[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3703 Introduced in House (IH)]







106th CONGRESS
  2d Session
                                H. R. 3703

   To consolidate and improve the regulation of the housing-related 
       Government-sponsored enterprises, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           February 29, 2000

 Mr. Baker (for himself and Mr. Leach) introduced the following bill; 
 which was referred to the Committee on Banking and Financial Services

_______________________________________________________________________

                                 A BILL


 
   To consolidate and improve the regulation of the 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 ``Housing Finance 
Regulatory Improvement Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title and table of contents.
                TITLE I--HOUSING FINANCE OVERSIGHT BOARD

                 Subtitle A--Improvement of Supervision

Sec. 101. Establishment of Board.
Sec. 102. Duties and authorities of Board.
Sec. 103. Public disclosure of information.
Sec. 104. Personnel.
Sec. 105. Assessments.
Sec. 106. Public disclosure of final orders and agreements.
Sec. 107. Limitation on subsequent employment.
Sec. 108. Regulations.
Sec. 109. Termination of authority of HUD.
Sec. 110. Approval of Board for new activities.
Sec. 111. Limitation on nonmission-related assets.
Sec. 112. Conforming loan limits.
Sec. 113. Definitions.
Sec. 114. Supervision of Federal home loan bank system.
Sec. 115. Amendments to title 5, United States Code.
                 Subtitle B--Reduction of Systemic Risk

Sec. 131. Annual review of enterprises by rating organizations.
Sec. 132. Annual reports.
Sec. 133. Risk-based capital test for enterprises.
Sec. 134. Effective date for supervisory actions.
Sec. 135. Appointment of receivers.
Sec. 136. Repeal of Treasury lines of credit.
Sec. 137. Board membership on Federal Financial Institutions 
                            Examination Council.
Sec. 138. Elimination of super-lien for Federal home loan banks.
Sec. 139. Federal Home Loan Bank Finance Corporation.
Sec. 140. Capital treatment of private label mortgage-backed 
                            securities.
Sec. 141. Study of effects of GSE failure on depository institutions.
                     Subtitle C--General Provisions

Sec. 161. Conforming and technical amendments.
Sec. 162. Effective date.
        TITLE II--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY

Sec. 201. Abolishment of OFHEO and Federal Housing Finance Board.
Sec. 202. Continuation and coordination of certain regulations.
Sec. 203. Transfer and rights of employees of abolished agencies.
Sec. 204. Transfer of property and facilities.

                TITLE I--HOUSING FINANCE OVERSIGHT BOARD

                 Subtitle A--Improvement of Supervision

SEC. 101. ESTABLISHMENT OF BOARD.

    (a) In General.--Part 1 of Subtitle A of title XIII of the Housing 
and Community Development Act of 1992 is amended by striking sections 
1311 and 1312 (12 U.S.C. 4511, 4512) and inserting the following new 
sections:

``SEC. 1311. ESTABLISHMENT OF HOUSING FINANCE OVERSIGHT BOARD.

    ``(a) Establishment.--There is established the Housing Finance 
Oversight Board, which shall succeed to the authority of the Director 
of the Office of Federal Housing Enterprise Oversight of the Department 
of Housing and Urban Development, the Federal Housing Finance Board, 
and the general regulatory and any other authority of the Secretary of 
Housing and Urban Development with respect to the enterprises (except 
as specifically provided otherwise in this Act).
    ``(b) Status.--The Board shall be an independent agency in the 
executive branch of the Government.

``SEC. 1312. MEMBERS.

    ``(a) In General.--Subject to subsection (d)(2), the Board shall be 
composed of 5 members, as follows:
            ``(1) The Secretary of Housing and Urban Development, or a 
        designee of the Secretary who is an officer of the Department 
        of Housing and Urban Development appointed to such office by 
        the President, by and with the advice and consent of the 
        Senate, who shall serve as a member of the Board without 
        additional compensation.
            ``(2) The Secretary of the Treasury, or a designee of the 
        Secretary who is an officer of the Department of the Treasury 
        appointed to such office by the President, by and with the 
        advice and consent of the Senate, who shall serve as a member 
        of the Board without additional compensation.
            ``(3) 3 citizens of the United States, appointed by the 
        President, by and with the advice and consent of the Senate, 
        each for a term of 6 years.
    ``(b) Requirements for Members.--
            ``(1) Qualifications and nominations.--The members of the 
        Board appointed pursuant to subsection (a)(3) shall be from 
        among persons with extensive experience or training in housing 
        finance, financial institution regulation, or capital markets. 
        An appointed member shall not hold any other appointed office 
        during his or her term as member. Not more than 3 members of 
        the Board shall be members of the same political party. 
        Nominations pursuant to this paragraph shall be referred in the 
        Senate to the Committee on Banking, Housing, and Urban Affairs.
            ``(2) Limitations on conflicts of interest.--No individual 
        who is a member of the Board may--
                    ``(A) hold any office, position, or employment in 
                any Federal home loan bank, enterprise, or member of 
                any Federal home loan bank (including any holding 
                company of a member) during the period that such 
                individual holds office as a member of the Board; or
                    ``(B) hold stock in any member of any Federal home 
                loan bank or in the holding company of any such member, 
                or in any enterprise.
            ``(3) Initial terms.--Notwithstanding subsection (a)(3), of 
        the members first appointed pursuant to such subsection, one 
        shall be appointed for a term of 2 years and one shall be 
        appointed for a term of 4 years.
            ``(4) Full-time status.--The members appointed pursuant to 
        subsection (a)(3) shall serve on a full-time basis.
    ``(c) Chairperson and Chief Executive Officer.--
            ``(1) Designation.--The President shall designate one of 
        the members of the Board appointed under subsection (a)(3) to 
        be the Chairperson of the Board.
            ``(2) Duties.--The Chairperson shall--
                    ``(A) carry out policies directed by the Board and, 
                in doing so, shall act as spokesperson for the Board 
                and represent the Board in its official relations with 
                the Federal Government; and
                    ``(B) act as chief executive officer of the Board 
                responsible for the day-to-day operations and 
                management of the Board and supervision of its 
                personnel, which shall include--
                            ``(i) responsibility for directing the 
                        implementation of policies and regulations 
                        adopted by the Board and the execution of the 
                        administrative functions and duties of the 
                        Board;
                            ``(ii) exercising all authorities of the 
                        Board under subsections (a) through (e) of 
                        section 1315 (relating to personnel); and
                            ``(iii) authority to exercise and perform, 
                        through such other officers and employees of 
                        the Board as the chief executive officer shall 
                        designate, the responsibilities for day-to-day 
                        operations and management of the Board.
            ``(3) Acting chairperson.--The Chairperson shall designate 
        another member of the Board appointed under subsection (a)(3) 
        to serve as Acting Chairperson during any absence or disability 
        of the Chairperson.
    ``(d) Vacancies.--
            ``(1) In general.--Any vacancy on the Board shall be filled 
        in the manner in which the original appointment was made. Any 
        member of the Board appointed to fill a vacancy occurring 
        before the expiration of the term for which such member's 
        predecessor was appointed shall be appointed only for the 
        remainder of such term. Each member may continue to serve until 
        a successor has been appointed and qualified.
            ``(2) Secretary.--In the event of a vacancy in the office 
        of Secretary of the Treasury or Secretary of Housing and Urban 
        Development or during the absence or disability of either such 
        Secretary, the Acting Secretary for such Department shall act 
        as a member of the Board in place of the Secretary.''.
    (b) Appointment of Board.--Notwithstanding section 162 or any other 
provision of law, the President may, at any time after the date of the 
enactment of this Act, appoint individuals to serve as members of the 
Housing Finance Oversight Board in accordance with the provisions of 
the amendment made by subsection (a) of this section.
    (c) Transition.--During the period that begins on the effective 
date under section 162 of this Act and ends upon the completion of the 
appointment and confirmation of at least 2 members of the Board 
appointed under section 1312(a)(3) of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4512(a)(3)), as amended by 
subsection (a) of this section, the Secretary of Housing and Urban 
Development and the Secretary of the Treasury shall act for all 
purposes as, and with the full powers of, the Housing Finance Oversight 
Board.

