175 
trator for an estate may commence or continue 
judicial, administrative, or other actions, in the 
name of the estate or in its own name on behalf 
of the estate, for the purpose of collecting, real-
izing on, or otherwise managing the cover pool 
held by the estate or exercising its other powers 
or duties on behalf of the estate. 
(K) ACTIONS AGAINST ESTATE.—No court 
may issue an attachment or execution on any 
property of an estate. Except at the request of 
the applicable covered bond regulator or as oth-
erwise provided in this subparagraph or sub-
paragraph (J), no court may take any action to 
restrain or affect the resolution of an estate 
under this subtitle. No person (including the 
applicable indenture trustee and any applicable 
covered bondholder) may commence or continue 
any judicial, administrative, or other action 
against the estate, the trustee, or any servicer 
or administrator or take any other act to affect 
the estate, the trustee, or any servicer or ad-
ministrator that is not expressly permitted by 
this subtitle, the oversight program, and the re-
lated transaction documents, except for a judi-
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176 
cial or administrative action to compel the re-
lease of funds that— 
(i) are available to the estate; 
(ii) are permitted to be distributed 
under this subtitle and the oversight pro-
gram; and 
(iii) are permitted and required to be 
distributed under the related transaction 
documents and any contracts executed by 
or on behalf of the estate. 
(L) SOVEREIGN
IMMUNITY.—Except in 
connection with a guarantee provided under 
paragraph (4) or any other contract executed 
by the applicable covered bond regulator under 
this section 343, the Secretary and the covered 
bond regulator shall be entitled to sovereign im-
munity in carrying out the provisions of this 
subtitle. 
(2) BORROWINGS AND CREDIT.— 
(A) IN GENERAL.—Any servicer or admin-
istrator for an estate created under subsection 
(b)(1) or (c)(2) may borrow funds or otherwise 
obtain credit, on behalf of and for the benefit 
of the estate, from any person in compliance 
with this paragraph (2) solely for the purpose 
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177 
of providing liquidity in the case of timing 
mismatches among the assets and the liabilities 
of the estate. Except with respect to an under-
writer, section 5 of the Securities Act of 1933, 
the Trust Indenture Act of 1939, and any State 
or local law requiring registration for an offer 
or sale of a security or registration or licensing 
of an issuer of, underwriter of, or broker or 
dealer in a security does not apply to the offer 
or sale under this paragraph (2) of a security 
that is not an equity security. 
(B) CONDITIONS.—A servicer or adminis-
trator may borrow funds or otherwise obtain 
credit under subparagraph (A)— 
(i) on terms affording the lender only 
claims or liens that are fully subordinated 
to the claims and interests of the applica-
ble indenture trustee and the applicable 
covered bondholders and all other claims 
against and interests in the estate, except 
for the residual interest, if the servicer or 
administrator certifies to the applicable 
covered bond regulator that, in the busi-
ness judgment of the servicer or adminis-
trator, the borrowing or credit is in the 
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178 
best interests of the estate and is expected 
to maximize the value and the proceeds of 
the cover pool held by the estate; or 
(ii) on terms affording the lender 
claims or liens that have priority over or 
are pari passu with the claims or interests 
of the applicable indenture trustee or the 
applicable covered bondholders or other 
claims against or interests in the estate, 
if— 
(I) the servicer or administrator 
certifies to the applicable covered 
bond regulator that, in the business 
judgment of the servicer or adminis-
trator, the borrowing or credit is in 
the best interests of the estate and is 
expected to maximize the value and 
the proceeds of the cover pool held by 
the estate; and 
(II) the applicable covered bond 
regulator authorizes the borrowing or 
credit. 
(C) LIMITED LIABILITY.—A servicer or ad-
ministrator shall not be liable for any error in 
business judgment when borrowing funds or 
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179 
otherwise obtaining credit under this paragraph 
(2) unless the servicer or administrator acted in 
bad faith or in willful disregard of its duties. 
(D) LIMITS ON BORROWINGS AND CRED-
IT.—Funds may not be borrowed or credit oth-
erwise obtained under subparagraph (A)— 
(i) for the purpose of investing in ad-
ditional portfolios of eligible assets through 
the issuance of new covered bonds; or 
(ii) otherwise for a purpose other than 
winding down the related covered bond 
program in compliance with this Act, the 
oversight program, and the related trans-
action documents. 
(E) STUDY ON BORROWINGS AND CRED-
IT.—The Comptroller General of the United 
States shall conduct a study on whether the 
Federal reserve banks should be authorized to 
lend funds or otherwise extend credit to an es-
tate under this paragraph (2) and, if so, what 
conditions and limits should be established to 
mitigate any risk that the United States Gov-
ernment could absorb credit losses on the cover 
pool held by the estate. The Comptroller Gen-
eral shall submit a report to the Committee on 
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180 
Banking, Housing, and Urban Affairs of the 
Senate and the Committee on Financial Serv-
ices of the House of Representatives on the re-
sults of the study not later than 6 months after 
the date of enactment of this Act. 
(3) DISTRIBUTIONS BY ESTATE.—All payments 
or other distributions by an estate shall be made at 
the times, in the amounts, and in the manner set 
forth in the covered bonds, the related transaction 
documents, and any contracts executed by or on be-
half of the estate in compliance with this subtitle 
and the oversight program. To the extent that the 
relative priority of the liabilities of the estate are not 
specified in or otherwise ascertainable from their 
terms, distributions shall be made on each distribu-
tion date under the covered bonds, the related trans-
action documents, or any contracts executed by or 
on behalf of the estate— 
(A) first, to pay accrued and unpaid super-
priority claims under paragraph (2)(B)(ii); 
(B) second, to pay accrued and unpaid ad-
ministrative expense claims under paragraph 
(1)(I), 
paragraph 
(2)(B)(ii), 
section 
343(b)(5)(A), or section 343(c)(6)(A); 
(C) third, to pay— 
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182 
timely, and irrevocably paid according to their 
terms. 
(5) CLOSING OF ESTATE.—After an estate has 
been fully administered, the trustee shall close the 
estate and, except as otherwise directed by the appli-
cable covered bond regulator, shall destroy all 
records of the estate. 
(6) NO LOSS TO TAXPAYERS.—Taxpayers shall 
bear no losses from the resolution of an estate under 
this subtitle. To the extent that the Secretary and 
the Corporation jointly determine that the Deposit 
Insurance Fund incurred actual losses that are high-
er because the covered bond program of an insured 
depository institution was subject to resolution 
under this subtitle rather than as part of the receiv-
ership of the institution under the Federal Deposit 
Insurance Act (12 U.S.C. 1811 et seq.), the Cor-
poration may exercise the powers available under 
section 7(b) of the Federal Deposit Insurance Act 
(12 U.S.C. 1817(b)) to recover an amount equal to 
those losses after consulting with the Secretary. 
SEC. 344. SECURITIES LAW PROVISIONS. 
(a) EXISTING EXEMPTIONS APPLICABLE TO COV-
ERED BONDS.— 
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183 
(1) TREATMENT
OF
CERTAIN
BANKS
AND 
OTHER
ENTITIES.—Any covered bond issued or 
guaranteed by a bank or by an eligible issuer de-
scribed in section 341(9)(D) and sponsored solely by 
1 or more banks for the sole purpose of issuing cov-
ered bonds is and shall be treated as a security 
issued or guaranteed by a bank under section 
3(a)(2) of the Securities Act of 1933 (15 U.S.C. 
77c(a)(2)), section 3(c)(3) of the Investment Com-
pany Act of 1940 (15 U.S.C. 80a–3(c)(3)), and sec-
tion 304(a)(4)(A) of the Trust Indenture Act of 
1939 (15 U.S.C. 77ddd(a)(4)(A)). No covered bond 
issued or guaranteed by a bank or by an eligible 
issuer described in section 341(9)(D) and sponsored 
solely by 1 or more banks for the sole purpose of 
issuing covered bonds shall be treated as an asset- 
backed security (as defined in section 3 of the Secu-
rities and Exchange Act of 1934 (15 U.S.C. 78c)). 
Each covered bond regulator for 1 or more banks 
shall adopt disclosure and reporting regulations for 
offers or sales of covered bonds by a bank or an eli-
gible issuer described in this paragraph. Such regu-
lations shall provide for uniform and consistent 
standards for such covered bond issuers, to the ex-
tent possible, and shall be consistent with existing 
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184 
regulations governing offers or sales of nonconvert-
ible debt. 
(2) TREATMENT
OF
CERTAIN
ASSOCIATIONS 
AND
COOPERATIVE
BANKS.—Any covered bond 
issued by an entity described in section 3(a)(5)(A) 
of 
the 
Securities 
Act 
of 
1933 
(15 
U.S.C. 
77c(a)(5)(A)) or by an eligible issuer described in 
section 341(9)(D) and sponsored solely by 1 or more 
such entities for the sole purpose of issuing covered 
bonds is and shall be treated as a security issued by 
such an entity under section 3(a)(5)(A) of the Secu-
rities Act of 1933 (15 U.S.C. 77c(a)(5)(A)), section 
3(c)(3) of the Investment Company Act of 1940 (15 
U.S.C. 80a–3(c)(3)), and section 304(a)(4)(A) of the 
Trust 
Indenture 
Act 
of 
1939 
(15 
U.S.C. 
77ddd(a)(4)(A)). No covered bond issued by an enti-
ty described in section 3(a)(5)(A) of the Securities 
Act of 1933 (15 U.S.C. 77c(a)(5)(A)) or by an eligi-
ble issuer described in section 341(9)(D) and spon-
sored solely by 1 or more such entities for the sole 
purpose of issuing covered bonds shall be treated as 
an asset-backed security (as defined in section 3 of 
the Securities and Exchange Act of 1934 (15 U.S.C. 
78c)). Each covered bond regulator for 1 or more 
entities described in section 3(a)(5)(A) of the Securi-
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185 
ties Act of 1933 (15 U.S.C. 77c(a)(5)(A)) shall 
adopt, as part of the securities regulations of the 
covered bond regulator, a separate scheme of reg-
istration, disclosure, and reporting obligations and 
exemptions for offers or sales of covered bonds that 
are described in this paragraph. Such regulations 
shall provide for uniform and consistent standards 
for such covered bond issuers, to the extent possible, 
and shall be consistent with regulations governing 
offers or sales of similar securities. 
(3) CONSTRUCTION.—No provision of this sub-
title, including paragraph (1) or (2), may be con-
strued or applied in a manner that impairs or limits 
any other exemption that is available under applica-
ble securities laws. 
(b) EXEMPTIONS FOR ESTATES.—Any estate that is 
or may be created under section 343(b)(1) or 343(c)(2) 
shall be exempt from all securities laws but— 
(1) shall be subject to the reporting require-
ments established by the applicable covered bond 
regulator under section 343(d)(1)(E)(iii); and 
(2) shall succeed to any requirement of the 
issuer to file such periodic information, documents, 
and reports in respect of the covered bonds as speci-
fied in section 13(a) of the Securities and Exchange 
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186 
Act of 1934 (15 U.S.C. 78m(a)) or rules established 
by an appropriate Federal banking agency. 
(c) EXEMPTIONS FOR RESIDUAL INTERESTS.—Any 
residual interest in an estate that is or may be created 
under section 343(b)(1) or 343(c)(2) shall be exempt from 
all securities laws. 
SEC. 345. MISCELLANEOUS PROVISIONS. 
(a) DOMESTIC SECURITIES.—Section 106(a)(1) of 
the Secondary Mortgage Market Enhancement Act of 
1984 (15 U.S.C. 77r–1(a)(1)) is amended— 
(1) in subparagraph (C), by striking ‘‘or’’ at 
the end; 
(2) in subparagraph (D), by adding ‘‘or’’ at the 
end; and 
(3) by inserting after subparagraph (D) the fol-
lowing: 
‘‘(E) covered bonds (as defined in section 341 
of the Protecting American Taxpayers and Home-
owners Act of 2018),’’. 
(b) TAX TREATMENT
OF COVERED BOND PRO-
GRAMS.— 
(1) TREATMENT OF ESTATES CREATED UNDER 
COVERED BOND PROGRAMS.—Section 7701 of the 
Internal Revenue Code of 1986 is amended by redes-
ignating subsection (p) as subsection (q) and by in-
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187 
serting after subsection (o) the following new sub-
section: 
‘‘(p) TREATMENT
OF ESTATES CREATED UNDER 
COVERED BOND PROGRAMS.—For purposes of this title— 
‘‘(1) TREATMENT AS DISREGARDED ENTITY.— 
Any estate created with respect to a covered bond 
program— 
‘‘(A) shall not be treated as an entity sub-
ject to taxation separate from the owner of the 
residual interest with respect to such estate, 
and 
‘‘(B) shall be treated as a disregarded enti-
ty that is owned by the owner of such residual 
interest. 
‘‘(2) LIMITATIONS
ON
TREATMENT
AS
DIS-
REGARDED ENTITY.— 
‘‘(A) MAXIMUM
DURATION.—Paragraph 
(1) shall not apply with respect to an estate 
after the earlier of— 
‘‘(i) the end of the 30-year period be-
ginning on the date of the creation of such 
estate, or 
‘‘(ii) the end of the 180-day period be-
ginning on the date of the final payment 
on the last outstanding covered bond that 
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188 
is secured by the cover pool held by such 
estate. 
‘‘(B) RESTRICTIONS ON OWNER OF RESID-
UAL
INTEREST.—Paragraph (1) shall apply 
with respect to an estate for any period only 
if— 
‘‘(i) at no time during such period 
does more than one person hold a residual 
interest with respect to such estate, 
‘‘(ii) such person is— 
‘‘(I) subject to tax under subtitle 
A on the net income of such estate for 
the taxable year of such person which 
includes such period, or 
‘‘(II) a conservator, receiver, liq-
uidating agent, or trustee in bank-
ruptcy with respect to the issuer for 
such period, and 
‘‘(iii) such person is not a regulated 
investment company (as defined in section 
851) or real estate investment trust (as de-
fined in section 856) for the taxable year 
which includes such period. 
‘‘(3) TREATMENT AS CORPORATION.—With re-
spect to any period for which paragraph (1) does not 
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189 
apply to an estate created with respect to a covered 
bond program, such estate shall be treated as a cor-
poration. 
‘‘(4) COORDINATION
WITH
RULES
FOR
TAX-
ABLE MORTGAGE POOLS.—No portion of any estate 
created with respect to a covered bond program shall 
be treated as a taxable mortgage pool for purposes 
of subsection (i) during any period for which para-
graph (1) applies to such estate. 
‘‘(5) DEFINITIONS.—For purposes of this sub-
section, the terms ‘covered bond program’, ‘cover 
pool’, ‘estate’, and ‘residual interest’ shall each have 
the same respective meanings as when used for pur-
poses of subtitle D of title III of the Protecting 
American Taxpayers and Homeowners Act of 2018. 
‘‘(6) CROSS REFERENCES.— 
‘‘(A) For nonrecognition with respect to 
certain transfers under covered bond programs, 
see section 1001(f). 
‘‘(B) For excise tax on estates created 
under covered bond programs by reason of de-
fault, see section 4475.’’. 
