[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1461 Referred in Senate (RFS)]
109th CONGRESS
1st Session
H. R. 1461
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
October 31, 2005
Received; read twice and referred to the Committee on Banking, Housing,
and Urban Affairs
_______________________________________________________________________
AN ACT
To reform the regulation of certain housing-related Government-
sponsored enterprises, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Federal Housing
Finance Reform Act of 2005''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title and table of contents.
Sec. 2. Definitions.
TITLE I--REFORM OF REGULATION OF ENTERPRISES AND FEDERAL HOME LOAN
BANKS
Subtitle A--Improvement of Safety and Soundness
Sec. 101. Establishment of the Federal Housing Finance Agency.
Sec. 102. Duties and authorities of Director.
Sec. 103. Housing Finance Oversight Board.
Sec. 104. Authority to require reports by regulated entities.
Sec. 105. Disclosure of charitable contributions by enterprises.
Sec. 106. Assessments.
Sec. 107. Examiners and accountants.
Sec. 108. Prohibition and withholding of executive compensation.
Sec. 109. Reviews of regulated entities.
Sec. 110. Regulations and orders.
Sec. 111. Risk-based capital requirements.
Sec. 112. Minimum and critical capital levels.
Sec. 113. Review of and authority over enterprise assets and
liabilities.
Sec. 114. Corporate governance of enterprises.
Sec. 115. Required registration under Securities Exchange Act of 1934.
Sec. 116. Financial Institutions Examination Council.
Sec. 117. Guarantee fee study.
Sec. 118. Conforming amendments.
Subtitle B--Improvement of Mission Supervision
Sec. 121. Transfer of program and activities approval and housing goal
oversight.
Sec. 122. Review by Director of new programs and activities of
enterprises.
Sec. 123. Conforming loan limits.
Sec. 124. Annual housing report regarding regulated entities.
Sec. 125. Revision of housing goals.
Sec. 126. Duty to serve underserved markets.
Sec. 127. Monitoring and enforcing compliance with housing goals.
Sec. 128. Affordable housing fund.
Sec. 129. Consistency with mission.
Sec. 130. Enforcement.
Sec. 131. Conforming amendments.
Subtitle C--Prompt Corrective Action
Sec. 141. Capital classifications.
Sec. 142. Supervisory actions applicable to undercapitalized regulated
entities.
Sec. 143. Supervisory actions applicable to significantly
undercapitalized regulated entities.
Sec. 144. Authority over critically undercapitalized regulated
entities.
Sec. 145. Conforming amendments.
Subtitle D--Enforcement Actions
Sec. 161. Cease-and-desist proceedings.
Sec. 162. Temporary cease-and-desist proceedings.
Sec. 163. Prejudgment attachment.
Sec. 164. Enforcement and jurisdiction.
Sec. 165. Civil money penalties.
Sec. 166. Removal and prohibition authority.
Sec. 167. Criminal penalty.
Sec. 168. Subpoena authority.
Sec. 169. Conforming amendments.
Subtitle E--General Provisions
Sec. 181. Boards of enterprises.
Sec. 182. Report on portfolio operations, safety and soundness, and
mission of enterprises.
Sec. 183. Conforming and technical amendments.
Sec. 184. Study of alternative secondary market systems.
Sec. 185. Effective date.
TITLE II--FEDERAL HOME LOAN BANKS
Sec. 201. Definitions.
Sec. 202. Directors.
Sec. 203. Federal Housing Finance Agency oversight of Federal Home Loan
Banks.
Sec. 204. Joint activities of banks.
Sec. 205. Sharing of information between Federal Home Loan Banks.
Sec. 206. Reorganization of banks and voluntary merger.
Sec. 207. Securities and Exchange Commission disclosure.
Sec. 208. Community financial institution members.
Sec. 209. Technical and conforming amendments.
Sec. 210. Study of affordable housing program use for long-term care
facilities.
Sec. 211. Effective date.
TITLE III--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY OF OFFICE OF
FEDERAL HOUSING ENTERPRISE OVERSIGHT, FEDERAL HOUSING FINANCE BOARD,
AND DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Subtitle A--Office of Federal Housing Enterprise Oversight
Sec. 301. Abolishment of OFHEO.
Sec. 302. Continuation and coordination of certain regulations.
Sec. 303. Transfer and rights of employees of OFHEO.
Sec. 304. Transfer of property and facilities.
Subtitle B--Federal Housing Finance Board
Sec. 321. Abolishment of the Federal Housing Finance Board.
Sec. 322. Continuation and coordination of certain regulations.
Sec. 323. Transfer and rights of employees of the Federal Housing
Finance Board.
Sec. 324. Transfer of property and facilities.
Subtitle C--Department of Housing and Urban Development
Sec. 341. Termination of enterprise-related functions.
Sec. 342. Continuation and coordination of certain regulations.
Sec. 343. Transfer and rights of employees.
Sec. 344. Transfer of appropriations, property, and facilities.
SEC. 2. DEFINITIONS.
Section 1303 of the Housing and Community Development Act of 1992
(12 U.S.C. 4502) is amended--
(1) in paragraph (7), by striking ``an enterprise'' and
inserting ``a regulated entity'';
(2) by striking ``the enterprise'' each place such term
appears (except in paragraphs (4) and (18)) and inserting ``the
regulated entity'';
(3) in paragraph (5), by striking ``Office of Federal
Housing Enterprise Oversight of the Department of Housing and
Urban Development'' and inserting ``Federal Housing Finance
Agency'';
(4) in each of paragraphs (8), (9), (10), and (19), by
striking ``Secretary'' each place that term appears and
inserting ``Director'';
(5) in paragraph (13), by inserting ``, with respect to an
enterprise,'' after ``means'';
(6) by redesignating paragraphs (16) through (19) as
paragraphs (20) through (23), respectively;
(7) by striking paragraphs (14) and (15) and inserting the
following new paragraphs:
``(18) Regulated entity.--The term `regulated entity'
means--
``(A) the Federal National Mortgage Association and
any affiliate thereof;
``(B) the Federal Home Loan Mortgage Corporation
and any affiliate thereof; and
``(C) each Federal home loan bank.
``(19) Regulated entity-affiliated party.--The term
`regulated entity-affiliated party' means--
``(A) any director, officer, employee, or
controlling stockholder of, or agent for, a regulated
entity;
``(B) any shareholder, affiliate, consultant, or
joint venture partner of a regulated entity, and any
other person, as determined by the Director (by
regulation or on a case-by-case basis) that
participates in the conduct of the affairs of a
regulated entity;
``(C) any independent contractor for a regulated
entity (including any attorney, appraiser, or
accountant), if--
``(i) the independent contractor knowingly
or recklessly participates in--
``(I) any violation of any law or
regulation;
``(II) any breach of fiduciary
duty; or
``(III) any unsafe or unsound
practice; and
``(ii) such violation, breach, or practice
caused, or is likely to cause, more than a
minimal financial loss to, or a significant
adverse effect on, the regulated entity; and''.
``(D) any not-for-profit corporation that receives
its principal funding, on an ongoing basis, from any
regulated entity.'';
(8) by redesignating paragraphs (8) through (13) as
paragraphs (12) through (17), respectively; and
(9) by inserting after paragraph (7) the following new
paragraph:
``(11) Federal home loan bank.--The term `Federal home loan
bank' means a bank established under the authority of the
Federal Home Loan Bank Act.'';
(10) by redesignating paragraphs (2) through (7) as
paragraphs (5) through (10), respectively; and
(11) by inserting after paragraph (1) the following new
paragraphs:
``(2) Agency.--The term `Agency' means the Federal Housing
Finance Agency.
``(3) Authorizing statutes.--The term `authorizing
statutes' means--
``(A) the Federal National Mortgage Association
Charter Act;
``(B) the Federal Home Loan Mortgage Corporation
Act; and
``(C) the Federal Home Loan Bank Act.
``(4) Board.--The term `Board' means the Housing Finance
Oversight Board established under section 1313B.''.
TITLE I--REFORM OF REGULATION OF ENTERPRISES AND FEDERAL HOME LOAN
BANKS
Subtitle A--Improvement of Safety and Soundness
SEC. 101. ESTABLISHMENT OF THE FEDERAL HOUSING FINANCE AGENCY.
(a) In General.--The Housing and Community Development Act of 1992
(12 U.S.C. 4501 et seq.) is amended by striking sections 1311 and 1312
and inserting the following:
``SEC. 1311. ESTABLISHMENT OF THE FEDERAL HOUSING FINANCE AGENCY.
``(a) Establishment.--There is established the Federal Housing
Finance Agency, which shall be an independent agency of the Federal
Government.
``(b) General Supervisory and Regulatory Authority.--
``(1) In general.--Each regulated entity shall, to the
extent provided in this title, be subject to the supervision
and regulation of the Agency.
``(2) Authority over fannie mae, freddie mac, and federal
home loan banks.--The Director of the Federal Housing Finance
Agency shall have general supervisory and regulatory authority
over each regulated entity and shall exercise such general
regulatory authority, including such duties and authorities set
forth under section 1313 of this Act, to ensure that the
purposes of this Act, the authorizing statutes, and any other
applicable law are carried out.
``(c) Savings Provision.--The authority of the Director to take
actions under subtitles B and C shall not in any way limit the general
supervisory and regulatory authority granted to the Director.
``SEC. 1312. DIRECTOR.
``(a) Establishment of Position.--There is established the position
of the Director of the Federal Housing Finance Agency, who shall be the
head of the Agency.
``(b) Appointment; Term.--
``(1) Appointment.--The Director shall be appointed by the
President, by and with the advice and consent of the Senate,
from among individuals who are citizens of the United States,
have a demonstrated understanding of financial management or
oversight, and have a demonstrated understanding of capital
markets, including the mortgage securities markets and housing
finance.
``(2) Term and removal.--The Director shall be appointed
for a term of 5 years and may be removed by the President only
for cause.
``(3) Vacancy.--A vacancy in the position of Director that
occurs before the expiration of the term for which a Director
was appointed shall be filled in the manner established under
paragraph (1), and the Director appointed to fill such vacancy
shall be appointed only for the remainder of such term.
``(4) Service after end of term.--An individual may serve
as the Director after the expiration of the term for which
appointed until a successor has been appointed.
``(5) Transitional provision.--Notwithstanding paragraphs
(1) and (2), the Director of the Office of Federal Housing
Enterprise Oversight of the Department of Housing and Urban
Development shall serve as the Director until a successor has
been appointed under paragraph (1).
``(c) Deputy Director of the Division of Enterprise Regulation.--
``(1) In general.--The Agency shall have a Deputy Director
of the Division of Enterprise Regulation, who shall be
appointed by the Director from among individuals who are
citizens of the United States, have a demonstrated
understanding of financial management or oversight and of
mortgage securities markets and housing finance.
``(2) Functions.--The Deputy Director of the Division of
Enterprise Regulation shall have such functions, powers, and
duties with respect to the oversight of the enterprises as the
Director shall prescribe.
``(d) Deputy Director of the Division of Federal Home Loan Bank
Regulation.--
``(1) In general.--The Agency shall have a Deputy Director
of the Division of Federal Home Loan Bank Regulation, who shall
be appointed by the Director from among individuals who are
citizens of the United States, have a demonstrated
understanding of financial management or oversight and of the
Federal Home Loan Bank System and housing finance.
``(2) Functions.--The Deputy Director of the Division of
Federal Home Loan Bank Regulation shall have such functions,
powers, and duties with respect to the oversight of the Federal
home loan banks as the Director shall prescribe.
``(e) Deputy Director for Housing.--
``(1) In general.--The Agency shall have a Deputy Director
for Housing, who shall be appointed by the Director from among
individuals who are citizens of the United States, and have a
demonstrated understanding of the housing markets and housing
finance.
``(2) Functions.--The Deputy Director for Housing shall
have such functions, powers, and duties with respect to the
oversight of the housing mission and goals of the enterprises,
and with respect to oversight of the housing mission of the
Federal home loan banks, as the Director shall prescribe.
``(f) Limitations.--The Director and each of the Deputy Directors
may not--
``(1) have any direct or indirect financial interest in any
regulated entity or regulated entity-affiliated party;
``(2) hold any office, position, or employment in any
regulated entity or regulated entity-affiliated party; or
``(3) have served as an executive officer or director of
any regulated entity, or regulated entity-affiliated party, at
any time during the 3-year period ending on the date of
appointment of such individual as Director or Deputy Director.
``(g) Ombudsman.--The Director shall establish, by regulation, an
Office of the Ombudsman in the Agency. Such regulations shall provide
that the Ombudsman will consider complaints and appeals from any
regulated entity and any person that has a business relationship with a
regulated entity and shall specify the duties and authority of the
Ombudsman.''.
(b) Appointment of Director.--Notwithstanding any other provision
of law or of this Act, the President may, any time after the date of
the enactment of this Act, appoint an individual to serve as the
Director of the Federal Housing Finance Agency, as such office is
established by the amendment made by subsection (a). This subsection
shall take effect on the date of the enactment of this Act.
SEC. 102. DUTIES AND AUTHORITIES OF DIRECTOR.
(a) In General.--The Housing and Community Development Act of 1992
(12 U.S.C. 4513) is amended by striking section 1313 and inserting the
following new sections:
``SEC. 1313. DUTIES AND AUTHORITIES OF DIRECTOR.
``(a) Duties.--
``(1) Principal duties.--The principal duties of the
Director shall be--
``(A) to oversee the operations of each regulated
entity; and
``(B) to ensure that--
``(i) each regulated entity operates in a
safe and sound manner, including maintenance of
adequate capital and internal controls;
``(ii) the operations and activities of
each regulated entity foster liquid, efficient,
competitive, and resilient national housing
finance markets that minimize the cost of
housing finance (including activities relating
to mortgages on housing for low- and moderate-
income families involving a reasonable economic
return that may be less than the return earned
on other activities);
``(iii) each regulated entity complies with
this title and the rules, regulations,
guidelines, and orders issued under this title
and the authorizing statutes; and
``(iv) each regulated entity carries out
its statutory mission only through activities
that are consistent with this title and the
authorizing statutes.
``(2) Scope of authority.--The authority of the Director
shall include the authority--
``(A) to review and, if warranted based on the
principal duties described in paragraph (1), reject any
acquisition or transfer of a controlling interest in an
enterprise; and
``(B) to exercise such incidental powers as may be
necessary or appropriate to fulfill the duties and
responsibilities of the Director in the supervision and
regulation of each regulated entity.
``(b) Delegation of Authority.--The Director may delegate to
officers or employees of the Agency, including each of the Deputy
Directors, any of the functions, powers, or duties of the Director, as
the Director considers appropriate.
``(c) Litigation Authority.--
``(1) In general.--In enforcing any provision of this
title, any regulation or order prescribed under this title, or
any other provision of law, rule, regulation, or order, or in
any other action, suit, or proceeding to which the Director is
a party or in which the Director is interested, and in the
administration of conservatorships and receiverships, the
Director may act in the Director's own name and through the
Director's own attorneys, or request that the Attorney General
of the United States act on behalf of the Director.
``(2) Consultation with attorney general.--The Director
shall provide notice to, and consult with, the Attorney General
of the United States before taking an action under paragraph
(1) of this subsection or under section 1344(a), 1345(d),
1348(c), 1372(e), 1375(a), 1376(d), or 1379D(c), except that,
if the Director determines that any delay caused by such prior
notice and consultation may adversely affect the safety and
soundness responsibilities of the Director under this title,
the Director shall notify the Attorney General as soon as
reasonably possible after taking such action.
``(3) Subject to suit.--Except as otherwise provided by
law, the Director shall be subject to suit (other than suits on
claims for money damages) by a regulated entity or director or
officer thereof with respect to any matter under this title or
any other applicable provision of law, rule, order, or
regulation under this title, in the United States district
court for the judicial district in which the regulated entity
has its principal place of business, or in the United States
District Court for the District of Columbia, and the Director
may be served with process in the manner prescribed by the
Federal Rules of Civil Procedure.
``SEC. 1313A. PRUDENTIAL MANAGEMENT AND OPERATIONS STANDARDS.
``(a) Standards.--The Director shall establish standards, by
regulation, guideline, or order, for each regulated entity relating
to--
``(1) adequacy of internal controls and information systems
taking into account the nature and scale of business
operations;
``(2) independence and adequacy of internal audit systems;
``(3) management of credit and counterparty risk, including
systems to identify concentrations of credit risk and
prudential limits to restrict exposure of the regulated entity
to a single counterparty or groups of related counterparties;
``(4) management of interest rate risk exposure;
``(5) management of market risk, including standards that
provide for systems that accurately measure, monitor, and
control market risks and, as warranted, that establish
limitations on market risk;
``(6) adequacy and maintenance of liquidity and reserves;
``(7) management of any asset and investment portfolio;
``(8) investments and acquisitions by a regulated entity,
to ensure that they are consistent with the purposes of this
Act and the authorizing statutes;
``(9) maintenance of adequate records, in accordance with
consistent accounting policies and practices that enable the
Director to evaluate the financial condition of the regulated
entity;
``(10) issuance of subordinated debt by that particular
regulated entity, as the Director considers necessary;
``(11) overall risk management processes, including
adequacy of oversight by senior management and the board of
directors and of processes and policies to identify, measure,
monitor, and control material risks, including reputational
risks, and for adequate, well-tested business resumption plans
for all major systems with remote site facilities to protect
against disruptive events; and
``(12) such other operational and management standards as
the Director determines to be appropriate.
``(b) Failure to Meet Standards.--
``(1) Plan requirement.--
``(A) In general.--If the Director determines that
a regulated entity fails to meet any standard
established under subsection (a)--
``(i) if such standard is established by
regulation, the Director shall require the
regulated entity to submit an acceptable plan
to the Director within the time allowed under
subparagraph (C); and
``(ii) if such standard is established by
guideline, the Director may require the
regulated entity to submit a plan described in
clause (i).
``(B) Contents.--Any plan required under
subparagraph (A) shall specify the actions that the
regulated entity will take to correct the deficiency.
If the regulated entity is undercapitalized, the plan
may be a part of the capital restoration plan for the
regulated entity under section 1369C.
``(C) Deadlines for submission and review.--The
Director shall by regulation establish deadlines that--
``(i) provide the regulated entities with
reasonable time to submit plans required under
subparagraph (A), and generally require a
regulated entity to submit a plan not later
than 30 days after the Director determines that
the entity fails to meet any standard
established under subsection (a); and
``(ii) require the Director to act on plans
expeditiously, and generally not later than 30
days after the plan is submitted.
``(2) Required order upon failure to submit or implement
plan.--If a regulated entity fails to submit an acceptable plan
within the time allowed under paragraph (1)(C), or fails in any
material respect to implement a plan accepted by the Director,
the following shall apply:
``(A) Required correction of deficiency.--The
Director shall, by order, require the regulated entity
to correct the deficiency.
``(B) Other authority.--The Director may, by order,
take one or more of the following actions until the
deficiency is corrected:
``(i) Prohibit the regulated entity from
permitting its average total assets (as such
term is defined in section 1316(b)) during any
calendar quarter to exceed its average total
assets during the preceding calendar quarter,
or restrict the rate at which the average total
assets of the entity may increase from one
calendar quarter to another.
``(ii) Require the regulated entity--
``(I) in the case of an enterprise,
to increase its ratio of core capital
to assets.
``(II) in the case of a Federal
home loan bank, to increase its ratio
of total capital (as such term is
defined in section 6(a)(5) of the
Federal Home Loan Bank Act (12 U.S.C.
1426(a)(5)) to assets.
``(iii) Require the regulated entity to
take any other action that the Director
determines will better carry out the purposes
of this section than any of the actions
described in this subparagraph.
``(3) Mandatory restrictions.--In complying with paragraph
(2), the Director shall take one or more of the actions
described in clauses (i) through (iii) of paragraph (2)(B) if--
``(A) the Director determines that the regulated
entity fails to meet any standard prescribed under
subsection (a);
``(B) the regulated entity has not corrected the
deficiency; and
``(C) during the 18-month period before the date on
which the regulated entity first failed to meet the
standard, the entity underwent extraordinary growth, as
defined by the Director.
``(c) Other Enforcement Authority not Affected.--The authority of
the Director under this section is in addition to any other authority
of the Director.''.
(b) Independence in Congressional Testimony and Recommendations.--
Section 111 of Public Law 93-495 (12 U.S.C. 250) is amended by striking
``the Federal Housing Finance Board'' and inserting ``the Director of
the Federal Housing Finance Agency''.
SEC. 103. HOUSING FINANCE OVERSIGHT BOARD.
(a) In General.--Title XIII of the Housing and Community
Development Act of 1992 (12 U.S.C. 4501 et seq.) is amended by
inserting after section 1313A, as added by section 102 of this Act, the
following new section:
``SEC. 1313B. HOUSING FINANCE OVERSIGHT BOARD.
``(a) In General.--There is established the Housing Finance
Oversight Board.
``(b) Duties.--
``(1) In general.--The Board shall advise the Director with
respect to overall strategies and policies in carrying out the
duties of the Director under this title, at the request of the
Director and at the initiative of the Board, and shall carry
out such functions as otherwise provided by law.
``(2) Limitation.--The Director may not delegate to the
Board any of the functions, powers, or duties of the Director.
``(c) Composition.--The Board shall be comprised of 5 members, as
follows:
``(1) One member shall be the Director, who shall serve as
the Chairperson of the Board.
``(2) One member shall be the Secretary of the Treasury or
the designee of the Secretary.
``(3) One member shall be the Secretary of Housing and
Urban Development or the designee of the Secretary.
``(4) Two members shall be appointed by the President, by
and with the advice and consent of the Senate, who shall
include--
``(A) one individual who has extensive experience
and expertise in the capital markets (including debt
markets), the secondary mortgage market, and mortgage-
backed securities; and
``(B) one individual who has extensive experience
and expertise in mortgage finance (including single
family and multifamily housing mortgage finance),
development of affordable housing, and economic
development and revitalization.
``(d) Terms and Vacancies.--
``(1) Terms.--Each member of the Board pursuant to
paragraph (4) shall be appointed for a term of 3 years, and may
be removed by the President only for cause.
``(2) Vacancies.--A member of the Board appointed to fill a
vacancy occurring before the expiration of the term for which
the member's predecessor was appointed shall be appointed only
for the remainder of that term. A member of the Board may serve
after the expiration of the member's term until a successor has
been appointed.
``(e) Prohibition of Additional Compensation.--Notwithstanding any
other provision of law, members of Board pursuant to paragraphs (1),
(2), and (3) shall not receive additional compensation by reason of
service on the Board.
``(f) Limitations.--Each member of the Board may not--
``(1) have any direct or indirect financial interest in any
regulated entity or regulated entity-affiliated party; or
``(2) hold any office, position, or employment in any
regulated entity or regulated entity-affiliated party.
``(g) Full-Time Members and Staff.--
``(1) Full-time members.--The members of the Board pursuant
to subsection (c)(4) shall serve on a full-time basis.
``(2) Staff.--The staff of the Board shall be appointed
subject to the provisions of title 5, United States Code,
governing appointments in the competitive service, and shall be
paid in accordance with the provisions of chapter 51 and
subchapter III of chapter 53 of that title relating to
classification and General Schedule pay rates, except that each
member of the Board pursuant to paragraph (4) may appoint one
staff member without regard to the such provisions governing
appointments in the competitive service and such staff members
may be paid by the Board without regard to the such provisions
relating to classification and General Schedule pay rates.
``(h) Meetings.--
``(1) In general.--The Board shall meet upon notice by the
Director, but in no event shall the Board meet less frequently
than once every 3 months.
``(2) Special meetings.--Any member of the Board may, upon
giving written notice to the Director, require a special
meeting of the Board, which shall be convened by the Director
within 30 days after such notice.
``(i) Testimony.--On an annual basis, the Board shall testify
before Congress regarding--
``(1) the safety and soundness of the regulated entities;
``(2) any material deficiencies in the conduct of the
operations of the regulated entities;
``(3) the overall operational status of the regulated
entities;
``(4) an evaluation of the performance of the regulated
entities in carrying out their respective missions;
``(5) operations, resources, and performance of the Agency
and the Board; and
``(6) such other matters relating to the Agency, the Board,
and the regulated entities, and their fulfillment of their
missions, as the Board determines appropriate.
``(j) Costs.--Costs of the Board, including staff, shall be paid by
the Agency as a cost and expense of the Agency.''.
(b) Annual Report of the Director.--Section 1319B(a) of the Housing
and Community Development Act of 1992 (12 U.S.C. 4521 (a)) is amended--
(1) in paragraph (3), by striking ``and'' at the end; and
(2) by striking paragraph (4) and inserting the following
new paragraphs:
``(4) an assessment of the Board with respect to--
``(A) the safety and soundness of the regulated
entities;
``(B) any material deficiencies in the conduct of
the operations of the regulated entities;
``(C) the overall operational status of the
regulated entities;
``(D) an evaluation of the performance of the
regulated entities in carrying out their missions,
including compliance of the enterprises with the
housing goals under subpart B of part 2 of this
subtitle and compliance of the Federal home loan banks
with the community investment and affordable housing
programs under subsections (i) and (j) of section 10 of
the Federal Home Loan Bank Act;
``(E) an evaluation of the performance of the
Agency in fulfilling its duties and responsibilities
under law; and
``(F) such other matters relating to the Board and
the fulfillment of its duties as the Board considers
appropriate;
``(5) operations, resources, and performance of the Agency;
and
``(6) such other matters relating to the Agency and its
fulfillment of its mission.''.
SEC. 104. AUTHORITY TO REQUIRE REPORTS BY REGULATED ENTITIES.
Section 1314 of the Housing and Community Development Act of 1992
(12 U.S.C. 4514) is amended--
(1) in the section heading, by striking ``enterprises'' and
inserting ``regulated entities'';
(2) in subsection (a)--
(A) in the subsection heading, by striking
``Special Reports and Reports of Financial Condition''
and inserting ``Regular and Special Reports'';
(B) in paragraph (1)--
(i) in the paragraph heading, by striking
``Financial condition'' and inserting ``Regular
reports''; and
(ii) by striking ``reports of financial
condition and operations'' and inserting
``regular reports on the condition (including
financial condition), management, activities,
or operations of the regulated entity, as the
Director considers appropriate''; and
(C) in paragraph (2), after ``submit special
reports'' insert ``on any of the topics specified in
paragraph (1) or such other topics''; and
(3) by adding at the end the following new subsection:
``(c) Reports of Fraudulent Financial Transactions.--
``(1) Requirement to report.--The Director shall require a
regulated entity to submit to the Director a timely report upon
discovery by the regulated entity that it has purchased or sold
a fraudulent loan or financial instrument or suspects a
possible fraud relating to a purchase or sale of any loan or
financial instrument. The Director shall require the regulated
entities to establish and maintain procedures designed to
discover any such transactions.
``(2) Protection from liability for reports.--
``(A) In general.--If a regulated entity makes a
report pursuant to paragraph (1), or a regulated
entity-affiliated party makes, or requires another to
make, such a report, and such report is made in a good
faith effort to comply with the requirements of
paragraph (1), such regulated entity or regulated
entity-affiliated party shall not be liable to any
person under any law or regulation of the United
States, any constitution, law, or regulation of any
State or political subdivision of any State, or under
any contract or other legally enforceable agreement
(including any arbitration agreement), for such report
or for any failure to provide notice of such report to
the person who is the subject of such report or any
other person identified in the report.
``(B) Rule of construction.--Subparagraph (A) shall
not be construed as creating--
``(i) any inference that the term `person',
as used in such subparagraph, may be construed
more broadly than its ordinary usage so as to
include any government or agency of government;
or
``(ii) any immunity against, or otherwise
affecting, any civil or criminal action brought
by any government or agency of government to
enforce any constitution, law, or regulation of
such government or agency.''.
SEC. 105. DISCLOSURE OF CHARITABLE CONTRIBUTIONS BY ENTERPRISES.
Section 1314 of the Housing and Community Development Act of 1992
(12 U.S.C. 4514), as amended by the preceding provisions of this Act,
is further amended by adding at the end the following new subsection:
``(d) Disclosure of Charitable Contributions by Enterprises.--
``(1) Required disclosure.--The Director shall, by
regulation, require each enterprise to submit a report
annually, in a format designated by the Director, containing
the following information:
``(A) Total value.--The total value of
contributions made by the enterprise to nonprofit
organizations during its previous fiscal year.
``(B) Substantial contributions.--If the value of
contributions made by the enterprise to any nonprofit
organization during its previous fiscal year exceeds
the designated amount, the name of that organization
and the value of contributions.
``(C) Substantial contributions to insider-
affiliated charities.--Identification of each
contribution whose value exceeds the designated amount
that were made by the enterprise during the
enterprise's previous fiscal year to any nonprofit
organization of which a director, officer, or
controlling person of the enterprise, or a spouse
thereof, was a director or trustee, the name of such
nonprofit organization, and the value of the
contribution.
``(2) Definitions.--For purposes of this subsection--
``(A) the term `designated amount' means such
amount as may be designated by the Director by
regulation, consistent with the public interest and the
protection of investors for purposes of this
subsection; and
``(B) the Director may, by such regulations as the
Director deems necessary or appropriate in the public
interest, define the terms officer and controlling
person.
``(3) Public availability.--The Director shall make the
information submitted pursuant to this subsection publicly
available.''.
SEC. 106. ASSESSMENTS.
Section 1316 of the Housing and Community Development Act of 1992
(12 U.S.C. 4516) is amended--
(1) by striking subsection (a) and inserting the following
new subsection:
``(a) Annual Assessments.--The Director shall establish and collect
from the regulated entities annual assessments in an amount not
exceeding the amount sufficient to provide for reasonable costs and
expenses of the Agency, including--
``(1) the expenses of any examinations under section 1317
of this Act and under section 20 of the Federal Home Loan Bank
Act;
``(2) the expenses of obtaining any reviews and credit
assessments under section 1319; and
``(3) such amounts in excess of actual expenses for any
given year as deemed necessary by the Director to maintain a
working capital fund in accordance with subsection (e).'';
(2) in subsection (b)--
(A) in the subsection heading, by striking
``Enterprises'' and inserting ``Regulated Entities'' ;
(B) by realigning paragraph (2) two ems from the
left margin, so as to align the left margin of such
paragraph with the left margins of paragraph (1);
(C) in paragraph (1)--
(i) by striking ``Each enterprise'' and
inserting ``Each regulated entity'';
(ii) by striking ``each enterprise'' and
inserting ``each regulated entity''; and
(iii) by striking ``both enterprises'' and
inserting ``all of the regulated entities'';
and
(D) in paragraph (3)--
(i) in subparagraph (B), by striking
``subparagraph (A)'' and inserting ``clause
(i)'';
(ii) by redesignating subparagraphs (A),
(B), and (C) as clauses (i), (ii) and (ii),
respectively, and realigning such clauses, as
so redesignated, so as to be indented 6 ems
from the left margin;
(iii) by striking the matter that precedes
clause (i), as so redesignated, and inserting
the following:
``(3) Definition of total assets.--For purposes of this
section, the term `total assets' means as follows:
``(A) Enterprises.--With respect to an enterprise,
the sum of--''; and
(iv) by adding at the end the following new
subparagraph:
``(B) Federal home loan banks.--With respect to a
Federal home loan bank, the total assets of the Bank,
as determined by the Director in accordance with
generally accepted accounting principles.'';
(3) by striking subsection (c) and inserting the following
new subsection:
``(c) Increased Costs of Regulation.--
``(1) Increase for inadequate capitalization.--The
semiannual payments made pursuant to subsection (b) by any
regulated entity that is not classified (for purposes of
subtitle B) as adequately capitalized may be increased, as
necessary, in the discretion of the Director to pay additional
estimated costs of regulation of the regulated entity.
``(2) Adjustment for enforcement activities.--The Director
may adjust the amounts of any semiannual assessments for an
assessment under subsection (a) that are to be paid pursuant to
subsection (b) by a regulated entity, as necessary in the
discretion of the Director, to ensure that the costs of
enforcement activities under subtitle B and C for a regulated
entity are borne only by such regulated entity.
