200 
(C) in the third sentence— 
(i) by striking ‘‘appointed or’’; and 
(ii) by striking ‘‘, except that any 
such appointed member may be removed 
from office by the President for good 
cause’’; 
(D) in the fourth sentence, by striking 
‘‘elective’’; and 
(E) by striking the fifth sentence. 
(2) TRANSITIONAL
PROVISION.—The amend-
ments made by paragraph (1) shall not apply to any 
appointed position of the board of directors of the 
Federal National Mortgage Association until the ex-
piration of the annual term for such position during 
which the effective date under section 184 occurs. 
(b) FREDDIE MAC.— 
(1) IN
GENERAL.—Paragraph (2) of section 
303(a) of the Federal Home Loan Mortgage Cor-
poration Act (12 U.S.C. 1452(a)(2)) is amended— 
(A) in subparagraph (A)— 
(i) in the first sentence, by striking ‘‘5 
of whom shall be appointed annually by 
the President of the United States and the 
remainder of whom’’ and inserting ‘‘who’’; 
and
201 
(ii) in the second sentence, by striking 
‘‘appointed by the President of the United 
States’’; 
(B) in subparagraph (B)— 
(i) by striking ‘‘such or’’; and 
(ii) by striking ‘‘, except that any ap-
pointed member may be removed from of-
fice by the President for good cause’’; and 
(C) in subparagraph (C)— 
(i) by striking the first sentence; and 
(ii) by striking ‘‘elective’’. 
(2) TRANSITIONAL
PROVISION.—The amend-
ments made by paragraph (1) shall not apply to any 
appointed position of the Board of Directors of the 
Federal Home Loan Mortgage Corporation until the 
expiration of the annual term for such position dur-
ing which the effective date under section 184 oc-
curs. 
SEC. 182. REPORT ON PORTFOLIO OPERATIONS, SAFETY 
AND SOUNDNESS, AND MISSION OF ENTER-
PRISES. 
Not later than the expiration of the 12-month period 
beginning on the effective date under section 184, the Di-
rector of the Federal Housing Finance Agency shall sub-
mit a report to the Congress which shall include—
202 
(1) a description of the portfolio holdings of the 
enterprises (as such term is defined in section 1303 
of the Housing and Community Development Act of 
1992 (12 U.S.C. 4502) in mortgages (including 
whole loans and mortgage-backed securities), non- 
mortgages, and other assets; 
(2) a description of the risk implications for the 
enterprises of such holdings and the consequent risk 
management undertaken by the enterprises (includ-
ing the use of derivatives for hedging purposes), 
compared with off-balance sheet obligations of the 
enterprises (including mortgage-backed securities 
guaranteed by the enterprises); 
(3) an analysis of portfolio holdings for safety 
and soundness purposes; 
(4) an assessment of whether portfolio holdings 
fulfill the mission purposes of the enterprises under 
the Federal National Mortgage Association Charter 
Act and the Federal Home Loan Mortgage Corpora-
tion Act; and 
(5) an analysis of the potential systemic risk 
implications for the enterprises, the housing and 
capital markets, and the financial system of portfolio 
holdings, and whether such holdings should be lim-
ited or reduced over time.
203 
SEC. 183. CONFORMING AND TECHNICAL AMENDMENTS. 
(a) AMENDMENT TO 1992 ACT.—Title XIII of the 
Housing and Community Development Act of 1992 is 
amended by striking section 1383 (12 U.S.C. 1451 note). 
(b) AMENDMENT
TO TITLE 18, UNITED STATES 
CODE.—Section 1905 of title 18, United States Code, is 
amended by striking ‘‘Office of Federal Housing Enter-
prise Oversight’’ and inserting ‘‘Federal Housing Finance 
Agency’’ . 
(c) AMENDMENTS TO FLOOD DISASTER PROTECTION 
ACT OF 1973.—Section 102(f)(3)(A) of the Flood Dis-
aster Protection Act of 1973 (42 U.S.C. 4012a(f)(3)(A)) 
is amended by striking ‘‘Director of the Office of Federal 
Housing Enterprise Oversight of the Department of Hous-
ing and Urban Development’’ and inserting ‘‘Director of 
the Federal Housing Finance Agency’’. 