SEC. 102. DUTIES AND AUTHORITIES OF BOARD.

    Section 1313 of the Housing and Community Development Act of 1992 
(12 U.S.C. 4513) is amended--
            (1) by striking the section designation and section heading 
        and all that follows through the end of subsection (c) and 
        inserting the following:

``SEC. 1313. DUTIES AND AUTHORITIES OF BOARD.

    ``(a) Duties.--
            ``(1) Principal duties.--The principal duties of the Board 
        shall be to ensure that the enterprises and the Federal home 
        loan banks--
                    ``(A) operate in a financially safe and sound 
                manner;
                    ``(B) carry out their missions through activities 
                that are authorized under, and consistent with the 
                purposes of, the provisions of Federal law that charter 
                such entities; and
                    ``(C) remain adequately capitalized.
            ``(2) Other duties.--To the extent consistent with 
        paragraph (1), the duty of the Board shall be to exercise 
        general supervisory and regulatory authority over--
                    ``(A) the enterprises, in accordance with this 
                title, the Federal National Mortgage Association 
                Charter Act, the Federal Home Loan Mortgage Corporation 
                Act, and any other provisions of law; and
                    ``(B) the Federal home loan banks, in accordance 
                with the Federal Home Loan Bank Act and any other 
                provisions of law.''; and
            (2) by redesignating subsections (d) and (e) as subsections 
        (b) and (c), respectively.

SEC. 103. PUBLIC DISCLOSURE OF INFORMATION.

    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 ``by enterprises'' 
        and inserting ``and information''; and
            (2) by adding at the end the following new subsection:
    ``(c) Public Disclosure of Information.--The Board shall, by 
regulation, require each enterprise and Federal home loan bank to 
disclose to the public, on not less than an annual basis, such 
financial, business, and other information that the Board determines 
would be in the public interest because the availability of such 
information would increase the efficiency of the secondary mortgage 
market or the housing finance system.''.

SEC. 104. PERSONNEL.

    Section 1315 of the Housing and Community Development Act of 1992 
(12 U.S.C. 4515) is amended--
            (1) in subsection (a)--
                    (A) by striking ``The'' and inserting ``Subject to 
                title II of the Housing Finance Regulatory Improvement 
                Act, the''; and
                    (B) by adding at the end the following new 
                sentence: ``Notwithstanding any other provision of this 
                section, in no event shall the Board delegate any 
                function to any employee, administrative unit of any 
                Federal home loan bank, or joint office of the Federal 
                Home Loan Bank System.'';
            (2) by striking subsections (d) and (f); and
            (3) by redesignating subsection (e) as subsection (d).

SEC. 105. ASSESSMENTS.

    Section 1316 of the Housing and Community Development Act of 1992 
(12 U.S.C. 4516) is amended--
            (1) in the first sentence of subsection (a), by striking 
        ``, to the extent provided in appropriation Acts,'';
            (2) in subsection (f)--
                    (A) by inserting after the second sentence the 
                following new sentence: ``Receipts of the Board derived 
                from assessments levied upon the Federal home loan 
                banks pursuant to section 18(b) of the Federal Home 
                Loan Bank Act and from other sources (other than 
                receipts from the sale of consolidated Federal home 
                loan bank bonds and debentures issued under section 11 
                of such Act) shall be deposited in the Fund.''; and
                    (B) by striking the last sentence and inserting the 
                following new sentence: ``Notwithstanding any other 
                provision of law, any assessments collected pursuant to 
                this section or pursuant to section 18(b) of the 
                Federal Home Loan Bank Act and any amounts in the Fund 
                shall not be construed to be Government or public funds 
                or appropriated money, shall not be subject to 
                apportionment for purposes of chapter 15 of title 31, 
                United States Code, or under any other authority, and 
                shall be available without fiscal year limitation for 
                carrying out the responsibilities of the Board, 
                including any necessary administrative and 
                nonadministrative expenses of the Board in carrying out 
                the purposes of this title, the Federal National 
                Mortgage Association Charter Act, the Federal Home Loan 
                Mortgage Corporation Act, and the Federal Home Loan 
                Bank Act.''; and
            (3) in subsection (g)(3)--
                    (A) by striking ``(A)''; and
                    (B) by striking ``, and (B)'' and all that follows 
                through ``Secretary''.

SEC. 106. PUBLIC DISCLOSURE OF FINAL ORDERS AND AGREEMENTS.

    Section 1319C of the Housing and Community Development Act of 1992 
(12 U.S.C. 4522) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1), by inserting ``or the Federal 
                home loan banks, as the case may be'' before the 
                semicolon; and
                    (B) in paragraph (2), by inserting ``or under the 
                authority of Board under the Federal Home Loan Bank 
                Act'' after ``subtitle C'';
            (2) in subsection (c), by inserting ``or the Federal home 
        loan banks'' after ``the enterprise''; and
            (3) in subsection (e), by inserting ``or under the 
        authority of Board under the Federal Home Loan Bank Act'' 
        before the period at the end.

SEC. 107. LIMITATION ON SUBSEQUENT EMPLOYMENT.

    Section 1319D of the Housing and Community Development Act of 1992 
(12 U.S.C. 4523) is amended by inserting ``or any Federal home loan 
bank'' after ``an enterprise''.

SEC. 108. REGULATIONS.

    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 Board shall issue any regulations and orders 
necessary to carry out the duties of the Board and to carry out this 
title and the responsibilities of the Board under the Federal National 
Mortgage Association Charter Act, the Federal Home Loan Mortgage 
Corporation Act, and the Federal Home Loan Bank Act and to ensure that 
the purposes of this title and such Acts are accomplished.''; and
            (2) in subsection (c), by striking ``Committee on Banking, 
        Finance and Urban Affairs'' and inserting ``Committee on 
        Banking and Financial Services''.

SEC. 109. TERMINATION OF AUTHORITY OF HUD.

    (a) In General.--Part 2 of subtitle A of title XIII of the Housing 
and Community Development Act of 1992 is amended--
            (1) by striking the heading for the part and the heading 
        for subpart A and inserting the following:

    ``PART 2--NEW ACTIVITIES, HOUSING INFORMATION, AND HOUSING GOALS

         ``Subpart A--New Activities and Housing Information'';

        and
            (2) by striking section 1321 (12 U.S.C. 4541).
    (b) Retention of Fair Housing Responsibilities.--Section 1325 of 
the Housing and Community Development Act of 1992 (12 U.S.C. 4545) is 
amended, in the matter preceding paragraph (1), by inserting ``of 
Housing and Urban Development'' after ``Secretary''.

SEC. 110. APPROVAL OF BOARD FOR NEW ACTIVITIES.

    (a) In General.--Section 1322 of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4542) is amended to read as follows:

``SEC. 1322. PRIOR APPROVAL AUTHORITY FOR NEW ACTIVITIES.

