H. R. 3221—104 
‘‘(E) CERTAIN PROTECTIONS IN EVENT OF APPOINTMENT 
OF CONSERVATOR.—Notwithstanding any other provision of 
this section, any other Federal law, or the law of any 
State (other than paragraph (10) of this subsection and 
subsection (b)(9)(B)), no person shall be stayed or prohibited 
from exercising— 
‘‘(i) any right such person has to cause the termi-
nation, liquidation, or acceleration of any qualified 
financial contract with a regulated entity in a con-
servatorship based upon a default under such financial 
contract which is enforceable under applicable non-
insolvency law; 
‘‘(ii) any right under any security agreement or 
arrangement or other credit enhancement relating to 
1 or more such qualified financial 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 
financial contracts. 
‘‘(F) CLARIFICATION.—No provision of law shall be con-
strued as limiting the right or power of the Agency, or 
authorizing any court or agency to limit or delay in any 
manner, the right or power of the Agency to transfer any 
qualified financial contract in accordance with paragraphs 
(9) and (10), or to disaffirm or repudiate any such contract 
in accordance with subsection (d)(1). 
‘‘(G) WALKAWAY CLAUSES NOT EFFECTIVE.— 
‘‘(i) IN GENERAL.—Notwithstanding the provisions 
of subparagraphs (A) and (E), and sections 403 and 
404 of the Federal Deposit Insurance Corporation 
Improvement Act of 1991, no walkaway clause shall 
be enforceable in a qualified financial contract of a 
regulated entity in default. 
‘‘(ii) WALKAWAY
CLAUSE
DEFINED.—For purposes 
of this subparagraph, the term ‘walkaway clause’ 
means a provision in a qualified financial contract 
that, after calculation of a value of a party’s position 
or an amount due to or from 1 of the parties in accord-
ance with its terms upon termination, liquidation, or 
acceleration of the qualified financial contract, either 
does not create a payment obligation of a party or 
extinguishes a payment obligation of a party in whole 
or in part solely because of the status of such party 
as a nondefaulting party. 
‘‘(9) TRANSFER
OF
QUALIFIED
FINANCIAL
CONTRACTS.—In 
making any transfer of assets or liabilities of a regulated entity 
in default which includes any qualified financial contract, the 
conservator or receiver for such regulated entity shall either— 
‘‘(A) transfer to 1 person— 
‘‘(i) all qualified financial contracts between any 
person (or any affiliate of such person) and the regu-
lated entity in default; 
‘‘(ii) all claims of such person (or any affiliate of 
such person) against such regulated entity under any 
such contract (other than any claim which, under the 
terms of any such contract, is subordinated to the
H. R. 3221—105 
claims of general unsecured creditors of such regulated 
entity); 
‘‘(iii) all claims of such regulated entity against 
such person (or any affiliate of such person) under 
any such contract; and 
‘‘(iv) all property securing, or any other credit 
enhancement for any contract described in clause (i), 
or any claim described in clause (ii) or (iii) under 
any such contract; or 
‘‘(B) transfer none of the financial contracts, 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.—The conservator or receiver shall 
notify any person that is a party to a contract or transfer 
by 5:00 p.m. (Eastern Standard Time) on the business 
day following the date of the appointment of the receiver 
in the case of a receivership, or the business day following 
such transfer in the case of a conservatorship, if— 
‘‘(i) the conservator or receiver for a regulated 
entity in default makes any transfer of the assets 
and liabilities of such regulated entity; and 
‘‘(ii) such transfer includes any qualified financial 
contract. 
‘‘(B) CERTAIN RIGHTS NOT ENFORCEABLE.— 
‘‘(i) RECEIVERSHIP.—A person who is a party to 
a qualified financial contract with a regulated entity 
may not exercise any right that such person has to 
terminate, liquidate, or net such contract under para-
graph (8)(A) of this subsection or under section 403 
or 404 of the Federal Deposit Insurance Corporation 
Improvement Act of 1991, solely by reason of or inci-
dental to the appointment of a receiver for the regu-
lated entity (or the insolvency or financial condition 
of the regulated entity for which the receiver has been 
appointed)— 
‘‘(I) until 5:00 p.m. (Eastern Standard Time) 
on the business day following the date of the 
appointment of the receiver; or 
‘‘(II) after the person has received notice that 
the contract has been transferred pursuant to 
paragraph (9)(A). 
‘‘(ii) CONSERVATORSHIP.—A person who is a party 
to a qualified financial contract with a regulated entity 
may not exercise any right that such person has to 
terminate, liquidate, or net such contract under para-
graph (8)(E) of this subsection or under section 403 
or 404 of the Federal Deposit Insurance Corporation 
Improvement Act of 1991, solely by reason of or inci-
dental to the appointment of a conservator for the 
regulated entity (or the insolvency or financial condi-
tion of the regulated entity for which the conservator 
has been appointed). 
‘‘(iii) NOTICE.—For purposes of this paragraph, the 
conservator or receiver of a regulated entity shall be 
deemed to have notified a person who is a party to 
a qualified financial contract with such regulated
H. R. 3221—106 
entity, if the conservator or receiver has taken steps 
reasonably calculated to provide notice to such person 
by the time specified in subparagraph (A). 
‘‘(C) BUSINESS
DAY
DEFINED.—For purposes of this 
paragraph, the term ‘business day’ means any day other 
than any Saturday, Sunday, or any day on which either 
the New York Stock Exchange or the Federal Reserve 
Bank of New York is closed. 
‘‘(11) DISAFFIRMANCE OR REPUDIATION OF QUALIFIED FINAN-
CIAL CONTRACTS.—In exercising the rights of disaffirmance or 
repudiation of a conservator or receiver with respect to any 
qualified financial contract to which a regulated entity is a 
party, the conservator or receiver for such institution shall 
either— 
‘‘(A) disaffirm or repudiate all qualified financial con-
tracts between— 
‘‘(i) any person or any affiliate of such person; 
and 
‘‘(ii) the regulated entity in default; or 
‘‘(B) disaffirm or repudiate none of the qualified finan-
cial contracts referred to in subparagraph (A) (with respect 
to such person or any affiliate of such person). 
‘‘(12) CERTAIN
SECURITY
INTERESTS
NOT
AVOIDABLE.—No 
provision of this subsection shall be construed as permitting 
the avoidance of any legally enforceable or perfected security 
interest in any of the assets of any regulated entity, except 
where such an interest is taken in contemplation of the insol-
vency of the regulated entity, or with the intent to hinder, 
delay, or defraud the regulated entity or the creditors of such 
regulated entity. 
‘‘(13) AUTHORITY TO ENFORCE CONTRACTS.— 
‘‘(A) IN GENERAL.—Notwithstanding any provision of 
a contract providing for termination, default, acceleration, 
or exercise of rights upon, or solely by reason of, insolvency 
or the appointment of, or the exercise of rights or powers 
by, a conservator or receiver, the conservator or receiver 
may enforce any contract, other than a contract for liability 
insurance for a director or officer, or a contract or a regu-
lated entity bond, entered into by the regulated entity. 
‘‘(B) CERTAIN RIGHTS NOT AFFECTED.—No provision of 
this paragraph may be construed as impairing or affecting 
any right of the conservator or receiver to enforce or recover 
under a liability insurance contract for an officer or 
director, or regulated entity bond under other applicable 
law. 
‘‘(C) CONSENT REQUIREMENT.— 
‘‘(i) IN
GENERAL.—Except as otherwise provided 
under this section, no person may exercise any right 
or power to terminate, accelerate, or declare a default 
under any contract to which a regulated entity is a 
party, or to obtain possession of or exercise control 
over any property of the regulated entity, or affect 
any contractual rights of the regulated entity, without 
the consent of the conservator or receiver, as appro-
priate, for a period of— 
‘‘(I) 45 days after the date of appointment 
of a conservator; or
H. R. 3221—107 
‘‘(II) 90 days after the date of appointment 
of a receiver. 
‘‘(ii) EXCEPTIONS.—This subparagraph shall not— 
‘‘(I) apply to a contract for liability insurance 
for an officer or director; 
‘‘(II) apply to the rights of parties to certain 
qualified financial contracts under subsection 
(d)(8); and 
‘‘(III) be construed as permitting the conser-
vator or receiver to fail to comply with otherwise 
enforceable provisions of such contracts. 
