I
106TH CONGRESS
2D SESSION
H. R. 3703
To consolidate and improve the regulation of the housing-related Government-
sponsored enterprises, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 29, 2000
Mr. BAKER (for himself and Mr. LEACH) introduced the following bill; which
was referred to the Committee on Banking and Financial Services
A BILL
To consolidate and improve the regulation of the housing-
related Government-sponsored enterprises, and for other
purposes.
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
‘‘Housing Finance Regulatory Improvement Act’’.
(b) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
Sec. 1. Short title and table of contents.
TITLE I—HOUSING FINANCE OVERSIGHT BOARD
Subtitle A—Improvement of Supervision
Sec. 101. Establishment of Board.
Sec. 102. Duties and authorities of Board.
Sec. 103. Public disclosure of information.
Sec. 104. Personnel.
Sec. 105. Assessments.
Sec. 106. Public disclosure of final orders and agreements.
Sec. 107. Limitation on subsequent employment.
Sec. 108. Regulations.
Sec. 109. Termination of authority of HUD.
Sec. 110. Approval of Board for new activities.
Sec. 111. Limitation on nonmission-related assets.
Sec. 112. Conforming loan limits.
Sec. 113. Definitions.
Sec. 114. Supervision of Federal home loan bank system.
Sec. 115. Amendments to title 5, United States Code.
Subtitle B—Reduction of Systemic Risk
Sec. 131. Annual review of enterprises by rating organizations.
Sec. 132. Annual reports.
Sec. 133. Risk-based capital test for enterprises.
Sec. 134. Effective date for supervisory actions.
Sec. 135. Appointment of receivers.
Sec. 136. Repeal of Treasury lines of credit.
Sec. 137. Board membership on Federal Financial Institutions Examination
Council.
Sec. 138. Elimination of super-lien for Federal home loan banks.
Sec. 139. Federal Home Loan Bank Finance Corporation.
Sec. 140. Capital treatment of private label mortgage-backed securities.
Sec. 141. Study of effects of GSE failure on depository institutions.
Subtitle C—General Provisions
Sec. 161. Conforming and technical amendments.
Sec. 162. Effective date.
TITLE II—TRANSFER OF FUNCTIONS, PERSONNEL, AND
PROPERTY
Sec. 201. Abolishment of OFHEO and Federal Housing Finance Board.
Sec. 202. Continuation and coordination of certain regulations.
Sec. 203. Transfer and rights of employees of abolished agencies.
Sec. 204. Transfer of property and facilities.
TITLE I—HOUSING FINANCE
OVERSIGHT BOARD
Subtitle A—Improvement of
Supervision
SEC. 101. ESTABLISHMENT OF BOARD.
(a) IN GENERAL.—Part 1 of Subtitle A of title XIII
of the Housing and Community Development Act of 1992
is amended by striking sections 1311 and 1312 (12 U.S.C.
4511, 4512) and inserting the following new sections:
‘‘SEC. 1311. ESTABLISHMENT OF HOUSING FINANCE OVER-
SIGHT BOARD.
‘‘(a) ESTABLISHMENT.—There is established the
Housing Finance Oversight Board, which shall succeed to
the authority of the Director of the Office of Federal
Housing Enterprise Oversight of the Department of Hous-
ing and Urban Development, the Federal Housing Fi-
nance Board, and the general regulatory and any other
authority of the Secretary of Housing and Urban Develop-
ment with respect to the enterprises (except as specifically
provided otherwise in this Act).
‘‘(b) STATUS.—The Board shall be an independent
agency in the executive branch of the Government.
‘‘SEC. 1312. MEMBERS.
‘‘(a) IN GENERAL.—Subject to subsection (d)(2), the
Board shall be composed of 5 members, as follows:
‘‘(1) The Secretary of Housing and Urban De-
velopment, or a designee of the Secretary who is an
officer of the Department of Housing and Urban
Development appointed to such office by the Presi-
dent, by and with the advice and consent of the Sen-
ate, who shall serve as a member of the Board with-
out additional compensation.
‘‘(2) The Secretary of the Treasury, or a des-
ignee of the Secretary who is an officer of the De-
partment of the Treasury appointed to such office
by the President, by and with the advice and consent
of the Senate, who shall serve as a member of the
Board without additional compensation.
‘‘(3) 3 citizens of the United States, appointed
by the President, by and with the advice and consent
of the Senate, each for a term of 6 years.
‘‘(b) REQUIREMENTS FOR MEMBERS.—
‘‘(1) QUALIFICATIONS
AND
NOMINATIONS.—
The members of the Board appointed pursuant to
subsection (a)(3) shall be from among persons with
extensive experience or training in housing finance,
financial institution regulation, or capital markets.
An appointed member shall not hold any other ap-
pointed office during his or her term as member.
Not more than 3 members of the Board shall be
members of the same political party. Nominations
pursuant to this paragraph shall be referred in the
Senate to the Committee on Banking, Housing, and
Urban Affairs.
‘‘(2) LIMITATIONS
ON
CONFLICTS
OF
INTER-
EST.—No individual who is a member of the Board
may—
‘‘(A) hold any office, position, or employ-
ment in any Federal home loan bank, enter-
prise, or member of any Federal home loan
bank (including any holding company of a
member) during the period that such individual
holds office as a member of the Board; or
‘‘(B) hold stock in any member of any
Federal home loan bank or in the holding com-
pany of any such member, or in any enterprise.
‘‘(3) INITIAL
TERMS.—Notwithstanding sub-
section (a)(3), of the members first appointed pursu-
ant to such subsection, one shall be appointed for a
term of 2 years and one shall be appointed for a
term of 4 years.
‘‘(4) FULL-TIME
STATUS.—The members ap-
pointed pursuant to subsection (a)(3) shall serve on
a full-time basis.
