[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 190 Introduced in Senate (IS)]






109th CONGRESS
  1st Session
                                 S. 190




_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 26, 2005

 Mr. Hagel (for himself, Mr. Sununu, and Mrs. Dole) introduced the 
        following bill; which was read twice and referred to the 
        Committee on Banking, Housing, and Urban AfairsYYYYYYYYYYYYYYYY

_______________________________________________________________________

                                 A BILL


 
To address the regulation of secondary mortgage market 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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Federal Housing 
Enterprise Regulatory Reform Act of 2005''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
              TITLE I--REFORM OF REGULATION OF ENTERPRISES

      Subtitle A--Improvement of Safety and Soundness Supervision

Sec. 101. Establishment of the Federal Housing Enterprise Regulatory 
                            Agency.
Sec. 102. Duties and authorities of Director.
Sec. 103. Federal Housing Enterprise Board.
Sec. 104. Authority to require reports by regulated entities.
Sec. 105. Examiners and accountants; authority to contract for reviews 
                            of enterprises.
Sec. 106. Assessments.
Sec. 107. Regulations and orders.
Sec. 108. Prudential management and operations standards.
Sec. 109. Limitation on nonmission-related assets.
Sec. 110. Risk-based capital test for enterprises.
Sec. 111. Limit on golden parachutes.
Sec. 112. Reporting of fraudulent loans.
             Subtitle B--Improvement of Mission Supervision

Sec. 121. Transfer of program approval and housing goal oversight.
Sec. 122. Review of enterprise programs, and activities.
Sec. 123. Authority to require reports by enterprises.
Sec. 124. Monitoring and enforcing compliance with housing goals.
Sec. 125. Assumption by director of other HUD responsibilities.
Sec. 126. Administrative and judicial enforcement proceedings.
                  Subtitle C--Prompt Corrective Action

Sec. 141. Capital classifications.
Sec. 142. Supervisory actions applicable to undercapitalized regulated 
                            entities.
Sec. 143. Supervisory actions applicable to significantly 
                            undercapitalized regulated entities.
Sec. 144. Authority over critically undercapitalized enterprises.
                    Subtitle D--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.
Sec. 157. Notice after separation from service.
        Subtitle E--Other Reporting Regarding Regulated Entities

Sec. 161. Reporting regarding regulated entities.
                     Subtitle F--General Provisions

Sec. 171. Conforming and technical amendments.
Sec. 172. Presidentially appointed directors of enterprises.
Sec. 173. Effective date.
                   TITLE II--FEDERAL HOME LOAN BANKS

Sec. 201. Directors.
Sec. 202. Definitions.
Sec. 203. Agency oversight of Federal Home Loan Banks.
Sec. 204. Debt issuing facility.
Sec. 205. Exclusion from certain securities reporting requirements.
Sec. 206. Limitation on golden parachutes.
TITLE III--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY OF OFHEO AND 
                   THE FEDERAL HOUSING FINANCE BOARD

                           Subtitle A--OFHEO

Sec. 301. Abolishment of OFHEO.
Sec. 302. Continuation and coordination of certain regulations.
Sec. 303. Transfer and rights of employees of OFHEO.
Sec. 304. Transfer of property and facilities.
               Subtitle B--Federal Housing Finance Board

Sec. 311. Abolishment of the Federal Housing Finance Board.
Sec. 312. Continuation and coordination of certain regulations.Board.
Sec. 314. Transfer of property and facilities.
                   TITLE IV--MISCELLANEOUS PROVISIONS

Sec. 401. Study and report on Basel II and enterprise debt.
Sec. 402. Affordable housing reporting.

SEC. 2. DEFINITIONS.

    Section 1303 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4502) is amended--
            (1) in paragraph (5), by striking ``Office of Federal 
        Housing Enterprise Oversight of the Department of Housing and 
        Urban Development'' and inserting ``Federal Housing Enterprise 
        Regulatory Agency'';
            (2) in each of paragraphs (8), (9), (10), and (19), by 
        striking ``Secretary'' each place that term appears and 
        inserting ``Director'';
            (3) in paragraph (14), by striking ``Office of Federal 
        Housing Enterprise Oversight of the Department of Housing and 
        Urban Development'' and inserting ``Federal Housing Enterprise 
        Regulatory Agency'';
            (4) by redesignating paragraphs (16) through (19) as 
        paragraphs (21) through (24), respectively;
            (5) by striking paragraph (15) and inserting the following:
            ``(20) Regulated entity.--The term `regulated entity' 
        means--
                    ``(A) the Federal National Mortgage Association and 
                any affiliate thereof;
                    ``(B) the Federal Home Loan Mortgage Corporation 
                and any affiliate thereof; and
                    ``(C) any Federal Home Loan Bank.'';
            (6) by striking paragraph (13) and by redesignating 
        paragraphs (7), (8), (9), (10), (11), (12), and (14) as 
        paragraphs (13) through (19), respectively;
            (7) by redesignating paragraphs (2) through (4) as 
        paragraphs (5) through (7), respectively;
            (8) by inserting after paragraph (7), as redesignated, the 
        following:
            ``(8) Default; Danger of Default.--
                    ``(A) Default.--The term `default' means, with 
                respect to an enterprise, any adjudication or other 
                official determination by any court of competent 
                jurisdiction, or the Agency, pursuant to which a 
                conservator, receiver, limited-life enterprise, or 
                legal custodian is appointed for an enterprise.
                    ``(B) In danger of default.--The term `in danger of 
                default' means an enterprise with respect to which--
                            ``(i) in the opinion of the Agency--
                                    ``(I) the enterprise is not likely 
                                to be able to pay the obligations of 
                                the enterprise in the normal course of 
                                business; or
                                    ``(II) the enterprise has incurred 
                                or is likely to incur losses that will 
                                deplete all or substantially all of its 
                                capital; and
                            ``(ii) there is no reasonable prospect that 
                        the capital of the enterprise will be 
                        replenished.''.
            (9) by redesignating paragraph (1) as paragraph (2);
            (10) by inserting after paragraph (2), as redesignated the 
        following:
            ``(3) Authorizing statutes.--The term `authorizing 
        statutes' means--
                    ``(A) the Federal National Mortgage Association 
                Charter Act;
                    ``(B) the Federal Home Loan Mortgage Corporation 
                Act; and
                    ``(C) the Federal Home Loan Bank Act.
            ``(4) Board.--The term `Board' means the Federal Housing 
        Enterprise Board established under section 1313A.'';
            (11) by redesignated paragraph (6) as paragraph (10), and 
        by inserting after paragraph (10), as redesignated, the 
        following:
            ``(11) Enterprise-affiliated party.--The term `enterprise-
        affiliated party' means--
                    ``(A) any director, officer, employee, or 
                controlling stockholder of, or agent for, a regulated 
                entity;
                    ``(B) any shareholder, affiliate, consultant, or 
                joint venture partner of a regulated entity, and any 
                other person, as determined by the Director (by 
                regulation or on a case-by-case basis) that 
                participates in the conduct of the affairs of a 
                regulated entity; and
                    ``(C) any independent contractor for a regulated 
                entity (including any attorney, appraiser, or 
                accountant), if--
                            ``(i) the independent contractor knowingly 
                        or recklessly participates in--
                                    ``(I) any violation of any law or 
                                regulation;
                                    ``(II) any breach of fiduciary 
                                duty; or
                                    ``(III) any unsafe or unsound 
                                practice; and
                            ``(ii) such violation, breach, or practice 
                        caused, or is likely to cause, more than a 
                        minimal financial loss to, or a significant 
                        adverse effect on, the regulated entity; and
                    ``(D) any not-for-profit corporation that receives 
                its principal funding, on an ongoing basis, from any 
                regulated entity.'';
            (12) by inserting before paragraph (2), as redesignated, 
        the following:
            ``(1) Agency; director.--The term--
                    ``(A) `Agency' means the Federal Housing Enterprise 
                Regulatory Agency established under section 1311; and
                    ``(B) `Director' means the Director of the Agency, 
                appointed under section 1312.''; and
            (13) by adding at the end the following:
            ``(25) Violation.--The term `violation' includes any action 
        (alone or in combination with another or others) for or toward 
        causing, bringing about, participating in, counseling, or 
        aiding or abetting a violation.''.

              TITLE I--REFORM OF REGULATION OF ENTERPRISES

      Subtitle A--Improvement of Safety and Soundness Supervision

SEC. 101. ESTABLISHMENT OF THE FEDERAL HOUSING ENTERPRISE REGULATORY 
              AGENCY.

    The Federal Housing Enterprises Financial Safety and Soundness Act 
of 1992 (12 U.S.C. 4501 et seq.) is amended by striking sections 1311 
and 1312 and inserting the following:

``SEC. 1311. ESTABLISHMENT OF THE FEDERAL HOUSING ENTERPRISE REGULATORY 
              AGENCY.

    ``(a) Establishment.--There is established the Federal Housing 
Enterprise Regulatory Agency, which shall be an independent agency of 
the Federal Government.
    ``(b) General Supervisory and Regulatory Authority.--
            ``(1) In general.--Each regulated entity shall, to the 
        extent provided in this title, be subject to the supervision 
        and regulation of the Agency.
            ``(2) Authority over fannie mae and freddie mac, the 
        federal home loan banks, and the federal home loan bank finance 
        corporation.--The Director shall have general regulatory 
        authority over each regulated entity and the Federal Home Loan 
        Bank Finance Corporation, and shall exercise such general 
        regulatory authority, including such duties and authorities set 
        forth under section 1313 of this Act, to ensure that the 
        purposes of this Act, the authorizing statutes, and any other 
        applicable law are carried out.
    ``(c) Savings Provision.--The authority of the Director to take 
actions under subtitles B and C shall not in any way limit the general 
supervisory and regulatory authority granted to the Director under 
subsection (b).

``SEC. 1312. DIRECTOR.

    ``(a) Establishment of Position.--There is established the position 
of the Director of the Agency, who shall be the head of the Agency.
    ``(b) Appointment; Term.--
            ``(1) Appointment.--The Director shall be appointed by the 
        President, by and with the advice and consent of the Senate, 
        from among individuals who are citizens of the United States, 
        have a demonstrated understanding of financial management or 
        oversight, and have a demonstrated understanding of capital 
        markets, including the mortgage securities markets and housing 
        finance.
            ``(2) Term.--The Director shall be appointed for a term of 
        6 years, unless removed before the end of such term for cause 
        by the President.
            ``(3) Vacancy.--A vacancy in the position of Director that 
        occurs before the expiration of the term for which a Director 
        was appointed shall be filled in the manner established under 
        paragraph (1), and the Director appointed to fill such vacancy 
        shall be appointed only for the remainder of such term.
            ``(4) Service after end of term.--An individual may serve 
        as the Director after the expiration of the term for which 
        appointed until a successor has been appointed.
            ``(5) Transitional provision.--Notwithstanding paragraphs 
        (1) and (2), the person serving as the Director of the Office 
        of Federal Housing Enterprise Oversight of the Department of 
        Housing and Urban Development on the date of enactment of the 
        Federal Housing Enterprise Regulatory Reform Act of 2005, shall 
        serve as the Director until a successor has been appointed 
        under paragraph (1).
    ``(c) Deputy Director of the Division of Enterprise Regulation.--
            ``(1) In general.--The Agency shall have a Deputy Director 
        of the Division of Enterprise Regulation, who shall be 
        designated by the Director from among individuals who are 
        citizens of the United States, have a demonstrated 
        understanding of financial management or oversight, and have a 
        demonstrated understanding of mortgage securities markets and 
        housing finance.
            ``(2) Functions.--The Deputy Director of the Division of 
        Enterprise Regulation shall have such functions, powers, and 
        duties with respect to the oversight of the enterprises as the 
        Director shall prescribe.
    ``(d) Deputy Director of the Division of Federal Home Loan Bank 
Regulation.--
            ``(1) In general.--The Agency shall have a Deputy Director 
        of the Division of Federal Home Loan Bank Regulation, who shall 
        be designated by the Director from among individuals who are 
        citizens of the United States, have a demonstrated 
        understanding of financial management or oversight, and have a 
        demonstrated understanding of the Federal Home Loan Bank System 
        and housing finance.
            ``(2) Functions.--The Deputy Director of the Division of 
        Federal Home Loan Bank Regulation shall have such functions, 
        powers, and duties with respect to the oversight of the Federal 
        Home Loan Banks as the Director shall prescribe.
    ``(e) Deputy Director for Housing Mission and Goals.--
            ``(1) In general.--The Agency shall have a Deputy Director 
        for Housing Mission and Goals, who shall be designated by the 
        Director from among individuals who are citizens of the United 
        States, and have a demonstrated understanding of the housing 
        markets and housing finance.
            ``(2) Functions.--The Deputy Director for Housing Mission 
        and Goals shall have such functions, powers, and duties with 
        respect to the oversight of the housing mission and goals of 
        the enterprises as the Director shall prescribe.
    ``(f) Acting Director.--In the event of the death, resignation, 
sickness, or absence of the Director, the Board shall, by a majority 
vote, designate either the Deputy Director of the Division of 
Enterprise Regulation, the Deputy Director of the Division of Federal 
Home Loan Bank Regulation, or the Deputy Director for Housing Mission 
and Goals, to serve as acting Director until the return of the 
Director, or the appointment of a successor pursuant to subsection (b).
    ``(g) Limitations.--The Director and each of the Deputy Directors 
may not--
            ``(1) have any direct or indirect financial interest in any 
        regulated entity or enterprise-affiliated party;
            ``(2) hold any office, position, or employment in any 
        regulated entity or enterprise-affiliated party; or
            ``(3) have served as an executive officer or director of 
        any regulated entity, or enterprise-affiliated party, at any 
        time during the 3-year period ending on the date of appointment 
        of such individual as Director or Deputy Director.''.

