II 

110TH CONGRESS 

1ST SESSION S. 1100 

To address the regulation of secondary mortgage market enterprises, and 

for other purposes. 

IN THE SENATE OF THE UNITED STATES 

APRIL 12, 2007 

Mr. HAGEL (for himself, Mr. SUNUNU, Mrs. DOLE, and Mr. MARTINEZ) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To address the regulation of secondary mortgage market 

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; TABLE OF CONTENTS. 

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

5 ‘‘Federal Housing Enterprise Regulatory Reform Act of 

6 2007’’. 

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

8 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Definitions. 

TITLE I—REFORM OF REGULATION OF ENTERPRISES 

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Subtitle A—Improvement of Safety and Soundness Supervision 

Sec. 101. Establishment of the Federal Housing Enterprise Regulatory Agency. 

Sec. 102. Duties and authorities of Director. 

Sec. 103. Federal Housing Enterprise Board. 

Sec. 104. Authority to require reports by regulated entities. 

Sec. 105. Examiners and accountants; authority to contract for reviews of regulated entities. 

Sec. 106. Assessments. 

Sec. 107. Regulations and orders. 

Sec. 108. Prudential management and operations standards. 

Sec. 109. Capital levels and holdings. 

Sec. 110. Risk-Based capital test for enterprises. 

Sec. 111. Registration of enterprise securities. 

Sec. 112. Limit on golden parachutes. 

Sec. 113. Reporting of fraudulent loans. 

Subtitle B—Improvement of Mission Supervision 

Sec. 121. Transfer of program approval and housing goal oversight. 

Sec. 122. Review of enterprise products. 

Sec. 123. Monitoring and enforcing compliance with housing goals. 

Sec. 124. Assumption by Director of other HUD responsibilities. 

Sec. 125. Administrative and judicial enforcement proceedings. 

Sec. 126. Conforming loan limits. 

Sec. 127. Reporting of mortgage data; housing goals. 

Sec. 128. Duty to serve underserved markets. 

Sec. 129. Home purchase goal. 

Subtitle C—Prompt Corrective Action 

Sec. 141. Critical capital levels. 

Sec. 142. Capital classifications. 

Sec. 143. Supervisory actions applicable to undercapitalized regulated entities. 

Sec. 144. Supervisory actions applicable to significantly undercapitalized regulated entities. 

Sec. 145. Authority over critically undercapitalized regulated entities. 

Subtitle D—Enforcement Actions 

Sec. 151. Cease-and-desist proceedings. 

Sec. 152. Temporary cease-and-desist proceedings. 

Sec. 153. Removal and prohibition authority. 

Sec. 154. Enforcement and jurisdiction. 

Sec. 155. Civil money penalties. 

Sec. 156. Criminal penalty. 

Sec. 157. Notice after separation from service. 

Sec. 158. Subpoena authority. 

Subtitle E—General Provisions 

Sec. 161. Conforming and technical amendments. 

Sec. 162. Presidentially appointed directors of enterprises. 

Sec. 163. Effective date. 

TITLE II—FEDERAL HOME LOAN BANKS 

Sec. 201. Directors. 

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Sec. 202. Definitions. 

Sec. 203. Agency oversight of Federal home loan banks. 

Sec. 204. Federal Home Loan Bank Finance Facility. 

Sec. 205. Exclusion from certain securities reporting requirements. 

Sec. 206. Mergers. 

Sec. 207. Authority to reduce districts. 

Sec. 208. Management of home loan banks. 

TITLE III—TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY OF OFHEO AND THE FEDERAL HOUSING FINANCE 

BOARD 

Subtitle A—OFHEO 

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. 311. Abolishment of the Federal Housing Finance Board. 

Sec. 312. Continuation and coordination of certain regulations. 

Sec. 313. Transfer and rights of employees of the Federal Housing Finance 

Board. 

Sec. 314. Transfer of property and facilities. 

TITLE IV—STUDIES AND REPORTS 

Sec. 401. Study and report on Basel II and enterprise debt. 

Sec. 402. Affordable housing audits. 

Sec. 403. Report on insured depository institution holdings of regulated entity 

debt and mortgage-backed securities. 

Sec. 404. Report on risk-based capital levels. 

Sec. 405. Report on resources and allocations. 

Sec. 406. Study and report on guarantee fees. 

Sec. 407. Report on conforming loan limits. 

Sec. 408. Reviews and studies relating to enterprises and related foundations. 

Sec. 409. Recommendations. 

1 SEC. 2. DEFINITIONS. 

2 (a) FEDERAL SAFETY AND SOUNDNESS ACT DEFINI3 TIONS.—Section 1303 of the Federal Housing Enterprises 

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

5 4502) is amended— 

6 (1) in each of paragraphs (8), (9), (10), and 

7 (19), by striking ‘‘Secretary’’ each place that term 

8 appears and inserting ‘‘Director’’; 

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1 (2) in paragraph (14), by striking ‘‘Office of 

2 Federal Housing Enterprise Oversight of the De3 partment of Housing and Urban Development’’ and 

4 inserting ‘‘Federal Housing Enterprise Regulatory 

5 Agency’’; 

6 (3) by redesignating paragraphs (16) through 

7 (19) as paragraphs (22) through (25), respectively; 

8 (4) by striking paragraph (15) and inserting 

9 the following: 

10 ‘‘(21) REGULATED ENTITY.—The term ‘regu11 lated entity’ means— 

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

14 ‘‘(B) the Federal Home Loan Mortgage 

15 Corporation and any affiliate thereof; and 

16 ‘‘(C) any Federal Home Loan Bank.’’; 

17 (5) by striking paragraph (13); 

18 (6) by redesignating paragraph (7) as para19 graph (13); 

20 (7) by redesignating paragraphs (11), (12), and 

21 (14) as paragraphs (18) through (20), respectively; 

22 (8) by striking paragraphs (8) through (10) 

23 and inserting the following: 

24 ‘‘(15) LOW-INCOME.—The term ‘low-income’ 

25 means a family income that is less than 50 percent 

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1 of the area median income, or a family income that 

2 is less than 50 percent of the area median income. 

3 ‘‘(16) MEDIAN INCOME.—The term ‘area me4 dian income’ means— 

5 ‘‘(A) the median family income for a met6 ropolitan statistical area (as designated under 

7 13 U.S.C. 421), if the family is located in a 

8 metropolitan statistical area; or 

9 ‘‘(B) the statewide nonmetropolitan me10 dian family income, if the family is located out11 side a metropolitan statistical area. 

12 ‘‘(17) MODERATE-INCOME.—The term ‘mod13 erate-income’ means an individual income that is at 

14 least 50 percent and less than 80 percent of the area 

15 median income, or a median family income that is 

16 at least 50 percent and not more than 80 percent 

17 of the area median income.’’; 

18 (9) in paragraph (5)— 

19 (A) by striking ‘‘(5)’’ and inserting ‘‘(9)’’; 

20 and 

21 (B) by striking ‘‘Office of Federal Housing 

22 Enterprise Oversight of the Department of 

23 Housing and Urban Development’’ and insert24 ing ‘‘Federal Housing Enterprise Regulatory 

25 Agency’’; 

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1 (10) by redesignating paragraph (6) as para2 graph (10); 

3 (11) by redesignating paragraphs (2) through 

4 (4) as paragraphs (5) through (7), respectively; 

5 (12) by inserting after paragraph (7), as redes6 ignated, the following: 

7 ‘‘(8) DEFAULT; IN DANGER OF DEFAULT.— 

8 ‘‘(A) DEFAULT.—The term ‘default’ 

9 means, with respect to a regulated entity, any 

10 adjudication or other official determination by 

11 any court of competent jurisdiction, or the 

12 Agency, pursuant to which a conservator, re13 ceiver, limited-life regulated entity, or legal cus14 todian is appointed for a regulated entity. 

15 ‘‘(B) IN DANGER OF DEFAULT.—The term 

16 ‘in danger of default’ means a regulated entity 

17 with respect to which— 

18 ‘‘(i) in the opinion of the Agency— 

19 ‘‘(I) the regulated entity is not 

20 likely to be able to pay the obligations 

21 of the regulated entity in the normal 

22 course of business; or 

23 ‘‘(II) the regulated entity has in24 curred or is likely to incur losses that 

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1 will deplete all or substantially all of 

2 its capital; and 

3 ‘‘(ii) there is no reasonable prospect 

4 that the capital of the regulated entity will 

5 be replenished.’’; 

6 (13) by inserting after paragraph (1) the fol7 lowing: 

8 ‘‘(2) AGENCY; DIRECTOR.—The term— 

9 ‘‘(A) ‘Agency’ means the Federal Housing 

10 Enterprise Regulatory Agency established under 

11 section 1311; and 

12 ‘‘(B) ‘Director’ means the Director of the 

13 Agency, appointed under section 1312; 

14 ‘‘(3) AUTHORIZING STATUTES.—The term ‘au15 thorizing statutes’ means— 

16 ‘‘(A) the Federal National Mortgage Asso17 ciation Charter Act; 

18 ‘‘(B) the Federal Home Loan Mortgage 

19 Corporation Act; and 

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

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

22 Federal Housing Enterprise Board established under 

23 section 1313A.’’; 

24 (14) by inserting after paragraph (10), as re25 designated, the following: 

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1 ‘‘(11) ENTITY-AFFILIATED PARTY.—The term 

2 ‘entity-affiliated party’ means— 

3 ‘‘(A) any director, officer, employee, or 

4 controlling stockholder of, or agent for, a regu5 lated entity; 

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

7 or joint venture partner of a regulated entity, 

8 and any other person, as determined by the Di9 rector (by regulation or on a case-by-case basis) 

10 that participates in the conduct of the affairs of 

11 a regulated entity, provided that a member of 

12 a Federal Home Loan Bank shall not be 

13 deemed to have participated in the affairs of 

14 that Bank solely by virtue of being a share15 holder of, and obtaining advances from, that 

16 Bank; 

17 ‘‘(C) any independent contractor for a reg18 ulated entity (including any attorney, appraiser, 

19 or accountant), if— 

20 ‘‘(i) the independent contractor know21 ingly or recklessly participates in— 

22 ‘‘(I) any violation of any law or 

23 regulation; 

24 ‘‘(II) any breach of fiduciary 

25 duty; or 

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1 ‘‘(III) any unsafe or unsound 

2 practice; and 

3 ‘‘(ii) such violation, breach, or prac4 tice caused, or is likely to cause, more than 

5 a minimal financial loss to, or a significant 

6 adverse effect on, the regulated entity; and 

7 ‘‘(D) any not-for-profit corporation that re8 ceives its principal funding, on an ongoing 

9 basis, from any regulated entity; and 

10 ‘‘(E) the Finance Facility. 

11 ‘‘(12) FINANCE FACILITY.—The term ‘Finance 

12 Facility’ means the Federal Home Loan Bank Fi13 nance Facility established under section 11A of the 

14 Federal Home Loan Bank Act. 

15 ‘‘(13) LIMITED-LIFE REGULATED ENTITY.— 

16 The term ‘limited-life regulated entity’ means an en17 tity established by the Agency under section 1367(i) 

18 with respect to a Federal Home Loan Bank in de19 fault or in danger of default or with respect to an 

20 enterprise in default or in danger of default.’’; 

21 (15) in paragraph (25), as so redesignated by 

22 this section, by striking ‘‘60’’ each place that term 

23 appears and inserting ‘‘30’’; and 

24 (16) by adding at the end the following: 

25 ‘‘(26) UPPER- AND MIDDLE-INCOME.— 

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1 ‘‘(A) UPPER-INCOME.—The term ‘upper2 income’ means a family income that is 120 per3 cent of the area median income or greater. 

4 ‘‘(B) MIDDLE-INCOME.—The term ‘middle5 income’ means a family income that is not less 

6 than 80 percent but less than 120 percent of 

7 the area median income, or a median family in8 come that is at least 80 percent and not more 

9 than 120 percent. 

10 ‘‘(27) VIOLATION.—The term ‘violation’ in11 cludes any action (alone or in combination with an12 other or others) for or toward causing, bringing 

13 about, participating in, counseling, or aiding or abet14 ting a violation.’’. 

15 (b) REFERENCES IN THIS ACT.—As used in this Act, 

16 unless otherwise specified— 

17 (1) the term ‘‘Agency’’ means the Federal 

18 Housing Enterprise Regulatory Agency; 

19 (2) the term ‘‘Director’’ means the Director of 

20 the Agency; and 

21 (3) the terms ‘‘enterprise’’, ‘‘Finance Facility’’, 

22 ‘‘regulated entity’’, and ‘‘authorizing statutes’’ have 

23 the same meanings as in section 1303 of the Federal 

24 Housing Enterprises Financial Safety and Sound25 ness Act of 1992, as amended by this Act. 

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1 TITLE I—REFORM OF 

2 REGULATION OF ENTERPRISES 

3 Subtitle A—Improvement of Safety 

4 and Soundness Supervision 

5 SEC. 101. ESTABLISHMENT OF THE FEDERAL HOUSING EN6 TERPRISE REGULATORY AGENCY. 

7 The Federal Housing Enterprises Financial Safety 

8 and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is 

9 amended by striking sections 1311 and 1312 and inserting 

10 the following: 

11 ‘‘SEC. 1311. ESTABLISHMENT OF THE FEDERAL HOUSING 

12 ENTERPRISE REGULATORY AGENCY. 

13 ‘‘(a) ESTABLISHMENT.—There is established the 

14 Federal Housing Enterprise Regulatory Agency, which 

15 shall be an independent agency of the Federal Govern16 ment. 

17 ‘‘(b) GENERAL SUPERVISORY AND REGULATORY AU18 THORITY.— 

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

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

21 supervision and regulation of the Agency. 

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

23 MAC, THE FEDERAL HOME LOAN BANKS, AND THE

24 FINANCE FACILITY.—The Director shall have gen25 eral regulatory authority over each regulated entity 

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1 and the Finance Facility, and shall exercise such 

2 general regulatory authority, including such duties 

3 and authorities set forth under section 1313, to en4 sure that the purposes of this Act, the authorizing 

5 statutes, and any other applicable law are carried 

6 out. 

7 ‘‘(c) SAVINGS PROVISION.—The authority of the Di8 rector to take actions under subtitles B and C shall not 

9 in any way limit the general supervisory and regulatory 

10 authority granted to the Director under subsection (b). 

11 ‘‘SEC. 1312. DIRECTOR. 

12 ‘‘(a) ESTABLISHMENT OF POSITION.—There is estab13 lished the position of the Director of the Agency, who shall 

14 be the head of the Agency. 

15 ‘‘(b) APPOINTMENT; TERM.— 

16 ‘‘(1) APPOINTMENT.—The Director shall be ap17 pointed by the President, by and with the advice and 

18 consent of the Senate, from among individuals who 

19 are citizens of the United States, have a dem20 onstrated understanding of financial management or 

21 oversight, and have a demonstrated understanding 

22 of capital markets, including the mortgage securities 

23 markets and housing finance. 

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1 ‘‘(2) TERM.—The Director shall be appointed 

2 for a term of 6 years, unless removed before the end 

3 of such term for cause by the President. 

4 ‘‘(3) VACANCY.—A vacancy in the position of 

5 Director that occurs before the expiration of the 

6 term for which a Director was appointed shall be 

7 filled in the manner established under paragraph 

8 (1), and the Director appointed to fill such vacancy 

9 shall be appointed only for the remainder of such 

10 term. 

11 ‘‘(4) SERVICE AFTER END OF TERM.—An indi12 vidual may serve as the Director after the expiration 

13 of the term for which appointed until a successor 

14 has been appointed. 

15 ‘‘(5) TRANSITIONAL PROVISION.—Notwith16 standing paragraphs (1) and (2), during the period 

17 beginning on the effective date of the Federal Hous18 ing Enterprise Regulatory Reform Act of 2007, and 

19 ending on the date on which the Director is ap20 pointed and confirmed, the person serving as the Di21 rector of the Office of Federal Housing Enterprise 

22 Oversight of the Department of Housing and Urban 

23 Development on that effective date shall act for all 

24 purposes as, and with the full powers of, the Direc25 tor. 

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1 ‘‘(c) DEPUTY DIRECTOR OF THE DIVISION OF EN2 TERPRISE REGULATION.— 

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

4 Deputy Director of the Division of Enterprise Regu5 lation, who shall be designated by the Director from 

6 among individuals who are citizens of the United 

7 States, have a demonstrated understanding of finan8 cial management or oversight, and have a dem9 onstrated understanding of mortgage securities mar10 kets and housing finance. 

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

12 Division of Enterprise Regulation shall have such 

13 functions, powers, and duties with respect to the 

14 oversight of the enterprises as the Director shall pre15 scribe. 

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 designated by 

21 the Director from among individuals who are citi22 zens of the United States, have a demonstrated un23 derstanding of financial management or oversight, 

24 and have a demonstrated understanding of the Fed25 eral Home Loan Bank System and housing finance. 

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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 

4 respect to the oversight of the Federal Home Loan 

5 Banks as the Director shall prescribe. 

6 ‘‘(e) DEPUTY DIRECTOR FOR HOUSING MISSION AND

7 GOALS.— 

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

9 Deputy Director for Housing Mission and Goals, 

10 who shall be designated by the Director from among 

11 individuals who are citizens of the United States, 

12 and have a demonstrated understanding of the hous13 ing markets and housing finance. 

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

15 Housing Mission and Goals shall have such func16 tions, powers, and duties with respect to the over17 sight of the housing mission and goals of the regu18 lated entities as the Director shall prescribe. 

19 ‘‘(f) ACTING DIRECTOR.—In the event of the death, 

20 resignation, sickness, or absence of the Director, the 

21 President shall designate either the Deputy Director of the 

22 Division of Enterprise Regulation, the Deputy Director of 

23 the Division of Federal Home Loan Bank Regulation, or 

24 the Deputy Director for Housing Mission and Goals, to 

25 serve as acting Director until the return of the Director, 

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1 or the appointment of a successor pursuant to subsection 

2 (b). 

3 ‘‘(g) LIMITATIONS.—The Director and each of the 

4 Deputy Directors may not— 

5 ‘‘(1) have any direct or indirect financial inter6 est in any regulated entity or entity-affiliated party; 

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

8 any regulated entity or entity-affiliated party; or 

9 ‘‘(3) have served as an executive officer or di10 rector of any regulated entity or entity-affiliated 

11 party at any time during the 3-year period preceding 

12 the date of appointment of such individual as Direc13 tor or Deputy Director.’’. 

14 SEC. 102. DUTIES AND AUTHORITIES OF DIRECTOR. 

15 (a) IN GENERAL.—Section 1313 of the Federal 

16 Housing Enterprises Financial Safety and Soundness Act 

17 of 1992 (12 U.S.C. 4513) is amended to read as follows: 

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

19 ‘‘(a) DUTIES.— 

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

21 of the Director shall be— 

22 ‘‘(A) to oversee the prudential operations 

23 of each regulated entity; and 

24 ‘‘(B) to ensure that— 

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1 ‘‘(i) each regulated entity operates in 

2 a safe and sound manner, including main3 tenance of adequate capital and internal 

4 controls; 

5 ‘‘(ii) the operations and activities of 

6 each regulated entity foster liquid, effi7 cient, competitive, and resilient national 

8 housing finance markets (including activi9 ties relating to mortgages on housing for 

10 low- and moderate-income families involv11 ing a reasonable economic return that may 

12 be less than the return earned on other ac13 tivities); 

14 ‘‘(iii) each regulated entity complies 

15 with this title and the rules, regulations, 

16 guidelines, and orders issued under this 

17 title and the authorizing statutes; 

18 ‘‘(iv) each regulated entity carries out 

19 its statutory mission only through activi20 ties that are authorized under and con21 sistent with this title and the authorizing 

22 statutes; 

23 ‘‘(v) the activities of each regulated 

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1 lated entity is operated are consistent with 

2 the public interest; 

3 ‘‘(vi) each regulated entity remains 

4 adequately capitalized, after due consider5 ation of the risk to such regulated entity; 

6 and 

7 ‘‘(vii) in the case of the Federal Home 

8 Loan Banks, they provide funds to com9 munity financial institutions for small 

10 businesses, small farms, and small agricul11 tural businesses and accept as collateral 

12 whole interests in such obligations. 

13 ‘‘(2) SCOPE OF AUTHORITY.—The authority of 

14 the Director shall include the authority— 

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

16 the principle duties described in paragraph (1), 

17 reject any acquisition or transfer of a control18 ling interest in a regulated entity; and 

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

20 may be necessary or appropriate to fulfill the 

21 duties and responsibilities of the Director in the 

22 supervision and regulation of each regulated en23 tity. 

24 ‘‘(b) DELEGATION OF AUTHORITY.—The Director 

25 may delegate to officers and employees of the Agency any 

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1 of the functions, powers, or duties of the Director, as the 

2 Director considers appropriate. 

3 ‘‘(c) LITIGATION AUTHORITY.— 

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

5 of this title, any regulation or order prescribed under 

6 this title, or any other provision of law, rule, regula7 tion, or order, or in any other action, suit, or pro8 ceeding to which the Director is a party or in which 

9 the Director is interested, and in the administration 

10 of conservatorships and receiverships, the Director 

11 may act in the Director’s own name and through the 

12 Director’s own attorneys. 

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

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

15 (other than suits on claims for money damages) by 

16 a regulated entity with respect to any matter under 

17 this title or any other applicable provision of law, 

18 rule, order, or regulation under this title, in the 

19 United States district court for the judicial district 

20 in which the regulated entity has its principle place 

21 of business, or in the United States District Court 

22 for the District of Columbia, and the Director may 

23 be served with process in the manner prescribed by 

24 the Federal Rules of Civil Procedure.’’. 

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1 (b) INDEPENDENCE IN CONGRESSIONAL TESTIMONY

2 AND RECOMMENDATIONS.—Section 111 of Public Law 

3 93–495 (12 U.S.C. 250) is amended by striking ‘‘the Fed4 eral Housing Finance Board’’ and inserting ‘‘the Director 

5 of the Federal Housing Enterprise Regulatory Agency’’. 

6 SEC. 103. FEDERAL HOUSING ENTERPRISE BOARD. 

7 (a) IN GENERAL.—The Federal Housing Enterprises 

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

9 4501 et seq.) is amended by inserting after section 1313 

10 the following: 

11 ‘‘SEC. 1313A. FEDERAL HOUSING ENTERPRISE BOARD. 

12 ‘‘(a) IN GENERAL.—There is established the Federal 

13 Housing Enterprise Board, which shall advise the Director 

14 with respect to overall strategies and policies in carrying 

15 out the duties of the Director under this title. 

16 ‘‘(b) LIMITATIONS.—The Board may not exercise any 

17 executive authority, and the Director may not delegate to 

18 the Board any of the functions, powers, or duties of the 

19 Director. 

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

21 of 4 members, of whom— 

22 ‘‘(1) 1 member shall be the Secretary of the 

23 Treasury; 

24 ‘‘(2) 1 member shall be the Secretary of Hous25 ing and Urban Development; 

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1 ‘‘(3) 1 member shall be the Chairman of the 

2 Securities and Exchange Commission; and 

3 ‘‘(4) 1 member shall be the Director, who shall 

4 serve as the Chairperson of the Board. 

5 ‘‘(d) MEETINGS.— 

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

7 notice by the Director, but in no event shall the 

8 Board meet less frequently than once every 3 

9 months. 

10 ‘‘(2) SPECIAL MEETINGS.—Either the Secretary 

11 of the Treasury, the Secretary of Housing and 

12 Urban Development, or the Chairman of the Securi13 ties and Exchange Commission may, upon giving 

14 written notice to the Director, require a special 

15 meeting of the Board. 

16 ‘‘(e) TESTIMONY.—On an annual basis, the Board 

17 shall testify before Congress regarding— 

18 ‘‘(1) the safety and soundness of the regulated 

19 entities; 

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

21 the operations of the regulated entities; 

22 ‘‘(3) the overall operational status of the regu23 lated entities; 

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1 ‘‘(4) an evaluation of the performance of the 

2 regulated entities in carrying out their respective 

3 missions; 

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

5 the Agency; and 

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

7 and its fulfillment of its mission, as the Board deter8 mines appropriate.’’. 

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

10 1319B(a) of the Federal Housing Enterprises Financial 

11 Safety and Soundness Act of 1992 (12 U.S.C. 4521(a)) 

12 is amended— 

13 (1) by striking ‘‘enterprise’’ each place that 

14 term appears and inserting ‘‘regulated entity’’; 

15 (2) by striking ‘‘enterprises’’ each place that 

16 term appears and inserting ‘‘regulated entities’’; 

17 (3) in paragraph (3), by striking ‘‘; and’’ and 

18 inserting a semicolon; 

19 (4) in paragraph (4), by striking ‘‘1994.’’ and 

20 inserting ‘‘1994; and’’; and 

21 (5) by adding at the end the following: 

22 ‘‘(5) the assessment of the Board or any of its 

23 members with respect to— 

24 ‘‘(A) the safety and soundness of the regu25 lated entities; 

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1 ‘‘(B) any material deficiencies in the con2 duct of the operations of the regulated entities; 

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

4 regulated entities; and 

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

6 the regulated entities in carrying out their re7 spective missions; 

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

9 the Agency; and 

10 ‘‘(7) such other matters relating to the Agency 

11 and the fulfillment of its mission.’’. 

12 SEC. 104. AUTHORITY TO REQUIRE REPORTS BY REGU13 LATED ENTITIES. 

14 (a) IN GENERAL.—Section 1314 of the Federal 

15 Housing Enterprises Financial Safety and Soundness Act 

16 of 1992 (12 U.S.C. 4514) is amended— 

17 (1) in the section heading, by striking ‘‘ENTER18 PRISES’’ and inserting ‘‘REGULATED ENTITIES’’; 

19 (2) by striking ‘‘an enterprise’’ each place that 

20 term appears and inserting ‘‘a regulated entity’’; 

21 (3) by striking ‘‘the enterprise’’ and inserting 

22 ‘‘the regulated entity’’; 

23 (4) in subsection (a)— 

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1 (A) by striking the subsection heading and 

2 all that follows through ‘‘and operations’’ in 

3 paragraph (1) and inserting the following: 

4 ‘‘(a) REGULAR AND SPECIAL REPORTS.— 

5 ‘‘(1) REGULAR REPORTS.—The Director may 

6 require, by general or specific orders, a regulated en7 tity to submit regular reports, including financial 

8 statements determined on a fair value basis, on the 

9 condition (including financial condition), manage10 ment, activities, or operations of the regulated enti11 ty, as the Director considers appropriate’’; and 

12 (B) in paragraph (2)— 

13 (i) by inserting ‘‘, by general or spe14 cific orders,’’ after ‘‘may also require’’; and 

15 (ii) by striking ‘‘whenever’’ and insert16 ing ‘‘on any of the topics specified in para17 graph (1) or any other relevant topics, if’’; 

18 and 

19 (5) by adding at the end the following: 

20 ‘‘(c) PENALTIES FOR FAILURE TO MAKE RE21 PORTS.— 

22 ‘‘(1) VIOLATIONS.—It shall be a violation of 

23 this section for any regulated entity— 

24 ‘‘(A) to fail to make, obtain, transmit, or 

25 publish any report or information required by 

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1 the Director under this section, section 309(k) 

2 of the Federal National Mortgage Association 

3 Charter Act, or section 307(c) of the Federal 

4 Home Loan Mortgage Corporation Act, within 

5 the period of time specified in such provision of 

6 law or otherwise by the Director; or 

7 ‘‘(B) to submit or publish any false or mis8 leading report or information under this sec9 tion. 

10 ‘‘(2) PENALTIES.— 

11 ‘‘(A) TIER 1.— 

12 ‘‘(i) IN GENERAL.—A violation de13 scribed in paragraph (1) shall be subject to 

14 a penalty of not more than $2,000 for each 

15 day during which such violation continues, 

16 in any case in which— 

17 ‘‘(I) the subject regulated entity 

18 maintains procedures reasonably 

19 adapted to avoid any inadvertent error 

20 and the violation was unintentional 

21 and a result of such an error; or 

22 ‘‘(II) the violation was an inad23 vertent transmittal or publication of 

24 any report which was minimally late. 

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1 ‘‘(ii) BURDEN OF PROOF.—For pur2 poses of this subparagraph, the regulated 

3 entity shall have the burden of proving 

4 that the error was inadvertent or that a re5 port was inadvertently transmitted or pub6 lished late. 

7 ‘‘(B) TIER 2.—A violation described in 

8 paragraph (1) shall be subject to a penalty of 

9 not more than $20,000 for each day during 

10 which such violation continues or such false or 

11 misleading information is not corrected, in any 

12 case that is not addressed in subparagraph (A) 

13 or (C). 

14 ‘‘(C) TIER 3.—A violation described in 

15 paragraph (1) shall be subject to a penalty of 

16 not more than $2,000,000 per day for each day 

17 during which such violation continues or such 

18 false or misleading information is not corrected, 

19 in any case in which the subject regulated enti20 ty committed such violation knowingly or with 

21 reckless disregard for the accuracy of any such 

22 information or report. 

23 ‘‘(3) ASSESSMENTS.—Any penalty imposed 

24 under this subsection shall be in lieu of a penalty 

25 under section 1376, but shall be assessed and colmmaher on PRODPC74 with BILLS

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1 lected by the Director in the manner provided in sec2 tion 1376 for penalties imposed under that section, 

3 and any such assessment (including the determina4 tion of the amount of the penalty) shall be otherwise 

5 subject to the provisions of section 1376. 

6 ‘‘(4) HEARING.—A regulated entity against 

7 which a penalty is assessed under this section shall 

8 be afforded an agency hearing if the regulated entity 

9 submits a request for a hearing not later than 20 

10 days after the date of the issuance of the notice of 

11 assessment. Section 1374 shall apply to any such 

12 proceedings.’’. 

13 (b) CONFORMING AMENDMENT.—The Federal Hous14 ing Enterprises Financial Safety and Soundness Act of 

15 1992 (12 U.S.C. 4501 et seq.) is amended by striking sec16 tions 1327 and 1328. 

17 SEC. 105. EXAMINERS AND ACCOUNTANTS; AUTHORITY TO 

18 CONTRACT FOR REVIEWS OF REGULATED EN19 TITIES. 

20 (a) IN GENERAL.—Section 1317 of the Federal 

21 Housing Enterprises Financial Safety and Soundness Act 

22 of 1992 (12 U.S.C. 4517) is amended— 

23 (1) in subsection (a), by striking ‘‘enterprise’’ 

24 each place that term appears and inserting ‘‘regu25 lated entity’’; 

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1 (2) in subsection (b), by striking ‘‘an enter2 prise’’ and inserting ‘‘a regulated entity’’; 

3 (3) in subsection (c), in the second sentence, by 

4 inserting before the period ‘‘to conduct examinations 

5 under this section’’; 

6 (4) by redesignating subsections (d) through (f) 

7 as subsections (e) through (g), respectively; and 

8 (5) by inserting after subsection (c) the fol9 lowing: 

10 ‘‘(d) INSPECTOR GENERAL.—There shall be within 

11 the Agency an Inspector General, who shall be appointed 

12 in accordance with section 3(a) of the Inspector General 

13 Act of 1978.’’. 

14 (b) DIRECT HIRE AUTHORITY TO HIRE ACCOUNT15 ANTS, ECONOMISTS, AND EXAMINERS.—Section 1317 of 

16 the Federal Housing Enterprises Financial Safety and 

17 Soundness Act of 1992 (12 U.S.C. 4517) is amended by 

18 adding at the end the following: 

19 ‘‘(h) APPOINTMENT OF ACCOUNTANTS, ECONOMISTS, 

20 AND EXAMINERS.— 

21 ‘‘(1) APPLICABILITY.—This section shall apply 

22 with respect to any position of examiner, accountant, 

23 economist, and specialist in financial markets and in 

24 technology at the Agency, with respect to supervision 

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1 and regulation of the regulated entities, that is in 

2 the competitive service. 

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

4 may appoint candidates to any position described in 

5 paragraph (1)— 

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

7 and regulations governing appointments in the 

8 excepted service; and 

9 ‘‘(B) notwithstanding any statutes, rules, 

10 and regulations governing appointments in the 

11 competitive service.’’. 

12 (c) AMENDMENTS TO INSPECTOR GENERAL ACT.— 

13 Section 11 of the Inspector General Act of 1978 (5 U.S.C. 

14 11 App.) is amended— 

15 (1) in paragraph (1), by inserting ‘‘, the Direc16 tor of the Federal Housing Enterprises Regulatory 

17 Agency’’ after ‘‘Social Security Administration’’; and 

18 (2) in paragraph (2), by inserting ‘‘, the Fed19 eral Housing Enterprises Regulatory Agency’’ after 

20 ‘‘Social Security Administration’’. 

21 (d) AUTHORITY TO CONTRACT FOR REVIEWS OF

22 REGULATED ENTITIES.—Section 1319 of the Federal 

23 Housing Enterprises Financial Safety and Soundness Act 

24 of 1992 (12 U.S.C. 4519) is amended in the section head25 ing, by striking ‘‘BY RATING ORGANIZATION’’. 

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1 SEC. 106. ASSESSMENTS. 

2 Section 1316 of the Federal Housing Enterprises Fi3 nancial Safety and Soundness Act of 1992 (12 U.S.C. 

4 4516) is amended— 

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

6 following: 

7 ‘‘(a) ANNUAL ASSESSMENTS.—The Director shall es8 tablish and collect from the regulated entities annual as9 sessments in an amount not exceeding the amount suffi10 cient to provide for reasonable costs and expenses of the 

11 Agency, including— 

12 ‘‘(1) the expenses of any examinations under 

13 section 1317; 

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

15 credit assessments under section 1319; and 

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

17 for any given fiscal year, as deemed necessary by the 

18 Director to maintain working capital.’’; 

19 (2) by striking ‘‘an enterprise’’ each place that 

20 term appears and inserting ‘‘a regulated entity’’; 

21 (3) by striking ‘‘enterprises’’ each place that 

22 term appears and inserting ‘‘regulated entities’’; 

23 (4) by striking ‘‘enterprise’’ each place that 

24 term appears, other than in subparagraph (B) of 

25 subsection (b)(3), and inserting ‘‘regulated entity’’; 

26 (5) in subsection (b)— 

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1 (A) in paragraph (1)— 

2 (i) by striking ‘‘bears to’’ and insert3 ing ‘‘bear to’’; and 

4 (ii) by striking ‘‘both’’ and inserting 

5 ‘‘all’’; and 

6 (B) in paragraph (3)(B)— 

7 (i) by inserting ‘‘with respect to an 

8 enterprise,’’ before ‘‘the unpaid principal’’; 

9 and 

10 (ii) by striking ‘‘by the enterprise’’ 

11 and inserting ‘‘by an enterprise’’; 

12 (6) in subsection (c)— 

13 (A) by striking ‘‘The semiannual’’ and in14 serting the following: 

15 ‘‘(1) IN GENERAL.—The semiannual’’; and 

16 (B) by adding at the end the following: 

17 ‘‘(2) ADJUSTMENTS.—The Director may adjust 

18 the amounts of any semiannual assessments for an 

19 assessment under subsection (a) that are to be paid 

20 pursuant to subsection (b) by a regulated entity, as 

21 the Director determines necessary to ensure that the 

22 costs of enforcement activities under subtitles B and 

23 C for a regulated entity are borne only by that regu24 lated entity. 

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1 ‘‘(3) SPECIAL CIRCUMSTANCES.—If at any 

2 time, as a result of increased costs of regulation of 

3 a regulated entity that is not classified (for purposes 

4 of subtitle B) as adequately capitalized, or as the re5 sult of supervisory or enforcement activities under 

6 subtitle B or C for a regulated entity, the amount 

7 available from any semiannual payment made by 

8 such regulated entity pursuant to subsection (b) is 

9 insufficient to cover the costs of the Agency with re10 spect to such entity, the Director may make and col11 lect from such entity an immediate assessment to 

12 cover the amount of such deficiency for the semi13 annual period. If, at the end of any semiannual pe14 riod during which such an assessment is made, any 

15 amount remains from such assessment, such remain16 ing amount shall be deducted from the assessment 

17 for such regulated entity for the following semi18 annual period.’’; 

19 (7) in subsection (d), by striking ‘‘If’’ and in20 serting ‘‘Except with respect to amounts collected 

21 pursuant to subsection (a)(3), if’’; 

22 (8) by striking subsections (e) and (f) and in23 serting the following: 

24 ‘‘(e) REMISSION OF ASSESSMENT.—At the end of 

25 each year for which an assessment under this section is 

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1 made, the Director shall remit to each regulated entity any 

2 amount of an assessment collected from the regulated en3 tity that is attributable to subsection (a)(3), and is in ex4 cess of the amount that the Director deems necessary to 

5 maintain working capital. 

6 ‘‘(f) NO APPROPRIATED FUNDS.—Salaries of the Di7 rector and other employees of the Agency, and all other 

8 expenses thereof, may be paid from assessments collected 

9 under this subsection or other sources, and shall not be 

10 construed to be Government funds or appropriated mon11 ies, or subject to apportionment for the purposes of chap12 ter 15 of title 31, United States Code, or any other au13 thority.’’; and 

14 (9) in subsection (g)— 

15 (A) by striking ‘‘the Secretary and’’ each 

16 place that term appears; and 

17 (B) in paragraph (3)— 

18 (i) by striking ‘‘(A)’’; and 

19 (ii) by striking ‘‘, and (B)’’ and all 

20 that follows through the end of the para21 graph and inserting a period. 

22 SEC. 107. REGULATIONS AND ORDERS. 

23 Section 1319G of the Federal Housing Enterprises 

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

25 4526) is amended— 

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

2 following: 

3 ‘‘(a) AUTHORITY.—The Director shall issue any reg4 ulations, guidelines, directives, or orders necessary to 

5 carry out the duties of the Director under this title or the 

6 authorizing statutes, and to ensure that the purposes of 

7 this title and the authorizing statutes are accomplished.’’; 

8 and 

9 (2) by striking subsection (c). 

