To provide for enhanced regulation of, and to establish a term certain for the conservatorships of Fannie Mae and Freddie Mac, to provide conditions for continued operation of such enterprises, to provide for the wind down of such operations and the dissolution of such enterprises, and to address budgetary treatment of such enterprises.

SA 3839. Mr. McCAIN (for himself, Mr. Shelby, Mr. Gregg, Mr. Bennett,
Mr. Crapo, and Mr. Corker) submitted an amendment intended to be
proposed to amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for
himself and Mrs. Lincoln)) to the bill S. 3217, to promote the
financial stability of the United States by improving accountability
and transparency in the financial system, to end ``too big fail'', to
protect the American taxpayer by ending bailouts, to protect consumers
from abusive financial services practices, and for other purposes;
which was ordered to lie on the table; as follows:

=========================== NOTE ===========================

On page S3264, May 5, 2010, in the second column, the following
appears: SA 3839. Mr. McCAIN (for himself, Mrs. Shaheen, Mr.
Gregg, Mr. Bennett, Mr. Crapo, and Mr. Corker) submitted an
amendment intended to be proposed to amendment SA 3739 proposed by
Mr. Reid (for Mr. Dodd (for himself and Mrs. Lincoln)) to the bill
S. 3217,

The online version has been corrected to read: SA 3839. Mr.
McCAIN (for himself, Mr. Shelby, Mr. Gregg, Mr. Bennett, Mr.
Crapo, and Mr. Corker) submitted an amendment intended to be
proposed to amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd
(for himself and Mrs. Lincoln)) to the bill S. 3217,

========================= END NOTE =========================

At the end of the bill, add the following:

TITLE XIII--ENHANCED REGULATION OF GOVERNMENT-SPONSORED ENTERPRISES

Subtitle A--GSE Bailout Elimination and Taxpayer Protection

SECTION 1311. SHORT TITLE.

This subtitle may be cited as the ``GSE Bailout Elimination
and Taxpayer Protection Act''.

SEC. 1312. DEFINITIONS.

For purposes of this subtitle, the following definitions
shall apply:
(1) Charter.--The term ``charter'' means--
(A) with respect to the Federal National Mortgage
Association, the Federal National Mortgage Association
Charter Act (12 U.S.C. 1716 et seq.); and
(B) with respect to the Federal Home Loan Mortgage
Corporation, the Federal Home Loan Mortgage Corporation Act
(12 U.S.C. 1451 et seq.).
(2) Director.--The term ``Director'' means the Director of
the Federal Housing Finance Agency.
(3) Enterprise.--The term ``enterprise'' means--
(A) the Federal National Mortgage Association; and
(B) the Federal Home Loan Mortgage Corporation.
(4) Guarantee.--The term ``guarantee'' means, with respect
to an enterprise, the credit support of the enterprise that
is provided by the Federal Government through its charter as
a government-sponsored enterprise.

SEC. 1313. TERMINATION OF CURRENT CONSERVATORSHIP.

(a) In General.--Upon the expiration of the period referred
to in subsection (b), the Director of the Federal Housing
Finance Agency shall determine, with respect to each
enterprise, if the enterprise is financially viable at that
time and--
(1) if the Director determines that the enterprise is
financially viable, immediately take all actions necessary to
terminate the conservatorship for the enterprise that is in
effect pursuant to section 1367 of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12
U.S.C. 4617); or
(2) if the Director determines that the enterprise is not
financially viable, immediately appoint the Federal Housing
Finance Agency as receiver under section 1367 of the Federal
Housing Enterprises Financial Safety and Soundness Act of
1992 and carry out such receivership under the authority of
such section.
(b) Timing.--The period referred to in this subsection is,
with respect to an enterprise--
(1) except as provided in paragraph (2), the 24-month
beginning upon the date of the enactment of this Act; or
(2) if the Director determines before the expiration of the
period referred to in paragraph (1) that the financial
markets would be adversely affected without the extension of
such period under this paragraph with respect to that
enterprise, and upon making such determination notifies the
Congress in writing of such determination, the 30-month
period beginning upon the date of the enactment of this Act.
(c) Financial Viability.--The Director may not determine
that an enterprise is financially viable for purposes of
subsection (a) if the Director determines that any of the
conditions for receivership set forth in paragraph (3) or (4)
of section 1367(a) of the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (12 U.S.C.
4617(a)) exists at the time with respect to the enterprise.

SEC. 1314. LIMITATION OF ENTERPRISE AUTHORITY UPON EMERGENCE
FROM CONSERVATORSHIP.

