247 
‘‘(ii) receive any salary or benefits for 
service in any such capacity with respect to 
a limited-life regulated entity in addition to 
such salary or benefits as are obtained 
through employment with the Agency or 
such Federal instrumentality. 
‘‘(13) ADDITIONAL
POWERS.—In addition to 
any other powers granted under this subsection, a 
limited-life regulated entity may— 
‘‘(A) extend a maturity date or change in 
an interest rate or other term of outstanding 
securities; 
‘‘(B) issue securities of the limited-life reg-
ulated entity, for cash, for property, for existing 
securities, or in exchange for claims or inter-
ests, or for any other appropriate purposes; and 
‘‘(C) take any other action not inconsistent 
with this section. 
‘‘(j) OTHER EXEMPTIONS.—When acting as a re-
ceiver, the following provisions shall apply with respect to 
the Agency: 
‘‘(1) EXEMPTION FROM TAXATION.—The Agen-
cy, including its franchise, its capital, reserves, and 
surplus, and its income, shall be exempt from all 
taxation imposed by any State, country, munici-
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248 
pality, or local taxing authority, except that any real 
property of the Agency shall be subject to State, ter-
ritorial, county, municipal, or local taxation to the 
same extent according to its value as other real 
property is taxed, except that, notwithstanding the 
failure of any person to challenge an assessment 
under State law of the value of such property, and 
the tax thereon, shall be determined as of the period 
for which such tax is imposed. 
‘‘(2) EXEMPTION
FROM
ATTACHMENT
AND 
LIENS.—No property of the Agency shall be subject 
to levy, attachment, garnishment, foreclosure, or sale 
without the consent of the Agency, nor shall any in-
voluntary lien attach to the property of the Agency. 
‘‘(3) 
EXEMPTION
FROM
PENALTIES
AND 
FINES.—The Agency shall not be liable for any 
amounts in the nature of penalties or fines, includ-
ing those arising from the failure of any person to 
pay any real property, personal property, probate, or 
recording tax or any recording or filing fees when 
due. 
‘‘(k) PROHIBITION OF CHARTER REVOCATION.—In 
no case may a receiver appointed pursuant to this section 
revoke, annul, or terminate the charter of a regulated enti-
ty.’’. 
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249 
(b) CONFORMING AMENDMENTS.— 
(1) HOUSING AND COMMUNITY DEVELOPMENT 
ACT OF 1992.—Subtitle B of title XIII of the Hous-
ing and Community Development Act of 1992 is 
amended by striking sections 1369 (12 U.S.C. 
4619), 1369A (12 U.S.C. 4620), and 1369B (12 
U.S.C. 4621). 
(2) FEDERAL HOME LOAN BANKS.—Section 25 
of the Federal Home Loan Bank Act (12 U.S.C. 
1445) is amended by striking ‘‘Board under this 
Act’’ and inserting ‘‘Director under section 1367 of 
the Housing and Community Development Act of 
1992’’. 
SEC. 145. CONFORMING AMENDMENTS. 