(2) TREATMENT
OF
CERTAIN
TRANSFERS 
UNDER COVERED BOND PROGRAMS.—Section 1001 
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190 
of such Code is amended by adding at the end the 
following new subsection: 
‘‘(f) CERTAIN TRANSFERS UNDER COVERED BOND 
PROGRAMS.— 
‘‘(1) IN GENERAL.—With respect to any cov-
ered bond program, none of the following shall be 
treated as a taxable exchange of a covered bond to 
a covered bond holder or to a notional principal con-
tract counterparty: 
‘‘(A) The transfer of all of the assets and 
liabilities of such program. 
‘‘(B) The creation of an estate with respect 
to such program. 
‘‘(C) The transfer of the residual interest 
in such estate. 
‘‘(2) DEFINITIONS.—For purposes of this sub-
section, the terms ‘covered bond program’, ‘estate’, 
and ‘residual interest’ shall each have the same re-
spective meanings as when used for purposes of sub-
title D of title III of the Protecting American Tax-
payers and Homeowners Act of 2018.’’. 
(3) EXCISE TAX ON ESTATES CREATED UNDER 
COVERED
BOND
PROGRAMS
BY
REASON
OF
DE-
FAULT.— 
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191 
(A) IN
GENERAL.—Chapter 36 of such 
Code is amended by inserting after subchapter 
B the following new subchapter: 
‘‘Subchapter C—Tax on Certain Estates 
Created Under Covered Bond Programs 
‘‘Sec. 4475. Tax on estates created under covered bond programs by reason of 
default. 
‘‘SEC. 4475. TAX ON ESTATES CREATED UNDER COVERED 
BOND PROGRAMS BY REASON OF DEFAULT. 
‘‘(a) IMPOSITION OF TAX.—A tax is hereby imposed 
on the creation of an estate by operation of section 
343(b)(1) of the Protecting American Taxpayers and 
Homeowners Act of 2018. 
‘‘(b) AMOUNT OF TAX.—The tax imposed under sub-
section (a) with respect to the creation of any estate shall 
be equal to 1 percent of the principal amount of the cov-
ered bonds secured by the cover pool with respect to such 
estate determined as of the close of the day before the 
creation of such estate. 
‘‘(c) BY WHOM PAID.—The tax imposed under sub-
section (a) shall be paid by the issuer of the covered bonds 
with respect to the covered bond program with respect to 
which the estate referred to in subsection (a) is created. 
‘‘(d) NO EFFECT ON COVER POOL.—The tax im-
posed under subsection (a) shall not reduce the assets of 
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192 
the cover pool and no liability for such tax shall attach 
to the estate or to the assets of the cover pool. 
‘‘(e) REFUND IN CASE OF BANKRUPTCY, ETC.—If an 
issuer liable for the tax imposed under subsection (a) en-
ters conservatorship, receivership, liquidation, or bank-
ruptcy during the 5-year period beginning on the date of 
the creation of the estate referred to in subsection (a), 
such liability shall be extinguished and any such tax paid 
shall refunded to the issuer immediately upon such event. 
‘‘(f) DEFINITIONS.—For purposes of this section, the 
terms ‘covered bond program’, ‘cover pool’, and ‘estate’ 
shall each have the same respective meanings as when 
used for purposes of subtitle D of title III of the Pro-
tecting American Taxpayers and Homeowners Act of 
2018.’’. 
(B) CLERICAL AMENDMENT.—The table of 
subchapters for chapter 36 of such Code is 
amended by inserting after the item relating to 
subchapter B the following new item: 
‘‘SUBCHAPTER C—TAX ON CERTAIN ESTATES CREATED UNDER COVERED 
BOND PROGRAMS’’. 
(4) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to estates created, and 
transfers made, after the date of the enactment of 
this Act. 
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193 
(c) STATE AND LOCAL TAXES.—The Secretary may 
promulgate regulations under this subtitle that are similar 
to the provisions of section 346 of title 11, United States 
Code, including regulations to provide that— 
(1) if an estate created under section 343(b)(1) 
or 343(c)(2) is not treated as an entity subject to 
taxation separate from the owner of the residual in-
terest for purposes of the Internal Revenue Code of 
1986 (26 U.S.C. 1 et seq.), no separate taxable enti-
ty shall be created with respect to the estate for pur-
poses of any State or local law imposing a tax on 
or measured by income; and 
(2) if a transfer or assumption of an asset or 
liability to or by an estate or an eligible issuer under 
section 343(b) or 343(c) does not cause or constitute 
an event in which gain or loss is recognized under 
section 1001 of the Internal Revenue Code of 1986 
(26 U.S.C. 1001), the transfer or assumption shall 
not cause or constitute a disposition for purposes of 
any provision assigning tax consequences to a dis-
position in connection with any State or local law 
imposing a tax on or measured by income. 
(d) NO CONFLICT.—The provisions of this subtitle 
shall apply, notwithstanding any provision of the Federal 
Deposit Insurance Act (12 U.S.C. 1811 et seq.), title 11, 
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194 
United States Code, title II of the Dodd-Frank Wall 
Street Reform and Consumer Protection Act (12 U.S.C. 
5381 et seq.), or any other provision of Federal law with 
respect to conservatorship, receivership, liquidation, or 
bankruptcy. No provision of the Federal Deposit Insur-
ance Act (12 U.S.C. 1811 et seq.), title 11, United States 
Code, title II of the Dodd-Frank Wall Street Reform and 
Consumer Protection Act (12 U.S.C. 5381 et seq.), or any 
other provision of Federal law with respect to conservator-
ship, receivership, liquidation, or bankruptcy may be con-
strued or applied in a manner that defeats or interferes 
with the purpose or operation of this subtitle. 
(e) ANNUAL REPORT TO CONGRESS.—The covered 
bond regulators shall, annually— 
(1) submit a joint report to the Congress de-
scribing the current state of the covered bond mar-
ket in the United States; and 
(2) testify on the current state of the covered 
bond market in the United States before the Com-
mittee on Financial Services of the House of Rep-
resentatives and the Committee on Banking, Hous-
ing, and Urban Affairs of the Senate. 
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195 
TITLE IV—REMOVING BARRIERS 
TO NEW INVESTMENT 
SEC. 401. BASEL III LIQUIDITY COVERAGE RATIO AMEND-
MENTS. 
(a) IN GENERAL.—In implementing the Basel III Li-
quidity Coverage Ratio amendments, the Board of Gov-
ernors of the Federal Reserve System, the Federal Deposit 
Insurance Corporation, and the Office of the Comptroller 
of the Currency may not require, as a condition for status 
as a high quality liquid asset, that residential mortgage- 
backed securities be collateralized only by (or be 
collateralized by a certain percentage of) full recourse 
mortgage loans. 
(b) DEFINITION.—The term ‘‘Basel III Liquidity 
Coverage Ratio amendments’’ means the final rule issued 
by the Comptroller of the Currency, the Board of Gov-
ernors of the Federal Reserve System, and the Federal 
Deposit Insurance Corporation titled ‘‘Liquidity Coverage 
Ratio: Liquidity Risk Measurement Standards’’, published 
October 10, 2014 (79 Fed. Reg. 61439). 
SEC. 402. DEFINITION OF POINTS AND FEES. 
(a) AMENDMENT TO SECTION 103 OF TILA.—Sec-
tion 103(bb)(4) of the Truth in Lending Act (15 U.S.C. 
1602(bb)(4)) is amended— 
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196 
(1) by striking ‘‘paragraph (1)(B)’’ and insert-
ing ‘‘paragraph (1)(A) and section 129C’’; 
(2) in subparagraph (C)— 
(A) by inserting ‘‘and insurance’’ after 
‘‘taxes’’; 
(B) in clause (ii), by inserting ‘‘, except as 
retained by a creditor or its affiliate as a result 
of their participation in an affiliated business 
arrangement (as defined in section 2(7) of the 
Real Estate Settlement Procedures Act of 1974 
(12 U.S.C. 2602(7))’’ after ‘‘compensation’’; 
and 
(C) by striking clause (iii) and inserting 
the following: 
‘‘(iii) the charge is— 
‘‘(I) a bona fide third-party charge 
not retained by the mortgage originator, 
creditor, or an affiliate of the creditor or 
mortgage originator; or 
‘‘(II) a charge set forth in section 
106(e)(1);’’; and 
(3) in subparagraph (D)— 
(A) by striking ‘‘accident,’’; and 
(B) by striking ‘‘or any payments’’ and in-
serting ‘‘and any payments’’. 
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197 
(b) AMENDMENT TO SECTION 129C OF TILA.—Sec-
tion 129C of the Truth in Lending Act (15 U.S.C. 1639c) 
is amended— 
(1) in subsection (a)(5)(C), by striking ‘‘103’’ 
and all that follows through ‘‘or mortgage origi-
nator’’ and inserting ‘‘103(bb)(4)’’; and 
(2) in subsection (b)(2)(C)(i), by striking ‘‘103’’ 
and all that follows through ‘‘or mortgage origi-
nator)’’ and inserting ‘‘103(bb)(4)’’. 
(c) RULEMAKING.—Not later than the end of the 90- 
day period beginning on the date of the enactment of this 
Act, the Bureau of Consumer Financial Protection shall 
issue final regulations to carry out the amendments made 
by this section, and such regulations shall be effective 
upon issuance. 
SEC. 403. EXCLUSION OF ISSUERS OF ASSET-BACKED SECU-
RITIES FROM COVERED FUNDS. 
Section 13(h)(2) of the Bank Holding Company Act 
of 1956 (12 U.S.C. 1851(h)(2)) is amended— 
(1) by striking ‘‘ ‘private equity fund’ mean an 
issuer’’ and inserting the following: ‘‘ ‘private equity 
fund’— 
‘‘(A) mean an issuer’’; 
(2) by striking the period and inserting ‘‘; 
and’’; and 
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(3) by adding at the end the following: 
‘‘(B) does not include an issuer, if such 
issuer is described under subparagraph (A) 
solely because such issuer issues asset-backed 
securities (as such term is defined under section 
3(a) of the Securities Exchange Act of 1934 
(15 U.S.C. 78c(a))).’’. 
SEC. 404. MORTGAGES IN QUALIFIED SECURITIES. 
Section 129C of the Truth in Lending Act (15 U.S.C. 
1639c) is amended by adding at the end the following: 
‘‘(j) MORTGAGES IN QUALIFIED SECURITIES.—This 
section and any regulations promulgated under this sec-
tion do not apply to a mortgage serving as collateral for 
a qualified security, as such term is defined under section 
321 of the Protecting American Taxpayers and Home-
owners Act of 2018.’’. 
SEC. 405. MORTGAGE LOANS HELD IN PORTFOLIO. 
(a) HOME MORTGAGE DISCLOSURE ACT OF 1975.— 
Section 304(g) of the Home Mortgage Disclosure Act of 
1975 (12 U.S.C. 2803(g)) is amended— 
(1) in paragraph (1), by striking ‘‘and’’ at the 
end; 
(2) in paragraph (2), by striking the period and 
inserting ‘‘; and’’; and 
(3) by adding at the end the following: 
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199 
‘‘(3) made by the creditor, so long as such loan 
appears on the balance sheet of such creditor.’’. 
(b) TRUTH IN LENDING ACT.—The Truth in Lend-
ing Act (15 U.S.C. 1601 et seq.), as amended by the pre-
ceding provisions of this Act, is further amended— 
(1) in section 129C (15 U.S.C. 1639c), by add-
ing at the end the following: 
‘‘(k) MORTGAGE LOANS HELD IN PORTFOLIO.—This 
section and any regulations promulgated under this sec-
tion do not apply to a residential mortgage loan made by 
the creditor so long as such loan appears on the balance 
sheet of such creditor.’’; and 
(2) in section 129D (15 U.S.C. 1639d), by add-
ing at the end the following: 
‘‘(k) MORTGAGE LOANS HELD IN PORTFOLIO.—This 
section and any regulations promulgated under this sec-
tion do not apply to a residential mortgage loan made by 
the creditor so long as such loan appears on the balance 
sheet of such creditor.’’. 
SEC. 406. REPEAL OF CERTAIN MORTGAGE-RELATED PRO-
VISIONS. 
(a) REPEAL.—Sections 1413, 1431, and 1432 of the 
Dodd-Frank Wall Street Reform and Consumer Protec-
tion Act are hereby repealed, and the provisions of law 
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200 
amended or repealed by such sections are restored or re-
vived as if such sections had not been enacted. 
(b) CLERICAL AMENDMENT.—The table of contents 
for the Dodd-Frank Wall Street Reform and Consumer 
Protection Act is amended by striking the items relating 
to sections 1413, 1431, and 1432. 
SEC. 407. AMENDMENTS TO THE TRUTH IN LENDING ACT. 
The Truth in Lending Act (15 U.S.C. 1601 et seq.) 
is amended— 
(1) in section 129 (15 U.S.C. 1639)— 
(A) in subsection (b)(3), by adding at the 
end the following: ‘‘The Bureau may not, by 
regulation or otherwise, prohibit a consumer 
from modifying or waiving the rights provided 
to the consumer under this subsection.’’; and 
(B) in subsection (u), by adding at the end 
the following: 
‘‘(4) ENSURING ACCESS TO COUNSELING SERV-
ICES FOR RURAL COMMUNITIES.—Certification de-
scribed under paragraph (1) may be provided by a 
person who operates an online or telephone-operated 
counseling service approved by the Secretary of 
Housing and Urban Development or by an online or 
telephone-operated counseling service operated by 
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202 
SEC. 408. FINANCIAL INSTITUTIONS EXAMINATION FAIR-
NESS AND REFORM. 
(a) AMENDMENT TO DEFINITION OF FINANCIAL IN-
STITUTION.—Section 1003(3) of the Federal Financial In-
stitutions Examination Council Act of 1978 (12 U.S.C. 
3302(3)) is amended to read as follows: 
‘‘(3) the term ‘financial institution’— 
‘‘(A) means a commercial bank, a savings 
bank, a trust company, a savings association, a 
building and loan association, a homestead as-
sociation, a cooperative bank, or a credit union; 
and 
‘‘(B) for purposes of sections 1012, 1013, 
and 1014, includes a nondepository covered per-
son subject to supervision by the Bureau of 
Consumer Financial Protection under section 
1024 of the Consumer Financial Protection Act 
of 2010 (12 U.S.C. 5514).’’. 
(b) TIMELINESS OF EXAMINATION REPORTS.—The 
Federal Financial Institutions Examination Council Act of 
1978 (12 U.S.C. 3301 et seq.) is amended by adding at 
the end the following: 
‘‘SEC. 1012. TIMELINESS OF EXAMINATION REPORTS. 
‘‘(a) IN GENERAL.— 
‘‘(1) FINAL EXAMINATION REPORT.—A Federal 
financial institutions regulatory agency shall provide 
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a final examination report to a financial institution 
not later than 60 days after the later of— 
‘‘(A) the exit interview for an examination 
of the institution; or 
‘‘(B) the provision of additional informa-
tion by the institution relating to the examina-
tion. 
‘‘(2) EXIT INTERVIEW.—If a financial institu-
tion is not subject to a resident examiner program, 
the exit interview shall occur not later than the end 
of the 9-month period beginning on the commence-
ment of the examination, except that such period 
may be extended by the Federal financial institu-
tions regulatory agency by providing written notice 
to the institution and the Independent Examination 
Review Director describing with particularity the 
reasons that a longer period is needed to complete 
the examination. 
‘‘(b) EXAMINATION MATERIALS.—Upon the request 
of a financial institution, the Federal financial institutions 
regulatory agency shall include with the final report an 
appendix listing all examination or other factual informa-
tion relied upon by the agency in support of a material 
supervisory determination.’’. 