    ``(a) Authority.--The Board shall have the authority to approve all 
new activities, and to review all ongoing activities, of an enterprise 
or a Federal home loan bank to ensure compliance with the Federal 
National Mortgage Association Charter Act, the Federal Home Loan 
Mortgage Corporation Act, or the Federal Home Loan Bank Act, as 
applicable.
    ``(b) Requirement for Prior Approval.--An enterprise or Federal 
home loan bank may not commence any new activity before obtaining the 
approval of the Board for the new activity, in accordance with this 
section.
    ``(c) Standard for Approval.--The Board may approve a new activity 
of an enterprise or a Federal home loan bank only if--
            ``(1) the new activity is authorized--
                    ``(A) with respect to the Federal National Mortgage 
                Association, under the Federal National Mortgage 
                Association Charter Act or other Federal law;
                    ``(B) with respect to the Federal Home Loan 
                Mortgage Corporation, under the Federal Home Loan 
                Mortgage Corporation Act or other Federal law; and
                    ``(C) with respect to a Federal home loan bank, 
                under the Federal Home Loan Bank Act or other Federal 
                law;
            ``(2) the Board determines that the enterprise or Federal 
        home loan bank can conduct the new activity in a safe and sound 
        manner; and
            ``(3) the Board determines that the new activity is in the 
        public interest.
    ``(d) Procedure for Approval.--
            ``(1) Request and publication.--To obtain the approval of 
        the Board for purposes of subsection (b), an enterprise or 
        Federal home loan bank proposing to implement a new activity 
        shall submit to the Board a written request for approval in 
        such form as the Board may require. Promptly following receipt 
        of such a request, the Board shall provide for publication of a 
        notice in the Federal Register describing the request and 
        providing a period after publication of not less than 30 days 
        for interested parties to submit to the Board written comments 
        regarding the request.
            ``(2) Board determination.--The Board shall review the 
        request, taking into consideration any relevant matter during 
        the comment period, and shall approve or deny the request not 
        later than the expiration of the 90-day period beginning upon 
        the publication of the notice regarding the request in the 
        Federal Register. If the Board requests additional information 
        from an enterprise or Federal home loan bank regarding the new 
        activity, the Board may extend the review period under this 
        paragraph for an additional 30 days.
            ``(3) Denial of request.--If the Board denies a request for 
        commencement of a new activity, the affected enterprise or 
        Federal home loan bank may seek judicial review of the decision 
        pursuant to chapter 7 of title 5, United States Code.''.
    (b) Definition of New Activity.--Section 1303(13) of the Housing 
and Community Development Act of 1992 (12 U.S.C. 4502(13)) is amended 
to read as follows:
            ``(13) New activity.--
                    ``(A) Enterprises.--The term `new activity' means, 
                with respect to the enterprises, any program, activity, 
                or business process providing financing or other 
                services related to the origination of conventional 
                mortgages (including purchasing, servicing, selling, 
                and lending on the security of such mortgages) that--
                            ``(i) is significantly different from 
                        programs, activities, or business processes 
                        that (I) have been approved under this Act, or 
                        (II) that were approved or engaged in by an 
                        enterprise before the date of the enactment of 
                        the Housing and Community Development Act of 
                        1992; or
                            ``(ii) represents an expansion, in terms of 
                        the dollar volume or number of mortgages or 
                        securities involved, of programs above limits 
                        expressly contained in any prior approval.
                    ``(B) Federal home loan banks.--The term `new 
                activity' means, with respect to a Federal home loan 
                bank, any program, activity, or business process that--
                            ``(i) has not previously been approved (I) 
                        under this Act, or (II) if commenced before the 
effective date under section 162 of the Housing Finance Regulatory 
Improvement Act, is not explicitly authorized under the Federal Home 
Loan Bank Act or was not explicitly approved by the Federal Housing 
Finance Board; or
                            ``(ii) would result in a significant change 
                        in the revenue of the bank or represents an 
                        expansion in the investment in, volume, or 
                        scope of a program, activity, or business 
                        process above limits expressly contained in any 
                        prior approval.''.
    (d) 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 ``program'' and inserting 
                ``activity''; and
                    (B) by striking ``Secretary'' and inserting 
                ``Housing Finance Oversight Board''.
            (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 ``program'' and inserting 
                ``activity''; and
                    (B) by striking ``Secretary'' and inserting 
                ``Housing Finance Oversight Board''.
            (3) 1992 act.--Section 1369C(a)(4) of the Housing and 
        Community Development Act of 1992 (12 U.S.C. 4622(a)(4)) is 
        amended by striking ``programs'' and inserting ``activities''.

SEC. 111. LIMITATION ON NONMISSION-RELATED ASSETS.

    (a) Enterprises.--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 Enterprises, Special 
   Enforcement Powers, and Limitation on Nonmission-Related Assets'';

        and
            (2) by adding at the end the following new section:

``SEC. 1369E. LIMITATION ON NONMISSION-RELATED ASSETS.

    ``The Board shall, by regulation, limit the nonmission-related 
assets that an enterprise may hold at any time. The Board shall define 
the term `nonmission-related asset' for purposes of this section.''.
    (b) Federal Home Loan Banks.--Section 11(h) of the Federal Home 
Loan Bank Act (12 U.S.C. 1431(h)) is amended--
            (1) by inserting ``(1)'' after ``(h)''; and
            (2) by adding at the end the following new paragraph:
    ``(2) The Board shall, by regulation, limit the nonmission-related 
assets that a Federal home loan bank may hold at any time. The Board 
shall define the term `nonmission-related asset' for purposes of this 
section.''.

SEC. 112. CONFORMING LOAN LIMITS.

    (a) Fannie Mae.--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 $252,700 for a mortgage secured by 
a single-family residence, $323,400 for a mortgage secured by a 2-
family residence, $390,900 for a mortgage secured by a 3-family 
residence, and $485,800 for a mortgage secured by a 4-family residence, 
except that such maximum limitations shall be adjusted effective 
January 1 of each year beginning with 2001, subject to the limitations 
in this paragraph. Each adjustment shall be made by adding to each such 
amount (as it may have been previously adjusted) a percentage thereof 
equal to the percentage increase during the 12-month period ending with 
the previous October in the housing price index of the Housing Finance 
Oversight Board established under section 1321 of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4541). If, at the end of 
such 12-month period, the housing price index is not at a level higher 
than the level of such index at the beginning of such period, no such 
adjustment may be made for the January 1 first occurring thereafter.''.
    (b) Freddie Mac.--Section 305(a)(2) of the Federal National 
Mortgage Association Charter 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 $252,700 for a mortgage 
secured by a single-family residence, $323,400 for a mortgage secured 
by a 2-family residence, $390,900 for a mortgage secured by a 3-family 
residence, and $485,800 for a mortgage secured by a 4-family residence, 
except that such maximum limitations shall be adjusted effective 
January 1 of each year beginning with 2001, subject to the limitations 
in this paragraph. Each adjustment shall be made by adding to each such 
amount (as it may have been previously adjusted) a percentage thereof 
equal to the percentage increase during the 12-month period ending with 
the previous October in the housing price index of the Housing Finance 
Oversight Board established under section 1321 of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4541). If, at the end of 
such 12-month period, the housing price index is not at a level higher 
than the level of such index at the beginning of such period, no such 
adjustment may be made for the January 1 first occurring thereafter.''.
    (c) Housing Price Index.--Subpart A of Part 2 of subtitle A of 
title XIII of the Housing and Community Development Act of 1992 is 
amended by inserting before section 1322 (as amended by the preceding 
provisions of this Act) the following new section:

``SEC. 1321. ESTABLISHMENT OF HOUSING PRICE INDEX.

    ``The Board shall establish a housing price index for use for 
adjusting the conforming loan limitations of the enterprises, which 
shall be a successor index to the national average one-family house 
price determined by the monthly survey of all major lenders conducted 
by the Federal Housing Finance Board and the House Price Index of the 
Office of Federal Housing Enterprise Oversight of the Department of 
Housing and Urban Development.''.

SEC. 113. DEFINITIONS.

    Section 1303 of the Housing and Community Development Act of 1992 
(12 U.S.C. 4502) is amended--
            (1) by striking paragraphs (5), (14), and (15);
            (2) by redesignating paragraphs (2), (3), (4) as paragraphs 
        (3), (4), and (5), respectively;
            (3) by redesignating paragraphs (16) through (19) as 
        paragraphs (14) through (17), respectively; and
            (4) by inserting after paragraph (1) the following new 
        paragraph:
            ``(2) Board.--The term `Board' means the Housing Finance 
        Oversight Board established under section 1311.''.

SEC. 114. SUPERVISION OF FEDERAL HOME LOAN BANK SYSTEM.

    (a) Federal Home Loan Bank Act.--The Federal Home Loan Bank Act is 
amended--
            (1) in section 2 (12 U.S.C. 1422), by striking paragraph 
        (1) and inserting the following new paragraph:
            ``(1) Board.--The term `Board' means the Housing Finance 
        Oversight Board established under section 1311 of the Housing 
        and Community Development Act of 1992.'';
            (2) by striking section 2A (12 U.S.C. 1422a) and inserting 
        the following new section:

``SEC. 2A. SUPERVISION AND REGULATION OF BANKS.

