IB 

Union Calendar No. 126 

109TH CONGRESS 

1ST SESSION H. R. 1461 

[Report No. 109–171, Part I] 

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 

JULY 14, 2005 

Reported with an amendment and referred to the Committee on the Judiciary 

for a period ending not later than September 16, 2005 for consideration 

of such provisions of the bill as fall within the jurisdiction of that committee pursuant to clause 1(l), rule X 

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

SEPTEMBER 16, 2005 

Additional sponsors: Mr. GARRETT of New Jersey, Mr. WOLF, Mr. GILLMOR, 

Mr. FEENEY, Mr. BARRETT of South Carolina, Mr. MCHENRY, Ms. ROSLEHTINEN, Mr. BLUNT, Mr. RYAN of Wisconsin, Mr. MCCOTTER, Mr. 

ADERHOLT, and Mr. SIMMONS

SEPTEMBER 16, 2005 

Committee on the Judiciary discharged; committed to the Committee of the 

Whole House on the State of the Union and ordered to be printed 
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[For text of introduced bill, see copy of bill as introduced on April 5, 2005] 

A BILL 

To reform the regulation of certain housing-related 

Government-sponsored enterprises, and for other purposes. 

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

3 SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 

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

5 ‘‘Federal Housing Finance Reform Act of 2005’’. 

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

7 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. Disclosure of charitable contributions by enterprises. 

Sec. 106. Assessments. 

Sec. 107. Examiners and accountants. 

Sec. 108. Prohibition and withholding of executive compensation. 

Sec. 109. Reviews of regulated entities. 

Sec. 110. Regulations and orders. 

Sec. 111. Risk-based capital requirements. 

Sec. 112. Minimum and critical capital levels. 

Sec. 113. Review of and authority over enterprise assets and liabilities. 

Sec. 114. Corporate governance of enterprises. 

Sec. 115. Required registration under Securities Exchange Act of 1934. 

Sec. 116. Financial Institutions Examination Council. 

Sec. 117. Guarantee fee study. 

Sec. 118. Conforming amendments. 
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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. Revision of housing goals. 

Sec. 126. Duty to serve underserved markets. 

Sec. 127. Monitoring and enforcing compliance with housing goals. 

Sec. 128. Affordable housing fund. 

Sec. 129. Consistency with mission. 

Sec. 130. Enforcement. 

Sec. 131. 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. Prejudgment attachment. 

Sec. 164. Enforcement and jurisdiction. 

Sec. 165. Civil money penalties. 

Sec. 166. Removal and prohibition authority. 

Sec. 167. Criminal penalty. 

Sec. 168. Subpoena authority. 

Sec. 169. 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. Study of alternative secondary market systems. 

Sec. 185. 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. Joint activities of banks. 

Sec. 205. Sharing of information between Federal Home Loan Banks. 

Sec. 206. Reorganization of banks and voluntary merger. 

Sec. 207. Securities and Exchange Commission disclosure. 

Sec. 208. Community financial institution members. 

Sec. 209. Technical and conforming amendments. 

Sec. 210. Study of affordable housing program use for long-term care facilities. 
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Sec. 211. Effective date. 

TITLE III—TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY 

OF OFFICE OF FEDERAL HOUSING ENTERPRISE OVERSIGHT, 

FEDERAL HOUSING FINANCE BOARD, AND DEPARTMENT OF 

HOUSING AND URBAN DEVELOPMENT 

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. 

Subtitle C—Department of Housing and Urban Development 

Sec. 341. Termination of enterprise-related functions. 

Sec. 342. Continuation and coordination of certain regulations. 

Sec. 343. Transfer and rights of employees. 

Sec. 344. Transfer of appropriations, property, and facilities. 

1 SEC. 2. DEFINITIONS. 

2 Section 1303 of the Housing and Community Develop3 ment Act of 1992 (12 U.S.C. 4502) is amended— 

4 (1) in paragraph (7), by striking ‘‘an enter5 prise’’ and inserting ‘‘a regulated entity’’; 

6 (2) by striking ‘‘the enterprise’’ each place such 

7 term appears (except in paragraphs (4) and (18)) 

8 and inserting ‘‘the regulated entity’’; 

9 (3) in paragraph (5), by striking ‘‘Office of Fed10 eral Housing Enterprise Oversight of the Department 

11 of Housing and Urban Development’’ and inserting 

12 ‘‘Federal Housing Finance Agency’’; 
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1 (4) in each of paragraphs (8), (9), (10), and 

2 (19), by striking ‘‘Secretary’’ each place that term ap3 pears and inserting ‘‘Director’’; 

4 (5) in paragraph (13), by inserting ‘‘, with re5 spect to an enterprise,’’ after ‘‘means’’; 

6 (6) by redesignating paragraphs (16) through 

7 (19) as paragraphs (20) through (23), respectively; 

8 (7) by striking paragraphs (14) and (15) and 

9 inserting the following new paragraphs: 

10 ‘‘(18) REGULATED ENTITY.—The term ‘regulated 

11 entity’ means— 

12 ‘‘(A) the Federal National Mortgage Asso13 ciation and any affiliate thereof; 

14 ‘‘(B) the Federal Home Loan Mortgage Cor15 poration and any affiliate thereof; and 

16 ‘‘(C) each Federal home loan bank. 

17 ‘‘(19) REGULATED ENTITY-AFFILIATED PARTY.— 

18 The term ‘regulated entity-affiliated party’ means— 

19 ‘‘(A) any director, officer, employee, or con20 trolling stockholder of, or agent for, a regulated 

21 entity; 

22 ‘‘(B) any shareholder, affiliate, consultant, 

23 or joint venture partner of a regulated entity, 

24 and any other person, as determined by the Di25 rector (by regulation or on a case-by-case basis) 
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1 that participates in the conduct of the affairs of 

2 a regulated entity; 

3 ‘‘(C) any independent contractor for a regu4 lated entity (including any attorney, appraiser, 

5 or accountant); and 

6 ‘‘(D) any not-for-profit corporation that re7 ceives its principal funding, on an ongoing 

8 basis, from any regulated entity.’’; 

9 (8) by redesignating paragraphs (8) through (13) 

10 as paragraphs (12) through (17), respectively; and 

11 (9) by inserting after paragraph (7) the fol12 lowing new paragraph: 

13 ‘‘(11) FEDERAL HOME LOAN BANK.—The term 

14 ‘Federal home loan bank’ means a bank established 

15 under the authority of the Federal Home Loan Bank 

16 Act.’’; 

17 (10) by redesignating paragraphs (2) through (7) 

18 as paragraphs (5) through (10), respectively; and 

19 (11) by inserting after paragraph (1) the fol20 lowing new paragraphs: 

21 ‘‘(2) AGENCY.—The term ‘Agency’ means the 

22 Federal Housing Finance Agency. 

23 ‘‘(3) AUTHORIZING STATUTES.—The term ‘au24 thorizing statutes’ means— 
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1 ‘‘(A) the Federal National Mortgage Asso2 ciation Charter Act; 

3 ‘‘(B) the Federal Home Loan Mortgage Cor4 poration Act; and 

5 ‘‘(C) the Federal Home Loan Bank Act. 

6 ‘‘(4) BOARD.—The term ‘Board’ means the 

7 Housing Finance Oversight Board established under 

8 section 1313B.’’. 

9 TITLE I—REFORM OF REGULA10 TION OF ENTERPRISES AND 

11 FEDERAL HOME LOAN BANKS 

12 Subtitle A—Improvement of Safety 

13 and Soundness 

14 SEC. 101. ESTABLISHMENT OF THE FEDERAL HOUSING FI15 NANCE AGENCY. 

16 (a) IN GENERAL.—The Housing and Community De17 velopment Act of 1992 (12 U.S.C. 4501 et seq.) is amended 

18 by striking sections 1311 and 1312 and inserting the fol19 lowing: 

20 ‘‘SEC. 1311. ESTABLISHMENT OF THE FEDERAL HOUSING FI21 NANCE AGENCY. 

22 ‘‘(a) ESTABLISHMENT.—There is established the Fed23 eral Housing Finance Agency, which shall be an inde24 pendent agency of the Federal Government. 
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1 ‘‘(b) GENERAL SUPERVISORY AND REGULATORY AU2 THORITY.— 

3 ‘‘(1) IN GENERAL.—Each regulated entity shall, 

4 to the extent provided in this title, be subject to the 

5 supervision and regulation of the Agency. 

6 ‘‘(2) AUTHORITY OVER FANNIE MAE, FREDDIE

7 MAC, AND FEDERAL HOME LOAN BANKS.—The Direc8 tor of the Federal Housing Finance Agency shall have 

9 general supervisory and regulatory authority over 

10 each regulated entity and shall exercise such general 

11 regulatory authority, including such duties and au12 thorities set forth under section 1313 of this Act, to 

13 ensure that the purposes of this Act, the authorizing 

14 statutes, and any other applicable law are carried 

15 out. 

16 ‘‘(c) SAVINGS PROVISION.—The authority of the Direc17 tor to take actions under subtitles B and C shall not in 

18 any way limit the general supervisory and regulatory au19 thority granted to the Director. 

20 ‘‘SEC. 1312. DIRECTOR. 

21 ‘‘(a) ESTABLISHMENT OF POSITION.—There is estab22 lished the position of the Director of the Federal Housing 

23 Finance Agency, who shall be the head of the Agency. 

24 ‘‘(b) APPOINTMENT; TERM.— 
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1 ‘‘(1) APPOINTMENT.—The Director shall be ap2 pointed by the President, by and with the advice and 

3 consent of the Senate, from among individuals who 

4 are citizens of the United States, have a demonstrated 

5 understanding of financial management or oversight, 

6 and have a demonstrated understanding of capital 

7 markets, including the mortgage securities markets 

8 and housing finance. 

9 ‘‘(2) TERM AND REMOVAL.—The Director shall 

10 be appointed for a term of 5 years and may be re11 moved by the President only for cause. 

12 ‘‘(3) VACANCY.—A vacancy in the position of Di13 rector that occurs before the expiration of the term for 

14 which a Director was appointed shall be filled in the 

15 manner established under paragraph (1), and the Di16 rector appointed to fill such vacancy shall be ap17 pointed only for the remainder of such term. 

18 ‘‘(4) SERVICE AFTER END OF TERM.—An indi19 vidual may serve as the Director after the expiration 

20 of the term for which appointed until a successor has 

21 been appointed. 

22 ‘‘(5) TRANSITIONAL PROVISION.—Notwith23 standing paragraphs (1) and (2), the Director of the 

24 Office of Federal Housing Enterprise Oversight of the 

25 Department of Housing and Urban Development shall 
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1 serve as the Director until a successor has been ap2 pointed under paragraph (1). 

3 ‘‘(c) DEPUTY DIRECTOR OF THE DIVISION OF ENTER4 PRISE REGULATION.— 

5 ‘‘(1) IN GENERAL.—The Agency shall have a 

6 Deputy Director of the Division of Enterprise Regula7 tion, who shall be appointed by the Director from 

8 among individuals who are citizens of the United 

9 States, have a demonstrated understanding of finan10 cial management or oversight and of mortgage securi11 ties markets and housing finance. 

12 ‘‘(2) FUNCTIONS.—The Deputy Director of the 

13 Division of Enterprise Regulation shall have such 

14 functions, powers, and duties with respect to the over15 sight of the enterprises as the Director shall prescribe. 

16 ‘‘(d) DEPUTY DIRECTOR OF THE DIVISION OF FED17 ERAL HOME LOAN BANK REGULATION.— 

18 ‘‘(1) IN GENERAL.—The Agency shall have a 

19 Deputy Director of the Division of Federal Home 

20 Loan Bank Regulation, who shall be appointed by the 

21 Director from among individuals who are citizens of 

22 the United States, have a demonstrated under23 standing of financial management or oversight and of 

24 the Federal Home Loan Bank System and housing fi25 nance. 
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1 ‘‘(2) FUNCTIONS.—The Deputy Director of the 

2 Division of Federal Home Loan Bank Regulation 

3 shall have such functions, powers, and duties with re4 spect to the oversight of the Federal home loan banks 

5 as the Director shall prescribe. 

6 ‘‘(e) DEPUTY DIRECTOR FOR HOUSING.— 

7 ‘‘(1) IN GENERAL.—The Agency shall have a 

8 Deputy Director for Housing, who shall be appointed 

9 by the Director from among individuals who are citi10 zens of the United States, and have a demonstrated 

11 understanding of the housing markets and housing fi12 nance. 

13 ‘‘(2) FUNCTIONS.—The Deputy Director for 

14 Housing shall have such functions, powers, and duties 

15 with respect to the oversight of the housing mission 

16 and goals of the enterprises, and with respect to over17 sight of the housing mission of the Federal home loan 

18 banks, as the Director shall prescribe. 

19 ‘‘(f) LIMITATIONS.—The Director and each of the Dep20 uty Directors may not— 

21 ‘‘(1) have any direct or indirect financial inter22 est in any regulated entity or regulated entity-affili23 ated party; 
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1 ‘‘(2) hold any office, position, or employment in 

2 any regulated entity or regulated entity-affiliated 

3 party; or 

4 ‘‘(3) have served as an executive officer or direc5 tor of any regulated entity, or regulated entity-affili6 ated party, at any time during the 3-year period end7 ing on the date of appointment of such individual as 

8 Director or Deputy Director.’’. 

9 (b) APPOINTMENT OF DIRECTOR.—Notwithstanding 

10 any other provision of law or of this Act, the President may, 

11 any time after the date of the enactment of this Act, appoint 

12 an individual to serve as the Director of the Federal Hous13 ing Finance Agency, as such office is established by the 

14 amendment made by subsection (a). This subsection shall 

15 take effect on the date of the enactment of this Act. 

16 SEC. 102. DUTIES AND AUTHORITIES OF DIRECTOR. 

17 (a) IN GENERAL.—The Housing and Community De18 velopment Act of 1992 (12 U.S.C. 4513) is amended by 

19 striking section 1313 and inserting the following new sec20 tions: 

21 ‘‘SEC. 1313. DUTIES AND AUTHORITIES OF DIRECTOR. 

22 ‘‘(a) DUTIES.— 

23 ‘‘(1) PRINCIPAL DUTIES.—The principal duties 

24 of the Director shall be— 
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1 ‘‘(A) to oversee the operations of each regu2 lated entity; and 

3 ‘‘(B) to ensure that— 

4 ‘‘(i) each regulated entity operates in a 

5 safe and sound manner, including mainte6 nance of adequate capital and internal con7 trols; 

8 ‘‘(ii) the operations and activities of 

9 each regulated entity foster liquid, efficient, 

10 competitive, and resilient national housing 

11 finance markets that minimize the cost of 

12 housing finance (including activities relat13 ing to mortgages on housing for low- and 

14 moderate- income families involving a rea15 sonable economic return that may be less 

16 than the return earned on other activities); 

17 ‘‘(iii) each regulated entity complies 

18 with this title and the rules, regulations, 

19 guidelines, and orders issued under this title 

20 and the authorizing statutes; and 

21 ‘‘(iv) each regulated entity carries out 

22 its statutory mission only through activities 

23 that are consistent with this title and the 

24 authorizing statutes. 
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1 ‘‘(2) SCOPE OF AUTHORITY.—The authority of 

2 the Director shall include the authority— 

3 ‘‘(A) to review and, if warranted based on 

4 the principal duties described in paragraph (1), 

5 reject any acquisition or transfer of a controlling 

6 interest in an enterprise; and 

7 ‘‘(B) to exercise such incidental powers as 

8 may be necessary or appropriate to fulfill the 

9 duties and responsibilities of the Director in the 

10 supervision and regulation of each regulated en11 tity. 

12 ‘‘(b) DELEGATION OF AUTHORITY.—The Director may 

13 delegate to officers or employees of the Agency, including 

14 each of the Deputy Directors, any of the functions, powers, 

15 or duties of the Director, as the Director considers appro16 priate. 

17 ‘‘(c) LITIGATION AUTHORITY.— 

18 ‘‘(1) IN GENERAL.—In enforcing any provision 

19 of this title, any regulation or order prescribed under 

20 this title, or any other provision of law, rule, regula21 tion, or order, or in any other action, suit, or pro22 ceeding to which the Director is a party or in which 

23 the Director is interested, and in the administration 

24 of conservatorships and receiverships, the Director 
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1 may act in the Director’s own name and through the 

2 Director’s own attorneys. 

3 ‘‘(2) SUBJECT TO SUIT.—Except as otherwise 

4 provided by law, the Director shall be subject to suit 

5 (other than suits on claims for money damages) by a 

6 regulated entity or director or officer thereof with re7 spect to any matter under this title or any other ap8 plicable provision of law, rule, order, or regulation 

9 under this title, in the United States district court for 

10 the judicial district in which the regulated entity has 

11 its principal place of business, or in the United 

12 States District Court for the District of Columbia, 

13 and the Director may be served with process in the 

14 manner prescribed by the Federal Rules of Civil Pro15 cedure. 

16 ‘‘SEC. 1313A. PRUDENTIAL MANAGEMENT AND OPERATIONS 

17 STANDARDS. 

18 ‘‘(a) STANDARDS.—The Director shall establish stand19 ards, by regulation, guideline, or order, for each regulated 

20 entity relating to— 

21 ‘‘(1) adequacy of internal controls and informa22 tion systems taking into account the nature and scale 

23 of business operations; 

24 ‘‘(2) independence and adequacy of internal 

25 audit systems; 
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1 ‘‘(3) management of credit and counterparty 

2 risk, including systems to identify concentrations of 

3 credit risk and prudential limits to restrict exposure 

4 of the regulated entity to a single counterparty or 

5 groups of related counterparties; 

6 ‘‘(4) management of interest rate risk exposure; 

7 ‘‘(5) management of market risk, including 

8 standards that provide for systems that accurately 

9 measure, monitor, and control market risks and, as 

10 warranted, that establish limitations on market risk; 

11 ‘‘(6) adequacy and maintenance of liquidity and 

12 reserves; 

13 ‘‘(7) management of any asset and investment 

14 portfolio; 

15 ‘‘(8) investments and acquisitions by a regulated 

16 entity, to ensure that they are consistent with the 

17 purposes of this Act and the authorizing statutes; 

18 ‘‘(9) maintenance of adequate records, in accord19 ance with consistent accounting policies and practices 

20 that enable the Director to evaluate the financial con21 dition of the regulated entity; 

22 ‘‘(10) issuance of subordinated debt by that par23 ticular regulated entity, as the Director considers nec24 essary; 
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1 ‘‘(11) overall risk management processes, includ2 ing adequacy of oversight by senior management and 

3 the board of directors and of processes and policies to 

4 identify, measure, monitor, and control material 

5 risks, including reputational risks, and for adequate, 

6 well-tested business resumption plans for all major 

7 systems with remote site facilities to protect against 

8 disruptive events; and 

9 ‘‘(12) such other operational and management 

10 standards as the Director determines to be appro11 priate. 

12 ‘‘(b) FAILURE TO MEET STANDARDS.— 

13 ‘‘(1) PLAN REQUIREMENT.— 

14 ‘‘(A) IN GENERAL.—If the Director deter15 mines that a regulated entity fails to meet any 

16 standard established under subsection (a)— 

17 ‘‘(i) if such standard is established by 

18 regulation, the Director shall require the 

19 regulated entity to submit an acceptable 

20 plan to the Director within the time allowed 

21 under subparagraph (C); and 

22 ‘‘(ii) if such standard is established by 

23 guideline, the Director may require the reg24 ulated entity to submit a plan described in 

25 clause (i). 
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1 ‘‘(B) CONTENTS.—Any plan required under 

2 subparagraph (A) shall specify the actions that 

3 the regulated entity will take to correct the defi4 ciency. If the regulated entity is undercapital5 ized, the plan may be a part of the capital res6 toration plan for the regulated entity under sec7 tion 1369C. 

8 ‘‘(C) DEADLINES FOR SUBMISSION AND RE9 VIEW.—The Director shall by regulation establish 

10 deadlines that— 

11 ‘‘(i) provide the regulated entities with 

12 reasonable time to submit plans required 

13 under subparagraph (A), and generally re14 quire a regulated entity to submit a plan 

15 not later than 30 days after the Director de16 termines that the entity fails to meet any 

17 standard established under subsection (a); 

18 and 

19 ‘‘(ii) require the Director to act on 

20 plans expeditiously, and generally not later 

21 than 30 days after the plan is submitted. 

22 ‘‘(2) REQUIRED ORDER UPON FAILURE TO SUB23 MIT OR IMPLEMENT PLAN.—If a regulated entity fails 

24 to submit an acceptable plan within the time allowed 

25 under paragraph (1)(C), or fails in any material re-
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1 spect to implement a plan accepted by the Director, 

2 the following shall apply: 

3 ‘‘(A) REQUIRED CORRECTION OF DEFI4 CIENCY.—The Director shall, by order, require 

5 the regulated entity to correct the deficiency. 

6 ‘‘(B) OTHER AUTHORITY.—The Director 

7 may, by order, take one or more of the following 

8 actions until the deficiency is corrected: 

9 ‘‘(i) Prohibit the regulated entity from 

10 permitting its average total assets (as such 

11 term is defined in section 1316(b)) during 

12 any calendar quarter to exceed its average 

13 total assets during the preceding calendar 

14 quarter, or restrict the rate at which the av15 erage total assets of the entity may increase 

16 from one calendar quarter to another. 

17 ‘‘(ii) Require the regulated entity— 

18 ‘‘(I) in the case of an enterprise, 

19 to increase its ratio of core capital to 

20 assets. 

21 ‘‘(II) in the case of a Federal 

22 home loan bank, to increase its ratio of 

23 total capital (as such term is defined 

24 in section 6(a)(5) of the Federal Home 
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1 Loan Bank Act (12 U.S.C. 1426(a)(5)) 

2 to assets. 

3 ‘‘(iii) Require the regulated entity to 

4 take any other action that the Director de5 termines will better carry out the purposes 

6 of this section than any of the actions de7 scribed in this subparagraph 

8 ‘‘(3) MANDATORY RESTRICTIONS.—In complying 

9 with paragraph (2), the Director shall take one or 

10 more of the actions described in clauses (i) through 

11 (iii) of paragraph (2)(B) if— 

12 ‘‘(A) the Director determines that the regu13 lated entity fails to meet any standard pre14 scribed under subsection (a); 

15 ‘‘(B) the regulated entity has not corrected 

16 the deficiency; and 

17 ‘‘(C) during the 18-month period before the 

18 date on which the regulated entity first failed to 

19 meet the standard, the entity underwent extraor20 dinary growth, as defined by the Director. 

21 ‘‘(c) OTHER ENFORCEMENT AUTHORITY NOT AF22 FECTED.—The authority of the Director under this section 

23 is in addition to any other authority of the Director.’’. 

24 (b) INDEPENDENCE IN CONGRESSIONAL TESTIMONY

25 AND RECOMMENDATIONS.—Section 111 of Public Law 93– 
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1 495 (12 U.S.C. 250) is amended by striking ‘‘the Federal 

2 Housing Finance Board’’ and inserting ‘‘the Director of the 

3 Federal Housing Finance Agency’’. 

4 SEC. 103. HOUSING FINANCE OVERSIGHT BOARD. 

5 (a) IN GENERAL.—Title XIII of the Housing and 

6 Community Development Act of 1992 (12 U.S.C. 4501 et 

7 seq.) is amended by inserting after section 1313A, as added 

8 by section 102 of this Act, the following new section: 

9 ‘‘SEC. 1313B. HOUSING FINANCE OVERSIGHT BOARD. 

10 ‘‘(a) IN GENERAL.—There is established the Housing 

11 Finance Oversight Board. 

12 ‘‘(b) DUTIES.— 

13 ‘‘(1) IN GENERAL.—The Board shall advise the 

14 Director with respect to overall strategies and policies 

15 in carrying out the duties of the Director under this 

16 title, at the request of the Director and at the initia17 tive of the Board, and shall carry out such functions 

18 as otherwise provided by law. 

19 ‘‘(2) LIMITATION.—The Director may not dele20 gate to the Board any of the functions, powers, or du21 ties of the Director. 

22 ‘‘(c) COMPOSITION.—The Board shall be comprised of 

23 5 members, as follows: 

24 ‘‘(1) One member shall be the Director, who shall 

25 serve as the Chairperson of the Board. 
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1 ‘‘(2) One member shall be the Secretary of the 

2 Treasury or the designee of the Secretary. 

3 ‘‘(3) One member shall be the Secretary of Hous4 ing and Urban Development or the designee of the 

5 Secretary. 

6 ‘‘(4) Two members shall be appointed by the 

7 President, by and with the advice and consent of the 

8 Senate, who shall include— 

9 ‘‘(A) one individual who has extensive expe10 rience and expertise in the capital markets (in11 cluding debt markets), the secondary mortgage 

12 market, and mortgage-backed securities; and 

13 ‘‘(B) one individual who has extensive expe14 rience and expertise in mortgage finance (includ15 ing single family and multifamily housing mort16 gage finance), development of affordable housing, 

17 and economic development and revitalization. 

18 ‘‘(d) TERMS AND VACANCIES.— 

19 ‘‘(1) TERMS.—Each member of the Board pursu20 ant to paragraph (4) shall be appointed for a term 

21 of 3 years, and may be removed by the President only 

22 for cause. 

23 ‘‘(2) VACANCIES.—A member of the Board ap24 pointed to fill a vacancy occurring before the expira25 tion of the term for which the member’s predecessor 
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1 was appointed shall be appointed only for the re2 mainder of that term. A member of the Board may 

3 serve after the expiration of the member’s term until 

4 a successor has been appointed. 

5 ‘‘(e) PROHIBITION OF ADDITIONAL COMPENSATION.— 

6 Notwithstanding any other provision of law, members of 

7 Board pursuant to paragraphs (1), (2), and (3) shall not 

8 receive additional compensation by reason of service on the 

9 Board. 

10 ‘‘(f) LIMITATIONS.—Each member of the Board may 

11 not— 

12 ‘‘(1) have any direct or indirect financial inter13 est in any regulated entity or regulated entity-affili14 ated party; or 

15 ‘‘(2) hold any office, position, or employment in 

16 any regulated entity or regulated entity-affiliated 

17 party. 

18 ‘‘(g) FULL-TIME MEMBERS AND STAFF.— 

19 ‘‘(1) FULL-TIME MEMBERS.—The members of the 

20 Board pursuant to subsection (c)(4) shall serve on a 

21 full-time basis. 

22 ‘‘(2) STAFF.—The staff of the Board shall be ap23 pointed subject to the provisions of title 5, United 

24 States Code, governing appointments in the competi25 tive service, and shall be paid in accordance with the 
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1 provisions of chapter 51 and subchapter III of chap2 ter 53 of that title relating to classification and Gen3 eral Schedule pay rates, except that each member of 

4 the Board pursuant to paragraph (4) may appoint 

5 one staff member without regard to the such provi6 sions governing appointments in the competitive serv7 ice and such staff members may be paid by the Board 

8 without regard to the such provisions relating to clas9 sification and General Schedule pay rates. 

10 ‘‘(h) MEETINGS.— 

11 ‘‘(1) IN GENERAL.—The Board shall meet upon 

12 notice by the Director, but in no event shall the Board 

13 meet less frequently than once every 3 months. 

14 ‘‘(2) SPECIAL MEETINGS.—Any member of the 

15 Board may, upon giving written notice to the Direc16 tor, require a special meeting of the Board, which 

17 shall be convened by the Director within 30 days after 

18 such notice. 

19 ‘‘(i) TESTIMONY.—On an annual basis, the Board 

20 shall testify before Congress regarding— 

21 ‘‘(1) the safety and soundness of the regulated en22 tities; 

23 ‘‘(2) any material deficiencies in the conduct of 

24 the operations of the regulated entities; 
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1 ‘‘(3) the overall operational status of the regu2 lated entities; 

3 ‘‘(4) an evaluation of the performance of the reg4 ulated entities in carrying out their respective mis5 sions; 

6 ‘‘(5) operations, resources, and performance of 

7 the Agency and the Board; and 

8 ‘‘(6) such other matters relating to the Agency, 

9 the Board, and the regulated entities, and their fulfill10 ment of their missions, as the Board determines ap11 propriate. 

12 ‘‘(j) COSTS.—Costs of the Board, including staff, shall 

13 be paid by the Agency as a cost and expense of the Agency. 

14 ‘‘(k) EXEMPTION.—Notwithstanding any other provi15 sion of law, the provisions of section 552b of title 5, United 

16 States Code, shall not apply to the Board.’’. 

17 (b) ANNUAL REPORT OF THE DIRECTOR.—Section 

18 1319B(a) of the Housing and Community Development Act 

19 of 1992 (12 U.S.C. 4521 (a)) is amended— 

20 (1) in paragraph (3), by striking ‘‘and’’ at the 

21 end; and 

22 (2) by striking paragraph (4) and inserting the 

23 following new paragraphs: 

24 ‘‘(4) an assessment of the Board with respect 

25 to— 
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1 ‘‘(A) the safety and soundness of the regu2 lated entities; 

3 ‘‘(B) any material deficiencies in the con4 duct of the operations of the regulated entities; 

5 ‘‘(C) the overall operational status of the 

6 regulated entities; 

7 ‘‘(D) an evaluation of the performance of 

8 the regulated entities in carrying out their mis9 sions, including compliance of the enterprises 

10 with the housing goals under subpart B of part 

11 2 of this subtitle and compliance of the Federal 

12 home loan banks with the community investment 

13 and affordable housing programs under sub14 sections (i) and (j) of section 10 of the Federal 

15 Home Loan Bank Act; 

16 ‘‘(E) an evaluation of the performance of 

17 the Agency in fulfilling its duties and respon18 sibilities under law; and 

19 ‘‘(F) such other matters relating to the 

20 Board and the fulfillment of its duties as the 

21 Board considers appropriate; 

22 ‘‘(5) operations, resources, and performance of 

23 the Agency; and 

24 ‘‘(6) such other matters relating to the Agency 

25 and its fulfillment of its mission.’’. 
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1 SEC. 104. AUTHORITY TO REQUIRE REPORTS BY REGU2 LATED ENTITIES. 

3 Section 1314 of the Housing and Community Develop4 ment Act of 1992 (12 U.S.C. 4514) is amended— 

5 (1) in the section heading, by striking ‘‘ENTER6 PRISES’’ and inserting ‘‘REGULATED ENTITIES’’; 

7 (2) in subsection (a)— 

8 (A) in the subsection heading, by striking 

9 ‘‘Special Reports and Reports of Financial Con10 dition’’ and inserting ‘‘Regular and Special Re11 ports’’; 

12 (B) in paragraph (1)— 

13 (i) in the paragraph heading, by strik14 ing ‘‘FINANCIAL CONDITION’’ and inserting 

15 ‘‘REGULAR REPORTS’’; and 

16 (ii) by striking ‘‘reports of financial 

17 condition and operations’’ and inserting 

18 ‘‘regular reports on the condition (including 

19 financial condition), management, activi20 ties, or operations of the regulated entity, as 

21 the Director considers appropriate’’; and 

22 (C) in paragraph (2), after ‘‘submit special 

23 reports’’ insert ‘‘on any of the topics specified in 

24 paragraph (1) or such other topics’’; and 

25 (3) by adding at the end the following new sub26 section: 
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1 ‘‘(c) REPORTS OF FRAUDULENT FINANCIAL TRANS2 ACTIONS.— 

3 ‘‘(1) REQUIREMENT TO REPORT.—The Director 

4 shall require a regulated entity to submit to the Di5 rector a timely report upon discovery by the regulated 

6 entity that it has purchased or sold a fraudulent loan 

7 or financial instrument or suspects a possible fraud 

8 relating to a purchase or sale of any loan or financial 

9 instrument. The Director shall require the regulated 

10 entities to establish and maintain procedures designed 

11 to discover any such transactions. 

12 ‘‘(2) PROTECTION FROM LIABILITY FOR RE13 PORTS.— 

14 ‘‘(A) IN GENERAL.—If a regulated entity 

15 makes a report pursuant to paragraph (1), or a 

16 regulated entity-affiliated party makes, or re17 quires another to make, such a report, and such 

18 report is made in a good faith effort to comply 

19 with the requirements of paragraph (1), such 

20 regulated entity or regulated entity-afffiliated 

21 party shall not be liable to any person under 

22 any law or regulation of the United States, any 

23 constitution, law, or regulation of any State or 

24 political subdivision of any State, or under any 

25 contract or other legally enforceable agreement 
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1 (including any arbitration agreement), for such 

2 report or for any failure to provide notice of 

3 such report to the person who is the subject of 

4 such report or any other person identified in the 

5 report. 

6 ‘‘(B) RULE OF CONSTRUCTION.—Subpara7 graph (A) shall not be construed as creating— 

8 ‘‘(i) any inference that the term ‘per9 son’, as used in such subparagraph, may be 

10 construed more broadly than its ordinary 

11 usage so as to include any government or 

12 agency of government; or 

13 ‘‘(ii) any immunity against, or other14 wise affecting, any civil or criminal action 

15 brought by any government or agency of 

16 government to enforce any constitution, law, 

17 or regulation of such government or agen18 cy.’’. 

19 SEC. 105. DISCLOSURE OF CHARITABLE CONTRIBUTIONS BY 

20 ENTERPRISES. 

21 Section 1314 of the Housing and Community Develop22 ment Act of 1992 (12 U.S.C. 4514), as amended by the pre23 ceding provisions of this Act, is further amended by adding 

24 at the end the following new subsection: 
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1 ‘‘(d) DISCLOSURE OF CHARITABLE CONTRIBU2 TIONS BY ENTERPRISES.— 

3 ‘‘(1) REQUIRED DISCLOSURE.—The Director 

4 shall, by regulation, require each enterprise to submit 

5 a report annually, in a format designated by the Di6 rector, containing the following information: 

7 ‘‘(A) TOTAL VALUE.—The total value of 

8 contributions made by the enterprise to nonprofit 

9 organizations during its previous fiscal year. 

10 ‘‘(B) SUBSTANTIAL CONTRIBUTIONS.—If the 

11 value of contributions made by the enterprise to 

12 any nonprofit organization during its previous 

13 fiscal year exceeds the designated amount, the 

14 name of that organization and the value of con15 tributions. 

16 ‘‘(C) SUBSTANTIAL CONTRIBUTIONS TO IN17 SIDER-AFFILIATED CHARITIES.—Identification of 

18 each contribution whose value exceeds the des19 ignated amount that were made by the enterprise 

20 during the enterprise’s previous fiscal year to 

21 any nonprofit organization of which a director, 

22 officer, or controlling person of the enterprise, or 

23 a spouse thereof, was a director or trustee, the 

24 name of such nonprofit organization, and the 

25 value of the contribution. 
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1 ‘‘(2) DEFINITIONS.—For purposes of this sub2 section— 

3 ‘‘(A) the term ‘designated amount’ means 

4 such amount as may be designated by the Direc5 tor by regulation, consistent with the public in6 terest and the protection of investors for purposes 

7 of this subsection; and 

8 ‘‘(B) the Director may, by such regulations 

9 as the Director deems necessary or appropriate 

10 in the public interest, define the terms officer 

11 and controlling person. 

12 ‘‘(3) PUBLIC AVAILABILITY.—The Director shall 

13 make the information submitted pursuant to this sub14 section publicly available.’’. 

15 SEC. 106. ASSESSMENTS. 

16 Section 1316 of the Housing and Community Develop17 ment Act of 1992 (12 U.S.C. 4516) is amended— 

18 (1) by striking subsection (a) and inserting the 

19 following new subsection: 

20 ‘‘(a) ANNUAL ASSESSMENTS.—The Director shall es21 tablish and collect from the regulated entities annual assess22 ments in an amount not exceeding the amount sufficient 

23 to provide for reasonable costs and expenses of the Agency, 

24 including— 
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1 ‘‘(1) the expenses of any examinations under sec2 tion 1317 of this Act and under section 20 of the Fed3 eral Home Loan Bank Act; 

4 ‘‘(2) the expenses of obtaining any reviews and 

5 credit assessments under section 1319; and 

6 ‘‘(3) such amounts in excess of actual expenses 

7 for any given year as deemed necessary by the Direc8 tor to maintain a working capital fund in accordance 

9 with subsection (e).’’; 

10 (2) in subsection (b)— 

11 (A) in the subsection heading, by striking 

12 ‘‘ENTERPRISES’’ and inserting ‘‘REGULATED

13 ENTITIES’’ ; 

14 (B) by realigning paragraph (2) two ems 

15 from the left margin, so as to align the left mar16 gin of such paragraph with the left margins of 

17 paragraph (1); 

18 (C) in paragraph (1)— 

19 (i) by striking ‘‘Each enterprise’’ and 

20 inserting ‘‘Each regulated entity’’; 

21 (ii) by striking ‘‘each enterprise’’ and 

22 inserting ‘‘each regulated entity’’; and 

23 (iii) by striking ‘‘both enterprises’’ and 

24 inserting ‘‘all of the regulated entities’’; and 

25 (D) in paragraph (3)— 
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1 (i) in subparagraph (B), by striking 

2 ‘‘subparagraph (A)’’ and inserting ‘‘clause 

3 (i)’’; 

4 (ii) by redesignating subparagraphs 

5 (A), (B), and (C) as clauses (i), (ii) and 

6 (ii), respectively, and realigning such 

7 clauses, as so redesignated, so as to be in8 dented 6 ems from the left margin; 

9 (iii) by striking the matter that pre10 cedes clause (i), as so redesignated, and in11 serting the following: 

12 ‘‘(3) DEFINITION OF TOTAL ASSETS.—For pur13 poses of this section, the term ‘total assets’ means as 

14 follows: 

15 ‘‘(A) ENTERPRISES.—With respect to an en16 terprise, the sum of—’’; and 

17 (iv) by adding at the end the following 

18 new subparagraph: 

19 ‘‘(B) FEDERAL HOME LOAN BANKS.—With 

20 respect to a Federal home loan bank, the total 

21 assets of the Bank, as determined by the Director 

22 in accordance with generally accepted accounting 

23 principles.’’; 

24 (3) by striking subsection (c) and inserting the 

25 following new subsection: 
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1 ‘‘(c) INCREASED COSTS OF REGULATION.— 

2 ‘‘(1) INCREASE FOR INADEQUATE CAPITALIZA3 TION.—The semiannual payments made pursuant to 

4 subsection (b) by any regulated entity that is not 

5 classified (for purposes of subtitle B) as adequately 

6 capitalized may be increased, as necessary, in the dis7 cretion of the Director to pay additional estimated 

8 costs of regulation of the regulated entity. 

9 ‘‘(2) ADJUSTMENT FOR ENFORCEMENT ACTIVI10 TIES.—The Director may adjust the amounts of any 

11 semiannual assessments for an assessment under sub12 section (a) that are to be paid pursuant to subsection 

13 (b) by a regulated entity, as necessary in the discre14 tion of the Director, to ensure that the costs of enforce15 ment activities under subtitle B and C for a regulated 

16 entity are borne only by such regulated entity. 

17 ‘‘(3) ADDITIONAL ASSESSMENT FOR DEFI18 CIENCIES.—If at any time, as a result of increased 

19 costs of regulation of a regulated entity that is not 

20 classified (for purposes of subtitle B) as adequately 

21 captitalized or as the result of supervisory or enforce22 ment activities under subtitle B or C for a regulated 

23 entity, the amount available from any semiannual 

24 payment made by such regulated entity pursuant to 

25 subsection (b) is insufficient to cover the costs of the 
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1 Agency with respect to such entity, the Director may 

2 make and collect from such regulated entity an imme3 diate assessment to cover the amount of such defi4 ciency for the semiannual period. If, at the end of 

5 any semiannual period during which such an assess6 ment is made, any amount remains from such assess7 ment, such remaining amount shall be deducted from 

8 the assessment for such regulated entity for the fol9 lowing semiannual period.’’; 

10 (4) in subsection (d), by striking ‘‘If’’ and insert11 ing ‘‘Except with respect to amounts collected pursu12 ant to subsection (a)(3), if’’; and 

13 (5) by striking subsections (e) through (g) and 

14 inserting the following new subsections: 

15 ‘‘(e) WORKING CAPITAL FUND.—At the end of each 

16 year for which an assessment under this section is made, 

17 the Director shall remit to each regulated entity any 

18 amount of assessment collected from such regulated entity 

19 that is attributable to subsection (a)(3) and is in excess of 

20 the amount the Director deems necessary to maintain a 

21 working capital fund. 

22 ‘‘(f) TREATMENT OF ASSESSMENTS.— 

23 ‘‘(1) DEPOSIT.—Amounts received by the Direc24 tor from assessments under this section may be depos25 ited by the Director in the manner provided in sec-
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1 tion 5234 of the Revised Statutes (12 U.S.C. 192) for 

2 monies deposited by the Comptroller of the Currency. 

3 ‘‘(2) NOT GOVERNMENT FUNDS.—The amounts 

4 received by the Director from any assessment under 

5 this section shall not be construed to be Government 

6 or public funds or appropriated money. 

7 ‘‘(3) NO APPORTIONMENT OF FUNDS.—Notwith8 standing any other provision of law, the amounts re9 ceived by the Director from any assessment under this 

10 section shall not be subject to apportionment for the 

11 purpose of chapter 15 of title 31, United States Code, 

12 or under any other authority. 

13 ‘‘(4) USE OF FUNDS.—The Director may use any 

14 amounts received by the Director from assessments 

15 under this section for compensation of the Director 

16 and other employees of the Agency and for all other 

17 expenses of the Director and the Agency. 

18 ‘‘(5) AVAILABILITY OF OVERSIGHT FUND

19 AMOUNTS.—Notwithstanding any other provision of 

20 law, any amounts remaining in the Federal Housing 

21 Enterprises Oversight Fund established under this 

22 section (as in effect before the effective date under sec23 tion 185 of the Federal Housing Finance Reform Act 

24 of 2005), and any amounts remaining from assess25 ments on the Federal Home Loan banks pursuant to 
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1 section 18(b) of the Federal Home Loan Bank Act (12 

2 U.S.C. 1438(b)), shall, upon such effective date, be 

3 treated for purposes of this subsection as amounts re4 ceived from assessments under this section. 

5 ‘‘(g) BUDGET AND FINANCIAL MANAGEMENT.— 

6 ‘‘(1) FINANCIAL OPERATING PLANS AND FORE7 CASTS.—The Director shall provide to the Director of 

8 the Office of Management and Budget copies of the 

9 Director’s financial operating plans and forecasts as 

10 prepared by the Director in the ordinary course of the 

11 Agency’s operations, and copies of the quarterly re12 ports of the Agency’s financial condition and results 

13 of operations as prepared by the Director in the ordi14 nary course of the Agency’s operations. 

15 ‘‘(2) FINANCIAL STATEMENTS.—The Agency shall 

16 prepare annually a statement of assets and liabilities 

17 and surplus or deficit; a statement of income and ex18 penses; and a statement of sources and application of 

19 funds. 

20 ‘‘(3) FINANCIAL MANAGEMENT SYSTEMS.—The 

21 Agency shall implement and maintain financial 

22 management systems that comply substantially with 

23 Federal financial management systems requirements, 

24 applicable Federal accounting standards, and that 
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1 uses a general ledger system that accounts for activity 

2 at the transaction level. 

3 ‘‘(4) ASSERTION OF INTERNAL CONTROLS.—The 

4 Director shall provide to the Comptroller General an 

5 assertion as to the effectiveness of the internal controls 

6 that apply to financial reporting by the Agency, 

7 using the standards established in section 3512 (c) of 

8 title 31, United States Code. 

9 ‘‘(5) RULE OF CONSTRUCTION.—This subsection 

10 may not be construed as implying any obligation on 

11 the part of the Director to consult with or obtain the 

12 consent or approval of the Director of the Office of 

13 Management and Budget with respect to any reports, 

14 plans, forecasts, or other information referred to in 

15 paragraph (1) or any jurisdiction or oversight over 

16 the affairs or operations of the Agency. 

17 ‘‘(h) AUDIT OF AGENCY.— 

18 ‘‘(1) IN GENERAL.—The Comptroller General 

19 shall annually audit the financial transactions of the 

20 Agency in accordance with the U.S. generally accept21 ed government auditing standards as may be pre22 scribed by the Comptroller General of the United 

23 States. The audit shall be conducted at the place or 

24 places where accounts of the Agency are normally 

25 kept. The representatives of the Government Account-
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1 ability Office shall have access to the personnel and 

2 to all books, accounts, documents, papers, records (in3 cluding electronic records), reports, files, and all other 

4 papers, automated data, things, or property belonging 

5 to or under the control of or used or employed by the 

6 Agency pertaining to its financial transactions and 

7 necessary to facilitate the audit, and such representa8 tives shall be afforded full facilities for verifying 

9 transactions with the balances or securities held by 

10 depositaries, fiscal agents, and custodians. All such 

11 books, accounts, documents, records, reports, files, pa12 pers, and property of the Agency shall remain in pos13 session and custody of the Agency. The Comptroller 

14 General may obtain and duplicate any such books, 

15 accounts, documents, records, working papers, auto16 mated data and files, or other information relevant to 

17 such audit without cost to the Comptroller General 

18 and the Comptroller General’s right of access to such 

19 information shall be enforceable pursuant to section 

20 716(c) of title 31, United States Code. 

21 ‘‘(2) REPORT.—The Comptroller General shall 

22 submit to the Congress a report of each annual audit 

23 conducted under this subsection. The report to the 

24 Congress shall set forth the scope of the audit and 

25 shall include the statement of assets and liabilities 
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1 and surplus or deficit, the statement of income and 

2 expenses, the statement of sources and application of 

3 funds, and such comments and information as may 

4 be deemed necessary to inform Congress of the finan5 cial operations and condition of the Agency, together 

6 with such recommendations with respect thereto as the 

7 Comptroller General may deem advisable. A copy of 

8 each report shall be furnished to the President and to 

9 the Agency at the time submitted to the Congress. 

10 ‘‘(3) ASSISTANCE AND COSTS.—For the purpose 

11 of conducting an audit under this subsection, the 

12 Comptroller General may, in the discretion of the 

13 Comptroller General, employ by contract, without re14 gard to section 5 of title 41, United States Code, pro15 fessional services of firms and organizations of cer16 tified public accountants for temporary periods or for 

17 special purposes. Upon the request of the Comptroller 

18 General, the Director of the Agency shall transfer to 

19 the Government Accountability Office from funds 

20 available, the amount requested by the Comptroller 

21 General to cover the full costs of any audit and report 

22 conducted by the Comptroller General. The Comp23 troller General shall credit funds transferred to the 

24 account established for salaries and expenses of the 

25 Government Accountability Office, and such amount 
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1 shall be available upon receipt and without fiscal 

2 year limitation to cover the full costs of the audit and 

3 report.’’. 

