H. R. 3221—70 
subsection (c) transfer to such affordable housing trust fund the 
aggregate amount allocated pursuant to subsection (c) in such year. 
Notwithstanding any other provision of law, assistance provided 
using amounts transferred to such affordable housing trust fund 
pursuant to this subsection may not be used for any of the activities 
specified in clauses (i) through (vi) of subsection (c)(9)(D). 
‘‘(i) FUNDING ACCOUNTABILITY AND TRANSPARENCY.—Any grant 
under this section to a grantee by a State or State designated 
entity, any assistance provided to a recipient by a State or State 
designated entity, and any grant, award, or other assistance from 
an affordable housing trust fund referred to in subsection (h) shall 
be considered a Federal award for purposes of the Federal Funding 
Accountability and Transparency Act of 2006 (31 U.S.C. 6101 note). 
Upon the request of the Director of the Office of Management 
and Budget, the Secretary shall obtain and provide such information 
regarding any such grants, assistance, and awards as the Director 
of the Office of Management and Budget considers necessary to 
comply with the requirements of such Act, as applicable, pursuant 
to the preceding sentence. 
‘‘SEC. 1339. CAPITAL MAGNET FUND. 
‘‘(a) ESTABLISHMENT.—There is established in the Treasury of 
the United States a trust fund to be known as the Capital Magnet 
Fund, which shall be a special account within the Community 
Development Financial Institutions Fund. 
‘‘(b) DEPOSITS TO TRUST FUND.—The Capital Magnet Fund shall 
consist of— 
‘‘(1) any amounts transferred to the Fund pursuant to 
section 1337; and 
‘‘(2) any amounts as are or may be appropriated, trans-
ferred, or credited to such Fund under any other provisions 
of law. 
‘‘(c) EXPENDITURES FROM TRUST FUND.—Amounts in the Capital 
Magnet Fund shall be available to the Secretary of the Treasury 
to carry out a competitive grant program to attract private capital 
for and increase investment in— 
‘‘(1) the development, preservation, rehabilitation, or pur-
chase of affordable housing for primarily extremely low-, very 
low-, and low-income families; and 
‘‘(2) economic development activities or community service 
facilities, such as day care centers, workforce development cen-
ters, and health care clinics, which in conjunction with afford-
able housing activities implement a concerted strategy to sta-
bilize or revitalize a low-income area or underserved rural 
area. 
‘‘(d) FEDERAL ASSISTANCE.—For purposes of the application of 
Federal civil rights laws, all assistance provided using amounts 
in the Capital Magnet Fund shall be considered Federal financial 
assistance. 
‘‘(e) ELIGIBLE GRANTEES.—A grant under this section may be 
made, pursuant to such requirements as the Secretary of the 
Treasury shall establish for experience and success in attracting 
private financing and carrying out the types of activities proposed 
under the application of the grantee, only to— 
‘‘(1) a Treasury certified community development financial 
institution; or
H. R. 3221—71 
‘‘(2) a nonprofit organization having as 1 of its principal 
purposes the development or management of affordable 
housing. 
‘‘(f) ELIGIBLE USES.—Grant amounts awarded from the Capital 
Magnet Fund pursuant to this section may be used for the purposes 
described in paragraphs (1) and (2) of subsection (c), including 
for the following uses: 
‘‘(1) To provide loan loss reserves. 
‘‘(2) To capitalize a revolving loan fund. 
‘‘(3) To capitalize an affordable housing fund. 
‘‘(4) To capitalize a fund to support activities described 
in subsection (c)(2). 
‘‘(5) For risk-sharing loans. 
‘‘(g) APPLICATIONS.— 
‘‘(1) IN GENERAL.—The Secretary of the Treasury shall pro-
vide, in a competitive application process established by regula-
tion, for eligible grantees under subsection (e) to submit applica-
tions for Capital Magnet Fund grants to the Secretary at such 
time and in such manner as the Secretary shall determine. 
‘‘(2) CONTENT OF APPLICATION.—The application required 
under paragraph (1) shall include a detailed description of— 
‘‘(A) the types of affordable housing, economic, and 
community revitalization projects that support or sustain 
residents of an affordable housing project funded by a 
grant under this section for which such grant amounts 
would be used, including the proposed use of eligible grants 
as authorized under this section; 
‘‘(B) the types, sources, and amounts of other funding 
for such projects; and 
‘‘(C) the expected time frame of any grant used for 
such project. 
‘‘(h) GRANT LIMITATION.— 
‘‘(1) IN GENERAL.—Any 1 eligible grantee and its subsidi-
aries and affiliates may not be awarded more than 15 percent 
of the aggregate funds available for grants during any year 
from the Capital Magnet Fund. 
‘‘(2) GEOGRAPHIC DIVERSITY.— 
‘‘(A) GOAL.—The Secretary of the Treasury shall seek 
to fund activities in geographically diverse areas of eco-
nomic distress, including metropolitan and underserved 
rural areas in every State. 
‘‘(B) DIVERSITY DEFINED.—For purposes of this para-
graph, geographic diversity includes those areas that meet 
objective criteria of economic distress developed by the 
Secretary of the Treasury, which may include— 
‘‘(i) the percentage of low-income families or the 
extent of poverty; 
‘‘(ii) the rate of unemployment or underemploy-
ment; 
‘‘(iii) extent of blight and disinvestment; 
‘‘(iv) projects that target extremely low-, very low- 
, and low-income families in or outside a designated 
economic distress area; or 
‘‘(v) any other criteria designated by the Secretary 
of the Treasury. 
‘‘(3) LEVERAGE OF FUNDS.—Each grant from the Capital 
Magnet Fund awarded under this section shall be reasonably
H. R. 3221—72 
expected to result in eligible housing, or economic and commu-
nity development projects that support or sustain an affordable 
housing project funded by a grant under this section whose 
aggregate costs total at least 10 times the grant amount. 
‘‘(4) COMMITMENT
FOR
USE
DEADLINE.—Amounts made 
available for grants under this section shall be committed for 
use within 2 years of the date of such allocation. The Secretary 
of the Treasury shall recapture into the Capital Magnet Fund 
any amounts not so used or committed for use and allocate 
such amounts in the first year after such recapture. 
‘‘(5) PROHIBITED USES.—The Secretary shall, by regulation, 
set forth prohibited uses of grant amounts awarded under 
this section, which shall include use for— 
‘‘(A) political activities; 
‘‘(B) advocacy; 
‘‘(C) lobbying, whether directly or through other par-
ties; 
‘‘(D) counseling services; 
‘‘(E) travel expenses; and 
‘‘(F) preparing or providing advice on tax returns; 
and for the purposes of this paragraph, the prohibited use 
of funds for political activities includes influencing the selection, 
nomination, election, or appointment of one or more candidates 
to any Federal, State or local office as codified in section §501 
of the Internal Revenue Code of 1986 (26 U.S.C. 501). 
‘‘(6) ADDITIONAL LOBBYING RESTRICTIONS.—No assistance 
or amounts made available under this section may be expended 
by an eligible grantee to pay any person to influence or attempt 
to influence any agency, elected official, officer or employee 
of a State or local government in connection with the making, 
award, extension, continuation, renewal, amendment, or modi-
fication of any State or local government contract, grant, loan, 
or cooperative agreement as such terms are defined in section 
1352 of title 31, United States Code. 
‘‘(7) PROHIBITION OF CONSIDERATION OF USE FOR MEETING 
HOUSING GOALS OR DUTY TO SERVE.—In determining the compli-
ance of the enterprises with the housing goals under this section 
and the duty to serve underserved markets under section 1335, 
the Director of the Federal Housing Finance Agency may not 
consider any Capital Magnet Fund amounts used under this 
section for eligible activities under subsection (f). The Director 
of the Federal Housing Finance Agency shall give credit toward 
the achievement of such housing goals and such duty to serve 
underserved markets to purchases by the enterprises of mort-
gages for housing that receives funding from Capital Magnet 
Fund grant amounts, but only to the extent that such purchases 
by the enterprises are funded other than with such grant 
amounts. 
‘‘(8) ACCOUNTABILITY OF RECIPIENTS AND GRANTEES.— 
‘‘(A) TRACKING
OF
FUNDS.—The Secretary of the 
Treasury shall— 
‘‘(i) require each grantee to develop and maintain 
a system to ensure that each recipient of assistance 
from the Capital Magnet Fund uses such amounts 
in accordance with this section, the regulations issued 
under this section, and any requirements or conditions 
under which such amounts were provided; and
H. R. 3221—73 
‘‘(ii) establish minimum requirements for agree-
ments, between the grantee and the Capital Magnet 
Fund, regarding assistance from the Capital Magnet 
Fund, which shall include— 
‘‘(I) appropriate periodic financial and project 
reporting, record retention, and audit require-
ments for the duration of the grant to the recipient 
to ensure compliance with the limitations and 
requirements of this section and the regulations 
under this section; and 
‘‘(II) any other requirements that the Secretary 
determines are necessary to ensure appropriate 
grant administration and compliance. 
‘‘(B) MISUSE
OF
FUNDS.—If the Secretary of the 
Treasury determines, after reasonable notice and oppor-
tunity for hearing, that a grantee has failed to comply 
substantially with any provision of this section and until 
the Secretary is satisfied that there is no longer any such 
failure to comply, the Secretary shall— 
‘‘(i) reduce the amount of assistance under this 
section to the grantee by an amount equal to the 
amount of Capital Magnet Fund grant amounts which 
were not used in accordance with this section; 
‘‘(ii) require the grantee to repay the Secretary 
any amount of the Capital Magnet Fund grant amounts 
which were not used in accordance with this section; 
‘‘(iii) limit the availability of assistance under this 
section to the grantee to activities or recipients not 
affected by such failure to comply; or 
‘‘(iv) terminate any assistance under this section 
to the grantee. 
‘‘(i) PERIODIC REPORTS.— 
‘‘(1) IN
GENERAL.—The Secretary of the Treasury shall 
submit a report, on a periodic basis, to the Committee on 
Banking, Housing, and Urban Affairs of the Senate and the 
Committee on Financial Services of the House of Representa-
tives describing the activities to be funded under this section. 
‘‘(2) REPORTS AVAILABLE TO PUBLIC.—The Secretary of the 
Treasury shall make the reports required under paragraph 
(1) publicly available. 
‘‘(j) REGULATIONS.— 
‘‘(1) IN GENERAL.—The Secretary of the Treasury shall issue 
regulations to carry out this section. 
