and the additional requirements under subsection 
(a)(2). 
‘‘(2) COMPLIANCE.—An enterprise shall be con-
sidered to be in compliance with the goal described 
under subsection (a) for a year only if the multi-
family mortgage purchases of the enterprise meet or 
exceed the goal for the year established under sub-
section (a). 
‘‘(e) CONSIDERATION OF UNITS IN SINGLE-FAMILY 
RENTAL HOUSING.—In establishing the goal under this 
section, the Director may take into consideration the num-
ber of housing units financed by any mortgage purchased 
by an enterprise on single-family rental housing that is 
not owner-occupied. 
‘‘(f) REMOVING CREDIT.—The Director shall sub-
tract from the units or mortgages counted toward the goal 
established under this section in a current year any units 
or mortgages credited toward such goal in a prior year 
if an enterprise requires a lender to repurchase, or reim-
burse for losses, or indemnify the enterprise against poten-
tial losses on such units or mortgages. 
‘‘(g) NOTICE OF DETERMINATION AND ENTERPRISE 
COMMENT.— 
‘‘(1) NOTICE.—Within 30 days of making a de-
termination under subsection (d) regarding compli-
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100 
ance of an enterprise for a year with the housing 
goal established under this section and before any 
public disclosure thereof, the Director shall provide 
notice of the determination to the enterprise, which 
shall include an analysis and comparison, by the Di-
rector, of the performance of the enterprise for the 
year and the goal for the year under subsection (a). 
‘‘(2) COMMENT
PERIOD.—The Director shall 
provide each enterprise and the public an oppor-
tunity to comment on the determination during the 
30-day period beginning upon receipt by the enter-
prise of the notice.’’. 
(c) 
CONFORMING
AMENDMENTS.—The 
Federal 
Housing Enterprises Financial Safety and Soundness Act 
of 1992 is amended— 
(1) in section 1335(a) (12 U.S.C. 4565(a)), in 
the matter preceding paragraph (1), by striking 
‘‘low- and moderate-income housing goal’’ and all 
that follows through ‘‘section 1334’’ and inserting 
‘‘housing goals established under this subpart’’; and 
(2) 
in 
section 
1336(a)(1) 
(12 
U.S.C. 
4566(a)(1)), by striking ‘‘sections 1332, 1333, and 
1334,’’ and inserting ‘‘this subpart’’. 
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(d) DEFINITIONS.—Section 1303 of the Federal 
Housing Enterprises Financial Safety and Soundness Act 
of 1992 (12 U.S.C. 4502) is amended— 
(1) by striking paragraph (24), as so designated 
by section 2 of this Act, and inserting the following: 
‘‘(24) VERY LOW-INCOME.—The term ‘very low- 
income’ means— 
‘‘(A) in the case of owner-occupied units, 
families having incomes not greater than 50 
percent of the area median income; and 
‘‘(B) in the case of rental units, families 
having incomes not greater than 50 percent of 
the area median income, with adjustments for 
smaller and larger families, as determined by 
the Director.’’; and 
(2) by adding at the end the following: 
‘‘(26) CONFORMING
MORTGAGE.—The term 
‘conforming mortgage’ means, with respect to an en-
terprise, a conventional mortgage having an original 
principal obligation that does not exceed the applica-
ble dollar limitation, in effect at the time of such 
origination, under— 
‘‘(A) section 302(b)(2) of the Federal Na-
tional Mortgage Association Charter Act; or 
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102 
‘‘(B) section 305(a)(2) of the Federal 
Home Loan Mortgage Corporation Act. 
‘‘(27) EXTREMELY
LOW-INCOME.—The term 
‘extremely low-income’ means— 
‘‘(A) in the case of owner-occupied units, 
income not in excess of 30 percent of the area 
median income; and 
‘‘(B) in the case of rental units, income 
not in excess of 30 percent of the area median 
income, with adjustments for smaller and larger 
families, as determined by the Director. 
‘‘(28) LOW-INCOME AREA.—The term ‘low-in-
come area’ means a census tract or block numbering 
area in which the median income does not exceed 80 
percent of the median income for the area in which 
such census tract or block numbering area is lo-
cated, and, for the purposes of section 1332(a)(2), 
shall include families having incomes not greater 
than 100 percent of the area median income who re-
side in minority census tracts. 
‘‘(29) MINORITY
CENSUS
TRACT.—The term 
‘minority census tract’ means a census tract that 
has a minority population of at least 30 percent and 
a median family income of less than 100 percent of 
the area family median income. 
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103 
‘‘(30) SHORTAGE OF STANDARD RENTAL UNITS 
BOTH AFFORDABLE AND AVAILABLE TO EXTREMELY 
LOW-INCOME RENTER HOUSEHOLDS.— 
‘‘(A) IN GENERAL.—The term ‘shortage of 
standard rental units both affordable and avail-
able to extremely low-income renter households’ 
means the gap between— 
‘‘(i) the number of units with com-
plete plumbing and kitchen facilities with a 
rent that is 30 percent or less of 30 per-
cent of the adjusted area median income as 
determined by the Director that are occu-
pied by extremely low-income renter house-
holds or are vacant for rent; and 
‘‘(ii) the number of extremely low-in-
come renter households. 
‘‘(B) RULE
OF
CONSTRUCTION.—If the 
number of units described in subparagraph 
(A)(i) exceeds the number of extremely low-in-
come households as described in subparagraph 
(A)(ii), there is no shortage. 
‘‘(31) SHORTAGE OF STANDARD RENTAL UNITS 
BOTH AFFORDABLE AND AVAILABLE TO VERY LOW- 
INCOME RENTER HOUSEHOLDS.— 
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104 
‘‘(A) IN GENERAL.—The term ‘shortage of 
standard rental units both affordable and avail-
able to very low-income renter households’ 
means the gap between— 
‘‘(i) the number of units with com-
plete plumbing and kitchen facilities with a 
rent that is 30 percent or less of 50 per-
cent of the adjusted area median income as 
determined by the Director that are occu-
pied by either extremely low- or very low- 
income renter households or are vacant for 
rent; and 
‘‘(ii) the number of extremely low- 
and very low-income renter households. 
‘‘(B) RULE
OF
CONSTRUCTION.—If the 
number of units described in subparagraph 
(A)(i) exceeds the number of extremely low- and 
very low-income households as described in sub-
paragraph (A)(ii), there is no shortage.’’. 
SEC. 129. DUTY TO SERVE UNDERSERVED MARKETS. 
(a) ESTABLISHMENT
AND EVALUATION
OF PER-
FORMANCE.—Section 1335 of the Federal Housing Enter-
prises Financial Safety and Soundness Act of 1992 (12 
U.S.C. 4565) is amended— 
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108 
‘‘(vii) the rural rental housing pro-
gram under section 515 of the Housing 
Act of 1949. 
‘‘(C) RURAL
AND
OTHER
UNDERSERVED 
MARKETS.—The enterprise shall lead the indus-
try in developing loan products and flexible un-
derwriting guidelines to facilitate a secondary 
market for mortgages on housing for very 
low-, low-, and moderate-income families in 
rural areas, and for mortgages for housing for 
any other underserved market for very low-, 
low-, and moderate-income families that the Di-
rector identifies as lacking adequate credit 
through conventional lending sources. Such un-
derserved markets may be identified by bor-
rower type, market segment, or geographic 
area.’’; and 
(5) by adding at the end the following new sub-
section: 
‘‘(c) EVALUATION
AND REPORTING
OF COMPLI-
ANCE.— 
‘‘(1) IN GENERAL.—Not later than 6 months 
after the effective date of the Federal Housing Fi-
nance Regulatory Reform Act of 2008, the Director 
shall establish a manner for evaluating whether, and 
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109 
the extent to which, the enterprises have complied 
with the duty under subsection (a) to serve under-
served markets and for rating the extent of such 
compliance. Using such method, the Director shall, 
for each year, evaluate such compliance and rate the 
performance of each enterprise as to extent of com-
pliance. The Director shall include such evaluation 
and rating for each enterprise for a year in the re-
port for that year submitted pursuant to section 
1319B(a). 
‘‘(2) SEPARATE EVALUATIONS.—In determining 
whether an enterprise has complied with the duty re-
ferred to in paragraph (1), the Director shall sepa-
rately evaluate whether the enterprise has complied 
with such duty with respect to each of the under-
served markets identified in subsection (a), taking 
into consideration— 
‘‘(A) the development of loan products and 
more flexible underwriting guidelines; 
‘‘(B) the extent of outreach to qualified 
loan sellers in each of such underserved mar-
kets; and 
‘‘(C) the volume of loans purchased in each 
of such underserved markets. 
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110 
‘‘(3) MANUFACTURED
HOUSING
MARKET.—In 
determining whether an enterprise has complied with 
the duty under subparagraph (A) of subsection 
(a)(2), the Director may consider loans secured by 
both real and personal property.’’. 
(b) ENFORCEMENT.—Subsection (a) of section 1336 
of the Housing and Community Development Act of 1992 
(12 U.S.C. 4566(a)) is amended— 
(1) in paragraph (1), by inserting ‘‘and with 
the duty under section 1335(a) of each enterprise 
with respect to underserved markets,’’ before ‘‘as 
provided in this section’’; and 
(2) by adding at the end of such subsection, as 
amended by the preceding provisions of this subtitle, 
the following new paragraph: 
‘‘(4) ENFORCEMENT
OF
DUTY
TO
PROVIDE 
MORTGAGE CREDIT TO UNDERSERVED MARKETS.— 
The duty under section 1335(a) of each enterprise 
to serve underserved markets (as determined in ac-
cordance with section 1335(c)) shall be enforceable 
under this section to the same extent and under the 
same provisions that the housing goals established 
under this subpart are enforceable. Such duty shall 
not be enforceable under any other provision of this 
title (including subpart C of this part) other than 
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111 
this section or under any provision of the Federal 
National Mortgage Association Charter Act or the 
Federal Home Loan Mortgage Corporation Act.’’. 
SEC. 130. MONITORING AND ENFORCING COMPLIANCE 
WITH HOUSING GOALS. 
