151 
cross-currency rate swap agreement, 
currency future, or currency option 
purchased or any other similar agree-
ment; and 
‘‘(II) includes any combination of 
such agreements and any option to 
enter into any such agreement. 
‘‘(vii) 
TREATMENT
OF
MASTER 
AGREEMENT
AS
QUALIFIED
FINANCIAL 
CONTRACT.—Any master agreement for 
any agreements described under this sub-
paragraph, together with all supplements 
to such master agreement, shall be treated 
as 1 qualified financial contract. 
‘‘(viii) TRANSFER.—The term ‘trans-
fer’ has the meaning given to such term in 
section 101 of title 11, United States 
Code. 
‘‘(E) CERTAIN PROTECTIONS IN EVENT OF 
APPOINTMENT
OF
CONSERVATOR.—Notwith-
standing any other provision of this Act (other 
than paragraph (12) of this subsection), any 
other Federal law, or the law of any State, no 
person shall be stayed or prohibited from exer-
cising—
152 
‘‘(i) any right such person has to 
cause the termination, liquidation, or accel-
eration of any qualified financial contract 
with an enterprise in a conservatorship 
based upon a default under such financial 
contract which is enforceable under appli-
cable noninsolvency law; 
‘‘(ii) any right under any security ar-
rangement relating to such qualified finan-
cial contracts; or 
‘‘(iii) any right to offset or net out 
any termination values, payment amounts, 
or other transfer obligations arising under 
or in connection with such qualified finan-
cial contracts. 
‘‘(9) TRANSFER OF QUALIFIED FINANCIAL CON-
TRACTS.—In making any transfer of assets or liabil-
ities of an enterprise in default which includes any 
qualified financial contract, the conservator or re-
ceiver for such enterprise shall either— 
‘‘(A) transfer to 1 person— 
‘‘(i) all qualified financial contracts 
between— 
‘‘(I) any person (or any affiliate 
of such person); and
153 
‘‘(II) the enterprise in default; 
‘‘(ii) all claims of such person (or any 
affiliate of such person) against such en-
terprise under any such contract (other 
than any claim which, under the terms of 
any such contract, is subordinated to the 
claims of general unsecured creditors of 
such enterprise); 
‘‘(iii) all claims of such enterprise 
against such person (or any affiliate of 
such person) under any such contract; and 
‘‘(iv) all property securing any claim 
described 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 an 
enterprise in default makes any transfer of 
the assets and liabilities of such enterprise, 
and
154 
‘‘(ii) the transfer includes any quali-
fied financial contract, 
the conservator or receiver shall use best efforts 
to notify any person who is a party to any such 
contract of such transfer by 12 p.m. (noon) 
(Eastern Standard Time) on the business day 
following such transfer. 
‘‘(B) BUSINESS DAY DEFINED.—For pur-
poses of this paragraph, the term ‘business day’ 
means any day other than any Saturday, Sun-
day, or any day on which either the New York 
Stock Exchange or the Federal Reserve Bank 
of New York is closed. 
‘‘(11) CERTAIN
SECURITY
INTERESTS
NOT 
AVOIDABLE.—No provision of this subsection shall 
be construed as permitting the avoidance of any le-
gally enforceable or perfected security interest in any 
of the assets of any enterprise, except where such an 
interest is taken in contemplation of the insolvency 
of the enterprise, or with the intent to hinder, delay, 
or defraud the enterprise or the creditors of such en-
terprise. 
‘‘(12) AUTHORITY TO ENFORCE CONTRACTS.— 
‘‘(A) IN GENERAL.—Notwithstanding any 
provision of a contract providing for termi-
155 
nation, default, acceleration, or exercise of 
rights upon, or solely by reason of, insolvency 
or the appointment of a conservator or receiver, 
the conservator or receiver may enforce any 
contract, other than a contract for director’s or 
officer’s liability or an enterprise bond, entered 
into by the enterprise. 
‘‘(B) CERTAIN RIGHTS NOT AFFECTED.— 
No provision of this paragraph may be con-
strued as impairing or affecting any right of the 
conservator or receiver to enforce or recover 
under a director’s or officer’s liability insurance 
contract or enterprise bond under other applica-
ble law. 
