110TH CONGRESS 

1ST SESSION H. R. 1427

AN ACT

To reform the regulation of certain housing-related 

Government-sponsored enterprises, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 

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

3 ‘‘Federal Housing Finance Reform Act of 2007’’. 

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

5 this Act is as follows:

Sec. 1. Short title and table of contents. 

Sec. 2. Definitions. 

TITLE I—REFORM OF REGULATION OF ENTERPRISES AND 

FEDERAL HOME LOAN BANKS 

Subtitle A—Improvement of Safety and Soundness 

Sec. 101. Establishment of the Federal Housing Finance Agency. 

Sec. 102. Duties and authorities of Director. 

Sec. 103. Federal Housing Enterprise Board. 

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

Sec. 105. Disclosure of income and charitable contributions by enterprises. 

Sec. 106. Assessments. 

Sec. 107. Examiners and accountants. 

Sec. 108. Prohibition and withholding of executive compensation. 

Sec. 109. Reviews of regulated entities. 

Sec. 110. Inclusion of minorities and women; diversity in Agency workforce. 

Sec. 111. Regulations and orders. 

Sec. 112. Non-waiver of privileges. 

Sec. 113. Risk-Based capital requirements. 

Sec. 114. Minimum and critical capital levels. 

Sec. 115. Review of and authority over enterprise assets and liabilities. 

Sec. 116. Corporate governance of enterprises. 

Sec. 117. Required registration under Securities Exchange Act of 1934. 

Sec. 118. Liaison with Financial Institutions Examination Council. 

Sec. 119. Guarantee fee study. 

Sec. 120. Conforming amendments. 

Subtitle B—Improvement of Mission Supervision 

Sec. 131. Transfer of product approval and housing goal oversight. 

Sec. 132. Review of enterprise products. 

Sec. 133. Conforming loan limits. 

Sec. 134. Annual housing report regarding regulated entities. 

Sec. 135. Annual reports by regulated entities on affordable housing stock. 

Sec. 136. Mortgagor identification requirements for mortgages of regulated entities. 

Sec. 137. Revision of housing goals. 

Sec. 138. Duty to serve underserved markets. 

Sec. 139. Monitoring and enforcing compliance with housing goals. 

Sec. 140. Affordable Housing Fund. 

Sec. 141. Consistency with mission. 

Sec. 142. Enforcement. 

Sec. 143. Conforming amendments. 
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Subtitle C—Prompt Corrective Action 

Sec. 151. Capital classifications. 

Sec. 152. Supervisory actions applicable to undercapitalized regulated entities. 

Sec. 153. Supervisory actions applicable to significantly undercapitalized regulated entities. 

Sec. 154. Authority over critically undercapitalized regulated entities. 

Sec. 155. Conforming amendments. 

Subtitle D—Enforcement Actions 

Sec. 161. Cease-and-desist proceedings. 

Sec. 162. Temporary cease-and-desist proceedings. 

Sec. 163. Prejudgment attachment. 

Sec. 164. Enforcement and jurisdiction. 

Sec. 165. Civil money penalties. 

Sec. 166. Removal and prohibition authority. 

Sec. 167. Criminal penalty. 

Sec. 168. Subpoena authority. 

Sec. 169. Conforming amendments. 

Subtitle E—General Provisions 

Sec. 181. Boards of enterprises. 

Sec. 182. Report on portfolio operations, safety and soundness, and mission of 

enterprises. 

Sec. 183. Conforming and technical amendments. 

Sec. 184. Study of alternative secondary market systems. 

Sec. 185. Effective date. 

TITLE II—FEDERAL HOME LOAN BANKS 

Sec. 201. Definitions. 

Sec. 202. Directors. 

Sec. 203. Federal Housing Finance Agency oversight of Federal Home Loan 

Banks. 

Sec. 204. Joint activities of Banks. 

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

Sec. 206. Reorganization of Banks and voluntary merger. 

Sec. 207. Securities and Exchange Commission disclosure. 

Sec. 208. Community financial institution members. 

Sec. 209. Technical and conforming amendments. 

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

Sec. 211. Effective date. 

TITLE III—TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY OF OFFICE OF FEDERAL HOUSING ENTERPRISE OVERSIGHT, FEDERAL HOUSING FINANCE BOARD, AND DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 

Subtitle A—Office of Federal Housing Enterprise Oversight 

Sec. 301. Abolishment of OFHEO. 

Sec. 302. Continuation and coordination of certain regulations. 

Sec. 303. Transfer and rights of employees of OFHEO. 

Sec. 304. Transfer of property and facilities. 

Subtitle B—Federal Housing Finance Board 
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Sec. 321. Abolishment of the Federal Housing Finance Board. 

Sec. 322. Continuation and coordination of certain regulations. 

Sec. 323. Transfer and rights of employees of the Federal Housing Finance 

Board. 

Sec. 324. Transfer of property and facilities. 

Subtitle C—Department of Housing and Urban Development 

Sec. 341. Termination of enterprise-related functions. 

Sec. 342. Continuation and coordination of certain regulations. 

Sec. 343. Transfer and rights of employees of Department of Housing and 

Urban Development. 

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

1 SEC. 2. DEFINITIONS. 

2 Section 1303 of the Housing and Community Devel3 opment Act of 1992 (12 U.S.C. 4502) is amended—

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

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

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

8 and inserting ‘‘the regulated entity’’; 

9 (3) in paragraph (5), by striking ‘‘Office of 

10 Federal Housing Enterprise Oversight of the De11 partment of Housing and Urban Development’’ and 

12 inserting ‘‘Federal Housing Finance Agency’’; 

13 (4) in each of paragraphs (8), (9), (10), and 

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

15 appears and inserting ‘‘Director’’; 

16 (5) in paragraph (13), by inserting ‘‘, with re17 spect to an enterprise,’’ after ‘‘means’’; 

18 (6) by redesignating paragraphs (16) through 

19 (19) as paragraphs (20) through (23), respectively; 
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1 (7) by striking paragraphs (14) and (15) and 

2 inserting the following new paragraphs: 

3 ‘‘(18) REGULATED ENTITY.—The term ‘regu4 lated entity’ means—

5 ‘‘(A) the Federal National Mortgage Asso6 ciation and any affiliate thereof; 

7 ‘‘(B) the Federal Home Loan Mortgage 

8 Corporation and any affiliate thereof; and 

9 ‘‘(C) each Federal home loan bank. 

10 ‘‘(19) REGULATED ENTITY-AFFILIATED

11 PARTY.—The term ‘regulated entity-affiliated party’ 

12 means—

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

14 agent for, a regulated entity, or controlling 

15 shareholder of an enterprise; 

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

17 or joint venture partner of a regulated entity, 

18 and any other person, as determined by the Di19 rector (by regulation or on a case-by-case basis) 

20 that participates in the conduct of the affairs of 

21 a regulated entity, except that a shareholder of 

22 a regulated entity shall not be considered to 

23 have participated in the affairs of that regu24 lated entity solely by reason of being a member 

25 or customer of the regulated entity; 
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1 ‘‘(C) any independent contractor for a reg2 ulated entity (including any attorney, appraiser, 

3 or accountant), if—

4 ‘‘(i) the independent contractor know5 ingly or recklessly participates in—

6 ‘‘(I) any violation of any law or 

7 regulation; 

8 ‘‘(II) any breach of fiduciary 

9 duty; or 

10 ‘‘(III) any unsafe or unsound 

11 practice; and 

12 ‘‘(ii) such violation, breach, or prac13 tice caused, or is likely to cause, more than 

14 a minimal financial loss to, or a significant 

15 adverse effect on, the regulated entity; and 

16 ‘‘(D) any not-for-profit corporation that re17 ceives its principal funding, on an ongoing 

18 basis, from any regulated entity.’’. 

19 (8) by redesignating paragraphs (8) through 

20 (13) as paragraphs (12) through (17), respectively; 

21 and 

22 (9) by inserting after paragraph (7) the fol23 lowing new paragraph: 

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

25 ‘Federal home loan bank’ means a bank established 
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1 under the authority of the Federal Home Loan 

2 Bank Act.’’; 

3 (10) by redesignating paragraphs (2) through 

4 (7) as paragraphs (5) through (10), respectively; 

5 and 

6 (11) by inserting after paragraph (1) the fol7 lowing new paragraphs: 

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

9 Federal Housing Finance Agency. 

10 ‘‘(3) AUTHORIZING STATUTES.—The term ‘au11 thorizing statutes’ means—

12 ‘‘(A) the Federal National Mortgage Asso13 ciation Charter Act; 

14 ‘‘(B) the Federal Home Loan Mortgage 

15 Corporation Act; and 

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

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

18 Federal Housing Enterprise Board established under 

19 section 1313B.’’. 
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1 TITLE I—REFORM OF REGULA2 TION OF ENTERPRISES AND 

3 FEDERAL HOME LOAN BANKS 

4 Subtitle A—Improvement of Safety 

5 and Soundness 

6 SEC. 101. ESTABLISHMENT OF THE FEDERAL HOUSING FI7 NANCE AGENCY. 

8 (a) IN GENERAL.—The Housing and Community De9 velopment Act of 1992 (12 U.S.C. 4501 et seq.) is amend10 ed by striking sections 1311 and 1312 and inserting the 

11 following: 

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

13 FINANCE AGENCY. 

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

15 Federal Housing Finance Agency, which shall be an inde16 pendent agency of the Federal Government. 

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, AND FEDERAL HOME LOAN BANKS.—The Di24 rector of the Federal Housing Finance Agency shall 

25 have general supervisory and regulatory authority 
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1 over each regulated entity and shall exercise such 

2 general regulatory and supervisory authority, includ3 ing such duties and authorities set forth under sec4 tion 1313 of this Act, to ensure that the purposes 

5 of this Act, the authorizing statutes, and any other 

6 applicable law are carried out. The Director shall 

7 have the same supervisory and regulatory authority 

8 over any joint office of the Federal home loan banks, 

9 including the Office of Finance of the Federal Home 

10 Loan Banks, as the Director has over the individual 

11 Federal home loan banks. 

12 ‘‘(c) SAVINGS PROVISION.—The authority of the Di13 rector to take actions under subtitles B and C shall not 

14 in any way limit the general supervisory and regulatory 

15 authority granted to the Director. 

16 ‘‘SEC. 1312. DIRECTOR. 

17 ‘‘(a) ESTABLISHMENT OF POSITION.—There is estab18 lished the position of the Director of the Federal Housing 

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

20 ‘‘(b) APPOINTMENT; TERM.—

21 ‘‘(1) APPOINTMENT.—The Director shall be ap22 pointed by the President, by and with the advice and 

23 consent of the Senate, from among individuals who 

24 are citizens of the United States, have a dem25 onstrated understanding of financial management or 
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1 oversight, and have a demonstrated understanding 

2 of capital markets, including the mortgage securities 

3 markets and housing finance. 

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

5 be appointed for a term of 5 years and may be re6 moved by the President only for cause. 

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

8 Director that occurs before the expiration of the 

9 term for which a Director was appointed shall be 

10 filled in the manner established under paragraph 

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

12 shall be appointed only for the remainder of such 

13 term. 

14 ‘‘(4) SERVICE AFTER END OF TERM.—An indi15 vidual may serve as the Director after the expiration 

16 of the term for which appointed until a successor 

17 has been appointed. 

18 ‘‘(5) TRANSITIONAL PROVISION.—Notwith19 standing paragraphs (1) and (2), the Director of the 

20 Office of Federal Housing Enterprise Oversight of 

21 the Department of Housing and Urban Development 

22 shall serve as the Director until a successor has been 

23 appointed under paragraph (1). 

24 ‘‘(c) DEPUTY DIRECTOR OF THE DIVISION OF EN25 TERPRISE REGULATION.—
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1 ‘‘(1) IN GENERAL.—The Agency shall have a 

2 Deputy Director of the Division of Enterprise Regu3 lation, who shall be appointed by the Director from 

4 among individuals who are citizens of the United 

5 States, and have a demonstrated understanding of 

6 financial management or oversight and of mortgage 

7 securities markets and housing finance. 

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

9 Division of Enterprise Regulation shall have such 

10 functions, powers, and duties with respect to the 

11 oversight of the enterprises as the Director shall pre12 scribe. 

13 ‘‘(d) DEPUTY DIRECTOR OF THE DIVISION OF FED14 ERAL HOME LOAN BANK REGULATION.—

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

16 Deputy Director of the Division of Federal Home 

17 Loan Bank Regulation, who shall be appointed by 

18 the Director from among individuals who are citi19 zens of the United States, have a demonstrated un20 derstanding of financial management or oversight 

21 and of the Federal Home Loan Bank System and 

22 housing finance. 

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

24 Division of Federal Home Loan Bank Regulation 

25 shall have such functions, powers, and duties with 
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1 respect to the oversight of the Federal home loan 

2 banks as the Director shall prescribe. 

3 ‘‘(e) DEPUTY DIRECTOR FOR HOUSING.—

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

5 Deputy Director for Housing, who shall be ap6 pointed by the Director from among individuals who 

7 are citizens of the United States, and have a dem8 onstrated understanding of the housing markets and 

9 housing finance and of community and economic de10 velopment. 

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

12 Housing shall have such functions, powers, and du13 ties with respect to the oversight of the housing mis14 sion and goals of the enterprises, and with respect 

15 to oversight of the housing finance and community 

16 and economic development mission of the Federal 

17 home loan banks, as the Director shall prescribe. 

18 ‘‘(f) LIMITATIONS.—The Director and each of the 

19 Deputy Directors may not—

20 ‘‘(1) have any direct or indirect financial inter21 est in any regulated entity or regulated entity-affili22 ated party; 

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

24 any regulated entity or regulated entity-affiliated 

25 party; or 
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1 ‘‘(3) have served as an executive officer or di2 rector of any regulated entity, or regulated entity-af3 filiated party, at any time during the 3-year period 

4 ending on the date of appointment of such individual 

5 as Director or Deputy Director. 

6 ‘‘(g) OMBUDSMAN.—The Director shall establish the 

7 position of the Ombudsman in the Agency. The Director 

8 shall provide that the Ombudsman will consider com9 plaints and appeals from any regulated entity and any per10 son that has a business relationship with a regulated enti11 ty and shall specify the duties and authority of the Om12 budsman.’’. 

13 (b) APPOINTMENT OF DIRECTOR.—Notwithstanding 

14 any other provision of law or of this Act, the President 

15 may, any time after the date of the enactment of this Act, 

16 appoint an individual to serve as the Director of the Fed17 eral Housing Finance Agency, as such office is established 

18 by the amendment made by subsection (a). This sub19 section shall take effect on the date of the enactment of 

20 this Act. 

21 SEC. 102. DUTIES AND AUTHORITIES OF DIRECTOR. 

22 (a) IN GENERAL.—The Housing and Community De23 velopment Act of 1992 (12 U.S.C. 4513) is amended by 

24 striking section 1313 and inserting the following new sec25 tions: 
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1 ‘‘SEC. 1313. DUTIES AND AUTHORITIES OF DIRECTOR. 

2 ‘‘(a) DUTIES.—

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

4 of the Director shall be—

5 ‘‘(A) to oversee the operations of each reg6 ulated entity and any joint office of the Federal 

7 Home Loan Banks; and 

8 ‘‘(B) to ensure that—

9 ‘‘(i) each regulated entity operates in 

10 a safe and sound manner, including main11 tenance of adequate capital and internal 

12 controls; 

13 ‘‘(ii) the operations and activities of 

14 each regulated entity foster liquid, effi15 cient, competitive, and resilient national 

16 housing finance markets that minimize the 

17 cost of housing finance (including activities 

18 relating to mortgages on housing for low19 and moderate- income families involving a 

20 reasonable economic return that may be 

21 less than the return earned on other activi22 ties); 

23 ‘‘(iii) each regulated entity complies 

24 with this title and the rules, regulations, 

25 guidelines, and orders issued under this 

26 title and the authorizing statutes; and 
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1 ‘‘(iv) each regulated entity carries out 

2 its statutory mission only through activi3 ties that are consistent with this title and 

4 the authorizing statutes. 

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

6 the Director shall include the authority—

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

8 the principal duties described in paragraph (1), 

9 reject any acquisition or transfer of a control10 ling interest in an enterprise; and 

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

12 may be necessary or appropriate to fulfill the 

13 duties and responsibilities of the Director in the 

14 supervision and regulation of each regulated en15 tity. 

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

17 may delegate to officers or employees of the Agency, in18 cluding each of the Deputy Directors, any of the functions, 

19 powers, or duties of the Director, as the Director considers 

20 appropriate. 

21 ‘‘(c) LITIGATION AUTHORITY.—

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

23 of this title, any regulation or order prescribed under 

24 this title, or any other provision of law, rule, regula25 tion, or order, or in any other action, suit, or pro-
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1 ceeding to which the Director is a party or in which 

2 the Director is interested, and in the administration 

3 of conservatorships and receiverships, the Director 

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

5 Director’s own attorneys, or request that the Attor6 ney General of the United States act on behalf of 

7 the Director. 

8 ‘‘(2) CONSULTATION WITH ATTORNEY GEN9 ERAL.—The Director shall provide notice to, and 

10 consult with, the Attorney General of the United 

11 States before taking an action under paragraph (1) 

12 of this subsection or under section 1344(a), 1345(d), 

13 1348(c), 1372(e), 1375(a), 1376(d), or 1379D(c), 

14 except that, if the Director determines that any 

15 delay caused by such prior notice and consultation 

16 may adversely affect the safety and soundness re17 sponsibilities of the Director under this title, the Di18 rector shall notify the Attorney General as soon as 

19 reasonably possible after taking such action. 

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

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

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

23 a regulated entity or director or officer thereof with 

24 respect to any matter under this title or any other 

25 applicable provision of law, rule, order, or regulation 
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1 under this title, in the United States district court 

2 for the judicial district in which the regulated entity 

3 has its principal place of business, or in the United 

4 States District Court for the District of Columbia, 

5 and the Director may be served with process in the 

6 manner prescribed by the Federal Rules of Civil 

7 Procedure. 

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

9 STANDARDS. 

10 ‘‘(a) STANDARDS.—The Director shall establish 

11 standards, by regulation, guideline, or order, for each reg12 ulated entity relating to—

13 ‘‘(1) adequacy of internal controls and informa14 tion systems, including information security and pri15 vacy policies and practices, taking into account the 

16 nature and scale of business operations; 

17 ‘‘(2) independence and adequacy of internal 

18 audit systems; 

19 ‘‘(3) management of credit and counterparty 

20 risk, including systems to identify concentrations of 

21 credit risk and prudential limits to restrict exposure 

22 of the regulated entity to a single counterparty or 

23 groups of related counterparties; 

24 ‘‘(4) management of interest rate risk exposure; 
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1 ‘‘(5) management of market risk, including 

2 standards that provide for systems that accurately 

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

4 warranted, that establish limitations on market risk; 

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

6 reserves; 

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

8 portfolio; 

9 ‘‘(8) investments and acquisitions by a regu10 lated entity, to ensure that they are consistent with 

11 the purposes of this Act and the authorizing stat12 utes; 

13 ‘‘(9) maintenance of adequate records, in ac14 cordance with consistent accounting policies and 

15 practices that enable the Director to evaluate the fi16 nancial condition of the regulated entity; 

17 ‘‘(10) issuance of subordinated debt by that 

18 particular regulated entity, as the Director considers 

19 necessary; 

20 ‘‘(11) overall risk management processes, in21 cluding adequacy of oversight by senior management 

22 and the board of directors and of processes and poli23 cies to identify, measure, monitor, and control mate24 rial risks, including reputational risks, and for ade25 quate, well-tested business resumption plans for all 
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1 major systems with remote site facilities to protect 

2 against disruptive events; and 

3 ‘‘(12) such other operational and management 

4 standards as the Director determines to be appro5 priate. 

6 ‘‘(b) FAILURE TO MEET STANDARDS.—

7 ‘‘(1) PLAN REQUIREMENT.—

8 ‘‘(A) IN GENERAL.—If the Director deter9 mines that a regulated entity fails to meet any 

10 standard established under subsection (a)—

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

12 regulation, the Director shall require the 

13 regulated entity to submit an acceptable 

14 plan to the Director within the time al15 lowed under subparagraph (C); and 

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

17 guideline, the Director may require the 

18 regulated entity to submit a plan described 

19 in clause (i). 

20 ‘‘(B) CONTENTS.—Any plan required 

21 under subparagraph (A) shall specify the ac22 tions that the regulated entity will take to cor23 rect the deficiency. If the regulated entity is 

24 undercapitalized, the plan may be a part of the 
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1 capital restoration plan for the regulated entity 

2 under section 1369C. 

3 ‘‘(C) DEADLINES FOR SUBMISSION AND

4 REVIEW.—The Director shall by regulation es5 tablish deadlines that—

6 ‘‘(i) provide the regulated entities with 

7 reasonable time to submit plans required 

8 under subparagraph (A), and generally re9 quire a regulated entity to submit a plan 

10 not later than 30 days after the Director 

11 determines that the entity fails to meet 

12 any standard established under subsection 

13 (a); and 

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

15 plans expeditiously, and generally not later 

16 than 30 days after the plan is submitted. 

17 ‘‘(2) REQUIRED ORDER UPON FAILURE TO SUB18 MIT OR IMPLEMENT PLAN.—If a regulated entity 

19 fails to submit an acceptable plan within the time al20 lowed under paragraph (1)(C), or fails in any mate21 rial respect to implement a plan accepted by the Di22 rector, the following shall apply: 

23 ‘‘(A) REQUIRED CORRECTION OF DEFI24 CIENCY.—The Director shall, by order, require 

25 the regulated entity to correct the deficiency. 
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1 ‘‘(B) OTHER AUTHORITY.—The Director 

2 may, by order, take one or more of the fol3 lowing actions until the deficiency is corrected: 

4 ‘‘(i) Prohibit the regulated entity from 

5 permitting its average total assets (as such 

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

7 any calendar quarter to exceed its average 

8 total assets during the preceding calendar 

9 quarter, or restrict the rate at which the 

10 average total assets of the entity may in11 crease from one calendar quarter to an12 other. 

13 ‘‘(ii) Require the regulated entity—

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

15 to increase its ratio of core capital to 

16 assets. 

17 ‘‘(II) in the case of a Federal 

18 home loan bank, to increase its ratio 

19 of total capital (as such term is de20 fined in section 6(a)(5) of the Federal 

21 Home Loan Bank Act (12 U.S.C. 

22 1426(a)(5)) to assets. 

23 ‘‘(iii) Require the regulated entity to 

24 take any other action that the Director de25 termines will better carry out the purposes 
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1 of this section than any of the actions de2 scribed in this subparagraph. 

3 ‘‘(3) MANDATORY RESTRICTIONS.—In com4 plying with paragraph (2), the Director shall take 

5 one or more of the actions described in clauses (i) 

6 through (iii) of paragraph (2)(B) if—

7 ‘‘(A) the Director determines that the reg8 ulated entity fails to meet any standard pre9 scribed under subsection (a); 

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

11 the deficiency; and 

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

13 the date on which the regulated entity first 

14 failed to meet the standard, the entity under15 went extraordinary growth, as defined by the 

16 Director. 

17 ‘‘(c) OTHER ENFORCEMENT AUTHORITY NOT AF18 FECTED.—The authority of the Director under this sec19 tion is in addition to any other authority of the Director.’’. 

20 (b) INDEPENDENCE IN CONGRESSIONAL TESTIMONY

21 AND RECOMMENDATIONS.—Section 111 of Public Law 

22 93–495 (12 U.S.C. 250) is amended by striking ‘‘the Fed23 eral Housing Finance Board’’ and inserting ‘‘the Director 

24 of the Federal Housing Finance Agency’’. 
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1 SEC. 103. FEDERAL HOUSING ENTERPRISE BOARD. 

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

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

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

5 added by section 102 of this Act, the following new sec6 tion: 

7 ‘‘SEC. 1313B. FEDERAL HOUSING ENTERPRISE BOARD. 

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

9 Housing Enterprise Board, which shall advise the Director 

10 with respect to overall strategies and policies in carrying 

11 out the duties of the Director under this title. 

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

13 executive authority, and the Director may not delegate to 

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

15 Director. 

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

17 of 3 members, of whom—

18 ‘‘(1) one member shall be the Secretary of the 

19 Treasury; 

20 ‘‘(2) one member shall be the Secretary of 

21 Housing and Urban Development; and 

22 ‘‘(3) one member shall be the Director, who 

23 shall serve as the Chairperson of the Board. 

24 ‘‘(d) MEETINGS.—

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

26 notice by the Director, but in no event shall the 
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1 Board meet less frequently than once every 3 

2 months. 

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

4 of the Treasury or the Secretary of Housing and 

5 Urban Development may, upon giving written notice 

6 to the Director, require a special meeting of the 

7 Board. 

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

9 shall testify before Congress regarding—

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

11 entities; 

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

13 the operations of the regulated entities; 

14 ‘‘(3) the overall operational status of the regu15 lated entities; 

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

17 regulated entities in carrying out their respective 

18 missions; 

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

20 the Agency; and 

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

22 and its fulfillment of its mission, as the Board deter23 mines appropriate.’’. 
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1 (b) ANNUAL REPORT OF THE DIRECTOR.—Section 

2 1319B(a) of the Housing and Community Development 

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

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

5 end; and 

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

7 following new paragraphs: 

8 ‘‘(4) an assessment of the Board or any of its 

9 members with respect to—

10 ‘‘(A) the safety and soundness of the regu11 lated entities; 

12 ‘‘(B) any material deficiencies in the con13 duct of the operations of the regulated entities; 

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

15 regulated entities; and 

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

17 the regulated entities in carrying out their mis18 sions; 

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

20 the Agency; 

21 ‘‘(6) a description of the demographic makeup 

22 of the workforce of the Agency and the actions taken 

23 pursuant to section 1319A(b) to provide for diversity 

24 in the workforce; and 
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1 ‘‘(7) such other matters relating to the Agency 

2 and its fulfillment of its mission.’’. 

3 SEC. 104. AUTHORITY TO REQUIRE REPORTS BY REGU4 LATED ENTITIES. 

5 Section 1314 of the Housing and Community Devel6 opment Act of 1992 (12 U.S.C. 4514) is amended—

7 (1) in the section heading, by striking ‘‘ENTER8 PRISES’’ and inserting ‘‘REGULATED ENTITIES’’; 

9 (2) in subsection (a)—

10 (A) in the subsection heading, by striking 

11 ‘‘SPECIAL REPORTS AND REPORTS OF FINAN12 CIAL CONDITION’’ and inserting ‘‘REGULAR

13 AND SPECIAL REPORTS’’; 

14 (B) in paragraph (1)—

15 (i) in the paragraph heading, by strik16 ing ‘‘FINANCIAL CONDITION’’ and inserting 

17 ‘‘REGULAR REPORTS’’; and 

18 (ii) by striking ‘‘reports of financial 

19 condition and operations’’ and inserting 

20 ‘‘regular reports on the condition (includ21 ing financial condition), management, ac22 tivities, or operations of the regulated enti23 ty, as the Director considers appropriate’’; 

24 and 
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1 (C) in paragraph (2), after ‘‘submit special 

2 reports’’ insert ‘‘on any of the topics specified 

3 in paragraph (1) or such other topics’’; and 

4 (3) by adding at the end the following new sub5 section: 

6 ‘‘(c) REPORTS OF FRAUDULENT FINANCIAL TRANS7 ACTIONS.—

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

9 shall require a regulated entity to submit to the Di10 rector a timely report upon discovery by the regu11 lated entity that it has purchased or sold a fraudu12 lent loan or financial instrument or suspects a pos13 sible fraud relating to a purchase or sale of any loan 

14 or financial instrument. The Director shall require 

15 the regulated entities to establish and maintain pro16 cedures designed to discover any such transactions. 

17 ‘‘(2) PROTECTION FROM LIABILITY FOR RE18 PORTS.—

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

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

21 a regulated entity-affiliated party makes, or re22 quires another to make, such a report, and such 

23 report is made in a good faith effort to comply 

24 with the requirements of paragraph (1), such 

25 regulated entity or regulated entity-affiliated 
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1 party shall not be liable to any person under 

2 any law or regulation of the United States, any 

3 constitution, law, or regulation of any State or 

4 political subdivision of any State, or under any 

5 contract or other legally enforceable agreement 

6 (including any arbitration agreement), for such 

7 report or for any failure to provide notice of 

8 such report to the person who is the subject of 

9 such report or any other person identified in 

10 the report. 

11 ‘‘(B) RULE OF CONSTRUCTION.—Subpara12 graph (A) shall not be construed as creating—

13 ‘‘(i) any inference that the term ‘per14 son’, as used in such subparagraph, may 

15 be construed more broadly than its ordi16 nary usage so as to include any govern17 ment or agency of government; or 

18 ‘‘(ii) any immunity against, or other19 wise affecting, any civil or criminal action 

20 brought by any government or agency of 

21 government to enforce any constitution, 

22 law, or regulation of such government or 

23 agency.’’. 
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1 SEC. 105. DISCLOSURE OF INCOME AND CHARITABLE CON2 TRIBUTIONS BY ENTERPRISES. 

3 Section 1314 of the Housing and Community Devel4 opment Act of 1992 (12 U.S.C. 4514), as amended by 

5 the preceding provisions of this Act, is further amended 

6 by adding at the end the following new subsections: 

7 ‘‘(d) DISCLOSURE OF CHARITABLE CONTRIBUTIONS

8 BY ENTERPRISES.—

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

10 shall, by regulation, require each enterprise to sub11 mit a report annually, in a format designated by the 

12 Director, containing the following information: 

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

14 contributions made by the enterprise to non15 profit organizations during its previous fiscal 

16 year. 

17 ‘‘(B) SUBSTANTIAL CONTRIBUTIONS.—If 

18 the value of contributions made by the enter19 prise to any nonprofit organization during its 

20 previous fiscal year exceeds the designated 

21 amount, the name of that organization and the 

22 value of contributions. 

23 ‘‘(C) SUBSTANTIAL CONTRIBUTIONS TO IN24 SIDER-AFFILIATED CHARITIES.—Identification 

25 of each contribution whose value exceeds the 

26 designated amount that were made by the en-
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1 terprise during the enterprise’s previous fiscal 

2 year to any nonprofit organization of which a 

3 director, officer, or controlling person of the en4 terprise, or a spouse thereof, was a director or 

5 trustee, the name of such nonprofit organiza6 tion, and the value of the contribution. 

7 ‘‘(2) DEFINITIONS.—For purposes of this sub8 section—

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

10 such amount as may be designated by the Di11 rector by regulation, consistent with the public 

12 interest and the protection of investors for pur13 poses of this subsection; and 

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

15 as the Director deems necessary or appropriate 

16 in the public interest, define the terms officer 

17 and controlling person. 

18 ‘‘(3) PUBLIC AVAILABILITY.—The Director 

19 shall make the information submitted pursuant to 

20 this subsection publicly available. 

21 ‘‘(e) DISCLOSURE OF INCOME.—Each enterprise 

22 shall include, in each annual report filed under section 13 

23 of the Securities Exchange Act of 1934 (15 U.S.C. 78m), 

24 the income reported by the issuer to the Internal Revenue 
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1 Service for the most recent taxable year. Such income 

2 shall—

3 ‘‘(1) be presented in a prominent location in 

4 each such report and in a manner that permits a 

5 ready comparison of such income to income other6 wise required to be included in such reports under 

7 regulations issued under such section; and 

8 ‘‘(2) be submitted to the Securities and Ex9 change Commission in a form and manner suitable 

10 for entry into the EDGAR system of such Commis11 sion for public availability under such system.’’. 

12 SEC. 106. ASSESSMENTS. 

13 Section 1316 of the Housing and Community Devel14 opment Act of 1992 (12 U.S.C. 4516) is amended—

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

16 following new subsection: 

17 ‘‘(a) ANNUAL ASSESSMENTS.—The Director shall es18 tablish and collect from the regulated entities annual as19 sessments in an amount not exceeding the amount suffi20 cient to provide for reasonable costs and expenses of the 

21 Agency, including—

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

23 section 1317 of this Act and under section 20 of the 

24 Federal Home Loan Bank Act; 
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1 ‘‘(2) the expenses of obtaining any reviews and 

2 credit assessments under section 1319; 

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

4 for any given year as deemed necessary by the Di5 rector to maintain a working capital fund in accord6 ance with subsection (e); and 

7 ‘‘(4) the wind up of the affairs of the Office of 

8 Federal Housing Enterprise Oversight and the Fed9 eral Housing Finance Board under title III of the 

10 Federal Housing Finance Reform Act of 2007.’’; 

11 (2) in subsection (b)—

12 (A) in the subsection heading, by striking 

13 ‘‘ENTERPRISES’’ and inserting ‘‘REGULATED

14 ENTITIES’’ ; 

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

16 from the left margin, so as to align the left 

17 margin of such paragraph with the left margins 

18 of paragraph (1); 

19 (C) in paragraph (1)—

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

21 inserting ‘‘Each regulated entity’’; 

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

23 inserting ‘‘each regulated entity’’; and 
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1 (iii) by striking ‘‘both enterprises’’ 

2 and inserting ‘‘all of the regulated enti3 ties’’; and 

4 (D) in paragraph (3)—

5 (i) in subparagraph (B), by striking 

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

7 (i)’’; 

8 (ii) by redesignating subparagraphs 

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

10 (ii), respectively, and realigning such 

11 clauses, as so redesignated, so as to be in12 dented 6 ems from the left margin; 

13 (iii) by striking the matter that pre14 cedes clause (i), as so redesignated, and in15 serting the following: 

16 ‘‘(3) DEFINITION OF TOTAL ASSETS.—For pur17 poses of this section, the term ‘total assets’ means 

18 as follows: 

19 ‘‘(A) ENTERPRISES.—With respect to an 

20 enterprise, the sum of—’’; and 

21 (iv) by adding at the end the following 

22 new subparagraph: 

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

24 respect to a Federal home loan bank, the total 

25 assets of the Bank, as determined by the Direc-
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1 tor in accordance with generally accepted ac2 counting principles.’’; 

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

4 following new subsection: 

5 ‘‘(c) INCREASED COSTS OF REGULATION.—

6 ‘‘(1) INCREASE FOR INADEQUATE CAPITALIZA7 TION.—The semiannual payments made pursuant to 

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

9 classified (for purposes of subtitle B) as adequately 

10 capitalized may be increased, as necessary, in the 

11 discretion of the Director to pay additional esti12 mated costs of regulation of the regulated entity. 

13 ‘‘(2) ADJUSTMENT FOR ENFORCEMENT ACTIVI14 TIES.—The Director may adjust the amounts of any 

15 semiannual payments for an assessment under sub16 section (a) that are to be paid pursuant to sub17 section (b) by a regulated entity, as necessary in the 

18 discretion of the Director, to ensure that the costs 

19 of enforcement activities under this Act for a regu20 lated entity are borne only by such regulated entity. 

21 ‘‘(3) ADDITIONAL ASSESSMENT FOR DEFI22 CIENCIES.—If at any time, as a result of increased 

23 costs of regulation of a regulated entity that is not 

24 classified (for purposes of subtitle B) as adequately 

25 capitalized or as the result of supervisory or enforce-
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1 ment activities under this Act for a regulated entity, 

2 the amount available from any semiannual payment 

3 made by such regulated entity pursuant to sub4 section (b) is insufficient to cover the costs of the 

5 Agency with respect to such entity, the Director may 

6 make and collect from such regulated entity an im7 mediate assessment to cover the amount of such de8 ficiency for the semiannual period. If, at the end of 

9 any semiannual period during which such an assess10 ment is made, any amount remains from such as11 sessment, such remaining amount shall be deducted 

12 from the assessment for such regulated entity for 

13 the following semiannual period.’’; 

14 (4) in subsection (d), by striking ‘‘If’’ and in15 serting ‘‘Except with respect to amounts collected 

16 pursuant to subsection (a)(3), if’’; and 

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

18 inserting the following new subsections: 

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

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

21 the Director shall remit to each regulated entity any 

22 amount of assessment collected from such regulated entity 

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

24 of the amount the Director deems necessary to maintain 

25 a working capital fund. 
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1 ‘‘(f) TREATMENT OF ASSESSMENTS.—

2 ‘‘(1) DEPOSIT.—Amounts received by the Di3 rector from assessments under this section may be 

4 deposited by the Director in the manner provided in 

5 section 5234 of the Revised Statutes (12 U.S.C. 

6 192) for monies deposited by the Comptroller of the 

7 Currency. 

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

9 received by the Director from any assessment under 

10 this section shall not be construed to be Government 

11 or public funds or appropriated money. 

12 ‘‘(3) NO APPORTIONMENT OF FUNDS.—Not13 withstanding any other provision of law, the 

14 amounts received by the Director from any assess15 ment under this section shall not be subject to ap16 portionment for the purpose of chapter 15 of title 

17 31, United States Code, or under any other author18 ity. 

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

20 any amounts received by the Director from assess21 ments under this section for compensation of the Di22 rector and other employees of the Agency and for all 

23 other expenses of the Director and the Agency. 

24 ‘‘(5) AVAILABILITY OF OVERSIGHT FUND

25 AMOUNTS.—Notwithstanding any other provision of 
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1 law, any amounts remaining in the Federal Housing 

2 Enterprises Oversight Fund established under this 

3 section (as in effect before the effective date under 

4 section 185 of the Federal Housing Finance Reform 

5 Act of 2007), and any amounts remaining from as6 sessments on the Federal Home Loan banks pursu7 ant to section 18(b) of the Federal Home Loan 

8 Bank Act (12 U.S.C. 1438(b)), shall, upon such ef9 fective date, be treated for purposes of this sub10 section as amounts received from assessments under 

11 this section. 

12 ‘‘(6) TREASURY INVESTMENTS.—

13 ‘‘(A) AUTHORITY.—The Director may re14 quest the Secretary of the Treasury to invest 

15 such portions of amount received by the Direc16 tor from assessments paid under this section 

17 that, in the Director’s discretion, are not re18 quired to meet the current working needs of the 

19 Agency. 

20 ‘‘(B) GOVERNMENT OBLIGATIONS.—Pursu21 ant to a request under subparagraph (A), the 

22 Secretary of the Treasury shall invest such 

23 amounts in government obligations guaranteed 

24 as to principal and interest by the United 

25 States with maturities suitable to the needs of 
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1 Agency and bearing interest at a rate deter2 mined by the Secretary of the Treasury taking 

3 into consideration current market yields on out4 standing marketable obligations of the United 

5 States of comparable maturity. 

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

7 ‘‘(1) FINANCIAL OPERATING PLANS AND FORE8 CASTS.—The Director shall provide to the Director 

9 of the Office of Management and Budget copies of 

10 the Director’s financial operating plans and fore11 casts as prepared by the Director in the ordinary 

12 course of the Agency’s operations, and copies of the 

13 quarterly reports of the Agency’s financial condition 

14 and results of operations as prepared by the Direc15 tor in the ordinary course of the Agency’s oper16 ations. 

17 ‘‘(2) FINANCIAL STATEMENTS.—The Agency 

18 shall prepare annually a statement of assets and li19 abilities and surplus or deficit; a statement of in20 come and expenses; and a statement of sources and 

21 application of funds. 

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

23 Agency shall implement and maintain financial man24 agement systems that comply substantially with 

25 Federal financial management systems require-
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1 ments, applicable Federal accounting standards, and 

2 that uses a general ledger system that accounts for 

3 activity at the transaction level. 

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

5 The Director shall provide to the Comptroller Gen6 eral an assertion as to the effectiveness of the inter7 nal controls that apply to financial reporting by the 

8 Agency, using the standards established in section 

9 3512(c) of title 31, United States Code. 

10 ‘‘(5) RULE OF CONSTRUCTION.—This sub11 section may not be construed as implying any obliga12 tion on the part of the Director to consult with or 

13 obtain the consent or approval of the Director of the 

14 Office of Management and Budget with respect to 

15 any reports, plans, forecasts, or other information 

16 referred to in paragraph (1) or any jurisdiction or 

17 oversight over the affairs or operations of the Agen18 cy. 

19 ‘‘(h) AUDIT OF AGENCY.—

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

21 shall annually audit the financial transactions of the 

22 Agency in accordance with the U.S. generally accept23 ed government auditing standards as may be pre24 scribed by the Comptroller General of the United 

25 States. The audit shall be conducted at the place or 
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1 places where accounts of the Agency are normally 

2 kept. The representatives of the Government Ac3 countability Office shall have access to the personnel 

4 and to all books, accounts, documents, papers, 

5 records (including electronic records), reports, files, 

6 and all other papers, automated data, things, or 

7 property belonging to or under the control of or used 

8 or employed by the Agency pertaining to its financial 

9 transactions and necessary to facilitate the audit, 

10 and such representatives shall be afforded full facili11 ties for verifying transactions with the balances or 

12 securities held by depositories, fiscal agents, and 

13 custodians. All such books, accounts, documents, 

14 records, reports, files, papers, and property of the 

15 Agency shall remain in possession and custody of 

16 the Agency. The Comptroller General may obtain 

17 and duplicate any such books, accounts, documents, 

18 records, working papers, automated data and files, 

19 or other information relevant to such audit without 

20 cost to the Comptroller General and the Comptroller 

21 General’s right of access to such information shall 

22 be enforceable pursuant to section 716(c) of title 31, 

23 United States Code. 

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

25 submit to the Congress a report of each annual 
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1 audit conducted under this subsection. The report to 

2 the Congress shall set forth the scope of the audit 

3 and shall include the statement of assets and liabil4 ities and surplus or deficit, the statement of income 

5 and expenses, the statement of sources and applica6 tion of funds, and such comments and information 

7 as may be deemed necessary to inform Congress of 

8 the financial operations and condition of the Agency, 

9 together with such recommendations with respect 

10 thereto as the Comptroller General may deem advis11 able. A copy of each report shall be furnished to the 

12 President and to the Agency at the time submitted 

13 to the Congress. 

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

15 of conducting an audit under this subsection, the 

16 Comptroller General may, in the discretion of the 

17 Comptroller General, employ by contract, without re18 gard to section 5 of title 41, United States Code, 

19 professional services of firms and organizations of 

20 certified public accountants for temporary periods or 

21 for special purposes. Upon the request of the Comp22 troller General, the Director of the Agency shall 

23 transfer to the Government Accountability Office 

24 from funds available, the amount requested by the 

25 Comptroller General to cover the full costs of any 
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1 audit and report conducted by the Comptroller Gen2 eral. The Comptroller General shall credit funds 

3 transferred to the account established for salaries 

4 and expenses of the Government Accountability Of5 fice, and such amount shall be available upon receipt 

6 and without fiscal year limitation to cover the full 

7 costs of the audit and report.’’. 

8 SEC. 107. EXAMINERS AND ACCOUNTANTS. 

9 (a) EXAMINATIONS.—Section 1317 of the Housing 

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

11 4517) is amended—

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

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

14 this subsection of a regulated entity shall include a 

15 review of the procedures required to be established 

16 and maintained by the regulated entity pursuant to 

17 section 1314(c) (relating to fraudulent financial 

18 transactions) and the report regarding each such ex19 amination shall describe any problems with such 

20 procedures maintained by the regulated entity.’’; 

21 (2) in subsection (b)—

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

23 after ‘‘under this section’’; and 

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

25 of an enterprise for the purpose of ensuring its 
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1 financial safety and soundness’’ and inserting 

2 ‘‘or appropriate’’; and 

3 (3) in subsection (c)—

4 (A) in the second sentence, by inserting 

5 ‘‘to conduct examinations under this section’’ 

6 before the period; and 

7 (B) in the third sentence, by striking 

8 ‘‘from amounts available in the Federal Hous9 ing Enterprises Oversight Fund’’. 

10 (b) ENHANCED AUTHORITY TO HIRE EXAMINERS

11 AND ACCOUNTANTS.—Section 1317 of the Housing and 

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

13 is amended by adding at the end the following new sub14 section: 

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

16 SPECIALISTS, AND EXAMINERS.—

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

18 respect to any position of examiner, accountant, spe19 cialist in financial markets, specialist in information 

20 technology, and economist at the Agency, with re21 spect to supervision and regulation of the regulated 

22 entities, that is in the competitive service. 

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

24 may appoint candidates to any position described in 

25 paragraph (1)—
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1 ‘‘(A) in accordance with the statutes, rules, 

2 and regulations governing appointments in the 

3 excepted service; and 

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

5 and regulations governing appointments in the 

6 competitive service. 

7 ‘‘(3) RULE OF CONSTRUCTION.—The appoint8 ment of a candidate to a position under the author9 ity of this subsection shall not be considered to 

10 cause such position to be converted from the com11 petitive service to the excepted service.’’. 

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

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

14 (1) by striking the section heading and insert15 ing the following: ‘‘EXAMINATIONS AND GAO AU16 DITS’’; 

17 (2) in the third sentence, by striking ‘‘the 

18 Board and’’ each place such term appears; and 

19 (3) by striking the first two sentences and in20 serting the following: ‘‘The Federal home loan banks 

21 shall be subject to examinations by the Director to 

22 the extent provided in section 1317 of the Federal 

23 Housing Enterprises Financial Safety and Sound24 ness Act of 1992 (12 U.S.C. 4517).’’. 
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1 SEC. 108. PROHIBITION AND WITHHOLDING OF EXECUTIVE 

2 COMPENSATION. 

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

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

5 is amended—

6 (1) in the section heading, by striking ‘‘OF EX7 CESSIVE’’ and inserting ‘‘AND WITHHOLDING OF

8 EXECUTIVE’’; 

9 (2) by redesignating subsection (b) as sub10 section (d); and 

11 (3) by inserting after subsection (a) the fol12 lowing new subsections: 

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

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

15 any factors the Director considers relevant, including any 

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

17 wrongdoing shall include any fraudulent act or omission, 

18 breach of trust or fiduciary duty, violation of law, rule, 

19 regulation, order, or written agreement, and insider abuse 

20 with respect to the regulated entity. The approval of an 

21 agreement or contract pursuant to section 309(d)(3)(B) 

22 of the Federal National Mortgage Association Charter Act 

23 (12 U.S.C. 1723a(d)(3)(B)) or section 303(h)(2) of the 

24 Federal Home Loan Mortgage Corporation Act (12 U.S.C. 

25 1452(h)(2)) shall not preclude the Director from making 

26 any subsequent determination under subsection (a). 
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1 ‘‘(c) WITHHOLDING OF COMPENSATION.—In car2 rying out subsection (a), the Director may require a regu3 lated entity to withhold any payment, transfer, or dis4 bursement of compensation to an executive officer, or to 

5 place such compensation in an escrow account, during the 

6 review of the reasonableness and comparability of com7 pensation.’’. 

8 (b) CONFORMING AMENDMENTS.—

9 (1) FANNIE MAE.—Section 309(d) of the Fed10 eral National Mortgage Association Charter Act (12 

11 U.S.C. 1723a(d)) is amended by adding at the end 

12 the following new paragraph: 

13 ‘‘(4) Notwithstanding any other provision of this sec14 tion, the corporation shall not transfer, disburse, or pay 

15 compensation to any executive officer, or enter into an 

16 agreement with such executive officer, without the ap17 proval of the Director, for matters being reviewed under 

18 section 1318 of the Federal Housing Enterprises Finan19 cial Safety and Soundness Act of 1992 (12 U.S.C. 

