163 
form Act of 2008), and any amounts remaining 
from assessments on the Federal Home Loan banks 
pursuant to section 18(b) of the Federal Home Loan 
Bank Act (12 U.S.C. 1438(b)), shall, upon such ef-
fective date, be treated for purposes of this sub-
section as amounts received from assessments under 
this section. 
‘‘(6) TREASURY INVESTMENTS.— 
‘‘(A) AUTHORITY.—The Director may re-
quest the Secretary of the Treasury to invest 
such portions of amount received by the Direc-
tor from assessments paid under this section 
that, in the Director’s discretion, are not re-
quired to meet the current working needs of the 
Agency. 
‘‘(B) GOVERNMENT OBLIGATIONS.—Pursu-
ant to a request under subparagraph (A), the 
Secretary of the Treasury shall invest such 
amounts in government obligations guaranteed 
as to principal and interest by the United 
States with maturities suitable to the needs of 
Agency and bearing interest at a rate deter-
mined by the Secretary of the Treasury taking 
into consideration current market yields on out-
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164 
standing marketable obligations of the United 
States of comparable maturity. 
‘‘(g) BUDGET AND FINANCIAL MANAGEMENT.— 
‘‘(1) FINANCIAL OPERATING PLANS AND FORE-
CASTS.—The Director shall provide to the Director 
of the Office of Management and Budget copies of 
the Director’s financial operating plans and fore-
casts as prepared by the Director in the ordinary 
course of the Agency’s operations, and copies of the 
quarterly reports of the Agency’s financial condition 
and results of operations as prepared by the Direc-
tor in the ordinary course of the Agency’s oper-
ations. 
‘‘(2) FINANCIAL
STATEMENTS.—The Agency 
shall prepare annually a statement of assets and li-
abilities and surplus or deficit; a statement of in-
come and expenses; and a statement of sources and 
application of funds. 
‘‘(3) FINANCIAL MANAGEMENT SYSTEMS.—The 
Agency shall implement and maintain financial man-
agement systems that comply substantially with 
Federal financial management systems require-
ments, applicable Federal accounting standards, and 
that uses a general ledger system that accounts for 
activity at the transaction level. 
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165 
‘‘(4) ASSERTION
OF
INTERNAL
CONTROLS.— 
The Director shall provide to the Comptroller Gen-
eral an assertion as to the effectiveness of the inter-
nal controls that apply to financial reporting by the 
Agency, using the standards established in section 
3512(c) of title 31, United States Code. 
‘‘(5) RULE
OF
CONSTRUCTION.—This sub-
section may not be construed as implying any obliga-
tion on the part of the Director to consult with or 
obtain the consent or approval of the Director of the 
Office of Management and Budget with respect to 
any reports, plans, forecasts, or other information 
referred to in paragraph (1) or any jurisdiction or 
oversight over the affairs or operations of the Agen-
cy. 
‘‘(h) AUDIT OF AGENCY.— 
‘‘(1) IN GENERAL.—The Comptroller General 
shall annually audit the financial transactions of the 
Agency in accordance with the U.S. generally accept-
ed government auditing standards as may be pre-
scribed by the Comptroller General of the United 
States. The audit shall be conducted at the place or 
places where accounts of the Agency are normally 
kept. The representatives of the Government Ac-
countability Office shall have access to the personnel 
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166 
and to all books, accounts, documents, papers, 
records (including electronic records), reports, files, 
and all other papers, automated data, things, or 
property belonging to or under the control of or used 
or employed by the Agency pertaining to its financial 
transactions and necessary to facilitate the audit, 
and such representatives shall be afforded full facili-
ties for verifying transactions with the balances or 
securities held by depositories, fiscal agents, and 
custodians. All such books, accounts, documents, 
records, reports, files, papers, and property of the 
Agency shall remain in possession and custody of 
the Agency. The Comptroller General may obtain 
and duplicate any such books, accounts, documents, 
records, working papers, automated data and files, 
or other information relevant to such audit without 
cost to the Comptroller General and the Comptroller 
General’s right of access to such information shall 
be enforceable pursuant to section 716(c) of title 31, 
United States Code. 
‘‘(2) REPORT.—The Comptroller General shall 
submit to the Congress a report of each annual 
audit conducted under this subsection. The report to 
the Congress shall set forth the scope of the audit 
and shall include the statement of assets and liabil-
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167 
ities and surplus or deficit, the statement of income 
and expenses, the statement of sources and applica-
tion of funds, and such comments and information 
as may be deemed necessary to inform Congress of 
the financial operations and condition of the Agency, 
together with such recommendations with respect 
thereto as the Comptroller General may deem advis-
able. A copy of each report shall be furnished to the 
President and to the Agency at the time submitted 
to the Congress. 
‘‘(3) ASSISTANCE AND COSTS.—For the purpose 
of conducting an audit under this subsection, the 
Comptroller General may, in the discretion of the 
Comptroller General, employ by contract, without re-
gard to section 5 of title 41, United States Code, 
professional services of firms and organizations of 
certified public accountants for temporary periods or 
for special purposes. Upon the request of the Comp-
troller General, the Director of the Agency shall 
transfer to the Government Accountability Office 
from funds available, the amount requested by the 
Comptroller General to cover the full costs of any 
audit and report conducted by the Comptroller Gen-
eral. The Comptroller General shall credit funds 
transferred to the account established for salaries 
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168 
and expenses of the Government Accountability Of-
fice, and such amount shall be available upon receipt 
and without fiscal year limitation to cover the full 
costs of the audit and report.’’. 
SEC. 1017. EXAMINERS AND ACCOUNTANTS. 
(a) EXAMINATIONS.—Section 1317 of the Housing 
and Community Development Act of 1992 (12 U.S.C. 
4517) is amended— 
(1) in subsection (a), by adding after the period 
at the end the following: ‘‘Each examination under 
this subsection of a regulated entity shall include a 
review of the procedures required to be established 
and maintained by the regulated entity pursuant to 
section 1314(c) (relating to fraudulent financial 
transactions) and the report regarding each such ex-
amination shall describe any problems with such 
procedures maintained by the regulated entity.’’; 
(2) in subsection (b)— 
(A) by inserting ‘‘of a regulated entity’’ 
after ‘‘under this section’’; and 
(B) by striking ‘‘to determine the condition 
of an enterprise for the purpose of ensuring its 
financial safety and soundness’’ and inserting 
‘‘or appropriate’’; and 
(3) in subsection (c)— 
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(A) in the second sentence, by inserting 
‘‘to conduct examinations under this section’’ 
before the period; and 
(B) in the third sentence, by striking 
‘‘from amounts available in the Federal Hous-
ing Enterprises Oversight Fund’’. 
(b) ENHANCED AUTHORITY TO HIRE EXAMINERS 
AND ACCOUNTANTS.—Section 1317 of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4517) 
is amended by adding at the end the following new sub-
section: 
‘‘(g) APPOINTMENT OF ACCOUNTANTS, ECONOMISTS, 
SPECIALISTS, AND EXAMINERS.— 
‘‘(1) APPLICABILITY.—This section applies with 
respect to any position of examiner, accountant, spe-
cialist in financial markets, specialist in information 
technology, and economist at the Agency, with re-
spect to supervision and regulation of the regulated 
entities, that is in the competitive service. 
‘‘(2) APPOINTMENT AUTHORITY.—The Director 
may appoint candidates to any position described in 
paragraph (1)— 
‘‘(A) in accordance with the statutes, rules, 
and regulations governing appointments in the 
excepted service; and 
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170 
‘‘(B) notwithstanding any statutes, rules, 
and regulations governing appointments in the 
competitive service. 
‘‘(3) RULE OF CONSTRUCTION.—The appoint-
ment of a candidate to a position under the author-
ity of this subsection shall not be considered to 
cause such position to be converted from the com-
petitive service to the excepted service.’’. 
(c) REPEAL.—Section 20 of the Federal Home Loan 
Bank Act (12 U.S.C. 1440) is amended— 
(1) by striking the section heading and insert-
ing the following: ‘‘EXAMINATIONS
AND
GAO
AU-
DITS’’; 
(2) in the third sentence, by striking ‘‘the 
Board and’’ each place such term appears; and 
(3) by striking the first two sentences and in-
serting the following: ‘‘The Federal home loan banks 
shall be subject to examinations by the Director to 
the extent provided in section 1317 of the Federal 
Housing Enterprises Financial Safety and Sound-
ness Act of 1992 (12 U.S.C. 4517).’’. 
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171 
SEC. 1018. PROHIBITION AND WITHHOLDING OF EXECU-
TIVE COMPENSATION. 