‘‘(14) SAVINGS CLAUSE.—The meanings of terms used in 
this subsection are applicable for purposes of this subsection 
only, and shall not be construed or applied so as to challenge 
or affect the characterization, definition, or treatment of any 
similar terms under any other statute, regulation, or rule, 
including the Gramm-Leach-Bliley Act, the Legal Certainty 
for Bank Products Act of 2000, the securities laws (as that 
term is defined in section 3(a)(47) of the Securities Exchange 
Act of 1934), and the Commodity Exchange Act. 
‘‘(15) EXCEPTION FOR FEDERAL RESERVE AND FEDERAL HOME 
LOAN BANKS.—No provision of this subsection shall apply with 
respect to— 
‘‘(A) any extension of credit from any Federal Home 
Loan Bank or Federal Reserve Bank to any regulated 
entity; or 
‘‘(B) any security interest in the assets of the regulated 
entity securing any such extension of credit. 
‘‘(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 determines to utilize with respect 
to a regulated entity in default or in danger of default, including 
transactions authorized under subsection (i), this subsection 
shall govern the rights of the creditors of such regulated entity. 
‘‘(2) MAXIMUM LIABILITY.—The maximum liability of the 
Agency, acting as receiver or in any other capacity, to any 
person having a claim against the receiver or the regulated 
entity for which such receiver is appointed shall be not more 
than the amount that such claimant would have received if 
the Agency had liquidated the assets and liabilities of the 
regulated entity without exercising the authority of the Agency 
under subsection (i). 
‘‘(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 exercise 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 a regulated entity 
may be held personally liable for monetary damages in any 
civil action described in paragraph (2) brought by, on behalf 
of, or at the request or direction of the Agency, and prosecuted 
wholly or partially for the benefit of the Agency— 
‘‘(A) acting as conservator or receiver of such regulated 
entity; or
H. R. 3221—108 
‘‘(B) acting based upon a suit, claim, or cause of action 
purchased from, assigned by, or otherwise conveyed by 
such receiver or conservator. 
‘‘(2) ACTIONS ADDRESSED.—Paragraph (1) applies in any 
civil action for gross negligence, including any similar conduct 
or conduct that demonstrates a greater disregard of a duty 
of care than gross negligence, including intentional tortious 
conduct, as such terms are defined and determined under 
applicable State law. 
‘‘(3) NO
LIMITATION.—Nothing in this subsection 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 a regulated 
entity, recoverable damages determined to result from the improvi-
dent or otherwise improper use or investment of any assets of 
the regulated entity shall include principal losses and appropriate 
interest. 
‘‘(i) LIMITED-LIFE REGULATED ENTITIES.— 
‘‘(1) ORGANIZATION.— 
‘‘(A) PURPOSE.—The Agency, as receiver appointed 
pursuant to subsection (a)— 
‘‘(i) may, in the case of a Federal Home Loan 
Bank, organize a limited-life regulated entity with 
those powers and attributes of the Federal Home Loan 
Bank in default or in danger of default as the Director 
determines necessary, subject to the provisions of this 
subsection, and the Director shall grant a temporary 
charter to that limited-life regulated entity, and that 
limited-life regulated entity may operate subject to 
that charter; and 
‘‘(ii) shall, in the case of an enterprise, organize 
a limited-life regulated entity with respect to that 
enterprise in accordance with this subsection. 
‘‘(B) AUTHORITIES.—Upon the creation of a limited- 
life regulated entity under subparagraph (A), the limited- 
life regulated entity may— 
‘‘(i) assume such liabilities of the regulated entity 
that is in default or in danger of default as the Agency 
may, in its discretion, determine to be appropriate, 
except that the liabilities assumed shall not exceed 
the amount of assets purchased or transferred from 
the regulated entity to the limited-life regulated entity; 
‘‘(ii) purchase such assets of the regulated entity 
that is in default, or in danger of default as the Agency 
may, in its discretion, determine to be appropriate; 
and 
‘‘(iii) perform any other temporary function which 
the Agency may, in its discretion, prescribe in accord-
ance with this section. 
‘‘(2) CHARTER AND ESTABLISHMENT.— 
‘‘(A) TRANSFER OF CHARTER.— 
‘‘(i) FANNIE MAE.—If the Agency is appointed as 
receiver for the Federal National Mortgage Association, 
the limited-life regulated entity established under this 
subsection with respect to such enterprise shall, by
H. R. 3221—110 
‘‘(E) BYLAWS.—The board of directors of a limited-life 
regulated entity shall adopt such bylaws as may be 
approved by the Agency. 
‘‘(3) CAPITAL STOCK.— 
‘‘(A) NO AGENCY REQUIREMENT.—The Agency is not 
required to pay capital stock into a limited-life regu-
lated entity or to issue any capital stock on behalf 
of a limited-life regulated entity established under this 
subsection. 
‘‘(B) AUTHORITY.—If the Director determines that 
such action is advisable, the Agency may cause capital 
stock or other securities of a limited-life regulated 
entity established with respect to an enterprise to be 
issued and offered for sale, in such amounts and on 
such terms and conditions as the Director may deter-
mine, in the discretion of the Director. 
‘‘(4) INVESTMENTS.—Funds of a limited-life regulated entity 
shall be kept on hand in cash, invested in obligations of the 
United States or obligations guaranteed as to principal and 
interest by the United States, or deposited with the Agency, 
or any Federal reserve bank. 
‘‘(5) EXEMPT
TAX
STATUS.—Notwithstanding any other 
provision of Federal or State law, a limited-life regulated entity, 
its franchise, property, and income shall be exempt from all 
taxation now or hereafter imposed by the United States, by 
any territory, dependency, or possession thereof, or by any 
State, county, municipality, or local taxing authority. 
‘‘(6) WINDING UP.— 
‘‘(A) IN GENERAL.—Subject to subparagraphs (B) and 
(C), not later than 2 years after the date of its organization, 
the Agency shall wind up the affairs of a limited-life regu-
lated entity. 
‘‘(B) EXTENSION.—The Director may, in the discretion 
of the Director, extend the status of a limited-life regulated 
entity for 3 additional 1-year periods. 
‘‘(C) TERMINATION OF STATUS AS LIMITED-LIFE REGU-
LATED ENTITY.— 
‘‘(i) IN GENERAL.—Upon the sale by the Agency 
of 80 percent or more of the capital stock of a limited- 
life regulated entity, as defined in clause (iv), to 1 
or more persons (other than the Agency)— 
‘‘(I) the status of the limited-life regulated 
entity as such shall terminate; and 
‘‘(II) the entity shall cease to be a limited- 
life regulated entity for purposes of this subsection. 
‘‘(ii) DIVESTITURE OF REMAINING STOCK, IF ANY.— 
‘‘(I) IN GENERAL.—Not later than 1 year after 
the date on which the status of a limited-life regu-
lated entity is terminated pursuant to clause (i), 
the Agency shall sell to 1 or more persons (other 
than the Agency) any remaining capital stock of 
the former limited-life regulated entity. 
‘‘(II) EXTENSION
AUTHORIZED.—The Director 
may extend the period referred to in subclause 
(I) for not longer than an additional 2 years, if 
the Director determines that such action would 
be in the public interest.
H. R. 3221—111 
‘‘(iii) 
SAVINGS
CLAUSE.—Notwithstanding 
any 
provision of law, other than clause (ii), the Agency 
shall not be required to sell the capital stock of an 
enterprise or a limited-life regulated entity established 
with respect to an enterprise. 
‘‘(iv) APPLICABILITY.—This subparagraph applies 
only with respect to a limited-life regulated entity that 
is established with respect to an enterprise. 
‘‘(7) TRANSFER OF ASSETS AND LIABILITIES.— 
‘‘(A) IN GENERAL.— 
‘‘(i) TRANSFER
OF
ASSETS
AND
LIABILITIES.—The 
Agency, as receiver, may transfer any assets and liabil-
ities of a regulated entity in default, or in danger 
of default, to the limited-life regulated entity in accord-
ance with and subject to the restrictions of paragraph 
(1). 