4 SEC. 107. EXAMINERS AND ACCOUNTANTS. 

5 (a) EXAMINATIONS.—Section 1317 of the Housing and 

6 Community Development Act of 1992 (12 U.S.C. 4517) is 

7 amended—— 

8 (1) in subsection (a), by adding after the period 

9 at the end the following: ‘‘Each examination under 

10 this subsection of a regulated entity shall include a 

11 review of the procedures required to be established and 

12 maintained by the regulated entity pursuant to sec13 tion 1314(c) (relating to fraudulent financial trans14 actions) and the report regarding each such examina15 tion shall describe any problems with such procedures 

16 maintained by the regulated entity.’’; 

17 (2) in subsection (b)— 

18 (A) by inserting ‘‘of a regulated entity’’ 

19 after ‘‘under this section’’; and 

20 (B) by striking ‘‘to determine the condition 

21 of an enterprise for the purpose of ensuring its 

22 financial safety and soundness’’ and inserting 

23 ‘‘or appropriate’’ ; and 

24 (3) in subsection (c)— 
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1 (A) in the second sentence, by inserting ‘‘to 

2 conduct examinations under this section’’ before 

3 the period; and 

4 (B) in the third sentence, by striking ‘‘from 

5 amounts available in the Federal Housing En6 terprises Oversight Fund’’. 

7 (b) ENHANCED AUTHORITY TO HIRE EXAMINERS AND

8 ACCOUNTANTS.—Section 1317 of the Housing and Commu9 nity Development Act of 1992 (12 U.S.C. 4517) is amended 

10 by adding at the end the following new subsection: 

11 ‘‘(g) APPOINTMENT OF ACCOUNTANTS, ECONOMISTS, 

12 SPECIALISTS, AND EXAMINERS.— 

13 ‘‘(1) APPLICABILITY.—This section applies with 

14 respect to any position of examiner, accountant, spe15 cialist in financial markets, specialist in technology, 

16 and economist at the Agency, with respect to super17 vision and regulation of the regulated entities, that is 

18 in the competitive service. 

19 ‘‘(2) APPOINTMENT AUTHORITY.—The Director 

20 may appoint candidates to any position described in 

21 paragraph (1)— 

22 ‘‘(A) in accordance with the statutes, rules, 

23 and regulations governing appointments in the 

24 excepted service; and 
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1 ‘‘(B) notwithstanding any statutes, rules, 

2 and regulations governing appointments in the 

3 competitive service.’’. 

4 (c) REPEAL.—Section 20 of the Federal Home Loan 

5 Bank Act (12 U.S.C. 1440) is amended— 

6 (1) in the section heading, by striking ‘‘RE7 PORTS’’ and inserting ‘‘GAO AUDITS’’; 

8 (2) in the third sentence, by striking ‘‘the Board 

9 and’’ each place such term appears; and 

10 (3) by striking the first two sentences and insert11 ing the following: ‘‘The Federal home loan banks shall 

12 be subject to examinations by the Director to the ex13 tent provided in section 1317 of the Federal Housing 

14 Enterprises Financial Safety and Soundness Act of 

15 1992 (12 U.S.C. 4517).’’. 

16 SEC. 108. PROHIBITION AND WITHHOLDING OF EXECUTIVE 

17 COMPENSATION. 

18 (a) IN GENERAL.—Section 1318 of the Housing and 

19 Community Development Act of 1992 (12 U.S.C. 4518) is 

20 amended— 

21 (1) in the section heading, by striking ‘‘OF EX22 CESSIVE’’ and inserting ‘‘AND WITHHOLDING OF

23 EXECUTIVE’’; 

24 (2) by redesignating subsection (b) as subsection 

25 (d); and 
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1 (3) by inserting after subsection (a) the following 

2 new subsections: 

3 ‘‘(b) FACTORS.—In making any determination under 

4 subsection (a), the Director may take into consideration 

5 any factors the Director considers relevant, including any 

6 wrongdoing on the part of the executive officer, and such 

7 wrongdoing shall include any fraudulent act or omission, 

8 breach of trust or fiduciary duty, violation of law, rule, reg9 ulation, order, or written agreement, and insider abuse with 

10 respect to the regulated entity. The approval of an agree11 ment or contract pursuant to section 309(d)(3)(B) of the 

12 Federal National Mortgage Association Charter Act (12 

13 U.S.C. 1723a(d)(3)(B)) or section 303(h)(2) of the Federal 

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

15 1452(h)(2)) shall not preclude the Director from making 

16 any subsequent determination under subsection (a). 

17 ‘‘(c) WITHHOLDING OF COMPENSATION.—In carrying 

18 out subsection (a), the Director may require a regulated en19 tity to withhold any payment, transfer, or disbursement of 

20 compensation to an executive officer, or to place such com21 pensation in an escrow account, during the review of the 

22 reasonableness and comparability of compensation.’’. 

23 (b) CONFORMING AMENDMENTS.— 

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

25 National Mortgage Association Charter Act (12 
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1 U.S.C. 1723a(d)) is amended by adding at the end 

2 the following new paragraph: 

3 ‘‘(4) Notwithstanding any other provision of this sec4 tion, the corporation shall not transfer, disburse, or pay 

5 compensation to any executive officer, or enter into an 

6 agreement with such executive officer, without the approval 

7 of the Director, for matters being reviewed under section 

8 1318 of the Federal Housing Enterprises Financial Safety 

9 and Soundness Act of 1992 (12 U.S.C. 4518).’’. 

10 (2) FREDDIE MAC.—Section 303(h) of the Fed11 eral Home Loan Mortgage Corporation Act (12 

12 U.S.C. 1452(h)) is amended by adding at the end the 

13 following new paragraph: 

14 ‘‘(4) Notwithstanding any other provision of this sec15 tion, the Corporation shall not transfer, disburse, or pay 

16 compensation to any executive officer, or enter into an 

17 agreement with such executive officer, without the approval 

18 of the Director, for matters being reviewed under section 

19 1318 of the Federal Housing Enterprises Financial Safety 

20 and Soundness Act of 1992 (12 U.S.C. 4518).’’. 

21 (3) FEDERAL HOME LOAN BANKS.—Section 7 of 

22 the Federal Home Loan Bank Act (12 U.S.C. 1427) 

23 is amended by adding at the end the following new 

24 subsection: 
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1 ‘‘(l) WITHHOLDING OF COMPENSATION.—Notwith2 standing any other provision of this section, a Federal home 

3 loan bank shall not transfer, disburse, or pay compensation 

4 to any executive officer, or enter into an agreement with 

5 such executive officer, without the approval of the Director, 

6 for matters being reviewed under section 1318 of the Federal 

7 Housing Enterprises Financial Safety and Soundness Act 

8 of 1992 (12 U.S.C. 4518).’’. 

9 SEC. 109. REVIEWS OF REGULATED ENTITIES. 

10 Section 1319 of the Housing and Community Develop11 ment Act of 1992 (12 U.S.C. 4519) is amended— 

12 (1) by striking the section designation and head13 ing and inserting the following: 

14 ‘‘SEC. 1319. REVIEWS OF REGULATED ENTITIES.’’; and 

15 (2) by inserting after ‘‘any entity’’ the following: 

16 ‘‘that the Director considers appropriate, including 

17 an entity’’. 

18 SEC. 110. REGULATIONS AND ORDERS. 

19 Section 1319G of the Housing and Community Devel20 opment Act of 1992 (12 U.S.C. 4526) is amended— 

21 (1) by striking subsection (a) and inserting the 

22 following new subsection: 

23 ‘‘(a) AUTHORITY.—The Director shall issue any regu24 lations, guidelines, and orders necessary to carry out the 

25 duties of the Director under this title and each of the au-
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1 thorizing statutes to ensure that the purposes of this title 

2 and such Acts are accomplished.’’; 

3 (2) in subsection (b), by inserting ‘‘, this title, or 

4 any of the authorizing statutes’’ after ‘‘under this sec5 tion’’; and 

6 (3) by striking subsection (c). 

7 SEC. 111. RISK-BASED CAPITAL REQUIREMENTS. 

8 (a) IN GENERAL.—Section 1361 of the Housing and 

9 Community Development Act of 1992 (12 U.S.C. 4611) is 

10 amended to read as follows: 

11 ‘‘SEC. 1361. RISK-BASED CAPITAL LEVELS FOR REGULATED 

12 ENTITIES. 

13 ‘‘(a) IN GENERAL.— 

14 ‘‘(1) ENTERPRISES.—The Director shall, by reg15 ulation, establish risk-based capital requirements for 

16 the enterprises to ensure that the enterprises operate 

17 in a safe and sound manner, maintaining sufficient 

18 capital and reserves to support the risks that arise in 

19 the operations and management of the enterprises. 

20 ‘‘(2) FEDERAL HOME LOAN BANKS.—The Direc21 tor shall establish risk-based capital standards under 

22 section 6 of the Federal Home Loan Bank Act for the 

23 Federal home loan banks. 

24 ‘‘(b) CONFIDENTIALITY OF INFORMATION.—Any person 

25 that receives any book, record, or information from the Di-
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1 rector or a regulated entity to enable the risk-based capital 

2 requirements established under this section to be applied 

3 shall— 

4 ‘‘(1) maintain the confidentiality of the book, 

5 record, or information in a manner that is generally 

6 consistent with the level of confidentiality established 

7 for the material by the Director or the regulated enti8 ty; and 

9 ‘‘(2) be exempt from section 552 of title 5, 

10 United States Code, with respect to the book, record, 

11 or information. 

12 ‘‘(c) NO LIMITATION.—Nothing in this section shall 

13 limit the authority of the Director to require other reports 

14 or undertakings, or take other action, in furtherance of the 

15 responsibilities of the Director under this Act.’’. 

16 (b) FEDERAL HOME LOAN BANKS RISK-BASED CAP17 ITAL.—Section 6(a)(3) of the Federal Home Loan Bank Act 

18 (12 U.S.C. 1426(a)(3)) is amended— 

19 (1) by striking subparagraph (A) and inserting 

20 the following new subparagraph: 

21 ‘‘(A) RISK-BASED CAPITAL STANDARDS.— 

22 The Director shall, by regulation, establish risk23 based capital standards for the Federal home 

24 loan banks to ensure that the Federal home loan 

25 banks operate in a safe and sound manner, with 
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1 sufficient permanent capital and reserves to sup2 port the risks that arise in the operations and 

3 management of the Federal home loans banks.’’; 

4 and 

5 (2) in subparagraph (B), by striking ‘‘(A)(ii)’’ 

6 and inserting ‘‘(A)’’. 

7 SEC. 112. MINIMUM AND CRITICAL CAPITAL LEVELS. 

8 (a) MINIMUM CAPITAL LEVEL.—Section 1362 of the 

9 Housing and Community Development Act of 1992 (12 

10 U.S.C. 4612) is amended— 

11 (1) in subsection (a), by striking ‘‘IN GENERAL’’ 

12 and inserting ‘‘ENTERPRISES’’ ; and 

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

14 following new subsections: 

15 ‘‘(b) FEDERAL HOME LOAN BANKS.—For purposes of 

16 this subtitle, the minimum capital level for each Federal 

17 home loan bank shall be the minimum capital required to 

18 be maintained to comply with the leverage requirement for 

19 the bank established under section 6(a)(2) of the Federal 

20 Home Loan Bank Act (12 U.S.C. 1426(a)(2)). 

21 ‘‘(c) ESTABLISHMENT OF REVISED MINIMUM CAPITAL

22 LEVELS.—Notwithstanding subsections (a) and (b) and 

23 notwithstanding the capital classifications of the regulated 

24 entities, the Director may, by regulations issued under sec25 tion 1319G(b), establish a minimum capital level for the 
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1 enterprises, for the Federal home loan banks, or for both 

2 the enterprises and the banks, that is higher than the level 

3 specified in subsection (a) for the enterprises or the level 

4 specified in subsection (b) for the Federal home loan banks, 

5 to the extent needed to ensure that the regulated entities 

6 operate in a safe and sound manner. 

7 ‘‘(d) AUTHORITY TO REQUIRE TEMPORARY IN8 CREASE.—Notwithstanding subsections (a) and (b) and any 

9 minimum capital level established pursuant to subsection 

10 (c), the Director may, by order, increase the minimum cap11 ital level for a regulated entity for such period as the Direc12 tor may provide if the Director— 

13 ‘‘(1) makes any of the determinations specified 

14 in subparagraphs (A) through (C) of section 

15 1364(c)(1); or 

16 ‘‘(2) determines that the regulated entity has vio17 lated any of the prudential management and oper18 ations standards established pursuant to section 

19 1313A and, as a result of such violation, is operating 

20 in an unsafe and unsound manner. 

21 ‘‘(e) AUTHORITY TO ESTABLISH ADDITIONAL CAPITAL

22 AND RESERVE REQUIREMENTS FOR PARTICULAR PRO23 GRAMS.—The Director may, at any time by order or regula24 tion, establish such capital or reserve requirements with re25 spect to any program or activity of a regulated entity as 
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1 the Director considers appropriate to ensure that the regu2 lated entity operates in a safe and sound manner, with suf3 ficient capital and reserves to support the risks that arise 

4 in the operations and management of the regulated entity. 

5 ‘‘(f) PERIODIC REVIEW.—The Director shall periodi6 cally review the amount of core capital maintained by the 

7 enterprises, the amount of capital retained by the Federal 

8 home loan banks, and the minimum capital levels estab9 lished for such regulated entities pursuant to this section. 

10 The Director may, by regulations issued under section 

11 1319G(b), adjust the minimum capital levels as necessary, 

12 based on the Director’s review.’’. 

13 (b) CRITICAL CAPITAL LEVELS.— 

14 (1) IN GENERAL.—Section 1363 of the Housing 

15 and Community Development Act of 1992 (12 U.S.C. 

16 4613) is amended— 

17 (A) by striking ‘‘For’’ and inserting ‘‘(a) 

18 Enterprises.—For’’; and 

19 (B) by adding at the end the following new 

20 subsection: 

21 ‘‘(b) FEDERAL HOME LOAN BANKS.— 

22 ‘‘(1) IN GENERAL.—For purposes of this subtitle, 

23 the critical capital level for each Federal home loan 

24 bank shall be such amount of capital as the Director 

25 shall, by regulation require. 
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1 ‘‘(2) CONSIDERATION OF OTHER CRITICAL CAP2 ITAL LEVELS.—In establishing the critical capital 

3 level under paragraph (1) for the Federal home loan 

4 banks, the Director shall take due consideration of the 

5 critical capital level established under subsection (a) 

6 for the enterprises, with such modifications as the Di7 rector determines to be appropriate to reflect the dif8 ference in operations between the banks and the enter9 prises.’’. 

10 (2) REGULATIONS.—Not later than the expira11 tion of the 180-day period beginning on the effective 

12 date under section 185, the Director of the Federal 

13 Housing Finance Agency shall issue regulations pur14 suant to section 1363(b) of the Housing and Commu15 nity Development Act of 1992 (as added by para16 graph (1) of this subsection) establishing the critical 

17 capital level under such section. 

18 SEC. 113. REVIEW OF AND AUTHORITY OVER ENTERPRISE 

19 ASSETS AND LIABILITIES. 

20 Subtitle B of title XIII of the Housing and Community 

21 Development Act of 1992 (12 U.S.C. 4611 et seq.) is amend22 ed— 

23 (1) by striking the subtitle designation and head24 ing and inserting the following: 
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1 ‘‘Subtitle B—Required Capital Lev2 els for Regulated Entities, Spe3 cial Enforcement Powers, and 

4 Reviews of Assets and Liabil5 ities’’; and 

6 (2) by adding at the end the following new sec7 tion: 

8 ‘‘SEC. 1369E. REVIEWS OF ENTERPRISE ASSETS AND LIABIL9 ITIES. 

10 ‘‘(a) IN GENERAL.—The Director shall conduct, on a 

11 periodic basis, a review of the on-balance sheet and off-bal12 ance sheet assets and liabilities of each enterprise. 

13 ‘‘(b) AUTHORITY TO REQUIRE DISPOSITION OR ACQUI14 SITION.—Pursuant to such a review and notwithstanding 

15 the capital classifications of the enterprises, the Director 

16 may by order require an enterprise, under such terms and 

17 conditions as the Director determines to be appropriate, to 

18 dispose of or acquire any asset or liability, if the Director 

19 determines that such action is consistent with the safe and 

20 sound operation of the enterprise or with the purposes of 

21 this Act or any of the authorizing statutes.’’. 

22 SEC. 114. CORPORATE GOVERNANCE OF ENTERPRISES. 

23 The Housing and Community Development Act of 

24 1992 is amended by inserting before section 1323 (12 U.S.C. 

25 4543) the following new section: 
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1 ‘‘SEC. 1322A. CORPORATE GOVERNANCE OF ENTERPRISES. 

2 ‘‘(a) BOARD OF DIRECTORS.— 

3 ‘‘(1) INDEPENDENCE.—A majority of seated 

4 members of the board of directors of each enterprise 

5 shall be independent board members, as defined under 

6 rules set forth by the New York Stock Exchange, as 

7 such rules may be amended from time to time. 

8 ‘‘(2) FREQUENCY OF MEETINGS.—To carry out 

9 its obligations and duties under applicable laws, 

10 rules, regulations, and guidelines, the board of direc11 tors of an enterprise shall meet at least eight times a 

12 year and not less than once a calendar quarter. 

13 ‘‘(3) NON-MANAGEMENT BOARD MEMBER MEET14 INGS.—The non-management directors of an enter15 prise shall meet at regularly scheduled executive ses16 sions without management participation. 

17 ‘‘(4) QUORUM; PROHIBITION ON PROXIES.—For 

18 the transaction of business, a quorum of the board of 

19 directors of an enterprise shall be at least a majority 

20 of the seated board of directors and a board member 

21 may not vote by proxy. 

22 ‘‘(5) INFORMATION.—The management of an en23 terprise shall provide a board member of the enter24 prise with such adequate and appropriate informa25 tion that a reasonable board member would find im-
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1 portant to the fulfillment of his or her fiduciary du2 ties and obligations. 

3 ‘‘(6) ANNUAL REVIEW.—At least annually, the 

4 board of directors of each enterprise shall review, with 

5 appropriate professional assistance, the requirements 

6 of laws, rules, regulations, and guidelines that are ap7 plicable to its activities and duties. 

8 ‘‘(b) COMMITTEES OF BOARDS OF DIRECTORS.— 

9 ‘‘(1) FREQUENCY OF MEETINGS.—Any committee 

10 of the board of directors of an enterprise shall meet 

11 with sufficient frequency to carry out its obligations 

12 and duties under applicable laws, rules, regulations, 

13 and guidelines. 

14 ‘‘(2) REQUIRED COMMITTEES.—Each enterprise 

15 shall provide for the establishment, however styled, of 

16 the following committees of the board of directors: 

17 ‘‘(A) Audit committee. 

18 ‘‘(B) Compensation committee. 

19 ‘‘(C) Nominating/corporate governance com20 mittee. 

21 Such committees shall be in compliance with the 

22 charter, independence, composition, expertise, duties, 

23 responsibilities, and other requirements set forth 

24 under section 10A(m) of the Securities Exchange Act 

25 of 1934 (15 U.S.C. 78j–1(m)), with respect to the 
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1 audit committee, and under rules issued by the New 

2 York Stock Exchange, as such rules may be amended 

3 from time to time. 

4 ‘‘(c) COMPENSATION.— 

5 ‘‘(1) IN GENERAL.—The compensation of board 

6 members, executive officers, and employees of an en7 terprise— 

8 ‘‘(A) shall not be in excess of that which is 

9 reasonable and appropriate; 

10 ‘‘(B) shall be commensurate with the duties 

11 and responsibilities of such persons, 

12 ‘‘(C) shall be consistent with the long-term 

13 goals of the enterprise; 

14 ‘‘(D) shall not focus solely on earnings per15 formance, but shall take into account risk man16 agement, operational stability and legal and reg17 ulatory compliance as well; and 

18 ‘‘(E) shall be undertaken in a manner that 

19 complies with applicable laws, rules, and regula20 tions. 

21 ‘‘(2) REIMBURSEMENT.—If an enterprise is re22 quired to prepare an accounting restatement due to 

23 the material noncompliance of the enterprise, as a re24 sult of misconduct, with any financial reporting re25 quirement under the securities laws, the chief execu-
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1 tive officer and chief financial officer of the enterprise 

2 shall reimburse the enterprise as provided under sec3 tion 304 of the Sarbanes-Oxley Act of 2002 (15 

4 U.S.C. 7243). This provision does not otherwise limit 

5 the authority of the Agency to employ remedies avail6 able to it under its enforcement authorities. 

7 ‘‘(d) CODE OF CONDUCT AND ETHICS.— 

8 ‘‘(1) IN GENERAL.—An enterprise shall establish 

9 and administer a written code of conduct and ethics 

10 that is reasonably designed to assure the ability of 

11 board members, executive officers, and employees of 

12 the enterprise to discharge their duties and respon13 sibilities, on behalf of the enterprise, in an objective 

14 and impartial manner, and that includes standards 

15 required under section 406 of the Sarbanes-Oxley Act 

16 of 2002 (15 U.S.C. 7264) and other applicable laws, 

17 rules, and regulations. 

18 ‘‘(2) REVIEW.—Not less than once every three 

19 years, an enterprise shall review the adequacy of its 

20 code of conduct and ethics for consistency with prac21 tices appropriate to the enterprise and make any ap22 propriate revisions to such code. 

23 ‘‘(e) CONDUCT AND RESPONSIBILITIES OF BOARD OF

24 DIRECTORS.—The board of directors of an enterprise shall 

25 be responsible for directing the conduct and affairs of the 
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1 enterprise in furtherance of the safe and sound operation 

2 of the enterprise and shall remain reasonably informed of 

3 the condition, activities, and operations of the enterprise. 

4 The responsibilities of the board of directors shall include 

5 having in place adequate policies and procedures to assure 

6 its oversight of, among other matters, the following: 

7 ‘‘(1) Corporate strategy, major plans of action, 

8 risk policy, programs for legal and regulatory compli9 ance and corporate performance, including prudent 

10 plans for growth and allocation of adequate resources 

11 to manage operations risk. 

12 ‘‘(2) Hiring and retention of qualified executive 

13 officers and succession planning for such executive of14 ficers. 

15 ‘‘(3) Compensation programs of the enterprise. 

16 ‘‘(4) Integrity of accounting and financial re17 porting systems of the enterprise, including inde18 pendent audits and systems of internal control. 

19 ‘‘(5) Process and adequacy of reporting, disclo20 sures, and communications to shareholders, investors, 

21 and potential investors. 

22 ‘‘(6) Extensions of credit to board members and 

23 executive officers. 

24 ‘‘(7) Responsiveness of executive officers in pro25 viding accurate and timely reports to Federal regu-
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1 lators and in addressing the supervisory concerns of 

2 Federal regulators in a timely and appropriate man3 ner. 

4 ‘‘(f) PROHIBITION OF EXTENSIONS OF CREDIT.—An 

5 enterprise may not directly or indirectly, including through 

6 any subsidiary, extend or maintain credit, arrange for the 

7 extension of credit, or renew an extension of credit, in the 

8 form of a personal loan to or for any board member or exec9 utive officer of the enterprise, as provided by section 13(k) 

10 of the Securities Exchange Act of 1934 (15 U.S.C. 78m(k)). 

11 ‘‘(g) CERTIFICATION OF DISCLOSURES.—The chief ex12 ecutive officer and the chief financial officer of an enterprise 

13 shall review each quarterly report and annual report issued 

14 by the enterprise and such reports shall include certifi15 cations by such officers as required by section 302 of the 

16 Sarbanes-Oxley Act of 2002 (15 U.S.C. 7241). 

17 ‘‘(h) CHANGE OF AUDIT PARTNER.—An enterprise 

18 may not accept audit services from an external auditing 

19 firm if the lead or coordinating audit partner who has pri20 mary responsibility for the external audit of the enterprise, 

21 or the external audit partner who has responsibility for re22 viewing the external audit has performed audit services for 

23 the enterprise in each of the five previous fiscal years. 

24 ‘‘(i) COMPLIANCE PROGRAM.— 
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1 ‘‘(1) REQUIREMENT.—Each enterprise shall es2 tablish and maintain a compliance program that is 

3 reasonably designed to assure that the enterprise com4 plies with applicable laws, rules, regulations, and in5 ternal controls. 

6 ‘‘(2) COMPLIANCE OFFICER.—The compliance 

7 program of an enterprise shall be headed by a compli8 ance officer, however styled, who reports directly to 

9 the chief executive officer of the enterprise. The com10 pliance officer shall report regularly to the board of 

11 directors or an appropriate committee of the board of 

12 directors on compliance with and the adequacy of 

13 current compliance policies and procedures of the en14 terprise, and shall recommend any adjustments to 

15 such policies and procedures that the compliance offi16 cer considers necessary and appropriate. 

17 ‘‘(j) RISK MANAGEMENT PROGRAM.— 

18 ‘‘(1) REQUIREMENT.—Each enterprise shall es19 tablish and maintain a risk management program 

20 that is reasonably designed to manage the risks of the 

21 operations of the enterprise. 

22 ‘‘(2) RISK MANAGEMENT OFFICER.—The risk 

23 management program of an enterprise shall be headed 

24 by a risk management officer, however styled, who re25 ports directly to the chief executive officer of the enter-
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1 prise. The risk management officer shall report regu2 larly to the board of directors or an appropriate com3 mittee of the board of directors on compliance with 

4 and the adequacy of current risk management policies 

5 and procedures of the enterprise, and shall rec6 ommend any adjustments to such policies and proce7 dures that the risk management officer considers nec8 essary and appropriate. 

9 ‘‘(k) COMPLIANCE WITH OTHER LAWS.— 

10 ‘‘(1) DEREGISTERED OR UNREGISTERED COM11 MON STOCK.—If an enterprise deregisters or has not 

12 registered its common stock with the Securities and 

13 Exchange Commission under the Securities Exchange 

14 Act of 1934, the enterprise shall comply or continue 

15 to comply with sections 10A(m) and 13(k) of the Se16 curities Exchange Act of 1934 (15 U.S.C. 78j-1(m), 

17 78m(k)) and sections 302, 304, and 406 of the Sar18 banes-Oxley Act of 2002 (15 U.S.C. 7241, 7243, 

19 7264), subject to such requirements as provided by 

20 subsection (l) of this section. 

21 ‘‘(2) REGISTERED COMMON STOCK.—An enter22 prise that has its common stock registered with the 

23 Securities and Exchange Commission shall maintain 

24 such registered status, unless it provides 60 days 

25 prior written notice to the Director stating its intent 
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1 to deregister and its understanding that it will re2 main subject to the requirements of the sections of the 

3 Securities Exchange Act of 1934 and the Sarbanes4 Oxley Act of 2002, subject to such requirements as 

5 provided by subsection (l) of this section. 

6 ‘‘(l) OTHER MATTERS.—The Director may from time 

7 to time establish standards, by regulation, order, or guide8 line, regarding such other corporate governance matters of 

9 the enterprises as the Director considers appropriate. 

10 ‘‘(m) MODIFICATION OF STANDARDS.—In connection 

11 with standards of Federal or State law (including the Re12 vised Model Corporation Act) or New York Stock Exchange 

13 rules that are made applicable to an enterprise by section 

14 1710.10 of the Director’s rules (12 C.F.R. 1710.10) and by 

15 subsections (a), (b), (g), (i), (j), and (k) of this section, the 

16 Director, in the Director’s sole discretion, may modify the 

17 standards contained in this section or in part 1710 of the 

18 Director’s rules (12 U.S.C. Part 1710) in accordance with 

19 section 553 of title 5, United States Code, and upon written 

20 notice to the enterprise.’’. 

21 SEC. 115. REQUIRED REGISTRATION UNDER SECURITIES 

22 EXCHANGE ACT OF 1934. 

23 The Housing and Community Development Act of 

24 1992 is amended by adding after section 1322A, as added 
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1 by the preceding provisions of this Act, the following new 

2 section: 

3 ‘‘SEC. 1322B. REQUIRED REGISTRATION UNDER SECURITIES 

4 EXCHANGE ACT OF 1934. 

5 ‘‘(a) IN GENERAL.—Each regulated entity shall reg6 ister at least one class of the capital stock of such regulated 

7 entity, and maintain such registration with the Securities 

8 and Exchange Commission, under the Securities Exchange 

9 Act of 1934. 

10 ‘‘(b) ENTERPRISES.—Each enterprise shall comply 

11 with sections 14 and 16 of the Securities Exchange Act of 

12 1934.’’. 

13 SEC. 116. FINANCIAL INSTITUTIONS EXAMINATION COUN14 CIL. 

15 The Federal Financial Institutions Examination 

16 Council Act of 1978 is amended— 

17 (1) in section 1003 (12 U.S.C. 3302)— 

18 (A) in paragraph (1), by inserting ‘‘Direc19 tor of the Federal Housing Finance Agency,’’ 

20 after ‘‘Supervision,’’; and 

21 (B) in paragraph (3), by striking ‘‘or a 

22 credit union;’’ and inserting ‘‘a credit union, or 

23 a regulated entity (as such term is defined in 

24 section 1303 of the Housing and Community De25 velopment Act of 1992 (12 U.S.C. 4502)).’’; 
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1 (2) in section 1004 (12 U.S.C. 3303)— 

2 (A) in paragraph (4), by inserting a semi3 colon at the end; 

4 (B) by redesignating paragraph (5) as 

5 paragraph (6); and 

6 (C) by inserting after paragraph (4) the fol7 lowing new paragraph: 

8 ‘‘(5) the Director of the Federal Housing Finance 

9 Agency; and’’; and 

10 (3) in section 1006(d) (12 U.S.C. 3305(d)), by 

11 striking ‘‘and employees of the Federal Housing Fi12 nance Board’’. 

13 SEC. 117. GUARANTEE FEE STUDY. 

14 (a) IN GENERAL.—The Comptroller General of the 

15 United States, in consultation with the heads of the federal 

16 banking agencies and the Director of the Office of Federal 

17 Housing Enterprise Oversight of the Department of Hous18 ing and Urban Development, shall, not later than one year 

19 after the date of the enactment of this Act, submit to the 

20 Congress a study concerning the pricing, transparency and 

21 reporting of the Federal National Mortgage Association, the 

22 Federal Home Loan Mortgage Corporation, and the Federal 

23 home loan banks with regard to guarantee fees and con24 cerning analogous practices, transparency and reporting 

25 requirements (including advances pricing practices by the 
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1 Federal Home Loan Banks) of other participants in the 

2 business of mortgage purchases and securitization. 

3 (b) FACTORS.—The study required by this section shall 

4 examine various factors such as credit risk, counterparty 

5 risk considerations, economic value considerations, and vol6 ume considerations used by the regulated entities (as such 

7 term is defined in section 1303 of the Housing and Commu8 nity Development Act of 1992) included in the study in 

9 setting the amount of fees they charge. 

10 (c) CONTENTS OF REPORT.—The report required 

11 under subsection (a) shall identify and analyze— 

12 (1) the factors used by each enterprise (as such 

13 term is defined in section 1303 of the Housing and 

14 Community Development Act of 1992) in determining 

15 the amount of the guarantee fees it charges; 

16 (2) the total revenue the enterprises earn from 

17 guarantee fees; 

18 (3) the total costs incurred by the enterprises for 

19 providing guarantees; 

20 (4) the average guarantee fee charged by the en21 terprises; 

22 (5) an analysis of how and why the guarantee 

23 fees charged differ from such fees charged during the 

24 previous year; 
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1 (6) a breakdown of the revenue and costs associ2 ated with providing guarantees, based on product 

3 type and risk classifications; and 

4 (7) other relevant information on guarantee fees 

5 with other participants in the mortgage and 

6 securitization business. 

7 (d) PROTECTION OF INFORMATION.—Nothing in this 

8 section may be construed to require or authorize the Govern9 ment Accounting Office, in connection with the study man10 dated by this section, to disclose information of the enter11 prises or other organization that is confidential or propri12 etary. 

13 SEC. 118. CONFORMING AMENDMENTS. 

14 (a) 1992 Act.—Part 1 of subtitle A of title XIII of 

15 the Housing and Community Development Act of 1992 (12 

16 U.S.C. 4511 et seq.), as amended by the preceding provi17 sions of this Act, is further amended— 

18 (1) by striking ‘‘an enterprise’’ each place such 

19 term appears in such part (except in sections 

20 1313(a)(2)(A), 1313A(b)(2)(B)(ii)(I), and 1316(b)(3)) 

21 and inserting ‘‘a regulated entity’’; 

22 (2) by striking ‘‘the enterprise’’ each place such 

23 term appears in such part (except in section 

24 1316(b)(3)) and inserting ‘‘the regulated entity’’; 
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1 (3) by striking ‘‘the enterprises’’ each place such 

2 term appears in such part (except in sections 

3 1312(c)(2), 1312(e)(2), and 1319B(a)(4)(D)) and in4 serting ‘‘the regulated entities’’; 

5 (4) by striking ‘‘each enterprise’’ each place such 

6 term appears in such part and inserting ‘‘each regu7 lated entity’’; 

8 (5) by striking ‘‘Office’’ each place such term ap9 pears in such part (except in sections 1312(b)(5), 

10 1315(b), and 1316(g), and section 1317(c)) and in11 serting ‘‘Agency’’; 

12 (6) in section 1315 (12 U.S.C. 4515)— 

13 (A) in subsection (a)— 

14 (i) in the subsection heading, by strik15 ing ‘‘Office Personnel’’ and inserting ‘‘In 

16 General’’; and 

17 (ii) by striking ‘‘The’’ and inserting 

18 ‘‘Subject to titles III and IV of the Federal 

19 Housing Finance Reform Act of 2005, the’’; 

20 (B) by striking subsections (d) and (f); and 

21 (C) by redesignating subsection (e) as sub22 section (d); 

23 (7) in section 1319A (12 U.S.C. 4520)— 
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1 (A) by striking ‘‘(a) In General.—Each en2 terprise’’ and inserting ‘‘Each regulated entity’’; 

3 and 

4 (B) by striking subsection (b); 

5 (8) in section 1319B (12 U.S.C. 4521), by strik6 ing ‘‘Committee on Banking, Finance and Urban Af7 fairs’’ each place such term appears and inserting 

8 ‘‘Committee on Financial Services’’; and 

9 (9) in section 1319F (12 U.S.C. 4525), striking 

10 all that follows ‘‘United States Code’’ and inserting ‘‘, 

11 the Agency shall be considered an agency responsible 

12 for the regulation or supervision of financial institu13 tions.’’. 

14 (b) AMENDMENTS TO FANNIE MAE CHARTER ACT.— 

15 The Federal National Mortgage Association Charter Act (12 

16 U.S.C. 1716 et seq.) is amended— 

17 (1) by striking ‘‘Director of the Office of Federal 

18 Housing Enterprise Oversight of the Department of 

19 Housing and Urban Development’’ each place such 

20 term appears, and inserting ‘‘Director of the Federal 

21 Housing Finance Agency’’, in— 

22 (A) section 303(c)(2) (12 U.S.C. 

23 1718(c)(2)); 

24 (B) section 309(d)(3)(B) (12 U.S.C. 

25 1723a(d)(3)(B)); and 
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1 (C) section 309(k)(1); and 

2 (2) in section 309— 

3 (A) in subsections (d)(3)(A) and (n)(1), by 

4 striking ‘‘Banking, Finance and Urban Affairs’’ 

5 each place such term appears and inserting ‘‘Fi6 nancial Services’’; and 

7 (B) in subsection (m)— 

8 (i) in paragraph (1), by striking ‘‘Sec9 retary’’ the second place such term appears 

10 and inserting ‘‘Director’’; 

11 (ii) in paragraph (2), by striking 

12 ‘‘Secretary’’ the second place such term ap13 pears and inserting ‘‘Director’’; and 

14 (iii) by striking ‘‘Secretary’’ each other 

15 place such term appears and inserting ‘‘Di16 rector of the Federal Housing Finance 

17 Agency’’; and 

18 (C) in subsection (n), by striking ‘‘Sec19 retary’’ each place such term appears and insert20 ing ‘‘Director of the Federal Housing Finance 

21 Agency’’. 

22 (c) AMENDMENTS TO FREDDIE MAC ACT.—The Fed23 eral Home Loan Mortgage Corporation Act is amended— 

24 (1) by striking ‘‘Director of the Office of Federal 

25 Housing Enterprise Oversight of the Department of 
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1 Housing and Urban Development’’ each place such 

2 term appears, and inserting ‘‘Director of the Federal 

3 Housing Finance Agency’’, in— 

4 (A) section 303(b)(2) (12 U.S.C. 

5 1452(b)(2)); 

6 (B) section 303(h)(2) (12 U.S.C. 

7 1452(h)(2)); and 

8 (C) section 307(c)(1) (12 U.S.C. 

9 1456(c)(1)); 

10 (2) in sections 303(h)(1) and 307(f)(1) (12 

11 U.S.C. 1452(h)(1), 1456(f)(1)), by striking ‘‘Banking, 

12 Finance and Urban Affairs’’ each place such term ap13 pears and inserting ‘‘Financial Services’’; 

14 (3) in section 306(i) (12 U.S.C. 1455(i))— 

15 (A) by striking ‘‘1316(c)’’ and inserting 

16 ‘‘306(c)’’; and 

17 (B) by striking ‘‘section 106’’ and inserting 

18 ‘‘section 1316’’; and 

19 (4) in section 307 (12 U.S.C. 1456))— 

20 (A) in subsection (e)— 

21 (i) in paragraph (1), by striking ‘‘Sec22 retary’’ the second place such term appears 

23 and inserting ‘‘Director’’; 
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1 (ii) in paragraph (2), by striking 

2 ‘‘Secretary’’ the second place such term ap3 pears and inserting ‘‘Director’’; and 

4 (iii) by striking ‘‘Secretary’’ each other 

5 place such term appears and inserting ‘‘Di6 rector of the Federal Housing Finance 

7 Agency’’; and 

8 (B) in subsection (f), by striking ‘‘Sec9 retary’’ each place such term appears and insert10 ing ‘‘Director of the Federal Housing Finance 

11 Agency’’. 

12 Subtitle B—Improvement of Mission 

13 Supervision 

14 SEC. 121. TRANSFER OF PROGRAM AND ACTIVITIES AP15 PROVAL AND HOUSING GOAL OVERSIGHT. 

16 Part 2 of subtitle A of title XIII of the Housing and 

17 Community Development Act of 1992 (12 U.S.C. 4541 et 

18 seq.) is amended— 

19 (1) by striking the designation and heading for 

20 the part and inserting the following: 

21 ‘‘PART 2—PROGRAM AND ACTIVITIES APPROVAL 

22 BY DIRECTOR, CORPORATE GOVERNANCE, 

23 AND ESTABLISHMENT OF HOUSING GOALS’’; 

24 and 

25 (2) by striking sections 1321 and 1322. 
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1 SEC. 122. REVIEW BY DIRECTOR OF NEW PROGRAMS AND 

2 ACTIVITIES OF ENTERPRISES. 

3 (a) IN GENERAL.—Part 2 of subtitle A of title XIII 

4 of the Housing and Community Development Act of 1992 

5 is amended by inserting before section 1323 (12 U.S.C. 

6 4543) the following new section: 

7 ‘‘SEC. 1321. REVIEW AND APPROVAL BY DIRECTOR OF NEW 

8 PROGRAMS AND BUSINESS ACTIVITIES OF 

9 ENTERPRISES. 

10 ‘‘(a) LIMITATION ON AUTHORITY TO UNDERTAKE PRO11 GRAMS AND ACTIVITIES.—An enterprise may not undertake 

12 any new program, including a pilot program, or any new 

13 business activity except in accordance with the procedures 

14 set forth in this section and orders and regulations issued 

15 under this section. 

16 ‘‘(b) NEW PROGRAMS.— 

17 ‘‘(1) PRIOR APPROVAL REQUIREMENT.—An en18 terprise may not commence any new program before 

19 it has obtained the approval of the Director, pursuant 

20 to this subsection, for the new program. 

21 ‘‘(2) APPLICATION.—The Director shall, by order 

22 or regulation, require that an enterprise shall, to ob23 tain a determination by the Director regarding ap24 proval of a new program by the enterprise, submit to 

25 the Director a written application for the new pro26 gram in a format as prescribed by the Director. 
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1 ‘‘(3) NOTICE.—Immediately upon receipt of a 

2 complete application for a new program, the Director 

3 shall cause to be published in the Federal Register no4 tice of the receipt of such application and of the pe5 riod for public comment pursuant to paragraph (4) 

6 regarding such new program, and a description of the 

7 new program proposed by the application. 

8 ‘‘(4) PUBLIC COMMENT PERIOD.—During the 30- 

9 day period beginning upon publication pursuant to 

10 paragraph (3) of a notice regarding such an applica11 tion, the Director shall receive public comments re12 garding the new program. 

13 ‘‘(5) DETERMINATION.—Not less than 15 days 

14 after the conclusion of the public comment period 

15 pursuant to paragraph (4) regarding an application 

16 but not more than 30 days after the conclusion of 

17 such comment period, the Director shall approve, con18 ditionally approve, or reject such program, in writ19 ing. 

20 ‘‘(6) STANDARD FOR APPROVAL.—The Director 

21 may approve, or conditionally approve, a new pro22 gram of an enterprise only if the Director determines, 

23 taking into consideration any relevant information 

24 and comments received during the public comment 

25 period, that such new program— 
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1 ‘‘(A) does not contravene and is not incon2 sistent with the purposes of this title, the Federal 

3 National Mortgage Association Charter Act, or 

4 the Federal Home Loan Mortgage Corporation 

5 Act, as such purposes are determined taking into 

6 consideration the definitions of the terms ‘mort7 gage loan origination’ and ‘secondary mortgage 

8 market’ pursuant to section 1303; 

9 ‘‘(B) is not otherwise inconsistent with the 

10 safety and soundness of the enterprise; and 

11 ‘‘(C) is in the public interest. 

12 ‘‘(7) LIMITATION.—The Director, in imple13 menting this subsection, may not prevent an enter14 prise from continuing to offer the automated loan un15 derwriting system in existence on the date of the en16 actment of the Federal Housing Finance Reform Act 

17 of 2005 or continuing to engage in counseling and 

18 education activities. 

19 ‘‘(c) NEW BUSINESS ACTIVITIES.— 

20 ‘‘(1) AUTHORITY OF DIRECTOR TO PROHIBIT

21 NEW BUSINESS ACTIVITIES.—The Director shall have 

22 authority to prohibit any new business activity by an 

23 enterprise if the Director determines, in writing, that 

24 such activity— 
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1 ‘‘(A) contravenes or is inconsistent with the 

2 purposes of this title, the Federal National Mort3 gage Association Charter Act, or the Federal 

4 Home Loan Mortgage Corporation Act; 

5 ‘‘(B) is otherwise inconsistent with the safe6 ty and soundness of the enterprise; or 

7 ‘‘(C) is not in the public interest. 

8 ‘‘(2) NOTIFICATION OF NEW BUSINESS ACTIVI9 TIES.—An enterprise that undertakes any new busi10 ness activity shall provide written notice of the activ11 ity to the Director and may commence the new busi12 ness activity only in accordance with paragraph (4). 

13 ‘‘(3) DIRECTOR DETERMINATION OF APPLICABLE

14 PROCEDURE.— 

15 ‘‘(A) TIMING.—Immediately upon receipt of 

16 any notice under paragraph (2) regarding a new 

17 business activity, the Director shall undertake a 

18 determination under subparagraph (B) of this 

19 paragraph regarding the new business activity. 

20 ‘‘(B) DETERMINATION AND TREATMENT AS

21 NEW PROGRAM.—If the Director determines that 

22 any new business activity consists of, relates to, 

23 or involves any new program— 

24 ‘‘(i) the Director shall notify the enter25 prise of the determination; 
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1 ‘‘(ii) the new business activity de2 scribed in the notice shall be considered a 

3 new program for purposes of this section; 

4 and 

5 ‘‘(iii) the Director shall prohibit the 

6 enterprise from carrying out the activity ex7 cept to the extent that approval for the ac8 tivity is obtained pursuant to subsection 

9 (b). 

10 ‘‘(4) COMMENCEMENT.—An enterprise may com11 mence a new business activity— 

12 ‘‘(A) if the Director issues a written ap13 proval regarding such new business activity, im14 mediately upon such issuance or at such other 

15 time as provided by the Director in such letter; 

16 or 

17 ‘‘(B) if, during the 30-day period beginning 

18 upon receipt by the Director of notice pursuant 

19 to paragraph (2) regarding a new business activ20 ity, the Director has not issued to the enterprise 

21 a written approval or denial of the new business 

22 activity, upon the expiration of such 30-day pe23 riod. 

24 ‘‘(d) APPROVAL AND CONDITIONAL APPROVAL.—The 

25 Director may at any time conditionally approve the under-
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1 taking of a particular new program or new business activ2 ity by an enterprise and set forth the terms and conditions 

3 that apply to the program or activity with which the enter4 prise shall comply if it undertakes the new program or ac5 tivity. Such approval may, in the discretion of the Director, 

6 be in the form of a written agreement between the enterprise 

7 and the Director and shall be subject to such terms and 

8 conditions therein. Such a written agreement or conditional 

9 approval shall be enforceable under subtitle C. 

10 ‘‘(e) DETERMINATION AND TREATMENT OF ACTIVITY

11 AS NEW BUSINESS ACTIVITY.—If the Director determines 

12 that any activity of an enterprise consists of, relates to, or 

13 involves any new business activity— 

14 ‘‘(1) the Director shall notify the enterprise of 

15 the determination; 

16 ‘‘(2) such activity shall be considered a new busi17 ness activity for purposes of this section; and 

18 ‘‘(3) the Director shall prohibit the enterprise 

19 from carrying out the activity except to the extent 

20 that approval for the activity is obtained pursuant to 

21 subsection (c). 

