SEC. 107. EXAMINERS AND ACCOUNTANTS. 
(a) EXAMINATIONS.—Section 1317 of the Housing 
and Community Development Act of 1992 (12 U.S.C. 
4517) is amended— 
(1) in subsection (a), by adding after the period 
at the end the following: ‘‘Each examination under 
this subsection of a regulated entity shall include a 
review of the procedures required to be established 
and maintained by the regulated entity pursuant to 
section 1314(c) (relating to fraudulent financial 
transactions) and the report regarding each such ex-
amination shall describe any problems with such 
procedures maintained by the regulated entity.’’; 
(2) in subsection (b)— 
(A) by inserting ‘‘of a regulated entity’’ 
after ‘‘under this section’’; and 
(B) by striking ‘‘to determine the condition 
of an enterprise for the purpose of ensuring its 
financial safety and soundness’’ and inserting 
‘‘or appropriate’’; and 
(3) in subsection (c)— 
(A) in the second sentence, by inserting 
‘‘to conduct examinations under this section’’ 
before the period; and 
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(B) in the third sentence, by striking 
‘‘from amounts available in the Federal Hous-
ing Enterprises Oversight Fund’’. 
(b) ENHANCED AUTHORITY TO HIRE EXAMINERS 
AND ACCOUNTANTS.—Section 1317 of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4517) 
is amended by adding at the end the following new sub-
section: 
‘‘(g) APPOINTMENT OF ACCOUNTANTS, ECONOMISTS, 
SPECIALISTS, AND EXAMINERS.— 
‘‘(1) APPLICABILITY.—This section applies with 
respect to any position of examiner, accountant, spe-
cialist in financial markets, specialist in technology, 
and economist at the Agency, with respect to super-
vision and regulation of the regulated entities, that 
is in the competitive service. 
‘‘(2) APPOINTMENT AUTHORITY.—The Director 
may appoint candidates to any position described in 
paragraph (1)— 
‘‘(A) in accordance with the statutes, rules, 
and regulations governing appointments in the 
excepted service; and 
‘‘(B) notwithstanding any statutes, rules, 
and regulations governing appointments in the 
competitive service.’’. 
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(c) REPEAL.—Section 20 of the Federal Home Loan 
Bank Act (12 U.S.C. 1440) is amended— 
(1) in the section heading, by striking ‘‘RE-
PORTS’’ and inserting ‘‘GAO AUDITS’’; 
(2) in the third sentence, by striking ‘‘the 
Board and’’ each place such term appears; and 
(3) by striking the first two sentences and in-
serting the following: ‘‘The Federal home loan banks 
shall be subject to examinations by the Director to 
the extent provided in section 1317 of the Federal 
Housing Enterprises Financial Safety and Sound-
ness Act of 1992 (12 U.S.C. 4517).’’. 
SEC. 108. PROHIBITION AND WITHHOLDING OF EXECUTIVE 
COMPENSATION. 
(a) IN GENERAL.—Section 1318 of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4518) 
is amended— 
(1) in the section heading, by striking ‘‘OF EX-
CESSIVE’’ and inserting ‘‘AND WITHHOLDING OF 
EXECUTIVE’’; 
(2) by redesignating subsection (b) as sub-
section (d); and 
(3) by inserting after subsection (a) the fol-
lowing new subsections: 
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‘‘(b) FACTORS.—In making any determination under 
subsection (a), the Director may take into consideration 
any factors the Director considers relevant, including any 
wrongdoing on the part of the executive officer, and such 
wrongdoing shall include any fraudulent act or omission, 
breach of trust or fiduciary duty, violation of law, rule, 
regulation, order, or written agreement, and insider abuse 
with respect to the regulated entity. The approval of an 
agreement or contract pursuant to section 309(d)(3)(B) 
of the Federal National Mortgage Association Charter Act 
(12 U.S.C. 1723a(d)(3)(B)) or section 303(h)(2) of the 
Federal Home Loan Mortgage Corporation Act (12 U.S.C. 