‘‘(c) CHAIRPERSON AND CHIEF EXECUTIVE OFFI-
CER.—
‘‘(1) DESIGNATION.—The President shall des-
ignate one of the members of the Board appointed
under subsection (a)(3) to be the Chairperson of the
Board.
‘‘(2) DUTIES.—The Chairperson shall—
‘‘(A) carry out policies directed by the
Board and, in doing so, shall act as spokes-
person for the Board and represent the Board
in its official relations with the Federal Govern-
ment; and
‘‘(B) act as chief executive officer of the
Board responsible for the day-to-day operations
and management of the Board and supervision
of its personnel, which shall include—
‘‘(i) responsibility for directing the im-
plementation of policies and regulations
adopted by the Board and the execution of
the administrative functions and duties of
the Board;
‘‘(ii) exercising all authorities of the
Board under subsections (a) through (e) of
section 1315 (relating to personnel); and
Acting Secretary for such Department shall act as
a member of the Board in place of the Secretary.’’.
(b) APPOINTMENT OF BOARD.—Notwithstanding sec-
tion 162 or any other provision of law, the President may,
at any time after the date of the enactment of this Act,
appoint individuals to serve as members of the Housing
Finance Oversight Board in accordance with the provi-
sions of the amendment made by subsection (a) of this
section.
(c) TRANSITION.—During the period that begins on
the effective date under section 162 of this Act and ends
upon the completion of the appointment and confirmation
of at least 2 members of the Board appointed under sec-
tion 1312(a)(3) of the Housing and Community Develop-
ment Act of 1992 (12 U.S.C. 4512(a)(3)), as amended
by subsection (a) of this section, the Secretary of Housing
and Urban Development and the Secretary of the Treas-
ury shall act for all purposes as, and with the full powers
of, the Housing Finance Oversight Board.
SEC. 102. DUTIES AND AUTHORITIES OF BOARD.
Section 1313 of the Housing and Community Devel-
opment Act of 1992 (12 U.S.C. 4513) is amended—
(1) by striking the section designation and sec-
tion heading and all that follows through the end of
subsection (c) and inserting the following:
‘‘SEC. 1313. DUTIES AND AUTHORITIES OF BOARD.
‘‘(a) DUTIES.—
‘‘(1) PRINCIPAL DUTIES.—The principal duties
of the Board shall be to ensure that the enterprises
and the Federal home loan banks—
‘‘(A) operate in a financially safe and
sound manner;
‘‘(B) carry out their missions through ac-
tivities that are authorized under, and con-
sistent with the purposes of, the provisions of
Federal law that charter such entities; and
‘‘(C) remain adequately capitalized.
‘‘(2) OTHER DUTIES.—To the extent consistent
with paragraph (1), the duty of the Board shall be
to exercise general supervisory and regulatory au-
thority over—
‘‘(A) the enterprises, in accordance with
this title, the Federal National Mortgage Asso-
ciation Charter Act, the Federal Home Loan
Mortgage Corporation Act, and any other provi-
sions of law; and
‘‘(B) the Federal home loan banks, in ac-
cordance with the Federal Home Loan Bank
Act and any other provisions of law.’’; and
(2) by redesignating subsections (d) and (e) as
subsections (b) and (c), respectively.
SEC. 103. PUBLIC DISCLOSURE OF INFORMATION.
Section 1314 of the Housing and Community Devel-
opment Act of 1992 (12 U.S.C. 4514) is amended—
(1) in the section heading by striking ‘‘BY EN-
TERPRISES’’ and inserting ‘‘AND INFORMATION’’;
and
(2) by adding at the end the following new sub-
section:
‘‘(c) PUBLIC DISCLOSURE OF INFORMATION.—The
Board shall, by regulation, require each enterprise and
Federal home loan bank to disclose to the public, on not
less than an annual basis, such financial, business, and
other information that the Board determines would be in
the public interest because the availability of such infor-
mation would increase the efficiency of the secondary
mortgage market or the housing finance system.’’.
SEC. 104. PERSONNEL.
Section 1315 of the Housing and Community Devel-
opment Act of 1992 (12 U.S.C. 4515) is amended—
(1) in subsection (a)—
(A) by striking ‘‘The’’ and inserting ‘‘Sub-
ject to title II of the Housing Finance Regu-
latory Improvement Act, the’’; and
(B) by adding at the end the following new
sentence: ‘‘Notwithstanding any other provision
of this section, in no event shall the Board dele-
gate any function to any employee, administra-
tive unit of any Federal home loan bank, or
joint office of the Federal Home Loan Bank
System.’’;
(2) by striking subsections (d) and (f); and
(3) by redesignating subsection (e) as sub-
section (d).
SEC. 105. ASSESSMENTS.
Section 1316 of the Housing and Community Devel-
opment Act of 1992 (12 U.S.C. 4516) is amended—
(1) in the first sentence of subsection (a), by
striking ‘‘, to the extent provided in appropriation
Acts,’’;
(2) in subsection (f)—
(A) by inserting after the second sentence
the following new sentence: ‘‘Receipts of the
Board derived from assessments levied upon the
Federal home loan banks pursuant to section
18(b) of the Federal Home Loan Bank Act and
from other sources (other than receipts from
the sale of consolidated Federal home loan bank
bonds and debentures issued under section 11
of such Act) shall be deposited in the Fund.’’;
and
(B) by striking the last sentence and in-
serting the following new sentence: ‘‘Notwith-
standing any other provision of law, any assess-
ments collected pursuant to this section or pur-
suant to section 18(b) of the Federal Home
Loan Bank Act and any amounts in the Fund
shall not be construed to be Government or
public funds or appropriated money, shall not
be subject to apportionment for purposes of
chapter 15 of title 31, United States Code, or
under any other authority, and shall be avail-
able without fiscal year limitation for carrying
out the responsibilities of the Board, including
any necessary administrative and nonadminis-
trative expenses of the Board in carrying out
the purposes of this title, the Federal National
Mortgage Association Charter Act, the Federal
Home Loan Mortgage Corporation Act, and the
Federal Home Loan Bank Act.’’; and
(3) in subsection (g)(3)—
(A) by striking ‘‘(A)’’; and
(B) by striking ‘‘, and (B)’’ and all that
follows through ‘‘Secretary’’.