``(3) Additional assessment for deficiencies.--If at any
time, as a result of increased costs of regulation of a
regulated entity that is not classified (for purposes of
subtitle B) as adequately capitalized or as the result of
supervisory or enforcement activities under subtitle B or C for
a regulated entity, the amount available from any semiannual
payment made by such regulated entity pursuant to subsection
(b) is insufficient to cover the costs of the Agency with
respect to such entity, the Director may make and collect from
such regulated entity an immediate assessment to cover the
amount of such deficiency for the semiannual period. If, at the
end of any semiannual period during which such an assessment is
made, any amount remains from such assessment, such remaining
amount shall be deducted from the assessment for such regulated
entity for the following semiannual period.'';
(4) in subsection (d), by striking ``If'' and inserting
``Except with respect to amounts collected pursuant to
subsection (a)(3), if''; and
(5) by striking subsections (e) through (g) and inserting
the following new subsections:
``(e) Working Capital Fund.--At the end of each year for which an
assessment under this section is made, the Director shall remit to each
regulated entity any amount of assessment collected from such regulated
entity that is attributable to subsection (a)(3) and is in excess of
the amount the Director deems necessary to maintain a working capital
fund.
``(f) Treatment of Assessments.--
``(1) Deposit.--Amounts received by the Director from
assessments under this section may be deposited by the Director
in the manner provided in section 5234 of the Revised Statutes
(12 U.S.C. 192) for monies deposited by the Comptroller of the
Currency.
``(2) Not government funds.--The amounts received by the
Director from any assessment under this section shall not be
construed to be Government or public funds or appropriated
money.
``(3) No apportionment of funds.--Notwithstanding any other
provision of law, the amounts received by the Director from any
assessment under this section shall not be subject to
apportionment for the purpose of chapter 15 of title 31, United
States Code, or under any other authority.
``(4) Use of funds.--The Director may use any amounts
received by the Director from assessments under this section
for compensation of the Director and other employees of the
Agency and for all other expenses of the Director and the
Agency.
``(5) Availability of oversight fund amounts.--
Notwithstanding any other provision of law, any amounts
remaining in the Federal Housing Enterprises Oversight Fund
established under this section (as in effect before the
effective date under section 185 of the Federal Housing Finance
Reform Act of 2005), and any amounts remaining from assessments
on the Federal Home Loan banks pursuant to section 18(b) of the
Federal Home Loan Bank Act (12 U.S.C. 1438(b)), shall, upon
such effective date, be treated for purposes of this subsection
as amounts received from assessments under this section.
``(g) Budget and Financial Management.--
``(1) Financial operating plans and forecasts.--The
Director shall provide to the Director of the Office of
Management and Budget copies of the Director's financial
operating plans and forecasts as prepared by the Director in
the ordinary course of the Agency's operations, and copies of
the quarterly reports of the Agency's financial condition and
results of operations as prepared by the Director in the
ordinary course of the Agency's operations.
``(2) Financial statements.--The Agency shall prepare
annually a statement of assets and liabilities and surplus or
deficit; a statement of income and expenses; and a statement of
sources and application of funds.
``(3) Financial management systems.--The Agency shall
implement and maintain financial management systems that comply
substantially with Federal financial management systems
requirements, applicable Federal accounting standards, and that
uses a general ledger system that accounts for activity at the
transaction level.
``(4) Assertion of internal controls.--The Director shall
provide to the Comptroller General an assertion as to the
effectiveness of the internal controls that apply to financial
reporting by the Agency, using the standards established in
section 3512 (c) of title 31, United States Code.
``(5) Rule of construction.--This subsection may not be
construed as implying any obligation on the part of the
Director to consult with or obtain the consent or approval of
the Director of the Office of Management and Budget with
respect to any reports, plans, forecasts, or other information
referred to in paragraph (1) or any jurisdiction or oversight
over the affairs or operations of the Agency.
``(h) Audit of Agency.--
``(1) In general.--The Comptroller General shall annually
audit the financial transactions of the Agency in accordance
with the U.S. generally accepted government auditing standards
as may be prescribed by the Comptroller General of the United
States. The audit shall be conducted at the place or places
where accounts of the Agency are normally kept. The
representatives of the Government Accountability Office shall
have access to the personnel and to all books, accounts,
documents, papers, records (including electronic records),
reports, files, and all other papers, automated data, things,
or property belonging to or under the control of or used or
employed by the Agency pertaining to its financial transactions
and necessary to facilitate the audit, and such representatives
shall be afforded full facilities for verifying transactions
with the balances or securities held by depositaries, fiscal
agents, and custodians. All such books, accounts, documents,
records, reports, files, papers, and property of the Agency
shall remain in possession and custody of the Agency. The
Comptroller General may obtain and duplicate any such books,
accounts, documents, records, working papers, automated data
and files, or other information relevant to such audit without
cost to the Comptroller General and the Comptroller General's
right of access to such information shall be enforceable
pursuant to section 716(c) of title 31, United States Code.
``(2) Report.--The Comptroller General shall submit to the
Congress a report of each annual audit conducted under this
subsection. The report to the Congress shall set forth the
scope of the audit and shall include the statement of assets
and liabilities and surplus or deficit, the statement of income
and expenses, the statement of sources and application of
funds, and such comments and information as may be deemed
necessary to inform Congress of the financial operations and
condition of the Agency, together with such recommendations
with respect thereto as the Comptroller General may deem
advisable. A copy of each report shall be furnished to the
President and to the Agency at the time submitted to the
Congress.
``(3) Assistance and costs.--For the purpose of conducting
an audit under this subsection, the Comptroller General may, in
the discretion of the Comptroller General, employ by contract,
without regard to section 5 of title 41, United States Code,
professional services of firms and organizations of certified
public accountants for temporary periods or for special
purposes. Upon the request of the Comptroller General, the
Director of the Agency shall transfer to the Government
Accountability Office from funds available, the amount
requested by the Comptroller General to cover the full costs of
any audit and report conducted by the Comptroller General. The
Comptroller General shall credit funds transferred to the
account established for salaries and expenses of the Government
Accountability Office, and such amount shall be available upon
receipt and without fiscal year limitation to cover the full
costs of the audit and report.''.
SEC. 107. EXAMINERS AND ACCOUNTANTS.
(a) Examinations.--Section 1317 of the Housing and Community
Development Act of 1992 (12 U.S.C. 4517) is amended--
(1) in subsection (a), by adding after the period at the
end the following: ``Each examination under this subsection of
a regulated entity shall include a review of the procedures
required to be established and maintained by the regulated
entity pursuant to section 1314(c) (relating to fraudulent
financial transactions) and the report regarding each such
examination shall describe any problems with such procedures
maintained by the regulated entity.'';
(2) in subsection (b)--
(A) by inserting ``of a regulated entity'' after
``under this section''; and
(B) by striking ``to determine the condition of an
enterprise for the purpose of ensuring its financial
safety and soundness'' and inserting ``or
appropriate''; and
(3) in subsection (c)--
(A) in the second sentence, by inserting ``to
conduct examinations under this section'' before the
period; and
(B) in the third sentence, by striking ``from
amounts available in the Federal Housing Enterprises
Oversight Fund''.
(b) Enhanced Authority to Hire Examiners and Accountants.--Section
1317 of the Housing and Community Development Act of 1992 (12 U.S.C.
4517) is amended by adding at the end the following new subsection:
``(g) Appointment of Accountants, Economists, Specialists, and
Examiners.--
``(1) Applicability.--This section applies with respect to
any position of examiner, accountant, specialist in financial
markets, specialist in technology, and economist at the Agency,
with respect to supervision and regulation of the regulated
entities, that is in the competitive service.
``(2) Appointment authority.--The Director may appoint
candidates to any position described in paragraph (1)--
``(A) in accordance with the statutes, rules, and
regulations governing appointments in the excepted
service; and
``(B) notwithstanding any statutes, rules, and
regulations governing appointments in the competitive
service.''.
(c) Repeal.--Section 20 of the Federal Home Loan Bank Act (12
U.S.C. 1440) is amended--
(1) in the section heading, by striking ``reports'' and
inserting ``gao audits'';
(2) in the third sentence, by striking ``the Board and''
each place such term appears; and
(3) by striking the first two sentences and inserting the
following: ``The Federal home loan banks shall be subject to
examinations by the Director to the extent provided in section
1317 of the Federal Housing Enterprises Financial Safety and
Soundness Act of 1992 (12 U.S.C. 4517).''.
SEC. 108. PROHIBITION AND WITHHOLDING OF EXECUTIVE COMPENSATION.
(a) In General.--Section 1318 of the Housing and Community
Development Act of 1992 (12 U.S.C. 4518) is amended--
(1) in the section heading, by striking ``of excessive''
and inserting ``and withholding of executive'';
(2) by redesignating subsection (b) as subsection (d); and
(3) by inserting after subsection (a) the following new
subsections:
``(b) Factors.--In making any determination under subsection (a),
the Director may take into consideration any factors the Director
considers relevant, including any wrongdoing on the part of the
executive officer, and such wrongdoing shall include any fraudulent act
or omission, breach of trust or fiduciary duty, violation of law, rule,
regulation, order, or written agreement, and insider abuse with respect
to the regulated entity. The approval of an agreement or contract
pursuant to section 309(d)(3)(B) of the Federal National Mortgage
Association Charter Act (12 U.S.C. 1723a(d)(3)(B)) or section 303(h)(2)
of the Federal Home Loan Mortgage Corporation Act (12 U.S.C.
1452(h)(2)) shall not preclude the Director from making any subsequent
determination under subsection (a).
``(c) Withholding of Compensation.--In carrying out subsection (a),
the Director may require a regulated entity to withhold any payment,
transfer, or disbursement of compensation to an executive officer, or
to place such compensation in an escrow account, during the review of
the reasonableness and comparability of compensation.''.
(b) Conforming Amendments.--
(1) Fannie mae.--Section 309(d) of the Federal National
Mortgage Association Charter Act (12 U.S.C. 1723a(d)) is
amended by adding at the end the following new paragraph:
``(4) Notwithstanding any other provision of this section, the
corporation shall not transfer, disburse, or pay compensation to any
executive officer, or enter into an agreement with such executive
officer, without the approval of the Director, for matters being
reviewed under section 1318 of the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4518).''.
(2) Freddie mac.--Section 303(h) of the Federal Home Loan
Mortgage Corporation Act (12 U.S.C. 1452(h)) is amended by
adding at the end the following new paragraph:
``(4) Notwithstanding any other provision of this section, the
Corporation shall not transfer, disburse, or pay compensation to any
executive officer, or enter into an agreement with such executive
officer, without the approval of the Director, for matters being
reviewed under section 1318 of the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4518).''.
(3) Federal home loan banks.--Section 7 of the Federal Home
Loan Bank Act (12 U.S.C. 1427) is amended by adding at the end
the following new subsection:
``(l) Withholding of Compensation.--Notwithstanding any other
provision of this section, a Federal home loan bank shall not transfer,
disburse, or pay compensation to any executive officer, or enter into
an agreement with such executive officer, without the approval of the
Director, for matters being reviewed under section 1318 of the Federal
Housing Enterprises Financial Safety and Soundness Act of 1992 (12
U.S.C. 4518).''.
SEC. 109. REVIEWS OF REGULATED ENTITIES.
Section 1319 of the Housing and Community Development Act of 1992
(12 U.S.C. 4519) is amended--
(1) by striking the section designation and heading and
inserting the following:
``SEC. 1319. REVIEWS OF REGULATED ENTITIES.'';
and
(2) by inserting after ``any entity'' the following: ``that
the Director considers appropriate, including an entity''.
SEC. 110. REGULATIONS AND ORDERS.
Section 1319G of the Housing and Community Development Act of 1992
(12 U.S.C. 4526) is amended--
(1) by striking subsection (a) and inserting the following
new subsection:
``(a) Authority.--The Director shall issue any regulations,
guidelines, and orders necessary to carry out the duties of the
Director under this title and each of the authorizing statutes to
ensure that the purposes of this title and such Acts are
accomplished.'';
(2) in subsection (b), by inserting ``, this title, or any
of the authorizing statutes'' after ``under this section''; and
(3) by striking subsection (c).
SEC. 111. RISK-BASED CAPITAL REQUIREMENTS.
(a) In General.--Section 1361 of the Housing and Community
Development Act of 1992 (12 U.S.C. 4611) is amended to read as follows:
``SEC. 1361. RISK-BASED CAPITAL LEVELS FOR REGULATED ENTITIES.
``(a) In General.--
``(1) Enterprises.--The Director shall, by regulation,
establish risk-based capital requirements for the enterprises
to ensure that the enterprises operate in a safe and sound
manner, maintaining sufficient capital and reserves to support
the risks that arise in the operations and management of the
enterprises.
``(2) Federal home loan banks.--The Director shall
establish risk-based capital standards under section 6 of the
Federal Home Loan Bank Act for the Federal home loan banks.
``(b) Confidentiality of Information.--Any person that receives any
book, record, or information from the Director or a regulated entity to
enable the risk-based capital requirements established under this
section to be applied shall--
``(1) maintain the confidentiality of the book, record, or
information in a manner that is generally consistent with the
level of confidentiality established for the material by the
Director or the regulated entity; and
``(2) be exempt from section 552 of title 5, United States
Code, with respect to the book, record, or information.
``(c) No Limitation.--Nothing in this section shall limit the
authority of the Director to require other reports or undertakings, or
take other action, in furtherance of the responsibilities of the
Director under this Act.''.
(b) Federal Home Loan Banks Risk-Based Capital.--Section 6(a)(3) of
the Federal Home Loan Bank Act (12 U.S.C. 1426(a)(3)) is amended--
(1) by striking subparagraph (A) and inserting the
following new subparagraph:
``(A) Risk-based capital standards.--The Director
shall, by regulation, establish risk-based capital
standards for the Federal home loan banks to ensure
that the Federal home loan banks operate in a safe and
sound manner, with sufficient permanent capital and
reserves to support the risks that arise in the
operations and management of the Federal home loans
banks.''; and
(2) in subparagraph (B), by striking ``(A)(ii)'' and
inserting ``(A)''.
SEC. 112. MINIMUM AND CRITICAL CAPITAL LEVELS.
(a) Minimum Capital Level.--Section 1362 of the Housing and
Community Development Act of 1992 (12 U.S.C. 4612) is amended--
(1) in subsection (a), by striking ``In General'' and
inserting ``Enterprises''; and
(2) by striking subsection (b) and inserting the following
new subsections:
``(b) Federal Home Loan Banks.--For purposes of this subtitle, the
minimum capital level for each Federal home loan bank shall be the
minimum capital required to be maintained to comply with the leverage
requirement for the bank established under section 6(a)(2) of the
Federal Home Loan Bank Act (12 U.S.C. 1426(a)(2)).
``(c) Establishment of Revised Minimum Capital Levels.--
Notwithstanding subsections (a) and (b) and notwithstanding the capital
classifications of the regulated entities, the Director may, by
regulations issued under section 1319G(b), establish a minimum capital
level for the enterprises, for the Federal home loan banks, or for both
the enterprises and the banks, that is higher than the level specified
in subsection (a) for the enterprises or the level specified in
subsection (b) for the Federal home loan banks, to the extent needed to
ensure that the regulated entities operate in a safe and sound manner.
``(d) Authority to Require Temporary Increase.--Notwithstanding
subsections (a) and (b) and any minimum capital level established
pursuant to subsection (c), the Director may, by order, increase the
minimum capital level for a regulated entity for such period as the
Director may provide if the Director--
``(1) makes any of the determinations specified in
subparagraphs (A) through (C) of section 1364(c)(1); or
``(2) determines that the regulated entity has violated any
of the prudential management and operations standards
established pursuant to section 1313A and, as a result of such
violation, is operating in an unsafe and unsound manner.
``(e) Authority to Establish Additional Capital and Reserve
Requirements for Particular Programs.--The Director may, at any time by
order or regulation, establish such capital or reserve requirements
with respect to any program or activity of a regulated entity as the
Director considers appropriate to ensure that the regulated entity
operates in a safe and sound manner, with sufficient capital and
reserves to support the risks that arise in the operations and
management of the regulated entity.
``(f) Periodic Review.--The Director shall periodically review the
amount of core capital maintained by the enterprises, the amount of
capital retained by the Federal home loan banks, and the minimum
capital levels established for such regulated entities pursuant to this
section. The Director may, by regulations issued under section
1319G(b), adjust the minimum capital levels as necessary, based on the
Director's review.''.
(b) Critical Capital Levels.--
(1) In general.--Section 1363 of the Housing and Community
Development Act of 1992 (12 U.S.C. 4613) is amended--
(A) by striking ``For'' and inserting ``(a)
Enterprises.--For''; and
(B) 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
difference in operations between the banks and the
enterprises.''.
(2) Regulations.--Not later than the expiration of the 180-
day period beginning on the effective date under section 185,
the Director of the Federal Housing Finance Agency shall issue
regulations pursuant to section 1363(b) of the Housing and
Community Development Act of 1992 (as added by paragraph (1) of
this subsection) establishing the critical capital level under
such section.
SEC. 113. REVIEW OF AND AUTHORITY OVER ENTERPRISE ASSETS AND
LIABILITIES.
Subtitle B of title XIII of the Housing and Community Development
Act of 1992 (12 U.S.C. 4611 et seq.) is amended--
(1) by striking the subtitle designation and heading and
inserting the following:
``Subtitle B--Required Capital Levels for Regulated Entities, Special
Enforcement Powers, and Reviews of Assets and Liabilities'';
and
(2) by adding at the end the following new section:
``SEC. 1369E. REVIEWS OF ENTERPRISE ASSETS AND LIABILITIES.
``(a) In General.--The Director shall conduct, on a periodic basis,
a review of the on-balance sheet and off-balance sheet assets and
liabilities of each enterprise.
``(b) Authority to Require Disposition or Acquisition.--Pursuant to
such a review and notwithstanding the capital classifications of the
enterprises, the Director may by order require an enterprise, under
such terms and conditions as the Director determines to be appropriate,
to dispose of or acquire any asset or liability, if the Director
determines that such action is consistent with the safe and sound
operation of the enterprise or with the purposes of this Act or any of
the authorizing statutes.''.
SEC. 114. CORPORATE GOVERNANCE OF ENTERPRISES.
The Housing and Community Development Act of 1992 is amended by
inserting before section 1323 (12 U.S.C. 4543) the following new
section:
``SEC. 1322A. CORPORATE GOVERNANCE OF ENTERPRISES.
``(a) Board of Directors.--
``(1) Independence.--A majority of seated members of the
board of directors of each enterprise shall be independent
board members, as defined under rules set forth by the New York
Stock Exchange, as such rules may be amended from time to time.
``(2) Frequency of meetings.--To carry out its obligations
and duties under applicable laws, rules, regulations, and
guidelines, the board of directors of an enterprise shall meet
at least eight times a year and not less than once a calendar
quarter.
``(3) Non-management board member meetings.--The non-
management directors of an enterprise shall meet at regularly
scheduled executive sessions without management participation.
``(4) Quorum; prohibition on proxies.--For the transaction
of business, a quorum of the board of directors of an
enterprise shall be at least a majority of the seated board of
directors and a board member may not vote by proxy.
``(5) Information.--The management of an enterprise shall
provide a board member of the enterprise with such adequate and
appropriate information that a reasonable board member would
find important to the fulfillment of his or her fiduciary
duties and obligations.
``(6) Annual review.--At least annually, the board of
directors of each enterprise shall review, with appropriate
professional assistance, the requirements of laws, rules,
regulations, and guidelines that are applicable to its
activities and duties.
``(b) Committees of Boards of Directors.--
``(1) Frequency of meetings.--Any committee of the board of
directors of an enterprise shall meet with sufficient frequency
to carry out its obligations and duties under applicable laws,
rules, regulations, and guidelines.
``(2) Required committees.--Each enterprise shall provide
for the establishment, however styled, of the following
committees of the board of directors:
``(A) Audit committee.
``(B) Compensation committee.
``(C) Nominating/corporate governance committee.
Such committees shall be in compliance with the charter,
independence, composition, expertise, duties, responsibilities,
and other requirements set forth under section 10A(m) of the
Securities Exchange Act of 1934 (15 U.S.C. 78j-1(m)), with
respect to the audit committee, and under rules issued by the
New York Stock Exchange, as such rules may be amended from time
to time.
``(c) Compensation.--
``(1) In general.--The compensation of board members,
executive officers, and employees of an enterprise--
``(A) shall not be in excess of that which is
reasonable and appropriate;
``(B) shall be commensurate with the duties and
responsibilities of such persons;
``(C) shall be consistent with the long-term goals
of the enterprise;
``(D) shall not focus solely on earnings
performance, but shall take into account risk
management, operational stability and legal and
regulatory compliance as well; and
``(E) shall be undertaken in a manner that complies
with applicable laws, rules, and regulations.
``(2) Reimbursement.--If an enterprise is required to
prepare an accounting restatement due to the material
noncompliance of the enterprise, as a result of misconduct,
with any financial reporting requirement under the securities
laws, the chief executive officer and chief financial officer
of the enterprise shall reimburse the enterprise as provided
under section 304 of the Sarbanes-Oxley Act of 2002 (15 U.S.C.
7243). This provision does not otherwise limit the authority of
the Agency to employ remedies available to it under its
enforcement authorities.
``(d) Code of Conduct and Ethics.--
``(1) In general.--An enterprise shall establish and
administer a written code of conduct and ethics that is
reasonably designed to assure the ability of board members,
executive officers, and employees of the enterprise to
discharge their duties and responsibilities, on behalf of the
enterprise, in an objective and impartial manner, and that
includes standards required under section 406 of the Sarbanes-
Oxley Act of 2002 (15 U.S.C. 7264) and other applicable laws,
rules, and regulations.
``(2) Review.--Not less than once every three years, an
enterprise shall review the adequacy of its code of conduct and
ethics for consistency with practices appropriate to the
enterprise and make any appropriate revisions to such code.
``(e) Conduct and Responsibilities of Board of Directors.--The
board of directors of an enterprise shall be responsible for directing
the conduct and affairs of the enterprise in furtherance of the safe
and sound operation of the enterprise and shall remain reasonably
informed of the condition, activities, and operations of the
enterprise. The responsibilities of the board of directors shall
include having in place adequate policies and procedures to assure its
oversight of, among other matters, the following:
``(1) Corporate strategy, major plans of action, risk
policy, programs for legal and regulatory compliance and
corporate performance, including prudent plans for growth and
allocation of adequate resources to manage operations risk.
``(2) Hiring and retention of qualified executive officers
and succession planning for such executive officers.
``(3) Compensation programs of the enterprise.
``(4) Integrity of accounting and financial reporting
systems of the enterprise, including independent audits and
systems of internal control.
``(5) Process and adequacy of reporting, disclosures, and
communications to shareholders, investors, and potential
investors.
``(6) Extensions of credit to board members and executive
officers.
``(7) Responsiveness of executive officers in providing
accurate and timely reports to Federal regulators and in
addressing the supervisory concerns of Federal regulators in a
timely and appropriate manner.
``(f) Prohibition of Extensions of Credit.--An enterprise may not
directly or indirectly, including through any subsidiary, extend or
maintain credit, arrange for the extension of credit, or renew an
extension of credit, in the form of a personal loan to or for any board
member or executive officer of the enterprise, as provided by section
13(k) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(k)).
``(g) Certification of Disclosures.--The chief executive officer
and the chief financial officer of an enterprise shall review each
quarterly report and annual report issued by the enterprise and such
reports shall include certifications by such officers as required by
section 302 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7241).
``(h) Change of Audit Partner.--An enterprise may not accept audit
services from an external auditing firm if the lead or coordinating
audit partner who has primary responsibility for the external audit of
the enterprise, or the external audit partner who has responsibility
for reviewing the external audit has performed audit services for the
enterprise in each of the five previous fiscal years.
``(i) Compliance Program.--
``(1) Requirement.--Each enterprise shall establish and
maintain a compliance program that is reasonably designed to
assure that the enterprise complies with applicable laws,
rules, regulations, and internal controls.
``(2) Compliance officer.--The compliance program of an
enterprise shall be headed by a compliance officer, however
styled, who reports directly to the chief executive officer of
the enterprise. The compliance officer shall report regularly
to the board of directors or an appropriate committee of the
board of directors on compliance with and the adequacy of
current compliance policies and procedures of the enterprise,
and shall recommend any adjustments to such policies and
procedures that the compliance officer considers necessary and
appropriate.
``(j) Risk Management Program.--
``(1) Requirement.--Each enterprise shall establish and
maintain a risk management program that is reasonably designed
to manage the risks of the operations of the enterprise.
``(2) Risk management officer.--The risk management program
of an enterprise shall be headed by a risk management officer,
however styled, who reports directly to the chief executive
officer of the enterprise. The risk management officer shall
report regularly to the board of directors or an appropriate
committee of the board of directors on compliance with and the
adequacy of current risk management policies and procedures of
the enterprise, and shall recommend any adjustments to such
policies and procedures that the risk management officer
considers necessary and appropriate.
``(k) Compliance With Other Laws.--
``(1) Deregistered or unregistered common stock.--If an
enterprise deregisters or has not registered its common stock
with the Securities and Exchange Commission under the
Securities Exchange Act of 1934, the enterprise shall comply or
continue to comply with sections 10A(m) and 13(k) of the
Securities Exchange Act of 1934 (15 U.S.C. 78j-1(m), 78m(k))
and sections 302, 304, and 406 of the Sarbanes-Oxley Act of
2002 (15 U.S.C. 7241, 7243, 7264), subject to such requirements
as provided by subsection (l) of this section.
``(2) Registered common stock.--An enterprise that has its
common stock registered with the Securities and Exchange
Commission shall maintain such registered status, unless it
provides 60 days prior written notice to the Director stating
its intent to deregister and its understanding that it will
remain subject to the requirements of the sections of the
Securities Exchange Act of 1934 and the Sarbanes-Oxley Act of
2002, subject to such requirements as provided by subsection
(l) of this section.
``(l) Other Matters.--The Director may from time to time establish
standards, by regulation, order, or guideline, regarding such other
corporate governance matters of the enterprises as the Director
considers appropriate.
``(m) Modification of Standards.--In connection with standards of
Federal or State law (including the Revised Model Corporation Act) or
New York Stock Exchange rules that are made applicable to an enterprise
by section 1710.10 of the Director's rules (12 C.F.R. 1710.10) and by
subsections (a), (b), (g), (i), (j), and (k) of this section, the
Director, in the Director's sole discretion, may modify the standards
contained in this section or in part 1710 of the Director's rules (12
U.S.C. Part 1710) in accordance with section 553 of title 5, United
States Code, and upon written notice to the enterprise.''.
SEC. 115. REQUIRED REGISTRATION UNDER SECURITIES EXCHANGE ACT OF 1934.
The Housing and Community Development Act of 1992 is amended by
adding after section 1322A, as added by the preceding provisions of
this Act, the following new section:
``SEC. 1322B. REQUIRED REGISTRATION UNDER SECURITIES EXCHANGE ACT OF
1934.
``(a) In General.--Each regulated entity shall register at least
one class of the capital stock of such regulated entity, and maintain
such registration with the Securities and Exchange Commission, under
the Securities Exchange Act of 1934.
``(b) Enterprises.--Each enterprise shall comply with sections 14
and 16 of the Securities Exchange Act of 1934.''.
SEC. 116. FINANCIAL INSTITUTIONS EXAMINATION COUNCIL.
The Federal Financial Institutions Examination Council Act of 1978
is amended--
(1) in section 1003 (12 U.S.C. 3302)--
(A) in paragraph (1), by inserting ``Director of
the Federal Housing Finance Agency,'' after
``Supervision,''; and
(B) in paragraph (3), by striking ``or a credit
union;'' and inserting ``a credit union, or a regulated
entity (as such term is defined in section 1303 of the
Housing and Community Development Act of 1992 (12
U.S.C. 4502)).'';
(2) in section 1004 (12 U.S.C. 3303)--
(A) in paragraph (4), by inserting a semicolon at
the end;
(B) by redesignating paragraph (5) as paragraph
(6); and
(C) by inserting after paragraph (4) the following
new paragraph:
``(5) the Director of the Federal Housing Finance Agency;
and''; and
(3) in section 1006(d) (12 U.S.C. 3305(d)), by striking
``and employees of the Federal Housing Finance Board''.
SEC. 117. GUARANTEE FEE STUDY.
(a) In General.--The Comptroller General of the United States, in
consultation with the heads of the federal banking agencies and the
Director of the Office of Federal Housing Enterprise Oversight of the
Department of Housing and Urban Development, shall, not later than one
year after the date of the enactment of this Act, submit to the
Congress a study concerning the pricing, transparency and reporting of
the Federal National Mortgage Association, the Federal Home Loan
Mortgage Corporation, and the Federal home loan banks with regard to
guarantee fees and concerning analogous practices, transparency and
reporting requirements (including advances pricing practices by the
Federal Home Loan Banks) of other participants in the business of
mortgage purchases and securitization.
(b) Factors.--The study required by this section shall examine
various factors such as credit risk, counterparty risk considerations,
economic value considerations, and volume considerations used by the
regulated entities (as such term is defined in section 1303 of the
Housing and Community Development Act of 1992) included in the study in
setting the amount of fees they charge.
(c) Contents of Report.--The report required under subsection (a)
shall identify and analyze--
(1) the factors used by each enterprise (as such term is
defined in section 1303 of the Housing and Community
Development Act of 1992) in determining the amount of the
guarantee fees it charges;
(2) the total revenue the enterprises earn from guarantee
fees;
(3) the total costs incurred by the enterprises for
providing guarantees;
(4) the average guarantee fee charged by the enterprises;
(5) an analysis of how and why the guarantee fees charged
differ from such fees charged during the previous year;
(6) a breakdown of the revenue and costs associated with
providing guarantees, based on product type and risk
classifications; and
(7) other relevant information on guarantee fees with other
participants in the mortgage and securitization business.
(d) Protection of Information.--Nothing in this section may be
construed to require or authorize the Government Accounting Office, in
connection with the study mandated by this section, to disclose
information of the enterprises or other organization that is
confidential or proprietary.
(e) Effective Date.--This section shall take effect on the date of
the enactment of this Act.
SEC. 118. CONFORMING AMENDMENTS.
(a) 1992 Act.--Part 1 of subtitle A of title XIII of the Housing
and Community Development Act of 1992 (12 U.S.C. 4511 et seq.), as
amended by the preceding provisions of this Act, is further amended--
(1) by striking ``an enterprise'' each place such term
appears in such part (except in sections 1313(a)(2)(A),
1313A(b)(2)(B)(ii)(I), and 1316(b)(3)) and inserting ``a
regulated entity'';
(2) by striking ``the enterprise'' each place such term
appears in such part (except in section 1316(b)(3)) and
inserting ``the regulated entity'';
(3) by striking ``the enterprises'' each place such term
appears in such part (except in sections 1312(c)(2),
1312(e)(2), and 1319B(a)(4)(D)) and inserting ``the regulated
entities'';
(4) by striking ``each enterprise'' each place such term
appears in such part and inserting ``each regulated entity'';
(5) by striking ``Office'' each place such term appears in
such part (except in sections 1312(b)(5), 1315(b), and 1316(g),
and section 1317(c)) and inserting ``Agency'';
(6) in section 1315 (12 U.S.C. 4515)--
(A) in subsection (a)--
(i) in the subsection heading, by striking
``Office Personnel'' and inserting ``In
General''; and
(ii) by striking ``The'' and inserting
``Subject to titles III and IV of the Federal
Housing Finance Reform Act of 2005, the'';
(B) by striking subsections (d) and (f); and
(C) by redesignating subsection (e) as subsection
(d);
(7) in section 1319A (12 U.S.C. 4520)--
(A) by striking ``(a) In General.--Each
enterprise'' and inserting ``Each regulated entity'';
and
(B) by striking subsection (b);
(8) in section 1319B (12 U.S.C. 4521), by striking
``Committee on Banking, Finance and Urban Affairs'' each place
such term appears and inserting ``Committee on Financial
Services''; and
(9) in section 1319F (12 U.S.C. 4525), striking all that
follows ``United States Code'' and inserting ``, the Agency
shall be considered an agency responsible for the regulation or
supervision of financial institutions.''.
