295
lated entity, issue and serve upon such party an 
order that—
‘‘(i) removes such party from office or 
prohibits such party from further partici-
pation in any manner in the conduct of the 
affairs of the regulated entity without the 
prior written consent of the Director; and 
‘‘(ii) prohibits the regulated entity 
from releasing to or on behalf of the regu-
lated entity-affiliated party any compensa-
tion or other payment of money or other 
thing of current or potential value in con-
nection with the termination of employ-
ment or office of the party. 
‘‘(B) 
PROVISIONS
APPLICABLE
TO 
ORDER.—
‘‘(i) COPY.—A copy of any order 
under paragraph (2)(A) shall also be 
served upon the regulated entity, where-
upon the regulated entity-affiliated party 
who is subject to the order (if a director or 
an officer) shall cease to be a director or 
officer of such regulated entity. 
‘‘(ii) EFFECT OF ACQUITTAL.—A find-
ing of not guilty or other disposition of the
296
charge shall not preclude the Director from 
instituting proceedings after such finding 
or disposition to remove such party from 
office or to prohibit further participation in 
regulated entity affairs, and to prohibit 
compensation or other payment of money 
or other thing of current or potential value 
in connection with any resignation, re-
moval, retirement, or other termination of 
employment or office of the party, pursu-
ant to subsections (a), (d), or (e) of this 
section. 
‘‘(iii) EFFECTIVE
PERIOD.—Any no-
tice of suspension or order of removal 
issued under this subsection shall remain 
effective and outstanding until the comple-
tion of any hearing or appeal authorized 
under paragraph (4) unless terminated by 
the Director. 
‘‘(3) AUTHORITY OF REMAINING BOARD MEM-
BERS.—If at any time, because of the suspension of 
one or more directors pursuant to this section, there 
shall be on the board of directors of a regulated enti-
ty less than a quorum of directors not so suspended, 
all powers and functions vested in or exercisable by
297
such board shall vest in and be exercisable by the di-
rector or directors on the board not so suspended, 
until such time as there shall be a quorum of the 
board of directors. In the event all of the directors 
of a regulated entity are suspended pursuant to this 
section, the Director shall appoint persons to serve 
temporarily as directors in their place and stead 
pending the termination of such suspensions, or 
until such time as those who have been suspended 
cease to be directors of the regulated entity and 
their respective successors take office. 
‘‘(4) HEARING
REGARDING
CONTINUED
PAR-
TICIPATION.—Within 30 days from service of any 
notice of suspension or order of removal issued pur-
suant to paragraph (1) or (2) of this subsection, the 
regulated entity-affiliated party concerned may re-
quest in writing an opportunity to appear before the 
Director to show that the continued service to or 
participation in the conduct of the affairs of the reg-
ulated entity by such party does not, or is not likely 
to, pose a threat to the interests of the regulated en-
tity or threaten to impair public confidence in the 
regulated entity. Upon receipt of any such request, 
the Director shall fix a time (not more than 30 days 
after receipt of such request, unless extended at the
298
request of such party) and place at which such party 
may appear, personally or through counsel, before 
one or more members of the Director or designated 
employees of the Director to submit written mate-
rials (or, at the discretion of the Director, oral testi-
mony) and oral argument. Within 60 days of such 
hearing, the Director shall notify such party whether 
the suspension or prohibition from participation in 
any manner in the conduct of the affairs of the reg-
ulated entity will be continued, terminated, or other-
wise modified, or whether the order removing such 
party from office or prohibiting such party from fur-
ther participation in any manner in the conduct of 
the affairs of the regulated entity, and prohibiting 
compensation in connection with termination will be 
rescinded or otherwise modified. Such notification 
shall contain a statement of the basis for the Direc-
tor’s decision, if adverse to such party. The Director 
is authorized to prescribe such rules as may be nec-
essary to effectuate the purposes of this subsection. 
‘‘(i) HEARINGS AND JUDICIAL REVIEW.—
‘‘(1) VENUE
AND
PROCEDURE.—Any hearing 
provided for in this section shall be held in the Dis-
trict of Columbia or in the Federal judicial district 
in which the headquarters of the regulated entity is
299
located, unless the party afforded the hearing con-
sents to another place, and shall be conducted in ac-
cordance with the provisions of chapter 5 of title 5, 
United States Code. After such hearing, and within 
90 days after the Director has notified the parties 
that the case has been submitted to it for final deci-
sion, it shall render its decision (which shall include 
findings of fact upon which its decision is predi-
cated) and shall issue and serve upon each party to 
the proceeding an order or orders consistent with 
the provisions of this section. Judicial review of any 
such order shall be exclusively as provided in this 
subsection. Unless a petition for review is timely 
filed in a court of appeals of the United States, as 
provided in paragraph (2), and thereafter until the 
record in the proceeding has been filed as so pro-
vided, the Director may at any time, upon such no-
tice and in such manner as it shall deem proper, 
modify, terminate, or set aside any such order. Upon 
such filing of the record, the Director may modify, 
terminate, or set aside any such order with permis-
sion of the court. 
