[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2412 Introduced in House (IH)]







104th CONGRESS
  1st Session
                                H. R. 2412

  To improve the economic conditions and supply of housing in Native 
American communities by creating the Native American Financial Services 
                 Organization, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 27, 1995

 Mr. Young of Alaska introduced the following bill; which was referred 
to the Committee on Banking and Financial Services, and in addition to 
the Committee on Resources, for a period to be subsequently determined 
 by the Speaker, in each case for consideration of such provisions as 
        fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
  To improve the economic conditions and supply of housing in Native 
American communities by creating the Native American Financial Services 
                 Organization, 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.

    (a) Short Title.--This Act may be cited as the ``Native American 
Financial Services Organization Act of 1995''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title.
               TITLE I--STATEMENT OF POLICY; DEFINITIONS

Sec. 101. Policy.
Sec. 102. Statement of purposes.
Sec. 103. Definitions.
       TITLE II--NATIVE AMERICAN FINANCIAL SERVICES ORGANIZATION

Sec. 201. Establishment of the organization.
Sec. 202. Authorized assistance and service functions.
Sec. 203. Native American lending services grant.
Sec. 204. Audits.
Sec. 205. Annual housing and economic development reports.
Sec. 206. Advisory Council.
               TITLE III--CAPITALIZATION OF ORGANIZATION

Sec. 301. Capitalization of the organization.
Sec. 302. Obligations and securities of the organization.
Sec. 303. Limit on total assets and liabilities.
             TITLE IV--REGULATION, EXAMINATION, AND REPORTS

Sec. 401. Regulation, examination, and reports.
Sec. 402. Authority of the Secretary of Housing and Urban Development.
                 TITLE V--FORMATION OF NEW CORPORATION

Sec. 501. Formation of new corporation.
Sec. 502. Adoption and approval of merger plan.
Sec. 503. Consummation of merger.
Sec. 504. Transition.
Sec. 505. Effect of merger.
               TITLE VI--AUTHORIZATIONS OF APPROPRIATIONS

Sec. 601. Authorization of appropriations for Native American Financial 
                            Institutions.
Sec. 602. Authorization of appropriations for organization.

               TITLE I--STATEMENT OF POLICY; DEFINITIONS

SEC. 101. POLICY.

    (a) In General.--Based upon the findings and recommendations of the 
Commission on American Indian, Alaska Native and Native Hawaiian 
Housing established by the Department of Housing and Urban Development 
Reform Act of 1989, the Congress has determined that--
            (1) housing shortages and deplorable living conditions are 
        at crisis proportions in Native American communities throughout 
        the United States; and
            (2) the lack of private capital to finance housing and 
        economic development for Native Americans and Native American 
        communities seriously exacerbates these housing shortages and 
        poor living conditions.
    (b) Policy of the United States To Address Native American Housing 
Shortage.--It is the policy of the United States to improve the 
economic conditions and supply of housing in Native American 
communities throughout the United States by creating the Native 
American Financial Services Organization to address the housing 
shortages and poor living conditions described in subsection (a).

SEC. 102. STATEMENT OF PURPOSES.

    The purposes of this Act are--
            (1) to help serve the mortgage and other lending needs of 
        Native Americans by assisting in the establishment and 
        organization of Native American Financial Institutions, 
        developing and providing financial expertise and technical 
        assistance to Native American Financial Institutions, including 
        assistance concerning overcoming--
                    (A) barriers to lending with respect to Native 
                American lands; and
                    (B) the past and present impact of discrimination;
            (2) to promote access to mortgage credit in Native American 
        communities in the United States by increasing the liquidity of 
        financing for housing and improving the distribution of 
        investment capital available for such financing, primarily 
        through Native American Financial Institutions;
            (3) to promote the infusion of public capital into Native 
        American communities throughout the United States and to direct 
        sources of public and private capital into housing and economic 
        development for Native American individuals and families, 
        primarily through Native American Financial Institutions; and
            (4) to provide ongoing assistance to the secondary market 
        for residential mortgages and economic development loans for 
        Native American individuals and families, Native American 
        Financial Institutions, and other borrowers by increasing the 
        liquidity of such investments and improving the distribution of 
        investment capital available for such financing.

SEC. 103. DEFINITIONS.