20 4518).’’. 

21 (2) FREDDIE MAC.—Section 303(h) of the Fed22 eral Home Loan Mortgage Corporation Act (12 

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

24 the following new paragraph: 
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1 ‘‘(4) Notwithstanding any other provision of this sec2 tion, the Corporation shall not transfer, disburse, or pay 

3 compensation to any executive officer, or enter into an 

4 agreement with such executive officer, without the ap5 proval of the Director, for matters being reviewed under 

6 section 1318 of the Federal Housing Enterprises Finan7 cial Safety and Soundness Act of 1992 (12 U.S.C. 

8 4518).’’. 

9 (3) FEDERAL HOME LOAN BANKS.—Section 7 

10 of the Federal Home Loan Bank Act (12 U.S.C. 

11 1427) is amended by adding at the end the following 

12 new subsection: 

13 ‘‘(l) WITHHOLDING OF COMPENSATION.—Notwith14 standing any other provision of this section, a Federal 

15 home loan bank shall not transfer, disburse, or pay com16 pensation to any executive officer, or enter into an agree17 ment with such executive officer, without the approval of 

18 the Director, for matters being reviewed under section 

19 1318 of the Federal Housing Enterprises Financial Safety 

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

21 SEC. 109. REVIEWS OF REGULATED ENTITIES. 

22 Section 1319 of the Housing and Community Devel23 opment Act of 1992 (12 U.S.C. 4519) is amended—

24 (1) by striking the section designation and 

25 heading and inserting the following: 
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1 ‘‘SEC. 1319. REVIEWS OF REGULATED ENTITIES.’’; 

2 and 

3 (2) by striking ‘‘is a nationally recognized’’ and 

4 all that follows through ‘‘1934’’ and inserting the 

5 following: ‘‘the Director considers appropriate, in6 cluding an entity that is registered under section 15 

7 of the Securities Exchange Act of 1934 (15 U.S.C. 

8 78a) as a nationally registered statistical rating or9 ganization’’. 

10 SEC. 110. INCLUSION OF MINORITIES AND WOMEN; DIVER11 SITY IN AGENCY WORKFORCE. 

12 Section 1319A of the Housing and Community De13 velopment Act of 1992 (12 U.S.C. 4520) is amended—

14 (1) in the section heading, by striking ‘‘EQUAL

15 OPPORTUNITY IN SOLICITATION OF CON16 TRACTS’’ and inserting ‘‘MINORITY AND WOMEN

17 INCLUSION; DIVERSITY REQUIREMENTS’’; 

18 (2) in subsection (a), by striking ‘‘(a) IN GEN19 ERAL.—Each enterprise’’ and inserting ‘‘(e) OUT20 REACH.—Each regulated entity’’; and 

21 (3) by striking subsection (b); 

22 (4) by inserting before subsection (e), as so re23 designated by paragraph (2) of this section, the fol24 lowing new subsections: 

25 ‘‘(a) OFFICE OF MINORITY AND WOMEN INCLU26 SION.—Each regulated entity shall establish an Office of 
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1 Minority and Women Inclusion, or designate an office of 

2 the entity, that shall be responsible for carrying out this 

3 section and all matters of the entity relating to diversity 

4 in management, employment, and business activities in ac5 cordance with such standards and requirements as the Di6 rector shall establish. 

7 ‘‘(b) INCLUSION IN ALL LEVELS OF BUSINESS AC8 TIVITIES.—Each regulated entity shall develop and imple9 ment standards and procedures to ensure, to the max10 imum extent possible, the inclusion and utilization of mi11 norities (as such term is defined in section 1204(c) of the 

12 Financial Institutions Reform, Recovery, and Enforce13 ment Act of 1989 (12 U.S.C. 1811 note)) and women, 

14 and minority- and women-owned businesses (as such 

15 terms are defined in section 21A(r)(4) of the Federal 

16 Home Loan Bank Act (12 U.S.C. 1441a(r)(4)) (including 

17 financial institutions, investment banking firms, mortgage 

18 banking firms, asset management firms, broker-dealers, fi19 nancial services firms, underwriters, accountants, brokers, 

20 investment consultants, and providers of legal services) in 

21 all business and activities of the regulated entity at all 

22 levels, including in procurement, insurance, and all types 

23 of contracts (including contracts for the issuance or guar24 antee of any debt, equity, or mortgage-related securities, 

25 the management of its mortgage and securities portfolios, 
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1 the making of its equity investments, the purchase, sale 

2 and servicing of single- and multi-family mortgage loans, 

3 and the implementation of its affordable housing program 

4 and initiatives). The processes established by each regu5 lated entity for review and evaluation for contract pro6 posals and to hire service providers shall include a compo7 nent that gives consideration to the diversity of the appli8 cant. 

9 ‘‘(c) APPLICABILITY.—This section shall apply to all 

10 contracts of a regulated entity for services of any kind, 

11 including services that require the services of investment 

12 banking, asset management entities, broker-dealers, finan13 cial services entities, underwriters, accountants, invest14 ment consultants, and providers of legal services. 

15 ‘‘(d) INCLUSION IN ANNUAL REPORTS.—Each regu16 lated entity shall include, in the annual report submitted 

17 by the entity to the Director pursuant to section 309(k) 

18 of the Federal National Mortgage Association Charter Act 

19 (12 U.S.C. 1723a(k)), section 307(c) of the Federal Home 

20 Loan Mortgage Corporation Act (12 U.S.C. 1456(c)), and 

21 section 20 of the Federal Home Loan Bank Act (12 

22 U.S.C. 1440), as applicable, detailed information describ23 ing the actions taken by the entity pursuant to this sec24 tion, which shall include a statement of the total amounts 

25 paid by the entity to third party contractors since the last 
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1 such report and the percentage of such amounts paid to 

2 businesses described in subsection (b) of this section.’’; 

3 and 

4 (5) by adding at the end the following new sub5 section: 

6 ‘‘(f) DIVERSITY IN AGENCY WORKFORCE.—The 

7 Agency shall take affirmative steps to seek diversity in its 

8 workforce at all levels of the agency consistent with the 

9 demographic diversity of the United States, which shall 

10 include—

11 ‘‘(1) heavily recruiting at historically Black col12 leges and universities, Hispanic-serving institutions, 

13 women’s colleges, and colleges that typically serve 

14 majority minority populations; 

15 ‘‘(2) sponsoring and recruiting at job fairs in 

16 urban communities, and placing employment adver17 tisements in newspapers and magazines oriented to18 ward women and people of color; 

19 ‘‘(3) partnering with organizations that are fo20 cused on developing opportunities for minorities and 

21 women to place talented young minorities and 

22 women in industry internships, summer employment, 

23 and full-time positions; and 

24 ‘‘(4) where feasible, partnering with inner-city 

25 high schools, girls’ high schools, and high schools 
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1 with majority minority populations to establish or 

2 enhance financial literacy programs and provide 

3 mentoring.’’. 

4 SEC. 111. REGULATIONS AND ORDERS. 

5 Section 1319G of the Housing and Community De6 velopment Act of 1992 (12 U.S.C. 4526) is amended—

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

8 following new subsection: 

9 ‘‘(a) AUTHORITY.—The Director shall issue any reg10 ulations, guidelines, and orders necessary to carry out the 

11 duties of the Director under this title and each of the au12 thorizing statutes to ensure that the purposes of this title 

13 and such statutes are accomplished.’’; 

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

15 or any of the authorizing statutes’’ after ‘‘under this 

16 section’’; and 

17 (3) by striking subsection (c). 

18 SEC. 112. NON-WAIVER OF PRIVILEGES. 

19 Part 1 of subtitle A of title XIII of the Housing and 

20 Community Development Act of 1992 (12 U.S.C. 4511) 

21 is amended by adding at the end the following new section: 

22 ‘‘SEC. 1319H. PRIVILEGES NOT AFFECTED BY DISCLOSURE. 

23 ‘‘(a) IN GENERAL.—The submission by any person 

24 of any information to the Agency for any purpose in the 

25 course of any supervisory or regulatory process of the 
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1 Agency shall not be construed as waiving, destroying, or 

2 otherwise affecting any privilege such person may claim 

3 with respect to such information under Federal or State 

4 law as to any person or entity other than the Agency. 

5 ‘‘(b) RULE OF CONSTRUCTION.—No provision of sub6 section (a) may be construed as implying or establishing 

7 that—

8 ‘‘(1) any person waives any privilege applicable 

9 to information that is submitted or transferred 

10 under any circumstance to which subsection (a) does 

11 not apply; or 

12 ‘‘(2) any person would waive any privilege ap13 plicable to any information by submitting the infor14 mation to the Agency, but for this subsection.’’. 

15 SEC. 113. RISK-BASED CAPITAL REQUIREMENTS. 

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

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

18 is amended to read as follows: 

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

20 ENTITIES. 

21 ‘‘(a) IN GENERAL.—

22 ‘‘(1) ENTERPRISES.—The Director shall, by 

23 regulation, establish risk-based capital requirements 

24 for the enterprises to ensure that the enterprises op25 erate in a safe and sound manner, maintaining suffi-
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1 cient capital and reserves to support the risks that 

2 arise in the operations and management of the en3 terprises. 

4 ‘‘(2) FEDERAL HOME LOAN BANKS.—The Di5 rector shall establish risk-based capital standards 

6 under section 6 of the Federal Home Loan Bank 

7 Act for the Federal home loan banks. 

8 ‘‘(b) CONFIDENTIALITY OF INFORMATION.—Any per9 son that receives any book, record, or information from 

10 the Director or a regulated entity to enable the risk-based 

11 capital requirements established under this section to be 

12 applied shall—

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

14 record, or information in a manner that is generally 

15 consistent with the level of confidentiality established 

16 for the material by the Director or the regulated en17 tity; and 

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

19 United States Code, with respect to the book, 

20 record, or information. 

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

22 limit the authority of the Director to require other reports 

23 or undertakings, or take other action, in furtherance of 

24 the responsibilities of the Director under this Act.’’. 
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1 (b) FEDERAL HOME LOAN BANKS RISK-BASED CAP2 ITAL.—Section 6(a)(3) of the Federal Home Loan Bank 

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

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

5 the following new subparagraph: 

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

7 The Director shall, by regulation, establish risk8 based capital standards for the Federal home 

9 loan banks to ensure that the Federal home 

10 loan banks operate in a safe and sound manner, 

11 with sufficient permanent capital and reserves 

12 to support the risks that arise in the operations 

13 and management of the Federal home loans 

14 banks.’’; and 

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

16 and inserting ‘‘(A)’’. 

17 SEC. 114. MINIMUM AND CRITICAL CAPITAL LEVELS. 

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

19 Housing and Community Development Act of 1992 (12 

20 U.S.C. 4612) is amended—

21 (1) in subsection (a), by striking ‘‘IN GEN22 ERAL’’ and inserting ‘‘ENTERPRISES’’; and 

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

24 following new subsections: 
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1 ‘‘(b) FEDERAL HOME LOAN BANKS.—For purposes 

2 of this subtitle, the minimum capital level for each Federal 

3 home loan bank shall be the minimum capital required to 

4 be maintained to comply with the leverage requirement for 

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

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

7 ‘‘(c) ESTABLISHMENT OF REVISED MINIMUM CAP8 ITAL LEVELS.—Notwithstanding subsections (a) and (b) 

9 and notwithstanding the capital classifications of the regu10 lated entities, the Director may, by regulations issued 

11 under section 1319G, establish a minimum capital level 

12 for the enterprises, for the Federal home loan banks, or 

13 for both the enterprises and the banks, that is higher than 

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

15 the level specified in subsection (b) for the Federal home 

16 loan banks, to the extent needed to ensure that the regu17 lated entities operate in a safe and sound manner. 

18 ‘‘(d) AUTHORITY TO REQUIRE TEMPORARY IN19 CREASE.—Notwithstanding subsections (a) and (b) and 

20 any minimum capital level established pursuant to sub21 section (c), the Director may, by order, increase the min22 imum capital level for a regulated entity on a temporary 

23 basis for such period as the Director may provide if the 

24 Director—
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1 ‘‘(1) makes any determination specified in sub2 paragraphs (A) through (C) of section 1364(c)(1); 

3 ‘‘(2) determines that the regulated entity has 

4 violated any of the prudential standards established 

5 pursuant to section 1313A and, as a result of such 

6 violation, determines that an unsafe and unsound 

7 condition exists; or 

8 ‘‘(3) determines that an unsafe and unsound 

9 condition exists, except that a temporary increase in 

10 minimum capital imposed on a regulated entity pur11 suant to this paragraph shall not remain in place for 

12 a period of more than 6 months unless the Director 

13 makes a renewed determination of the existence of 

14 an unsafe and unsound condition. 

15 ‘‘(e) AUTHORITY TO ESTABLISH ADDITIONAL CAP16 ITAL AND RESERVE REQUIREMENTS FOR PARTICULAR

17 PROGRAMS.—The Director may, at any time by order or 

18 regulation, establish such capital or reserve requirements 

19 with respect to any program or activity of a regulated enti20 ty as the Director considers appropriate to ensure that 

21 the regulated entity operates in a safe and sound manner, 

22 with sufficient capital and reserves to support the risks 

23 that arise in the operations and management of the regu24 lated entity. 
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1 ‘‘(f) PERIODIC REVIEW.—The Director shall periodi2 cally review the amount of core capital maintained by the 

3 enterprises, the amount of capital retained by the Federal 

4 home loan banks, and the minimum capital levels estab5 lished for such regulated entities pursuant to this section. 

6 The Director shall rescind any temporary minimum cap7 ital level increase if the Director determines that the cir8 cumstances or facts justifying the temporary increase are 

9 no longer present.’’. 

10 (b) CRITICAL CAPITAL LEVELS.—

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

12 and Community Development Act of 1992 (12 

13 U.S.C. 4613) is amended—

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

15 ENTERPRISES.—FOR’’; and 

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

17 subsection: 

18 ‘‘(b) FEDERAL HOME LOAN BANKS.—

19 ‘‘(1) IN GENERAL.—For purposes of this sub20 title, the critical capital level for each Federal home 

21 loan bank shall be such amount of capital as the Di22 rector shall, by regulation require. 

23 ‘‘(2) CONSIDERATION OF OTHER CRITICAL CAP24 ITAL LEVELS.—In establishing the critical capital 

25 level under paragraph (1) for the Federal home loan 
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1 banks, the Director shall take due consideration of 

2 the critical capital level established under subsection 

3 (a) for the enterprises, with such modifications as 

4 the Director determines to be appropriate to reflect 

5 the difference in operations between the banks and 

6 the enterprises.’’. 

7 (2) REGULATIONS.—Not later than the expira8 tion of the 180-day period beginning on the effective 

9 date under section 185, the Director of the Federal 

10 Housing Finance Agency shall issue regulations pur11 suant to section 1363(b) of the Housing and Com12 munity Development Act of 1992 (as added by para13 graph (1) of this subsection) establishing the critical 

14 capital level under such section. 

15 SEC. 115. REVIEW OF AND AUTHORITY OVER ENTERPRISE 

16 ASSETS AND LIABILITIES. 

17 (a) IN GENERAL.—Subtitle B of title XIII of the 

18 Housing and Community Development Act of 1992 (12 

19 U.S.C. 4611 et seq.) is amended—

20 (1) by striking the subtitle designation and 

21 heading and inserting the following: 
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1 ‘‘Subtitle B—Required Capital Lev2 els for Regulated Entities, Spe3 cial Enforcement Powers, and 

4 Reviews of Assets and Liabil5 ities’’; 

6 and 

7 (2) by adding at the end the following new sec8 tion: 

9 ‘‘SEC. 1369E. REVIEWS OF ENTERPRISE ASSETS AND LIABIL10 ITIES. 

11 ‘‘(a) IN GENERAL.—The Director shall, by regula12 tion, establish standards by which the portfolio holdings, 

13 or rate of growth of the portfolio holdings, of the enter14 prises will be deemed to be consistent with the mission 

15 and the safe and sound operations of the enterprises. In 

16 developing such standards, the Director shall consider—

17 ‘‘(1) the size or growth of the mortgage market; 

18 ‘‘(2) the need for the portfolio in maintaining li19 quidity or stability of the secondary mortgage mar20 ket (including the market for the mortgage-backed 

21 securities the enterprises issue); 

22 ‘‘(3) the need for an inventory of mortgages in 

23 connection with securitizations; 
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1 ‘‘(4) the need for the portfolio to directly sup2 port the affordable housing mission of the enter3 prises; 

4 ‘‘(5) the liquidity needs of the enterprises; 

5 ‘‘(6) any potential risks posed to the enterprises 

6 by the nature of the portfolio holdings; and 

7 ‘‘(7) any additional factors that the Director 

8 determines to be necessary to carry out the purpose 

9 under the first sentence of this subsection to estab10 lish standards for assessing whether the portfolio 

11 holdings are consistent with the mission and safe 

12 and sound operations of the enterprises. 

13 ‘‘(b) TEMPORARY ADJUSTMENTS.—The Director 

14 may, by order, make temporary adjustments to the estab15 lished standards for an enterprise or both enterprises, 

16 such as during times of economic distress or market dis17 ruption. 

18 ‘‘(c) AUTHORITY TO REQUIRE DISPOSITION OR AC19 QUISITION.—The Director shall monitor the portfolio of 

20 each enterprise. Pursuant to subsection (a) and notwith21 standing the capital classifications of the enterprises, the 

22 Director may, by order, require an enterprise, under such 

23 terms and conditions as the Director determines to be ap24 propriate, to dispose of or acquire any asset, if the Direc-
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1 tor determines that such action is consistent with the pur2 poses of this Act or any of the authorizing statutes.’’. 

3 (b) REGULATIONS.—Not later than the expiration of 

4 the 180-day period beginning on the effective date under 

5 section 185, the Director of the Federal Housing Finance 

6 Agency shall issue regulations pursuant to section 

7 1369E(a) of the Housing and Community Development 

8 Act of 1992 (as added by subsection (a) of this section) 

9 establishing the portfolio holdings standards under such 

10 section. 

11 SEC. 116. CORPORATE GOVERNANCE OF ENTERPRISES. 

12 The Housing and Community Development Act of 

13 1992 is amended by inserting before section 1323 (12 

14 U.S.C. 4543) the following new section: 

15 ‘‘SEC. 1322A. CORPORATE GOVERNANCE OF ENTERPRISES. 

16 ‘‘(a) BOARD OF DIRECTORS.—

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

18 members of the board of directors of each enterprise 

19 shall be independent board members, as defined 

20 under rules set forth by the New York Stock Ex21 change, as such rules may be amended from time to 

22 time. 

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

24 its obligations and duties under applicable laws, 

25 rules, regulations, and guidelines, the board of direc-
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1 tors of an enterprise shall meet at least eight times 

2 a year and not less than once a calendar quarter. 

3 ‘‘(3) NON-MANAGEMENT BOARD MEMBER

4 MEETINGS.—The non-management directors of an 

5 enterprise shall meet at regularly scheduled execu6 tive sessions without management participation. 

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

8 the transaction of business, a quorum of the board 

9 of directors of an enterprise shall be at least a ma10 jority of the seated board of directors and a board 

11 member may not vote by proxy. 

12 ‘‘(5) INFORMATION.—The management of an 

13 enterprise shall provide a board member of the en14 terprise with such adequate and appropriate infor15 mation that a reasonable board member would find 

16 important to the fulfillment of his or her fiduciary 

17 duties and obligations. 

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

19 board of directors of each enterprise shall review, 

20 with appropriate professional assistance, the require21 ments of laws, rules, regulations, and guidelines that 

22 are applicable to its activities and duties. 

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

24 ‘‘(1) FREQUENCY OF MEETINGS.—Any com25 mittee of the board of directors of an enterprise 
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1 shall meet with sufficient frequency to carry out its 

2 obligations and duties under applicable laws, rules, 

3 regulations, and guidelines. 

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

5 shall provide for the establishment, however styled, 

6 of the following committees of the board of directors: 

7 ‘‘(A) Audit committee. 

8 ‘‘(B) Compensation committee. 

9 ‘‘(C) Nominating/corporate governance 

10 committee. 

11 Such committees shall be in compliance with the 

12 charter, independence, composition, expertise, duties, 

13 responsibilities, and other requirements set forth 

14 under section 10A(m) of the Securities Exchange 

15 Act of 1934 (15 U.S.C. 78j–1(m)), with respect to 

16 the audit committee, and under rules issued by the 

17 New York Stock Exchange, as such rules may be 

18 amended from time to time. 

19 ‘‘(c) COMPENSATION.—

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

21 members, executive officers, and employees of an en22 terprise—

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

24 is reasonable and appropriate; 
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1 ‘‘(B) shall be commensurate with the du2 ties and responsibilities of such persons; 

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

4 goals of the enterprise; 

5 ‘‘(D) shall not focus solely on earnings per6 formance, but shall take into account risk man7 agement, operational stability and legal and 

8 regulatory compliance as well; and 

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

10 complies with applicable laws, rules, and regula11 tions. 

12 ‘‘(2) REIMBURSEMENT.—If an enterprise is re13 quired to prepare an accounting restatement due to 

14 the material noncompliance of the enterprise, as a 

15 result of misconduct, with any financial reporting re16 quirement under the securities laws, the chief execu17 tive officer and chief financial officer of the enter18 prise shall reimburse the enterprise as provided 

19 under section 304 of the Sarbanes-Oxley Act of 

20 2002 (15 U.S.C. 7243). This provision does not oth21 erwise limit the authority of the Agency to employ 

22 remedies available to it under its enforcement au23 thorities. 

24 ‘‘(d) CODE OF CONDUCT AND ETHICS.—
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1 ‘‘(1) IN GENERAL.—An enterprise shall estab2 lish and administer a written code of conduct and 

3 ethics that is reasonably designed to assure the abil4 ity of board members, executive officers, and em5 ployees of the enterprise to discharge their duties 

6 and responsibilities, on behalf of the enterprise, in 

7 an objective and impartial manner, and that includes 

8 standards required under section 406 of the Sar9 banes-Oxley Act of 2002 (15 U.S.C. 7264) and 

10 other applicable laws, rules, and regulations. 

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

12 years, an enterprise shall review the adequacy of its 

13 code of conduct and ethics for consistency with prac14 tices appropriate to the enterprise and make any ap15 propriate revisions to such code. 

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

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

18 be responsible for directing the conduct and affairs of the 

19 enterprise in furtherance of the safe and sound operation 

20 of the enterprise and shall remain reasonably informed of 

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

22 The responsibilities of the board of directors shall include 

23 having in place adequate policies and procedures to assure 

24 its oversight of, among other matters, the following: 
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1 ‘‘(1) Corporate strategy, major plans of action, 

2 risk policy, programs for legal and regulatory com3 pliance and corporate performance, including pru4 dent plans for growth and allocation of adequate re5 sources to manage operations risk. 

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

7 officers and succession planning for such executive 

8 officers. 

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

10 ‘‘(4) Integrity of accounting and financial re11 porting systems of the enterprise, including inde12 pendent audits and systems of internal control. 

13 ‘‘(5) Process and adequacy of reporting, disclo14 sures, and communications to shareholders, inves15 tors, and potential investors. 

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

17 executive officers. 

18 ‘‘(7) Responsiveness of executive officers in pro19 viding accurate and timely reports to Federal regu20 lators and in addressing the supervisory concerns of 

21 Federal regulators in a timely and appropriate man22 ner. 

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

24 enterprise may not directly or indirectly, including 

25 through any subsidiary, extend or maintain credit, arrange 
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1 for the extension of credit, or renew an extension of credit, 

2 in the form of a personal loan to or for any board member 

3 or executive officer of the enterprise, as provided by sec4 tion 13(k) of the Securities Exchange Act of 1934 (15 

5 U.S.C. 78m(k)). 

6 ‘‘(g) CERTIFICATION OF DISCLOSURES.—The chief 

7 executive officer and the chief financial officer of an enter8 prise shall review each quarterly report and annual report 

9 issued by the enterprise and such reports shall include cer10 tifications by such officers as required by section 302 of 

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

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

13 may not accept audit services from an external auditing 

14 firm if the lead or coordinating audit partner who has pri15 mary responsibility for the external audit of the enterprise, 

16 or the external audit partner who has responsibility for 

17 reviewing the external audit has performed audit services 

18 for the enterprise in each of the five previous fiscal years. 

19 ‘‘(i) COMPLIANCE PROGRAM.—

20 ‘‘(1) REQUIREMENT.—Each enterprise shall es21 tablish and maintain a compliance program that is 

22 reasonably designed to assure that the enterprise 

23 complies with applicable laws, rules, regulations, and 

24 internal controls. 
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1 ‘‘(2) COMPLIANCE OFFICER.—The compliance 

2 program of an enterprise shall be headed by a com3 pliance officer, however styled, who reports directly 

4 to the chief executive officer of the enterprise. The 

5 compliance officer shall report regularly to the board 

6 of directors or an appropriate committee of the 

7 board of directors on compliance with and the ade8 quacy of current compliance policies and procedures 

9 of the enterprise, and shall recommend any adjust10 ments to such policies and procedures that the com11 pliance officer considers necessary and appropriate. 

12 ‘‘(j) RISK MANAGEMENT PROGRAM.—

13 ‘‘(1) REQUIREMENT.—Each enterprise shall es14 tablish and maintain a risk management program 

15 that is reasonably designed to manage the risks of 

16 the operations of the enterprise. 

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

18 management program of an enterprise shall be head19 ed by a risk management officer, however styled, 

20 who reports directly to the chief executive officer of 

21 the enterprise. The risk management officer shall re22 port regularly to the board of directors or an appro23 priate committee of the board of directors on compli24 ance with and the adequacy of current risk manage25 ment policies and procedures of the enterprise, and 
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1 shall recommend any adjustments to such policies 

2 and procedures that the risk management officer 

3 considers necessary and appropriate. 

4 ‘‘(k) COMPLIANCE WITH OTHER LAWS.—

5 ‘‘(1) DEREGISTERED OR UNREGISTERED COM6 MON STOCK.—If an enterprise deregisters or has not 

7 registered its common stock with the Securities and 

8 Exchange Commission under the Securities Ex9 change Act of 1934, the enterprise shall comply or 

10 continue to comply with sections 10A(m) and 13(k) 

11 of the Securities Exchange Act of 1934 (15 U.S.C. 

12 78j–1(m), 78m(k)) and sections 302, 304, and 406 

13 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7241, 

14 7243, 7264), subject to such requirements as pro15 vided by subsection (l) of this section. 

16 ‘‘(2) REGISTERED COMMON STOCK.—An enter17 prise that has its common stock registered with the 

18 Securities and Exchange Commission shall maintain 

19 such registered status, unless it provides 60 days 

20 prior written notice to the Director stating its intent 

21 to deregister and its understanding that it will re22 main subject to the requirements of the sections of 

23 the Securities Exchange Act of 1934 and the Sar24 banes-Oxley Act of 2002, subject to such require25 ments as provided by subsection (l) of this section. 
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1 ‘‘(l) OTHER MATTERS.—The Director may from time 

2 to time establish standards, by regulation, order, or guide3 line, regarding such other corporate governance matters 

4 of the enterprises as the Director considers appropriate. 

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

6 with standards of Federal or State law (including the Re7 vised Model Corporation Act) or New York Stock Ex8 change rules that are made applicable to an enterprise by 

9 section 1710.10 of the Director’s rules (12 CFR 1710.10) 

10 and by subsections (a), (b), (g), (i), (j), and (k) of this 

11 section, the Director, in the Director’s sole discretion, may 

12 modify the standards contained in this section or in part 

13 1710 of the Director’s rules (12 CFR Part 1710) in ac14 cordance with section 553 of title 5, United States Code, 

15 and upon written notice to the enterprise.’’. 

16 SEC. 117. REQUIRED REGISTRATION UNDER SECURITIES 

17 EXCHANGE ACT OF 1934. 

18 The Housing and Community Development Act of 

19 1992 is amended by adding after section 1322A, as added 

20 by the preceding provisions of this Act, the following new 

21 section: 

22 ‘‘SEC. 1322B. REQUIRED REGISTRATION UNDER SECURI23 TIES EXCHANGE ACT OF 1934. 

24 ‘‘(a) IN GENERAL.—Each regulated entity shall reg25 ister at least one class of the capital stock of such regu-
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1 lated entity, and maintain such registration with the Secu2 rities and Exchange Commission, under the Securities Ex3 change Act of 1934. 

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

5 with sections 14 and 16 of the Securities Exchange Act 

6 of 1934.’’. 

7 SEC. 118. LIAISON WITH FINANCIAL INSTITUTIONS EXAM8 INATION COUNCIL. 

9 Section 1007 of the Federal Financial Institutions 

10 Examination Council Act of 1978 (12 U.S.C. 3306) is 

11 amended—

12 (1) in the section heading, by inserting after 

13 ‘‘STATE’’ the following: ‘‘AND FEDERAL HOUSING FI14 NANCE AGENCY’’; and 

15 (2) by inserting after ‘‘financial institutions’’ 

16 the following: ‘‘, and one representative of the Fed17 eral Housing Finance Agency,’’. 

18 SEC. 119. GUARANTEE FEE STUDY. 

19 (a) IN GENERAL.—The Director of the Federal 

20 Housing Finance Agency, in consultation with the heads 

21 of the federal banking agencies, shall, not later than 18 

22 months after the date of the enactment of this Act, submit 

23 to the Congress a study concerning the pricing, trans24 parency and reporting of the Federal National Mortgage 

25 Association, the Federal Home Loan Mortgage Corpora-
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1 tion, and the Federal home loan banks with regard to 

2 guarantee fees and concerning analogous practices, trans3 parency and reporting requirements (including advances 

4 pricing practices by the Federal Home Loan Banks) of 

5 other participants in the business of mortgage purchases 

6 and securitization. 

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

8 shall examine various factors such as credit risk, 

9 counterparty risk considerations, economic value consider10 ations, and volume considerations used by the regulated 

11 entities (as such term is defined in section 1303 of the 

12 Housing and Community Development Act of 1992) in13 cluded in the study in setting the amount of fees they 

14 charge. 

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

16 under subsection (a) shall identify and analyze—

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

18 term is defined in section 1303 of the Housing and 

19 Community Development Act of 1992) in deter20 mining the amount of the guarantee fees it charges; 

21 (2) the total revenue the enterprises earn from 

22 guarantee fees; 

23 (3) the total costs incurred by the enterprises 

24 for providing guarantees; 
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1 (4) the average guarantee fee charged by the 

2 enterprises; 

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

4 fees charged differ from such fees charged during 

5 the previous year; 

6 (6) a breakdown of the revenue and costs asso7 ciated with providing guarantees, based on product 

8 type and risk classifications; and 

9 (7) other relevant information on guarantee 

10 fees with other participants in the mortgage and 

11 securitization business. 

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

13 section may be construed to require or authorize the Di14 rector of the Federal Housing Finance Agency, in connec15 tion with the study mandated by this section, to disclose 

16 information of the enterprises or other organization that 

17 is confidential or proprietary. 

18 (e) EFFECTIVE DATE.—This section shall take effect 

19 on the date of the enactment of this Act. 

20 SEC. 120. CONFORMING AMENDMENTS. 

21 (a) 1992 ACT.—Part 1 of subtitle A of title XIII of 

22 the Housing and Community Development Act of 1992 

23 (12 U.S.C. 4511 et seq.), as amended by the preceding 

24 provisions of this Act, is further amended—
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1 (1) by striking ‘‘an enterprise’’ each place such 

2 term appears in such part (except in sections 

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

4 1316(b)(3)) and inserting ‘‘a regulated entity’’; 

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

6 term appears in such part (except in section 

7 1316(b)(3)) and inserting ‘‘the regulated entity’’; 

8 (3) by striking ‘‘the enterprises’’ each place 

9 such term appears in such part (except in sections 

10 1312(c)(2), and 1312(e)(2)) and inserting ‘‘the reg11 ulated entities’’; 

12 (4) by striking ‘‘each enterprise’’ each place 

13 such term appears in such part and inserting ‘‘each 

14 regulated entity’’; 

15 (5) by striking ‘‘Office’’ each place such term 

16 appears in such part (except in sections 1311(b)(2), 

17 1312(b)(5), 1315(b), and 1316(a)(4), (g), and (h), 

18 1317(c), and 1319A(a)) and inserting ‘‘Agency’’; 

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

20 (A) in subsection (a)—

21 (i) in the subsection heading, by strik22 ing ‘‘OFFICE PERSONNEL’’ and inserting 

23 ‘‘IN GENERAL’’; and 
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1 (ii) by striking ‘‘The’’ and inserting 

2 ‘‘Subject to title III of the Federal Hous3 ing Finance Reform Act of 2007, the’’; 

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

5 and 

6 (C) by redesignating subsection (e) as sub7 section (d); 

8 (7) in section 1319B (12 U.S.C. 4521), by 

9 striking ‘‘Committee on Banking, Finance and 

10 Urban Affairs’’ each place such term appears and 

11 inserting ‘‘Committee on Financial Services’’; and 

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

13 all that follows ‘‘United States Code’’ and inserting 

14 ‘‘, the Agency shall be considered an agency respon15 sible for the regulation or supervision of financial in16 stitutions.’’. 

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

18 The Federal National Mortgage Association Charter Act 

19 (12 U.S.C. 1716 et seq.) is amended—

20 (1) by striking ‘‘Director of the Office of Fed21 eral Housing Enterprise Oversight of the Depart22 ment of Housing and Urban Development’’ each 

23 place such term appears, and inserting ‘‘Director of 

24 the Federal Housing Finance Agency’’, in—
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1 (A) section 303(c)(2) (12 U.S.C. 

2 1718(c)(2)); 

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

4 1723a(d)(3)(B)); and 

5 (C) section 309(k)(1); and 

6 (2) in section 309—

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

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

9 each place such term appears and inserting 

10 ‘‘Financial Services’’; and 

11 (B) in subsection (m)—

12 (i) in paragraph (1), by striking ‘‘Sec13 retary’’ the second place such term ap14 pears and inserting ‘‘Director’’; 

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

16 ‘‘Secretary’’ the second place such term 

17 appears and inserting ‘‘Director’’; and 

18 (iii) by striking ‘‘Secretary’’ each 

19 other place such term appears and insert20 ing ‘‘Director of the Federal Housing Fi21 nance Agency’’; and 

22 (C) in subsection (n), by striking ‘‘Sec23 retary’’ each place such term appears and in24 serting ‘‘Director of the Federal Housing Fi25 nance Agency’’. 
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1 (c) AMENDMENTS TO FREDDIE MAC ACT.—The Fed2 eral Home Loan Mortgage Corporation Act is amended—

3 (1) by striking ‘‘Director of the Office of Fed4 eral Housing Enterprise Oversight of the Depart5 ment of Housing and Urban Development’’ each 

6 place such term appears, and inserting ‘‘Director of 

7 the Federal Housing Finance Agency’’, in—

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

9 1452(b)(2)); 

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

11 1452(h)(2)); and 

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

13 1456(c)(1)); 

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

15 U.S.C. 1452(h)(1), 1456(f)(1)), by striking ‘‘Bank16 ing, Finance and Urban Affairs’’ each place such 

17 term appears and inserting ‘‘Financial Services’’; 

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

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

20 ‘‘306(c)’’; and 

21 (B) by striking ‘‘section 106’’ and insert22 ing ‘‘section 1316’’; and 

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

24 (A) in subsection (e)—
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1 (i) in paragraph (1), by striking ‘‘Sec2 retary’’ the second place such term ap3 pears and inserting ‘‘Director’’; 

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

5 ‘‘Secretary’’ the second place such term 

6 appears and inserting ‘‘Director’’; and 

7 (iii) by striking ‘‘Secretary’’ each 

8 other place such term appears and insert9 ing ‘‘Director of the Federal Housing Fi10 nance Agency’’; and 

11 (B) in subsection (f), by striking ‘‘Sec12 retary’’ each place such term appears and in13 serting ‘‘Director of the Federal Housing Fi14 nance Agency’’. 

15 Subtitle B—Improvement of 

16 Mission Supervision 

17 SEC. 131. TRANSFER OF PRODUCT APPROVAL AND HOUS18 ING GOAL OVERSIGHT. 

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

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

21 seq.) is amended—

22 (1) by striking the designation and heading for 

23 the part and inserting the following: 
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1 ‘‘PART 2—PRODUCT APPROVAL BY DIRECTOR, 

2 CORPORATE GOVERNANCE, AND ESTABLISH3 MENT OF HOUSING GOALS’’; 

4 and 

5 (2) by striking sections 1321 and 1322. 

6 SEC. 132. REVIEW OF ENTERPRISE PRODUCTS. 

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

8 of the Housing and Community Development Act of 1992 

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

10 4543) the following new section: 

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

12 OF ENTERPRISES. 

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 materially impair the 

12 efficiency 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), the enterprise may offer 

17 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 not a product, as defined 

22 in subsection (f), the enterprise shall provide written 

23 notice to the Director prior to the commencement of 

24 such activity, service, 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

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 pur14 poses 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.—For purposes of 

24 this section, the term ‘product’ does not include—
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1 ‘‘(1) the automated loan underwriting system of 

2 an enterprise in existence as of the date of the en3 actment of the Federal Housing Finance Reform 

4 Act of 2007, including any upgrade to the tech5 nology, operating system, or software to operate the 

6 underwriting system; or 

7 ‘‘(2) any modification to the mortgage terms 

8 and conditions or mortgage underwriting criteria re9 lating to the mortgages that are purchased or guar10 anteed by an enterprise: Provided, That such modi11 fications do not alter the underlying transaction so 

12 as to include services or financing, other than resi13 dential mortgage financing, or create significant new 

14 exposure to risk for the enterprise or the holder of 

15 the mortgage. 

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

17 be deemed to restrict—

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

19 Director over all new and existing products or activi20 ties; or 

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

22 new and existing products or activities to determine 

23 that such products or activities are consistent with 

24 the statutory mission of the enterprise.’’. 

25 (b) CONFORMING AMENDMENTS.—
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1 (1) FANNIE MAE.—Section 302(b)(6) of the 

2 Federal National Mortgage Association Charter Act 

3 (12 U.S.C. 1717(b)(6)) is amended—

4 (A) by striking ‘‘implement any new pro5 gram’’ and inserting ‘‘initially offer any prod6 uct’’; 

7 (B) by striking ‘‘section 1303’’ and insert8 ing ‘‘section 1321(f)’’; and 

9 (C) by striking ‘‘before obtaining the ap10 proval of the Secretary under section 1322’’ 

11 and inserting ‘‘except in accordance with sec12 tion 1321’’. 

13 (2) FREDDIE MAC.—Section 305(c) of the Fed14 eral Home Loan Mortgage Corporation Act (12 

15 U.S.C. 1454(c)) is amended—

16 (A) by striking ‘‘implement any new pro17 gram’’ and inserting ‘‘initially offer any prod18 uct’’; 

19 (B) by striking ‘‘section 1303’’ and insert20 ing ‘‘section 1321(f)’’; and 

21 (C) by striking ‘‘before obtaining the ap22 proval of the Secretary under section 1322’’ 

23 and inserting ‘‘except in accordance with sec24 tion 1321’’. 
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1 (3) 1992 ACT.—Section 1303 of the Housing 

2 and Community Development Act of 1992 (12 

3 U.S.C. 4502), as amended by section 2 of this Act, 

4 is further amended—

5 (A) by striking paragraph (17) (relating to 

6 the definition of ‘‘new program’’); and 

7 (B) by redesignating paragraphs (18) 

8 through (23) as paragraphs (17) through (22), 

9 respectively. 

10 SEC. 133. CONFORMING LOAN LIMITS. 

11 (a) FANNIE MAE.—

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

13 Federal National Mortgage Association Charter Act 

14 (12 U.S.C. 1717(b)(2)) is amended—

15 (A) in the 4th sentence, by striking ‘‘the 

16 Resolution Trust Corporation,’’; and 

17 (B) by striking the 7th and 8th sentences 

18 and inserting the following new sentences: ‘‘For 

19 2007, such limitations shall not exceed 

20 $417,000 for a mortgage secured by a single21 family residence, $533,850 for a mortgage se22 cured by a 2-family residence, $645,300 for a 

23 mortgage secured by a 3-family residence, and 

24 $801,950 for a mortgage secured by a 4-family 

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

2 each year beginning with 2008, subject to the 

3 limitations in this paragraph. Each adjustment 

4 shall be made by adding to or subtracting from 

5 each such amount (as it may have been pre6 viously adjusted) a percentage thereof equal to 

7 the percentage increase or decrease, during the 

8 most recent 12-month or four-quarter period 

9 ending before the time of determining such an10 nual adjustment, in the housing price index 

11 maintained by the Director of the Federal 

12 Housing Finance Agency (pursuant to section 

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

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

16 of the Federal National Mortgage Association Char17 ter Act is (12 U.S.C. 1717(b)(2)) is amended by 

18 adding after the period at the end the following: 

19 ‘‘Such foregoing limitations shall also be increased 

20 with respect to properties of a particular size located 

21 in any area for which the median price for such size 

22 residence exceeds the foregoing limitation for such 

23 size residence, to the lesser of 150 percent of such 

24 foregoing limitation for such size residence or the 

25 amount that is equal to the median price in such 
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1 area for such size residence, except that, subject to 

2 the order, if any, issued by the Director of the Fed3 eral Housing Finance Agency pursuant to section 

4 133(d)(3) of the Federal Housing Finance Reform 

5 Act of 2007, such increase shall apply only with re6 spect to mortgages on which are based securities 

7 issued and sold by the corporation.’’. 

8 (b) FREDDIE MAC.—

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

10 Federal Home Loan Mortgage Corporation Act (12 

11 U.S.C. 1454(a)(2)) is amended—

12 (A) in the 3rd sentence, by striking ‘‘the 

13 Resolution Trust Corporation,’’; and 

14 (B) by striking the 6th and 7th sentences 

15 and inserting the following new sentences: ‘‘For 

16 2007, such limitations shall not exceed 

17 $417,000 for a mortgage secured by a single18 family residence, $533,850 for a mortgage se19 cured by a 2-family residence, $645,300 for a 

20 mortgage secured by a 3-family residence, and 

21 $801,950 for a mortgage secured by a 4-family 

22 residence, except that such maximum limita23 tions shall be adjusted effective January 1 of 

24 each year beginning with 2008, subject to the 

25 limitations in this paragraph. Each adjustment 
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1 shall be made by adding to or subtracting from 

2 each such amount (as it may have been pre3 viously adjusted) a percentage thereof equal to 

4 the percentage increase or decrease, during the 

5 most recent 12-month or four-quarter period 

6 ending before the time of determining such an7 nual adjustment, in the housing price index 

8 maintained by the Director of the Federal 

9 Housing Finance Agency (pursuant to section 

10 1322 of the Housing and Community Develop11 ment Act of 1992 (12 U.S.C. 4541)).’’

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

13 of the Federal Home Loan Mortgage Corporation 

14 Act is amended by adding after the period at the 

15 end the following: ‘‘Such foregoing limitations shall 

16 also be increased with respect to properties of a par17 ticular size located in any area for which the median 

18 price for such size residence exceeds the foregoing 

19 limitation for such size residence, to the lesser of 

20 150 percent of such foregoing limitation for such 

21 size residence or the amount that is equal to the me22 dian price in such area for such size residence, ex23 cept that, subject to the order, if any, issued by the 

24 Director of the Federal Housing Finance Agency 

25 pursuant to section 133(d)(3) of the Federal Hous-
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1 ing Finance Reform Act of 2007, such increase shall 

2 apply only with respect to mortgages on which are 

3 based securities issued and sold by the Corpora4 tion.’’. 

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

6 subtitle A of title XIII of the Housing and Community 

7 Development Act of 1992 (as amended by the preceding 

8 provisions of this Act) is amended by inserting after sec9 tion 1321 (as added by section 132 of this Act) the fol10 lowing new section: 

11 ‘‘SEC. 1322. HOUSING PRICE INDEX. 

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

13 maintain a method of assessing the national average 1-

14 family house price for use for adjusting the conforming 

15 loan limitations of the enterprises. In establishing such 

16 method, the Director shall take into consideration the 

17 monthly survey of all major lenders conducted by the Fed18 eral Housing Finance Agency to determine the national 

19 average 1-family house price, the House Price Index main20 tained by the Office of Federal Housing Enterprise Over21 sight of the Department of Housing and Urban Develop22 ment before the effective date under section 185 of the 

23 Federal Housing Finance Reform Act of 2007, any appro24 priate house price indexes of the Bureau of the Census 
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1 of the Department of Commerce, and any other indexes 

2 or measures that the Director considers appropriate. 

3 ‘‘(b) GAO AUDIT.—

4 ‘‘(1) IN GENERAL.—At such times as are re5 quired under paragraph (2), the Comptroller Gen6 eral of the United States shall conduct an audit of 

7 the methodology established by the Director under 

8 subsection (a) to determine whether the methodology 

9 established is an accurate and appropriate means of 

10 measuring changes to the national average 1-family 

11 house price. 

12 ‘‘(2) TIMING.—An audit referred to in para13 graph (1) shall be conducted and completed not later 

14 than the expiration of the 180-day period that be15 gins upon each of the following dates: 

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

17 which such methodology is initially established 

18 under subsection (a) in final form by the Direc19 tor. 

20 ‘‘(B) MODIFICATION OR AMENDMENT.—

21 Each date upon which any modification or 

22 amendment to such methodology is adopted in 

23 final form by the Director. 

24 ‘‘(3) REPORT.—Within 30 days of the comple25 tion of any audit conducted under this subsection, 
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1 the Comptroller General shall submit a report detail2 ing the results and conclusions of the audit to the 

3 Director, the Committee on Financial Services of the 

4 House of Representatives, and the Committee on 

5 Banking, Housing, and Urban Affairs of the Sen6 ate.’’. 

7 (d) CONDITIONS ON CONFORMING LOAN LIMIT FOR

8 HIGH-COST AREAS.—

9 (1) STUDY.—The Director of the Federal 

10 Housing Finance Agency shall conduct a study 

11 under this subsection during the six-month period 

12 beginning on the effective date under section 185 of 

13 this Act. 

14 (2) ISSUES.—The study under this subsection 

15 shall determine—

16 (A) the effect that restricting the con17 forming loan limits for high-cost areas only to 

18 mortgages on which are based securities issued 

19 and sold by the Federal National Mortgage As20 sociation and the Federal Home Loan Mortgage 

21 Corporation (as provided in the last sentence of 

22 section 302(b)(2) of the Federal National Mort23 gage Association Charter Act and the last sen24 tence of section 305(a)(2) of the Federal Home 

25 Loan Mortgage Corporation Act, pursuant to 
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1 the amendments made by subsections (a)(2) 

2 and (b)(2) of this section) would have on the 

3 cost to borrowers for mortgages on housing in 

4 such high-cost areas; 

5 (B) the effects that such restrictions would 

6 have on the availability of mortgages for hous7 ing in such high-cost areas; and 

8 (C) the extent to which the Federal Na9 tional Mortgage Association and the Federal 

10 Home Loan Mortgage Corporation will be able 

11 to issue and sell securities based on mortgages 

12 for housing located in such high-cost areas. 

