I 
110TH CONGRESS 
2D SESSION 
H. R. 6521 
To reform the regulation of certain housing-related Government-sponsored 
enterprises. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 16, 2008 
Mr. GARRETT of New Jersey (for himself, Mr. MCHENRY, Mr. MCCOTTER, 
Mr. PRICE of Georgia, Mr. ROYCE, Mr. HENSARLING, Mr. BACHUS, Mr. 
FEENEY, Mr. BARRETT of South Carolina, Mrs. BACHMANN, Mr. LUCAS, 
and Mr. JONES of North Carolina) introduced the following bill; which 
was referred to the Committee on Financial Services, and in addition to 
the Committee on Ways and Means, for a period to be subsequently de-
termined by the Speaker, in each case for consideration of such provisions 
as fall within the jurisdiction of the committee concerned 
A BILL 
To reform the regulation of certain housing-related 
Government-sponsored enterprises. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Federal Housing Finance Regulatory Reform Act of 
2008’’. 
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(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title and table of contents. 
Sec. 2. Definitions. 
TITLE I—REFORM OF REGULATION OF ENTERPRISES 
Subtitle A—Improvement of Safety and Soundness Supervision 
Sec. 101. Establishment of the Federal Housing Finance Agency. 
Sec. 102. Duties and authorities of the Director. 
Sec. 103. Federal Housing Finance Oversight Board. 
Sec. 104. Authority to require reports by regulated entities. 
Sec. 105. Examiners and accountants; authority to contract for reviews of regu-
lated entities; ombudsman. 
Sec. 106. Assessments. 
Sec. 107. Regulations and orders. 
Sec. 108. Prudential management and operations standards. 
Sec. 109. Review of and authority over enterprise assets and liabilities. 
Sec. 110. Risk-based capital requirements. 
Sec. 111. Minimum capital levels. 
Sec. 112. Registration under the securities laws. 
Sec. 113. Prohibition and withholding of executive compensation. 
Sec. 114. Limit on golden parachutes. 
Sec. 115. Reporting of fraudulent loans. 
Subtitle B—Improvement of Mission Supervision 
Sec. 121. Transfer of program approval and housing goal oversight. 
Sec. 122. Assumption by the Director of certain other HUD responsibilities. 
Sec. 123. Review of enterprise products. 
Sec. 124. Conforming loan limits. 
Sec. 125. Annual housing report. 
Sec. 126. Public use database. 
Sec. 127. Reporting of mortgage data. 
Sec. 128. Revision of housing goals. 
Sec. 129. Duty to serve underserved markets. 
Sec. 130. Monitoring and enforcing compliance with housing goals. 
Sec. 131. Transfer and rights of certain HUD employees. 
Subtitle C—Prompt Corrective Action 
Sec. 141. Critical capital levels. 
Sec. 142. Capital classifications. 
Sec. 143. Supervisory actions applicable to undercapitalized regulated entities. 
Sec. 144. Supervisory actions applicable to significantly undercapitalized regu-
lated entities. 
Sec. 145. Authority over critically undercapitalized regulated entities. 
Subtitle D—Enforcement Actions 
Sec. 151. Cease and desist proceedings. 
Sec. 152. Temporary cease and desist proceedings. 
Sec. 153. Removal and prohibition authority. 
Sec. 154. Enforcement and jurisdiction. 
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Sec. 155. Civil money penalties. 
Sec. 156. Criminal penalty. 
Sec. 157. Notice after separation from service. 
Sec. 158. Subpoena authority. 
Subtitle E—General Provisions 
Sec. 161. Conforming and technical amendments. 
Sec. 162. Presidentially-appointed directors of enterprises. 
Sec. 163. Effective date. 
TITLE II—FEDERAL HOME LOAN BANKS 
Sec. 201. Recognition of distinctions between the enterprises and the Federal 
Home Loan Banks. 
Sec. 202. Directors. 
Sec. 203. Definitions. 
Sec. 204. Agency oversight of Federal Home Loan Banks. 
Sec. 205. Housing goals. 
Sec. 206. Community development financial institutions. 
Sec. 207. Sharing of information among Federal Home Loan Banks. 
Sec. 208. Exclusion from certain requirements. 
Sec. 209. Voluntary mergers. 
Sec. 210. Authority to reduce districts. 
Sec. 211. Community financial institution members. 
Sec. 212. Public use data base; reports to Congress. 
Sec. 213. Semiannual reports. 
Sec. 214. Liquidation or reorganization of a Federal Home Loan Bank. 
Sec. 215. Study and report to Congress on securitization of acquired member 
assets. 
Sec. 216. Technical and conforming amendments. 
Sec. 217. Study on Federal Home Loan Bank advances. 
Sec. 218. Federal Home Loan Bank refinancing authority for certain residen-
tial mortgage loans. 
TITLE III—TRANSFER OF FUNCTIONS, PERSONNEL, AND PROP-
ERTY OF OFHEO AND THE FEDERAL HOUSING FINANCE 
BOARD 
Subtitle A—OFHEO 
Sec. 301. Abolishment of OFHEO. 
Sec. 302. Continuation and coordination of certain actions. 
Sec. 303. Transfer and rights of employees of OFHEO. 
Sec. 304. Transfer of property and facilities. 
Subtitle B—Federal Housing Finance Board 
Sec. 311. Abolishment of the Federal Housing Finance Board. 
Sec. 312. Continuation and coordination of certain actions. 
Sec. 313. Transfer and rights of employees of the Federal Housing Finance 
Board. 
Sec. 314. Transfer of property and facilities. 
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SEC. 2. DEFINITIONS. 
(a) FEDERAL SAFETY AND SOUNDNESS ACT DEFINI-
TIONS.—Section 1303 of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 
4502) is amended— 
(1) in each of paragraphs (8), (9), (10), and 
(19), by striking ‘‘Secretary’’ each place that term 
appears and inserting ‘‘Director’’; 
(2) by redesignating paragraphs (16) through 
(19) as paragraphs (21) through (24), respectively; 
(3) by striking paragraphs (13) through (15) 
and inserting the following: 
‘‘(19) OFFICE OF FINANCE.—The term ‘Office 
of Finance’ means the Office of Finance of the Fed-
eral Home Loan Bank System (or any successor 
thereto). 
‘‘(20) REGULATED ENTITY.—The term ‘regu-
lated entity’ means— 
‘‘(A) the Federal National Mortgage Asso-
ciation and any affiliate thereof; 
‘‘(B) the Federal Home Loan Mortgage 
Corporation and any affiliate thereof; and 
‘‘(C) any Federal Home Loan Bank.’’; 
(4) by redesignating paragraphs (11) and (12) 
as paragraphs (17) and (18), respectively; 
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‘‘(B) IN DANGER OF DEFAULT.—The term 
‘in danger of default’ means a regulated entity 
with respect to which, in the opinion of the 
Agency— 
‘‘(i) the regulated entity is not likely 
to be able to pay the obligations of the reg-
ulated entity in the normal course of busi-
ness; or 
‘‘(ii) the regulated entity— 
‘‘(I) has incurred or is likely to 
incur losses that will deplete all or 
substantially all of its capital; and 
‘‘(II) there is no reasonable pros-
pect that the capital of the regulated 
entity will be replenished.’’; 
(11) by inserting after paragraph (1) the fol-
lowing: 
‘‘(2) AGENCY.—The term ‘Agency’ means the 
Federal Housing Finance Agency established under 
section 1311. 
‘‘(3) AUTHORIZING STATUTES.—The term ‘au-
thorizing statutes’ means— 
‘‘(A) the Federal National Mortgage Asso-
ciation Charter Act; 
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‘‘(B) the Federal Home Loan Mortgage 
Corporation Act; and 
‘‘(C) the Federal Home Loan Bank Act. 
‘‘(4) BOARD.—The term ‘Board’ means the 
Federal Housing Finance Oversight Board estab-
lished under section 1313A.’’; 
(12) by inserting after paragraph (10), as re-
designated by this section, the following: 
‘‘(11) ENTITY-AFFILIATED PARTY.—The term 
‘entity-affiliated party’ means— 
‘‘(A) any director, officer, employee, or 
controlling stockholder of, or agent for, a regu-
lated entity; 
‘‘(B) any shareholder, affiliate, consultant, 
or joint venture partner of a regulated entity, 
and any other person, as determined by the Di-
rector (by regulation or on a case-by-case basis) 
that participates in the conduct of the affairs of 
a regulated entity, provided that a member of 
a Federal Home Loan Bank shall not be 
deemed to have participated in the affairs of 
that Bank solely by virtue of being a share-
holder of, and obtaining advances from, that 
Bank; 
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‘‘(C) any independent contractor for a reg-
ulated entity (including any attorney, appraiser, 
or accountant), if— 
‘‘(i) the independent contractor know-
ingly or recklessly participates in— 
‘‘(I) any violation of any law or 
regulation; 
‘‘(II) any breach of fiduciary 
duty; or 
‘‘(III) any unsafe or unsound 
practice; and 
‘‘(ii) such violation, breach, or prac-
tice caused, or is likely to cause, more than 
a minimal financial loss to, or a significant 
adverse effect on, the regulated entity; 
‘‘(D) any not-for-profit corporation that re-
ceives its principal funding, on an ongoing 
basis, from any regulated entity; and 
‘‘(E) the Office of Finance.’’; 
(13) by inserting after paragraph (12), as re-
designated by this section, the following: 
‘‘(13) LIMITED-LIFE
REGULATED
ENTITY.— 
The term ‘limited-life regulated entity’ means an en-
tity established by the Agency under section 1367(i) 
with respect to a Federal Home Loan Bank in de-
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fault or in danger of default or with respect to an 
enterprise in default or in danger of default.’’; and 
(14) by adding at the end the following: 
‘‘(25) VIOLATION.—The term ‘violation’ in-
cludes any action (alone or in combination with an-
other or others) for or toward causing, bringing 
about, participating in, counseling, or aiding or abet-
ting a violation.’’. 