10 SEC. 108. PRUDENTIAL MANAGEMENT AND OPERATIONS 

11 STANDARDS. 

12 The Federal Housing Enterprises Financial Safety 

13 and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is 

14 amended by inserting after section 1313A, as added by 

15 this Act, the following new section: 

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

17 STANDARDS. 

18 ‘‘The Director may establish standards, by regula19 tion, order, or guideline, for each regulated entity relating 

20 to— 

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

23 scale of business operations; 

24 ‘‘(2) independence and adequacy of internal 

25 audit systems; 

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1 ‘‘(3) management of interest rate risk exposure; 

2 ‘‘(4) management of market risk, including 

3 standards that provide for systems that accurately 

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

5 warranted, that establish limitations on market risk; 

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

7 reserves; 

8 ‘‘(6) management of asset and investment port9 folio growth; 

10 ‘‘(7) investments and acquisitions of assets by 

11 a regulated entity, to ensure that they are consistent 

12 with the purposes of this title and the authorizing 

13 statutes; 

14 ‘‘(8) overall risk management processes, includ15 ing adequacy of oversight by senior management and 

16 the board of directors and of processes and policies 

17 to identify, measure, monitor, and control material 

18 risks, including reputational risks, and for adequate, 

19 well-tested business resumption plans for all major 

20 systems with remote site facilities to protect against 

21 disruptive events; and 

22 ‘‘(9) such other operational and management 

23 standards as the Director determines to be appro24 priate.’’. 

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1 SEC. 109. CAPITAL LEVELS AND HOLDINGS. 

2 Subtitle B of the Federal Housing Enterprises Fi3 nancial Safety and Soundness Act of 1992 (12 U.S.C. 

4 4611 et seq.) is amended— 

5 (1) by striking the subtitle designation and 

6 heading and inserting the following: 

7 ‘‘Subtitle B—Required Capital Lev8 els for Enterprises, Special En9 forcement Powers, Limitation 

10 on Assets, and Securities Treat11 ment’’; 

12 and 

13 (2) by adding at the end the following: 

14 ‘‘SEC. 1369E. AFFORDABLE HOUSING FOCUSED PORT15 FOLIOS. 

16 ‘‘(a) SUPPORTING AFFORDABLE HOUSING.—Con17 gress finds that, consistent with the missions of the enter18 prises, the portfolio holdings of the enterprises should be 

19 focused, to the maximum extent possible, on mortgages 

20 and mortgage-backed securities that meet the affordable 

21 housing goals established for the enterprises pursuant to 

22 this Act. 

23 ‘‘(b) AUTHORITY OF THE DIRECTOR.—The Director 

24 shall, by regulation, provide that any mortgages or mort25 gage-related securities acquired by an enterprise after the 

26 date of enactment of this Act shall— 

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1 ‘‘(1) meet one or more of the housing goals es2 tablished for the enterprise under this Act; or 

3 ‘‘(2) be promptly securitized and sold to third 

4 parties. 

5 ‘‘(c) TEMPORARY ADJUSTMENTS.—The Director 

6 may, by order, make temporary adjustments to the stand7 ards under subsection (b), if such action would help to 

8 mitigate market disruptions in the housing finance sys9 tem.’’. 

10 SEC. 110. RISK-BASED CAPITAL TEST FOR ENTERPRISES. 

11 (a) RISK-BASED CAPITAL LEVELS.—Section 1361 of 

12 the Federal Housing Enterprises Financial Safety and 

13 Soundness Act of 1992 (12 U.S.C. 4611) is amended to 

14 read as follows: 

15 ‘‘SEC. 1361. RISK-BASED CAPITAL LEVELS. 

16 ‘‘(a) IN GENERAL.—The Director shall, by regulation 

17 or order, establish risk-based capital requirements for each 

18 of the enterprises to ensure that the enterprises operate 

19 in a safe and sound manner, with sufficient capital and 

20 reserves to support the risks that arise in the operations 

21 and management of each enterprise. 

22 ‘‘(b) NO LIMITATION.—Nothing in this section limits 

23 the authority of the Director to require other reports or 

24 undertakings in furtherance of the responsibilities of the 

25 Director under this Act.’’. 

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1 (b) MINIMUM CAPITAL LEVELS FOR REGULATED

2 ENTITIES.— 

3 (1) ENTERPRISES.—Section 1362 of the Fed4 eral Housing Enterprises Financial Safety and 

5 Soundness Act of 1992 (12 U.S.C. 4612) is amend6 ed— 

7 (A) in the section heading, by inserting 

8 ‘‘FOR ENTERPRISES’’ after ‘‘LEVELS’’; and 

9 (B) by striking subsection (b) and insert10 ing the following: 

11 ‘‘(b) REGULATORY DISCRETION.—The Director may, 

12 by regulation or order, establish a minimum capital level 

13 that is higher than the level specified in subsection (a).’’. 

14 (2) FEDERAL HOME LOAN BANKS.—Section 

15 6(a)(2) of the Federal Home Loan Bank Act (12 

16 U.S.C. 1426(a)(2)) is amended by adding at the end 

17 the following: 

18 ‘‘(C) AUTHORITY TO ALTER LEVEL.—The 

19 Director may, by regulation or order, establish 

20 a minimum capital level that is higher than the 

21 level specified in subparagraph (A).’’. 

22 SEC. 111. REGISTRATION OF ENTERPRISE SECURITIES. 

23 (a) FANNIE MAE.— 

24 (1) MORTGAGE-BACKED SECURITIES.—Section 

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1 tion Charter Act (12 U.S.C. 1719(d)) is amended by 

2 striking the fourth sentence and inserting the fol3 lowing: ‘‘Securities issued by the corporation under 

4 this subsection shall not be exempt securities for 

5 purposes of the Securities Act of 1933.’’. 

6 (2) SUBORDINATE OBLIGATIONS.—Section 

7 304(e) of the Federal National Mortgage Association 

8 Charter Act (12 U.S.C. 1719(e)) is amended by 

9 striking the fourth sentence and inserting the fol10 lowing: ‘‘Obligations issued by the corporation under 

11 this subsection shall not be exempt securities for 

12 purposes of the Securities Act of 1933.’’. 

13 (3) SECURITIES.—Section 311 of the Federal 

14 National Mortgage Association Charter Act (12 

15 U.S.C. 1723c) is amended— 

16 (A) in the section heading, by striking ‘‘AS17 SOCIATION’’; 

18 (B) by inserting ‘‘(a) IN GENERAL.—’’ 

19 after ‘‘SEC. 311.’’; 

20 (C) in the second sentence, by inserting 

21 ‘‘by the Association’’ after ‘‘issued’’; and 

22 (D) by adding at the end the following: 

23 ‘‘(b) TREATMENT OF CORPORATION SECURITIES.— 

24 ‘‘(1) IN GENERAL.—Any stock, obligations, se25 curities, participations, or other instruments issued 

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1 or guaranteed by the corporation pursuant to this 

2 title shall not be exempt securities for purposes of 

3 the Securities Act of 1933. 

4 ‘‘(2) EXEMPTION FOR APPROVED SELLERS.— 

5 Notwithstanding any other provision of this title or 

6 the Securities Act of 1933, transactions involving 

7 the initial disposition by an approved seller of pooled 

8 certificates that are acquired by that seller from the 

9 corporation upon the initial issuance of the pooled 

10 certificates shall be deemed to be transactions by a 

11 person other than an issuer, underwriter, or dealer 

12 for purposes of the Securities Act of 1933. 

13 ‘‘(3) DEFINITIONS.—For purposes of this sub14 section, the following definitions shall apply: 

15 ‘‘(A) APPROVED SELLER.—The term ‘ap16 proved seller’ means an institution approved by 

17 the corporation to sell mortgage loans to the 

18 corporation in exchange for pooled certificates. 

19 ‘‘(B) POOLED CERTIFICATES.—The term 

20 ‘pooled certificates’ means single class mort21 gage-backed securities guaranteed by the cor22 poration that have been issued by the corpora23 tion directly to the approved seller in exchange 

24 for the mortgage loans underlying such mort25 gage-backed securities. 

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1 ‘‘(4) MORTGAGE RELATED SECURITIES.—A sin2 gle class mortgage-backed security guaranteed by 

3 the corporation that has been issued by the corpora4 tion directly to the approved seller in exchange for 

5 the mortgage loans underlying such mortgage6 backed securities or directly by the corporation for 

7 cash shall be deemed to be a mortgage related secu8 rity, as defined in section 3(a) of the Securities Ex9 change Act of 1934.’’. 

10 (b) FREDDIE MAC.—Section 306(g) of the Federal 

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

12 1455(g)) is amended to read as follows: 

13 ‘‘(g) TREATMENT OF SECURITIES.— 

14 ‘‘(1) IN GENERAL.—Any securities issued or 

15 guaranteed by the Corporation shall not be exempt 

16 securities for purposes of the Securities Act of 1933. 

17 ‘‘(2) EXEMPTION FOR APPROVED SELLERS.— 

18 Notwithstanding any other provision of this title or 

19 the Securities Act of 1933, transactions involving 

20 the initial disposition by an approved seller of pooled 

21 certificates that are acquired by that seller from the 

22 Corporation upon the initial issuance of the pooled 

23 certificates shall be deemed to be transactions by a 

24 person other than an issuer, underwriter, or dealer 

25 for purposes of the Securities Act of 1933. 

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1 ‘‘(3) DEFINITIONS.—For purposes of this sub2 section, the following definitions shall apply: 

3 ‘‘(A) APPROVED SELLER.—The term ‘ap4 proved seller’ means an institution approved by 

5 the Corporation to sell mortgage loans to the 

6 Corporation in exchange for pooled certificates. 

7 ‘‘(B) POOLED CERTIFICATES.—The term 

8 ‘pooled certificates’ means single class mort9 gage-backed securities guaranteed by the Cor10 poration that have been issued by the Corpora11 tion directly to the approved seller in exchange 

12 for the mortgage loans underlying such mort13 gage-backed securities.’’. 

14 (c) LIMITATION ON FEES.—Section 6(b)(2) of the 

15 Securities Act of 1933 (15 U.S.C. 77f(b)(2)) is amended 

16 by adding at the end the following: ‘‘Notwithstanding any 

17 other provision of this title, no applicant, or group of affili18 ated applicants that does not include any investment com19 pany registered under the Investment Company Act of 

20 1940, filing a registration statement subject to a fee shall 

21 be required in any fiscal year with respect to all registra22 tion statements filed by such applicant in such fiscal year 

23 to pay an aggregate amount in fees to the Commission 

24 pursuant to this subsection in an amount that exceeds 5 

25 percent of the target offsetting collection amount for such 

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1 fiscal year. Fees paid in connection with registration state2 ments relating to business combinations shall not be in3 cluded in calculating the total fees paid by any such appli4 cant.’’. 

5 (d) NO EFFECT ON OTHER LAW.—Nothing in this 

6 section or the amendments made by this section shall be 

7 construed to affect any exemption from the provisions of 

8 the Trust Indenture Act of 1939 provided to the Federal 

9 National Mortgage Association or the Federal Home Loan 

10 Mortgage Corporation. 

11 (e) REGULATIONS.—The Securities and Exchange 

12 Commission may issue such regulations as may be nec13 essary or appropriate to carry out this section and the 

14 amendments made by this section. 

15 (f) EFFECTIVE DATE.—The amendments made by 

16 this section shall become effective 1 year after the date 

17 of enactment of this Act. 

18 SEC. 112. LIMIT ON GOLDEN PARACHUTES. 

19 Section 1318 of the Federal Housing Enterprises Fi20 nancial Safety and Soundness Act of 1992 (12 U.S.C. 

21 4518) is amended by adding at the end the following: 

22 ‘‘(c) AUTHORITY TO REGULATE OR PROHIBIT CER23 TAIN FORMS OF BENEFITS TO AFFILIATED PARTIES.— 

24 ‘‘(1) GOLDEN PARACHUTES AND INDEMNIFICA25 TION PAYMENTS.—The Agency may prohibit or 

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1 limit, by regulation or order, any golden parachute 

2 payment or indemnification payment. 

3 ‘‘(2) FACTORS TO BE TAKEN INTO ACCOUNT.— 

4 The Agency shall prescribe, by regulation, the fac5 tors to be considered by the Agency in taking any 

6 action pursuant to paragraph (1), which may include 

7 such factors as— 

8 ‘‘(A) whether there is a reasonable basis to 

9 believe that the affiliated party has committed 

10 any fraudulent act or omission, breach of trust 

11 or fiduciary duty, or insider abuse with regard 

12 to the regulated entity that has had a material 

13 effect on the financial condition of the regulated 

14 entity; 

15 ‘‘(B) whether there is a reasonable basis to 

16 believe that the affiliated party is substantially 

17 responsible for the insolvency of the regulated 

18 entity, the appointment of a conservator or re19 ceiver for the regulated entity, or the troubled 

20 condition of the regulated entity (as defined in 

21 regulations prescribed by the Agency); 

22 ‘‘(C) whether there is a reasonable basis to 

23 believe that the affiliated party has materially 

24 violated any applicable provision of Federal or 

25 State law or regulation that has had a material 

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1 affect on the financial condition of the regu2 lated entity; 

3 ‘‘(D) whether the affiliated party was in a 

4 position of managerial or fiduciary responsi5 bility; and 

6 ‘‘(E) the length of time that the party was 

7 affiliated with the regulated entity, and the de8 gree to which— 

9 ‘‘(i) the payment reasonably reflects 

10 compensation earned over the period of 

11 employment; and 

12 ‘‘(ii) the compensation involved rep13 resents a reasonable payment for services 

14 rendered. 

15 ‘‘(3) CERTAIN PAYMENTS PROHIBITED.—No 

16 regulated entity may prepay the salary or any liabil17 ity or legal expense of any affiliated party if such 

18 payment is made— 

19 ‘‘(A) in contemplation of the insolvency of 

20 such regulated entity, or after the commission 

21 of an act of insolvency; and 

22 ‘‘(B) with a view to, or having the result 

23 of— 

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1 ‘‘(i) preventing the proper application 

2 of the assets of the regulated entity to 

3 creditors; or 

4 ‘‘(ii) preferring one creditor over an5 other. 

6 ‘‘(4) GOLDEN PARACHUTE PAYMENT DE7 FINED.— 

8 ‘‘(A) IN GENERAL.—For purposes of this 

9 subsection, the term ‘golden parachute pay10 ment’ means any payment (or any agreement to 

11 make any payment) in the nature of compensa12 tion by any regulated entity for the benefit of 

13 any affiliated party pursuant to an obligation of 

14 such regulated entity that— 

15 ‘‘(i) is contingent on the termination 

16 of such party’s affiliation with the regu17 lated entity; and 

18 ‘‘(ii) is received on or after the date 

19 on which— 

20 ‘‘(I) the regulated entity became 

21 insolvent; 

22 ‘‘(II) any conservator or receiver 

23 is appointed for such regulated entity; 

24 or 

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1 ‘‘(III) the Agency determines 

2 that the regulated entity is in a trou3 bled condition (as defined in the regu4 lations of the Agency). 

5 ‘‘(B) CERTAIN PAYMENTS IN CONTEMPLA6 TION OF AN EVENT.—Any payment which 

7 would be a golden parachute payment but for 

8 the fact that such payment was made before the 

9 date referred to in subparagraph (A)(ii) shall be 

10 treated as a golden parachute payment if the 

11 payment was made in contemplation of the oc12 currence of an event described in any subclause 

13 of such subparagraph. 

14 ‘‘(C) CERTAIN PAYMENTS NOT IN15 CLUDED.—For purposes of this subsection, the 

16 term ‘golden parachute payment’ shall not in17 clude— 

18 ‘‘(i) any payment made pursuant to a 

19 retirement plan which is qualified (or is in20 tended to be qualified) under section 401 

21 of the Internal Revenue Code of 1986, or 

22 other nondiscriminatory benefit plan; 

23 ‘‘(ii) any payment made pursuant to a 

24 bona fide deferred compensation plan or 

25 arrangement which the Board determines, 

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1 by regulation or order, to be permissible; 

2 or 

3 ‘‘(iii) any payment made by reason of 

4 the death or disability of an affiliated 

5 party. 

6 ‘‘(5) OTHER DEFINITIONS.—For purposes of 

7 this subsection, the following definitions shall apply: 

8 ‘‘(A) INDEMNIFICATION PAYMENT.—Sub9 ject to paragraph (6), the term ‘indemnification 

10 payment’ means any payment (or any agree11 ment to make any payment) by any regulated 

12 entity for the benefit of any person who is or 

13 was an affiliated party, to pay or reimburse 

14 such person for any liability or legal expense 

15 with regard to any administrative proceeding or 

16 civil action instituted by the Agency which re17 sults in a final order under which such per18 son— 

19 ‘‘(i) is assessed a civil money penalty; 

20 ‘‘(ii) is removed or prohibited from 

21 participating in conduct of the affairs of 

22 the regulated entity; or 

23 ‘‘(iii) is required to take any affirma24 tive action to correct certain conditions remmaher on PRODPC74 with BILLS

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1 sulting from violations or practices, by 

2 order of the Agency. 

3 ‘‘(B) LIABILITY OR LEGAL EXPENSE.—The 

4 term ‘liability or legal expense’ means— 

5 ‘‘(i) any legal or other professional ex6 pense incurred in connection with any 

7 claim, proceeding, or action; 

8 ‘‘(ii) the amount of, and any cost in9 curred in connection with, any settlement 

10 of any claim, proceeding, or action; and 

11 ‘‘(iii) the amount of, and any cost in12 curred in connection with, any judgment or 

13 penalty imposed with respect to any claim, 

14 proceeding, or action. 

15 ‘‘(C) PAYMENT.—The term ‘payment’ in16 cludes— 

17 ‘‘(i) any direct or indirect transfer of 

18 any funds or any asset; and 

19 ‘‘(ii) any segregation of any funds or 

20 assets for the purpose of making, or pursu21 ant to an agreement to make, any payment 

22 after the date on which such funds or as23 sets are segregated, without regard to 

24 whether the obligation to make such pay25 ment is contingent on— 

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1 ‘‘(I) the determination, after such 

2 date, of the liability for the payment 

3 of such amount; or 

4 ‘‘(II) the liquidation, after such 

5 date, of the amount of such payment. 

6 ‘‘(6) CERTAIN COMMERCIAL INSURANCE COV7 ERAGE NOT TREATED AS COVERED BENEFIT PAY8 MENT.—No provision of this subsection shall be con9 strued as prohibiting any regulated entity from pur10 chasing any commercial insurance policy or fidelity 

11 bond, except that, subject to any requirement de12 scribed in paragraph (5)(A)(iii), such insurance pol13 icy or bond shall not cover any legal or liability ex14 pense of the regulated entity which is described in 

15 paragraph (5)(A).’’. 

16 SEC. 113. REPORTING OF FRAUDULENT LOANS. 

17 Part 1 of subtitle C of the Federal Housing Enter18 prises Financial Safety and Soundness Act of 1992 (12 

19 U.S.C. 4631 et seq.), as amended by this Act, is amended 

20 by adding at the end the following: 

21 ‘‘SEC. 1379E. REPORTING OF FRAUDULENT LOANS. 

22 ‘‘(a) REQUIREMENT TO REPORT.—The Director 

23 shall require a regulated entity to submit to the Director 

24 a timely report upon discovery by the regulated entity that 

25 it has purchased or sold a fraudulent loan or financial inmmaher on PRODPC74 with BILLS

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1 strument, or suspects a possible fraud relating to the pur2 chase or sale of any loan or financial instrument. The Di3 rector shall require each regulated entity to establish and 

4 maintain procedures designed to discover any such trans5 actions. 

6 ‘‘(b) PROTECTION FROM LIABILITY FOR REPORTS.— 

7 Any regulated entity that makes a report pursuant to sub8 section (a), and any entity-affiliated party, that makes or 

9 requires another to make any such report, shall not be 

10 liable to any person under any provision of law or regula11 tion, any constitution, law, or regulation of any State or 

12 political subdivision of any State, or under any contract 

13 or other legally enforceable agreement (including any arbi14 tration agreement) for such report or for any failure to 

15 provide notice of such report to the person who is the sub16 ject of such report or any other persons identified in the 

17 report.’’. 

18 Subtitle B—Improvement of 

19 Mission Supervision 

20 SEC. 121. TRANSFER OF PROGRAM APPROVAL AND HOUS21 ING GOAL OVERSIGHT. 

22 Part 2 of subtitle A of the Federal Housing Enter23 prises Financial Safety and Soundness Act of 1992 (12 

24 U.S.C. 4541 et seq.) is amended— 

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1 (1) by striking the heading for the part and in2 serting the following: 

3 ‘‘PART ‘2’—ADDITIONAL AUTHORITIES OF THE 

4 DIRECTOR’’; 

5 and 

6 (2) by striking sections 1321 and 1322. 

7 SEC. 122. REVIEW OF ENTERPRISE PRODUCTS. 

8 Part 2 of subtitle A of the Federal Housing Enter9 prises Financial Safety and Soundness Act of 1992 (12 

10 U.S.C. 4501 et seq.), as amended by this Act, is amended 

11 by inserting before section 1323 the following: 

12 ‘‘SEC. 1321. PRIOR APPROVAL AUTHORITY FOR PRODUCTS. 

13 ‘‘(a) IN GENERAL.—The Director shall require each 

14 enterprise to obtain the approval of the Director for any 

15 product of the enterprise before initially offering the prod16 uct. 

17 ‘‘(b) STANDARD FOR APPROVAL.—In considering any 

18 request for approval of a product pursuant to subsection 

19 (a), the Director shall make a determination that— 

20 ‘‘(1) in the case of a product of the Federal Na21 tional Mortgage Association, the Director determines 

22 that the product is authorized under paragraph (2), 

23 (3), (4), or (5) of section 302(b) or section 304 of 

24 the Federal National Mortgage Association Charter 

25 Act (12 U.S.C. 1717(b), 1719); 

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1 ‘‘(2) in the case of a product of the Federal 

2 Home Loan Mortgage Corporation, the Director de3 termines that the product is authorized under para4 graph (1), (4), or (5) of section 305(a) of the Fed5 eral Home Loan Mortgage Corporation Act (12 

6 U.S.C. 1454(a)); 

7 ‘‘(3) the product is in the public interest; 

8 ‘‘(4) the product is consistent with the safety 

9 and soundness of the enterprise or the mortgage fi10 nance system; and 

11 ‘‘(5) the product does not impair the stability 

12 or competitiveness of the mortgage finance system. 

13 ‘‘(c) PROCEDURE FOR APPROVAL.— 

14 ‘‘(1) SUBMISSION OF REQUEST.—An enterprise 

15 shall submit to the Director a written request for 

16 approval of a product that describes the product in 

17 such form as prescribed by order or regulation of the 

18 Director. 

19 ‘‘(2) REQUEST FOR PUBLIC COMMENT.—Imme20 diately upon receipt of a request for approval of a 

21 product, as required under paragraph (1), the Direc22 tor shall publish notice of such request and of the 

23 period for public comment pursuant to paragraph 

24 (3) regarding the product, and a description of the 

25 product proposed by the request. The Director shall 

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1 give interested parties the opportunity to respond in 

2 writing to the proposed product. 

3 ‘‘(3) PUBLIC COMMENT PERIOD.—During the 

4 30-day period beginning on the date of publication 

5 pursuant to paragraph (2) of a request for approval 

6 of a product, the Director shall receive public com7 ments regarding the proposed product. 

8 ‘‘(4) OFFERING OF PRODUCT.— 

9 ‘‘(A) IN GENERAL.—Not later than 30 

10 days after the close of the public comment pe11 riod described in paragraph (3), the Director 

12 shall approve or deny the product, specifying 

13 the grounds for such decision in writing. 

14 ‘‘(B) FAILURE TO ACT.—If the Director 

15 fails to act within the 30-day period described 

16 in subparagraph (A), then the enterprise may 

17 offer the product. 

18 ‘‘(d) EXPEDITED REVIEW.— 

19 ‘‘(1) DETERMINATION AND NOTICE.—If an en20 terprise determines that any new activity, service, 

21 undertaking or offering is excluded from the defini22 tion of a product under subsection (f), then the en23 terprise shall provide written notice to the Director 

24 prior to the commencement of such activity, service, 

25 undertaking, or offering. 

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1 ‘‘(2) DIRECTOR DETERMINATION OF APPLICA2 BLE PROCEDURE.—Immediately upon receipt of any 

3 notice pursuant to paragraph (1), the Director shall 

4 make a determination under paragraph (3). 

5 ‘‘(3) DETERMINATION AND TREATMENT AS A

6 PRODUCT.—If the Director determines that any new 

7 activity, service, undertaking, or offering consists of, 

8 relates to, or involves a product— 

9 ‘‘(A) the Director shall notify the enter10 prise of the determination; 

11 ‘‘(B) the new activity, service, undertaking, 

12 or offering described in the notice under para13 graph (1) shall be considered a product for the 

14 purposes of this section; and 

15 ‘‘(C) the enterprise shall withdraw its re16 quest or submit a written request for approval 

17 of the product pursuant to subsection (c). 

18 ‘‘(e) CONDITIONAL APPROVAL.—The Director may 

19 conditionally approve the offering of any product by an 

20 enterprise, and may establish terms, conditions, or limita21 tions with respect to such product with which the enter22 prise must comply in order to offer such product. 

23 ‘‘(f) DEFINITION OF PRODUCT.—As used in this sec24 tion, the term ‘product’— 

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1 ‘‘(1) all programs, products, and activities, of2 fered by the enterprise in the marketplace; and 

3 ‘‘(2) does not include— 

4 ‘‘(A) the automated loan underwriting sys5 tem of an enterprise in existence as of the date 

6 of enactment of the Federal Housing Enter7 prise Regulatory Reform Act of 2007, including 

8 any upgrade to the technology, operating sys9 tem, or software to operate the underwriting 

10 system; or 

11 ‘‘(B) any modification to the mortgage 

12 terms and conditions or mortgage underwriting 

13 criteria relating to the mortgages that are pur14 chased or guaranteed by an enterprise, provided 

15 that such modifications do not alter the under16 lying transaction so as to include services or fi17 nancing, other than residential mortgage fi18 nancing, or create significant new exposure to 

19 risk for the enterprise or the holder of the 

20 mortgage. 

21 ‘‘(g) NO LIMITATION.—Nothing in this section shall 

22 be deemed to restrict— 

23 ‘‘(1) the safety and soundness authority of the 

24 Director over all new and existing products or activi25 ties; or 

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1 ‘‘(2) the authority of the Director to review all 

2 new and existing products or activities to determine 

3 that such products or activities are consistent with 

4 the statutory mission of an enterprise.’’. 

5 SEC. 123. MONITORING AND ENFORCING COMPLIANCE 

6 WITH HOUSING GOALS. 

7 Section 1336(a)(1) of the Federal Housing Enter8 prises Financial Safety and Soundness Act of 1992 (12 

9 U.S.C. 4566(a)(1)) is amended by striking ‘‘established’’ 

10 and all that follows through ‘‘1334’’ and inserting ‘‘under 

11 this subpart’’. 

12 SEC. 124. ASSUMPTION BY DIRECTOR OF OTHER HUD RE13 SPONSIBILITIES. 

14 (a) IN GENERAL.—Part 2 of subtitle A of the Federal 

15 Housing Enterprises Financial Safety and Soundness Act 

16 of 1992 (12 U.S.C. 4541 et seq.) is amended— 

17 (1) by striking ‘‘Secretary’’ each place that 

18 term appears and inserting ‘‘Director’’ in each of 

19 sections 1323, 1324, 1326, 1331, 1332, 1333, 1334, 

20 and 1336; 

21 (2) in section 1332 (12 U.S.C. 4562), by strik22 ing subsection (d); 

23 (3) in section 1333 (12 U.S.C. 4563), by strik24 ing subsection (d); 

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1 (4) in section 1334 (12 U.S.C. 4564), by strik2 ing subsection (d); and 

3 (5) by striking sections 1337, 1338, and 1349 

4 (12 U.S.C. 4567, 4562 note, 4589). 

5 (b) RETENTION OF FAIR HOUSING RESPONSIBIL6 ITIES.—Section 1325 of the Federal Housing Enterprises 

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

8 4545) is amended in the matter preceding paragraph (1), 

9 by inserting ‘‘of Housing and Urban Development’’ after 

10 ‘‘The Secretary’’. 

11 SEC. 125. ADMINISTRATIVE AND JUDICIAL ENFORCEMENT 

12 PROCEEDINGS. 

13 (a) DIRECTOR AUTHORITY.—Subpart C of part 2 of 

14 subtitle A of the Federal Housing Enterprises Financial 

15 Safety and Soundness Act of 1992 (12 U.S.C. 4581 et 

16 seq.) is amended by striking ‘‘Secretary’’ each place that 

17 term appears and inserting ‘‘Director’’ in each of— 

18 (1) section 1341 (12 U.S.C. 4581); 

19 (2) section 1342 (12 U.S.C. 4582); 

20 (3) section 1343 (12 U.S.C. 4583); 

21 (4) section 1344 (12 U.S.C. 4584); 

22 (5) section 1345 (12 U.S.C. 4585); 

23 (6) section 1346 (12 U.S.C. 4586); 

24 (7) section 1347 (12 U.S.C. 4587); and 

25 (8) section 1348 (12 U.S.C. 4588). 

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1 (b) SUBPOENA ENFORCEMENT BY DIRECTOR.—Sec2 tion 1348(c) of the Federal Housing Enterprises Financial 

3 Safety and Soundness Act of 1992 (12 U.S.C. 4588(c)) 

4 is amended by inserting ‘‘may bring an action or’’ before 

5 ‘‘may request’’. 

6 SEC. 126. CONFORMING LOAN LIMITS. 

7 (a) FANNIE MAE.—Section 302(b)(2) of the Federal 

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

9 1717(b)(2)) is amended by striking ‘‘The Corporation 

10 shall establish’’ and all that follows through the end of 

11 the paragraph and inserting the following: ‘‘Such limita12 tions shall not exceed $417,000 for a mortgage secured 

13 by a single-family residence, $533,850 for a mortgage se14 cured by a 2-family residence, $645,300 for a mortgage 

15 secured by a 3-family residence, or $801,950 for a mort16 gage secured by a 4-family residence, except that such 

17 maximum limitations shall be adjusted effective January 

18 1 of each year beginning after the effective date under 

19 section 163 of the Federal Housing Enterprise Regulatory 

20 Reform Act of 2007, subject to the limitations in this 

21 paragraph. Such limitation shall be calculated with respect 

22 to the total original principal obligation of the mortgage, 

23 and not merely with respect to the interest purchased by 

24 the enterprise. Each adjustment shall be made by adding 

25 to or subtracting from each such amount (as it may have 

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1 been previously adjusted) a percentage thereof equal to the 

2 percentage increase or decrease, during the most recent 

3 12-month or fourth quarter period ending before the time 

4 of determining such annual adjustment, in the housing 

5 price index maintained by the Director of the Federal 

6 Housing Enterprise Regulatory Agency (pursuant to sec7 tion 1321 of the Federal Housing Enterprises Financial 

8 Safety and Soundness Act of 1992 (12 U.S.C. 4541)).’’. 

9 (b) FREDDIE MAC.—Section 305(a)(2) of the Fed10 eral Home Loan Mortgage Corporation Act (12 U.S.C. 

11 1454(a)(2)) is amended by striking ‘‘The Corporation 

12 shall establish’’ and all that follows through the end of 

13 the paragraph and inserting the following: ‘‘Such limita14 tions shall not exceed $417,000 for a mortgage secured 

15 by a single-family residence, $533,850 for a mortgage se16 cured by a 2-family residence, $645,300 for a mortgage 

17 secured by a 3-family residence, or $801,950 for a mort18 gage secured by a 4-family residence, except that such 

19 maximum limitations shall be adjusted effective January 

20 1 of each year beginning after the effective date under 

21 section 163 of the Federal Housing Enterprise Regulatory 

22 Reform Act of 2007, subject to the limitations in this 

23 paragraph. Such limitation shall be calculated with respect 

24 to the total original principal obligation of the mortgage 

25 and not merely with respect to the interest purchased by 

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1 the enterprise. Each adjustment shall be made by adding 

2 to or subtracting from each such amount (as it may have 

3 been previously adjusted) a percentage thereof equal to the 

4 percentage increase or decrease, during the most recent 

5 12-month or fourth quarter period ending before the time 

6 of determining such annual adjustment, in the housing 

7 price index maintained by the Director of the Federal 

8 Housing Enterprise Regulatory Agency (pursuant to sec9 tion 1321 of the Federal Housing Enterprises Financial 

10 Safety and Soundness Act of 1992 (12 U.S.C. 4541)).’’. 

11 (c) HOUSING PRICE INDEX.—The Federal Housing 

12 Enterprises Financial Safety and Soundness Act of 1992, 

13 as amended by this Act, is amended by inserting before 

14 section 1323 the following: 

15 ‘‘SEC. 1322. HOUSING PRICE INDEX. 

16 ‘‘(a) METHOD OF ASSESSMENT.—The Director shall 

17 establish, by regulation, and maintain a method of assess18 ing the national average single-family housing price for 

19 use in adjusting the conforming loan limitations of the en20 terprises. 

21 ‘‘(b) CONSIDERATIONS.—The Director shall take into 

22 consideration the monthly survey of all major lenders con23 ducted by the Agency to determine the national average 

24 single-family house price, the Housing Price Index main25 tained by the Office of Federal Housing Enterprise Overmmaher on PRODPC74 with BILLS

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1 sight of the Department of Housing and Urban Develop2 ment before the effective date under section 163 of the 

3 Federal Housing Enterprise Regulatory Reform Act of 

4 2007, any appropriate housing price indexes of the Bureau 

5 of the Census of the Department of Commerce, and any 

6 other indexes or measure that the Director considers ap7 propriate.’’. 

8 SEC. 127. REPORTING OF MORTGAGE DATA; HOUSING 

9 GOALS. 

10 (a) REPORTING OF MORTGAGE DATA.—Section 1325 

11 of the Federal Housing Enterprises Financial Safety and 

12 Soundness Act of 1992 (12 U.S.C. 4546), as so redesig13 nated by this Act, is amended— 

14 (1) in subsection (a), by striking ‘‘The Direc15 tor’’ and inserting ‘‘Subject to subsection (d), the 

16 Director’’; and 

17 (2) by adding at the end the following: 

18 ‘‘(d) MORTGAGE DATA.—The Director shall, by regu19 lation or order, provide that certain information relating 

20 to single family mortgage data of the enterprises shall be 

21 disclosed to the public in order to make available to the 

22 public the same data from the enterprises that is required 

23 of insured depository institutions under the Home Mort24 gage Disclosure Act.’’. 

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1 (b) DEFINITIONS.—Section 1334 of the Federal 

2 Housing Enterprises Financial Safety and Soundness Act 

3 of 1992 (12 U.S.C. 4564), as amended by this Act, is 

4 amended by adding at the end the following: 

5 ‘‘(d) DEFINITIONS.—For purposes of this section, the 

6 term ‘underserved area’ means an urban census tract that 

7 has— 

8 ‘‘(1) an average median family income of less 

9 than 80 percent of the area median family income; 

10 or 

11 ‘‘(2) a minority population of at least 30 per12 cent and a median family income of less than 100 

13 percent of the area family median income.’’. 

14 SEC. 128. DUTY TO SERVE UNDERSERVED MARKETS. 

15 (a) ESTABLISHMENT AND EVALUATION OF PER16 FORMANCE.—Section 1335 of the Federal Housing Enter17 prises Financial Safety and Soundness Act of 1992 (12 

18 U.S.C. 4565) is amended— 

19 (1) in the section heading, by inserting ‘‘DUTY

20 TO SERVE UNDERSERVED MARKETS AND’’ be21 fore ‘‘OTHER’’; 

22 (2) by striking subsection (b); 

23 (3) in subsection (a)— 

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1 (A) by inserting ‘‘and to carry out the duty 

2 under subsection (a)’’ before ‘‘, each enterprise 

3 shall’’; 

4 (B) in paragraph (3), by inserting ‘‘and’’ 

5 at the end; 

6 (C) in paragraph (4), by striking ‘‘; and’’ 

7 and inserting a period; and 

8 (D) by striking paragraph (5); and 

9 (4) by redesignating subsection (a) as sub10 section (b); 

11 (5) by inserting before subsection (b) (as so re12 designated) the following: 

13 ‘‘(a) DUTY TO SERVE UNDERSERVED MARKETS.— 

14 ‘‘(1) DUTY.—In accordance with the purposes 

15 of the enterprises under section 301(3) of the Fed16 eral National Mortgage Association Charter Act (12 

17 U.S.C. 1716) and section 301(b)(3) of the Federal 

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

19 1451 note) to undertake activities relating to mort20 gages on housing for very low-, low-, and moderate21 income families, involving a reasonable economic re22 turn that may be less than the return earned on 

23 other activities, each enterprise shall have the duty 

24 to increase the liquidity of mortgage investments 

25 and improve the distribution of investment capital 

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1 available for mortgage financing for underserved 

2 markets. 

3 ‘‘(2) UNDERSERVED MARKETS.—To meet its 

4 duty under paragraph (1), each enterprise shall lead 

5 the industry in developing loan products and flexible 

6 underwriting guidelines to facilitate a secondary 

7 market— 

8 ‘‘(A) for mortgages on manufactured 

9 homes for very low-, low-, and moderate-income 

10 families; 

11 ‘‘(B) to preserve housing affordable to very 

12 low-, low-, and moderate-income families, in13 cluding housing projects subsidized under— 

14 ‘‘(i) the project-based and tenant15 based rental assistance programs under 

16 section 8 of the United States Housing Act 

17 of 1937; 

18 ‘‘(ii) the program under section 236 

19 of the National Housing Act; 

20 ‘‘(iii) the below market interest rate 

21 mortgage program under section 221(d)(4) 

22 of the National Housing Act; 

23 ‘‘(iv) the supportive housing for the 

24 elderly program under section 202 of the 

25 Housing Act of 1959; 

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1 ‘‘(v) the supportive housing program 

2 for persons with disabilities under section 

3 811 of the Cranston-Gonzalez National Af4 fordable Housing Act; and 

5 ‘‘(vi) the rural rental housing program 

6 under section 515 of the Housing Act of 

7 1949; 

8 ‘‘(C) for mortgages on housing for very 

9 low-, low-, and moderate-income families in 

10 rural areas, and for mortgages for housing for 

11 any other underserved market for very low-, 

12 low-, and moderate-income families that the Di13 rector identifies as lacking adequate credit 

14 through conventional lending sources, which un15 derserved markets may be identified by bor16 rower type, market segment, or geographic 

17 area; and 

18 ‘‘(D) for mortgages originated through 

19 State or local affordable or subsidized housing 

20 programs.’’; and 

21 (6) by adding at the end the following new sub22 section: 

23 ‘‘(c) EVALUATION AND REPORTING OF COMPLI24 ANCE.— 

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1 ‘‘(1) METHOD OF EVALUATION.—Not later 

2 than 6 months after the effective date of title I of 

3 the Federal Housing Enterprise Regulatory Reform 

4 Act of 2007, the Director shall establish a method 

5 for evaluating whether, and the extent to which, the 

6 enterprises have complied with the duty under sub7 section (a) to serve underserved markets and for rat8 ing the extent of such compliance. 