‘‘(C) CONSENT REQUIREMENT.— 
‘‘(i) IN GENERAL.—Except as other-
wise provided under this section, no person 
may exercise any right or power to termi-
nate, accelerate, or declare a default under 
any contract to which an enterprise is a 
party, or to obtain possession of or exercise 
control over any property of the enterprise, 
or affect any contractual rights of the en-
terprise, without the consent of the conser-
156 
vator or receiver, as appropriate, for a pe-
riod of— 
‘‘(I) 45 days after the date of ap-
pointment of a conservator; or 
‘‘(II) 90 days after the date of 
appointment of a receiver. 
‘‘(ii) 
EXCEPTIONS.—This 
subpara-
graph shall— 
‘‘(I) not apply to a director’s or 
officer’s liability insurance contract; 
‘‘(II) not apply to the rights of 
parties to certain qualified financial 
contracts under subsection (d)(8); and 
‘‘(III) not be construed as per-
mitting the conservator or receiver to 
fail to comply with otherwise enforce-
able provisions of such contracts. 
‘‘(e) VALUATION OF CLAIMS IN DEFAULT.— 
‘‘(1) IN GENERAL.—Notwithstanding any other 
provision of Federal law or the law of any State, and 
regardless of the method which the Agency deter-
mines to utilize with respect to an enterprise in de-
fault or in danger of default, including transactions 
authorized under subsection (i), this subsection shall 
govern the rights of the creditors of such enterprise.
157 
‘‘(2) MAXIMUM LIABILITY.—The maximum li-
ability of the Agency, acting as receiver or in any 
other capacity, to any person having a claim against 
the receiver or the enterprise for which such receiver 
is appointed shall equal the lesser of— 
‘‘(A) the amount such claimant would have 
received if the Agency had liquidated the assets 
and liabilities of such enterprise without exer-
cising the authority of the Agency under sub-
section (i) of this section; or 
‘‘(B) the amount of proceeds realized from 
the performance of contracts or sale of the as-
sets of the enterprise. 
‘‘(f) LIMITATION
ON COURT ACTION.—Except as 
provided in this section or at the request of the Director, 
no court may take any action to restrain or affect the exer-
cise of powers or functions of the Agency as a conservator 
or a receiver. 
‘‘(g) LIABILITY OF DIRECTORS AND OFFICERS.— 
‘‘(1) IN GENERAL.—A director or officer of an 
enterprise may be held personally liable for mone-
tary damages in any civil action by, on behalf of, or 
at the request or direction of the Agency, which ac-
tion is prosecuted wholly or partially for the benefit 
of the Agency—
158 
‘‘(A) acting as conservator or receiver of 
such enterprise, or 
‘‘(B) acting based upon a suit, claim, or 
cause of action purchased from, assigned by, or 
otherwise conveyed by such receiver or conser-
vator, 
for gross negligence, including any similar conduct 
or conduct that demonstrates a greater disregard of 
a duty of care (than gross negligence) including in-
tentional tortious conduct, as such terms are defined 
and determined under applicable State law. 
‘‘(2) NO LIMITATION.—Nothing in this para-
graph shall impair or affect any right of the Agency 
under other applicable law. 
‘‘(h) DAMAGES.—In any proceeding related to any 
claim against a director, officer, employee, agent, attorney, 
accountant, appraiser, or any other party employed by or 
providing services to an enterprise, recoverable damages 
determined to result from the improvident or otherwise 
improper use or investment of any assets of the enterprise 
shall include principal losses and appropriate interest. 
‘‘(i) LIMITED-LIFE ENTERPRISE.— 
‘‘(1) ORGANIZATION.— 
‘‘(A) PURPOSE.—If an enterprise is in de-
fault, or if the Agency anticipates that an en-
159 
terprise will default, the Agency may organize a 
limited-life enterprise with those powers and at-
tributes of the enterprise in default or in dan-
ger of default that the Director determines nec-
essary, subject to the provisions of this sub-
section. The Director shall grant a temporary 
charter to the limited-life enterprise, and the 
limited-life enterprise shall operate subject to 
that charter. 
‘‘(B) AUTHORITIES.—Upon the creation of 
a limited-life enterprise under subparagraph 
(A), the limited-life enterprise may— 
‘‘(i) assume such liabilities of the en-
terprise that is in default or in danger of 
default as the Agency may, in its discre-
tion, determine to be appropriate, provided 
that the liabilities assumed shall not exceed 
the amount of assets of the limited-life en-
terprise; 
‘‘(ii) purchase such assets of the en-
terprise that is in default, or in danger of 
default, as the Agency may, in its discre-
tion, determine to be appropriate; and 
‘‘(iii) perform any other temporary 
function which the Agency may, in its dis-
160 
cretion, prescribe in accordance with this 
section. 