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204 
(c) INDEPENDENT EXAMINATION REVIEW DIREC-
TOR.—The Federal Financial Institutions Examination 
Council Act of 1978 (12 U.S.C. 3301 et seq.), as amended 
by subsection (b) of this section, is further amended by 
adding at the end the following: 
‘‘SEC. 1013. OFFICE OF INDEPENDENT EXAMINATION RE-
VIEW. 
‘‘(a) ESTABLISHMENT.—There is established in the 
Council an Office of Independent Examination Review 
(the ‘Office’). 
‘‘(b) HEAD OF OFFICE.—There is established the po-
sition of the Independent Examination Review Director 
(the ‘Director’), as the head of the Office. The Director 
shall be appointed by the Council and shall be independent 
from any member agency of the Council. 
‘‘(c) TERM.—The Director shall serve for a term of 
5 years, and may be appointed to serve a subsequent 5- 
year term. 
‘‘(d) STAFFING.—The Director is authorized to hire 
staff to support the activities of the Office. 
‘‘(e) DUTIES.—The Director shall— 
‘‘(1) receive and, at the Director’s discretion, 
investigate complaints from financial institutions, 
their representatives, or another entity acting on be-
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205 
half of such institutions, concerning examinations, 
examination practices, or examination reports; 
‘‘(2) hold meetings, at least once every three 
months and in locations designed to encourage par-
ticipation from all sections of the United States, 
with financial institutions, their representatives, or 
another entity acting on behalf of such institutions, 
to discuss examination procedures, examination 
practices, or examination policies; 
‘‘(3) in accordance with subsection (f), review 
examination procedures of the Federal financial in-
stitutions regulatory agencies to ensure that the 
written examination policies of those agencies are 
being followed in practice and adhere to the stand-
ards for consistency established by the Council; 
‘‘(4) conduct a continuing and regular review of 
examination quality assurance for all examination 
types conducted by the Federal financial institutions 
regulatory agencies; 
‘‘(5) adjudicate any supervisory appeal initiated 
under section 1014; and 
‘‘(6) report annually to the Committee on Fi-
nancial Services of the House of Representatives, the 
Committee on Banking, Housing, and Urban Affairs 
of the Senate, and the Council, on the reviews car-
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206 
ried out pursuant to paragraphs (3) and (4), includ-
ing compliance with the requirements set forth in 
section 1012 regarding timeliness of examination re-
ports, and the Council’s recommendations for im-
provements in examination procedures, practices, 
and policies. 
‘‘(f) STANDARD FOR REVIEWING EXAMINATION PRO-
CEDURES.—In conducting reviews pursuant to subsection 
(e)(4), the Director shall prioritize factors relating to the 
safety and soundness of the financial system of the United 
States. 
‘‘(g) REMOVAL.—If the Director is removed from of-
fice, the Council shall communicate in writing the reasons 
for any such removal to the Committee on Financial Serv-
ices of the House of Representatives and the Committee 
on Banking, Housing, and Urban Affairs of the Senate 
not later than 30 days before the removal. 
‘‘(h) CONFIDENTIALITY.—The Director shall keep 
confidential all meetings with, discussions with, and infor-
mation provided by financial institutions.’’. 
(d) RIGHT TO INDEPENDENT REVIEW OF MATERIAL 
SUPERVISORY DETERMINATIONS.—The Federal Financial 
Institutions Examination Council Act of 1978 (12 U.S.C. 
3301 et seq.), as amended by subsection (c) of this section, 
is further amended by adding at the end the following: 
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207 
‘‘SEC. 1014. RIGHT TO INDEPENDENT REVIEW OF MATERIAL 
SUPERVISORY DETERMINATIONS. 
‘‘(a) IN GENERAL.—A financial institution shall have 
the right to obtain an independent review of a material 
supervisory determination contained in a final report of 
examination. 
‘‘(b) NOTICE.— 
‘‘(1) TIMING.—A financial institution seeking 
review of a material supervisory determination under 
this section shall file a written notice with the Inde-
pendent Examination Review Director (the ‘Direc-
tor’) within 60 days after receiving the final report 
of examination that is the subject of such review. 
‘‘(2) IDENTIFICATION
OF
DETERMINATION.— 
The written notice shall identify the material super-
visory determination that is the subject of the inde-
pendent examination review, and a statement of the 
reasons why the institution believes that the deter-
mination is incorrect or should otherwise be modi-
fied. 
‘‘(3) INFORMATION TO BE PROVIDED TO INSTI-
TUTION.—Any information relied upon by the agen-
cy in the final report that is not in the possession 
of the financial institution may be requested by the 
financial institution and shall be delivered promptly 
by the agency to the financial institution. 
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208 
‘‘(c) RIGHT TO HEARING.— 
‘‘(1) IN GENERAL.—The Director shall deter-
mine the merits of the appeal on the record or, at 
the financial institution’s election, shall refer the ap-
peal to an Administrative Law Judge to conduct a 
confidential hearing pursuant to the procedures set 
forth under sections 556 and 557 of title 5, United 
States Code, which hearing shall take place not later 
than 60 days after the petition for review was re-
ceived by the Director, and to issue a proposed deci-
sion to the Director based upon the record estab-
lished at such hearing. 
‘‘(2) STANDARD OF REVIEW.—In rendering a 
determination or recommendation under this sub-
section, neither the Administrative Law Judge nor 
the Director shall defer to the opinions of the exam-
iner or agency, but shall conduct a de novo review 
to independently determine the appropriateness of 
the agency’s decision based upon the relevant stat-
utes, regulations, and other appropriate guidance, as 
well as evidence adduced at any hearing. 
‘‘(d) FINAL DECISION.—A decision by the Director 
on an independent review under this section shall— 
‘‘(1) be made not later than 60 days after the 
record has been closed; and 
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209 
‘‘(2) subject to subsection (e), be deemed a final 
agency action and shall bind the agency whose su-
pervisory determination was the subject of the re-
view and the financial institution requesting the re-
view. 
‘‘(e) LIMITED REVIEW BY FFIEC.— 
‘‘(1) IN GENERAL.—If the agency whose super-
visory determination was the subject of the review 
believes that the Director’s decision under subsection 
(d) would pose an imminent threat to the safety and 
soundness of the financial institution, such agency 
may file a written notice seeking review of the Direc-
tor’s decision with the Council within 10 days of re-
ceiving the Director’s decision. 
‘‘(2) STANDARD OF REVIEW.—In making a de-
termination under this subsection, the Council shall 
conduct a review to determine whether there is sub-
stantial evidence that the Director’s decision would 
pose an imminent threat to the safety and soundness 
of the financial institution. 
‘‘(3) FINAL DETERMINATION.—A determination 
by the Council shall— 
‘‘(A) be made not later than 30 days after 
the filing of the notice pursuant to paragraph 
(1); and 
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210 
‘‘(B) be deemed a final agency action and 
shall bind the agency whose supervisory deter-
mination was the subject of the review and the 
financial institution requesting the review. 
‘‘(f) RIGHT TO JUDICIAL REVIEW.—A financial insti-
tution shall have the right to petition for review of final 
agency action under this section by filing a Petition for 
Review within 60 days of the Director’s decision or the 
Council’s decision in the United States Court of Appeals 
for the District of Columbia Circuit or the Circuit in which 
the financial institution is located. 
‘‘(g) REPORT.—The Director shall report annually to 
the Committee on Financial Services of the House of Rep-
resentatives and the Committee on Banking, Housing, and 
Urban Affairs of the Senate on actions taken under this 
section, including the types of issues that the Director has 
reviewed and the results of those reviews. In no case shall 
such a report contain information about individual finan-
cial institutions or any confidential or privileged informa-
tion shared by financial institutions. 
‘‘(h) RETALIATION PROHIBITED.—A Federal finan-
cial institutions regulatory agency may not— 
‘‘(1) retaliate against a financial institution, in-
cluding service providers, or any institution-affiliated 
party (as defined under section 3 of the Federal De-
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211 
posit Insurance Act), for exercising appellate rights 
under this section; or 
‘‘(2) delay or deny any agency action that 
would benefit a financial institution or any institu-
tion-affiliated party on the basis that an appeal 
under this section is pending under this section. 
‘‘(i) RULE OF CONSTRUCTION.—Nothing in this sec-
tion may be construed— 
‘‘(1) to affect the right of a Federal financial 
institutions regulatory agency to take enforcement 
or other supervisory actions related to a material su-
pervisory determination under review under this sec-
tion; or 
‘‘(2) to prohibit the review under this section of 
a material supervisory determination with respect to 
which there is an ongoing enforcement or other su-
pervisory action.’’. 
(e) ADDITIONAL AMENDMENTS.— 
(1) RIEGLE
COMMUNITY
DEVELOPMENT
AND 
REGULATORY IMPROVEMENT ACT OF 1994.—Section 
309 of the Riegle Community Development and Reg-
ulatory Improvement Act of 1994 (12 U.S.C. 4806) 
is amended— 
(A) in subsection (a), by inserting after 
‘‘appropriate Federal banking agency’’ the fol-
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212 
lowing: ‘‘, the Bureau of Consumer Financial 
Protection,’’; 
(B) in subsection (b)— 
(i) in paragraph (2), by striking ‘‘the 
appellant from retaliation by agency exam-
iners’’ and inserting ‘‘the insured deposi-
tory institution or insured credit union 
from retaliation by the agencies referred to 
in subsection (a)’’; and 
(ii) by adding at the end the following 
flush-left text: 
‘‘For purposes of this subsection and subsection (e), retal-
iation includes delaying consideration of, or withholding 
approval of, any request, notice, or application that other-
wise would have been approved, but for the exercise of the 
institution’s or credit union’s rights under this section.’’; 
(C) in subsection (e)(2)— 
(i) in subparagraph (B), by striking 
‘‘and’’ at the end; 
(ii) in subparagraph (C), by striking 
the period and inserting ‘‘; and’’; and 
(iii) by adding at the end the fol-
lowing: 
‘‘(D) ensure that appropriate safeguards 
exist for protecting the insured depository insti-
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213 
tution or insured credit union from retaliation 
by any agency referred to in subsection (a) for 
exercising its rights under this subsection.’’; 
and 
(D) in subsection (f)(1)(A)— 
(i) in clause (ii), by striking ‘‘and’’ at 
the end; 
(ii) in clause (iii), by striking ‘‘and’’ 
at the end; and 
(iii) by adding at the end the fol-
lowing: 
‘‘(iv) any issue specifically listed in an 
exam report as a matter requiring atten-
tion by the institution’s management or 
board of directors; and 
‘‘(v) any suspension or removal of an 
institution’s status as eligible for expedited 
processing of applications, requests, no-
tices, or filings on the grounds of a super-
visory or compliance concern, regardless of 
whether that concern has been cited as a 
basis for another material supervisory de-
termination or matter requiring attention 
in an examination report, provided that the 
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214 
conduct at issue did not involve violation of 
any criminal law; and’’. 
(2) FEDERAL
CREDIT
UNION
ACT.—Section 
205(j) of the Federal Credit Union Act (12 U.S.C. 
1785(j)) is amended by inserting ‘‘the Bureau of 
Consumer Financial Protection,’’ before ‘‘the Ad-
ministration’’ each place such term appears. 
(3) FEDERAL FINANCIAL INSTITUTIONS EXAM-
INATION COUNCIL ACT OF 1978.—The Federal Fi-
nancial Institutions Examination Council Act of 
1978 (12 U.S.C. 3301 et seq.) is amended— 
(A) in section 1003, by amending para-
graph (1) to read as follows: 
‘‘(1) the term ‘Federal financial institutions 
regulatory agencies’— 
‘‘(A) means the Office of the Comptroller 
of the Currency, the Board of Governors of the 
Federal Reserve System, the Federal Deposit 
Insurance Corporation, and the National Credit 
Union Administration; and 
‘‘(B) for purposes of sections 1012, 1013, 
and 1014, includes the Bureau of Consumer Fi-
nancial Protection;’’; and 
(B) in section 1005, by striking ‘‘One- 
fifth’’ and inserting ‘‘One-fourth’’. 
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215 
(f) REDUCTION OF SURPLUS FUNDS OF FEDERAL 
RESERVE BANKS.— 
(1) IN
GENERAL.—Section 7(a)(3)(A) of the 
Federal Reserve Act (12 U.S.C. 289(a)(3)(A)) is 
amended by striking ‘‘$7,500,000,000’’ and insert-
ing ‘‘$7,324,285,000’’. 
(2) EFFECTIVE
DATE.—Paragraph (1) shall 
take effect on June 1, 2018. 
SEC. 409. NOTICE OF JUNIOR MORTGAGE OR LIEN. 
With respect to the dwelling of a borrower that serves 
as security for a securitized senior mortgage loan, if the 
borrower enters into any credit transaction that would re-
sult in the creation of a new mortgage or other lien on 
such dwelling, the creditor of such new mortgage or other 
lien shall notify the servicer of the senior mortgage loan 
of the existence of the new mortgage or other lien. 
SEC. 410. LIMITATION ON MORTGAGES HELD BY LOAN 
SERVICERS. 
(a) LIMITATION.—Neither the servicer of a residen-
tial mortgage loan, nor any affiliate of such servicer, may 
own, or hold any interest in, any other residential mort-
gage loan that is secured by a mortgage, deed of trust, 
or other equivalent consensual security interest on the 
same dwelling or residential real property that is subject 
to the mortgage, deed of trust, or other security interest 
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that secures the residential mortgage loan serviced by the 
servicer. 
(b) DEFINITIONS.—For purposes of this section, the 
following definitions shall apply: 
(1) AFFILIATE.—The term ‘‘affiliate’’ has the 
meaning given such term under section 104(g) of 
the Gramm-Leach-Bliley Act (15 U.S.C. 6701(g)). 
(2) RESIDENTIAL MORTGAGE LOAN.—The term 
‘‘residential mortgage loan’’ means any consumer 
credit transaction that is secured by a mortgage, 
deed of trust, or other equivalent consensual security 
interest on a dwelling or on residential real property 
that includes a dwelling, other than a consumer 
credit transaction under an open end credit plan or 
an extension of credit relating to a plan described in 
section 101(53D) of title 11, United States Code. 
(3) SERVICER.—The term ‘‘servicer’’ has the 
meaning provided such term in section 129A of the 
Truth in Lending Act, except that such term in-
cludes a person who makes or holds a residential 
mortgage loan (including a pool of residential mort-
gage loans) if such person also services the loan. 
(c) INTERESTS.—For purposes of subsection (a), 
ownership of, or holding an interest in, a residential mort-
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gage loan includes ownership of, or holding an interest 
in— 
(1) a pool of residential mortgage loans that 
contains such residential mortgage loan; or 
(2) any security based on or backed by a pool 
of residential mortgage loans that contains such res-
idential mortgage loan. 
(d) EFFECTIVE DATE.—This section shall apply— 
(1) with respect to the servicer (or affiliate of 
the servicer) of a residential mortgage loan that is 
originated after the date of the enactment of this 
Act, on such date of enactment; and 
(2) with respect to the servicer (or affiliate of 
the servicer) of a residential mortgage loan that is 
originated on or before the date of the enactment of 
this Act, upon the expiration of the 12-month period 
beginning upon such date of enactment. 
TITLE V—REGULATORY 
STRUCTURE 
Subtitle A—Ginnie Mae 
SEC. 501. REMOVAL FROM HUD; ESTABLISHMENT AS INDE-
PENDENT ENTITY. 