(a) IN GENERAL.—Section 1336 of the Federal 
Housing Enterprises Financial Safety and Soundness Act 
of 1992 (12 U.S.C. 4566) is amended by striking sub-
sections (b) and (c) and inserting the following: 
‘‘(b) NOTICE AND PRELIMINARY DETERMINATION OF 
FAILURE TO MEET GOALS.— 
‘‘(1) NOTICE.—If the Director preliminarily de-
termines that an enterprise has failed, or that there 
is a substantial probability that an enterprise will 
fail, to meet any housing goal under this subpart, 
the Director shall provide written notice to the en-
terprise of such a preliminary determination, the 
reasons for such determination, and the information 
on which the Director based the determination. 
‘‘(2) RESPONSE PERIOD.— 
‘‘(A) IN GENERAL.—During the 30-day pe-
riod beginning on the date on which an enter-
prise is provided notice under paragraph (1), 
the enterprise may submit to the Director any 
written information that the enterprise con-
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112 
siders appropriate for consideration by the Di-
rector in finally determining whether such fail-
ure has occurred or whether the achievement of 
such goal was or is feasible. 
‘‘(B) EXTENDED
PERIOD.—The Director 
may extend the period under subparagraph (A) 
for good cause for not more than 30 additional 
days. 
‘‘(C) SHORTENED PERIOD.—The Director 
may shorten the period under subparagraph (A) 
for good cause. 
‘‘(D) FAILURE TO RESPOND.—The failure 
of an enterprise to provide information during 
the 30-day period under this paragraph (as ex-
tended or shortened) shall waive any right of 
the enterprise to comment on the proposed de-
termination or action of the Director. 
‘‘(3) CONSIDERATION
OF
INFORMATION
AND 
FINAL DETERMINATION.— 
‘‘(A) IN GENERAL.—After the expiration of 
the response period under paragraph (2), or 
upon receipt of information provided during 
such period by the enterprise, whichever occurs 
earlier, the Director shall issue a final deter-
mination on— 
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113 
‘‘(i) whether the enterprise has failed, 
or there is a substantial probability that 
the enterprise will fail, to meet the housing 
goal; and 
‘‘(ii) whether (taking into consider-
ation market and economic conditions and 
the financial condition of the enterprise) 
the achievement of the housing goal was or 
is feasible. 
‘‘(B) CONSIDERATIONS.—In making a 
final determination under subparagraph (A), 
the Director shall take into consideration any 
relevant information submitted by the enter-
prise during the response period. 
‘‘(C) NOTICE.—The Director shall provide 
written notice, including a response to any in-
formation submitted during the response pe-
riod, to the enterprise, the Committee on Bank-
ing, Housing, and Urban Affairs of the Senate, 
and the Committee on Financial Services of the 
House of Representatives, of— 
‘‘(i) each final determination under 
this paragraph that an enterprise has 
failed, or that there is a substantial prob-
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115 
1345, or order other remedies as set forth in para-
graph (7). 
‘‘(2) HOUSING PLAN.—If the Director requires 
a housing plan under this subsection, such a plan 
shall be— 
‘‘(A) a feasible plan describing the specific 
actions the enterprise will take— 
‘‘(i) to achieve the goal for the next 
calendar year; and 
‘‘(ii) if the Director determines that 
there is a substantial probability that the 
enterprise will fail to meet a goal in the 
current year, to make such improvements 
and changes in its operations as are rea-
sonable in the remainder of such year; and 
‘‘(B) sufficiently specific to enable the Di-
rector to monitor compliance periodically. 
‘‘(3) DEADLINE FOR SUBMISSION.—The Direc-
tor shall establish a deadline for an enterprise to 
comply with any remedial action or submit a housing 
plan to the Director, which may not be more than 
45 days after the enterprise is provided notice. The 
Director may extend the deadline to the extent that 
the Director determines necessary. Any extension of 
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116 
the deadline shall be in writing and for a time cer-
tain. 
‘‘(4) APPROVAL.—The Director shall review 
each submission by an enterprise, including a hous-
ing plan submitted under this subsection, and, not 
later than 30 days after submission, approve or dis-
approve the plan or other action. The Director may 
extend the period for approval or disapproval for a 
single additional 30-day period if the Director deter-
mines it necessary. The Director shall approve any 
plan that the Director determines is likely to suc-
ceed, and conforms with the Federal National Mort-
gage Association Charter Act or the Federal Home 
Loan Mortgage Corporation Act (as applicable), this 
title, and any other applicable provision of law. 
‘‘(5) 
NOTICE
OF
APPROVAL
AND
DIS-
APPROVAL.—The Director shall provide written no-
tice to any enterprise submitting a housing plan of 
the approval or disapproval of the plan (which shall 
include the reasons for any disapproval of the plan) 
and of any extension of the period for approval or 
disapproval. 
‘‘(6) RESUBMISSION.—If the initial housing 
plan submitted by an enterprise under this section 
is disapproved, the enterprise shall submit an 
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117 
amended plan acceptable to the Director not later 
than 15 days after such disapproval, or such longer 
period that the Director determines is in the public 
interest. 
‘‘(7) ADDITIONAL REMEDIES FOR FAILURE TO 
MEET GOALS.—In addition to ordering a housing 
plan under this section, issuing cease and desist or-
ders under section 1341, and ordering civil money 
penalties under section 1345, the Director may— 
‘‘(A) seek other actions when an enterprise 
fails to meet a goal; and 
‘‘(B) exercise appropriate enforcement au-
thority available to the Director under this 
Act.’’. 
(b) CONFORMING AMENDMENT.—The heading for 
subpart C of part 2 of subtitle A of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992 
is amended to read as follows: 
‘‘Subpart C—Enforcement’’. 
(c) CEASE AND DESIST PROCEEDINGS .— 
(1) REPEAL.—Section 1341 of the Federal 
Housing Enterprises Financial Safety and Sound-
ness Act of 1992 (12 U.S.C. 4581) is hereby re-
pealed. 
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118 
(2) CEASE
AND
DESIST
PROCEEDINGS.—The 
Federal Housing Enterprises Financial Safety and 
Soundness Act of 1992 is amended by inserting be-
fore section 1342 the following: 
‘‘SEC. 1341. CEASE AND DESIST PROCEEDINGS. 
‘‘(a) GROUNDS FOR ISSUANCE.—The Director may 
issue and serve a notice of charges under this section upon 
an enterprise if the Director determines that— 
‘‘(1) the enterprise has failed to meet any hous-
ing goal established under subpart B, following a 
written notice and determination of such failure in 
accordance with section 1336; 
‘‘(2) the enterprise has failed to submit a report 
under section 1327, following a notice of such fail-
ure, an opportunity for comment by the enterprise, 
and a final determination by the Director; 
‘‘(3) the enterprise has failed to submit the in-
formation required under subsection (m) or (n) of 
section 309 of the Federal National Mortgage Asso-
ciation Charter Act, or subsection (e) or (f) of sec-
tion 307 of the Federal Home Loan Mortgage Cor-
poration Act; 
‘‘(4) the enterprise has violated any provision of 
part 2 of this title or any order, rule, or regulation 
under part 2; 
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119 
‘‘(5) the enterprise has failed to submit a hous-
ing plan or perform its responsibilities under a reme-
dial order that substantially complies with section 
1336(c) within the applicable period; or 
‘‘(6) the enterprise has failed to comply with a 
housing plan under section 1336(c). 
‘‘(b) PROCEDURE.— 
‘‘(1) NOTICE
OF
CHARGES.—Each notice of 
charges issued under this section shall contain a 
statement of the facts constituting the alleged con-
duct and shall fix a time and place at which a hear-
ing will be held to determine on the record whether 
an order to cease and desist from such conduct 
should issue. 
‘‘(2) ISSUANCE
OF
ORDER.—If the Director 
finds on the record made at a hearing described in 
paragraph (1) that any conduct specified in the no-
tice of charges has been established (or the enter-
prise consents pursuant to section 1342(a)(4)), the 
Director may issue and serve upon the enterprise an 
order requiring the enterprise to— 
‘‘(A) comply with the goals; 
‘‘(B) submit a report under section 1327; 
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120 
‘‘(C) comply with any provision of part 2 
of this title or any order, rule, or regulation 
under part 2; 
‘‘(D) submit a housing plan in compliance 
with section 1336(c); 
‘‘(E) comply with the housing plan in com-
pliance with section 1336(c); or 
‘‘(F) provide the information required 
under subsection (m) or (n) of section 309 of 
the Federal National Mortgage Association 
Charter Act, or subsection (e) or (f) of section 
307 of the Federal Home Loan Mortgage Cor-
poration Act. 
‘‘(c) EFFECTIVE DATE.—An order under this section 
shall become effective upon the expiration of the 30-day 
period beginning on the date of service of the order upon 
the enterprise (except in the case of an order issued upon 
consent, which shall become effective at the time specified 
therein), and shall remain effective and enforceable as pro-
vided in the order, except to the extent that the order is 
stayed, modified, terminated, or set aside by action of the 
Director or otherwise, as provided in this subpart.’’. 
(d) CIVIL MONEY PENALTIES.— 
(1) REPEAL.—Section 1345 of the Federal 
Housing Enterprises Financial Safety and Sound-
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121 
ness Act of 1992 (12 U.S.C. 4585) is hereby re-
pealed. 
(2) CIVIL
MONEY
PENALTIES.—The Federal 
Housing Enterprises Financial Safety and Sound-
ness Act of 1992 is amended by inserting after sec-
tion 1344 the following: 
‘‘SEC. 1345. CIVIL MONEY PENALTIES. 
‘‘(a) AUTHORITY.—The Director may impose a civil 
money penalty, in accordance with the provisions of this 
section, on any enterprise that has failed to— 
‘‘(1) meet any housing goal established under 
subpart B, following a written notice and determina-
tion of such failure in accordance with section 
1336(b); 
‘‘(2) submit a report under section 1327, fol-
lowing a notice of such failure, an opportunity for 
comment by the enterprise, and a final determina-
tion by the Director; 
‘‘(3) submit the information required under 
subsection (m) or (n) of section 309 of the Federal 
National Mortgage Association Charter Act or sub-
section (e) or (f) of section 307 of the Federal Home 
Loan Mortgage Corporation Act; 
‘‘(4) comply with any provision of part 2 of this 
title or any order, rule, or regulation under part 2; 
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122 
‘‘(5) submit a housing plan or perform its re-
sponsibilities under a remedial order issued pursuant 
to section 1336(c) within the required period; or 
‘‘(6) comply with a housing plan for the enter-
prise under section 1336(c). 
