I 

111TH CONGRESS 

2D SESSION H. R. 4889 

To establish a term certain for the conservatorships of Fannie Mae and 

Freddie Mac, to provide conditions for continued operation of such enterprises, and to provide for the wind down of such operations and the 

dissolution of such enterprises. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 19, 2010 

Mr. HENSARLING (for himself, Mr. PENCE, Mr. PRICE of Georgia, Mr. 

FLAKE, Mr. MARCHANT, Mr. AKIN, Mr. BARTLETT, Mr. LATTA, Mr. 

PITTS, Mrs. SCHMIDT, Mr. GARRETT of New Jersey, Mr. OLSON, Mr. 

DUNCAN, Mr. PLATTS, and Mr. SMITH of Texas) introduced the following 

bill; which was referred to the Committee on Financial Services 

A BILL 

To establish a term certain for the conservatorships of 

Fannie Mae and Freddie Mac, to provide conditions for 

continued operation of such enterprises, and to provide 

for the wind down of such operations and the dissolution 

of such enterprises. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘GSE Bailout Elimi5 nation and Taxpayer Protection Act’’. 


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1 SEC. 2. DEFINITIONS. 

2 For purposes of this Act, the following definitions 

3 shall apply: 

4 (1) CHARTER.—The term ‘‘charter’’ means— 

5 (A) with respect to the Federal National 

6 Mortgage Association, the Federal National 

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

8 1716 et seq.); and 

9 (B) with respect to the Federal Home 

10 Loan Mortgage Corporation, the Federal Home 

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

12 1451 et seq.). 

13 (2) DIRECTOR.—The term ‘‘Director’’ means 

14 the Director of the Federal Housing Finance Agen15 cy. 

16 (3) ENTERPRISE.—The term ‘‘enterprise’’ 

17 means— 

18 (A) the Federal National Mortgage Asso19 ciation; and 

20 (B) the Federal Home Loan Mortgage 

21 Corporation. 

22 (4) GUARANTEE.—The term ‘‘guarantee’’ 

23 means, with respect to an enterprise, the credit sup24 port of the enterprise that is provided by the Fed25 eral Government through its charter as a govern26 ment-sponsored enterprise. 


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1 SEC. 3. TERMINATION OF CURRENT CONSERVATORSHIP. 

2 (a) IN GENERAL.—Upon the expiration of the period 

3 referred to in subsection (b), the Director of the Federal 

4 Housing Finance Agency shall determine, with respect to 

5 each enterprise, if the enterprise is financially viable at 

6 that time and— 

7 (1) if the Director determines that the enter8 prise is financially viable, immediately take all ac9 tions necessary to terminate the conservatorship for 

10 the enterprise that is in effect pursuant to section 

11 1367 of the Federal Housing Enterprises Financial 

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

13 4617); or 

14 (2) if the Director determines that the enter15 prise is not financially viable, immediately appoint 

16 the Federal Housing Finance Agency as receiver 

17 under section 1367 of the Federal Housing Enter18 prises Financial Safety and Soundness Act of 1992 

19 and carry out such receivership under the authority 

20 of such section. 

21 (b) TIMING.—The period referred to in this sub22 section is, with respect to an enterprise— 

23 (1) except as provided in paragraph (2), the 24- 

24 month beginning upon the date of the enactment of 

25 this Act; or 


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1 (2) if the Director determines before the expira2 tion of the period referred to in paragraph (1) that 

3 the financial markets would be adversely affected 

4 without the extension of such period under this 

5 paragraph with respect to that enterprise, and upon 

6 making such determination notifies the Congress in 

7 writing of such determination, the 30-month period 

8 beginning upon the date of the enactment of this 

9 Act. 

10 (c) FINANCIAL VIABILITY.—The Director may not 

11 determine that an enterprise is financially viable for pur12 poses of subsection (a) if the Director determines that any 

13 of the conditions for receivership set forth in paragraph 

14 (3) or (4) of section 1367(a) of the Federal Housing En15 terprises Financial Safety and Soundness Act of 1992 (12 