9 ‘‘(2) ANNUAL EVALUATIONS.—Using the meth10 od established under paragraph (1), the Director 

11 shall, for each year, evaluate such compliance and 

12 rate the performance of each enterprise as to the ex13 tent of compliance. The Director shall include such 

14 evaluation and rating for each enterprise for a year 

15 in the report for that year submitted pursuant to 

16 section 1319B(a). 

17 ‘‘(3) SEPARATE EVALUATIONS.—In determining 

18 whether an enterprise has complied with the duty 

19 under subsection (a), the Director shall separately 

20 evaluate whether the enterprise has complied with 

21 such duty with respect to each of the underserved 

22 markets identified in subsection (a), taking into con23 sideration— 

24 ‘‘(A) the development of loan products and 

25 more flexible underwriting guidelines; 

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1 ‘‘(B) the extent of outreach to qualified 

2 loan sellers in each of such underserved mar3 kets; and 

4 ‘‘(C) the volume of loans purchased in each 

5 of such underserved markets.’’. 

6 (b) ENFORCEMENT.—Section 1336(a) of the Federal 

7 Housing Enterprises Financial Safety and Soundness Act 

8 of 1992 (12 U.S.C. 4566(a)) is amended— 

9 (1) in paragraph (1), by inserting before the pe10 riod ‘‘and with the duty under section 1335A of 

11 each enterprise with respect to underserved mar12 kets’’; and 

13 (2) by adding at the end the following: 

14 ‘‘(4) ENFORCEMENT OF DUTY TO PROVIDE

15 MORTGAGE CREDIT TO UNDERSERVED MARKETS.— 

16 Compliance with the duty under section 1335(a) of 

17 each enterprise to serve underserved markets (as de18 termined in accordance with section 1335(c)) shall 

19 be enforceable under this section to the same extent 

20 and under the same provisions that the housing 

21 goals established under sections 1332, 1333, and 

22 1334 are enforceable. Such duty shall not be en23 forceable under any provision of this title (including 

24 subpart C), other than this section, or under any 

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1 tion Charter Act or the Federal Home Loan Mort2 gage Corporation Act, as applicable.’’. 

3 SEC. 129. HOME PURCHASE GOAL. 

4 The Federal Housing Enterprises Financial Safety 

5 and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is 

6 amended— 

7 (1) by inserting after section 1334 the fol8 lowing: 

9 ‘‘SEC. 1334A. HOME PURCHASE GOAL. 

10 ‘‘(a) ESTABLISHMENT.— 

11 ‘‘(1) IN GENERAL.—The Director shall establish 

12 an annual home purchase goal for the purchase by 

13 each enterprise of mortgage financing of owner-occu14 pied single family dwelling units. 

15 ‘‘(2) COMPONENTS.—The Director may, by reg16 ulation, establish components for the goal estab17 lished under paragraph (1) to include any or all of 

18 the following: 

19 ‘‘(A) First-time home buyers. 

20 ‘‘(B) Low- and moderate-income home 

21 buyers. 

22 ‘‘(C) Home buyers in central cities, rural 

23 areas, and other underserved areas. 

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1 ‘‘(D) Home buyers who obtain financing 

2 through State or local affordable or subsidized 

3 housing programs. 

4 ‘‘(3) OTHER AUTHORITY.—The Director may, 

5 by regulation, establish the goal under paragraph 

6 (1) with components as percentages of enterprise 

7 business, or by such other means as necessary to in8 crease the secondary market financing of mortgages 

9 by the enterprises for home purchases, consistent 

10 with the missions of the enterprises. 

11 ‘‘(4) ENFORCEABILITY.—The components of 

12 the goal established by the Director under para13 graph (1) shall be enforceable as goals under sub14 part C. 

15 ‘‘(b) FACTORS TO BE CONSIDERED.—In establishing 

16 the home purchase goal for an enterprise under this sec17 tion, the Director shall consider— 

18 ‘‘(1) national housing needs; 

19 ‘‘(2) economic, housing, and demographic condi20 tions; 

21 ‘‘(3) the performance and effort of the enter22 prises toward achieving the home purchase goal in 

23 previous years; 

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1 ‘‘(4) the size of the conventional mortgage mar2 ket serving home purchasers, relative to the size of 

3 the overall conventional mortgage market; 

4 ‘‘(5) the ability of the enterprises to lead the in5 dustry in making mortgage credit available for home 

6 purchasers; and 

7 ‘‘(6) the need to maintain the sound financial 

8 condition of the enterprises. 

9 ‘‘(c) TRANSITION.—In order to permit a transition 

10 to the establishment of the goal under this section, such 

11 goal shall not be effective or enforceable during the 1-year 

12 period beginning on the date of its establishment under 

13 subsection (a). 

14 ‘‘(d) IMPLEMENTATION DURING TRANSITION.—The 

15 Director shall establish, by rule, any requirements nec16 essary to implement the transition provisions under sub17 section (c), after providing the enterprises with an oppor18 tunity to review and comment not less than 30 days before 

19 the issuance of such notice. 

20 ‘‘SEC. 1334B HOUSING GOALS, ADDITIONS, MODIFICATIONS, 

21 AND RESCISSIONS. 

22 ‘‘(a) IN GENERAL.— 

23 ‘‘(1) AUTHORITY TO ADDRESS GOALS.—The Di24 rector may, by regulation, establish additional an25 nual housing goals, or modify or rescind existing 

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1 housing goals, to address national housing needs 

2 consistent with the missions, of the enterprises and 

3 the authorizing statutes, for the purchase of mort4 gages, if the Director determines, by regulation, that 

5 the housing need is greatest. 

6 ‘‘(2) METHODOLOGY.—The Director may issue 

7 a regulation which establishes or modifies any goal 

8 under this subsection— 

9 ‘‘(A) as a percentage of the mortgage pur10 chases of each enterprise; 

11 ‘‘(B) as a dollar amount of each enter12 prise’s mortgage purchases; or 

13 ‘‘(C) by such other means as necessary to 

14 increase the enterprises’ secondary market fi15 nancing of mortgages addressed by the goal. 

16 ‘‘(b) FACTORS TO BE CONSIDERED.—In establishing 

17 any additional goals under this section, the Director shall 

18 consider— 

19 ‘‘(1) national housing needs; 

20 ‘‘(2) economic, housing, and demographic condi21 tions; 

22 ‘‘(3) the performance and effort of the enter23 prises toward achieving the need addressed by any 

24 such additional goal in previous years; 

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1 ‘‘(4) the size of the conventional mortgage mar2 ket serving the need addressed by the goal, relative 

3 to the size of the overall conventional mortgage mar4 ket; 

5 ‘‘(5) the ability of the enterprises to lead the in6 dustry in making mortgage credit available to meet 

7 the need addressed by the goal; and 

8 ‘‘(6) the need to maintain the sound financial 

9 condition of the enterprises. 

10 ‘‘(c) TRANSITION.—In order to permit a transition 

11 to the establishment of any goal under this section, such 

12 goal shall not be effective or enforceable during the 1-year 

13 period beginning on the date of its establishment under 

14 subsection (a).’’; 

15 (2) in section 1335 (12 U.S.C. 4565(a)), by 

16 striking ‘‘meet the low-’’ and all that follows through 

17 ‘‘1334’’ and inserting ‘‘meet the goals under this 

18 subpart’’; 

19 (3) in section 1336 (12 U.S.C. 4566), by strik20 ing subsections (b) and (c) and inserting the fol21 lowing: 

22 ‘‘(b) NOTICE AND PRELIMINARY DETERMINATION OF

23 FAILURE TO MEET GOALS.— 

24 ‘‘(1) NOTICE.—If the Director preliminarily de25 termines that an enterprise has failed, or that there 

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1 is a substantial probability that an enterprise will 

2 fail, to meet any housing goal under this subpart, 

3 the Director shall provide written notice to the en4 terprise of such a preliminary determination, the 

5 reasons for such determination, and the information 

6 on which the Director based the determination. 

7 ‘‘(2) RESPONSE PERIOD.— 

8 ‘‘(A) IN GENERAL.—During the 30-day pe9 riod beginning on the date on which an enter10 prise is provided notice under paragraph (1), 

11 the enterprise may submit to the Director any 

12 written information that the enterprise con13 siders appropriate for consideration by the Di14 rector in finally determining whether such fail15 ure has occurred or whether the achievement of 

16 such goal was or is feasible. 

17 ‘‘(B) EXTENDED PERIOD.—The Director 

18 may extend the period under subparagraph (A) 

19 for good cause for not more than 30 additional 

20 days. 

21 ‘‘(C) SHORTENED PERIOD.—The Director 

22 may shorten the period under subparagraph (A) 

23 for good cause. 

24 ‘‘(D) FAILURE TO RESPOND.—The failure 

25 of an enterprise to provide information during 

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1 the 30-day period under this paragraph (as ex2 tended or shortened) shall waive any right of 

3 the enterprise to comment on the proposed de4 termination or action of the Director. 

5 ‘‘(3) CONSIDERATION OF INFORMATION AND

6 FINAL DETERMINATION.— 

7 ‘‘(A) IN GENERAL.—After the expiration of 

8 the response period under paragraph (2), or 

9 upon receipt of information provided during 

10 such period by the enterprise, whichever occurs 

11 earlier, the Director shall issue a final deter12 mination on— 

13 ‘‘(i) whether the enterprise has failed, 

14 or there is a substantial probability that 

15 the enterprise will fail, to meet the housing 

16 goal; and 

17 ‘‘(ii) whether (taking into consider18 ation market and economic conditions and 

19 the financial condition of the enterprise) 

20 the achievement of the housing goal was or 

21 is feasible. 

22 ‘‘(B) CONSIDERATIONS.—In making a 

23 final determination under subparagraph (A), 

24 the Director shall take into consideration any 

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1 relevant information submitted by the enter2 prise during the response period. 

3 ‘‘(C) NOTICE.—The Director shall provide 

4 written notice, including a response to any in5 formation submitted during the response period 

6 to the enterprise, the Committee on Banking, 

7 Housing, and Urban Affairs of the Senate, and 

8 the Committee on Financial Services of the 

9 House of Representatives, of— 

10 ‘‘(i) each final determination under 

11 this paragraph that an enterprise has 

12 failed, or that there is a substantial prob13 ability that the enterprise will fail, to meet 

14 a housing goal; 

15 ‘‘(ii) each final determination that the 

16 achievement of a housing goal was or is 

17 feasible; and 

18 ‘‘(iii) the reasons for each such final 

19 determination. 

20 ‘‘(c) CEASE AND DESIST, CIVIL MONEY PENALTIES, 

21 AND REMEDIES INCLUDING HOUSING PLANS.— 

22 ‘‘(1) REQUIREMENT.—If the Director finds, 

23 pursuant to subsection (b), that there is a substan24 tial probability that an enterprise will fail, or has ac25 tually failed, to meet any housing goal under this 

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1 subpart, and that the achievement of the housing 

2 goal was or is feasible, the Director may require that 

3 the enterprise submit a housing plan under this sub4 section. If the Director makes such a finding and 

5 the enterprise refuses to submit such a plan, sub6 mits an unacceptable plan, fails to comply with the 

7 plan, or the Director finds that the enterprise has 

8 failed to meet any housing goal under this subpart, 

9 in addition to requiring an enterprise to submit a 

10 housing plan, the Director may issue a cease and de11 sist order in accordance with section 1341, impose 

12 civil money penalties in accordance with section 

13 1345, or order other remedies as set forth in para14 graph (7). 

15 ‘‘(2) HOUSING PLAN.—If the Director requires 

16 a housing plan under this subsection, such a plan 

17 shall be— 

18 ‘‘(A) a feasible plan describing the specific 

19 actions the enterprise will take— 

20 ‘‘(i) to achieve the goal for the next 

21 calendar year; and 

22 ‘‘(ii) if the Director determines that 

23 there is a substantial probability that the 

24 enterprise will fail to meet a goal in the 

25 current year, to make such improvements 

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1 and changes in its operations as are rea2 sonable in the remainder of such year; and 

3 ‘‘(B) sufficiently specific to enable the Di4 rector to monitor compliance periodically. 

5 ‘‘(3) DEADLINE FOR SUBMISSION.—The Direc6 tor shall, by regulation, establish a deadline for an 

7 enterprise to comply with any remedial action or 

8 submit a housing plan to the Director, which may 

9 not be more than 45 days after the enterprise is pro10 vided notice. The regulations shall provide that the 

11 Director may extend the deadline to the extent that 

12 the Director determines necessary. Any extension of 

13 the deadline shall be in writing and for a time cer14 tain. 

15 ‘‘(4) APPROVAL.—The Director shall review 

16 each submission by an enterprise, including a hous17 ing plan submitted under this subsection, and, not 

18 later than 30 days after submission, approve or dis19 approve the plan or other action. The Director may 

20 extend the period for approval or disapproval for a 

21 single additional 30-day period if the Director deter22 mines it necessary. The Director shall approve any 

23 plan that the Director determines is likely to suc24 ceed, and conforms with the Federal National Mort25 gage Association Charter Act or the Federal Home 

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1 Loan Mortgage Corporation Act (as applicable), this 

2 title, and any other applicable provision of law. 

3 ‘‘(5) NOTICE OF APPROVAL AND DIS4 APPROVAL.—The Director shall provide written no5 tice to any enterprise submitting a housing plan of 

6 the approval or disapproval of the plan (which shall 

7 include the reasons for any disapproval of the plan) 

8 and of any extension of the period for approval or 

9 disapproval. 

10 ‘‘(6) RESUBMISSION.—If the initial housing 

11 plan submitted by an enterprise under this section 

12 is disapproved, the enterprise shall submit an 

13 amended plan acceptable to the Director not later 

14 than 30 days after such disapproval, or such longer 

15 period that the Director determines is in the public 

16 interest. 

17 ‘‘(7) ADDITIONAL REMEDIES FOR FAILURE TO

18 MEET GOALS.—In addition to ordering a housing 

19 plan under this section, issuing a cease and desist 

20 order under section 1341, and ordering civil money 

21 penalties under section 1345, the Director may seek 

22 other actions when an enterprise fails to meet a 

23 goal, including requesting that the Director exercise 

24 appropriate enforcement authority available to the 

25 Director under this title to prohibit the enterprise 

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1 from entering into new activities, to freeze any pend2 ing approval of new activities, and to order the en3 terprise to suspend activities pending its achieve4 ment of the goal.’’; 

5 (4) by striking section 1338 (12 U.S.C. 4568); 

6 (5) by striking from the heading of subpart C 

7 ‘‘of Housing Goals’’; 

8 (6) by striking section 1341 (12 U.S.C. 4581) 

9 and inserting the following: 

10 ‘‘SEC. 1341. CEASE-AND-DESIST PROCEEDINGS. 

11 ‘‘(a) GROUNDS FOR ISSUANCE.—The Director may 

12 issue and serve a notice of charges under this section upon 

13 an enterprise if the Director determines that— 

14 ‘‘(1) the enterprise has failed to meet any hous15 ing goal established under subpart B, following a 

16 written notice and determination of such failure in 

17 accordance with section 1336; 

18 ‘‘(2) the enterprise has failed to submit a report 

19 under section 1327, following a notice of such fail20 ure, an opportunity for comment by the enterprise, 

21 and a final determination by the Director; 

22 ‘‘(3) the enterprise has failed to submit the in23 formation required under subsection (m) or (n) of 

24 section 309 of the Federal National Mortgage Asso25 ciation Charter Act, subsection (e) or (f) of section 

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1 307 of the Federal Home Loan Mortgage Corpora2 tion Act, or section 1337 of this title; 

3 ‘‘(4) the enterprise has violated any provision of 

4 part 2 of this title or any order, rule, or regulation 

5 under part 2; 

6 ‘‘(5) the enterprise has failed to submit a hous7 ing plan or perform its responsibilities under a reme8 dial order that substantially complies with section 

9 1336(c) within the applicable period; or 

10 ‘‘(6) the enterprise has failed to comply with a 

11 housing plan under section 1336(c). 

12 ‘‘(b) PROCEDURE.— 

13 ‘‘(1) NOTICE OF CHARGES.—Each notice of 

14 charges issued under this section shall contain a 

15 statement of the facts constituting the alleged con16 duct and shall fix a time and place at which a hear17 ing will be held to determine on the record whether 

18 an order to cease and desist from such conduct 

19 should issue. 

20 ‘‘(2) ISSUANCE OF ORDER.—If the Director 

21 finds on the record made at a hearing described in 

22 paragraph (1) that any conduct specified in the no23 tice of charges has been established (or the enter24 prise consents pursuant to section 1342(a)(4)), the 

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1 Director may issue and serve upon the enterprise an 

2 order requiring the enterprise to— 

3 ‘‘(A) comply with the goals; 

4 ‘‘(B) submit a report under section 1327; 

5 ‘‘(C) comply with any provision of part 2 

6 of this title or any order, rule, or regulation 

7 under part 2; 

8 ‘‘(D) submit a housing plan in compliance 

9 with section 1336(c); 

10 ‘‘(E) comply with the housing plan in com11 pliance with section 1336(c); or 

12 ‘‘(F) provide the information required 

13 under subsection (m) or (n) of section 309 of 

14 the Federal National Mortgage Association 

15 Charter Act, or subsection (e) or (f) of section 

16 307 of the Federal Home Loan Mortgage Cor17 poration Act. 

18 ‘‘(c) EFFECTIVE DATE.—An order under this section 

19 shall become effective upon the expiration of the 30-day 

20 period beginning on the date of service of the order upon 

21 the enterprise (except in the case of an order issued upon 

22 consent, which shall become effective at the time specified 

23 therein), and shall remain effective and enforceable as pro24 vided in the order, except to the extent that the order is 

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1 stayed, modified, terminated, or set aside by action of the 

2 Director of or otherwise, as provided in this subpart.’’; and 

3 (7) by striking section 1345 and inserting the 

4 following: 

5 ‘‘SEC. 1345. CIVIL MONEY PENALTIES. 

6 ‘‘(a) AUTHORITY.—The Director may impose a civil 

7 money penalty, in accordance with the provisions of this 

8 section, on any enterprise that has failed to— 

9 ‘‘(1) meet any housing goal established under 

10 subpart B, following a written notice and determina11 tion of such failure in accordance with section 

12 1336(b); 

13 ‘‘(2) submit a report under section 1327, fol14 lowing a notice of such failure, an opportunity for 

15 comment by the enterprise, and a final determina16 tion by the Director; 

17 ‘‘(3) submit the information required under 

18 subsection (m) or (n) of section 309 of the Federal 

19 National Mortgage Association Charter Act or sub20 section (e) or (f) of section 307 of the Federal Home 

21 Loan Mortgage Corporation Act; 

22 ‘‘(4) comply with any provision of part 2 of this 

23 title or any order, rule, or regulation under part 2; 

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1 ‘‘(5) submit a housing plan or perform its re2 sponsibilities under a remedial order issued pursuant 

3 to section 1336(c) within the required period; or 

4 ‘‘(6) comply with a housing plan for the enter5 prise under section 1336(c). 

6 ‘‘(b) AMOUNT OF PENALTY.—The amount of a pen7 alty under this section, as determined by the Director, 

8 may not exceed— 

9 ‘‘(1) for any failure described in paragraph (1), 

10 (5), or (6) of subsection (a), $100,000 for each day 

11 that the failure occurs; and 

12 ‘‘(2) for any failure described in paragraph (2), 

13 (3), or (4) of subsection (a), $50,000 for each day 

14 that the failure occurs. 

15 ‘‘(c) PROCEDURES.— 

16 ‘‘(1) ESTABLISHMENT.—The Director shall es17 tablish standards and procedures governing the im18 position of civil money penalties under this section. 

19 Such standards and procedures— 

20 ‘‘(A) shall provide for the Director to no21 tify the enterprise in writing of the determina22 tion of the Director to impose the penalty, 

23 which shall be made on the record; 

24 ‘‘(B) shall provide for the imposition of a 

25 penalty only after the enterprise has been given 

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1 an opportunity for a hearing on the record pur2 suant to section 1342; and 

3 ‘‘(C) may provide for review by the Direc4 tor of any determination or order, or interlocu5 tory ruling, arising from a hearing. 

6 ‘‘(2) FACTORS IN DETERMINING AMOUNT OF

7 PENALTY.—In determining the amount of a penalty 

8 under this section, the Director shall give consider9 ation to factors including— 

10 ‘‘(A) the gravity of the offense; 

11 ‘‘(B) any history of prior offenses; 

12 ‘‘(C) ability to pay the penalty; 

13 ‘‘(D) injury to the public; 

14 ‘‘(E) benefits received; 

15 ‘‘(F) deterrence of future violations; 

16 ‘‘(G) the length of time that the enterprise 

17 should reasonably take to achieve the goal; and 

18 ‘‘(H) such other factors as the Director 

19 may determine, by regulation, to be appro20 priate. 

21 ‘‘(d) ACTION TO COLLECT PENALTY.—If an enter22 prise fails to comply with an order by the Director impos23 ing a civil money penalty under this section, after the 

24 order is no longer subject to review, as provided in sections 

25 1342 and 1343, the Director may request the Attorney 

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1 General of the United States to bring an action in the 

2 United States District Court for the District of Columbia 

3 to obtain a monetary judgment against the enterprise, and 

4 such other relief as may be available. The monetary judg5 ment may, in the court’s discretion, include the attorneys’ 

6 fees and other expenses incurred by the United States in 

7 connection with the action. In an action under this sub8 section, the validity and appropriateness of the order im9 posing the penalty shall not be subject to review. 

10 ‘‘(e) SETTLEMENT BY DIRECTOR.—The Director 

11 may compromise, modify, or remit any civil money penalty 

12 which may be, or has been, imposed under this section. 

13 ‘‘(f) DEPOSIT OF PENALTIES.—The Director shall 

14 deposit any civil money penalties collected under this sec15 tion into the General Fund of the Treasury.’’. 

16 Subtitle C—Prompt Corrective 

17 Action 

18 SEC. 141. CRITICAL CAPITAL LEVELS. 

19 Section 1363 of the Federal Housing Enterprises Fi20 nancial Safety and Soundness Act of 1992 (12 U.S.C. 

21 4613) is amended— 

22 (1) by redesignating paragraphs (1) through 

23 (3) as clauses (i) through (iii), respectively, and in24 denting appropriately; 

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1 (2) by striking ‘‘this subtitle, the critical capital 

2 level for each enterprise shall be the sum of—’’ and 

3 inserting the following: ‘‘this subtitle, the critical 

4 capital level— 

5 ‘‘(1) for each enterprise shall be— 

6 ‘‘(A) the sum of—’’; and 

7 (3) in paragraph (1)(A)(iii), as so designated by 

8 this section, by striking the period at the end and 

9 inserting the following: ‘‘; or 

10 ‘‘(B) such other level as the Director shall 

11 establish, by regulation; and 

12 ‘‘(2) for each Federal Home Loan Bank, shall 

13 be the level that the Director shall establish, by reg14 ulation.’’. 

15 SEC. 142. CAPITAL CLASSIFICATIONS. 

16 Section 1364 of the Federal Housing Enterprises Fi17 nancial Safety and Soundness Act of 1992 (12 U.S.C. 

18 4614) is amended— 

19 (1) in subsection (a)— 

20 (A) in paragraph (3)(A)— 

21 (i) by striking clause (i); and 

22 (ii) by redesignating clauses (ii) and 

23 (iii) as clauses (i) and (ii), respectively; 

24 and 

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1 (B) in paragraph (4)(A), by striking ‘‘en2 terprise—’’ and all that follows through ‘‘(ii) 

3 does’’ and inserting ‘‘enterprise does’’; 

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

5 following: 

6 ‘‘(b) DISCRETIONARY CLASSIFICATION.— 

7 ‘‘(1) GROUNDS FOR RECLASSIFICATION.—The 

8 Director may reclassify a regulated entity under 

9 paragraph (2) if— 

10 ‘‘(A) at any time, the Director determines 

11 in writing that a regulated entity is engaging in 

12 conduct that could result in a rapid depletion of 

13 core capital, or that the value of the property 

14 subject to mortgages held or securitized by an 

15 enterprise, or the value of collateral pledged as 

16 security, has decreased significantly; 

17 ‘‘(B) after notice and an opportunity for 

18 hearing, the Director determines that a regu19 lated entity is in an unsafe or unsound condi20 tion; or 

21 ‘‘(C) pursuant to section 1371(b), the Di22 rector determines that a regulated entity is en23 gaging in an unsafe or unsound practice. 

24 ‘‘(2) RECLASSIFICATION.—In addition to any 

25 other action authorized under this title, including 

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1 the reclassification of a regulated entity for any rea2 son not specified in this subsection, if the Director 

3 takes any action described in paragraph (1), the Di4 rector may reclassify a regulated entity— 

5 ‘‘(A) as ‘undercapitalized’, if the regulated 

6 entity is otherwise classified as adequately cap7 italized; 

8 ‘‘(B) as ‘significantly undercapitalized’, if 

9 the regulated entity is otherwise classified as 

10 undercapitalized; and 

11 ‘‘(C) as ‘critically undercapitalized’, if the 

12 regulated entity is otherwise classified as sig13 nificantly undercapitalized.’’; and 

14 (3) by striking subsection (d) and inserting the 

15 following: 

16 ‘‘(d) RESTRICTION ON CAPITAL DISTRIBUTIONS.— 

17 ‘‘(1) IN GENERAL.—A regulated entity shall 

18 make no capital distribution if, after making the dis19 tribution, the regulated entity would be under20 capitalized. 

21 ‘‘(2) EXCEPTION.—Notwithstanding paragraph 

22 (1), the Director may permit a regulated entity to 

23 repurchase, redeem, retire, or otherwise acquire 

24 shares or ownership interests if the repurchase, re25 demption, retirement, or other acquisition— 

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1 ‘‘(A) is made in connection with the 

2 issuance of additional shares or obligations of 

3 the regulated entity in at least an equivalent 

4 amount; and 

5 ‘‘(B) will reduce the financial obligations of 

6 the regulated entity or otherwise improve the fi7 nancial condition of the regulated entity.’’. 

8 SEC. 143. SUPERVISORY ACTIONS APPLICABLE TO UNDER9 CAPITALIZED REGULATED ENTITIES. 

10 Section 1365 of the Federal Housing Enterprises Fi11 nancial Safety and Soundness Act of 1992 (12 U.S.C. 

12 4615) is amended— 

13 (1) by striking ‘‘the enterprise’’ each place that 

14 term appears and inserting ‘‘the regulated entity’’; 

15 (2) by striking ‘‘An enterprise’’ each place that 

16 term appears and inserting ‘‘A regulated entity’’; 

17 (3) by striking ‘‘an enterprise’’ each place that 

18 term appears and inserting ‘‘a regulated entity’’; 

19 (4) in subsection (a)— 

20 (A) by redesignating paragraphs (1) and 

21 (2) as paragraphs (2) and (3), respectively; 

22 (B) by inserting before paragraph (2), as 

23 redesignated, the following: 

24 ‘‘(1) REQUIRED MONITORING.—The Director 

25 shall— 

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1 ‘‘(A) closely monitor the condition of any 

2 undercapitalized regulated entity; 

3 ‘‘(B) closely monitor compliance with the 

4 capital restoration plan, restrictions, and re5 quirements imposed on an undercapitalized reg6 ulated entity under this section; and 

7 ‘‘(C) periodically review the plan, restric8 tions, and requirements applicable to an under9 capitalized regulated entity to determine wheth10 er the plan, restrictions, and requirements are 

11 achieving the purpose of this section.’’; and 

12 (C) by adding at the end the following: 

13 ‘‘(4) RESTRICTION OF ASSET GROWTH.—An 

14 undercapitalized regulated entity shall not permit its 

15 average total assets during any calendar quarter to 

16 exceed its average total assets during the preceding 

17 calendar quarter, unless— 

18 ‘‘(A) the Director has accepted the capital 

19 restoration plan of the regulated entity; 

20 ‘‘(B) any increase in total assets is con21 sistent with the capital restoration plan; and 

22 ‘‘(C) the ratio of tangible equity to assets 

23 of the regulated entity increases during the cal24 endar quarter at a rate sufficient to enable the 

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1 regulated entity to become adequately capital2 ized within a reasonable time. 

3 ‘‘(5) PRIOR APPROVAL OF ACQUISITIONS AND

4 NEW ACTIVITIES.—An undercapitalized regulated en5 tity shall not, directly or indirectly, acquire any in6 terest in any entity or engage in any new activity, 

7 unless— 

8 ‘‘(A) the Director has accepted the capital 

9 restoration plan of the regulated entity, the reg10 ulated entity is implementing the plan, and the 

11 Director determines that the proposed action is 

12 consistent with and will further the achievement 

13 of the plan; or 

14 ‘‘(B) the Director determines that the pro15 posed action will further the purpose of this 

16 subtitle.’’; 

17 (5) in subsection (b)— 

18 (A) in the subsection heading, by striking 

19 ‘‘DISCRETIONARY’’; 

20 (B) in the matter preceding paragraph (1), 

21 by striking ‘‘may’’ and inserting ‘‘shall’’; and 

22 (C) in paragraph (2)— 

23 (i) by striking ‘‘make, in good faith, 

24 reasonable efforts necessary to’’; and 

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1 (ii) by striking the period at the end 

2 and inserting ‘‘in any material respect.’’; 

3 and 

4 (6) by striking subsection (c) and inserting the 

5 following: 

6 ‘‘(c) OTHER DISCRETIONARY SAFEGUARDS.—The 

7 Director may take, with respect to an undercapitalized 

8 regulated entity, any of the actions authorized to be taken 

9 under section 1366 with respect to a significantly under10 capitalized regulated entity, if the Director determines 

11 that such actions are necessary to carry out the purpose 

12 of this subtitle.’’. 

13 SEC. 144. SUPERVISORY ACTIONS APPLICABLE TO SIGNIFI14 CANTLY UNDERCAPITALIZED REGULATED 

15 ENTITIES. 

16 Section 1366 of the Federal Housing Enterprises Fi17 nancial Safety and Soundness Act of 1992 (12 U.S.C. 

18 4616) is amended— 

19 (1) in subsection (a)(2), by striking ‘‘under20 capitalized enterprise’’ and inserting ‘‘undercapital21 ized’’; 

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

23 term appears and inserting ‘‘the regulated entity’’; 

24 (3) by striking ‘‘An enterprise’’ each place that 

25 term appears and inserting ‘‘A regulated entity’’; 

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1 (4) by striking ‘‘an enterprise’’ each place that 

2 term appears and inserting ‘‘a regulated entity’’; 

3 (5) in subsection (b)— 

4 (A) in the subsection heading, by striking 

5 ‘‘DISCRETIONARY SUPERVISORY’’ and inserting 

6 ‘‘SPECIFIC’’; 

7 (B) in the matter preceding paragraph (1), 

8 by striking ‘‘may, at any time, take any’’ and 

9 inserting ‘‘shall carry out this section by taking, 

10 at any time, 1 or more’’; 

11 (C) by striking paragraph (6); 

12 (D) by redesignating paragraph (5) as 

13 paragraph (6); 

14 (E) by inserting after paragraph (4) the 

15 following: 

16 ‘‘(5) IMPROVEMENT OF MANAGEMENT.—Take 1 

17 or more of the following actions: 

18 ‘‘(A) NEW ELECTION OF BOARD.—Order a 

19 new election for the board of directors of the 

20 regulated entity. 

21 ‘‘(B) DISMISSAL OF DIRECTORS OR EXECU22 TIVE OFFICERS.—Require the regulated entity 

23 to dismiss from office any director or executive 

24 officer who had held office for more than 180 

25 days immediately before the date on which the 

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1 regulated entity became undercapitalized. Dis2 missal under this subparagraph shall not be 

3 construed to be a removal pursuant to the en4 forcement powers of the Director under section 

5 1377. 

6 ‘‘(C) EMPLOY QUALIFIED EXECUTIVE OF7 FICERS.—Require the regulated entity to em8 ploy qualified executive officers (who, if the Di9 rector so specifies, shall be subject to approval 

10 by the Director).’’; and 

11 (F) by adding at the end the following: 

12 ‘‘(7) OTHER ACTION.—Require the regulated 

13 entity to take any other action that the Director de14 termines will better carry out the purpose of this 

15 section than any of the other actions specified in this 

16 subsection.’’; and 

17 (6) by striking subsection (c) and inserting the 

18 following: 

19 ‘‘(c) RESTRICTION ON COMPENSATION OF EXECU20 TIVE OFFICERS.—A regulated entity that is classified as 

21 significantly undercapitalized in accordance with section 

22 1364 may not, without prior written approval by the Di23 rector— 

24 ‘‘(1) pay any bonus to any executive officer; or 

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1 ‘‘(2) provide compensation to any executive offi2 cer at a rate exceeding the average rate of com3 pensation of that officer (excluding bonuses, stock 

4 options, and profit sharing) during the 12 calendar 

5 months preceding the calendar month in which the 

6 regulated entity became significantly undercapital7 ized.’’. 

8 SEC. 145. AUTHORITY OVER CRITICALLY UNDERCAPITAL9 IZED REGULATED ENTITIES. 

10 (a) IN GENERAL.—Section 1367 of the Federal 

11 Housing Enterprises Financial Safety and Soundness Act 

12 of 1992 (12 U.S.C. 4617) is amended to read as follows: 

13 ‘‘SEC. 1367. AUTHORITY OVER CRITICALLY UNDERCAPITAL14 IZED REGULATED ENTITIES. 

15 ‘‘(a) APPOINTMENT OF THE AGENCY AS CONSER16 VATOR OR RECEIVER.— 

17 ‘‘(1) IN GENERAL.—Notwithstanding any other 

18 provision of Federal or State law, the Director may 

19 appoint the Agency as conservator or receiver for a 

20 regulated entity in the manner provided under para21 graph (2) or (4). All references to the conservator or 

22 receiver under this section are references to the 

23 Agency acting as conservator or receiver. 

24 ‘‘(2) DISCRETIONARY APPOINTMENT.—The 

25 Agency may, at the discretion of the Director, be apmmaher on PRODPC74 with BILLS

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1 pointed conservator or receiver for the purpose of re2 organizing, rehabilitating, or winding up the affairs 

3 of a regulated entity. 

4 ‘‘(3) GROUNDS FOR DISCRETIONARY APPOINT5 MENT OF CONSERVATOR OR RECEIVER.—The 

6 grounds for appointing conservator or receiver for 

7 any regulated entity under paragraph (2) are as fol8 lows: 

9 ‘‘(A) SUBSTANTIAL DISSIPATION.—Sub10 stantial dissipation of assets or earnings due 

11 to— 

12 ‘‘(i) any violation of any provision of 

13 Federal or State law; or 

14 ‘‘(ii) any unsafe or unsound practice. 

15 ‘‘(B) UNSAFE OR UNSOUND CONDITION.— 

16 An unsafe or unsound condition to transact 

17 business. 

18 ‘‘(C) CEASE-AND-DESIST ORDERS.—Any 

19 willful violation of a cease-and-desist order that 

20 has become final. 

21 ‘‘(D) CONCEALMENT.—Any concealment of 

22 the books, papers, records, or assets of the reg23 ulated entity, or any refusal to submit the 

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1 lated entity, for inspection to any examiner or 

2 to any lawful agent of the Director. 

3 ‘‘(E) INABILITY TO MEET OBLIGATIONS.— 

4 The regulated entity is likely to be unable to 

5 pay its obligations or meet the demands of its 

6 creditors in the normal course of business. 

7 ‘‘(F) LOSSES.—The regulated entity has 

8 incurred or is likely to incur losses that will de9 plete all or substantially all of its capital, and 

10 there is no reasonable prospect for the regu11 lated entity to become adequately capitalized 

12 (as defined in section 1364(a)(1)). 

13 ‘‘(G) VIOLATIONS OF LAW.—Any violation 

14 of any law or regulation, or any unsafe or un15 sound practice or condition that is likely to— 

16 ‘‘(i) cause insolvency or substantial 

17 dissipation of assets or earnings; or 

18 ‘‘(ii) weaken the condition of the regu19 lated entity. 

20 ‘‘(H) CONSENT.—The regulated entity, by 

21 resolution of its board of directors or its share22 holders or members, consents to the appoint23 ment. 

24 ‘‘(I) UNDERCAPITALIZATION.—The regu25 lated entity is undercapitalized or significantly 

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1 undercapitalized (as defined in section 

2 1364(a)(3)), and— 

3 ‘‘(i) has no reasonable prospect of be4 coming adequately capitalized; 

5 ‘‘(ii) fails to become adequately cap6 italized, as required by— 

7 ‘‘(I) section 1365(a)(1) with re8 spect to a regulated entity; or 

9 ‘‘(II) section 1366(a)(1) with re10 spect to a significantly undercapital11 ized regulated entity; 

12 ‘‘(iii) fails to submit a capital restora13 tion plan acceptable to the Agency within 

14 the time prescribed under section 1369C; 

15 or 

16 ‘‘(iv) materially fails to implement a 

17 capital restoration plan submitted and ac18 cepted under section 1369C. 