‘‘(2) REQUIRED CONTENTS.—The regulations issued under 
this subsection shall include— 
‘‘(A) authority for the Secretary to audit, provide for 
an audit, or otherwise verify an enterprise’s activities, to 
ensure compliance with this section; 
‘‘(B) a requirement that the Secretary ensure that the 
allocation of each enterprise is audited not less than 
annually to ensure compliance with this section; 
‘‘(C) a requirement that, for the purposes of subpara-
graphs (A) and (B), any financial statement submitted by 
a grantee to the Secretary shall be reviewed by an inde-
pendent certified public accountant in accordance with
H. R. 3221—74 
Statements on Standards for Accounting and Review Serv-
ices, issued by the American Institute of Certified Public 
Accountants; and 
‘‘(D) requirements for a process for application to, and 
selection by, the Secretary for activities to be funded with 
amounts from the Capital Magnet Fund, which shall pro-
vide that— 
‘‘(i) funds be fairly distributed to urban, suburban, 
and rural areas; and 
‘‘(ii) selection shall be based upon specific criteria, 
including a prioritization of funding based upon— 
‘‘(I) the ability to use such funds to generate 
additional investments; 
‘‘(II) affordable housing need (taking into 
account the distinct needs of different regions of 
the country); and 
‘‘(III) ability to obligate amounts and under-
take activities so funded in a timely manner.’’. 
SEC. 1132. FINANCIAL EDUCATION AND COUNSELING. 
(a) GOALS.—Financial education and counseling under this sec-
tion shall have the goal of— 
(1) increasing the financial knowledge and decision making 
capabilities of prospective homebuyers; 
(2) assisting prospective homebuyers to develop monthly 
budgets, build personal savings, finance or plan for major pur-
chases, reduce their debt, improve their financial stability, and 
set and reach their financial goals; 
(3) helping prospective homebuyers to improve their credit 
scores by understanding the relationship between their credit 
histories and their credit scores; and 
(4) educating prospective homebuyers about the options 
available to build savings for short- and long-term goals. 
(b) GRANTS.— 
(1) IN GENERAL.—The Secretary of the Treasury (in this 
section referred to as the ‘‘Secretary’’) shall make grants to 
eligible organizations to enable such organizations to provide 
a range of financial education and counseling services to 
prospective homebuyers. 
(2) 
SELECTION.—The 
Secretary 
shall 
select 
eligible 
organizations to receive assistance under this section based 
on their experience and ability to provide financial education 
and counseling services that result in documented positive 
behavioral changes. 
(c) ELIGIBLE ORGANIZATIONS.— 
(1) IN GENERAL.—For purposes of this section, the term 
‘‘eligible organization’’ means an organization that is— 
(A) certified in accordance with section 106(e)(1) of 
the Housing and Urban Development Act of 1968 (12 U.S.C. 
1701x(e)); or 
(B) certified by the Office of Financial Education of 
the Department of the Treasury for purposes of this section, 
in accordance with paragraph (2). 
(2) OFE CERTIFICATION.—To be certified by the Office of 
Financial Education for purposes of this section, an eligible 
organization shall be—
H. R. 3221—75 
(A) a housing counseling agency certified by the Sec-
retary of Housing and Urban Development under section 
106(e) of the Housing and Urban Development Act of 1968; 
(B) a State, local, or tribal government agency; 
(C) a community development financial institution (as 
defined in section 103(5) of the Community Development 
Banking and Financial Institutions Act of 1994 (12 U.S.C. 
4702(5)) or a credit union; or 
(D) any collaborative effort of entities described in 
any of subparagraphs (A) through (C). 
(d) AUTHORITY FOR PILOT PROJECTS.— 
(1) IN
GENERAL.—The Secretary of the Treasury shall 
authorize not more than 5 pilot project grants to eligible 
organizations under subsection (c) in order to— 
(A) carry out the services under this section; and 
(B) provide such other services that will improve the 
financial stability and economic condition of low- and mod-
erate-income and low-wealth individuals. 
(2) GOAL.—The goal of the pilot project grants under this 
subsection is to— 
(A) identify successful methods resulting in positive 
behavioral change for financial empowerment; and 
(B) establish program models for organizations to carry 
out effective counseling services. 
(e) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 
to be appropriated to the Secretary such sums as are necessary 
to carry out this section and for the provision of additional financial 
educational services. 
(f) STUDY AND REPORT ON EFFECTIVENESS AND IMPACT.— 
(1) IN GENERAL.—The Comptroller General of the United 
States shall conduct a study on the effectiveness and impact 
of the grant program established under this section. Not later 
than 3 years after the date of enactment of this Act, the 
Comptroller General shall submit a report on the results of 
such study to the Committee on Banking, Housing, and Urban 
Affairs of the Senate and the Committee on Financial Services 
of the House of Representatives. 
(2) CONTENT OF STUDY.—The study required under para-
graph (1) shall include an evaluation of the following: 
(A) The effectiveness of the grant program established 
under this section in improving the financial situation of 
homeowners and prospective homebuyers served by the 
grant program. 
(B) The extent to which financial education and coun-
seling services have resulted in positive behavioral changes. 
(C) The effectiveness and quality of the eligible 
organizations providing financial education and counseling 
services under the grant program. 
(g) REGULATIONS.—The Secretary is authorized to promulgate 
such regulations as may be necessary to implement and administer 
the grant program authorized by this section. 
SEC. 1133. TRANSFER AND RIGHTS OF CERTAIN HUD EMPLOYEES. 
(a) TRANSFER.—Each employee of the Department of Housing 
and Urban Development whose position responsibilities primarily 
involve the establishment and enforcement of the housing goals 
under subpart B of part 2 of subtitle A of the Federal Housing
H. R. 3221—76 
Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 
4561 et seq.) shall be transferred to the Federal Housing Finance 
Agency for employment, not later than the effective date of the 
Federal Housing Finance Regulatory Reform Act of 2008, and such 
transfer shall be deemed a transfer of function for purposes of 
section 3503 of title 5, United States Code. 
(b) GUARANTEED POSITIONS.— 
(1) IN GENERAL.—Each employee transferred under sub-
section (a) shall be guaranteed a position with the same status, 
tenure, grade, and pay as that held on the day immediately 
preceding the transfer. 
(2) NO
INVOLUNTARY
SEPARATION
OR
REDUCTION.—An 
employee transferred under subsection (a) holding a permanent 
position on the day immediately preceding the transfer may 
not be involuntarily separated or reduced in grade or compensa-
tion during the 12-month period beginning on the date of 
transfer, except for cause, or, in the case of a temporary 
employee, separated in accordance with the terms of the 
appointment of the employee. 
(c) APPOINTMENT AUTHORITY FOR EXCEPTED AND SENIOR EXECU-
TIVE SERVICE EMPLOYEES.— 
(1) IN GENERAL.—In the case of an employee occupying 
a position in the excepted service or the Senior Executive 
Service, any appointment authority established under law or 
by regulations of the Office of Personnel Management for filling 
such position shall be transferred, subject to paragraph (2). 
(2) DECLINE OF TRANSFER.—The Director may decline a 
transfer of authority under paragraph (1) to the extent that 
such authority relates to— 
(A) a position excepted from the competitive service 
because of its confidential, policymaking, policy-deter-
mining, or policy-advocating character; or 
(B) a noncareer position in the Senior Executive Service 
(within the meaning of section 3132(a)(7) of title 5, United 
States Code). 
(d) REORGANIZATION.—If the Director determines, after the end 
of the 1-year period beginning on the effective date of the Federal 
Housing Finance Regulatory Reform Act of 2008, that a reorganiza-
tion of the combined workforce is required, that reorganization 
shall be deemed a major reorganization for purposes of affording 
affected 
employee 
retirement 
under 
section 
8336(d)(2) 
or 
8414(b)(1)(B) of title 5, United States Code. 
(e) EMPLOYEE BENEFIT PROGRAMS.— 
(1) IN GENERAL.—Any employee described under subsection 
(a) accepting employment with the Agency as a result of a 
transfer under subsection (a) may retain, for 12 months after 
the date on which such transfer occurs, membership in any 
employee benefit program of the Agency or the Department 
of Housing and Urban Development, as applicable, including 
insurance, to which such employee belongs on such effective 
date, if— 
(A) the employee does not elect to give up the benefit 
or membership in the program; and 
(B) the benefit or program is continued by the Director 
of the Federal Housing Finance Agency. 
(2) COST DIFFERENTIAL.—
H. R. 3221—77 
(A) IN GENERAL.—The difference in the costs between 
the benefits which would have been provided by the Depart-
ment of Housing and Urban Development and those pro-
vided by this section shall be paid by the Director. 
(B) HEALTH INSURANCE.—If any employee elects to give 
up membership in a health insurance program or the health 
insurance program is not continued by the Director, the 
employee shall be permitted to select an alternate Federal 
health insurance program not later than 30 days after 
the date of such election or notice, without regard to any 
other regularly scheduled open season. 
Subtitle C—Prompt Corrective Action 
SEC. 1141. CRITICAL CAPITAL LEVELS. 
(a) IN GENERAL.—Section 1363 of the Federal Housing Enter-
prises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4613) 
is amended— 
(1) by striking ‘‘For’’ and inserting ‘‘(a) ENTERPRISES.— 
FOR’’; and 
(2) by adding at the end the following new subsection: 
‘‘(b) FEDERAL HOME LOAN BANKS.— 
‘‘(1) IN GENERAL.—For purposes of this subtitle, the critical 
capital level for each Federal Home Loan Bank shall be such 
amount of capital as the Director shall, by regulation, require. 
‘‘(2) CONSIDERATION OF OTHER CRITICAL CAPITAL LEVELS.— 
In establishing the critical capital level under paragraph (1) 
for the Federal Home Loan Banks, the Director shall take 
due consideration of the critical capital level established under 
subsection (a) for the enterprises, with such modifications as 
the Director determines to be appropriate to reflect the dif-
ference in operations between the banks and the enterprises.’’. 
(b) REGULATIONS.—Not later than the expiration of the 180- 
day period beginning on the date of enactment of this Act, the 
Director of the Federal Housing Finance Agency shall issue regula-
tions pursuant to section 1363(b) of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (as added by this 
section) establishing the critical capital level under such section. 
SEC. 1142. CAPITAL CLASSIFICATIONS. 
(a) IN GENERAL.—Section 1364 of the Federal Housing Enter-
prises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4614) 
is amended— 
(1) in the heading for subsection (a) by striking ‘‘In General’’ 
and inserting ‘‘Enterprises’’; 
(2) in subsection (c)— 
(A) by striking ‘‘subsection (b)’’ and inserting ‘‘sub-
section (c)’’; 
(B) by striking ‘‘enterprises’’ and inserting ‘‘regulated 
entities’’; and 
(C) by striking the last sentence; 
(3) by redesignating subsections (c) (as so amended by 
paragraph (2) of this subsection) and (d) as subsections (d) 
and (f), respectively; 
(4) by striking subsection (b) and inserting the following: 
‘‘(b) FEDERAL HOME LOAN BANKS.—
H. R. 3221—78 
‘‘(1) ESTABLISHMENT AND CRITERIA.—For purposes of this 
subtitle, the Director shall, by regulation— 
‘‘(A) establish the capital classifications specified under 
paragraph (2) for the Federal Home Loan Banks; 
‘‘(B) establish criteria for each such capital classifica-
tion based on the amount and types of capital held by 
a bank and the risk-based, minimum, and critical capital 
levels for the banks and taking due consideration of the 
capital classifications established under subsection (a) for 
the enterprises, with such modifications as the Director 
determines to be appropriate to reflect the difference in 
operations between the banks and the enterprises; and 
‘‘(C) shall classify the Federal Home Loan Banks 
according to such capital classifications. 