SEC. 106. PUBLIC DISCLOSURE OF FINAL ORDERS AND
AGREEMENTS.
Section 1319C of the Housing and Community Devel-
opment Act of 1992 (12 U.S.C. 4522) is amended—
(1) in subsection (a)—
(A) in paragraph (1), by inserting ‘‘or the
Federal home loan banks, as the case may be’’
before the semicolon; and
(B) in paragraph (2), by inserting ‘‘or
under the authority of Board under the Federal
Home Loan Bank Act’’ after ‘‘subtitle C’’;
(2) in subsection (c), by inserting ‘‘or the Fed-
eral home loan banks’’ after ‘‘the enterprise’’; and
(3) in subsection (e), by inserting ‘‘or under the
authority of Board under the Federal Home Loan
Bank Act’’ before the period at the end.
SEC. 107. LIMITATION ON SUBSEQUENT EMPLOYMENT.
Section 1319D of the Housing and Community De-
velopment Act of 1992 (12 U.S.C. 4523) is amended by
inserting ‘‘or any Federal home loan bank’’ after ‘‘an en-
terprise’’.
SEC. 108. REGULATIONS.
Section 1319G of the Housing and Community De-
velopment Act of 1992 (12 U.S.C. 4526) is amended—
(1) by striking subsection (a) and inserting the
following new subsection:
‘‘(a) AUTHORITY.—The Board shall issue any regula-
tions and orders necessary to carry out the duties of the
Board and to carry out this title and the responsibilities
of the Board under the Federal National Mortgage Asso-
ciation Charter Act, the Federal Home Loan Mortgage
Corporation Act, and the Federal Home Loan Bank Act
and to ensure that the purposes of this title and such Acts
are accomplished.’’; and
(2) in subsection (c), by striking ‘‘Committee on
Banking, Finance and Urban Affairs’’ and inserting
‘‘Committee on Banking and Financial Services’’.
SEC. 109. TERMINATION OF AUTHORITY OF HUD.
(a) IN GENERAL.—Part 2 of subtitle A of title XIII
of the Housing and Community Development Act of 1992
is amended—
(1) by striking the heading for the part and the
heading for subpart A and inserting the following:
‘‘PART 2—NEW ACTIVITIES, HOUSING
INFORMATION, AND HOUSING GOALS
‘‘Subpart A—New Activities and Housing
Information’’;
and
(2) by striking section 1321 (12 U.S.C. 4541).
(b) RETENTION OF FAIR HOUSING RESPONSIBIL-
ITIES.—Section 1325 of the Housing and Community De-
velopment Act of 1992 (12 U.S.C. 4545) is amended, in
the matter preceding paragraph (1), by inserting ‘‘of
Housing and Urban Development’’ after ‘‘Secretary’’.
SEC. 110. APPROVAL OF BOARD FOR NEW ACTIVITIES.
(a) IN GENERAL.—Section 1322 of the Housing and
Community Development Act of 1992 (12 U.S.C. 4542)
is amended to read as follows:
‘‘SEC. 1322. PRIOR APPROVAL AUTHORITY FOR NEW ACTIVI-
TIES.
‘‘(a) AUTHORITY.—The Board shall have the author-
ity to approve all new activities, and to review all ongoing
activities, of an enterprise or a Federal home loan bank
to ensure compliance with the Federal National Mortgage
Association Charter Act, the Federal Home Loan Mort-
gage Corporation Act, or the Federal Home Loan Bank
Act, as applicable.
‘‘(b) REQUIREMENT FOR PRIOR APPROVAL.—An en-
terprise or Federal home loan bank may not commence
any new activity before obtaining the approval of the
Board for the new activity, in accordance with this section.
‘‘(c) STANDARD FOR APPROVAL.—The Board may
approve a new activity of an enterprise or a Federal home
loan bank only if—
‘‘(1) the new activity is authorized—
‘‘(A) with respect to the Federal National
Mortgage Association, under the Federal Na-
tional Mortgage Association Charter Act or
other Federal law;
‘‘(B) with respect to the Federal Home
Loan Mortgage Corporation, under the Federal
Home Loan Mortgage Corporation Act or other
Federal law; and
‘‘(C) with respect to a Federal home loan
bank, under the Federal Home Loan Bank Act
or other Federal law;
‘‘(2) the Board determines that the enterprise
or Federal home loan bank can conduct the new ac-
tivity in a safe and sound manner; and
‘‘(3) the Board determines that the new activity
is in the public interest.
‘‘(d) PROCEDURE FOR APPROVAL.—
‘‘(1) REQUEST AND PUBLICATION.—To obtain
the approval of the Board for purposes of subsection
(b), an enterprise or Federal home loan bank pro-
posing to implement a new activity shall submit to
the Board a written request for approval in such
form as the Board may require. Promptly following
receipt of such a request, the Board shall provide for
publication of a notice in the Federal Register de-
scribing the request and providing a period after
publication of not less than 30 days for interested
parties to submit to the Board written comments re-
garding the request.
