232 
percentage of the number of conventional, conforming, 
single-family, owner-occupied or rental, as applicable, pur-
chase money mortgages purchased by each enterprise in 
such year that serve such families, meets or exceeds the 
target for the year for such type of family that is estab-
lished under subsection (d). 
‘‘(d) ANNUAL TARGETS.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), for each of the types of families described 
in subsection (a), the target under this subsection 
for a year shall be the average percentage, for the 
three years that most recently precede such year and 
for which information under the Home Mortgage 
Disclosure Act of 1975 is publicly available, of the 
number of conventional, conforming, single-family, 
owner-occupied or rental, as applicable, purchase 
money mortgages originated in such year that serves 
such type of family, as determined by the Director 
using the information obtained and determined pur-
suant to paragraphs (3) and (4). 
‘‘(2) AUTHORITY TO INCREASE TARGETS.— 
‘‘(A) IN GENERAL.—The Director may, for 
any year, establish by regulation, for any or all 
of the types of families described in subsection 
(a), percentage targets that are higher than the 
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percentages for such year determined pursuant 
to paragraph (1), to reflect expected changes in 
market performance related to such information 
under the Home Mortgage Disclosure Act of 
1975. 
‘‘(B) FACTORS.—In establishing any tar-
gets pursuant to subparagraph (A), the Direc-
tor shall consider the following factors: 
‘‘(i) National housing needs. 
‘‘(ii) Economic, housing, and demo-
graphic conditions. 
‘‘(iii) The performance and effort of 
the enterprises toward achieving the hous-
ing goals under this section in previous 
years. 
‘‘(iv) The size of the conventional 
mortgage market serving each of the types 
of families described in subsection (a) rel-
ative to the size of the overall conventional 
mortgage market. 
‘‘(v) The ability of the enterprise to 
lead the industry in making mortgage 
credit available. 
‘‘(vi) The need to maintain the sound 
financial condition of the enterprises. 
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‘‘(3) 
HMDA 
INFORMATION.—The 
Director 
shall annually obtain information submitted in com-
pliance with the Home Mortgage Disclosure Act of 
1975 regarding conventional, conforming, single- 
family, owner-occupied or rental, as applicable, pur-
chase money mortgages originated and purchased 
for the previous year. 
‘‘(4) CONFORMING
MORTGAGES.—In deter-
mining whether a mortgage is a conforming mort-
gage for purposes of this paragraph, the Director 
shall consider the original principal balance of the 
mortgage loan to be the principal balance as re-
ported in the information referred to in paragraph 
(3), as rounded to the nearest thousand dollars. 
‘‘(e) NOTICE OF DETERMINATION AND ENTERPRISE 
COMMENT.— 
‘‘(1) NOTICE.—Within 30 days of making a de-
termination under subsection (c) regarding a compli-
ance of an enterprise for a year with a housing goal 
established under this section and before any public 
disclosure thereof, the Director shall provide notice 
of the determination to the enterprise, which shall 
include an analysis and comparison, by the Director, 
of the performance of the enterprise for the year and 
the targets for the year under subsection (d). 
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‘‘(2) COMMENT
PERIOD.—The Director shall 
provide each enterprise an opportunity to comment 
on the determination during the 30-day period be-
ginning upon receipt by the enterprise of the notice. 
‘‘(f) USE OF BORROWER INCOME.—In monitoring 
the performance of each enterprise pursuant to the hous-
ing goals under this section and evaluating such perform-
ance (for purposes of section 1336), the Director shall 
consider a mortgagor’s income to be such income at the 
time of origination of the mortgage. 
‘‘(g) CONSIDERATION OF UNITS IN SINGLE-FAMILY 
RENTAL HOUSING.—In establishing any goal under this 
subpart, the Director may take into consideration the 
number of housing units financed by any mortgage on sin-
gle-family rental housing purchased by an enterprise. 
‘‘SEC. 1333. MULTIFAMILY SPECIAL AFFORDABLE HOUSING 
GOAL. 
‘‘(a) ESTABLISHMENT.— 
‘‘(1) IN GENERAL.—The Director shall estab-
lish, by regulation, an annual goal for the purchase 
by each enterprise of each of the following types of 
mortgages on multifamily housing: 
‘‘(A) Mortgages that finance dwelling units 
for low-income families. 
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‘‘(B) Mortgages that finance dwelling units 
for very low-income families. 
‘‘(C) Mortgages that finance dwelling units 
assisted by the low-income housing tax credit 
under section 42 of the Internal Revenue Code 
of 1986. 
‘‘(2) ADDITIONAL REQUIREMENTS FOR SMALL-
ER PROJECTS.—The Director shall establish, within 
the goal under this section, additional requirements 
for the purchase by each enterprise of mortgages de-
scribed in paragraph (1) for multifamily housing 
projects of a smaller or limited size, which may be 
based on the number of dwelling units in the project 
or the amount of the mortgage, or both, and shall 
include multifamily housing projects of such smaller 
sizes as are typical among such projects that serve 
rural areas. 
‘‘(3) FACTORS.—In establishing the goal under 
this section relating to mortgages on multifamily 
housing for an enterprise for a year, the Director 
shall consider— 
‘‘(A) national multifamily mortgage credit 
needs; 
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‘‘(B) the performance and effort of the en-
terprise in making mortgage credit available for 
multifamily housing in previous years; 
‘‘(C) the size of the multifamily mortgage 
market; 
‘‘(D) the ability of the enterprise to lead 
the industry in making mortgage credit avail-
able, especially for underserved markets, such 
as for small multifamily projects of 5 to 50 
units, multifamily properties in need of rehabili-
tation, and multifamily properties located in 
rural areas; and 
‘‘(E) the need to maintain the sound finan-
cial condition of the enterprise. 
‘‘(b) UNITS FINANCED BY HOUSING FINANCE AGEN-
CY BONDS.—The Director shall give credit toward the 
achievement of the multifamily special affordable housing 
goal under this section (for purposes of section 1336) to 
dwelling units in multifamily housing that otherwise quali-
fies under such goal and that is financed by tax-exempt 
or taxable bonds issued by a State or local housing finance 
agency, but only if such bonds— 
‘‘(1) are secured by a guarantee of the enter-
prise; or 
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238 
‘‘(2) are not investment grade and are pur-
chased by the enterprise. 
‘‘(c) USE OF TENANT INCOME OR RENT.—The Di-
rector shall monitor the performance of each enterprise 
in meeting the goals established under this section and 
shall evaluate such performance (for purposes of section 
1336) based on— 
‘‘(1) the income of the prospective or actual 
tenants of the property, where such data are avail-
able; or 
‘‘(2) where the data referred to in paragraph 
(1) are not available, rent levels affordable to low- 
income and very low-income families. 
A rent level shall be considered to be affordable for pur-
poses of this subsection for an income category referred 
to in this subsection if it does not exceed 30 percent of 
the maximum income level of such income category, with 
appropriate adjustments for unit size as measured by the 
number of bedrooms. 
‘‘(d) DETERMINATION OF COMPLIANCE.—The Direc-
tor shall, for each year that the housing goal under this 
section is in effect pursuant to section 1331(a), determine 
whether each enterprise has complied with such goal and 
the additional requirements under subsection (a)(2). 
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239 
‘‘SEC. 1334. DISCRETIONARY ADJUSTMENT OF HOUSING 
GOALS. 
‘‘(a) AUTHORITY.—An enterprise may petition the 
Director in writing at any time during a year to reduce 
the level of any goal for such year established pursuant 
to this subpart. 
‘‘(b) STANDARD
FOR REDUCTION.—The Director 
may reduce the level for a goal pursuant to such a petition 
only if— 
‘‘(1) market and economic conditions or the fi-
nancial condition of the enterprise require such ac-
tion; or 
‘‘(2) efforts to meet the goal would result in the 
constraint of liquidity, over-investment in certain 
market segments, or other consequences contrary to 
the intent of this subpart, or section 301(3) of the 
Federal National Mortgage Association Charter Act 
(12 U.S.C. 1716(3)) or section 301(3) of the Fed-
eral Home Loan Mortgage Corporation Act (12 
U.S.C. 1451 note), as applicable. 
‘‘(c) DETERMINATION.—The Director shall make a 
determination regarding any proposed reduction within 30 
days of receipt of the petition regarding the reduction. The 
Director may extend such period for a single additional 
15-day period, but only if the Director requests additional 
information from the enterprise. A denial by the Director 
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240 
to reduce the level of any goal under this section may be 
appealed to the United States District Court for the Dis-
trict of Columbia or the United States district court in 
the jurisdiction in which the headquarters of an enterprise 
is located.’’. 
(b) CONFORMING AMENDMENTS.—The Housing and 
Community Development Act of 1992 is amended— 
(1) in section 1335(a) (12 U.S.C. 4565(a)), in 
the matter preceding paragraph (1), by striking 
‘‘low- and moderate-income housing goal’’ and all 
that follows through ‘‘section 1334’’ and inserting 
‘‘housing goals established under this subpart’’; and 
(2) 
in 
section 
1336(a)(1) 
(12 
U.S.C. 
4566(a)(1)), by striking ‘‘sections 1332, 1333, and 
1334,’’ and inserting ‘‘this subpart’’. 