(d) AMENDMENT TO DEPARTMENT OF HOUSING AND 
URBAN DEVELOPMENT ACT.—Section 5 of the Depart-
ment of Housing and Urban Development Act (42 U.S.C. 
3534) is amended by striking subsection (d). 
(e) AMENDMENT
TO TITLE 5, UNITED STATES 
CODE.—Section 5313 of title 5, United States Code, is 
amended by striking the item relating to the Director of 
the Office of Federal Housing Enterprise Oversight, De-
partment of Housing and Urban Development and insert-
ing the following new item:
204 
‘‘Director of the Federal Housing Finance Agency.’’. 
SEC. 184. EFFECTIVE DATE. 
Except as specifically provided otherwise in this title, 
the amendments made by this title shall take effect on, 
and shall apply beginning on, the expiration of the 1-year 
period beginning on the date of the enactment of this Act. 
TITLE II—FEDERAL HOME LOAN 
BANKS 
SEC. 201. DEFINITIONS. 
Section 2 of the Federal Home Loan Bank Act (12 
U.S.C. 1422) is amended— 
(1) by striking paragraphs (1) and (10); 
(2) by redesignating paragraphs (2) through 
(9) as paragraphs (1) through (8), respectively; 
(3) by redesignating paragraphs (11) through 
(13) as paragraphs (9) through (11), respectively; 
and 
(4) by adding at the end the following: 
‘‘(12) DIRECTOR.—The term ‘Director’ means 
the Director of the Federal Housing Finance Agen-
cy. 
‘‘(13) AGENCY.—The term ‘Agency’ means the 
Federal Housing Finance Agency.’’.
205 
SEC. 202. DIRECTORS. 
(a) ELECTION.—Section 7 of the Federal Home Loan 
Bank Act (12 U.S.C. 1427) is amended— 
(1) by striking subsection (a) and inserting the 
following: 
‘‘(a) NUMBER; ELECTION; QUALIFICATIONS; CON-
FLICTS OF INTEREST.— 
‘‘(1) IN GENERAL.—Subject to paragraph (2), 
and except to the extent that action under section 
1377 of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 results in a lesser 
number, the management of each Federal Home 
Loan Bank shall be vested in a board of 13 direc-
tors, or such other number as the Director deter-
mines appropriate, each of whom— 
‘‘(A) shall be elected by the members; and 
‘‘(B) shall be either a bona fide resident of 
the district in which such bank is located or an 
officer or director of a member of such bank lo-
cated in that district. 
‘‘(2) PUBLIC INTEREST.—At least 2 directors 
elected under paragraph (1) shall be representatives 
chosen from organizations with more than a 2-year 
history of representing consumer or community in-
terests on banking services, credit needs, housing, or 
financial consumer protections.’’;
206 
(2) in subsection (d)— 
(A) in the first sentence, by striking ‘‘, 
whether elected or appointed,’’; 
(B) in the second sentence, by striking ‘‘or 
appointed’’; and 
(C) in the third sentence, by striking ‘‘an 
elective’’ each place such term appears and in-
serting ‘‘a’’; 
(3) by striking ‘‘elective’’ each place such term 
appears (except in subsection (e)); and 
(4) in subsection (f), by striking ‘‘appointed or’’ 
each place that term appears. 
(b) TERMS.— 
(1) IN GENERAL.—Section 7(d) of the Federal 
Home Loan Bank Act (12 U.S.C. 1427(i)) is 
amended— 
(A) in the first sentence, by striking ‘‘3 
years’’ and inserting ‘‘4 years’’; and 
(B) in the second sentence— 
(i) by striking ‘‘Federal Home Loan 
Bank System Modernization Act of 1999’’ 
and inserting ‘‘Federal Housing Finance 
Reform Act of 2005’’; and 
(ii) by striking ‘‘1/3’’ and inserting 
‘‘1/4’’.
