156 
be borne by such entities or will be passed on to homebuyers. 
Not later than the expiration of the 12-month period begin-
ning on the date of the enactment of this Act, the Comp-
troller General shall submit a report to the Congress setting 
forth the results and conclusions of such study. This sub-
section shall take effect on the date of the enactment of this 
Act. 
SEC. 140. CONSISTENCY WITH MISSION. 
Subpart B of part 2 of subtitle A of title XIII of the 
Housing and Community Development Act of 1992 (12 
U.S.C. 4561 et seq.) is amended by adding after section 
1337, as added by section 139 of this Act, the following new 
section: 
‘‘SEC. 1338. CONSISTENCY WITH MISSION. 
‘‘This subpart may not be construed to authorize an 
enterprise to engage in any program or activity that con-
travenes or is inconsistent with the Federal National Mort-
gage Association Charter Act or the Federal Home Loan 
Mortgage Corporation Act.’’. 
SEC. 141. ENFORCEMENT. 
(a) CEASE-AND-DESIST PROCEEDINGS.—Section 1341 
of the Housing and Community Development Act of 1992 
(12 U.S.C. 4581) is amended— 
(1) by striking subsection (a) and inserting the 
following new subsection: 
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‘‘(a) GROUNDS FOR ISSUANCE.—The Director may 
issue and serve a notice of charges under this section upon 
an enterprise if the Director determines— 
‘‘(1) the enterprise has failed to meet any hous-
ing goal established under subpart B, following a 
written notice and determination of such failure in 
accordance with section 1336; 
‘‘(2) the enterprise has failed to submit a report 
under section 1314, following a notice of such failure, 
an opportunity for comment by the enterprise, and a 
final determination by the Director; 
‘‘(3) the enterprise has failed to submit the infor-
mation required under subsection (m) or (n) of sec-
tion 309 of the Federal National Mortgage Association 
Charter Act, or subsection (e) or (f) of section 307 of 
the Federal Home Loan Mortgage Corporation Act; 
‘‘(4) the enterprise has violated any provision of 
this part or any order, rule or regulation under this 
part; 
‘‘(5) the enterprise has failed to submit a hous-
ing plan that complies with section 1336(c) within 
the applicable period; or 
‘‘(6) the enterprise has failed to comply with a 
housing plan under section 1336(c).’’; 
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158 
(2) in subsection (b)(2), by striking ‘‘requiring 
the enterprise to’’ and all that follows through the end 
of the paragraph and inserting the following: ‘‘requir-
ing the enterprise to— 
‘‘(A) comply with the goal or goals; 
‘‘(B) submit a report under section 1314; 
‘‘(C) comply with any provision this part 
or any order, rule or regulation under such part; 
‘‘(D) submit a housing plan in compliance 
with section 1336(c); 
‘‘(E) comply with a housing plan submitted 
under section 1336(c); or 
‘‘(F) provide the information required 
under subsection (m) or (n) of section 309 of the 
Federal National Mortgage Association Charter 
Act or subsection (e) or (f) of section 307 of the 
Federal Home Loan Mortgage Corporation Act, 
as applicable.’’; 
(3) in subsection (c), by inserting ‘‘date of the’’ 
before ‘‘service of the order’’; and 
(4) by striking subsection (d). 
(b) AUTHORITY OF DIRECTOR TO ENFORCE NOTICES 
AND ORDERS.—Section 1344 of the Housing and Commu-
nity Development Act of 1992 (12 U.S.C. 4584) is amended 
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159 
by striking subsection (a) and inserting the following new 
subsection: 
‘‘(a) ENFORCEMENT.—The Director may, in the dis-
cretion of the Director, apply to the United States District 
Court for the District of Columbia, or the United States 
district court within the jurisdiction of which the head-
quarters of the enterprise is located, for the enforcement of 
any effective and outstanding notice or order issued under 
section 1341 or 1345, or request that the Attorney General 
of the United States bring such an action. Such court shall 
have jurisdiction and power to order and require compli-
ance with such notice or order.’’. 