‘‘(2) CLASSIFICATIONS.—The capital classifications specified 
under this paragraph are— 
‘‘(A) adequately capitalized; 
‘‘(B) undercapitalized; 
‘‘(C) significantly undercapitalized; and 
‘‘(D) critically undercapitalized. 
‘‘(c) DISCRETIONARY CLASSIFICATION.— 
‘‘(1) GROUNDS FOR RECLASSIFICATION.—The Director may 
reclassify a regulated entity under paragraph (2) if— 
‘‘(A) at any time, the Director determines in writing 
that the regulated entity is engaging in conduct that could 
result in a rapid depletion of core or total capital or the 
value of collateral pledged as security has decreased signifi-
cantly or that the value of the property subject to mortgages 
held by the regulated entity (or securitized in the case 
of an enterprise) has decreased significantly; 
‘‘(B) after notice and an opportunity for hearing, the 
Director determines that the regulated entity is in an 
unsafe or unsound condition; or 
‘‘(C) pursuant to section 1371(b), the Director deems 
the regulated entity to be engaging in an unsafe or unsound 
practice. 
‘‘(2) RECLASSIFICATION.—In addition to any other action 
authorized under this title, including the reclassification of 
a regulated entity for any reason not specified in this sub-
section, if the Director takes any action described in paragraph 
(1), the Director may classify a regulated entity— 
‘‘(A) as undercapitalized, if the regulated entity is 
otherwise classified as adequately capitalized; 
‘‘(B) as significantly undercapitalized, if the regulated 
entity is otherwise classified as undercapitalized; and 
‘‘(C) as critically undercapitalized, if the regulated 
entity is otherwise classified as significantly undercapital-
ized.’’; and 
(5) by inserting after subsection (d) (as so redesignated 
by paragraph (3) of this subsection), the following new sub-
section: 
‘‘(e) RESTRICTION ON CAPITAL DISTRIBUTIONS.— 
‘‘(1) IN GENERAL.—A regulated entity shall make no capital 
distribution if, after making the distribution, the regulated 
entity would be undercapitalized.
H. R. 3221—79 
‘‘(2) EXCEPTION.—Notwithstanding paragraph (1), the 
Director may permit a regulated entity, to the extent appro-
priate or applicable, to repurchase, redeem, retire, or otherwise 
acquire shares or ownership interests if the repurchase, 
redemption, retirement, or other acquisition— 
‘‘(A) is made in connection with the issuance of addi-
tional shares or obligations of the regulated entity in at 
least an equivalent amount; and 
‘‘(B) will reduce the financial obligations of the regu-
lated entity or otherwise improve the financial condition 
of the entity.’’. 
(b) REGULATIONS.—Not later than the expiration of the 180- 
day period beginning on the date of enactment of this Act, the 
Director of the Federal Housing Finance Agency shall issue regula-
tions to carry out section 1364(b) of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (as added by this 
section), relating to capital classifications for the Federal Home 
Loan Banks. 
SEC. 1143. SUPERVISORY ACTIONS APPLICABLE TO UNDERCAPITAL-
IZED REGULATED ENTITIES. 
Section 1365 of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (12 U.S.C. 4615) is amended— 
(1) by striking ‘‘the enterprise’’ each place that term 
appears and inserting ‘‘the regulated entity’’; 
(2) by striking ‘‘An enterprise’’ each place that term appears 
and inserting ‘‘A regulated entity’’; 
(3) by striking ‘‘an enterprise’’ each place that term appears 
and inserting ‘‘a regulated entity’’; 
(4) in subsection (a)— 
(A) by redesignating paragraphs (1) and (2) as para-
graphs (2) and (3), respectively; 
(B) by inserting before paragraph (2), as redesignated, 
the following: 
‘‘(1) REQUIRED MONITORING.—The Director shall— 
‘‘(A) closely monitor the condition of any undercapital-
ized regulated entity; 
‘‘(B) closely monitor compliance with the capital res-
toration plan, restrictions, and requirements imposed on 
an undercapitalized regulated entity under this section; 
and 
‘‘(C) periodically review the plan, restrictions, and 
requirements applicable to an undercapitalized regulated 
entity to determine whether the plan, restrictions, and 
requirements are achieving the purpose of this section.’’; 
and 
(C) by adding at the end the following: 
‘‘(4) RESTRICTION OF ASSET GROWTH.—An undercapitalized 
regulated entity shall not permit its average total assets during 
any calendar quarter to exceed its average total assets during 
the preceding calendar quarter, unless— 
‘‘(A) the Director has accepted the capital restoration 
plan of the regulated entity; 
‘‘(B) any increase in total assets is consistent with 
the capital restoration plan; and 
‘‘(C) the ratio of tangible equity to assets of the regu-
lated entity increases during the calendar quarter at a
H. R. 3221—80 
rate sufficient to enable the regulated entity to become 
adequately capitalized within a reasonable time. 
‘‘(5) PRIOR APPROVAL OF ACQUISITIONS AND NEW ACTIVI-
TIES.—An undercapitalized regulated entity shall not, directly 
or indirectly, acquire any interest in any entity or engage 
in any new activity, unless— 
‘‘(A) the Director has accepted the capital restoration 
plan of the regulated entity, the regulated entity is imple-
menting the plan, and the Director determines that the 
proposed action is consistent with and will further the 
achievement of the plan; or 
‘‘(B) the Director determines that the proposed action 
will further the purpose of this subtitle.’’; 
(5) in subsection (b)— 
(A) in the subsection heading, by striking ‘‘DISCRE-
TIONARY’’; 
(B) in the matter preceding paragraph (1), by striking 
‘‘may’’ and inserting ‘‘shall’’; and 
(C) in paragraph (2)— 
(i) by striking ‘‘make, in good faith, reasonable 
efforts necessary to’’; and 
(ii) by striking the period at the end and inserting 
‘‘in any material respect.’’; and 
(6) by striking subsection (c) and inserting the following: 
‘‘(c) OTHER DISCRETIONARY SAFEGUARDS.—The Director may 
take, with respect to an undercapitalized regulated entity, any 
of the actions authorized to be taken under section 1366 with 
respect to a significantly undercapitalized regulated entity, if the 
Director determines that such actions are necessary to carry out 
the purpose of this subtitle.’’. 
SEC. 1144. SUPERVISORY ACTIONS APPLICABLE TO SIGNIFICANTLY 
UNDERCAPITALIZED REGULATED ENTITIES. 
Section 1366 of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (12 U.S.C. 4616) is amended— 
(1) in subsection (a)(2), by striking ‘‘undercapitalized enter-
prise’’ and inserting ‘‘undercapitalized’’; 
(2) by striking ‘‘the enterprise’’ each place that term 
appears and inserting ‘‘the regulated entity’’; 
(3) by striking ‘‘An enterprise’’ each place that term appears 
and inserting ‘‘A regulated entity’’; 
(4) by striking ‘‘an enterprise’’ each place that term appears 
and inserting ‘‘a regulated entity’’; 
(5) in subsection (b)— 
(A) in the subsection heading, by striking ‘‘DISCRE-
TIONARY SUPERVISORY’’ and inserting ‘‘SPECIFIC’’; 
(B) in the matter preceding paragraph (1), by striking 
‘‘may, at any time, take any’’ and inserting ‘‘shall carry 
out this section by taking, at any time, 1 or more’’; 
(C) by striking paragraph (6); 
(D) by redesignating paragraph (5) as paragraph (6); 
(E) by inserting after paragraph (4) the following: 
‘‘(5) IMPROVEMENT OF MANAGEMENT.—Take 1 or more of 
the following actions: 
‘‘(A) NEW ELECTION OF BOARD.—Order a new election 
for the board of directors of the regulated entity.
H. R. 3221—81 
‘‘(B) DISMISSAL
OF
DIRECTORS
OR
EXECUTIVE
OFFI-
CERS.—Require the regulated entity to dismiss from office 
any director or executive officer who had held office for 
more than 180 days immediately before the date on which 
the regulated entity became undercapitalized. Dismissal 
under this subparagraph shall not be construed to be a 
removal pursuant to the enforcement powers of the Director 
under section 1377. 
‘‘(C) EMPLOY QUALIFIED EXECUTIVE OFFICERS.—Require 
the regulated entity to employ qualified executive officers 
(who, if the Director so specifies, shall be subject to 
approval by the Director).’’; and 
(F) by adding at the end the following: 
‘‘(7) OTHER ACTION.—Require the regulated entity to take 
any other action that the Director determines will better carry 
out the purpose of this section than any of the other actions 
specified in this subsection.’’; and 
(6) by striking subsection (c) and inserting the following: 
‘‘(c) RESTRICTION ON COMPENSATION OF EXECUTIVE OFFICERS.— 
A regulated entity that is classified as significantly undercapitalized 
in accordance with section 1364 may not, without prior written 
approval by the Director— 
‘‘(1) pay any bonus to any executive officer; or 
‘‘(2) provide compensation to any executive officer at a 
rate exceeding the average rate of compensation of that officer 
(excluding bonuses, stock options, and profit sharing) during 
the 12 calendar months preceding the calendar month in which 
the regulated entity became significantly undercapitalized.’’. 
SEC. 1145. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED REGU-
LATED ENTITIES. 
(a) IN GENERAL.—Section 1367 of the Federal Housing Enter-
prises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4617) 
is amended to read as follows: 
‘‘SEC. 1367. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED REGU-
LATED ENTITIES. 
‘‘(a) APPOINTMENT
OF
THE
AGENCY
AS
CONSERVATOR
OR 
RECEIVER.— 
‘‘(1) IN GENERAL.—Notwithstanding any other provision of 
Federal or State law, the Director may appoint the Agency 
as conservator or receiver for a regulated entity in the manner 
provided under paragraph (2) or (4). All references to the conser-
vator or receiver under this section are references to the Agency 
acting as conservator or receiver. 
‘‘(2) DISCRETIONARY APPOINTMENT.—The Agency may, at 
the discretion of the Director, be appointed conservator or 
receiver for the purpose of reorganizing, rehabilitating, or 
winding up the affairs of a regulated entity. 
