274 
fice of Federal Housing Enterprise Oversight’’ and insert-
ing ‘‘Federal Housing Finance Agency’’ . 
(c) 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 Over-
sight of the Department of Housing and Urban Develop-
ment’’ and inserting ‘‘Director of the Federal Housing Fi-
nance Agency’’. 
(d) DEPARTMENT OF HOUSING AND URBAN DEVELOP-
MENT ACT.—Section 5 of the Department of Housing and 
Urban Development Act (42 U.S.C. 3534) is amended by 
striking subsection (d). 
(e) TITLE 5, UNITED STATES CODE.— 
(1) DIRECTOR’S
PAY
RATE.—Section 5313 of 
title 5, United States Code, is amended by striking 
the item relating to the Director of the Office of Fed-
eral Housing Enterprise Oversight, Department of 
Housing and Urban Development and inserting the 
following new item: 
‘‘ Director of the Federal Housing Finance Agency.’’. 
(2) DEPUTY
DIRECTORS’ PAY
RATE.—Section 
5314 of title 5, United States Code, is amended by 
adding at the end the following new item:
275 
‘‘Deputy Directors, Federal Housing Finance Agency 
(3).’’. 
(3) PAY RATE FOR MEMBERS OF HOUSING FI-
NANCE OVERSIGHT BOARD.—Section 5315 of title 5, 
United States Code, is amended by adding at the end 
the following new item: 
‘‘Members, Housing Finance Oversight Board.’’. 
(4) EXCLUSION FROM SENIOR EXECUTIVE SERV-
ICE.—Section 3132(a)(1)(D) of title 5, United States 
Code, is amended by striking ‘‘the Office of Federal 
Housing Enterprise Oversight of the Department of 
Housing and Urban Development’’ and inserting ‘‘the 
Federal Housing Finance Agency’’. 
(f) INSPECTOR GENERAL ACT
OF 1978.—Section 
8G(a)(2) of the Inspector General Act of 1978 (5 U.S.C. 
App.) is amended by striking ‘‘Federal Housing Finance 
Board’’ and inserting ‘‘Federal Housing Finance Agency’’. 
(g) FEDERAL DEPOSIT INSURANCE ACT.—Section 
11(t)(2)(A) of the Federal Deposit Insurance Act (12 
U.S.C.1821(t)(2)(A)) is amended by adding at the end the 
following new clause: 
‘‘(vii) The Federal Housing Finance 
Agency.’’. 
(h) 1997 EMERGENCY SUPPLEMENTAL APPROPRIA-
TIONS ACT.—Section 10001 of the 1997 Emergency Supple-
276 
mental Appropriations Act for Recovery From Natural Dis-
asters, and for Overseas Peacekeeping Efforts, Including 
Those In Bosnia (42 U.S.C. 3548) is amended— 
(1) by striking ‘‘the Government National Mort-
gage Association, and the Office of Federal Housing 
Enterprise Oversight’’ and inserting ‘‘and the Govern-
ment National Mortgage Association’’; and 
(2) by striking ‘‘, the Government National 
Mortgage Association, or the Office of Federal Hous-
ing Enterprise Oversight’’ and inserting ‘‘or the Gov-
ernment National Mortgage Association’’. 
(i) NATIONAL HOMEOWNERSHIP TRUST ACT .—Sec-
tion 302(b)(4) of the Cranston-Gonzalez National Affordable 
Housing Act (42 U.S.C. 12851(b)(4)) is amended by strik-
ing ‘‘the chairperson of the Federal Housing Finance 
Board’’ and inserting ‘‘the Director of the Federal Housing 
Finance Agency’’. 
SEC. 184. STUDY OF ALTERNATIVE SECONDARY MARKET 
SYSTEMS. 
(a) IN GENERAL.—The Director of the Federal Hous-
ing Finance Agency, in consultation with the Board of Gov-
ernors of the Federal Reserve System, the Secretary of the 
Treasury, and the Secretary of Housing and Urban Devel-
opment, shall conduct a comprehensive study of the effects 
on financial and housing finance markets of alternatives
277 
to the current secondary market system for housing finance, 
taking into consideration changes in the structure of finan-
cial and housing finance markets and institutions since the 
creation of the Federal National Mortgage Association and 
the Federal Home Loan Mortgage Corporation. 