‘‘(ii) SUBSEQUENT TRANSFERS.—At any time after 
the establishment of a limited-life regulated entity, 
the Agency, as receiver, may transfer any assets and 
liabilities of the regulated entity in default, or in 
danger of default, as the Agency may, in its discretion, 
determine to be appropriate in accordance with and 
subject to the restrictions of paragraph (1). 
‘‘(iii) EFFECTIVE WITHOUT APPROVAL.—The transfer 
of any assets or liabilities of a regulated entity in 
default or in danger of default to a limited-life regu-
lated entity shall be effective without any further 
approval under Federal or State law, assignment, or 
consent with respect thereto. 
‘‘(iv) EQUITABLE
TREATMENT
OF
SIMILARLY
SITU-
ATED CREDITORS.—The Agency shall treat all creditors 
of a regulated entity in default or in danger of default 
that are similarly situated under subsection (c)(1) in 
a similar manner in exercising the authority of the 
Agency under this subsection to transfer any assets 
or liabilities of the regulated entity to the limited- 
life regulated entity established with respect to such 
regulated entity, except that the Agency may take 
actions (including making payments) that do not 
comply with this clause, if— 
‘‘(I) the Director determines that such actions 
are necessary to maximize the value of the assets 
of the regulated entity, to maximize the present 
value return from the sale or other disposition 
of the assets of the regulated entity, or to minimize 
the amount of any loss realized upon the sale 
or other disposition of the assets of the regulated 
entity; and 
‘‘(II) all creditors that are similarly situated 
under subsection (c)(1) receive not less than the 
amount provided in subsection (e)(2). 
‘‘(v) LIMITATION ON TRANSFER OF LIABILITIES.—Not-
withstanding any other provision of law, the aggregate 
amount of liabilities of a regulated entity that are 
transferred to, or assumed by, a limited-life regulated 
entity may not exceed the aggregate amount of assets
H. R. 3221—112 
of the regulated entity that are transferred to, or pur-
chased by, the limited-life regulated entity. 
‘‘(8) REGULATIONS.—The Agency may promulgate such 
regulations as the Agency determines to be necessary or appro-
priate to implement this subsection. 
‘‘(9) POWERS OF LIMITED-LIFE REGULATED ENTITIES.— 
‘‘(A) IN GENERAL.—Each limited-life regulated entity 
created under this subsection shall have all corporate 
powers of, and be subject to the same provisions of law 
as, the regulated entity in default or in danger of default 
to which it relates, except that— 
‘‘(i) the Agency may— 
‘‘(I) remove the directors of a limited-life regu-
lated entity; 
‘‘(II) fix the compensation of members of the 
board of directors and senior management, as 
determined by the Agency in its discretion, of a 
limited-life regulated entity; and 
‘‘(III) indemnify the representatives for pur-
poses of paragraph (1)(B), and the directors, offi-
cers, employees, and agents of a limited-life regu-
lated entity on such terms as the Agency deter-
mines to be appropriate; and 
‘‘(ii) the board of directors of a limited-life regu-
lated entity— 
‘‘(I) shall elect a chairperson who may also 
serve in the position of chief executive officer, 
except that such person shall not serve either as 
chairperson or as chief executive officer without 
the prior approval of the Agency; and 
‘‘(II) may appoint a chief executive officer who 
is not also the chairperson, except that such person 
shall not serve as chief executive officer without 
the prior approval of the Agency. 
‘‘(B) STAY
OF
JUDICIAL
ACTION.—Any judicial action 
to which a limited-life regulated entity becomes a party 
by virtue of its acquisition of any assets or assumption 
of any liabilities of a regulated entity in default shall 
be stayed from further proceedings for a period of not 
longer than 45 days, at the request of the limited-life 
regulated entity. Such period may be modified upon the 
consent of all parties. 
‘‘(10) NO FEDERAL STATUS.— 
‘‘(A) AGENCY STATUS.—A limited-life regulated entity 
is not an agency, establishment, or instrumentality of the 
United States. 
‘‘(B) EMPLOYEE STATUS.—Representatives for purposes 
of paragraph (1)(B), interim directors, directors, officers, 
employees, or agents of a limited-life regulated entity are 
not, solely by virtue of service in any such capacity, officers 
or employees of the United States. Any employee of the 
Agency or of any Federal instrumentality who serves at 
the request of the Agency as a representative for purposes 
of paragraph (1)(B), interim director, director, officer, 
employee, or agent of a limited-life regulated entity shall 
not—
H. R. 3221—113 
‘‘(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 
‘‘(ii) receive any salary or benefits for service in 
any such capacity with respect to a limited-life regu-
lated entity in addition to such salary or benefits as 
are obtained through employment with the Agency 
or such Federal instrumentality. 
‘‘(11) AUTHORITY TO OBTAIN CREDIT.— 
‘‘(A) IN GENERAL.—A limited-life regulated entity may 
obtain unsecured credit and issue unsecured debt. 
‘‘(B) INABILITY
TO
OBTAIN
CREDIT.—If a limited-life 
regulated entity is unable to obtain unsecured credit or 
issue unsecured debt, the Director may authorize the 
obtaining of credit or the issuance of debt by the limited- 
life regulated entity— 
‘‘(i) with priority over any or all of the obligations 
of the limited-life regulated entity; 
‘‘(ii) secured by a lien on property of the limited- 
life regulated entity that is not otherwise subject to 
a lien; or 
‘‘(iii) secured by a junior lien on property of the 
limited-life regulated entity that is subject to a lien. 
‘‘(C) LIMITATIONS.— 
‘‘(i) IN GENERAL.—The Director, after notice and 
a hearing, may authorize the obtaining of credit or 
the issuance of debt by a limited-life regulated entity 
that is secured by a senior or equal lien on property 
of the limited-life regulated entity that is subject to 
a lien (other than mortgages that collateralize the 
mortgage-backed securities issued or guaranteed by 
an enterprise) only if— 
‘‘(I) the limited-life regulated entity is unable 
to otherwise obtain such credit or issue such debt; 
and 
‘‘(II) there is adequate protection of the 
interest of the holder of the lien on the property 
with respect to which such senior or equal lien 
is proposed to be granted. 
‘‘(D) BURDEN OF PROOF.—In any hearing under this 
subsection, the Director has the burden of proof on the 
issue of adequate protection. 
‘‘(12) EFFECT ON DEBTS AND LIENS.—The reversal or modi-
fication on appeal of an authorization under this subsection 
to obtain credit or issue debt, or of a grant under this section 
of a priority or a lien, does not affect the validity of any 
debt so issued, or any priority or lien so granted, to an entity 
that extended such credit in good faith, whether or not such 
entity knew of the pendency of the appeal, unless such 
authorization and the issuance of such debt, or the granting 
of such priority or lien, were stayed pending appeal. 
‘‘(j) OTHER AGENCY EXEMPTIONS.— 
‘‘(1) APPLICABILITY.—The provisions of this subsection shall 
apply with respect to the Agency in any case in which the 
Agency is acting as a conservator or a receiver.
H. R. 3221—114 
‘‘(2) TAXATION.—The Agency, including its franchise, its 
capital, reserves, and surplus, and its income, shall be exempt 
from all taxation imposed by any State, county, municipality, 
or local taxing authority, except that any real property of the 
Agency shall be subject to State, territorial, county, municipal, 
or local taxation to the same extent according to its value 
as other real property is taxed, except that, notwithstanding 
the failure of any person to challenge an assessment under 
State law of the value of such property, and the tax thereon, 
shall be determined as of the period for which such tax is 
imposed. 
‘‘(3) PROPERTY PROTECTION.—No property of the Agency 
shall be subject to levy, attachment, garnishment, foreclosure, 
or sale without the consent of the Agency, nor shall any involun-
tary lien attach to the property of the Agency. 
‘‘(4) PENALTIES AND FINES.—The Agency shall not be liable 
for any amounts in the nature of penalties or fines, including 
those arising from the failure of any person to pay any real 
property, personal property, probate, or recording tax or any 
recording or filing fees when due. 
‘‘(k) PROHIBITION OF CHARTER REVOCATION.—In no case may 
the receiver appointed pursuant to this section revoke, annul, or 
terminate the charter of an enterprise.’’. 
