286 
App.) is amended by striking ‘‘Federal Housing Finance 
Board’’ and inserting ‘‘Federal Housing Finance Agency’’. 
(g) FEDERAL DEPOSIT INSURANCE ACT.—Section 
11(t)(2)(A) of the Federal Deposit Insurance Act (12 
U.S.C.1821(t)(2)(A)) is amended by adding at the end the 
following new clause: 
‘‘(vii) The Federal Housing Finance 
Agency.’’. 
(h) 1997 EMERGENCY SUPPLEMENTAL APPROPRIA-
TIONS ACT.—Section 10001 of the 1997 Emergency Sup-
plemental Appropriations Act for Recovery From Natural 
Disasters, and for Overseas Peacekeeping Efforts, Includ-
ing Those In Bosnia (42 U.S.C. 3548) is amended— 
(1) by striking ‘‘the Government National Mort-
gage Association, and the Office of Federal Housing 
Enterprise Oversight’’ and inserting ‘‘and the Gov-
ernment National Mortgage Association’’; and 
(2) by striking ‘‘, the Government National 
Mortgage Association, or the Office of Federal 
Housing Enterprise Oversight’’ and inserting ‘‘or 
the Government National Mortgage Association’’. 
(i) NATIONAL HOMEOWNERSHIP TRUST ACT.—Sec-
tion 302(b)(4) of the Cranston-Gonzalez National Afford-
able Housing Act (42 U.S.C. 12851(b)(4)) is amended by 
striking ‘‘the chairperson of the Federal Housing Finance 
VerDate Aug 31 2005 
23:10 Mar 10, 2007
Jkt 059200
PO 00000
Frm 00286
Fmt 6652
Sfmt 6201
E:\BILLS\H1427.IH
H1427
ycherry on PROD1PC64 with BILLS
287 
Board’’ and inserting ‘‘the Director of the Federal Hous-
ing Finance Agency’’. 
SEC. 184. STUDY OF ALTERNATIVE SECONDARY MARKET 
SYSTEMS. 
(a) IN GENERAL.—The Director of the Federal 
Housing Finance Agency, in consultation with the Board 
of Governors of the Federal Reserve System, the Secretary 
of the Treasury, and the Secretary of Housing and Urban 
Development, shall conduct a comprehensive study of the 
effects on financial and housing finance markets of alter-
natives to the current secondary market system for hous-
ing finance, taking into consideration changes in the struc-
ture of financial and housing finance markets and institu-
tions since the creation of the Federal National Mortgage 
Association and the Federal Home Loan Mortgage Cor-
poration. 
(b) CONTENTS.—The study under this section 
shall— 
(1) include, among the alternatives to the cur-
rent secondary market system analyzed— 
(A) repeal of the chartering Acts for the 
Federal National Mortgage Association and the 
Federal Home Loan Mortgage Corporation; 
VerDate Aug 31 2005 
23:10 Mar 10, 2007
Jkt 059200
PO 00000
Frm 00287
Fmt 6652
Sfmt 6201
E:\BILLS\H1427.IH
H1427
ycherry on PROD1PC64 with BILLS
288 
(B) establishing bank-like mechanisms for 
granting new charters for limited purposed 
mortgage securitization entities; 
(C) permitting the Director of the Federal 
Housing Finance Agency to grant new charters 
for limited purpose mortgage securitization en-
tities, which shall include analyzing the terms 
on which such charters should be granted, in-
cluding whether such charters should be sold, 
or whether such charters and the charters for 
the Federal National Mortgage Association and 
the Federal Home Loan Mortgage Corporation 
should be taxed or otherwise assessed a mone-
tary price; and 
(D) such other alternatives as the Director 
considers appropriate; 
(2) examine all of the issues involved in making 
the transition to a completely private secondary 
mortgage market system; 
(3) examine the technological advancements the 
private sector has made in providing liquidity in the 
secondary mortgage market and how such advance-
ments have affected liquidity in the secondary mort-
gage market; and 
VerDate Aug 31 2005 
23:10 Mar 10, 2007
Jkt 059200
PO 00000
Frm 00288
Fmt 6652
Sfmt 6201
E:\BILLS\H1427.IH
H1427
ycherry on PROD1PC64 with BILLS
289 
(4) examine how taxpayers would be impacted 
by each alternative system, including the complete 
privatization of the Federal National Mortgage As-
sociation and the Federal Home Loan Mortgage 
Corporation. 
