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[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1656 Introduced in Senate (IS)]

108th CONGRESS
  1st Session
                                S. 1656

To address regulation of secondary mortgage market enterprises, and for 
                            other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                           September 25, 2003

  Mr. Corzine introduced the following bill; which was read twice and 
    referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL

 
To address regulation of secondary mortgage market enterprises, and for 
                            other purposes.

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

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Federal Housing 
Enterprise Oversight Modernization Act of 2003''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title and table of contents.
      TITLE I--REFORM OF REGULATION OF FANNIE MAE AND FREDDIE MAC

                 Subtitle A--Improvement of Supervision

Sec. 101. Establishment of Office of Federal Housing Enterprise 
                            Supervision in the Department of the 
                            Treasury.
Sec. 102. Duties and authorities of Director and HUD.
Sec. 103. Examiners and accountants.
Sec. 104. Regulations.
Sec. 105. Assessments.
Sec. 106. Independence of Director in congressional testimony and 
                            recommendations.
Sec. 107. Nonmortgage-related investments.
Sec. 108. Reports.
Sec. 109. Review of enterprises.
Sec. 110. Risk-based capital test for enterprises.
Sec. 111. Minimum and critical capital levels.
Sec. 112. Required disclosures.
Sec. 113. Federal Housing Finance Board.
Sec. 114. Definitions.
                  Subtitle B--Prompt Corrective Action

Sec. 131. Capital classifications.
Sec. 132. Supervisory actions applicable to undercapitalized 
                            enterprises.
Sec. 133. Supervisory actions applicable to significantly 
                            undercapitalized enterprises.
                    Subtitle C--Enforcement Actions

Sec. 151. Cease-and-desist proceedings.
Sec. 152. Temporary cease-and-desist proceedings.
Sec. 153. Removal and prohibition authority.
Sec. 154. Enforcement and jurisdiction.
Sec. 155. Civil money penalties.
Sec. 156. Criminal penalty.
                     Subtitle D--General Provisions

Sec. 161. Conforming and technical amendments.
Sec. 162. Effective date.
        TITLE II--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY

Sec. 201. Abolishment of OFHEO.
Sec. 202. Continuation and coordination of certain regulations.
Sec. 203. Transfer and rights of employees of OFHEO.
Sec. 204. Transfer of property and facilities.

      TITLE I--REFORM OF REGULATION OF FANNIE MAE AND FREDDIE MAC

                 Subtitle A--Improvement of Supervision

SEC. 101. ESTABLISHMENT OF OFFICE OF FEDERAL HOUSING ENTERPRISE 
              SUPERVISION IN THE DEPARTMENT OF THE TREASURY.

    (a) In General.--The Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is amended by 
striking sections 1311 and 1312 and inserting the following:

``SEC. 1311. ESTABLISHMENT OF OFFICE OF FEDERAL HOUSING ENTERPRISE 
              SUPERVISION.

    ``(a) Establishment.--
            ``(1) In general.--There is established the Office of 
        Federal Housing Enterprise Supervision, which shall be an 
        office in the Department of the Treasury.
            ``(2) Authority.--The Office shall succeed to the authority 
        of the Director of the Office of Federal Housing Enterprise 
        Oversight of the Department of Housing and Urban Development 
        and the general regulatory and any other authority of the 
        Secretary of Housing and Urban Development with respect to the 
        enterprises (except as specifically provided otherwise in this 
        title, the Federal National Mortgage Association Charter Act 
        (12 U.S.C. 1716 et seq.), the Federal Home Loan Mortgage 
        Corporation Act (12 U.S.C. 1451 et seq.), or any other 
        provision of Federal law).
    ``(b) Prohibition of Merger of Office.--Notwithstanding any other 
provision of law, the Secretary of the Treasury may not merge or 
consolidate the Office, or any of the functions or responsibilities of 
the Office, with any function or program administered by the Secretary.
    ``(c) Savings Provision.--The authority of the Director to take 
actions under subtitles B and C does not in any way limit the general 
supervisory and regulatory authority granted to the Director under 
subsection (a).

``SEC. 1312. DIRECTOR.

    ``(a) Establishment of Position.--There is established the position 
of the Director of the Office of Federal Housing Enterprise 
Supervision, who shall be the head of the Office.
    ``(b) Appointment; Term.--
            ``(1) Appointment.--The Director shall be appointed by the 
        President, by and with the advice and consent of the Senate, 
        from among individuals who are citizens of the United States.
            ``(2) Term.--The Director shall be appointed for a term of 
        5 years.
            ``(3) Vacancy.--
                    ``(A) In general.--A vacancy in the position of 
                Director that occurs before the expiration of the term 
                for which a Director was appointed shall be filled in 
                the manner established under paragraph (1).
                    ``(B) Term.--The Director appointed to fill a 
                vacancy under subparagraph (A) shall be appointed only 
                for the remainder of such term.
            ``(4) Service after end of term.--An individual may serve 
        as Director after the expiration of the term for which the 
        individual was appointed until a successor has been appointed.
            ``(5) Transitional provision.--Notwithstanding paragraphs 
        (1) and (2), the Director of the Office of Federal Housing 
        Enterprise Oversight of the Department of Housing and Urban 
        Development on the date of enactment of the Federal Housing 
        Enterprise Oversight Modernization Act of 2003, shall serve as 
        the Director until not later than 1 year after the date of 
        enactment of that Act.
    ``(c) Prohibition on Financial Interests.--The Director shall not 
have a direct or indirect financial interest in any enterprise, nor 
hold any office, position, or employment in any enterprise.''.
    (b) Appointment of Director.--Notwithstanding the effective date 
under section 162, or any other provision of law, the President may, at 
any time after the date of enactment of this Act, appoint an individual 
to serve as the Director of the Office of Federal Housing Enterprise 
Supervision, as established under this Act, in accordance with section 
1312 of the Federal Housing Enterprises Financial Safety and Soundness 
Act of 1992, as amended by subsection (a) of this section.

SEC. 102. DUTIES AND AUTHORITIES OF DIRECTOR AND HUD.