‘‘(2) BOARD
DETERMINATION.—The Board
shall review the request, taking into consideration
any relevant matter during the comment period, and
shall approve or deny the request not later than the
expiration of the 90-day period beginning upon the
publication of the notice regarding the request in the
Federal Register. If the Board requests additional
information from an enterprise or Federal home loan
bank regarding the new activity, the Board may ex-
tend the review period under this paragraph for an
additional 30 days.
‘‘(3) DENIAL OF REQUEST.—If the Board de-
nies a request for commencement of a new activity,
the affected enterprise or Federal home loan bank
may seek judicial review of the decision pursuant to
chapter 7 of title 5, United States Code.’’.
(b) 
DEFINITION
OF
NEW
ACTIVITY.—Section
1303(13) of the Housing and Community Development
Act of 1992 (12 U.S.C. 4502(13)) is amended to read as
follows:
‘‘(13) NEW ACTIVITY.—
‘‘(A) ENTERPRISES.—The term ‘new activ-
ity’ means, with respect to the enterprises, any
program, activity, or business process providing
financing or other services related to the origi-
nation of conventional mortgages (including
purchasing, servicing, selling, and lending on
the security of such mortgages) that—
‘‘(i) is significantly different from pro-
grams, activities, or business processes
that (I) have been approved under this
Act, or (II) that were approved or engaged
in by an enterprise before the date of the
enactment of the Housing and Community
Development Act of 1992; or
‘‘(ii) represents an expansion, in
terms of the dollar volume or number of
mortgages or securities involved, of pro-
grams above limits expressly contained in
any prior approval.
‘‘(B) FEDERAL HOME LOAN BANKS.—The
term ‘new activity’ means, with respect to a
Federal home loan bank, any program, activity,
or business process that—
‘‘(i) has not previously been approved
(I) under this Act, or (II) if commenced
before the effective date under section 162
of the Housing Finance Regulatory Im-
provement Act, is not explicitly authorized
under the Federal Home Loan Bank Act
or was not explicitly approved by the Fed-
eral Housing Finance Board; or
‘‘(ii) would result in a significant
change in the revenue of the bank or rep-
resents an expansion in the investment in,
volume, or scope of a program, activity, or
business process above limits expressly
contained in any prior approval.’’.
(d) CONFORMING AMENDMENTS.—
(1) FANNIE
MAE.—Section 302(b)(6) of the
Federal National Mortgage Association Charter Act
(12 U.S.C. 1717(b)(6)) is amended—
(A) by striking ‘‘program’’ and inserting
‘‘activity’’; and
(B) by striking ‘‘Secretary’’ and inserting
‘‘Housing Finance Oversight Board’’.
(2) FREDDIE MAC.—Section 305(c) of the Fed-
eral Home Loan Mortgage Corporation Act (12
U.S.C. 1454(c)) is amended—
(A) by striking ‘‘program’’ and inserting
‘‘activity’’; and
(B) by striking ‘‘Secretary’’ and inserting
‘‘Housing Finance Oversight Board’’.
(3) 1992 ACT.—Section 1369C(a)(4) of the
Housing and Community Development Act of 1992
(12 U.S.C. 4622(a)(4)) is amended by striking ‘‘pro-
grams’’ and inserting ‘‘activities’’.
SEC. 111. LIMITATION ON NONMISSION-RELATED ASSETS.
(a) ENTERPRISES.—Subtitle B of title XIII of the
Housing and Community Development 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 Enterprises, Special En-
forcement Powers, and Limita-
tion on Nonmission-Related As-
sets’’;
and
(2) by adding at the end the following new sec-
tion:
‘‘SEC. 1369E. LIMITATION ON NONMISSION-RELATED AS-
SETS.
‘‘The Board shall, by regulation, limit the nonmis-
sion-related assets that an enterprise may hold at any
time. The Board shall define the term ‘nonmission-related
asset’ for purposes of this section.’’.
(b) FEDERAL HOME LOAN BANKS.—Section 11(h) of
the Federal Home Loan Bank Act (12 U.S.C. 1431(h))
is amended—
(1) by inserting ‘‘(1)’’ after ‘‘(h)’’; and
(2) by adding at the end the following new
paragraph:
‘‘(2) The Board shall, by regulation, limit the non-
mission-related assets that a Federal home loan bank may
hold at any time. The Board shall define the term ‘non-
mission-related asset’ for purposes of this section.’’.
SEC. 112. CONFORMING LOAN LIMITS.
(a) FANNIE MAE.—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 sen-
tences and inserting the following new sentences: ‘‘Such
limitations shall not exceed $252,700 for a mortgage se-
cured by a single-family residence, $323,400 for a mort-
gage secured by a 2-family residence, $390,900 for a
mortgage secured by a 3-family residence, and $485,800
for a mortgage secured by a 4-family residence, except
that such maximum limitations shall be adjusted effective
January 1 of each year beginning with 2001, subject to
the limitations in this paragraph. Each adjustment shall
be made by adding to each such amount (as it may have
been previously adjusted) a percentage thereof equal to the
percentage increase during the 12-month period ending
with the previous October in the housing price index of
the Housing Finance Oversight Board established under
section 1321 of the Housing and Community Development
Act of 1992 (12 U.S.C. 4541). If, at the end of such 12-
month period, the housing price index is not at a level
higher than the level of such index at the beginning of
such period, no such adjustment may be made for the Jan-
uary 1 first occurring thereafter.’’.
