325 
agreement or transaction referred to 
in this clause; 
‘‘(VII) any combination of the 
agreements or transactions referred to 
in this clause; 
‘‘(VIII) any option to enter into 
any agreement or transaction referred 
to in this clause; 
‘‘(IX) a master agreement that 
provides for an agreement or trans-
action referred to in subclause (I), 
(II), (III), (IV), (V), (VI), (VII), or 
(VIII), together with all supplements 
to any such master agreement, with-
out regard to whether the master 
agreement provides for an agreement 
or transaction that is not a com-
modity contract under this clause, ex-
cept that the master agreement shall 
be considered to be a commodity con-
tract under this clause only with re-
spect to each agreement or trans-
action under the master agreement 
that is referred to in subclause (I), 
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(II), (III), (IV), (V), (VI), (VII), or 
(VIII); or 
‘‘(X) any security agreement or 
arrangement or other credit enhance-
ment related to any agreement or 
transaction referred to in this clause, 
including any guarantee or reimburse-
ment obligation in connection with 
any agreement or transaction referred 
to in this clause. 
‘‘(iv) 
FORWARD
CONTRACT.—The 
term ‘forward contract’ means— 
‘‘(I) a contract (other than a 
commodity contract) for the purchase, 
sale, or transfer of a commodity or 
any similar good, article, service, 
right, or interest which is presently or 
in the future becomes the subject of 
dealing in the forward contract trade, 
or product or byproduct thereof, with 
a maturity date more than 2 days 
after the date the contract is entered 
into, including, a repurchase trans-
action, reverse repurchase transaction, 
consignment, 
lease, 
swap, 
hedge 
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transaction, deposit, loan, option, allo-
cated transaction, unallocated trans-
action, or any other similar agree-
ment; 
‘‘(II) any combination of agree-
ments or transactions referred to in 
subclauses (I) and (III); 
‘‘(III) any option to enter into 
any agreement or transaction referred 
to in subclause (I) or (II); 
‘‘(IV) a master agreement that 
provides for an agreement or trans-
action referred to in subclauses (I), 
(II), or (III), together with all supple-
ments to any such master agreement, 
without regard to whether the master 
agreement provides for an agreement 
or transaction that is not a forward 
contract under this clause, except that 
the master agreement shall be consid-
ered to be a forward contract under 
this clause only with respect to each 
agreement or transaction under the 
master agreement that is referred to 
in subclause (I), (II), or (III); or 
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328 
‘‘(V) any security agreement or 
arrangement or other credit enhance-
ment related to any agreement or 
transaction referred to in subclause 
(I), (II), (III), or (IV), including any 
guarantee or reimbursement obliga-
tion in connection with any agreement 
or transaction referred to in any such 
subclause. 
‘‘(v) REPURCHASE AGREEMENT.—The 
term ‘repurchase agreement’ (which defini-
tion also applies to a reverse repurchase 
agreement)— 
‘‘(I) means an agreement, includ-
ing related terms, which provides for 
the transfer of one or more certifi-
cates of deposit, mortgage-related se-
curities (as such term is defined in 
the Securities Exchange Act of 1934), 
mortgage loans, interests in mortgage- 
related securities or mortgage loans, 
eligible bankers’ acceptances, qualified 
foreign government securities or secu-
rities that are direct obligations of, or 
that are fully guaranteed by, the 
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329 
United States or any agency of the 
United States against the transfer of 
funds by the transferee of such certifi-
cates of deposit, eligible bankers’ ac-
ceptances, securities, mortgage loans, 
or interests with a simultaneous 
agreement by such transferee to 
transfer to the transferor thereof cer-
tificates of deposit, eligible bankers’ 
acceptances, 
securities, 
mortgage 
loans, or interests as described above, 
at a date certain not later than 1 year 
after such transfers or on demand, 
against the transfer of funds, or any 
other similar agreement; 
‘‘(II) does not include any repur-
chase obligation under a participation 
in a commercial mortgage loan unless 
the Agency determines by regulation, 
resolution, or order to include any 
such participation within the meaning 
of such term; 
‘‘(III) means any combination of 
agreements or transactions referred to 
in subclauses (I) and (IV); 
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331 
ment obligation in connection with 
any agreement or transaction referred 
to in any such subclause. 
For purposes of this clause, the term 
‘qualified foreign government security’ 
means a security that is a direct obligation 
of, or that is fully guaranteed by, the cen-
tral government of a member of the Orga-
nization for Economic Cooperation and 
Development (as determined by regulation 
or order adopted by the appropriate Fed-
eral banking authority). 