(b) TECHNICAL AND CONFORMING AMENDMENTS.—The Federal 
Housing Enterprises Financial Safety and Soundness Act of 1992 
(12 U.S.C. 4501 et seq.) is amended— 
(1) in section 1368 (12 U.S.C. 4618)— 
(A) by striking ‘‘an enterprise’’ each place that term 
appears and inserting ‘‘a regulated entity’’; and 
(B) by striking ‘‘the enterprise’’ each place that term 
appears and inserting ‘‘the regulated entity’’; 
(2) in section 1369C (12 U.S.C. 4622), by striking ‘‘enter-
prise’’ each place that term appears and inserting ‘‘regulated 
entity’’; 
(3) in section 1369D (12 U.S.C. 4623)— 
(A) by striking ‘‘an enterprise’’ each place that term 
appears and inserting ‘‘a regulated entity’’; and 
(B) in subsection (a)(1), by striking ‘‘An enterprise’’ 
and inserting ‘‘A regulated entity’’; and 
(4) by striking sections 1369, 1369A, and 1369B (12 U.S.C. 
4619, 4620, and 4621). 
Subtitle D—Enforcement Actions 
SEC. 1151. CEASE AND DESIST PROCEEDINGS. 
Section 1371 of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (12 U.S.C. 4631) is amended— 
(1) by striking subsections (a) and (b) and inserting the 
following: 
‘‘(a) ISSUANCE FOR UNSAFE OR UNSOUND PRACTICES AND VIOLA-
TIONS.— 
‘‘(1) AUTHORITY OF DIRECTOR.—If, in the opinion of the 
Director, a regulated entity or any entity-affiliated party is 
engaging or has engaged, or the Director has reasonable cause 
to believe that the regulated entity or any entity-affiliated 
party is about to engage, in an unsafe or unsound practice
H. R. 3221—115 
in conducting the business of the regulated entity or the Office 
of Finance, or is violating or has violated, or the Director 
has reasonable cause to believe is about to violate, a law, 
rule, regulation, or order, or any condition imposed in writing 
by the Director in connection with the granting of any applica-
tion or other request by the regulated entity or the Office 
of Finance or any written agreement entered into with the 
Director, the Director may issue and serve upon the regulated 
entity or entity-affiliated party a notice of charges in respect 
thereof. 
‘‘(2) LIMITATION.—The Director may not, pursuant to this 
section, 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) 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 examination, 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 purposes of subsection (a).’’; 
(2) in subsection (c)— 
(A) in paragraph (1), by inserting before the period 
at the end the following: ‘‘, unless the party served with 
a notice of charges shall appear at the hearing personally 
or by a duly authorized representative, the party shall 
be deemed to have consented to the issuance of the cease 
and desist order’’; and 
(B) in paragraph (2)— 
(i) by striking ‘‘or director’’ and inserting ‘‘director, 
or entity-affiliated party’’; and 
(ii) by inserting ‘‘or entity-affiliated party’’ before 
‘‘consents’’; 
(3) in each of subsections (c), (d), and (e)— 
(A) by striking ‘‘the enterprise’’ each place that term 
appears and inserting ‘‘the regulated entity’’; 
(B) by striking ‘‘an enterprise’’ each place that term 
appears and inserting ‘‘a regulated entity’’; and 
(C) by striking ‘‘conduct’’ each place that term appears 
and inserting ‘‘practice’’; 
(4) in subsection (d)— 
(A) in the matter preceding paragraph (1)— 
(i) by striking ‘‘or director’’ and inserting ‘‘director, 
or entity-affiliated party’’; and 
(ii) by inserting ‘‘to require a regulated entity or 
entity-affiliated party’’ after ‘‘includes the authority’’; 
(B) in paragraph (1)— 
(i) by striking ‘‘to require an executive officer or 
a director to’’; and 
(ii) by striking ‘‘loss’’ and all that follows through 
‘‘person’’ and inserting ‘‘loss, if’’; 
(iii) in subparagraph (A), by inserting ‘‘such entity 
or party or finance facility’’ before ‘‘was’’; and
H. R. 3221—116 
(iv) by striking subparagraph (B) and inserting 
the following: 
‘‘(B) the violation or practice involved a reckless dis-
regard for the law or any applicable regulations or prior 
order of the Director;’’; and 
(C) in paragraph (4), by inserting ‘‘loan or’’ before 
‘‘asset’’; 
(5) in subsection (e), by inserting ‘‘or entity-affiliated 
party’’— 
(A) before ‘‘or any executive’’; and 
(B) before the period at the end; and 
(6) in subsection (f)— 
(A) by striking ‘‘enterprise’’ and inserting ‘‘regulated 
entity, finance facility,’’; and 
(B) by striking ‘‘or director’’ and inserting ‘‘director, 
or entity-affiliated party’’. 
SEC. 1152. TEMPORARY CEASE AND DESIST PROCEEDINGS. 
Section 1372 of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (12 U.S.C. 4632) is amended— 
(1) by striking subsection (a) and inserting the following: 
‘‘(a) GROUNDS FOR ISSUANCE.— 
‘‘(1) IN
GENERAL.—If the Director determines that the 
actions specified in the notice of charges served upon a regu-
lated entity or any entity-affiliated party pursuant to section 
1371(a), or the continuation thereof, is likely to cause insolvency 
or significant dissipation of assets or earnings of that entity, 
or is likely to weaken the condition of that entity prior to 
the completion of the proceedings conducted pursuant to sec-
tions 1371 and 1373, the Director may— 
‘‘(A) issue a temporary order requiring that regulated 
entity or entity-affiliated party to cease and desist from 
any such violation or practice; and 
‘‘(B) require that regulated entity or entity-affiliated 
party to take affirmative action to prevent or remedy such 
insolvency, dissipation, condition, or prejudice pending 
completion of such proceedings. 
‘‘(2) ADDITIONAL REQUIREMENTS.—An order issued under 
paragraph (1) may include any requirement authorized under 
subsection 1371(d).’’; 
(2) in subsection (b)— 
(A) by striking ‘‘or director’’ and inserting ‘‘director, 
or entity-affiliated party’’; and 
(B) by striking ‘‘enterprise’’ each place that term 
appears and inserting ‘‘regulated entity’’; 
(3) in subsection (c), by striking ‘‘enterprise’’ each place 
that term appears and inserting ‘‘regulated entity’’; 
(4) in subsection (d)— 
(A) by striking ‘‘or director’’ each place that term 
appears and inserting ‘‘director, or entity-affiliated party’’; 
and 
(B) by striking ‘‘An enterprise’’ and inserting ‘‘A regu-
lated entity’’; and 
(5) in subsection (e)— 
(A) by striking ‘‘request the Attorney General of the 
United States to’’; and
H. R. 3221—117 
(B) by striking ‘‘or may, under the direction and control 
of the Attorney General, bring such action’’. 
SEC. 1153. REMOVAL AND PROHIBITION AUTHORITY. 
(a) IN GENERAL.—Part 1 of subtitle C of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 
4631 et seq.) is amended— 
(1) by redesignating sections 1377 through 1379B (12 
U.S.C. 4637–4641) as sections 1379 through 1379D, respec-
tively; and 
(2) by inserting after section 1376 (12 U.S.C. 4636) the 
following: 
‘‘SEC. 1377. REMOVAL AND PROHIBITION AUTHORITY. 
‘‘(a) AUTHORITY TO ISSUE ORDER.— 
‘‘(1) IN GENERAL.—The Director may serve upon a party 
described in paragraph (2), or any officer, director, or manage-
ment of the Office of Finance a written notice of the intention 
of the Director to suspend or remove such party from office, 
or prohibit any further participation by such party, in any 
manner, in the conduct of the affairs of the regulated entity. 