(a) IN GENERAL.—Section 1318 of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4518) 
is amended— 
(1) in the section heading, by striking ‘‘OF EX-
CESSIVE’’ and inserting ‘‘AND WITHHOLDING OF 
EXECUTIVE’’; 
(2) by redesignating subsection (b) as sub-
section (d); and 
(3) by inserting after subsection (a) the fol-
lowing new subsections: 
‘‘(b) FACTORS.—In making any determination under 
subsection (a), the Director may take into consideration 
any factors the Director considers relevant, including any 
wrongdoing on the part of the executive officer, and such 
wrongdoing shall include any fraudulent act or omission, 
breach of trust or fiduciary duty, violation of law, rule, 
regulation, order, or written agreement, and insider abuse 
with respect to the regulated entity. The approval of an 
agreement or contract pursuant to section 309(d)(3)(B) 
of the Federal National Mortgage Association Charter Act 
(12 U.S.C. 1723a(d)(3)(B)) or section 303(h)(2) of the 
Federal Home Loan Mortgage Corporation Act (12 U.S.C. 
1452(h)(2)) shall not preclude the Director from making 
any subsequent determination under subsection (a). 
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172 
‘‘(c) WITHHOLDING
OF COMPENSATION.—In car-
rying out subsection (a), the Director may require a regu-
lated entity to withhold any payment, transfer, or dis-
bursement of compensation to an executive officer, or to 
place such compensation in an escrow account, during the 
review of the reasonableness and comparability of com-
pensation.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) FANNIE MAE.—Section 309(d) of the Fed-
eral National Mortgage Association Charter Act (12 
U.S.C. 1723a(d)) is amended by adding at the end 
the following new paragraph: 
‘‘(4) Notwithstanding any other provision of this sec-
tion, the corporation shall not transfer, disburse, or pay 
compensation to any executive officer, or enter into an 
agreement with such executive officer, without the ap-
proval of the Director, for matters being reviewed under 
section 1318 of the Federal Housing Enterprises Finan-
cial Safety and Soundness Act of 1992 (12 U.S.C. 
4518).’’. 
(2) FREDDIE MAC.—Section 303(h) of the Fed-
eral Home Loan Mortgage Corporation Act (12 
U.S.C. 1452(h)) is amended by adding at the end 
the following new paragraph: 
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173 
‘‘(4) Notwithstanding any other provision of this sec-
tion, the Corporation shall not transfer, disburse, or pay 
compensation to any executive officer, or enter into an 
agreement with such executive officer, without the ap-
proval of the Director, for matters being reviewed under 
section 1318 of the Federal Housing Enterprises Finan-
cial Safety and Soundness Act of 1992 (12 U.S.C. 
4518).’’. 
(3) FEDERAL HOME LOAN BANKS.—Section 7 
of the Federal Home Loan Bank Act (12 U.S.C. 
1427) is amended by adding at the end the following 
new subsection: 
‘‘(l) WITHHOLDING
OF COMPENSATION.—Notwith-
standing any other provision of this section, a Federal 
home loan bank shall not transfer, disburse, or pay com-
pensation to any executive officer, or enter into an agree-
ment with such executive officer, without the approval of 
the Director, for matters being reviewed under section 
1318 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4518).’’. 
SEC. 1019. REVIEWS OF REGULATED ENTITIES. 
Section 1319 of the Housing and Community Devel-
opment Act of 1992 (12 U.S.C. 4519) is amended— 
(1) by striking the section designation and 
heading and inserting the following: 
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174 
‘‘SEC. 1319. REVIEWS OF REGULATED ENTITIES.’’; 
and 
(2) by striking ‘‘is a nationally recognized’’ and 
all that follows through ‘‘1934’’ and inserting the 
following: ‘‘the Director considers appropriate, in-
cluding an entity that is registered under section 15 
of the Securities Exchange Act of 1934 (15 U.S.C. 
78a) as a nationally registered statistical rating or-
ganization’’. 
SEC. 1020. REGULATIONS AND ORDERS. 
Section 1319G of the Housing and Community De-
velopment Act of 1992 (12 U.S.C. 4526) is amended— 
(1) by striking subsection (a) and inserting the 
following new subsection: 
‘‘(a) AUTHORITY.—The Director shall issue any reg-
ulations, guidelines, and orders necessary to carry out the 
duties of the Director under this title and each of the au-
thorizing statutes to ensure that the purposes of this title 
and such statutes are accomplished.’’; 
(2) in subsection (b), by inserting ‘‘, this title, 
or any of the authorizing statutes’’ after ‘‘under this 
section’’; and 
(3) by striking subsection (c). 
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175 
SEC. 1021. NON-WAIVER OF PRIVILEGES. 
Part 1 of subtitle A of title XIII of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4511) 
is amended by adding at the end the following new section: 
‘‘SEC. 1319H. PRIVILEGES NOT AFFECTED BY DISCLOSURE. 
‘‘(a) IN GENERAL.—The submission by any person 
of any information to the Agency for any purpose in the 
course of any supervisory or regulatory process of the 
Agency shall not be construed as waiving, destroying, or 
otherwise affecting any privilege such person may claim 
with respect to such information under Federal or State 
law as to any person or entity other than the Agency. 
‘‘(b) RULE OF CONSTRUCTION.—No provision of sub-
section (a) may be construed as implying or establishing 
that— 
‘‘(1) any person waives any privilege applicable 
to information that is submitted or transferred 
under any circumstance to which subsection (a) does 
not apply; or 
‘‘(2) any person would waive any privilege ap-
plicable to any information by submitting the infor-
mation to the Agency, but for this subsection.’’. 
SEC. 1022. RISK-BASED CAPITAL REQUIREMENTS. 
(a) IN GENERAL.—Section 1361 of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4611) 
is amended to read as follows: 
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176 
‘‘SEC. 1361. RISK-BASED CAPITAL LEVELS FOR REGULATED 
ENTITIES. 
‘‘(a) IN GENERAL.— 
‘‘(1) ENTERPRISES.—The Director shall, by 
regulation, establish risk-based capital requirements 
for the enterprises to ensure that the enterprises op-
erate in a safe and sound manner, maintaining suffi-
cient capital and reserves to support the risks that 
arise in the operations and management of the en-
terprises. 
‘‘(2) FEDERAL HOME LOAN BANKS.—The Di-
rector shall establish risk-based capital standards 
under section 6 of the Federal Home Loan Bank 
Act for the Federal home loan banks. 
‘‘(b) CONFIDENTIALITY OF INFORMATION.—Any per-
son that receives any book, record, or information from 
the Director or a regulated entity to enable the risk-based 
capital requirements established under this section to be 
applied shall— 
‘‘(1) maintain the confidentiality of the book, 
record, or information in a manner that is generally 
consistent with the level of confidentiality established 
for the material by the Director or the regulated en-
tity; and 
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177 
‘‘(2) be exempt from section 552 of title 5, 
United States Code, with respect to the book, 
record, or information. 
‘‘(c) NO LIMITATION.—Nothing in this section shall 
limit the authority of the Director to require other reports 
or undertakings, or take other action, in furtherance of 
the responsibilities of the Director under this Act.’’. 
(b) FEDERAL HOME LOAN BANKS RISK-BASED CAP-
ITAL.—Section 6(a)(3) of the Federal Home Loan Bank 
Act (12 U.S.C. 1426(a)(3)) is amended— 
(1) by striking subparagraph (A) and inserting 
the following new subparagraph: 
‘‘(A) RISK-BASED CAPITAL STANDARDS.— 
The Director shall, by regulation, establish risk- 
based capital standards for the Federal home 
loan banks to ensure that the Federal home 
loan banks operate in a safe and sound manner, 
with sufficient permanent capital and reserves 
to support the risks that arise in the operations 
and management of the Federal home loans 
banks.’’; and 
(2) in subparagraph (B), by striking ‘‘(A)(ii)’’ 
and inserting ‘‘(A)’’. 
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178 
SEC. 1023. MINIMUM AND CRITICAL CAPITAL LEVELS. 
(a) MINIMUM CAPITAL LEVEL.—Section 1362 of the 
Housing and Community Development Act of 1992 (12 
U.S.C. 4612) is amended— 
(1) in subsection (a), by striking ‘‘IN GEN-
ERAL’’ and inserting ‘‘ENTERPRISES’’; and 
(2) by striking subsection (b) and inserting the 
following new subsections: 
‘‘(b) FEDERAL HOME LOAN BANKS.—For purposes 
of this subtitle, the minimum capital level for each Federal 
home loan bank shall be the minimum capital required to 
be maintained to comply with the leverage requirement for 
the bank established under section 6(a)(2) of the Federal 
Home Loan Bank Act (12 U.S.C. 1426(a)(2)). 
‘‘(c) ESTABLISHMENT OF REVISED MINIMUM CAP-
ITAL LEVELS.—Notwithstanding subsections (a) and (b) 
and notwithstanding the capital classifications of the regu-
lated entities, the Director may, by regulations issued 
under section 1319G, establish a minimum capital level 
for the enterprises, for the Federal home loan banks, or 
for both the enterprises and the banks, that is higher than 
the level specified in subsection (a) for the enterprises or 
the level specified in subsection (b) for the Federal home 
loan banks, to the extent needed to ensure that the regu-
lated entities operate in a safe and sound manner. 