19 ‘‘(J) CRITICAL UNDERCAPITALIZATION.— 

20 The regulated entity is critically undercapital21 ized, as defined in section 1364(a)(4). 

22 ‘‘(K) MONEY LAUNDERING.—The Attorney 

23 General notifies the Director in writing that the 

24 regulated entity has been found guilty of a 

25 criminal offense under section 1956 or 1957 of 

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1 title 18, United States Code, or section 5322 or 

2 5324 of title 31, United States Code. 

3 ‘‘(4) MANDATORY RECEIVERSHIP.— 

4 ‘‘(A) IN GENERAL.—The Director shall ap5 point the Agency as receiver for a regulated en6 tity if the Director determines, in writing, 

7 that— 

8 ‘‘(i) the assets of the regulated entity 

9 are, and during the preceding 30 calendar 

10 days have been, less than the obligations of 

11 the regulated entity to its creditors and 

12 others; or 

13 ‘‘(ii) the regulated entity is not, and 

14 during the preceding 30 calendar days has 

15 not been, generally paying the debts of the 

16 regulated entity (other than debts that are 

17 the subject of a bona fide dispute) as such 

18 debts become due. 

19 ‘‘(B) PERIODIC DETERMINATION RE20 QUIRED FOR CRITICALLY UNDERCAPITALIZED

21 REGULATED ENTITY.—If a regulated entity is 

22 critically undercapitalized, the Director shall 

23 make a determination, in writing, as to whether 

24 the regulated entity meets the criteria specified 

25 in clause (i) or (ii) of subparagraph (A)— 

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1 ‘‘(i) not later than 30 calendar days 

2 after the regulated entity initially becomes 

3 critically undercapitalized; and 

4 ‘‘(ii) at least once during each suc5 ceeding 30-calendar day period. 

6 ‘‘(C) DETERMINATION NOT REQUIRED IF

7 RECEIVERSHIP ALREADY IN PLACE.—Subpara8 graph (B) does not apply with respect to a reg9 ulated entity in any period during which the 

10 Agency serves as receiver for the regulated enti11 ty. 

12 ‘‘(D) RECEIVERSHIP TERMINATES CON13 SERVATORSHIP.—The appointment of the Agen14 cy as receiver of a regulated entity under this 

15 section shall immediately terminate any con16 servatorship established for the regulated entity 

17 under this title. 

18 ‘‘(5) 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 

22 of such appointment, bring an action in the 

23 United States district court for the judicial dis24 trict in which the home office of such regulated 

25 entity is located, or in the United States Dismmaher on PRODPC74 with BILLS

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1 trict Court for the District of Columbia, for an 

2 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 ‘‘(6) DIRECTORS NOT LIABLE FOR ACQUI10 ESCING IN APPOINTMENT OF CONSERVATOR OR RE11 CEIVER.—The members of the board of directors of 

12 a regulated entity shall not be liable to the share13 holders or creditors of the regulated entity for acqui14 escing in or consenting in good faith to the appoint15 ment of the Agency as conservator or receiver for 

16 that regulated entity. 

17 ‘‘(7) AGENCY NOT SUBJECT TO ANY OTHER

18 FEDERAL AGENCY.—When acting as conservator or 

19 receiver, the Agency shall not be subject to the di20 rection or supervision of any other agency of the 

21 United States or any State in the exercise of the 

22 rights, powers, and privileges of the Agency. 

23 ‘‘(b) POWERS AND DUTIES OF THE AGENCY AS CON24 SERVATOR OR RECEIVER.— 

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1 ‘‘(1) RULEMAKING AUTHORITY OF THE AGEN2 CY.—The Agency may prescribe such regulations as 

3 the Agency determines to be appropriate regarding 

4 the conduct of conservatorships or receiverships. 

5 ‘‘(2) GENERAL POWERS.— 

6 ‘‘(A) SUCCESSOR TO REGULATED ENTI7 TY.—The Agency shall, as conservator or re8 ceiver, and by operation of law, immediately 

9 succeed to— 

10 ‘‘(i) all rights, titles, powers, and 

11 privileges of the regulated entity, and of 

12 any stockholder, officer, or director of such 

13 regulated entity with respect to the regu14 lated entity and the assets of the regulated 

15 entity; and 

16 ‘‘(ii) title to the books, records, and 

17 assets of any other legal custodian of such 

18 regulated entity. 

19 ‘‘(B) OPERATE THE REGULATED ENTI20 TY.—The Agency may, as conservator or re21 ceiver— 

22 ‘‘(i) take over the assets of and oper23 ate the regulated entity with all the powers 

24 of the shareholders, the directors, and the 

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1 officers of the regulated entity and conduct 

2 all business of the regulated entity; 

3 ‘‘(ii) collect all obligations and money 

4 due the regulated entity; 

5 ‘‘(iii) perform all functions of the reg6 ulated entity in the name of the regulated 

7 entity which are consistent with the ap8 pointment as conservator or receiver; 

9 ‘‘(iv) preserve and conserve the assets 

10 and property of the regulated entity; and 

11 ‘‘(v) provide by contract for assistance 

12 in fulfilling any function, activity, action, 

13 or duty of the Agency as conservator or re14 ceiver. 

15 ‘‘(C) FUNCTIONS OF OFFICERS, DIREC16 TORS, AND SHAREHOLDERS OF A REGULATED

17 ENTITY.—The Agency may, by regulation or 

18 order, provide for the exercise of any function 

19 by any stockholder, director, or officer of any 

20 regulated entity for which the Agency has been 

21 named conservator or receiver. 

22 ‘‘(D) POWERS AS CONSERVATOR.—The 

23 Agency may, as conservator, take such action 

24 as may be— 

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1 ‘‘(i) necessary to put the regulated en2 tity in a sound and solvent condition; and 

3 ‘‘(ii) appropriate to carry on the busi4 ness of the regulated entity and preserve 

5 and conserve the assets and property of 

6 the regulated entity. 

7 ‘‘(E) ADDITIONAL POWERS AS RE8 CEIVER.—In any case in which the Agency is 

9 acting as receiver, the Agency shall place the 

10 regulated entity in liquidation and proceed to 

11 realize upon the assets of the regulated entity 

12 in such manner as the Agency deems appro13 priate, including through the sale of assets, the 

14 transfer of assets to a limited-life regulated en15 tity established under subsection (i), or the ex16 ercise of any other rights or privileges granted 

17 to the Agency under this paragraph. 

18 ‘‘(F) ORGANIZATION OF NEW ENTER19 PRISE.—The Agency shall, as receiver for an 

20 enterprise, organize a successor enterprise that 

21 will operate pursuant to subsection (i). 

22 ‘‘(G) TRANSFER OR SALE OF ASSETS AND

23 LIABILITIES.—The Agency may, as conservator 

24 or receiver, transfer or sell any asset or liability 

25 of the regulated entity in default, and may do 

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1 so without any approval, assignment, or consent 

2 with respect to such transfer or sale. 

3 ‘‘(H) PAYMENT OF VALID OBLIGATIONS.— 

4 The Agency, as conservator or receiver, shall, to 

5 the extent of proceeds realized from the per6 formance of contracts or sale of the assets of a 

7 regulated entity, pay all valid obligations of the 

8 regulated entity that are due and payable at the 

9 time of the appointment of the Agency as con10 servator or receiver, in accordance with the pre11 scriptions and limitations of this section. 

12 ‘‘(I) SUBPOENA AUTHORITY.— 

13 ‘‘(i) IN GENERAL.— 

14 ‘‘(I) AGENCY AUTHORITY.—The 

15 Agency may, as conservator or re16 ceiver, and for purposes of carrying 

17 out any power, authority, or duty with 

18 respect to a regulated entity (includ19 ing determining any claim against the 

20 regulated entity and determining and 

21 realizing upon any asset of any person 

22 in the course of collecting money due 

23 the regulated entity), exercise any 

24 power established under section 1348. 

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1 ‘‘(II) APPLICABILITY OF LAW.— 

2 The provisions of section 1348 shall 

3 apply with respect to the exercise of 

4 any power under this subparagraph, 

5 in the same manner as such provi6 sions apply under that section. 

7 ‘‘(ii) SUBPOENA.—A subpoena or sub8 poena duces tecum may be issued under 

9 clause (i) only by, or with the written ap10 proval of, the Director, or the designee of 

11 the Director. 

12 ‘‘(iii) RULE OF CONSTRUCTION.—This 

13 subsection shall not be construed to limit 

14 any rights that the Agency, in any capac15 ity, might otherwise have under section 

16 1317 or 1379B. 

17 ‘‘(J) INCIDENTAL POWERS.—The Agency 

18 may, as conservator or receiver— 

19 ‘‘(i) exercise all powers and authori20 ties specifically granted to conservators or 

21 receivers, respectively, under this section, 

22 and such incidental powers as shall be nec23 essary to carry out such powers; and 

24 ‘‘(ii) take any action authorized by 

25 this section, which the Agency determines 

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1 is in the best interests of the regulated en2 tity or the Agency. 

3 ‘‘(K) OTHER PROVISIONS.— 

4 ‘‘(i) SHAREHOLDERS AND CREDITORS

5 OF FAILED REGULATED ENTITY.—Not6 withstanding any other provision of law, 

7 the appointment of the Agency as receiver 

8 for a regulated entity pursuant to para9 graph (2) or (4) of subsection (a) and its 

10 succession, by operation of law, to the 

11 rights, titles, powers, and privileges de12 scribed in subsection (b)(2)(A) shall termi13 nate all rights and claims that the stock14 holders and creditors of the regulated enti15 ty may have against the assets or charter 

16 of the regulated entity or the Agency aris17 ing as a result of their status as stock18 holders or creditors, except for their right 

19 to payment, resolution, or other satisfac20 tion of their claims, as permitted under 

21 subsections (b)(9), (c), and (e). 

22 ‘‘(ii) ASSETS OF REGULATED ENTI23 TY.—Notwithstanding any other provision 

24 of law, for purposes of this section, the 

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1 charter of a regulated entity shall not be 

2 considered an asset of the regulated entity. 

3 ‘‘(3) AUTHORITY OF RECEIVER TO DETERMINE

4 CLAIMS.— 

5 ‘‘(A) IN GENERAL.—The Agency may, as 

6 receiver, determine claims in accordance with 

7 the requirements of this subsection and any 

8 regulations prescribed under paragraph (4). 

9 ‘‘(B) NOTICE REQUIREMENTS.—The re10 ceiver, in any case involving the liquidation or 

11 winding up of the affairs of a closed regulated 

12 entity, shall— 

13 ‘‘(i) promptly publish a notice to the 

14 creditors of the regulated entity to present 

15 their claims, together with proof, to the re16 ceiver by a date specified in the notice 

17 which shall be not less than 90 days after 

18 the date of publication of such notice; and 

19 ‘‘(ii) republish such notice approxi20 mately 1 month and 2 months, respec21 tively, after the date of publication under 

22 clause (i). 

23 ‘‘(C) MAILING REQUIRED.—The receiver 

24 shall mail a notice similar to the notice pub25 lished under subparagraph (B)(i) at the time of 

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1 such publication to any creditor shown on the 

2 books of the regulated entity— 

3 ‘‘(i) at the last address of the creditor 

4 appearing in such books; or 

5 ‘‘(ii) upon discovery of the name and 

6 address of a claimant not appearing on the 

7 books of the regulated entity, within 30 

8 days after the discovery of such name and 

9 address. 

10 ‘‘(4) RULEMAKING AUTHORITY RELATING TO

11 DETERMINATION OF CLAIMS.—Subject to subsection 

12 (c), the Director may prescribe regulations regarding 

13 the allowance or disallowance of claims by the re14 ceiver and providing for administrative determina15 tion of claims and review of such determination. 

16 ‘‘(5) PROCEDURES FOR DETERMINATION OF

17 CLAIMS.— 

18 ‘‘(A) DETERMINATION PERIOD.— 

19 ‘‘(i) IN GENERAL.—Before the end of 

20 the 180-day period beginning on the date 

21 on which any claim against a regulated en22 tity is filed with the Agency as receiver, 

23 the Agency shall determine whether to 

24 allow or disallow the claim and shall notify 

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1 the claimant of any determination with re2 spect to such claim. 

3 ‘‘(ii) EXTENSION OF TIME.—The pe4 riod described in clause (i) may be ex5 tended by a written agreement between the 

6 claimant and the Agency. 

7 ‘‘(iii) MAILING OF NOTICE SUFFI8 CIENT.—The requirements of clause (i) 

9 shall be deemed to be satisfied if the notice 

10 of any determination with respect to any 

11 claim is mailed to the last address of the 

12 claimant which appears— 

13 ‘‘(I) on the books of the regu14 lated entity; 

15 ‘‘(II) in the claim filed by the 

16 claimant; or 

17 ‘‘(III) in documents submitted in 

18 proof of the claim. 

19 ‘‘(iv) CONTENTS OF NOTICE OF DIS20 ALLOWANCE.—If any claim filed under 

21 clause (i) is disallowed, the notice to the 

22 claimant shall contain— 

23 ‘‘(I) a statement of each reason 

24 for the disallowance; and 

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1 ‘‘(II) the procedures available for 

2 obtaining agency review of the deter3 mination to disallow the claim or judi4 cial determination of the claim. 

5 ‘‘(B) ALLOWANCE OF PROVEN CLAIM.— 

6 The receiver shall allow any claim received on 

7 or before the date specified in the notice pub8 lished under paragraph (3)(B)(i) by the receiver 

9 from any claimant which is proved to the satis10 faction of the receiver. 

11 ‘‘(C) DISALLOWANCE OF CLAIMS FILED

12 AFTER FILING PERIOD.—Claims filed after the 

13 date specified in the notice published under 

14 paragraph (3)(B)(i), or the date specified under 

15 paragraph (3)(C), shall be disallowed and such 

16 disallowance shall be final. 

17 ‘‘(D) AUTHORITY TO DISALLOW CLAIMS.— 

18 ‘‘(i) IN GENERAL.—The receiver may 

19 disallow any portion of any claim by a 

20 creditor or claim of security, preference, or 

21 priority which is not proved to the satisfac22 tion of the receiver. 

23 ‘‘(ii) PAYMENTS TO LESS THAN

24 FULLY SECURED CREDITORS.—In the case 

25 of a claim of a creditor against a regulated 

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1 entity which is secured by any property or 

2 other asset of such regulated entity, the re3 ceiver— 

4 ‘‘(I) may treat the portion of 

5 such claim which exceeds an amount 

6 equal to the fair market value of such 

7 property or other asset as an unse8 cured claim against the regulated en9 tity; and 

10 ‘‘(II) may not make any payment 

11 with respect to such unsecured por12 tion of the claim, other than in con13 nection with the disposition of all 

14 claims of unsecured creditors of the 

15 regulated entity. 

16 ‘‘(iii) EXCEPTIONS.—No provision of 

17 this paragraph shall apply with respect 

18 to— 

19 ‘‘(I) any extension of credit from 

20 any Federal Reserve Bank or the 

21 United States Treasury; or 

22 ‘‘(II) any security interest in the 

23 assets of the regulated entity securing 

24 any such extension of credit. 

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1 ‘‘(E) NO JUDICIAL REVIEW OF DETER2 MINATION PURSUANT TO SUBPARAGRAPH (d).— 

3 No court may review the determination of the 

4 Agency under subparagraph (D) to disallow a 

5 claim. 

6 ‘‘(F) LEGAL EFFECT OF FILING.— 

7 ‘‘(i) STATUTE OF LIMITATION

8 TOLLED.—For purposes of any applicable 

9 statute of limitations, the filing of a claim 

10 with the receiver shall constitute a com11 mencement of an action. 

12 ‘‘(ii) NO PREJUDICE TO OTHER AC13 TIONS.—Subject to paragraph (10), the fil14 ing of a claim with the receiver shall not 

15 prejudice any right of the claimant to con16 tinue any action which was filed before the 

17 date of the appointment of the receiver, 

18 subject to the determination of claims by 

19 the receiver. 

20 ‘‘(6) PROVISION FOR JUDICIAL DETERMINATION

21 OF CLAIMS.— 

22 ‘‘(A) IN GENERAL.—The claimant may file 

23 suit on a claim (or continue an action com24 menced before the appointment of the receiver) 

25 in the district or territorial court of the United 

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1 States for the district within which the prin2 cipal place of business of the regulated entity is 

3 located or the United States District Court for 

4 the District of Columbia (and such court shall 

5 have jurisdiction to hear such claim), before the 

6 end of the 60-day period beginning on the ear7 lier of— 

8 ‘‘(i) the end of the period described in 

9 paragraph (5)(A)(i) with respect to any 

10 claim against a regulated entity for which 

11 the Agency is receiver; or 

12 ‘‘(ii) the date of any notice of dis13 allowance of such claim pursuant to para14 graph (5)(A)(i). 

15 ‘‘(B) STATUTE OF LIMITATIONS.—A claim 

16 shall be deemed to be disallowed (other than 

17 any portion of such claim which was allowed by 

18 the receiver), and such disallowance shall be 

19 final, and the claimant shall have no further 

20 rights or remedies with respect to such claim, 

21 if the claimant fails, before the end of the 60- 

22 day period described under subparagraph (A), 

23 to file suit on such claim (or continue an action 

24 commenced before the appointment of the re25 ceiver). 

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1 ‘‘(7) REVIEW OF CLAIMS.— 

2 ‘‘(A) OTHER REVIEW PROCEDURES.— 

3 ‘‘(i) IN GENERAL.—The Agency shall 

4 establish such alternative dispute resolu5 tion processes as may be appropriate for 

6 the resolution of claims filed under para7 graph (5)(A)(i). 

8 ‘‘(ii) CRITERIA.—In establishing alter9 native dispute resolution processes, the 

10 Agency shall strive for procedures which 

11 are expeditious, fair, independent, and low 

12 cost. 

13 ‘‘(iii) VOLUNTARY BINDING OR NON14 BINDING PROCEDURES.—The Agency may 

15 establish both binding and nonbinding 

16 processes under this subparagraph, which 

17 may be conducted by any government or 

18 private party. All parties, including the 

19 claimant and the Agency, must agree to 

20 the use of the process in a particular case. 

21 ‘‘(B) CONSIDERATION OF INCENTIVES.— 

22 The Agency shall seek to develop incentives for 

23 claimants to participate in the alternative dis24 pute resolution process. 

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1 ‘‘(8) EXPEDITED DETERMINATION OF

2 CLAIMS.— 

3 ‘‘(A) ESTABLISHMENT REQUIRED.—The 

4 Agency shall establish a procedure for expedited 

5 relief outside of the routine claims process es6 tablished under paragraph (5) for claimants 

7 who— 

8 ‘‘(i) allege the existence of legally 

9 valid and enforceable or perfected security 

10 interests in assets of any regulated entity 

11 for which the Agency has been appointed 

12 receiver; and 

13 ‘‘(ii) allege that irreparable injury will 

14 occur if the routine claims procedure is fol15 lowed. 

16 ‘‘(B) DETERMINATION PERIOD.—Before 

17 the end of the 90-day period beginning on the 

18 date on which any claim is filed in accordance 

19 with the procedures established under subpara20 graph (A), the Director shall— 

21 ‘‘(i) determine— 

22 ‘‘(I) whether to allow or disallow 

23 such claim; or 

24 ‘‘(II) whether such claim should 

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1 dures established under paragraph 

2 (5); and 

3 ‘‘(ii) notify the claimant of the deter4 mination, and if the claim is disallowed, 

5 provide a statement of each reason for the 

6 disallowance and the procedure for obtain7 ing agency review or judicial determina8 tion. 

9 ‘‘(C) PERIOD FOR FILING OR RENEWING

10 SUIT.—Any claimant who files a request for ex11 pedited relief shall be permitted to file a suit, 

12 or to continue a suit filed before the date of ap13 pointment of the receiver, seeking a determina14 tion of the rights of the claimant with respect 

15 to such security interest after the earlier of— 

16 ‘‘(i) the end of the 90-day period be17 ginning on the date of the filing of a re18 quest for expedited relief; or 

19 ‘‘(ii) the date on which the Agency de20 nies the claim. 

21 ‘‘(D) STATUTE OF LIMITATIONS.—If an 

22 action described under subparagraph (C) is not 

23 filed, or the motion to renew a previously filed 

24 suit is not made, before the end of the 30-day 

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1 tion or motion may be filed under subparagraph 

2 (B), the claim shall be deemed to be disallowed 

3 as of the end of such period (other than any 

4 portion of such claim which was allowed by the 

5 receiver), such disallowance shall be final, and 

6 the claimant shall have no further rights or 

7 remedies with respect to such claim. 

8 ‘‘(E) LEGAL EFFECT OF FILING.— 

9 ‘‘(i) STATUTE OF LIMITATION

10 TOLLED.—For purposes of any applicable 

11 statute of limitations, the filing of a claim 

12 with the receiver shall constitute a com13 mencement of an action. 

14 ‘‘(ii) NO PREJUDICE TO OTHER AC15 TIONS.—Subject to paragraph (10), the fil16 ing of a claim with the receiver shall not 

17 prejudice any right of the claimant to con18 tinue any action that was filed before the 

19 appointment of the receiver, subject to the 

20 determination of claims by the receiver. 

21 ‘‘(9) PAYMENT OF CLAIMS.— 

22 ‘‘(A) IN GENERAL.—The receiver may, in 

23 the discretion of the receiver, and to the extent 

24 that funds are available from the assets of the 

25 regulated entity, pay creditor claims, in such 

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1 manner and amounts as are authorized under 

2 this section, which are— 

3 ‘‘(i) allowed by the receiver; 

4 ‘‘(ii) approved by the Agency pursuant 

5 to a final determination pursuant to para6 graph (7) or (8); or 

7 ‘‘(iii) determined by the final judg8 ment of any court of competent jurisdic9 tion. 

10 ‘‘(B) AGREEMENTS AGAINST THE INTER11 EST OF THE AGENCY.—No agreement that 

12 tends to diminish or defeat the interest of the 

13 Agency in any asset acquired by the Agency as 

14 receiver under this section shall be valid against 

15 the Agency unless such agreement is in writing 

16 and executed by an authorized officer or rep17 resentative of the regulated entity. 

18 ‘‘(C) PAYMENT OF DIVIDENDS ON

19 CLAIMS.—The receiver may, in the sole discre20 tion of the receiver, pay from the assets of the 

21 regulated entity dividends on proved claims at 

22 any time, and no liability shall attach to the 

23 Agency by reason of any such payment, for fail24 ure to pay dividends to a claimant whose claim 

25 is not proved at the time of any such payment. 

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1 ‘‘(D) RULEMAKING AUTHORITY OF THE

2 DIRECTOR.—The Director may prescribe such 

3 rules, including definitions of terms, as the Di4 rector deems appropriate to establish a single 

5 uniform interest rate for, or to make payments 

6 of post-insolvency interest to creditors holding 

7 proven claims against the receivership estates of 

8 regulated entity, following satisfaction by the 

9 receiver of the principal amount of all creditor 

10 claims. 

11 ‘‘(10) SUSPENSION OF LEGAL ACTIONS.— 

12 ‘‘(A) IN GENERAL.—After the appointment 

13 of a conservator or receiver for a regulated enti14 ty, the conservator or receiver may, in any judi15 cial action or proceeding to which such regu16 lated entity is or becomes a party, request a 

17 stay for a period not to exceed— 

18 ‘‘(i) 45 days, in the case of any con19 servator; and 

20 ‘‘(ii) 90 days, in the case of any re21 ceiver. 

22 ‘‘(B) GRANT OF STAY BY ALL COURTS RE23 QUIRED.—Upon receipt of a request by the con24 servator or receiver under subparagraph (A) for 

25 a stay of any judicial action or proceeding in 

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1 any court with jurisdiction of such action or 

2 proceeding, the court shall grant such stay as 

3 to all parties. 

4 ‘‘(11) ADDITIONAL RIGHTS AND DUTIES.— 

5 ‘‘(A) PRIOR FINAL ADJUDICATION.—The 

6 Agency shall abide by any final unappealable 

7 judgment of any court of competent jurisdiction 

8 which was rendered before the appointment of 

9 the Agency as conservator or receiver. 

10 ‘‘(B) RIGHTS AND REMEDIES OF CONSER11 VATOR OR RECEIVER.—In the event of any ap12 pealable judgment, the Agency as conservator 

13 or receiver— 

14 ‘‘(i) shall have all of the rights and 

15 remedies available to the regulated entity 

16 (before the appointment of such conser17 vator or receiver) and the Agency, includ18 ing removal to Federal court and all appel19 late rights; and 

20 ‘‘(ii) shall not be required to post any 

21 bond in order to pursue such remedies. 

22 ‘‘(C) NO ATTACHMENT OR EXECUTION.— 

23 No attachment or execution may issue by any 

24 court upon assets in the possession of the re25 ceiver, or upon the charter, of a regulated entimmaher on PRODPC74 with BILLS

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1 ty for which the Agency has been appointed re2 ceiver. 

3 ‘‘(D) LIMITATION ON JUDICIAL REVIEW.— 

4 Except as otherwise provided in this subsection, 

5 no court shall have jurisdiction over— 

6 ‘‘(i) any claim or action for payment 

7 from, or any action seeking a determina8 tion of rights with respect to, the assets or 

9 charter of any regulated entity for which 

10 the Agency has been appointed receiver; or 

11 ‘‘(ii) any claim relating to any act or 

12 omission of such regulated entity or the 

13 Agency as receiver. 

14 ‘‘(E) DISPOSITION OF ASSETS.—In exer15 cising any right, power, privilege, or authority 

16 as conservator or receiver in connection with 

17 any sale or disposition of assets of a regulated 

18 entity for which the Agency has been appointed 

19 conservator or receiver, the Agency shall con20 duct its operations in a manner which— 

21 ‘‘(i) maximizes the net present value 

22 return from the sale or disposition of such 

23 assets; 

24 ‘‘(ii) minimizes the amount of any loss 

25 realized in the resolution of cases; and 

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1 ‘‘(iii) ensures adequate competition 

2 and fair and consistent treatment of 

3 offerors. 

4 ‘‘(12) STATUTE OF LIMITATIONS FOR ACTIONS

5 BROUGHT BY CONSERVATOR OR RECEIVER.— 

6 ‘‘(A) IN GENERAL.—Notwithstanding any 

7 provision of any contract, the applicable statute 

8 of limitations with regard to any action brought 

9 by the Agency as conservator or receiver shall 

10 be— 

11 ‘‘(i) in the case of any contract claim, 

12 the longer of— 

13 ‘‘(I) the 6-year period beginning 

14 on the date on which the claim ac15 crues; or 

16 ‘‘(II) the period applicable under 

17 State law; and 

18 ‘‘(ii) in the case of any tort claim, the 

19 longer of— 

20 ‘‘(I) the 3-year period beginning 

21 on the date on which the claim ac22 crues; or 

23 ‘‘(II) the period applicable under 

24 State law. 

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1 ‘‘(B) DETERMINATION OF THE DATE ON

2 WHICH A CLAIM ACCRUES.—For purposes of 

3 subparagraph (A), the date on which the stat4 ute of limitations begins to run on any claim 

5 described in such subparagraph shall be the 

6 later of— 

7 ‘‘(i) the date of the appointment of 

8 the Agency as conservator or receiver; or 

9 ‘‘(ii) the date on which the cause of 

10 action accrues. 

11 ‘‘(13) REVIVAL OF EXPIRED STATE CAUSES OF

12 ACTION.— 

13 ‘‘(A) IN GENERAL.—In the case of any tort 

14 claim described under subparagraph (B) for 

15 which the statute of limitations applicable 

16 under State law with respect to such claim has 

17 expired not more than 5 years before the ap18 pointment of the Agency as conservator or re19 ceiver, the Agency may bring an action as con20 servator or receiver on such claim without re21 gard to the expiration of the statute of limita22 tions applicable under State law. 

23 ‘‘(B) CLAIMS DESCRIBED.—A tort claim 

24 referred to under subparagraph (A) is a claim 

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1 sulting in unjust enrichment, or intentional mis2 conduct resulting in substantial loss to the reg3 ulated entity. 

4 ‘‘(14) ACCOUNTING AND RECORDKEEPING RE5 QUIREMENTS.— 

6 ‘‘(A) IN GENERAL.—The Agency as conser7 vator or receiver shall, consistent with the ac8 counting and reporting practices and proce9 dures established by the Agency, maintain a full 

10 accounting of each conservatorship and receiv11 ership or other disposition of a regulated entity 

12 in default. 

13 ‘‘(B) ANNUAL ACCOUNTING OR REPORT.— 

14 With respect to each conservatorship or receiv15 ership, the Agency shall make an annual ac16 counting or report available to the Board, the 

17 Comptroller General of the United States, the 

18 Committee on Banking, Housing, and Urban 

19 Affairs of the Senate, and the Committee on 

20 Financial Services of the House of Representa21 tives. 

22 ‘‘(C) AVAILABILITY OF REPORTS.—Any re23 port prepared under subparagraph (B) shall be 

24 made available by the Agency upon request to 

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1 any shareholder of a regulated entity or any 

2 member of the public. 

3 ‘‘(D) RECORDKEEPING REQUIREMENT.— 

4 After the end of the 6-year period beginning on 

5 the date on which the conservatorship or receiv6 ership is terminated by the Director, the Agen7 cy may destroy any records of such regulated 

8 entity which the Agency, in the discretion of the 

9 Agency, determines to be unnecessary, unless 

10 directed not to do so by a court of competent 

11 jurisdiction or governmental agency, or prohib12 ited by law. 

13 ‘‘(15) FRAUDULENT TRANSFERS.— 

14 ‘‘(A) IN GENERAL.—The Agency, as con15 servator or receiver, may avoid a transfer of 

16 any interest of an entity-affiliated party, or any 

17 person determined by the conservator or re18 ceiver to be a debtor of the regulated entity, in 

19 property, or any obligation incurred by such 

20 party or person, that was made within 5 years 

21 of the date on which the Agency was appointed 

22 conservator or receiver, if such party or person 

23 voluntarily or involuntarily made such transfer 

24 or incurred such liability with the intent to 

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1 hinder, delay, or defraud the regulated entity, 

2 the Agency, the conservator, or receiver. 

3 ‘‘(B) RIGHT OF RECOVERY.—To the extent 

4 a transfer is avoided under subparagraph (A), 

5 the conservator or receiver may recover, for the 

6 benefit of the regulated entity, the property 

7 transferred, or, if a court so orders, the value 

8 of such property (at the time of such transfer) 

9 from— 

10 ‘‘(i) the initial transferee of such 

11 transfer or the entity-affiliated party or 

12 person for whose benefit such transfer was 

13 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 

20 value, including satisfaction or securing of 

21 a present or antecedent debt, in good faith; 

22 or 

23 ‘‘(ii) any immediate or mediate good 

24 faith transferee of such transferee. 

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1 ‘‘(D) RIGHTS UNDER THIS PARAGRAPH.— 

2 The rights under this paragraph of the conser3 vator or receiver described under subparagraph 

4 (A) shall be superior to any rights of a trustee 

5 or any other party (other than any party which 

6 is a Federal agency) under title 11, United 

7 States Code. 

8 ‘‘(16) ATTACHMENT OF ASSETS AND OTHER IN9 JUNCTIVE RELIEF.—Subject to paragraph (17), any 

10 court of competent jurisdiction may, at the request 

11 of the conservator or receiver, issue an order in ac12 cordance with Rule 65 of the Federal Rules of Civil 

13 Procedure, including an order placing the assets of 

14 any person designated by the conservator or receiver 

15 under the control of the court, and appointing a 

16 trustee to hold such assets. 

17 ‘‘(17) STANDARDS OF PROOF.—Rule 65 of the 

18 Federal Rules of Civil Procedure shall apply with re19 spect to any proceeding under paragraph (16) with20 out regard to the requirement of such rule that the 

21 applicant show that the injury, loss, or damage is ir22 reparable and immediate. 

23 ‘‘(18) TREATMENT OF CLAIMS ARISING FROM

24 BREACH OF CONTRACTS EXECUTED BY THE CON25 SERVATOR OR RECEIVER.— 

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1 ‘‘(A) IN GENERAL.—Notwithstanding any 

2 other provision of this subsection, any final and 

3 unappealable judgment for monetary damages 

4 entered against the conservator or receiver for 

5 the breach of an agreement executed or ap6 proved in writing by the conservator or receiver 

7 after the date of its appointment, shall be paid 

8 as an administrative expense of the conservator 

9 or receiver. 

10 ‘‘(B) NO LIMITATION OF POWER.—Nothing 

11 in this paragraph shall be construed to limit the 

12 power of the conservator or receiver to exercise 

13 any rights under contract or law, including to 

14 terminate, breach, cancel, or otherwise dis15 continue such agreement. 

16 ‘‘(19) GENERAL EXCEPTIONS.— 

17 ‘‘(A) LIMITATIONS.—The rights of the 

18 conservator or receiver appointed under this 

19 section shall be subject to the limitations on the 

20 powers of a receiver under sections 402 through 

21 407 of the Federal Deposit Insurance Corpora22 tion Improvement Act of 1991 (12 U.S.C. 4402 

23 through 4407). 

24 ‘‘(B) MORTGAGES HELD IN TRUST.— 

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1 ‘‘(i) IN GENERAL.—Any mortgage, 

2 pool of mortgages, or interest in a pool of 

3 mortgages held in trust, custodial, or agen4 cy capacity by an enterprise for the benefit 

5 of any person other than the enterprise 

6 shall not be available to satisfy the claims 

7 of creditors generally. 

8 ‘‘(ii) HOLDING OF MORTGAGES.—Any 

9 mortgage, pool of mortgages, or interest in 

10 a pool of mortgages described in clause (i) 

11 shall be held by the conservator or receiver 

12 appointed under this section for the bene13 ficial owners of such mortgage, pool of 

14 mortgages, or interest in accordance with 

15 the terms of the agreement creating such 

16 trust, custodial, or other agency arrange17 ment. 

18 ‘‘(iii) LIABILITY OF CONSERVATOR OR

19 RECEIVER.—The liability of the conser20 vator or receiver appointed under this sec21 tion for damages shall, in the case of any 

22 contingent or unliquidated claim relating 

23 to the mortgages held in trust, be esti24 mated in accordance with in the regula25 tions of the Director. 

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1 ‘‘(c) PRIORITY OF EXPENSES AND UNSECURED

2 CLAIMS.— 

3 ‘‘(1) IN GENERAL.—Unsecured claims against a 

4 regulated entity, or the receiver therefor, that are 

5 proven to the satisfaction of the receiver shall have 

6 priority in the following order: 

7 ‘‘(A) Administrative expenses of the re8 ceiver. 

9 ‘‘(B) Any other general or senior liability 

10 of the regulated entity (which is not a liability 

11 described under subparagraph (C) or (D). 

12 ‘‘(C) Any obligation subordinated to gen13 eral creditors (which is not an obligation de14 scribed under subparagraph (D)). 

15 ‘‘(D) Any obligation to shareholders or 

16 members arising as a result of their status as 

17 shareholder or members. 

18 ‘‘(2) CREDITORS SIMILARLY SITUATED.—All 

19 creditors that are similarly situated under paragraph 

20 (1) shall be treated in a similar manner, except that 

21 the receiver may take any action (including making 

22 payments) that does not comply with this subsection, 

23 if— 

24 ‘‘(A) the Director determines that such ac25 tion is necessary to maximize the value of the 

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1 assets of the regulated entity, to maximize the 

2 present value return from the sale or other dis3 position of the assets of the regulated entity, or 

4 to minimize the amount of any loss realized 

5 upon the sale or other disposition of the assets 

6 of the regulated entity assets; and 

7 ‘‘(B) all creditors that are similarly situ8 ated under paragraph (1) receive not less than 

9 the amount provided in subsection (e)(2). 

10 ‘‘(3) DEFINITION.—As used in this subsection, 

11 the term ‘administrative expenses of the receiver’ in12 cludes— 

13 ‘‘(A) the actual, necessary costs and ex14 penses incurred by the receiver in preserving 

15 the assets of a failed regulated entity or liqui16 dating or otherwise resolving the affairs of a 

17 failed regulated entity; and 

18 ‘‘(B) any obligations that the receiver de19 termines are necessary and appropriate to fa20 cilitate the smooth and orderly liquidation or 

21 other resolution of the regulated entity. 

22 ‘‘(d) PROVISIONS RELATING TO CONTRACTS EN23 TERED INTO BEFORE APPOINTMENT OF CONSERVATOR

24 OR RECEIVER.— 

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1 ‘‘(1) AUTHORITY TO REPUDIATE CONTRACTS.— 

2 In addition to any other rights a conservator or re3 ceiver may have, the conservator or receiver for any 

4 regulated entity may disaffirm or repudiate any con5 tract or lease— 

6 ‘‘(A) to which such regulated entity is a 

7 party; 

8 ‘‘(B) the performance of which the conser9 vator or receiver, in its sole discretion, deter10 mines to be burdensome; and 

11 ‘‘(C) the disaffirmance or repudiation of 

12 which the conservator or receiver determines, in 

13 its sole discretion, will promote the orderly ad14 ministration of the affairs of the regulated enti15 ty. 

16 ‘‘(2) TIMING OF REPUDIATION.—The conser17 vator or receiver shall determine whether or not to 

18 exercise the rights of repudiation under this sub19 section within a reasonable period following such ap20 pointment. 

21 ‘‘(3) CLAIMS FOR DAMAGES FOR REPUDI22 ATION.— 

23 ‘‘(A) IN GENERAL.—Except as otherwise 

24 provided under subparagraph (C) and para25 graphs (4), (5), and (6), the liability of the conmmaher on PRODPC74 with BILLS

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1 servator or receiver for the disaffirmance or re2 pudiation of any contract pursuant to para3 graph (1) shall be— 

4 ‘‘(i) limited to actual direct compen5 satory damages; and 

6 ‘‘(ii) determined as of— 

7 ‘‘(I) the date of the appointment 

8 of the conservator or receiver; or 

9 ‘‘(II) in the case of any contract 

10 or agreement referred to in paragraph 

11 (8), the date of the disaffirmance or 

12 repudiation of such contract or agree13 ment. 

14 ‘‘(B) NO LIABILITY FOR OTHER DAM15 AGES.—For purposes of subparagraph (A), the 

16 term ‘actual direct compensatory damages’ shall 

17 not include— 

18 ‘‘(i) punitive or exemplary damages; 

19 ‘‘(ii) damages for lost profits or op20 portunity; or 

21 ‘‘(iii) damages for pain and suffering. 

