249 
‘‘(ii) causes or is likely to cause more 
than a minimal loss to such regulated enti-
ty; or 
‘‘(iii) results in pecuniary gain or 
other benefit to such party, the regulated en-
tity or regulated entity-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 regulated entity which, or any regu-
lated entity-affiliated party who— 
‘‘(A) knowingly— 
‘‘(i) commits any violation or engages 
in any conduct described in any subpara-
graph of paragraph (1); 
‘‘(ii) engages in any unsafe or unsound 
practice in conducting the affairs of such 
regulated entity; or 
‘‘(iii) breaches any fiduciary duty; and 
‘‘(B) knowingly or recklessly causes a sub-
stantial loss to such regulated entity or a sub-
stantial pecuniary gain or other benefit to such 
party by reason of such violation, practice, or
250 
breach, shall forfeit and pay a civil penalty in 
an amount not to exceed the applicable max-
imum amount determined under paragraph (4) 
for each day during which such violation, prac-
tice, or breach continues. 
‘‘(4) MAXIMUM AMOUNTS OF PENALTIES FOR ANY 
VIOLATION DESCRIBED IN PARAGRAPH (3).—The max-
imum daily amount of any civil penalty which may 
be assessed pursuant to paragraph (3) for any viola-
tion, practice, or breach described in such paragraph 
is— 
‘‘(A) in the case of any person other than 
a regulated entity, an amount not to exceed 
$2,000,000; and 
‘‘(B) in the case of any regulated entity, 
$2,000,000.’’; 
(3) in subsection (c)(1)(B), by striking ‘‘enter-
prise, executive officer, or director’’ and inserting 
‘‘regulated entity or regulated entity-affiliated party’’; 
(4) in subsection (d), by striking the first sen-
tence and inserting the following: ‘‘If a regulated enti-
ty or regulated entity-affiliated party fails to comply 
with an order of the Director imposing a civil money 
penalty under this section, after the order is no longer 
subject to review as provided under subsection (c)(1)
251 
and section 1374, the Director may, in the discretion 
of the Director, bring an action in 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 regulated entity is lo-
cated, to obtain a monetary judgment against the reg-
ulated entity or regulated entity affiliated party and 
such other relief as may be available, or request that 
the Attorney General of the United States bring such 
an action.’’; and 
(5) in subsection (g), by striking ‘‘subsection 
(b)(3)’’ and inserting ‘‘this section, unless authorized 
by the Director by rule, regulation, or order’’. 
SEC. 166. REMOVAL AND PROHIBITION AUTHORITY. 
(a) IN GENERAL.—Subtitle C of title XIII of the Hous-
ing and Community Development Act of 1992 is amend-
ed— 
(1) by redesignating sections 1377, 1378, 1379, 
1379A, and 1379B (12 U.S.C. 4637–41) as sections 
1379, 1379A, 1379B, 1379C, and 1379D, respectively; 
and 
(2) by inserting after section 1376 (12 U.S.C. 
4636) the following new section:
252 
‘‘SEC. 1377. REMOVAL AND PROHIBITION AUTHORITY. 
‘‘(a) AUTHORITY TO ISSUE ORDER.—Whenever the Di-
rector determines that— 
‘‘(1) any regulated entity-affiliated party has, 
directly or indirectly— 
‘‘(A) violated— 
‘‘(i) any law or regulation; 
‘‘(ii) any cease-and-desist order which 
has become final; 
‘‘(iii) any condition imposed in writ-
ing by the Director in connection with the 
grant of any application or other request by 
such regulated entity; or 
‘‘(iv) any written agreement between 
such regulated entity and the Director; 
‘‘(B) engaged or participated in any unsafe 
or unsound practice in connection with any reg-
ulated entity; or 
‘‘(C) committed or engaged in any act, 
omission, or practice which constitutes a breach 
of such party’s fiduciary duty; 
‘‘(2) by reason of the violation, practice, or 
breach described in any subparagraph of paragraph 
(1)—
253 
‘‘(A) such regulated entity has suffered or 
will probably suffer financial loss or other dam-
age; or 
‘‘(B) such party has received financial gain 
or other benefit by reason of such violation, prac-
tice, or breach; and 
‘‘(3) such violation, practice, or breach— 
‘‘(A) involves personal dishonesty on the 
part of such party; or 
‘‘(B) demonstrates willful or continuing dis-
regard by such party for the safety or soundness 
of such regulated entity, the Director may serve 
upon such party a written notice of the Direc-
tor’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 af-
fairs of any regulated entity. 