(a) Revised Authority.--Upon the expiration of the period
referred to in section 1113(b), if the Director makes the
determination under section 1113(a)(1), the following
provisions shall take effect:
(1) Repeal of housing goals.--
(A) Repeal.--The Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 is amended by striking
sections 1331 through 1336 (12 U.S.C. 4561-6).
(B) Conforming amendments.--Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 is amended--
(i) in section 1303(28) (12 U.S.C. 4502(28)), by striking
``and, for the purposes'' and all that follows through
``designated disaster areas'';
(ii) in section 1324(b)(1)(A) (12 U.S.C. 4544(b)(1)(A))--

(I) by striking clauses (i), (ii), and (iv);
(II) in clause (iii), by inserting ``and'' after the
semicolon at the end; and
(III) by redesignating clauses (iii) and (v) as clauses (i)
and (ii), respectively;

(iii) in section 1338(c)(10) (12 U.S.C. 4568(c)(10)), by
striking subparagraph (E);
(iv) in section 1339(h) (12 U.S.C. 4569), by striking
paragraph (7);
(v) in section 1341 (12 U.S.C. 4581)--

(I) in subsection (a)--

(aa) in paragraph (1), by inserting ``or'' after the
semicolon at the end;
(bb) in paragraph (2), by striking the semicolon at the end
and inserting a period; and
(cc) by striking paragraphs (3) and (4); and

(II) in subsection (b)(2)--

(aa) in subparagraph (A), by inserting ``or'' after the
semicolon at the end;
(bb) by striking subparagraphs (B) and (C); and
(cc) by redesignating subparagraph (D) as subparagraph (B);
(vi) in section 1345(a) (12 U.S.C. 4585(a))--

(I) in paragraph (1), by inserting ``or'' after the
semicolon at the end;
(II) in paragraph (2), by striking the semicolon at the end
and inserting a period; and
(III) by striking paragraphs (3) and (4); and

(vii) in section 1371(a)(2) (12 U.S.C. 4631(a)(2))--

(I) by striking ``with any housing goal established under
subpart B of part 2 of subtitle A of this title,''; and
(II) by striking ``section 1336 or''.

[[Page S3265]]

(2) Portfolio limitations.--Subtitle B of title XIII of the
Housing and Community Development Act of 1992 (12 U.S.C. 4611
et seq.) is amended by adding at the end the following new
section:

``SEC. 1369E. RESTRICTION ON MORTGAGE ASSETS OF ENTERPRISES.