(b) FREDDIE MAC.—Section 305(a)(2) of the Fed-
eral National Mortgage Association Charter Act (12
U.S.C. 1454(a)(2)) is amended by striking the 6th and
7th sentences and inserting the following new sentences:
‘‘Such limitations shall not exceed $252,700 for a mort-
gage secured by a single-family residence, $323,400 for
a mortgage secured by a 2-family residence, $390,900 for
a mortgage secured by a 3-family residence, and $485,800
for a mortgage secured by a 4-family residence, except
that such maximum limitations shall be adjusted effective
January 1 of each year beginning with 2001, subject to
the limitations in this paragraph. Each adjustment shall
be made by adding to each such amount (as it may have
been previously adjusted) a percentage thereof equal to the
percentage increase during the 12-month period ending
with the previous October in the housing price index of
the Housing Finance Oversight Board established under
section 1321 of the Housing and Community Development
Act of 1992 (12 U.S.C. 4541). If, at the end of such 12-
month period, the housing price index is not at a level
higher than the level of such index at the beginning of
such period, no such adjustment may be made for the Jan-
uary 1 first occurring thereafter.’’.
(c) HOUSING PRICE INDEX.—Subpart A of Part 2
of subtitle A of title XIII of the Housing and Community
Development Act of 1992 is amended by inserting before
section 1322 (as amended by the preceding provisions of
this Act) the following new section:
‘‘SEC. 1321. ESTABLISHMENT OF HOUSING PRICE INDEX.
‘‘The Board shall establish a housing price index for
use for adjusting the conforming loan limitations of the
enterprises, which shall be a successor index to the na-
tional average one-family house price determined by the
monthly survey of all major lenders conducted by the Fed-
eral Housing Finance Board and the House Price Index
of the Office of Federal Housing Enterprise Oversight of
the Department of Housing and Urban Development.’’.
SEC. 113. DEFINITIONS.
Section 1303 of the Housing and Community Devel-
opment Act of 1992 (12 U.S.C. 4502) is amended—
(1) by striking paragraphs (5), (14), and (15);
(2) by redesignating paragraphs (2), (3), (4) as
paragraphs (3), (4), and (5), respectively;
(3) by redesignating paragraphs (16) through
(19) as paragraphs (14) through (17), respectively;
and
(4) by inserting after paragraph (1) the fol-
lowing new paragraph:
‘‘(2) BOARD.—The term ‘Board’ means the
Housing Finance Oversight Board established under
section 1311.’’.
SEC. 114. SUPERVISION OF FEDERAL HOME LOAN BANK
SYSTEM.
(a) FEDERAL HOME LOAN BANK ACT.—The Federal
Home Loan Bank Act is amended—
(1) in section 2 (12 U.S.C. 1422), by striking
paragraph (1) and inserting the following new para-
graph:
‘‘(1) BOARD.—The term ‘Board’ means the
Housing Finance Oversight Board established under
section 1311 of the Housing and Community Devel-
opment Act of 1992.’’;
(2) by striking section 2A (12 U.S.C. 1422a)
and inserting the following new section:
‘‘SEC. 2A. SUPERVISION AND REGULATION OF BANKS.
‘‘The Federal home loan banks shall, to the extent
provided in title XIII of the Housing and Community De-
velopment Act of 1992 (12 U.S.C. 4501 et seq.) and this
Act, be subject to the supervision and regulation of the
Housing Finance Oversight Board.’’;
(3) in section 2B (12 U.S.C. 1422b)—
(A) in the section heading, by striking
‘‘POWERS AND DUTIES’’ and inserting ‘‘EN-
FORCEMENT AUTHORITY OF BOARD’’;
(B) in subsection (a)—
(i) by striking the subsection designa-
tion and heading and all that follows
through the end of paragraph (1) and in-
serting the following:
‘‘The Board shall have the following powers:’’;
(ii) by striking paragraphs (3) and
(4); and
(ii) by redesignating paragraphs (2),
(5), (6), and (7) as paragraphs (1), (2),
(3), and (4), respectively; and
(C) by striking subsections (b), (c), and
(d);
(4) in section 21 (12 U.S.C. 1441)—
(A) in subsection (b), in the heading for
paragraph (8), by striking ‘‘FEDERAL HOUSING
FINANCE BOARD’’ and inserting ‘‘HOUSING FI-
NANCE OVERSIGHT BOARD’’; and
(B) in subsection (i), in the heading for
paragraph (2), by striking ‘‘FEDERAL HOUSING
FINANCE BOARD’’ and inserting ‘‘HOUSING FI-
NANCE OVERSIGHT BOARD’’;
(5) by striking ‘‘the Finance Board’’ each place
it appears and inserting ‘‘the Board’’; and
(6) by striking ‘‘Federal Housing Finance
Board’’ each place it appears and inserting ‘‘Board’’.
(b) FINANCING CORPORATION.—The amendments
made by this title shall not affect the appointment or term
of any member, or of the chairperson, of the Directorate
of the Financing Corporation who is serving on the date
such amendments take effect.
(c) REFERENCES TO FHFB.—Any reference in any
Federal law enacted before the date of the enactment of
this Act to the Federal Housing Finance Board shall be
treated as referring to the Housing Finance Oversight
Board.
(d) TECHNICAL AMENDMENT.—Section 111 of Pub-
lic Law 93–495 (12 U.S.C. 250) is amended by striking
‘‘Federal Housing Finance Board’’ and inserting ‘‘Hous-
ing Finance Oversight Board’’.
SEC. 115. AMENDMENTS TO TITLE 5, UNITED STATES CODE.
(a) EXECUTIVE
SCHEDULE
PAY
RATES.—Sub-
chapter II of chapter 53 of title 5, United States Code
is amended—
(1) in section 5313, by striking the item relat-
ing to the Director of the Office of Federal Housing
Enterprise Oversight, Department of Housing and
Urban Development;
(2) in section 5314, by striking the item relat-
ing to the Chairperson of the Federal Housing Fi-
nance Board and inserting the following new item:
‘‘Chairperson of the Housing Finance Oversight
Board.’’; and
(3) in section 5315, by striking the item relat-
ing to the Directors, Federal Housing Finance
Board and inserting the following new item:
‘‘Members, 
Housing 
Finance 
Oversight
Board.’’.
