) in the subsection heading, by inserting 
                ``Preliminary'' before ``Determination'';
                    (B) by striking paragraph (1) and inserting the 
                following new paragraph:
            ``(1) Notice.--If the Director preliminarily determines 
        that an enterprise has failed, or that there is a substantial 
        probability that an enterprise will fail, to meet any housing 
        goal under this subpart, the Director shall provide written 
        notice to the enterprise of such a preliminary determination, 
        the reasons for such determination, and the information on 
        which the Director based the determination.'';
                    (C) in paragraph (2)--
                            (i) in subparagraph (A), by inserting 
                        ``finally'' before ``determining'';
                            (ii) by striking subparagraphs (B) and (C) 
                        and inserting the following new subparagraph:
                    ``(B) Extension or shortening of period.--The 
                Director may--
                            ``(i) extend the period under subparagraph 
                        (A) for good cause for not more than 30 
                        additional days; and
                            ``(ii) shorten the period under 
                        subparagraph (A) for good cause.''; and
                            (iii) by redesignating subparagraph (D) as 
                        subparagraph (C); and
                    (D) in paragraph (3)--
                            (i) in subparagraph (A), by striking 
                        ``determine'' and inserting ``issue a final 
                        determination of'';
                            (ii) in subparagraph (B), by inserting 
                        ``final'' before ``determinations''; and
                            (iii) in subparagraph (C)--
                                    (I) by striking ``Committee on 
                                Banking, Finance and Urban Affairs'' 
                                and inserting ``Committee on Financial 
                                Services''; and
                                    (II) by inserting ``final'' before 
                                ``determination'' each place such term 
                                appears; and
            (3) in subsection (c)--
                    (A) by striking the subsection designation and 
                heading and all that follows through the end of 
                paragraph (1) and inserting the following:
    ``(c) Cease and Desist Orders, Civil Money Penalties, and Remedies 
Including Housing Plans.--
            ``(1) Requirement.--If the Director finds, pursuant to 
        subsection (b), that there is a substantial probability that an 
        enterprise will fail, or has actually failed, to meet any 
        housing goal under this subpart and that the achievement of the 
        housing goal was or is feasible, the Director may require that 
        the enterprise submit a housing plan under this subsection. If 
        the Director makes such a finding and the enterprise refuses to 
        submit such a plan, submits an unacceptable plan, fails to 
        comply with the plan or the Director finds that the enterprise 
        has failed to meet any housing goal under this subpart, in 
        addition to requiring an enterprise to submit a housing plan, 
        the Director may issue a cease and desist order in accordance 
        with section 1341, impose civil money penalties in accordance 
        with section 1345, or order other remedies as set forth in 
        paragraph (7) of this subsection.'';
                    (B) in paragraph (2)--
                            (i) by striking ``Contents.--Each housing 
                        plan'' and inserting ``Housing plan.--If the 
                        Director requires a housing plan under this 
                        section, such a plan''; and
                            (ii) in subparagraph (B), by inserting 
                        ``and changes in its operations'' after 
                        ``improvements'';
                    (C) in paragraph (3)--
                            (i) by inserting ``comply with any remedial 
                        action or'' before ``submit a housing plan''; 
                        and
                            (ii) by striking ``under subsection (b)(3) 
                        that a housing plan is required'';
                    (D) in paragraph (4), by striking the first two 
                sentences and inserting the following: ``The Director 
                shall review each submission by an enterprise, 
                including a housing plan submitted under this 
                subsection, and not later than 30 days after 
                submission, approve or disapprove the plan or other 
                action. The Director may extend the period for approval 
                or disapproval for a single additional 30-day period if 
                the Director determines such extension necessary.''; 
                and
                    (E) by adding at the end the following new 
                paragraph:
            ``(7) Additional remedies for failure to meet goals.--In 
        addition to ordering a housing plan under this section, issuing 
        cease and desist orders under section 1341, and ordering civil 
        money penalties under section 1345, the Director may seek other 
        actions when an enterprise fails to meet a goal, and exercise 
        appropriate enforcement authority available to the Director 
        under this Act to prohibit the enterprise from entering into 
        new programs and new business activities and to order the 
        enterprise to suspend programs and business activities pending 
        its achievement of the goal.''.

SEC. 129. ENFORCEMENT.

    (a) Cease-and-Desist Proceedings.--Section 1341 of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4581) is amended--
            (1) by striking subsection (a) and inserting the following 
        new subsection:
    ``(a) Grounds for Issuance.--The Director may issue and serve a 
notice of charges under this section upon an enterprise if the Director 
determines--
            ``(1) the enterprise has failed to meet any housing goal 
        established under subpart B, following a written notice and 
        determination of such failure in accordance with section 1336;
            ``(2) the enterprise has failed to submit a report under 
        section 1314, following a notice of such failure, an 
        opportunity for comment by the enterprise, and a final 
        determination by the Director;
            ``(3) the enterprise has failed to submit the information 
        required under subsection (m) or (n) of section 309 of the 
        Federal National Mortgage Association Charter Act, or 
        subsection (e) or (f) of section 307 of the Federal Home Loan 
        Mortgage Corporation Act;
            ``(4) the enterprise has violated any provision of this 
        part or any order, rule or regulation under this part;
            ``(5) the enterprise has failed to submit a housing plan 
        that complies with section 1336(c) within the applicable 
        period; or
            ``(6) the enterprise has failed to comply with a housing 
        plan under section 1336(c).'';
            (2) in subsection (b)(2), by striking ``requiring the 
        enterprise to'' and all that follows through the end of the 
        paragraph and inserting the following:
 ``requiring the enterprise to--
                    ``(A) comply with the goal or goals;
                    ``(B) submit a report under section 1314;
                    ``(C) comply with any provision this part or any 
                order, rule or regulation under such part;
                    ``(D) submit a housing plan in compliance with 
                section 1336(c);
                    ``(E) comply with a housing plan submitted under 
                section 1336(c); or
                    ``(F) provide the information required under 
                subsection (m) or (n) of section 309 of the Federal 
                National Mortgage Association Charter Act or subsection 
                (e) or (f) of section 307 of the Federal Home Loan 
                Mortgage Corporation Act, as applicable.'';
            (3) in subsection (c), by inserting ``date of the'' before 
        ``service of the order''; and
            (4) by striking subsection (d).
    (b) Authority of Director to Enforce Notices and Orders.--Section 
1344 of the Housing and Community Development Act of 1992 (12 U.S.C. 
4584) is amended by striking subsection (a) and inserting the following 
new subsection:
    ``(a) Enforcement.--The Director may, in the discretion of the 
Director, apply to the United States District Court for the District of 
Columbia, or the United States district court within the jurisdiction 
of which the headquarters of the enterprise is located, for the 
enforcement of any effective and outstanding notice or order issued 
under section 1341 or 1345, or request that the Attorney General of the 
United States bring such an action. Such court shall have jurisdiction 
and power to order and require compliance with such notice or order.''.
    (c) Civil Money Penalties.--Section 1345 of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4585) is amended--
            (1) by striking subsections (a) and (b) and inserting the 
        following new subsections:
    ``(a) Authority.--The Director may impose a civil money penalty, in 
accordance with the provisions of this section, on any enterprise that 
has failed to--
            ``(1) meet any housing goal established under subpart B, 
        following a written notice and determination of such failure in 
        accordance with section 1336(b);
            ``(2) submit a report under section 1314, following a 
        notice of such failure, an opportunity for comment by the 
        enterprise, and a final determination by the Director;
            ``(3) submit the information required under subsection (m) 
        or (n) of section 309 of the Federal National Mortgage 
        Association Charter Act, or subsection (e) or (f) of section 
        307 of the Federal Home Loan Mortgage Corporation Act;
            ``(4) comply with any provision of this part or any order, 
        rule or regulation under this part;
            ``(5) submit a housing plan pursuant to section 1336(c) 
        within the required period; or
            ``(6) comply with a housing plan for the enterprise under 
        section 1336(c).
    ``(b) Amount of Penalty.--The amount of the penalty, as determined 
by the Director, may not exceed--
            ``(1) for any failure described in paragraph (1), (5), or 
        (6) of subsection (a), $50,000 for each day that the failure 
        occurs; and
            ``(2) for any failure described in paragraph (2), (3), or 
        (4) of subsection (a), $20,000 for each day that the failure 
        occurs.'';
            (2) in subsection (c)--
                    (A) in paragraph (1)--
                            (i) in subparagraph (A), by inserting 
                        ``and'' after the semicolon at the end;
                            (ii) in subparagraph (B), by striking ``; 
                        and'' and inserting a period; and
                            (iii) by striking subparagraph (C); and
                    (B) in paragraph (2), by inserting after the period 
                at the end the following: ``In determining the penalty 
                under subsection (a)(1), the Director shall give 
                consideration to the length of time the enterprise 
                should reasonably take to achieve the goal.'';
            (3) in the first sentence of subsection (d)--
                    (A) by striking ``request the Attorney General of 
                the United States to'' and inserting ``, in the 
                discretion of the Director,''; and
                    (B) by inserting ``, or request that the Attorney 
                General of the United States bring such an action'' 
                before the period at the end;
            (4) by striking subsection (f); and
            (5) by redesignating subsection (g) as subsection (f).
    (d) Conforming Amendment.--The heading for subpart C of part 2 of 
subtitle A of the Housing and Community Development Act of 1992 is 
amended to read as follows:

                      ``Subpart C--Enforcement''.

SEC. 130. CONFORMING AMENDMENTS.

    Part 2 of subtitle A of title XIII of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4541 et seq.) is amended--
            (1) by striking ``Secretary'' each place such term appears 
        in such part and inserting ``Director'';
            (2) in the section heading for section 1323 (12 U.S.C. 
        4543), by inserting ``of enterprises'' before the period at the 
        end;
            (3) in section 1326 (12 U.S.C. 4546)--
                    (A) in subsection (a)--
                            (i) by striking ``or'' the last place it 
                        appears; and
                            (ii) by inserting ``, or section 10(j)(12) 
                        of the Federal Home Loan Bank Act (12 U.S.C. 
                        1441a)'' before the period at the end; and
                    (B) in subsection (b)--
                            (i) by striking ``or'' the last place it 
                        appears and inserting a comma; and
                            (ii) by inserting ``, or section 10(j)(12) 
                        of the Federal Home Loan Bank Act (12 U.S.C. 
                        1441a'' before the period at the end;
            (4) by striking section 1327 (12 U.S.C. 4547);
            (5) by striking section 1328 (12 U.S.C. 4548);
            (6) in section 1332 (12 U.S.C. 4562), by striking 
        subsection (d);
            (7) in section 1333 (12 U.S.C. 4563), by striking 
        subsection (d);
            (8) in section 1334 (12 U.S.C. 4564), by striking 
        subsection (d);
            (9) by striking sections 1337 and 1338 (12 U.S.C. 4567, 
        4562 note);
            (10) in sections 1345(c)(1)(A) and 1346(b) (12 U.S.C. 
        4585(c)(1)(A), 4586(b)), by striking ``Secretary's'' each place 
        such term appears and inserting ``Director's''; and
            (11) by striking section 1349 (12 U.S.C. 4589).

                  Subtitle C--Prompt Corrective Action

SEC. 141. CAPITAL CLASSIFICATIONS.

    (a) In General.--Section 1364 of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4614) is amended--
            (1) in the heading for subsection (a) by striking ``In 
        General'' and inserting ``Enterprises'';
            (2) in subsection (c)--
                    (A) by striking ``subsection (b)'' and inserting 
                ``subsection (c)'';
                    (B) by striking ``enterprises'' and inserting 
                ``regulated entities''; and
                    (C) by striking the last sentence;
            (3) by redesignating subsections (c) (as so amended by 
        paragraph (2) of this subsection) and (d) as subsections (d) 
        and (f), respectively;
            (4) by striking subsection (b) and inserting the following 
        new subsections:
    ``(b) Federal Home Loan Banks.--
            ``(1) Establishment and criteria.--For purposes of this 
        subtitle, the Director shall, by regulation--
                    ``(A) establish the capital classifications 
                specified under paragraph (2) for the Federal home loan 
                banks;
                    ``(B) establish criteria for each such capital 
                classification based on the amount and types of capital 
                held by a bank and the risk-based, minimum, and 
                critical capital levels for the banks and taking due 
                consideration of the capital classifications 
                established under subsection (a) for the enterprises, 
                with such modifications as the Director determines to 
                be appropriate to reflect the difference in operations 
                between the banks and the enterprises; and
                    ``(C) shall classify the Federal home loan banks 
                according to such capital classifications.
            ``(2) Classifications.--The capital classifications 
        specified under this paragraph are--
                    ``(A) adequately capitalized;
                    ``(B) undercapitalized;
                    ``(C) significantly undercapitalized; and
                    ``(D) critically undercapitalized.
    ``(c) Discretionary Classification.--
            ``(1) Grounds for reclassification.--The Director may 
        reclassify a regulated entity under paragraph (2) if--
                    ``(A) at any time, the Director determines in 
                writing that the regulated entity is engaging in 
                conduct that could result in a rapid depletion of core 
                or total capital or, in the case of an enterprise, that 
                the value of the property subject to mortgages held or 
                securitized by the enterprise has decreased 
                significantly;
                    ``(B) after notice and an opportunity for hearing, 
                the Director determines that the regulated entity is in 
                an unsafe or unsound condition; or
                    ``(C) pursuant to section 1371(b), the Director 
                deems the regulated entity to be engaging in an unsafe 
                or unsound practice.
            ``(2) Reclassification.--In addition to any other action 
        authorized under this title, including the reclassification of 
        a regulated entity for any reason not specified in this 
        subsection, if the Director takes any action described in 
        paragraph (1) the Director may classify a regulated entity--
                    ``(A) as undercapitalized, if the regulated entity 
                is otherwise classified as adequately capitalized;
                    ``(B) as significantly undercapitalized, if the 
                regulated entity is otherwise classified as 
                undercapitalized; and
                    ``(C) as critically undercapitalized, if the 
                regulated entity is otherwise classified as 
                significantly undercapitalized.''; and
            (5) by inserting after subsection (d) (as so redesignated 
        by paragraph (3) of this subsection), the following new 
        subsection:
    ``(e) Restriction on Capital Distributions.--
            ``(1) In general.--A regulated entity shall make no capital 
        distribution if, after making the distribution, the regulated 
        entity would be undercapitalized.
            ``(2) Exception.--Notwithstanding paragraph (1), the 
        Director may permit a regulated entity, to the extent 
        appropriate or applicable, to repurchase, redeem, retire, or 
        otherwise acquire shares or ownership interests if the 
        repurchase, redemption, retirement, or other acquisition--
                    ``(A) is made in connection with the issuance of 
                additional shares or obligations of the regulated 
                entity in at least an equivalent amount; and
                    ``(B) will reduce the financial obligations of the 
                regulated entity or otherwise improve the financial 
                condition of the entity.''.
    (b) Regulations.--Not later than the expiration of the 120-day 
period beginning on the effective date under section 184, the Director 
of the Federal Housing Finance Agency shall issue regulations to carry 
out section 1364(b) of the Housing and Community Development Act of 
1992 (as added by paragraph (4) of this subsection), relating to 
capital classifications for the Federal home loan banks.

SEC. 142. SUPERVISORY ACTIONS APPLICABLE TO UNDERCAPITALIZED REGULATED 
              ENTITIES.

    Section 1365 of the Housing and Community Development Act of 1992 
(12 U.S.C. 4615) is amended--
            (1) in the section heading, by striking ``enterprises'' and 
        inserting ``entities'';
            (2) in subsection (a)--
                    (A) by redesignating paragraphs (1) and (2) as 
                paragraphs (2) and (3), respectively;
                    (B) by inserting before paragraph (2) the following 
                paragraph:
            ``(1) Required monitoring.--The Director shall--
                    ``(A) closely monitor the condition of any 
                regulated entity that is classified as 
                undercapitalized;
                    ``(B) closely monitor compliance with the capital 
                restoration plan, restrictions, and requirements 
                imposed under this section; and
                    ``(C) periodically review the plan, restrictions, 
                and requirements applicable to the undercapitalized 
                regulated entity to determine whether the plan, 
                restrictions, and requirements are achieving the 
                purpose of this section.''; and
                    (C) by inserting at the end the following new 
                paragraphs:
            ``(4) Restriction of asset growth.--A regulated entity that 
        is classified as undercapitalized shall not permit its average 
        total assets (as such term is defined in section 1316(b) during 
        any calendar quarter to exceed its average total assets during 
        the preceding calendar quarter unless--
                    ``(A) the Director has accepted the capital 
                restoration plan of the regulated entity;
                    ``(B) any increase in total assets is consistent 
                with the plan; and
                    ``(C) the ratio of core or total capital to assets 
                for the regulated entity increases during the calendar 
                quarter at a rate sufficient to enable the entity to 
                become adequately capitalized within a reasonable time.
            ``(5) Prior approval of acquisitions, new programs, and new 
        business activities.--A regulated entity that is classified as 
        undercapitalized shall not, directly or indirectly, acquire any 
        interest in any entity or engage in any new program or new 
        business activity unless--
                    ``(A) the Director has accepted the capital 
                restoration plan of the regulated entity, the entity is 
                implementing the plan, and the Director determines that 
                the proposed action is consistent with and will further 
                the achievement of the plan; or
                    ``(B) the Director determines that the proposed 
                action will further the purpose of this section.'';
            (3) in the subsection heading for subsection (b), by 
        striking ``From Undercapitalized to Significantly 
        Undercapitalized''; and
            (4) by striking subsection (c) and inserting the following 
        new subsection:
    ``(c) Other Discretionary Safeguards.--The Director may take, with 
respect to a regulated entity that is classified as undercapitalized, 
any of the actions authorized to be taken under section 1366 with 
respect to a regulated entity that is classified as significantly 
undercapitalized, if the Director determines that such actions are 
necessary to carry out the purpose of this subtitle.''.

SEC. 143. SUPERVISORY ACTIONS APPLICABLE TO SIGNIFICANTLY 
              UNDERCAPITALIZED REGULATED ENTITIES.