22 ‘‘(C) MEASURE OF DAMAGES FOR REPUDI23 ATION OF FINANCIAL CONTRACTS.—In the case 

24 of any qualified financial contract or agreement 

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1 to which paragraph (8) applies, compensatory 

2 damages shall be— 

3 ‘‘(i) deemed to include normal and 

4 reasonable costs of cover or other reason5 able measures of damages utilized in the 

6 industries for such contract and agreement 

7 claims; and 

8 ‘‘(ii) paid in accordance with this sub9 section and subsection (e), except as other10 wise specifically provided in this section. 

11 ‘‘(4) LEASES UNDER WHICH THE REGULATED

12 ENTITY IS THE LESSEE.— 

13 ‘‘(A) IN GENERAL.—If the conservator or 

14 receiver disaffirms or repudiates a lease under 

15 which the regulated entity was the lessee, the 

16 conservator or receiver shall not be liable for 

17 any damages (other than damages determined 

18 under subparagraph (B)) for the disaffirmance 

19 or repudiation of such lease. 

20 ‘‘(B) PAYMENTS OF RENT.—Notwith21 standing subparagraph (A), the lessor under a 

22 lease to which that subparagraph applies 

23 shall— 

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1 ‘‘(i) be entitled to the contractual rent 

2 accruing before the later of the date on 

3 which— 

4 ‘‘(I) the notice of disaffirmance 

5 or repudiation is mailed; or 

6 ‘‘(II) the disaffirmance or repudi7 ation becomes effective, unless the les8 sor is in default or breach of the 

9 terms of the lease; 

10 ‘‘(ii) have no claim for damages under 

11 any acceleration clause or other penalty 

12 provision in the lease; and 

13 ‘‘(iii) have a claim for any unpaid 

14 rent, subject to all appropriate offsets and 

15 defenses, due as of the date of the appoint16 ment, which shall be paid in accordance 

17 with this subsection and subsection (e). 

18 ‘‘(5) LEASES UNDER WHICH THE REGULATED

19 ENTITY IS THE LESSOR.— 

20 ‘‘(A) IN GENERAL.—If the conservator or 

21 receiver repudiates an unexpired written lease 

22 of real property of the regulated entity under 

23 which the regulated entity is the lessor and the 

24 lessee is not, as of the date of such repudiation, 

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1 in default, the lessee under such lease may ei2 ther— 

3 ‘‘(i) treat the lease as terminated by 

4 such repudiation; or 

5 ‘‘(ii) remain in possession of the lease6 hold interest for the balance of the term of 

7 the lease, unless the lessee defaults under 

8 the terms of the lease after the date of 

9 such repudiation. 

10 ‘‘(B) PROVISIONS APPLICABLE TO LESSEE

11 REMAINING IN POSSESSION.—If any lessee 

12 under a lease described under subparagraph (A) 

13 remains in possession of a leasehold interest 

14 under clause (ii) of subparagraph (A)— 

15 ‘‘(i) the lessee— 

16 ‘‘(I) shall continue to pay the 

17 contractual rent pursuant to the 

18 terms of the lease after the date of 

19 the repudiation of such lease; and 

20 ‘‘(II) may offset against any rent 

21 payment which accrues after the date 

22 of the repudiation of the lease, and 

23 any damages which accrue after such 

24 date due to the nonperformance of 

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1 any obligation of the regulated entity 

2 under the lease after such date; and 

3 ‘‘(ii) the conservator or receiver shall 

4 not be liable to the lessee for any damages 

5 arising after such date as a result of the 

6 repudiation, other than the amount of any 

7 offset allowed under clause (i)(II). 

8 ‘‘(6) CONTRACTS FOR THE SALE OF REAL

9 PROPERTY.— 

10 ‘‘(A) IN GENERAL.—If the conservator or 

11 receiver repudiates any contract for the sale of 

12 real property and the purchaser of such real 

13 property under such contract is in possession, 

14 and is not, as of the date of such repudiation, 

15 in default, such purchaser may either— 

16 ‘‘(i) treat the contract as terminated 

17 by such repudiation; or 

18 ‘‘(ii) remain in possession of such real 

19 property. 

20 ‘‘(B) PROVISIONS APPLICABLE TO PUR21 CHASER REMAINING IN POSSESSION.—If any 

22 purchaser of real property under any contract 

23 described under subparagraph (A) remains in 

24 possession of such property under clause (ii) of 

25 subparagraph (A)— 

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1 ‘‘(i) the purchaser— 

2 ‘‘(I) shall continue to make all 

3 payments due under the contract after 

4 the date of the repudiation of the con5 tract; and 

6 ‘‘(II) may offset against any such 

7 payments any damages which accrue 

8 after such date due to the non9 performance (after such date) of any 

10 obligation of the regulated entity 

11 under the contract; and 

12 ‘‘(ii) the conservator or receiver 

13 shall— 

14 ‘‘(I) not be liable to the pur15 chaser for any damages arising after 

16 such date as a result of the repudi17 ation, other than the amount of any 

18 offset allowed under clause (i)(II); 

19 ‘‘(II) deliver title to the pur20 chaser in accordance with the provi21 sions of the contract; and 

22 ‘‘(III) have no obligation under 

23 the contract other than the perform24 ance required under subclause (II). 

25 ‘‘(C) ASSIGNMENT AND SALE ALLOWED.— 

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1 ‘‘(i) IN GENERAL.—No provision of 

2 this paragraph shall be construed as lim3 iting the right of the conservator or re4 ceiver to assign the contract described 

5 under subparagraph (A), and sell the prop6 erty subject to the contract and the provi7 sions of this paragraph. 

8 ‘‘(ii) NO LIABILITY AFTER ASSIGN9 MENT AND SALE.—If an assignment and 

10 sale described under clause (i) is con11 summated, the conservator or receiver 

12 shall have no further liability under the 

13 contract described under subparagraph 

14 (A), or with respect to the real property 

15 which was the subject of such contract. 

16 ‘‘(7) SERVICE CONTRACTS.— 

17 ‘‘(A) SERVICES PERFORMED BEFORE AP18 POINTMENT.—In the case of any contract for 

19 services between any person and any regulated 

20 entity for which the Agency has been appointed 

21 conservator or receiver, any claim of such per22 son for services performed before the appoint23 ment of the conservator or receiver shall be— 

24 ‘‘(i) a claim to be paid in accordance 

25 with subsections (b) and (e); and 

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1 ‘‘(ii) deemed to have arisen as of the 

2 date on which the conservator or receiver 

3 was appointed. 

4 ‘‘(B) SERVICES PERFORMED AFTER AP5 POINTMENT AND PRIOR TO REPUDIATION.—If, 

6 in the case of any contract for services de7 scribed under subparagraph (A), the conser8 vator or receiver accepts performance by the 

9 other person before the conservator or receiver 

10 makes any determination to exercise the right 

11 of repudiation of such contract under this sec12 tion— 

13 ‘‘(i) the other party shall be paid 

14 under the terms of the contract for the 

15 services performed; and 

16 ‘‘(ii) the amount of such payment 

17 shall be treated as an administrative ex18 pense of the conservatorship or receiver19 ship. 

20 ‘‘(C) ACCEPTANCE OF PERFORMANCE NO

21 BAR TO SUBSEQUENT REPUDIATION.—The ac22 ceptance by the conservator or receiver of serv23 ices referred to under subparagraph (B) in con24 nection with a contract described in such sub25 paragraph shall not affect the right of the conmmaher on PRODPC74 with BILLS

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1 servator or receiver to repudiate such contract 

2 under this section at any time after such per3 formance. 

4 ‘‘(8) CERTAIN QUALIFIED FINANCIAL CON5 TRACTS.— 

6 ‘‘(A) RIGHTS OF PARTIES TO CON7 TRACTS.—Subject to paragraphs (9) and (10), 

8 and notwithstanding any other provision of this 

9 title (other than subsection (b)(9)(B) of this 

10 section), any other Federal law, or the law of 

11 any State, no person shall be stayed or prohib12 ited from exercising— 

13 ‘‘(i) any right of that person to cause 

14 the termination, liquidation, or acceleration 

15 of any qualified financial contract with a 

16 regulated entity that arises upon the ap17 pointment of the Agency as receiver for 

18 such regulated entity at any time after 

19 such appointment; 

20 ‘‘(ii) any right under any security 

21 agreement or arrangement or other credit 

22 enhancement relating to one or more quali23 fied financial contracts; or 

24 ‘‘(iii) any right to offset or net out 

25 any termination value, payment amount, or 

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1 other transfer obligation arising under or 

2 in connection with 1 or more contracts and 

3 agreements described in clause (i), includ4 ing any master agreement for such con5 tracts or agreements. 

6 ‘‘(B) APPLICABILITY OF OTHER PROVI7 SIONS.—Subsection (b)(10) shall apply in the 

8 case of any judicial action or proceeding 

9 brought against any receiver referred to under 

10 subparagraph (A), or the regulated entity for 

11 which such receiver was appointed, by any 

12 party to a contract or agreement described 

13 under subparagraph (A)(i) with such regulated 

14 entity. 

15 ‘‘(C) CERTAIN TRANSFERS NOT AVOID16 ABLE.— 

17 ‘‘(i) IN GENERAL.—Notwithstanding 

18 paragraph (11), or any other provision of 

19 Federal or State law relating to the avoid20 ance of preferential or fraudulent trans21 fers, the Agency, whether acting as such or 

22 as conservator or receiver of a regulated 

23 entity, may not avoid any transfer of 

24 money or other property in connection with 

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1 any qualified financial contract with a reg2 ulated entity. 

3 ‘‘(ii) EXCEPTION FOR CERTAIN

4 TRANSFERS.—Clause (i) shall not apply to 

5 any transfer of money or other property in 

6 connection with any qualified financial con7 tract with a regulated entity if the Agency 

8 determines that the transferee had actual 

9 intent to hinder, delay, or defraud such 

10 regulated entity, the creditors of such reg11 ulated entity, or any conservator or re12 ceiver appointed for such regulated entity. 

13 ‘‘(D) CERTAIN CONTRACTS AND AGREE14 MENTS DEFINED.—In this subsection the fol15 lowing definitions shall apply: 

16 ‘‘(i) QUALIFIED FINANCIAL CON17 TRACT.—The term ‘qualified financial con18 tract’ means any securities contract, com19 modity contract, forward contract, repur20 chase agreement, swap agreement, and any 

21 similar agreement that the Agency deter22 mines by regulation, resolution, or order to 

23 be a qualified financial contract for pur24 poses of this paragraph. 

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1 ‘‘(ii) SECURITIES CONTRACT.—The 

2 term ‘securities contract’— 

3 ‘‘(I) means a contract for the 

4 purchase, sale, or loan of a security, a 

5 certificate of deposit, a mortgage loan, 

6 or any interest in a mortgage loan, a 

7 group or index of securities, certifi8 cates of deposit, or mortgage loans or 

9 interests therein (including any inter10 est therein or based on the value 

11 thereof) or any option on any of the 

12 foregoing, including any option to 

13 purchase or sell any such security, 

14 certificate of deposit, mortgage loan, 

15 interest, group or index, or option, 

16 and including any repurchase or re17 verse repurchase transaction on any 

18 such security, certificate of deposit, 

19 mortgage loan, interest, group or 

20 index, or option; 

21 ‘‘(II) does not include any pur22 chase, sale, or repurchase obligation 

23 under a participation in a commercial 

24 mortgage loan, unless the Agency de25 termines by regulation, resolution, or 

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1 order to include any such agreement 

2 within the meaning of such term; 

3 ‘‘(III) means any option entered 

4 into on a national securities exchange 

5 relating to foreign currencies; 

6 ‘‘(IV) means the guarantee by or 

7 to any securities clearing agency of 

8 any settlement of cash, securities, cer9 tificates of deposit, mortgage loans or 

10 interests therein, group or index of se11 curities, certificates of deposit, or 

12 mortgage loans or interests therein 

13 (including any interest therein or 

14 based on the value thereof) or option 

15 on any of the foregoing, including any 

16 option to purchase or sell any such se17 curity, certificate of deposit, mortgage 

18 loan, interest, group or index, or op19 tion; 

20 ‘‘(V) means any margin loan; 

21 ‘‘(VI) means any other agree22 ment or transaction that is similar to 

23 any agreement or transaction referred 

24 to in this clause; 

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1 ‘‘(VII) means any combination of 

2 the agreements or transactions re3 ferred to in this clause; 

4 ‘‘(VIII) means any option to 

5 enter into any agreement or trans6 action referred to in this clause; 

7 ‘‘(IX) means a master agreement 

8 that provides for an agreement or 

9 transaction referred to in subclause 

10 (I), (III), (IV), (V), (VI), (VII), or 

11 (VIII), together with all supplements 

12 to any such master agreement, with13 out regard to whether the master 

14 agreement provides for an agreement 

15 or transaction that is not a securities 

16 contract under this clause, except that 

17 the master agreement shall be consid18 ered to be a securities contract under 

19 this clause only with respect to each 

20 agreement or transaction under the 

21 master agreement that is referred to 

22 in subclause (I), (III), (IV), (V), (VI), 

23 (VII), or (VIII); and 

24 ‘‘(X) means any security agree25 ment or arrangement or other credit 

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1 enhancement related to any agree2 ment or transaction referred to in this 

3 clause, including any guarantee or re4 imbursement obligation in connection 

5 with any agreement or transaction re6 ferred to in this clause. 

7 ‘‘(iii) COMMODITY CONTRACT.—The 

8 term ‘commodity contract’ means— 

9 ‘‘(I) with respect to a futures 

10 commission merchant, a contract for 

11 the purchase or sale of a commodity 

12 for future delivery on, or subject to 

13 the rules of, a contract market or 

14 board of trade; 

15 ‘‘(II) with respect to a foreign fu16 tures commission merchant, a foreign 

17 future; 

18 ‘‘(III) with respect to a leverage 

19 transaction merchant, a leverage 

20 transaction; 

21 ‘‘(IV) with respect to a clearing 

22 organization, a contract for the pur23 chase or sale of a commodity for fu24 ture delivery on, or subject to the 

25 rules of, a contract market or board 

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1 of trade that is cleared by such clear2 ing organization, or commodity option 

3 traded on, or subject to the rules of, 

4 a contract market or board of trade 

5 that is cleared by such clearing orga6 nization; 

7 ‘‘(V) with respect to a commodity 

8 options dealer, a commodity option; 

9 ‘‘(VI) any other agreement or 

10 transaction that is similar to any 

11 agreement or transaction referred to 

12 in this clause; 

13 ‘‘(VII) any combination of the 

14 agreements or transactions referred to 

15 in this clause; 

16 ‘‘(VIII) any option to enter into 

17 any agreement or transaction referred 

18 to in this clause; 

19 ‘‘(IX) a master agreement that 

20 provides for an agreement or trans21 action referred to in subclause (I), 

22 (II), (III), (IV), (V), (VI), (VII), or 

23 (VIII), together with all supplements 

24 to any such master agreement, with25 out regard to whether the master 

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1 agreement provides for an agreement 

2 or transaction that is not a com3 modity contract under this clause, ex4 cept that the master agreement shall 

5 be considered to be a commodity con6 tract under this clause only with re7 spect to each agreement or trans8 action under the master agreement 

9 that is referred to in subclause (I), 

10 (II), (III), (IV), (V), (VI), (VII), or 

11 (VIII); or 

12 ‘‘(X) any security agreement or 

13 arrangement or other credit enhance14 ment related to any agreement or 

15 transaction referred to in this clause, 

16 including any guarantee or reimburse17 ment obligation in connection with 

18 any agreement or transaction referred 

19 to in this clause. 

20 ‘‘(iv) FORWARD CONTRACT.—The 

21 term ‘forward contract’ means— 

22 ‘‘(I) a contract (other than a 

23 commodity contract) for the purchase, 

24 sale, or transfer of a commodity or 

25 any similar good, article, service, 

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1 right, or interest which is presently or 

2 in the future becomes the subject of 

3 dealing in the forward contract trade, 

4 or product or byproduct thereof, with 

5 a maturity date more than 2 days 

6 after the date on which the contract is 

7 entered into, including a repurchase 

8 transaction, reverse repurchase trans9 action, consignment, lease, swap, 

10 hedge transaction, deposit, loan, op11 tion, allocated transaction, unallocated 

12 transaction, or any other similar 

13 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 

9 in 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 

14 (I), (II), (III), or (IV), including any 

15 guarantee or reimbursement obliga16 tion in connection with any agreement 

17 or transaction referred to in any such 

18 subclause. 

19 ‘‘(v) REPURCHASE AGREEMENT.—The 

20 term ‘repurchase agreement’ (including a 

21 reverse repurchase agreement)— 

22 ‘‘(I) means an agreement, includ23 ing related terms, which provides for 

24 the transfer of one or more certifi25 cates of deposit, mortgage-related semmaher on PRODPC74 with BILLS

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1 curities (as such term is defined in 

2 section 3 of the Securities Exchange 

3 Act of 1934), mortgage loans, inter4 ests in mortgage-related securities or 

5 mortgage loans, eligible bankers’ ac6 ceptances, qualified foreign govern7 ment securities (defined for purposes 

8 of this clause as a security that is a 

9 direct obligation of, or that is fully 

10 guaranteed by, the central government 

11 of a member of the Organization for 

12 Economic Cooperation and Develop13 ment, as determined by regulation or 

14 order adopted by the appropriate Fed15 eral banking authority), or securities 

16 that are direct obligations of, or that 

17 are fully guaranteed by, the United 

18 States or any agency of the United 

19 States against the transfer of funds 

20 by the transferee of such certificates 

21 of deposit, eligible bankers’ accept22 ances, securities, mortgage loans, or 

23 interests with a simultaneous agree24 ment by such transferee to transfer to 

25 the transferor thereof certificates of 

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1 deposit, eligible bankers’ acceptances, 

2 securities, mortgage loans, or interests 

3 as described above, at a date certain 

4 not later than 1 year after such trans5 fers or on demand, against the trans6 fer of funds, or any other similar 

7 agreement; 

8 ‘‘(II) does not include any repur9 chase obligation under a participation 

10 in a commercial mortgage loan, unless 

11 the Agency determines by regulation, 

12 resolution, or order to include any 

13 such participation within the meaning 

14 of such term; 

15 ‘‘(III) means any combination of 

16 agreements or transactions referred to 

17 in subclauses (I) and (IV); 

18 ‘‘(IV) means any option to enter 

19 into any agreement or transaction re20 ferred to in subclause (I) or (III); 

21 ‘‘(V) means a master agreement 

22 that provides for an agreement or 

23 transaction referred to in subclause 

24 (I), (III), or (IV), together with all 

25 supplements to any such master 

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1 agreement, without regard to whether 

2 the master agreement provides for an 

3 agreement or transaction that is not a 

4 repurchase agreement under this 

5 clause, except that the master agree6 ment shall be considered to be a re7 purchase agreement under this sub8 clause only with respect to each agree9 ment or transaction under the master 

10 agreement that is referred to in sub11 clause (I), (III), or (IV); and 

12 ‘‘(VI) means any security agree13 ment or arrangement or other credit 

14 enhancement related to any agree15 ment or transaction referred to in 

16 subclause (I), (III), (IV), or (V), in17 cluding any guarantee or reimburse18 ment obligation in connection with 

19 any agreement or transaction referred 

20 to in any such subclause. 

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, 

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1 which is an interest rate swap, option, 

2 future, or forward agreement, includ3 ing a rate floor, rate cap, rate collar, 

4 cross-currency rate swap, and basis 

5 swap; a spot, same day-tomorrow, to6 morrow-next, forward, or other for7 eign exchange or precious metals 

8 agreement; a currency swap, option, 

9 future, or forward agreement; an eq10 uity index or equity swap, option, fu11 ture, or forward agreement; a debt 

12 index or debt swap, option, future, or 

13 forward agreement; a total return, 

14 credit spread or credit swap, option, 

15 future, or forward agreement; a com16 modity index or commodity swap, op17 tion, future, or forward agreement; or 

18 a weather swap, weather derivative, or 

19 weather option; 

20 ‘‘(II) any agreement or trans21 action that is similar to any other 

22 agreement or transaction referred to 

23 in this clause and that is of a type 

24 that has been, is presently, or in the 

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1 rent dealings in the swap markets (in2 cluding terms and conditions incor3 porated by reference in such agree4 ment) and that is a forward, swap, fu5 ture, or option on one or more rates, 

6 currencies, commodities, equity securi7 ties or other equity instruments, debt 

8 securities or other debt instruments, 

9 quantitative measures associated with 

10 an occurrence, extent of an occur11 rence, or contingency associated with 

12 a financial, commercial, or economic 

13 consequence, or economic or financial 

14 indices or measures of economic or fi15 nancial risk or value; 

16 ‘‘(III) any combination of agree17 ments or transactions referred to in 

18 this clause; 

19 ‘‘(IV) any option to enter into 

20 any agreement or transaction referred 

21 to in this clause; 

22 ‘‘(V) a master agreement that 

23 provides for an agreement or trans24 action referred to in subclause (I), 

25 (II), (III), or (IV), together with all 

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1 supplements to any such master 

2 agreement, without regard to whether 

3 the master agreement contains an 

4 agreement or transaction that is not a 

5 swap agreement under this clause, ex6 cept that the master agreement shall 

7 be considered to be a swap agreement 

8 under this clause only with respect to 

9 each agreement or transaction under 

10 the master agreement that is referred 

11 to in subclause (I), (II), (III), or (IV); 

12 and 

13 ‘‘(VI) any security agreement or 

14 arrangement or other credit enhance15 ment related to any agreements or 

16 transactions referred to in subclause 

17 (I), (II), (III), (IV), or (V), including 

18 any guarantee or reimbursement obli19 gation in connection with any agree20 ment or transaction referred to in any 

21 such subclause. 

22 ‘‘(vii) TREATMENT OF MASTER

23 AGREEMENT AS ONE AGREEMENT.—Any 

24 master agreement for any contract or 

25 agreement described in any preceding 

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1 clause of this subparagraph (or any master 

2 agreement for such master agreement or 

3 agreements), together with all supplements 

4 to such master agreement, shall be treated 

5 as a single agreement and a single quali6 fied financial contract. If a master agree7 ment contains provisions relating to agree8 ments or transactions that are not them9 selves qualified financial contracts, the 

10 master agreement shall be deemed to be a 

11 qualified financial contract only with re12 spect to those transactions that are them13 selves qualified financial contracts. 

14 ‘‘(viii) TRANSFER.—The term ‘trans15 fer’ means every mode, direct or indirect, 

16 absolute or conditional, voluntary or invol17 untary, of disposing of or parting with 

18 property or with an interest in property, 

19 including retention of title as a security in20 terest and foreclosure of the equity of re21 demption of the regulated entity. 

22 ‘‘(E) CERTAIN PROTECTIONS IN EVENT OF

23 APPOINTMENT OF CONSERVATOR.—Notwith24 standing any other provision of this section, any 

25 other Federal law, or the law of any State 

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1 (other than paragraph (10) of this subsection 

2 and subsection (b)(9)(B)), no person shall be 

3 stayed or prohibited from exercising— 

4 ‘‘(i) any right such person has to 

5 cause the termination, liquidation, or accel6 eration of any qualified financial contract 

7 with a regulated entity in a conservator8 ship based upon a default under such fi9 nancial contract which is enforceable under 

10 applicable noninsolvency law; 

11 ‘‘(ii) any right under any security 

12 agreement or arrangement or other credit 

13 enhancement relating to 1 or more such 

14 qualified financial contracts; or 

15 ‘‘(iii) any right to offset or net out 

16 any termination values, payment amounts, 

17 or other transfer obligations arising under 

18 or in connection with such qualified finan19 cial contracts. 

20 ‘‘(F) CLARIFICATION.—No provision of law 

21 shall be construed as limiting the right or 

22 power of the Agency, or authorizing any court 

23 or agency to limit or delay in any manner, the 

24 right or power of the Agency to transfer any 

25 qualified financial contract in accordance with 

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1 paragraphs (9) and (10), or to disaffirm or re2 pudiate any such contract in accordance with 

3 subsection (d)(1). 

4 ‘‘(G) WALKAWAY CLAUSES NOT EFFEC5 TIVE.— 

6 ‘‘(i) IN GENERAL.—Notwithstanding 

7 the provisions of subparagraphs (A) and 

8 (E), and sections 403 and 404 of the Fed9 eral Deposit Insurance Corporation Im10 provement Act of 1991, no walkaway 

11 clause shall be enforceable in a qualified fi12 nancial contract of a regulated entity in 

13 default. 

14 ‘‘(ii) WALKAWAY CLAUSE DEFINED.— 

15 For purposes of this subparagraph, the 

16 term ‘walkaway clause’ means a provision 

17 in a qualified financial contract that, after 

18 calculation of a value of a party’s position 

19 or an amount due to or from 1 of the par20 ties in accordance with its terms upon ter21 mination, liquidation, or acceleration of the 

22 qualified financial contract, either does not 

23 create a payment obligation of a party or 

24 extinguishes a payment obligation of a 

25 party in whole or in part solely because of 

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1 the status of such party as a nondefaulting 

2 party. 

3 ‘‘(9) TRANSFER OF QUALIFIED FINANCIAL CON4 TRACTS.—In making any transfer of assets or liabil5 ities of a regulated entity in default which includes 

6 any qualified financial contract, the conservator or 

7 receiver for such regulated entity shall either— 

8 ‘‘(A) transfer to 1 person— 

9 ‘‘(i) all qualified financial contracts 

10 between any person (or any affiliate of 

11 such person) and the regulated entity in 

12 default; 

13 ‘‘(ii) all claims of such person (or any 

14 affiliate of such person) against such regu15 lated entity under any such contract (other 

16 than any claim which, under the terms of 

17 any such contract, is subordinated to the 

18 claims of general unsecured creditors of 

19 such regulated entity); 

20 ‘‘(iii) all claims of such regulated enti21 ty against such person (or any affiliate of 

22 such person) under any such contract; and 

23 ‘‘(iv) all property securing, or any 

24 other credit enhancement for any contract 

25 described in clause (i), or any claim demmaher on PRODPC74 with BILLS

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1 scribed in clause (ii) or (iii) under any 

2 such contract; or 

3 ‘‘(B) transfer none of the financial con4 tracts, claims, or property referred to under 

5 subparagraph (A) (with respect to such person 

6 and any affiliate of such person). 

7 ‘‘(10) NOTIFICATION OF TRANSFER.— 

8 ‘‘(A) IN GENERAL.—The conservator or re9 ceiver shall notify any person that is a party to 

10 a contract or transfer by 5:00 p.m. (Eastern 

11 Standard Time) on the business day following 

12 the date of the appointment of the receiver in 

13 the case of a receivership, or the business day 

14 following such transfer in the case of a con15 servatorship, if— 

16 ‘‘(i) the conservator or receiver for a 

17 regulated entity in default makes any 

18 transfer of the assets and liabilities of such 

19 regulated entity; and 

20 ‘‘(ii) such transfer includes any quali21 fied financial contract. 

22 ‘‘(B) CERTAIN RIGHTS NOT ENFORCE23 ABLE.— 

24 ‘‘(i) RECEIVERSHIP.—A person who is 

25 a party to a qualified financial contract 

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1 with a regulated entity may not exercise 

2 any right that such person has to termi3 nate, liquidate, or net such contract under 

4 paragraph (8)(A) of this subsection or 

5 under section 403 or 404 of the Federal 

6 Deposit Insurance Corporation Improve7 ment Act of 1991, solely by reason of or 

8 incidental to the appointment of a receiver 

9 for the regulated entity (or the insolvency 

10 or financial condition of the regulated enti11 ty for which the receiver has been ap12 pointed)— 

13 ‘‘(I) until 5:00 p.m. (Eastern 

14 Standard Time) on the business day 

15 following the date of the appointment 

16 of the receiver; or 

17 ‘‘(II) after the person has re18 ceived notice that the contract has 

19 been transferred pursuant to para20 graph (9)(A). 

21 ‘‘(ii) CONSERVATORSHIP.—A person 

22 who is a party to a qualified financial con23 tract with a regulated entity may not exer24 cise any right that such person has to ter25 minate, liquidate, or net such contract 

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1 under paragraph (8)(E) of this subsection 

2 or under section 403 or 404 of the Federal 

3 Deposit Insurance Corporation Improve4 ment Act of 1991, solely by reason of or 

5 incidental to the appointment of a conser6 vator for the regulated entity (or the insol7 vency or financial condition of the regu8 lated entity for which the conservator has 

9 been appointed). 

10 ‘‘(iii) NOTICE.—For purposes of this 

11 paragraph, the conservator or receiver of a 

12 regulated entity shall be deemed to have 

13 notified a person who is a party to a quali14 fied financial contract with such regulated 

15 entity, if the conservator or receiver has 

16 taken steps reasonably calculated to pro17 vide notice to such person by the time 

18 specified in subparagraph (A). 

19 ‘‘(C) BUSINESS DAY DEFINED.—For pur20 poses of this paragraph, the term ‘business day’ 

21 means any day other than any Saturday, Sun22 day, or any day on which either the New York 

23 Stock Exchange or the Federal Reserve Bank 

24 of New York is closed. 

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1 ‘‘(11) DISAFFIRMANCE OR REPUDIATION OF

2 QUALIFIED FINANCIAL CONTRACTS.—In exercising 

3 the rights of disaffirmance or repudiation of a con4 servator or receiver with respect to any qualified fi5 nancial contract to which a regulated entity is a 

6 party, the conservator or receiver for such institution 

7 shall either— 

8 ‘‘(A) disaffirm or repudiate all qualified fi9 nancial contracts between— 

10 ‘‘(i) any person or any affiliate of 

11 such person; and 

12 ‘‘(ii) the regulated entity in default; or 

13 ‘‘(B) disaffirm or repudiate none of the 

14 qualified financial contracts referred to in sub15 paragraph (A) (with respect to such person or 

16 any affiliate of such person). 

17 ‘‘(12) CERTAIN SECURITY INTERESTS NOT

18 AVOIDABLE.—No provision of this subsection shall 

19 be construed as permitting the avoidance of any le20 gally enforceable or perfected security interest in any 

21 of the assets of any regulated entity, except where 

22 such an interest is taken in contemplation of the in23 solvency of the regulated entity, or with the intent 

24 to hinder, delay, or defraud the regulated entity or 

25 the creditors of such regulated entity. 

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1 ‘‘(13) AUTHORITY TO ENFORCE CONTRACTS.— 

2 ‘‘(A) IN GENERAL.—Notwithstanding any 

3 provision of a contract providing for termi4 nation, default, acceleration, or exercise of 

5 rights upon, or solely by reason of, insolvency 

6 or the appointment of, or the exercise of rights 

7 or powers by, a conservator or receiver, the con8 servator or receiver may enforce any contract, 

9 other than a contract for liability insurance for 

10 a director or officer, or a contract or a regu11 lated entity bond, entered into by the regulated 

12 entity. 

13 ‘‘(B) CERTAIN RIGHTS NOT AFFECTED.— 

14 No provision of this paragraph may be con15 strued as impairing or affecting any right of the 

16 conservator or receiver to enforce or recover 

17 under a liability insurance contract for an offi18 cer or director, or regulated entity bond under 

19 other applicable law. 

20 ‘‘(C) CONSENT REQUIREMENT.— 

21 ‘‘(i) IN GENERAL.—Except as other22 wise provided under this section, no person 

23 may exercise any right or power to termi24 nate, accelerate, or declare a default under 

25 any contract to which a regulated entity is 

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1 a party, or to obtain possession of or exer2 cise control over any property of the regu3 lated entity, or affect any contractual 

4 rights of the regulated entity, without the 

5 consent of the conservator or receiver, as 

6 appropriate, for a period of— 

7 ‘‘(I) 45 days after the date of ap8 pointment of a conservator; or 

9 ‘‘(II) 90 days after the date of 

10 appointment of a receiver. 

11 ‘‘(ii) EXCEPTIONS.—This subpara12 graph shall not— 

13 ‘‘(I) apply to a contract for liabil14 ity insurance for an officer or direc15 tor; 

16 ‘‘(II) apply to the rights of par17 ties to certain qualified financial con18 tracts under subsection (d)(8); and 

19 ‘‘(III) be construed as permitting 

20 the conservator or receiver to fail to 

21 comply with otherwise enforceable 

22 provisions of such contracts. 

23 ‘‘(14) SAVINGS CLAUSE.—The meanings of 

24 terms used in this subsection are applicable for pur25 poses of this subsection only, and shall not be conmmaher on PRODPC74 with BILLS

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1 strued or applied so as to challenge or affect the 

2 characterization, definition, or treatment of any 

3 similar terms under any other statute, regulation, or 

4 rule, including the Gramm-Leach-Bliley Act, the 

5 Legal Certainty for Bank Products Act of 2000, the 

6 securities laws (as that term is defined in section 

7 3(a)(47) of the Securities Exchange Act of 1934), 

8 and the Commodity Exchange Act. 

9 ‘‘(e) VALUATION OF CLAIMS IN DEFAULT.— 

10 ‘‘(1) IN GENERAL.—Notwithstanding any other 

11 provision of Federal law or the law of any State, and 

12 regardless of the method which the Agency deter13 mines to utilize with respect to a regulated entity in 

14 default or in danger of default, including trans15 actions authorized under subsection (i), this sub16 section shall govern the rights of the creditors of 

17 such regulated entity. 

18 ‘‘(2) MAXIMUM LIABILITY.—The maximum li19 ability of the Agency, acting as receiver or in any 

20 other capacity, to any person having a claim against 

21 the receiver or the regulated entity for which such 

22 receiver is appointed shall be not more than the 

23 amount that such claimant would have received if 

24 the Agency had liquidated the assets and liabilities 

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1 of the regulated entity without exercising the author2 ity of the Agency under subsection (i). 

3 ‘‘(f) LIMITATION ON COURT ACTION.—Except as 

4 provided in this section or at the request of the Director, 

5 no court may take any action to restrain or affect the exer6 cise of powers or functions of the Agency as a conservator 

7 or a receiver. 

8 ‘‘(g) LIABILITY OF DIRECTORS AND OFFICERS.— 

9 ‘‘(1) IN GENERAL.—A director or officer of a 

10 regulated entity may be held personally liable for 

11 monetary damages in any civil action described in 

12 paragraph (2) brought by, on behalf of, or at the re13 quest or direction of the Agency, and prosecuted 

14 wholly or partially for the benefit of the Agency— 

15 ‘‘(A) acting as conservator or receiver of 

16 such regulated entity; or 

17 ‘‘(B) acting based upon a suit, claim, or 

18 cause of action purchased from, assigned by, or 

19 otherwise conveyed by such receiver or conser20 vator. 

21 ‘‘(2) ACTIONS ADDRESSED.—Paragraph (1) ap22 plies in any civil action for gross negligence, includ23 ing any similar conduct or conduct that dem24 onstrates a greater disregard of a duty of care than 

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1 duct, as such terms are defined and determined 

2 under applicable State law. 

3 ‘‘(3) NO LIMITATION.—Nothing in this sub4 section shall impair or affect any right of the Agency 

5 under other applicable law. 

6 ‘‘(h) DAMAGES.—In any proceeding related to any 

7 claim against a director, officer, employee, agent, attorney, 

8 accountant, appraiser, or any other party employed by or 

9 providing services to a regulated entity, recoverable dam10 ages determined to result from the improvident or other11 wise improper use or investment of any assets of the regu12 lated entity shall include principal losses and appropriate 

13 interest. 

14 ‘‘(i) LIMITED-LIFE REGULATED ENTITIES.— 

15 ‘‘(1) ORGANIZATION.— 

16 ‘‘(A) PURPOSE.—The Agency, as receiver 

17 appointed pursuant to subsection (a)— 

18 ‘‘(i) may, in the case of a Federal 

19 Home Loan Bank, organize a limited-life 

20 regulated entity with those powers and at21 tributes of the Federal Home Loan Bank 

22 in default or in danger of default as the 

23 Director determines necessary, subject to 

24 the provisions of this subsection, and the 

25 Director shall grant a temporary charter to 

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1 that limited-life regulated entity, and that 

2 limited-life regulated entity shall operate 

3 subject to that charter; and 

4 ‘‘(ii) shall, in the case of an enter5 prise, organize a limited-life regulated enti6 ty with respect to that enterprise in ac7 cordance with this subsection. 

8 ‘‘(B) AUTHORITIES.—Upon the creation of 

9 a limited-life regulated entity under subpara10 graph (A), the limited-life regulated entity 

11 may— 

12 ‘‘(i) assume such liabilities of the reg13 ulated entity that is in default or in danger 

14 of default as the Agency may, in its discre15 tion, determine to be appropriate, except 

16 that the liabilities assumed shall not exceed 

17 the amount of assets purchased or trans18 ferred from the regulated entity to the lim19 ited-life regulated entity; 

20 ‘‘(ii) purchase such assets of the regu21 lated entity that is in default, or in danger 

22 of default as the Agency may, in its discre23 tion, determine to be appropriate; and 

24 ‘‘(iii) perform any other temporary 

25 function which the Agency may, in its dismmaher on PRODPC74 with BILLS

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1 cretion, prescribe in accordance with this 

2 section. 

3 ‘‘(2) CHARTER AND ESTABLISHMENT.— 

4 ‘‘(A) TRANSFER OF CHARTER.— 

5 ‘‘(i) FANNIE MAE.—If the Agency is 

6 appointed as receiver for the Federal Na7 tional Mortgage Association, the limited8 life regulated entity established under this 

9 subsection with respect to such enterprise 

10 shall, by operation of law and immediately 

11 upon its organization— 

12 ‘‘(I) succeed to the charter of the 

13 Federal National Mortgage Associa14 tion, as set forth in the Federal Na15 tional Mortgage Association Charter 

16 Act; and 

17 ‘‘(II) thereafter operate in ac18 cordance with, and subject to, such 

19 charter, this Act, and any other provi20 sion of law to which the Federal Na21 tional Mortgage Association is subject, 

22 except as otherwise provided in this 

23 subsection. 