SEC. 102. DUTIES AND AUTHORITIES OF DIRECTOR.

    (a) In General.--Section 1313 of the Federal Housing Enterprises 
Financial Safety and Soundness 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 of the 
        Director shall be--
                    ``(A) to oversee the prudential operations of each 
                regulated entity, on a consolidated basis; and
                    ``(B) to ensure that--
                            ``(i) each regulated entity operates in a 
                        safe and sound manner, including maintenance of 
                        adequate capital and internal controls;
                            ``(ii) the operations and activities of 
                        each regulated entity foster liquid, efficient, 
                        competitive, and resilient national housing 
                        finance markets (including activities relating 
                        to mortgages on housing for low- and moderate- 
                        income families involving a reasonable economic 
                        return that may be less than the return earned 
                        on other activities);
                            ``(iii) each regulated entity complies with 
                        this title and the rules, regulations, 
                        guidelines, and orders issued under this title 
                        and the authorizing statutes;
                            ``(iv) each regulated entity carries out 
                        its statutory mission only through activities 
                        that are authorized under and consistent with 
                        this title and the authorizing statutes;
                            ``(v) the activities of each regulated 
                        entity and the manner in which such regulated 
                        entity is operated are consistent with the 
                        public interest; and
                            ``(vi) each regulated entity remains 
                        adequately capitalized, after due consideration 
                        of the risk to such regulated entity.
            ``(2) Scope of authority.--The authority of the Director 
        shall include the authority--
                    ``(A) to review and, if warranted based on the 
                principal duties described in paragraph (1), reject any 
                acquisition or transfer of a controlling interest in an 
                enterprise; and
                    ``(B) to exercise such incidental powers as may be 
                necessary or appropriate to fulfill the duties and 
                responsibilities of the Director in the supervision and 
                regulation of each regulated entity.
    ``(b) Delegation of Authority.--The Director may delegate to 
officers and employees of the Agency any of the functions, powers, or 
duties of the Director, as the Director considers appropriate.
    ``(c) Litigation Authority.--
            ``(1) In general.--In enforcing any provision of this 
        title, any regulation or order prescribed under this title, or 
        any other provision of law, rule, regulation, or order, or in 
        any other action, suit, or proceeding to which the Director is 
        a party or in which the Director is interested, and in the 
        administration of conservatorships and receiverships, the 
        Director may act in the Director's own name and through the 
        Director's own attorneys.
            ``(2) Subject to suit.--Except as otherwise provided by 
        law, the Director shall be subject to suit (other than suits on 
        claims for money damages) by a regulated entity with respect to 
        any matter under this title or any other applicable provision 
        of law, rule, order, or regulation under this title, in the 
        United States district court for the judicial district in which 
        the regulated entity has its principal place of business, or in 
        the United States District Court for the District of Columbia, 
        and the Director may be served with process in the manner 
        prescribed by the Federal Rules of Civil Procedure.''.
    (b) Independence in Congressional Testimony and Recommendations.--
Section 111 of Public Law 93-495 (12 U.S.C. 250) is amended by striking 
``the Federal Housing Finance Board'' and inserting ``the Director of 
the Federal Housing Enterprise Regulatory Agency''.

SEC. 103. FEDERAL HOUSING ENTERPRISE BOARD.

    (a) In General.--The Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is amended by 
inserting after section 1313 the following:

``SEC. 1313A. FEDERAL HOUSING ENTERPRISE BOARD.

    ``(a) In General.--There is established the Federal Housing 
Enterprise Board.
    ``(b) Duties.--The Board shall advise the Director with respect to 
overall strategies and policies in carrying out the duties of the 
Director under this title. Except as otherwise provided under this Act, 
the Board shall not exercise any executive authority.
    ``(c) Composition.--The Board shall be comprised of 4 members, of 
whom--
            ``(1) 1 member shall be the Secretary of the Treasury;
            ``(2) 1 member shall be the Secretary of Housing and Urban 
        Development;
            ``(3) 1 member shall be the Chairman of the Securities and 
        Exchange Commission; and
            ``(4) 1 member shall be the Director, who shall serve as 
        the Chairperson of the Board.
    ``(d) Meetings.--
            ``(1) In general.--The Board shall meet upon notice by the 
        Director, but in no event shall the Board meet less frequently 
        than once every 3 months.
            ``(2) Special meetings.--Either the Secretary of the 
        Treasury, the Secretary of Housing and Urban Development, or 
        the Chairman of the Securities and Exchange Commission may, 
        upon giving written notice to the Director, require a special 
        meeting of the Board.
    ``(e) Testimony.--On an annual basis, the Board shall testify 
before Congress regarding--
            ``(1) the safety and soundness of the regulated entities;
            ``(2) any material deficiencies in the conduct of the 
        operations of the regulated entities;
            ``(3) the overall operational status of the regulated 
        entities;
            ``(4) an evaluation of the performance of the regulated 
        entities in carrying out their respective missions;
            ``(5) operations, resources, and performance of the Agency; 
        and
            ``(6) such other matters relating to the Agency and its 
        fulfillment of its mission, as the Board determines 
        appropriate.''.
    (b) Annual Report of the Director.--Section 1319B(a) of the Federal 
Housing Enterprises Financial Safety and Soundness Act of 1992 (12 
U.S.C. 4521 (a)) is amended--
            (1) in paragraph (3), by striking ``; and'' and inserting a 
        semicolon;
            (2) in paragraph (4), by striking the period at the end and 
        inserting ``; and''; and
            (3) by inserting after paragraph (4) the following:
            ``(5) the assessment of the Board or any of its members 
        with respect to--
                    ``(A) the safety and soundness of the regulated 
                entities;
                    ``(B) any material deficiencies in the conduct of 
                the operations of the regulated entities;
                    ``(C) the overall operational status of the 
                regulated entities; and
                    ``(D) an evaluation of the performance of the 
                regulated entities in carrying out their respective 
                missions;
            ``(6) operations, resources, and performance of the Agency; 
        and
            ``(7) such other matters relating to the Agency and its 
        fulfillment of its mission.''.

SEC. 104. AUTHORITY TO REQUIRE REPORTS BY REGULATED ENTITIES.

    Section 1314 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4514) is amended--
            (1) in the section heading, by striking ``enterprises'' and 
        inserting ``regulated entities'';
            (2) by striking ``an enterprise'' each place that term 
        appears and inserting ``a regulated entity'';
            (3) by striking ``the enterprise'' and inserting ``the 
        regulated entity''; and
            (4) in subsection (a)--
                    (A) in the subsection heading, by striking 
                ``Special Reports and Reports of Financial Condition'' 
                and inserting ``Regular and Special Reports'';
                    (B) in paragraph (1)--
                            (i) by striking the paragraph heading and 
                        inserting the following:
            ``(1) Regular reports.--''; and
                            (ii) by striking ``reports of financial 
                        condition and operations'' and inserting 
                        ``regular reports, including financial 
                        statements determined on a fair value basis, on 
                        the condition (including financial condition), 
                        management, activities, or operations of the 
                        regulated entity, as the Director considers 
                        appropriate''; and
                    (C) in paragraph (2), by striking ``whenever'' and 
                inserting ``on any of the topics specified in paragraph 
                (1) or any other relevant topics, if''.

SEC. 105. EXAMINERS AND ACCOUNTANTS; AUTHORITY TO CONTRACT FOR REVIEWS 
              OF REGULATED ENTITIES.

    (a) In General.--Section 1317 of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4517) is 
amended--
            (1) in subsection (a), by striking ``enterprise'' each 
        place that term appears and inserting ``regulated entity'';
            (2) in subsection (b), by striking ``an enterprise'' and 
        inserting ``a regulated entity'';
            (3) in subsection (c), in the second sentence, by inserting 
        before the period ``to conduct examinations under this 
        section'';
            (4) by redesignating subsections (d) through (f) as (e) 
        through (g); and
            (5) by inserting after subsection (c) the following:
    ``(d) Inspector General.--There shall be within the Agency an 
Inspector General, who shall be appointed in accordance with section 
3(a) of the Inspector General Act of 1978.''.
    (b) Direct Hire Authority To Hire Accountants, Economists, and 
Examiners.--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:
    ``(h) Appointment of Accountants, Economists, and Examiners.--
            ``(1) Applicability.--This section shall apply with respect 
        to any position of examiner, accountant, economist, and 
        specialist in financial markets and in technology at the 
        Agency, with respect to supervision and regulation of the 
        enterprises, that is in the competitive service.
            ``(2) Appointment authority.--The Director may appoint 
        candidates to any position described in paragraph (1)--
                    ``(A) in accordance with the statutes, rules, and 
                regulations governing appointments in the excepted 
                service; and
                    ``(B) notwithstanding any statutes, rules, and 
                regulations governing appointments in the competitive 
                service.''.
    (c) Amendments to Inspector General Act.--Section 11 of the 
Inspector General Act of 1978 (5 U.S.C. 11 App.) is amended--
            (1) in paragraph (1), by inserting ``, the Director of the 
        Federal Housing Enterprises Regulatory Agency'' after ``Social 
        Security Administration''; and
            (2) in paragraph (2), by inserting ``, the Federal Housing 
        Enterprises Regulatory Agency'' after ``Social Security 
        Administration''.
    (d) Authority To Contract for Reviews of Regulated Entities.--
Section 1319 of the Federal Housing Enterprises Financial Safety and 
Soundness Act of 1992 (12 U.S.C. 4519) is amended in the section 
heading, by striking ``by rating organization''.

SEC. 106. ASSESSMENTS.