``(a) Restriction.--No enterprise shall own, as of any
applicable date in this subsection or thereafter, mortgage
assets in excess of--
``(1) upon the expiration of the period referred to in
section 1113(b) of the GSE Bailout Elimination and Taxpayer
Protection Act or thereafter, 95 percent of the aggregate
amount of mortgage assets that the regulated entity owned on
December 31 of the previous year, provided, that in no event
shall the regulated entity be required under this paragraph
to own less than $250,000,000,000 in mortgage assets;
``(2) upon the expiration of the 1-year period that begins
on the date described in paragraph (1) or thereafter, 75
percent of the aggregate amount of mortgage assets that the
regulated entity owned in section 1113(b) of the GSE Bailout
Elimination and Taxpayer Protection Act, provided, that in no
event shall the regulated entity be required under this
paragraph to own less than $250,000,000,000 in mortgage
assets;
``(3) upon the expiration of the 2-year period that begins
on the date described in paragraph (1) or thereafter, 75
percent of the aggregate amount of mortgage assets that the
regulated entity owned upon the expiration of the 1-year
period that begins on the date described in paragraph (1),
provided, that in no event shall the regulated entity be
required under this paragraph to own less than
$250,000,000,000 in mortgage assets; and
``(4) upon the expiration of the 3-year period that begins
on the date described in paragraph (1), $250,000,000,000.
``(b) Definition of Mortgage Assets.--For purposes of this
section, the term `mortgage assets' means, with respect to an
enterprise, assets of such enterprise consisting of
mortgages, mortgage loans, mortgage-related securities,
participation certificates, mortgage-backed commercial paper,
obligations of real estate mortgage investment conduits and
similar assets, in each case to the extent such assets would
appear on the balance sheet of such enterprise in accordance
with generally accepted accounting principles in effect in
the United States as of September 7, 2008 (as set forth in
the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the
Financial Accounting Standards Board from time to time; and
without giving any effect to any change that may be made
after September 7, 2008, in respect of Statement of Financial
Accounting Standards No. 140 or any similar accounting
standard).''.
(3) Increase in minimum capital requirement.--Section 1362
of the Federal Housing Enterprises Financial Safety and
Soundness Act of 1992 (12 U.S.C. 4612), as amended by section
1111 of the Housing and Economic Recovery Act of 2008 (Public
Law 110-289), is amended--
(A) in subsection (a), by striking ``For purposes of this
subtitle, the minimum capital level for each enterprise shall
be'' and inserting ``The minimum capital level established
under subsection (g) for each enterprise may not be lower
than'';
(B) in subsection (c)--
(i) by striking ``subsections (a) and'' and inserting
``subsection'';
(ii) by striking ``regulated entities'' the first place
such term appears and inserting ``Federal Home Loan Banks'';
(iii) by striking ``for the enterprises,'';
(iv) by striking ``, or for both the enterprises and the
banks,'';
(v) by striking ``the level specified in subsection (a) for
the enterprises or''; and
(vi) by striking ``the regulated entities operate'' and
inserting ``such banks operate'';
(C) in subsection (d)(1)--
(i) by striking ``subsections (a) and'' and inserting
``subsection''; and
(ii) by striking ``regulated entity'' each place such term
appears and inserting ``Federal home loan bank'';
(D) in subsection (e), by striking ``regulated entity''
each place such term appears and inserting ``Federal home
loan bank'';
(E) in subsection (f)--
(i) by striking ``the amount of core capital maintained by
the enterprises,''; and
(ii) by striking ``regulated entities'' and inserting
``banks''; and
(F) by adding at the end the following new subsection:
``(g) Establishment of Revised Minimum Capital Levels.--
``(1) In general.--The Director shall cause the enterprises
to achieve and maintain adequate capital by establishing
minimum levels of capital for such the enterprises and by
using such other methods as the Director deems appropriate.
``(2) Authority.--The Director shall have the authority to
establish such minimum level of capital for an enterprise in
excess of the level specified under subsection (a) as the
Director, in the Director's discretion, deems to be necessary
or appropriate in light of the particular circumstances of
the enterprise.
``(h) Failure To Maintain Revised Minimum Capital Levels.--
``(1) Unsafe and unsound practice or condition.--Failure of
a enterprise to maintain capital at or above its minimum
level as established pursuant to subsection (g) of this
section may be deemed by the Director, in his discretion, to
constitute an unsafe and unsound practice or condition within
the meaning of this title.
``(2) Directive to achieve capital level.--
``(A) Authority.--In addition to, or in lieu of, any other
action authorized by law, including paragraph (1), the
Director may issue a directive to an enterprise that fails to
maintain capital at or above its required level as
established pursuant to subsection (g) of this section.
``(B) Plan.--Such directive may require the enterprise to
submit and adhere to a plan acceptable to the Director
describing the means and timing by which the enterprise shall
achieve its required capital level.
``(C) Enforcement.--Any such directive issued pursuant to
this paragraph, including plans submitted pursuant thereto,
shall be enforceable under the provisions of subtitle C of
this title to the same extent as an effective and outstanding
order issued pursuant to subtitle C of this title which has
become final.
``(3) Adherence to plan.--
``(A) Consideration.--The Director may consider such
enterprise's progress in adhering to any plan required under
this subsection whenever such enterprise seeks the requisite
approval of the Director for any proposal which would divert
earnings, diminish capital, or otherwise impede such
enterprise's progress in achieving its minimum capital level.
``(B) Denial.--The Director may deny such approval where it
determines that such proposal would adversely affect the
ability of the enterprise to comply with such plan.''.
(4) Repeal of increases to conforming loan limits.--
(A) Repeal of temporary increases.--
(i) Continuing appropriations resolution, 2010.--Section
167 of the Continuing Appropriations Resolution, 2010 (as
added by section 104 of division B of Public Law 111-88; 123
Stat. 2973) is hereby repealed.
(ii) American recovery and reinvestment act of 2009.--
Section 1203 of division A of the American Recovery and
Reinvestment Act of 2009 (Public Law 111-5; 123 Stat. 225) is
hereby repealed.
(iii) Economic stimulus act of 2008.--Section 201 of the
Economic Stimulus Act of 2008 (Public Law 110-185; 122 Stat.
619) is hereby repealed.
(B) Repeal of general limit and permanent high-cost area
increase.--Paragraph (2) of section 302(b) of the Federal
National Mortgage Association Charter Act (12 U.S.C.
1717(b)(2)) and paragraph (2) of section 305(a) of the
Federal Home Loan Mortgage Corporation Act (12 U.S.C.
1454(a)(2)) are each amended to read as such sections were in
effect immediately before the enactment of the Housing and
Economic Recovery Act of 2008 (Public Law 110-289).
(C) Repeal of new housing price index.--Section 1322 of the
Federal Housing Enterprises Financial Safety and Soundness
Act of 1992, as added by section 1124(d) of the Housing and
Economic Recovery Act of 2008 (Public Law 110-289), is hereby
repealed.
(D) Repeal.--Section 1124 of the Housing and Economic
Recovery Act of 2008 (Public Law 110-289) is hereby repealed.
(E) Establishment of conforming loan limit.--For the year
in which the expiration of the period referred to in section
1113(b) occurs, the limitations governing the maximum
original principal obligation of conventional mortgages that
may be purchased by the Federal National Mortgage Association
and the Federal Home Loan Mortgage Corporation, referred to
in section 302(b)(2) of the Federal National Mortgage
Association Charter Act (12 U.S.C. 1717(b)(2)) and section
305(a)(2) of the Federal Home Loan Mortgage Corporation Act
(12 U.S.C. 1454(a)(2)), respectively, shall be considered to
be--
(i) $417,000 for a mortgage secured by a single-family
residence,
(ii) $533,850 for a mortgage secured by a 2-family
residence,
(iii) $645,300 for a mortgage secured by a 3-family
residence, and
(iv) $801,950 for a mortgage secured by a 4-family
residence,
and such limits shall be adjusted effective each January 1
thereafter in accordance with such sections 302(b)(2) and
305(a)(2).
(F) Prohibition of purchase of mortgages exceeding median
area home price.--
(i) Fannie mae.--Section 302(b)(2) of the Federal National
Mortgage Association Charter Act (12 U.S.C. 1717(b)(2)) is
amended by adding at the end the following new sentence:
``Notwithstanding any other provision of this title, the
corporation may not purchase any mortgage asset for a
property having a principal obligation that exceeds the
median home price, for properties of the same size, for the
area in which such property subject to the mortgage is
located.''.
(ii) Freddie mac.--Section 305(a)(2) of the Federal Home
Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) is
amended by adding at the end the following new sentence:
``Notwithstanding any other provision of this title, the
Corporation may not purchase any mortgage for a property
having a principal obligation that exceeds the median home
price, for properties of the same size, for the area in which
such property subject to the mortgage is located.''.
(5) Requirement of minimum down payment for mortgages
purchased.--