24 ‘‘(ii) FREDDIE MAC.—If the Agency is 

25 appointed as receiver for the Federal 

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1 Home Loan Mortgage Corporation, the 

2 limited-life regulated entity established 

3 under this subsection with respect to such 

4 enterprise shall, by operation of law and 

5 immediately upon its organization— 

6 ‘‘(I) succeed to the charter of the 

7 Federal Home Loan Mortgage Cor8 poration, as set forth in the Federal 

9 Home Loan Mortgage Corporation 

10 Charter Act; and 

11 ‘‘(II) thereafter operate in ac12 cordance with, and subject to, such 

13 charter, this Act, and any other provi14 sion of law to which the Federal 

15 Home Loan Mortgage Corporation is 

16 subject, except as otherwise provided 

17 in this subsection. 

18 ‘‘(B) INTERESTS IN AND ASSETS AND OB19 LIGATIONS OF REGULATED ENTITY IN DE20 FAULT.—Notwithstanding subparagraph (A) or 

21 any other provision of law— 

22 ‘‘(i) a limited-life regulated entity 

23 shall assume, acquire, or succeed to the as24 sets or liabilities of a regulated entity only 

25 to the extent that such assets or liabilities 

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1 are transferred by the Agency to the lim2 ited-life regulated entity in accordance 

3 with, and subject to the restrictions set 

4 forth in, paragraph (1)(B); 

5 ‘‘(ii) a limited-life regulated entity 

6 shall not assume, acquire, or succeed to 

7 any obligation that a regulated entity for 

8 which a receiver has been appointed may 

9 have to any shareholder of the regulated 

10 entity that arises as a result of the status 

11 of that person as a shareholder of the reg12 ulated entity; and 

13 ‘‘(iii) no shareholder or creditor of a 

14 regulated entity shall have any right or 

15 claim against the charter of the regulated 

16 entity once the Agency has been appointed 

17 receiver for the regulated entity and a lim18 ited-life regulated entity succeeds to the 

19 charter pursuant to subparagraph (A). 

20 ‘‘(C) LIMITED-LIFE REGULATED ENTITY

21 TREATED AS BEING IN DEFAULT FOR CERTAIN

22 PURPOSES.—A limited-life regulated entity shall 

23 be treated as a regulated entity in default at 

24 such times and for such purposes as the Agency 

25 may, in its discretion, determine. 

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1 ‘‘(D) MANAGEMENT.—Upon its establish2 ment, a limited-life regulated entity shall be 

3 under the management of a board of directors 

4 consisting of not fewer than 5 nor more than 

5 10 members appointed by the Agency. 

6 ‘‘(E) BYLAWS.—The board of directors of 

7 a limited-life regulated entity shall adopt such 

8 bylaws as may be approved by the Agency. 

9 ‘‘(3) CAPITAL STOCK.— 

10 ‘‘(A) NO AGENCY REQUIREMENT.— 

11 The Agency is not required to pay capital 

12 stock into a limited-life regulated entity or 

13 to issue any capital stock on behalf of a 

14 limited-life regulated entity established 

15 under this subsection. 

16 ‘‘(B) AUTHORITY.—If the Director 

17 determines that such action is advisable, 

18 the Agency may cause capital stock or 

19 other securities of a limited-life regulated 

20 entity established with respect to an enter21 prise to be issued and offered for sale, in 

22 such amounts and on such terms and con23 ditions as the Director may determine, in 

24 the discretion of the Director. 

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1 ‘‘(4) INVESTMENTS.—Funds of a limited-life 

2 regulated entity shall be kept on hand in cash, in3 vested in obligations of the United States or obliga4 tions guaranteed as to principal and interest by the 

5 United States, or deposited with the Agency, or any 

6 Federal reserve bank. 

7 ‘‘(5) EXEMPT TAX STATUS.—Notwithstanding 

8 any other provision of Federal or State law, a lim9 ited-life regulated entity, its franchise, property, and 

10 income shall be exempt from all taxation now or 

11 hereafter imposed by the United States, by any ter12 ritory, dependency, or possession thereof, or by any 

13 State, county, municipality, or local taxing authority. 

14 ‘‘(6) WINDING UP.— 

15 ‘‘(A) IN GENERAL.—Subject to subpara16 graphs (B) and (C), not later than 2 years after 

17 the date of its organization, the Agency shall 

18 wind up the affairs of a limited-life regulated 

19 entity. 

20 ‘‘(B) EXTENSION.—The Director may, in 

21 the discretion of the Director, extend the status 

22 of a limited-life regulated entity for 3 additional 

23 1-year periods. 

24 ‘‘(C) TERMINATION OF STATUS AS LIM25 ITED-LIFE REGULATED ENTITY.— 

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1 ‘‘(i) IN GENERAL.—Upon the sale by 

2 the Agency of 80 percent or more of the 

3 capital stock of a limited-life regulated en4 tity, as defined in clause (iv), to 1 or more 

5 persons (other than the Agency)— 

6 ‘‘(I) the status of the limited-life 

7 regulated entity as such shall termi8 nate; and 

9 ‘‘(II) the entity shall cease to be 

10 a limited-life regulated entity for pur11 poses of this subsection. 

12 ‘‘(ii) DIVESTITURE OF REMAINING

13 STOCK, IF ANY.— 

14 ‘‘(I) IN GENERAL.—Not later 

15 than 1 year after the date on which 

16 the status of a limited-life regulated 

17 entity is terminated pursuant to 

18 clause (i), the Agency shall sell to 1 or 

19 more persons (other than the Agency) 

20 any remaining capital stock of the 

21 former limited-life regulated entity. 

22 ‘‘(II) EXTENSION AUTHOR23 IZED.—The Director may extend the 

24 period referred to in subclause (I) for 

25 not longer than an additional 2 years, 

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1 if the Director determines that such 

2 action would be in the public interest. 

3 ‘‘(iii) SAVINGS CLAUSE.—Notwith4 standing any provision of law, other than 

5 clause (ii), the Agency shall not be re6 quired to sell the capital stock of an enter7 prise or a limited-life regulated entity es8 tablished with respect to an enterprise. 

9 ‘‘(iv) APPLICABILITY.—This subpara10 graph applies only with respect to a lim11 ited-life regulated entity that is established 

12 with respect to an enterprise. 

13 ‘‘(7) TRANSFER OF ASSETS AND LIABILITIES.— 

14 ‘‘(A) IN GENERAL.— 

15 ‘‘(i) TRANSFER OF ASSETS AND LI16 ABILITIES.—The Agency, as receiver, may 

17 transfer any assets and liabilities of a reg18 ulated entity in default, or in danger of de19 fault, to the limited-life regulated entity in 

20 accordance with and subject to the restric21 tions of paragraph (1). 

22 ‘‘(ii) SUBSEQUENT TRANSFERS.—At 

23 any time after the establishment of a lim24 ited-life regulated entity, the Agency, as 

25 receiver, may transfer any assets and limmaher on PRODPC74 with BILLS

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1 abilities of the regulated entity in default, 

2 or in danger of default, as the Agency 

3 may, in its discretion, determine to be ap4 propriate in accordance with and subject to 

5 the restrictions of paragraph (1). 

6 ‘‘(iii) EFFECTIVE WITHOUT AP7 PROVAL.—The transfer of any assets or li8 abilities of a regulated entity in default or 

9 in danger of default to a limited-life regu10 lated entity shall be effective without any 

11 further approval under Federal or State 

12 law, assignment, or consent with respect 

13 thereto. 

14 ‘‘(iv) EQUITABLE TREATMENT OF

15 SIMILARLY SITUATED CREDITORS.—The 

16 Agency shall treat all creditors of a regu17 lated entity in default or in danger of de18 fault that are similarly situated under sub19 section (c)(1) in a similar manner in exer20 cising the authority of the Agency under 

21 this subsection to transfer any assets or li22 abilities of the regulated entity to the lim23 ited-life regulated entity established with 

24 respect to such regulated entity, except 

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1 ing making payments) that do not comply 

2 with this clause, if— 

3 ‘‘(I) the Director determines that 

4 such actions are necessary to maxi5 mize the value of the assets of the 

6 regulated entity, to maximize the 

7 present value return from the sale or 

8 other disposition of the assets of the 

9 regulated entity, or to minimize the 

10 amount of any loss realized upon the 

11 sale or other disposition of the assets 

12 of the regulated entity; and 

13 ‘‘(II) all creditors that are simi14 larly situated under subsection (c)(1) 

15 receive not less than the amount pro16 vided in subsection (e)(2). 

17 ‘‘(v) LIMITATION ON TRANSFER OF

18 LIABILITIES.—Notwithstanding any other 

19 provision of law, the aggregate amount of 

20 liabilities of a regulated entity that are 

21 transferred to, or assumed by, a limited22 life regulated entity may not exceed the ag23 gregate amount of assets of the regulated 

24 entity that are transferred to, or purchased 

25 by, the limited-life regulated entity. 

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1 ‘‘(8) REGULATIONS.—The Agency may promul2 gate such regulations as the Agency determines to 

3 be necessary or appropriate to implement this sub4 section. 

5 ‘‘(9) POWERS OF LIMITED-LIFE REGULATED

6 ENTITIES.— 

7 ‘‘(A) IN GENERAL.—Each limited-life regu8 lated entity created under this subsection shall 

9 have all corporate powers of, and be subject to 

10 the same provisions of law as, the regulated en11 tity in default or in danger of default to which 

12 it relates, except that— 

13 ‘‘(i) the Agency may— 

14 ‘‘(I) remove the directors of a 

15 limited-life regulated entity; 

16 ‘‘(II) fix the compensation of 

17 members of the board of directors and 

18 senior management, as determined by 

19 the Agency in its discretion, of a lim20 ited-life regulated entity; and 

21 ‘‘(III) indemnify the representa22 tives for purposes of paragraph 

23 (1)(B), and the directors, officers, em24 ployees, and agents of a limited-life 

25 regulated entity on such terms as the 

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1 Agency determines to be appropriate; 

2 and 

3 ‘‘(ii) the board of directors of a lim4 ited-life regulated entity— 

5 ‘‘(I) shall elect a chairperson who 

6 may also serve in the position of chief 

7 executive officer, except that such per8 son shall not serve either as chair9 person or as chief executive officer 

10 without the prior approval of the 

11 Agency; and 

12 ‘‘(II) may appoint a chief execu13 tive officer who is not also the chair14 person, except that such person shall 

15 not serve as chief executive officer 

16 without the prior approval of the 

17 Agency. 

18 ‘‘(B) STAY OF JUDICIAL ACTION.—Any ju19 dicial action to which a limited-life regulated 

20 entity becomes a party by virtue of its acquisi21 tion of any assets or assumption of any liabil22 ities of a regulated entity in default shall be 

23 stayed from further proceedings for a period of 

24 not longer than 45 days, at the request of the 

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1 limited-life regulated entity. Such period may 

2 be modified upon the consent of all parties. 

3 ‘‘(10) NO FEDERAL STATUS.— 

4 ‘‘(A) AGENCY STATUS.—A limited-life reg5 ulated entity is not an agency, establishment, or 

6 instrumentality of the United States. 

7 ‘‘(B) EMPLOYEE STATUS.—Representa8 tives for purposes of paragraph (1)(B), interim 

9 directors, directors, officers, employees, or 

10 agents of a limited-life regulated entity are not, 

11 solely by virtue of service in any such capacity, 

12 officers or employees of the United States. Any 

13 employee of the Agency or of any Federal in14 strumentality who serves at the request of the 

15 Agency as a representative for purposes of 

16 paragraph (1)(B), interim director, director, of17 ficer, employee, or agent of a limited-life regu18 lated entity shall not— 

19 ‘‘(i) solely by virtue of service in any 

20 such capacity lose any existing status as 

21 an officer or employee of the United States 

22 for purposes of title 5, United States Code, 

23 or any other provision of law; or 

24 ‘‘(ii) receive any salary or benefits for 

25 service in any such capacity with respect to 

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1 a limited-life regulated entity in addition to 

2 such salary or benefits as are obtained 

3 through employment with the Agency or 

4 such Federal instrumentality. 

5 ‘‘(11) AUTHORITY TO OBTAIN CREDIT.— 

6 ‘‘(A) IN GENERAL.—A limited-life regu7 lated entity may obtain unsecured credit and 

8 issue unsecured debt. 

9 ‘‘(B) INABILITY TO OBTAIN CREDIT.—If a 

10 limited-life regulated entity is unable to obtain 

11 unsecured credit or issue unsecured debt, the 

12 Director may authorize the obtaining of credit 

13 or the issuance of debt by the limited-life regu14 lated entity— 

15 ‘‘(i) with priority over any or all of 

16 the obligations of the limited-life regulated 

17 entity; 

18 ‘‘(ii) secured by a lien on property of 

19 the limited-life regulated entity that is not 

20 otherwise subject to a lien; or 

21 ‘‘(iii) secured by a junior lien on prop22 erty of the limited-life regulated entity that 

23 is subject to a lien. 

24 ‘‘(C) LIMITATIONS.— 

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1 ‘‘(i) IN GENERAL.—The Director, 

2 after notice and a hearing, may authorize 

3 the obtaining of credit or the issuance of 

4 debt by a limited-life regulated entity that 

5 is secured by a senior or equal lien on 

6 property of the limited-life regulated entity 

7 that is subject to a lien (other than mort8 gages that collateralize the mortgage9 backed securities issued or guaranteed by 

10 an enterprise) only if— 

11 ‘‘(I) the limited-life regulated en12 tity is unable to otherwise obtain such 

13 credit or issue such debt; and 

14 ‘‘(II) there is adequate protection 

15 of the interest of the holder of the lien 

16 on the property with respect to which 

17 such senior or equal lien is proposed 

18 to be granted. 

19 ‘‘(12) BURDEN OF PROOF.—In any hearing 

20 under this subsection, the Director has the burden 

21 of proof on the issue of adequate protection. 

22 ‘‘(13) AFFECT ON DEBTS AND LIENS.—The re23 versal or modification on appeal of an authorization 

24 under this subsection to obtain credit or issue debt, 

25 or of a grant under this section of a priority or a 

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1 lien, does not affect the validity of any debt so 

2 issued, or any priority or lien so granted, to an enti3 ty that extended such credit in good faith, whether 

4 or not such entity knew of the pendency of the ap5 peal, unless such authorization and the issuance of 

6 such debt, or the granting of such priority or lien, 

7 were stayed pending appeal. 

8 ‘‘(j) OTHER AGENCY EXEMPTIONS.— 

9 ‘‘(1) APPLICABILITY.—The provisions of this 

10 subsection shall apply with respect to the Agency in 

11 any case in which the Agency is acting as a conser12 vator or a receiver. 

13 ‘‘(2) TAXATION.—The Agency, including its 

14 franchise, its capital, reserves, and surplus, and its 

15 income, shall be exempt from all taxation imposed 

16 by any State, county, municipality, or local taxing 

17 authority, except that any real property of the Agen18 cy shall be subject to State, territorial, county, mu19 nicipal, or local taxation to the same extent accord20 ing to its value as other real property is taxed, ex21 cept that, notwithstanding the failure of any person 

22 to challenge an assessment under State law of the 

23 value of such property, and the tax thereon, shall be 

24 determined as of the period for which such tax is im25 posed. 

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1 ‘‘(3) PROPERTY PROTECTION.—No property of 

2 the Agency shall be subject to levy, attachment, gar3 nishment, foreclosure, or sale without the consent of 

4 the Agency, nor shall any involuntary lien attach to 

5 the property of the Agency. 

6 ‘‘(4) PENALTIES AND FINES.—The Agency 

7 shall not be liable for any amounts in the nature of 

8 penalties or fines, including those arising from the 

9 failure of any person to pay any real property, per10 sonal property, probate, or recording tax or any re11 cording or filing fees when due. 

12 ‘‘(k) PROHIBITION OF CHARTER REVOCATION.—In 

13 no case may the receiver appointed pursuant to this sec14 tion revoke, annul, or terminate the charter of an enter15 prise.’’. 

16 (b) TECHNICAL AND CONFORMING AMENDMENTS.— 

17 The Federal Housing Enterprises Financial Safety and 

18 Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is amend19 ed— 

20 (1) in section 1368 (12 U.S.C. 4618)— 

21 (A) by striking ‘‘an enterprise’’ each place 

22 that term appears and inserting ‘‘a regulated 

23 entity’’; and 

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1 (B) by striking ‘‘the enterprise’’ each place 

2 that term appears and inserting ‘‘the regulated 

3 entity’’; 

4 (2) in section 1369C (12 U.S.C. 4622), by 

5 striking ‘‘enterprise’’ each place that term appears 

6 and inserting ‘‘regulated entity’’; 

7 (3) in section 1369D (12 U.S.C. 4623)— 

8 (A) by striking ‘‘an enterprise’’ each place 

9 that term appears and inserting ‘‘a regulated 

10 entity’’; and 

11 (B) in subsection (a)(1), by striking ‘‘An 

12 enterprise’’ and inserting ‘‘A regulated entity’’; 

13 and 

14 (4) by striking sections 1369, 1369A, and 

15 1369B (12 U.S.C. 4619, 4620, and 4621). 

16 Subtitle D—Enforcement Actions 

17 SEC. 151. CEASE-AND-DESIST PROCEEDINGS. 

18 Section 1371 of the Federal Housing Enterprises Fi19 nancial Safety and Soundness Act of 1992 (12 U.S.C. 

20 4631) is amended— 

21 (1) by striking subsections (a) and (b) and in22 serting the following: 

23 ‘‘(a) ISSUANCE FOR UNSAFE OR UNSOUND PRAC24 TICES AND VIOLATIONS.—If, in the opinion of the Direc25 tor, a regulated entity or any entity-affiliated party is enmmaher on PRODPC74 with BILLS

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1 gaging or has engaged, or the Director has reasonable 

2 cause to believe that the regulated entity or any entity3 affiliated party is about to engage, in an unsafe or un4 sound practice in conducting the business of the regulated 

5 entity or the Finance Facility, or is violating or has vio6 lated, or the Director has reasonable cause to believe is 

7 about to violate, a law, rule, regulation, or order, or any 

8 condition imposed in writing by the Director in connection 

9 with the granting of any application or other request by 

10 the regulated entity or the Finance Facility or any written 

11 agreement entered into with the Director, the Director 

12 may issue and serve upon the regulated entity or entity13 affiliated party a notice of charges in respect thereof. 

14 ‘‘(b) ISSUANCE FOR UNSATISFACTORY RATING.—If a 

15 regulated entity receives, in its most recent report of ex16 amination, a less-than-satisfactory rating for credit risk, 

17 market risk, operations, or corporate governance, the Di18 rector may (if the deficiency is not corrected) deem the 

19 regulated entity to be engaging in an unsafe or unsound 

20 practice for purposes of subsection (a).’’; 

21 (2) in subsection (c)— 

22 (A) in paragraph (1), by inserting before 

23 the period at the end the following: ‘‘, unless 

24 the party served with a notice of charges shall 

25 appear at the hearing personally or by a duly 

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1 authorized representative, the party shall be 

2 deemed to have consented to the issuance of the 

3 cease-and-desist order’’; and 

4 (B) in paragraph (2)— 

5 (i) by striking ‘‘or director’’ and in6 serting ‘‘director, or entity-affiliated 

7 party’’; and 

8 (ii) by inserting ‘‘or entity-affiliated 

9 party’’ before ‘‘consents’’; 

10 (3) in each of subsections (c), (d), and (e)— 

11 (A) by striking ‘‘the enterprise’’ each place 

12 that term appears and inserting ‘‘the regulated 

13 entity’’; 

14 (B) by striking ‘‘an enterprise’’ each place 

15 that term appears and inserting ‘‘a regulated 

16 entity’’; and 

17 (C) by striking ‘‘conduct’’ each place that 

18 term appears and inserting ‘‘practice’’; 

19 (4) in subsection (d)— 

20 (A) in the matter preceding paragraph 

21 (1)— 

22 (i) by striking ‘‘or director’’ and in23 serting ‘‘director, or entity-affiliated 

24 party’’; 

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1 (ii) by inserting ‘‘to require a regu2 lated entity or entity-affiliated party’’ after 

3 ‘‘includes the authority’’; 

4 (B) in paragraph (1)— 

5 (i) by striking ‘‘to require an executive 

6 officer or a director to’’; and 

7 (ii) by striking ‘‘loss’’ and all that fol8 lows through ‘‘person’’ and inserting ‘‘loss, 

9 if’’; 

10 (iii) in subparagraph (A), by inserting 

11 ‘‘such entity or party or finance facility’’ 

12 before ‘‘was’’; and 

13 (iv) by striking subparagraph (B) and 

14 inserting the following: 

15 ‘‘(B) the violation or practice involved a 

16 reckless disregard for the law or any applicable 

17 regulations or prior order of the Director;’’;] 

18 and 

19 (C) in paragraph (4), by inserting ‘‘loan 

20 or’’ before ‘‘asset’’; 

21 (5) in subsection (e), by inserting ‘‘or entity-af22 filiated party’’— 

23 (A) before ‘‘or any executive’’; and 

24 (B) before the period at the end; and 

25 (6) in subsection (f)— 

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1 (A) by striking ‘‘enterprise’’ and inserting 

2 ‘‘regulated entity, finance facility,’’; and 

3 (B) by striking ‘‘or director’’ and inserting 

4 ‘‘director, or entity-affiliated party’’. 

5 SEC. 152. TEMPORARY CEASE-AND-DESIST PROCEEDINGS. 

6 Section 1372 of the Federal Housing Enterprises Fi7 nancial Safety and Soundness Act of 1992 (12 U.S.C. 

8 4632) is amended— 

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

10 following: 

11 ‘‘(a) GROUNDS FOR ISSUANCE.— 

12 ‘‘(1) IN GENERAL.—If the Director determines 

13 that the actions specified in the notice of charges 

14 served upon a regulated entity or any entity-affili15 ated party pursuant to section 1371(a), or the con16 tinuation thereof, is likely to cause insolvency or sig17 nificant dissipation of assets or earnings of that en18 tity, or is likely to weaken the condition of that enti19 ty prior to the completion of the proceedings con20 ducted pursuant to sections 1371 and 1373, the Di21 rector may— 

22 ‘‘(A) issue a temporary order requiring 

23 that regulated entity or entity-affiliated party to 

24 cease and desist from any such violation or 

25 practice; and 

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1 ‘‘(B) require that regulated entity or enti2 ty-affiliated party to take affirmative action to 

3 prevent or remedy such insolvency, dissipation, 

4 condition, or prejudice pending completion of 

5 such proceedings. 

6 ‘‘(2) ADDITIONAL REQUIREMENTS.—An order 

7 issued under paragraph (1) may include any require8 ment authorized under subsection 1371(d).’’; 

9 (2) in subsection (b)— 

10 (A) by striking ‘‘or director’’ and inserting 

11 ‘‘director, or entity-affiliated party’’; and 

12 (B) by striking ‘‘enterprise’’ each place 

13 that term appears and inserting ‘‘regulated en14 tity’’; 

15 (3) in subsection (c), by striking ‘‘enterprise’’ 

16 each place that term appears and inserting ‘‘regu17 lated entity’’; 

18 (4) in subsection (d)— 

19 (A) by striking ‘‘or director’’ each place 

20 that term appears and inserting ‘‘director, or 

21 entity-affiliated party’’; and 

22 (B) by striking ‘‘An enterprise’’ and insert23 ing ‘‘A regulated entity’’; and 

24 (5) in subsection (e)— 

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1 (A) by striking ‘‘request the Attorney Gen2 eral of the United States to’’; and 

3 (B) by striking ‘‘or may, under the direc4 tion and control of the Attorney General, bring 

5 such action’’. 

6 SEC. 153. REMOVAL AND PROHIBITION AUTHORITY. 

7 (a) IN GENERAL.—Part 1 of subtitle C of the Federal 

8 Housing Enterprises Financial Safety and Soundness Act 

9 of 1992 (12 U.S.C. 4631 et seq.) is amended— 

10 (1) by redesignating sections 1377 through 

11 1379B (12 U.S.C. 4637–4641) as sections 1379 

12 through 1379D, respectively; and 

13 (2) by inserting after section 1376 (12 U.S.C. 

14 4636) the following: 

15 ‘‘SEC. 1377. REMOVAL AND PROHIBITION AUTHORITY. 

16 ‘‘(a) AUTHORITY TO ISSUE ORDER.— 

17 ‘‘(1) IN GENERAL.—The Director may serve 

18 upon a party described in paragraph (2), or any offi19 cer, director, or management of the Finance Facility 

20 a written notice of the intention of the Director to 

21 suspend or remove such party from office, or pro22 hibit any further participation by such party, in any 

23 manner, in the conduct of the affairs of the regu24 lated entity. 

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1 ‘‘(2) APPLICABILITY.—A party described in this 

2 paragraph is an entity-affiliated party or any officer, 

3 director, or management of the Finance Facility, if 

4 the Director determines that— 

5 ‘‘(A) that party, officer, or director has, di6 rectly or indirectly— 

7 ‘‘(i) violated— 

8 ‘‘(I) any law or regulation; 

9 ‘‘(II) any cease-and-desist order 

10 which has become final; 

11 ‘‘(III) any condition imposed in 

12 writing by the Director in connection 

13 with the grant of any application or 

14 other request by such regulated enti15 ty; or 

16 ‘‘(IV) any written agreement be17 tween such regulated entity and the 

18 Director; 

19 ‘‘(ii) engaged or participated in any 

20 unsafe or unsound practice in connection 

21 with any regulated entity or business insti22 tution; or 

23 ‘‘(iii) committed or engaged in any 

24 act, omission, or practice which constitutes 

25 a breach of such party’s fiduciary duty; 

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1 ‘‘(B) by reason of the violation, practice, or 

2 breach described in subparagraph (A)— 

3 ‘‘(i) such regulated entity or business 

4 institution has suffered or will probably 

5 suffer financial loss or other damage; or 

6 ‘‘(ii) such party has received financial 

7 gain or other benefit; and 

8 ‘‘(C) the violation, practice, or breach de9 scribed in subparagraph (A)— 

10 ‘‘(i) involves personal dishonesty on 

11 the part of such party; or 

12 ‘‘(ii) demonstrates willful or con13 tinuing disregard by such party for the 

14 safety or soundness of such regulated enti15 ty or business institution. 

16 ‘‘(b) SUSPENSION ORDER.— 

17 ‘‘(1) SUSPENSION OR PROHIBITION AUTHOR18 ITY.—If the Director serves written notice under 

19 subsection (a) upon a party subject to that sub20 section (a), the Director may, by order, suspend or 

21 remove such party from office, or prohibit such 

22 party from further participation in any manner in 

23 the conduct of the affairs of the regulated entity, if 

24 the Director— 

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1 ‘‘(A) determines that such action is nec2 essary for the protection of the regulated entity; 

3 and 

4 ‘‘(B) serves such party with written notice 

5 of the order. 

6 ‘‘(2) EFFECTIVE PERIOD.—Any order issued 

7 under this subsection— 

8 ‘‘(A) shall become effective upon service; 

9 and 

10 ‘‘(B) unless a court issues a stay of such 

11 order under subsection (g), shall remain in ef12 fect and enforceable until— 

13 ‘‘(i) the date on which the Director 

14 dismisses the charges contained in the no15 tice served under subsection (a) with re16 spect to such party; or 

17 ‘‘(ii) the effective date of an order 

18 issued under subsection (b). 

19 ‘‘(3) COPY OF ORDER.—If the Director issues 

20 an order under subsection (b) to any party, the Di21 rector shall serve a copy of such order on any regu22 lated entity with which such party is affiliated at the 

23 time such order is issued. 

24 ‘‘(c) NOTICE, HEARING, AND ORDER.— 

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1 ‘‘(1) NOTICE.—A notice under subsection (a) of 

2 the intention of the Director to issue an order under 

3 this section shall contain a statement of the facts 

4 constituting grounds for such action, and shall fix a 

5 time and place at which a hearing will be held on 

6 such action. 

7 ‘‘(2) TIMING OF HEARING.—A hearing shall be 

8 fixed for a date not earlier than 30 days, nor later 

9 than 60 days, after the date of service of notice 

10 under subsection (a), unless an earlier or a later 

11 date is set by the Director at the request of— 

12 ‘‘(A) the party receiving such notice, and 

13 good cause is shown; or 

14 ‘‘(B) the Attorney General of the United 

15 States. 

16 ‘‘(3) CONSENT.—Unless the party that is the 

17 subject of a notice delivered under subsection (a) ap18 pears at the hearing in person or by a duly author19 ized representative, such party shall be deemed to 

20 have consented to the issuance of an order under 

21 this section. 

22 ‘‘(4) ISSUANCE OF ORDER OF SUSPENSION.— 

23 The Director may issue an order under this section, 

24 as the Director may deem appropriate, if— 

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1 ‘‘(A) a party is deemed to have consented 

2 to the issuance of an order under paragraph 

3 (3); or 

4 ‘‘(B) upon the record made at the hearing, 

5 the Director finds that any of the grounds spec6 ified in the notice have been established. 

7 ‘‘(5) EFFECTIVENESS OF ORDER.—Any order 

8 issued under paragraph (4) shall become effective at 

9 the expiration of 30 days after the date of service 

10 upon the relevant regulated entity and party (except 

11 in the case of an order issued upon consent under 

12 paragraph (3), which shall become effective at the 

13 time specified therein). Such order shall remain ef14 fective and enforceable except to such extent as it is 

15 stayed, modified, terminated, or set aside by action 

16 of the Director or a reviewing court. 

17 ‘‘(d) PROHIBITION OF CERTAIN SPECIFIC ACTIVI18 TIES.—Any person subject to an order issued under this 

19 section shall not— 

20 ‘‘(1) participate in any manner in the conduct 

21 of the affairs of any regulated entity or the Finance 

22 Facility; 

23 ‘‘(2) solicit, procure, transfer, attempt to trans24 fer, vote, or attempt to vote any proxy, consent, or 

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1 authorization with respect to any voting rights in 

2 any regulated entity; 

3 ‘‘(3) violate any voting agreement previously 

4 approved by the Director; or 

5 ‘‘(4) vote for a director, or serve or act as an 

6 entity-affiliated party of a regulated entity or as an 

7 officer or director of the Finance Facility. 

8 ‘‘(e) INDUSTRY-WIDE PROHIBITION.— 

9 ‘‘(1) IN GENERAL.—Except as provided in para10 graph (2), any person who, pursuant to an order 

11 issued under this section, has been removed or sus12 pended from office in a regulated entity or the Fi13 nance Facility, or prohibited from participating in 

14 the conduct of the affairs of a regulated entity or 

15 the Finance Facility, may not, while such order is in 

16 effect, continue or commence to hold any office in, 

17 or participate in any manner in the conduct of the 

18 affairs of, any regulated entity or the Finance Facil19 ity. 

20 ‘‘(2) EXCEPTION IF DIRECTOR PROVIDES WRIT21 TEN CONSENT.—If, on or after the date on which an 

22 order is issued under this section which removes or 

23 suspends from office any party, or prohibits such 

24 party from participating in the conduct of the affairs 

25 of a regulated entity or the Finance Facility, such 

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1 party receives the written consent of the Director, 

2 the order shall, to the extent of such consent, cease 

3 to apply to such party with respect to the regulated 

4 entity or such Finance Facility described in the writ5 ten consent. Any such consent shall be publicly dis6 closed. 

7 ‘‘(3) VIOLATION OF PARAGRAPH (1) TREATED

8 AS VIOLATION OF ORDER.—Any violation of para9 graph (1) by any person who is subject to an order 

10 issued under subsection (h) shall be treated as a vio11 lation of the order. 

12 ‘‘(f) APPLICABILITY.—This section shall only apply 

13 to a person who is an individual, unless the Director spe14 cifically finds that it should apply to a corporation, firm, 

15 or other business entity. 

16 ‘‘(g) STAY OF SUSPENSION AND PROHIBITION OF

17 ENTITY-AFFILIATED PARTY.—Not later than 10 days 

18 after the date on which any entity-affiliated party has been 

19 suspended from office or prohibited from participation in 

20 the conduct of the affairs of a regulated entity under this 

21 section, such party may apply to the United States Dis22 trict Court for the District of Columbia, or the United 

23 States district court for the judicial district in which the 

24 headquarters of the regulated entity is located, for a stay 

25 of such suspension or prohibition pending the completion 

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1 of the administrative proceedings pursuant to subsection 

2 (c). The court shall have jurisdiction to stay such suspen3 sion or prohibition. 

4 ‘‘(h) SUSPENSION OR REMOVAL OF ENTITY-AFFILI5 ATED PARTY CHARGED WITH FELONY.— 

6 ‘‘(1) SUSPENSION OR PROHIBITION.— 

7 ‘‘(A) IN GENERAL.—Whenever any entity8 affiliated party is charged in any information, 

9 indictment, or complaint, with the commission 

10 of or participation in a crime involving dishon11 esty or breach of trust which is punishable by 

12 imprisonment for a term exceeding 1 year 

13 under Federal or State law, the Director may, 

14 if continued service or participation by such 

15 party may pose a threat to the regulated entity 

16 or impair public confidence in the regulated en17 tity, by written notice served upon such party, 

18 suspend such party from office or prohibit such 

19 party from further participation in any manner 

20 in the conduct of the affairs of any regulated 

21 entity. 

22 ‘‘(B) PROVISIONS APPLICABLE TO NO23 TICE.— 

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1 ‘‘(i) COPY.—A copy of any notice 

2 under subparagraph (A) shall be served 

3 upon the relevant regulated entity. 

4 ‘‘(ii) EFFECTIVE PERIOD.—A suspen5 sion or prohibition under subparagraph (A) 

6 shall remain in effect until the informa7 tion, indictment, or complaint referred to 

8 in subparagraph (A) is finally disposed of, 

9 or until terminated by the Director. 

10 ‘‘(2) REMOVAL OR PROHIBITION.— 

11 ‘‘(A) IN GENERAL.—If a judgment of con12 viction or an agreement to enter a pretrial di13 version or other similar program is entered 

14 against an entity-affiliated party in connection 

15 with a crime described in paragraph (1)(A), at 

16 such time as such judgment is not subject to 

17 further appellate review, the Director may, if 

18 continued service or participation by such party 

19 may pose a threat to the regulated entity or im20 pair public confidence in the regulated entity, 

21 issue and serve upon such party an order re22 moving such party from office or prohibiting 

23 such party from further participation in any 

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1 ulated entity without the prior written consent 

2 of the Director. 

3 ‘‘(B) PROVISIONS APPLICABLE TO

4 ORDER.— 

5 ‘‘(i) COPY.—A copy of any order 

6 under subparagraph (A) shall be served 

7 upon the relevant regulated entity, at 

8 which time the entity-affiliated party who 

9 is subject to the order (if a director or an 

10 officer) shall cease to be a director or offi11 cer of such regulated entity. 

12 ‘‘(ii) EFFECT OF ACQUITTAL.—A find13 ing of not guilty or other disposition of the 

14 charge shall not preclude the Director from 

15 instituting proceedings after such finding 

16 or disposition to remove a party from of17 fice or to prohibit further participation in 

18 the affairs of a regulated entity pursuant 

19 to subsection (a) or (b). 

20 ‘‘(iii) EFFECTIVE PERIOD.—Unless 

21 terminated by the Director, any notice of 

22 suspension or order of removal issued 

23 under this subsection shall remain effective 

24 and outstanding until the completion of 

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1 any hearing or appeal authorized under 

2 paragraph (4). 

3 ‘‘(3) AUTHORITY OF REMAINING BOARD MEM4 BERS.— 

5 ‘‘(A) IN GENERAL.—If at any time, be6 cause of the suspension of 1 or more directors 

7 pursuant to this section, there shall be on the 

8 board of directors of a regulated entity less 

9 than a quorum of directors not so suspended, 

10 all powers and functions vested in or exercisable 

11 by such board shall vest in and be exercisable 

12 by the director or directors on the board not so 

13 suspended, until such time as there shall be a 

14 quorum of the board of directors. 

15 ‘‘(B) APPOINTMENT OF TEMPORARY DI16 RECTORS.—If all of the directors of a regulated 

17 entity are suspended pursuant to this section, 

18 the Director shall appoint persons to serve tem19 porarily as directors pending the termination of 

20 such suspensions, or until such time as those 

21 who have been suspended cease to be directors 

22 of the regulated entity and their respective suc23 cessors take office. 

24 ‘‘(4) HEARING REGARDING CONTINUED PAR25 TICIPATION.— 

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1 ‘‘(A) IN GENERAL.—Not later than 30 

2 days after the date of service of any notice of 

3 suspension or order of removal issued pursuant 

4 to paragraph (1) or (2), the entity-affiliated 

5 party may request in writing an opportunity to 

6 appear before the Director to show that the 

7 continued service or participation in the con8 duct of the affairs of the regulated entity by 

9 such party does not, or is not likely to, pose a 

10 threat to the interests of the regulated entity, 

11 or threaten to impair public confidence in the 

12 regulated entity. 

13 ‘‘(B) TIMING AND FORM OF HEARING.— 

14 Upon receipt of a request for a hearing under 

15 subparagraph (A), the Director shall fix a time 

16 (not later than 30 days after the date of receipt 

17 of such request, unless extended at the request 

18 of such party) and place at which the entity-af19 filiated party may appear, personally or through 

20 counsel, before the Director or 1 or more des21 ignated employees of the Director to submit 

22 written materials (or, at the discretion of the 

23 Director, oral testimony) and oral argument. 

24 ‘‘(C) DETERMINATION.—Not later than 60 

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1 graph (B), the Director shall notify the entity2 affiliated party whether the suspension or pro3 hibition from participation in any manner in 

4 the conduct of the affairs of the regulated enti5 ty will be continued, terminated, or otherwise 

6 modified, or whether the order removing such 

7 party from office or prohibiting such party from 

8 further participation in any manner in the con9 duct of the affairs of the regulated entity will 

10 be rescinded or otherwise modified. Such notifi11 cation shall contain a statement of the basis for 

12 any adverse decision of the Director. 

13 ‘‘(5) RULES.—The Director is authorized to 

14 prescribe such rules as may be necessary to carry 

15 out this subsection.’’. 