(c) DEFINITIONS.—Section 1303 of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4502), 
as amended by the preceding provisions of this title, is 
further amended— 
(1) in paragraph (22) (relating to the definition 
of ‘‘very low-income’’), by striking ‘‘60 percent’’ each 
place such term appears and inserting ‘‘50 percent’’; 
(2) by redesignating paragraphs (19) through 
(22) as paragraphs (23) through (26), respectively; 
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241 
(3) by inserting after paragraph (18) the fol-
lowing new paragraph: 
‘‘(22) RURAL AREA.—The term ‘rural area’ has 
the meaning given such term in section 520 of the 
Housing Act of 1949 (42 U.S.C. 1490), except that 
such term includes micropolitan areas and tribal 
trust lands.’’. 
(4) by redesignating paragraphs (13) through 
(18) as paragraphs (16) through (21), respectively; 
(5) by inserting after paragraph (12) the fol-
lowing new paragraph: 
‘‘(15) LOW-INCOME AREA.—The term ‘low in-
come area’ means a census tract or block numbering 
area in which the median income does not exceed 80 
percent of the median income for the area in which 
such census tract or block numbering area is lo-
cated, and, for the purposes of section 1332(a)(2), 
shall include families having incomes not greater 
than 100 percent of the area median income who re-
side in minority census tracts.’’; 
(6) by redesignating paragraphs (11) and (12) 
as paragraphs (13) and (14), respectively; 
(7) by inserting after paragraph (10) the fol-
lowing new paragraph: 
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242 
‘‘(12) EXTREMELY
LOW-INCOME.—The term 
‘extremely low-income’ means— 
‘‘(A) in the case of owner-occupied units, 
income not in excess of 30 percent of the area 
median income; and 
‘‘(B) in the case of rental units, income 
not in excess of 30 percent of the area median 
income, with adjustments for smaller and larger 
families, as determined by the Secretary.’’; 
(8) by redesignating paragraphs (7) through 
(10) as paragraphs (8) through (11), respectively; 
and 
(9) by inserting after paragraph (6) the fol-
lowing new paragraph: 
‘‘(7) CONFORMING MORTGAGE.—The term ‘con-
forming mortgage’ means, with respect to an enter-
prise, a conventional mortgage having an original 
principal obligation that does not exceed the dollar 
limitation, in effect at the time of such origination, 
under, as applicable— 
‘‘(A) section 302(b)(2) of the Federal Na-
tional Mortgage Association Charter Act; or 
‘‘(B) section 305(a)(2) of the Federal 
Home Loan Mortgage Corporation Act.’’. 
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243 
SEC. 1038. DUTY TO SERVE UNDERSERVED MARKETS. 
(a) ESTABLISHMENT
AND EVALUATION
OF PER-
FORMANCE.—Section 1335 of the Housing and Commu-
nity Development Act of 1992 (12 U.S.C. 4565) is amend-
ed— 
(1) in the section heading, by inserting ‘‘DUTY 
TO SERVE UNDERSERVED MARKETS AND’’ be-
fore ‘‘OTHER’’; 
(2) by striking subsection (b); 
(3) in subsection (a)— 
(A) in the matter preceding paragraph (1), 
by inserting ‘‘and to carry out the duty under 
subsection (a) of this section’’ before ‘‘, each 
enterprise shall’’; 
(B) in paragraph (3), by inserting ‘‘and’’ 
after the semicolon at the end; 
(C) in paragraph (4), by striking ‘‘; and’’ 
and inserting a period; 
(D) by striking paragraph (5); and 
(E) by redesignating such subsection as 
subsection (b); 
(4) by inserting before subsection (b) (as so re-
designated by paragraph (3)(E) of this subsection) 
the following new subsection: 
‘‘(a) DUTY TO SERVE UNDERSERVED MARKETS.— 
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244 
‘‘(1) DUTY.—In accordance with the purpose of 
the enterprises under section 301(3) of the Federal 
National Mortgage Association Charter Act (12 
U.S.C. 1716) and section 301(b)(3) of the Federal 
Home Loan Mortgage Corporation Act (12 U.S.C. 
1451 note) to undertake activities relating to mort-
gages on housing for very low-, low-, and moderate- 
income families involving a reasonable economic re-
turn that may be less than the return earned on 
other activities, each enterprise shall have the duty 
to increase the liquidity of mortgage investments 
and improve the distribution of investment capital 
available for mortgage financing for underserved 
markets. 
‘‘(2) UNDERSERVED
MARKETS.—To meet its 
duty under paragraph (1), each enterprise shall com-
ply with the following requirements with respect to 
the following underserved markets: 
‘‘(A) MANUFACTURED HOUSING.—The en-
terprise shall lead the industry in developing 
loan products and flexible underwriting guide-
lines to facilitate a secondary market for mort-
gages on manufactured homes for very low-, 
low-, and moderate-income families. 
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245 
‘‘(B) AFFORDABLE
HOUSING
PRESERVA-
TION.—The enterprise shall lead the industry in 
developing loan products and flexible under-
writing guidelines to facilitate a secondary mar-
ket to preserve housing affordable to very 
low-, low-, and moderate-income families, in-
cluding housing projects subsidized under— 
‘‘(i) the project-based and tenant- 
based rental assistance programs under 
section 8 of the United States Housing Act 
of 1937; 
‘‘(ii) the program under section 236 
of the National Housing Act; 
‘‘(iii) the below-market interest rate 
mortgage program under section 221(d)(4) 
of the National Housing Act; 
‘‘(iv) the supportive housing for the 
elderly program under section 202 of the 
Housing Act of 1959; 
‘‘(v) the supportive housing program 
for persons with disabilities under section 
811 of the Cranston-Gonzalez National Af-
fordable Housing Act; 
‘‘(vi) the programs under title IV of 
the McKinney-Vento Homeless Assistance 
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246 
Act (42 U.S.C. 11361 et seq.), but only 
permanent supportive housing projects 
subsidized under such programs; and 
‘‘(vii) the rural rental housing pro-
gram under section 515 of the Housing 
Act of 1949. 
‘‘(C) RURAL
AND
OTHER
UNDERSERVED 
MARKETS.—The enterprise shall lead the indus-
try in developing loan products and flexible un-
derwriting guidelines to facilitate a secondary 
market for mortgages on housing for very 
low-, low-, and moderate-income families in 
rural areas, and for mortgages for housing for 
any other underserved market for very low-, 
low-, and moderate-income families that the 
Secretary identifies as lacking adequate credit 
through conventional lending sources. Such un-
derserved markets may be identified by bor-
rower type, market segment, or geographic 
area.’’; and 
(5) by adding at the end the following new sub-
section: 
‘‘(c) EVALUATION
AND REPORTING
OF COMPLI-
ANCE.— 
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247 
‘‘(1) IN GENERAL.—Not later than 6 months 
after the effective date under section 1065 of the 
Federal Housing Finance Reform Act of 2008, the 
Director shall establish a manner for evaluating 
whether, and the extent to which, the enterprises 
have complied with the duty under subsection (a) to 
serve underserved markets and for rating the extent 
of such compliance. Using such method, the Director 
shall, for each year, evaluate such compliance and 
rate the performance of each enterprise as to extent 
of compliance. The Director shall include such eval-
uation and rating for each enterprise for a year in 
the report for that year submitted pursuant to sec-
tion 1319B(a). 
‘‘(2) SEPARATE EVALUATIONS.—In determining 
whether an enterprise has complied with the duty re-
ferred to in paragraph (1), the Director shall sepa-
rately evaluate whether the enterprise has complied 
with such duty with respect to each of the under-
served markets identified in subsection (a), taking 
into consideration— 
‘‘(A) the development of loan products and 
more flexible underwriting guidelines; 
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248 
‘‘(B) the extent of outreach to qualified 
loan sellers in each of such underserved mar-
kets; and 
‘‘(C) the volume of loans purchased in each 
of such underserved markets. 
‘‘(3) MANUFACTURED
HOUSING
MARKET.—In 
determining whether an enterprise has complied with 
the duty under subparagraph (A) of subsection 
(a)(2), the Director may consider loans secured by 
both real and personal property.’’. 
(b) ENFORCEMENT.—Subsection (a) of section 1336 
of the Housing and Community Development Act of 1992 
(12 U.S.C. 4566(a)) is amended— 
(1) in paragraph (1), by inserting ‘‘and with 
the duty under section 1335(a) of each enterprise 
with respect to underserved markets,’’ before ‘‘as 
provided in this section’’; and 
(2) by adding at the end of such subsection, as 
amended by the preceding provisions of this subtitle, 
the following new paragraph: 
‘‘(4) ENFORCEMENT
OF
DUTY
TO
PROVIDE 
MORTGAGE CREDIT TO UNDERSERVED MARKETS.— 
The duty under section 1335(a) of each enterprise 
to serve underserved markets (as determined in ac-
cordance with section 1335(c)) shall be enforceable 
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249 
under this section to the same extent and under the 
same provisions that the housing goals established 
under this subpart are enforceable. Such duty shall 
not be enforceable under any other provision of this 
title (including subpart C of this part) other than 
this section or under any provision of the Federal 
National Mortgage Association Charter Act or the 
Federal Home Loan Mortgage Corporation Act.’’. 
SEC. 1039. MONITORING AND ENFORCING COMPLIANCE 
WITH HOUSING GOALS. 
