‘‘SEC. 1351. REPORTS REGARDING ENTERPRISE ISSUES
AND ACTIVITIES.
‘‘(a) INSURED DEPOSITORY INSTITUTION HOLDINGS
OF ENTERPRISE DEBT AND MORTGAGE-BACKED SECURI-
TIES.—Not later than 180 days after the date of the en-
actment of the Secondary Mortgage Market Enterprises
Regulatory Improvement Act, the Secretary of the Treas-
ury shall submit a report to the Congress regarding—
‘‘(1) the extent to which obligations issued or
guaranteed by the enterprises (including mortgage-
backed securities) are held by federally insured de-
pository institutions, including such extent by type
of institution and such extent relative to the institu-
tions’ capital;
‘‘(2) the extent to which the unlimited holdings
by federally insured depository institutions of the ob-
ligations of the enterprises could produce systemic
risk issues, particularly for the safety and soundness
of the banking system in the United States, in the
event of default or failure by an enterprise; and
‘‘(3) the effects on the enterprises, the banking
industry, and mortgage markets, if prudent limits on
the holdings of enterprise obligations were placed on
federally insured depository institutions.
‘‘(b) PORTFOLIO OPERATIONS, RISK MANAGEMENT,
AND MISSION.—Not later than one year after the date of
the enactment of the Secondary Mortgage Market Enter-
prises Regulatory Improvement Act, the Board shall sub-
mit a report to the Congress—
‘‘(1) describing the holdings of the enterprises
in retained mortgages and repurchased mortgage-
backed securities and the use of derivatives for hedg-
ing purposes;
‘‘(2) describing the extent of such holdings rel-
ative to other assets and the risk implications of
such holdings;
‘‘(3) containing an analysis of such holdings for
safety and soundness and/or mission compliance pur-
poses; and
‘‘(4) containing an assessment of whether such
holdings and other assets of the enterprises fulfill
the mission purposes of the enterprises under the
Federal National Mortgage Association Charter Act
and the Federal Home Loan Mortgage Corporation
Act.
The Board shall consult with the Comptroller General of
the United States in preparing the report under this sub-
section and in conducting any research, analyses, and as-
sessments for the report.
‘‘(c) DEBT ISSUANCES.—Not later than 270 days
after the date of the enactment of the Secondary Mortgage
Market Enterprises Regulatory Improvement Act, the Sec-
retary of the Treasury shall submit a report to the Con-
gress regarding—
‘‘(1) the extent of outstanding obligations of the
enterprises and the rate of growth of such obliga-
tions; and
‘‘(2) an analysis of whether debt issuances
should be limited or reduced if an enterprise is not
operating in a safe and sound manner and/or not
complying with its mission, or if an enterprise fails
to maintain a certain credit rating and/or debt rat-
ing.
‘‘(d) TREASURY LINE OF CREDIT.—Not later than
one year after the date of the enactment of the Secondary
Mortgage Market Enterprises Regulatory Improvement
Act, the Secretary of the Treasury shall submit a report
to the Congress regarding the purposes of the authority
of the Secretary of the Treasury to purchase the debt obli-
gations of the enterprises. The report shall assess the de-
sirability of limiting such authority in certain cir-
cumstances or eliminating such authority.
‘‘(e) VOLUNTARY AGREEMENT.—The Board shall
submit a report to the Congress annually, on fiscal year
basis, regarding the progress in implementing the commit-
ments announced by the enterprises on October 19, 2000,
regarding capitalization, disclosure, and market discipline,
namely—
‘‘(1) to issue subordinated debt;
‘‘(2) to obtain and disclose an annual credit
rating;
‘‘(3) to disclose interest rate risk;
‘‘(4) to disclose credit risk;
‘‘(5) to maintain greater liquidity; and
‘‘(6) to perform and disclose an interim risk-
based capital stress test.
The report shall determine whether the intended purposes
of this agreement, particularly to reduce systemic risk,
have been achieved, whether changes should be made to
the agreement, and whether any action should be taken
to ensure compliance with the agreement by the enter-
prises. Each report under this subsection for a fiscal year
shall be submitted not later than the December 31 first
occurring after the conclusion of such fiscal year.
‘‘(f) RECOMMENDATIONS.—Each report submitted
pursuant to this section shall include specific recommenda-
tions of appropriate policies, limitations, regulations, legis-
lation, or other actions to deal appropriately and effec-
tively with the issues addressed by such report.’’.
Subtitle E—General Provisions
SEC. 171. CONFORMING AND TECHNICAL AMENDMENTS.
(a) AMENDMENTS TO 1992 ACT.—Title XIII of the
Housing and Community Development Act of 1992 (12
U.S.C. 4501 et seq.), as amended by the preceding provi-
sions of this Act, is further amended—
(1) in section 1315 (12 U.S.C. 4515)—
(A) in subsection (a)—
(i) in the subsection heading, by strik-
ing ‘‘OFFICE PERSONNEL’’ and inserting
‘‘IN GENERAL’’;
(ii) by striking ‘‘The’’ and inserting
‘‘Subject to title II of the Secondary Mort-
gage Market Enterprises Regulatory Im-
provement Act, the’’; and
(iii) by striking ‘‘Director and the Of-
fice. Officers’’ and inserting ‘‘Board, with
respect to regulation and supervision of the
enterprises. Such officers’’;
(B) in subsection (b)—
(i) by striking ‘‘the Board of Gov-
ernors of the Federal Reserve System,’’
and
(ii) by inserting ‘‘, and with com-
pensation of other officers and employees
of the Board of Governors of the Federal
Reserve System’’ before the period at the
end;
(C) in subsection (c), by inserting ‘‘, with
respect to regulation and supervision of the en-
terprises’’ before the first comma;
(D) in subsection (d), by striking ‘‘Office’’
and inserting ‘‘Secretary pursuant to subpart B
of part 2 of this subtitle, subsections (m) and
(n) of section 309 of the Federal National
Mortgage Association Charter Act, and sub-
sections (e) and (f) of section 307 of the Fed-
eral Home Loan Mortgage Corporation Act;
(E) in subsection (e), by inserting ‘‘, with
respect to regulation and supervision of the en-
terprises’’ before the period at the end; and
(F) by striking subsection (f);
(2) in section 1317(c) (12 U.S.C. 4517(c)), by
striking ‘‘the Board of Governors of the Federal Re-
serve System,’’;
(3) in section 1319A (12 U.S.C. 4520)—
(A) by striking ‘‘(a) IN GENERAL.—’’; and
(B) by striking subsection (b);
(4) in section 1319C (12 U.S.C. 4522)—