‘‘(2) APPLICABILITY.—A party described in this paragraph 
is an entity-affiliated party or any officer, director, or manage-
ment of the Office of Finance, if the Director determines that— 
‘‘(A) that party, officer, or director has, directly or 
indirectly— 
‘‘(i) 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 grant of any 
application or other request by such regulated 
entity; or 
‘‘(IV) any written agreement between such 
regulated entity and the Director; 
‘‘(ii) engaged or participated in any unsafe or 
unsound practice in connection with any regulated 
entity or business institution; or 
‘‘(iii) committed or engaged in any act, omission, 
or practice which constitutes a breach of such party’s 
fiduciary duty; 
‘‘(B) by reason of the violation, practice, or breach 
described in subparagraph (A)— 
‘‘(i) such regulated entity or business institution 
has suffered or will probably suffer financial loss or 
other damage; or 
‘‘(ii) such party has received financial gain or other 
benefit; and 
‘‘(C) the violation, practice, or breach described in 
subparagraph (A)— 
‘‘(i) involves personal dishonesty on the part of 
such party; or 
‘‘(ii) demonstrates willful or continuing disregard 
by such party for the safety or soundness of such 
regulated entity or business institution. 
‘‘(b) SUSPENSION ORDER.—
H. R. 3221—118 
‘‘(1) SUSPENSION
OR
PROHIBITION
AUTHORITY.—If the 
Director serves written notice under subsection (a) upon a 
party subject to that subsection (a), the Director may, by order, 
suspend or remove 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— 
‘‘(A) determines that such action is necessary for the 
protection of the regulated entity; and 
‘‘(B) serves such party with written notice of the order. 
‘‘(2) EFFECTIVE PERIOD.—Any order issued under this sub-
section— 
‘‘(A) shall become effective upon service; and 
‘‘(B) unless a court issues a stay of such order under 
subsection (g), shall remain in effect and enforceable until— 
‘‘(i) the date on which the Director dismisses the 
charges contained in the notice served under subsection 
(a) with respect to such party; or 
‘‘(ii) the effective date of an order issued under 
subsection (b). 
‘‘(3) COPY OF ORDER.—If the Director issues an order under 
subsection (b) to any party, the Director shall serve a copy 
of such order on any regulated entity with which such party 
is affiliated at the time such order is issued. 
‘‘(c) NOTICE, HEARING, AND ORDER.— 
‘‘(1) NOTICE.—A notice under subsection (a) of the intention 
of the Director to issue an order under this section shall contain 
a statement of the facts constituting grounds for such action, 
and shall fix a time and place at which a hearing will be 
held on such action. 
‘‘(2) TIMING
OF
HEARING.—A hearing shall be fixed for 
a date not earlier than 30 days, nor later than 60 days, after 
the date of service of notice under subsection (a), unless an 
earlier or a later date is set by the Director at the request 
of— 
‘‘(A) the party receiving such notice, and good cause 
is shown; or 
‘‘(B) the Attorney General of the United States. 
‘‘(3) CONSENT.—Unless the party that is the subject of 
a notice delivered under subsection (a) appears at the hearing 
in person or by a duly authorized representative, such party 
shall be deemed to have consented to the issuance of an order 
under this section. 
‘‘(4) ISSUANCE OF ORDER OF SUSPENSION.—The Director may 
issue an order under this section, as the Director may deem 
appropriate, if— 
‘‘(A) a party is deemed to have consented to the 
issuance of an order under paragraph (3); or 
‘‘(B) upon the record made at the hearing, the Director 
finds that any of the grounds specified in the notice have 
been established. 
‘‘(5) EFFECTIVENESS OF ORDER.—Any order issued under 
paragraph (4) shall become effective at the expiration of 30 
days after the date of service upon the relevant regulated 
entity and party (except in the case of an order issued upon 
consent under paragraph (3), which shall become effective at 
the time specified therein). Such order shall remain effective 
and enforceable except to such extent as it is stayed, modified,
H. R. 3221—119 
terminated, or set aside by action of the Director or a reviewing 
court. 
‘‘(d) PROHIBITION OF CERTAIN SPECIFIC ACTIVITIES.—Any person 
subject to an order issued under this section shall not— 
‘‘(1) participate in any manner in the conduct of the affairs 
of any regulated entity or the Office of Finance; 
‘‘(2) solicit, procure, transfer, attempt to transfer, vote, 
or attempt to vote any proxy, consent, or authorization with 
respect to any voting rights in any regulated entity; 
‘‘(3) violate any voting agreement previously approved by 
the Director; or 
‘‘(4) vote for a director, or serve or act as an entity-affiliated 
party of a regulated entity or as an officer or director of the 
Office of Finance. 
‘‘(e) INDUSTRY-WIDE PROHIBITION.— 
‘‘(1) IN GENERAL.—Except as provided in paragraph (2), 
any person who, pursuant to an order issued under this section, 
has been removed or suspended from office in a regulated 
entity or the Office of Finance, or prohibited from participating 
in the conduct of the affairs of a regulated entity or the Office 
of Finance, may not, while such order is in effect, continue 
or commence to hold any office in, or participate in any manner 
in the conduct of the affairs of, any regulated entity or the 
Office of Finance. 
‘‘(2) EXCEPTION IF DIRECTOR PROVIDES WRITTEN CONSENT.— 
If, on or after the date on which an order is issued under 
this section which removes or suspends from office any party, 
or prohibits such party from participating in the conduct of 
the affairs of a regulated entity or the Office of Finance, such 
party receives the written consent of the Director, the order 
shall, to the extent of such consent, cease to apply to such 
party with respect to the regulated entity or such Office of 
Finance described in the written consent. Any such consent 
shall be publicly disclosed. 
‘‘(3) VIOLATION OF PARAGRAPH (1) TREATED AS VIOLATION 
OF ORDER.—Any violation of paragraph (1) by any person who 
is subject to an order issued under subsection (h) shall be 
treated as a violation of the order. 
‘‘(f) APPLICABILITY.—This section shall only apply to a person 
who is an individual, unless the Director specifically finds that 
it should apply to a corporation, firm, or other business entity. 
‘‘(g) STAY OF SUSPENSION AND PROHIBITION OF ENTITY-AFFILI-
ATED PARTY.—Not later than 10 days after the date on which 
any entity-affiliated party has been suspended from office or prohib-
ited from participation in the conduct of the affairs of a regulated 
entity under this section, such party may apply to the United 
States District Court for the District of Columbia, or the United 
States district court for the judicial district in which the head-
quarters of the regulated entity is located, for a stay of such suspen-
sion or prohibition pending the completion of the administrative 
proceedings pursuant to subsection (c). The court shall have jurisdic-
tion to stay such suspension or prohibition. 
‘‘(h) SUSPENSION
OR REMOVAL
OF ENTITY-AFFILIATED PARTY 
CHARGED WITH FELONY.— 
‘‘(1) SUSPENSION OR PROHIBITION.— 
‘‘(A) IN GENERAL.—Whenever any entity-affiliated party 
is charged in any information, indictment, or complaint,
H. R. 3221—120 
with the commission of or participation in a crime involving 
dishonesty or breach of trust which is punishable by impris-
onment for a term exceeding 1 year under Federal or 
State law, the Director may, if continued service or partici-
pation by such party may pose a threat to the regulated 
entity or impair public confidence in the regulated entity, 
by written notice served upon such party, suspend such 
party from office or prohibit such party from further partici-
pation in any manner in the conduct of the affairs of 
any regulated entity. 
‘‘(B) PROVISIONS APPLICABLE TO NOTICE.— 
‘‘(i) COPY.—A copy of any notice under subpara-
graph (A) shall be served upon the relevant regulated 
entity. 
‘‘(ii) EFFECTIVE PERIOD.—A suspension or prohibi-
tion under subparagraph (A) shall remain in effect 
until the information, indictment, or complaint referred 
to in subparagraph (A) is finally disposed of, or until 
terminated by the Director. 
‘‘(2) REMOVAL OR PROHIBITION.— 
‘‘(A) IN GENERAL.—If a judgment of conviction or an 
agreement to enter a pretrial diversion or other similar 
program is entered against an entity-affiliated party in 
connection with a crime described in paragraph (1)(A), 
at such time as such judgment is not subject to further 
appellate review, the Director may, if continued service 
or participation by such party may pose a threat to the 
regulated entity or impair public confidence in the regu-
lated entity, issue and serve upon such party an order 
removing such party from office or prohibiting such party 
from further participation in any manner in the conduct 
of the affairs of the regulated entity without the prior 
written consent of the Director. 