207 
(2) SAVINGS
PROVISION.—The amendments 
made by paragraph (1) shall not apply to the term 
of office of any director of a Federal home loan bank 
who is serving as of the effective date of this Act 
under section 184, including any director elected to 
fill a vacancy in any such office. 
(c) COMPENSATION.—Subsection (i) of section 7 of 
the Federal Home Loan Bank Act (12 U.S.C. 1427(i)) 
is amended to read as follows: 
‘‘(i) DIRECTORS’ COMPENSATION.— 
‘‘(1) IN GENERAL.—Each Federal home loan 
bank may pay the directors on the board of directors 
for the bank reasonable compensation for the time 
required of such directors, and reasonable expenses 
incurred by such directors, in connection with service 
on the board of directors, in accordance with resolu-
tions adopted by the board of directors and subject 
to the approval of the board. 
‘‘(2) ANNUAL REPORT BY THE BOARD.—The 
Director shall include, in the annual report sub-
mitted to the Congress pursuant to section 1319B of 
the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992, information regarding 
the compensation and expenses paid by the Federal
208 
home loan banks to the directors on the boards of 
directors of the banks.’’. 
SEC. 203. FEDERAL HOUSING FINANCE AGENCY OVER-
SIGHT OF FEDERAL HOME LOAN BANKS. 
The Federal Home Loan Bank Act (12 U.S.C. 1421 
et seq.), other than in provisions of that Act added or 
amended otherwise by this Act, is amended— 
(1) by striking sections 2A and 2B (12 U.S.C. 
1422a, 1422b); 
(2) in section 6 (12 U.S.C. 1426(b)(1))— 
(A) in subsection (b)(1), in the matter pre-
ceding subparagraph (A), by striking ‘‘Finance 
Board approval’’ and inserting ‘‘approval by the 
Director’’; and 
(B) in each of subsections (c)(4)(B) and 
(d)(2), by striking ‘‘Finance Board regulations’’ 
each place that term appears and inserting 
‘‘regulations of the Director’’; 
(3) in section 8 (12 U.S.C. 1428), in the sec-
tion heading, by striking ‘‘BY THE BOARD’’; 
(4) in section 10(b) (12 U.S.C. 1430), by strik-
ing ‘‘by formal resolution’’; 
(5) in section 18 (12 U.S.C. 1438), by striking 
subsection (b); 
(6) in section 21 (12 U.S.C. 1441)—
209 
(A) in subsection (b)— 
(i) in paragraph (5), by striking 
‘‘Chairperson of the Federal Housing Fi-
nance Board’’ and inserting ‘‘Director’’; 
and 
(ii) in the heading for paragraph (8), 
by striking ‘‘FEDERAL HOUSING FINANCE 
BOARD’’ and inserting ‘‘DIRECTOR’’; and 
(B) in subsection (i), in the heading for 
paragraph (2), by striking ‘‘FEDERAL HOUSING 
FINANCE BOARD’’ and inserting ‘‘DIRECTOR’’; 
(7) in section 23 (12 U.S.C. 1443), by striking 
‘‘Board of Directors of the Federal Housing Finance 
Board’’ and inserting ‘‘Director’’; 
(8) by striking ‘‘the Board’’ each place such 
term appears in such Act (except in subsections (a), 
(b), and (c) of section 11 (12 U.S.C. 1431), section 
15 (12 U.S.C. 1435), section 21(f)(2) (12 U.S.C. 