(b) REFERENCES IN THIS ACT.—As used in this Act, 
unless otherwise specified— 
(1) the term ‘‘Agency’’ means the Federal 
Housing Finance Agency; 
(2) the term ‘‘Director’’ means the Director of 
the Agency; and 
(3) the terms ‘‘enterprise’’, ‘‘regulated entity’’, 
and ‘‘authorizing statutes’’ have the same meanings 
as in section 1303 of the Federal Housing Enter-
prises Financial Safety and Soundness Act of 1992, 
as amended by this Act. 
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TITLE I—REFORM OF 
REGULATION OF ENTERPRISES 
Subtitle A—Improvement of Safety 
and Soundness Supervision 
SEC. 101. ESTABLISHMENT OF THE FEDERAL HOUSING FI-
NANCE AGENCY. 
The Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is 
amended by striking sections 1311 and 1312 and inserting 
the following: 
‘‘SEC. 1311. ESTABLISHMENT OF THE FEDERAL HOUSING 
FINANCE AGENCY. 
‘‘(a) ESTABLISHMENT.—There is established the 
Federal Housing Finance Agency, which shall be an inde-
pendent agency of the Federal Government. 
‘‘(b) GENERAL SUPERVISORY AND REGULATORY AU-
THORITY.— 
‘‘(1) IN GENERAL.—Each regulated entity shall, 
to the extent provided in this title, be subject to the 
supervision and regulation of the Agency. 
‘‘(2) AUTHORITY OVER FANNIE MAE, FREDDIE 
MAC, THE FEDERAL HOME LOAN BANKS, AND THE 
OFFICE OF FINANCE.—The Director shall have gen-
eral regulatory authority over each regulated entity 
and the Office of Finance, and shall exercise such 
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general regulatory authority, including such duties 
and authorities set forth under section 1313, to en-
sure that the purposes of this Act, the authorizing 
statutes, and any other applicable law are carried 
out. 
‘‘(c) SAVINGS PROVISION.—The authority of the Di-
rector to take actions under subtitles B and C shall not 
in any way limit the general supervisory and regulatory 
authority granted to the Director under subsection (b). 
‘‘SEC. 1312. DIRECTOR. 
‘‘(a) ESTABLISHMENT OF POSITION.—There is estab-
lished the position of the Director of the Agency, who shall 
be the head of the Agency. 
‘‘(b) APPOINTMENT; TERM.— 
‘‘(1) APPOINTMENT.—The Director shall be ap-
pointed by the President, by and with the advice and 
consent of the Senate, from among individuals who 
are citizens of the United States, have a dem-
onstrated understanding of financial management or 
oversight, and have a demonstrated understanding 
of capital markets, including the mortgage securities 
markets and housing finance. 
‘‘(2) TERM.—The Director shall be appointed 
for a term of 5 years, unless removed before the end 
of such term for cause by the President. 
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‘‘(3) VACANCY.—A vacancy in the position of 
Director that occurs before the expiration of the 
term for which a Director was appointed shall be 
filled in the manner established under paragraph 
(1), and the Director appointed to fill such vacancy 
shall be appointed only for the remainder of such 
term. 
‘‘(4) SERVICE AFTER END OF TERM.—An indi-
vidual may serve as the Director after the expiration 
of the term for which appointed until a successor 
has been appointed. 
‘‘(5) 
TRANSITIONAL
PROVISION.—Notwith-
standing paragraphs (1) and (2), during the period 
beginning on the effective date of the Federal Hous-
ing Finance Regulatory Reform Act of 2008, and 
ending on the date on which the Director is ap-
pointed and confirmed, the person serving as the Di-
rector of the Office of Federal Housing Enterprise 
Oversight of the Department of Housing and Urban 
Development on that effective date shall act for all 
purposes as, and with the full powers of, the Direc-
tor. 
‘‘(c) DEPUTY DIRECTOR OF THE DIVISION OF EN-
TERPRISE REGULATION.— 
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‘‘(1) IN GENERAL.—The Agency shall have a 
Deputy Director of the Division of Enterprise Regu-
lation, who shall be designated by the Director from 
among individuals who are citizens of the United 
States, have a demonstrated understanding of finan-
cial management or oversight, and have a dem-
onstrated understanding of mortgage securities mar-
kets and housing finance. 
‘‘(2) FUNCTIONS.—The Deputy Director of the 
Division of Enterprise Regulation shall have such 
functions, powers, and duties with respect to the 
oversight of the enterprises as the Director shall pre-
scribe. 
‘‘(d) DEPUTY DIRECTOR OF THE DIVISION OF FED-
ERAL HOME LOAN BANK REGULATION.— 
‘‘(1) IN GENERAL.—The Agency shall have a 
Deputy Director of the Division of Federal Home 
Loan Bank Regulation, who shall be designated by 
the Director from among individuals who are citi-
zens of the United States, have a demonstrated un-
derstanding of financial management or oversight, 
and have a demonstrated understanding of the Fed-
eral Home Loan Bank System and housing finance. 
‘‘(2) FUNCTIONS.—The Deputy Director of the 
Division of Federal Home Loan Bank Regulation 
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shall have such functions, powers, and duties with 
respect to the oversight of the Federal Home Loan 
Banks as the Director shall prescribe. 
‘‘(e) DEPUTY DIRECTOR FOR HOUSING MISSION AND 
GOALS.— 
‘‘(1) IN GENERAL.—The Agency shall have a 
Deputy Director for Housing Mission and Goals, 
who shall be designated by the Director from among 
individuals who are citizens of the United States, 
and have a demonstrated understanding of the hous-
ing markets and housing finance. 
‘‘(2) FUNCTIONS.—The Deputy Director for 
Housing Mission and Goals shall have such func-
tions, powers, and duties with respect to the over-
sight of the housing mission and goals of the enter-
prises, and with respect to oversight of the housing 
finance and community and economic development 
mission of the Federal Home Loan Banks, as the 
Director shall prescribe. 
‘‘(3) CONSIDERATIONS.—In exercising such 
functions, powers, and duties, the Deputy Director 
for Housing Mission and Goals shall consider the 
differences between the enterprises and the Federal 
Home Loan Banks, including those described in sec-
tion 1313(f). 
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‘‘(f) ACTING DIRECTOR.—In the event of the death, 
resignation, sickness, or absence of the Director, the 
President shall designate either the Deputy Director of the 
Division of Enterprise Regulation, the Deputy Director of 
the Division of Federal Home Loan Bank Regulation, or 
the Deputy Director for Housing Mission and Goals, to 
serve as acting Director until the return of the Director, 
or the appointment of a successor pursuant to subsection 
(b). 
‘‘(g) LIMITATIONS.—The Director and each of the 
Deputy Directors may not— 
‘‘(1) have any direct or indirect financial inter-
est in any regulated entity or entity-affiliated party; 
‘‘(2) hold any office, position, or employment in 
any regulated entity or entity-affiliated party; or 
‘‘(3) have served as an executive officer or di-
rector of any regulated entity or entity-affiliated 
party at any time during the 3-year period preceding 
the date of appointment or designation of such indi-
vidual as Director or Deputy Director, as applica-
ble.’’. 
SEC. 102. DUTIES AND AUTHORITIES OF THE DIRECTOR. 
(a) IN GENERAL.—Section 1313 of the Federal 
Housing Enterprises Financial Safety and Soundness Act 
of 1992 (12 U.S.C. 4513) is amended to read as follows: 
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‘‘SEC. 1313. DUTIES AND AUTHORITIES OF DIRECTOR. 
‘‘(a) DUTIES.— 
‘‘(1) PRINCIPAL DUTIES.—The principal duties 
of the Director shall be— 
‘‘(A) to oversee the prudential operations 
of each regulated entity; and 
‘‘(B) to ensure that— 
‘‘(i) each regulated entity operates in 
a safe and sound manner, including main-
tenance of adequate capital and internal 
controls; 
‘‘(ii) the operations and activities of 
each regulated entity foster liquid, effi-
cient, competitive, and resilient national 
housing finance markets (including activi-
ties relating to mortgages on housing for 
low- and moderate-income families involv-
ing a reasonable economic return that may 
be less than the return earned on other ac-
tivities); 
‘‘(iii) each regulated entity complies 
with this title and the rules, regulations, 
guidelines, and orders issued under this 
title and the authorizing statutes; 
‘‘(iv) each regulated entity carries out 
its statutory mission only through activi-
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ties that are authorized under and con-
sistent with this title and the authorizing 
statutes; and 
‘‘(v) the activities of each regulated 
entity and the manner in which such regu-
lated entity is operated are consistent with 
the public interest. 
‘‘(2) SCOPE OF AUTHORITY.—The authority of 
the Director shall include the authority— 
‘‘(A) to review and, if warranted based on 
the principal duties described in paragraph (1), 
reject any acquisition or transfer of a control-
ling interest in a regulated entity; and 
‘‘(B) to exercise such incidental powers as 
may be necessary or appropriate to fulfill the 
duties and responsibilities of the Director in the 
supervision and regulation of each regulated en-
tity. 
‘‘(b) DELEGATION
OF AUTHORITY.—The Director 
may delegate to officers and employees of the Agency any 
of the functions, powers, or duties of the Director, as the 
Director considers appropriate. 
‘‘(c) LITIGATION AUTHORITY.— 
‘‘(1) IN GENERAL.—In enforcing any provision 
of this title, any regulation or order prescribed under 
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this title, or any other provision of law, rule, regula-
tion, or order, or in any other action, suit, or pro-
ceeding to which the Director is a party or in which 
the Director is interested, and in the administration 
of conservatorships and receiverships, the Director 
may act in the Director’s own name and through the 
Director’s own attorneys. 
‘‘(2) SUBJECT TO SUIT.—Except as otherwise 
provided by law, the Director shall be subject to suit 
(other than suits on claims for money damages) by 
a regulated entity with respect to any matter under 
this title or any other applicable provision of law, 
rule, order, or regulation under this title, in the 
United States district court for the judicial district 
in which the regulated entity has its principal place 
of business, or in the United States District Court 
for the District of Columbia, and the Director may 
be served with process in the manner prescribed by 
the Federal Rules of Civil Procedure.’’. 