16 (b) CONFORMING AMENDMENTS.— 

17 (1) SAFETY AND SOUNDNESS ACT.—Subtitle C 

18 of title XIII of the Federal Housing Enterprises Fi19 nancial Safety and Soundness Act of 1992 (42 

20 U.S.C. 4501 et seq.) is amended— 

21 (A) in section 1317(f), by striking ‘‘section 

22 1379B’’ and inserting ‘‘section 1379D’’; 

23 (B) in section 1373(a)— 

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1 (i) in paragraph (1), by striking ‘‘or 

2 1376(c)’’ and inserting ‘‘, 1376(c), or 

3 1377’’; 

4 (ii) in paragraph (2), by inserting ‘‘or 

5 1377’’ after’’1371’’; and 

6 (iii) in paragraph (4), by inserting ‘‘or 

7 removal or prohibition’’ after ‘‘cease and 

8 desist’’; and 

9 (C) in section 1374(a)— 

10 (i) by striking ‘‘or 1376’’ and insert11 ing ‘‘, 1376, or 1377’’; and 

12 (ii) by striking ‘‘such section’’ and in13 serting ‘‘this title’’. 

14 (2) FANNIE MAE CHARTER ACT.—Section 

15 308(b) of the Federal National Mortgage Associa16 tion Charter Act (12 U.S.C. 1723(b)) is amended in 

17 the second sentence, by striking ‘‘The’’ and inserting 

18 ‘‘Except to the extent that action under section 

19 1377 of the Federal Housing Enterprises Financial 

20 Safety and Soundness Act of 1992 temporarily re21 sults in a lesser number, the’’. 

22 (3) FREDDIE MAC CHARTER ACT.—Section 

23 303(a)(2)(A) of the Federal Home Loan Mortgage 

24 Corporation Act (12 U.S.C. 1452(a)(2)(A)) is 

25 amended, in the second sentence, by striking ‘‘The’’ 

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1 and inserting ‘‘Except to the extent action under 

2 section 1377 of the Federal Housing Enterprises Fi3 nancial Safety and Soundness Act of 1992 tempo4 rarily results in a lesser number, the’’. 

5 SEC. 154. ENFORCEMENT AND JURISDICTION. 

6 (a) IN GENERAL.—Section 1375 of the Federal 

7 Housing Enterprises Financial Safety and Soundness Act 

8 of 1992 (12 U.S.C. 4635) is amended— 

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

10 following: 

11 ‘‘(a) ENFORCEMENT.—The Director may, in the dis12 cretion of the Director, apply to the United States District 

13 Court for the District of Columbia, or the United States 

14 district court within the jurisdiction of which the head15 quarters of the regulated entity is located, for the enforce16 ment of any effective and outstanding notice, order, or 

17 subpoena issued under this title, or request that the Attor18 ney General of the United States bring such an action. 

19 Such court shall have jurisdiction and power to order and 

20 require compliance with such notice, order, or subpoena.’’; 

21 and 

22 (2) in subsection (b)— 

23 (A) by striking ‘‘section 1371, 1372, or 

24 1376 or’’; 

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1 (B) by inserting ‘‘subtitle C, or section 

2 1313A’’ after ‘‘subtitle B,’’; and 

3 (C) by inserting ‘‘, standard,’’ after ‘‘no4 tice’’ each place that term appears. 

5 (b) CONFORMING AMENDMENT.—Section 1379B of 

6 the Federal Housing Enterprises Financial Safety and 

7 Soundness Act of 1992 (12 U.S.C. 4641) is amended by 

8 striking subsection (c) and redesignating subsection (d) as 

9 subsection (c). 

10 SEC. 155. CIVIL MONEY PENALTIES. 

11 Section 1376 of the Federal Housing Enterprises Fi12 nancial Safety and Soundness Act of 1992 (12 U.S.C. 

13 4636) is amended— 

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

15 following: 

16 ‘‘(a) IN GENERAL.—The Director may impose a civil 

17 money penalty in accordance with this section on any reg18 ulated entity, or any executive offices of a regulated entity 

19 or any entity-affiliated party.’’; 

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

21 following: 

22 ‘‘(b) AMOUNT OF PENALTY.— 

23 ‘‘(1) FIRST TIER.—A regulated entity or entity24 affiliated party shall forfeit and pay a civil penalty 

25 of not more than $10,000 for each day during which 

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1 a violation continues, if such regulated entity or 

2 party— 

3 ‘‘(A) violates any provision of this title, the 

4 authorizing statutes, or any order, condition, 

5 rule, or regulation under this title or any au6 thorizing statute; 

7 ‘‘(B) violates any final or temporary order 

8 or notice issued pursuant to this title; 

9 ‘‘(C) violates any condition imposed in 

10 writing by the Director in connection with the 

11 grant of any application or other request by 

12 such regulated entity; 

13 ‘‘(D) violates any written agreement be14 tween the regulated entity and the Director; or 

15 ‘‘(E) engages in any conduct that the Di16 rector determines to be an unsafe or unsound 

17 practice. 

18 ‘‘(2) SECOND TIER.—Notwithstanding para19 graph (1), a regulated entity or entity-affiliated 

20 party shall forfeit and pay a civil penalty of not 

21 more than $50,000 for each day during which a vio22 lation, practice, or breach continues, if— 

23 ‘‘(A) the regulated entity or entity-affili24 ated party, respectively— 

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1 ‘‘(i) commits any violation described 

2 in any subparagraph of paragraph (1); 

3 ‘‘(ii) recklessly engages in an unsafe 

4 or unsound practice in conducting the af5 fairs of the regulated entity; or 

6 ‘‘(iii) breaches any fiduciary duty; and 

7 ‘‘(B) the violation, practice, or breach— 

8 ‘‘(i) is part of a pattern of mis9 conduct; 

10 ‘‘(ii) causes or is likely to cause more 

11 than a minimal loss to the regulated entity; 

12 or 

13 ‘‘(iii) results in pecuniary gain or 

14 other benefit to such party. 

15 ‘‘(3) THIRD TIER.—Notwithstanding para16 graphs (1) and (2), any regulated entity or entity17 affiliated party shall forfeit and pay a civil penalty 

18 in an amount not to exceed the applicable maximum 

19 amount determined under paragraph (4) for each 

20 day during which such violation, practice, or breach 

21 continues, if such regulated entity or entity-affiliated 

22 party— 

23 ‘‘(A) knowingly— 

24 ‘‘(i) commits any violation described 

25 in any subparagraph of paragraph (1); 

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1 ‘‘(ii) engages in any unsafe or un2 sound practice in conducting the affairs of 

3 the regulated entity; or 

4 ‘‘(iii) breaches any fiduciary duty; and 

5 ‘‘(B) knowingly or recklessly causes a sub6 stantial loss to the regulated entity or a sub7 stantial pecuniary gain or other benefit to such 

8 party by reason of such violation, practice, or 

9 breach. 

10 ‘‘(4) MAXIMUM AMOUNTS OF PENALTIES FOR

11 ANY VIOLATION DESCRIBED IN PARAGRAPH (3).— 

12 The maximum daily amount of any civil penalty 

13 which may be assessed pursuant to paragraph (3) 

14 for any violation, practice, or breach described in 

15 paragraph (3) is— 

16 ‘‘(A) in the case of any entity-affiliated 

17 party, an amount not to exceed $2,000,000; 

18 and 

19 ‘‘(B) in the case of any regulated entity, 

20 $2,000,000.’’; 

21 (3) in subsection (c)— 

22 (A) by striking ‘‘enterprise’’ each place 

23 that term appears and inserting ‘‘regulated en24 tity’’; 

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1 (B) by inserting ‘‘or entity-affiliated 

2 party’’ before ‘‘in writing’’; and 

3 (C) by inserting ‘‘or entity-affiliated party’’ 

4 before ‘‘has been given’’; 

5 (4) in subsection (d)— 

6 (A) by striking ‘‘or director’’ each place 

7 such term appears and inserting ‘‘director, or 

8 entity-affiliated party’’; 

9 (B) by striking ‘‘an enterprise’’ and insert10 ing ‘‘a regulated entity’’; 

11 (C) by striking ‘‘the enterprise’’ and in12 serting ‘‘the regulated entity’’; 

13 (D) by striking ‘‘request the Attorney Gen14 eral of the United States to’’; 

15 (E) by inserting ‘‘, or the United States 

16 district court within the jurisdiction of which 

17 the headquarters of the regulated entity is lo18 cated,’’ after ‘‘District of Columbia’’; 

19 (F) by striking ‘‘, or may, under the direc20 tion and control of the Attorney General of the 

21 United States, bring such an action’’; and 

22 (G) by striking ‘‘and section 1374’’; and 

23 (5) in subsection (g), by striking ‘‘An enter24 prise’’ and inserting ‘‘A regulated entity’’. 

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1 SEC. 156. CRIMINAL PENALTY. 

2 (a) IN GENERAL.—Subtitle C of the Federal Housing 

3 Enterprises Financial Safety and Soundness Act of 1992 

4 (12 U.S.C. 4631 et seq.), as amended by this Act, is 

5 amended by adding at the end the following: 

6 ‘‘SEC. 1378. CRIMINAL PENALTY. 

7 ‘‘Whoever, being subject to an order in effect under 

8 section 1377, without the prior written approval of the Di9 rector, knowingly participates, directly or indirectly, in any 

10 manner (including by engaging in an activity specifically 

11 prohibited in such an order) in the conduct of the affairs 

12 of any regulated entity shall, notwithstanding section 

13 3571 of title 18, be fined not more than $1,000,000, im14 prisoned for not more than 5 years, or both.’’. 

15 (b) TECHNICAL AND CONFORMING AMENDMENTS.— 

16 The Federal Housing Enterprises Financial Safety and 

17 Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is amend18 ed— 

19 (1) in section 1379 (as so designated by this 

20 Act)— 

21 (A) by striking ‘‘an enterprise’’ and insert22 ing ‘‘a regulated entity’’; and 

23 (B) by striking ‘‘the enterprise’’ and in24 serting ‘‘the regulated entity’’; 

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1 (2) in section 1379A (as so designated by this 

2 Act), by striking ‘‘an enterprise’’ and inserting ‘‘a 

3 regulated entity’’; 

4 (3) in section 1379B(c) (as so designated by 

5 this Act), by striking ‘‘enterprise’’ and inserting 

6 ‘‘regulated entity’’; and 

7 (4) in section 1379D (as so designated by this 

8 Act), by striking ‘‘enterprise’’ and inserting ‘‘regu9 lated entity’’. 

10 SEC. 157. NOTICE AFTER SEPARATION FROM SERVICE. 

11 Section 1379 of the Federal Housing Enterprises Fi12 nancial Safety and Soundness Act of 1992 (12 U.S.C. 

13 4637), as so designated by this Act, is amended— 

14 (1) by striking ‘‘2-year’’ and inserting ‘‘6-year’’; 

15 and 

16 (2) by inserting ‘‘or an entity-affiliated party’’ 

17 after ‘‘enterprise’’ each place that term appears. 

18 SEC. 158. SUBPOENA AUTHORITY. 

19 Section 1379B of the Federal Housing Enterprises 

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

21 4641) is amended— 

22 (1) in subsection (a)— 

23 (A) in the matter preceding paragraph 

24 (1)— 

25 (i) by striking ‘‘administrative’’; 

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1 (ii) by inserting ‘‘, examination, or in2 vestigation’’ after ‘‘proceeding’’; 

3 (iii) by striking ‘‘subchapter’’ and in4 serting ‘‘title’’; and 

5 (iv) by inserting ‘‘or any designated 

6 representative thereof, including any per7 son designated to conduct any hearing 

8 under this subtitle’’ after ‘‘Director’’; and 

9 (B) in paragraph (4), by striking ‘‘issued 

10 by the Director’’; 

11 (2) in subsection (b), by inserting ‘‘or in any 

12 territory or other place subject to the jurisdiction of 

13 the United States’’ after ‘‘State’’; 

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

15 following: 

16 ‘‘(c) ENFORCEMENT.— 

17 ‘‘(1) IN GENERAL.—The Director, or any party 

18 to proceedings under this subtitle, may apply to the 

19 United States District Court for the District of Co20 lumbia, or the United States district court for the 

21 judicial district of the United States in any territory 

22 in which such proceeding is being conducted, or 

23 where the witness resides or carries on business, for 

24 enforcement of any subpoena or subpoena duces 

25 tecum issued pursuant to this section. 

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1 ‘‘(2) POWER OF COURT.—The courts described 

2 under paragraph (1) shall have the jurisdiction and 

3 power to order and require compliance with any sub4 poena issued under paragraph (1)’’; 

5 (4) in subsection (d), by inserting ‘‘enterprise6 affiliated party’’ before ‘‘may allow’’; and 

7 (5) by adding at the end the following: 

8 ‘‘(e) PENALTIES.—A person shall be guilty of a mis9 demeanor, and upon conviction, shall be subject to a fine 

10 of not more than $1,000 or to imprisonment for a term 

11 of not more than 1 year, or both, if that person willfully 

12 fails or refuses, in disobedience of a subpoena issued under 

13 subsection (c), to— 

14 ‘‘(1) attend court; 

15 ‘‘(2) testify in court; 

16 ‘‘(3) answer any lawful inquiry; or 

17 ‘‘(4) produce books, papers, correspondence, 

18 contracts, agreements, or such other records as re19 quested in the subpoena.’’. 

20 Subtitle E—General Provisions 

21 SEC. 161. CONFORMING AND TECHNICAL AMENDMENTS. 

22 (a) AMENDMENTS TO 1992 ACT.—The Federal 

23 Housing Enterprises Financial Safety and Soundness Act 

24 of 1992 (12 U.S.C. 4501 et seq.), as amended by this Act, 

25 is amended— 

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

2 (A) in subsection (a)— 

3 (i) by striking ‘‘(a) OFFICE PER4 SONNEL.—The’’ and inserting ‘‘(a) IN

5 GENERAL.—Subject to title III of the 

6 Federal Housing Enterprise Regulatory 

7 Reform Act of 2007, the’’; and 

8 (ii) by striking ‘‘the Office’’ each place 

9 that term appears and inserting ‘‘the 

10 Agency’’; 

11 (B) in subsection (c), by striking ‘‘the Of12 fice’’ and inserting ‘‘the Agency’’; 

13 (C) in subsection (e), by striking ‘‘the Of14 fice’’ and inserting ‘‘the Agency’’; 

15 (D) by striking subsections (d) and (f); 

16 and 

17 (E) by redesignating subsection (e) as sub18 section (d); 

19 (2) in section 1319A (12 U.S.C. 4520)— 

20 (A) by striking ‘‘(a) IN GENERAL.—’’; 

21 and 

22 (B) by striking subsection (b); 

23 (3) in section 1364(c) (12 U.S.C. 4614(c)), by 

24 striking the last sentence; 

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1 (4) by striking section 1383 (12 U.S.C. 1451 

2 note); 

3 (5) in each of sections 1319D, 1319E, and 

4 1319F (12 U.S.C. 4523, 4524, 4525) by striking 

5 ‘‘the Office’’ each place that term appears and in6 serting ‘‘the Agency’’; and 

7 (6) in each of sections 1319B and 1369(a)(3) 

8 (12 U.S.C. 4521, 4619(a)(3)), by striking ‘‘Com9 mittee on Banking, Finance and Urban Affairs’’ 

10 each place that term appears and inserting ‘‘Com11 mittee on Financial Services’’. 

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

13 The Federal National Mortgage Association Charter Act 

14 (12 U.S.C. 1716 et seq.) is amended— 

15 (1) in each of sections 303(c)(2) (12 U.S.C. 

16 1718(c)(2)), 309(d)(3)(B) (12 U.S.C. 

17 1723a(d)(3)(B)), and 309(k)(1) (12 U.S.C. 

18 1723a(k)(1)), by striking ‘‘Director of the Office of 

19 Federal Housing Enterprise Oversight of the De20 partment of Housing and Urban Development’’ each 

21 place that term appears, and inserting ‘‘Director of 

22 the Federal Housing Enterprise Regulatory Agen23 cy’’; 

24 (2) in section 309— 

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1 (A) in subsection (m) (12 U.S.C. 

2 1723a(m))— 

3 (i) in paragraph (1), by striking ‘‘to 

4 the Secretary, in a form determined by the 

5 Secretary’’ and inserting ‘‘to the Director 

6 of the Federal Housing Enterprise Regu7 latory Agency, in a form determined by the 

8 Director’’; and 

9 (ii) in paragraph (2), by striking ‘‘to 

10 the Secretary, in a form determined by the 

11 Secretary’’ and inserting ‘‘to the Director 

12 of the Federal Housing Enterprise Regu13 latory Agency, in a form determined by the 

14 Director’’; 

15 (B) in subsection (n) (12 U.S.C. 

16 1723a(n))— 

17 (i) in paragraph (1), by striking ‘‘and 

18 the Secretary’’ and inserting ‘‘and the Di19 rector of the Federal Housing Enterprise 

20 Regulatory Agency’’; and 

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

22 ‘‘Secretary’’ each place that term appears 

23 and inserting ‘‘Director of the Federal 

24 Housing Enterprise Regulatory Agency’’; 

25 and 

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1 (C) in paragraph (3)(B), by striking ‘‘Sec2 retary’’ and inserting ‘‘Director of the Federal 

3 Housing Enterprise Regulatory Agency’’. 

4 (c) AMENDMENTS TO FREDDIE MAC CHARTER

5 ACT.—The Federal Home Loan Mortgage Corporation 

6 Act (12 U.S.C. 1451 et seq.) is amended— 

7 (1) in each of sections 303(b)(2) (12 U.S.C. 

8 1452(b)(2)), 303(h)(2) (12 U.S.C. 1452(h)(2)), and 

9 section 307(c)(1) (12 U.S.C. 1456(c)(1)), by strik10 ing ‘‘Director of the Office of Federal Housing En11 terprise Oversight of the Department of Housing 

12 and Urban Development’’ each place that term ap13 pears, and inserting ‘‘Director of the Federal Hous14 ing Enterprise Regulatory Agency’’; 

15 (2) in section 306 (12 U.S.C. 1455)— 

16 (A) in subsection (c)(2), by inserting ‘‘the’’ 

17 after ‘‘Secretary of’’; 

18 (B) in subsection (i)— 

19 (i) by striking ‘‘section 1316(c)’’ and 

20 inserting ‘‘section 306(c)’’; and 

21 (ii) by striking ‘‘section 106’’ and in22 serting ‘‘section 1316’’; and 

23 (C) in subsection (j), by striking ‘‘of sub24 stantially’’ and inserting ‘‘or substantially’’; and 

25 (3) in section 307 (12 U.S.C. 1456)— 

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1 (A) in subsection (e)— 

2 (i) in paragraph (1), by striking ‘‘to 

3 the Secretary, in a form determined by the 

4 Secretary’’ and inserting ‘‘to the Director 

5 of the Federal Housing Enterprise Regu6 latory Agency, in a form determined by the 

7 Director’’; and 

8 (ii) in paragraph (2), by striking ‘‘to 

9 the Secretary, in a form determined by the 

10 Secretary’’ and inserting ‘‘to the Director 

11 of the Federal Housing Enterprise Regu12 latory Agency, in a form determined by the 

13 Director’’; and 

14 (B) in subsection (f)— 

15 (i) in paragraph (1), by striking ‘‘and 

16 the Secretary’’ and inserting ‘‘and the Di17 rector of the Federal Housing Enterprise 

18 Regulatory Agency’’; 

19 (ii) in paragraph (2), by striking ‘‘the 

20 Secretary’’ each place that term appears 

21 and inserting ‘‘the Director of the Federal 

22 Housing Enterprise Regulatory Agency’’; 

23 and 

24 (iii) in paragraph (3)(B), by striking 

25 ‘‘Secretary’’ and inserting ‘‘Director of the 

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1 Federal Housing Enterprise Regulatory 

2 Agency’’. 

3 (d) AMENDMENT TO TITLE 18, UNITED STATES

4 CODE.—Section 1905 of title 18, United States Code, is 

5 amended by striking ‘‘Office of Federal Housing Enter6 prise Oversight’’ and inserting ‘‘Federal Housing Enter7 prise Regulatory Agency’’. 

8 (e) AMENDMENT TO FLOOD DISASTER PROTECTION

9 ACT OF 1973.—Section 102(f)(3)(A) of the Flood Dis10 aster Protection Act of 1973 (42 U.S.C. 4012a(f)(3)(A)) 

11 is amended by striking ‘‘Director of the Office of Federal 

12 Housing Enterprise Oversight of the Department of Hous13 ing and Urban Development’’ and inserting ‘‘Director of 

14 the Federal Housing Enterprise Regulatory Agency’’. 

15 (f) AMENDMENT TO DEPARTMENT OF HOUSING AND

16 URBAN DEVELOPMENT ACT.—Section 5 of the Depart17 ment of Housing and Urban Development Act (42 U.S.C. 

18 3534) is amended by striking subsection (d). 

19 (g) AMENDMENT TO TITLE 5, UNITED STATES

20 CODE.—Section 5313 of title 5, United States Code, is 

21 amended by striking the item relating to the Director of 

22 the Office of Federal Housing Enterprise Oversight, De23 partment of Housing and Urban Development and insert24 ing the following new item: 

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1 ‘‘Director of the Federal Housing Enterprise 

2 Regulatory Agency.’’. 

3 (h) AMENDMENT TO SARBANES-OXLEY ACT.—Sec4 tion 105(b)(5)(B)(ii)(II) of the Sarbanes-Oxley Act of 

5 2002 (15 U.S.C. 7215(b)(5)(B)(ii)(II)) is amended by in6 serting ‘‘and the Director of the Federal Housing Enter7 prise Regulatory Agency,’’ after ‘‘Commission,’’. 

8 (i) AMENDMENT TO FEDERAL DEPOSIT INSURANCE

9 ACT.—Section 11(t)(2)(A) of the Federal Deposit Insur10 ance Act (12 U.S.C. 1821(t)(2)(A)) is amended by adding 

11 at the end the following: 

12 ‘‘(vii) The Federal Housing Enter13 prise Regulatory Agency.’’. 

14 SEC. 162. PRESIDENTIALLY APPOINTED DIRECTORS OF EN15 TERPRISES. 

16 (a) FANNIE MAE.— 

17 (1) IN GENERAL.—Section 308(b) of the Fed18 eral National Mortgage Association Charter Act (12 

19 U.S.C. 1723(b)) is amended— 

20 (A) in the first sentence, by striking 

21 ‘‘eighteen persons, five of whom shall be ap22 pointed annually by the President of the United 

23 States, and the remainder of whom’’ and insert24 ing ‘‘13 persons, or such other number that the 

25 Director determines appropriate, who’’; 

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1 (B) in the second sentence, by striking 

2 ‘‘appointed by the President’’; 

3 (C) in the third sentence— 

4 (i) by striking ‘‘appointed or’’; and 

5 (ii) by striking ‘‘, except that any 

6 such appointed member may be removed 

7 from office by the President for good 

8 cause’’; 

9 (D) in the fourth sentence, by striking 

10 ‘‘elective’’; and 

11 (E) by striking the fifth sentence. 

12 (2) TRANSITIONAL PROVISION.—The amend13 ments made by paragraph (1) shall not apply to any 

14 appointed position of the board of directors of the 

15 Federal National Mortgage Association until the ex16 piration of the annual term for such position during 

17 which the effective date under section 163 occurs. 

18 (b) FREDDIE MAC.— 

19 (1) IN GENERAL.—Section 303(a)(2) of the 

20 Federal Home Loan Mortgage Corporation Act (12 

21 U.S.C. 1452(a)(2)) is amended— 

22 (A) in subparagraph (A)— 

23 (i) in the first sentence, by striking 

24 ‘‘13 persons, 5 of whom shall be appointed 

25 annually by the President of the United 

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1 States and the remainder of whom’’ and 

2 inserting ‘‘13 persons, or such other num3 ber as the Director determines appropriate, 

4 who’’; and 

5 (ii) in the second sentence, by striking 

6 ‘‘appointed by the President of the United 

7 States’’; 

8 (B) in subparagraph (B)— 

9 (i) by striking ‘‘such or’’; and 

10 (ii) by striking ‘‘, except that any ap11 pointed member may be removed from of12 fice by the President for good cause’’; and 

13 (C) in subparagraph (C)— 

14 (i) by striking the first sentence; and 

15 (ii) by striking ‘‘elective’’. 

16 (2) TRANSITIONAL PROVISION.—The amend17 ments made by paragraph (1) shall not apply to any 

18 appointed position of the board of directors of the 

19 Federal Home Loan Mortgage Corporation until the 

20 expiration of the annual term for such position dur21 ing which the effective date under section 163 oc22 curs. 

23 SEC. 163. EFFECTIVE DATE. 

24 Except as otherwise specifically provided in this title, 

25 this title and the amendments made by this title shall take 

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1 effect on, and shall apply beginning on, the date of enact2 ment of this Act. 

3 TITLE II—FEDERAL HOME LOAN 

4 BANKS 

5 SEC. 201. DIRECTORS. 

6 Section 7 of the Federal Home Loan Bank Act (12 

7 U.S.C. 1427) is amended— 

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

9 following: 

10 ‘‘(a) NUMBER; ELECTION; QUALIFICATIONS; CON11 FLICTS OF INTEREST.— 

12 ‘‘(1) IN GENERAL.—Subject to paragraphs (2) 

13 through (4), the management of each Federal Home 

14 Loan Bank shall be vested in a board of 13 direc15 tors, or such other number as the Director deter16 mines appropriate. 

17 ‘‘(2) BOARD MAKEUP.—The board of directors 

18 of each Bank shall be comprised of— 

19 ‘‘(A) member directors, who shall comprise 

20 at least the majority of the members of the 

21 board of directors; and 

22 ‘‘(B) independent directors, who shall comprise not fewer than 1 23 ⁄3 of the members of the 

24 board of directors. 

25 ‘‘(3) SELECTION CRITERIA.— 

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1 ‘‘(A) IN GENERAL.—Each member of the 

2 board of directors shall be— 

3 ‘‘(i) elected by plurality vote of the 

4 members, in accordance with procedures 

5 established under this section; and 

6 ‘‘(ii) a citizen of the United States. 

7 ‘‘(B) INDEPENDENT DIRECTOR CRI8 TERIA.— 

9 ‘‘(i) PUBLIC INTEREST.—Not fewer 

10 than 2 of the independent directors shall 

11 be selected from among representatives of 

12 organizations having more than a 2-year 

13 history of representing consumer or com14 munity interests on banking services, cred15 it needs, housing, or financial consumer 

16 protections. 

17 ‘‘(ii) CONFLICTS OF INTEREST.—No 

18 independent director may, during the term 

19 of service on the board of directors, serve 

20 as an officer of any Federal Home Loan 

21 Bank or as a director or officer of any 

22 member Bank. 

23 ‘‘(4) DEFINITIONS.—For purposes of this sec24 tion, the following definitions shall apply: 

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1 ‘‘(A) INDEPENDENT DIRECTOR.—The 

2 terms ‘independent director’ and ‘independent 

3 directorship’ mean a member of the board of di4 rectors of a Federal Home Loan Bank who is 

5 a bona fide resident of the district in which the 

6 Federal Home Loan Bank is located, or the di7 rectorship held by such a person, respectively. 

8 ‘‘(B) MEMBER DIRECTOR.—The terms 

9 ‘member director’ and ‘member directorship’ 

10 mean a member of the board of directors of a 

11 Federal Home Loan Bank who is an officer or 

12 director of a member institution that is located 

13 in the district in which the Federal Home Loan 

14 Bank is located, or the directorship held by 

15 such a person, respectively.’’; 

16 (2) by striking ‘‘elective’’ each place that term 

17 appears, other than in subsections (d), (e), and (f), 

18 and inserting ‘‘member’’; 

19 (3) in subsection (b)— 

20 (A) by striking the subsection heading and 

21 all that follows through ‘‘Each elective director22 ship’’ and inserting the following: 

23 ‘‘(b) DIRECTORSHIPS.— 

24 ‘‘(1) MEMBER DIRECTORSHIPS.—Each member 

25 directorship’’; and 

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1 (B) by adding at the end the following: 

2 ‘‘(2) INDEPENDENT DIRECTORSHIPS.— 

3 ‘‘(A) ELECTIONS.—Each independent di4 rector— 

5 ‘‘(i) shall be elected by the members 

6 entitled to vote, from among eligible per7 sons nominated by the board of directors 

8 of the Bank; and 

9 ‘‘(ii) shall be filled by a plurality of 

10 the votes of the members of the Bank at 

11 large, with each member having the num12 ber of votes for each such directorship as 

13 it has under subsection (b)(1) in an elec14 tion to fill member directorships. 

15 ‘‘(B) CRITERIA.—Nominees shall meet all 

16 applicable requirements prescribed in this sec17 tion. 

18 ‘‘(C) NOMINATION AND ELECTION PROCE19 DURES.—Procedures for nomination and elec20 tion of independent directors shall be prescribed 

21 by the bylaws of each Federal Home Loan 

22 Bank, in a manner consistent with the rules 

23 and regulations of the Agency.’’; 

24 (4) in subsection (c), by striking the second, 

25 third, and fifth sentences; 

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1 (5) in subsection (d)— 

2 (A) in the first sentence— 

3 (i) by striking ‘‘, whether elected or 

4 appointed,’’; and 

5 (ii) by striking ‘‘3 years’’ and insert6 ing ‘‘4 years’’; 

7 (B) in the second sentence— 

8 (i) by striking ‘‘Federal Home Loan 

9 Bank System Modernization Act of 1999’’ 

10 and inserting ‘‘Federal Housing Enterprise 

11 Regulatory Reform Act of 2007’’; 

(ii) by striking ‘‘1 12 ⁄3’’ and inserting 

‘‘1 13 ⁄4’’; and 

14 (iii) by striking ‘‘or appointed’’; and 

15 (C) in the third sentence— 

16 (i) by striking ‘‘an elective’’ each place 

17 that term appears and inserting ‘‘a’’; and 

18 (ii) by striking ‘‘in any elective direc19 torship or elective directorships’’; 

20 (6) in subsection (f)— 

21 (A) by striking paragraph (2); 

22 (B) by striking ‘‘appointed or’’ each place 

23 that term appears; and 

24 (C) in paragraph (3)— 

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1 (i) by striking ‘‘(3) ELECTED BANK

2 DIRECTORS.—’’ and inserting ‘‘(2) 

3 ELECTION PROCESS.—’’; and 

4 (ii) by striking ‘‘elective’’ each place 

5 that term appears; 

6 (7) in subsection (i)— 

7 (A) in paragraph (1), by striking ‘‘(1) IN

8 GENERAL.—Subject to paragraph (2), each’’ 

9 and inserting ‘‘Each’’; and 

10 (B) by striking paragraph (2); and 

11 (8) by adding at the end the following: 

12 ‘‘(l) TRANSITION RULE.—Any member of the board 

13 of directors of a Bank elected or appointed in accordance 

14 with this section prior to the date of enactment of this 

15 subsection may continue to serve as a member of that 

16 board of directors for the remainder of the existing term 

17 of service.’’. 

18 SEC. 202. DEFINITIONS. 

19 Section 2 of the Federal Home Loan Bank Act (12 

20 U.S.C. 1422) is amended— 

21 (1) by striking paragraphs (1), (10), and (11); 

22 (2) by redesignating paragraphs (2) through 

23 (9) as paragraphs (1) through (8), respectively; 

24 (3) by redesignating paragraphs (12) and (13) 

25 as paragraphs (9) and (10), respectively; and 

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1 (4) by adding at the end the following: 

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

3 the Director of the Federal Housing Enterprise Reg4 ulatory Agency. 

5 ‘‘(12) AGENCY.—The term ‘Agency’ means the 

6 Federal Housing Enterprise Regulatory Agency, es7 tablished under section 1311 of the Federal Housing 

8 Enterprises Financial Safety and Soundness Act of 

9 1992. 

10 ‘‘(13) FINANCE FACILITY.—The term ‘Finance 

11 Facility’ means the Federal Home Loan Bank Fi12 nance Facility established under section 11A.’’. 

13 SEC. 203. AGENCY OVERSIGHT OF FEDERAL HOME LOAN 

14 BANKS. 

15 The Federal Home Loan Bank Act (12 U.S.C. 1421 

16 et seq.), other than in provisions of that Act added or 

17 amended otherwise by this Act, is amended— 

18 (1) by striking sections 2A, 2B, and 20 (12 

19 U.S.C. 1422a, 1422b, 1440); 

20 (2) in section 18 (12 U.S.C. 1438), by striking 

21 subsection (b); 

22 (3) in section 11 (12 U.S.C. 1431)— 

23 (A) by striking subsections (b) and (c); 

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1 (B) by redesignating subsections (d) 

2 through (k) as subsections (c) through (j), re3 spectively; 

4 (C) in subsection (a)— 

5 (i) by striking ‘‘Board’’ each place 

6 that term appears and inserting ‘‘Direc7 tor’’; and 

8 (ii) by striking ‘‘upon such terms and 

9 conditions as the Board may approve’’; 

10 and 

11 (D) by inserting after subsection (a) the 

12 following: 

13 ‘‘(b) ISSUANCE OF FEDERAL HOME LOAN BANK

14 BONDS.—The Finance Facility may issue consolidated 

15 Federal Home Loan Bank debt, which shall be the joint 

16 and several obligations of all of the Federal Home Loan 

17 Banks, and shall be issued upon such terms and condi18 tions as set by the Finance Facility for the Federal Home 

19 Loan Banks.’’; 

20 (4) in section 6 (12 U.S.C. 1426)— 

21 (A) in subsection (b)(1), in the matter pre22 ceding subparagraph (A), by striking ‘‘Finance 

23 Board approval’’ and inserting ‘‘approval by the 

24 Director’’; and 

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1 (B) in each of subsections (c)(4)(B) and 

2 (d)(2), by striking ‘‘Finance Board regulations’’ 

3 each place that term appears and inserting 

4 ‘‘regulations of the Director’’; 

5 (5) in section 10(b) (12 U.S.C. 1430(b))— 

6 (A) in the subsection heading, by striking 

7 ‘‘FORMAL BOARD RESOLUTION’’ and inserting 

8 ‘‘APPROVAL OF DIRECTOR’’; and 

9 (B) by striking ‘‘by formal resolution’’; 

10 (6) in section 21(b)(5) (12 U.S.C. 1441(b)(5)), 

11 by striking ‘‘Chairperson of the Federal Housing Fi12 nance Board’’ and inserting ‘‘Director’’; 

13 (7) in section 15 (12 U.S.C. 1435), by striking 

14 ‘‘issued with the approval of the Board’’ and insert15 ing ‘‘issued under section 11(b)’’; 

16 (8) by striking ‘‘the Board’’ each place that 

17 term appears and inserting ‘‘the Director’’; 

18 (9) by striking ‘‘The Board’’ each place that 

19 term appears and inserting ‘‘The Director’’; 

20 (10) by striking ‘‘the Finance Board’’ each 

21 place that term appears and inserting ‘‘the Direc22 tor’’; 

23 (11) by striking ‘‘The Finance Board’’ each 

24 place that term appears and inserting ‘‘The Direc25 tor’’; and 

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1 (12) by striking ‘‘Federal Housing Finance 

2 Board’’ each place that term appears and inserting 

3 ‘‘Director’’. 

4 SEC. 204. FEDERAL HOME LOAN BANK FINANCE FACILITY. 

5 The Federal Home Loan Bank Act (12 U.S.C. 1421 

6 et seq.) is amended by inserting after section 11 the fol7 lowing: 

8 ‘‘SEC. 11A. FEDERAL HOME LOAN BANK FINANCE FACILITY. 

9 ‘‘(a) ESTABLISHMENT.— 

10 ‘‘(1) IN GENERAL.—The Federal Home Loan 

11 Banks shall establish a Federal Home Loan Bank 

12 Finance Facility. 

13 ‘‘(2) PURPOSES.—The purposes of the Finance 

14 Facility are— 

15 ‘‘(A) to issue and service the consolidated 

16 obligations of the Federal Home Loan Banks in 

17 accordance with this Act; and 

18 ‘‘(B) to perform all other necessary and 

19 proper functions in relation to the issuance and 

20 service of such obligations, as fiscal agent on 

21 behalf of the Federal Home Loan Banks, and 

22 any other functions performed by the Office of 

23 Finance on behalf of the Financing Corporation 

24 (established under section 21) and the Resolummaher on PRODPC74 with BILLS

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1 tion Funding Corporation (established under 

2 section 21B). 

3 ‘‘(3) TRANSFER OF FUNCTIONS.— 

4 ‘‘(A) IN GENERAL.—The functions of the 

5 Office of Finance of the Federal Home Loan 

6 Banks shall be transferred to the Finance Fa7 cility on the effective time. 

8 ‘‘(B) ORGANIZATIONAL MEETING.—The 

9 organizational meeting of the management 

10 board of the Finance Facility shall occur as 

11 soon as practicable after the date of enactment 

12 of the Federal Housing Enterprise Regulatory 

13 Reform Act of 2007. 

14 ‘‘(C) INTERIM PROCEDURES.—Until the ef15 fective time, the predecessor office shall con16 tinue to operate as if this section had not been 

17 enacted. 

18 ‘‘(D) REFERENCES.—After the effective 

19 time, any reference under any provision of Fed20 eral law to the Office of Finance and the Man21 aging Director of the Office of Finance shall be 

22 deemed to be references to the Finance Facility 

23 and the chief executive officer of the Finance 

24 Facility, respectively. 

25 ‘‘(4) SUCCESSION.— 

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1 ‘‘(A) ASSETS AND LIABILITIES.—On 

2 and after the effective time, the Finance 

3 Facility shall, by operation of law and 

4 without any further action by the Federal 

5 Housing Finance Board, the Director, the 

6 predecessor office, or any court, succeed to 

7 the assets of, and assume all debts, obliga8 tions, contracts, and other liabilities of the 

9 predecessor office, matured or unmatured, 

10 accrued or absolute, contingent or other11 wise, and whether or not reflected or re12 served against on balance sheets, books of 

13 account, or records of the predecessor of14 fice. 