‘‘(3) GROUNDS FOR DISCRETIONARY APPOINTMENT OF CONSER-
VATOR OR RECEIVER.—The grounds for appointing conservator 
or receiver for any regulated entity under paragraph (2) are 
as follows: 
‘‘(A) ASSETS
INSUFFICIENT
FOR
OBLIGATIONS.—The 
assets of the regulated entity are less than the obligations 
of the regulated entity to its creditors and others. 
‘‘(B) SUBSTANTIAL
DISSIPATION.—Substantial dissipa-
tion of assets or earnings due to—
H. R. 3221—82 
‘‘(i) any violation of any provision of Federal or 
State law; or 
‘‘(ii) any unsafe or unsound practice. 
‘‘(C) UNSAFE OR UNSOUND CONDITION.—An unsafe or 
unsound condition to transact business. 
‘‘(D) CEASE AND DESIST ORDERS.—Any willful violation 
of a cease and desist order that has become final. 
‘‘(E) CONCEALMENT.—Any concealment of the books, 
papers, records, or assets of the regulated entity, or any 
refusal to submit the books, papers, records, or affairs 
of the regulated entity, for inspection to any examiner 
or to any lawful agent of the Director. 
‘‘(F) INABILITY TO MEET OBLIGATIONS.—The regulated 
entity is likely to be unable to pay its obligations or meet 
the demands of its creditors in the normal course of busi-
ness. 
‘‘(G) LOSSES.—The regulated entity has incurred or 
is likely to incur losses that will deplete all or substantially 
all of its capital, and there is no reasonable prospect for 
the regulated entity to become adequately capitalized (as 
defined in section 1364(a)(1)). 
‘‘(H) VIOLATIONS OF LAW.—Any violation of any law 
or regulation, or any unsafe or unsound practice or condi-
tion that is likely to— 
‘‘(i) cause insolvency or substantial dissipation of 
assets or earnings; or 
‘‘(ii) weaken the condition of the regulated entity. 
‘‘(I) CONSENT.—The regulated entity, by resolution of 
its board of directors or its shareholders or members, con-
sents to the appointment. 
‘‘(J) UNDERCAPITALIZATION.—The regulated entity is 
undercapitalized or significantly undercapitalized (as 
defined in section 1364(a)(3)), and— 
‘‘(i) has no reasonable prospect of becoming ade-
quately capitalized; 
‘‘(ii) fails to become adequately capitalized, as 
required by— 
‘‘(I) section 1365(a)(1) with respect to a regu-
lated entity; or 
‘‘(II) section 1366(a)(1) with respect to a signifi-
cantly undercapitalized regulated entity; 
‘‘(iii) fails to submit a capital restoration plan 
acceptable to the Agency within the time prescribed 
under section 1369C; or 
‘‘(iv) materially fails to implement a capital res-
toration plan submitted and accepted under section 
1369C. 
‘‘(K) CRITICAL
UNDERCAPITALIZATION.—The regulated 
entity is critically undercapitalized, as defined in section 
1364(a)(4). 
‘‘(L) MONEY LAUNDERING.—The Attorney General noti-
fies the Director in writing that the regulated entity has 
been found guilty of a criminal offense under section 1956 
or 1957 of title 18, United States Code, or section 5322 
or 5324 of title 31, United States Code. 
‘‘(4) MANDATORY RECEIVERSHIP.—
H. R. 3221—83 
‘‘(A) IN
GENERAL.—The Director shall appoint the 
Agency as receiver for a regulated entity if the Director 
determines, in writing, that— 
‘‘(i) the assets of the regulated entity are, and 
during the preceding 60 calendar days have been, less 
than the obligations of the regulated entity to its credi-
tors and others; or 
‘‘(ii) the regulated entity is not, and during the 
preceding 60 calendar days has not been, generally 
paying the debts of the regulated entity (other than 
debts that are the subject of a bona fide dispute) as 
such debts become due. 
‘‘(B) PERIODIC
DETERMINATION
REQUIRED
FOR
CRITI-
CALLY UNDERCAPITALIZED REGULATED ENTITY.—If a regu-
lated entity is critically undercapitalized, the Director shall 
make a determination, in writing, as to whether the regu-
lated entity meets the criteria specified in clause (i) or 
(ii) of subparagraph (A)— 
‘‘(i) not later than 30 calendar days after the regu-
lated entity initially becomes critically undercapital-
ized; and 
‘‘(ii) at least once during each succeeding 30-cal-
endar day period. 
‘‘(C) DETERMINATION NOT REQUIRED IF RECEIVERSHIP 
ALREADY IN PLACE.—Subparagraph (B) does not apply with 
respect to a regulated entity in any period during which 
the Agency serves as receiver for the regulated entity. 
‘‘(D) RECEIVERSHIP
TERMINATES
CONSERVATORSHIP.— 
The appointment of the Agency as receiver of a regulated 
entity under this section shall immediately terminate any 
conservatorship established for the regulated entity under 
this title. 
‘‘(5) JUDICIAL REVIEW.— 
‘‘(A) IN GENERAL.—If the Agency is appointed conser-
vator or receiver under this section, the regulated entity 
may, within 30 days of such appointment, bring an action 
in the United States district court for the judicial district 
in which the home office of such regulated entity is located, 
or in the United States District Court for the District 
of Columbia, for an order requiring the Agency to remove 
itself as conservator or receiver. 
‘‘(B) REVIEW.—Upon the filing of an action under 
subparagraph (A), the court shall, upon the merits, dismiss 
such action or direct the Agency to remove itself as such 
conservator or receiver. 
‘‘(6) DIRECTORS NOT LIABLE FOR ACQUIESCING IN APPOINT-
MENT
OF
CONSERVATOR
OR
RECEIVER.—The members of the 
board of directors of a regulated entity shall not be liable 
to the shareholders or creditors of the regulated entity for 
acquiescing in or consenting in good faith to the appointment 
of the Agency as conservator or receiver for that regulated 
entity. 
‘‘(7) AGENCY
NOT
SUBJECT
TO
ANY
OTHER
FEDERAL 
AGENCY.—When acting as conservator or receiver, the Agency 
shall not be subject to the direction or supervision of any 
other agency of the United States or any State in the exercise 
of the rights, powers, and privileges of the Agency.
H. R. 3221—84 
‘‘(b) POWERS AND DUTIES OF THE AGENCY AS CONSERVATOR 
OR RECEIVER.— 
‘‘(1) RULEMAKING AUTHORITY OF THE AGENCY.—The Agency 
may prescribe such regulations as the Agency determines to 
be appropriate regarding the conduct of conservatorships or 
receiverships. 
‘‘(2) GENERAL POWERS.— 
‘‘(A) SUCCESSOR TO REGULATED ENTITY.—The Agency 
shall, as conservator or receiver, and by operation of law, 
immediately succeed to— 
‘‘(i) all rights, titles, powers, and privileges of the 
regulated entity, and of any stockholder, officer, or 
director of such regulated entity with respect to the 
regulated entity and the assets of the regulated entity; 
and 
‘‘(ii) title to the books, records, and assets of any 
other legal custodian of such regulated entity. 
‘‘(B) OPERATE
THE
REGULATED
ENTITY.—The Agency 
may, as conservator or receiver— 
‘‘(i) take over the assets of and operate the regu-
lated entity with all the powers of the shareholders, 
the directors, and the officers of the regulated entity 
and conduct all business of the regulated entity; 
‘‘(ii) collect all obligations and money due the regu-
lated entity; 
‘‘(iii) perform all functions of the regulated entity 
in the name of the regulated entity which are con-
sistent with the appointment as conservator or 
receiver; 
‘‘(iv) preserve and conserve the assets and property 
of the regulated entity; and 
‘‘(v) provide by contract for assistance in fulfilling 
any function, activity, action, or duty of the Agency 
as conservator or receiver. 
‘‘(C) FUNCTIONS OF OFFICERS, DIRECTORS, AND SHARE-
HOLDERS OF A REGULATED ENTITY.—The Agency may, by 
regulation or order, provide for the exercise of any function 
by any stockholder, director, or officer of any regulated 
entity for which the Agency has been named conservator 
or receiver. 
‘‘(D) POWERS AS CONSERVATOR.—The Agency may, as 
conservator, take such action as may be— 
‘‘(i) necessary to put the regulated entity in a sound 
and solvent condition; and 
‘‘(ii) appropriate to carry on the business of the 
regulated entity and preserve and conserve the assets 
and property of the regulated entity. 
‘‘(E) ADDITIONAL POWERS AS RECEIVER.—In any case 
in which the Agency is acting as receiver, the Agency 
shall place the regulated entity in liquidation and proceed 
to realize upon the assets of the regulated entity in such 
manner as the Agency deems appropriate, including 
through the sale of assets, the transfer of assets to a 
limited-life regulated entity established under subsection 
(i), or the exercise of any other rights or privileges granted 
to the Agency under this paragraph.
H. R. 3221—85 
‘‘(F) ORGANIZATION OF NEW ENTERPRISE.—The Agency 
may, as receiver for an enterprise, organize a successor 
enterprise that will operate pursuant to subsection (i). 
‘‘(G) TRANSFER OR SALE OF ASSETS AND LIABILITIES.— 
The Agency may, as conservator or receiver, transfer or 
sell any asset or liability of the regulated entity in default, 
and may do so without any approval, assignment, or con-
sent with respect to such transfer or sale. 
‘‘(H) PAYMENT
OF
VALID
OBLIGATIONS.—The Agency, 
as conservator or receiver, shall, to the extent of proceeds 
realized from the performance of contracts or sale of the 
assets of a regulated entity, pay all valid obligations of 
the regulated entity that are due and payable at the time 
of the appointment of the Agency as conservator or receiver, 
in accordance with the prescriptions and limitations of 
this section. 
‘‘(I) SUBPOENA AUTHORITY.— 
‘‘(i) IN GENERAL.— 
‘‘(I) AGENCY AUTHORITY.—The Agency may, as 
conservator or receiver, and for purposes of car-
rying out any power, authority, or duty with 
respect to a regulated entity (including deter-
mining any claim against the regulated entity and 
determining and realizing upon any asset of any 
person in the course of collecting money due the 
regulated entity), exercise any power established 
under section 1348. 
‘‘(II) APPLICABILITY OF LAW.—The provisions 
of section 1348 shall apply with respect to the 
exercise of any power under this subparagraph, 
in the same manner as such provisions apply under 
that section. 
‘‘(ii) SUBPOENA.—A subpoena or subpoena duces 
tecum may be issued under clause (i) only by, or with 
the written approval of, the Director, or the designee 
of the Director. 
‘‘(iii) RULE
OF
CONSTRUCTION.—This subsection 
shall not be construed to limit any rights that the 
Agency, in any capacity, might otherwise have under 
section 1317 or 1379B. 