[[Page S3266]]

(A) Fannie mae.--Subsection (b) of section 302 of the
Federal National Mortgage Association Charter Act (12 U.S.C.
1717(b)) is amended by adding at the end the following new
paragraph:
``(7) Notwithstanding any other provision of this Act, the
corporation may not newly purchase any mortgage asset, unless
the mortgagor has paid, in cash or its equivalent on account
of the property securing repayment such mortgage, in
accordance with regulations issued by the Director of the
Federal Housing Finance Agency, not less than--
``(A) for any mortgage purchased during the 12-month period
beginning upon the expiration of the period referred to in
section 1113(b) of the GSE Bailout Elimination and Taxpayer
Protection Act, 5 percent of the appraised value of the
property;
``(B) for any mortgage purchased during the 12-month period
beginning upon the expiration of the 12-month period referred
to in subparagraph (A) of this paragraph, 7.5 percent of the
appraised value of the property; and
``(C) for any mortgage purchased during the 12-month period
beginning upon the expiration of the 12-month period referred
to in subparagraph (B) of this paragraph, 10 percent of the
appraised value of the property.''.
(B) Freddie mac.--Subsection (a) of section 305 of the
Federal Home Loan Mortgage Corporation Act (12 U.S.C.
1454(a)) is amended by adding at the end the following new
paragraph:
``(6) Notwithstanding any other provision of this Act, the
Corporation may not newly purchase any mortgage asset, unless
the mortgagor has paid, in cash or its equivalent on account
of the property securing repayment such mortgage, in
accordance with regulations issued by the Director of the
Federal Housing Finance Agency, not less than--
``(A) for any mortgage purchased during the 12-month period
beginning upon the expiration of the period referred to in
section 1113(b) of the GSE Bailout Elimination and Taxpayer
Protection Act, 5 percent of the appraised value of the
property;
``(B) for any mortgage purchased during the 12-month period
beginning upon the expiration of the 12-month period referred
to in subparagraph (A) of this paragraph, 7.5 percent of the
appraised value of the property; and
``(C) for any mortgage purchased during the 12-month period
beginning upon the expiration of the 12-month period referred
to in subparagraph (B) of this paragraph, 10 percent of the
appraised value of the property.''.
(6) Minimum prudent underwriting standards.--The Federal
Housing Finance Agency shall, not later than 6 months after
the date of enactment of this Act, issue regulations
specifying minimum prudent underwriting standards for
residential mortgage loans eligible for purchase by an
enterprise, which regulations shall include minimum
requirements for--
(A) verification and documentation of income and assets
relied upon to qualify the obligor on the loan;
(B) determination of the ability of the obligor to repay,
based on all terms of the loan, including principal payments
that fully amortize the balance over the term of the loan;
and
(C) any other standards that the Federal Housing Finance
Agency determines appropriate to ensure prudent underwriting
and which effect the safety and soundness of the regulated
entities.
(7) Requirement to pay state and local taxes.--
(A) Fannie mae.--Paragraph (2) of section 309(c) of the
Federal National Mortgage Association Charter Act (12 U.S.C.
1723a(c)(2)) is amended--
(i) by striking ``shall be exempt from'' and inserting
``shall be subject to''; and
(ii) by striking ``except that any'' and inserting ``and
any''.
(B) Freddie mac.--Section 303(e) of the Federal Home Loan
Mortgage Corporation Act (12 U.S.C. 1452(e)) is amended--
(i) by striking ``shall be exempt from'' and inserting
``shall be subject to''; and
(ii) by striking ``except that any'' and inserting ``and
any''.
(8) Repeals relating to registration of securities.--
(A) Fannie mae.--
(i) Mortgage-backed securities.--Section 304(d) of the
Federal National Mortgage Association Charter Act (12 U.S.C.
1719(d)) is amended by striking the fourth sentence.
(ii) Subordinate obligations.--Section 304(e) of the
Federal National Mortgage Association Charter Act (12 U.S.C.
1719(e)) is amended by striking the fourth sentence.
(B) Freddie mac.--Section 306 of the Federal Home Loan
Mortgage Corporation Act (12 U.S.C. 1455) is amended by
striking subsection (g).
(9) Recoupment of costs for federal guarantee.--
(A) Assessments.--The Director of the Federal Housing
Finance Agency shall establish and collect from each
enterprise assessments in the amount determined under
subparagraph (B). In determining the method and timing for
making such assessments, the Director shall take into
consideration the determinations and conclusions of the study
under subsection (b) of this section.
(B) Determination of costs of guarantee.--Assessments under
subparagraph (A) with respect to an enterprise shall be in
such amount as the Director determines necessary to recoup to
the Federal Government the full value of the benefit the
enterprise receives from the guarantee provided by the
Federal Government for the obligations and financial
viability of the enterprise, based upon the dollar value of
such benefit in the market to such enterprise when not
operating under conservatorship or receivership. To determine
such amount, the Director shall establish a risk-based
pricing mechanism as the Director considers appropriate,
taking into consideration the determinations and conclusions
of the study under subsection (b).
(C) Treatment of recouped amounts.--The Director shall
cover into the general fund of the Treasury any amounts
received from assessments made under this paragraph.
(b) GAO Study Regarding Recoupment of Costs for Federal
Government Guarantee.--The Comptroller General of the United
States shall conduct a study to determine a risk-based
pricing mechanism to accurately determine the value of the
benefit the enterprises receive from the guarantee provided
by the Federal Government for the obligations and financial
viability of the enterprises. Such study shall establish a
dollar value of such benefit in the market to each enterprise
when not operating under conservatorship or receivership,
shall analyze various methods of the Federal Government
assessing a charge for such value received (including methods
involving an annual fee or a fee for each mortgage purchased
or securitized), and shall make a recommendation of the best
such method for assessing such charge. Not later than 12
months after the date of enactment of this Act, the
Comptroller General shall submit to the Congress a report
setting forth the determinations and conclusions of such
study.