    For purposes of this Act, the following definitions shall apply:
            (1) Alaska native.--The term ``Alaska Native'' has the 
        meaning given the term ``Native'' by section 3(b) of the Alaska 
        Native Claims Settlement Act.
            (2) Board.--The term ``Board'' means the Board of Directors 
        of the Organization established under section 201(a)(2).
            (3) Chairperson.--The term ``Chairperson'' means the 
        chairperson of the Board.
            (4) Council.--The term ``Council'' means the Advisory 
        Council established under section 206.
            (5) Designated merger date.--The term ``designated merger 
        date'' means the specific calendar date and time of day 
        designated by the Board under section 502(b).
            (6) Director.--The term ``Director'' means the Director of 
        the Office of Federal Housing Enterprise Oversight of the 
        Department of Housing and Urban Development.
            (7) Fund.--The term ``Fund'' means the Community 
        Development Financial Institutions Fund established under 
        section 104 of the Riegle Community Development and Regulatory 
        Improvement Act of 1994.
            (8) Indian tribe.--The term ``Indian tribe'' means any 
        Indian tribe, band, nation, or other organized group or 
        community, including any Alaska Native village or regional or 
        village corporation as defined in or established pursuant to 
        the Alaska Native Claims Settlement Act that is recognized as 
        eligible for the special programs and services provided by the 
        Federal Government to Indians because of their status as 
        Indians.
            (9) Merger plan.--The term ``merger plan'' means the plan 
        of merger adopted by the Board under section 502(a).
            (10) Native american.--The term ``Native American'' means 
        any member of an Indian tribe.
            (11) Native american financial institution.--The term 
        ``Native American Financial Institution'' means a person (other 
        than an individual) that--
                    (A) qualifies as a community development financial 
                institution under section 103 of the Riegle Community 
                Development and Regulatory Improvement Act of 1994;
                    (B) satisfies the requirements established by the 
                Riegle Community Development and Regulatory Improvement 
                Act of 1994 and the Fund for applicants for assistance 
                from the Fund;
                    (C) demonstrates a special interest and expertise 
                in serving the primary economic development and 
                mortgage lending needs of the Native American 
                community; and
                    (D) demonstrates that the person has the 
                endorsement of the Native American community that the 
                person intends to serve.
            (12) Native american lender.--The term ``Native American 
        lender'' means a Native American governing body, Native 
        American housing authority, or other Native American Financial 
        Institution that acts as a primary mortgage or economic 
        development lender in a Native American community.
            (13) New corporation.--The term ``new corporation'' means 
        the corporation formed in accordance with title V.
            (14) Nonqualifying mortgage loan.--The term ``nonqualifying 
        mortgage loan'' means a mortgage loan that is determined by the 
        Organization, on the basis of the quality, type, class, or 
        principal amount of the loan, to fail to meet the purchase 
        standards of the Federal National Mortgage Association or the 
        Federal Home Loan Mortgage Corporation in effect on September 
        30, 1994.
            (15) Organization.--The term ``Organization'' means the 
        Native American Financial Services Organization established 
        under section 201.
            (16) Qualifying mortgage loan.--The term ``qualifying 
        mortgage loan'' means a mortgage loan that is determined by the 
        Organization, on the basis of the quality, type, class or 
        principal amount of the loan, to meet the purchase standards of 
        the Federal National Mortgage Association or the Federal Home 
        Loan Mortgage Corporation in effect on September 30, 1994.
            (17) Transition period.--The term ``transition period'' 
        means the period beginning on the date on which the merger plan 
        is approved by both the Secretary of Housing and Urban 
        Development and the Secretary of the Treasury and ending on the 
        designated merger date.

       TITLE II--NATIVE AMERICAN FINANCIAL SERVICES ORGANIZATION

SEC. 201. ESTABLISHMENT OF THE ORGANIZATION.