    Section 1366 of the Housing and Community Development Act of 1992 
(12 U.S.C. 4616) is amended--
            (1) in the section heading, by striking ``enterprises'' and 
        inserting ``entities'';
            (2) in subsection (a)(2)(A), by striking ``enterprise'' the 
        last place such term appears;
            (3) in subsection (b)--
                    (A) in the subsection heading, by striking 
                ``Discretionary Supervisory Actions'' and inserting 
                ``Specific Actions'';
                    (B) in the matter preceding paragraph (1), by 
                striking ``may, at any time, take any'' and inserting 
                ``shall carry out this section by taking, at any time, 
                one or more'';
                    (C) by redesignating paragraphs (5) and (6) as 
                paragraphs (6) and (7), respectively;
                    (D) by inserting after paragraph (4) the following 
                new paragraph:
            ``(5) Improvement of management.--Take one or more of the 
        following actions:
                    ``(A) New election of board.--Order a new election 
                for the board of directors of the regulated entity.
                    ``(B) Dismissal of directors or executive 
                officers.--Require the regulated entity to dismiss from 
                office any director or executive officer who had held 
                office for more than 180 days immediately before the 
                entity became undercapitalized. Dismissal under this 
                subparagraph shall not be construed to be a removal 
                pursuant to the Director's enforcement powers provided 
                in section 1377.
                    ``(C) Employ qualified executive officers.--Require 
                the regulated entity to employ qualified executive 
                officers (who, if the Director so specifies, shall be 
                subject to approval by the Director).''; and
                    (E) by inserting at the end the following new 
                paragraph:
            ``(8) Other action.--Require the regulated entity to take 
        any other action that the Director determines will better carry 
        out the purpose of this section than any of the actions 
        specified in this paragraph.'';
            (4) by redesignating subsection (c) as subsection (d); and
            (5) by inserting after subsection (b) the following new 
        subsection:
    ``(c) Restriction on Compensation of Executive Officers.--A 
regulated entity that is classified as significantly undercapitalized 
may not, without prior written approval by the Director--
            ``(1) pay any bonus to any executive officer; or
            ``(2) provide compensation to any executive officer at a 
        rate exceeding that officer's average rate of compensation 
        (excluding bonuses, stock options, and profit sharing) during 
        the 12 calendar months preceding the calendar month in which 
        the regulated entity became undercapitalized.''.

SEC. 144. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED REGULATED 
              ENTITIES.

    (a) Enterprises.--Section 1367 of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4617) is amended to read as follows:

``SEC. 1367. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED ENTERPRISES.