‘‘(2) REVIEW OF ORDER.—Any party to any 
proceeding under paragraph (1) may obtain a review 
of any order served pursuant to paragraph (1)
300
(other than an order issued with the consent of the 
regulated entity or the regulated entity-affiliated 
party concerned, or an order issued under subsection 
(h) of this section) by the filing in the United States 
Court of Appeals for the District of Columbia Cir-
cuit or court of appeals of the United States for the 
circuit in which the headquarters of the regulated 
entity is located, within 30 days after the date of 
service of such order, a written petition praying that 
the order of the Director be modified, terminated, or 
set aside. A copy of such petition shall be forthwith 
transmitted by the clerk of the court to the Director, 
and thereupon the Director shall file in the court the 
record in the proceeding, as provided in section 2112 
of title 28, United States Code. Upon the filing of 
such petition, such court shall have jurisdiction, 
which upon the filing of the record shall (except as 
provided in the last sentence of paragraph (1)) be 
exclusive, to affirm, modify, terminate, or set aside, 
in whole or in part, the order of the Director. Re-
view of such proceedings shall be had as provided in 
chapter 7 of title 5, United States Code. The judg-
ment and decree of the court shall be final, except 
that the same shall be subject to review by the Su-
301
preme Court upon certiorari, as provided in section 
1254 of title 28, United States Code. 
‘‘(3) PROCEEDINGS NOT TREATED AS STAY.—
The commencement of proceedings for judicial re-
view under paragraph (2) shall not, unless specifi-
cally ordered by the court, operate as a stay of any 
order issued by the Director.’’. 
(b) CONFORMING AMENDMENTS.—
(1) 1992 ACT.—Section 1317(f) of the Housing 
and Community Development Act of 1992 (12 
U.S.C. 4517(f)) is amended by striking ‘‘section 
1379B’’ and inserting ‘‘section 1379D’’. 
(2) FANNIE MAE CHARTER ACT.—The second 
sentence of subsection (b) of section 308 of the Fed-
eral National Mortgage Association Charter Act (12 
U.S.C. 1723(b)) is amended by striking ‘‘The’’ and 
inserting ‘‘Except to the extent that action under 
section 1377 of the Housing and Community Devel-
opment Act of 1992 temporarily results in a lesser 
number, the’’. 
(3) FREDDIE MAC ACT.—The second sentence 
of subparagraph (A) of section 303(a)(2) of the 
Federal Home Loan Mortgage Corporation Act (12 
U.S.C. 1452(a)(2)(A)) is amended by striking 
‘‘The’’ and inserting ‘‘Except to the extent that ac-
302
tion under section 1377 of the Housing and Commu-
nity Development Act of 1992 temporarily results in 
a lesser number, the’’. 
SEC. 167. CRIMINAL PENALTY. 
Subtitle C of title XIII of the Housing and Commu-
nity Development Act of 1992 (12 U.S.C. 4631 et seq.) 
is amended by inserting after section 1377 (as added by 
the preceding provisions of this Act) the following new sec-
tion: 
‘‘SEC. 1378. CRIMINAL PENALTY. 
‘‘Whoever, being subject to an order in effect under 
section 1377, without the prior written approval of the Di-
rector, knowingly participates, directly or indirectly, in any 
manner (including by engaging in an activity specifically 
prohibited in such an order) in the conduct of the affairs 
of any regulated entity shall, notwithstanding section 
3571 of title 18, be fined not more than $1,000,000, im-
prisoned for not more than 5 years, or both.’’. 
SEC. 168. SUBPOENA AUTHORITY. 
Section 1379D(c) of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4641(c)), as so re-
designated by section 166(a)(1) of this Act, is further 
amended—
303
(1) by striking ‘‘request the Attorney General 
of the United States to’’ and inserting ‘‘, in the dis-
cretion of the Director,’’; 
(2) by inserting ‘‘or request that the Attorney 
General of the United States bring such an action,’’ 
after ‘‘District of Columbia,’’; and 
(3) by striking ‘‘or may, under the direction 
and control of the Attorney General, bring such an 
action’’. 
SEC. 169. CONFORMING AMENDMENTS. 
Subtitle C of title XIII of the Housing and Commu-
nity Development Act of 1992 (12 U.S.C. 4631 et seq.), 
as amended by the preceding provisions of this Act, is 
amended—
(1) in section 1372(c)(1) (12 U.S.C. 4632(c)), 
by striking ‘‘that enterprise’’ and inserting ‘‘that 
regulated entity’’; 
(2) in section 1379 (12 U.S.C. 4637), as so re-
designated by section 166(a)(1) of this Act—
(A) by inserting ‘‘, or of a regulated entity-
affiliated party,’’ before ‘‘shall not affect’’; and 
(B) by striking ‘‘such director or executive 
officer’’ each place such term appears and in-
serting ‘‘such director, executive officer, or reg-
ulated entity-affiliated party’’;
304
(3) in section 1379A (12 U.S.C. 4638), as so 
redesignated by section 166(a)(1) of this Act, by in-
serting ‘‘or against a regulated entity-affiliated 
party,’’ before ‘‘or impair’’; 
(4) by striking ‘‘An enterprise’’ each place such 
term appears in such subtitle and inserting ‘‘A regu-
lated entity’’; 
(5) by striking ‘‘an enterprise’’ each place such 
term appears in such subtitle and inserting ‘‘a regu-
lated entity’’; 
(6) by striking ‘‘the enterprise’’ each place such 
term appears in such subtitle and inserting ‘‘the reg-
ulated entity’’; and 
(7) by striking ‘‘any enterprise’’ each place such 
term appears in such subtitle and inserting ‘‘any 
regulated entity’’. 
Subtitle E—General Provisions 
SEC. 181. BOARDS OF ENTERPRISES. 
(a) FANNIE MAE.—
(1) IN GENERAL.—Section 308(b) of the Fed-
eral National Mortgage Association Charter Act (12 
U.S.C. 1723(b)) is amended—
(A) in the first sentence, by striking 
‘‘eighteen persons, five of whom shall be ap-
pointed annually by the President of the United