(a) ADDITIONAL
CREDIT
FOR
CERTAIN
MORT-
GAGES.—Section 1336(a) of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4566(a)) is amend-
ed— 
(1) in paragraph (2), by inserting ‘‘, except as 
provided in paragraph (4),’’ after ‘‘which’’; and 
(2) by adding at the end the following new 
paragraph: 
‘‘(5) ADDITIONAL CREDIT.—The Director shall 
assign more than 125 percent credit toward achieve-
ment, under this section, of the housing goals for 
mortgage purchase activities of the enterprises that 
comply with the requirements of such goals and sup-
port— 
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250 
‘‘(A) housing that meets energy efficiency 
or other environmental standards that are es-
tablished by a Federal, State, or local govern-
mental authority with respect to the geographic 
area where the housing is located or are other-
wise widely recognized; or 
‘‘(B) housing that includes a licensed 
childcare center. 
The availability of additional credit under this para-
graph shall not be used to increase any housing 
goal, subgoal, or target established under this sub-
part.’’. 
(b) MONITORING
AND
ENFORCEMENT.—Section 
1336 of the Housing and Community Development Act 
of 1992 (12 U.S.C. 4566) is amended— 
(1) in subsection (b)— 
(A) in the subsection heading, by inserting 
‘‘PRELIMINARY’’ before ‘‘DETERMINATION’’; 
(B) by striking paragraph (1) and insert-
ing the following new paragraph: 
‘‘(1) NOTICE.—If the Director preliminarily de-
termines that an enterprise has failed, or that there 
is a substantial probability that an enterprise will 
fail, to meet any housing goal established under this 
subpart, the Director shall provide written notice to 
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251 
the enterprise of such a preliminary determination, 
the reasons for such determination, and the informa-
tion on which the Director based the determina-
tion.’’; 
(C) in paragraph (2)— 
(i) in subparagraph (A), by inserting 
‘‘finally’’ before ‘‘determining’’; 
(ii) by striking subparagraphs (B) and 
(C) and inserting the following new sub-
paragraph: 
‘‘(B) EXTENSION OR SHORTENING OF PE-
RIOD.—The Director may— 
‘‘(i) extend the period under subpara-
graph (A) for good cause for not more 
than 30 additional days; and 
‘‘(ii) shorten the period under sub-
paragraph (A) for good cause.’’; and 
(iii) by redesignating subparagraph 
(D) as subparagraph (C); and 
(D) in paragraph (3)— 
(i) in subparagraph (A), by striking 
‘‘determine’’ and inserting ‘‘issue a final 
determination of’’; 
(ii) in subparagraph (B), by inserting 
‘‘final’’ before ‘‘determinations’’; and 
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(iii) in subparagraph (C)— 
(I) by striking ‘‘Committee on 
Banking, Finance and Urban Affairs’’ 
and inserting ‘‘Committee on Finan-
cial Services’’; and 
(II) by inserting ‘‘final’’ before 
‘‘determination’’ each place such term 
appears; and 
(2) in subsection (c)— 
(A) by striking the subsection designation 
and heading and all that follows through the 
end of paragraph (1) and inserting the fol-
lowing: 
‘‘(c) CEASE
AND DESIST ORDERS, CIVIL MONEY 
PENALTIES, 
AND
REMEDIES
INCLUDING
HOUSING 
PLANS.— 
‘‘(1) REQUIREMENT.—If the Director finds, 
pursuant to subsection (b), that there is a substan-
tial probability that an enterprise will fail, or has ac-
tually failed, to meet any housing goal under this 
subpart and that the achievement of the housing 
goal was or is feasible, the Director may require that 
the enterprise submit a housing plan under this sub-
section. If the Director makes such a finding and 
the enterprise refuses to submit such a plan, sub-
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253 
mits an unacceptable plan, fails to comply with the 
plan or the Director finds that the enterprise has 
failed to meet any housing goal under this subpart, 
in addition to requiring an enterprise to submit a 
housing plan, the Director may issue a cease and de-
sist order in accordance with section 1341, impose 
civil money penalties in accordance with section 
1345, or order other remedies as set forth in para-
graph (7) of this subsection.’’; 
(B) in paragraph (2)— 
(i) by striking ‘‘CONTENTS.—Each 
housing plan’’ and inserting ‘‘HOUSING 
PLAN.—If the Director requires a housing 
plan under this section, such a plan’’; and 
(ii) in subparagraph (B), by inserting 
‘‘and changes in its operations’’ after ‘‘im-
provements’’; 
(C) in paragraph (3)— 
(i) by inserting ‘‘comply with any re-
medial action or’’ before ‘‘submit a housing 
plan’’; and 
(ii) by striking ‘‘under subsection 
(b)(3) that a housing plan is required’’; 
(D) in paragraph (4), by striking the first 
two sentences and inserting the following: ‘‘The 
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254 
Director shall review each submission by an en-
terprise, including a housing plan submitted 
under this subsection, and not later than 30 
days after submission, approve or disapprove 
the plan or other action. The Director may ex-
tend the period for approval or disapproval for 
a single additional 30-day period if the Director 
determines such extension necessary.’’; and 
(E) by adding at the end the following new 
paragraph: 
‘‘(7) ADDITIONAL REMEDIES FOR FAILURE TO 
MEET GOALS.—In addition to ordering a housing 
plan under this section, issuing cease and desist or-
ders under section 1341, and ordering civil money 
penalties under section 1345, the Director may seek 
other actions when an enterprise fails to meet a 
goal, and exercise appropriate enforcement authority 
available to the Director under this Act to prohibit 
the enterprise from initially offering any product (as 
such term is defined in section 1321(f)) or engaging 
in any new activities, services, undertakings, and of-
ferings and to order the enterprise to suspend prod-
ucts and activities, services, undertakings, and offer-
ings pending its achievement of the goal.’’. 
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255 
SEC. 1040. CONSISTENCY WITH MISSION. 
Subpart B of part 2 of subtitle A of title XIII of the 
Housing and Community Development Act of 1992 is 
amended by striking sections 1337 and 1338 (42 U.S.C. 
4562 note) and inserting the following new section: 
‘‘SEC. 1337. 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 
Mortgage Association Charter Act or the Federal Home 
Loan Mortgage Corporation Act.’’. 
SEC. 1041. 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: 
‘‘(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 fail-
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257 
‘‘(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 Cor-
poration 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 NO-
TICES AND ORDERS.—Section 1344 of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4584) 
is amended 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 
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258 
General of the United States bring such an action. Such 
court shall have jurisdiction and power to order and re-
quire compliance 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); 
‘‘(2) submit a report under section 1314, fol-
lowing a notice of such failure, an opportunity for 
comment by the enterprise, and a final determina-
tion by the Director; 
‘‘(3) submit the information required under 
subsection (m) or (n) of section 309 of the Federal 
National Mortgage Association Charter Act, or sub-
section (e) or (f) of section 307 of the Federal Home 
Loan Mortgage Corporation Act; 
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259 
‘‘(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 
penalty, 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)— 
(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 deter-
mining the penalty under subsection (a)(1), the 
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260 
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 sub-
section (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— 
(1) by striking ‘‘request the Attorney General 
of the United States to’’ and inserting ‘‘, in the dis-
cretion 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 
subpart C of part 2 of subtitle A of title XIII of the Hous-
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261 
ing and Community Development Act of 1992 is amended 
to read as follows: 
‘‘Subpart C—Enforcement’’. 
SEC. 1042. 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 1035) as section 1327; 
(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). 
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262 
CHAPTER 3—PROMPT CORRECTIVE 
ACTION 
SEC. 1045. 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 strik-
ing ‘‘IN GENERAL’’ and inserting ‘‘ENTERPRISES’’. 
(2) in subsection (c)— 
(A) by striking ‘‘subsection (b)’’ and in-
serting ‘‘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.— 
‘‘(1) ESTABLISHMENT
AND
CRITERIA.—For 
purposes of this subtitle, the Director shall, by regu-
lation— 
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263 
‘‘(A) establish the capital classifications 
specified under paragraph (2) for the Federal 
home loan banks; 
‘‘(B) establish criteria for each such cap-
ital classification based on the amount and 
types of capital held by a bank and the risk- 
based, minimum, and critical capital levels for 
the banks and taking due consideration of the 
capital classifications established under sub-
section (a) for the enterprises, with such modi-
fications as the Director determines to be ap-
propriate 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.— 
‘‘(1) GROUNDS
FOR
RECLASSIFICATION.—The 
Director may reclassify a regulated entity under 
paragraph (2) if— 
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264 
‘‘(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 enter-
prise 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 Di-
rector deems the regulated entity to be engag-
ing 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 rea-
son not specified in this subsection, if the Director 
takes any action described in paragraph (1) the Di-
rector may classify a regulated entity— 
‘‘(A) as undercapitalized, if the regulated 
entity is otherwise classified as adequately cap-
italized; 
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265 
‘‘(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 sig-
nificantly undercapitalized.’’; and 
(5) by inserting after subsection (d) (as so re-
designated by paragraph (3) of this subsection), the 
following 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 under-
capitalized. 
‘‘(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 regulated entity in at least an equivalent 
amount; and 
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266 
‘‘(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 1065, the Director of the Federal Housing Fi-
nance 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. 1046. SUPERVISORY ACTIONS APPLICABLE TO UNDER-
CAPITALIZED REGULATED ENTITIES. 