(b) CONTENTS.—The study under this section shall— 
(1) include, among the alternatives to the current 
secondary market system analyzed— 
(A) repeal of the chartering Acts for the 
Federal National Mortgage Association and the 
Federal Home Loan Mortgage Corporation; 
(B) establishing bank-like mechanisms for 
granting new charters for limited purposed 
mortgage securitization entities; 
(C) permitting the Director of the Federal 
Housing Finance Agency to grant new charters 
for limited purpose mortgage securitization enti-
ties, which shall include analyzing the terms on 
which such charters should be granted, including 
whether such charters should be sold, or whether 
such charters and the charters for the Federal 
National Mortgage Association and the Federal 
Home Loan Mortgage Corporation should be 
taxed or otherwise assessed a monetary price; 
and
278 
(D) such other alternatives as the Director 
considers appropriate; 
(2) examine all of the issues involved in making 
the transition to a completely private secondary mort-
gage market system; 
(3) examine the technological advancements the 
private sector has made in providing liquidity in the 
secondary mortgage market and how such advance-
ments have affected liquidity in the secondary mort-
gage market; and 
(4) examine how taxpayers would be impacted 
by each alternative system, including the complete 
privatization of the Federal National Mortgage Asso-
ciation and the Federal Home Loan Mortgage Cor-
poration. 
(c) REPORT.—The Director of the Federal Housing Fi-
nance Agency shall submit a report to the Congress on the 
study not later than the expiration of the 12-month period 
beginning on the effective date under section 185. 
SEC. 185. 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 pe-
riod beginning on the date of the enactment of this Act.
279 
TITLE II—FEDERAL HOME LOAN 
BANKS 
SEC. 201. DEFINITIONS. 
Section 2 of the Federal Home Loan Bank Act (12 
U.S.C. 1422) is amended— 
(1) by striking paragraphs (1), (10), and (11); 
(2) by redesignating paragraphs (2) through (9) 
as paragraphs (1) through (8), respectively; 
(3) by redesignating paragraphs (12) and (13) 
as paragraphs (9) and (10), respectively; and 
(4) by adding at the end the following: 
‘‘(11) DIRECTOR.—The term ‘Director’ means 
the Director of the Federal Housing Finance Agency. 
‘‘(12) AGENCY.—The term ‘Agency’ means the 
Federal Housing Finance Agency.’’. 
SEC. 202. DIRECTORS. 
(a) ELECTION.—Section 7 of the Federal Home Loan 
Bank Act (12 U.S.C. 1427) is amended— 
(1) by striking subsection (a) and inserting the 
following: 
‘‘(a) NUMBER; ELECTION; QUALIFICATIONS; CON-
FLICTS OF INTEREST.— 
‘‘(1) IN
GENERAL.—The management of each 
Federal Home Loan Bank shall be vested in a board 
of 13 directors, or such other number as the Director
280 
determines appropriate, each of whom shall be elected 
by the members and shall be a citizen of the United 
States. 
‘‘(2) MEMBER DIRECTORS.—A majority of the 
directors of each Bank shall be officers or directors of 
a member of such Bank that is located in the district 
in which such Bank is located. 
‘‘(3) INDEPENDENT DIRECTORS.—At least one- 
third of the directors of each Bank shall be inde-
pendent directors as follows: 
‘‘(A) IN GENERAL.—Each independent di-
rector shall be a bona fide resident of the district 
in which such Bank is located. 
‘‘(B) PUBLIC
INTEREST
DIRECTORS.—At 
least 2 of the independent directors under this 
paragraph of each Bank shall be representatives 
chosen from organizations with more than a 2- 
year history of representing consumer or commu-
nity interests on banking services, credit needs, 
housing, or financial consumer protections. 