‘‘(b) SUSPENSION ORDER.— 
‘‘(1) SUSPENSION
OR
PROHIBITION
AUTHOR-
ITY.—If the Director serves written notice under sub-
section (a) to any regulated entity-affiliated party of 
the Director’s intention to issue an order under such 
subsection, the Director may— 
‘‘(A) suspend such party from office or pro-
hibit such party from further participation in
254 
any manner in the conduct of the affairs of the 
regulated entity, if the Director— 
‘‘(i) determines that such action is nec-
essary for the protection of the regulated en-
tity; and 
‘‘(ii) serves such party with written 
notice of the suspension order; and 
‘‘(B) prohibit the regulated entity from re-
leasing to or on behalf of the regulated entity-af-
filiated party any compensation or other pay-
ment of money or other thing of current or po-
tential value in connection with any resignation, 
removal, retirement, or other termination of em-
ployment or office of the party. 
‘‘(2) EFFECTIVE PERIOD.—Any suspension order 
issued under this subsection— 
‘‘(A) shall become effective upon service; and 
‘‘(B) unless a court issues a stay of such 
order under subsection (g) of this section, shall 
remain in effect and enforceable until— 
‘‘(i) the date the Director dismisses the 
charges contained in the notice served under 
subsection (a) with respect to such party; or
255 
‘‘(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 subsection to any regu-
lated entity-affiliated party, the Director shall serve a 
copy of such order on any regulated entity with which 
such party is affiliated at the time such order is 
issued. 
‘‘(c) NOTICE, HEARING, AND ORDER.—A notice of in-
tention to remove a regulated entity-affiliated party from 
office or to prohibit such party from participating in the 
conduct of the affairs of a regulated entity shall contain 
a statement of the facts constituting grounds for such ac-
tion, and shall fix a time and place at which a hearing 
will be held on such action. Such hearing shall be fixed for 
a date not earlier than 30 days nor later than 60 days after 
the date of service of such notice, unless an earlier or a 
later date is set by the Director at the request of (1) such 
party, and for good cause shown, or (2) the Attorney Gen-
eral of the United States. Unless such party shall appear 
at the hearing in person or by a duly authorized representa-
tive, such party shall be deemed to have consented to the 
issuance of an order of such removal or prohibition. In the 
event of such consent, or if upon the record made at any
256 
such hearing the Director shall find that any of the grounds 
specified in such notice have been established, the Director 
may issue such orders of suspension or removal from office, 
or prohibition from participation in the conduct of the af-
fairs of the regulated entity, as it may deem appropriate, 
together with an order prohibiting compensation described 
in subsection (b)(1)(B). Any such order shall become effec-
tive at the expiration of 30 days after service upon such 
regulated entity and such party (except in the case of an 
order issued upon consent, which shall become effective at 
the time specified therein). Such order shall remain effective 
and enforceable except to such extent as it is stayed, modi-
fied, terminated, or set aside by action of the Director or 
a reviewing court. 
‘‘(d) PROHIBITION
OF CERTAIN SPECIFIC ACTIVI-
TIES.—Any person subject to an order issued under this sec-
tion shall not— 
‘‘(1) participate in any manner in the conduct 
of the affairs of any regulated entity; 
‘‘(2) solicit, procure, transfer, attempt to trans-
fer, vote, or attempt to vote any proxy, consent, or au-
thorization with respect to any voting rights in any 
regulated entity; 
‘‘(3) violate any voting agreement previously ap-
proved by the Director; or
257 
‘‘(4) vote for a director, or serve or act as a regu-
lated entity-affiliated party. 
‘‘(e) INDUSTRY-WIDE PROHIBITION.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), any person who, pursuant to an order 
issued under this section, has been removed or sus-
pended from office in a regulated entity or prohibited 
from participating in the conduct of the affairs of a 
regulated entity may not, while such order is in effect, 
continue or commence to hold any office in, or par-
ticipate in any manner in the conduct of the affairs 
of, any regulated entity. 
‘‘(2) EXCEPTION IF DIRECTOR PROVIDES WRIT-
TEN CONSENT.—If, on or after the date an order is 
issued under this section which removes or suspends 
from office any regulated entity-affiliated party or 
prohibits such party from participating in the con-
duct of the affairs of a regulated entity, 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 regulated entity de-
scribed in the written consent. If the Director grants 
such a written consent, it shall publicly disclose such 
consent.
258 
‘‘(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 specifi-
cally finds that it should apply to a corporation, firm, or 
other business enterprise. 