‘‘(vi) SWAP AGREEMENT.—The term 
‘swap agreement’ means— 
‘‘(I) any agreement, including the 
terms and conditions incorporated by 
reference in any such agreement, 
which is an interest rate swap, option, 
future, or forward agreement, includ-
ing a rate floor, rate cap, rate collar, 
cross-currency rate swap, and basis 
swap; a spot, same day-tomorrow, to-
morrow-next, forward, or other for-
eign exchange or precious metals 
agreement; a currency swap, option, 
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332 
future, or forward agreement; an eq-
uity index or equity swap, option, fu-
ture, or forward agreement; a debt 
index or debt swap, option, future, or 
forward agreement; a total return, 
credit spread or credit swap, option, 
future, or forward agreement; a com-
modity index or commodity swap, op-
tion, future, or forward agreement; or 
a weather swap, weather derivative, or 
weather option; 
‘‘(II) any agreement or trans-
action that is similar to any other 
agreement or transaction referred to 
in this clause and that is of a type 
that has been, is presently, or in the 
future becomes, the subject of recur-
rent dealings in the swap markets (in-
cluding terms and conditions incor-
porated by reference in such agree-
ment) and that is a forward, swap, fu-
ture, or option on one or more rates, 
currencies, commodities, equity securi-
ties or other equity instruments, debt 
securities or other debt instruments, 
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333 
quantitative measures associated with 
an occurrence, extent of an occur-
rence, or contingency associated with 
a financial, commercial, or economic 
consequence, or economic or financial 
indices or measures of economic or fi-
nancial risk or value; 
‘‘(III) any combination of agree-
ments or transactions referred to in 
this clause; 
‘‘(IV) any option to enter into 
any agreement or transaction referred 
to in this clause; 
‘‘(V) a master agreement that 
provides for an agreement or trans-
action referred to in subclause (I), 
(II), (III), or (IV), together with all 
supplements to any such master 
agreement, without regard to whether 
the master agreement contains an 
agreement or transaction that is not a 
swap agreement under this clause, ex-
cept that the master agreement shall 
be considered to be a swap agreement 
under this clause only with respect to 
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334 
each agreement or transaction under 
the master agreement that is referred 
to in subclause (I), (II), (III), or (IV); 
and 
‘‘(VI) any security agreement or 
arrangement or other credit enhance-
ment related to any agreements or 
transactions referred to in subclause 
(I), (II), (III), (IV), or (V), including 
any guarantee or reimbursement obli-
gation in connection with any agree-
ment or transaction referred to in any 
such subclause. 
Such term is applicable for purposes of 
this subsection only and shall not be con-
strued or applied so as to challenge or af-
fect the characterization, definition, or 
treatment of any swap agreement under 
any other statute, regulation, or rule, in-
cluding the Securities Act of 1933, the Se-
curities Exchange Act of 1934, the Public 
Utility Holding Company Act of 1935, the 
Trust Indenture Act of 1939, the Invest-
ment Company Act of 1940, the Invest-
ment Advisers Act of 1940, the Securities 
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335 
Investor Protection Act of 1970, the Com-
modity Exchange Act, the Gramm-Leach- 
Bliley Act, and the Legal Certainty for 
Bank Products Act of 2000. 
‘‘(vii) 
TREATMENT
OF
MASTER 
AGREEMENT
AS
ONE
AGREEMENT.—Any 
master agreement for any contract or 
agreement described in any preceding 
clause of this subparagraph (or any master 
agreement for such master agreement or 
agreements), together with all supplements 
to such master agreement, shall be treated 
as a single agreement and a single quali-
fied financial contract. If a master agree-
ment contains provisions relating to agree-
ments or transactions that are not them-
selves qualified financial contracts, the 
master agreement shall be deemed to be a 
qualified financial contract only with re-
spect to those transactions that are them-
selves qualified financial contracts. 
‘‘(viii) TRANSFER.—The term ‘trans-
fer’ means every mode, direct or indirect, 
absolute or conditional, voluntary or invol-
untary, of disposing of or parting with 
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336 
property or with an interest in property, 
including retention of title as a security in-
terest and foreclosure of the regulated en-
tity’s equity of redemption. 