    ``The Federal home loan banks shall, to the extent provided in 
title XIII of the Housing and Community Development Act of 1992 (12 
U.S.C. 4501 et seq.) and this Act, be subject to the supervision and 
regulation of the Housing Finance Oversight Board.'';
            (3) in section 2B (12 U.S.C. 1422b)--
                    (A) in the section heading, by striking ``powers 
                and duties'' and inserting ``enforcement authority of 
                board'';
                    (B) in subsection (a)--
                            (i) by striking the subsection designation 
                        and heading and all that follows through the 
                        end of paragraph (1) and inserting the 
                        following:
    ``The Board shall have the following powers:'';
                            (ii) by striking paragraphs (3) and (4); 
                        and
                            (ii) by redesignating paragraphs (2), (5), 
                        (6), and (7) as paragraphs (1), (2), (3), and 
                        (4), respectively; and
                    (C) by striking subsections (b), (c), and (d);
            (4) in section 21 (12 U.S.C. 1441)--
                    (A) in subsection (b), in the heading for paragraph 
                (8), by striking ``federal housing finance board'' and 
                inserting ``housing finance oversight board''; and
                    (B) in subsection (i), in the heading for paragraph 
                (2), by striking ``Federal housing finance board'' and 
                inserting ``Housing finance oversight board'';
            (5) by striking ``the Finance Board'' each place it appears 
        and inserting ``the Board''; and
            (6) by striking ``Federal Housing Finance Board'' each 
        place it appears and inserting ``Board''.
    (b) Financing Corporation.--The amendments made by this title shall 
not affect the appointment or term of any member, or of the 
chairperson, of the Directorate of the Financing Corporation who is 
serving on the date such amendments take effect.
    (c) References to FHFB.--Any reference in any Federal law enacted 
before the date of the enactment of this Act to the Federal Housing 
Finance Board shall be treated as referring to the Housing Finance 
Oversight Board.
    (d) Technical Amendment.--Section 111 of Public Law 93-495 (12 
U.S.C. 250) is amended by striking ``Federal Housing Finance Board'' 
and inserting ``Housing Finance Oversight Board''.

SEC. 115. AMENDMENTS TO TITLE 5, UNITED STATES CODE.

    (a) Executive Schedule Pay Rates.--Subchapter II of chapter 53 of 
title 5, United States Code is amended--
            (1) in section 5313, by striking the item relating to the 
        Director of the Office of Federal Housing Enterprise Oversight, 
        Department of Housing and Urban Development;
            (2) in section 5314, by striking the item relating to the 
        Chairperson of the Federal Housing Finance Board and inserting 
        the following new item:
            ``Chairperson of the Housing Finance Oversight Board.''; 
        and
            (3) in section 5315, by striking the item relating to the 
        Directors, Federal Housing Finance Board and inserting the 
        following new item:
            ``Members, Housing Finance Oversight Board.''.
    (b) Definition of Agency.--Section 3132(a)(1)(D) of title 5, United 
States Code, is amended--
            (1) by striking ``the Federal Housing Finance Board,''; and
            (2) by striking ``the Office of Federal Housing Enterprise 
        Oversight of the Department of Housing and Urban Development'' 
        and inserting ``the Housing Finance Oversight Board''.

                 Subtitle B--Reduction of Systemic Risk

SEC. 131. ANNUAL REVIEW OF ENTERPRISES BY RATING ORGANIZATIONS.

    (a) In General.--Section 1319 of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4519) is amended--
            (1) in the section heading--
                    (A) by striking ``authority to provide for''; and
                    (B) by striking ``organization'' and inserting 
                ``organizations;
            (2) by inserting ``(a) Authority To Provide for Reviews.--
        '' before ``The''; and
            (3) by adding at the end the following new subsection:
    ``(b) Annual Determination of Credit Rating.--
            ``(1) In general.--For each year, the Board shall provide 
        for 2 entities effectively recognized by the Division of Market 
        Regulation of the Securities and Exchange Commission as 
nationally recognized statistical rating organizations for the purposes 
of the capital rules for broker dealers, each to conduct an assessment 
of the financial condition of each enterprise, each Federal home loan 
bank, and the Federal home loan bank system, for the purpose of 
determining the level of risk that the enterprise or bank will be 
unable to meet its obligations, taking into consideration the legal 
status evidenced by the statements required under--
                    ``(A) the penultimate sentence of section 304(b) of 
                the Federal National Mortgage Association Charter Act 
                (12 U.S.C. 1719(b));
                    ``(B) the last sentence of section 304(d) of the 
                Federal National Mortgage Association Charter Act (12 
                U.S.C. 1719(d));
                    ``(C) the penultimate sentence of section 304(e) of 
                the Federal National Mortgage Association Charter Act 
                (12 U.S.C. 1719(e));
                    ``(D) section 306(h)(2) of the Federal Home Loan 
                Mortgage Corporation Act (12 U.S.C. 1455(h)(2)); and
                    ``(E) the last sentence of section 15 of the 
                Federal Home Loan Bank Act (12 U.S.C. 1435).
            ``(2) Credit rating.--The assessment shall include 
        assigning a credit rating for each enterprise, each bank, and 
        the Federal home loan bank system using a scale similar to that 
        used by such organization with respect to obligations of other 
        financial institutions, and shall include the report regarding 
        such assessment and the rating in the report of the Board under 
        section 1319B(a).''.
    (b) Costs of Credit Ratings.--The first sentence of section 1316(a) 
of the Housing and Community Development Act of 1992 (12 U.S.C. 
4516(a)) is amended by inserting ``and the expenses of obtaining any 
reviews and credit assessments under subsections (a) and (b) section 
1319'' before the period at the end.

SEC. 132. ANNUAL REPORTS.

    Section 1319B of the Housing and Community Development Act of 1992 
(12 U.S.C. 4521) is amended--
            (1) in the section heading, by striking ``by director'';
            (2) in subsection (a)--
                    (A) in paragraph (1), by inserting ``and the 
                actions of the Board under the Federal Home Loan Bank 
                Act with respect to the Federal home loan banks'' 
                before the semicolon;
                    (B) in paragraph (2)--
                            (i) by inserting ``, each Federal home loan 
                        bank, and the Federal home loan bank system'' 
                        after ``each enterprise''; and
                            (ii) by inserting ``and examinations of the 
                        Federal home loan banks under section 20 of the 
                        Federal Home Loan Bank Act'' before the 
                        semicolon at the end;
                    (C) in paragraph (3), by striking ``; and'' and 
                inserting ``and the Federal home loan banks;'';
                    (D) in paragraph (4), by striking the period at the 
                end and inserting a ``; and''; and
                    (E) by adding at the end the following new 
                paragraph:
            ``(5) the report from each statistical rating organization 
        providing a credit assessment and rating pursuant to section 
        1319(b).''; and
            (3) in subsection (b), by adding after and below paragraph 
        (5) the following new sentence:
``The report shall also include information describing, for the 
previous calendar year, any enforcement actions taken by the Board with 
respect to the Federal home loan banks.''.

SEC. 133. RISK-BASED CAPITAL TEST FOR ENTERPRISES.

    Section 1361 of the Housing and Community Development Act of 1992 
(12 U.S.C. 4611) is amended--
            (1) in subsection (a)(2)(A), by inserting ``or change in 
        such other manner as the Board considers appropriate,'' after 
        ``subparagraph (C),'';
            (2) in subsection (b)(1), by adding at the end the 
        following: ``Notwithstanding subsection (a), the Board may, in 
        the sole discretion of the Board, make any assumptions that the 
        Board considers appropriate regarding interest rates, home 
        prices, and new business.''; and
            (3) in subsection (c)(2), by inserting ``or such other 
        greater percentage as the Board considers appropriate'' before 
        the period at the end.

SEC. 134. EFFECTIVE DATE FOR SUPERVISORY ACTIONS.

    Section 1365(c) of the Housing and Community Development Act of 
1992 (12 U.S.C. 4615(c)) is amended by striking ``1-year'' and 
inserting ``6-month''.

SEC. 135. APPOINTMENT OF RECEIVERS.

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

``SEC. 1369E. APPOINTMENT OF RECEIVERS.