16 U.S.C. 4617(a)) exists at the time with respect to the en17 terprise. 

18 SEC. 4. LIMITATION OF ENTERPRISE AUTHORITY UPON 

19 EMERGENCE FROM CONSERVATORSHIP. 

20 (a) REVISED AUTHORITY.—Upon the expiration of 

21 the period referred to in section 3(b), if the Director 

22 makes the determination under section 3(a)(1), the fol23 lowing provisions shall take effect: 

24 (1) REPEAL OF HOUSING GOALS.— 


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1 (A) REPEAL.—The Federal Housing En2 terprises Financial Safety and Soundness Act 

3 of 1992 is amended by striking sections 1331 

4 through 1336 (12 U.S.C. 4561–6). 

5 (B) CONFORMING AMENDMENTS.—Federal 

6 Housing Enterprises Financial Safety and 

7 Soundness Act of 1992 is amended— 

8 (i) in section 1303(28) (12 U.S.C. 

9 4502(28)), by striking ‘‘and, for the pur10 poses’’ and all that follows through ‘‘des11 ignated disaster areas’’; 

12 (ii) in section 1324(b)(1)(A) (12 

13 U.S.C. 4544(b)(1)(A))— 

14 (I) by striking clauses (i), (ii), 

15 and (iv); 

16 (II) in clause (iii), by inserting 

17 ‘‘and’’ after the semicolon at the end; 

18 and 

19 (III) by redesignating clauses 

20 (iii) and (v) as clauses (i) and (ii), re21 spectively; 

22 (iii) in section 1338(c)(10) (12 U.S.C. 

23 4568(c)(10)), by striking subparagraph 

24 (E); 


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1 (iv) in section 1339(h) (12 U.S.C. 

2 4569), by striking paragraph (7); 

3 (v) in section 1341 (12 U.S.C. 

4 4581)— 

5 (I) in subsection (a)— 

6 (aa) in paragraph (1), by in7 serting ‘‘or’’ after the semicolon 

8 at the end; 

9 (bb) in paragraph (2), by 

10 striking the semicolon at the end 

11 and inserting a period; and 

12 (cc) by striking paragraphs 

13 (3) and (4); and 

14 (II) in subsection (b)(2)— 

15 (aa) in subparagraph (A), 

16 by inserting ‘‘or’’ after the semi17 colon at the end; 

18 (bb) by striking subpara19 graphs (B) and (C); and 

20 (cc) by redesignating sub21 paragraph (D) as subparagraph 

22 (B); 

23 (vi) in section 1345(a) (12 U.S.C. 

24 4585(a))— 


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1 (I) in paragraph (1), by inserting 

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

3 (II) in paragraph (2), by striking 

4 the semicolon at the end and inserting 

5 a period; and 

6 (III) by striking paragraphs (3) 

7 and (4); and 

8 (vii) in section 1371(a)(2) (12 U.S.C. 

9 4631(a)(2))— 

10 (I) by striking ‘‘with any housing 

11 goal established under subpart B of 

12 part 2 of subtitle A of this title,’’; and 

13 (II) by striking ‘‘section 1336 

14 or’’. 

15 (2) PORTFOLIO LIMITATIONS.—Subtitle B of 

16 title XIII of the Housing and Community Develop17 ment Act of 1992 (12 U.S.C. 4611 et seq.) is 

18 amended by adding at the end the following new sec19 tion: 

20 ‘‘SEC. 1369E. RESTRICTION ON MORTGAGE ASSETS OF EN21 TERPRISES. 

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

23 any applicable date in this subsection or thereafter, mort24 gage assets in excess of— 


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1 ‘‘(1) upon the expiration of the period referred 

2 to in section 3(b) of the GSE Bailout Elimination 

3 and Taxpayer Protection Act or thereafter, 

4 $850,000,000,000; 

5 ‘‘(2) upon the expiration of the 1-year period 

6 that begins on the date described in paragraph (1) 

7 or thereafter, $700,000,000,000; 

8 ‘‘(3) upon the expiration of the 2-year period 

9 that begins on the date described in paragraph (1) 

10 or thereafter, $500,000,000,000; and 

11 ‘‘(4) upon the expiration of the 3-year period 

12 that begins on the date described in paragraph (1), 

13 $250,000,000,000. 