(c) CIVIL MONEY PENALTIES.—Section 1345 of the 
Housing and Community Development Act of 1992 (12 
U.S.C. 4585) is amended— 
(1) by striking subsections (a) and (b) and in-
serting the following new subsections: 
‘‘(a) AUTHORITY.—The Director may impose a civil 
money penalty, in accordance with the provisions of this 
section, on any enterprise that has failed to— 
‘‘(1) meet any housing goal established under 
subpart B, following a written notice and determina-
tion of such failure in accordance with section 
1336(b); 
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160 
‘‘(2) submit a report under section 1314, fol-
lowing a notice of such failure, an opportunity for 
comment by the enterprise, and a final determination 
by the Director; 
‘‘(3) submit the information required under sub-
section (m) or (n) of section 309 of the Federal Na-
tional Mortgage Association Charter Act, or sub-
section (e) or (f) of section 307 of the Federal Home 
Loan Mortgage Corporation Act; 
‘‘(4) comply with any provision of this part or 
any order, rule or regulation under this part; 
‘‘(5) submit a housing plan pursuant to section 
1336(c) within the required period; or 
‘‘(6) comply with a housing plan for the enter-
prise under section 1336(c). 
‘‘(b) AMOUNT OF PENALTY.—The amount of the pen-
alty, as determined by the Director, may not exceed— 
‘‘(1) for any failure described in paragraph (1), 
(5), or (6) of subsection (a), $50,000 for each day that 
the failure occurs; and 
‘‘(2) for any failure described in paragraph (2), 
(3), or (4) of subsection (a), $20,000 for each day that 
the failure occurs.’’; 
(2) in subsection (c)— 
(A) in paragraph (1)— 
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161 
(i) in subparagraph (A), by inserting 
‘‘and’’ after the semicolon at the end; 
(ii) in subparagraph (B), by striking 
‘‘; and’’ and inserting a period; and 
(iii) by striking subparagraph (C); 
and 
(B) in paragraph (2), by inserting after the 
period at the end the following: ‘‘In determining 
the penalty under subsection (a)(1), the Director 
shall give consideration to the length of time the 
enterprise should reasonably take to achieve the 
goal.’’; 
(3) in the first sentence of subsection (d)— 
(A) by striking ‘‘request the Attorney Gen-
eral of the United States to’’ and inserting ‘‘, in 
the discretion of the Director,’’; and 
(B) by inserting ‘‘, or request that the At-
torney General of the United States bring such 
an action’’ before the period at the end; 
(4) by striking subsection (f); and 
(5) by redesignating subsection (g) as subsection 
(f). 
(d) ENFORCEMENT OF SUBPOENAS.—Section 1348(c) 
of the Housing and Community Development Act of 1992 
(12 U.S.C. 4588(c)) is amended— 
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162 
(1) by striking ‘‘request the Attorney General of 
the United States to’’ and inserting ‘‘, in the discre-
tion of the Director,’’; and 
(2) by inserting ‘‘or request that the Attorney 
General of the United States bring such an action,’’ 
after ‘‘District of Columbia,’’ 
(e) CONFORMING AMENDMENT.—The heading for sub-
part C of part 2 of subtitle A of title XIII of the Housing 
and Community Development Act of 1992 is amended to 
read as follows: 
‘‘Subpart C—Enforcement’’. 
SEC. 142. CONFORMING AMENDMENTS. 
Part 2 of subtitle A of title XIII of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4541 et 
seq.) is amended— 
(1) by striking ‘‘Secretary’’ each place such term 
appears in such part and inserting ‘‘Director’’; 
(2) in the section heading for section 1323 (12 
U.S.C. 4543), by inserting ‘‘OF ENTERPRISES’’ be-
fore the period at the end; 
(3) by striking section 1327 (12 U.S.C. 4547); 
(4) by striking section 1328 (12 U.S.C. 4548); 
(5) by redesignating section 1329 (as amended 
by section 135) as section 1327; 
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163 
(6) in sections 1345(c)(1)(A), 1346(a), and 
1346(b) (12 U.S.C. 4585(c)(1)(A), 4586(a), and 
4586(b)), by striking ‘‘Secretary’s’’ each place such 
term appears and inserting ‘‘Director’s’’; and 
(7) by striking section 1349 (12 U.S.C. 4589). 
Subtitle C—Prompt Corrective 
Action 
SEC. 151. CAPITAL CLASSIFICATIONS. 
(a) IN GENERAL.—Section 1364 of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4614) is 
amended— 
(1) in the heading for subsection (a), by striking 
‘‘IN GENERAL’’ and inserting ‘‘ENTERPRISES’’. 
