[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2575 Introduced in House (IH)]
108th CONGRESS
1st Session
H. R. 2575
To reform the regulation of certain housing-related Government-
sponsored enterprises, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 24, 2003
Mr. Baker (for himself, Mr. Ose, Mr. Bachus, Mr. King of New York, Mr.
Leach, Mr. Shays, Mr. Linder, Ms. Ginny Brown-Waite of Florida, Mr.
Cox, Mr. Ryan of Wisconsin, Mr. Gary G. Miller of California, Mr.
Renzi, Mr. Manzullo, Ms. Hart, Mr. Hoekstra, Mr. Jones of North
Carolina, Mr. Toomey, Mr. Hensarling, Mr. Gillmor, Mr. Lucas of
Oklahoma, and Ms. Harris) introduced the following bill; which was
referred to the Committee on Financial Services
_______________________________________________________________________
A BILL
To reform the regulation of certain housing-related Government-
sponsored enterprises, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Secondary Mortgage
Market Enterprises 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--REFORM OF REGULATION OF FANNIE MAE AND FREDDIE MAC
Subtitle A--Improvement of Supervision
Sec. 101. Change of name of Office of Thrift Supervision to Office of
Housing Finance Supervision.
Sec. 102. Transfer of authority to regulate safety and soundness of
enterprises to Office of Housing Finance
Supervision.
Sec. 103. Duties and authorities of Director.
Sec. 104. Examiners and accountants.
Sec. 105. Regulations.
Sec. 106. Assessments.
Sec. 107. Authority of Secretary of HUD for new activities, housing
information, and housing goals.
Sec. 108. Prior approval of Secretary of HUD for new activities.
Sec. 109. Limitation on nonmission-related assets.
Sec. 110. Conforming loan limits.
Sec. 111. Public disclosure of information.
Sec. 112. Reviews of enterprises.
Sec. 113. Risk-based capital test for enterprises.
Sec. 114. Minimum and critical capital levels.
Sec. 115. Required implementation of agreement.
Sec. 116. Definitions.
Subtitle B--Prompt Corrective Action
Sec. 131. Capital classifications.
Sec. 132. Supervisory actions applicable to undercapitalized
enterprises.
Sec. 133. Supervisory actions applicable to significantly
undercapitalized enterprises.
Sec. 134. Authority over critically undercapitalized enterprises.
Subtitle C--Enforcement Actions
Sec. 151. Cease-and-desist proceedings.
Sec. 152. Temporary cease-and-desist proceedings.
Sec. 153. Removal and prohibition authority.
Sec. 154. Enforcement and jurisdiction.
Sec. 155. Civil money penalties.
Sec. 156. Criminal penalty.
Subtitle D--Reporting Regarding Enterprises
Sec. 161. Reporting regarding enterprises.
Subtitle E--General Provisions
Sec. 171. Conforming and technical amendments.
Sec. 172. Effective date.
TITLE II--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY
Sec. 201. Abolishment of OFHEO.
Sec. 202. Continuation and coordination of certain regulations.
Sec. 203. Transfer and rights of employees of OFHEO.
Sec. 204. Transfer of property and facilities.
TITLE I--REFORM OF REGULATION OF FANNIE MAE AND FREDDIE MAC
Subtitle A--Improvement of Supervision
SEC. 101. CHANGE OF NAME OF OFFICE OF THRIFT SUPERVISION TO OFFICE OF
HOUSING FINANCE SUPERVISION.
(a) In General.--Section 3 of the Home Owners' Loan Act (12 U.S.C.
1462a) is amended--
(1) in the section heading, by striking ``thrift'' and
inserting ``housing finance''; and
(2) in subsection (a), by striking ``Office of Thrift
Supervision'' and inserting ``Office of Housing Finance
Supervision''.
(b) Conforming Amendments to Home Owners' Loan Act.--The Home
Owners' Loan Act is amended--
(1) by striking ``Thrift Supervision'' each place such term
appears and inserting ``Housing Finance Supervision''; and
(2) in the table of contents in section 1, by striking the
item relating to section 3 and inserting the following new
item:
``Sec. 3. Director of the Office of Housing Finance Supervision.''
(c) Other References.--Any reference in any Federal law, executive
order, rule, regulation, or delegation of authority, or any document of
or pertaining to the Office of Thrift Supervision--
(1) to the Director of the Office of Thrift Supervision is
deemed to refer to the Director of the Office of Housing
Finance Supervision; and
(2) to the Office of Thrift Supervision is deemed to refer
to the Office of Housing Finance Supervision.
SEC. 102. TRANSFER OF AUTHORITY TO REGULATE SAFETY AND SOUNDNESS OF
ENTERPRISES TO OFFICE OF HOUSING FINANCE SUPERVISION.
(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
section:
``SEC. 1311. SUPERVISION AND REGULATION BY OFFICE OF HOUSING FINANCE
SUPERVISION.
``(a) In General.--The enterprises shall, to the extent provided in
this title, be subject to the supervision and regulation of the
Director of the Office of Housing Finance Supervision. The Director
shall succeed to the authority of the Director of the Office of Federal
Housing Enterprise Oversight of the Department of Housing and Urban
Development 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, the
Federal National Mortgage Association Charter Act, the Federal Home
Loan Mortgage Corporation Act, and any other provision of Federal law).
``(b) Savings Provision.--The authority of the Director to take
actions under subtitles B and C does not in any way limit the general
supervisory and regulatory authority granted to the Director under
subsection (a).''.
(b) Prohibition of Financial Interests of Director.--
(1) In general.--Section 3(d) of the Home Owners' Loan Act
(12 U.S.C. 1462a(d)) is amended by inserting ``, or in any
enterprise, as defined in section 1303 of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12
U.S.C. 4502)'' before the period at the end.
(2) Applicability.--The amendment made by paragraph (1)
shall apply beginning on the expiration of the 1-year period
that begins on the date of the enactment of this Act.
SEC. 103. DUTIES AND AUTHORITIES OF DIRECTOR.
(a) In General.--Section 1313 of the Housing and Community
Development Act of 1992 (12 U.S.C. 4513) is amended to read as follows:
``SEC. 1313. DUTIES AND AUTHORITIES OF DIRECTOR.
``(a) Duties.--
``(1) Principal duties.--The principal duties under this
title of the Director shall be to ensure that the enterprises--
``(A) operate in a financially safe and sound
manner;
``(B) carry out their missions in a financially
safe and sound manner and only through activities that
have been authorized under, and are consistent with the
purposes of, the provisions of Federal law that charter
the enterprises, including as determined by the
Secretary of Housing and Urban Development under
section 1322; and
``(C) remain adequately capitalized.
``(2) Other duties.--To the extent consistent with
paragraph (1), the duty of the Director shall be to exercise
general supervisory and regulatory authority over 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.
``(b) Authority Exclusive of Secretary.--Except as specifically
provided in this Act, the Federal National Mortgage Association Charter
Act, the Federal Home Loan Mortgage Corporation Act, or any other
provision of Federal law, the authority of the Director with respect to
the enterprises shall not be subject to the review, approval, or
intervention of the Secretary of the Treasury.
``(c) Delegation of Authority.--The Director may delegate to
officers and employees of the Director any of the functions, powers,
and duties of the Director, with respect to supervision and regulation
of the enterprises, as the Director considers appropriate.''.
SEC. 104. EXAMINERS AND ACCOUNTANTS.
(a) Examinations.--Section 1317 of the Housing and Community
Development Act of 1992 (12 U.S.C. 4517) is amended--
(1) in the second sentence of subsection (c)--
(A) by striking ``The'' and inserting ``During the
3-year period that begins upon the date of the
enactment of the Secondary Mortgage Market Enterprises
Regulatory Improvement Act, the''; and
(B) by inserting ``to conduct examinations under
this section'' before the period; and
(2) in subsection (d)--
(A) by inserting ``, with respect to the
enterprises,'' after ``penalties''; and
(B) by striking ``Federal Reserve banks'' and
inserting ``Director, with respect to examinations of
savings associations''.
(b) Enhanced Authority To Hire Examiners and Accountants.--Section
1317 of the Housing and Community Development Act of 1992 (12 U.S.C.
4517) is amended by adding at the end the following new subsection:
``(g) Appointment of Accountants, Economists, and Examiners.--
``(1) Applicability.--This section applies with respect to
any position of examiner, accountant, and economist at the
Office, with respect to supervision and regulation of the
enterprises, that is in the competitive service.
``(2) Appointment authority.--
``(A) In general.--The Director may appoint
candidates to any position described in paragraph (1)--
``(i) in accordance with the statutes,
rules, and regulations governing appointments
in the excepted service; and
``(ii) notwithstanding any statutes, rules,
and regulations governing appointments in the
competitive service.
``(B) Rule of construction.--The appointment of a
candidate to a position under authority of this
paragraph shall not be considered to cause such
position to be converted from the competitive service
to the excepted service.