    (a) Creation; Board of Directors; Policies; Principal Office; 
Membership; Vacancies.--
            (1) Creation.--
                    (A) In general.--There is established and chartered 
                a corporation to be known as the Native American 
                Financial Services Organization.
                    (B) Period of time.--The Organization shall be a 
                congressionally chartered body corporate until the 
                earlier of--
                            (i) the designated merger date; or
                            (ii) the date on which the charter is 
                        surrendered by the Organization.
                    (C) Changes to charter.--The right to revise, 
                amend, or modify the Organization charter is 
                specifically and exclusively reserved to the Congress.
            (2) Board of directors; principal office.--
                    (A) Board.--The powers of the Organization shall be 
                vested in a Board of Directors. The Board shall 
                determine the policies that govern the operations and 
                management of the Organization.
                    (B) Principal office; residency.--The principal 
                office of the Organization shall be in the District of 
                Columbia. For purposes of venue, the Organization shall 
                be considered to be a resident of the District of 
                Columbia.
            (3) Membership.--
                    (A) In general.--
                            (i) Nine members.--Except as provided in 
                        clause (ii), the Board shall consist of 9 
                        members, 3 of whom shall be appointed by the 
                        President and 6 of whom shall be elected by the 
                        class A stockholders, in accordance with the 
                        bylaws of the Organization.
                            (ii) Thirteen members.--If class B stock is 
                        issued under section 301(b), the Board shall 
                        consist of 13 members, 9 of whom shall be 
                        appointed and elected in accordance with clause 
                        (i) and 4 of whom shall be elected by the class 
                        B stockholders, in accordance with the bylaws 
                        of the Organization.
                    (B) Terms.--Each member of the Board shall be 
                elected or appointed for a 4-year term, except that the 
                members of the initial Board shall be elected or 
                appointed for the following terms:
                            (i) Of the 3 members appointed by the 
                        President--
                                    (I) 1 member shall be appointed for 
                                a 2-year term;
                                    (II) 1 member shall be appointed 
                                for a 3-year term; and
                                    (III) 1 member shall be appointed 
                                for a 4-year term;
                        as designated by the President at the time of 
                        the appointments.
                            (ii) Of the 6 members elected by the class 
                        A stockholders--
                                    (I) 2 members shall each be elected 
                                for a 2-year term;
                                    (II) 2 members shall each be 
                                elected for a 3-year term; and
                                    (III) 2 members shall each be 
                                elected for a 4-year term.
                            (iii) If class B stock is issued and 4 
                        additional members are elected by the class B 
                        stockholders--
                                    (I) 1 member shall be elected for a 
                                2-year term;
                                    (II) 1 member shall be elected for 
                                a 3-year term; and
                                    (III) 2 members shall each be 
                                elected for a 4-year term.
                    (C) Qualifications.--Each member appointed by the 
                President shall have expertise in 1 or more of the 
                following areas:
                            (i) Native American housing and economic 
                        development programs.
                            (ii) Financing in Native American 
                        communities.
                            (iii) Native American governing bodies and 
                        court systems.
                            (iv) Restricted and trust land issues, 
                        economic development, and small consumer loans.
                    (D) Chairperson.--The Board shall select a 
                Chairperson from among its members, except that the 
                initial Chairperson shall be selected from among the 
                members of the initial Board who have been appointed or 
                elected to serve for a 4-year term.
                    (E) Vacancies.--
                            (i) Appointed members.--Any vacancy in the 
                        appointed membership of the Board shall be 
                        filled by appointment by the President, but 
                        only for the unexpired portion of the term.
                            (ii) Elected members.--Any vacancy in the 
                        elected membership of the Board shall be filled 
                        by appointment by the Board, but only for the 
                        unexpired portion of the term.
                    (F) Transitions.--Any member of the Board may 
                continue to serve after the expiration of the term for 
                which the member was appointed or elected until a 
                qualified successor has been appointed or elected.
    (b) Powers of the Organization.--The Organization may--
            (1) adopt, alter, and use a corporate seal;
            (2) adopt bylaws, consistent with this Act, regulating, 
        among other things, the manner in which--
                    (A) the business of the Organization shall be 
                conducted;
                    (B) the elected members of the Board shall be 
                elected;
                    (C) the stock of the Organization shall be issued, 
                held, and disposed of;
                    (D) the property of the Organization shall be 
                disposed of; and
                    (E) the powers and privileges granted to the 
                Organization by this Act and other law shall be 
                exercised;
            (3) make and perform contracts, agreements, and 
        commitments, including entering into a cooperative agreement 
        with the Fund;
            (4) prescribe and impose fees and charges for services 
        provided by the Organization;
            (5)(A) settle, adjust, and compromise; and
            (B) with or without consideration or benefit to the 
        Organization, release or waive in whole or in part, in advance 
        or otherwise, any claim, demand, or right of, by, or against 
        the Organization;
        if such settlement, adjustment, compromise, release, or waiver 
        is not adverse to the interests of the United States;
            (6) sue and be sued, complain and defend, in any tribal, 
        Federal, State, or other court;
            (7) acquire, take, hold, and own, and to deal with and 
        dispose of any property;
            (8) determine the necessary expenditures of the 
        Organization and the manner in which such expenditures shall be 
        incurred, allowed, and paid, and appoint, employ, and fix and 
        provide for the compensation and benefits of officers, 
        employees, attorneys, and agents as the Board determines 
        reasonable and not inconsistent with this section;
            (9) incorporate a new corporation under State, District of 
        Columbia, or tribal law, as provided in section 501;
            (10) adopt a plan of merger, as provided in section 502;
            (11) consummate the merger of the Organization into the new 
        corporation, as provided in section 503; and
            (12) have succession until the designated merger date or 
        any earlier date on which the Organization surrenders its 
        Federal charter.
    (c) Investment of Funds; Designation as Depositary, Custodian, or 
Agent.--
            (1) Investment of funds.--Funds of the Organization that 
        are not required to meet current operating expenses shall be 
        invested in obligations of, or obligations guaranteed by, the 
        United States or any agency thereof, or in obligations, 
        participations, or other instruments that are lawful 
        investments for fiduciary, trust, or public funds.
            (2) Designation as depositary, custodian, or agent.--Any 
        Federal Reserve bank or Federal home loan bank, or any bank as 
        to which at the time of its designation by the Organization 
        there is outstanding a designation by the Secretary of the 
        Treasury as a general or other depositary of public money, 
        may--
                    (A) be designated by the Organization as a 
                depositary or custodian or as a fiscal or other agent 
                of the Organization; and
                    (B) act as such depositary, custodian, or agent.
    (d) Actions By and Against the Organization.--Notwithstanding 
section 1349 of title 28, United States Code, or any other provision of 
law--
            (1) the Organization shall be deemed to be an agency 
        covered under sections 1345 and 1442 of title 28, United States 
        Code;
            (2) any civil action to which the Organization is a party 
        shall be deemed to arise under the laws of the United States, 
        and the appropriate district court of the United States shall 
        have original jurisdiction over any such action, without regard 
        to amount or value; and
            (3) any civil or other action, case, or controversy in a 
        tribal court, court of a State, or in any court other than a 
        district court of the United States, to which the Organization 
        is a party, may at any time before the commencement of the 
        trial be removed by the Organization, without the giving of any 
        bond or security and by following any procedure for removal of 
        causes in effect at the time of the removal--
                    (A) to the district court of the United States for 
                the district and division in which the action is 
                pending;
                    (B) or, if there is no such district court, to the 
                district court of the United States for the District of 
                Columbia.

SEC. 202. AUTHORIZED ASSISTANCE AND SERVICE FUNCTIONS.

