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paragraph pursuant to section 1337(i)(1) of 
such Act.’’. 
(d) GAO REPORT.—The Comptroller General shall 
conduct a study to determine the effects that the afford-
able housing fund established under section 1337 of the 
Housing and Community Development Act of 1992, as 
added by the amendment made by subsection (a) of this 
section, will have on the availability and affordability of 
credit for homebuyers, including the effects on such credit 
of the requirement under such section 1337(b) that the 
Federal National Mortgage Association and Federal Home 
Loan Mortgage Corporation make allocations of amounts 
to such fund based on the average total mortgage port-
folios, and the extent to which the costs of such allocation 
requirement will be borne by such entities or will be passed 
on to homebuyers. Not later than the expiration of the 
12-month period beginning on the date of the enactment 
of this Act, the Comptroller General shall submit a report 
to the Congress setting forth the results and conclusions 
of such study. This subsection shall take effect on the date 
of the enactment of this Act. 
SEC. 141. CONSISTENCY WITH MISSION. 
Subpart B of part 2 of subtitle A of title XIII of the 
Housing and Community Development Act of 1992 (12 
U.S.C. 4561 et seq.) is amended by adding after section 
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1337, as added by section 139 of this Act, the following 
new section: 
‘‘SEC. 1338. CONSISTENCY WITH MISSION. 
‘‘This subpart may not be construed to authorize an 
enterprise to engage in any program or activity that con-
travenes or is inconsistent with the Federal National 
Mortgage Association Charter Act or the Federal Home 
Loan Mortgage Corporation Act.’’. 
SEC. 142. ENFORCEMENT. 
(a) 
CEASE-AND-DESIST
PROCEEDINGS.—Section 
1341 of the Housing and Community Development Act 
of 1992 (12 U.S.C. 4581) is amended— 
(1) by striking subsection (a) and inserting the 
following new subsection: 
‘‘(a) GROUNDS FOR ISSUANCE.—The Director may 
issue and serve a notice of charges under this section upon 
an enterprise if the Director determines— 
‘‘(1) the enterprise has failed to meet any hous-
ing goal established under subpart B, following a 
written notice and determination of such failure in 
accordance with section 1336; 
‘‘(2) the enterprise has failed to submit a report 
under section 1314, following a notice of such fail-
ure, an opportunity for comment by the enterprise, 
and a final determination by the Director; 
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‘‘(3) the enterprise has failed to submit the in-
formation required under subsection (m) or (n) of 
section 309 of the Federal National Mortgage Asso-
ciation Charter Act, or subsection (e) or (f) of sec-
tion 307 of the Federal Home Loan Mortgage Cor-
poration Act; 
‘‘(4) the enterprise has violated any provision of 
this part or any order, rule or regulation under this 
part; 
‘‘(5) the enterprise has failed to submit a hous-
ing plan that complies with section 1336(c) within 
the applicable period; or 
‘‘(6) the enterprise has failed to comply with a 
housing plan under section 1336(c).’’; 
(2) in subsection (b)(2), by striking ‘‘requiring 
the enterprise to’’ and all that follows through the 
end of the paragraph and inserting the following: 
‘‘requiring the enterprise to— 
‘‘(A) comply with the goal or goals; 
‘‘(B) submit a report under section 1314; 
‘‘(C) comply with any provision this part 
or any order, rule or regulation under such 
part; 
‘‘(D) submit a housing plan in compliance 
with section 1336(c); 
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‘‘(E) comply with a housing plan submitted 
under section 1336(c); or 
‘‘(F) provide the information required 
under subsection (m) or (n) of section 309 of 
the Federal National Mortgage Association 
Charter Act or subsection (e) or (f) of section 
307 of the Federal Home Loan Mortgage Cor-
poration Act, as applicable.’’; 
(3) in subsection (c), by inserting ‘‘date of the’’ 
before ‘‘service of the order’’; and 
(4) by striking subsection (d). 