13 (3) DETERMINATION.—

14 (A) IN GENERAL.—Not later than the ex15 piration of the six-month period specified in 

16 paragraph (1), the Director of the Federal 

17 Housing Finance Agency shall make a deter18 mination, based on the results of the study 

19 under this subsection, of whether the restriction 

20 of conforming loan limits for high-cost areas 

21 only to mortgages on which are based securities 

22 issued and sold by the Federal National Mort23 gage Association and the Federal Home Loan 

24 Mortgage Corporation (as provided in the 

25 amendments made by subsections (a)(2) and 
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1 (b)(2) of this section) will result in an increase 

2 in the cost to borrowers for mortgages on hous3 ing in such high-cost areas. 

4 (B) ORDER.—If such determination is that 

5 costs to borrowers on housing in such high-cost 

6 areas will be increased by such restrictions, the 

7 Director may issue an order terminating such 

8 restrictions, in whole or in part. 

9 (4) PUBLICATION.—Not later than the expira10 tion of the six-month period specified in paragraph 

11 (1), the Director of the Federal Housing Finance 

12 Agency shall cause to be published in the Federal 

13 Register—

14 (A) a report that—

15 (i) describes the study under this sub16 section; and 

17 (ii) sets forth the conclusions of the 

18 study regarding the issues to be deter19 mined under paragraph (2); and 

20 (B) notice of the determination of the Di21 rector under paragraph (3); and 

22 (C) the order of the Director under para23 graph (3). 

24 (5) DEFINITION.—For purposes of this sub25 section, the term ‘‘conforming loan limits for high-
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1 cost areas’’ means the dollar amount limitations ap2 plicable under the section 302(b)(2) of the Federal 

3 National Mortgage Association Charter Act and sec4 tion 305(a)(2) of the Federal Home Loan Mortgage 

5 Corporation Act (as amended by subsections (a) and 

6 (b) of this section) for areas described in the last 

7 sentence of such sections (as so amended). 

8 SEC. 134. ANNUAL HOUSING REPORT REGARDING REGU9 LATED ENTITIES. 

10 (a) IN GENERAL.—The Housing and Community De11 velopment Act of 1992 is amended by striking section 

12 1324 (12 U.S.C. 4544) and inserting the following new 

13 section: 

14 ‘‘SEC. 1324. ANNUAL HOUSING REPORT REGARDING REGU15 LATED ENTITIES. 

16 ‘‘(a) IN GENERAL.—After reviewing and analyzing 

17 the reports submitted under section 309(n) of the Federal 

18 National Mortgage Association Charter Act, section 

19 307(f) of the Federal Home Loan Mortgage Corporation 

20 Act, and section 10(j)(11) of the Federal Home Loan 

21 Bank Act (12 U.S.C. 1430(j)(11)), the Director shall sub22 mit a report, not later than October 30 of each year, to 

23 the Committee on Financial Services of the House of Rep24 resentatives and the Committee on Banking, Housing, and 
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1 Urban Affairs of the Senate, on the activities of each regu2 lated entity. 

3 ‘‘(b) CONTENTS.—The report shall—

4 ‘‘(1) discuss the extent to which—

5 ‘‘(A) each enterprise is achieving the an6 nual housing goals established under subpart B 

7 of this part; 

8 ‘‘(B) each enterprise is complying with sec9 tion 1337; 

10 ‘‘(C) each Federal home loan bank is com11 plying with section 10(j) of the Federal Home 

12 Loan Bank Act; and 

13 ‘‘(D) each regulated entity is achieving the 

14 purposes of the regulated entity established by 

15 law; 

16 ‘‘(2) aggregate and analyze relevant data on in17 come to assess the compliance by each enterprise 

18 with the housing goals established under subpart B; 

19 ‘‘(3) aggregate and analyze data on income, 

20 race, and gender by census tract and other relevant 

21 classifications, and compare such data with larger 

22 demographic, housing, and economic trends; 

23 ‘‘(4) examine actions that—

24 ‘‘(A) each enterprise has undertaken or 

25 could undertake to promote and expand the an-
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1 nual goals established under subpart B and the 

2 purposes of the enterprise established by law; 

3 and 

4 ‘‘(B) each Federal home loan bank has 

5 taken or could undertake to promote and ex6 pand the community investment program and 

7 affordable housing program of the bank estab8 lished under section subsections (i) and (j) of 

9 section 10 of the Federal Home Loan Bank 

10 Act; 

11 ‘‘(5) examine the primary and secondary multi12 family housing mortgage markets and describe—

13 ‘‘(A) the availability and liquidity of mort14 gage credit; 

15 ‘‘(B) the status of efforts to provide stand16 ard credit terms and underwriting guidelines 

17 for multifamily housing and to securitize such 

18 mortgage products; and 

19 ‘‘(C) any factors inhibiting such standard20 ization and securitization; 

21 ‘‘(6) examine actions each regulated entity has 

22 undertaken and could undertake to promote and ex23 pand opportunities for first-time homebuyers, includ24 ing the use of alternative credit scoring; 
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1 ‘‘(7) describe any actions taken under section 

2 1325(5) with respect to originators found to violate 

3 fair lending procedures; 

4 ‘‘(8) discuss and analyze existing conditions and 

5 trends, including conditions and trends relating to 

6 pricing, in the housing markets and mortgage mar7 kets; and 

8 ‘‘(9) identify the extent to which each enter9 prise is involved in mortgage purchases and sec10 ondary market activities involving subprime loans 

11 (as identified in accordance with the regulations 

12 issued pursuant to section 134(b) of the Federal 

13 Housing Finance Reform Act of 2007) and compare 

14 the characteristics of subprime loans purchased and 

15 securitized by the enterprises to other loans pur16 chased and securitized by the enterprises. 

17 ‘‘(c) DATA COLLECTION AND REPORTING.—

18 ‘‘(1) IN GENERAL.—To assist the Director in 

19 analyzing the matters described in subsection (b) 

20 and establishing the methodology described in sec21 tion 1322, the Director shall conduct, on a monthly 

22 basis, a survey of mortgage markets in accordance 

23 with this subsection. 
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1 ‘‘(2) DATA POINTS.—Each monthly survey con2 ducted by the Director under paragraph (1) shall 

3 collect data on—

4 ‘‘(A) the characteristics of individual mort5 gages that are eligible for purchase by the en6 terprises and the characteristics of individual 

7 mortgages that are not eligible for purchase by 

8 the enterprises including, in both cases, infor9 mation concerning—

10 ‘‘(i) the price of the house that se11 cures the mortgage; 

12 ‘‘(ii) the loan-to-value ratio of the 

13 mortgage, which shall reflect any sec14 ondary liens on the relevant property; 

15 ‘‘(iii) the terms of the mortgage; 

16 ‘‘(iv) the creditworthiness of the bor17 rower or borrowers; and 

18 ‘‘(v) whether the mortgage, in the 

19 case of a conforming mortgage, was pur20 chased by an enterprise; and 

21 ‘‘(B) such other matters as the Director 

22 determines to be appropriate. 

23 ‘‘(3) PUBLIC AVAILABILITY.—The Director 

24 shall make any data collected by the Director in con25 nection with the conduct of a monthly survey avail-
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1 able to the public in a timely manner, provided that 

2 the Director may modify the data released to the 

3 public to ensure that the data is not released in an 

4 identifiable form. 

5 ‘‘(4) DEFINITION.—For purposes of this sub6 section, the term ‘identifiable form’ means any rep7 resentation of information that permits the identity 

8 of a borrower to which the information relates to be 

9 reasonably inferred by either direct or indirect 

10 means.’’. 

11 (b) STANDARDS FOR SUBPRIME LOANS.—The Direc12 tor shall, not later than one year after the effective date 

13 under section 185, by regulations issued under section 

14 1316G of the Housing and Community Development Act 

15 of 1992, establish standards by which mortgages pur16 chased and mortgages purchased and securitized shall be 

17 characterized as subprime for the purpose of, and only for 

18 the purpose of, complying with the reporting requirement 

19 under section 1324(b)(9) of such Act. 

20 SEC. 135. ANNUAL REPORTS BY REGULATED ENTITIES ON 

21 AFFORDABLE HOUSING STOCK. 

22 The Housing and Community Development Act of 

23 1992 is amended by inserting after section 1328 (12 

24 U.S.C. 4548) the following new section: 
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1 ‘‘SEC. 1329. ANNUAL REPORTS ON AFFORDABLE HOUSING 

2 STOCK. 

3 ‘‘(a) IN GENERAL.—To obtain information helpful in 

4 applying the formula under section 1337(c)(2) for the af5 fordable housing program under such section and for 

6 other appropriate uses, the regulated entities shall con7 duct, or provide for the conducting of, a study on an an8 nual basis to determine the levels of affordable housing 

9 inventory, and the changes in such levels, in communities 

10 throughout the United States. 

11 ‘‘(b) CONTENTS.—The annual study under this sec12 tion shall determine, for the United States, each State, 

13 and each community within each State—

14 ‘‘(1) the level of affordable housing inventory, 

15 including affordable rental dwelling units and afford16 able homeownership dwelling units; 

17 ‘‘(2) any changes to the level of such inventory 

18 during the 12-month period of the study under this 

19 section, including—

20 ‘‘(A) any additions to such inventory, 

21 disaggregated by the category of such additions 

22 (including new construction or housing conver23 sion); 

24 ‘‘(B) any subtractions from such inventory, 

25 disaggregated by the category of such subtrac-
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1 tions (including abandonment, demolition, or 

2 upgrade to market-rate housing); 

3 ‘‘(C) the number of new affordable dwell4 ing units placed in service; and 

5 ‘‘(D) the number of affordable housing 

6 dwelling units withdrawn from service; 

7 ‘‘(3) the types of financing used to build any 

8 dwelling units added to such inventory level and the 

9 period during which such units are required to re10 main affordable; 

11 ‘‘(4) any excess demand for affordable housing, 

12 including the number of households on rental hous13 ing waiting lists and the tenure of the wait on such 

14 lists; and 

15 ‘‘(5) such other information as the Director 

16 may require. 

17 ‘‘(c) REPORT.—For each annual study conducted 

18 pursuant to this section, the regulated entities shall sub19 mit to the Congress, and make publicly available, a report 

20 setting forth the findings of the study. 

21 ‘‘(d) REGULATIONS AND TIMING.—The Director 

22 shall, by regulation, establish requirements for the studies 

23 and reports under this section, including deadlines for the 

24 submission of such annual reports and standards for de25 termining affordable housing.’’. 
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1 SEC. 136. MORTGAGOR IDENTIFICATION REQUIREMENTS 

2 FOR MORTGAGES OF REGULATED ENTITIES. 

3 (a) IN GENERAL.—Subpart A of part 2 of subtitle 

4 A of title XIII of the Housing and Community Develop5 ment Act of 1992 (12 U.S.C. 4541 et seq.), as amended 

6 by the preceding provisions of this Act, is further amended 

7 by adding at the end the following new section: 

8 ‘‘SEC. 1330. MORTGAGOR IDENTIFICATION REQUIREMENTS 

9 FOR MORTGAGES OF REGULATED ENTITIES. 

10 ‘‘(a) LIMITATION.—The Director shall by regulation 

11 establish standards, and shall enforce compliance with 

12 such standards, that—

13 ‘‘(1) prohibit the enterprises from the purchase, 

14 service, holding, selling, lending on the security of, 

15 or otherwise dealing with any mortgage on a one- to 

16 four-family residence that will be used as the prin17 cipal residence of the mortgagor that does not meet 

18 the requirements under subsection (b); and 

19 ‘‘(2) prohibit the Federal home loan banks from 

20 providing any advances to a member for use in fi21 nancing, and from accepting as collateral for any ad22 vance to a member, any mortgage on a one- to four23 family residence that will be used as the principal 

24 residence of the mortgagor that does not meet the 

25 requirements under subsection (b). 
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1 ‘‘(b) IDENTIFICATION REQUIREMENTS.—The re2 quirements under this subsection with respect to a mort3 gage are that the mortgagor have, at the time of settle4 ment on the mortgage, a Social Security account num5 ber.’’. 

6 (b) FANNIE MAE.—Section 304 of the Federal Na7 tional Mortgage Association Charter Act (12 U.S.C. 1719) 

8 is amended by adding at the end the following new sub9 section: 

10 ‘‘(g) PROHIBITION REGARDING MORTGAGOR IDENTI11 FICATION REQUIREMENT.—Nothing in this Act may be 

12 construed to authorize the corporation to purchase, serv13 ice, hold, sell, lend on the security of, or otherwise deal 

14 with any mortgage that the corporation is prohibited from 

15 so dealing with under the standards issued under section 

16 1330 of the Housing and Community Development Act 

17 of 1992 by the Director of the Federal Housing Finance 

18 Agency.’’. 

19 (c) FREDDIE MAC.—Section 305 of the Federal 

20 Home Loan Mortgage Corporation Act (12 U.S.C. 1454) 

21 is amended by adding at the end the following new sub22 section: 

23 ‘‘(d) PROHIBITION REGARDING MORTGAGOR IDENTI24 FICATION REQUIREMENTS.—Nothing in this Act may be 

25 construed to authorize the Corporation to purchase, serv-
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1 ice, hold, sell, lend on the security of, or otherwise deal 

2 with any mortgage that the Corporation is prohibited from 

3 so dealing with under the standards issued under section 

4 1330 of the Housing and Community Development Act 

5 of 1992 by the Director of the Federal Housing Finance 

6 Agency.’’. 

7 (d) FEDERAL HOME LOAN BANKS.—Section 10(a) of 

8 the Federal Home Loan Bank Act (12 U.S.C. 1430(a)) 

9 is amended—

10 (1) by redesignating paragraph (6) as para11 graph (7); and 

12 (2) by inserting after paragraph (5) the fol13 lowing new paragraph: 

14 ‘‘(6) PROHIBITION REGARDING MORTGAGOR

15 IDENTIFICATION REQUIREMENTS.—Nothing in this 

16 Act may be construed to authorize a Federal Home 

17 Loan Bank to provide any advance to a member for 

18 use in financing, or accept as collateral for an ad19 vance under this section, any mortgage that a Bank 

20 is prohibited from so accepting under the standards 

21 issued under section 1330 of the Housing and Com22 munity Development Act of 1992 by the Director of 

23 the Federal Housing Finance Agency.’’. 
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1 SEC. 137. REVISION OF HOUSING GOALS. 

2 (a) HOUSING GOALS.—The Housing and Community 

3 Development Act of 1992 is amended by striking sections 

4 1331 through 1334 (12 U.S.C. 4561–4) and inserting the 

5 following new sections: 

6 ‘‘SEC. 1331. ESTABLISHMENT OF HOUSING GOALS. 

7 ‘‘(a) IN GENERAL.—The Director shall establish, ef8 fective for the first year that begins after the effective date 

9 under section 185 of the Federal Housing Finance Reform 

10 Act of 2007 and each year thereafter, annual housing 

11 goals, with respect to the mortgage purchases by the en12 terprises, as follows: 

13 ‘‘(1) SINGLE FAMILY HOUSING GOALS.—Three 

14 single-family housing goals under section 1332. 

15 ‘‘(2) MULTIFAMILY SPECIAL AFFORDABLE

16 HOUSING GOALS.—A multifamily special affordable 

17 housing goal under section 1333. 

18 ‘‘(b) ELIMINATING INTEREST RATE DISPARITIES.—

19 ‘‘(1) IN GENERAL.—Upon request by the Direc20 tor, an enterprise shall provide to the Director, in a 

21 form determined by the Director, data the Director 

22 may review to determine whether there exist dispari23 ties in interest rates charged on mortgages to bor24 rowers who are minorities as compared with com25 parable mortgages to borrowers of similar credit26 worthiness who are not minorities. 
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1 ‘‘(2) REMEDIAL ACTIONS UPON PRELIMINARY

2 FINDING.—Upon a preliminary finding by the Direc3 tor that a pattern of disparities in interest rates 

4 with respect to any lender or lenders exists pursuant 

5 to the data provided by an enterprise in paragraph 

6 (1), the Director shall—

7 ‘‘(A) refer the preliminary finding to the 

8 appropriate regulatory or enforcement agency 

9 for further review; 

10 ‘‘(B) require the enterprise to submit addi11 tional data with respect to any lender or lend12 ers, as appropriate and to the extent prac13 ticable, to the Director who shall submit any 

14 such additional data to the regulatory or en15 forcement agency for appropriate action; and 

16 ‘‘(C) require the enterprise to undertake 

17 remedial actions, as appropriate, pursuant to 

18 section 1325(5) (12 U.S.C. 4545(5)). 

19 ‘‘(3) ANNUAL REPORT TO CONGRESS.—The Di20 rector shall submit to the Committee on Financial 

21 Services of the House of Representatives and the 

22 Committee on Banking, Housing, and Urban Affairs 

23 of the Senate a report describing the actions taken, 

24 and being taken, by the Director to carry out this 

25 subsection. No such report shall identify any lender 
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1 or lenders who have not been found to have engaged 

2 in discriminatory lending practices pursuant to a 

3 final adjudication on the record, and after oppor4 tunity for an administrative hearing, in accordance 

5 with subchapter II of chapter 5 of title 5, United 

6 States Code. 

7 ‘‘(4) PROTECTION OF IDENTITY OF INDIVID8 UALS.—In carrying out this subsection, the Director 

9 shall ensure that no property-related or financial in10 formation that would enable a borrower to be identi11 fied shall be made public. 

12 ‘‘(c) TIMING.—The Director shall establish an annual 

13 deadline by which the Director shall establish the annual 

14 housing goals under this subpart for each year, taking into 

15 consideration the need for the enterprises to reasonably 

16 and sufficiently plan their operations and activities in ad17 vance, including operations and activities necessary to 

18 meet such annual goals. 

19 ‘‘SEC. 1332. SINGLE-FAMILY HOUSING GOALS. 

20 ‘‘(a) IN GENERAL.—The Director shall establish an21 nual goals for the purchase by each enterprise of conven22 tional, conforming, single-family, purchase money mort23 gages financing owner-occupied and rental housing for 

24 each of the following categories of families: 

25 ‘‘(1) Low-income families. 
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1 ‘‘(2) Families that reside in low-income areas. 

2 ‘‘(3) Very low-income families. 

3 ‘‘(b) REFINANCE SUBGOAL.—

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

5 a separate subgoal within each goal under subsection 

6 (a)(1) for the purchase by each enterprise of mort7 gages for low-income families on single family hous8 ing given to pay off or prepay an existing loan se9 cured by the same property. The Director shall, for 

10 each year, determine whether each enterprise has 

11 complied with the subgoal under this subsection in 

12 the same manner provided under this section for de13 termining compliance with the housing goals. 

14 ‘‘(2) ENFORCEMENT.—For purposes of section 

15 1336, the subgoal established under paragraph (1) 

16 of this subsection shall be considered to be a housing 

17 goal established under this section. Such subgoal 

18 shall not be enforceable under any other provision of 

19 this title (including subpart C of this part) other 

20 than section 1336 or under any provision of the 

21 Federal National Mortgage Association Charter Act 

22 or the Federal Home Loan Mortgage Corporation 

23 Act. 

24 ‘‘(c) DETERMINATION OF COMPLIANCE.—The Direc25 tor shall determine, for each year that the housing goals 
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1 under this section are in effect pursuant to section 

2 1331(a), whether each enterprise has complied with the 

3 single-family housing goals established under this section 

4 for such year. An enterprise shall be considered to be in 

5 compliance with such a goal for a year only if, for each 

6 of the types of families described in subsection (a), the 

7 percentage of the number of conventional, conforming, 

8 single-family, owner-occupied or rental, as applicable, pur9 chase money mortgages purchased by each enterprise in 

10 such year that serve such families, meets or exceeds the 

11 target for the year for such type of family that is estab12 lished under subsection (d). 

13 ‘‘(d) ANNUAL TARGETS.—

14 ‘‘(1) IN GENERAL.—Except as provided in para15 graph (2), for each of the types of families described 

16 in subsection (a), the target under this subsection 

17 for a year shall be the average percentage, for the 

18 three years that most recently precede such year and 

19 for which information under the Home Mortgage 

20 Disclosure Act of 1975 is publicly available, of the 

21 number of conventional, conforming, single-family, 

22 owner-occupied or rental, as applicable, purchase 

23 money mortgages originated in such year that serves 

24 such type of family, as determined by the Director 
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1 using the information obtained and determined pur2 suant to paragraphs (3) and (4). 

3 ‘‘(2) AUTHORITY TO INCREASE TARGETS.—

4 ‘‘(A) IN GENERAL.—The Director may, for 

5 any year, establish by regulation, for any or all 

6 of the types of families described in subsection 

7 (a), percentage targets that are higher than the 

8 percentages for such year determined pursuant 

9 to paragraph (1), to reflect expected changes in 

10 market performance related to such information 

11 under the Home Mortgage Disclosure Act of 

12 1975. 

13 ‘‘(B) FACTORS.—In establishing any tar14 gets pursuant to subparagraph (A), the Direc15 tor shall consider the following factors: 

16 ‘‘(i) National housing needs. 

17 ‘‘(ii) Economic, housing, and demo18 graphic conditions. 

19 ‘‘(iii) The performance and effort of 

20 the enterprises toward achieving the hous21 ing goals under this section in previous 

22 years. 

23 ‘‘(iv) The size of the conventional 

24 mortgage market serving each of the types 

25 of families described in subsection (a) rel-
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1 ative to the size of the overall conventional 

2 mortgage market. 

3 ‘‘(v) The ability of the enterprise to 

4 lead the industry in making mortgage 

5 credit available. 

6 ‘‘(vi) The need to maintain the sound 

7 financial condition of the enterprises. 

8 ‘‘(3) HMDA INFORMATION.—The Director 

9 shall annually obtain information submitted in com10 pliance with the Home Mortgage Disclosure Act of 

11 1975 regarding conventional, conforming, single12 family, owner-occupied or rental, as applicable, pur13 chase money mortgages originated and purchased 

14 for the previous year. 

15 ‘‘(4) CONFORMING MORTGAGES.—In deter16 mining whether a mortgage is a conforming mort17 gage for purposes of this paragraph, the Director 

18 shall consider the original principal balance of the 

19 mortgage loan to be the principal balance as re20 ported in the information referred to in paragraph 

21 (3), as rounded to the nearest thousand dollars. 

22 ‘‘(e) NOTICE OF DETERMINATION AND ENTERPRISE

23 COMMENT.—

24 ‘‘(1) NOTICE.—Within 30 days of making a de25 termination under subsection (c) regarding a compli-
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1 ance of an enterprise for a year with a housing goal 

2 established under this section and before any public 

3 disclosure thereof, the Director shall provide notice 

4 of the determination to the enterprise, which shall 

5 include an analysis and comparison, by the Director, 

6 of the performance of the enterprise for the year and 

7 the targets for the year under subsection (d). 

8 ‘‘(2) COMMENT PERIOD.—The Director shall 

9 provide each enterprise an opportunity to comment 

10 on the determination during the 30-day period be11 ginning upon receipt by the enterprise of the notice. 

12 ‘‘(f) USE OF BORROWER INCOME.—In monitoring 

13 the performance of each enterprise pursuant to the hous14 ing goals under this section and evaluating such perform15 ance (for purposes of section 1336), the Director shall 

16 consider a mortgagor’s income to be such income at the 

17 time of origination of the mortgage. 

18 ‘‘(g) CONSIDERATION OF UNITS IN SINGLE-FAMILY

19 RENTAL HOUSING.—In establishing any goal under this 

20 subpart, the Director may take into consideration the 

21 number of housing units financed by any mortgage on sin22 gle-family rental housing purchased by an enterprise. 

23 ‘‘SEC. 1333. MULTIFAMILY SPECIAL AFFORDABLE HOUSING 

24 GOAL. 

25 ‘‘(a) ESTABLISHMENT.—
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1 ‘‘(1) IN GENERAL.—The Director shall estab2 lish, by regulation, an annual goal for the purchase 

3 by each enterprise of each of the following types of 

4 mortgages on multifamily housing: 

5 ‘‘(A) Mortgages that finance dwelling units 

6 for low-income families. 

7 ‘‘(B) Mortgages that finance dwelling units 

8 for very low-income families. 

9 ‘‘(C) Mortgages that finance dwelling units 

10 assisted by the low-income housing tax credit 

11 under section 42 of the Internal Revenue Code 

12 of 1986. 

13 ‘‘(2) ADDITIONAL REQUIREMENTS FOR SMALL14 ER PROJECTS.—The Director shall establish, within 

15 the goal under this section, additional requirements 

16 for the purchase by each enterprise of mortgages de17 scribed in paragraph (1) for multifamily housing 

18 projects of a smaller or limited size, which may be 

19 based on the number of dwelling units in the project 

20 or the amount of the mortgage, or both, and shall 

21 include multifamily housing projects of such smaller 

22 sizes as are typical among such projects that serve 

23 rural areas. 

24 ‘‘(3) FACTORS.—In establishing the goal under 

25 this section relating to mortgages on multifamily 
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1 housing for an enterprise for a year, the Director 

2 shall consider—

3 ‘‘(A) national multifamily mortgage credit 

4 needs; 

5 ‘‘(B) the performance and effort of the en6 terprise in making mortgage credit available for 

7 multifamily housing in previous years; 

8 ‘‘(C) the size of the multifamily mortgage 

9 market; 

10 ‘‘(D) the ability of the enterprise to lead 

11 the industry in making mortgage credit avail12 able, especially for underserved markets, such 

13 as for small multifamily projects of 5 to 50 

14 units, multifamily properties in need of rehabili15 tation, and multifamily properties located in 

16 rural areas; and 

17 ‘‘(E) the need to maintain the sound finan18 cial condition of the enterprise. 

19 ‘‘(b) UNITS FINANCED BY HOUSING FINANCE AGEN20 CY BONDS.—The Director shall give credit toward the 

21 achievement of the multifamily special affordable housing 

22 goal under this section (for purposes of section 1336) to 

23 dwelling units in multifamily housing that otherwise quali24 fies under such goal and that is financed by tax-exempt 
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1 or taxable bonds issued by a State or local housing finance 

2 agency, but only if such bonds—

3 ‘‘(1) are secured by a guarantee of the enter4 prise; or 

5 ‘‘(2) are not investment grade and are pur6 chased by the enterprise. 

7 ‘‘(c) USE OF TENANT INCOME OR RENT.—The Di8 rector shall monitor the performance of each enterprise 

9 in meeting the goals established under this section and 

10 shall evaluate such performance (for purposes of section 

11 1336) based on—

12 ‘‘(1) the income of the prospective or actual 

13 tenants of the property, where such data are avail14 able; or 

15 ‘‘(2) where the data referred to in paragraph 

16 (1) are not available, rent levels affordable to low17 income and very low-income families. 

18 A rent level shall be considered to be affordable for pur19 poses of this subsection for an income category referred 

20 to in this subsection if it does not exceed 30 percent of 

21 the maximum income level of such income category, with 

22 appropriate adjustments for unit size as measured by the 

23 number of bedrooms. 

24 ‘‘(d) DETERMINATION OF COMPLIANCE.—The Direc25 tor shall, for each year that the housing goal under this 
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1 section is in effect pursuant to section 1331(a), determine 

2 whether each enterprise has complied with such goal and 

3 the additional requirements under subsection (a)(2). 

4 ‘‘SEC. 1334. DISCRETIONARY ADJUSTMENT OF HOUSING 

5 GOALS. 

6 ‘‘(a) AUTHORITY.—An enterprise may petition the 

7 Director in writing at any time during a year to reduce 

8 the level of any goal for such year established pursuant 

9 to this subpart. 

10 ‘‘(b) STANDARD FOR REDUCTION.—The Director 

11 may reduce the level for a goal pursuant to such a petition 

12 only if—

13 ‘‘(1) market and economic conditions or the fi14 nancial condition of the enterprise require such ac15 tion; or 

16 ‘‘(2) efforts to meet the goal would result in the 

17 constraint of liquidity, over-investment in certain 

18 market segments, or other consequences contrary to 

19 the intent of this subpart, or section 301(3) of the 

20 Federal National Mortgage Association Charter Act 

21 (12 U.S.C. 1716(3)) or section 301(3) of the Fed22 eral Home Loan Mortgage Corporation Act (12 

23 U.S.C. 1451 note), as applicable. 

24 ‘‘(c) DETERMINATION.—The Director shall make a 

25 determination regarding any proposed reduction within 30 
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1 days of receipt of the petition regarding the reduction. The 

2 Director may extend such period for a single additional 

3 15-day period, but only if the Director requests additional 

4 information from the enterprise. A denial by the Director 

5 to reduce the level of any goal under this section may be 

6 appealed to the United States District Court for the Dis7 trict of Columbia or the United States district court in 

8 the jurisdiction in which the headquarters of an enterprise 

9 is located.’’. 

10 (b) CONFORMING AMENDMENTS.—The Housing and 

11 Community Development Act of 1992 is amended—

12 (1) in section 1335(a) (12 U.S.C. 4565(a)), in 

13 the matter preceding paragraph (1), by striking 

14 ‘‘low- and moderate-income housing goal’’ and all 

15 that follows through ‘‘section 1334’’ and inserting 

16 ‘‘housing goals established under this subpart’’; and 

17 (2) in section 1336(a)(1) (12 U.S.C. 

18 4566(a)(1)), by striking ‘‘sections 1332, 1333, and 

19 1334,’’ and inserting ‘‘this subpart’’. 

20 (c) DEFINITIONS.—Section 1303 of the Housing and 

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

22 as amended by the preceding provisions of this Act, is fur23 ther amended—
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1 (1) in paragraph (22) (relating to the definition 

2 of ‘‘very low-income’’), by striking ‘‘60 percent’’ each 

3 place such term appears and inserting ‘‘50 percent’’; 

4 (2) by redesignating paragraphs (19) through 

5 (22) as paragraphs (23) through (26), respectively; 

6 (3) by inserting after paragraph (18) the fol7 lowing new paragraph: 

8 ‘‘(22) RURAL AREA.—The term ‘rural area’ has 

9 the meaning given such term in section 520 of the 

10 Housing Act of 1949 (42 U.S.C. 1490), except that 

11 such term includes micropolitan areas and tribal 

12 trust lands.’’. 

13 (4) by redesignating paragraphs (13) through 

14 (18) as paragraphs (16) through (21), respectively; 

15 (5) by inserting after paragraph (12) the fol16 lowing new paragraph: 

17 ‘‘(15) LOW-INCOME AREA.—The term ‘low in18 come area’ means a census tract or block numbering 

19 area in which the median income does not exceed 80 

20 percent of the median income for the area in which 

21 such census tract or block numbering area is lo22 cated, and, for the purposes of section 1332(a)(2), 

23 shall include families having incomes not greater 

24 than 100 percent of the area median income who re25 side in minority census tracts.’’; 
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1 (6) by redesignating paragraphs (11) and (12) 

2 as paragraphs (13) and (14), respectively; 

3 (7) by inserting after paragraph (10) the fol4 lowing new paragraph: 

5 ‘‘(12) EXTREMELY LOW-INCOME.—The term 

6 ‘extremely low-income’ means—

7 ‘‘(A) in the case of owner-occupied units, 

8 income not in excess of 30 percent of the area 

9 median income; and 

10 ‘‘(B) in the case of rental units, income 

11 not in excess of 30 percent of the area median 

12 income, with adjustments for smaller and larger 

13 families, as determined by the Secretary.’’; 

14 (8) by redesignating paragraphs (7) through 

15 (10) as paragraphs (8) through (11), respectively; 

16 and 

17 (9) by inserting after paragraph (6) the fol18 lowing new paragraph: 

19 ‘‘(7) CONFORMING MORTGAGE.—The term ‘con20 forming mortgage’ means, with respect to an enter21 prise, a conventional mortgage having an original 

22 principal obligation that does not exceed the dollar 

23 limitation, in effect at the time of such origination, 

24 under, as applicable—
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1 ‘‘(A) section 302(b)(2) of the Federal Na2 tional Mortgage Association Charter Act; or 

3 ‘‘(B) section 305(a)(2) of the Federal 

4 Home Loan Mortgage Corporation Act.’’. 

5 SEC. 138. DUTY TO SERVE UNDERSERVED MARKETS. 

6 (a) ESTABLISHMENT AND EVALUATION OF PER7 FORMANCE.—Section 1335 of the Housing and Commu8 nity Development Act of 1992 (12 U.S.C. 4565) is amend9 ed—

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

11 TO SERVE UNDERSERVED MARKETS AND’’ be12 fore ‘‘OTHER’’; 

13 (2) by striking subsection (b); 

14 (3) in subsection (a)—

15 (A) in the matter preceding paragraph (1), 

16 by inserting ‘‘and to carry out the duty under 

17 subsection (a) of this section’’ before ‘‘, each 

18 enterprise shall’’; 

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

20 after the semicolon at the end; 

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

22 and inserting a period; 

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

24 (E) by redesignating such subsection as 

25 subsection (b); 
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1 (4) by inserting before subsection (b) (as so re2 designated by paragraph (3)(E) of this subsection) 

3 the following new subsection: 

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

5 ‘‘(1) DUTY.—In accordance with the purpose of 

6 the enterprises under section 301(3) of the Federal 

7 National Mortgage Association Charter Act (12 

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

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

10 1451 note) to undertake activities relating to mort11 gages on housing for very low-, low-, and moderate12 income families involving a reasonable economic re13 turn that may be less than the return earned on 

14 other activities, each enterprise shall have the duty 

15 to increase the liquidity of mortgage investments 

16 and improve the distribution of investment capital 

17 available for mortgage financing for underserved 

18 markets. 

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

20 duty under paragraph (1), each enterprise shall com21 ply with the following requirements with respect to 

22 the following underserved markets: 

23 ‘‘(A) MANUFACTURED HOUSING.—The en24 terprise shall lead the industry in developing 

25 loan products and flexible underwriting guide-
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1 lines to facilitate a secondary market for mort2 gages on manufactured homes for very low-, 

3 low-, and moderate-income families. 

4 ‘‘(B) AFFORDABLE HOUSING PRESERVA5 TION.—The enterprise shall lead the industry in 

6 developing loan products and flexible under7 writing guidelines to facilitate a secondary mar8 ket to preserve housing affordable to very low9 , low-, and moderate-income families, including 

10 housing projects subsidized under—

11 ‘‘(i) the project-based and tenant12 based rental assistance programs under 

13 section 8 of the United States Housing Act 

14 of 1937; 

15 ‘‘(ii) the program under section 236 

16 of the National Housing Act; 

17 ‘‘(iii) the below-market interest rate 

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

19 of the National Housing Act; 

20 ‘‘(iv) the supportive housing for the 

21 elderly program under section 202 of the 

22 Housing Act of 1959; 

23 ‘‘(v) the supportive housing program 

24 for persons with disabilities under section 
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1 811 of the Cranston-Gonzalez National Af2 fordable Housing Act; 

3 ‘‘(vi) the programs under title IV of 

4 the McKinney-Vento Homeless Assistance 

5 Act (42 U.S.C. 11361 et seq.), but only 

6 permanent supportive housing projects 

7 subsidized under such programs; and 

8 ‘‘(vii) the rural rental housing pro9 gram under section 515 of the Housing 

10 Act of 1949. 

11 ‘‘(C) RURAL AND OTHER UNDERSERVED

12 MARKETS.—The enterprise shall lead the indus13 try in developing loan products and flexible un14 derwriting guidelines to facilitate a secondary 

15 market for mortgages on housing for very low16 , low-, and moderate-income families in rural 

17 areas, and for mortgages for housing for any 

18 other underserved market for very low-, low-, 

19 and moderate-income families that the Sec20 retary identifies as lacking adequate credit 

21 through conventional lending sources. Such un22 derserved markets may be identified by bor23 rower type, market segment, or geographic 

24 area.’’; and 
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1 (5) by adding at the end the following new sub2 section: 

3 ‘‘(c) EVALUATION AND REPORTING OF COMPLI4 ANCE.—

5 ‘‘(1) IN GENERAL.—Not later than 6 months 

6 after the effective date under section 185 of the 

7 Federal Housing Finance Reform Act of 2007, the 

8 Director shall establish a manner for evaluating 

9 whether, and the extent to which, the enterprises 

10 have complied with the duty under subsection (a) to 

11 serve underserved markets and for rating the extent 

12 of such compliance. Using such method, the Director 

13 shall, for each year, evaluate such compliance and 

14 rate the performance of each enterprise as to extent 

15 of compliance. The Director shall include such eval16 uation and rating for each enterprise for a year in 

17 the report for that year submitted pursuant to sec18 tion 1319B(a). 

19 ‘‘(2) SEPARATE EVALUATIONS.—In determining 

20 whether an enterprise has complied with the duty re21 ferred to in paragraph (1), the Director shall sepa22 rately evaluate whether the enterprise has complied 

23 with such duty with respect to each of the under24 served markets identified in subsection (a), taking 

25 into consideration—
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1 ‘‘(A) the development of loan products and 

2 more flexible underwriting guidelines; 

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

4 loan sellers in each of such underserved mar5 kets; and 

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

7 of such underserved markets. 

8 ‘‘(3) MANUFACTURED HOUSING MARKET.—In 

9 determining whether an enterprise has complied with 

10 the duty under subparagraph (A) of subsection 

11 (a)(2), the Director may consider loans secured by 

12 both real and personal property.’’. 

13 (b) ENFORCEMENT.—Subsection (a) of section 1336 

14 of the Housing and Community Development Act of 1992 

15 (12 U.S.C. 4566(a)) is amended—

16 (1) in paragraph (1), by inserting ‘‘and with 

17 the duty under section 1335(a) of each enterprise 

18 with respect to underserved markets,’’ before ‘‘as 

19 provided in this section’’; and 

20 (2) by adding at the end of such subsection, as 

21 amended by the preceding provisions of this title, the 

22 following new paragraph: 

23 ‘‘(4) ENFORCEMENT OF DUTY TO PROVIDE

24 MORTGAGE CREDIT TO UNDERSERVED MARKETS.—

25 The duty under section 1335(a) of each enterprise 
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1 to serve underserved markets (as determined in ac2 cordance with section 1335(c)) shall be enforceable 

3 under this section to the same extent and under the 

4 same provisions that the housing goals established 

5 under this subpart are enforceable. Such duty shall 

6 not be enforceable under any other provision of this 

7 title (including subpart C of this part) other than 

8 this section or under any provision of the Federal 

9 National Mortgage Association Charter Act or the 

10 Federal Home Loan Mortgage Corporation Act.’’. 

11 SEC. 139. MONITORING AND ENFORCING COMPLIANCE 

12 WITH HOUSING GOALS. 

13 (a) ADDITIONAL CREDIT FOR CERTAIN MORT14 GAGES.—Section 1336(a) of the Housing and Community 

15 Development Act of 1992 (12 U.S.C. 4566(a)) is amend16 ed—

17 (1) in paragraph (2), by inserting ‘‘, except as 

18 provided in paragraph (4),’’ after ‘‘which’’; and 

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

20 paragraph: 

21 ‘‘(5) ADDITIONAL CREDIT.—The Director shall 

22 assign more than 125 percent credit toward achieve23 ment, under this section, of the housing goals for 

24 mortgage purchase activities of the enterprises that 
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1 comply with the requirements of such goals and sup2 port—

3 ‘‘(A) housing that meets energy efficiency 

4 or other environmental standards that are es5 tablished by a Federal, State, or local govern6 mental authority with respect to the geographic 

7 area where the housing is located or are other8 wise widely recognized; or 

9 ‘‘(B) housing that includes a licensed 

10 childcare center. 

11 The availability of additional credit under this para12 graph shall not be used to increase any housing 

13 goal, subgoal, or target established under this sub14 part.’’. 

15 (b) MONITORING AND ENFORCEMENT.—Section 

16 1336 of the Housing and Community Development Act 

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

18 (1) in subsection (b)—

19 (A) in the subsection heading, by inserting 

20 ‘‘PRELIMINARY’’ before ‘‘DETERMINATION’’; 

21 (B) by striking paragraph (1) and insert22 ing the following new paragraph: 

23 ‘‘(1) NOTICE.—If the Director preliminarily de24 termines that an enterprise has failed, or that there 

25 is a substantial probability that an enterprise will 
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1 fail, to meet any housing goal established under this 

2 subpart, the Director shall provide written notice to 

3 the enterprise of such a preliminary determination, 

4 the reasons for such determination, and the informa5 tion on which the Director based the determina6 tion.’’; 

7 (C) in paragraph (2)—

8 (i) in subparagraph (A), by inserting 

9 ‘‘finally’’ before ‘‘determining’’; 

10 (ii) by striking subparagraphs (B) and 

11 (C) and inserting the following new sub12 paragraph: 

13 ‘‘(B) EXTENSION OR SHORTENING OF PE14 RIOD.—The Director may—

15 ‘‘(i) extend the period under subpara16 graph (A) for good cause for not more 

17 than 30 additional days; and 

18 ‘‘(ii) shorten the period under sub19 paragraph (A) for good cause.’’; and 

20 (iii) by redesignating subparagraph 

21 (D) as subparagraph (C); and 

22 (D) in paragraph (3)—

23 (i) in subparagraph (A), by striking 

24 ‘‘determine’’ and inserting ‘‘issue a final 

25 determination of’’; 
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1 (ii) in subparagraph (B), by inserting 

2 ‘‘final’’ before ‘‘determinations’’; and 

3 (iii) in subparagraph (C)—

4 (I) by striking ‘‘Committee on 

5 Banking, Finance and Urban Affairs’’ 

6 and inserting ‘‘Committee on Finan7 cial Services’’; and 

8 (II) by inserting ‘‘final’’ before 

9 ‘‘determination’’ each place such term 

10 appears; and 

11 (2) in subsection (c)—

12 (A) by striking the subsection designation 

13 and heading and all that follows through the 

14 end of paragraph (1) and inserting the fol15 lowing: 

16 ‘‘(c) CEASE AND DESIST ORDERS, CIVIL MONEY

17 PENALTIES, AND REMEDIES INCLUDING HOUSING

18 PLANS.—

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

20 pursuant to subsection (b), that there is a substan21 tial probability that an enterprise will fail, or has ac22 tually failed, to meet any housing goal under this 

23 subpart and that the achievement of the housing 

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

25 the enterprise submit a housing plan under this sub-
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1 section. If the Director makes such a finding and 

2 the enterprise refuses to submit such a plan, sub3 mits an unacceptable plan, fails to comply with the 

4 plan or the Director finds that the enterprise has 

5 failed to meet any housing goal under this subpart, 

6 in addition to requiring an enterprise to submit a 

7 housing plan, the Director may issue a cease and de8 sist order in accordance with section 1341, impose 

9 civil money penalties in accordance with section 

10 1345, or order other remedies as set forth in para11 graph (7) of this subsection.’’; 

12 (B) in paragraph (2)—

13 (i) by striking ‘‘CONTENTS.—Each 

14 housing plan’’ and inserting ‘‘HOUSING

15 PLAN.—If the Director requires a housing 

16 plan under this section, such a plan’’; and 

17 (ii) in subparagraph (B), by inserting 

18 ‘‘and changes in its operations’’ after ‘‘im19 provements’’; 

20 (C) in paragraph (3)—

21 (i) by inserting ‘‘comply with any re22 medial action or’’ before ‘‘submit a housing 

23 plan’’; and 

24 (ii) by striking ‘‘under subsection 

25 (b)(3) that a housing plan is required’’; 
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1 (D) in paragraph (4), by striking the first 

2 two sentences and inserting the following: ‘‘The 

3 Director shall review each submission by an en4 terprise, including a housing plan submitted 

5 under this subsection, and not later than 30 

6 days after submission, approve or disapprove 

7 the plan or other action. The Director may ex8 tend the period for approval or disapproval for 

9 a single additional 30-day period if the Director 

10 determines such extension necessary.’’; and 

11 (E) by adding at the end the following new 

12 paragraph: 

13 ‘‘(7) ADDITIONAL REMEDIES FOR FAILURE TO

14 MEET GOALS.—In addition to ordering a housing 

15 plan under this section, issuing cease and desist or16 ders under section 1341, and ordering civil money 

17 penalties under section 1345, the Director may seek 

18 other actions when an enterprise fails to meet a 

19 goal, and exercise appropriate enforcement authority 

20 available to the Director under this Act to prohibit 

21 the enterprise from initially offering any product (as 

22 such term is defined in section 1321(f)) or engaging 

23 in any new activities, services, undertakings, and of24 ferings and to order the enterprise to suspend prod-
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1 ucts and activities, services, undertakings, and offer2 ings pending its achievement of the goal.’’. 

3 SEC. 140. AFFORDABLE HOUSING FUND. 

4 (a) IN GENERAL.—The Housing and Community De5 velopment Act of 1992 is amended by striking sections 

6 1337 and 1338 (12 U.S.C. 4562 note) and inserting the 

7 following new section: 

8 ‘‘SEC. 1337. AFFORDABLE HOUSING FUND. 

9 ‘‘(a) ESTABLISHMENT AND PURPOSE.—The Direc10 tor, in consultation with the Secretary of Housing and 

11 Urban Development, shall establish and manage an af12 fordable housing fund in accordance with this section, 

13 which shall be funded with amounts allocated by the enter14 prises under subsection (b). The purpose of the affordable 

15 housing fund shall be to provide formula grants to grant16 ees for use—

17 ‘‘(1) to increase homeownership for extremely 

18 low-and very low-income families; 

19 ‘‘(2) to increase investment in housing in low20 income areas, and areas designated as qualified cen21 sus tracts or an area of chronic economic distress 

22 pursuant to section 143(j) of the Internal Revenue 

23 Code of 1986 (26 U.S.C. 143(j)); 
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1 ‘‘(3) to increase and preserve the supply of 

2 rental and owner-occupied housing for extremely 

3 low- and very low-income families; 

4 ‘‘(4) to increase investment in public infrastruc5 ture development in connection with housing assisted 

6 under this section; and 

7 ‘‘(5) to leverage investments from other sources 

8 in affordable housing and in public infrastructure 

9 development in connection with housing assisted 

10 under this section. 

11 ‘‘(b) ALLOCATION OF AMOUNTS BY ENTERPRISES.—

12 ‘‘(1) IN GENERAL.—In accordance with regula13 tions issued by the Director under subsection (m) 

14 and subject to paragraph (2) of this subsection and 

15 subsection (i)(5), each enterprise shall allocate to the 

16 affordable housing fund established under subsection 

17 (a), in each of the years 2007 through 2011, an 

18 amount equal to 1.2 basis points for each dollar of 

19 the average total mortgage portfolio of the enter20 prise during the preceding year. 

21 ‘‘(2) SUSPENSION OF CONTRIBUTIONS.—The 

22 Director shall temporarily suspend the allocation 

23 under paragraph (1) by an enterprise to the afford24 able housing fund upon a finding by the Director 

25 that such allocations—
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1 ‘‘(A) are contributing, or would contribute, 

2 to the financial instability of the enterprise; 

3 ‘‘(B) are causing, or would cause, the en4 terprise to be classified as undercapitalized; or 

5 ‘‘(C) are preventing, or would prevent, the 

6 enterprise from successfully completing a cap7 ital restoration plan under section 1369C. 

8 ‘‘(3) 5-YEAR SUNSET AND REPORT.—

9 ‘‘(A) SUNSET.—The enterprises shall not 

10 be required to make allocations to the afford11 able housing fund in 2012 or in any year there12 after. 