(a) IN GENERAL.—Paragraph (2) of section 302(a) 
of the National Housing Act (12 U.S.C. 1717(a)(2)) is 
amended by striking ‘‘in the Department of Housing and 
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Urban Development’’ and inserting ‘‘independent of any 
other agency or office in the Federal Government’’. 
(b) CONFORMING AMENDMENTS.—Title III of the 
National Housing Act (12 U.S.C. 1716 et seq.) is amend-
ed— 
(1) 
in 
section 
306(g)(3)(D) 
(12 
U.S.C. 
1721(g)(3)(D)), by striking ‘‘Secretary’’ and insert-
ing ‘‘Association’’; 
(2) in section 307 (12 U.S.C. 1722), by striking 
‘‘Secretary of Housing and Urban Development’’ 
and inserting ‘‘Association’’; and 
(3) in section 317 (12 U.S.C. 1723i)— 
(A) in subsection (a)(1), by striking ‘‘Sec-
retary of Housing and Urban Development’’ 
and inserting ‘‘Administrator of the Associa-
tion’’; 
(B) in subsection (c)(4), by striking ‘‘Sec-
retary’s’’ and inserting ‘‘Administrator of the 
Association’s’’; 
(C) in subsection (d)(1), by striking ‘‘Sec-
retary’s’’ and inserting ‘‘Administrator of the 
Association’s’’; 
(D) in the heading for subsection (f), by 
striking ‘‘BY SECRETARY’’; and 
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(E) by striking ‘‘Secretary’’ each place 
such term appears and inserting ‘‘Adminis-
trator of the Association’’. 
(c) MANAGEMENT; BOARD OF DIRECTORS.— 
(1) IN GENERAL.—Section 308 of the National 
Housing Act (12 U.S.C. 1723(a)) is amended by 
striking subsection (a) and inserting the following 
new subsection: 
‘‘(a) MANAGEMENT.— 
‘‘(1) BOARD OF DIRECTORS.— 
‘‘(A) NUMBER
AND
APPOINTMENT.—The 
Association shall be governed by a Board of Di-
rectors consisting of 5 members, who shall be 
appointed by the President, by and with the ad-
vice and consent of the Senate, from among in-
dividuals who— 
‘‘(i) are citizens of the United States; 
and 
‘‘(ii) have demonstrated technical ex-
pertise in the mortgage market and one of 
whom has technical expertise in the sec-
ondary mortgage market. 
‘‘(B) POLITICAL AFFILIATION.—Not more 
than 3 members of the Board of Directors may 
be members of the same political party. 
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‘‘(C) TERMS.— 
‘‘(i) IN GENERAL.—Each member of 
the Board of Directors shall be appointed 
for a term of 5 years, except as provided 
in clauses (ii) and (iii). 
‘‘(ii) 
TERMS
OF
INITIAL
AP-
POINTEES.—As designated by the Presi-
dent at the time of appointment, of the 
members first appointed to the Board of 
Directors pursuant to subparagraph (A)— 
‘‘(I) 1 shall be appointed for a 
term of 1 year; 
‘‘(II) 1 shall be appointed for a 
term of 2 years; 
‘‘(III) 1 shall be appointed for a 
term of 3 years; and 
‘‘(IV) 1 shall be appointed for a 
term of 4 years. 
‘‘(iii) INTERIM APPOINTMENTS.—Any 
member appointed to fill a vacancy occur-
ring before the expiration of the term for 
which such member’s predecessor was ap-
pointed shall be appointed only for the re-
mainder of such term. 
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‘‘(iv) CONTINUATION
OF
SERVICE.— 
The Director and each member may con-
tinue to serve after the expiration of the 
term of office to which such member was 
appointed until a successor has been ap-
pointed and qualified. 
‘‘(2) ADMINISTRATOR; CHAIRPERSON.— 
‘‘(A) DESIGNATION; TERM.—One of the 
members of the Board of Directors shall be des-
ignated by the President, at the time of ap-
pointment, to serve as Chairperson of the 
Board of Directors and Administrator of the 
Association for a term of 5 years, unless re-
moved before the end of such term pursuant to 
subparagraph (C). 
‘‘(B) ADVICE.—The Board of Directors 
shall advise the Administrator regarding overall 
strategies and policies to carry out the duties 
and purposes of this Act. 
‘‘(C) REMOVAL.—The President may re-
move the Administrator for inefficiency, neglect 
of duty, or malfeasance in office. 
‘‘(3) OPERATIONS.— 
‘‘(A) BYLAWS.—Within the limitations of 
law, the Board of Directors shall determine the 
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general policies which shall govern the oper-
ations of the Association, and shall have power 
to adopt, amend and repeal bylaws governing 
the performance of the powers and duties 
granted to or imposed upon it by law. 
‘‘(B) REQUIRED
VOTES.—At the first 
meeting of the Board of Directors, the Board 
shall determine by majority vote which actions 
of the Association shall require a majority vote 
of the Board. 
‘‘(4) OFFICERS.—The Director shall select and 
effect the appointment of qualified persons to fill 
such offices of the Association as may be provided 
for in the bylaws. Persons appointed under the pre-
ceding sentence shall perform such executive func-
tions, powers, and duties as may be prescribed by 
the bylaws or by the Board of Directors, and such 
persons shall be executive officers of the Association 
and shall discharge all such executive functions, 
powers, and duties.’’. 
(2) COMPENSATION.— 
(A) ADMINISTRATOR.—Section 5314 of 
title 5, United States Code, is amended by add-
ing at the end the following new item: 
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223 
‘‘Administrator, Government National Mortgage As-
sociation.’’. 
(B) MEMBERS
OF
BOARD
OF
DIREC-
TORS.—Section 5314 of title 5, United States 
Code, is amended— 
(i) by striking the item relating to the 
President of the Government National 
Mortgage 
Association, 
Department 
of 
Housing and Urban Development; and 
(ii) by adding at the end the following 
new item: 
‘‘Members, Board of Directors of the Government 
National Mortgage Association.’’. 
(d) PERSONNEL.—Subsection (d) of section 309 of 
the National Housing Act (12 U.S.C. 1723a(d)) is amend-
ed by striking ‘‘(d)(1)’’ and all that follows through the 
end of paragraph (1) and inserting the following: 
‘‘(d) PERSONNEL.— 
‘‘(1) GINNIE MAE.— 
‘‘(A) IN GENERAL.—The Administrator of 
the Association may appoint and fix the com-
pensation of such officers and employees of the 
Association as the Administrator considers nec-
essary to carry out the functions of the Associa-
tion. Officers and employees may be paid with-
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224 
out regard to the provisions of chapter 51 and 
subchapter III of chapter 53 of title 5, United 
States Code, relating to classification and Gen-
eral Schedule pay rates. 
‘‘(B) COMPARABILITY OF COMPENSATION 
WITH FEDERAL BANKING AGENCIES.—In fixing 
and directing compensation under subpara-
graph (A), the Administrator of the Association 
shall consult with, and maintain comparability 
with, compensation of officers and employees of 
the Office of the Comptroller of the Currency, 
the Board of Governors of the Federal Reserve 
System, and the Federal Deposit Insurance 
Corporation. 
‘‘(C) PERSONNEL
OF
OTHER
FEDERAL 
AGENCIES.—In carrying out the duties of the 
Association, the Administrator of the Associa-
tion may use information, services, staff, and 
facilities of any executive agency, independent 
agency, or department on a reimbursable basis, 
with the consent of such agency or depart-
ment.’’. 
(e) TRANSITIONAL
PROVISION.—Notwithstanding 
this section and the amendments made by this section, 
during the period beginning on the date of the enactment 
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of this Act, and ending on the date on which the Adminis-
trator of the Government National Mortgage Association 
is appointed and confirmed pursuant to section 308 of the 
National Housing Act, as amended by this section, the 
person serving as the President of the Government Na-
tional Mortgage Association on that effective date shall act 
for all purposes as, and with the full powers of, the Admin-
istrator of the Association. 
(f) REFERENCES.—On and after the date of the en-
actment of this Act, any reference in Federal law to the 
President of the Government National Mortgage Associa-
tion or to such Association shall be deemed to be a ref-
erence to such Administrator of such Association or to 
such Association, as appropriate, as organized pursuant 
to this subsection and the amendments made by this sec-
tion. 
SEC. 502. GUARANTEE FEES. 
Paragraph (3) of section 306(g) of the National 
Housing Act (12 U.S.C. 1721(g)(3)) is amended— 
(1) by striking ‘‘(3)(A) No fee or charge in ex-
cess of 6 basis points’’ and inserting ‘‘(3)(A)(i) Ex-
cept as provided in clause (ii), no fee or charge’’; 
(2) in subparagraph (A), by adding at the end 
the following new clause: 
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‘‘(ii) The Association shall establish a fee of not less 
than 6 basis points for the guaranty of the timely payment 
of principal or interest on securities or notes based on or 
backed by mortgages described in clause (i), which shall 
be based on risks associated with issuer counterparties, 
market risks, and risk and cost of administering the pro-
gram. The Association may adjust such fee annually but 
only to the extent necessary to conform such fee with such 
risks and costs and, before any such adjustment takes ef-
fect, shall submit to the Congress a report describing the 
justifications for the adjustment.’’; 
(3) in subparagraph (B), by adding after the 
period at the end the following: ‘‘ ‘The Association 
may adjust such fee annually but only to the extent 
necessary to conform such fee with such anticipated 
claims.’ ’’; 
(4) in subparagraph (C)— 
(A) by striking ‘‘shall remain at the level 
set for such fees or charges as of September 30, 
1985, except that’’; 
(B) by striking ‘‘increased’’ and inserting 
‘‘adjusted pursuant subparagraph (D)’’ 
(C) by inserting ‘‘risk and’’ before ‘‘cost of 
administering’’; and 
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(D) by inserting ‘‘or to the conditions of 
the market,’’ after ‘‘the program,’’; and 
(5) in subparagraph (D)— 
(A) by striking ‘‘increasing’’ and inserting 
‘‘adjusting’’; and 
(B) by striking ‘‘increase’’ and inserting 
‘‘adjustment;’’. 
Subtitle B—FHA 
SEC. 511. DEFINITIONS. 
For purposes of this title, the following definitions 
shall apply: 
(1) BOARD.—The term ‘‘Board’’ means the 
Board of Directors of the FHA established under 
section 524. 
(2) DIRECTOR.—The term ‘‘Director’’ means 
the Director of the Federal Housing Finance Agen-
cy. 
(3) FHA.—The term ‘‘FHA’’ means the Fed-
eral Housing Administration established under this 
title. 
(4) FIRST-TIME HOMEBUYER.—The term ‘‘first- 
time homebuyer’’ means an individual who meets 
any of the following criteria: 
(A) An individual, and his or her spouse, 
who has never had ownership in a principal res-
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idence, as evidenced by inclusion of such indi-
vidual’s name on a mortgage, title, or deed in 
connection with such ownership. 
(B) A single parent (as such term is de-
fined in section 956 of the Cranston-Gonzalez 
National Affordable Housing Act (42 U.S.C. 
12713)) who has only owned a principal resi-
dence with a former spouse while married. 
(C) An individual who is divorced, whose 
only ownership in a principal residence was to-
gether with a previous spouse, as evidenced by 
inclusion of such individual’s name on a mort-
gage, title, or deed in connection with such 
ownership. 
(D) An individual who is a displaced home-
maker (as such term is defined in such section 
956 of the Cranston-Gonzalez National Afford-
able Housing Act) and has only owned a prin-
cipal residence with a spouse. 
(E) An individual who has only owned a 
principal residence not permanently affixed to a 
permanent foundation in accordance with appli-
cable regulations. 
(F) An individual who has only owned a 
property that was not in compliance with state, 
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local or model building codes and which cannot 
be brought into compliance for less than the 
cost of constructing a permanent structure. 
(5) 
UNITED
STATES.—The 
term 
‘‘United 
States’’ includes the States, the District of Colum-
bia, the Commonwealth of Puerto Rico, the Com-
monwealth of the Northern Mariana Islands, Guam, 
the Virgin Islands, American Samoa, and Native 
American governments. 
PART 1—ORGANIZATION 
SEC. 521. ESTABLISHMENT. 
(a) IN GENERAL.—There is hereby established the 
Federal Housing Administration, which shall be a body 
corporate without capital stock and shall have succession 
until dissolved by Act of Congress. 
(b) GOVERNMENT CORPORATION.—The FHA shall 
be established as a wholly owned Government corporation 
subject to chapter 91 of title 31, United States Code (com-
monly referred to as the Government Corporation Control 
Act), except as otherwise provided in this subtitle. 
(c) FEDERAL AGENCY.— 
(1) IN GENERAL.—The FHA shall be an agency 
of the United States, except that the FHA shall not 
be considered an agency for purposes of holding, 
managing, and disposing of assets acquired by the 
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FHA under the provisions of this title or the Na-
tional Housing Act. 
(2) HOLDING, MANAGEMENT, AND
DISPOSAL 
AUTHORITY.—For purposes of this subsection, the 
term ‘‘holding, managing, and disposing of assets’’ 
includes the powers to— 
(A) deal with, complete, reconstruct, rent, 
renovate, modernize, insure, make contracts for 
the management of, establish suitable agencies 
for the management of, or exercise discretion to 
sell for cash or credit or lease, any acquired 
property; 
(B) pursue collection by way of com-
promise or otherwise all assigned and trans-
ferred claims; and 
(C) at any time, upon default, foreclose on 
any property secured by any assigned or trans-
ferred mortgage. 
(d) SELF-SUFFICIENT ENTITY.—The FHA shall op-
erate and conduct its business as a self-sufficient self-suf-
ficient entity in accordance with section 204(d). 
(e) CORPORATE OFFICES
AND RESIDENCY.—The 
FHA shall maintain its principal office in the District of 
Columbia and shall be deemed, for purposes of venue in 
civil actions, to be a resident of the District of Columbia. 
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The FHA may establish other offices in such other places 
as the FHA considers appropriate in the conduct of its 
business. 
(f) TAX STATUS.—The FHA, including its franchise, 
activities, income, and assets, shall be exempt from all tax-
ation now or hereafter imposed by any taxing authority 
in the United States, except that any real property of the 
FHA (other than real property that the FHA uses as an 
office) shall be subject to taxation to the same extent ac-
cording to its value as any taxing authority taxes other 
real property. 
(g) PROTECTION OF NAME.— 
(1) PROHIBITION.—No person shall, except the 
body corporate established under this section, after 
the date of the enactment of this Act, use the words 
‘‘Federal Housing Administration’’ or the initials 
‘‘FHA’’ as the name or part thereof under which 
such person shall do business. 
(2) ENFORCEMENT.—Violations of paragraph 
(1) may be enjoined by any court of general jurisdic-
tion at the suit of the FHA. In any such suit, the 
FHA may recover any actual damages resulting 
from such violation, and, in addition, shall be enti-
tled to punitive damages (regardless of the existence 
or nonexistence of actual damages) of not more than 
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$100 for each day during which such violation is 
committed or repeated. 
SEC. 522. PURPOSES. 
The FHA is established for the following purposes: 
(1) To provide mortgage insurance and other 
credit enhancement and related activities, for— 
(A) single family homeownership to first- 
time homebuyers, low- and moderate-income 
homebuyers, homebuyers in areas subject to 
counter-cyclical markets or Presidentially-de-
clared disasters; 
(B) the financing of affordable rental 
housing; and 
(C) the provision of residential health care 
facilities. 