1452(h)(2)) shall not preclude the Director from making 
any subsequent determination under subsection (a). 
‘‘(c) WITHHOLDING
OF COMPENSATION.—In car-
rying out subsection (a), the Director may require a regu-
lated entity to withhold any payment, transfer, or dis-
bursement of compensation to an executive officer, or to 
place such compensation in an escrow account, during the 
review of the reasonableness and comparability of com-
pensation.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) FANNIE MAE.—Section 309(d) of the Fed-
eral National Mortgage Association Charter Act (12 
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U.S.C. 1723a(d)) is amended by adding at the end 
the following new paragraph: 
‘‘(4) Notwithstanding any other provision of this sec-
tion, the corporation shall not transfer, disburse, or pay 
compensation to any executive officer, or enter into an 
agreement with such executive officer, without the ap-
proval of the Director, for matters being reviewed under 
section 1318 of the Federal Housing Enterprises Finan-
cial Safety and Soundness Act of 1992 (12 U.S.C. 
4518).’’. 
(2) FREDDIE MAC.—Section 303(h) of the Fed-
eral Home Loan Mortgage Corporation Act (12 
U.S.C. 1452(h)) is amended by adding at the end 
the following new paragraph: 
‘‘(4) Notwithstanding any other provision of this sec-
tion, the Corporation shall not transfer, disburse, or pay 
compensation to any executive officer, or enter into an 
agreement with such executive officer, without the ap-
proval of the Director, for matters being reviewed under 
section 1318 of the Federal Housing Enterprises Finan-
cial Safety and Soundness Act of 1992 (12 U.S.C. 
4518).’’. 
(3) FEDERAL HOME LOAN BANKS.—Section 7 
of the Federal Home Loan Bank Act (12 U.S.C. 
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1427) is amended by adding at the end the following 
new subsection: 
‘‘(l) WITHHOLDING
OF COMPENSATION.—Notwith-
standing any other provision of this section, a Federal 
home loan bank shall not transfer, disburse, or pay com-
pensation to any executive officer, or enter into an agree-
ment with such executive officer, without the approval of 
the Director, for matters being reviewed under section 
1318 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4518).’’. 
SEC. 109. REVIEWS OF REGULATED ENTITIES. 
Section 1319 of the Housing and Community Devel-
opment Act of 1992 (12 U.S.C. 4519) is amended— 
(1) by striking the section designation and 
heading and inserting the following: 
‘‘SEC. 1319. REVIEWS OF REGULATED ENTITIES.’’; 
and 
(2) by striking ‘‘effectively recognized’’ and all 
that follows through ‘‘broker-dealers’’ and inserting 
the following: ‘‘that the Director considers appro-
priate, including an entity that is registered under 
section 15 of the Securities Exchange Act of 1934 
(15 U.S.C. 78a) as a nationally registered statistical 
rating organization’’. 
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SEC. 110. REGULATIONS AND ORDERS. 
Section 1319G of the Housing and Community De-
velopment Act of 1992 (12 U.S.C. 4526) is amended— 
(1) by striking subsection (a) and inserting the 
following new subsection: 
‘‘(a) AUTHORITY.—The Director shall issue any reg-
ulations, guidelines, and orders necessary to carry out the 
duties of the Director under this title and each of the au-
thorizing statutes to ensure that the purposes of this title 
and such Acts are accomplished.’’; 
(2) in subsection (b), by inserting ‘‘, this title, 
or any of the authorizing statutes’’ after ‘‘under this 
section’’; and 
(3) by striking subsection (c). 
SEC. 111. RISK-BASED CAPITAL REQUIREMENTS. 
(a) IN GENERAL.—Section 1361 of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4611) 
is amended to read as follows: 
‘‘SEC. 1361. RISK-BASED CAPITAL LEVELS FOR REGULATED 
ENTITIES. 