(b) 
DEFINITION
OF
AGENCY.—Section
3132(a)(1)(D) of title 5, United States Code, is
amended—
(1) by striking ‘‘the Federal Housing Finance
Board,’’; and
(2) by striking ‘‘the Office of Federal Housing
Enterprise Oversight of the Department of Housing
and Urban Development’’ and inserting ‘‘the Hous-
ing Finance Oversight Board’’.
Subtitle B—Reduction of Systemic
Risk
SEC. 131. ANNUAL REVIEW OF ENTERPRISES BY RATING
ORGANIZATIONS.
(a) IN GENERAL.—Section 1319 of the Housing and
Community Development Act of 1992 (12 U.S.C. 4519)
is amended—
(1) in the section heading—
(A) by striking ‘‘AUTHORITY TO PRO-
VIDE FOR’’; and
(B) by striking ‘‘ORGANIZATION’’ and in-
serting ‘‘ORGANIZATIONS;
(2) by inserting ‘‘(a) AUTHORITY TO PROVIDE
FOR REVIEWS.—’’ before ‘‘The’’; and
(3) by adding at the end the following new sub-
section:
‘‘(b) ANNUAL DETERMINATION
OF CREDIT RAT-
ING.—
‘‘(1) IN GENERAL.—For each year, the Board
shall provide for 2 entities effectively recognized by
the Division of Market Regulation of the Securities
and Exchange Commission as nationally recognized
statistical rating organizations for the purposes of
the capital rules for broker dealers, each to conduct
an assessment of the financial condition of each en-
terprise, each Federal home loan bank, and the Fed-
eral home loan bank system, for the purpose of de-
termining the level of risk that the enterprise or
bank will be unable to meet its obligations, taking
into consideration the legal status evidenced by the
statements required under—
‘‘(A) the penultimate sentence of section
304(b) of the Federal National Mortgage Asso-
ciation Charter Act (12 U.S.C. 1719(b));
‘‘(B) the last sentence of section 304(d) of
the Federal National Mortgage Association
Charter Act (12 U.S.C. 1719(d));
‘‘(C) the penultimate sentence of section
304(e) of the Federal National Mortgage Asso-
ciation Charter Act (12 U.S.C. 1719(e));
‘‘(D) section 306(h)(2) of the Federal
Home Loan Mortgage Corporation Act (12
U.S.C. 1455(h)(2)); and
‘‘(E) the last sentence of section 15 of the
Federal Home Loan Bank Act (12 U.S.C.
1435).
‘‘(2) CREDIT
RATING.—The assessment shall
include assigning a credit rating for each enterprise,
each bank, and the Federal home loan bank system
using a scale similar to that used by such organiza-
tion with respect to obligations of other financial in-
stitutions, and shall include the report regarding
such assessment and the rating in the report of the
Board under section 1319B(a).’’.
(b) COSTS OF CREDIT RATINGS.—The first sentence
of section 1316(a) of the Housing and Community Devel-
opment Act of 1992 (12 U.S.C. 4516(a)) is amended by
inserting ‘‘and the expenses of obtaining any reviews and
credit assessments under subsections (a) and (b) section
1319’’ before the period at the end.
SEC. 132. ANNUAL REPORTS.
Section 1319B of the Housing and Community De-
velopment Act of 1992 (12 U.S.C. 4521) is amended—
(1) in the section heading, by striking ‘‘BY DI-
RECTOR’’;
(2) in subsection (a)—
(A) in paragraph (1), by inserting ‘‘and
the actions of the Board under the Federal
Home Loan Bank Act with respect to the Fed-
eral home loan banks’’ before the semicolon;
(B) in paragraph (2)—
(i) by inserting ‘‘, each Federal home
loan bank, and the Federal home loan
bank system’’ after ‘‘each enterprise’’; and
(ii) by inserting ‘‘and examinations of
the Federal home loan banks under section
20 of the Federal Home Loan Bank Act’’
before the semicolon at the end;
(C) in paragraph (3), by striking ‘‘; and’’
and inserting ‘‘and the Federal home loan
banks;’’;
(D) in paragraph (4), by striking the pe-
riod at the end and inserting a ‘‘; and’’; and
(E) by adding at the end the following new
paragraph:
‘‘(5) the report from each statistical rating or-
ganization providing a credit assessment and rating
pursuant to section 1319(b).’’; and
(3) in subsection (b), by adding after and below
paragraph (5) the following new sentence:
‘‘The report shall also include information describing, for
the previous calendar year, any enforcement actions taken
by the Board with respect to the Federal home loan
banks.’’.
SEC. 133. RISK-BASED CAPITAL TEST FOR ENTERPRISES.
Section 1361 of the Housing and Community Devel-
opment Act of 1992 (12 U.S.C. 4611) is amended—
(1) in subsection (a)(2)(A), by inserting ‘‘or
change in such other manner as the Board considers
appropriate,’’ after ‘‘subparagraph (C),’’;
(2) in subsection (b)(1), by adding at the end
the following: ‘‘Notwithstanding subsection (a), the
Board may, in the sole discretion of the Board,
make any assumptions that the Board considers ap-
propriate regarding interest rates, home prices, and
new business.’’; and
(3) in subsection (c)(2), by inserting ‘‘or such
other greater percentage as the Board considers ap-
propriate’’ before the period at the end.
SEC. 134. EFFECTIVE DATE FOR SUPERVISORY ACTIONS.
Section 1365(c) of the Housing and Community De-
velopment Act of 1992 (12 U.S.C. 4615(c)) is amended
by striking ‘‘1-year’’ and inserting ‘‘6-month’’.
SEC. 135. APPOINTMENT OF RECEIVERS.
