281 
subparagraph is finally disposed of or until 
terminated by the Director. 
‘‘(2) REMOVAL OR PROHIBITION.— 
‘‘(A) IN GENERAL.—If a judgment of con-
viction or an agreement to enter a pretrial diver-
sion or other similar program is entered against 
a regulated entity-affiliated party in connection 
with a crime described in paragraph (1)(A), at 
such time as such judgment is not subject to fur-
ther appellate review, the Director may, if con-
tinued service or participation by such party 
may pose a threat to the regulated entity or im-
pair public confidence in the regulated entity, 
issue and serve upon such party an order that— 
‘‘(i) removes such party from office or 
prohibits such party from further participa-
tion in any manner in the conduct of the 
affairs of the regulated entity without the 
prior written consent of the Director; and 
‘‘(ii) prohibits the regulated entity 
from releasing to or on behalf of the regu-
lated entity-affiliated party any compensa-
tion or other payment of money or other 
thing of current or potential value in con-
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282 
nection with the termination of employment 
or office of the party. 
‘‘(B) PROVISIONS APPLICABLE TO ORDER.— 
‘‘(i) COPY.—A copy of any order under 
paragraph (2)(A) shall also be served upon 
the regulated entity, whereupon the regu-
lated entity-affiliated party who is subject 
to the order (if a director or an officer) 
shall cease to be a director or officer of such 
regulated entity. 
‘‘(ii) EFFECT OF ACQUITTAL.—A find-
ing of not guilty or other disposition of the 
charge shall not preclude the Director from 
instituting proceedings after such finding or 
disposition to remove such party from office 
or to prohibit further participation in regu-
lated entity affairs, and to prohibit com-
pensation or other payment of money or 
other thing of current or potential value in 
connection with any resignation, removal, 
retirement, or other termination of employ-
ment or office of the party, pursuant to sub-
sections (a), (d), or (e) of this section. 
‘‘(iii) EFFECTIVE PERIOD.—Any notice 
of suspension or order of removal issued 
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under this subsection shall remain effective 
and outstanding until the completion of any 
hearing or appeal authorized under para-
graph (4) unless terminated by the Director. 
‘‘(3) AUTHORITY
OF
REMAINING
BOARD
MEM-
BERS.—If at any time, because of the suspension of 
one or more directors pursuant to this section, there 
shall be on the board of directors of a regulated entity 
less than a quorum of directors not so suspended, all 
powers and functions vested in or exercisable by such 
board shall vest in and be exercisable by the director 
or directors on the board not so suspended, until such 
time as there shall be a quorum of the board of direc-
tors. In the event all of the directors of a regulated 
entity are suspended pursuant to this section, the Di-
rector shall appoint persons to serve temporarily as 
directors in their place and stead pending the termi-
nation of such suspensions, or until such time as 
those who have been suspended cease to be directors of 
the regulated entity and their respective successors 
take office. 
‘‘(4) HEARING REGARDING CONTINUED PARTICI-
PATION.—Within 30 days from service of any notice 
of suspension or order of removal issued pursuant to 
paragraph (1) or (2) of this subsection, the regulated 
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284 
entity-affiliated party concerned may request in writ-
ing an opportunity to appear before the Director to 
show that the continued service to or participation in 
the conduct of the affairs of the regulated entity by 
such party does not, or is not likely to, pose a threat 
to the interests of the regulated entity or threaten to 
impair public confidence in the regulated entity. 
Upon receipt of any such request, the Director shall 
fix a time (not more than 30 days after receipt of 
such request, unless extended at the request of such 
party) and place at which such party may appear, 
personally or through counsel, before one or more 
members of the Director or designated employees of 
the Director to submit written materials (or, at the 
discretion of the Director, oral testimony) and oral 
argument. Within 60 days of such hearing, the Direc-
tor shall notify such party whether the suspension or 
prohibition from participation in any manner in the 
conduct of the affairs of the regulated entity will be 
continued, terminated, or otherwise modified, or 
whether the order removing such party from office or 
prohibiting such party from further participation in 
any manner in the conduct of the affairs of the regu-
lated entity, and prohibiting compensation in connec-
tion with termination will be rescinded or otherwise 
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285 
modified. Such notification shall contain a statement 
of the basis for the Director’s decision, if adverse to 
such party. The Director is authorized to prescribe 
such rules as may be necessary to effectuate the pur-
poses of this subsection. 
‘‘(i) HEARINGS AND JUDICIAL REVIEW.— 
‘‘(1) VENUE
AND
PROCEDURE.—Any hearing 
provided for in this section shall be held in the Dis-
trict of Columbia or in the Federal judicial district 
in which the headquarters of the regulated entity is 
located, unless the party afforded the hearing consents 
to another place, and shall be conducted in accord-
ance with the provisions of chapter 5 of title 5, 
United States Code. After such hearing, and within 
90 days after the Director has notified the parties 
that the case has been submitted to it for final deci-
sion, it shall render its decision (which shall include 
findings of fact upon which its decision is predicated) 
and shall issue and serve upon each party to the pro-
ceeding an order or orders consistent with the provi-
sions of this section. Judicial review of any such 
order shall be exclusively as provided in this sub-
section. Unless a petition for review is timely filed in 
a court of appeals of the United States, as provided 
in paragraph (2), and thereafter until the record in 
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286 
the proceeding has been filed as so provided, the Di-
rector may at any time, upon such notice and in such 
manner as it shall deem proper, modify, terminate, or 
set aside any such order. Upon such filing of the 
record, the Director may modify, terminate, or set 
aside any such order with permission of the court. 