    (a) Technical Assistance and Services.--The Organization may--
            (1) assist the Fund in the establishment and organization 
        of Native American Financial Institutions;
            (2) assist the Fund in developing and providing financial 
        expertise and technical assistance to Native American Financial 
        Institutions, including methods of underwriting, securing, 
        servicing, packaging, and selling mortgage and small commercial 
        and consumer loans;
            (3) develop and provide specialized technical assistance on 
        overcoming barriers to primary mortgage lending on Native 
        American lands, including issues related to trust lands, 
        discrimination, high operating costs, and inapplicability of 
        standard underwriting criteria;
            (4) assist the Fund in providing mortgage underwriting 
        assistance (but not in originating loans) under contract to 
        Native American Financial Institutions;
            (5) work with the Federal National Mortgage Association, 
        the Federal Home Loan Mortgage Corporation, and other 
        participants in the secondary market for home mortgage 
        instruments in identifying and eliminating barriers to the 
        purchase of Native American mortgage loans originated by Native 
        American Financial Institutions and other lenders in Native 
        American communities;
            (6) obtain capital investments in the Organization from 
        Indian tribes, Native American organizations, and other 
        entities;
            (7) assist the Fund in the operation of the Organization as 
        an information clearinghouse by providing information on 
        financial practices to Native American Financial Institutions; 
        and
            (8) assist the Fund in monitoring and reporting to the 
        Congress on the performance of Native American Financial 
        Institutions in meeting the economic development and housing 
        credit needs of Native Americans.
    (b) Purchases and Sales of Mortgages and Mortgage-Backed 
Securities.--
            (1) In general.--
                    (A) Authorization.--If a determination is made in 
                accordance with subparagraph (B), the Organization may, 
                upon receipt of a written authorization from the 
                Secretary of Housing and Urban Development under this 
                paragraph, carry out any activity described in 
                paragraph (3).
                    (B) Determination.--For purposes of subparagraph 
                (A), a determination made under this section is a 
                determination by the Secretary of Housing and Urban 
                Development that the combined purchases by the Federal 
                National Mortgage Association and the Federal Home Loan 
                Mortgage Corporation of residential Native American 
                nonqualifying mortgage loans originated by Native 
                American Financial Institutions and other lenders on 
                housing consisting of between 1 and 4 dwelling units--
                            (i) in the second year following the 
                        establishment of the Organization, total less 
                        than $20,000,000 (unless the Organization can 
                        demonstrate to the Secretary of Housing and 
                        Urban Development that such purchase goal could 
                        not be met); or
                            (ii) in any succeeding year, total less 
                        than that amount that the Secretary of Housing 
                        and Urban Development has determined and 
                        published as a reasonable Native American 
                        mortgage purchase goal (in accordance with 
                        paragraph (2)) for such combined purchases by 
                        the Federal National Mortgage Association and 
                        the Federal Home Loan Mortgage Corporation in 
                        such year.
            (2) Factors considered.--In determining the purchase goal 
        described in paragraph (1)(B)(ii), the Secretary shall take 
        into account the study by the Fund of Native American lending 
        and investment conducted pursuant to section 117(c) of the 
        Riegle Community Development and Regulatory Improvement Act of 
        1994.
            (3) Powers of the organization.--Upon receiving a written 
        authorization from the Secretary of Housing and Urban 
        Development under paragraph (1), the Organization may, at any 
        time--
                    (A) with respect to residential mortgage loans 
                originated by Native American Financial Institutions 
                that are qualifying mortgage loans--
                            (i) purchase such qualifying mortgage 
                        loans;
                            (ii) hold such qualifying mortgage loans 
                        for a period of not to exceed 12 months; and
                            (iii) resell such qualifying mortgage loans 
                        to the Federal National Mortgage Association, 
                        the Federal Home Loan Mortgage Corporation, or 
                        other secondary market participants, as 
                        provided in section 303(b);
                    (B) with respect to residential mortgage loans 
                originated by the Native American Financial 
                Institutions that are nonqualifying mortgage loans--
                            (i) purchase such nonqualifying mortgage 
                        loans from the Native American Financial 
                        Institutions for such terms as the Organization 
                        determines to be appropriate, including the 
                        life of the mortgage loan, if, with respect to 
                        any such loan--
                                    (I) the Organization has reasonable 
                                assurance that the loan will be repaid 
                                within the time agreed;
                                    (II) the Native American Financial 
                                Institution selling the loan retains a 
                                participation of not less than 10 
                                percent in the mortgage;
                                    (III) the Native American Financial 
                                Institution selling the loan agrees for 
                                such period of time and under such 
                                circumstances as the Organization may 
                                require, to repurchase or replace the 
                                mortgage upon demand of the 
                                Organization in the event that the loan 
                                is in default; or
                                    (IV) that portion of the 
                                outstanding principal balance of the 
                                loan which exceeds 80 percent of the 
                                value of the property securing such 
                                loan is guaranteed or insured by a 
                                qualified insurer, as determined by the 
                                Organization; and
                            (ii) issue mortgage-backed securities or 
                        other forms of participations based on pools of 
                        such nonqualifying mortgage loans, as provided 
                        in section 303(c); and
                    (C) purchase, service, sell, lend on the security 
                of, and otherwise deal in--
                            (i) residential mortgages that are secured 
                        by a subordinate lien against a property 
                        consisting of 1 to 4 dwelling units that is the 
                        principal residence of the mortgagor; and
                            (ii) residential mortgages that are secured 
                        by a subordinate lien against a property 
                        consisting of five or more dwelling units.
            (4) Rights and remedies.--
                    (A) In general.--The rights and remedies of the 
                Organization, including any rights and remedies of the 
                Organization on, under, or with respect to any mortgage 
                or any obligation secured thereby, shall be immune from 
                impairment, limitation, or restriction by or under any 
                State, District of Columbia, or tribal--
                            (i) law that becomes effective after the 
                        acquisition by the Organization of the subject 
                        or property on, under, or with respect to which 
                        such right or remedy arises or exists or would 
                        so arise or exist in the absence of such law; 
                        or
                            (ii) administrative or other action that 
                        becomes effective after such acquisition.
                    (B) Qualification.--The Organization may conduct 
                its business without regard to any qualification or 
                similar requirement in the District of Columbia, or any 
                State or tribal jurisdiction.