SEC. 1315. REQUIRED WIND DOWN OF OPERATIONS AND DISSOLUTION
OF ENTERPRISE.

(a) Applicability.--This section shall apply to an
enterprise upon the expiration of the 3-year period referred
to in section 1113(b).
(b) Repeal of Charter.--Upon the applicability of this
section to an enterprise, the charter for the enterprise is
repealed and the enterprise shall have no authority to
conduct new business under such charter, except that the
provisions of such charter in effect immediately before such
repeal shall continue to apply with respect to the rights and
obligations of any holders of outstanding debt obligations
and mortgage-backed securities of the enterprise.
(c) Wind Down.--Upon the applicability of this section to
an enterprise, the Director and the Secretary of the Treasury
shall jointly take such action, and may prescribe such
regulations and procedures, as may be necessary to wind down
the operations of an enterprise as an entity chartered by the
United States Government over the duration of the 10-year
period beginning upon the applicability of this section to
the enterprise (pursuant to subsection (a)) in an orderly
manner consistent with this subtitle and the ongoing
obligations of the enterprise.
(d) Division of Assets and Liabilities; Authority To
Establish Holding Corporation and Dissolution Trust Fund.--
The action and procedures required under subsection (c)--
(1) shall include the establishment and execution of plans
to provide for an equitable division and distribution of
assets and liabilities of the enterprise, including any
liability of the enterprise to the United States Government
or a Federal reserve bank that may continue after the end of
the period described in subsection (a); and
(2) may provide for establishment of--
(A) a holding corporation organized under the laws of any
State of the United States or the District of Columbia for
the purposes of the reorganization and restructuring of the
enterprise; and
(B) one or more trusts to which to transfer--
(i) remaining debt obligations of the enterprise, for the
benefit of holders of such remaining obligations; or
(ii) remaining mortgages held for the purpose of backing
mortgage-backed securities, for the benefit of holders of
such remaining securities.

Subtitle B--Inspector General for Regulated Entities in Conservatorship

SEC. 1321. SPECIAL INSPECTOR GENERAL FOR THE CONSERVATORSHIP
OF REGULATED ENTITIES.

(a) Office of Inspector General.--There is established in
the General Accountability Office the Office of the Special
Inspector General for the Conservatorship of Regulated
Entities.
(b) Appointment of Inspector General.--
(1) Leadership.--The head of the Office established under
subsection (a) shall be the Special Inspector General for the
Conservatorship of Regulated Entities (in this section
referred to as the ``Special Inspector General''), who shall
be appointed by the President, by and with the advice and
consent of the Senate.
(2) Appointment.--The appointment of the Special Inspector
General shall be made on the basis of integrity and
demonstrated ability in accounting, auditing, financial
analysis, law, management analysis, public administration, or
investigations.
(3) Timing.--The nomination of an individual as Special
Inspector General shall be made as soon as is practicable
following the date of enactment of this Act, but not later
than 30 days after that date of enactment.