‘‘(g) STAY OF SUSPENSION AND PROHIBITION OF REG-
ULATED ENTITY-AFFILIATED PARTY.—Within 10 days 
after any regulated entity-affiliated party has been sus-
pended from office and/or prohibited from participation in 
the conduct of the affairs of a regulated entity 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 head-
quarters of the regulated entity is located, for a stay of such 
suspension and/or prohibition and any prohibition under 
subsection (b)(1)(B) pending the completion of the adminis-
trative proceedings pursuant to the notice served upon such 
party under this section, and such court shall have jurisdic-
tion to stay such suspension and/or prohibition. 
‘‘(h) SUSPENSION OR REMOVAL OF REGULATED ENTI-
TY-AFFILIATED PARTY CHARGED WITH FELONY.—
259 
‘‘(1) SUSPENSION OR PROHIBITION.— 
‘‘(A) IN
GENERAL.—Whenever any regu-
lated entity-affiliated party is charged in any 
information, indictment, or complaint, with the 
commission of or participation in a crime in-
volving dishonesty or breach of trust which is 
punishable by imprisonment for a term exceed-
ing one year under State or Federal law, the Di-
rector may, if continued service or participation 
by such party may pose a threat to the regulated 
entity or impair public confidence in the regu-
lated entity, by written notice served upon such 
party— 
‘‘(i) suspend such party from office or 
prohibit such party from further participa-
tion in any manner in the conduct of the 
affairs of any regulated entity; and 
‘‘(ii) prohibit the regulated entity from 
releasing to or on behalf of the regulated en-
tity-affiliated party any compensation or 
other payment of money or other thing of 
current or potential value in connection 
with the period of any such suspension or 
with any resignation, removal, retirement,
260 
or other termination of employment or of-
fice of the party. 
‘‘(B) PROVISIONS
APPLICABLE
TO
NO-
TICE.— 
‘‘(i) COPY.—A copy of any notice 
under paragraph (1)(A) shall also be served 
upon the regulated entity. 
‘‘(ii) EFFECTIVE PERIOD.—A suspen-
sion 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 con-
viction or an agreement to enter a pretrial diver-
sion or other similar program is entered against 
a regulated entity-affiliated party in connection 
with a crime described in paragraph (1)(A), at 
such time as such judgment is not subject to fur-
ther appellate review, the Director may, if con-
tinued service or participation by such party 
may pose a threat to the regulated entity or im-
pair public confidence in the regulated entity, 
issue and serve upon such party an order that—
261 
‘‘(i) removes such party from office or 
prohibits such party from further participa-
tion in any manner in the conduct of the 
affairs of the regulated entity without the 
prior written consent of the Director; and 
‘‘(ii) prohibits the regulated entity 
from releasing to or on behalf of the regu-
lated entity-affiliated party any compensa-
tion or other payment of money or other 
thing of current or potential value in con-
nection with the termination of employment 
or office of the party. 
‘‘(B) PROVISIONS APPLICABLE TO ORDER.— 
‘‘(i) COPY.—A copy of any order under 
paragraph (2)(A) shall also be served upon 
the regulated entity, whereupon the regu-
lated entity-affiliated party who is subject 
to the order (if a director or an officer) 
shall cease to be a director or officer of such 
regulated entity. 
‘‘(ii) EFFECT OF ACQUITTAL.—A find-
ing 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
262 
or to prohibit further participation in regu-
lated entity affairs, and to prohibit com-
pensation or other payment of money or 
other thing of current or potential value in 
connection with any resignation, removal, 
retirement, or other termination of employ-
ment or office of the party, pursuant to sub-
sections (a), (d), or (e) of this section. 
‘‘(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 para-
graph (4) unless terminated by the Director. 
‘‘(3) AUTHORITY
OF
REMAINING
BOARD
MEM-
BERS.—If at any time, because of the suspension of 
one or more directors pursuant to this section, there 
shall be on the board of directors of a regulated entity 
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 direc-
tors. In the event all of the directors of a regulated 
entity are suspended pursuant to this section, the Di-
263 
rector shall appoint persons to serve temporarily as 
directors in their place and stead pending the termi-
nation of such suspensions, or until such time as 
those who have been suspended cease to be directors of 
the regulated entity and their respective successors 
take office. 
‘‘(4) HEARING REGARDING CONTINUED PARTICI-
PATION.—Within 30 days from service of any notice 
of suspension or order of removal issued pursuant to 
paragraph (1) or (2) of this subsection, the regulated 
entity-affiliated party concerned may request in writ-
ing an opportunity to appear before the Director to 
show that the continued service to or participation in 
the conduct of the affairs of the regulated entity by 
such party does not, or is not likely to, pose a threat 
to the interests of the regulated entity or threaten to 
impair public confidence in the regulated entity. 