‘‘(b) AMOUNT OF PENALTY.—The amount of a pen-
alty under this section, as determined by the Director, 
may not exceed— 
‘‘(1) for any failure described in paragraph (1), 
(5), or (6) of subsection (a), $100,000 for each day 
that the failure occurs; and 
‘‘(2) for any failure described in paragraph (2), 
(3), or (4) of subsection (a), $50,000 for each day 
that the failure occurs. 
‘‘(c) PROCEDURES.— 
‘‘(1) ESTABLISHMENT.—The Director shall es-
tablish standards and procedures governing the im-
position of civil money penalties under this section. 
Such standards and procedures— 
‘‘(A) shall provide for the Director to no-
tify the enterprise in writing of the determina-
tion of the Director to impose the penalty, 
which shall be made on the record; 
‘‘(B) shall provide for the imposition of a 
penalty only after the enterprise has been given 
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123 
an opportunity for a hearing on the record pur-
suant to section 1342; and 
‘‘(C) may provide for review by the Direc-
tor of any determination or order, or interlocu-
tory ruling, arising from a hearing. 
‘‘(2) FACTORS
IN
DETERMINING
AMOUNT
OF 
PENALTY.—In determining the amount of a penalty 
under this section, the Director shall give consider-
ation to factors including— 
‘‘(A) the gravity of the offense; 
‘‘(B) any history of prior offenses; 
‘‘(C) ability to pay the penalty; 
‘‘(D) injury to the public; 
‘‘(E) benefits received; 
‘‘(F) deterrence of future violations; 
‘‘(G) the length of time that the enterprise 
should reasonably take to achieve the goal; and 
‘‘(H) such other factors as the Director 
may determine, by regulation, to be appro-
priate. 
‘‘(d) ACTION TO COLLECT PENALTY.—If an enter-
prise fails to comply with an order by the Director impos-
ing a civil money penalty under this section, after the 
order is no longer subject to review, as provided in sections 
1342 and 1343, the Director may bring an action in the 
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United States District Court for the District of Columbia 
to obtain a monetary judgment against the enterprise, and 
such other relief as may be available. The monetary judg-
ment may, in the court’s discretion, include the attorneys’ 
fees and other expenses incurred by the United States in 
connection with the action. In an action under this sub-
section, the validity and appropriateness of the order im-
posing the penalty shall not be subject to review. 
‘‘(e) SETTLEMENT
BY DIRECTOR.—The Director 
may compromise, modify, or remit any civil money penalty 
which may be, or has been, imposed under this section.’’. 
(e) DIRECTOR AUTHORITY.— 
(1) AUTHORITY TO BRING A CIVIL ACTION.— 
Section 1344(a) of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 
U.S.C. 4584) is amended by striking ‘‘The Secretary 
may request the Attorney General of the United 
States to bring a civil action’’ and inserting ‘‘The 
Director may bring a civil action’’. 
(2) 
SUBPOENA
ENFORCEMENT.—Section 
1348(c) of the Federal Housing Enterprises Finan-
cial Safety and Soundness Act of 1992 (12 U.S.C. 
4588(c)) is amended by inserting ‘‘may bring an ac-
tion or’’ before ‘‘may request’’. 
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125 
(3) CONFORMING AMENDMENTS.—Subpart C of 
part 2 of subtitle A of the Federal Housing Enter-
prises Financial Safety and Soundness Act of 1992 
(12 U.S.C. 4581 et seq.) is amended by striking 
‘‘Secretary’’ each place that term appears and in-
serting ‘‘Director’’ in each of— 
(A) section 1342 (12 U.S.C. 4582); 
(B) section 1343 (12 U.S.C. 4583); 
(C) section 1346 (12 U.S.C. 4586); 
(D) section 1347 (12 U.S.C. 4587); and 
(E) section 1348 (12 U.S.C. 4588). 
SEC. 131. TRANSFER AND RIGHTS OF CERTAIN HUD EM-
PLOYEES. 
(a) TRANSFER.—Each employee of the Department 
of Housing and Urban Development whose position re-
sponsibilities primarily involve the establishment and en-
forcement of the housing goals under subpart B of part 
2 of subtitle A of the Federal Housing Enterprises Finan-
cial Safety and Soundness Act of 1992 (12 U.S.C. 4561 
et seq.) shall be transferred to the Federal Housing Fi-
nance Agency for employment, not later than the effective 
date of the Federal Housing Finance Regulatory Reform 
Act of 2008, and such transfer shall be deemed a transfer 
of function for purposes of section 3503 of title 5, United 
States Code. 
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126 
(b) GUARANTEED POSITIONS.— 
(1) IN GENERAL.—Each employee transferred 
under subsection (a) shall be guaranteed a position 
with the same status, tenure, grade, and pay as that 
held on the day immediately preceding the transfer. 
(2) NO INVOLUNTARY SEPARATION OR REDUC-
TION.—An employee transferred under subsection 
(a) holding a permanent position on the day imme-
diately preceding the transfer may not be involun-
tarily separated or reduced in grade or compensation 
during the 12-month period beginning on the date of 
transfer, except for cause, or, in the case of a tem-
porary employee, separated in accordance with the 
terms of the appointment of the employee. 
(c) APPOINTMENT AUTHORITY FOR EXCEPTED AND 
SENIOR EXECUTIVE SERVICE EMPLOYEES.— 
(1) IN GENERAL.—In the case of an employee 
occupying a position in the excepted service or the 
Senior Executive Service, any appointment authority 
established under law or by regulations of the Office 
of Personnel Management for filling such position 
shall be transferred, subject to paragraph (2). 
(2) DECLINE
OF
TRANSFER.—The Director 
may decline a transfer of authority under paragraph 
(1) to the extent that such authority relates to— 
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127 
(A) a position excepted from the competi-
tive service because of its confidential, policy-
making, policy-determining, or policy-advocating 
character; or 
(B) a noncareer position in the Senior Ex-
ecutive Service (within the meaning of section 
3132(a)(7) of title 5, United States Code). 
(d) REORGANIZATION.—If the Director determines, 
after the end of the 1-year period beginning on the effec-
tive date of the Federal Housing Finance Regulatory Re-
form Act of 2008, that a reorganization of the combined 
workforce is required, that reorganization shall be deemed 
a major reorganization for purposes of affording affected 
employee 
retirement 
under 
section 
8336(d)(2) 
or 
8414(b)(1)(B) of title 5, United States Code. 
(e) EMPLOYEE BENEFIT PROGRAMS.— 
(1) IN
GENERAL.—Any employee described 
under subsection (a) accepting employment with the 
Agency as a result of a transfer under subsection (a) 
may retain, for 12 months after the date on which 
such transfer occurs, membership in any employee 
benefit program of the Agency or the Department of 
Housing and Urban Development, as applicable, in-
cluding insurance, to which such employee belongs 
on such effective date, if— 
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128 
(A) the employee does not elect to give up 
the benefit or membership in the program; and 
(B) the benefit or program is continued by 
the Director of the Federal Housing Finance 
Agency. 
(2) COST DIFFERENTIAL.— 
(A) IN GENERAL.—The difference in the 
costs between the benefits which would have 
been provided by the Department of Housing 
and Urban Development and those provided by 
this section shall be paid by the Director. 
(B) HEALTH
INSURANCE.—If any em-
ployee elects to give up membership in a health 
insurance program or the health insurance pro-
gram is not continued by the Director, the em-
ployee shall be permitted to select an alternate 
Federal health insurance program not later 
than 30 days after the date of such election or 
notice, without regard to any other regularly 
scheduled open season. 
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129 
Subtitle C—Prompt Corrective 
Action 
SEC. 141. CRITICAL CAPITAL LEVELS. 
(a) IN GENERAL.—Section 1363 of the Federal 
Housing Enterprises Financial Safety and Soundness Act 
of 1992 (12 U.S.C. 4613) is amended— 
(1) by striking ‘‘For’’ and inserting ‘‘(a) EN-
TERPRISES.—FOR’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(b) FEDERAL HOME LOAN BANKS.— 
‘‘(1) IN GENERAL.—For purposes of this sub-
title, the critical capital level for each Federal Home 
Loan Bank shall be such amount of capital as the 
Director shall, by regulation, require. 
‘‘(2) CONSIDERATION OF OTHER CRITICAL CAP-
ITAL
LEVELS.—In establishing the critical capital 
level under paragraph (1) for the Federal Home 
Loan Banks, the Director shall take due consider-
ation of the critical capital level established under 
subsection (a) for the enterprises, with such modi-
fications as the Director determines to be appro-
priate to reflect the difference in operations between 
the banks and the enterprises.’’. 
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130 
(b) REGULATIONS.—Not later than the expiration of 
the 180-day period beginning on the date of enactment 
of this Act, the Director of the Federal Housing Finance 
Agency shall issue regulations pursuant to section 1363(b) 
of the Federal Housing Enterprises Financial Safety and 
Soundness Act of 1992 (as added by this section) estab-
lishing the critical capital level under such section. 
SEC. 142. CAPITAL CLASSIFICATIONS. 
(a) IN GENERAL.—Section 1364 of the Federal 
Housing Enterprises Financial Safety and Soundness Act 
of 1992 (12 U.S.C. 4614) is amended— 
(1) in the heading for subsection (a) by striking 
‘‘In General’’ and inserting ‘‘Enterprises’’; 
(2) in subsection (c)— 
(A) by striking ‘‘subsection (b)’’ and in-
serting ‘‘subsection (c)’’; 
(B) by striking ‘‘enterprises’’ and inserting 
‘‘regulated entities’’; and 
(C) by striking the last sentence; 
(3) by redesignating subsections (c) (as so 
amended by paragraph (2) of this subsection) and 
(d) as subsections (d) and (f), respectively; 
(4) by striking subsection (b) and inserting the 
following: 
‘‘(b) FEDERAL HOME LOAN BANKS.— 
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131 
‘‘(1) ESTABLISHMENT
AND
CRITERIA.—For 
purposes of this subtitle, the Director shall, by regu-
lation— 
‘‘(A) establish the capital classifications 
specified under paragraph (2) for the Federal 
Home Loan Banks; 
‘‘(B) establish criteria for each such cap-
ital classification based on the amount and 
types of capital held by a bank and the risk- 
based, minimum, and critical capital levels for 
the banks and taking due consideration of the 
capital classifications established under sub-
section (a) for the enterprises, with such modi-
fications as the Director determines to be ap-
propriate to reflect the difference in operations 
between the banks and the enterprises; and 
‘‘(C) shall classify the Federal Home Loan 
Banks according to such capital classifications. 