``(3) Reports.--No later than 90 days after the end of
fiscal year 2003 (for fiscal year 2003) and 90 days after the
end of fiscal year 2005 (for fiscal years 2004 and 2005), the
Director shall submit a report with respect to its exercise of
the authority granted by paragraph (2) during such fiscal years
to the Committee on Government Reform and the Committee on
Financial Services of the House of Representatives and the
Committee on Governmental Affairs and the Committee on Banking,
Housing, and Urban Affairs of the Senate. Such reports shall
describe the changes in the hiring process authorized by such
paragraph, including relevant information related to--
``(A) the quality of candidates;
``(B) the procedures used by the Director to select
candidates through the streamlined hiring process;
``(C) the numbers, types, and grades of employees
hired under the authority;
``(D) any benefits or shortcomings associated with
the use of the authority;
``(E) the effect of the exercise of the authority
on the hiring of veterans and other demographic groups;
and
``(F) the way in which managers were trained in the
administration of the streamlined hiring system.''.
SEC. 105. 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 Director shall issue any regulations and
orders necessary to carry out the duties of the Director, with respect
to supervision and regulation of the enterprises, under this title, the
Federal National Mortgage Association Charter Act, and the Federal Home
Loan Mortgage Corporation 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
Financial Services''.
SEC. 106. ASSESSMENTS.
Section 1316 of the Housing and Community Development Act of 1992
(12 U.S.C. 4516) is amended--
(1) by striking subsection (a) and inserting the following
new subsection:
``(a) Annual Assessments.--
``(1) Director.--The Director shall establish and collect
from the enterprises annual assessments in an amount not
exceeding the amount sufficient to provide for reasonable costs
and expenses of the Director, with respect to regulation and
supervision of the enterprises, including the expenses of any
examinations under section 1317 and the expenses of obtaining
any reviews and credit assessments under subsection section
1319.
``(2) Secretary of HUD.--The Secretary of Housing and Urban
Development shall establish and collect from the enterprises
annual assessments in an amount not exceeding the amount
sufficient to provide for reasonable costs and expenses of the
Department of Housing and Urban Development in carrying out the
responsibilities of the Secretary of Housing and Urban
Development under this subtitle, the Federal National Mortgage
Association Charter Act, and the Federal Home Loan Mortgage
Corporation Act.'';
(2) in subsection (b)--
(A) in paragraph (1)--
(i) by inserting ``and to the Secretary of
Housing and Urban Development'' after
``Director'';
(ii) by inserting ``paragraph (1) and (2),
respectively, of'' before ``subsection (a)'';
and
(iii) by inserting ``under such paragraph''
after ``total annual assessment''; and
(B) in paragraph (2)--
(i) by striking ``The annual assessment''
and inserting ``Each of the annual assessments
pursuant to paragraphs (1) and (2) of
subsection (a)''; and
(ii) by realigning paragraph (2) two ems
from the left margin, so as to align the left
margin of such paragraph with the left margins
of paragraphs (1) and (3);
(3) in subsection (c)--
(A) by inserting ``for an assessment under
subsection (a)(1) that are'' after ``The semiannual
payments''; and
(B) by adding at the end the following new
sentence: ``The Director may adjust the amounts of any
semiannual assessments for an assessment under
subsection (a)(1) that are to be paid pursuant to
subsection (b) by an enterprise, as necessary in the
discretion of the Director, to ensure that the costs of
enforcement activities under subtitles B and C for an
enterprise are borne only by that enterprise.'';
(4) in subsection (d)--
(A) by inserting ``by the Director or by the
Secretary of Housing and Urban Development'' before
``from an enterprise''; and
(B) by inserting ``by the Director or by the
Secretary of Housing and Urban Development, as
applicable,'' before ``for the following year'';
(5) in subsection (f), by striking the last sentence and
inserting the following new sentence: ``Notwithstanding any
other provision of law, any assessments collected by the
Director pursuant to this section shall be deposited in the
Fund in an account for the Director and any amounts collected
by the Secretary of Housing and Urban Development shall be
deposited in the Fund in an account for such Secretary. Any
amounts in the Fund are hereby made available, without fiscal
year limitation, to the Director (to the extent of amounts in
the Director's account) and to the Secretary of Housing and
Urban Development (to the extent of amounts in the Secretary's
account) for carrying out the supervisory and regulatory
responsibilities of the Director and the Secretary,
respectively, with respect to the enterprises, including any
necessary administrative and nonadministrative expenses of the
Director and Secretary, respectively, in carrying out the
purposes of this title, the Federal National Mortgage
Association Charter Act, and the Federal Home Loan Mortgage
Corporation Act.''; and
(6) in subsection (g)--
(A) by striking paragraphs (1) and (2) and
inserting the following new paragraphs:
``(1) Financial operating plans and forecasts.--Before the
beginning of each fiscal year--
``(A) the Director shall submit a copy of the
financial operating plans and forecasts for the
Director, with respect to regulation and supervision of
the enterprises, to the Director of the Office of
Management and Budget; and
``(B) the Secretary of Housing and Urban
Development shall submit, to the Director, a copy of
the financial operating plans and forecasts for the
Department of Housing and Urban Development, with
respect to responsibilities and activities of the
Secretary under this title.
``(2) Reports of operations.--As soon as practicable after
the end of each fiscal year and each quarter thereof--
``(A) the Director shall submit a copy of the
report of the results of the operations of the
Director, with respect to regulation and supervision of
the enterprises, during such period to the Director of
the Office of Management and Budget; and
``(B) the Secretary of Housing and Urban
Development shall submit, to the Director, a report of
the results of the operations of the Department of
Housing and Urban Development, with respect to
responsibilities and activities of the Secretary under
this title.''; and
(B) in paragraph (3)--
(i) by striking ``(A)'';
(ii) by striking ``, and (B)'' and
inserting the following: ``. The annual plans,
forecasts, and reports required under
paragraphs (1)(B) and (2)(B) shall be
included''; and
(iii) by inserting ``of Housing and Urban
Development'' before the period at the end.
SEC. 107. AUTHORITY OF SECRETARY OF HUD FOR NEW ACTIVITIES, HOUSING
INFORMATION, AND HOUSING GOALS.
(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 ``The Secretary''.
(c) Retention of Authority To Establish and Enforce Housing
Goals.--Part 2 of subtitle A of the Housing and Community Development
Act of 1992 is amended--
(1) by inserting ``of Housing and Urban Development (in
this subpart referred to as the `Secretary')'' after ``The
Secretary'', each place such term appears in--
(A) the first sentence of section 1331(a) (12
U.S.C. 4561(a)); and
(B) section 1341(a) (12 U.S.C. 4581(a));
(2) in section 1332 (12 U.S.C. 4562), by striking
subsection (d);
(3) in section 1333 (12 U.S.C. 4563), by striking
subsection (d);
(4) in section 1334 (12 U.S.C. 4564), by striking
subsection (d);
(5) in section 1336 (12 U.S.C. 4566)--
(A) in subsection (b)(3)(C), by inserting ``the
Director,'' after ``notice to the enterprise,''; and
(B) in subsection (c)(5), by inserting ``, and to
the Director,'' after ``housing plan'';
(6) by striking sections 1337 and 1338 (12 U.S.C. 4567,
4562 note);
(7) in section 1341(b)(1) (12 U.S.C. 4581(b)(1)), by
inserting after the period at the end the following new
sentence: ``Immediately upon issuing and serving a notice of
charges under this section, the Secretary shall submit a copy
of such notice to the Director.'';
(8) in section 1345 (12 U.S.C. 4585)--
(A) in subsection (c)(1)(A), by inserting ``and the
Director'' after ``enterprise''; and
(B) in subsection (d), by inserting ``, upon
notification to the Director,'' after ``1343''; and
(9) in section 1346(a) (12 U.S.C. 4586(a)), in the matter
preceding paragraph (1), by inserting ``and to the Director''
after ``the public''.
(d) Retention of Annual Housing Report Responsibility.--Section
1324 of the Housing and Community Development Act of 1992 (12 U.S.C.
4544) is amended--
(1) by inserting ``of Housing and Urban Development'' after
``the Secretary'' each place such term appears; and
(2) in subsection (a), by striking ``, as part of the
annual report under section 1328(a) of this title,''.
(e) Authority of Secretary To Enforce Notices and Orders.--Section
1344 of the Housing and Community Development Act of 1992 (12 U.S.C.
4584) is amended by striking subsection (a) and inserting the following
new subsection:
``(a) Enforcement.--The Secretary of Housing and Urban Development
may, in the discretion of such Secretary, apply to the United States
District Court for the District of Columbia, or the United States
district court within the jurisdiction of which the headquarters of the
enterprise is located, for the enforcement of any effective and
outstanding notice or order issued under section 1341 or 1345, or
request that the Attorney General of the United States bring such an
action. Such court shall have jurisdiction and power to order and
require compliance with such notice or order.''.
(f) Regulatory Authority.--Subpart A of part 2 of subtitle A of
title XIII of the Housing and Community Development Act of 1992 (12
U.S.C. 4541 et seq.) is amended by adding at the end the following new
section:
``SEC. 1329. AUTHORITY OF SECRETARY OF HUD TO ISSUE REGULATIONS.
``The Secretary of Housing and Urban Development shall issue any
regulations as are necessary to carry out the responsibilities of the
Secretary under this subtitle.''.