14 ‘‘(b) DEFINITION OF MORTGAGE ASSETS.—For pur15 poses of this section, the term ‘mortgage assets’ means, 

16 with respect to an enterprise, assets of such enterprise 

17 consisting of mortgages, mortgage loans, mortgage-related 

18 securities, participation certificates, mortgage-backed 

19 commercial paper, obligations of real estate mortgage in20 vestment conduits and similar assets, in each case to the 

21 extent such assets would appear on the balance sheet of 

22 such enterprise in accordance with generally accepted ac23 counting principles in effect in the United States as of 

24 September 7, 2008 (as set forth in the opinions and pro25 nouncements of the Accounting Principles Board and the 


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1 American Institute of Certified Public Accountants and 

2 statements and pronouncements of the Financial Account3 ing Standards Board from time to time; and without giv4 ing any effect to any change that may be made after Sep5 tember 7, 2008, in respect of Statement of Financial Ac6 counting Standards No. 140 or any similar accounting 

7 standard).’’. 

8 (3) INCREASE IN MINIMUM CAPITAL REQUIRE9 MENT.—Section 1362 of the Federal Housing En10 terprises Financial Safety and Soundness Act of 

11 1992 (12 U.S.C. 4612), as amended by section 1111 

12 of the Housing and Economic Recovery Act of 2008 

13 (Public Law 110–289), is amended— 

14 (A) in subsection (a), by striking ‘‘For 

15 purposes of this subtitle, the minimum capital 

16 level for each enterprise shall be’’ and inserting 

17 ‘‘The minimum capital level established under 

18 subsection (g) for each enterprise may not be 

19 lower than’’; 

20 (B) in subsection (c)— 

21 (i) by striking ‘‘subsections (a) and’’ 

22 and inserting ‘‘subsection’’; 

23 (ii) by striking ‘‘regulated entities’’ 

24 the first place such term appears and in25 serting ‘‘Federal Home Loan Banks’’; 


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1 (iii) by striking ‘‘for the enterprises,’’; 

2 (iv) by striking ‘‘, or for both the en3 terprises and the banks,’’; 

4 (v) by striking ‘‘the level specified in 

5 subsection (a) for the enterprises or’’; and 

6 (vi) by striking ‘‘the regulated entities 

7 operate’’ and inserting ‘‘such banks oper8 ate’’; 

9 (C) in subsection (d)(1)— 

10 (i) by striking ‘‘subsections (a) and’’ 

11 and inserting ‘‘subsection’’; and 

12 (ii) by striking ‘‘regulated entity’’ 

13 each place such term appears and inserting 

14 ‘‘Federal home loan bank’’; 

15 (D) in subsection (e), by striking ‘‘regu16 lated entity’’ each place such term appears and 

17 inserting ‘‘Federal home loan bank’’; 

18 (E) in subsection (f)— 

19 (i) by striking ‘‘the amount of core 

20 capital maintained by the enterprises,’’; 

21 and 

22 (ii) by striking ‘‘regulated entities’’ 

23 and inserting ‘‘banks’’; and 

24 (F) by adding at the end the following new 

25 subsection: 


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1 ‘‘(g) ESTABLISHMENT OF REVISED MINIMUM CAP2 ITAL LEVELS.— 

3 ‘‘(1) IN GENERAL.—The Director shall cause 

4 the enterprises to achieve and maintain adequate 

5 capital by establishing minimum levels of capital for 

6 such the enterprises and by using such other meth7 ods as the Director deems appropriate. 

8 ‘‘(2) AUTHORITY.—The Director shall have the 

9 authority to establish such minimum level of capital 

10 for an enterprise in excess of the level specified 

11 under subsection (a) as the Director, in the Direc12 tor’s discretion, deems to be necessary or appro13 priate in light of the particular circumstances of the 

14 enterprise. 