    ``(a) Appointment of Agency as Conservator or Receiver.--
            ``(1) In general.--Notwithstanding any other provision of 
        Federal law, the Director may establish a conservatorship or 
        receivership in the manner provided under paragraph (2).
            ``(2) Appointment.--The Agency may, at the discretion of 
        the Director, be appointed conservator or receiver for the 
        purpose of reorganizing, rehabilitating, or winding up the 
        affairs of an enterprise
            ``(3) Grounds for appointment.--The grounds for appointing 
        a conservator or receiver for any enterprise are as follows:
                    ``(A) Assets insufficient for obligations.--The 
                assets of the enterprise are less than the obligations 
                of the enterprise to its creditors and others.
                    ``(B) Substantial dissipation.--Substantial 
                dissipation of assets or earnings due to--
                            ``(i) any violation of any provision of 
                        Federal or State law; or
                            ``(ii) any unsafe or unsound practice.
                    ``(C) Unsafe or unsound condition.--An unsafe or 
                unsound condition to transact business.
                    ``(D) Cease-and-desist orders.--Any willful 
                violation of a cease-and-desist order that has become 
                final.
                    ``(E) Concealment.--Any concealment of the books, 
                papers, records, or assets of the enterprise, or any 
                refusal to submit the books, papers, records, or 
                affairs of the enterprise, for inspection to any 
                examiner or to any lawful agent of the Director.
                    ``(F) Inability to meet obligations.--The 
                enterprise is likely to be unable to pay its 
                obligations or meet the demands of its creditors in the 
                normal course of business.
                    ``(G) Losses.--The enterprise has incurred or is 
                likely to incur losses that will deplete all or 
                substantially all of its capital, and there is no 
                reasonable prospect for the enterprise to become 
                adequately capitalized (as defined in section 
                1364(a)(1)).
                    ``(H) Violations of law.--Any violation of any law 
                or regulation, or any unsafe or unsound practice or 
                condition that is likely to--
                            ``(i) cause insolvency or substantial 
                        dissipation of assets or earnings; or
                            ``(ii) weaken the condition of the 
                        enterprise.
                    ``(I) Consent.--The enterprise, by resolution of 
                its board of directors or its shareholders or members, 
                consents to the appointment.
                    ``(J) Undercapitalization.--The enterprise is 
                undercapitalized or significantly undercapitalized (as 
                defined in section 1364(a)(3)), and--
                            ``(i) has no reasonable prospect of 
                        becoming adequately capitalized;
                            ``(ii) fails to become adequately 
                        capitalized, as required by--
                                    ``(I) section 1365(a)(1) with 
                                respect to an undercapitalized 
                                enterprise; or
                                    ``(II) section 1366(a)(1) with 
                                respect to a significantly 
                                undercapitalized enterprise;
                            ``(iii) fails to submit a capital 
                        restoration plan acceptable to the Agency 
                        within the time prescribed under section 1369C; 
                        or
                            ``(iv) materially fails to implement a 
                        capital restoration plan submitted and accepted 
                        under section 1369C.
                    ``(K) Critical undercapitalization.--The enterprise 
                is critically undercapitalized, as defined in section 
                1364(a)(4).
                    ``(L) Money laundering.--The Attorney General 
                notifies the Director in writing that the enterprise 
                has been found guilty of a criminal offense under 
                section 1956 or 1957 of title 18, United States Code, 
                or section 5322 or 5324 of title 31, United States 
                Code.
            ``(4) Judicial review.--
                    ``(A) In general.--If the Agency is appointed 
                conservator or receiver under this section, the 
                enterprise may, within 30 days of such appointment, 
                bring an action in the United States District Court for 
                the judicial district in which the home office of such 
                enterprise is located, or in the United States District 
                Court for the District of Columbia, for an order 
                requiring the Agency to remove itself as conservator or 
                receiver.
                    ``(B) Review.--Upon the filing of an action under 
                subparagraph (A), the court shall, upon the merits, 
                dismiss such action or direct the Agency to remove 
                itself as such conservator or receiver.
            ``(5) Directors not liable for acquiescing in appointment 
        of conservator or receiver.--The members of the board of 
        directors of an enterprise shall not be liable to the 
        shareholders or creditors of the enterprise for acquiescing in 
        or consenting in good faith to the appointment of the Agency as 
        conservator or receiver for that enterprise.
            ``(6) Agency not subject to any other federal agency.--When 
        acting as conservator or receiver, the Agency shall not be 
        subject to the direction or supervision of any other agency of 
        the United States or any State in the exercise of the rights, 
        powers, and privileges of the Agency.
    ``(b) Powers and Duties of the Agency as Conservator or Receiver.--
            ``(1) Rulemaking authority of the agency.--The Agency may 
        prescribe such regulations as the Agency determines to be 
        appropriate regarding the conduct of conservatorships or 
        receiverships.
            ``(2) General powers.--
                    ``(A) Successor to enterprise.--The Agency shall, 
                as conservator or receiver, and by operation of law, 
                immediately succeed to--
                            ``(i) all rights, titles, powers, and 
                        privileges of the enterprise, and of any 
                        stockholder, officer, or director of such 
                        enterprise with respect to the enterprise and 
                        the assets of the enterprise; and
                            ``(ii) title to the books, records, and 
                        assets of any other legal custodian of such 
                        enterprise.
                    ``(B) Operate the enterprise.--The Agency may, as 
                conservator or receiver--
                            ``(i) take over the assets of and operate 
                        the enterprise with all the powers of the 
                        shareholders, the directors, and the officers 
                        of the enterprise and conduct all business of 
                        the enterprise;
                            ``(ii) collect all obligations and money 
                        due the enterprise;
                            ``(iii) perform all functions of the 
                        enterprise in the name of the enterprise which 
                        are consistent with the appointment as 
                        conservator or receiver; and
                            ``(iv) preserve and conserve the assets and 
                        property of such enterprise.
                    ``(C) Functions of officers, directors, and 
                shareholders of an enterprise.--The Agency may, by 
                regulation or order, provide for the exercise of any 
                function by any stockholder, director, or officer of 
                any enterprise for which the Agency has been named 
                conservator or receiver.
                    ``(D) Powers as conservator.--The Agency may, as 
                conservator, take such action as may be--
                            ``(i) necessary to put the enterprise in a 
                        sound and solvent condition; and
                            ``(ii) appropriate to carry on the business 
                        of the enterprise and preserve and conserve the 
                        assets and property of the enterprise.
                    ``(E) Additional powers as receiver.--The Agency 
                may, as receiver, place the enterprise in liquidation 
                and proceed to realize upon the assets of the 
                enterprise, having due regard to the conditions of the 
                housing finance market.
                    ``(F) Organization of new enterprises.--The Agency 
                may, as receiver, organize a successor enterprise that 
                will operate pursuant to subsection (i).
                    ``(G) Transfer of assets and liabilities.--The 
                Agency may, as conservator or receiver, transfer any 
                asset or liability of the enterprise in default without 
                any approval, assignment, or consent with respect to 
                such transfer.
                    ``(H) Payment of valid obligations.--The Agency, as 
                conservator or receiver, shall, to the extent of 
                proceeds realized from the performance of contracts or 
                sale of the assets of an enterprise, pay all valid 
                obligations of the enterprise in accordance with the 
                prescriptions and limitations of this section.
                    ``(I) Subpoena authority.--
                            ``(i) In general.--
                                    ``(I) In general.--The Agency may, 
                                as conservator or receiver, and for 
                                purposes of carrying out any power, 
                                authority, or duty with respect to an 
                                enterprise (including determining any 
                                claim against the enterprise and 
                                determining and realizing upon any 
                                asset of any person in the course of 
                                collecting money due the enterprise), 
                                exercise any power established under 
                                section 1348.
                                    ``(II) Applicability of law.--The 
                                provisions of section 1348 shall apply 
                                with respect to the exercise of any 
                                power exercised under this subparagraph 
                                in the same manner as such provisions 
                                apply under that section.
                            ``(ii) Authority of director.--A subpoena 
                        or subpoena duces tecum may be issued under 
                        clause (i) only by, or with the written 
                        approval of, the Director, or the designee of 
                        the Director.
                            ``(iii) Rule of construction.--This 
                        subsection shall not be construed to limit any 
                        rights that the Agency, in any capacity, might 
                        otherwise have under section 1317 or 1379B.
                    ``(J) Incidental powers.--The Agency may, as 
                conservator or receiver--
                            ``(i) exercise all powers and authorities 
                        specifically granted to conservators or 
                        receivers, respectively, under this section, 
                        and such incidental powers as shall be 
                        necessary to carry out such powers; and
                            ``(ii) take any action authorized by this 
                        section, which the Agency determines is in the 
                        best interests of the enterprise or the Agency.
            ``(3) Authority of receiver to determine claims.--
                    ``(A) In general.--The Agency may, as receiver, 
                determine claims in accordance with the requirements of 
                this subsection and any regulations prescribed under 
                paragraph (4).
                    ``(B) Notice requirements.--The receiver, in any 
                case involving the liquidation or winding up of the 
                affairs of a closed enterprise, shall--
                            ``(i) promptly publish a notice to the 
                        creditors of the enterprise to present their 
                        claims, together with proof, to the receiver by 
                        a date specified in the notice which shall be 
                        not less than 90 days after the publication of 
                        such notice; and
                            ``(ii) republish such notice approximately 
                        1 month and 2 months, respectively, after the 
                        publication under clause (i).
                    ``(C) Mailing required.--The receiver shall mail a 
                notice similar to the notice published under 
                subparagraph (B)(i) at the time of such publication to 
                any creditor shown on the books of the enterprise--
                            ``(i) at the last address of the creditor 
                        appearing in such books; or
                            ``(ii) upon discovery of the name and 
                        address of a claimant not appearing on the 
                        books of the enterprise within 30 days after 
                        the discovery of such name and address.
            ``(4) Rulemaking authority relating to determination of 
        claims.--Subject to subsection (c), the Director may prescribe 
        regulations regarding the allowance or disallowance of claims 
        by the receiver and providing for administrative determination 
        of claims and review of such determination.
            ``(5) Procedures for determination of claims.--
                    ``(A) Determination period.--
                            ``(i) In general.--Before the end of the 
                        180-day period beginning on the date on which 
                        any claim against an enterprise is filed with 
                        the Agency as receiver, the Agency shall 
                        determine whether to allow or disallow the 
                        claim and shall notify the claimant of any 
                        determination with respect to such claim.
                            ``(ii) Extension of time.--The period 
                        described in clause (i) may be extended by a 
                        written agreement between the claimant and the 
                        Agency.
                            ``(iii) Mailing of notice sufficient.--The 
                        requirements of clause (i) shall be deemed to 
                        be satisfied if the notice of any determination 
                        with respect to any claim is mailed to the last 
                        address of the claimant which appears--
                                    ``(I) on the books of the 
                                enterprise;
                                    ``(II) in the claim filed by the 
                                claimant; or
                                    ``(III) in documents submitted in 
                                proof of the claim.
                            ``(iv) Contents of notice of 
                        disallowance.--If any claim filed under clause 
                        (i) is disallowed, the notice to the claimant 
                        shall contain--
                                    ``(I) a statement of each reason 
                                for the disallowance; and
                                    ``(II) the procedures available for 
                                obtaining agency review of the 
                                determination to disallow the claim or 
                                judicial determination of the claim.
                    ``(B) Allowance of proven claim.--The receiver 
                shall allow any claim received on or before the date 
                specified in the notice published under paragraph 
                (3)(B)(i) by the receiver from any claimant which is 
                proved to the satisfaction of the receiver.
                    ``(C) Disallowance of claims filed after end of 
                filing period.--Claims filed after the date specified 
                in the notice published under paragraph (3)(B)(i), or 
                the date specified under paragraph (3)(C), shall be 
                disallowed and such disallowance shall be final.
                    ``(D) Authority to disallow claims.--
                            ``(i) In general.--The receiver may 
                        disallow any portion of any claim by a creditor 
                        or claim of security, preference, or priority 
                        which is not proved to the satisfaction of the 
                        receiver.
                            ``(ii) Payments to less than fully secured 
                        creditors.--In the case of a claim of a 
                        creditor against an enterprise which is secured 
                        by any property or other asset of such 
                        enterprise, the receiver--
                                    ``(I) may treat the portion of such 
                                claim which exceeds an amount equal to 
                                the fair market value of such property 
                                or other asset as an unsecured claim 
                                against the enterprise; and
                                    ``(II) may not make any payment 
                                with respect to such unsecured portion 
                                of the claim other than in connection 
                                with the disposition of all claims of 
                                unsecured creditors of the enterprise.
                            ``(iii) Exceptions.--No provision of this 
                        paragraph shall apply with respect to--
                                    ``(I) any extension of credit from 
                                any Federal Reserve Bank or the United 
                                States Treasury; or
                                    ``(II) any security interest in the 
                                assets of the enterprise securing any 
                                such extension of credit.
                    ``(E) No judicial review of determination pursuant 
                to subparagraph (d).--No court may review the 
                determination of the Agency under subparagraph (D) to 
                disallow a claim.
                    ``(F) Legal effect of filing.--
                            ``(i) Statute of limitation tolled.--For 
                        purposes of any applicable statute of 
                        limitations, the filing of a claim with the 
                        receiver shall constitute a commencement of an 
                        action.
                            ``(ii) No prejudice to other actions.--
                        Subject to paragraph (10), the filing of a 
                        claim with the receiver shall not prejudice any 
                        right of the claimant to continue any action 
                        which was filed before the date of the 
                        appointment of the receiver, subject to the 
                        determination of claims by the receiver.
            ``(6) Provision for judicial determination of claims.--
                    ``(A) In general.--The claimant may file suit on a 
                claim (or continue an action commenced before the 
                appointment of the receiver) in the district or 
                territorial court of the United States for the district 
                within which the principal place of business of the 
                enterprise is located or the United States District 
                Court for the District of Columbia (and such court 
                shall have jurisdiction to hear such claim), before the 
                end of the 60-day period beginning on the earlier of--
                            ``(i) the end of the period described in 
                        paragraph (5)(A)(i) with respect to any claim 
                        against an enterprise for which the Agency is 
                        receiver; or
                            ``(ii) the date of any notice of 
                        disallowance of such claim pursuant to 
                        paragraph (5)(A)(i).
                    ``(B) Statute of limitations.--A claim shall be 
                deemed to be disallowed (other than any portion of such 
                claim which was allowed by the receiver), and such 
                disallowance shall be final, and the claimant shall 
                have no further rights or remedies with respect to such 
                claim, if the claimant fails, before the end of the 60-
                day period described under subparagraph (A), to file 
                suit on such claim (or continue an action commenced 
                before the appointment of the receiver).
            ``(7) Review of claims.--
                    ``(A) Other review procedures.--
                            ``(i) In general.--The Agency shall 
                        establish such alternative dispute resolution 
                        processes as may be appropriate for the 
                        resolution of claims filed under paragraph 
                        (5)(A)(i).
                            ``(ii) Criteria.--In establishing 
                        alternative dispute resolution processes, the 
                        Agency shall strive for procedures which are 
                        expeditious, fair, independent, and low cost.
                            ``(iii) Voluntary binding or nonbinding 
                        procedures.--The Agency may establish both 
                        binding and nonbinding processes, which may be 
                        conducted by any government or private party. 
                        All parties, including the claimant and the 
                        Agency, must agree to the use of the process in 
                        a particular case.
                    ``(B) Consideration of incentives.--The Agency 
                shall seek to develop incentives for claimants to 
                participate in the alternative dispute resolution 
                process.
            ``(8) Expedited determination of claims.--
                    ``(A) Establishment required.--The Agency shall 
                establish a procedure for expedited relief outside of 
                the routine claims process established under paragraph 
                (5) for claimants who--
                            ``(i) allege the existence of legally valid 
                        and enforceable or perfected security interests 
                        in assets of any enterprise for which the 
                        Agency has been appointed receiver; and
                            ``(ii) allege that irreparable injury will 
                        occur if the routine claims procedure is 
                        followed.
                    ``(B) Determination period.--Before the end of the 
                90-day period beginning on the date any claim is filed 
                in accordance with the procedures established under 
                subparagraph (A), the Director shall--
                            ``(i) determine--
                                    ``(I) whether to allow or disallow 
                                such claim; or
                                    ``(II) whether such claim should be 
                                determined pursuant to the procedures 
                                established under paragraph (5); and
                            ``(ii) notify the claimant of the 
                        determination, and if the claim is disallowed, 
                        provide a statement of each reason for the 
                        disallowance and the procedure for obtaining 
                        agency review or judicial determination.
                    ``(C) Period for filing or renewing suit.--Any 
                claimant who files a request for expedited relief shall 
                be permitted to file a suit, or to continue a suit 
                filed before the appointment of the receiver, seeking a 
                determination of the rights of the claimant with 
                respect to such security interest after the earlier 
                of--
                            ``(i) the end of the 90-day period 
                        beginning on the date of the filing of a 
                        request for expedited relief; or
                            ``(ii) the date the Agency denies the 
                        claim.
                    ``(D) Statute of limitations.--If an action 
                described under subparagraph (C) is not filed, or the 
                motion to renew a previously filed suit is not made, 
                before the end of the 30-day period beginning on the 
                date on which such action or motion may be filed under 
                subparagraph (B), the claim shall be deemed to be 
                disallowed as of the end of such period (other than any 
                portion of such claim which was allowed by the 
                receiver), such disallowance shall be final, and the 
                claimant shall have no further rights or remedies with 
                respect to such claim.
                    ``(E) Legal effect of filing.--
                            ``(i) Statute of limitation tolled.--For 
                        purposes of any applicable statute of 
                        limitations, the filing of a claim with the 
                        receiver shall constitute a commencement of an 
                        action.
                            ``(ii) No prejudice to other actions.--
                        Subject to paragraph (10), the filing of a 
                        claim with the receiver shall not prejudice any 
                        right of the claimant to continue any action 
                        that was filed before the appointment of the 
                        receiver, subject to the determination of 
                        claims by the receiver.
            ``(9) Payment of claims.--
                    ``(A) In general.--The receiver may, in the 
                discretion of the receiver, and to the extent funds are 
                available from the assets of the enterprise, pay 
                creditor claims, in such manner and amounts as are 
                authorized under this section, which are--
                            ``(i) allowed by the receiver;
                            ``(ii) approved by the Agency pursuant to a 
                        final determination pursuant to paragraph (7) 
                        or (8); or
                            ``(iii) determined by the final judgment of 
                        any court of competent jurisdiction.
                    ``(B) Agreements against the interest of the 
                agency.--No agreement that tends to diminish or defeat 
                the interest of the Agency in any asset acquired by the 
                Agency as receiver under this section shall be valid 
                against the Agency unless such agreement is in writing.
                    ``(C) Payment of dividends on claims.--The receiver 
                may, in the sole discretion of the receiver, pay from 
                the assets of the enterprise dividends on proved claims 
                at any time, and no liability shall attach to the 
                Agency, by reason of any such payment, for failure to 
                pay dividends to a claimant whose claim is not proved 
                at the time of any such payment.
                    ``(D) Rulemaking authority of the director.--The 
                Director may prescribe such rules, including 
                definitions of terms, as the Director deems appropriate 
                to establish a single uniform interest rate for, or to 
                make payments of post-insolvency interest to creditors 
                holding proven claims against the receivership estates 
                of enterprises following satisfaction by the receiver 
                of the principal amount of all creditor claims.
            ``(10) Suspension of legal actions.--
                    ``(A) In general.--After the appointment of a 
                conservator or receiver for an enterprise, the 
                conservator or receiver may, in any judicial action or 
                proceeding to which such enterprise is or becomes a 
                party, request a stay for a period not to exceed--
                            ``(i) 45 days, in the case of any 
                        conservator; and
                            ``(ii) 90 days, in the case of any 
                        receiver.
                    ``(B) Grant of stay by all courts required.--Upon 
                receipt of a request by any conservator or receiver 
                under subparagraph (A) for a stay of any judicial 
                action or proceeding in any court with jurisdiction of 
                such action or proceeding, the court shall grant such 
                stay as to all parties.
            ``(11) Additional rights and duties.--
                    ``(A) Prior final adjudication.--The Agency shall 
                abide by any final unappealable judgment of any court 
                of competent jurisdiction which was rendered before the 
                appointment of the Agency as conservator or receiver.
                    ``(B) Rights and remedies of conservator or 
                receiver.--In the event of any appealable judgment, the 
                Agency as conservator or receiver shall--
                            ``(i) have all the rights and remedies 
                        available to the enterprise (before the 
                        appointment of such conservator or receiver) 
                        and the Agency, including removal to Federal 
                        court and all appellate rights; and
                            ``(ii) not be required to post any bond in 
                        order to pursue such remedies.
                    ``(C) No attachment or execution.--No attachment or 
                execution may issue by any court upon assets in the 
                possession of the receiver.
                    ``(D) Limitation on judicial review.--Except as 
                otherwise provided in this subsection, no court shall 
                have jurisdiction over--
                            ``(i) any claim or action for payment from, 
                        or any action seeking a determination of rights 
                        with respect to, the assets of any enterprise 
                        for which the Agency has been appointed 
                        receiver; or
                            ``(ii) any claim relating to any act or 
                        omission of such enterprise or the Agency as 
                        receiver.
                    ``(E) Disposition of assets.--In exercising any 
                right, power, privilege, or authority as conservator or 
                receiver in connection with any sale or disposition of 
                assets of an enterprise for which the Agency has been 
                appointed conservator or receiver, the Agency shall 
                conduct its operations in a manner which--
                            ``(i) maximizes the net present value 
                        return from the sale or disposition of such 
                        assets;
                            ``(ii) minimizes the amount of any loss 
                        realized in the resolution of cases; and
                            ``(iii) ensures adequate competition and 
                        fair and consistent treatment of offerors.
            ``(12) Statute of limitations for actions brought by 
        conservator or receiver.--
                    ``(A) In general.--Notwithstanding any provision of 
                any contract, the applicable statute of limitations 
                with regard to any action brought by the Agency as 
                conservator or receiver shall be--
                            ``(i) in the case of any contract claim, 
                        the longer of--
                                    ``(I) the 6-year period beginning 
                                on the date the claim accrues; or
                                    ``(II) the period applicable under 
                                State law; and
                            ``(ii) in the case of any tort claim, the 
                        longer of--
                                    ``(I) the 3-year period beginning 
                                on the date the claim accrues; or
                                    ``(II) the period applicable under 
                                State law.
                    ``(B) Determination of the date on which a claim 
                accrues.--For purposes of subparagraph (A), the date on 
                which the statute of limitations begins to run on any 
                claim described in such subparagraph shall be the later 
                of--
                            ``(i) the date of the appointment of the 
                        Agency as conservator or receiver; or
                            ``(ii) the date on which the cause of 
                        action accrues.
            ``(13) Revival of expired state causes of action.--
                    ``(A) In general.--In the case of any tort claim 
                described under subparagraph (B) for which the statute 
                of limitations applicable under State law with respect 
                to such claim has expired not more than 5 years before 
                the appointment of the Agency as conservator or 
                receiver, the Agency may bring an action as conservator 
                or receiver on such claim without regard to the 
                expiration of the statute of limitation applicable 
                under State law.
                    ``(B) Claims described.--A tort claim referred to 
                under subparagraph (A) is a claim arising from fraud, 
                intentional misconduct resulting in unjust enrichment, 
                or intentional misconduct resulting in substantial loss 
                to the enterprise.
            ``(14) Accounting and recordkeeping requirements.--
                    ``(A) In general.--The Agency as conservator or 
                receiver shall, consistent with the accounting and 
                reporting practices and procedures established by the 
                Agency, maintain a full accounting of each 
                conservatorship and receivership or other disposition 
                of an enterprise in default.
                    ``(B) Annual accounting or report.--With respect to 
                each conservatorship or receivership, the Agency shall 
                make an annual accounting or report available to the 
                Board, the Comptroller General of the United States, 
                the Committee on Banking, Housing, and Urban Affairs of 
                the Senate, and the Committee on Financial Services of 
                the House of Representatives.
                    ``(C) Availability of reports.--Any report prepared 
                under subparagraph (B) shall be made available by the 
                Agency upon request to any shareholder of an enterprise 
                or any member of the public.
                    ``(D) Recordkeeping requirement.--After the end of 
                the 6-year period beginning on the date that the 
                conservatorship or receivership is terminated by the 
                Director, the Agency may destroy any records of such 
                enterprise which the Agency, in the discretion of the 
                Agency, determines to be unnecessary unless directed 
                not to do so by a court of competent jurisdiction or 
                governmental agency, or prohibited by law.
            ``(15) Fraudulent transfers.--
                    ``(A) In general.--The Agency, as conservator or 
                receiver, may avoid a transfer of any interest of an 
                enterprise-affiliated party, or any person who the 
                conservator or receiver determines is a debtor of the 
                enterprise, in property, or any obligation incurred by 
                such party or person, that was made within 5 years of 
                the date on which the Agency was appointed conservator 
                or receiver, if such party or person voluntarily or 
                involuntarily made such transfer or incurred such 
                liability with the intent to hinder, delay, or defraud 
                the enterprise, the Agency, the conservator, or 
                receiver.
                    ``(B) Right of recovery.--To the extent a transfer 
                is avoided under subparagraph (A), the conservator or 
                receiver may recover, for the benefit of the 
                enterprise, the property transferred, or, if a court so 
                orders, the value of such property (at the time of such 
                transfer) from--
                            ``(i) the initial transferee of such 
                        transfer or the enterprise-affiliated party or 
                        person for whose benefit such transfer was 
                        made; or
                            ``(ii) any immediate or mediate transferee 
                        of any such initial transferee.
                    ``(C) Rights of transferee or obligee.--The 
                conservator or receiver may not recover under 
                subparagraph (B) from--
                            ``(i) any transferee that takes for value, 
                        including satisfaction or securing of a present 
                        or antecedent debt, in good faith; or
                            ``(ii) any immediate or mediate good faith 
                        transferee of such transferee.
                    ``(D) Rights under this paragraph.--The rights 
                under this paragraph of the conservator or receiver 
                described under subparagraph (A) shall be superior to 
                any rights of a trustee or any other party (other than 
                any party which is a Federal agency) under title 11, 
                United States Code.
            ``(16) Attachment of assets and other injunctive relief.--
        Subject to paragraph (17), any court of competent jurisdiction 
        may, at the request of the conservator or receiver, issue an 
        order in accordance with Rule 65 of the Federal Rules of Civil 
        Procedure, including an order placing the assets of any person 
        designated by the Agency or such conservator under the control 
        of the court, and appointing a trustee to hold such assets.
            ``(17) Standards of proof.--Rule 65 of the Federal Rules of 
        Civil Procedure shall apply with respect to any proceeding 
        under paragraph (16) without regard to the requirement of such 
        rule that the applicant show that the injury, loss, or damage 
        is irreparable and immediate.
            ``(18) Treatment of claims arising from breach of contracts 
        executed by the receiver or conservator.--
                    ``(A) In general.--Notwithstanding any other 
                provision of this subsection, any final and 
                unappealable judgment for monetary damages entered 
                against a receiver or conservator for the breach of an 
                agreement executed or approved in writing by such 
                receiver or conservator after the date of its 
                appointment, shall be paid as an administrative expense 
                of the receiver or conservator.
                    ``(B) No limitation of power.--Nothing in this 
                paragraph shall be construed to limit the power of a 
                receiver or conservator to exercise any rights under 
                contract or law, including to terminate, breach, 
                cancel, or otherwise discontinue such agreement.
            ``(19) General exceptions.--
                    ``(A) Limitations.--The rights of a conservator or 
                receiver appointed under this section shall be subject 
                to the limitations on the powers of a receiver under 
                sections 402 through 407 of the Federal Deposit 
                Insurance Corporation Improvement Act of 1991 (12 
                U.S.C. 4402 through 4407).
                    ``(B) Mortgages held in trust.--
                            ``(i) In general.--Any mortgage, pool of 
                        mortgages, or interest in a pool of mortgages, 
                        held in trust, custodial, or agency capacity by 
                        an enterprise for the benefit of persons other 
                        than the enterprise shall not be available to 
                        satisfy the claims of creditors generally.
                            ``(ii) Holding of mortgages.--Any mortgage, 
                        pool of mortgages, or interest in a pool of 
                        mortgages, described under clause (i) shall be 
                        held by the conservator or receiver appointed 
                        under this section for the beneficial owners of 
                        such mortgage, pool of mortgages, or interest 
                        in a pool of mortgages in accordance with the 
                        terms of the agreement creating such trust, 
                        custodial, or other agency arrangement.
                            ``(iii) Liability of receiver.--The 
                        liability of a receiver appointed under this 
                        section for damages shall, in the case of any 
                        contingent or unliquidated claim relating to 
                        the mortgages held in trust, be estimated in 
                        accordance set forth in the regulations of the 
                        Director.
    ``(c) Priority of Expenses and Unsecured Claims.--
            ``(1) In general.--Unsecured claims against an enterprise, 
        or a receiver, that are proven to the satisfaction of the 
        receiver shall have priority in the following order:
                    ``(A) Administrative expenses of the receiver.
                    ``(B) Any other general or senior liability of the 
                enterprise (which is not a liability described under 
                subparagraph (C) or (D).
                    ``(C) Any obligation subordinated to general 
                creditors (which is not an obligation described under 
                subparagraph (D)).
                    ``(D) Any obligation to shareholders or members 
                arising as a result of their status as shareholder or 
                members.
            ``(2) Creditors similarly situated.--All creditors that are 
        similarly situated under paragraph (1) shall be treated in a 
        similar manner.
            ``(3) Definition.--The term `administrative expenses of the 
        receiver' shall include the actual, necessary costs and 
        expenses incurred by the receiver in preserving the assets of a 
        failed enterprise or liquidating or otherwise resolving the 
        affairs of the failed enterprise. Such expenses shall include 
        obligations that are incurred by the receiver after appointment 
        as receiver that the Director determines are necessary and 
        appropriate to facilitate the smooth and orderly liquidation or 
        other resolution of the enterprise.
    ``(d) Provisions Relating to Contracts Entered Into Before 
Appointment of Conservator or Receiver.--
            ``(1) Authority to repudiate contracts.--In addition to any 
        other rights a conservator or receiver may have, the 
        conservator or receiver for any enterprise may disaffirm or 
        repudiate any contract or lease--
                    ``(A) to which such enterprise is a party;
                    ``(B) the performance of which the conservator or 