‘‘(E) CERTAIN PROTECTIONS IN EVENT OF 
APPOINTMENT
OF
CONSERVATOR.—Notwith-
standing any other provision of this Act (other 
than paragraph (13) of this subsection), any 
other Federal law, or the law of any State, no 
person shall be stayed or prohibited from exer-
cising— 
‘‘(i) any right such person has to 
cause the termination, liquidation, or accel-
eration of any qualified financial contract 
with a regulated entity in a conservator-
ship based upon a default under such fi-
nancial contract which is enforceable under 
applicable noninsolvency law; 
‘‘(ii) any right under any security 
agreement or arrangement or other credit 
enhancement relating to one or more such 
qualified financial contracts; or 
‘‘(iii) any right to offset or net out 
any termination values, payment amounts, 
or other transfer obligations arising under 
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337 
or in connection with such qualified finan-
cial contracts. 
‘‘(F) CLARIFICATION.—No provision of law 
shall be construed as limiting the right or 
power of the Agency, or authorizing any court 
or agency to limit or delay, in any manner, the 
right or power of the Agency to transfer any 
qualified financial contract in accordance with 
paragraphs (9) and (10) of this subsection or to 
disaffirm or repudiate any such contract in ac-
cordance with subsection (d)(1) of this section. 
‘‘(G) WALKAWAY
CLAUSES
NOT
EFFEC-
TIVE.— 
‘‘(i) IN
GENERAL.—Notwithstanding 
the provisions of subparagraphs (A) and 
(E), and sections 403 and 404 of the Fed-
eral Deposit Insurance Corporation Im-
provement Act of 1991, no walkaway 
clause shall be enforceable in a qualified fi-
nancial contract of a regulated entity in 
default. 
‘‘(ii) WALKAWAY CLAUSE DEFINED.— 
For purposes of this subparagraph, the 
term ‘walkaway clause’ means a provision 
in a qualified financial contract that, after 
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340 
business day following the date of the appoint-
ment of the receiver in the case of a receiver-
ship, or the business day following such trans-
fer in the case of a conservatorship. 
‘‘(B) CERTAIN
RIGHTS
NOT
ENFORCE-
ABLE.— 
‘‘(i) RECEIVERSHIP.—A person who is 
a party to a qualified financial contract 
with a regulated entity may not exercise 
any right that such person has to termi-
nate, liquidate, or net such contract under 
paragraph (8)(A) of this subsection or sec-
tion 403 or 404 of the Federal Deposit In-
surance Corporation Improvement Act of 
1991, solely by reason of or incidental to 
the appointment of a receiver for the regu-
lated entity (or the insolvency or financial 
condition of the regulated entity for which 
the receiver has been appointed)— 
‘‘(I) until 5:00 p.m. (eastern 
time) on the business day following 
the date of the appointment of the re-
ceiver; or 
‘‘(II) after the person has re-
ceived notice that the contract has 
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341 
been transferred pursuant to para-
graph (9)(A). 
‘‘(ii) CONSERVATORSHIP.—A person 
who is a party to a qualified financial con-
tract with a regulated entity may not exer-
cise any right that such person has to ter-
minate, liquidate, or net such contract 
under paragraph (8)(E) of this subsection 
or section 403 or 404 of the Federal De-
posit Insurance Corporation Improvement 
Act of 1991, solely by reason of or inci-
dental to the appointment of a conservator 
for the regulated entity (or the insolvency 
or financial condition of the regulated enti-
ty for which the conservator has been ap-
pointed). 
‘‘(iii) NOTICE.—For purposes of this 
paragraph, the Agency as receiver or con-
servator of a regulated entity shall be 
deemed to have notified a person who is a 
party to a qualified financial contract with 
such regulated entity if the Agency has 
taken steps reasonably calculated to pro-
vide notice to such person by the time 
specified in subparagraph (A). 
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342 
‘‘(C) BUSINESS DAY DEFINED.—For pur-
poses of this paragraph, the term ‘business day’ 
means any day other than any Saturday, Sun-
day, or any day on which either the New York 
Stock Exchange or the Federal Reserve Bank 
of New York is closed. 
‘‘(11) DISAFFIRMANCE
OR
REPUDIATION
OF 
QUALIFIED
FINANCIAL
CONTRACTS.—In exercising 
the rights of disaffirmance or repudiation of a con-
servator or receiver with respect to any qualified fi-
nancial contract to which a regulated entity is a 
party, the conservator or receiver for such institution 
shall either— 
‘‘(A) disaffirm or repudiate all qualified fi-
nancial contracts between— 
‘‘(i) any person or any affiliate of 
such person; and 
‘‘(ii) the regulated entity in default; or 
‘‘(B) disaffirm or repudiate none of the 
qualified financial contracts referred to in sub-
paragraph (A) (with respect to such person or 
any affiliate of such person). 