‘‘(J) INCIDENTAL POWERS.—The Agency may, as conser-
vator or receiver— 
‘‘(i) exercise all powers and authorities specifically 
granted to conservators or receivers, respectively, 
under this section, and such incidental powers as shall 
be necessary to carry out such powers; and 
‘‘(ii) take any action authorized by this section, 
which the Agency determines is in the best interests 
of the regulated entity or the Agency. 
‘‘(K) OTHER PROVISIONS.— 
‘‘(i) SHAREHOLDERS
AND
CREDITORS
OF
FAILED 
REGULATED ENTITY.—Notwithstanding any other provi-
sion of law, the appointment of the Agency as receiver 
for a regulated entity pursuant to paragraph (2) or 
(4) of subsection (a) and its succession, by operation 
of law, to the rights, titles, powers, and privileges 
described in subsection (b)(2)(A) shall terminate all
H. R. 3221—86 
rights and claims that the stockholders and creditors 
of the regulated entity may have against the assets 
or charter of the regulated entity or the Agency arising 
as a result of their status as stockholders or creditors, 
except for their right to payment, resolution, or other 
satisfaction of their claims, as permitted under sub-
sections (b)(9), (c), and (e). 
‘‘(ii) ASSETS
OF
REGULATED
ENTITY.—Notwith-
standing any other provision of law, for purposes of 
this section, the charter of a regulated entity shall 
not be considered an asset of the regulated entity. 
‘‘(3) AUTHORITY OF RECEIVER TO DETERMINE CLAIMS.— 
‘‘(A) IN GENERAL.—The Agency may, as receiver, deter-
mine claims in accordance with the requirements of this 
subsection and any regulations prescribed under paragraph 
(4). 
‘‘(B) NOTICE REQUIREMENTS.—The receiver, in any case 
involving the liquidation or winding up of the affairs of 
a closed regulated entity, shall— 
‘‘(i) promptly publish a notice to the creditors of 
the regulated entity to present their claims, together 
with proof, to the receiver by a date specified in the 
notice which shall be not less than 90 days after the 
date of publication of such notice; and 
‘‘(ii) republish such notice approximately 1 month 
and 2 months, respectively, after the date of publication 
under clause (i). 
‘‘(C) MAILING
REQUIRED.—The receiver shall mail a 
notice similar to the notice published under subparagraph 
(B)(i) at the time of such publication to any creditor shown 
on the books of the regulated entity— 
‘‘(i) at the last address of the creditor appearing 
in such books; or 
‘‘(ii) upon discovery of the name and address of 
a claimant not appearing on the books of the regulated 
entity, within 30 days after the discovery of such name 
and address. 
‘‘(4) RULEMAKING AUTHORITY RELATING TO DETERMINATION 
OF CLAIMS.—Subject to subsection (c), the Director may pre-
scribe regulations regarding the allowance or disallowance of 
claims by the receiver and providing for administrative deter-
mination of claims and review of such determination. 
‘‘(5) PROCEDURES FOR DETERMINATION OF CLAIMS.— 
‘‘(A) DETERMINATION PERIOD.— 
‘‘(i) IN GENERAL.—Before the end of the 180-day 
period beginning on the date on which any claim 
against a regulated entity is filed with the Agency 
as receiver, the Agency shall determine whether to 
allow or disallow the claim and shall notify the claim-
ant of any determination with respect to such claim. 
‘‘(ii) EXTENSION
OF
TIME.—The period described 
in clause (i) may be extended by a written agreement 
between the claimant and the Agency. 
‘‘(iii) MAILING OF NOTICE SUFFICIENT.—The require-
ments of clause (i) shall be deemed to be satisfied 
if the notice of any determination with respect to any
H. R. 3221—87 
claim is mailed to the last address of the claimant 
which appears— 
‘‘(I) on the books of the regulated entity; 
‘‘(II) in the claim filed by the claimant; or 
‘‘(III) in documents submitted in proof of the 
claim. 
‘‘(iv) CONTENTS OF NOTICE OF DISALLOWANCE.—If 
any claim filed under clause (i) is disallowed, the notice 
to the claimant shall contain— 
‘‘(I) a statement of each reason for the dis-
allowance; and 
‘‘(II) the procedures available for obtaining 
agency review of the determination to disallow 
the claim or judicial determination of the claim. 
‘‘(B) ALLOWANCE OF PROVEN CLAIM.—The receiver shall 
allow any claim received on or before the date specified 
in the notice published under paragraph (3)(B)(i) by the 
receiver from any claimant which is proved to the satisfac-
tion of the receiver. 
‘‘(C) DISALLOWANCE
OF
CLAIMS
FILED
AFTER
FILING 
PERIOD.—Claims filed after the date specified in the notice 
published under paragraph (3)(B)(i), or the date specified 
under paragraph (3)(C), shall be disallowed and such dis-
allowance shall be final. 
‘‘(D) AUTHORITY TO DISALLOW CLAIMS.— 
‘‘(i) IN GENERAL.—The receiver may disallow any 
portion of any claim by a creditor or claim of security, 
preference, or priority which is not proved to the satis-
faction of the receiver. 
‘‘(ii) PAYMENTS
TO
LESS
THAN
FULLY
SECURED 
CREDITORS.—In the case of a claim of a creditor against 
a regulated entity which is secured by any property 
or other asset of such regulated entity, the receiver— 
‘‘(I) may treat the portion of such claim which 
exceeds an amount equal to the fair market value 
of such property or other asset as an unsecured 
claim against the regulated entity; and 
‘‘(II) may not make any payment with respect 
to such unsecured portion of the claim, other than 
in connection with the disposition of all claims 
of unsecured creditors of the regulated entity. 
‘‘(iii) EXCEPTIONS.—No provision of this paragraph 
shall apply with respect to— 
‘‘(I) any extension of credit from any Federal 
Reserve Bank, Federal Home Loan Bank, or the 
United States Treasury; or 
‘‘(II) any security interest in the assets of the 
regulated entity securing any such extension of 
credit. 
‘‘(E) NO JUDICIAL REVIEW OF DETERMINATION PURSUANT 
TO SUBPARAGRAPH (D).—No court may review the deter-
mination of the Agency under subparagraph (D) to disallow 
a claim. 
‘‘(F) LEGAL EFFECT OF FILING.— 
‘‘(i) STATUTE OF LIMITATION TOLLED.—For purposes 
of any applicable statute of limitations, the filing of
H. R. 3221—88 
a claim with the receiver shall constitute a commence-
ment of an action. 
‘‘(ii) NO
PREJUDICE
TO
OTHER
ACTIONS.—Subject 
to paragraph (10), the filing of a claim with the receiver 
shall not prejudice any right of the claimant to continue 
any action which was filed before the date of the 
appointment of the receiver, subject to the determina-
tion of claims by the receiver. 
‘‘(6) PROVISION FOR JUDICIAL DETERMINATION OF CLAIMS.— 
‘‘(A) IN GENERAL.—The claimant may file suit on a 
claim (or continue an action commenced before the appoint-
ment of the receiver) in the district or territorial court 
of the United States for the district within which the prin-
cipal place of business of the regulated entity is located 
or the United States District Court for the District of 
Columbia (and such court shall have jurisdiction to hear 
such claim), before the end of the 60-day period beginning 
on the earlier of— 
‘‘(i) the end of the period described in paragraph 
(5)(A)(i) with respect to any claim against a regulated 
entity for which the Agency is receiver; or 
‘‘(ii) the date of any notice of disallowance of such 
claim pursuant to paragraph (5)(A)(i). 
‘‘(B) STATUTE
OF
LIMITATIONS.—A claim shall be 
deemed to be disallowed (other than any portion of such 
claim which was allowed by the receiver), and such dis-
allowance shall be final, and the claimant shall have no 
further rights or remedies with respect to such claim, if 
the claimant fails, before the end of the 60-day period 
described under subparagraph (A), to file suit on such 
claim (or continue an action commenced before the appoint-
ment of the receiver). 
‘‘(7) REVIEW OF CLAIMS.— 
‘‘(A) OTHER REVIEW PROCEDURES.— 
‘‘(i) IN GENERAL.—The Agency shall establish such 
alternative dispute resolution processes as may be 
appropriate for the resolution of claims filed under 
paragraph (5)(A)(i). 
‘‘(ii) CRITERIA.—In establishing alternative dispute 
resolution processes, the Agency shall strive for proce-
dures which are expeditious, fair, independent, and 
low cost. 
‘‘(iii) VOLUNTARY BINDING OR NONBINDING PROCE-
DURES.—The Agency may establish both binding and 
nonbinding processes under this subparagraph, which 
may be conducted by any government or private party. 
All parties, including the claimant and the Agency, 
must agree to the use of the process in a particular 
case. 
‘‘(B) CONSIDERATION OF INCENTIVES.—The Agency shall 
seek to develop incentives for claimants to participate in 
the alternative dispute resolution process. 
‘‘(8) EXPEDITED DETERMINATION OF CLAIMS.— 
‘‘(A) ESTABLISHMENT
REQUIRED.—The Agency shall 
establish a procedure for expedited relief outside of the 
routine claims process established under paragraph (5) for 
claimants who—
H. R. 3221—89 
‘‘(i) allege the existence of legally valid and enforce-
able or perfected security interests in assets of any 
regulated entity for which the Agency has been 
appointed receiver; and 
‘‘(ii) allege that irreparable injury will occur if 
the routine claims procedure is followed. 
‘‘(B) DETERMINATION PERIOD.—Before the end of the 
90-day period beginning on the date on which any claim 
is filed in accordance with the procedures established under 
subparagraph (A), the Director shall— 
‘‘(i) determine— 
‘‘(I) whether to allow or disallow such claim; 
or 
‘‘(II) whether such claim should be determined 
pursuant to the procedures established under para-
graph (5); and 
‘‘(ii) notify the claimant of the determination, and 
if the claim is disallowed, provide a statement of each 
reason for the disallowance and the procedure for 
obtaining agency review or judicial determination. 
‘‘(C) PERIOD
FOR
FILING
OR
RENEWING
SUIT.—Any 
claimant who files a request for expedited relief shall be 
permitted to file a suit, or to continue a suit filed before 
the date of appointment of the receiver, seeking a deter-
mination of the rights of the claimant with respect to 
such security interest after the earlier of— 
‘‘(i) the end of the 90-day period beginning on 
the date of the filing of a request for expedited relief; 
or 
‘‘(ii) the date on which the Agency denies the claim. 
‘‘(D) STATUTE OF LIMITATIONS.—If an action described 
under subparagraph (C) is not filed, or the motion to renew 
a previously filed suit is not made, before the end of the 
30-day period beginning on the date on which such action 
or motion may be filed under subparagraph (B), the claim 
shall be deemed to be disallowed as of the end of such 
period (other than any portion of such claim which was 
allowed by the receiver), such disallowance shall be final, 
and the claimant shall have no further rights or remedies 
with respect to such claim. 