13 ‘‘(B) REPORT ON PROGRAM CONTINU14 ANCE.—Not later than June 30, 2011, the Di15 rector shall submit to the Committee on Finan16 cial Services of the House of Representatives 

17 and the Committee on Banking, Housing, and 

18 Urban Affairs of the Senate a report making 

19 recommendations on whether the program 

20 under this section, including the requirement 

21 for the enterprises to make allocations to the 

22 affordable housing fund, should be extended 

23 and on any modifications for the program. 

24 ‘‘(4) PROHIBITION OF PASS-THROUGH OF COST

25 OF ALLOCATIONS.—The Director shall, by regula-
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1 tion, prohibit each enterprise from redirecting such 

2 costs, through increased charges or fees, or de3 creased premiums, or in any other manner, to the 

4 originators of mortgages purchased or securitized by 

5 the enterprise. 

6 ‘‘(c) AFFORDABLE HOUSING NEEDS FORMULAS.—

7 ‘‘(1) ALLOCATION FOR 2007.—

8 ‘‘(A) ALLOCATION PERCENTAGES FOR

9 LOUISIANA AND MISSISSIPPI.—For purposes of 

10 subsection (d)(1)(A), the allocation percentages 

11 for 2007 for the grantees under this section for 

12 such year shall be as follows: 

13 ‘‘(i) The allocation percentage for the 

14 Louisiana Housing Finance Agency shall 

15 be 75 percent. 

16 ‘‘(ii) The allocation percentage for the 

17 Mississippi Development Authority shall be 

18 25 percent. 

19 ‘‘(B) USE IN DISASTER AREAS.—Afford20 able housing grant amounts for 2007 shall be 

21 used only as provided in subsection (g) only for 

22 such eligible activities in areas that were sub23 ject to a declaration by the President of a 

24 major disaster or emergency under the Robert 

25 T. Stafford Disaster Relief and Emergency As-
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1 sistance Act (42 U.S.C. 5121 et seq.) in con2 nection with Hurricane Katrina or Rita of 

3 2005. 

4 ‘‘(2) ALLOCATION FORMULA FOR OTHER

5 YEARS.—The Secretary of Housing and Urban De6 velopment shall, by regulation, establish a formula to 

7 allocate, among the States (as such term is defined 

8 in section 1303) and federally recognized Indian 

9 tribes, the amounts provided by the enterprises in 

10 each year referred to subsection (b)(1), other than 

11 2007, to the affordable housing fund established 

12 under this section. The formula shall be based on 

13 the following factors, with respect to each State and 

14 tribe: 

15 ‘‘(A) The ratio of the population of the 

16 State or federally recognized Indian tribe to the 

17 aggregate population of all the States and 

18 tribes. 

19 ‘‘(B) The percentage of families in the 

20 State or federally recognized Indian tribe that 

21 pay more than 50 percent of their annual in22 come for housing costs. 

23 ‘‘(C) The percentage of persons in the 

24 State or federally recognized Indian tribe that 
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1 are members of extremely low- or very low-in2 come families. 

3 ‘‘(D) The cost of developing or carrying 

4 out rehabilitation of housing in the State or for 

5 the federally recognized Indian tribe. 

6 ‘‘(E) The percentage of families in the 

7 State or federally recognized Indian tribe that 

8 live in substandard housing. 

9 ‘‘(F) The percentage of housing stock in 

10 the State or for the federally recognized Indian 

11 tribe that is extremely old housing. 

12 ‘‘(G) Any other factors that the Secretary 

13 determines to be appropriate. 

14 ‘‘(3) FAILURE TO ESTABLISH.—If, in any year 

15 referred to in subsection (b)(1), other than 2007, 

16 the regulations establishing the formula required 

17 under paragraph (2) of this subsection have not 

18 been issued by the date that the Director determines 

19 the amounts described in subsection (d)(1) to be 

20 available for affordable housing fund grants in such 

21 year, for purposes of such year any amounts for a 

22 State (as such term is defined in section 1303 of 

23 this Act) that would otherwise be determined under 

24 subsection (d) by applying the formula established 

25 pursuant to paragraph (2) of this subsection shall be 
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1 determined instead by applying, for such State, the 

2 percentage that is equal to the percentage of the 

3 total amounts made available for such year for allo4 cation under subtitle A of title II of the Cranston5 Gonzalez National Affordable Housing Act (42 

6 U.S.C. 12741 et seq.) that are allocated in such 

7 year, pursuant to such subtitle, to such State (in8 cluding any insular area or unit of general local gov9 ernment, as such terms are defined in section 104 

10 of such Act (42 U.S.C. 12704), that is treated as a 

11 State under section 1303 of this Act) and to partici12 pating jurisdictions and other eligible entities within 

13 such State. 

14 ‘‘(d) ALLOCATION OF FORMULA AMOUNT; 

15 GRANTS.—

16 ‘‘(1) FORMULA AMOUNT.—For each year re17 ferred to in subsection (b)(1), the Director shall de18 termine the formula amount under this section for 

19 each grantee, which shall be the amount determined 

20 for such grantee—

21 ‘‘(A) for 2007, by applying the allocation 

22 percentages under subparagraph (A) of sub23 section (c)(1) to the sum of the total amounts 

24 allocated by the enterprises to the affordable 
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1 housing fund for such year, less any amounts 

2 used pursuant to subsection (i)(1); and 

3 ‘‘(B) for any other year referred to in sub4 section (b)(1) (other than 2007), by applying 

5 the formula established pursuant to paragraph 

6 (2) of subsection (c) to the sum of the total 

7 amounts allocated by the enterprises to the af8 fordable housing fund for such year and any re9 captured amounts available pursuant to sub10 section (i)(4), less any amounts used pursuant 

11 to subsection (i)(1). 

12 ‘‘(2) NOTICE.—In each year referred to in sub13 section (b)(1), not later than 60 days after the date 

14 that the Director determines the amounts described 

15 in paragraph (1) to be available for affordable hous16 ing fund grants to grantees in such year, the Direc17 tor shall cause to be published in the Federal Reg18 ister a notice that such amounts shall be so avail19 able. 

20 ‘‘(3) GRANT AMOUNT.—

21 ‘‘(A) IN GENERAL.—For each year re22 ferred to in subsection (b)(1), the Director shall 

23 make a grant from amounts in the affordable 

24 housing fund to each grantee in an amount that 

25 is, except as provided in subparagraph (B), 
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1 equal to the formula amount under this section 

2 for the grantee. A grantee may designate a 

3 State housing finance agency, housing and com4 munity development entity, tribally designated 

5 housing entity (as such term is defined in sec6 tion 4 of the Native American Housing Assist7 ance and Self-Determination Act of 1997 (25 

8 U.S.C. 4103)) or other qualified instrumentality 

9 of the grantee to receive such grant amounts. 

10 ‘‘(B) REDUCTION FOR FAILURE TO OBTAIN

11 RETURN OF MISUSED FUNDS.—If in any year a 

12 grantee fails to obtain reimbursement or return 

13 of the full amount required under subsection 

14 (j)(1)(B) to be reimbursed or returned to the 

15 grantee during such year—

16 ‘‘(i) except as provided in clause (ii)—

17 ‘‘(I) the amount of the grant for 

18 the grantee for the succeeding year, 

19 as determined pursuant to subpara20 graph (A), shall be reduced by the 

21 amount by which such amounts re22 quired to be reimbursed or returned 

23 exceed the amount actually reim24 bursed or returned; and 
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1 ‘‘(II) the amount of the grant for 

2 the succeeding year for each other 

3 grantee whose grant is not reduced 

4 pursuant to subclause (I) shall be in5 creased by the amount determined by 

6 applying the formula established pur7 suant to subsection (c)(2) to the total 

8 amount of all reductions for all grant9 ees for such year pursuant to sub10 clause (I); or 

11 ‘‘(ii) in any case in which such failure 

12 to obtain reimbursement or return occurs 

13 during a year immediately preceding a 

14 year in which grants under this subsection 

15 will not be made, the grantee shall pay to 

16 the Director for reallocation among the 

17 other grantees an amount equal to the 

18 amount of the reduction for the grantee 

19 that would otherwise apply under clause 

20 (i)(I). 

21 ‘‘(e) GRANTEE ALLOCATION PLANS.—

22 ‘‘(1) IN GENERAL.—For each year that a grant23 ee receives affordable housing fund grant amounts, 

24 the grantee shall establish an allocation plan in ac25 cordance with this subsection, which shall be a plan 
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1 for the distribution of such grant amounts of the 

2 grantee for such year that—

3 ‘‘(A) is based on priority housing needs, as 

4 determined by the grantee in accordance with 

5 the regulations established under subsection 

6 (m)(2)(C); 

7 ‘‘(B) complies with subsection (f); and 

8 ‘‘(C) includes performance goals, bench9 marks, and timetables for the grantee for the 

10 production, preservation, and rehabilitation of 

11 affordable rental and homeownership housing 

12 with such grant amounts that comply with the 

13 requirements established by the Director pursu14 ant to subsection (m)(2)(F). 

15 ‘‘(2) ESTABLISHMENT.—In establishing an allo16 cation plan, a grantee shall notify the public of the 

17 establishment of the plan, provide an opportunity for 

18 public comments regarding the plan, consider any 

19 public comments received, and make the completed 

20 plan available to the public. 

21 ‘‘(3) CONTENTS.—An allocation plan of a 

22 grantee shall set forth the requirements for eligible 

23 recipients under subsection (h) to apply to the 

24 grantee to receive assistance from affordable housing 
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1 fund grant amounts, including a requirement that 

2 each such application include—

3 ‘‘(A) a description of the eligible activities 

4 to be conducted using such assistance; and 

5 ‘‘(B) a certification by the eligible recipient 

6 applying for such assistance that any housing 

7 units assisted with such assistance will comply 

8 with the requirements under this section. 

9 ‘‘(f) SELECTION OF ACTIVITIES FUNDED USING AF10 FORDABLE HOUSING FUND GRANT AMOUNTS.—Afford11 able housing fund grant amounts of a grantee may be 

12 used, or committed for use, only for activities that—

13 ‘‘(1) are eligible under subsection (g) for such 

14 use; 

15 ‘‘(2) comply with the applicable allocation plan 

16 under subsection (e) of the grantee; and 

17 ‘‘(3) are selected for funding by the grantee in 

18 accordance with the process and criteria for such se19 lection established pursuant to subsection (m)(2)(C). 

20 ‘‘(g) ELIGIBLE ACTIVITIES.—Affordable housing 

21 fund grant amounts of a grantee shall be eligible for use, 

22 or for commitment for use, only for assistance for—

23 ‘‘(1) the production, preservation, and rehabili24 tation of rental housing, including housing under the 

25 programs identified in section 1335(a)(2)(B), except 
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1 that such grant amounts may be used for the benefit 

2 only of extremely low- and very low-income families; 

3 ‘‘(2) the production, preservation, and rehabili4 tation of housing for homeownership, including such 

5 forms as downpayment assistance, closing cost as6 sistance, and assistance for interest-rate buy-downs, 

7 that—

8 ‘‘(A) is available for purchase only for use 

9 as a principal residence by families that qualify 

10 both as—

11 ‘‘(i) extremely low- and very-low in12 come families at the times described in 

13 subparagraphs (A) through (C) of section 

14 215(b)(2) of the Cranston-Gonzalez Na15 tional Affordable Housing Act (42 U.S.C. 

16 12745(b)(2)); and 

17 ‘‘(ii) first-time homebuyers, as such 

18 term is defined in section 104 of the Cran19 ston-Gonzalez National Affordable Housing 

20 Act (42 U.S.C. 12704), except that any 

21 reference in such section to assistance 

22 under title II of such Act shall for pur23 poses of this section be considered to refer 

24 to assistance from affordable housing fund 

25 grant amounts; 
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1 ‘‘(B) has an initial purchase price that 

2 meets the requirements of section 215(b)(1) of 

3 the Cranston-Gonzalez National Affordable 

4 Housing Act; 

5 ‘‘(C) is subject to the same resale restric6 tions established under section 215(b)(3) of the 

7 Cranston-Gonzalez National Affordable Hous8 ing Act and applicable to the participating ju9 risdiction that is the State in which such hous10 ing is located; and 

11 ‘‘(D) is made available for purchase only 

12 by, or in the case of assistance under this para13 graph, is made available only to, homebuyers 

14 who have, before purchase—

15 ‘‘(i) completed a program of coun16 seling with respect to the responsibilities 

17 and financial management involved in 

18 homeownership that is approved by the Di19 rector; except that the Director may, at 

20 the request of a State, waive the require21 ments of this subparagraph with respect to 

22 a geographic area or areas within the State 

23 if: (I) the travel time or distance involved 

24 in providing counseling with respect to 

25 such area or areas, as otherwise required 
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1 under this subparagraph, on an in-person 

2 basis is excessive or the cost of such travel 

3 is prohibitive; and (II) the State provides 

4 alternative forms of counseling for such 

5 area or areas, which may include inter6 active telephone counseling, on-line coun7 seling, interactive video counseling, and 

8 interactive home study counseling and a 

9 program of financial literacy and education 

10 to promote an understanding of consumer, 

11 economic, and personal finance issues and 

12 concepts, including saving for retirement, 

13 managing credit, long-term care, and es14 tate planning and education on predatory 

15 lending, identity theft, and financial abuse 

16 schemes relating to homeownership that is 

17 approved by the Director, except that enti18 ties providing such counseling shall not 

19 discriminate against any particular form of 

20 housing; and 

21 ‘‘(ii) demonstrated, in accordance with 

22 regulations as the Director shall issue set23 ting forth requirements for sufficient evi24 dence, that they are lawfully present in the 

25 United States; and 
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1 ‘‘(3) public infrastructure development activities 

2 in connection with housing activities funded under 

3 paragraph (1) or (2). 

4 ‘‘(h) ELIGIBLE RECIPIENTS.—Affordable housing 

5 fund grant amounts of a grantee may be provided only 

6 to a recipient that is an organization, agency, or other en7 tity (including a for-profit entity, a nonprofit entity, and 

8 a faith-based organization) that—

9 ‘‘(1) has demonstrated experience and capacity 

10 to conduct an eligible activity under (g), as evi11 denced by its ability to—

12 ‘‘(A) own, construct or rehabilitate, man13 age, and operate an affordable multifamily rent14 al housing development; 

15 ‘‘(B) design, construct or rehabilitate, and 

16 market affordable housing for homeownership; 

17 ‘‘(C) provide forms of assistance, such as 

18 downpayments, closing costs, or interest-rate 

19 buy-downs, for purchasers; or 

20 ‘‘(D) construct related public infrastruc21 ture development activities in connection with 

22 such housing activities; 

23 ‘‘(2) demonstrates the ability and financial ca24 pacity to undertake, comply, and manage the eligible 

25 activity; 
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1 ‘‘(3) demonstrates its familiarly with the re2 quirements of any other Federal, State or local 

3 housing program that will be used in conjunction 

4 with such grant amounts to ensure compliance with 

5 all applicable requirements and regulations of such 

6 programs; and 

7 ‘‘(4) makes such assurances to the grantee as 

8 the Director shall, by regulation, require to ensure 

9 that the recipient will comply with the requirements 

10 of this section during the entire period that begins 

11 upon selection of the recipient to receive such grant 

12 amounts and ending upon the conclusion of all ac13 tivities under subsection (g) that are engaged in by 

14 the recipient and funded with such grant amounts. 

15 ‘‘(i) LIMITATIONS ON USE.—

16 ‘‘(1) REQUIRED AMOUNT FOR REFCORP.—Of 

17 the aggregate amount allocated pursuant to sub18 section (b) in each year to the affordable housing 

19 fund, 25 percent shall be used as provided in section 

20 21B(f)(2)(E) of the Federal Home Loan Bank Act 

21 (12 U.S.C. 1441b(f)(2)(E)). 

22 ‘‘(2) REQUIRED AMOUNT FOR HOMEOWNERSHIP

23 ACTIVITIES.—Of the aggregate amount of affordable 

24 housing fund grant amounts provided in each year 
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1 to a grantee, not less than 10 percent shall be used 

2 for activities under paragraph (2) of subsection (g). 

3 ‘‘(3) MAXIMUM AMOUNT FOR PUBLIC INFRA4 STRUCTURE DEVELOPMENT ACTIVITIES IN CONNEC5 TION WITH AFFORDABLE HOUSING ACTIVITIES.—Of 

6 the aggregate amount of affordable housing fund 

7 grant amounts provided in each year to a grantee, 

8 not more than 12.5 percent may be used for activi9 ties under paragraph (3) of subsection (g). 

10 ‘‘(4) DEADLINE FOR COMMITMENT OR USE.—

11 Any affordable housing fund grant amounts of a 

12 grantee shall be used or committed for use within 

13 two years of the date of that such grant amounts 

14 are made available to the grantee. The Director shall 

15 recapture into the affordable housing fund any such 

16 amounts not so used or committed for use and allo17 cate such amounts under subsection (d)(1) in the 

18 first year after such recapture. 

19 ‘‘(5) USE OF RETURNS.—The Director shall, by 

20 regulation provide that any return on a loan or other 

21 investment of any affordable housing fund grant 

22 amounts of a grantee shall be treated, for purposes 

23 of availability to and use by the grantee, as afford24 able housing fund grant amounts. 

25 ‘‘(6) PROHIBITED USES.—The Director shall—
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1 ‘‘(A) by regulation, set forth prohibited 

2 uses of affordable housing fund grant amounts, 

3 which shall include use for—

4 ‘‘(i) political activities; 

5 ‘‘(ii) advocacy; 

6 ‘‘(iii) lobbying, whether directly or 

7 through other parties; 

8 ‘‘(iv) counseling services; 

9 ‘‘(v) travel expenses; and 

10 ‘‘(vi) preparing or providing advice on 

11 tax returns; 

12 ‘‘(B) by regulation, provide that, except as 

13 provided in subparagraph (C), affordable hous14 ing fund grant amounts of a grantee may not 

15 be used for administrative, outreach, or other 

16 costs of—

17 ‘‘(i) the grantee; or 

18 ‘‘(ii) any recipient of such grant 

19 amounts; and 

20 ‘‘(C) by regulation, limit the amount of 

21 any affordable housing fund grant amounts of 

22 the grantee for a year that may be used for ad23 ministrative costs of the grantee of carrying out 

24 the program required under this section to a 

25 percentage of such grant amounts of the grant-
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1 ee for such year, which may not exceed 10 per2 cent. 

3 ‘‘(7) PROHIBITION OF CONSIDERATION OF USE

4 FOR MEETING HOUSING GOALS OR DUTY TO

5 SERVE.—In determining compliance with the hous6 ing goals under this subpart and the duty to serve 

7 underserved markets under section 1335, the Direc8 tor may not consider any affordable housing fund 

9 grant amounts used under this section for eligible 

10 activities under subsection (g). The Director shall 

11 give credit toward the achievement of such housing 

12 goals and such duty to serve underserved markets to 

13 purchases by the enterprises of mortgages for hous14 ing that receives funding from affordable housing 

15 fund grant amounts, but only to the extent that 

16 such purchases by the enterprises are funded other 

17 than with such grant amounts. 

18 ‘‘(8) ACCEPTABLE IDENTIFICATION REQUIRE19 MENT FOR OCCUPANCY OR ASSISTANCE.—

20 ‘‘(A) IN GENERAL.—Any assistance pro21 vided with any affordable housing grant 

22 amounts may not be made available to, or on 

23 behalf of, any individual or household unless the 

24 individual provides, or, in the case of a house25 hold, all adult members of the household pro-
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1 vide, personal identification in one of the fol2 lowing forms: 

3 ‘‘(i) SOCIAL SECURITY CARD WITH

4 PHOTO IDENTIFICATION CARD OR REAL ID

5 ACT IDENTIFICATION.—

6 ‘‘(I) A social security card ac7 companied by a photo identification 

8 card issued by the Federal Govern9 ment or a State Government; or 

10 ‘‘(II) A driver’s license or identi11 fication card issued by a State in the 

12 case of a State that is in compliance 

13 with title II of the REAL ID Act of 

14 2005 (title II of division B of Public 

15 Law 109-13; 49 U.S.C. 30301 note). 

16 ‘‘(ii) PASSPORT.—A passport issued 

17 by the United States or a foreign govern18 ment. 

19 ‘‘(iii) USCIS PHOTO IDENTIFICATION

20 CARD.—A photo identification card issued 

21 by the Secretary of Homeland Security 

22 (acting through the Director of the United 

23 States Citizenship and Immigration Serv24 ices). 
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1 ‘‘(B) REGULATIONS.—The Director shall, 

2 by regulation, require that each grantee and re3 cipient take such actions as the Director con4 siders necessary to ensure compliance with the 

5 requirements of subparagraph (A). 

6 ‘‘(j) ACCOUNTABILITY OF RECIPIENTS AND GRANT7 EES.—

8 ‘‘(1) RECIPIENTS.—

9 ‘‘(A) TRACKING OF FUNDS.—The Director 

10 shall—

11 ‘‘(i) require each grantee to develop 

12 and maintain a system to ensure that each 

13 recipient of assistance from affordable 

14 housing fund grant amounts of the grantee 

15 uses such amounts in accordance with this 

16 section, the regulations issued under this 

17 section, and any requirements or condi18 tions under which such amounts were pro19 vided; and 

20 ‘‘(ii) establish minimum requirements 

21 for agreements, between the grantee and 

22 recipients, regarding assistance from the 

23 affordable housing fund grant amounts of 

24 the grantee, which shall include—
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1 ‘‘(I) appropriate continuing fi2 nancial and project reporting, record 

3 retention, and audit requirements for 

4 the duration of the grant to the re5 cipient to ensure compliance with the 

6 limitations and requirements of this 

7 section and the regulations under this 

8 section; and 

9 ‘‘(II) any other requirements that 

10 the Director determines are necessary 

11 to ensure appropriate grant adminis12 tration and compliance. 

13 ‘‘(B) MISUSE OF FUNDS.—

14 ‘‘(i) REIMBURSEMENT REQUIRE15 MENT.—If any recipient of assistance from 

16 affordable housing fund grant amounts of 

17 a grantee is determined, in accordance 

18 with clause (ii), to have used any such 

19 amounts in a manner that is materially in 

20 violation of this section, the regulations 

21 issued under this section, or any require22 ments or conditions under which such 

23 amounts were provided, the grantee shall 

24 require that, within 12 months after the 

25 determination of such misuse, the recipient 
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1 shall reimburse the grantee for such mis2 used amounts and return to the grantee 

3 any amounts from the affordable housing 

4 fund grant amounts of the grantee that re5 main unused or uncommitted for use. The 

6 remedies under this clause are in addition 

7 to any other remedies that may be avail8 able under law. 

9 ‘‘(ii) DETERMINATION.—A determina10 tion is made in accordance with this clause 

11 if the determination is—

12 ‘‘(I) made by the Director; or 

13 ‘‘(II)(aa) made by the grantee; 

14 ‘‘(bb) the grantee provides notifi15 cation of the determination to the Di16 rector for review, in the discretion of 

17 the Director, of the determination; 

18 and 

19 ‘‘(cc) the Director does not sub20 sequently reverse the determination. 

21 ‘‘(2) GRANTEES.—

22 ‘‘(A) REPORT.—

23 ‘‘(i) IN GENERAL.—The Director shall 

24 require each grantee receiving affordable 

25 housing fund grant amounts for a year to 
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1 submit a report, for such year, to the Di2 rector that—

3 ‘‘(I) describes the activities fund4 ed under this section during such year 

5 with the affordable housing fund 

6 grant amounts of the grantee; and 

7 ‘‘(II) the manner in which the 

8 grantee complied during such year 

9 with the allocation plan established 

10 pursuant to subsection (e) for the 

11 grantee. 

12 ‘‘(ii) PUBLIC AVAILABILITY.—The Di13 rector shall make such reports pursuant to 

14 this subparagraph publicly available. 

15 ‘‘(B) MISUSE OF FUNDS.—If the Director 

16 determines, after reasonable notice and oppor17 tunity for hearing, that a grantee has failed to 

18 comply substantially with any provision of this 

19 section and until the Director is satisfied that 

20 there is no longer any such failure to comply, 

21 the Director shall—

22 ‘‘(i) reduce the amount of assistance 

23 under this section to the grantee by an 

24 amount equal to the amount affordable 
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1 housing fund grant amounts which were 

2 not used in accordance with this section; 

3 ‘‘(ii) require the grantee to repay the 

4 Director an amount equal to the amount of 

5 the amount affordable housing fund grant 

6 amounts which were not used in accord7 ance with this section; 

8 ‘‘(iii) limit the availability of assist9 ance under this section to the grantee to 

10 activities or recipients not affected by such 

11 failure to comply; or 

12 ‘‘(iv) terminate any assistance under 

13 this section to the grantee. 

14 ‘‘(k) CAPITAL REQUIREMENTS.—The utilization or 

15 commitment of amounts from the affordable housing fund 

16 shall not be subject to the risk-based capital requirements 

17 established pursuant to section 1361(a). 

18 ‘‘(l) DEFINITIONS.—For purposes of this section, the 

19 following definitions shall apply: 

20 ‘‘(1) AFFORDABLE HOUSING FUND GRANT

21 AMOUNTS.—The term ‘affordable housing fund 

22 grant amounts’ means amounts from the affordable 

23 housing fund established under subsection (a) that 

24 are provided to a grantee pursuant to subsection 

25 (d)(3). 
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1 ‘‘(2) GRANTEE.—The term ‘grantee’ means—

2 ‘‘(A) with respect to 2007, the Louisiana 

3 Housing Finance Agency and the Mississippi 

4 Development Authority; and 

5 ‘‘(B) with respect to the years referred to 

6 in subsection (b)(1), other than 2007, each 

7 State (as such term is defined in section 1303) 

8 and each federally recognized Indian tribe. 

9 ‘‘(3) RECIPIENT.—The term ‘recipient’ means 

10 an entity meeting the requirements under subsection 

11 (h) that receives assistance from a grantee from af12 fordable housing fund grant amounts of the grantee. 

13 ‘‘(4) TOTAL MORTGAGE PORTFOLIO.—The term 

14 ‘total mortgage portfolio’ means, with respect to a 

15 year, the sum, for all mortgages outstanding during 

16 that year in any form, including whole loans, mort17 gage-backed securities, participation certificates, or 

18 other structured securities backed by mortgages, of 

19 the dollar amount of the unpaid outstanding prin20 cipal balances under such mortgages. Such term in21 cludes all such mortgages or securitized obligations, 

22 whether retained in portfolio, or sold in any form. 

23 The Director is authorized to promulgate rules fur24 ther defining such term as necessary to implement 

25 this section and to address market developments. 
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1 ‘‘(5) VERY-LOW INCOME FAMILY.—The term 

2 ‘very low-income family’ has the meaning given such 

3 term in section 1303, except that such term includes 

4 any family that resides in a rural area that has an 

5 income that does not exceed the poverty line (as 

6 such term is defined in section 673(2) of the Omni7 bus Budget Reconciliation Act of 1981 (42 U.S.C. 

8 9902(2)), including any revision required by such 

9 section) applicable to a family of the size involved. 

10 ‘‘(m) REGULATIONS.—

11 ‘‘(1) IN GENERAL.—The Director, in consulta12 tion with the Secretary of Housing and Urban De13 velopment, shall issue regulations to carry out this 

14 section. 

15 ‘‘(2) REQUIRED CONTENTS.—The regulations 

16 issued under this subsection shall include—

17 ‘‘(A) a requirement that the Director en18 sure that the program of each grantee for use 

19 of affordable housing fund grant amounts of 

20 the grantee is audited not less than annually to 

21 ensure compliance with this section; 

22 ‘‘(B) authority for the Director to audit, 

23 provide for an audit, or otherwise verify a 

24 grantee’s activities, to ensure compliance with 

25 this section; 
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1 ‘‘(C) requirements for a process for appli2 cation to, and selection by, each grantee for ac3 tivities meeting the grantee’s priority housing 

4 needs to be funded with affordable housing 

5 fund grant amounts of the grantee, which shall 

6 provide for priority in funding to be based 

7 upon—

8 ‘‘(i) greatest impact; 

9 ‘‘(ii) geographic diversity; 

10 ‘‘(iii) ability to obligate amounts and 

11 undertake activities so funded in a timely 

12 manner; 

13 ‘‘(iv) in the case of rental housing 

14 projects under subsection (g)(1), the extent 

15 to which rents for units in the project 

16 funded are affordable, especially for ex17 tremely low-income families; 

18 ‘‘(v) in the case of rental housing 

19 projects under subsection (g)(1), the extent 

20 of the duration for which such rents will 

21 remain affordable; 

22 ‘‘(vi) the extent to which the applica23 tion makes use of other funding sources; 

24 and 
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1 ‘‘(vii) the merits of an applicant’s pro2 posed eligible activity; 

3 ‘‘(D) requirements to ensure that amounts 

4 provided to a grantee from the affordable hous5 ing fund that are used for rental housing under 

6 subsection (g)(1) are used only for the benefit 

7 of extremely low- and very-low income families; 

8 ‘‘(E) limitations on public infrastructure 

9 development activities that are eligible pursuant 

10 to subsection (g)(3) for funding with affordable 

11 housing fund grant amounts and requirements 

12 for the connection between such activities and 

13 housing activities funded under paragraph (1) 

14 or (2) of subsection (g); and 

15 ‘‘(F) requirements and standards for es16 tablishment, by grantees (including the grantees 

17 for 2007 pursuant to subsection (l)(2)(A)), of 

18 performance goals, benchmarks, and timetables 

19 for the production, preservation, and rehabilita20 tion of affordable rental and homeownership 

21 housing with affordable housing fund grant 

22 amounts. 

23 ‘‘(n) ENFORCEMENT OF REQUIREMENTS ON ENTER24 PRISE.—Compliance by the enterprises with the require25 ments under this section shall be enforceable under sub-
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1 part C. Any reference in such subpart to this part or to 

2 an order, rule, or regulation under this part specifically 

3 includes this section and any order, rule, or regulation 

4 under this section. 

5 ‘‘(o) AFFORDABLE HOUSING TRUST FUND.—If, 

6 after the enactment of this Act, in any year, there is en7 acted any provision of Federal law establishing an afford8 able housing trust fund other than under this title for use 

9 only for grants to provide affordable rental housing and 

10 affordable homeownership opportunities, and the subse11 quent year is a year referred to in subsection (b)(1), the 

12 Director shall in such subsequent year and any remaining 

13 years referred to in subsection (b)(1) transfer to such af14 fordable housing trust fund the aggregate amount allo15 cated pursuant to subsection (b) in such year to the af16 fordable housing fund under this section, less any amounts 

17 used pursuant to subsection (i)(1). For such subsequent 

18 and remaining years, the provisions of subsections (c) and 

19 (d) shall not apply. Notwithstanding any other provision 

20 of law, assistance provided using amounts transferred to 

21 such affordable housing trust fund pursuant to this sub22 section may not be used for any of the activities specified 

23 in clauses (i) through (vi) of subsection (i)(6). Nothing 

24 in this subsection shall be construed to alter the terms 
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1 and conditions of the affordable housing fund under this 

2 section or to extend the life of such fund. 

3 ‘‘(p) FUNDING ACCOUNTABILITY AND TRANS4 PARENCY.—Any grant under this section to a grantee 

5 from the affordable housing fund established under sub6 section (a), any assistance provided to a recipient by a 

7 grantee from affordable housing fund grant amounts, and 

8 any grant, award, or other assistance from an affordable 

9 housing trust fund referred to in subsection (o) shall be 

10 considered a Federal award for purposes of the Federal 

11 Funding Accountability and Transparency Act of 2006 

12 (31 U.S.C. 6101 note). Upon the request of the Director 

13 of the Office of Management and Budget, the Director of 

14 the Federal Housing Finance Agency shall obtain and pro15 vide such information regarding any such grants, assist16 ance, and awards as the Director of the Office of Manage17 ment and Budget considers necessary to comply with the 

18 requirements of such Act, as applicable pursuant to the 

19 preceding sentence.’’. 

20 (b) TIMELY ESTABLISHMENT OF AFFORDABLE

21 HOUSING NEEDS FORMULA.—

22 (1) IN GENERAL.—The Secretary of Housing 

23 and Urban Development shall, not later than the ef24 fective date under section 185 of this Act, issue the 

25 regulations establishing the affordable housing needs 
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1 formulas in accordance with the provisions of section 

2 1337(c)(2) of the Housing and Community Develop3 ment Act of 1992, as such section is amended by 

4 subsection (a) of this section. 

5 (2) EFFECTIVE DATE.—This subsection shall 

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

7 (c) REFCORP PAYMENTS.—Section 21B(f)(2) of 

8 the Federal Home Loan Bank Act (12 U.S.C. 

9 1441b(f)(2)) is amended—

10 (1) in subparagraph (E), by striking ‘‘and (D)’’ 

11 and inserting ‘‘(D), and (E)’’; 

12 (2) by redesignating subparagraph (E) as sub13 paragraph (F); and 

14 (3) by inserting after subparagraph (D) the fol15 lowing new subparagraph: 

16 ‘‘(E) PAYMENTS BY FANNIE MAE AND

17 FREDDIE MAC.—To the extent that the 

18 amounts available pursuant to subparagraphs 

19 (A), (B), (C), and (D) are insufficient to cover 

20 the amount of interest payments, each enter21 prise (as such term is defined in section 1303 

22 of the Housing and Community Development 

23 Act of 1992 (42 U.S.C. 4502)) shall transfer to 

24 the Funding Corporation in each calendar year 

25 the amounts allocated for use under this sub-
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1 paragraph pursuant to section 1337(i)(1) of 

2 such Act.’’. 

3 (d) GAO REPORT.—The Comptroller General shall 

4 conduct a study to determine the effects that the afford5 able housing fund established under section 1337 of the 

6 Housing and Community Development Act of 1992, as 

7 added by the amendment made by subsection (a) of this 

8 section, will have on the availability and affordability of 

9 credit for homebuyers, including the effects on such credit 

10 of the requirement under such section 1337(b) that the 

11 Federal National Mortgage Association and Federal Home 

12 Loan Mortgage Corporation make allocations of amounts 

13 to such fund based on the average total mortgage port14 folios, and the extent to which the costs of such allocation 

15 requirement will be borne by such entities or will be passed 

16 on to homebuyers. Not later than the expiration of the 

17 12-month period beginning on the date of the enactment 

18 of this Act, the Comptroller General shall submit a report 

19 to the Congress setting forth the results and conclusions 

20 of such study. This subsection shall take effect on the date 

21 of the enactment of this Act. 

22 SEC. 141. CONSISTENCY WITH MISSION. 

23 Subpart B of part 2 of subtitle A of title XIII of the 

24 Housing and Community Development Act of 1992 (12 

25 U.S.C. 4561 et seq.) is amended by adding after section 
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1 1337, as added by section 139 of this Act, the following 

2 new section: 

3 ‘‘SEC. 1338. CONSISTENCY WITH MISSION. 

4 ‘‘This subpart may not be construed to authorize an 

5 enterprise to engage in any program or activity that con6 travenes or is inconsistent with the Federal National 

7 Mortgage Association Charter Act or the Federal Home 

8 Loan Mortgage Corporation Act.’’. 

9 SEC. 142. ENFORCEMENT. 

10 (a) CEASE-AND-DESIST PROCEEDINGS.—Section 

11 1341 of the Housing and Community Development Act 

12 of 1992 (12 U.S.C. 4581) is amended—

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

14 following new subsection: 

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

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

17 an enterprise if the Director determines—

18 ‘‘(1) the enterprise has failed to meet any hous19 ing goal established under subpart B, following a 

20 written notice and determination of such failure in 

21 accordance with section 1336; 

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

23 under section 1314, following a notice of such fail24 ure, an opportunity for comment by the enterprise, 

25 and a final determination by the Director; 
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1 ‘‘(3) the enterprise has failed to submit the in2 formation required under subsection (m) or (n) of 

3 section 309 of the Federal National Mortgage Asso4 ciation Charter Act, or subsection (e) or (f) of sec5 tion 307 of the Federal Home Loan Mortgage Cor6 poration Act; 

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

8 this part or any order, rule or regulation under this 

9 part; 

10 ‘‘(5) the enterprise has failed to submit a hous11 ing plan that complies with section 1336(c) within 

12 the applicable period; or 

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

14 housing plan under section 1336(c).’’; 

15 (2) in subsection (b)(2), by striking ‘‘requiring 

16 the enterprise to’’ and all that follows through the 

17 end of the paragraph and inserting the following: 

18 ‘‘requiring the enterprise to—

19 ‘‘(A) comply with the goal or goals; 

20 ‘‘(B) submit a report under section 1314; 

21 ‘‘(C) comply with any provision this part 

22 or any order, rule or regulation under such 

23 part; 

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

25 with section 1336(c); 
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1 ‘‘(E) comply with a housing plan submitted 

2 under section 1336(c); or 

3 ‘‘(F) provide the information required 

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

5 the Federal National Mortgage Association 

6 Charter Act or subsection (e) or (f) of section 

7 307 of the Federal Home Loan Mortgage Cor8 poration Act, as applicable.’’; 

9 (3) in subsection (c), by inserting ‘‘date of the’’ 

10 before ‘‘service of the order’’; and 

11 (4) by striking subsection (d). 

12 (b) AUTHORITY OF DIRECTOR TO ENFORCE NO13 TICES AND ORDERS.—Section 1344 of the Housing and 

14 Community Development Act of 1992 (12 U.S.C. 4584) 

15 is amended by striking subsection (a) and inserting the 

16 following new subsection: 

17 ‘‘(a) ENFORCEMENT.—The Director may, in the dis18 cretion of the Director, apply to the United States District 

19 Court for the District of Columbia, or the United States 

20 district court within the jurisdiction of which the head21 quarters of the enterprise is located, for the enforcement 

22 of any effective and outstanding notice or order issued 

23 under section 1341 or 1345, or request that the Attorney 

24 General of the United States bring such an action. Such 
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1 court shall have jurisdiction and power to order and re2 quire compliance with such notice or order.’’. 

3 (c) CIVIL MONEY PENALTIES.—Section 1345 of the 

4 Housing and Community Development Act of 1992 (12 

5 U.S.C. 4585) is amended—

6 (1) by striking subsections (a) and (b) and in7 serting the following new subsections: 

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

9 money penalty, in accordance with the provisions of this 

10 section, on any enterprise that has failed to—

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

12 subpart B, following a written notice and determina13 tion of such failure in accordance with section 

14 1336(b); 

15 ‘‘(2) submit a report under section 1314, fol16 lowing a notice of such failure, an opportunity for 

17 comment by the enterprise, and a final determina18 tion by the Director; 

19 ‘‘(3) submit the information required under 

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

21 National Mortgage Association Charter Act, or sub22 section (e) or (f) of section 307 of the Federal Home 

23 Loan Mortgage Corporation Act; 

24 ‘‘(4) comply with any provision of this part or 

25 any order, rule or regulation under this part; 
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1 ‘‘(5) submit a housing plan pursuant to section 

2 1336(c) within the required period; or 

3 ‘‘(6) comply with a housing plan for the enter4 prise under section 1336(c). 

5 ‘‘(b) AMOUNT OF PENALTY.—The amount of the 

6 penalty, as determined by the Director, may not exceed—

7 ‘‘(1) for any failure described in paragraph (1), 

8 (5), or (6) of subsection (a), $50,000 for each day 

9 that the failure occurs; and 

10 ‘‘(2) for any failure described in paragraph (2), 

11 (3), or (4) of subsection (a), $20,000 for each day 

12 that the failure occurs.’’; 

13 (2) in subsection (c)—

14 (A) in paragraph (1)—

15 (i) in subparagraph (A), by inserting 

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

17 (ii) in subparagraph (B), by striking 

18 ‘‘; and’’ and inserting a period; and 

19 (iii) by striking subparagraph (C); 

20 and 

21 (B) in paragraph (2), by inserting after 

22 the period at the end the following: ‘‘In deter23 mining the penalty under subsection (a)(1), the 

24 Director shall give consideration to the length 
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1 of time the enterprise should reasonably take to 

2 achieve the goal.’’; 

3 (3) in the first sentence of subsection (d)—

4 (A) by striking ‘‘request the Attorney Gen5 eral of the United States to’’ and inserting ‘‘, 

6 in the discretion of the Director,’’; and 

7 (B) by inserting ‘‘, or request that the At8 torney General of the United States bring such 

9 an action’’ before the period at the end; 

10 (4) by striking subsection (f); and 

11 (5) by redesignating subsection (g) as sub12 section (f). 

13 (d) ENFORCEMENT OF SUBPOENAS.—Section 

14 1348(c) of the Housing and Community Development Act 

15 of 1992 (12 U.S.C. 4588(c)) is amended—

16 (1) by striking ‘‘request the Attorney General 

17 of the United States to’’ and inserting ‘‘, in the dis18 cretion of the Director,’’; and 

19 (2) by inserting ‘‘or request that the Attorney 

20 General of the United States bring such an action,’’ 

21 after ‘‘District of Columbia,’’. 

22 (e) CONFORMING AMENDMENT.—The heading for 

23 subpart C of part 2 of subtitle A of title XIII of the Hous24 ing and Community Development Act of 1992 is amended 

25 to read as follows: 
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1 ‘‘Subpart C—Enforcement’’. 

2 SEC. 143. CONFORMING AMENDMENTS. 

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

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

5 seq.) is amended—

6 (1) by striking ‘‘Secretary’’ each place such 

7 term appears in such part and inserting ‘‘Director’’; 

8 (2) in the section heading for section 1323 (12 

9 U.S.C. 4543), by inserting ‘‘OF ENTERPRISES’’ be10 fore the period at the end; 

11 (3) by striking section 1327 (12 U.S.C. 4547); 

12 (4) by striking section 1328 (12 U.S.C. 4548); 

13 (5) by redesignating section 1329 (as amended 

14 by section 135) as section 1327; 

15 (6) in sections 1345(c)(1)(A), 1346(a), and 

16 1346(b) (12 U.S.C. 4585(c)(1)(A), 4586(a), and 

17 4586(b)), by striking ‘‘Secretary’s’’ each place such 

18 term appears and inserting ‘‘Director’s’’; and 

19 (7) by striking section 1349 (12 U.S.C. 4589). 

20 Subtitle C—Prompt Corrective 

21 Action 

22 SEC. 151. CAPITAL CLASSIFICATIONS. 

23 (a) IN GENERAL.—Section 1364 of the Housing and 

24 Community Development Act of 1992 (12 U.S.C. 4614) 

25 is amended—
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1 (1) in the heading for subsection (a), by strik2 ing ‘‘IN GENERAL’’ and inserting ‘‘ENTERPRISES’’. 

3 (2) in subsection (c)—

4 (A) by striking ‘‘subsection (b)’’ and in5 serting ‘‘subsection (c)’’; 

6 (B) by striking ‘‘enterprises’’ and inserting 

7 ‘‘regulated entities’’; and 

8 (C) by striking the last sentence; 

9 (3) by redesignating subsections (c) (as so 

10 amended by paragraph (2) of this subsection) and 

11 (d) as subsections (d) and (f), respectively; 

12 (4) by striking subsection (b) and inserting the 

13 following new subsections: 

14 ‘‘(b) FEDERAL HOME LOAN BANKS.—

15 ‘‘(1) ESTABLISHMENT AND CRITERIA.—For 

16 purposes of this subtitle, the Director shall, by regu17 lation—

18 ‘‘(A) establish the capital classifications 

19 specified under paragraph (2) for the Federal 

20 home loan banks; 

21 ‘‘(B) establish criteria for each such cap22 ital classification based on the amount and 

23 types of capital held by a bank and the risk24 based, minimum, and critical capital levels for 

25 the banks and taking due consideration of the 
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1 capital classifications established under sub2 section (a) for the enterprises, with such modi3 fications as the Director determines to be ap4 propriate to reflect the difference in operations 

5 between the banks and the enterprises; and 

6 ‘‘(C) shall classify the Federal home loan 

7 banks according to such capital classifications. 

8 ‘‘(2) CLASSIFICATIONS.—The capital classifica9 tions specified under this paragraph are—

10 ‘‘(A) adequately capitalized; 

11 ‘‘(B) undercapitalized; 

12 ‘‘(C) significantly undercapitalized; and 

13 ‘‘(D) critically undercapitalized. 

14 ‘‘(c) DISCRETIONARY CLASSIFICATION.—

15 ‘‘(1) GROUNDS FOR RECLASSIFICATION.—The 

16 Director may reclassify a regulated entity under 

17 paragraph (2) if—

18 ‘‘(A) at any time, the Director determines 

19 in writing that the regulated entity is engaging 

20 in conduct that could result in a rapid depletion 

21 of core or total capital or, in the case of an en22 terprise, that the value of the property subject 

23 to mortgages held or securitized by the enter24 prise has decreased significantly; 
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1 ‘‘(B) after notice and an opportunity for 

2 hearing, the Director determines that the regu3 lated entity is in an unsafe or unsound condi4 tion; or 

5 ‘‘(C) pursuant to section 1371(b), the Di6 rector deems the regulated entity to be engag7 ing in an unsafe or unsound practice. 

8 ‘‘(2) RECLASSIFICATION.—In addition to any 

9 other action authorized under this title, including 

10 the reclassification of a regulated entity for any rea11 son not specified in this subsection, if the Director 

12 takes any action described in paragraph (1) the Di13 rector may classify a regulated entity—

14 ‘‘(A) as undercapitalized, if the regulated 

15 entity is otherwise classified as adequately cap16 italized; 

17 ‘‘(B) as significantly undercapitalized, if 

18 the regulated entity is otherwise classified as 

19 undercapitalized; and 

20 ‘‘(C) as critically undercapitalized, if the 

21 regulated entity is otherwise classified as sig22 nificantly undercapitalized.’’; and 

23 (5) by inserting after subsection (d) (as so re24 designated by paragraph (3) of this subsection), the 

25 following new subsection: 
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1 ‘‘(e) RESTRICTION ON CAPITAL DISTRIBUTIONS.—

2 ‘‘(1) IN GENERAL.—A regulated entity shall 

3 make no capital distribution if, after making the dis4 tribution, the regulated entity would be under5 capitalized. 

6 ‘‘(2) EXCEPTION.—Notwithstanding paragraph 

7 (1), the Director may permit a regulated entity, to 

8 the extent appropriate or applicable, to repurchase, 

9 redeem, retire, or otherwise acquire shares or owner10 ship interests if the repurchase, redemption, retire11 ment, or other acquisition—

12 ‘‘(A) is made in connection with the 

13 issuance of additional shares or obligations of 

14 the regulated entity in at least an equivalent 

15 amount; and 

16 ‘‘(B) will reduce the financial obligations of 

17 the regulated entity or otherwise improve the fi18 nancial condition of the entity.’’. 

19 (b) REGULATIONS.—Not later than the expiration of 

20 the 180-day period beginning on the effective date under 

21 section 185, the Director of the Federal Housing Finance 

22 Agency shall issue regulations to carry out section 1364(b) 

23 of the Housing and Community Development Act of 1992 

24 (as added by paragraph (4) of this subsection), relating 

25 to capital classifications for the Federal home loan banks. 
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1 SEC. 152. SUPERVISORY ACTIONS APPLICABLE TO UNDER2 CAPITALIZED REGULATED ENTITIES. 