    (a) In General.--Section 1313 of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4513) is amended to read as follows:

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

    ``(a) Duties.--
            ``(1) Principal duties.--The principal duties of the 
        Director shall be to ensure that the enterprises--
                    ``(A) operate in a financially safe and sound 
                manner;
                    ``(B) carry out their missions in a financially 
                safe and sound manner, and only through activities that 
                have been authorized under, and are consistent with the 
                purposes of, the provisions of the Federal National 
                Mortgage Association Charter Act (12 U.S.C. 1716 et 
                seq.), and the Federal Home Loan Mortgage Corporation 
                Act (12 U.S.C. 1451 et seq.), as applicable; and
                    ``(C) remain adequately capitalized.
            ``(2) Other duties.--To the extent consistent with 
        paragraph (1), the Director shall exercise general supervisory 
        and regulatory authority over the enterprises, in accordance 
        with this title, the Federal National Mortgage Association 
        Charter Act (12 U.S.C. 1716 et seq.), the Federal Home Loan 
        Mortgage Corporation Act (12 U.S.C. 1451 et seq.), and any 
        other applicable provision of law.
    ``(b) Authority Exclusive of Secretary.--Except as specifically 
provided under this title, the Federal National Mortgage Association 
Charter Act, the Federal Home Loan Mortgage Corporation Act, or any 
other provision of Federal law, the authority of the Director with 
respect to the enterprises shall not be subject to the review, 
approval, or intervention of the Secretary of the Treasury.
    ``(c) Delegation of Authority.--The Director may delegate to 
officers and employees of the Office any of the functions, powers, and 
duties of the Director, with respect to supervision and regulation of 
the enterprises, as the Director considers appropriate.''.
    (b) Prior Approval Authority for New Programs.--Part 1 of Subtitle 
A of the Federal Housing Enterprises Financial Safety and Soundness Act 
of 1992 (12 U.S.C. 4501 et seq.) is amended by adding at the end the 
following:

``SEC. 1319H. PRIOR APPROVAL AUTHORITY FOR NEW PROGRAMS.

    ``(a) In General.--The Director, in consultation with the Secretary 
of Housing and Urban Development, shall require each enterprise to 
obtain the approval of the Director, in the manner prescribed by 
regulation of the Director, for any new program of the enterprise 
before implementing the program.
    ``(b) Standard for Approval.--The Director shall approve any new 
program of an enterprise for purposes of subsection (a), unless--
            ``(1) in the case of a new program of the Federal National 
        Mortgage Association, the Director determines that the program 
        is not authorized under section 304 or paragraph (2), (3), (4), 
        or (5) of section 302(b) of the Federal National Mortgage 
        Association Charter Act (12 U.S.C. 1717(b));
            ``(2) in the case of a new program of the Federal Home Loan 
        Mortgage Corporation, the Director determines that the program 
        is not authorized under paragraph (1), (4), or (5) of section 
        305(a) of the Federal Home Loan Mortgage Corporation Act (12 
        U.S.C. 1451 et seq.); or
            ``(3) the Director determines that the new program is 
        inconsistent with or undermines the safe and sound operation of 
        the enterprise, consistent with section 1313(a)(1).
    ``(c) Procedure for Approval.--
            ``(1) Submission of request.--An enterprise shall submit to 
        the Director a written request for approval of a new program 
        under this section that describes the program in such form as 
        prescribed by regulation of the Director.
            ``(2) Response.--
                    ``(A) In general.--Not later than 45 days after the 
                date of submission of a request for approval under 
                paragraph (1), the Director shall--
                            ``(i) approve the request; or
                            ``(ii) deny the request and submit a report 
                        explaining the reasons for the denial to the 
                        Committee on Financial Services of the House of 
                        Representatives and the Committee on Banking, 
                        Housing, and Urban Affairs of the Senate.
                    ``(B) Extension.--The Director may extend the time 
                period under subparagraph (A) for a single additional 
                15-day period only if the Director requests additional 
                information from the enterprise.
            ``(3) Failure to respond.--If the Director fails to approve 
        a request for approval under this section, or fails to submit a 
        report under paragraph (2)(A)(ii) during the period provided, 
        the request shall be considered to have been approved by the 
        Director.
            ``(4) Review of disapproval.--
                    ``(A) Submission of new information.--If the 
                Director submits a report under paragraph (2)(A)(ii) 
                denying a request for reasons listed under paragraph 
                (1) or (2) of subsection (b), the Director shall 
                provide the enterprise submitting the request with a 
                timely opportunity to review and supplement the 
                administrative record.
                    ``(B) New programs not in the public interest.--If 
                the Director submits a report under paragraph 
                (2)(A)(ii) denying a request after finding that the 
                program is inconsistent with or undermines the safe and 
                sound operation of the enterprise, as described in 
                subsection (b)(3), the Director shall provide the 
                enterprise with notice and opportunity for a hearing on 
                the record regarding such denial.''.
    (c) Repeal of HUD Authority.--Part 2 of subtitle A of title XIII of 
the Housing and Community Development Act of 1992 (12 U.S.C. 4501 et 
seq.) is amended by striking sections 1321 and 1322.
    (d) Authority of HUD for Housing Goals.--
            (1) In general.--Section 1331 of the Housing and Community 
        Development Act of 1992 (12 U.S.C. 4561) is amended--
                    (A) in the first sentence of subsection (a), by 
                inserting ``of Housing and Urban Development'' after 
                ``The Secretary''; and
                    (B) by adding at the end the following:
    ``(d) Definition.--For purposes of this part, the term `Secretary' 
means the Secretary of Housing and Urban Development.''.
            (2) Annual report on housing goals.--Section 1324 of the 
        Housing and Community Development Act of 1992 (12 U.S.C. 4544) 
        is amended by inserting ``of Housing and Urban Development'' 
        after ``Secretary'' each place such term appears.
    (e) Technical and Conforming Amendments.--
            (1) Fannie mae.--Section 302(b)(6) of the Federal National 
        Mortgage Association Charter Act (12 U.S.C. 1717(b)(6)) is 
        amended by striking ``Secretary under section 1322'' and 
        inserting ``Director under section 1319H''.
            (2) Freddie mac.--Section 305(c) of the Federal Home Loan 
        Mortgage Corporation Act (12 U.S.C. 1454(c)) is amended by 
        striking ``Secretary under section 1322'' and inserting 
        ``Director under section 1319H''.
            (3) Financial institutions examination council.--Section 
        1004(a) of the Federal Financial Institutions Examination 
        Council Act of 1978 (12 U.S.C. 3303(a)) is amended--
                    (A) in paragraph (5), by striking the period at the 
                end and inserting ``; and''; and
                    (B) by adding at the end the following:
            ``(6) the Director of the Office of Federal Housing 
        Enterprise Supervision.''.

SEC. 103. EXAMINERS AND ACCOUNTANTS.