    Section 1316 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4516) is amended--
            (1) by striking subsection (a) and inserting the following:
    ``(a) Annual Assessments.--The Director shall establish and collect 
from the regulated entities annual assessments in an amount not 
exceeding the amount sufficient to provide for reasonable costs and 
expenses of the Agency, including--
            ``(1) the expenses of any examinations under section 1317;
            ``(2) the expenses of obtaining any reviews and credit 
        assessments under section 1319; and
            ``(3) such amounts in excess of actual expenses for any 
        given fiscal year, as deemed necessary by the Director to 
        maintain working capital.'';
            (2) by striking ``an enterprise'' each place that term 
        appears and inserting ``a regulated entity'';
            (3) by striking ``enterprise'' each place that term appears 
        (other than as described in paragraph (1)), except in 
        subparagraphs (A) and (B) of subsection (b)(3), and inserting 
        ``regulated entity'';
            (4) in subsection (b)--
                    (A) in paragraph (2), by moving the margin 2 ems to 
                the left; and
                    (B) in paragraph (3)(B), by striking ``by the 
                enterprise'' and inserting ``by an enterprise'';
            (5) in subsection (c), by adding at the end the following: 
        ``The Director may adjust the amounts of any semiannual 
        assessments for an assessment under subsection (a) that are to 
        be paid pursuant to subsection (b) by a regulated entity, as 
        the Director determines necessary to ensure that the costs of 
        enforcement activities under subtitles B and C for an 
        enterprise are borne only by that regulated entity.'';
            (6) in subsection (d), by striking ``If'' and inserting 
        ``Except with respect to amounts collected pursuant to 
        subsection (a)(3), if'';
            (7) by striking subsection (e) and inserting the following:
    ``(e) Remission of Assessment.--At the end of each year for which 
an assessment under this section is made, the Director shall remit to 
each regulated entity any amount of an assessment collected from the 
regulated entity that is attributable to subsection (a)(3), and is in 
excess of the amount that the Director deems necessary to maintain 
working capital.'';
            (8) by striking subsection (f) and inserting the following:
    ``(f) No Appropriated Funds.--Salaries of the Director and other 
employees of the Agency, and all other expenses thereof, may be paid 
from assessments collected under this subsection or other sources, and 
shall not be construed to be Government funds or appropriated monies, 
or subject to apportionment for the purposes of chapter 15 of title 31, 
United States Code, or any other authority.'';
            (9) in subsection (g)--
                    (A) by striking ``the Secretary and'' each place 
                that term appears; and
                    (B) in paragraph (3)--
                            (i) by striking ``(A)''; and
                            (ii) by striking ``, and (B)'' and all that 
                        follows through the end of the paragraph and 
                        inserting a period; and
            (10) by adding at the end the following:
    ``(h) Payment of Expenses.--
            ``(1) Home loan banks.--The expenses for performing 
        examination, regulation, supervision, and enforcement functions 
        of the Federal Home Loan Banks by the Director, or any other 
        agency, shall not be paid from any assessments collected by the 
        Director from the enterprises.
            ``(2) Enterprises.--The expenses for performing 
        examination, regulation, supervision, and enforcement function 
        of the enterprises by the Director, or any other agency, shall 
        not be paid from any assessments collected by the Director from 
        the Federal Home Loan Banks.''.

SEC. 107. REGULATIONS AND ORDERS.

    (a) Authority.--Section 1319G of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4526) is 
amended--
            (1) by striking subsection (a) and inserting the following:
    ``(a) Authority.--The Director shall issue any regulations, 
guidelines, directives, or orders necessary to carry out the duties of 
the Director under this title or the authorizing statutes, and to 
ensure that the purposes of this title and the authorizing statutes are 
accomplished.''; and
            (2) in subsection (c), by striking ``Committee on Banking, 
        Finance and Urban Affairs'' and inserting ``Committee on 
        Financial Services''.
    (b) Clarification of Mission.--Part 1 of subtitle A of the Federal 
Housing Enterprises Financial Safety and Soundness Act of 1992 (12 
U.S.C. 4501 et seq.) is amended by adding after section 1319H, as added 
by this Act, the following:

``SEC. 1319I. CLARIFICATION OF MISSION.

    ``(a) Loan Origination.--The Director shall prescribe a regulation 
defining what activities constitute loan origination and are, 
therefore, impermissible for the enterprises. The regulation shall 
clarify that loan origination is impermissible to the enterprises 
whether done directly or indirectly.
    ``(b) Defining the Boundary.--The Director shall prescribe 
regulations defining the boundary between the primary mortgage market, 
in which the enterprises are not permitted to participate directly or 
indirectly, and the secondary mortgage market, in which the enterprises 
are permitted to operate. Such regulations shall make clear that--
            ``(1) the secondary market operations can only involve a 
        mortgage loan after it has been closed and funded;
            ``(2) primary market activities include any activities that 
        involve direct contact with a mortgage borrower, before or 
        after the loan closes, except that an enterprise may make 
        direct contact with a borrower whose loan that enterprise 
        currently owns or guarantees when that loan has defaulted or is 
        in imminent danger of defaulting;
            ``(3) underwriting a loan for origination, directly or 
        indirectly, is a primary market activity; and
            ``(4) document and custodial functions are primary market 
        activities, and therefore impermissible to the enterprises, 
        until the purchase of the related loan in the secondary market.
    ``(c) Deadline.--The Director shall prescribe regulations required 
by this section in accordance with applicable requirements of title 5, 
United States Code, and shall issue them in final form not later than 
18 months after the date of enactment of this section.
    ``(d) No Grandfathering.--No activity or investment of an 
enterprise shall be presumed permissible because it occurred or was 
occurring on the date of enactment of this section. The Director shall 
use reasonable procedures to address any such activity or 
investment.''.

SEC. 108. PRUDENTIAL MANAGEMENT AND OPERATIONS STANDARDS.

    Part 1 of subtitle A of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is amended by 
inserting after section 1313 the following new section:

``SEC. 1313A. PRUDENTIAL MANAGEMENT AND OPERATIONS STANDARDS.

    ``The Director may establish standards, by regulation, order, or 
guideline, for each enterprise relating to--
            ``(1) adequacy of internal controls and information systems 
        taking into account the nature and scale of business 
        operations;
            ``(2) independence and adequacy of internal audit systems;
            ``(3) management of interest rate risk exposure;
            ``(4) management of market risk, including standards that 
        provide for systems that accurately measure, monitor, and 
        control market risks and, as warranted, that establish 
        limitations on market risk;
            ``(5) adequacy and maintenance of liquidity and reserves;
            ``(6) management of asset and investment portfolio growth;
            ``(7) investments and acquisitions of assets by an 
        enterprise, to ensure that they are consistent with the 
        purposes of this title and the authorizing statutes;
            ``(8) overall risk management processes, including adequacy 
        of oversight by senior management and the board of directors 
        and of processes and policies to identify, measure, monitor, 
        and control material risks, including reputational risks, and 
        for adequate, well-tested business resumption plans for all 
        major systems with remote site facilities to protect against 
        disruptive events; and
            ``(9) such other operational and management standards as 
        the Director determines to be appropriate.''.

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:

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

    ``(a) In General.--The Director may, by regulation, determine the 
type and amount of nonmission-related assets that an enterprise may 
hold at any time. The Director shall, in any such regulation, 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 program relating to any 
nonmission-related asset without obtaining the prior approval of the 
Director in accordance with section 1319H.''.

SEC. 110. RISK-BASED CAPITAL TEST FOR ENTERPRISES.

    (a) Risk Capital Levels.--Section 1361 of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4611) 
is amended to read as follows:

``SEC. 1361. RISK-BASED CAPITAL LEVELS.

    ``(a) In General.--The Director shall, by regulation, establish 
risk-based capital requirements for each of the regulated entities to 
ensure that the regulated entities operate in a safe and sound manner, 
with sufficient capital and reserves to support the risks that arise in 
the operations and management of each regulated entity.
    ``(b) Required Registration Under the Securities Exchange Act of 
1934.--
            ``(1) In general.--Each regulated entity shall register at 
        least one class of the capital stock of such regulated entity, 
        and maintain such registration with the Securities and Exchange 
        Commission, under the Securities Exchange Act of 1934.
            ``(2) Enterprises.--Each enterprise shall comply with 
        sections 14 and 16 of the Securities Exchange Act of 1934.
    ``(c) No Limitation.--Nothing in this section shall limit the 
authority of the Director to require other reports or undertakings in 
furtherance of the responsibilities of the Director under this Act.''.
    (b) Minimum Capital Levels for Enterprises.--Section 1362 of the 
Federal Housing Enterprises Financial Safety and Soundness Act of 1992 
(12 U.S.C. 4612) is amended--
            (1) in the section heading, by inserting ``for 
        enterprises'' after ``levels''; and
            (2) by striking subsection (b) and inserting the following:
    ``(b) Regulatory Discretion.--The Director may, by regulation, 
establish a minimum capital level that is higher than the level 
specified in subsection (a).''.

SEC. 111. LIMIT ON GOLDEN PARACHUTES.

    Section 1318 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4518) is amended by adding at the 
end the following:
    ``(c) Authority To Regulate or Prohibit Certain Forms of Benefits 
to Affiliated Parties.--
            ``(1) Golden parachutes and indemnification payments.--The 
        Agency may prohibit or limit, by regulation or order, any 
        golden parachute payment or indemnification payment.
            (2) Factors to be taken into account.--The Agency shall 
        prescribe, by regulation, the factors to be considered by the 
        Agency in taking any action pursuant to paragraph (1), which 
        may include such factors as--
                    ``(A) whether there is a reasonable basis to 
                believe that the affiliated party has committed any 
                fraudulent act or omission, breach of trust or 
                fiduciary duty, or insider abuse with regard to the 
                enterprise that has had a material affect on the 
                financial condition of the enterprise;
                    ``(B) whether there is a reasonable basis to 
                believe that the affiliated party is substantially 
                responsible for the insolvency of the enterprise, the 
                appointment of a conservator or receiver for the 
                enterprise, or the enterprise's troubled condition (as 
                defined in the regulations prescribed pursuant to 
                section 32(f));
                    ``(C) whether there is a reasonable basis to 
                believe that the affiliated party has materially 
                violated any applicable Federal or State law or 
                regulation that has had a material affect on the 
                financial condition of the enterprise;
                    ``(D) whether the affiliated party was in a 
                position of managerial or fiduciary responsibility; and
                    ``(E) the length of time the party was affiliated 
                with the enterprise, and the degree to which--
                            ``(i) the payment reasonably reflects 
                        compensation earned over the period of 
                        employment; and
                            ``(ii) the compensation involved represents 
                        a reasonable payment for services rendered.
            ``(3) Certain payments prohibited.--No enterprise may 
        prepay the salary or any liability or legal expense of any 
        affiliated party if such payment is made--
                    ``(A) in contemplation of the insolvency of such 
                enterprise, or after the commission of an act of 
                insolvency; and
                    ``(B) with a view to, or has the result of--
                            ``(i) preventing the proper application of 
                        the assets of the enterprise to creditors; or
                            ``(ii) preferring one creditor over 
                        another.
            ``(4) Golden parachute payment defined.--For purposes of 
        this subsection--
                    ``(A) In general.--The term `golden parachute 
                payment' means any payment (or any agreement to make 
                any payment) in the nature of compensation by any 
                enterprise for the benefit of any affiliated party 
                pursuant to an obligation of such enterprise that--
                            ``(i) is contingent on the termination of 
                        such party's affiliation with the enterprise; 
                        and
                            ``(ii) is received on or after the date on 
                        which--
                                    ``(I) the enterprise became 
                                insolvent;
                                    ``(II) any conservator or receiver 
                                is appointed for such enterprise; or
                                    ``(III) the Agency determines that 
                                the enterprise is in a troubled 
                                condition (as defined in the 
                                regulations of the Agency).
                    ``(B) Certain payments in contemplation of an 
                event.--Any payment which would be a golden parachute 
                payment but for the fact that such payment was made 
                before the date referred to in subparagraph (A)(ii) 
                shall be treated as a golden parachute payment if the 
                payment was made in contemplation of the occurrence of 
                an event described in any subclause of such 
                subparagraph.
                    ``(C) Certain payments not included.--The term 
                `golden parachute payment' shall not include--
                            ``(i) any payment made pursuant to a 
                        retirement plan which is qualified (or is 
                        intended to be qualified) under section 401 of 
                        the Internal Revenue Code of 1986 or other 
                        nondiscriminatory benefit plan;
                            ``(ii) any payment made pursuant to a bona 
                        fide deferred compensation plan or arrangement 
                        which the Board determines, by regulation or 
                        order, to be permissible; or
                            ``(iii) any payment made by reason of the 
                        death or disability of an affiliated party.
            ``(5) Other definitions.--For purposes of this subsection--
                    ``(A) Indemnification payment.--Subject to 
                paragraph (6), the term `indemnification payment' means 
                any payment (or any agreement to make any payment) by 
                any enterprise for the benefit of any person who is or 
                was an affiliated party, to pay or reimburse such 
                person for any liability or legal expense with regard 
                to any administrative proceeding or civil action 
                instituted by the Agency which results in a final order 
                under which such person--
                            ``(i) is assessed a civil money penalty;
                            ``(ii) is removed or prohibited from 
                        participating in conduct of the affairs of the 
                        enterprise; or
                            ``(iii) is required to take any affirmative 
                        action to correct certain conditions resulting 
                        from violations or practices, by order of the 
                        Agency.
                    ``(B) Liability or legal expense.--The term 
                `liability or legal expense' means--
                            ``(i) any legal or other professional 
                        expense incurred in connection with any claim, 
                        proceeding, or action;
                            ``(ii) the amount of, and any cost incurred 
                        in connection with, any settlement of any 
                        claim, proceeding, or action; and
                            ``(iii) the amount of, and any cost 
                        incurred in connection with, any judgment or 
                        penalty imposed with respect to any claim, 
                        proceeding, or action.
                    ``(C) Payment.--The term ``payment'' includes--
                            ``(i) any direct or indirect transfer of 
                        any funds or any asset; and
                            ``(ii) any segregation of any funds or 
                        assets for the purpose of making, or pursuant 
                        to an agreement to make, any payment after the 
                        date on which such funds or assets are 
                        segregated, without regard to whether the 
                        obligation to make such payment is contingent 
                        on--
                                    ``(I) the determination, after such 
                                date, of the liability for the payment 
                                of such amount; or
                                    ``(II) the liquidation, after such 
                                date, of the amount of such payment.
            ``(6) Certain commercial insurance coverage not treated as 
        covered benefit payment.--No provision of this subsection shall 
        be construed as prohibiting any enterprise from purchasing any 
        commercial insurance policy or fidelity bond, except that, 
        subject to any requirement described in paragraph (5)(A)(iii), 
        such insurance policy or bond shall not cover any legal or 
        liability expense of the enterprise which is described in 
        paragraph (5)(A).''.