1441(f)(2)), 
subsections 
(a), 
(k)(2)(B)(i), 
and 
(n)(6)(C)(ii) of section 21A (12 U.S.C. 1441a), sub-
sections (e)(7), (f)(2)(C), and (k)(7)(B)(ii) of section 
21B (12 U.S.C. 1441b), the first two places such 
term appears in section 22 (12 U.S.C. 1442), and 
section 25 (12 U.S.C. 1445)) and inserting ‘‘the Di-
rector’’;
210 
(9) by striking ‘‘The Board’’ each place such 
term appears in such Act (except in sections 7(e) 
(12 U.S.C. 1427(e)), and 11(b) (12 U.S.C. 1431(b)) 
and inserting ‘‘The Director’’; 
(10) by striking ‘‘the Board’s’’ each place such 
term appears in such Act and inserting ‘‘the Direc-
tor’s’’; 
(11) by striking ‘‘The Board’s’’ each place such 
term appears in such Act and inserting ‘‘The Direc-
tor’s’’; 
(12) by striking ‘‘The Finance Board’’ each 
place such term appears in such Act and inserting 
‘‘The Director’’; 
(13) by striking ‘‘the Finance Board’’ each 
place such term appears in such Act and inserting 
‘‘the Director’’; 
(14) by striking ‘‘Federal Housing Finance 
Board’’ each place such term appears and inserting 
‘‘Director’’; 
(15) by striking ‘‘Federal Home Loan Bank 
Board’’ each place such term appears in such Act 
(except 
in 
section 
21A(n)(9)(B) 
(12 
U.S.C.1441a(n)(9)(B)) and inserting ‘‘Director’’; 
(16) in section 11(i) (12 U.S.C. 1431(i), by 
striking ‘‘the Chairperson of’’; and
211 
(17) in section 21(e)(9) (12 U.S.C. 1441(e)(9)), 
by striking ‘‘Chairperson of the’’. 
SEC. 204. DEBT ISSUING FACILITY. 
The Federal Home Loan Bank Act (12 U.S.C. 1421 
et seq.) is amended by inserting after section 11 the fol-
lowing: 
‘‘SEC. 11A. FEDERAL HOME LOAN BANK FINANCE COR-
PORATION. 
‘‘(a) ESTABLISHMENT.— 
‘‘(1) IN GENERAL.—There is hereby established 
the Federal Home Loan Bank Finance Corporation, 
which shall be a jointly owned subsidiary of the Fed-
eral Home Loan Banks (in this section referred to 
as the ‘Corporation’). 
‘‘(2) PURPOSES.—The purpose of the Corpora-
tion shall be— 
‘‘(A) to issue and service the consolidated 
obligations of the Federal Home Loan Banks in 
accordance with this Act; and 
‘‘(B) to perform all other necessary and 
proper functions in relation to the issuance and 
service of such obligations, as fiscal agent on 
behalf of the Federal Home Loan Banks, and 
any other functions performed by the Office of 
Finance on behalf of the Financing Corporation
212 
(established under section 21) and the Resolu-
tion Funding Corporation (established under 
section 21B). 
‘‘(3) TRANSFER OF FUNCTIONS.— 
‘‘(A) IN GENERAL.—The functions of the 
Office of Finance of the Federal Home Loan 
Banks, shall be transferred to the Corporation 
immediately upon the conclusion of the organi-
zational meeting of the board of directors (re-
ferred to in this subsection as the ‘effective 
time’) established under subsection (c). 
‘‘(B) 
ORGANIZATIONAL
MEETING.—The 
organizational meeting of the board of directors 
of the Corporation shall occur as soon as prac-
ticable after the date of enactment of the Fed-
eral Housing Finance Reform Act of 2005. 
‘‘(C) INTERIM
PROCEDURES.—Until the 
transfer under subparagraph (A), the Office of 
Finance established as a joint office of the Fed-
eral Home Loan Banks (referred to in this sub-
section as the ‘predecessor office’) shall con-
tinue to operate as if this section had not been 
enacted. 
‘‘(D) REFERENCES.—After the transfer 
under subparagraph (A), any reference under
213 
any Federal law to the Office of Finance and 
the Managing Director of the Office of Finance 
shall be deemed to be references to the Cor-
poration and the chief executive officer of the 
Corporation, respectively. 