‘‘(E) LEGAL EFFECT OF FILING.— 
‘‘(i) STATUTE OF LIMITATION TOLLED.—For purposes 
of any applicable statute of limitations, the filing of 
a claim with the receiver shall constitute a commence-
ment of an action. 
‘‘(ii) NO
PREJUDICE
TO
OTHER
ACTIONS.—Subject 
to paragraph (10), the filing of a claim with the receiver 
shall not prejudice any right of the claimant to continue 
any action that was filed before the appointment of 
the receiver, subject to the determination of claims 
by the receiver. 
‘‘(9) PAYMENT OF CLAIMS.— 
‘‘(A) IN GENERAL.—The receiver may, in the discretion 
of the receiver, and to the extent that funds are available 
from the assets of the regulated entity, pay creditor claims, 
in such manner and amounts as are authorized under 
this section, which are—
H. R. 3221—90 
‘‘(i) allowed by the receiver; 
‘‘(ii) approved by the Agency pursuant to a final 
determination pursuant to paragraph (7) or (8); or 
‘‘(iii) determined by the final judgment of any court 
of competent jurisdiction. 
‘‘(B) AGREEMENTS
AGAINST
THE
INTEREST
OF
THE 
AGENCY.—No agreement that tends to diminish or defeat 
the interest of the Agency in any asset acquired by the 
Agency as receiver under this section shall be valid against 
the Agency unless such agreement is in writing and 
executed by an authorized officer or representative of the 
regulated entity. 
‘‘(C) PAYMENT OF DIVIDENDS ON CLAIMS.—The receiver 
may, in the sole discretion of the receiver, pay from the 
assets of the regulated entity dividends on proved claims 
at any time, and no liability shall attach to the Agency 
by reason of any such payment, for failure to pay dividends 
to a claimant whose claim is not proved at the time of 
any such payment. 
‘‘(D) RULEMAKING AUTHORITY OF THE DIRECTOR.—The 
Director may prescribe such rules, including definitions 
of terms, as the Director deems appropriate to establish 
a single uniform interest rate for, or to make payments 
of post-insolvency interest to creditors holding proven 
claims against the receivership estates of the regulated 
entity, following satisfaction by the receiver of the principal 
amount of all creditor claims. 
‘‘(10) SUSPENSION OF LEGAL ACTIONS.— 
‘‘(A) IN GENERAL.—After the appointment of a conser-
vator or receiver for a regulated entity, the conservator 
or receiver may, in any judicial action or proceeding to 
which such regulated entity is or becomes a party, request 
a stay for a period not to exceed— 
‘‘(i) 45 days, in the case of any conservator; and 
‘‘(ii) 90 days, in the case of any receiver. 
‘‘(B) GRANT OF STAY BY ALL COURTS REQUIRED.—Upon 
receipt of a request by the conservator or receiver under 
subparagraph (A) for a stay of any judicial action or pro-
ceeding in any court with jurisdiction of such action or 
proceeding, the court shall grant such stay as to all parties. 
‘‘(11) ADDITIONAL RIGHTS AND DUTIES.— 
‘‘(A) PRIOR
FINAL
ADJUDICATION.—The Agency shall 
abide by any final unappealable judgment of any court 
of competent jurisdiction which was rendered before the 
appointment of the Agency as conservator or receiver. 
‘‘(B) RIGHTS
AND
REMEDIES
OF
CONSERVATOR
OR 
RECEIVER.—In the event of any appealable judgment, the 
Agency as conservator or receiver— 
‘‘(i) shall have all of the rights and remedies avail-
able to the regulated entity (before the appointment 
of such conservator or receiver) and the Agency, 
including removal to Federal court and all appellate 
rights; and 
‘‘(ii) shall not be required to post any bond in 
order to pursue such remedies. 
‘‘(C) NO ATTACHMENT OR EXECUTION.—No attachment 
or execution may issue by any court upon assets in the
H. R. 3221—91 
possession of the receiver, or upon the charter, of a regu-
lated entity for which the Agency has been appointed 
receiver. 
‘‘(D) LIMITATION
ON
JUDICIAL
REVIEW.—Except as 
otherwise provided in this subsection, no court shall have 
jurisdiction over— 
‘‘(i) any claim or action for payment from, or any 
action seeking a determination of rights with respect 
to, the assets or charter of any regulated entity for 
which the Agency has been appointed receiver; or 
‘‘(ii) any claim relating to any act or omission 
of such regulated entity or the Agency as receiver. 
‘‘(E) DISPOSITION OF ASSETS.—In exercising any right, 
power, privilege, or authority as conservator or receiver 
in connection with any sale or disposition of assets of 
a regulated entity for which the Agency has been appointed 
conservator or receiver, the Agency shall conduct its oper-
ations in a manner which— 
‘‘(i) maximizes the net present value return from 
the sale or disposition of such assets; 
‘‘(ii) minimizes the amount of any loss realized 
in the resolution of cases; and 
‘‘(iii) ensures adequate competition and fair and 
consistent treatment of offerors. 
‘‘(12) STATUTE OF LIMITATIONS FOR ACTIONS BROUGHT BY 
CONSERVATOR OR RECEIVER.— 
‘‘(A) IN GENERAL.—Notwithstanding any provision of 
any contract, the applicable statute of limitations with 
regard to any action brought by the Agency as conservator 
or receiver shall be— 
‘‘(i) in the case of any contract claim, the longer 
of— 
‘‘(I) the 6-year period beginning on the date 
on which the claim accrues; or 
‘‘(II) the period applicable under State law; 
and 
‘‘(ii) in the case of any tort claim, the longer of— 
‘‘(I) the 3-year period beginning on the date 
on which the claim accrues; or 
‘‘(II) the period applicable under State law. 
‘‘(B) DETERMINATION OF THE DATE ON WHICH A CLAIM 
ACCRUES.—For purposes of subparagraph (A), the date on 
which the statute of limitations begins to run on any claim 
described in such subparagraph shall be the later of— 
‘‘(i) the date of the appointment of the Agency 
as conservator or receiver; or 
‘‘(ii) the date on which the cause of action accrues. 
‘‘(13) REVIVAL OF EXPIRED STATE CAUSES OF ACTION.— 
‘‘(A) IN
GENERAL.—In the case of any tort claim 
described under clause (ii) for which the statute of limita-
tions applicable under State law with respect to such claim 
has expired not more than 5 years before the appointment 
of the Agency as conservator or receiver, the Agency may 
bring an action as conservator or receiver on such claim 
without regard to the expiration of the statute of limitations 
applicable under State law.
H. R. 3221—92 
‘‘(B) CLAIMS DESCRIBED.—A tort claim referred to under 
clause (i) is a claim arising from fraud, intentional mis-
conduct resulting in unjust enrichment, or intentional mis-
conduct resulting in substantial loss to the regulated entity. 
‘‘(14) ACCOUNTING AND RECORDKEEPING REQUIREMENTS.— 
‘‘(A) IN
GENERAL.—The Agency as conservator or 
receiver shall, consistent with the accounting and reporting 
practices and procedures established by the Agency, main-
tain a full accounting of each conservatorship and receiver-
ship or other disposition of a regulated entity in default. 
‘‘(B) ANNUAL ACCOUNTING OR REPORT.—With respect 
to each conservatorship or receivership, the Agency shall 
make an annual accounting or report available to the 
Board, the Comptroller General of the United States, the 
Committee on Banking, Housing, and Urban Affairs of 
the Senate, and the Committee on Financial Services of 
the House of Representatives. 
‘‘(C) AVAILABILITY OF REPORTS.—Any report prepared 
under subparagraph (B) shall be made available by the 
Agency upon request to any shareholder of a regulated 
entity or any member of the public. 
‘‘(D) RECORDKEEPING REQUIREMENT.—After the end of 
the 6-year period beginning on the date on which the 
conservatorship or receivership is terminated by the 
Director, the Agency may destroy any records of such regu-
lated entity which the Agency, in the discretion of the 
Agency, determines to be unnecessary, unless directed not 
to do so by a court of competent jurisdiction or govern-
mental agency, or prohibited by law. 
‘‘(15) FRAUDULENT TRANSFERS.— 
‘‘(A) IN
GENERAL.—The Agency, as conservator or 
receiver, may avoid a transfer of any interest of an entity- 
affiliated party, or any person determined by the conser-
vator or receiver to be a debtor of the regulated entity, 
in property, or any obligation incurred by such party or 
person, that was made within 5 years of the date on which 
the Agency was appointed conservator or receiver, if such 
party or person voluntarily or involuntarily made such 
transfer or incurred such liability with the intent to hinder, 
delay, or defraud the regulated entity, the Agency, the 
conservator, or receiver. 
‘‘(B) RIGHT OF RECOVERY.—To the extent a transfer 
is avoided under subparagraph (A), the conservator or 
receiver may recover, for the benefit of the regulated entity, 
the property transferred, or, if a court so orders, the value 
of such property (at the time of such transfer) from— 
‘‘(i) the initial transferee of such transfer or the 
entity-affiliated party or person for whose benefit such 
transfer was made; or 
‘‘(ii) any immediate or mediate transferee of any 
such initial transferee. 
‘‘(C) RIGHTS OF TRANSFEREE OR OBLIGEE.—The conser-
vator or receiver may not recover under subparagraph (B) 
from— 
‘‘(i) any transferee that takes for value, including 
satisfaction or securing of a present or antecedent debt, 
in good faith; or
H. R. 3221—93 
‘‘(ii) any immediate or mediate good faith trans-
feree of such transferee. 
‘‘(D) RIGHTS UNDER THIS PARAGRAPH.—The rights under 
this paragraph of the conservator or receiver described 
under subparagraph (A) shall be superior to any rights 
of a trustee or any other party (other than any party 
which is a Federal agency) under title 11, United States 
Code. 
‘‘(16) ATTACHMENT
OF
ASSETS
AND
OTHER
INJUNCTIVE 
RELIEF.—Subject to paragraph (17), any court of competent 
jurisdiction may, at the request of the conservator or receiver, 
issue an order in accordance with rule 65 of the Federal Rules 
of Civil Procedure, including an order placing the assets of 
any person designated by the conservator or receiver under 
the control of the court, and appointing a trustee to hold such 
assets. 
‘‘(17) STANDARDS OF PROOF.—Rule 65 of the Federal Rules 
of Civil Procedure shall apply with respect to any proceeding 
under paragraph (16) without regard to the requirement of 
such rule that the applicant show that the injury, loss, or 
damage is irreparable and immediate. 