[[Page S3267]]

(4) Removable for cause.--The Special Inspector General
shall be removable from office, in accordance with the
provisions of section 3(b) of the Inspector General Act of
1978 (5 U.S.C. App.).
(5) Status.--For purposes of section 7324 of title 5,
United States Code, the Special Inspector General shall not
be considered an employee who determines policies to be
pursued by the United States in the nationwide administration
of Federal law.
(6) Compensation.--The annual rate of basic pay of the
Special Inspector General shall be the annual rate of basic
pay for an Inspector General under section 3(e) of the
Inspector General Act of 1978 (5 U.S.C. App.).
(c) Duties.--
(1) In general.--It shall be the duty of the Special
Inspector General to conduct, supervise, and coordinate
audits and investigations of the purchase, management, and
sale of assets by regulated entities, so long as the entities
remain in conservatorship under section 1367 of the Federal
Housing Enterprises Financial Safety and Soundness Act of
1992 (12 U.S.C. 4617) (in this section referred to as
``regulated entities''), including by collecting and
summarizing--
(A) a description of the categories of mortgage assets
purchased or otherwise procured by regulated entities;
(B) an explanation of the reasons why the Director of the
Federal Housing Finance Agency (in this section referred to
as the ``Director'') deemed it necessary to purchase each
such mortgage asset;
(C) a listing of each institution from which such mortgage
assets were purchased;
(D) a current estimate of the total amount of mortgage
assets purchased since the date of appointment of the Federal
Housing Finance Agency (in this section referred to as the
``Agency'') as conservator and the profit and loss, projected
or realized, of each such mortgage asset;
(E) a description of the categories of mortgage loans
modified by regulated entities;
(F) an explanation of the reasons why the Director deemed
it necessary to modify each such mortgage loan;
(G) an explanation of the risk analysis procedures in place
within regulated entities and the Council in respect to the
modification process, as well as the loans accepted into the
modification process;
(H) an explanation of the effect of continuing the
affordable housing goals of the regulated entities on the
financial standing of the regulated entities;
(I) the impact on any funding requested and accepted as a
part of the Amended and Restated Senior Preferred Stock
Purchase Agreement, dated September 26, 2008, amended May 6,
2009, amended December 24, 2009, and amended further at any
point following the date of enactment of this Act;
(J) an assessment of whether the budgetary treatment of the
assets and liabilities of the entities is correct, as it
relates to the budget proposed by the President, as required
under section 1105(a) of title 31, United States Code;
(K) an explanation of troubled assets owned by the
regulated entities and acquired prior to the conservatorship;
and
(L) a description of any changes to the structure of the
regulated entities made by the Director and an explanation of
how the changes will better enable the regulated entities to
be successful during and post conservatorship.
(2) Administrative authority.--The Special Inspector
General shall establish, maintain, and oversee such systems,
procedures, and controls as the Special Inspector General
considers appropriate to discharge the duty under paragraph
(1).
(3) Other duties.--In addition to the duties specified in
paragraphs (1) and (2), the Inspector General shall have the
duties and responsibilities of inspectors general under the
Inspector General Act of 1978, including sections 4(b)(1) and
6 of that Act.
(d) Personnel, Facilities, and Other Resources.--
(1) Authority for officers and employees.--The Special
Inspector General may select, appoint, and employ such
officers and employees as may be necessary for carrying out
the duties of the Special Inspector General, subject to the
provisions of title 5, United States Code, governing
appointments in the competitive service, and the provisions
of chapter 51 and subchapter III of chapter 53 of such title,
relating to classification and General Schedule pay rates.
(2) Services.--The Special Inspector General may obtain
services, as authorized by section 3109 of title 5, United
States Code, at daily rates not to exceed the equivalent rate
prescribed for grade GS-15 of the General Schedule by section
5332 of such title.
(3) Contracts.--The Special Inspector General may enter
into contracts and other arrangements for audits, studies,
analyses, and other services with public agencies and with
private persons, and make such payments as may be necessary
to carry out the duties of the Inspector General.
(4) Agency cooperation.--
(A) Requests.--Upon request of the Special Inspector
General for information or assistance from any department,
agency, or other entity of the Federal Government, the head
of such entity shall, in so far as is practicable and not in
contravention of any other provision of law, furnish such
information or assistance to the Special Inspector General,
or an authorized designee thereof.
(B) Reports of unreasonable denials.--Whenever information
or assistance requested by the Special Inspector General is,
in the judgment of the Special Inspector General,
unreasonably refused or not provided, the Special Inspector
General shall report the circumstances to the appropriate
committees of Congress, without delay.
(e) Reports.--
(1) Quarterly reports to congress.--Not later than 60 days
after the confirmation of the Special Inspector General, and
every calendar quarter thereafter, the Special Inspector
General shall submit to the appropriate committees of
Congress a report summarizing the activities of the Special
Inspector General during the 120-day period ending on the
date of such report. Each report shall include, for the
period covered by such report, a detailed statement of all
information collected under subsection (c)(1).
(2) Rule of construction.--Nothing in this subsection shall
be construed to authorize the public disclosure of
information that is--
(A) specifically prohibited from disclosure by any other
provision of law;
(B) specifically required by Executive Order to be
protected from disclosure in the interest of national defense
or national security or in the conduct of foreign affairs; or
(C) a part of an ongoing criminal investigation.
(f) Funding.--Of the amounts made available to the
Secretary, under section 118 of the Emergency Economic
Stabilization Act of 2008 (12 U.S.C. 5228), $5,000,000 shall
be available to the Special Inspector General to carry out
this section, which amount shall remain available until
expended.
(g) Termination.--
(1) In general.--The Office of the Special Inspector
General shall terminate 90 days after the date of the
emergence of all regulated entities from conservatorship and
receivership under section 1367 of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12
U.S.C. 4617).
(2) Final report.--The Office of the Special Inspector
General shall prepare and submit a final report to Congress
not later than the end of the 90-day period referred to in
paragraph (1).