(b) INDEPENDENCE IN CONGRESSIONAL TESTIMONY 
AND RECOMMENDATIONS.—Section 111 of Public Law 
93–495 (12 U.S.C. 250) is amended by striking ‘‘the Fed-
eral Housing Finance Board’’ and inserting ‘‘the Director 
of the Federal Housing Finance Agency’’. 
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SEC. 103. FEDERAL HOUSING FINANCE OVERSIGHT BOARD. 
(a) IN GENERAL.—The Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 
4501 et seq.) is amended by inserting after section 1313 
the following: 
‘‘SEC. 1313A. FEDERAL HOUSING FINANCE OVERSIGHT 
BOARD. 
‘‘(a) IN GENERAL.—There is established the Federal 
Housing Finance Oversight Board, which shall advise the 
Director with respect to overall strategies and policies in 
carrying out the duties of the Director under this title. 
‘‘(b) LIMITATIONS.—The Board may not exercise any 
executive authority, and the Director may not delegate to 
the Board any of the functions, powers, or duties of the 
Director. 
‘‘(c) COMPOSITION.—The Board shall be comprised 
of 4 members, of whom— 
‘‘(1) 1 member shall be the Secretary of the 
Treasury; 
‘‘(2) 1 member shall be the Secretary of Hous-
ing and Urban Development; 
‘‘(3) 1 member shall be the Chairman of the 
Securities and Exchange Commission; and 
‘‘(4) 1 member shall be the Director, who shall 
serve as the Chairperson of the Board. 
‘‘(d) MEETINGS.— 
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‘‘(1) IN GENERAL.—The Board shall meet upon 
notice by the Director, but in no event shall the 
Board meet less frequently than once every 3 
months. 
‘‘(2) SPECIAL MEETINGS.—Either the Secretary 
of the Treasury, the Secretary of Housing and 
Urban Development, or the Chairman of the Securi-
ties and Exchange Commission may, upon giving 
written notice to the Director, require a special 
meeting of the Board. 
‘‘(e) TESTIMONY.—On an annual basis, the Board 
shall testify before Congress regarding— 
‘‘(1) the safety and soundness of the regulated 
entities; 
‘‘(2) any material deficiencies in the conduct of 
the operations of the regulated entities; 
‘‘(3) the overall operational status of the regu-
lated entities; 
‘‘(4) an evaluation of the performance of the 
regulated entities in carrying out their respective 
missions; 
‘‘(5) operations, resources, and performance of 
the Agency; and 
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‘‘(6) such other matters relating to the Agency 
and its fulfillment of its mission, as the Board deter-
mines appropriate.’’. 
(b) ANNUAL REPORT OF THE DIRECTOR.—Section 
1319B(a) of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (12 U.S.C. 4521(a)) 
is amended— 
(1) by striking ‘‘enterprise’’ each place that 
term appears and inserting ‘‘regulated entity’’; 
(2) by striking ‘‘enterprises’’ each place that 
term appears and inserting ‘‘regulated entities’’; 
(3) in paragraph (3), by striking ‘‘; and’’ and 
inserting a semicolon; 
(4) in paragraph (4), by striking ‘‘1994.’’ and 
inserting ‘‘1994; and’’; and 
(5) by adding at the end the following: 
‘‘(5) the assessment of the Board or any of its 
members with respect to— 
‘‘(A) the safety and soundness of the regu-
lated entities; 
‘‘(B) any material deficiencies in the con-
duct of the operations of the regulated entities; 
‘‘(C) the overall operational status of the 
regulated entities; and 
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‘‘(D) an evaluation of the performance of 
the regulated entities in carrying out their re-
spective missions; 
‘‘(6) operations, resources, and performance of 
the Agency; and 
‘‘(7) such other matters relating to the Agency 
and the fulfillment of its mission.’’. 
SEC. 104. AUTHORITY TO REQUIRE REPORTS BY REGU-
LATED ENTITIES. 
(a) IN GENERAL.—Section 1314 of the Federal 
Housing Enterprises Financial Safety and Soundness Act 
of 1992 (12 U.S.C. 4514) is amended— 
(1) in the section heading, by striking ‘‘ENTER-
PRISES’’ and inserting ‘‘REGULATED ENTITIES’’; 
(2) by striking ‘‘an enterprise’’ each place that 
term appears and inserting ‘‘a regulated entity’’; 
(3) by striking ‘‘the enterprise’’ and inserting 
‘‘the regulated entity’’; 
(4) in subsection (a)— 
(A) by striking the subsection heading and 
all that follows through ‘‘and operations’’ in 
paragraph (1) and inserting the following: 
‘‘(a) REGULAR AND SPECIAL REPORTS.— 
‘‘(1) REGULAR
REPORTS.—The Director may 
require, by general or specific orders, a regulated en-
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tity to submit regular reports, including financial 
statements determined on a fair value basis, on the 
condition (including financial condition), manage-
ment, activities, or operations of the regulated enti-
ty, as the Director considers appropriate’’; and 
(B) in paragraph (2)— 
(i) by inserting ‘‘, by general or spe-
cific orders,’’ after ‘‘may also require’’; and 
(ii) by striking ‘‘whenever’’ and insert-
ing ‘‘on any of the topics specified in para-
graph (1) or any other relevant topics, if’’; 
and 
(5) by adding at the end the following: 
‘‘(c) PENALTIES
FOR
FAILURE
TO
MAKE
RE-
PORTS.— 
‘‘(1) VIOLATIONS.—It shall be a violation of 
this section for any regulated entity— 
‘‘(A) to fail to make, transmit, or publish 
any report or obtain any information required 
by the Director under this section, section 
309(k) of the Federal National Mortgage Asso-
ciation Charter Act, section 307(c) of the Fed-
eral Home Loan Mortgage Corporation Act, or 
section 20 of the Federal Home Loan Bank 
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Act, within the period of time specified in such 
provision of law or otherwise by the Director; or 
‘‘(B) to submit or publish any false or mis-
leading report or information under this sec-
tion. 
‘‘(2) PENALTIES.— 
‘‘(A) FIRST TIER.— 
‘‘(i) IN
GENERAL.—A violation de-
scribed in paragraph (1) shall be subject to 
a penalty of not more than $2,000 for each 
day during which such violation continues, 
in any case in which— 
‘‘(I) the subject regulated entity 
maintains 
procedures 
reasonably 
adapted to avoid any inadvertent error 
and the violation was unintentional 
and a result of such an error; or 
‘‘(II) the violation was an inad-
vertent transmittal or publication of 
any report which was minimally late. 
‘‘(ii) BURDEN OF PROOF.—For pur-
poses of this subparagraph, the regulated 
entity shall have the burden of proving 
that the error was inadvertent or that a re-
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port was inadvertently transmitted or pub-
lished late. 
‘‘(B) SECOND TIER.—A violation described 
in paragraph (1) shall be subject to a penalty 
of not more than $20,000 for each day during 
which such violation continues or such false or 
misleading information is not corrected, in any 
case that is not addressed in subparagraph (A) 
or (C). 
‘‘(C) THIRD TIER.—A violation described 
in paragraph (1) shall be subject to a penalty 
of not more than $1,000,000 per day for each 
day during which such violation continues or 
such false or misleading information is not cor-
rected, in any case in which the subject regu-
lated entity committed such violation knowingly 
or with reckless disregard for the accuracy of 
any such information or report. 
‘‘(3) ASSESSMENTS.—Any penalty imposed 
under this subsection shall be in lieu of a penalty 
under section 1376, but shall be assessed and col-
lected by the Director in the manner provided in sec-
tion 1376 for penalties imposed under that section, 
and any such assessment (including the determina-
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tion of the amount of the penalty) shall be otherwise 
subject to the provisions of section 1376. 
‘‘(4) HEARING.—A regulated entity against 
which a penalty is assessed under this section shall 
be afforded an agency hearing if the regulated entity 
submits a request for a hearing not later than 20 
days after the date of the issuance of the notice of 
assessment. Section 1374 shall apply to any such 
proceedings.’’. 
(b) CONFORMING AMENDMENT.—The Federal Hous-
ing Enterprises Financial Safety and Soundness Act of 
1992 (12 U.S.C. 4501 et seq.) is amended by striking sec-
tions 1327 and 1328. 
SEC. 105. EXAMINERS AND ACCOUNTANTS; AUTHORITY TO 
CONTRACT FOR REVIEWS OF REGULATED EN-
TITIES; OMBUDSMAN. 
(a) IN GENERAL.—Section 1317 of the Federal 
Housing Enterprises Financial Safety and Soundness Act 
of 1992 (12 U.S.C. 4517) is amended— 
(1) in subsection (a), by striking ‘‘enterprise’’ 
each place that term appears and inserting ‘‘regu-
lated entity’’; 
(2) in subsection (b)— 
(A) by inserting ‘‘of a regulated entity’’ 
after ‘‘under this section’’; and 
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(B) by striking ‘‘to determine the condition 
of an enterprise for the purpose of ensuring its 
financial safety and soundness’’ and inserting 
‘‘or appropriate’’; 
(3) in subsection (c), in the second sentence, by 
inserting before the period ‘‘to conduct examinations 
under this section’’; 
(4) by redesignating subsections (d) through (f) 
as subsections (e) through (g), respectively; and 
(5) by inserting after subsection (c) the fol-
lowing: 
‘‘(d) INSPECTOR GENERAL.—There shall be within 
the Agency an Inspector General, who shall be appointed 
in accordance with section 3(a) of the Inspector General 
Act of 1978.’’. 
(b) DIRECT HIRE AUTHORITY TO HIRE ACCOUNT-
ANTS, ECONOMISTS, AND EXAMINERS.—Section 1317 of 
the Federal Housing Enterprises Financial Safety and 
Soundness Act of 1992 (12 U.S.C. 4517) is amended by 
adding at the end the following: 
‘‘(h) APPOINTMENT OF ACCOUNTANTS, ECONOMISTS, 
AND EXAMINERS.— 
‘‘(1) APPLICABILITY.—This section shall apply 
with respect to any position of examiner, accountant, 
economist, and specialist in financial markets and in 
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technology at the Agency, with respect to supervision 
and regulation of the regulated entities, that is in 
the competitive service. 