‘‘(2) CLASSIFICATIONS.—The capital classifica-
tions specified under this paragraph are— 
‘‘(A) adequately capitalized; 
‘‘(B) undercapitalized; 
‘‘(C) significantly undercapitalized; and 
‘‘(D) critically undercapitalized. 
‘‘(c) DISCRETIONARY CLASSIFICATION.— 
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132 
‘‘(1) GROUNDS
FOR
RECLASSIFICATION.—The 
Director may reclassify a regulated entity under 
paragraph (2) if— 
‘‘(A) at any time, the Director determines 
in writing that the regulated entity is engaging 
in conduct that could result in a rapid depletion 
of core or total capital or the value of collateral 
pledged as security has decreased significantly 
or that the value of the property subject to any 
mortgage held by the regulated entity (or 
securitized in the case of an enterprise) has de-
creased significantly; 
‘‘(B) after notice and an opportunity for 
hearing, the Director determines that the regu-
lated entity is in an unsafe or unsound condi-
tion; or 
‘‘(C) pursuant to section 1371(b), the Di-
rector deems the regulated entity to be engag-
ing in an unsafe or unsound practice. 
‘‘(2) RECLASSIFICATION.—In addition to any 
other action authorized under this title, including 
the reclassification of a regulated entity for any rea-
son not specified in this subsection, if the Director 
takes any action described in paragraph (1), the Di-
rector may classify a regulated entity— 
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134 
the regulated entity in at least an equivalent 
amount; and 
‘‘(B) will reduce the financial obligations of 
the regulated entity or otherwise improve the fi-
nancial condition of the entity.’’. 
(b) REGULATIONS.—Not later than the expiration of 
the 180-day period beginning on the date of enactment 
of this Act, the Director of the Federal Housing Finance 
Agency shall issue regulations to carry out section 1364(b) 
of the Federal Housing Enterprises Financial Safety and 
Soundness Act of 1992 (as added by this section), relating 
to capital classifications for the Federal Home Loan 
Banks. 
SEC. 143. SUPERVISORY ACTIONS APPLICABLE TO UNDER-
CAPITALIZED REGULATED ENTITIES. 
Section 1365 of the Federal Housing Enterprises Fi-
nancial Safety and Soundness Act of 1992 (12 U.S.C. 
4615) is amended— 
(1) by striking ‘‘the enterprise’’ each place that 
term appears and inserting ‘‘the regulated entity’’; 
(2) by striking ‘‘An enterprise’’ each place that 
term appears and inserting ‘‘A regulated entity’’; 
(3) by striking ‘‘an enterprise’’ each place that 
term appears and inserting ‘‘a regulated entity’’; 
(4) in subsection (a)— 
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135 
(A) by redesignating paragraphs (1) and 
(2) as paragraphs (2) and (3), respectively; 
(B) by inserting before paragraph (2), as 
redesignated, the following: 
‘‘(1) REQUIRED
MONITORING.—The Director 
shall— 
‘‘(A) closely monitor the condition of any 
undercapitalized regulated entity; 
‘‘(B) closely monitor compliance with the 
capital restoration plan, restrictions, and re-
quirements imposed on an undercapitalized reg-
ulated entity under this section; and 
‘‘(C) periodically review the plan, restric-
tions, and requirements applicable to an under-
capitalized regulated entity to determine wheth-
er the plan, restrictions, and requirements are 
achieving the purpose of this section.’’; and 
(C) by adding at the end the following: 
‘‘(4) RESTRICTION
OF
ASSET
GROWTH.—An 
undercapitalized regulated entity shall not permit its 
average total assets during any calendar quarter to 
exceed its average total assets during the preceding 
calendar quarter, unless— 
‘‘(A) the Director has accepted the capital 
restoration plan of the regulated entity; 
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136 
‘‘(B) any increase in total assets is con-
sistent with the capital restoration plan; and 
‘‘(C) the ratio of tangible equity to assets 
of the regulated entity increases during the cal-
endar quarter at a rate sufficient to enable the 
regulated entity to become adequately capital-
ized within a reasonable time. 
‘‘(5) PRIOR APPROVAL OF ACQUISITIONS AND 
NEW ACTIVITIES.—An undercapitalized regulated en-
tity shall not, directly or indirectly, acquire any in-
terest in any entity or engage in any new activity, 
unless— 
‘‘(A) the Director has accepted the capital 
restoration plan of the regulated entity, the reg-
ulated entity is implementing the plan, and the 
Director determines that the proposed action is 
consistent with and will further the achievement 
of the plan; or 
‘‘(B) the Director determines that the pro-
posed action will further the purpose of this 
subtitle.’’; 
(5) in subsection (b)— 
(A) in the subsection heading, by striking 
‘‘DISCRETIONARY’’; 
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137 
(B) in the matter preceding paragraph (1), 
by striking ‘‘may’’ and inserting ‘‘shall’’; and 
(C) in paragraph (2)— 
(i) by striking ‘‘make, in good faith, 
reasonable efforts necessary to’’; and 
(ii) by striking the period at the end 
and inserting ‘‘in any material respect.’’; 
and 
(6) by striking subsection (c) and inserting the 
following: 
‘‘(c) OTHER DISCRETIONARY SAFEGUARDS.—The 
Director may take, with respect to an undercapitalized 
regulated entity, any of the actions authorized to be taken 
under section 1366 with respect to a significantly under-
capitalized regulated entity, if the Director determines 
that such actions are necessary to carry out the purpose 
of this subtitle.’’. 
SEC. 144. SUPERVISORY ACTIONS APPLICABLE TO SIGNIFI-
CANTLY 
UNDERCAPITALIZED 
REGULATED 
ENTITIES. 
Section 1366 of the Federal Housing Enterprises Fi-
nancial Safety and Soundness Act of 1992 (12 U.S.C. 
4616) is amended— 
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138 
(1) in subsection (a)(2), by striking ‘‘under-
capitalized enterprise’’ and inserting ‘‘undercapital-
ized’’; 
(2) by striking ‘‘the enterprise’’ each place that 
term appears and inserting ‘‘the regulated entity’’; 
(3) by striking ‘‘An enterprise’’ each place that 
term appears and inserting ‘‘A regulated entity’’; 
(4) by striking ‘‘an enterprise’’ each place that 
term appears and inserting ‘‘a regulated entity’’; 
(5) in subsection (b)— 
(A) in the subsection heading, by striking 
‘‘DISCRETIONARY SUPERVISORY’’ and inserting 
‘‘SPECIFIC’’; 
(B) in the matter preceding paragraph (1), 
by striking ‘‘may, at any time, take any’’ and 
inserting ‘‘shall carry out this section by taking, 
at any time, 1 or more’’; 
(C) by striking paragraph (6); 
(D) by redesignating paragraph (5) as 
paragraph (6); 
(E) by inserting after paragraph (4) the 
following: 
‘‘(5) IMPROVEMENT OF MANAGEMENT.—Take 1 
or more of the following actions: 
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139 
‘‘(A) NEW ELECTION OF BOARD.—Order a 
new election for the board of directors of the 
regulated entity. 
‘‘(B) DISMISSAL OF DIRECTORS OR EXECU-
TIVE OFFICERS.—Require the regulated entity 
to dismiss from office any director or executive 
officer who had held office for more than 180 
days immediately before the date on which the 
regulated entity became undercapitalized. Dis-
missal under this subparagraph shall not be 
construed to be a removal pursuant to the en-
forcement powers of the Director under section 
1377. 
‘‘(C) EMPLOY QUALIFIED EXECUTIVE OF-
FICERS.—Require the regulated entity to em-
ploy qualified executive officers (who, if the Di-
rector so specifies, shall be subject to approval 
by the Director).’’; and 
(F) by adding at the end the following: 
‘‘(7) OTHER
ACTION.—Require the regulated 
entity to take any other action that the Director de-
termines will better carry out the purpose of this 
section than any of the other actions specified in this 
subsection.’’; and 
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140 
(6) by striking subsection (c) and inserting the 
following: 
‘‘(c) RESTRICTION ON COMPENSATION OF EXECU-
TIVE OFFICERS.—A regulated entity that is classified as 
significantly undercapitalized in accordance with section 
1364 may not, without prior written approval by the Di-
rector— 
‘‘(1) pay any bonus to any executive officer; or 
‘‘(2) provide compensation to any executive offi-
cer at a rate exceeding the average rate of com-
pensation of that officer (excluding bonuses, stock 
options, and profit sharing) during the 12 calendar 
months preceding the calendar month in which the 
regulated entity became significantly undercapital-
ized.’’. 
SEC. 145. AUTHORITY OVER CRITICALLY UNDERCAPITAL-
IZED REGULATED ENTITIES. 
(a) IN GENERAL.—Section 1367 of the Federal 
Housing Enterprises Financial Safety and Soundness Act 
of 1992 (12 U.S.C. 4617) is amended to read as follows: 
‘‘SEC. 1367. AUTHORITY OVER CRITICALLY UNDERCAPITAL-
IZED REGULATED ENTITIES. 
‘‘(a) APPOINTMENT OF THE AGENCY AS CONSER-
VATOR OR RECEIVER.— 
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141 
‘‘(1) IN GENERAL.—Notwithstanding any other 
provision of Federal or State law, the Director may 
appoint the Agency as conservator or receiver for a 
regulated entity in the manner provided under para-
graph (2) or (4). All references to the conservator or 
receiver under this section are references to the 
Agency acting as conservator or receiver. 
‘‘(2) 
DISCRETIONARY
APPOINTMENT.—The 
Agency may, at the discretion of the Director, be ap-
pointed conservator or receiver for the purpose of re-
organizing, rehabilitating, or winding up the affairs 
of a regulated entity. 