    (a) Examinations.--Section 1317 of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4517) is amended--
            (1) in the second sentence of subsection (c), by striking 
        ``The'' and inserting ``During the 3-year period beginning on 
        the date of enactment of the Federal Housing Enterprise 
        Oversight Modernization Act of 2003, the''; and
            (2) in subsection (d), by striking ``Federal Reserve 
        banks'' and inserting ``Director of the Office of Thrift 
        Supervision''.
    (b) Enhanced Authority To Hire Examiners and Accountants.--Section 
1317 of the Housing and Community Development Act of 1992 (12 U.S.C. 
4517) is amended by adding at the end the following:
    ``(g) Appointment of Accountants, Economists, and Examiners.--
            ``(1) Applicability.--This section applies with respect to 
        any position of examiner, accountant, and economist at the 
        Office, with respect to supervision and regulation of the 
        enterprises, that is in the competitive service.
            ``(2) Appointment authority.--
                    ``(A) In general.--The Director may appoint 
                candidates to any position described in paragraph (1)--
                            ``(i) in accordance with the statutes, 
                        rules, and regulations governing appointments 
                        in the excepted service; and
                            ``(ii) notwithstanding any statutes, rules, 
                        and regulations governing appointments in the 
                        competitive service.
                    ``(B) Rule of construction.--The appointment of a 
                candidate to a position under this paragraph shall not 
                be considered to cause such position to be converted 
                from the competitive service to the excepted service.
            ``(3) Reports.--
                    ``(A) In general.--Not later than 90 days after the 
                end of fiscal year 2003 (for fiscal year 2003) and 90 
                days after the end of fiscal year 2005 (for fiscal 
                years 2004 and 2005), the Director shall submit a 
                report with respect to the exercise of the authority 
                granted to the Director by paragraph (2) during such 
                fiscal years to the--
                            ``(i) Committee on Government Reform and 
                        the Committee on Financial Services of the 
                        House of Representatives; and
                            ``(ii) Committee on Governmental Affairs 
                        and the Committee on Banking, Housing, and 
                        Urban Affairs of the Senate.
                    ``(B) Contents.--The reports submitted under 
                subparagraph (A) shall describe the changes in the 
                hiring process authorized by paragraph (2), including 
                relevant information related to--
                            ``(i) the quality of candidates;
                            ``(ii) the procedures used by the Director 
                        to select candidates through the streamlined 
                        hiring process;
                            ``(iii) the numbers, types, and grades of 
                        employees hired under the authority;
                            ``(iv) any benefits or shortcomings 
                        associated with the use of the authority;
                            ``(v) the effect of the exercise of the 
                        authority on the hiring of veterans and other 
                        demographic groups;
                            ``(vi) the way in which managers were 
                        trained in the administration of the 
                        streamlined hiring system; and
                            ``(vii) a list of the specific functional 
                        responsibilities of Office personnel (such as 
                        examinations, supervision, regulatory 
                        oversight, and risk analysis) and the 
                        percentage of the total personnel employed 
                        within the Office that are engaged in each such 
                        activity.''.
    (c) Allocation of Personnel Resources.--Section 1315 of the Housing 
and Community Development Act of 1992 (12 U.S.C. 4515), as amended by 
this Act, is amended by adding at the end the following:
    ``(f) Maintenance of Adequate Examination and Supervisory 
Personnel.--In carrying out this Act, the Director shall ensure that a 
significant amount of the Office resources allocated for the hiring and 
support of personnel are applied to personnel engaged in the 
examination and supervision of the enterprises.''.

SEC. 104. REGULATIONS.

    Section 1319G of the Housing and Community Development Act of 1992 
(12 U.S.C. 4526) is amended in subsection (c), by striking ``Committee 
on Banking, Finance and Urban Affairs'' and inserting ``Committee on 
Financial Services''.

SEC. 105. ASSESSMENTS.

    Section 1316 of the Housing and Community Development Act of 1992 
(12 U.S.C. 4516) is amended--
            (1) by striking subsection (a) and inserting the following:
    ``(a) Annual Assessments.--The Director shall establish and collect 
from the enterprises annual assessments in an amount not exceeding the 
amount sufficient to provide for all reasonable costs and expenses of 
the Office, including--
            ``(1) the expenses of any examination under section 1317; 
        and
            ``(2) the expenses of obtaining any review or credit 
        assessment under section 1319.'';
            (2) in subsection (b), in paragraph (2), by moving the 
        margin 2 ems to the right;
            (3) in subsection (c), by adding at the end the following: 
        ``The Director may adjust the amounts of any semiannual 
        assessments for an assessment under subsection (a) that are to 
        be paid pursuant to subsection (b) by an enterprise, as 
        necessary in the discretion of the Director, to ensure that the 
        costs of enforcement activities under subtitles B and C for an 
        enterprise are borne only by that enterprise.'';
            (4) in subsection (f), by striking ``Any assessments 
        collected'' and all that follows through the end of the 
        subsection and inserting the following: ``Notwithstanding any 
        other provision of law, any assessments collected by the 
        Director pursuant to this section shall be deposited in the 
        Fund in an account for the Director. Any amounts in the Fund 
        are hereby made available, without fiscal year limitation, to 
        the Director (to the extent of amounts in the Director's 
        account) for carrying out the supervisory and regulatory 
        responsibilities of the Director with respect to the 
        enterprises, including any necessary administrative and 
        nonadministrative expenses of the Director in carrying out the 
        purposes of this title, the Federal National Mortgage 
        Association Charter Act (12 U.S.C. 1716 et seq.), and the 
        Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1451 et 
        seq.).''; and
            (5) in subsection (g), by striking paragraphs (1) and (2) 
        and inserting the following:
            ``(1) Financial operating plans and forecasts.--Before the 
        beginning of each fiscal year, the Director shall submit a copy 
        of the financial operating plans and forecasts for the Office 
        to the Director of the Office of Management and Budget.
            ``(2) Reports of operations.--As soon as practicable after 
        the end of each fiscal year and each quarter thereof, the 
        Director shall submit a copy of the report of the results of 
        the operations of the Office during such period to the Director 
        of the Office of Management and Budget.''.

SEC. 106. INDEPENDENCE OF DIRECTOR IN CONGRESSIONAL TESTIMONY AND 
              RECOMMENDATIONS.

    Section 111 of Public Law 93-495 (12 U.S.C. 250) is amended by 
inserting ``the Director of the Office of Federal Housing Enterprise 
Supervision of the Department of the Treasury,'' after ``the Federal 
Housing Finance Board,''.

SEC. 107. NONMORTGAGE-RELATED INVESTMENTS.

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

    ``Subtitle B--Required Capital Levels for Enterprises, Special 
         Enforcement Powers, and Nonmortgage-Related Assets'';

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

``SEC. 1369E. NONMORTGAGE-RELATED ASSETS.