(2) To supplement private sector activity by 
serving hard-to-serve markets, developing new mort-
gage products, and filling gaps in the provision and 
delivery of mortgage credit. 
(3) To deliver housing mortgage insurance and 
credit enhancement and provide other services in a 
non-discriminatory manner. 
(4) To promote liquidity and provide stability to 
the single family and multifamily housing finance 
market, by continuing to provide mortgage insurance 
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and credit enhancement on a sound basis during 
times of regional and national economic downturn. 
(5) To engage in research, development, and 
testing of new products designed to make single 
family and multifamily housing and residential 
health care facility credit available to hard-to-serve 
markets. 
(6) To establish uniformity in operations and 
risk management and loss mitigation in housing 
mortgage insurance and rural housing loan pro-
grams. 
(7) To administer the rural housing programs 
of the Rural Housing Service of the Department of 
Agriculture. 
SEC. 523. GENERAL POWERS. 
To further the purposes of this subtitle, in accordance 
with chapter 91 of title 31 of the United States Code (re-
lating to government corporations), the FHA— 
(1) may adopt, amend, and repeal by-laws, and 
other written administrative guidance; 
(2) may adopt, alter, and use a corporate seal, 
which shall be judicially noted; 
(3) may insure, and make commitments to in-
sure mortgages, to the extent authorized under this 
title, and enhance and make commitments to other-
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wise enhance credit, and in providing such insurance 
may reinsure, advance, incur liabilities, pool loans, 
and risk share; 
(4) shall provide, among other mortgage insur-
ance products, for the availability of a 30-year fixed- 
rate mortgage; 
(5) may acquire, hold, use, improve, deal in, or 
dispose of, by any means, any interests in any real 
property or any personal property; 
(6) may execute contracts, and make other 
agreements in its own name, with any agency, public 
or private entity, or other person, and carry out any 
lawful requirement of such contracts, grants, or 
other agreements; 
(7) may take any actions, including the restruc-
turing of debt, that the FHA determines are nec-
essary to manage any portfolio (including the port-
folio of the FHA and the Rural Housing Service) of 
property, assets, and obligations; 
(8) may— 
(A) create and supply, alone or in coopera-
tion with public or private entities or persons, 
any product or service consistent with its cor-
porate purposes; and 
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(B) assess fees and charges for such prod-
ucts, information, and services in amounts, as 
determined by the FHA, that— 
(i) do not exceed their value in the 
market; 
(ii) permit the FHA to recover its 
fully allocated long-term costs; and 
(iii) permit the FHA to maintain the 
level of capital determined by the FHA to 
be necessary and sufficient to carry out the 
public purposes of the FHA and as re-
quired under subtitle C; 
(9) may create distinct insurance funds or other 
devices to segregate or permit limitations on liability 
for business activities or accounts; 
(10) may qualify any person or entity to engage 
in business with the FHA and may enforce and im-
pose penalties for the breach of any duties, obliga-
tions, and other commitments made by such persons 
or entities; 
(11) shall take actions necessary to administer 
its business in a nondiscriminatory manner; 
(12) may use the services or obtain the goods 
of any Federal agency, including the Department of 
Housing and Urban Development and the Rural 
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Housing Service of the Department of Agriculture, 
under working or cooperation agreements or con-
tracts with such agencies and make or receive pay-
ment for the cost of such activities; 
(13) shall have the power, in its corporate 
name, to sue and be sued, and to complain and de-
fend, in any court of competent jurisdiction, State or 
Federal, but no attachment, garnishment, injunc-
tion, or other similar process, mesne or final, shall 
be issued against the property of the FHA or 
against the FHA with respect to its property, and 
the FHA shall not be liable for interest prior to 
judgment, for punitive or exemplary damages, for 
penalties, or for claims based upon unjust enrich-
ment, quasi-contract, or contracts implied-in-law, 
nor shall the FHA be subject to trial by jury; 
(14) notwithstanding any other provision of 
law— 
(A) shall be an agency of the United 
States Government and the officers and employ-
ees of the FHA shall be officers and employees 
of the United States Government for purposes 
of part IV of title 28, United States Code; 
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(B) shall have all civil actions to which the 
FHA is a party deemed to arise under the laws 
of the United States; and 
(C) may, at any time before trial and with-
out bond or security, remove any civil or crimi-
nal action or proceeding in a State court to 
which the FHA is a party to the United States 
district court for the District of Columbia or to 
the United States district court with jurisdic-
tion over the place where the civil action or pro-
ceeding is pending, by following any procedure 
for removal of actions in effect at the time of 
such removal; 
(15) may— 
(A) accept and use voluntary and uncom-
pensated services and accept, hold, administer, 
and use gifts and bequests of property, both 
real and personal, for the purpose of aiding or 
facilitating the work of the FHA, and 
(B) hold gifts and bequests of money and 
the proceeds from sales of other property re-
ceived as gifts or bequests in a separate ac-
count, and such amounts shall be disbursed as 
provided by the FHA; 
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except that property accepted pursuant to this para-
graph, and the proceeds thereof, shall be used as 
nearly as possible in accordance with the terms of 
the gift or bequest and, for the purpose of Federal 
income, estate, and gift taxes, property accepted 
under this paragraph shall be considered as a gift or 
bequest to or for the use of the United States; 
(16) shall have any transaction in which it par-
ticipates be exempt from the terms of any State or 
other law or prohibition against payment of usurious 
interest; 
(17) may act as a fiduciary in connection with 
any of its undertakings; 
(18) may foreclose any single family mortgages 
held by the FHA pursuant to the same procedures 
and authority applicable to the Secretary of Housing 
and Urban Development under the Single Family 
Mortgage Foreclosure Act of 1994; 
(19) may foreclose any multifamily housing 
mortgages held by the FHA pursuant to the same 
procedures and authority applicable to the Secretary 
of Housing and Urban Development under the Mul-
tifamily Mortgage Foreclosure Act of 1981; 
(20) may foreclose mortgages pursuant to the 
same procedures and authority applicable to the Sec-
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retary of Agriculture under the Housing Act of 
1949; 
(21) shall have the priority of the United States 
with respect to the payment of debts out of bank-
rupt, insolvent, and decedents’ estates; 
(22) may invest in the development of acquisi-
tion of systems, technology, or other capital re-
sources, to enhance its ability to carry out the pur-
poses of this title; and 
(23) shall have and exercise all powers nec-
essary or appropriate to effect any of the purposes 
of this title and title II. 
SEC. 524. BOARD OF DIRECTORS. 
(a) IN GENERAL.—The powers of the FHA, including 
direction over policy and operations, shall be vested in the 
Board of Directors of the FHA. 
(b) MEMBERS AND APPOINTMENT.—The Board of 
Directors shall consist of 7 members, as follows: 
(1) VOTING MEMBERS.—5 voting members ap-
pointed by the President, by and with the advice and 
consent of the Senate, who shall include— 
(A) not less than one individual who has 
experience in mortgage finance; and 
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(B) not less than one individual who has 
experience in affordable housing serving low- 
and moderate-income populations. 
(2) NON-VOTING
MEMBERS.—Two non-voting 
members, who shall be— 
(A) a representative of Department of 
Housing and Urban Development, appointed by 
the Secretary of Housing and Urban Develop-
ment; and 
(B) a representative of the Rural Housing 
Service, appointed by the Secretary of Agri-
culture 
(c) CHAIRPERSON.—The Board shall elect a chair-
person from among its members. 
(d) TERMS.— 
(1) IN GENERAL.—Each member of the Board 
appointed under subsection (b)(1) shall be appointed 
for a term of 3 years, except as provided in para-
graphs (2) and (3) of this subsection. 
(2) TERMS OF INITIAL APPOINTEES.—As des-
ignated by the President at the time of appointment, 
of the members first appointed to the Board pursu-
ant to paragraphs (3) and (4) of subsection (b)— 
(A) 1 shall be appointed for a term of 1 
year; and 
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(B) 2 shall be appointed for terms of 2 
years. 
(3) VACANCIES.—Any member appointed to fill 
a vacancy on the Board occurring before the expira-
tion of the term for which the member’s predecessor 
was appointed shall be appointed only for the re-
mainder of that term. A member may serve after the 
expiration of that member’s term until a successor 
has taken office. A vacancy on the Board shall be 
filled in the manner in which the original appoint-
ment was made. 
(e) MEETINGS AND QUORUM.—The Board shall meet 
at any time pursuant to the call of the Chairperson or 
a majority of its members and as provided by the bylaws 
of the FHA, but not less than quarterly. A majority of 
the members of the Board shall constitute a quorum. 
(f) POWERS.—The Board shall be responsible for the 
general management of the FHA and shall have the same 
authority, privileges, and responsibilities as the board of 
directors of a private corporation incorporated under the 
District of Columbia Business Corporation Act. 
(g) DUTIES.—In performing its duties, the Board 
shall— 
(1) obtain guidance from participants in the 
mortgage markets served by the FHA; 
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(2) assess the housing and mortgage insurance 
needs of consumers and providers of single family 
and multifamily housing and communities, and the 
mortgage insurance needs of providers of residential 
health care facilities; 
(3) obtain information concerning housing fi-
nance markets in order to better assess how the 
FHA can complement the roles of public and private 
participants in such markets; and 
(4) assist the Secretary of Housing and Urban 
Development and the Secretary of Agriculture in co-
ordinating the roles of Federal housing, banking, 
and credit agencies generally, and particularly in the 
delivery of housing credit enhancement to families, 
communities, and hard-to-serve markets. 
(h) COMPENSATION.—Members of the Board shall 
serve on a part-time basis and shall serve without pay. 
(i) TRAVEL EXPENSES.—Each member shall receive 
travel expenses, including per diem in lieu of subsistence, 
in accordance with sections 5702 and 5703 of title 5, 
United States Code. 
SEC. 525. OFFICERS AND PERSONNEL. 
(a) ADMINISTRATOR; DEPUTY ADMINISTRATOR.— 
(1) APPOINTMENT.—The Board shall appoint a 
Administrator and Deputy Administrator of the 
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FHA, and, except as provided in subsections (b) and 
(c), such other officers as are provided for in the by-
laws of the FHA. 
(2) EXECUTIVE OFFICERS.—The Administrator 
and Deputy Administrator of the FHA shall be exec-
utive officers of the FHA and shall discharge and 
perform all such executive functions, powers, and 
duties as may be prescribed by the bylaws of the 
FHA or by the Board of Directors. 
(b) CHIEF RISK OFFICER.—There shall be in the 
FHA a Chief Risk Officer, who— 
(1) shall be appointed by the Board of Direc-
tors of the FHA; 
(2) shall be selected from among individuals 
who possess demonstrated ability in the general 
management of, and knowledge of and extensive 
practical experience in, risk evaluation practices in 
large governmental or business entities; 
(3) shall be— 
(A) responsible for all matters relating to 
managing and mitigating risk to the mortgage 
insurance programs of the FHA and ensuring 
the performance of mortgages insured by the 
FHA; and 
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(B) responsible for all matters relating to 
managing and mitigating risk to the housing 
loans made, insured, or guaranteed under title 
V of the Housing Act of 1949 (42 U.S.C. 1471 
et seq.) and ensuring the performance of such 
housing loans; 
(4) shall not be subject to the review or ap-
proval of the Board of Directors of the FHA or the 
Secretary of Agriculture with respect to the exercise 
of the responsibilities under subparagraph (A) or 
(B), respectively, of paragraph (3); and 
(5) shall not be required to obtain the prior ap-
proval, comment, or review of any officer or agency 
of the United States before submitting to the Con-
gress, or any committee or subcommittee thereof, 
any reports, recommendations, testimony, or com-
ments if such submissions include a statement indi-
cating that the views expressed therein are those of 
the Chief Risk Officer of the FHA and do not nec-
essarily represent the views of the Board of Direc-
tors of the FHA or the Secretary of Agriculture. 
(c) CHIEF TECHNOLOGY OFFICER.—There shall be 
in the FHA a Chief Technology Officer, who— 
(1) shall be appointed by the Board of Direc-
tors of the FHA; 
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(2) shall be selected from among individuals 
who possess demonstrated ability in the general 
management of, and knowledge of and extensive 
practical experience in, information technology man-
agement practices in, large governmental or business 
entities; 
(3) shall be— 
(A) responsible for all matters relating to 
information technology management relating to 
the mortgage insurance programs of the FHA; 
and 
(B) responsible for all matters relating to 
information technology management relating to 
the programs for making, insuring, and guaran-
teeing housing loans under title V of the Hous-
ing Act of 1949 (42 U.S.C. 1471 et seq.); 
including analysis and assessment of the information 
technology infrastructures, information technology 
strategy, and use of information technology, ensur-
ing the security and privacy of information tech-
nology infrastructure and networks, and promoting 
technological innovation; 
(4) shall not be subject to the review or ap-
proval of the Board of Directors of the FHA or the 
Secretary of Agriculture with respect to the exercise 
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of the responsibilities under subparagraph (A) or 
(B), respectively, of paragraph (3); and 
(5) shall not be required to obtain the prior ap-
proval, comment, or review of any officer or agency 
of the United States before submitting to the Con-
gress, or any committee or subcommittee thereof, 
any reports, recommendations, testimony, or com-
ments if such submissions include a statement indi-
cating that the views expressed therein are those of 
the Chief Technology Officer of the FHA and do not 
necessarily represent the views of the Board of Di-
rectors of the FHA, the Secretary of Housing and 
Urban Development, or the Secretary of Agriculture. 
(d) APPOINTMENT OF EMPLOYEES.—Subject to sub-
title D, the Board shall appoint such other employees of 
the FHA as the Board considers necessary for the trans-
action of the FHA’s business. 
(e) COMPENSATION, DUTIES, AND REMOVAL.— 
(1) IN GENERAL.—The Board shall fix the com-
pensation of all officers and employees of the FHA 
and define their duties. Officers and employees shall 
be appointed, promoted, assigned, and removed on 
the basis of qualifications, and any such actions 
taken shall be consistent with the principles of fair-
ness, nondiscrimination, and due process. 
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(2) CONSIDERATIONS
IN
FIXING
COMPENSA-
TION.—In fixing and directing compensation for offi-
cers and employees of the FHA, the Board shall 
consult and maintain comparability with the com-
pensation provided by the Government National 
Mortgage Association, the Federal Housing Finance 
Agency, the Comptroller of Currency, the Board of 
Governors of the Federal Reserve System, and the 
Federal Deposit Insurance Corporation to officers 
and employees of such entities. 
(f) APPLICABILITY
OF CERTAIN CIVIL SERVICE 
LAWS.—The officers and employees of the FHA shall be 
appointed without regard to the provisions of title 5, 
United States Code, governing appointments in the com-
petitive service, and may be paid without regard to the 
provisions of chapter 51 and subchapter III of chapter 53 
of that title relating to classification and General Schedule 
pay rates. 
(g) USE OF FEDERAL AGENCIES.—In carrying out 
its purposes, the FHA may use information, services, 
staff, and facilities of any executive agency, independent 
agency, department (including the Department of Housing 
and Urban Development and the Department of Agri-
culture), or enterprise (as such term is defined in section 
101 of the Protecting American Taxpayers and Home-
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owners Act of 2018) with the consent of the agency, de-
partment, or enterprise and shall reimburse the agency, 
department, or enterprise for the cost of such information, 
services, staff, and facilities. 