(a) ENTERPRISES.—Subtitle B of title XIII of the
Housing and Community Development Act of 1992 (12
U.S.C. 4611 et seq.) is amended by adding at the end
the following new section:
‘‘SEC. 1369E. APPOINTMENT OF RECEIVERS.
‘‘(a) APPOINTMENT.—
‘‘(1) AUTHORITY.—Upon a determination, and
notice under section 1368(d), that an enterprise is
critically undercapitalized and a determination that
the enterprise meets such other conditions for taking
action pursuant to this subsection as the Board shall
by regulation establish, the Board may, notwith-
standing section 1367(a)(1), appoint a receiver for
the enterprise in accordance with this section and in
lieu of appointment of a conservator pursuant to
section 1367. If the Board takes action pursuant to
this subsection, the Board shall appoint the receiver
not later than 30 days after providing notice under
paragraph (2) of this subsection.
‘‘(2) NOTICE.—Upon making a determination
under paragraph (1) to appoint a receiver for an en-
terprise, the Board shall provide written notice to
the enterprise, the Committee on Banking and Fi-
nancial Services of the House of Representatives,
and the Committee on Banking, Housing, and
Urban Affairs of the Senate—
‘‘(A) that a receiver will be appointed for
the enterprise;
‘‘(B) stating the reasons for the appoint-
ment of the receiver; and
‘‘(C) identifying the person or govern-
mental agency that the Board intends to ap-
point as receiver.
‘‘(3) QUALIFICATIONS.—The receiver shall be—
‘‘(A) the Board or any other governmental
agency; or
‘‘(B) any person that—
‘‘(i) has no claim against, or financial
interest in, the enterprise or other basis for
a conflict of interest; and
‘‘(ii) has the financial and manage-
ment expertise necessary to carry out the
duties under subsection (c).
‘‘(b) JUDICIAL REVIEW.—The provisions of section
1369(b) shall apply to the appointment of a receiver pur-
suant to this section to the same extent that such provi-
sions apply to the appointment of a conservator pursuant
to this subtitle.
‘‘(c) DUTIES.—A receiver appointed pursuant to this
section shall be appointed for the purpose, and shall have
the duty, of liquidating or winding up the affairs of the
enterprise, in accordance with such regulations as the
Board may issue.
‘‘(d) REPLACEMENT, POWERS, LIABILITY PROTEC-
TION.—The provisions of sections 1369(c) and (d),
1369A, and 1369B shall apply to a receiver appointed
pursuant to this section to the same extent that such pro-
visions apply to a conservator appointed pursuant to this
subtitle. In addition to any powers under section 1369A,
a receiver appointed pursuant to this section shall have
such powers with respect to an enterprise, as the Board
may by regulation provide, that the Federal Deposit In-
surance Corporation has under section 11 of the Federal
Deposit Insurance Act (12 U.S.C. 1821) with respect to
a insured depository institution when acting as a receiver
under such section.’’.
(b) FEDERAL HOME LOAN BANKS.—Section 6 of the
Federal Home Loan Bank Act (12 U.S.C. 1426) is
amended by adding at the end the following new sub-
section:
‘‘(i) APPOINTMENT OF RECEIVERS.—
‘‘(1) APPOINTMENT.—
‘‘(A) AUTHORITY.—Upon a determination
by the Board that a Federal home loan bank (i)
is not in compliance with the leverage require-
ment established specified in subsection (a)(2),
(ii) is not in compliance with the risk-based
capital requirement established pursuant to
subsection (a)(3), and (iii) meets such other
conditions for taking action pursuant to this
paragraph as the Board shall by regulation es-
tablish, the Board may appoint a receiver for
the bank in accordance with this subsection. If
the Board takes action pursuant to this para-
graph, the Board shall appoint the receiver not
later than 30 days after providing notice under
subparagraph (B).
‘‘(B) NOTICE.—Upon making a determina-
tion under subparagraph (A) to appoint a re-
ceiver for a Federal home loan bank, the Board
shall provide written notice to the bank, the
Committee on Banking and Financial Services
of the House of Representatives, and the Com-
mittee on Banking, Housing, and Urban Affairs
of the Senate—
‘‘(i) that a receiver will be appointed
for the bank;
‘‘(ii) stating the reasons for the ap-
pointment of the receiver; and
‘‘(iii) identifying the person or govern-
mental agency that the Board intends to
appoint as receiver.
‘‘(C) QUALIFICATIONS.—The receiver shall
be—
‘‘(i) the Board or any other govern-
mental agency; or
‘‘(ii) any person that—
‘‘(I) has no claim against, or fi-
nancial interest in, the bank or other
basis for a conflict of interest; and
‘‘(II) has the financial and man-
agement expertise necessary to carry
out the duties under paragraph (3).
‘‘(2) JUDICIAL REVIEW.—The provisions of sec-
tion 1369(b) of the Housing and Community Devel-
opment Act of 1992 (12 U.S.C. 4619(b)) shall apply
to the appointment of a receiver pursuant to this
subsection for a Federal home loan bank to the
same extent that such provisions apply to the ap-
pointment of a conservator pursuant to subtitle B of
title XIII of such Act (12 U.S.C. 4611 et seq.) for
an enterprise.
‘‘(3) DUTIES.—A receiver appointed pursuant
to this subsection shall be appointed for the purpose,
and shall have the duty, of liquidating or winding up
the affairs of the Federal home loan bank, in accord-
ance with such regulations as the Board may issue.