    ``(a) In General.--
            ``(1) Liquidity portfolio.--On a quarterly basis, the 
        Director shall review and provide written comment to each 
        enterprise on the nonmortgage-related assets held by each 
        enterprise in the liquidity portfolio of such enterprise. The 
        Director shall define the term `nonmortgage-related asset' for 
        purposes of this section.
            ``(2) Assets outside of liquidity portfolio.--The Director 
        may review and provide written comment to each enterprise on 
        the quality and appropriateness of nonmortgage-related assets 
        held by an enterprise outside of the liquid portfolio of such 
        enterprise.
    ``(b) Report.--On a biennial basis, the Director shall submit a 
report to Congress containing information on--
            ``(1) any written comments provided to the enterprises 
        under subsection (a)(1) or (2); and
            ``(2) whether or not each enterprise is in compliance with 
        the Sound Practices for Managing Liquidity in Banking 
        Organisations established by the Basel Committee, or any 
        successor thereto.''.

SEC. 108. REPORTS.

    Sections 1327 and 1328 of the Housing and Community Development Act 
of 1992 (12 U.S.C. 4547, 4548) are amended by striking ``Secretary'' 
each place it appears and inserting ``Director''.

SEC. 109. REVIEWS OF ENTERPRISES.

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

``SEC. 1319. REVIEW OF ENTERPRISES.'';

            (2) by inserting after ``any entity'' the following: ``that 
        the Director considers appropriate, including an entity'';
            (3) by inserting ``(a) Authority To Provide for Reviews.--
        '' before ``The''; and
            (4) by adding at the end the following new subsection:
    ``(b) Biennial Determination of Credit Rating.--
            ``(1) In general.--On a biennial basis, the Director shall 
        provide for 2 entities recognized by the Division of Market 
        Regulation of the Securities and Exchange Commission as 
        nationally recognized statistical rating organizations, each to 
        conduct an assessment of the financial condition of each 
        enterprise for the purpose of determining the level of risk 
        that the enterprise will be unable to meet its obligations, 
        taking into consideration the legal status evidenced by the 
        statements required under--
                    ``(A) the penultimate sentence of section 304(b) of 
                the Federal National Mortgage Association Charter Act 
                (12 U.S.C. 1719(b));
                    ``(B) the last sentence of section 304(d) of the 
                Federal National Mortgage Association Charter Act (12 
                U.S.C. 1719(d));
                    ``(C) the penultimate sentence of section 304(e) of 
                the Federal National Mortgage Association Charter Act 
                (12 U.S.C. 1719(e)); and
                    ``(D) section 306(h)(2) of the Federal Home Loan 
                Mortgage Corporation Act (12 U.S.C. 1455(h)(2)).
            ``(2) Credit rating.--The assessment under paragraph (1) 
        shall include--
                    ``(A) assigning a credit rating for each 
                enterprise, using a scale similar to that used by such 
                organization with respect to obligations of other 
                financial institutions; and
                    ``(B) the report regarding such assessment and the 
                rating in the report of the Director under section 
                1319B(a).''.

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

    Section 1361 of the Housing and Community Development Act of 1992 
(12 U.S.C. 4611) is amended--
            (1) by redesignating subsections (d), (e), and (f) as 
        subsections (f), (g), and (h), respectively; and
            (2) by inserting after subsection (c) the following:
    ``(d) Periodic Review of Risk-Based Capital Test.--
            ``(1) In general.--Not later than 5 years after the date of 
        enactment of the Federal Housing Enterprise Oversight 
        Modernization Act of 2003, and once every 5 years thereafter, 
        the Director shall conduct a review of the risk-based capital 
        test adopted in accordance with this subtitle and submit a 
        report to Congress on the findings of such review, the 
        appropriateness of the risk-based capital test, and any 
        legislative recommendations that would, as necessary--
                    ``(A) better align capital with risk; and
                    ``(B) reflect evolving best practices for risk-
                based capital standards for large, complex financial 
                institutions.''
            ``(2) Savings provision.--Notwithstanding paragraph (1), 
        the Director shall retain all authority under this section to 
        modify the current risk-based capital rule as the Director 
        determines.
    ``(e) Review of Risk-Based Capital Level.--Notwithstanding any 
other provision of law, if the Director determines that the risk-based 
capital level of an enterprise is inadequate, the Director may make 
such adjustments to the risk-based capital level of that enterprise as 
the Director determines necessary to ensure the safe and sound 
financial operation of that enterprise.''.

SEC. 111. MINIMUM AND CRITICAL CAPITAL LEVELS.

    Section 1362(b) of the Housing and Community Development Act of 
1992 (12 U.S.C. 4612) is amended to read as follows:
    ``(b) Authority To Issue Regulations.--The Director shall issue 
such regulations as the Director determines necessary to ensure that 
the enterprises comply with the requirements of subsection (a).''.

SEC. 112. REQUIRED DISCLOSURES.

    (a) Fannie Mae and Freddie Mac.--Part 1 of subtitle A of the 
Federal Housing Enterprises Financial Safety and Soundness Act of 1992 
(12 U.S.C. 4501 et seq.), as amended by this Act, is amended by adding 
at the end the following:

``SEC. 1319I. REGISTRATION OF STOCK AND PUBLIC DISCLOSURES.

    ``(a) Registration of Stock Under the Securities Exchange Act.--
            ``(1) In general.--Notwithstanding its status as an 
        exempted security for purposes of the Securities Exchange Act 
        of 1934 pursuant to section 311 of the Federal National 
        Mortgage Association Charter Act and section 306 of the Federal 
        Home Loan Mortgage Corporation Act, as applicable, the common 
        stock of each enterprise shall be subject to--
                    ``(A) section 12(g) of the Securities Exchange Act 
                of 1934; and
                    ``(B) sections 14 and 16 of that Act.
            ``(2) Review.--All reports, statements, and forms filed 
        with the Securities and Exchange Commission under this 
        subsection shall be reviewed and commented upon by the 
Commission to the same extent and with the same frequency as comparable 
reports and materials filed by other issuers.
    ``(b) Credit Rating.--An enterprise shall annually disclose to the 
public the credit rating of such enterprise.
    ``(c) Mortgage Portfolio.--An enterprise shall disclose to the 
public, on a monthly basis, the effect on its mortgage portfolio of--
            ``(1) a 50 basis point change in interest rates; and
            (2) a 25 basis point change in the slope of the yield 
        curve.
    ``(d) Credit Risk Disclosures.--An enterprise shall disclose to the 
public, on a quarterly basis, the financial impact on the enterprise of 
an immediate 5 percent decline in the average price of single-family 
housing within the United States.''.
    (b) Federal Home Loan Banks.--Section 6 of the Federal Home Loan 
Bank Act (12 U.S.C. 1426) is amended by adding at the end the 
following:
    ``(i) Registration and Reporting Requirements.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, the Class A stock and Class B stock issued by each Federal 
        home loan bank shall be subject to--
                    ``(A) section 12(g) of the Securities Exchange Act 
                of 1934; and
                    ``(B) sections 14 and 16 of that Act.
            ``(2) Review.--All reports, statements, and forms filed 
        with the Securities and Exchange Commission under this 
        subsection shall be reviewed and commented upon by the 
        Commission to the same extent and with the same frequency as 
        comparable reports and materials filed by other issuers.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of enactment of this Act, or such later date as 
determined by the Securities and Exchange Commission.