(c) REPORT.—The Director of the Federal Housing 
Finance Agency shall submit a report to the Congress on 
the study not later than the expiration of the 12-month 
period beginning on the effective date under section 185. 
SEC. 185. EFFECTIVE DATE. 
Except as specifically provided otherwise in this title, 
this title shall take effect on and the amendments made 
by this title shall take effect on, and shall apply beginning 
on, the expiration of the 6-month 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), (10), and (11); 
(2) by redesignating paragraphs (2) through 
(9) as paragraphs (1) through (8), respectively; 
(3) by redesignating paragraphs (12) and (13) 
as paragraphs (9) and (10), respectively; and 
VerDate Aug 31 2005 
23:10 Mar 10, 2007
Jkt 059200
PO 00000
Frm 00289
Fmt 6652
Sfmt 6201
E:\BILLS\H1427.IH
H1427
ycherry on PROD1PC64 with BILLS
290 
(4) by adding at the end the following: 
‘‘(11) DIRECTOR.—The term ‘Director’ means 
the Director of the Federal Housing Finance Agen-
cy. 
‘‘(12) AGENCY.—The term ‘Agency’ means the 
Federal Housing Finance Agency.’’. 
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.—The management of each 
Federal Home Loan Bank shall be vested in a board 
of 13 directors, or such other number as the Direc-
tor determines appropriate, each of whom shall be a 
citizen of the United States. All directors of a Bank 
who are not independent members pursuant to para-
graph (3) shall be elected by the members. 
‘‘(2) MEMBER DIRECTORS.—A majority of the 
directors of each Bank shall be officers or directors 
of a member of such Bank that is located in the dis-
trict in which such Bank is located. 
VerDate Aug 31 2005 
23:10 Mar 10, 2007
Jkt 059200
PO 00000
Frm 00290
Fmt 6652
Sfmt 6201
E:\BILLS\H1427.IH
H1427
ycherry on PROD1PC64 with BILLS
291 
‘‘(3) INDEPENDENT DIRECTORS.—At least two- 
fifths of the directors of each Bank shall be inde-
pendent directors, who shall be appointed by the Di-
rector of the Federal Housing Finance Agency from 
a list of individuals recommended made by the Fed-
eral Housing Enterprise Board, and shall meet the 
following criteria: 
‘‘(A) IN GENERAL.—Each independent di-
rector shall be a bona fide resident of the dis-
trict in which such Bank is located. 
‘‘(B) PUBLIC
INTEREST
DIRECTORS.—At 
least 2 of the independent directors under this 
paragraph of each Bank shall be representatives 
chosen from organizations with more than a 2- 
year history of representing consumer or com-
munity interests on banking services, credit 
needs, housing, community development, eco-
nomic development, or financial consumer pro-
tections. 
‘‘(C) OTHER
DIRECTORS.—Each inde-
pendent director that is not a public interest di-
rector under subparagraph (B) shall have dem-
onstrated knowledge of, or experience in, finan-
cial management, auditing and accounting, risk 
management practices, derivatives, project de-
VerDate Aug 31 2005 
23:10 Mar 10, 2007
Jkt 059200
PO 00000
Frm 00291
Fmt 6652
Sfmt 6201
E:\BILLS\H1427.IH
H1427
ycherry on PROD1PC64 with BILLS
292 
velopment, or organizational management, or 
such other knowledge or expertise as the Direc-
tor may provide by regulation. 
‘‘(D) CONFLICTS OF INTEREST.—Notwith-
standing subsection (f)(2), an independent di-
rector under this paragraph of a Bank may not, 
during such director’s term of office, serve as 
an officer of any Federal Home Loan Bank or 
as a director or officer of any member of a 
Bank.’’; 
(2) in the first sentence of subsection (b), by 
striking ‘‘directorship’’ and inserting ‘‘member direc-
torship pursuant to subsection (a)(2)’’; 
(3) in subsection (c), by striking the second, 
third, and fifth sentences; and 
(4) by striking ‘‘elective’’ each place such term 
appears (except in subsections (e) and (f)). 
(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— 
VerDate Aug 31 2005 
23:10 Mar 10, 2007
Jkt 059200
PO 00000
Frm 00292
Fmt 6652
Sfmt 6201
E:\BILLS\H1427.IH
H1427
ycherry on PROD1PC64 with BILLS