Section 1365 of the Housing and Community Devel-
opment 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 
paragraph, the following paragraph: 
‘‘(1) REQUIRED
MONITORING.—The Director 
shall— 
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267 
‘‘(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 wheth-
er 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 reg-
ulated entity that is classified as undercapitalized 
shall not permit its average total assets (as such 
term is defined in section 1316(b) during any cal-
endar quarter to exceed its average total assets dur-
ing 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 
‘‘(C) the ratio of total capital to assets for 
the regulated entity increases during the cal-
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268 
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 enti-
ty that is classified as undercapitalized shall not, di-
rectly or indirectly, acquire any interest in any entity 
or initially offer any new product (as such term is 
defined in section 1321(f)) or engage in any new ac-
tivity, service, undertaking, or offering unless— 
‘‘(A) the Director has accepted the capital 
restoration plan of the regulated entity, the en-
tity is implementing the plan, and the Director 
determines that the proposed action is con-
sistent 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 
section.’’; 
(3) in the subsection heading for subsection (b), 
by striking ‘‘FROM UNDERCAPITALIZED TO SIGNIFI-
CANTLY UNDERCAPITALIZED’’; and 
(4) by striking subsection (c) and inserting the 
following new subsection: 
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269 
‘‘(c) OTHER DISCRETIONARY SAFEGUARDS.—The 
Director may take, with respect to a regulated entity that 
is classified as undercapitalized, any of the actions author-
ized to be taken under section 1366 with respect to a regu-
lated entity that is classified as significantly undercapital-
ized, if the Director determines that such actions are nec-
essary to carry out the purpose of this subtitle.’’. 
SEC. 1047. SUPERVISORY ACTIONS APPLICABLE TO SIG-
NIFICANTLY 
UNDERCAPITALIZED 
REGU-
LATED ENTITIES. 
Section 1366 of the Housing and Community Devel-
opment 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 
inserting ‘‘shall carry out this section by taking, 
at any time, one or more’’; 
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270 
(C) by redesignating paragraphs (5) and 
(6) as paragraphs (6) and (7), respectively; 
(D) by inserting after paragraph (4) the 
following 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 
regulated entity. 
‘‘(B) DISMISSAL OF DIRECTORS OR EXECU-
TIVE OFFICERS.—Require the regulated entity 
to dismiss from office any director or executive 
officer who had held office for more than 180 
days immediately before the entity became 
undercapitalized. Dismissal under this subpara-
graph shall not be construed to be a removal 
pursuant to the Director’s enforcement powers 
provided in section 1377. 
‘‘(C) EMPLOY QUALIFIED EXECUTIVE OF-
FICERS.—Require the regulated entity to em-
ploy qualified executive officers (who, if the Di-
rector so specifies, shall be subject to approval 
by the Director).’’; and 
(E) by inserting at the end the following 
new paragraph: 
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271 
‘‘(8) OTHER
ACTION.—Require the regulated 
entity to take any other action that the Director de-
termines will better carry out the purpose of this 
section than any of the actions specified in this 
paragraph.’’; 
(4) by redesignating subsection (c) as sub-
section (d); and 
(5) by inserting after subsection (b) the fol-
lowing new subsection: 
‘‘(c) RESTRICTION ON COMPENSATION OF EXECU-
TIVE OFFICERS.—A regulated entity that is classified as 
significantly undercapitalized may not, without prior writ-
ten approval 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 
entity became undercapitalized.’’. 
SEC. 1048. 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: 
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272 
‘‘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 Di-
rector shall appoint the Agency as conservator or re-
ceiver. 
‘‘(3) 
GROUNDS
FOR
APPOINTMENT.—The 
grounds for appointing a conservator or receiver for 
a regulated entity are as follows: 
‘‘(A) ASSETS INSUFFICIENT FOR OBLIGA-
TIONS.—The assets of the regulated entity are 
less than the obligations of the regulated entity 
to its creditors and others. 
‘‘(B) SUBSTANTIAL
DISSIPATION.—Sub-
stantial dissipation of assets or earnings due 
to— 
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273 
‘‘(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 
business. 
‘‘(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 reg-
ulated entity, or any refusal to submit the 
books, papers, records, or affairs of the regu-
lated 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 
creditors in the normal course of business. 
‘‘(G) LOSSES.—The regulated entity has 
incurred or is likely to incur losses that will de-
plete all or substantially all of its capital, and 
there is no reasonable prospect for the regu-
lated entity to become adequately capitalized 
(as defined in section 1364(a)(1)). 
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274 
‘‘(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 appoint-
ment. 
‘‘(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— 
‘‘(I) section 1365(a)(1) with re-
spect to an undercapitalized regulated 
entity; or 
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‘‘(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 reg-
ulations 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.— 
‘‘(A) IN GENERAL.—The Director shall ap-
point the Agency as receiver for a regulated en-
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‘‘(C) DETERMINATION NOT REQUIRED IF 
RECEIVERSHIP ALREADY IN PLACE.—Subpara-
graph (B) shall not apply with respect to a reg-
ulated entity in any period during which the 
Agency serves as receiver for the regulated enti-
ty. 
‘‘(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 regulated 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. 
‘‘(B) REVIEW.—Upon the filing of an ac-
tion under subparagraph (A), the court shall, 
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upon the merits, dismiss such action or direct 
the Agency to remove itself as such conservator 
or receiver. 
‘‘(6) DIRECTORS
NOT
LIABLE
FOR
ACQUI-
ESCING IN APPOINTMENT OF CONSERVATOR OR RE-
CEIVER.—The members of the board of directors of 
a regulated entity shall not be liable to the share-
holders or creditors of the regulated entity for acqui-
escing in or consenting in good faith to the appoint-
ment of the Agency as conservator or receiver for 
that regulated entity. 
‘‘(7) AGENCY
NOT
SUBJECT
TO
ANY
OTHER 
FEDERAL AGENCY.—When acting as conservator or 
receiver, the Agency shall not be subject to the di-
rection or supervision of any other agency of the 
United States or any State in the exercise of the 
rights, powers, 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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‘‘(A) SUCCESSOR
TO
REGULATED
ENTI-
TY.—The Agency shall, as conservator or re-
ceiver, 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 
assets of any other legal custodian of such 
regulated entity. 
‘‘(B) OPERATE
THE
REGULATED
ENTI-
TY.—The Agency may, as conservator or re-
ceiver— 
‘‘(i) take over the assets of and oper-
ate the regulated entity with all the powers 
of the shareholders, the directors, and the 
officers 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 reg-
ulated entity in the name of the regulated 
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entity which are consistent with the ap-
pointment as conservator or receiver; and 
‘‘(iv) preserve and conserve the assets 
and property of such regulated entity. 
‘‘(C) FUNCTIONS
OF
OFFICERS, DIREC-
TORS, AND SHAREHOLDERS OF A REGULATED 
ENTITY.—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 conservator 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 
contempora-
neously, merging two or more such banks 
into a single Federal home loan bank. 
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‘‘(E) 
ADDITIONAL
POWERS
AS
RE-
CEIVER.—The Agency may, as receiver, place 
the regulated entity in liquidation and proceed 
to realize upon the assets of the regulated enti-
ty, having due regard 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 reg-
ulated entity in default without any approval, 
assignment, or consent with respect to such 
transfer. Any Federal home loan bank may, 
with the approval of the Agency, acquire the as-
sets of any Bank in conservatorship or receiver-
ship, and assume 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 per-
formance of contracts or sale of the assets of a 
regulated entity, pay all valid obligations of the 
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regulated entity in accordance with the pre-
scriptions and limitations of this section. 
‘‘(I) SUBPOENA AUTHORITY.— 
‘‘(i) IN GENERAL.— 
‘‘(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 sec-
tion. 
‘‘(ii) AUTHORITY
OF
DIRECTOR.—A 
subpoena or subpoena duces tecum may be 
issued under clause (i) only by, or with the 
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written approval of, the Director, or the 
designee of the Director. 
‘‘(iii) RULE OF CONSTRUCTION.—This 
subsection shall not be construed to limit 
any rights that the Agency, in any capac-
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 con-
servator or receiver. 
‘‘(K) INCIDENTAL POWERS.—The Agency 
may, as conservator or receiver— 
‘‘(i) exercise all powers and authori-
ties specifically granted to conservators or 
receivers, respectively, under this section, 
and such incidental powers as shall be nec-
essary 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 en-
tity or the Agency. 
‘‘(3) AUTHORITY OF RECEIVER TO DETERMINE 
CLAIMS.— 
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284 
‘‘(A) IN GENERAL.—The Agency may, as 
receiver, determine claims in accordance with 
the requirements of this subsection and any 
regulations prescribed under paragraph (4). 
‘‘(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, respec-
tively, 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 
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285 
‘‘(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 
address. 
‘‘(4) RULEMAKING
AUTHORITY
RELATING
TO 
DETERMINATION OF CLAIMS.—Subject to subsection 
(c), the Director may prescribe regulations regarding 
the allowance or disallowance of claims by the re-
ceiver and providing for administrative determina-
tion 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 en-
tity 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 re-
spect to such claim. 