‘‘(C) 
OTHER
DIRECTORS.—Each 
inde-
pendent director that is not a public interest di-
rector under subparagraph (B) shall have dem-
onstrated knowledge of, or experience in, finan-
cial management, auditing and accounting, risk
281 
management practices, derivatives, project devel-
opment, or organizational management, or such 
other knowledge or expertise as the Director may 
provide by regulation. 
‘‘(D) CONFLICTS OF INTEREST.—An inde-
pendent director under this paragraph of a Bank 
may not, during such director’s term of office, 
serve as an officer of any Federal Home Loan 
Bank or as a director or officer of any member 
of a Bank.’’; 
(2) in subsection (b)— 
(A) in the first sentence, by striking ‘‘direc-
torship’’ and inserting ‘‘member directorship 
pursuant to subsection (a)(2)’’; and 
(B) by inserting after the period at the end 
of the first sentence the following new sentence: 
‘‘Each independent directorship pursuant to sub-
section (a)(3) shall be filled by election by a plu-
rality of the votes of the members of the Bank at 
large, in which election each member shall be en-
titled to nominate candidates and to cast the 
same number of votes as in an election to fill a 
directorship allocated to the member’s State.’’; 
(3) in subsection (c), by striking the second, 
third, and fifth sentences;
282 
(4) in subsection (d)— 
(A) in the first sentence, by striking ‘‘, 
whether elected or appointed,’’; 
(B) in the second sentence, by striking ‘‘or 
appointed’’; and 
(C) in the third sentence, by striking ‘‘an 
elective’’ each place such term appears and in-
serting ‘‘a’’; and 
(5) by striking ‘‘elective’’ each place such term 
appears (except in subsection (e)). 
(b) TERMS.— 
(1) IN GENERAL.—Section 7(d) of the Federal 
Home Loan Bank Act (12 U.S.C. 1427(i)) is amend-
ed— 
(A) in the first sentence, by striking ‘‘3 
years’’ and inserting ‘‘4 years’’; and 
(B) in the second sentence— 
(i) by striking ‘‘Federal Home Loan 
Bank System Modernization Act of 1999’’ 
and inserting ‘‘Federal Housing Finance 
Reform Act of 2005’’; and 
(ii) by striking ‘‘1/3’’ and inserting ‘‘1/ 
4’’. 
(2) SAVINGS PROVISION.—The amendments made 
by paragraph (1) shall not apply to the term of office
283 
of any director of a Federal home loan bank who is 
serving as of the effective date of this Act under sec-
tion 211, including any director elected to fill a va-
cancy in any such office. 
(c) VACANCIES.—Subsection (f) of section 7 of the Fed-
eral Home Loan Bank Act (12 U.S.C. 1427(f)) is amended 
to read as follows: 
‘‘(f) VACANCIES.—A Bank director elected to fill a va-
cancy shall be elected for the unexpired term of his or her 
predecessor in office. In the event of a vacancy in any Bank 
directorship, such vacancy shall be filled by an affirmative 
vote of a majority of the remaining Bank directors, regard-
less of whether such remaining Bank directors constitute a 
quorum of the Bank’s board of directors. A Bank director 
so elected shall satisfy the requirements for eligibility which 
were applicable to his predecessor. If any Bank director 
shall cease to have any qualification set forth in this section, 
the office held by such person shall immediately become va-
cant. ’’. 
(d) COMPENSATION.—Subsection (i) of section 7 of the 
Federal Home Loan Bank Act (12 U.S.C. 1427(i)) is 
amended to read as follows: 
‘‘(i) DIRECTORS’ COMPENSATION.— 
‘‘(1) IN
GENERAL.—Each Federal home loan 
bank may pay the directors on the board of directors
284 
for the bank reasonable and appropriate compensa-
tion for the time required of such directors, and rea-
sonable and appropriate expenses incurred by such 
directors, in connection with service on the board of 
directors, in accordance with resolutions adopted by 
the board of directors and subject to the approval of 
the Director. 