SEC. 113. FEDERAL HOUSING FINANCE BOARD.

    (a) Appointment of Secretary of the Treasury to FHFB.--Section 
2(11) of the Federal Home Loan Bank Act (12 U.S.C. 1422(11)) is amended 
by striking ``Secretary of Housing and Urban Development'' and 
inserting ``Secretary of the Treasury''.
    (b) Study of Merger of FHFB With OFHES.--
            (1) In general.--The Secretary of the Treasury, after 
        consultation with the Secretary of Housing and Urban 
        Development, shall study and report on any recommendations 
        regarding the consolidation of the responsibilities of the 
        Federal Housing Finance Board, including oversight of the 
        Federal home loan banks, and the Office of Federal Housing 
        Enterprise Supervision of the Department of the Treasury.
            (2) Report.--Not later than 6 months after the date of 
        enactment of this Act, the Secretary of the Treasury shall 
        submit a report to Congress on--
                    (A) the results of the study conducted under 
                subsection (a); and
                    (B) any recommendations regarding legislative or 
                administrative changes.

SEC. 114. DEFINITIONS.

    Section 1303 of the Housing and Community Development Act of 1992 
(12 U.S.C. 4502) is amended--
            (1) in each of paragraphs (5) and (14), by striking 
        ``Federal Housing Enterprise Oversight of the Department of 
        Housing and Urban Development'' each place that term appears 
        and inserting ``Federal Housing Enterprise Supervision of the 
        Department of the Treasury'';
            (2) in paragraphs (8), (9), (10), and (19), by inserting 
        ``of Housing and Urban Development'' after ``Secretary'' each 
        place that term appears;
            (3) by striking paragraph (15);
            (4) by redesignating paragraphs (7) through (14) (as 
        amended by this Act) as paragraphs (8) through (15), 
        respectively; and
            (5) by inserting after paragraph (6) the following:
            ``(7) Enterprise-affiliated party.--The term `enterprise-
        affiliated party' means--
                    ``(A) any director, officer, employee, or 
                controlling stockholder of, or agent for, an 
                enterprise;
                    ``(B) any shareholder, consultant, joint venture 
                partner, and any other person, as determined by the 
                Director (by regulation or case-by-case), who 
                participates in the conduct of the affairs of an 
                enterprise; and
                    ``(C) any independent contractor (including any 
                attorney, appraiser, or accountant), to the extent that 
                such person knowingly or recklessly participates in--
                            ``(i) any violation of any law or 
                        regulation;
                            ``(ii) any breach of fiduciary duty; or
                            ``(iii) any unsafe or unsound practice,
                which caused or is likely to cause more than a minimal 
                financial loss to, or a significant adverse effect on, 
                the enterprise.''.

                  Subtitle B--Prompt Corrective Action

SEC. 131. CAPITAL CLASSIFICATIONS.

    Section 1364 of the Housing and Community Development Act of 1992 
(12 U.S.C. 4614) is amended--
            (1) by striking subsection (b) and inserting the following:
    ``(b) Discretionary Classification.--
            ``(1) Grounds for reclassification.--The Director may 
        reclassify an enterprise under paragraph (2), if--
                    ``(A) at any time, the Director determines in 
                writing that an enterprise is engaging in conduct that 
                could result in a rapid depletion of core capital or 
                that the value of the property subject to mortgages 
                held or securitized by the enterprise has decreased 
                significantly;
                    ``(B) after notice and an opportunity for hearing, 
                the Director determines that an enterprise is in an 
                unsafe or unsound condition; or
                    ``(C) pursuant to section 1371(b), the Director 
                deems an enterprise to be engaging in an unsafe or 
                unsound practice.
            ``(2) Reclassification.--In addition to any other action 
        authorized under this title, including the reclassification of 
        an enterprise for any reason not specified in this subsection, 
        if the Director takes any action described in paragraph (1) the 
        Director may classify an enterprise--
                    ``(A) as undercapitalized, if the enterprise is 
                otherwise classified as adequately capitalized;
                    ``(B) as significantly undercapitalized, if the 
                enterprise is otherwise classified as undercapitalized; 
                and
                    ``(C) as critically undercapitalized, if the 
                enterprise is otherwise classified as significantly 
                undercapitalized.'';
            (2) by redesignating subsection (d) as subsection (e); and
            (3) by inserting after subsection (c) the following:
    ``(d) Restriction on Capital Distributions.--
            ``(1) In general.--An enterprise shall make no capital 
        distribution if, after making the distribution, the enterprise 
        would be undercapitalized.
            ``(2) Exception.--Notwithstanding paragraph (1), the 
        Director may permit an enterprise to repurchase, redeem, 
        retire, or otherwise acquire shares or ownership interests, if 
        the repurchase, redemption, retirement, or other acquisition--
                    ``(A) is made in connection with the issuance of 
                additional shares or obligations of the enterprise in 
                at least an equivalent amount; and
                    ``(B) will reduce the financial obligations of the 
                enterprise or otherwise improve the financial condition 
                of the enterprise.''.

SEC. 132. SUPERVISORY ACTIONS APPLICABLE TO UNDERCAPITALIZED 
              ENTERPRISES.