‘‘(ii) EXTENSION OF TIME.—The pe-
riod described in clause (i) may be ex-
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tended by a written agreement between the 
claimant 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 re-
spect to any claim is mailed to the last ad-
dress of the claimant which appears— 
‘‘(I) on the books of the regu-
lated 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. 
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287 
‘‘(B) ALLOWANCE
OF
PROVEN
CLAIM.— 
The receiver shall allow any claim received on 
or before the date specified in the notice pub-
lished 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. 
‘‘(C) DISALLOWANCE
OF
CLAIMS
FILED 
AFTER END OF FILING PERIOD.—Claims filed 
after the date specified in the notice published 
under paragraph (3)(B)(i), or the date specified 
under paragraph (3)(C), shall be disallowed and 
such disallowance shall be final. 
‘‘(D) AUTHORITY TO DISALLOW CLAIMS.— 
‘‘(i) IN GENERAL.—The receiver may 
disallow any portion of any claim by a 
creditor or claim of security, preference, or 
priority which is not proved to the satisfac-
tion of the receiver. 
‘‘(ii) 
PAYMENTS
TO
LESS
THAN 
FULLY SECURED CREDITORS.—In the case 
of a claim of a creditor against a regulated 
entity which is secured by any property or 
other asset of such regulated entity, the re-
ceiver— 
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‘‘(I) may treat the portion of 
such claim which exceeds an amount 
equal to the fair market value of such 
property or other asset as an unse-
cured claim against the regulated en-
tity; and 
‘‘(II) may not make any payment 
with respect to such unsecured por-
tion of the claim other than in connec-
tion with the disposition of all claims 
of unsecured creditors of the regu-
lated entity. 
‘‘(iii) EXCEPTIONS.—No provision of 
this paragraph shall apply with respect to 
any extension of credit from any Federal 
Reserve Bank, Federal home loan bank, or 
the Treasury of the United States. 
‘‘(E) NO
JUDICIAL
REVIEW
OF
DETER-
MINATION PURSUANT TO SUBPARAGRAPH (d).— 
No court may review the determination of the 
Agency under subparagraph (D) to disallow a 
claim. This subparagraph shall not affect the 
authority of a claimant to obtain de novo judi-
cial review of a claim pursuant to paragraph 
(6). 
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‘‘(F) LEGAL EFFECT OF FILING.— 
‘‘(i) 
STATUTE
OF
LIMITATION 
TOLLED.—For purposes of any applicable 
statute of limitations, the filing of a claim 
with the receiver shall constitute a com-
mencement of an action. 
‘‘(ii) NO PREJUDICE TO OTHER AC-
TIONS.—Subject to paragraph (10), the fil-
ing of a claim with the receiver shall not 
prejudice any right of the claimant to con-
tinue any action which was filed before the 
date of the appointment of the receiver, 
subject to the determination of claims by 
the receiver. 
‘‘(6) PROVISION FOR JUDICIAL DETERMINATION 
OF CLAIMS.— 
‘‘(A) IN GENERAL.—The claimant may file 
suit on a claim (or continue an action com-
menced before the appointment of the receiver) 
in the district or territorial court of the United 
States for the district within which the prin-
cipal place of business of the regulated entity is 
located or the United States District Court for 
the District of Columbia (and such court shall 
have jurisdiction to hear such claim), before the 
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end of the 60-day period beginning on the ear-
lier of— 
‘‘(i) the end of the period described in 
paragraph (5)(A)(i) with respect to any 
claim against a regulated entity for which 
the Agency is receiver; or 
‘‘(ii) the date of any notice of dis-
allowance of such claim pursuant to para-
graph (5)(A)(i). 
‘‘(B) STATUTE OF LIMITATIONS.—A claim 
shall be deemed to be disallowed (other than 
any portion of such claim which was allowed by 
the receiver), and such disallowance shall be 
final, and the claimant shall have no further 
rights or remedies with respect to such claim, 
if the claimant fails, before the end of the 60- 
day period described under subparagraph (A), 
to file suit on such claim (or continue an action 
commenced before the appointment of the re-
ceiver). 
‘‘(7) REVIEW OF CLAIMS.— 
‘‘(A) OTHER REVIEW PROCEDURES.— 
‘‘(i) IN GENERAL.—The Agency shall 
establish such alternative dispute resolu-
tion processes as may be appropriate for 
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291 
the resolution of claims filed under para-
graph (5)(A)(i). 
‘‘(ii) CRITERIA.—In establishing alter-
native dispute resolution processes, the 
Agency shall strive for procedures which 
are expeditious, fair, independent, and low 
cost. 
‘‘(iii) VOLUNTARY BINDING OR NON-
BINDING PROCEDURES.—The Agency may 
establish both binding and nonbinding 
processes, which may be conducted by any 
government or private party. All parties, 
including the claimant and the Agency, 
must agree to the use of the process in a 
particular case. 
‘‘(B) CONSIDERATION
OF
INCENTIVES.— 
The Agency shall seek to develop incentives for 
claimants to participate in the alternative dis-
pute resolution process. 
‘‘(8) 
EXPEDITED
DETERMINATION
OF 
CLAIMS.— 
‘‘(A) ESTABLISHMENT
REQUIRED.—The 
Agency shall establish a procedure for expedited 
relief outside of the routine claims process es-
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tablished under paragraph (5) for claimants 
who— 
‘‘(i) allege the existence of legally 
valid and enforceable or perfected security 
interests in assets of any regulated entity 
for which the Agency has been appointed 
receiver; and 
‘‘(ii) allege that irreparable injury will 
occur if the routine claims procedure is fol-
lowed. 
‘‘(B) DETERMINATION
PERIOD.—Before 
the end of the 90-day period beginning on the 
date any claim is filed in accordance with the 
procedures established under subparagraph (A), 
the Director shall— 
‘‘(i) determine— 
‘‘(I) whether to allow or disallow 
such claim; or 
‘‘(II) whether such claim should 
be determined pursuant to the proce-
dures established under paragraph 
(5); and 
‘‘(ii) notify the claimant of the deter-
mination, and if the claim is disallowed, 
provide a statement of each reason for the 
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disallowance and the procedure for obtain-
ing agency review or judicial determina-
tion. 
‘‘(C) PERIOD FOR FILING OR RENEWING 
SUIT.—Any claimant who files a request for ex-
pedited relief shall be permitted to file a suit, 
or to continue a suit filed before the appoint-
ment of the receiver, seeking a determination of 
the rights of the claimant with respect to such 
security interest after the earlier of— 
‘‘(i) the end of the 90-day period be-
ginning on the date of the filing of a re-
quest for expedited relief; or 
‘‘(ii) the date the Agency denies the 
claim. 
‘‘(D) STATUTE
OF
LIMITATIONS.—If an 
action described under subparagraph (C) is not 
filed, or the motion to renew a previously filed 
suit is not made, before the end of the 30-day 
period beginning on the date on which such ac-
tion or motion may be filed under subparagraph 
(B), the claim shall be deemed to be disallowed 
as of the end of such period (other than any 
portion of such claim which was allowed by the 
receiver), such disallowance shall be final, and 
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the claimant shall have no further rights or 
remedies with respect to such claim. 
‘‘(E) LEGAL EFFECT OF FILING.— 
‘‘(i) 
STATUTE
OF
LIMITATION 
TOLLED.—For purposes of any applicable 
statute of limitations, the filing of a claim 
with the receiver shall constitute a com-
mencement of an action. 
‘‘(ii) NO PREJUDICE TO OTHER AC-
TIONS.—Subject to paragraph (10), the fil-
ing of a claim with the receiver shall not 
prejudice any right of the claimant to con-
tinue any action that was filed before the 
appointment of the receiver, subject to the 
determination of claims by the receiver. 
‘‘(9) PAYMENT OF CLAIMS.— 
‘‘(A) IN GENERAL.—The receiver may, in 
the discretion of the receiver, and to the extent 
funds are available from the assets of the regu-
lated entity, pay creditor claims, in such man-
ner and amounts as are authorized under this 
section, which are— 
‘‘(i) allowed by the receiver; 
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‘‘(ii) approved by the Agency pursuant 
to a final determination pursuant to para-
graph (7) or (8); or 
‘‘(iii) determined by the final judg-
ment of any court of competent jurisdic-
tion. 
‘‘(B) AGREEMENTS AGAINST THE INTER-
EST
OF
THE
AGENCY.—No agreement that 
tends to diminish or defeat the interest of the 
Agency in any asset acquired by the Agency as 
receiver under this section shall be valid against 
the Agency unless such agreement is in writing, 
and executed by an authorized official of the 
regulated entity, except that such requirements 
for qualified financial contracts shall be applied 
in a manner consistent with reasonable business 
trading practices in the financial contracts mar-
ket. 
‘‘(C) 
PAYMENT
OF
DIVIDENDS
ON 
CLAIMS.—The receiver may, in the sole discre-
tion of the receiver, pay from the assets of the 
regulated entity dividends on proved claims at 
any time, and no liability shall attach to the 
Agency, by reason of any such payment, for 
failure to pay dividends to a claimant whose 
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claim is not proved at the time of any such pay-
ment. 
‘‘(D) RULEMAKING
AUTHORITY
OF
THE 
DIRECTOR.—The Director may prescribe such 
rules, including definitions of terms, as the Di-
rector deems appropriate to establish a single 
uniform interest rate for, or to make payments 
of post-insolvency interest to creditors holding 
proven claims against the receivership estates of 
regulated entities following satisfaction by the 
receiver of the principal amount of all creditor 
claims. 