‘‘(3) GROUNDS FOR DISCRETIONARY APPOINT-
MENT
OF
CONSERVATOR
OR
RECEIVER.—The 
grounds for appointing conservator or receiver for 
any regulated entity under paragraph (2) are as fol-
lows: 
‘‘(A) SUBSTANTIAL
DISSIPATION.—Sub-
stantial dissipation of assets or earnings due 
to— 
‘‘(i) any violation of any provision of 
Federal or State law; or 
‘‘(ii) any unsafe or unsound practice. 
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142 
‘‘(B) UNSAFE OR UNSOUND CONDITION.— 
An unsafe or unsound condition to transact 
business. 
‘‘(C) CEASE
AND
DESIST
ORDERS.—Any 
willful violation of a cease and desist order that 
has become final. 
‘‘(D) CONCEALMENT.—Any concealment of 
the books, papers, records, or assets of the reg-
ulated entity, or any refusal to submit the 
books, papers, records, or affairs of the regu-
lated entity, for inspection to any examiner or 
to any lawful agent of the Director. 
‘‘(E) INABILITY TO MEET OBLIGATIONS.— 
The regulated entity is likely to be unable to 
pay its obligations or meet the demands of its 
creditors in the normal course of business. 
‘‘(F) LOSSES.—The regulated entity has 
incurred or is likely to incur losses that will de-
plete all or substantially all of its capital, and 
there is no reasonable prospect for the regu-
lated entity to become adequately capitalized 
(as defined in section 1364(a)(1)). 
‘‘(G) VIOLATIONS OF LAW.—Any violation 
of any law or regulation, or any unsafe or un-
sound practice or condition that is likely to— 
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143 
‘‘(i) cause insolvency or substantial 
dissipation of assets or earnings; or 
‘‘(ii) weaken the condition of the regu-
lated entity. 
‘‘(H) CONSENT.—The regulated entity, by 
resolution of its board of directors or its share-
holders or members, consents to the appoint-
ment. 
‘‘(I) UNDERCAPITALIZATION.—The regu-
lated entity is undercapitalized or significantly 
undercapitalized 
(as 
defined 
in 
section 
1364(a)(3)), and— 
‘‘(i) has no reasonable prospect of be-
coming adequately capitalized; 
‘‘(ii) fails to become adequately cap-
italized, as required by— 
‘‘(I) section 1365(a)(1) with re-
spect to a regulated entity; or 
‘‘(II) section 1366(a)(1) with re-
spect to a significantly undercapital-
ized regulated entity; 
‘‘(iii) fails to submit a capital restora-
tion plan acceptable to the Agency within 
the time prescribed under section 1369C; 
or 
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144 
‘‘(iv) materially fails to implement a 
capital restoration plan submitted and ac-
cepted under section 1369C. 
‘‘(J) CRITICAL
UNDERCAPITALIZATION.— 
The regulated entity is critically undercapital-
ized, as defined in section 1364(a)(4). 
‘‘(K) MONEY LAUNDERING.—The Attorney 
General notifies the Director in writing that the 
regulated entity has been found guilty of a 
criminal offense under section 1956 or 1957 of 
title 18, United States Code, or section 5322 or 
5324 of title 31, United States Code. 
‘‘(4) MANDATORY RECEIVERSHIP.— 
‘‘(A) IN GENERAL.—The Director shall ap-
point the Agency as receiver for a regulated en-
tity if the Director determines, in writing, 
that— 
‘‘(i) the assets of the regulated entity 
are, and during the preceding 60 calendar 
days have been, less than the obligations of 
the regulated entity to its creditors and 
others; or 
‘‘(ii) the regulated entity is not, and 
during the preceding 60 calendar days has 
not been, generally paying the debts of the 
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145 
regulated entity (other than debts that are 
the subject of a bona fide dispute) as such 
debts become due. 
‘‘(B) 
PERIODIC
DETERMINATION
RE-
QUIRED
FOR
CRITICALLY
UNDERCAPITALIZED 
REGULATED ENTITY.—If a regulated entity is 
critically undercapitalized, the Director shall 
make a determination, in writing, as to whether 
the regulated entity meets the criteria specified 
in clause (i) or (ii) of subparagraph (A)— 
‘‘(i) not later than 30 calendar days 
after the regulated entity initially becomes 
critically undercapitalized; and 
‘‘(ii) at least once during each suc-
ceeding 30-calendar day period. 
‘‘(C) DETERMINATION NOT REQUIRED IF 
RECEIVERSHIP ALREADY IN PLACE.—Subpara-
graph (B) does not apply with respect to a reg-
ulated entity in any period during which the 
Agency serves as receiver for the regulated enti-
ty. 
‘‘(D) RECEIVERSHIP
TERMINATES
CON-
SERVATORSHIP.—The appointment of the Agen-
cy as receiver of a regulated entity under this 
section shall immediately terminate any con-
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servatorship established for the regulated entity 
under this title. 
‘‘(5) JUDICIAL REVIEW.— 
‘‘(A) IN GENERAL.—If the Agency is ap-
pointed conservator or receiver under this sec-
tion, the regulated entity may, within 30 days 
of such appointment, bring an action in the 
United States district court for the judicial dis-
trict in which the home office of such regulated 
entity is located, or in the United States Dis-
trict Court for the District of Columbia, for an 
order requiring the Agency to remove itself as 
conservator or receiver. 
‘‘(B) REVIEW.—Upon the filing of an ac-
tion under subparagraph (A), the court shall, 
upon the merits, dismiss such action or direct 
the Agency to remove itself as such conservator 
or receiver. 
‘‘(6) DIRECTORS
NOT
LIABLE
FOR
ACQUI-
ESCING IN APPOINTMENT OF CONSERVATOR OR RE-
CEIVER.—The members of the board of directors of 
a regulated entity shall not be liable to the share-
holders or creditors of the regulated entity for acqui-
escing in or consenting in good faith to the appoint-
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ment of the Agency as conservator or receiver for 
that regulated entity. 
‘‘(7) AGENCY
NOT
SUBJECT
TO
ANY
OTHER 
FEDERAL AGENCY.—When acting as conservator or 
receiver, the Agency shall not be subject to the di-
rection or supervision of any other agency of the 
United States or any State in the exercise of the 
rights, powers, and privileges of the Agency. 
‘‘(b) POWERS AND DUTIES OF THE AGENCY AS CON-
SERVATOR OR RECEIVER.— 
‘‘(1) RULEMAKING AUTHORITY OF THE AGEN-
CY.—The Agency may prescribe such regulations as 
the Agency determines to be appropriate regarding 
the conduct of conservatorships or receiverships. 
‘‘(2) GENERAL POWERS.— 
‘‘(A) SUCCESSOR
TO
REGULATED
ENTI-
TY.—The Agency shall, as conservator or re-
ceiver, and by operation of law, immediately 
succeed to— 
‘‘(i) all rights, titles, powers, and 
privileges of the regulated entity, and of 
any stockholder, officer, or director of such 
regulated entity with respect to the regu-
lated entity and the assets of the regulated 
entity; and 
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‘‘(ii) title to the books, records, and 
assets of any other legal custodian of such 
regulated entity. 
‘‘(B) OPERATE
THE
REGULATED
ENTI-
TY.—The Agency may, as conservator or re-
ceiver— 
‘‘(i) take over the assets of and oper-
ate the regulated entity with all the powers 
of the shareholders, the directors, and the 
officers of the regulated entity and conduct 
all business of the regulated entity; 
‘‘(ii) collect all obligations and money 
due the regulated entity; 
‘‘(iii) perform all functions of the reg-
ulated entity in the name of the regulated 
entity which are consistent with the ap-
pointment as conservator or receiver; 
‘‘(iv) preserve and conserve the assets 
and property of the regulated entity; and 
‘‘(v) provide by contract for assistance 
in fulfilling any function, activity, action, 
or duty of the Agency as conservator or re-
ceiver. 
‘‘(C) FUNCTIONS
OF
OFFICERS, DIREC-
TORS, AND SHAREHOLDERS OF A REGULATED 
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ENTITY.—The Agency may, by regulation or 
order, provide for the exercise of any function 
by any stockholder, director, or officer of any 
regulated entity for which the Agency has been 
named conservator or receiver. 
‘‘(D) POWERS
AS
CONSERVATOR.—The 
Agency may, as conservator, take such action 
as may be— 
‘‘(i) necessary to put the regulated en-
tity in a sound and solvent condition; and 
‘‘(ii) appropriate to carry on the busi-
ness of the regulated entity and preserve 
and conserve the assets and property of 
the regulated entity. 
‘‘(E) 
ADDITIONAL
POWERS
AS
RE-
CEIVER.—In any case in which the Agency is 
acting as receiver, the Agency shall place the 
regulated entity in liquidation and proceed to 
realize upon the assets of the regulated entity 
in such manner as the Agency deems appro-
priate, including through the sale of assets, the 
transfer of assets to a limited-life regulated en-
tity established under subsection (i), or the ex-
ercise of any other rights or privileges granted 
to the Agency under this paragraph. 
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‘‘(F) ORGANIZATION
OF
NEW
ENTER-
PRISE.—The Agency shall, as receiver for an 
enterprise, organize a successor enterprise that 
will operate pursuant to subsection (i). 
‘‘(G) TRANSFER OR SALE OF ASSETS AND 
LIABILITIES.—The Agency may, as conservator 
or receiver, transfer or sell any asset or liability 
of the regulated entity in default, and may do 
so without any approval, assignment, or consent 
with respect to such transfer or sale. 
‘‘(H) PAYMENT OF VALID OBLIGATIONS.— 
The Agency, as conservator or receiver, shall, to 
the extent of proceeds realized from the per-
formance of contracts or sale of the assets of a 
regulated entity, pay all valid obligations of the 
regulated entity that are due and payable at the 
time of the appointment of the Agency as con-
servator or receiver, in accordance with the pre-
scriptions and limitations of this section. 
‘‘(I) SUBPOENA AUTHORITY.— 
‘‘(i) IN GENERAL.— 
‘‘(I) AGENCY
AUTHORITY.—The 
Agency may, as conservator or re-
ceiver, and for purposes of carrying 
out any power, authority, or duty with 
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respect to a regulated entity (includ-
ing determining any claim against the 
regulated entity and determining and 
realizing upon any asset of any person 
in the course of collecting money due 
the regulated entity), exercise any 
power established under section 1348. 
‘‘(II) APPLICABILITY OF LAW.— 
The provisions of section 1348 shall 
apply with respect to the exercise of 
any power under this subparagraph, 
in the same manner as such provi-
sions apply under that section. 