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179 
‘‘(d) AUTHORITY TO REQUIRE TEMPORARY IN-
CREASE.—Notwithstanding subsections (a) and (b) and 
any minimum capital level established pursuant to sub-
section (c), the Director may, by order, increase the min-
imum capital level for a regulated entity on a temporary 
basis for such period as the Director may provide if the 
Director— 
‘‘(1) makes any determination specified in sub-
paragraphs (A) through (C) of section 1364(c)(1); 
‘‘(2) determines that the regulated entity has 
violated any of the prudential standards established 
pursuant to section 1313A and, as a result of such 
violation, determines that an unsafe and unsound 
condition exists; or 
‘‘(3) determines that an unsafe and unsound 
condition exists, except that a temporary increase in 
minimum capital imposed on a regulated entity pur-
suant to this paragraph shall not remain in place for 
a period of more than 6 months unless the Director 
makes a renewed determination of the existence of 
an unsafe and unsound condition. 
‘‘(e) AUTHORITY TO ESTABLISH ADDITIONAL CAP-
ITAL AND RESERVE REQUIREMENTS FOR PARTICULAR 
PROGRAMS.—The Director may, at any time by order or 
regulation, establish such capital or reserve requirements 
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180 
with respect to any program or activity of a regulated enti-
ty as the Director considers appropriate to ensure that 
the regulated entity operates in a safe and sound manner, 
with sufficient capital and reserves to support the risks 
that arise in the operations and management of the regu-
lated entity. 
‘‘(f) PERIODIC REVIEW.—The Director shall periodi-
cally review the amount of core capital maintained by the 
enterprises, the amount of capital retained by the Federal 
home loan banks, and the minimum capital levels estab-
lished for such regulated entities pursuant to this section. 
The Director shall rescind any temporary minimum cap-
ital level increase if the Director determines that the cir-
cumstances or facts justifying the temporary increase are 
no longer present.’’. 
(b) CRITICAL CAPITAL LEVELS.— 
(1) IN GENERAL.—Section 1363 of the Housing 
and Community Development Act of 1992 (12 
U.S.C. 4613) is amended— 
(A) by striking ‘‘For’’ and inserting ‘‘(a) 
ENTERPRISES.—FOR’’; and 
(B) by adding at the end the following new 
subsection: 
‘‘(b) FEDERAL HOME LOAN BANKS.— 
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181 
‘‘(1) IN GENERAL.—For purposes of this sub-
title, the critical capital level for each Federal home 
loan bank shall be such amount of capital as the Di-
rector shall, by regulation require. 
‘‘(2) CONSIDERATION OF OTHER CRITICAL CAP-
ITAL
LEVELS.—In establishing the critical capital 
level under paragraph (1) for the Federal home loan 
banks, the Director shall take due consideration of 
the critical capital level established under subsection 
(a) for the enterprises, with such modifications as 
the Director determines to be appropriate to reflect 
the difference in operations between the banks and 
the enterprises.’’. 
(2) REGULATIONS.—Not later than the expira-
tion of the 180-day period beginning on the effective 
date under section 1065, the Director of the Federal 
Housing Finance Agency shall issue regulations pur-
suant to section 1363(b) of the Housing and Com-
munity Development Act of 1992 (as added by para-
graph (1) of this subsection) establishing the critical 
capital level under such section. 
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182 
SEC. 1024. REVIEW OF AND AUTHORITY OVER ENTERPRISE 
ASSETS AND LIABILITIES. 
(a) IN GENERAL.—Subtitle B of title XIII of the 
Housing and Community Development Act of 1992 (12 
U.S.C. 4611 et seq.) is amended— 
(1) by striking the subtitle designation and 
heading and inserting the following: 
‘‘Subtitle B—Required Capital Lev-
els for Regulated Entities, Spe-
cial Enforcement Powers, and 
Reviews of Assets and Liabil-
ities’’; 
and 
(2) by adding at the end the following new sec-
tion: 
‘‘SEC. 1369E. REVIEWS OF ENTERPRISE ASSETS AND LIABIL-
ITIES. 
‘‘(a) IN GENERAL.—The Director shall, by regula-
tion, establish standards by which the portfolio holdings, 
or rate of growth of the portfolio holdings, of the enter-
prises will be deemed to be consistent with the mission 
and the safe and sound operations of the enterprises. In 
developing such standards, the Director shall consider— 
‘‘(1) the size or growth of the mortgage market; 
‘‘(2) the need for the portfolio in maintaining li-
quidity or stability of the secondary mortgage mar-
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183 
ket (including the market for the mortgage-backed 
securities the enterprises issue); 
‘‘(3) the need for an inventory of mortgages in 
connection with securitizations; 
‘‘(4) the need for the portfolio to directly sup-
port the affordable housing mission of the enter-
prises; 
‘‘(5) the liquidity needs of the enterprises; 
‘‘(6) any potential risks posed to the enterprises 
by the nature of the portfolio holdings; and 
‘‘(7) any additional factors that the Director 
determines to be necessary to carry out the purpose 
under the first sentence of this subsection to estab-
lish standards for assessing whether the portfolio 
holdings are consistent with the mission and safe 
and sound operations of the enterprises. 
‘‘(b) TEMPORARY
ADJUSTMENTS.—The Director 
may, by order, make temporary adjustments to the estab-
lished standards for an enterprise or both enterprises, 
such as during times of economic distress or market dis-
ruption. 
‘‘(c) AUTHORITY TO REQUIRE DISPOSITION OR AC-
QUISITION.—The Director shall monitor the portfolio of 
each enterprise. Pursuant to subsection (a) and notwith-
standing the capital classifications of the enterprises, the 
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184 
Director may, by order, require an enterprise, under such 
terms and conditions as the Director determines to be ap-
propriate, to dispose of or acquire any asset, if the Direc-
tor determines that such action is consistent with the pur-
poses of this Act or any of the authorizing statutes.’’. 
(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 pursuant to section 
1369E(a) of the Housing and Community Development 
Act of 1992 (as added by subsection (a) of this section) 
establishing the portfolio holdings standards under such 
section. 
SEC. 1025. CORPORATE GOVERNANCE OF ENTERPRISES. 
The Housing and Community Development Act of 
1992 is amended by inserting before section 1323 (12 
U.S.C. 4543) the following new section: 
‘‘SEC. 1322A. CORPORATE GOVERNANCE OF ENTERPRISES. 
‘‘(a) BOARD OF DIRECTORS.— 
‘‘(1) INDEPENDENCE.—A majority of seated 
members of the board of directors of each enterprise 
shall be independent board members, as defined 
under rules set forth by the New York Stock Ex-
change, as such rules may be amended from time to 
time. 
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185 
‘‘(2) FREQUENCY OF MEETINGS.—To carry out 
its obligations and duties under applicable laws, 
rules, regulations, and guidelines, the board of direc-
tors of an enterprise shall meet at least eight times 
a year and not less than once a calendar quarter. 
‘‘(3) 
NON-MANAGEMENT
BOARD
MEMBER 
MEETINGS.—The non-management directors of an 
enterprise shall meet at regularly scheduled execu-
tive sessions without management participation. 
‘‘(4) QUORUM; PROHIBITION ON PROXIES.—For 
the transaction of business, a quorum of the board 
of directors of an enterprise shall be at least a ma-
jority of the seated board of directors and a board 
member may not vote by proxy. 
‘‘(5) INFORMATION.—The management of an 
enterprise shall provide a board member of the en-
terprise with such adequate and appropriate infor-
mation that a reasonable board member would find 
important to the fulfillment of his or her fiduciary 
duties and obligations. 
‘‘(6) ANNUAL REVIEW.—At least annually, the 
board of directors of each enterprise shall review, 
with appropriate professional assistance, the require-
ments of laws, rules, regulations, and guidelines that 
are applicable to its activities and duties. 
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186 
‘‘(b) COMMITTEES OF BOARDS OF DIRECTORS.— 
‘‘(1) FREQUENCY
OF
MEETINGS.—Any com-
mittee of the board of directors of an enterprise 
shall meet with sufficient frequency to carry out its 
obligations and duties under applicable laws, rules, 
regulations, and guidelines. 
‘‘(2) REQUIRED COMMITTEES.—Each enterprise 
shall provide for the establishment, however styled, 
of the following committees of the board of directors: 
‘‘(A) Audit committee. 
‘‘(B) Compensation committee. 
‘‘(C) 
Nominating/corporate 
governance 
committee. 
Such committees shall be in compliance with the 
charter, independence, composition, expertise, duties, 
responsibilities, and other requirements set forth 
under section 10A(m) of the Securities Exchange 
Act of 1934 (15 U.S.C. 78j–1(m)), with respect to 
the audit committee, and under rules issued by the 
New York Stock Exchange, as such rules may be 
amended from time to time. 