Subtitle C--Limiting Further Bailouts of Fannie Mae and Freddie Mac

SEC. 1331. SHORT TITLE.

This subtitle may be cited as the ``Ending Bailouts of
Fannie Mae and Freddie Mac Act''.

SEC. 1332. REESTABLISHING THE MAXIMUM AGGREGATE AMOUNT
PERMITTED TO BE PROVIDED BY THE TAXPAYERS TO
FANNIE MAE AND FREDDIE MAC.

Section 1367(b)(2) of the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (12 U.S.C.
4617(b)(2)) is amended by adding at the end the following new
subparagraph:
``(L) Reestablishment of taxpayer funding caps.--The
Agency, as conservator, shall prevent a regulated entity from
requesting or receiving any funds from the United States
Department of the Treasury, as part of the Amended and
Restated Senior Preferred Stock Purchase Agreement, dated as
of September 26, 2008, amended May 6, 2009, and further
amended December 24, 2009, between the United State
Department of the Treasury and the Federal Home Loan Mortgage
Corporation, or the Federal National Mortgage Association,
that exceeds a maximum aggregate amount of
$200,000,000,000.''.

SEC. 1333. REESTABLISHING SCHEDULED REDUCTION OF MORTGAGE
ASSETS OWNED BY FANNIE MAE AND FREDDIE MAC.

Section 1367(b)(2) of the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (12 U.S.C.
4617(b)(2)) is amended by adding at the end the following new
subparagraph:
``(M) Reduction of owned mortgage assets.--
``(i) In general.--The Agency, as conservator, shall ensure
that a regulated entity does not own, as of any applicable
date, mortgage assets in excess of 90.0 percent of the
aggregate amount of mortgage assets that the regulated entity
owned on December 31 of each of the previous year, provided,
that in no event shall the regulated entity be required under
this subparagraph to own less than $250,000,000,000 in
mortgage assets.
``(ii) Definition of mortgage assets.--For purposes of this
subparagraph, the term `mortgage assets' means with respect
to a regulated entity, assets of such entity consisting of
mortgages, mortgage loans, mortgage-related securities,
participation certificates, mortgage-backed commercial paper,
obligations of real estate mortgage investment conduits and
similar assets, in each case to the extent such assets would
appear on the balance sheet of such entity in accordance with
generally accepted accounting principles.''.

SEC. 1334. ENSURING CONGRESSIONAL REVIEW FOR AGREEMENTS
INCREASING TAXPAYER RISK.

Section 1367(b)(2) of the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (12 U.S.C.
4617(b)(2)), as amended by sections 1203 and 1204, is further
amended by adding at the end the following new subparagraph:
``(N) Agreements.--
``(i) In general.--The Agency, as conservator or receiver,
may enter into agreements that are consistent with its
appointment as conservator or receiver with the regulated
entity and that expire prior to, or upon, the regulated
entity's emergence from conservatorship or receivership
provided--

[[Page S3268]]

``(I) the agreement does not expose the United States
taxpayers to additional risk; and
``(II) the agreement was approved by Congress pursuant to
clause (ii).

``(ii) Procedure for congressional approval.--

``(I) In general.--Notwithstanding clause (i), the Agency
may enter into, on an interim basis, an agreement, even if
the agreement exposes the taxpayer to additional risk,
including if such agreement exceeds the limitations
established under subparagraphs (L) and (M), if such an
agreement--

``(aa) is deemed necessary by the Agency, based upon the
Agency's duties as conservator or receiver; and
``(bb) is approved by Congress through adoption of a
concurrent resolution of approval, not more than 120 days
after the later of--
``(AA) the signing of the agreement; or
``(BB) the date of enactment of the Ending Bailouts of
Fannie Mae and Freddie Mac Act.