‘‘(2) CHARTER.— 
‘‘(A) 
CONDITIONS.—The 
Agency 
may 
grant a temporary charter if the Agency deter-
mines that the continued operation of the enter-
prise in default or in danger of default is in the 
best interest of the national economy and the 
housing markets. 
‘‘(B) LIMITED-LIFE ENTERPRISE TREATED 
AS
BEING
IN
DEFAULT
FOR
CERTAIN
PUR-
POSES.—A limited-life enterprise shall be treat-
ed as an enterprise in default at such times and 
for such purposes as the Agency may, in its dis-
cretion, determine. 
‘‘(C) MANAGEMENT.—A limited-life enter-
prise, upon the granting of its charter, shall be 
under the management of a board of directors 
consisting of not fewer than 5 nor more than 
10 members appointed by the Agency. 
‘‘(D) BYLAWS.—The board of directors of 
a limited-life enterprise shall adopt such bylaws 
as may be approved by the Agency. 
‘‘(3) CAPITAL STOCK.—No capital stock need 
be paid into a limited-life enterprise by the Agency.
161 
‘‘(4) INVESTMENTS.—Funds of a limited-life 
enterprise shall be kept on hand in cash, invested in 
obligations of the United States or obligations guar-
anteed as to principal and interest by the United 
States, or deposited with the Agency, or any Federal 
Reserve bank. 
‘‘(5) EXEMPT
STATUS.—Notwithstanding any 
other provision of Federal or State law, the limited- 
life enterprise, its franchise, property, and income 
shall be exempt from all taxation now or hereafter 
imposed by the United States, by any territory, de-
pendency, or possession thereof, or by any State, 
county, municipality, or local taxing authority. 
‘‘(6) OTHER EXEMPTIONS.—When acting as a 
receiver, the following provisions shall apply with re-
spect to the Agency: 
‘‘(A) The Agency, including its franchise, 
its capital, reserves, and surplus, and its in-
come, shall be exempt from all taxation imposed 
by any State, country, municipality, or local 
taxing authority, except that any real property 
of the Agency shall be subject to State, terri-
torial, county, municipal, or local taxation to 
the same extent according to its value as other 
real property is taxed, except that, notwith-
162 
standing the failure of any person to challenge 
an assessment under State law of the value of 
such property, and the tax thereon, shall be de-
termined as of the period for which such tax is 
imposed. 
‘‘(B) No property of the Agency shall be 
subject to levy, attachment, garnishment, fore-
closure, or sale without the consent of the 
Agency, nor shall any involuntary lien attach to 
the property of the Agency. 
‘‘(C) The Agency shall not be liable for any 
amounts in the nature of penalties or fines, in-
cluding those arising from the failure of any 
person to pay any real property, personal prop-
erty, probate, or recording tax or any recording 
or filing fees when due. 
‘‘(7) WINDING UP.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), unless Congress authorizes the sale 
of the capital stock of the limited-life enter-
prise, not later than 2 years after the date of 
its organization, the Agency shall wind up the 
affairs of the limited-life enterprise. 
‘‘(B) EXTENSION.—The Director may, in 
the discretion of the Director, extend the status
163 
of the limited-life enterprise for 3 additional 1- 
year periods. 
‘‘(8) TRANSFER OF ASSETS AND LIABILITIES.— 
‘‘(A) IN GENERAL.— 
‘‘(i) TRANSFER OF ASSETS AND LI-
ABILITIES.—The Agency, as receiver, may 
transfer any assets and liabilities of an en-
terprise in default, or in danger of default, 
to the limited-life enterprise in accordance 
with paragraph (1). 
‘‘(ii) SUBSEQUENT
TRANSFERS.—At 
any time after a charter is transferred to 
a limited-life enterprise, the Agency, as re-
ceiver, may transfer any assets and liabil-
ities of such enterprise in default, or in 
danger in default, as the Agency may, in 
its discretion, determine to be appropriate 
in accordance with paragraph (1). 
‘‘(iii) 
EFFECTIVE
WITHOUT
AP-
PROVAL.—The transfer of any assets or li-
abilities of an enterprise in default, or in 
danger of default, transferred to a limited- 
life enterprise shall be effective without 
any further approval under Federal or
164 
State law, assignment, or consent with re-
spect thereto. 
