‘‘(I) has incurred or is likely to 
incur losses that will deplete all or sub-
stantially all of its capital; and 
‘‘(II) there is no reasonable pros-
pect that the capital of the regulated 
entity will be replenished.’’; 
(11) by inserting after paragraph (1) the fol-
lowing: 
‘‘(2) AGENCY.—The term ‘Agency’ means the 
Federal Housing Finance Agency established under 
section 1311. 
‘‘(3) AUTHORIZING STATUTES.—The term ‘au-
thorizing statutes’ means— 
‘‘(A) the Federal National Mortgage Asso-
ciation Charter Act; 
‘‘(B) the Federal Home Loan Mortgage Cor-
poration Act; and 
‘‘(C) the Federal Home Loan Bank Act. 
‘‘(4) BOARD.—The term ‘Board’ means the Fed-
eral Housing Finance Oversight Board established 
under section 1313A.’’; 
(12) by inserting after paragraph (10), as redes-
ignated by this section, the following: 
‘‘(11) ENTITY-AFFILIATED
PARTY.—The term 
‘entity-affiliated party’ means—
‘‘(A) any director, officer, employee, or con-
trolling stockholder of, or agent for, a regulated 
entity; 
‘‘(B) any shareholder, affiliate, consultant, 
or joint venture partner of a regulated entity, 
and any other person, as determined by the Di-
rector (by regulation or on a case-by-case basis) 
that participates in the conduct of the affairs of 
a regulated entity, provided that a member of a 
Federal Home Loan Bank shall not be deemed to 
have participated in the affairs of that Bank 
solely by virtue of being a shareholder of, and ob-
taining advances from, that Bank; 
‘‘(C) any independent contractor for a regu-
lated entity (including any attorney, appraiser, 
or accountant), if— 
‘‘(i) the independent contractor know-
ingly or recklessly participates in— 
‘‘(I) any violation of any law or 
regulation; 
‘‘(II) any breach of fiduciary 
duty; or 
‘‘(III) any unsafe or unsound 
practice; and
‘‘(ii) such violation, breach, or practice 
caused, or is likely to cause, more than a 
minimal financial loss to, or a significant 
adverse effect on, the regulated entity; 
‘‘(D) any not-for-profit corporation that re-
ceives its principal funding, on an ongoing 
basis, from any regulated entity; and 
‘‘(E) the Office of Finance.’’; 
(13) by inserting after paragraph (12), as redes-
ignated by this section, the following: 
‘‘(13) LIMITED-LIFE REGULATED ENTITY.—The 
term ‘limited-life regulated entity’ means an entity 
established by the Agency under section 1367(i) with 
respect to a Federal Home Loan Bank in default or 
in danger of default or with respect to an enterprise 
in default or in danger of default.’’; and 
(14) by adding at the end the following: 
‘‘(25) VIOLATION.—The term ‘violation’ includes 
any action (alone or in combination with another or 
others) for or toward causing, bringing about, partici-
pating in, counseling, or aiding or abetting a viola-
tion.’’. 
(b) REFERENCES IN THIS ACT.—As used in this Act, 
unless otherwise specified—
(1) the term ‘‘Agency’’ means the Federal Hous-
ing Finance Agency; 
(2) the term ‘‘Director’’ means the Director of the 
Agency; and 
(3) the terms ‘‘enterprise’’, ‘‘regulated entity’’, 
and ‘‘authorizing statutes’’ have the same meanings 
as in section 1303 of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992, as 
amended by this Act. 
TITLE I—REFORM OF 
REGULATION OF ENTERPRISES 
Subtitle A—Improvement of Safety 
and Soundness Supervision 
SEC. 1101. ESTABLISHMENT OF THE FEDERAL HOUSING FI-
NANCE AGENCY. 
The Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is 
amended by striking sections 1311 and 1312 and inserting 
the following: 
‘‘SEC. 1311. ESTABLISHMENT OF THE FEDERAL HOUSING FI-
NANCE AGENCY. 
‘‘(a) ESTABLISHMENT.—There is established the Fed-
eral Housing Finance Agency, which shall be an inde-
pendent agency of the Federal Government.
‘‘(b) GENERAL SUPERVISORY AND REGULATORY AU-
THORITY.— 
‘‘(1) IN GENERAL.—Each regulated entity shall, 
to the extent provided in this title, be subject to the 
supervision and regulation of the Agency. 
‘‘(2) AUTHORITY OVER FANNIE MAE, FREDDIE 
MAC, THE FEDERAL HOME LOAN BANKS, AND THE OF-
FICE OF FINANCE.—The Director shall have general 
regulatory authority over each regulated entity and 
the Office of Finance, and shall exercise such general 
regulatory authority, including such duties and au-
thorities set forth under section 1313, to ensure that 
the purposes of this Act, the authorizing statutes, and 
any other applicable law are carried out. 
‘‘(c) SAVINGS PROVISION.—The authority of the Direc-
tor to take actions under subtitles B and C shall not in 
any way limit the general supervisory and regulatory au-
thority granted to the Director under subsection (b). 
‘‘SEC. 1312. DIRECTOR. 
‘‘(a) ESTABLISHMENT OF POSITION.—There is estab-
lished the position of the Director of the Agency, who shall 
be the head of the Agency. 
‘‘(b) APPOINTMENT; TERM.— 
‘‘(1) APPOINTMENT.—The Director shall be ap-
pointed by the President, by and with the advice and