(2) in subsection (c)— 
(A) by striking ‘‘subsection (b)’’ and insert-
ing ‘‘subsection (c)’’; 
(B) by striking ‘‘enterprises’’ and inserting 
‘‘regulated entities’’; and 
(C) by striking the last sentence; 
(3) by redesignating subsections (c) (as so 
amended by paragraph (2) of this subsection) and (d) 
as subsections (d) and (f), respectively; 
(4) by striking subsection (b) and inserting the 
following new subsections: 
‘‘(b) FEDERAL HOME LOAN BANKS.— 
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164 
‘‘(1) ESTABLISHMENT AND CRITERIA.—For pur-
poses of this subtitle, the Director shall, by regula-
tion— 
‘‘(A) establish the capital classifications 
specified under paragraph (2) for the Federal 
home loan banks; 
‘‘(B) establish criteria for each such capital 
classification based on the amount and types of 
capital held by a bank and the risk-based, min-
imum, and critical capital levels for the banks 
and taking due consideration of the capital clas-
sifications 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; and 
‘‘(C) shall classify the Federal home loan 
banks according to such capital classifications. 
‘‘(2) CLASSIFICATIONS.—The capital classifica-
tions specified under this paragraph are— 
‘‘(A) adequately capitalized; 
‘‘(B) undercapitalized; 
‘‘(C) significantly undercapitalized; and 
‘‘(D) critically undercapitalized. 
‘‘(c) DISCRETIONARY CLASSIFICATION.— 
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165 
‘‘(1) GROUNDS
FOR
RECLASSIFICATION.—The 
Director may reclassify a regulated entity under 
paragraph (2) if— 
‘‘(A) at any time, the Director determines 
in writing that the regulated entity is engaging 
in conduct that could result in a rapid depletion 
of core or total capital or, in the case of an en-
terprise, that the value of the property subject to 
mortgages held or securitized by the enterprise 
has decreased significantly; 
‘‘(B) after notice and an opportunity for 
hearing, the Director determines that the regu-
lated entity is in an unsafe or unsound condi-
tion; or 
‘‘(C) pursuant to section 1371(b), the Direc-
tor deems the regulated entity to be engaging in 
an unsafe or unsound practice. 
‘‘(2) RECLASSIFICATION.—In addition to any 
other action authorized under this title, including the 
reclassification of a regulated entity for any reason 
not specified in this subsection, if the Director takes 
any action described in paragraph (1) the Director 
may classify a regulated entity— 
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166 
‘‘(A) as undercapitalized, if the regulated 
entity is otherwise classified as adequately cap-
italized; 
‘‘(B) as significantly undercapitalized, if 
the regulated entity is otherwise classified as 
undercapitalized; and 
‘‘(C) as critically undercapitalized, if the 
regulated entity is otherwise classified as signifi-
cantly undercapitalized.’’; and 
(5) by inserting after subsection (d) (as so redes-
ignated by paragraph (3) of this subsection), the fol-
lowing new subsection: 
‘‘(e) RESTRICTION ON CAPITAL DISTRIBUTIONS.— 
‘‘(1) IN
GENERAL.—A regulated entity shall 
make no capital distribution if, after making the dis-
tribution, the regulated entity would be undercapital-
ized. 
‘‘(2) EXCEPTION.—Notwithstanding paragraph 
(1), the Director may permit a regulated entity, to 
the extent appropriate or applicable, to repurchase, 
redeem, retire, or otherwise acquire shares or owner-
ship interests if the repurchase, redemption, retire-
ment, or other acquisition— 
‘‘(A) is made in connection with the 
issuance of additional shares or obligations of the 
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167 
regulated entity in at least an equivalent 
amount; and 
‘‘(B) will reduce the financial obligations of 
the regulated entity or otherwise improve the fi-
nancial condition of the entity.’’. 
(b) REGULATIONS.—Not later than the expiration of 
the 180-day period beginning on the effective date under 
section 185, the Director of the Federal Housing Finance 
Agency shall issue regulations to carry out section 1364(b) 
of the Housing and Community Development Act of 1992 
(as added by paragraph (4) of this subsection), relating to 
capital classifications for the Federal home loan banks. 
SEC. 152. SUPERVISORY ACTIONS APPLICABLE TO UNDER-
CAPITALIZED REGULATED ENTITIES. 