‘‘(c) COMPENSATION.— 
‘‘(1) IN GENERAL.—The compensation of board 
members, executive officers, and employees of an en-
terprise— 
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187 
‘‘(A) shall not be in excess of that which 
is reasonable and appropriate; 
‘‘(B) shall be commensurate with the du-
ties and responsibilities of such persons; 
‘‘(C) shall be consistent with the long-term 
goals of the enterprise; 
‘‘(D) shall not focus solely on earnings per-
formance, but shall take into account risk man-
agement, operational stability and legal and 
regulatory compliance as well; and 
‘‘(E) shall be undertaken in a manner that 
complies with applicable laws, rules, and regula-
tions. 
‘‘(2) REIMBURSEMENT.—If an enterprise is re-
quired to prepare an accounting restatement due to 
the material noncompliance of the enterprise, as a 
result of misconduct, with any financial reporting re-
quirement under the securities laws, the chief execu-
tive officer and chief financial officer of the enter-
prise shall reimburse the enterprise as provided 
under section 304 of the Sarbanes-Oxley Act of 
2002 (15 U.S.C. 7243). This provision does not oth-
erwise limit the authority of the Agency to employ 
remedies available to it under its enforcement au-
thorities. 
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188 
‘‘(d) CODE OF CONDUCT AND ETHICS.— 
‘‘(1) IN GENERAL.—An enterprise shall estab-
lish and administer a written code of conduct and 
ethics that is reasonably designed to assure the abil-
ity of board members, executive officers, and em-
ployees of the enterprise to discharge their duties 
and responsibilities, on behalf of the enterprise, in 
an objective and impartial manner, and that includes 
standards required under section 406 of the Sar-
banes-Oxley Act of 2002 (15 U.S.C. 7264) and 
other applicable laws, rules, and regulations. 
‘‘(2) REVIEW.—Not less than once every three 
years, an enterprise shall review the adequacy of its 
code of conduct and ethics for consistency with prac-
tices appropriate to the enterprise and make any ap-
propriate revisions to such code. 
‘‘(e) CONDUCT AND RESPONSIBILITIES OF BOARD OF 
DIRECTORS.—The board of directors of an enterprise shall 
be responsible for directing the conduct and affairs of the 
enterprise in furtherance of the safe and sound operation 
of the enterprise and shall remain reasonably informed of 
the condition, activities, and operations of the enterprise. 
The responsibilities of the board of directors shall include 
having in place adequate policies and procedures to assure 
its oversight of, among other matters, the following: 
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189 
‘‘(1) Corporate strategy, major plans of action, 
risk policy, programs for legal and regulatory com-
pliance and corporate performance, including pru-
dent plans for growth and allocation of adequate re-
sources to manage operations risk. 
‘‘(2) Hiring and retention of qualified executive 
officers and succession planning for such executive 
officers. 
‘‘(3) Compensation programs of the enterprise. 
‘‘(4) Integrity of accounting and financial re-
porting systems of the enterprise, including inde-
pendent audits and systems of internal control. 
‘‘(5) Process and adequacy of reporting, disclo-
sures, and communications to shareholders, inves-
tors, and potential investors. 
‘‘(6) Extensions of credit to board members and 
executive officers. 
‘‘(7) Responsiveness of executive officers in pro-
viding accurate and timely reports to Federal regu-
lators and in addressing the supervisory concerns of 
Federal regulators in a timely and appropriate man-
ner. 
‘‘(f) PROHIBITION OF EXTENSIONS OF CREDIT.—An 
enterprise may not directly or indirectly, including 
through any subsidiary, extend or maintain credit, arrange 
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190 
for the extension of credit, or renew an extension of credit, 
in the form of a personal loan to or for any board member 
or executive officer of the enterprise, as provided by sec-
tion 13(k) of the Securities Exchange Act of 1934 (15 
U.S.C. 78m(k)). 
‘‘(g) CERTIFICATION OF DISCLOSURES.—The chief 
executive officer and the chief financial officer of an enter-
prise shall review each quarterly report and annual report 
issued by the enterprise and such reports shall include cer-
tifications by such officers as required by section 302 of 
the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7241). 
‘‘(h) CHANGE OF AUDIT PARTNER.—An enterprise 
may not accept audit services from an external auditing 
firm if the lead or coordinating audit partner who has pri-
mary responsibility for the external audit of the enterprise, 
or the external audit partner who has responsibility for 
reviewing the external audit has performed audit services 
for the enterprise in each of the five previous fiscal years. 
‘‘(i) COMPLIANCE PROGRAM.— 
‘‘(1) REQUIREMENT.—Each enterprise shall es-
tablish and maintain a compliance program that is 
reasonably designed to assure that the enterprise 
complies with applicable laws, rules, regulations, and 
internal controls. 
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191 
‘‘(2) COMPLIANCE
OFFICER.—The compliance 
program of an enterprise shall be headed by a com-
pliance officer, however styled, who reports directly 
to the chief executive officer of the enterprise. The 
compliance officer shall report regularly to the board 
of directors or an appropriate committee of the 
board of directors on compliance with and the ade-
quacy of current compliance policies and procedures 
of the enterprise, and shall recommend any adjust-
ments to such policies and procedures that the com-
pliance officer considers necessary and appropriate. 
‘‘(j) RISK MANAGEMENT PROGRAM.— 
‘‘(1) REQUIREMENT.—Each enterprise shall es-
tablish and maintain a risk management program 
that is reasonably designed to manage the risks of 
the operations of the enterprise. 
‘‘(2) RISK MANAGEMENT OFFICER.—The risk 
management program of an enterprise shall be head-
ed by a risk management officer, however styled, 
who reports directly to the chief executive officer of 
the enterprise. The risk management officer shall re-
port regularly to the board of directors or an appro-
priate committee of the board of directors on compli-
ance with and the adequacy of current risk manage-
ment policies and procedures of the enterprise, and 
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192 
shall recommend any adjustments to such policies 
and procedures that the risk management officer 
considers necessary and appropriate. 
‘‘(k) COMPLIANCE WITH OTHER LAWS.— 
‘‘(1) DEREGISTERED OR UNREGISTERED COM-
MON STOCK.—If an enterprise deregisters or has not 
registered its common stock with the Securities and 
Exchange Commission under the Securities Ex-
change Act of 1934, the enterprise shall comply or 
continue to comply with sections 10A(m) and 13(k) 
of the Securities Exchange Act of 1934 (15 U.S.C. 
78j–1(m), 78m(k)) and sections 302, 304, and 406 
of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7241, 
7243, 7264), subject to such requirements as pro-
vided by subsection (l) of this section. 
‘‘(2) REGISTERED COMMON STOCK.—An enter-
prise that has its common stock registered with the 
Securities and Exchange Commission shall maintain 
such registered status, unless it provides 60 days 
prior written notice to the Director stating its intent 
to deregister and its understanding that it will re-
main subject to the requirements of the sections of 
the Securities Exchange Act of 1934 and the Sar-
banes-Oxley Act of 2002, subject to such require-
ments as provided by subsection (l) of this section. 
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193 
‘‘(l) OTHER MATTERS.—The Director may from time 
to time establish standards, by regulation, order, or guide-
line, regarding such other corporate governance matters 
of the enterprises as the Director considers appropriate. 
‘‘(m) MODIFICATION OF STANDARDS.—In connection 
with standards of Federal or State law (including the Re-
vised Model Corporation Act) or New York Stock Ex-
change rules that are made applicable to an enterprise by 
section 1710.10 of the Director’s rules (12 C.F.R. 
1710.10) and by subsections (a), (b), (g), (i), (j), and (k) 
of this section, the Director, in the Director’s sole discre-
tion, may modify the standards contained in this section 
or in part 1710 of the Director’s rules (12 C.F.R. Part 
1710) in accordance with section 553 of title 5, United 
States Code, and upon written notice to the enterprise.’’. 
SEC. 1026. REQUIRED REGISTRATION UNDER SECURITIES 
EXCHANGE ACT OF 1934. 
The Housing and Community Development Act of 
1992 is amended by adding after section 1322A, as added 
by the preceding provisions of this title, the following new 
section: 
‘‘SEC. 1322B. REQUIRED REGISTRATION UNDER SECURI-
TIES EXCHANGE ACT OF 1934. 
‘‘(a) IN GENERAL.—Each regulated entity shall reg-
ister at least one class of the capital stock of such regu-
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194 
lated entity, and maintain such registration with the Secu-
rities and Exchange Commission, under the Securities Ex-
change Act of 1934. 
‘‘(b) ENTERPRISES.—Each enterprise shall comply 
with sections 14 and 16 of the Securities Exchange Act 
of 1934.’’. 
SEC. 1027. LIAISON WITH FINANCIAL INSTITUTIONS EXAM-
INATION COUNCIL. 