SEC. 108. PRIOR APPROVAL OF SECRETARY OF HUD 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 Secretary of Housing and Urban Development
shall have the authority to approve all new activities, and to review
all ongoing activities, of an enterprise to ensure compliance with the
Federal National Mortgage Association Charter Act or the Federal Home
Loan Mortgage Corporation Act, as applicable.
``(b) Requirement for Prior Approval.--An enterprise may not
commence any new activity before obtaining the approval of the
Secretary of Housing and Urban Development for the new activity, in
accordance with this section.
``(c) Standard for Approval.--The Secretary of Housing and Urban
Development may approve a new activity of an enterprise 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; and
``(B) with respect to the Federal Home Loan
Mortgage Corporation, under the Federal Home Loan
Mortgage Corporation Act or other Federal law;
``(2) the Secretary of Housing and Urban Development
determines, after consultation with the Director, that the
enterprise can conduct the new activity in a safe and sound
manner; and
``(3) the Secretary of Housing and Urban Development
determines that the new activity is in the public interest.
``(d) Procedure for Approval.--The Secretary of Housing and Urban
Development shall, by regulation, establish procedures for the
enterprises to obtain the approval of the Secretary of Housing and
Urban Development for purposes of subsection (b).''.
(b) Definition of New Activity.--Paragraph (13) of section 1303 of
the Housing and Community Development Act of 1992 (12 U.S.C. 4502(13))
is amended to read as follows:
``(13) New activity.--The term `new activity' means, with
respect to the enterprises, any program, activity, business
process, or investment that directly or indirectly provides
financing or other services related to conventional mortgages
(including purchasing, servicing, selling, and lending on the
security of such mortgages) that--
``(A) is significantly different from programs,
activities, business processes, or investments that (i)
have been approved under this Act, or (ii) were
approved or engaged in by an enterprise before the date
of the enactment of the Housing and Community
Development Act of 1992; or
``(B) 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.''.
(c) Conforming Amendments.--
(1) Fannie mae.--Section 302(b)(6) of the Federal National
Mortgage Association Charter Act (12 U.S.C. 1717(b)(6)) is
amended by striking ``program'' and inserting ``activity''.
(2) Freddie mac.--Section 305(c) of the Federal Home Loan
Mortgage Corporation Act (12 U.S.C. 1454(c)) is amended by
striking ``program'' and inserting ``activity''.
(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. 109. LIMITATION ON NONMISSION-RELATED ASSETS.
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.
``(a) In General.--The Secretary of Housing and Urban Development
shall, by regulation, limit the nonmission-related assets that an
enterprise may hold at any time. The Secretary of Housing and Urban
Development shall define the term `nonmission-related asset' for
purposes of this section.
``(b) Rule of Construction.--Subsection (a) may not be construed to
authorize an enterprise to engage in any new activity (as such term is
defined in section 1303) relating to any nonmission-related asset
without obtaining the prior approval of the Secretary of Housing and
Urban Development in accordance with section 1322.''.
SEC. 110. 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 $275,000 for a mortgage secured by
a single-family residence, $351,950 for a mortgage secured by a 2-
family residence, $425,400 for a mortgage secured by a 3-family
residence, and $528,700 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 2002, subject to the limitations
in this paragraph. Each adjustment shall be made by adding to or
subtracting from each such amount (as it may have been previously
adjusted) a percentage thereof equal to the percentage increase or
decrease during the 12-month period ending with the previous October in
the housing price index maintained by the Director of the Office of
Housing Finance Supervision (pursuant to section 1321 of the Housing
and Community Development Act of 1992 (12 U.S.C. 4541)).''.
(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 $275,000 for a mortgage
secured by a single-family residence, $351,950 for a mortgage secured
by a 2-family residence, $425,400 for a mortgage secured by a 3-family
residence, and $528,700 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 2002, subject to the limitations
in this paragraph. Each adjustment shall be made by adding to or
subtracting from each such amount (as it may have been previously
adjusted) a percentage thereof equal to the percentage increase or
decrease during the 12-month period ending with the previous October in
the housing price index maintained by the Director of the Office of
Housing Finance Supervision (pursuant to section 1321 of the Housing
and Community Development Act of 1992 (12 U.S.C. 4541)).''.
(c) Housing Price Index.--Subpart A of part 2 of subtitle A of
title XIII of the Housing and Community Development Act of 1992 (as
amended by the preceding provisions of this Act) is amended by
inserting before section 1322 (12 U.S.C. 4542) the following new
section:
``SEC. 1321. HOUSING PRICE INDEX.
``The Director shall establish and maintain a method of assessing
the national average 1-family house price for use for adjusting the
conforming loan limitations of the enterprises (as such term is defined
in section 1303 of Federal Housing Enterprises Financial Safety and
Soundness Act of 1992). In establishing such method, the Director shall
take into consideration the monthly survey of all major lenders
conducted by the Federal Housing Finance Board to determine the
national average 1-family house price, the House Price Index maintained
by the Office of Federal Housing Enterprise Oversight of the Department
of Housing and Urban Development before the effective date of the
Secondary Mortgage Market Enterprises Regulatory Improvement Act, any
appropriate house price indexes of the Bureau of the Census of the
Department of Commerce, and any other indexes or measures that the
Director considers appropriate.''.
SEC. 111. 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 Director shall, by
regulation, require each enterprise to disclose to the public, on not
less than an annual basis, such financial, business, and other
information that the Director determines would be in the public
interest.''.
SEC. 112. REVIEWS OF ENTERPRISES.
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) in the section heading, by striking ``by rating
organization'';
(2) by inserting after ``any entity'' the following: ``that
the Director considers appropriate, including an entity'';
(3) by inserting ``(a) Authority To Provide for Reviews.--
'' before ``The''; and
(4) by adding at the end the following new subsection:
``(b) Biennial Determination of Credit Rating.--
``(1) In general.--On a biennial basis, the Director 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 for the purpose of determining the level of risk
that the enterprise 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)); and
``(D) section 306(h)(2) of the Federal Home Loan
Mortgage Corporation Act (12 U.S.C. 1455(h)(2)).
``(2) Credit rating.--The assessment shall include
assigning a credit rating for each enterprise 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 Director under section 1319B(a).''.
SEC. 113. 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 Director considers appropriate,''
after ``subparagraph (C),'';
(2) in subsection (b)(1), by inserting after the period at
the end the following: ``Notwithstanding subsection (a), the
Director may, in the sole discretion of the Director, make any
assumptions that the Director considers appropriate regarding
interest rates, home prices, and new business.''; and
(3) in subsection (c)(2), by inserting ``or such other
percentage as the Director considers appropriate'' before the
period at the end.
SEC. 114. MINIMUM AND CRITICAL CAPITAL LEVELS.
(a) Minimum Capital Level.--Section 1362 of the Housing and
Community Development Act of 1992 (12 U.S.C. 4612) is amended--
(1) by striking subsection (b);
(2) by striking ``(a) In General.--''; and
(3) in the matter preceding paragraph (1), by inserting
before ``the sum of'' the following: ``the amount established
by the Director, by regulation or order, as such amount may be
adjusted from time-to-time by the Director to achieve the
purposes of this title, that is not less than''.
(b) Critical Capital Level.--Section 1363 of the Housing and
Community Development Act of 1992 (12 U.S.C. 4613) is amended, in the
matter preceding paragraph (1), by inserting before ``the sum of'' the
following: ``the amount established by the Director, by regulation or
order, as such amount may be adjusted from time-to-time by the Director
to achieve the purposes of this title, that is not less than''.
SEC. 115. REQUIREMENTS TO ENHANCE CAPITAL STRENGTH, DISCLOSURE, AND
MARKET DISCIPLINE.
Section 1361 of the Housing and Community Development Act of 1992
(12 U.S.C. 4611) is amended by adding at the end the following new
subsection:
``(g) Required Implementation of Agreement.--The Director shall, by
regulation, require each enterprise--
``(1) to issue subordinated debt of such type and in such
amount as the Director considers necessary;
``(2) to maintain appropriate levels of liquidity;
``(3) to obtain and disclose an annual credit rating;
``(4) to publicly disclose interest rate risk; and
``(5) to publicly disclose credit risk.
SEC. 116. DEFINITIONS.
Section 1303 of the Housing and Community Development Act of 1992
(12 U.S.C. 4502) is amended--
(1) in paragraph (5), by striking ``Federal Housing
Enterprise Oversight of the Department of Housing and Urban
Development'' and inserting ``Housing Finance Supervision'';
(2) in paragraphs (8), (9), (10), and (19), by inserting
``of Housing and Urban Development'' after ``Secretary'' each
place such term appears;
(3) in paragraph (14), by striking ``Federal Housing
Enterprise Oversight of the Department of Housing and Urban
Development'' and inserting ``Housing Finance Supervision'';
(4) by striking paragraph (15);
(5) by redesignating paragraphs (7) through (14) (as
amended by the preceding provisions of this Act) as paragraphs
(8) through (15), respectively; and
(6) by inserting after paragraph (6) the following new
paragraph:
``(7) Enterprise-affiliated party.--The term `enterprise-
affiliated party' means--
``(A) any director, officer, employee, or
controlling stockholder of, or agent for, an
enterprise;
``(B) any shareholder, consultant, joint venture
partner, and any other person as determined by the
Director (by regulation or case-by-case) who
participates in the conduct of the affairs of an
enterprise; and
``(C) any independent contractor (including any
attorney, appraiser, or accountant) who knowingly or
recklessly participates in--
``(i) any violation of any law or
regulation;
``(ii) any breach of fiduciary duty; or
``(iii) any unsafe or unsound practice,
which caused or is likely to cause more than a minimal
financial loss to, or a significant adverse effect on,
the enterprise.''.