(b) AUTHORITY OF DIRECTOR TO ENFORCE NO-
TICES AND ORDERS.—Section 1344 of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4584) 
is amended by striking subsection (a) and inserting the 
following new subsection: 
‘‘(a) ENFORCEMENT.—The Director may, in the dis-
cretion 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 head-
quarters of the enterprise is located, for the enforcement 
of any effective and outstanding notice or order issued 
under section 1341 or 1345, or request that the Attorney 
General of the United States bring such an action. Such 
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court shall have jurisdiction and power to order and re-
quire compliance with such notice or order.’’. 
(c) CIVIL MONEY PENALTIES.—Section 1345 of the 
Housing and Community Development Act of 1992 (12 
U.S.C. 4585) is amended— 
(1) by striking subsections (a) and (b) and in-
serting the following new subsections: 
‘‘(a) AUTHORITY.—The Director may impose a civil 
money penalty, in accordance with the provisions of this 
section, on any enterprise that has failed to— 
‘‘(1) meet any housing goal established under 
subpart B, following a written notice and determina-
tion of such failure in accordance with section 
1336(b); 
‘‘(2) submit a report under section 1314, fol-
lowing a notice of such failure, an opportunity for 
comment by the enterprise, and a final determina-
tion by the Director; 
‘‘(3) submit the information required under 
subsection (m) or (n) of section 309 of the Federal 
National Mortgage Association Charter Act, or sub-
section (e) or (f) of section 307 of the Federal Home 
Loan Mortgage Corporation Act; 
‘‘(4) comply with any provision of this part or 
any order, rule or regulation under this part; 
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‘‘(5) submit a housing plan pursuant to section 
1336(c) within the required period; or 
‘‘(6) comply with a housing plan for the enter-
prise under section 1336(c). 
‘‘(b) AMOUNT OF PENALTY.—The amount of the 
penalty, as determined by the Director, may not exceed— 
‘‘(1) for any failure described in paragraph (1), 
(5), or (6) of subsection (a), $50,000 for each day 
that the failure occurs; and 
‘‘(2) for any failure described in paragraph (2), 
(3), or (4) of subsection (a), $20,000 for each day 
that the failure occurs.’’; 
(2) in subsection (c)— 
(A) in paragraph (1)— 
(i) in subparagraph (A), by inserting 
‘‘and’’ after the semicolon at the end; 
(ii) in subparagraph (B), by striking 
‘‘; and’’ and inserting a period; and 
(iii) by striking subparagraph (C); 
and 
(B) in paragraph (2), by inserting after 
the period at the end the following: ‘‘In deter-
mining the penalty under subsection (a)(1), the 
Director shall give consideration to the length 
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of time the enterprise should reasonably take to 
achieve the goal.’’; 
(3) in the first sentence of subsection (d)— 
(A) by striking ‘‘request the Attorney Gen-
eral of the United States to’’ and inserting ‘‘, 
in the discretion of the Director,’’; and 
(B) by inserting ‘‘, or request that the At-
torney General of the United States bring such 
an action’’ before the period at the end; 
(4) by striking subsection (f); and 
(5) by redesignating subsection (g) as sub-
section (f). 
(d) 
ENFORCEMENT
OF
SUBPOENAS.—Section 
1348(c) of the Housing and Community Development Act 
of 1992 (12 U.S.C. 4588(c)) is amended— 
(1) by striking ‘‘request the Attorney General 
of the United States to’’ and inserting ‘‘, in the dis-
cretion of the Director,’’; and 
(2) by inserting ‘‘or request that the Attorney 
General of the United States bring such an action,’’ 
after ‘‘District of Columbia,’’. 
(e) CONFORMING AMENDMENT.—The heading for 
subpart C of part 2 of subtitle A of title XIII of the Hous-
ing and Community Development Act of 1992 is amended 
to read as follows: 
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‘‘Subpart C—Enforcement’’. 
SEC. 143. CONFORMING AMENDMENTS. 