    ``(a) Appointment.--
            ``(1) Authority.--Upon a determination, and notice under 
        section 1368(d), that an enterprise is critically 
        undercapitalized and a determination that the enterprise meets 
        such other conditions for taking action pursuant to this 
        subsection as the Board shall by regulation establish, the 
        Board may, notwithstanding section 1367(a)(1), appoint a 
        receiver for the enterprise in accordance with this section and 
        in lieu of appointment of a conservator pursuant to section 
        1367. If the Board takes action pursuant to this subsection, 
        the Board shall appoint the receiver not later than 30 days 
        after providing notice under paragraph (2) of this subsection.
            ``(2) Notice.--Upon making a determination under paragraph 
        (1) to appoint a receiver for an enterprise, the Board shall 
        provide written notice to the enterprise, the Committee on 
        Banking and Financial Services of the House of Representatives, 
        and the Committee on Banking, Housing, and Urban Affairs of the 
        Senate--
                    ``(A) that a receiver will be appointed for the 
                enterprise;
                    ``(B) stating the reasons for the appointment of 
                the receiver; and
                    ``(C) identifying the person or governmental agency 
                that the Board intends to appoint as receiver.
            ``(3) Qualifications.--The receiver shall be--
                    ``(A) the Board or any other governmental agency; 
                or
                    ``(B) any person that--
                            ``(i) has no claim against, or financial 
                        interest in, the enterprise or other basis for 
                        a conflict of interest; and
                            ``(ii) has the financial and management 
                        expertise necessary to carry out the duties 
                        under subsection (c).
    ``(b) Judicial Review.--The provisions of section 1369(b) shall 
apply to the appointment of a receiver pursuant to this section to the 
same extent that such provisions apply to the appointment of a 
conservator pursuant to this subtitle.
    ``(c) Duties.--A receiver appointed pursuant to this section shall 
be appointed for the purpose, and shall have the duty, of liquidating 
or winding up the affairs of the enterprise, in accordance with such 
regulations as the Board may issue.
    ``(d) Replacement, Powers, Liability Protection.--The provisions of 
sections 1369(c) and (d), 1369A, and 1369B shall apply to a receiver 
appointed pursuant to this section to the same extent that such 
provisions apply to a conservator appointed pursuant to this subtitle. 
In addition to any powers under section 1369A, a receiver appointed 
pursuant to this section shall have such powers with respect to an 
enterprise, as the Board may by regulation provide, that the Federal 
Deposit Insurance Corporation has under section 11 of the Federal 
Deposit Insurance Act (12 U.S.C. 1821) with respect to a insured 
depository institution when acting as a receiver under such section.''.
    (b) Federal Home Loan Banks.--Section 6 of the Federal Home Loan 
Bank Act (12 U.S.C. 1426) is amended by adding at the end the following 
new subsection:
    ``(i) Appointment of receivers.--
            ``(1) Appointment.--
                    ``(A) Authority.--Upon a determination by the Board 
                that a Federal home loan bank (i) is not in compliance 
                with the leverage requirement established specified in 
                subsection (a)(2), (ii) is not in compliance with the 
                risk-based capital requirement established pursuant to 
                subsection (a)(3), and (iii) meets such other 
                conditions for taking action pursuant to this paragraph 
                as the Board shall by regulation establish, the Board 
                may appoint a receiver for the bank in accordance with 
                this subsection. If the Board takes action pursuant to 
                this paragraph, the Board shall appoint the receiver 
                not later than 30 days after providing notice under 
                subparagraph (B).
                    ``(B) Notice.--Upon making a determination under 
                subparagraph (A) to appoint a receiver for a Federal 
                home loan bank, the Board shall provide written notice 
                to the bank, the Committee on Banking and Financial 
                Services of the House of Representatives, and the 
                Committee on Banking, Housing, and Urban Affairs of the 
                Senate--
                            ``(i) that a receiver will be appointed for 
                        the bank;
                            ``(ii) stating the reasons for the 
                        appointment of the receiver; and
                            ``(iii) identifying the person or 
                        governmental agency that the Board intends to 
                        appoint as receiver.
                    ``(C) Qualifications.--The receiver shall be--
                            ``(i) the Board or any other governmental 
                        agency; or
                            ``(ii) any person that--
                                    ``(I) has no claim against, or 
                                financial interest in, the bank or 
                                other basis for a conflict of interest; 
                                and
                                    ``(II) has the financial and 
                                management expertise necessary to carry 
                                out the duties under paragraph (3).
            ``(2) Judicial review.--The provisions of section 1369(b) 
        of the Housing and Community Development Act of 1992 (12 U.S.C. 
        4619(b)) shall apply to the appointment of a receiver pursuant 
        to this subsection for a Federal home loan bank to the same 
        extent that such provisions apply to the appointment of a 
        conservator pursuant to subtitle B of title XIII of such Act 
        (12 U.S.C. 4611 et seq.) for an enterprise.
            ``(3) Duties.--A receiver appointed pursuant to this 
        subsection shall be appointed for the purpose, and shall have 
        the duty, of liquidating or winding up the affairs of the 
        Federal home loan bank, in accordance with such regulations as 
        the Board may issue.
            ``(4) Replacement, Powers, Liability Protection.--The 
        provisions of sections 1369(c) and (d), 1369A, and 1369B of the 
        Housing and Community Development Act of 1992 (12 U.S.C. 4619, 
        4620, 4621) shall apply to a receiver appointed pursuant to 
        this subsection for a Federal home loan bank to the same extent 
        that such provisions apply to a conservator appointed pursuant 
        to subtitle B of title XIII of such Act for an enterprise. In 
        addition to any powers pursuant to section 1369A, a receiver 
        appointed pursuant to this subsection shall have such powers 
        with respect to a Federal home loan bank, as the Board may by 
        regulation provide, that the Federal Deposit Insurance 
        Corporation has under section 11 of the Federal Deposit 
        Insurance Act (12 U.S.C. 1821) with respect to a insured 
        depository institution when acting as a receiver under such 
        section.''.

SEC. 136. REPEAL OF TREASURY LINES OF CREDIT.

    (a) Fannie Mae.--Section 304 of the Federal National Mortgage 
Association Charter Act (12 U.S.C. 1719) is amended by striking 
subsection (c).
    (b) Freddie Mac.--Section 306 of the Federal Home Loan Mortgage 
Corporation Act (12 U.S.C. 1455) is amended by striking subsection (c).
    (c) Federal Home Loan Banks.--Section 11 of the Federal Home Loan 
Bank Act (12 U.S.C. 1431) is amended by striking subsection (i).

SEC. 137. BOARD MEMBERSHIP ON FEDERAL FINANCIAL INSTITUTIONS 
              EXAMINATION COUNCIL.

    The Federal Financial Institutions Examination Council Act of 1978 
is amended--
            (1) in section 1002 (12 U.S.C. 3301) by striking ``the 
        Federal Home Loan Bank Board, and the National Credit Union 
        Administration'' and inserting ``the Office of Thrift 
        Supervision, the National Credit Union Administration, and the 
        Housing Finance Oversight Board'';
            (2) in section 1003 (12 U.S.C. 3302)--
                    (A) in paragraph (1), by striking ``and the 
                National Credit Union Administration'' and inserting 
                ``the National Credit Union Administration, and the 
                Housing Finance Oversight Board''; and
                    (B) in paragraph (3), by striking ``or a credit 
                union'' and inserting ``a credit union, or a 
                Government-sponsored enterprise that is subject to the 
                regulation of the Housing Finance Oversight Board''; 
                and
            (3) in section 1004(a) (12 U.S.C. 3303(a))--
                    (A) in paragraph (4), by inserting a comma after 
                ``Supervision'';
                    (B) in paragraph (5), by striking the period at the 
                end and inserting ``, and''; and
                    (C) by adding at the end the following new 
                paragraph:
            ``(6) the Chairman of the Housing Finance Oversight 
        Board.''.

SEC. 138. ELIMINATION OF SUPER-LIEN FOR FEDERAL HOME LOAN BANKS.

    Section 10 of the Federal Home Loan Bank Act (12 U.S.C. 1430) is 
amended by striking subsection (e), as added by section 306(d) of the 
Competitive Equality Banking Act of 1987 (Public Law 100-86; 101 Stat. 
601; relating to priority of certain secured interests).

SEC. 139. FEDERAL HOME LOAN BANK FINANCE CORPORATION.

    (a) Establishment of Finance Corporation.--The Federal Home Loan 
Bank Act (12 U.S.C. 1421 et seq.) is amended by inserting after section 
4 the following new section:

``SEC. 5. FEDERAL HOME LOAN BANK FINANCE CORPORATION.