``(II) Required submissions for congressional review.--
During the 120-day period described under subclause (I), the
Director shall submit to Congress--

``(aa) the text of the agreement;
``(bb) a certification and justification of how the
agreement is consistent with the Agency's duties as
conservator or receiver;
``(cc) budgetary projections demonstrating the cost to the
taxpayer in a 1, 5, and 10-year window;
``(dd) independent risk analysis from the Government
Accountability Office of the agreement, considering the risk
to the short and long-term viability of the regulated entity
and the United States taxpayer; and
``(ee) a time table for the expiration of the agreement.''.

Subtitle D--Fannie Mae and Freddie Mac in the Federal Budget

SEC. 1341. ON-BUDGET STATUS OF FANNIE MAE AND FREDDIE MAC.

(a) In General.--Notwithstanding any other provision of
law, the receipts and disbursements, including the
administrative expenses, of the Federal National Mortgage
Association and the Federal Home Loan Mortgage Corporation
shall be counted as new budget authority, outlays, receipts,
or deficit or surplus for purposes of--
(1) the Budget of the United States Government as submitted
by the President;
(2) the congressional budget;
(3) the Statutory Pay-As-You-Go Act of 2010; and
(4) the Balanced Budget and Emergency Deficit Control Act
of 1985 (or any successor statute).
(b) Expiration.--The budgetary treatment of the Federal
National Mortgage Association or Federal Home Loan Mortgage
Corporation or any functional replacements under subsection
(a) shall continue with respect to such entities until such
entities are no longer under Federal conservatorship or
receivership as authorized by the Housing and Economic
Recovery Act of 2008 (Public Law 110-289) or any successor
statute.

SEC. 1342. BUDGETARY TREATMENT OF FANNIE MAE AND FREDDIE MAC.

All costs to the Government of the activities of or under
the Federal National Mortgage Association, Federal Home Loan
Mortgage Corporation and any functional replacements or any
modification of such entities shall be determined on a fair
value basis.

SEC. 1343. FANNIE MAE AND FREDDIE MAC DEBT SUBJECT TO PUBLIC
DEBT LIMIT.

(a) In General.--For purposes of section 3101(b) of chapter
31 of title 31, United States Code, the face amount of
obligations issued by the Federal National Mortgage
Association and by the Federal Home Loan Mortgage Corporation
or any functional replacements and outstanding shall be
treated as issued by the United States Government under that
section.
(b) Temporary Increase in the Public Debt Limit.--The limit
on the obligation in section 3101(b) of title 31, United
States Code, shall be increased by the face amount of
obligations issued by the Federal National Mortgage
Association and the Federal Home Loan Mortgage Corporation
and outstanding on April 15, 2010.
(c) Expiration.--
(1) Obligations.--The obligations of Federal National
Mortgage Association or Federal Home Loan Mortgage
Corporation or any functional replacements shall continue to
be treated as issued by the United States Government with
respect to such entities until such entities no longer have
in place an agreement with the Secretary of the Treasury for
the purchase of obligations and securities authorized by the
Housing and Economic Recovery Act of 2008 (Public Law 110-
289) or any successor statute.
(2) Debt limit.--Any temporary increase in the public debt
limit authorized in subsection (b) with respect to the
obligations of Federal National Mortgage Association or
Federal Home Loan Mortgage Corporation shall be reversed with
respect to such entities when Federal National Mortgage
Association or Federal Home Loan Mortgage Corporation or any
functional replacements no longer have in place an agreement
with the Secretary of the Treasury for the purchase of
obligations and securities authorized by the Housing and
Economic Recovery Act of 2008 (Public Law 110-289) or any
successor statute.

SEC. 1344. DEFINITIONS.

In this subtitle, the following definitions shall apply:
(1) Fair value.--The term ``fair value'' shall have the
same meaning as the definition of fair value outlined in
Financial Accounting Standards No. 157, or any successor
thereto, issued by the Financial Accounting Standards Board.
(2) Functional replacements.--The term ``functional
replacements'' means any organization, agreement, or other
arrangement that would perform the public functions of
Federal National Mortgage Association or Federal Home Loan
Mortgage Corporation.
(3) Modification.--
(A) In general.--The term ``modification'' means any
government action that alters the estimated fair value of the
activities of the Federal National Mortgage Association or
Federal Home Loan Mortgage Corporation or any functional
replacements.
(B) Cost.--The cost of a modification is the difference
between the current estimate of the fair value of the
activities of the Federal National Mortgage Association or
Federal Home Loan Mortgage Corporation or any functional
replacements and the estimate of the fair value of such
activities as modified.
______