SEC. 203. NATIVE AMERICAN LENDING SERVICES GRANT.

    (a) Initial Grant Payment.--If the Fund and the Organization enter 
into a cooperative agreement for the Organization to provide technical 
assistance and other services to Native American Financial 
Institutions, such agreement shall, to the extent that funds are 
available as provided in section 602, provide that the initial grant 
payment, anticipated to be $5,000,000, shall be made when all members 
of the initial Board have been appointed under section 201.
    (b) Payment of Grant Balance.--The payment of the grant balance of 
$5,000,000 shall be made to the Organization not later than 1 year 
after the date on which the initial grant payment is made under 
subsection (a).

SEC. 204. AUDITS.

    (a) Independent Audits.--
            (1) In general.--The Organization shall have an annual 
        independent audit made of its financial statements by an 
        independent public accountant in accordance with generally 
        accepted auditing standards.
            (2) Determinations.--In conducting an audit under this 
        subsection, the independent public accountant shall determine 
        and report on whether the financial statements of the 
        Organization--
                    (A) are presented fairly in accordance with 
                generally accepted accounting principles; and
                    (B) to the extent determined necessary by the 
                Director, comply with any disclosure requirements 
                imposed under section 401.
    (b) GAO Audits.--
            (1) In general.--Beginning after the first 2 years of the 
        operation of the Organization, unless an earlier date is 
        required by any other statute, grant, or agreement, the 
        programs, activities, receipts, expenditures, and financial 
        transactions of the Organization shall be subject to audit by 
        the Comptroller General of the United States under such rules 
        and regulations as may be prescribed by the Comptroller 
        General.
            (2) Access.--To carry out this subsection, the 
        representatives of the General Accounting Office shall--
                    (A) have access to all books, accounts, financial 
                records, reports, files, and all other papers, things, 
                or property belonging to or in use by the Organization 
                and necessary to facilitate the audit;
                    (B) be afforded full facilities for verifying 
                transactions with the balances or securities held by 
                depositaries, fiscal agents, and custodians; and
                    (C) have access, upon request to the Organization 
                or any auditor for an audit of the Organization under 
                subsection (a), to any books, accounts, financial 
                records, reports, files, or other papers, or property 
                belonging to or in use by the Organization and used in 
                any such audit and to any papers, records, files, and 
                reports of the auditor used in such an audit.
            (3) Reports.--The Comptroller General of the United States 
        shall submit to the Congress a report on each audit conducted 
        under this subsection.
            (4) Reimbursement.--The Organization shall reimburse the 
        General Accounting Office for the full cost of any audit 
        conducted under this subsection.

SEC. 205. ANNUAL HOUSING AND ECONOMIC DEVELOPMENT REPORTS.

    Not later than 1 year after the date of enactment of this Act, and 
annually thereafter, the Organization shall collect, maintain, and 
provide to the Secretary of Housing and Urban Development, in a form 
determined by the Secretary, such data as the Secretary determines to 
be appropriate with respect to the Organization's--
            (1) mortgages on properties consisting of between 1 and 4 
        dwelling units;
            (2) mortgages on properties consisting of five or more 
        dwelling units; and
            (3) activities relating to economic development.

SEC. 206. ADVISORY COUNCIL.

    (a) Establishment.--The Board shall establish an Advisory Council 
in accordance with this section.
    (b) Membership.--
            (1) In general.--The Council shall consist of 13 members, 
        who shall be appointed by the Board, including 1 representative 
        from each of the 12 districts established by the Bureau of 
        Indian Affairs and 1 representative from the State of Hawaii.
            (2) Qualifications.--Not less than 6 of the members of the 
        Council shall have financial expertise, and not less than 9 
        members of the Council shall be Native Americans.
            (3) Terms.--Each member of the Council shall be appointed 
        for a 4-year term, except that the initial Council shall be 
        appointed, as designated by the Board at the time of 
        appointment, as follows:
                    (A) Four members shall each be appointed for a 2-
                year term.
                    (B) Four members shall each be appointed for a 3-
                year term.
                    (C) Five members shall each be appointed for a 4-
                year term.
    (c) Duties.--The Council shall advise the Board on all policy 
matters of the Organization. Through the regional representation of its 
members, the Council shall provide information to the Board from all 
sectors of the Native American community.

               TITLE III--CAPITALIZATION OF ORGANIZATION

SEC. 301. CAPITALIZATION OF THE ORGANIZATION.