‘‘(9) PROCEEDS.—To the extent that available 
proceeds from the limited-life enterprise exceed 
amounts required to pay obligations, such proceeds 
may be paid to the enterprise in default, or in dan-
ger of default. 
‘‘(10) 
POWERS
OF
LIMITED-LIFE
ENTER-
PRISES.— 
‘‘(A) IN GENERAL.—Each limited-life en-
terprise created under this subsection shall have 
all corporate powers of, and be subject to the 
same provisions of law as, the enterprise in de-
fault or in danger of default to which it relates, 
except that— 
‘‘(i) the Agency may— 
‘‘(I) remove the directors of a 
limited-life enterprise; and 
‘‘(II) fix the compensation of 
members of the board of directors and 
senior management, as determined by 
the Agency in its discretion, of a lim-
ited-life enterprise; 
‘‘(ii) the Agency may indemnify the 
representatives for purposes of paragraph
165 
(1)(B), and the directors, officers, employ-
ees, and agents of a limited-life enterprise 
on such terms as the Agency determines to 
be appropriate; and 
‘‘(iii) the board of directors of a lim-
ited-life enterprise— 
‘‘(I) shall elect a chairperson who 
may also serve in the position of chief 
executive officer, except that such per-
son shall not serve either as chair-
person or as chief executive officer 
without the prior approval of the 
Agency; and 
‘‘(II) may appoint a chief execu-
tive officer who is not also the chair-
person, except that such person shall 
not serve as chief executive officer 
without the prior approval of the 
Agency. 
‘‘(B) STAY OF JUDICIAL ACTION.—Any ju-
dicial action to which a limited-life enterprise 
becomes a party by virtue of its acquisition of 
any assets or assumption of any liabilities of an 
enterprise in default shall be stayed from fur-
ther proceedings for a period of up to 45 days
166 
at the request of the limited-life enterprise. 
Such period may be modified upon the consent 
of all parties. 
‘‘(11) NO FEDERAL STATUS.— 
‘‘(A) AGENCY STATUS.—A limited-life en-
terprise is not an agency, establishment, or in-
strumentality of the United States. 
‘‘(B) 
EMPLOYEE
STATUS.—Representa-
tives for purposes of paragraph (1)(B), interim 
directors, directors, officers, employees, or 
agents of a limited-life enterprise are not, solely 
by virtue of service in any such capacity, offi-
cers or employees of the United States. Any 
employee of the Agency or of any Federal in-
strumentality who serves at the request of the 
Agency as a representative for purposes of 
paragraph (1)(B), interim director, director, of-
ficer, employee, or agent of a limited-life enter-
prise shall not— 
‘‘(i) solely by virtue of service in any 
such capacity lose any existing status as 
an officer or employee of the United States 
for purposes of title 5, United States Code, 
or any other provision of law; or
167 
‘‘(ii) receive any salary or benefits for 
service in any such capacity with respect to 
a limited-life enterprise in addition to such 
salary or benefits as are obtained through 
employment with the Agency or such Fed-
eral instrumentality. 
‘‘(j) PROHIBITION OF CHARTER REVOCATION.—In 
no case may a receiver appointed pursuant to this section 
revoke, annul, or terminate the charter of an enterprise. 
‘‘(k) OBTAINING CREDIT BY A LIMITED-LIFE EN-
TERPRISE.— 
‘‘(1) IN GENERAL.—The limited-life enterprise 
may obtain unsecured credit and incur unsecured 
debt in the ordinary course of business. 
‘‘(2) INABILITY
TO
OBTAIN
CREDIT.—If the 
limited-life enterprise is unable to obtain unsecured 
credit the Director may authorize the obtaining of 
credit or the incurring of debt— 
‘‘(A) with priority over any or all adminis-
trative expenses; 
‘‘(B) secured by a lien on property that is 
not otherwise subject to a lien; or 
‘‘(C) secured by a junior lien on property 
that is subject to a lien. 
‘‘(3) LIMITATIONS.—
168 
‘‘(A) IN
GENERAL.—The Director, after 
notice and a hearing, may authorize the obtain-
ing of credit or the incurring of debt secured by 
a senior or equal lien on property that is sub-
ject to a lien (other than mortgages that 
collateralize the mortgage-backed securities 
issued or guaranteed by the enterprise) only 
if— 
‘‘(i) the limited-life enterprise is un-
able to obtain such credit otherwise; and 
‘‘(ii) there is adequate protection of 
the interest of the holder of the lien on the 
property which such senior or equal lien is 
proposed to be granted. 