Section 1365 of the Housing and Community Develop-
ment Act of 1992 (12 U.S.C. 4615) is amended— 
(1) in the section heading, by striking ‘‘ENTER-
PRISES’’ and inserting ‘‘REGULATED ENTITIES’’; 
(2) in subsection (a)— 
(A) by redesignating paragraphs (1) and 
(2) as paragraphs (2) and (3), respectively; 
(B) by inserting before paragraph (2), as so 
redesignated by subparagraph (A) of this para-
graph, the following paragraph: 
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168 
‘‘(1) REQUIRED
MONITORING.—The Director 
shall— 
‘‘(A) closely monitor the condition of any 
regulated entity that is classified as under-
capitalized; 
‘‘(B) closely monitor compliance with the 
capital restoration plan, restrictions, and re-
quirements imposed under this section; and 
‘‘(C) periodically review the plan, restric-
tions, and requirements applicable to the under-
capitalized regulated entity to determine whether 
the plan, restrictions, and requirements are 
achieving the purpose of this section.’’; and 
(C) by inserting at the end the following 
new paragraphs: 
‘‘(4) RESTRICTION OF ASSET GROWTH.—A regu-
lated entity that is classified as undercapitalized shall 
not permit its average total assets (as such term is de-
fined in section 1316(b) during any calendar quarter 
to exceed its average total assets during the preceding 
calendar quarter unless— 
‘‘(A) the Director has accepted the capital 
restoration plan of the regulated entity; 
‘‘(B) any increase in total assets is con-
sistent with the plan; and 
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169 
‘‘(C) the ratio of total capital to assets for 
the regulated entity increases during the cal-
endar quarter at a rate sufficient to enable the 
entity to become adequately capitalized within a 
reasonable time. 
‘‘(5) PRIOR
APPROVAL
OF
ACQUISITIONS, NEW 
PRODUCTS, AND NEW ACTIVITIES.—A regulated entity 
that is classified as undercapitalized shall not, di-
rectly or indirectly, acquire any interest in any enti-
ty or initially offer any new product (as such term 
is defined in section 1321(f)) or engage in any new 
activity, service, undertaking, or offering unless— 
‘‘(A) the Director has accepted the capital 
restoration plan of the regulated entity, the enti-
ty is implementing the plan, and the Director 
determines that the proposed action is consistent 
with and will further the achievement of the 
plan; or 
‘‘(B) the Director determines that the pro-
posed action will further the purpose of this sec-
tion.’’; 
(3) in the subsection heading for subsection (b), 
by striking ‘‘FROM UNDERCAPITALIZED TO SIGNIFI-
CANTLY UNDERCAPITALIZED’’; and 
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170 
(4) by striking subsection (c) and inserting the 
following new subsection: 
‘‘(c) OTHER DISCRETIONARY SAFEGUARDS.—The Di-
rector may take, with respect to a regulated entity that is 
classified as undercapitalized, any of the actions authorized 
to be taken under section 1366 with respect to a regulated 
entity that is classified as significantly undercapitalized, 
if the Director determines that such actions are necessary 
to carry out the purpose of this subtitle.’’. 
SEC. 153. SUPERVISORY ACTIONS APPLICABLE TO SIGNIFI-
CANTLY UNDERCAPITALIZED REGULATED EN-
TITIES. 
Section 1366 of the Housing and Community Develop-
ment Act of 1992 (12 U.S.C. 4616) is amended— 
(1) in the section heading, by striking ‘‘ENTER-
PRISES’’ and inserting ‘‘REGULATED ENTITIES’’; 
(2) in subsection (a)(2)(A), by striking ‘‘enter-
prise’’ the last place such term appears; 
(3) in subsection (b)— 
(A) in the subsection heading, by striking 
‘‘DISCRETIONARY SUPERVISORY ACTIONS’’ and 
inserting ‘‘SPECIFIC ACTIONS’’. 
(B) in the matter preceding paragraph (1), 
by striking ‘‘may, at any time, take any’’ and 
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171 
inserting ‘‘shall carry out this section by taking, 
at any time, one or more’’; 
(C) by redesignating paragraphs (5) and 
(6) as paragraphs (6) and (7), respectively; 
(D) by inserting after paragraph (4) the fol-
lowing new paragraph: 
‘‘(5) IMPROVEMENT OF MANAGEMENT.—Take one 
or more of the following actions: 
‘‘(A) NEW ELECTION OF BOARD.—Order a 
new election for the board of directors of the reg-
ulated entity. 
‘‘(B) DISMISSAL OF DIRECTORS OR EXECU-
TIVE OFFICERS.—Require the regulated entity to 
dismiss from office any director or executive offi-
cer who had held office for more than 180 days 
immediately before the entity became under-
capitalized. Dismissal under this subparagraph 
shall not be construed to be a removal pursuant 
to the Director’s enforcement powers provided in 
section 1377. 