‘‘(12) CERTAIN
SECURITY
INTERESTS
NOT 
AVOIDABLE.—No provision of this subsection shall 
be construed as permitting the avoidance of any le-
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343 
gally enforceable or perfected security interest in any 
of the assets of any regulated entity, except where 
such an interest is taken in contemplation of the in-
solvency of the regulated entity, or with the intent 
to hinder, delay, or defraud the regulated entity or 
the creditors of such regulated entity. 
‘‘(13) AUTHORITY TO ENFORCE CONTRACTS.— 
‘‘(A) IN GENERAL.—Notwithstanding any 
provision of a contract providing for termi-
nation, default, acceleration, or exercise of 
rights upon, or solely by reason of, insolvency 
or the appointment of a conservator or receiver, 
the conservator or receiver may enforce any 
contract or regulated entity bond entered into 
by the regulated entity. 
‘‘(B) CERTAIN RIGHTS NOT AFFECTED.— 
No provision of this paragraph may be con-
strued as impairing or affecting any right of the 
conservator or receiver to enforce or recover 
under a director’s or officer’s liability insurance 
contract or surety bond under other applicable 
law. 
‘‘(C) CONSENT REQUIREMENT.— 
‘‘(i) IN GENERAL.—Except as other-
wise provided under this section, no person 
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344 
may exercise any right or power to termi-
nate, accelerate, or declare a default under 
any contract to which a regulated entity is 
a party, or to obtain possession of or exer-
cise control over any property of the regu-
lated entity, or affect any contractual 
rights of the regulated entity, without the 
consent of the conservator or receiver, as 
appropriate, for a period of— 
‘‘(I) 45 days after the date of ap-
pointment of a conservator; or 
‘‘(II) 90 days after the date of 
appointment of a receiver. 
‘‘(ii) EXCEPTIONS.—This paragraph 
shall— 
‘‘(I) not apply to a director’s or 
officer’s liability insurance contract; 
‘‘(II) not apply to the rights of 
parties to any qualified financial con-
tracts under subsection (d)(8); and 
‘‘(III) not be construed as per-
mitting the conservator or receiver to 
fail to comply with otherwise enforce-
able provisions of such contracts. 
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345 
‘‘(14) SAVINGS
CLAUSE.—The meanings of 
terms used in this subsection are applicable for pur-
poses of this subsection only, and shall not be con-
strued or applied so as to challenge or affect the 
characterization, definition, or treatment of any 
similar terms under any other statute, regulation, or 
rule, including the Gramm-Leach-Bliley Act, the 
Legal Certainty for Bank Products Act of 2000, the 
securities laws (as that term is defined in section 
3(a)(47) of the Securities Exchange Act of 1934), 
and the Commodity Exchange Act. 
‘‘(15) EXCEPTION FOR FEDERAL RESERVE AND 
FEDERAL HOME LOAN BANKS.—No provision of this 
subsection shall apply with respect to— 
‘‘(A) any extension of credit from any Fed-
eral home loan bank or Federal Reserve Bank 
to any regulated entity; or 
‘‘(B) any security interest in the assets of 
the regulated entity securing any such extension 
of credit. 
‘‘(e) VALUATION OF CLAIMS IN DEFAULT.— 
‘‘(1) IN GENERAL.—Notwithstanding any other 
provision of Federal law or the law of any State, and 
regardless of the method which the Agency deter-
mines to utilize with respect to a regulated entity in 
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346 
default or in danger of default, including trans-
actions authorized under subsection (i), this sub-
section shall govern the rights of the creditors of 
such regulated entity. 
‘‘(2) MAXIMUM LIABILITY.—The maximum li-
ability of the Agency, acting as receiver or in any 
other capacity, to any person having a claim against 
the receiver or the regulated entity for which such 
receiver is appointed shall equal the lesser of— 
‘‘(A) the amount such claimant would have 
received if the Agency had liquidated the assets 
and liabilities of such regulated entity without 
exercising the authority of the Agency under 
subsection (i) of this section; or 
‘‘(B) the amount of proceeds realized from 
the performance of contracts or sale of the as-
sets of the regulated entity. 