‘‘(2) ANNUAL REPORT BY THE BOARD.—The Di-
rector shall include, in the annual report submitted to 
the Congress pursuant to section 1319B of the Federal 
Housing Enterprises Financial Safety and Soundness 
Act of 1992, information regarding the compensation 
and expenses paid by the Federal home loan banks to 
the directors on the boards of directors of the banks.’’. 
(e) TRANSITION RULE.—Any member of the board of 
directors of a Federal Home Loan Bank serving as of the 
effective date under section 211 may continue to serve as 
a member of such board of directors for the remainder of 
the term of such office as provided in section 7 of the Fed-
eral Home Loan Bank Act, as in effect before such effective 
date.
285 
SEC. 203. FEDERAL HOUSING FINANCE AGENCY OVERSIGHT 
OF FEDERAL HOME LOAN BANKS. 
The Federal Home Loan Bank Act (12 U.S.C. 1421 
et seq.), other than in provisions of that Act added or 
amended otherwise by this Act, is amended— 
(1) by striking sections 2A and 2B (12 U.S.C. 
1422a, 1422b); 
(2) in section 6 (12 U.S.C. 1426(b)(1))— 
(A) in subsection (b)(1), in the matter pre-
ceding subparagraph (A), by striking ‘‘Finance 
Board approval’’ and inserting ‘‘approval by the 
Director’’; and 
(B) in each of subsections (c)(4)(B) and 
(d)(2), by striking ‘‘Finance Board regulations’’ 
each place that term appears and inserting ‘‘reg-
ulations of the Director’’; 
(3) in section 8 (12 U.S.C. 1428), in the section 
heading, by striking ‘‘BY THE BOARD’’; 
(4) in section 10(b) (12 U.S.C. 1430), by strik-
ing ‘‘by formal resolution’’; 
(5) in section 11 (12 U.S.C. 1431)— 
(A) in subsection (b)— 
(i) in the first sentence— 
(I) by striking ‘‘The Board’’ and 
inserting ‘‘The Office of Finance, as 
agent for the Banks,’’; and
286 
(II) by striking ‘‘the Board’’ and 
inserting ‘‘such Office’’; and 
(ii) in the second and fourth sentences, 
by striking ‘‘the Board’’ each place such 
term appears and inserting ‘‘the Office of 
Finance’’; 
(B) in subsection (c)— 
(i) by striking ‘‘the Board’’ the first 
place such term appears and inserting ‘‘the 
Office of Finance, as agent for the Banks,’’; 
and 
(ii) by striking ‘‘the Board’’ the second 
place such term appears and inserting 
‘‘such Office’’; and 
(C) in subsection (f)— 
(i) by striking the two commas after 
‘‘permit’’ and inserting ‘‘or’’; and 
(ii) by striking the comma after ‘‘re-
quire’’; 
(6) in section 15 (12 U.S.C. 1435), by inserting 
‘‘or the Director’’ after ‘‘the Board’’; 
(7) in section 18 (12 U.S.C. 1438), by striking 
subsection (b); 
(8) in section 21 (12 U.S.C. 1441)— 
(A) in subsection (b)—
287 
(i) in paragraph (5), by striking 
‘‘Chairperson of the Federal Housing Fi-
nance Board’’ and inserting ‘‘Director’’; 
and 
(ii) in the heading for paragraph (8), 
by striking ‘‘FEDERAL
HOUSING
FINANCE 
BOARD’’ and inserting ‘‘DIRECTOR’’; and 
(B) in subsection (i), in the heading for 
paragraph (2), by striking ‘‘FEDERAL HOUSING 
FINANCE BOARD’’ and inserting ‘‘DIRECTOR’’; 
(9) in section 23 (12 U.S.C. 1443), by striking 
‘‘Board of Directors of the Federal Housing Finance 
Board’’ and inserting ‘‘Director’’; 
(10) by striking ‘‘the Board’’ each place such 
term appears in such Act (except in section 15 (12 
U.S.C. 1435), section 21(f)(2) (12 U.S.C. 1441(f)(2)), 
subsections (a), (k)(2)(B)(i), and (n)(6)(C)(ii) of sec-
tion 21A (12 U.S.C. 1441a), subsections (e)(7), 
(f)(2)(C), and (k)(7)(B)(ii) of section 21B (12 U.S.C. 