                receiver, in its sole discretion, determines to be 
                burdensome; and
                    ``(C) the disaffirmance or repudiation of which the 
                conservator or receiver determines, in its sole 
                discretion, will promote the orderly administration of 
                the affairs of the enterprise.
            ``(2) Timing of repudiation.--The conservator or receiver 
        shall determine whether or not to exercise the rights of 
        repudiation under this subsection within a reasonable period 
        following such appointment.
            ``(3) Claims for damages for repudiation.--
                    ``(A) In general.--Except as otherwise provided 
                under subparagraph (C) and paragraphs (4), (5), and 
                (6), the liability of the conservator or receiver for 
                the disaffirmance or repudiation of any contract 
                pursuant to paragraph (1) shall be--
                            ``(i) limited to actual direct compensatory 
                        damages; and
                            ``(ii) determined as of--
                                    ``(I) the date of the appointment 
                                of the conservator or receiver; or
                                    ``(II) in the case of any contract 
                                or agreement referred to in paragraph 
                                (8), the date of the disaffirmance or 
                                repudiation of such contract or 
                                agreement.
                    ``(B) No liability for other damages.--For purposes 
                of subparagraph (A), the term `actual direct 
                compensatory damages' shall not include--
                            ``(i) punitive or exemplary damages;
                            ``(ii) damages for lost profits or 
                        opportunity; or
                            ``(iii) damages for pain and suffering.
                    ``(C) Measure of damages for repudiation of 
                financial contracts.--In the case of any qualified 
                financial contract or agreement to which paragraph (8) 
                applies, compensatory damages shall be--
                            ``(i) deemed to include normal and 
                        reasonable costs of cover or other reasonable 
                        measures of damages utilized in the industries 
                        for such contract and agreement claims; and
                            ``(ii) paid in accordance with this 
                        subsection and subsection (e), except as 
                        otherwise specifically provided in this 
                        section.
            ``(4) Leases under which the enterprise is the lessee.--
                    ``(A) In general.--If the conservator or receiver 
                disaffirms or repudiates a lease under which the 
                enterprise was the lessee, the conservator or receiver 
                shall not be liable for any damages (other than damages 
                determined under subparagraph (B)) for the 
                disaffirmance or repudiation of such lease.
                    ``(B) Payments of rent.--Notwithstanding 
                subparagraph (A), the lessor under a lease to which 
                that subparagraph applies shall--
                            ``(i) be entitled to the contractual rent 
                        accruing before the later of the date--
                                    ``(I) the notice of disaffirmance 
                                or repudiation is mailed; or
                                    ``(II) the disaffirmance or 
                                repudiation becomes effective, unless 
                                the lessor is in default or breach of 
                                the terms of the lease;
                            ``(ii) have no claim for damages under any 
                        acceleration clause or other penalty provision 
                        in the lease; and
                            ``(iii) have a claim for any unpaid rent, 
                        subject to all appropriate offsets and 
                        defenses, due as of the date of the 
                        appointment, which shall be paid in accordance 
                        with this subsection and subsection (e).
            ``(5) Leases under which the enterprise is the lessor.--
                    ``(A) In general.--If the conservator or receiver 
                repudiates an unexpired written lease of real property 
                of the enterprise under which the enterprise is the 
                lessor and the lessee is not, as of the date of such 
                repudiation, in default, the lessee under such lease 
                may either--
                            ``(i) treat the lease as terminated by such 
                        repudiation; or
                            ``(ii) remain in possession of the 
                        leasehold interest for the balance of the term 
                        of the lease, unless the lessee defaults under 
                        the terms of the lease after the date of such 
                        repudiation.
                    ``(B) Provisions applicable to lessee remaining in 
                possession.--If any lessee under a lease described 
                under subparagraph (A) remains in possession of a 
                leasehold interest under clause (ii) of such 
                subparagraph--
                            ``(i) the lessee--
                                    ``(I) shall continue to pay the 
                                contractual rent pursuant to the terms 
                                of the lease after the date of the 
                                repudiation of such lease; and
                                    ``(II) may offset against any rent 
                                payment which accrues after the date of 
                                the repudiation of the lease, and any 
                                damages which accrue after such date 
                                due to the nonperformance of any 
                                obligation of the enterprise under the 
                                lease after such date; and
                            ``(ii) the conservator or receiver shall 
                        not be liable to the lessee for any damages 
                        arising after such date as a result of the 
                        repudiation other than the amount of any offset 
                        allowed under clause (i)(II).
            ``(6) Contracts for the sale of real property.--
                    ``(A) In general.--If the conservator or receiver 
                repudiates any contract for the sale of real property 
                and the purchaser of such real property under such 
                contract is in possession, and is not, as of the date 
                of such repudiation, in default, such purchaser may 
                either--
                            ``(i) treat the contract as terminated by 
                        such repudiation; or
                            ``(ii) remain in possession of such real 
                        property.
                    ``(B) Provisions applicable to purchaser remaining 
                in possession.--If any purchaser of real property under 
                any contract described under subparagraph (A) remains 
                in possession of such property under clause (ii) of 
                such subparagraph--
                            ``(i) the purchaser--
                                    ``(I) shall continue to make all 
                                payments due under the contract after 
                                the date of the repudiation of the 
                                contract; and
                                    ``(II) may offset against any such 
                                payments any damages which accrue after 
                                such date due to the nonperformance 
                                (after such date) of any obligation of 
                                the enterprise under the contract; and
                            ``(ii) the conservator or receiver shall--
                                    ``(I) not be liable to the 
                                purchaser for any damages arising after 
                                such date as a result of the 
                                repudiation other than the amount of 
                                any offset allowed under clause 
                                (i)(II);
                                    ``(II) deliver title to the 
                                purchaser in accordance with the 
                                provisions of the contract; and
                                    ``(III) have no obligation under 
                                the contract other than the performance 
                                required under subclause (II).
                    ``(C) Assignment and sale allowed.--
                            ``(i) In general.--No provision of this 
                        paragraph shall be construed as limiting the 
                        right of the conservator or receiver to assign 
                        the contract described under subparagraph (A), 
                        and sell the property subject to the contract 
                        and the provisions of this paragraph.
                            ``(ii) No liability after assignment and 
                        sale.--If an assignment and sale described 
                        under clause (i) is consummated, the 
                        conservator or receiver shall have no further 
                        liability under the contract described under 
                        subparagraph (A), or with respect to the real 
                        property which was the subject of such 
                        contract.
            ``(7) Provisions applicable to service contracts.--
                    ``(A) Services performed before appointment.--In 
                the case of any contract for services between any 
                person and any enterprise for which the Agency has been 
                appointed conservator or receiver, any claim of such 
                person for services performed before the appointment of 
                the conservator or the receiver shall be--
                            ``(i) a claim to be paid in accordance with 
                        subsections (b) and (e); and
                            ``(ii) deemed to have arisen as of the date 
                        the conservator or receiver was appointed.
                    ``(B) Services performed after appointment and 
                prior to repudiation.--If, in the case of any contract 
                for services described under subparagraph (A), the 
                conservator or receiver accepts performance by the 
                other person before the conservator or receiver makes 
                any determination to exercise the right of repudiation 
                of such contract under this section--
                            ``(i) the other party shall be paid under 
                        the terms of the contract for the services 
                        performed; and
                            ``(ii) the amount of such payment shall be 
                        treated as an administrative expense of the 
                        conservatorship or receivership.
                    ``(C) Acceptance of performance no bar to 
                subsequent repudiation.--The acceptance by any 
                conservator or receiver of services referred to under 
                subparagraph (B) in connection with a contract 
                described in such subparagraph shall not affect the 
                right of the conservator or receiver to repudiate such 
                contract under this section at any time after such 
                performance.
            ``(8) Certain qualified financial contracts.--
                    ``(A) Rights of parties to contracts.--Subject to 
                paragraph (10) and notwithstanding any other provision 
                of this Act, any other Federal law, or the law of any 
                State, no person shall be stayed or prohibited from 
                exercising--
                            ``(i) any right to cause the termination or 
                        liquidation of any qualified financial contract 
                        with an enterprise that arises upon the 
                        appointment of the Agency as receiver for such 
                        enterprise at any time after such appointment;
                            ``(ii) any right under any security 
                        arrangement relating to any contract or 
                        agreement described in clause (i); or
                            ``(iii) any right to offset or net out any 
                        termination value, payment amount, or other 
                        transfer obligation arising under or in 
                        connection with 1 or more contracts and 
                        agreements described in clause (i), including 
                        any master agreement for such contracts or 
                        agreements.
                    ``(B) Applicability of other provisions.--
                Paragraphs (10) and (12) of subsection (b) shall apply 
                in the case of any judicial action or proceeding 
                brought against any receiver referred to under 
                subparagraph (A), or the enterprise for which such 
                receiver was appointed, by any party to a contract or 
                agreement described under subparagraph (A)(i) with such 
                enterprise.
                    ``(C) Certain transfers not avoidable.--
                            ``(i) In general.--Notwithstanding 
                        paragraph (11), the Agency, whether acting as 
                        such or as conservator or receiver of an 
                        enterprise, may not avoid any transfer of money 
                        or other property in connection with any 
                        qualified financial contract with an 
                        enterprise.
                            ``(ii) Exception for certain transfers.--
                        Clause (i) shall not apply to any transfer of 
                        money or other property in connection with any 
                        qualified financial contract with an enterprise 
                        if the Agency determines that the transferee 
                        had actual intent to hinder, delay, or defraud 
                        such enterprise, the creditors of such 
                        enterprise, or any conservator or receiver 
                        appointed for such enterprise.
                    ``(D) Certain contracts and agreements defined.--In 
                this subsection:
                            ``(i) Qualified financial contract.--The 
                        term `qualified financial contract' means any 
                        securities contract, commodity contract, 
                        forward contract, repurchase agreement, swap 
                        agreement, and any similar agreement that the 
                        Agency determines by regulation to be a 
                        qualified financial contract for purposes of 
                        this paragraph.
                            ``(ii) Securities contract.--The term 
                        `securities contract' has the meaning given to 
                        such term under section 741 of title 11, United 
                        States Code, except that the term `security' 
                        (as used in such section) shall be deemed to 
                        include any mortgage loan, any mortgage-related 
                        security (as defined in section 3(a)(41) of the 
                        Securities Exchange Act of 1934), and any 
                        interest in any mortgage loan or mortgage-
                        related security, and does not include any 
                        participation in a commercial mortgage loan.
                            ``(iii) Commodity contract.--The term 
                        `commodity contract' has the meaning given to 
                        such term in section 761 of title 11, United 
                        States Code.
                            ``(iv) Forward contract.--The term `forward 
                        contract' has the meaning given to such term in 
                        section 101 of title 11, United States Code.
                            ``(v) Repurchase agreement.--The term 
                        `repurchase agreement' has the meaning given to 
                        such term in section 101 of title 11, the 
                        United States Code, except that the items (as 
                        described in such section) which may be subject 
                        to any such agreement shall be deemed to 
                        include mortgage-related securities (as such 
                        term is defined in section 3(a)(41) of the 
                        Securities Exchange Act of 1934), any mortgage 
                        loan, and any interest in any mortgage loan and 
                        does not include any participation in a 
                        commercial mortgage loan unless the Agency 
                        determines by regulation, resolution, or order 
                        to include any such participation within the 
                        meaning of such term.
                            ``(vi) Swap agreement.--The term `swap 
                        agreement'--
                                    ``(I) means any agreement, 
                                including the terms and conditions 
                                incorporated by reference in any such 
                                agreement, which is a rate swap 
                                agreement, basis swap, commodity swap, 
                                forward rate agreement, interest rate 
                                future, interest rate option purchased, 
                                forward foreign exchange agreement, 
                                rate cap agreement, rate floor 
                                agreement, rate collar agreement, 
                                currency swap agreement, cross-currency 
                                rate swap agreement, currency future, 
                                or currency option purchased or any 
                                other similar agreement; and
                                    ``(II) includes any combination of 
                                such agreements and any option to enter 
                                into any such agreement.
                            ``(vii) Treatment of master agreement as 1 
                        qualified financial contract.--Any master 
                        agreement for any agreements described under 
                        this subparagraph, together with all 
                        supplements to such master agreement, shall be 
                        treated as 1 qualified financial contract.
                            ``(viii) Transfer.--The term `transfer' has 
                        the meaning given to such term in section 101 
                        of title 11, United States Code.
                    ``(E) Certain protections in event of appointment 
                of conservator.--Notwithstanding any other provision of 
                this Act (other than paragraph (12) of this 
                subsection), any other Federal law, or the law of any 
                State, no person shall be stayed or prohibited from 
                exercising--
                            ``(i) any right such person has to cause 
                        the termination, liquidation, or acceleration 
                        of any qualified financial contract with an 
                        enterprise in a conservatorship based upon a 
                        default under such financial contract which is 
                        enforceable under applicable noninsolvency law;
                            ``(ii) any right under any security 
                        arrangement relating to such qualified 
                        financial contracts; or
                            ``(iii) any right to offset or net out any 
                        termination values, payment amounts, or other 
                        transfer obligations arising under or in 
                        connection with such qualified financial 
                        contracts.
            ``(9) Transfer of qualified financial contracts.--In making 
        any transfer of assets or liabilities of an enterprise in 
        default which includes any qualified financial contract, the 
        conservator or receiver for such enterprise shall either--
                    ``(A) transfer to 1 person--
                            ``(i) all qualified financial contracts 
                        between--
                                    ``(I) any person (or any affiliate 
                                of such person); and
                                    ``(II) the enterprise in default;
                            ``(ii) all claims of such person (or any 
                        affiliate of such person) against such 
                        enterprise under any such contract (other than 
                        any claim which, under the terms of any such 
                        contract, is subordinated to the claims of 
                        general unsecured creditors of such 
                        enterprise);
                            ``(iii) all claims of such enterprise 
                        against such person (or any affiliate of such 
                        person) under any such contract; and
                            ``(iv) all property securing any claim 
                        described in clause (ii) or (iii) under any 
                        such contract; or
                    ``(B) transfer none of the financial contracts, 
                claims, or property referred to under subparagraph (A) 
                (with respect to such person and any affiliate of such 
                person).
            ``(10) Notification of transfer.--
                    ``(A) In general.--If--
                            ``(i) the conservator or receiver for an 
                        enterprise in default makes any transfer of the 
                        assets and liabilities of such enterprise, and
                            ``(ii) the transfer includes any qualified 
                        financial contract,
                the conservator or receiver shall use best efforts to 
                notify any person who is a party to any such contract 
                of such transfer by 12 p.m. (noon) (Eastern Standard 
                Time) on the business day following such transfer.
                    ``(B) Business day defined.--For purposes of this 
                paragraph, the term `business day' means any day other 
                than any Saturday, Sunday, or any day on which either 
                the New York Stock Exchange or the Federal Reserve Bank 
                of New York is closed.
            ``(11) Certain security interests not avoidable.--No 
        provision of this subsection shall be construed as permitting 
        the avoidance of any legally enforceable or perfected security 
        interest in any of the assets of any enterprise, except where 
        such an interest is taken in contemplation of the insolvency of 
        the enterprise, or with the intent to hinder, delay, or defraud 
        the enterprise or the creditors of such enterprise.
            ``(12) Authority to enforce contracts.--
                    ``(A) In general.--Notwithstanding any provision of 
                a contract providing for termination, default, 
                acceleration, or exercise of rights upon, or solely by 
                reason of, insolvency or the appointment of a 
                conservator or receiver, the conservator or receiver 
                may enforce any contract, other than a contract for 
                director's or officer's liability or an enterprise 
                bond, entered into by the enterprise.
                    ``(B) Certain rights not affected.--No provision of 
                this paragraph may be construed as impairing or 
                affecting any right of the conservator or receiver to 
                enforce or recover under a director's or officer's 
                liability insurance contract or enterprise bond under 
                other applicable law.
                    ``(C) Consent requirement.--
                            ``(i) In general.--Except as otherwise 
                        provided under this section, no person may 
                        exercise any right or power to terminate, 
                        accelerate, or declare a default under any 
                        contract to which an enterprise is a party, or 
                        to obtain possession of or exercise control 
                        over any property of the enterprise, or affect 
                        any contractual rights of the enterprise, 
                        without the consent of the conservator or 
                        receiver, as appropriate, for a period of--
                                    ``(I) 45 days after the date of 
                                appointment of a conservator; or
                                    ``(II) 90 days after the date of 
                                appointment of a receiver.
                            ``(ii) Exceptions.--This subparagraph 
                        shall--
                                    ``(I) not apply to a director's or 
                                officer's liability insurance contract;
                                    ``(II) not apply to the rights of 
                                parties to certain qualified financial 
                                contracts under subsection (d)(8); and
                                    ``(III) not be construed as 
                                permitting the conservator or receiver 
                                to fail to comply with otherwise 
                                enforceable provisions of such 
                                contracts.
    ``(e) Valuation of Claims in Default.--
            ``(1) In general.--Notwithstanding any other provision of 
        Federal law or the law of any State, and regardless of the 
        method which the Agency determines to utilize with respect to 
        an enterprise in default or in danger of default, including 
        transactions authorized under subsection (i), this subsection 
        shall govern the rights of the creditors of such enterprise.
            ``(2) Maximum liability.--The maximum liability of the 
        Agency, acting as receiver or in any other capacity, to any 
        person having a claim against the receiver or the enterprise 
        for which such receiver is appointed shall equal the lesser 
        of--
                    ``(A) the amount such claimant would have received 
                if the Agency had liquidated the assets and liabilities 
                of such enterprise without exercising the authority of 
                the Agency under subsection (i) of this section; or
                    ``(B) the amount of proceeds realized from the 
                performance of contracts or sale of the assets of the 
                enterprise.
    ``(f) Limitation on Court Action.--Except as provided in this 
section or at the request of the Director, no court may take any action 
to restrain or affect the exercise of powers or functions of the Agency 
as a conservator or a receiver.
    ``(g) Liability of Directors and Officers.--
            ``(1) In general.--A director or officer of an enterprise 
        may be held personally liable for monetary damages in any civil 
        action by, on behalf of, or at the request or direction of the 
        Agency, which action is prosecuted wholly or partially for the 
        benefit of the Agency--
                    ``(A) acting as conservator or receiver of such 
                enterprise, or
                    ``(B) acting based upon a suit, claim, or cause of 
                action purchased from, assigned by, or otherwise 
                conveyed by such receiver or conservator,
        for gross negligence, including any similar conduct or conduct 
        that demonstrates a greater disregard of a duty of care (than 
        gross negligence) including intentional tortious conduct, as 
        such terms are defined and determined under applicable State 
        law.
            ``(2) No limitation.--Nothing in this paragraph shall 
        impair or affect any right of the Agency under other applicable 
        law.
    ``(h) Damages.--In any proceeding related to any claim against a 
director, officer, employee, agent, attorney, accountant, appraiser, or 
any other party employed by or providing services to an enterprise, 
recoverable damages determined to result from the improvident or 
otherwise improper use or investment of any assets of the enterprise 
shall include principal losses and appropriate interest.
    ``(i) Limited-Life Enterprise.--
            ``(1) Organization.--
                    ``(A) Purpose.--If an enterprise is in default, or 
                if the Agency anticipates that an enterprise will 
                default, the Agency may organize a limited-life 
                enterprise with those powers and attributes of the 
                enterprise in default or in danger of default that the 
                Director determines necessary, subject to the 
                provisions of this subsection. The Director shall grant 
                a temporary charter to the limited-life enterprise, and 
                the limited-life enterprise shall operate subject to 
                that charter.
                    ``(B) Authorities.--Upon the creation of a limited-
                life enterprise under subparagraph (A), the limited-
                life enterprise may--
                            ``(i) assume such liabilities of the 
                        enterprise that is in default or in danger of 
                        default as the Agency may, in its discretion, 
                        determine to be appropriate, provided that the 
                        liabilities assumed shall not exceed the amount 
                        of assets of the limited-life enterprise;
                            ``(ii) purchase such assets of the 
                        enterprise that is in default, or in danger of 
                        default, as the Agency may, in its discretion, 
                        determine to be appropriate; and
                            ``(iii) perform any other temporary 
                        function which the Agency may, in its 
                        discretion, prescribe in accordance with this 
                        section.
            ``(2) Charter.--
                    ``(A) Conditions.--The Agency may grant a temporary 
                charter if the Agency determines that the continued 
                operation of the enterprise in default or in danger of 
                default is in the best interest of the national economy 
                and the housing markets.
                    ``(B) Limited-life enterprise treated as being in 
                default for certain purposes.--A limited-life 
                enterprise shall be treated as an enterprise in default 
                at such times and for such purposes as the Agency may, 
                in its discretion, determine.
                    ``(C) Management.--A limited-life enterprise, upon 
                the granting of its charter, shall be under the 
                management of a board of directors consisting of not 
                fewer than 5 nor more than 10 members appointed by the 
                Agency.
                    ``(D) Bylaws.--The board of directors of a limited-
                life enterprise shall adopt such bylaws as may be 
                approved by the Agency.
            ``(3) Capital stock.--No capital stock need be paid into a 
        limited-life enterprise by the Agency.
            ``(4) Investments.--Funds of a limited-life enterprise 
        shall be kept on hand in cash, invested in obligations of the 
        United States or obligations guaranteed as to principal and 
        interest by the United States, or deposited with the Agency, or 
        any Federal Reserve bank.
            ``(5) Exempt status.--Notwithstanding any other provision 
        of Federal or State law, the limited-life enterprise, its 
        franchise, property, and income shall be exempt from all 
        taxation now or hereafter imposed by the United States, by any 
        territory, dependency, or possession thereof, or by any State, 
        county, municipality, or local taxing authority.
            ``(6) Other exemptions.--When acting as a receiver, the 
        following provisions shall apply with respect to the Agency:
                    ``(A) The Agency, including its franchise, its 
                capital, reserves, and surplus, and its income, shall 
                be exempt from all taxation imposed by any State, 
                country, municipality, or local taxing authority, 
                except that any real property of the Agency shall be 
                subject to State, territorial, county, municipal, or 
                local taxation to the same extent according to its 
                value as other real property is taxed, except that, 
                notwithstanding the failure of any person to challenge 
                an assessment under State law of the value of such 
                property, and the tax thereon, shall be determined as 
                of the period for which such tax is imposed.
                    ``(B) No property of the Agency shall be subject to 
                levy, attachment, garnishment, foreclosure, or sale 
                without the consent of the Agency, nor shall any 
                involuntary lien attach to the property of the Agency.
                    ``(C) The Agency shall not be liable for any 
                amounts in the nature of penalties or fines, including 
                those arising from the failure of any person to pay any 
                real property, personal property, probate, or recording 
                tax or any recording or filing fees when due.
            ``(7) Winding up.--
                    ``(A) In general.--Subject to subparagraph (B), 
                unless Congress authorizes the sale of the capital 
                stock of the limited-life enterprise, not later than 2 
                years after the date of its organization, the Agency 
                shall wind up the affairs of the limited-life 
                enterprise.
                    ``(B) Extension.--The Director may, in the 
                discretion of the Director, extend the status of the 
                limited-life enterprise for 3 additional 1-year 
                periods.
            ``(8) Transfer of assets and liabilities.--
                    ``(A) In general.--
                            ``(i) Transfer of assets and liabilities.--
                        The Agency, as receiver, may transfer any 
                        assets and liabilities of an enterprise in 
                        default, or in danger of default, to the 
                        limited-life enterprise in accordance with 
                        paragraph (1).
                            ``(ii) Subsequent transfers.--At any time 
                        after a charter is transferred to a limited-
                        life enterprise, the Agency, as receiver, may 
                        transfer any assets and liabilities of such 
                        enterprise in default, or in danger in default, 
                        as the Agency may, in its discretion, determine 
                        to be appropriate in accordance with paragraph 
                        (1).
                            ``(iii) Effective without approval.--The 
                        transfer of any assets or liabilities of an 
                        enterprise in default, or in danger of default, 
                        transferred to a limited-life enterprise shall 
                        be effective without any further approval under 
                        Federal or State law, assignment, or consent 
                        with respect thereto.
            ``(9) Proceeds.--To the extent that available proceeds from 
        the limited-life enterprise exceed amounts required to pay 
        obligations, such proceeds may be paid to the enterprise in 
        default, or in danger of default.
            ``(10) Powers of limited-life enterprises.--
                    ``(A) In general.--Each limited-life enterprise 
                created under this subsection shall have all corporate 
                powers of, and be subject to the same provisions of law 
                as, the enterprise in default or in danger of default 
                to which it relates, except that--
                            ``(i) the Agency may--
                                    ``(I) remove the directors of a 
                                limited-life enterprise; and
                                    ``(II) fix the compensation of 
                                members of the board of directors and 
                                senior management, as determined by the 
                                Agency in its discretion, of a limited-
                                life enterprise;
                            ``(ii) the Agency may indemnify the 
                        representatives for purposes of paragraph 
                        (1)(B), and the directors, officers, employees, 
                        and agents of a limited-life enterprise on such 
                        terms as the Agency determines to be 
                        appropriate; and
                            ``(iii) the board of directors of a 
                        limited-life enterprise--
                                    ``(I) shall elect a chairperson who 
                                may also serve in the position of chief 
                                executive officer, except that such 
                                person shall not serve either as 
                                chairperson or as chief executive 
                                officer without the prior approval of 
                                the Agency; and
                                    ``(II) may appoint a chief 
                                executive officer who is not also the 
                                chairperson, except that such person 
                                shall not serve as chief executive 
                                officer without the prior approval of 
                                the Agency.
                    ``(B) Stay of judicial action.--Any judicial action 
                to which a limited-life enterprise becomes a party by 
                virtue of its acquisition of any assets or assumption 
                of any liabilities of an enterprise in default shall be 
                stayed from further proceedings for a period of up to 
                45 days at the request of the limited-life enterprise. 
                Such period may be modified upon the consent of all 
                parties.
            ``(11) No federal status.--
                    ``(A) Agency status.--A limited-life enterprise is 
                not an agency, establishment, or instrumentality of the 
                United States.
                    ``(B) Employee status.--Representatives for 
                purposes of paragraph (1)(B), interim directors, 
                directors, officers, employees, or agents of a limited-
                life enterprise are not, solely by virtue of service in 
                any such capacity, officers or employees of the United 
                States. Any employee of the Agency or of any Federal 
                instrumentality who serves at the request of the Agency 
                as a representative for purposes of paragraph (1)(B), 
                interim director, director, officer, employee, or agent 
                of a limited-life enterprise shall not--
                            ``(i) solely by virtue of service in any 
                        such capacity lose any existing status as an 
                        officer or employee of the United States for 
                        purposes of title 5, United States Code, or any 
                        other provision of law; or
                            ``(ii) receive any salary or benefits for 
                        service in any such capacity with respect to a 
                        limited-life enterprise in addition to such 
                        salary or benefits as are obtained through 
                        employment with the Agency or such Federal 
                        instrumentality.
    ``(j) Prohibition of Charter Revocation.--In no case may a receiver 
appointed pursuant to this section revoke, annul, or terminate the 
charter of an enterprise.
    ``(k) Obtaining Credit by a Limited-Life Enterprise.--
            ``(1) In general.--The limited-life enterprise may obtain 
        unsecured credit and incur unsecured debt in the ordinary 
        course of business.
            ``(2) Inability to obtain credit.--If the limited-life 
        enterprise is unable to obtain unsecured credit the Director 
        may authorize the obtaining of credit or the incurring of 
        debt--
                    ``(A) with priority over any or all administrative 
                expenses;
                    ``(B) secured by a lien on property that is not 
                otherwise subject to a lien; or
                    ``(C) secured by a junior lien on property that is 
                subject to a lien.
            ``(3) Limitations.--
                    ``(A) In general.--The Director, after notice and a 
                hearing, may authorize the obtaining of credit or the 
                incurring of debt secured by a senior or equal lien on 
                property that is subject to a lien (other than 
                mortgages that collateralize the mortgage-backed 
                securities issued or guaranteed by the enterprise) only 
                if--
                            ``(i) the limited-life enterprise is unable 
                        to obtain such credit otherwise; and
                            ``(ii) there is adequate protection of the 
                        interest of the holder of the lien on the 
                        property which such senior or equal lien is 
                        proposed to be granted.
                    ``(B) Burden of proof.--In any hearing under this 
                subsection, the Director has the burden of proof on the 
                issue of adequate protection.
            ``(4) Affect on debts and liens.--The reversal or 
        modification on appeal of an authorization under this 
        subsection to obtain credit or incur debt, or of a grant under 
        this section of a priority or a lien, does not affect the 
        validity of any debt so incurred, or any priority or lien so 
        granted, to an entity that extended such credit in good faith, 
        whether or not such entity knew of the pendency of the appeal, 
        unless such authorization and the incurring of such debt, or 
        the granting of such priority or lien, were stayed pending 
        appeal.''.
    (b) Federal Home Loan Banks.--Section 26 of the Federal Home Loan 
Bank Act (12 U.S.C. 1446) is amended--
            (1) by inserting ``(a)'' before ``Whenever'';
            (2) in the first sentence, by inserting ``or pursuant to a 
        determination and notice under section 1368(d) of the Federal 
        Housing Enterprises Financial Safety and Soundness Act of 1992 
        that a Federal home loan bank is critically undercapitalized,'' 
        after ``such action,''; and
            (3) by adding at the end the following new subsection:
    ``(b) The Director shall, by regulation, provide for the authority, 
procedures, and conditions in liquidating and reorganizing critically 
undercapitalized Federal home loan banks pursuant to subsection (a), 
taking due consideration of the authorities, procedures, and conditions 
established under section 1367 of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992, with respect to the 
enterprises, with such modifications as the Director determines to be 
appropriate to reflect the difference in operations between the banks 
and the enterprises.''.
    (c) Conforming Amendments.--Subtitle B of title XIII of the Housing 
and Community Development Act of 1992 is amended by striking sections 
1369 (12 U.S.C. 4619), 1369A (12 U.S.C. 4620), and 1369B (12 U.S.C. 
4621)