22 ‘‘(f) EFFECT ON OTHER AUTHORITIES.— 

23 ‘‘(1) EXAMINATIONS.—Nothing in this section 

24 may be construed to limit, in any manner, any other 

25 authority or right the Director may have under other 
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1 provisions of law to conduct an examination of an 

2 enterprise. 

3 ‘‘(2) REQUESTS FOR INFORMATION.—Nothing in 

4 this section may be construed to limit the right of the 

5 Director at any time to request additional informa6 tion from an enterprise concerning any business ac7 tivity. 

8 ‘‘(3) NO IMPLIED RIGHT OF ACTION.—This sec9 tion shall not create any private right of action 

10 against an enterprise or any director or executive of11 ficer of an enterprise, or impair any private right of 

12 action under other applicable law. 

13 ‘‘(4) NO LIMITATION.—Nothing in this section 

14 may be construed to restrict the general supervisory 

15 and regulatory authority of the Director over all pro16 grams, products, activities, or business operations of 

17 any kind. 

18 ‘‘(g) REPORT ON PROGRAMS AND BUSINESS ACTIVI19 TIES.—Not later than the expiration of the 180-day period 

20 beginning on the effective date under section 185 of the Fed21 eral Housing Finance Reform Act of 2005, each enterprise 

22 shall submit to the Director a report identifying and de23 scribing each program and business activity of the enter24 prise engaged in or existing as of the submission of the re25 port. 
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1 ‘‘(h) REGULATIONS.—The Director shall by order or 

2 regulation issue rules and procedures to implement this sec3 tion, including in the discretion of the Director, such defini4 tions, interpretations, forms, and other guidances as the Di5 rector considers appropriate.’’. 

6 (b) DEFINITIONS.—Section 1303 of the Housing and 

7 Community Development Act of 1992 (12 U.S.C. 4502), as 

8 amended by section 2 of this Act, is further amended— 

9 (1) by redesignating paragraphs (17) through 

10 (23) as paragraphs (20) through (26), respectively; 

11 (2) by inserting after paragraph (16) the fol12 lowing new paragraph: 

13 ‘‘(19) NEW BUSINESS ACTIVITY.—The term ‘new 

14 business activity’ means, with respect to an enter15 prise, a business activity that— 

16 ‘‘(A) is materially changed or materially 

17 different from any of the business activities that 

18 the enterprise was engaging in on the effective 

19 date under section 185 of the Federal Housing 

20 Finance Reform Act of 2005; and 

21 ‘‘(B) the enterprise has not previously ob22 tained authorization, pursuant to the provisions 

23 of section 1321(c), to offer, undertake, transact, 

24 conduct, or engage in.’’; 
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1 (3) by redesignating paragraphs (15) and (16) 

2 as paragraphs (17) and (18), respectively; 

3 (4) by inserting after paragraph (14) the fol4 lowing new paragraph: 

5 ‘‘(16) MORTGAGE MARKETS.—The terms ‘mort6 gage loan origination’ and ‘secondary mortgage mar7 ket’ shall have such meanings as the Director shall, by 

8 regulation, prescribe consistent with the Federal Na9 tional Mortgage Association Charter Act and the Fed10 eral Home Loan Mortgage Corporation Act. The Di11 rector shall issue such regulations not later than the 

12 expiration of the 12-month period beginning on the 

13 effective date under section 185 of the Federal Hous14 ing Finance Reform Act of 2005, and the Director 

15 shall review such regulations on a periodic basis.’’; 

16 (5) by redesignating paragraphs (5) through (14) 

17 as paragraphs (6) through (15), respectively; and 

18 (6) by inserting after paragraph (4) the fol19 lowing new paragraph: 

20 ‘‘(5) BUSINESS ACTIVITY.—The term ‘business 

21 activity’ means, with respect to an enterprise, any of22 fering, undertaking, transacting, conducting, or en23 gaging in any conduct, activity, or product by the en24 terprise, as the Director shall provide.’’. 

25 (c) CONFORMING AMENDMENTS.— 
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1 (1) FANNIE MAE.—Section 302(b)(6) of the Fed2 eral National Mortgage Association Charter Act (12 

3 U.S.C. 1717(b)(6)) is amended— 

4 (A) by striking ‘‘new program (as such term 

5 is’’ and inserting ‘‘new program or new business 

6 activity (as such terms are’’; and 

7 (B) by striking ‘‘before obtaining the ap8 proval of the Secretary under section 1322’’ and 

9 inserting ‘‘except in accordance with section 

10 1321’’. 

11 (2) FREDDIE MAC.—Section 305(c) of the Fed12 eral Home Loan Mortgage Corporation Act (12 

13 U.S.C. 1454(c)) is amended— 

14 (A) by striking ‘‘new program (as such term 

15 is’’ and inserting ‘‘new program or new business 

16 activity (as such terms are’’; and 

17 (B) by striking ‘‘before obtaining the ap18 proval of the Secretary under section 1322’’ and 

19 inserting ‘‘except in accordance with section 

20 1321’’. 

21 SEC. 123. CONFORMING LOAN LIMITS. 

22 (a) FANNIE MAE.— 

23 (1) GENERAL LIMIT.—Section 302(b)(2) of the 

24 Federal National Mortgage Association Charter Act 

25 (12 U.S.C. 1717(b)(2)) is amended by striking the 7th 
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1 and 8th sentences and inserting the following new 

2 sentences: ‘‘Such limitations shall not exceed $359,650 

3 for a mortgage secured by a single-family residence, 

4 $460,400 for a mortgage secured by a 2-family resi5 dence, $556,500 for a mortgage secured by a 3-family 

6 residence, and $691,600 for a mortgage secured by a 

7 4-family residence, except that such maximum limita8 tions shall be adjusted effective January 1 of each 

9 year beginning after the effective date under section 

10 185 of the Federal Housing Finance Reform Act of 

11 2005, subject to the limitations in this paragraph. 

12 Each adjustment shall be made by adding to or sub13 tracting from each such amount (as it may have been 

14 previously adjusted) a percentage thereof equal to the 

15 percentage increase or decrease, during the most re16 cent 12-month or fourth-quarter period ending before 

17 the time of determining such annual adjustment, in 

18 the housing price index maintained by the Director of 

19 the Federal Housing Finance Agency (pursuant to 

20 section 1322 of the Housing and Community Develop21 ment Act of 1992 (12 U.S.C. 4541)).’’. 

22 (2) HIGH-COST AREA LIMIT.—Section 302(b)(2) 

23 of the Federal National Mortgage Association Charter 

24 Act is (12 U.S.C. 1717(b)(2)) is amended by adding 

25 after the period at the end the following: ‘‘Such fore-
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1 going limitations shall also be increased with respect 

2 to properties of a particular size located in any area 

3 for which the median price for such size residence ex4 ceeds the foregoing limitation for such size residence, 

5 to the lesser of 150 percent of such foregoing limita6 tion for such size residence or the amount that is 

7 equal to the median price in such area for such size 

8 residence, except that, subject to the order, if any, 

9 issued by the Director of the Federal Housing Fi10 nance Agency pursuant to section 123(d)(3) of the 

11 Federal Housing Finance Reform Act of 2005, such 

12 increase shall apply only with respect to mortgages on 

13 which are based securities issued and sold by the cor14 poration.’’ 

15 (b) FREDDIE MAC.— 

16 (1) GENERAL LIMIT.— Section 305(a)(2) of the 

17 Federal Home Loan Mortgage Corporation Act (12 

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

19 and 7th sentences and inserting the following new 

20 sentences: ‘‘Such limitations shall not exceed $359,650 

21 for a mortgage secured by a single-family residence, 

22 $460,400 for a mortgage secured by a 2-family resi23 dence, $556,500 for a mortgage secured by a 3-family 

24 residence, and $691,600 for a mortgage secured by a 

25 4-family residence, except that such maximum limita-
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1 tions shall be adjusted effective January 1 of each 

2 year beginning after the effective date under section 

3 185 of the Federal Housing Finance Reform Act of 

4 2005, subject to the limitations in this paragraph. 

5 Each adjustment shall be made by adding to or sub6 tracting from each such amount (as it may have been 

7 previously adjusted) a percentage thereof equal to the 

8 percentage increase or decrease, during the most re9 cent 12-month or fourth-quarter period ending before 

10 the time of determining such annual adjustment, in 

11 the housing price index maintained by the Director of 

12 the Federal Housing Finance Agency (pursuant to 

13 section 1322 of the Housing and Community Develop14 ment Act of 1992 (12 U.S.C. 4541)).’’. 

15 (2) HIGH-COST AREA LIMIT.—Section 305(a)(2) 

16 of the Federal Home Loan Mortgage Corporation Act 

17 is amended by adding after the period at the end the 

18 following: ‘‘Such foregoing limitations shall also be 

19 increased with respect to properties of a particular 

20 size located in any area for which the median price 

21 for such size residence exceeds the foregoing limitation 

22 for such size residence, to the lesser of 150 percent of 

23 such foregoing limitation for such size residence or the 

24 amount that is equal to the median price in such 

25 area for such size residence, except that, subject to the 
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1 order, if any, issued by the Director of the Federal 

2 Housing Finance Agency pursuant to section 

3 123(d)(3) of the Federal Housing Finance Reform Act 

4 of 2005, such increase shall apply only with respect 

5 to mortgages on which are based securities issued and 

6 sold by the Corporation.’’ 

7 (c) HOUSING PRICE INDEX.—Subpart A of part 2 of 

8 subtitle A of title XIII of the Housing and Community De9 velopment Act of 1992 (as amended by the preceding provi10 sions of this Act) is amended by inserting after section 1321 

11 (as added by section 122 of this Act) the following new sec12 tion: 

13 ‘‘SEC. 1322. HOUSING PRICE INDEX. 

14 ‘‘(a) IN GENERAL.—The Director shall establish and 

15 maintain a method of assessing the national average 1-fam16 ily house price for use for adjusting the conforming loan 

17 limitations of the enterprises. In establishing such method, 

18 the Director shall take into consideration the monthly sur19 vey of all major lenders conducted by the Federal Housing 

20 Finance Agency to determine the national average 1-family 

21 house price, the House Price Index maintained by the Office 

22 of Federal Housing Enterprise Oversight of the Department 

23 of Housing and Urban Development before the effective date 

24 under section 185 of the Federal Housing Finance Reform 

25 Act of 2005, any appropriate house price indexes of the Bu-
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1 reau of the Census of the Department of Commerce, and 

2 any other indexes or measures that the Director considers 

3 appropriate. 

4 ‘‘(b) GAO AUDIT.— 

5 ‘‘(1) IN GENERAL.—At such times as are re6 quired under paragraph (2), the Comptroller General 

7 of the United States shall conduct an audit of the 

8 methodology established by the Director under sub9 section (a) to determine whether the methodology es10 tablished is an accurate and appropriate means of 

11 measuring changes to the national average 1-family 

12 house price. 

13 ‘‘(2) TIMING.—An audit referred to in para14 graph (1) shall be conducted and completed not later 

15 than the expiration of the 180-day period that begins 

16 upon each of the following dates: 

17 ‘‘(A) ESTABLISHMENT.—The date upon 

18 which such methodology is initially established 

19 under subsection (a) in final form by the Direc20 tor. 

21 ‘‘(B) MODIFICATION OR AMENDMENT.— 

22 Each date upon which any modification or 

23 amendment to such methodology is adopted in 

24 final form by the Director. 
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1 ‘‘(3) REPORT.—Within 30 days of the comple2 tion of any audit conducted under this subsection, the 

3 Comptroller General shall submit a report detailing 

4 the results and conclusions of the audit to the Direc5 tor, the Committee on Financial Services of the House 

6 of Representatives, and the Committee on Banking, 

7 Housing, and Urban Affairs of the Senate.’’. 

8 (d) CONDITIONS ON CONFORMING LOAN LIMIT FOR

9 HIGH-COST AREAS.— 

10 (1) STUDY.—The Director of the Federal Hous11 ing Finance Agency shall conduct a study under this 

12 subsection during the six-month period beginning on 

13 the effective date under section 185 of this Act. 

14 (2) ISSUES.—The study under this subsection 

15 shall determine— 

16 (A) the effect that restricting the conforming 

17 loan limits for high-cost areas only to mortgages 

18 on which are based securities issued and sold by 

19 the Federal National Mortgage Association and 

20 the Federal Home Loan Mortgage Corporation 

21 (as provided in the last sentence of section 

22 302(b)(2) of the Federal National Mortgage Asso23 ciation Charter Act and the last sentence of sec24 tion 305(a)(2) of the Federal Home Loan Mort25 gage Corporation Act, pursuant to the amend-
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1 ments made by subsections (a)(2) and (b)(2) of 

2 this section) would have on the cost to borrowers 

3 for mortgages on housing in such high-cost areas; 

4 (B) the effects that such restrictions would 

5 have on the availability of mortgages for housing 

6 in such high-cost areas; and 

7 (C) the extent to which the Federal National 

8 Mortgage Association and the Federal Home 

9 Loan Mortgage Corporation will be able to issue 

10 and sell securities based on mortgages for hous11 ing located in such high-cost areas. 

12 (3) DETERMINATION.— 

13 (A) IN GENERAL.—Not later than the expi14 ration of the six-month period specified in para15 graph (1), the Director of the Federal Housing 

16 Finance Agency shall make a determination, 

17 based on the results of the study under this sub18 section, of whether the restriction of conforming 

19 loan limits for high-cost areas only to mortgages 

20 on which are based securities issued and sold by 

21 the Federal National Mortgage Association and 

22 the Federal Home Loan Mortgage Corporation 

23 (as provided in the amendments made by sub24 sections (a)(2) and (b)(2) of this section) will re-
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1 sult in an increase in the cost to borrowers for 

2 mortgages on housing in such high-cost areas. 

3 (B) ORDER.— If such determination is that 

4 costs to borrowers on housing in such high-cost 

5 areas will be increased by such restrictions, the 

6 Director may issue an order terminating such 

7 restrictions, in whole or in part. 

8 (4) PUBLICATION.— Not later than the expira9 tion of the six-month period specified in paragraph 

10 (1), the Director of the Federal Housing Finance 

11 Agency shall cause to be published in the Federal Reg12 ister— 

13 (A) a report that— 

14 (i) describes the study under this sub15 section; and 

16 (ii) sets forth the conclusions of the 

17 study regarding the issues to be determined 

18 under paragraph (2); and 

19 (B) notice of the determination of the Direc20 tor under paragraph (3); and 

21 (C) the order of the Director under para22 graph (3). 

23 (5) DEFINITION.—For purposes of this sub24 section, the term ‘‘conforming loan limits for high-cost 

25 areas’’ means the dollar amount limitations applica-
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1 ble under the section 302(b)(2) of the Federal Na2 tional Mortgage Association Charter Act and section 

3 305(a)(2) of the Federal Home Loan Mortgage Cor4 poration Act (as amended by subsections (a) and (b) 

5 of this section) for areas described in the last sentence 

6 of such sections (as so amended). 

7 (e) REGULAR ADJUSTMENT OF CONFORMING LOAN

8 LIMITS.— 

9 (1) ADJUSTMENT FOR YEAR INTERVENING BE10 FORE EFFECTIVE DATE.—Notwithstanding section 

11 302(b)(2) of the Federal National Mortgage Associa12 tion Charter Act and section 305(a)(2) of the Federal 

13 Home Loan Mortgage Corporation Act, as amended 

14 by this section, the maximum dollar amount limita15 tions in such sections shall be adjusted on the effective 

16 date under section 185 of this Act, and the limita17 tions as so adjusted shall be immediately effective, so 

18 that the limitations under such sections applicable to 

19 the year in which such effective date occurs are equal 

20 to the limitations in effect under such sections imme21 diately before such effective date. 

22 (2) FURTHER ADJUSTMENTS.—After such effec23 tive date, the dollar amount limitations as adjusted 

24 pursuant to paragraph (1) shall be considered ‘‘such 

25 amount (as it may have been previously adjusted’’ for 
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1 purposes of section 302(b)(2) of the Federal National 

2 Mortgage Association Charter Act and section 

3 305(a)(2) of the Federal Home Loan Mortgage Cor4 poration Act. 

5 SEC. 124. ANNUAL HOUSING REPORT REGARDING REGU6 LATED ENTITIES. 

7 (a) IN GENERAL.—The Housing and Community De8 velopment Act of 1992 is amended by striking section 1324 

9 (12 U.S.C. 4544) and inserting the following new section: 

10 ‘‘SEC. 1324. ANNUAL HOUSING REPORT REGARDING REGU11 LATED ENTITIES. 

12 ‘‘(a) IN GENERAL.—After reviewing and analyzing the 

13 reports submitted under section 309(n) of the Federal Na14 tional Mortgage Association Charter Act, section 307(f) of 

15 the Federal Home Loan Mortgage Corporation Act, and sec16 tion 10(j)(11) of the Federal Home Loan Bank Act (12 

17 U.S.C. 1430(j)(11)), the Director shall submit a report, not 

18 later than October 30 of each year, to the Committee on 

19 Financial Services of the House of Representatives and the 

20 Committee on Banking, Housing, and Urban Affairs of the 

21 Senate, on the activities of each regulated entity. 

22 ‘‘(b) CONTENTS.—The report shall— 

23 ‘‘(1) discuss the extent to which— 
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1 ‘‘(A) each enterprise is achieving the annual 

2 housing goals established under subpart B of this 

3 part; 

4 ‘‘(B) each enterprise is complying with sec5 tion 1337; 

6 ‘‘(C) each Federal home loan bank is com7 plying with section 10(j) of the Federal Home 

8 Loan Bank Act; and 

9 ‘‘(D) each regulated entity is achieving the 

10 purposes of the regulated entity established by 

11 law; 

12 ‘‘(2) aggregate and analyze relevant data on in13 come to assess the compliance by each enterprise with 

14 the housing goals established under subpart B; 

15 ‘‘(3) aggregate and analyze data on income, race, 

16 and gender by census tract and other relevant classi17 fications, and compare such data with larger demo18 graphic, housing, and economic trends; 

19 ‘‘(4) examine actions that— 

20 ‘‘(A) each enterprise has undertaken or 

21 could undertake to promote and expand the an22 nual goals established under subpart B and the 

23 purposes of the enterprise established by law; and 

24 ‘‘(B) each Federal home loan bank has 

25 taken or could undertake to promote and expand 
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1 the community investment program and afford2 able housing program of the bank established 

3 under section subsections (i) and (j) of section 10 

4 of the Federal Home Loan Bank Act; 

5 ‘‘(5) examine the primary and secondary multi6 family housing mortgage markets and describe— 

7 ‘‘(A) the availability and liquidity of mort8 gage credit; 

9 ‘‘(B) the status of efforts to provide stand10 ard credit terms and underwriting guidelines for 

11 multifamily housing and to securitize such mort12 gage products; and 

13 ‘‘(C) any factors inhibiting such standard14 ization and securitization; 

15 ‘‘(6) examine actions each regulated entity has 

16 undertaken and could undertake to promote and ex17 pand opportunities for first-time homebuyers; 

18 ‘‘(7) describe any actions taken under section 

19 1325(5) with respect to originators found to violate 

20 fair lending procedures; 

21 ‘‘(8) discuss and analyze existing conditions and 

22 trends, including conditions and trends relating to 

23 pricing, in the housing markets and mortgage mar24 kets; and 
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1 ‘‘(9) identify the extent to which each enterprise 

2 is involved in mortgage purchases and secondary 

3 market activities involving subprime loans (as identi4 fied in accordance with the regulations issued pursu5 ant to section 124(b) of the Federal Housing Finance 

6 Reform Act of 2005) and compare the characteristics 

7 of subprime loans purchased and securitized by the 

8 enterprises to other loans purchased and securitized 

9 by the enterprises 

10 ‘‘(c) DATA COLLECTION AND REPORTING.— 

11 ‘‘(1) IN GENERAL.—To assist the Director in 

12 analyzing the matters described in subsection (b) and 

13 establishing the methodology described in section 

14 1322, the Director shall conduct, on a monthly basis, 

15 a survey of mortgage markets in accordance with this 

16 subsection. 

17 ‘‘(2) DATA POINTS.—Each monthly survey con18 ducted by the Director under paragraph (1) shall col19 lect data on— 

20 ‘‘(A) the characteristics of individual mort21 gages that are eligible for purchase by the enter22 prises and the characteristics of individual mort23 gages that are not eligible for purchase by the en24 terprises including, in both cases, information 

25 concerning— 
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1 ‘‘(i) the price of the house that secures 

2 the mortgage; 

3 ‘‘(ii) the loan-to-value ratio of the 

4 mortgage, which shall reflect any secondary 

5 liens on the relevant property; 

6 ‘‘(iii) the terms of the mortgage; 

7 ‘‘(iv) the creditworthiness of the bor8 rower or borrowers; and 

9 ‘‘(v) whether the mortgage, in the case 

10 of a conforming mortgage, was purchased 

11 by an enterprise; and 

12 ‘‘(B) such other matters as the Director de13 termines to be appropriate. 

14 ‘‘(3) PUBLIC AVAILABILITY.—The Director shall 

15 make any data collected by the Director in connection 

16 with the conduct of a monthly survey available to the 

17 public in a timely manner, provided that the Director 

18 may modify the data released to the public to ensure 

19 that the data is not released in an identifiable form. 

20 ‘‘(4) DEFINITION.—For purposes of this sub21 section, the term ‘identifiable form’ means any rep22 resentation of information that permits the identity of 

23 a borrower to which the information relates to be rea24 sonably inferred by either direct or indirect means.’’. 
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1 (b) STANDARDS FOR SUBPRIME LOANS.—The Director 

2 shall, not later than one year after the effective date under 

3 section 185, by regulations issued under section 1316G of 

4 the Housing and Community Development Act of 1992, es5 tablish standards by which mortgages purchased and mort6 gages purchased and securitized shall be characterized as 

7 subprime for the purpose of, and only for the purpose of, 

8 complying with the reporting requirement under section 

9 1324(b)(9) of such Act. 

10 SEC. 125. REVISION OF HOUSING GOALS. 

11 (a) HOUSING GOALS.—The Housing and Community 

12 Development Act of 1992 is amended by striking sections 

13 1331 through 1334 (12 U.S.C. 4561–4) and inserting the 

14 following new sections: 

15 ‘‘SEC. 1331. ESTABLISHMENT OF HOUSING GOALS. 

16 ‘‘(a) IN GENERAL.—The Director shall establish, effec17 tive for the first year that begins after the effective date 

18 under section 185 of the Federal Housing Finance Reform 

19 Act of 2005 and each year thereafter, annual housing goals, 

20 with respect to the mortgage purchases by the enterprises, 

21 as follows: 

22 ‘‘(1) SINGLE FAMILY HOUSING GOALS.—Three 

23 single-family housing goals under section 1332. 
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1 ‘‘(2) MULTIFAMILY SPECIAL AFFORDABLE HOUS2 ING GOALS.—A multifamily special affordable hous3 ing goal under section 1333. 

4 ‘‘(b) ELIMINATING INTEREST RATE DISPARITIES.— 

5 ‘‘(1) IN GENERAL.—In establishing and imple6 menting the housing goals under this subpart, the Di7 rector shall require the enterprises to disclose appro8 priate information to allow the Director to assess if 

9 there are any disparities in interest rates charged on 

10 mortgages to borrowers who are minorities as com11 pared with borrowers of similar creditworthiness who 

12 are not minorities, as evidenced in reports pursuant 

13 to the Home Mortgage Disclosure Act of 1975. 

14 ‘‘(2) REPORT AND REMEDY.—Upon a finding by 

15 the Director, pursuant to the information provided by 

16 an enterprise in paragraph (1), that a pattern of dis17 parities in interest rates exists, the Director shall— 

18 ‘‘(A) submit to the Committee on Financial 

19 Services of the House of Representatives and the 

20 Committee on Banking, Housing, and Urban Af21 fairs of the Senate a report detailing the dispari22 ties; and 

23 ‘‘(B) require the enterprise to take such ac24 tion as the Director deems appropriate pursuant 
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1 to this Act to remedy the interest rate disparities 

2 identified. 

3 ‘‘(3) PROTECTION OF IDENTITY.—In carrying 

4 out this subsection, the Director shall ensure that no 

5 information is made public that would reasonably 

6 allow identification, directly or indirectly, of an indi7 vidual borrower. 

8 ‘‘(c) TIMING.—The Director shall establish an annual 

9 deadline by which the Director shall establish the annual 

10 housing goals under this subpart for each year, taking into 

11 consideration the need for the enterprises to reasonably and 

12 sufficiently plan their operations and activities in advance, 

13 including operations and activities necessary to meet such 

14 annual goals. 

15 ‘‘SEC. 1332. SINGLE-FAMILY HOUSING GOALS. 

16 ‘‘(a) IN GENERAL.—The Director shall establish an 

17 annual goal for the purchase by each enterprise of conven18 tional, conforming, single-family, owner-occupied, purchase 

19 money mortgages financing housing for each of the fol20 lowing categories of families: 

21 ‘‘(1) Low-income families. 

22 ‘‘(2) Families that reside in low-income areas. 

23 ‘‘(3) Very low-income families. 

24 ‘‘(b) DETERMINATION OF COMPLIANCE.—The Director 

25 shall determine, for each year that the housing goal under 
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1 this section is in effect pursuant to section 1331(a), whether 

2 each enterprise has complied with the single-family housing 

3 goal established under this section for such year. An enter4 prise shall be considered to be in compliance with such a 

5 goal for a year only if— 

6 ‘‘(1) for each of the types of families described in 

7 subsection (a), the percentage of the number of con8 ventional, conforming, single-family, owner-occupied, 

9 purchase money mortgages purchased by each enter10 prise in such year that serve such families, meets or 

11 exceeds 

12 ‘‘(2) the target for the year for such type of fam13 ily that is established under subsection (c). 

14 ‘‘(c) ANNUAL TARGETS.— 

15 ‘‘(1) IN GENERAL.—Except as provided in para16 graph (2), for each of the types of families described 

17 in subsection (a), the target under this subsection for 

18 a year shall be the average percentage, for the three 

19 years that most recently precede such year and for 

20 which information under the Home Mortgage Disclo21 sure Act of 1975 is publicly available, of the number 

22 of conventional, conforming, single-family, owner-oc23 cupied, purchase money mortgages originated in such 

24 year that serves such type of family, as determined by 
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1 the Director using the information obtained and de2 termined pursuant to paragraphs (3) and (4). 

3 ‘‘(2) AUTHORITY TO INCREASE TARGETS.— 

4 ‘‘(A) IN GENERAL.—The Director may, for 

5 any year, establish by regulation, for any or all 

6 of the types of families described in subsection 

7 (a), percentage targets that are higher than the 

8 percentages for such year determined pursuant to 

9 paragraph (1), to reflect expected changes in 

10 market performance related to such information 

11 under the Home Mortgage Disclosure Act of 

12 1975. 

13 ‘‘(B) FACTORS.—In establishing any targets 

14 pursuant to subparagraph (A), the Director shall 

15 consider the following factors: 

16 ‘‘(i) National housing needs. 

17 ‘‘(ii) Economic, housing, and demo18 graphic conditions. 

19 ‘‘(iii) The performance and effort of the 

20 enterprises toward achieving the housing 

21 goals under this section in previous years. 

22 ‘‘(iv) The size of the conventional mort23 gage market serving each of the types of 

24 families described in subsection (a) relative 
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1 to the size of the overall conventional mort2 gage market. 

3 ‘‘(v) The need to maintain the sound 

4 financial condition of the enterprises. 

5 ‘‘(3) HMDA INFORMATION.—The Director shall 

6 annually obtain information submitted in compliance 

7 with the Home Mortgage Disclosure Act of 1975 re8 garding conventional, conforming, single-family, 

9 owner-occupied, purchase money mortgages originated 

10 and purchased for the previous year. 

11 ‘‘(4) CONFORMING MORTGAGES.—In determining 

12 whether a mortgage is a conforming mortgage for 

13 purposes of this paragraph, the Director shall con14 sider the original principal balance of the mortgage 

15 loan to be the principal balance as reported in the in16 formation referred to in paragraph (3), as rounded to 

17 the nearest thousand dollars. 

18 ‘‘(d) NOTICE OF DETERMINATION AND ENTERPRISE

19 COMMENT.— 

20 ‘‘(1) NOTICE.—Within 30 days of making a de21 termination under subsection (b) regarding a compli22 ance of an enterprise for a year with the housing goal 

23 established under this section and before any public 

24 disclosure thereof, the Director shall provide notice of 

25 the determination to the enterprise, which shall in-
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1 clude an analysis and comparison, by the Director, of 

2 the performance of the enterprise for the year and the 

3 targets for the year under subsection (c). 

4 ‘‘(2) COMMENT PERIOD.—The Director shall pro5 vide each enterprise an opportunity to comment on 

6 the determination during the 30-day period beginning 

7 upon receipt by the enterprise of the notice. 

8 ‘‘(e) USE OF BORROWER INCOME.—In monitoring the 

9 performance of each enterprise pursuant to the housing 

10 goals under this section and evaluating such performance 

11 (for purposes of section 1336), the Director shall consider 

12 a mortgagor’s income to be such income at the time of origi13 nation of the mortgage. 

14 ‘‘SEC. 1333. MULTIFAMILY SPECIAL AFFORDABLE GOAL. 

15 ‘‘(a) ESTABLISHMENT.— 

16 ‘‘(1) IN GENERAL.—The Director shall establish, 

17 by regulation, an annual goal for the purchase by 

18 each enterprise of each of the following types of mort19 gages on multifamily housing: 

20 ‘‘(A) Mortgages that finance dwelling units 

21 for very low-income families. 

22 ‘‘(B) Mortgages that finance dwelling units 

23 assisted by the low-income housing tax credit 

24 under section 42 of the Internal Revenue Code of 

25 1986. 
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1 ‘‘(2) ADDITIONAL REQUIREMENTS FOR SMALLER

2 PROJECTS.—The Director shall establish, within the 

3 goal under this section, additional requirements for 

4 the purchase by each enterprise of mortgages described 

5 in paragraph (1) for multifamily housing projects of 

6 a smaller or limited size, which may be based on the 

7 number of dwelling units in the project or the amount 

8 of the mortgage, or both, and shall include multi9 family housing projects of such smaller sizes as are 

10 typical among such projects that serve rural areas. 

11 ‘‘(3) FACTORS.—In establishing the goal under 

12 this section relating to mortgages on multifamily 

13 housing for an enterprise, the Director shall con14 sider— 

15 ‘‘(A) national multifamily mortgage credit 

16 needs; 

17 ‘‘(B) the performance and effort of the en18 terprise in making mortgage credit available for 

19 multifamily housing in previous years; 

20 ‘‘(C) the size of the multifamily mortgage 

21 market; 

22 ‘‘(D) the ability of the enterprise to lead the 

23 industry in making mortgage credit available, 

24 especially for underserved markets, such as for 

25 small multifamily projects of 5 to 50 units, mul-
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1 tifamily properties in need of rehabilitation, and 

2 multifamily properties located in rural areas; 

3 and 

4 ‘‘(E) the need to maintain the sound finan5 cial condition of the enterprise. 

6 ‘‘(b) UNITS FINANCED BY HOUSING FINANCE AGENCY

7 BONDS.—The Director shall give full credit toward the 

8 achievement of the multifamily special affordable housing 

9 goal under this section (for purposes of section 1336) to 

10 dwelling units in multifamily housing that otherwise quali11 fies under such goal and that is financed by tax-exempt or 

12 taxable bonds issued by a State or local housing finance 

13 agency, but only if— 

14 ‘‘(1) such bonds are secured by a guarantee of the 

15 enterprise; or 

16 ‘‘(2) are not investment grade and are purchased 

17 by the enterprise. 

18 ‘‘(c) USE OF TENANT INCOME OR RENT.—The Director 

19 shall monitor the performance of each enterprise in meeting 

20 the goals established under this section and shall evaluate 

21 such performance (for purposes of section 1336) based on— 

22 ‘‘(1) the income of the prospective or actual ten23 ants of the property, where such data are available; 

24 or 
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1 ‘‘(2) where the data referred to in paragraph (1) 

2 are not available, rent levels affordable to low-income 

3 and very low-income families. 

4 A rent level shall be considered to be affordable for purposes 

5 of this subsection for an income category referred to in this 

6 subsection if it does not exceed 30 percent of the maximum 

7 income level of such income category, with appropriate ad8 justments for unit size as measured by the number of bed9 rooms. 

10 ‘‘(d) DETERMINATION OF COMPLIANCE.—The Director 

11 shall, for each year that the housing goal under this section 

12 is in effect pursuant to section 1331(a), determine whether 

13 each enterprise has complied with such goal and the addi14 tional requirements under subsection (a)(2). 

15 ‘‘SEC. 1334. DISCRETIONARY ADJUSTMENT OF HOUSING 

16 GOALS. 

17 ‘‘(a) AUTHORITY.—An enterprise may petition the Di18 rector in writing at any time during a year to reduce the 

19 level of any goal for such year established pursuant to this 

20 subpart. 

21 ‘‘(b) STANDARD FOR REDUCTION.—The Director may 

22 reduce the level for a goal pursuant to such a petition only 

23 if— 
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1 ‘‘(1) market and economic conditions or the fi2 nancial condition of the enterprise require such ac3 tion; or 

4 ‘‘(2) efforts to meet the goal would result in the 

5 constraint of liquidity, over-investment in certain 

6 market segments, or other consequences contrary to 

7 the intent of this subpart, or section 301(3) of the 

8 Federal National Mortgage Association Charter Act 

9 (12 U.S.C. 1716(3)) or section 301(3) of the Federal 

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

11 1451 note), as applicable. 

12 ‘‘(c) DETERMINATION.—The Director shall make a de13 termination regarding any proposed reduction within 30 

14 days of receipt of the petition regarding the reduction. The 

15 Director may extend such period for a single additional 15- 

16 day period, but only if the Director requests additional in17 formation from the enterprise. A denial by the Director to 

18 reduce the level of any goal under this section may be ap19 pealed to the United States District Court for the District 

20 of Columbia or the United States district court in the juris21 diction in which the headquarters of an enterprise is lo22 cated.’’. 

23 (b) CONFORMING AMENDMENTS.—The Housing and 

24 Community Development Act of 1992 is amended—— 
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1 (1) in section 1335(a) (12 U.S.C. 4565(a)), in 

2 the matter preceding paragraph (1), by striking ‘‘low3 and moderate-income housing goal’’ and all that fol4 lows through ‘‘section 1334’’ and inserting ‘‘housing 

5 goals established under this subpart’’; and 

6 (2) in section 1336(a)(1) (12 U.S.C. 4566(a)(1)), 

7 by striking ‘‘sections 1332, 1333, and 1334,’’ and in8 serting ‘‘this subpart’’ . 

9 (c) DEFINITIONS.—Section 1303 of the Housing and 

10 Community Development Act of 1992 (12 U.S.C. 4502), as 

11 amended by the preceding provisions of this Act, is further 

12 amended— 

13 (1) in paragraph (26), by striking ‘‘60 percent’’ 

14 each place such term appears and inserting ‘‘50 per15 cent’’; 

16 (2) by redesignating paragraphs (23) through 

17 (26) as paragraphs (27) through (30), respectively; 

18 (3) by inserting after paragraph (22) the fol19 lowing new paragraph: 

20 ‘‘(26) RURAL AREAS.—The term ‘rural areas’ 

21 means any areas that are non-metropolitan areas (as 

22 such term is defined by the Director of the Office of 

23 Management and Budget), including micropolitan 

24 areas and tribal trust lands.’’. 
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1 (4) by redesignating paragraphs (14) through 

2 (22) as paragraphs (17) through (25), respectively; 

3 and 

4 (5) by inserting after paragraph (13) the fol5 lowing new paragraph: 

6 ‘‘(16) LOW-INCOME AREA.—The term ‘low in7 come area’ means a census tract or block numbering 

8 area in which the median income does not exceed 80 

9 percent of the median income for the area in which 

10 such census tract or block numbering area is located, 

11 and, for the purposes of section 1332(a)(2), shall in12 clude families having incomes not greater than 100 

13 percent of the area median income who reside in mi14 nority census tracts.’’; 

15 (6) by redesignating paragraphs (12) and (13) 

16 as paragraphs (14) and (15), respectively; 

17 (7) by inserting after paragraph (11) the fol18 lowing new paragraph: 

19 ‘‘(13) EXTREMELY LOW-INCOME.—The term ‘ex20 tremely low-income’ means— 

21 ‘‘(A) in the case of owner-occupied units, 

22 income not in excess of 30 percent of the area 

23 median income; and 

24 ‘‘(B) in the case of rental units, income not 

25 in excess of 30 percent of the area median in-
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1 come, with adjustments for smaller and larger 

2 families, as determined by the Secretary.’’; 

3 (8) by redesignating paragraphs (8) through (11) 

4 as paragraphs (9) through (12), respectively; and 

5 (9) by inserting after paragraph (7) the fol6 lowing new paragraph: 

7 ‘‘(8) CONFORMING MORTGAGE.—The term ‘con8 forming mortgage’ means, with respect to an enter9 prise, a conventional mortgage having an original 

10 principal obligation that does not exceed the dollar 

11 limitation, in effect at the time of such origination, 

12 under, as applicable— 

13 ‘‘(A) section 302(b)(2) of the Federal Na14 tional Mortgage Association Charter Act; or 

15 ‘‘(B) section 305(a)(2) of the Federal Home 

16 Loan Mortgage Corporation Act.’’. 

17 SEC. 126. DUTY TO SERVE UNDERSERVED MARKETS. 

18 (a) ESTABLISHMENT AND EVALUATION OF PERFORM19 ANCE.—Section 1335 of the Housing and Community De20 velopment Act of 1992 (12 U.S.C. 4565) is amended— 

21 (1) in the section heading, by inserting ‘‘DUTY

22 TO SERVE UNDERSERVED MARKETS AND’’ before 

23 ‘‘OTHER’’; 

24 (2) by striking subsection (b); 

25 (3) in subsection (a)— 
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1 (A) in the matter preceding paragraph (1), 

2 by inserting ‘‘and to carry out the duty under 

3 subsection (a) of this section’’ before ‘‘, each en4 terprise shall’’; 

5 (B) in paragraph (3), by inserting ‘‘and’’ 

6 after the semicolon at the end; 

7 (C) in paragraph (4), by striking ‘‘; and’’ 

8 and inserting a period; 

9 (D) by striking paragraph (5); and 

10 (E) by redesignating such subsection as sub11 section (b); 

12 (4) by inserting before subsection (b) (as so re13 designated by paragraph (3)(E) of this subsection) the 

14 following new subsection: 

15 ‘‘(a) DUTY TO SERVE UNDERSERVED MARKETS.— 

16 ‘‘(1) DUTY.—In accordance with the purpose of 

17 the enterprises under section 301(3) of the Federal 

18 National Mortgage Association Charter Act (12 

19 U.S.C. 1716) and section 301(b)(3) of the Federal 

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

21 1451 note) to undertake activities relating to mort22 gages on housing for very low-, low-, and moderate23 income families involving a reasonable economic re24 turn that may be less than the return earned on other 

25 activities, each enterprise shall have the duty to in-
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1 crease the liquidity of mortgage investments and im2 prove the distribution of investment capital available 

3 for mortgage financing for underserved markets. 

4 ‘‘(2) UNDERSERVED MARKETS.—To meet its 

5 duty under paragraph (1), each enterprise shall com6 ply with the following requirements with respect to 

7 the following underserved markets: 

8 ‘‘(A) MANUFACTURED HOUSING.—The en9 terprise shall lead the industry in developing 

10 loan products and flexible underwriting guide11 lines to facilitate a secondary market for mort12 gages on manufactured homes for very low-, low13 , and moderate-income families. 

14 ‘‘(B) AFFORDABLE HOUSING PRESERVA15 TION.—The enterprise shall lead the industry in 

16 developing loan products and flexible under17 writing guidelines to facilitate a secondary mar18 ket to preserve housing affordable to very low-, 

19 low-, and moderate-income families, including 

20 housing projects subsidized under— 

21 ‘‘(i) the project-based and tenant-based 

22 rental assistance programs under section 8 

23 of the United States Housing Act of 1937; 

24 ‘‘(ii) the program under section 236 of 

25 the National Housing Act; 
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1 ‘‘(iii) the below-market interest rate 

2 mortgage program under section 221(d)(4) 

3 of the National Housing Act; 

4 ‘‘(iv) the supportive housing for the el5 derly program under section 202 of the 

6 Housing Act of 1959; 

7 ‘‘(v) the supportive housing program 

8 for persons with disabilities under section 

9 811 of the Cranston-Gonzalez National Af10 fordable Housing Act; and 

11 ‘‘(vi) the rural rental housing program 

12 under section 515 of the Housing Act of 

13 1949. 

14 ‘‘(C) RURAL AND OTHER UNDERSERVED

15 MARKETS.—The enterprise shall lead the indus16 try in developing loan products and flexible un17 derwriting guidelines to facilitate a secondary 

18 market for mortgages on housing for very low-, 

19 low-, and moderate-income families in rural 

20 areas, and for mortgages for housing for any 

21 other underserved market for very low-, low-, and 

22 moderate-income families that the Secretary 

23 identifies as lacking adequate credit through con24 ventional lending sources. Such underserved 
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1 markets may be identified by borrower type, 

2 market segment, or geographic area.’’; and 

3 (5) by adding at the end the following new sub4 section: 

5 ‘‘(c) EVALUATION AND REPORTING OF COMPLIANCE.— 

6 ‘‘(1) IN GENERAL.—Not later than 6 months 

7 after the effective date under section 185 of the Fed8 eral Housing Finance Reform Act of 2005, the Direc9 tor shall establish a manner for evaluating whether, 

10 and the extent to which, the enterprises have complied 

11 with the duty under subsection (a) to serve under12 served markets and for rating the extent of such com13 pliance. Using such method, the Director shall, for 

14 each year, evaluate such compliance and rate the per15 formance of each enterprise as to extent of compli16 ance. The Director shall include such evaluation and 

17 rating for each enterprise for a year in the report for 

18 that year submitted pursuant to section 1319B(a). 

19 ‘‘(2) SEPARATE EVALUATIONS.—In determining 

20 whether an enterprise has complied with the duty re21 ferred to in paragraph (1), the Director shall sepa22 rately evaluate whether the enterprise has complied 

23 with such duty with respect to each of the underserved 

24 markets identified in subsection (a), taking into con25 sideration— 
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1 ‘‘(A) the development of loan products and 

2 more flexible underwriting guidelines; 

3 ‘‘(B) the extent of outreach to qualified loan 

4 sellers in each of such underserved markets; and 

5 ‘‘(C) the volume of loans purchased in each 

6 of such underserved markets.’’. 

7 (b) ENFORCEMENT.—Subsection (a) of section 1336 of 

8 the Housing and Community Development Act of 1992 (12 

9 U.S.C. 4566(a)) is amended— 

10 (1) in paragraph (1), by inserting ‘‘and with the 

11 duty under section 1335A of each enterprise with re12 spect to underserved markets,’’ before ‘‘as provided in 

13 this section,’’; and 

14 (2) by adding at the end of such subsection, as 

15 amended by the preceding provisions of this title, the 

16 following new paragraph: 

17 ‘‘(4) ENFORCEMENT OF DUTY TO PROVIDE MORT18 GAGE CREDIT TO UNDERSERVED MARKETS.—The duty 

19 under section 1335(a) of each enterprise to serve un20 derserved markets (as determined in accordance with 

21 section 1335(c)) shall be enforceable under this section 

22 to the same extent and under the same provisions that 

23 the housing goals established under sections 1332, 

24 1333, and 1334 are enforceable. Such duty shall not 

25 be enforceable under any other provision of this title 
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1 (including subpart C of this part) other than this sec2 tion or under any provision of the Federal National 

3 Mortgage Association Charter Act or the Federal 

4 Home Loan Mortgage Corporation Act.’’. 

5 SEC. 127. MONITORING AND ENFORCING COMPLIANCE 

6 WITH HOUSING GOALS. 

7 Section 1336 of the Housing and Community Develop8 ment Act of 1992 (12 U.S.C. 4566) is amended— 

9 (1) in subsection (b)— 

10 (A) in the subsection heading, by inserting 

11 ‘‘Preliminary’’ before ‘‘Determination’’; 

12 (B) by striking paragraph (1) and inserting 

13 the following new paragraph: 

14 ‘‘(1) NOTICE.—If the Director preliminarily de15 termines that an enterprise has failed, or that there 

16 is a substantial probability that an enterprise will 

17 fail, to meet any housing goal established under this 

18 subpart, the Director shall provide written notice to 

19 the enterprise of such a preliminary determination, 

20 the reasons for such determination, and the informa21 tion on which the Director based the determination.’’; 

22 (C) in paragraph (2)— 

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

24 ‘‘finally’’ before ‘‘determining’’; 
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1 (ii) by striking subparagraphs (B) and 

2 (C) and inserting the following new sub3 paragraph: 

4 ‘‘(B) EXTENSION OR SHORTENING OF PE5 RIOD.—The Director may— 

6 ‘‘(i) extend the period under subpara7 graph (A) for good cause for not more than 

8 30 additional days; and 

9 ‘‘(ii) shorten the period under subpara10 graph (A) for good cause.’’; and 

11 (iii) by redesignating subparagraph 

12 (D) as subparagraph (C); and 

13 (D) in paragraph (3)— 

14 (i) in subparagraph (A), by striking 

15 ‘‘determine’’ and inserting ‘‘issue a final de16 termination of’’; 

17 (ii) in subparagraph (B), by inserting 

18 ‘‘final’’ before ‘‘determinations’’; and 

19 (iii) in subparagraph (C)— 

20 (I) by striking ‘‘Committee on 

21 Banking, Finance and Urban Affairs’’ 

22 and inserting ‘‘Committee on Finan23 cial Services’’; and 
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1 (II) by inserting ‘‘final’’ before 

2 ‘‘determination’’ each place such term 

3 appears; and 

4 (2) in subsection (c)— 

5 (A) by striking the subsection designation 

6 and heading and all that follows through the end 

7 of paragraph (1) and inserting the following: 

8 ‘‘(c) CEASE AND DESIST ORDERS, CIVIL MONEY PEN9 ALTIES, AND REMEDIES INCLUDING HOUSING PLANS.— 

10 ‘‘(1) REQUIREMENT.—If the Director finds, pur11 suant to subsection (b), that there is a substantial 

12 probability that an enterprise will fail, or has actu13 ally failed, to meet any housing goal under this sub14 part and that the achievement of the housing goal was 

15 or is feasible, the Director may require that the enter16 prise submit a housing plan under this subsection. If 

17 the Director makes such a finding and the enterprise 

18 refuses to submit such a plan, submits an unaccept19 able plan, fails to comply with the plan or the Direc20 tor finds that the enterprise has failed to meet any 

21 housing goal under this subpart, in addition to re22 quiring an enterprise to submit a housing plan, the 

23 Director may issue a cease and desist order in accord24 ance with section 1341, impose civil money penalties 

25 in accordance with section 1345, or order other rem-
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1 edies as set forth in paragraph (7) of this sub2 section.’’; 

3 (B) in paragraph (2)— 

4 (i) by striking ‘‘CONTENTS.—Each 

5 housing plan’’ and inserting ‘‘HOUSING

6 PLAN.—If the Director requires a housing 

7 plan under this section, such a plan’’; and 

8 (ii) in subparagraph (B), by inserting 

9 ‘‘and changes in its operations’’ after ‘‘im10 provements’’; 

11 (C) in paragraph (3)— 

12 (i) by inserting ‘‘comply with any re13 medial action or’’ before ‘‘submit a housing 

14 plan’’; and 

15 (ii) by striking ‘‘under subsection 

16 (b)(3) that a housing plan is required’’; 

17 (D) in paragraph (4), by striking the first 

18 two sentences and inserting the following: ‘‘The 

19 Director shall review each submission by an en20 terprise, including a housing plan submitted 

21 under this subsection, and not later than 30 days 

22 after submission, approve or disapprove the plan 

23 or other action. The Director may extend the pe24 riod for approval or disapproval for a single ad-
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1 ditional 30-day period if the Director determines 

2 such extension necessary.’’; and 

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

4 paragraph: 

5 ‘‘(7) ADDITIONAL REMEDIES FOR FAILURE TO

6 MEET GOALS.—In addition to ordering a housing 

7 plan under this section, issuing cease and desist or8 ders under section 1341, and ordering civil money 

9 penalties under section 1345, the Director may seek 

10 other actions when an enterprise fails to meet a goal, 

11 and exercise appropriate enforcement authority avail12 able to the Director under this Act to prohibit the en13 terprise from entering into new programs and new 

14 business activities and to order the enterprise to sus15 pend programs and business activities pending its 

16 achievement of the goal.’’. 