Subtitle B--Prompt Corrective Action
SEC. 131. CAPITAL CLASSIFICATIONS.
Section 1364 of the Housing and Community Development Act of 1992
(12 U.S.C. 4614) is amended--
(1) by striking subsection (b) and inserting the following
new subsection:
``(b) Discretionary Classification.--
``(1) Grounds for reclassification.--The Director may
reclassify an enterprise under paragraph (2) if--
``(A) at any time, the Director determines in
writing that an enterprise is engaging in conduct that
could result in a rapid depletion of core capital or
that the value of the property subject to mortgages
held or securitized by the enterprise has decreased
significantly;
``(B) after notice and an opportunity for hearing,
the Director determines that an enterprise is in an
unsafe or unsound condition; or
``(C) pursuant to section 1371(b), the Director
deems an enterprise to be engaging in an unsafe or
unsound practice.
``(2) Reclassification.--In addition to any other action
authorized under this title, including the reclassification of
an enterprise for any reason not specified in this subsection,
if the Director takes any action described in paragraph (1) the
Director may classify an enterprise--
``(A) as undercapitalized, if the enterprise is
otherwise classified as adequately capitalized;
``(B) as significantly undercapitalized, if the
enterprise is otherwise classified as undercapitalized;
and
``(C) as critically undercapitalized, if the
enterprise is otherwise classified as significantly
undercapitalized.'';
(2) by redesignating subsection (d) as subsection (e); and
(3) by inserting after subsection (c) the following new
subsection:
``(d) Restriction on Capital Distributions.--
``(1) In general.--An enterprise shall make no capital
distribution if, after making the distribution, the enterprise
would be undercapitalized.
``(2) Exception.--Notwithstanding paragraph (1), the
Director may permit an enterprise to repurchase, redeem,
retire, or otherwise acquire shares or ownership interests if
the repurchase, redemption, retirement, or other acquisition--
``(A) is made in connection with the issuance of
additional shares or obligations of the enterprise in
at least an equivalent amount; and
``(B) will reduce the financial obligations of the
enterprise or otherwise improve the financial condition
of the enterprise.''.
SEC. 132. SUPERVISORY ACTIONS APPLICABLE TO UNDERCAPITALIZED
ENTERPRISES.
(a) 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''.
(b) Supervisory Actions.--Section 1365 of the Housing and Community
Development Act of 1992 (12 U.S.C. 4615) is amended--
(1) in subsection (a)--
(A) by redesignating paragraphs (1) and (2) as
paragraphs (2) and (3), respectively;
(B) by inserting before paragraph (2) the following
paragraph:
``(1) Required monitoring.--The Director shall--
``(A) closely monitor the condition of any
undercapitalized enterprise;
``(B) closely monitor compliance with the capital
restoration plan, restrictions, and requirements
imposed under this section; and
``(C) periodically review the plan, restrictions,
and requirements applicable to the undercapitalized
enterprise to determine whether the plan, restrictions,
and requirements are achieving the purpose of this
section.''; and
(C) by inserting at the end the following new
paragraphs:
``(4) Restriction of asset growth.--An undercapitalized
enterprise shall not permit its average total assets during any
calendar quarter to exceed its average total assets during the
preceding calendar quarter unless--
``(A) the Board has accepted the enterprise's
capital restoration plan;
``(B) any increase in total assets is consistent
with the plan; and
``(C) the enterprise's ratio of tangible equity to
assets increases during the calendar quarter at a rate
sufficient to enable the enterprise to become
adequately capitalized within a reasonable time.
``(5) Prior approval of acquisitions and issuance of new
products.--An undercapitalized enterprise shall not, directly
or indirectly, acquire any interest in any entity or issue a
new product unless--
``(A) the Director has accepted the enterprise's
capital restoration plan, the enterprise is
implementing the plan, and the Director determines that
the proposed action is consistent with and will further
the achievement of the plan; or
``(B) the Director determines that the proposed
action will further the purpose of this section.''; and
(2) in the subsection heading for subsection (b), by
striking ``From Undercapitalized to Significantly
Undercapitalized'';
(3) by redesignating subsection (c) (as amended by
subsection (a) of this section) as subsection (d); and
(4) by inserting after subsection (b) the following new
subsection:
``(c) Other Discretionary Safeguards.--The Director may take, with
respect to an undercapitalized enterprise, any of the actions
authorized to be taken under section 1366 with respect to a
significantly undercapitalized enterprise, if the Director determines
that such actions are necessary to carry out the purpose of this
subtitle.''.
SEC. 133. SUPERVISORY ACTIONS APPLICABLE TO SIGNIFICANTLY
UNDERCAPITALIZED ENTERPRISES.
Section 1366 of the Housing and Community Development Act of 1992
(12 U.S.C. 4616) is amended--
(1) in subsection (b)--
(A) in the subsection heading, by striking
``Discretionary Supervisory Actions'' and inserting
``Specific Actions'';
(B) in the matter preceding paragraph (1), by
striking ``may, at any time, take any'' and inserting
``shall carry out this section by taking, at any time,
1 or more'';
(C) by redesignating paragraphs (5) and (6) as
paragraphs (6) and (7), respectively;
(D) by inserting after paragraph (4) the following
new paragraph:
``(5) Improvement of management.--Take one or more of the
following actions:
``(A) New election of board.--Order a new election
for the board of directors of the enterprise.
``(B) Dismissal of directors or executive
officers.--Require the enterprise to dismiss from
office any director or executive officer who had held
office for more than 180 days immediately before the
enterprise became undercapitalized. Dismissal under
this subparagraph shall not be construed to be a
removal pursuant to the Director's enforcement powers
provided in section 1377.
``(C) Employ qualified executive officers.--Require
the enterprise to employ qualified executive officers
(who, if the Director so specifies, shall be subject to
approval by the Director).''; and
(E) by inserting at the end the following new
paragraph:
``(8) Other action.--Require the enterprise to take any
other action that the Director determines will better carry out
the purpose of this section than any of the actions specified
in this paragraph.'';
(2) by redesignating subsection (c) as subsection (d); and
(3) by inserting after subsection (b) the following new
subsection:
``(c) Restriction on Compensation of Executive Officers.--An
enterprise that is classified as significantly undercapitalized may
not, without prior written approval by the Director--
``(A) pay any bonus to any executive officer; or
``(B) provide compensation to any executive officer
at a rate exceeding that officer's average rate of
compensation (excluding bonuses, stock options, and
profit sharing) during the 12 calendar months preceding
the calendar month in which the enterprise became
undercapitalized.''.
SEC. 134. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED ENTERPRISES.
Section 1368 of the Housing and Community Development Act of 1992
(12 U.S.C. 4618) is amended to read as follows:
``SEC. 1368. APPOINTMENT OF RECEIVERS.
``(a) Appointment.--
``(1) Authority.--Upon a determination 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 Director shall by regulation
establish, the Director 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 Director takes action pursuant
to this subsection, the Director 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 Director shall
provide written notice to the enterprise, the Committee on
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 Director intends to appoint as a receiver.
``(3) Qualifications.--The receiver shall be--
``(A) the Director 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 Director may issue, and notwithstanding the second
sentences of paragraphs (1) and (2)(B) of section 302(a) of the Federal
National Mortgage Association Charter Act (12 U.S.C. 1717(a)) and
section 303(c)(2) of the Federal Home Loan Mortgage Corporation Act (12
U.S.C. 1452(c)(2)).
``(d) Replacement, Powers, Liability Protection.--The provisions of
subsections (c) and (d) of section 1369, section 1369A, and section
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 Director 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), as in
effect at that time, with respect to a insured depository institution
when acting as a receiver under such section.''.
Subtitle C--Enforcement Actions
SEC. 151. CEASE-AND-DESIST PROCEEDINGS.
Section 1371 of the Housing and Community Development Act of 1992
(12 U.S.C. 4631) is amended--
(1) by striking subsections (a) and (b) and inserting the
following new subsections:
``(a) Issuance for Unsafe or Unsound Practices and Violations of
Rules or Laws.--If, in the opinion of the Director, an enterprise or
any enterprise-affiliated party is engaging or has engaged, or the
Director has reasonable cause to believe that the enterprise or any
enterprise-affiliated party is about to engage, in an unsafe or unsound
practice in conducting the business of the enterprise or is violating
or has violated, or the Director has reasonable cause to believe that
the enterprise or any enterprise-affiliated party is about to violate,
a law, rule, or regulation, or any condition imposed in writing by the
Director in connection with the granting of any application or other
request by the enterprise or any written agreement entered into with
the Director, the Director may issue and serve upon the enterprise or
such party a notice of charges in respect thereof. The Director may not
enforce compliance with any housing goal established under subpart B of
part 2 of subtitle A of this title, with section 1336 or 1337 of this
title, with subsection (m) or (n) of section 309 of the Federal
National Mortgage Association Charter Act (12 U.S.C. 1723a(m), (n)), or
with subsection (e) or (f) of section 307 of the Federal Home Loan
Mortgage Corporation Act (12 U.S.C. 1456(e), (f)).