‘‘(18) TREATMENT OF CLAIMS ARISING FROM BREACH OF CON-
TRACTS EXECUTED BY THE CONSERVATOR OR RECEIVER.— 
‘‘(A) IN GENERAL.—Notwithstanding any other provi-
sion of this subsection, any final and unappealable judg-
ment for monetary damages entered against the conser-
vator or receiver for the breach of an agreement executed 
or approved in writing by the conservator or receiver after 
the date of its appointment, shall be paid as an administra-
tive expense of the conservator or receiver. 
‘‘(B) NO LIMITATION OF POWER.—Nothing in this para-
graph shall be construed to limit the power of the conser-
vator or receiver to exercise any rights under contract 
or law, including to terminate, breach, cancel, or otherwise 
discontinue such agreement. 
‘‘(19) GENERAL EXCEPTIONS.— 
‘‘(A) LIMITATIONS.—The rights of the conservator or 
receiver appointed under this section shall be subject to 
the limitations on the powers of a receiver under sections 
402 through 407 of the Federal Deposit Insurance Corpora-
tion Improvement Act of 1991 (12 U.S.C. 4402 through 
4407). 
‘‘(B) MORTGAGES HELD IN TRUST.— 
‘‘(i) IN GENERAL.—Any mortgage, pool of mortgages, 
or interest in a pool of mortgages held in trust, custo-
dial, or agency capacity by a regulated entity for the 
benefit of any person other than the regulated entity 
shall not be available to satisfy the claims of creditors 
generally, except that nothing in this clause shall be 
construed to expand or otherwise affect the authority 
of any regulated entity. 
‘‘(ii) HOLDING OF MORTGAGES.—Any mortgage, pool 
of mortgages, or interest in a pool of mortgages 
described in clause (i) shall be held by the conservator 
or receiver appointed under this section for the bene-
ficial owners of such mortgage, pool of mortgages, or 
interest in accordance with the terms of the agreement
H. R. 3221—94 
creating such trust, custodial, or other agency arrange-
ment. 
‘‘(iii) LIABILITY OF CONSERVATOR OR RECEIVER.— 
The liability of the conservator or receiver appointed 
under this section for damages shall, in the case of 
any contingent or unliquidated claim relating to the 
mortgages held in trust, be estimated in accordance 
with the regulations of the Director. 
‘‘(c) PRIORITY OF EXPENSES AND UNSECURED CLAIMS.— 
‘‘(1) IN GENERAL.—Unsecured claims against a regulated 
entity, or the receiver therefor, that are proven to the satisfac-
tion of the receiver shall have priority in the following order: 
‘‘(A) Administrative expenses of the receiver. 
‘‘(B) Any other general or senior liability of the regu-
lated entity (which is not a liability described under 
subparagraph (C) or (D). 
‘‘(C) Any obligation subordinated to general creditors 
(which is not an obligation described under subparagraph 
(D)). 
‘‘(D) Any obligation to shareholders or members arising 
as a result of their status as shareholder or members. 
‘‘(2) CREDITORS SIMILARLY SITUATED.—All creditors that are 
similarly situated under paragraph (1) shall be treated in a 
similar manner, except that the receiver may take any action 
(including making payments) that does not comply with this 
subsection, if— 
‘‘(A) the Director determines that such action is nec-
essary 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 
‘‘(B) all creditors that are similarly situated under 
paragraph (1) receive not less than the amount provided 
in subsection (e)(2). 
‘‘(3) DEFINITION.—As used in this subsection, the term 
‘administrative expenses of the receiver’ includes— 
‘‘(A) the actual, necessary costs and expenses incurred 
by the receiver in preserving the assets of a failed regulated 
entity or liquidating or otherwise resolving the affairs of 
a failed regulated entity; and 
‘‘(B) any obligations that the receiver determines are 
necessary and appropriate to facilitate the smooth and 
orderly liquidation or other resolution of the regulated 
entity. 
‘‘(d) PROVISIONS
RELATING
TO
CONTRACTS
ENTERED
INTO 
BEFORE APPOINTMENT OF CONSERVATOR OR RECEIVER.— 
‘‘(1) AUTHORITY TO REPUDIATE CONTRACTS.—In addition to 
any other rights a conservator or receiver may have, the conser-
vator or receiver for any regulated entity may disaffirm or 
repudiate any contract or lease— 
‘‘(A) to which such regulated entity is a party; 
‘‘(B) the performance of which the conservator or 
receiver, in its sole discretion, determines to be burden-
some; and
H. R. 3221—95 
‘‘(C) the disaffirmance or repudiation of which the con-
servator or receiver determines, in its sole discretion, will 
promote the orderly administration of the affairs of the 
regulated entity. 
‘‘(2) TIMING OF REPUDIATION.—The conservator or receiver 
shall determine whether or not to exercise the rights of repudi-
ation under this subsection within a reasonable period following 
such appointment. 
‘‘(3) CLAIMS FOR DAMAGES FOR REPUDIATION.— 
‘‘(A) IN GENERAL.—Except as otherwise provided under 
subparagraph (C) and paragraphs (4), (5), and (6), the 
liability of the conservator or receiver for the disaffirmance 
or repudiation of any contract pursuant to paragraph (1) 
shall be— 
‘‘(i) limited to actual direct compensatory damages; 
and 
‘‘(ii) determined as of— 
‘‘(I) the date of the appointment of the conser-
vator or receiver; or 
‘‘(II) in the case of any contract or agreement 
referred to in paragraph (8), the date of the 
disaffirmance or repudiation of such contract or 
agreement. 
‘‘(B) NO LIABILITY FOR OTHER DAMAGES.—For purposes 
of subparagraph (A), the term ‘actual direct compensatory 
damages’ shall not include— 
‘‘(i) punitive or exemplary damages; 
‘‘(ii) damages for lost profits or opportunity; or 
‘‘(iii) damages for pain and suffering. 
‘‘(C) MEASURE OF DAMAGES FOR REPUDIATION OF FINAN-
CIAL CONTRACTS.—In the case of any qualified financial 
contract or agreement to which paragraph (8) applies, 
compensatory damages shall be— 
‘‘(i) deemed to include normal and reasonable costs 
of cover or other reasonable measures of damages uti-
lized in the industries for such contract and agreement 
claims; and 
‘‘(ii) paid in accordance with this subsection and 
subsection (e), except as otherwise specifically provided 
in this section. 
‘‘(4) LEASES UNDER WHICH THE REGULATED ENTITY IS THE 
LESSEE.— 
‘‘(A) IN GENERAL.—If the conservator or receiver dis-
affirms or repudiates a lease under which the regulated 
entity was the lessee, the conservator or receiver shall 
not be liable for any damages (other than damages deter-
mined under subparagraph (B)) for the disaffirmance or 
repudiation of such lease. 
‘‘(B) PAYMENTS OF RENT.—Notwithstanding subpara-
graph (A), the lessor under a lease to which that subpara-
graph applies shall— 
‘‘(i) be entitled to the contractual rent accruing 
before the later of the date on which— 
‘‘(I) the notice of disaffirmance or repudiation 
is mailed; or
H. R. 3221—96 
‘‘(II) the disaffirmance or repudiation becomes 
effective, unless the lessor is in default or breach 
of the terms of the lease; 
‘‘(ii) have no claim for damages under any accelera-
tion clause or other penalty provision in the lease; 
and 
‘‘(iii) have a claim for any unpaid rent, subject 
to all appropriate offsets and defenses, due as of the 
date of the appointment, which shall be paid in accord-
ance with this subsection and subsection (e). 
‘‘(5) LEASES UNDER WHICH THE REGULATED ENTITY IS THE 
LESSOR.— 
‘‘(A) IN GENERAL.—If the conservator or receiver repudi-
ates an unexpired written lease of real property of the 
regulated entity under which the regulated entity is the 
lessor and the lessee is not, as of the date of such repudi-
ation, in default, the lessee under such lease may either— 
‘‘(i) treat the lease as terminated by such repudi-
ation; or 
‘‘(ii) remain in possession of the leasehold interest 
for the balance of the term of the lease, unless the 
lessee defaults under the terms of the lease after the 
date of such repudiation. 
‘‘(B) PROVISIONS APPLICABLE TO LESSEE REMAINING IN 
POSSESSION.—If any lessee under a lease described under 
subparagraph (A) remains in possession of a leasehold 
interest under clause (ii) of subparagraph (A)— 
‘‘(i) the lessee— 
‘‘(I) shall continue to pay the contractual rent 
pursuant to the terms of the lease after the date 
of the repudiation of such lease; and 
‘‘(II) may offset against any rent payment 
which accrues after the date of the repudiation 
of the lease, and any damages which accrue after 
such date due to the nonperformance of any obliga-
tion of the regulated entity under the lease after 
such date; and 
‘‘(ii) the conservator or receiver shall not be liable 
to the lessee for any damages arising after such date 
as a result of the repudiation, other than the amount 
of any offset allowed under clause (i)(II). 
‘‘(6) CONTRACTS FOR THE SALE OF REAL PROPERTY.— 
‘‘(A) IN GENERAL.—If the conservator or receiver repudi-
ates any contract for the sale of real property and the 
purchaser of such real property under such contract is 
in possession, and is not, as of the date of such repudiation, 
in default, such purchaser may either— 
‘‘(i) treat the contract as terminated by such 
repudiation; or 
‘‘(ii) remain in possession of such real property. 
‘‘(B) PROVISIONS APPLICABLE TO PURCHASER REMAINING 
IN POSSESSION.—If any purchaser of real property under 
any contract described under subparagraph (A) remains 
in possession of such property under clause (ii) of subpara-
graph (A)— 
‘‘(i) the purchaser—
H. R. 3221—98 
in connection with a contract described in such subpara-
graph shall not affect the right of the conservator or 
receiver to repudiate such contract under this section at 
any time after such performance. 
‘‘(8) CERTAIN QUALIFIED FINANCIAL CONTRACTS.— 
‘‘(A) RIGHTS
OF
PARTIES
TO
CONTRACTS.—Subject to 
paragraphs (9) and (10), and notwithstanding any other 
provision of this title (other than subsection (b)(9)(B) of 
this section), any other Federal law, or the law of any 
State, no person shall be stayed or prohibited from exer-
cising— 
‘‘(i) any right of that person to cause the termi-
nation, liquidation, or acceleration of any qualified 
financial contract with a regulated entity that arises 
upon the appointment of the Agency as receiver for 
such regulated entity at any time after such appoint-
ment; 
‘‘(ii) any right under any security agreement or 
arrangement or other credit enhancement relating to 
one or more qualified financial contracts; or 
‘‘(iii) any right to offset or net out any termination 
value, payment amount, or other transfer obligation 
arising under or in connection with 1 or more contracts 
and agreements described in clause (i), including any 
master agreement for such contracts or agreements. 
‘‘(B) APPLICABILITY OF OTHER PROVISIONS.—Subsection 
(b)(10) shall apply in the case of any judicial action or 
proceeding brought against any receiver referred to under 
subparagraph (A), or the regulated entity for which such 
receiver was appointed, by any party to a contract or agree-
ment described under subparagraph (A)(i) with such regu-
lated entity. 