(b) Amendments to Fannie Mae Charter Act.--The Federal National
Mortgage Association Charter Act (12 U.S.C. 1716 et seq.) is amended--
(1) by striking ``Director of the Office of Federal Housing
Enterprise Oversight of the Department of Housing and Urban
Development'' each place such term appears, and inserting
``Director of the Federal Housing Finance Agency'', in--
(A) section 303(c)(2) (12 U.S.C. 1718(c)(2));
(B) section 309(d)(3)(B) (12 U.S.C.
1723a(d)(3)(B)); and
(C) section 309(k)(1); and
(2) in section 309--
(A) in subsections (d)(3)(A) and (n)(1), by
striking ``Banking, Finance and Urban Affairs'' each
place such term appears and inserting ``Financial
Services''; and
(B) in subsection (m)--
(i) in paragraph (1), by striking
``Secretary'' the second place such term
appears and inserting ``Director'';
(ii) in paragraph (2), by striking
``Secretary'' the second place such term
appears and inserting ``Director''; and
(iii) by striking ``Secretary'' each other
place such term appears and inserting
``Director of the Federal Housing Finance
Agency''; and
(C) in subsection (n), by striking ``Secretary''
each place such term appears and inserting ``Director
of the Federal Housing Finance Agency''.
(c) Amendments to Freddie Mac Act.--The Federal Home Loan Mortgage
Corporation Act is amended--
(1) by striking ``Director of the Office of Federal Housing
Enterprise Oversight of the Department of Housing and Urban
Development'' each place such term appears, and inserting
``Director of the Federal Housing Finance Agency'', in--
(A) section 303(b)(2) (12 U.S.C. 1452(b)(2));
(B) section 303(h)(2) (12 U.S.C. 1452(h)(2)); and
(C) section 307(c)(1) (12 U.S.C. 1456(c)(1));
(2) in sections 303(h)(1) and 307(f)(1) (12 U.S.C.
1452(h)(1), 1456(f)(1)), by striking ``Banking, Finance and
Urban Affairs'' each place such term appears and inserting
``Financial Services'';
(3) in section 306(i) (12 U.S.C. 1455(i))--
(A) by striking ``1316(c)'' and inserting
``306(c)''; and
(B) by striking ``section 106'' and inserting
``section 1316''; and
(4) in section 307 (12 U.S.C. 1456))--
(A) in subsection (e)--
(i) in paragraph (1), by striking
``Secretary'' the second place such term
appears and inserting ``Director'';
(ii) in paragraph (2), by striking
``Secretary'' the second place such term
appears and inserting ``Director''; and
(iii) by striking ``Secretary'' each other
place such term appears and inserting
``Director of the Federal Housing Finance
Agency''; and
(B) in subsection (f), by striking ``Secretary''
each place such term appears and inserting ``Director
of the Federal Housing Finance Agency''.
Subtitle B--Improvement of Mission Supervision
SEC. 121. TRANSFER OF PROGRAM AND ACTIVITIES APPROVAL AND HOUSING GOAL
OVERSIGHT.
Part 2 of subtitle A of title XIII of the Housing and Community
Development Act of 1992 (12 U.S.C. 4541 et seq.) is amended--
(1) by striking the designation and heading for the part
and inserting the following:
``PART 2--PROGRAM AND ACTIVITIES APPROVAL BY DIRECTOR, CORPORATE
GOVERNANCE, AND ESTABLISHMENT OF HOUSING GOALS'';
and
(2) by striking sections 1321 and 1322.
SEC. 122. REVIEW BY DIRECTOR OF NEW PROGRAMS AND ACTIVITIES OF
ENTERPRISES.
(a) In General.--Part 2 of subtitle A of title XIII of the Housing
and Community Development Act of 1992 is amended by inserting before
section 1323 (12 U.S.C. 4543) the following new section:
``SEC. 1321. REVIEW AND APPROVAL BY DIRECTOR OF NEW PROGRAMS AND
BUSINESS ACTIVITIES OF ENTERPRISES.
``(a) Limitation on Authority to Undertake Programs and
Activities.--An enterprise may not undertake any new program, including
a pilot program, or any new business activity except in accordance with
the procedures set forth in this section and orders and regulations
issued under this section.
``(b) New Programs.--
``(1) Prior approval requirement.--An enterprise may not
commence any new program before it has obtained the approval of
the Director, pursuant to this subsection, for the new program.
``(2) Application.--The Director shall, by order or
regulation, require that an enterprise shall, to obtain a
determination by the Director regarding approval of a new
program by the enterprise, submit to the Director a written
application for the new program in a format as prescribed by
the Director.
``(3) Notice.--Immediately upon receipt of a complete
application for a new program, the Director shall cause to be
published in the Federal Register notice of the receipt of such
application and of the period for public comment pursuant to
paragraph (4) regarding such new program, and a description of
the new program proposed by the application.
``(4) Public comment period.--During the 30-day period
beginning upon publication pursuant to paragraph (3) of a
notice regarding such an application, the Director shall
receive public comments regarding the new program.
``(5) Determination.--Not less than 15 days after the
conclusion of the public comment period pursuant to paragraph
(4) regarding an application but not more than 30 days after
the conclusion of such comment period, the Director shall
approve, conditionally approve, or reject such program, in
writing.
``(6) Standard for approval.--The Director may approve, or
conditionally approve, a new program of an enterprise only if
the Director determines, taking into consideration any relevant
information and comments received during the public comment
period, that such new program--
``(A) does not contravene and is not inconsistent
with the purposes of this title, the Federal National
Mortgage Association Charter Act, or the Federal Home
Loan Mortgage Corporation Act, as such purposes are
determined taking into consideration the definitions of
the terms `mortgage loan origination' and `secondary
mortgage market' pursuant to section 1303;
``(B) is not otherwise inconsistent with the safety
and soundness of the enterprise; and
``(C) is in the public interest.
``(7) Limitation.--The Director, in implementing this
subsection, may not prevent an enterprise from continuing to
offer the automated loan underwriting system in existence on
the date of the enactment of the Federal Housing Finance Reform
Act of 2005 or continuing to engage in counseling and education
activities.
``(c) New Business Activities.--
``(1) Authority of director to prohibit new business
activities.--The Director shall have authority to prohibit any
new business activity by an enterprise if the Director
determines, in writing, that such activity--
``(A) contravenes or is inconsistent with the
purposes of this title, the Federal National Mortgage
Association Charter Act, or the Federal Home Loan
Mortgage Corporation Act;
``(B) is otherwise inconsistent with the safety and
soundness of the enterprise; or
``(C) is not in the public interest.
``(2) Notification of new business activities.--An
enterprise that undertakes any new business activity shall
provide written notice of the activity to the Director and may
commence the new business activity only in accordance with
paragraph (4).
``(3) Director determination of applicable procedure.--
``(A) Timing.--Immediately upon receipt of any
notice under paragraph (2) regarding a new business
activity, the Director shall undertake a determination
under subparagraph (B) of this paragraph regarding the
new business activity.
``(B) Determination and treatment as new program.--
If the Director determines that any new business
activity consists of, relates to, or involves any new
program--
``(i) the Director shall notify the
enterprise of the determination;
``(ii) the new business activity described
in the notice shall be considered a new program
for purposes of this section; and
``(iii) the Director shall prohibit the
enterprise from carrying out the activity
except to the extent that approval for the
activity is obtained pursuant to subsection
(b).
``(4) Commencement.--An enterprise may commence a new
business activity--
``(A) if the Director issues a written approval
regarding such new business activity, immediately upon
such issuance or at such other time as provided by the
Director in such letter; or
``(B) if, during the 30-day period beginning upon
receipt by the Director of notice pursuant to paragraph
(2) regarding a new business activity, the Director has
not issued to the enterprise a written approval or
denial of the new business activity, upon the
expiration of such 30-day period.
``(d) Approval and Conditional Approval.--The Director may at any
time conditionally approve the undertaking of a particular new program
or new business activity by an enterprise and set forth the terms and
conditions that apply to the program or activity with which the
enterprise shall comply if it undertakes the new program or activity.
Such approval may, in the discretion of the Director, be in the form of
a written agreement between the enterprise and the Director and shall
be subject to such terms and conditions therein. Such a written
agreement or conditional approval shall be enforceable under subtitle
C.
``(e) Determination and Treatment of Activity as New Business
Activity.--If the Director determines that any activity of an
enterprise consists of, relates to, or involves any new business
activity--
``(1) the Director shall notify the enterprise of the
determination;
``(2) such activity shall be considered a new business
activity for purposes of this section; and
``(3) the Director shall prohibit the enterprise from
carrying out the activity except to the extent that approval
for the activity is obtained pursuant to subsection (c).
``(f) Effect on Other Authorities.--
``(1) Examinations.--Nothing in this section may be
construed to limit, in any manner, any other authority or right
the Director may have under other provisions of law to conduct
an examination of an enterprise.
``(2) Requests for information.--Nothing in this section
may be construed to limit the right of the Director at any time
to request additional information from an enterprise concerning
any business activity.
``(3) No implied right of action.--This section shall not
create any private right of action against an enterprise or any
director or executive officer of an enterprise, or impair any
private right of action under other applicable law.
``(4) No limitation.--Nothing in this section may be
construed to restrict the general supervisory and regulatory
authority of the Director over all programs, products,
activities, or business operations of any kind.
``(g) Report on Programs and Business Activities.--Not later than
the expiration of the 180-day period beginning on the effective date
under section 185 of the Federal Housing Finance Reform Act of 2005,
each enterprise shall submit to the Director a report identifying and
describing each program and business activity of the enterprise engaged
in or existing as of the submission of the report.
``(h) Regulations.--The Director shall by order or regulation issue
rules and procedures to implement this section, including in the
discretion of the Director, such definitions, interpretations, forms,
and other guidances as the Director considers appropriate.''.
(b) Definitions.--Section 1303 of the Housing and Community
Development Act of 1992 (12 U.S.C. 4502), as amended by section 2 of
this Act, is further amended--
(1) by redesignating paragraphs (17) through (23) as
paragraphs (20) through (26), respectively;
(2) by inserting after paragraph (16) the following new
paragraph:
``(19) New business activity.--The term `new business
activity' means, with respect to an enterprise, a business
activity that--
``(A) is materially changed or materially different
from any of the business activities that the enterprise
was engaging in on the effective date under section 185
of the Federal Housing Finance Reform Act of 2005; and
``(B) the enterprise has not previously obtained
authorization, pursuant to the provisions of section
1321(c), to offer, undertake, transact, conduct, or
engage in.'';
(3) by redesignating paragraphs (15) and (16) as paragraphs
(17) and (18), respectively;
(4) by inserting after paragraph (14) the following new
paragraph:
``(16) Mortgage markets.--The terms `mortgage loan
origination' and `secondary mortgage market' shall have such
meanings as the Director shall, by regulation, prescribe
consistent with the Federal National Mortgage Association
Charter Act and the Federal Home Loan Mortgage Corporation Act.
The Director shall issue such regulations not later than the
expiration of the 12-month period beginning on the effective
date under section 185 of the Federal Housing Finance Reform
Act of 2005, and the Director shall review such regulations on
a periodic basis.'';
(5) by redesignating paragraphs (5) through (14) as
paragraphs (6) through (15), respectively; and
(6) by inserting after paragraph (4) the following new
paragraph:
``(5) Business activity.--The term `business activity'
means, with respect to an enterprise, any offering,
undertaking, transacting, conducting, or engaging in any
conduct, activity, or product by the enterprise, as the
Director shall provide.''.
(c) Conforming Amendments.--
(1) Fannie mae.--Section 302(b)(6) of the Federal National
Mortgage Association Charter Act (12 U.S.C. 1717(b)(6)) is
amended--
(A) by striking ``new program (as such term is''
and inserting ``new program or new business activity
(as such terms are''; and
(B) by striking ``before obtaining the approval of
the Secretary under section 1322'' and inserting
``except in accordance with section 1321''.
(2) Freddie mac.--Section 305(c) of the Federal Home Loan
Mortgage Corporation Act (12 U.S.C. 1454(c)) is amended--
(A) by striking ``new program (as such term is''
and inserting ``new program or new business activity
(as such terms are''; and
(B) by striking ``before obtaining the approval of
the Secretary under section 1322'' and inserting
``except in accordance with section 1321''.
SEC. 123. CONFORMING LOAN LIMITS.
(a) Fannie Mae.--
(1) General limit.--Section 302(b)(2) of the Federal
National Mortgage Association Charter Act (12 U.S.C.
1717(b)(2)) is amended by striking the 7th and 8th sentences
and inserting the following new sentences: ``Such limitations
shall not exceed $359,650 for a mortgage secured by a single-
family residence, $460,400 for a mortgage secured by a 2-family
residence, $556,500 for a mortgage secured by a 3-family
residence, and $691,600 for a mortgage secured by a 4-family
residence, except that such maximum limitations shall be
adjusted effective January 1 of each year beginning after the
effective date under section 185 of the Federal Housing Finance
Reform Act of 2005, subject to the limitations in this
paragraph. Each adjustment shall be made by adding to or
subtracting from each such amount (as it may have been
previously adjusted) a percentage thereof equal to the
percentage increase or decrease, during the most recent 12-
month or fourth-quarter period ending before the time of
determining such annual adjustment, in the housing price index
maintained by the Director of the Federal Housing Finance
Agency (pursuant to section 1322 of the Housing and Community
Development Act of 1992 (12 U.S.C. 4541)).''.
(2) High-cost area limit.--Section 302(b)(2) of the Federal
National Mortgage Association Charter Act is (12 U.S.C.
1717(b)(2)) is amended by adding after the period at the end
the following: ``Such foregoing limitations shall also be
increased with respect to properties of a particular size
located in any area for which the median price for such size
residence exceeds the foregoing limitation for such size
residence, to the lesser of 150 percent of such foregoing
limitation for such size residence or the amount that is equal
to the median price in such area for such size residence,
except that, subject to the order, if any, issued by the
Director of the Federal Housing Finance Agency pursuant to
section 123(d)(3) of the Federal Housing Finance Reform Act of
2005, such increase shall apply only with respect to mortgages
on which are based securities issued and sold by the
corporation.''.
(b) Freddie Mac.--
(1) General limit.-- Section 305(a)(2) of the Federal Home
Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) is amended
by striking the 6th and 7th sentences and inserting the
following new sentences: ``Such limitations shall not exceed
$359,650 for a mortgage secured by a single-family residence,
$460,400 for a mortgage secured by a 2-family residence,
$556,500 for a mortgage secured by a 3-family residence, and
$691,600 for a mortgage secured by a 4-family residence, except
that such maximum limitations shall be adjusted effective
January 1 of each year beginning after the effective date under
section 185 of the Federal Housing Finance Reform Act of 2005,
subject to the limitations in this paragraph. Each adjustment
shall be made by adding to or subtracting from each such amount
(as it may have been previously adjusted) a percentage thereof
equal to the percentage increase or decrease, during the most
recent 12-month or fourth-quarter period ending before the time
of determining such annual adjustment, in the housing price
index maintained by the Director of the Federal Housing Finance
Agency (pursuant to section 1322 of the Housing and Community
Development Act of 1992 (12 U.S.C. 4541)).''.
(2) High-cost area limit.--Section 305(a)(2) of the Federal
Home Loan Mortgage Corporation Act is amended by adding after
the period at the end the following: ``Such foregoing
limitations shall also be increased with respect to properties
of a particular size located in any area for which the median
price for such size residence exceeds the foregoing limitation
for such size residence, to the lesser of 150 percent of such
foregoing limitation for such size residence or the amount that
is equal to the median price in such area for such size
residence, except that, subject to the order, if any, issued by
the Director of the Federal Housing Finance Agency pursuant to
section 123(d)(3) of the Federal Housing Finance Reform Act of
2005, such increase shall apply only with respect to mortgages
on which are based securities issued and sold by the
Corporation.''.
(c) Housing Price Index.--Subpart A of part 2 of subtitle A of
title XIII of the Housing and Community Development Act of 1992 (as
amended by the preceding provisions of this Act) is amended by
inserting after section 1321 (as added by section 122 of this Act) the
following new section:
``SEC. 1322. HOUSING PRICE INDEX.
``(a) In General.--The Director shall establish and maintain a
method of assessing the national average 1-family house price for use
for adjusting the conforming loan limitations of the enterprises. In
establishing such method, the Director shall take into consideration
the monthly survey of all major lenders conducted by the Federal
Housing Finance Agency to determine the national average 1-family house
price, the House Price Index maintained by the Office of Federal
Housing Enterprise Oversight of the Department of Housing and Urban
Development before the effective date under section 185 of the Federal
Housing Finance Reform Act of 2005, any appropriate house price indexes
of the Bureau of the Census of the Department of Commerce, and any
other indexes or measures that the Director considers appropriate.
``(b) GAO Audit.--
``(1) In general.--At such times as are required under
paragraph (2), the Comptroller General of the United States
shall conduct an audit of the methodology established by the
Director under subsection (a) to determine whether the
methodology established is an accurate and appropriate means of
measuring changes to the national average 1-family house price.
``(2) Timing.--An audit referred to in paragraph (1) shall
be conducted and completed not later than the expiration of the
180-day period that begins upon each of the following dates:
``(A) Establishment.--The date upon which such
methodology is initially established under subsection
(a) in final form by the Director.
``(B) Modification or amendment.--Each date upon
which any modification or amendment to such methodology
is adopted in final form by the Director.
``(3) Report.--Within 30 days of the completion of any
audit conducted under this subsection, the Comptroller General
shall submit a report detailing the results and conclusions of
the audit to the Director, the Committee on Financial Services
of the House of Representatives, and the Committee on Banking,
Housing, and Urban Affairs of the Senate.''.
(d) Conditions on Conforming Loan Limit for High-Cost Areas.--
(1) Study.--The Director of the Federal Housing Finance
Agency shall conduct a study under this subsection during the
six-month period beginning on the effective date under section
185 of this Act.
(2) Issues.--The study under this subsection shall
determine--
(A) the effect that restricting the conforming loan
limits for high-cost areas only to mortgages on which
are based securities issued and sold by the Federal
National Mortgage Association and the Federal Home Loan
Mortgage Corporation (as provided in the last sentence
of section 302(b)(2) of the Federal National Mortgage
Association Charter Act and the last sentence of
section 305(a)(2) of the Federal Home Loan Mortgage
Corporation Act, pursuant to the amendments made by
subsections (a)(2) and (b)(2) of this section) would
have on the cost to borrowers for mortgages on housing
in such high-cost areas;
(B) the effects that such restrictions would have
on the availability of mortgages for housing in such
high-cost areas; and
(C) the extent to which the Federal National
Mortgage Association and the Federal Home Loan Mortgage
Corporation will be able to issue and sell securities
based on mortgages for housing located in such high-
cost areas.
(3) Determination.--
(A) In general.--Not later than the expiration of
the six-month period specified in paragraph (1), the
Director of the Federal Housing Finance Agency shall
make a determination, based on the results of the study
under this subsection, of whether the restriction of
conforming loan limits for high-cost areas only to
mortgages on which are based securities issued and sold
by the Federal National Mortgage Association and the
Federal Home Loan Mortgage Corporation (as provided in
the amendments made by subsections (a)(2) and (b)(2) of
this section) will result in an increase in the cost to
borrowers for mortgages on housing in such high-cost
areas.
(B) Order.-- If such determination is that costs to
borrowers on housing in such high-cost areas will be
increased by such restrictions, the Director may issue
an order terminating such restrictions, in whole or in
part.
(4) Publication.-- Not later than the expiration of the
six-month period specified in paragraph (1), the Director of
the Federal Housing Finance Agency shall cause to be published
in the Federal Register--
(A) a report that--
(i) describes the study under this
subsection; and
(ii) sets forth the conclusions of the
study regarding the issues to be determined
under paragraph (2); and
(B) notice of the determination of the Director
under paragraph (3); and
(C) the order of the Director under paragraph (3).
(5) Definition.--For purposes of this subsection, the term
``conforming loan limits for high-cost areas'' means the dollar
amount limitations applicable under the section 302(b)(2) of
the Federal National Mortgage Association Charter Act and
section 305(a)(2) of the Federal Home Loan Mortgage Corporation
Act (as amended by subsections (a) and (b) of this section) for
areas described in the last sentence of such sections (as so
amended).
(e) Regular Adjustment of Conforming Loan Limits.--
(1) Adjustment for year intervening before effective
date.--Notwithstanding section 302(b)(2) of the Federal
National Mortgage Association Charter Act and section 305(a)(2)
of the Federal Home Loan Mortgage Corporation Act, as amended
by this section, the maximum dollar amount limitations in such
sections shall be adjusted on the effective date under section
185 of this Act, and the limitations as so adjusted shall be
immediately effective, so that the limitations under such
sections applicable to the year in which such effective date
occurs are equal to the limitations in effect under such
sections immediately before such effective date.
(2) Further adjustments.--After such effective date, the
dollar amount limitations as adjusted pursuant to paragraph (1)
shall be considered ``such amount (as it may have been
previously adjusted'' for purposes of section 302(b)(2) of the
Federal National Mortgage Association Charter Act and section
305(a)(2) of the Federal Home Loan Mortgage Corporation Act.
SEC. 124. ANNUAL HOUSING REPORT REGARDING REGULATED ENTITIES.
(a) In General.--The Housing and Community Development Act of 1992
is amended by striking section 1324 (12 U.S.C. 4544) and inserting the
following new section:
``SEC. 1324. ANNUAL HOUSING REPORT REGARDING REGULATED ENTITIES.
``(a) In General.--After reviewing and analyzing the reports
submitted under section 309(n) of the Federal National Mortgage
Association Charter Act, section 307(f) of the Federal Home Loan
Mortgage Corporation Act, and section 10(j)(11) of the Federal Home
Loan Bank Act (12 U.S.C. 1430(j)(11)), the Director shall submit a
report, not later than October 30 of each year, to the Committee on
Financial Services of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate, on the activities of
each regulated entity.
``(b) Contents.--The report shall--
``(1) discuss the extent to which--
``(A) each enterprise is achieving the annual
housing goals established under subpart B of this part;
``(B) each enterprise is complying with section
1337;
``(C) each Federal home loan bank is complying with
section 10(j) of the Federal Home Loan Bank Act; and
``(D) each regulated entity is achieving the
purposes of the regulated entity established by law;
``(2) aggregate and analyze relevant data on income to
assess the compliance by each enterprise with the housing goals
established under subpart B;
``(3) aggregate and analyze data on income, race, and
gender by census tract and other relevant classifications, and
compare such data with larger demographic, housing, and
economic trends;
``(4) examine actions that--
``(A) each enterprise has undertaken or could
undertake to promote and expand the annual goals
established under subpart B and the purposes of the
enterprise established by law; and
``(B) each Federal home loan bank has taken or
could undertake to promote and expand the community
investment program and affordable housing program of
the bank established under section subsections (i) and
(j) of section 10 of the Federal Home Loan Bank Act;
``(5) examine the primary and secondary multifamily housing
mortgage markets and describe--
``(A) the availability and liquidity of mortgage
credit;
``(B) the status of efforts to provide standard
credit terms and underwriting guidelines for
multifamily housing and to securitize such mortgage
products; and
``(C) any factors inhibiting such standardization
and securitization;
``(6) examine actions each regulated entity has undertaken
and could undertake to promote and expand opportunities for
first-time homebuyers, including the use of alternative credit
scoring;
``(7) describe any actions taken under section 1325(5) with
respect to originators found to violate fair lending
procedures;
``(8) discuss and analyze existing conditions and trends,
including conditions and trends relating to pricing, in the
housing markets and mortgage markets; and
``(9) identify the extent to which each enterprise is
involved in mortgage purchases and secondary market activities
involving subprime loans (as identified in accordance with the
regulations issued pursuant to section 124(b) of the Federal
Housing Finance Reform Act of 2005) and compare the
characteristics of subprime loans purchased and securitized by
the enterprises to other loans purchased and securitized by the
enterprises.
``(c) Data Collection and Reporting.--
``(1) In general.--To assist the Director in analyzing the
matters described in subsection (b) and establishing the
methodology described in section 1322, the Director shall
conduct, on a monthly basis, a survey of mortgage markets in
accordance with this subsection.
``(2) Data points.--Each monthly survey conducted by the
Director under paragraph (1) shall collect data on--
``(A) the characteristics of individual mortgages
that are eligible for purchase by the enterprises and
the characteristics of individual mortgages that are
not eligible for purchase by the enterprises including,
in both cases, information concerning--
``(i) the price of the house that secures
the mortgage;
``(ii) the loan-to-value ratio of the
mortgage, which shall reflect any secondary
liens on the relevant property;
``(iii) the terms of the mortgage;
``(iv) the creditworthiness of the borrower
or borrowers; and
``(v) whether the mortgage, in the case of
a conforming mortgage, was purchased by an
enterprise; and
``(B) such other matters as the Director determines
to be appropriate.
``(3) Public availability.--The Director shall make any
data collected by the Director in connection with the conduct
of a monthly survey available to the public in a timely manner,
provided that the Director may modify the data released to the
public to ensure that the data is not released in an
identifiable form.
``(4) Definition.--For purposes of this subsection, the
term `identifiable form' means any representation of
information that permits the identity of a borrower to which
the information relates to be reasonably inferred by either
direct or indirect means.''.
(b) Standards for Subprime Loans.--The Director shall, not later
than one year after the effective date under section 185, by
regulations issued under section 1316G of the Housing and Community
Development Act of 1992, establish standards by which mortgages
purchased and mortgages purchased and securitized shall be
characterized as subprime for the purpose of, and only for the purpose
of, complying with the reporting requirement under section 1324(b)(9)
of such Act.
SEC. 125. REVISION OF HOUSING GOALS.
(a) Housing Goals.--The Housing and Community Development Act of
1992 is amended by striking sections 1331 through 1334 (12 U.S.C. 4561-
4) and inserting the following new sections:
``SEC. 1331. ESTABLISHMENT OF HOUSING GOALS.
``(a) In General.--The Director shall establish, effective for the
first year that begins after the effective date under section 185 of
the Federal Housing Finance Reform Act of 2005 and each year
thereafter, annual housing goals, with respect to the mortgage
purchases by the enterprises, as follows:
``(1) Single family housing goals.--Three single-family
housing goals under section 1332.
``(2) Multifamily special affordable housing goals.--A
multifamily special affordable housing goal under section 1333.
``(b) Eliminating Interest Rate Disparities.--
``(1) In general.--In establishing and implementing the
housing goals under this subpart, the Director shall require
the enterprises to disclose appropriate information to allow
the Director to assess if there are any disparities in interest
rates charged on mortgages to borrowers who are minorities as
compared with borrowers of similar creditworthiness who are not
minorities, as evidenced in reports pursuant to the Home
Mortgage Disclosure Act of 1975.
``(2) Report and remedy.--Upon a finding by the Director,
pursuant to the information provided by an enterprise in
paragraph (1), that a pattern of disparities in interest rates
exists, the Director shall--
``(A) submit to the Committee on Financial Services
of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate a
report detailing the disparities; and
``(B) require the enterprise to take such action as
the Director deems appropriate pursuant to this Act to
remedy the interest rate disparities identified.
``(3) Protection of identity.--In carrying out this
subsection, the Director shall ensure that no information is
made public that would reasonably allow identification,
directly or indirectly, of an individual borrower.
``(c) Timing.--The Director shall establish an annual deadline by
which the Director shall establish the annual housing goals under this
subpart for each year, taking into consideration the need for the
enterprises to reasonably and sufficiently plan their operations and
activities in advance, including operations and activities necessary to
meet such annual goals.
``SEC. 1332. SINGLE-FAMILY HOUSING GOALS.
``(a) In General.--The Director shall establish an annual goal for
the purchase by each enterprise of conventional, conforming, single-
family, owner-occupied, purchase money mortgages financing housing for
each of the following categories of families:
``(1) Low-income families.
``(2) Families that reside in low-income areas.
``(3) Very low-income families.
``(b) Determination of Compliance.--The Director shall determine,
for each year that the housing goal under this section is in effect
pursuant to section 1331(a), whether each enterprise has complied with
the single-family housing goal established under this section for such
year. An enterprise shall be considered to be in compliance with such a
goal for a year only if--
``(1) for each of the types of families described in
subsection (a), the percentage of the number of conventional,
conforming, single-family, owner-occupied, purchase money
mortgages purchased by each enterprise in such year that serve
such families, meets or exceeds
``(2) the target for the year for such type of family that
is established under subsection (c).
``(c) Annual Targets.--
``(1) In general.--Except as provided in paragraph (2), for
each of the types of families described in subsection (a), the
target under this subsection for a year shall be the average
percentage, for the three years that most recently precede such
year and for which information under the Home Mortgage
Disclosure Act of 1975 is publicly available, of the number of
conventional, conforming, single-family, owner-occupied,
purchase money mortgages originated in such year that serves
such type of family, as determined by the Director using the
information obtained and determined pursuant to paragraphs (3)
and (4).
``(2) Authority to increase targets.--
``(A) In general.--The Director may, for any year,
establish by regulation, for any or all of the types of
families described in subsection (a), percentage
targets that are higher than the percentages for such
year determined pursuant to paragraph (1), to reflect
expected changes in market performance related to such
information under the Home Mortgage Disclosure Act of
1975.
``(B) Factors.--In establishing any targets
pursuant to subparagraph (A), the Director shall
consider the following factors:
``(i) National housing needs.
``(ii) Economic, housing, and demographic
conditions.
``(iii) The performance and effort of the
enterprises toward achieving the housing goals
under this section in previous years.
``(iv) The size of the conventional
mortgage market serving each of the types of
families described in subsection (a) relative
to the size of the overall conventional
mortgage market.
``(v) The need to maintain the sound
financial condition of the enterprises.
``(3) HMDA information.--The Director shall annually obtain
information submitted in compliance with the Home Mortgage
Disclosure Act of 1975 regarding conventional, conforming,
single-family, owner-occupied, purchase money mortgages
originated and purchased for the previous year.
``(4) Conforming mortgages.--In determining whether a
mortgage is a conforming mortgage for purposes of this
paragraph, the Director shall consider the original principal
balance of the mortgage loan to be the principal balance as
reported in the information referred to in paragraph (3), as
rounded to the nearest thousand dollars.
``(d) Notice of Determination and Enterprise Comment.--
``(1) Notice.--Within 30 days of making a determination
under subsection (b) regarding a compliance of an enterprise
for a year with the housing goal established under this section
and before any public disclosure thereof, the Director shall
provide notice of the determination to the enterprise, which
shall include an analysis and comparison, by the Director, of
the performance of the enterprise for the year and the targets
for the year under subsection (c).
``(2) Comment period.--The Director shall provide each
enterprise an opportunity to comment on the determination
during the 30-day period beginning upon receipt by the
enterprise of the notice.
``(e) Use of Borrower Income.--In monitoring the performance of
each enterprise pursuant to the housing goals under this section and
evaluating such performance (for purposes of section 1336), the
Director shall consider a mortgagor's income to be such income at the
time of origination of the mortgage.
``SEC. 1333. MULTIFAMILY SPECIAL AFFORDABLE GOAL.
``(a) Establishment.--
``(1) In general.--The Director shall establish, by
regulation, an annual goal for the purchase by each enterprise
of each of the following types of mortgages on multifamily
housing:
``(A) Mortgages that finance dwelling units for
low-income families.
``(B) Mortgages that finance dwelling units for
very low-income families.
``(C) Mortgages that finance dwelling units
assisted by the low-income housing tax credit under
section 42 of the Internal Revenue Code of 1986.