    ``(a) Establishment.--
            ``(1) In general.--There is established the Federal Home 
        Loan Bank Finance Corporation (hereafter in this section 
        referred to as the `Corporation'), which shall be a federally 
        chartered instrumentality of the United States.
            ``(2) Purposes.--The purposes of the Corporation shall be--
                    ``(A) to act as the only entity authorized to issue 
                and service the notes, bonds, debentures, and other 
                debt obligations which shall be the joint and several 
                liability of the Federal home loan banks in accordance 
                with this Act; and
                    ``(B) to perform or cause to be performed all other 
                necessary and proper functions in relation to the 
                issuance and servicing of obligations referred to in 
                subparagraph (A), as fiscal agent on behalf of the 
                Federal home loan banks, and any functions performed by 
                the Office of Finance on behalf of the Financing 
                Corporation (established pursuant to section 21) and 
                the Resolution Funding Corporation (established 
                pursuant to section 21B) before the date of enactment 
                of the Housing Finance Regulatory Improvement Act.
    ``(b) Powers.--Subject to the other provisions of this Act and to 
such regulations as the Board may prescribe, the Corporation shall have 
only the following powers:
            ``(1) To issue voting capital stock to the Federal home 
        loan banks.
            ``(2) To issue and service Federal Home loan bank notes, 
        bonds, debentures, and other obligations pursuant to section 11 
        on behalf of the Federal home loan banks.
            ``(3) To determine the amount, maturities, rate of 
        interest, terms, and other conditions of Federal home loan bank 
        notes, bonds, debentures, and other obligations.
            ``(4) To adopt, alter, and use a corporate seal.
            ``(5) To make contracts.
            ``(6) To sue and be sued, by and through its own attorneys, 
        in the corporate capacity of the Corporation, and to complain 
        and defend in any action brought by or against the Corporation 
        in any court of competent jurisdiction.
            ``(7) To determine the terms and conditions under which the 
        Corporation shall indemnify its directors, officers, employees, 
        and agents.
            ``(8) To exercise such incidental powers not inconsistent 
        with the provisions of this Act as are necessary or advisable 
        to carry out this Act.
    ``(c) Board of Directors.--
            ``(1) Establishment.--The management of the Corporation 
        shall be vested in a board of directors composed of directors 
        elected by the Federal home loan banks in accordance with 
        paragraph (2).
            ``(2) Composition of board.--Each Bank shall annually elect 
        1 individual who, as of the time of the election, is an officer 
        or director of the Bank to serve as a member of the board of 
        directors of the Corporation.
            ``(3) Duties.--The board of directors shall administer the 
        affairs of the Corporation in accordance with this Act.
            ``(4) Terms.--
                    ``(A) In general.--Each member of the board of 
                directors of the Corporation shall be elected for a 
                term of 1 year, and shall serve at the pleasure of the 
                board of directors of the Federal home loan bank that 
                elected that member.
                    ``(B) Interim appointments.--Any director elected 
                to fill a vacancy on the board of directors of the 
Corporation occurring before the expiration of the term for which the 
predecessor of that director was elected shall be elected only for the 
remainder of the unexpired term.
                    ``(C) Continuation of service.--Each director may 
                continue to serve after the expiration of the term to 
                which that director was elected until a successor has 
                been elected and qualified.
            ``(5) Powers.--The board of directors shall exercise such 
        powers as may be necessary and appropriate to carry out this 
        section, including the power--
                    ``(A) to review, adopt, and monitor the annual 
                budget of the Corporation;
                    ``(B) to set policies for the Corporation;
                    ``(C) to impose assessments on the Federal home 
                loan banks to fund the expenditures of the Corporation; 
                and
                    ``(D) to appoint, establish the duties of, and 
                compensate the employees of the Corporation, and to 
                dismiss at will the employees of the Corporation.
            ``(6) Pay.--The members of the board of directors shall 
        serve without additional compensation, but shall be reimbursed 
        for reasonable expenses of travel, lodging, and subsistence 
        incurred in performing the business of the Corporation.
            ``(7) Quorum requirement.--No business may be conducted by 
        the board of directors unless a quorum of the members of the 
        board of directors is present in person or by telephone, or 
        through action taken by unanimous written consent executed by 
        the members of the board of directors.
            ``(8) Appointment of officers and adoptions of rules of 
        procedure.--The board of directors shall--
                    ``(A) select, from among the members of the board, 
                a Chairperson and a Vice Chairperson; and
                    ``(B) adopt bylaws and other rules of procedure for 
                actions before the board of directors, including the 
                establishment of 1 or more committees to take action on 
                behalf of the board of directors and the delegation of 
                powers of the board of directors to any such committee 
                or officer of the Corporation.
    ``(d) Stock.--
            ``(1) Issuance of equal amount to each bank.--The 
        Corporation shall issue to each Bank 100 shares of voting 
        capital stock, with a par value of $100 per share.
            ``(2) Restricted transferability.--Stock issued under 
        paragraph (1) may be owned and held only by the Federal home 
        loan banks.
            ``(3) Merger.--Stock issued under paragraph (1) shall be 
        redeemable or transferable at par in the event of a merger or 
        consolidation pursuant to section 26.
            ``(4) Payment upon issuance.--Upon issuance of any share of 
        stock under this subsection to any Federal home loan bank, the 
        Bank shall pay to the Corporation the total amount due for such 
        stock.
            ``(5) Distribution requirement.--The total amount of 
        outstanding stock of the Corporation shall, at all times, be 
        distributed equally among all of the Federal home loan banks, 
        and the board of directors of the Corporation shall adopt 
        procedures from time to time to implement this paragraph.
    ``(e) Status.--Except to the extent that it would conflict with any 
provision of this section, or that the context of this Act otherwise 
requires, the Corporation shall be treated as a Federal home loan bank 
for purposes of any law.
    ``(f) Jurisdiction; Removal Power.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, any civil action or proceeding to which the Corporation is 
        a party shall be deemed to arise under the laws of the United 
        States.
            ``(2) Venue.--The United States District Court for the 
        District of Columbia shall have exclusive jurisdiction over any 
        action to which the Corporation is a party.
            ``(3) Removal.--The Corporation may, without bond or 
        security, remove any action or proceeding to which the 
        Corporation is or becomes a party from a State court to the 
        United States District Court for the District of Columbia.''.
    (b) Bonds and Debentures.--Section 11(a) of the Federal Home Loan 
Bank Act (12 U.S.C. 1431(a)) is amended--
            (1) by inserting ``through the Federal Home Loan Bank 
        Finance Corporation'' after ``to issue''; and
            (2) by striking ``Board may approve'' and inserting ``board 
        of directors of the Bank may approve''.
    (c) Issuance of Consolidated Obligations.--Section 11(b) of the 
Federal Home Loan Bank Act (12 U.S.C. 1431(b)) is amended to read as 
follows:
    ``(b) Issuance of Federal Home Loan Bank Consolidated 
Obligations.--
            ``(1) In general.--The Federal Home Loan Bank Finance 
        Corporation may issue consolidated Federal home loan bank bonds 
        and other consolidated obligations on behalf of the Banks.
            ``(2) Joint and several obligation; terms and conditions.--
        Consolidated obligations issued by the Federal Home Loan Bank 
        Finance Corporation under paragraph (1) shall--
                    ``(A) be the joint and several obligations of all 
                of the Federal home loan banks; and
                    ``(B) shall be issued upon such terms and 
                conditions as shall be established by the Federal Home 
                Loan Bank Finance Corporation, subject to such rules 
                and regulations as the Finance Board may prescribe.''.
    (d) Rediscounting of Notes.--Section 11(f) of the Federal Home Loan 
Bank Act (12 U.S.C. 1431(f)) is amended by striking ``permit,, to 
require,'' and inserting ``permit or to require''.
    (e) Treasury Purchase of Bank Obligations.--Section 11(i) of the 
Federal Home Loan Bank Act (12 U.S.C. 1431(i)) is amended by striking 
the second undesignated paragraph.
    (f) Technical Amendments.--The Federal Home Loan Bank Act (12 
U.S.C. 1421 et seq.) is amended--
            (1) in section 11 (12 U.S.C. 1431)--
                    (A) by striking subsection (c); and
                    (B) by redesignating subsections (d) through (k) as 
                subsections (c) through (j), respectively.
            (2) in section 21(b)(1), by striking subparagraph (A) and 
        inserting the following:
                    ``(A) The Chairperson of the Federal Home Loan Bank 
                Finance Corporation established under section 5.''; and
            (3) in section 21B(c)(1), by striking subparagraph (A) and 
        inserting the following:
                    ``(A) The Chairperson of the Federal Home Loan Bank 
                Finance Corporation established under section 5.''.
    (g) Transfer of Functions and Savings Provision.--
            (1) Transfer of functions.--The functions of the Office of 
        Finance of the Federal Home Loan Banks (in this subsection 
        referred to as the ``Office of Finance'') relating to the 
        issuance and servicing of consolidated obligations of the Banks 
        and any functions performed by the Office of Finance on behalf 
        of the Financing Corporation and the Resolution Funding 
        Corporation shall be transferred to the Federal Home Loan Bank 
        Finance Corporation (in this section referred to as the 
        ``Corporation'') established under section 5 of the Federal 
        Home Loan Bank Act, as added by this section, before the end of 
        the 6-month period beginning on the date of the enactment of 
        this Act.
            (2) Savings provision.--The transfer of functions from the 
        Office of Finance to the Corporation in accordance with this 
        section shall not affect the validity of any right, duty, 
        contract, or obligation of the Office of Finance (with respect 
        to any person or entity) that existed on the day before the 
        effective date of the transfer of functions.