17 SEC. 128. AFFORDABLE HOUSING FUND. 

18 (a) IN GENERAL.—The Housing and Community De19 velopment Act of 1992 is amended by striking sections 1337 

20 and 1338 (12 U.S.C. 4562 note) and inserting the following 

21 new section: 

22 ‘‘SEC. 1337. AFFORDABLE HOUSING FUND. 

23 ‘‘(a) ESTABLISHMENT AND PURPOSE.—Each enter24 prise shall establish and manage an affordable housing fund 
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1 in accordance with this section. The purpose of the afford2 able housing fund shall be— 

3 ‘‘(1) to increase homeownership for extremely 

4 low-and very low-income families; 

5 ‘‘(2) to increase investment in housing in low-in6 come areas, and areas designated as qualified census 

7 tracts or an area of chronic economic distress pursu8 ant to section 143(j) of the Internal Revenue Code of 

9 1986 (26 U.S.C. 143(j)); 

10 ‘‘(3) to increase and preserve the supply of rental 

11 and owner-occupied housing for extremely low- and 

12 very low-income families; and 

13 ‘‘(4) to increase investment in economic and 

14 community development in economically underserved 

15 areas. 

16 ‘‘(b) ALLOCATION OF AMOUNTS BY ENTERPRISES.— 

17 ‘‘(1) IN GENERAL.—In accordance with regula18 tions issued by the Director under subsection (l) and 

19 subject to paragraph (2) of this subsection, each enter20 prise shall allocate to the affordable housing fund es21 tablished under subsection (a) by the enterprise, in 

22 each year beginning after the effective date under sec23 tion 185 of the Federal Housing Finance Reform Act 

24 of 2005, 5 percent of the after-tax income of the enter25 prise for the preceding year. 
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1 ‘‘(2) LIMITATION.—An enterprise shall not be re2 quired to make an allocation for a year to the afford3 able housing fund of the enterprise established under 

4 subsection (a) unless— 

5 ‘‘(A) the enterprise is classified by the Di6 rector at the time of such allocation as ade7 quately capitalized; and 

8 ‘‘(B) the enterprise generated after-tax in9 come for the preceding year. 

10 ‘‘(3) DETERMINATION OF AFTER-TAXINCOME.— 

11 For purposes of this section, the term ‘after-tax in12 come’ means, with respect to an enterprise for a year, 

13 the amount reported by the enterprise for such year 

14 in the enterprise’s annual report for such year that 

15 is filed with the Securities and Exchange Commis16 sion, except that for any year in which no such filing 

17 is made by an enterprise or such filing is not timely 

18 made, such term means the amount determined by the 

19 Director based on the income tax return filings of the 

20 enterprise. 

21 ‘‘(c) SELECTION OF ACTIVITIES FUNDED USING AF22 FORDABLE HOUSING FUND AMOUNTS.—Amounts from the 

23 affordable housing fund of the enterprise may be used, or 

24 committed for use, only for activities that— 
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1 ‘‘(1) are eligible under subsection (d) for such 

2 use; and 

3 ‘‘(2) are selected for funding by the enterprise in 

4 accordance with the process and criteria for such se5 lection established pursuant to subsection (l)(2)(C). 

6 ‘‘(d) ELIGIBLE ACTIVITIES.—Amounts from the afford7 able housing fund of an enterprise shall be eligible for use, 

8 or for commitment for use, only for assistance for— 

9 ‘‘(1) the production, preservation, and rehabili10 tation of rental housing, including housing under the 

11 programs identified in section 1335(a)(2)(B), except 

12 that amounts provided from the Fund may be used 

13 for the benefit only of extremely low- and very low14 income families; 

15 ‘‘(2) the production, preservation, and rehabili16 tation of housing for homeownership, including such 

17 forms as downpayment assistance, closing cost assist18 ance, and assistance for interest-rate buy-downs, 

19 that— 

20 ‘‘(A) is available for purchase only for use 

21 as a principal residence by families that qualify 

22 both as— 

23 ‘‘(i) extremely low- and very-low in24 come families at the times described in sub25 paragraphs (A) through (C) of section 
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1 215(b)(2) of the Cranston-Gonzalez National 

2 Affordable Housing Act (42 U.S.C. 

3 12745(b)(2)); and 

4 ‘‘(ii) first-time homebuyers, as such 

5 term is defined in section 104 of the Cran6 ston-Gonzalez National Affordable Housing 

7 Act (42 U.S.C. 12704), except that any ref8 erence in such section to assistance under 

9 title II of such Act shall for purposes of this 

10 section be considered to refer to assistance 

11 from the affordable housing fund of the en12 terprise; 

13 ‘‘(B) has an initial purchase price that 

14 meets the requirements of section 215(b)(1) of the 

15 Cranston-Gonzalez National Affordable Housing 

16 Act; and 

17 ‘‘(C) is subject to the same resale restric18 tions established under section 215(b)(3) of the 

19 Cranston-Gonzalez National Affordable Housing 

20 Act and applicable to the participating jurisdic21 tion that is the State in which such housing is 

22 located; and 

23 ‘‘(3) leveraged grants under subsection (e). 

24 ‘‘(e) LEVERAGED GRANTS.— 
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1 ‘‘(1) IN GENERAL.—Pursuant to regulations 

2 issued by the Director, each enterprise shall carry out 

3 a program under this subsection to make leveraged 

4 grants from amounts in the affordable housing fund 

5 of the enterprise, subject to the requirements under 

6 this subsection. 

7 ‘‘(2) ELIGIBLE PURPOSES.—Amounts from the 

8 affordable housing fund of an enterprise may be used 

9 only for leveraged grants under paragraph (4) for— 

10 ‘‘(A) the development, preservation, reha11 bilitation, or purchase of affordable housing that 

12 meets underserved needs for affordable housing; 

13 ‘‘(B) community or economic development 

14 activities in economically underserved areas; or 

15 ‘‘(C) a combination of the activities identi16 fied in subparagraphs (A) and (B). 

17 ‘‘(3) ELIGIBLE SPONSORS.—A leveraged grant 

18 under this subsection may be made only on behalf of 

19 a sponsor that meets such requirements as the Direc20 tor shall establish for experience and success in car21 rying out the types of activities proposed under the 

22 application of the sponsor, such as the following enti23 ties: 

24 ‘‘(A) A low-income housing fund. 
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1 ‘‘(B) A housing finance agency of a State or 

2 unit of general local government. 

3 ‘‘(C) A non-profit organization having as 

4 one of its principal purposes the development or 

5 management of affordable housing. 

6 ‘‘(D) A community development financial 

7 institution. 

8 ‘‘(E) A national non-profit housing inter9 mediary. 

10 ‘‘(F) A community development corpora11 tion. 

12 ‘‘(G) A community development entity. 

13 ‘‘(4) ELIGIBLE USES.—Amounts from the afford14 able housing fund of an enterprise may be used under 

15 this subsection only for the following types of lever16 aged grants: 

17 ‘‘(A) To provide loan loss reserves. 

18 ‘‘(B) To capitalize a revolving loan fund. 

19 ‘‘(C) To provide equity capitalization of an 

20 affordable housing fund. 

21 ‘‘(D) To provide equity capitalization of a 

22 community development or economic develop23 ment fund. 

24 ‘‘(E) For risk sharing loans. 
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1 ‘‘(F) For the funding of a specific, detailed 

2 investment plan that identifies the specific types 

3 of uses and the expected timeframes with respect 

4 to such uses. 

5 ‘‘(5) APPLICATIONS.—The Director shall provide, 

6 in the application process established pursuant to 

7 subsection (l)(2)(C), for eligible sponsors under para8 graph (3) of this subsection to submit applications to 

9 an enterprise for leveraged grants pursuant to this 

10 subsection, which shall include a detailed description 

11 of— 

12 ‘‘(A) the types of affordable housing or com13 munity or economic development activities for 

14 which the leveraged grant is made; 

15 ‘‘(B) the type of eligible leveraged grants 

16 under paragraph (4) to be made in the project; 

17 ‘‘(C) the types, sources, and amounts of 

18 other funding for the project; 

19 ‘‘(D) and the expected time frame of the le20 veraged grant under this subsection. 

21 ‘‘(6) LIMITATIONS.—The Director shall by regu22 lation— 

23 ‘‘(A) ensure that leveraged grants pursuant 

24 to this subsection are designed to alleviate need 

25 for affordable housing in underserved markets 
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1 identified in section 1335(a) having the greatest 

2 need for such housing or to address community 

3 and economic development needs in economically 

4 underserved areas having the greatest need; and 

5 ‘‘(B) ensure that any returns from leveraged 

6 grants under this subsection accrue to the afford7 able housing fund of the enterprise and are 

8 available for use only as provided under this sec9 tion. 

10 ‘‘(f) LIMITATIONS ON USE.— 

11 ‘‘(1) AMOUNTS FOR HOMEOWNERSHIP.—Of any 

12 amounts allocated pursuant to subsection (b) in each 

13 year to the affordable housing fund of an enterprise, 

14 not less than 10 percent shall be used for activities 

15 under paragraph (2) of subsection (d). 

16 ‘‘(2) AMOUNTS FOR LEVERAGED GRANTS.—Of 

17 any amounts allocated pursuant to subsection (b) in 

18 each year to the affordable housing fund of an enter19 prise, not more than 12.5 percent shall be used for le20 veraged grants under subsection (e). 

21 ‘‘(3) DEADLINE FOR COMMITMENT OR USE.—Any 

22 amounts allocated to the affordable housing fund of 

23 an enterprise shall be used or committed for use with24 in two years of the date of such allocation. 
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1 ‘‘(4) USE OF RETURNS.—Any return on invest2 ment of any amounts allocated pursuant to subsection 

3 (b) to the affordable housing fund of an enterprise 

4 shall be available for use by the enterprise only for el5 igible activities under subsection (d). 

6 ‘‘(5) ADMINISTRATIVE COSTS.—The Director 

7 shall, by regulation— 

8 ‘‘(A) provide that, except as provided in 

9 subparagraph (B), amounts allocated to the af10 fordable housing fund of an enterprise may not 

11 be used for administrative, outreach, or other 

12 costs of— 

13 ‘‘(i) the enterprise; or 

14 ‘‘(ii) any recipient of amounts from 

15 the affordable housing fund; and 

16 ‘‘(B) limit the amount of any such con17 tributions that may be used for administrative 

18 costs of the enterprise of maintaining the afford19 able housing fund and carrying out the program 

20 under this section. 

21 ‘‘(6) PROHIBITION OF CONSIDERATION OF USE

22 FOR MEETING HOUSING GOALS.—In determining com23 pliance with the housing goals under this subpart, the 

24 Director may not consider amounts used under this 

25 section for eligible activities under subsection (d). The 
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1 Director shall give credit toward the achievement of 

2 such housing goals to purchases of mortgages for hous3 ing that receives funding under this section, but only 

4 to the extent that such purchases are funded other 

5 than under this section. 

6 ‘‘(7) PROHIBITION OF CERTAIN SUBGRANTS.— 

7 The Director shall, by regulation, ensure that 

8 amounts from the affordable housing fund of an enter9 prise awarded under this section to a national non10 profit housing intermediary are not used for the pur11 pose of distributing subgrants to other non-profit enti12 ties. 

13 ‘‘(g) CONSISTENCY OF USE WITH HOUSING NEEDS.— 

14 ‘‘(1) QUARTERLY REPORTS.—The Director shall 

15 require each enterprise to submit a report, on a quar16 terly basis, to the Director and the affordable housing 

17 board established under subsection (j) describing the 

18 activities funded under this section during such quar19 ter with amounts from the affordable housing fund of 

20 the enterprise established under this section. The Di21 rector shall make such reports publicly available. The 

22 affordable housing board shall review each report by 

23 an enterprise to determine the consistency of such ac24 tivities funded with the criteria for selection of such 

25 activities established pursuant to subsection (l)(2)(C). 
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1 ‘‘(2) REPLENISHMENT.—If the affordable housing 

2 board determines that an activity funded by an enter3 prise with amounts from the affordable housing fund 

4 of the enterprise is not consistent with the criteria es5 tablished pursuant to subsection (l)(2)(C), the board 

6 shall notify the Director and the Director shall re7 quire the enterprise to allocate to such affordable 

8 housing fund (in addition to amounts allocated in 

9 compliance with subsection (b)) an amount equal to 

10 the sum of the amounts from the affordable housing 

11 fund used and further committed for use for such ac12 tivity. 

13 ‘‘(h) CAPITAL REQUIREMENTS.—The utilization or 

14 commitment of amounts from the affordable housing fund 

15 of an enterprise shall not be subject to the risk-based capital 

16 requirements established pursuant to section 1361(a). 

17 ‘‘(i) REPORTING REQUIREMENT.—Each enterprise 

18 shall include, in the report required under section 309(m) 

19 of the Federal National Mortgage Association Charter Act 

20 or section 307(f) of the Federal Home Loan Mortgage Cor21 poration Act, as applicable, a description of the actions 

22 taken by the enterprise to utilize or commit amounts allo23 cated under this section to the affordable housing fund of 

24 the enterprise established under this section. 

25 ‘‘(j) AFFORDABLE HOUSING BOARD.— 
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1 ‘‘(1) APPOINTMENT.—The Director shall appoint 

2 an affordable housing board of 7, 9, or 11 persons, 

3 who shall include— 

4 ‘‘(A) the Director, or the Director’s designee; 

5 ‘‘(B) the Secretary of Housing and Urban 

6 Development, or the Secretary’s designee; 

7 ‘‘(C) the Secretary of Agriculture, or the 

8 Secretary’s designee; 

9 ‘‘(D) 2 persons from for-profit organizations 

10 or businesses actively involved in providing or 

11 promoting affordable housing for extremely low12 and very low-income households; and 

13 ‘‘(E) 2 persons from nonprofit organiza14 tions actively involved in providing or pro15 moting affordable housing for extremely low- and 

16 very low-income households. 

17 ‘‘(2) TERMS.— 

18 ‘‘(A) IN GENERAL.—Except as provided in 

19 subparagraph (B), the term of each member of 

20 the affordable housing board appointed pursuant 

21 to paragraph (1) (but not including members 

22 appointed pursuant to subparagraphs (A), (B), 

23 and (C)) shall be 3 years. 

24 ‘‘(B) INITIAL APPOINTEES.—The Director 

25 shall appoint the initial members of the afford-
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1 able housing board not later than the expiration 

2 of the 60-day period beginning on the date of the 

3 enactment of this Act. As designated by the Di4 rector at the time of appointment, of the mem5 bers of the affordable housing board first ap6 pointed pursuant to paragraph (1) (but not in7 cluding members appointed pursuant to sub8 paragraphs (A), (B), and (C))— 

9 ‘‘(i) in the case of a board having 7 

10 members— 

11 ‘‘(I) one shall be appointed for a 

12 term of one year; and 

13 ‘‘(II) one shall be appointed for a 

14 term of two years; 

15 ‘‘(ii) in the case of a board having 9 

16 members— 

17 ‘‘(I) two shall be appointed for a 

18 term of one year; and 

19 ‘‘(II) two shall be appointed for a 

20 term of two years; and 

21 ‘‘(iii) in the case of a board having 11 

22 members— 

23 ‘‘(I) two shall be appointed for a 

24 term of one year; and 
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1 ‘‘(II) three shall be appointed for 

2 a term of two years; 

3 ‘‘(3) DUTIES.—The affordable housing board 

4 shall meet not less than quarterly— 

5 ‘‘(A) to determine extremely low- and very 

6 low-income housing needs; 

7 ‘‘(B) to advise the Director with respect 

8 to— 

9 ‘‘(i) establishment of the selection cri10 teria under subsection (l)(2)(C) that provide 

11 for appropriate use of amounts from the af12 fordable housing funds of the enterprises to 

13 meet such needs; and 

14 ‘‘(ii) operation of, and changes to, the 

15 program under this section appropriate to 

16 meet such needs; and 

17 ‘‘(C) to review the reports submitted by the 

18 enterprises pursuant to subsection (g)(1) to de19 termine whether the activities funded using 

20 amounts from the affordable housing funds of the 

21 enterprises comply with the regulations issued 

22 pursuant to subsection (l)(2)(C) and inform the 

23 Director of such determinations, for purposes of 

24 subsection (g)(2). 
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1 ‘‘(4) EXPENSES AND PER DIEM.—Members of the 

2 board shall receive travel expenses, including per 

3 diem in lieu of subsistence, in accordance with sec4 tions 5702 and 5703 of title 5, United States Code. 

5 ‘‘(5) ADVISORY COMMITTEE.—The board shall be 

6 considered an advisory committee for purposes of the 

7 Federal Advisory Committee Act (5 U.S.C. App.). 

8 ‘‘(6) DURATION.— The board shall have contin9 ued existence until terminated by law. 

10 ‘‘(k) DEFINITION.—For purposes of this section, the 

11 term ‘economically underserved area’ means an area that 

12 predominantly includes census tracts for which— 

13 ‘‘(1) at least 20 percent of the population is 

14 below the poverty line (as such term is defined in sec15 tion 673(2) of the Omnibus Budget Reconciliation Act 

16 of 1981 (42 U.S.C. 9902(2)), including any revision 

17 required by such section), applicable to a family of 

18 the size involved; or 

19 ‘‘(2) median family income does not exceed the 

20 greater of— 

21 ‘‘(A) 80 percent of the median family in22 come for the metropolitan statistical area in 

23 which such census tracts are located; or 
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1 ‘‘(B) 80 percent of the median family in2 come for the State in which such census tracts 

3 are located. 

4 ‘‘(l) REGULATIONS.— 

5 ‘‘(1) IN GENERAL.—The Director shall issue reg6 ulations to carry out this section. 

7 ‘‘(2) REQUIRED CONTENTS.—The regulations 

8 issued under this subsection shall include— 

9 ‘‘(A) authority for the Director to audit, 

10 provide for an audit, or otherwise verify an en11 terprise’s activities, to ensure compliance with 

12 this section; 

13 ‘‘(B) a requirement that the Director ensure 

14 that the affordable housing fund of each enter15 prise is audited not less than annually to ensure 

16 compliance with this section; 

17 ‘‘(C) requirements for a process for applica18 tion to, and selection by, an enterprise for activi19 ties to be funded with amounts from the afford20 able housing fund, which shall provide that— 

21 ‘‘(i) selection shall based upon specific 

22 criteria, including a prioritization of fund23 ing based upon— 

24 ‘‘(I) greatest impact; 

25 ‘‘(II) geographic diversity; 
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1 ‘‘(III) ability to obligate amounts 

2 and undertake activities so funded in a 

3 timely manner; 

4 ‘‘(IV) in the case of rental housing 

5 projects under subsection (d)(1), the ex6 tent to which rents for units in the 

7 project funded are affordable, especially 

8 for extremely low-income families; and 

9 ‘‘(V) in the case of rental housing 

10 projects under subsection (d)(1), the ex11 tent of the duration for which such 

12 rents will remain affordable; and 

13 ‘‘(ii) an enterprise may not require for 

14 such selection that an activity involve fi15 nancing or underwriting of any kind by the 

16 enterprise (other than funding through the 

17 affordable housing fund of the enterprise) 

18 and may not give preference in such selec19 tion to activities that involve such financ20 ing; and 

21 ‘‘(D) requirements to ensure that amounts 

22 from the affordable housing funds of the enter23 prises used for rental housing under subsection 

24 (d)(1) are used only for the benefit of extremely 

25 low- and very-low income families. 
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1 ‘‘(3) LIMITATION.—Any regulations issued by the 

2 Director pursuant to this section shall be no more re3 strictive on the enterprises’ activities in connection 

4 with the allocation of after-tax income under this sec5 tion than the regulations issued to implement the af6 fordable housing program of the Federal home loan 

7 banks pursuant to section 10(j) of the Federal Home 

8 Loan Bank Act (12 U.S.C. 1430(j)).’’. 

9 (b) CONTRIBUTIONS FOR 2006.— 

10 (1) RESERVATION AND CONTRIBUTION.—In 2006, 

11 each enterprise (as such term is defined in section 

12 1303 of the Housing and Community Development 

13 Act of 1992) shall reserve for contribution to the af14 fordable housing fund to be established by the enter15 prise pursuant to section 1337 of such Act (as amend16 ed by subsection (a) of this section), an amount equal 

17 to 3.5 percent of the after-tax income of the enterprise 

18 for 2005. Upon the establishment of such affordable 

19 housing fund, each enterprise shall allocate to such 

20 fund the amounts reserved under this subsection by 

21 the enterprise. 

22 (2) EXCEPTION TO DEADLINE FOR COMMIT23 MENT.—Section 1337(e)(2) of the Housing and Com24 munity Development Act of 1992 (as amended by sub25 section (a) of this section) shall not apply to amounts 
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1 allocated to the affordable housing fund of an enter2 prise pursuant to paragraph (1). 

3 (3) AFTER-TAXINCOME.—For purposes of this 

4 subsection, the term ‘‘after-tax income’’ has the mean5 ing provided in subsection (b)(3) of the new section 

6 1337 to be inserted by the amendment made by sub7 section (a) of this section. 

8 (4) EFFECTIVE DATE.—This subsection shall take 

9 effect on the date of the enactment of this Act. 

10 SEC. 129. CONSISTENCY WITH MISSION. 

11 Subpart B of part 2 of subtitle A of title XIII of the 

12 Housing and Community Development Act of 1992 (12 

13 U.S.C. 4561 et seq.) is amended by adding after section 

14 1337, as added by section 127 of this Act, the following new 

15 section: 

16 ‘‘SEC. 1338. CONSISTENCY WITH MISSION. 

17 ‘‘This subpart may not be construed to authorize an 

18 enterprise to engage in any program or activity that con19 travenes or is inconsistent with the Federal National Mort20 gage Association Charter Act or the Federal Home Loan 

21 Mortgage Corporation Act.’’. 

22 SEC. 130. ENFORCEMENT. 

23 (a) CEASE-AND-DESIST PROCEEDINGS.—Section 1341 

24 of the Housing and Community Development Act of 1992 

25 (12 U.S.C. 4581) is amended— 
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1 (1) by striking subsection (a) and inserting the 

2 following new subsection: 

3 ‘‘(a) GROUNDS FOR ISSUANCE.—The Director may 

4 issue and serve a notice of charges under this section upon 

5 an enterprise if the Director determines— 

6 ‘‘(1) the enterprise has failed to meet any hous7 ing goal established under subpart B, following a 

8 written notice and determination of such failure in 

9 accordance with section 1336; 

10 ‘‘(2) the enterprise has failed to submit a report 

11 under section 1314, following a notice of such failure, 

12 an opportunity for comment by the enterprise, and a 

13 final determination by the Director; 

14 ‘‘(3) the enterprise has failed to submit the infor15 mation required under subsection (m) or (n) of sec16 tion 309 of the Federal National Mortgage Association 

17 Charter Act, or subsection (e) or (f) of section 307 of 

18 the Federal Home Loan Mortgage Corporation Act; 

19 ‘‘(4) the enterprise has violated any provision of 

20 this part or any order, rule or regulation under this 

21 part; 

22 ‘‘(5) the enterprise has failed to submit a hous23 ing plan that complies with section 1336(c) within 

24 the applicable period; or 
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1 ‘‘(6) the enterprise has failed to comply with a 

2 housing plan under section 1336(c).’’; 

3 (2) in subsection (b)(2), by striking ‘‘requiring 

4 the enterprise to’’ and all that follows through the end 

5 of the paragraph and inserting the following: ‘‘requir6 ing the enterprise to— 

7 ‘‘(A) comply with the goal or goals; 

8 ‘‘(B) submit a report under section 1314; 

9 ‘‘(C) comply with any provision this part 

10 or any order, rule or regulation under such part; 

11 ‘‘(D) submit a housing plan in compliance 

12 with section 1336(c); 

13 ‘‘(E) comply with a housing plan submitted 

14 under section 1336(c); or 

15 ‘‘(F) provide the information required 

16 under subsection (m) or (n) of section 309 of the 

17 Federal National Mortgage Association Charter 

18 Act or subsection (e) or (f) of section 307 of the 

19 Federal Home Loan Mortgage Corporation Act, 

20 as applicable.’’; 

21 (3) in subsection (c), by inserting ‘‘date of the’’ 

22 before ‘‘service of the order’’; and 

23 (4) by striking subsection (d). 

24 (b) AUTHORITY OF DIRECTOR TO ENFORCE NOTICES

25 AND ORDERS.—Section 1344 of the Housing and Commu-
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1 nity Development Act of 1992 (12 U.S.C. 4584) is amended 

2 by striking subsection (a) and inserting the following new 

3 subsection: 

4 ‘‘(a) ENFORCEMENT.—The Director may, in the dis5 cretion of the Director, apply to the United States District 

6 Court for the District of Columbia, or the United States 

7 district court within the jurisdiction of which the head8 quarters of the enterprise is located, for the enforcement of 

9 any effective and outstanding notice or order issued under 

10 section 1341 or 1345, or request that the Attorney General 

11 of the United States bring such an action. Such court shall 

12 have jurisdiction and power to order and require compli13 ance with such notice or order.’’. 

14 (c) CIVIL MONEY PENALTIES.—Section 1345 of the 

15 Housing and Community Development Act of 1992 (12 

16 U.S.C. 4585) is amended— 

17 (1) by striking subsections (a) and (b) and in18 serting the following new subsections: 

19 ‘‘(a) AUTHORITY.—The Director may impose a civil 

20 money penalty, in accordance with the provisions of this 

21 section, on any enterprise that has failed to— 

22 ‘‘(1) meet any housing goal established under 

23 subpart B, following a written notice and determina24 tion of such failure in accordance with section 

25 1336(b); 
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1 ‘‘(2) submit a report under section 1314, fol2 lowing a notice of such failure, an opportunity for 

3 comment by the enterprise, and a final determination 

4 by the Director; 

5 ‘‘(3) submit the information required under sub6 section (m) or (n) of section 309 of the Federal Na7 tional Mortgage Association Charter Act, or sub8 section (e) or (f) of section 307 of the Federal Home 

9 Loan Mortgage Corporation Act; 

10 ‘‘(4) comply with any provision of this part or 

11 any order, rule or regulation under this part; 

12 ‘‘(5) submit a housing plan pursuant to section 

13 1336(c) within the required period; or 

14 ‘‘(6) comply with a housing plan for the enter15 prise under section 1336(c). 

16 ‘‘(b) AMOUNT OF PENALTY.—The amount of the pen17 alty, as determined by the Director, may not exceed— 

18 ‘‘(1) for any failure described in paragraph (1), 

19 (5), or (6) of subsection (a), $50,000 for each day that 

20 the failure occurs; and 

21 ‘‘(2) for any failure described in paragraph (2), 

22 (3), or (4) of subsection (a), $20,000 for each day that 

23 the failure occurs.’’; 

24 (2) in subsection (c)— 

25 (A) in paragraph (1)— 
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1 (i) in subparagraph (A), by inserting 

2 ‘‘and’’ after the semicolon at the end; 

3 (ii) in subparagraph (B), by striking 

4 ‘‘; and’’ and inserting a period; and 

5 (iii) by striking subparagraph (C); 

6 and 

7 (B) in paragraph (2), by inserting after the 

8 period at the end the following: ‘‘In determining 

9 the penalty under subsection (a)(1), the Director 

10 shall give consideration to the length of time the 

11 enterprise should reasonably take to achieve the 

12 goal.’’; 

13 (3) in the first sentence of subsection (d)— 

14 (A) by striking ‘‘request the Attorney Gen15 eral of the United States to’’ and inserting ‘‘, in 

16 the discretion of the Director,’’; and 

17 (B) by inserting ‘‘, or request that the At18 torney General of the United States bring such 

19 an action’’ before the period at the end; 

20 (4) by striking subsection (f); and 

21 (5) by redesignating subsection (g) as subsection 

22 (f). 

23 (d) ENFORCEMENT OF SUBPOENAS.—Section 1348(c) 

24 of the Housing and Community Development Act of 1992 

25 (12 U.S.C. 4588(c)) is amended— 
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1 (1) by striking ‘‘request the Attorney General of 

2 the United States to’’ and inserting ‘‘, in the discre3 tion of the Director,’’; and 

4 (2) by inserting ‘‘or request that the Attorney 

5 General of the United States bring such an action,’’ 

6 after ‘‘District of Columbia,’’ 

7 (e) CONFORMING AMENDMENT.—The heading for sub8 part C of part 2 of subtitle A of the Housing and Commu9 nity Development Act of 1992 is amended to read as follows: 

10 ‘‘Subpart C—Enforcement’’. 

11 SEC. 131. CONFORMING AMENDMENTS. 

12 Part 2 of subtitle A of title XIII of the Housing and 

13 Community Development Act of 1992 (12 U.S.C. 4541 et 

14 seq.) is amended— 

15 (1) by striking ‘‘Secretary’’ each place such term 

16 appears in such part and inserting ‘‘Director’’; 

17 (2) in the section heading for section 1323 (12 

18 U.S.C. 4543), by inserting ‘‘OF ENTERPRISES’’ be19 fore the period at the end; 

20 (3) by striking section 1327 (12 U.S.C. 4547); 

21 (4) by striking section 1328 (12 U.S.C. 4548); 

22 (5) in sections 1345(c)(1)(A) and 1346(b) (12 

23 U.S.C. 4585(c)(1)(A), 4586(b)), by striking ‘‘Sec24 retary’s’’ each place such term appears and inserting 

25 ‘‘Director’s’’; and 
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1 (6) by striking section 1349 (12 U.S.C. 4589). 

2 Subtitle C—Prompt Corrective 

3 Action 

4 SEC. 141. CAPITAL CLASSIFICATIONS. 

5 (a) IN GENERAL.—Section 1364 of the Housing and 

6 Community Development Act of 1992 (12 U.S.C. 4614) is 

7 amended— 

8 (1) in the heading for subsection (a) by striking 

9 ‘‘In General’’ and inserting ‘‘Enterprises’’; 

10 (2) in subsection (c)— 

11 (A) by striking ‘‘subsection (b)’’ and insert12 ing ‘‘subsection (c)’’; 

13 (B) by striking ‘‘enterprises’’ and inserting 

14 ‘‘regulated entities’’; and 

15 (C) by striking the last sentence; 

16 (3) by redesignating subsections (c) (as so 

17 amended by paragraph (2) of this subsection) and (d) 

18 as subsections (d) and (f), respectively; 

19 (4) by striking subsection (b) and inserting the 

20 following new subsections: 

21 ‘‘(b) FEDERAL HOME LOAN BANKS.— 

22 ‘‘(1) ESTABLISHMENT AND CRITERIA.—For pur23 poses of this subtitle, the Director shall, by regula24 tion— 
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1 ‘‘(A) establish the capital classifications 

2 specified under paragraph (2) for the Federal 

3 home loan banks; 

4 ‘‘(B) establish criteria for each such capital 

5 classification based on the amount and types of 

6 capital held by a bank and the risk-based, min7 imum, and critical capital levels for the banks 

8 and taking due consideration of the capital clas9 sifications established under subsection (a) for 

10 the enterprises, with such modifications as the 

11 Director determines to be appropriate to reflect 

12 the difference in operations between the banks 

13 and the enterprises; and 

14 ‘‘(C) shall classify the Federal home loan 

15 banks according to such capital classifications. 

16 ‘‘(2) CLASSIFICATIONS.—The capital classifica17 tions specified under this paragraph are— 

18 ‘‘(A) adequately capitalized; 

19 ‘‘(B) undercapitalized; 

20 ‘‘(C) significantly undercapitalized; and 

21 ‘‘(D) critically undercapitalized. 

22 ‘‘(c) DISCRETIONARY CLASSIFICATION.— 

23 ‘‘(1) GROUNDS FOR RECLASSIFICATION.—The 

24 Director may reclassify a regulated entity under 

25 paragraph (2) if— 
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1 ‘‘(A) at any time, the Director determines 

2 in writing that the regulated entity is engaging 

3 in conduct that could result in a rapid depletion 

4 of core or total capital or, in the case of an en5 terprise, that the value of the property subject to 

6 mortgages held or securitized by the enterprise 

7 has decreased significantly; 

8 ‘‘(B) after notice and an opportunity for 

9 hearing, the Director determines that the regu10 lated entity is in an unsafe or unsound condi11 tion; or 

12 ‘‘(C) pursuant to section 1371(b), the Direc13 tor deems the regulated entity to be engaging in 

14 an unsafe or unsound practice. 

15 ‘‘(2) RECLASSIFICATION.—In addition to any 

16 other action authorized under this title, including the 

17 reclassification of a regulated entity for any reason 

18 not specified in this subsection, if the Director takes 

19 any action described in paragraph (1) the Director 

20 may classify a regulated entity— 

21 ‘‘(A) as undercapitalized, if the regulated 

22 entity is otherwise classified as adequately cap23 italized; 
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1 ‘‘(B) as significantly undercapitalized, if 

2 the regulated entity is otherwise classified as 

3 undercapitalized; and 

4 ‘‘(C) as critically undercapitalized, if the 

5 regulated entity is otherwise classified as signifi6 cantly undercapitalized.’’; and 

7 (5) by inserting after subsection (d) (as so redes8 ignated by paragraph (3) of this subsection), the fol9 lowing new subsection: 

10 ‘‘(e) RESTRICTION ON CAPITAL DISTRIBUTIONS.— 

11 ‘‘(1) IN GENERAL.—A regulated entity shall 

12 make no capital distribution if, after making the dis13 tribution, the regulated entity would be undercapital14 ized. 

15 ‘‘(2) EXCEPTION.—Notwithstanding paragraph 

16 (1), the Director may permit a regulated entity, to 

17 the extent appropriate or applicable, to repurchase, 

18 redeem, retire, or otherwise acquire shares or owner19 ship interests if the repurchase, redemption, retire20 ment, or other acquisition— 

21 ‘‘(A) is made in connection with the 

22 issuance of additional shares or obligations of the 

23 regulated entity in at least an equivalent 

24 amount; and 
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1 ‘‘(B) will reduce the financial obligations of 

2 the regulated entity or otherwise improve the fi3 nancial condition of the entity.’’. 

4 (b) REGULATIONS.—Not later than the expiration of 

5 the 180-day period beginning on the effective date under 

6 section 185, the Director of the Federal Housing Finance 

7 Agency shall issue regulations to carry out section 1364(b) 

8 of the Housing and Community Development Act of 1992 

9 (as added by paragraph (4) of this subsection), relating to 

10 capital classifications for the Federal home loan banks. 

11 SEC. 142. SUPERVISORY ACTIONS APPLICABLE TO UNDER12 CAPITALIZED REGULATED ENTITIES. 

13 Section 1365 of the Housing and Community Develop14 ment Act of 1992 (12 U.S.C. 4615) is amended— 

15 (1) in the section heading, by striking ‘‘ENTER16 PRISES’’ and inserting ‘‘REGULATED ENTITIES’’; 

17 (2) in subsection (a)— 

18 (A) by redesignating paragraphs (1) and 

19 (2) as paragraphs (2) and (3), respectively; 

20 (B) by inserting before paragraph (2) the 

21 following paragraph: 

22 ‘‘(1) REQUIRED MONITORING.—The Director 

23 shall— 
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1 ‘‘(A) closely monitor the condition of any 

2 regulated entity that is classified as under3 capitalized; 

4 ‘‘(B) closely monitor compliance with the 

5 capital restoration plan, restrictions, and re6 quirements imposed under this section; and 

7 ‘‘(C) periodically review the plan, restric8 tions, and requirements applicable to the under9 capitalized regulated entity to determine whether 

10 the plan, restrictions, and requirements are 

11 achieving the purpose of this section.’’; and 

12 (C) by inserting at the end the following 

13 new paragraphs: 

14 ‘‘(4) RESTRICTION OF ASSET GROWTH.—A regu15 lated entity that is classified as undercapitalized shall 

16 not permit its average total assets (as such term is de17 fined in section 1316(b) during any calendar quarter 

18 to exceed its average total assets during the preceding 

19 calendar quarter unless— 

20 ‘‘(A) the Director has accepted the capital 

21 restoration plan of the regulated entity; 

22 ‘‘(B) any increase in total assets is con23 sistent with the plan; and 

24 ‘‘(C) the ratio of total capital to assets for 

25 the regulated entity increases during the cal-
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1 endar quarter at a rate sufficient to enable the 

2 entity to become adequately capitalized within a 

3 reasonable time. 

4 ‘‘(5) PRIOR APPROVAL OF ACQUISITIONS, NEW

5 PROGRAMS, AND NEW BUSINESS ACTIVITIES.—A regu6 lated entity that is classified as undercapitalized shall 

7 not, directly or indirectly, acquire any interest in 

8 any entity or engage in any new program or new 

9 business activity unless— 

10 ‘‘(A) the Director has accepted the capital 

11 restoration plan of the regulated entity, the enti12 ty is implementing the plan, and the Director 

13 determines that the proposed action is consistent 

14 with and will further the achievement of the 

15 plan; or 

16 ‘‘(B) the Director determines that the pro17 posed action will further the purpose of this sec18 tion.’’; 

19 (3) in the subsection heading for subsection (b), 

20 by striking ‘‘FROM UNDERCAPITALIZED TO SIGNIFI21 CANTLY UNDERCAPITALIZED’’; and 

22 (4) by striking subsection (c) and inserting the 

23 following new subsection: 

24 ‘‘(c) OTHER DISCRETIONARY SAFEGUARDS.—The Di25 rector may take, with respect to a regulated entity that is 
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1 classified as undercapitalized, any of the actions authorized 

2 to be taken under section 1366 with respect to a regulated 

3 entity that is classified as significantly undercapitalized, 

4 if the Director determines that such actions are necessary 

5 to carry out the purpose of this subtitle.’’. 

6 SEC. 143. SUPERVISORY ACTIONS APPLICABLE TO SIGNIFI7 CANTLY UNDERCAPITALIZED REGULATED EN8 TITIES. 

9 Section 1366 of the Housing and Community Develop10 ment Act of 1992 (12 U.S.C. 4616) is amended— 

11 (1) in the section heading, by striking ‘‘ENTER12 PRISES’’ and inserting ‘‘ENTITIES’’; 

13 (2) in subsection (a)(2)(A), by striking ‘‘enter14 prise’’ the last place such term appears; 

15 (3) in subsection (b)— 

16 (A) in the subsection heading, by striking 

17 ‘‘Discretionary Supervisory Actions’’ and insert18 ing ‘‘Specific Actions’’; 

19 (B) in the matter preceding paragraph (1), 

20 by striking ‘‘may, at any time, take any’’ and 

21 inserting ‘‘shall carry out this section by taking, 

22 at any time, one or more’’; 

23 (C) by redesignating paragraphs (5) and 

24 (6) as paragraphs (6) and (7), respectively; 
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1 (D) by inserting after paragraph (4) the fol2 lowing new paragraph: 

3 ‘‘(5) IMPROVEMENT OF MANAGEMENT.—Take one 

4 or more of the following actions: 

5 ‘‘(A) NEW ELECTION OF BOARD.—Order a 

6 new election for the board of directors of the reg7 ulated entity. 

8 ‘‘(B) DISMISSAL OF DIRECTORS OR EXECU9 TIVE OFFICERS.—Require the regulated entity to 

10 dismiss from office any director or executive offi11 cer who had held office for more than 180 days 

12 immediately before the entity became under13 capitalized. Dismissal under this subparagraph 

14 shall not be construed to be a removal pursuant 

15 to the Director’s enforcement powers provided in 

16 section 1377. 

17 ‘‘(C) EMPLOY QUALIFIED EXECUTIVE OFFI18 CERS.—Require the regulated entity to employ 

19 qualified executive officers (who, if the Director 

20 so specifies, shall be subject to approval by the 

21 Director).’’; and 

22 (E) by inserting at the end the following 

23 new paragraph: 

24 ‘‘(8) OTHER ACTION.—Require the regulated en25 tity to take any other action that the Director deter-
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1 mines will better carry out the purpose of this section 

2 than any of the actions specified in this paragraph.’’; 

3 (4) by redesignating subsection (c) as subsection 

4 (d); and 

5 (5) by inserting after subsection (b) the following 

6 new subsection: 

7 ‘‘(c) RESTRICTION ON COMPENSATION OF EXECUTIVE

8 OFFICERS.—A regulated entity that is classified as signifi9 cantly undercapitalized may not, without prior written ap10 proval by the Director— 

11 ‘‘(1) pay any bonus to any executive officer; or 

12 ‘‘(2) provide compensation to any executive offi13 cer at a rate exceeding that officer’s average rate of 

14 compensation (excluding bonuses, stock options, and 

15 profit sharing) during the 12 calendar months pre16 ceding the calendar month in which the regulated en17 tity became undercapitalized.’’. 

18 SEC. 144. AUTHORITY OVER CRITICALLY UNDERCAPITAL19 IZED REGULATED ENTITIES. 

20 (a) IN GENERAL.—Section 1367 of the Housing and 

21 Community Development Act of 1992 (12 U.S.C. 4617) is 

22 amended to read as follows: 
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1 ‘‘SEC. 1367. AUTHORITY OVER CRITICALLY UNDERCAPITAL2 IZED REGULATED ENTITIES. 

3 ‘‘(a) APPOINTMENT OF AGENCY AS CONSERVATOR OR

4 RECEIVER.— 

5 ‘‘(1) IN GENERAL.—Notwithstanding any other 

6 provision of Federal or State law, if any of the 

7 grounds under paragraph (3) exist, at the discretion 

8 of the Director, the Director may establish a con9 servatorship or receivership, as appropriate, for the 

10 purpose of reorganizing, rehabilitating, or winding 

11 up the affairs of a regulated entity. 

12 ‘‘(2) APPOINTMENT.—In any conservatorship or 

13 receivership established under this section, the Direc14 tor shall appoint the Agency as conservator or re15 ceiver. 

16 ‘‘(3) GROUNDS FOR APPOINTMENT.—The grounds 

17 for appointing a conservator or receiver for a regu18 lated entity are as follows: 

19 ‘‘(A) ASSETS INSUFFICIENT FOR OBLIGA20 TIONS.—The assets of the regulated entity are 

21 less than the obligations of the regulated entity 

22 to its creditors and others. 

23 ‘‘(B) SUBSTANTIAL DISSIPATION.—Substan24 tial dissipation of assets or earnings due to— 

25 ‘‘(i) any violation of any provision of 

26 Federal or State law; or 
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1 ‘‘(ii) any unsafe or unsound practice. 

2 ‘‘(C) UNSAFE OR UNSOUND CONDITION.—An 

3 unsafe or unsound condition to transact busi4 ness. 

5 ‘‘(D) CEASE-AND-DESIST ORDERS.—Any 

6 willful violation of a cease-and-desist order that 

7 has become final. 

8 ‘‘(E) CONCEALMENT.—Any concealment of 

9 the books, papers, records, or assets of the regu10 lated entity, or any refusal to submit the books, 

11 papers, records, or affairs of the regulated entity, 

12 for inspection to any examiner or to any lawful 

13 agent of the Director. 

14 ‘‘(F) INABILITY TO MEET OBLIGATIONS.— 

15 The regulated entity is likely to be unable to pay 

16 its obligations or meet the demands of its credi17 tors in the normal course of business. 

18 ‘‘(G) LOSSES.—The regulated entity has in19 curred or is likely to incur losses that will de20 plete all or substantially all of its capital, and 

21 there is no reasonable prospect for the regulated 

22 entity to become adequately capitalized (as de23 fined in section 1364(a)(1)). 
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1 ‘‘(H) VIOLATIONS OF LAW.—Any violation 

2 of any law or regulation, or any unsafe or un3 sound practice or condition that is likely to— 

4 ‘‘(i) cause insolvency or substantial 

5 dissipation of assets or earnings; or 

6 ‘‘(ii) weaken the condition of the regu7 lated entity. 

8 ‘‘(I) CONSENT.—The regulated entity, by 

9 resolution of its board of directors or its share10 holders or members, consents to the appointment. 