``(2) Additional requirements for smaller projects.--The
Director shall establish, within the goal under this section,
additional requirements for the purchase by each enterprise of
mortgages described in paragraph (1) for multifamily housing
projects of a smaller or limited size, which may be based on
the number of dwelling units in the project or the amount of
the mortgage, or both, and shall include multifamily housing
projects of such smaller sizes as are typical among such
projects that serve rural areas.
``(3) Factors.--In establishing the goal under this section
relating to mortgages on multifamily housing for an enterprise,
the Director shall consider--
``(A) national multifamily mortgage credit needs;
``(B) the performance and effort of the enterprise
in making mortgage credit available for multifamily
housing in previous years;
``(C) the size of the multifamily mortgage market;
``(D) the ability of the enterprise to lead the
industry in making mortgage credit available,
especially for underserved markets, such as for small
multifamily projects of 5 to 50 units, multifamily
properties in need of rehabilitation, and multifamily
properties located in rural areas; and
``(E) the need to maintain the sound financial
condition of the enterprise.
``(b) Units Financed by Housing Finance Agency Bonds.--The Director
shall give full credit toward the achievement of the multifamily
special affordable housing goal under this section (for purposes of
section 1336) to dwelling units in multifamily housing that otherwise
qualifies under such goal and that is financed by tax-exempt or taxable
bonds issued by a State or local housing finance agency, but only if--
``(1) such bonds are secured by a guarantee of the
enterprise; or
``(2) are not investment grade and are purchased by the
enterprise.
``(c) Use of Tenant Income or Rent.--The Director shall monitor the
performance of each enterprise in meeting the goals established under
this section and shall evaluate such performance (for purposes of
section 1336) based on--
``(1) the income of the prospective or actual tenants of
the property, where such data are available; or
``(2) where the data referred to in paragraph (1) are not
available, rent levels affordable to low-income and very low-
income families.
A rent level shall be considered to be affordable for purposes of this
subsection for an income category referred to in this subsection if it
does not exceed 30 percent of the maximum income level of such income
category, with appropriate adjustments for unit size as measured by the
number of bedrooms.
``(d) Determination of Compliance.--The Director shall, for each
year that the housing goal under this section is in effect pursuant to
section 1331(a), determine whether each enterprise has complied with
such goal and the additional requirements under subsection (a)(2).
``SEC. 1334. DISCRETIONARY ADJUSTMENT OF HOUSING GOALS.
``(a) Authority.--An enterprise may petition the Director in
writing at any time during a year to reduce the level of any goal for
such year established pursuant to this subpart.
``(b) Standard for Reduction.--The Director may reduce the level
for a goal pursuant to such a petition only if--
``(1) market and economic conditions or the financial
condition of the enterprise require such action; or
``(2) efforts to meet the goal would result in the
constraint of liquidity, over-investment in certain market
segments, or other consequences contrary to the intent of this
subpart, or section 301(3) of the Federal National Mortgage
Association Charter Act (12 U.S.C. 1716(3)) or section 301(3)
of the Federal Home Loan Mortgage Corporation Act (12 U.S.C.
1451 note), as applicable.
``(c) Determination.--The Director shall make a determination
regarding any proposed reduction within 30 days of receipt of the
petition regarding the reduction. The Director may extend such period
for a single additional 15-day period, but only if the Director
requests additional information from the enterprise. A denial by the
Director to reduce the level of any goal under this section may be
appealed to the United States District Court for the District of
Columbia or the United States district court in the jurisdiction in
which the headquarters of an enterprise is located.''.
(b) Conforming Amendments.--The Housing and Community Development
Act of 1992 is amended--
(1) in section 1335(a) (12 U.S.C. 4565(a)), in the matter
preceding paragraph (1), by striking ``low- and moderate-income
housing goal'' and all that follows through ``section 1334''
and inserting ``housing goals established under this subpart'';
and
(2) in section 1336(a)(1) (12 U.S.C. 4566(a)(1)), by
striking ``sections 1332, 1333, and 1334,'' and inserting
``this subpart''.
(c) Definitions.--Section 1303 of the Housing and Community
Development Act of 1992 (12 U.S.C. 4502), as amended by the preceding
provisions of this Act, is further amended--
(1) in paragraph (26), by striking ``60 percent'' each
place such term appears and inserting ``50 percent'';
(2) by redesignating paragraphs (23) through (26) as
paragraphs (27) through (30), respectively;
(3) by inserting after paragraph (22) the following new
paragraph:
``(26) Rural area.--The term `rural area' has the meaning
given such term in section 520 of the Housing Act of 1949 (42
U.S.C. 1490), except that such term includes micropolitan areas
and tribal trust lands.''.
(4) by redesignating paragraphs (14) through (22) as
paragraphs (17) through (25), respectively; and
(5) by inserting after paragraph (13) the following new
paragraph:
``(16) Low-income area.--The term `low income area' means a
census tract or block numbering area in which the median income
does not exceed 80 percent of the median income for the area in
which such census tract or block numbering area is located,
and, for the purposes of section 1332(a)(2), shall include
families having incomes not greater than 100 percent of the
area median income who reside in minority census tracts.'';
(6) by redesignating paragraphs (12) and (13) as paragraphs
(14) and (15), respectively;
(7) by inserting after paragraph (11) the following new
paragraph:
``(13) Extremely low-income.--The term `extremely low-
income' means--
``(A) in the case of owner-occupied units, income
not in excess of 30 percent of the area median income;
and
``(B) in the case of rental units, income not in
excess of 30 percent of the area median income, with
adjustments for smaller and larger families, as
determined by the Secretary.'';
(8) by redesignating paragraphs (8) through (11) as
paragraphs (9) through (12), respectively; and
(9) by inserting after paragraph (7) the following new
paragraph:
``(8) Conforming mortgage.--The term `conforming mortgage'
means, with respect to an enterprise, a conventional mortgage
having an original principal obligation that does not exceed
the dollar limitation, in effect at the time of such
origination, under, as applicable--
``(A) section 302(b)(2) of the Federal National
Mortgage Association Charter Act; or
``(B) section 305(a)(2) of the Federal Home Loan
Mortgage Corporation Act.''.
SEC. 126. DUTY TO SERVE UNDERSERVED MARKETS.
(a) Establishment and Evaluation of Performance.--Section 1335 of
the Housing and Community Development Act of 1992 (12 U.S.C. 4565) is
amended--
(1) in the section heading, by inserting ``duty to serve
underserved markets and'' before ``other'';
(2) by striking subsection (b);
(3) in subsection (a)--
(A) in the matter preceding paragraph (1), by
inserting ``and to carry out the duty under subsection
(a) of this section'' before ``, each enterprise
shall'';
(B) in paragraph (3), by inserting ``and'' after
the semicolon at the end;
(C) in paragraph (4), by striking ``; and'' and
inserting a period;
(D) by striking paragraph (5); and
(E) by redesignating such subsection as subsection
(b);
(4) by inserting before subsection (b) (as so redesignated
by paragraph (3)(E) of this subsection) the following new
subsection:
``(a) Duty to Serve Underserved Markets.--
``(1) Duty.--In accordance with the purpose of the
enterprises under section 301(3) of the Federal National
Mortgage Association Charter Act (12 U.S.C. 1716) and section
301(b)(3) of the Federal Home Loan Mortgage Corporation Act (12
U.S.C. 1451 note) to undertake activities relating to mortgages
on housing for very low-, low-, and moderate-income families
involving a reasonable economic return that may be less than
the return earned on other activities, each enterprise shall
have the duty to increase the liquidity of mortgage investments
and improve the distribution of investment capital available
for mortgage financing for underserved markets.
``(2) Underserved markets.--To meet its duty under
paragraph (1), each enterprise shall comply with the following
requirements with respect to the following underserved markets:
``(A) Manufactured housing.--The enterprise shall
lead the industry in developing loan products and
flexible underwriting guidelines to facilitate a
secondary market for mortgages on manufactured homes
for very low-, low-, and moderate-income families.
``(B) Affordable housing preservation.--The
enterprise shall lead the industry in developing loan
products and flexible underwriting guidelines to
facilitate a secondary market to preserve housing
affordable to very low-, low-, and moderate-income
families, including housing projects subsidized under--
``(i) the project-based and tenant-based
rental assistance programs under section 8 of
the United States Housing Act of 1937;
``(ii) the program under section 236 of the
National Housing Act;
``(iii) the below-market interest rate
mortgage program under section 221(d)(4) of the
National Housing Act;
``(iv) the supportive housing for the
elderly program under section 202 of the
Housing Act of 1959;
``(v) the supportive housing program for
persons with disabilities under section 811 of
the Cranston-Gonzalez National Affordable
Housing Act; and
``(vi) the rural rental housing program
under section 515 of the Housing Act of 1949.
``(C) Rural and other underserved markets.--The
enterprise shall lead the industry in developing loan
products and flexible underwriting guidelines to
facilitate a secondary market for mortgages on housing
for very low-, low-, and moderate-income families in
rural areas, and for mortgages for housing for any
other underserved market for very low-, low-, and
moderate-income families that the Secretary identifies
as lacking adequate credit through conventional lending
sources. Such underserved markets may be identified by
borrower type, market segment, or geographic area.'';
and
(5) by adding at the end the following new subsection:
``(c) Evaluation and Reporting of Compliance.--
``(1) In general.--Not later than 6 months after the
effective date under section 185 of the Federal Housing Finance
Reform Act of 2005, the Director shall establish a manner for
evaluating whether, and the extent to which, the enterprises
have complied with the duty under subsection (a) to serve
underserved markets and for rating the extent of such
compliance. Using such method, the Director shall, for each
year, evaluate such compliance and rate the performance of each
enterprise as to extent of compliance. The Director shall
include such evaluation and rating for each enterprise for a
year in the report for that year submitted pursuant to section
1319B(a).
``(2) Separate evaluations.--In determining whether an
enterprise has complied with the duty referred to in paragraph
(1), the Director shall separately evaluate whether the
enterprise has complied with such duty with respect to each of
the underserved markets identified in subsection (a), taking
into consideration--
``(A) the development of loan products and more
flexible underwriting guidelines;
``(B) the extent of outreach to qualified loan
sellers in each of such underserved markets; and
``(C) the volume of loans purchased in each of such
underserved markets.
``(3) Manufactured housing market.--In determining whether
an enterprise has complied with the duty under subparagraph (A)
of subsection (a)(2), the Director may consider loans secured
by both real and personal property.''.
(b) Enforcement.--Subsection (a) of section 1336 of the Housing and
Community Development Act of 1992 (12 U.S.C. 4566(a)) is amended--
(1) in paragraph (1), by inserting ``and with the duty
under section 1335A of each enterprise with respect to
underserved markets,'' before ``as provided in this section,'';
and
(2) by adding at the end of such subsection, as amended by
the preceding provisions of this title, the following new
paragraph:
``(4) Enforcement of duty to provide mortgage credit to
underserved markets.--The duty under section 1335(a) of each
enterprise to serve underserved markets (as determined in
accordance with section 1335(c)) shall be enforceable under
this section to the same extent and under the same provisions
that the housing goals established under sections 1332, 1333,
and 1334 are enforceable. Such duty shall not be enforceable
under any other provision of this title (including subpart C of
this part) other than this section or under any provision of
the Federal National Mortgage Association Charter Act or the
Federal Home Loan Mortgage Corporation Act.''.
SEC. 127. MONITORING AND ENFORCING COMPLIANCE WITH HOUSING GOALS.
Section 1336 of the Housing and Community Development Act of 1992
(12 U.S.C. 4566) is amended--
(1) in subsection (b)--
(A) in the subsection heading, by inserting
``Preliminary'' before ``Determination'';
(B) by striking paragraph (1) and inserting the
following new paragraph:
``(1) Notice.--If the Director preliminarily determines
that an enterprise has failed, or that there is a substantial
probability that an enterprise will fail, to meet any housing
goal established under this subpart, the Director shall provide
written notice to the enterprise of such a preliminary
determination, the reasons for such determination, and the
information on which the Director based the determination.'';
(C) in paragraph (2)--
(i) in subparagraph (A), by inserting
``finally'' before ``determining'';
(ii) by striking subparagraphs (B) and (C)
and inserting the following new subparagraph:
``(B) Extension or shortening of period.--The
Director may--
``(i) extend the period under subparagraph
(A) for good cause for not more than 30
additional days; and
``(ii) shorten the period under
subparagraph (A) for good cause.''; and
(iii) by redesignating subparagraph (D) as
subparagraph (C); and
(D) in paragraph (3)--
(i) in subparagraph (A), by striking
``determine'' and inserting ``issue a final
determination of'';
(ii) in subparagraph (B), by inserting
``final'' before ``determinations''; and
(iii) in subparagraph (C)--
(I) by striking ``Committee on
Banking, Finance and Urban Affairs''
and inserting ``Committee on Financial
Services''; and
(II) by inserting ``final'' before
``determination'' each place such term
appears; and
(2) in subsection (c)--
(A) by striking the subsection designation and
heading and all that follows through the end of
paragraph (1) and inserting the following:
``(c) Cease and Desist Orders, Civil Money Penalties, and Remedies
Including Housing Plans.--
``(1) Requirement.--If the Director finds, pursuant to
subsection (b), that there is a substantial probability that an
enterprise will fail, or has actually failed, to meet any
housing goal under this subpart and that the achievement of the
housing goal was or is feasible, the Director may require that
the enterprise submit a housing plan under this subsection. If
the Director makes such a finding and the enterprise refuses to
submit such a plan, submits an unacceptable plan, fails to
comply with the plan or the Director finds that the enterprise
has failed to meet any housing goal under this subpart, in
addition to requiring an enterprise to submit a housing plan,
the Director may issue a cease and desist order in accordance
with section 1341, impose civil money penalties in accordance
with section 1345, or order other remedies as set forth in
paragraph (7) of this subsection.'';
(B) in paragraph (2)--
(i) by striking ``contents.--Each housing
plan'' and inserting ``housing plan.--If the
Director requires a housing plan under this
section, such a plan''; and
(ii) in subparagraph (B), by inserting
``and changes in its operations'' after
``improvements'';
(C) in paragraph (3)--
(i) by inserting ``comply with any remedial
action or'' before ``submit a housing plan'';
and
(ii) by striking ``under subsection (b)(3)
that a housing plan is required'';
(D) in paragraph (4), by striking the first two
sentences and inserting the following: ``The Director
shall review each submission by an enterprise,
including a housing plan submitted under this
subsection, and not later than 30 days after
submission, approve or disapprove the plan or other
action. The Director may extend the period for approval
or disapproval for a single additional 30-day period if
the Director determines such extension necessary.'';
and
(E) by adding at the end the following new
paragraph:
``(7) Additional remedies for failure to meet goals.--In
addition to ordering a housing plan under this section, issuing
cease and desist orders under section 1341, and ordering civil
money penalties under section 1345, the Director may seek other
actions when an enterprise fails to meet a goal, and exercise
appropriate enforcement authority available to the Director
under this Act to prohibit the enterprise from entering into
new programs and new business activities and to order the
enterprise to suspend programs and business activities pending
its achievement of the goal.''.
SEC. 128. AFFORDABLE HOUSING FUND.
(a) In General.--The Housing and Community Development Act of 1992
is amended by striking sections 1337 and 1338 (12 U.S.C. 4562 note) and
inserting the following new section:
``SEC. 1337. AFFORDABLE HOUSING FUND.
``(a) Establishment and Purpose.--Each enterprise shall establish
and manage an affordable housing fund in accordance with this section.
The purpose of the affordable housing fund shall be--
``(1) to increase homeownership for extremely low-and very
low-income families;
``(2) to increase investment in housing in low-income
areas, and areas designated as qualified census tracts or an
area of chronic economic distress pursuant to section 143(j) of
the Internal Revenue Code of 1986 (26 U.S.C. 143(j));
``(3) to increase and preserve the supply of rental and
owner-occupied housing for extremely low- and very low-income
families;
``(4) to increase investment in public infrastructure
development in connection with housing assisted under this
section; and
``(5) to leverage investments from other sources in
affordable housing and in public infrastructure development in
connection with housing assisted under this section.
``(b) Allocation of Amounts by Enterprises.--
``(1) In general.--In accordance with regulations issued by
the Director under subsection (k) and subject to paragraphs (2)
and (3) of this subsection and subsection (f)(5), each
enterprise shall allocate to the affordable housing fund
established under subsection (a) by the enterprise--
``(A) in the year in which the effective date under
section 185 of the Federal Housing Finance Reform Act
of 2005 occurs, 3.5 percent of the after-tax income of
the enterprise for the preceding year;
``(B) in the year after the year referred to in
subparagraph (A), 3.5 percent of the after-tax income
of the enterprise for the preceding year; and
``(C) in each of the first three years after the
year referred to in subparagraph (B), 5 percent of the
after-tax income of the enterprise for the preceding
year.
``(2) Limitation.--An enterprise shall not be required to
make an allocation for a year to the affordable housing fund of
the enterprise established under subsection (a) unless the
enterprise generated after-tax income for the preceding year.
``(3) Suspension of contributions.--The Director shall
temporarily suspend the allocation under paragraph (1) by an
enterprise to the affordable housing fund of the enterprise
upon a finding by the Director that such allocations--
``(A) are contributing, or would contribute, to the
financial instability of the enterprise;
``(B) are causing, or would cause, the enterprise
to be classified as undercapitalized; or
``(C) are preventing, or would prevent, the
enterprise from successfully completing a capital
restoration plan under section 1369C.
``(4) 5-year sunset and report.--
``(A) Sunset.--The enterprises shall not be
required to make allocations to the affordable housing
funds in the 5th year after the year in which the
effective date under section 185 of the Federal Housing
Finance Reform Act of 2005 occurs or in any year
thereafter.
``(B) Report on program continuance.--Not later 6
months before the end of the last year in which the
allocations are required under paragraph (1), the
Director shall submit to the Committee on Financial
Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the
Senate a report making recommendations on whether the
program under this section, including the requirement
for the enterprises to make allocations to the
affordable housing funds, should be extended and on any
modifications for the program.
``(5) Determination of after-tax income.--For purposes of
this section, the term `after-tax income' means, with respect
to an enterprise for a year, the amount reported by the
enterprise for such year in the enterprise's annual report for
such year that is filed with the Securities and Exchange
Commission, except that for any year in which no such filing is
made by an enterprise or such filing is not timely made, such
term means the amount determined by the Director based on the
income tax return filings of the enterprise.
``(c) Selection of Activities Funded Using Affordable Housing Fund
Amounts.--Amounts from the affordable housing fund of the enterprise
may be used, or committed for use, only for activities that--
``(1) are eligible under subsection (d) for such use; and
``(2) are selected for funding by the enterprise in
accordance with the process and criteria for such selection
established pursuant to subsection (k)(2)(C).
``(d) Eligible Activities.--Amounts from the affordable housing
fund of an enterprise shall be eligible for use, or for commitment for
use, only for assistance for--
``(1) the production, preservation, and rehabilitation of
rental housing, including housing under the programs identified
in section 1335(a)(2)(B), except that amounts provided from the
Fund may be used for the benefit only of extremely low- and
very low-income families;
``(2) the production, preservation, and rehabilitation of
housing for homeownership, including such forms as downpayment
assistance, closing cost assistance, and assistance for
interest-rate buy-downs, that--
``(A) is available for purchase only for use as a
principal residence by families that qualify both as--
``(i) extremely low- and very-low income
families at the times described in
subparagraphs (A) through (C) of section
215(b)(2) of the Cranston-Gonzalez National
Affordable Housing Act (42 U.S.C. 12745(b)(2));
and
``(ii) first-time homebuyers, as such term
is defined in section 104 of the Cranston-
Gonzalez National Affordable Housing Act (42
U.S.C. 12704), except that any reference in
such section to assistance under title II of
such Act shall for purposes of this section be
considered to refer to assistance from the
affordable housing fund of the enterprise;
``(B) has an initial purchase price that meets the
requirements of section 215(b)(1) of the Cranston-
Gonzalez National Affordable Housing Act; and
``(C) is subject to the same resale restrictions
established under section 215(b)(3) of the Cranston-
Gonzalez National Affordable Housing Act and applicable
to the participating jurisdiction that is the State in
which such housing is located; and
``(3) public infrastructure development activities in
connection with housing activities funded under paragraph (1)
or (2).
``(e) Eligible Recipients.--
``(1) In general.--Amounts from the affordable housing fund
of an enterprise may be provided only to a recipient that is an
organization, agency, or other entity (including a for-profit
entity, a nonprofit entity, a federally recognized tribe, an
Alaskan Native village, and a faith-based organization) that--
``(A) has a demonstrated capacity for carrying out
activities of the type that are to be funded with such
affordable housing fund amounts; and
``(B) makes such assurances to the enterprise as
the Director shall, by regulation, require to ensure
that the recipient will comply with the requirements of
this section (including, in the case of any
organization, agency, or entity subject to paragraph
(2), all of the requirements specified under such
paragraph) during the entire period that begins upon
selection of the recipient to receive amounts from the
affordable housing fund of the enterprise and ending
upon the conclusion of all activities under subsection
(d) that are engaged in by the recipient and funded
with such affordable housing fund amounts; and
``(C) in the case of any recipient who is not a
for-profit entity or a government agency or authority,
complies with all of the requirements under paragraph
(2).
``(2) Additional requirements for recipients other than
for-profit entities.--The requirements under this paragraph
with respect to any organization, agency, or entity that is not
a for-profit entity or a government agency or authority are
that the organization, agency, or entity--
``(A) shall have as its primary purpose the
provision of affordable housing, as defined by the
Director;
``(B) shall make such assurances to the enterprise
as the Director shall, by regulation, require to ensure
that such affordable housing fund amounts--
``(i) are used only to supplement, and to
the extent practical, to increase the level of
funds that would, in the absence of amounts
made available from the affordable housing
fund, be made available from other sources for
the recipient to carry out activities of the
type that are eligible under subsection (d) for
funding with affordable housing fund amounts;
and
``(ii) are not in any case used so as to
supplant any funds from other sources that are
made available for such activities of the
recipient; and
``(C) does not, at the time during the period that
begins 12 months before submission of an application
for funding from the affordable housing fund of the
enterprise and ending upon the expiration of the period
referred to in paragraph (1)(B)--
``(i) engage in any Federal election
activity, as such term is defined in paragraph
(20) of section 301 of the Federal Election
Campaign Act of 1971 (2 U.S.C. 431(20)), except
that, notwithstanding the 120-day limitation in
subparagraph (A)(i) of such paragraph, such
term shall include voter registration activity
during any period;
``(ii) make any expenditure for any
electioneering communication (as such term is
defined in section 304(f)(3) of the Federal
Election Campaign Act of 1971 (2 U.S.C.
434(f)(3));
``(iii) make any lobbying expenditure, (as
such term is defined in such section
501(h)(2)), except that this clause shall not
apply to any such expenditure by an
organization described in section 501(c)(3) of
the Internal Revenue Code of 1986 that is
exempt from taxation under subsection (a) of
such section 501, to the extent that such
expenditure does not exceed the amount under
such Code for which such exemption may be
denied; or
``(iv) maintain any affiliation with any
organization, agency, or other entity that does
not comply with clauses (i), (ii), and (iii) of
this subparagraph.
``(3) Affiliation.--
``(A) In general.--A recipient organization,
agency, or entity shall be considered to be affiliated
with another entity, for purposes of paragraph (2), if
such recipient entity controls, is controlled by, or is
under common control with such other entity.
``(B) Control.--The existence of any of the
following relationships between a recipient entity and
another entity shall indicate that control exists for
purposes of subparagraph (A):
``(i) Overlapping board membership.--
Individuals serve in a similar capacity as
officers, executives, or staff of both the
recipient entity and the other entity.
``(ii) Shared resources.--The recipient
entity and the other entity share office space,
staff members, supplies, resources, or
marketing materials, including Internet and
other forms of public communication.
``(iii) Funding.--The recipient entity
receives more than 20 percent of its total
funding from such other entity or provides more
than 20 percent of the total funding of such
other entity.
``(iv) Other.--The recipient entity or such
other entity exhibits any other indicia of
substantial overlap or common control as may be
set forth in regulation by the Director.
``(4) For profit.--For purposes of this subsection, the
term `for-profit entity' means any entity any part of the net
earnings of which inure to the benefit of any private
shareholder, member, founder, contributor, or individual.
``(f) Limitations on Use.--
``(1) Required amount for refcorp.--Of any amounts
allocated pursuant to subsection (b) in each year to the
affordable housing fund of an enterprise, 25 percent shall be
used as provided in section 21B(f)(2)(E) of the Federal Home
Loan Bank Act (12 U.S.C. 1441b(f)(2)(E)).
``(2) Required amount for homeownership activities.--Of any
amounts allocated pursuant to subsection (b) in each year to
the affordable housing fund of an enterprise, not less than 10
percent shall be used for activities under paragraph (2) of
subsection (d).
``(3) Maximum amount for public infrastructure development
activities in connection with affordable housing activities.--
Of any amounts allocated pursuant to subsection (b) in each
year to the affordable housing fund of an enterprise, not more
than 12.5 percent may be used for activities under paragraph
(3) of subsection (d).
``(4) Deadline for commitment or use.--Any amounts
allocated to the affordable housing fund of an enterprise shall
be used or committed for use within two years of the date of
such allocation.
``(5) Use of returns.--The Director shall, by regulation--
``(A) provide that any return on a loan or other
investment of any amounts allocated pursuant to
subsection (b) to the affordable housing fund of an
enterprise shall count against the allocation required
under subsection (b) to be made by the enterprise for
the year following such return; and
``(B) establish such limitations as may be
necessary to ensure that the amount or likelihood of
return is not the primary consideration of awarding of
allocated amounts to recipients.
``(6) Prohibited uses.--The Director shall--
``(A) by regulation, set forth prohibited uses of
amounts from the affordable housing funds of the
enterprises, which shall include use for--
``(i) political activities;
``(ii) advocacy;
``(iii) lobbying, whether directly or
through other parties;
``(iv) counseling services;
``(v) travel expenses; and
``(vi) preparing or providing advice on tax
returns;
``(B) by regulation, provide that, except as
provided in subparagraph (C), amounts allocated to the
affordable housing fund of an enterprise may not be
used for administrative, outreach, or other costs of--
``(i) the enterprise; or
``(ii) any recipient of amounts from the
affordable housing fund; and
``(C) by regulation, limit the amount of any such
contributions that may be used for administrative costs
of the enterprise of maintaining the affordable housing
fund and carrying out the program under this section.
``(7) Prohibition of consideration of use for meeting
housing goals.--In determining compliance with the housing
goals under this subpart, the Director may not consider amounts
used under this section for eligible activities under
subsection (d). The Director shall give credit toward the
achievement of such housing goals to purchases of mortgages for
housing that receives funding under this section, but only to
the extent that such purchases are funded other than under this
section.
``(8) Prohibition on certain redistribution of amounts.--
The Director shall, by regulation, ensure that amounts from the
affordable housing fund of an enterprise awarded under this
section to a national nonprofit housing intermediary are not
redistributed to other nonprofit entities.
``(g) Accountability of Recipients and Enterprises.--
``(1) Recipients.--
``(A) Tracking of funds.--The Director shall--
``(i) require each enterprise to develop
and maintain a system to ensure that each
recipient of amounts from the affordable
housing fund of the enterprise 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
``(ii) establish minimum requirements for
agreements, between the enterprises and
recipients, regarding grants from the
affordable housing funds of the enterprises,
which shall include--
``(I) appropriate continuing
financial and project reporting, record
retention, and audit requirements for
the duration of the grant to ensure
compliance with the limitations and
requirements of this section and the
regulation under this section; and
``(II) any other requirements that
the Director determines are necessary
to ensure appropriate grant
administration and compliance.
``(B) Misuse of funds.--If an enterprise determines
that any recipient of amounts from the affordable
housing fund of the enterprise has used any such
amounts in a manner that is materially in violation of
this section, the regulations issued under this
section, or any requirements or conditions under which
such amounts were provided--
``(i) the enterprise shall notify the
Director of such misuse of amounts and the
actions taken under this subparagraph with
respect to the recipient;
``(ii) such recipient shall be ineligible
in perpetuity to receive of any further amounts
from the affordable housing fund of such
enterprise; and
``(iii) the enterprise shall require the
recipient to reimburse the enterprise for such
misused amounts and return to the enterprise
any amounts from the affordable housing fund of
the enterprise that remain unused or
uncommitted for use.
The remedies under this subparagraph are in addition to
any other remedies that may be available under law.
``(2) Enterprises.--
``(A) Quarterly reports.--The Director shall
require each enterprise to submit a report, on a
quarterly basis, to the Director and the affordable
housing board established under subsection (j)
describing the activities funded under this section
during such quarter with amounts from the affordable
housing fund of the enterprise established under this
section. The Director shall make such reports publicly
available. The affordable housing board shall review
each report by an enterprise to determine the
consistency of such activities funded with the criteria
for selection of such activities established pursuant
to subsection (k)(2)(C).
``(B) Replenishment.--If the Director determines
that an activity funded by an enterprise with amounts
from the affordable housing fund of the enterprise is
not consistent with the criteria established pursuant
to subsection (k)(2)(C), the Director shall require the
enterprise to allocate to such affordable housing fund
(in addition to amounts allocated in compliance with
subsection (b)) an amount equal to the sum of the
amounts from the affordable housing fund used and
further committed for use for such activity.
``(h) Capital Requirements.--The utilization or commitment of
amounts from the affordable housing fund of an enterprise shall not be
subject to the risk-based capital requirements established pursuant to
section 1361(a).
``(i) Reporting Requirement.--Each enterprise shall include, in the
report required under section 309(m) of the Federal National Mortgage
Association Charter Act or section 307(f) of the Federal Home Loan
Mortgage Corporation Act, as applicable, a description of the actions
taken by the enterprise to utilize or commit amounts allocated under
this section to the affordable housing fund of the enterprise
established under this section.
``(j) Affordable Housing Board.--
``(1) Appointment.--The Director shall appoint an
affordable housing board of 7, 9, or 11 persons, who shall
include--
``(A) the Director, or the Director's designee;
``(B) the Secretary of Housing and Urban
Development, or the Secretary's designee;
``(C) the Secretary of Agriculture, or the
Secretary's designee;
``(D) 2 persons from for-profit organizations or
businesses actively involved in providing or promoting
affordable housing for extremely low- and very low-
income households; and
``(E) 2 persons from nonprofit organizations
actively involved in providing or promoting affordable
housing for extremely low- and very low-income
households.
``(2) Terms.--
``(A) In general.--Except as provided in
subparagraph (B), the term of each member of the
affordable housing board appointed pursuant to
paragraph (1) (but not including members appointed
pursuant to subparagraphs (A), (B), and (C)) shall be 3
years.
``(B) Initial appointees.--The Director shall
appoint the initial members of the affordable housing
board not later than the expiration of the 60-day
period beginning on the effective date under section
185 of the Federal Housing Finance Reform Act of 2005.
As designated by the Director at the time of
appointment, of the members of the affordable housing
board first appointed pursuant to paragraph (1) (but
not including members appointed pursuant to
subparagraphs (A), (B), and (C))--
``(i) in the case of a board having 7
members--
``(I) one shall be appointed for a
term of one year; and
``(II) one shall be appointed for a
term of two years;
``(ii) in the case of a board having 9
members--
``(I) two shall be appointed for a
term of one year; and
``(II) two shall be appointed for a
term of two years; and
``(iii) in the case of a board having 11
members--
``(I) two shall be appointed for a
term of one year; and
``(II) three shall be appointed for
a term of two years;
``(3) Duties.--The duties of the affordable housing board
shall be--
``(A) to determine extremely low- and very low-
income housing needs;
``(B) to advise the Director with respect to--
``(i) establishment of the selection
criteria under subsection (k)(2)(C) that
provide for appropriate use of amounts from the
affordable housing funds of the enterprises to
meet such needs; and
``(ii) operation of, and changes to, the
program under this section appropriate to meet
such needs; and
``(C) to review the reports submitted by the
enterprises pursuant to subsection (g)(1) to determine
whether the activities funded using amounts from the
affordable housing funds of the enterprises comply with
the regulations issued pursuant to subsection (k)(2)(C)
and inform the Director of such determinations, for
purposes of subsection (g)(2).