SEC. 140. CAPITAL TREATMENT OF PRIVATE LABEL MORTGAGE-BACKED 
              SECURITIES.

    It is the sense of the Congress that, with respect to the 
provisions of proposed rules issued jointly by the Board of Governors 
of the Federal Reserve System, the Federal Deposit Insurance 
Corporation, the Comptroller of the Currency, and the Office of Thrift 
Supervision (Federal Reserve, Docket No. R-1055; FDIC, RIN 3064-AB31; 
OCC, Docket No 00-06; OTS Docket No. 2000-15) that address treatment of 
privately issued mortgage backed securities under risk-based capital 
requirements--
            (1) such proposed rules are appropriate because--
                    (A) such securities having a rating of AAA should 
                be treated, for risk-based capital purposes, in the 
                same manner as similar securities issued by Government-
                sponsored enterprises; and
                    (B) such parity in treatment eliminates a 
                substantial impediment to greater portfolio diversity 
                by banking institutions; and
                    (2) the final rules regarding such treatment should 
                not be significantly altered from such proposed rules.

SEC. 141. STUDY OF EFFECTS OF GSE FAILURE ON DEPOSITORY INSTITUTIONS.

    (a) In General.--The Federal Deposit Insurance Corporation, in 
consultation with the Board of Governors of the Federal Reserve System, 
shall conduct a study of the existing exposure of depository 
institutions to default or failure of each of the Government-sponsored 
enterprises and the effects on depository institutions that would 
result from such failures. The study shall determine--
            (1) the extent of equity and debt of, and, if applicable, 
        mortgage-backed securities issued by, each of the Government-
        sponsored enterprises that is held by depository institutions;
            (2) the likely implications to depository institutions 
        arising from such holdings if any Government-sponsored 
        enterprise fails to meet risk-based capital requirements 
        established by law, is more severely undercapitalized, or 
        defaults on its financial obligations; and
            (3) the effects on the financial exposure of depository 
        institutions to Government-sponsored enterprises from applying 
        restrictions on loans to a single borrower to depository 
        institutions.
    (c) Definitions.--For purposes of this section:
            (1) Depository institution.--The term ``depository 
        institution'' has the meaning given such term in section 
        19(b)(1)(A) of the Federal Reserve Act (12 U.S.C. 
        461(b)(1)(A)).
            (2) Government-sponsored enterprise.--The term 
        ``Government-sponsored enterprise'' means the Federal National 
        Mortgage Association, the Federal Home Loan Mortgage 
        Corporation, any of the Federal home loan banks, and the 
        Federal home loan bank system.

                     Subtitle C--General Provisions

SEC. 161. CONFORMING AND TECHNICAL AMENDMENTS.

    (a) Amendments to 1992 Act.--Title XIII of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4501 et seq.), as amended 
by the preceding provisions of this Act, is further amended--
            (1) in section 1313 (12 U.S.C. 4513(e)), in subsection (c) 
        (as so redesignated by the preceding provisions of this Act), 
        by striking ``the Secretary or'';
            (2) in the subsection heading for section 1315(a) (12 
        U.S.C. 4515(a)), by striking ``Office Personnel'' and inserting 
        ``In General'';
            (3) in section 1316(g) (12 U.S.C. 4516(g)), by striking 
        ``the Secretary and'' each place it appears;
            (4) in section 1319F (12 U.S.C. 4525), by striking ``Code'' 
        and all that follows through ``agencies'' and inserting ``Code, 
        the Board shall be considered an agency'';
            (5) in the section heading for section 1328, by striking 
        ``by secretary'' and inserting ``by board'';
            (6) by striking sections 1354, 1355, and 1356;
            (7) in the subsection heading for section 1369A(c) (12 
        U.S.C. 4620(c)), by striking ``Director'' and inserting 
        ``Board'';
            (8) in the section heading for section 1369D (12 U.S.C. 
        4623), by striking ``director'' and inserting ``board'';
            (9) in the subsection heading for section 1376(e) (12 
        U.S.C. 4636(e)), by striking ``Director'' and inserting 
        ``Board'';
            (10) by striking section 1383;
            (11) by striking ``Director'' each place such term appears 
        (except the second place such term appears in each of 
        paragraphs (1) and (2) of section 1316(g), the third place such 
        term appears in section 1317(c), in section 1361(a)(3)(C), and 
        the second and third places such term appears in subsection (f) 
        of section 1361) and inserting ``Board'';
            (12) by striking ``Director's'' each place such term 
        appears and inserting ``Board's'';
            (13) by striking ``Office'' each place such term appears 
        (except each place such term appears in section 1315(b), in 
        section 1316(g)(1), the second place such term appears in 
        section 1316(g)(2), in section 1317(c), in section 1334(d)(3), 
        in section 1361(a)(3)(C), and each place such term appears in 
        section 1361(f)) and inserting ``Board''; and
            (14) by striking ``Secretary'' each place such term appears 
        (except in section 1325, section 1361(d)(1), and section 
        1367(a)(2)) and inserting ``Board''.
    (b) Amendments to Federal National Mortgage Association 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 
        ``Housing Finance Oversight Board'', 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 301 (12 U.S.C. 1716)--
                    (A) in the section heading, by inserting ``and 
                definition'' after ``purposes'';
                    (B) by inserting ``(a) Purposes.--'' after the 
                section designation; and
                    (C) by adding at the end the following new 
                subsection:
    ``(b) Definition.--For purposes of this title, the term `Housing 
Finance Oversight Board' means the Housing Finance Oversight Board 
established under title XIII of the Housing and Community Development 
Act of 1992 (12 U.S.C. 4501 et seq.).'';
            (3) in section 302(b)(1), by striking ``Secretary'' each 
        place such term appears and inserting ``Housing Finance 
        Oversight Board'';
            (4) in section 309 (12 U.S.C. 1723a(d)(3)(B))--
                    (A) in the second sentence of subsection (d)(3)(B), 
                by striking ``Director'' each place such term appears 
                and inserting ``Housing Finance Oversight Board'';
                    (B) in subsection (k)--
                            (i) in paragraph (1), by striking 
                        ``Director shall'' and inserting ``Housing 
                        Finance Oversight Board shall''; and
                            (ii) in paragraphs (2) and (3), by striking 
                        ``Director'' each place such term appears and 
                        inserting ``Housing Finance Oversight Board''; 
                        and
                    (C) in subsection (l)(2), by striking ``Director'' 
                and inserting ``Housing Finance Oversight Board''; and
            (5) in section 309, by striking ``Secretary'' each place 
        such term appears in subsections (m) and (n) and inserting 
        ``Housing Finance Oversight Board''.
    (c) Amendments to Federal Home Loan Mortgage Corporation 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 
        ``Housing Finance Oversight Board'', 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 section 302 (12 U.S.C. 1415), by adding at the end 
        the following new subsection:
    ``(m) The term `Housing Finance Oversight Board' means the Housing 
Finance Oversight Board established under title XIII of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4501 et seq.).'';
            (3) in the second sentence of section 303(h)(2) (12 U.S.C. 
        1452(h)(2), by striking ``Director'' each place such term 
        appears and inserting ``Housing Finance Oversight Board'';
            (4) in section 307, by striking ``Secretary'' each place 
        such term appears in subsections (e) and (f) and inserting 
        ``Housing Finance Oversight Board'';
            (5) in section 306(i) (12 U.S.C. 1455(i))--
                    (A) by striking ``section 1316(c)'' and inserting 
                ``section 306(c)''; and
                    (B) by striking ``section 106'' and inserting 
                ``section 1316''; and
            (6) in section 307 (12 U.S.C. 1456)--
                    (A) in subsection (c)(1), by striking ``Director 
                shall'' and inserting ``Housing Finance Oversight Board 
                shall'';
                    (B) in subsection (c), in paragraphs (2) and (3), 
                by striking ``Director'' each place such term appears 
                and inserting ``Housing Finance Oversight Board''; and
                    (C) in subsection (d)(2), by striking ``Director'' 
                and inserting ``Housing Finance Oversight Board''.
    (d) Amendment to Department of Housing and Urban Development Act.--
Section 5 of the Department of Housing and Urban Development Act (42 
U.S.C. 3534) is amended by striking subsection (d).
    (e) Amendment to Title 18, United States Code.--Section 1905 of 
title 18, United States Code, is amended by striking ``Office of 
Federal Housing Enterprise Oversight'' and inserting ``Housing Finance 
Oversight Board''.
    (f) Amendments to Flood Disaster Protection Act of 1973.--Section 
102(f)(3)(A) of the Flood Disaster Protection Act of 1973 (42 U.S.C. 
4012a is amended--
            (1) by striking ``Director of the Office of Federal Housing 
        Enterprise Oversight of the Department of Housing and Urban 
        Development'' and inserting ``Housing Finance Oversight 
        Board''; and
            (2) by striking ``Director of such Office'' and inserting 
        ``Board''.