Section 1007 of the Federal Financial Institutions 
Examination Council Act of 1978 (12 U.S.C. 3306) is 
amended— 
(1) in the section heading, by inserting after 
‘‘STATE’’ the following: ‘‘AND FEDERAL HOUSING FI-
NANCE AGENCY’’; and 
(2) by inserting after ‘‘financial institutions’’ 
the following: ‘‘, and one representative of the Fed-
eral Housing Finance Agency,’’. 
SEC. 1028. GUARANTEE FEE STUDY. 
(a) IN GENERAL.—The Director of the Federal 
Housing Finance Agency, in consultation with the heads 
of the federal banking agencies, shall, not later than 18 
months after the date of the enactment of this Act, submit 
to the Congress a study concerning the pricing, trans-
parency and reporting of the Federal National Mortgage 
Association, the Federal Home Loan Mortgage Corpora-
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195 
tion, and the Federal home loan banks with regard to 
guarantee fees and concerning analogous practices, trans-
parency and reporting requirements (including advances 
pricing practices by the Federal Home Loan Banks) of 
other participants in the business of mortgage purchases 
and securitization. 
(b) FACTORS.—The study required by this section 
shall examine various factors such as credit risk, 
counterparty risk considerations, economic value consider-
ations, and volume considerations used by the regulated 
entities (as such term is defined in section 1303 of the 
Housing and Community Development Act of 1992) in-
cluded in the study in setting the amount of fees they 
charge. 
(c) CONTENTS
OF REPORT.—The report required 
under subsection (a) shall identify and analyze— 
(1) the factors used by each enterprise (as such 
term is defined in section 1303 of the Housing and 
Community Development Act of 1992) in deter-
mining the amount of the guarantee fees it charges; 
(2) the total revenue the enterprises earn from 
guarantee fees; 
(3) the total costs incurred by the enterprises 
for providing guarantees; 
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196 
(4) the average guarantee fee charged by the 
enterprises; 
(5) an analysis of how and why the guarantee 
fees charged differ from such fees charged during 
the previous year; 
(6) a breakdown of the revenue and costs asso-
ciated with providing guarantees, based on product 
type and risk classifications; and 
(7) other relevant information on guarantee 
fees with other participants in the mortgage and 
securitization business. 
(d) PROTECTION OF INFORMATION.—Nothing in this 
section may be construed to require or authorize the Di-
rector of the Federal Housing Finance Agency, in connec-
tion with the study mandated by this section, to disclose 
information of the enterprises or other organization that 
is confidential or proprietary. 
(e) EFFECTIVE DATE.—This section shall take effect 
on the date of the enactment of this Act. 
SEC. 1029. CONFORMING AMENDMENTS. 
(a) 1992 ACT.—Part 1 of subtitle A of title XIII of 
the Housing and Community Development Act of 1992 
(12 U.S.C. 4511 et seq.), as amended by the preceding 
provisions of this title, is further amended— 
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197 
(1) by striking ‘‘an enterprise’’ each place such 
term appears in such part (except in sections 
1313(a)(2)(A), 
1313A(b)(2)(B)(ii)(I), 
and 
1316(b)(3)) and inserting ‘‘a regulated entity’’; 
(2) by striking ‘‘the enterprise’’ each place such 
term appears in such part (except in section 
1316(b)(3)) and inserting ‘‘the regulated entity’’; 
(3) by striking ‘‘the enterprises’’ each place 
such term appears in such part (except in sections 
1312(c)(2), and 1312(e)(2)) and inserting ‘‘the reg-
ulated entities’’; 
(4) by striking ‘‘each enterprise’’ each place 
such term appears in such part and inserting ‘‘each 
regulated entity’’; 
(5) by striking ‘‘Office’’ each place such term 
appears in such part (except in sections 1311(b)(2), 
1312(b)(5), 1315(b), and 1316(a)(4), (g), and (h), 
1317(c), and 1319A(a)) and inserting ‘‘Agency’’; 
(6) in section 1315 (12 U.S.C. 4515)— 
(A) in subsection (a)— 
(i) in the subsection heading, by strik-
ing ‘‘OFFICE PERSONNEL’’ and inserting 
‘‘IN GENERAL’’; and 
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198 
(ii) by striking ‘‘The’’ and inserting 
‘‘Subject to title III of the Federal Hous-
ing Finance Reform Act of 2008, the’’; 
(B) by striking subsections (d) and (f); 
and 
(C) by redesignating subsection (e) as sub-
section (d); 
(7) in section 1319B (12 U.S.C. 4521), by 
striking ‘‘Committee on Banking, Finance and 
Urban Affairs’’ each place such term appears and 
inserting ‘‘Committee on Financial Services’’; and 
(8) in section 1319F (12 U.S.C. 4525), striking 
all that follows ‘‘United States Code’’ and inserting 
‘‘, the Agency shall be considered an agency respon-
sible for the regulation or supervision of financial in-
stitutions.’’. 
(b) AMENDMENTS TO FANNIE MAE CHARTER ACT.— 
The Federal National Mortgage Association Charter Act 
(12 U.S.C. 1716 et seq.) is amended— 
(1) by striking ‘‘Director of the Office of Fed-
eral Housing Enterprise Oversight of the Depart-
ment of Housing and Urban Development’’ each 
place such term appears, and inserting ‘‘Director of 
the Federal Housing Finance Agency’’, in— 
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(A) 
section 
303(c)(2) 
(12 
U.S.C. 
1718(c)(2)); 
(B) section 309(d)(3)(B) (12 U.S.C. 
1723a(d)(3)(B)); and 
(C) section 309(k)(1); and 
(2) in section 309— 
(A) in subsections (d)(3)(A) and (n)(1), by 
striking ‘‘Banking, Finance and Urban Affairs’’ 
each place such term appears and inserting 
‘‘Financial Services’’; and 
(B) in subsection (m)— 
(i) in paragraph (1), by striking ‘‘Sec-
retary’’ the second place such term ap-
pears and inserting ‘‘Director’’; 
(ii) in paragraph (2), by striking 
‘‘Secretary’’ the second place such term 
appears and inserting ‘‘Director’’; and 
(iii) by striking ‘‘Secretary’’ each 
other place such term appears and insert-
ing ‘‘Director of the Federal Housing Fi-
nance Agency’’; and 
(C) in subsection (n), by striking ‘‘Sec-
retary’’ each place such term appears and in-
serting ‘‘Director of the Federal Housing Fi-
nance Agency’’. 
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200 
(c) AMENDMENTS TO FREDDIE MAC ACT.—The Fed-
eral Home Loan Mortgage Corporation Act is amended— 
(1) by striking ‘‘Director of the Office of Fed-
eral Housing Enterprise Oversight of the Depart-
ment of Housing and Urban Development’’ each 
place such term appears, and inserting ‘‘Director of 
the Federal Housing Finance Agency’’, in— 
(A) 
section 
303(b)(2) 
(12 
U.S.C. 
1452(b)(2)); 
(B) 
section 
303(h)(2) 
(12 
U.S.C. 
1452(h)(2)); and 
(C) 
section 
307(c)(1) 
(12 
U.S.C. 
1456(c)(1)); 
(2) in sections 303(h)(1) and 307(f)(1) (12 
U.S.C. 1452(h)(1), 1456(f)(1)), by striking ‘‘Bank-
ing, Finance and Urban Affairs’’ each place such 
term appears and inserting ‘‘Financial Services’’; 
(3) in section 306(i) (12 U.S.C. 1455(i))— 
(A) by striking ‘‘1316(c)’’ and inserting 
‘‘306(c)’’; and 
(B) by striking ‘‘section 106’’ and insert-
ing ‘‘section 1316’’; and 
(4) in section 307 (12 U.S.C. 1456)— 
(A) in subsection (e)— 
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(i) in paragraph (1), by striking ‘‘Sec-
retary’’ the second place such term ap-
pears and inserting ‘‘Director’’; 
(ii) in paragraph (2), by striking 
‘‘Secretary’’ the second place such term 
appears and inserting ‘‘Director’’; and 
(iii) by striking ‘‘Secretary’’ each 
other place such term appears and insert-
ing ‘‘Director of the Federal Housing Fi-
nance Agency’’; and 
(B) in subsection (f), by striking ‘‘Sec-
retary’’ each place such term appears and in-
serting ‘‘Director of the Federal Housing Fi-
nance Agency’’. 
CHAPTER 2—IMPROVEMENT OF MISSION 
SUPERVISION 
SEC. 1031. TRANSFER OF PRODUCT APPROVAL AND HOUS-
ING GOAL OVERSIGHT. 
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 the designation and heading for 
the part and inserting the following: 
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202 
‘‘PART 2—PRODUCT APPROVAL BY DIRECTOR, 
CORPORATE GOVERNANCE, AND ESTABLISH-
MENT OF HOUSING GOALS’’; 
and 
(2) by striking sections 1321 and 1322. 
SEC. 1032. REVIEW OF ENTERPRISE PRODUCTS. 