``(4) Meetings.--The board shall meet not less than
quarterly, except that during the 2-year period referred to in
paragraph (7), the board shall meet only as the Director
determines necessary.
``(5) Expenses and per diem.--Members of the board shall
receive travel expenses, including per diem in lieu of
subsistence, in accordance with sections 5702 and 5703 of title
5, United States Code.
``(6) Advisory committee.--The board shall be considered an
advisory committee for purposes of the Federal Advisory
Committee Act (5 U.S.C. App.).
``(7) Termination.-- The board shall terminate upon the
expiration of the 2-year period that begins upon the conclusion
of the last year referred to in subsection (b)(1)(C).
``(k) Regulations.--
``(1) In general.--The Director shall issue regulations to
carry out this section.
``(2) Required contents.--The regulations issued under this
subsection shall include--
``(A) authority for the Director to audit, provide
for an audit, or otherwise verify an enterprise's
activities, to ensure compliance with this section;
``(B) a requirement that the Director ensure that
the affordable housing fund of each enterprise is
audited not less than annually to ensure compliance
with this section;
``(C) requirements for a process for application
to, and selection by, an enterprise for activities to
be funded with amounts from the affordable housing
fund, which shall provide that--
``(i) selection shall be based upon
specific criteria, which shall provide that--
``(I) in any selection of
activities occurring during the 2-year
period beginning on the effective date
under section 185 of the Federal
Housing Finance Reform Act of 2005,
additional weight shall be given to
applications for eligible activities
under subsection (d) that--
``(aa) are to be carried
out in any area that was
declared by the President as a
major disaster area pursuant to
the Robert T. Stafford Disaster
Relief and Emergency Assistance
Act as result of Hurricane
Katrina or Hurricane Rita in
2005; or
``(bb) the enterprise
determines, in accordance with
regulations issued by the
Director, serve persons
significantly affected by the
occurrence of Hurricane Katrina
or Hurricane Rita in 2005
(including persons displaced as
a result of such hurricanes and
persons whose affordable
housing opportunities are
significantly affected by the
presence of persons displaced
as a result of such
hurricanes); and
``(II) taking into consideration
any additional weight afforded
applications pursuant to subclause (I),
priority in funding shall be based
upon--
``(aa) whether activities
are to be carried out in any
area that, not more than 2
years before such selection,
was declared by the President
as a major disaster area
pursuant to the Robert T.
Stafford Disaster Relief and
Emergency Assistance Act;
``(bb) greatest impact;
``(cc) geographic
diversity;
``(dd) ability to obligate
amounts and undertake
activities so funded in a
timely manner;
``(ee) in the case of
rental housing projects under
subsection (d)(1), the extent
to which rents for units in the
project funded are affordable,
especially for extremely low-
income families; and
``(ff) in the case of
rental housing projects under
subsection (d)(1), the extent
of the duration for which such
rents will remain affordable;
and
``(ii) an enterprise may not require for
such selection that an activity involve
financing or underwriting of any kind by the
enterprise (other than funding through the
affordable housing fund of the enterprise) and
may not give preference in such selection to
activities that involve such financing;
``(D) requirements to ensure that amounts from the
affordable housing funds of the enterprises used for
rental housing under subsection (d)(1) are used only
for the benefit of extremely low- and very-low income
families; and
``(E) limitations on public infrastructure
development activities that are eligible pursuant to
subsection (d)(3) for funding with amounts from the
affordable housing funds of the enterprises and
requirements for the connection between such activities
and housing activities funded under paragraph (1) or
(2) of subsection (d).
``(l) Enforcement.--Compliance by the enterprises with the
requirements under this section shall be enforceable under subpart C.
Any reference in such subpart to this part or to an order, rule, or
regulation under this part specifically includes this section and any
order, rule, or regulation under this section.''.
(b) Contributions for Transition Period.--
(1) Reservation and contribution; prohibition of double
contributions.--If the date of the enactment of this Act does
not occur in the same calendar year as the effective date under
section 185 of this Act, each enterprise (as such term is
defined in section 1303 of the Housing and Community
Development Act of 1992) shall, in the year that such date of
enactment occurs, reserve for contribution to the affordable
housing fund to be established by the enterprise pursuant to
section 1337 of such Act (as amended by subsection (a) of this
section) an amount equal to 3.5 percent of the after-tax income
of the enterprise for the preceding year. Upon the
establishment of such affordable housing fund, each enterprise
shall allocate to such fund the amounts reserved under this
paragraph by the enterprise.
(2) Exception to deadline for commitment.--Section
1337(f)(4) of the Housing and Community Development Act of 1992
(as amended by subsection (a) of this section) shall not apply
to any amounts allocated to the affordable housing fund of an
enterprise pursuant to paragraph (1) of this subsection.
(3) After-tax income.--For purposes of this subsection, the
term ``after-tax income'' has the meaning provided in
subsection (b)(5) of the new section 1337 to be inserted by the
amendment made by subsection (a) of this section.
(4) Effective date.--This subsection shall take effect on
the date of the enactment of this Act.
(c) REFCORP Payments.--Section 21B(f)(2) of the Federal Home Loan
Bank Act (12 U.S.C. 1441b(f)(2)) is amended--
(1) in subparagraph (E), by striking ``and (D)'' and
inserting ``(D), and (E)'';
(2) by redesignating subparagraph (E) as subparagraph (F);
and
(3) by inserting after subparagraph (D) the following new
subparagraph:
``(E) Payments by fannie mae and freddie mac.--To
the extent that the amounts available pursuant to
subparagraphs (A), (B), (C), and (D) are insufficient
to cover the amount of interest payments, each
enterprise (as such term is defined in section 1303 of
the Housing and Community Development Act of 1992 (42
U.S.C. 4502)) shall transfer to the Funding Corporation
in each calendar year the amounts allocated for use
under this subparagraph pursuant to section 1337(f)(1)
of such Act.''.
SEC. 129. CONSISTENCY WITH MISSION.
Subpart B of part 2 of subtitle A of title XIII of the Housing and
Community Development Act of 1992 (12 U.S.C. 4561 et seq.) is amended
by adding after section 1337, as added by section 127 of this Act, the
following new section:
``SEC. 1338. CONSISTENCY WITH MISSION.
``This subpart may not be construed to authorize an enterprise to
engage in any program or activity that contravenes or is inconsistent
with the Federal National Mortgage Association Charter Act or the
Federal Home Loan Mortgage Corporation Act.''.
SEC. 130. ENFORCEMENT.
(a) Cease-and-Desist Proceedings.--Section 1341 of the Housing and
Community Development Act of 1992 (12 U.S.C. 4581) is amended--
(1) by striking subsection (a) and inserting the following
new subsection:
``(a) Grounds for Issuance.--The Director may issue and serve a
notice of charges under this section upon an enterprise if the Director
determines--
``(1) the enterprise has failed to meet any housing goal
established under subpart B, following a written notice and
determination of such failure in accordance with section 1336;
``(2) the enterprise has failed to submit a report under
section 1314, following a notice of such failure, an
opportunity for comment by the enterprise, and a final
determination by the Director;
``(3) the enterprise has failed to submit the information
required under subsection (m) or (n) of section 309 of the
Federal National Mortgage Association Charter Act, or
subsection (e) or (f) of section 307 of the Federal Home Loan
Mortgage Corporation Act;
``(4) the enterprise has violated any provision of this
part or any order, rule or regulation under this part;
``(5) the enterprise has failed to submit a housing plan
that complies with section 1336(c) within the applicable
period; or
``(6) the enterprise has failed to comply with a housing
plan under section 1336(c).'';
(2) in subsection (b)(2), by striking ``requiring the
enterprise to'' and all that follows through the end of the
paragraph and inserting the following: ``requiring the
enterprise to--
``(A) comply with the goal or goals;
``(B) submit a report under section 1314;
``(C) comply with any provision this part or any
order, rule or regulation under such part;
``(D) submit a housing plan in compliance with
section 1336(c);
``(E) comply with a housing plan submitted under
section 1336(c); or
``(F) provide the information required under
subsection (m) or (n) of section 309 of the Federal
National Mortgage Association Charter Act or subsection
(e) or (f) of section 307 of the Federal Home Loan
Mortgage Corporation Act, as applicable.'';
(3) in subsection (c), by inserting ``date of the'' before
``service of the order''; and
(4) by striking subsection (d).
(b) Authority of Director to Enforce Notices and Orders.--Section
1344 of the Housing and Community Development Act of 1992 (12 U.S.C.
4584) is amended by striking subsection (a) and inserting the following
new subsection:
``(a) Enforcement.--The Director may, in the discretion of the
Director, apply to the United States District Court for the District of
Columbia, or the United States district court within the jurisdiction
of which the headquarters of the enterprise is located, for the
enforcement of any effective and outstanding notice or order issued
under section 1341 or 1345, or request that the Attorney General of the
United States bring such an action. Such court shall have jurisdiction
and power to order and require compliance with such notice or order.''.
(c) Civil Money Penalties.--Section 1345 of the Housing and
Community Development Act of 1992 (12 U.S.C. 4585) is amended--
(1) by striking subsections (a) and (b) and inserting the
following new subsections:
``(a) Authority.--The Director may impose a civil money penalty, in
accordance with the provisions of this section, on any enterprise that
has failed to--
``(1) meet any housing goal established under subpart B,
following a written notice and determination of such failure in
accordance with section 1336(b);
``(2) submit a report under section 1314, following a
notice of such failure, an opportunity for comment by the
enterprise, and a final determination by the Director;
``(3) submit the information required under subsection (m)
or (n) of section 309 of the Federal National Mortgage
Association Charter Act, or subsection (e) or (f) of section
307 of the Federal Home Loan Mortgage Corporation Act;
``(4) comply with any provision of this part or any order,
rule or regulation under this part;
``(5) submit a housing plan pursuant to section 1336(c)
within the required period; or
``(6) comply with a housing plan for the enterprise under
section 1336(c).
``(b) Amount of Penalty.--The amount of the penalty, as determined
by the Director, may not exceed--
``(1) for any failure described in paragraph (1), (5), or
(6) of subsection (a), $50,000 for each day that the failure
occurs; and
``(2) for any failure described in paragraph (2), (3), or
(4) of subsection (a), $20,000 for each day that the failure
occurs.'';
(2) in subsection (c)--
(A) in paragraph (1)--
(i) in subparagraph (A), by inserting
``and'' after the semicolon at the end;
(ii) in subparagraph (B), by striking ``;
and'' and inserting a period; and
(iii) by striking subparagraph (C); and
(B) in paragraph (2), by inserting after the period
at the end the following: ``In determining the penalty
under subsection (a)(1), the Director shall give
consideration to the length of time the enterprise
should reasonably take to achieve the goal.'';
(3) in the first sentence of subsection (d)--
(A) by striking ``request the Attorney General of
the United States to'' and inserting ``, in the
discretion of the Director,''; and
(B) by inserting ``, or request that the Attorney
General of the United States bring such an action''
before the period at the end;
(4) by striking subsection (f); and
(5) by redesignating subsection (g) as subsection (f).
(d) Enforcement of Subpoenas.--Section 1348(c) of the Housing and
Community Development Act of 1992 (12 U.S.C. 4588(c)) is amended--
(1) by striking ``request the Attorney General of the
United States to'' and inserting ``, in the discretion of the
Director,''; and
(2) by inserting ``or request that the Attorney General of
the United States bring such an action,'' after ``District of
Columbia,''
(e) Conforming Amendment.--The heading for subpart C of part 2 of
subtitle A of the Housing and Community Development Act of 1992 is
amended to read as follows:
``Subpart C--Enforcement''.
SEC. 131. CONFORMING AMENDMENTS.
Part 2 of subtitle A of title XIII of the Housing and Community
Development Act of 1992 (12 U.S.C. 4541 et seq.) is amended--
(1) by striking ``Secretary'' each place such term appears
in such part and inserting ``Director'';
(2) in the section heading for section 1323 (12 U.S.C.
4543), by inserting ``of enterprises'' before the period at the
end;
(3) by striking section 1327 (12 U.S.C. 4547);
(4) by striking section 1328 (12 U.S.C. 4548);
(5) in sections 1345(c)(1)(A) and 1346(b) (12 U.S.C.
4585(c)(1)(A), 4586(b)), by striking ``Secretary's'' each place
such term appears and inserting ``Director's''; and
(6) by striking section 1349 (12 U.S.C. 4589).
Subtitle C--Prompt Corrective Action
SEC. 141. CAPITAL CLASSIFICATIONS.
(a) In General.--Section 1364 of the Housing and Community
Development 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
``subsection (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
new subsections:
``(b) Federal Home Loan Banks.--
``(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
classification 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, in the case of an enterprise, that
the value of the property subject to mortgages held or
securitized by the 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
subsection, 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 undercapitalized.''; and
(5) by inserting after subsection (d) (as so redesignated
by paragraph (3) of this subsection), the following new
subsection:
``(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.
``(2) Exception.--Notwithstanding paragraph (1), the
Director may permit a regulated entity, to the extent
appropriate 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
additional shares or obligations of the regulated
entity in at least an equivalent amount; and
``(B) will reduce the financial obligations of the
regulated 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 effective date under section 185, the Director
of the Federal Housing Finance Agency shall issue regulations to carry
out section 1364(b) of the Housing and Community Development Act of
1992 (as added by paragraph (4) of this subsection), relating to
capital classifications for the Federal home loan banks.
SEC. 142. SUPERVISORY ACTIONS APPLICABLE TO UNDERCAPITALIZED REGULATED
ENTITIES.
Section 1365 of the Housing and Community Development Act of 1992
(12 U.S.C. 4615) is amended--
(1) in the section heading, by striking ``enterprises'' and
inserting ``regulated entities'';
(2) in subsection (a)--
(A) by redesignating paragraphs (1) and (2) as
paragraphs (2) and (3), respectively;
(B) by inserting before paragraph (2) the following
paragraph:
``(1) Required monitoring.--The Director shall--
``(A) closely monitor the condition of any
regulated entity that is classified as
undercapitalized;
``(B) closely monitor compliance with the capital
restoration plan, restrictions, and requirements
imposed under this section; and
``(C) periodically review the plan, restrictions,
and requirements applicable to the undercapitalized
regulated entity to determine whether the plan,
restrictions, and requirements are achieving the
purpose of this section.''; and
(C) by inserting at the end the following new
paragraphs:
``(4) Restriction of asset growth.--A regulated entity that
is classified as undercapitalized shall not permit its average
total assets (as such term is defined in section 1316(b) 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 plan; and
``(C) the ratio of total capital to assets for the
regulated entity increases during the calendar quarter
at a rate sufficient to enable the entity to become
adequately capitalized within a reasonable time.
``(5) Prior approval of acquisitions, new programs, and new
business activities.--A regulated entity that is classified as
undercapitalized shall not, directly or indirectly, acquire any
interest in any entity or engage in any new program or new
business activity unless--
``(A) the Director has accepted the capital
restoration plan of the regulated entity, the entity is
implementing 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 section.'';
(3) in the subsection heading for subsection (b), by
striking ``From Undercapitalized to Significantly
Undercapitalized''; and
(4) by striking subsection (c) and inserting the following
new subsection:
``(c) Other Discretionary Safeguards.--The Director may take, with
respect to a regulated entity that is classified as undercapitalized,
any of the actions authorized to be taken under section 1366 with
respect to a regulated entity that is classified as significantly
undercapitalized, if the Director determines that such actions are
necessary to carry out the purpose of this subtitle.''.
SEC. 143. SUPERVISORY ACTIONS APPLICABLE TO SIGNIFICANTLY
UNDERCAPITALIZED REGULATED ENTITIES.
Section 1366 of the Housing and Community Development Act of 1992
(12 U.S.C. 4616) is amended--
(1) in the section heading, by striking ``enterprises'' and
inserting ``entities'';
(2) in subsection (a)(2)(A), by striking ``enterprise'' the
last place such term appears;
(3) in subsection (b)--
(A) in the subsection heading, by striking
``Discretionary Supervisory Actions'' and inserting
``Specific Actions'';
(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,
one or more'';
(C) by redesignating paragraphs (5) and (6) as
paragraphs (6) and (7), respectively;
(D) by inserting after paragraph (4) the following
new paragraph:
``(5) Improvement of management.--Take one or more of the
following actions:
``(A) New election of board.--Order a new election
for the board of directors of the regulated entity.
``(B) Dismissal of directors or executive
officers.--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
entity became undercapitalized. Dismissal under this
subparagraph shall not be construed to be a removal
pursuant to the Director's enforcement powers provided
in 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
(E) by inserting at the end the following new
paragraph:
``(8) 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 actions
specified in this paragraph.'';
(4) by redesignating subsection (c) as subsection (d); and
(5) by inserting after subsection (b) the following new
subsection:
``(c) Restriction on Compensation of Executive Officers.--A
regulated entity that is classified as significantly undercapitalized
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 that officer's average rate of compensation
(excluding bonuses, stock options, and profit sharing) during
the 12 calendar months preceding the calendar month in which
the regulated entity became undercapitalized.''.
SEC. 144. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED REGULATED
ENTITIES.
(a) In General.--Section 1367 of the Housing and Community
Development Act of 1992 (12 U.S.C. 4617) is amended to read as follows:
``SEC. 1367. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED REGULATED
ENTITIES.
``(a) Appointment of Agency as Conservator or Receiver.--
``(1) In general.--Notwithstanding any other provision of
Federal or State law, if any of the grounds under paragraph (3)
exist, at the discretion of the Director, the Director may
establish a conservatorship or receivership, as appropriate,
for the purpose of reorganizing, rehabilitating, or winding up
the affairs of a regulated entity.
``(2) Appointment.--In any conservatorship or receivership
established under this section, the Director shall appoint the
Agency as conservator or receiver.
``(3) Grounds for appointment.--The grounds for appointing
a conservator or receiver for a regulated entity 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
dissipation of assets or earnings due to--
``(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 business.
``(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
condition 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, consents to the appointment.
``(J) Undercapitalization.--The regulated entity is
undercapitalized or significantly undercapitalized (as
defined in section 1364(a)(3) or in regulations issued
pursuant to section 1364(b), as applicable), and--
``(i) has no reasonable prospect of
becoming adequately capitalized;
``(ii) fails to become adequately
capitalized, as required by--
``(I) section 1365(a)(1) with
respect to an undercapitalized
regulated entity; or
``(II) section 1366(a)(1) with
respect to a significantly
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 restoration plan submitted and accepted
under section 1369C.
``(K) Critical undercapitalization.--The regulated
entity is critically undercapitalized, as defined in
section 1364(a)(4) or in regulations issued pursuant to
section 1364(b), as applicable.
``(L) Money laundering.--The Attorney General
notifies 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) Judicial review.--
``(A) In general.--If the Agency is appointed
conservator 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
principal place of business 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.
``(5) Directors not liable for acquiescing in appointment
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.
``(6) 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.
``(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 regulated 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 regulated entity;
``(iii) perform all functions of the
regulated entity in the name of the regulated
entity which are consistent with the
appointment as conservator or receiver; and
``(iv) preserve and conserve the assets and
property of such regulated entity.
``(C) Functions of officers, directors, and
shareholders 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.--The Agency
may, as receiver, place the regulated entity in
liquidation and proceed to realize upon the assets of
the regulated entity, having due regard to the
conditions of the housing finance market.
``(F) Organization of new regulated entities.--The
Agency may, as receiver, organize a successor regulated
entity that will operate pursuant to subsection (i).
``(G) Transfer of assets and liabilities.--The
Agency may, as conservator or receiver, transfer any
asset or liability of the regulated entity in default
without any approval, assignment, or consent with
respect to such transfer. Any Federal home loan bank
may, with the approval of the Agency, acquire the
assets of any Bank in conservatorship or receivership,
and assume the liabilities of such Bank.
``(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 in accordance with
the prescriptions and limitations of this section.
``(I) Subpoena authority.--
``(i) In general.--
``(I) In general.--The Agency may,
as conservator or receiver, and for
purposes of carrying out any power,
authority, or duty with respect to a
regulated entity (including determining
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 exercised under this subparagraph
in the same manner as such provisions
apply under that section.
``(ii) Authority of director.--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 1379D.
``(J) Contracting for services.--The Agency may, as
conservator or receiver, provide by contract for the
carrying out of any of its functions, activities,
actions, or duties as conservator or receiver.
``(K) Incidental powers.--The Agency may, as
conservator 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.
``(3) Authority of receiver to determine claims.--
``(A) In general.--The Agency may, as receiver,
determine 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
publication of such notice; and
``(ii) republish such notice approximately
1 month and 2 months, respectively, after the
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 prescribe
regulations regarding the allowance or disallowance of claims
by the receiver and providing for administrative determination
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 claimant 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
notification requirements of clause (i) shall
be deemed to be satisfied if the notice of any
determination with respect to any 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 disallowance; 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), or the date specified in the notice required
under paragraph (3)(C), which is proved to the
satisfaction of the receiver.
``(C) Disallowance of claims filed after end of
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 disallowance 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 satisfaction 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 any
extension of credit from any Federal Reserve
Bank, Federal home loan bank, or the Treasury
of the United States.
``(E) No judicial review of determination pursuant
to subparagraph (D).--No court may review the
determination of the Agency under subparagraph (D) to
disallow a claim. This subparagraph shall not effect
the authority of a claimant to obtain de novo judicial
review of a claim pursuant to paragraph (6).
``(F) 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 commencement 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
determination 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
appointment of the receiver) in the district or
territorial court of the United States for the district
within which the principal 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
disallowance 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 appointment 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 procedures which are
expeditious, fair, independent, and low cost.
``(iii) Voluntary binding or nonbinding
procedures.--The Agency may establish both
binding and nonbinding processes, 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--
``(i) allege the existence of legally valid
and enforceable 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 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 paragraph (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 appointment of the receiver, seeking a
determination 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 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 commencement 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 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--
``(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 official of the regulated
entity, except that such requirements for qualified
financial contracts shall be applied in a manner
consistent with reasonable business trading practices
in the financial contracts market.
``(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 regulated entities 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
conservator 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 any conservator or receiver
under subparagraph (A) for a stay of any judicial
action or proceeding 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 shall--
``(i) have all the rights and remedies
available 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) 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
possession of the 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 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 operations in a manner which
maintains stability in the housing finance markets and,
to the extent consistent with that goal--
``(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 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 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 subparagraph (B) for which the statute
of limitations 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 limitation applicable
under State law.
``(B) Claims described.--A tort claim referred to
under subparagraph (A) is a claim arising from fraud,
intentional misconduct resulting in unjust enrichment,
or intentional misconduct 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, maintain a full accounting of each
conservatorship and receivership 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 that the
conservatorship or receivership is terminated by the
Director, the Agency may destroy any records of such
regulated 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 governmental 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 a
regulated entity-affiliated party, or any person who
the conservator or receiver determines is 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 regulated 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
conservator 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
``(ii) any immediate or mediate good faith
transferee 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 Agency or such conservator 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 contracts
executed by the receiver or conservator.--
``(A) In general.--Notwithstanding any other
provision of this subsection, any final and
unappealable judgment for monetary damages entered
against a receiver or conservator for the breach of an
agreement executed or approved in writing by such
receiver or conservator after the date of its
appointment, shall be paid as an administrative expense
of the receiver or conservator.
``(B) No limitation of power.--Nothing in this
paragraph shall be construed to limit the power of a
receiver or conservator 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 a 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 Corporation 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, custodial, or agency capacity by
a regulated entity for the benefit of persons
other than the regulated entity shall not be
available to satisfy the claims of creditors
generally.
``(ii) Holding of mortgages.--Any mortgage,
pool of mortgages, or interest in a pool of
mortgages, described under clause (i) shall be
held by the conservator or receiver appointed
under this section for the beneficial owners of
such mortgage, pool of mortgages, or interest
in a pool of mortgages in accordance with the
terms of the agreement creating such trust,
custodial, or other agency arrangement.
``(iii) Liability of receiver.--The
liability of a 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 set forth in the regulations of the
Director.
``(c) Priority of Expenses and Unsecured Claims.--
``(1) In general.--Unsecured claims against a regulated
entity, or a receiver, that are proven to the satisfaction 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
regulated entity and claims of other Federal home loan
banks arising from their payment obligations (including
joint and several payment obligations).
``(C) Any obligation subordinated to general
creditors.
``(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 Agency may make such other
payments to creditors necessary to maximize the present value
return from the sale or disposition or such regulated entity's
assets or to minimize the amount of any loss realized in the
resolution of cases so long as all creditors similarly situated
receive not less than the amount provided under subsection
(e)(2).
``(3) Definition.--The term `administrative expenses of the
receiver' shall include the actual, necessary costs and
expenses incurred by the receiver in preserving the assets of
the regulated entity or liquidating or otherwise resolving the
affairs of the regulated entity. Such expenses shall include
obligations that are incurred by the receiver after appointment
as receiver that the Director 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
conservator 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
burdensome; and
``(C) the disaffirmance or repudiation of which the
conservator 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
repudiation 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 conservator 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
financial 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 utilized 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
disaffirms 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 determined under subparagraph (B)) for the
disaffirmance or repudiation of such lease.
``(B) Payments of rent.--Notwithstanding
subparagraph (A), the lessor under a lease to which
that subparagraph applies shall--
``(i) be entitled to the contractual rent
accruing before the later of the date--
``(I) the notice of disaffirmance
or repudiation is mailed; or
``(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
acceleration 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 accordance
with this subsection and subsection (e).
``(5) Leases under which the regulated entity is the
lessor.--
``(A) In general.--If the conservator or receiver
repudiates 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 repudiation, in default, the lessee under
such lease may either--
``(i) treat the lease as terminated by such
repudiation; 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 such
subparagraph--
``(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
obligation 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
repudiates 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
such subparagraph--
``(i) the purchaser--
``(I) shall continue to make all
payments due under the contract after
the date of the repudiation of the
contract; and
``(II) may offset against any such
payments any damages which accrue after
such date due to the nonperformance
(after such date) of any obligation of
the regulated entity under the
contract; and
``(ii) the conservator or receiver shall--
``(I) not be liable to the
purchaser 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);
``(II) deliver title to the
purchaser in accordance with the
provisions of the contract; and
``(III) have no obligation under
the contract other than the performance
required under subclause (II).
``(C) Assignment and sale allowed.--
``(i) In general.--No provision of this
paragraph shall be construed as limiting the
right of the conservator or receiver to assign
the contract described under subparagraph (A),
and sell the property subject to the contract
and the provisions of this paragraph.
``(ii) No liability after assignment and
sale.--If an assignment and sale described
under clause (i) is consummated, the
conservator or receiver shall have no further
liability under the contract described under
subparagraph (A), or with respect to the real
property which was the subject of such
contract.
``(7) Provisions applicable to service contracts.--
``(A) Services performed before appointment.--In
the case of any contract for services between any
person and any regulated entity for which the Agency
has been appointed conservator or receiver, any claim
of such person for services performed before the
appointment of the conservator or the receiver shall
be--
``(i) a claim to be paid in accordance with
subsections (b) and (e); and
``(ii) deemed to have arisen as of the date
the conservator or receiver was appointed.
``(B) Services performed after appointment and
prior to repudiation.--If, in the case of any contract
for services described under subparagraph (A), the
conservator or receiver accepts performance by the
other person before the conservator or receiver makes
any determination to exercise the right of repudiation
of such contract under this section--
``(i) the other party shall be paid under
the terms of the contract for the services
performed; and
``(ii) the amount of such payment shall be
treated as an administrative expense of the
conservatorship or receivership.
``(C) Acceptance of performance no bar to
subsequent repudiation.--The acceptance by any
conservator or receiver of services referred to under
subparagraph (B) in connection with a contract
described in such subparagraph 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 Act, any other Federal law, or the
law of any State, no person shall be stayed or
prohibited from exercising--
``(i) any right such person has to cause
the termination, 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
appointment;
``(ii) any right under any security
agreement or arrangement or other credit
enhancement relating to one or more qualified
financial contracts described in clause (i); 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.--Paragraph
(10) of subsection (b) 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 agreement described under
subparagraph (A)(i) with such regulated entity.
``(C) Certain transfers not avoidable.--
``(i) In general.--Notwithstanding
paragraph (11) or any other Federal or State
laws 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 contract 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:
``(i) Qualified financial contract.--The
term `qualified financial contract' means any
securities contract, commodity contract,
forward contract, repurchase agreement, swap
agreement, and any similar agreement that the
Agency determines by regulation, resolution, or
order to be a qualified financial contract for
purposes of this paragraph.
``(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 foregoing, 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 securities 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
transaction that is similar to any
agreement or transaction referred to in
this clause;
``(VII) means any combination of
the agreements 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 subclause
(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
transaction 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
``(X) means any security agreement
or arrangement or other credit
enhancement related to any agreement or
transaction referred to in this clause,
including any guarantee or
reimbursement obligation in connection
with any agreement or transaction
referred to in this clause.
``(iii) Commodity contract.--The term
`commodity contract' means--
``(I) with respect to a futures
commission merchant, 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 commission 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 subclause
(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 transaction 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 agreement or transaction
referred to in this clause, including
any guarantee or reimbursement
obligation in connection with any
agreement or transaction referred to in
this clause.
``(iv) Forward contract.--The term `forward
contract' means--
``(I) a contract (other than a
commodity contract) for the purchase,
sale, or transfer of a commodity or any
similar good, article, service, right,
or interest which is presently or in
the future becomes the subject of
dealing in the forward contract trade,
or product or byproduct thereof, with a
maturity date more than 2 days after
the date the contract is entered into,
including, a repurchase transaction,
reverse repurchase transaction,
consignment, lease, swap, hedge
transaction, deposit, loan, option,
allocated transaction, unallocated
transaction, or any other similar
agreement;
``(II) any combination of
agreements or transactions 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 subclauses
(I), (II), or (III), together with all
supplements to any such master
agreement, without regard to whether
the master agreement provides for an
agreement or transaction that is not a
forward contract under this clause,
except that the master agreement shall
be considered to be a forward 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 agreement 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' (which definition also
applies to 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 securities
(as such term is defined in the
Securities Exchange Act of 1934),
mortgage loans, interests in mortgage-
related securities or mortgage loans,
eligible bankers' acceptances,
qualified foreign government securities
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 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 obligation under a
participation in a commercial mortgage
loan unless the Agency determines by
regulation, 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 agreement or transaction
referred to in subclause (I) or (III);
``(V) means a master agreement that
provides for an agreement or
transaction referred to in subclause
(I), (III), or (IV), together with all
supplements 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
guarantee or reimbursement obligation
in connection with any agreement or
transaction referred to in any such
subclause.
For purposes of this clause, the term
`qualified foreign government security' means a
security that is a direct obligation of, or
that is fully guaranteed by, the central
government of a member of the Organization for
Economic Cooperation and Development (as
determined by regulation or order adopted by
the appropriate Federal banking authority).
``(vi) Swap agreement.--The term `swap
agreement' 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 that has
been, is presently, or in the future
becomes, the subject of recurrent
dealings in the swap markets (including
terms and conditions incorporated by
reference in such agreement) and that
is a forward, swap, future, or option
on one or more rates, currencies,
commodities, equity securities or other
equity instruments, debt securities or
other debt instruments, quantitative
measures associated with an occurrence,
extent of an occurrence, or contingency
associated with a financial,
commercial, or economic consequence, or
economic or financial indices or
measures of economic or financial risk
or value;
``(III) any combination of
agreements or transactions referred to
in this clause;
``(IV) any option to enter into any
agreement or transaction referred to in
this clause;
``(V) a master agreement that
provides for an agreement or
transaction referred to in subclause
(I), (II), (III), or (IV), together
with all supplements to any such master
agreement, without regard to whether
the master agreement contains an
agreement or transaction that is not a
swap agreement under this clause,
except that the master agreement shall
be considered to be a swap agreement
under this clause only with respect to
each agreement or transaction under the
master agreement that is referred to in
subclause (I), (II), (III), or (IV);
and
``(VI) any security agreement or
arrangement or other credit enhancement
related to any agreements or
transactions referred to in subclause
(I), (II), (III), (IV), or (V),
including any guarantee or
reimbursement obligation in connection
with any agreement or transaction
referred to in any such subclause.