11 ‘‘(J) UNDERCAPITALIZATION.—The regu12 lated entity is undercapitalized or significantly 

13 undercapitalized (as defined in section 

14 1364(a)(3) or in regulations issued pursuant to 

15 section 1364(b), as applicable), and— 

16 ‘‘(i) has no reasonable prospect of be17 coming adequately capitalized; 

18 ‘‘(ii) fails to become adequately cap19 italized, as required by— 

20 ‘‘(I) section 1365(a)(1) with re21 spect to an undercapitalized regulated 

22 entity; or 

23 ‘‘(II) section 1366(a)(1) with re24 spect to a significantly undercapital25 ized regulated entity; 
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1 ‘‘(iii) fails to submit a capital restora2 tion plan acceptable to the Agency within 

3 the time prescribed under section 1369C; or 

4 ‘‘(iv) materially fails to implement a 

5 capital restoration plan submitted and ac6 cepted under section 1369C. 

7 ‘‘(K) CRITICAL UNDERCAPITALIZATION.— 

8 The regulated entity is critically undercapital9 ized, as defined in section 1364(a)(4) or in regu10 lations issued pursuant to section 1364(b), as 

11 applicable. 

12 ‘‘(L) MONEY LAUNDERING.—The Attorney 

13 General notifies the Director in writing that the 

14 regulated entity has been found guilty of a 

15 criminal offense under section 1956 or 1957 of 

16 title 18, United States Code, or section 5322 or 

17 5324 of title 31, United States Code. 

18 ‘‘(4) JUDICIAL REVIEW.— 

19 ‘‘(A) IN GENERAL.—If the Agency is ap20 pointed conservator or receiver under this sec21 tion, the regulated entity may, within 30 days of 

22 such appointment, bring an action in the United 

23 States District Court for the judicial district in 

24 which the principal place of business of such reg25 ulated entity is located, or in the United States 
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1 District Court for the District of Columbia, for 

2 an order requiring the Agency to remove itself as 

3 conservator or receiver. 

4 ‘‘(B) REVIEW.—Upon the filing of an ac5 tion under subparagraph (A), the court shall, 

6 upon the merits, dismiss such action or direct 

7 the Agency to remove itself as such conservator 

8 or receiver. 

9 ‘‘(5) DIRECTORS NOT LIABLE FOR ACQUIESCING

10 IN APPOINTMENT OF CONSERVATOR OR RECEIVER.— 

11 The members of the board of directors of a regulated 

12 entity shall not be liable to the shareholders or credi13 tors of the regulated entity for acquiescing in or con14 senting in good faith to the appointment of the Agen15 cy as conservator or receiver for that regulated entity. 

16 ‘‘(6) AGENCY NOT SUBJECT TO ANY OTHER FED17 ERAL AGENCY.—When acting as conservator or re18 ceiver, the Agency shall not be subject to the direction 

19 or supervision of any other agency of the United 

20 States or any State in the exercise of the rights, pow21 ers, and privileges of the Agency. 

22 ‘‘(b) POWERS AND DUTIES OF THE AGENCY AS CON23 SERVATOR OR RECEIVER.— 

24 ‘‘(1) RULEMAKING AUTHORITY OF THE AGEN25 CY.—The Agency may prescribe such regulations as 
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1 the Agency determines to be appropriate regarding 

2 the conduct of conservatorships or receiverships. 

3 ‘‘(2) GENERAL POWERS.— 

4 ‘‘(A) SUCCESSOR TO REGULATED ENTITY.— 

5 The Agency shall, as conservator or receiver, and 

6 by operation of law, immediately succeed to— 

7 ‘‘(i) all rights, titles, powers, and 

8 privileges of the regulated entity, and of 

9 any stockholder, officer, or director of such 

10 regulated entity with respect to the regu11 lated entity and the assets of the regulated 

12 entity; and 

13 ‘‘(ii) title to the books, records, and as14 sets of any other legal custodian of such reg15 ulated entity. 

16 ‘‘(B) OPERATE THE REGULATED ENTITY.— 

17 The Agency may, as conservator or receiver— 

18 ‘‘(i) take over the assets of and operate 

19 the regulated entity with all the powers of 

20 the shareholders, the directors, and the offi21 cers of the regulated entity and conduct all 

22 business of the regulated entity; 

23 ‘‘(ii) collect all obligations and money 

24 due the regulated entity; 
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1 ‘‘(iii) perform all functions of the regu2 lated entity in the name of the regulated en3 tity which are consistent with the appoint4 ment as conservator or receiver; and 

5 ‘‘(iv) preserve and conserve the assets 

6 and property of such regulated entity. 

7 ‘‘(C) FUNCTIONS OF OFFICERS, DIRECTORS, 

8 AND SHAREHOLDERS OF A REGULATED ENTI9 TY.—The Agency may, by regulation or order, 

10 provide for the exercise of any function by any 

11 stockholder, director, or officer of any regulated 

12 entity for which the Agency has been named con13 servator or receiver. 

14 ‘‘(D) POWERS AS CONSERVATOR.—The 

15 Agency may, as conservator, take such action as 

16 may be— 

17 ‘‘(i) necessary to put the regulated en18 tity in a sound and solvent condition; and 

19 ‘‘(ii) appropriate to carry on the busi20 ness of the regulated entity and preserve 

21 and conserve the assets and property of the 

22 regulated entity. 

23 ‘‘(E) ADDITIONAL POWERS AS RECEIVER.— 

24 The Agency may, as receiver, place the regulated 

25 entity in liquidation and proceed to realize upon 
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1 the assets of the regulated entity, having due re2 gard to the conditions of the housing finance 

3 market. 

4 ‘‘(F) ORGANIZATION OF NEW REGULATED

5 ENTITIES.—The Agency may, as receiver, orga6 nize a successor regulated entity that will oper7 ate pursuant to subsection (i). 

8 ‘‘(G) TRANSFER OF ASSETS AND LIABIL9 ITIES.—The Agency may, as conservator or re10 ceiver, transfer any asset or liability of the regu11 lated entity in default without any approval, as12 signment, or consent with respect to such trans13 fer. Any Federal home loan bank may, with the 

14 approval of the Agency, acquire the assets of any 

15 Bank in conservatorship or receivership, and as16 sume the liabilities of such Bank 

17 ‘‘(H) PAYMENT OF VALID OBLIGATIONS.— 

18 The Agency, as conservator or receiver, shall, to 

19 the extent of proceeds realized from the perform20 ance of contracts or sale of the assets of a regu21 lated entity, pay all valid obligations of the reg22 ulated entity in accordance with the prescrip23 tions and limitations of this section. 

24 ‘‘(I) SUBPOENA AUTHORITY.— 

25 ‘‘(i) IN GENERAL.— 
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1 ‘‘(I) IN GENERAL.—The Agency 

2 may, as conservator or receiver, and 

3 for purposes of carrying out any 

4 power, authority, or duty with respect 

5 to a regulated entity (including deter6 mining any claim against the regu7 lated entity and determining and real8 izing upon any asset of any person in 

9 the course of collecting money due the 

10 regulated entity), exercise any power 

11 established under section 1348. 

12 ‘‘(II) APPLICABILITY OF LAW.— 

13 The provisions of section 1348 shall 

14 apply with respect to the exercise of 

15 any power exercised under this sub16 paragraph in the same manner as such 

17 provisions apply under that section. 

18 ‘‘(ii) AUTHORITY OF DIRECTOR.—A 

19 subpoena or subpoena duces tecum may be 

20 issued under clause (i) only by, or with the 

21 written approval of, the Director, or the des22 ignee of the Director. 

23 ‘‘(iii) RULE OF CONSTRUCTION.—This 

24 subsection shall not be construed to limit 

25 any rights that the Agency, in any capac-
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1 ity, might otherwise have under section 

2 1317 or 1379D. 

3 ‘‘(J) CONTRACTING FOR SERVICES.—The 

4 Agency may, as conservator or receiver, provide 

5 by contract for the carrying out of any of its 

6 functions, activities, actions, or duties as conser7 vator or receiver. 

8 ‘‘(K) INCIDENTAL POWERS.—The Agency 

9 may, as conservator or receiver— 

10 ‘‘(i) exercise all powers and authorities 

11 specifically granted to conservators or re12 ceivers, respectively, under this section, and 

13 such incidental powers as shall be necessary 

14 to carry out such powers; and 

15 ‘‘(ii) take any action authorized by 

16 this section, which the Agency determines is 

17 in the best interests of the regulated entity 

18 or the Agency. 

19 ‘‘(3) AUTHORITY OF RECEIVER TO DETERMINE

20 CLAIMS.— 

21 ‘‘(A) IN GENERAL.—The Agency may, as re22 ceiver, determine claims in accordance with the 

23 requirements of this subsection and any regula24 tions prescribed under paragraph (4). 
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1 ‘‘(B) NOTICE REQUIREMENTS.—The re2 ceiver, in any case involving the liquidation or 

3 winding up of the affairs of a closed regulated 

4 entity, shall— 

5 ‘‘(i) promptly publish a notice to the 

6 creditors of the regulated entity to present 

7 their claims, together with proof, to the re8 ceiver by a date specified in the notice 

9 which shall be not less than 90 days after 

10 the publication of such notice; and 

11 ‘‘(ii) republish such notice approxi12 mately 1 month and 2 months, respectively, 

13 after the publication under clause (i). 

14 ‘‘(C) MAILING REQUIRED.—The receiver 

15 shall mail a notice similar to the notice pub16 lished under subparagraph (B)(i) at the time of 

17 such publication to any creditor shown on the 

18 books of the regulated entity— 

19 ‘‘(i) at the last address of the creditor 

20 appearing in such books; or 

21 ‘‘(ii) upon discovery of the name and 

22 address of a claimant not appearing on the 

23 books of the regulated entity within 30 days 

24 after the discovery of such name and ad25 dress. 
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1 ‘‘(4) RULEMAKING AUTHORITY RELATING TO DE2 TERMINATION OF CLAIMS.—Subject to subsection (c), 

3 the Director may prescribe regulations regarding the 

4 allowance or disallowance of claims by the receiver 

5 and providing for administrative determination of 

6 claims and review of such determination. 

7 ‘‘(5) PROCEDURES FOR DETERMINATION OF

8 CLAIMS.— 

9 ‘‘(A) DETERMINATION PERIOD.— 

10 ‘‘(i) IN GENERAL.—Before the end of 

11 the 180-day period beginning on the date on 

12 which any claim against a regulated entity 

13 is filed with the Agency as receiver, the 

14 Agency shall determine whether to allow or 

15 disallow the claim and shall notify the 

16 claimant of any determination with respect 

17 to such claim. 

18 ‘‘(ii) EXTENSION OF TIME.—The pe19 riod described in clause (i) may be extended 

20 by a written agreement between the claim21 ant and the Agency. 

22 ‘‘(iii) MAILING OF NOTICE SUFFI23 CIENT.—The notification requirements of 

24 clause (i) shall be deemed to be satisfied if 

25 the notice of any determination with respect 
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1 to any claim is mailed to the last address 

2 of the claimant which appears— 

3 ‘‘(I) on the books of the regulated 

4 entity; 

5 ‘‘(II) in the claim filed by the 

6 claimant; or 

7 ‘‘(III) in documents submitted in 

8 proof of the claim. 

9 ‘‘(iv) CONTENTS OF NOTICE OF DIS10 ALLOWANCE.—If any claim filed under 

11 clause (i) is disallowed, the notice to the 

12 claimant shall contain— 

13 ‘‘(I) a statement of each reason for 

14 the disallowance; and 

15 ‘‘(II) the procedures available for 

16 obtaining agency review of the deter17 mination to disallow the claim or judi18 cial determination of the claim. 

19 ‘‘(B) ALLOWANCE OF PROVEN CLAIM.—The 

20 receiver shall allow any claim received on or be21 fore the date specified in the notice published 

22 under paragraph (3)(B)(i), or the date specified 

23 in the notice required under paragraph (3)(C), 

24 which is proved to the satisfaction of the receiver. 
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1 ‘‘(C) DISALLOWANCE OF CLAIMS FILED

2 AFTER END OF FILING PERIOD.—Claims filed 

3 after the date specified in the notice published 

4 under paragraph (3)(B)(i), or the date specified 

5 under paragraph (3)(C), shall be disallowed and 

6 such disallowance shall be final. 

7 ‘‘(D) AUTHORITY TO DISALLOW CLAIMS.— 

8 ‘‘(i) IN GENERAL.—The receiver may 

9 disallow any portion of any claim by a 

10 creditor or claim of security, preference, or 

11 priority which is not proved to the satisfac12 tion of the receiver. 

13 ‘‘(ii) PAYMENTS TO LESS THAN FULLY

14 SECURED CREDITORS.—In the case of a 

15 claim of a creditor against a regulated enti16 ty which is secured by any property or 

17 other asset of such regulated entity, the re18 ceiver— 

19 ‘‘(I) may treat the portion of such 

20 claim which exceeds an amount equal 

21 to the fair market value of such prop22 erty or other asset as an unsecured 

23 claim against the regulated entity; and 

24 ‘‘(II) may not make any payment 

25 with respect to such unsecured portion 
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1 of the claim other than in connection 

2 with the disposition of all claims of 

3 unsecured creditors of the regulated en4 tity. 

5 ‘‘(iii) EXCEPTIONS.—No provision of 

6 this paragraph shall apply with respect to 

7 any extension of credit from any Federal 

8 Reserve Bank, Federal home loan bank, or 

9 the Treasury of the United States. 

10 ‘‘(E) NO JUDICIAL REVIEW OF DETERMINA11 TION PURSUANT TO SUBPARAGRAPH (D).—No 

12 court may review the determination of the Agen13 cy under subparagraph (D) to disallow a claim. 

14 This subparagraph shall not effect the authority 

15 of a claimant to obtain de novo judicial review 

16 of a claim pursuant to paragraph (6). 

17 ‘‘(F) LEGAL EFFECT OF FILING.— 

18 ‘‘(i) STATUTE OF LIMITATION

19 TOLLED.—For purposes of any applicable 

20 statute of limitations, the filing of a claim 

21 with the receiver shall constitute a com22 mencement of an action. 

23 ‘‘(ii) NO PREJUDICE TO OTHER AC24 TIONS.—Subject to paragraph (10), the fil25 ing of a claim with the receiver shall not 
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1 prejudice any right of the claimant to con2 tinue any action which was filed before the 

3 date of the appointment of the receiver, sub4 ject to the determination of claims by the 

5 receiver. 

6 ‘‘(6) PROVISION FOR JUDICIAL DETERMINATION

7 OF CLAIMS.— 

8 ‘‘(A) IN GENERAL.—The claimant may file 

9 suit on a claim (or continue an action com10 menced before the appointment of the receiver) in 

11 the district or territorial court of the United 

12 States for the district within which the principal 

13 place of business of the regulated entity is located 

14 or the United States District Court for the Dis15 trict of Columbia (and such court shall have ju16 risdiction to hear such claim), before the end of 

17 the 60-day period beginning on the earlier of— 

18 ‘‘(i) the end of the period described in 

19 paragraph (5)(A)(i) with respect to any 

20 claim against a regulated entity for which 

21 the Agency is receiver; or 

22 ‘‘(ii) the date of any notice of disallow23 ance of such claim pursuant to paragraph 

24 (5)(A)(i). 
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1 ‘‘(B) STATUTE OF LIMITATIONS.—A claim 

2 shall be deemed to be disallowed (other than any 

3 portion of such claim which was allowed by the 

4 receiver), and such disallowance shall be final, 

5 and the claimant shall have no further rights or 

6 remedies with respect to such claim, if the claim7 ant fails, before the end of the 60-day period de8 scribed under subparagraph (A), to file suit on 

9 such claim (or continue an action commenced be10 fore the appointment of the receiver). 

11 ‘‘(7) REVIEW OF CLAIMS.— 

12 ‘‘(A) OTHER REVIEW PROCEDURES.— 

13 ‘‘(i) IN GENERAL.—The Agency shall 

14 establish such alternative dispute resolution 

15 processes as may be appropriate for the res16 olution of claims filed under paragraph 

17 (5)(A)(i). 

18 ‘‘(ii) CRITERIA.—In establishing alter19 native dispute resolution processes, the 

20 Agency shall strive for procedures which are 

21 expeditious, fair, independent, and low cost. 

22 ‘‘(iii) VOLUNTARY BINDING OR NON23 BINDING PROCEDURES.—The Agency may 

24 establish both binding and nonbinding proc25 esses, which may be conducted by any gov-
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1 ernment or private party. All parties, in2 cluding the claimant and the Agency, must 

3 agree to the use of the process in a par4 ticular case. 

5 ‘‘(B) CONSIDERATION OF INCENTIVES.—The 

6 Agency shall seek to develop incentives for claim7 ants to participate in the alternative dispute res8 olution process. 

9 ‘‘(8) EXPEDITED DETERMINATION OF CLAIMS.— 

10 ‘‘(A) ESTABLISHMENT REQUIRED.—The 

11 Agency shall establish a procedure for expedited 

12 relief outside of the routine claims process estab13 lished under paragraph (5) for claimants who— 

14 ‘‘(i) allege the existence of legally valid 

15 and enforceable or perfected security inter16 ests in assets of any regulated entity for 

17 which the Agency has been appointed re18 ceiver; and 

19 ‘‘(ii) allege that irreparable injury will 

20 occur if the routine claims procedure is fol21 lowed. 

22 ‘‘(B) DETERMINATION PERIOD.—Before the 

23 end of the 90-day period beginning on the date 

24 any claim is filed in accordance with the proce-
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1 dures established under subparagraph (A), the 

2 Director shall— 

3 ‘‘(i) determine— 

4 ‘‘(I) whether to allow or disallow 

5 such claim; or 

6 ‘‘(II) whether such claim should 

7 be determined pursuant to the proce8 dures established under paragraph (5); 

9 and 

10 ‘‘(ii) notify the claimant of the deter11 mination, and if the claim is disallowed, 

12 provide a statement of each reason for the 

13 disallowance and the procedure for obtain14 ing agency review or judicial determina15 tion. 

16 ‘‘(C) PERIOD FOR FILING OR RENEWING

17 SUIT.—Any claimant who files a request for ex18 pedited relief shall be permitted to file a suit, or 

19 to continue a suit filed before the appointment of 

20 the receiver, seeking a determination of the rights 

21 of the claimant with respect to such security in22 terest after the earlier of— 

23 ‘‘(i) the end of the 90-day period begin24 ning on the date of the filing of a request 

25 for expedited relief; or 
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1 ‘‘(ii) the date the Agency denies the 

2 claim. 

3 ‘‘(D) STATUTE OF LIMITATIONS.—If an ac4 tion described under subparagraph (C) is not 

5 filed, or the motion to renew a previously filed 

6 suit is not made, before the end of the 30-day pe7 riod beginning on the date on which such action 

8 or motion may be filed under subparagraph (B), 

9 the claim shall be deemed to be disallowed as of 

10 the end of such period (other than any portion 

11 of such claim which was allowed by the receiver), 

12 such disallowance shall be final, and the claim13 ant shall have no further rights or remedies with 

14 respect to such claim. 

15 ‘‘(E) LEGAL EFFECT OF FILING.— 

16 ‘‘(i) STATUTE OF LIMITATION

17 TOLLED.—For purposes of any applicable 

18 statute of limitations, the filing of a claim 

19 with the receiver shall constitute a com20 mencement of an action. 

21 ‘‘(ii) NO PREJUDICE TO OTHER AC22 TIONS.—Subject to paragraph (10), the fil23 ing of a claim with the receiver shall not 

24 prejudice any right of the claimant to con25 tinue any action that was filed before the 
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1 appointment of the receiver, subject to the 

2 determination of claims by the receiver. 

3 ‘‘(9) PAYMENT OF CLAIMS.— 

4 ‘‘(A) IN GENERAL.—The receiver may, in 

5 the discretion of the receiver, and to the extent 

6 funds are available from the assets of the regu7 lated entity, pay creditor claims, in such man8 ner and amounts as are authorized under this 

9 section, which are— 

10 ‘‘(i) allowed by the receiver; 

11 ‘‘(ii) approved by the Agency pursuant 

12 to a final determination pursuant to para13 graph (7) or (8); or 

14 ‘‘(iii) determined by the final judgment 

15 of any court of competent jurisdiction. 

16 ‘‘(B) AGREEMENTS AGAINST THE INTEREST

17 OF THE AGENCY.—No agreement that tends to 

18 diminish or defeat the interest of the Agency in 

19 any asset acquired by the Agency as receiver 

20 under this section shall be valid against the 

21 Agency unless such agreement is in writing, and 

22 executed by an authorized official of the regu23 lated entity, except that such requirements for 

24 qualified financial contracts shall be applied in 

25 a manner consistent with reasonable business 
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1 trading practices in the financial contracts mar2 ket. 

3 ‘‘(C) PAYMENT OF DIVIDENDS ON CLAIMS.— 

4 The receiver may, in the sole discretion of the re5 ceiver, pay from the assets of the regulated entity 

6 dividends on proved claims at any time, and no 

7 liability shall attach to the Agency, by reason of 

8 any such payment, for failure to pay dividends 

9 to a claimant whose claim is not proved at the 

10 time of any such payment. 

11 ‘‘(D) RULEMAKING AUTHORITY OF THE DI12 RECTOR.—The Director may prescribe such 

13 rules, including definitions of terms, as the Di14 rector deems appropriate to establish a single 

15 uniform interest rate for, or to make payments 

16 of post-insolvency interest to creditors holding 

17 proven claims against the receivership estates of 

18 regulated entities following satisfaction by the re19 ceiver of the principal amount of all creditor 

20 claims. 

21 ‘‘(10) SUSPENSION OF LEGAL ACTIONS.— 

22 ‘‘(A) IN GENERAL.—After the appointment 

23 of a conservator or receiver for a regulated enti24 ty, the conservator or receiver may, in any judi25 cial action or proceeding to which such regulated 
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1 entity is or becomes a party, request a stay for 

2 a period not to exceed— 

3 ‘‘(i) 45 days, in the case of any conser4 vator; and 

5 ‘‘(ii) 90 days, in the case of any re6 ceiver. 

7 ‘‘(B) GRANT OF STAY BY ALL COURTS RE8 QUIRED.—Upon receipt of a request by any con9 servator or receiver under subparagraph (A) for 

10 a stay of any judicial action or proceeding in 

11 any court with jurisdiction of such action or 

12 proceeding, the court shall grant such stay as to 

13 all parties. 

14 ‘‘(11) ADDITIONAL RIGHTS AND DUTIES.— 

15 ‘‘(A) PRIOR FINAL ADJUDICATION.—The 

16 Agency shall abide by any final unappealable 

17 judgment of any court of competent jurisdiction 

18 which was rendered before the appointment of 

19 the Agency as conservator or receiver. 

20 ‘‘(B) RIGHTS AND REMEDIES OF CONSER21 VATOR OR RECEIVER.—In the event of any ap22 pealable judgment, the Agency as conservator or 

23 receiver shall— 

24 ‘‘(i) have all the rights and remedies 

25 available to the regulated entity (before the 
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1 appointment of such conservator or receiver) 

2 and the Agency, including removal to Fed3 eral court and all appellate rights; and 

4 ‘‘(ii) not be required to post any bond 

5 in order to pursue such remedies. 

6 ‘‘(C) NO ATTACHMENT OR EXECUTION.—No 

7 attachment or execution may issue by any court 

8 upon assets in the possession of the receiver. 

9 ‘‘(D) LIMITATION ON JUDICIAL REVIEW.— 

10 Except as otherwise provided in this subsection, 

11 no court shall have jurisdiction over— 

12 ‘‘(i) any claim or action for payment 

13 from, or any action seeking a determination 

14 of rights with respect to, the assets of any 

15 regulated entity for which the Agency has 

16 been appointed receiver; or 

17 ‘‘(ii) any claim relating to any act or 

18 omission of such regulated entity or the 

19 Agency as receiver. 

20 ‘‘(E) DISPOSITION OF ASSETS.—In exer21 cising any right, power, privilege, or authority 

22 as conservator or receiver in connection with any 

23 sale or disposition of assets of a regulated entity 

24 for which the Agency has been appointed conser25 vator or receiver, the Agency shall conduct its 
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1 operations in a manner which maintains sta2 bility in the housing finance markets and, to the 

3 extent consistent with that goal— 

4 ‘‘(i) maximizes the net present value 

5 return from the sale or disposition of such 

6 assets; 

7 ‘‘(ii) minimizes the amount of any loss 

8 realized in the resolution of cases; and 

9 ‘‘(iii) ensures adequate competition 

10 and fair and consistent treatment of 

11 offerors. 

12 ‘‘(12) STATUTE OF LIMITATIONS FOR ACTIONS

13 BROUGHT BY CONSERVATOR OR RECEIVER.— 

14 ‘‘(A) IN GENERAL.—Notwithstanding any 

15 provision of any contract, the applicable statute 

16 of limitations with regard to any action brought 

17 by the Agency as conservator or receiver shall 

18 be— 

19 ‘‘(i) in the case of any contract claim, 

20 the longer of— 

21 ‘‘(I) the 6-year period beginning 

22 on the date the claim accrues; or 

23 ‘‘(II) the period applicable under 

24 State law; and 
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1 ‘‘(ii) in the case of any tort claim, the 

2 longer of— 

3 ‘‘(I) the 3-year period beginning 

4 on the date the claim accrues; or 

5 ‘‘(II) the period applicable under 

6 State law. 

7 ‘‘(B) DETERMINATION OF THE DATE ON

8 WHICH A CLAIM ACCRUES.—For purposes of sub9 paragraph (A), the date on which the statute of 

10 limitations begins to run on any claim described 

11 in such subparagraph shall be the later of— 

12 ‘‘(i) the date of the appointment of the 

13 Agency as conservator or receiver; or 

14 ‘‘(ii) the date on which the cause of ac15 tion accrues. 

16 ‘‘(13) REVIVAL OF EXPIRED STATE CAUSES OF

17 ACTION.— 

18 ‘‘(A) IN GENERAL.—In the case of any tort 

19 claim described under subparagraph (B) for 

20 which the statute of limitations applicable under 

21 State law with respect to such claim has expired 

22 not more than 5 years before the appointment of 

23 the Agency as conservator or receiver, the Agency 

24 may bring an action as conservator or receiver 

25 on such claim without regard to the expiration 
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1 of the statute of limitation applicable under 

2 State law. 

3 ‘‘(B) CLAIMS DESCRIBED.—A tort claim re4 ferred to under subparagraph (A) is a claim 

5 arising from fraud, intentional misconduct re6 sulting in unjust enrichment, or intentional mis7 conduct resulting in substantial loss to the regu8 lated entity. 

9 ‘‘(14) ACCOUNTING AND RECORDKEEPING RE10 QUIREMENTS.— 

11 ‘‘(A) IN GENERAL.—The Agency as conser12 vator or receiver shall, consistent with the ac13 counting and reporting practices and procedures 

14 established by the Agency, maintain a full ac15 counting of each conservatorship and receiver16 ship or other disposition of a regulated entity in 

17 default. 

18 ‘‘(B) ANNUAL ACCOUNTING OR REPORT.— 

19 With respect to each conservatorship or receiver20 ship, the Agency shall make an annual account21 ing or report available to the Board, the Comp22 troller General of the United States, the Com23 mittee on Banking, Housing, and Urban Affairs 

24 of the Senate, and the Committee on Financial 

25 Services of the House of Representatives. 
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1 ‘‘(C) AVAILABILITY OF REPORTS.—Any re2 port prepared under subparagraph (B) shall be 

3 made available by the Agency upon request to 

4 any shareholder of a regulated entity or any 

5 member of the public. 

6 ‘‘(D) RECORDKEEPING REQUIREMENT.— 

7 After the end of the 6-year period beginning on 

8 the date that the conservatorship or receivership 

9 is terminated by the Director, the Agency may 

10 destroy any records of such regulated entity 

11 which the Agency, in the discretion of the Agen12 cy, determines to be unnecessary unless directed 

13 not to do so by a court of competent jurisdiction 

14 or governmental agency, or prohibited by law. 

15 ‘‘(15) FRAUDULENT TRANSFERS.— 

16 ‘‘(A) IN GENERAL.—The Agency, as conser17 vator or receiver, may avoid a transfer of any 

18 interest of a regulated entity-affiliated party, or 

19 any person who the conservator or receiver deter20 mines is a debtor of the regulated entity, in 

21 property, or any obligation incurred by such 

22 party or person, that was made within 5 years 

23 of the date on which the Agency was appointed 

24 conservator or receiver, if such party or person 

25 voluntarily or involuntarily made such transfer 
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1 or incurred such liability with the intent to 

2 hinder, delay, or defraud the regulated entity, 

3 the Agency, the conservator, or receiver. 

4 ‘‘(B) RIGHT OF RECOVERY.—To the extent a 

5 transfer is avoided under subparagraph (A), the 

6 conservator or receiver may recover, for the ben7 efit of the regulated entity, the property trans8 ferred, or, if a court so orders, the value of such 

9 property (at the time of such transfer) from— 

10 ‘‘(i) the initial transferee of such trans11 fer or the regulated entity-affiliated party 

12 or person for whose benefit such transfer 

13 was made; or 

14 ‘‘(ii) any immediate or mediate trans15 feree of any such initial transferee. 

16 ‘‘(C) RIGHTS OF TRANSFEREE OR OBLI17 GEE.—The conservator or receiver may not re18 cover under subparagraph (B) from— 

19 ‘‘(i) any transferee that takes for value, 

20 including satisfaction or securing of a 

21 present or antecedent debt, in good faith; or 

22 ‘‘(ii) any immediate or mediate good 

23 faith transferee of such transferee. 

24 ‘‘(D) RIGHTS UNDER THIS PARAGRAPH.— 

25 The rights under this paragraph of the conser-
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1 vator or receiver described under subparagraph 

2 (A) shall be superior to any rights of a trustee 

3 or any other party (other than any party which 

4 is a Federal agency) under title 11, United 

5 States Code. 

6 ‘‘(16) ATTACHMENT OF ASSETS AND OTHER IN7 JUNCTIVE RELIEF.—Subject to paragraph (17), any 

8 court of competent jurisdiction may, at the request of 

9 the conservator or receiver, issue an order in accord10 ance with Rule 65 of the Federal Rules of Civil Proce11 dure, including an order placing the assets of any 

12 person designated by the Agency or such conservator 

13 under the control of the court, and appointing a 

14 trustee to hold such assets. 

15 ‘‘(17) STANDARDS OF PROOF.—Rule 65 of the 

16 Federal Rules of Civil Procedure shall apply with re17 spect to any proceeding under paragraph (16) with18 out regard to the requirement of such rule that the ap19 plicant show that the injury, loss, or damage is irrep20 arable and immediate. 

21 ‘‘(18) TREATMENT OF CLAIMS ARISING FROM

22 BREACH OF CONTRACTS EXECUTED BY THE RECEIVER

23 OR CONSERVATOR.— 

24 ‘‘(A) IN GENERAL.—Notwithstanding any 

25 other provision of this subsection, any final and 
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1 unappealable judgment for monetary damages 

2 entered against a receiver or conservator for the 

3 breach of an agreement executed or approved in 

4 writing by such receiver or conservator after the 

5 date of its appointment, shall be paid as an ad6 ministrative expense of the receiver or conser7 vator. 

8 ‘‘(B) NO LIMITATION OF POWER.—Nothing 

9 in this paragraph shall be construed to limit the 

10 power of a receiver or conservator to exercise any 

11 rights under contract or law, including to termi12 nate, breach, cancel, or otherwise discontinue 

13 such agreement. 

14 ‘‘(19) GENERAL EXCEPTIONS.— 

15 ‘‘(A) LIMITATIONS.—The rights of a conser16 vator or receiver appointed under this section 

17 shall be subject to the limitations on the powers 

18 of a receiver under sections 402 through 407 of 

19 the Federal Deposit Insurance Corporation Im20 provement Act of 1991 (12 U.S.C. 4402 through 

21 4407). 

22 ‘‘(B) MORTGAGES HELD IN TRUST.— 

23 ‘‘(i) IN GENERAL.—Any mortgage, pool 

24 of mortgages, or interest in a pool of mort25 gages, held in trust, custodial, or agency ca-
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1 pacity by a regulated entity for the benefit 

2 of persons other than the regulated entity 

3 shall not be available to satisfy the claims 

4 of creditors generally. 

5 ‘‘(ii) HOLDING OF MORTGAGES.—Any 

6 mortgage, pool of mortgages, or interest in 

7 a pool of mortgages, described under clause 

8 (i) shall be held by the conservator or re9 ceiver appointed under this section for the 

10 beneficial owners of such mortgage, pool of 

11 mortgages, or interest in a pool of mort12 gages in accordance with the terms of the 

13 agreement creating such trust, custodial, or 

14 other agency arrangement. 

15 ‘‘(iii) LIABILITY OF RECEIVER.—The 

16 liability of a receiver appointed under this 

17 section for damages shall, in the case of any 

18 contingent or unliquidated claim relating to 

19 the mortgages held in trust, be estimated in 

20 accordance set forth in the regulations of the 

21 Director. 

22 ‘‘(c) PRIORITY OF EXPENSES AND UNSECURED

23 CLAIMS.— 

24 ‘‘(1) IN GENERAL.—Unsecured claims against a 

25 regulated entity, or a receiver, that are proven to the 
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1 satisfaction of the receiver shall have priority in the 

2 following order: 

3 ‘‘(A) Administrative expenses of the re4 ceiver. 

5 ‘‘(B) Any other general or senior liability of 

6 the regulated entity and claims of other Federal 

7 home loan banks arising from their payment ob8 ligations (including joint and several payment 

9 obligations). 

10 ‘‘(C) Any obligation subordinated to general 

11 creditors. 

12 ‘‘(D) Any obligation to shareholders or 

13 members arising as a result of their status as 

14 shareholder or members. 

15 ‘‘(2) CREDITORS SIMILARLY SITUATED.—All 

16 creditors that are similarly situated under paragraph 

17 (1) shall be treated in a similar manner, except that 

18 the Agency may make such other payments to credi19 tors necessary to maximize the present value return 

20 from the sale or disposition or such regulated entity’s 

21 assets or to minimize the amount of any loss realized 

22 in the resolution of cases so long as all creditors simi23 larly situated receive not less than the amount pro24 vided under subsection (e)(2). 
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1 ‘‘(3) DEFINITION.—The term ‘administrative ex2 penses of the receiver’ shall include the actual, nec3 essary costs and expenses incurred by the receiver in 

4 preserving the assets of the regulated entity or liqui5 dating or otherwise resolving the affairs of the regu6 lated entity. Such expenses shall include obligations 

7 that are incurred by the receiver after appointment as 

8 receiver that the Director determines are necessary 

9 and appropriate to facilitate the smooth and orderly 

10 liquidation or other resolution of the regulated entity. 

11 ‘‘(d) PROVISIONS RELATING TO CONTRACTS ENTERED

12 INTO BEFORE APPOINTMENT OF CONSERVATOR OR RE13 CEIVER.— 

14 ‘‘(1) AUTHORITY TO REPUDIATE CONTRACTS.— 

15 In addition to any other rights a conservator or re16 ceiver may have, the conservator or receiver for any 

17 regulated entity may disaffirm or repudiate any con18 tract or lease— 

19 ‘‘(A) to which such regulated entity is a 

20 party; 

21 ‘‘(B) the performance of which the conser22 vator or receiver, in its sole discretion, deter23 mines to be burdensome; and 

24 ‘‘(C) the disaffirmance or repudiation of 

25 which the conservator or receiver determines, in 
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1 its sole discretion, will promote the orderly ad2 ministration of the affairs of the regulated enti3 ty. 

4 ‘‘(2) TIMING OF REPUDIATION.—The conservator 

5 or receiver shall determine whether or not to exercise 

6 the rights of repudiation under this subsection within 

7 a reasonable period following such appointment. 

8 ‘‘(3) CLAIMS FOR DAMAGES FOR REPUDIATION.— 

9 ‘‘(A) IN GENERAL.—Except as otherwise 

10 provided under subparagraph (C) and para11 graphs (4), (5), and (6), the liability of the con12 servator or receiver for the disaffirmance or re13 pudiation of any contract pursuant to para14 graph (1) shall be— 

15 ‘‘(i) limited to actual direct compen16 satory damages; and 

17 ‘‘(ii) determined as of— 

18 ‘‘(I) the date of the appointment 

19 of the conservator or receiver; or 

20 ‘‘(II) in the case of any contract 

21 or agreement referred to in paragraph 

22 (8), the date of the disaffirmance or re23 pudiation of such contract or agree24 ment. 
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1 ‘‘(B) NO LIABILITY FOR OTHER DAMAGES.— 

2 For purposes of subparagraph (A), the term ‘ac3 tual direct compensatory damages’ shall not in4 clude— 

5 ‘‘(i) punitive or exemplary damages; 

6 ‘‘(ii) damages for lost profits or oppor7 tunity; or 

8 ‘‘(iii) damages for pain and suffering. 

9 ‘‘(C) MEASURE OF DAMAGES FOR REPUDI10 ATION OF FINANCIAL CONTRACTS.—In the case of 

11 any qualified financial contract or agreement to 

12 which paragraph (8) applies, compensatory 

13 damages shall be— 

14 ‘‘(i) deemed to include normal and rea15 sonable costs of cover or other reasonable 

16 measures of damages utilized in the indus17 tries for such contract and agreement 

18 claims; and 

19 ‘‘(ii) paid in accordance with this sub20 section and subsection (e), except as other21 wise specifically provided in this section. 

22 ‘‘(4) LEASES UNDER WHICH THE REGULATED

23 ENTITY IS THE LESSEE.— 

24 ‘‘(A) IN GENERAL.—If the conservator or re25 ceiver disaffirms or repudiates a lease under 
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1 which the regulated entity was the lessee, the con2 servator or receiver shall not be liable for any 

3 damages (other than damages determined under 

4 subparagraph (B)) for the disaffirmance or repu5 diation of such lease. 

6 ‘‘(B) PAYMENTS OF RENT.—Notwith7 standing subparagraph (A), the lessor under a 

8 lease to which that subparagraph applies shall— 

9 ‘‘(i) be entitled to the contractual rent 

10 accruing before the later of the date— 

11 ‘‘(I) the notice of disaffirmance or 

12 repudiation is mailed; or 

13 ‘‘(II) the disaffirmance or repudi14 ation becomes effective, unless the lessor 

15 is in default or breach of the terms of 

16 the lease; 

17 ‘‘(ii) have no claim for damages under 

18 any acceleration clause or other penalty 

19 provision in the lease; and 

20 ‘‘(iii) have a claim for any unpaid 

21 rent, subject to all appropriate offsets and 

22 defenses, due as of the date of the appoint23 ment, which shall be paid in accordance 

24 with this subsection and subsection (e). 
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1 ‘‘(5) LEASES UNDER WHICH THE REGULATED

2 ENTITY IS THE LESSOR.— 

3 ‘‘(A) IN GENERAL.—If the conservator or re4 ceiver repudiates an unexpired written lease of 

5 real property of the regulated entity under which 

6 the regulated entity is the lessor and the lessee is 

7 not, as of the date of such repudiation, in de8 fault, the lessee under such lease may either— 

9 ‘‘(i) treat the lease as terminated by 

10 such repudiation; or 

11 ‘‘(ii) remain in possession of the lease12 hold interest for the balance of the term of 

13 the lease, unless the lessee defaults under the 

14 terms of the lease after the date of such re15 pudiation. 

16 ‘‘(B) PROVISIONS APPLICABLE TO LESSEE

17 REMAINING IN POSSESSION.—If any lessee under 

18 a lease described under subparagraph (A) re19 mains in possession of a leasehold interest under 

20 clause (ii) of such subparagraph— 

21 ‘‘(i) the lessee— 

22 ‘‘(I) shall continue to pay the con23 tractual rent pursuant to the terms of 

24 the lease after the date of the repudi25 ation of such lease; and 
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1 ‘‘(II) may offset against any rent 

2 payment which accrues after the date 

3 of the repudiation of the lease, and any 

4 damages which accrue after such date 

5 due to the nonperformance of any obli6 gation of the regulated entity under the 

7 lease after such date; and 

8 ‘‘(ii) the conservator or receiver shall 

9 not be liable to the lessee for any damages 

10 arising after such date as a result of the re11 pudiation other than the amount of any off12 set allowed under clause (i)(II). 

13 ‘‘(6) CONTRACTS FOR THE SALE OF REAL PROP14 ERTY.— 

15 ‘‘(A) IN GENERAL.—If the conservator or re16 ceiver repudiates any contract for the sale of real 

17 property and the purchaser of such real property 

18 under such contract is in possession, and is not, 

19 as of the date of such repudiation, in default, 

20 such purchaser may either— 

21 ‘‘(i) treat the contract as terminated by 

22 such repudiation; or 

23 ‘‘(ii) remain in possession of such real 

24 property. 
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1 ‘‘(B) PROVISIONS APPLICABLE TO PUR2 CHASER REMAINING IN POSSESSION.—If any 

3 purchaser of real property under any contract 

4 described under subparagraph (A) remains in 

5 possession of such property under clause (ii) of 

6 such subparagraph— 

7 ‘‘(i) the purchaser— 

8 ‘‘(I) shall continue to make all 

9 payments due under the contract after 

10 the date of the repudiation of the con11 tract; and 

12 ‘‘(II) may offset against any such 

13 payments any damages which accrue 

14 after such date due to the nonperform15 ance (after such date) of any obligation 

16 of the regulated entity under the con17 tract; and 

18 ‘‘(ii) the conservator or receiver shall— 

19 ‘‘(I) not be liable to the purchaser 

20 for any damages arising after such 

21 date as a result of the repudiation 

22 other than the amount of any offset al23 lowed under clause (i)(II); 
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1 ‘‘(II) deliver title to the purchaser 

2 in accordance with the provisions of 

3 the contract; and 

4 ‘‘(III) have no obligation under 

5 the contract other than the performance 

6 required under subclause (II). 

7 ‘‘(C) ASSIGNMENT AND SALE ALLOWED.— 

8 ‘‘(i) IN GENERAL.—No provision of 

9 this paragraph shall be construed as lim10 iting the right of the conservator or receiver 

11 to assign the contract described under sub12 paragraph (A), and sell the property subject 

13 to the contract and the provisions of this 

14 paragraph. 

15 ‘‘(ii) NO LIABILITY AFTER ASSIGNMENT

16 AND SALE.—If an assignment and sale de17 scribed under clause (i) is consummated, the 

18 conservator or receiver shall have no further 

19 liability under the contract described under 

20 subparagraph (A), or with respect to the 

21 real property which was the subject of such 

22 contract. 

23 ‘‘(7) PROVISIONS APPLICABLE TO SERVICE CON24 TRACTS.— 
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1 ‘‘(A) SERVICES PERFORMED BEFORE AP2 POINTMENT.—In the case of any contract for 

3 services between any person and any regulated 

4 entity for which the Agency has been appointed 

5 conservator or receiver, any claim of such person 

6 for services performed before the appointment of 

7 the conservator or the receiver shall be— 

8 ‘‘(i) a claim to be paid in accordance 

9 with subsections (b) and (e); and 

10 ‘‘(ii) deemed to have arisen as of the 

11 date the conservator or receiver was ap12 pointed. 

13 ‘‘(B) SERVICES PERFORMED AFTER AP14 POINTMENT AND PRIOR TO REPUDIATION.—If, in 

15 the case of any contract for services described 

16 under subparagraph (A), the conservator or re17 ceiver accepts performance by the other person 

18 before the conservator or receiver makes any de19 termination to exercise the right of repudiation 

20 of such contract under this section— 

21 ‘‘(i) the other party shall be paid 

22 under the terms of the contract for the serv23 ices performed; and 
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1 ‘‘(ii) the amount of such payment shall 

2 be treated as an administrative expense of 

3 the conservatorship or receivership. 

4 ‘‘(C) ACCEPTANCE OF PERFORMANCE NO

5 BAR TO SUBSEQUENT REPUDIATION.—The ac6 ceptance by any conservator or receiver of serv7 ices referred to under subparagraph (B) in con8 nection with a contract described in such sub9 paragraph shall not affect the right of the conser10 vator or receiver to repudiate such contract 

11 under this section at any time after such per12 formance. 

13 ‘‘(8) CERTAIN QUALIFIED FINANCIAL CON14 TRACTS.— 

15 ‘‘(A) RIGHTS OF PARTIES TO CONTRACTS.— 

16 Subject to paragraphs (9) and (10) and notwith17 standing any other provision of this Act, any 

18 other Federal law, or the law of any State, no 

19 person shall be stayed or prohibited from exer20 cising— 

21 ‘‘(i) any right such person has to cause 

22 the termination, liquidation, or acceleration 

23 of any qualified financial contract with a 

24 regulated entity that arises upon the ap25 pointment of the Agency as receiver for such 
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1 regulated entity at any time after such ap2 pointment; 

3 ‘‘(ii) any right under any security 

4 agreement or arrangement or other credit 

5 enhancement relating to one or more quali6 fied financial contracts described in clause 

7 (i); or 

8 ‘‘(iii) any right to offset or net out any 

9 termination value, payment amount, or 

10 other transfer obligation arising under or in 

11 connection with 1 or more contracts and 

12 agreements described in clause (i), includ13 ing any master agreement for such con14 tracts or agreements. 

15 ‘‘(B) APPLICABILITY OF OTHER PROVI16 SIONS.—Paragraph (10) of subsection (b) shall 

17 apply in the case of any judicial action or pro18 ceeding brought against any receiver referred to 

19 under subparagraph (A), or the regulated entity 

20 for which such receiver was appointed, by any 

21 party to a contract or agreement described under 

22 subparagraph (A)(i) with such regulated entity. 

23 ‘‘(C) CERTAIN TRANSFERS NOT AVOID24 ABLE.— 
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1 ‘‘(i) IN GENERAL.—Notwithstanding 

2 paragraph (11) or any other Federal or 

3 State laws relating to the avoidance of pref4 erential or fraudulent transfers, the Agency, 

5 whether acting as such or as conservator or 

6 receiver of a regulated entity, may not 

7 avoid any transfer of money or other prop8 erty in connection with any qualified finan9 cial contract with a regulated entity. 

10 ‘‘(ii) EXCEPTION FOR CERTAIN TRANS11 FERS.—Clause (i) shall not apply to any 

12 transfer of money or other property in con13 nection with any qualified financial con14 tract with a regulated entity if the Agency 

15 determines that the transferee had actual 

16 intent to hinder, delay, or defraud such reg17 ulated entity, the creditors of such regulated 

18 entity, or any conservator or receiver ap19 pointed for such regulated entity. 