‘‘(C) CERTAIN TRANSFERS NOT AVOIDABLE.— 
‘‘(i) IN GENERAL.—Notwithstanding paragraph (11), 
or any other provision of Federal or State law relating 
to the avoidance of preferential or fraudulent transfers, 
the Agency, whether acting as such or as conservator 
or receiver of a regulated entity, may not avoid any 
transfer of money or other property in connection with 
any qualified financial contract with a regulated entity. 
‘‘(ii) EXCEPTION FOR CERTAIN TRANSFERS.—Clause 
(i) shall not apply to any transfer of money or other 
property in connection with any qualified financial con-
tract with a regulated entity if the Agency determines 
that the transferee had actual intent to hinder, delay, 
or defraud such regulated entity, the creditors of such 
regulated entity, or any conservator or receiver 
appointed for such regulated entity. 
‘‘(D) CERTAIN CONTRACTS AND AGREEMENTS DEFINED.— 
In this subsection the following definitions shall apply: 
‘‘(i) QUALIFIED
FINANCIAL
CONTRACT.—The term 
‘qualified financial contract’ means any securities con-
tract, commodity contract, forward contract, repurchase 
agreement, swap agreement, and any similar agree-
ment that the Agency determines by regulation, resolu-
tion, or order to be a qualified financial contract for 
purposes of this paragraph.
H. R. 3221—99 
‘‘(ii) SECURITIES CONTRACT.—The term ‘securities 
contract’— 
‘‘(I) means a contract for the purchase, sale, 
or loan of a security, a certificate of deposit, a 
mortgage loan, or any interest in a mortgage loan, 
a group or index of securities, certificates of 
deposit, or mortgage loans or interests therein 
(including any interest therein or based on the 
value thereof) or any option on any of the fore-
going, including any option to purchase or sell 
any such security, certificate of deposit, mortgage 
loan, interest, group or index, or option, and 
including any repurchase or reverse repurchase 
transaction on any such security, certificate of 
deposit, mortgage loan, interest, group or index, 
or option; 
‘‘(II) does not include any purchase, sale, or 
repurchase obligation under a participation in a 
commercial mortgage loan, unless the Agency 
determines by regulation, resolution, or order to 
include any such agreement within the meaning 
of such term; 
‘‘(III) means any option entered into on a 
national securities exchange relating to foreign 
currencies; 
‘‘(IV) means the guarantee by or to any securi-
ties clearing agency of any settlement of cash, 
securities, certificates of deposit, mortgage loans 
or interests therein, group or index of securities, 
certificates of deposit, or mortgage loans or 
interests therein (including any interest therein 
or based on the value thereof) or option on any 
of the foregoing, including any option to purchase 
or sell any such security, certificate of deposit, 
mortgage loan, interest, group or index, or option; 
‘‘(V) means any margin loan; 
‘‘(VI) means any other agreement or trans-
action that is similar to any agreement or trans-
action referred to in this clause; 
‘‘(VII) means any combination of the agree-
ments or transactions referred to in this clause; 
‘‘(VIII) means any option to enter into any 
agreement or transaction referred to in this clause; 
‘‘(IX) means a master agreement that provides 
for an agreement or transaction referred to in sub-
clause (I), (III), (IV), (V), (VI), (VII), or (VIII), 
together with all supplements to any such master 
agreement, without regard to whether the master 
agreement provides for an agreement or trans-
action that is not a securities contract under this 
clause, except that the master agreement shall 
be considered to be a securities contract under 
this clause only with respect to each agreement 
or transaction under the master agreement that 
is referred to in subclause (I), (III), (IV), (V), (VI), 
(VII), or (VIII); and
H. R. 3221—100 
‘‘(X) means any security agreement or arrange-
ment or other credit enhancement related to any 
agreement or transaction referred to in this clause, 
including any guarantee or reimbursement obliga-
tion in connection with any agreement or trans-
action referred to in this clause. 
‘‘(iii) COMMODITY
CONTRACT.—The term ‘com-
modity contract’ means— 
‘‘(I) with respect to a futures commission mer-
chant, a contract for the purchase or sale of a 
commodity for future delivery on, or subject to 
the rules of, a contract market or board of trade; 
‘‘(II) with respect to a foreign futures commis-
sion merchant, a foreign future; 
‘‘(III) with respect to a leverage transaction 
merchant, a leverage transaction; 
‘‘(IV) with respect to a clearing organization, 
a contract for the purchase or sale of a commodity 
for future delivery on, or subject to the rules of, 
a contract market or board of trade that is cleared 
by such clearing organization, or commodity option 
traded on, or subject to the rules of, a contract 
market or board of trade that is cleared by such 
clearing organization; 
‘‘(V) with respect to a commodity options 
dealer, a commodity option; 
‘‘(VI) any other agreement or transaction that 
is similar to any agreement or transaction referred 
to in this clause; 
‘‘(VII) any combination of the agreements or 
transactions referred to in this clause; 
‘‘(VIII) any option to enter into any agreement 
or transaction referred to in this clause; 
‘‘(IX) a master agreement that provides for 
an agreement or transaction referred to in sub-
clause (I), (II), (III), (IV), (V), (VI), (VII), or (VIII), 
together with all supplements to any such master 
agreement, without regard to whether the master 
agreement provides for an agreement or trans-
action that is not a commodity contract under this 
clause, except that the master agreement shall 
be considered to be a commodity contract under 
this clause only with respect to each agreement 
or transaction under the master agreement that 
is referred to in subclause (I), (II), (III), (IV), (V), 
(VI), (VII), or (VIII); or 
‘‘(X) any security agreement or arrangement 
or other credit enhancement related to any agree-
ment or transaction referred to in this clause, 
including any guarantee or reimbursement obliga-
tion in connection with any agreement or trans-
action referred to in this clause. 
‘‘(iv) FORWARD CONTRACT.—The term ‘forward con-
tract’ means— 
‘‘(I) a contract (other than a commodity con-
tract) for the purchase, sale, or transfer of a com-
modity or any similar good, article, service, right,
H. R. 3221—101 
or interest which is presently or in the future 
becomes the subject of dealing in the forward con-
tract trade, or product or byproduct thereof, with 
a maturity date more than 2 days after the date 
on which the contract is entered into, including 
a repurchase transaction, reverse repurchase 
transaction, consignment, lease, swap, hedge 
transaction, deposit, loan, option, allocated trans-
action, unallocated transaction, or any other 
similar agreement; 
‘‘(II) any combination of agreements or trans-
actions referred to in subclauses (I) and (III); 
‘‘(III) any option to enter into any agreement 
or transaction referred to in subclause (I) or (II); 
‘‘(IV) a master agreement that provides for 
an agreement or transaction referred to in sub-
clauses (I), (II), or (III), together with all supple-
ments to any such master agreement, without 
regard to whether the master agreement provides 
for an agreement or transaction that is not a for-
ward contract under this clause, except that the 
master agreement shall be considered to be a for-
ward contract under this clause only with respect 
to each agreement or transaction under the master 
agreement that is referred to in subclause (I), (II), 
or (III); or 
‘‘(V) any security agreement or arrangement 
or other credit enhancement related to any agree-
ment or transaction referred to in subclause (I), 
(II), (III), or (IV), including any guarantee or 
reimbursement obligation in connection with any 
agreement or transaction referred to in any such 
subclause. 
‘‘(v) 
REPURCHASE
AGREEMENT.—The 
term 
‘repurchase agreement’ (including a reverse repurchase 
agreement)— 
‘‘(I) means an agreement, including related 
terms, which provides for the transfer of one or 
more certificates of deposit, mortgage-related secu-
rities (as such term is defined in section 3 of the 
Securities Exchange Act of 1934), mortgage loans, 
interests in mortgage-related securities or mort-
gage loans, eligible bankers’ acceptances, qualified 
foreign government securities (defined for purposes 
of this clause as a security that is a direct obliga-
tion of, or that is fully guaranteed by, the central 
government of a member of the Organization for 
Economic Cooperation and Development, as deter-
mined by regulation or order adopted by the appro-
priate Federal banking authority), or securities 
that are direct obligations of, or that are fully 
guaranteed by, the United States or any agency 
of the United States against the transfer of funds 
by the transferee of such certificates of deposit, 
eligible bankers’ acceptances, securities, mortgage 
loans, or interests with a simultaneous agreement 
by such transferee to transfer to the transferor
H. R. 3221—102 
thereof certificates of deposit, eligible bankers’ 
acceptances, 
securities, 
mortgage 
loans, 
or 
interests as described above, at a date certain not 
later than 1 year after such transfers or on 
demand, against the transfer of funds, or any other 
similar agreement; 
‘‘(II) does not include any repurchase obliga-
tion under a participation in a commercial mort-
gage loan, unless the Agency determines by regula-
tion, resolution, or order to include any such 
participation within the meaning of such term; 
‘‘(III) means any combination of agreements 
or transactions referred to in subclauses (I) and 
(IV); 
‘‘(IV) means any option to enter into any agree-
ment or transaction referred to in subclause (I) 
or (III); 
‘‘(V) means a master agreement that provides 
for an agreement or transaction referred to in sub-
clause (I), (III), or (IV), together with all supple-
ments to any such master agreement, without 
regard to whether the master agreement provides 
for an agreement or transaction that is not a 
repurchase agreement under this clause, except 
that the master agreement shall be considered 
to be a repurchase agreement under this subclause 
only with respect to each agreement or transaction 
under the master agreement that is referred to 
in subclause (I), (III), or (IV); and 
‘‘(VI) means any security agreement or 
arrangement or other credit enhancement related 
to any agreement or transaction referred to in 
subclause (I), (III), (IV), or (V), including any guar-
antee or reimbursement obligation in connection 
with any agreement or transaction referred to in 
any such subclause. 
‘‘(vi) SWAP
AGREEMENT.—The term ‘swap agree-
ment’ means— 
‘‘(I) any agreement, including the terms and 
conditions incorporated by reference in any such 
agreement, which is an interest rate swap, option, 
future, or forward agreement, including a rate 
floor, rate cap, rate collar, cross-currency rate 
swap, and basis swap; a spot, same day-tomorrow, 
tomorrow-next, forward, or other foreign exchange 
or precious metals agreement; a currency swap, 
option, future, or forward agreement; an equity 
index or equity swap, option, future, or forward 
agreement; a debt index or debt swap, option, 
future, or forward agreement; a total return, credit 
spread or credit swap, option, future, or forward 
agreement; a commodity index or commodity swap, 
option, future, or forward agreement; or a weather 
swap, weather derivative, or weather option; 
‘‘(II) any agreement or transaction that is 
similar to any other agreement or transaction 
referred to in this clause and that is of a type