``(b) Issuance for Unsatisfactory Rating.--If an enterprise
receives, in its most recent report of examination, a less-than-
satisfactory rating for asset quality, management, earnings, or
liquidity, the Director may (if the deficiency is not corrected) deem
the enterprise to be engaging in an unsafe or unsound practice for
purposes of this subsection.''; and
(2) in subsection (c)(2), by striking ``or director'' and
inserting ``director, or enterprise-affiliated party''.
SEC. 152. TEMPORARY CEASE-AND-DESIST PROCEEDINGS.
Section 1372 of the Housing and Community Development Act of 1992
(12 U.S.C. 4632) is amended--
(1) by striking subsection (a) and inserting the following
new subsection:
``(a) Grounds for Issuance.--Whenever the Director determines that
the violation or threatened violation or the unsafe or unsound practice
or practices specified in the notice of charges served upon the
enterprise or any enterprise-affiliated party pursuant to section
1371(a), or the continuation thereof, is likely to cause insolvency or
significant dissipation of assets or earnings of the enterprise, or is
likely to weaken the condition of the enterprise prior to the
completion of the proceedings conducted pursuant to sections 1371 and
1373, the Director may issue a temporary order requiring the enterprise
or such party to cease and desist from any such violation or practice
and to take affirmative action to prevent or remedy such insolvency,
dissipation, condition, or prejudice pending completion of such
proceedings. Such order may include any requirement authorized under
subsection 1371(d).'';
(2) in subsection (b), by striking ``or director'' and
inserting ``director, or enterprise-affiliated party'';
(3) in subsection (d), striking ``or director'' and
inserting ``director, or enterprise-affiliated party''; and
(4) by striking subsection (e) and in inserting the
following new subsection:
``(e) Enforcement.--In the case of violation or threatened
violation of, or failure to obey, a temporary cease-and-desist order
issued pursuant to this section, the Director may apply to the United
States District Court for the District of Columbia or the United States
district court within the jurisdiction of which the headquarters of the
enterprise is located, for an injunction to enforce such order, and, if
the court determines that there has been such violation or threatened
violation or failure to obey, it shall be the duty of the court to
issue such injunction.''.
SEC. 153. REMOVAL AND PROHIBITION AUTHORITY.
(a) In General.--Subtitle C of title XIII of the Housing and
Community Development Act of 1992 is amended--
(1) by redesignating sections 1377 through 1379B (12 U.S.C.
4637-41) as sections 1379 through 1379D, respectively; and
(2) by inserting after section 1376 (12 U.S.C. 4636) the
following new section:
``SEC. 1377. REMOVAL AND PROHIBITION AUTHORITY.
``(a) Authority To Issue Order.--Whenever the Director determines
that--
``(1) any enterprise-affiliated party has, directly or
indirectly--
``(A) violated--
``(i) any law or regulation;
``(ii) any cease-and-desist order which has
become final;
``(iii) any condition imposed in writing by
the Director in connection with the grant of
any application or other request by such
enterprise; or
``(iv) any written agreement between such
enterprise and the Director;
``(B) engaged or participated in any unsafe or
unsound practice in connection with any enterprise; or
``(C) committed or engaged in any act, omission, or
practice which constitutes a breach of such party's
fiduciary duty;
``(2) by reason of the violation, practice, or breach
described in any subparagraph of paragraph (1)--
``(A) such enterprise has suffered or will probably
suffer financial loss or other damage; or
``(B) such party has received financial gain or
other benefit by reason of such violation, practice, or
breach; and
``(3) such violation, practice, or breach--
``(A) involves personal dishonesty on the part of
such party; or
``(B) demonstrates willful or continuing disregard
by such party for the safety or soundness of such
enterprise,
the Director may serve upon such party a written notice of the
Director's intention to remove such party from office or to prohibit
any further participation by such party, in any manner, in the conduct
of the affairs of any enterprise.
``(b) Suspension Order.--
``(1) Suspension or prohibition authority.--If the Director
serves written notice under subsection (a) to any enterprise-
affiliated party of the Director's intention to issue an order
under such subsection, the Director may suspend such party from
office or prohibit such party from further participation in any
manner in the conduct of the affairs of the enterprise, if the
Director--
``(A) determines that such action is necessary for
the protection of the enterprise; and
``(B) serves such party with written notice of the
suspension order.
``(2) Effective period.--Any suspension order issued under
subsection (a)--
``(A) shall become effective upon service; and
``(B) unless a court issues a stay of such order
under subsection (g) of this section, shall remain in
effect and enforceable until--
``(i) the date the Director dismisses the
charges contained in the notice served under
subsection (a) with respect to such party; or
``(ii) the effective date of an order
issued by the Director to such party under
subsection (a).
``(3) Copy of order.--If the Director issues a suspension
order under subsection (a) to any enterprise-affiliated party,
the Director shall serve a copy of such order on any enterprise
with which such party is affiliated at the time such order is
issued.
``(c) Notice, Hearing, and Order.--A notice of intention to remove
an enterprise-affiliated party from office or to prohibit such party
from participating in the conduct of the affairs of an enterprise shall
contain a statement of the facts constituting grounds for such action,
and shall fix a time and place at which a hearing will be held on such
action. Such hearing shall be fixed for a date not earlier than 30 days
nor later than 60 days after the date of service of such notice, unless
an earlier or a later date is set by the Director at the request of (1)
such party, and for good cause shown, or (2) the Attorney General of
the United States. Unless such party shall appear at the hearing in
person or by a duly authorized representative, such party shall be
deemed to have consented to the issuance of an order of such removal or
prohibition. In the event of such consent, or if upon the record made
at any such hearing the Director shall find that any of the grounds
specified in such notice have been established, the Director may issue
such orders of suspension or removal from office, or prohibition from
participation in the conduct of the affairs of the enterprise, as it
may deem appropriate. Any such order shall become effective at the
expiration of 30 days after service upon such enterprise and such party
(except in the case of an order issued upon consent, which shall become
effective at the time specified therein). Such order shall remain
effective and enforceable except to such extent as it is stayed,
modified, terminated, or set aside by action of the Director or a
reviewing court.
``(d) Prohibition of Certain Specific Activities.--Any person
subject to an order issued under this section shall not--
``(1) participate in any manner in the conduct of the
affairs of any enterprise;
``(2) solicit, procure, transfer, attempt to transfer,
vote, or attempt to vote any proxy, consent, or authorization
with respect to any voting rights in any enterprise;
``(3) violate any voting agreement previously approved by
the Director; or
``(4) vote for a director, or serve or act as an
enterprise-affiliated party.
``(e) Industry-Wide Prohibition.--
``(1) In general.--Except as provided in subparagraph (2),
any person who, pursuant to an order issued under subsection
(h), has been removed or suspended from office in an enterprise
or prohibited from participating in the conduct of the affairs of an
enterprise may not, while such order is in effect, continue or commence
to hold any office in, or participate in any manner in the conduct of
the affairs of any enterprise.
``(2) Exception if director provides written consent.--If,
on or after the date an order is issued under this section
which removes or suspends from office any enterprise-affiliated
party or prohibits such party from participating in the conduct
of the affairs of an enterprise, such party receives the
written consent of the Director, the order shall, to the extent
of such consent, cease to apply to such party with respect to
the enterprise described in the written consent. If the
Director grants such a written consent, it shall publicly
disclose such consent.
``(3) Violation of paragraph (1) treated as violation of
order.--Any violation of paragraph (1) by any person who is
subject to an order described in such subsection shall be
treated as a violation of the order.
``(f) Applicability.--This section shall only apply to a person who
is an individual, unless the Director specifically finds that it should
apply to a corporation, firm, or other business enterprise.
``(g) Stay of Suspension and Prohibition of Enterprise-Affiliated
Party.--Within 10 days after any enterprise-affiliated party has been
suspended from office and/or prohibited from participation in the
conduct of the affairs of an enterprise under this section, such party
may apply to the United States District Court for the District of
Columbia, or the United States district court for the judicial district
in which the headquarters of the enterprise is located, for a stay of
such suspension and/or prohibition pending the completion of the
administrative proceedings pursuant to the notice served upon such
party under this section, and such court shall have jurisdiction to
stay such suspension and/or prohibition.
``(h) Suspension or Removal of Enterprise-Affiliated Party Charged
With Felony.--
``(1) Suspension or prohibition.--
``(A) In general.--Whenever any enterprise-
affiliated party is charged in any information,
indictment, or complaint, with the commission of or
participation in a crime involving dishonesty or breach
of trust which is punishable by imprisonment for a term
exceeding one year under State or Federal law, the
Director may, if continued service or participation by
such party may pose a threat to the enterprise or
impair public confidence in the enterprise, by written
notice served upon such party, suspend such party from
office or prohibit such party from further
participation in any manner in the conduct of the
affairs of any enterprise.