(a) IN GENERAL.—Part 2 of subtitle A of title XIII 
of the Housing and Community Development Act of 1992 
is amended by inserting before section 1323 (12 U.S.C. 
4543) the following new section: 
‘‘SEC. 1321. PRIOR APPROVAL AUTHORITY FOR PRODUCTS 
OF ENTERPRISES. 
‘‘(a) IN GENERAL.—The Director shall require each 
enterprise to obtain the approval of the Director for any 
product of the enterprise before initially offering the prod-
uct. 
‘‘(b) STANDARD FOR APPROVAL.—In considering any 
request for approval of a product pursuant to subsection 
(a), the Director shall make a determination that— 
‘‘(1) in the case of a product of the Federal Na-
tional Mortgage Association, the Director determines 
that the product is authorized under paragraph (2), 
(3), (4), or (5) of section 302(b) or section 304 of 
the Federal National Mortgage Association Charter 
Act (12 U.S.C. 1717(b), 1719); 
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‘‘(2) in the case of a product of the Federal 
Home Loan Mortgage Corporation, the Director de-
termines that the product is authorized under para-
graph (1), (4), or (5) of section 305(a) of the Fed-
eral Home Loan Mortgage Corporation Act (12 
U.S.C. 1454(a)); 
‘‘(3) the product is in the public interest; 
‘‘(4) the product is consistent with the safety 
and soundness of the enterprise or the mortgage fi-
nance system; and 
‘‘(5) the product does not materially impair the 
efficiency of the mortgage finance system. 
‘‘(c) PROCEDURE FOR APPROVAL.— 
‘‘(1) SUBMISSION OF REQUEST.—An enterprise 
shall submit to the Director a written request for 
approval of a product that describes the product in 
such form as prescribed by order or regulation of the 
Director. 
‘‘(2) REQUEST FOR PUBLIC COMMENT.—Imme-
diately upon receipt of a request for approval of a 
product, as required under paragraph (1), the Direc-
tor shall publish notice of such request and of the 
period for public comment pursuant to paragraph 
(3) regarding the product, and a description of the 
product proposed by the request. The Director shall 
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204 
give interested parties the opportunity to respond in 
writing to the proposed product. 
‘‘(3) PUBLIC COMMENT PERIOD.—During the 
30-day period beginning on the date of publication 
pursuant to paragraph (2) of a request for approval 
of a product, the Director shall receive public com-
ments regarding the proposed product. 
‘‘(4) OFFERING OF PRODUCT.— 
‘‘(A) IN
GENERAL.—Not later than 30 
days after the close of the public comment pe-
riod described in paragraph (3), the Director 
shall approve or deny the product, specifying 
the grounds for such decision in writing. 
‘‘(B) FAILURE TO ACT.—If the Director 
fails to act within the 30-day period described 
in subparagraph (A), the enterprise may offer 
the product. 
‘‘(d) EXPEDITED REVIEW.— 
‘‘(1) DETERMINATION AND NOTICE.—If an en-
terprise determines that any new activity, service, 
undertaking, or offering is not a product, as defined 
in subsection (f), the enterprise shall provide written 
notice to the Director prior to the commencement of 
such activity, service, undertaking, or offering. 
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205 
‘‘(2) DIRECTOR DETERMINATION OF APPLICA-
BLE PROCEDURE.—Immediately upon receipt of any 
notice pursuant to paragraph (1), the Director shall 
make a determination under paragraph (3). 
‘‘(3) DETERMINATION
AND
TREATMENT
AS 
PRODUCT.—If the Director determines that any new 
activity, service, undertaking, or offering consists of, 
relates to, or involves a product— 
‘‘(A) the Director shall notify the enter-
prise of the determination; 
‘‘(B) the new activity, service, undertaking, 
or offering described in the notice under para-
graph (1) shall be considered a product for pur-
poses of this section; and 
‘‘(C) the enterprise shall withdraw its re-
quest or submit a written request for approval 
of the product pursuant to subsection (c). 
‘‘(e) CONDITIONAL APPROVAL.—The Director may 
conditionally approve the offering of any product by an 
enterprise, and may establish terms, conditions, or limita-
tions with respect to such product with which the enter-
prise must comply in order to offer such product. 
‘‘(f) DEFINITION
OF PRODUCT.—For purposes of 
this section, the term ‘product’ does not include— 
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206 
‘‘(1) the automated loan underwriting system of 
an enterprise in existence as of the date of the en-
actment of the Federal Housing Finance Reform 
Act of 2008, including any upgrade to the tech-
nology, operating system, or software to operate the 
underwriting system; or 
‘‘(2) any modification to the mortgage terms 
and conditions or mortgage underwriting criteria re-
lating to the mortgages that are purchased or guar-
anteed by an enterprise: Provided, That such modi-
fications do not alter the underlying transaction so 
as to include services or financing, other than resi-
dential mortgage financing, or create significant new 
exposure to risk for the enterprise or the holder of 
the mortgage. 
‘‘(g) NO LIMITATION.—Nothing in this section shall 
be deemed to restrict— 
‘‘(1) the safety and soundness authority of the 
Director over all new and existing products or activi-
ties; or 
‘‘(2) the authority of the Director to review all 
new and existing products or activities to determine 
that such products or activities are consistent with 
the statutory mission of the enterprise.’’. 
(b) CONFORMING AMENDMENTS.— 
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207 
(1) FANNIE
MAE.—Section 302(b)(6) of the 
Federal National Mortgage Association Charter Act 
(12 U.S.C. 1717(b)(6)) is amended— 
(A) by striking ‘‘implement any new pro-
gram’’ and inserting ‘‘initially offer any prod-
uct’’; 
(B) by striking ‘‘section 1303’’ and insert-
ing ‘‘section 1321(f)’’; and 
(C) by striking ‘‘before obtaining the ap-
proval of the Secretary under section 1322’’ 
and inserting ‘‘except in accordance with sec-
tion 1321’’. 
(2) FREDDIE MAC.—Section 305(c) of the Fed-
eral Home Loan Mortgage Corporation Act (12 
U.S.C. 1454(c)) is amended— 
(A) by striking ‘‘implement any new pro-
gram’’ and inserting ‘‘initially offer any prod-
uct’’; 
(B) by striking ‘‘section 1303’’ and insert-
ing ‘‘section 1321(f)’’; and 
(C) by striking ‘‘before obtaining the ap-
proval of the Secretary under section 1322’’ 
and inserting ‘‘except in accordance with sec-
tion 1321’’. 
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208 
(3) 1992 ACT.—Section 1303 of the Housing 
and Community Development Act of 1992 (12 
U.S.C. 4502), as amended by section 1002 of this 
title, is further amended— 
(A) by striking paragraph (17) (relating to 
the definition of ‘‘new program’’); and 
(B) by redesignating paragraphs (18) 
through (23) as paragraphs (17) through (22), 
respectively. 
SEC. 1033. CONFORMING LOAN LIMITS. 
(a) FANNIE MAE.— 
(1) GENERAL LIMIT.—Section 302(b)(2) of the 
Federal National Mortgage Association Charter Act 
(12 U.S.C. 1717(b)(2)) is amended— 
(A) in the 4th sentence, by striking ‘‘the 
Resolution Trust Corporation,’’; and 
(B) by striking the 7th and 8th sentences 
and inserting the following new sentences: ‘‘For 
2008, 
such 
limitations 
shall 
not 
exceed 
$417,000 for a mortgage secured by a single- 
family residence, $533,850 for a mortgage se-
cured by a 2-family residence, $645,300 for a 
mortgage secured by a 3-family residence, and 
$801,950 for a mortgage secured by a 4-family 
residence, except that such maximum limita-
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209 
tions shall be adjusted effective January 1 of 
each year beginning with 2009, subject to the 
limitations in this paragraph. Each adjustment 
shall be made by adding to or subtracting from 
each such amount (as it may have been pre-
viously adjusted) a percentage thereof equal to 
the percentage increase or decrease, during the 
most recent 12-month or four-quarter period 
ending before the time of determining such an-
nual adjustment, in the housing price index 
maintained by the Director of the Federal 
Housing Finance Agency (pursuant to section 
1322 of the Housing and Community Develop-
ment Act of 1992 (12 U.S.C. 4541)).’’. 
(2) HIGH-COST AREA LIMIT.—Section 302(b)(2) 
of the Federal National Mortgage Association Char-
ter Act is (12 U.S.C. 1717(b)(2)) is amended by 
adding after the period at the end the following: 
‘‘Such foregoing limitations shall also be increased 
with respect to properties of a particular size located 
in any area for which the median price for such size 
residence exceeds the foregoing limitation for such 
size residence, to the lesser of 150 percent of such 
foregoing limitation for such size residence or the 
amount that is equal to the median price in such 
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210 
area for such size residence, except that, subject to 
the order, if any, issued by the Director of the Fed-
eral Housing Finance Agency pursuant to section 
1033(d)(3) of the Federal Housing Finance Reform 
Act of 2008, such increase shall apply only with re-
spect to mortgages on which are based securities 
issued and sold by the corporation.’’. 