    (a) Class A Stock.--The class A stock of the Organization shall--
            (1) be issued only to Indian tribes;
            (2) be allocated on the basis of Indian tribe population, 
        as determined by the Secretary of Housing and Urban Development 
        in consultation with the Secretary of the Interior;
            (3) have such par value and other characteristics as the 
        Organization shall provide;
            (4) be vested with voting rights, each share being entitled 
        to 1 vote;
            (5) be nontransferable; and
            (6) be surrendered to the Organization if the holder ceases 
        to be recognized as an Indian tribe under this Act.
    (b) Class B Stock.--
            (1) In general.--The Organization may issue class B stock 
        evidencing capital contributions in the manner and amount, and 
        subject to any limitations on concentration of ownership, as 
        may be established by the Organization.
            (2) Characteristics.--Any class B stock issued under 
        paragraph (1) shall--
                    (A) be available for purchase by investors;
                    (B) be entitled to such dividends as may be 
                declared by the Board in accordance with subsection 
                (c);
                    (C) have such par value and other characteristics 
                as the Organization shall provide;
                    (D) be vested with voting rights, each share being 
                entitled to 1 vote; and
                    (E) be transferable only on the books of the 
                Organization.
    (c) Charges and Fees; Earnings.--
            (1) Charges and fees.--The Organization may impose charges 
        or fees, which may be regarded as elements of pricing, with the 
        objectives that--
                    (A) all costs and expenses of the operations of the 
                Organization should be within the income of the 
                Organization derived from such operations; and
                    (B) such operations would be fully self-supporting.
            (2) Earnings.--All earnings from the operations of the 
        Organization shall be annually transferred to the general 
        surplus account of the Organization. At any time, funds in the 
        general surplus account may, in the discretion of the Board, be 
        transferred to the reserves of the Organization.
    (d) Capital Distributions.--
            (1) In general.--Except as provided in paragraph (2), the 
        Organization may make such capital distributions (as such term 
        is defined in section 1303 of the Federal Housing Financial 
        Safety and Soundness Act of 1992) as may be declared by the 
        Board. All capital distributions shall be charged against the 
        general surplus account of the Organization.
            (2) Restriction.--The Organization may not make any capital 
        distribution that would decrease the total capital (as such 
        term is defined in section 1303 of the Federal Housing 
        Financial Safety and Soundness Act of 1992) of the Organization 
        to an amount less than the capital level for the Organization 
        established under section 401, without prior written approval 
        of the distribution by the Director.

SEC. 302. OBLIGATIONS AND SECURITIES OF THE ORGANIZATION.

    (a) In General.--
            (1) Authorization.--The Organization may--
                    (A) borrow funds to give security or pay interest 
                or other return; and
                    (B) issue upon the approval of the Secretary of the 
                Treasury, notes, debentures, bonds, or other 
                obligations having maturities and bearing such rate or 
                rates of interest as may be determined by the 
                Organization with the approval of the Secretary of the 
                Treasury;
        if such borrowing and issuing of obligations qualifies as a 
        transaction by an issuer not involving any public offering 
        under section 4(2) of the Securities Act of 1933.
            (2) Restrictions.--
                    (A) In general.--Obligations issued by the 
                Organization under this section shall not be 
                obligations of the United States or any agency of the 
                United States.
                    (B) No guarantees.--Payment of the principal of or 
                interest on such obligations shall not be guaranteed by 
                the United States or any agency of the United States. 
                The obligations issued by the Organization under this 
                section shall so plainly state.
    (b) Resales of Qualifying Mortgage Loans.--The sale or other 
disposition by the Organization of qualifying mortgage loans under 
section 202(b) shall be on such terms and conditions relating to 
resale, repurchase, substitution, replacement or otherwise as the 
Organization may prescribe, except that the Organization may not 
guarantee or insure the payment of any mortgage loan sold under section 
202(b).
    (c) Securities Backed by Nonqualifying Mortgage Loans.--Securities 
in the form of debt obligations or trust certificates of beneficial 
interest, or both, and based upon nonqualifying mortgage loans held and 
set aside by the Organization under section 202(b)--
            (1) may be issued upon the approval of the Secretary of the 
        Treasury; and
            (2) shall have such maturities, and shall bear such rate or 
        rates of interest, as may be determined by the Organization 
        with the approval of the Secretary of the Treasury;
if such issuance qualifies as a transaction by an issuer not involving 
any public offering under section 4(2) of the Securities Act of 1933.
    (d) Prohibitions and Restrictions; Creation of Liens and Charges.--
            (1) In general.--The Organization may, by regulation or by 
        writing executed by the Organization--
                    (A) establish prohibitions or restrictions on the 
                creation of indebtedness or obligations of the 
                Organization or of liens or charges upon property of 
                the Organization, including after-acquired property; 
                and
                    (B) create liens and charges, which may be floating 
                liens or charges, upon all or any part or parts of the 
                property of the Organization, including after-acquired 
                property.
            (2) Effect.--Any prohibition, restriction, lien, or charge 
        established under paragraph (2) shall--
                    (A) have such effect, including such rank and 
                priority, as may be provided by regulations of the 
                Organization or by any writing executed by the 
                Organization; and
                    (B) create a cause of action which may be enforced 
                by action in the United States district court for the 
                District of Columbia or in the United States district 
                court for any judicial district in which any of the 
                property affected is located.
            (3) Jurisdiction; service of process.--Process in any 
        action described in paragraph (2) may run to or be served in 
        any judicial district or in any place subject to the 
        jurisdiction of the United States.
    (e) Validity of Provisions; Validity of Restrictions, Prohibitions, 
Liens, or Charges.--This section and any restriction, prohibition, 
lien, or charge referred to in subsection (b) shall be fully effective 
notwithstanding any other law, including any law of or relating to 
sovereign immunity or priority.

SEC. 303. LIMIT ON TOTAL ASSETS AND LIABILITIES.

    The aggregate of--
            (1) the total equity of the Organization, including all 
        capital from any issuance of class B stock; and
            (2) the total liabilities of the Organization, including 
        all obligations issued or incurred by the Organization;
shall not at any time exceed $20,000,000.

             TITLE IV--REGULATION, EXAMINATION, AND REPORTS

SEC. 401. REGULATION, EXAMINATION, AND REPORTS.