‘‘(a) IN GENERAL.— 
‘‘(1) ENTERPRISES.—The Director shall, by 
regulation, establish risk-based capital requirements 
for the enterprises to ensure that the enterprises op-
erate in a safe and sound manner, maintaining suffi-
cient capital and reserves to support the risks that 
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arise in the operations and management of the en-
terprises. 
‘‘(2) FEDERAL HOME LOAN BANKS.—The Di-
rector shall establish risk-based capital standards 
under section 6 of the Federal Home Loan Bank 
Act for the Federal home loan banks. 
‘‘(b) CONFIDENTIALITY OF INFORMATION.—Any per-
son that receives any book, record, or information from 
the Director or a regulated entity to enable the risk-based 
capital requirements established under this section to be 
applied shall— 
‘‘(1) maintain the confidentiality of the book, 
record, or information in a manner that is generally 
consistent with the level of confidentiality established 
for the material by the Director or the regulated en-
tity; and 
‘‘(2) be exempt from section 552 of title 5, 
United States Code, with respect to the book, 
record, or information. 
‘‘(c) NO LIMITATION.—Nothing in this section shall 
limit the authority of the Director to require other reports 
or undertakings, or take other action, in furtherance of 
the responsibilities of the Director under this Act.’’. 
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(b) FEDERAL HOME LOAN BANKS RISK-BASED CAP-
ITAL.—Section 6(a)(3) of the Federal Home Loan Bank 
Act (12 U.S.C. 1426(a)(3)) is amended— 
(1) by striking subparagraph (A) and inserting 
the following new subparagraph: 
‘‘(A) RISK-BASED CAPITAL STANDARDS.— 
The Director shall, by regulation, establish risk- 
based capital standards for the Federal home 
loan banks to ensure that the Federal home 
loan banks operate in a safe and sound manner, 
with sufficient permanent capital and reserves 
to support the risks that arise in the operations 
and management of the Federal home loans 
banks.’’; and 
(2) in subparagraph (B), by striking ‘‘(A)(ii)’’ 
and inserting ‘‘(A)’’. 
SEC. 112. MINIMUM AND CRITICAL CAPITAL LEVELS. 
(a) MINIMUM CAPITAL LEVEL.—Section 1362 of the 
Housing and Community Development Act of 1992 (12 
U.S.C. 4612) is amended— 
(1) in subsection (a), by striking ‘‘IN GEN-
ERAL’’ and inserting ‘‘ENTERPRISES’’; and 
(2) by striking subsection (b) and inserting the 
following new subsections: 
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‘‘(b) FEDERAL HOME LOAN BANKS.—For purposes 
of this subtitle, the minimum capital level for each Federal 
home loan bank shall be the minimum capital required to 
be maintained to comply with the leverage requirement for 
the bank established under section 6(a)(2) of the Federal 
Home Loan Bank Act (12 U.S.C. 1426(a)(2)). 
‘‘(c) ESTABLISHMENT OF REVISED MINIMUM CAP-
ITAL LEVELS.—Notwithstanding subsections (a) and (b) 
and notwithstanding the capital classifications of the regu-
lated entities, the Director may, by regulations issued 
under section 1319G(b), establish a minimum capital level 
for the enterprises, for the Federal home loan banks, or 
for both the enterprises and the banks, that is higher than 
the level specified in subsection (a) for the enterprises or 
the level specified in subsection (b) for the Federal home 
loan banks, to the extent needed to ensure that the regu-
lated entities operate in a safe and sound manner. 
‘‘(d) AUTHORITY TO REQUIRE TEMPORARY IN-
CREASE.—Notwithstanding subsections (a) and (b) and 
any minimum capital level established pursuant to sub-
section (c), the Director may, by order, increase the min-
imum capital level for a regulated entity on a temporary 
basis for such period as the Director may provide if the 
Director— 
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‘‘(1) makes any determination specified in sub-
paragraphs (A) through (C) of section 1364(c)(1); 
‘‘(2) determines that the regulated entity has 
violated any of the prudential standards established 
pursuant to section 1313A and, as a result of such 
violation, determines that an unsafe and unsound 
condition exists; or 
‘‘(3) determines that an unsafe and unsound 
condition exists, except that a temporary increase in 
minimum capital imposed on a regulated entity pur-
suant to this paragraph shall not remain in place for 
a period of more than 6 months unless the Director 
makes a renewed determination of the existence of 
an unsafe and unsound condition. 