20 ‘‘(D) CERTAIN CONTRACTS AND AGREE21 MENTS DEFINED.—In this subsection: 

22 ‘‘(i) QUALIFIED FINANCIAL CON23 TRACT.—The term ‘qualified financial con24 tract’ means any securities contract, com25 modity contract, forward contract, repur-
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1 chase agreement, swap agreement, and any 

2 similar agreement that the Agency deter3 mines by regulation, resolution, or order to 

4 be a qualified financial contract for pur5 poses of this paragraph. 

6 ‘‘(ii) SECURITIES CONTRACT.—The 

7 term ‘securities contract’— 

8 ‘‘(I) means a contract for the pur9 chase, sale, or loan of a security, a cer10 tificate of deposit, a mortgage loan, or 

11 any interest in a mortgage loan, a 

12 group or index of securities, certificates 

13 of deposit, or mortgage loans or inter14 ests therein (including any interest 

15 therein or based on the value thereof) 

16 or any option on any of the foregoing, 

17 including any option to purchase or 

18 sell any such security, certificate of de19 posit, mortgage loan, interest, group or 

20 index, or option, and including any re21 purchase or reverse repurchase trans22 action on any such security, certificate 

23 of deposit, mortgage loan, interest, 

24 group or index, or option; 
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1 ‘‘(II) does not include any pur2 chase, sale, or repurchase obligation 

3 under a participation in a commercial 

4 mortgage loan unless the Agency deter5 mines by regulation, resolution, or 

6 order to include any such agreement 

7 within the meaning of such term; 

8 ‘‘(III) means any option entered 

9 into on a national securities exchange 

10 relating to foreign currencies; 

11 ‘‘(IV) means the guarantee by or 

12 to any securities clearing agency of 

13 any settlement of cash, securities, cer14 tificates of deposit, mortgage loans or 

15 interests therein, group or index of se16 curities, certificates of deposit, or mort17 gage loans or interests therein (includ18 ing any interest therein or based on 

19 the value thereof) or option on any of 

20 the foregoing, including any option to 

21 purchase or sell any such security, cer22 tificate of deposit, mortgage loan, in23 terest, group or index, or option; 

24 ‘‘(V) means any margin loan; 
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1 ‘‘(VI) means any other agreement 

2 or transaction that is similar to any 

3 agreement or transaction referred to in 

4 this clause; 

5 ‘‘(VII) means any combination of 

6 the agreements or transactions referred 

7 to in this clause; 

8 ‘‘(VIII) means any option to enter 

9 into any agreement or transaction re10 ferred to in this clause; 

11 ‘‘(IX) means a master agreement 

12 that provides for an agreement or 

13 transaction referred to in subclause (I), 

14 (III), (IV), (V), (VI), (VII), or (VIII), 

15 together with all supplements to any 

16 such master agreement, without regard 

17 to whether the master agreement pro18 vides for an agreement or transaction 

19 that is not a securities contract under 

20 this clause, except that the master 

21 agreement shall be considered to be a 

22 securities contract under this clause 

23 only with respect to each agreement or 

24 transaction under the master agree25 ment that is referred to in subclause 
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1 (I), (III), (IV), (V), (VI), (VII), or 

2 (VIII); and 

3 ‘‘(X) means any security agree4 ment or arrangement or other credit 

5 enhancement related to any agreement 

6 or transaction referred to in this 

7 clause, including any guarantee or re8 imbursement obligation in connection 

9 with any agreement or transaction re10 ferred to in this clause. 

11 ‘‘(iii) COMMODITY CONTRACT.—The 

12 term ‘commodity contract’ means— 

13 ‘‘(I) with respect to a futures com14 mission merchant, a contract for the 

15 purchase or sale of a commodity for fu16 ture delivery on, or subject to the rules 

17 of, a contract market or board of trade; 

18 ‘‘(II) with respect to a foreign fu19 tures commission merchant, a foreign 

20 future; 

21 ‘‘(III) with respect to a leverage 

22 transaction merchant, a leverage trans23 action; 

24 ‘‘(IV) with respect to a clearing 

25 organization, a contract for the pur-
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1 chase or sale of a commodity for future 

2 delivery on, or subject to the rules of, 

3 a contract market or board of trade 

4 that is cleared by such clearing organi5 zation, or commodity option traded on, 

6 or subject to the rules of, a contract 

7 market or board of trade that is 

8 cleared by such clearing organization; 

9 ‘‘(V) with respect to a commodity 

10 options dealer, a commodity option; 

11 ‘‘(VI) any other agreement or 

12 transaction that is similar to any 

13 agreement or transaction referred to in 

14 this clause; 

15 ‘‘(VII) any combination of the 

16 agreements or transactions referred to 

17 in this clause; 

18 ‘‘(VIII) any option to enter into 

19 any agreement or transaction referred 

20 to in this clause; 

21 ‘‘(IX) a master agreement that 

22 provides for an agreement or trans23 action referred to in subclause (I), (II), 

24 (III), (IV), (V), (VI), (VII), or (VIII), 

25 together with all supplements to any 
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1 such master agreement, without regard 

2 to whether the master agreement pro3 vides for an agreement or transaction 

4 that is not a commodity contract 

5 under this clause, except that the mas6 ter agreement shall be considered to be 

7 a commodity contract under this clause 

8 only with respect to each agreement or 

9 transaction under the master agree10 ment that is referred to in subclause 

11 (I), (II), (III), (IV), (V), (VI), (VII), or 

12 (VIII); or 

13 ‘‘(X) any security agreement or 

14 arrangement or other credit enhance15 ment related to any agreement or 

16 transaction referred to in this clause, 

17 including any guarantee or reimburse18 ment obligation in connection with 

19 any agreement or transaction referred 

20 to in this clause. 

21 ‘‘(iv) FORWARD CONTRACT.—The term 

22 ‘forward contract’ means— 

23 ‘‘(I) a contract (other than a com24 modity contract) for the purchase, sale, 

25 or transfer of a commodity or any 
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1 similar good, article, service, right, or 

2 interest which is presently or in the fu3 ture becomes the subject of dealing in 

4 the forward contract trade, or product 

5 or byproduct thereof, with a maturity 

6 date more than 2 days after the date 

7 the contract is entered into, including, 

8 a repurchase transaction, reverse re9 purchase transaction, consignment, 

10 lease, swap, hedge transaction, deposit, 

11 loan, option, allocated transaction, 

12 unallocated transaction, or any other 

13 similar agreement; 

14 ‘‘(II) any combination of agree15 ments or transactions referred to in 

16 subclauses (I) and (III); 

17 ‘‘(III) any option to enter into 

18 any agreement or transaction referred 

19 to in subclause (I) or (II); 

20 ‘‘(IV) a master agreement that 

21 provides for an agreement or trans22 action referred to in subclauses (I), 

23 (II), or (III), together with all supple24 ments to any such master agreement, 

25 without regard to whether the master 
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1 agreement provides for an agreement 

2 or transaction that is not a forward 

3 contract under this clause, except that 

4 the master agreement shall be consid5 ered to be a forward contract under 

6 this clause only with respect to each 

7 agreement or transaction under the 

8 master agreement that is referred to in 

9 subclause (I), (II), or (III); or 

10 ‘‘(V) any security agreement or 

11 arrangement or other credit enhance12 ment related to any agreement or 

13 transaction referred to in subclause (I), 

14 (II), (III), or (IV), including any 

15 guarantee or reimbursement obligation 

16 in connection with any agreement or 

17 transaction referred to in any such 

18 subclause. 

19 ‘‘(v) REPURCHASE AGREEMENT.—The 

20 term ‘repurchase agreement’ (which defini21 tion also applies to a reverse repurchase 

22 agreement)— 

23 ‘‘(I) means an agreement, includ24 ing related terms, which provides for 

25 the transfer of one or more certificates 
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1 of deposit, mortgage-related securities 

2 (as such term is defined in the Securi3 ties Exchange Act of 1934), mortgage 

4 loans, interests in mortgage-related se5 curities or mortgage loans, eligible 

6 bankers’ acceptances, qualified foreign 

7 government securities or securities that 

8 are direct obligations of, or that are 

9 fully guaranteed by, the United States 

10 or any agency of the United States 

11 against the transfer of funds by the 

12 transferee of such certificates of de13 posit, eligible bankers’ acceptances, se14 curities, mortgage loans, or interests 

15 with a simultaneous agreement by such 

16 transferee to transfer to the transferor 

17 thereof certificates of deposit, eligible 

18 bankers’ acceptances, securities, mort19 gage loans, or interests as described 

20 above, at a date certain not later than 

21 1 year after such transfers or on de22 mand, against the transfer of funds, or 

23 any other similar agreement; 

24 ‘‘(II) does not include any repur25 chase obligation under a participation 
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1 in a commercial mortgage loan unless 

2 the Agency determines by regulation, 

3 resolution, or order to include any such 

4 participation within the meaning of 

5 such term; 

6 ‘‘(III) means any combination of 

7 agreements or transactions referred to 

8 in subclauses (I) and (IV); 

9 ‘‘(IV) means any option to enter 

10 into any agreement or transaction re11 ferred to in subclause (I) or (III); 

12 ‘‘(V) means a master agreement 

13 that provides for an agreement or 

14 transaction referred to in subclause (I), 

15 (III), or (IV), together with all supple16 ments to any such master agreement, 

17 without regard to whether the master 

18 agreement provides for an agreement 

19 or transaction that is not a repurchase 

20 agreement under this clause, except 

21 that the master agreement shall be con22 sidered to be a repurchase agreement 

23 under this subclause only with respect 

24 to each agreement or transaction under 
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1 the master agreement that is referred to 

2 in subclause (I), (III), or (IV); and 

3 ‘‘(VI) means any security agree4 ment or arrangement or other credit 

5 enhancement related to any agreement 

6 or transaction referred to in subclause 

7 (I), (III), (IV), or (V), including any 

8 guarantee or reimbursement obligation 

9 in connection with any agreement or 

10 transaction referred to in any such 

11 subclause. 

12 For purposes of this clause, the term ‘quali13 fied foreign government security’ means a 

14 security that is a direct obligation of, or 

15 that is fully guaranteed by, the central gov16 ernment of a member of the Organization 

17 for Economic Cooperation and Development 

18 (as determined by regulation or order 

19 adopted by the appropriate Federal banking 

20 authority). 

21 ‘‘(vi) SWAP AGREEMENT.—The term 

22 ‘swap agreement’ means— 

23 ‘‘(I) any agreement, including the 

24 terms and conditions incorporated by 

25 reference in any such agreement, which 
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1 is an interest rate swap, option, future, 

2 or forward agreement, including a rate 

3 floor, rate cap, rate collar, cross-cur4 rency rate swap, and basis swap; a 

5 spot, same day-tomorrow, tomorrow6 next, forward, or other foreign ex7 change or precious metals agreement; a 

8 currency swap, option, future, or for9 ward agreement; an equity index or eq10 uity swap, option, future, or forward 

11 agreement; a debt index or debt swap, 

12 option, future, or forward agreement; a 

13 total return, credit spread or credit 

14 swap, option, future, or forward agree15 ment; a commodity index or com16 modity swap, option, future, or for17 ward agreement; or a weather swap, 

18 weather derivative, or weather option; 

19 ‘‘(II) any agreement or trans20 action that is similar to any other 

21 agreement or transaction referred to in 

22 this clause and that is of a type that 

23 has been, is presently, or in the future 

24 becomes, the subject of recurrent deal25 ings in the swap markets (including 
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1 terms and conditions incorporated by 

2 reference in such agreement) and that 

3 is a forward, swap, future, or option 

4 on one or more rates, currencies, com5 modities, equity securities or other eq6 uity instruments, debt securities or 

7 other debt instruments, quantitative 

8 measures associated with an occur9 rence, extent of an occurrence, or con10 tingency associated with a financial, 

11 commercial, or economic consequence, 

12 or economic or financial indices or 

13 measures of economic or financial risk 

14 or value; 

15 ‘‘(III) any combination of agree16 ments or transactions referred to in 

17 this clause; 

18 ‘‘(IV) any option to enter into 

19 any agreement or transaction referred 

20 to in this clause; 

21 ‘‘(V) a master agreement that pro22 vides for an agreement or transaction 

23 referred to in subclause (I), (II), (III), 

24 or (IV), together with all supplements 

25 to any such master agreement, without 
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1 regard to whether the master agreement 

2 contains an agreement or transaction 

3 that is not a swap agreement under 

4 this clause, except that the master 

5 agreement shall be considered to be a 

6 swap agreement under this clause only 

7 with respect to each agreement or 

8 transaction under the master agree9 ment that is referred to in subclause 

10 (I), (II), (III), or (IV); and 

11 ‘‘(VI) any security agreement or 

12 arrangement or other credit enhance13 ment related to any agreements or 

14 transactions referred to in subclause 

15 (I), (II), (III), (IV), or (V), including 

16 any guarantee or reimbursement obli17 gation in connection with any agree18 ment or transaction referred to in any 

19 such subclause. 

20 Such term is applicable for purposes of this 

21 subsection only and shall not be construed 

22 or applied so as to challenge or affect the 

23 characterization, definition, or treatment of 

24 any swap agreement under any other stat25 ute, regulation, or rule, including the Secu-
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1 rities Act of 1933, the Securities Exchange 

2 Act of 1934, the Public Utility Holding 

3 Company Act of 1935, the Trust Indenture 

4 Act of 1939, the Investment Company Act of 

5 1940, the Investment Advisers Act of 1940, 

6 the Securities Investor Protection Act of 

7 1970, the Commodity Exchange Act, the 

8 Gramm-Leach-Bliley Act, and the Legal 

9 Certainty for Bank Products Act of 2000. 

10 ‘‘(vii) TREATMENT OF MASTER AGREE11 MENT AS ONE AGREEMENT.—Any master 

12 agreement for any contract or agreement de13 scribed in any preceding clause of this sub14 paragraph (or any master agreement for 

15 such master agreement or agreements), to16 gether with all supplements to such master 

17 agreement, shall be treated as a single 

18 agreement and a single qualified financial 

19 contract. If a master agreement contains 

20 provisions relating to agreements or trans21 actions that are not themselves qualified fi22 nancial contracts, the master agreement 

23 shall be deemed to be a qualified financial 

24 contract only with respect to those trans-
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1 actions that are themselves qualified finan2 cial contracts. 

3 ‘‘(viii) TRANSFER.—The term ‘trans4 fer’ means every mode, direct or indirect, 

5 absolute or conditional, voluntary or invol6 untary, of disposing of or parting with 

7 property or with an interest in property, 

8 including retention of title as a security in9 terest and foreclosure of the regulated enti10 ty’s equity of redemption. 

11 ‘‘(E) CERTAIN PROTECTIONS IN EVENT OF

12 APPOINTMENT OF CONSERVATOR.—Notwith13 standing any other provision of this Act (other 

14 than paragraph (13) of this subsection), any 

15 other Federal law, or the law of any State, no 

16 person shall be stayed or prohibited from exer17 cising— 

18 ‘‘(i) any right such person has to cause 

19 the termination, liquidation, or acceleration 

20 of any qualified financial contract with a 

21 regulated entity in a conservatorship based 

22 upon a default under such financial con23 tract which is enforceable under applicable 

24 noninsolvency law; 
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1 ‘‘(ii) any right under any security 

2 agreement or arrangement or other credit 

3 enhancement relating to one or more such 

4 qualified financial contracts; or 

5 ‘‘(iii) any right to offset or net out any 

6 termination values, payment amounts, or 

7 other transfer obligations arising under or 

8 in connection with such qualified financial 

9 contracts. 

10 ‘‘(F) CLARIFICATION.—No provision of law 

11 shall be construed as limiting the right or power 

12 of the Agency, or authorizing any court or agen13 cy to limit or delay, in any manner, the right 

14 or power of the Agency to transfer any qualified 

15 financial contract in accordance with para16 graphs (9) and (10) of this subsection or to dis17 affirm or repudiate any such contract in accord18 ance with subsection (d)(1) of this section. 

19 ‘‘(G) WALKAWAY CLAUSES NOT EFFEC20 TIVE.— 

21 ‘‘(i) IN GENERAL.—Notwithstanding 

22 the provisions of subparagraphs (A) and 

23 (E), and sections 403 and 404 of the Fed24 eral Deposit Insurance Corporation Im25 provement Act of 1991, no walkaway clause 
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1 shall be enforceable in a qualified financial 

2 contract of a regulated entity in default. 

3 ‘‘(ii) WALKAWAY CLAUSE DEFINED.— 

4 For purposes of this subparagraph, the term 

5 ‘walkaway clause’ means a provision in a 

6 qualified financial contract that, after cal7 culation of a value of a party’s position or 

8 an amount due to or from 1 of the parties 

9 in accordance with its terms upon termi10 nation, liquidation, or acceleration of the 

11 qualified financial contract, either does not 

12 create a payment obligation of a party or 

13 extinguishes a payment obligation of a 

14 party in whole or in part solely because of 

15 such party’s status as a nondefaulting 

16 party. 

17 ‘‘(9) TRANSFER OF QUALIFIED FINANCIAL CON18 TRACTS.—In making any transfer of assets or liabil19 ities of a regulated entity in default which includes 

20 any qualified financial contract, the conservator or 

21 receiver for such regulated entity shall either— 

22 ‘‘(A) transfer to 1 person— 

23 ‘‘(i) all qualified financial contracts 

24 between any person (or any affiliate of such 

25 person) and the regulated entity in default; 
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1 ‘‘(ii) all claims of such person (or any 

2 affiliate of such person) against such regu3 lated entity under any such contract (other 

4 than any claim which, under the terms of 

5 any such contract, is subordinated to the 

6 claims of general unsecured creditors of such 

7 regulated entity); 

8 ‘‘(iii) all claims of such regulated enti9 ty against such person (or any affiliate of 

10 such person) under any such contract; and 

11 ‘‘(iv) all property securing or any 

12 other credit enhancement for any contract 

13 described in clause (i) or any claim de14 scribed in clause (ii) or (iii) under any 

15 such contract; or 

16 ‘‘(B) transfer none of the financial con17 tracts, claims, or property referred to under sub18 paragraph (A) (with respect to such person and 

19 any affiliate of such person). 

20 ‘‘(10) NOTIFICATION OF TRANSFER.— 

21 ‘‘(A) IN GENERAL.—If— 

22 ‘‘(i) the conservator or receiver for a 

23 regulated entity in default makes any trans24 fer of the assets and liabilities of such regu25 lated entity, and 
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1 ‘‘(ii) the transfer includes any quali2 fied financial contract, 

3 the conservator or receiver shall notify any per4 son who is a party to any such contract of such 

5 transfer by 5:00 p.m. (eastern time) on the busi6 ness day following the date of the appointment 

7 of the receiver in the case of a receivership, or the 

8 business day following such transfer in the case 

9 of a conservatorship. 

10 ‘‘(B) CERTAIN RIGHTS NOT ENFORCE11 ABLE.— 

12 ‘‘(i) RECEIVERSHIP.—A person who is 

13 a party to a qualified financial contract 

14 with a regulated entity may not exercise 

15 any right that such person has to terminate, 

16 liquidate, or net such contract under para17 graph (8)(A) of this subsection or section 

18 403 or 404 of the Federal Deposit Insurance 

19 Corporation Improvement Act of 1991, sole20 ly by reason of or incidental to the appoint21 ment of a receiver for the regulated entity 

22 (or the insolvency or financial condition of 

23 the regulated entity for which the receiver 

24 has been appointed)— 
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1 ‘‘(I) until 5:00 p.m. (eastern time) 

2 on the business day following the date 

3 of the appointment of the receiver; or 

4 ‘‘(II) after the person has received 

5 notice that the contract has been trans6 ferred pursuant to paragraph (9)(A). 

7 ‘‘(ii) CONSERVATORSHIP.—A person 

8 who is a party to a qualified financial con9 tract with a regulated entity may not exer10 cise any right that such person has to ter11 minate, liquidate, or net such contract 

12 under paragraph (8)(E) of this subsection 

13 or section 403 or 404 of the Federal Deposit 

14 Insurance Corporation Improvement Act of 

15 1991, solely by reason of or incidental to the 

16 appointment of a conservator for the regu17 lated entity (or the insolvency or financial 

18 condition of the regulated entity for which 

19 the conservator has been appointed). 

20 ‘‘(iii) NOTICE.—For purposes of this 

21 paragraph, the Agency as receiver or conser22 vator of a regulated entity shall be deemed 

23 to have notified a person who is a party to 

24 a qualified financial contract with such reg25 ulated entity if the Agency has taken steps 
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1 reasonably calculated to provide notice to 

2 such person by the time specified in sub3 paragraph (A). 

4 ‘‘(C) BUSINESS DAY DEFINED.—For pur5 poses of this paragraph, the term ‘business day’ 

6 means any day other than any Saturday, Sun7 day, or any day on which either the New York 

8 Stock Exchange or the Federal Reserve Bank of 

9 New York is closed. 

10 ‘‘(11) DISAFFIRMANCE OR REPUDIATION OF

11 QUALIFIED FINANCIAL CONTRACTS.—In exercising the 

12 rights of disaffirmance or repudiation of a conser13 vator or receiver with respect to any qualified finan14 cial contract to which a regulated entity is a party, 

15 the conservator or receiver for such institution shall 

16 either— 

17 ‘‘(A) disaffirm or repudiate all qualified fi18 nancial contracts between— 

19 ‘‘(i) any person or any affiliate of such 

20 person; and 

21 ‘‘(ii) the regulated entity in default; or 

22 ‘‘(B) disaffirm or repudiate none of the 

23 qualified financial contracts referred to in sub24 paragraph (A) (with respect to such person or 

25 any affiliate of such person). 
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1 ‘‘(12) CERTAIN SECURITY INTERESTS NOT AVOID2 ABLE.—No provision of this subsection shall be con3 strued as permitting the avoidance of any legally en4 forceable or perfected security interest in any of the 

5 assets of any regulated entity, except where such an 

6 interest is taken in contemplation of the insolvency of 

7 the regulated entity, or with the intent to hinder, 

8 delay, or defraud the regulated entity or the creditors 

9 of such regulated entity. 

10 ‘‘(13) AUTHORITY TO ENFORCE CONTRACTS.— 

11 ‘‘(A) IN GENERAL.—Notwithstanding any 

12 provision of a contract providing for termi13 nation, default, acceleration, or exercise of rights 

14 upon, or solely by reason of, insolvency or the 

15 appointment of a conservator or receiver, the 

16 conservator or receiver may enforce any contract 

17 or regulated entity bond entered into by the regu18 lated entity. 

19 ‘‘(B) CERTAIN RIGHTS NOT AFFECTED.—No 

20 provision of this paragraph may be construed as 

21 impairing or affecting any right of the conser22 vator or receiver to enforce or recover under a di23 rector’s or officer’s liability insurance contract or 

24 surety bond under other applicable law. 

25 ‘‘(C) CONSENT REQUIREMENT.— 
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1 ‘‘(i) IN GENERAL.—Except as otherwise 

2 provided under this section, no person may 

3 exercise any right or power to terminate, 

4 accelerate, or declare a default under any 

5 contract to which a regulated entity is a 

6 party, or to obtain possession of or exercise 

7 control over any property of the regulated 

8 entity, or affect any contractual rights of 

9 the regulated entity, without the consent of 

10 the conservator or receiver, as appropriate, 

11 for a period of— 

12 ‘‘(I) 45 days after the date of ap13 pointment of a conservator; or 

14 ‘‘(II) 90 days after the date of ap15 pointment of a receiver. 

16 ‘‘(ii) EXCEPTIONS.—This paragraph 

17 shall— 

18 ‘‘(I) not apply to a director’s or 

19 officer’s liability insurance contract; 

20 ‘‘(II) not apply to the rights of 

21 parties to any qualified financial con22 tracts under subsection (d)(8); and 

23 ‘‘(III) not be construed as permit24 ting the conservator or receiver to fail 
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1 to comply with otherwise enforceable 

2 provisions of such contracts. 

3 ‘‘(14) SAVINGS CLAUSE.—The meanings of terms 

4 used in this subsection are applicable for purposes of 

5 this subsection only, and shall not be construed or ap6 plied so as to challenge or affect the characterization, 

7 definition, or treatment of any similar terms under 

8 any other statute, regulation, or rule, including the 

9 Gramm-Leach-Bliley Act, the Legal Certainty for 

10 Bank Products Act of 2000, the securities laws (as 

11 that term is defined in section 3(a)(47) of the Securi12 ties Exchange Act of 1934), and the Commodity Ex13 change Act 

14 ‘‘(15) EXCEPTION FOR FEDERAL RESERVE AND

15 FEDERAL HOME LOAN BANKS.—No provision of this 

16 subsection shall apply with respect to— 

17 ‘‘(A) any extension of credit from any Fed18 eral home loan bank or Federal Reserve Bank to 

19 any regulated entity; or 

20 ‘‘(B) any security interest in the assets of 

21 the regulated entity securing any such extension 

22 of credit. 

23 ‘‘(e) VALUATION OF CLAIMS IN DEFAULT.— 

24 ‘‘(1) IN GENERAL.—Notwithstanding any other 

25 provision of Federal law or the law of any State, and 
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1 regardless of the method which the Agency determines 

2 to utilize with respect to a regulated entity in default 

3 or in danger of default, including transactions au4 thorized under subsection (i), this subsection shall 

5 govern the rights of the creditors of such regulated en6 tity. 

7 ‘‘(2) MAXIMUM LIABILITY.—The maximum li8 ability of the Agency, acting as receiver or in any 

9 other capacity, to any person having a claim against 

10 the receiver or the regulated entity for which such re11 ceiver is appointed shall equal the lesser of— 

12 ‘‘(A) the amount such claimant would have 

13 received if the Agency had liquidated the assets 

14 and liabilities of such regulated entity without 

15 exercising the authority of the Agency under sub16 section (i) of this section; or 

17 ‘‘(B) the amount of proceeds realized from 

18 the performance of contracts or sale of the assets 

19 of the regulated entity. 

20 ‘‘(f) LIMITATION ON COURT ACTION.—Except as pro21 vided in this section or at the request of the Director, no 

22 court may take any action to restrain or affect the exercise 

23 of powers or functions of the Agency as a conservator or 

24 a receiver. 

25 ‘‘(g) LIABILITY OF DIRECTORS AND OFFICERS.— 
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1 ‘‘(1) IN GENERAL.—A director or officer of a reg2 ulated entity may be held personally liable for mone3 tary damages in any civil action by, on behalf of, or 

4 at the request or direction of the Agency, which action 

5 is prosecuted wholly or partially for the benefit of the 

6 Agency— 

7 ‘‘(A) acting as conservator or receiver of 

8 such regulated entity, or 

9 ‘‘(B) acting based upon a suit, claim, or 

10 cause of action purchased from, assigned by, or 

11 otherwise conveyed by such receiver or conser12 vator, 

13 for gross negligence, including any similar conduct or 

14 conduct that demonstrates a greater disregard of a 

15 duty of care (than gross negligence) including inten16 tional tortious conduct, as such terms are defined and 

17 determined under applicable State law. 

18 ‘‘(2) NO LIMITATION.—Nothing in this para19 graph shall impair or affect any right of the Agency 

20 under other applicable law. 

21 ‘‘(h) DAMAGES.—In any proceeding related to any 

22 claim against a director, officer, employee, agent, attorney, 

23 accountant, appraiser, or any other party employed by or 

24 providing services to a regulated entity, recoverable dam25 ages determined to result from the improvident or otherwise 
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1 improper use or investment of any assets of the regulated 

2 entity shall include principal losses and appropriate inter3 est. 

4 ‘‘(i) LIMITED-LIFE REGULATED ENTITIES.— 

5 ‘‘(1) ORGANIZATION.— 

6 ‘‘(A) PURPOSE.—If a regulated entity is in 

7 default, or if the Agency anticipates that a regu8 lated entity will default, the Agency may orga9 nize a limited-life regulated entity with those 

10 powers and attributes of the regulated entity in 

11 default or in danger of default that the Director 

12 determines necessary, subject to the provisions of 

13 this subsection. The Director shall grant a tem14 porary charter to the limited-life regulated enti15 ty, and the limited-life regulated entity shall op16 erate subject to that charter. 

17 ‘‘(B) AUTHORITIES.—Upon the creation of 

18 a limited-life regulated entity under subpara19 graph (A), the limited-life regulated entity 

20 may— 

21 ‘‘(i) assume such liabilities of the regu22 lated entity that is in default or in danger 

23 of default as the Agency may, in its discre24 tion, determine to be appropriate, provided 

25 that the liabilities assumed shall not exceed 
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1 the amount of assets of the limited-life regu2 lated entity; 

3 ‘‘(ii) purchase such assets of the regu4 lated entity that is in default, or in danger 

5 of default, as the Agency may, in its discre6 tion, determine to be appropriate; and 

7 ‘‘(iii) perform any other temporary 

8 function which the Agency may, in its dis9 cretion, prescribe in accordance with this 

10 section. 

11 ‘‘(2) CHARTER.— 

12 ‘‘(A) CONDITIONS.—The Agency may grant 

13 a temporary charter if the Agency determines 

14 that the continued operation of the regulated en15 tity in default or in danger of default is in the 

16 best interest of the national economy and the 

17 housing markets. 

18 ‘‘(B) TREATMENT AS BEING IN DEFAULT

19 FOR CERTAIN PURPOSES.—A limited-life regu20 lated entity shall be treated as a regulated entity 

21 in default at such times and for such purposes 

22 as the Agency may, in its discretion, determine. 

23 ‘‘(C) MANAGEMENT.—A limited-life regu24 lated entity, upon the granting of its charter, 

25 shall be under the management of a board of di-
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1 rectors consisting of not fewer than 5 nor more 

2 than 10 members appointed by the Agency. 

3 ‘‘(D) BYLAWS.—The board of directors of a 

4 limited-life regulated entity shall adopt such by5 laws as may be approved by the Agency. 

6 ‘‘(3) CAPITAL STOCK.—No capital stock need be 

7 paid into a limited-life regulated entity by the Agen8 cy. 

9 ‘‘(4) INVESTMENTS.—Funds of a limited-life reg10 ulated entity shall be kept on hand in cash, invested 

11 in obligations of the United States or obligations 

12 guaranteed as to principal and interest by the United 

13 States, or deposited with the Agency, or any Federal 

14 Reserve bank. 

15 ‘‘(5) EXEMPT STATUS.—Notwithstanding any 

16 other provision of Federal or State law, the limited17 life regulated entity, its franchise, property, and in18 come shall be exempt from all taxation now or here19 after imposed by the United States, by any territory, 

20 dependency, or possession thereof, or by any State, 

21 county, municipality, or local taxing authority. 

22 ‘‘(6) WINDING UP.— 

23 ‘‘(A) IN GENERAL.—Subject to subpara24 graph (B), unless Congress authorizes the sale of 

25 the capital stock of the limited-life regulated en-
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1 tity, not later than 2 years after the date of its 

2 organization, the Agency shall wind up the af3 fairs of the limited-life regulated entity. 

4 ‘‘(B) EXTENSION.—The Director may, in 

5 the discretion of the Director, extend the status 

6 of the limited-life regulated entity for 3 addi7 tional 1-year periods. 

8 ‘‘(7) TRANSFER OF ASSETS AND LIABILITIES.— 

9 ‘‘(A) IN GENERAL.— 

10 ‘‘(i) TRANSFER OF ASSETS AND LIABIL11 ITIES.—The Agency, as receiver, may trans12 fer any assets and liabilities of a regulated 

13 entity in default, or in danger of default, to 

14 the limited-life regulated entity in accord15 ance with paragraph (1). 

16 ‘‘(ii) SUBSEQUENT TRANSFERS.—At 

17 any time after a charter is transferred to a 

18 limited-life regulated entity, the Agency, as 

19 receiver, may transfer any assets and liabil20 ities of such regulated entity in default, or 

21 in danger in default, as the Agency may, in 

22 its discretion, determine to be appropriate 

23 in accordance with paragraph (1). 

24 ‘‘(iii) EFFECTIVE WITHOUT AP25 PROVAL.—The transfer of any assets or li-
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1 abilities of a regulated entity in default, or 

2 in danger of default, transferred to a lim3 ited-life regulated entity shall be effective 

4 without any further approval under Federal 

5 or State law, assignment, or consent with 

6 respect thereto. 

7 ‘‘(8) PROCEEDS.—To the extent that available 

8 proceeds from the limited-life regulated entity exceed 

9 amounts required to pay obligations, such proceeds 

10 may be paid to the regulated entity in default, or in 

11 danger of default. 

12 ‘‘(9) POWERS.— 

13 ‘‘(A) IN GENERAL.—Each limited-life regu14 lated entity created under this subsection shall 

15 have all corporate powers of, and be subject to 

16 the same provisions of law as, the regulated enti17 ty in default or in danger of default to which it 

18 relates, except that— 

19 ‘‘(i) the Agency may— 

20 ‘‘(I) remove the directors of a lim21 ited-life regulated entity; and 

22 ‘‘(II) fix the compensation of 

23 members of the board of directors and 

24 senior management, as determined by 
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1 the Agency in its discretion, of a lim2 ited-life regulated entity; 

3 ‘‘(ii) the Agency may indemnify the 

4 representatives for purposes of paragraph 

5 (1)(B), and the directors, officers, employ6 ees, and agents of a limited-life regulated 

7 entity on such terms as the Agency deter8 mines to be appropriate; and 

9 ‘‘(iii) the board of directors of a lim10 ited-life regulated entity— 

11 ‘‘(I) shall elect a chairperson who 

12 may also serve in the position of chief 

13 executive officer, except that such per14 son shall not serve either as chair15 person or as chief executive officer 

16 without the prior approval of the Agen17 cy; and 

18 ‘‘(II) may appoint a chief execu19 tive officer who is not also the chair20 person, except that such person shall 

21 not serve as chief executive officer with22 out the prior approval of the Agency. 

23 ‘‘(B) STAY OF JUDICIAL ACTION.—Any judi24 cial action to which a limited-life regulated enti25 ty becomes a party by virtue of its acquisition 
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1 of any assets or assumption of any liabilities of 

2 a regulated entity in default shall be stayed from 

3 further proceedings for a period of up to 45 days 

4 at the request of the limited-life regulated entity. 

5 Such period may be modified upon the consent 

6 of all parties. 

7 ‘‘(10) OBTAINING OF CREDIT AND INCURRING OF

8 DEBT.— 

9 ‘‘(A) IN GENERAL.—The limited-life regu10 lated entity may obtain unsecured credit and 

11 incur unsecured debt in the ordinary course of 

12 business. 

13 ‘‘(B) INABILITY TO OBTAIN CREDIT.—If the 

14 limited-life regulated entity is unable to obtain 

15 unsecured credit the Director may authorize the 

16 obtaining of credit or the incurring of debt— 

17 ‘‘(i) with priority over any or all ad18 ministrative expenses; 

19 ‘‘(ii) secured by a lien on property that 

20 is not otherwise subject to a lien; or 

21 ‘‘(iii) secured by a junior lien on prop22 erty that is subject to a lien. 

23 ‘‘(C) LIMITATIONS.— 

24 ‘‘(i) IN GENERAL.—The Director, after 

25 notice and a hearing, may authorize the ob-
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1 taining of credit or the incurring of debt se2 cured by a senior or equal lien on property 

3 that is subject to a lien (other than mort4 gages that collateralize the mortgage-backed 

5 securities issued or guaranteed by the regu6 lated entity) only if— 

7 ‘‘(I) the limited-life regulated en8 tity is unable to obtain such credit oth9 erwise; and 

10 ‘‘(II) there is adequate protection 

11 of the interest of the holder of the lien 

12 on the property which such senior or 

13 equal lien is proposed to be granted. 

14 ‘‘(ii) BURDEN OF PROOF.—In any 

15 hearing under this subsection, the Director 

16 has the burden of proof on the issue of ade17 quate protection. 

18 ‘‘(D) AFFECT ON DEBTS AND LIENS.—The 

19 reversal or modification on appeal of an author20 ization under this paragraph to obtain credit or 

21 incur debt, or of a grant under this section of a 

22 priority or a lien, does not affect the validity of 

23 any debt so incurred, or any priority or lien so 

24 granted, to an entity that extended such credit in 

25 good faith, whether or not such entity knew of 
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1 the pendency of the appeal, unless such author2 ization and the incurring of such debt, or the 

3 granting of such priority or lien, were stayed 

4 pending appeal. 

5 ‘‘(11) ISSUANCE OF PREFERRED DEBT.—A lim6 ited-life regulated entity may, subject to the approval 

7 of the Director and subject to such terms and condi8 tions as the Director may prescribe, issue notes, 

9 bonds, or other debt obligations of a class to which all 

10 other debt obligations of the limited-life regulated en11 tity shall be subordinate in right and payment. 

12 ‘‘(12) NO FEDERAL STATUS.— 

13 ‘‘(A) AGENCY STATUS.—A limited-life regu14 lated entity is not an agency, establishment, or 

15 instrumentality of the United States. 

16 ‘‘(B) EMPLOYEE STATUS.—Representatives 

17 for purposes of paragraph (1)(B), interim direc18 tors, directors, officers, employees, or agents of a 

19 limited-life regulated entity are not, solely by 

20 virtue of service in any such capacity, officers or 

21 employees of the United States. Any employee of 

22 the Agency or of any Federal instrumentality 

23 who serves at the request of the Agency as a rep24 resentative for purposes of paragraph (1)(B), in25 terim director, director, officer, employee, or 
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1 agent of a limited-life regulated entity shall 

2 not— 

3 ‘‘(i) solely by virtue of service in any 

4 such capacity lose any existing status as an 

5 officer or employee of the United States for 

6 purposes of title 5, United States Code, or 

7 any other provision of law; or 

8 ‘‘(ii) receive any salary or benefits for 

9 service in any such capacity with respect to 

10 a limited-life regulated entity in addition to 

11 such salary or benefits as are obtained 

12 through employment with the Agency or 

13 such Federal instrumentality. 

14 ‘‘(13) ADDITIONAL POWERS.—In addition to any 

15 other powers granted under this subsection, a limited16 life regulated entity may— 

17 ‘‘(A) extend a maturity date or change in 

18 an interest rate or other term of outstanding se19 curities; 

20 ‘‘(B) issue securities of the limited-life regu21 lated entity, for cash, for property, for existing 

22 securities, or in exchange for claims or interests, 

23 or for any other appropriate purposes; and 

24 ‘‘(C) take any other action not inconsistent 

25 with this section. 
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1 ‘‘(j) OTHER EXEMPTIONS.—When acting as a receiver, 

2 the following provisions shall apply with respect to the 

3 Agency: 

4 ‘‘(1) EXEMPTION FROM TAXATION.—The Agency, 

5 including its franchise, its capital, reserves, and sur6 plus, and its income, shall be exempt from all tax7 ation imposed by any State, country, municipality, 

8 or local taxing authority, except that any real prop9 erty of the Agency shall be subject to State, territorial, 

10 county, municipal, or local taxation to the same ex11 tent according to its value as other real property is 

12 taxed, except that, notwithstanding the failure of any 

13 person to challenge an assessment under State law of 

14 the value of such property, and the tax thereon, shall 

15 be determined as of the period for which such tax is 

16 imposed. 

17 ‘‘(2) EXEMPTION FROM ATTACHMENT AND

18 LIENS.—No property of the Agency shall be subject to 

19 levy, attachment, garnishment, foreclosure, or sale 

20 without the consent of the Agency, nor shall any in21 voluntary lien attach to the property of the Agency. 

22 ‘‘(3) EXEMPTION FROM PENALTIES AND FINES.— 

23 The Agency shall not be liable for any amounts in the 

24 nature of penalties or fines, including those arising 

25 from the failure of any person to pay any real prop-
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1 erty, personal property, probate, or recording tax or 

2 any recording or filing fees when due. 

3 ‘‘(k) PROHIBITION OF CHARTER REVOCATION.—In no 

4 case may a receiver appointed pursuant to this section re5 voke, annul, or terminate the charter of a regulated entity.’’. 

6 (b) CONFORMING AMENDMENTS.—Subtitle B of title 

7 XIII of the Housing and Community Development Act of 

8 1992 is amended by striking sections 1369 (12 U.S.C. 

9 4619), 1369A (12 U.S.C. 4620), and 1369B (12 U.S.C. 

10 4621). 

11 SEC. 145. CONFORMING AMENDMENTS. 

12 Title XIII of the Housing and Community Develop13 ment Act of 1992, as amended by the preceding provisions 

14 of this Act, is further amended— 

15 (1) in sections 1365 (12 U.S.C. 4615) through 

16 1369D (12 U.S.C. 4623), but not including section 

17 1367 (12 U.S.C. 4617) as added by section 144 of this 

18 Act— 

19 (A) by striking ‘‘An enterprise’’ each place 

20 such term appears and inserting ‘‘A regulated 

21 entity’’; 

22 (B) by striking ‘‘an enterprise’’ each place 

23 such term appears and inserting ‘‘a regulated 

24 entity’’; and 
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1 (C) by striking ‘‘the enterprise’’ each place 

2 such term appears and inserting ‘‘the regulated 

3 entity’’; 

4 (2) in section 1366 (12 U.S.C. 4616)— 

5 (A) in subsection (b)(7), by striking ‘‘section 

6 1369 (excluding subsection (a)(1) and (2))’’ and 

7 inserting ‘‘section 1367’’; and 

8 (B) in subsection (d), by striking ‘‘the en9 terprises’’ and inserting ‘‘the regulated entities’’; 

10 (3) in section 1368(d) (12 U.S.C. 4618(d)), by 

11 striking ‘‘Committee on Banking, Finance and Urban 

12 Affairs’’ and inserting ‘‘Committee on Financial 

13 Services’’; 

14 (4) in section 1369C(c) (12 U.S.C. 4622(c)), by 

15 striking ‘‘any enterprise’’ and inserting ‘‘any regu16 lated entity’’; and 

17 (5) in subsections (a) and (d) of section 1369D, 

18 by striking ‘‘section 1366 or 1367 or action under sec19 tion 1369)’’ each place such phrase appears and in20 serting ‘‘section 1367)’’. 

21 Subtitle D—Enforcement Actions 

22 SEC. 161. CEASE-AND-DESIST PROCEEDINGS. 

23 Section 1371 of the Housing and Community Develop24 ment Act of 1992 (12 U.S.C. 4631) is amended— 
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1 (1) by striking subsections (a) and (b) and in2 serting the following new subsections: 

3 ‘‘(a) ISSUANCE FOR UNSAFE OR UNSOUND PRACTICES

4 AND VIOLATIONS OF RULES OR LAWS.—If, in the opinion 

5 of the Director, a regulated entity or any regulated entity6 affiliated party is engaging or has engaged, or the Director 

7 has reasonable cause to believe that the regulated entity or 

8 any regulated entity-affiliated party is about to engage, in 

9 an unsafe or unsound practice in conducting the business 

10 of the regulated entity or is violating or has violated, or 

11 the Director has reasonable cause to believe that the regu12 lated entity or any regulated entity-affiliated party is about 

13 to violate, a law, rule, or regulation, or any condition im14 posed in writing by the Director in connection with the 

15 granting of any application or other request by the regu16 lated entity or any written agreement entered into with the 

17 Director, the Director may issue and serve upon the regu18 lated entity or such party a notice of charges in respect 

19 thereof. The Director may not, pursuant to this section, en20 force compliance with any housing goal established under 

21 subpart B of part 2 of subtitle A of this title, with section 

22 1336 or 1337 of this title, with subsection (m) or (n) of 

23 section 309 of the Federal National Mortgage Association 

24 Charter Act (12 U.S.C. 1723a(m), (n)), with subsection (e) 

25 or (f) of section 307 of the Federal Home Loan Mortgage 
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1 Corporation Act (12 U.S.C. 1456(e), (f)), or with paragraph 

2 (5) of section 10(j) of the Federal Home Loan Bank Act 

3 (12 U.S.C. 1430(j)). 

4 ‘‘(b) ISSUANCE FOR UNSATISFACTORY RATING.—If a 

5 regulated entity receives, in its most recent report of exam6 ination, a less-than-satisfactory rating for asset quality, 

7 management, earnings, or liquidity, the Director may (if 

8 the deficiency is not corrected) deem the regulated entity 

9 to be engaging in an unsafe or unsound practice for pur10 poses of this subsection.’’; 

11 (2) in subsection (c)(2), by striking ‘‘enterprise, 

12 executive officer, or director’’ and inserting ‘‘regulated 

13 entity or regulated entity-affiliated party’’; and 

14 (3) in subsection (d)— 

15 (A) in the matter preceding paragraph (1), 

16 by striking ‘‘enterprise, executive officer, or di17 rector’’ and inserting ‘‘regulated entity or regu18 lated entity-affiliated party’’; 

19 (B) in paragraph (1)— 

20 (i) by striking ‘‘an executive officer or 

21 director’’ and inserting ‘‘a regulated entity 

22 affiliated party’’; and 

23 (ii) by inserting ‘‘(including reim24 bursement of compensation under section 

25 1318)’’ after ‘‘reimbursement’’; 
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1 (C) in paragraph (6), by striking ‘‘and’’ at 

2 the end; 

3 (D) by redesignating paragraph (7) as 

4 paragraph (8); and 

5 (E) by inserting after paragraph (6) the fol6 lowing new paragraph: 

7 ‘‘(7) to effect an attachment on a regulated enti8 ty or regulated entity-affiliated party subject to an 

9 order under this section or section 1372; and’’. 