‘‘(B) BURDEN OF PROOF.—In any hearing 
under this subsection, the Director has the bur-
den of proof on the issue of adequate protec-
tion. 
‘‘(4) AFFECT ON DEBTS AND LIENS.—The re-
versal or modification on appeal of an authorization 
under this subsection to obtain credit or incur debt, 
or of a grant under this section of a priority or a 
lien, does not affect the validity of any debt so in-
curred, or any priority or lien so granted, to an enti-
ty that extended such credit in good faith, whether
169 
or not such entity knew of the pendency of the ap-
peal, unless such authorization and the incurring of 
such debt, or the granting of such priority or lien, 
were stayed pending appeal.’’. 
(b) FEDERAL HOME LOAN BANKS.—Section 26 of 
the Federal Home Loan Bank Act (12 U.S.C. 1446) is 
amended— 
(1) by inserting ‘‘(a)’’ before ‘‘Whenever’’; 
(2) in the first sentence, by inserting ‘‘or pursu-
ant to a determination and notice under section 
1368(d) of the Federal Housing Enterprises Finan-
cial Safety and Soundness Act of 1992 that a Fed-
eral home loan bank is critically undercapitalized,’’ 
after ‘‘such action,’’; and 
(3) by adding at the end the following new sub-
section: 
‘‘(b) The Director shall, by regulation, provide for the 
authority, procedures, and conditions in liquidating and 
reorganizing critically undercapitalized Federal home loan 
banks pursuant to subsection (a), taking due consideration 
of the authorities, procedures, and conditions established 
under section 1367 of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992, with respect 
to the enterprises, with such modifications as the Director
170 
determines to be appropriate to reflect the difference in 
operations between the banks and the enterprises.’’. 
(c) CONFORMING AMENDMENTS.—Subtitle B of title 
XIII of the Housing and Community Development Act of 
1992 is amended by striking sections 1369 (12 U.S.C. 
4619), 1369A (12 U.S.C. 4620), and 1369B (12 U.S.C. 
4621) 
SEC. 145. CONFORMING AMENDMENTS. 
Subtitle B of title XIII of the Housing and Commu-
nity Development Act of 1992 (42 U.S.C. 4611 et seq.), 
as amended by the preceding provisions of this Act, is fur-
ther amended— 
(1) in sections 1365 (12 U.S.C. 4615) through 
1369D (12 U.S.C. 4623), but not including section 
1367 (12 U.S.C. 4617) as added by section 144 of 
this Act— 
(A) by striking ‘‘An enterprise’’ each place 
such term appears and inserting ‘‘A regulated 
entity’’; 
(B) by striking ‘‘an enterprise’’ each place 
such term appears and inserting ‘‘a regulated 
entity’’; and 
(C) by striking ‘‘the enterprise’’ each place 
such term appears and inserting ‘‘the regulated 
entity’’;
171 
(2) in section 1366(d) (12 U.S.C. 4616(d)), by 
striking ‘‘the enterprises’’ and inserting ‘‘the regu-
lated entities’’; 
(3) in section 1368(d) (12 U.S.C. 4618(d)), by 
striking ‘‘Committee on Banking, Finance and 
Urban Affairs’’ and inserting ‘‘Committee on Finan-
cial Services’’; and 
(4) in section 1369C(c) (12 U.S.C. 4622(c)), by 
striking ‘‘any enterprise’’ and inserting ‘‘any regu-
lated entity’’. 
Subtitle D—Enforcement Actions 
SEC. 161. CEASE-AND-DESIST PROCEEDINGS. 