3 Section 1365 of the Housing and Community Devel4 opment Act of 1992 (12 U.S.C. 4615) is amended—

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

7 (2) in subsection (a)—

8 (A) by redesignating paragraphs (1) and 

9 (2) as paragraphs (2) and (3), respectively; 

10 (B) by inserting before paragraph (2), as 

11 so redesignated by subparagraph (A) of this 

12 paragraph, the following paragraph: 

13 ‘‘(1) REQUIRED MONITORING.—The Director 

14 shall—

15 ‘‘(A) closely monitor the condition of any 

16 regulated entity that is classified as under17 capitalized; 

18 ‘‘(B) closely monitor compliance with the 

19 capital restoration plan, restrictions, and re20 quirements imposed under this section; and 

21 ‘‘(C) periodically review the plan, restric22 tions, and requirements applicable to the under23 capitalized regulated entity to determine wheth24 er the plan, restrictions, and requirements are 

25 achieving the purpose of this section.’’; and 
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1 (C) by inserting at the end the following 

2 new paragraphs: 

3 ‘‘(4) RESTRICTION OF ASSET GROWTH.—A reg4 ulated entity that is classified as undercapitalized 

5 shall not permit its average total assets (as such 

6 term is defined in section 1316(b) during any cal7 endar quarter to exceed its average total assets dur8 ing the preceding calendar quarter unless—

9 ‘‘(A) the Director has accepted the capital 

10 restoration plan of the regulated entity; 

11 ‘‘(B) any increase in total assets is con12 sistent with the plan; and 

13 ‘‘(C) the ratio of total capital to assets for 

14 the regulated entity increases during the cal15 endar quarter at a rate sufficient to enable the 

16 entity to become adequately capitalized within a 

17 reasonable time. 

18 ‘‘(5) PRIOR APPROVAL OF ACQUISITIONS, NEW

19 PRODUCTS, AND NEW ACTIVITIES.—A regulated enti20 ty that is classified as undercapitalized shall not, di21 rectly or indirectly, acquire any interest in any entity 

22 or initially offer any new product (as such term is 

23 defined in section 1321(f)) or engage in any new ac24 tivity, service, undertaking, or offering unless—
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1 ‘‘(A) the Director has accepted the capital 

2 restoration plan of the regulated entity, the en3 tity is implementing the plan, and the Director 

4 determines that the proposed action is con5 sistent with and will further the achievement of 

6 the plan; or 

7 ‘‘(B) the Director determines that the pro8 posed action will further the purpose of this 

9 section.’’; 

10 (3) in the subsection heading for subsection (b), 

11 by striking ‘‘FROM UNDERCAPITALIZED TO SIGNIFI12 CANTLY UNDERCAPITALIZED’’; and 

13 (4) by striking subsection (c) and inserting the 

14 following new subsection: 

15 ‘‘(c) OTHER DISCRETIONARY SAFEGUARDS.—The 

16 Director may take, with respect to a regulated entity that 

17 is classified as undercapitalized, any of the actions author18 ized to be taken under section 1366 with respect to a regu19 lated entity that is classified as significantly undercapital20 ized, if the Director determines that such actions are nec21 essary to carry out the purpose of this subtitle.’’. 
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1 SEC. 153. SUPERVISORY ACTIONS APPLICABLE TO SIGNIFI2 CANTLY UNDERCAPITALIZED REGULATED 

3 ENTITIES. 

4 Section 1366 of the Housing and Community Devel5 opment Act of 1992 (12 U.S.C. 4616) is amended—

6 (1) in the section heading, by striking ‘‘ENTER7 PRISES’’ and inserting ‘‘REGULATED ENTITIES’’; 

8 (2) in subsection (a)(2)(A), by striking ‘‘enter9 prise’’ the last place such term appears; 

10 (3) in subsection (b)—

11 (A) in the subsection heading, by striking 

12 ‘‘DISCRETIONARY SUPERVISORY ACTIONS’’ and 

13 inserting ‘‘SPECIFIC ACTIONS’’. 

14 (B) in the matter preceding paragraph (1), 

15 by striking ‘‘may, at any time, take any’’ and 

16 inserting ‘‘shall carry out this section by taking, 

17 at any time, one or more’’; 

18 (C) by redesignating paragraphs (5) and 

19 (6) as paragraphs (6) and (7), respectively; 

20 (D) by inserting after paragraph (4) the 

21 following new paragraph: 

22 ‘‘(5) IMPROVEMENT OF MANAGEMENT.—Take 

23 one or more of the following actions: 

24 ‘‘(A) NEW ELECTION OF BOARD.—Order a 

25 new election for the board of directors of the 

26 regulated entity. 
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1 ‘‘(B) DISMISSAL OF DIRECTORS OR EXECU2 TIVE OFFICERS.—Require the regulated entity 

3 to dismiss from office any director or executive 

4 officer who had held office for more than 180 

5 days immediately before the entity became 

6 undercapitalized. Dismissal under this subpara7 graph shall not be construed to be a removal 

8 pursuant to the Director’s enforcement powers 

9 provided in section 1377. 

10 ‘‘(C) EMPLOY QUALIFIED EXECUTIVE OF11 FICERS.—Require the regulated entity to em12 ploy qualified executive officers (who, if the Di13 rector so specifies, shall be subject to approval 

14 by the Director).’’; and 

15 (E) by inserting at the end the following 

16 new paragraph: 

17 ‘‘(8) OTHER ACTION.—Require the regulated 

18 entity to take any other action that the Director de19 termines will better carry out the purpose of this 

20 section than any of the actions specified in this 

21 paragraph.’’; 

22 (4) by redesignating subsection (c) as sub23 section (d); and 

24 (5) by inserting after subsection (b) the fol25 lowing new subsection: 
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1 ‘‘(c) RESTRICTION ON COMPENSATION OF EXECU2 TIVE OFFICERS.—A regulated entity that is classified as 

3 significantly undercapitalized may not, without prior writ4 ten approval by the Director—

5 ‘‘(1) pay any bonus to any executive officer; or 

6 ‘‘(2) provide compensation to any executive offi7 cer at a rate exceeding that officer’s average rate of 

8 compensation (excluding bonuses, stock options, and 

9 profit sharing) during the 12 calendar months pre10 ceding the calendar month in which the regulated 

11 entity became undercapitalized.’’. 

12 SEC. 154. AUTHORITY OVER CRITICALLY UNDERCAPITAL13 IZED REGULATED ENTITIES. 

14 (a) IN GENERAL.—Section 1367 of the Housing and 

15 Community Development Act of 1992 (12 U.S.C. 4617) 

16 is amended to read as follows: 

17 ‘‘SEC. 1367. AUTHORITY OVER CRITICALLY UNDERCAPITAL18 IZED REGULATED ENTITIES. 

19 ‘‘(a) APPOINTMENT OF AGENCY AS CONSERVATOR

20 OR RECEIVER.—

21 ‘‘(1) IN GENERAL.—Notwithstanding any other 

22 provision of Federal or State law, if any of the 

23 grounds under paragraph (3) exist, at the discretion 

24 of the Director, the Director may establish a con25 servatorship or receivership, as appropriate, for the 
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1 purpose of reorganizing, rehabilitating, or winding 

2 up the affairs of a regulated entity. 

3 ‘‘(2) APPOINTMENT.—In any conservatorship or 

4 receivership established under this section, the Di5 rector shall appoint the Agency as conservator or re6 ceiver. 

7 ‘‘(3) GROUNDS FOR APPOINTMENT.—The 

8 grounds for appointing a conservator or receiver for 

9 a regulated entity are as follows: 

10 ‘‘(A) ASSETS INSUFFICIENT FOR OBLIGA11 TIONS.—The assets of the regulated entity are 

12 less than the obligations of the regulated entity 

13 to its creditors and others. 

14 ‘‘(B) SUBSTANTIAL DISSIPATION.—Sub15 stantial dissipation of assets or earnings due 

16 to—

17 ‘‘(i) any violation of any provision of 

18 Federal or State law; or 

19 ‘‘(ii) any unsafe or unsound practice. 

20 ‘‘(C) UNSAFE OR UNSOUND CONDITION.—

21 An unsafe or unsound condition to transact 

22 business. 

23 ‘‘(D) CEASE-AND-DESIST ORDERS.—Any 

24 willful violation of a cease-and-desist order that 

25 has become final. 
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1 ‘‘(E) CONCEALMENT.—Any concealment of 

2 the books, papers, records, or assets of the reg3 ulated entity, or any refusal to submit the 

4 books, papers, records, or affairs of the regu5 lated entity, for inspection to any examiner or 

6 to any lawful agent of the Director. 

7 ‘‘(F) INABILITY TO MEET OBLIGATIONS.—

8 The regulated entity is likely to be unable to 

9 pay its obligations or meet the demands of its 

10 creditors in the normal course of business. 

11 ‘‘(G) LOSSES.—The regulated entity has 

12 incurred or is likely to incur losses that will de13 plete all or substantially all of its capital, and 

14 there is no reasonable prospect for the regu15 lated entity to become adequately capitalized 

16 (as defined in section 1364(a)(1)). 

17 ‘‘(H) VIOLATIONS OF LAW.—Any violation 

18 of any law or regulation, or any unsafe or un19 sound practice or condition that is likely to—

20 ‘‘(i) cause insolvency or substantial 

21 dissipation of assets or earnings; or 

22 ‘‘(ii) weaken the condition of the regu23 lated entity. 

24 ‘‘(I) CONSENT.—The regulated entity, by 

25 resolution of its board of directors or its share-
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1 holders or members, consents to the appoint2 ment. 

3 ‘‘(J) UNDERCAPITALIZATION.—The regu4 lated entity is undercapitalized or significantly 

5 undercapitalized (as defined in section 

6 1364(a)(3) or in regulations issued pursuant to 

7 section 1364(b), as applicable), and—

8 ‘‘(i) has no reasonable prospect of be9 coming adequately capitalized; 

10 ‘‘(ii) fails to become adequately cap11 italized, as required by—

12 ‘‘(I) section 1365(a)(1) with re13 spect to an undercapitalized regulated 

14 entity; or 

15 ‘‘(II) section 1366(a)(1) with re16 spect to a significantly undercapital17 ized regulated entity; 

18 ‘‘(iii) fails to submit a capital restora19 tion plan acceptable to the Agency within 

20 the time prescribed under section 1369C; 

21 or 

22 ‘‘(iv) materially fails to implement a 

23 capital restoration plan submitted and ac24 cepted under section 1369C. 
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1 ‘‘(K) CRITICAL UNDERCAPITALIZATION.—

2 The regulated entity is critically undercapital3 ized, as defined in section 1364(a)(4) or in reg4 ulations issued pursuant to section 1364(b), as 

5 applicable. 

6 ‘‘(L) MONEY LAUNDERING.—The Attorney 

7 General notifies the Director in writing that the 

8 regulated entity has been found guilty of a 

9 criminal offense under section 1956 or 1957 of 

10 title 18, United States Code, or section 5322 or 

11 5324 of title 31, United States Code. 

12 ‘‘(4) MANDATORY RECEIVERSHIP.—

13 ‘‘(A) IN GENERAL.—The Director shall ap14 point the Agency as receiver for a regulated en15 tity if the Director determines, in writing, 

16 that—

17 ‘‘(i) the assets of the regulated entity 

18 are, and during the preceding 30 calendar 

19 days have been, less than the obligations of 

20 the regulated entity to its creditors and 

21 others; or 

22 ‘‘(ii) the regulated entity is not, and 

23 during the preceding 30 calendar days has 

24 not been, generally paying the debts of the 

25 regulated entity (other than debts that are 
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1 the subject of a bona fide dispute) as such 

2 debts become due. 

3 ‘‘(B) PERIODIC DETERMINATION RE4 QUIRED FOR CRITICALLY UNDER CAPITALIZED

5 REGULATED ENTITY.—If a regulated entity is 

6 critically undercapitalized, the Director shall 

7 make a determination, in writing, as to whether 

8 the regulated entity meets the criteria specified 

9 in clause (i) or (ii) of subparagraph (A)—

10 ‘‘(i) not later than 30 calendar days 

11 after the regulated entity initially becomes 

12 critically undercapitalized; and 

13 ‘‘(ii) at least once during each suc14 ceeding 30-calendar day period. 

15 ‘‘(C) DETERMINATION NOT REQUIRED IF

16 RECEIVERSHIP ALREADY IN PLACE.—Subpara17 graph (B) shall not apply with respect to a reg18 ulated entity in any period during which the 

19 Agency serves as receiver for the regulated enti20 ty. 

21 ‘‘(D) RECEIVERSHIP TERMINATES CON22 SERVATORSHIP.—The appointment under this 

23 section of the Agency as receiver of a regulated 

24 entity shall immediately terminate any con-
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1 servatorship established under this title for the 

2 regulated entity. 

3 ‘‘(5) JUDICIAL REVIEW.—

4 ‘‘(A) IN GENERAL.—If the Agency is ap5 pointed conservator or receiver under this sec6 tion, the regulated entity may, within 30 days 

7 of such appointment, bring an action in the 

8 United States District Court for the judicial 

9 district in which the principal place of business 

10 of such regulated entity is located, or in the 

11 United States District Court for the District of 

12 Columbia, for an order requiring the Agency to 

13 remove itself as conservator or receiver. 

14 ‘‘(B) REVIEW.—Upon the filing of an ac15 tion under subparagraph (A), the court shall, 

16 upon the merits, dismiss such action or direct 

17 the Agency to remove itself as such conservator 

18 or receiver. 

19 ‘‘(6) DIRECTORS NOT LIABLE FOR ACQUI20 ESCING IN APPOINTMENT OF CONSERVATOR OR RE21 CEIVER.—The members of the board of directors of 

22 a regulated entity shall not be liable to the share23 holders or creditors of the regulated entity for acqui24 escing in or consenting in good faith to the appoint-
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1 ment of the Agency as conservator or receiver for 

2 that regulated entity. 

3 ‘‘(7) AGENCY NOT SUBJECT TO ANY OTHER

4 FEDERAL AGENCY.—When acting as conservator or 

5 receiver, the Agency shall not be subject to the di6 rection or supervision of any other agency of the 

7 United States or any State in the exercise of the 

8 rights, powers, and privileges of the Agency. 

9 ‘‘(b) POWERS AND DUTIES OF THE AGENCY AS CON10 SERVATOR OR RECEIVER.—

11 ‘‘(1) RULEMAKING AUTHORITY OF THE AGEN12 CY.—The Agency may prescribe such regulations as 

13 the Agency determines to be appropriate regarding 

14 the conduct of conservatorships or receiverships. 

15 ‘‘(2) GENERAL POWERS.—

16 ‘‘(A) SUCCESSOR TO REGULATED ENTI17 TY.—The Agency shall, as conservator or re18 ceiver, and by operation of law, immediately 

19 succeed to—

20 ‘‘(i) all rights, titles, powers, and 

21 privileges of the regulated entity, and of 

22 any stockholder, officer, or director of such 

23 regulated entity with respect to the regu24 lated entity and the assets of the regulated 

25 entity; and 
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1 ‘‘(ii) title to the books, records, and 

2 assets of any other legal custodian of such 

3 regulated entity. 

4 ‘‘(B) OPERATE THE REGULATED ENTI5 TY.—The Agency may, as conservator or re6 ceiver—

7 ‘‘(i) take over the assets of and oper8 ate the regulated entity with all the powers 

9 of the shareholders, the directors, and the 

10 officers of the regulated entity and conduct 

11 all business of the regulated entity; 

12 ‘‘(ii) collect all obligations and money 

13 due the regulated entity; 

14 ‘‘(iii) perform all functions of the reg15 ulated entity in the name of the regulated 

16 entity which are consistent with the ap17 pointment as conservator or receiver; and 

18 ‘‘(iv) preserve and conserve the assets 

19 and property of such regulated entity. 

20 ‘‘(C) FUNCTIONS OF OFFICERS, DIREC21 TORS, AND SHAREHOLDERS OF A REGULATED

22 ENTITY.—The Agency may, by regulation or 

23 order, provide for the exercise of any function 

24 by any stockholder, director, or officer of any 
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1 regulated entity for which the Agency has been 

2 named conservator or receiver. 

3 ‘‘(D) POWERS AS CONSERVATOR.—The 

4 Agency may, as conservator, take such action 

5 as may be—

6 ‘‘(i) necessary to put the regulated en7 tity in a sound and solvent condition; and 

8 ‘‘(ii) appropriate to carry on the busi9 ness of the regulated entity and preserve 

10 and conserve the assets and property of 

11 the regulated entity, including, if two or 

12 more Federal home loan banks have been 

13 placed in conservatorship contempora14 neously, merging two or more such banks 

15 into a single Federal home loan bank. 

16 ‘‘(E) ADDITIONAL POWERS AS RE17 CEIVER.—The Agency may, as receiver, place 

18 the regulated entity in liquidation and proceed 

19 to realize upon the assets of the regulated enti20 ty, having due regard to the conditions of the 

21 housing finance market. 

22 ‘‘(F) ORGANIZATION OF NEW REGULATED

23 ENTITIES.—The Agency may, as receiver, orga24 nize a successor regulated entity that will oper25 ate pursuant to subsection (i). 
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1 ‘‘(G) TRANSFER OF ASSETS AND LIABIL2 ITIES.—The Agency may, as conservator or re3 ceiver, transfer any asset or liability of the reg4 ulated entity in default without any approval, 

5 assignment, or consent with respect to such 

6 transfer. Any Federal home loan bank may, 

7 with the approval of the Agency, acquire the as8 sets of any Bank in conservatorship or receiver9 ship, and assume the liabilities of such Bank. 

10 ‘‘(H) PAYMENT OF VALID OBLIGATIONS.—

11 The Agency, as conservator or receiver, shall, to 

12 the extent of proceeds realized from the per13 formance of contracts or sale of the assets of a 

14 regulated entity, pay all valid obligations of the 

15 regulated entity in accordance with the pre16 scriptions and limitations of this section. 

17 ‘‘(I) SUBPOENA AUTHORITY.—

18 ‘‘(i) IN GENERAL.—

19 ‘‘(I) IN GENERAL.—The Agency 

20 may, as conservator or receiver, and 

21 for purposes of carrying out any 

22 power, authority, or duty with respect 

23 to a regulated entity (including deter24 mining any claim against the regu25 lated entity and determining and real-
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1 izing upon any asset of any person in 

2 the course of collecting money due the 

3 regulated entity), exercise any power 

4 established under section 1348. 

5 ‘‘(II) APPLICABILITY OF LAW.—

6 The provisions of section 1348 shall 

7 apply with respect to the exercise of 

8 any power exercised under this sub9 paragraph in the same manner as 

10 such provisions apply under that sec11 tion. 

12 ‘‘(ii) AUTHORITY OF DIRECTOR.—A 

13 subpoena or subpoena duces tecum may be 

14 issued under clause (i) only by, or with the 

15 written approval of, the Director, or the 

16 designee of the Director. 

17 ‘‘(iii) RULE OF CONSTRUCTION.—This 

18 subsection shall not be construed to limit 

19 any rights that the Agency, in any capac20 ity, might otherwise have under section 

21 1317 or 1379D. 

22 ‘‘(J) CONTRACTING FOR SERVICES.—The 

23 Agency may, as conservator or receiver, provide 

24 by contract for the carrying out of any of its 
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1 functions, activities, actions, or duties as con2 servator or receiver. 

3 ‘‘(K) INCIDENTAL POWERS.—The Agency 

4 may, as conservator or receiver—

5 ‘‘(i) exercise all powers and authori6 ties specifically granted to conservators or 

7 receivers, respectively, under this section, 

8 and such incidental powers as shall be nec9 essary to carry out such powers; and 

10 ‘‘(ii) take any action authorized by 

11 this section, which the Agency determines 

12 is in the best interests of the regulated en13 tity or the Agency. 

14 ‘‘(3) AUTHORITY OF RECEIVER TO DETERMINE

15 CLAIMS.—

16 ‘‘(A) IN GENERAL.—The Agency may, as 

17 receiver, determine claims in accordance with 

18 the requirements of this subsection and any 

19 regulations prescribed under paragraph (4). 

20 ‘‘(B) NOTICE REQUIREMENTS.—The re21 ceiver, in any case involving the liquidation or 

22 winding up of the affairs of a closed regulated 

23 entity, shall—

24 ‘‘(i) promptly publish a notice to the 

25 creditors of the regulated entity to present 
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1 their claims, together with proof, to the re2 ceiver by a date specified in the notice 

3 which shall be not less than 90 days after 

4 the publication of such notice; and 

5 ‘‘(ii) republish such notice approxi6 mately 1 month and 2 months, respec7 tively, after the publication under clause 

8 (i). 

9 ‘‘(C) MAILING REQUIRED.—The receiver 

10 shall mail a notice similar to the notice pub11 lished under subparagraph (B)(i) at the time of 

12 such publication to any creditor shown on the 

13 books of the regulated entity—

14 ‘‘(i) at the last address of the creditor 

15 appearing in such books; or 

16 ‘‘(ii) upon discovery of the name and 

17 address of a claimant not appearing on the 

18 books of the regulated entity within 30 

19 days after the discovery of such name and 

20 address. 

21 ‘‘(4) RULEMAKING AUTHORITY RELATING TO

22 DETERMINATION OF CLAIMS.—Subject to subsection 

23 (c), the Director may prescribe regulations regarding 

24 the allowance or disallowance of claims by the re-
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1 ceiver and providing for administrative determina2 tion of claims and review of such determination. 

3 ‘‘(5) PROCEDURES FOR DETERMINATION OF

4 CLAIMS.—

5 ‘‘(A) DETERMINATION PERIOD.—

6 ‘‘(i) IN GENERAL.—Before the end of 

7 the 180-day period beginning on the date 

8 on which any claim against a regulated en9 tity is filed with the Agency as receiver, 

10 the Agency shall determine whether to 

11 allow or disallow the claim and shall notify 

12 the claimant of any determination with re13 spect to such claim. 

14 ‘‘(ii) EXTENSION OF TIME.—The pe15 riod described in clause (i) may be ex16 tended by a written agreement between the 

17 claimant and the Agency. 

18 ‘‘(iii) MAILING OF NOTICE SUFFI19 CIENT.—The notification requirements of 

20 clause (i) shall be deemed to be satisfied if 

21 the notice of any determination with re22 spect to any claim is mailed to the last ad23 dress of the claimant which appears—

24 ‘‘(I) on the books of the regu25 lated entity; 
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1 ‘‘(II) in the claim filed by the 

2 claimant; or 

3 ‘‘(III) in documents submitted in 

4 proof of the claim. 

5 ‘‘(iv) CONTENTS OF NOTICE OF DIS6 ALLOWANCE.—If any claim filed under 

7 clause (i) is disallowed, the notice to the 

8 claimant shall contain—

9 ‘‘(I) a statement of each reason 

10 for the disallowance; and 

11 ‘‘(II) the procedures available for 

12 obtaining agency review of the deter13 mination to disallow the claim or judi14 cial determination of the claim. 

15 ‘‘(B) ALLOWANCE OF PROVEN CLAIM.—

16 The receiver shall allow any claim received on 

17 or before the date specified in the notice pub18 lished under paragraph (3)(B)(i), or the date 

19 specified in the notice required under paragraph 

20 (3)(C), which is proved to the satisfaction of 

21 the receiver. 

22 ‘‘(C) DISALLOWANCE OF CLAIMS FILED

23 AFTER END OF FILING PERIOD.—Claims filed 

24 after the date specified in the notice published 

25 under paragraph (3)(B)(i), or the date specified 
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1 under paragraph (3)(C), shall be disallowed and 

2 such disallowance shall be final. 

3 ‘‘(D) AUTHORITY TO DISALLOW CLAIMS.—

4 ‘‘(i) IN GENERAL.—The receiver may 

5 disallow any portion of any claim by a 

6 creditor or claim of security, preference, or 

7 priority which is not proved to the satisfac8 tion of the receiver. 

9 ‘‘(ii) PAYMENTS TO LESS THAN

10 FULLY SECURED CREDITORS.—In the case 

11 of a claim of a creditor against a regulated 

12 entity which is secured by any property or 

13 other asset of such regulated entity, the re14 ceiver—

15 ‘‘(I) may treat the portion of 

16 such claim which exceeds an amount 

17 equal to the fair market value of such 

18 property or other asset as an unse19 cured claim against the regulated en20 tity; and 

21 ‘‘(II) may not make any payment 

22 with respect to such unsecured por23 tion of the claim other than in connec24 tion with the disposition of all claims 
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1 of unsecured creditors of the regu2 lated entity. 

3 ‘‘(iii) EXCEPTIONS.—No provision of 

4 this paragraph shall apply with respect to 

5 any extension of credit from any Federal 

6 Reserve Bank, Federal home loan bank, or 

7 the Treasury of the United States. 

8 ‘‘(E) NO JUDICIAL REVIEW OF DETER9 MINATION PURSUANT TO SUBPARAGRAPH

10 (D).—No court may review the determination 

11 of the Agency under subparagraph (D) to dis12 allow a claim. This subparagraph shall not af13 fect the authority of a claimant to obtain de 

14 novo judicial review of a claim pursuant to 

15 paragraph (6). 

16 ‘‘(F) LEGAL EFFECT OF FILING.—

17 ‘‘(i) STATUTE OF LIMITATION

18 TOLLED.—For purposes of any applicable 

19 statute of limitations, the filing of a claim 

20 with the receiver shall constitute a com21 mencement of an action. 

22 ‘‘(ii) NO PREJUDICE TO OTHER AC23 TIONS.—Subject to paragraph (10), the fil24 ing of a claim with the receiver shall not 

25 prejudice any right of the claimant to con-
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1 tinue any action which was filed before the 

2 date of the appointment of the receiver, 

3 subject to the determination of claims by 

4 the receiver. 

5 ‘‘(6) PROVISION FOR JUDICIAL DETERMINATION

6 OF CLAIMS.—

7 ‘‘(A) IN GENERAL.—The claimant may file 

8 suit on a claim (or continue an action com9 menced before the appointment of the receiver) 

10 in the district or territorial court of the United 

11 States for the district within which the prin12 cipal place of business of the regulated entity is 

13 located or the United States District Court for 

14 the District of Columbia (and such court shall 

15 have jurisdiction to hear such claim), before the 

16 end of the 60-day period beginning on the ear17 lier of—

18 ‘‘(i) the end of the period described in 

19 paragraph (5)(A)(i) with respect to any 

20 claim against a regulated entity for which 

21 the Agency is receiver; or 

22 ‘‘(ii) the date of any notice of dis23 allowance of such claim pursuant to para24 graph (5)(A)(i). 
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1 ‘‘(B) STATUTE OF LIMITATIONS.—A claim 

2 shall be deemed to be disallowed (other than 

3 any portion of such claim which was allowed by 

4 the receiver), and such disallowance shall be 

5 final, and the claimant shall have no further 

6 rights or remedies with respect to such claim, 

7 if the claimant fails, before the end of the 60-

8 day period described under subparagraph (A), 

9 to file suit on such claim (or continue an action 

10 commenced before the appointment of the re11 ceiver). 

12 ‘‘(7) REVIEW OF CLAIMS.—

13 ‘‘(A) OTHER REVIEW PROCEDURES.—

14 ‘‘(i) IN GENERAL.—The Agency shall 

15 establish such alternative dispute resolu16 tion processes as may be appropriate for 

17 the resolution of claims filed under para18 graph (5)(A)(i). 

19 ‘‘(ii) CRITERIA.—In establishing alter20 native dispute resolution processes, the 

21 Agency shall strive for procedures which 

22 are expeditious, fair, independent, and low 

23 cost. 

24 ‘‘(iii) VOLUNTARY BINDING OR NON25 BINDING PROCEDURES.—The Agency may 
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1 establish both binding and nonbinding 

2 processes, which may be conducted by any 

3 government or private party. All parties, 

4 including the claimant and the Agency, 

5 must agree to the use of the process in a 

6 particular case. 

7 ‘‘(B) CONSIDERATION OF INCENTIVES.—

8 The Agency shall seek to develop incentives for 

9 claimants to participate in the alternative dis10 pute resolution process. 

11 ‘‘(8) EXPEDITED DETERMINATION OF

12 CLAIMS.—

13 ‘‘(A) ESTABLISHMENT REQUIRED.—The 

14 Agency shall establish a procedure for expedited 

15 relief outside of the routine claims process es16 tablished under paragraph (5) for claimants 

17 who—

18 ‘‘(i) allege the existence of legally 

19 valid and enforceable or perfected security 

20 interests in assets of any regulated entity 

21 for which the Agency has been appointed 

22 receiver; and 

23 ‘‘(ii) allege that irreparable injury will 

24 occur if the routine claims procedure is fol25 lowed. 
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1 ‘‘(B) DETERMINATION PERIOD.—Before 

2 the end of the 90-day period beginning on the 

3 date any claim is filed in accordance with the 

4 procedures established under subparagraph (A), 

5 the Director shall—

6 ‘‘(i) determine—

7 ‘‘(I) whether to allow or disallow 

8 such claim; or 

9 ‘‘(II) whether such claim should 

10 be determined pursuant to the proce11 dures established under paragraph 

12 (5); and 

13 ‘‘(ii) notify the claimant of the deter14 mination, and if the claim is disallowed, 

15 provide a statement of each reason for the 

16 disallowance and the procedure for obtain17 ing agency review or judicial determina18 tion. 

19 ‘‘(C) PERIOD FOR FILING OR RENEWING

20 SUIT.—Any claimant who files a request for ex21 pedited relief shall be permitted to file a suit, 

22 or to continue a suit filed before the appoint23 ment of the receiver, seeking a determination of 

24 the rights of the claimant with respect to such 

25 security interest after the earlier of—
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1 ‘‘(i) the end of the 90-day period be2 ginning on the date of the filing of a re3 quest for expedited relief; or 

4 ‘‘(ii) the date the Agency denies the 

5 claim. 

6 ‘‘(D) STATUTE OF LIMITATIONS.—If an 

7 action described under subparagraph (C) is not 

8 filed, or the motion to renew a previously filed 

9 suit is not made, before the end of the 30-day 

10 period beginning on the date on which such ac11 tion or motion may be filed under subparagraph 

12 (B), the claim shall be deemed to be disallowed 

13 as of the end of such period (other than any 

14 portion of such claim which was allowed by the 

15 receiver), such disallowance shall be final, and 

16 the claimant shall have no further rights or 

17 remedies with respect to such claim. 

18 ‘‘(E) LEGAL EFFECT OF FILING.—

19 ‘‘(i) STATUTE OF LIMITATION

20 TOLLED.—For purposes of any applicable 

21 statute of limitations, the filing of a claim 

22 with the receiver shall constitute a com23 mencement of an action. 

24 ‘‘(ii) NO PREJUDICE TO OTHER AC25 TIONS.—Subject to paragraph (10), the fil-
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1 ing of a claim with the receiver shall not 

2 prejudice any right of the claimant to con3 tinue any action that was filed before the 

4 appointment of the receiver, subject to the 

5 determination of claims by the receiver. 

6 ‘‘(9) PAYMENT OF CLAIMS.—

7 ‘‘(A) IN GENERAL.—The receiver may, in 

8 the discretion of the receiver, and to the extent 

9 funds are available from the assets of the regu10 lated entity, pay creditor claims, in such man11 ner and amounts as are authorized under this 

12 section, which are—

13 ‘‘(i) allowed by the receiver; 

14 ‘‘(ii) approved by the Agency pursuant 

15 to a final determination pursuant to para16 graph (7) or (8); or 

17 ‘‘(iii) determined by the final judg18 ment of any court of competent jurisdic19 tion. 

20 ‘‘(B) AGREEMENTS AGAINST THE INTER21 EST OF THE AGENCY.—No agreement that 

22 tends to diminish or defeat the interest of the 

23 Agency in any asset acquired by the Agency as 

24 receiver under this section shall be valid against 

25 the Agency unless such agreement is in writing, 
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1 and executed by an authorized official of the 

2 regulated entity, except that such requirements 

3 for qualified financial contracts shall be applied 

4 in a manner consistent with reasonable business 

5 trading practices in the financial contracts mar6 ket. 

7 ‘‘(C) PAYMENT OF DIVIDENDS ON

8 CLAIMS.—The receiver may, in the sole discre9 tion of the receiver, pay from the assets of the 

10 regulated entity dividends on proved claims at 

11 any time, and no liability shall attach to the 

12 Agency, by reason of any such payment, for 

13 failure to pay dividends to a claimant whose 

14 claim is not proved at the time of any such pay15 ment. 

16 ‘‘(D) RULEMAKING AUTHORITY OF THE

17 DIRECTOR.—The Director may prescribe such 

18 rules, including definitions of terms, as the Di19 rector deems appropriate to establish a single 

20 uniform interest rate for, or to make payments 

21 of post-insolvency interest to creditors holding 

22 proven claims against the receivership estates of 

23 regulated entities following satisfaction by the 

24 receiver of the principal amount of all creditor 

25 claims. 
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1 ‘‘(10) SUSPENSION OF LEGAL ACTIONS.—

2 ‘‘(A) IN GENERAL.—After the appointment 

3 of a conservator or receiver for a regulated enti4 ty, the conservator or receiver may, in any judi5 cial action or proceeding to which such regu6 lated entity is or becomes a party, request a 

7 stay for a period not to exceed—

8 ‘‘(i) 45 days, in the case of any con9 servator; and 

10 ‘‘(ii) 90 days, in the case of any re11 ceiver. 

12 ‘‘(B) GRANT OF STAY BY ALL COURTS RE13 QUIRED.—Upon receipt of a request by any 

14 conservator or receiver under subparagraph (A) 

15 for a stay of any judicial action or proceeding 

16 in any court with jurisdiction of such action or 

17 proceeding, the court shall grant such stay as 

18 to all parties. 

19 ‘‘(11) ADDITIONAL RIGHTS AND DUTIES.—

20 ‘‘(A) PRIOR FINAL ADJUDICATION.—The 

21 Agency shall abide by any final unappealable 

22 judgment of any court of competent jurisdiction 

23 which was rendered before the appointment of 

24 the Agency as conservator or receiver. 
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1 ‘‘(B) RIGHTS AND REMEDIES OF CONSER2 VATOR OR RECEIVER.—In the event of any ap3 pealable judgment, the Agency as conservator 

4 or receiver shall—

5 ‘‘(i) have all the rights and remedies 

6 available to the regulated entity (before the 

7 appointment of such conservator or re8 ceiver) and the Agency, including removal 

9 to Federal court and all appellate rights; 

10 and 

11 ‘‘(ii) not be required to post any bond 

12 in order to pursue such remedies. 

13 ‘‘(C) NO ATTACHMENT OR EXECUTION.—

14 No attachment or execution may issue by any 

15 court upon assets in the possession of the re16 ceiver. 

17 ‘‘(D) LIMITATION ON JUDICIAL REVIEW.—

18 Except as otherwise provided in this subsection, 

19 no court shall have jurisdiction over—

20 ‘‘(i) any claim or action for payment 

21 from, or any action seeking a determina22 tion of rights with respect to, the assets of 

23 any regulated entity for which the Agency 

24 has been appointed receiver; or 
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1 ‘‘(ii) any claim relating to any act or 

2 omission of such regulated entity or the 

3 Agency as receiver. 

4 ‘‘(E) DISPOSITION OF ASSETS.—In exer5 cising any right, power, privilege, or authority 

6 as conservator or receiver in connection with 

7 any sale or disposition of assets of a regulated 

8 entity for which the Agency has been appointed 

9 conservator or receiver, the Agency shall con10 duct its operations in a manner which main11 tains stability in the housing finance markets 

12 and, to the extent consistent with that goal—

13 ‘‘(i) maximizes the net present value 

14 return from the sale or disposition of such 

15 assets; 

16 ‘‘(ii) minimizes the amount of any loss 

17 realized in the resolution of cases; and 

18 ‘‘(iii) ensures adequate competition 

19 and fair and consistent treatment of 

20 offerors. 

21 ‘‘(12) STATUTE OF LIMITATIONS FOR ACTIONS

22 BROUGHT BY CONSERVATOR OR RECEIVER.—

23 ‘‘(A) IN GENERAL.—Notwithstanding any 

24 provision of any contract, the applicable statute 

25 of limitations with regard to any action brought 
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1 by the Agency as conservator or receiver shall 

2 be—

3 ‘‘(i) in the case of any contract claim, 

4 the longer of—

5 ‘‘(I) the 6-year period beginning 

6 on the date the claim accrues; or 

7 ‘‘(II) the period applicable under 

8 State law; and 

9 ‘‘(ii) in the case of any tort claim, the 

10 longer of—

11 ‘‘(I) the 3-year period beginning 

12 on the date the claim accrues; or 

13 ‘‘(II) the period applicable under 

14 State law. 

15 ‘‘(B) DETERMINATION OF THE DATE ON

16 WHICH A CLAIM ACCRUES.—For purposes of 

17 subparagraph (A), the date on which the stat18 ute of limitations begins to run on any claim 

19 described in such subparagraph shall be the 

20 later of—

21 ‘‘(i) the date of the appointment of 

22 the Agency as conservator or receiver; or 

23 ‘‘(ii) the date on which the cause of 

24 action accrues. 
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1 ‘‘(13) REVIVAL OF EXPIRED STATE CAUSES OF

2 ACTION.—

3 ‘‘(A) IN GENERAL.—In the case of any tort 

4 claim described under subparagraph (B) for 

5 which the statute of limitations applicable 

6 under State law with respect to such claim has 

7 expired not more than 5 years before the ap8 pointment of the Agency as conservator or re9 ceiver, the Agency may bring an action as con10 servator or receiver on such claim without re11 gard to the expiration of the statute of limita12 tion applicable under State law. 

13 ‘‘(B) CLAIMS DESCRIBED.—A tort claim 

14 referred to under subparagraph (A) is a claim 

15 arising from fraud, intentional misconduct re16 sulting in unjust enrichment, or intentional mis17 conduct resulting in substantial loss to the reg18 ulated entity. 

19 ‘‘(14) ACCOUNTING AND RECORDKEEPING RE20 QUIREMENTS.—

21 ‘‘(A) IN GENERAL.—The Agency as conser22 vator or receiver shall, consistent with the ac23 counting and reporting practices and proce24 dures established by the Agency, maintain a full 

25 accounting of each conservatorship and receiv-
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1 ership or other disposition of a regulated entity 

2 in default. 

3 ‘‘(B) ANNUAL ACCOUNTING OR REPORT.—

4 With respect to each conservatorship or receiv5 ership, the Agency shall make an annual ac6 counting or report available to the Board, the 

7 Comptroller General of the United States, the 

8 Committee on Banking, Housing, and Urban 

9 Affairs of the Senate, and the Committee on 

10 Financial Services of the House of Representa11 tives. 

12 ‘‘(C) AVAILABILITY OF REPORTS.—Any re13 port prepared under subparagraph (B) shall be 

14 made available by the Agency upon request to 

15 any shareholder of a regulated entity or any 

16 member of the public. 

17 ‘‘(D) RECORDKEEPING REQUIREMENT.—

18 After the end of the 6-year period beginning on 

19 the date that the conservatorship or receiver20 ship is terminated by the Director, the Agency 

21 may destroy any records of such regulated enti22 ty which the Agency, in the discretion of the 

23 Agency, determines to be unnecessary unless di24 rected not to do so by a court of competent ju-
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1 risdiction or governmental agency, or prohibited 

2 by law. 

3 ‘‘(15) FRAUDULENT TRANSFERS.—

4 ‘‘(A) IN GENERAL.—The Agency, as con5 servator or receiver, may avoid a transfer of 

6 any interest of a regulated entity-affiliated 

7 party, or any person who the conservator or re8 ceiver determines is a debtor of the regulated 

9 entity, in property, or any obligation incurred 

10 by such party or person, that was made within 

11 5 years of the date on which the Agency was 

12 appointed conservator or receiver, if such party 

13 or person voluntarily or involuntarily made such 

14 transfer or incurred such liability with the in15 tent to hinder, delay, or defraud the regulated 

16 entity, the Agency, the conservator, or receiver. 

17 ‘‘(B) RIGHT OF RECOVERY.—To the extent 

18 a transfer is avoided under subparagraph (A), 

19 the conservator or receiver may recover, for the 

20 benefit of the regulated entity, the property 

21 transferred, or, if a court so orders, the value 

22 of such property (at the time of such transfer) 

23 from—

24 ‘‘(i) the initial transferee of such 

25 transfer or the regulated entity-affiliated 
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1 party or person for whose benefit such 

2 transfer was made; or 

3 ‘‘(ii) any immediate or mediate trans4 feree of any such initial transferee. 

5 ‘‘(C) RIGHTS OF TRANSFEREE OR OBLI6 GEE.—The conservator or receiver may not re7 cover under subparagraph (B) from—

8 ‘‘(i) any transferee that takes for 

9 value, including satisfaction or securing of 

10 a present or antecedent debt, in good faith; 

11 or 

12 ‘‘(ii) any immediate or mediate good 

13 faith transferee of such transferee. 

14 ‘‘(D) RIGHTS UNDER THIS PARAGRAPH.—

15 The rights under this paragraph of the conser16 vator or receiver described under subparagraph 

17 (A) shall be superior to any rights of a trustee 

18 or any other party (other than any party which 

19 is a Federal agency) under title 11, United 

20 States Code. 

21 ‘‘(16) ATTACHMENT OF ASSETS AND OTHER IN22 JUNCTIVE RELIEF.—Subject to paragraph (17), any 

23 court of competent jurisdiction may, at the request 

24 of the conservator or receiver, issue an order in ac25 cordance with Rule 65 of the Federal Rules of Civil 
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1 Procedure, including an order placing the assets of 

2 any person designated by the Agency or such conser3 vator under the control of the court, and appointing 

4 a trustee to hold such assets. 

5 ‘‘(17) STANDARDS OF PROOF.—Rule 65 of the 

6 Federal Rules of Civil Procedure shall apply with re7 spect to any proceeding under paragraph (16) with8 out regard to the requirement of such rule that the 

9 applicant show that the injury, loss, or damage is ir10 reparable and immediate. 

11 ‘‘(18) TREATMENT OF CLAIMS ARISING FROM

12 BREACH OF CONTRACTS EXECUTED BY THE RE13 CEIVER OR CONSERVATOR.—

14 ‘‘(A) IN GENERAL.—Notwithstanding any 

15 other provision of this subsection, any final and 

16 unappealable judgment for monetary damages 

17 entered against a receiver or conservator for the 

18 breach of an agreement executed or approved in 

19 writing by such receiver or conservator after the 

20 date of its appointment, shall be paid as an ad21 ministrative expense of the receiver or conser22 vator. 

23 ‘‘(B) NO LIMITATION OF POWER.—Nothing 

24 in this paragraph shall be construed to limit the 

25 power of a receiver or conservator to exercise 
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1 any rights under contract or law, including to 

2 terminate, breach, cancel, or otherwise dis3 continue such agreement. 

4 ‘‘(19) GENERAL EXCEPTIONS.—

5 ‘‘(A) LIMITATIONS.—The rights of a con6 servator or receiver appointed under this section 

7 shall be subject to the limitations on the powers 

8 of a receiver under sections 402 through 407 of 

9 the Federal Deposit Insurance Corporation Im10 provement Act of 1991 (12 U.S.C. 4402 

11 through 4407). 

12 ‘‘(B) MORTGAGES HELD IN TRUST.—

13 ‘‘(i) IN GENERAL.—Any mortgage, 

14 pool of mortgages, or interest in a pool of 

15 mortgages, held in trust, custodial, or 

16 agency capacity by a regulated entity for 

17 the benefit of persons other than the regu18 lated entity shall not be available to satisfy 

19 the claims of creditors generally. 

20 ‘‘(ii) HOLDING OF MORTGAGES.—Any 

21 mortgage, pool of mortgages, or interest in 

22 a pool of mortgages, described under 

23 clause (i) shall be held by the conservator 

24 or receiver appointed under this section for 

25 the beneficial owners of such mortgage, 
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1 pool of mortgages, or interest in a pool of 

2 mortgages in accordance with the terms of 

3 the agreement creating such trust, custo4 dial, or other agency arrangement. 

5 ‘‘(iii) LIABILITY OF RECEIVER.—The 

6 liability of a receiver appointed under this 

7 section for damages shall, in the case of 

8 any contingent or unliquidated claim relat9 ing to the mortgages held in trust, be esti10 mated in accordance set forth in the regu11 lations of the Director. 

12 ‘‘(c) PRIORITY OF EXPENSES AND UNSECURED

13 CLAIMS.—

14 ‘‘(1) IN GENERAL.—Unsecured claims against a 

15 regulated entity, or a receiver, that are proven to the 

16 satisfaction of the receiver shall have priority in the 

17 following order: 

18 ‘‘(A) Administrative expenses of the re19 ceiver. 

20 ‘‘(B) Any other general or senior liability 

21 of the regulated entity and claims of other Fed22 eral home loan banks arising from their pay23 ment obligations (including joint and several 

24 payment obligations). 
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1 ‘‘(C) Any obligation subordinated to gen2 eral creditors. 

3 ‘‘(D) Any obligation to shareholders or 

4 members arising as a result of their status as 

5 shareholder or members. 

6 ‘‘(2) CREDITORS SIMILARLY SITUATED.—All 

7 creditors that are similarly situated under paragraph 

8 (1) shall be treated in a similar manner, except that 

9 the Agency may make such other payments to credi10 tors necessary to maximize the present value return 

11 from the sale or disposition or such regulated enti12 ty’s assets or to minimize the amount of any loss re13 alized in the resolution of cases so long as all credi14 tors similarly situated receive not less than the 

15 amount provided under subsection (e)(2). 

16 ‘‘(3) DEFINITION.—The term ‘administrative 

17 expenses of the receiver’ shall include the actual, 

18 necessary costs and expenses incurred by the re19 ceiver in preserving the assets of the regulated entity 

20 or liquidating or otherwise resolving the affairs of 

21 the regulated entity. Such expenses shall include ob22 ligations that are incurred by the receiver after ap23 pointment as receiver that the Director determines 

24 are necessary and appropriate to facilitate the 
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1 smooth and orderly liquidation or other resolution of 

2 the regulated entity. 

3 ‘‘(d) PROVISIONS RELATING TO CONTRACTS EN4 TERED INTO BEFORE APPOINTMENT OF CONSERVATOR

5 OR RECEIVER.—

6 ‘‘(1) AUTHORITY TO REPUDIATE CONTRACTS.—

7 In addition to any other rights a conservator or re8 ceiver may have, the conservator or receiver for any 

9 regulated entity may disaffirm or repudiate any con10 tract or lease—

11 ‘‘(A) to which such regulated entity is a 

12 party; 

13 ‘‘(B) the performance of which the conser14 vator or receiver, in its sole discretion, deter15 mines to be burdensome; and 

16 ‘‘(C) the disaffirmance or repudiation of 

17 which the conservator or receiver determines, in 

18 its sole discretion, will promote the orderly ad19 ministration of the affairs of the regulated enti20 ty. 