‘‘(C) EMPLOY QUALIFIED EXECUTIVE OFFI-
CERS.—Require the regulated entity to employ 
qualified executive officers (who, if the Director 
so specifies, shall be subject to approval by the 
Director).’’; and 
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172 
(E) by inserting at the end the following 
new paragraph: 
‘‘(8) OTHER ACTION.—Require the regulated en-
tity to take any other action that the Director deter-
mines will better carry out the purpose of this section 
than any of the actions specified in this paragraph.’’; 
(4) by redesignating subsection (c) as subsection 
(d); and 
(5) by inserting after subsection (b) the following 
new subsection: 
‘‘(c) RESTRICTION ON COMPENSATION OF EXECUTIVE 
OFFICERS.—A regulated entity that is classified as signifi-
cantly undercapitalized may not, without prior written ap-
proval by the Director— 
‘‘(1) pay any bonus to any executive officer; or 
‘‘(2) provide compensation to any executive offi-
cer at a rate exceeding that officer’s average rate of 
compensation (excluding bonuses, stock options, and 
profit sharing) during the 12 calendar months pre-
ceding the calendar month in which the regulated en-
tity became undercapitalized.’’. 
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173 
SEC. 154. AUTHORITY OVER CRITICALLY UNDERCAPITAL-
IZED REGULATED ENTITIES. 
(a) IN GENERAL.—Section 1367 of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4617) is 
amended to read as follows: 
‘‘SEC. 1367. AUTHORITY OVER CRITICALLY UNDERCAPITAL-
IZED REGULATED ENTITIES. 
‘‘(a) APPOINTMENT OF AGENCY AS CONSERVATOR OR 
RECEIVER.— 
‘‘(1) IN GENERAL.—Notwithstanding any other 
provision of Federal or State law, if any of the 
grounds under paragraph (3) exist, at the discretion 
of the Director, the Director may establish a con-
servatorship or receivership, as appropriate, for the 
purpose of reorganizing, rehabilitating, or winding 
up the affairs of a regulated entity. 
‘‘(2) APPOINTMENT.—In any conservatorship or 
receivership established under this section, the Direc-
tor shall appoint the Agency as conservator or re-
ceiver. 
‘‘(3) GROUNDS FOR APPOINTMENT.—The grounds 
for appointing a conservator or receiver for a regu-
lated entity are as follows: 
‘‘(A) ASSETS
INSUFFICIENT
FOR
OBLIGA-
TIONS.—The assets of the regulated entity are 
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174 
less than the obligations of the regulated entity 
to its creditors and others. 
‘‘(B) SUBSTANTIAL DISSIPATION.—Substan-
tial dissipation of assets or earnings due to— 
‘‘(i) any violation of any provision of 
Federal or State law; or 
‘‘(ii) any unsafe or unsound practice. 
‘‘(C) UNSAFE OR UNSOUND CONDITION.—An 
unsafe or unsound condition to transact busi-
ness. 
‘‘(D) 
CEASE-AND-DESIST
ORDERS.—Any 
willful violation of a cease-and-desist order that 
has become final. 
‘‘(E) CONCEALMENT.—Any concealment of 
the books, papers, records, or assets of the regu-
lated entity, or any refusal to submit the books, 
papers, records, or affairs of the regulated entity, 
for inspection to any examiner or to any lawful 
agent of the Director. 
‘‘(F) INABILITY TO MEET OBLIGATIONS.— 
The regulated entity is likely to be unable to pay 
its obligations or meet the demands of its credi-
tors in the normal course of business. 
‘‘(G) LOSSES.—The regulated entity has in-
curred or is likely to incur losses that will de-
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175 
plete all or substantially all of its capital, and 
there is no reasonable prospect for the regulated 
entity to become adequately capitalized (as de-
fined in section 1364(a)(1)). 
‘‘(H) VIOLATIONS OF LAW.—Any violation 
of any law or regulation, or any unsafe or un-
sound practice or condition that is likely to— 
‘‘(i) cause insolvency or substantial 
dissipation of assets or earnings; or 
‘‘(ii) weaken the condition of the regu-
lated entity. 
‘‘(I) CONSENT.—The regulated entity, by 
resolution of its board of directors or its share-
holders or members, consents to the appointment. 