‘‘(10) SUSPENSION OF LEGAL ACTIONS.— 
‘‘(A) IN GENERAL.—After the appointment 
of a conservator or receiver for a regulated enti-
ty, the conservator or receiver may, in any judi-
cial action or proceeding to which such regu-
lated entity is or becomes a party, request a 
stay for a period not to exceed— 
‘‘(i) 45 days, in the case of any con-
servator; and 
‘‘(ii) 90 days, in the case of any re-
ceiver. 
‘‘(B) GRANT OF STAY BY ALL COURTS RE-
QUIRED.—Upon receipt of a request by any 
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conservator or receiver under subparagraph (A) 
for a stay of any judicial action or proceeding 
in any court with jurisdiction of such action or 
proceeding, the court shall grant such stay as 
to all parties. 
‘‘(11) ADDITIONAL RIGHTS AND DUTIES.— 
‘‘(A) PRIOR
FINAL
ADJUDICATION.—The 
Agency shall abide by any final unappealable 
judgment of any court of competent jurisdiction 
which was rendered before the appointment of 
the Agency as conservator or receiver. 
‘‘(B) RIGHTS AND REMEDIES OF CONSER-
VATOR OR RECEIVER.—In the event of any ap-
pealable judgment, the Agency as conservator 
or receiver shall— 
‘‘(i) have all the rights and remedies 
available to the regulated entity (before the 
appointment of such conservator or re-
ceiver) and the Agency, including removal 
to Federal court and all appellate rights; 
and 
‘‘(ii) not be required to post any bond 
in order to pursue such remedies. 
‘‘(C) NO ATTACHMENT OR EXECUTION.— 
No attachment or execution may issue by any 
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court upon assets in the possession of the re-
ceiver. 
‘‘(D) LIMITATION ON JUDICIAL REVIEW.— 
Except as otherwise provided in this subsection, 
no court shall have jurisdiction over— 
‘‘(i) any claim or action for payment 
from, or any action seeking a determina-
tion of rights with respect to, the assets of 
any regulated entity for which the Agency 
has been appointed receiver; or 
‘‘(ii) any claim relating to any act or 
omission of such regulated entity or the 
Agency as receiver. 
‘‘(E) DISPOSITION OF ASSETS.—In exer-
cising any right, power, privilege, or authority 
as conservator or receiver in connection with 
any sale or disposition of assets of a regulated 
entity for which the Agency has been appointed 
conservator or receiver, the Agency shall con-
duct its operations in a manner which main-
tains stability in the housing finance markets 
and, to the extent consistent with that goal— 
‘‘(i) maximizes the net present value 
return from the sale or disposition of such 
assets; 
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‘‘(ii) minimizes the amount of any loss 
realized in the resolution of cases; and 
‘‘(iii) ensures adequate competition 
and fair and consistent treatment of 
offerors. 
‘‘(12) STATUTE OF LIMITATIONS FOR ACTIONS 
BROUGHT BY CONSERVATOR OR RECEIVER.— 
‘‘(A) IN GENERAL.—Notwithstanding any 
provision of any contract, the applicable statute 
of limitations with regard to any action brought 
by the Agency as conservator or receiver shall 
be— 
‘‘(i) in the case of any contract claim, 
the longer of— 
‘‘(I) the 6-year period beginning 
on the date the claim accrues; or 
‘‘(II) the period applicable under 
State law; and 
‘‘(ii) in the case of any tort claim, the 
longer of— 
‘‘(I) the 3-year period beginning 
on the date the claim accrues; or 
‘‘(II) the period applicable under 
State law. 
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‘‘(B) DETERMINATION OF THE DATE ON 
WHICH
A
CLAIM
ACCRUES.—For purposes of 
subparagraph (A), the date on which the stat-
ute of limitations begins to run on any claim 
described in such subparagraph shall be the 
later of— 
‘‘(i) the date of the appointment of 
the Agency as conservator or receiver; or 
‘‘(ii) the date on which the cause of 
action accrues. 
‘‘(13) REVIVAL OF EXPIRED STATE CAUSES OF 
ACTION.— 
‘‘(A) IN GENERAL.—In the case of any tort 
claim described under subparagraph (B) for 
which the statute of limitations applicable 
under State law with respect to such claim has 
expired not more than 5 years before the ap-
pointment of the Agency as conservator or re-
ceiver, the Agency may bring an action as con-
servator or receiver on such claim without re-
gard to the expiration of the statute of limita-
tion applicable under State law. 
‘‘(B) CLAIMS
DESCRIBED.—A tort claim 
referred to under subparagraph (A) is a claim 
arising from fraud, intentional misconduct re-
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sulting in unjust enrichment, or intentional mis-
conduct resulting in substantial loss to the reg-
ulated entity. 
‘‘(14) ACCOUNTING AND RECORDKEEPING RE-
QUIREMENTS.— 
‘‘(A) IN GENERAL.—The Agency as conser-
vator or receiver shall, consistent with the ac-
counting and reporting practices and proce-
dures established by the Agency, maintain a full 
accounting of each conservatorship and receiv-
ership or other disposition of a regulated entity 
in default. 
‘‘(B) ANNUAL ACCOUNTING OR REPORT.— 
With respect to each conservatorship or receiv-
ership, the Agency shall make an annual ac-
counting or report available to the Board, the 
Comptroller General of the United States, the 
Committee on Banking, Housing, and Urban 
Affairs of the Senate, and the Committee on 
Financial Services of the House of Representa-
tives. 
‘‘(C) AVAILABILITY OF REPORTS.—Any re-
port prepared under subparagraph (B) shall be 
made available by the Agency upon request to 
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any shareholder of a regulated entity or any 
member of the public. 
‘‘(D) RECORDKEEPING
REQUIREMENT.— 
After the end of the 6-year period beginning on 
the date that the conservatorship or receiver-
ship is terminated by the Director, the Agency 
may destroy any records of such regulated enti-
ty which the Agency, in the discretion of the 
Agency, determines to be unnecessary unless di-
rected not to do so by a court of competent ju-
risdiction or governmental agency, or prohibited 
by law. 
‘‘(15) FRAUDULENT TRANSFERS.— 
‘‘(A) IN GENERAL.—The Agency, as con-
servator or receiver, may avoid a transfer of 
any interest of a regulated entity-affiliated 
party, or any person who the conservator or re-
ceiver determines is a debtor of the regulated 
entity, in property, or any obligation incurred 
by such party or person, that was made within 
5 years of the date on which the Agency was 
appointed conservator or receiver, if such party 
or person voluntarily or involuntarily made such 
transfer or incurred such liability with the in-
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tent to hinder, delay, or defraud the regulated 
entity, the Agency, the conservator, or receiver. 
‘‘(B) RIGHT OF RECOVERY.—To the extent 
a transfer is avoided under subparagraph (A), 
the conservator or receiver may recover, for the 
benefit of the regulated entity, the property 
transferred, or, if a court so orders, the value 
of such property (at the time of such transfer) 
from— 
‘‘(i) the initial transferee of such 
transfer or the regulated entity-affiliated 
party or person for whose benefit such 
transfer was made; or 
‘‘(ii) any immediate or mediate trans-
feree of any such initial transferee. 
‘‘(C) RIGHTS OF TRANSFEREE OR OBLI-
GEE.—The conservator or receiver may not re-
cover under subparagraph (B) from— 
‘‘(i) any transferee that takes for 
value, including satisfaction or securing of 
a present or antecedent debt, in good faith; 
or 
‘‘(ii) any immediate or mediate good 
faith transferee of such transferee. 
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‘‘(D) RIGHTS UNDER THIS PARAGRAPH.— 
The rights under this paragraph of the conser-
vator or receiver described under subparagraph 
(A) shall be superior to any rights of a trustee 
or any other party (other than any party which 
is a Federal agency) under title 11, United 
States Code. 
‘‘(16) ATTACHMENT OF ASSETS AND OTHER IN-
JUNCTIVE RELIEF.—Subject to paragraph (17), any 
court of competent jurisdiction may, at the request 
of the conservator or receiver, issue an order in ac-
cordance with Rule 65 of the Federal Rules of Civil 
Procedure, including an order placing the assets of 
any person designated by the Agency or such conser-
vator under the control of the court, and appointing 
a trustee to hold such assets. 
‘‘(17) STANDARDS OF PROOF.—Rule 65 of the 
Federal Rules of Civil Procedure shall apply with re-
spect to any proceeding under paragraph (16) with-
out regard to the requirement of such rule that the 
applicant show that the injury, loss, or damage is ir-
reparable and immediate. 
‘‘(18) TREATMENT OF CLAIMS ARISING FROM 
BREACH
OF
CONTRACTS
EXECUTED
BY
THE
RE-
CEIVER OR CONSERVATOR.— 
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‘‘(A) IN GENERAL.—Notwithstanding any 
other provision of this subsection, any final and 
unappealable judgment for monetary damages 
entered against a receiver or conservator for the 
breach of an agreement executed or approved in 
writing by such receiver or conservator after the 
date of its appointment, shall be paid as an ad-
ministrative expense of the receiver or conser-
vator. 