‘‘(f) LIMITATION
ON COURT ACTION.—Except as 
provided in this section or at the request of the Director, 
no court may take any action to restrain or affect the exer-
cise of powers or functions of the Agency as a conservator 
or a receiver. 
‘‘(g) LIABILITY OF DIRECTORS AND OFFICERS.— 
‘‘(1) IN GENERAL.—A director or officer of a 
regulated entity may be held personally liable for 
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347 
monetary damages in any civil action by, on behalf 
of, or at the request or direction of the Agency, 
which action is prosecuted wholly or partially for the 
benefit of the Agency— 
‘‘(A) acting as conservator or receiver of 
such regulated entity, or 
‘‘(B) acting based upon a suit, claim, or 
cause of action purchased from, assigned by, or 
otherwise conveyed by such receiver or conser-
vator, 
for gross negligence, including any similar conduct 
or conduct that demonstrates a greater disregard of 
a duty of care (than gross negligence) including in-
tentional tortious conduct, as such terms are defined 
and determined under applicable State law. 
‘‘(2) NO LIMITATION.—Nothing in this para-
graph shall impair or affect any right of the Agency 
under other applicable law. 
‘‘(h) DAMAGES.—In any proceeding related to any 
claim against a director, officer, employee, agent, attorney, 
accountant, appraiser, or any other party employed by or 
providing services to a regulated entity, recoverable dam-
ages determined to result from the improvident or other-
wise improper use or investment of any assets of the regu-
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348 
lated entity shall include principal losses and appropriate 
interest. 
‘‘(i) LIMITED-LIFE REGULATED ENTITIES.— 
‘‘(1) ORGANIZATION.— 
‘‘(A) PURPOSE.—If a regulated entity is in 
default, or if the Agency anticipates that a reg-
ulated entity will default, the Agency may orga-
nize a limited-life regulated entity with those 
powers and attributes of the regulated entity in 
default or in danger of default that the Director 
determines necessary, subject to the provisions 
of this subsection. The Director shall grant a 
temporary charter to the limited-life regulated 
entity, and the limited-life regulated entity shall 
operate subject to that charter. 
‘‘(B) AUTHORITIES.—Upon the creation of 
a limited-life regulated entity under subpara-
graph (A), the limited-life regulated entity 
may— 
‘‘(i) assume such liabilities of the reg-
ulated entity that is in default or in danger 
of default as the Agency may, in its discre-
tion, determine to be appropriate, provided 
that the liabilities assumed shall not exceed 
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349 
the amount of assets of the limited-life reg-
ulated entity; 
‘‘(ii) purchase such assets of the regu-
lated entity that is in default, or in danger 
of default, as the Agency may, in its dis-
cretion, determine to be appropriate; and 
‘‘(iii) perform any other temporary 
function which the Agency may, in its dis-
cretion, prescribe in accordance with this 
section. 
‘‘(2) CHARTER.— 
‘‘(A) 
CONDITIONS.—The 
Agency 
may 
grant a temporary charter if the Agency deter-
mines that the continued operation of the regu-
lated entity in default or in danger of default 
is in the best interest of the national economy 
and the housing markets. 
‘‘(B) TREATMENT AS BEING IN DEFAULT 
FOR CERTAIN PURPOSES.—A limited-life regu-
lated entity shall be treated as a regulated enti-
ty in default at such times and for such pur-
poses as the Agency may, in its discretion, de-
termine. 
‘‘(C) MANAGEMENT.—A limited-life regu-
lated entity, upon the granting of its charter, 
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350 
shall be under the management of a board of 
directors consisting of not fewer than 5 nor 
more than 10 members appointed by the Agen-
cy. 
‘‘(D) BYLAWS.—The board of directors of 
a limited-life regulated entity shall adopt such 
bylaws as may be approved by the Agency. 
‘‘(3) CAPITAL STOCK.—No capital stock need 
be paid into a limited-life regulated entity by the 
Agency. 
‘‘(4) INVESTMENTS.—Funds of a limited-life 
regulated entity shall be kept on hand in cash, in-
vested in obligations of the United States or obliga-
tions guaranteed as to principal and interest by the 
United States, or deposited with the Agency, or any 
Federal Reserve bank. 