    (a) Effective Date for Supervisory Actions.--Regulations issued by 
the Director of the Office of Federal Housing Enterprise Supervision 
under section 1361(e) of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992, as amended by section 161(a)(5)(A) of 
this Act, shall become effective not earlier than 6 months after the 
date of enactment of this Act.
    (b) Supervisory Actions.--Section 1365 of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4615) is amended--
            (1) in subsection (a)--
                    (A) by redesignating paragraphs (1) and (2) as 
                paragraphs (2) and (3), respectively;
                    (B) by inserting before paragraph (2) the 
                following:
            ``(1) Required monitoring.--The Director shall--
                    ``(A) closely monitor the condition of any 
                undercapitalized enterprise;
                    ``(B) closely monitor compliance with the capital 
                restoration plan, restrictions, and requirements 
                imposed under this section; and
                    ``(C) periodically review the plan, restrictions, 
                and requirements applicable to the undercapitalized 
                enterprise to determine whether the plan, restrictions, 
                and requirements are achieving the purpose of this 
                section.''; and
                    (C) by adding at the end the following:
            ``(4) Restriction of asset growth.--An undercapitalized 
        enterprise shall not permit its average total assets during any 
        calendar quarter to exceed its average total assets during the 
        preceding calendar quarter, unless--
                    ``(A) the Board has accepted the capital 
                restoration plan of the enterprise;
                    ``(B) any increase in total assets is consistent 
                with the plan; and
                    ``(C) the ratio of tangible equity to assets of the 
                enterprise increases during the calendar quarter at a 
                rate sufficient to enable the enterprise to become 
                adequately capitalized within a reasonable time.
            ``(5) Prior approval of acquisitions and issuance of new 
        products.--An undercapitalized enterprise shall not, directly 
        or indirectly, acquire any interest in any entity or issue a 
new product, unless--
                    ``(A) the Director has accepted the capital 
                restoration plan of the enterprise, the enterprise is 
                implementing the plan, and the Director determines that 
                the proposed action is consistent with and will further 
                the achievement of the plan; or
                    ``(B) the Director determines that the proposed 
                action will further the purpose of this section.'';
            (2) in the subsection heading for subsection (b), by 
        striking ``From Undercapitalized to Significantly 
        Undercapitalized'';
            (3) by redesignating subsection (c) (as amended by 
        subsection (a) of this section) as subsection (d); and
            (4) by inserting after subsection (b) the following:
    ``(c) Other Discretionary Safeguards.--The Director may take, with 
respect to an undercapitalized enterprise, any of the actions 
authorized to be taken under section 1366 with respect to a 
significantly undercapitalized enterprise, if the Director determines 
that such actions are necessary to carry out the purpose of this 
subtitle.''.

SEC. 133. SUPERVISORY ACTIONS APPLICABLE TO SIGNIFICANTLY 
              UNDERCAPITALIZED ENTERPRISES.

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

                    Subtitle C--Enforcement Actions

SEC. 151. CEASE-AND-DESIST PROCEEDINGS.

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

SEC. 152. TEMPORARY CEASE-AND-DESIST PROCEEDINGS.

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

SEC. 153. REMOVAL AND PROHIBITION AUTHORITY.

    (a) In General.--Subtitle C of the Federal Housing Enterprises 
Financial Safety and Soundness Act (12 U.S.C. 4501 et seq.) is 
amended--
            (1) by redesignating sections 1377 through 1379B (12 U.S.C. 
        4637-41) as sections 1379 through 1379D, respectively; and
            (2) by inserting after section 1376 (12 U.S.C. 4636) the 
        following:

``SEC. 1377. REMOVAL AND PROHIBITION AUTHORITY.

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

SEC. 154. ENFORCEMENT AND JURISDICTION.

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

SEC. 155. CIVIL MONEY PENALTIES.

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

SEC. 156. CRIMINAL PENALTY.

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

``SEC. 1378. CRIMINAL PENALTY.

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

                     Subtitle D--General Provisions

SEC. 161. CONFORMING AND TECHNICAL AMENDMENTS.

    (a) Amendments to 1992 Act.--Title XIII of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4501 et seq.), as amended 
this Act, is amended--
            (1) in section 1315 (12 U.S.C. 4515)--
                    (A) in subsection (a)--
                            (i) in the subsection heading, by striking 
                        ``Office Personnel'' and inserting ``In 
                        General''; and
                            (ii) by striking ``The'' and inserting 
                        ``Subject to title II of the Federal Housing 
                        Enterprise Oversight Modernization Act of 2003, 
                        the'';
                    (B) in subsection (d)--
                            (i) in the subsection heading, by striking 
                        ``HUD'' and inserting ``Department of the 
                        Treasury''; and
                            (ii) by striking ``Housing and Urban 
                        Development'' and inserting ``the Department of 
                        the Treasury''; and
                    (C) by striking subsection (f);
            (2) in section 1319A (12 U.S.C. 4520)--
                    (A) by striking ``(a) In General.--''; and
                    (B) by striking subsection (b);
            (3) in section 1319F (12 U.S.C. 4525), by striking 
        paragraph (2);
            (4) in the section heading for section 1328, by striking 
        ``secretary'' and inserting ``director'';
            (5) in section 1361 (12 U.S.C. 4611)--
                    (A) in subsection (e)(1), by striking the first 
                sentence and inserting the following: ``The Director 
                shall establish the risk-based capital test under this 
                section by regulation.''; and
                    (B) in subsection (f), by striking ``the 
                Secretary,'';
            (6) in section 1364(c) (12 U.S.C. 4614(c)), by striking the 
        last sentence;
            (7) in section 1367(a)(2) (12 U.S.C. 4617(a)(2)), by 
        striking ``with the written concurrence of the Secretary of the 
        Treasury,'';
            (8) by striking section 1383;
            (9) by striking ``Committee on Banking, Finance and Urban 
        Affairs'' and inserting ``Committee on Financial Services'' 
        each place such term appears in sections 1319B, 1319G(c), 
        1328(a), 1336(b)(3)(C), 1337, and 1369(a)(3); and
            (10) by striking ``Secretary'' and inserting ``Director'' 
        each place such term appears in--
                    (A) subpart A of part 2 of subtitle A (except in 
                sections 1322, 1324, and 1325); and
                    (B) subtitle B (except in section 1361(d)(1) and 
                1369E).
            (b) Amendments to Table of Contents of 1992 Act.--Section 
        1(b) of the Housing and Community Development Act of 1992 (12 
        U.S.C. 81 note) is amended--
            (1) by striking the matter relating to section 1311 and 
        inserting the following:

``Sec. 1311. Establishment of Office of Federal Housing Enterprise 
                            Supervision.'';
            (2) by striking the matter relating to section 1313 and 
        inserting the following:

``Sec. 1313. Duties and authorities of director.'';
            (3) by inserting after the matter relating to section 1319G 
        the following:

``Sec. 1319H. Prior approval authority for new programs.
``Sec. 1319I. Registration of stock and public disclosures.'';
            (4) by striking the matter relating to section 1319 and 
        inserting the following:

``Sec. 1319. Review of enterprises.'';
            (5) by striking the matter relating to section 1328 and 
        inserting the following:

``Sec. 1328. Reports by Director.'';
            (6) by striking the heading relating to subtitle B of title 
        XIII and inserting the following:

     Subtitle B--Required Capital Levels for Enterprises, Special 
         Enforcement Powers, and Nonmortgage-Related Assets'';

            (7) by inserting after the matter relating to section 1369D 
        the following:

``Sec. 1369E. Nonmortgage-related assets.'';
            (8) by redesignating the matter relating to sections 1377 
        through 1379B as sections 1379 through 1379D, respectively; and
            (9) by inserting after the matter relating to section 1376 
        the following:

``Sec. 1377. Removal and prohibition authority.
``Sec. 1378. Criminal penalty.''.
    (c) Amendments to Fannie Mae Charter Act.--The Federal National 
Mortgage Association Charter Act (12 U.S.C. 1716 et seq.) is amended--
            (1) by striking ``Director of the Office of Federal Housing 
        Enterprise Oversight of the Department of Housing and Urban 
        Development'' each place such term appears, and inserting 
        ``Director of the Office of Federal Housing Enterprise 
        Supervision of the Department of the Treasury'', in--
                    (A) section 303(c)(2) (12 U.S.C. 1718(c)(2));
                    (B) section 309(d)(3)(B) (12 U.S.C. 
                1723a(d)(3)(B)); and
                    (C) section 309(k)(1); and
            (2) in section 309(n)--
                    (A) in paragraph (1), by inserting ``the Director 
                of the Office of Federal Housing Enterprise Supervision 
                of the Department of the Treasury,'' after ``Senate,''; 
                and
                    (B) in paragraph (3)(B), by striking ``Secretary'' 
                and inserting ``Director of the Office of Federal 
                Housing Enterprise Supervision of the Department of the 
                Treasury''.
    (d) Amendments to Freddie Mac Act.--The Federal Home Loan Mortgage 
Corporation Act (12 U.S.C. 1451 et seq.) is amended--
            (1) by striking ``Director of the Office of Federal Housing 
        Enterprise Oversight of the Department of Housing and Urban 
        Development'' each place such term appears, and inserting 
        ``Director of the Office of Federal Housing Enterprise 
        Supervision of the Department of the Treasury'', in--
                    (A) section 303(b)(2) (12 U.S.C. 1452(b)(2));
                    (B) section 303(h)(2) (12 U.S.C. 1452(h)(2)); and
                    (C) section 307(c)(1) (12 U.S.C. 1456(c)(1));
            (2) in section 306(i) (12 U.S.C. 1455(i))--
                    (A) by striking ``section 1316(c)'' and inserting 
                ``section 306(c)''; and
                    (B) by striking ``section 106'' and inserting 
                ``section 1316''; and
            (3) in section 307 (12 U.S.C. 1456)--
                    (A) in subsection (f)--
                            (i) in paragraph (1), by inserting ``the 
                        Director of the Office of Federal Housing 
                        Enterprise Supervision of the Department of the 
                        Treasury,'' after ``Senate,''; and
                            (ii) in paragraph (3)(B), by striking 
                        ``Secretary'' and inserting ``Director of the 
                        Office of Federal Housing Enterprise 
                        Supervision of the Department of the 
                        Treasury''.
    (e) Amendment to Title 18, United States Code.--Section 1905 of 
title 18, United States Code, is amended by striking ``Office of 
Federal Housing Enterprise Oversight'' and inserting ``Office of 
Federal Housing Enterprise Supervision of the Department of the 
Treasury''.
    (f) Amendments to Flood Disaster Protection Act of 1973.--Section 
102(f)(3)(A) of the Flood Disaster Protection Act of 1973 (42 U.S.C. 
4012a(f)(3)(A)) is amended by striking ``Director of the Office of 
Federal Housing Enterprise Oversight of the Department of Housing and 
Urban Development'' and inserting ``Director of the Office of Federal 
Housing Enterprise Supervision of the Department of the Treasury''.
    (g) Amendment to Department of Housing and Urban Development Act.--
Section 5 of the Department of Housing and Urban Development Act (42 
U.S.C. 3534) is amended by striking subsection (d).
    (h) Amendment to Title 5, United States Code.--Section 5315 of 
title 5, United States Code, is amended by striking the item relating 
to the Director of the Office of Federal Housing Enterprise Oversight, 
Department of Housing and Urban Development and inserting the following 
new item:
            ``Director of the Office of Federal Housing Enterprise 
        Supervision, Department of the Treasury.''.

SEC. 162. EFFECTIVE DATE.

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

        TITLE II--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY

SEC. 201. ABOLISHMENT OF OFHEO.

    (a) In General.--Effective at the end of the 1-year period 
beginning on the date of enactment of this Act, the Office of Federal 
Housing Enterprise Oversight of the Department of Housing and Urban 
Development and the positions of the Director and Deputy Director of 
such Office are abolished.
    (b) Disposition of Affairs.--During the 1-year period beginning on 
the date of enactment of this Act, the Director of the Office of 
Federal Housing Enterprise Oversight shall, solely for the purpose of 
winding up the affairs of the Office of Federal Housing Enterprise 
Oversight--
            (1) manage the employees of such Office and provide for the 
        payment of the compensation and benefits of any such employee 
        which accrue before the effective date of any transfer of such 
        employee pursuant to section 203; and
            (2) may take any other action necessary for the purpose of 
        winding up the affairs of the Office.
    (c) Status of Employees as Federal Agency Employees.--The 
amendments made by title I and the abolishment of the Office of Federal 
Housing Enterprise Oversight under subsection (a) of this section may 
not be construed to affect the status of any employee of such Office as 
employees of an agency of the United States for purposes of any other 
provision of law during any time such employee is so employed.
    (d) Use of Property and Services.--
            (1) Property.--The Director of the Office of Federal 
        Housing Enterprise Supervision of the Department of the 
        Treasury may use the property of the Office of Federal Housing 
        Enterprise Oversight to perform functions that have been 
        transferred to the Director of the Office of Federal Housing 
        Enterprise Supervision for such time as is reasonable to 
        facilitate the orderly transfer of functions under any other 
        provision of this Act, or any amendment made by this Act to any 
        other provision of law.
            (2) Agency services.--Any agency, department, or other 
        instrumentality of the United States, and any successor to any 
        such agency, department, or instrumentality, which was 
        providing supporting services to the Office of Federal Housing 
        Enterprise Oversight before the expiration of the period under 
        subsection (a) in connection with functions that are 
        transferred to the Director of the Office of Federal Housing 
        Enterprise Supervision of the Department of the Treasury 
        shall--
                    (A) continue to provide such services, on a 
                reimbursable basis, until the transfer of such 
                functions is complete; and
                    (B) consult with any such agency to coordinate and 
                facilitate a prompt and reasonable transition.
    (e) Savings Provisions.--
            (1) Existing rights, duties, and obligations not 
        affected.--Subsection (a) shall not affect the validity of any 
        right, duty, or obligation of the United States, the Director 
        of the Office of Federal Housing Enterprise Oversight, or any 
        other person, which--
                    (A) arises under or pursuant to the title XIII of 
                the Housing and Community Development Act of 1992 (12 
                U.S.C. 4501 et seq.), the Federal National Mortgage 
                Association Charter Act (12 U.S.C. 1716 et seq.), the 
                Federal Home Loan Mortgage Corporation Act (12 U.S.C. 
                1451 et seq.), or any other provision of law applicable 
                with respect to such Office; and
                    (B) existed on the day before the abolishment under 
                subsection (a) of this section.
            (2) Continuation of suits.--No action or other proceeding 
        commenced by or against the Director of the Office of Federal 
        Housing Enterprise Oversight shall abate by reason of the 
        enactment of this Act, except that the Director of the Office 
        of Federal Housing Enterprise Supervision of the Department of 
        the Treasury shall be substituted for the Director of the 
        Office of Federal Housing Enterprise Oversight as a party to 
        any such action or proceeding.