SEC. 112. REPORTING OF FRAUDULENT LOANS.

    Subtitle C of part 1 of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (12 U.S.C. 4631 et seq.), as amended 
by this Act, is amended by adding at the end the following:

``SEC. 1379E. REPORTING OF FRAUDULENT LOANS.

    ``The Director shall, by regulation, require the regulated entities 
to timely report to the Director when the regulated entity discovers it 
has purchased or sold a fraudulent loan.''.

             Subtitle B--Improvement of Mission Supervision

SEC. 121. TRANSFER OF PROGRAM APPROVAL AND HOUSING GOAL OVERSIGHT.

    Part 2 of subtitle A of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (12 U.S.C. 4541 et seq.) is amended--
            (1) by striking the heading for the part and inserting the 
        following:

``PART 2--PROGRAM APPROVAL BY THE DIRECTOR AND ESTABLISHMENT OF HOUSING 
                                GOALS'';

        and
            (2) by striking sections 1321 and 1322.

SEC. 122. REVIEW OF ENTERPRISE PROGRAMS.

    Part 1 of subtitle A of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.), as amended 
by this Act, is amended by adding at the end the following:

``SEC. 1319J. PRIOR APPROVAL AUTHORITY FOR NEW PROGRAMS.

    ``(a) In General.--The Director shall have authority to review the 
appropriateness and permissibility of any enterprise activities to 
assure their conformance with the purposes of this title and with the 
purposes of the Federal Home Loan Mortgage Corporation Act and the 
Federal National Mortgage Association Charter Act, and to protect the 
safety and soundness of the enterprises. The Director may require 
written applications before an activity is, or before certain types of 
activities are, commenced. It may review any activity after an 
enterprise has commenced it. The Director may prohibit or limit any 
activity that it determines to be inappropriate or impermissible under 
this section.
    ``(b) Notice of New Activity.--An enterprise that commences any 
business product or activity under this section shall provide written 
notice to the Director of the business product or activity not later 
than 30 days prior to the commencement of such business product or 
activity.
    ``(c) No Limitation.--Nothing in this section shall be deemed to 
restrict the safety and soundness authority of the Director over all 
new and existing programs, products, or activities.''.

SEC. 123. AUTHORITY TO REQUIRE REPORTS BY ENTERPRISES.

    The Federal Housing Enterprises Financial Safety and Soundness Act 
of 1992 (12 U.S.C. 4501 et seq.) is amended by striking sections 1327 
and 1328.

SEC. 124. MONITORING AND ENFORCING COMPLIANCE WITH HOUSING GOALS.

    Section 1336 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4566) is amended--
            (1) by striking ``Secretary'' each place that term appears 
        and inserting ``Director''; and
            (2) in subsection (a)(1), by striking ``established'' and 
        all that follows through ``1334'' and inserting ``under this 
        subpart''.

SEC. 125. ASSUMPTION BY DIRECTOR OF OTHER HUD RESPONSIBILITIES.

    (a) In General.--Part 2 of subtitle A of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4541 
et seq.) is amended--
            (1) by striking ``Secretary'' each place that term appears 
        and inserting ``Director'' in each of--
                    (A) sections 1323, 1324, and 1326;
                    (B) subsections (a), (b), and (c) of section 1331 
                (12 U.S.C. 4561);
                    (C) subsections (a), (b), and (c) of section 1332 
                (12 U.S.C. 4562);
                    (D) subsections (a), (b), and (c) of section 1333 
                (12 U.S.C. 4563);
                    (E) subsections (a), (b), and (c) of section 1334 
                (12 U.S.C. 4564); and
                    (F) subsections (a), (b), and (c) of section 1336 
                (12 U.S.C. 4566);
            (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) by striking sections 1337 and 1338 (12 U.S.C. 4567, 
        4562 note); and
            (6) by striking section 1349 (12 U.S.C. 4589).
    (b) Retention of Fair Housing Responsibilities.--Section 1325 of 
the Federal Housing Enterprises Financial Safety and Soundness 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''.

SEC. 126. ADMINISTRATIVE AND JUDICIAL ENFORCEMENT PROCEEDINGS.

    Subpart C of part 2 of subtitle A of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4581 
et seq.) is amended by striking ``Secretary'' each place that term 
appears and inserting ``Director,'' in each of--
            (1) section 1341 (12 U.S.C. 4581);
            (2) section 1342 (12 U.S.C. 4582);
            (3) section 1343 (12 U.S.C. 4583);
            (4) section 1344 (12 U.S.C. 4584);
            (5) section 1345 (12 U.S.C. 4585);
            (6) section 1346 (12 U.S.C. 4586);
            (7) section 1347 (12 U.S.C. 4587); and
            (8) section 1348 (12 U.S.C. 4588).

                  Subtitle C--Prompt Corrective Action

SEC. 141. CAPITAL CLASSIFICATIONS.

    Section 1364 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4614) is amended--
            (1) by striking subsection (b) and inserting the following:
    ``(b) Discretionary Classification.--
            ``(1) Grounds for reclassification.--The Director may 
        reclassify a regulated entity under paragraph (2) if--
                    ``(A) at any time, the Director determines in 
                writing that a regulated entity 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 regulated entity, or the 
                value of collateral pledged as security, has decreased 
                significantly;
                    ``(B) after notice and an opportunity for hearing, 
                the Director determines that a regulated entity is in 
                an unsafe or unsound condition; or
                    ``(C) pursuant to section 1371(b), the Director 
                determines that a regulated entity is engaging in an 
                unsafe or unsound practice.
            ``(2) Reclassification.--In addition to any other action 
        authorized under this title, including the reclassification of 
        a regulated entity for any reason not specified in this 
        subsection, if the Director takes any action described in 
        paragraph (1), the Director may reclassify a regulated entity--
                    ``(A) as `undercapitalized', if the regulated 
                entity is otherwise classified as adequately 
                capitalized;
                    ``(B) as `significantly undercapitalized', if the 
                regulated entity is otherwise classified as 
                undercapitalized; and
                    ``(C) as `critically undercapitalized', if the 
                regulated entity is otherwise classified as 
                significantly undercapitalized.'';
            (2) by redesignating subsection (d) as subsection (e); and
            (3) by inserting after subsection (c) the following:
    ``(d) Restriction on Capital Distributions.--
            ``(1) In general.--A regulated entity shall make no capital 
        distribution if, after making the distribution, the regulated 
        entity would be undercapitalized.
            ``(2) Exception.--Notwithstanding paragraph (1), the 
        Director may permit a regulated entity to repurchase, redeem, 
        retire, or otherwise acquire shares or ownership interests if 
        the repurchase, redemption, retirement, or other acquisition--
                    ``(A) is made in connection with the issuance of 
                additional shares or obligations of the regulated 
                entity in at least an equivalent amount; and
                    ``(B) will reduce the financial obligations of the 
                regulated entity or otherwise improve the financial 
                condition of the regulated entity.''.

SEC. 142. SUPERVISORY ACTIONS APPLICABLE TO UNDERCAPITALIZED REGULATED 
              ENTITIES.

    Section 1365 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4615) is amended--
            (1) by striking ``the enterprise'' each place that term 
        appears and inserting ``the regulated entity'';
            (2) by striking ``An enterprise'' each place that term 
        appears and inserting ``A regulated entity'';
            (3) by striking ``an enterprise'' each place that term 
        appears and inserting ``a regulated entity'';
            (4) in subsection (a)--
                    (A) by redesignating paragraphs (1) and (2) as 
                paragraphs (2) and (3), respectively;
                    (B) by inserting before paragraph (2), as 
                redesignated, the following:
            ``(1) Required monitoring.--The Director shall--
                    ``(A) closely monitor the condition of any 
                undercapitalized regulated entity;
                    ``(B) closely monitor compliance with the capital 
                restoration plan, restrictions, and requirements 
                imposed on an undercapitalized regulated entity under 
                this section; and
                    ``(C) periodically review the plan, restrictions, 
                and requirements applicable to an undercapitalized 
                regulated entity to determine whether the plan, 
                restrictions, and requirements are achieving the 
                purpose of this section.''; and
                    (C) by adding at the end the following:
            ``(4) Restriction of asset growth.--An undercapitalized 
        regulated entity 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 Director has accepted the capital 
                restoration plan of the regulated entity;
                    ``(B) any increase in total assets is consistent 
                with the capital restoration plan; and
                    ``(C) the ratio of tangible equity to assets of the 
                regulated entity 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 new activities.--
        An undercapitalized regulated entity shall not, directly or 
        indirectly, acquire any interest in any entity or engage in any 
new activity, unless--
                    ``(A) the Director has accepted the capital 
                restoration plan of the regulated entity, the regulated 
                entity is implementing the plan, and the Director 
                determines that the proposed action is consistent with 
                and will further the achievement of the plan; or
                    ``(B) the Director determines that the proposed 
                action will further the purpose of this subtitle.'';
            (5) in subsection (b)--
                    (A) in the subsection heading, by striking 
                ``Discretionary'';
                    (B) in the matter preceding paragraph (1), by 
                striking ``may'' and inserting ``shall''; and
                    (C) in paragraph (2)--
                            (i) by striking ``make, in good faith, 
                        reasonable efforts necessary to''; and
                            (ii) by striking the period at the end and 
                        inserting ``in any material respect.''; and
            (6) by striking subsection (c) and inserting the following:
    ``(c) Other Discretionary Safeguards.--The Director may take, with 
respect to an undercapitalized regulated entity, any of the actions 
authorized to be taken under section 1366 with respect to a 
significantly undercapitalized regulated entity, if the Director 
determines that such actions are necessary to carry out the purpose of 
this subtitle.''.

SEC. 143. SUPERVISORY ACTIONS APPLICABLE TO SIGNIFICANTLY 
              UNDERCAPITALIZED REGULATED ENTITIES.

    Section 1366 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4616) is amended--
            (1) by striking ``the enterprise'' each place that term 
        appears and inserting ``the regulated entity'';
            (2) by striking ``An enterprise'' each place that term 
        appears and inserting ``A regulated entity'';
            (3) by striking ``an enterprise'' each place that term 
        appears and inserting ``a regulated entity'';
            (4) 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 striking paragraph (6);
                    (D) by redesignating paragraph (5) as paragraph 
                (6);
                    (E) by inserting after paragraph (4) the following:
            ``(5) Improvement of management.--Take 1 or more of the 
        following actions:
                    ``(A) New election of board.--Order a new election 
                for the board of directors of the regulated entity.
                    ``(B) Dismissal of directors or executive 
                officers.--Require the regulated entity to dismiss from 
                office any director or executive officer who had held 
                office for more than 180 days immediately before the 
                date on which the regulated entity became 
                undercapitalized. Dismissal under this subparagraph 
                shall not be construed to be a removal pursuant to the 
                enforcement powers of the Director under section 1377.
                    ``(C) Employ qualified executive officers.--Require 
                the regulated entity to employ qualified executive 
                officers (who, if the Director so specifies, shall be 
                subject to approval by the Director).''; and
                    (F) by adding at the end the following:
            ``(8) Other action.--Require the regulated entity to take 
        any other action that the Director determines will better carry 
        out the purpose of this section than any of the actions 
        specified in this paragraph.'';
            (5) by redesignating subsection (c) as subsection (d); and
            (6) by inserting after subsection (b) the following:
    ``(c) Restriction on Compensation of Executive Officers.--A 
regulated entity that is classified as significantly undercapitalized 
in accordance with section 1364 may not, without prior written approval 
by the Director--
            ``(1) pay any bonus to any executive officer; or
            ``(2) provide compensation to any executive officer at a 
        rate exceeding the average rate of compensation of that officer 
        (excluding bonuses, stock options, and profit sharing) during 
        the 12 calendar months preceding the calendar month in which 
        the regulated entity became significantly undercapitalized.''.