‘‘(e) AUTHORITY TO ESTABLISH ADDITIONAL CAP-
ITAL AND RESERVE REQUIREMENTS FOR PARTICULAR 
PROGRAMS.—The Director may, at any time by order or 
regulation, establish such capital or reserve requirements 
with respect to any program or activity of a regulated enti-
ty as the Director considers appropriate to ensure that 
the regulated entity operates in a safe and sound manner, 
with sufficient capital and reserves to support the risks 
that arise in the operations and management of the regu-
lated entity.’’. 
(b) CRITICAL CAPITAL LEVELS.— 
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(1) IN GENERAL.—Section 1363 of the Housing 
and Community Development Act of 1992 (12 
U.S.C. 4613) is amended— 
(A) by striking ‘‘For’’ and inserting ‘‘(a) 
Enterprises.—For’’; and 
(B) by adding at the end the following new 
subsection: 
‘‘(b) FEDERAL HOME LOAN BANKS.— 
‘‘(1) IN GENERAL.—For purposes of this sub-
title, the critical capital level for each Federal home 
loan bank shall be such amount of capital as the Di-
rector shall, by regulation require. 
‘‘(2) CONSIDERATION OF OTHER CRITICAL CAP-
ITAL
LEVELS.—In establishing the critical capital 
level under paragraph (1) for the Federal home loan 
banks, the Director shall take due consideration of 
the critical capital level established under subsection 
(a) for the enterprises, with such modifications as 
the Director determines to be appropriate to reflect 
the difference in operations between the banks and 
the enterprises.’’. 
(2) REGULATIONS.—Not later than the expira-
tion of the 180-day period beginning on the effective 
date under section 185, the Director of the Federal 
Housing Finance Agency shall issue regulations pur-
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suant to section 1363(b) of the Housing and Com-
munity Development Act of 1992 (as added by para-
graph (1) of this subsection) establishing the critical 
capital level under such section. 
SEC. 113. REVIEW OF AND AUTHORITY OVER ENTERPRISE 
ASSETS AND LIABILITIES. 
(a) IN GENERAL.—Subtitle B of title XIII of the 
Housing and Community Development Act of 1992 (12 
U.S.C. 4611 et seq.) is amended— 
(1) by striking the subtitle designation and 
heading and inserting the following: 
‘‘Subtitle B—Required Capital Lev-
els for Regulated Entities, Spe-
cial Enforcement Powers, and 
Reviews of Assets and Liabil-
ities’’; 
and 
(2) by adding at the end the following new sec-
tion: 
‘‘SEC. 1369E. REVIEWS OF ENTERPRISE ASSETS AND LIABIL-
ITIES. 
‘‘(a) IN GENERAL.—The Director shall, by regula-
tion, establish standards by which the portfolio holdings, 
or rate of growth of the portfolio holdings, of the enter-
prises will be deemed to be consistent with the mission 
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and the safe and sound operations of the enterprises. In 
developing such standards, the Director shall consider— 
‘‘(1) the size or growth of the mortgage market; 
‘‘(2) the need for the portfolio in maintaining li-
quidity or stability of the secondary mortgage mar-
ket (including the market for the mortgage-backed 
securities the enterprises issue); 
‘‘(3) the need for an inventory of mortgages in 
connection with securitizations; 
‘‘(4) the need for the portfolio to directly sup-
port the affordable housing mission of the enter-
prises; 
‘‘(5) the liquidity needs of the enterprises; 
‘‘(6) any potential risks posed by the nature of 
the portfolio holdings; and 
‘‘(7) any additional factors the Director deter-
mines to be appropriate, except that such factors 
shall be consistent with the purposes of this Act and 
any of the authorizing statutes. 