``(B) Provisions applicable to notice.--
``(i) Copy.--A copy of any notice under
paragraph (1)(A) shall also be served upon the
enterprise.
``(ii) Effective period.--A suspension or
prohibition under subparagraph (A) shall remain
in effect until the information, indictment, or
complaint referred to in such subparagraph is
finally disposed of or until terminated by the
Director.
``(2) Removal or prohibition.--
``(A) In general.--If a judgment of conviction or
an agreement to enter a pretrial diversion or other
similar program is entered against an enterprise-
affiliated party in connection with a crime described
in paragraph (1)(A), at such time as such judgment is
not subject to further appellate review, the Director
may, if continued service or participation by such
party may pose a threat to the enterprise or impair
public confidence in the enterprise, issue and serve
upon such party an order removing such party from
office or prohibiting such party from further
participation in any manner in the conduct of the
affairs of the enterprise without the prior written
consent of the Director.
``(B) Provisions applicable to order.--
``(i) Copy.--A copy of any order under
paragraph (2)(A) shall also be served upon the
enterprise, whereupon the enterprise-affiliated
party who is subject to the order (if a
director or an officer) shall cease to be a
director or officer of such enterprise.
``(ii) Effect of acquittal.--A finding of
not guilty or other disposition of the charge
shall not preclude the Director from
instituting proceedings after such finding or
disposition to remove such party from office or
to prohibit further participation in enterprise
affairs pursuant to subsections (a), (d), or
(e) of this section.
``(iii) Effective period.--Any notice of
suspension or order of removal issued under
this subsection shall remain effective and
outstanding until the completion of any hearing
or appeal authorized under paragraph (4) unless
terminated by the Director.
``(3) Authority of remaining board members.--If at any
time, because of the suspension of one or more directors
pursuant to this section, there shall be on the board of
directors of an enterprise less than a quorum of directors not
so suspended, all powers and functions vested in or exercisable
by such board shall vest in and be exercisable by the director
or directors on the board not so suspended, until such time as
there shall be a quorum of the board of directors. In the event
all of the directors of an enterprise are suspended pursuant to
this section, the Director shall appoint persons to serve
temporarily as directors in their place and stead pending the
termination of such suspensions, or until such time as those
who have been suspended, cease to be directors of the
enterprise and their respective successors take office.
``(4) Hearing regarding continued participation.--Within 30
days from service of any notice of suspension or order of
removal issued pursuant to paragraph (1) or (2) of this
subsection, the enterprise-affiliated party concerned may
request in writing an opportunity to appear before the Director to show
that the continued service to or participation in the conduct of the
affairs of the enterprise by such party does not, or is not likely to,
pose a threat to the interests of the enterprise or threaten to impair
public confidence in the enterprise. Upon receipt of any such request,
the Director shall fix a time (not more than 30 days after receipt of
such request, unless extended at the request of such party) and place
at which such party may appear, personally or through counsel, before
one or more members of the Director or designated employees of the
Director to submit written materials (or, at the discretion of the
Director, oral testimony) and oral argument. Within 60 days of such
hearing, the Director shall notify such party whether the suspension or
prohibition from participation in any manner in the conduct of the
affairs of the enterprise will be continued, terminated, or otherwise
modified, or whether the order removing such party from office or
prohibiting such party from further participation in any manner in the
conduct of the affairs of the enterprise will be rescinded or otherwise
modified. Such notification shall contain a statement of the basis for
the Director's decision, if adverse to such party. The Director is
authorized to prescribe such rules as may be necessary to effectuate
the purposes of this subsection.
``(i) Hearings and Judicial Review.--
``(1) Venue and procedure.--Any hearing provided for in
this section shall be held in the District of Columbia or in
the Federal judicial district in which the headquarters of the
enterprise is located, unless the party afforded the hearing
consents to another place, and shall be conducted in accordance
with the provisions of chapter 5 of title 5, United States
Code. After such hearing, and within 90 days after the Director
has notified the parties that the case has been submitted to it
for final decision, it shall render its decision (which shall
include findings of fact upon which its decision is predicated)
and shall issue and serve upon each party to the proceeding an
order or orders consistent with the provisions of this section.
Judicial review of any such order shall be exclusively as
provided in this subsection. Unless a petition for review is
timely filed in a court of appeals of the United States, as
provided in paragraph (2), and thereafter until the record in
the proceeding has been filed as so provided, the Director may
at any time, upon such notice and in such manner as it shall
deem proper, modify, terminate, or set aside any such order.
Upon such filing of the record, the Director may modify,
terminate, or set aside any such order with permission of the
court.
``(2) Review of order.--Any party to any proceeding under
paragraph (1) may obtain a review of any order served pursuant
to paragraph (1) (other than an order issued with the consent
of the enterprise or the enterprise-affiliated party concerned,
or an order issued under subsection (h) of this section) by the
filing in the United States Court of Appeals for the District
of Columbia Circuit or court of appeals of the United States
for the circuit in which the headquarters of the enterprise is
located, within 30 days after the date of service of such
order, a written petition praying that the order of the
Director be modified, terminated, or set aside. A copy of such
petition shall be forthwith transmitted by the clerk of the
court to the Director, and thereupon the Director shall file in
the court the record in the proceeding, as provided in section
2112 of title 28, United States Code. Upon the filing of such
petition, such court shall have jurisdiction, which upon the
filing of the record shall (except as provided in the last
sentence of paragraph (1)) be exclusive, to affirm, modify,
terminate, or set aside, in whole or in part, the order of the
Director. Review of such proceedings shall be had as provided
in chapter 7 of title 5, United States Code. The judgment and
decree of the court shall be final, except that the same shall
be subject to review by the Supreme Court upon certiorari, as
provided in section 1254 of title 28, United States Code.
``(3) Proceedings not treated as stay.--The commencement of
proceedings for judicial review under paragraph (2) shall not,
unless specifically ordered by the court, operate as a stay of
any order issued by the Director.''.
(b) Conforming Amendments.--
(1) 1992 act.--Section 1317(f) of the Housing and Community
Development Act of 1992 (12 U.S.C. 4517(f)) is amended by
striking ``section 1379B'' and inserting ``section 1379D''.
(2) Fannie mae charter act.--The second sentence of
subsection (b) of section 308 of the Federal National Mortgage
Association Charter Act (12 U.S.C. 1723(b)) is amended by
striking ``The'' and inserting ``Except to the extent action
under section 1377 of the Housing and Community Development Act
of 1992 temporarily results in a lesser number, the''.
(3) Freddie mac act.--The second sentence of subparagraph
(A) of section 303(a)(2) of the Federal Home Loan Mortgage
Corporation Act (12 U.S.C. 1452(a)(2)(A)) is amended by
striking ``The'' and inserting ``Except to the extent action
under section 1377 of the Housing and Community Development Act
of 1992 temporarily results in a lesser number, the''.
SEC. 154. ENFORCEMENT AND JURISDICTION.
Section 1375 of the Housing and Community Development Act of 1992
(12 U.S.C. 4635) is amended--
(1) by striking subsection (a) and inserting the following
new subsection:
``(a) Enforcement.--The Director may, in the discretion of the
Director, apply to the United States District Court for the District of
Columbia, or the United States district court within the jurisdiction
of which the headquarters of the enterprise is located, for the
enforcement of any effective and outstanding notice or order issued
under this subtitle or subtitle B, or request that the Attorney General
of the United States bring such an action. Such court shall have
jurisdiction and power to order and require compliance with such notice
or order.''; and
(2) in subsection (b), by striking ``or 1376'' and
inserting ``1376, or 1377''.
SEC. 155. CIVIL MONEY PENALTIES.
Section 1376 of the Housing and Community Development Act of 1992
(12 U.S.C. 4636) is amended--
(1) in subsection (a), in the matter preceding paragraph
(1), by striking ``or any executive officer or'' and inserting
``any executive officer of an enterprise, any enterprise-
affiliated party, or any'';
(2) by striking subsection (b) and inserting the following
new subsection:
``(b) Amount of Penalty.--
``(1) First tier.--Any enterprise which, or any enterprise-
affiliated party who--
``(A) violates any provision of this title, the
Federal National Mortgage Association Charter Act (12
U.S.C. 1716 et seq.), the Federal Home Loan Mortgage
Corporation Act (12 U.S.C. 1451 et seq.), or any order,
condition, rule, or regulation under any such title or
Act, except that the Director may not enforce
compliance with any housing goal established under
subpart B of part 2 of subtitle A of this title, with
section 1336 or 1337 of this title, with subsection (m)
or (n) of section 309 of the Federal National Mortgage
Association Charter Act (12 U.S.C. 1723a(m), (n)), or
with subsection (e) or (f) of section 307 of the
Federal Home Loan Mortgage Corporation Act (12 U.S.C.
1456(e), (f));
``(B) violates any final or temporary order or
notice issued pursuant to this title;
``(C) violates any condition imposed in writing by
the Director in connection with the grant of any
application or other request by such enterprise;
``(D) violates any written agreement between the
enterprise and the Director; or
``(E) engages in any conduct the Director
determines to be an unsafe or unsound practice,
shall forfeit and pay a civil penalty of not more than $10,000
for each day during which such violation continues.