SEC. 162. EFFECTIVE DATE.

    Except as specifically provided otherwise in this title, the 
amendments made by this title shall take effect on, and shall apply 
beginning on, the expiration of the 270-day period beginning on the 
date of the enactment of this Act.

        TITLE II--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY

SEC. 201. ABOLISHMENT OF OFHEO AND FEDERAL HOUSING FINANCE BOARD.

    (a) In General.--Effective at the end of the 270-day period 
beginning on the date of the enactment of this Act, the following 
entities and positions are abolished:
            (1) 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.
            (2) The Federal Housing Finance Board and the Board of 
        Directors of such Board.
    (b) Disposition of Affairs.--
            (1) In general.--During the 270-day period beginning on the 
        date of the enactment of this Act, the Director of the Office 
        of Federal Housing Enterprise Oversight and the Chairperson of 
        the Federal Housing Finance Board shall, solely for the purpose 
        of winding up the affairs of the Office of Federal Housing 
        Enterprise Oversight and the Federal Housing Finance Board, 
        respectively--
                    (A) manage the employees of such Office and 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 
                pursuant to section 203; and
                    (B) may take any other action necessary for the 
                purpose of winding up the affairs of the Office and the 
                Board.
    (c) Status of Employees Before Transfer.--The amendments made by 
title I and the abolishment of the Office of Federal Housing Enterprise 
Oversight and the Federal Housing Finance Board under subsection (a) of 
this section may not be construed to affect the status of any employee 
of such Office or 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 pursuant to section 203.
    (d) Use of Property and Services.--
            (1) Property.--The Chairperson of the Housing Finance 
        Oversight Board may use the property of the Office of Federal 
        Housing Enterprise Oversight and the Federal Housing Finance 
        Board, to perform functions which have been transferred to the 
        Housing Finance Oversight Board 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 (including any Federal 
        home loan bank), and any successor to any such agency, 
        department, or instrumentality, which was providing supporting 
        services to the Office of Federal Housing Enterprise Oversight 
        or the Federal Housing Finance Board before the expiration of 
        the period under subsection (a) in connection with functions 
        that are transferred to the Housing Finance Oversight Board 
        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 Relating to FHFB.--
            (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 Federal 
        Housing Finance Board, or any other person, which--
                    (A) arises under or pursuant to 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 abolishment under 
                subsection (a) of this section.
            (2) Continuation of suits.--No action or other proceeding 
        commenced by or against the Federal Housing Finance Board, or 
        any Federal home loan bank with respect to any function of the 
        Board which was delegated to employees of such bank, shall 
        abate by reason of the enactment of this Act, except that the 
        Housing Finance Oversight Board shall be substituted for the 
        Federal Housing Finance Board or the Federal home loan bank as 
        a party to any such action or proceeding.
    (f) Savings Provisions Relating to OFHEO.--
            (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 shall abate by reason of the 
        enactment of this Act, except that the Housing Finance 
        Oversight Board shall be substituted for the Director as a 
        party to any such action or proceeding.

SEC. 202. 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;
                    (B) the Federal Housing Finance Board;
                    (C) the Secretary of Housing and Urban Development 
                and that relate to the Secretary's authority under 
                title XIII of the Housing and Community Development Act 
                of 1992, the Federal National Mortgage Association 
                Charter Act, or the Federal Home Loan Mortgage 
                Corporation Act; or
                    (D) a court of competent jurisdiction and that 
                relate to functions transferred by this Act; and
            (2) are in effect on the date of the abolishment under 
        section 201(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 Housing Finance Oversight Board until modified, terminated, 
set aside, or superseded in accordance with applicable law by such 
Board, any court of competent jurisdiction, or operation of law.

SEC. 203. TRANSFER AND RIGHTS OF EMPLOYEES OF ABOLISHED AGENCIES.

    (a) Transfer.--Each employee of the Office of Federal Housing 
Enterprise Oversight and each employee of the Federal Housing Finance 
Board shall be transferred to the Housing Finance Oversight Board for 
employment no later than the date of the abolishment under section 
201(a) of this Act and such transfer shall be deemed a transfer of 
function for the purpose 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 18 
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 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 Housing Finance Oversight 
        Board 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, 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 Housing Finance Oversight Board 
determines, after the end of the 1-year period beginning on the date 
the transfer of functions to the Board is completed, 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 accepting employment 
with the Housing Finance Oversight Board as a result of such transfer 
may retain for 18 months after the date such transfer occurs membership 
in any employee benefit program of the Federal Housing Finance Board 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 201(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 Housing 
        Finance Oversight Board.
The difference in the costs between the benefits which would have been 
provided by such agency or entity and those provided by this section 
shall be paid by the Housing Finance Oversight Board. If any employee 
elects to give up membership in a health insurance program or the 
health insurance program is not continued by such Board, 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.
    (f) Senior Executive Service Employees.--A transferring employee in 
the Senior Executive Service shall be placed in a comparable position 
at the agency or entity to which such employee is transferred.
    (g) Notice of Positions.--Transferring employees shall receive 
notice of their position assignments not later than 120 days after the 
effective date of their transfer.
    (h) Federal Home Loan Bank Personnel.--Employees of the Federal 
home loan banks or the joint offices of such banks who, on the day 
before the abolishment under section 201(a), are performing functions 
or activities on behalf of the Federal Housing Finance Board shall be 
treated as employees of the Federal Housing Finance Board for purposes 
of determining, pursuant to subsection (b)(1), the number of employees 
performing or supporting functions or activities of such Board to the 
extent such functions or activities are transferred to the Housing 
Finance Oversight Board.

SEC. 204. TRANSFER OF PROPERTY AND FACILITIES.

    Upon the abolishment under section 201(a), all property of the 
Office of Federal Housing Enterprise Oversight and the Federal Housing 
Finance Board shall transfer to the Housing Finance Oversight Board.
                                 <all>