SEC. 144. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED ENTERPRISES.

    (a) In General.--Section 1367 of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4617) is amended 
to read as follows:

``SEC. 1367. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED ENTERPRISES.

    ``(a) Appointment of the Agency as Conservator or Receiver.--
            ``(1) In general.--Notwithstanding any other provision of 
        Federal law, the Director may establish a conservatorship or 
        receivership in the manner provided under paragraph (2).
            ``(2) Appointment.--The Agency may, at the discretion of 
        the Director, be appointed conservator or receiver for the 
        purpose of reorganizing, rehabilitating, or winding up the 
        affairs of an enterprise.
            ``(3) Grounds for appointing conservator or receiver.--The 
        grounds for appointing a conservator or receiver for any 
        enterprise are as follows:
                    ``(A) Assets insufficient for obligations.--The 
                assets of the enterprise are less than the obligations 
                of the enterprise to its creditors and others.
                    ``(B) Substantial dissipation.--Substantial 
                dissipation of assets or earnings due to--
                            ``(i) any violation of any provision of 
                        Federal or State law; or
                            ``(ii) any unsafe or unsound practice.
                    ``(C) Unsafe or unsound condition.--An unsafe or 
                unsound condition to transact business.
                    ``(D) Cease-and-desist orders.--Any willful 
                violation of a cease-and-desist order that has become 
                final.
                    ``(E) Concealment.--Any concealment of the books, 
                papers, records, or assets of the enterprise, or any 
                refusal to submit the books, papers, records, or 
                affairs of the enterprise, for inspection to any 
                examiner or to any lawful agent of the Director.
                    ``(F) Inability to meet obligations.--The 
                enterprise is likely to be unable to pay its 
                obligations or meet the demands of its creditors in the 
                normal course of business.
                    ``(G) Losses.--The enterprise has incurred or is 
                likely to incur losses that will deplete all or 
                substantially all of its capital, and there is no 
                reasonable prospect for the enterprise to become 
                adequately capitalized (as defined in section 
                1364(a)(1)).
                    ``(H) Violations of law.--Any violation of any law 
                or regulation, or any unsafe or unsound practice or 
                condition that is likely to--
                            ``(i) cause insolvency or substantial 
                        dissipation of assets or earnings; or
                            ``(ii) weaken the condition of the 
                        enterprise.
                    ``(I) Consent.--The enterprise, by resolution of 
                its board of directors or its shareholders or members, 
                consents to the appointment.
                    ``(J) Undercapitalization.--The enterprise is 
                undercapitalized or significantly undercapitalized (as 
                defined in section 1364(a)(3)), and--
                            ``(i) has no reasonable prospect of 
                        becoming adequately capitalized;
                            ``(ii) fails to become adequately 
                        capitalized, as required by--
                                    ``(I) section 1365(a)(1) with 
                                respect to an undercapitalized 
                                enterprise; or
                                    ``(II) section 1366(a)(1) with 
                                respect to a significantly 
                                undercapitalized enterprise;
                            ``(iii) fails to submit a capital 
                        restoration plan acceptable to the Agency 
                        within the time prescribed under section 1369C; 
                        or
                            ``(iv) materially fails to implement a 
                        capital restoration plan submitted and accepted 
                        under section 1369C.
                    ``(K) Critical undercapitalization.--The enterprise 
                is critically undercapitalized, as defined in section 
                1364(a)(4).
                    ``(L) Money laundering.--The Attorney General 
                notifies the Director in writing that the enterprise 
                has been found guilty of a criminal offense under 
                section 1956 or 1957 of title 18, United States Code, 
                or section 5322 or 5324 of title 31, United States 
                Code.
            ``(4) Judicial review.--
                    ``(A) In general.--If the Agency is appointed 
                conservator or receiver under this section, the 
                enterprise may, within 30 days of such appointment, 
                bring an action in the United States District Court for 
                the judicial district in which the home office of such 
                enterprise is located, or in the United States District 
                Court for the District of Columbia, for an order 
                requiring the Agency to remove itself as conservator or 
                receiver.
                    ``(B) Review.--Upon the filing of an action under 
                subparagraph (A), the court shall, upon the merits, 
                dismiss such action or direct the Agency to remove 
                itself as such conservator or receiver.
            ``(5) Directors not liable for acquiescing in appointment 
        of conservator or receiver.--The members of the board of 
        directors of an enterprise shall not be liable to the 
        shareholders or creditors of the enterprise for acquiescing in 
        or consenting in good faith to the appointment of the Agency as 
        conservator or receiver for that enterprise.
            ``(6) Agency not subject to any other Federal agency.--When 
        acting as conservator or receiver, the Agency shall not be 
        subject to the direction or supervision of any other agency of 
        the United States or any State in the exercise of the rights, 
        powers, and privileges of the Agency.
    ``(b) Powers and Duties of the Agency as Conservator or Receiver.--
            ``(1) Rulemaking authority of the agency.--The Agency may 
        prescribe such regulations as the Agency determines to be 
        appropriate regarding the conduct of conservatorships or 
        receiverships.
            ``(2) General powers.--
                    ``(A) Successor to enterprise.--The Agency shall, 
                as conservator or receiver, and by operation of law, 
                immediately succeed to--
                            ``(i) all rights, titles, powers, and 
                        privileges of the enterprise, and of any 
                        stockholder, officer, or director of such 
                        enterprise with respect to the enterprise and 
                        the assets of the enterprise; and
                            ``(ii) title to the books, records, and 
                        assets of any other legal custodian of such 
                        enterprise.
                    ``(B) Operate the enterprise.--The Agency may, as 
                conservator or receiver--
                            ``(i) take over the assets of and operate 
                        the enterprise with all the powers of the 
                        shareholders, the directors, and the officers 
                        of the enterprise and conduct all business of 
                        the enterprise;
                            ``(ii) collect all obligations and money 
                        due the enterprise;
                            ``(iii) perform all functions of the 
                        enterprise in the name of the enterprise which 
                        are consistent with the appointment as 
                        conservator or receiver; and
                            ``(iv) preserve and conserve the assets and 
                        property of such enterprise.
                    ``(C) Functions of officers, directors, and 
                shareholders of an enterprise.--The Agency may, by 
                regulation or order, provide for the exercise of any 
                function by any stockholder, director, or officer of 
                any enterprise for which the Agency has been named 
                conservator or receiver.
                    ``(D) Powers as conservator.--The Agency may, as 
                conservator, take such action as may be--
                            ``(i) necessary to put the enterprise in a 
                        sound and solvent condition; and
                            ``(ii) appropriate to carry on the business 
                        of the enterprise and preserve and conserve the 
                        assets and property of the enterprise.
                    ``(E) Additional powers as receiver.--The Agency 
                may, as receiver, place the enterprise in liquidation 
                and proceed to realize upon the assets of the 
                enterprise, having due regard to the conditions of the 
                housing finance market.
                    ``(F) Organization of new enterprises.--The Agency 
                may, as receiver, organize a successor enterprise that 
                will operate pursuant to subsection (i).
                    ``(G) Transfer of assets and liabilities.--The 
                Agency may, as conservator or receiver, transfer any 
                asset or liability of the enterprise in default without 
                any approval, assignment, or consent with respect to 
                such transfer.
                    ``(H) Payment of valid obligations.--The Agency, as 
                conservator or receiver, shall, to the extent of 
                proceeds realized from the performance of contracts or 
                sale of the assets of an enterprise, pay all valid 
                obligations of the enterprise in accordance with the 
                prescriptions and limitations of this section.
                    ``(I) Subpoena authority.--
                            ``(i) In general.--
                                    ``(I) In general.--The Agency may, 
                                as conservator or receiver, and for 
                                purposes of carrying out any power, 
                                authority, or duty with respect to an 
                                enterprise (including determining any 
                                claim against the enterprise and 
                                determining and realizing upon any 
                                asset of any person in the course of 
                                collecting money due the enterprise), 
                                exercise any power established under 
                                section 1348.
                                    ``(II) Applicability of law.--The 
                                provisions of section 1348 shall apply 
                                with respect to the exercise of any 
                                power exercised under this subparagraph 
                                in the same manner as such provisions 
                                apply under that section.
                            ``(ii) Authority of director.--A subpoena 
                        or subpoena duces tecum may be issued under 
                        clause (i) only by, or with the written 
                        approval of, the Director, or the designee of 
                        the Director.
                            ``(iii) Rule of construction.--This 
                        subsection shall not be construed to limit any 
                        rights that the Agency, in any capacity, might 
                        otherwise have under section 1317 or 1379B.
                    ``(J) Incidental powers.--The Agency may, as 
                conservator or receiver--
                            ``(i) exercise all powers and authorities 
                        specifically granted to conservators or 
                        receivers, respectively, under this section, 
                        and such incidental powers as shall be 
                        necessary to carry out such powers; and
                            ``(ii) take any action authorized by this 
                        section, which the Agency determines is in the 
                        best interests of the enterprise or the Agency.
            ``(3) Authority of receiver to determine claims.--
                    ``(A) In general.--The Agency may, as receiver, 
                determine claims in accordance with the requirements of 
                this subsection and any regulations prescribed under 
                paragraph (4).
                    ``(B) Notice requirements.--The receiver, in any 
                case involving the liquidation or winding up of the 
                affairs of a closed enterprise, shall--
                            ``(i) promptly publish a notice to the 
                        creditors of the enterprise to present their 
                        claims, together with proof, to the receiver by 
                        a date specified in the notice which shall be 
                        not less than 90 days after the publication of 
                        such notice; and
                            ``(ii) republish such notice approximately 
                        1 month and 2 months, respectively, after the 
                        publication under clause (i).
                    ``(C) Mailing required.--The receiver shall mail a 
                notice similar to the notice published under 
                subparagraph (B)(i) at the time of such publication to 
                any creditor shown on the books of the enterprise--
                            ``(i) at the last address of the creditor 
                        appearing in such books; or
                            ``(ii) upon discovery of the name and 
                        address of a claimant not appearing on the 
                        books of the enterprise within 30 days after 
                        the discovery of such name and address.
            ``(4) Rulemaking authority relating to determination of 
        claims.--Subject to subsection (c), the Director may prescribe 
        regulations regarding the allowance or disallowance of claims 
        by the receiver and providing for administrative determination 
        of claims and review of such determination.
            ``(5) Procedures for determination of claims.--
                    ``(A) Determination period.--
                            ``(i) In general.--Before the end of the 
                        180-day period beginning on the date on which 
                        any claim against an enterprise is filed with 
                        the Agency as receiver, the Agency shall 
                        determine whether to allow or disallow the 
                        claim and shall notify the claimant of any 
                        determination with respect to such claim.
                            ``(ii) Extension of time.--The period 
                        described in clause (i) may be extended by a 
                        written agreement between the claimant and the 
                        Agency.
                            ``(iii) Mailing of notice sufficient.--The 
                        requirements of clause (i) shall be deemed to 
                        be satisfied if the notice of any determination 
                        with respect to any claim is mailed to the last 
                        address of the claimant which appears--
                                    ``(I) on the books of the 
                                enterprise;
                                    ``(II) in the claim filed by the 
                                claimant; or
                                    ``(III) in documents submitted in 
                                proof of the claim.
                            ``(iv) Contents of notice of 
                        disallowance.--If any claim filed under clause 
                        (i) is disallowed, the notice to the claimant 
                        shall contain--
                                    ``(I) a statement of each reason 
                                for the disallowance; and
                                    ``(II) the procedures available for 
                                obtaining agency review of the 
                                determination to disallow the claim or 
                                judicial determination of the claim.
                    ``(B) Allowance of proven claim.--The receiver 
                shall allow any claim received on or before the date 
                specified in the notice published under paragraph 
                (3)(B)(i) by the receiver from any claimant which is 
                proved to the satisfaction of the receiver.
                    ``(C) Disallowance of claims filed after end of 
                filing period.--Claims filed after the date specified 
                in the notice published under paragraph (3)(B)(i), or 
                the date specified under paragraph (3)(C), shall be 
                disallowed and such disallowance shall be final.
                    ``(D) Authority to disallow claims.--
                            ``(i) In general.--The receiver may 
                        disallow any portion of any claim by a creditor 
                        or claim of security, preference, or priority 
                        which is not proved to the satisfaction of the 
                        receiver.
                            ``(ii) Payments to less than fully secured 
                        creditors.--In the case of a claim of a 
                        creditor against an enterprise which is secured 
                        by any property or other asset of such 