Title XIII of the Housing and Community Develop-
ment Act of 1992, as amended by the preceding provisions 
of this Act, is further amended— 
(1) in sections 1365 (12 U.S.C. 4615) through 
1369D (12 U.S.C. 4623), but not including section 
1367 (12 U.S.C. 4617) as added by section 144 of 
this Act— 
(A) by striking ‘‘An enterprise’’ each place 
such term appears and inserting ‘‘A regulated 
entity’’; 
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250 
(B) by striking ‘‘an enterprise’’ each place 
such term appears and inserting ‘‘a regulated 
entity’’; and 
(C) by striking ‘‘the enterprise’’ each place 
such term appears and inserting ‘‘the regulated 
entity’’; 
(2) in section 1366 (12 U.S.C. 4616)— 
(A) in subsection (b)(7), by striking ‘‘sec-
tion 1369 (excluding subsection (a)(1) and 
(2))’’ and inserting ‘‘section 1367’’; and 
(B) in subsection (d), by striking ‘‘the en-
terprises’’ and inserting ‘‘the regulated enti-
ties’’; 
(3) in section 1368(d) (12 U.S.C. 4618(d)), by 
striking ‘‘Committee on Banking, Finance and 
Urban Affairs’’ and inserting ‘‘Committee on Finan-
cial Services’’; 
(4) in section 1369C (12 U.S.C. 4622)— 
(A) in subsection (a)(4), by striking ‘‘ac-
tivities (including existing and new programs)’’ 
and inserting ‘‘activities, services, undertakings, 
and offerings (including existing and new prod-
ucts (as such term is defined in section 
1321(f))’’; and 
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251 
(B) in subsection (c), by striking ‘‘any en-
terprise’’ and inserting ‘‘any regulated entity’’; 
and 
(5) in subsections (a) and (d) of section 1369D, 
by striking ‘‘section 1366 or 1367 or action under 
section 1369)’’ each place such phrase appears and 
inserting ‘‘section 1367)’’. 
Subtitle D—Enforcement Actions 
SEC. 161. CEASE-AND-DESIST PROCEEDINGS. 
Section 1371 of the Housing and Community Devel-
opment Act of 1992 (12 U.S.C. 4631) is amended— 
(1) by striking subsections (a) and (b) and in-
serting the following new subsections: 
‘‘(a) ISSUANCE FOR UNSAFE OR UNSOUND PRAC-
TICES AND VIOLATIONS OF RULES OR LAWS.—If, in the 
opinion of the Director, a regulated entity or any regulated 
entity-affiliated party is engaging or has engaged, or the 
Director has reasonable cause to believe that the regulated 
entity or any regulated entity-affiliated party is about to 
engage, in an unsafe or unsound practice in conducting 
the business of the regulated entity or is violating or has 
violated, or the Director has reasonable cause to believe 
that the regulated entity or any regulated entity-affiliated 
party is about to violate, a law, rule, or regulation, or any 
condition imposed in writing by the Director in connection 
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252 
with the granting of any application or other request by 
the regulated entity or any written agreement entered into 
with the Director, the Director may issue and serve upon 
the regulated entity or such party a notice of charges in 
respect thereof. The Director may not, pursuant to this 
section, enforce compliance with any housing goal estab-
lished 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 Mort-
gage Association Charter Act (12 U.S.C. 1723a(m), (n)), 
with subsection (e) or (f) of section 307 of the Federal 
Home Loan Mortgage Corporation Act (12 U.S.C. 
1456(e), (f)), or with paragraph (5) of section 10(j) of 
the Federal Home Loan Bank Act (12 U.S.C. 1430(j)). 
‘‘(b) ISSUANCE FOR UNSATISFACTORY RATING.—If a 
regulated entity receives, in its most recent report of ex-
amination, a less-than-satisfactory rating for asset quality, 
management, earnings, or liquidity, the Director may (if 
the deficiency is not corrected) deem the regulated entity 
to be engaging in an unsafe or unsound practice for pur-
poses of this subsection.’’; 
(2) in subsection (c)(2), by striking ‘‘enterprise, 
executive officer, or director’’ and inserting ‘‘regu-
lated entity or regulated entity-affiliated party’’; and 
(3) in subsection (d)— 
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253 
(A) in the matter preceding paragraph (1), 
by striking ‘‘enterprise, executive officer, or di-
rector’’ and inserting ‘‘regulated entity or regu-
lated entity-affiliated party’’; 
(B) in paragraph (1)— 
(i) by striking ‘‘an executive officer or 
director’’ and inserting ‘‘a regulated entity 
affiliated party’’; and 
(ii) by inserting ‘‘(including reim-
bursement of compensation under section 
1318)’’ after ‘‘reimbursement’’; 
(C) in paragraph (6), by striking ‘‘and’’ at 
the end; 
(D) by redesignating paragraph (7) as 
paragraph (8); and 
(E) by inserting after paragraph (6) the 
following new paragraph: 
‘‘(7) to effect an attachment on a regulated en-
tity or regulated entity-affiliated party subject to an 
order under this section or section 1372; and’’. 