Part 2 of subtitle A of title XIII of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4541 et 
seq.) is amended— 
(1) by striking ‘‘Secretary’’ each place such 
term appears in such part and inserting ‘‘Director’’; 
(2) in the section heading for section 1323 (12 
U.S.C. 4543), by inserting ‘‘OF ENTERPRISES’’ be-
fore the period at the end; 
(3) by striking section 1327 (12 U.S.C. 4547); 
(4) by striking section 1328 (12 U.S.C. 4548); 
(5) by redesignating section 1329 (as amended 
by section 135) as section 1327; 
(6) in sections 1345(c)(1)(A), 1346(a), and 
1346(b) (12 U.S.C. 4585(c)(1)(A), 4586(a), and 
4586(b)), by striking ‘‘Secretary’s’’ each place such 
term appears and inserting ‘‘Director’s’’; and 
(7) by striking section 1349 (12 U.S.C. 4589). 
Subtitle C—Prompt Corrective 
Action 
SEC. 151. CAPITAL CLASSIFICATIONS. 
(a) IN GENERAL.—Section 1364 of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4614) 
is amended— 
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(1) in the heading for subsection (a), by strik-
ing ‘‘IN GENERAL’’ and inserting ‘‘ENTERPRISES’’. 
(2) in subsection (c)— 
(A) by striking ‘‘subsection (b)’’ and in-
serting ‘‘subsection (c)’’; 
(B) by striking ‘‘enterprises’’ and inserting 
‘‘regulated entities’’; and 
(C) by striking the last sentence; 
(3) by redesignating subsections (c) (as so 
amended by paragraph (2) of this subsection) and 
(d) as subsections (d) and (f), respectively; 
(4) by striking subsection (b) and inserting the 
following new subsections: 
‘‘(b) FEDERAL HOME LOAN BANKS.— 
‘‘(1) ESTABLISHMENT
AND
CRITERIA.—For 
purposes of this subtitle, the Director shall, by regu-
lation— 
‘‘(A) establish the capital classifications 
specified under paragraph (2) for the Federal 
home loan banks; 
‘‘(B) establish criteria for each such cap-
ital classification based on the amount and 
types of capital held by a bank and the risk- 
based, minimum, and critical capital levels for 
the banks and taking due consideration of the 
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capital classifications established under sub-
section (a) for the enterprises, with such modi-
fications as the Director determines to be ap-
propriate to reflect the difference in operations 
between the banks and the enterprises; and 
‘‘(C) shall classify the Federal home loan 
banks according to such capital classifications. 
‘‘(2) CLASSIFICATIONS.—The capital classifica-
tions specified under this paragraph are— 
‘‘(A) adequately capitalized; 
‘‘(B) undercapitalized; 
‘‘(C) significantly undercapitalized; and 
‘‘(D) critically undercapitalized. 
‘‘(c) DISCRETIONARY CLASSIFICATION.— 
‘‘(1) GROUNDS
FOR
RECLASSIFICATION.—The 
Director may reclassify a regulated entity under 
paragraph (2) if— 
‘‘(A) at any time, the Director determines 
in writing that the regulated entity is engaging 
in conduct that could result in a rapid depletion 
of core or total capital or, in the case of an en-
terprise, that the value of the property subject 
to mortgages held or securitized by the enter-
prise has decreased significantly; 
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‘‘(B) after notice and an opportunity for 
hearing, the Director determines that the regu-
lated entity is in an unsafe or unsound condi-
tion; or 
‘‘(C) pursuant to section 1371(b), the Di-
rector deems the regulated entity to be engag-
ing in an unsafe or unsound practice. 