(b) FREDDIE MAC.— 
(1) GENERAL LIMIT.—Section 305(a)(2) of the 
Federal Home Loan Mortgage Corporation Act (12 
U.S.C. 1454(a)(2)) is amended— 
(A) in the 3rd sentence, by striking ‘‘the 
Resolution Trust Corporation,’’; and 
(B) by striking the 6th and 7th sentences 
and inserting the following new sentences: ‘‘For 
2008, 
such 
limitations 
shall 
not 
exceed 
$417,000 for a mortgage secured by a single- 
family residence, $533,850 for a mortgage se-
cured by a 2-family residence, $645,300 for a 
mortgage secured by a 3-family residence, and 
$801,950 for a mortgage secured by a 4-family 
residence, except that such maximum limita-
tions shall be adjusted effective January 1 of 
each year beginning with 2009, subject to the 
limitations in this paragraph. Each adjustment 
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211 
shall be made by adding to or subtracting from 
each such amount (as it may have been pre-
viously adjusted) a percentage thereof equal to 
the percentage increase or decrease, during the 
most recent 12-month or four-quarter period 
ending before the time of determining such an-
nual adjustment, in the housing price index 
maintained by the Director of the Federal 
Housing Finance Agency (pursuant to section 
1322 of the Housing and Community Develop-
ment Act of 1992 (12 U.S.C. 4541)).’’ 
(2) HIGH-COST AREA LIMIT.—Section 305(a)(2) 
of the Federal Home Loan Mortgage Corporation 
Act is amended by adding after the period at the 
end the following: ‘‘Such foregoing limitations shall 
also be increased with respect to properties of a par-
ticular size located in any area for which the median 
price for such size residence exceeds the foregoing 
limitation for such size residence, to the lesser of 
150 percent of such foregoing limitation for such 
size residence or the amount that is equal to the me-
dian price in such area for such size residence, ex-
cept that, subject to the order, if any, issued by the 
Director of the Federal Housing Finance Agency 
pursuant to section 1033(d)(3) of the Federal Hous-
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212 
ing Finance Reform Act of 2008, such increase shall 
apply only with respect to mortgages on which are 
based securities issued and sold by the Corpora-
tion.’’. 
(c) HOUSING PRICE INDEX.—Subpart A of part 2 of 
subtitle A of title XIII of the Housing and Community 
Development Act of 1992 (as amended by the preceding 
provisions of this title) is amended by inserting after sec-
tion 1321 (as added by section 1032 of this title) the fol-
lowing new section: 
‘‘SEC. 1322. HOUSING PRICE INDEX. 
‘‘(a) IN GENERAL.—The Director shall establish and 
maintain a method of assessing the national average 1- 
family house price for use for adjusting the conforming 
loan limitations of the enterprises. In establishing such 
method, the Director shall take into consideration the 
monthly survey of all major lenders conducted by the Fed-
eral Housing Finance Agency to determine the national 
average 1-family house price, the House Price Index main-
tained by the Office of Federal Housing Enterprise Over-
sight of the Department of Housing and Urban Develop-
ment before the effective date under section 1065 of the 
Federal Housing Finance Reform Act of 2008, any appro-
priate house price indexes of the Bureau of the Census 
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213 
of the Department of Commerce, and any other indexes 
or measures that the Director considers appropriate. 
‘‘(b) GAO AUDIT.— 
‘‘(1) IN GENERAL.—At such times as are re-
quired under paragraph (2), the Comptroller Gen-
eral of the United States shall conduct an audit of 
the methodology established by the Director under 
subsection (a) to determine whether the methodology 
established is an accurate and appropriate means of 
measuring changes to the national average 1-family 
house price. 
‘‘(2) TIMING.—An audit referred to in para-
graph (1) shall be conducted and completed not later 
than the expiration of the 180-day period that be-
gins upon each of the following dates: 
‘‘(A) ESTABLISHMENT.—The date upon 
which such methodology is initially established 
under subsection (a) in final form by the Direc-
tor. 
‘‘(B) MODIFICATION
OR
AMENDMENT.— 
Each date upon which any modification or 
amendment to such methodology is adopted in 
final form by the Director. 
‘‘(3) REPORT.—Within 30 days of the comple-
tion of any audit conducted under this subsection, 
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214 
the Comptroller General shall submit a report detail-
ing the results and conclusions of the audit to the 
Director, the Committee on Financial Services of the 
House of Representatives, and the Committee on 
Banking, Housing, and Urban Affairs of the Sen-
ate.’’. 
(d) CONDITIONS ON CONFORMING LOAN LIMIT FOR 
HIGH-COST AREAS.— 
(1) STUDY.—The Director of the Federal 
Housing Finance Agency shall conduct a study 
under this subsection during the six-month period 
beginning on the effective date under section 1065 
of this title. 
(2) ISSUES.—The study under this subsection 
shall determine— 
(A) the effect that restricting the con-
forming loan limits for high-cost areas only to 
mortgages on which are based securities issued 
and sold by the Federal National Mortgage As-
sociation and the Federal Home Loan Mortgage 
Corporation (as provided in the last sentence of 
section 302(b)(2) of the Federal National Mort-
gage Association Charter Act and the last sen-
tence of section 305(a)(2) of the Federal Home 
Loan Mortgage Corporation Act, pursuant to 
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215 
the amendments made by subsections (a)(2) 
and (b)(2) of this section) would have on the 
cost to borrowers for mortgages on housing in 
such high-cost areas; 
(B) the effects that such restrictions would 
have on the availability of mortgages for hous-
ing in such high-cost areas; and 
(C) the extent to which the Federal Na-
tional Mortgage Association and the Federal 
Home Loan Mortgage Corporation will be able 
to issue and sell securities based on mortgages 
for housing located in such high-cost areas. 
(3) DETERMINATION.— 
(A) IN GENERAL.—Not later than the ex-
piration of the six-month period specified in 
paragraph (1), the Director of the Federal 
Housing Finance Agency shall make a deter-
mination, based on the results of the study 
under this subsection, of whether the restriction 
of conforming loan limits for high-cost areas 
only to mortgages on which are based securities 
issued and sold by the Federal National Mort-
gage Association and the Federal Home Loan 
Mortgage Corporation (as provided in the 
amendments made by subsections (a)(2) and 
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216 
(b)(2) of this section) will result in an increase 
in the cost to borrowers for mortgages on hous-
ing in such high-cost areas. 
(B) ORDER.—If such determination is that 
costs to borrowers on housing in such high-cost 
areas will be increased by such restrictions, the 
Director may issue an order terminating such 
restrictions, in whole or in part. 
(4) PUBLICATION.—Not later than the expira-
tion of the six-month period specified in paragraph 
(1), the Director of the Federal Housing Finance 
Agency shall cause to be published in the Federal 
Register— 
(A) a report that— 
(i) describes the study under this sub-
section; and 
(ii) sets forth the conclusions of the 
study regarding the issues to be deter-
mined under paragraph (2); 
(B) notice of the determination of the Di-
rector under paragraph (3); and 
(C) the order of the Director under para-
graph (3). 
(5) DEFINITION.—For purposes of this sub-
section, the term ‘‘conforming loan limits for high- 
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217 
cost areas’’ means the dollar amount limitations ap-
plicable under the section 302(b)(2) of the Federal 
National Mortgage Association Charter Act and sec-
tion 305(a)(2) of the Federal Home Loan Mortgage 
Corporation Act (as amended by subsections (a) and 
(b) of this section) for areas described in the last 
sentence of such sections (as so amended). 
SEC. 1034. ANNUAL HOUSING REPORT REGARDING REGU-
LATED ENTITIES. 
(a) IN GENERAL.—The Housing and Community De-
velopment Act of 1992 is amended by striking section 
1324 (12 U.S.C. 4544) and inserting the following new 
section: 
‘‘SEC. 1324. ANNUAL HOUSING REPORT REGARDING REGU-
LATED ENTITIES. 
‘‘(a) IN GENERAL.—After reviewing and analyzing 
the reports submitted under section 309(n) of the Federal 
National Mortgage Association Charter Act, section 
307(f) of the Federal Home Loan Mortgage Corporation 
Act, and section 10(j)(11) of the Federal Home Loan 
Bank Act (12 U.S.C. 1430(j)(11)), the Director shall sub-
mit a report, not later than October 30 of each year, to 
the Committee on Financial Services of the House of Rep-
resentatives and the Committee on Banking, Housing, and 
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218 
Urban Affairs of the Senate, on the activities of each regu-
lated entity. 