                        enterprise, the receiver may treat the portion 
                        of such claim which exceeds an amount equal to 
                        the fair market value of such property or other 
                        asset as an unsecured claim against the 
                        enterprise.
                            ``(iii) Exceptions.--No provision of this 
                        paragraph shall apply with respect to--
                                    ``(I) any extension of credit from 
                                any Federal Reserve Bank or the United 
                                States Treasury; or
                                    ``(II) any security interest in the 
                                assets of the enterprise securing any 
                                such extension of credit.
                    ``(E) No judicial review of determination pursuant 
                to subparagraph (d).--No court may review the 
                determination of the Agency under subparagraph (D) to 
                disallow a claim.
                    ``(F) Legal effect of filing.--
                            ``(i) Statute of limitation tolled.--For 
                        purposes of any applicable statute of 
                        limitations, the filing of a claim with the 
                        receiver shall constitute a commencement of an 
                        action.
                            ``(ii) No prejudice to other actions.--
                        Subject to paragraph (10), the filing of a 
                        claim with the receiver shall not prejudice any 
                        right of the claimant to continue any action 
                        which was filed before the date of the 
                        appointment of the receiver, subject to the 
                        determination of claims by the receiver.
            ``(6) Provision for judicial determination of claims.--
                    ``(A) In general.--The claimant may file suit on a 
                claim (or continue an action commenced before the 
                appointment of the receiver) in the district or 
                territorial court of the United States for the district 
                within which the principal place of business of the 
                enterprise is located or the United States District 
                Court for the District of Columbia (and such court 
                shall have jurisdiction to hear such claim), before the 
                end of the 60-day period beginning on the earlier of--
                            ``(i) the end of the period described in 
                        paragraph (5)(A)(i) with respect to any claim 
                        against an enterprise for which the Agency is 
                        receiver; or
                            ``(ii) the date of any notice of 
                        disallowance of such claim pursuant to 
                        paragraph (5)(A)(i).
                    ``(B) Statute of limitations.--A claim shall be 
                deemed to be disallowed (other than any portion of such 
                claim which was allowed by the receiver), and such 
                disallowance shall be final, and the claimant shall 
                have no further rights or remedies with respect to such 
                claim, if the claimant fails, before the end of the 60-
                day period described under subparagraph (A), to file 
                suit on such claim (or continue an action commenced 
                before the appointment of the receiver).
            ``(7) Review of claims.--
                    ``(A) Other review procedures.--
                            ``(i) In general.--The Agency shall 
                        establish such alternative dispute resolution 
                        processes as may be appropriate for the 
                        resolution of claims filed under paragraph 
                        (5)(A)(i).
                            ``(ii) Criteria.--In establishing 
                        alternative dispute resolution processes, the 
                        Agency shall strive for procedures which are 
                        expeditious, fair, independent, and low cost.
                            ``(iii) Voluntary binding or nonbinding 
                        procedures.--The Agency may establish both 
                        binding and nonbinding processes, which may be 
                        conducted by any government or private party. 
                        All parties, including the claimant and the 
                        Agency, must agree to the use of the process in 
                        a particular case.
                    ``(B) Consideration of incentives.--The Agency 
                shall seek to develop incentives for claimants to 
                participate in the alternative dispute resolution 
                process.
            ``(8) Expedited determination of claims.--
                    ``(A) Establishment required.--The Agency shall 
                establish a procedure for expedited relief outside of 
                the routine claims process established under paragraph 
                (5) for claimants who--
                            ``(i) allege the existence of legally valid 
                        and enforceable or perfected security interests 
                        in assets of any enterprise for which the 
                        Agency has been appointed receiver; and
                            ``(ii) allege that irreparable injury will 
                        occur if the routine claims procedure is 
                        followed.
                    ``(B) Determination period.--Before the end of the 
                90-day period beginning on the date any claim is filed 
                in accordance with the procedures established under 
                subparagraph (A), the Director shall--
                            ``(i) determine--
                                    ``(I) whether to allow or disallow 
                                such claim; or
                                    ``(II) whether such claim should be 
                                determined pursuant to the procedures 
                                established under paragraph (5); and
                            ``(ii) notify the claimant of the 
                        determination, and if the claim is disallowed, 
                        provide a statement of each reason for the 
                        disallowance and the procedure for obtaining 
                        agency review or judicial determination.
                    ``(C) Period for filing or renewing suit.--Any 
                claimant who files a request for expedited relief shall 
                be permitted to file a suit, or to continue a suit 
                filed before the appointment of the receiver, seeking a 
                determination of the rights of the claimant with 
                respect to such security interest after the earlier 
                of--
                            ``(i) the end of the 90-day period 
                        beginning on the date of the filing of a 
                        request for expedited relief; or
                            ``(ii) the date the Agency denies the 
                        claim.
                    ``(D) Statute of limitations.--If an action 
                described under subparagraph (C) is not filed, or the 
                motion to renew a previously filed suit is not made, 
                before the end of the 30-day period beginning on the 
                date on which such action or motion may be filed under 
                subparagraph (B), the claim shall be deemed to be 
                disallowed as of the end of such period (other than any 
                portion of such claim which was allowed by the 
                receiver), such disallowance shall be final, and the 
                claimant shall have no further rights or remedies with 
                respect to such claim.
                    ``(E) Legal effect of filing.--
                            ``(i) Statute of limitation tolled.--For 
                        purposes of any applicable statute of 
                        limitations, the filing of a claim with the 
                        receiver shall constitute a commencement of an 
                        action.
                            ``(ii) No prejudice to other actions.--
                        Subject to paragraph (10), the filing of a 
                        claim with the receiver shall not prejudice any 
                        right of the claimant to continue any action 
                        that was filed before the appointment of the 
                        receiver, subject to the determination of 
                        claims by the receiver.
            ``(9) Payment of claims.--
                    ``(A) In general.--The receiver may, in the 
                discretion of the receiver, and to the extent funds are 
                available, pay creditor claims, in such manner and 
                amounts as are authorized under this section, which 
                are--
                            ``(i) allowed by the receiver;
                            ``(ii) approved by the Agency pursuant to a 
                        final determination pursuant to paragraph (7) 
                        or (8); or
                            ``(iii) determined by the final judgment of 
                        any court of competent jurisdiction.
                    ``(B) Agreements against the interest of the 
                Agency.--No agreement that tends to diminish or defeat 
                the interest of the Agency in any asset acquired by the 
                Agency as receiver under this section shall be valid 
                against the Agency unless such agreement is in writing.
                    ``(C) Payment of dividends on claims.--The receiver 
                may, in the sole discretion of the receiver, pay 
                dividends on proved claims at any time, and no 
                liability shall attach to the Agency, by reason of any 
                such payment, for failure to pay dividends to a 
                claimant whose claim is not proved at the time of any 
                such payment.
                    ``(C) Rulemaking authority of the director.--The 
                Director may prescribe such rules, including 
                definitions of terms, as the Director deems appropriate 
                to establish a single uniform interest rate for, or to 
                make payments of post-insolvency interest to creditors 
                holding proven claims against the receivership estates 
                of enterprises following satisfaction by the receiver 
                of the principal amount of all creditor claims.
            ``(10) Suspension of legal actions.--
                    ``(A) In general.--After the appointment of a 
                conservator or receiver for an enterprise, the 
                conservator or receiver may, in any judicial action or 
                proceeding to which such enterprise is or becomes a 
                party, request a stay for a period not to exceed--
                            ``(i) 45 days, in the case of any 
                        conservator; and
                            ``(ii) 90 days, in the case of any 
                        receiver.
                    ``(B) Grant of stay by all courts required.--Upon 
                receipt of a request by any conservator or receiver 
                under subparagraph (A) for a stay of any judicial 
                action or proceeding in any court with jurisdiction of 
                such action or proceeding, the court shall grant such 
                stay as to all parties.
            ``(11) Additional rights and duties.--
                    ``(A) Prior final adjudication.--The Agency shall 
                abide by any final unappealable judgment of any court 
                of competent jurisdiction which was rendered before the 
                appointment of the Agency as conservator or receiver.
                    ``(B) Rights and remedies of conservator or 
                receiver.--In the event of any appealable judgment, the 
                Agency as conservator or receiver shall--
                            ``(i) have all the rights and remedies 
                        available to the enterprise (before the 
                        appointment of such conservator or receiver) 
                        and the Agency, including removal to Federal 
                        court and all appellate rights; and
                            ``(ii) not be required to post any bond in 
                        order to pursue such remedies.
                    ``(C) No attachment or execution.--No attachment or 
                execution may issue by any court upon assets in the 
                possession of the receiver.
                    ``(D) Limitation on judicial review.--Except as 
                otherwise provided in this subsection, no court shall 
                have jurisdiction over--
                            ``(i) any claim or action for payment from, 
                        or any action seeking a determination of rights 
                        with respect to, the assets of any enterprise 
                        for which the Agency has been appointed 
                        receiver; or
                            ``(ii) any claim relating to any act or 
                        omission of such enterprise or the Agency as 
                        receiver.
                    ``(E) Disposition of assets.--In exercising any 
                right, power, privilege, or authority as conservator or 
                receiver in connection with any sale or disposition of 
                assets of an enterprise for which the Agency has been 
                appointed conservator or receiver, the Agency shall 
                conduct its operations in a manner which--
                            ``(i) maximizes the net present value 
                        return from the sale or disposition of such 
                        assets;
                            ``(ii) minimizes the amount of any loss 
                        realized in the resolution of cases; and
                            ``(iii) ensures adequate competition and 
                        fair and consistent treatment of offerors.
            ``(12) Statute of limitations for actions brought by 
        conservator or receiver.--
                    ``(A) In general.--Notwithstanding any provision of 
                any contract, the applicable statute of limitations 
                with regard to any action brought by the Agency as 
                conservator or receiver shall be--
                            ``(i) in the case of any contract claim, 
                        the longer of--
                                    ``(I) the 6-year period beginning 
                                on the date the claim accrues; or
                                    ``(II) the period applicable under 
                                State law; and
                            ``(ii) in the case of any tort claim, the 
                        longer of--
                                    ``(I) the 3-year period beginning 
                                on the date the claim accrues; or
                                    ``(II) the period applicable under 
                                State law.
                    ``(B) Determination of the date on which a claim 
                accrues.--For purposes of subparagraph (A), the date on 
                which the statute of limitations begins to run on any 
                claim described in such subparagraph shall be the later 
                of--
                            ``(i) the date of the appointment of the 
                        Agency as conservator or receiver; or
                            ``(ii) the date on which the cause of 
                        action accrues.
            ``(13) Revival of expired state causes of action.--
                            ``(i) In general.--In the case of any tort 
                        claim described under clause (ii) for which the 
                        statute of limitations applicable under State 
                        law with respect to such claim has expired not 
                        more than 5 years before the appointment of the 
                        Agency as conservator or receiver, the Agency 
                        may bring an action as conservator or receiver 
                        on such claim without regard to the expiration 
                        of the statute of limitation applicable under 
                        State law.
                            ``(ii) Claims described.--A tort claim 
                        referred to under clause (i) is a claim arising 
                        from fraud, intentional misconduct resulting in 
                        unjust enrichment, or intentional misconduct 
                        resulting in substantial loss to the 
                        enterprise.
            ``(14) Accounting and recordkeeping requirements.--
                    ``(A) In general.--The Agency as conservator or 
                receiver shall, consistent with the accounting and 
                reporting practices and procedures established by the 
                Agency, maintain a full accounting of each 
                conservatorship and receivership or other disposition 
                of an enterprise in default.
                    ``(B) Annual accounting or report.--With respect to 
                each conservatorship or receivership, the Agency shall 
                make an annual accounting or report available to the 
                Board, the Comptroller General of the United States, 
                the Committee on Banking, Housing, and Urban Affairs of 
                the Senate, and the Committee on Financial Services of 
                the House of Representatives.
                    ``(C) Availability of reports.--Any report prepared 
                under subparagraph (B) shall be made available by the 
                Agency upon request to any shareholder of an enterprise 
                or any member of the public.
                    ``(D) Recordkeeping requirement.--After the end of 
                the 6-year period beginning on the date that the 