‘‘(2) APPOINTMENT AUTHORITY.—The Director 
may appoint candidates to any position described in 
paragraph (1)— 
‘‘(A) in accordance with the statutes, rules, 
and regulations governing appointments in the 
excepted service; and 
‘‘(B) notwithstanding any statutes, rules, 
and regulations governing appointments in the 
competitive service.’’. 
(c) AMENDMENTS TO INSPECTOR GENERAL ACT.— 
Section 11 of the Inspector General Act of 1978 (5 U.S.C. 
App.) is amended— 
(1) in paragraph (1), by inserting ‘‘; the Direc-
tor of the Federal Housing Finance Agency’’ after 
‘‘Social Security Administration’’; and 
(2) in paragraph (2), by inserting ‘‘, the Fed-
eral Housing Finance Agency’’ after ‘‘Social Secu-
rity Administration’’. 
(d) AUTHORITY TO CONTRACT FOR REVIEWS OF 
REGULATED ENTITIES.—Section 1319 of the Federal 
Housing Enterprises Financial Safety and Soundness Act 
of 1992 (12 U.S.C. 4519) is amended— 
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(1) in the section heading, by striking ‘‘ENTER-
PRISES BY RATING ORGANIZATION’’ and insert-
ing ‘‘REGULATED ENTITIES’’; and 
(2) by striking ‘‘enterprises’’ and inserting 
‘‘regulated entities’’. 
(e) OFFICE OF THE OMBUDSMAN.—Section 1317 of 
the Federal Housing Enterprises Financial Safety and 
Soundness Act of 1992 (12 U.S.C. 4517) is amended by 
adding at the end the following: 
‘‘(i) OMBUDSMAN.—The Director shall establish, by 
regulation, an Office of the Ombudsman within the Agen-
cy, which shall be responsible for considering complaints 
and appeals, from any regulated entity and any person 
that has a business relationship with a regulated entity, 
regarding any matter relating to the regulation and super-
vision of such regulated entity by the Agency. The regula-
tion issued by the Director under this subsection shall 
specify the authority and duties of the Office of the Om-
budsman.’’. 
SEC. 106. ASSESSMENTS. 
Section 1316 of the Federal Housing Enterprises Fi-
nancial Safety and Soundness Act of 1992 (12 U.S.C. 
4516) is amended— 
(1) by striking subsection (a) and inserting the 
following: 
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‘‘(a) ANNUAL ASSESSMENTS.—The Director shall es-
tablish and collect from the regulated entities annual as-
sessments in an amount not exceeding the amount suffi-
cient to provide for reasonable costs (including administra-
tive costs) and expenses of the Agency, including— 
‘‘(1) the expenses of any examinations under 
section 1317 of this Act and under section 20 of the 
Federal Home Loan Bank Act; 
‘‘(2) the expenses of obtaining any reviews and 
credit assessments under section 1319; 
‘‘(3) such amounts in excess of actual expenses 
for any given year as deemed necessary by the Di-
rector to maintain a working capital fund in accord-
ance with subsection (e); and 
‘‘(4) the windup of the affairs of the Office of 
Federal Housing Enterprise Oversight and the Fed-
eral Housing Finance Board under title III of the 
Federal Housing Finance Regulatory Reform Act of 
2008.’’; 
(2) in subsection (b)— 
(A) by realigning the margins of para-
graph (2) two ems from the left, so as to align 
the left margin of such paragraph with the left 
margins of paragraph (1); 
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(B) by redesignating paragraphs (2) and 
(3) as paragraphs (3) and (4), respectively; and 
(C) by inserting after paragraph (1) the 
following: 
‘‘(2) SEPARATE
TREATMENT
OF
FEDERAL 
HOME
LOAN
BANK
AND
ENTERPRISE
ASSESS-
MENTS.—Assessments collected from the enterprises 
shall not exceed the amounts sufficient to provide 
for the costs and expenses described in subsection 
(a) relating to the enterprises. Assessments collected 
from the Federal Home Loan Banks shall not ex-
ceed the amounts sufficient to provide for the costs 
and expenses described in subsection (a) relating to 
the Federal Home Loan Banks.’’; 
(3) by striking subsection (c) and inserting the 
following: 
‘‘(c) INCREASED COSTS OF REGULATION.— 
‘‘(1) INCREASE FOR INADEQUATE CAPITALIZA-
TION.—The semiannual payments made pursuant to 
subsection (b) by any regulated entity that is not 
classified (for purposes of subtitle B) as adequately 
capitalized may be increased, as necessary, in the 
discretion of the Director to pay additional esti-
mated costs of regulation of the regulated entity. 
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‘‘(2) ADJUSTMENT FOR ENFORCEMENT ACTIVI-
TIES.—The Director may adjust the amounts of any 
semiannual payments for an assessment under sub-
section (a) that are to be paid pursuant to sub-
section (b) by a regulated entity, as necessary in the 
discretion of the Director, to ensure that the costs 
of enforcement activities under this Act for a regu-
lated entity are borne only by such regulated entity. 
‘‘(3) ADDITIONAL
ASSESSMENT
FOR
DEFI-
CIENCIES.—If at any time, as a result of increased 
costs of regulation of a regulated entity that is not 
classified (for purposes of subtitle B) as adequately 
capitalized or as the result of supervisory or enforce-
ment activities under this Act for a regulated entity, 
the amount available from any semiannual payment 
made by such regulated entity pursuant to sub-
section (b) is insufficient to cover the costs of the 
Agency with respect to such entity, the Director may 
make and collect from such regulated entity an im-
mediate assessment to cover the amount of such de-
ficiency for the semiannual period. If, at the end of 
any semiannual period during which such an assess-
ment is made, any amount remains from such as-
sessment, such remaining amount shall be deducted 
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from the assessment for such regulated entity for 
the following semiannual period.’’; 
(4) in subsection (d), by striking ‘‘If’’ and in-
serting ‘‘Except with respect to amounts collected 
pursuant to subsection (a)(3), if’’; and 
(5) by striking subsections (e) through (g) and 
inserting the following: 
‘‘(e) WORKING CAPITAL FUND.—At the end of each 
year for which an assessment under this section is made, 
the Director shall remit to each regulated entity any 
amount of assessment collected from such regulated entity 
that is attributable to subsection (a)(3) and is in excess 
of the amount the Director deems necessary to maintain 
a working capital fund. 
‘‘(f) TREATMENT OF ASSESSMENTS.— 
‘‘(1) DEPOSIT.—Amounts received by the Di-
rector from assessments under this section may be 
deposited by the Director in the manner provided in 
section 5234 of the Revised Statutes of the United 
States (12 U.S.C. 192) for monies deposited by the 
Comptroller of the Currency. 
‘‘(2) NOT GOVERNMENT FUNDS.—The amounts 
received by the Director from any assessment under 
this section shall not be construed to be Government 
or public funds or appropriated money. 
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‘‘(3) NO
APPORTIONMENT
OF
FUNDS.—Not-
withstanding any other provision of law, the 
amounts received by the Director from any assess-
ment under this section shall not be subject to ap-
portionment for the purpose of chapter 15 of title 
31, United States Code, or under any other author-
ity. 
‘‘(4) USE OF FUNDS.—The Director may use 
any amounts received by the Director from assess-
ments under this section for compensation of the Di-
rector and other employees of the Agency and for all 
other expenses of the Director and the Agency. 
‘‘(5) 
AVAILABILITY
OF
OVERSIGHT
FUND 
AMOUNTS.—Notwithstanding any other provision of 
law, any amounts remaining in the Federal Housing 
Enterprises Oversight Fund established under this 
section (as in effect before the effective date of the 
Federal Housing Finance Regulatory Reform Act of 
2008, and any amounts remaining from assessments 
on the Federal Home Loan Banks pursuant to sec-
tion 18(b) of the Federal Home Loan Bank Act (12 
U.S.C. 1438(b)), shall, upon such effective date, be 
treated for purposes of this subsection as amounts 
received from assessments under this section. 
‘‘(6) TREASURY INVESTMENTS.— 
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‘‘(A) AUTHORITY.—The Director may re-
quest the Secretary of the Treasury to invest 
such portions of amounts received by the Direc-
tor from assessments paid under this section 
that, in the Director’s discretion, are not re-
quired to meet the current working needs of the 
Agency. 
‘‘(B) GOVERNMENT OBLIGATIONS.—Pursu-
ant to a request under subparagraph (A), the 
Secretary of the Treasury shall invest such 
amounts in Government obligations guaranteed 
as to principal and interest by the United 
States with maturities suitable to the needs of 
the Agency and bearing interest at a rate deter-
mined by the Secretary of the Treasury taking 
into consideration current market yields on out-
standing marketable obligations of the United 
States of comparable maturity. 
‘‘(g) BUDGET AND FINANCIAL MANAGEMENT.— 
‘‘(1) FINANCIAL OPERATING PLANS AND FORE-
CASTS.—The Director shall provide to the Director 
of the Office of Management and Budget copies of 
the Director’s financial operating plans and fore-
casts, as prepared by the Director in the ordinary 
course of the Agency’s operations, and copies of the 
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quarterly reports of the Agency’s financial condition 
and results of operations, as prepared by the Direc-
tor in the ordinary course of the Agency’s oper-
ations. 
‘‘(2) FINANCIAL
STATEMENTS.—The Agency 
shall prepare annually a statement of— 
‘‘(A) assets and liabilities and surplus or 
deficit; 
‘‘(B) income and expenses; and 
‘‘(C) sources and application of funds. 
‘‘(3) FINANCIAL MANAGEMENT SYSTEMS.—The 
Agency shall implement and maintain financial man-
agement systems that— 
‘‘(A) comply substantially with Federal fi-
nancial management systems requirements and 
applicable Federal accounting standards; and 
‘‘(B) use a general ledger system that ac-
counts for activity at the transaction level. 