SEC. 202. CONTINUATION AND COORDINATION OF CERTAIN REGULATIONS.

    All regulations, orders, determinations, and resolutions that--
            (1) were issued, made, prescribed, or allowed to become 
        effective by--
                    (A) the Office of Federal Housing Enterprise 
                Oversight;
                    (B) the Secretary of Housing and Urban Development 
                and that relate to the Secretary's authority under--
                            (i) title XIII of the Housing and Community 
                        Development Act of 1992 (12 U.S.C. 4501 et 
                        seq.);
                            (ii) the Federal National Mortgage 
                        Association Charter Act (12 U.S.C. 1716 et 
                        seq.), with respect to the Federal National 
                        Mortgage Association; or
                            (iii) the Federal Home Loan Mortgage 
                        Corporation Act (12 U.S.C. 1451 et seq.); or
                    (C) a court of competent jurisdiction and that 
                relate to functions transferred by this Act; and
            (2) are in effect on the date of the abolishment under 
        section 201(a) of this Act,
shall remain in effect according to the terms of such regulations, 
orders, determinations, and resolutions, and shall be enforceable by or 
against the Director of the Office of Federal Housing Enterprise 
Supervision of the Department of the Treasury until modified, 
terminated, set aside, or superseded in accordance with applicable law 
by such Board, any court of competent jurisdiction, or operation of 
law.

SEC. 203. TRANSFER AND RIGHTS OF EMPLOYEES OF OFHEO.

    (a) Authority To Transfer.--The Director of the Office of Federal 
Housing Enterprise Supervision of the Department of the Treasury may 
transfer employees of the Office of Federal Housing Enterprise 
Oversight to the Office of Federal Housing Enterprise Supervision for 
employment no later than the date of the abolishment under section 
201(a) of this Act, as the Director considers appropriate. This Act and 
the amendments made by this Act shall not be considered to result in 
the transfer of any function from one agency to another or the 
replacement of 1 agency by another, for purposes of section 3505 of 
title 5, United States Code, except to the extent that the Director of 
the Office of Federal Housing Enterprise Supervision specifically 
provides so.
    (b) Appointment Authority for Excepted and Senior Executive Service 
Employees.--
            (1) In general.--Subject to paragraph (2), in the case of 
        employees occupying positions in the excepted service or the 
        Senior Executive Service, any appointment authority established 
        pursuant to law or regulations of the Office of Personnel 
        Management for filling such positions shall be transferred.
            (2) Decline of transfer.--The Director of the Office of 
        Federal Housing Enterprise Supervision of the Department of the 
        Treasury may decline a transfer of authority under paragraph 
        (1) (and the employees appointed pursuant thereto) to the 
        extent that such authority relates to positions excepted from 
        the competitive service because of their confidential, policy-
        making, policy-determining, or policy-advocating character, and 
        noncareer positions in the Senior Executive Service (within the 
        meaning of section 3132(a)(7) of title 5, United States Code).
    (c) Reorganization.--If the Director of the Office of Federal 
Housing Enterprise Supervision of the Department of the Treasury 
determines, after the end of the 1-year period beginning on the date of 
the abolishment under section 201(a), that a reorganization of the 
combined work force is required, that reorganization shall be deemed a 
major reorganization for purposes of affording affected employees 
retirement under section 8336(d)(2) or 8414(b)(1)(B) of title 5, United 
States Code.
    (d) Employee Benefit Programs.--
            (1) In general.--Any employee of the Office of Federal 
        Housing Enterprise Oversight accepting employment with the 
        Director of the Office of Federal Housing Enterprise 
        Supervision of the Department of the Treasury as a result of a 
        transfer under subsection (a) may retain for 18 months after 
        the date such transfer occurs membership in any employee 
        benefit program of the Director of the Office of Federal 
        Housing Enterprise Supervision of the Department of the 
        Treasury or the Office of Federal Housing Enterprise Oversight, 
        as applicable, including insurance, to which such employee 
        belongs on the date of the abolishment under section 201(a) 
        if--
                    (A) the employee does not elect to give up the 
                benefit or membership in the program; and
                    (B) the benefit or program is continued by the 
                Director of the Office of Federal Housing Enterprise 
                Supervision.
            (2) Payment of differential.--The difference in the costs 
        between the benefits which would have been provided by such 
        agency and those provided by this section shall be paid by the 
        Director of the Office of Federal Housing Enterprise 
        Supervision. If any employee elects to give up membership in a 
        health insurance program or the health insurance program is not 
        continued by such Director, the employee shall be permitted to 
        select an alternate Federal health insurance program within 30 
        days of such election or notice, without regard to any other 
        regularly scheduled open season.

SEC. 204. TRANSFER OF PROPERTY AND FACILITIES.

    Upon the abolishment under section 201(a), all property of the 
Office of Federal Housing Enterprise Oversight shall transfer to the 
Director of the Office of Federal Housing Enterprise Supervision of the 
Department of the Treasury.
                                 <all>
```