‘‘(4) REPLACEMENT, POWERS, LIABILITY PRO-
TECTION.—The provisions of sections 1369(c) and
(d), 1369A, and 1369B of the Housing and Commu-
nity Development Act of 1992 (12 U.S.C. 4619,
4620, 4621) shall apply to a receiver appointed pur-
suant to this subsection for a Federal home loan
bank to the same extent that such provisions apply
to a conservator appointed pursuant to subtitle B of
title XIII of such Act for an enterprise. In addition
to any powers pursuant to section 1369A, a receiver
appointed pursuant to this subsection shall have
such powers with respect to a Federal home loan
bank, as the Board may by regulation provide, that
the Federal Deposit Insurance Corporation has
under section 11 of the Federal Deposit Insurance
Act (12 U.S.C. 1821) with respect to a insured de-
pository institution when acting as a receiver under
such section.’’.
SEC. 136. REPEAL OF TREASURY LINES OF CREDIT.
(a) FANNIE MAE.—Section 304 of the Federal Na-
tional Mortgage Association Charter Act (12 U.S.C. 1719)
is amended by striking subsection (c).
(b) FREDDIE MAC.—Section 306 of the Federal
Home Loan Mortgage Corporation Act (12 U.S.C. 1455)
is amended by striking subsection (c).
(c) FEDERAL HOME LOAN BANKS.—Section 11 of
the Federal Home Loan Bank Act (12 U.S.C. 1431) is
amended by striking subsection (i).
SEC. 137. BOARD MEMBERSHIP ON FEDERAL FINANCIAL IN-
STITUTIONS EXAMINATION COUNCIL.
The Federal Financial Institutions Examination
Council Act of 1978 is amended—
(1) in section 1002 (12 U.S.C. 3301) by strik-
ing ‘‘the Federal Home Loan Bank Board, and the
National Credit Union Administration’’ and insert-
ing ‘‘the Office of Thrift Supervision, the National
Credit Union Administration, and the Housing Fi-
nance Oversight Board’’;
(2) in section 1003 (12 U.S.C. 3302)—
(A) in paragraph (1), by striking ‘‘and the
National Credit Union Administration’’ and in-
serting ‘‘the National Credit Union Administra-
tion, and the Housing Finance Oversight
Board’’; and
(B) in paragraph (3), by striking ‘‘or a
credit union’’ and inserting ‘‘a credit union, or
a Government-sponsored enterprise that is sub-
ject to the regulation of the Housing Finance
Oversight Board’’; and
(3) in section 1004(a) (12 U.S.C. 3303(a))—
‘‘(1) ISSUANCE OF EQUAL AMOUNT TO EACH
BANK.—The Corporation shall issue to each Bank
100 shares of voting capital stock, with a par value
of $100 per share.
‘‘(2) RESTRICTED
TRANSFERABILITY.—Stock
issued under paragraph (1) may be owned and held
only by the Federal home loan banks.
‘‘(3) MERGER.—Stock issued under paragraph
(1) shall be redeemable or transferable at par in the
event of a merger or consolidation pursuant to sec-
tion 26.
‘‘(4) 
PAYMENT
UPON
ISSUANCE.—Upon
issuance of any share of stock under this subsection
to any Federal home loan bank, the Bank shall pay
to the Corporation the total amount due for such
stock.
‘‘(5) DISTRIBUTION REQUIREMENT.—The total
amount of outstanding stock of the Corporation
shall, at all times, be distributed equally among all
of the Federal home loan banks, and the board of
directors of the Corporation shall adopt procedures
from time to time to implement this paragraph.
‘‘(e) STATUS.—Except to the extent that it would
conflict with any provision of this section, or that the con-
text of this Act otherwise requires, the Corporation shall
and the effects on depository institutions that would result
from such failures. The study shall determine—
(1) the extent of equity and debt of, and, if ap-
plicable, mortgage-backed securities issued by, each
of the Government-sponsored enterprises that is held
by depository institutions;
(2) the likely implications to depository institu-
tions arising from such holdings if any Government-
sponsored enterprise fails to meet risk-based capital
requirements established by law, is more severely
undercapitalized, or defaults on its financial obliga-
tions; and
(3) the effects on the financial exposure of de-
pository institutions to Government-sponsored enter-
prises from applying restrictions on loans to a single
borrower to depository institutions.
(c) DEFINITIONS.—For purposes of this section:
(1) DEPOSITORY INSTITUTION.—The term ‘‘de-
pository institution’’ has the meaning given such
term in section 19(b)(1)(A) of the Federal Reserve
Act (12 U.S.C. 461(b)(1)(A)).
(2) GOVERNMENT-SPONSORED
ENTERPRISE.—
The term ‘‘Government-sponsored enterprise’’ means
the Federal National Mortgage Association, the Fed-
eral Home Loan Mortgage Corporation, any of the
Federal home loan banks, and the Federal home
loan bank system.
Subtitle C—General Provisions
SEC. 161. CONFORMING AND TECHNICAL AMENDMENTS.
(a) AMENDMENTS TO 1992 ACT.—Title XIII of the
Housing and Community Development Act of 1992 (12
U.S.C. 4501 et seq.), as amended by the preceding provi-
sions of this Act, is further amended—
(1) in section 1313 (12 U.S.C. 4513(e)), in
subsection (c) (as so redesignated by the preceding
provisions of this Act), by striking ‘‘the Secretary
or’’;
(2) in the subsection heading for section
1315(a) (12 U.S.C. 4515(a)), by striking ‘‘OFFICE
PERSONNEL’’ and inserting ‘‘IN GENERAL’’;
(3) in section 1316(g) (12 U.S.C. 4516(g)), by
striking ‘‘the Secretary and’’ each place it appears;
(4) in section 1319F (12 U.S.C. 4525), by
striking ‘‘Code’’ and all that follows through ‘‘agen-
cies’’ and inserting ‘‘Code, the Board shall be con-
sidered an agency’’;
(5) in the section heading for section 1328, by
striking ‘‘BY
SECRETARY’’ and inserting ‘‘BY
BOARD’’;
(6) by striking sections 1354, 1355, and 1356;