‘‘(5) EXEMPT
STATUS.—Notwithstanding any 
other provision of Federal or State law, the limited- 
life regulated entity, its franchise, property, and in-
come shall be exempt from all taxation now or here-
after imposed by the United States, by any territory, 
dependency, or possession thereof, or by any State, 
county, municipality, or local taxing authority. 
‘‘(6) WINDING UP.— 
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‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), unless Congress authorizes the sale 
of the capital stock of the limited-life regulated 
entity, not later than 2 years after the date of 
its organization, the Agency shall wind up the 
affairs of the limited-life regulated entity. 
‘‘(B) EXTENSION.—The Director may, in 
the discretion of the Director, extend the status 
of the limited-life regulated entity for 3 addi-
tional 1-year periods. 
‘‘(7) TRANSFER OF ASSETS AND LIABILITIES.— 
‘‘(A) IN GENERAL.— 
‘‘(i) TRANSFER OF ASSETS AND LI-
ABILITIES.—The Agency, as receiver, may 
transfer any assets and liabilities of a reg-
ulated entity in default, or in danger of de-
fault, to the limited-life regulated entity in 
accordance with paragraph (1). 
‘‘(ii) SUBSEQUENT
TRANSFERS.—At 
any time after a charter is transferred to 
a limited-life regulated entity, the Agency, 
as receiver, may transfer any assets and li-
abilities of such regulated entity in default, 
or in danger in default, as the Agency 
may, in its discretion, determine to be ap-
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propriate in accordance with paragraph 
(1). 
‘‘(iii) 
EFFECTIVE
WITHOUT
AP-
PROVAL.—The transfer of any assets or li-
abilities of a regulated entity in default, or 
in danger of default, transferred to a lim-
ited-life regulated entity shall be effective 
without any further approval under Fed-
eral or State law, assignment, or consent 
with respect thereto. 
‘‘(8) PROCEEDS.—To the extent that available 
proceeds from the limited-life regulated entity exceed 
amounts required to pay obligations, such proceeds 
may be paid to the regulated entity in default, or in 
danger of default. 
‘‘(9) POWERS.— 
‘‘(A) IN GENERAL.—Each limited-life regu-
lated entity created under this subsection shall 
have all corporate powers of, and be subject to 
the same provisions of law as, the regulated en-
tity in default or in danger of default to which 
it relates, except that— 
‘‘(i) the Agency may— 
‘‘(I) remove the directors of a 
limited-life regulated entity; and 
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‘‘(II) fix the compensation of 
members of the board of directors and 
senior management, as determined by 
the Agency in its discretion, of a lim-
ited-life regulated entity; 
‘‘(ii) the Agency may indemnify the 
representatives for purposes of paragraph 
(1)(B), and the directors, officers, employ-
ees, and agents of a limited-life regulated 
entity on such terms as the Agency deter-
mines to be appropriate; and 
‘‘(iii) the board of directors of a lim-
ited-life regulated entity— 
‘‘(I) shall elect a chairperson who 
may also serve in the position of chief 
executive officer, except that such per-
son shall not serve either as chair-
person or as chief executive officer 
without the prior approval of the 
Agency; and 
‘‘(II) may appoint a chief execu-
tive officer who is not also the chair-
person, except that such person shall 
not serve as chief executive officer 
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354 
without the prior approval of the 
Agency. 
‘‘(B) STAY OF JUDICIAL ACTION.—Any ju-
dicial action to which a limited-life regulated 
entity becomes a party by virtue of its acquisi-
tion of any assets or assumption of any liabil-
ities of a regulated entity in default shall be 
stayed from further proceedings for a period of 
up to 45 days at the request of the limited-life 
regulated entity. Such period may be modified 
upon the consent of all parties. 
‘‘(10) OBTAINING OF CREDIT AND INCURRING 
OF DEBT.— 
‘‘(A) IN GENERAL.—The limited-life regu-
lated entity may obtain unsecured credit and 
incur unsecured debt in the ordinary course of 
business. 
‘‘(B) INABILITY
TO
OBTAIN
CREDIT.—If 
the limited-life regulated entity is unable to ob-
tain unsecured credit the Director may author-
ize the obtaining of credit or the incurring of 
debt— 
‘‘(i) with priority over any or all ad-
ministrative expenses; 
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‘‘(ii) secured by a lien on property 
that is not otherwise subject to a lien; or 
‘‘(iii) secured by a junior lien on prop-
erty that is subject to a lien. 