Upon receipt of any such request, 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 one or more 
members of the Director or designated employees of 
the Director to submit written materials (or, at the 
discretion of the Director, oral testimony) and oral
264 
argument. Within 60 days of such hearing, the Direc-
tor shall notify such party whether the suspension or 
prohibition from participation in any manner in the 
conduct of the affairs of the regulated entity 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 regu-
lated entity, and prohibiting compensation in connec-
tion with termination 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. The Director is authorized to prescribe 
such rules as may be necessary to effectuate the pur-
poses of this subsection. 
‘‘(i) HEARINGS AND JUDICIAL REVIEW.— 
‘‘(1) VENUE
AND
PROCEDURE.—Any hearing 
provided for in this section shall be held in the Dis-
trict of Columbia or in the Federal judicial district 
in which the headquarters of the regulated entity is 
located, unless the party afforded the hearing consents 
to another place, and shall be conducted in accord-
ance with the provisions of chapter 5 of title 5, 
United States Code. After such hearing, and within 
90 days after the Director has notified the parties
265 
that the case has been submitted to it for final deci-
sion, it 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 pro-
ceeding an order or orders consistent with the provi-
sions of this section. Judicial review of any such 
order shall be exclusively as provided in this sub-
section. 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 Di-
rector 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.—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 regulated 
entity or the regulated entity-affiliated party con-
cerned, or an order issued under subsection (h) of this 
section) by the 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
266 
which the headquarters of the regulated entity is lo-
cated, 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. A copy 
of such petition shall be forthwith transmitted by the 
clerk of the court to the Director, and thereupon the 
Director shall file in the court the record in the pro-
ceeding, as provided in section 2112 of title 28, 
United States Code. Upon the filing of such petition, 
such court shall have jurisdiction, which upon the fil-
ing 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. Review of such proceedings 
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 sub-
ject 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 or-
dered by the court, operate as a stay of any order 
issued by the Director.’’.
267 
(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 sen-
tence 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 sec-
tion 1377 of the Housing and Community Develop-
ment Act of 1992 temporarily results in a lesser num-
ber, 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 in-
serting ‘‘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’’. 
SEC. 167. CRIMINAL PENALTY. 
Subtitle C of title XIII of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4631 et seq.) is amend-
268 
ed by inserting after section 1377 (as added by the pre-
ceding provisions of this Act) the following new section: 
‘‘SEC. 1378. CRIMINAL PENALTY. 
‘‘Whoever, being subject to an order in effect under sec-
tion 1377, without the prior written approval of the Direc-
tor, 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 regulated entity shall, notwithstanding section 3571 
of title 18, be fined not more than $1,000,000, imprisoned 
for not more than 5 years, or both.’’. 
SEC. 168. SUBPOENA AUTHORITY. 
Section 1379D(c) of the Housing and Community De-
velopment Act of 1992 (12 U.S.C. 4641(c)), as so redesig-
nated by section 165(a)(1) of this Act, is further amended— 
(1) by striking ‘‘request the Attorney General of 
the United States to’’ and inserting ‘‘, in the discre-
tion of the Director,’’; 
(2) by inserting ‘‘or request that the Attorney 
General of the United States bring such an action,’’ 
after ‘‘District of Columbia,’’; and 
(3) by striking ‘‘or may, under the direction and 
control of the Attorney General, bring such an ac-
tion’’.
269 
SEC. 169. CONFORMING AMENDMENTS. 
Subtitle C of title XIII of the Housing and Community 
Development Act of 1992 is amended— 
(1) in section 1372(c)(1) (12 U.S.C. 4632(c)), by 
striking ‘‘that enterprise’’ and inserting ‘‘that regu-
lated entity’’; 
(2) in section 1379 (12 U.S.C. 4637), as so redes-
ignated by section 165(a)(1) of this Act— 
(A) by inserting ‘‘, or of a regulated entity- 
affiliated party,’’ before ‘‘shall not affect’’; and 
(B) by striking ‘‘such director or executive 
officer’’ each place such term appears and insert-
ing ‘‘such director, executive officer, or regulated 
entity-affiliated party’’; 
(3) in section 1379A (12 U.S.C. 4638), as so re-
designated by section 165(a)(1) of this Act, by insert-
ing ‘‘or against a regulated entity-affiliated party,’’ 
before ‘‘or impair’’; 
(4) by striking ‘‘An enterprise’’ each place such 
term appears in such subtitle and inserting ‘‘A regu-
lated entity’’; 
(5) by striking ‘‘an enterprise’’ each place such 
term appears in such subtitle and inserting ‘‘a regu-
lated entity’’;
270 
(6) by striking ‘‘the enterprise’’ each place such 
term appears in such subtitle and inserting ‘‘the regu-
lated entity’’; and 
(7) by striking ‘‘any enterprise’’ each place such 
term appears in such subtitle and inserting ‘‘any reg-
ulated entity’’. 