Such term is applicable for purposes of this
subsection only and shall not be construed or
applied so as to challenge or affect the
characterization, definition, or treatment of
any swap agreement under any other statute,
regulation, or rule, including the Securities
Act of 1933, the Securities Exchange Act of
1934, the Public Utility Holding Company Act of
1935, the Trust Indenture Act of 1939, the
Investment Company Act of 1940, the Investment
Advisers Act of 1940, the Securities Investor
Protection Act of 1970, the Commodity Exchange
Act, the Gramm-Leach-Bliley Act, and the Legal
Certainty for Bank Products Act of 2000.
``(vii) Treatment of master agreement as
one agreement.--Any master agreement for any
contract or agreement described in any
preceding clause of this subparagraph (or any
master agreement for such master agreement or
agreements), together with all supplements to
such master agreement, shall be treated as a
single agreement and a single qualified
financial contract. If a master agreement
contains provisions relating to agreements or
transactions that are not themselves qualified
financial contracts, the master agreement shall
be deemed to be a qualified financial contract
only with respect to those transactions that
are themselves qualified financial contracts.
``(viii) Transfer.--The term `transfer'
means every mode, direct or indirect, absolute
or conditional, voluntary or involuntary, of
disposing of or parting with property or with
an interest in property, including retention of
title as a security interest and foreclosure of
the regulated entity's equity of redemption.
``(E) Certain protections in event of appointment
of conservator.--Notwithstanding any other provision of
this Act (other than paragraph (13) of this
subsection), any other Federal law, or the law of any
State, no person shall be stayed or prohibited from
exercising--
``(i) any right such person has to cause
the termination, liquidation, or acceleration
of any qualified financial contract with a
regulated entity in a conservatorship based
upon a default under such financial contract
which is enforceable under applicable
noninsolvency law;
``(ii) any right under any security
agreement or arrangement or other credit
enhancement relating to one or more such
qualified financial contracts; or
``(iii) any right to offset or net out any
termination values, payment amounts, or other
transfer obligations arising under or in
connection with such qualified financial
contracts.
``(F) Clarification.--No provision of law shall be
construed as limiting the right or power of the Agency,
or authorizing any court or agency to limit or delay,
in any manner, the right or power of the Agency to
transfer any qualified financial contract in accordance
with paragraphs (9) and (10) of this subsection or to
disaffirm or repudiate any such contract in accordance
with subsection (d)(1) of this section.
``(G) Walkaway clauses not effective.--
``(i) In general.--Notwithstanding the
provisions of subparagraphs (A) and (E), and
sections 403 and 404 of the Federal Deposit
Insurance Corporation Improvement Act of 1991,
no walkaway clause shall be enforceable in a
qualified financial contract of a regulated
entity in default.
``(ii) Walkaway clause defined.--For
purposes of this subparagraph, the term
`walkaway clause' means a provision in a
qualified financial contract that, after
calculation of a value of a party's position or
an amount due to or from 1 of the parties in
accordance with its terms upon termination,
liquidation, or acceleration of the qualified
financial contract, either does not create a
payment obligation of a party or extinguishes a
payment obligation of a party in whole or in
part solely because of such party's status as a
nondefaulting party.
``(9) Transfer of qualified financial contracts.--In making
any transfer of assets or liabilities of a regulated entity in
default which includes any qualified financial contract, the
conservator or receiver for such regulated entity shall
either--
``(A) transfer to 1 person--
``(i) all qualified financial contracts
between any person (or any affiliate of such
person) and the regulated entity in default;
``(ii) all claims of such person (or any
affiliate of such person) against such
regulated entity under any such contract (other
than any claim which, under the terms of any
such contract, is subordinated to the claims of
general unsecured creditors of such regulated
entity);
``(iii) all claims of such regulated entity
against such person (or any affiliate of such
person) under any such contract; and
``(iv) all property securing or any other
credit enhancement for any contract described
in clause (i) or any claim described in clause
(ii) or (iii) under any such contract; or
``(B) transfer none of the financial contracts,
claims, or property referred to under subparagraph (A)
(with respect to such person and any affiliate of such
person).
``(10) Notification of transfer.--
``(A) In general.--If--
``(i) the conservator or receiver for a
regulated entity in default makes any transfer
of the assets and liabilities of such regulated
entity, and
``(ii) the transfer includes any qualified
financial contract,
the conservator or receiver shall notify any person who
is a party to any such contract of such transfer by
5:00 p.m. (eastern time) on the business day following
the date of the appointment of the receiver in the case
of a receivership, or the business day following such
transfer in the case of a conservatorship.
``(B) Certain rights not enforceable.--
``(i) Receivership.--A person who is a
party to a qualified financial contract with a
regulated entity may not exercise any right
that such person has to terminate, liquidate,
or net such contract under paragraph (8)(A) of
this subsection or section 403 or 404 of the
Federal Deposit Insurance Corporation
Improvement Act of 1991, solely by reason of or
incidental to the appointment of a receiver for
the regulated entity (or the insolvency or
financial condition of the regulated entity for
which the receiver has been appointed)--
``(I) until 5:00 p.m. (eastern
time) on the business day following the
date of the appointment of the
receiver; or
``(II) after the person has
received notice that the contract has
been transferred pursuant to paragraph
(9)(A).
``(ii) Conservatorship.--A person who is a
party to a qualified financial contract with a
regulated entity may not exercise any right
that such person has to terminate, liquidate,
or net such contract under paragraph (8)(E) of
this subsection or section 403 or 404 of the
Federal Deposit Insurance Corporation
Improvement Act of 1991, solely by reason of or
incidental to the appointment of a conservator
for the regulated entity (or the insolvency or
financial condition of the regulated entity for
which the conservator has been appointed).
``(iii) Notice.--For purposes of this
paragraph, the Agency as receiver or
conservator of a regulated entity shall be
deemed to have notified a person who is a party
to a qualified financial contract with such
regulated entity if the Agency has taken steps
reasonably calculated to provide notice to such
person by the time specified in subparagraph
(A).
``(C) Business day defined.--For purposes of this
paragraph, the term `business day' means any day other
than any Saturday, Sunday, or any day on which either
the New York Stock Exchange or the Federal Reserve Bank
of New York is closed.
``(11) Disaffirmance or repudiation of qualified financial
contracts.--In exercising the rights of disaffirmance or
repudiation of a conservator or receiver with respect to any
qualified financial contract to which a regulated entity is a
party, the conservator or receiver for such institution shall
either--
``(A) disaffirm or repudiate all qualified
financial contracts between--
``(i) any person or any affiliate of such
person; and
``(ii) the regulated entity in default; or
``(B) disaffirm or repudiate none of the qualified
financial contracts referred to in subparagraph (A)
(with respect to such person or any affiliate of such
person).
``(12) Certain security interests not avoidable.--No
provision of this subsection shall be construed as permitting
the avoidance of any legally enforceable or perfected security
interest in any of the assets of any regulated entity, except
where such an interest is taken in contemplation of the
insolvency of the regulated entity, or with the intent to
hinder, delay, or defraud the regulated entity or the creditors
of such regulated entity.
``(13) Authority to enforce contracts.--
``(A) In general.--Notwithstanding any provision of
a contract providing for termination, default,
acceleration, or exercise of rights upon, or solely by
reason of, insolvency or the appointment of a
conservator or receiver, the conservator or receiver
may enforce any contract or regulated entity bond
entered into by the regulated entity.
``(B) Certain rights not affected.--No provision of
this paragraph may be construed as impairing or
affecting any right of the conservator or receiver to
enforce or recover under a director's or officer's
liability insurance contract or surety bond under other
applicable law.
``(C) Consent requirement.--
``(i) In general.--Except as otherwise
provided under this section, no person may
exercise any right or power to terminate,
accelerate, or declare a default under any
contract to which a regulated entity is a
party, or to obtain possession of or exercise
control over any property of the regulated
entity, or affect any contractual rights of the
regulated entity, without the consent of the
conservator or receiver, as appropriate, for a
period of--
``(I) 45 days after the date of
appointment of a conservator; or
``(II) 90 days after the date of
appointment of a receiver.
``(ii) Exceptions.--This paragraph shall--
``(I) not apply to a director's or
officer's liability insurance contract;
``(II) not apply to the rights of
parties to any qualified financial
contracts under subsection (d)(8); and
``(III) not be construed as
permitting the conservator or receiver
to fail to comply with otherwise
enforceable provisions of such
contracts.
``(14) Savings clause.--The meanings of terms used in this
subsection are applicable for purposes of this subsection only,
and shall not be construed or applied so as to challenge or
affect the characterization, definition, or treatment of any
similar terms under any other statute, regulation, or rule,
including the Gramm-Leach-Bliley Act, the Legal Certainty for
Bank Products Act of 2000, the securities laws (as that term is
defined in section 3(a)(47) of the Securities Exchange Act of
1934), and the Commodity Exchange Act.
``(15) Exception for federal reserve and federal home loan
banks.--No provision of this subsection shall apply with
respect to--
``(A) any extension of credit from any Federal home
loan bank or Federal Reserve Bank to any regulated
entity; or
``(B) any security interest in the assets of the
regulated entity securing any such extension of credit.
``(e) Valuation of Claims in Default.--
``(1) In general.--Notwithstanding any other provision of
Federal law or the law of any State, and regardless of the
method which the Agency determines to utilize with respect to a
regulated entity in default or in danger of default, including
transactions authorized under subsection (i), this subsection
shall govern the rights of the creditors of such regulated
entity.
``(2) Maximum liability.--The maximum liability of the
Agency, acting as receiver or in any other capacity, to any
person having a claim against the receiver or the regulated
entity for which such receiver is appointed shall equal the
lesser of--
``(A) the amount such claimant would have received
if the Agency had liquidated the assets and liabilities
of such regulated entity without exercising the
authority of the Agency under subsection (i) of this
section; or
``(B) the amount of proceeds realized from the
performance of contracts or sale of the assets of the
regulated entity.
``(f) Limitation on Court Action.--Except as provided in this
section or at the request of the Director, no court may take any action
to restrain or affect the exercise of powers or functions of the Agency
as a conservator or a receiver.
``(g) Liability of Directors and Officers.--
``(1) In general.--A director or officer of a regulated
entity may be held personally liable for monetary damages in
any civil action by, on behalf of, or at the request or
direction of the Agency, which action is prosecuted wholly or
partially for the benefit of the Agency--
``(A) acting as conservator or receiver of such
regulated entity, or
``(B) acting based upon a suit, claim, or cause of
action purchased from, assigned by, or otherwise
conveyed by such receiver or conservator,
for gross negligence, including any similar conduct or conduct
that demonstrates a greater disregard of a duty of care (than
gross negligence) including intentional tortious conduct, as
such terms are defined and determined under applicable State
law.
``(2) No limitation.--Nothing in this paragraph shall
impair or affect any right of the Agency under other applicable
law.
``(h) Damages.--In any proceeding related to any claim against a
director, officer, employee, agent, attorney, accountant, appraiser, or
any other party employed by or providing services to a regulated
entity, recoverable damages determined to result from the improvident
or otherwise improper use or investment of any assets of the regulated
entity shall include principal losses and appropriate interest.
``(i) Limited-Life Regulated Entities.--
``(1) Organization.--
``(A) Purpose.--If a regulated entity is in
default, or if the Agency anticipates that a regulated
entity will default, the Agency may organize a limited-
life regulated entity with those powers and attributes
of the regulated entity in default or in danger of
default that the Director determines necessary, subject
to the provisions of this subsection. The Director
shall grant a temporary charter to the limited-life
regulated entity, and the limited-life regulated entity
shall operate subject to that charter.
``(B) Authorities.--Upon the creation of a limited-
life regulated entity under subparagraph (A), the
limited-life regulated entity may--
``(i) assume such liabilities of the
regulated entity that is in default or in
danger of default as the Agency may, in its
discretion, determine to be appropriate,
provided that the liabilities assumed shall not
exceed the amount of assets of the limited-life
regulated entity;
``(ii) purchase such assets of the
regulated entity that is in default, or in
danger of default, as the Agency may, in its
discretion, determine to be appropriate; and
``(iii) perform any other temporary
function which the Agency may, in its
discretion, prescribe in accordance with this
section.
``(2) Charter.--
``(A) Conditions.--The Agency may grant a temporary
charter if the Agency determines that the continued
operation of the regulated entity in default or in
danger of default is in the best interest of the
national economy and the housing markets.
``(B) Treatment as being in default for certain
purposes.--A limited-life regulated entity shall be
treated as a regulated entity in default at such times
and for such purposes as the Agency may, in its
discretion, determine.
``(C) Management.--A limited-life regulated entity,
upon the granting of its charter, shall be under the
management of a board of directors consisting of not
fewer than 5 nor more than 10 members appointed by the
Agency.
``(D) Bylaws.--The board of directors of a limited-
life regulated entity shall adopt such bylaws as may be
approved by the Agency.
``(3) Capital stock.--No capital stock need be paid into a
limited-life regulated entity by the Agency.
``(4) Investments.--Funds of a limited-life regulated
entity shall be kept on hand in cash, invested in obligations
of the United States or obligations guaranteed as to principal
and interest by the United States, or deposited with the
Agency, or any Federal Reserve bank.
``(5) Exempt status.--Notwithstanding any other provision
of Federal or State law, the limited-life regulated entity, its
franchise, property, and income shall be exempt from all
taxation now or hereafter imposed by the United States, by any
territory, dependency, or possession thereof, or by any State,
county, municipality, or local taxing authority.
``(6) Winding up.--
``(A) In general.--Subject to subparagraph (B),
unless Congress authorizes the sale of the capital
stock of the limited-life regulated entity, not later
than 2 years after the date of its organization, the
Agency shall wind up the affairs of the limited-life
regulated entity.
``(B) Extension.--The Director may, in the
discretion of the Director, extend the status of the
limited-life regulated entity for 3 additional 1-year
periods.
``(7) Transfer of assets and liabilities.--
``(A) In general.--
``(i) Transfer of assets and liabilities.--
The Agency, as receiver, may transfer any
assets and liabilities of a regulated entity in
default, or in danger of default, to the
limited-life regulated entity in accordance
with paragraph (1).
``(ii) Subsequent transfers.--At any time
after a charter is transferred to a limited-
life regulated entity, the Agency, as receiver,
may transfer any assets and liabilities of such
regulated entity in default, or in danger in
default, as the Agency may, in its discretion,
determine to be appropriate in accordance with
paragraph (1).
``(iii) Effective without approval.--The
transfer of any assets or liabilities of a
regulated entity in default, or in danger of
default, transferred to a limited-life
regulated entity shall be effective without any
further approval under Federal or State law,
assignment, or consent with respect thereto.
``(8) Proceeds.--To the extent that available proceeds from
the limited-life regulated entity exceed amounts required to
pay obligations, such proceeds may be paid to the regulated
entity in default, or in danger of default.
``(9) Powers.--
``(A) In general.--Each limited-life regulated
entity created under this subsection shall have all
corporate powers of, and be subject to the same
provisions of law as, the regulated entity in default
or in danger of default to which it relates, except
that--
``(i) the Agency may--
``(I) remove the directors of a
limited-life regulated entity; and
``(II) fix the compensation of
members of the board of directors and
senior management, as determined by the
Agency in its discretion, of a limited-
life regulated entity;
``(ii) the Agency may indemnify the
representatives for purposes of paragraph
(1)(B), and the directors, officers, employees,
and agents of a limited-life regulated entity
on such terms as the Agency determines to be
appropriate; and
``(iii) the board of directors of a
limited-life regulated entity--
``(I) shall elect a chairperson who
may also serve in the position of chief
executive officer, except that such
person shall not serve either as
chairperson or as chief executive
officer without the prior approval of
the Agency; and
``(II) may appoint a chief
executive officer who is not also the
chairperson, except that such person
shall not serve as chief executive
officer without the prior approval of
the Agency.
``(B) Stay of judicial action.--Any judicial action
to which a limited-life regulated entity becomes a
party by virtue of its acquisition of any assets or
assumption of any liabilities of a regulated entity in
default shall be stayed from further proceedings for a
period of up to 45 days at the request of the limited-
life regulated entity. Such period may be modified upon
the consent of all parties.
``(10) Obtaining of credit and incurring of debt.--
``(A) In general.--The limited-life regulated
entity may obtain unsecured credit and incur unsecured
debt in the ordinary course of business.
``(B) Inability to obtain credit.--If the limited-
life regulated entity is unable to obtain unsecured
credit the Director may authorize the obtaining of
credit or the incurring of debt--
``(i) with priority over any or all
administrative expenses;
``(ii) secured by a lien on property that
is not otherwise subject to a lien; or
``(iii) secured by a junior lien on
property that is subject to a lien.
``(C) Limitations.--
``(i) In general.--The Director, after
notice and a hearing, may authorize the
obtaining of credit or the incurring of debt
secured by a senior or equal lien on property
that is subject to a lien (other than mortgages
that collateralize the mortgage-backed
securities issued or guaranteed by the
regulated entity) only if--
``(I) the limited-life regulated
entity is unable to obtain such credit
otherwise; and
``(II) there is adequate protection
of the interest of the holder of the
lien on the property which such senior
or equal lien is proposed to be
granted.
``(ii) Burden of proof.--In any hearing
under this subsection, the Director has the
burden of proof on the issue of adequate
protection.
``(D) Affect on debts and liens.--The reversal or
modification on appeal of an authorization under this
paragraph to obtain credit or incur debt, or of a grant
under this section of a priority or a lien, does not
affect the validity of any debt so incurred, or any
priority or lien so granted, to an entity that extended
such credit in good faith, whether or not such entity
knew of the pendency of the appeal, unless such
authorization and the incurring of such debt, or the
granting of such priority or lien, were stayed pending
appeal.
``(11) Issuance of preferred debt.--A limited-life
regulated entity may, subject to the approval of the Director
and subject to such terms and conditions as the Director may
prescribe, issue notes, bonds, or other debt obligations of a
class to which all other debt obligations of the limited-life
regulated entity shall be subordinate in right and payment.
``(12) No federal status.--
``(A) Agency status.--A limited-life regulated
entity is not an agency, establishment, or
instrumentality of the United States.
``(B) Employee status.--Representatives for
purposes of paragraph (1)(B), interim directors,
directors, officers, employees, or agents of a limited-
life regulated entity are not, solely by virtue of
service in any such capacity, officers or employees of
the United States. Any employee of the Agency or of any
Federal instrumentality who serves at the request of
the Agency as a representative for purposes of
paragraph (1)(B), interim director, director, officer,
employee, or agent of a limited-life regulated entity
shall not--
``(i) solely by virtue of service in any
such capacity lose any existing status as an
officer or employee of the United States for
purposes of title 5, United States Code, or any
other provision of law; or
``(ii) receive any salary or benefits for
service in any such capacity with respect to a
limited-life regulated entity in addition to
such salary or benefits as are obtained through
employment with the Agency or such Federal
instrumentality.
``(13) Additional powers.--In addition to any other powers
granted under this subsection, a limited-life regulated entity
may--
``(A) extend a maturity date or change in an
interest rate or other term of outstanding securities;
``(B) issue securities of the limited-life
regulated entity, for cash, for property, for existing
securities, or in exchange for claims or interests, or
for any other appropriate purposes; and
``(C) take any other action not inconsistent with
this section.
``(j) Other Exemptions.--When acting as a receiver, the following
provisions shall apply with respect to the Agency:
``(1) Exemption from taxation.--The Agency, including its
franchise, its capital, reserves, and surplus, and its income,
shall be exempt from all taxation imposed by any State,
country, municipality, or local taxing authority, except that
any real property of the Agency shall be subject to State,
territorial, county, municipal, or local taxation to the same
extent according to its value as other real property is taxed,
except that, notwithstanding the failure of any person to
challenge an assessment under State law of the value of such
property, and the tax thereon, shall be determined as of the
period for which such tax is imposed.
``(2) Exemption from attachment and liens.--No property of
the Agency shall be subject to levy, attachment, garnishment,
foreclosure, or sale without the consent of the Agency, nor
shall any involuntary lien attach to the property of the
Agency.
``(3) Exemption from penalties and fines.--The Agency shall
not be liable for any amounts in the nature of penalties or
fines, including those arising from the failure of any person
to pay any real property, personal property, probate, or
recording tax or any recording or filing fees when due.
``(k) Prohibition of Charter Revocation.--In no case may a receiver
appointed pursuant to this section revoke, annul, or terminate the
charter of a regulated entity.''.
(b) Conforming Amendments.--
(1) Housing and community development act of 1992.--
Subtitle B of title XIII of the Housing and Community
Development Act of 1992 is amended by striking sections 1369
(12 U.S.C. 4619), 1369A (12 U.S.C. 4620), and 1369B (12 U.S.C.
4621).
(2) Federal home loan banks.--Section 25 of the Federal
Home Loan Bank Act (12 U.S.C. 1445) is amended by striking
``Board under this Act'' and inserting ``Director under section
1367 of the Housing and Community Development Act of 1992''.
SEC. 145. CONFORMING AMENDMENTS.
Title XIII of the Housing and Community Development Act of 1992, as
amended by the preceding provisions of this Act, is further amended--
(1) in sections 1365 (12 U.S.C. 4615) through 1369D (12
U.S.C. 4623), but not including section 1367 (12 U.S.C. 4617)
as added by section 144 of this Act--
(A) by striking ``An enterprise'' each place such
term appears and inserting ``A regulated entity'';
(B) by striking ``an enterprise'' each place such
term appears and inserting ``a regulated entity''; and
(C) by striking ``the enterprise'' each place such
term appears and inserting ``the regulated entity'';
(2) in section 1366 (12 U.S.C. 4616)--
(A) in subsection (b)(7), by striking ``section
1369 (excluding subsection (a)(1) and (2))'' and
inserting ``section 1367''; and
(B) in subsection (d), by striking ``the
enterprises'' and inserting ``the regulated entities'';
(3) in section 1368(d) (12 U.S.C. 4618(d)), by striking
``Committee on Banking, Finance and Urban Affairs'' and
inserting ``Committee on Financial Services'';
(4) in section 1369C(c) (12 U.S.C. 4622(c)), by striking
``any enterprise'' and inserting ``any regulated entity''; and
(5) in subsections (a) and (d) of section 1369D, by
striking ``section 1366 or 1367 or action under section 1369)''
each place such phrase appears and inserting ``section 1367)''.
Subtitle D--Enforcement Actions
SEC. 161. CEASE-AND-DESIST PROCEEDINGS.
Section 1371 of the Housing and Community Development Act of 1992
(12 U.S.C. 4631) is amended--
(1) by striking subsections (a) and (b) and inserting the
following new subsections:
``(a) Issuance for Unsafe or Unsound Practices and Violations of
Rules or Laws.--If, in the opinion of the Director, a regulated entity
or any regulated entity-affiliated party is engaging or has engaged, or
the Director has reasonable cause to believe that the regulated entity
or any regulated entity-affiliated party is about to engage, in an
unsafe or unsound practice in conducting the business of the regulated
entity or is violating or has violated, or the Director has reasonable
cause to believe that the regulated entity or any regulated entity-
affiliated party is about to violate, a law, rule, or regulation, or
any condition imposed in writing by the Director in connection with the
granting of any application or other request by the regulated entity or
any written agreement entered into with the Director, the Director may
issue and serve upon the regulated entity or such party a notice of
charges in respect thereof. The Director may not, pursuant to this
section, enforce compliance with any housing goal established under
subpart B of part 2 of subtitle A of this title, with section 1336 or
1337 of this title, with subsection (m) or (n) of section 309 of the
Federal National Mortgage Association Charter Act (12 U.S.C. 1723a(m),
(n)), with subsection (e) or (f) of section 307 of the Federal Home
Loan Mortgage Corporation Act (12 U.S.C. 1456(e), (f)), or with
paragraph (5) of section 10(j) of the Federal Home Loan Bank Act (12
U.S.C. 1430(j)).
``(b) Issuance for Unsatisfactory Rating.--If a regulated entity
receives, in its most recent report of examination, a less-than-
satisfactory rating for asset quality, management, earnings, or
liquidity, the Director may (if the deficiency is not corrected) deem
the regulated entity to be engaging in an unsafe or unsound practice
for purposes of this subsection.'';
(2) in subsection (c)(2), by striking ``enterprise,
executive officer, or director'' and inserting ``regulated
entity or regulated entity-affiliated party''; and
(3) in subsection (d)--
(A) in the matter preceding paragraph (1), by
striking ``enterprise, executive officer, or director''
and inserting ``regulated entity or regulated entity-
affiliated party'';
(B) in paragraph (1)--
(i) by striking ``an executive officer or
director'' and inserting ``a regulated entity
affiliated party''; and
(ii) by inserting ``(including
reimbursement of compensation under section
1318)'' after ``reimbursement'';
(C) in paragraph (6), by striking ``and'' at the
end;
(D) by redesignating paragraph (7) as paragraph
(8); and
(E) by inserting after paragraph (6) the following
new paragraph:
``(7) to effect an attachment on a regulated entity or
regulated entity-affiliated party subject to an order under
this section or section 1372; and''.
SEC. 162. TEMPORARY CEASE-AND-DESIST PROCEEDINGS.
Section 1372 of the Housing and Community Development Act of 1992
(12 U.S.C. 4632) is amended--
(1) by striking subsection (a) and inserting the following
new subsection:
``(a) Grounds for Issuance.--Whenever the Director determines that
the violation or threatened violation or the unsafe or unsound practice
or practices specified in the notice of charges served upon the
regulated entity or any regulated entity-affiliated party pursuant to
section 1371(a), or the continuation thereof, is likely to cause
insolvency or significant dissipation of assets or earnings of the
regulated entity, or is likely to weaken the condition of the regulated
entity prior to the completion of the proceedings conducted pursuant to
sections 1371 and 1373, the Director may issue a temporary order
requiring the regulated entity or such party to cease and desist from
any such violation or practice and to take affirmative action to
prevent or remedy such insolvency, dissipation, condition, or prejudice
pending completion of such proceedings. Such order may include any
requirement authorized under section 1371(d).'';
(2) in subsection (b), by striking ``enterprise, executive
officer, or director'' and inserting ``regulated entity or
regulated entity-affiliated party'';
(3) in subsection (d)--
(A) by striking ``An enterprise, executive officer,
or director'' and inserting ``A regulated entity or
regulated entity-affiliated party''; and
(B) by striking ``the enterprise, executive
officer, or director'' and inserting ``the regulated
entity or regulated entity-affiliated party''; and
(4) by striking subsection (e) and in inserting the
following new subsection:
``(e) Enforcement.--In the case of violation or threatened
violation of, or failure to obey, a temporary cease-and-desist order
issued pursuant to this section, the Director may apply to the United
States District Court for the District of Columbia or the United States
district court within the jurisdiction of which the headquarters of the
regulated entity is located, for an injunction to enforce such order,
and, if the court determines that there has been such violation or
threatened violation or failure to obey, it shall be the duty of the
court to issue such injunction.''.
SEC. 163. PREJUDGMENT ATTACHMENT.
The Housing and Community Development Act of 1992 is amended by
inserting after section 1375 (12 U.S.C. 4635) the following new
section:
``SEC. 1375A. PREJUDGMENT ATTACHMENT.
``(a) In General.--In any action brought pursuant to this title, or
in actions brought in aid of, or to enforce an order in, any
administrative or other civil action for money damages, restitution, or
civil money penalties brought pursuant to this title, the court may,
upon application of the Director or Attorney General, as applicable,
issue a restraining order that--
``(1) prohibits any person subject to the proceeding from
withdrawing, transferring, removing, dissipating, or disposing
of any funds, assets or other property; and
``(2) appoints a person on a temporary basis to administer
the restraining order.
``(b) Standard.--
``(1) Showing.--Rule 65 of the Federal Rules of Civil
Procedure shall apply with respect to any proceeding under
subsection (a) without regard to the requirement of such rule
that the applicant show that the injury, loss, or damage is
irreparable and immediate.
``(2) State proceeding.--If, in the case of any proceeding
in a State court, the court determines that rules of civil
procedure available under the laws of such State provide
substantially similar protections to a party's right to due
process as Rule 65 (as modified with respect to such proceeding
by paragraph (1)), the relief sought under subsection (a) may
be requested under the laws of such State.''.
SEC. 164. ENFORCEMENT AND JURISDICTION.
Section 1375 of the Housing and Community Development Act of 1992
(12 U.S.C. 4635) is amended--
(1) by striking subsection (a) and inserting the following
new subsection:
``(a) Enforcement.--The Director may, in the discretion of the
Director, apply to the United States District Court for the District of
Columbia, or the United States district court within the jurisdiction
of which the headquarters of the regulated entity is located, for the
enforcement of any effective and outstanding notice or order issued
under this subtitle or subtitle B, or request that the Attorney General
of the United States bring such an action. Such court shall have
jurisdiction and power to order and require compliance with such notice
or order.''; and
(2) in subsection (b), by striking ``or 1376'' and
inserting ``1376, or 1377''.
SEC. 165. CIVIL MONEY PENALTIES.
Section 1376 of the Housing and Community Development Act of 1992
(12 U.S.C. 4636) is amended--
(1) in subsection (a)--
(A) in the matter preceding paragraph (1), by
striking ``or any executive officer or'' and inserting
``any executive officer of a regulated entity, any
regulated entity-affiliated party, or any''; and
(B) in paragraph (1)--
(i) by striking ``the Federal National
Mortgage Association Charter Act, the Federal
Home Loan Mortgage Corporation Act'' and
inserting ``any provision of any of the
authorizing statutes'';
(ii) by striking ``or Act'' and inserting
``or statute'';
(iii) by striking ``or subsection'' and
inserting ``, subsection''; and
(iv) by inserting ``, or paragraph (5) or
(12) of section 10(j) of the Federal Home Loan
Bank Act'' before the semicolon at the end;
(2) by striking subsection (b) and inserting the following
new subsection:
``(b) Amount of Penalty.--
``(1) First tier.--Any regulated entity which, or any
regulated entity-affiliated party who--
``(A) violates any provision of this title, any
provision of any of the authorizing statutes, or any
order, condition, rule, or regulation under any such
title or statute, except that the Director may not,
pursuant to this section, enforce compliance with any
housing goal established under subpart B of part 2 of
subtitle A of this title, with section 1336 or 1337 of
this title, with subsection (m) or (n) of section 309
of the Federal National Mortgage Association Charter
Act (12 U.S.C. 1723a(m), (n)), with subsection (e) or
(f) of section 307 of the Federal Home Loan Mortgage
Corporation Act (12 U.S.C. 1456(e), (f)), or with
paragraph (5) or (12) of section 10(j) of the Federal
Home Loan Bank Act;
``(B) violates any final or temporary order or
notice issued pursuant to this title;
``(C) violates any condition imposed in writing by
the Director in connection with the grant of any
application or other request by such regulated entity;
or
``(D) violates any written agreement between the
regulated entity and the Director,
shall forfeit and pay a civil money penalty of not more than
$10,000 for each day during which such violation continues.
``(2) Second tier.--Notwithstanding paragraph (1)--
``(A) if a regulated entity, or a regulated entity-
affiliated party--
``(i) commits any violation described in
any subparagraph of paragraph (1);
``(ii) recklessly engages in an unsafe or
unsound practice in conducting the affairs of
such regulated entity; or
``(iii) breaches any fiduciary duty; and
``(B) the violation, practice, or breach--
``(i) is part of a pattern of misconduct;
``(ii) causes or is likely to cause more
than a minimal loss to such regulated entity;
or
``(iii) results in pecuniary gain or other
benefit to such party,
the regulated entity or regulated entity-affiliated party shall
forfeit and pay a civil penalty of not more than $50,000 for
each day during which such violation, practice, or breach
continues.