                conservatorship or receivership is terminated by the 
                Director, the Agency may destroy any records of such 
                enterprise which the Agency, in the discretion of the 
                Agency, determines to be unnecessary unless directed 
                not to do so by a court of competent jurisdiction or 
                governmental agency, or prohibited by law.
            ``(15) Fraudulent transfers.--
                    ``(A) In general.--The Agency, as conservator or 
                receiver, may avoid a transfer of any interest of an 
                enterprise-affiliated party, or any person who the 
                conservator or receiver determines is a debtor of the 
                enterprise, in property, or any obligation incurred by 
                such party or person, that was made within 5 years of 
                the date on which the Agency was appointed conservator 
                or receiver, if such party or person voluntarily or 
                involuntarily made such transfer or incurred such 
                liability with the intent to hinder, delay, or defraud 
                the enterprise, the Agency, the conservator, or 
                receiver.
                    ``(B) Right of recovery.--To the extent a transfer 
                is avoided under subparagraph (A), the conservator or 
                receiver may recover, for the benefit of the 
                enterprise, the property transferred, or, if a court so 
                orders, the value of such property (at the time of such 
                transfer) from--
                            ``(i) the initial transferee of such 
                        transfer or the enterprise-affiliated party or 
                        person for whose benefit such transfer was 
                        made; or
                            ``(ii) any immediate or mediate transferee 
                        of any such initial transferee.
                    ``(C) Rights of transferee or obligee.--The 
                conservator or receiver may not recover under 
                subparagraph (B) from--
                            ``(i) any transferee that takes for value, 
                        including satisfaction or securing of a present 
                        or antecedent debt, in good faith; or
                            ``(ii) any immediate or mediate good faith 
                        transferee of such transferee.
                    ``(D) Rights under this paragraph.--The rights 
                under this paragraph of the conservator or receiver 
                described under subparagraph (A) shall be superior to 
                any rights of a trustee or any other party (other than 
                any party which is a Federal agency) under title 11, 
                United States Code.
            ``(16) Attachment of assets and other injunctive relief.--
        Subject to paragraph (17), any court of competent jurisdiction 
        may, at the request of the conservator or receiver, issue an 
        order in accordance with Rule 65 of the Federal Rules of Civil 
        Procedure, including an order placing the assets of any person 
        designated by the Agency or such conservator under the control 
        of the court, and appointing a trustee to hold such assets.
            ``(17) Standards of proof.--Rule 65 of the Federal Rules of 
        Civil Procedure shall apply with respect to any proceeding 
        under paragraph (16) without regard to the requirement of such 
        rule that the applicant show that the injury, loss, or damage 
        is irreparable and immediate.
            ``(18) Treatment of claims arising from breach of contracts 
        executed by the receiver or conservator.--
                    ``(A) In general.--Notwithstanding any other 
                provision of this subsection, any final and 
                unappealable judgment for monetary damages entered 
                against a receiver or conservator for the breach of an 
                agreement executed or approved in writing by such 
                receiver or conservator after the date of its 
                appointment, shall be paid as an administrative expense 
                of the receiver or conservator.
                    ``(B) No limitation of power.--Nothing in this 
                paragraph shall be construed to limit the power of a 
                receiver or conservator to exercise any rights under 
                contract or law, including to terminate, breach, 
                cancel, or otherwise discontinue such agreement.
            ``(19) General exceptions.--
                    ``(A) Limitations.--The rights of a conservator or 
                receiver appointed under this section shall be subject 
                to the limitations on the powers of a receiver under 
                sections 402 through 407 of the Federal Deposit 
                Insurance Corporation Improvement Act of 1991 (12 
                U.S.C. 4402 through 4407).
                    ``(B) Mortgages held in trust.--
                            ``(i) In general.--Any mortgage, or pool of 
                        mortgages, held in trust, custodial, or agency 
                        capacity by an enterprise shall not be 
                        available to satisfy the claims of creditors 
                        generally.
                            ``(ii) Holding of mortgages.--Any mortgage 
                        or pool of mortgages described under clause (i) 
                        shall be held by the conservator or receiver 
                        appointed under this subsection for the 
                        beneficial owners of such mortgages, under the 
                        terms of the agreement creating such trust, 
                        custodial, or other agency arrangement.
                            ``(iii) Liability of receiver.--The 
                        liability of a receiver appointed under this 
                        section for damages shall, in the case of any 
                        contingent or unliquidated claim relating to 
                        the mortgages held in trust, be estimated in 
                        accordance set forth in the regulations of the 
                        Director.
    ``(c) Priority of Expenses and Unsecured Claims.--
            ``(1) In general.--Unsecured claims against an enterprise, 
        or a receiver, that are proven to the satisfaction of the 
        receiver shall have priority in the following order:
                    ``(A) Administrative expenses of the receiver.
                    ``(B) Any general or senior liability of the 
                enterprise (which is not a liability described under 
                subparagraph (C) or (D).
                    ``(C) Any obligation subordinated to general 
                creditors (which is not an obligation described under 
                subparagraph (D)).
                    ``(D) Any obligation to shareholders or members 
                arising as a result of their status as shareholder or 
                members.
            ``(2) Creditors similarly situated.--All creditors that are 
        similarly situated under paragraph (1) shall be treated in a 
        similar manner.
            ``(3) Definition.--The term `administrative expenses of the 
        receiver' shall include those necessary expenses incurred by 
        the receiver in liquidating or otherwise resolving the affairs 
        of a failed enterprise. Such expenses shall include pre-failure 
        and post-failure obligations that the receiver determines are 
        necessary and appropriate to facilitate the smooth and orderly 
        liquidation or other resolution of the enterprise.
    ``(d) Provisions Relating to Contracts Entered Into Before 
Appointment of Conservator or Receiver.--
            ``(1) Authority to repudiate contracts.--In addition to any 
        other rights a conservator or receiver may have, the 
        conservator or receiver for any enterprise may disaffirm or 
        repudiate any contract or lease--
                    ``(A) to which such enterprise is a party;
                    ``(B) the performance of which the conservator or 
                receiver, in its sole discretion, determines to be 
                burdensome; and
                    ``(C) the disaffirmance or repudiation of which the 
                conservator or receiver determines, in its sole 
                discretion, will promote the orderly administration of 
                the affairs of the enterprise.
            ``(2) Timing of repudiation.--The conservator or receiver 
        shall determine whether or not to exercise the rights of 
        repudiation under this subsection within a reasonable period 
        following such appointment.
            ``(3) Claims for damages for repudiation.--
                    ``(A) In general.--Except as otherwise provided 
                under subparagraph (C) and paragraphs (4), (5), and 
                (6), the liability of the conservator or receiver for 
                the disaffirmance or repudiation of any contract 
                pursuant to paragraph (1) shall be--
                            ``(i) limited to actual direct compensatory 
                        damages; and
                            ``(ii) determined as of--
                                    ``(I) the date of the appointment 
                                of the conservator or receiver; or
                                    ``(II) in the case of any contract 
                                or agreement referred to in paragraph 
                                (8), the date of the disaffirmance or 
                                repudiation of such contract or 
                                agreement.
                    ``(B) No liability for other damages.--For purposes 
                of subparagraph (A), the term `actual direct 
                compensatory damages' shall not include--
                            ``(i) punitive or exemplary damages;
                            ``(ii) damages for lost profits or 
                        opportunity; or
                            ``(iii) damages for pain and suffering.
                    ``(C) Measure of damages for repudiation of 
                financial contracts.--In the case of any qualified 
                financial contract or agreement to which paragraph (8) 
                applies, compensatory damages shall be--
                            ``(i) deemed to include normal and 
                        reasonable costs of cover or other reasonable 
                        measures of damages utilized in the industries 
                        for such contract and agreement claims; and
                            ``(ii) paid in accordance with this 
                        subsection and subsection (f), except as 
                        otherwise specifically provided in this 
                        section.
            ``(4) Leases under which the enterprise is the lessee.--
                    ``(A) In general.--If the conservator or receiver 
                disaffirms or repudiates a lease under which the 
                enterprise was the lessee, the conservator or receiver 
                shall not be liable for any damages (other than damages 
                determined under subparagraph (B)) for the 
                disaffirmance or repudiation of such lease.
                    ``(B) Payments of rent.--Notwithstanding 
                subparagraph (A), the lessor under a lease to which 
                that subparagraph applies shall--
                            ``(i) be entitled to the contractual rent 
                        accruing before the later of the date--
                                    ``(I) the notice of disaffirmance 
                                or repudiation is mailed; or
                                    ``(II) the disaffirmance or 
                                repudiation becomes effective, unless 
                                the lessor is in default or breach of 
                                the terms of the lease;
                            ``(ii) have no claim for damages under any 
                        acceleration clause or other penalty provision 
                        in the lease; and
                            ``(iii) have a claim for any unpaid rent, 
                        subject to all appropriate offsets and 
                        defenses, due as of the date of the 
                        appointment, which shall be paid in accordance 
                        with this subsection and subsection (f).
            ``(5) Leases under which the enterprise is the lessor.--
                    ``(A) In general.--If the conservator or receiver 
                repudiates an unexpired written lease of real property 
                of the enterprise under which the enterprise is the 
                lessor and the lessee is not, as of the date of such 
                repudiation, in default, the lessee under such lease 
                may either--
                            ``(i) treat the lease as terminated by such 
                        repudiation; or
                            ``(ii) remain in possession of the 
                        leasehold interest for the balance of the term 
                        of the lease, unless the lessee defaults under 
                        the terms of the lease after the date of such 
                        repudiation.
                    ``(B) Provisions applicable to lessee remaining in 
                possession.--If any lessee under a lease described 
                under subparagraph (A) remains in possession of a 
                leasehold interest under clause (ii) of such 
                subparagraph--
                            ``(i) the lessee--
                                    ``(I) shall continue to pay the 
                                contractual rent pursuant to the terms 
                                of the lease after the date of the 
                                repudiation of such lease; and
                                    ``(II) may offset against any rent 
                                payment which accrues after the date of 
                                the repudiation of the lease, and any 
                                damages which accrue after such date 
                                due to the nonperformance of any 
                                obligation of the enterprise under the 
                                lease after such date; and
                            ``(ii) the conservator or receiver shall 
                        not be liable to the lessee for any damages 
                        arising after such date as a result of the 
                        repudiation other than the amount of any offset 
                        allowed under clause (i)(II).
            ``(6) Contracts for the sale of real property.--
                    ``(A) In general.--If the conservator or receiver 
                repudiates any contract for the sale of real property 
                and the purchaser of such real property under such 
                contract is in possession, and is not, as of the date 
                of such repudiation, in default, such purchaser may 
                either--
                            ``(i) treat the contract as terminated by 
                        such repudiation; or
                            ``(ii) remain in possession of such real 
                        property.
                    ``(B) Provisions applicable to purchaser remaining 
                in possession.--If any purchaser of real property under 
                any contract described under subparagraph (A) remains 
                in possession of such property under clause (ii) of 
                such subparagraph--
                            ``(i) the purchaser--
                                    ``(I) shall continue to make all 
                                payments due under the contract after 
                                the date of the repudiation of the 
                                contract; and
                                    ``(II) may offset against any such 
                                payments any damages which accrue after 
                                such date due to the nonperformance 
                                (after such date) of any obligation of 
                                the enterprise under the contract; and
                            ``(ii) the conservator or receiver shall--
                                    ``(I) not be liable to the 
                                purchaser for any damages arising after 
                                such date as a result of the 
                                repudiation other than the amount of 
                                any offset allowed under clause 
                                (i)(II);
                                    ``(II) deliver title to the 
                                purchaser in accordance with the 
                                provisions of the contract; and
                                    ``(III) have no obligation under 
                                the contract other than the performance 
                                required under subclause (II).
                    ``(C) Assignment and sale allowed.--
                            ``(i) In general.--No provision of this 
                        paragraph shall be construed as limiting the 
                        right of the conservator or receiver to assign 
                        the contract described under subparagraph (A), 
                        and sell the property subject to the contract 
                        and the provisions of this paragraph.
                            ``(ii) No liability after assignment and 
                        sale.--If an assignment and sale described 
                        under clause (i) is consummated, the 
                        conservator or receiver shall have no further 
                        liability under the contract described under 
                        subparagraph (A), or with respect to the real 
                        property which was the subject of such 
                        contract.
            ``(7) Provisions applicable to service contracts.--
                    ``(A) Services performed before appointment.--In 
                the case of any contract for services between any 