SEC. 162. TEMPORARY CEASE-AND-DESIST PROCEEDINGS. 
Section 1372 of the Housing and Community Devel-
opment Act of 1992 (12 U.S.C. 4632) is amended— 
(1) by striking subsection (a) and inserting the 
following new subsection: 
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254 
‘‘(a) GROUNDS FOR ISSUANCE.—Whenever the Direc-
tor determines that the violation or threatened violation 
or the unsafe or unsound practice or practices specified 
in the notice of charges served upon the regulated entity 
or any regulated entity-affiliated party pursuant to section 
1371(a), or the continuation thereof, is likely to cause in-
solvency or significant dissipation of assets or earnings of 
the regulated entity, or is likely to weaken the condition 
of the regulated entity prior to the completion of the pro-
ceedings conducted pursuant to sections 1371 and 1373, 
the Director may issue a temporary order requiring the 
regulated entity or such party to cease and desist from 
any such violation or practice and to take affirmative ac-
tion to prevent or remedy such insolvency, dissipation, 
condition, or prejudice pending completion of such pro-
ceedings. Such order may include any requirement author-
ized under section 1371(d).’’; 
(2) in subsection (b), by striking ‘‘enterprise, 
executive officer, or director’’ and inserting ‘‘regu-
lated entity or regulated entity-affiliated party’’; 
(3) in subsection (d)— 
(A) by striking ‘‘An enterprise, executive 
officer, or director’’ and inserting ‘‘A regulated 
entity or regulated entity-affiliated party’’; and 
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255 
(B) by striking ‘‘the enterprise, executive 
officer, or director’’ and inserting ‘‘the regu-
lated entity or regulated entity-affiliated party’’; 
and 
(4) by striking subsection (e) and in inserting 
the following new subsection: 
‘‘(e) ENFORCEMENT.—In the case of violation or 
threatened violation of, or failure to obey, a temporary 
cease-and-desist order issued pursuant to 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 regulated entity is located, for an injunction to enforce 
such order, and, if the court determines that there has 
been such violation or threatened violation or failure to 
obey, it shall be the duty of the court to issue such injunc-
tion.’’. 
SEC. 163. PREJUDGMENT ATTACHMENT. 
The Housing and Community Development Act of 
1992 is amended by inserting after section 1375 (12 
U.S.C. 4635) the following new section: 
‘‘SEC. 1375A. PREJUDGMENT ATTACHMENT. 
‘‘(a) IN GENERAL.—In any action brought pursuant 
to this title, or in actions brought in aid of, or to enforce 
an order in, any administrative or other civil action for 
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256 
money damages, restitution, or civil money penalties 
brought pursuant to this title, the court may, upon appli-
cation of the Director or Attorney General, as applicable, 
issue a restraining order that— 
‘‘(1) prohibits any person subject to the pro-
ceeding from withdrawing, transferring, removing, 
dissipating, or disposing of any funds, assets or 
other property; and 
‘‘(2) appoints a person on a temporary basis to 
administer the restraining order. 
‘‘(b) STANDARD.— 
‘‘(1) SHOWING.—Rule 65 of the Federal Rules 
of Civil Procedure shall apply with respect to any 
proceeding under subsection (a) without regard to 
the requirement of such rule that the applicant show 
that the injury, loss, or damage is irreparable and 
immediate. 
‘‘(2) STATE PROCEEDING.—If, in the case of 
any proceeding in a State court, the court deter-
mines that rules of civil procedure available under 
the laws of such State provide substantially similar 
protections to a party’s right to due process as Rule 
65 (as modified with respect to such proceeding by 
paragraph (1)), the relief sought under subsection 
(a) may be requested under the laws of such State.’’. 