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

11 Section 1372 of the Housing and Community Develop12 ment Act of 1992 (12 U.S.C. 4632) is amended— 

13 (1) by striking subsection (a) and inserting the 

14 following new subsection: 

15 ‘‘(a) GROUNDS FOR ISSUANCE.—Whenever the Direc16 tor determines that the violation or threatened violation or 

17 the unsafe or unsound practice or practices specified in the 

18 notice of charges served upon the regulated entity or any 

19 regulated entity-affiliated party pursuant to section 

20 1371(a), or the continuation thereof, is likely to cause insol21 vency or significant dissipation of assets or earnings of the 

22 regulated entity, or is likely to weaken the condition of the 

23 regulated entity prior to the completion of the proceedings 

24 conducted pursuant to sections 1371 and 1373, the Director 

25 may issue a temporary order requiring the regulated entity 
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1 or such party to cease and desist from any such violation 

2 or practice and to take affirmative action to prevent or rem3 edy such insolvency, dissipation, condition, or prejudice 

4 pending completion of such proceedings. Such order may 

5 include any requirement authorized under section 

6 1371(d).’’; 

7 (2) in subsection (b), by striking ‘‘enterprise, ex8 ecutive officer, or director’’ and inserting ‘‘regulated 

9 entity or regulated entity-affiliated party’’; 

10 (3) in subsection (d)— 

11 (A) by striking ‘‘An enterprise, executive of12 ficer, or director’’ and inserting ‘‘A regulated en13 tity or regulated entity-affiliated party’’; and 

14 (B) by striking ‘‘the enterprise, executive of15 ficer, or director’’ and inserting ‘‘the regulated 

16 entity or regulated entity-affiliated party’’; and 

17 (4) by striking subsection (e) and in inserting 

18 the following new subsection: 

19 ‘‘(e) ENFORCEMENT.—In the case of violation or 

20 threatened violation of, or failure to obey, a temporary 

21 cease-and-desist order issued pursuant to this section, the 

22 Director may apply to the United States District Court for 

23 the District of Columbia or the United States district court 

24 within the jurisdiction of which the headquarters of the reg25 ulated entity is located, for an injunction to enforce such 
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1 order, and, if the court determines that there has been such 

2 violation or threatened violation or failure to obey, it shall 

3 be the duty of the court to issue such injunction.’’. 

4 SEC. 163. PREJUDGMENT ATTACHMENT. 

5 The Housing and Community Development Act of 

6 1992 is amended by inserting after section 1375 (12 U.S.C. 

7 4635) the following new section: 

8 ‘‘SEC. 1375A. PREJUDGMENT ATTACHMENT. 

9 ‘‘(a) IN GENERAL.—In any action brought pursuant 

10 to this title, or in actions brought in aid of, or to enforce 

11 an order in, any administrative or other civil action for 

12 money damages, restitution, or civil money penalties 

13 brought pursuant to this title, the court may, upon applica14 tion of the Director or Attorney General, as applicable, 

15 issue a restraining order that— 

16 ‘‘(1) prohibits any person subject to the pro17 ceeding from withdrawing, transferring, removing, 

18 dissipating, or disposing of any funds, assets or other 

19 property; and 

20 ‘‘(2) appoints a person on a temporary basis to 

21 administer the restraining order. 

22 ‘‘(b) STANDARD.— 

23 ‘‘(1) SHOWING.—Rule 65 of the Federal Rules of 

24 Civil Procedure shall apply with respect to any pro25 ceeding under subsection (a) without regard to the re-
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1 quirement of such rule that the applicant show that 

2 the injury, loss, or damage is irreparable and imme3 diate. 

4 ‘‘(2) STATE PROCEEDING.—If, in the case of any 

5 proceeding in a State court, the court determines that 

6 rules of civil procedure available under the laws of 

7 such State provide substantially similar protections 

8 to a party’s right to due process as Rule 65 (as modi9 fied with respect to such proceeding by paragraph 

10 (1)), the relief sought under subsection (a) may be re11 quested under the laws of such State.’’. 

12 SEC. 164. ENFORCEMENT AND JURISDICTION. 

13 Section 1375 of the Housing and Community Develop14 ment Act of 1992 (12 U.S.C. 4635) is amended— 

15 (1) by striking subsection (a) and inserting the 

16 following new subsection: 

17 ‘‘(a) ENFORCEMENT.—The Director may, in the dis18 cretion of the Director, apply to the United States District 

19 Court for the District of Columbia, or the United States 

20 district court within the jurisdiction of which the head21 quarters of the regulated entity is located, for the enforce22 ment of any effective and outstanding notice or order issued 

23 under this subtitle or subtitle B, or request that the Attorney 

24 General of the United States bring such an action. Such 
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1 court shall have jurisdiction and power to order and require 

2 compliance with such notice or order.’’; and 

3 (2) in subsection (b), by striking ‘‘or 1376’’ and 

4 inserting ‘‘1376, or 1377’’. 

5 SEC. 165. CIVIL MONEY PENALTIES. 

6 Section 1376 of the Housing and Community Develop7 ment Act of 1992 (12 U.S.C. 4636) is amended— 

8 (1) in subsection (a)— 

9 (A) in the matter preceding paragraph (1), 

10 by striking ‘‘or any executive officer or’’ and in11 serting ‘‘any executive officer of a regulated enti12 ty, any regulated entity-affiliated party, or 

13 any’’; and 

14 (B) in paragraph (1)— 

15 (i) by striking ‘‘the Federal National 

16 Mortgage Association Charter Act, the Fed17 eral Home Loan Mortgage Corporation Act’’ 

18 and inserting ‘‘any provision of any of the 

19 authorizing statutes’’; 

20 (ii) by striking ‘‘or Act’’ and inserting 

21 ‘‘or statute’’; 

22 (iii) by striking ‘‘or subsection’’ and 

23 inserting ‘‘, subsection’’; and 

24 (iv) by inserting ‘‘, or paragraph (5) 

25 or (12) of section 10(j) of the Federal Home 
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1 Loan Bank Act’’ before the semicolon at the 

2 end; 

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

4 following new subsection: 

5 ‘‘(b) AMOUNT OF PENALTY.— 

6 ‘‘(1) FIRST TIER.—Any regulated entity which, 

7 or any regulated entity-affiliated party who— 

8 ‘‘(A) violates any provision of this title, any 

9 provision of any of the authorizing statutes, or 

10 any order, condition, rule, or regulation under 

11 any such title or statute, except that the Director 

12 may not, pursuant to this section, enforce com13 pliance with any housing goal established under 

14 subpart B of part 2 of subtitle A of this title, 

15 with section 1336 or 1337 of this title, with sub16 section (m) or (n) of section 309 of the Federal 

17 National Mortgage Association Charter Act (12 

18 U.S.C. 1723a(m), (n)), with subsection (e) or (f) 

19 of section 307 of the Federal Home Loan Mort20 gage Corporation Act (12 U.S.C. 1456(e), (f)), or 

21 with paragraph (5) or (12) of section 10(j) of the 

22 Federal Home Loan Bank Act; 

23 ‘‘(B) violates any final or temporary order 

24 or notice issued pursuant to this title; 
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1 ‘‘(C) violates any condition imposed in 

2 writing by the Director in connection with the 

3 grant of any application or other request by such 

4 regulated entity; 

5 ‘‘(D) violates any written agreement be6 tween the regulated entity and the Director; or 

7 ‘‘(E) engages in any conduct the Director 

8 determines to be an unsafe or unsound practice, 

9 shall forfeit and pay a civil penalty of not more 

10 than $10,000 for each day during which such 

11 violation continues. 

12 ‘‘(2) SECOND TIER.—Notwithstanding paragraph 

13 (1)— 

14 ‘‘(A) if a regulated entity, or a regulated 

15 entity-affiliated party— 

16 ‘‘(i) commits any violation described 

17 in any subparagraph of paragraph (1); 

18 ‘‘(ii) recklessly engages in an unsafe or 

19 unsound practice in conducting the affairs 

20 of such regulated entity; or 

21 ‘‘(iii) breaches any fiduciary duty; and 

22 ‘‘(B) the violation, practice, or breach— 

23 ‘‘(i) is part of a pattern of misconduct; 
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1 ‘‘(ii) causes or is likely to cause more 

2 than a minimal loss to such regulated enti3 ty; or 

4 ‘‘(iii) results in pecuniary gain or 

5 other benefit to such party, the regulated en6 tity or regulated entity-affiliated party 

7 shall forfeit and pay a civil penalty of not 

8 more than $50,000 for each day during 

9 which such violation, practice, or breach 

10 continues. 

11 ‘‘(3) THIRD TIER.—Notwithstanding paragraphs 

12 (1) and (2), any regulated entity which, or any regu13 lated entity-affiliated party who— 

14 ‘‘(A) knowingly— 

15 ‘‘(i) commits any violation or engages 

16 in any conduct described in any subpara17 graph of paragraph (1); 

18 ‘‘(ii) engages in any unsafe or unsound 

19 practice in conducting the affairs of such 

20 regulated entity; or 

21 ‘‘(iii) breaches any fiduciary duty; and 

22 ‘‘(B) knowingly or recklessly causes a sub23 stantial loss to such regulated entity or a sub24 stantial pecuniary gain or other benefit to such 

25 party by reason of such violation, practice, or 
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1 breach, shall forfeit and pay a civil penalty in 

2 an amount not to exceed the applicable max3 imum amount determined under paragraph (4) 

4 for each day during which such violation, prac5 tice, or breach continues. 

6 ‘‘(4) MAXIMUM AMOUNTS OF PENALTIES FOR ANY

7 VIOLATION DESCRIBED IN PARAGRAPH (3).—The max8 imum daily amount of any civil penalty which may 

9 be assessed pursuant to paragraph (3) for any viola10 tion, practice, or breach described in such paragraph 

11 is— 

12 ‘‘(A) in the case of any person other than 

13 a regulated entity, an amount not to exceed 

14 $2,000,000; and 

15 ‘‘(B) in the case of any regulated entity, 

16 $2,000,000.’’; 

17 (3) in subsection (c)(1)(B), by striking ‘‘enter18 prise, executive officer, or director’’ and inserting 

19 ‘‘regulated entity or regulated entity-affiliated party’’; 

20 (4) in subsection (d), by striking the first sen21 tence and inserting the following: ‘‘If a regulated enti22 ty or regulated entity-affiliated party fails to comply 

23 with an order of the Director imposing a civil money 

24 penalty under this section, after the order is no longer 

25 subject to review as provided under subsection (c)(1) 
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1 and section 1374, the Director may, in the discretion 

2 of the Director, bring an action in the United States 

3 District Court for the District of Columbia, or the 

4 United States district court within the jurisdiction of 

5 which the headquarters of the regulated entity is lo6 cated, to obtain a monetary judgment against the reg7 ulated entity or regulated entity affiliated party and 

8 such other relief as may be available, or request that 

9 the Attorney General of the United States bring such 

10 an action.’’; and 

11 (5) in subsection (g), by striking ‘‘subsection 

12 (b)(3)’’ and inserting ‘‘this section, unless authorized 

13 by the Director by rule, regulation, or order’’. 

14 SEC. 166. REMOVAL AND PROHIBITION AUTHORITY. 

15 (a) IN GENERAL.—Subtitle C of title XIII of the Hous16 ing and Community Development Act of 1992 is amend17 ed— 

18 (1) by redesignating sections 1377, 1378, 1379, 

19 1379A, and 1379B (12 U.S.C. 4637–41) as sections 

20 1379, 1379A, 1379B, 1379C, and 1379D, respectively; 

21 and 

22 (2) by inserting after section 1376 (12 U.S.C. 

23 4636) the following new section: 
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1 ‘‘SEC. 1377. REMOVAL AND PROHIBITION AUTHORITY. 

2 ‘‘(a) AUTHORITY TO ISSUE ORDER.—Whenever the Di3 rector determines that— 

4 ‘‘(1) any regulated entity-affiliated party has, 

5 directly or indirectly— 

6 ‘‘(A) violated— 

7 ‘‘(i) any law or regulation; 

8 ‘‘(ii) any cease-and-desist order which 

9 has become final; 

10 ‘‘(iii) any condition imposed in writ11 ing by the Director in connection with the 

12 grant of any application or other request by 

13 such regulated entity; or 

14 ‘‘(iv) any written agreement between 

15 such regulated entity and the Director; 

16 ‘‘(B) engaged or participated in any unsafe 

17 or unsound practice in connection with any reg18 ulated entity; or 

19 ‘‘(C) committed or engaged in any act, 

20 omission, or practice which constitutes a breach 

21 of such party’s fiduciary duty; 

22 ‘‘(2) by reason of the violation, practice, or 

23 breach described in any subparagraph of paragraph 

24 (1)— 
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1 ‘‘(A) such regulated entity has suffered or 

2 will probably suffer financial loss or other dam3 age; or 

4 ‘‘(B) such party has received financial gain 

5 or other benefit by reason of such violation, prac6 tice, or breach; and 

7 ‘‘(3) such violation, practice, or breach— 

8 ‘‘(A) involves personal dishonesty on the 

9 part of such party; or 

10 ‘‘(B) demonstrates willful or continuing dis11 regard by such party for the safety or soundness 

12 of such regulated entity, the Director may serve 

13 upon such party a written notice of the Direc14 tor’s intention to remove such party from office 

15 or to prohibit any further participation by such 

16 party, in any manner, in the conduct of the af17 fairs of any regulated entity. 

18 ‘‘(b) SUSPENSION ORDER.— 

19 ‘‘(1) SUSPENSION OR PROHIBITION AUTHOR20 ITY.—If the Director serves written notice under sub21 section (a) to any regulated entity-affiliated party of 

22 the Director’s intention to issue an order under such 

23 subsection, the Director may— 

24 ‘‘(A) suspend such party from office or pro25 hibit such party from further participation in 
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1 any manner in the conduct of the affairs of the 

2 regulated entity, if the Director— 

3 ‘‘(i) determines that such action is nec4 essary for the protection of the regulated en5 tity; and 

6 ‘‘(ii) serves such party with written 

7 notice of the suspension order; and 

8 ‘‘(B) prohibit the regulated entity from re9 leasing to or on behalf of the regulated entity-af10 filiated party any compensation or other pay11 ment of money or other thing of current or po12 tential value in connection with any resignation, 

13 removal, retirement, or other termination of em14 ployment or office of the party. 

15 ‘‘(2) EFFECTIVE PERIOD.—Any suspension order 

16 issued under this subsection— 

17 ‘‘(A) shall become effective upon service; and 

18 ‘‘(B) unless a court issues a stay of such 

19 order under subsection (g) of this section, shall 

20 remain in effect and enforceable until— 

21 ‘‘(i) the date the Director dismisses the 

22 charges contained in the notice served under 

23 subsection (a) with respect to such party; or 
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1 ‘‘(ii) the effective date of an order 

2 issued by the Director to such party under 

3 subsection (a). 

4 ‘‘(3) COPY OF ORDER.—If the Director issues a 

5 suspension order under this subsection to any regu6 lated entity-affiliated party, the Director shall serve a 

7 copy of such order on any regulated entity with which 

8 such party is affiliated at the time such order is 

9 issued. 

10 ‘‘(c) NOTICE, HEARING, AND ORDER.—A notice of in11 tention to remove a regulated entity-affiliated party from 

12 office or to prohibit such party from participating in the 

13 conduct of the affairs of a regulated entity shall contain 

14 a statement of the facts constituting grounds for such ac15 tion, and shall fix a time and place at which a hearing 

16 will be held on such action. Such hearing shall be fixed for 

17 a date not earlier than 30 days nor later than 60 days after 

18 the date of service of such notice, unless an earlier or a 

19 later date is set by the Director at the request of (1) such 

20 party, and for good cause shown, or (2) the Attorney Gen21 eral of the United States. Unless such party shall appear 

22 at the hearing in person or by a duly authorized representa23 tive, such party shall be deemed to have consented to the 

24 issuance of an order of such removal or prohibition. In the 

25 event of such consent, or if upon the record made at any 
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1 such hearing the Director shall find that any of the grounds 

2 specified in such notice have been established, the Director 

3 may issue such orders of suspension or removal from office, 

4 or prohibition from participation in the conduct of the af5 fairs of the regulated entity, as it may deem appropriate, 

6 together with an order prohibiting compensation described 

7 in subsection (b)(1)(B). Any such order shall become effec8 tive at the expiration of 30 days after service upon such 

9 regulated entity and such party (except in the case of an 

10 order issued upon consent, which shall become effective at 

11 the time specified therein). Such order shall remain effective 

12 and enforceable except to such extent as it is stayed, modi13 fied, terminated, or set aside by action of the Director or 

14 a reviewing court. 

15 ‘‘(d) PROHIBITION OF CERTAIN SPECIFIC ACTIVI16 TIES.—Any person subject to an order issued under this sec17 tion shall not— 

18 ‘‘(1) participate in any manner in the conduct 

19 of the affairs of any regulated entity; 

20 ‘‘(2) solicit, procure, transfer, attempt to trans21 fer, vote, or attempt to vote any proxy, consent, or au22 thorization with respect to any voting rights in any 

23 regulated entity; 

24 ‘‘(3) violate any voting agreement previously ap25 proved by the Director; or 
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1 ‘‘(4) vote for a director, or serve or act as a regu2 lated entity-affiliated party. 

3 ‘‘(e) INDUSTRY-WIDE PROHIBITION.— 

4 ‘‘(1) IN GENERAL.—Except as provided in para5 graph (2), any person who, pursuant to an order 

6 issued under this section, has been removed or sus7 pended from office in a regulated entity or prohibited 

8 from participating in the conduct of the affairs of a 

9 regulated entity may not, while such order is in effect, 

10 continue or commence to hold any office in, or par11 ticipate in any manner in the conduct of the affairs 

12 of, any regulated entity. 

13 ‘‘(2) EXCEPTION IF DIRECTOR PROVIDES WRIT14 TEN CONSENT.—If, on or after the date an order is 

15 issued under this section which removes or suspends 

16 from office any regulated entity-affiliated party or 

17 prohibits such party from participating in the con18 duct of the affairs of a regulated entity, such party 

19 receives the written consent of the Director, the order 

20 shall, to the extent of such consent, cease to apply to 

21 such party with respect to the regulated entity de22 scribed in the written consent. If the Director grants 

23 such a written consent, it shall publicly disclose such 

24 consent. 
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1 ‘‘(3) VIOLATION OF PARAGRAPH (1) TREATED AS

2 VIOLATION OF ORDER.—Any violation of paragraph 

3 (1) by any person who is subject to an order described 

4 in such subsection shall be treated as a violation of 

5 the order. 

6 ‘‘(f) APPLICABILITY.—This section shall only apply to 

7 a person who is an individual, unless the Director specifi8 cally finds that it should apply to a corporation, firm, or 

9 other business enterprise. 

10 ‘‘(g) STAY OF SUSPENSION AND PROHIBITION OF REG11 ULATED ENTITY-AFFILIATED PARTY.—Within 10 days 

12 after any regulated entity-affiliated party has been sus13 pended from office and/or prohibited from participation in 

14 the conduct of the affairs of a regulated entity under this 

15 section, such party may apply to the United States District 

16 Court for the District of Columbia, or the United States 

17 district court for the judicial district in which the head18 quarters of the regulated entity is located, for a stay of such 

19 suspension and/or prohibition and any prohibition under 

20 subsection (b)(1)(B) pending the completion of the adminis21 trative proceedings pursuant to the notice served upon such 

22 party under this section, and such court shall have jurisdic23 tion to stay such suspension and/or prohibition. 

24 ‘‘(h) SUSPENSION OR REMOVAL OF REGULATED ENTI25 TY-AFFILIATED PARTY CHARGED WITH FELONY.— 
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1 ‘‘(1) SUSPENSION OR PROHIBITION.— 

2 ‘‘(A) IN GENERAL.—Whenever any regu3 lated entity-affiliated party is charged in any 

4 information, indictment, or complaint, with the 

5 commission of or participation in a crime in6 volving dishonesty or breach of trust which is 

7 punishable by imprisonment for a term exceed8 ing one year under State or Federal law, the Di9 rector may, if continued service or participation 

10 by such party may pose a threat to the regulated 

11 entity or impair public confidence in the regu12 lated entity, by written notice served upon such 

13 party— 

14 ‘‘(i) suspend such party from office or 

15 prohibit such party from further participa16 tion in any manner in the conduct of the 

17 affairs of any regulated entity; and 

18 ‘‘(ii) prohibit the regulated entity from 

19 releasing to or on behalf of the regulated en20 tity-affiliated party any compensation or 

21 other payment of money or other thing of 

22 current or potential value in connection 

23 with the period of any such suspension or 

24 with any resignation, removal, retirement, 
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1 or other termination of employment or of2 fice of the party. 

3 ‘‘(B) PROVISIONS APPLICABLE TO NO4 TICE.— 

5 ‘‘(i) COPY.—A copy of any notice 

6 under paragraph (1)(A) shall also be served 

7 upon the regulated entity. 

8 ‘‘(ii) EFFECTIVE PERIOD.—A suspen9 sion or prohibition under subparagraph (A) 

10 shall remain in effect until the information, 

11 indictment, or complaint referred to in such 

12 subparagraph is finally disposed of or until 

13 terminated by the Director. 

14 ‘‘(2) REMOVAL OR PROHIBITION.— 

15 ‘‘(A) IN GENERAL.—If a judgment of con16 viction or an agreement to enter a pretrial diver17 sion or other similar program is entered against 

18 a regulated entity-affiliated party in connection 

19 with a crime described in paragraph (1)(A), at 

20 such time as such judgment is not subject to fur21 ther appellate review, the Director may, if con22 tinued service or participation by such party 

23 may pose a threat to the regulated entity or im24 pair public confidence in the regulated entity, 

25 issue and serve upon such party an order that— 
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1 ‘‘(i) removes such party from office or 

2 prohibits such party from further participa3 tion in any manner in the conduct of the 

4 affairs of the regulated entity without the 

5 prior written consent of the Director; and 

6 ‘‘(ii) prohibits the regulated entity 

7 from releasing to or on behalf of the regu8 lated entity-affiliated party any compensa9 tion or other payment of money or other 

10 thing of current or potential value in con11 nection with the termination of employment 

12 or office of the party. 

13 ‘‘(B) PROVISIONS APPLICABLE TO ORDER.— 

14 ‘‘(i) COPY.—A copy of any order under 

15 paragraph (2)(A) shall also be served upon 

16 the regulated entity, whereupon the regu17 lated entity-affiliated party who is subject 

18 to the order (if a director or an officer) 

19 shall cease to be a director or officer of such 

20 regulated entity. 

21 ‘‘(ii) EFFECT OF ACQUITTAL.—A find22 ing of not guilty or other disposition of the 

23 charge shall not preclude the Director from 

24 instituting proceedings after such finding or 

25 disposition to remove such party from office 
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1 or to prohibit further participation in regu2 lated entity affairs, and to prohibit com3 pensation or other payment of money or 

4 other thing of current or potential value in 

5 connection with any resignation, removal, 

6 retirement, or other termination of employ7 ment or office of the party, pursuant to sub8 sections (a), (d), or (e) of this section. 

9 ‘‘(iii) EFFECTIVE PERIOD.—Any notice 

10 of suspension or order of removal issued 

11 under this subsection shall remain effective 

12 and outstanding until the completion of any 

13 hearing or appeal authorized under para14 graph (4) unless terminated by the Director. 

15 ‘‘(3) AUTHORITY OF REMAINING BOARD MEM16 BERS.—If at any time, because of the suspension of 

17 one or more directors pursuant to this section, there 

18 shall be on the board of directors of a regulated entity 

19 less than a quorum of directors not so suspended, all 

20 powers and functions vested in or exercisable by such 

21 board shall vest in and be exercisable by the director 

22 or directors on the board not so suspended, until such 

23 time as there shall be a quorum of the board of direc24 tors. In the event all of the directors of a regulated 

25 entity are suspended pursuant to this section, the Di-
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1 rector shall appoint persons to serve temporarily as 

2 directors in their place and stead pending the termi3 nation of such suspensions, or until such time as 

4 those who have been suspended cease to be directors of 

5 the regulated entity and their respective successors 

6 take office. 

7 ‘‘(4) HEARING REGARDING CONTINUED PARTICI8 PATION.—Within 30 days from service of any notice 

9 of suspension or order of removal issued pursuant to 

10 paragraph (1) or (2) of this subsection, the regulated 

11 entity-affiliated party concerned may request in writ12 ing an opportunity to appear before the Director to 

13 show that the continued service to or participation in 

14 the conduct of the affairs of the regulated entity by 

15 such party does not, or is not likely to, pose a threat 

16 to the interests of the regulated entity or threaten to 

17 impair public confidence in the regulated entity. 

18 Upon receipt of any such request, the Director shall 

19 fix a time (not more than 30 days after receipt of 

20 such request, unless extended at the request of such 

21 party) and place at which such party may appear, 

22 personally or through counsel, before one or more 

23 members of the Director or designated employees of 

24 the Director to submit written materials (or, at the 

25 discretion of the Director, oral testimony) and oral 
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1 argument. Within 60 days of such hearing, the Direc2 tor shall notify such party whether the suspension or 

3 prohibition from participation in any manner in the 

4 conduct of the affairs of the regulated entity will be 

5 continued, terminated, or otherwise modified, or 

6 whether the order removing such party from office or 

7 prohibiting such party from further participation in 

8 any manner in the conduct of the affairs of the regu9 lated entity, and prohibiting compensation in connec10 tion with termination will be rescinded or otherwise 

11 modified. Such notification shall contain a statement 

12 of the basis for the Director’s decision, if adverse to 

13 such party. The Director is authorized to prescribe 

14 such rules as may be necessary to effectuate the pur15 poses of this subsection. 

16 ‘‘(i) HEARINGS AND JUDICIAL REVIEW.— 

17 ‘‘(1) VENUE AND PROCEDURE.—Any hearing 

18 provided for in this section shall be held in the Dis19 trict of Columbia or in the Federal judicial district 

20 in which the headquarters of the regulated entity is 

21 located, unless the party afforded the hearing consents 

22 to another place, and shall be conducted in accord23 ance with the provisions of chapter 5 of title 5, 

24 United States Code. After such hearing, and within 

25 90 days after the Director has notified the parties 
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1 that the case has been submitted to it for final deci2 sion, it shall render its decision (which shall include 

3 findings of fact upon which its decision is predicated) 

4 and shall issue and serve upon each party to the pro5 ceeding an order or orders consistent with the provi6 sions of this section. Judicial review of any such 

7 order shall be exclusively as provided in this sub8 section. Unless a petition for review is timely filed in 

9 a court of appeals of the United States, as provided 

10 in paragraph (2), and thereafter until the record in 

11 the proceeding has been filed as so provided, the Di12 rector may at any time, upon such notice and in such 

13 manner as it shall deem proper, modify, terminate, or 

14 set aside any such order. Upon such filing of the 

15 record, the Director may modify, terminate, or set 

16 aside any such order with permission of the court. 

17 ‘‘(2) REVIEW OF ORDER.—Any party to any 

18 proceeding under paragraph (1) may obtain a review 

19 of any order served pursuant to paragraph (1) (other 

20 than an order issued with the consent of the regulated 

21 entity or the regulated entity-affiliated party con22 cerned, or an order issued under subsection (h) of this 

23 section) by the filing in the United States Court of 

24 Appeals for the District of Columbia Circuit or court 

25 of appeals of the United States for the circuit in 
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1 which the headquarters of the regulated entity is lo2 cated, within 30 days after the date of service of such 

3 order, a written petition praying that the order of the 

4 Director be modified, terminated, or set aside. A copy 

5 of such petition shall be forthwith transmitted by the 

6 clerk of the court to the Director, and thereupon the 

7 Director shall file in the court the record in the pro8 ceeding, as provided in section 2112 of title 28, 

9 United States Code. Upon the filing of such petition, 

10 such court shall have jurisdiction, which upon the fil11 ing of the record shall (except as provided in the last 

12 sentence of paragraph (1)) be exclusive, to affirm, 

13 modify, terminate, or set aside, in whole or in part, 

14 the order of the Director. Review of such proceedings 

15 shall be had as provided in chapter 7 of title 5, 

16 United States Code. The judgment and decree of the 

17 court shall be final, except that the same shall be sub18 ject to review by the Supreme Court upon certiorari, 

19 as provided in section 1254 of title 28, United States 

20 Code. 

21 ‘‘(3) PROCEEDINGS NOT TREATED AS STAY.—The 

22 commencement of proceedings for judicial review 

23 under paragraph (2) shall not, unless specifically or24 dered by the court, operate as a stay of any order 

25 issued by the Director.’’. 
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1 (b) CONFORMING AMENDMENTS.— 

2 (1) 1992 ACT.—Section 1317(f) of the Housing 

3 and Community Development Act of 1992 (12 U.S.C. 

4 4517(f)) is amended by striking ‘‘section 1379B’’ and 

5 inserting ‘‘section 1379D’’. 

6 (2) FANNIE MAE CHARTER ACT.—The second sen7 tence of subsection (b) of section 308 of the Federal 

8 National Mortgage Association Charter Act (12 

9 U.S.C. 1723(b)) is amended by striking ‘‘The’’ and 

10 inserting ‘‘Except to the extent that action under sec11 tion 1377 of the Housing and Community Develop12 ment Act of 1992 temporarily results in a lesser num13 ber, the’’. 

14 (3) FREDDIE MAC ACT.—The second sentence of 

15 subparagraph (A) of section 303(a)(2) of the Federal 

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

17 1452(a)(2)(A)) is amended by striking ‘‘The’’ and in18 serting ‘‘Except to the extent that action under section 

19 1377 of the Housing and Community Development 

20 Act of 1992 temporarily results in a lesser number, 

21 the’’. 

22 SEC. 167. CRIMINAL PENALTY. 

23 Subtitle C of title XIII of the Housing and Community 

24 Development Act of 1992 (12 U.S.C. 4631 et seq.) is amend-
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1 ed by inserting after section 1377 (as added by the pre2 ceding provisions of this Act) the following new section: 

3 ‘‘SEC. 1378. CRIMINAL PENALTY. 

4 ‘‘Whoever, being subject to an order in effect under sec5 tion 1377, without the prior written approval of the Direc6 tor, knowingly participates, directly or indirectly, in any 

7 manner (including by engaging in an activity specifically 

8 prohibited in such an order) in the conduct of the affairs 

9 of any regulated entity shall, notwithstanding section 3571 

10 of title 18, be fined not more than $1,000,000, imprisoned 

11 for not more than 5 years, or both.’’. 

12 SEC. 168. SUBPOENA AUTHORITY. 

13 Section 1379D(c) of the Housing and Community De14 velopment Act of 1992 (12 U.S.C. 4641(c)), as so redesig15 nated by section 165(a)(1) of this Act, is further amended— 

16 (1) by striking ‘‘request the Attorney General of 

17 the United States to’’ and inserting ‘‘, in the discre18 tion of the Director,’’; 

19 (2) by inserting ‘‘or request that the Attorney 

20 General of the United States bring such an action,’’ 

21 after ‘‘District of Columbia,’’; and 

22 (3) by striking ‘‘or may, under the direction and 

23 control of the Attorney General, bring such an ac24 tion’’. 
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1 SEC. 169. CONFORMING AMENDMENTS. 

2 Subtitle C of title XIII of the Housing and Community 

3 Development Act of 1992 is amended— 

4 (1) in section 1372(c)(1) (12 U.S.C. 4632(c)), by 

5 striking ‘‘that enterprise’’ and inserting ‘‘that regu6 lated entity’’; 

7 (2) in section 1379 (12 U.S.C. 4637), as so redes8 ignated by section 165(a)(1) of this Act— 

9 (A) by inserting ‘‘, or of a regulated entity10 affiliated party,’’ before ‘‘shall not affect’’; and 

11 (B) by striking ‘‘such director or executive 

12 officer’’ each place such term appears and insert13 ing ‘‘such director, executive officer, or regulated 

14 entity-affiliated party’’; 

15 (3) in section 1379A (12 U.S.C. 4638), as so re16 designated by section 165(a)(1) of this Act, by insert17 ing ‘‘or against a regulated entity-affiliated party,’’ 

18 before ‘‘or impair’’; 

19 (4) by striking ‘‘An enterprise’’ each place such 

20 term appears in such subtitle and inserting ‘‘A regu21 lated entity’’; 

22 (5) by striking ‘‘an enterprise’’ each place such 

23 term appears in such subtitle and inserting ‘‘a regu24 lated entity’’; 
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1 (6) by striking ‘‘the enterprise’’ each place such 

2 term appears in such subtitle and inserting ‘‘the regu3 lated entity’’; and 

4 (7) by striking ‘‘any enterprise’’ each place such 

5 term appears in such subtitle and inserting ‘‘any reg6 ulated entity’’. 

7 Subtitle E—General Provisions 

8 SEC. 181. PRESIDENTIALLY APPOINTED DIRECTORS OF EN9 TERPRISES. 

10 (a) FANNIE MAE.— 

11 (1) IN GENERAL.—Subsection (b) of section 308 

12 of the Federal National Mortgage Association Charter 

13 Act (12 U.S.C. 1723(b)) is amended— 

14 (A) in the first sentence, by striking ‘‘eight15 een persons, five of whom shall be appointed an16 nually by the President of the United States, and 

17 the remainder of whom’’ and inserting ‘‘not less 

18 than 7 and not more than 15 persons, who’’; 

19 (B) in the second sentence, by striking ‘‘ap20 pointed by the President’’; 

21 (C) in the third sentence— 

22 (i) by striking ‘‘appointed or’’; and 

23 (ii) by striking ‘‘, except that any such 

24 appointed member may be removed from of25 fice by the President for good cause’’; 
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1 (D) in the fourth sentence, by striking ‘‘elec2 tive’’; and 

3 (E) by striking the fifth sentence. 

4 (2) TRANSITIONAL PROVISION.—The amendments 

5 made by paragraph (1) shall not apply to any ap6 pointed position of the board of directors of the Fed7 eral National Mortgage Association until the expira8 tion of the annual term for such position during 

9 which the effective date under section 185 occurs. 

10 (b) FREDDIE MAC.— 

11 (1) IN GENERAL.—Paragraph (2) of section 

12 303(a) of the Federal Home Loan Mortgage Corpora13 tion Act (12 U.S.C. 1452(a)(2)) is amended— 

14 (A) in subparagraph (A)— 

15 (i) in the first sentence, by striking 

16 ‘‘18 persons, 5 of whom shall be appointed 

17 annually by the President of the United 

18 States and the remainder of whom’’ and in19 serting ‘‘not less than 7 and not more than 

20 15 persons, who’’; and 

21 (ii) in the second sentence, by striking 

22 ‘‘appointed by the President of the United 

23 States’’; 

24 (B) in subparagraph (B)— 

25 (i) by striking ‘‘such or’’; and 
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1 (ii) by striking ‘‘, except that any ap2 pointed member may be removed from office 

3 by the President for good cause’’; and 

4 (C) in subparagraph (C)— 

5 (i) by striking the first sentence; and 

6 (ii) by striking ‘‘elective’’. 

7 (2) TRANSITIONAL PROVISION.—The amendments 

8 made by paragraph (1) shall not apply to any ap9 pointed position of the Board of Directors of the Fed10 eral Home Loan Mortgage Corporation until the expi11 ration of the annual term for such position during 

12 which the effective date under section 185 occurs. 

13 SEC. 182. REPORT ON PORTFOLIO OPERATIONS, SAFETY 

14 AND SOUNDNESS, AND MISSION OF ENTER15 PRISES. 

16 Not later than the expiration of the 12-month period 

17 beginning on the effective date under section 185, the Direc18 tor of the Federal Housing Finance Agency shall submit 

19 a report to the Congress which shall include— 

20 (1) a description of the portfolio holdings of the 

21 enterprises (as such term is defined in section 1303 

22 of the Housing and Community Development Act of 

23 1992 (12 U.S.C. 4502) in mortgages (including whole 

24 loans and mortgage-backed securities), non-mortgages, 

25 and other assets; 
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1 (2) a description of the risk implications for the 

2 enterprises of such holdings and the consequent risk 

3 management undertaken by the enterprises (including 

4 the use of derivatives for hedging purposes), compared 

5 with off-balance sheet liabilities of the enterprises (in6 cluding mortgage-backed securities guaranteed by the 

7 enterprises); 

8 (3) an analysis of portfolio holdings for safety 

9 and soundness purposes; 

10 (4) an assessment of whether portfolio holdings 

11 fulfill the mission purposes of the enterprises under 

12 the Federal National Mortgage Association Charter 

13 Act and the Federal Home Loan Mortgage Corpora14 tion Act; and 

15 (5) an analysis of the potential systemic risk im16 plications for the enterprises, the housing and capital 

17 markets, and the financial system of portfolio hold18 ings, and whether such holdings should be limited or 

19 reduced over time. 

20 SEC. 183. CONFORMING AND TECHNICAL AMENDMENTS. 

21 (a) 1992 ACT.—Title XIII of the Housing and Com22 munity Development Act of 1992 is amended by striking 

23 section 1383 (12 U.S.C. 1451 note). 

24 (b) TITLE 18, UNITED STATES CODE.—Section 1905 

25 of title 18, United States Code, is amended by striking ‘‘Of-
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1 fice of Federal Housing Enterprise Oversight’’ and insert2 ing ‘‘Federal Housing Finance Agency’’ . 

3 (c) FLOOD DISASTER PROTECTION ACT OF 1973.— 

4 Section 102(f)(3)(A) of the Flood Disaster Protection Act 

5 of 1973 (42 U.S.C. 4012a(f)(3)(A)) is amended by striking 

6 ‘‘Director of the Office of Federal Housing Enterprise Over7 sight of the Department of Housing and Urban Develop8 ment’’ and inserting ‘‘Director of the Federal Housing Fi9 nance Agency’’. 

10 (d) DEPARTMENT OF HOUSING AND URBAN DEVELOP11 MENT ACT.—Section 5 of the Department of Housing and 

12 Urban Development Act (42 U.S.C. 3534) is amended by 

13 striking subsection (d). 

14 (e) TITLE 5, UNITED STATES CODE.— 

15 (1) DIRECTOR’S PAY RATE.—Section 5313 of 

16 title 5, United States Code, is amended by striking 

17 the item relating to the Director of the Office of Fed18 eral Housing Enterprise Oversight, Department of 

19 Housing and Urban Development and inserting the 

20 following new item: 

21 ‘‘ Director of the Federal Housing Finance Agency.’’. 

22 (2) DEPUTY DIRECTORS’ PAY RATE.—Section 

23 5314 of title 5, United States Code, is amended by 

24 adding at the end the following new item: 
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1 ‘‘Deputy Directors, Federal Housing Finance Agency 

2 (3).’’. 

3 (3) PAY RATE FOR MEMBERS OF HOUSING FI4 NANCE OVERSIGHT BOARD.—Section 5315 of title 5, 

5 United States Code, is amended by adding at the end 

6 the following new item: 

7 ‘‘Members, Housing Finance Oversight Board.’’. 

8 (4) EXCLUSION FROM SENIOR EXECUTIVE SERV9 ICE.—Section 3132(a)(1)(D) of title 5, United States 

10 Code, is amended by striking ‘‘the Office of Federal 

11 Housing Enterprise Oversight of the Department of 

12 Housing and Urban Development’’ and inserting ‘‘the 

13 Federal Housing Finance Agency’’. 

14 (f) INSPECTOR GENERAL ACT OF 1978.—Section 

15 8G(a)(2) of the Inspector General Act of 1978 (5 U.S.C. 

16 App.) is amended by striking ‘‘Federal Housing Finance 

17 Board’’ and inserting ‘‘Federal Housing Finance Agency’’. 

18 (g) FEDERAL DEPOSIT INSURANCE ACT.—Section 

19 11(t)(2)(A) of the Federal Deposit Insurance Act (12 

20 U.S.C.1821(t)(2)(A)) is amended by adding at the end the 

21 following new clause: 

22 ‘‘(vii) The Federal Housing Finance 

23 Agency.’’. 

24 (h) 1997 EMERGENCY SUPPLEMENTAL APPROPRIA25 TIONS ACT.—Section 10001 of the 1997 Emergency Supple-
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1 mental Appropriations Act for Recovery From Natural Dis2 asters, and for Overseas Peacekeeping Efforts, Including 

3 Those In Bosnia (42 U.S.C. 3548) is amended— 

4 (1) by striking ‘‘the Government National Mort5 gage Association, and the Office of Federal Housing 

6 Enterprise Oversight’’ and inserting ‘‘and the Govern7 ment National Mortgage Association’’; and 

8 (2) by striking ‘‘, the Government National 

9 Mortgage Association, or the Office of Federal Hous10 ing Enterprise Oversight’’ and inserting ‘‘or the Gov11 ernment National Mortgage Association’’. 

12 (i) NATIONAL HOMEOWNERSHIP TRUST ACT .—Sec13 tion 302(b)(4) of the Cranston-Gonzalez National Affordable 

14 Housing Act (42 U.S.C. 12851(b)(4)) is amended by strik15 ing ‘‘the chairperson of the Federal Housing Finance 

16 Board’’ and inserting ‘‘the Director of the Federal Housing 

17 Finance Agency’’. 

18 SEC. 184. STUDY OF ALTERNATIVE SECONDARY MARKET 

19 SYSTEMS. 

20 (a) IN GENERAL.—The Director of the Federal Hous21 ing Finance Agency, in consultation with the Board of Gov22 ernors of the Federal Reserve System, the Secretary of the 

23 Treasury, and the Secretary of Housing and Urban Devel24 opment, shall conduct a comprehensive study of the effects 

25 on financial and housing finance markets of alternatives 
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1 to the current secondary market system for housing finance, 

2 taking into consideration changes in the structure of finan3 cial and housing finance markets and institutions since the 

4 creation of the Federal National Mortgage Association and 

5 the Federal Home Loan Mortgage Corporation. 

6 (b) CONTENTS.—The study under this section shall— 

7 (1) include, among the alternatives to the current 

8 secondary market system analyzed— 

9 (A) repeal of the chartering Acts for the 

10 Federal National Mortgage Association and the 

11 Federal Home Loan Mortgage Corporation; 

12 (B) establishing bank-like mechanisms for 

13 granting new charters for limited purposed 

14 mortgage securitization entities; 

15 (C) permitting the Director of the Federal 

16 Housing Finance Agency to grant new charters 

17 for limited purpose mortgage securitization enti18 ties, which shall include analyzing the terms on 

19 which such charters should be granted, including 

20 whether such charters should be sold, or whether 

21 such charters and the charters for the Federal 

22 National Mortgage Association and the Federal 

23 Home Loan Mortgage Corporation should be 

24 taxed or otherwise assessed a monetary price; 

25 and 
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1 (D) such other alternatives as the Director 

2 considers appropriate; 

3 (2) examine all of the issues involved in making 

4 the transition to a completely private secondary mort5 gage market system; 

6 (3) examine the technological advancements the 

7 private sector has made in providing liquidity in the 

8 secondary mortgage market and how such advance9 ments have affected liquidity in the secondary mort10 gage market; and 

11 (4) examine how taxpayers would be impacted 

12 by each alternative system, including the complete 

13 privatization of the Federal National Mortgage Asso14 ciation and the Federal Home Loan Mortgage Cor15 poration. 

16 (c) REPORT.—The Director of the Federal Housing Fi17 nance Agency shall submit a report to the Congress on the 

18 study not later than the expiration of the 12-month period 

19 beginning on the effective date under section 185. 

20 SEC. 185. EFFECTIVE DATE. 

21 Except as specifically provided otherwise in this title, 

22 the amendments made by this title shall take effect on, and 

23 shall apply beginning on, the expiration of the 1-year pe24 riod beginning on the date of the enactment of this Act. 
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1 TITLE II—FEDERAL HOME LOAN 

2 BANKS 

3 SEC. 201. DEFINITIONS. 

4 Section 2 of the Federal Home Loan Bank Act (12 

5 U.S.C. 1422) is amended— 

6 (1) by striking paragraphs (1), (10), and (11); 

7 (2) by redesignating paragraphs (2) through (9) 

8 as paragraphs (1) through (8), respectively; 

9 (3) by redesignating paragraphs (12) and (13) 

10 as paragraphs (9) and (10), respectively; and 

11 (4) by adding at the end the following: 

12 ‘‘(11) DIRECTOR.—The term ‘Director’ means 

13 the Director of the Federal Housing Finance Agency. 

14 ‘‘(12) AGENCY.—The term ‘Agency’ means the 

15 Federal Housing Finance Agency.’’. 

16 SEC. 202. DIRECTORS. 

17 (a) ELECTION.—Section 7 of the Federal Home Loan 

18 Bank Act (12 U.S.C. 1427) is amended— 

19 (1) by striking subsection (a) and inserting the 

20 following: 

21 ‘‘(a) NUMBER; ELECTION; QUALIFICATIONS; CON22 FLICTS OF INTEREST.— 

23 ‘‘(1) IN GENERAL.—The management of each 

24 Federal Home Loan Bank shall be vested in a board 

25 of 13 directors, or such other number as the Director 
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1 determines appropriate, each of whom shall be elected 

2 by the members and shall be a citizen of the United 

3 States. 

4 ‘‘(2) MEMBER DIRECTORS.—A majority of the 

5 directors of each Bank shall be officers or directors of 

6 a member of such Bank that is located in the district 

7 in which such Bank is located. 

8 ‘‘(3) INDEPENDENT DIRECTORS.—At least one9 third of the directors of each Bank shall be inde10 pendent directors as follows: 

11 ‘‘(A) IN GENERAL.—Each independent di12 rector shall be a bona fide resident of the district 

13 in which such Bank is located. 

14 ‘‘(B) PUBLIC INTEREST DIRECTORS.—At 

15 least 2 of the independent directors under this 

16 paragraph of each Bank shall be representatives 

17 chosen from organizations with more than a 2- 

18 year history of representing consumer or commu19 nity interests on banking services, credit needs, 

20 housing, or financial consumer protections. 

21 ‘‘(C) OTHER DIRECTORS.—Each inde22 pendent director that is not a public interest di23 rector under subparagraph (B) shall have dem24 onstrated knowledge of, or experience in, finan25 cial management, auditing and accounting, risk 
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1 management practices, derivatives, project devel2 opment, or organizational management, or such 

3 other knowledge or expertise as the Director may 

4 provide by regulation. 

5 ‘‘(D) CONFLICTS OF INTEREST.—An inde6 pendent director under this paragraph of a Bank 

7 may not, during such director’s term of office, 

8 serve as an officer of any Federal Home Loan 

9 Bank or as a director or officer of any member 

10 of a Bank.’’; 

11 (2) in subsection (b)— 

12 (A) in the first sentence, by striking ‘‘direc13 torship’’ and inserting ‘‘member directorship 

14 pursuant to subsection (a)(2)’’; and 

15 (B) by inserting after the period at the end 

16 of the first sentence the following new sentence: 

17 ‘‘Each independent directorship pursuant to sub18 section (a)(3) shall be filled by election by a plu19 rality of the votes of the members of the Bank at 

20 large, in which election each member shall be en21 titled to nominate candidates and to cast the 

22 same number of votes as in an election to fill a 

23 directorship allocated to the member’s State.’’; 

24 (3) in subsection (c), by striking the second, 

25 third, and fifth sentences; 
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1 (4) in subsection (d)— 

2 (A) in the first sentence, by striking ‘‘, 

3 whether elected or appointed,’’; 

4 (B) in the second sentence, by striking ‘‘or 

5 appointed’’; and 

6 (C) in the third sentence, by striking ‘‘an 

7 elective’’ each place such term appears and in8 serting ‘‘a’’; and 

9 (5) by striking ‘‘elective’’ each place such term 

10 appears (except in subsection (e)). 