21 ‘‘(2) TIMING OF REPUDIATION.—The conser22 vator or receiver shall determine whether or not to 

23 exercise the rights of repudiation under this sub24 section within a reasonable period following such ap25 pointment. 
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1 ‘‘(3) CLAIMS FOR DAMAGES FOR REPUDI2 ATION.—

3 ‘‘(A) IN GENERAL.—Except as otherwise 

4 provided under subparagraph (C) and para5 graphs (4), (5), and (6), the liability of the con6 servator or receiver for the disaffirmance or re7 pudiation of any contract pursuant to para8 graph (1) shall be—

9 ‘‘(i) limited to actual direct compen10 satory damages; and 

11 ‘‘(ii) determined as of—

12 ‘‘(I) the date of the appointment 

13 of the conservator or receiver; or 

14 ‘‘(II) in the case of any contract 

15 or agreement referred to in paragraph 

16 (8), the date of the disaffirmance or 

17 repudiation of such contract or agree18 ment. 

19 ‘‘(B) NO LIABILITY FOR OTHER DAM20 AGES.—For purposes of subparagraph (A), the 

21 term ‘actual direct compensatory damages’ shall 

22 not include—

23 ‘‘(i) punitive or exemplary damages; 

24 ‘‘(ii) damages for lost profits or op25 portunity; or 
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1 ‘‘(iii) damages for pain and suffering. 

2 ‘‘(C) MEASURE OF DAMAGES FOR REPUDI3 ATION OF FINANCIAL CONTRACTS.—In the case 

4 of any qualified financial contract or agreement 

5 to which paragraph (8) applies, compensatory 

6 damages shall be—

7 ‘‘(i) deemed to include normal and 

8 reasonable costs of cover or other reason9 able measures of damages utilized in the 

10 industries for such contract and agreement 

11 claims; and 

12 ‘‘(ii) paid in accordance with this sub13 section and subsection (e), except as other14 wise specifically provided in this section. 

15 ‘‘(4) LEASES UNDER WHICH THE REGULATED

16 ENTITY IS THE LESSEE.—

17 ‘‘(A) IN GENERAL.—If the conservator or 

18 receiver disaffirms or repudiates a lease under 

19 which the regulated entity was the lessee, the 

20 conservator or receiver shall not be liable for 

21 any damages (other than damages determined 

22 under subparagraph (B)) for the disaffirmance 

23 or repudiation of such lease. 

24 ‘‘(B) PAYMENTS OF RENT.—Notwith25 standing subparagraph (A), the lessor under a 
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1 lease to which that subparagraph applies 

2 shall—

3 ‘‘(i) be entitled to the contractual rent 

4 accruing before the later of the date—

5 ‘‘(I) the notice of disaffirmance 

6 or repudiation is mailed; or 

7 ‘‘(II) the disaffirmance or repudi8 ation becomes effective, unless the les9 sor is in default or breach of the 

10 terms of the lease; 

11 ‘‘(ii) have no claim for damages under 

12 any acceleration clause or other penalty 

13 provision in the lease; and 

14 ‘‘(iii) have a claim for any unpaid 

15 rent, subject to all appropriate offsets and 

16 defenses, due as of the date of the appoint17 ment, which shall be paid in accordance 

18 with this subsection and subsection (e). 

19 ‘‘(5) LEASES UNDER WHICH THE REGULATED

20 ENTITY IS THE LESSOR.—

21 ‘‘(A) IN GENERAL.—If the conservator or 

22 receiver repudiates an unexpired written lease 

23 of real property of the regulated entity under 

24 which the regulated entity is the lessor and the 

25 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 such subparagraph—

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 such subparagraph—
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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) PROVISIONS APPLICABLE TO SERVICE CON17 TRACTS.—

18 ‘‘(A) SERVICES PERFORMED BEFORE AP19 POINTMENT.—In the case of any contract for 

20 services between any person and any regulated 

21 entity for which the Agency has been appointed 

22 conservator or receiver, any claim of such per23 son for services performed before the appoint24 ment of the conservator or the receiver shall 

25 be—
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1 ‘‘(i) a claim to be paid in accordance 

2 with subsections (b) and (e); and 

3 ‘‘(ii) deemed to have arisen as of the 

4 date the conservator or receiver was ap5 pointed. 

6 ‘‘(B) SERVICES PERFORMED AFTER AP7 POINTMENT AND PRIOR TO REPUDIATION.—If, 

8 in the case of any contract for services de9 scribed under subparagraph (A), the conser10 vator or receiver accepts performance by the 

11 other person before the conservator or receiver 

12 makes any determination to exercise the right 

13 of repudiation of such contract under this sec14 tion—

15 ‘‘(i) the other party shall be paid 

16 under the terms of the contract for the 

17 services performed; and 

18 ‘‘(ii) the amount of such payment 

19 shall be treated as an administrative ex20 pense of the conservatorship or receiver21 ship. 

22 ‘‘(C) ACCEPTANCE OF PERFORMANCE NO

23 BAR TO SUBSEQUENT REPUDIATION.—The ac24 ceptance by any conservator or receiver of serv25 ices referred to under subparagraph (B) in con-
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1 nection with a contract described in such sub2 paragraph shall not affect the right of the con3 servator or receiver to repudiate such contract 

4 under this section at any time after such per5 formance. 

6 ‘‘(8) CERTAIN QUALIFIED FINANCIAL CON7 TRACTS.—

8 ‘‘(A) RIGHTS OF PARTIES TO CON9 TRACTS.—Subject to paragraphs (9) and (10) 

10 and notwithstanding any other provision of this 

11 Act, any other Federal law, or the law of any 

12 State, no person shall be stayed or prohibited 

13 from exercising—

14 ‘‘(i) any right such person has to 

15 cause the termination, liquidation, or accel16 eration of any qualified financial contract 

17 with a regulated entity that arises upon 

18 the appointment of the Agency as receiver 

19 for such regulated entity at any time after 

20 such appointment; 

21 ‘‘(ii) any right under any security 

22 agreement or arrangement or other credit 

23 enhancement relating to one or more quali24 fied financial contracts described in clause 

25 (i); or 
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1 ‘‘(iii) any right to offset or net out 

2 any termination value, payment amount, or 

3 other transfer obligation arising under or 

4 in connection with 1 or more contracts and 

5 agreements described in clause (i), includ6 ing any master agreement for such con7 tracts or agreements. 

8 ‘‘(B) APPLICABILITY OF OTHER PROVI9 SIONS.—Paragraph (10) of subsection (b) shall 

10 apply in the case of any judicial action or pro11 ceeding brought against any receiver referred to 

12 under subparagraph (A), or the regulated entity 

13 for which such receiver was appointed, by any 

14 party to a contract or agreement described 

15 under subparagraph (A)(i) with such regulated 

16 entity. 

17 ‘‘(C) CERTAIN TRANSFERS NOT AVOID18 ABLE.—

19 ‘‘(i) IN GENERAL.—Notwithstanding 

20 paragraph (11) or any other Federal or 

21 State laws relating to the avoidance of 

22 preferential or fraudulent transfers, the 

23 Agency, whether acting as such or as con24 servator or receiver of a regulated entity, 

25 may not avoid any transfer of money or 
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1 other property in connection with any 

2 qualified financial contract with a regu3 lated entity. 

4 ‘‘(ii) EXCEPTION FOR CERTAIN

5 TRANSFERS.—Clause (i) shall not apply to 

6 any transfer of money or other property in 

7 connection with any qualified financial con8 tract with a regulated entity if the Agency 

9 determines that the transferee had actual 

10 intent to hinder, delay, or defraud such 

11 regulated entity, the creditors of such reg12 ulated entity, or any conservator or re13 ceiver appointed for such regulated entity. 

14 ‘‘(D) CERTAIN CONTRACTS AND AGREE15 MENTS DEFINED.—In this subsection: 

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 the contract is entered 

7 into, including, a repurchase trans8 action, reverse repurchase transaction, 

9 consignment, lease, swap, hedge 

10 transaction, deposit, loan, option, allo11 cated transaction, unallocated trans12 action, or any other similar agree13 ment; 

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’ (which defini21 tion also applies to a reverse repurchase 

22 agreement)—

23 ‘‘(I) means an agreement, includ24 ing related terms, which provides for 

25 the transfer of one or more certifi-
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1 cates of deposit, mortgage-related se2 curities (as such term is defined in 

3 the Securities Exchange Act of 1934), 

4 mortgage loans, interests in mortgage5 related securities or mortgage loans, 

6 eligible bankers’ acceptances, qualified 

7 foreign government securities or secu8 rities that are direct obligations of, or 

9 that are fully guaranteed by, the 

10 United States or any agency of the 

11 United States against the transfer of 

12 funds by the transferee of such certifi13 cates of deposit, eligible bankers’ ac14 ceptances, securities, mortgage loans, 

15 or interests with a simultaneous 

16 agreement by such transferee to 

17 transfer to the transferor thereof cer18 tificates of deposit, eligible bankers’ 

19 acceptances, securities, mortgage 

20 loans, or interests as described above, 

21 at a date certain not later than 1 year 

22 after such transfers or on demand, 

23 against the transfer of funds, or any 

24 other similar agreement; 
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1 ‘‘(II) does not include any repur2 chase obligation under a participation 

3 in a commercial mortgage loan unless 

4 the Agency determines by regulation, 

5 resolution, or order to include any 

6 such participation within the meaning 

7 of such term; 

8 ‘‘(III) means any combination of 

9 agreements or transactions referred to 

10 in subclauses (I) and (IV); 

11 ‘‘(IV) means any option to enter 

12 into any agreement or transaction re13 ferred to in subclause (I) or (III); 

14 ‘‘(V) means a master agreement 

15 that provides for an agreement or 

16 transaction referred to in subclause 

17 (I), (III), or (IV), together with all 

18 supplements to any such master 

19 agreement, without regard to whether 

20 the master agreement provides for an 

21 agreement or transaction that is not a 

22 repurchase agreement under this 

23 clause, except that the master agree24 ment shall be considered to be a re25 purchase agreement under this sub-
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1 clause only with respect to each agree2 ment or transaction under the master 

3 agreement that is referred to in sub4 clause (I), (III), or (IV); and 

5 ‘‘(VI) means any security agree6 ment or arrangement or other credit 

7 enhancement related to any agree8 ment or transaction referred to in 

9 subclause (I), (III), (IV), or (V), in10 cluding any guarantee or reimburse11 ment obligation in connection with 

12 any agreement or transaction referred 

13 to in any such subclause. 

14 For purposes of this clause, the term 

15 ‘qualified foreign government security’ 

16 means a security that is a direct obligation 

17 of, or that is fully guaranteed by, the cen18 tral government of a member of the Orga19 nization for Economic Cooperation and 

20 Development (as determined by regulation 

21 or order adopted by the appropriate Fed22 eral banking authority). 

23 ‘‘(vi) SWAP AGREEMENT.—The term 

24 ‘swap agreement’ means—
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1 ‘‘(I) any agreement, including the 

2 terms and conditions incorporated by 

3 reference in any such agreement, 

4 which is an interest rate swap, option, 

5 future, or forward agreement, includ6 ing a rate floor, rate cap, rate collar, 

7 cross-currency rate swap, and basis 

8 swap; a spot, same day-tomorrow, to9 morrow-next, forward, or other for10 eign exchange or precious metals 

11 agreement; a currency swap, option, 

12 future, or forward agreement; an eq13 uity index or equity swap, option, fu14 ture, or forward agreement; a debt 

15 index or debt swap, option, future, or 

16 forward agreement; a total return, 

17 credit spread or credit swap, option, 

18 future, or forward agreement; a com19 modity index or commodity swap, op20 tion, future, or forward agreement; or 

21 a weather swap, weather derivative, or 

22 weather option; 

23 ‘‘(II) any agreement or trans24 action that is similar to any other 

25 agreement or transaction referred to 
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1 in this clause and that is of a type 

2 that has been, is presently, or in the 

3 future becomes, the subject of recur4 rent dealings in the swap markets (in5 cluding terms and conditions incor6 porated by reference in such agree7 ment) and that is a forward, swap, fu8 ture, or option on one or more rates, 

9 currencies, commodities, equity securi10 ties or other equity instruments, debt 

11 securities or other debt instruments, 

12 quantitative measures associated with 

13 an occurrence, extent of an occur14 rence, or contingency associated with 

15 a financial, commercial, or economic 

16 consequence, or economic or financial 

17 indices or measures of economic or fi18 nancial risk or value; 

19 ‘‘(III) any combination of agree20 ments or transactions referred to in 

21 this clause; 

22 ‘‘(IV) any option to enter into 

23 any agreement or transaction referred 

24 to in this clause; 
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1 ‘‘(V) a master agreement that 

2 provides for an agreement or trans3 action referred to in subclause (I), 

4 (II), (III), or (IV), together with all 

5 supplements to any such master 

6 agreement, without regard to whether 

7 the master agreement contains an 

8 agreement or transaction that is not a 

9 swap agreement under this clause, ex10 cept that the master agreement shall 

11 be considered to be a swap agreement 

12 under this clause only with respect to 

13 each agreement or transaction under 

14 the master agreement that is referred 

15 to in subclause (I), (II), (III), or (IV); 

16 and 

17 ‘‘(VI) any security agreement or 

18 arrangement or other credit enhance19 ment related to any agreements or 

20 transactions referred to in subclause 

21 (I), (II), (III), (IV), or (V), including 

22 any guarantee or reimbursement obli23 gation in connection with any agree24 ment or transaction referred to in any 

25 such subclause. 
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1 Such term is applicable for purposes of 

2 this subsection only and shall not be con3 strued or applied so as to challenge or af4 fect the characterization, definition, or 

5 treatment of any swap agreement under 

6 any other statute, regulation, or rule, in7 cluding the Securities Act of 1933, the Se8 curities Exchange Act of 1934, the Public 

9 Utility Holding Company Act of 1935, the 

10 Trust Indenture Act of 1939, the Invest11 ment Company Act of 1940, the Invest12 ment Advisers Act of 1940, the Securities 

13 Investor Protection Act of 1970, the Com14 modity Exchange Act, the Gramm-Leach15 Bliley Act, and the Legal Certainty for 

16 Bank Products Act of 2000. 

17 ‘‘(vii) TREATMENT OF MASTER

18 AGREEMENT AS ONE AGREEMENT.—Any 

19 master agreement for any contract or 

20 agreement described in any preceding 

21 clause of this subparagraph (or any master 

22 agreement for such master agreement or 

23 agreements), together with all supplements 

24 to such master agreement, shall be treated 

25 as a single agreement and a single quali-
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1 fied financial contract. If a master agree2 ment contains provisions relating to agree3 ments or transactions that are not them4 selves qualified financial contracts, the 

5 master agreement shall be deemed to be a 

6 qualified financial contract only with re7 spect to those transactions that are them8 selves qualified financial contracts. 

9 ‘‘(viii) TRANSFER.—The term ‘trans10 fer’ means every mode, direct or indirect, 

11 absolute or conditional, voluntary or invol12 untary, of disposing of or parting with 

13 property or with an interest in property, 

14 including retention of title as a security in15 terest and foreclosure of the regulated en16 tity’s equity of redemption. 

17 ‘‘(E) CERTAIN PROTECTIONS IN EVENT OF

18 APPOINTMENT OF CONSERVATOR.—Notwith19 standing any other provision of this Act (other 

20 than paragraph (13) of this subsection), any 

21 other Federal law, or the law of any State, no 

22 person shall be stayed or prohibited from exer23 cising—

24 ‘‘(i) any right such person has to 

25 cause the termination, liquidation, or accel-
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1 eration of any qualified financial contract 

2 with a regulated entity in a conservator3 ship based upon a default under such fi4 nancial contract which is enforceable under 

5 applicable noninsolvency law; 

6 ‘‘(ii) any right under any security 

7 agreement or arrangement or other credit 

8 enhancement relating to one or more such 

9 qualified financial contracts; or 

10 ‘‘(iii) any right to offset or net out 

11 any termination values, payment amounts, 

12 or other transfer obligations arising under 

13 or in connection with such qualified finan14 cial contracts. 

15 ‘‘(F) CLARIFICATION.—No provision of law 

16 shall be construed as limiting the right or 

17 power of the Agency, or authorizing any court 

18 or agency to limit or delay, in any manner, the 

19 right or power of the Agency to transfer any 

20 qualified financial contract in accordance with 

21 paragraphs (9) and (10) of this subsection or to 

22 disaffirm or repudiate any such contract in ac23 cordance with subsection (d)(1) of this section. 

24 ‘‘(G) WALKAWAY CLAUSES NOT EFFEC25 TIVE.—
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1 ‘‘(i) IN GENERAL.—Notwithstanding 

2 the provisions of subparagraphs (A) and 

3 (E), and sections 403 and 404 of the Fed4 eral Deposit Insurance Corporation Im5 provement Act of 1991, no walkaway 

6 clause shall be enforceable in a qualified fi7 nancial contract of a regulated entity in 

8 default. 

9 ‘‘(ii) WALKAWAY CLAUSE DEFINED.—

10 For purposes of this subparagraph, the 

11 term ‘walkaway clause’ means a provision 

12 in a qualified financial contract that, after 

13 calculation of a value of a party’s position 

14 or an amount due to or from 1 of the par15 ties in accordance with its terms upon ter16 mination, liquidation, or acceleration of the 

17 qualified financial contract, either does not 

18 create a payment obligation of a party or 

19 extinguishes a payment obligation of a 

20 party in whole or in part solely because of 

21 such party’s status as a nondefaulting 

22 party. 

23 ‘‘(9) TRANSFER OF QUALIFIED FINANCIAL CON24 TRACTS.—In making any transfer of assets or liabil25 ities of a regulated entity in default which includes 
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•HR 1427 EH

1 any qualified financial contract, the conservator or 

2 receiver for such regulated entity shall either—

3 ‘‘(A) transfer to 1 person—

4 ‘‘(i) all qualified financial contracts 

5 between any person (or any affiliate of 

6 such person) and the regulated entity in 

7 default; 

8 ‘‘(ii) all claims of such person (or any 

9 affiliate of such person) against such regu10 lated entity under any such contract (other 

11 than any claim which, under the terms of 

12 any such contract, is subordinated to the 

13 claims of general unsecured creditors of 

14 such regulated entity); 

15 ‘‘(iii) all claims of such regulated enti16 ty against such person (or any affiliate of 

17 such person) under any such contract; and 

18 ‘‘(iv) all property securing or any 

19 other credit enhancement for any contract 

20 described in clause (i) or any claim de21 scribed in clause (ii) or (iii) under any 

22 such contract; or 

23 ‘‘(B) transfer none of the financial con24 tracts, claims, or property referred to under 
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•HR 1427 EH

1 subparagraph (A) (with respect to such person 

2 and any affiliate of such person). 

3 ‘‘(10) NOTIFICATION OF TRANSFER.—

4 ‘‘(A) IN GENERAL.—If—

5 ‘‘(i) the conservator or receiver for a 

6 regulated entity in default makes any 

7 transfer of the assets and liabilities of such 

8 regulated entity, and 

9 ‘‘(ii) the transfer includes any quali10 fied financial contract, 

11 the conservator or receiver shall notify any per12 son who is a party to any such contract of such 

13 transfer by 5:00 p.m. (eastern time) on the 

14 business day following the date of the appoint15 ment of the receiver in the case of a receiver16 ship, or the business day following such trans17 fer in the case of a conservatorship. 

18 ‘‘(B) CERTAIN RIGHTS NOT ENFORCE19 ABLE.—

20 ‘‘(i) RECEIVERSHIP.—A person who is 

21 a party to a qualified financial contract 

22 with a regulated entity may not exercise 

23 any right that such person has to termi24 nate, liquidate, or net such contract under 

25 paragraph (8)(A) of this subsection or sec-
252

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1 tion 403 or 404 of the Federal Deposit In2 surance Corporation Improvement Act of 

3 1991, solely by reason of or incidental to 

4 the appointment of a receiver for the regu5 lated entity (or the insolvency or financial 

6 condition of the regulated entity for which 

7 the receiver has been appointed)—

8 ‘‘(I) until 5:00 p.m. (eastern 

9 time) on the business day following 

10 the date of the appointment of the re11 ceiver; or 

12 ‘‘(II) after the person has re13 ceived notice that the contract has 

14 been transferred pursuant to para15 graph (9)(A). 

16 ‘‘(ii) CONSERVATORSHIP.—A person 

17 who is a party to a qualified financial con18 tract with a regulated entity may not exer19 cise any right that such person has to ter20 minate, liquidate, or net such contract 

21 under paragraph (8)(E) of this subsection 

22 or section 403 or 404 of the Federal De23 posit Insurance Corporation Improvement 

24 Act of 1991, solely by reason of or inci25 dental to the appointment of a conservator 
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1 for the regulated entity (or the insolvency 

2 or financial condition of the regulated enti3 ty for which the conservator has been ap4 pointed). 

5 ‘‘(iii) NOTICE.—For purposes of this 

6 paragraph, the Agency as receiver or con7 servator of a regulated entity shall be 

8 deemed to have notified a person who is a 

9 party to a qualified financial contract with 

10 such regulated entity if the Agency has 

11 taken steps reasonably calculated to pro12 vide notice to such person by the time 

13 specified in subparagraph (A). 

14 ‘‘(C) BUSINESS DAY DEFINED.—For pur15 poses of this paragraph, the term ‘business day’ 

16 means any day other than any Saturday, Sun17 day, or any day on which either the New York 

18 Stock Exchange or the Federal Reserve Bank 

19 of New York is closed. 

20 ‘‘(11) DISAFFIRMANCE OR REPUDIATION OF

21 QUALIFIED FINANCIAL CONTRACTS.—In exercising 

22 the rights of disaffirmance or repudiation of a con23 servator or receiver with respect to any qualified fi24 nancial contract to which a regulated entity is a 
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•HR 1427 EH

1 party, the conservator or receiver for such institution 

2 shall either—

3 ‘‘(A) disaffirm or repudiate all qualified fi4 nancial contracts between—

5 ‘‘(i) any person or any affiliate of 

6 such person; and 

7 ‘‘(ii) the regulated entity in default; or 

8 ‘‘(B) disaffirm or repudiate none of the 

9 qualified financial contracts referred to in sub10 paragraph (A) (with respect to such person or 

11 any affiliate of such person). 

12 ‘‘(12) CERTAIN SECURITY INTERESTS NOT

13 AVOIDABLE.—No provision of this subsection shall 

14 be construed as permitting the avoidance of any le15 gally enforceable or perfected security interest in any 

16 of the assets of any regulated entity, except where 

17 such an interest is taken in contemplation of the in18 solvency of the regulated entity, or with the intent 

19 to hinder, delay, or defraud the regulated entity or 

20 the creditors of such regulated entity. 

21 ‘‘(13) AUTHORITY TO ENFORCE CONTRACTS.—

22 ‘‘(A) IN GENERAL.—Notwithstanding any 

23 provision of a contract providing for termi24 nation, default, acceleration, or exercise of 

25 rights upon, or solely by reason of, insolvency 
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1 or the appointment of a conservator or receiver, 

2 the conservator or receiver may enforce any 

3 contract or regulated entity bond entered into 

4 by the regulated entity. 

5 ‘‘(B) CERTAIN RIGHTS NOT AFFECTED.—

6 No provision of this paragraph may be con7 strued as impairing or affecting any right of the 

8 conservator or receiver to enforce or recover 

9 under a director’s or officer’s liability insurance 

10 contract or surety bond under other applicable 

11 law. 

12 ‘‘(C) CONSENT REQUIREMENT.—

13 ‘‘(i) IN GENERAL.—Except as other14 wise provided under this section, no person 

15 may exercise any right or power to termi16 nate, accelerate, or declare a default under 

17 any contract to which a regulated entity is 

18 a party, or to obtain possession of or exer19 cise control over any property of the regu20 lated entity, or affect any contractual 

21 rights of the regulated entity, without the 

22 consent of the conservator or receiver, as 

23 appropriate, for a period of—

24 ‘‘(I) 45 days after the date of ap25 pointment of a conservator; or 
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1 ‘‘(II) 90 days after the date of 

2 appointment of a receiver. 

3 ‘‘(ii) EXCEPTIONS.—This paragraph 

4 shall—

5 ‘‘(I) not apply to a director’s or 

6 officer’s liability insurance contract; 

7 ‘‘(II) not apply to the rights of 

8 parties to any qualified financial con9 tracts under subsection (d)(8); and 

10 ‘‘(III) not be construed as per11 mitting the conservator or receiver to 

12 fail to comply with otherwise enforce13 able provisions of such contracts. 

14 ‘‘(14) SAVINGS CLAUSE.—The meanings of 

15 terms used in this subsection are applicable for pur16 poses of this subsection only, and shall not be con17 strued or applied so as to challenge or affect the 

18 characterization, definition, or treatment of any 

19 similar terms under any other statute, regulation, or 

20 rule, including the Gramm-Leach-Bliley Act, the 

21 Legal Certainty for Bank Products Act of 2000, the 

22 securities laws (as that term is defined in section 

23 3(a)(47) of the Securities Exchange Act of 1934), 

24 and the Commodity Exchange Act. 
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•HR 1427 EH

1 ‘‘(15) EXCEPTION FOR FEDERAL RESERVE AND

2 FEDERAL HOME LOAN BANKS.—No provision of this 

3 subsection shall apply with respect to—

4 ‘‘(A) any extension of credit from any Fed5 eral home loan bank or Federal Reserve Bank 

6 to any regulated entity; or 

7 ‘‘(B) any security interest in the assets of 

8 the regulated entity securing any such extension 

9 of credit. 

10 ‘‘(e) VALUATION OF CLAIMS IN DEFAULT.—

11 ‘‘(1) IN GENERAL.—Notwithstanding any other 

12 provision of Federal law or the law of any State, and 

13 regardless of the method which the Agency deter14 mines to utilize with respect to a regulated entity in 

15 default or in danger of default, including trans16 actions authorized under subsection (i), this sub17 section shall govern the rights of the creditors of 

18 such regulated entity. 

19 ‘‘(2) MAXIMUM LIABILITY.—The maximum li20 ability of the Agency, acting as receiver or in any 

21 other capacity, to any person having a claim against 

22 the receiver or the regulated entity for which such 

23 receiver is appointed shall equal the lesser of—

24 ‘‘(A) the amount such claimant would have 

25 received if the Agency had liquidated the assets 
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1 and liabilities of such regulated entity without 

2 exercising the authority of the Agency under 

3 subsection (i) of this section; or 

4 ‘‘(B) the amount of proceeds realized from 

5 the performance of contracts or sale of the as6 sets of the regulated entity. 

7 ‘‘(f) LIMITATION ON COURT ACTION.—Except as 

8 provided in this section or at the request of the Director, 

9 no court may take any action to restrain or affect the exer10 cise of powers or functions of the Agency as a conservator 

11 or a receiver. 

12 ‘‘(g) LIABILITY OF DIRECTORS AND OFFICERS.—

13 ‘‘(1) IN GENERAL.—A director or officer of a 

14 regulated entity may be held personally liable for 

15 monetary damages in any civil action by, on behalf 

16 of, or at the request or direction of the Agency, 

17 which action is prosecuted wholly or partially for the 

18 benefit of the Agency—

19 ‘‘(A) acting as conservator or receiver of 

20 such regulated entity, or 

21 ‘‘(B) acting based upon a suit, claim, or 

22 cause of action purchased from, assigned by, or 

23 otherwise conveyed by such receiver or conser24 vator, 
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1 for gross negligence, including any similar conduct 

2 or conduct that demonstrates a greater disregard of 

3 a duty of care (than gross negligence) including in4 tentional tortious conduct, as such terms are defined 

5 and determined under applicable State law. 

6 ‘‘(2) NO LIMITATION.—Nothing in this para7 graph shall impair or affect any right of the Agency 

8 under other applicable law. 

9 ‘‘(h) DAMAGES.—In any proceeding related to any 

10 claim against a director, officer, employee, agent, attorney, 

11 accountant, appraiser, or any other party employed by or 

12 providing services to a regulated entity, recoverable dam13 ages determined to result from the improvident or other14 wise improper use or investment of any assets of the regu15 lated entity shall include principal losses and appropriate 

16 interest. 

17 ‘‘(i) LIMITED-LIFE REGULATED ENTITIES.—

18 ‘‘(1) ORGANIZATION.—

19 ‘‘(A) PURPOSE.—If a regulated entity is in 

20 default, or if the Agency anticipates that a reg21 ulated entity will default, the Agency may orga22 nize a limited-life regulated entity with those 

23 powers and attributes of the regulated entity in 

24 default or in danger of default that the Director 

25 determines necessary, subject to the provisions 
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1 of this subsection. The Director shall grant a 

2 temporary charter to the limited-life regulated 

3 entity, and the limited-life regulated entity shall 

4 operate subject to that charter. 

5 ‘‘(B) AUTHORITIES.—Upon the creation of 

6 a limited-life regulated entity under subpara7 graph (A), the limited-life regulated entity 

8 may—

9 ‘‘(i) assume such liabilities of the reg10 ulated entity that is in default or in danger 

11 of default as the Agency may, in its discre12 tion, determine to be appropriate, provided 

13 that the liabilities assumed shall not exceed 

14 the amount of assets of the limited-life reg15 ulated entity; 

16 ‘‘(ii) purchase such assets of the regu17 lated entity that is in default, or in danger 

18 of default, as the Agency may, in its dis19 cretion, determine to be appropriate; and 

20 ‘‘(iii) perform any other temporary 

21 function which the Agency may, in its dis22 cretion, prescribe in accordance with this 

23 section. 

24 ‘‘(2) CHARTER.—
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1 ‘‘(A) CONDITIONS.—The Agency may 

2 grant a temporary charter if the Agency deter3 mines that the continued operation of the regu4 lated entity in default or in danger of default 

5 is in the best interest of the national economy 

6 and the housing markets. 

7 ‘‘(B) TREATMENT AS BEING IN DEFAULT

8 FOR CERTAIN PURPOSES.—A limited-life regu9 lated entity shall be treated as a regulated enti10 ty in default at such times and for such pur11 poses as the Agency may, in its discretion, de12 termine. 

13 ‘‘(C) MANAGEMENT.—A limited-life regu14 lated entity, upon the granting of its charter, 

15 shall be under the management of a board of 

16 directors consisting of not fewer than 5 nor 

17 more than 10 members appointed by the Agen18 cy. 

19 ‘‘(D) BYLAWS.—The board of directors of 

20 a limited-life regulated entity shall adopt such 

21 bylaws as may be approved by the Agency. 

22 ‘‘(3) CAPITAL STOCK.—No capital stock need 

23 be paid into a limited-life regulated entity by the 

24 Agency. 
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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 STATUS.—Notwithstanding any 

8 other provision of Federal or State law, the limited9 life regulated entity, its franchise, property, and in10 come shall be exempt from all taxation now or here11 after imposed by the United States, by any territory, 

12 dependency, or possession thereof, or by any State, 

13 county, municipality, or local taxing authority. 

14 ‘‘(6) WINDING UP.—

15 ‘‘(A) IN GENERAL.—Subject to subpara16 graph (B), unless Congress authorizes the sale 

17 of the capital stock of the limited-life regulated 

18 entity, not later than 2 years after the date of 

19 its organization, the Agency shall wind up the 

20 affairs of the limited-life regulated entity. 

21 ‘‘(B) EXTENSION.—The Director may, in 

22 the discretion of the Director, extend the status 

23 of the limited-life regulated entity for 3 addi24 tional 1-year periods. 

25 ‘‘(7) TRANSFER OF ASSETS AND LIABILITIES.—
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1 ‘‘(A) IN GENERAL.—

2 ‘‘(i) TRANSFER OF ASSETS AND LI3 ABILITIES.—The Agency, as receiver, may 

4 transfer any assets and liabilities of a reg5 ulated entity in default, or in danger of de6 fault, to the limited-life regulated entity in 

7 accordance with paragraph (1). 

8 ‘‘(ii) SUBSEQUENT TRANSFERS.—At 

9 any time after a charter is transferred to 

10 a limited-life regulated entity, the Agency, 

11 as receiver, may transfer any assets and li12 abilities of such regulated entity in default, 

13 or in danger in default, as the Agency 

14 may, in its discretion, determine to be ap15 propriate in accordance with paragraph 

16 (1). 

17 ‘‘(iii) EFFECTIVE WITHOUT AP18 PROVAL.—The transfer of any assets or li19 abilities of a regulated entity in default, or 

20 in danger of default, transferred to a lim21 ited-life regulated entity shall be effective 

22 without any further approval under Fed23 eral or State law, assignment, or consent 

24 with respect thereto. 
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1 ‘‘(8) PROCEEDS.—To the extent that available 

2 proceeds from the limited-life regulated entity exceed 

3 amounts required to pay obligations, such proceeds 

4 may be paid to the regulated entity in default, or in 

5 danger of default. 

6 ‘‘(9) POWERS.—

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; and 

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; 

21 ‘‘(ii) the Agency may indemnify the 

22 representatives for purposes of paragraph 

23 (1)(B), and the directors, officers, employ24 ees, and agents of a limited-life regulated 
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1 entity on such terms as the Agency deter2 mines to be appropriate; and 

3 ‘‘(iii) 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 up to 45 days at the request of the limited-life 
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1 regulated entity. Such period may be modified 

2 upon the consent of all parties. 

3 ‘‘(10) OBTAINING OF CREDIT AND INCURRING

4 OF DEBT.—

5 ‘‘(A) IN GENERAL.—The limited-life regu6 lated entity may obtain unsecured credit and 

7 incur unsecured debt in the ordinary course of 

8 business. 

9 ‘‘(B) INABILITY TO OBTAIN CREDIT.—If 

10 the limited-life regulated entity is unable to ob11 tain unsecured credit the Director may author12 ize the obtaining of credit or the incurring of 

13 debt—

14 ‘‘(i) with priority over any or all ad15 ministrative expenses; 

16 ‘‘(ii) secured by a lien on property 

17 that is not otherwise subject to a lien; or 

18 ‘‘(iii) secured by a junior lien on prop19 erty that is subject to a lien. 

20 ‘‘(C) LIMITATIONS.—

21 ‘‘(i) IN GENERAL.—The Director, 

22 after notice and a hearing, may authorize 

23 the obtaining of credit or the incurring of 

24 debt secured by a senior or equal lien on 

25 property that is subject to a lien (other 
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1 than mortgages that collateralize the mort2 gage-backed securities issued or guaran3 teed by the regulated entity) only if—

4 ‘‘(I) the limited-life regulated en5 tity is unable to obtain such credit 

6 otherwise; and 

7 ‘‘(II) there is adequate protection 

8 of the interest of the holder of the lien 

9 on the property which such senior or 

10 equal lien is proposed to be granted. 

11 ‘‘(ii) BURDEN OF PROOF.—In any 

12 hearing under this subsection, the Director 

13 has the burden of proof on the issue of 

14 adequate protection. 

15 ‘‘(D) EFFECT ON DEBTS AND LIENS.—The 

16 reversal or modification on appeal of an author17 ization under this paragraph to obtain credit or 

18 incur debt, or of a grant under this section of 

19 a priority or a lien, does not affect the validity 

20 of any debt so incurred, or any priority or lien 

21 so granted, to an entity that extended such 

22 credit in good faith, whether or not such entity 

23 knew of the pendency of the appeal, unless such 

24 authorization and the incurring of such debt, or 
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1 the granting of such priority or lien, were 

2 stayed pending appeal. 

3 ‘‘(11) ISSUANCE OF PREFERRED DEBT.—A lim4 ited-life regulated entity may, subject to the ap5 proval of the Director and subject to such terms and 

6 conditions as the Director may prescribe, issue 

7 notes, bonds, or other debt obligations of a class to 

8 which all other debt obligations of the limited-life 

9 regulated entity shall be subordinate in right and 

10 payment. 

11 ‘‘(12) NO FEDERAL STATUS.—

12 ‘‘(A) AGENCY STATUS.—A limited-life reg13 ulated entity is not an agency, establishment, or 

14 instrumentality of the United States. 

15 ‘‘(B) EMPLOYEE STATUS.—Representa16 tives for purposes of paragraph (1)(B), interim 

17 directors, directors, officers, employees, or 

18 agents of a limited-life regulated entity are not, 

19 solely by virtue of service in any such capacity, 

20 officers or employees of the United States. Any 

21 employee of the Agency or of any Federal in22 strumentality who serves at the request of the 

23 Agency as a representative for purposes of 

24 paragraph (1)(B), interim director, director, of-
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1 ficer, employee, or agent of a limited-life regu2 lated entity shall not—

3 ‘‘(i) solely by virtue of service in any 

4 such capacity lose any existing status as 

5 an officer or employee of the United States 

6 for purposes of title 5, United States Code, 

7 or any other provision of law; or 

8 ‘‘(ii) receive any salary or benefits for 

9 service in any such capacity with respect to 

10 a limited-life regulated entity in addition to 

11 such salary or benefits as are obtained 

12 through employment with the Agency or 

13 such Federal instrumentality. 

14 ‘‘(13) ADDITIONAL POWERS.—In addition to 

15 any other powers granted under this subsection, a 

16 limited-life regulated entity may—

17 ‘‘(A) extend a maturity date or change in 

18 an interest rate or other term of outstanding 

19 securities; 

20 ‘‘(B) issue securities of the limited-life reg21 ulated entity, for cash, for property, for existing 

22 securities, or in exchange for claims or inter23 ests, or for any other appropriate purposes; and 

24 ‘‘(C) take any other action not inconsistent 

25 with this section. 
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1 ‘‘(j) OTHER EXEMPTIONS.—When acting as a re2 ceiver, the following provisions shall apply with respect to 

3 the Agency: 

4 ‘‘(1) EXEMPTION FROM TAXATION.—The Agen5 cy, including its franchise, its capital, reserves, and 

6 surplus, and its income, shall be exempt from all 

7 taxation imposed by any State, country, munici8 pality, or local taxing authority, except that any real 

9 property of the Agency shall be subject to State, ter10 ritorial, county, municipal, or local taxation to the 

11 same extent according to its value as other real 

12 property is taxed, except that, notwithstanding the 

13 failure of any person to challenge an assessment 

14 under State law of the value of such property, and 

15 the tax thereon, shall be determined as of the period 

16 for which such tax is imposed. 

17 ‘‘(2) EXEMPTION FROM ATTACHMENT AND

18 LIENS.—No property of the Agency shall be subject 

19 to levy, attachment, garnishment, foreclosure, or sale 

20 without the consent of the Agency, nor shall any in21 voluntary lien attach to the property of the Agency. 

22 ‘‘(3) EXEMPTION FROM PENALTIES AND

23 FINES.—The Agency shall not be liable for any 

24 amounts in the nature of penalties or fines, includ25 ing those arising from the failure of any person to 
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1 pay any real property, personal property, probate, or 

2 recording tax or any recording or filing fees when 

3 due. 

4 ‘‘(k) PROHIBITION OF CHARTER REVOCATION.—In 

5 no case may a receiver appointed pursuant to this section 

6 revoke, annul, or terminate the charter of a regulated enti7 ty.’’. 

8 (b) CONFORMING AMENDMENTS.—

9 (1) HOUSING AND COMMUNITY DEVELOPMENT

10 ACT OF 1992.—Subtitle B of title XIII of the Hous11 ing and Community Development Act of 1992 is 

12 amended by striking sections 1369 (12 U.S.C. 

13 4619), 1369A (12 U.S.C. 4620), and 1369B (12 

14 U.S.C. 4621). 

15 (2) FEDERAL HOME LOAN BANKS.—Section 25 

16 of the Federal Home Loan Bank Act (12 U.S.C. 

17 1445) is amended to read as follows: 

18 ‘‘SEC. 25. SUCCESSION OF FEDERAL HOME LOAN BANKS. 

19 ‘‘Each Federal Home Loan Bank shall have succes20 sion until it is voluntarily merged with another Bank 

21 under this Act, or until it is merged, reorganized, rehabili22 tated, liquidated, or otherwise wound up by the Director 

23 in accordance with the provisions of section 1367 of the 

24 Housing and Community Development Act of 1992, or by 

25 further Act of Congress.’’. 
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1 SEC. 155. CONFORMING AMENDMENTS. 

2 Title XIII of the Housing and Community Develop3 ment Act of 1992, as amended by the preceding provisions 

4 of this Act, is further amended—

5 (1) in sections 1365 (12 U.S.C. 4615) through 

6 1369D (12 U.S.C. 4623), but not including section 

7 1367 (12 U.S.C. 4617) as amended by section 154 

8 of this Act—

9 (A) by striking ‘‘An enterprise’’ each place 

10 such term appears and inserting ‘‘A regulated 

11 entity’’; 

12 (B) by striking ‘‘an enterprise’’ each place 

13 such term appears and inserting ‘‘a regulated 

14 entity’’; and 

15 (C) by striking ‘‘the enterprise’’ each place 

16 such term appears and inserting ‘‘the regulated 

17 entity’’; 

18 (2) in section 1366 (12 U.S.C. 4616)—

19 (A) in subsection (b)(7), by striking ‘‘sec20 tion 1369 (excluding subsection (a)(1) and 

21 (2))’’ and inserting ‘‘section 1367’’; and 

22 (B) in subsection (d), by striking ‘‘the en23 terprises’’ and inserting ‘‘the regulated enti24 ties’’; 

25 (3) in section 1368(d) (12 U.S.C. 4618(d)), by 

26 striking ‘‘Committee on Banking, Finance and 
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1 Urban Affairs’’ and inserting ‘‘Committee on Finan2 cial Services’’; 

3 (4) in section 1369C (12 U.S.C. 4622)—

4 (A) in subsection (a)(4), by striking ‘‘ac5 tivities (including existing and new programs)’’ 

6 and inserting ‘‘activities, services, undertakings, 

7 and offerings (including existing and new prod8 ucts (as such term is defined in section 

9 1321(f))’’; and 

10 (B) in subsection (c), by striking ‘‘any en11 terprise’’ and inserting ‘‘any regulated entity’’; 

12 and 

13 (5) in subsections (a) and (d) of section 1369D, 

14 by striking ‘‘section 1366 or 1367 or action under 

15 section 1369)’’ each place such phrase appears and 

16 inserting ‘‘section 1367)’’. 

17 Subtitle D—Enforcement Actions 

18 SEC. 161. CEASE-AND-DESIST PROCEEDINGS. 

19 Section 1371 of the Housing and Community Devel20 opment Act of 1992 (12 U.S.C. 4631) is amended—

21 (1) by striking subsections (a) and (b) and in22 serting the following new subsections: 

23 ‘‘(a) ISSUANCE FOR UNSAFE OR UNSOUND PRAC24 TICES AND VIOLATIONS OF RULES OR LAWS.—If, in the 

25 opinion of the Director, a regulated entity or any regulated 
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1 entity-affiliated party is engaging or has engaged, or the 

2 Director has reasonable cause to believe that the regulated 

3 entity or any regulated entity-affiliated party is about to 

4 engage, in an unsafe or unsound practice in conducting 

5 the business of the regulated entity or is violating or has 

6 violated, or the Director has reasonable cause to believe 

7 that the regulated entity or any regulated entity-affiliated 

8 party is about to violate, a law, rule, or regulation, or any 

9 condition imposed in writing by the Director in connection 

10 with the granting of any application or other request by 

11 the regulated entity or any written agreement entered into 

12 with the Director, the Director may issue and serve upon 

13 the regulated entity or such party a notice of charges in 

14 respect thereof. The Director may not, pursuant to this 

15 section, enforce compliance with any housing goal estab16 lished under subpart B of part 2 of subtitle A of this title, 

17 with section 1336 or 1337 of this title, with subsection 

18 (m) or (n) of section 309 of the Federal National Mort19 gage Association Charter Act (12 U.S.C. 1723a(m), (n)), 

20 with subsection (e) or (f) of section 307 of the Federal 

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

22 1456(e), (f)), or with paragraph (5) of section 10(j) of 

23 the Federal Home Loan Bank Act (12 U.S.C. 1430(j)). 

24 ‘‘(b) ISSUANCE FOR UNSATISFACTORY RATING.—If a 

25 regulated entity receives, in its most recent report of ex-
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1 amination, a less-than-satisfactory rating for asset quality, 

2 management, earnings, or liquidity, the Director may (if 

3 the deficiency is not corrected) deem the regulated entity 

4 to be engaging in an unsafe or unsound practice for pur5 poses of this subsection.’’; 

6 (2) in subsection (c)(2), by striking ‘‘enterprise, 

7 executive officer, or director’’ and inserting ‘‘regu8 lated entity or regulated entity-affiliated party’’; and 

9 (3) in subsection (d)—

10 (A) in the matter preceding paragraph (1), 

11 by striking ‘‘enterprise, executive officer, or di12 rector’’ and inserting ‘‘regulated entity or regu13 lated entity-affiliated party’’; 

14 (B) in paragraph (1)—

15 (i) by striking ‘‘an executive officer or 

16 a director’’ and inserting ‘‘a regulated enti17 ty affiliated party’’; and 

18 (ii) by inserting ‘‘(including reim19 bursement of compensation under section 

20 1318)’’ after ‘‘reimbursement’’; 

21 (C) in paragraph (6), by striking ‘‘and’’ at 

22 the end; 

23 (D) by redesignating paragraph (7) as 

24 paragraph (8); and 
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1 (E) by inserting after paragraph (6) the 

2 following new paragraph: 

3 ‘‘(7) to effect an attachment on a regulated en4 tity or regulated entity-affiliated party subject to an 

5 order under this section or section 1372; and’’. 

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

7 Section 1372 of the Housing and Community Devel8 opment Act of 1992 (12 U.S.C. 4632) is amended—

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

10 following new subsection: 

11 ‘‘(a) GROUNDS FOR ISSUANCE.—Whenever the Direc12 tor determines that the violation or threatened violation 

13 or the unsafe or unsound practice or practices specified 

14 in the notice of charges served upon the regulated entity 

15 or any regulated entity-affiliated party pursuant to section 

16 1371(a), or the continuation thereof, is likely to cause in17 solvency or significant dissipation of assets or earnings of 

18 the regulated entity, or is likely to weaken the condition 

19 of the regulated entity prior to the completion of the pro20 ceedings conducted pursuant to sections 1371 and 1373, 

21 the Director may issue a temporary order requiring the 

22 regulated entity or such party to cease and desist from 

23 any such violation or practice and to take affirmative ac24 tion to prevent or remedy such insolvency, dissipation, 

25 condition, or prejudice pending completion of such pro-
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1 ceedings. Such order may include any requirement author2 ized under section 1371(d).’’; 

3 (2) in subsection (b), by striking ‘‘enterprise, 

4 executive officer, or director’’ and inserting ‘‘regu5 lated entity or regulated entity-affiliated party’’; 

6 (3) in subsection (d)—

7 (A) by striking ‘‘An enterprise, executive 

8 officer, or director’’ and inserting ‘‘A regulated 

9 entity or regulated entity-affiliated party’’; and 

10 (B) by striking ‘‘the enterprise, executive 

11 officer, or director’’ and inserting ‘‘the regu12 lated entity or regulated entity-affiliated party’’; 

13 and 

14 (4) by striking subsection (e) and in inserting 

15 the following new subsection: 

16 ‘‘(e) ENFORCEMENT.—In the case of violation or 

17 threatened violation of, or failure to obey, a temporary 

18 cease-and-desist order issued pursuant to this section, the 

19 Director may apply to the United States District Court 

20 for the District of Columbia or the United States district 

21 court within the jurisdiction of which the headquarters of 

22 the regulated entity is located, for an injunction to enforce 

23 such order, and, if the court determines that there has 

24 been such violation or threatened violation or failure to 
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1 obey, it shall be the duty of the court to issue such injunc2 tion.’’. 