‘‘(B) PROVISIONS APPLICABLE TO ORDER.— 
‘‘(i) COPY.—A copy of any order under subpara-
graph (A) shall be served upon the relevant regulated 
entity, at which time the 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 finding of not guilty 
or other disposition of the charge shall not preclude 
the Director from instituting proceedings after such 
finding or disposition to remove a party from office 
or to prohibit further participation in the affairs of 
a regulated entity pursuant to subsection (a) or (b). 
‘‘(iii) EFFECTIVE
PERIOD.—Unless terminated by 
the Director, any notice of suspension or order of 
removal issued under this subsection shall remain 
effective and outstanding until the completion of any 
hearing or appeal authorized under paragraph (4). 
‘‘(3) AUTHORITY OF REMAINING BOARD MEMBERS.— 
‘‘(A) IN
GENERAL.—If at any time, because of the 
suspension of 1 or more directors pursuant to this section, 
there shall be on the board of directors of a regulated 
entity less than a quorum of directors not so suspended, 
all powers and functions vested in or exercisable by such
H. R. 3221—121 
board shall vest in and be exercisable by the director or 
directors on the board not so suspended, until such time 
as there shall be a quorum of the board of directors. 
‘‘(B) APPOINTMENT OF TEMPORARY DIRECTORS.—If all 
of the directors of a regulated entity are suspended pursu-
ant to this section, the Director shall appoint persons to 
serve temporarily as directors 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 PARTICIPATION.— 
‘‘(A) IN GENERAL.—Not later than 30 days after the 
date of service of any notice of suspension or order of 
removal issued pursuant to paragraph (1) or (2), the entity- 
affiliated party may request in writing an opportunity to 
appear before the Director to show that the continued 
service or participation in the conduct of the affairs of 
the regulated entity by such party does not, or is not 
likely to, pose a threat to the interests of the regulated 
entity, or threaten to impair public confidence in the regu-
lated entity. 
‘‘(B) TIMING AND FORM OF HEARING.—Upon receipt of 
a request for a hearing under subparagraph (A), the 
Director shall fix a time (not later than 30 days after 
the date of receipt of such request, unless extended at 
the request of such party) and place at which the entity- 
affiliated party may appear, personally or through counsel, 
before the Director or 1 or more designated employees 
of the Director to submit written materials (or, at the 
discretion of the Director, oral testimony) and oral argu-
ment. 
‘‘(C) DETERMINATION.—Not later than 60 days after 
the date of a hearing under subparagraph (B), the Director 
shall notify the entity-affiliated party whether the suspen-
sion or prohibition from participation in any manner in 
the conduct of the affairs of the regulated entity will be 
continued, terminated, or otherwise modified, or whether 
the order removing such party from office or prohibiting 
such party from further participation in any manner in 
the conduct of the affairs of the regulated entity will be 
rescinded or otherwise modified. Such notification shall 
contain a statement of the basis for any adverse decision 
of the Director. 
‘‘(5) RULES.—The Director is authorized to prescribe such 
rules as may be necessary to carry out this subsection.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) SAFETY AND SOUNDNESS ACT.—Subtitle C of the Federal 
Housing Enterprises Financial Safety and Soundness Act of 
1992 (12 U.S.C. 4501 et seq.) is amended— 
(A) in section 1317(f), by striking ‘‘section 1379B’’ and 
inserting ‘‘section 1379D’’; 
(B) in section 1373(a)— 
(i) in paragraph (1), by striking ‘‘or 1376(c)’’ and 
inserting ‘‘, 1376(c), or 1377’’; 
(ii) in paragraph (2), by inserting ‘‘or 1377’’ after’’ 
1371’’; and
H. R. 3221—122 
(iii) in paragraph (4), by inserting ‘‘or removal 
or prohibition’’ after ‘‘cease and desist’’; and 
(C) in section 1374(a)— 
(i) by striking ‘‘or 1376’’ and inserting ‘‘1313B, 
1376, or 1377’’; and 
(ii) by striking ‘‘such section’’ and inserting ‘‘this 
title’’. 
(2) FANNIE MAE CHARTER ACT.—Section 308(b) of the Fed-
eral National Mortgage Association Charter Act (12 U.S.C. 
1723(b)) is amended in the second sentence, by striking ‘‘The’’ 
and inserting ‘‘Except to the extent that action under section 
1377 of the Federal Housing Enterprises Financial Safety and 
Soundness Act of 1992 temporarily results in a lesser number, 
the’’. 
(3) FREDDIE
MAC
CHARTER
ACT.—Section 303(a)(2)(A) of 
the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 
1452(a)(2)(A)) is amended, in the second sentence, by striking 
‘‘The’’ and inserting ‘‘Except to the extent action under section 
1377 of the Federal Housing Enterprises Financial Safety and 
Soundness Act of 1992 temporarily results in a lesser number, 
the’’. 
SEC. 1154. ENFORCEMENT AND JURISDICTION. 
Section 1375 of the Federal Housing Enterprises Financial 
Safety and Soundness 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 discretion 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 headquarters of the regulated entity 
is located, for the enforcement 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 
(2) in subsection (b), by striking ‘‘or 1376’’ and inserting 
‘‘1313B, 1376, or 1377’’. 
SEC. 1155. CIVIL MONEY PENALTIES. 
Section 1376 of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (12 U.S.C. 4636) is amended— 
(1) by striking subsection (a) and inserting the following: 
‘‘(a) IN GENERAL.—The Director may impose a civil money 
penalty in accordance with this section on any regulated entity 
or any entity-affiliated party. The Director shall not impose a civil 
penalty in accordance with this section on any regulated entity 
or any entity-affiliated party for any violation that is addressed 
under section 1345(a).’’; 
(2) by striking subsection (b) and inserting the following: 
‘‘(b) AMOUNT OF PENALTY.— 
‘‘(1) FIRST
TIER.—A regulated entity or entity-affiliated 
party shall forfeit and pay a civil penalty of not more than 
$10,000 for each day during which a violation continues, if 
such regulated entity or party— 
‘‘(A) violates any provision of this title, the authorizing 
statutes, or any order, condition, rule, or regulation under 
this title or any authorizing statute;
H. R. 3221—123 
‘‘(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; or 
‘‘(D) violates any written agreement between the regu-
lated entity and the Director. 
‘‘(2) SECOND TIER.—Notwithstanding paragraph (1), a regu-
lated entity or entity-affiliated party shall forfeit and pay a 
civil penalty of not more than $50,000 for each day during 
which a violation, practice, or breach continues, if— 
‘‘(A) the regulated entity or entity-affiliated party, 
respectively— 
‘‘(i) commits any violation described in any 
subparagraph of paragraph (1); 
‘‘(ii) recklessly engages in an unsafe or unsound 
practice in conducting the affairs of the regulated 
entity; or 
‘‘(iii) breaches any fiduciary duty; and 
‘‘(B) the violation, practice, or breach— 
‘‘(i) is part of a pattern of misconduct; 
‘‘(ii) causes or is likely to cause more than a 
minimal loss to the regulated entity; or 
‘‘(iii) results in pecuniary gain or other benefit 
to such party. 
‘‘(3) THIRD TIER.—Notwithstanding paragraphs (1) and (2), 
any regulated entity or entity-affiliated party shall forfeit and 
pay a civil penalty in an amount not to exceed the applicable 
maximum amount determined under paragraph (4) for each 
day during which such violation, practice, or breach continues, 
if such regulated entity or entity-affiliated party— 
‘‘(A) knowingly— 
‘‘(i) commits any violation described in any 
subparagraph of paragraph (1); 
‘‘(ii) engages in any unsafe or unsound practice 
in conducting the affairs of the regulated entity; or 
‘‘(iii) breaches any fiduciary duty; and 
‘‘(B) knowingly or recklessly causes a substantial loss 
to the regulated entity or a substantial pecuniary gain 
or other benefit to such party by reason of such violation, 
practice, or breach. 