(h) INDEMNIFICATION.—The FHA may provide for 
the indemnification of any officer, employee, contractor, 
or agent of the FHA on such terms as the FHA deter-
mines proper, except that, to the extent that the FHA self- 
insures for any indemnification— 
(1) the aggregate maximum amount of indem-
nification outstanding at any time shall not exceed 
5 percent of the amount of capital required under 
section 216 to be maintained by the Mutual Mort-
gage Insurance Fund; and 
(2) not more than $1,000,000 may be paid as 
an indemnity for any single event. 
(i) AMENDMENTS TO HOUSING ACT OF 1949.—Sec-
tion 501 of the Housing Act of 1949 (42 U.S.C. 1471) 
is amended by adding at the end the following new sub-
sections: 
‘‘(k) AUTHORITY
OF CHIEF RISK OFFICER
OF 
FHA.—The Chief Risk Officer of the FHA appointed pur-
suant to section 525(b) of the Protecting American Tax-
payers and Homeowners Act of 2018 shall be solely re-
sponsible for all matters relating to evaluating, managing, 
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and mitigating risk to the programs under this title for 
making, insuring, and guaranteeing housing loans and en-
suring the performance of such housing loans. 
‘‘(l) AUTHORITY OF CHIEF TECHNOLOGY OFFICER 
OF FHA.—The Chief Technology Officer of the FHA ap-
pointed pursuant to section 525(c) of the Protecting 
American Taxpayers and Homeowners Act of 2018 shall 
be solely responsible for all matters relating to information 
technology management relating to the programs under 
this title for making, insuring, and guaranteeing housing 
loans.’’. 
SEC. 526. FINANCIAL, UNDERWRITING, AND OPERATIONS 
SYSTEMS. 
(a) IN GENERAL.—The FHA shall develop, maintain, 
lease, or acquire such financial, underwriting, and oper-
ations systems as may be necessary to carry out the re-
sponsibilities of the FHA. Such systems shall be designed 
and developed in a manner so that such systems shall also 
be used for the financial, underwriting, and operations 
systems, respectively, of the programs under title V of the 
Housing Act of 1949 for making, guaranteeing, and insur-
ing rural housing loan programs. 
(b) USE BY RURAL HOUSING SERVICE PROGRAMS.— 
(1) AVAILABILITY.—All financial, underwriting, 
and operations systems of the FHA shall be avail-
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able for use by the FHA to the extent necessary to 
ensure compliance with section 501(m) of the Hous-
ing Act of 1949 (42 U.S.C. 1471(l)). 
(2) USE.—Section 501 of the Housing Act of 
1949 (42 U.S.C. 1471), as amended by the pre-
ceding provisions of this title, is further amended by 
adding at the end the following new subsection: 
‘‘(m) USE OF FHA SYSTEMS.—The Administrator 
and Deputy Administrator of the FHA, the Chief Risk Of-
ficer of the FHA, and the Chief Technology Officer of the 
FHA shall utilize the financial, underwriting, and oper-
ations systems of the FHA in carrying out all financial, 
underwriting, and operations functions with respect to the 
programs under this title for making, insuring, or guaran-
teeing housing loans.’’. 
SEC. 527. PROCUREMENT. 
(a) IN GENERAL.—The FHA shall establish an eco-
nomical and results-oriented system for the procurement, 
supply, and disposition by the FHA of personal property 
and services, which shall include performance measures 
and standards for determining the extent to which the 
FHA’s procurement of property and services satisfies the 
objective for which the procurement was undertaken. The 
system shall be consistent with the principles of impar-
tiality and competitiveness. 
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(b) EXEMPTION FROM FEDERAL PROPERTY AND AD-
MINISTRATIVE SERVICE ACT REQUIREMENTS.—Section 
113(e) of title 40, United States Code, is amended— 
(1) in paragraph (19), by striking ‘‘or’’ at the 
end; 
(2) in paragraph (20), by striking the period at 
the end and inserting ‘‘; or’’; and 
(3) by adding at the end the following new 
paragraph: 
‘‘(21) The Federal Housing Administration.’’. 
(c) EXEMPTION FROM PROCUREMENT PROTEST SYS-
TEM.—Subchapter V of chapter 35 of title 31, United 
States Code, relating to the procurement protest system, 
shall not apply to the FHA. 
SEC. 528. APPLICABILITY OF LAWS. 
(a) SUBSIDY LAYERING.—For purposes of section 
102(d) of the Department of Housing and Urban Develop-
ment Reform Act of 1989, mortgage insurance and other 
credit enhancement provided under this title shall not be 
considered assistance within the jurisdiction of the De-
partment. 
(b) GOVERNMENT CORPORATION CONTROL ACT.— 
Section 9101(3) of title 31, United States Code, is amend-
ed by adding at the end the following new subparagraph: 
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‘‘(S) the Federal Housing Administra-
tion.’’. 
(c) TAX EXEMPT STATUS OF FHA.—Section 501(l) 
of the Internal Revenue Code of 1986 (26 U.S.C. 501(l)) 
is amended by adding at the end the following new para-
graph: 
‘‘(5) The Federal Housing Administration es-
tablished under subtitle C of title V of the Pro-
tecting American Taxpayers and Homeowners Act of 
2018.’’. 
SEC. 529. EVALUATION. 
(a) IN GENERAL.—The Director shall conduct a 
study and submit a report to the President and the Con-
gress on— 
(1) whether this title provides sufficient author-
ity to permit the FHA to accomplish its public pur-
poses efficiently and effectively, and in a safe and 
sound manner; 
(2) the impact of the limitations on business ac-
tivities as to mortgage amounts and aggregate com-
mitments, and any other statutory limitations, on 
the current and anticipated business activity of the 
FHA; and 
(3) whether the provisions of subtitle C appro-
priately provide that the FHA will be operated in a 
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253 
safe and sound manner and will fulfill the public 
purposes of its establishment. 
(b) TIMING.—The report required by this section 
shall be submitted on the third January 1st occurring 
after the conclusion of the transition period under section 
551. 
SEC. 530. FUNDING. 
(a) FUNDING OF SALARIES AND EXPENSES.—There 
is authorized to be appropriated for each fiscal year to 
the FHA, for salaries, expenses, and technology for the 
management and operations of the FHA an amount not 
exceeding the amount of the negative subsidy credited to 
the negative subsidy receipt account not needed for re-
serves of the funds of the FHA pursuant to sections 216 
and 219. 
(b) FUNDING OF CLAIMS.— 
(1) AVAILABILITY OF FUNDS.—Amounts cred-
ited to the financing account of the FHA, estab-
lished pursuant to title V of the Congressional 
Budget Act of 1974, shall be permanently and in-
definitely available for payment of any claim that 
the FHA approves under a contract of insurance or 
other credit enhancement instrument pursuant to 
this title. 
(2) BORROWING AUTHORITY.— 
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(A) IN GENERAL.—To the extent that such 
amounts are insufficient for such purpose, the 
FHA may borrow from the Treasury pursuant 
to title V of the Congressional Budget Act of 
1974. 
(B) NOTICE
TO
CONGRESS.—Upon exer-
cising the authority referred to in subparagraph 
(A), the FHA shall submit to the Congress— 
(i) notice of such exercise of authority 
and the extent of the borrowing under-
taken; 
(ii) a plan for repayment to the 
Treasury of the amounts borrowed, speci-
fying the time and amounts of such pay-
ments; and 
(iii) if such borrowing is for the Mu-
tual Mortgage Insurance Fund, how the 
FHA will comply with the capital restora-
tion plan required under section 217(c). 
PART 2—AUTHORITY OVER RURAL HOUSING 
PROGRAMS OF DEPARTMENT OF AGRICULTURE 
SEC. 541. AUTHORITY OVER RURAL HOUSING SERVICE 
PROGRAMS. 
After the expiration of the transition period under 
section 551— 
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(1) the FHA shall exercise (in addition to pow-
ers set forth in section 552) all authority and under-
take all responsibilities of the Secretary of Agri-
culture under title V of the Housing Act of 1949 (as 
amended by this title), except as otherwise provided 
in this title and except that any authority that re-
quires an appropriation may be conducted only to 
the extent that amounts are so appropriated; and 
(2) such authority shall not be subject to the 
review or approval of the Secretary of Agriculture. 
SEC. 
542. 
TERMINATION 
OF 
SECRETARY 
OF 
AGRI-
CULTURE’S RURAL HOUSING AUTHORITY. 
After the expiration of the transition period under 
section 551, the Secretary of Agriculture may not exercise 
any authority under title V of the Housing Act of 1949 
and any reference to the Secretary in such title shall be 
construed to refer to the FHA. 
SEC. 543. CONTINUATION OF OBLIGATIONS. 
This subtitle and section 552(4) may not be con-
strued to affect the validity of any right, duty, or obliga-
tion of the United States or other person arising under 
or pursuant to any commitment or agreement lawfully en-
tered into with the Secretary of Agriculture under title V 
of the Housing Act of 1949. 
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256 
SEC. 544. STATUS OF EMPLOYEES. 
This subtitle may not be construed to transfer or oth-
erwise affect the status of any employee of the Depart-
ment of Agriculture. 
PART 3—TRANSITION 
SEC. 551. TRANSITION PERIOD. 
(a) IN GENERAL.—For purposes of this subtitle, the 
term ‘‘transition period’’ means the period that— 
(1) begins on the date of the enactment of this 
Act; and 
(2) ends upon the earlier of— 
(A) the date that the Director publishes 
notice in the Federal Register that the Director 
has determined that all of the requirements 
under subsection (b) have been completed, ex-
cept that the Director may not publish such no-
tice before the expiration of the 2-year period 
beginning on the date of the enactment of this 
Act; or 
(B) the expiration of the 5-year period be-
ginning on the date of the enactment of this 
Act. 
(b) REQUIREMENTS FOR ENDING TRANSITION PE-
RIOD.—The requirements under this subsection are the 
following: 
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(1) APPROVAL
OF
INITIAL
ANNUAL
BUDGET 
AND BUSINESS PLAN.—The FHA has submitted to 
the Director of the Federal Housing Finance Agency 
an initial annual budget and business plan and the 
Director has approved the budget and plan. 
(2) DETERMINATION
OF
CORPORATE
CAPAC-
ITY.—The Director of the Office of Management 
and Budget has determined, and notified the Direc-
tor, that the staff, systems, and administrative infra-
structure of the FHA are sufficient to permit the 
FHA to fully conduct the operation of its business. 
SEC. 552. AUTHORITY DURING TRANSITION PERIOD. 
During the transition period the FHA may— 
(1) carry out any power or responsibility of the 
Secretary of the Housing and Urban Development 
relating to mortgage insurance programs under the 
National Housing Act that the Secretary delegates 
to the FHA, using the staff, systems, and adminis-
trative infrastructure that the FHA engages or ac-
quires during the transition period, or the personnel 
and other resources of the Secretary; 
(2) incur any obligation consistent with— 
(A) the carrying out of a power or respon-
sibility delegated under paragraph (1); or 
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(B) the acquisition, engagement, or devel-
opment of staff, systems (including technology 
to enhance the ability of the FHA to engage in 
the business authorized by the title), and ad-
ministrative structure; 
(3) engage in any activity or undertake any re-
sponsibility (not including entering into, or making 
any commitment to enter into, any contract of insur-
ance under this title) that the FHA determines to 
be consistent with the establishment of the FHA; 
and 
(4) carry out any power or responsibility of the 
Secretary of Agriculture under title V of the Hous-
ing Act of 1949 that the Secretary delegates to the 
FHA, using the staff, systems, and administrative 
infrastructure that the FHA engages or acquires 
during the transition period, and the personnel and 
other resources of the Rural Housing Service. 
SEC. 553. ADVISORY BOARD. 
(a) ESTABLISHMENT.—The Secretary of Housing 
and Urban Development and the Secretary of Agriculture 
shall jointly establish an advisory board to provide advice 
to the Board of Directors of the FHA regarding estab-
lishing and organizing the FHA and creating the business 
plan, premium structure, and product lines of the FHA. 
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(b) FUNCTIONS.—In carrying out its responsibilities 
under subsection (a) the advisory board may— 
(1) obtain guidance from participants in the 
mortgage markets to be served by the FHA; 
(2) assess the housing and mortgage credit 
needs; 
(3) obtain information concerning single family 
housing finance markets to assess how the FHA can 
complement the roles of public and private partici-
pants in such markets; and 
(4) consult with the relevant Federal agencies 
generally regarding how the FHA can improve the 
delivery of single family housing credit enhancement 
to families, communities, and hard-to-serve markets. 
(c) MEMBERSHIP.—The advisory board shall consist 
of— 
(1) the Assistant Secretary of Housing and 
Urban Development who is the Federal Housing 
Commissioner; 
(2) the Administrator of the Rural Housing 
Service of the Department of Agriculture; 
(3) not less than 5 individuals appointed by the 
Secretary of Housing and Urban Development who 
are representatives of the mortgage finance industry; 
and 
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(4) not less than 2 individuals who have exper-
tise in affordable housing serving low- and mod-
erate-income populations. 
Members of the advisory board shall serve at the joint 
pleasure of the Secretary of Housing and Urban Develop-
ment and the Secretary of Agriculture. 
(d) TERMINATION.—The advisory board shall termi-
nate upon the expiration of the transition period under 
section 551. 
SEC. 554. TRANSFER OF HUD AUTHORITY. 
(a) TRANSFER.—Except as provided in subsections 
(c) and (d), effective upon the expiration of the transition 
period, the functions of, authority provided to, and the re-
sponsibilities of the Secretary of Housing and Urban De-
velopment and the Department of Housing and Urban De-
velopment under the following provisions of law are trans-
ferred to the FHA: 
(1) Titles II and V of the National Housing Act 
(12 U.S.C. 1707 et seq., 1735a et seq.). 
(2) Section 3 of Public Law 99–289 (12 U.S.C. 
1721 note; relating to estimates of use of insuring 
authority), except that this paragraph shall not ter-
minate or transfer any authority of the Secretary 
under such section relating to section 306(g) of the 
National Housing Act (12 U.S.C. 1721(g)). 
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(3) Section 801 of the Housing Act of 1954 (12 
U.S.C. 1701j–1; relating to builders warranties). 
(4) Section 424 of the Housing and Community 
Development Act of 1987 (12 U.S.C. 1715z–1c; re-
lating to residential water treatment). 
(5) Section 328 of the Cranston-Gonzalez Na-
tional Affordable Housing Act (12 U.S.C. 1713 
note; relating to delegation of processing). 
(6) Section 106 of the Energy Policy Act of 
1992 (12 U.S.C. 1701z–16; relating to energy effi-
cient mortgages pilot program). 
(7) Section 542 of the Housing and Community 
Development Act of 1992 (12 U.S.C. 1715z–22; re-
lating to multifamily mortgage credit programs). 
(8) Section 103(h) of the Multifamily Housing 
Property Disposition Reform Act of 1994 (12 U.S.C. 
1715z–1a note; relating to alternative uses of multi-
family projects to prevent default). 
(b) REPEAL OF ASSIGNMENT PROVISIONS.—Effec-
tive upon the date of the enactment of this Act, section 
204(a)(1)(B) of the National Housing Act (12 U.S.C. 
1710(a)) is amended by striking the last sentence. 
