IIB 
109TH CONGRESS 
1ST SESSION H. R. 1461 
IN THE SENATE OF THE UNITED STATES 
OCTOBER 31, 2005 
Received; read twice and referred to the Committee on Banking, Housing, and 
Urban Affairs 
AN ACT 
To reform the regulation of certain housing-related 
Government-sponsored enterprises, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
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SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Federal Housing Finance Reform Act of 2005’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title and table of contents. 
Sec. 2. Definitions. 
TITLE I—REFORM OF REGULATION OF ENTERPRISES AND 
FEDERAL HOME LOAN BANKS 
Subtitle A—Improvement of Safety and Soundness 
Sec. 101. Establishment of the Federal Housing Finance Agency. 
Sec. 102. Duties and authorities of Director. 
Sec. 103. Housing Finance Oversight Board. 
Sec. 104. Authority to require reports by regulated entities. 
Sec. 105. Disclosure of charitable contributions by enterprises. 
Sec. 106. Assessments. 
Sec. 107. Examiners and accountants. 
Sec. 108. Prohibition and withholding of executive compensation. 
Sec. 109. Reviews of regulated entities. 
Sec. 110. Regulations and orders. 
Sec. 111. Risk-based capital requirements. 
Sec. 112. Minimum and critical capital levels. 
Sec. 113. Review of and authority over enterprise assets and liabilities. 
Sec. 114. Corporate governance of enterprises. 
Sec. 115. Required registration under Securities Exchange Act of 1934. 
Sec. 116. Financial Institutions Examination Council. 
Sec. 117. Guarantee fee study. 
Sec. 118. Conforming amendments. 
Subtitle B—Improvement of Mission Supervision 
Sec. 121. Transfer of program and activities approval and housing goal over-
sight. 
Sec. 122. Review by Director of new programs and activities of enterprises. 
Sec. 123. Conforming loan limits. 
Sec. 124. Annual housing report regarding regulated entities. 
Sec. 125. Revision of housing goals. 
Sec. 126. Duty to serve underserved markets. 
Sec. 127. Monitoring and enforcing compliance with housing goals. 
Sec. 128. Affordable housing fund. 
Sec. 129. Consistency with mission. 
Sec. 130. Enforcement. 
Sec. 131. Conforming amendments. 
Subtitle C—Prompt Corrective Action 
Sec. 141. Capital classifications. 
Sec. 142. Supervisory actions applicable to undercapitalized regulated entities.
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Sec. 143. Supervisory actions applicable to significantly undercapitalized regu-
lated entities. 
Sec. 144. Authority over critically undercapitalized regulated entities. 
Sec. 145. Conforming amendments. 
Subtitle D—Enforcement Actions 
Sec. 161. Cease-and-desist proceedings. 
Sec. 162. Temporary cease-and-desist proceedings. 
Sec. 163. Prejudgment attachment. 
Sec. 164. Enforcement and jurisdiction. 
Sec. 165. Civil money penalties. 
Sec. 166. Removal and prohibition authority. 
Sec. 167. Criminal penalty. 
Sec. 168. Subpoena authority. 
Sec. 169. Conforming amendments. 
Subtitle E—General Provisions 
Sec. 181. Boards of enterprises. 
Sec. 182. Report on portfolio operations, safety and soundness, and mission of 
enterprises. 
Sec. 183. Conforming and technical amendments. 
Sec. 184. Study of alternative secondary market systems. 
Sec. 185. Effective date. 
TITLE II—FEDERAL HOME LOAN BANKS 
Sec. 201. Definitions. 
Sec. 202. Directors. 
Sec. 203. Federal Housing Finance Agency oversight of Federal Home Loan 
Banks. 
Sec. 204. Joint activities of banks. 
Sec. 205. Sharing of information between Federal Home Loan Banks. 
Sec. 206. Reorganization of banks and voluntary merger. 
Sec. 207. Securities and Exchange Commission disclosure. 
Sec. 208. Community financial institution members. 
Sec. 209. Technical and conforming amendments. 
Sec. 210. Study of affordable housing program use for long-term care facilities. 
Sec. 211. Effective date. 
TITLE III—TRANSFER OF FUNCTIONS, PERSONNEL, AND PROP-
ERTY OF OFFICE OF FEDERAL HOUSING ENTERPRISE OVER-
SIGHT, FEDERAL HOUSING FINANCE BOARD, AND DEPART-
MENT OF HOUSING AND URBAN DEVELOPMENT 
Subtitle A—Office of Federal Housing Enterprise Oversight 
Sec. 301. Abolishment of OFHEO. 
Sec. 302. Continuation and coordination of certain regulations. 
Sec. 303. Transfer and rights of employees of OFHEO. 
Sec. 304. Transfer of property and facilities. 
Subtitle B—Federal Housing Finance Board 
Sec. 321. Abolishment of the Federal Housing Finance Board. 
Sec. 322. Continuation and coordination of certain regulations.
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Sec. 323. Transfer and rights of employees of the Federal Housing Finance 
Board. 
Sec. 324. Transfer of property and facilities. 
Subtitle C—Department of Housing and Urban Development 
Sec. 341. Termination of enterprise-related functions. 
Sec. 342. Continuation and coordination of certain regulations. 
Sec. 343. Transfer and rights of employees. 
Sec. 344. Transfer of appropriations, property, and facilities. 
SEC. 2. DEFINITIONS. 
Section 1303 of the Housing and Community Devel-
opment Act of 1992 (12 U.S.C. 4502) is amended— 
(1) in paragraph (7), by striking ‘‘an enter-
prise’’ and inserting ‘‘a regulated entity’’; 
(2) by striking ‘‘the enterprise’’ each place such 
term appears (except in paragraphs (4) and (18)) 
and inserting ‘‘the regulated entity’’; 
(3) in paragraph (5), by striking ‘‘Office of 
Federal Housing Enterprise Oversight of the De-
partment of Housing and Urban Development’’ and 
inserting ‘‘Federal Housing Finance Agency’’; 
(4) in each of paragraphs (8), (9), (10), and 
(19), by striking ‘‘Secretary’’ each place that term 
appears and inserting ‘‘Director’’; 
(5) in paragraph (13), by inserting ‘‘, with re-
spect to an enterprise,’’ after ‘‘means’’; 
(6) by redesignating paragraphs (16) through 
(19) as paragraphs (20) through (23), respectively; 
(7) by striking paragraphs (14) and (15) and 
inserting the following new paragraphs:
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‘‘(18) REGULATED ENTITY.—The term ‘regu-
lated entity’ means— 
‘‘(A) the Federal National Mortgage Asso-
ciation and any affiliate thereof; 
‘‘(B) the Federal Home Loan Mortgage 
Corporation and any affiliate thereof; and 
‘‘(C) each Federal home loan bank. 
‘‘(19) 
REGULATED
ENTITY-AFFILIATED 
PARTY.—The term ‘regulated entity-affiliated party’ 
means— 
‘‘(A) any director, officer, employee, or 
controlling stockholder of, or agent for, a regu-
lated entity; 
‘‘(B) any shareholder, affiliate, consultant, 
or joint venture partner of a regulated entity, 
and any other person, as determined by the Di-
rector (by regulation or on a case-by-case basis) 
that participates in the conduct of the affairs of 
a regulated entity; 
‘‘(C) any independent contractor for a reg-
ulated entity (including any attorney, appraiser, 
or accountant), if— 
‘‘(i) the independent contractor know-
ingly or recklessly participates in—