    (a) Effective Date of Section.--This section shall take effect on 
the date on which the Secretary of Housing and Urban Development makes 
a determination in accordance with section 202(b) that the Organization 
may purchase and sell mortgages and mortgage-backed securities.
    (b) In General.--The Organization shall be subject to the 
regulatory authority of the Office of Federal Housing Enterprise 
Oversight of the Department of Housing and Urban Development with 
respect to all matters relating to the financial safety and soundness 
of the Organization.
    (c) Duty of Director.--The Director shall ensure that the 
Organization is adequately capitalized and operating safely as a 
congressionally chartered body corporate.
    (d) Powers of Director.--The Director shall have all of the 
exclusive powers granted the Director under subsections (b), (d), and 
(e) of section 1313 of the Housing and Community Development Act of 
1992, as determined by the Director to be necessary or appropriate to 
regulate the operation of the Organization.
    (e) Reports to Director.--
            (1) Annual report.--Not later than 1 year after the date of 
        enactment of this Act, and annually thereafter, the 
        Organization shall submit to the Director a report describing 
        the financial condition and operations of the Organization. The 
        report shall be in such form, contain such information, and be 
        submitted on such date as the Director shall require.
            (2) Other reports.--In addition to the reports submitted 
        under paragraph (1), the Organization shall submit to the 
        Director any report required by the Director pursuant to 
        section 1314 of the Housing and Community Development Act of 
        1992.
            (3) Contents of report.--Each report submitted under this 
        subsection shall contain a declaration by the president, vice 
        president, treasurer, or any other officer of the Organization 
        designated by the Board to make such declaration, that the 
        report is true and correct to the best of such officer's 
        knowledge and belief.
    (f) Funding OFHEO Oversight.--
            (1) Assessment and collection.--The Director shall assess 
        and collect from the Organization such amounts as are necessary 
        to reimburse the Office of Federal Housing Enterprise Oversight 
        for the reasonable costs and expenses of the activities 
        undertaken by the Office of Federal Housing Enterprise 
        Oversight to carry out the duties of the Director under 
        paragraph (2), including the costs of examinations and overhead 
        expenses.
            (2) Requirements.--Annual assessments imposed by the 
        Director shall be--
                    (A) imposed prior to October 1 of each year;
                    (B) collected at such time or times during each 
                assessment year as determined necessary or appropriate 
                by the Director;
                    (C) deposited into the Federal Housing Enterprises 
                Oversight Fund established by section 1316(f) of the 
                Housing and Community Development Act of 1992; and
                    (D) available, to the extent provided in 
                appropriations Acts, for carrying out the 
                responsibilities of the Director under this section.

SEC. 402. AUTHORITY OF THE SECRETARY OF HOUSING AND URBAN DEVELOPMENT.

    Except for the authority of the Director under section 401, the 
Secretary of Housing and Urban Development shall--
            (1) have general regulatory power over the Organization; 
        and
            (2) issue such rules and regulations applicable to the 
        Organization as determined necessary or appropriate by the 
        Secretary to ensure that the purposes specified in section 102 
        are accomplished.

                 TITLE V--FORMATION OF NEW CORPORATION

SEC. 501. FORMATION OF NEW CORPORATION.

    (a) In General.--In order to continue the accomplishment of the 
purposes specified in section 102 beyond the terms of the charter of 
the Organization, the Board shall, not later than 10 years after the 
date of enactment of this Act, cause the formation of a new corporation 
under the laws of any tribe, any State, or the District of Columbia.
    (b) Powers of New Corporation Not Prescribed.--Except as provided 
in this section, the new corporation may have any corporate powers and 
attributes permitted under the laws of the jurisdiction of its 
incorporation which the Board shall determine, in its business 
judgment, to be appropriate.
    (c) Use of NAFSO Name Prohibited.--The new corporation may not use 
in any manner the name ``Native American Financial Services 
Organization'' or ``NAFSO'' or any variation of thereof.

SEC. 502. ADOPTION AND APPROVAL OF MERGER PLAN.

    (a) In General.--Not later than 10 years after the date of 
enactment of this Act, the Board shall prepare, adopt, and submit to 
the Secretary of Housing and Urban Development and the Secretary of the 
Treasury for approval, a plan for merging the Organization into the new 
corporation.
    (b) Designated Merger Date.--
            (1) In general.--The Board shall establish the designated 
        merger date in the merger plan as a specific calendar date on 
        which and time of day at which the merger of the Organization 
        into the new corporation shall take effect.
            (2) Changes.--The Board may change the designated merger 
        date in the merger plan by adopting an amended plan of merger.
            (3) Restriction.--Except as provided in paragraph (4), the 
        designated merger date in the merger plan or any amended merger 
        plan shall not be later than 11 years after the date of 
        enactment of this Act.
            (4) Exception.--Subject to the restriction contained in 
        paragraph (5), the Board may adopt an amended plan of merger 
        that designates a date later than 11 years after the date of 
        enactment of this Act if the Board submits to both the 
        Secretary of Housing and Urban Development and the Secretary of 
        the Treasury a report--
                    (A) stating that an orderly merger of the 
                Organization into the new corporation is not feasible 
                before the latest date designated by the Board;
                    (B) explaining why an orderly merger of the 
                Organization into the new corporation is not feasible 
                before the latest date designated by the Board;
                    (C) describing the steps that have been taken to 
                consummate an orderly merger of the Organization into 
                the new corporation not later than 11 years after the 
                date of enactment of this Act; and
                    (D) describing the steps that will be taken to 
                consummate an orderly and timely merger of the 
                Organization into the new corporation.
            (5) Limitation.--The date designated by the Board in an 
        amended merger plan shall not be later than 12 years after the 
        date of enactment of this Act.
            (6) Consummation of merger.--The consummation of an orderly 
        and timely merger of the Organization into the new corporation 
        shall not occur later than 13 years after the date of enactment 
        of this Act.
    (c) Governmental Approvals of Merger Plan Required.--The merger 
plan or any amended merger plan shall take effect on the date on which 
the plan is approved by both the Secretary of Housing and Urban 
Development and the Secretary of the Treasury.
    (d) Revision of Disapproved Merger Plan Required.--If either the 
Secretary of Housing and Urban Development or the Secretary of the 
Treasury, or both, disapprove the merger plan or any amended merger 
plan--
            (1) each Secretary that disapproves the plan shall notify 
        the Organization of such disapproval and indicate the reasons 
        for the disapproval; and
            (2) not later than 30 days after the date of notification 
        of disapproval under paragraph (1), the Organization shall 
        submit to both the Secretary of Housing and Urban Development 
        and the Secretary of the Treasury for approval an amended 
        merger plan responsive to the reasons for the disapproval 
        indicated in such notification.
    (e) No Stockholder Approval of Merger Plan Required.--The approval 
or consent of the stockholders of the Organization shall not be 
required to accomplish the merger of the Organization into the new 
corporation.