(c) APPLICABILITY.—The repeals under subsections 
(a) and (b) shall not affect any legally binding obligations 
entered into pursuant to the provisions repealed before the 
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applicable effective date under such subsections. Any 
mortgage insurance, funds, or activities subject, before re-
peal, to a provision of law repealed by such subsections 
shall continue to be governed by the provision as it existed 
immediately before repeal, except that the FHA may exer-
cise any authority under such provision otherwise trans-
ferred to the FHA by this title. 
(d) REFERENCES.—After the expiration of the tran-
sition period, any reference in Federal law to the Secretary 
of Housing and Urban Development, in connection with 
any function of the Secretary transferred under subsection 
(a) or any other provision of this subtitle, shall be deemed 
to be a reference to the FHA. 
SEC. 555. WIND-UP OF HUD AFFAIRS. 
(a) ABOLISHMENT OF POSITIONS.—Effective upon 
the expiration of the transition period, any offices of the 
Department of Housing and Urban Development respon-
sible for functions transferred pursuant to section 554(a), 
to the extent of such functions, and the position of the 
Federal Housing Commissioner in the Department of 
Housing and Urban Development, are abolished. 
(b) DISPOSITION OF AFFAIRS.—During the transi-
tion period, the Secretary of Housing and Urban Develop-
ment, solely for the purpose of winding up the affairs of 
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the Department relating to the functions transferred 
under section 554— 
(1) shall manage the employees of the Depart-
ment responsible for such functions and provide for 
the payment of the compensation and benefits of any 
such employee which accrue before the effective date 
of the transfer of such employee under section 557; 
and 
(2) may take any other action necessary for the 
purpose of winding up the affairs of the Department 
relating to such functions. 
(c) STATUS OF EMPLOYEES BEFORE TRANSFER.— 
The provisions of and amendments made by this title and 
the abolishments under subsection (a) of this section may 
not be construed to affect the status of any employee of 
the Department as an employee of an agency of the United 
States for purposes of any other provision of law before 
the effective date of the transfer of any such employee 
under section 557. 
(d) USE OF PROPERTY AND SERVICES.— 
(1) PROPERTY.—The FHA may use the prop-
erty of the Department of Housing and Urban De-
velopment to perform functions which have been 
transferred to the FHA for such time as is reason-
able to facilitate the orderly transfer of functions 
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transferred under any other provision of this title or 
any amendment made by this title to any other pro-
vision of law. 
(2) AGENCY
SERVICES.—Any agency, depart-
ment, or other instrumentality of the United States, 
and any successor to any such agency, department, 
or instrumentality, which was providing supporting 
services to the Department of Housing and Urban 
Development before the expiration of the transition 
period under subsection (a) in connection with func-
tions that are transferred under 554 to the FHA 
shall— 
(A) continue to provide such services, on a 
reimbursable basis, until the transfer of such 
functions is complete; and 
(B) consult with the FHA to coordinate 
and facilitate a prompt and reasonable transi-
tion. 
(e) CONTINUATION OF SERVICES.—The FHA may 
use the services of employees and other personnel of the 
Department of Housing and Urban Development relating 
to the functions transferred under section 554, on a reim-
bursable basis, to perform functions which have been 
transferred to the FHA for such time as is reasonable to 
facilitate the orderly transfer of functions pursuant to any 
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other provision of this title or any amendment made by 
this title to any other provision of law. 
(f) SAVINGS PROVISIONS.— 
(1) EXISTING RIGHTS, DUTIES, AND OBLIGA-
TIONS NOT AFFECTED.—Subsection (a) shall not af-
fect the validity of any right, duty, or obligation of 
the United States, the Secretary of Housing and 
Urban Development, or any other person, which— 
(A) arises under— 
(i) the National Housing Act; or 
(ii) any other provision of law applica-
ble with respect to the functions of the De-
partment of Housing and Urban Develop-
ment transferred under section 554; and 
(B) existed on the day before the date of 
abolishment under subsection (a). 
(2) CONTINUATION
OF
SUITS.—No action or 
other proceeding commenced by or against the Sec-
retary of Housing and Urban Development in con-
nection with functions transferred to the FHA under 
section 554 shall abate by reason of the enactment 
of this title, except that the FHA shall be sub-
stituted for the Secretary as a party to any such ac-
tion or proceeding. 
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SEC. 556. CONTINUATION AND COORDINATION OF CERTAIN 
ACTIONS. 
(a) IN GENERAL.—All regulations, orders, and deter-
minations described in subsection (b) shall remain in ef-
fect according to the terms of such regulations, orders, 
and determinations, and shall be enforceable by or against 
the FHA, until modified, terminated, set aside, or super-
seded in accordance with applicable law by the FHA, as 
the case may be, any court of competent jurisdiction, or 
operation of law. 
(b) APPLICABILITY.—A regulation, order, or deter-
mination is described in this subsection if it— 
(1) was issued, made, prescribed, or allowed to 
become effective by— 
(A) the Secretary of Housing and Urban 
Development and relates to a function of the 
Secretary transferred under section 554; or 
(B) a court of competent jurisdiction, and 
relates to functions transferred under section 
554; and 
(2) is in effect upon the expiration of the tran-
sition period. 
SEC. 557. TRANSFER AND RIGHTS OF HUD EMPLOYEES. 
(a) TRANSFER.—Each employee of the Department 
of Housing and Urban Development who performs func-
tions transferred under section 554 shall be transferred 
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to the FHA for employment, not later than the date of 
the expiration of the transition period, and such transfer 
shall be deemed a transfer of function for purposes of sec-
tion 3503 of title 5, United States Code. 
(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 the 
position held by such employee on the day imme-
diately 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 
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of Personnel Management for filling such position 
shall be transferred, subject to paragraph (2). 
(2) DECLINE OF TRANSFER.—The FHA may 
decline a transfer of authority under paragraph (1) 
to the extent that such authority relates to— 
(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 FHA determines, after 
the end of the 1-year period beginning on the expiration 
of the transition period, that a reorganization of the com-
bined 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 of the Depart-
ment of Housing and Urban Development accepting 
employment with the FHA as a result of a transfer 
under subsection (a) may retain, for 12 months after 
the date on which such transfer occurs, membership 
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in any employee benefit program of the FHA or the 
Department of Housing and Urban Development, as 
applicable, including insurance, to which such em-
ployee belongs on the date of the expiration of the 
transition period, if— 
(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 FHA. 
(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 FHA. 
(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 FHA, 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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SEC. 558. TRANSFER OF PROPERTY AND FACILITIES. 
Upon the expiration of the transition period, all prop-
erty of the Department of Housing and Urban Develop-
ment relating to the functions transferred under section 
554 shall transfer to the FHA. 
SEC. 559. EFFECTIVE DATE. 
This subtitle shall take effect on the date of the en-
actment of this Act. 
TITLE VI—MISCELLANEOUS 
PROVISIONS 
SEC. 601. PRESERVATION OF ATTORNEY-CLIENT PRIVI-
LEGE 
FOR 
INFORMATION 
PROVIDED 
TO 
FHFA. 
Section 1317 of the Federal Housing Enterprises Fi-
nancial Safety and Soundness Act of 1992 (12 
U.S.C.4517) is amended by adding at the end the fol-
lowing new subsection: 
‘‘(j) PRIVILEGES NOT AFFECTED BY DISCLOSURE TO 
AGENCY.— 
‘‘(1) IN GENERAL.—The submission by any per-
son of any information to the Agency for any pur-
pose in the course of any supervisory or regulatory 
process of the Agency shall not be construed as 
waiving, destroying, or otherwise affecting any privi-
lege such person may claim with respect to such in-
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formation under Federal or State law as to any per-
son or entity other than such Agency. 
‘‘(2) RULE OF CONSTRUCTION.—No provision 
of paragraph (1) may be construed as implying or 
establishing that— 
‘‘(A) any person waives any privilege appli-
cable to information that is submitted or trans-
ferred under any circumstance to which para-
graph (1) does not apply; or 
‘‘(B) any person would waive any privilege 
applicable to any information by submitting the 
information to the Agency, but for this sub-
section.’’. 
SEC. 602. FHFA LIAISON MEMBERSHIP IN FEDERAL FINAN-
CIAL INSTITUTIONS EXAMINATION COUNCIL. 
Section 1007 of the Federal Financial Institutions 
Examination Council Act of 1978 (12 U.S.C. 3306) is 
amended— 
(1) in the section heading, by inserting after 
‘‘STATE’’ the following: ‘‘AND FEDERAL HOUSING 
FINANCE AGENCY’’; 
(2) in the first sentence, by inserting after ‘‘fi-
nancial institutions’’ the following: ‘‘, and one rep-
resentative of the Federal Housing Finance Agen-
cy,’’; and 
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(3) in the last sentence, by inserting ‘‘State’’ 
after ‘‘among the’’. 
SEC. 603. RECOGNITION OF FHFA ENFORCEMENT AUTHOR-
ITY WITH REGARD TO REGULATED ENTITIES. 
Section 1125(c) of the Financial Institution Reform, 
Recovery and Enforcement Act of 1989 (12 U.S.C. 
3354(c); as added by section 1473(q) of the Dodd Frank 
Wall Street Reform and Consumer Protection Act) is 
amended— 
(1) in paragraph (1), by striking ‘‘and’’ at the 
end; 
(2) by redesignating paragraph (2) as para-
graph (3); and 
(3) by inserting after paragraph (1) the fol-
lowing new paragraph: 
‘‘(2) with respect to any regulated entity (as 
such term is defined in section 1303 of the Federal 
Housing Enterprises Financial Safety and Sound-
ness Act of 1992 (12 U.S.C. 4502)), the Federal 
Housing Finance Agency; and’’. 
SEC. 604. EXCEPTION FROM RIGHT TO FINANCIAL PRIVACY 
ACT FOR FHFA AS CONSERVATOR OR RE-
CEIVER. 
Section 1113(o) of the Right to Financial Privacy Act 
of 1978 (12 U.S.C. 3413(o)) is amended— 
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(1) by striking ‘‘(o)’’ and inserting ‘‘(o)(1)’’; 
and 
(2) by adding at the end the following new 
paragraph: 
‘‘(2) This title shall not apply to the examination by 
or disclosure to the Federal Housing Finance Agency or 
its employees or agents of financial records or information 
in the exercise of its supervisory or regulatory functions, 
including conservatorship and receivership functions, with 
respect to any regulated entity or other person partici-
pating in the conduct of the affairs thereof.’’. 
SEC. 605. TECHNICAL AMENDMENT TO FEDERAL HOUSING 
ENTERPRISES 
FINANCIAL 
SAFETY 
AND 
SOUNDNESS ACT OF 1992. 
Section 1368(d) of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 
4618(d)) is amended by striking ‘‘Committee on Banking, 
Finance and Urban Affairs’’ and inserting ‘‘Committee on 
Financial Services’’. 
SEC. 606. APPLICATION OF PRESUMPTION TO ENTERPRISE 
STREAMLINED REFINANCINGS. 
Section 129C(b)(3)(B)(ii) of the Truth in Lending 
Act (15 U.S.C. 1639c(b)(3)(B)(ii); as added by section 
1412 of the Dodd Frank Wall Street Reform and Con-
sumer Protection Act) is amended— 
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(1) by inserting after ‘‘administer,’’ the fol-
lowing: ‘‘or that are owned or guaranteed by an enti-
ty regulated or supervised by such agency,’’; and 
(2) by adding at the end the following new sub-
clause: 
‘‘(V) The Federal Housing Fi-
nance Agency, with regard to mort-
gages owned or guaranteed by an en-
tity regulated or supervised by such 
agency.’’. 
SEC. 607. FHFA AUTHORITY TO REGULATE AND EXAMINE 
CONTRACTUAL COUNTERPARTIES. 
Section 1317 of the Federal Housing Enterprises Fi-
nancial Safety and Soundness Act of 1992, as amended 
by the preceding provisions of this Act, is further amended 
(12 U.S.C. 4517) by adding at the end the following new 
subsection: 
‘‘(k) REGULATION AND EXAMINATION OF CONTRAC-
TUAL COUNTERPARTIES.— 
‘‘(1) AUTHORITY.—When a regulated entity or 
the Office of Finance causes to be performed for 
itself, by contract or otherwise and whether on or off 
its premises, any services authorized to that regu-
lated entity or the Office of Finance by its author-
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izing statute or the Federal Housing Enterprises Fi-
nancial Safety and Soundness Act of 1992— 
‘‘(A) such performance shall be subject to 
regulation and examination by the Federal 
Housing Finance Agency to the same extent as 
if such services were being performed by the 
regulated entity or the Office of Finance itself 
on its own premises, and 
‘‘(B) the regulated entity or the Office of 
Finance shall notify the Director of the exist-
ence of the service relationship within thirty 
days after the making of such service contract 
or the performance of the service, whichever oc-
curs first. 
‘‘(2) REGULATIONS AND ORDERS.—The Direc-
tor may issue such regulations and orders as may be 
necessary to enable the Agency to administer and to 
carry out the purposes of this subsection and to pre-
vent evasions thereof.’’. 
SEC. 608. ELECTION OF DIRECTORS OF A MERGED FED-
ERAL HOME LOAN BANK. 
Section 7 of the Federal Home Loan Bank Act (12 
U.S.C. 1427) is amended— 
(1) in subsection (a)(1), by inserting ‘‘and sub-
section (d)’’ after ‘‘paragraphs (2) through (4)’’; 
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(2) in subsection (b)— 
(A) in the matter preceding paragraph 
(2)— 
(i) by striking ‘‘Each’’ and inserting 
‘‘(1)(A) Except as provided in subsection 
(d), each’’; 
(ii) by inserting ‘‘(B)’’ before ‘‘No 
person’’; 
(iii) by inserting ‘‘(C)’’ before ‘‘As 
used’’; and 
(iv) in the third sentence— 
(I) by striking ‘‘this subsection’’ 
and inserting ‘‘subparagraph (A)’’; 
and 
(II) by striking ‘‘home loan 
bank’’ and inserting ‘‘Home Loan 
Bank’’; and 
(B) in paragraph (2)(A)(ii), by inserting 
‘‘or subsection (d)(4), if applicable,’’ after 
‘‘paragraph (1)’’; 
(3) by striking subsections (c), (d), and (h); 
(4) by redesignating subsections (d), (e), (f), 
and (g) as subsections (e), (f), (g), and (h), respec-
tively; and 
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(5) by inserting after subsection (b) the fol-
lowing: 
‘‘(c) ALLOCATION
OF
MEMBER
DIRECTORSHIPS 
AMONG STATES IN BANK DISTRICT.— 
‘‘(1) DESIGNATION OF MEMBER LOCATION.— 
The Director shall designate the State in which each 
member of each Federal Home Loan Bank shall be 
deemed to be located for the purposes of this sub-
section and subsections (b) and (d), and may from 
time to time change any such designation. If the 
principal place of business of any Bank member is 
located in a State within the district of the Bank of 
which it is a member, the Director shall designate 
that State as the State in which the member shall 
be deemed to be located for those purposes. 
‘‘(2) 
STOCK-BASED
ALLOCATION
OF
DES-
IGNATED MEMBER DIRECTORSHIPS.—The number of 
member directorships designated as representing the 
members located in each separate State in a Federal 
Home Loan Bank district shall be determined by the 
Director in the approximate ratio of the percentage 
of the required stock, as prescribed by regulation of 
the Director, of the members located in that State 
at the end of the calendar year next preceding the 
date of the election to the total required stock, as so 
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determined, of all members of the Bank as of that 
same date. 