‘‘(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 paragraph 
(3) is— 
‘‘(A) in the case of any entity-affiliated party, an 
amount not to exceed $2,000,000; and 
‘‘(B) in the case of any regulated entity, $2,000,000.’’; 
(3) in subsection (c)— 
(A) by striking ‘‘enterprise’’ each place that term 
appears and inserting ‘‘regulated entity’’; 
(B) by inserting ‘‘or entity-affiliated party’’ before ‘‘in 
writing’’; and 
(C) by inserting ‘‘or entity-affiliated party’’ before ‘‘has 
been given’’; 
(4) in subsection (d)—
H. R. 3221—124 
(A) by striking ‘‘or director’’ each place such term 
appears and inserting ‘‘director, or entity-affiliated party’’; 
(B) by striking ‘‘an enterprise’’ and inserting ‘‘a regu-
lated entity’’; 
(C) by striking ‘‘the enterprise’’ and inserting ‘‘the regu-
lated entity’’; 
(D) by striking ‘‘request the Attorney General of the 
United States to’’; 
(E) by inserting ‘‘, or the United States district court 
within the jurisdiction of which the headquarters of the 
regulated entity is located,’’ after ‘‘District of Columbia’’; 
(F) by striking ‘‘, or may, under the direction and 
control of the Attorney General of the United States, bring 
such an action’’; and 
(G) by striking ‘‘and section 1374’’; and 
(5) in subsection (g), by striking ‘‘An enterprise’’ and 
inserting ‘‘A regulated entity’’. 
SEC. 1156. CRIMINAL PENALTY. 
(a) IN GENERAL.—Subtitle C of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4631 et 
seq.) is amended by inserting after section 1377, as added by 
this Act, the following: 
‘‘SEC. 1378. CRIMINAL PENALTY. 
‘‘Whoever, being subject to an order in effect under section 
1377, without the prior written approval of the Director, 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, notwith-
standing section 3571 of title 18, be fined not more than $1,000,000, 
imprisoned for not more than 5 years, or both.’’. 
(b) TECHNICAL AND CONFORMING AMENDMENTS.—The Federal 
Housing Enterprises Financial Safety and Soundness Act of 1992 
(12 U.S.C. 4501 et seq.) is amended— 
(1) in section 1379 (as so designated by this Act)— 
(A) by striking ‘‘an enterprise’’ and inserting ‘‘a regu-
lated entity’’; and 
(B) by striking ‘‘the enterprise’’ and inserting ‘‘the regu-
lated entity’’; 
(2) in section 1379A (as so designated by this Act), by 
striking ‘‘an enterprise’’ and inserting ‘‘a regulated entity’’; 
(3) in section 1379B(c) (as so designated by this Act), by 
striking ‘‘enterprise’’ and inserting ‘‘regulated entity’’; and 
(4) in section 1379D (as so designated by this Act), by 
striking ‘‘enterprise’’ and inserting ‘‘regulated entity’’. 
SEC. 1157. NOTICE AFTER SEPARATION FROM SERVICE. 
Section 1379 of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (12 U.S.C. 4637), as so designated 
by this Act, is amended— 
(1) by striking ‘‘2-year’’ and inserting ‘‘6-year’’; 
(2) by striking ‘‘a director or executive officer of an enter-
prise’’ and inserting ‘‘an entity-affiliated party’’; 
(3) by striking ‘‘director or officer’’ each place that term 
appears and inserting ‘‘entity-affiliated party’’; and 
(4) by striking ‘‘enterprise.’’ and inserting ‘‘regulated 
entity.’’.
H. R. 3221—125 
SEC. 1158. SUBPOENA AUTHORITY. 
(a) IN GENERAL.—Section 1379B of the Federal Housing Enter-
prises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4641) 
is amended— 
(1) in subsection (a)— 
(A) in the matter preceding paragraph (1)— 
(i) by striking ‘‘administrative’’; 
(ii) by inserting ‘‘, examination, or investigation’’ 
after ‘‘proceeding’’; 
(iii) by striking ‘‘subtitle’’ and inserting ‘‘title’’; and 
(iv) by inserting ‘‘or any designated representative 
thereof, including any person designated to conduct 
any hearing under this subtitle’’ after ‘‘Director’’; and 
(B) in paragraph (4), by striking ‘‘issued by the 
Director’’; 
(2) in subsection (b), by inserting ‘‘or in any territory or 
other place subject to the jurisdiction of the United States’’ 
after ‘‘State’’; 
(3) by striking subsection (c) and inserting the following: 
‘‘(c) ENFORCEMENT.— 
‘‘(1) IN GENERAL.—The Director, or any party to proceedings 
under this subtitle, may apply to the United States District 
Court for the District of Columbia, or the United States district 
court for the judicial district of the United States in any terri-
tory in which such proceeding is being conducted, or where 
the witness resides or carries on business, for enforcement 
of any subpoena or subpoena duces tecum issued pursuant 
to this section. 
‘‘(2) POWER OF COURT.—The courts described under para-
graph (1) shall have the jurisdiction and power to order and 
require compliance with any subpoena issued under paragraph 
(1).’’; 
(4) in subsection (d), by inserting ‘‘enterprise-affiliated 
party’’ before ‘‘may allow’’; and 
(5) by adding at the end the following: 
‘‘(e) PENALTIES.—A person shall be guilty of a misdemeanor, 
and upon conviction, shall be subject to a fine of not more than 
$1,000 or to imprisonment for a term of not more than 1 year, 
or both, if that person willfully fails or refuses, in disobedience 
of a subpoena issued under subsection (c), to— 
‘‘(1) attend court; 
‘‘(2) testify in court; 
‘‘(3) answer any lawful inquiry; or 
‘‘(4) produce books, papers, correspondence, contracts, 
agreements, or such other records as requested in the sub-
poena.’’. 
Subtitle E—General Provisions 
SEC. 1161. CONFORMING AND TECHNICAL AMENDMENTS. 
(a) AMENDMENTS TO 1992 ACT.—The Federal Housing Enter-
prises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 
et seq.), as amended by this Act, is amended— 
(1) in section 1315 (12 U.S.C. 4515)— 
(A) in subsection (a)—
H. R. 3221—126 
(i) by striking ‘‘(a) OFFICE PERSONNEL.—The’’ and 
inserting ‘‘(a) IN GENERAL.—Subject to title III of the 
Federal Housing Finance Regulatory Reform Act of 
2008, the’’; and 
(ii) by striking ‘‘the Office’’ each place that term 
appears and inserting ‘‘the Agency’’; 
(B) in subsection (c), by striking ‘‘the Office’’ and 
inserting ‘‘the Agency’’; 
(C) in subsection (e), by striking ‘‘the Office’’ and 
inserting ‘‘the Agency’’; 
(D) by striking subsection (d) and redesignating sub-
section (e) as subsection (d); and 
(E) by striking subsection (f); 
(2) in section 1319A (12 U.S.C. 4520)— 
(A) by striking ‘‘(a) IN GENERAL.—’’; and 
(B) by striking subsection (b); 
(3) in section 1364(c) (12 U.S.C. 4614(c)), by striking the 
last sentence; 
(4) by striking section 1383 (12 U.S.C. 1451 note); 
(5) in each of sections 1319D, 1319E, and 1319F (12 U.S.C. 
4523, 4524, 4525) by striking ‘‘the Office’’ each place that term 
appears and inserting ‘‘the Agency’’; and 
(6) in each of sections 1319B and 1369(a)(3) (12 U.S.C. 
4521, 4619(a)(3)), by striking ‘‘Committee on Banking, Finance 
and Urban Affairs’’ each place such term appears and inserting 
‘‘Committee on Financial Services’’. 
(b) AMENDMENTS TO FANNIE MAE CHARTER ACT.—The Federal 
National Mortgage Association Charter Act (12 U.S.C. 1716 et seq.) 
is amended— 
(1) in each of sections 303(c)(2) (12 U.S.C. 1718(c)(2)), 
309(d)(3)(B) (12 U.S.C. 1723a(d)(3)(B)), and 309(k)(1) (12 U.S.C. 