‘‘(B) NO LIMITATION OF POWER.—Nothing 
in this paragraph shall be construed to limit the 
power of a receiver or conservator to exercise 
any rights under contract or law, including to 
terminate, breach, cancel, or otherwise dis-
continue such agreement. 
‘‘(19) GENERAL EXCEPTIONS.— 
‘‘(A) LIMITATIONS.—The rights of a con-
servator or receiver appointed under this section 
shall be subject to the limitations on the powers 
of a receiver under sections 402 through 407 of 
the Federal Deposit Insurance Corporation Im-
provement Act of 1991 (12 U.S.C. 4402 
through 4407). 
‘‘(B) MORTGAGES HELD IN TRUST.— 
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‘‘(i) IN
GENERAL.—Any mortgage, 
pool of mortgages, or interest in a pool of 
mortgages, held in trust, custodial, or 
agency capacity by a regulated entity for 
the benefit of persons other than the regu-
lated entity shall not be available to satisfy 
the claims of creditors generally. 
‘‘(ii) HOLDING OF MORTGAGES.—Any 
mortgage, pool of mortgages, or interest in 
a pool of mortgages, described under 
clause (i) shall be held by the conservator 
or receiver appointed under this section for 
the beneficial owners of such mortgage, 
pool of mortgages, or interest in a pool of 
mortgages in accordance with the terms of 
the agreement creating such trust, custo-
dial, or other agency arrangement. 
‘‘(iii) LIABILITY OF RECEIVER.—The 
liability of a receiver appointed under this 
section for damages shall, in the case of 
any contingent or unliquidated claim relat-
ing to the mortgages held in trust, be esti-
mated in accordance set forth in the regu-
lations of the Director. 
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‘‘(c) PRIORITY
OF EXPENSES
AND UNSECURED 
CLAIMS.— 
‘‘(1) IN GENERAL.—Unsecured claims against a 
regulated entity, or a receiver, that are proven to the 
satisfaction of the receiver shall have priority in the 
following order: 
‘‘(A) Administrative expenses of the re-
ceiver. 
‘‘(B) Any other general or senior liability 
of the regulated entity and claims of other Fed-
eral home loan banks arising from their pay-
ment obligations (including joint and several 
payment obligations). 
‘‘(C) Any obligation subordinated to gen-
eral creditors. 
‘‘(D) Any obligation to shareholders or 
members arising as a result of their status as 
shareholder or members. 
‘‘(2) CREDITORS
SIMILARLY
SITUATED.—All 
creditors that are similarly situated under paragraph 
(1) shall be treated in a similar manner, except that 
the Agency may make such other payments to credi-
tors necessary to maximize the present value return 
from the sale or disposition or such regulated enti-
ty’s assets or to minimize the amount of any loss re-
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308 
alized in the resolution of cases so long as all credi-
tors similarly situated receive not less than the 
amount provided under subsection (e)(2). 
‘‘(3) DEFINITION.—The term ‘administrative 
expenses of the receiver’ shall include the actual, 
necessary costs and expenses incurred by the re-
ceiver in preserving the assets of the regulated entity 
or liquidating or otherwise resolving the affairs of 
the regulated entity. Such expenses shall include ob-
ligations that are incurred by the receiver after ap-
pointment as receiver that the Director determines 
are necessary and appropriate to facilitate the 
smooth and orderly liquidation or other resolution of 
the regulated entity. 
‘‘(d) PROVISIONS RELATING
TO CONTRACTS EN-
TERED INTO BEFORE APPOINTMENT OF CONSERVATOR 
OR RECEIVER.— 
‘‘(1) AUTHORITY TO REPUDIATE CONTRACTS.— 
In addition to any other rights a conservator or re-
ceiver may have, the conservator or receiver for any 
regulated entity may disaffirm or repudiate any con-
tract or lease— 
‘‘(A) to which such regulated entity is a 
party; 
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‘‘(B) the performance of which the conser-
vator or receiver, in its sole discretion, deter-
mines to be burdensome; and 
‘‘(C) the disaffirmance or repudiation of 
which the conservator or receiver determines, in 
its sole discretion, will promote the orderly ad-
ministration of the affairs of the regulated enti-
ty. 
‘‘(2) TIMING
OF
REPUDIATION.—The conser-
vator or receiver shall determine whether or not to 
exercise the rights of repudiation under this sub-
section within a reasonable period following such ap-
pointment. 
‘‘(3) CLAIMS
FOR
DAMAGES
FOR
REPUDI-
ATION.— 
‘‘(A) IN GENERAL.—Except as otherwise 
provided under subparagraph (C) and para-
graphs (4), (5), and (6), the liability of the con-
servator or receiver for the disaffirmance or re-
pudiation of any contract pursuant to para-
graph (1) shall be— 
‘‘(i) limited to actual direct compen-
satory damages; and 
‘‘(ii) determined as of— 
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‘‘(I) the date of the appointment 
of the conservator or receiver; or 
‘‘(II) in the case of any contract 
or agreement referred to in paragraph 
(8), the date of the disaffirmance or 
repudiation of such contract or agree-
ment. 
‘‘(B) NO
LIABILITY
FOR
OTHER
DAM-
AGES.—For purposes of subparagraph (A), the 
term ‘actual direct compensatory damages’ shall 
not include— 
‘‘(i) punitive or exemplary damages; 
‘‘(ii) damages for lost profits or op-
portunity; or 
‘‘(iii) damages for pain and suffering. 
‘‘(C) MEASURE OF DAMAGES FOR REPUDI-
ATION OF FINANCIAL CONTRACTS.—In the case 
of any qualified financial contract or agreement 
to which paragraph (8) applies, compensatory 
damages shall be— 
‘‘(i) deemed to include normal and 
reasonable costs of cover or other reason-
able measures of damages utilized in the 
industries for such contract and agreement 
claims; and 
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‘‘(ii) paid in accordance with this sub-
section and subsection (e), except as other-
wise specifically provided in this section. 
‘‘(4) LEASES UNDER WHICH THE REGULATED 
ENTITY IS THE LESSEE.— 
‘‘(A) IN GENERAL.—If the conservator or 
receiver disaffirms or repudiates a lease under 
which the regulated entity was the lessee, the 
conservator or receiver shall not be liable for 
any damages (other than damages determined 
under subparagraph (B)) for the disaffirmance 
or repudiation of such lease. 
‘‘(B) 
PAYMENTS
OF
RENT.—Notwith-
standing subparagraph (A), the lessor under a 
lease to which that subparagraph applies 
shall— 
‘‘(i) be entitled to the contractual rent 
accruing before the later of the date— 
‘‘(I) the notice of disaffirmance 
or repudiation is mailed; or 
‘‘(II) the disaffirmance or repudi-
ation becomes effective, unless the les-
sor is in default or breach of the 
terms of the lease; 
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‘‘(ii) have no claim for damages under 
any acceleration clause or other penalty 
provision in the lease; and 
‘‘(iii) have a claim for any unpaid 
rent, subject to all appropriate offsets and 
defenses, due as of the date of the appoint-
ment, which shall be paid in accordance 
with this subsection and subsection (e). 
‘‘(5) LEASES UNDER WHICH THE REGULATED 
ENTITY IS THE LESSOR.— 
‘‘(A) IN GENERAL.—If the conservator or 
receiver repudiates an unexpired written lease 
of real property of the regulated entity under 
which the regulated entity is the lessor and the 
lessee is not, as of the date of such repudiation, 
in default, the lessee under such lease may ei-
ther— 
‘‘(i) treat the lease as terminated by 
such repudiation; or 
‘‘(ii) remain in possession of the lease-
hold interest for the balance of the term of 
the lease, unless the lessee defaults under 
the terms of the lease after the date of 
such repudiation. 
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‘‘(B) PROVISIONS APPLICABLE TO LESSEE 
REMAINING
IN
POSSESSION.—If any lessee 
under a lease described under subparagraph (A) 
remains in possession of a leasehold interest 
under clause (ii) of such subparagraph— 
‘‘(i) the lessee— 
‘‘(I) shall continue to pay the 
contractual rent pursuant to the 
terms of the lease after the date of 
the repudiation of such lease; and 
‘‘(II) may offset against any rent 
payment which accrues after the date 
of the repudiation of the lease, and 
any damages which accrue after such 
date due to the nonperformance of 
any obligation of the regulated entity 
under the lease after such date; and 
‘‘(ii) the conservator or receiver shall 
not be liable to the lessee for any damages 
arising after such date as a result of the 
repudiation other than the amount of any 
offset allowed under clause (i)(II). 
‘‘(6) CONTRACTS
FOR
THE
SALE
OF
REAL 
PROPERTY.— 
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‘‘(A) IN GENERAL.—If the conservator or 
receiver repudiates any contract for the sale of 
real property and the purchaser of such real 
property under such contract is in possession, 
and is not, as of the date of such repudiation, 
in default, such purchaser may either— 
‘‘(i) treat the contract as terminated 
by such repudiation; or 
‘‘(ii) remain in possession of such real 
property. 