15 ‘‘(h) FAILURE TO MAINTAIN REVISED MINIMUM

16 CAPITAL LEVELS.— 

17 ‘‘(1) UNSAFE AND UNSOUND PRACTICE OR CON18 DITION.—Failure of a enterprise to maintain capital 

19 at or above its minimum level as established pursu20 ant to subsection (g) of this section may be deemed 

21 by the Director, in his discretion, to constitute an 

22 unsafe and unsound practice or condition within the 

23 meaning of this title. 

24 ‘‘(2) DIRECTIVE TO ACHIEVE CAPITAL

25 LEVEL.— 


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1 ‘‘(A) AUTHORITY.—In addition to, or in 

2 lieu of, any other action authorized by law, in3 cluding paragraph (1), the Director may issue 

4 a directive to an enterprise that fails to main5 tain capital at or above its required level as es6 tablished pursuant to subsection (g) of this sec7 tion. 

8 ‘‘(B) PLAN.—Such directive may require 

9 the enterprise to submit and adhere to a plan 

10 acceptable to the Director describing the means 

11 and timing by which the enterprise shall achieve 

12 its required capital level. 

13 ‘‘(C) ENFORCEMENT.—Any such directive 

14 issued pursuant to this paragraph, including 

15 plans submitted pursuant thereto, shall be en16 forceable under the provisions of subtitle C of 

17 this title to the same extent as an effective and 

18 outstanding order issued pursuant to subtitle C 

19 of this title which has become final. 

20 ‘‘(3) ADHERENCE TO PLAN.— 

21 ‘‘(A) CONSIDERATION.—The Director may 

22 consider such enterprise’s progress in adhering 

23 to any plan required under this subsection 

24 whenever such enterprise seeks the requisite ap25 proval of the Director for any proposal which 


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1 would divert earnings, diminish capital, or oth2 erwise impede such enterprise’s progress in 

3 achieving its minimum capital level. 

4 ‘‘(B) DENIAL.—The Director may deny 

5 such approval where it determines that such 

6 proposal would adversely affect the ability of 

7 the enterprise to comply with such plan.’’. 

8 (4) REPEAL OF INCREASES TO CONFORMING

9 LOAN LIMITS.— 

10 (A) REPEAL OF TEMPORARY INCREASES.— 

11 (i) CONTINUING APPROPRIATIONS

12 RESOLUTION, 2010.—Section 167 of the 

13 Continuing Appropriations Resolution, 

14 2010 (as added by section 104 of division 

15 B of Public Law 111–88; 123 Stat. 2973) 

16 is hereby repealed. 

17 (ii) AMERICAN RECOVERY AND REIN18 VESTMENT ACT OF 2009.—Section 1203 of 

19 division A of the American Recovery and 

20 Reinvestment Act of 2009 (Public Law 

21 111–5; 123 Stat. 225) is hereby repealed. 

22 (iii) ECONOMIC STIMULUS ACT OF

23 2008.—Section 201 of the Economic Stim24 ulus Act of 2008 (Public Law 110–185; 

25 122 Stat. 619) is hereby repealed. 


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1 (B) REPEAL OF GENERAL LIMIT AND PER2 MANENT HIGH-COST AREA INCREASE.—Para3 graph (2) of section 302(b) of the Federal Na4 tional Mortgage Association Charter Act (12 

5 U.S.C. 1717(b)(2)) and paragraph (2) of sec6 tion 305(a) of the Federal Home Loan Mort7 gage Corporation Act (12 U.S.C. 1454(a)(2)) 

8 are each amended to read as such sections were 

9 in effect immediately before the enactment of 

10 the Housing and Economic Recovery Act of 

11 2008 (Public Law 110–289). 

12 (C) REPEAL OF NEW HOUSING PRICE

13 INDEX.—Section 1322 of the Federal Housing 

14 Enterprises Financial Safety and Soundness 

15 Act of 1992, as added by section 1124(d) of the 

16 Housing and Economic Recovery Act of 2008 

17 (Public Law 110–289), is hereby repealed. 