15 ‘‘(B) CONTRACTS.—On and after the 

16 effective time, the existing contractual obli17 gations of the Federal Housing Finance 

18 Board, solely in its capacity as issuer of 

19 consolidated obligations of the Federal 

20 Home Loan Banks and the predecessor of21 fice shall, by operation of law and without 

22 any further action by the Federal Housing 

23 Finance Board, the Director, the prede24 cessor office, or any court, become obligammaher on PRODPC74 with BILLS

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1 tions, entitlements, and instruments of the 

2 Finance Facility. 

3 ‘‘(C) TAXATION.—The succession to 

4 assets, assumption of liabilities, conversion 

5 of obligations and instruments, and effec6 tuation of any other transaction by the Fi7 nance Facility to carry out this subsection 

8 shall not be treated as a taxable event 

9 under the laws of any State, or any polit10 ical subdivision thereof. 

11 ‘‘(b) POWERS.—Subject to the provisions of this Act, 

12 and such regulations as the Director may prescribe, the 

13 Finance Facility shall have the power— 

14 ‘‘(1) to issue and service Federal Home Loan 

15 Bank consolidated notes, consolidated bonds, con16 solidated debentures, and other consolidated obliga17 tions authorized under section 11, as agent for the 

18 Federal Home Loan Banks; 

19 ‘‘(2) to determine the amount, maturities, rate 

20 of interest, terms, and other conditions of Federal 

21 Home Loan Bank consolidated obligations; 

22 ‘‘(3) to make contracts; 

23 ‘‘(4) to determine the terms and conditions 

24 under which the Finance Facility may indemnify the 

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1 members of the management board, as well as offi2 cers, employees, and agents of the Finance Facility; 

3 ‘‘(5) to determine and implement the method4 ology for assessments of the Federal Home Loan 

5 Banks to fund all of the expenses of the Finance 

6 Facility; and 

7 ‘‘(6) to exercise such incidental powers not in8 consistent with the provisions of this Act as are nec9 essary or advisable to carry out the purposes of the 

10 Finance Facility. 

11 ‘‘(c) MANAGEMENT OF THE FINANCE FACILITY.— 

12 ‘‘(1) ESTABLISHMENT.—The management of 

13 the Finance Facility shall be vested in a manage14 ment board composed of the president of each of the 

15 Federal Home Loan Banks, ex officio. 

16 ‘‘(2) DUTIES.—The management board of the 

17 Finance Facility shall administer the affairs of the 

18 Finance Facility in accordance with the provisions of 

19 this section. 

20 ‘‘(3) INTERIM APPOINTMENTS.—If the office of 

21 the president of any Federal Home Loan Bank is 

22 vacant, the person serving in such capacity on an 

23 acting basis shall serve on the management board of 

24 the Finance Facility until replaced by the next permmaher on PRODPC74 with BILLS

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1 son to fill the office of the president of that Federal 

2 Home Loan Bank. 

3 ‘‘(4) POWERS.—The management board of the 

4 Finance Facility shall exercise such powers as may 

5 be necessary or advisable to carry out this section, 

6 including the power to— 

7 ‘‘(A) set policies for the management and 

8 operation of the Finance Facility; 

9 ‘‘(B) approve a strategic business plan for 

10 the Finance Facility; 

11 ‘‘(C) review, adopt, and monitor annual 

12 operation and capital budgets of the Finance 

13 Facility; 

14 ‘‘(D) constitute and perform the duties of 

15 an audit committee, which to the extent pos16 sible shall operate consistent with— 

17 ‘‘(i) the requirements established for 

18 the Federal Home Loan Banks; and 

19 ‘‘(ii) the requirements pertaining to 

20 audit committee reports set forth in the 

21 rules of the Securities and Exchange Com22 mission; 

23 ‘‘(E) select, employ, determine the com24 pensation for, and assign the duties and funcmmaher on PRODPC74 with BILLS

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1 tions of the President of the Finance Facility, 

2 who shall— 

3 ‘‘(i) be the chief executive officer for 

4 the Finance Facility and shall direct the 

5 implementation of the policies adopted by 

6 the management board of the Finance Fa7 cility; 

8 ‘‘(ii) serve as a member of the Direc9 torate of the Financing Corporation, under 

10 section 21(b)(1)(A); and 

11 ‘‘(iii) serve as a member of the Direc12 torate of the Resolution Funding Corpora13 tion under section 21B(c)(1)(A); 

14 ‘‘(F) provide for the review and approval 

15 of all contracts of the Finance Facility; 

16 ‘‘(G) have the exclusive authority to em17 ploy and contract for the services of an inde18 pendent, external auditor for the annual and 

19 quarterly combined financial statements of the 

20 Federal Home Loan Banks; and 

21 ‘‘(H) select, evaluate, determine the com22 pensation of, and, as appropriate, replace the 

23 internal auditor of the Finance Facility, who 

24 may be removed only by vote of the manage25 ment board of the Finance Facility. 

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1 ‘‘(5) PAY.—The members of the management 

2 board of the Finance Facility shall not receive com3 pensation for their services as members of the man4 agement board. 

5 ‘‘(6) QUORUM REQUIREMENT.— 

6 ‘‘(A) IN GENERAL.—No business of the Fi7 nance Facility may be conducted by the man8 agement board unless a quorum of the members 

9 of the management board is present in person 

10 or by telephone, or through action taken by 

11 written consent executed by all of the members 

12 of the management board. 

13 ‘‘(B) NUMBER.—A quorum shall be a ma14 jority of the members of the management 

15 board. 

16 ‘‘(C) VOTE REQUIRED.—Action taken by 

17 the management board shall be approved by a 

18 majority of the members in attendance at any 

19 meeting at which a quorum is present, unless 

20 the management board adopts procedures re21 quiring a greater voting requirement. 

22 ‘‘(7) APPOINTMENT OF OFFICERS AND ADOP23 TION OF RULES OF PROCEDURE.—The management 

24 board of the Finance Facility shall— 

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1 ‘‘(A) select, from among the members of 

2 such board, a Chairperson and a Vice Chair3 person; and 

4 ‘‘(B) adopt bylaws and other rules of pro5 cedure for actions before the management 

6 board, including— 

7 ‘‘(i) the establishment of 1 or more 

8 committees to take action on behalf of the 

9 management board; and 

10 ‘‘(ii) the delegation of powers of the 

11 management board to any committee or of12 ficer of the Finance Facility. 

13 ‘‘(d) STATUS.—Except to the extent expressly pro14 vided in this Act, or in rules or regulations promulgated 

15 by the Director, or unless the context clearly indicates oth16 erwise, the Finance Facility shall be accorded the same 

17 status as a Federal Home Loan Bank for purposes of any 

18 other provision of law (including section 13), other than 

19 section 1369F of the Federal Housing Enterprises Finan20 cial Safety and Soundness Act of 1992. 

21 ‘‘(e) DEFINITIONS.—As used in this section— 

22 ‘‘(1) the term ‘effective time’ means the conclu23 sion of the organizational meeting of the manage24 ment board of the Finance Facility; 

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1 ‘‘(2) the term ‘Finance Facility’ includes a cor2 poration, partnership, limited liability company, or 

3 joint venture that is jointly owned by the Federal 

4 Home Loan Banks; 

5 ‘‘(3) the term ‘management board’ means the 

6 management board of the Finance Facility estab7 lished in accordance with subsection (c); and 

8 ‘‘(4) the term ‘predecessor office’ means the Of9 fice of Finance established as a joint office of the 

10 Federal Home Loan Banks.’’. 

11 SEC. 205. EXCLUSION FROM CERTAIN SECURITIES REPORT12 ING REQUIREMENTS. 

13 (a) IN GENERAL.—The Federal Home Loan Banks 

14 shall be exempt from compliance with— 

15 (1) sections 13(e), 14(a), 14(c), and 17A of the 

16 Securities Exchange Act of 1934, and related Com17 mission regulations; and 

18 (2) section 15 of the Securities Exchange Act 

19 of 1934, and related Commission regulations, with 

20 respect to transactions in the capital stock of a Fed21 eral Home Loan Bank. 

22 (b) MEMBER EXEMPTION.—The members of the 

23 Federal Home Loan Bank System shall be exempt from 

24 compliance with sections 13(d), 13(f), 13(g), 14(d), and 

25 16 of the Securities Exchange Act of 1934, and related 

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1 Commission regulations, with respect to ownership of or 

2 transactions in the capital stock of the Federal Home 

3 Loan Banks by such members. 

4 (c) EXEMPTED AND GOVERNMENT SECURITIES.— 

5 (1) CAPITAL STOCK.—The capital stock issued 

6 by each of the Federal Home Loan Banks under 

7 section 6 of the Federal Home Loan Bank Act are— 

8 (A) exempted securities, within the mean9 ing of section 3(a)(2) of the Securities Act of 

10 1933; and 

11 (B) exempted securities, within the mean12 ing of section 3(a)(12)(A) of the Securities Ex13 change Act of 1934. 

14 (2) OTHER OBLIGATIONS.—The debentures, 

15 bonds, and other obligations issued under section 11 

16 of the Federal Home Loan Bank Act (12 U.S.C. 

17 1431) are— 

18 (A) exempted securities, within the mean19 ing of section 3(a)(2) of the Securities Act of 

20 1933; 

21 (B) government securities, within the 

22 meaning of section 3(a)(42) of the Securities 

23 Exchange Act of 1934; and 

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1 (C) government securities, within the 

2 meaning of section 2(a)(16) of the Investment 

3 Company Act of 1940. 

4 (3) BROKERS AND DEALERS.—A person that 

5 effects transactions in the capital stock or other obli6 gations of a Federal Home Loan Bank, for the ac7 count of others or for his own account, as applicable, 

8 is excluded from the definition of— 

9 (A) the term ‘‘government securities 

10 broker’’ under section 3(a)(43) of the Securities 

11 Exchange Act of 1934; and 

12 (B) the term ‘‘government securities deal13 er’’ under section 3(a)(44) of the Securities Ex14 change Act of 1934. 

15 (d) EXEMPTION FROM REPORTING REQUIRE16 MENTS.—The Federal Home Loan Banks shall be exempt 

17 from periodic reporting requirements under the securities 

18 laws pertaining to the disclosure of— 

19 (1) related party transactions that occur in the 

20 ordinary course of the business of the Banks with 

21 members; and 

22 (2) the unregistered sales of equity securities. 

23 (e) TENDER OFFERS.—Commission rules relating to 

24 tender offers shall not apply in connection with transmmaher on PRODPC74 with BILLS

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1 actions in the capital stock of the Federal Home Loan 

2 Banks. 

3 (f) REGULATIONS.— 

4 (1) FINAL RULES.—Not later than 1 year after 

5 the date of enactment of this Act, the Commission 

6 shall issue final rules to implement this section and 

7 the exemptions provided in this section. 

8 (2) CONSIDERATIONS.—In issuing final regula9 tions under this section, the Commission shall con10 sider the distinctive characteristics of the Federal 

11 Home Loan Banks when evaluating— 

12 (A) the accounting treatment with respect 

13 to the payment to the Resolution Funding Cor14 poration; 

15 (B) the role of the combined financial 

16 statements of the Federal Home Loan Banks; 

17 (C) the accounting classification of redeem18 able capital stock; and 

19 (D) the accounting treatment related to 

20 the joint and several nature of the obligations 

21 of the Banks. 

22 (g) DEFINITIONS.—As used in this section— 

23 (1) the terms ‘‘Bank’’, ‘‘Federal Home Loan 

24 Bank’’, ‘‘member’’, and ‘‘Federal Home Loan Bank 

25 System’’ have the same meanings as in section 2 of 

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1 the Federal Home Loan Bank Act (12 U.S.C. 

2 1422); 

3 (2) the term ‘‘Commission’’ means the Securi4 ties and Exchange Commission; and 

5 (3) the term ‘‘securities laws’’ has the same 

6 meaning as in section 3(a)(47) of the Securities Ex7 change Act of 1934 (15 U.S.C. 78c(a)(47)). 

8 SEC. 206. MERGERS. 

9 Section 26 of the Federal Home Loan Bank Act (12 

10 U.S.C. 1446) is amended— 

11 (1) by striking ‘‘Whenever’’ and inserting ‘‘(a) 

12 IN GENERAL.—Whenever’’; and 

13 (2) by adding at the end the following: 

14 ‘‘(b) MERGERS AUTHORIZED.— 

15 ‘‘(1) IN GENERAL.—Any Federal Home Loan 

16 Bank may, with the approval of the Director and of 

17 the boards of directors of the Banks involved, merge 

18 with another Bank. 

19 ‘‘(2) REGULATIONS REQUIRED.—The Director 

20 shall promulgate regulations establishing the condi21 tions and procedures for the consideration and ap22 proval of any voluntary merger described in para23 graph (1).’’. 

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1 SEC. 207. AUTHORITY TO REDUCE DISTRICTS. 

2 Section 3 of the Federal Home Loan Bank Act (12 

3 U.S.C. 1423) is amended— 

4 (1) by striking ‘‘As soon’’ and inserting ‘‘(a) IN

5 GENERAL.—As soon’’; and 

6 (2) by adding at the end the following: 

7 ‘‘(b) AUTHORITY TO REDUCE DISTRICTS.—Notwith8 standing subsection (a), the number of districts may be 

9 reduced to a number less than 8— 

10 ‘‘(1) pursuant to a voluntary merger between 

11 Banks, as approved pursuant to section 26(b); or 

12 ‘‘(2) pursuant to a decision by the Director to 

13 liquidate a bank pursuant to section 1367 of the 

14 Federal Housing Enterprises Financial Safety and 

15 Soundness Act of 1992.’’. 

16 SEC. 208. MANAGEMENT OF HOME LOAN BANKS. 

17 (a) BOARD OF DIRECTORS.—Section 7(a)(1) of the 

18 Federal Home Loan Bank Act (12 U.S.C. 1427(a)(1)) is 

19 amended to read as follows: 

20 ‘‘(1) IN GENERAL.—Subject to paragraphs (2) 

21 through (4), and except to the extent that action 

22 under section 1377 of the Federal Housing Enter23 prises Financial Safety and Soundness Act of 1992 

24 results in a lesser number, the management of each 

25 Federal home loan bank shall be vested in a board 

26 of 13 directors, or such other number as the board 

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1 of directors of each Federal home loan bank deter2 mines appropriate.’’. 

3 (b) APPORTIONMENT AMONG STATES; DESIGNATION

4 OF STATE LOCATION.—Section 7(c) of the Federal Home 

5 Loan Bank Act (12 U.S.C. 1427(c)) is amended to read 

6 s follows: 

7 ‘‘(c) APPORTIONMENT AMONG STATES; DESIGNA8 TION OF STATE LOCATION.—The number of elective direc9 torships designated as representing the members located 

10 in each separate State in a bank district shall be deter11 mined by the Director, in the approximate ratio of the per12 centage of the required stock, as determined pursuant to 

13 regulation of the Director, of the members located in the 

14 State at the end of the calendar year next preceding the 

15 date of the election to the total required stock, as so deter16 mined, of all members of such bank at the end of such 

17 year, except that in the case of each State, such number 

18 shall not be less than 1 or 2, as determined by the board 

19 of directors of each Federal home loan bank, and shall 

20 be not more than 6.’’. 

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1 TITLE III—TRANSFER OF FUNC2 TIONS, PERSONNEL, AND 

3 PROPERTY OF OFHEO AND 

4 THE FEDERAL HOUSING FI5 NANCE BOARD 

6 Subtitle A—OFHEO 

7 SEC. 301. ABOLISHMENT OF OFHEO. 

8 (a) IN GENERAL.—Effective at the end of the 1-year 

9 period beginning on the date of enactment of this Act, the 

10 Office of Federal Housing Enterprise Oversight of the De11 partment of Housing and Urban Development and the po12 sitions of the Director and Deputy Director of such Office 

13 are abolished. 

14 (b) DISPOSITION OF AFFAIRS.—During the 1-year 

15 period beginning on the date of enactment of this Act, the 

16 Director of the Office of Federal Housing Enterprise 

17 Oversight, solely for the purpose of winding up the affairs 

18 of the Office of Federal Housing Enterprise Oversight— 

19 (1) shall manage the employees of such Office 

20 and provide for the payment of the compensation 

21 and benefits of any such employee which accrue be22 fore the effective date of the transfer of such em23 ployee under section 303; and 

24 (2) may take any other action necessary for the 

25 purpose of winding up the affairs of the Office. 

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1 (c) STATUS OF EMPLOYEES BEFORE TRANSFER.— 

2 The amendments made by title I and the abolishment of 

3 the Office of Federal Housing Enterprise Oversight under 

4 subsection (a) of this section may not be construed to af5 fect the status of any employee of such Office as an em6 ployee of an agency of the United States for purposes of 

7 any other provision of law before the effective date of the 

8 transfer of any such employee under section 303. 

9 (d) USE OF PROPERTY AND SERVICES.— 

10 (1) PROPERTY.—The Director may use the 

11 property of the Office of Federal Housing Enter12 prise Oversight to perform functions which have 

13 been transferred to the Director for such time as is 

14 reasonable to facilitate the orderly transfer of func15 tions transferred under any other provision of this 

16 Act or any amendment made by this Act to any 

17 other provision of law. 

18 (2) AGENCY SERVICES.—Any agency, depart19 ment, or other instrumentality of the United States, 

20 and any successor to any such agency, department, 

21 or instrumentality, which was providing supporting 

22 services to the Office of Federal Housing Enterprise 

23 Oversight before the expiration of the period under 

24 subsection (a) in connection with functions that are 

25 transferred to the Director shall— 

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1 (A) continue to provide such services, on a 

2 reimbursable basis, until the transfer of such 

3 functions is complete; and 

4 (B) consult with any such agency to co5 ordinate and facilitate a prompt and reasonable 

6 transition. 

7 (e) SAVINGS PROVISIONS.— 

8 (1) EXISTING RIGHTS, DUTIES, AND OBLIGA9 TIONS NOT AFFECTED.—Subsection (a) shall not af10 fect the validity of any right, duty, or obligation of 

11 the United States, the Director of the Office of Fed12 eral Housing Enterprise Oversight, or any other per13 son, which— 

14 (A) arises under— 

15 (i) the Federal Housing Enterprises 

16 Financial Safety and Soundness Act of 

17 1992; 

18 (ii) the Federal National Mortgage 

19 Association Charter Act; 

20 (iii) the Federal Home Loan Mort21 gage Corporation Act; 

22 (iv) or any other provision of law ap23 plicable with respect to such Office; and 

24 (B) existed on the day before the date of 

25 abolishment under subsection (a). 

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1 (2) CONTINUATION OF SUITS.—No action or 

2 other proceeding commenced by or against the Di3 rector of the Office of Federal Housing Enterprise 

4 Oversight in connection with functions that are 

5 transferred to the Director of the Federal Housing 

6 Enterprise Regulatory Agency shall abate by reason 

7 of the enactment of this Act, except that the Direc8 tor of the Federal Housing Enterprise Regulatory 

9 Agency shall be substituted for the Director of the 

10 Office of Federal Housing Enterprise Oversight as a 

11 party to any such action or proceeding. 

12 SEC. 302. CONTINUATION AND COORDINATION OF CERTAIN 

13 REGULATIONS. 

14 (a) IN GENERAL.—All regulations, orders, and deter15 minations described in subsection (b) shall remain in ef16 fect according to the terms of such regulations, orders, 

17 and determinations, and shall be enforceable by or against 

18 the Director or the Secretary of Housing and Urban De19 velopment, as the case may be, until modified, terminated, 

20 set aside, or superseded in accordance with applicable law 

21 by the Director or the Secretary, as the case may be, any 

22 court of competent jurisdiction, or operation of law. 

23 (b) APPLICABILITY.—A regulation, order, or deter24 mination is described in this subsection if it— 

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1 (1) was issued, made, prescribed, or allowed to 

2 become effective by— 

3 (A) the Office of Federal Housing Enter4 prise Oversight; 

5 (B) the Secretary of Housing and Urban 

6 Development, and relates to the authority of 

7 the Secretary under— 

8 (i) the Federal Housing Enterprises 

9 Financial Safety and Soundness Act of 

10 1992; 

11 (ii) the Federal National Mortgage 

12 Association Charter Act, with respect to 

13 the Federal National Mortgage Associa14 tion; or 

15 (iii) the Federal Home Loan Mort16 gage Corporation Act, with respect to the 

17 Federal Home Loan Mortgage Corpora18 tion; or 

19 (C) a court of competent jurisdiction, and 

20 relates to functions transferred by this Act; and 

21 (2) is in effect on the effective date of the abol22 ishment under section 301(a). 

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1 SEC. 303. TRANSFER AND RIGHTS OF EMPLOYEES OF 

2 OFHEO. 

3 (a) TRANSFER.—Each employee of the Office of Fed4 eral Housing Enterprise Oversight shall be transferred to 

5 the Agency for employment, not later than the effective 

6 date of the abolishment under section 301(a), and such 

7 transfer shall be deemed a transfer of function for pur8 poses of section 3503 of title 5, United States Code. 

9 (b) GUARANTEED POSITIONS.— 

10 (1) IN GENERAL.—Each employee transferred 

11 under subsection (a) shall be guaranteed a position 

12 with the same status, tenure, grade, and pay as that 

13 held on the day immediately preceding the transfer. 

14 (2) NO INVOLUNTARY SEPARATION OR REDUC15 TION.—An employee transferred under subsection 

16 (a) holding a permanent position on the day imme17 diately preceding the transfer may not be involun18 tarily separated or reduced in grade or compensation 

19 during the 12-month period beginning on the date of 

20 transfer, except for cause, or, in the case of a tem21 porary employee, separated in accordance with the 

22 terms of the appointment of the employee. 

23 (c) APPOINTMENT AUTHORITY FOR EXCEPTED AND

24 SENIOR EXECUTIVE SERVICE EMPLOYEES.— 

25 (1) IN GENERAL.—In the case of an employee 

26 occupying a position in the excepted service or the 

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1 Senior Executive Service, any appointment authority 

2 established under law or by regulations of the Office 

3 of Personnel Management for filling such position 

4 shall be transferred, subject to paragraph (2). 

5 (2) DECLINE OF TRANSFER.—The Director 

6 may decline a transfer of authority under paragraph 

7 (1) to the extent that such authority relates to— 

8 (A) a position excepted from the competi9 tive service because of its confidential, policy10 making, policy-determining, or policy-advocating 

11 character; or 

12 (B) a noncareer position in the Senior Ex13 ecutive Service (within the meaning of section 

14 3132(a)(7) of title 5, United States Code). 

15 (d) REORGANIZATION.—If the Director determines, 

16 after the end of the 1-year period beginning on the effec17 tive date of the abolishment under section 301(a), that 

18 a reorganization of the combined workforce is required, 

19 that reorganization shall be deemed a major reorganiza20 tion for purposes of affording affected employee retire21 ment under section 8336(d)(2) or 8414(b)(1)(B) of title 

22 5, United States Code. 

23 (e) EMPLOYEE BENEFIT PROGRAMS.— 

24 (1) IN GENERAL.—Any employee of the Office 

25 of Federal Housing Enterprise Oversight accepting 

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1 employment with the Agency as a result of a trans2 fer under subsection (a) may retain for 12 months 

3 after the date on which such transfer occurs mem4 bership in any employee benefit program of the 

5 Agency or the Office of Federal Housing Enterprise 

6 Oversight of the Department of Housing and Urban 

7 Development, as applicable, including insurance, to 

8 which such employee belongs on the date of the abol9 ishment under section 301(a), if— 

10 (A) the employee does not elect to give up 

11 the benefit or membership in the program; and 

12 (B) the benefit or program is continued by 

13 the Director of the Federal Housing Enterprise 

14 Regulatory Agency. 

15 (2) COST DIFFERENTIAL.— 

16 (A) IN GENERAL.—The difference in the 

17 costs between the benefits which would have 

18 been provided by the Office of Federal Housing 

19 Enterprise Oversight and those provided by this 

20 section shall be paid by the Director. 

21 (B) HEALTH INSURANCE.—If any em22 ployee elects to give up membership in a health 

23 insurance program or the health insurance pro24 gram is not continued by the Director, the em25 ployee shall be permitted to select an alternate 

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1 Federal health insurance program not later 

2 than 30 days after the date of such election or 

3 notice, without regard to any other regularly 

4 scheduled open season. 

5 SEC. 304. TRANSFER OF PROPERTY AND FACILITIES. 

6 Upon the effective date of its abolishment under sec7 tion 301(a), all property of the Office of Federal Housing 

8 Enterprise Oversight shall transfer to the Agency. 

9 Subtitle B—Federal Housing 

10 Finance Board 

11 SEC. 311. 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 subtitle referred 

16 to as the ‘‘Board’’) is abolished. 

17 (b) DISPOSITION OF AFFAIRS.—During the 1-year 

18 period beginning on the date of enactment of this Act, the 

19 Board, solely for the purpose of winding up the affairs 

20 of the Board— 

21 (1) shall manage the employees of the Board 

22 and provide for the payment of the compensation 

23 and benefits of any such employee which accrue be24 fore the effective date of the transfer of such em25 ployee under section 313; 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.— 

4 The amendments made by titles I and II and the abolish5 ment of the Board under subsection (a) may not be con6 strued to affect the status of any employee of the Board 

7 as an employee of an agency of the United States for pur8 poses of any other provision of law before the effective 

9 date of the transfer of any such employee under section 

10 313. 

11 (d) USE OF PROPERTY AND SERVICES.— 

12 (1) PROPERTY.—The Director may use the 

13 property of the Board to perform functions which 

14 have been transferred to the Director, for such time 

15 as is reasonable to facilitate the orderly transfer of 

16 functions transferred under any other provision of 

17 this Act or any amendment made by this Act to any 

18 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, 

22 or 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 

2 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 co7 ordinate 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 af12 fect the validity of any right, duty, or obligation of 

13 the United States, a member of the Board, or any 

14 other person, which— 

15 (A) arises under the Federal Home Loan 

16 Bank Act, or any other provision of law applica17 ble with respect to the 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 

22 Board in connection with functions that are trans23 ferred under this Act to the Director shall abate by 

24 reason of the enactment of this Act, except that the 

25 Director shall be substituted for the Board or any 

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1 member thereof as a party to any such action or 

2 proceeding. 

3 SEC. 312. CONTINUATION AND COORDINATION OF CERTAIN 

4 REGULATIONS. 

5 (a) IN GENERAL.—All regulations, orders, and deter6 minations described under subsection (b) shall remain in 

7 effect according to the terms of such regulations, orders, 

8 and determinations, and shall be enforceable by or against 

9 the Director until modified, terminated, set aside, or su10 perseded in accordance with applicable law by the Direc11 tor, any court of competent jurisdiction, or operation of 

12 law. 

13 (b) APPLICABILITY.—A regulation, order, or deter14 mination is described under this subsection if it— 

15 (1) was issued, made, prescribed, or allowed to 

16 become effective by— 

17 (A) the Board; or 

18 (B) a court of competent jurisdiction, and 

19 relates to functions transferred by this Act; and 

20 (2) is in effect on the effective date of the abol21 ishment under section 311(a). 

22 SEC. 313. TRANSFER AND RIGHTS OF EMPLOYEES OF THE 

23 FEDERAL HOUSING FINANCE BOARD. 

24 (a) TRANSFER.—Each employee of the Board shall 

25 be transferred to the Agency for employment, not later 

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1 than the effective date of the abolishment under section 

2 311(a), and such transfer shall be deemed a transfer of 

3 function for purposes of section 3503 of title 5, United 

4 States Code. 

5 (b) GUARANTEED POSITIONS.— 

6 (1) IN GENERAL.—Each employee transferred 

7 under subsection (a) shall be guaranteed a position 

8 with the same status, tenure, grade, and pay as that 

9 held on the day immediately preceding the transfer. 

10 (2) NO INVOLUNTARY SEPARATION OR REDUC11 TION.—An employee holding a permanent position 

12 on the day immediately preceding the transfer may 

13 not be involuntarily separated or reduced in grade or 

14 compensation during the 12-month period beginning 

15 on the date of transfer, except for cause, or, if the 

16 employee is a temporary employee, separated in ac17 cordance with the terms of the appointment of the 

18 employee. 

19 (c) APPOINTMENT AUTHORITY FOR EXCEPTED AND

20 SENIOR EXECUTIVE SERVICE EMPLOYEES.— 

21 (1) IN GENERAL.—In the case of an employee 

22 occupying a position in the excepted service or the 

23 Senior Executive Service, any appointment authority 

24 established under law or by regulations of the Office 

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1 of Personnel Management for filling such position 

2 shall be transferred, subject to paragraph (2). 

3 (2) DECLINE OF TRANSFER.—The Director 

4 may decline a transfer of authority under paragraph 

5 (1) to the extent that such authority relates to— 

6 (A) a position excepted from the competi7 tive service because of its confidential, policy8 making, policy-determining, or policy-advocating 

9 character; or 

10 (B) a noncareer position in the Senior Ex11 ecutive Service (within the meaning of section 

12 3132(a)(7) of title 5, United States Code). 

13 (d) REORGANIZATION.—If the Director determines, 

14 after the end of the 1-year period beginning on the effec15 tive date of the abolishment under section 311(a), that 

16 a reorganization of the combined workforce is required, 

17 that reorganization shall be deemed a major reorganiza18 tion for purposes of affording affected employee retire19 ment under section 8336(d)(2) or 8414(b)(1)(B) of title 

20 5, United States Code. 

21 (e) EMPLOYEE BENEFIT PROGRAMS.— 

22 (1) IN GENERAL.—Any employee of the Board 

23 accepting employment with the Agency as a result of 

24 a transfer under subsection (a) may retain for 12 

25 months after the date on which such transfer occurs 

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1 membership in any employee benefit program of the 

2 Agency or the Board, as applicable, including insur3 ance, to which such employee belongs on the effec4 tive date of the abolishment under section 311(a) 

5 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. 

10 (2) COST DIFFERENTIAL.— 

11 (A) IN GENERAL.—The difference in the 

12 costs between the benefits which would have 

13 been provided by the Board and those provided 

14 by this section shall be paid by the Director. 

15 (B) HEALTH INSURANCE.—If any em16 ployee elects to give up membership in a health 

17 insurance program or the health insurance pro18 gram is not continued by the Director, the em19 ployee shall be permitted to select an alternate 

20 Federal health insurance program not later 

21 than 30 days after the date of such election or 

22 notice, without regard to any other regularly 

23 scheduled open season. 

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1 SEC. 314. TRANSFER OF PROPERTY AND FACILITIES. 

2 Upon the effective date of the abolishment under sec3 tion 311(a), all property of the Board shall transfer to 

4 the Agency. 

5 TITLE IV—STUDIES AND 

6 REPORTS 

7 SEC. 401. STUDY AND REPORT ON BASEL II AND ENTER8 PRISE DEBT. 

9 (a) STUDY.—The Board of Governors of the Federal 

10 Reserve System shall conduct a study on the effects on 

11 the regulated entities of the new Basel Capital Accord 

12 (Basel II), as endorsed by the Group of Ten countries in 

13 ‘‘The International Convergence of Capital Measurement 

14 and Capital Standards: a Revised Framework’’. The study 

15 shall examine the debt of the regulated entities and the 

16 capital classification on financial institutions that hold 

17 such debt. 

18 (b) REPORT.—The Chairman of the Board of Gov19 ernors of the Federal Reserve System shall submit a re20 port to Congress on the results of the study required by 

21 this section not later than 2 years after the date of enact22 ment of this Act. 

23 SEC. 402. AFFORDABLE HOUSING AUDITS. 

24 The Inspector General of the Agency shall conduct 

25 an annual audit of the affordable housing activities, pro26 grams, and partnerships of the Federal National Mortmmaher on PRODPC74 with BILLS

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1 gage Association and the Federal Home Loan Mortgage 

2 Corporation, to ensure that such activities, programs, and 

3 partnerships support the affordable housing missions of 

4 those enterprises. 

5 SEC. 403. REPORT ON INSURED DEPOSITORY INSTITUTION 

6 HOLDINGS OF REGULATED ENTITY DEBT AND 

7 MORTGAGE-BACKED SECURITIES. 

8 Not later than 2 years after the date of enactment 

9 of this Act, the Director, the Secretary of the Treasury, 

10 the Board of Governors of the Federal Reserve System, 

11 the Board of Directors of the Federal Deposit Insurance 

12 Corporation, and the National Credit Union Administra13 tion Board shall jointly submit a report to Congress re14 garding— 

15 (1) the extent to which obligations issued or 

16 guaranteed by the regulated entities (including mort17 gage-backed securities) are held by federally insured 

18 depository institutions, including such extent by type 

19 of institution and such extent relative to the capital 

20 of the institution; 

21 (2) the extent to which the unlimited holdings 

22 by federally insured depository institutions of the ob23 ligations of the regulated entities could produce sys24 temic risk issues, particularly for the safety and 

25 soundness of the banking system in the United 

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1 States, in the event of default or failure by a regu2 lated entity; 

3 (3) the effects on the regulated entities, the 

4 banking industry, and mortgage markets, if prudent 

5 limits on the holdings of the obligations of a regu6 lated entity were placed on federally insured deposi7 tory institutions; and 

8 (4) the extent to which alternative investments 

9 are available to community depository institutions, 

10 and the impact that such alternative investments 

11 would have on the safety and soundness and capital 

12 levels of such community depository institutions. 

13 SEC. 404. REPORT ON RISK-BASED CAPITAL LEVELS. 

14 (a) IN GENERAL.—The Director shall submit a re15 port to Congress at the end of each fiscal quarter regard16 ing— 

17 (1) the risk-based capital levels for the regu18 lated entities under section 1361 of the Federal 

19 Housing Enterprises Financial Safety and Sound20 ness Act of 1992, as amended by this Act, including 

21 a description of the risk-based capital test under 

22 that section 1361 and any assumptions of the Direc23 tor and factors used by the Director in establishing 

24 the test; and 

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1 (2) the minimum and critical capital levels for 

2 the regulated entities pursuant to sections 1362 and 

3 1363, respectively, of that Act, as so amended. 

4 (b) TIMING.—Each report under this section shall be 

5 submitted not later than 60 days after the end of each 

6 fiscal quarter. 

7 SEC. 405. REPORT ON RESOURCES AND ALLOCATIONS. 

8 The Comptroller General of the United States shall 

9 submit a report to Congress annually, on a fiscal year 

10 basis, regarding— 

11 (1) the allocation of resources of the Agency by 

12 the Director; and 

13 (2) the level of assessments collected by the Di14 rector for the operation of the Agency. 

15 SEC. 406. STUDY AND REPORT ON GUARANTEE FEES. 

16 (a) ONGOING STUDY OF FEES.—The Director shall 

17 conduct an ongoing study of fees charged by enterprises 

18 for guaranteeing a mortgage. 

19 (b) COLLECTION OF DATA.—The Director shall, by 

20 regulation or order, establish procedures for the collection 

21 of data from enterprises for purposes of this subsection, 

22 including the format and the process for collection of such 

23 data. 

24 (c) REPORT TO CONGRESS.—The Director shall an25 nually submit a report to Congress on the results of the 

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1 study conducted under subsection (a), based on the aggre2 gated data collected under subsection (a) for the subject 

3 year, regarding the amount of such fees and the criteria 

4 used by the enterprises to determine such fees. 

5 (d) CONTENTS OF REPORTS.—The reports required 

6 under subsection (c) shall identify and analyze— 

7 (1) the factors considered in determining the 

8 amount of the guarantee fees charged; 

9 (2) the total revenue earned by the enterprises 

10 from guarantee fees; 

11 (3) the total costs incurred by the enterprises 

12 for providing guarantees; 

13 (4) the average guarantee fee charged by the 

14 enterprises; 

15 (5) an analysis of any increase or decrease in 

16 guarantee fees from the preceding year; 

17 (6) a breakdown of the revenue and costs asso18 ciated with providing guarantees, based on product 

19 type and risk classifications; and 

20 (7) a breakdown of guarantee fees charged 

21 based on asset size of the originator and the number 

22 of loans sold or transferred to an enterprise. 

23 (e) PROTECTION OF INFORMATION.—Nothing in this 

24 section may be construed to require or authorize the Dimmaher on PRODPC74 with BILLS

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1 rector to publicly disclose information that is confidential 

2 or proprietary. 

3 SEC. 407. REPORT ON CONFORMING LOAN LIMITS. 

4 The Comptroller General of the United States shall 

5 submit a report to Congress on whether raising the loan 

6 limits under section 302(b) of the Federal National Mort7 gage Association Act (12 U.S.C. 1717(b)) and section 

8 305(a) of the Federal Home Loan Mortgage Corporation 

9 Act (12 U.S.C. 1454(a)) would promote the availability 

10 of affordable housing. 

11 SEC. 408. REVIEWS AND STUDIES RELATING TO ENTER12 PRISES AND RELATED FOUNDATIONS. 

13 (a) ANNUAL REVIEWS.—The Director shall annually 

14 conduct a review of the Freddie Mac Foundation and the 

15 Office of Corporate Giving of the Federal National Mort16 gage Corporation (formerly known as the ‘‘Fannie Mae 

17 Foundation’’), or any successors thereto, to ensure that 

18 such entities are not engaged in impermissible lobbying 

19 activities. 

20 (b) STUDY ON LOBBYING ACTIVITIES TO OBSTRUCT

21 SPECIAL EXAMINATION.—The Director shall conduct a 

22 study to determine whether any actions or inactions by 

23 an OFHEO-designated executive officer of a Government24 Sponsored Enterprise, that was an employee of the Gov25 ernment-Sponsored-Enterprise during the period of review 

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1 of the OFHEO Special Examination of Accounting Poli2 cies and Practices of Fannie Mae for the years 1998 

3 through mid-2004 and remains an employee of such Gov4 ernment-Sponsored Enterprise as of the date of enactment 

5 of this Act, were intended to obstruct the Special Exam6 ination by OFHEO. 

7 (c) REPORT.—The Director shall submit a report to 

8 Congress on the results of the reviews and study required 

9 under subsections (a) and (b), not later than 60 days after 

10 the date of enactment of this Act, and annually thereafter 

11 with respect to the reviews conducted under subsection 

12 (a). 

13 SEC. 409. RECOMMENDATIONS. 

14 Each report submitted pursuant to this title shall in15 clude specific recommendations, if any, of appropriate 

16 policies, limitations, regulations, legislation, or other ac17 tions to deal appropriately and effectively with the issues 

18 addressed by such report. 

Æ 

mmaher on PRODPC74 with BILLS