‘‘(3) LIMITATIONS
ON
STOCK-BASED
ALLOCA-
TIONS.—Except as provided in subsection (d), the 
following provisions shall apply to the allocation of 
member directorships among the States of a Bank 
district, notwithstanding the requirements of para-
graph (2): 
‘‘(A) In the case of each State, the number 
of member directorships designated as rep-
resenting the members located in that State 
shall not be less than one and shall not be more 
than six. 
‘‘(B) If at any time the number of member 
directorships designated as representing the 
members located in any State would not be at 
least equal to the total number of member di-
rectorships which, on December 31, 1960, were 
filled by officers or directors of members whose 
principal places of business were located in that 
State, the Director shall add to the board of di-
rectors of the Bank of the district in which that 
State is located such number of member direc-
torships, and shall so designate the directorship 
or directorships thus added, that the number of 
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member 
directorships 
designated 
as 
rep-
resenting the members located in that State will 
equal said total number. Any member director-
ship so added shall exist only until the expira-
tion of its first term. 
‘‘(d) BOARD SIZE, COMPOSITION, AND ELECTIONS 
FOR COMBINED BANKS.—Notwithstanding any other pro-
vision of this section, the following requirements shall 
apply to the size and composition of, and the election of 
directors to, the board of any Bank created as result of 
the combination of two or more Banks under section 26: 
‘‘(1) BOARD SIZE.—The management of a com-
bined Bank shall be vested in a board of 15 direc-
tors, or such lesser number as the Director deter-
mines appropriate, consistent with the safe and 
sound operation of the combined Bank. 
‘‘(2) BOARD MAKEUP.—The Director shall es-
tablish the respective number of member director-
ships and independent directorships for the board of 
the combined Bank such that— 
‘‘(A) member directors shall comprise at 
least the majority of the members of the board 
of directors; and 
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‘‘(B) independent directors shall comprise 
not fewer than 2⁄5 of the members of the board 
of directors. 
‘‘(3) ALLOCATION
OF
MEMBER
DIRECTOR-
SHIPS.—The Director shall allocate the member di-
rectorships of the board of a combined Bank among 
the States of the Bank district in accordance with 
the requirements of subsection (c)(2), except that— 
‘‘(A) no State shall be allocated more than 
two member directorships until every state has 
been allocated at least one member directorship; 
and 
‘‘(B) if, after the Director has allocated all 
but one of the member directorships, there re-
main any States to which no member director-
ship has yet been allocated, then the Director 
shall allocate the remaining member director-
ship to represent the members located in all of 
the States that have not otherwise been allo-
cated a member directorship. 
‘‘(4) ELECTION OF DIRECTORS.—The directors 
of a combined Bank shall be nominated and elected 
as provided in subsection (b), except that, in the 
case of a member directorship that has been des-
ignated as representing the members of two or more 
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States pursuant to paragraph (3)(B), the following 
requirements shall apply in lieu of those set forth in 
subsection (b)(1)(A): 
‘‘(A) The directorship shall be filled by a 
person who is an officer or director of a mem-
ber located in one of the States represented. 
‘‘(B) Each member located in each State 
represented shall be entitled to nominate an eli-
gible person to fill the directorship, and the 
member director shall be elected from persons 
so nominated by a plurality of the votes that 
those members may cast under subparagraph 
(C). 
‘‘(C) Each member located in each State 
represented may cast a number of votes equal 
to the number of shares of stock in the Bank 
required to be held by the member at the end 
of the calendar year next preceding the election, 
but not in excess of the average number of 
shares of stock in the Bank required to be held 
at the end of that year by the respective mem-
bers of the Bank located in those States. 
‘‘(5) INITIAL
DIRECTORS
FOR
NEWLY
COM-
BINED
BANKS.—The following requirements shall 
apply to the selection of the individuals to serve as 
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the initial directors of a combined Bank as of the ef-
fective date of the combination: 
‘‘(A) The terms of office of any directors 
of the combining Banks who do not become di-
rectors of the combined Bank shall terminate as 
of the effective date of the combination. 
‘‘(B) The individuals to serve as the initial 
directors of a newly combined Bank shall be 
chosen from among the incumbent directors of 
the predecessor Banks serving immediately 
prior to the effective date of the combination of 
those Banks and shall be— 
‘‘(i) as designated by the Director in 
the case of a Bank created from a com-
bination of two or more Banks pursuant to 
a reorganization under section 26(a); and 
‘‘(ii) as agreed upon among the merg-
ing Banks and approved by the Director in 
the case of a Bank created from a vol-
untary merger of two or more Banks pur-
suant to section 26(b). 
‘‘(C) Each initial director of the combined 
Bank shall be entitled to serve for the remain-
der of the term of office that the director had 
with the predecessor Bank. Terms served as a 
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director of a predecessor Bank shall be counted 
as being served as a director of the combined 
Bank for purposes of determining term limits 
under subsection (e)(3). 
‘‘(D) Beginning with the first election of 
directors occurring after the combination of the 
predecessor Banks, the Director shall adjust the 
term of any directorship of the combined Bank 
as necessary to achieve and maintain the stag-
gering of terms that is required under sub-
section (e)(2). 
‘‘(e) TERMS; RULES AND REGULATIONS GOVERNING 
NOMINATIONS AND ELECTIONS.— 
‘‘(1) TERMS.—Except as provided in paragraph 
(2), the term of each Federal Home Loan Bank di-
rector shall be 4 years. 
‘‘(2) ADJUSTMENT OF TERMS.—The Director 
shall adjust the terms of members from time to time 
as necessary to ensure that the terms of the mem-
bers of the board of directors are staggered with ap-
proximately 1⁄4 of the terms expiring each year. 
‘‘(3) TERM LIMITS.—If any person has been 
elected to each of three consecutive full terms as a 
director of a Federal Home Loan Bank and has 
served for all or part of each of those terms, that 
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person shall not be eligible for election to a director-
ship of that Bank for a term which begins earlier 
than two years after the expiration of the last expir-
ing of the three terms. 
‘‘(4) RULES
AND
REGULATIONS
GOVERNING 
NOMINATIONS
AND
ELECTIONS.—The Director is 
hereby authorized to prescribe such rules and regu-
lations as the Director may deem necessary or ap-
propriate for the nomination and election of direc-
tors of Federal Home Loan Banks, including, with-
out limitation on the generality of the foregoing, 
rules and regulations with respect to the breaking of 
ties and with respect to the inclusion of more than 
one directorship on a single ballot and the methods 
of voting and of determining the results of voting in 
such cases.’’; 
(6) in subsection (f), as so redesignated, by 
striking the first and second sentences; 
(7) in subsection (h), as so redesignated— 
(A) by striking ‘‘home loan bank’’ each 
place such term appears and inserting ‘‘Home 
Loan Bank’’; and 
(B) in paragraph (1), by striking ‘‘such 
bank’’ and ‘‘the bank’’ and inserting ‘‘such 
Bank’’ and ‘‘the Bank’’, respectively; 
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(8) in subsection (i)(1)— 
(A) by striking ‘‘bank’’ and inserting 
‘‘Bank’’; and 
(B) by striking ‘‘board’’ and inserting ‘‘Di-
rector’’; 
(9) in subsection (j), by striking ‘‘bank’’ and in-
serting ‘‘Bank’’; and 
(10) by striking the second subsection (l), as 
added by section 1202(8) of the Housing and Eco-
nomic Recovery Act of 2008. 
SEC. 609. HOME EQUITY CONVERSION MORTGAGE PRO-
GRAM. 
(a) ESTABLISHMENT OF SEPARATE MORTGAGE IN-
SURANCE FUND.—Section 255 of the National Housing 
Act (12 U.S.C. 1715–20) is amended by adding at the 
end the following new subsection: 
‘‘(s) HOME EQUITY CONVERSION MORTGAGE INSUR-
ANCE FUND.— 
‘‘(1) ESTABLISHMENT.—There is hereby cre-
ated a Home Equity Conversion Mortgage Insurance 
Fund (in this section referred to as the ‘Fund’), 
which shall be used by the Secretary as a revolving 
fund for carrying out the mortgage insurance obliga-
tions of this section and for mortgages and commit-
ments transferred pursuant to paragraph (2). 
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‘‘(2) TRANSFER OF INSURANCE AND COMMIT-
MENTS.—The Secretary shall transfer to the Fund 
all commitments for insurance issued under this sec-
tion before the date of the enactment of this sub-
section and the insurance of any mortgage insured 
under this section before such date of enactment. 
‘‘(3) TRANSFER OF AMOUNTS.—The Secretary 
shall transfer to the Fund from the Mutual Mort-
gage Insurance Fund an amount equal to the total 
of the premium payments previously made with re-
spect to the insurance of mortgages transferred to 
the Fund pursuant to paragraph (2) minus the total 
of any administrative expenses previously incurred in 
connection with such mortgages, plus such other 
amounts as the Secretary determines to be necessary 
and appropriate. 
‘‘(4) CREDITS.—Premium charges, adjusted 
premium charges, inspection and other fees, service 
charges, and any other income received by the Sec-
retary under this section, together with all earnings 
on the assets of the Fund, shall be credited to the 
Fund. 
‘‘(5) PAYMENTS.—All payments made pursuant 
to claims of mortgagees with respect to mortgages 
insured under this section, cash adjustments, the 
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principal of and interest paid on debentures which 
are the obligation of the Fund, expenses incurred in 
connection with or as a consequence of the acquisi-
tion and disposal of property acquired under such 
this section, and all administrative expenses in con-
nection with the mortgage insurance operations 
under this section shall be paid out of the Fund. 
‘‘(6) INVESTMENTS.—Moneys in the Fund not 
needed for current operations of the Fund shall be 
deposited with the Treasurer of the United States to 
the credit of the Fund or invested in bonds or other 
obligations of, or in bonds or other obligations guar-
anteed by, the United States or any agency of the 
United States, except that such moneys shall to the 
maximum extent feasible be invested in such bonds 
or other obligations the proceeds of which will be 
used to directly support the residential mortgage 
market. The Secretary, with the approval of the Sec-
retary of the Treasury, may purchase in the open 
market debentures which are the obligation of the 
Fund. Such purchases shall be made at a price 
which will provide an investment yield of not less 
than the yield obtained from other investments au-
thorized by this subsection. Debentures so purchased 
shall be canceled and not reissued.’’. 
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(b) DISBURSEMENT OF FUNDS TO PROTECT HOME-
OWNER
AND LENDER.—Subparagraph (A) of section 
255(i)(2) of the National Housing Act (12 U.S.C. 1715z– 
20(i)(2)(A)) is amended by striking ‘‘Mutual Mortgage In-
surance Fund’’ and inserting ‘‘Home Equity Conversion 
Mortgage Insurance Fund established under subsection 
(s)’’. 
SEC. 610. FHA-RELATED CONFORMING AMENDMENTS. 
(a) PENALTIES FOR EQUITY SKIMMING.—Paragraph 
(1) of section 912 of the Housing and Urban Development 
Act of 1970 (12 U.S.C. 1709–2(1)) is amended by insert-
ing ‘‘or Federal Housing Administration’’ after ‘‘Housing 
and Urban Development’’. 
(b) FRAUDULENTLY MISAPPROPRIATED MORTGAGE 
PROCEEDS.—Section 819 of the Housing and Community 
Development Act of 1974 (12 U.S.C. 1701l–1) is amend-
ed— 
(1) by inserting ‘‘or the Federal Housing Ad-
ministration’’ after ‘‘Secretary of Housing and 
Urban Development’’; and 
(2) by inserting ‘‘or such Administration, as ap-
propriate,’’ before ‘‘has reason’’. 
(c) UNAUTHORIZED USE OF MULTIFAMILY HOUSING 
ASSETS AND INCOME.—Section 421 of the Housing and 
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Community Development Act of 1987 (12 U.S.C. 1715z– 
4a) is amended— 
(1) in subsection (a)— 
(A) in paragraph (1)— 
(i) by inserting ‘‘or the FHA, as ap-
plicable,’’ after ‘‘Secretary’)’’; 
(ii) by inserting ‘‘or by the FHA pur-
suant to title II of the Protecting Amer-
ican Taxpayers and Homeowners Act of 
2018’’ after ‘‘National Housing Act’’; and 
(iii) in the last sentence, by inserting 
‘‘or the FHA’’ after ‘‘Secretary’’ each 
place such term appears; 
(B) in paragraph (2), by inserting ‘‘or title 
II of the Protecting American Taxpayers and 
Homeowners Act of 2018’’ before the first 
comma; and 
(2) in subsections (b) through (e)— 
(A) by inserting ‘‘or the FHA, as applica-
ble,’’ after ‘‘Secretary,’’ each place such term 
appears; and 
(B) by inserting ‘‘or the FHA, as applica-
ble,’’ after ‘‘Secretary’’ each place such term 
appears (except the penultimate occurrence in 
subsection (c)). 
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(d) SINGLE FAMILY MORTGAGE FORECLOSURE.— 
The Single Family Mortgage Foreclosure Act of 1994 (12 
U.S.C. 3751 et seq.) is amended— 
(1) 
in 
section 
802(b)(1) 
(12 
U.S.C. 
3751(b)(1)), by inserting ‘‘or by the FHA pursuant 
to subtitle B of title V of the Protecting American 
Taxpayers and Homeowners Act of 2018’’ before the 
semicolon; 
(2) 
in 
section 
803(10)(A) 
(12 
U.S.C. 
3752(10)(A))— 
(A) in subparagraph (A), by striking ‘‘or’’ 
at the end; 
(B) by redesignating subparagraph (B) as 
subparagraph (C); and 
(C) by inserting after subparagraph (A) 
the following new subparagraph: 
‘‘(B) is held by the FHA pursuant to sub-
title B of title V of the Protecting American 
Taxpayers and Homeowners Act of 2018; or’’; 
and 
(3) by adding at the end the following new sec-
tion: 
‘‘SEC. 820. AUTHORITY OF FHA. 
‘‘After the expiration of the transition period under 
section 551 of the Protecting American Taxpayers and 
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Homeowners Act of 2018, any reference in sections 804 
through 819 of this Act to the Secretary shall be consid-
ered to also refer to the FHA (as established pursuant 
to subtitle B of title V of such Act), but only with respect 
to 
single 
family 
mortgages 
described 
in 
section 
803(10)(B).’’. 
(e) MULTIFAMILY MORTGAGE FORECLOSURE.—The 
Multifamily Mortgage Foreclosure Act of 1981 (12 U.S.C. 
3701 et seq.) is amended— 
(1) in section 363(2) (12 U.S.C. 3702(2)), by 
adding after and below subparagraph (E) the fol-
lowing: 
‘‘Such term includes a mortgage on a property consisting 
of 5 or more dwelling units that is held by the FHA pursu-
ant to subtitle B of title V of the Protecting American 
Taxpayers and Homeowners Act of 2018.’’. 
(2) by adding at the end the following new sec-
tion: 
‘‘AUTHORITY OF FHA 
‘‘SEC. 369J. After the expiration of the transition pe-
riod under section 551 of the Protecting American Tax-
payers and Homeowners Act of 2018, any reference in sec-
tions 364 through 369I of this Act to the Secretary shall 
be considered to also refer to the FHA (as established pur-
suant to subtitle B of such Act), but only with respect 
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to multifamily mortgages described in the last sentence 
of section 363(2).’’. 
(f) EFFECTIVE DATE.—The amendment made by 
this section shall be made, and shall apply beginning on, 
the expiration of the transition period under section 551. 
Æ 
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