‘‘(4) ASSERTION
OF
INTERNAL
CONTROLS.— 
The Director shall provide to the Comptroller Gen-
eral of the United States an assertion as to the ef-
fectiveness of the internal controls that apply to fi-
nancial reporting by the Agency, using the standards 
established in section 3512(c) of title 31, United 
States Code. 
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‘‘(5) RULE
OF
CONSTRUCTION.—This sub-
section may not be construed as implying any obliga-
tion on the part of the Director to consult with or 
obtain the consent or approval of the Director of the 
Office of Management and Budget with respect to 
any report, plan, forecast, or other information re-
ferred to in paragraph (1) or any jurisdiction or 
oversight over the affairs or operations of the Agen-
cy. 
‘‘(h) AUDIT OF AGENCY.— 
‘‘(1) IN GENERAL.—The Comptroller General 
shall annually audit the financial transactions of the 
Agency in accordance with the United States gen-
erally accepted government auditing standards as 
may be prescribed by the Comptroller General of the 
United States. The audit shall be conducted at the 
place or places where accounts of the Agency are 
normally kept. The representatives of the Govern-
ment Accountability Office shall have access to the 
personnel and to all books, accounts, documents, pa-
pers, records (including electronic records), reports, 
files, and all other papers, automated data, things, 
or property belonging to or under the control of or 
used or employed by the Agency pertaining to its fi-
nancial transactions and necessary to facilitate the 
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audit, and such representatives shall be afforded full 
facilities for verifying transactions with the balances 
or securities held by depositories, fiscal agents, and 
custodians. All such books, accounts, documents, 
records, reports, files, papers, and property of the 
Agency shall remain in possession and custody of 
the Agency. The Comptroller General may obtain 
and duplicate any such books, accounts, documents, 
records, working papers, automated data and files, 
or other information relevant to such audit without 
cost to the Comptroller General and the Comptroller 
General’s right of access to such information shall 
be enforceable pursuant to section 716(c) of title 31, 
United States Code. 
‘‘(2) REPORT.—The Comptroller General shall 
submit to the Congress a report of each annual 
audit conducted under this subsection. The report to 
the Congress shall set forth the scope of the audit 
and shall include the statement of assets and liabil-
ities and surplus or deficit, the statement of income 
and expenses, the statement of sources and applica-
tion of funds, and such comments and information 
as may be deemed necessary to inform Congress of 
the financial operations and condition of the Agency, 
together with such recommendations with respect 
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thereto as the Comptroller General may deem advis-
able. A copy of each report shall be furnished to the 
President and to the Agency at the time submitted 
to the Congress. 
‘‘(3) ASSISTANCE AND COSTS.—For the purpose 
of conducting an audit under this subsection, the 
Comptroller General may, in the discretion of the 
Comptroller General, employ by contract, without re-
gard to section 3709 of the Revised Statutes of the 
United States (41 U.S.C. 5), professional services of 
firms and organizations of certified public account-
ants for temporary periods or for special purposes. 
Upon the request of the Comptroller General, the 
Director of the Agency shall transfer to the Govern-
ment Accountability Office from funds available, the 
amount requested by the Comptroller General to 
cover the full costs of any audit and report con-
ducted by the Comptroller General. The Comptroller 
General shall credit funds transferred to the account 
established for salaries and expenses of the Govern-
ment Accountability Office, and such amount shall 
be available upon receipt and without fiscal year lim-
itation to cover the full costs of the audit and re-
port.’’. 
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SEC. 107. REGULATIONS AND ORDERS. 
Section 1319G of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 
4526) is amended— 
(1) by striking subsection (a) and inserting the 
following: 
‘‘(a) AUTHORITY.—The Director shall issue any reg-
ulations, guidelines, or orders necessary to carry out the 
duties of the Director under this title or the authorizing 
statutes, and to ensure that the purposes of this title and 
the authorizing statutes are accomplished.’’; and 
(2) by striking subsection (c). 
SEC. 108. PRUDENTIAL MANAGEMENT AND OPERATIONS 
STANDARDS. 
The Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is 
amended by inserting after section 1313A, as added by 
this Act, the following new section: 
‘‘SEC. 1313B. PRUDENTIAL MANAGEMENT AND OPERATIONS 
STANDARDS. 
‘‘(a) STANDARDS.—The Director shall establish 
standards, by regulation or guideline, for each regulated 
entity relating to— 
‘‘(1) adequacy of internal controls and informa-
tion systems taking into account the nature and 
scale of business operations; 
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‘‘(2) independence and adequacy of internal 
audit systems; 
‘‘(3) management of interest rate risk exposure; 
‘‘(4) management of market risk, including 
standards that provide for systems that accurately 
measure, monitor, and control market risks and, as 
warranted, that establish limitations on market risk; 
‘‘(5) adequacy and maintenance of liquidity and 
reserves; 
‘‘(6) management of asset and investment port-
folio growth; 
‘‘(7) investments and acquisitions of assets by 
a regulated entity, to ensure that they are consistent 
with the purposes of this title and the authorizing 
statutes; 
‘‘(8) overall risk management processes, includ-
ing adequacy of oversight by senior management and 
the board of directors and of processes and policies 
to identify, measure, monitor, and control material 
risks, including reputational risks, and for adequate, 
well-tested business resumption plans for all major 
systems with remote site facilities to protect against 
disruptive events; 
‘‘(9) management of credit and counterparty 
risk, including systems to identify concentrations of 
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credit risk and prudential limits to restrict exposure 
of the regulated entity to a single counterparty or 
groups of related counterparties; 
‘‘(10) maintenance of adequate records, in ac-
cordance with consistent accounting policies and 
practices that enable the Director to evaluate the fi-
nancial condition of the regulated entity; and 
‘‘(11) such other operational and management 
standards as the Director determines to be appro-
priate. 
‘‘(b) FAILURE TO MEET STANDARDS.— 
‘‘(1) PLAN REQUIREMENT.— 
‘‘(A) IN GENERAL.—If the Director deter-
mines that a regulated entity fails to meet any 
standard established under subsection (a)— 
‘‘(i) if such standard is established by 
regulation, the Director shall require the 
regulated entity to submit an acceptable 
plan to the Director within the time al-
lowed under subparagraph (C); and 
‘‘(ii) if such standard is established by 
guideline, the Director may require the 
regulated entity to submit a plan described 
in clause (i). 
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‘‘(B) 
CONTENTS.—Any 
plan 
required 
under subparagraph (A) shall specify the ac-
tions that the regulated entity will take to cor-
rect the deficiency. If the regulated entity is 
undercapitalized, the plan may be a part of the 
capital restoration plan for the regulated entity 
under section 1369C. 
‘‘(C) DEADLINES
FOR
SUBMISSION
AND 
REVIEW.—The Director shall by regulation es-
tablish deadlines that— 
‘‘(i) provide the regulated entities with 
reasonable time to submit plans required 
under subparagraph (A), and generally re-
quire a regulated entity to submit a plan 
not later than 30 days after the Director 
determines that the entity fails to meet 
any standard established under subsection 
(a); and 
‘‘(ii) require the Director to act on 
plans expeditiously, and generally not later 
than 30 days after the plan is submitted. 
‘‘(2) REQUIRED ORDER UPON FAILURE TO SUB-
MIT OR IMPLEMENT PLAN.—If a regulated entity 
fails to submit an acceptable plan within the time al-
lowed under paragraph (1)(C), or fails in any mate-
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rial respect to implement a plan accepted by the Di-
rector, the following shall apply: 
‘‘(A) REQUIRED
CORRECTION
OF
DEFI-
CIENCY.—The Director shall, by order, require 
the regulated entity to correct the deficiency. 
‘‘(B) OTHER
AUTHORITY.—The Director 
may, by order, take one or more of the fol-
lowing actions until the deficiency is corrected: 
‘‘(i) Prohibit the regulated entity from 
permitting its average total assets (as such 
term is defined in section 1316(b)) during 
any calendar quarter to exceed its average 
total assets during the preceding calendar 
quarter, or restrict the rate at which the 
average total assets of the entity may in-
crease from one calendar quarter to an-
other. 
‘‘(ii) Require the regulated entity— 
‘‘(I) in the case of an enterprise, 
to increase its ratio of core capital to 
assets. 
‘‘(II) in the case of a Federal 
Home Loan Bank, to increase its 
ratio of total capital (as such term is 
defined in section 6(a)(5) of the Fed-
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eral Home Loan Bank Act (12 U.S.C. 
1426(a)(5)) to assets. 
‘‘(iii) Require the regulated entity to 
take any other action that the Director de-
termines will better carry out the purposes 
of this section than any of the actions de-
scribed in this subparagraph. 
‘‘(3) MANDATORY
RESTRICTIONS.—In com-
plying with paragraph (2), the Director shall take 
one or more of the actions described in clauses (i) 
through (iii) of paragraph (2)(B) if— 
‘‘(A) the Director determines that the reg-
ulated entity fails to meet any standard pre-
scribed under subsection (a); 
‘‘(B) the regulated entity has not corrected 
the deficiency; and 
‘‘(C) during the 18-month period before 
the date on which the regulated entity first 
failed to meet the standard, the entity under-
went extraordinary growth, as defined by the 
Director. 
‘‘(c) OTHER ENFORCEMENT AUTHORITY NOT AF-
FECTED.—The authority of the Director under this sec-
tion is in addition to any other authority of the Director.’’. 
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SEC. 109. REVIEW OF AND AUTHORITY OVER ENTERPRISE 
ASSETS AND LIABILITIES. 
(a) IN GENERAL.—Subtitle B of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992 
(12 U.S.C. 4611 et seq.) is amended— 
(1) by striking the subtitle designation and 
heading and inserting the following: 
‘‘Subtitle B—Required Capital Lev-
els for Regulated Entities, Spe-
cial Enforcement Powers, and 
Reviews of Assets and Liabil-
ities’’; 
and 
(2) by adding at the end the following new sec-
tion: 
‘‘SEC. 1369E. REVIEWS OF ENTERPRISE ASSETS AND LIABIL-
ITIES. 