‘‘(ii) SUBPOENA.—A subpoena or sub-
poena duces tecum may be issued under 
clause (i) only by, or with the written ap-
proval of, the Director, or the designee of 
the Director. 
‘‘(iii) RULE OF CONSTRUCTION.—This 
subsection shall not be construed to limit 
any rights that the Agency, in any capac-
ity, might otherwise have under section 
1317 or 1379B. 
‘‘(J) INCIDENTAL
POWERS.—The Agency 
may, as conservator or receiver— 
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‘‘(i) exercise all powers and authori-
ties specifically granted to conservators or 
receivers, respectively, under this section, 
and such incidental powers as shall be nec-
essary to carry out such powers; and 
‘‘(ii) take any action authorized by 
this section, which the Agency determines 
is in the best interests of the regulated en-
tity or the Agency. 
‘‘(K) OTHER PROVISIONS.— 
‘‘(i) SHAREHOLDERS AND CREDITORS 
OF
FAILED
REGULATED
ENTITY.—Not-
withstanding any other provision of law, 
the appointment of the Agency as receiver 
for a regulated entity pursuant to para-
graph (2) or (4) of subsection (a) and its 
succession, by operation of law, to the 
rights, titles, powers, and privileges de-
scribed in subsection (b)(2)(A) shall termi-
nate all rights and claims that the stock-
holders and creditors of the regulated enti-
ty may have against the assets or charter 
of the regulated entity or the Agency aris-
ing as a result of their status as stock-
holders or creditors, except for their right 
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to payment, resolution, or other satisfac-
tion of their claims, as permitted under 
subsections (b)(9), (c), and (e). 
‘‘(ii) ASSETS
OF
REGULATED
ENTI-
TY.—Notwithstanding any other provision 
of law, for purposes of this section, the 
charter of a regulated entity shall not be 
considered an asset of the regulated entity. 
‘‘(3) AUTHORITY OF RECEIVER TO DETERMINE 
CLAIMS.— 
‘‘(A) IN GENERAL.—The Agency may, as 
receiver, determine claims in accordance with 
the requirements of this subsection and any 
regulations prescribed under paragraph (4). 
‘‘(B) NOTICE
REQUIREMENTS.—The re-
ceiver, in any case involving the liquidation or 
winding up of the affairs of a closed regulated 
entity, shall— 
‘‘(i) promptly publish a notice to the 
creditors of the regulated entity to present 
their claims, together with proof, to the re-
ceiver by a date specified in the notice 
which shall be not less than 90 days after 
the date of publication of such notice; and 
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‘‘(ii) republish such notice approxi-
mately 1 month and 2 months, respec-
tively, after the date of publication under 
clause (i). 
‘‘(C) MAILING
REQUIRED.—The receiver 
shall mail a notice similar to the notice pub-
lished under subparagraph (B)(i) at the time of 
such publication to any creditor shown on the 
books of the regulated entity— 
‘‘(i) at the last address of the creditor 
appearing in such books; or 
‘‘(ii) upon discovery of the name and 
address of a claimant not appearing on the 
books of the regulated entity, within 30 
days after the discovery of such name and 
address. 
‘‘(4) RULEMAKING
AUTHORITY
RELATING
TO 
DETERMINATION OF CLAIMS.—Subject to subsection 
(c), the Director may prescribe regulations regarding 
the allowance or disallowance of claims by the re-
ceiver and providing for administrative determina-
tion of claims and review of such determination. 
‘‘(5) PROCEDURES
FOR
DETERMINATION
OF 
CLAIMS.— 
‘‘(A) DETERMINATION PERIOD.— 
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155 
‘‘(i) IN GENERAL.—Before the end of 
the 180-day period beginning on the date 
on which any claim against a regulated en-
tity is filed with the Agency as receiver, 
the Agency shall determine whether to 
allow or disallow the claim and shall notify 
the claimant of any determination with re-
spect to such claim. 
‘‘(ii) EXTENSION OF TIME.—The pe-
riod described in clause (i) may be ex-
tended by a written agreement between the 
claimant and the Agency. 
‘‘(iii) MAILING
OF
NOTICE
SUFFI-
CIENT.—The requirements of clause (i) 
shall be deemed to be satisfied if the notice 
of any determination with respect to any 
claim is mailed to the last address of the 
claimant which appears— 
‘‘(I) on the books of the regu-
lated entity; 
‘‘(II) in the claim filed by the 
claimant; or 
‘‘(III) in documents submitted in 
proof of the claim. 
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156 
‘‘(iv) CONTENTS OF NOTICE OF DIS-
ALLOWANCE.—If any claim filed under 
clause (i) is disallowed, the notice to the 
claimant shall contain— 
‘‘(I) a statement of each reason 
for the disallowance; and 
‘‘(II) the procedures available for 
obtaining agency review of the deter-
mination to disallow the claim or judi-
cial determination of the claim. 
‘‘(B) ALLOWANCE
OF
PROVEN
CLAIM.— 
The receiver shall allow any claim received on 
or before the date specified in the notice pub-
lished under paragraph (3)(B)(i) by the receiver 
from any claimant which is proved to the satis-
faction of the receiver. 
‘‘(C) DISALLOWANCE
OF
CLAIMS
FILED 
AFTER FILING PERIOD.—Claims filed after the 
date specified in the notice published under 
paragraph (3)(B)(i), or the date specified under 
paragraph (3)(C), shall be disallowed and such 
disallowance shall be final. 
‘‘(D) AUTHORITY TO DISALLOW CLAIMS.— 
‘‘(i) IN GENERAL.—The receiver may 
disallow any portion of any claim by a 
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creditor or claim of security, preference, or 
priority which is not proved to the satisfac-
tion of the receiver. 
‘‘(ii) 
PAYMENTS
TO
LESS
THAN 
FULLY SECURED CREDITORS.—In the case 
of a claim of a creditor against a regulated 
entity which is secured by any property or 
other asset of such regulated entity, the re-
ceiver— 
‘‘(I) may treat the portion of 
such claim which exceeds an amount 
equal to the fair market value of such 
property or other asset as an unse-
cured claim against the regulated en-
tity; and 
‘‘(II) may not make any payment 
with respect to such unsecured por-
tion of the claim, other than in con-
nection with the disposition of all 
claims of unsecured creditors of the 
regulated entity. 
‘‘(iii) EXCEPTIONS.—No provision of 
this paragraph shall apply with respect 
to— 
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158 
‘‘(I) any extension of credit from 
any Federal Reserve Bank, Federal 
Home Loan Bank, or the United 
States Treasury; or 
‘‘(II) any security interest in the 
assets of the regulated entity securing 
any such extension of credit. 
‘‘(E) NO
JUDICIAL
REVIEW
OF
DETER-
MINATION PURSUANT TO SUBPARAGRAPH (D).— 
No court may review the determination of the 
Agency under subparagraph (D) to disallow a 
claim. 
‘‘(F) LEGAL EFFECT OF FILING.— 
‘‘(i) 
STATUTE
OF
LIMITATION 
TOLLED.—For purposes of any applicable 
statute of limitations, the filing of a claim 
with the receiver shall constitute a com-
mencement of an action. 
‘‘(ii) NO PREJUDICE TO OTHER AC-
TIONS.—Subject to paragraph (10), the fil-
ing of a claim with the receiver shall not 
prejudice any right of the claimant to con-
tinue any action which was filed before the 
date of the appointment of the receiver, 
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subject to the determination of claims by 
the receiver. 
‘‘(6) PROVISION FOR JUDICIAL DETERMINATION 
OF CLAIMS.— 
‘‘(A) IN GENERAL.—The claimant may file 
suit on a claim (or continue an action com-
menced before the appointment of the receiver) 
in the district or territorial court of the United 
States for the district within which the prin-
cipal place of business of the regulated entity is 
located or the United States District Court for 
the District of Columbia (and such court shall 
have jurisdiction to hear such claim), before the 
end of the 60-day period beginning on the ear-
lier of— 
‘‘(i) the end of the period described in 
paragraph (5)(A)(i) with respect to any 
claim against a regulated entity for which 
the Agency is receiver; or 
‘‘(ii) the date of any notice of dis-
allowance of such claim pursuant to para-
graph (5)(A)(i). 
‘‘(B) STATUTE OF LIMITATIONS.—A claim 
shall be deemed to be disallowed (other than 
any portion of such claim which was allowed by 
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160 
the receiver), and such disallowance shall be 
final, and the claimant shall have no further 
rights or remedies with respect to such claim, 
if the claimant fails, before the end of the 60- 
day period described under subparagraph (A), 
to file suit on such claim (or continue an action 
commenced before the appointment of the re-
ceiver). 
‘‘(7) REVIEW OF CLAIMS.— 
‘‘(A) OTHER REVIEW PROCEDURES.— 
‘‘(i) IN GENERAL.—The Agency shall 
establish such alternative dispute resolu-
tion processes as may be appropriate for 
the resolution of claims filed under para-
graph (5)(A)(i). 
‘‘(ii) CRITERIA.—In establishing alter-
native dispute resolution processes, the 
Agency shall strive for procedures which 
are expeditious, fair, independent, and low 
cost. 
‘‘(iii) VOLUNTARY BINDING OR NON-
BINDING PROCEDURES.—The Agency may 
establish both binding and nonbinding 
processes under this subparagraph, which 
may be conducted by any government or 
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161 
private party. All parties, including the 
claimant and the Agency, must agree to 
the use of the process in a particular case. 
‘‘(B) CONSIDERATION
OF
INCENTIVES.— 
The Agency shall seek to develop incentives for 
claimants to participate in the alternative dis-
pute resolution process. 
‘‘(8) 
EXPEDITED
DETERMINATION
OF 
CLAIMS.— 
‘‘(A) ESTABLISHMENT
REQUIRED.—The 
Agency shall establish a procedure for expedited 
relief outside of the routine claims process es-
tablished under paragraph (5) for claimants 
who— 
‘‘(i) allege the existence of legally 
valid and enforceable or perfected security 
interests in assets of any regulated entity 
for which the Agency has been appointed 
receiver; and 
‘‘(ii) allege that irreparable injury will 
occur if the routine claims procedure is fol-
lowed. 