‘‘(J) 
UNDERCAPITALIZATION.—The 
regu-
lated entity is undercapitalized or significantly 
undercapitalized 
(as 
defined 
in 
section 
1364(a)(3) or in regulations issued pursuant to 
section 1364(b), as applicable), and— 
‘‘(i) has no reasonable prospect of be-
coming adequately capitalized; 
‘‘(ii) fails to become adequately cap-
italized, as required by— 
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176 
‘‘(I) section 1365(a)(1) with re-
spect to an undercapitalized regulated 
entity; or 
‘‘(II) section 1366(a)(1) with re-
spect to a significantly undercapital-
ized regulated entity; 
‘‘(iii) fails to submit a capital restora-
tion plan acceptable to the Agency within 
the time prescribed under section 1369C; or 
‘‘(iv) materially fails to implement a 
capital restoration plan submitted and ac-
cepted under section 1369C. 
‘‘(K) CRITICAL
UNDERCAPITALIZATION.— 
The regulated entity is critically undercapital-
ized, as defined in section 1364(a)(4) or in regu-
lations issued pursuant to section 1364(b), as 
applicable. 
‘‘(L) MONEY
LAUNDERING.—The Attorney 
General notifies the Director in writing that the 
regulated entity has been found guilty of a 
criminal offense under section 1956 or 1957 of 
title 18, United States Code, or section 5322 or 
5324 of title 31, United States Code. 
‘‘(4) MANDATORY RECEIVERSHIP.— 
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177 
‘‘(A) IN GENERAL.—The Director shall ap-
point the Agency as receiver for a regulated enti-
ty if the Director determines, in writing, that— 
‘‘(i) the assets of the regulated entity 
are, and during the preceding 30 calendar 
days have been, less than the obligations of 
the regulated entity to its creditors and oth-
ers; or 
‘‘(ii) the regulated entity is not, and 
during the preceding 30 calendar days has 
not been, generally paying the debts of the 
regulated entity (other than debts that are 
the subject of a bona fide dispute) as such 
debts become due. 
‘‘(B) PERIODIC DETERMINATION REQUIRED 
FOR
CRITICALLY
UNDER
CAPITALIZED
REGU-
LATED ENTITY.—If a regulated entity is criti-
cally undercapitalized, the Director shall make a 
determination, in writing, as to whether the reg-
ulated entity meets the criteria specified in 
clause (i) or (ii) of subparagraph (A)— 
‘‘(i) not later than 30 calendar days 
after the regulated entity initially becomes 
critically undercapitalized; and 
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178 
‘‘(ii) at least once during each suc-
ceeding 30-calendar day period. 
‘‘(C) DETERMINATION
NOT
REQUIRED
IF 
RECEIVERSHIP
ALREADY
IN
PLACE.—Subpara-
graph (B) shall not apply with respect to a regu-
lated entity in any period during which the 
Agency serves as receiver for the regulated entity. 
‘‘(D) RECEIVERSHIP
TERMINATES
CON-
SERVATORSHIP.—The appointment under this 
section of the Agency as receiver of a regulated 
entity shall immediately terminate any con-
servatorship established under this title for the 
regulated entity. 
‘‘(5) JUDICIAL REVIEW.— 
‘‘(A) IN GENERAL.—If the Agency is ap-
pointed conservator or receiver under this sec-
tion, the regulated entity may, within 30 days of 
such appointment, bring an action in the United 
States District Court for the judicial district in 
which the principal place of business of such reg-
ulated entity is located, or in the United States 
District Court for the District of Columbia, for 
an order requiring the Agency to remove itself as 
conservator or receiver. 
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179 
‘‘(B) REVIEW.—Upon the filing of an ac-
tion under subparagraph (A), the court shall, 
upon the merits, dismiss such action or direct 
the Agency to remove itself as such conservator 
or receiver. 
‘‘(6) DIRECTORS NOT LIABLE FOR ACQUIESCING 
IN APPOINTMENT OF CONSERVATOR OR RECEIVER.— 
The members of the board of directors of a regulated 
entity shall not be liable to the shareholders or credi-
tors of the regulated entity for acquiescing in or con-
senting in good faith to the appointment of the Agen-
cy as conservator or receiver for that regulated entity. 
‘‘(7) AGENCY NOT SUBJECT TO ANY OTHER FED-
ERAL AGENCY.—When acting as conservator or re-
ceiver, the Agency shall not be subject to the direction 
or supervision of any other agency of the United 
States or any State in the exercise of the rights, pow-
ers, and privileges of the Agency. 