Section 1371 of the Housing and Community Devel-
opment Act of 1992 (12 U.S.C. 4631) is amended— 
(1) by striking subsections (a) and (b) and in-
serting the following new subsections: 
‘‘(a) ISSUANCE FOR UNSAFE OR UNSOUND PRAC-
TICES AND VIOLATIONS OF RULES OR LAWS.—If, in the 
opinion of the Director, a regulated entity or any regulated 
entity-affiliated party is engaging or has engaged, or the 
Director has reasonable cause to believe that the regulated 
entity or any regulated entity-affiliated party is about to 
engage, in an unsafe or unsound practice in conducting 
the business of the regulated entity or is violating or has 
violated, or the Director has reasonable cause to believe
172 
that the regulated entity or any regulated entity-affiliated 
party is about to violate, a law, rule, or regulation, or any 
condition imposed in writing by the Director in connection 
with the granting of any application or other request by 
the regulated entity or any written agreement entered into 
with the Director, the Director may issue and serve upon 
the regulated entity or such party a notice of charges in 
respect thereof. The Director may not enforce compliance 
with any housing goal established under subpart B of part 
2 of subtitle A of this title, with section 1336 or 1337 
of this title, with subsection (m) or (n) of section 309 of 
the Federal National Mortgage Association Charter Act 
(12 U.S.C. 1723a(m), (n)), with subsection (e) or (f) of 
section 307 of the Federal Home Loan Mortgage Corpora-
tion Act (12 U.S.C. 1456(e), (f)), or with paragraph (5) 
or (12) of section 10(j) of the Federal Home Loan Bank 
Act (12 U.S.C. 1430(j)). 
‘‘(b) ISSUANCE FOR UNSATISFACTORY RATING.—If a 
regulated entity receives, in its most recent report of ex-
amination, a less-than-satisfactory rating for asset quality, 
management, earnings, or liquidity, the Director may (if 
the deficiency is not corrected) deem the regulated entity 
to be engaging in an unsafe or unsound practice for pur-
poses of this subsection.’’;
173 
(2) in subsection (c)(2), by striking ‘‘or direc-
tor’’ and inserting ‘‘director, or regulated entity-af-
filiated party’’; and 
(3) in subsection (d)— 
(A) in paragraph (1), by inserting ‘‘(in-
cluding reimbursement of compensation under 
section 1318)’’ after ‘‘reimbursement’’; 
(B) in paragraph (6), by striking ‘‘and’’ at 
the end; 
(C) by redesignating paragraph (7) as 
paragraph (8); and 
(D) 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. 162. 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: 
‘‘(a) GROUNDS FOR ISSUANCE.—Whenever the Direc-
tor determines that the violation or threatened violation 
or the unsafe or unsound practice or practices specified 
in the notice of charges served upon the regulated entity
174 
or any regulated entity-affiliated party pursuant to section 
1371(a), or the continuation thereof, is likely to cause in-
solvency or significant dissipation of assets or earnings of 
the regulated entity, or is likely to weaken the condition 
of the regulated entity prior to the completion of the pro-
ceedings conducted pursuant to sections 1371 and 1373, 
the Director may issue a temporary order requiring the 
regulated entity or such party to cease and desist from 
any such violation or practice and to take affirmative ac-
tion to prevent or remedy such insolvency, dissipation, 
condition, or prejudice pending completion of such pro-
ceedings. Such order may include any requirement author-
ized under subsection 1371(d).’’; 
(2) in subsection (b), by striking ‘‘or director’’ 
and inserting ‘‘director, or regulated entity-affiliated 
party’’; 
(3) in subsection (d), striking ‘‘or director’’ and 
inserting ‘‘director, or regulated entity-affiliated 
party’’; and 
(4) by striking subsection (e) and in inserting 
the following new subsection: 
‘‘(e) ENFORCEMENT.—In the case of violation or 
threatened violation of, or failure to obey, a temporary 
cease-and-desist order issued pursuant to this section, the 
Director may apply to the United States District Court
175 
for the District of Columbia or the United States district 
court within the jurisdiction of which the headquarters of 
the regulated entity is located, for an injunction to enforce 
such order, and, if the court determines that there has 
been such violation or threatened violation or failure to 
obey, it shall be the duty of the court to issue such injunc-
tion. Such an injunction may include an injunction to ef-
fect an attachment on a regulated entity or regulated-enti-
ty affiliated party.’’. 
SEC. 163. ENFORCEMENT AND JURISDICTION. 
Section 1375 of the Housing and Community Devel-
opment Act of 1992 (12 U.S.C. 4635) is amended— 
(1) by striking subsection (a) and inserting the 
following new subsection: 
‘‘(a) ENFORCEMENT.—The Director may, in the dis-
cretion of the Director, apply to the United States District 
Court for the District of Columbia, or the United States 
district court within the jurisdiction of which the head-
quarters of the regulated entity is located, for the enforce-
ment of any effective and outstanding notice or order 
issued under this subtitle or subtitle B, or request that 
the Attorney General of the United States bring such an 
action. Such court shall have jurisdiction and power to 
order and require compliance with such notice or order.’’; 
and
176 
(2) in subsection (b), by striking ‘‘or 1376’’ and 
inserting ‘‘1376, or 1377’’. 