3 SEC. 163. PREJUDGMENT ATTACHMENT. 

4 The Housing and Community Development Act of 

5 1992 is amended by inserting after section 1375 (12 

6 U.S.C. 4635) the following new section: 

7 ‘‘SEC. 1375A. PREJUDGMENT ATTACHMENT. 

8 ‘‘(a) IN GENERAL.—In any action brought pursuant 

9 to this title, or in actions brought in aid of, or to enforce 

10 an order in, any administrative or other civil action for 

11 money damages, restitution, or civil money penalties 

12 brought pursuant to this title, the court may, upon appli13 cation of the Director or Attorney General, as applicable, 

14 issue a restraining order that—

15 ‘‘(1) prohibits any person subject to the pro16 ceeding from withdrawing, transferring, removing, 

17 dissipating, or disposing of any funds, assets or 

18 other property; and 

19 ‘‘(2) appoints a person on a temporary basis to 

20 administer the restraining order. 

21 ‘‘(b) STANDARD.—

22 ‘‘(1) SHOWING.—Rule 65 of the Federal Rules 

23 of Civil Procedure shall apply with respect to any 

24 proceeding under subsection (a) without regard to 

25 the requirement of such rule that the applicant show 
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1 that the injury, loss, or damage is irreparable and 

2 immediate. 

3 ‘‘(2) STATE PROCEEDING.—If, in the case of 

4 any proceeding in a State court, the court deter5 mines that rules of civil procedure available under 

6 the laws of such State provide substantially similar 

7 protections to a party’s right to due process as Rule 

8 65 (as modified with respect to such proceeding by 

9 paragraph (1)), the relief sought under subsection 

10 (a) may be requested under the laws of such State.’’. 

11 SEC. 164. ENFORCEMENT AND JURISDICTION. 

12 Section 1375 of the Housing and Community Devel13 opment Act of 1992 (12 U.S.C. 4635) is amended—

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

15 following new subsection: 

16 ‘‘(a) ENFORCEMENT.—The Director may, in the dis17 cretion of the Director, apply to the United States District 

18 Court for the District of Columbia, or the United States 

19 district court within the jurisdiction of which the head20 quarters of the regulated entity is located, for the enforce21 ment of any effective and outstanding notice or order 

22 issued under this subtitle or subtitle B, or request that 

23 the Attorney General of the United States bring such an 

24 action. Such court shall have jurisdiction and power to 
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1 order and require compliance with such notice or order.’’; 

2 and 

3 (2) in subsection (b), by striking ‘‘or 1376’’ and 

4 inserting ‘‘1376, or 1377’’. 

5 SEC. 165. CIVIL MONEY PENALTIES. 

6 Section 1376 of the Housing and Community Devel7 opment Act of 1992 (12 U.S.C. 4636) is amended—

8 (1) in subsection (a)—

9 (A) in the matter preceding paragraph (1), 

10 by striking ‘‘, or any executive officer or direc11 tor’’ and inserting ‘‘or any regulated-entity af12 filiated party’’; and 

13 (B) in paragraph (1)—

14 (i) by striking ‘‘the Federal National 

15 Mortgage Association Charter Act, the 

16 Federal Home Loan Mortgage Corporation 

17 Act’’ and inserting ‘‘any provision of any 

18 of the authorizing statutes’’; 

19 (ii) by striking ‘‘or Act’’ and inserting 

20 ‘‘or statute’’; 

21 (iii) by striking ‘‘or subsection’’ and 

22 inserting ‘‘, subsection’’; and 

23 (iv) by inserting ‘‘, or paragraph (5) 

24 or (12) of section 10(j) of the Federal 
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1 Home Loan Bank Act’’ before the semi2 colon at the end; 

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

4 following new subsection: 

5 ‘‘(b) AMOUNT OF PENALTY.—

6 ‘‘(1) FIRST TIER.—Any regulated entity which, 

7 or any regulated entity-affiliated party who—

8 ‘‘(A) violates any provision of this title, 

9 any provision of any of the authorizing statutes, 

10 or any order, condition, rule, or regulation 

11 under any such title or statute, except that the 

12 Director may not, pursuant to this section, en13 force compliance with any housing goal estab14 lished under subpart B of part 2 of subtitle A 

15 of this title, with section 1336 or 1337 of this 

16 title, with subsection (m) or (n) of section 309 

17 of the Federal National Mortgage Association 

18 Charter Act (12 U.S.C. 1723a(m), (n)), with 

19 subsection (e) or (f) of section 307 of the Fed20 eral Home Loan Mortgage Corporation Act (12 

21 U.S.C. 1456(e), (f)), or with paragraph (5) or 

22 (12) of section 10(j) of the Federal Home Loan 

23 Bank Act; 

24 ‘‘(B) violates any final or temporary order 

25 or notice issued pursuant to this title; 
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1 ‘‘(C) violates any condition imposed in 

2 writing by the Director in connection with the 

3 grant of any application or other request by 

4 such regulated entity; or 

5 ‘‘(D) violates any written agreement be6 tween the regulated entity and the Director, 

7 shall forfeit and pay a civil money penalty of not 

8 more than $10,000 for each day during which such 

9 violation continues. 

10 ‘‘(2) SECOND TIER.—Notwithstanding para11 graph (1)—

12 ‘‘(A) if a regulated entity, or a regulated 

13 entity-affiliated party—

14 ‘‘(i) commits any violation described 

15 in any subparagraph of paragraph (1); 

16 ‘‘(ii) recklessly engages in an unsafe 

17 or unsound practice in conducting the af18 fairs of such regulated entity; or 

19 ‘‘(iii) breaches any fiduciary duty; and 

20 ‘‘(B) the violation, practice, or breach—

21 ‘‘(i) is part of a pattern of mis22 conduct; 

23 ‘‘(ii) causes or is likely to cause more 

24 than a minimal loss to such regulated enti25 ty; or 
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1 ‘‘(iii) results in pecuniary gain or 

2 other benefit to such party, 

3 the regulated entity or regulated entity-affiliated 

4 party shall forfeit and pay a civil penalty of not 

5 more than $50,000 for each day during which such 

6 violation, practice, or breach continues. 

7 ‘‘(3) THIRD TIER.—Notwithstanding para8 graphs (1) and (2), any regulated entity which, or 

9 any regulated entity-affiliated party who—

10 ‘‘(A) knowingly—

11 ‘‘(i) commits any violation or engages 

12 in any conduct described in any subpara13 graph of paragraph (1); 

14 ‘‘(ii) engages in any unsafe or un15 sound practice in conducting the affairs of 

16 such regulated entity; or 

17 ‘‘(iii) breaches any fiduciary duty; and 

18 ‘‘(B) knowingly or recklessly causes a sub19 stantial loss to such regulated entity or a sub20 stantial pecuniary gain or other benefit to such 

21 party by reason of such violation, practice, or 

22 breach, 

23 shall forfeit and pay a civil penalty in an amount not 

24 to exceed the applicable maximum amount deter-
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1 mined under paragraph (4) for each day during 

2 which such violation, practice, or breach continues. 

3 ‘‘(4) MAXIMUM AMOUNTS OF PENALTIES FOR

4 ANY VIOLATION DESCRIBED IN PARAGRAPH (3).—

5 The maximum daily amount of any civil penalty 

6 which may be assessed pursuant to paragraph (3) 

7 for any violation, practice, or breach described in 

8 such paragraph is—

9 ‘‘(A) in the case of any person other than 

10 a regulated entity, an amount not to exceed 

11 $2,000,000; and 

12 ‘‘(B) in the case of any regulated entity, 

13 $2,000,000.’’; 

14 (3) in subsection (c)(1)(B), by striking ‘‘enter15 prise, executive officer, or director’’ and inserting 

16 ‘‘regulated entity or regulated entity-affiliated 

17 party’’; 

18 (4) in subsection (d), by striking the first sen19 tence and inserting the following: ‘‘If a regulated en20 tity or regulated entity-affiliated party fails to com21 ply with an order of the Director imposing a civil 

22 money penalty under this section, after the order is 

23 no longer subject to review as provided under sub24 section (c)(1) and section 1374, the Director may, in 

25 the discretion of the Director, bring an action in the 
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1 United States District Court for the District of Co2 lumbia, or the United States district court within 

3 the jurisdiction of which the headquarters of the reg4 ulated entity is located, to obtain a monetary judg5 ment against the regulated entity or regulated entity 

6 affiliated party and such other relief as may be 

7 available, or request that the Attorney General of 

8 the United States bring such an action.’’; and 

9 (5) in subsection (g), by striking ‘‘subsection 

10 (b)(3)’’ and inserting ‘‘this section, unless author11 ized by the Director by rule, regulation, or order’’. 

12 SEC. 166. REMOVAL AND PROHIBITION AUTHORITY. 

13 (a) IN GENERAL.—Subtitle C of title XIII of the 

14 Housing and Community Development Act of 1992 is 

15 amended—

16 (1) by redesignating sections 1377, 1378, 1379, 

17 1379A, and 1379B (12 U.S.C. 4637–41) as sections 

18 1379, 1379A, 1379B, 1379C, and 1379D, respec19 tively; and 

20 (2) by inserting after section 1376 (12 U.S.C. 

21 4636) the following new section: 

22 ‘‘SEC. 1377. REMOVAL AND PROHIBITION AUTHORITY. 

23 ‘‘(a) AUTHORITY TO ISSUE ORDER.—Whenever the 

24 Director determines that—
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1 ‘‘(1) any regulated entity-affiliated party has, 

2 directly or indirectly—

3 ‘‘(A) violated—

4 ‘‘(i) any law or regulation; 

5 ‘‘(ii) any cease-and-desist order which 

6 has become final; 

7 ‘‘(iii) any condition imposed in writing 

8 by the Director in connection with the 

9 grant of any application or other request 

10 by such regulated entity; or 

11 ‘‘(iv) any written agreement between 

12 such regulated entity and the Director; 

13 ‘‘(B) engaged or participated in any unsafe 

14 or unsound practice in connection with any reg15 ulated entity; or 

16 ‘‘(C) committed or engaged in any act, 

17 omission, or practice which constitutes a breach 

18 of such party’s fiduciary duty; 

19 ‘‘(2) by reason of the violation, practice, or 

20 breach described in any subparagraph of paragraph 

21 (1)—

22 ‘‘(A) such regulated entity has suffered or 

23 will probably suffer financial loss or other dam24 age; or 
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1 ‘‘(B) such party has received financial gain 

2 or other benefit by reason of such violation, 

3 practice, or breach; and 

4 ‘‘(3) such violation, practice, or breach—

5 ‘‘(A) involves personal dishonesty on the 

6 part of such party; or 

7 ‘‘(B) demonstrates willful or continuing 

8 disregard by such party for the safety or sound9 ness of such regulated entity, the Director may 

10 serve upon such party a written notice of the 

11 Director’s intention to remove such party from 

12 office or to prohibit any further participation by 

13 such party, in any manner, in the conduct of 

14 the affairs of any regulated entity. 

15 ‘‘(b) SUSPENSION ORDER.—

16 ‘‘(1) SUSPENSION OR PROHIBITION AUTHOR17 ITY.—If the Director serves written notice under 

18 subsection (a) to any regulated entity-affiliated party 

19 of the Director’s intention to issue an order under 

20 such subsection, the Director may—

21 ‘‘(A) suspend such party from office or 

22 prohibit such party from further participation 

23 in any manner in the conduct of the affairs of 

24 the regulated entity, if the Director—
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1 ‘‘(i) determines that such action is 

2 necessary for the protection of the regu3 lated entity; and 

4 ‘‘(ii) serves such party with written 

5 notice of the suspension order; and 

6 ‘‘(B) prohibit the regulated entity from re7 leasing to or on behalf of the regulated entity8 affiliated party any compensation or other pay9 ment of money or other thing of current or po10 tential value in connection with any resignation, 

11 removal, retirement, or other termination of 

12 employment or office of the party. 

13 ‘‘(2) EFFECTIVE PERIOD.—Any suspension 

14 order issued under this subsection—

15 ‘‘(A) shall become effective upon service; 

16 and 

17 ‘‘(B) unless a court issues a stay of such 

18 order under subsection (g) of this section, shall 

19 remain in effect and enforceable until—

20 ‘‘(i) the date the Director dismisses 

21 the charges contained in the notice served 

22 under subsection (a) with respect to such 

23 party; or 
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1 ‘‘(ii) the effective date of an order 

2 issued by the Director to such party under 

3 subsection (a). 

4 ‘‘(3) COPY OF ORDER.—If the Director issues a 

5 suspension order under this subsection to any regu6 lated entity-affiliated party, the Director shall serve 

7 a copy of such order on any regulated entity with 

8 which such party is affiliated at the time such order 

9 is issued. 

10 ‘‘(c) NOTICE, HEARING, AND ORDER.—A notice of 

11 intention to remove a regulated entity-affiliated party 

12 from office or to prohibit such party from participating 

13 in the conduct of the affairs of a regulated entity shall 

14 contain a statement of the facts constituting grounds for 

15 such action, and shall fix a time and place at which a hear16 ing will be held on such action. Such hearing shall be fixed 

17 for a date not earlier than 30 days nor later than 60 days 

18 after the date of service of such notice, unless an earlier 

19 or a later date is set by the Director at the request of 

20 (1) such party, and for good cause shown, or (2) the At21 torney General of the United States. Unless such party 

22 shall appear at the hearing in person or by a duly author23 ized representative, such party shall be deemed to have 

24 consented to the issuance of an order of such removal or 

25 prohibition. In the event of such consent, or if upon the 
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1 record made at any such hearing the Director shall find 

2 that any of the grounds specified in such notice have been 

3 established, the Director may issue such orders of suspen4 sion or removal from office, or prohibition from participa5 tion in the conduct of the affairs of the regulated entity, 

6 as it may deem appropriate, together with an order pro7 hibiting compensation described in subsection (b)(1)(B). 

8 Any such order shall become effective at the expiration 

9 of 30 days after service upon such regulated entity and 

10 such party (except in the case of an order issued upon 

11 consent, which shall become effective at the time specified 

12 therein). Such order shall remain effective and enforceable 

13 except to such extent as it is stayed, modified, terminated, 

14 or set aside by action of the Director or a reviewing court. 

15 ‘‘(d) PROHIBITION OF CERTAIN SPECIFIC ACTIVI16 TIES.—Any person subject to an order issued under this 

17 section shall not—

18 ‘‘(1) participate in any manner in the conduct 

19 of the affairs of any regulated entity; 

20 ‘‘(2) solicit, procure, transfer, attempt to trans21 fer, vote, or attempt to vote any proxy, consent, or 

22 authorization with respect to any voting rights in 

23 any regulated entity; 

24 ‘‘(3) violate any voting agreement previously 

25 approved by the Director; or 
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1 ‘‘(4) vote for a director, or serve or act as a 

2 regulated entity-affiliated party. 

3 ‘‘(e) INDUSTRY-WIDE PROHIBITION.—

4 ‘‘(1) IN GENERAL.—Except as provided in para5 graph (2), any person who, pursuant to an order 

6 issued under this section, has been removed or sus7 pended from office in a regulated entity or prohib8 ited from participating in the conduct of the affairs 

9 of a regulated entity may not, while such order is in 

10 effect, continue or commence to hold any office in, 

11 or participate in any manner in the conduct of the 

12 affairs of, any regulated entity. 

13 ‘‘(2) EXCEPTION IF DIRECTOR PROVIDES WRIT14 TEN CONSENT.—If, on or after the date an order is 

15 issued under this section which removes or suspends 

16 from office any regulated entity-affiliated party or 

17 prohibits such party from participating in the con18 duct of the affairs of a regulated entity, such party 

19 receives the written consent of the Director, the 

20 order shall, to the extent of such consent, cease to 

21 apply to such party with respect to the regulated en22 tity described in the written consent. If the Director 

23 grants such a written consent, it shall publicly dis24 close such consent. 
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1 ‘‘(3) VIOLATION OF PARAGRAPH (1) TREATED

2 AS VIOLATION OF ORDER.—Any violation of para3 graph (1) by any person who is subject to an order 

4 described in such subsection shall be treated as a 

5 violation of the order. 

6 ‘‘(f) APPLICABILITY.—This section shall only apply 

7 to a person who is an individual, unless the Director spe8 cifically finds that it should apply to a corporation, firm, 

9 or other business enterprise. 

10 ‘‘(g) STAY OF SUSPENSION AND PROHIBITION OF

11 REGULATED ENTITY-AFFILIATED PARTY.—Within 10 

12 days after any regulated entity-affiliated party has been 

13 suspended from office and/or prohibited from participation 

14 in the conduct of the affairs of a regulated entity under 

15 this section, such party may apply to the United States 

16 District Court for the District of Columbia, or the United 

17 States district court for the judicial district in which the 

18 headquarters of the regulated entity is located, for a stay 

19 of such suspension and/or prohibition and any prohibition 

20 under subsection (b)(1)(B) pending the completion of the 

21 administrative proceedings pursuant to the notice served 

22 upon such party under this section, and such court shall 

23 have jurisdiction to stay such suspension and/or prohibi24 tion. 
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1 ‘‘(h) SUSPENSION OR REMOVAL OF REGULATED EN2 TITY-AFFILIATED PARTY CHARGED WITH FELONY.—

3 ‘‘(1) SUSPENSION OR PROHIBITION.—

4 ‘‘(A) IN GENERAL.—Whenever any regu5 lated entity-affiliated party is charged in any 

6 information, indictment, or complaint, with the 

7 commission of or participation in a crime in8 volving dishonesty or breach of trust which is 

9 punishable by imprisonment for a term exceed10 ing one year under State or Federal law, the 

11 Director may, if continued service or participa12 tion by such party may pose a threat to the 

13 regulated entity or impair public confidence in 

14 the regulated entity, by written notice served 

15 upon such party—

16 ‘‘(i) suspend such party from office or 

17 prohibit such party from further participa18 tion in any manner in the conduct of the 

19 affairs of any regulated entity; and 

20 ‘‘(ii) prohibit the regulated entity 

21 from releasing to or on behalf of the regu22 lated entity-affiliated party any compensa23 tion or other payment of money or other 

24 thing of current or potential value in con25 nection with the period of any such sus-
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1 pension or with any resignation, removal, 

2 retirement, or other termination of employ3 ment or office of the party. 

4 ‘‘(B) PROVISIONS APPLICABLE TO NO5 TICE.—

6 ‘‘(i) COPY.—A copy of any notice 

7 under paragraph (1)(A) shall also be 

8 served upon the regulated entity. 

9 ‘‘(ii) EFFECTIVE PERIOD.—A suspen10 sion or prohibition under subparagraph (A) 

11 shall remain in effect until the informa12 tion, indictment, or complaint referred to 

13 in such subparagraph is finally disposed of 

14 or until terminated by the Director. 

15 ‘‘(2) REMOVAL OR PROHIBITION.—

16 ‘‘(A) IN GENERAL.—If a judgment of con17 viction or an agreement to enter a pretrial di18 version or other similar program is entered 

19 against a regulated entity-affiliated party in 

20 connection with a crime described in paragraph 

21 (1)(A), at such time as such judgment is not 

22 subject to further appellate review, the Director 

23 may, if continued service or participation by 

24 such party may pose a threat to the regulated 

25 entity or impair public confidence in the regu-
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1 lated entity, issue and serve upon such party an 

2 order that—

3 ‘‘(i) removes such party from office or 

4 prohibits such party from further partici5 pation in any manner in the conduct of the 

6 affairs of the regulated entity without the 

7 prior written consent of the Director; and 

8 ‘‘(ii) prohibits the regulated entity 

9 from releasing to or on behalf of the regu10 lated entity-affiliated party any compensa11 tion or other payment of money or other 

12 thing of current or potential value in con13 nection with the termination of employ14 ment or office of the party. 

15 ‘‘(B) PROVISIONS APPLICABLE TO

16 ORDER.—

17 ‘‘(i) COPY.—A copy of any order 

18 under paragraph (2)(A) shall also be 

19 served upon the regulated entity, where20 upon the regulated entity-affiliated party 

21 who is subject to the order (if a director or 

22 an officer) shall cease to be a director or 

23 officer of such regulated entity. 

24 ‘‘(ii) EFFECT OF ACQUITTAL.—A find25 ing of not guilty or other disposition of the 
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1 charge shall not preclude the Director from 

2 instituting proceedings after such finding 

3 or disposition to remove such party from 

4 office or to prohibit further participation in 

5 regulated entity affairs, and to prohibit 

6 compensation or other payment of money 

7 or other thing of current or potential value 

8 in connection with any resignation, re9 moval, retirement, or other termination of 

10 employment or office of the party, pursu11 ant to subsections (a), (d), or (e) of this 

12 section. 

13 ‘‘(iii) EFFECTIVE PERIOD.—Any no14 tice of suspension or order of removal 

15 issued under this subsection shall remain 

16 effective and outstanding until the comple17 tion of any hearing or appeal authorized 

18 under paragraph (4) unless terminated by 

19 the Director. 

20 ‘‘(3) AUTHORITY OF REMAINING BOARD MEM21 BERS.—If at any time, because of the suspension of 

22 one or more directors pursuant to this section, there 

23 shall be on the board of directors of a regulated enti24 ty less than a quorum of directors not so suspended, 

25 all powers and functions vested in or exercisable by 
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1 such board shall vest in and be exercisable by the di2 rector or directors on the board not so suspended, 

3 until such time as there shall be a quorum of the 

4 board of directors. In the event all of the directors 

5 of a regulated entity are suspended pursuant to this 

6 section, the Director shall appoint persons to serve 

7 temporarily as directors in their place and stead 

8 pending the termination of such suspensions, or 

9 until such time as those who have been suspended 

10 cease to be directors of the regulated entity and 

11 their respective successors take office. 

12 ‘‘(4) HEARING REGARDING CONTINUED PAR13 TICIPATION.—Within 30 days from service of any 

14 notice of suspension or order of removal issued pur15 suant to paragraph (1) or (2) of this subsection, the 

16 regulated entity-affiliated party concerned may re17 quest in writing an opportunity to appear before the 

18 Director to show that the continued service to or 

19 participation in the conduct of the affairs of the reg20 ulated entity by such party does not, or is not likely 

21 to, pose a threat to the interests of the regulated en22 tity or threaten to impair public confidence in the 

23 regulated entity. Upon receipt of any such request, 

24 the Director shall fix a time (not more than 30 days 

25 after receipt of such request, unless extended at the 
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1 request of such party) and place at which such party 

2 may appear, personally or through counsel, before 

3 one or more members of the Director or designated 

4 employees of the Director to submit written mate5 rials (or, at the discretion of the Director, oral testi6 mony) and oral argument. Within 60 days of such 

7 hearing, the Director shall notify such party whether 

8 the suspension or prohibition from participation in 

9 any manner in the conduct of the affairs of the reg10 ulated entity will be continued, terminated, or other11 wise modified, or whether the order removing such 

12 party from office or prohibiting such party from fur13 ther participation in any manner in the conduct of 

14 the affairs of the regulated entity, and prohibiting 

15 compensation in connection with termination will be 

16 rescinded or otherwise modified. Such notification 

17 shall contain a statement of the basis for the Direc18 tor’s decision, if adverse to such party. The Director 

19 is authorized to prescribe such rules as may be nec20 essary to effectuate the purposes of this subsection. 

21 ‘‘(i) HEARINGS AND JUDICIAL REVIEW.—

22 ‘‘(1) VENUE AND PROCEDURE.—Any hearing 

23 provided for in this section shall be held in the Dis24 trict of Columbia or in the Federal judicial district 

25 in which the headquarters of the regulated entity is 
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1 located, unless the party afforded the hearing con2 sents to another place, and shall be conducted in ac3 cordance with the provisions of chapter 5 of title 5, 

4 United States Code. After such hearing, and within 

5 90 days after the Director has notified the parties 

6 that the case has been submitted to it for final deci7 sion, it shall render its decision (which shall include 

8 findings of fact upon which its decision is predi9 cated) and shall issue and serve upon each party to 

10 the proceeding an order or orders consistent with 

11 the provisions of this section. Judicial review of any 

12 such order shall be exclusively as provided in this 

13 subsection. Unless a petition for review is timely 

14 filed in a court of appeals of the United States, as 

15 provided in paragraph (2), and thereafter until the 

16 record in the proceeding has been filed as so pro17 vided, the Director may at any time, upon such no18 tice and in such manner as it shall deem proper, 

19 modify, terminate, or set aside any such order. Upon 

20 such filing of the record, the Director may modify, 

21 terminate, or set aside any such order with permis22 sion of the court. 

23 ‘‘(2) REVIEW OF ORDER.—Any party to any 

24 proceeding under paragraph (1) may obtain a review 

25 of any order served pursuant to paragraph (1) 
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1 (other than an order issued with the consent of the 

2 regulated entity or the regulated entity-affiliated 

3 party concerned, or an order issued under subsection 

4 (h) of this section) by the filing in the United States 

5 Court of Appeals for the District of Columbia Cir6 cuit or court of appeals of the United States for the 

7 circuit in which the headquarters of the regulated 

8 entity is located, within 30 days after the date of 

9 service of such order, a written petition praying that 

10 the order of the Director be modified, terminated, or 

11 set aside. A copy of such petition shall be forthwith 

12 transmitted by the clerk of the court to the Director, 

13 and thereupon the Director shall file in the court the 

14 record in the proceeding, as provided in section 2112 

15 of title 28, United States Code. Upon the filing of 

16 such petition, such court shall have jurisdiction, 

17 which upon the filing of the record shall (except as 

18 provided in the last sentence of paragraph (1)) be 

19 exclusive, to affirm, modify, terminate, or set aside, 

20 in whole or in part, the order of the Director. Re21 view of such proceedings shall be had as provided in 

22 chapter 7 of title 5, United States Code. The judg23 ment and decree of the court shall be final, except 

24 that the same shall be subject to review by the Su-
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1 preme Court upon certiorari, as provided in section 

2 1254 of title 28, United States Code. 

3 ‘‘(3) PROCEEDINGS NOT TREATED AS STAY.—

4 The commencement of proceedings for judicial re5 view under paragraph (2) shall not, unless specifi6 cally ordered by the court, operate as a stay of any 

7 order issued by the Director.’’. 

8 (b) CONFORMING AMENDMENTS.—

9 (1) 1992 ACT.—Section 1317(f) of the Housing 

10 and Community Development Act of 1992 (12 

11 U.S.C. 4517(f)) is amended by striking ‘‘section 

12 1379B’’ and inserting ‘‘section 1379D’’. 

13 (2) FANNIE MAE CHARTER ACT.—The second 

14 sentence of subsection (b) of section 308 of the Fed15 eral National Mortgage Association Charter Act (12 

16 U.S.C. 1723(b)) is amended by striking ‘‘The’’ and 

17 inserting ‘‘Except to the extent that action under 

18 section 1377 of the Housing and Community Devel19 opment Act of 1992 temporarily results in a lesser 

20 number, the’’. 

21 (3) FREDDIE MAC ACT.—The second sentence 

22 of subparagraph (A) of section 303(a)(2) of the 

23 Federal Home Loan Mortgage Corporation Act (12 

24 U.S.C. 1452(a)(2)(A)) is amended by striking 

25 ‘‘The’’ and inserting ‘‘Except to the extent that ac-
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1 tion under section 1377 of the Housing and Commu2 nity Development Act of 1992 temporarily results in 

3 a lesser number, the’’. 

4 SEC. 167. CRIMINAL PENALTY. 

5 Subtitle C of title XIII of the Housing and Commu6 nity Development Act of 1992 (12 U.S.C. 4631 et seq.) 

7 is amended by inserting after section 1377 (as added by 

8 the preceding provisions of this Act) the following new sec9 tion: 

10 ‘‘SEC. 1378. CRIMINAL PENALTY. 

11 ‘‘Whoever, being subject to an order in effect under 

12 section 1377, without the prior written approval of the Di13 rector, knowingly participates, directly or indirectly, in any 

14 manner (including by engaging in an activity specifically 

15 prohibited in such an order) in the conduct of the affairs 

16 of any regulated entity shall, notwithstanding section 

17 3571 of title 18, be fined not more than $1,000,000, im18 prisoned for not more than 5 years, or both.’’. 

19 SEC. 168. SUBPOENA AUTHORITY. 

20 Section 1379D(c) of the Housing and Community 

21 Development Act of 1992 (12 U.S.C. 4641(c)), as so re22 designated by section 166(a)(1) of this Act, is further 

23 amended—
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1 (1) by striking ‘‘request the Attorney General 

2 of the United States to’’ and inserting ‘‘, in the dis3 cretion of the Director,’’; 

4 (2) by inserting ‘‘or request that the Attorney 

5 General of the United States bring such an action,’’ 

6 after ‘‘District of Columbia,’’; and 

7 (3) by striking ‘‘or may, under the direction 

8 and control of the Attorney General, bring such an 

9 action’’. 

10 SEC. 169. CONFORMING AMENDMENTS. 

11 Subtitle C of title XIII of the Housing and Commu12 nity Development Act of 1992 (12 U.S.C. 4631 et seq.), 

13 as amended by the preceding provisions of this Act, is 

14 amended—

15 (1) in section 1372(c)(1) (12 U.S.C. 4632(c)), 

16 by striking ‘‘that enterprise’’ and inserting ‘‘that 

17 regulated entity’’; 

18 (2) in section 1379 (12 U.S.C. 4637), as so re19 designated by section 166(a)(1) of this Act—

20 (A) by inserting ‘‘, or of a regulated entity21 affiliated party,’’ before ‘‘shall not affect’’; and 

22 (B) by striking ‘‘such director or executive 

23 officer’’ each place such term appears and in24 serting ‘‘such director, executive officer, or reg25 ulated entity-affiliated party’’; 
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1 (3) in section 1379A (12 U.S.C. 4638), as so 

2 redesignated by section 166(a)(1) of this Act, by in3 serting ‘‘or against a regulated entity-affiliated 

4 party,’’ before ‘‘or impair’’; 

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

6 term appears in such subtitle and inserting ‘‘A regu7 lated entity’’; 

8 (5) by striking ‘‘an enterprise’’ each place such 

9 term appears in such subtitle and inserting ‘‘a regu10 lated entity’’; 

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

12 term appears in such subtitle and inserting ‘‘the reg13 ulated entity’’; and 

14 (7) by striking ‘‘any enterprise’’ each place such 

15 term appears in such subtitle and inserting ‘‘any 

16 regulated entity’’. 

17 Subtitle E—General Provisions 

18 SEC. 181. BOARDS OF ENTERPRISES. 

19 (a) FANNIE MAE.—

20 (1) IN GENERAL.—Section 308(b) of the Fed21 eral National Mortgage Association Charter Act (12 

22 U.S.C. 1723(b)) is amended—

23 (A) in the first sentence, by striking 

24 ‘‘eighteen persons, five of whom shall be ap25 pointed annually by the President of the United 
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1 States, and the remainder of whom’’ and insert2 ing ‘‘13 persons, or such other number that the 

3 Director determines appropriate, who’’; 

4 (B) in the second sentence, by striking 

5 ‘‘appointed by the President’’; 

6 (C) in the third sentence—

7 (i) by striking ‘‘appointed or’’; and 

8 (ii) by striking ‘‘, except that any 

9 such appointed member may be removed 

10 from office by the President for good 

11 cause’’; 

12 (D) in the fourth sentence, by striking 

13 ‘‘elective’’; and 

14 (E) by striking the fifth sentence. 

15 (2) TRANSITIONAL PROVISION.—The amend16 ments made by paragraph (1) shall not apply to any 

17 appointed position of the board of directors of the 

18 Federal National Mortgage Association until the ex19 piration of the annual term for such position during 

20 which the effective date under Section 185 occurs. 

21 (b) FREDDIE MAC.—

22 (1) IN GENERAL.—Section 303(a)(2) of the 

23 Federal Home Loan Mortgage Corporation Act (12 

24 U.S.C. 1452(a)(2)) is amended—

25 (A) in subparagraph (A)—
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1 (i) in the first sentence, by striking 

2 ‘‘18 persons, 5 of whom shall be appointed 

3 annually by the President of the United 

4 States and the remainder of whom’’ and 

5 inserting ‘‘13 persons, or such other num6 ber as the Director determines appropriate, 

7 who’’; and 

8 (ii) in the second sentence, by striking 

9 ‘‘appointed by the President of the United 

10 States’’; 

11 (B) in subparagraph (B)—

12 (i) by striking ‘‘such or’’; and 

13 (ii) by striking ‘‘, except that any ap14 pointed member may be removed from of15 fice by the President for good cause’’; and 

16 (C) in subparagraph (C)—

17 (i) by striking the first sentence; and 

18 (ii) by striking ‘‘elective’’. 

19 (2) TRANSITIONAL PROVISION.—The amend20 ments made by paragraph (1) shall not apply to any 

21 appointed position of the board of directors of the 

22 Federal Home Loan Mortgage Corporation until the 

23 expiration of the annual term for such position dur24 ing which the effective date under Section 185 oc25 curs. 
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1 SEC. 182. REPORT ON PORTFOLIO OPERATIONS, SAFETY 

2 AND SOUNDNESS, AND MISSION OF ENTER3 PRISES. 

4 Not later than the expiration of the 12-month period 

5 beginning on the effective date under section 185, the Di6 rector of the Federal Housing Finance Agency shall sub7 mit a report to the Congress which shall include—

8 (1) a description of the portfolio holdings of the 

9 enterprises (as such term is defined in section 1303 

10 of the Housing and Community Development Act of 

11 1992 (12 U.S.C. 4502) in mortgages (including 

12 whole loans and mortgage-backed securities), non13 mortgages, and other assets; 

14 (2) a description of the risk implications for the 

15 enterprises of such holdings and the consequent risk 

16 management undertaken by the enterprises (includ17 ing the use of derivatives for hedging purposes), 

18 compared with off-balance sheet liabilities of the en19 terprises (including mortgage-backed securities guar20 anteed by the enterprises); 

21 (3) an analysis of portfolio holdings for safety 

22 and soundness purposes; 

23 (4) an assessment of whether portfolio holdings 

24 fulfill the mission purposes of the enterprises under 

25 the Federal National Mortgage Association Charter 
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1 Act and the Federal Home Loan Mortgage Corpora2 tion Act; and 

3 (5) an analysis of the potential systemic risk 

4 implications for the enterprises, the housing and 

5 capital markets, and the financial system of portfolio 

6 holdings, and whether such holdings should be lim7 ited or reduced over time. 

8 SEC. 183. CONFORMING AND TECHNICAL AMENDMENTS. 

9 (a) 1992 ACT.—Title XIII of the Housing and Com10 munity Development Act of 1992 is amended by striking 

11 section 1383 (12 U.S.C. 1451 note). 

12 (b) TITLE 18, UNITED STATES CODE.—Section 1905 

13 of title 18, United States Code, is amended by striking 

14 ‘‘Office of Federal Housing Enterprise Oversight’’ and in15 serting ‘‘Federal Housing Finance Agency’’. 

16 (c) FLOOD DISASTER PROTECTION ACT OF 1973.—

17 Section 102(f)(3)(A) of the Flood Disaster Protection Act 

18 of 1973 (42 U.S.C. 4012a(f)(3)(A)) is amended by strik19 ing ‘‘Director of the Office of Federal Housing Enterprise 

20 Oversight of the Department of Housing and Urban De21 velopment’’ and inserting ‘‘Director of the Federal Hous22 ing Finance Agency’’. 

23 (d) DEPARTMENT OF HOUSING AND URBAN DEVEL24 OPMENT ACT.—Section 5 of the Department of Housing 
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1 and Urban Development Act (42 U.S.C. 3534) is amended 

2 by striking subsection (d). 

3 (e) TITLE 5, UNITED STATES CODE.—

4 (1) DIRECTOR’S PAY RATE.—Section 5313 of 

5 title 5, United States Code, is amended by striking 

6 the item relating to the Director of the Office of 

7 Federal Housing Enterprise Oversight, Department 

8 of Housing and Urban Development and inserting 

9 the following new item:

10 ‘‘Director of the Federal Housing Finance 

11 Agency.’’. 

12 (2) EXCLUSION FROM SENIOR EXECUTIVE

13 SERVICE.—Section 3132(a)(1)(D) of title 5, United 

14 States Code, is amended—

15 (A) by striking ‘‘the Federal Housing Fi16 nance Board,’’; and 

17 (B) by striking ‘‘the Office of Federal 

18 Housing Enterprise Oversight of the Depart19 ment of Housing and Urban Development’’ and 

20 inserting ‘‘the Federal Housing Finance Agen21 cy’’. 

22 (f) INSPECTOR GENERAL ACT OF 1978.—Section 

23 8G(a)(2) of the Inspector General Act of 1978 (5 U.S.C. 

24 App.) is amended by striking ‘‘Federal Housing Finance 

25 Board’’ and inserting ‘‘Federal Housing Finance Agency’’. 
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1 (g) FEDERAL DEPOSIT INSURANCE ACT.—Section 

2 11(t)(2)(A) of the Federal Deposit Insurance Act (12 

3 U.S.C.1821(t)(2)(A)) is amended by adding at the end the 

4 following new clause: 

5 ‘‘(vii) The Federal Housing Finance 

6 Agency.’’. 

7 (h) 1997 EMERGENCY SUPPLEMENTAL APPROPRIA8 TIONS ACT.—Section 10001 of the 1997 Emergency Sup9 plemental Appropriations Act for Recovery From Natural 

10 Disasters, and for Overseas Peacekeeping Efforts, Includ11 ing Those In Bosnia (42 U.S.C. 3548) is amended—

12 (1) by striking ‘‘the Government National Mort13 gage Association, and the Office of Federal Housing 

14 Enterprise Oversight’’ and inserting ‘‘and the Gov15 ernment National Mortgage Association’’; and 

16 (2) by striking ‘‘, the Government National 

17 Mortgage Association, or the Office of Federal 

18 Housing Enterprise Oversight’’ and inserting ‘‘or 

19 the Government National Mortgage Association’’. 

20 (i) NATIONAL HOMEOWNERSHIP TRUST ACT.—Sec21 tion 302(b)(4) of the Cranston-Gonzalez National Afford22 able Housing Act (42 U.S.C. 12851(b)(4)) is amended by 

23 striking ‘‘the chairperson of the Federal Housing Finance 

24 Board’’ and inserting ‘‘the Director of the Federal Hous25 ing Finance Agency’’. 
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1 SEC. 184. STUDY OF ALTERNATIVE SECONDARY MARKET 

2 SYSTEMS. 

3 (a) IN GENERAL.—The Director of the Federal 

4 Housing Finance Agency, in consultation with the Board 

5 of Governors of the Federal Reserve System, the Secretary 

6 of the Treasury, and the Secretary of Housing and Urban 

7 Development, shall conduct a comprehensive study of the 

8 effects on financial and housing finance markets of alter9 natives to the current secondary market system for hous10 ing finance, taking into consideration changes in the struc11 ture of financial and housing finance markets and institu12 tions since the creation of the Federal National Mortgage 

13 Association and the Federal Home Loan Mortgage Cor14 poration. 

15 (b) CONTENTS.—The study under this section 

16 shall—

17 (1) include, among the alternatives to the cur18 rent secondary market system analyzed—

19 (A) repeal of the chartering Acts for the 

20 Federal National Mortgage Association and the 

21 Federal Home Loan Mortgage Corporation; 

22 (B) establishing bank-like mechanisms for 

23 granting new charters for limited purposed 

24 mortgage securitization entities; 

25 (C) permitting the Director of the Federal 

26 Housing Finance Agency to grant new charters 
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1 for limited purpose mortgage securitization en2 tities, which shall include analyzing the terms 

3 on which such charters should be granted, in4 cluding whether such charters should be sold, 

5 or whether such charters and the charters for 

6 the Federal National Mortgage Association and 

7 the Federal Home Loan Mortgage Corporation 

8 should be taxed or otherwise assessed a mone9 tary price; and 

10 (D) such other alternatives as the Director 

11 considers appropriate; 

12 (2) examine all of the issues involved in making 

13 the transition to a completely private secondary 

14 mortgage market system; 

15 (3) examine the technological advancements the 

16 private sector has made in providing liquidity in the 

17 secondary mortgage market and how such advance18 ments have affected liquidity in the secondary mort19 gage market; and 

20 (4) examine how taxpayers would be impacted 

21 by each alternative system, including the complete 

22 privatization of the Federal National Mortgage As23 sociation and the Federal Home Loan Mortgage 

24 Corporation. 
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1 (c) REPORT.—The Director of the Federal Housing 

2 Finance Agency shall submit a report to the Congress on 

3 the study not later than the expiration of the 24-month 

4 period beginning on the effective date under section 185. 

5 SEC. 185. EFFECTIVE DATE. 

6 Except as specifically provided otherwise in this title, 

7 this title shall take effect on and the amendments made 

8 by this title shall take effect on, and shall apply beginning 

9 on, the expiration of the 6-month period beginning on the 

10 date of the enactment of this Act. 

11 TITLE II—FEDERAL HOME LOAN 

12 BANKS 

13 SEC. 201. DEFINITIONS. 

14 Section 2 of the Federal Home Loan Bank Act (12 

15 U.S.C. 1422) is amended—

16 (1) by striking paragraphs (1), (10), and (11); 

17 (2) by redesignating paragraphs (2) through 

18 (9) as paragraphs (1) through (8), respectively; 

19 (3) by redesignating paragraphs (12) and (13) 

20 as paragraphs (9) and (10), respectively; and 

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

22 ‘‘(11) DIRECTOR.—The term ‘Director’ means 

23 the Director of the Federal Housing Finance Agen24 cy. 
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1 ‘‘(12) AGENCY.—The term ‘Agency’ means the 

2 Federal Housing Finance Agency.’’. 

3 SEC. 202. DIRECTORS. 

4 (a) ELECTION.—Section 7 of the Federal Home Loan 

5 Bank Act (12 U.S.C. 1427) is amended—

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

7 following: 

8 ‘‘(a) NUMBER; ELECTION; QUALIFICATIONS; CON9 FLICTS OF INTEREST.—

10 ‘‘(1) IN GENERAL.—The management of each 

11 Federal Home Loan Bank shall be vested in a board 

12 of 13 directors, or such other number as the Direc13 tor determines appropriate, each of whom shall be a 

14 citizen of the United States. All directors of a Bank 

15 who are not independent directors pursuant to para16 graph (3) shall be elected by the members. 

17 ‘‘(2) MEMBER DIRECTORS.—A majority of the 

18 directors of each Bank shall be officers or directors 

19 of a member of such Bank that is located in the dis20 trict in which such Bank is located. 

21 ‘‘(3) INDEPENDENT DIRECTORS.—At least two22 fifths of the directors of each Bank shall be inde23 pendent directors, who shall be appointed by the Di24 rector of the Federal Housing Finance Agency from 

25 a list of individuals recommended by the Federal 
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1 Housing Enterprise Board. The Federal Housing 

2 Enterprise Board may recommend individuals who 

3 are identified by the Board’s own independent proc4 ess or included on a list of individuals recommended 

5 by the board of directors of the Bank involved, 

6 which shall be submitted to the Federal Housing 

7 Enterprise Board by such board of directors. The 

8 number of individuals on any such list submitted by 

9 a Bank’s board of directors shall be equal to at least 

10 two times the number of independent directorships 

11 to be filled. All independent directors appointed shall 

12 meet the following criteria: 

13 ‘‘(A) IN GENERAL.—Each independent di14 rector shall be a bona fide resident of the dis15 trict in which such Bank is located. 

16 ‘‘(B) PUBLIC INTEREST DIRECTORS.—At 

17 least 2 of the independent directors under this 

18 paragraph of each Bank shall be representatives 

19 chosen from organizations with more than a 2-

20 year history of representing consumer or com21 munity interests on banking services, credit 

22 needs, housing, community development, eco23 nomic development, or financial consumer pro24 tections. 

25 ‘‘(C) OTHER DIRECTORS.—
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1 ‘‘(i) QUALIFICATIONS.—Each inde2 pendent director that is not a public inter3 est director under subparagraph (B) shall 

4 have demonstrated knowledge of, or experi5 ence in, financial management, auditing 

6 and accounting, risk management prac7 tices, derivatives, project development, or 

8 organizational management, or such other 

9 knowledge or expertise as the Director may 

10 provide by regulation. 

11 ‘‘(ii) CONSULTATION WITH BANKS.—

12 In appointing other directors to serve on 

13 the board of a Federal home loan bank, 

14 the Director of the Federal Housing Fi15 nance Agency may consult with each Fed16 eral home loan bank about the knowledge, 

17 skills, and expertise needed to assist the 

18 board in better fulfilling its responsibilities. 

19 ‘‘(D) CONFLICTS OF INTEREST.—Notwith20 standing subsection (f)(2), an independent di21 rector under this paragraph of a Bank may not, 

22 during such director’s term of office, serve as 

23 an officer of any Federal Home Loan Bank or 

24 as a director or officer of any member of a 

25 Bank. 
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1 ‘‘(E) COMMUNITY DEMOGRAPHICS.—In ap2 pointing independent directors of a Bank pur3 suant to this paragraph, the Director shall take 

4 into consideration the demographic makeup of 

5 the community most served by the Affordable 

6 Housing Program of the Bank pursuant to sec7 tion 10(j).’’; 

8 (2) in the first sentence of subsection (b), by 

9 striking ‘‘elective directorship’’ and inserting ‘‘mem10 ber directorship established pursuant to subsection 

11 (a)(2)’’; 

12 (3) in subsection (c)—

13 (A) by striking ‘‘elective’’ each place such 

14 term appears and inserting ‘‘member’’, ex15 cept—

16 (i) in the second sentence, the second 

17 place such term appears; and 

18 (ii) each place such term appears in 

19 the fifth sentence; 

20 (B) in the first sentence, by inserting after 

21 ‘‘less than one’’ the following: ‘‘or two, as deter22 mined by the board of directors of the appro23 priate Federal home loan bank,’’; and 

24 (C) in the second sentence—
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1 (i) by inserting ‘‘(A) except as pro2 vided in clause (B) of this sentence,’’ be3 fore ‘‘if at any time’’; and 

4 (ii) by inserting before the period at 

5 the end the following: ‘‘, and (B) clause 

6 (A) of this sentence shall not apply to the 

7 directorships of any Federal home loan 

8 bank resulting from the merger of any two 

9 or more such banks’’; and 

10 (4) by striking ‘‘elective’’ each place such term 

11 appears (except in subsections (c), (e), and (f)). 

12 (b) TERMS.—

13 (1) IN GENERAL.—Section 7(d) of the Federal 

14 Home Loan Bank Act (12 U.S.C. 1427(d)) is 

15 amended—

16 (A) in the first sentence, by striking ‘‘3 

17 years’’ and inserting ‘‘4 years’’; and 

18 (B) in the second sentence—

19 (i) by striking ‘‘Federal Home Loan 

20 Bank System Modernization Act of 1999’’ 

21 and inserting ‘‘Federal Housing Finance 

22 Reform Act of 2007’’; and 

23 (ii) by striking ‘‘1/3’’ and inserting 

24 ‘‘1/4’’. 
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1 (2) SAVINGS PROVISION.—The amendments 

2 made by paragraph (1) shall not apply to the term 

3 of office of any director of a Federal home loan bank 

4 who is serving as of the effective date of this title 

5 under section 211, including any director elected to 

6 fill a vacancy in any such office. 