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257 
SEC. 164. ENFORCEMENT AND JURISDICTION. 
Section 1375 of the Housing and Community Devel-
opment Act of 1992 (12 U.S.C. 4635) is amended— 
(1) 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 regulated entity is located, for the enforce-
ment 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. 165. CIVIL MONEY PENALTIES. 
Section 1376 of the Housing and Community Devel-
opment Act of 1992 (12 U.S.C. 4636) is amended— 
(1) in subsection (a)— 
(A) in the matter preceding paragraph (1), 
by striking ‘‘or any executive officer or’’ and in-
serting ‘‘any executive officer of a regulated en-
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258 
tity, any regulated entity-affiliated party, or 
any’’; and 
(B) in paragraph (1)— 
(i) by striking ‘‘the Federal National 
Mortgage Association Charter Act, the 
Federal Home Loan Mortgage Corporation 
Act’’ and inserting ‘‘any provision of any 
of the authorizing statutes’’; 
(ii) by striking ‘‘or Act’’ and inserting 
‘‘or statute’’; 
(iii) by striking ‘‘or subsection’’ and 
inserting ‘‘, subsection’’; and 
(iv) by inserting ‘‘, or paragraph (5) 
or (12) of section 10(j) of the Federal 
Home Loan Bank Act’’ before the semi-
colon at the end; 
(2) by striking subsection (b) and inserting the 
following new subsection: 
‘‘(b) AMOUNT OF PENALTY.— 
‘‘(1) FIRST TIER.—Any regulated entity which, 
or any regulated entity-affiliated party who— 
‘‘(A) violates any provision of this title, 
any provision of any of the authorizing statutes, 
or any order, condition, rule, or regulation 
under any such title or statute, except that the 
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259 
Director may not, pursuant to this section, en-
force compliance with any housing goal estab-
lished 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)), with 
subsection (e) or (f) of section 307 of the Fed-
eral Home Loan Mortgage Corporation Act (12 
U.S.C. 1456(e), (f)), or with paragraph (5) or 
(12) of section 10(j) of the Federal Home Loan 
Bank Act; 
‘‘(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 regulated entity; or 
‘‘(D) violates any written agreement be-
tween the regulated entity and the Director, 
shall forfeit and pay a civil money penalty of not 
more than $10,000 for each day during which such 
violation continues. 
‘‘(2) SECOND
TIER.—Notwithstanding para-
graph (1)— 
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260 
‘‘(A) if a regulated entity, or a regulated 
entity-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 af-
fairs of such regulated entity; or 
‘‘(iii) breaches any fiduciary duty; and 
‘‘(B) the violation, practice, or breach— 
‘‘(i) is part of a pattern of mis-
conduct; 
‘‘(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 entity 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 
para-
graphs (1) and (2), any regulated entity which, or 
any regulated entity-affiliated party who— 
‘‘(A) knowingly— 
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261 
‘‘(i) commits any violation or engages 
in any conduct described in any subpara-
graph of paragraph (1); 
‘‘(ii) engages in any unsafe or un-
sound 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 
breach, 
shall forfeit and pay a civil penalty in an amount not 
to exceed the applicable maximum amount deter-
mined 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 
a regulated entity, an amount not to exceed 
$2,000,000; and 
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262 
‘‘(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 en-
tity or regulated entity-affiliated party fails to com-
ply 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 sub-
section (c)(1) 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 Co-
lumbia, or the United States district court within 
the jurisdiction of which the headquarters of the reg-
ulated entity is located, to obtain a monetary judg-
ment against the regulated 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 author-
ized by the Director by rule, regulation, or order’’. 
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263 
SEC. 166. REMOVAL AND PROHIBITION AUTHORITY. 