‘‘(a) IN GENERAL.—The Director shall, by regula-
tion, establish criteria governing the portfolio holdings of 
the enterprises, to ensure that the holdings are backed by 
sufficient capital and consistent with the mission and the 
safe and sound operations of the enterprises. In estab-
lishing such criteria, the Director shall consider the ability 
of the enterprises to provide a liquid secondary market 
through securitization activities, the portfolio holdings in 
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relation to the overall mortgage market, and adherence to 
the standards specified in section 1313B. 
‘‘(b) TEMPORARY
ADJUSTMENTS.—The Director 
may, by order, make temporary adjustments to the estab-
lished standards for an enterprise or both enterprises, 
such as during times of economic distress or market dis-
ruption. 
‘‘(c) AUTHORITY TO REQUIRE DISPOSITION OR AC-
QUISITION.—The Director shall monitor the portfolio of 
each enterprise. Pursuant to subsection (a) and notwith-
standing the capital classifications of the enterprises, the 
Director may, by order, require an enterprise, under such 
terms and conditions as the Director determines to be ap-
propriate, to dispose of or acquire any asset, if the Direc-
tor determines that such action is consistent with the pur-
poses of this Act or any of the authorizing statutes.’’. 
(b) REGULATIONS.—Not later than the expiration of 
the 180-day period beginning on the effective date of this 
Act, the Director shall issue regulations pursuant to sec-
tion 1369E(a) of the Federal Housing Enterprises Finan-
cial Safety and Soundness Act of 1992 (as added by sub-
section (a) of this section) establishing the portfolio hold-
ings standards under such section. 
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SEC. 110. RISK-BASED CAPITAL REQUIREMENTS. 
(a) IN GENERAL.—Section 1361 of the Federal 
Housing Enterprises Financial Safety and Soundness Act 
of 1992 (12 U.S.C. 4611) is amended to read as follows: 
‘‘SEC. 1361. RISK-BASED CAPITAL LEVELS FOR REGULATED 
ENTITIES. 
‘‘(a) IN GENERAL.— 
‘‘(1) ENTERPRISES.—The Director shall, by 
regulation, establish risk-based capital requirements 
for the enterprises to ensure that the enterprises op-
erate in a safe and sound manner, maintaining suffi-
cient capital and reserves to support the risks that 
arise in the operations and management of the en-
terprises. 
‘‘(2) FEDERAL HOME LOAN BANKS.—The Di-
rector shall establish risk-based capital standards 
under section 6 of the Federal Home Loan Bank 
Act for the Federal Home Loan Banks. 
‘‘(b) NO LIMITATION.—Nothing in this section shall 
limit the authority of the Director to require other reports 
or undertakings, or take other action, in furtherance of 
the responsibilities of the Director under this Act.’’. 
(b) FEDERAL HOME LOAN BANKS RISK-BASED CAP-
ITAL.—Section 6(a)(3) of the Federal Home Loan Bank 
Act (12 U.S.C. 1426(a)(3)) is amended— 
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(1) by striking subparagraph (A) and inserting 
the following: 
‘‘(A) RISK-BASED CAPITAL STANDARDS.— 
The Director shall, by regulation, establish risk- 
based capital standards for the Federal Home 
Loan Banks to ensure that the Federal Home 
Loan Banks operate in a safe and sound man-
ner, with sufficient permanent capital and re-
serves to support the risks that arise in the op-
erations and management of the Federal Home 
Loans Banks.’’; and 
(2) in subparagraph (B), by striking ‘‘(A)(ii)’’ 
and inserting ‘‘(A)’’. 
SEC. 111. MINIMUM CAPITAL LEVELS. 
Section 1362 of the Federal Housing Enterprises Fi-
nancial Safety and Soundness Act of 1992 (12 U.S.C. 
4612) is amended— 
(1) in subsection (a), by striking ‘‘IN GEN-
ERAL’’ and inserting ‘‘ENTERPRISES’’; and 
(2) by striking subsection (b) and inserting the 
following: 
‘‘(b) FEDERAL HOME LOAN BANKS.—For purposes 
of this subtitle, the minimum capital level for each Federal 
Home Loan Bank shall be the minimum capital required 
to be maintained to comply with the leverage requirement 
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for the bank established under section 6(a)(2) of the Fed-
eral Home Loan Bank Act (12 U.S.C. 1426(a)(2)). 
‘‘(c) ESTABLISHMENT OF REVISED MINIMUM CAP-
ITAL LEVELS.—Notwithstanding subsections (a) and (b) 
and notwithstanding the capital classifications of the regu-
lated entities, the Director may, by regulations issued 
under section 1319G, establish a minimum capital level 
for the enterprises, for the Federal Home Loan Banks, 
or for both the enterprises and the banks, that is higher 
than the level specified in subsection (a) for the enter-
prises or the level specified in subsection (b) for the Fed-
eral Home Loan Banks, to the extent needed to ensure 
that the regulated entities operate in a safe and sound 
manner. 
‘‘(d) AUTHORITY TO REQUIRE TEMPORARY IN-
CREASE.— 
‘‘(1) 
IN
GENERAL.—Notwithstanding 
sub-
sections (a) and (b) and any minimum capital level 
established pursuant to subsection (c), the Director 
may, by order, increase the minimum capital level 
for a regulated entity on a temporary basis, when 
the Director determines that such an increase is nec-
essary and consistent with the prudential regulation 
and the safe and sound operations of a regulated en-
tity. 
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‘‘(2) RESCISSION.—The Director shall rescind 
any temporary minimum capital level established 
under paragraph (1) when the Director determines 
that the circumstances or facts no longer justify the 
temporary minimum capital level. 
‘‘(3) REGULATIONS REQUIRED.—The Director 
shall issue regulations establishing— 
‘‘(A) standards for the imposition of a 
temporary increase in minimum capital under 
paragraph (1); 
‘‘(B) the standards and procedures that 
the Director will use to make the determination 
referred to in paragraph (2); and 
‘‘(C) a reasonable time frame for periodic 
review of any temporary increase in minimum 
capital for the purpose of making the deter-
mination referred to in paragraph (2). 
‘‘(e) AUTHORITY TO ESTABLISH ADDITIONAL CAP-
ITAL AND RESERVE REQUIREMENTS FOR PARTICULAR 
PURPOSES.—The Director may, at any time by order or 
regulation, establish such capital or reserve requirements 
with respect to any product or activity of a regulated enti-
ty, as the Director considers appropriate to ensure that 
the regulated entity operates in a safe and sound manner, 
with sufficient capital and reserves to support the risks 
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that arise in the operations and management of the regu-
lated entity. 
‘‘(f) PERIODIC REVIEW.—The Director shall periodi-
cally review the amount of core capital maintained by the 
enterprises, the amount of capital retained by the Federal 
Home Loan Banks, and the minimum capital levels estab-
lished for such regulated entities pursuant to this sec-
tion.’’. 
SEC. 112. REGISTRATION UNDER THE SECURITIES LAWS. 
The Securities Exchange Act of 1934 (15 U.S.C. 78a 
et seq.) is amended by adding at the end the following: 
‘‘SEC. 38. FEDERAL NATIONAL MORTGAGE ASSOCIATION, 
FEDERAL HOME LOAN MORTGAGE CORPORA-
TION, FEDERAL HOME LOAN BANKS. 
‘‘(a) FEDERAL NATIONAL MORTGAGE ASSOCIATION 
AND FEDERAL HOME LOAN MORTGAGE CORPORATION.— 
No class of equity securities of the Federal National Mort-
gage Association or the Federal Home Loan Mortgage 
Corporation shall be treated as an exempted security for 
purposes of section 12, 13, 14, or 16. 
‘‘(b) FEDERAL HOME LOAN BANKS.— 
‘‘(1) REGISTRATION.—Each Federal Home 
Loan Bank shall register a class of its common 
stock under section 12(g), not later than 120 days 
after the date of enactment of the Federal Housing 
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Finance Regulatory Reform Act of 2008, and shall 
thereafter maintain such registration and be treated 
for purposes of this title as an ‘issuer’, the securities 
of which are required to be registered under section 
12, regardless of the number of members holding 
such stock at any given time. 
‘‘(2) STANDARDS RELATING TO AUDIT COMMIT-
TEES.—Each Federal Home Loan Bank shall com-
ply with the rules issued by the Commission under 
section 10A(m). 
‘‘(c) DEFINITIONS.—For purposes of this section, the 
following definitions shall apply: 
‘‘(1) FEDERAL HOME LOAN BANK; MEMBER.— 
The terms ‘Federal Home Loan Bank’ and ‘mem-
ber’, have the same meanings as in section 2 of the 
Federal Home Loan Bank Act. 
‘‘(2) FEDERAL NATIONAL MORTGAGE ASSOCIA-
TION.—The term ‘Federal National Mortgage Asso-
ciation’ means the corporation created by the Fed-
eral National Mortgage Association Charter Act. 
‘‘(3) FEDERAL
HOME
LOAN
MORTGAGE
COR-
PORATION.—The term ‘Federal Home Loan Mort-
gage Corporation’ means the corporation created by 
the Federal Home Loan Mortgage Corporation 
Act.’’. 
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SEC. 113. PROHIBITION AND WITHHOLDING OF EXECUTIVE 
COMPENSATION. 