‘‘(B) PROVISIONS
APPLICABLE
TO
PUR-
CHASER
REMAINING
IN
POSSESSION.—If any 
purchaser of real property under any contract 
described under subparagraph (A) remains in 
possession of such property under clause (ii) of 
such subparagraph— 
‘‘(i) the purchaser— 
‘‘(I) shall continue to make all 
payments due under the contract after 
the date of the repudiation of the con-
tract; and 
‘‘(II) may offset against any such 
payments any damages which accrue 
after such date due to the non-
performance (after such date) of any 
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obligation of the regulated entity 
under the contract; and 
‘‘(ii) 
the 
conservator 
or 
receiver 
shall— 
‘‘(I) not be liable to the pur-
chaser for any damages arising after 
such date as a result of the repudi-
ation other than the amount of any 
offset allowed under clause (i)(II); 
‘‘(II) deliver title to the pur-
chaser in accordance with the provi-
sions of the contract; and 
‘‘(III) have no obligation under 
the contract other than the perform-
ance required under subclause (II). 
‘‘(C) ASSIGNMENT AND SALE ALLOWED.— 
‘‘(i) IN
GENERAL.—No provision of 
this paragraph shall be construed as lim-
iting the right of the conservator or re-
ceiver to assign the contract described 
under subparagraph (A), and sell the prop-
erty subject to the contract and the provi-
sions of this paragraph. 
‘‘(ii) NO
LIABILITY
AFTER
ASSIGN-
MENT AND SALE.—If an assignment and 
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sale described under clause (i) is con-
summated, the conservator or receiver 
shall have no further liability under the 
contract described under subparagraph 
(A), or with respect to the real property 
which was the subject of such contract. 
‘‘(7) PROVISIONS APPLICABLE TO SERVICE CON-
TRACTS.— 
‘‘(A) SERVICES PERFORMED BEFORE AP-
POINTMENT.—In the case of any contract for 
services between any person and any regulated 
entity for which the Agency has been appointed 
conservator or receiver, any claim of such per-
son for services performed before the appoint-
ment of the conservator or the receiver shall 
be— 
‘‘(i) a claim to be paid in accordance 
with subsections (b) and (e); and 
‘‘(ii) deemed to have arisen as of the 
date the conservator or receiver was ap-
pointed. 
‘‘(B) SERVICES
PERFORMED
AFTER
AP-
POINTMENT AND PRIOR TO REPUDIATION.—If, 
in the case of any contract for services de-
scribed under subparagraph (A), the conser-
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317 
vator or receiver accepts performance by the 
other person before the conservator or receiver 
makes any determination to exercise the right 
of repudiation of such contract under this sec-
tion— 
‘‘(i) the other party shall be paid 
under the terms of the contract for the 
services performed; and 
‘‘(ii) the amount of such payment 
shall be treated as an administrative ex-
pense of the conservatorship or receiver-
ship. 
‘‘(C) ACCEPTANCE OF PERFORMANCE NO 
BAR TO SUBSEQUENT REPUDIATION.—The ac-
ceptance by any conservator or receiver of serv-
ices referred to under subparagraph (B) in con-
nection with a contract described in such sub-
paragraph shall not affect the right of the con-
servator or receiver to repudiate such contract 
under this section at any time after such per-
formance. 
‘‘(8) CERTAIN
QUALIFIED
FINANCIAL
CON-
TRACTS.— 
‘‘(A) 
RIGHTS
OF
PARTIES
TO
CON-
TRACTS.—Subject to paragraphs (9) and (10) 
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318 
and notwithstanding any other provision of this 
Act, any other Federal law, or the law of any 
State, no person shall be stayed or prohibited 
from exercising— 
‘‘(i) any right such person has to 
cause the termination, liquidation, or accel-
eration of any qualified financial contract 
with a regulated entity that arises upon 
the appointment of the Agency as receiver 
for such regulated entity at any time after 
such appointment; 
‘‘(ii) any right under any security 
agreement or arrangement or other credit 
enhancement relating to one or more quali-
fied financial contracts described in clause 
(i); or 
‘‘(iii) any right to offset or net out 
any termination value, payment amount, or 
other transfer obligation arising under or 
in connection with 1 or more contracts and 
agreements described in clause (i), includ-
ing any master agreement for such con-
tracts or agreements. 
‘‘(B) APPLICABILITY
OF
OTHER
PROVI-
SIONS.—Paragraph (10) of subsection (b) shall 
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319 
apply in the case of any judicial action or pro-
ceeding brought against any receiver referred to 
under subparagraph (A), or the regulated entity 
for which such receiver was appointed, by any 
party to a contract or agreement described 
under subparagraph (A)(i) with such regulated 
entity. 
‘‘(C) CERTAIN
TRANSFERS
NOT
AVOID-
ABLE.— 
‘‘(i) IN
GENERAL.—Notwithstanding 
paragraph (11) or any other Federal or 
State laws relating to the avoidance of 
preferential or fraudulent transfers, the 
Agency, whether acting as such or as con-
servator or receiver of a regulated entity, 
may not avoid any transfer of money or 
other property in connection with any 
qualified financial contract with a regu-
lated entity. 
‘‘(ii) 
EXCEPTION
FOR
CERTAIN 
TRANSFERS.—Clause (i) shall not apply to 
any transfer of money or other property in 
connection with any qualified financial con-
tract with a regulated entity if the Agency 
determines that the transferee had actual 
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intent to hinder, delay, or defraud such 
regulated entity, the creditors of such reg-
ulated entity, or any conservator or re-
ceiver appointed for such regulated entity. 
‘‘(D) CERTAIN
CONTRACTS
AND
AGREE-
MENTS DEFINED.—In this subsection: 
‘‘(i) 
QUALIFIED
FINANCIAL
CON-
TRACT.—The term ‘qualified financial con-
tract’ means any securities contract, com-
modity contract, forward contract, repur-
chase agreement, swap agreement, and any 
similar agreement that the Agency deter-
mines by regulation, resolution, or order to 
be a qualified financial contract for pur-
poses of this paragraph. 
‘‘(ii) SECURITIES
CONTRACT.—The 
term ‘securities contract’— 
‘‘(I) means a contract for the 
purchase, sale, or loan of a security, a 
certificate of deposit, a mortgage loan, 
or any interest in a mortgage loan, a 
group or index of securities, certifi-
cates of deposit, or mortgage loans or 
interests therein (including any inter-
est therein or based on the value 
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thereof) or any option on any of the 
foregoing, including any option to 
purchase or sell any such security, 
certificate of deposit, mortgage loan, 
interest, group or index, or option, 
and including any repurchase or re-
verse repurchase transaction on any 
such security, certificate of deposit, 
mortgage loan, interest, group or 
index, or option; 
‘‘(II) does not include any pur-
chase, sale, or repurchase obligation 
under a participation in a commercial 
mortgage loan unless the Agency de-
termines by regulation, resolution, or 
order to include any such agreement 
within the meaning of such term; 
‘‘(III) means any option entered 
into on a national securities exchange 
relating to foreign currencies; 
‘‘(IV) means the guarantee by or 
to any securities clearing agency of 
any settlement of cash, securities, cer-
tificates of deposit, mortgage loans or 
interests therein, group or index of se-
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curities, certificates of deposit, or 
mortgage loans or interests therein 
(including any interest therein or 
based on the value thereof) or option 
on any of the foregoing, including any 
option to purchase or sell any such se-
curity, certificate of deposit, mortgage 
loan, interest, group or index, or op-
tion; 
‘‘(V) means any margin loan; 
‘‘(VI) means any other agree-
ment or transaction that is similar to 
any agreement or transaction referred 
to in this clause; 
‘‘(VII) means any combination of 
the agreements or transactions re-
ferred to in this clause; 
‘‘(VIII) means any option to 
enter into any agreement or trans-
action referred to in this clause; 
‘‘(IX) means a master agreement 
that provides for an agreement or 
transaction referred to in subclause 
(I), (III), (IV), (V), (VI), (VII), or 
(VIII), together with all supplements 
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to any such master agreement, with-
out regard to whether the master 
agreement provides for an agreement 
or transaction that is not a securities 
contract under this clause, except that 
the master agreement shall be consid-
ered to be a securities contract under 
this clause only with respect to each 
agreement or transaction under the 
master agreement that is referred to 
in subclause (I), (III), (IV), (V), (VI), 
(VII), or (VIII); and 
‘‘(X) means any security agree-
ment or arrangement or other credit 
enhancement related to any agree-
ment or transaction referred to in this 
clause, including any guarantee or re-
imbursement obligation in connection 
with any agreement or transaction re-
ferred to in this clause. 
‘‘(iii) COMMODITY
CONTRACT.—The 
term ‘commodity contract’ means— 
‘‘(I) with respect to a futures 
commission merchant, a contract for 
the purchase or sale of a commodity 
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for future delivery on, or subject to 
the rules of, a contract market or 
board of trade; 
‘‘(II) with respect to a foreign fu-
tures commission merchant, a foreign 
future; 
‘‘(III) with respect to a leverage 
transaction 
merchant, 
a 
leverage 
transaction; 
‘‘(IV) with respect to a clearing 
organization, a contract for the pur-
chase or sale of a commodity for fu-
ture delivery on, or subject to the 
rules of, a contract market or board 
of trade that is cleared by such clear-
ing organization, or commodity option 
traded on, or subject to the rules of, 
a contract market or board of trade 
that is cleared by such clearing orga-
nization; 
‘‘(V) with respect to a commodity 
options dealer, a commodity option; 
‘‘(VI) any other agreement or 
transaction that is similar to any 
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