SEC. 164. CIVIL MONEY PENALTIES. 
Section 1376 of the Housing and Community Devel-
opment Act of 1992 (12 U.S.C. 4636) is amended— 
(1) in subsection (a)— 
(A) in the matter preceding paragraph (1), 
by striking ‘‘or any executive officer or’’ and in-
serting ‘‘any executive officer of a regulated en-
tity, any regulated entity-affiliated party, or 
any’’; and 
(B) in paragraph (1)— 
(i) by inserting ‘‘Federal Home Loan 
Bank Act,’’ after ‘‘Corporation Act,’’; 
(ii) by striking ‘‘or subsection’’ and 
inserting ‘‘, subsection’’; and 
(iii) by inserting ‘‘, or paragraph (5) 
or (12) of section 10(j) of the Federal 
Home Loan Bank Act’’ before the semi-
colon at the end; 
(2) by striking subsection (b) and inserting the 
following new subsection: 
‘‘(b) AMOUNT OF PENALTY.— 
‘‘(1) FIRST TIER.—Any regulated entity which, 
or any regulated entity-affiliated party who—
177 
‘‘(A) violates any provision of this title, the 
Federal National Mortgage Association Charter 
Act (12 U.S.C. 1716 et seq.), the Federal 
Home Loan Mortgage Corporation Act (12 
U.S.C. 1451 et seq.), the Federal Home Loan 
Bank Act (12 U.S.C. 1421 et seq., or any 
order, condition, rule, or regulation under any 
such title or Act, except that the Director may 
not enforce compliance with any housing goal 
established under subpart B of part 2 of sub-
title A of this title, with section 1336 or 1337 
of this title, with subsection (m) or (n) of sec-
tion 309 of the Federal National Mortgage As-
sociation Charter Act (12 U.S.C. 1723a(m), 
(n)), with subsection (e) or (f) of section 307 of 
the Federal Home Loan Mortgage Corporation 
Act (12 U.S.C. 1456(e), (f)), or with paragraph 
(5) or (12) of section 10(j) of the Federal 
Home Loan Bank Act; 
‘‘(B) violates any final or temporary order 
or notice issued pursuant to this title; 
‘‘(C) violates any condition imposed in 
writing by the Director in connection with the 
grant of any application or other request by 
such regulated entity;
178 
‘‘(D) violates any written agreement be-
tween the regulated entity and the Director; or 
‘‘(E) engages in any conduct the Director 
determines to be an unsafe or unsound practice, 
shall forfeit and pay a civil penalty of not more than 
$10,000 for each day during which such violation 
continues. 
‘‘(2) SECOND
TIER.—Notwithstanding para-
graph (1)— 
‘‘(A) if a regulated entity, or a regulated 
entity-affiliated party— 
‘‘(i) commits any violation described 
in any subparagraph of paragraph (1); 
‘‘(ii) recklessly engages in an unsafe 
or unsound practice in conducting the af-
fairs of such regulated entity; or 
‘‘(iii) breaches any fiduciary duty; and 
‘‘(B) the violation, practice, or breach— 
‘‘(i) is part of a pattern of mis-
conduct; 
‘‘(ii) causes or is likely to cause more 
than a minimal loss to such regulated enti-
ty; or 
‘‘(iii) results in pecuniary gain or 
other benefit to such party,
179 
the regulated entity or regulated entity-affiliated 
party shall forfeit and pay a civil penalty of not 
more than $50,000 for each day during which such 
violation, practice, or breach continues. 
‘‘(3) 
THIRD
TIER.—Notwithstanding 
para-
graphs (1) and (2), any regulated entity which, or 
any regulated entity-affiliated party who— 
‘‘(A) knowingly— 
‘‘(i) commits any violation or engages 
in any conduct described in any subpara-
graph of paragraph (1); 
‘‘(ii) engages in any unsafe or un-
sound practice in conducting the affairs of 
such regulated entity; or 
‘‘(iii) breaches any fiduciary duty; and 
‘‘(B) knowingly or recklessly causes a sub-
stantial loss to such regulated entity or a sub-
stantial pecuniary gain or other benefit to such 
party by reason of such violation, practice, or 
breach, 
shall forfeit and pay a civil penalty in an amount not 
to exceed the applicable maximum amount deter-
mined under paragraph (4) for each day during 
which such violation, practice, or breach continues.