SEC. 145. CONFORMING AMENDMENTS.

    Subtitle B of title XIII of the Housing and Community Development 
Act of 1992 (42 U.S.C. 4611 et seq.), as amended by the preceding 
provisions of this Act, is further amended--
            (1) in sections 1365 (12 U.S.C. 4615) through 1369D (12 
        U.S.C. 4623), but not including section 1367 (12 U.S.C. 4617) 
        as added by section 144 of this Act--
                    (A) by striking ``An enterprise'' each place such 
                term appears and inserting ``A regulated entity'';
                    (B) by striking ``an enterprise'' each place such 
                term appears and inserting ``a regulated entity''; and
                    (C) by striking ``the enterprise'' each place such 
                term appears and inserting ``the regulated entity'';
            (2) in section 1366(d) (12 U.S.C. 4616(d)), by striking 
        ``the enterprises'' and inserting ``the regulated entities'';
            (3) in section 1368(d) (12 U.S.C. 4618(d)), by striking 
        ``Committee on Banking, Finance and Urban Affairs'' and 
        inserting ``Committee on Financial Services''; and
            (4) in section 1369C(c) (12 U.S.C. 4622(c)), by striking 
        ``any enterprise'' and inserting ``any regulated entity''.

                    Subtitle D--Enforcement Actions

SEC. 161. CEASE-AND-DESIST PROCEEDINGS.

     Section 1371 of the Housing and Community Development Act of 1992 
(12 U.S.C. 4631) is amended--
            (1) by striking subsections (a) and (b) and inserting the 
        following new subsections:
    ``(a) Issuance for Unsafe or Unsound Practices and Violations of 
Rules or Laws.--If, in the opinion of the Director, a regulated entity 
or any regulated entity-affiliated party is engaging or has engaged, or 
the Director has reasonable cause to believe that the regulated entity 
or any regulated entity-affiliated party is about to engage, in an 
unsafe or unsound practice in conducting the business of the regulated 
entity or is violating or has violated, or the Director has reasonable 
cause to believe that the regulated entity or any regulated entity-
affiliated party is about to violate, a law, rule, or regulation, or 
any condition imposed in writing by the Director in connection with the 
granting of any application or other request by the regulated entity or 
any written agreement entered into with the Director, the Director may 
issue and serve upon the regulated entity or such party a notice of 
charges in respect thereof. The Director may not enforce compliance 
with any housing goal established under subpart B of part 2 of subtitle 
A of this title, with section 1336 or 1337 of this title, with 
subsection (m) or (n) of section 309 of the Federal National Mortgage 
Association Charter Act (12 U.S.C. 1723a(m), (n)), with subsection (e) 
or (f) of section 307 of the Federal Home Loan Mortgage Corporation Act 
(12 U.S.C. 1456(e), (f)), or with paragraph (5) or (12) of section 
10(j) of the Federal Home Loan Bank Act (12 U.S.C. 1430(j)).
    ``(b) Issuance for Unsatisfactory Rating.--If a regulated entity 
receives, in its most recent report of examination, a less-than-
satisfactory rating for asset quality, management, earnings, or 
liquidity, the Director may (if the deficiency is not corrected) deem 
the regulated entity to be engaging in an unsafe or unsound practice 
for purposes of this subsection.'';
            (2) in subsection (c)(2), by striking ``or director'' and 
        inserting ``director, or regulated entity-affiliated party''; 
        and
            (3) in subsection (d)--
                    (A) in paragraph (1), by inserting ``(including 
                reimbursement of compensation under section 1318)'' 
                after ``reimbursement'';
                    (B) in paragraph (6), by striking ``and'' at the 
                end;
                    (C) by redesignating paragraph (7) as paragraph 
                (8); and
                    (D) by inserting after paragraph (6) the following 
                new paragraph:
            ``(7) to effect an attachment on a regulated entity or 
        regulated entity-affiliated party subject to an order under 
        this section or section 1372; and''.

SEC. 162. TEMPORARY CEASE-AND-DESIST PROCEEDINGS.

    Section 1372 of the Housing and Community Development Act of 1992 
(12 U.S.C. 4632) is amended--
            (1) by striking subsection (a) and inserting the following 
        new subsection:
    ``(a) Grounds for Issuance.--Whenever the Director determines that 
the violation or threatened violation or the unsafe or unsound practice 
or practices specified in the notice of charges served upon the 
regulated entity or any regulated entity-affiliated party pursuant to 
section 1371(a), or the continuation thereof, is likely to cause 
insolvency or significant dissipation of assets or earnings of the 
regulated entity, or is likely to weaken the condition of the regulated 
entity prior to the completion of the proceedings conducted pursuant to 
sections 1371 and 1373, the Director may issue a temporary order 
requiring the regulated entity or such party to cease and desist from 
any such violation or practice and to take affirmative action to 
prevent or remedy such insolvency, dissipation, condition, or prejudice 
pending completion of such proceedings. Such order may include any 
requirement authorized under subsection 1371(d).'';
            (2) in subsection (b), by striking ``or director'' and 
        inserting ``director, or regulated entity-affiliated party'';
            (3) in subsection (d), striking ``or director'' and 
        inserting ``director, or regulated entity-affiliated party''; 
        and
            (4) by striking subsection (e) and in inserting the 
        following new subsection:
    ``(e) Enforcement.--In the case of violation or threatened 
violation of, or failure to obey, a temporary cease-and-desist order 
issued pursuant to this section, the Director may apply to the United 
States District Court for the District of Columbia or the United States 
district court within the jurisdiction of which the headquarters of the 
regulated entity is located, for an injunction to enforce such order, 
and, if the court determines that there has been such violation or 
threatened violation or failure to obey, it shall be the duty of the 
court to issue such injunction. Such an injunction may include an 
injunction to effect an attachment on a regulated entity or regulated-
entity affiliated party.''.

SEC. 163. ENFORCEMENT AND JURISDICTION.

    Section 1375 of the Housing and Community Development Act of 1992 
(12 U.S.C. 4635) is amended--
            (1) by striking subsection (a) and inserting the following 
        new subsection:
    ``(a) Enforcement.--The Director may, in the discretion of the 
Director, apply to the United States District Court for the District of 
Columbia, or the United States district court within the jurisdiction 
of which the headquarters of the regulated entity is located, for the 
enforcement of any effective and outstanding notice or order issued 
under this subtitle or subtitle B, or request that the Attorney General 
of the United States bring such an action. Such court shall have 
jurisdiction and power to order and require compliance with such notice 
or order.''; and
            (2) in subsection (b), by striking ``or 1376'' and 
        inserting ``1376, or 1377''.

SEC. 164. CIVIL MONEY PENALTIES.

    Section 1376 of the Housing and Community Development Act of 1992 
(12 U.S.C. 4636) is amended--
            (1) in subsection (a)--
                    (A) in the matter preceding paragraph (1), by 
                striking ``or any executive officer or'' and inserting 
                ``any executive officer of a regulated entity, any 
                regulated entity-affiliated party, or any''; and
                    (B) in paragraph (1)--
                            (i) by inserting ``Federal Home Loan Bank 
                        Act,'' after ``Corporation Act,'';
                            (ii) by striking ``or subsection'' and 
                        inserting ``, subsection''; and
                            (iii) by inserting ``, or paragraph (5) or 
                        (12) of section 10(j) of the Federal Home Loan 
                        Bank Act'' before the semicolon at the end;
            (2) by striking subsection (b) and inserting the following 
        new subsection:
    ``(b) Amount of Penalty.--
            ``(1) First tier.--Any regulated entity which, or any 
        regulated entity-affiliated party who--
                    ``(A) violates any provision of this title, the 
                Federal National Mortgage Association Charter Act (12 
                U.S.C. 1716 et seq.), the Federal Home Loan Mortgage 
                Corporation Act (12 U.S.C. 1451 et seq.), the Federal 
                Home Loan Bank Act (12 U.S.C. 1421 et seq., or any 
                order, condition, rule, or regulation under any such 
                title or Act, except that the Director may not enforce 
                compliance with any housing goal established under 
                subpart B of part 2 of subtitle A of this title, with 
                section 1336 or 1337 of this title, with subsection (m) 
                or (n) of section 309 of the Federal National Mortgage 
                Association Charter Act (12 U.S.C. 1723a(m), (n)), with 
                subsection (e) or (f) of section 307 of the Federal 
                Home Loan Mortgage Corporation Act (12 U.S.C. 1456(e), 
                (f)), or with paragraph (5) or (12) of section 10(j) of 
                the Federal Home Loan Bank Act;
                    ``(B) violates any final or temporary order or 
                notice issued pursuant to this title;
                    ``(C) violates any condition imposed in writing by 
                the Director in connection with the grant of any 
                application or other request by such regulated entity;
                    ``(D) violates any written agreement between the 
                regulated entity and the Director; or
                    ``(E) engages in any conduct the Director 
                determines to be an unsafe or unsound practice,
        shall forfeit and pay a civil penalty of not more than $10,000 
        for each day during which such violation continues.
            ``(2) Second tier.--Notwithstanding paragraph (1)--
                    ``(A) if a regulated entity, or a regulated entity-
                affiliated party--
                            ``(i) commits any violation described in 
                        any subparagraph of paragraph (1);
                            ``(ii) recklessly engages in an unsafe or 
                        unsound practice in conducting the affairs of 
                        such regulated entity; or
                            ``(iii) breaches any fiduciary duty; and
                    ``(B) the violation, practice, or breach--
                            ``(i) is part of a pattern of misconduct;
                            ``(ii) causes or is likely to cause more 
                        than a minimal loss to such regulated entity; 
                        or
                            ``(iii) results in pecuniary gain or other 
                        benefit to such party,
        the regulated entity or regulated entity-affiliated party shall 
        forfeit and pay a civil penalty of not more than $50,000 for 
        each day during which such violation, practice, or breach 
        continues.
            ``(3) Third tier.--Notwithstanding paragraphs (1) and (2), 
        any regulated entity which, or any regulated entity-affiliated 
        party who--
                    ``(A) knowingly--
                            ``(i) commits any violation or engages in 
                        any conduct described in any subparagraph of 
                        paragraph (1);
                            ``(ii) engages in any unsafe or unsound 
                        practice in conducting the affairs of such 
                        regulated entity; or
                            ``(iii) breaches any fiduciary duty; and
                    ``(B) knowingly or recklessly causes a substantial 
                loss to such regulated entity or a substantial 
                pecuniary gain or other benefit to such party by reason 
                of such violation, practice, or breach,
        shall forfeit and pay a civil penalty in an amount not to 
        exceed the applicable maximum amount determined under paragraph 
        (4) for each day during which such violation, practice, or 
        breach continues.
            ``(4) Maximum amounts of penalties for any violation 
        described in paragraph (3).--The maximum daily amount of any 
        civil penalty which may be assessed pursuant to paragraph (3) 
        for any violation, practice, or breach described in such 
        paragraph is--
                    ``(A) in the case of any person other than a 
                regulated entity, an amount not to exceed $2,000,000; 
                and
                    ``(B) in the case of any regulated entity, 
                $2,000,000.'';
            (3) in subsection (c)(1)(B), by inserting ``regulated 
        entity-affiliated party,'' after ``executive officer,''; and
            (4) in subsection (d)--
                    (A) by striking ``or director'' each place such 
                term appears and inserting ``director, or regulated 
                entity-affiliated party'';
                    (B) by striking ``request the Attorney General of 
                the United States to'';
                    (C) by inserting ``, or the United States district 
                court within the jurisdiction of which the headquarters 
                of the regulated entity is located,'' after ``District 
                of Columbia''; and
                    (D) by striking ``, or may, under the direction and 
                control of the Attorney General, bring such an 
                action''.

SEC. 165. REMOVAL AND PROHIBITION AUTHORITY.

    (a) In General.--Subtitle C of title XIII of the Housing and 
Community Development Act of 1992 is amended--
            (1) by redesignating sections 1377, 1378, 1379, 1379A, and 
        1379B (12 U.S.C. 4637-41) as sections 1379, 1379A, 1379B, 
        1379C, and 1379D, respectively; and
            (2) by inserting after section 1376 (12 U.S.C. 4636) the 
        following new section:

``SEC. 1377. REMOVAL AND PROHIBITION AUTHORITY.