(a) IN GENERAL.—Subtitle C of title XIII of the 
Housing and Community Development Act of 1992 is 
amended— 
(1) by redesignating sections 1377, 1378, 1379, 
1379A, and 1379B (12 U.S.C. 4637–41) as sections 
1379, 1379A, 1379B, 1379C, and 1379D, respec-
tively; and 
(2) by inserting after section 1376 (12 U.S.C. 
4636) the following new section: 
‘‘SEC. 1377. REMOVAL AND PROHIBITION AUTHORITY. 
‘‘(a) AUTHORITY TO ISSUE ORDER.—Whenever the 
Director 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 writing 
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; 
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264 
‘‘(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)— 
‘‘(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, 
practice, 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 
disregard by such party for the safety or sound-
ness of such regulated entity, the Director may 
serve upon such party a written notice of the 
Director’s intention to remove such party from 
office or to prohibit any further participation by 
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265 
such party, in any manner, in the conduct of 
the affairs of any regulated entity. 
‘‘(b) SUSPENSION ORDER.— 
‘‘(1) SUSPENSION
OR
PROHIBITION
AUTHOR-
ITY.—If the Director serves written notice under 
subsection (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 
prohibit such party from further participation 
in any manner in the conduct of the affairs of 
the regulated entity, if the Director— 
‘‘(i) determines that such action is 
necessary for the protection of the regu-
lated entity; 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- 
affiliated 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 
employment or office of the party. 
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266 
‘‘(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 
‘‘(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 
intention 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 
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267 
such action, and shall fix a time and place at which a hear-
ing 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 At-
torney General of the United States. Unless such party 
shall appear at the hearing in person or by a duly author-
ized representative, 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 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 suspen-
sion or removal from office, or prohibition from participa-
tion in the conduct of the affairs of the regulated entity, 
as it may deem appropriate, together with an order pro-
hibiting compensation described in subsection (b)(1)(B). 
Any such order shall become effective 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, modified, terminated, 
or set aside by action of the Director or a reviewing court. 
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268 
‘‘(d) PROHIBITION OF CERTAIN SPECIFIC ACTIVI-
TIES.—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 regulated entity; 
‘‘(2) solicit, procure, transfer, attempt to trans-
fer, vote, or attempt to vote any proxy, consent, or 
authorization with respect to any voting rights in 
any regulated entity; 
‘‘(3) violate any voting agreement previously 
approved by the Director; or 
‘‘(4) vote for a director, or serve or act as a 
regulated 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 prohib-
ited 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 participate 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 
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269 
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 en-
tity described in the written consent. If the Director 
grants such a written consent, it shall publicly dis-
close such consent. 
‘‘(3) VIOLATION OF PARAGRAPH (1) TREATED 
AS VIOLATION OF ORDER.—Any violation of para-
graph (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 spe-
cifically finds that it should apply to a corporation, firm, 
or other business enterprise. 
‘‘(g) STAY OF SUSPENSION AND PROHIBITION OF 
REGULATED
ENTITY-AFFILIATED
PARTY.—Within 10 
days after any regulated entity-affiliated party has been 
suspended 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 
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270 
District Court for the District of Columbia, or the United 
States district court for the judicial district in which the 
headquarters 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 
administrative proceedings pursuant to the notice served 
upon such party under this section, and such court shall 
have jurisdiction to stay such suspension and/or prohibi-
tion. 
‘‘(h) SUSPENSION OR REMOVAL OF REGULATED EN-
TITY-AFFILIATED PARTY CHARGED WITH FELONY.— 
‘‘(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 
Director may, if continued service or participa-
tion by such party may pose a threat to the 
regulated entity or impair public confidence in 
the regulated entity, by written notice served 
upon such party— 
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271 
‘‘(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 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 period of any such sus-
pension or with any resignation, removal, 
retirement, or other termination of employ-
ment or office 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 informa-
tion, indictment, or complaint referred to 
in such subparagraph is finally disposed of 
or until terminated by the Director. 