‘‘(b) TEMPORARY
ADJUSTMENTS.—The Director 
may, by order, make temporary adjustments to the estab-
lished standards for an enterprise or both enterprises, 
such as during times of economic distress or market dis-
ruption. 
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‘‘(c) AUTHORITY TO REQUIRE DISPOSITION OR AC-
QUISITION.—The Director shall monitor the portfolio of 
each enterprise. Pursuant to subsection (a) and notwith-
standing the capital classifications of the enterprises, the 
Director may, by order, require an enterprise, under such 
terms and conditions as the Director determines to be ap-
propriate, to dispose of or acquire any asset, if the Direc-
tor determines that such action is consistent with the pur-
poses of this Act or any of the authorizing statutes.’’. 
(b) REGULATIONS.—Not later than the expiration of 
the 180-day period beginning on the effective date under 
section 185, the Director of the Federal Housing Finance 
Agency shall issue regulations pursuant to section 
1369E(a) of the Housing and Community Development 
Act of 1992 (as added by subsection (a) of this section) 
establishing the portfolio holdings standards under such 
section. 
SEC. 114. CORPORATE GOVERNANCE OF ENTERPRISES. 
The Housing and Community Development Act of 
1992 is amended by inserting before section 1323 (12 
U.S.C. 4543) the following new section: 
‘‘SEC. 1322A. CORPORATE GOVERNANCE OF ENTERPRISES. 
‘‘(a) BOARD OF DIRECTORS.— 
‘‘(1) INDEPENDENCE.—A majority of seated 
members of the board of directors of each enterprise 
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shall be independent board members, as defined 
under rules set forth by the New York Stock Ex-
change, as such rules may be amended from time to 
time. 
‘‘(2) FREQUENCY OF MEETINGS.—To carry out 
its obligations and duties under applicable laws, 
rules, regulations, and guidelines, the board of direc-
tors of an enterprise shall meet at least eight times 
a year and not less than once a calendar quarter. 
‘‘(3) 
NON-MANAGEMENT
BOARD
MEMBER 
MEETINGS.—The non-management directors of an 
enterprise shall meet at regularly scheduled execu-
tive sessions without management participation. 
‘‘(4) QUORUM; PROHIBITION ON PROXIES.—For 
the transaction of business, a quorum of the board 
of directors of an enterprise shall be at least a ma-
jority of the seated board of directors and a board 
member may not vote by proxy. 
‘‘(5) INFORMATION.—The management of an 
enterprise shall provide a board member of the en-
terprise with such adequate and appropriate infor-
mation that a reasonable board member would find 
important to the fulfillment of his or her fiduciary 
duties and obligations. 
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‘‘(6) ANNUAL REVIEW.—At least annually, the 
board of directors of each enterprise shall review, 
with appropriate professional assistance, the require-
ments of laws, rules, regulations, and guidelines that 
are applicable to its activities and duties. 
‘‘(b) COMMITTEES OF BOARDS OF DIRECTORS.— 
‘‘(1) FREQUENCY
OF
MEETINGS.—Any com-
mittee of the board of directors of an enterprise 
shall meet with sufficient frequency to carry out its 
obligations and duties under applicable laws, rules, 
regulations, and guidelines. 
‘‘(2) REQUIRED COMMITTEES.—Each enterprise 
shall provide for the establishment, however styled, 
of the following committees of the board of directors: 
‘‘(A) Audit committee. 
‘‘(B) Compensation committee. 
‘‘(C) 
Nominating/corporate 
governance 
committee. 
Such committees shall be in compliance with the 
charter, independence, composition, expertise, duties, 
responsibilities, and other requirements set forth 
under section 10A(m) of the Securities Exchange 
Act of 1934 (15 U.S.C. 78j–1(m)), with respect to 
the audit committee, and under rules issued by the 
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