‘‘(b) POWERS AND DUTIES OF THE AGENCY AS CON-
SERVATOR OR RECEIVER.— 
‘‘(1) RULEMAKING
AUTHORITY
OF
THE
AGEN-
CY.—The Agency may prescribe such regulations as 
the Agency determines to be appropriate regarding 
the conduct of conservatorships or receiverships. 
‘‘(2) GENERAL POWERS.— 
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180 
‘‘(A) SUCCESSOR TO REGULATED ENTITY.— 
The Agency shall, as conservator or receiver, and 
by operation of law, immediately succeed to— 
‘‘(i) all rights, titles, powers, and 
privileges of the regulated entity, and of 
any stockholder, officer, or director of such 
regulated entity with respect to the regu-
lated entity and the assets of the regulated 
entity; and 
‘‘(ii) title to the books, records, and as-
sets of any other legal custodian of such reg-
ulated entity. 
‘‘(B) OPERATE THE REGULATED ENTITY.— 
The Agency may, as conservator or receiver— 
‘‘(i) take over the assets of and operate 
the regulated entity with all the powers of 
the shareholders, the directors, and the offi-
cers of the regulated entity and conduct all 
business of the regulated entity; 
‘‘(ii) collect all obligations and money 
due the regulated entity; 
‘‘(iii) perform all functions of the regu-
lated entity in the name of the regulated en-
tity which are consistent with the appoint-
ment as conservator or receiver; and 
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181 
‘‘(iv) preserve and conserve the assets 
and property of such regulated entity. 
‘‘(C) FUNCTIONS OF OFFICERS, DIRECTORS, 
AND
SHAREHOLDERS
OF
A
REGULATED
ENTI-
TY.—The Agency may, by regulation or order, 
provide for the exercise of any function by any 
stockholder, director, or officer of any regulated 
entity for which the Agency has been named con-
servator or receiver. 
‘‘(D) 
POWERS
AS
CONSERVATOR.—The 
Agency may, as conservator, take such action as 
may be— 
‘‘(i) necessary to put the regulated en-
tity in a sound and solvent condition; and 
‘‘(ii) appropriate to carry on the busi-
ness of the regulated entity and preserve 
and conserve the assets and property of the 
regulated entity, including, if two or more 
Federal home loan banks have been placed 
in 
conservatorship 
contemporaneously, 
merging two or more such banks into a sin-
gle Federal home loan bank. 
‘‘(E) ADDITIONAL POWERS AS RECEIVER.— 
The Agency may, as receiver, place the regulated 
entity in liquidation and proceed to realize upon 
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182 
the assets of the regulated entity, having due re-
gard to the conditions of the housing finance 
market. 
‘‘(F) ORGANIZATION
OF
NEW
REGULATED 
ENTITIES.—The Agency may, as receiver, orga-
nize a successor regulated entity that will oper-
ate pursuant to subsection (i). 
‘‘(G) TRANSFER
OF
ASSETS
AND
LIABIL-
ITIES.—The Agency may, as conservator or re-
ceiver, transfer any asset or liability of the regu-
lated entity in default without any approval, as-
signment, or consent with respect to such trans-
fer. Any Federal home loan bank may, with the 
approval of the Agency, acquire the assets of any 
Bank in conservatorship or receivership, and as-
sume the liabilities of such Bank. 
‘‘(H) PAYMENT OF VALID OBLIGATIONS.— 
The Agency, as conservator or receiver, shall, to 
the extent of proceeds realized from the perform-
ance of contracts or sale of the assets of a regu-
lated entity, pay all valid obligations of the reg-
ulated entity in accordance with the prescrip-
tions and limitations of this section. 
‘‘(I) SUBPOENA AUTHORITY.— 
‘‘(i) IN GENERAL.— 
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183 
‘‘(I) IN
GENERAL.—The Agency 
may, as conservator or receiver, and 
for purposes of carrying out any 
power, authority, or duty with respect 
to a regulated entity (including deter-
mining any claim against the regu-
lated entity and determining and real-
izing upon any asset of any person in 
the course of collecting money due the 
regulated entity), exercise any power 
established under section 1348. 
‘‘(II) APPLICABILITY
OF
LAW.— 
The provisions of section 1348 shall 
apply with respect to the exercise of 
any power exercised under this sub-
paragraph in the same manner as such 
provisions apply under that section. 