180 
‘‘(4) MAXIMUM AMOUNTS OF PENALTIES FOR 
ANY
VIOLATION
DESCRIBED
IN
PARAGRAPH
(3).— 
The maximum daily amount of any civil penalty 
which may be assessed pursuant to paragraph (3) 
for any violation, practice, or breach described in 
such paragraph is— 
‘‘(A) in the case of any person other than 
a regulated entity, an amount not to exceed 
$2,000,000; and 
‘‘(B) in the case of any regulated entity, 
$2,000,000.’’; 
(3) in subsection (c)(1)(B), by inserting ‘‘regu-
lated entity-affiliated party,’’ after ‘‘executive offi-
cer,’’; and 
(4) in subsection (d)— 
(A) by striking ‘‘or director’’ each place 
such term appears and inserting ‘‘director, or 
regulated entity-affiliated party’’; 
(B) by striking ‘‘request the Attorney Gen-
eral of the United States to’’; 
(C) by inserting ‘‘, or the United States 
district court within the jurisdiction of which 
the headquarters of the regulated entity is lo-
cated,’’ after ‘‘District of Columbia’’; and
181 
(D) by striking ‘‘, or may, under the direc-
tion and control of the Attorney General, bring 
such an action’’. 
SEC. 165. REMOVAL AND PROHIBITION AUTHORITY. 
(a) IN GENERAL.—Subtitle C of title XIII of the 
Housing and Community Development Act of 1992 is 
amended— 
(1) by redesignating sections 1377, 1378, 1379, 
1379A, and 1379B (12 U.S.C. 4637–41) as sections 
1379, 1379A, 1379B, 1379C, and 1379D, respec-
tively; and 
(2) by inserting after section 1376 (12 U.S.C. 
4636) the following new section: 
‘‘SEC. 1377. REMOVAL AND PROHIBITION AUTHORITY. 
‘‘(a) AUTHORITY TO ISSUE ORDER.—Whenever the 
Director determines that— 
‘‘(1) any regulated entity-affiliated party has, 
directly or indirectly— 
‘‘(A) violated— 
‘‘(i) any law or regulation; 
‘‘(ii) any cease-and-desist order which 
has become final; 
‘‘(iii) any condition imposed in writing 
by the Director in connection with the
182 
grant of any application or other request 
by such regulated entity; or 
‘‘(iv) any written agreement between 
such regulated entity and the Director; 
‘‘(B) engaged or participated in any unsafe 
or unsound practice in connection with any reg-
ulated entity; or 
‘‘(C) committed or engaged in any act, 
omission, or practice which constitutes a breach 
of such party’s fiduciary duty; 
‘‘(2) by reason of the violation, practice, or 
breach described in any subparagraph of paragraph 
(1)— 
‘‘(A) such regulated entity has suffered or 
will probably suffer financial loss or other dam-
age; or 
‘‘(B) such party has received financial gain 
or other benefit by reason of such violation, 
practice, or breach; and 
‘‘(3) such violation, practice, or breach— 
‘‘(A) involves personal dishonesty on the 
part of such party; or 
‘‘(B) demonstrates willful or continuing 
disregard by such party for the safety or sound-
ness of such regulated entity,
183 
the Director may serve upon such party a written notice 
of the Director’s intention to remove such party from of-
fice or to prohibit any further participation by such party, 
in any manner, in the conduct of the affairs of any regu-
lated entity. 
‘‘(b) SUSPENSION ORDER.— 
‘‘(1) SUSPENSION
OR
PROHIBITION
AUTHOR-
ITY.—If the Director serves written notice under 
subsection (a) to any regulated entity-affiliated party 
of the Director’s intention to issue an order under 
such subsection, the Director may— 
‘‘(A) suspend such party from office or 
prohibit such party from further participation 
in any manner in the conduct of the affairs of 
the regulated entity, if the Director— 
‘‘(i) determines that such action is 
necessary for the protection of the regu-
lated entity; and 
‘‘(ii) serves such party with written 
notice of the suspension order; and 
‘‘(B) prohibit the regulated entity from re-
leasing to or on behalf of the regulated entity- 
affiliated party any compensation or other pay-
ment of money or other thing of current or po-
tential value in connection with any resignation,