(a) IN GENERAL.—Section 1318 of the Federal 
Housing Enterprises Financial Safety and Soundness Act 
of 1992 (12 U.S.C. 4518) is amended— 
(1) in the section heading, by striking ‘‘OF EX-
CESSIVE’’ and inserting ‘‘AND WITHHOLDING OF 
EXECUTIVE’’; 
(2) by redesignating subsection (b) as sub-
section (d); and 
(3) by inserting after subsection (a) the fol-
lowing: 
‘‘(b) FACTORS.—In making any determination under 
subsection (a), the Director may take into consideration 
any factors the Director considers relevant, including any 
wrongdoing on the part of the executive officer, and such 
wrongdoing shall include any fraudulent act or omission, 
breach of trust or fiduciary duty, violation of law, rule, 
regulation, order, or written agreement, and insider abuse 
with respect to the regulated entity. The approval of an 
agreement or contract pursuant to section 309(d)(3)(B) 
of the Federal National Mortgage Association Charter Act 
(12 U.S.C. 1723a(d)(3)(B)) or section 303(h)(2) of the 
Federal Home Loan Mortgage Corporation Act (12 U.S.C. 
1452(h)(2)) shall not preclude the Director from making 
any subsequent determination under subsection (a). 
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‘‘(c) WITHHOLDING
OF COMPENSATION.—In car-
rying out subsection (a), the Director may require a regu-
lated entity to withhold any payment, transfer, or dis-
bursement of compensation to an executive officer, or to 
place such compensation in an escrow account, during the 
review of the reasonableness and comparability of com-
pensation.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) FANNIE MAE.—Section 309(d) of the Fed-
eral National Mortgage Association Charter Act (12 
U.S.C. 1723a(d)) is amended by adding at the end 
the following new paragraph: 
‘‘(4) Notwithstanding any other provision of this sec-
tion, the corporation shall not transfer, disburse, or pay 
compensation to any executive officer, or enter into an 
agreement with such executive officer, without the ap-
proval of the Director, for matters being reviewed under 
section 1318 of the Federal Housing Enterprises Finan-
cial Safety and Soundness Act of 1992 (12 U.S.C. 
4518).’’. 
(2) FREDDIE MAC.—Section 303(h) of the Fed-
eral Home Loan Mortgage Corporation Act (12 
U.S.C. 1452(h)) is amended by adding at the end 
the following new paragraph: 
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‘‘(4) Notwithstanding any other provision of this sec-
tion, the Corporation shall not transfer, disburse, or pay 
compensation to any executive officer, or enter into an 
agreement with such executive officer, without the ap-
proval of the Director, for matters being reviewed under 
section 1318 of the Federal Housing Enterprises Finan-
cial Safety and Soundness Act of 1992 (12 U.S.C. 
4518).’’. 
(3) FEDERAL HOME LOAN BANKS.—Section 7 
of the Federal Home Loan Bank Act (12 U.S.C. 
1427) is amended by adding at the end the following 
new subsection: 
‘‘(l) WITHHOLDING
OF COMPENSATION.—Notwith-
standing any other provision of this section, a Federal 
Home Loan Bank shall not transfer, disburse, or pay com-
pensation to any executive officer, or enter into an agree-
ment with such executive officer, without the approval of 
the Director, for matters being reviewed under section 
1318 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4518).’’. 
SEC. 114. LIMIT ON GOLDEN PARACHUTES. 
Section 1318 of the Federal Housing Enterprises Fi-
nancial Safety and Soundness Act of 1992 (12 U.S.C. 
4518) is amended by adding at the end the following: 
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‘‘(e) AUTHORITY TO REGULATE OR PROHIBIT CER-
TAIN FORMS OF BENEFITS TO AFFILIATED PARTIES.— 
‘‘(1) GOLDEN PARACHUTES AND INDEMNIFICA-
TION
PAYMENTS.—The Director may prohibit or 
limit, by regulation or order, any golden parachute 
payment or indemnification payment. 
‘‘(2) FACTORS TO BE TAKEN INTO ACCOUNT.— 
The Director shall prescribe, by regulation, the fac-
tors to be considered by the Director in taking any 
action pursuant to paragraph (1), which may include 
such factors as— 
‘‘(A) whether there is a reasonable basis to 
believe that the affiliated party has committed 
any fraudulent act or omission, breach of trust 
or fiduciary duty, or insider abuse with regard 
to the regulated entity that has had a material 
effect on the financial condition of the regulated 
entity; 
‘‘(B) whether there is a reasonable basis to 
believe that the affiliated party is substantially 
responsible for the insolvency of the regulated 
entity, the appointment of a conservator or re-
ceiver for the regulated entity, or the troubled 
condition of the regulated entity (as defined in 
regulations prescribed by the Director); 
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‘‘(C) whether there is a reasonable basis to 
believe that the affiliated party has materially 
violated any applicable provision of Federal or 
State law or regulation that has had a material 
effect on the financial condition of the regulated 
entity; 
‘‘(D) whether the affiliated party was in a 
position of managerial or fiduciary responsi-
bility; and 
‘‘(E) the length of time that the party was 
affiliated with the regulated entity, and the de-
gree to which— 
‘‘(i) the payment reasonably reflects 
compensation earned over the period of 
employment; and 
‘‘(ii) the compensation involved rep-
resents a reasonable payment for services 
rendered. 
‘‘(3) CERTAIN
PAYMENTS
PROHIBITED.—No 
regulated entity may prepay the salary or any liabil-
ity or legal expense of any affiliated party if such 
payment is made— 
‘‘(A) in contemplation of the insolvency of 
such regulated entity, or after the commission 
of an act of insolvency; and 
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‘‘(B) with a view to, or having the result 
of— 
‘‘(i) preventing the proper application 
of the assets of the regulated entity to 
creditors; or 
‘‘(ii) preferring one creditor over an-
other. 
‘‘(4) 
GOLDEN
PARACHUTE
PAYMENT
DE-
FINED.— 
‘‘(A) IN GENERAL.—For purposes of this 
subsection, the term ‘golden parachute pay-
ment’ means any payment (or any agreement to 
make any payment) in the nature of compensa-
tion by any regulated entity for the benefit of 
any affiliated party pursuant to an obligation of 
such regulated entity that— 
‘‘(i) is contingent on the termination 
of such party’s affiliation with the regu-
lated entity; and 
‘‘(ii) is received on or after the date 
on which— 
‘‘(I) the regulated entity became 
insolvent; 
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‘‘(II) any conservator or receiver 
is appointed for such regulated entity; 
or 
‘‘(III) the Director determines 
that the regulated entity is in a trou-
bled condition (as defined in the regu-
lations of the Director). 
‘‘(B) CERTAIN PAYMENTS IN CONTEMPLA-
TION
OF
AN
EVENT.—Any payment which 
would be a golden parachute payment but for 
the fact that such payment was made before the 
date referred to in subparagraph (A)(ii) shall be 
treated as a golden parachute payment if the 
payment was made in contemplation of the oc-
currence of an event described in any subclause 
of such subparagraph. 
‘‘(C) 
CERTAIN
PAYMENTS
NOT
IN-
CLUDED.—For purposes of this subsection, the 
term ‘golden parachute payment’ shall not in-
clude— 
‘‘(i) any payment made pursuant to a 
retirement plan which is qualified (or is in-
tended to be qualified) under section 401 
of the Internal Revenue Code of 1986, or 
other nondiscriminatory benefit plan; 
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‘‘(ii) any payment made pursuant to a 
bona fide deferred compensation plan or 
arrangement which the Director deter-
mines, by regulation or order, to be per-
missible; or 
‘‘(iii) any payment made by reason of 
the death or disability of an affiliated 
party. 
‘‘(5) OTHER
DEFINITIONS.—For purposes of 
this subsection, the following definitions shall apply: 
‘‘(A) INDEMNIFICATION
PAYMENT.—Sub-
ject to paragraph (6), the term ‘indemnification 
payment’ means any payment (or any agree-
ment to make any payment) by any regulated 
entity for the benefit of any person who is or 
was an affiliated party, to pay or reimburse 
such person for any liability or legal expense 
with regard to any administrative proceeding or 
civil action instituted by the Agency which re-
sults in a final order under which such per-
son— 
‘‘(i) is assessed a civil money penalty; 
‘‘(ii) is removed or prohibited from 
participating in conduct of the affairs of 
the regulated entity; or 
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‘‘(iii) is required to take any affirma-
tive action to correct certain conditions re-
sulting from violations or practices, by 
order of the Director. 
‘‘(B) LIABILITY OR LEGAL EXPENSE.—The 
term ‘liability or legal expense’ means— 
‘‘(i) any legal or other professional ex-
pense incurred in connection with any 
claim, proceeding, or action; 
‘‘(ii) the amount of, and any cost in-
curred in connection with, any settlement 
of any claim, proceeding, or action; and 
‘‘(iii) the amount of, and any cost in-
curred in connection with, any judgment or 
penalty imposed with respect to any claim, 
proceeding, or action. 
‘‘(C) PAYMENT.—The term ‘payment’ in-
cludes— 
‘‘(i) any direct or indirect transfer of 
any funds or any asset; and 
‘‘(ii) any segregation of any funds or 
assets for the purpose of making, or pursu-
ant to an agreement to make, any payment 
after the date on which such funds or as-
sets are segregated, without regard to 
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whether the obligation to make such pay-
ment is contingent on— 
‘‘(I) the determination, after such 
date, of the liability for the payment 
of such amount; or 
‘‘(II) the liquidation, after such 
date, of the amount of such payment. 
‘‘(6) CERTAIN
COMMERCIAL
INSURANCE
COV-
ERAGE NOT TREATED AS COVERED BENEFIT PAY-
MENT.—No provision of this subsection shall be con-
strued as prohibiting any regulated entity from pur-
chasing any commercial insurance policy or fidelity 
bond, except that, subject to any requirement de-
scribed in paragraph (5)(A)(iii), such insurance pol-
icy or bond shall not cover any legal or liability ex-
pense of the regulated entity which is described in 
paragraph (5)(A).’’. 
SEC. 115. REPORTING OF FRAUDULENT LOANS. 
Part 1 of subtitle C of the Federal Housing Enter-
prises Financial Safety and Soundness Act of 1992 (12 
U.S.C. 4631 et seq.), as amended by this Act, is amended 
by adding at the end the following: 
‘‘SEC. 1379E. REPORTING OF FRAUDULENT LOANS. 