    ``(a) Authority to Issue Order.--Whenever the Director determines 
that--
            ``(1) any regulated entity-affiliated party has, directly 
        or indirectly--
                    ``(A) violated--
                            ``(i) any law or regulation;
                            ``(ii) any cease-and-desist order which has 
                        become final;
                            ``(iii) any condition imposed in writing by 
                        the Director in connection with the grant of 
                        any application or other request by such 
                        regulated entity; or
                            ``(iv) any written agreement between such 
                        regulated entity and the Director;
                    ``(B) engaged or participated in any unsafe or 
                unsound practice in connection with any regulated 
                entity; or
                    ``(C) committed or engaged in any act, omission, or 
                practice which constitutes a breach of such party's 
                fiduciary duty;
            ``(2) by reason of the violation, practice, or breach 
        described in any subparagraph of paragraph (1)--
                    ``(A) such regulated entity has suffered or will 
                probably suffer financial loss or other damage; or
                    ``(B) such party has received financial gain or 
                other benefit by reason of such violation, practice, or 
                breach; and
            ``(3) such violation, practice, or breach--
                    ``(A) involves personal dishonesty on the part of 
                such party; or
                    ``(B) demonstrates willful or continuing disregard 
                by such party for the safety or soundness of such 
                regulated entity,
the Director may serve upon such party a written notice of the 
Director's intention to remove such party from office or to prohibit 
any further participation by such party, in any manner, in the conduct 
of the affairs of any regulated entity.
    ``(b) Suspension Order.--
            ``(1) Suspension or prohibition authority.--If the Director 
        serves written notice under subsection (a) to any regulated 
        entity-affiliated party of the Director's intention to issue an 
        order under such subsection, the Director may--
                    ``(A) suspend such party from office or prohibit 
                such party from further participation in any manner in 
                the conduct of the affairs of the regulated entity, if 
                the Director--
                            ``(i) determines that such action is 
                        necessary for the protection of the regulated 
                        entity; and
                            ``(ii) serves such party with written 
                        notice of the suspension order; and
                    ``(B) prohibit the regulated entity from releasing 
                to or on behalf of the regulated entity-affiliated 
                party any compensation or other payment of money or 
                other thing of current or potential value in connection 
                with any resignation, removal, retirement, or other 
                termination of employment or office of the party.
            ``(2) Effective period.--Any suspension order issued under 
        this subsection--
                    ``(A) shall become effective upon service; and
                    ``(B) unless a court issues a stay of such order 
                under subsection (g) of this section, shall remain in 
                effect and enforceable until--
                            ``(i) the date the Director dismisses the 
                        charges contained in the notice served under 
                        subsection (a) with respect to such party; or
                            ``(ii) the effective date of an order 
                        issued by the Director to such party under 
                        subsection (a).
            ``(3) Copy of order.--If the Director issues a suspension 
        order under this subsection to any regulated entity-affiliated 
        party, the Director shall serve a copy of such order on any 
        regulated entity with which such party is affiliated at the 
        time such order is issued.
    ``(c) Notice, Hearing, and Order.--A notice of intention to remove 
a regulated entity-affiliated party from office or to prohibit such 
party from participating in the conduct of the affairs of a regulated 
entity shall contain a statement of the facts constituting grounds for 
such action, and shall fix a time and place at which a hearing will be 
held on such action. Such hearing shall be fixed for a date not earlier 
than 30 days nor later than 60 days after the date of service of such 
notice, unless an earlier or a later date is set by the Director at the 
request of (1) such party, and for good cause shown, or (2) the 
Attorney General of the United States. Unless such party shall appear 
at the hearing in person or by a duly authorized representative, such 
party shall be deemed to have consented to the issuance of an order of 
such removal or prohibition. In the event of such consent, or if upon 
the record made at any such hearing the Director shall find that any of 
the grounds specified in such notice have been established, the 
Director may issue such orders of suspension or removal from office, or 
prohibition from participation in the conduct of the affairs of the 
regulated entity, as it may deem appropriate, together with an order 
prohibiting compensation described in subsection (b)(1)(B). Any such 
order shall become effective at the expiration of 30 days after service 
upon such regulated entity and such party (except in the case of an 
order issued upon consent, which shall become effective at the time 
specified therein). Such order shall remain effective and enforceable 
except to such extent as it is stayed, modified, terminated, or set 
aside by action of the Director or a reviewing court.
    ``(d) Prohibition of Certain Specific Activities.--Any person 
subject to an order issued under this section shall not--
            ``(1) participate in any manner in the conduct of the 
        affairs of any regulated entity;
            ``(2) solicit, procure, transfer, attempt to transfer, 
        vote, or attempt to vote any proxy, consent, or authorization 
        with respect to any voting rights in any regulated entity;
            ``(3) violate any voting agreement previously approved by 
        the Director; or
            ``(4) vote for a director, or serve or act as a regulated 
        entity-affiliated party.
    ``(e) Industry-Wide Prohibition.--
            ``(1) In general.--Except as provided in paragraph (2), any 
        person who, pursuant to an order issued under this section, has 
        been removed or suspended from office in a regulated entity or 
        prohibited from participating in the conduct of the affairs of 
        a regulated entity may not, while such order is in effect, 
        continue or commence to hold any office in, or participate in 
        any manner in the conduct of the affairs of, any regulated 
        entity.
            ``(2) Exception if director provides written consent.--If, 
        on or after the date an order is issued under this section 
        which removes or suspends from office any regulated entity-
        affiliated party or prohibits such party from participating in 
        the conduct of the affairs of a regulated entity, such party 
        receives the written consent of the Director, the order shall, 
        to the extent of such consent, cease to apply to such party 
        with respect to the regulated entity described in the written 
        consent. If the Director grants such a written consent, it 
        shall publicly disclose such consent.
            ``(3) Violation of paragraph (1) treated as violation of 
        order.--Any violation of paragraph (1) by any person who is 
        subject to an order described in such subsection shall be 
        treated as a violation of the order.
    ``(f) Applicability.--This section shall only apply to a person who 
is an individual, unless the Director specifically finds that it should 
apply to a corporation, firm, or other business enterprise.
    ``(g) Stay of Suspension and Prohibition of Regulated Entity-
Affiliated Party.--Within 10 days after any regulated entity-affiliated 
party has been suspended from office and/or prohibited from 
participation in the conduct of the affairs of a regulated entity under 
this section, such party may apply to the United States District Court 
for the District of Columbia, or the United States district court for 
the judicial district in which the headquarters of the regulated entity 
is located, for a stay of such suspension and/or prohibition and any 
prohibition under subsection (b)(1)(B) pending the completion of the 
administrative proceedings pursuant to the notice served upon such 
party under this section, and such court shall have jurisdiction to 
stay such suspension and/or prohibition.
    ``(h) Suspension or Removal of Regulated Entity-Affiliated Party 
Charged With Felony.--
            ``(1) Suspension or prohibition.--
                    ``(A) In general.--Whenever any regulated entity-
                affiliated party is charged in any information, 
                indictment, or complaint, with the commission of or 
                participation in a crime involving dishonesty or breach 
                of trust which is punishable by imprisonment for a term 
                exceeding one year under State or Federal law, the 
                Director may, if continued service or participation by 
                such party may pose a threat to the regulated entity or 
                impair public confidence in the regulated entity, by 
                written notice served upon such party--
                            ``(i) suspend such party from office or 
                        prohibit such party from further participation 
                        in any manner in the conduct of the affairs of 
                        any regulated entity; and
                            ``(ii) prohibit the regulated entity from 
                        releasing to or on behalf of the regulated 
                        entity-affiliated party any compensation or 
                        other payment of money or other thing of 
                        current or potential value in connection with 
                        the period of any such suspension or with any 
                        resignation, removal, retirement, or other 
                        termination of employment or office of the 
                        party.
                    ``(B) Provisions applicable to notice.--
                            ``(i) Copy.--A copy of any notice under 
                        paragraph (1)(A) shall also be served upon the 
                        regulated entity.
                            ``(ii) Effective period.--A suspension or 
                        prohibition under subparagraph (A) shall remain 
                        in effect until the information, indictment, or 
                        complaint referred to in such subparagraph is 
                        finally disposed of or until terminated by the 
                        Director.
            ``(2) Removal or prohibition.--
                    ``(A) In general.--If a judgment of conviction or 
                an agreement to enter a pretrial diversion or other 
                similar program is entered against a regulated entity-
                affiliated party in connection with a crime described 
                in paragraph (1)(A), at such time as such judgment is 
                not subject to further appellate review, the Director 
                may, if continued service or participation by such 
                party may pose a threat to the regulated entity or 
                impair public confidence in the regulated entity, issue 
                and serve upon such party an order that--
                            ``(i) removes such party from office or 
                        prohibits such party from further participation 
                        in any manner in the conduct of the affairs of 
                        the regulated entity without the prior written 
                        consent of the Director; and
                            ``(ii) prohibits the regulated entity from 
                        releasing to or on behalf of the regulated 
                        entity-affiliated party any compensation or 
                        other payment of money or other thing of 
                        current or potential value in connection with 
                        the termination of employment or office of the 
                        party.
                    ``(B) Provisions applicable to order.--
                            ``(i) Copy.--A copy of any order under 
                        paragraph (2)(A) shall also be served upon the 
                        regulated entity, whereupon the regulated 
                        entity-affiliated party who is subject to the 
                        order (if a director or an officer) shall cease 
                        to be a director or officer of such regulated 
                        entity.
                            ``(ii) Effect of acquittal.--A finding of 
                        not guilty or other disposition of the charge 
                        shall not preclude the Director from 
                        instituting proceedings after such finding or 
                        disposition to remove such party from office or 
                        to prohibit further participation in regulated 
                        entity affairs, and to prohibit compensation or 
                        other payment of money or other thing of 
                        current or potential value in connection with 
                        any resignation, removal, retirement, or other 
                        termination of employment or office of the 
                        party, pursuant to subsections (a), (d), or (e) 
                        of this section.
                            ``(iii) Effective period.--Any notice of 
                        suspension or order of removal issued under 
                        this subsection shall remain effective and 
                        outstanding until the completion of any hearing 
                        or appeal authorized under paragraph (4) unless 
                        terminated by the Director.
            ``(3) Authority of remaining board members.--If at any 
        time, because of the suspension of one or more directors 
        pursuant to this section, there shall be on the board of 
        directors of a regulated entity less than a quorum of directors 
        not so suspended, all powers and functions vested in or 
        exercisable by such board shall vest in and be exercisable by 
        the director or directors on the board not so suspended, until 
        such time as there shall be a quorum of the board of directors. 
        In the event all of the directors of a regulated entity are 
        suspended pursuant to this section, the Director shall appoint 
        persons to serve temporarily as directors in their place and 
        stead pending the termination of such suspensions, or until 
        such time as those who have been suspended cease to be 
        directors of the regulated entity and their respective 
        successors take office.
            ``(4) Hearing regarding continued participation.--Within 30 
        days from service of any notice of suspension or order of 
        removal issued pursuant to paragraph (1) or (2) of this 
        subsection, the regulated entity-affiliated party concerned may 
        request in writing an opportunity to appear before the Director 
        to show that the continued service to or participation in the 
        conduct of the affairs of the regulated entity by such party 
        does not, or is not likely to, pose a threat to the interests 
        of the regulated entity or threaten to impair public confidence 
        in the regulated entity. Upon receipt of any such request, the 
        Director shall fix a time (not more than 30 days after receipt 
        of such request, unless extended at the request of such party) 
        and place at which such party may appear, personally or through 
        counsel, before one or more members of the Director or 
        designated employees of the Director to submit written 
        materials (or, at the discretion of the Director, oral 
        testimony) and oral argument. Within 60 days of such hearing, 
        the Director shall notify such party whether the suspension or 
        prohibition from participation in any manner in the conduct of 
        the affairs of the regulated entity will be continued, 
        terminated, or otherwise modified, or whether the order 
        removing such party from office or prohibiting such party from 
        further participation in any manner in the conduct of the 
        affairs of the regulated entity, and prohibiting compensation 
        in connection with termination will be rescinded or otherwise 
        modified. Such notification shall contain a statement of the 
        basis for the Director's decision, if adverse to such party. 
        The Director is authorized to prescribe such rules as may be 
        necessary to effectuate the purposes of this subsection.
    ``(i) Hearings and Judicial Review.--
            ``(1) Venue and procedure.--Any hearing provided for in 
        this section shall be held in the District of Columbia or in 
        the Federal judicial district in which the headquarters of the 
        regulated entity is located, unless the party afforded the 
        hearing consents to another place, and shall be conducted in 
        accordance with the provisions of chapter 5 of title 5, United 
        States Code. After such hearing, and within 90 days after the 
        Director has notified the parties that the case has been 
        submitted to it for final decision, it shall render its 
        decision (which shall include findings of fact upon which its 
        decision is predicated) and shall issue and serve upon each 
        party to the proceeding an order or orders consistent with the 
        provisions of this section. Judicial review of any such order 
        shall be exclusively as provided in this subsection. Unless a 
        petition for review is timely filed in a court of appeals of 
        the United States, as provided in paragraph (2), and thereafter 
        until the record in the proceeding has been filed as so 
        provided, the Director may at any time, upon such notice and in 
        such manner as it shall deem proper, modify, terminate, or set 
        aside any such order. Upon such filing of the record, the 
        Director may modify, terminate, or set aside any such order 
        with permission of the court.
            ``(2) Review of order.--Any party to any proceeding under 
        paragraph (1) may obtain a review of any order served pursuant 
        to paragraph (1) (other than an order issued with the consent 
        of the regulated entity or the regulated entity-affiliated 
        party concerned, or an order issued under subsection (h) of 
        this section) by the filing in the United States Court of 
        Appeals for the District of Columbia Circuit or court of 
        appeals of the United States for the circuit in which the 
        headquarters of the regulated entity is located, within 30 days 
        after the date of service of such order, a written petition 
        praying that the order of the Director be modified, terminated, 
        or set aside. A copy of such petition shall be forthwith 
        transmitted by the clerk of the court to the Director, and 
        thereupon the Director shall file in the court the record in 
        the proceeding, as provided in section 2112 of title 28, United 
        States Code. Upon the filing of such petition, such court shall 
        have jurisdiction, which upon the filing of the record shall 
        (except as provided in the last sentence of paragraph (1)) be 
        exclusive, to affirm, modify, terminate, or set aside, in whole 
        or in part, the order of the Director. Review of such 
        proceedings shall be had as provided in chapter 7 of title 5, 
        United States Code. The judgment and decree of the court shall 
        be final, except that the same shall be subject to review by 
        the Supreme Court upon certiorari, as provided in section 1254 
        of title 28, United States Code.
            ``(3) Proceedings not treated as stay.--The commencement of 
        proceedings for judicial review under paragraph (2) shall not, 
        unless specifically ordered by the court, operate as a stay of 
        any order issued by the Director.''.
    (b) Conforming Amendments.--
            (1) 1992 act.--Section 1317(f) of the Housing and Community 
        Development Act of 1992 (12 U.S.C. 4517(f)) is amended by 
        striking ``section 1379B'' and inserting ``section 1379D''.
            (2) Fannie mae charter act.--The second sentence of 
        subsection (b) of section 308 of the Federal National Mortgage 
        Association Charter Act (12 U.S.C. 1723(b)) is amended by 
        striking ``The'' and inserting ``Except to the extent that 
        action under section 1377 of the Housing and Community 
        Development Act of 1992 temporarily results in a lesser number, 
        the''.
            (3) Freddie mac act.--The second sentence of subparagraph 
        (A) of section 303(a)(2) of the Federal Home Loan Mortgage 
        Corporation Act (12 U.S.C. 1452(a)(2)(A)) is amended by 
        striking ``The'' and inserting ``Except to the extent that 
        action under section 1377 of the Housing and Community 
        Development Act of 1992 temporarily results in a lesser number, 
        the''.

SEC. 166. CRIMINAL PENALTY.

    Subtitle C of title XIII of the Housing and Community Development 
Act of 1992 (12 U.S.C. 4631 et seq.) is amended by inserting after 
section 1377 (as added by the preceding provisions of this Act) the 
following new section:

``SEC. 1378. CRIMINAL PENALTY.

    ``Whoever, being subject to an order in effect under section 1377, 
without the prior written approval of the Director, knowingly 
participates, directly or indirectly, in any manner (including by 
engaging in an activity specifically prohibited in such an order) in 
the conduct of the affairs of any regulated entity shall, 
notwithstanding section 3571 of title 18, be fined not more than 
$1,000,000, imprisoned for not more than 5 years, or both.''.

SEC. 167. CONFORMING AMENDMENTS.

    Subtitle C of title XIII of the Housing and Community Development 
Act of 1992 is amended--
            (1) in section 1372(c)(1) (12 U.S.C. 4632(c)), by striking 
        ``that enterprise'' and inserting ``that regulated entity'';
            (2) in section 1379 (12 U.S.C. 4637), as so redesignated by 
        section 165(a)(1) of this Act--
                    (A) by inserting ``, or of a regulated entity-
                affiliated party,'' before ``shall not affect''; and
                    (B) by striking ``such director or executive 
                officer'' each place such term appears and inserting 
                ``such director, executive officer, or regulated 
                entity-affiliated party'';
            (3) in section 1379A (12 U.S.C. 4638), as so redesignated 
        by section 165(a)(1) of this Act, by inserting ``or against a 
        regulated entity-affiliated party,'' before ``or impair'';
            (4) by striking ``An enterprise'' each place such term 
        appears in such subtitle and inserting ``A regulated entity'';
            (5) by striking ``an enterprise'' each place such term 
        appears in such subtitle and inserting ``a regulated entity'';
            (6) by striking ``the enterprise'' each place such term 
        appears in such subtitle and inserting ``the regulated 
        entity''; and
            (7) by striking ``any enterprise'' each place such term 
        appears in such subtitle and inserting ``any regulated 
        entity''.

                     Subtitle E--General Provisions

SEC. 181. PRESIDENTIALLY APPOINTED DIRECTORS OF ENTERPRISES.

    (a) Fannie Mae.--
            (1) In general.--Subsection (b) of section 308 of the 
        Federal National Mortgage Association Charter Act (12 U.S.C. 
        1723(b)) is amended--
                    (A) in the first sentence, by striking ``five of 
                whom shall be appointed annually by the President of 
                the United States, and the remainder of whom'' and 
                inserting ``who'';
                    (B) in the second sentence, by striking ``appointed 
                by the President'';
                    (C) in the third sentence--
                            (i) by striking ``appointed or''; and
                            (ii) by striking ``, except that any such 
                        appointed member may be removed from office by 
                        the President for good cause'';
                    (D) in the fourth sentence, by striking 
                ``elective''; and
                    (E) by striking the fifth sentence.
            (2) Transitional provision.--The amendments made by 
        paragraph (1) shall not apply to any appointed position of the 
        board of directors of the Federal National Mortgage Association 
        until the expiration of the annual term for such position 
        during which the effective date under section 184 occurs.
    (b) Freddie Mac.--
            (1) In general.--Paragraph (2) of section 303(a) of the 
        Federal Home Loan Mortgage Corporation Act (12 U.S.C. 
        1452(a)(2)) is amended--
                    (A) in subparagraph (A)--
                            (i) in the first sentence, by striking ``5 
                        of whom shall be appointed annually by the 
                        President of the United States and the 
                        remainder of whom'' and inserting ``who''; and
                            (ii) in the second sentence, by striking 
                        ``appointed by the President of the United 
                        States'';
                    (B) in subparagraph (B)--
                            (i) by striking ``such or''; and
                            (ii) by striking ``, except that any 
                        appointed member may be removed from office by 
                        the President for good cause''; and
                    (C) in subparagraph (C)--
                            (i) by striking the first sentence; and
                            (ii) by striking ``elective''.
            (2) Transitional provision.--The amendments made by 
        paragraph (1) shall not apply to any appointed position of the 
        Board of Directors of the Federal Home Loan Mortgage 
        Corporation until the expiration of the annual term for such 
        position during which the effective date under section 184 
        occurs.