18 (D) REPEAL.—Section 1124 of the Hous19 ing and Economic Recovery Act of 2008 (Public 

20 Law 110–289) is hereby repealed. 

21 (E) ESTABLISHMENT OF CONFORMING

22 LOAN LIMIT.—For the year in which the expira23 tion of the period referred to in section 3(b) of 

24 this section occurs, the limitations governing 

25 the maximum original principal obligation of 


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1 conventional mortgages that may be purchased 

2 by the Federal National Mortgage Association 

3 and the Federal Home Loan Mortgage Cor4 poration, referred to in section 302(b)(2) of the 

5 Federal National Mortgage Association Charter 

6 Act (12 U.S.C. 1717(b)(2)) and section 

7 305(a)(2) of the Federal Home Loan Mortgage 

8 Corporation Act (12 U.S.C. 1454(a)(2)), re9 spectively, shall be considered to be— 

10 (i) $417,000 for a mortgage secured 

11 by a single-family residence, 

12 (ii) $533,850 for a mortgage secured 

13 by a 2-family residence, 

14 (iii) $645,300 for a mortgage secured 

15 by a 3-family residence, and 

16 (iv) $801,950 for a mortgage secured 

17 by a 4-family residence, 

18 and such limits shall be adjusted effective each 

19 January 1 thereafter in accordance with such 

20 sections 302(b)(2) and 305(a)(2). 

21 (F) PROHIBITION OF PURCHASE OF MORT22 GAGES EXCEEDING MEDIAN AREA HOME

23 PRICE.— 

24 (i) FANNIE MAE.—Section 302(b)(2) 

25 of the Federal National Mortgage AssociaVerDate Nov 24 2008 03:33 Mar 20, 2010 Jkt 089200 PO 00000 Frm 00015 Fmt 6652 Sfmt 6201 E:\BILLS\H4889.IH H4889

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1 tion Charter Act (12 U.S.C. 1717(b)(2)) is 

2 amended by adding at the end the fol3 lowing new sentence: ‘‘Notwithstanding 

4 any other provision of this title, the cor5 poration may not purchase any mortgage 

6 for a property having a principal obligation 

7 that exceeds the median home price, for 

8 properties of the same size, for the area in 

9 which such property subject to the mort10 gage is located.’’. 

11 (ii) FREDDIE MAC.—Section 

12 305(a)(2) of the Federal Home Loan 

13 Mortgage Corporation Act (12 U.S.C. 

14 1454(a)(2)) is amended by adding at the 

15 end the following new sentence: ‘‘Notwith16 standing any other provision of this title, 

17 the Corporation may not purchase any 

18 mortgage for a property having a principal 

19 obligation that exceeds the median home 

20 price, for properties of the same size, for 

21 the area in which such property subject to 

22 the mortgage is located.’’. 

23 (5) REQUIREMENT OF MINIMUM DOWNPAYMENT

24 FOR MORTGAGES PURCHASED.— 


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1 (A) FANNIE MAE.—Subsection (b) of sec2 tion 302 of the Federal National Mortgage As3 sociation Charter Act (12 U.S.C. 1717(b)) is 

4 amended by adding at the end the following 

5 new paragraph: 

6 ‘‘(7) Notwithstanding any other provision of this Act, 

7 the corporation may not newly purchase any mortgage un8 less the mortgagor has paid, in cash or its equivalent on 

9 account of the property securing repayment such mort10 gage, in accordance with regulations issued by the Direc11 tor of the Federal Housing Finance Agency, not less 

12 than— 

13 ‘‘(A) for any mortgage purchased during the 

14 12-month period beginning upon the expiration of 

15 the period referred to in section 3(b) of the GSE 

16 Bailout Elimination and Taxpayer Protection Act, 5 

17 percent of the appraised value of the property; 

18 ‘‘(B) for any mortgage purchased during the 

19 12-month period beginning upon the expiration of 

20 the 12-month period referred to in subparagraph (A) 

21 of this paragraph, 7.5 percent of the appraised value 

22 of the property; and 

23 ‘‘(C) for any mortgage purchased during the 

24 12-month period beginning upon the expiration of 

25 the 12-month period referred to in subparagraph 


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1 (B) of this paragraph, 10 percent of the appraised 

2 value of the property.’’. 