``(2) Second tier.--Notwithstanding paragraph (1)--
``(A) if an enterprise, or an enterprise-affiliated
party--
``(i) commits any violation described in
any subparagraph of paragraph (1);
``(ii) recklessly engages in an unsafe or
unsound practice in conducting the affairs of
such enterprise; or
``(iii) breaches any fiduciary duty which
violation, practice, or breach; and
``(B) the violation, practice, or breach--
``(i) is part of a pattern of misconduct;
``(ii) causes or is likely to cause more
than a minimal loss to such enterprise; or
``(iii) results in pecuniary gain or other
benefit to such party,
the enterprise or enterprise-affiliated party shall forfeit and
pay a civil penalty of not more than $50,000 for each day
during which such violation, practice, or breach continues.
``(3) Third tier.--Notwithstanding paragraphs (1) and (2),
any enterprise which, or any enterprise-affiliated party who--
``(A) knowingly--
``(i) commits any violation described in
any subparagraph of paragraph (1);
``(ii) engages in any unsafe or unsound
practice in conducting the affairs of such
enterprise; or
``(iii) breaches any fiduciary duty; and
``(B) knowingly or recklessly causes a substantial
loss to such enterprise or a substantial pecuniary gain
or other benefit to such party by reason of such
violation, practice, or breach,
shall forfeit and pay a civil penalty in an amount not to
exceed the applicable maximum amount determined under paragraph
(4) for each day during which such violation, practice, or
breach continues.
``(4) Maximum amounts of penalties for any violation
described in paragraph (3).--The maximum daily amount of any
civil penalty which may be assessed pursuant to paragraph (3)
for any violation, practice, or breach described in such
paragraph is--
``(A) in the case of any person other than an
enterprise, an amount not to exceed $2,000,000; and
``(B) in the case of any enterprise, $2,000,000.'';
and
(3) in subsection (d)--
(A) by striking ``or director'' each place such
term appears and inserting ``director, or enterprise-
affiliated party'';
(B) by striking ``request the Attorney General of
the United States to'';
(C) by inserting ``, or the United States district
court within the jurisdiction of which the headquarters
of the enterprise is located,'' after ``District of
Columbia''; and
(D) by striking ``, or may, under the direction and
control of the Attorney General, bring such an
action''.
SEC. 156. CRIMINAL PENALTY.
Subtitle C of title XIII of the Housing and Community Development
Act of 1992 (12 U.S.C. 4631 et seq.) is amended by inserting after
section 1377 (as added by the preceding provisions of this Act) the
following new section:
``SEC. 1378. CRIMINAL PENALTY.
``Whoever, being subject to an order in effect under section 1377,
without the prior written approval of the Director, knowingly
participates, directly or indirectly, in any manner (including by
engaging in an activity specifically prohibited in such an order) in
the conduct of the affairs of any enterprise shall, notwithstanding
section 3571 of title 18, be fined not more than $1,000,000, imprisoned
for not more than 5 years, or both.''.
Subtitle D--Reporting Regarding Enterprises
SEC. 161. REPORTING REGARDING ENTERPRISES.
Part 3 of subtitle A of the Housing and Community Development Act
of 1992 is amended--
(1) by striking sections 1351, 1352, and 1353 (Public Law
102-550; 106 Stat. 3969), except the provisions of law amended
by such sections repealed shall not be affected by such repeal;
and
(2) by striking sections 1354, 1355, and 1356 (12 U.S.C.
4601-3) and inserting the following new section:
``SEC. 1351. REPORTS REGARDING ENTERPRISE ISSUES AND ACTIVITIES.
``(a) Insured Depository Institution Holdings of Enterprise Debt
and Mortgage-Backed Securities.--Not later than 180 days after the date
of the enactment of the Secondary Mortgage Market Enterprises
Regulatory Improvement Act, the Secretary of the Treasury, the Board of
Governors of the Federal Reserve System, the Board of Directors of the
Federal Deposit Insurance Corporation, and the National Credit Union
Administration Board shall jointly submit a report to the Congress
regarding--
``(1) the extent to which obligations issued or guaranteed
by the enterprises (including mortgage-backed securities) are
held by federally insured depository institutions, including
such extent by type of institution and such extent relative to
the institutions' capital;
``(2) the extent to which the unlimited holdings by
federally insured depository institutions of the obligations of
the enterprises could produce systemic risk issues,
particularly for the safety and soundness of the banking system
in the United States, in the event of default or failure by an
enterprise; and
``(3) the effects on the enterprises, the banking industry,
and mortgage markets, if prudent limits on the holdings of
enterprise obligations were placed on federally insured
depository institutions.
``(b) Portfolio Operations, Risk Management, and Mission.--Not
later than one year after the date of the enactment of the Secondary
Mortgage Market Enterprises Regulatory Improvement Act, the Director
shall submit a report to the Congress--
``(1) describing the holdings of the enterprises in
retained mortgages and repurchased mortgage-backed securities
and the use of derivatives for hedging purposes;
``(2) describing the extent of such holdings relative to
other assets and the risk implications of such holdings;
``(3) containing an analysis of such holdings for safety
and soundness and/or mission compliance purposes; and
``(4) containing an assessment of whether such holdings and
other assets of the enterprises fulfill the mission purposes of
the enterprises under the Federal National Mortgage Association
Charter Act and the Federal Home Loan Mortgage Corporation Act.
The Director shall consult with the Comptroller General of the United
States in preparing the report under this subsection and in conducting
any research, analyses, and assessments for the report.
``(c) Debt Issuances.--Not later than one year after the date of
the enactment of the Secondary Mortgage Market Enterprises Regulatory
Improvement Act, the Secretary of the Treasury shall submit a report to
the Congress regarding--
``(1) the extent of outstanding obligations of the
enterprises and the rate of growth of such obligations; and
``(2) an analysis of whether debt issuances should be
limited or reduced if an enterprise is not operating in a safe
and sound manner and/or not complying with its mission, or if
an enterprise fails to maintain a certain credit rating and/or
debt rating.
``(d) Treasury Line of Credit.--Not later than one year after the
date of the enactment of the Secondary Mortgage Market Enterprises
Regulatory Improvement Act, the Secretary of the Treasury shall submit
a report to the Congress regarding the purposes of the authority of the
Secretary of the Treasury to purchase the debt obligations of the
enterprises. The report shall assess the desirability of limiting such
authority in certain circumstances or eliminating such authority.
``(e) Risk-Based Capital Levels.--The Director shall submit a
report to the Congress annually, on fiscal year basis, regarding--
``(1) the risk-based capital levels for the enterprises
under section 1361, including a description of the risk-based
capital test under such section and any assumptions of the
Director and factors used by the Director in establishing the
test; and
(2) the minimum and critical capital levels for the
enterprises pursuant to sections 1362 and 1363, respectively.
Each report under this subsection for a fiscal year shall be submitted
not later than the December 31 first occurring after the conclusion of
such fiscal year.
``(f) Recommendations.--Each report submitted pursuant to this
section shall include specific recommendations of appropriate policies,
limitations, regulations, legislation, or other actions to deal
appropriately and effectively with the issues addressed by such
report.''.
Subtitle E--General Provisions
SEC. 171. 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 1315 (12 U.S.C. 4515)--
(A) in subsection (a)--
(i) in the subsection heading, by striking
``Office Personnel'' and inserting ``In
General'';
(ii) by striking ``The'' and inserting
``Subject to title II of the Secondary Mortgage
Market Enterprises Regulatory Improvement Act,
the''; and
(iii) by striking ``Director and the
Office. Officers'' and inserting ``Director,
with respect to regulation and supervision of
the enterprises. Such officers'';
(B) in subsection (b)--
(i) by striking ``, and maintain
comparability with compensation of officers and
employees of'';
(ii) by inserting ``and'' after
``System,''; and
(iii) by striking ``the Office of Thrift
Supervision'' and inserting the following:
``and shall maintain comparability with
compensation of officers and employees of such
Office, Board, and Corporation, and of other
officers and employees of the Office of Housing
Finance Supervision'';
(C) in subsection (c), by inserting ``, with
respect to regulation and supervision of the
enterprises'' before the first comma;
(D) in subsection (d)--
(i) in the subsection heading, by striking
``HUD'' and inserting ``Department of the
Treasury''; and
(ii) by striking ``Housing and Urban
Development'' and inserting ``the Treasury'';
(E) in subsection (e), by inserting ``, with
respect to regulation and supervision of the
enterprises'' before the period at the end; and
(F) by striking subsection (f);
(2) in section 1319A (12 U.S.C. 4520)--
(A) by striking ``(a) In General.--''; and
(B) by striking subsection (b);
(3) in section 1319C (12 U.S.C. 4522)--
(A) in subsection (a)(1), by inserting ``under this
title'' after ``redressed''; and
(B) in subsection (b), by inserting ``under this
title'' after ``issued'';
(4) in section 1319D (12 U.S.C. 4523), by inserting ``to
conduct duties relating to the regulation and supervision of
the enterprises'' before the second comma;
(5) in section 1319E (12 U.S.C. 4524)--
(A) by inserting ``relating to regulation and
supervision of the enterprises'' before ``in accordance
with''; and
(B) by inserting ``in functions relating to the
regulation and supervision of the enterprises'' before
``shall be made available'';
(6) in section 1319F (12 U.S.C. 4525), by striking ``Code''
and all that follows through ``agencies'' and inserting ``Code,
the Office of Housing Finance Supervision, to the extent only
of its functions, activities, and employees involved in the
regulation and supervision of the enterprises, shall be
considered an agency'';
(7) in the section heading for section 1328, by striking
``secretary'' and inserting ``director'';
(8) in section 1361 (12 U.S.C. 4611)--
(A) in subsection (e)(1), by striking the first
sentence and inserting the following new sentence:
``The Director shall establish the risk-based capital
test under this section by regulation.''; and
(B) in subsection (f), by striking ``the
Secretary,'';
(9) in section 1364(c) (12 U.S.C. 4614(c)), by striking the
last sentence;
(10) in section 1367(a)(2) (12 U.S.C. 4617(a)(2)), by
striking ``with the written concurrence of the Secretary of the
Treasury,'';
(11) in section 1369A(i) (12 U.S.C. 4620(i)), by inserting
``having duties relating to regulation and supervision of the
enterprises'' before the period at the end;
(12) by striking section 1383;
(13) by striking ``Committee on Banking, Finance and Urban
Affairs'' and inserting ``Committee on Financial Services''
each place such term appears in sections 1319B, 1319G(c),
1328(a), 1336(b)(3)(C), 1337, and 1369(a)(3); and
(14) by striking ``Secretary'' and inserting ``Director''
each place such term appears in --
(A) subpart A of part 2 of subtitle A (except in
sections 1322, 1324, and 1325);
(B) subtitle B (except in section 1361(d)(1) and
1369E); and
(C) subtitle C.
