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(A) by striking ‘‘(5)’’ and inserting ‘‘(9)’’; 
and 
(B) by striking ‘‘Office of Federal Housing 
Enterprise Oversight of the Department of Hous-
ing and Urban Development’’ and inserting 
‘‘Federal Housing Finance Agency’’; 
(8) by redesignating paragraph (6) as para-
graph (10); 
(9) by redesignating paragraphs (2) through (4) 
as paragraphs (5) through (7), respectively; 
(10) by inserting after paragraph (7), as redesig-
nated, the following: 
‘‘(8) DEFAULT; IN DANGER OF DEFAULT.— 
‘‘(A) DEFAULT.—The term ‘default’ means, 
with respect to a regulated entity, any adjudica-
tion or other official determination by any court 
of competent jurisdiction, or the Agency, pursu-
ant to which a conservator, receiver, limited-life 
regulated entity, or legal custodian is appointed 
for a regulated entity. 
‘‘(B) IN DANGER OF DEFAULT.—The term 
‘in danger of default’ means a regulated entity 
with respect to which, in the opinion of the 
Agency—
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‘‘(i) the regulated entity is not likely to 
be able to pay the obligations of the regu-
lated entity in the normal course of busi-
ness; or 
‘‘(ii) the regulated entity— 
‘‘(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.
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‘‘(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—
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‘‘(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
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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:
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‘‘(1) the safety and soundness of the regulated en-
tities; 
‘‘(2) any material deficiencies in the conduct of 
the operations of the regulated entities; 
‘‘(3) the overall operational status of the regu-
lated entities; 
‘‘(4) an evaluation of the performance of the reg-
ulated entities in carrying out their respective mis-
sions; 
‘‘(5) operations, resources, and performance of 
the Agency; and 
‘‘(6) such other matters relating to the Agency 
and its fulfillment of its mission, as the Board deter-
mines appropriate.’’. 
(b) ANNUAL REPORT
OF
THE DIRECTOR.—Section 
1319B(a) of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (12 U.S.C. 4521(a)) is 
amended— 
(1) by striking ‘‘enterprise’’ each place that term 
appears and inserting ‘‘regulated entity’’; 
(2) by striking ‘‘enterprises’’ each place that 
term appears and inserting ‘‘regulated entities’’; 
(3) in paragraph (3), by striking ‘‘; and’’ and 
inserting a semicolon;
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(4) in paragraph (4), by striking ‘‘1994.’’ and 
inserting ‘‘1994; and’’; and 
(5) by adding at the end the following: 
‘‘(5) the assessment of the Board or any of its 
members with respect to— 
‘‘(A) the safety and soundness of the regu-
lated entities; 
‘‘(B) any material deficiencies in the con-
duct of the operations of the regulated entities; 
‘‘(C) the overall operational status of the 
regulated entities; and 
‘‘(D) an evaluation of the performance of 
the regulated entities in carrying out their re-
spective missions; 
‘‘(6) operations, resources, and performance of 
the Agency; and 
‘‘(7) such other matters relating to the Agency 
and the fulfillment of its mission.’’. 
SEC. 1104. AUTHORITY TO REQUIRE REPORTS BY REGU-
LATED ENTITIES. 
(a) IN GENERAL.—Section 1314 of the Federal Hous-
ing Enterprises Financial Safety and Soundness Act of 
1992 (12 U.S.C. 4514) is amended— 
(1) in the section heading, by striking ‘‘ENTER-
PRISES’’ and inserting ‘‘REGULATED ENTITIES’’;
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(2) by striking ‘‘an enterprise’’ each place that 
term appears and inserting ‘‘a regulated entity’’; 
(3) by striking ‘‘the enterprise’’ and inserting 
‘‘the regulated entity’’; 
(4) in subsection (a)— 
(A) by striking the subsection heading and 
all that follows through ‘‘and operations’’ in 
paragraph (1) and inserting the following: 
‘‘(a) REGULAR AND SPECIAL REPORTS.— 
‘‘(1) REGULAR REPORTS.—The Director may re-
quire, by general or specific orders, a regulated entity 
to submit regular reports, including financial state-
ments determined on a fair value basis, on the condi-
tion (including financial condition), management, ac-
tivities, or operations of the regulated entity, as the 
Director considers appropriate’’; and 
(B) in paragraph (2)— 
(i) by inserting ‘‘, by general or spe-
cific orders,’’ after ‘‘may also require’’; and 
(ii) by striking ‘‘whenever’’ and insert-
ing ‘‘on any of the topics specified in para-
graph (1) or any other relevant topics, if’’; 
and 
(5) by adding at the end the following: 
‘‘(c) PENALTIES FOR FAILURE TO MAKE REPORTS.—
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‘‘(1) VIOLATIONS.—It shall be a violation of this 
section for any regulated entity— 
‘‘(A) to fail to make, transmit, or publish 
any report or obtain any information required 
by the Director under this section, section 309(k) 
of the Federal National Mortgage Association 
Charter Act, section 307(c) of the Federal Home 
Loan Mortgage Corporation Act, or section 20 of 
the Federal Home Loan Bank Act, within the pe-
riod of time specified in such provision of law or 
otherwise by the Director; or 
‘‘(B) to submit or publish any false or mis-
leading report or information under this section. 
‘‘(2) PENALTIES.— 
‘‘(A) FIRST TIER.— 
‘‘(i) IN
GENERAL.—A violation de-
scribed in paragraph (1) shall be subject to 
a penalty of not more than $2,000 for each 
day during which such violation continues, 
in any case in which— 
‘‘(I) the subject regulated entity 
maintains 
procedures 
reasonably 
adapted to avoid any inadvertent error 
and the violation was unintentional 
and a result of such an error; or
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‘‘(II) the violation was an inad-
vertent transmittal or publication of 
any report which was minimally late. 
‘‘(ii) BURDEN
OF
PROOF.—For pur-
poses of this subparagraph, the regulated 
entity shall have the burden of proving that 
the error was inadvertent or that a report 
was inadvertently transmitted or published 
late. 
‘‘(B) SECOND TIER.—A violation described 
in paragraph (1) shall be subject to a penalty of 
not more than $20,000 for each day during 
which such violation continues or such false or 
misleading information is not corrected, in any 
case that is not addressed in subparagraph (A) 
or (C). 
‘‘(C) THIRD TIER.—A violation described in 
paragraph (1) shall be subject to a penalty of not 
more than $1,000,000 per day for each day dur-
ing which such violation continues or such false 
or misleading information is not corrected, in 
any case in which the subject regulated entity 
committed such violation knowingly or with 
reckless disregard for the accuracy of any such 
information or report.