1723a(k)(1)), by striking ‘‘Director of the Office of Federal 
Housing Enterprise Oversight of the Department of Housing 
and Urban Development’’ each place that term appears, and 
inserting ‘‘Director of the Federal Housing Finance Agency’’; 
and 
(2) in section 309— 
(A) in subsection (m) (12 U.S.C. 1723a(m))— 
(i) in paragraph (1), by striking ‘‘to the Secretary, 
in a form determined by the Secretary’’ and inserting 
‘‘to the Director of the Federal Housing Finance 
Agency, in a form determined by the Director’’; and 
(ii) in paragraph (2), by striking ‘‘to the Secretary, 
in a form determined by the Secretary’’ and inserting 
‘‘to the Director of the Federal Housing Finance 
Agency, in a form determined by the Director’’; 
(B) in subsection (n) (12 U.S.C. 1723a(n))— 
(i) in paragraph (1), by striking ‘‘and the Secretary’’ 
and inserting ‘‘and the Director of the Federal Housing 
Finance Agency’’; and 
(ii) in paragraph (2), by striking ‘‘Secretary’’ each 
place that term appears and inserting ‘‘Director of 
the Federal Housing Finance Agency’’; and 
(C) in paragraph (3)(B), by striking ‘‘Secretary’’ and 
inserting ‘‘Director of the Federal Housing Finance 
Agency’’.
H. R. 3221—127 
(c) AMENDMENTS TO FREDDIE MAC CHARTER ACT.—The Federal 
Home Loan Mortgage Corporation Act (12 U.S.C. 1451 et seq.) 
is amended— 
(1) in each of sections 303(b)(2) (12 U.S.C. 1452(b)(2)), 
303(h)(2) (12 U.S.C. 1452(h)(2)), and section 307(c)(1) (12 U.S.C. 
1456(c)(1)), by striking ‘‘Director of the Office of Federal 
Housing Enterprise Oversight of the Department of Housing 
and Urban Development’’ each place that term appears, and 
inserting ‘‘Director of the Federal Housing Finance Agency’’; 
(2) in section 306 (12 U.S.C. 1455)— 
(A) in subsection (c)(2), by inserting ‘‘the’’ after ‘‘Sec-
retary of’’; 
(B) in subsection (i)— 
(i) by striking ‘‘section 1316(c)’’ and inserting ‘‘sec-
tion 306(c)’’; and 
(ii) by striking ‘‘section 106’’ and inserting ‘‘section 
1316’’; and 
(C) in subsection (j)(2), by striking ‘‘of substantially’’ 
and inserting ‘‘or substantially’’; and 
(3) in section 307 (12 U.S.C. 1456)— 
(A) in subsection (e)— 
(i) in paragraph (1), by striking ‘‘to the Secretary, 
in a form determined by the Secretary’’ and inserting 
‘‘to the Director of the Federal Housing Finance 
Agency, in a form determined by the Director’’; and 
(ii) in paragraph (2), by striking ‘‘to the Secretary, 
in a form determined by the Secretary’’ and inserting 
‘‘to the Director of the Federal Housing Finance 
Agency, in a form determined by the Director’’; and 
(B) in subsection (f)— 
(i) in paragraph (1), by striking ‘‘and the Secretary’’ 
and inserting ‘‘and the Director of the Federal Housing 
Finance Agency’’; 
(ii) in paragraph (2), by striking ‘‘the Secretary’’ 
each place that term appears and inserting ‘‘the 
Director of the Federal Housing Finance Agency’’; and 
(iii) in paragraph (3)(B), by striking ‘‘Secretary’’ 
and inserting ‘‘Director of the Federal Housing Finance 
Agency’’. 
(d) AMENDMENT TO TITLE 18, UNITED STATES CODE.—Section 
1905 of title 18, United States Code, is amended by striking ‘‘Office 
of Federal Housing Enterprise Oversight’’ and inserting ‘‘Federal 
Housing Finance Agency’’. 
(e) AMENDMENTS
TO FLOOD DISASTER PROTECTION ACT
OF 
1973.—Section 102(f)(3)(A) of the Flood Disaster 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 Depart-
ment of Housing and Urban Development’’ and inserting ‘‘Director 
of the Federal Housing Finance Agency’’. 
(f) AMENDMENT
TO DEPARTMENT
OF HOUSING
AND URBAN 
DEVELOPMENT ACT.—Section 5 of the Department of Housing and 
Urban Development Act (42 U.S.C. 3534) is amended by striking 
subsection (d). 
(g) AMENDMENTS TO TITLE 5, UNITED STATES CODE.—Title 5, 
United States Code, is amended— 
(1) in section 5313, by striking the item relating to the 
Director of the Office of Federal Housing Enterprise Oversight,
H. R. 3221—128 
Department of Housing and Urban Development and inserting 
the following new item: 
‘‘Director of the Federal Housing Finance Agency.’’; and 
(2) in section 3132(a)(1)— 
(A) in subparagraph (B), by striking ‘‘,, and’’ and 
inserting ‘‘, and’’; 
(B) in subparagraph (D)— 
(i) by striking ‘‘the Federal Housing Finance 
Board’’; 
(ii) by striking ‘‘the Office of Federal Housing 
Enterprise Oversight of the Department of Housing 
and Urban Development’’ and inserting ‘‘the Federal 
Housing Finance Agency’’; and 
(iii) by striking ‘‘or or’’ at the end; 
(C) in subparagraph (E), as added by section 
8(d)(1)(B)(iii) of Public Law 107–123, by adding ‘‘or’’ at 
the end; and 
(D) by redesignating subparagraph (E), as added by 
section 10702(c)(1)(C) of Public Law 107–171, as subpara-
graph (F). 
(h) 
AMENDMENT
TO
SARBANES-OXLEY
ACT.—Section 
105(b)(5)(B)(ii)(II) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 
7215(b)(5)(B)(ii)(II)) is amended by inserting ‘‘and the Director of 
the Federal Housing Finance Agency,’’ after ‘‘Commission,’’. 
(i) AMENDMENT TO 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: 
‘‘(vii) Federal Housing Finance Agency.’’. 
SEC. 1162. PRESIDENTIALLY-APPOINTED DIRECTORS OF ENTER-
PRISES. 
(a) FANNIE MAE.— 
(1) IN GENERAL.—Section 308(b) of the Federal 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 appointed annually by the President 
of the United States, and the remainder of whom’’ and 
inserting ‘‘13 persons, or such other number that the 
Director determines appropriate, who’’; 
(B) in the second sentence, by striking ‘‘appointed by 
the President’’; 
(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 amendments made by 
paragraph (1) shall not apply to any appointed position of 
the board of directors of the Federal National Mortgage Associa-
tion until the expiration of the annual term for such position 
during which the effective date under section 1163 occurs. 
(b) FREDDIE MAC.—
H. R. 3221—129 
(1) IN GENERAL.—Section 303(a)(2) of the Federal Home 
Loan Mortgage Corporation Act (12 U.S.C. 1452(a)(2)) is 
amended— 
(A) in subparagraph (A)— 
(i) in the first sentence, by striking ‘‘18 persons, 
5 of whom shall be appointed annually by the President 
of the United States and the remainder of whom’’ 
and inserting ‘‘13 persons, or such other number as 
the Director determines appropriate, who’’; and 
(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 appointed 
member may be removed from office 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 amendments 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 during which the effective date under section 1163 
occurs. 
SEC. 1163. EFFECTIVE DATE. 
Except as otherwise specifically provided in this title, this title 
and the amendments made by this title shall take effect on, and 
shall apply beginning on, the date of enactment of this Act. 
TITLE II—FEDERAL HOME LOAN BANKS 
SEC. 1201. RECOGNITION OF DISTINCTIONS BETWEEN THE ENTER-
PRISES AND THE FEDERAL HOME LOAN BANKS. 
Section 1313 of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (12 U.S.C. 4513) is amended 
by adding at the end the following: 
‘‘(f) RECOGNITION OF DISTINCTIONS BETWEEN THE ENTERPRISES 
AND THE FEDERAL HOME LOAN BANKS.—Prior to promulgating any 
regulation or taking any other formal or informal agency action 
of general applicability and future effect relating to the Federal 
Home Loan Banks (other than any regulation, advisory document, 
or examination guidance of the Federal Housing Finance Board 
that the Director reissues after the authority of the Director over 
the Federal Home Loan Banks takes effect), including the issuance 
of an advisory document or examination guidance, the Director 
shall consider the differences between the Federal Home Loan 
Banks and the enterprises with respect to— 
‘‘(1) the Banks’— 
‘‘(A) cooperative ownership structure; 
‘‘(B) the mission of providing liquidity to members; 
‘‘(C) affordable housing and community development 
mission; 
‘‘(D) capital structure; and 
‘‘(E) joint and several liability; and