‘‘(2) RECLASSIFICATION.—In addition to any 
other action authorized under this title, including 
the reclassification of a regulated entity for any rea-
son not specified in this subsection, if the Director 
takes any action described in paragraph (1) the Di-
rector may classify a regulated entity— 
‘‘(A) as undercapitalized, if the regulated 
entity is otherwise classified as adequately cap-
italized; 
‘‘(B) as significantly undercapitalized, if 
the regulated entity is otherwise classified as 
undercapitalized; and 
‘‘(C) as critically undercapitalized, if the 
regulated entity is otherwise classified as sig-
nificantly undercapitalized.’’; and 
(5) by inserting after subsection (d) (as so re-
designated by paragraph (3) of this subsection), the 
following new subsection: 
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‘‘(e) RESTRICTION ON CAPITAL DISTRIBUTIONS.— 
‘‘(1) IN
GENERAL.—A regulated entity shall 
make no capital distribution if, after making the dis-
tribution, the regulated entity would be under-
capitalized. 
‘‘(2) EXCEPTION.—Notwithstanding paragraph 
(1), the Director may permit a regulated entity, to 
the extent appropriate or applicable, to repurchase, 
redeem, retire, or otherwise acquire shares or owner-
ship interests if the repurchase, redemption, retire-
ment, or other acquisition— 
‘‘(A) is made in connection with the 
issuance of additional shares or obligations of 
the regulated entity in at least an equivalent 
amount; and 
‘‘(B) will reduce the financial obligations of 
the regulated entity or otherwise improve the fi-
nancial condition of the entity.’’. 
(b) REGULATIONS.—Not later than the expiration of 
the 180-day period beginning on the effective date under 
section 185, the Director of the Federal Housing Finance 
Agency shall issue regulations to carry out section 1364(b) 
of the Housing and Community Development Act of 1992 
(as added by paragraph (4) of this subsection), relating 
to capital classifications for the Federal home loan banks. 
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SEC. 152. SUPERVISORY ACTIONS APPLICABLE TO UNDER-
CAPITALIZED REGULATED ENTITIES. 
Section 1365 of the Housing and Community Devel-
opment Act of 1992 (12 U.S.C. 4615) is amended— 
(1) in the section heading, by striking ‘‘ENTER-
PRISES’’ and inserting ‘‘REGULATED ENTITIES’’; 
(2) in subsection (a)— 
(A) by redesignating paragraphs (1) and 
(2) as paragraphs (2) and (3), respectively; 
(B) by inserting before paragraph (2), as 
so redesignated by subparagraph (A) of this 
paragraph, the following paragraph: 
‘‘(1) REQUIRED
MONITORING.—The Director 
shall— 
‘‘(A) closely monitor the condition of any 
regulated entity that is classified as under-
capitalized; 
‘‘(B) closely monitor compliance with the 
capital restoration plan, restrictions, and re-
quirements imposed under this section; and 
‘‘(C) periodically review the plan, restric-
tions, and requirements applicable to the under-
capitalized regulated entity to determine wheth-
er the plan, restrictions, and requirements are 
achieving the purpose of this section.’’; and 
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(C) by inserting at the end the following 
new paragraphs: 
‘‘(4) RESTRICTION OF ASSET GROWTH.—A reg-
ulated entity that is classified as undercapitalized 
shall not permit its average total assets (as such 
term is defined in section 1316(b) during any cal-
endar quarter to exceed its average total assets dur-
ing the preceding calendar quarter unless— 
‘‘(A) the Director has accepted the capital 
restoration plan of the regulated entity; 
‘‘(B) any increase in total assets is con-
sistent with the plan; and 
‘‘(C) the ratio of total capital to assets for 
the regulated entity increases during the cal-
endar quarter at a rate sufficient to enable the 
entity to become adequately capitalized within a 
reasonable time. 
‘‘(5) PRIOR APPROVAL OF ACQUISITIONS, NEW 
PRODUCTS, AND NEW ACTIVITIES.—A regulated enti-
ty that is classified as undercapitalized shall not, di-
rectly or indirectly, acquire any interest in any entity 
or initially offer any new product (as such term is 
defined in section 1321(f)) or engage in any new ac-
tivity, service, undertaking, or offering unless— 
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