(b) Amendments to Fannie Mae Charter Act.--The Federal National
Mortgage Association Charter Act (12 U.S.C. 1716 et seq.) is amended--
(1) by striking ``Director of the Office of Federal Housing
Enterprise Oversight of the Department of Housing and Urban
Development'' each place such term appears, and inserting
``Director of the Office of Housing Finance Supervision'', in--
(A) section 303(c)(2) (12 U.S.C. 1718(c)(2));
(B) section 309(d)(3)(B) (12 U.S.C.
1723a(d)(3)(B)); and
(C) section 309(k)(1); and
(2) in section 309(n)--
(A) in paragraph (1), by inserting ``the Director
of the Office of Housing Finance Supervision,'' after
``Senate,''; and
(B) in paragraph (3)(B), by striking ``Secretary''
and inserting ``Director of the Office of Housing
Finance Supervision''.
(c) Amendments to Freddie Mac Act.--The Federal Home Loan Mortgage
Corporation Act is amended--
(1) by striking ``Director of the Office of Federal Housing
Enterprise Oversight of the Department of Housing and Urban
Development'' each place such term appears, and inserting
``Director of the Office of Housing Finance Supervision'', 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 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
(3) in section 307 (12 U.S.C. 1456)--
(A) in subsection (f)--
(i) in paragraph (1), by inserting ``the
Director of the Office of Housing Finance
Supervision,'' after ``Senate,''; and
(ii) in paragraph (3)(B), by striking
``Secretary'' and inserting ``Director of the
Office of Housing Finance Supervision''.
(d) 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 ``Office of
Housing Finance Supervision in its capacity under title XIII of the
Housing and Community Development Act of 1992''.
(e) 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(f)(3)(A)) is amended by striking ``Director of the Office of
Federal Housing Enterprise Oversight of the Department of Housing and
Urban Development'' and inserting ``Director of the Office of Housing
Finance Supervision''.
(f) 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).
(g) Amendment to Title 5, United States Code.--Section 5315 of
title 5, United States Code, is amended by striking the item relating
to the Director of the Office of Federal Housing Enterprise Oversight,
Department of Housing and Urban Development.
SEC. 172. 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 1-year period beginning on the date
of the enactment of this Act.
TITLE II--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY
SEC. 201. ABOLISHMENT OF OFHEO.
(a) In General.--Effective at the end of the 1-year period
beginning on the date of the enactment of this Act, the Office of
Federal Housing Enterprise Oversight of the Department of Housing and
Urban Development and the positions of the Director and Deputy Director
of such Office are abolished.
(b) Disposition of Affairs.--During the 1-year period beginning on
the date of the enactment of this Act, the Director of the Office of
Federal Housing Enterprise Oversight shall, solely for the purpose of
winding up the affairs of the Office of Federal Housing Enterprise
Oversight--
(1) manage the employees of such Office and provide for the
payment of the compensation and benefits of any such employee
which accrue before the effective date of any transfer of such
employee pursuant to section 203; and
(2) may take any other action necessary for the purpose of
winding up the affairs of the Office.
(c) Status of Employees as Federal Agency Employees.--The
amendments made by title I and the abolishment of the Office of Federal
Housing Enterprise Oversight under subsection (a) of this section may
not be construed to affect the status of any employee of such Office as
employees of an agency of the United States for purposes of any other
provision of law during any time such employee is so employed.
(d) Use of Property and Services.--
(1) Property.--The Director of the Office of Housing
Finance Supervision may use the property of the Office of
Federal Housing Enterprise Oversight to perform functions which
have been transferred to the Director of the Office of Housing
Finance Supervision for such time as is reasonable to
facilitate the orderly transfer of functions transferred
pursuant to any other provision of this Act or any amendment
made by this Act to any other provision of law.
(2) Agency services.--Any agency, department, or other
instrumentality of the United States, and any successor to any
such agency, department, or instrumentality, which was
providing supporting services to the Office of Federal Housing
Enterprise Oversight before the expiration of the period under
subsection (a) in connection with functions that are
transferred to the Director of the Office of Housing Finance
Supervision shall--
(A) continue to provide such services, on a
reimbursable basis, until the transfer of such
functions is complete; and
(B) consult with any such agency to coordinate and
facilitate a prompt and reasonable transition.
(e) Savings Provisions.--
(1) Existing rights, duties, and obligations not
affected.--Subsection (a) shall not affect the validity of any
right, duty, or obligation of the United States, the Director
of the Office of Federal Housing Enterprise Oversight, or any
other person, which--
(A) arises under or pursuant to the title XIII of
the Housing and Community Development Act of 1992, the
Federal National Mortgage Association Charter Act, the
Federal Home Loan Mortgage Corporation Act, or any
other provision of law applicable with respect to such
Office; and
(B) existed on the day before the abolishment under
subsection (a) of this section.
(2) Continuation of suits.--No action or other proceeding
commenced by or against the Director of the Office of Federal
Housing Enterprise Oversight shall abate by reason of the
enactment of this Act, except that the Director of the Office
of Housing Finance Supervision shall be substituted for the
Director of the Office of Federal Housing Enterprise Oversight
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 Secretary of Housing and Urban Development
and that relate to the Secretary's authority under--
(i) title XIII of the Housing and Community
Development Act of 1992;
(ii) under the Federal National Mortgage
Association Charter Act, with respect to the
Federal National Mortgage Association; or
(iii) the Federal Home Loan Mortgage
Corporation Act; or
(C) 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 Director of the Office of Housing Finance Supervision 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 OFHEO.
(a) Authority to Transfer.--The Director of the Office of Housing
Finance Supervision may transfer employees of the Office of Federal
Housing Enterprise Oversight to the Office of Housing Finance
Supervision for employment no later than the date of the abolishment
under section 201(a) of this Act, as the Director considers
appropriate. This Act and the amendments made by this Act shall not be
considered to result in the transfer of any function from one agency to
another or the replacement of one agency by another, for purposes of
section 3505 of title 5, United States Code, except to the extent that
the Director of the Office of Housing Finance Supervision specifically
provides so.
(b) 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 Director of the Office of
Housing Finance Supervision 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).
(c) Reorganization.--If the Director of the Office of Housing
Finance Supervision determines, after the end of the 1-year period
beginning on the date of the abolishment under section 201(a), that a
reorganization of the combined work force is required, that
reorganization shall be deemed a major reorganization for purposes of
affording affected employees retirement under section 8336(d)(2) or
8414(b)(1)(B) of title 5, United States Code.
(d) Employee Benefit Programs.--Any employee of the Office of
Federal Housing Enterprise Oversight accepting employment with the
Director of the Office of Housing Finance Supervision as a result of a
transfer under subsection (a) may retain for 18 months after the date
such transfer occurs membership in any employee benefit program of the
Director of the Office of Housing Finance Supervision 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 Director of
the Office of Housing Finance Supervision.
The difference in the costs between the benefits which would have been
provided by such agency and those provided by this section shall be
paid by the Director of the Office of Housing Finance Supervision. If
any employee elects to give up membership in a health insurance program
or the health insurance program is not continued by such Director, the
employee shall be permitted to select an alternate Federal health
insurance program within 30 days of such election or notice, without
regard to any other regularly scheduled open season.
SEC. 204. TRANSFER OF PROPERTY AND FACILITIES.
Upon the abolishment under section 201(a), all property of the
Office of Federal Housing Enterprise Oversight shall transfer to the
Director of the Office of Housing Finance Supervision.
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