Subtitle E—General Provisions 
SEC. 181. PRESIDENTIALLY APPOINTED DIRECTORS OF EN-
TERPRISES. 
(a) FANNIE MAE.— 
(1) IN GENERAL.—Subsection (b) of section 308 
of the Federal National Mortgage Association Charter 
Act (12 U.S.C. 1723(b)) is amended— 
(A) in the first sentence, by striking ‘‘eight-
een persons, five of whom shall be appointed an-
nually by the President of the United States, and 
the remainder of whom’’ and inserting ‘‘not less 
than 7 and not more than 15 persons, who’’; 
(B) in the second sentence, by striking ‘‘ap-
pointed by the President’’; 
(C) in the third sentence— 
(i) by striking ‘‘appointed or’’; and 
(ii) by striking ‘‘, except that any such 
appointed member may be removed from of-
fice by the President for good cause’’;
271 
(D) in the fourth sentence, by striking ‘‘elec-
tive’’; and 
(E) by striking the fifth sentence. 
(2) TRANSITIONAL PROVISION.—The amendments 
made by paragraph (1) shall not apply to any ap-
pointed position of the board of directors of the Fed-
eral National Mortgage Association until the expira-
tion of the annual term for such position during 
which the effective date under section 185 occurs. 
(b) FREDDIE MAC.— 
(1) IN
GENERAL.—Paragraph (2) of section 
303(a) of the Federal Home Loan Mortgage Corpora-
tion Act (12 U.S.C. 1452(a)(2)) is amended— 
(A) in subparagraph (A)— 
(i) in the first sentence, by striking 
‘‘18 persons, 5 of whom shall be appointed 
annually by the President of the United 
States and the remainder of whom’’ and in-
serting ‘‘not less than 7 and not more than 
15 persons, who’’; and 
(ii) in the second sentence, by striking 
‘‘appointed by the President of the United 
States’’; 
(B) in subparagraph (B)— 
(i) by striking ‘‘such or’’; and
272 
(ii) by striking ‘‘, except that any ap-
pointed member may be removed from office 
by the President for good cause’’; and 
(C) in subparagraph (C)— 
(i) by striking the first sentence; and 
(ii) by striking ‘‘elective’’. 
(2) TRANSITIONAL PROVISION.—The amendments 
made by paragraph (1) shall not apply to any ap-
pointed position of the Board of Directors of the Fed-
eral Home Loan Mortgage Corporation until the expi-
ration of the annual term for such position during 
which the effective date under section 185 occurs. 
SEC. 182. REPORT ON PORTFOLIO OPERATIONS, SAFETY 
AND SOUNDNESS, AND MISSION OF ENTER-
PRISES. 
Not later than the expiration of the 12-month period 
beginning on the effective date under section 185, the Direc-
tor of the Federal Housing Finance Agency shall submit 
a report to the Congress which shall include— 
(1) a description of the portfolio holdings of the 
enterprises (as such term is defined in section 1303 
of the Housing and Community Development Act of 
1992 (12 U.S.C. 4502) in mortgages (including whole 
loans and mortgage-backed securities), non-mortgages, 
and other assets;
273 
(2) a description of the risk implications for the 
enterprises of such holdings and the consequent risk 
management undertaken by the enterprises (including 
the use of derivatives for hedging purposes), compared 
with off-balance sheet liabilities of the enterprises (in-
cluding mortgage-backed securities guaranteed by the 
enterprises); 
(3) an analysis of portfolio holdings for safety 
and soundness purposes; 
(4) an assessment of whether portfolio holdings 
fulfill the mission purposes of the enterprises under 
the Federal National Mortgage Association Charter 
Act and the Federal Home Loan Mortgage Corpora-
tion Act; and 
(5) an analysis of the potential systemic risk im-
plications for the enterprises, the housing and capital 
markets, and the financial system of portfolio hold-
ings, and whether such holdings should be limited or 
reduced over time. 
SEC. 183. CONFORMING AND TECHNICAL AMENDMENTS. 
(a) 1992 ACT.—Title XIII of the Housing and Com-
munity Development Act of 1992 is amended by striking 
section 1383 (12 U.S.C. 1451 note). 
(b) TITLE 18, UNITED STATES CODE.—Section 1905 
of title 18, United States Code, is amended by striking ‘‘Of-