11 (b) TERMS.— 

12 (1) IN GENERAL.—Section 7(d) of the Federal 

13 Home Loan Bank Act (12 U.S.C. 1427(i)) is amend14 ed— 

15 (A) in the first sentence, by striking ‘‘3 

16 years’’ and inserting ‘‘4 years’’; and 

17 (B) in the second sentence— 

18 (i) by striking ‘‘Federal Home Loan 

19 Bank System Modernization Act of 1999’’ 

20 and inserting ‘‘Federal Housing Finance 

21 Reform Act of 2005’’; and 

22 (ii) by striking ‘‘1/3’’ and inserting ‘‘1/ 

23 4’’. 

24 (2) SAVINGS PROVISION.—The amendments made 

25 by paragraph (1) shall not apply to the term of office 
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1 of any director of a Federal home loan bank who is 

2 serving as of the effective date of this Act under sec3 tion 211, including any director elected to fill a va4 cancy in any such office. 

5 (c) VACANCIES.—Subsection (f) of section 7 of the Fed6 eral Home Loan Bank Act (12 U.S.C. 1427(f)) is amended 

7 to read as follows: 

8 ‘‘(f) VACANCIES.—A Bank director elected to fill a va9 cancy shall be elected for the unexpired term of his or her 

10 predecessor in office. In the event of a vacancy in any Bank 

11 directorship, such vacancy shall be filled by an affirmative 

12 vote of a majority of the remaining Bank directors, regard13 less of whether such remaining Bank directors constitute a 

14 quorum of the Bank’s board of directors. A Bank director 

15 so elected shall satisfy the requirements for eligibility which 

16 were applicable to his predecessor. If any Bank director 

17 shall cease to have any qualification set forth in this section, 

18 the office held by such person shall immediately become va19 cant. ’’. 

20 (d) COMPENSATION.—Subsection (i) of section 7 of the 

21 Federal Home Loan Bank Act (12 U.S.C. 1427(i)) is 

22 amended to read as follows: 

23 ‘‘(i) DIRECTORS’ COMPENSATION.— 

24 ‘‘(1) IN GENERAL.—Each Federal home loan 

25 bank may pay the directors on the board of directors 
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1 for the bank reasonable and appropriate compensa2 tion for the time required of such directors, and rea3 sonable and appropriate expenses incurred by such 

4 directors, in connection with service on the board of 

5 directors, in accordance with resolutions adopted by 

6 the board of directors and subject to the approval of 

7 the Director. 

8 ‘‘(2) ANNUAL REPORT BY THE BOARD.—The Di9 rector shall include, in the annual report submitted to 

10 the Congress pursuant to section 1319B of the Federal 

11 Housing Enterprises Financial Safety and Soundness 

12 Act of 1992, information regarding the compensation 

13 and expenses paid by the Federal home loan banks to 

14 the directors on the boards of directors of the banks.’’. 

15 (e) TRANSITION RULE.—Any member of the board of 

16 directors of a Federal Home Loan Bank serving as of the 

17 effective date under section 211 may continue to serve as 

18 a member of such board of directors for the remainder of 

19 the term of such office as provided in section 7 of the Fed20 eral Home Loan Bank Act, as in effect before such effective 

21 date. 
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1 SEC. 203. FEDERAL HOUSING FINANCE AGENCY OVERSIGHT 

2 OF FEDERAL HOME LOAN BANKS. 

3 The Federal Home Loan Bank Act (12 U.S.C. 1421 

4 et seq.), other than in provisions of that Act added or 

5 amended otherwise by this Act, is amended— 

6 (1) by striking sections 2A and 2B (12 U.S.C. 

7 1422a, 1422b); 

8 (2) in section 6 (12 U.S.C. 1426(b)(1))— 

9 (A) in subsection (b)(1), in the matter pre10 ceding subparagraph (A), by striking ‘‘Finance 

11 Board approval’’ and inserting ‘‘approval by the 

12 Director’’; and 

13 (B) in each of subsections (c)(4)(B) and 

14 (d)(2), by striking ‘‘Finance Board regulations’’ 

15 each place that term appears and inserting ‘‘reg16 ulations of the Director’’; 

17 (3) in section 8 (12 U.S.C. 1428), in the section 

18 heading, by striking ‘‘BY THE BOARD’’; 

19 (4) in section 10(b) (12 U.S.C. 1430), by strik20 ing ‘‘by formal resolution’’; 

21 (5) in section 11 (12 U.S.C. 1431)— 

22 (A) in subsection (b)— 

23 (i) in the first sentence— 

24 (I) by striking ‘‘The Board’’ and 

25 inserting ‘‘The Office of Finance, as 

26 agent for the Banks,’’; and 
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1 (II) by striking ‘‘the Board’’ and 

2 inserting ‘‘such Office’’; and 

3 (ii) in the second and fourth sentences, 

4 by striking ‘‘the Board’’ each place such 

5 term appears and inserting ‘‘the Office of 

6 Finance’’; 

7 (B) in subsection (c)— 

8 (i) by striking ‘‘the Board’’ the first 

9 place such term appears and inserting ‘‘the 

10 Office of Finance, as agent for the Banks,’’; 

11 and 

12 (ii) by striking ‘‘the Board’’ the second 

13 place such term appears and inserting 

14 ‘‘such Office’’; and 

15 (C) in subsection (f)— 

16 (i) by striking the two commas after 

17 ‘‘permit’’ and inserting ‘‘or’’; and 

18 (ii) by striking the comma after ‘‘re19 quire’’; 

20 (6) in section 15 (12 U.S.C. 1435), by inserting 

21 ‘‘or the Director’’ after ‘‘the Board’’; 

22 (7) in section 18 (12 U.S.C. 1438), by striking 

23 subsection (b); 

24 (8) in section 21 (12 U.S.C. 1441)— 

25 (A) in subsection (b)— 
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1 (i) in paragraph (5), by striking 

2 ‘‘Chairperson of the Federal Housing Fi3 nance Board’’ and inserting ‘‘Director’’; 

4 and 

5 (ii) in the heading for paragraph (8), 

6 by striking ‘‘FEDERAL HOUSING FINANCE

7 BOARD’’ and inserting ‘‘DIRECTOR’’; and 

8 (B) in subsection (i), in the heading for 

9 paragraph (2), by striking ‘‘FEDERAL HOUSING

10 FINANCE BOARD’’ and inserting ‘‘DIRECTOR’’; 

11 (9) in section 23 (12 U.S.C. 1443), by striking 

12 ‘‘Board of Directors of the Federal Housing Finance 

13 Board’’ and inserting ‘‘Director’’; 

14 (10) by striking ‘‘the Board’’ each place such 

15 term appears in such Act (except in section 15 (12 

16 U.S.C. 1435), section 21(f)(2) (12 U.S.C. 1441(f)(2)), 

17 subsections (a), (k)(2)(B)(i), and (n)(6)(C)(ii) of sec18 tion 21A (12 U.S.C. 1441a), subsections (e)(7), 

19 (f)(2)(C), and (k)(7)(B)(ii) of section 21B (12 U.S.C. 

20 1441b), and the first two places such term appears in 

21 section 22 (12 U.S.C. 1442)) and inserting ‘‘the Di22 rector’’; 

23 (11) by striking ‘‘The Board’’ each place such 

24 term appears in such Act (except in sections 7(e) (12 
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1 U.S.C. 1427(e)), and 11(b) (12 U.S.C. 1431(b)) and 

2 inserting ‘‘The Director’’; 

3 (12) by striking ‘‘the Board’s’’ each place such 

4 term appears in such Act and inserting ‘‘the Direc5 tor’s’’; 

6 (13) by striking ‘‘The Board’s’’ each place such 

7 term appears in such Act and inserting ‘‘The Direc8 tor’s’’; 

9 (14) by striking ‘‘The Finance Board’’ each place 

10 such term appears in such Act and inserting ‘‘The 

11 Director’’; 

12 (15) by striking ‘‘the Finance Board’’ each place 

13 such term appears in such Act and inserting ‘‘the Di14 rector’’; 

15 (16) by striking ‘‘Federal Housing Finance 

16 Board’’ each place such term appears and inserting 

17 ‘‘Director’’; 

18 (17) in section 11(i) (12 U.S.C. 1431(i), by 

19 striking ‘‘the Chairperson of’’; and 

20 (18) in section 21(e)(9) (12 U.S.C. 1441(e)(9)), 

21 by striking ‘‘Chairperson of the’’. 

22 SEC. 204. JOINT ACTIVITIES OF BANKS. 

23 Section 11 of the Federal Home Loan Bank Act (12 

24 U.S.C. 1431) is amended by adding at the end the following 

25 new subsection: 
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1 ‘‘(l) JOINT ACTIVITIES.—Subject to the regulation of 

2 the Director, any two or more Federal Home Loan Banks 

3 may establish a joint office for the purpose of performing 

4 functions for, or providing services to, the Banks on a com5 mon or collective basis, or may require that the Office of 

6 Finance perform such functions or services, but only if the 

7 Banks are otherwise authorized to perform such functions 

8 or services individually.’’. 

9 SEC. 205. SHARING OF INFORMATION BETWEEN FEDERAL 

10 HOME LOAN BANKS. 

11 (a) IN GENERAL.— The Federal Home Loan Bank Act 

12 is amended by inserting after section 20 (12 U.S.C. 1440) 

13 the following new section: 

14 ‘‘SEC. 20A. SHARING OF INFORMATION BETWEEN FEDERAL 

15 HOME LOAN BANKS. 

16 ‘‘(a) REGULATORY AUTHORITY.—The Director shall 

17 prescribe such regulations as may be necessary to ensure 

18 that each Federal Home Loan Bank has access to informa19 tion that the Bank needs to determine the nature and extent 

20 of its joint and several liability. 

21 ‘‘(b) NO WAIVER OF PRIVILEGE.—The Director shall 

22 not be deemed to have waived any privilege applicable to 

23 any information concerning a Federal Home Loan Bank 

24 by transferring, or permitting the transfer of, that informa25 tion to any other Federal Home Loan Bank for the purpose 
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1 of enabling the recipient to evaluate the nature and extent 

2 of its joint and several liability.’’. 

3 (b) REGULATIONS.—The regulations required under 

4 the amendment made by subsection (a) shall be issued in 

5 final form not later than 6 months after the effective date 

6 under section 211 of this Act. 

7 SEC. 206. REORGANIZATION OF BANKS AND VOLUNTARY 

8 MERGER. 

9 Section 26 of the Federal Home Loan Bank Act (12 

10 U.S.C. 1446) is amended— 

11 (1) by inserting ‘‘(a) REORGANIZATION.—’’ be12 fore ‘‘Whenever’’; and 

13 (2) by striking ‘‘liquidated or’’ each place such 

14 phrase appears; 

15 (3) by striking ‘‘liquidation or’’; and 

16 (4) by adding at the end the following new sub17 section: 

18 ‘‘(b) VOLUNTARY MERGERS.—Any Bank may, with the 

19 approval of the Director, and the approval of the boards 

20 of directors of the Banks involved, merge with another 

21 Bank. The Director shall promulgate regulations estab22 lishing the conditions and procedures for the consideration 

23 and approval of any such voluntary merger, including the 

24 procedures for Bank member approval.’’. 
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1 SEC. 207. SECURITIES AND EXCHANGE COMMISSION DIS2 CLOSURE. 

3 (a) IN GENERAL.—The Federal Home Loan Banks 

4 shall be exempt from compliance with— 

5 (1) sections 13(e), 14(a), 14(c), and 17A of the 

6 Securities Exchange Act of 1934 and related Commis7 sion regulations; and 

8 (2) section 15 of that Act and related Securities 

9 and Exchange Commission regulations with respect to 

10 transactions in capital stock of the Banks. 

11 (b) MEMBER EXEMPTION.—The members of the Fed12 eral Home Loan Banks shall be exempt from compliance 

13 with sections 13(d), 13(f), 13(g), 14(d), and 16 of the Secu14 rities Exchange Act of 1934 and related Securities and Ex15 change Commission regulations with respect to their owner16 ship of, or transactions in, capital stock of the Federal 

17 Home Loan Banks. 

18 (c) EXEMPTED AND GOVERNMENT SECURITIES.— 

19 (1) CAPITAL STOCK.—The capital stock issued by 

20 each of the Federal Home Loan Banks under section 

21 6 of the Federal Home Loan Bank Act are— 

22 (A) exempted securities within the meaning 

23 of section 3(a)(2) of the Securities Act of 1933; 

24 and 
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1 (B) ‘‘exempted securities’’ within the mean2 ing of section 3(a)(12)(A) of the Securities Ex3 change Act of 1934. 

4 (2) OTHER OBLIGATIONS.—The debentures, 

5 bonds, and other obligations issued under section 11 

6 of the Federal Home Loan Bank Act are— 

7 (A) exempted securities within the meaning 

8 of section 3(a)(2) of the Securities Act of 1933; 

9 (B) ‘‘government securities’’ within the 

10 meaning of section 3(a)(42) of the Securities Ex11 change Act of 1934; 

12 (C) excluded from the definition of ‘‘govern13 ment securities broker’’ within section 3(a)(43) 

14 of the Securities Exchange Act of 1934; 

15 (D) excluded from the definition of ‘‘govern16 ment securities dealer’’ within section 3(a)(44) of 

17 the Securities Exchange Act of 1934; and 

18 (E) ‘‘government securities’’ within the 

19 meaning of section 2(a)(16) of the Investment 

20 Company Act of 1940. 

21 (d) EXEMPTION FROM REPORTING REQUIREMENTS.— 

22 The Federal Home Loan Banks shall be exempt from peri23 odic reporting requirements pertaining to— 
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1 (1) the disclosure of related party transactions 

2 that occur in the ordinary course of business of the 

3 Banks with their members; and 

4 (2) the disclosure of unregistered sales of equity 

5 securities. 

6 (e) TENDER OFFERS.—The Securities and Exchange 

7 Commission’s rules relating to tender offers shall not apply 

8 in connection with transactions in capital stock of the Fed9 eral Home Loan Banks. 

10 (f) REGULATIONS.—In issuing final regulations to im11 plement provisions of this section, the Securities and Ex12 change Commission shall consider the distinctive character13 istics of the Federal Home Loan Banks when evaluating 

14 the accounting treatment with respect to the payment to 

15 Resolution Funding Corporation, the role of the combined 

16 financial statements of the twelve Banks, the accounting 

17 classification of redeemable capital stock, and the account18 ing treatment related to the joint and several nature of the 

19 obligations of the Banks. 

20 SEC. 208. COMMUNITY FINANCIAL INSTITUTION MEMBERS. 

21 (a) TOTAL ASSET REQUIREMENT.—Paragraph (10) of 

22 section 2 of the Federal Home Loan Bank Act (12 U.S.C. 

23 1422(10)), as so redesignated by section 201(3) of this Act, 

24 is amended by striking ‘‘$500,000,000’’ each place such 

25 term appears and inserting ‘‘$1,000,000,000’’. 
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1 (b) USE OF ADVANCES FOR COMMUNITY DEVELOP2 MENT ACTIVITIES.—Section 10(a) of the Federal Home 

3 Loan Bank Act (12 U.S.C. 1430(a)) is amended— 

4 (1) in paragraph (2)(B)— 

5 (A) by striking ‘‘and’’; and 

6 (B) by inserting ‘‘, and community develop7 ment activities’’ before the period at the end; 

8 (2) in paragraph (3)(E), by inserting ‘‘or com9 munity development activities’’ after ‘‘agriculture,’’; 

10 and 

11 (3) in paragraph (6)— 

12 (A) by striking ‘‘and’’; and 

13 (B) by inserting ‘‘, and ‘community devel14 opment activities’ ’’ before ‘‘shall’’. 

15 SEC. 209. TECHNICAL AND CONFORMING AMENDMENTS. 

16 (a) RIGHT TO FINANCIAL PRIVACY ACT OF 1978.—Sec17 tion 1113(o) of the Right to Financial Privacy Act of 1978 

18 (12 U.S.C. 3413(o)) is amended— 

19 (1) by striking ‘‘Federal Housing Finance 

20 Board’’ and inserting ‘‘Federal Housing Finance 

21 Agency’’; and 

22 (2) by striking ‘‘Federal Housing Finance 

23 Board’s’’ and inserting ‘‘Federal Housing Finance 

24 Agency’s’’. 
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1 (b) RIEGLE COMMUNITY DEVELOPMENT AND REGU2 LATORY IMPROVEMENT ACT OF 1994.—Section 117(e) of the 

3 Riegle Community Development and Regulatory Improve4 ment Act of 1994 (12 U.S.C. 4716(e)) is amended by strik5 ing ‘‘Federal Housing Finance Board’’ and inserting ‘‘Fed6 eral Housing Finance Agency’’. 

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

8 United States Code, is amended by striking ‘‘Federal Hous9 ing Finance Board’’ each place such term appears in each 

10 of sections 212, 657, 1006, 1014, and inserting ‘‘Federal 

11 Housing Finance Agency’’. 

12 (d) MAHRA ACT OF 1997.—Section 517(b)(4) of the 

13 Multifamily Assisted Housing Reform and Affordability 

14 Act of 1997 (42 U.S.C. 1437f note) is amended by striking 

15 ‘‘Federal Housing Finance Board’’ and inserting ‘‘Federal 

16 Housing Finance Agency’’. 

17 (e) TITLE 44, UNITED STATES CODE.—Section 

18 3502(5) of title 44, United States Code, is amended by strik19 ing ‘‘Federal Housing Finance Board’’ and inserting ‘‘Fed20 eral Housing Finance Agency’’. 

21 (f) ACCESS TO LOCAL TV ACT OF 2000.—Section 

22 1004(d)(2)(D)(iii) of the Launching Our Communities’ Ac23 cess to Local Television Act of 2000 (47 U.S.C. 

24 1103(d)(2)(D)(iii)) is amended by striking ‘‘Office of Fed25 eral Housing Enterprise Oversight, the Federal Housing Fi-
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1 nance Board’’ and inserting ‘‘Federal Housing Finance 

2 Agency’’. 

3 SEC. 210. STUDY OF AFFORDABLE HOUSING PROGRAM USE 

4 FOR LONG-TERM CARE FACILITIES. 

5 The Comptroller General shall conduct a study of the 

6 use of affordable housing programs of the Federal home loan 

7 banks under section 10(j) of the Federal Home Loan Bank 

8 Act to determine how and the extent to which such programs 

9 are used to assist long-term care facilities for low- and mod10 erate-income individuals, and the effectiveness and ade11 quacy of such assistance in meeting the needs of affected 

12 communities. The study shall examine the applicability of 

13 such use to the affordable housing programs required to be 

14 established by the enterprises pursuant to the amendment 

15 made by section 128 of this Act. The Comptroller General 

16 shall submit a report to the Director of the Federal Housing 

17 Finance Agency and the Congress regarding the results of 

18 the study not later than the expiration of the 1-year period 

19 beginning on the date of the enactment of this Act. 

20 SEC. 211. EFFECTIVE DATE. 

21 Except as specifically provided otherwise in this title, 

22 the amendments made by this title shall take effect on, and 

23 shall apply beginning on, the expiration of the 1-year pe24 riod beginning on the date of the enactment of this Act. 
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1 TITLE III—TRANSFER OF FUNC2 TIONS, PERSONNEL, AND 

3 PROPERTY OF OFFICE OF 

4 FEDERAL HOUSING ENTER5 PRISE OVERSIGHT, FEDERAL 

6 HOUSING FINANCE BOARD, 

7 AND DEPARTMENT OF HOUS8 ING AND URBAN DEVELOP9 MENT 

10 Subtitle A—Office of Federal 

11 Housing Enterprise Oversight 

12 SEC. 301. ABOLISHMENT OF OFHEO. 

13 (a) IN GENERAL.—Effective at the end of the 1-year 

14 period beginning on the date of the enactment of this Act, 

15 the Office of Federal Housing Enterprise Oversight of the 

16 Department of Housing and Urban Development and the 

17 positions of the Director and Deputy Director of such Office 

18 are abolished. 

19 (b) DISPOSITION OF AFFAIRS.—During the 1-year pe20 riod beginning on the date of the enactment of this Act, 

21 the Director of the Office of Federal Housing Enterprise 

22 Oversight shall, solely for the purpose of winding up the 

23 affairs of the Office of Federal Housing Enterprise Over24 sight— 
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1 (1) manage the employees of such Office and pro2 vide for the payment of the compensation and benefits 

3 of any such employee which accrue before the effective 

4 date of the transfer of such employee pursuant to sec5 tion 303; and 

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

7 purpose of winding up the affairs of the Office. 

8 (c) STATUS OF EMPLOYEES BEFORE TRANSFER.—The 

9 amendments made by title I and the abolishment of the Of10 fice of Federal Housing Enterprise Oversight under sub11 section (a) of this section may not be construed to affect 

12 the status of any employee of such Office as employees of 

13 an agency of the United States for purposes of any other 

14 provision of law before the effective date of the transfer of 

15 any such employee pursuant to section 303. 

16 (d) USE OF PROPERTY AND SERVICES.— 

17 (1) PROPERTY.—The Director of the Federal 

18 Housing Finance Agency may use the property of the 

19 Office of Federal Housing Enterprise Oversight to 

20 perform functions which have been transferred to the 

21 Director of the Federal Housing Finance Agency for 

22 such time as is reasonable to facilitate the orderly 

23 transfer of functions transferred pursuant to any 

24 other provision of this Act or any amendment made 

25 by this Act to any other provision of law. 
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1 (2) AGENCY SERVICES.—Any agency, depart2 ment, or other instrumentality of the United States, 

3 and any successor to any such agency, department, or 

4 instrumentality, which was providing supporting 

5 services to the Office of Federal Housing Enterprise 

6 Oversight before the expiration of the period under 

7 subsection (a) in connection with functions that are 

8 transferred to the Director of the Federal Housing Fi9 nance Agency shall— 

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

11 reimbursable basis, until the transfer of such 

12 functions is complete; and 

13 (B) consult with any such agency to coordi14 nate and facilitate a prompt and reasonable 

15 transition. 

16 (e) SAVINGS PROVISIONS.— 

17 (1) EXISTING RIGHTS, DUTIES, AND OBLIGA18 TIONS NOT AFFECTED.—Subsection (a) shall not affect 

19 the validity of any right, duty, or obligation of the 

20 United States, the Director of the Office of Federal 

21 Housing Enterprise Oversight, or any other person, 

22 which— 

23 (A) arises under or pursuant to the title 

24 XIII of the Housing and Community Develop25 ment Act of 1992, the Federal National Mortgage 
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1 Association Charter Act, the Federal Home Loan 

2 Mortgage Corporation Act, or any other provi3 sion of law applicable with respect to such Of4 fice; and 

5 (B) existed on the day before the abolish6 ment under subsection (a) of this section. 

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

8 other proceeding commenced by or against the Direc9 tor of the Office of Federal Housing Enterprise Over10 sight in connection with functions that are trans11 ferred to the Director of the Federal Housing Finance 

12 Agency shall abate by reason of the enactment of this 

13 Act, except that the Director of the Federal Housing 

14 Finance Agency shall be substituted for the Director 

15 of the Office of Federal Housing Enterprise Oversight 

16 as a party to any such action or proceeding. 

17 SEC. 302. CONTINUATION AND COORDINATION OF CERTAIN 

18 REGULATIONS. 

19 All regulations, orders, determinations, and resolutions 

20 that— 

21 (1) were issued, made, prescribed, or allowed to 

22 become effective by— 

23 (A) the Office of Federal Housing Enter24 prise Oversight; or 
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1 (B) a court of competent jurisdiction and 

2 that relate to functions transferred by this sub3 title; and 

4 (2) are in effect on the date of the abolishment 

5 under section 301(a) of this Act, shall remain in effect 

6 according to the terms of such regulations, orders, de7 terminations, and resolutions, and shall be enforceable 

8 by or against the Director of the Federal Housing Fi9 nance Agency until modified, terminated, set aside, or 

10 superseded in accordance with applicable law by such 

11 Director, as the case may be, any court of competent 

12 jurisdiction, or operation of law. 

13 SEC. 303. TRANSFER AND RIGHTS OF EMPLOYEES OF 

14 OFHEO. 

15 (a) TRANSFER.—Each employee of the Office of Fed16 eral Housing Enterprise Oversight shall be transferred to 

17 the Federal Housing Finance Agency for employment no 

18 later than the date of the abolishment under section 301(a) 

19 of this Act and such transfer shall be deemed a transfer 

20 of function for purposes of section 3503 of title 5, United 

21 States Code. 

22 (b) GUARANTEED POSITIONS.—Each employee trans23 ferred under subsection (a) shall be guaranteed a position 

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

25 on the day immediately preceding the transfer. Each such 
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1 employee holding a permanent position shall not be invol2 untarily separated or reduced in grade or compensation for 

3 12 months after the date of transfer, except for cause or, 

4 if the employee is a temporary employee, separated in ac5 cordance with the terms of the appointment. 

6 (c) APPOINTMENT AUTHORITY FOR EXCEPTED SERV7 ICE EMPLOYEES.— 

8 (1) IN GENERAL.—In the case of employees occu9 pying positions in the excepted service, any appoint10 ment authority established pursuant to law or regula11 tions of the Office of Personnel Management for filling 

12 such positions shall be transferred, subject to para13 graph (2). 

14 (2) DECLINE OF TRANSFER.—The Director of the 

15 Federal Housing Finance Agency may decline a 

16 transfer of authority under paragraph (1) (and the 

17 employees appointed pursuant thereto) to the extent 

18 that such authority relates to positions excepted from 

19 the competitive service because of their confidential, 

20 policy-making, policy-determining, or policy-advo21 cating character. 

22 (d) REORGANIZATION.—If the Director of the Federal 

23 Housing Finance Agency determines, after the end of the 

24 1-year period beginning on the date of the abolishment 

25 under section 201(a), that a reorganization of the combined 
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1 work force is required, that reorganization shall be deemed 

2 a major reorganization for purposes of affording affected 

3 employees retirement under section 8336(d)(2) or 

4 8414(b)(1)(B) of title 5, United States Code. 

5 (e) EMPLOYEE BENEFIT PROGRAMS.—Any employee 

6 of the Office of Federal Housing Enterprise Oversight ac7 cepting employment with the Director of the Federal Hous8 ing Finance Agency as a result of a transfer under sub9 section (a) may retain for 12 months after the date such 

10 transfer occurs membership in any employee benefit pro11 gram of the Federal Housing Finance Agency or the Office 

12 of Federal Housing Enterprise Oversight, as applicable, in13 cluding insurance, to which such employee belongs on the 

14 date of the abolishment under section 201(a) if— 

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

16 benefit or membership in the program; and 

17 (2) the benefit or program is continued by the 

18 Director of the Federal Housing Finance Agency; 

19 The difference in the costs between the benefits which would 

20 have been provided by such agency and those provided by 

21 this section shall be paid by the Director of the Federal 

22 Housing Finance Agency. If any employee elects to give up 

23 membership in a health insurance program or the health 

24 insurance program is not continued by such Director, the 

25 employee shall be permitted to select an alternate Federal 
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1 health insurance program within 30 days of such election 

2 or notice, without regard to any other regularly scheduled 

3 open season. 

4 SEC. 304. TRANSFER OF PROPERTY AND FACILITIES. 

5 Upon the abolishment under section 301(a), all prop6 erty of the Office of Federal Housing Enterprise Oversight 

7 shall transfer to the Director of the Federal Housing Fi8 nance Agency. 

9 Subtitle B—Federal Housing 

10 Finance Board 

11 SEC. 321. ABOLISHMENT OF THE FEDERAL HOUSING FI12 NANCE BOARD. 

13 (a) IN GENERAL.—Effective at the end of the 1-year 

14 period beginning on the date of enactment of this Act, the 

15 Federal Housing Finance Board (in this title referred to 

16 as the ‘‘Board’’) is abolished. 

17 (b) DISPOSITION OF AFFAIRS.—During the 1-year pe18 riod beginning on the date of enactment of this Act, the 

19 Board, solely for the purpose of winding up the affairs of 

20 the Board— 

21 (1) shall manage the employees of such Board 

22 and provide for the payment of the compensation and 

23 benefits of any such employee which accrue before the 

24 effective date of the transfer of such employee under 

25 section 323; and 
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1 (2) may take any other action necessary for the 

2 purpose of winding up the affairs of the Board. 

3 (c) STATUS OF EMPLOYEES BEFORE TRANSFER.—The 

4 amendments made by titles I and II and the abolishment 

5 of the Board under subsection (a) may not be construed to 

6 affect the status of any employee of such Board as employees 

7 of an agency of the United States for purposes of any other 

8 provision of law before the effective date of the transfer of 

9 any such employee under section 323. 

10 (d) USE OF PROPERTY AND SERVICES.— 

11 (1) PROPERTY.—The Director of the Federal 

12 Housing Finance Agency may use the property of the 

13 Board to perform functions which have been trans14 ferred to the Director of the Federal Housing Finance 

15 Agency for such time as is reasonable to facilitate the 

16 orderly transfer of functions transferred under any 

17 other provision of this Act or any amendment made 

18 by this Act to any other provision of law. 

19 (2) AGENCY SERVICES.—Any agency, depart20 ment, or other instrumentality of the United States, 

21 and any successor to any such agency, department, or 

22 instrumentality, which was providing supporting 

23 services to the Board before the expiration of the 1- 

24 year period under subsection (a) in connection with 
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1 functions that are transferred to the Director of the 

2 Federal Housing Finance Agency shall— 

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

4 reimbursable basis, until the transfer of such 

5 functions is complete; and 

6 (B) consult with any such agency to coordi7 nate and facilitate a prompt and reasonable 

8 transition. 

9 (e) SAVINGS PROVISIONS.— 

10 (1) EXISTING RIGHTS, DUTIES, AND OBLIGA11 TIONS NOT AFFECTED.—Subsection (a) shall not affect 

12 the validity of any right, duty, or obligation of the 

13 United States, a member of the Board, or any other 

14 person, which— 

15 (A) arises under the Federal Home Loan 

16 Bank Act or any other provision of law applica17 ble with respect to such Board; and 

18 (B) existed on the day before the effective 

19 date of the abolishment under subsection (a). 

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

21 other proceeding commenced by or against the Board 

22 in connection with functions that are transferred to 

23 the Director of the Federal Housing Finance Agency 

24 shall abate by reason of the enactment of this Act, ex25 cept that the Director of the Federal Housing Finance 
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1 Agency shall be substituted for the Board or any 

2 member thereof as a party to any such action or pro3 ceeding. 

4 SEC. 322. CONTINUATION AND COORDINATION OF CERTAIN 

5 REGULATIONS. 

6 (a) IN GENERAL.—All regulations, orders, and deter7 minations described under subsection (b) shall remain in 

8 effect according to the terms of such regulations, orders, de9 terminations, and resolutions, and shall be enforceable by 

10 or against the Director of the Federal Housing Finance 

11 Agency until modified, terminated, set aside, or superseded 

12 in accordance with applicable law by such Director, any 

13 court of competent jurisdiction, or operation of law. 

14 (b) APPLICABILITY.—A regulation, order, or deter15 mination is described under this subsection if it— 

16 (1) was issued, made, prescribed, or allowed to 

17 become effective by— 

18 (A) the Board; or 

19 (B) a court of competent jurisdiction and 

20 relates to functions transferred by this subtitle; 

21 and 

22 (2) is in effect on the effective date of the abolish23 ment under section 321(a). 
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1 SEC. 323. TRANSFER AND RIGHTS OF EMPLOYEES OF THE 

2 FEDERAL HOUSING FINANCE BOARD. 

3 (a) TRANSFER.—Each employee of the Board shall be 

4 transferred to the Federal Housing Finance Agency for em5 ployment not later than the effective date of the abolishment 

6 under section 321(a), and such transfer shall be deemed a 

7 transfer of function for purposes of section 3503 of title 5, 

8 United States Code. 

9 (b) GUARANTEED POSITIONS.—Each employee trans10 ferred under subsection (a) shall be guaranteed a position 

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

12 on the day immediately preceding the transfer. Each such 

13 employee holding a permanent position shall not be invol14 untarily separated or reduced in grade or compensation for 

15 12 months after the date of transfer, except for cause or, 

16 if the employee is a temporary employee, separated in ac17 cordance with the terms of the appointment. 

18 (c) APPOINTMENT AUTHORITY FOR EXCEPTED AND

19 SENIOR EXECUTIVE SERVICE EMPLOYEES.— 

20 (1) IN GENERAL.—In the case of employees occu21 pying positions in the excepted service or the Senior 

22 Executive Service, any appointment authority estab23 lished under law or by regulations of the Office of 

24 Personnel Management for filling such positions shall 

25 be transferred, subject to paragraph (2). 
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1 (2) DECLINE OF TRANSFER.—The Director of the 

2 Federal Housing Finance Agency may decline a 

3 transfer of authority under paragraph (1) to the ex4 tent that such authority relates to positions excepted 

5 from the competitive service because of their confiden6 tial, policymaking, policy-determining, or policy-ad7 vocating character, and noncareer positions in the 

8 Senior Executive Service (within the meaning of sec9 tion 3132(a)(7) of title 5, United States Code). 

10 (d) REORGANIZATION.—If the Director of the Federal 

11 Housing Finance Agency determines, after the end of the 

12 1-year period beginning on the effective date of the abolish13 ment under section 321(a), that a reorganization of the 

14 combined workforce is required, that reorganization shall 

15 be deemed a major reorganization for purposes of affording 

16 affected employees retirement under section 8336(d)(2) or 

17 8414(b)(1)(B) of title 5, United States Code. 

18 (e) EMPLOYEE BENEFIT PROGRAMS.— 

19 (1) IN GENERAL.—Any employee of the Board 

20 accepting employment with the Federal Housing Fi21 nance Agency as a result of a transfer under sub22 section (a) may retain for 12 months after the date 

23 on which such transfer occurs membership in any em24 ployee benefit program of the Federal Housing Fi25 nance Agency or the Board, as applicable, including 
310 

•HR 1461 RH 

1 insurance, to which such employee belongs on the ef2 fective date of the abolishment under section 321(a) 

3 if— 

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

5 the benefit or membership in the program; and 

6 (B) the benefit or program is continued by 

7 the Director of the Federal Housing Finance 

8 Agency. 

9 (2) COST DIFFERENTIAL.—The difference in the 

10 costs between the benefits which would have been pro11 vided by the Board and those provided by this section 

12 shall be paid by the Director of the Federal Housing 

13 Finance Agency. If any employee elects to give up 

14 membership in a health insurance program or the 

15 health insurance program is not continued by such 

16 Director, the employee shall be permitted to select an 

17 alternate Federal health insurance program within 30 

18 days after such election or notice, without regard to 

19 any other regularly scheduled open season. 

20 SEC. 324. TRANSFER OF PROPERTY AND FACILITIES. 

21 Upon the effective date of the abolishment under sec22 tion 321(a), all property of the Board shall transfer to the 

23 Director of the Federal Housing Finance Agency. 
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1 Subtitle C—Department of Housing 

2 and Urban Development 

3 SEC. 341. TERMINATION OF ENTERPRISE-RELATED FUNC4 TIONS. 

5 (a) TERMINATION DATE.—For purposes of this sub6 title, the term ‘‘termination date’’ means the date that oc7 curs one year after the date of the enactment of this Act. 

8 (b) DETERMINATION OF TRANSFERRED FUNCTIONS

9 AND EMPLOYEES.— 

10 (1) IN GENERAL.—Not later than the expiration 

11 of the 6-month period beginning on the date of the en12 actment of this Act, the Secretary, in consultation 

13 with the Director of the Office of Federal Housing 

14 Enterprise Oversight, shall determine— 

15 (A) the functions, duties, and activities of 

16 the Secretary of Housing and Urban Develop17 ment regarding oversight or regulation of the en18 terprises under or pursuant to the authorizing 

19 statutes, title XIII of the Housing and Commu20 nity Development Act of 1992, and any other 

21 provisions of law, as in effect before the date of 

22 the enactment of this Act, but not including any 

23 such functions, duties, and activities of the Di24 rector of the Office of Federal Housing Enter-
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1 prise Oversight of the Department of Housing 

2 and Urban Development and such Office; and 

3 (B) the employees of the Department of 

4 Housing and Urban Development necessary to 

5 perform such functions, duties, and activities. 

6 (2) ENTERPRISE-RELATED FUNCTIONS.—For 

7 purposes of this subtitle, the term ‘‘enterprise-related 

8 functions of the Department’’ means the functions, 

9 duties, and activities of the Department of Housing 

10 and Urban Development determined under paragraph 

11 (1)(A). 

12 (3) ENTERPRISE-RELATED EMPLOYEES.—For 

13 purposes of this subtitle, the term ‘‘enterprise-related 

14 employees of the Department’’ means the employees of 

15 the Department of Housing and Urban Development 

16 determined under paragraph (1)(B). 

17 (c) DISPOSITION OF AFFAIRS.—During the 1-year pe18 riod beginning on the date of enactment of this Act, the 

19 Secretary of Housing and Urban Development (in this title 

20 referred to as the ‘‘Secretary’’), solely for the purpose of 

21 winding up the affairs of the Secretary regarding the enter22 prise-related functions of the Department of Housing and 

23 Urban Development (in this title referred to as the ‘‘Depart24 ment)’’ — 
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1 (1) shall manage the enterprise-related employees 

2 of the Department and provide for the payment of the 

3 compensation and benefits of any such employee 

4 which accrue before the effective date of the transfer 

5 of any such employee under section 343; and 

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

7 purpose of winding up the enterprise-related functions 

8 of the Department. 

9 (d) STATUS OF EMPLOYEES BEFORE TRANSFER.—The 

10 amendments made by titles I and II and the termination 

11 of the enterprise-related functions of the Department under 

12 subsection (b) may not be construed to affect the status of 

13 any employee of the Department as employees of an agency 

14 of the United States for purposes of any other provision 

15 of law before the effective date of the transfer of any such 

16 employee under section 343. 

17 (e) USE OF PROPERTY AND SERVICES.— 

18 (1) PROPERTY.—The Director of the Federal 

19 Housing Finance Agency may use the property of the 

20 Secretary to perform functions which have been trans21 ferred to the Director of the Federal Housing Finance 

22 Agency for such time as is reasonable to facilitate the 

23 orderly transfer of functions transferred under any 

24 other provision of this Act or any amendment made 

25 by this Act to any other provision of law. 
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•HR 1461 RH 

1 (2) AGENCY SERVICES.—Any agency, depart2 ment, or other instrumentality of the United States, 

3 and any successor to any such agency, department, or 

4 instrumentality, which was providing supporting 

5 services to the Secretary regarding enterprise-related 

6 functions of the Department before the termination 

7 date under subsection (a) in connection with such 

8 functions that are transferred to the Director of the 

9 Federal Housing Finance Agency shall— 

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

11 reimbursable basis, until the transfer of such 

12 functions is complete; and 

13 (B) consult with any such agency to coordi14 nate and facilitate a prompt and reasonable 

15 transition. 

16 (f) SAVINGS PROVISIONS.— 

17 (1) EXISTING RIGHTS, DUTIES, AND OBLIGA18 TIONS NOT AFFECTED.—Subsection (a) shall not affect 

19 the validity of any right, duty, or obligation of the 

20 United States, the Secretary, or any other person, 

21 which— 

22 (A) arises under the authorizing statutes, 

23 title XIII of the Housing and Community Devel24 opment Act of 1992, or any other provision of 

25 law applicable with respect to the Secretary, in 
315 

•HR 1461 RH 

1 connection with the enterprise-related functions 

2 of the Department; and 

3 (B) existed on the day before the termi4 nation date under subsection (a). 

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

6 other proceeding commenced by or against the Sec7 retary in connection with the enterprise-related func8 tions of the Department shall abate by reason of the 

9 enactment of this Act, except that the Director of the 

10 Federal Housing Finance Agency shall be substituted 

11 for the Secretary or any member thereof as a party 

12 to any such action or proceeding. 

13 SEC. 342. CONTINUATION AND COORDINATION OF CERTAIN 

14 REGULATIONS. 

15 (a) IN GENERAL.—All regulations, orders, and deter16 minations described in subsection (b) shall remain in effect 

17 according to the terms of such regulations, orders, deter18 minations, and resolutions, and shall be enforceable by or 

19 against the Director of the Federal Housing Finance Agen20 cy until modified, terminated, set aside, or superseded in 

21 accordance with applicable law by such Director, any court 

22 of competent jurisdiction, or operation of law. 

23 (b) APPLICABILITY.—A regulation, order, or deter24 mination is described under this subsection if it— 
316 

•HR 1461 RH 

1 (1) was issued, made, prescribed, or allowed to 

2 become effective by— 

3 (A) the Secretary; or 

4 (B) a court of competent jurisdiction and 

5 that relate to the enterprise-related functions of 

6 the Department; and 

7 (2) is in effect on the termination date under 

8 section 341(a). 

9 SEC. 343. TRANSFER AND RIGHTS OF EMPLOYEES. 

10 (a) TRANSFER.— 

11 (1) IN GENERAL.—Except as provided in para12 graph (2), each enterprise-related employee of the De13 partment shall be transferred to the Federal Housing 

14 Finance Agency for employment not later than the 

15 termination date under section 341(a) and such 

16 transfer shall be deemed a transfer of function for 

17 purposes of section 3503 of title 5, United States 

18 Code. 

19 (2) AUTHORITY TO DECLINE.—An enterprise-re20 lated employee of the Department may, in the discre21 tion of the employee, decline transfer under para22 graph (1) to a position in the Federal Housing Fi23 nance Agency and shall be guaranteed a position in 

24 the Department with the same status, tenure, grade, 

25 and pay as that held on the day immediately pre-
317 

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1 ceding the date that such declination was made. Each 

2 such employee holding a permanent position shall not 

3 be involuntarily separated or reduced in grade or 

4 compensation for 12 months after the date that the 

5 transfer would otherwise have occurred, except for 

6 cause or, if the employee is a temporary employee, 

7 separated in accordance with the terms of the ap8 pointment. 

9 (b) GUARANTEED POSITIONS.—Each enterprise-related 

10 employee of the Department transferred under subsection 

11 (a) shall be guaranteed a position with the same status, 

12 tenure, grade, and pay as that held on the day immediately 

13 preceding the transfer. Each such employee holding a per14 manent position shall not be involuntarily separated or re15 duced in grade or compensation for 12 months after the date 

16 of transfer, except for cause or, if the employee is a tem17 porary employee, separated in accordance with the terms 

18 of the appointment. 

19 (c) APPOINTMENT AUTHORITY FOR EXCEPTED AND

20 SENIOR EXECUTIVE SERVICE EMPLOYEES.— 

21 (1) IN GENERAL.—In the case of employees occu22 pying positions in the excepted service or the Senior 

23 Executive Service, any appointment authority estab24 lished under law or by regulations of the Office of 
318 

•HR 1461 RH 

1 Personnel Management for filling such positions shall 

2 be transferred, subject to paragraph (2). 

3 (2) DECLINE OF TRANSFER.—The Director of the 

4 Federal Housing Finance Agency may decline a 

5 transfer of authority under paragraph (1) to the ex6 tent that such authority relates to positions excepted 

7 from the competitive service because of their confiden8 tial, policymaking, policy-determining, or policy-ad9 vocating character, and noncareer positions in the 

10 Senior Executive Service (within the meaning of sec11 tion 3132(a)(7) of title 5, United States Code). 

12 (d) REORGANIZATION.—If the Director of the Federal 

13 Housing Finance Agency determines, after the end of the 

14 1-year period beginning on the termination date under sec15 tion 341(a), that a reorganization of the combined work16 force is required, that reorganization shall be deemed a 

17 major reorganization for purposes of affording affected em18 ployees retirement under section 8336(d)(2) or 

19 8414(b)(1)(B) of title 5, United States Code. 

20 (e) EMPLOYEE BENEFIT PROGRAMS.— 

21 (1) IN GENERAL.—Any enterprise-related em22 ployee of the Department accepting employment with 

23 the Federal Housing Finance Agency as a result of a 

24 transfer under subsection (a) may retain for 12 

25 months after the date on which such transfer occurs 
319 

•HR 1461 RH 

1 membership in any employee benefit program of the 

2 Federal Housing Finance Agency or the Department, 

3 as applicable, including insurance, to which such em4 ployee belongs on the termination date under section 

5 341(a) if— 

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

7 the benefit or membership in the program; and 

8 (B) the benefit or program is continued by 

9 the Director of the Federal Housing Finance 

10 Agency. 

11 (2) COST DIFFERENTIAL.—The difference in the 

12 costs between the benefits which would have been pro13 vided by the Department and those provided by this 

14 section shall be paid by the Director of the Federal 

15 Housing Finance Agency. If any employee elects to 

16 give up membership in a health insurance program 

17 or the health insurance program is not continued by 

18 such Director, the employee shall be permitted to se19 lect an alternate Federal health insurance program 

20 within 30 days after such election or notice, without 

21 regard to any other regularly scheduled open season. 

22 SEC. 344. TRANSFER OF APPROPRIATIONS, PROPERTY, AND 

23 FACILITIES. 

24 Upon the termination date under section 341(a), all 

25 assets, liabilities, contracts, property, records, and unex-
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1 pended balances of appropriations, authorizations, alloca2 tions, and other funds employed, held, used, arising from, 

3 available to, or to be made available to the Department in 

4 connection with enterprise-related functions of the Depart5 ment shall transfer to the Director of the Federal Housing 

6 Finance Agency. Unexpended funds transferred by this sec7 tion shall be used only for the purposes for which the funds 

8 were originally authorized and appropriated. 

Union Calendar No. 126 

109TH CONGRESS 

1ST SESSION H. R. 1461 

[Report No. 109–171, Part I] 

A BILL 

To reform the regulation of certain housing-related 

purposes. Government-sponsored enterprises, and for other 

SEPTEMBER 16, 2005 

Committee on the Judiciary discharged; committed to the 

Union and ordered to be printed Committee of the Whole House on the State of the