‘‘(2) REMOVAL OR PROHIBITION.— 
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272 
‘‘(A) IN GENERAL.—If a judgment of con-
viction or an agreement to enter a pretrial di-
version 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 further appellate review, the Director 
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, issue and serve upon such party an 
order that— 
‘‘(i) removes such party from office or 
prohibits such party from further partici-
pation 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 employ-
ment or office of the party. 
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273 
‘‘(B) 
PROVISIONS
APPLICABLE
TO 
ORDER.— 
‘‘(i) COPY.—A copy of any order 
under paragraph (2)(A) shall also be 
served upon the regulated entity, where-
upon the regulated 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 or to prohibit further participation in 
regulated entity affairs, and to prohibit 
compensation or other payment of money 
or other thing of current or potential value 
in connection with any resignation, re-
moval, retirement, or other termination of 
employment or office of the party, pursu-
ant to subsections (a), (d), or (e) of this 
section. 
‘‘(iii) EFFECTIVE
PERIOD.—Any no-
tice of suspension or order of removal 
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274 
issued under this subsection shall remain 
effective and outstanding until the comple-
tion of any hearing or appeal authorized 
under paragraph (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 enti-
ty 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 di-
rector or directors on the board not so suspended, 
until such time as there shall be a quorum of the 
board of directors. In the event all of the directors 
of a regulated entity 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 regulated entity and 
their respective successors take office. 
‘‘(4) HEARING
REGARDING
CONTINUED
PAR-
TICIPATION.—Within 30 days from service of any 
notice of suspension or order of removal issued pur-
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275 
suant to paragraph (1) or (2) of this subsection, the 
regulated entity-affiliated party concerned may re-
quest 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 reg-
ulated entity by such party does not, or is not likely 
to, pose a threat to the interests of the regulated en-
tity 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 mate-
rials (or, at the discretion of the Director, oral testi-
mony) and oral argument. Within 60 days of such 
hearing, the Director shall notify such party whether 
the suspension or prohibition from participation in 
any manner in the conduct of the affairs of the reg-
ulated entity will be continued, terminated, or other-
wise modified, or whether the order removing such 
party from office or prohibiting such party from fur-
ther participation in any manner in the conduct of 
the affairs of the regulated entity, and prohibiting 
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276 
compensation in connection with termination will be 
rescinded or otherwise modified. Such notification 
shall contain a statement of the basis for the Direc-
tor’s decision, if adverse to such party. The Director 
is authorized to prescribe such rules as may be nec-
essary to effectuate the purposes 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 con-
sents to another place, and shall be conducted in ac-
cordance 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 
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 predi-
cated) 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. Unless a petition for review is timely 
filed in a court of appeals of the United States, as 
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277 
provided in paragraph (2), and thereafter until the 
record in the proceeding has been filed as so pro-
vided, the Director may at any time, upon such no-
tice 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 permis-
sion 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 concerned, 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 Cir-
cuit or court of appeals of the United States for the 
circuit in which the headquarters of the regulated 
entity 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. 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 proceeding, as provided in section 2112 
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278 
of title 28, United States Code. Upon the filing of 
such petition, such court 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. Re-
view of such proceedings shall be had as provided in 
chapter 7 of title 5, United States Code. The judg-
ment and decree of the court shall be final, except 
that the same shall be subject to review by the Su-
preme 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 re-
view under paragraph (2) shall not, unless specifi-
cally 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 Fed-
eral National Mortgage Association Charter Act (12 
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279 
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 Devel-
opment 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 that ac-
tion under section 1377 of the Housing and Commu-
nity Development Act of 1992 temporarily results in 
a lesser number, the’’. 
SEC. 167. CRIMINAL PENALTY. 
Subtitle C of title XIII of the Housing and Commu-
nity Development Act of 1992 (12 U.S.C. 4631 et seq.) 
is amended by inserting after section 1377 (as added by 
the preceding provisions of this Act) the following new sec-
tion: 
‘‘SEC. 1378. CRIMINAL PENALTY. 