7 (c) CONTINUED SERVICE OF INDEPENDENT DIREC8 TORS AFTER EXPIRATION OF TERM.—Section 7(f)(2) of 

9 the Federal Home Loan Bank Act (12 U.S.C. 1427(f)(2)) 

10 is amended—

11 (1) in the second sentence, by striking ‘‘or the 

12 term of such office expires, whichever occurs first’’; 

13 (2) by adding at the end the following new sen14 tence: ‘‘An independent Bank director may continue 

15 to serve as a director after the expiration of the 

16 term of such director until a successor is ap17 pointed.’’; 

18 (3) in the paragraph heading, by striking ‘‘AP19 POINTED’’ and inserting ‘‘INDEPENDENT’’; and 

20 (4) by striking ‘‘appointive’’ each place such 

21 term appears and inserting ‘‘independent’’. 

22 (d) CONFORMING AMENDMENTS.—Section 7(f)(3) of 

23 the Federal Home Loan Bank Act (12 U.S.C. 1427(f)(3)) 

24 is amended—
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1 (1) in the paragraph heading, by striking 

2 ‘‘ELECTED’’ and inserting ‘‘MEMBER’’; and 

3 (2) by striking ‘‘elective’’ each place such term 

4 appears in the first and third sentences and insert5 ing ‘‘member’’. 

6 (e) COMPENSATION.—Subsection (i) of section 7 of 

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

8 is amended to read as follows: 

9 ‘‘(i) DIRECTORS’ COMPENSATION.—

10 ‘‘(1) IN GENERAL.—Each Federal home loan 

11 bank may pay the directors on the board of directors 

12 for the bank reasonable and appropriate compensa13 tion for the time required of such directors, and rea14 sonable and appropriate expenses incurred by such 

15 directors, in connection with service on the board of 

16 directors, in accordance with resolutions adopted by 

17 the board of directors and subject to the approval of 

18 the Director. 

19 ‘‘(2) ANNUAL REPORT BY THE BOARD.—The 

20 Director shall include, in the annual report sub21 mitted to the Congress pursuant to section 1319B of 

22 the Federal Housing Enterprises Financial Safety 

23 and Soundness Act of 1992, information regarding 

24 the compensation and expenses paid by the Federal 
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1 home loan banks to the directors on the boards of 

2 directors of the banks.’’. 

3 (f) TRANSITION RULE.—Any member of the board 

4 of directors of a Federal Home Loan Bank serving as of 

5 the effective date under section 211 may continue to serve 

6 as a member of such board of directors for the remainder 

7 of the term of such office as provided in section 7 of the 

8 Federal Home Loan Bank Act, as in effect before such 

9 effective date. 

10 SEC. 203. FEDERAL HOUSING FINANCE AGENCY OVER11 SIGHT OF FEDERAL HOME LOAN BANKS. 

12 The Federal Home Loan Bank Act (12 U.S.C. 1421 

13 et seq.), other than in provisions of that Act added or 

14 amended otherwise by this Act, is amended—

15 (1) by striking sections 2A and 2B (12 U.S.C. 

16 1422a, 1422b); 

17 (2) in section 6 (12 U.S.C. 1426(b)(1))—

18 (A) in subsection (b)(1), in the matter pre19 ceding subparagraph (A), by striking ‘‘Finance 

20 Board approval’’ and inserting ‘‘approval by the 

21 Director’’; and 

22 (B) in each of subsections (c)(4)(B) and 

23 (d)(2), by striking ‘‘Finance Board regulations’’ 

24 each place that term appears and inserting 

25 ‘‘regulations of the Director’’; 
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1 (3) in section 8 (12 U.S.C. 1428), in the sec2 tion heading, by striking ‘‘BY THE BOARD’’; 

3 (4) in section 10(b) (12 U.S.C. 1430(b)), by 

4 striking ‘‘by formal resolution’’; 

5 (5) in section 10 (12 U.S.C. 1430), by adding 

6 at the end the following new subsection: 

7 ‘‘(k) MONITORING AND ENFORCING COMPLIANCE

8 WITH AFFORDABLE HOUSING AND COMMUNITY INVEST9 MENT PROGRAM REQUIREMENTS.—The requirements 

10 under subsection (i) and (j) that the Banks establish Com11 munity Investment and Affordable Housing Programs, re12 spectively, and contribute to the Affordable Housing Pro13 gram, shall be enforceable by the Director with respect 

14 to the Banks in the same manner and to the same extent 

15 as the housing goals under subpart B of part 2 of subtitle 

16 A of title XIII of the Housing and Community Develop17 ment Act of 1992 (12 U.S.C. 4561 et seq.) are enforceable 

18 under section 1336 of such Act with respect to the Federal 

19 National Mortgage Association and the Federal Home 

20 Loan Mortgage Corporation.’’; 

21 (6) in section 11 (12 U.S.C. 1431)—

22 (A) in subsection (b)—

23 (i) in the first sentence—
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1 (I) by striking ‘‘The Board’’ and 

2 inserting ‘‘The Office of Finance, as 

3 agent for the Banks,’’; and 

4 (II) by striking ‘‘the Board’’ and 

5 inserting ‘‘such Office’’; and 

6 (ii) in the second and fourth sen7 tences, by striking ‘‘the Board’’ each place 

8 such term appears and inserting ‘‘the Of9 fice of Finance’’; 

10 (B) in subsection (c)—

11 (i) by striking ‘‘the Board’’ the first 

12 place such term appears and inserting ‘‘the 

13 Office of Finance, as agent for the 

14 Banks,’’; and 

15 (ii) by striking ‘‘the Board’’ the sec16 ond place such term appears and inserting 

17 ‘‘such Office’’; and 

18 (C) in subsection (f)—

19 (i) by striking the two commas after 

20 ‘‘permit’’ and inserting ‘‘or’’; and 

21 (ii) by striking the comma after ‘‘re22 quire’’; 

23 (7) in section 15 (12 U.S.C. 1435), by inserting 

24 ‘‘or the Director’’ after ‘‘the Board’’; 
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1 (8) in section 18 (12 U.S.C. 1438), by striking 

2 subsection (b); 

3 (9) in section 21 (12 U.S.C. 1441)—

4 (A) in subsection (b)—

5 (i) in paragraph (5), by striking 

6 ‘‘Chairperson of the Federal Housing Fi7 nance Board’’ and inserting ‘‘Director’’; 

8 and 

9 (ii) in the heading for paragraph (8), 

10 by striking ‘‘FEDERAL HOUSING FINANCE

11 BOARD’’ and inserting ‘‘DIRECTOR’’; and 

12 (B) in subsection (i), in the heading for 

13 paragraph (2), by striking ‘‘FEDERAL HOUSING

14 FINANCE BOARD’’ and inserting ‘‘DIRECTOR’’; 

15 (10) in section 23 (12 U.S.C. 1443), by striking 

16 ‘‘Board of Directors of the Federal Housing Finance 

17 Board’’ and inserting ‘‘Director’’; 

18 (11) by striking ‘‘the Board’’ each place such 

19 term appears in such Act (except in section 15 (12 

20 U.S.C. 1435), section 21(f)(2) (12 U.S.C. 

21 1441(f)(2)), subsections (a), (k)(2)(B)(i), and 

22 (n)(6)(C)(ii) of section 21A (12 U.S.C. 1441a), sub23 sections (f)(2)(C), and (k)(7)(B)(ii) of section 21B 

24 (12 U.S.C. 1441b), and the first two places such 
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1 term appears in section 22 (12 U.S.C. 1442)) and 

2 inserting ‘‘the Director’’; 

3 (12) by striking ‘‘The Board’’ each place such 

4 term appears in such Act (except in sections 7(e) 

5 (12 U.S.C. 1427(e)), and 11(b) (12 U.S.C. 1431(b)) 

6 and inserting ‘‘The Director’’; 

7 (13) by striking ‘‘the Board’s’’ each place such 

8 term appears in such Act and inserting ‘‘the Direc9 tor’s’’; 

10 (14) by striking ‘‘The Board’s’’ each place such 

11 term appears in such Act and inserting ‘‘The Direc12 tor’s’’; 

13 (15) by striking ‘‘the Finance Board’’ each 

14 place such term appears in such Act and inserting 

15 ‘‘the Director’’; 

16 (16) by striking ‘‘Federal Housing Finance 

17 Board’’ each place such term appears and inserting 

18 ‘‘Director’’; 

19 (17) in section 11(i) (12 U.S.C. 1431(i), by 

20 striking ‘‘the Chairperson of’’; and 

21 (18) in section 21(e)(9) (12 U.S.C. 1441(e)(9)), 

22 by striking ‘‘Chairperson of the’’. 
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1 SEC. 204. JOINT ACTIVITIES OF BANKS. 

2 Section 11 of the Federal Home Loan Bank Act (12 

3 U.S.C. 1431) is amended by adding at the end the fol4 lowing new subsection: 

5 ‘‘(l) JOINT ACTIVITIES.—Subject to the regulation of 

6 the Director, any two or more Federal Home Loan Banks 

7 may establish a joint office for the purpose of performing 

8 functions for, or providing services to, the Banks on a 

9 common or collective basis, or may require that the Office 

10 of Finance perform such functions or services, but only 

11 if the Banks are otherwise authorized to perform such 

12 functions or services individually.’’. 

13 SEC. 205. SHARING OF INFORMATION BETWEEN FEDERAL 

14 HOME LOAN BANKS. 

15 (a) IN GENERAL.—The Federal Home Loan Bank 

16 Act is amended by inserting after section 20 (12 U.S.C. 

17 1440) the following new section: 

18 ‘‘SEC. 20A. SHARING OF INFORMATION BETWEEN FEDERAL 

19 HOME LOAN BANKS. 

20 ‘‘(a) REGULATORY AUTHORITY.—The Director shall 

21 prescribe such regulations as may be necessary to ensure 

22 that each Federal Home Loan Bank has access to infor23 mation that the Bank needs to determine the nature and 

24 extent of its joint and several liability. 

25 ‘‘(b) NO WAIVER OF PRIVILEGE.—The Director shall 

26 not be deemed to have waived any privilege applicable to 
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1 any information concerning a Federal Home Loan Bank 

2 by transferring, or permitting the transfer of, that infor3 mation to any other Federal Home Loan Bank for the 

4 purpose of enabling the recipient to evaluate the nature 

5 and extent of its joint and several liability.’’. 

6 (b) REGULATIONS.—The regulations required under 

7 the amendment made by subsection (a) shall be issued in 

8 final form not later than 6 months after the effective date 

9 under section 211 of this Act. 

10 SEC. 206. REORGANIZATION OF BANKS AND VOLUNTARY 

11 MERGER. 

12 Section 26 of the Federal Home Loan Bank Act (12 

13 U.S.C. 1446) is amended—

14 (1) by inserting ‘‘(a) REORGANIZATION.—’’ be15 fore ‘‘Whenever’’; and 

16 (2) by striking ‘‘liquidated or’’ each place such 

17 phrase appears; 

18 (3) by striking ‘‘liquidation or’’; and 

19 (4) by adding at the end the following new sub20 section: 

21 ‘‘(b) VOLUNTARY MERGERS.—Any two or more 

22 Banks may, with the approval of the Director, and the 

23 approval of the boards of directors of the Banks involved, 

24 merge. The Director shall promulgate regulations estab25 lishing the conditions and procedures for the consideration 
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1 and approval of any such voluntary merger, including the 

2 procedures for Bank member approval.’’. 

3 SEC. 207. SECURITIES AND EXCHANGE COMMISSION DIS4 CLOSURE. 

5 (a) IN GENERAL.—The Federal Home Loan Banks 

6 shall be exempt from compliance with—

7 (1) sections 13(e), 14(a), 14(c), and 17A of the 

8 Securities Exchange Act of 1934 and related Com9 mission regulations; and 

10 (2) section 15 of that Act and related Securities 

11 and Exchange Commission regulations with respect 

12 to transactions in capital stock of the Banks. 

13 (b) MEMBER EXEMPTION.—The members of the 

14 Federal Home Loan Banks shall be exempt from compli15 ance with sections 13(d), 13(f), 13(g), 14(d), and 16 of 

16 the Securities Exchange Act of 1934 and related Securi17 ties and Exchange Commission regulations with respect 

18 to their ownership of, or transactions in, capital stock of 

19 the Federal Home Loan Banks. 

20 (c) EXEMPTED AND GOVERNMENT SECURITIES.—

21 (1) CAPITAL STOCK.—The capital stock issued 

22 by each of the Federal Home Loan Banks under 

23 section 6 of the Federal Home Loan Bank Act are—
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1 (A) exempted securities within the mean2 ing of section 3(a)(2) of the Securities Act of 

3 1933; and 

4 (B) ‘‘exempted securities’’ within the 

5 meaning of section 3(a)(12)(A) of the Securities 

6 Exchange Act of 1934. 

7 (2) OTHER OBLIGATIONS.—The debentures, 

8 bonds, and other obligations issued under section 11 

9 of the Federal Home Loan Bank Act are—

10 (A) exempted securities within the mean11 ing of section 3(a)(2) of the Securities Act of 

12 1933; 

13 (B) ‘‘government securities’’ within the 

14 meaning of section 3(a)(42) of the Securities 

15 Exchange Act of 1934; 

16 (C) excluded from the definition of ‘‘gov17 ernment securities broker’’ within section 

18 3(a)(43) of the Securities Exchange Act of 

19 1934; 

20 (D) excluded from the definition of ‘‘gov21 ernment securities dealer’’ within section 

22 3(a)(44) of the Securities Exchange Act of 

23 1934; and 
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1 (E) ‘‘government securities’’ within the 

2 meaning of section 2(a)(16) of the Investment 

3 Company Act of 1940. 

4 (d) EXEMPTION FROM REPORTING REQUIRE5 MENTS.—The Federal Home Loan Banks shall be exempt 

6 from periodic reporting requirements pertaining to—

7 (1) the disclosure of related party transactions 

8 that occur in the ordinary course of business of the 

9 Banks with their members; and 

10 (2) the disclosure of unregistered sales of equity 

11 securities. 

12 (e) TENDER OFFERS.—The Securities and Exchange 

13 Commission’s rules relating to tender offers shall not 

14 apply in connection with transactions in capital stock of 

15 the Federal Home Loan Banks. 

16 (f) REGULATIONS.—In issuing any final regulations 

17 to implement provisions of this section, the Securities and 

18 Exchange Commission shall consider the distinctive char19 acteristics of the Federal Home Loan Banks when evalu20 ating the accounting treatment with respect to the pay21 ment to Resolution Funding Corporation, the role of the 

22 combined financial statements of the twelve Banks, the ac23 counting classification of redeemable capital stock, and the 

24 accounting treatment related to the joint and several na25 ture of the obligations of the Banks. 
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1 SEC. 208. COMMUNITY FINANCIAL INSTITUTION MEMBERS. 

2 (a) TOTAL ASSET REQUIREMENT.—Paragraph (10) 

3 of section 2 of the Federal Home Loan Bank Act (12 

4 U.S.C. 1422(10)), as so redesignated by section 201(3) 

5 of this Act, is amended by striking ‘‘$500,000,000’’ each 

6 place such term appears and inserting ‘‘$1,000,000,000’’. 

7 (b) USE OF ADVANCES FOR COMMUNITY DEVELOP8 MENT ACTIVITIES.—Section 10(a) of the Federal Home 

9 Loan Bank Act (12 U.S.C. 1430(a)) is amended—

10 (1) in paragraph (2)(B)—

11 (A) by striking ‘‘and’’; and 

12 (B) by inserting ‘‘, and community devel13 opment activities’’ before the period at the end; 

14 (2) in paragraph (3)(E), by inserting ‘‘or com15 munity development activities’’ after ‘‘agriculture,’’; 

16 and 

17 (3) in paragraph (6)—

18 (A) by striking ‘‘and’’; and 

19 (B) by inserting ‘‘, and ‘community devel20 opment activities’ ’’ before ‘‘shall’’. 

21 SEC. 209. TECHNICAL AND CONFORMING AMENDMENTS. 

22 (a) RIGHT TO FINANCIAL PRIVACY ACT OF 1978.—

23 Section 1113(o) of the Right to Financial Privacy Act of 

24 1978 (12 U.S.C. 3413(o)) is amended—
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1 (1) by striking ‘‘Federal Housing Finance 

2 Board’’ and inserting ‘‘Federal Housing Finance 

3 Agency’’; and 

4 (2) by striking ‘‘Federal Housing Finance 

5 Board’s’’ and inserting ‘‘Federal Housing Finance 

6 Agency’s’’. 

7 (b) RIEGLE COMMUNITY DEVELOPMENT AND REGU8 LATORY IMPROVEMENT ACT OF 1994.—Section 117(e) of 

9 the Riegle Community Development and Regulatory Im10 provement Act of 1994 (12 U.S.C. 4716(e)) is amended 

11 by striking ‘‘Federal Housing Finance Board’’ and insert12 ing ‘‘Federal Housing Finance Agency’’. 

13 (c) TITLE 18, UNITED STATES CODE.—Title 18, 

14 United States Code, is amended by striking ‘‘Federal 

15 Housing Finance Board’’ each place such term appears 

16 in each of sections 212, 657, 1006, 1014, and inserting 

17 ‘‘Federal Housing Finance Agency’’. 

18 (d) MARA ACT OF 1997.—Section 517(b)(4) of the 

19 Multifamily Assisted Housing Reform and Affordability 

20 Act of 1997 (42 U.S.C. 1437f note) is amended by strik21 ing ‘‘Federal Housing Finance Board’’ and inserting 

22 ‘‘Federal Housing Finance Agency’’. 

23 (e) TITLE 44, UNITED STATES CODE.—Section 

24 3502(5) of title 44, United States Code, is amended by 
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1 striking ‘‘Federal Housing Finance Board’’ and inserting 

2 ‘‘Federal Housing Finance Agency’’. 

3 (f) ACCESS TO LOCAL TV ACT OF 2000.—Section 

4 1004(d)(2)(D)(iii) of the Launching Our Communities’ 

5 Access to Local Television Act of 2000 (47 U.S.C. 

6 1103(d)(2)(D)(iii)) is amended by striking ‘‘Office of Fed7 eral Housing Enterprise Oversight, the Federal Housing 

8 Finance Board’’ and inserting ‘‘Federal Housing Finance 

9 Agency’’. 

10 (g) SARBANES-OXLEY ACT OF 2002.—Section 

11 105(b)(5)(B)(ii)(II) of the Sarbanes-Oxley Act of 2002 

12 (15 U.S.C. 7215(B)(5)(b)(ii)(II)) is amended by inserting 

13 ‘‘and the Director of the Federal Housing Finance Agen14 cy’’ after ‘‘Commission,’’. 

15 SEC. 210. STUDY OF AFFORDABLE HOUSING PROGRAM USE 

16 FOR LONG-TERM CARE FACILITIES. 

17 The Comptroller General shall conduct a study of the 

18 use of affordable housing programs of the Federal home 

19 loan banks under section 10(j) of the Federal Home Loan 

20 Bank Act to determine how and the extent to which such 

21 programs are used to assist long-term care facilities for 

22 low- and moderate-income individuals, and the effective23 ness and adequacy of such assistance in meeting the needs 

24 of affected communities. The study shall examine the ap25 plicability of such use to the affordable housing programs 
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1 required to be established by the enterprises pursuant to 

2 the amendment made by section 139 of this Act. The 

3 Comptroller General shall submit a report to the Director 

4 of the Federal Housing Finance Agency and the Congress 

5 regarding the results of the study not later than the expi6 ration of the 1-year period beginning on the date of the 

7 enactment of this Act. This section shall take effect on 

8 the date of the enactment of this Act. 

9 SEC. 211. EFFECTIVE DATE. 

10 Except as specifically provided otherwise in this title, 

11 this title shall take effect on and the amendments made 

12 by this title shall take effect on, and shall apply beginning 

13 on, the expiration of the 6-month period beginning on the 

14 date of the enactment of this Act. 
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1 TITLE III—TRANSFER OF FUNC2 TIONS, PERSONNEL, AND 

3 PROPERTY OF OFFICE OF 

4 FEDERAL HOUSING ENTER5 PRISE OVERSIGHT, FEDERAL 

6 HOUSING FINANCE BOARD, 

7 AND DEPARTMENT OF HOUS8 ING AND URBAN DEVELOP9 MENT 

10 Subtitle A—Office of Federal 

11 Housing Enterprise Oversight 

12 SEC. 301. ABOLISHMENT OF OFHEO. 

13 (a) IN GENERAL.—Effective at the end of the 6-

14 month period beginning on the date of the enactment of 

15 this Act, the Office of Federal Housing Enterprise Over16 sight of the Department of Housing and Urban Develop17 ment and the positions of the Director and Deputy Direc18 tor of such Office are abolished. 

19 (b) DISPOSITION OF AFFAIRS.—During the 6-month 

20 period beginning on the date of the enactment of this Act, 

21 the Director of the Office of Federal Housing Enterprise 

22 Oversight shall, for the purpose of winding up the affairs 

23 of the Office of Federal Housing Enterprise Oversight and 

24 in addition to carrying out its other responsibilities under 

25 law—
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1 (1) manage the employees of such Office and 

2 provide for the payment of the compensation and 

3 benefits of any such employee which accrue before 

4 the effective date of the transfer of such employee 

5 pursuant to section 303; and 

6 (2) may take any other action necessary for the 

7 purpose of winding up the affairs of the Office. 

8 (c) STATUS OF EMPLOYEES BEFORE TRANSFER.—

9 The amendments made by title I and the abolishment of 

10 the Office of Federal Housing Enterprise Oversight under 

11 subsection (a) of this section may not be construed to af12 fect the status of any employee of such Office as employ13 ees of an agency of the United States for purposes of any 

14 other provision of law before the effective date of the 

15 transfer of any such employee pursuant to section 303. 

16 (d) USE OF PROPERTY AND SERVICES.—

17 (1) PROPERTY.—The Director of the Federal 

18 Housing Finance Agency may use the property of 

19 the Office of Federal Housing Enterprise Oversight 

20 to perform functions which have been transferred to 

21 the Director of the Federal Housing Finance Agency 

22 for such time as is reasonable to facilitate the or23 derly transfer of functions transferred pursuant to 

24 any other provision of this Act or any amendment 

25 made by this Act to any other provision of law. 
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1 (2) AGENCY SERVICES.—Any agency, depart2 ment, or other instrumentality of the United States, 

3 and any successor to any such agency, department, 

4 or instrumentality, which was providing supporting 

5 services to the Office of Federal Housing Enterprise 

6 Oversight before the expiration of the period under 

7 subsection (a) in connection with functions that are 

8 transferred to the Director of the Federal Housing 

9 Finance Agency shall—

10 (A) continue to provide such services, on a 

11 reimbursable basis, until the transfer of such 

12 functions is complete; and 

13 (B) consult with any such agency to co14 ordinate and facilitate a prompt and reasonable 

15 transition. 

16 (e) SAVINGS PROVISIONS.—

17 (1) EXISTING RIGHTS, DUTIES, AND OBLIGA18 TIONS NOT AFFECTED.—Subsection (a) shall not af19 fect the validity of any right, duty, or obligation of 

20 the United States, the Director of the Office of Fed21 eral Housing Enterprise Oversight, or any other per22 son, which—

23 (A) arises under or pursuant to the title 

24 XIII of the Housing and Community Develop25 ment Act of 1992, the Federal National Mort-
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1 gage Association Charter Act, the Federal 

2 Home Loan Mortgage Corporation Act, or any 

3 other provision of law applicable with respect to 

4 such Office; and 

5 (B) existed on the day before the abolish6 ment under subsection (a) of this section. 

7 (2) CONTINUATION OF SUITS.—No action or 

8 other proceeding commenced by or against the Di9 rector of the Office of Federal Housing Enterprise 

10 Oversight in connection with functions that are 

11 transferred to the Director of the Federal Housing 

12 Finance Agency shall abate by reason of the enact13 ment of this Act, except that the Director of the 

14 Federal Housing Finance Agency shall be sub15 stituted for the Director of the Office of Federal 

16 Housing Enterprise Oversight as a party to any 

17 such action or proceeding. 

18 SEC. 302. CONTINUATION AND COORDINATION OF CERTAIN 

19 REGULATIONS. 

20 All regulations, orders, determinations, and resolu21 tions that—

22 (1) were issued, made, prescribed, or allowed to 

23 become effective by—

24 (A) the Office of Federal Housing Enter25 prise Oversight; or 
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1 (B) a court of competent jurisdiction and 

2 that relate to functions transferred by this sub3 title; and 

4 (2) are in effect on the date of the abolishment 

5 under section 301(a) of this Act, shall remain in ef6 fect according to the terms of such regulations, or7 ders, determinations, and resolutions, and shall be 

8 enforceable by or against the Director of the Federal 

9 Housing Finance Agency until modified, terminated, 

10 set aside, or superseded in accordance with applica11 ble law by such Director, as the case may be, any 

12 court of competent jurisdiction, or operation of law. 

13 SEC. 303. TRANSFER AND RIGHTS OF EMPLOYEES OF 

14 OFHEO. 

15 (a) TRANSFER.—Each employee of the Office of Fed16 eral Housing Enterprise Oversight shall be transferred to 

17 the Federal Housing Finance Agency for employment no 

18 later than the date of the abolishment under section 

19 301(a) of this Act and such transfer shall be deemed a 

20 transfer of function for purposes of section 3503 of title 

21 5, United States Code. 

22 (b) GUARANTEED POSITIONS.—Each employee trans23 ferred under subsection (a) shall be guaranteed a position 

24 with the same status, tenure, grade, and pay as that held 

25 on the day immediately preceding the transfer. Each such 
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1 employee holding a permanent position shall not be invol2 untarily separated or reduced in grade or compensation 

3 for 12 months after the date of transfer, except for cause 

4 or, if the employee is a temporary employee, separated in 

5 accordance with the terms of the appointment. 

6 (c) APPOINTMENT AUTHORITY FOR EXCEPTED

7 SERVICE EMPLOYEES.—

8 (1) IN GENERAL.—In the case of employees oc9 cupying positions in the excepted service, any ap10 pointment authority established pursuant to law or 

11 regulations of the Office of Personnel Management 

12 for filling such positions shall be transferred, subject 

13 to paragraph (2). 

14 (2) DECLINE OF TRANSFER.—The Director of 

15 the Federal Housing Finance Agency may decline a 

16 transfer of authority under paragraph (1) (and the 

17 employees appointed pursuant thereto) to the extent 

18 that such authority relates to positions excepted 

19 from the competitive service because of their con20 fidential, policy-making, policy-determining, or pol21 icy-advocating character. 

22 (d) REORGANIZATION.—If the Director of the Fed23 eral Housing Finance Agency determines, after the end 

24 of the 1-year period beginning on the date of the abolish25 ment under section 301(a), that a reorganization of the 
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1 combined work force is required, that reorganization shall 

2 be deemed a major reorganization for purposes of afford3 ing affected employees retirement under section 

4 8336(d)(2) or 8414(b)(1)(B) of title 5, United States 

5 Code. 

6 (e) EMPLOYEE BENEFIT PROGRAMS.—Any employee 

7 of the Office of Federal Housing Enterprise Oversight ac8 cepting employment with the Director of the Federal 

9 Housing Finance Agency as a result of a transfer under 

10 subsection (a) may retain for 12 months after the date 

11 such transfer occurs membership in any employee benefit 

12 program of the Federal Housing Finance Agency or the 

13 Office of Federal Housing Enterprise Oversight, as appli14 cable, including insurance, to which such employee belongs 

15 on the date of the abolishment under section 301(a) if—

16 (1) the employee does not elect to give up the 

17 benefit or membership in the program; and 

18 (2) the benefit or program is continued by the 

19 Director of the Federal Housing Finance Agency, 

20 The difference in the costs between the benefits which 

21 would have been provided by such agency and those pro22 vided by this section shall be paid by the Director of the 

23 Federal Housing Finance Agency. If any employee elects 

24 to give up membership in a health insurance program or 

25 the health insurance program is not continued by such Di-
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1 rector, the employee shall be permitted to select an alter2 nate Federal health insurance program within 30 days of 

3 such election or notice, without regard to any other regu4 larly scheduled open season. 

5 SEC. 304. TRANSFER OF PROPERTY AND FACILITIES. 

6 Upon the abolishment under section 301(a), all prop7 erty of the Office of Federal Housing Enterprise Oversight 

8 shall transfer to the Director of the Federal Housing Fi9 nance Agency. 

10 Subtitle B—Federal Housing 

11 Finance Board 

12 SEC. 321. ABOLISHMENT OF THE FEDERAL HOUSING FI13 NANCE BOARD. 

14 (a) IN GENERAL.—Effective at the end of the 6-

15 month period beginning on the date of enactment of this 

16 Act, the Federal Housing Finance Board (in this title re17 ferred to as the ‘‘Board’’) is abolished. 

18 (b) DISPOSITION OF AFFAIRS.—During the 6-month 

19 period beginning on the date of enactment of this Act, the 

20 Board, for the purpose of winding up the affairs of the 

21 Board and in addition to carrying out its other responsibil22 ities under law—

23 (1) shall manage the employees of such Board 

24 and provide for the payment of the compensation 

25 and benefits of any such employee which accrue be-
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1 fore the effective date of the transfer of such em2 ployee under section 323; and 

3 (2) may take any other action necessary for the 

4 purpose of winding up the affairs of the Board. 

5 (c) STATUS OF EMPLOYEES BEFORE TRANSFER.—

6 The amendments made by titles I and II and the abolish7 ment of the Board under subsection (a) may not be con8 strued to affect the status of any employee of such Board 

9 as employees of an agency of the United States for pur10 poses of any other provision of law before the effective 

11 date of the transfer of any such employee under section 

12 323. 

13 (d) USE OF PROPERTY AND SERVICES.—

14 (1) PROPERTY.—The Director of the Federal 

15 Housing Finance Agency may use the property of 

16 the Board to perform functions which have been 

17 transferred to the Director of the Federal Housing 

18 Finance Agency for such time as is reasonable to fa19 cilitate the orderly transfer of functions transferred 

20 under any other provision of this Act or any amend21 ment made by this Act to any other provision of law. 

22 (2) AGENCY SERVICES.—Any agency, depart23 ment, or other instrumentality of the United States, 

24 and any successor to any such agency, department, 

25 or instrumentality, which was providing supporting 
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1 services to the Board before the expiration of the pe2 riod under subsection (a) in connection with func3 tions that are transferred to the Director of the 

4 Federal Housing Finance Agency shall—

5 (A) continue to provide such services, on a 

6 reimbursable basis, until the transfer of such 

7 functions is complete; and 

8 (B) consult with any such agency to co9 ordinate and facilitate a prompt and reasonable 

10 transition. 

11 (e) SAVINGS PROVISIONS.—

12 (1) EXISTING RIGHTS, DUTIES, AND OBLIGA13 TIONS NOT AFFECTED.—Subsection (a) shall not af14 fect the validity of any right, duty, or obligation of 

15 the United States, a member of the Board, or any 

16 other person, which—

17 (A) arises under the Federal Home Loan 

18 Bank Act or any other provision of law applica19 ble with respect to such Board; and 

20 (B) existed on the day before the effective 

21 date of the abolishment under subsection (a). 

22 (2) CONTINUATION OF SUITS.—No action or 

23 other proceeding commenced by or against the 

24 Board in connection with functions that are trans25 ferred to the Director of the Federal Housing Fi-
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1 nance Agency shall abate by reason of the enactment 

2 of this Act, except that the Director of the Federal 

3 Housing Finance Agency shall be substituted for the 

4 Board or any member thereof as a party to any such 

5 action or proceeding. 

6 SEC. 322. CONTINUATION AND COORDINATION OF CERTAIN 

7 REGULATIONS. 

8 (a) IN GENERAL.—All regulations, orders, deter9 minations, and resolutions described under subsection (b) 

10 shall remain in effect according to the terms of such regu11 lations, orders, determinations, and resolutions, and shall 

12 be enforceable by or against the Director of the Federal 

13 Housing Finance Agency until modified, terminated, set 

14 aside, or superseded in accordance with applicable law by 

15 such Director, any court of competent jurisdiction, or op16 eration of law. 

17 (b) APPLICABILITY.—A regulation, order, determina18 tion, or resolution is described under this subsection if it—

19 (1) was issued, made, prescribed, or allowed to 

20 become effective by—

21 (A) the Board; or 

22 (B) a court of competent jurisdiction and 

23 relates to functions transferred by this subtitle; 

24 and 
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1 (2) is in effect on the effective date of the abol2 ishment under section 321(a). 

3 SEC. 323. TRANSFER AND RIGHTS OF EMPLOYEES OF THE 

4 FEDERAL HOUSING FINANCE BOARD. 

5 (a) TRANSFER.—Each employee of the Board shall 

6 be transferred to the Federal Housing Finance Agency for 

7 employment not later than the effective date of the abol8 ishment under section 321(a), and such transfer shall be 

9 deemed a transfer of function for purposes of section 3503 

10 of title 5, United States Code. 

11 (b) GUARANTEED POSITIONS.—Each employee trans12 ferred under subsection (a) shall be guaranteed a position 

13 with the same status, tenure, grade, and pay as that held 

14 on the day immediately preceding the transfer. Each such 

15 employee holding a permanent position shall not be invol16 untarily separated or reduced in grade or compensation 

17 for 12 months after the date of transfer, except for cause 

18 or, if the employee is a temporary employee, separated in 

19 accordance with the terms of the appointment. 

20 (c) APPOINTMENT AUTHORITY FOR EXCEPTED AND

21 SENIOR EXECUTIVE SERVICE EMPLOYEES.—

22 (1) IN GENERAL.—In the case of employees oc23 cupying positions in the excepted service or the Sen24 ior Executive Service, any appointment authority es25 tablished under law or by regulations of the Office 
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1 of Personnel Management for filling such positions 

2 shall be transferred, subject to paragraph (2). 

3 (2) DECLINE OF TRANSFER.—The Director of 

4 the Federal Housing Finance Agency may decline a 

5 transfer of authority under paragraph (1) to the ex6 tent that such authority relates to positions excepted 

7 from the competitive service because of their con8 fidential, policymaking, policy-determining, or policy9 advocating character, and noncareer positions in the 

10 Senior Executive Service (within the meaning of sec11 tion 3132(a)(7) of title 5, United States Code). 

12 (d) REORGANIZATION.—If the Director of the Fed13 eral Housing Finance Agency determines, after the end 

14 of the 1-year period beginning on the effective date of the 

15 abolishment under section 321(a), that a reorganization 

16 of the combined workforce is required, that reorganization 

17 shall be deemed a major reorganization for purposes of 

18 affording affected employees retirement under section 

19 8336(d)(2) or 8414(b)(1)(B) of title 5, United States 

20 Code. 

21 (e) EMPLOYEE BENEFIT PROGRAMS.—

22 (1) IN GENERAL.—Any employee of the Board 

23 accepting employment with the Federal Housing Fi24 nance Agency as a result of a transfer under sub25 section (a) may retain for 12 months after the date 
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1 on which such transfer occurs membership in any 

2 employee benefit program of the Federal Housing 

3 Finance Agency or the Board, as applicable, includ4 ing insurance, to which such employee belongs on 

5 the effective date of the abolishment under section 

6 321(a) if—

7 (A) the employee does not elect to give up 

8 the benefit or membership in the program; and 

9 (B) the benefit or program is continued by 

10 the Director of the Federal Housing Finance 

11 Agency. 

12 (2) COST DIFFERENTIAL.—The difference in 

13 the costs between the benefits which would have 

14 been provided by the Board and those provided by 

15 this section shall be paid by the Director of the Fed16 eral Housing Finance Agency. If any employee elects 

17 to give up membership in a health insurance pro18 gram or the health insurance program is not contin19 ued by such Director, the employee shall be per20 mitted to select an alternate Federal health insur21 ance program within 30 days after such election or 

22 notice, without regard to any other regularly sched23 uled open season. 
349

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1 SEC. 324. TRANSFER OF PROPERTY AND FACILITIES. 

2 Upon the effective date of the abolishment under sec3 tion 321(a), all property of the Board shall transfer to 

4 the Director of the Federal Housing Finance Agency. 

5 Subtitle C—Department of Housing 

6 and Urban Development 

7 SEC. 341. TERMINATION OF ENTERPRISE-RELATED FUNC8 TIONS. 

9 (a) TERMINATION DATE.—For purposes of this sub10 title, the term ‘‘termination date’’ means the date that oc11 curs 6 months after the date of the enactment of this Act. 

12 (b) DETERMINATION OF TRANSFERRED FUNCTIONS

13 AND EMPLOYEES.—

14 (1) IN GENERAL.—Not later than the expira15 tion of the 3-month period beginning on the date of 

16 the enactment of this Act, the Secretary, in con17 sultation with the Director of the Office of Federal 

18 Housing Enterprise Oversight, shall determine—

19 (A) the functions, duties, and activities of 

20 the Secretary of Housing and Urban Develop21 ment regarding oversight or regulation of the 

22 enterprises under or pursuant to the author23 izing statutes, title XIII of the Housing and 

24 Community Development Act of 1992, and any 

25 other provisions of law, as in effect before the 

26 date of the enactment of this Act, but not in-
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1 cluding any such functions, duties, and activi2 ties of the Director of the Office of Federal 

3 Housing Enterprise Oversight of the Depart4 ment of Housing and Urban Development and 

5 such Office; and 

6 (B) the employees of the Department of 

7 Housing and Urban Development necessary to 

8 perform such functions, duties, and activities. 

9 (2) ENTERPRISE-RELATED FUNCTIONS.—For 

10 purposes of this subtitle, the term ‘‘enterprise-re11 lated functions of the Department’’ means the func12 tions, duties, and activities of the Department of 

13 Housing and Urban Development determined under 

14 paragraph (1)(A). 

15 (3) ENTERPRISE-RELATED EMPLOYEES.—For 

16 purposes of this subtitle, the term ‘‘enterprise-re17 lated employees of the Department’’ means the em18 ployees of the Department of Housing and Urban 

19 Development determined under paragraph (1)(B). 

20 (c) DISPOSITION OF AFFAIRS.—During the 6-month 

21 period beginning on the date of enactment of this Act, the 

22 Secretary of Housing and Urban Development (in this 

23 title referred to as the ‘‘Secretary’’), for the purpose of 

24 winding up the affairs of the Secretary regarding the en25 terprise-related functions of the Department of Housing 
351

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1 and Urban Development (in this title referred to as the 

2 ‘‘Department’’) and in addition to carrying out the Sec3 retary’s other responsibilities under law regarding such 

4 functions—

5 (1) shall manage the enterprise-related employ6 ees of the Department and provide for the payment 

7 of the compensation and benefits of any such em8 ployee which accrue before the effective date of the 

9 transfer of any such employee under section 343; 

10 and 

11 (2) may take any other action necessary for the 

12 purpose of winding up the enterprise-related func13 tions of the Department. 

14 (d) STATUS OF EMPLOYEES BEFORE TRANSFER.—

15 The amendments made by titles I and II and the termi16 nation of the enterprise-related functions of the Depart17 ment under subsection (b) may not be construed to affect 

18 the status of any employee of the Department as employ19 ees of an agency of the United States for purposes of any 

20 other provision of law before the effective date of the 

21 transfer of any such employee under section 343. 

22 (e) USE OF PROPERTY AND SERVICES.—

23 (1) PROPERTY.—The Director of the Federal 

24 Housing Finance Agency may use the property of 

25 the Secretary to perform functions which have been 
352

•HR 1427 EH

1 transferred to the Director of the Federal Housing 

2 Finance Agency for such time as is reasonable to fa3 cilitate the orderly transfer of functions transferred 

4 under any other provision of this Act or any amend5 ment made by this Act to any other provision of law. 

6 (2) AGENCY SERVICES.—Any agency, depart7 ment, or other instrumentality of the United States, 

8 and any successor to any such agency, department, 

9 or instrumentality, which was providing supporting 

10 services to the Secretary regarding enterprise-related 

11 functions of the Department before the termination 

12 date under subsection (a) in connection with such 

13 functions that are transferred to the Director of the 

14 Federal Housing Finance Agency shall—

15 (A) continue to provide such services, on a 

16 reimbursable basis, until the transfer of such 

17 functions is complete; and 

18 (B) consult with any such agency to co19 ordinate and facilitate a prompt and reasonable 

20 transition. 

21 (f) SAVINGS PROVISIONS.—

22 (1) EXISTING RIGHTS, DUTIES, AND OBLIGA23 TIONS NOT AFFECTED.—Subsection (a) shall not af24 fect the validity of any right, duty, or obligation of 
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•HR 1427 EH

1 the United States, the Secretary, or any other per2 son, which—

3 (A) arises under the authorizing statutes, 

4 title XIII of the Housing and Community De5 velopment Act of 1992, or any other provision 

6 of law applicable with respect to the Secretary, 

7 in connection with the enterprise-related func8 tions of the Department; and 

9 (B) existed on the day before the termi10 nation date under subsection (a). 

11 (2) CONTINUATION OF SUITS.—No action or 

12 other proceeding commenced by or against the Sec13 retary in connection with the enterprise-related func14 tions of the Department shall abate by reason of the 

15 enactment of this Act, except that the Director of 

16 the Federal Housing Finance Agency shall be sub17 stituted for the Secretary or any member thereof as 

18 a party to any such action or proceeding. 

19 SEC. 342. CONTINUATION AND COORDINATION OF CERTAIN 

20 REGULATIONS. 

21 (a) IN GENERAL.—All regulations, orders, and deter22 minations described in subsection (b) shall remain in ef23 fect according to the terms of such regulations, orders, 

24 determinations, and resolutions, and shall be enforceable 

25 by or against the Director of the Federal Housing Finance 
354

•HR 1427 EH

1 Agency until modified, terminated, set aside, or super2 seded in accordance with applicable law by such Director, 

3 any court of competent jurisdiction, or operation of law. 

4 (b) APPLICABILITY.—A regulation, order, or deter5 mination is described under this subsection if it—

6 (1) was issued, made, prescribed, or allowed to 

7 become effective by—

8 (A) the Secretary; or 

9 (B) a court of competent jurisdiction and 

10 that relate to the enterprise-related functions of 

11 the Department; and 

12 (2) is in effect on the termination date under 

13 section 341(a). 

14 SEC. 343. TRANSFER AND RIGHTS OF EMPLOYEES OF DE15 PARTMENT OF HOUSING AND URBAN DEVEL16 OPMENT. 

17 (a) TRANSFER.—

18 (1) IN GENERAL.—Except as provided in para19 graph (2), each enterprise-related employee of the 

20 Department shall be transferred to the Federal 

21 Housing Finance Agency for employment not later 

22 than the termination date under section 341(a) and 

23 such transfer shall be deemed a transfer of function 

24 for purposes of section 3503 of title 5, United States 

25 Code. 
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•HR 1427 EH

1 (2) AUTHORITY TO DECLINE.—An enterprise2 related employee of the Department may, in the dis3 cretion of the employee, decline transfer under para4 graph (1) to a position in the Federal Housing Fi5 nance Agency and shall be guaranteed a position in 

6 the Department with the same status, tenure, grade, 

7 and pay as that held on the day immediately pre8 ceding the date that such declination was made. 

9 Each such employee holding a permanent position 

10 shall not be involuntarily separated or reduced in 

11 grade or compensation for 12 months after the date 

12 that the transfer would otherwise have occurred, ex13 cept for cause or, if the employee is a temporary em14 ployee, separated in accordance with the terms of 

15 the appointment. 

16 (b) GUARANTEED POSITIONS.—Each enterprise-re17 lated employee of the Department transferred under sub18 section (a) shall be guaranteed a position with the same 

19 status, tenure, grade, and pay as that held on the day 

20 immediately preceding the transfer. Each such employee 

21 holding a permanent position shall not be involuntarily 

22 separated or reduced in grade or compensation for 12 

23 months after the date of transfer, except for cause or, if 

24 the employee is a temporary employee, separated in ac25 cordance with the terms of the appointment. 
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•HR 1427 EH

1 (c) APPOINTMENT AUTHORITY FOR EXCEPTED AND

2 SENIOR EXECUTIVE SERVICE EMPLOYEES.—

3 (1) IN GENERAL.—In the case of employees oc4 cupying positions in the excepted service or the Sen5 ior Executive Service, any appointment authority es6 tablished under law or by regulations of the Office 

7 of Personnel Management for filling such positions 

8 shall be transferred, subject to paragraph (2). 

9 (2) DECLINE OF TRANSFER.—The Director of 

10 the Federal Housing Finance Agency may decline a 

11 transfer of authority under paragraph (1) (and the 

12 employees appointed pursuant thereto) to the extent 

13 that such authority relates to positions excepted 

14 from the competitive service because of their con15 fidential, policymaking, policy-determining, or policy16 advocating character, and noncareer positions in the 

17 Senior Executive Service (within the meaning of sec18 tion 3132(a)(7) of title 5, United States Code). 

19 (d) REORGANIZATION.—If the Director of the Fed20 eral Housing Finance Agency determines, after the end 

21 of the 1-year period beginning on the termination date 

22 under section 341(a), that a reorganization of the com23 bined workforce is required, that reorganization shall be 

24 deemed a major reorganization for purposes of affording 
357

•HR 1427 EH

1 affected employees retirement under section 8336(d)(2) or 

2 8414(b)(1)(B) of title 5, United States Code. 

3 (e) EMPLOYEE BENEFIT PROGRAMS.—

4 (1) IN GENERAL.—Any enterprise-related em5 ployee of the Department accepting employment 

6 with the Federal Housing Finance Agency as a re7 sult of a transfer under subsection (a) may retain 

8 for 12 months after the date on which such transfer 

9 occurs membership in any employee benefit program 

10 of the Federal Housing Finance Agency or the De11 partment, as applicable, including insurance, to 

12 which such employee belongs on the termination 

13 date under section 341(a) if—

14 (A) the employee does not elect to give up 

15 the benefit or membership in the program; and 

16 (B) the benefit or program is continued by 

17 the Director of the Federal Housing Finance 

18 Agency. 

19 (2) COST DIFFERENTIAL.—The difference in 

20 the costs between the benefits which would have 

21 been provided by the Department and those provided 

22 by this section shall be paid by the Director of the 

23 Federal Housing Finance Agency. If any employee 

24 elects to give up membership in a health insurance 

25 program or the health insurance program is not con-
358

•HR 1427 EH

1 tinued by such Director, the employee shall be per2 mitted to select an alternate Federal health insur3 ance program within 30 days after such election or 

4 notice, without regard to any other regularly sched5 uled open season. 

6 SEC. 344. TRANSFER OF APPROPRIATIONS, PROPERTY, AND 

7 FACILITIES. 

8 Upon the termination date under section 341(a), all 

9 assets, liabilities, contracts, property, records, and unex10 pended balances of appropriations, authorizations, alloca11 tions, and other funds employed, held, used, arising from, 

12 available to, or to be made available to the Department 

13 in connection with enterprise-related functions of the De14 partment shall transfer to the Director of the Federal 

15 Housing Finance Agency. Unexpended funds transferred 

16 by this section shall be used only for the purposes for 

17 which the funds were originally authorized and appro18 priated. 

Passed the House of Representatives May 22, 2007. 

Attest:

Clerk. 

110TH CONGRESS 

1ST SESSION H. R. 1427

AN ACT

To reform the regulation of certain housing-related 

purposes.Government-sponsored enterprises, and for other