SEC. 182. REPORT ON PORTFOLIO OPERATIONS, SAFETY AND SOUNDNESS, AND 
              MISSION OF ENTERPRISES.

    Not later than the expiration of the 12-month period beginning on 
the effective date under section 184, the Director of the Federal 
Housing Finance Agency shall submit a report to the Congress which 
shall include--
            (1) a description of the portfolio holdings of the 
        enterprises (as such term is defined in section 1303 of the 
        Housing and Community Development Act of 1992 (12 U.S.C. 4502) 
        in mortgages (including whole loans and mortgage-backed 
        securities), non-mortgages, and other assets;
            (2) a description of the risk implications for the 
        enterprises of such holdings and the consequent risk management 
        undertaken by the enterprises (including the use of derivatives 
        for hedging purposes), compared with off-balance sheet 
        obligations of the enterprises (including mortgage-backed 
        securities guaranteed by the enterprises);
            (3) an analysis of portfolio holdings for safety and 
        soundness purposes;
            (4) an assessment of whether portfolio holdings fulfill the 
        mission purposes of the enterprises under the Federal National 
        Mortgage Association Charter Act and the Federal Home Loan 
        Mortgage Corporation Act; and
            (5) an analysis of the potential systemic risk implications 
        for the enterprises, the housing and capital markets, and the 
        financial system of portfolio holdings, and whether such 
        holdings should be limited or reduced over time.

SEC. 183. CONFORMING AND TECHNICAL AMENDMENTS.

    (a) Amendment to 1992 Act.--Title XIII of the Housing and Community 
Development Act of 1992 is amended by striking section 1383 (12 U.S.C. 
1451 note).
    (b) Amendment to Title 18, United States Code.--Section 1905 of 
title 18, United States Code, is amended by striking ``Office of 
Federal Housing Enterprise Oversight'' and inserting ``Federal Housing 
Finance Agency'' .
    (c) Amendments to Flood Disaster Protection Act of 1973.--Section 
102(f)(3)(A) of the Flood Disaster Protection Act of 1973 (42 U.S.C. 
4012a(f)(3)(A)) is amended by striking ``Director of the Office of 
Federal Housing Enterprise Oversight of the Department of Housing and 
Urban Development'' and inserting ``Director of the Federal Housing 
Finance Agency''.
    (d) Amendment to Department of Housing and Urban Development Act.--
Section 5 of the Department of Housing and Urban Development Act (42 
U.S.C. 3534) is amended by striking subsection (d).
    (e) Amendment to Title 5, United States Code.--Section 5313 of 
title 5, United States Code, is amended by striking the item relating 
to the Director of the Office of Federal Housing Enterprise Oversight, 
Department of Housing and Urban Development and inserting the following 
new item:
 ``Director of the Federal Housing Finance Agency.''.

SEC. 184. EFFECTIVE DATE.

    Except as specifically provided otherwise in this title, the 
amendments made by this title shall take effect on, and shall apply 
beginning on, the expiration of the 1-year period beginning on the date 
of the enactment of this Act.

                   TITLE II--FEDERAL HOME LOAN BANKS

SEC. 201. DEFINITIONS.

    Section 2 of the Federal Home Loan Bank Act (12 U.S.C. 1422) is 
amended--
            (1) by striking paragraphs (1) and (10);
            (2) by redesignating paragraphs (2) through (9) as 
        paragraphs (1) through (8), respectively;
            (3) by redesignating paragraphs (11) through (13) as 
        paragraphs (9) through (11), respectively; and
            (4) by adding at the end the following:
            ``(12) Director.--The term `Director' means the Director of 
        the Federal Housing Finance Agency.
            ``(13) Agency.--The term `Agency' means the Federal Housing 
        Finance Agency.''.

SEC. 202. DIRECTORS.

    (a) Election.--Section 7 of the Federal Home Loan Bank Act (12 
U.S.C. 1427) is amended--
            (1) by striking subsection (a) and inserting the following:
    ``(a) Number; Election; Qualifications; Conflicts of Interest.--
            ``(1) In general.--Subject to paragraph (2), and except to 
        the extent that action under section 1377 of the Federal 
        Housing Enterprises Financial Safety and Soundness Act of 1992 
        results in a lesser number, the management of each Federal Home 
        Loan Bank shall be vested in a board of 13 directors, or such 
        other number as the Director determines appropriate, each of 
        whom--
                    ``(A) shall be elected by the members; and
                    ``(B) shall be either a bona fide resident of the 
                district in which such bank is located or an officer or 
                director of a member of such bank located in that 
                district.
            ``(2) Public interest.--At least 2 directors elected under 
        paragraph (1) shall be representatives chosen from 
        organizations with more than a 2-year history of representing 
        consumer or community interests on banking services, credit 
        needs, housing, or financial consumer protections.'';
            (2) in subsection (d)--
                    (A) in the first sentence, by striking ``, whether 
                elected or appointed,'';
                    (B) in the second sentence, by striking ``or 
                appointed''; and
                    (C) in the third sentence, by striking ``an 
                elective'' each place such term appears and inserting 
                ``a'';
            (3) by striking ``elective'' each place such term appears 
        (except in subsection (e)); and
            (4) in subsection (f), by striking ``appointed or'' each 
        place that term appears.
    (b) Terms.--
            (1) In general.--Section 7(d) of the Federal Home Loan Bank 
        Act (12 U.S.C. 1427(i)) is amended--
                    (A) in the first sentence, by striking ``3 years'' 
                and inserting ``4 years''; and
                    (B) in the second sentence--
                            (i) by striking ``Federal Home Loan Bank 
                        System Modernization Act of 1999'' and 
                        inserting ``Federal Housing Finance Reform Act 
                        of 2005''; and
                            (ii) by striking ``1/3'' and inserting ``1/
                        4''.
            (2) Savings provision.--The amendments made by paragraph 
        (1) shall not apply to the term of office of any director of a 
        Federal home loan bank who is serving as of the effective date 
        of this Act under section 184, including any director elected 
        to fill a vacancy in any such office.
    (c) Compensation.--Subsection (i) of section 7 of the Federal Home 
Loan Bank Act (12 U.S.C. 1427(i)) is amended to read as follows:
    ``(i) Directors' Compensation.--
            ``(1) In general.--Each Federal home loan bank may pay the 
        directors on the board of directors for the bank reasonable 
        compensation for the time required of such directors, and 
        reasonable expenses incurred by such directors, in connection 
        with service on the board of directors, in accordance with 
        resolutions adopted by the board of directors and subject to 
        the approval of the board.
            ``(2) Annual report by the board.--The Director shall 
        include, in the annual report submitted to the Congress 
        pursuant to section 1319B of the Federal Housing Enterprises 
        Financial Safety and Soundness Act of 1992, information 
        regarding the compensation and expenses paid by the Federal 
        home loan banks to the directors on the boards of directors of 
        the banks.''.

SEC. 203. FEDERAL HOUSING FINANCE AGENCY OVERSIGHT OF FEDERAL HOME LOAN 
              BANKS.

    The Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.), other than 
in provisions of that Act added or amended otherwise by this Act, is 
amended--
            (1) by striking sections 2A and 2B (12 U.S.C. 1422a, 
        1422b);
            (2) in section 6 (12 U.S.C. 1426(b)(1))--
                    (A) in subsection (b)(1), in the matter preceding 
                subparagraph (A), by striking ``Finance Board 
                approval'' and inserting ``approval by the Director''; 
                and
                    (B) in each of subsections (c)(4)(B) and (d)(2), by 
                striking ``Finance Board regulations'' each place that 
                term appears and inserting ``regulations of the 
                Director'';
            (3) in section 8 (12 U.S.C. 1428), in the section heading, 
        by striking ``by the board'';
            (4) in section 10(b) (12 U.S.C. 1430), by striking ``by 
        formal resolution'';
            (5) in section 18 (12 U.S.C. 1438), by striking subsection 
        (b);
            (6) in section 21 (12 U.S.C. 1441)--
                    (A) in subsection (b)--
                            (i) in paragraph (5), by striking 
                        ``Chairperson of the Federal Housing Finance 
                        Board'' and inserting ``Director''; and
                            (ii) in the heading for paragraph (8), by 
                        striking ``federal housing finance board'' and 
                        inserting ``director''; and
                    (B) in subsection (i), in the heading for paragraph 
                (2), by striking ``federal housing finance board'' and 
                inserting ``director'';
            (7) in section 23 (12 U.S.C. 1443), by striking ``Board of 
        Directors of the Federal Housing Finance Board'' and inserting 
        ``Director'';
            (8) by striking ``the Board'' each place such term appears 
        in such Act (except in subsections (a), (b), and (c) of section 
        11 (12 U.S.C. 1431), section 15 (12 U.S.C. 1435), section 
        21(f)(2) (12 U.S.C. 1441(f)(2)), subsections (a), (k)(2)(B)(i), 
        and (n)(6)(C)(ii) of section 21A (12 U.S.C. 1441a), subsections 
        (e)(7), (f)(2)(C), and (k)(7)(B)(ii) of section 21B (12 U.S.C. 
        1441b), the first two places such term appears in section 22 
        (12 U.S.C. 1442), and section 25 (12 U.S.C. 1445)) and 
        inserting ``the Director'';
            (9) by striking ``The Board'' each place such term appears 
        in such Act (except in sections 7(e) (12 U.S.C. 1427(e)), and 
        11(b) (12 U.S.C. 1431(b)) and inserting ``The Director'';
            (10) by striking ``the Board's'' each place such term 
        appears in such Act and inserting ``the Director's'';
            (11) by striking ``The Board's'' each place such term 
        appears in such Act and inserting ``The Director's'';
            (12) by striking ``The Finance Board'' each place such term 
        appears in such Act and inserting ``The Director'';
            (13) by striking ``the Finance Board'' each place such term 
        appears in such Act and inserting ``the Director'';
            (14) by striking ``Federal Housing Finance Board'' each 
        place such term appears and inserting ``Director'';
            (15) by striking ``Federal Home Loan Bank Board'' each 
        place such term appears in such Act (except in section 
        21A(n)(9)(B) (12 U.S.C.1441a(n)(9)(B)) and inserting 
        ``Director'';
            (16) in section 11(i) (12 U.S.C. 1431(i), by striking ``the 
        Chairperson of''; and
            (17) in section 21(e)(9) (12 U.S.C. 1441(e)(9)), by 
        striking ``Chairperson of the''.

SEC. 204. DEBT ISSUING FACILITY.

    The Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.) is amended 
by inserting after section 11 the following:

``SEC. 11A. FEDERAL HOME LOAN BANK FINANCE CORPORATION.

    ``(a) Establishment.--
            ``(1) In general.--There is hereby established the Federal 
        Home Loan Bank Finance Corporation, which shall be a jointly 
        owned subsidiary of the Federal Home Loan Banks (in this 
        section referred to as the `Corporation').
            ``(2) Purposes.--The purpose of the Corporation shall be--
                    ``(A) to issue and service the consolidated 
                obligations of the Federal Home Loan Banks in 
                accordance with this Act; and
                    ``(B) to perform all other necessary and proper 
                functions in relation to the issuance and service of 
                such obligations, as fiscal agent on behalf of the 
                Federal Home Loan Banks, and any other functions 
                performed by the Office of Finance on behalf of the 
                Financing Corporation (established under section 21) 
                and the Resolution Funding Corporation (established 
                under section 21B).
            ``(3) Transfer of functions.--
                    ``(A) In general.--The functions of the Office of 
                Finance of the Federal Home Loan Banks, shall be 
                transferred to the Corporation immediately upon the 
                conclusion of the organizational meeting of the board 
                of directors (referred to in this subsection as the 
                `effective time') established under subsection (c).
                    ``(B) Organizational meeting.--The organizational 
                meeting of the board of directors of the Corporation 
                shall occur as soon as practicable after the date of 
                enactment of the Federal Housing Finance Reform Act of 
                2005.
                    ``(C) Interim procedures.--Until the transfer under 
                subparagraph (A), the Office of Finance established as 
                a joint office of the Federal Home Loan Banks (referred 
                to in this subsection as the `predecessor office') 
                shall continue to operate as if this section had not 
                been enacted.
                    ``(D) References.--After the transfer under 
                subparagraph (A), any reference under any Federal law 
                to the Office of Finance and the Managing Director of 
                the Office of Finance shall be deemed to be references 
                to the Corporation and the chief executive officer of 
                the Corporation, respectively.
            ``(4) Succession.--
                    ``(A) Assets and liabilities.--At the transfer 
                under paragraph (3)(A), the Corporation shall, by 
                operation of law and without any further action by the 
                Federal Housing Finance Board, the predecessor office, 
                or any court, succeed to the assets of, and assume all 
                debts, obligations, contracts, and other liabilities of 
                the predecessor office, matured or unmatured, accrued 
                or absolute, contingent or otherwise, and whether or 
                not reflected or reserved against on balance sheets, 
                books of account, or records of the predecessor office.
                    ``(B) Contracts.--At the time of the transfer under 
                paragraph (3)(A), the existing contractual obligations 
                of the Federal Housing Finance Board, solely in its 
                capacity as issuer of consolidated obligations of the 
                Federal Home Loan Banks and the predecessor office 
                shall, by operation of law and without any further 
                action by the Federal Housing Finance Board, the 
                predecessor office, or any court, become obligations, 
                entitlements, and instruments of the Corporation.
                    ``(C) Taxation.--The succession to assets, 
                assumption of liabilities, conversion of obligations 
                and instruments, and effectuation of any other 
                transaction by the Corporation to carry out this 
                subsection shall not be treated as a taxable event 
                under the laws of any State, or any political 
                subdivision thereof.
    ``(b) Powers.--Subject to the provisions of this Act, and such 
regulations as the Director may prescribe, the Corporation shall have 
the power to--
            ``(1) issue voting capital stock to the Federal Home Loan 
        Banks;
            ``(2) issue and service Federal Home Loan Bank consolidated 
        notes, consolidated bonds, consolidated debentures and other 
        consolidated obligations under section 11 of this Act on behalf 
        of the Federal Home Loan Banks;
            ``(3) determine the amount, maturities, rate of interest, 
        terms, and other conditions of Federal Home Loan Bank 
        consolidated obligations;
            ``(4) adopt, alter, and use a corporate seal;
            ``(5) make contracts;
            ``(6) sue and be sued in the corporate capacity of the 
        Corporation, and to complain and defend in any action brought 
        by or against the Corporation in any court of competent 
        jurisdiction;
            ``(7) determine the terms and conditions under which the 
        Corporation may indemnify its directors, officers, employees, 
        and agents;
            ``(8) determine and implement the methodology for 
        assessments of the Federal Home Loan Banks to fund all of the 
        expenses of the Corporation; and
            ``(9) exercise such incidental powers not inconsistent with 
        the provisions of this Act as are necessary or advisable to 
        carry out the purposes of the Corporation.
    ``(c) Board of Directors.--
            ``(1) Establishment.--The management of the Corporation 
        shall be vested in a board of directors composed of the 
        president of each of the Federal Home Loan Banks, ex officio.
            ``(2) Duties.--The board of directors shall administer the 
        affairs of the Corporation in accordance with the provisions of 
        this Act.
            ``(3) Interim appointments.--If the president of any 
        Federal Home Loan Bank is vacant, the person serving in such 
        capacity on an acting basis shall serve on the board of 
        directors of the Corporation until replaced by the next person 
        to fill the office of president of the Federal Home Loan Bank.
            ``(4) Powers.--The board of directors shall exercise such 
        powers as may be necessary or advisable to carry out the 
        purposes of this section, including the power to--
                    ``(A) set policies for the management and operation 
                of the Corporation;
                    ``(B) approve a strategic business plan for the 
                Corporation;
                    ``(C) review, adopt and monitor annual operation 
                and capital budgets of the Corporation;
                    ``(D) constitute and perform the duties of an audit 
                committee, which to the extent possible shall operate 
                consistent with--
                            ``(i) the requirements established for the 
                        Federal Home Loan Banks; and
                            ``(ii) the requirements pertaining to audit 
                        committee reports set forth in the rules of 
                        Securities and Exchange Commission;
                    ``(E) select, employ, determine the compensation 
                for, and assign the duties and functions of the 
                president of the Corporation, who shall--
                            ``(i) be the chief executive officer for 
                        the Corporation and shall direct the 
                        implementation of the policies adopted by the 
                        board of directors of the Corporation;
                            ``(ii) serve as a member of the Directorate 
                        of the Financing Corporation, under section 
                        21(b)(1)(A); and
                            ``(iii) serve as a member of the 
                        Directorate of the Resolution Funding 
                        Corporation, under section 21B(c)(1)(A);
                    ``(F) provide for the review and approval of all 
                contracts of the Corporation;
                    ``(G) have the exclusive authority to employ and 
                contract for the services of an independent, external 
                auditor for the annual and quarterly combined financial 
                statements of the Federal Home Loan Banks; and
                    ``(H) select, evaluate, determine the compensation 
                of, and, as appropriate, replace the internal auditor 
                of the Corporation, who may be removed only by vote of 
                the board of directors of the Corporation.
            ``(5) Pay.--The members of the board of directors of the 
        Corporation shall not receive compensation for their services 
        as members of the board of directors.
            ``(6) Quorum requirement.--
                    ``(A) In general.--No business of the Corporation 
                may be conducted by the board of directors unless a 
                quorum of the members of the board of directors is 
                present in person or by telephone, or through action 
                taken by written consent executed by all of the 
                directors.
                    ``(B) Number.--Directors representing a majority of 
                the members of the board of directors shall constitute 
                a quorum.
                    ``(C) Vote required.--Action taken by the board of 
                directors shall be approved by a majority of the 
                directors in attendance at any meeting at which a 
                quorum is present, unless the board of directors adopts 
                procedures requiring a greater voting requirement.
            ``(7) Appointment of officers and adoption of rules of 
        procedure.--The board of directors of the Corporation shall--
                    ``(A) select, from among the members of such board, 
                a Chairperson and a Vice Chairperson; and
                    ``(B) adopt by-laws and other rules of procedure 
                for actions before the board of directors, including 
                the establishment of 1 or more committees to take 
                action on behalf of the board of directors, and the 
                delegation of powers of the board of directors to any 
                committee or officer of the Corporation.
    ``(d) Stock.--
            ``(1) Issuance of equal amount to each bank.--The 
        Corporation shall issue to each Federal home loan bank one 
        share of voting capital stock, with a par value of $100 per 
        share.
            ``(2) Restricted transferability.--Stock issued under 
        paragraph (1) may be owned and held only by the Federal Home 
        Loan Banks.
            ``(3) Payment upon issuance.--Upon issuance of any share of 
        stock under this subsection to any Federal Home Loan Bank, the 
        bank shall pay to the Corporation the total amount due for such 
        stock.
            ``(4) Distribution requirement.--
                    ``(A) In general.--The total amount of outstanding 
                stock of the Corporation shall, at all times, be 
                distributed equally among all the Federal Home Loan 
                Banks.
                    ``(B) Procedures.--The board of directors of the 
                Corporation shall adopt procedures to implement 
                subparagraph (A).
    ``(e) Status.--Except to the extent expressly provided in this Act, 
or in rules and regulations promulgated by the Director, or unless the 
context clearly indicates otherwise, the Corporation shall be accorded 
the same status as a Federal Home Loan Bank for purposes of any law, 
including sections 2B and 13 of this Act.''.