1441b), and the first two places such term appears in 
section 22 (12 U.S.C. 1442)) and inserting ‘‘the Di-
rector’’; 
(11) by striking ‘‘The Board’’ each place such 
term appears in such Act (except in sections 7(e) (12
288 
U.S.C. 1427(e)), and 11(b) (12 U.S.C. 1431(b)) and 
inserting ‘‘The Director’’; 
(12) by striking ‘‘the Board’s’’ each place such 
term appears in such Act and inserting ‘‘the Direc-
tor’s’’; 
(13) by striking ‘‘The Board’s’’ each place such 
term appears in such Act and inserting ‘‘The Direc-
tor’s’’; 
(14) by striking ‘‘The Finance Board’’ each place 
such term appears in such Act and inserting ‘‘The 
Director’’; 
(15) by striking ‘‘the Finance Board’’ each place 
such term appears in such Act and inserting ‘‘the Di-
rector’’; 
(16) by striking ‘‘Federal Housing Finance 
Board’’ each place such term appears and inserting 
‘‘Director’’; 
(17) in section 11(i) (12 U.S.C. 1431(i), by 
striking ‘‘the Chairperson of’’; and 
(18) in section 21(e)(9) (12 U.S.C. 1441(e)(9)), 
by striking ‘‘Chairperson of the’’. 
SEC. 204. JOINT ACTIVITIES OF BANKS. 
Section 11 of the Federal Home Loan Bank Act (12 
U.S.C. 1431) is amended by adding at the end the following 
new subsection:
289 
‘‘(l) JOINT ACTIVITIES.—Subject to the regulation of 
the Director, any two or more Federal Home Loan Banks 
may establish a joint office for the purpose of performing 
functions for, or providing services to, the Banks on a com-
mon or collective basis, or may require that the Office of 
Finance perform such functions or services, but only if the 
Banks are otherwise authorized to perform such functions 
or services individually.’’. 
SEC. 205. SHARING OF INFORMATION BETWEEN FEDERAL 
HOME LOAN BANKS. 
(a) IN GENERAL.— The Federal Home Loan Bank Act 
is amended by inserting after section 20 (12 U.S.C. 1440) 
the following new section: 
‘‘SEC. 20A. SHARING OF INFORMATION BETWEEN FEDERAL 
HOME LOAN BANKS. 
‘‘(a) REGULATORY AUTHORITY.—The Director shall 
prescribe such regulations as may be necessary to ensure 
that each Federal Home Loan Bank has access to informa-
tion that the Bank needs to determine the nature and extent 
of its joint and several liability. 
‘‘(b) NO WAIVER OF PRIVILEGE.—The Director shall 
not be deemed to have waived any privilege applicable to 
any information concerning a Federal Home Loan Bank 
by transferring, or permitting the transfer of, that informa-
tion to any other Federal Home Loan Bank for the purpose
290 
of enabling the recipient to evaluate the nature and extent 
of its joint and several liability.’’. 
(b) REGULATIONS.—The regulations required under 
the amendment made by subsection (a) shall be issued in 
final form not later than 6 months after the effective date 
under section 211 of this Act. 
SEC. 206. REORGANIZATION OF BANKS AND VOLUNTARY 
MERGER. 
Section 26 of the Federal Home Loan Bank Act (12 
U.S.C. 1446) is amended— 
(1) by inserting ‘‘(a) REORGANIZATION.—’’ be-
fore ‘‘Whenever’’; and 
(2) by striking ‘‘liquidated or’’ each place such 
phrase appears; 
(3) by striking ‘‘liquidation or’’; and 
(4) by adding at the end the following new sub-
section: 
‘‘(b) VOLUNTARY MERGERS.—Any Bank may, with the 
approval of the Director, and the approval of the boards 
of directors of the Banks involved, merge with another 
Bank. The Director shall promulgate regulations estab-
lishing the conditions and procedures for the consideration 
and approval of any such voluntary merger, including the 
procedures for Bank member approval.’’.