SEC. 503. CONSUMMATION OF MERGER.

    The Board shall ensure that the merger of the Organization into the 
new corporation is accomplished in accordance with--
            (1) the merger plan approved by the Secretary of Housing 
        and Urban Development and the Secretary of the Treasury; and
            (2) all applicable laws of the jurisdiction in which the 
        new corporation is incorporated.

SEC. 504. TRANSITION.

    (a) Continuation of Rights, Duties, and Restrictions.--Except as 
provided in this section, the Organization shall, during the transition 
period, continue to have all of the rights, privileges, duties, and 
obligations, and shall be subject to all of the limitations and 
restrictions, set forth in this Act.
    (b) Collateralization of Outstanding Obligations.--
            (1) In general.--The Organization shall provide for all 
        debt obligations of the Organization that are outstanding on 
        the date before the designated merger date to be secured as to 
        principal and interest by obligations of the United States held 
        in trust for the holders of such obligations.
            (2) Requirements, terms, and conditions.--The 
        collateralization and the trust referred to in the preceding 
        sentence shall be subject to such requirements, terms, and 
        conditions as the Secretary of the Treasury determines to be 
        necessary or appropriate.
    (c) Issuance of New Obligations During Transition Period.--As 
needed to carry out the purposes for which it was formed, the 
Organization may, during the transition period, continue to issue 
obligations under section 303. Any new obligation issued during the 
transition period shall mature before the designated merger date.

SEC. 505. EFFECT OF MERGER.

    (a) Transfer of Assets and Liabilities.--
            (1) Transfer of assets.--On the designated merger date, all 
        property, real, personal, and mixed, all debts due on any 
        account, and any other interest of or belonging to or due to 
        the Organization shall be transferred to and vested in the new 
        corporation without further act or deed, and title to any 
        property, whether real, personal, or mixed, shall not in any 
        way be impaired by reason of the merger.
            (2) Transfer of liabilities.--On the designated merger 
        date, the new corporation shall be responsible and liable for 
        all obligations and liabilities of the Organization and neither 
        the rights of creditors nor any liens upon the property of the 
        Organization shall be impaired by the merger.
    (b) Termination of the Organization and Its Federal Charter.--On 
the designated merger date--
            (1) the surviving corporation of the merger shall be the 
        new corporation;
            (2) the Federal charter of the Organization shall 
        terminate; and
            (3) the separate existence of the Organization shall 
        terminate.
    (c) References to the Organization in Law.--After the designated 
merger date, any reference to the Organization in any law or regulation 
shall be deemed to refer to the new corporation.
    (d) Savings Clause.--
            (1) Proceedings.--The merger of the Organization into the 
        new corporation shall not abate any proceeding commenced by or 
        against the Organization before the designated merger date, 
        except that the new corporation shall be substituted for the 
        Organization as a party to any such proceeding as of the 
        designated merger date.
            (2) Contracts and agreements.--All contracts and agreements 
        to which the Organization is a party and which are in effect on 
        the day before the designated merger date shall continue in 
        effect according to their terms, except that the new 
        corporation shall be substituted for the Organization as a 
        party to those contracts and agreements as of the designated 
        merger date.

               TITLE VI--AUTHORIZATIONS OF APPROPRIATIONS

SEC. 601. AUTHORIZATION OF APPROPRIATIONS FOR NATIVE AMERICAN FINANCIAL 
              INSTITUTIONS.

    (a) In General.--There are authorized to be appropriated to the 
Fund, without fiscal year limitation, $20,000,000 to provide financial 
assistance to Native American Financial Institutions.
    (b) Not Matching Funds.--To the extent that a Native American 
Financial Institution receives a portion of an appropriation made under 
subsection (a), such funds shall not be considered to be matching funds 
required of the Native American Financial Institution under section 
108(e) of the Riegle Community Development and Regulatory Improvement 
Act of 1994.

SEC. 602. AUTHORIZATION OF APPROPRIATIONS FOR ORGANIZATION.

    The Secretary of Housing and Urban Development may, to the extent 
provided in advance in an appropriations Act, provide not more than 
$10,000,000 to the Fund for the funding of a cooperative agreement to 
be entered into by the Fund and the Organization for technical 
assistance and other services to be provided by the Organization to 
Native American Financial Institutions.
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