‘‘(ii) AUTHORITY
OF
DIRECTOR.—A 
subpoena or subpoena duces tecum may be 
issued under clause (i) only by, or with the 
written approval of, the Director, or the des-
ignee of the Director. 
‘‘(iii) RULE OF CONSTRUCTION.—This 
subsection shall not be construed to limit 
any rights that the Agency, in any capac-
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184 
ity, might otherwise have under section 
1317 or 1379D. 
‘‘(J) CONTRACTING
FOR
SERVICES.—The 
Agency may, as conservator or receiver, provide 
by contract for the carrying out of any of its 
functions, activities, actions, or duties as conser-
vator or receiver. 
‘‘(K) INCIDENTAL
POWERS.—The Agency 
may, as conservator or receiver— 
‘‘(i) exercise all powers and authorities 
specifically granted to conservators or re-
ceivers, respectively, under this section, and 
such incidental powers as shall be necessary 
to carry out such powers; and 
‘‘(ii) take any action authorized by 
this section, which the Agency determines is 
in the best interests of the regulated entity 
or the Agency. 
‘‘(3) AUTHORITY OF RECEIVER TO DETERMINE 
CLAIMS.— 
‘‘(A) IN GENERAL.—The Agency may, as re-
ceiver, determine claims in accordance with the 
requirements of this subsection and any regula-
tions prescribed under paragraph (4). 
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185 
‘‘(B) NOTICE
REQUIREMENTS.—The re-
ceiver, in any case involving the liquidation or 
winding up of the affairs of a closed regulated 
entity, shall— 
‘‘(i) promptly publish a notice to the 
creditors of the regulated entity to present 
their claims, together with proof, to the re-
ceiver by a date specified in the notice 
which shall be not less than 90 days after 
the publication of such notice; and 
‘‘(ii) republish such notice approxi-
mately 1 month and 2 months, respectively, 
after the publication under clause (i). 
‘‘(C) MAILING
REQUIRED.—The receiver 
shall mail a notice similar to the notice pub-
lished under subparagraph (B)(i) at the time of 
such publication to any creditor shown on the 
books of the regulated entity— 
‘‘(i) at the last address of the creditor 
appearing in such books; or 
‘‘(ii) upon discovery of the name and 
address of a claimant not appearing on the 
books of the regulated entity within 30 days 
after the discovery of such name and ad-
dress. 
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186 
‘‘(4) RULEMAKING AUTHORITY RELATING TO DE-
TERMINATION OF CLAIMS.—Subject to subsection (c), 
the Director may prescribe regulations regarding the 
allowance or disallowance of claims by the receiver 
and providing for administrative determination of 
claims and review of such determination. 
‘‘(5) PROCEDURES
FOR
DETERMINATION
OF 
CLAIMS.— 
‘‘(A) DETERMINATION PERIOD.— 
‘‘(i) IN GENERAL.—Before the end of 
the 180-day period beginning on the date on 
which any claim against a regulated entity 
is filed with the Agency as receiver, the 
Agency shall determine whether to allow or 
disallow the claim and shall notify the 
claimant of any determination with respect 
to such claim. 
‘‘(ii) EXTENSION
OF
TIME.—The pe-
riod described in clause (i) may be extended 
by a written agreement between the claim-
ant and the Agency. 
‘‘(iii) MAILING
OF
NOTICE
SUFFI-
CIENT.—The notification requirements of 
clause (i) shall be deemed to be satisfied if 
the notice of any determination with respect 
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187 
to any claim is mailed to the last address 
of the claimant which appears— 
‘‘(I) on the books of the regulated 
entity; 
‘‘(II) in the claim filed by the 
claimant; or 
‘‘(III) in documents submitted in 
proof of the claim. 
‘‘(iv) CONTENTS
OF
NOTICE
OF
DIS-
ALLOWANCE.—If any claim filed under 
clause (i) is disallowed, the notice to the 
claimant shall contain— 
‘‘(I) a statement of each reason for 
the disallowance; and 
‘‘(II) the procedures available for 
obtaining agency review of the deter-
mination to disallow the claim or judi-
cial determination of the claim. 
‘‘(B) ALLOWANCE OF PROVEN CLAIM.—The 
receiver shall allow any claim received on or be-
fore the date specified in the notice published 
under paragraph (3)(B)(i), or the date specified 
in the notice required under paragraph (3)(C), 
which is proved to the satisfaction of the receiver. 
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