‘‘(b) CONTENTS.—The report shall— 
‘‘(1) discuss the extent to which— 
‘‘(A) each enterprise is achieving the an-
nual housing goals established under subpart B 
of this part; 
‘‘(B) each Federal home loan bank is com-
plying with section 10(j) of the Federal Home 
Loan Bank Act; and 
‘‘(C) each regulated entity is achieving the 
purposes of the regulated entity established by 
law; 
‘‘(2) aggregate and analyze relevant data on in-
come to assess the compliance by each enterprise 
with the housing goals established under subpart B; 
‘‘(3) aggregate and analyze data on income, 
race, and gender by census tract and other relevant 
classifications, and compare such data with larger 
demographic, housing, and economic trends; 
‘‘(4) examine actions that— 
‘‘(A) each enterprise has undertaken or 
could undertake to promote and expand the an-
nual goals established under subpart B and the 
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225 
‘‘SEC. 1330. MORTGAGOR IDENTIFICATION REQUIREMENTS 
FOR MORTGAGES OF REGULATED ENTITIES. 
‘‘(a) LIMITATION.—The Director shall by regulation 
establish standards, and shall enforce compliance with 
such standards, that— 
‘‘(1) prohibit the enterprises from the purchase, 
service, holding, selling, lending on the security of, 
or otherwise dealing with any mortgage on a one- to 
four-family residence that will be used as the prin-
cipal residence of the mortgagor that does not meet 
the requirements under subsection (b); and 
‘‘(2) prohibit the Federal home loan banks from 
providing any advances to a member for use in fi-
nancing, and from accepting as collateral for any ad-
vance to a member, any mortgage on a one- to four- 
family residence that will be used as the principal 
residence of the mortgagor that does not meet the 
requirements under subsection (b). 
‘‘(b) IDENTIFICATION
REQUIREMENTS.—The re-
quirements under this subsection with respect to a mort-
gage are that the mortgagor have, at the time of settle-
ment on the mortgage, a Social Security account num-
ber.’’. 
(b) FANNIE MAE.—Section 304 of the Federal Na-
tional Mortgage Association Charter Act (12 U.S.C. 1719) 
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226 
is amended by adding at the end the following new sub-
section: 
‘‘(g) PROHIBITION REGARDING MORTGAGOR IDENTI-
FICATION REQUIREMENT.—Nothing in this Act may be 
construed to authorize the corporation to purchase, serv-
ice, hold, sell, lend on the security of, or otherwise deal 
with any mortgage that the corporation is prohibited from 
so dealing with under the standards issued under section 
1330 of the Housing and Community Development Act 
of 1992 by the Director of the Federal Housing Finance 
Agency.’’. 
(c) FREDDIE MAC.—Section 305 of the Federal 
Home Loan Mortgage Corporation Act (12 U.S.C. 1454) 
is amended by adding at the end the following new sub-
section: 
‘‘(d) PROHIBITION REGARDING MORTGAGOR IDENTI-
FICATION REQUIREMENTS.—Nothing in this Act may be 
construed to authorize the Corporation to purchase, serv-
ice, hold, sell, lend on the security of, or otherwise deal 
with any mortgage that the Corporation is prohibited from 
so dealing with under the standards issued under section 
1330 of the Housing and Community Development Act 
of 1992 by the Director of the Federal Housing Finance 
Agency.’’. 
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256 
ure, an opportunity for comment by the enterprise, 
and a final determination by the Director; 
‘‘(3) the enterprise has failed to submit the in-
formation required under subsection (m) or (n) of 
section 309 of the Federal National Mortgage Asso-
ciation Charter Act, or subsection (e) or (f) of sec-
tion 307 of the Federal Home Loan Mortgage Cor-
poration Act; 
‘‘(4) the enterprise has violated any provision of 
this part or any order, rule or regulation under this 
part; 
‘‘(5) the enterprise has failed to submit a hous-
ing plan that complies with section 1336(c) within 
the applicable period; or 
‘‘(6) the enterprise has failed to comply with a 
housing plan under section 1336(c).’’; 
(2) in subsection (b)(2), by striking ‘‘requiring 
the enterprise to’’ and all that follows through the 
end of the paragraph and inserting the following: 
‘‘requiring the enterprise to— 
‘‘(A) comply with the goal or goals; 
‘‘(B) submit a report under section 1314; 
‘‘(C) comply with any provision this part 
or any order, rule or regulation under such 
part; 
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276 
tity if the Director determines, in writing, 
that— 
‘‘(i) the assets of the regulated entity 
are, and during the preceding 30 calendar 
days have been, less than the obligations of 
the regulated entity to its creditors and 
others; or 
‘‘(ii) the regulated entity is not, and 
during the preceding 30 calendar days has 
not been, generally paying the debts of the 
regulated entity (other than debts that are 
the subject of a bona fide dispute) as such 
debts become due. 
‘‘(B) 
PERIODIC
DETERMINATION
RE-
QUIRED FOR CRITICALLY UNDER CAPITALIZED 
REGULATED ENTITY.—If a regulated entity is 
critically undercapitalized, the Director shall 
make a determination, in writing, as to whether 
the regulated entity meets the criteria specified 
in clause (i) or (ii) of subparagraph (A)— 
‘‘(i) not later than 30 calendar days 
after the regulated entity initially becomes 
critically undercapitalized; and 
‘‘(ii) at least once during each suc-
ceeding 30-calendar day period. 
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330 
‘‘(IV) means any option to enter 
into any agreement or transaction re-
ferred to in subclause (I) or (III); 
‘‘(V) means a master agreement 
that provides for an agreement or 
transaction referred to in subclause 
(I), (III), or (IV), together with all 
supplements to any such master 
agreement, without regard to whether 
the master agreement provides for an 
agreement or transaction that is not a 
repurchase 
agreement 
under 
this 
clause, except that the master agree-
ment shall be considered to be a re-
purchase agreement under this sub-
clause only with respect to each agree-
ment or transaction under the master 
agreement that is referred to in sub-
clause (I), (III), or (IV); and 
‘‘(VI) means any security agree-
ment or arrangement or other credit 
enhancement related to any agree-
ment or transaction referred to in 
subclause (I), (III), (IV), or (V), in-
cluding any guarantee or reimburse-
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338 
calculation of a value of a party’s position 
or an amount due to or from 1 of the par-
ties in accordance with its terms upon ter-
mination, liquidation, or acceleration of the 
qualified financial contract, either does not 
create a payment obligation of a party or 
extinguishes a payment obligation of a 
party in whole or in part solely because of 
such party’s status as a nondefaulting 
party. 
‘‘(9) TRANSFER OF QUALIFIED FINANCIAL CON-
TRACTS.—In making any transfer of assets or liabil-
ities of a regulated entity in default which includes 
any qualified financial contract, the conservator or 
receiver for such regulated entity shall either— 
‘‘(A) transfer to 1 person— 
‘‘(i) all qualified financial contracts 
between any person (or any affiliate of 
such person) and the regulated entity in 
default; 
‘‘(ii) all claims of such person (or any 
affiliate of such person) against such regu-
lated entity under any such contract (other 
than any claim which, under the terms of 
any such contract, is subordinated to the 
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claims of general unsecured creditors of 
such regulated entity); 
‘‘(iii) all claims of such regulated enti-
ty against such person (or any affiliate of 
such person) under any such contract; and 
‘‘(iv) all property securing or any 
other credit enhancement for any contract 
described in clause (i) or any claim de-
scribed in clause (ii) or (iii) under any 
such contract; or 
‘‘(B) transfer none of the financial con-
tracts, claims, or property referred to under 
subparagraph (A) (with respect to such person 
and any affiliate of such person). 
‘‘(10) NOTIFICATION OF TRANSFER.— 
‘‘(A) IN GENERAL.—If— 
‘‘(i) the conservator or receiver for a 
regulated entity in default makes any 
transfer of the assets and liabilities of such 
regulated entity, and 
‘‘(ii) the transfer includes any quali-
fied financial contract, 
the conservator or receiver shall notify any per-
son who is a party to any such contract of such 
transfer by 5:00 p.m. (eastern time) on the 
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(A) in the matter preceding paragraph (1), 
by striking ‘‘enterprise, executive officer, or di-
rector’’ and inserting ‘‘regulated entity or regu-
lated entity-affiliated party’’; 
(B) in paragraph (1)— 
(i) by striking ‘‘an executive officer or 
a director’’ and inserting ‘‘a regulated enti-
ty affiliated party’’; and 
(ii) by inserting ‘‘(including reim-
bursement of compensation under section 
1318)’’ after ‘‘reimbursement’’; 
(C) in paragraph (6), by striking ‘‘and’’ at 
the end; 
(D) by redesignating paragraph (7) as 
paragraph (8); and 
(E) by inserting after paragraph (6) the 
following new paragraph: 
‘‘(7) to effect an attachment on a regulated en-
tity or regulated entity-affiliated party subject to an 
order under this section or section 1372; and’’. 
SEC. 1052. TEMPORARY CEASE-AND-DESIST PROCEEDINGS. 
Section 1372 of the Housing and Community Devel-
opment Act of 1992 (12 U.S.C. 4632) is amended— 
(1) by striking subsection (a) and inserting the 
following new subsection: 
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