‘‘(a) REQUIREMENT
TO
REPORT.—The Director 
shall require a regulated entity to submit to the Director 
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a timely report upon discovery by the regulated entity that 
it has purchased or sold a fraudulent loan or financial in-
strument, or suspects a possible fraud relating to the pur-
chase or sale of any loan or financial instrument. The Di-
rector shall require each regulated entity to establish and 
maintain procedures designed to discover any such trans-
actions. 
‘‘(b) PROTECTION FROM LIABILITY FOR REPORTS.— 
Any regulated entity that, in good faith, makes a report 
pursuant to subsection (a), and any entity-affiliated party, 
that, in good faith, makes or requires another to make 
any such report, shall not be liable to any person under 
any provision of law or regulation, any constitution, law, 
or regulation of any State or political subdivision of any 
State, or under any contract or other legally enforceable 
agreement (including any arbitration agreement) for such 
report or for any failure to provide notice of such report 
to the person who is the subject of such report or any 
other persons identified in the report.’’. 
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Subtitle B—Improvement of 
Mission Supervision 
SEC. 121. TRANSFER OF PROGRAM APPROVAL AND HOUS-
ING GOAL OVERSIGHT. 
Part 2 of subtitle A of the Federal Housing Enter-
prises Financial Safety and Soundness Act of 1992 (12 
U.S.C. 4541 et seq.) is amended— 
(1) by striking the heading for the part and in-
serting the following: 
‘‘PART 2—ADDITIONAL AUTHORITIES OF THE 
DIRECTOR’’; 
and 
(2) by striking sections 1321 and 1322. 
SEC. 122. ASSUMPTION BY THE DIRECTOR OF CERTAIN 
OTHER HUD RESPONSIBILITIES. 
(a) IN GENERAL.—Part 2 of subtitle A of the Federal 
Housing Enterprises Financial Safety and Soundness Act 
of 1992 (12 U.S.C. 4541 et seq.) is amended— 
(1) by striking ‘‘Secretary’’ each place that 
term appears and inserting ‘‘Director’’ in each of 
sections 1323, 1326, 1327, 1328, and 1336; and 
(2) by striking sections 1337, 1338, and 1349 
(12 U.S.C. 4567, 4562 note, and 4589). 
(b) RETENTION OF FAIR HOUSING RESPONSIBIL-
ITIES.—Section 1325 of the Federal Housing Enterprises 
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Financial Safety and Soundness Act of 1992 (12 U.S.C. 
4545) is amended in the matter preceding paragraph (1), 
by inserting ‘‘of Housing and Urban Development’’ after 
‘‘The Secretary’’. 
SEC. 123. REVIEW OF ENTERPRISE PRODUCTS. 
Part 2 of subtitle A of the Federal Housing Enter-
prises Financial Safety and Soundness Act of 1992 (12 
U.S.C. 4541 et seq.) is amended by inserting before sec-
tion 1323 the following: 
‘‘SEC. 1321. PRIOR APPROVAL AUTHORITY FOR PRODUCTS. 
‘‘(a) IN GENERAL.—The Director shall require each 
enterprise to obtain the approval of the Director for any 
product of the enterprise before initially offering the prod-
uct. 
‘‘(b) STANDARD FOR APPROVAL.—In considering any 
request for approval of a product pursuant to subsection 
(a), the Director shall make a determination that— 
‘‘(1) in the case of a product of the Federal Na-
tional Mortgage Association, the product is author-
ized under paragraph (2), (3), (4), or (5) of section 
302(b) or section 304 of the Federal National Mort-
gage Association Charter Act (12 U.S.C. 1717(b), 
1719); 
‘‘(2) in the case of a product of the Federal 
Home Loan Mortgage Corporation, the product is 
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authorized under paragraph (1), (4), or (5) of sec-
tion 305(a) of the Federal Home Loan Mortgage 
Corporation Act (12 U.S.C. 1454(a)); 
‘‘(3) the product is in the public interest; and 
‘‘(4) the product is consistent with the safety 
and soundness of the enterprise or the mortgage fi-
nance system. 
‘‘(c) PROCEDURE FOR APPROVAL.— 
‘‘(1) SUBMISSION OF REQUEST.—An enterprise 
shall submit to the Director a written request for 
approval of a product that describes the product in 
such form as prescribed by order or regulation of the 
Director. 
‘‘(2) REQUEST FOR PUBLIC COMMENT.—Imme-
diately upon receipt of a request for approval of a 
product, as required under paragraph (1), the Direc-
tor shall publish notice of such request and of the 
period for public comment pursuant to paragraph 
(3) regarding the product, and a description of the 
product proposed by the request. The Director shall 
give interested parties the opportunity to respond in 
writing to the proposed product. 
‘‘(3) PUBLIC COMMENT PERIOD.—During the 
30-day period beginning on the date of publication 
pursuant to paragraph (2) of a request for approval 
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of a product, the Director shall receive public com-
ments regarding the proposed product. 
‘‘(4) OFFERING OF PRODUCT.— 
‘‘(A) IN
GENERAL.—Not later than 30 
days after the close of the public comment pe-
riod described in paragraph (3), the Director 
shall approve or deny the product, specifying 
the grounds for such decision in writing. 
‘‘(B) FAILURE TO ACT.—If the Director 
fails to act within the 30-day period described 
in subparagraph (A), then the enterprise may 
offer the product. 
‘‘(C) TEMPORARY APPROVAL.—The Direc-
tor may, subject to the rules of the Director, 
provide for temporary approval of the offering 
of a product without a public comment period, 
if the Director finds that the existence of exi-
gent circumstances makes such delay contrary 
to the public interest. 
‘‘(d) CONDITIONAL APPROVAL.—If the Director ap-
proves the offering of any product by an enterprise, the 
Director may establish terms, conditions, or limitations 
with respect to such product with which the enterprise 
must comply in order to offer such product. 
‘‘(e) EXCLUSIONS.— 
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‘‘(1) IN GENERAL.—The requirements of sub-
sections (a) through (d) do not apply with respect 
to— 
‘‘(A) the automated loan underwriting sys-
tem of an enterprise in existence as of the date 
of enactment of the Federal Housing Finance 
Regulatory Reform Act of 2008, including any 
upgrade to the technology, operating system, or 
software to operate the underwriting system; 
‘‘(B) any modification to the mortgage 
terms and conditions or mortgage underwriting 
criteria relating to the mortgages that are pur-
chased or guaranteed by an enterprise, provided 
that such modifications do not alter the under-
lying transaction so as to include services or fi-
nancing, other than residential mortgage fi-
nancing; or 
‘‘(C) any other activity that is substantially 
similar, as determined by rule of the Director 
to— 
‘‘(i) the activities described in sub-
paragraphs (A) and (B); and 
‘‘(ii) other activities that have been 
approved by the Director in accordance 
with this section. 
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‘‘(2) EXPEDITED REVIEW.— 
‘‘(A) ENTERPRISE NOTICE.—For any new 
activity that an enterprise considers not to be 
a product, the enterprise shall provide written 
notice to the Director of such activity, and may 
not commence such activity until the date of re-
ceipt of a notice under subparagraph (B) or the 
expiration of the period described in subpara-
graph (C). The Director shall establish, by reg-
ulation, the form and content of such written 
notice. 
‘‘(B) DIRECTOR
DETERMINATION.—Not 
later than 15 days after the date of receipt of 
a notice under subparagraph (A), the Director 
shall determine whether such activity is a prod-
uct subject to approval under this section. The 
Director shall, immediately upon so deter-
mining, notify the enterprise. 
‘‘(C) FAILURE TO ACT.—If the Director 
fails to determine whether such activity is a 
product within the 15-day period described in 
subparagraph (B), the enterprise may com-
mence the new activity in accordance with sub-
paragraph (A). 
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‘‘(f) NO LIMITATION.—Nothing in this section may 
be construed to restrict— 
‘‘(1) the safety and soundness authority of the 
Director over all new and existing products or activi-
ties; or 
‘‘(2) the authority of the Director to review all 
new and existing products or activities to determine 
that such products or activities are consistent with 
the statutory mission of an enterprise.’’. 
SEC. 124. CONFORMING LOAN LIMITS. 
(a) FANNIE MAE.— 
(1) GENERAL LIMIT.—Section 302(b)(2) of the 
Federal National Mortgage Association Charter Act 
(12 U.S.C. 1717(b)(2)) is amended by striking the 
7th and 8th sentences and inserting the following 
new sentences: ‘‘Such limitations shall not exceed 
$417,000 for a mortgage secured by a single-family 
residence, $533,850 for a mortgage secured by a 2- 
family residence, $645,300 for a mortgage secured 
by a 3-family residence, and $801,950 for a mort-
gage secured by a 4-family residence, except that 
such maximum limitations shall be adjusted effective 
January 1 of each year beginning after the effective 
date of Federal Housing Finance Regulatory Reform 
Act of 2008, subject to the limitations in this para-
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105 
(1) in the section heading, by inserting ‘‘DUTY 
TO SERVE UNDERSERVED MARKETS AND’’ be-
fore ‘‘OTHER’’; 
(2) by striking subsection (b); 
(3) in subsection (a)— 
(A) in the matter preceding paragraph (1), 
by inserting ‘‘and to carry out the duty under 
subsection (a) of this section’’ before ‘‘, each 
enterprise shall’’; 
(B) in paragraph (3), by inserting ‘‘and’’ 
after the semicolon at the end; 
(C) in paragraph (4), by striking ‘‘; and’’ 
and inserting a period; 
(D) by striking paragraph (5); and 
(E) by redesignating such subsection as 
subsection (b); 
(4) by inserting before subsection (b) (as so re-
designated by paragraph (3)(E) of this subsection) 
the following new subsection: 
‘‘(a) DUTY TO SERVE UNDERSERVED MARKETS.— 
‘‘(1) DUTY.—In accordance with the purpose of 
the enterprises under section 301(3) of the Federal 
National Mortgage Association Charter Act (12 
U.S.C. 1716) and section 301(b)(3) of the Federal 
Home Loan Mortgage Corporation Act (12 U.S.C. 
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