‘‘(2) REVIEW
OF
ORDER.—Any party to any 
proceeding under paragraph (1) may obtain a review 
of any order served pursuant to paragraph (1) (other 
than an order issued with the consent of the regulated 
entity or the regulated entity-affiliated party con-
cerned, or an order issued under subsection (h) of this 
section) by the filing in the United States Court of 
Appeals for the District of Columbia Circuit or court 
of appeals of the United States for the circuit in 
which the headquarters of the regulated entity is lo-
cated, within 30 days after the date of service of such 
order, a written petition praying that the order of the 
Director be modified, terminated, or set aside. A copy 
of such petition shall be forthwith transmitted by the 
clerk of the court to the Director, and thereupon the 
Director shall file in the court the record in the pro-
ceeding, as provided in section 2112 of title 28, 
United States Code. Upon the filing of such petition, 
such court shall have jurisdiction, which upon the fil-
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287 
ing of the record shall (except as provided in the last 
sentence of paragraph (1)) be exclusive, to affirm, 
modify, terminate, or set aside, in whole or in part, 
the order of the Director. Review of such proceedings 
shall be had as provided in chapter 7 of title 5, 
United States Code. The judgment and decree of the 
court shall be final, except that the same shall be sub-
ject to review by the Supreme Court upon certiorari, 
as provided in section 1254 of title 28, United States 
Code. 
‘‘(3) PROCEEDINGS NOT TREATED AS STAY.—The 
commencement of proceedings for judicial review 
under paragraph (2) shall not, unless specifically or-
dered by the court, operate as a stay of any order 
issued by the Director.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) 1992 ACT.—Section 1317(f) of the Housing 
and Community Development Act of 1992 (12 U.S.C. 
4517(f)) is amended by striking ‘‘section 1379B’’ and 
inserting ‘‘section 1379D’’. 
(2) FANNIE MAE CHARTER ACT.—The second sen-
tence of subsection (b) of section 308 of the Federal 
National Mortgage Association Charter Act (12 
U.S.C. 1723(b)) is amended by striking ‘‘The’’ and 
inserting ‘‘Except to the extent that action under sec-
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288 
tion 1377 of the Housing and Community Develop-
ment Act of 1992 temporarily results in a lesser num-
ber, the’’. 
(3) FREDDIE MAC ACT.—The second sentence of 
subparagraph (A) of section 303(a)(2) of the Federal 
Home Loan Mortgage Corporation Act (12 U.S.C. 
1452(a)(2)(A)) is amended by striking ‘‘The’’ and in-
serting ‘‘Except to the extent that action under section 
1377 of the Housing and Community Development 
Act of 1992 temporarily results in a lesser number, 
the’’. 
SEC. 167. CRIMINAL PENALTY. 
Subtitle C of title XIII of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4631 et seq.) is amend-
ed by inserting after section 1377 (as added by the pre-
ceding provisions of this Act) the following new section: 
‘‘SEC. 1378. CRIMINAL PENALTY. 
‘‘Whoever, being subject to an order in effect under sec-
tion 1377, without the prior written approval of the Direc-
tor, knowingly participates, directly or indirectly, in any 
manner (including by engaging in an activity specifically 
prohibited in such an order) in the conduct of the affairs 
of any regulated entity shall, notwithstanding section 3571 
of title 18, be fined not more than $1,000,000, imprisoned 
for not more than 5 years, or both.’’. 
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SEC. 168. SUBPOENA AUTHORITY. 
Section 1379D(c) of the Housing and Community De-
velopment Act of 1992 (12 U.S.C. 4641(c)), as so redesig-
nated by section 166(a)(1) of this Act, is further amended— 
(1) by striking ‘‘request the Attorney General of 
the United States to’’ and inserting ‘‘, in the discre-
tion of the Director,’’; 
(2) by inserting ‘‘or request that the Attorney 
General of the United States bring such an action,’’ 
after ‘‘District of Columbia,’’; and 
(3) by striking ‘‘or may, under the direction and 
control of the Attorney General, bring such an ac-
tion’’. 
SEC. 169. CONFORMING AMENDMENTS. 
Subtitle C of title XIII of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4631 et seq.), as 
amended by the preceding provisions of this Act, is amend-
ed— 
(1) in section 1372(c)(1) (12 U.S.C. 4632(c)), by 
striking ‘‘that enterprise’’ and inserting ‘‘that regu-
lated entity’’; 
(2) in section 1379 (12 U.S.C. 4637), as so redes-
ignated by section 166(a)(1) of this Act— 
(A) by inserting ‘‘, or of a regulated entity- 
affiliated party,’’ before ‘‘shall not affect’’; and 
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(B) by striking ‘‘such director or executive 
officer’’ each place such term appears and insert-
ing ‘‘such director, executive officer, or regulated 
entity-affiliated party’’; 
(3) in section 1379A (12 U.S.C. 4638), as so re-
designated by section 166(a)(1) of this Act, by insert-
ing ‘‘or against a regulated entity-affiliated party,’’ 
before ‘‘or impair’’; 
(4) by striking ‘‘An enterprise’’ each place such 
term appears in such subtitle and inserting ‘‘A regu-
lated entity’’; 
(5) by striking ‘‘an enterprise’’ each place such 
term appears in such subtitle and inserting ‘‘a regu-
lated entity’’; 
(6) by striking ‘‘the enterprise’’ each place such 
term appears in such subtitle and inserting ‘‘the regu-
lated entity’’; and 
(7) by striking ‘‘any enterprise’’ each place such 
term appears in such subtitle and inserting ‘‘any reg-
ulated entity’’. 
Subtitle E—General Provisions 
SEC. 181. BOARDS OF ENTERPRISES. 
(a) FANNIE MAE.— 
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