SEC. 205. SECURITIES AND EXCHANGE COMMISSION DISCLOSURE.

    (a) In General.--The Federal Home Loan Banks shall be exempt from 
compliance with--
            (1) sections 13(e), 14(a), 14(c), and 17A of the Securities 
        Exchange Act of 1934 and related Commission regulations; and
            (2) section 15 of that Act and related Securities and 
        Exchange Commission regulations with respect to transactions in 
        capital stock of the Banks.
    (b) Member Exemption.--The members of the Federal Home Loan Banks 
shall be exempt from compliance with sections 13(d), 13(f), 13(g), 
14(d), and 16 of the Securities Exchange Act of 1934 and related 
Securities and Exchange Commission regulations with respect to their 
ownership of, or transactions in, capital stock of the Federal Home 
Loan Banks.
    (c) Exempted and Government Securities.--
            (1) Capital stock.--The capital stock issued by each of the 
        Federal Home Loan Banks under section 6 of the Federal Home 
        Loan Bank Act are--
                    (A) exempted securities within the meaning of 
                section 3(a)(2) of the Securities Act of 1933; and
                    (B) ``exempted securities'' within the meaning of 
                section 3(a)(12)(A) of the Securities Exchange Act of 
                1934.
            (2) Other obligations.--The debentures, bonds, and other 
        obligations issued under section 11 of the Federal Home Loan 
        Bank Act are--
                    (A) exempted securities within the meaning of 
                section 3(a)(2) of the Securities Act of 1933;
                    (B) ``government securities'' within the meaning of 
                section 3(a)(42) of the Securities Exchange Act of 
                1934;
                    (C) excluded from the definition of ``government 
                securities broker'' within section 3(a)(43) of the 
                Securities Exchange Act of 1934;
                    (D) excluded from the definition of ``government 
                securities dealer'' within section 3(a)(44) of the 
                Securities Exchange Act of 1934; and
                    (E) ``government securities'' within the meaning of 
                section 2(a)(16) of the Investment Company Act of 1940.
    (d) Exemption From Reporting Requirements.--The Federal Home Loan 
Banks shall be exempt from periodic reporting requirements pertaining 
to--
            (1) the disclosure of related party transactions that occur 
        in the ordinary course of business of the Banks with their 
        members; and
            (2) the disclosure of unregistered sales of equity 
        securities.
    (e) Tender Offers.--The Securities and Exchange Commission's rules 
relating to tender offers shall not apply in connection with 
transactions in capital stock of the Federal Home Loan Banks.
    (f) Regulations.--In issuing final regulations to implement 
provisions of this section, the Securities and Exchange Commission 
shall consider the distinctive characteristics of the Federal Home Loan 
Banks when evaluating the accounting treatment with respect to the 
payment to REFCORP, the role of the combined financial statements of 
the twelve Banks, the accounting classification of redeemable capital 
stock, and the accounting treatment related to the joint and several 
nature of the obligations of the Banks.

SEC. 206. COMMUNITY FINANCIAL INSTITUTION MEMBERS.

    (a) Total Asset Requirement.--Paragraph (12) of section 2 of the 
Federal Home Loan Bank Act (12 U.S.C. 1422(12)), as so redesignated by 
section 202(2)of this Act, is amended by striking ``$500,000,000'' each 
place such term appears and inserting ``$1,000,000,000''.
    (b) Use of Advances for Community Development Activities.--Section 
10(a) of the Federal Home Loan Bank Act (12 U.S.C. 1430(a)) is 
amended--
            (1) in paragraph (2)(B)--
                    (A) by striking ``and''; and
                    (B) by inserting ``, and community development 
                activities'' before the period at the end; and
            (2) in paragraph (6)--
                    (A) by striking ``and''; and
                    (B) by inserting ``and `community development 
                activities''' before ``shall''.

TITLE III--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY OF OFFICE OF 
 FEDERAL HOUSING ENTERPRISE OVERSIGHT AND FEDERAL HOUSING FINANCE BOARD

       Subtitle A--Office of Federal Housing Enterprise Oversight

SEC. 301. ABOLISHMENT OF OFHEO.

    (a) In General.--Effective at the end of the 1-year period 
beginning on the date of the enactment of this Act, the Office of 
Federal Housing Enterprise Oversight of the Department of Housing and 
Urban Development and the positions of the Director and Deputy Director 
of such Office are abolished.
    (b) Disposition of Affairs.--During the 1-year period beginning on 
the date of the enactment of this Act, the Director of the Office of 
Federal Housing Enterprise Oversight shall, solely for the purpose of 
winding up the affairs of the Office of Federal Housing Enterprise 
Oversight--
            (1) manage the employees of such Office and provide for the 
        payment of the compensation and benefits of any such employee 
        which accrue before the effective date of the transfer of such 
        employee pursuant to section 303; and
            (2) may take any other action necessary for the purpose of 
        winding up the affairs of the Office.
    (c) Status of Employees Before Transfer.--The amendments made by 
title I and the abolishment of the Office of Federal Housing Enterprise 
Oversight under subsection (a) of this section may not be construed to 
affect the status of any employee of such Office as employees of an 
agency of the United States for purposes of any other provision of law 
before the effective date of the transfer of any such employee pursuant 
to section 303.
    (d) Use of Property and Services.--
            (1) Property.--The Director of the Federal Housing Finance 
        Agency may use the property of the Office of Federal Housing 
        Enterprise Oversight to perform functions which have been 
        transferred to the Director of the Federal Housing Finance 
        Agency for such time as is reasonable to facilitate the orderly 
        transfer of functions transferred pursuant to any other 
        provision of this Act or any amendment made by this Act to any 
        other provision of law.
            (2) Agency services.--Any agency, department, or other 
        instrumentality of the United States, and any successor to any 
        such agency, department, or instrumentality, which was 
        providing supporting services to the Office of Federal Housing 
        Enterprise Oversight before the expiration of the period under 
        subsection (a) in connection with functions that are 
        transferred to the Director of the Federal Housing Finance 
        Agency shall--
                    (A) continue to provide such services, on a 
                reimbursable basis, until the transfer of such 
                functions is complete; and
                    (B) consult with any such agency to coordinate and 
                facilitate a prompt and reasonable transition.
    (e) Savings Provisions.--
            (1) Existing rights, duties, and obligations not 
        affected.--Subsection (a) shall not affect the validity of any 
        right, duty, or obligation of the United States, the Director 
        of the Office of Federal Housing Enterprise Oversight, or any 
        other person, which--
                    (A) arises under or pursuant to the title XIII of 
                the Housing and Community Development Act of 1992, the 
                Federal National Mortgage Association Charter Act, the 
                Federal Home Loan Mortgage Corporation Act, or any 
                other provision of law applicable with respect to such 
                Office; and
                    (B) existed on the day before the abolishment under 
                subsection (a) of this section.
            (2) Continuation of suits.--No action or other proceeding 
        commenced by or against the Director of the Office of Federal 
        Housing Enterprise Oversight in connection with functions that 
        are transferred to the Director of the Federal Housing Finance 
        Agency shall abate by reason of the enactment of this Act, 
        except that the Director of the Federal Housing Finance Agency 
        shall be substituted for the Director of the Office of Federal 
        Housing Enterprise Oversight as a party to any such action or 
        proceeding.

SEC. 302. CONTINUATION AND COORDINATION OF CERTAIN REGULATIONS.

    All regulations, orders, determinations, and resolutions that--
            (1) were issued, made, prescribed, or allowed to become 
        effective by--
                    (A) the Office of Federal Housing Enterprise 
                Oversight;
                    (B) the Secretary of Housing and Urban Development 
                and that relate to the Secretary's authority under--
                            (i) title XIII of the Housing and Community 
                        Development Act of 1992;
                            (ii) under the Federal National Mortgage 
                        Association Charter Act, with respect to the 
                        Federal National Mortgage Association; or
                            (iii) the Federal Home Loan Mortgage 
                        Corporation Act; or
                    (C) a court of competent jurisdiction and that 
                relate to functions transferred by this Act; and
            (2) are in effect on the date of the abolishment under 
        section 301(a) of this Act,
shall remain in effect according to the terms of such regulations, 
orders, determinations, and resolutions, and shall be enforceable by or 
against the Director of the Federal Housing Finance Agency until 
modified, terminated, set aside, or superseded in accordance with 
applicable law by such Director, as the case may be, any court of 
competent jurisdiction, or operation of law.

SEC. 303. TRANSFER AND RIGHTS OF EMPLOYEES OF OFHEO.

    (a) Transfer.--Each employee of the Office of Federal Housing 
Enterprise Oversight shall be transferred to the Federal Housing 
Finance Agency for employment no later than the date of the abolishment 
under section 301(a) of this Act and such transfer shall be deemed a 
transfer of function for purposes of section 3503 of title 5, United 
States Code.
    (b) Guaranteed Positions.--Each employee transferred under 
subsection (a) shall be guaranteed a position with the same status, 
tenure, grade, and pay as that held on the day immediately preceding 
the transfer. Each such employee holding a permanent position shall not 
be involuntarily separated or reduced in grade or compensation for 12 
months after the date of transfer, except for cause or, if the employee 
is a temporary employee, separated in accordance with the terms of the 
appointment.
    (c) Appointment Authority for Excepted Service Employees.--
            (1) In general.--In the case of employees occupying 
        positions in the excepted service, any appointment authority 
        established pursuant to law or regulations of the Office of 
        Personnel Management for filling such positions shall be 
        transferred, subject to paragraph (2).
            (2) Decline of transfer.--The Director of the Federal 
        Housing Finance Agency may decline a transfer of authority 
        under paragraph (1) (and the employees appointed pursuant 
        thereto) to the extent that such authority relates to positions 
        excepted from the competitive service because of their 
        confidential, policy-making, policy-determining, or policy-
        advocating character.
    (d) Reorganization.--If the Director of the Federal Housing Finance 
Agency determines, after the end of the 1-year period beginning on the 
date of the abolishment under section 201(a), that a reorganization of 
the combined work force is required, that reorganization shall be 
deemed a major reorganization for purposes of affording affected 
employees retirement under section 8336(d)(2) or 8414(b)(1)(B) of title 
5, United States Code.
    (e) Employee Benefit Programs.--Any employee of the Office of 
Federal Housing Enterprise Oversight accepting employment with the 
Director of the Federal Housing Finance Agency as a result of a 
transfer under subsection (a) may retain for 12 months after the date 
such transfer occurs membership in any employee benefit program of the 
Federal Housing Finance Agency or the Office of Federal Housing 
Enterprise Oversight, as applicable, including insurance, to which such 
employee belongs on the date of the abolishment under section 201(a) 
if--
            (1) the employee does not elect to give up the benefit or 
        membership in the program; and
            (2) the benefit or program is continued by the Director of 
        the Federal Housing Finance Agency;
The difference in the costs between the benefits which would have been 
provided by such agency and those provided by this section shall be 
paid by the Director of the Federal Housing Finance Agency. If any 
employee elects to give up membership in a health insurance program or 
the health insurance program is not continued by such Director, the 
employee shall be permitted to select an alternate Federal health 
insurance program within 30 days of such election or notice, without 
regard to any other regularly scheduled open season.

SEC. 304. TRANSFER OF PROPERTY AND FACILITIES.

    Upon the abolishment under section 301(a), all property of the 
Office of Federal Housing Enterprise Oversight shall transfer to the 
Director of the Federal Housing Finance Agency.

               Subtitle B--Federal Housing Finance Board

SEC. 321. ABOLISHMENT OF THE FEDERAL HOUSING FINANCE BOARD.

    (a) In General.--Effective at the end of the 1-year period 
beginning on the date of enactment of this Act, the Federal Housing 
Finance Board (in this title referred to as the ``Board'') is 
abolished.
    (b) Disposition of Affairs.--During the 1-year period beginning on 
the date of enactment of this Act, the Board, solely for the purpose of 
winding up the affairs of the Board--
            (1) shall manage the employees of such Board and provide 
        for the payment of the compensation and benefits of any such 
        employee which accrue before the effective date of the transfer 
        of such employee under section 323; and
            (2) may take any other action necessary for the purpose of 
        winding up the affairs of the Board.
    (c) Status of Employees Before Transfer.--The amendments made by 
titles I and II and the abolishment of the Board under subsection (a) 
may not be construed to affect the status of any employee of such Board 
as employees of an agency of the United States for purposes of any 
other provision of law before the effective date of the transfer of any 
such employee under section 403.
    (d) Use of Property and Services.--
            (1) Property.--The Director of the Federal Housing Finance 
        Agency may use the property of the Board to perform functions 
        which have been transferred to the Director of the Federal 
        Housing Finance Agency for such time as is reasonable to 
        facilitate the orderly transfer of functions transferred under 
        any other provision of this Act or any amendment made by this 
        Act to any other provision of law.
            (2) Agency services.--Any agency, department, or other 
        instrumentality of the United States, and any successor to any 
        such agency, department, or instrumentality, which was 
        providing supporting services to the Board before the 
        expiration of the 1-year period under subsection (a) in 
        connection with functions that are transferred to the Director 
        of the Federal Housing Finance Agency shall--
                    (A) continue to provide such services, on a 
                reimbursable basis, until the transfer of such 
                functions is complete; and
                    (B) consult with any such agency to coordinate and 
                facilitate a prompt and reasonable transition.
    (e) Savings Provisions.--
            (1) Existing rights, duties, and obligations not 
        affected.--Subsection (a) shall not affect the validity of any 
        right, duty, or obligation of the United States, a member of 
        the Board, or any other person, which--
                    (A) arises under title XIII of the Housing and 
                Community Development Act of 1992, the Federal National 
                Mortgage Association Charter Act, the Federal Home Loan 
                Mortgage Corporation Act, the Federal Home Loan Bank 
                Act, or any other provision of law applicable with 
                respect to such Board; and
                    (B) existed on the day before the effective date of 
                the abolishment under subsection (a).
            (2) Continuation of suits.--No action or other proceeding 
        commenced by or against the Board in connection with functions 
        that are transferred to the Director of the Federal Housing 
        Finance Agency shall abate by reason of the enactment of this 
        Act, except that the Director of the Federal Housing Finance 
        Agency shall be substituted for the Board or any member thereof 
        as a party to any such action or proceeding.

SEC. 322. CONTINUATION AND COORDINATION OF CERTAIN REGULATIONS.

    (a) In General.--All regulations, orders, and determinations 
described under subsection (b) shall remain in effect according to the 
terms of such regulations, orders, determinations, and resolutions, and 
shall be enforceable by or against the Director of the Federal Housing 
Finance Agency until modified, terminated, set aside, or superseded in 
accordance with applicable law by such Director, any court of competent 
jurisdiction, or operation of law.
    (b) Applicability.--A regulation, order, or determination is 
described under this subsection if it--
            (1) was issued, made, prescribed, or allowed to become 
        effective by--
                    (A) the Board; or
                    (B) a court of competent jurisdiction and that 
                relate to functions transferred by this Act; and
            (2) is in effect on the effective date of the abolishment 
        under section 321(a).

SEC. 323. TRANSFER AND RIGHTS OF EMPLOYEES OF THE FEDERAL HOUSING 
              FINANCE BOARD.

    (a) Transfer.--Each employee of the Board shall be transferred to 
the Federal Housing Finance Agency for employment not later than the 
effective date of the abolishment under section 321(a), and such 
transfer shall be deemed a transfer of function for purposes of section 
3503 of title 5, United States Code.
    (b) Guaranteed Positions.--Each employee transferred under 
subsection (a) shall be guaranteed a position with the same status, 
tenure, grade, and pay as that held on the day immediately preceding 
the transfer. Each such employee holding a permanent position shall not 
be involuntarily separated or reduced in grade or compensation for 12 
months after the date of transfer, except for cause or, if the employee 
is a temporary employee, separated in accordance with the terms of the 
appointment.
    (c) Appointment Authority for Excepted and Senior Executive Service 
Employees.--
            (1) In general.--In the case of employees occupying 
        positions in the excepted service or the Senior Executive 
        Service, any appointment authority established under law or by 
        regulations of the Office of Personnel Management for filling 
        such positions shall be transferred, subject to paragraph (2).
            (2) Decline of transfer.--The Director of the Federal 
        Housing Finance Agency may decline a transfer of authority 
        under paragraph (1) to the extent that such authority relates 
        to positions excepted from the competitive service because of 
        their confidential, policymaking, policy-determining, or 
        policy-advocating character, and noncareer positions in the 
        Senior Executive Service (within the meaning of section 
        3132(a)(7) of title 5, United States Code).
    (d) Reorganization.--If the Director of the Federal Housing Finance 
Agency determines, after the end of the 1-year period beginning on the 
effective date of the abolishment under section 321(a), that a 
reorganization of the combined workforce is required, that 
reorganization shall be deemed a major reorganization for purposes of 
affording affected employees retirement under section 8336(d)(2) or 
8414(b)(1)(B) of title 5, United States Code.
    (e) Employee Benefit Programs.--
            (1) In general.--Any employee of the Board accepting 
        employment with the Federal Housing Finance Agency as a result 
        of a transfer under subsection (a) may retain for 12 months 
        after the date on which such transfer occurs membership in any 
        employee benefit program of the Federal Housing Finance Agency 
        or the Board, as applicable, including insurance, to which such 
        employee belongs on the effective date of the abolishment under 
        section 321(a) if--
                    (A) the employee does not elect to give up the 
                benefit or membership in the program; and
                    (B) the benefit or program is continued by the 
                Director of the Federal Housing Finance Agency.
            (2) Cost differential.--The difference in the costs between 
        the benefits which would have been provided by the Board and 
        those provided by this section shall be paid by the Director of 
        the Federal Housing Finance Agency. If any employee elects to 
        give up membership in a health insurance program or the health 
        insurance program is not continued by such Director, the 
        employee shall be permitted to select an alternate Federal 
        health insurance program within 30 days after such election or 
        notice, without regard to any other regularly scheduled open 
        season.

SEC. 324. TRANSFER OF PROPERTY AND FACILITIES.

    Upon the effective date of the abolishment under section 321(a), 
all property of the Board shall transfer to the Director of the Federal 
Housing Finance Agency.
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