‘‘(4) SUCCESSION.— 
‘‘(A) ASSETS
AND
LIABILITIES.—At the 
transfer under paragraph (3)(A), the Corpora-
tion shall, by operation of law and without any 
further action by the Federal Housing Finance 
Board, the predecessor office, or any court, suc-
ceed to the assets of, and assume all debts, obli-
gations, contracts, and other liabilities of the 
predecessor office, matured or unmatured, ac-
crued or absolute, contingent or otherwise, and 
whether or not reflected or reserved against on 
balance sheets, books of account, or records of 
the predecessor office. 
‘‘(B) CONTRACTS.—At the time of the 
transfer under paragraph (3)(A), the existing 
contractual obligations of the Federal Housing 
Finance Board, solely in its capacity as issuer 
of consolidated obligations of the Federal Home 
Loan Banks and the predecessor office shall, by 
operation of law and without any further action
214 
by the Federal Housing Finance Board, the 
predecessor office, or any court, become obliga-
tions, entitlements, and instruments of the Cor-
poration. 
‘‘(C) TAXATION.—The succession to as-
sets, assumption of liabilities, conversion of ob-
ligations and instruments, and effectuation of 
any other transaction by the Corporation to 
carry out this subsection shall not be treated as 
a taxable event under the laws of any State, or 
any political subdivision thereof. 
‘‘(b) POWERS.—Subject to the provisions of this Act, 
and such regulations as the Director may prescribe, the 
Corporation shall have the power to— 
‘‘(1) issue voting capital stock to the Federal 
Home Loan Banks; 
‘‘(2) issue and service Federal Home Loan 
Bank consolidated notes, consolidated bonds, con-
solidated debentures and other consolidated obliga-
tions under section 11 of this Act on behalf of the 
Federal Home Loan Banks; 
‘‘(3) determine the amount, maturities, rate of 
interest, terms, and other conditions of Federal 
Home Loan Bank consolidated obligations; 
‘‘(4) adopt, alter, and use a corporate seal;
215 
‘‘(5) make contracts; 
‘‘(6) sue and be sued in the corporate capacity 
of the Corporation, and to complain and defend in 
any action brought by or against the Corporation in 
any court of competent jurisdiction; 
‘‘(7) determine the terms and conditions under 
which the Corporation may indemnify its directors, 
officers, employees, and agents; 
‘‘(8) determine and implement the methodology 
for assessments of the Federal Home Loan Banks to 
fund all of the expenses of the Corporation; and 
‘‘(9) exercise such incidental powers not incon-
sistent with the provisions of this Act as are nec-
essary or advisable to carry out the purposes of the 
Corporation. 
‘‘(c) BOARD OF DIRECTORS.— 
‘‘(1) ESTABLISHMENT.—The management of 
the Corporation shall be vested in a board of direc-
tors composed of the president of each of the Fed-
eral Home Loan Banks, ex officio. 
‘‘(2) DUTIES.—The board of directors shall ad-
minister the affairs of the Corporation in accordance 
with the provisions of this Act. 
‘‘(3) INTERIM
APPOINTMENTS.—If the presi-
dent of any Federal Home Loan Bank is vacant, the
216 
person serving in such capacity on an acting basis 
shall serve on the board of directors of the Corpora-
tion until replaced by the next person to fill the of-
fice of president of the Federal Home Loan Bank. 
‘‘(4) POWERS.—The board of directors shall ex-
ercise such powers as may be necessary or advisable 
to carry out the purposes of this section, including 
the power to— 
‘‘(A) set policies for the management and 
operation of the Corporation; 
‘‘(B) approve a strategic business plan for 
the Corporation; 
‘‘(C) review, adopt and monitor annual op-
eration and capital budgets of the Corporation; 
‘‘(D) constitute and perform the duties of 
an audit committee, which to the extent pos-
sible shall operate consistent with— 
‘‘(i) the requirements established for 
the Federal Home Loan Banks; and 
‘‘(ii) the requirements pertaining to 
audit committee reports set forth in the 
rules of Securities and Exchange Commis-
sion; 
‘‘(E) select, employ, determine the com-
pensation for, and assign the duties and func-