3 (B) FREDDIE MAC.—Subsection (a) of sec4 tion 305 of the Federal Home Loan Mortgage 

5 Corporation Act (12 U.S.C. 1454(a)) is amend6 ed by adding at the end the following new para7 graph: 

8 ‘‘(6) Notwithstanding any other provision of this Act, 

9 the Corporation may not newly purchase any mortgage 

10 unless the mortgagor has paid, in cash or its equivalent 

11 on account of the property securing repayment such mort12 gage, in accordance with regulations issued by the Direc13 tor of the Federal Housing Finance Agency, not less 

14 than— 

15 ‘‘(A) for any mortgage purchased during the 

16 12-month period beginning upon the expiration of 

17 the period referred to in section 3(b) of the GSE 

18 Bailout Elimination and Taxpayer Protection Act, 5 

19 percent of the appraised value of the property; 

20 ‘‘(B) for any mortgage purchased during the 

21 12-month period beginning upon the expiration of 

22 the 12-month period referred to in subparagraph (A) 

23 of this paragraph, 7.5 percent of the appraised value 

24 of the property; and 


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1 ‘‘(C) for any mortgage purchased during the 

2 12-month period beginning upon the expiration of 

3 the 12-month period referred to in subparagraph 

4 (B) of this paragraph, 10 percent of the appraised 

5 value of the property.’’. 

6 (6) REQUIREMENT TO PAY STATE AND LOCAL

7 TAXES.— 

8 (A) FANNIE MAE.—Paragraph (2) of sec9 tion 309(c) of the Federal National Mortgage 

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

11 1723a(c)(2)) is amended— 

12 (i) by striking ‘‘shall be exempt from’’ 

13 and inserting ‘‘shall be subject to’’; and 

14 (ii) by striking ‘‘except that any’’ and 

15 inserting ‘‘and any’’. 

16 (B) FREDDIE MAC.—Section 303(e) of the 

17 Federal Home Loan Mortgage Corporation Act 

18 (12 U.S.C. 1452(e)) is amended— 

19 (i) by striking ‘‘shall be exempt from’’ 

20 and inserting ‘‘shall be subject to’’; and 

21 (ii) by striking ‘‘except that any’’ and 

22 inserting ‘‘and any’’. 

23 (7) REPEALS RELATING TO REGISTRATION OF

24 SECURITIES.— 

25 (A) FANNIE MAE.— 


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1 (i) MORTGAGE-BACKED SECURI2 TIES.—Section 304(d) of the Federal Na3 tional Mortgage Association Charter Act 

4 (12 U.S.C. 1719(d)) is amended by strik5 ing the fourth sentence. 

6 (ii) SUBORDINATE OBLIGATIONS.— 

7 Section 304(e) of the Federal National 

8 Mortgage Association Charter Act (12 

9 U.S.C. 1719(e)) is amended by striking the 

10 fourth sentence. 

11 (B) FREDDIE MAC.—Section 306 of the 

12 Federal Home Loan Mortgage Corporation Act 

13 (12 U.S.C. 1455) is amended by striking sub14 section (g). 

15 (8) RECOUPMENT OF COSTS FOR FEDERAL

16 GUARANTEE.— 

17 (A) ASSESSMENTS.—The Director of the 

18 Federal Housing Finance Agency shall establish 

19 and collect from each enterprise assessments in 

20 the amount determined under subparagraph 

21 (B). In determining the method and timing for 

22 making such assessments, the Director shall 

23 take into consideration the determinations and 

24 conclusions of the study under subsection (b) of 

25 this section. 