‘‘Whoever, being subject to an order in effect under 
section 1377, without the prior written approval of the Di-
rector, 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 
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280 
of any regulated entity shall, notwithstanding section 
3571 of title 18, be fined not more than $1,000,000, im-
prisoned for not more than 5 years, or both.’’. 
SEC. 168. SUBPOENA AUTHORITY. 
Section 1379D(c) of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4641(c)), as so re-
designated 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 dis-
cretion 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 
action’’. 
SEC. 169. CONFORMING AMENDMENTS. 
Subtitle C of title XIII of the Housing and Commu-
nity 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 
regulated entity’’; 
(2) in section 1379 (12 U.S.C. 4637), as so re-
designated by section 165(a)(1) of this Act— 
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281 
(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 in-
serting ‘‘such director, executive officer, or reg-
ulated entity-affiliated party’’; 
(3) in section 1379A (12 U.S.C. 4638), as so 
redesignated by section 165(a)(1) of this Act, by in-
serting ‘‘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’’; 
(6) by striking ‘‘the enterprise’’ each place such 
term appears in such subtitle and inserting ‘‘the reg-
ulated entity’’; and 
(7) by striking ‘‘any enterprise’’ each place such 
term appears in such subtitle and inserting ‘‘any 
regulated entity’’. 
Subtitle E—General Provisions 
SEC. 181. BOARDS OF ENTERPRISES. 
(a) FANNIE MAE.— 
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282 
(1) IN
GENERAL.—Subsection (b) of section 
308 of the Federal National Mortgage Association 
Charter Act (12 U.S.C. 1723(b)) is amended in the 
first sentence by striking ‘‘eighteen persons,’’ and 
inserting ‘‘not less than 7 and not more than 15 
persons,’’. 
(2) TRANSITIONAL
PROVISION.—The amend-
ments made by paragraph (1) shall not apply to any 
appointed position of the board of directors of the 
Federal National Mortgage Association until the ex-
piration 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 Cor-
poration Act (12 U.S.C. 1452(a)(2) is amended in 
subparagraph (A) by striking ‘‘eighteen persons,’’ 
and inserting ‘‘not less than 7 and not more than 
15 persons,’’. 
(2) TRANSITIONAL
PROVISION.—The amend-
ments made by paragraph (1) shall not apply to any 
appointed position of the Board of Directors of the 
Federal Home Loan Mortgage Corporation until the 
expiration of the annual term for such position dur-
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283 
ing which the effective date under section 185 oc-
curs. 
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 Di-
rector of the Federal Housing Finance Agency shall sub-
mit 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; 
(2) a description of the risk implications for the 
enterprises of such holdings and the consequent risk 
management undertaken by the enterprises (includ-
ing the use of derivatives for hedging purposes), 
compared with off-balance sheet liabilities of the en-
terprises (including mortgage-backed securities guar-
anteed by the enterprises); 
(3) an analysis of portfolio holdings for safety 
and soundness purposes; 
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284 
(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 
implications for the enterprises, the housing and 
capital markets, and the financial system of portfolio 
holdings, and whether such holdings should be lim-
ited 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 
‘‘Office of Federal Housing Enterprise Oversight’’ and in-
serting ‘‘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 strik-
ing ‘‘Director of the Office of Federal Housing Enterprise 
Oversight of the Department of Housing and Urban De-
velopment’’ and inserting ‘‘Director of the Federal Hous-
ing Finance Agency’’. 
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285 
(d) DEPARTMENT OF HOUSING AND URBAN DEVEL-
OPMENT 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 
Federal 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: 
‘‘Deputy Directors, Federal Housing Finance Agency 
(3).’’. 
(3) EXCLUSION
FROM
SENIOR
EXECUTIVE 
SERVICE.—Section 3132(a)(1)(D) of title 5, United 
States Code, is amended by striking ‘‘the Office of 
Federal Housing Enterprise Oversight of the De-
partment 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. 
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