``(3) Third tier.--Notwithstanding paragraphs (1) and (2),
any regulated entity which, or any regulated entity-affiliated
party who--
``(A) knowingly--
``(i) commits any violation or engages in
any conduct described in any subparagraph of
paragraph (1);
``(ii) engages in any unsafe or unsound
practice in conducting the affairs of such
regulated entity; or
``(iii) breaches any fiduciary duty; and
``(B) knowingly or recklessly causes a substantial
loss to such regulated entity or a substantial
pecuniary gain or other benefit to such party by reason
of such violation, practice, or breach,
shall forfeit and pay a civil penalty in an amount not to
exceed the applicable maximum amount determined under paragraph
(4) for each day during which such violation, practice, or
breach continues.
``(4) Maximum amounts of penalties for any violation
described in paragraph (3).--The maximum daily amount of any
civil penalty which may be assessed pursuant to paragraph (3)
for any violation, practice, or breach described in such
paragraph is--
``(A) in the case of any person other than a
regulated entity, an amount not to exceed $2,000,000;
and
``(B) in the case of any regulated entity,
$2,000,000.'';
(3) in subsection (c)(1)(B), by striking ``enterprise,
executive officer, or director'' and inserting ``regulated
entity or regulated entity-affiliated party'';
(4) in subsection (d), by striking the first sentence and
inserting the following: ``If a regulated entity or regulated
entity-affiliated party fails to comply with an order of the
Director imposing a civil money penalty under this section,
after the order is no longer subject to review as provided
under subsection (c)(1) and section 1374, the Director may, in
the discretion of the Director, bring an action in the United
States District Court for the District of Columbia, or the
United States district court within the jurisdiction of which
the headquarters of the regulated entity is located, to obtain
a monetary judgment against the regulated entity or regulated
entity affiliated party and such other relief as may be
available, or request that the Attorney General of the United
States bring such an action.''; and
(5) in subsection (g), by striking ``subsection (b)(3)''
and inserting ``this section, unless authorized by the Director
by rule, regulation, or order''.
SEC. 166. REMOVAL AND PROHIBITION AUTHORITY.
(a) In General.--Subtitle C of title XIII of the Housing and
Community Development Act of 1992 is amended--
(1) by redesignating sections 1377, 1378, 1379, 1379A, and
1379B (12 U.S.C. 4637-41) as sections 1379, 1379A, 1379B,
1379C, and 1379D, respectively; and
(2) by inserting after section 1376 (12 U.S.C. 4636) the
following new section:
``SEC. 1377. REMOVAL AND PROHIBITION AUTHORITY.
``(a) Authority to Issue Order.--Whenever the Director determines
that--
``(1) any regulated entity-affiliated party has, directly
or indirectly--
``(A) violated--
``(i) any law or regulation;
``(ii) any cease-and-desist order which has
become final;
``(iii) any condition imposed in writing by
the Director in connection with the grant of
any application or other request by such
regulated entity; or
``(iv) any written agreement between such
regulated entity and the Director;
``(B) engaged or participated in any unsafe or
unsound practice in connection with any regulated
entity; or
``(C) committed or engaged in any act, omission, or
practice which constitutes a breach of such party's
fiduciary duty;
``(2) by reason of the violation, practice, or breach
described in any subparagraph of paragraph (1)--
``(A) such regulated entity has suffered or will
probably suffer financial loss or other damage; or
``(B) such party has received financial gain or
other benefit by reason of such violation, practice, or
breach; and
``(3) such violation, practice, or breach--
``(A) involves personal dishonesty on the part of
such party; or
``(B) demonstrates willful or continuing disregard
by such party for the safety or soundness of such
regulated entity, the Director may serve upon such
party a written notice of the Director's intention to
remove such party from office or to prohibit any
further participation by such party, in any manner, in
the conduct of the affairs of any regulated entity.
``(b) Suspension Order.--
``(1) Suspension or prohibition authority.--If the Director
serves written notice under subsection (a) to any regulated
entity-affiliated party of the Director's intention to issue an
order under such subsection, the Director may--
``(A) suspend such party from office or prohibit
such party from further participation in any manner in
the conduct of the affairs of the regulated entity, if
the Director--
``(i) determines that such action is
necessary for the protection of the regulated
entity; and
``(ii) serves such party with written
notice of the suspension order; and
``(B) prohibit the regulated entity from releasing
to or on behalf of the regulated entity-affiliated
party any compensation or other payment of money or
other thing of current or potential value in connection
with any resignation, removal, retirement, or other
termination of employment or office of the party.
``(2) Effective period.--Any suspension order issued under
this subsection--
``(A) shall become effective upon service; and
``(B) unless a court issues a stay of such order
under subsection (g) of this section, shall remain in
effect and enforceable until--
``(i) the date the Director dismisses the
charges contained in the notice served under
subsection (a) with respect to such party; or
``(ii) the effective date of an order
issued by the Director to such party under
subsection (a).
``(3) Copy of order.--If the Director issues a suspension
order under this subsection to any regulated entity-affiliated
party, the Director shall serve a copy of such order on any
regulated entity with which such party is affiliated at the
time such order is issued.
``(c) Notice, Hearing, and Order.--A notice of intention to remove
a regulated entity-affiliated party from office or to prohibit such
party from participating in the conduct of the affairs of a regulated
entity shall contain a statement of the facts constituting grounds for
such action, and shall fix a time and place at which a hearing will be
held on such action. Such hearing shall be fixed for a date not earlier
than 30 days nor later than 60 days after the date of service of such
notice, unless an earlier or a later date is set by the Director at the
request of (1) such party, and for good cause shown, or (2) the
Attorney General of the United States. Unless such party shall appear
at the hearing in person or by a duly authorized representative, such
party shall be deemed to have consented to the issuance of an order of
such removal or prohibition. In the event of such consent, or if upon
the record made at any such hearing the Director shall find that any of
the grounds specified in such notice have been established, the
Director may issue such orders of suspension or removal from office, or
prohibition from participation in the conduct of the affairs of the
regulated entity, as it may deem appropriate, together with an order
prohibiting compensation described in subsection (b)(1)(B). Any such
order shall become effective at the expiration of 30 days after service
upon such regulated entity and such party (except in the case of an
order issued upon consent, which shall become effective at the time
specified therein). Such order shall remain effective and enforceable
except to such extent as it is stayed, modified, terminated, or set
aside by action of the Director or a reviewing court.
``(d) Prohibition of Certain Specific Activities.--Any person
subject to an order issued under this section shall not--
``(1) participate in any manner in the conduct of the
affairs of any regulated entity;
``(2) solicit, procure, transfer, attempt to transfer,
vote, or attempt to vote any proxy, consent, or authorization
with respect to any voting rights in any regulated entity;
``(3) violate any voting agreement previously approved by
the Director; or
``(4) vote for a director, or serve or act as a regulated
entity-affiliated party.
``(e) Industry-Wide Prohibition.--
``(1) In general.--Except as provided in paragraph (2), any
person who, pursuant to an order issued under this section, has
been removed or suspended from office in a regulated entity or
prohibited from participating in the conduct of the affairs of
a regulated entity may not, while such order is in effect,
continue or commence to hold any office in, or participate in
any manner in the conduct of the affairs of, any regulated
entity.
``(2) Exception if director provides written consent.--If,
on or after the date an order is issued under this section
which removes or suspends from office any regulated entity-
affiliated party or prohibits such party from participating in
the conduct of the affairs of a regulated entity, such party
receives the written consent of the Director, the order shall,
to the extent of such consent, cease to apply to such party
with respect to the regulated entity described in the written
consent. If the Director grants such a written consent, it
shall publicly disclose such consent.
``(3) Violation of paragraph (1) treated as violation of
order.--Any violation of paragraph (1) by any person who is
subject to an order described in such subsection shall be
treated as a violation of the order.
``(f) Applicability.--This section shall only apply to a person who
is an individual, unless the Director specifically finds that it should
apply to a corporation, firm, or other business enterprise.
``(g) Stay of Suspension and Prohibition of Regulated Entity-
Affiliated Party.--Within 10 days after any regulated entity-affiliated
party has been suspended from office and/or prohibited from
participation in the conduct of the affairs of a regulated entity under
this section, such party may apply to the United States District Court
for the District of Columbia, or the United States district court for
the judicial district in which the headquarters of the regulated entity
is located, for a stay of such suspension and/or prohibition and any
prohibition under subsection (b)(1)(B) pending the completion of the
administrative proceedings pursuant to the notice served upon such
party under this section, and such court shall have jurisdiction to
stay such suspension and/or prohibition.
``(h) Suspension or Removal of Regulated Entity-Affiliated Party
Charged With Felony.--
``(1) Suspension or prohibition.--
``(A) In general.--Whenever any regulated entity-
affiliated party is charged in any information,
indictment, or complaint, with the commission of or
participation in a crime involving dishonesty or breach
of trust which is punishable by imprisonment for a term
exceeding one year under State or Federal law, the
Director may, if continued service or participation by
such party may pose a threat to the regulated entity or
impair public confidence in the regulated entity, by
written notice served upon such party--
``(i) suspend such party from office or
prohibit such party from further participation
in any manner in the conduct of the affairs of
any regulated entity; and
``(ii) prohibit the regulated entity from
releasing to or on behalf of the regulated
entity-affiliated party any compensation or
other payment of money or other thing of
current or potential value in connection with
the period of any such suspension or with any
resignation, removal, retirement, or other
termination of employment or office of the
party.
``(B) Provisions applicable to notice.--
``(i) Copy.--A copy of any notice under
paragraph (1)(A) shall also be served upon the
regulated entity.
``(ii) Effective period.--A suspension or
prohibition under subparagraph (A) shall remain
in effect until the information, indictment, or
complaint referred to in such subparagraph is
finally disposed of or until terminated by the
Director.
``(2) Removal or prohibition.--
``(A) In general.--If a judgment of conviction or
an agreement to enter a pretrial diversion or other
similar program is entered against a regulated entity-
affiliated party in connection with a crime described
in paragraph (1)(A), at such time as such judgment is
not subject to further appellate review, the Director
may, if continued service or participation by such
party may pose a threat to the regulated entity or
impair public confidence in the regulated entity, issue
and serve upon such party an order that--
``(i) removes such party from office or
prohibits such party from further participation
in any manner in the conduct of the affairs of
the regulated entity without the prior written
consent of the Director; and
``(ii) prohibits the regulated entity from
releasing to or on behalf of the regulated
entity-affiliated party any compensation or
other payment of money or other thing of
current or potential value in connection with
the termination of employment or office of the
party.
``(B) Provisions applicable to order.--
``(i) Copy.--A copy of any order under
paragraph (2)(A) shall also be served upon the
regulated entity, whereupon the regulated
entity-affiliated party who is subject to the
order (if a director or an officer) shall cease
to be a director or officer of such regulated
entity.
``(ii) Effect of acquittal.--A finding of
not guilty or other disposition of the charge
shall not preclude the Director from
instituting proceedings after such finding or
disposition to remove such party from office or
to prohibit further participation in regulated
entity affairs, and to prohibit compensation or
other payment of money or other thing of
current or potential value in connection with
any resignation, removal, retirement, or other
termination of employment or office of the
party, pursuant to subsections (a), (d), or (e)
of this section.
``(iii) Effective period.--Any notice of
suspension or order of removal issued under
this subsection shall remain effective and
outstanding until the completion of any hearing
or appeal authorized under paragraph (4) unless
terminated by the Director.
``(3) Authority of remaining board members.--If at any
time, because of the suspension of one or more directors
pursuant to this section, there shall be on the board of
directors of a regulated entity less than a quorum of directors
not so suspended, all powers and functions vested in or
exercisable by such board shall vest in and be exercisable by
the director or directors on the board not so suspended, until
such time as there shall be a quorum of the board of directors.
In the event all of the directors of a regulated entity are
suspended pursuant to this section, the Director shall appoint
persons to serve temporarily as directors in their place and
stead pending the termination of such suspensions, or until
such time as those who have been suspended cease to be
directors of the regulated entity and their respective
successors take office.
``(4) Hearing regarding continued participation.--Within 30
days from service of any notice of suspension or order of
removal issued pursuant to paragraph (1) or (2) of this
subsection, the regulated entity-affiliated party concerned may
request in writing an opportunity to appear before the Director
to show that the continued service to or participation in the
conduct of the affairs of the regulated entity by such party
does not, or is not likely to, pose a threat to the interests
of the regulated entity or threaten to impair public confidence
in the regulated entity. Upon receipt of any such request, the
Director shall fix a time (not more than 30 days after receipt
of such request, unless extended at the request of such party)
and place at which such party may appear, personally or through
counsel, before one or more members of the Director or
designated employees of the Director to submit written
materials (or, at the discretion of the Director, oral
testimony) and oral argument. Within 60 days of such hearing,
the Director shall notify such party whether the suspension or
prohibition from participation in any manner in the conduct of
the affairs of the regulated entity will be continued,
terminated, or otherwise modified, or whether the order
removing such party from office or prohibiting such party from
further participation in any manner in the conduct of the
affairs of the regulated entity, and prohibiting compensation
in connection with termination will be rescinded or otherwise
modified. Such notification shall contain a statement of the
basis for the Director's decision, if adverse to such party.
The Director is authorized to prescribe such rules as may be
necessary to effectuate the purposes of this subsection.
``(i) Hearings and Judicial Review.--
``(1) Venue and procedure.--Any hearing provided for in
this section shall be held in the District of Columbia or in
the Federal judicial district in which the headquarters of the
regulated entity is located, unless the party afforded the
hearing consents to another place, and shall be conducted in
accordance with the provisions of chapter 5 of title 5, United
States Code. After such hearing, and within 90 days after the
Director has notified the parties that the case has been
submitted to it for final decision, it shall render its
decision (which shall include findings of fact upon which its
decision is predicated) and shall issue and serve upon each
party to the proceeding an order or orders consistent with the
provisions of this section. Judicial review of any such order
shall be exclusively as provided in this subsection. Unless a
petition for review is timely filed in a court of appeals of
the United States, as provided in paragraph (2), and thereafter
until the record in the proceeding has been filed as so
provided, the Director may at any time, upon such notice and in
such manner as it shall deem proper, modify, terminate, or set
aside any such order. Upon such filing of the record, the
Director may modify, terminate, or set aside any such order
with permission of the court.
``(2) Review of order.--Any party to any proceeding under
paragraph (1) may obtain a review of any order served pursuant
to paragraph (1) (other than an order issued with the consent
of the regulated entity or the regulated entity-affiliated
party concerned, or an order issued under subsection (h) of
this section) by the filing in the United States Court of
Appeals for the District of Columbia Circuit or court of
appeals of the United States for the circuit in which the
headquarters of the regulated entity is located, within 30 days
after the date of service of such order, a written petition
praying that the order of the Director be modified, terminated,
or set aside. A copy of such petition shall be forthwith
transmitted by the clerk of the court to the Director, and
thereupon the Director shall file in the court the record in
the proceeding, as provided in section 2112 of title 28, United
States Code. Upon the filing of such petition, such court shall
have jurisdiction, which upon the filing of the record shall
(except as provided in the last sentence of paragraph (1)) be
exclusive, to affirm, modify, terminate, or set aside, in whole
or in part, the order of the Director. Review of such
proceedings shall be had as provided in chapter 7 of title 5,
United States Code. The judgment and decree of the court shall
be final, except that the same shall be subject to review by
the Supreme Court upon certiorari, as provided in section 1254
of title 28, United States Code.
``(3) Proceedings not treated as stay.--The commencement of
proceedings for judicial review under paragraph (2) shall not,
unless specifically ordered by the court, operate as a stay of
any order issued by the Director.''.
(b) Conforming Amendments.--
(1) 1992 act.--Section 1317(f) of the Housing and Community
Development Act of 1992 (12 U.S.C. 4517(f)) is amended by
striking ``section 1379B'' and inserting ``section 1379D''.
(2) Fannie mae charter act.--The second sentence of
subsection (b) of section 308 of the Federal National Mortgage
Association Charter Act (12 U.S.C. 1723(b)) is amended by
striking ``The'' and inserting ``Except to the extent that
action under section 1377 of the Housing and Community
Development Act of 1992 temporarily results in a lesser number,
the''.
(3) Freddie mac act.--The second sentence of subparagraph
(A) of section 303(a)(2) of the Federal Home Loan Mortgage
Corporation Act (12 U.S.C. 1452(a)(2)(A)) is amended by
striking ``The'' and inserting ``Except to the extent that
action under section 1377 of the Housing and Community
Development Act of 1992 temporarily results in a lesser number,
the''.
SEC. 167. CRIMINAL PENALTY.
Subtitle C of title XIII of the Housing and Community Development
Act of 1992 (12 U.S.C. 4631 et seq.) is amended by inserting after
section 1377 (as added by the preceding provisions of this Act) the
following new section:
``SEC. 1378. CRIMINAL PENALTY.
``Whoever, being subject to an order in effect under section 1377,
without the prior written approval of the Director, knowingly
participates, directly or indirectly, in any manner (including by
engaging in an activity specifically prohibited in such an order) in
the conduct of the affairs of any regulated entity shall,
notwithstanding section 3571 of title 18, be fined not more than
$1,000,000, imprisoned for not more than 5 years, or both.''.
SEC. 168. SUBPOENA AUTHORITY.
Section 1379D(c) of the Housing and Community Development Act of
1992 (12 U.S.C. 4641(c)), as so redesignated by section 165(a)(1) of
this Act, is further amended--
(1) by striking ``request the Attorney General of the
United States to'' and inserting ``, in the discretion of the
Director,'';
(2) by inserting ``or request that the Attorney General of
the United States bring such an action,'' after ``District of
Columbia,''; and
(3) by striking ``or may, under the direction and control
of the Attorney General, bring such an action''.
SEC. 169. CONFORMING AMENDMENTS.
Subtitle C of title XIII of the Housing and Community Development
Act of 1992 is amended--
(1) in section 1372(c)(1) (12 U.S.C. 4632(c)), by striking
``that enterprise'' and inserting ``that regulated entity'';
(2) in section 1379 (12 U.S.C. 4637), as so redesignated by
section 165(a)(1) of this Act--
(A) by inserting ``, or of a regulated entity-
affiliated party,'' before ``shall not affect''; and
(B) by striking ``such director or executive
officer'' each place such term appears and inserting
``such director, executive officer, or regulated
entity-affiliated party'';
(3) in section 1379A (12 U.S.C. 4638), as so redesignated
by section 165(a)(1) of this Act, by inserting ``or against a
regulated entity-affiliated party,'' before ``or impair'';
(4) by striking ``An enterprise'' each place such term
appears in such subtitle and inserting ``A regulated entity'';
(5) by striking ``an enterprise'' each place such term
appears in such subtitle and inserting ``a regulated entity'';
(6) by striking ``the enterprise'' each place such term
appears in such subtitle and inserting ``the regulated
entity''; and
(7) by striking ``any enterprise'' each place such term
appears in such subtitle and inserting ``any regulated
entity''.
Subtitle E--General Provisions
SEC. 181. BOARDS OF ENTERPRISES.
(a) Fannie Mae.--
(1) In general.--Subsection (b) of section 308 of the
Federal National Mortgage Association Charter Act (12 U.S.C.
1723(b)) is amended in the first sentence by striking
``eighteen persons,'' and inserting ``not less than 7 and not
more than 15 persons,''.
(2) Transitional provision.--The amendments made by
paragraph (1) shall not apply to any appointed position of the
board of directors of the Federal National Mortgage Association
until the expiration of the annual term for such position
during which the effective date under section 185 occurs.
(b) Freddie Mac.--
(1) In general.--Paragraph (2) of section 303(a) of the
Federal Home Loan Mortgage Corporation Act (12 U.S.C.
1452(a)(2) is amended in subparagraph (A) by striking
``eighteen persons,'' and inserting ``not less than 7 and not
more than 15 persons,''.
(2) Transitional provision.--The amendments made by
paragraph (1) shall not apply to any appointed position of the
Board of Directors of the Federal Home Loan Mortgage
Corporation until the expiration of the annual term for such
position during which the effective date under section 185
occurs.
SEC. 182. REPORT ON PORTFOLIO OPERATIONS, SAFETY AND SOUNDNESS, AND
MISSION OF ENTERPRISES.
Not later than the expiration of the 12-month period beginning on
the effective date under section 185, the Director of the Federal
Housing Finance Agency shall submit a report to the Congress which
shall include--
(1) a description of the portfolio holdings of the
enterprises (as such term is defined in section 1303 of the
Housing and Community Development Act of 1992 (12 U.S.C. 4502)
in mortgages (including whole loans and mortgage-backed
securities), non-mortgages, and other assets;
(2) a description of the risk implications for the
enterprises of such holdings and the consequent risk management
undertaken by the enterprises (including the use of derivatives
for hedging purposes), compared with off-balance sheet
liabilities of the enterprises (including mortgage-backed
securities guaranteed by the enterprises);
(3) an analysis of portfolio holdings for safety and
soundness purposes;
(4) an assessment of whether portfolio holdings fulfill the
mission purposes of the enterprises under the Federal National
Mortgage Association Charter Act and the Federal Home Loan
Mortgage Corporation Act; and
(5) an analysis of the potential systemic risk implications
for the enterprises, the housing and capital markets, and the
financial system of portfolio holdings, and whether such
holdings should be limited or reduced over time.
SEC. 183. CONFORMING AND TECHNICAL AMENDMENTS.
(a) 1992 Act.--Title XIII of the Housing and Community Development
Act of 1992 is amended by striking section 1383 (12 U.S.C. 1451 note).
(b) Title 18, United States Code.--Section 1905 of title 18, United
States Code, is amended by striking ``Office of Federal Housing
Enterprise Oversight'' and inserting ``Federal Housing Finance
Agency''.
(c) Flood Disaster Protection Act of 1973.--Section 102(f)(3)(A) of
the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a(f)(3)(A)) is
amended by striking ``Director of the Office of Federal Housing
Enterprise Oversight of the Department of Housing and Urban
Development'' and inserting ``Director of the Federal Housing Finance
Agency''.
(d) Department of Housing and Urban Development Act.--Section 5 of
the Department of Housing and Urban Development Act (42 U.S.C. 3534) is
amended by striking subsection (d).
(e) Title 5, United States Code.--
(1) Director's pay rate.--Section 5313 of title 5, United
States Code, is amended by striking the item relating to the
Director of the Office of Federal Housing Enterprise Oversight,
Department of Housing and Urban Development and inserting the
following new item:
``Director of the Federal Housing Finance Agency.''.
(2) Deputy directors' pay rate.--Section 5314 of title 5,
United States Code, is amended by adding at the end the
following new item:
``Deputy Directors, Federal Housing Finance Agency (3).''.
(3) Pay rate for members of housing finance oversight
board.--Section 5315 of title 5, United States Code, is amended
by adding at the end the following new item:
``Members, Housing Finance Oversight Board.''.
(4) Exclusion from senior executive service.--Section
3132(a)(1)(D) of title 5, United States Code, is amended by
striking ``the Office of Federal Housing Enterprise Oversight
of the Department of Housing and Urban Development'' and
inserting ``the Federal Housing Finance Agency''.
(f) Inspector General Act of 1978.--Section 8G(a)(2) of the
Inspector General Act of 1978 (5 U.S.C. App.) is amended by striking
``Federal Housing Finance Board'' and inserting ``Federal Housing
Finance Agency''.
(g) Federal Deposit Insurance Act.--Section 11(t)(2)(A) of the
Federal Deposit Insurance Act (12 U.S.C.1821(t)(2)(A)) is amended by
adding at the end the following new clause:
``(vii) The Federal Housing Finance
Agency.''.
(h) 1997 Emergency Supplemental Appropriations Act.--Section 10001
of the 1997 Emergency Supplemental Appropriations Act for Recovery From
Natural Disasters, and for Overseas Peacekeeping Efforts, Including
Those In Bosnia (42 U.S.C. 3548) is amended--
(1) by striking ``the Government National Mortgage
Association, and the Office of Federal Housing Enterprise
Oversight'' and inserting ``and the Government National
Mortgage Association''; and
(2) by striking ``, the Government National Mortgage
Association, or the Office of Federal Housing Enterprise
Oversight'' and inserting ``or the Government National Mortgage
Association''.
(i) National Homeownership Trust Act .--Section 302(b)(4) of the
Cranston-Gonzalez National Affordable Housing Act (42 U.S.C.
12851(b)(4)) is amended by striking ``the chairperson of the Federal
Housing Finance Board'' and inserting ``the Director of the Federal
Housing Finance Agency''.
SEC. 184. STUDY OF ALTERNATIVE SECONDARY MARKET SYSTEMS.
(a) In General.--The Director of the Federal Housing Finance
Agency, in consultation with the Board of Governors of the Federal
Reserve System, the Secretary of the Treasury, and the Secretary of
Housing and Urban Development, shall conduct a comprehensive study of
the effects on financial and housing finance markets of alternatives to
the current secondary market system for housing finance, taking into
consideration changes in the structure of financial and housing finance
markets and institutions since the creation of the Federal National
Mortgage Association and the Federal Home Loan Mortgage Corporation.
(b) Contents.--The study under this section shall--
(1) include, among the alternatives to the current
secondary market system analyzed--
(A) repeal of the chartering Acts for the Federal
National Mortgage Association and the Federal Home Loan
Mortgage Corporation;
(B) establishing bank-like mechanisms for granting
new charters for limited purposed mortgage
securitization entities;
(C) permitting the Director of the Federal Housing
Finance Agency to grant new charters for limited
purpose mortgage securitization entities, which shall
include analyzing the terms on which such charters
should be granted, including whether such charters
should be sold, or whether such charters and the
charters for the Federal National Mortgage Association
and the Federal Home Loan Mortgage Corporation should
be taxed or otherwise assessed a monetary price; and
(D) such other alternatives as the Director
considers appropriate;
(2) examine all of the issues involved in making the
transition to a completely private secondary mortgage market
system;
(3) examine the technological advancements the private
sector has made in providing liquidity in the secondary
mortgage market and how such advancements have affected
liquidity in the secondary mortgage market; and
(4) examine how taxpayers would be impacted by each
alternative system, including the complete privatization of the
Federal National Mortgage Association and the Federal Home Loan
Mortgage Corporation.
(c) Report.--The Director of the Federal Housing Finance Agency
shall submit a report to the Congress on the study not later than the
expiration of the 12-month period beginning on the effective date under
section 185.
SEC. 185. EFFECTIVE DATE.
Except as specifically provided otherwise in this title, this title
shall take effect on and the amendments made by this title shall take
effect on, and shall apply beginning on, the expiration of the 6-month
period beginning on the date of the enactment of this Act.
TITLE II--FEDERAL HOME LOAN BANKS
SEC. 201. DEFINITIONS.
Section 2 of the Federal Home Loan Bank Act (12 U.S.C. 1422) is
amended--
(1) by striking paragraphs (1), (10), and (11);
(2) by redesignating paragraphs (2) through (9) as
paragraphs (1) through (8), respectively;
(3) by redesignating paragraphs (12) and (13) as paragraphs
(9) and (10), respectively; and
(4) by adding at the end the following:
``(11) Director.--The term `Director' means the Director of
the Federal Housing Finance Agency.
``(12) Agency.--The term `Agency' means the Federal Housing
Finance Agency.''.
SEC. 202. DIRECTORS.
(a) Election.--Section 7 of the Federal Home Loan Bank Act (12
U.S.C. 1427) is amended--
(1) by striking subsection (a) and inserting the following:
``(a) Number; Election; Qualifications; Conflicts of Interest.--
``(1) In general.--The management of each Federal Home Loan
Bank shall be vested in a board of 13 directors, or such other
number as the Director determines appropriate, each of whom
shall be a citizen of the United States. All directors of a
Bank who are not independent members pursuant to paragraph (3)
shall be elected by the members.
``(2) Member directors.--A majority of the directors of
each Bank shall be officers or directors of a member of such
Bank that is located in the district in which such Bank is
located.
``(3) Independent directors.--At least two-fifths of the
directors of each Bank shall be independent directors, who
shall be appointed by the Director of the Federal Housing
Finance Agency from a list of individuals recommended made by
the Housing Finance Oversight Board, and shall meet the
following criteria:
``(A) In general.--Each independent director shall
be a bona fide resident of the district in which such
Bank is located.
``(B) Public interest directors.--At least 2 of the
independent directors under this paragraph of each Bank
shall be representatives chosen from organizations with
more than a 2-year history of representing consumer or
community interests on banking services, credit needs,
housing, community development, economic development,
or financial consumer protections.
``(C) Other directors.--Each independent director
that is not a public interest director under
subparagraph (B) shall have demonstrated knowledge of,
or experience in, financial management, auditing and
accounting, risk management practices, derivatives,
project development, or organizational management, or
such other knowledge or expertise as the Director may
provide by regulation.
``(D) Conflicts of interest.--Notwithstanding
subsection (f)(2), an independent director under this
paragraph of a Bank may not, during such director's
term of office, serve as an officer of any Federal Home
Loan Bank or as a director or officer of any member of
a Bank.'';
(2) in the first sentence of subsection (b), by striking
``directorship'' and inserting ``member directorship pursuant
to subsection (a)(2)'';
(3) in subsection (c), by striking the second, third, and
fifth sentences; and
(4) by striking ``elective'' each place such term appears
(except in subsections (e) and (f)).
(b) Terms.--
(1) In general.--Section 7(d) of the Federal Home Loan Bank
Act (12 U.S.C. 1427(i)) is amended--
(A) in the first sentence, by striking ``3 years''
and inserting ``4 years''; and
(B) in the second sentence--
(i) by striking ``Federal Home Loan Bank
System Modernization Act of 1999'' and
inserting ``Federal Housing Finance Reform Act
of 2005''; and
(ii) by striking ``1/3'' and inserting ``1/
4''.
(2) Savings provision.--The amendments made by paragraph
(1) shall not apply to the term of office of any director of a
Federal home loan bank who is serving as of the effective date
of this Act under section 211, including any director elected
to fill a vacancy in any such office.
(c) Continued Service of Independent Directors After Expiration of
Term.--Section 7(f)(2) of the Federal Home Loan Bank Act (12 U.S.C.
1427(f)(2)) is amended--
(1) in the second sentence, by striking ``or the term of
such office expires, whichever comes first''; and
(2) by adding at the end the following new sentence: ``An
appointive Bank director may continue to serve as a director
after the expiration of the term of such director until a
successor is appointed.''.
(d) Compensation.--Subsection (i) of section 7 of the Federal Home
Loan Bank Act (12 U.S.C. 1427(i)) is amended to read as follows:
``(i) Directors' Compensation.--
``(1) In general.--Each Federal home loan bank may pay the
directors on the board of directors for the bank reasonable and
appropriate compensation for the time required of such
directors, and reasonable and appropriate expenses incurred by
such directors, in connection with service on the board of
directors, in accordance with resolutions adopted by the board
of directors and subject to the approval of the Director.
``(2) Annual report by the board.--The Director shall
include, in the annual report submitted to the Congress
pursuant to section 1319B of the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992, information
regarding the compensation and expenses paid by the Federal
home loan banks to the directors on the boards of directors of
the banks.''.
(e) Transition Rule.--Any member of the board of directors of a
Federal Home Loan Bank serving as of the effective date under section
211 may continue to serve as a member of such board of directors for
the remainder of the term of such office as provided in section 7 of
the Federal Home Loan Bank Act, as in effect before such effective
date.
SEC. 203. FEDERAL HOUSING FINANCE AGENCY OVERSIGHT OF FEDERAL HOME LOAN
BANKS.
The Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.), other than
in provisions of that Act added or amended otherwise by this Act, is
amended--
(1) by striking sections 2A and 2B (12 U.S.C. 1422a,
1422b);
(2) in section 6 (12 U.S.C. 1426(b)(1))--
(A) in subsection (b)(1), in the matter preceding
subparagraph (A), by striking ``Finance Board
approval'' and inserting ``approval by the Director'';
and
(B) in each of subsections (c)(4)(B) and (d)(2), by
striking ``Finance Board regulations'' each place that
term appears and inserting ``regulations of the
Director'';
(3) in section 8 (12 U.S.C. 1428), in the section heading,
by striking ``by the board'';
(4) in section 10(b) (12 U.S.C. 1430), by striking ``by
formal resolution'';
(5) in section 11 (12 U.S.C. 1431)--
(A) in subsection (b)--
(i) in the first sentence--
(I) by striking ``The Board'' and
inserting ``The Office of Finance, as
agent for the Banks,''; and
(II) by striking ``the Board'' and
inserting ``such Office''; and
(ii) in the second and fourth sentences, by
striking ``the Board'' each place such term
appears and inserting ``the Office of
Finance'';
(B) in subsection (c)--
(i) by striking ``the Board'' the first
place such term appears and inserting ``the
Office of Finance, as agent for the Banks,'';
and
(ii) by striking ``the Board'' the second
place such term appears and inserting ``such
Office''; and
(C) in subsection (f)--
(i) by striking the two commas after
``permit'' and inserting ``or''; and
(ii) by striking the comma after
``require'';
(6) in section 15 (12 U.S.C. 1435), by inserting ``or the
Director'' after ``the Board'';
(7) in section 18 (12 U.S.C. 1438), by striking subsection
(b);
(8) in section 21 (12 U.S.C. 1441)--
(A) in subsection (b)--
(i) in paragraph (5), by striking
``Chairperson of the Federal Housing Finance
Board'' and inserting ``Director''; and
(ii) in the heading for paragraph (8), by
striking ``federal housing finance board'' and
inserting ``director''; and
(B) in subsection (i), in the heading for paragraph
(2), by striking ``Federal housing finance board'' and
inserting ``Director'';
(9) in section 23 (12 U.S.C. 1443), by striking ``Board of
Directors of the Federal Housing Finance Board'' and inserting
``Director'';
(10) by striking ``the Board'' each place such term appears
in such Act (except in section 15 (12 U.S.C. 1435), section
21(f)(2) (12 U.S.C. 1441(f)(2)), subsections (a), (k)(2)(B)(i),
and (n)(6)(C)(ii) of section 21A (12 U.S.C. 1441a), subsections
(e)(7), (f)(2)(C), and (k)(7)(B)(ii) of section 21B (12 U.S.C.
1441b), and the first two places such term appears in section
22 (12 U.S.C. 1442)) and inserting ``the Director'';
(11) by striking ``The Board'' each place such term appears
in such Act (except in sections 7(e) (12 U.S.C. 1427(e)), and
11(b) (12 U.S.C. 1431(b)) and inserting ``The Director'';
(12) by striking ``the Board's'' each place such term
appears in such Act and inserting ``the Director's'';
(13) by striking ``The Board's'' each place such term
appears in such Act and inserting ``The Director's'';
(14) by striking ``The Finance Board'' each place such term
appears in such Act and inserting ``The Director'';
(15) by striking ``the Finance Board'' each place such term
appears in such Act and inserting ``the Director'';
(16) by striking ``Federal Housing Finance Board'' each
place such term appears and inserting ``Director'';
(17) in section 11(i) (12 U.S.C. 1431(i), by striking ``the
Chairperson of''; and
(18) in section 21(e)(9) (12 U.S.C. 1441(e)(9)), by
striking ``Chairperson of the''.
SEC. 204. JOINT ACTIVITIES OF BANKS.
Section 11 of the Federal Home Loan Bank Act (12 U.S.C. 1431) is
amended by adding at the end the following new subsection:
``(l) Joint Activities.--Subject to the regulation of the Director,
any two or more Federal Home Loan Banks may establish a joint office
for the purpose of performing functions for, or providing services to,
the Banks on a common or collective basis, or may require that the
Office of Finance perform such functions or services, but only if the
Banks are otherwise authorized to perform such functions or services
individually.''.
SEC. 205. SHARING OF INFORMATION BETWEEN FEDERAL HOME LOAN BANKS.
(a) In General.-- The Federal Home Loan Bank Act is amended by
inserting after section 20 (12 U.S.C. 1440) the following new section:
``SEC. 20A. SHARING OF INFORMATION BETWEEN FEDERAL HOME LOAN BANKS.
``(a) Regulatory Authority.--The Director shall prescribe such
regulations as may be necessary to ensure that each Federal Home Loan
Bank has access to information that the Bank needs to determine the
nature and extent of its joint and several liability.
``(b) No Waiver of Privilege.--The Director shall not be deemed to
have waived any privilege applicable to any information concerning a
Federal Home Loan Bank by transferring, or permitting the transfer of,
that information to any other Federal Home Loan Bank for the purpose of
enabling the recipient to evaluate the nature and extent of its joint
and several liability.''.
(b) Regulations.--The regulations required under the amendment made
by subsection (a) shall be issued in final form not later than 6 months
after the effective date under section 211 of this Act.
SEC. 206. REORGANIZATION OF BANKS AND VOLUNTARY MERGER.
Section 26 of the Federal Home Loan Bank Act (12 U.S.C. 1446) is
amended--
(1) by inserting ``(a) Reorganization.--'' before
``Whenever''; and
(2) by striking ``liquidated or'' each place such phrase
appears;
(3) by striking ``liquidation or''; and
(4) by adding at the end the following new subsection:
``(b) Voluntary Mergers.--Any Bank may, with the approval of the
Director, and the approval of the boards of directors of the Banks
involved, merge with another Bank. The Director shall promulgate
regulations establishing the conditions and procedures for the
consideration and approval of any such voluntary merger, including the
procedures for Bank member approval.''.
SEC. 207. SECURITIES AND EXCHANGE COMMISSION DISCLOSURE.
(a) In General.--The Federal Home Loan Banks shall be exempt from
compliance with--
(1) sections 13(e), 14(a), 14(c), and 17A of the Securities
Exchange Act of 1934 and related Commission regulations; and
(2) section 15 of that Act and related Securities and
Exchange Commission regulations with respect to transactions in
capital stock of the Banks.
(b) Member Exemption.--The members of the Federal Home Loan Banks
shall be exempt from compliance with sections 13(d), 13(f), 13(g),
14(d), and 16 of the Securities Exchange Act of 1934 and related
Securities and Exchange Commission regulations with respect to their
ownership of, or transactions in, capital stock of the Federal Home
Loan Banks.
(c) Exempted and Government Securities.--
(1) Capital stock.--The capital stock issued by each of the
Federal Home Loan Banks under section 6 of the Federal Home
Loan Bank Act are--
(A) exempted securities within the meaning of
section 3(a)(2) of the Securities Act of 1933; and
(B) ``exempted securities'' within the meaning of
section 3(a)(12)(A) of the Securities Exchange Act of
1934.
(2) Other obligations.--The debentures, bonds, and other
obligations issued under section 11 of the Federal Home Loan
Bank Act are--
(A) exempted securities within the meaning of
section 3(a)(2) of the Securities Act of 1933;
(B) ``government securities'' within the meaning of
section 3(a)(42) of the Securities Exchange Act of
1934;
(C) excluded from the definition of ``government
securities broker'' within section 3(a)(43) of the
Securities Exchange Act of 1934;
(D) excluded from the definition of ``government
securities dealer'' within section 3(a)(44) of the
Securities Exchange Act of 1934; and
(E) ``government securities'' within the meaning of
section 2(a)(16) of the Investment Company Act of 1940.
(d) Exemption From Reporting Requirements.--The Federal Home Loan
Banks shall be exempt from periodic reporting requirements pertaining
to--
(1) the disclosure of related party transactions that occur
in the ordinary course of business of the Banks with their
members; and
(2) the disclosure of unregistered sales of equity
securities.
(e) Tender Offers.--The Securities and Exchange Commission's rules
relating to tender offers shall not apply in connection with
transactions in capital stock of the Federal Home Loan Banks.
(f) Regulations.--In issuing final regulations to implement
provisions of this section, the Securities and Exchange Commission
shall consider the distinctive characteristics of the Federal Home Loan
Banks when evaluating the accounting treatment with respect to the
payment to Resolution Funding Corporation, the role of the combined
financial statements of the twelve Banks, the accounting classification
of redeemable capital stock, and the accounting treatment related to
the joint and several nature of the obligations of the Banks.
SEC. 208. COMMUNITY FINANCIAL INSTITUTION MEMBERS.
(a) Total Asset Requirement.--Paragraph (10) of section 2 of the
Federal Home Loan Bank Act (12 U.S.C. 1422(10)), as so redesignated by
section 201(3) of this Act, is amended by striking ``$500,000,000''
each place such term appears and inserting ``$1,000,000,000''.
(b) Use of Advances for Community Development Activities.--Section
10(a) of the Federal Home Loan Bank Act (12 U.S.C. 1430(a)) is
amended--
(1) in paragraph (2)(B)--
(A) by striking ``and''; and
(B) by inserting ``, and community development
activities'' before the period at the end;
(2) in paragraph (3)(E), by inserting ``or community
development activities'' after ``agriculture,''; and
(3) in paragraph (6)--
(A) by striking ``and''; and
(B) by inserting ``, and `community development
activities''' before ``shall''.
SEC. 209. TECHNICAL AND CONFORMING AMENDMENTS.
(a) Right to Financial Privacy Act of 1978.--Section 1113(o) of the
Right to Financial Privacy Act of 1978 (12 U.S.C. 3413(o)) is amended--
(1) by striking ``Federal Housing Finance Board'' and
inserting ``Federal Housing Finance Agency''; and
(2) by striking ``Federal Housing Finance Board's'' and
inserting ``Federal Housing Finance Agency's''.
(b) Riegle Community Development and Regulatory Improvement Act of
1994.--Section 117(e) of the Riegle Community Development and
Regulatory Improvement Act of 1994 (12 U.S.C. 4716(e)) is amended by
striking ``Federal Housing Finance Board'' and inserting ``Federal
Housing Finance Agency''.
(c) Title 18, United States Code.--Title 18, United States Code, is
amended by striking ``Federal Housing Finance Board'' each place such
term appears in each of sections 212, 657, 1006, 1014, and inserting
``Federal Housing Finance Agency''.
(d) MAHRA Act of 1997.--Section 517(b)(4) of the Multifamily
Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f
note) is amended by striking ``Federal Housing Finance Board'' and
inserting ``Federal Housing Finance Agency''.
(e) Title 44, United States Code.--Section 3502(5) of title 44,
United States Code, is amended by striking ``Federal Housing Finance
Board'' and inserting ``Federal Housing Finance Agency''.
(f) Access to Local TV Act of 2000.--Section 1004(d)(2)(D)(iii) of
the Launching Our Communities' Access to Local Television Act of 2000
(47 U.S.C. 1103(d)(2)(D)(iii)) is amended by striking ``Office of
Federal Housing Enterprise Oversight, the Federal Housing Finance
Board'' and inserting ``Federal Housing Finance Agency''.
SEC. 210. STUDY OF AFFORDABLE HOUSING PROGRAM USE FOR LONG-TERM CARE
FACILITIES.
The Comptroller General shall conduct a study of the use of
affordable housing programs of the Federal home loan banks under
section 10(j) of the Federal Home Loan Bank Act to determine how and
the extent to which such programs are used to assist long-term care
facilities for low- and moderate-income individuals, and the
effectiveness and adequacy of such assistance in meeting the needs of
affected communities. The study shall examine the applicability of such
use to the affordable housing programs required to be established by
the enterprises pursuant to the amendment made by section 128 of this
Act. The Comptroller General shall submit a report to the Director of
the Federal Housing Finance Agency and the Congress regarding the
results of the study not later than the expiration of the 1-year period
beginning on the date of the enactment of this Act. This section shall
take effect on the date of the enactment of this Act.
SEC. 211. EFFECTIVE DATE.
Except as specifically provided otherwise in this title, this title
shall take effect on and the amendments made by this title shall take
effect on, and shall apply beginning on, the expiration of the 6-month
period beginning on the date of the enactment of this Act.
TITLE III--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY OF OFFICE OF
FEDERAL HOUSING ENTERPRISE OVERSIGHT, FEDERAL HOUSING FINANCE BOARD,
AND DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Subtitle A--Office of Federal Housing Enterprise Oversight
SEC. 301. ABOLISHMENT OF OFHEO.
(a) In General.--Effective at the end of the 6-month period
beginning on the date of the enactment of this Act, the Office of
Federal Housing Enterprise Oversight of the Department of Housing and
Urban Development and the positions of the Director and Deputy Director
of such Office are abolished.
(b) Disposition of Affairs.--During the 6-month period beginning on
the date of the enactment of this Act, the Director of the Office of
Federal Housing Enterprise Oversight shall, for the purpose of winding
up the affairs of the Office of Federal Housing Enterprise Oversight
and in addition to carrying out its other responsibilities under law--
(1) manage the employees of such Office and provide for the
payment of the compensation and benefits of any such employee
which accrue before the effective date of the transfer of such
employee pursuant to section 303; and
(2) may take any other action necessary for the purpose of
winding up the affairs of the Office.
(c) Status of Employees Before Transfer.--The amendments made by
title I and the abolishment of the Office of Federal Housing Enterprise
Oversight under subsection (a) of this section may not be construed to
affect the status of any employee of such Office as employees of an
agency of the United States for purposes of any other provision of law
before the effective date of the transfer of any such employee pursuant
to section 303.
(d) Use of Property and Services.--
(1) Property.--The Director of the Federal Housing Finance
Agency may use the property of the Office of Federal Housing
Enterprise Oversight to perform functions which have been
transferred to the Director of the Federal Housing Finance
Agency for such time as is reasonable to facilitate the orderly
transfer of functions transferred pursuant to any other
provision of this Act or any amendment made by this Act to any
other provision of law.
(2) Agency services.--Any agency, department, or other
instrumentality of the United States, and any successor to any
such agency, department, or instrumentality, which was
providing supporting services to the Office of Federal Housing
Enterprise Oversight before the expiration of the period under
subsection (a) in connection with functions that are
transferred to the Director of the Federal Housing Finance
Agency shall--
(A) continue to provide such services, on a
reimbursable basis, until the transfer of such
functions is complete; and
(B) consult with any such agency to coordinate and
facilitate a prompt and reasonable transition.
(e) Savings Provisions.--
(1) Existing rights, duties, and obligations not
affected.--Subsection (a) shall not affect the validity of any
right, duty, or obligation of the United States, the Director
of the Office of Federal Housing Enterprise Oversight, or any
other person, which--
(A) arises under or pursuant to the title XIII of
the Housing and Community Development Act of 1992, the
Federal National Mortgage Association Charter Act, the
Federal Home Loan Mortgage Corporation Act, or any
other provision of law applicable with respect to such
Office; and
(B) existed on the day before the abolishment under
subsection (a) of this section.
(2) Continuation of suits.--No action or other proceeding
commenced by or against the Director of the Office of Federal
Housing Enterprise Oversight in connection with functions that
are transferred to the Director of the Federal Housing Finance
Agency shall abate by reason of the enactment of this Act,
except that the Director of the Federal Housing Finance Agency
shall be substituted for the Director of the Office of Federal
Housing Enterprise Oversight as a party to any such action or
proceeding.
SEC. 302. CONTINUATION AND COORDINATION OF CERTAIN REGULATIONS.
All regulations, orders, determinations, and resolutions that--
(1) were issued, made, prescribed, or allowed to become
effective by--
(A) the Office of Federal Housing Enterprise
Oversight; or
(B) a court of competent jurisdiction and that
relate to functions transferred by this subtitle; and
(2) are in effect on the date of the abolishment under
section 301(a) of this Act, shall remain in effect according to
the terms of such regulations, orders, determinations, and
resolutions, and shall be enforceable by or against the
Director of the Federal Housing Finance Agency until modified,
terminated, set aside, or superseded in accordance with
applicable law by such Director, as the case may be, any court
of competent jurisdiction, or operation of law.
SEC. 303. TRANSFER AND RIGHTS OF EMPLOYEES OF OFHEO.
(a) Transfer.--Each employee of the Office of Federal Housing
Enterprise Oversight shall be transferred to the Federal Housing
Finance Agency for employment no later than the date of the abolishment
under section 301(a) of this Act and such transfer shall be deemed a
transfer of function for purposes of section 3503 of title 5, United
States Code.
(b) Guaranteed Positions.--Each employee transferred under
subsection (a) shall be guaranteed a position with the same status,
tenure, grade, and pay as that held on the day immediately preceding
the transfer. Each such employee holding a permanent position shall not
be involuntarily separated or reduced in grade or compensation for 12
months after the date of transfer, except for cause or, if the employee
is a temporary employee, separated in accordance with the terms of the
appointment.
(c) Appointment Authority for Excepted Service Employees.--
(1) In general.--In the case of employees occupying
positions in the excepted service, any appointment authority
established pursuant to law or regulations of the Office of
Personnel Management for filling such positions shall be
transferred, subject to paragraph (2).
(2) Decline of transfer.--The Director of the Federal
Housing Finance Agency may decline a transfer of authority
under paragraph (1) (and the employees appointed pursuant
thereto) to the extent that such authority relates to positions
excepted from the competitive service because of their
confidential, policy-making, policy-determining, or policy-
advocating character.
(d) Reorganization.--If the Director of the Federal Housing Finance
Agency determines, after the end of the 1-year period beginning on the
date of the abolishment under section 301(a), that a reorganization of
the combined work force is required, that reorganization shall be
deemed a major reorganization for purposes of affording affected
employees retirement under section 8336(d)(2) or 8414(b)(1)(B) of title
5, United States Code.
(e) Employee Benefit Programs.--Any employee of the Office of
Federal Housing Enterprise Oversight accepting employment with the
Director of the Federal Housing Finance Agency as a result of a
transfer under subsection (a) may retain for 12 months after the date
such transfer occurs membership in any employee benefit program of the
Federal Housing Finance Agency or the Office of Federal Housing
Enterprise Oversight, as applicable, including insurance, to which such
employee belongs on the date of the abolishment under section 301(a)
if--
(1) the employee does not elect to give up the benefit or
membership in the program; and
(2) the benefit or program is continued by the Director of
the Federal Housing Finance Agency,
The difference in the costs between the benefits which would have been
provided by such agency and those provided by this section shall be
paid by the Director of the Federal Housing Finance Agency. If any
employee elects to give up membership in a health insurance program or
the health insurance program is not continued by such Director, the
employee shall be permitted to select an alternate Federal health
insurance program within 30 days of such election or notice, without
regard to any other regularly scheduled open season.
SEC. 304. TRANSFER OF PROPERTY AND FACILITIES.
Upon the abolishment under section 301(a), all property of the
Office of Federal Housing Enterprise Oversight shall transfer to the
Director of the Federal Housing Finance Agency.
Subtitle B--Federal Housing Finance Board
SEC. 321. ABOLISHMENT OF THE FEDERAL HOUSING FINANCE BOARD.
(a) In General.--Effective at the end of the 6-month period
beginning on the date of enactment of this Act, the Federal Housing
Finance Board (in this title referred to as the ``Board'') is
abolished.
(b) Disposition of Affairs.--During the 6-month period beginning on
the date of enactment of this Act, the Board, for the purpose of
winding up the affairs of the Board and in addition to carrying out its
other responsibilities under law--
(1) shall manage the employees of such Board and provide
for the payment of the compensation and benefits of any such
employee which accrue before the effective date of the transfer
of such employee under section 323; and
(2) may take any other action necessary for the purpose of
winding up the affairs of the Board.
(c) Status of Employees Before Transfer.--The amendments made by
titles I and II and the abolishment of the Board under subsection (a)
may not be construed to affect the status of any employee of such Board
as employees of an agency of the United States for purposes of any
other provision of law before the effective date of the transfer of any
such employee under section 323.
(d) Use of Property and Services.--
(1) Property.--The Director of the Federal Housing Finance
Agency may use the property of the Board to perform functions
which have been transferred to the Director of the Federal
Housing Finance Agency for such time as is reasonable to
facilitate the orderly transfer of functions transferred under
any other provision of this Act or any amendment made by this
Act to any other provision of law.
(2) Agency services.--Any agency, department, or other
instrumentality of the United States, and any successor to any
such agency, department, or instrumentality, which was
providing supporting services to the Board before the
expiration of the period under subsection (a) in connection
with functions that are transferred to the Director of the
Federal Housing Finance Agency shall--
(A) continue to provide such services, on a
reimbursable basis, until the transfer of such
functions is complete; and
(B) consult with any such agency to coordinate and
facilitate a prompt and reasonable transition.
(e) Savings Provisions.--
(1) Existing rights, duties, and obligations not
affected.--Subsection (a) shall not affect the validity of any
right, duty, or obligation of the United States, a member of
the Board, or any other person, which--
(A) arises under the Federal Home Loan Bank Act or
any other provision of law applicable with respect to
such Board; and
(B) existed on the day before the effective date of
the abolishment under subsection (a).
(2) Continuation of suits.--No action or other proceeding
commenced by or against the Board in connection with functions
that are transferred to the Director of the Federal Housing
Finance Agency shall abate by reason of the enactment of this
Act, except that the Director of the Federal Housing Finance
Agency shall be substituted for the Board or any member thereof
as a party to any such action or proceeding.
SEC. 322. CONTINUATION AND COORDINATION OF CERTAIN REGULATIONS.
(a) In General.--All regulations, orders, and determinations
described under subsection (b) shall remain in effect according to the
terms of such regulations, orders, determinations, and resolutions, and
shall be enforceable by or against the Director of the Federal Housing
Finance Agency until modified, terminated, set aside, or superseded in
accordance with applicable law by such Director, any court of competent
jurisdiction, or operation of law.
(b) Applicability.--A regulation, order, or determination is
described under this subsection if it--
(1) was issued, made, prescribed, or allowed to become
effective by--
(A) the Board; or
(B) a court of competent jurisdiction and relates
to functions transferred by this subtitle; and
(2) is in effect on the effective date of the abolishment
under section 321(a).
SEC. 323. TRANSFER AND RIGHTS OF EMPLOYEES OF THE FEDERAL HOUSING
FINANCE BOARD.
(a) Transfer.--Each employee of the Board shall be transferred to
the Federal Housing Finance Agency for employment not later than the
effective date of the abolishment under section 321(a), and such
transfer shall be deemed a transfer of function for purposes of section
3503 of title 5, United States Code.
(b) Guaranteed Positions.--Each employee transferred under
subsection (a) shall be guaranteed a position with the same status,
tenure, grade, and pay as that held on the day immediately preceding
the transfer. Each such employee holding a permanent position shall not
be involuntarily separated or reduced in grade or compensation for 12
months after the date of transfer, except for cause or, if the employee
is a temporary employee, separated in accordance with the terms of the
appointment.
(c) Appointment Authority for Excepted and Senior Executive Service
Employees.--
(1) In general.--In the case of employees occupying
positions 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 positions shall be transferred, subject to paragraph (2).
(2) Decline of transfer.--The Director of the Federal
Housing Finance Agency may decline a transfer of authority
under paragraph (1) to the extent that such authority relates
to positions excepted from the competitive service because of
their confidential, policymaking, policy-determining, or
policy-advocating character, and noncareer positions in the
Senior Executive Service (within the meaning of section
3132(a)(7) of title 5, United States Code).
(d) Reorganization.--If the Director of the Federal Housing Finance
Agency determines, after the end of the 1-year period beginning on the
effective date of the abolishment under section 321(a), that a
reorganization of the combined workforce is required, that
reorganization shall be deemed a major reorganization for purposes of
affording affected employees 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 of the Board accepting
employment with the Federal Housing Finance 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 Federal Housing Finance Agency
or the Board, as applicable, including insurance, to which such
employee belongs on the effective date of the abolishment under
section 321(a) 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.--The difference in the costs between
the benefits which would have been provided by the Board and
those provided by this section shall be paid by the Director of
the Federal Housing Finance Agency. If any employee elects to
give up membership in a health insurance program or the health
insurance program is not continued by such Director, the
employee shall be permitted to select an alternate Federal
health insurance program within 30 days after such election or
notice, without regard to any other regularly scheduled open
season.
SEC. 324. TRANSFER OF PROPERTY AND FACILITIES.
Upon the effective date of the abolishment under section 321(a),
all property of the Board shall transfer to the Director of the Federal
Housing Finance Agency.
Subtitle C--Department of Housing and Urban Development
SEC. 341. TERMINATION OF ENTERPRISE-RELATED FUNCTIONS.
(a) Termination Date.--For purposes of this subtitle, the term
``termination date'' means the date that occurs 6 months after the date
of the enactment of this Act.
(b) Determination of Transferred Functions and Employees.--
(1) In general.--Not later than the expiration of the 3-
month period beginning on the date of the enactment of this
Act, the Secretary, in consultation with the Director of the
Office of Federal Housing Enterprise Oversight, shall
determine--
(A) the functions, duties, and activities of the
Secretary of Housing and Urban Development regarding
oversight or regulation of the enterprises under or
pursuant to the authorizing statutes, title XIII of the
Housing and Community Development Act of 1992, and any
other provisions of law, as in effect before the date
of the enactment of this Act, but not including any
such functions, duties, and activities of the Director
of the Office of Federal Housing Enterprise Oversight
of the Department of Housing and Urban Development and
such Office; and
(B) the employees of the Department of Housing and
Urban Development necessary to perform such functions,
duties, and activities.
(2) Enterprise-related functions.--For purposes of this
subtitle, the term ``enterprise-related functions of the
Department'' means the functions, duties, and activities of the
Department of Housing and Urban Development determined under
paragraph (1)(A).
(3) Enterprise-related employees.--For purposes of this
subtitle, the term ``enterprise-related employees of the
Department'' means the employees of the Department of Housing
and Urban Development determined under paragraph (1)(B).
(c) Disposition of Affairs.--During the 6-month period beginning on
the date of enactment of this Act, the Secretary of Housing and Urban
Development (in this title referred to as the ``Secretary''), for the
purpose of winding up the affairs of the Secretary regarding the
enterprise-related functions of the Department of Housing and Urban
Development (in this title referred to as the ``Department'') and in
addition to carrying out the Secretary's other responsibilities under
law regarding such functions--
(1) shall manage the enterprise-related employees of the
Department and provide for the payment of the compensation and
benefits of any such employee which accrue before the effective
date of the transfer of any such employee under section 343;
and
(2) may take any other action necessary for the purpose of
winding up the enterprise-related functions of the Department.
(d) Status of Employees Before Transfer.--The amendments made by
titles I and II and the termination of the enterprise-related functions
of the Department under subsection (b) may not be construed to affect
the status of any employee of the Department as employees of an agency
of the United States for purposes of any other provision of law before
the effective date of the transfer of any such employee under section
343.
(e) Use of Property and Services.--
(1) Property.--The Director of the Federal Housing Finance
Agency may use the property of the Secretary to perform
functions which have been transferred to the Director of the
Federal Housing Finance Agency for such time as is reasonable
to facilitate the orderly transfer of functions transferred
under any other provision of this Act or any amendment made by
this Act to any other provision of law.
(2) Agency services.--Any agency, department, or other
instrumentality of the United States, and any successor to any
such agency, department, or instrumentality, which was
providing supporting services to the Secretary regarding
enterprise-related functions of the Department before the
termination date under subsection (a) in connection with such
functions that are transferred to the Director of the Federal
Housing Finance Agency shall--
(A) continue to provide such services, on a
reimbursable basis, until the transfer of such
functions is complete; and
(B) consult with any such agency to coordinate and
facilitate a prompt and reasonable transition.
(f) Savings Provisions.--
(1) Existing rights, duties, and obligations not
affected.--Subsection (a) shall not affect the validity of any
right, duty, or obligation of the United States, the Secretary,
or any other person, which--
(A) arises under the authorizing statutes, title
XIII of the Housing and Community Development Act of
1992, or any other provision of law applicable with
respect to the Secretary, in connection with the
enterprise-related functions of the Department; and
(B) existed on the day before the termination date
under subsection (a).
(2) Continuation of suits.--No action or other proceeding
commenced by or against the Secretary in connection with the
enterprise-related functions of the Department shall abate by
reason of the enactment of this Act, except that the Director
of the Federal Housing Finance Agency shall be substituted for
the Secretary or any member thereof as a party to any such
action or proceeding.
SEC. 342. CONTINUATION AND COORDINATION OF CERTAIN REGULATIONS.
(a) In General.--All regulations, orders, and determinations
described in subsection (b) shall remain in effect according to the
terms of such regulations, orders, determinations, and resolutions, and
shall be enforceable by or against the Director of the Federal Housing
Finance Agency until modified, terminated, set aside, or superseded in
accordance with applicable law by such Director, any court of competent
jurisdiction, or operation of law.
(b) Applicability.--A regulation, order, or determination is
described under this subsection if it--
(1) was issued, made, prescribed, or allowed to become
effective by--
(A) the Secretary; or
(B) a court of competent jurisdiction and that
relate to the enterprise-related functions of the
Department; and
(2) is in effect on the termination date under section
341(a).
SEC. 343. TRANSFER AND RIGHTS OF EMPLOYEES.
(a) Transfer.--
(1) In general.--Except as provided in paragraph (2), each
enterprise-related employee of the Department shall be
transferred to the Federal Housing Finance Agency for
employment not later than the termination date under section
341(a) and such transfer shall be deemed a transfer of function
for purposes of section 3503 of title 5, United States Code.
(2) Authority to decline.--An enterprise-related employee
of the Department may, in the discretion of the employee,
decline transfer under paragraph (1) to a position in the
Federal Housing Finance Agency and shall be guaranteed a
position in the Department with the same status, tenure, grade,
and pay as that held on the day immediately preceding the date
that such declination was made. Each such employee holding a
permanent position shall not be involuntarily separated or
reduced in grade or compensation for 12 months after the date
that the transfer would otherwise have occurred, except for
cause or, if the employee is a temporary employee, separated in
accordance with the terms of the appointment.
(b) Guaranteed Positions.--Each enterprise-related employee of the
Department transferred under subsection (a) shall be guaranteed a
position with the same status, tenure, grade, and pay as that held on
the day immediately preceding the transfer. Each such employee holding
a permanent position shall not be involuntarily separated or reduced in
grade or compensation for 12 months after the date of transfer, except
for cause or, if the employee is a temporary employee, separated in
accordance with the terms of the appointment.
(c) Appointment Authority for Excepted and Senior Executive Service
Employees.--
(1) In general.--In the case of employees occupying
positions 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 positions shall be transferred, subject to paragraph (2).
(2) Decline of transfer.--The Director of the Federal
Housing Finance Agency may decline a transfer of authority
under paragraph (1) to the extent that such authority relates
to positions excepted from the competitive service because of
their confidential, policymaking, policy-determining, or
policy-advocating character, and noncareer positions in the
Senior Executive Service (within the meaning of section
3132(a)(7) of title 5, United States Code).
(d) Reorganization.--If the Director of the Federal Housing Finance
Agency determines, after the end of the 1-year period beginning on the
termination date under section 341(a), that a reorganization of the
combined workforce is required, that reorganization shall be deemed a
major reorganization for purposes of affording affected employees
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 enterprise-related employee of the
Department accepting employment with the Federal Housing
Finance 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
Federal Housing Finance Agency or the Department, as
applicable, including insurance, to which such employee belongs
on the termination date under section 341(a) 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.--The difference in the costs between
the benefits which would have been provided by the Department
and those provided by this section shall be paid by the
Director of the Federal Housing Finance Agency. If any employee
elects to give up membership in a health insurance program or
the health insurance program is not continued by such Director,
the employee shall be permitted to select an alternate Federal
health insurance program within 30 days after such election or
notice, without regard to any other regularly scheduled open
season.
SEC. 344. TRANSFER OF APPROPRIATIONS, PROPERTY, AND FACILITIES.
Upon the termination date under section 341(a), all assets,
liabilities, contracts, property, records, and unexpended balances of
appropriations, authorizations, allocations, and other funds employed,
held, used, arising from, available to, or to be made available to the
Department in connection with enterprise-related functions of the
Department shall transfer to the Director of the Federal Housing
Finance Agency. Unexpended funds transferred by this section shall be
used only for the purposes for which the funds were originally
authorized and appropriated.
Passed the House of Representatives October 26, 2005.
Attest:
JEFF TRANDAHL,
Clerk.