‘‘(B) DETERMINATION
PERIOD.—Before 
the end of the 90-day period beginning on the 
date on which any claim is filed in accordance 
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162 
with the procedures established under subpara-
graph (A), the Director shall— 
‘‘(i) determine— 
‘‘(I) whether to allow or disallow 
such claim; or 
‘‘(II) whether such claim should 
be determined pursuant to the proce-
dures established under paragraph 
(5); and 
‘‘(ii) notify the claimant of the deter-
mination, and if the claim is disallowed, 
provide a statement of each reason for the 
disallowance and the procedure for obtain-
ing agency review or judicial determina-
tion. 
‘‘(C) PERIOD FOR FILING OR RENEWING 
SUIT.—Any claimant who files a request for ex-
pedited relief shall be permitted to file a suit, 
or to continue a suit filed before the date of ap-
pointment of the receiver, seeking a determina-
tion of the rights of the claimant with respect 
to such security interest after the earlier of— 
‘‘(i) the end of the 90-day period be-
ginning on the date of the filing of a re-
quest for expedited relief; or 
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‘‘(ii) the date on which the Agency de-
nies the claim. 
‘‘(D) STATUTE
OF
LIMITATIONS.—If an 
action described under subparagraph (C) is not 
filed, or the motion to renew a previously filed 
suit is not made, before the end of the 30-day 
period beginning on the date on which such ac-
tion or motion may be filed under subparagraph 
(B), the claim shall be deemed to be disallowed 
as of the end of such period (other than any 
portion of such claim which was allowed by the 
receiver), such disallowance shall be final, and 
the claimant shall have no further rights or 
remedies with respect to such claim. 
‘‘(E) LEGAL EFFECT OF FILING.— 
‘‘(i) 
STATUTE
OF
LIMITATION 
TOLLED.—For purposes of any applicable 
statute of limitations, the filing of a claim 
with the receiver shall constitute a com-
mencement of an action. 
‘‘(ii) NO PREJUDICE TO OTHER AC-
TIONS.—Subject to paragraph (10), the fil-
ing of a claim with the receiver shall not 
prejudice any right of the claimant to con-
tinue any action that was filed before the 
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appointment of the receiver, subject to the 
determination of claims by the receiver. 
‘‘(9) PAYMENT OF CLAIMS.— 
‘‘(A) IN GENERAL.—The receiver may, in 
the discretion of the receiver, and to the extent 
that funds are available from the assets of the 
regulated entity, pay creditor claims, in such 
manner and amounts as are authorized under 
this section, which are— 
‘‘(i) allowed by the receiver; 
‘‘(ii) approved by the Agency pursuant 
to a final determination pursuant to para-
graph (7) or (8); or 
‘‘(iii) determined by the final judg-
ment of any court of competent jurisdic-
tion. 
‘‘(B) AGREEMENTS AGAINST THE INTER-
EST
OF
THE
AGENCY.—No agreement that 
tends to diminish or defeat the interest of the 
Agency in any asset acquired by the Agency as 
receiver under this section shall be valid against 
the Agency unless such agreement is in writing 
and executed by an authorized officer or rep-
resentative of the regulated entity. 
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165 
‘‘(C) 
PAYMENT
OF
DIVIDENDS
ON 
CLAIMS.—The receiver may, in the sole discre-
tion of the receiver, pay from the assets of the 
regulated entity dividends on proved claims at 
any time, and no liability shall attach to the 
Agency by reason of any such payment, for fail-
ure to pay dividends to a claimant whose claim 
is not proved at the time of any such payment. 
‘‘(D) RULEMAKING
AUTHORITY
OF
THE 
DIRECTOR.—The Director may prescribe such 
rules, including definitions of terms, as the Di-
rector deems appropriate to establish a single 
uniform interest rate for, or to make payments 
of post-insolvency interest to creditors holding 
proven claims against the receivership estates of 
the regulated entity, following satisfaction by 
the receiver of the principal amount of all cred-
itor claims. 
‘‘(10) SUSPENSION OF LEGAL ACTIONS.— 
‘‘(A) IN GENERAL.—After the appointment 
of a conservator or receiver for a regulated enti-
ty, the conservator or receiver may, in any judi-
cial action or proceeding to which such regu-
lated entity is or becomes a party, request a 
stay for a period not to exceed— 
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‘‘(i) 45 days, in the case of any con-
servator; and 
‘‘(ii) 90 days, in the case of any re-
ceiver. 
‘‘(B) GRANT OF STAY BY ALL COURTS RE-
QUIRED.—Upon receipt of a request by the con-
servator or receiver under subparagraph (A) for 
a stay of any judicial action or proceeding in 
any court with jurisdiction of such action or 
proceeding, the court shall grant such stay as 
to all parties. 
‘‘(11) ADDITIONAL RIGHTS AND DUTIES.— 
‘‘(A) PRIOR
FINAL
ADJUDICATION.—The 
Agency shall abide by any final unappealable 
judgment of any court of competent jurisdiction 
which was rendered before the appointment of 
the Agency as conservator or receiver. 
‘‘(B) RIGHTS AND REMEDIES OF CONSER-
VATOR OR RECEIVER.—In the event of any ap-
pealable judgment, the Agency as conservator 
or receiver— 
‘‘(i) shall have all of the rights and 
remedies available to the regulated entity 
(before the appointment of such conser-
vator or receiver) and the Agency, includ-
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ing removal to Federal court and all appel-
late rights; and 
‘‘(ii) shall not be required to post any 
bond in order to pursue such remedies. 
‘‘(C) NO ATTACHMENT OR EXECUTION.— 
No attachment or execution may issue by any 
court upon assets in the possession of the re-
ceiver, or upon the charter, of a regulated enti-
ty for which the Agency has been appointed re-
ceiver. 
‘‘(D) LIMITATION ON JUDICIAL REVIEW.— 
Except as otherwise provided in this subsection, 
no court shall have jurisdiction over— 
‘‘(i) any claim or action for payment 
from, or any action seeking a determina-
tion of rights with respect to, the assets or 
charter of any regulated entity for which 
the Agency has been appointed receiver; or 
‘‘(ii) any claim relating to any act or 
omission of such regulated entity or the 
Agency as receiver. 
‘‘(E) DISPOSITION OF ASSETS.—In exer-
cising any right, power, privilege, or authority 
as conservator or receiver in connection with 
any sale or disposition of assets of a regulated 
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entity for which the Agency has been appointed 
conservator or receiver, the Agency shall con-
duct its operations in a manner which— 
‘‘(i) maximizes the net present value 
return from the sale or disposition of such 
assets; 
‘‘(ii) minimizes the amount of any loss 
realized in the resolution of cases; and 
‘‘(iii) ensures adequate competition 
and fair and consistent treatment of 
offerors. 
‘‘(12) STATUTE OF LIMITATIONS FOR ACTIONS 
BROUGHT BY CONSERVATOR OR RECEIVER.— 
‘‘(A) IN GENERAL.—Notwithstanding any 
provision of any contract, the applicable statute 
of limitations with regard to any action brought 
by the Agency as conservator or receiver shall 
be— 
‘‘(i) in the case of any contract claim, 
the longer of— 
‘‘(I) the 6-year period beginning 
on the date on which the claim ac-
crues; or 
‘‘(II) the period applicable under 
State law; and 
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‘‘(ii) in the case of any tort claim, the 
longer of— 
‘‘(I) the 3-year period beginning 
on the date on which the claim ac-
crues; or 
‘‘(II) the period applicable under 
State law. 
‘‘(B) DETERMINATION OF THE DATE ON 
WHICH
A
CLAIM
ACCRUES.—For purposes of 
subparagraph (A), the date on which the stat-
ute of limitations begins to run on any claim 
described in such subparagraph shall be the 
later of— 
‘‘(i) the date of the appointment of 
the Agency as conservator or receiver; or 
‘‘(ii) the date on which the cause of 
action accrues. 
‘‘(13) REVIVAL OF EXPIRED STATE CAUSES OF 
ACTION.— 
‘‘(A) IN GENERAL.—In the case of any tort 
claim described under clause (ii) for which the 
statute of limitations applicable under State law 
with respect to such claim has expired not more 
than 5 years before the appointment of the 
Agency as conservator or receiver, the Agency 
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may bring an action as conservator or receiver 
on such claim without regard to the expiration 
of the statute of limitations applicable under 
State law. 
‘‘(B) CLAIMS
DESCRIBED.—A tort claim 
referred to under clause (i) is a claim arising 
from fraud, intentional misconduct resulting in 
unjust enrichment, or intentional misconduct 
resulting in substantial loss to the regulated en-
tity. 
‘‘(14) ACCOUNTING AND RECORDKEEPING RE-
QUIREMENTS.— 
‘‘(A) IN GENERAL.—The Agency as conser-
vator or receiver shall, consistent with the ac-
counting and reporting practices and proce-
dures established by the Agency, maintain a full 
accounting of each conservatorship and receiv-
ership or other disposition of a regulated entity 
in default. 
‘‘(B) ANNUAL ACCOUNTING OR REPORT.— 
With respect to each conservatorship or receiv-
ership, the Agency shall make an annual ac-
counting or report available to the Board, the 
Comptroller General of the United States, the 
Committee on Banking, Housing, and Urban 
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Affairs of the Senate, and the Committee on 
Financial Services of the House of Representa-
tives. 
‘‘(C) AVAILABILITY OF REPORTS.—Any re-
port prepared under subparagraph (B) shall be 
made available by the Agency upon request to 
any shareholder of a regulated entity or any 
member of the public. 
‘‘(D) RECORDKEEPING
REQUIREMENT.— 
After the end of the 6-year period beginning on 
the date on which the conservatorship or receiv-
ership is terminated by the Director, the Agen-
cy may destroy any records of such regulated 
entity which the Agency, in the discretion of the 
Agency, determines to be unnecessary, unless 
directed not to do so by a court of competent 
jurisdiction or governmental agency, or prohib-
ited by law. 
‘‘(15) FRAUDULENT TRANSFERS.— 
‘‘(A) IN GENERAL.—The Agency, as con-
servator or receiver, may avoid a transfer of 
any interest of an entity-affiliated party, or any 
person determined by the conservator or re-
ceiver to be a debtor of the regulated entity, in 
property, or any obligation incurred by such 
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party or person, that was made within 5 years 
of the date on which the Agency was appointed 
conservator or receiver, if such party or person 
voluntarily or involuntarily made such transfer 
or incurred such liability with the intent to 
hinder, delay, or defraud the regulated entity, 
the Agency, the conservator, or receiver. 