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1 (B) DETERMINATION OF COSTS OF GUAR2 ANTEE.—Assessments under subparagraph (A) 

3 with respect to an enterprise shall be in such 

4 amount as the Director determines necessary to 

5 recoup to the Federal Government the full value 

6 of the benefit the enterprise receives from the 

7 guarantee provided by the Federal Government 

8 for the obligations and financial viability of the 

9 enterprise, based upon the dollar value of such 

10 benefit in the market to such enterprise when 

11 not operating under conservatorship or receiver12 ship. To determine such amount, the Director 

13 shall establish a risk-based pricing mechanism 

14 as the Director considers appropriate, taking 

15 into consideration the determinations and con16 clusions of the study under subsection (b) of 

17 this section. 

18 (C) TREATMENT OF RECOUPED

19 AMOUNTS.—The Director shall cover into the 

20 general fund of the Treasury any amounts re21 ceived from assessments made under this para22 graph. 

23 (b) GAO STUDY REGARDING RECOUPMENT OF

24 COSTS FOR FEDERAL GOVERNMENT GUARANTEE.—The 

25 Comptroller General of the United States shall conduct 


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1 a study to determine a risk-based pricing mechanism to 

2 accurately determine the value of the benefit the enter3 prises receive from the guarantee provided by the Federal 

4 Government for the obligations and financial viability of 

5 the enterprises. Such study shall establish a dollar value 

6 of such benefit in the market to each enterprise when not 

7 operating under conservatorship or receivership, shall ana8 lyze various methods of the Federal Government assessing 

9 a charge for such value received (including methods involv10 ing an annual fee or a fee for each mortgage purchased 

11 or securitized), and shall make a recommendation of the 

12 best such method for assessing such charge. Not later 

13 than 12 months after the date of the enactment of this 

14 Act, the Comptroller General shall submit to the Congress 

15 a report setting forth the determinations and conclusions 

16 of such study. 

17 SEC. 5. REQUIRED WIND DOWN OF OPERATIONS AND DIS18 SOLUTION OF ENTERPRISE. 

19 (a) APPLICABILITY.—This section shall apply to an 

20 enterprise upon the expiration of the 3-year period re21 ferred to in section 3(b). 

22 (b) REPEAL OF CHARTER.—Upon the applicability of 

23 this section to an enterprise, the charter for the enterprise 

24 is repealed and the enterprise shall have no authority to 

25 conduct new business under such charter, except that the 


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1 provisions of such charter in effect immediately before 

2 such repeal shall continue to apply with respect to the 

3 rights and obligations of any holders of outstanding debt 

4 obligations and mortgage-backed securities of the enter5 prise. 

6 (c) WIND DOWN.—Upon the applicability of this sec7 tion to an enterprise, the Director and the Secretary of 

8 the Treasury shall jointly take such action, and may pre9 scribe such regulations and procedures, as may be nec10 essary to wind down the operations of an enterprise as 

11 an entity chartered by the United States Government over 

12 the duration of the 10-year period beginning upon the ap13 plicability of this section to the enterprise (pursuant to 

14 subsection (a)) in an orderly manner consistent with this 

15 Act and the ongoing obligations of the enterprise. 

16 (d) DIVISION OF ASSETS AND LIABILITIES; AUTHOR17 ITY TO ESTABLISH HOLDING CORPORATION AND DIS18 SOLUTION TRUST FUND.—The action and procedures re19 quired under subsection (c)— 

20 (1) shall include the establishment and execu21 tion of plans to provide for an equitable division and 

22 distribution of assets and liabilities of the enterprise, 

23 including any liability of the enterprise to the United 

24 States Government or a Federal reserve bank that 


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1 may continue after the end of the period described 

2 in subsection (ca); and 

3 (2) may provide for establishment of— 

4 (A) a holding corporation organized under 

5 the laws of any State of the United States or 

6 the District of Columbia for the purposes of the 

7 reorganization and restructuring of the enter8 prise; and 

9 (B) one or more trusts to which to trans10 fer— 

11 (i) remaining debt obligations of the 

12 enterprise, for the benefit of holders of 

13 such remaining obligations; or 

14 (ii) remaining mortgages held for the 

15 purpose of backing mortgage-backed secu16 rities, for the benefit of holders of such re17 maining securities. 

Æ 


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