‘‘(C) LIMITATIONS.— 
‘‘(i) IN
GENERAL.—The Director, 
after notice and a hearing, may authorize 
the obtaining of credit or the incurring of 
debt secured by a senior or equal lien on 
property that is subject to a lien (other 
than mortgages that collateralize the mort-
gage-backed securities issued or guaran-
teed by the regulated entity) only if— 
‘‘(I) the limited-life regulated en-
tity is unable to obtain such credit 
otherwise; and 
‘‘(II) there is adequate protection 
of the interest of the holder of the lien 
on the property which such senior or 
equal lien is proposed to be granted. 
‘‘(ii) BURDEN
OF
PROOF.—In any 
hearing under this subsection, the Director 
has the burden of proof on the issue of 
adequate protection. 
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356 
‘‘(D) EFFECT ON DEBTS AND LIENS.—The 
reversal or modification on appeal of an author-
ization under this paragraph to obtain credit or 
incur debt, or of a grant under this section of 
a priority or a lien, does not affect the validity 
of any debt so incurred, or any priority or lien 
so granted, to an entity that extended such 
credit in good faith, whether or not such entity 
knew of the pendency of the appeal, unless such 
authorization and the incurring of such debt, or 
the granting of such priority or lien, were 
stayed pending appeal. 
‘‘(11) ISSUANCE OF PREFERRED DEBT.—A lim-
ited-life regulated entity may, subject to the ap-
proval of the Director and subject to such terms and 
conditions as the Director may prescribe, issue 
notes, bonds, or other debt obligations of a class to 
which all other debt obligations of the limited-life 
regulated entity shall be subordinate in right and 
payment. 
‘‘(12) NO FEDERAL STATUS.— 
‘‘(A) AGENCY STATUS.—A limited-life reg-
ulated entity is not an agency, establishment, or 
instrumentality of the United States. 
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357 
‘‘(B) 
EMPLOYEE
STATUS.—Representa-
tives for purposes of paragraph (1)(B), interim 
directors, directors, officers, employees, or 
agents of a limited-life regulated entity are not, 
solely by virtue of service in any such capacity, 
officers or employees of the United States. Any 
employee of the Agency or of any Federal in-
strumentality who serves at the request of the 
Agency as a representative for purposes of 
paragraph (1)(B), interim director, director, of-
ficer, employee, or agent of a limited-life regu-
lated entity shall not— 
‘‘(i) solely by virtue of service in any 
such capacity lose any existing status as 
an officer or employee of the United States 
for purposes of title 5, United States Code, 
or any other provision of law; or 
‘‘(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. 
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358 
‘‘(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-
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 
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359 
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.’’. 
(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. 
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360 
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 to read as follows: 
‘‘SEC. 25. SUCCESSION OF FEDERAL HOME LOAN BANKS. 
‘‘Each Federal Home Loan Bank shall have succes-
sion until it is voluntarily merged with another Bank 
under this Act, or until it is merged, reorganized, rehabili-
tated, liquidated, or otherwise wound up by the Director 
in accordance with the provisions of section 1367 of the 
Housing and Community Development Act of 1992, or by 
further Act of Congress.’’. 
SEC. 1049. CONFORMING AMENDMENTS. 
Title XIII of the Housing and Community Develop-
ment Act of 1992, as amended by the preceding provisions 
of this title, 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 amended by section 1048 
of this title— 
(A) by striking ‘‘An enterprise’’ each place 
such term appears and inserting ‘‘A regulated 
entity’’; 
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361 
(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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(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)’’. 
CHAPTER 4—ENFORCEMENT ACTIONS 
SEC. 1051. 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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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 of this title, with subsection (m) or (n) 
of section 309 of the Federal National Mortgage Associa-
tion Charter Act (12 U.S.C. 1723a(m), (n)), with sub-
section (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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365 
‘‘(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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366 
(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. 1053. 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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367 
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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368 
SEC. 1054. 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. 1055. 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 direc-
tor’’ and inserting ‘‘or any regulated-entity af-
filiated party’’; and 
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369 
(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 
Director may not, pursuant to this section, en-
force compliance with any housing goal estab-
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lished under subpart B of part 2 of subtitle A 
of this title, with section 1336 of this title, with 
subsection (m) or (n) of section 309 of the Fed-
eral National Mortgage 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) 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)— 
‘‘(A) if a regulated entity, or a regulated 
entity-affiliated party— 
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‘‘(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— 
‘‘(i) commits any violation or engages 
in any conduct described in any subpara-
graph of paragraph (1); 
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