‘‘(B) RIGHT OF RECOVERY.—To the extent 
a transfer is avoided under subparagraph (A), 
the conservator or receiver may recover, for the 
benefit of the regulated entity, the property 
transferred, or, if a court so orders, the value 
of such property (at the time of such transfer) 
from— 
‘‘(i) the initial transferee of such 
transfer or the entity-affiliated party or 
person for whose benefit such transfer was 
made; or 
‘‘(ii) any immediate or mediate trans-
feree of any such initial transferee. 
‘‘(C) RIGHTS OF TRANSFEREE OR OBLI-
GEE.—The conservator or receiver may not re-
cover under subparagraph (B) from— 
‘‘(i) any transferee that takes for 
value, including satisfaction or securing of 
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a present or antecedent debt, in good faith; 
or 
‘‘(ii) any immediate or mediate good 
faith transferee of such transferee. 
‘‘(D) RIGHTS UNDER THIS PARAGRAPH.— 
The rights under this paragraph of the conser-
vator or receiver described under subparagraph 
(A) shall be superior to any rights of a trustee 
or any other party (other than any party which 
is a Federal agency) under title 11, United 
States Code. 
‘‘(16) ATTACHMENT OF ASSETS AND OTHER IN-
JUNCTIVE RELIEF.—Subject to paragraph (17), any 
court of competent jurisdiction may, at the request 
of the conservator or receiver, issue an order in ac-
cordance with rule 65 of the Federal Rules of Civil 
Procedure, including an order placing the assets of 
any person designated by the conservator or receiver 
under the control of the court, and appointing a 
trustee to hold such assets. 
‘‘(17) STANDARDS OF PROOF.—Rule 65 of the 
Federal Rules of Civil Procedure shall apply with re-
spect to any proceeding under paragraph (16) with-
out regard to the requirement of such rule that the 
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applicant show that the injury, loss, or damage is ir-
reparable and immediate. 
‘‘(18) TREATMENT OF CLAIMS ARISING FROM 
BREACH OF CONTRACTS EXECUTED BY THE CON-
SERVATOR OR RECEIVER.— 
‘‘(A) IN GENERAL.—Notwithstanding any 
other provision of this subsection, any final and 
unappealable judgment for monetary damages 
entered against the conservator or receiver for 
the breach of an agreement executed or ap-
proved in writing by the conservator or receiver 
after the date of its appointment, shall be paid 
as an administrative expense of the conservator 
or receiver. 
‘‘(B) NO LIMITATION OF POWER.—Nothing 
in this paragraph shall be construed to limit the 
power of the conservator or receiver to exercise 
any rights under contract or law, including to 
terminate, breach, cancel, or otherwise dis-
continue such agreement. 
‘‘(19) GENERAL EXCEPTIONS.— 
‘‘(A) LIMITATIONS.—The rights of the 
conservator or receiver appointed under this 
section shall be subject to the limitations on the 
powers of a receiver under sections 402 through 
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407 of the Federal Deposit Insurance Corpora-
tion Improvement Act of 1991 (12 U.S.C. 4402 
through 4407). 
‘‘(B) MORTGAGES HELD IN TRUST.— 
‘‘(i) IN
GENERAL.—Any mortgage, 
pool of mortgages, or interest in a pool of 
mortgages held in trust, custodial, or agen-
cy capacity by a regulated entity for the 
benefit of any person other than the regu-
lated entity shall not be available to satisfy 
the claims of creditors generally, except 
that nothing in this clause shall be con-
strued to expand or otherwise affect the 
authority of any regulated entity. 
‘‘(ii) HOLDING OF MORTGAGES.—Any 
mortgage, pool of mortgages, or interest in 
a pool of mortgages described in clause (i) 
shall be held by the conservator or receiver 
appointed under this section for the bene-
ficial owners of such mortgage, pool of 
mortgages, or interest in accordance with 
the terms of the agreement creating such 
trust, custodial, or other agency arrange-
ment. 
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‘‘(iii) LIABILITY OF CONSERVATOR OR 
RECEIVER.—The liability of the conser-
vator or receiver appointed under this sec-
tion for damages shall, in the case of any 
contingent or unliquidated claim relating 
to the mortgages held in trust, be esti-
mated in accordance with the regulations 
of the Director. 
‘‘(c) PRIORITY
OF EXPENSES
AND UNSECURED 
CLAIMS.— 
‘‘(1) IN GENERAL.—Unsecured claims against a 
regulated entity, or the receiver therefor, that are 
proven to the satisfaction of the receiver shall have 
priority in the following order: 
‘‘(A) Administrative expenses of the re-
ceiver. 
‘‘(B) Any other general or senior liability 
of the regulated entity (which is not a liability 
described under subparagraph (C) or (D). 
‘‘(C) Any obligation subordinated to gen-
eral creditors (which is not an obligation de-
scribed under subparagraph (D)). 
‘‘(D) Any obligation to shareholders or 
members arising as a result of their status as 
shareholder or members. 
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‘‘(2) CREDITORS
SIMILARLY
SITUATED.—All 
creditors that are similarly situated under paragraph 
(1) shall be treated in a similar manner, except that 
the receiver may take any action (including making 
payments) that does not comply with this subsection, 
if— 
‘‘(A) the Director determines that such ac-
tion is necessary to maximize the value of the 
assets of the regulated entity, to maximize the 
present value return from the sale or other dis-
position of the assets of the regulated entity, or 
to minimize the amount of any loss realized 
upon the sale or other disposition of the assets 
of the regulated entity; and 
‘‘(B) all creditors that are similarly situ-
ated under paragraph (1) receive not less than 
the amount provided in subsection (e)(2). 
‘‘(3) DEFINITION.—As used in this subsection, 
the term ‘administrative expenses of the receiver’ in-
cludes— 
‘‘(A) the actual, necessary costs and ex-
penses incurred by the receiver in preserving 
the assets of a failed regulated entity or liqui-
dating or otherwise resolving the affairs of a 
failed regulated entity; and 
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‘‘(B) any obligations that the receiver de-
termines are necessary and appropriate to fa-
cilitate the smooth and orderly liquidation or 
other resolution of the regulated entity. 
‘‘(d) PROVISIONS RELATING
TO CONTRACTS EN-
TERED INTO BEFORE APPOINTMENT OF CONSERVATOR 
OR RECEIVER.— 
‘‘(1) AUTHORITY TO REPUDIATE CONTRACTS.— 
In addition to any other rights a conservator or re-
ceiver may have, the conservator or receiver for any 
regulated entity may disaffirm or repudiate any con-
tract or lease— 
‘‘(A) to which such regulated entity is a 
party; 
‘‘(B) the performance of which the conser-
vator or receiver, in its sole discretion, deter-
mines to be burdensome; and 
‘‘(C) the disaffirmance or repudiation of 
which the conservator or receiver determines, in 
its sole discretion, will promote the orderly ad-
ministration of the affairs of the regulated enti-
ty. 
‘‘(2) TIMING
OF
REPUDIATION.—The conser-
vator or receiver shall determine whether or not to 
exercise the rights of repudiation under this sub-
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section within a reasonable period following such ap-
pointment. 
‘‘(3) CLAIMS
FOR
DAMAGES
FOR
REPUDI-
ATION.— 
‘‘(A) IN GENERAL.—Except as otherwise 
provided under subparagraph (C) and para-
graphs (4), (5), and (6), the liability of the con-
servator or receiver for the disaffirmance or re-
pudiation of any contract pursuant to para-
graph (1) shall be— 
‘‘(i) limited to actual direct compen-
satory damages; and 
‘‘(ii) determined as of— 
‘‘(I) the date of the appointment 
of the conservator or receiver; or 
‘‘(II) in the case of any contract 
or agreement referred to in paragraph 
(8), the date of the disaffirmance or 
repudiation of such contract or agree-
ment. 
‘‘(B) NO
LIABILITY
FOR
OTHER
DAM-
AGES.—For purposes of subparagraph (A), the 
term ‘actual direct compensatory damages’ shall 
not include— 
‘‘(i) punitive or exemplary damages; 
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‘‘(ii) damages for lost profits or op-
portunity; or 
‘‘(iii) damages for pain and suffering. 
‘‘(C) MEASURE OF DAMAGES FOR REPUDI-
ATION OF FINANCIAL CONTRACTS.—In the case 
of any qualified financial contract or agreement 
to which paragraph (8) applies, compensatory 
damages shall be— 
‘‘(i) deemed to include normal and 
reasonable costs of cover or other reason-
able measures of damages utilized in the 
industries for such contract and agreement 
claims; and 
‘‘(ii) paid in accordance with this sub-
section and subsection (e), except as other-
wise specifically provided in this section. 
‘‘(4) LEASES UNDER WHICH THE REGULATED 
ENTITY IS THE LESSEE.— 
‘‘(A) IN GENERAL.—If the conservator or 
receiver disaffirms or repudiates a lease under 
which the regulated entity was the lessee, the 
conservator or receiver shall not be liable for 
any damages (other than damages determined 
under subparagraph (B)) for the disaffirmance 
or repudiation of such lease. 
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‘‘(B) 
PAYMENTS
OF
RENT.—Notwith-
standing subparagraph (A), the lessor under a 
lease to which that subparagraph applies 
shall— 
‘‘(i) be entitled to the contractual rent 
accruing before the later of the date on 
which— 
‘‘(I) the notice of disaffirmance 
or repudiation is mailed; or 
‘‘(II) the disaffirmance or repudi-
ation becomes effective, unless the les-
sor is in default or breach of the 
terms of the lease; 
‘‘(ii) have no claim for damages under 
any acceleration clause or other penalty 
provision in the lease; and 
‘‘(iii) have a claim for any unpaid 
rent, subject to all appropriate offsets and 
defenses, due as of the date of the appoint-
ment, which shall be paid in accordance 
with this subsection and subsection (e). 
‘‘(5) LEASES UNDER WHICH THE REGULATED 
ENTITY IS THE LESSOR.— 
‘‘(A) IN GENERAL.—If the conservator or 
receiver repudiates an unexpired written lease 
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