                person and any enterprise for which the Agency has been 
                appointed conservator or receiver, any claim of such 
                person for services performed before the appointment of 
                the conservator or the receiver shall be--
                            ``(i) a claim to be paid in accordance with 
                        subsections (b) and (f); and
                            ``(ii) deemed to have arisen as of the date 
                        the conservator or receiver was appointed.
                    ``(B) Services performed after appointment and 
                prior to repudiation.--If, in the case of any contract 
                for services described under subparagraph (A), the 
                conservator or receiver accepts performance by the 
                other person before the conservator or receiver makes 
                any determination to exercise the right of repudiation 
                of such contract under this section--
                            ``(i) the other party shall be paid under 
                        the terms of the contract for the services 
                        performed; and
                            ``(ii) the amount of such payment shall be 
                        treated as an administrative expense of the 
                        conservatorship or receivership.
                    ``(C) Acceptance of performance no bar to 
                subsequent repudiation.--The acceptance by any 
                conservator or receiver of services referred to under 
                subparagraph (B) in connection with a contract 
                described in such subparagraph shall not affect the 
                right of the conservator or receiver to repudiate such 
                contract under this section at any time after such 
                performance.
            ``(8) Certain qualified financial contracts.--
                    ``(A) Rights of parties to contracts.--Subject to 
                paragraph (10) and notwithstanding any other provision 
                of this Act, any other Federal law, or the law of any 
                State, no person shall be stayed or prohibited from 
                exercising--
                            ``(i) any right to cause the termination or 
                        liquidation of any qualified financial contract 
                        with an enterprise that arises upon the 
                        appointment of the Agency as receiver for such 
                        enterprise at any time after such appointment;
                            ``(ii) any right under any security 
                        arrangement relating to any contract or 
                        agreement described in clause (i); or
                            ``(iii) any right to offset or net out any 
                        termination value, payment amount, or other 
                        transfer obligation arising under or in 
                        connection with 1 or more contracts and 
                        agreements described in clause (i), including 
                        any master agreement for such contracts or 
                        agreements.
                    ``(B) Applicability of other provisions.--
                Subsection (b)(12) shall apply in the case of any 
                judicial action or proceeding brought against any 
                receiver referred to under subparagraph (A), or the 
                enterprise for which such receiver was appointed, by 
                any party to a contract or agreement described under 
                subparagraph (A)(i) with such enterprise.
                    ``(C) Certain transfers not avoidable.--
                            ``(i) In general.--Notwithstanding 
                        paragraph (11), the Agency, whether acting as 
                        such or as conservator or receiver of an 
                        enterprise, may not avoid any transfer of money 
                        or other property in connection with any 
                        qualified financial contract with an 
                        enterprise.
                            ``(ii) Exception for certain transfers.--
                        Clause (i) shall not apply to any transfer of 
                        money or other property in connection with any 
                        qualified financial contract with an enterprise 
                        if the Agency determines that the transferee 
                        had actual intent to hinder, delay, or defraud 
                        such enterprise, the creditors of such 
                        enterprise, or any conservator or receiver 
                        appointed for such enterprise.
                    ``(D) Certain contracts and agreements defined.--In 
                this subsection:
                            ``(i) Qualified financial contract.--The 
                        term `qualified financial contract' means any 
                        securities contract, commodity contract, 
                        forward contract, repurchase agreement, swap 
                        agreement, and any similar agreement that the 
                        Agency determines by regulation to be a 
                        qualified financial contract for purposes of 
                        this paragraph.
                            ``(ii) Securities contract.--The term 
                        `securities contract' has the meaning given to 
                        such term under section 741 of title 11, United 
                        States Code, except that the term `security' 
                        (as used in such section) shall be deemed to 
                        include any mortgage loan, any mortgage-related 
                        security (as defined in section 3(a)(41) of the 
                        Securities Exchange Act of 1934), and any 
                        interest in any mortgage loan or mortgage-
                        related security, and does not include any 
                        participation in a commercial mortgage loan.
                            ``(iii) Commodity contract.--The term 
                        `commodity contract' has the meaning given to 
                        such term in section 761 of title 11, United 
                        States Code.
                            ``(iv) Forward contract.--The term `forward 
                        contract' has the meaning given to such term in 
                        section 101 of title 11, United States Code.
                            ``(v) Repurchase agreement.--The term 
                        `repurchase agreement' has the meaning given to 
                        such term in section 101 of title 11, the 
                        United States Code, except that the items (as 
                        described in such section) which may be subject 
                        to any such agreement shall be deemed to 
                        include mortgage-related securities (as such 
                        term is defined in section 3(a)(41) of the 
                        Securities Exchange Act of 1934), any mortgage 
                        loan, and any interest in any mortgage loan and 
                        does not include any participation in a 
                        commercial mortgage loan unless the Agency 
                        determines by regulation, resolution, or order 
                        to include any such participation within the 
                        meaning of such term.
                            ``(vi) Swap agreement.--The term `swap 
                        agreement'--
                                    ``(I) means any agreement, 
                                including the terms and conditions 
                                incorporated by reference in any such 
                                agreement, which is a rate swap 
                                agreement, basis swap, commodity swap, 
                                forward rate agreement, interest rate 
                                future, interest rate option purchased, 
                                forward foreign exchange agreement, 
                                rate cap agreement, rate floor 
                                agreement, rate collar agreement, 
                                currency swap agreement, cross-currency 
                                rate swap agreement, currency future, 
                                or currency option purchased or any 
                                other similar agreement; and
                                    ``(II) includes any combination of 
                                such agreements and any option to enter 
                                into any such agreement.
                            ``(vii) Treatment of master agreement as 1 
                        qualified financial contract.--Any master 
                        agreement for any agreements described under 
                        this subparagraph, together with all 
                        supplements to such master agreement, shall be 
                        treated as 1 qualified financial contract.
                            ``(viii) Transfer.--The term `transfer' has 
                        the meaning given to such term in section 101 
                        of title 11, United States Code.
                    ``(E) Certain protections in event of appointment 
                of conservator.--Notwithstanding any other provision of 
                this Act (other than paragraph (12) of this 
                subsection), any other Federal law, or the law of any 
                State, no person shall be stayed or prohibited from 
                exercising--
                            ``(i) any right such person has to cause 
                        the termination, liquidation, or acceleration 
                        of any qualified financial contract with an 
                        enterprise in a conservatorship based upon a 
                        default under such financial contract which is 
                        enforceable under applicable noninsolvency law;
                            ``(ii) any right under any security 
                        arrangement relating to such qualified 
                        financial contracts; or
                            ``(iii) any right to offset or net out any 
                        termination values, payment amounts, or other 
                        transfer obligations arising under or in 
                        connection with such qualified financial 
                        contracts.
            ``(9) Transfer of qualified financial contracts.--In making 
        any transfer of assets or liabilities of an enterprise in 
        default which includes any qualified financial contract, the 
        conservator or receiver for such enterprise shall either--
                    ``(A) transfer to 1 person--
                            ``(i) all qualified financial contracts 
                        between--
                                    ``(I) any person (or any affiliate 
                                of such person); and
                                    ``(II) the enterprise in default;
                            ``(ii) all claims of such person (or any 
                        affiliate of such person) against such 
                        enterprise under any such contract (other than 
                        any claim which, under the terms of any such 
                        contract, is subordinated to the claims of 
                        general unsecured creditors of such 
                        enterprise);
                            ``(iii) all claims of such enterprise 
                        against such person (or any affiliate of such 
                        person) under any such contract; and
                            ``(iv) all property securing any claim 
                        described in clause (ii) or (iii) under any 
                        such contract; or
                    ``(B) transfer none of the financial contracts, 
                claims, or property referred to under subparagraph (A) 
                (with respect to such person and any affiliate of such 
                person).
            ``(10) Notification of transfer.--
                    ``(A) In general.--If--
                            ``(i) the conservator or receiver for an 
                        enterprise in default makes any transfer of the 
                        assets and liabilities of such enterprise;
                            ``(ii) the transfer includes any qualified 
                        financial contract; and
                            ``(iii) the conservator or receiver shall 
                        use best efforts to notify any person who is a 
                        party to any such contract of such transfer by 
                        12 p.m. (noon) (Eastern Standard Time) on the 
                        business day following such transfer.
                    ``(B) Business day defined.--For purposes of this 
                paragraph, the term `business day' means any day other 
                than any Saturday, Sunday, or any day on which either 
                the New York Stock Exchange or the Federal Reserve Bank 
                of New York is closed.
            ``(11) Certain security interests not avoidable.--No 
        provision of this subsection shall be construed as permitting 
        the avoidance of any legally enforceable or perfected security 
        interest in any of the assets of any enterprise, except where 
        such an interest is taken in contemplation of the insolvency of 
        the enterprise, or with the intent to hinder, delay, or defraud 
        the enterprise or the creditors of such enterprise.
            ``(12) Authority to enforce contracts.--
                    ``(A) In general.--Notwithstanding any provision of 
                a contract providing for termination, default, 
                acceleration, or exercise of rights upon, or solely by 
                reason of, insolvency or the appointment of a 
                conservator or receiver, the conservator or receiver 
                may enforce any contract, other than a liability 
                insurance of a director or officer, or a contract or an 
                enterprise bond, entered into by the enterprise.
                    ``(B) Certain rights not affected.--No provision of 
                this paragraph may be construed as impairing or 
                affecting any right of the conservator or receiver to 
                enforce or recover under a liability insurance contract 
                of an officer or director, or enterprise bond under 
                other applicable law.
                    ``(C) Consent requirement.--
                            ``(i) In general.--Except as otherwise 
                        provided under this section, no person may 
                        exercise any right or power to terminate, 
                        accelerate, or declare a default under any 
                        contract to which an enterprise is a party, or 
                        to obtain possession of or exercise control 
                        over any property of the enterprise, or affect 
                        any contractual rights of the enterprise, 
                        without the consent of the conservator or 
                        receiver, as appropriate, for a period of--
                                    ``(I) 45 days after the date of 
                                appointment of a conservator; or
                                    ``(II) 90 days after the date of 
                                appointment of a receiver.
                            ``(ii) Exceptions.--This subparagraph 
                        shall--
                                    ``(I) not apply to the liability 
                                insurance contract of an officer or 
                                director;
                                    ``(II) not apply to the rights of 
                                parties to certain qualified financial 
                                contracts under subsection (d)(8); and
                                    ``(III) not be construed as 
                                permitting the conservator or receiver 
                                to fail to comply with otherwise 
                                enforceable provisions of such 
                                contracts.
    ``(e) Valuation of Claims in Default.--
            ``(1) In general.--Notwithstanding any other provision of 
        Federal law or the law of any State, and regardless of the 
        method which the Agency determines to utilize with respect to 
        an enterprise in default or in danger of default, including 
        transactions authorized under subsection (i), this subsection 
        shall govern the rights of the creditors of such enterprise.
            ``(2) Maximum liability.--The maximum liability of the 
        Agency, acting as receiver or in any other capacity, to any 
        person having a claim against the receiver or the enterprise 
        for which such receiver is appointed shall equal the lesser 
        of--
                    ``(A) the amount such claimant would have received 
                if the Agency had liquidated the assets and liabilities 
                of such enterprise without exercising the authority of 
                the Agency under subsection (i) of this section; or
                    ``(B) the amount of proceeds realized from the 
                performance of contracts or sale of the assets of the 
                enterprise.
    ``(f) Limitation on Court Action.--Except as provided in this 
section, no court may take any action, except at the request of the 
Director, by regulation or order, to restrain or affect the exercise of 
powers or functions of the Agency as a conservator or a receiver.
    ``(g) Liability of Directors and Officers.--
            ``(1) In general.--A director or officer of an enterprise 
        may be held personally liable for monetary damages in any civil 
        action by, on behalf of, or at the request or direction of the 
        Agency, which action is prosecuted wholly or partially for the 
        benefit of the Agency--
                    ``(A) acting as conservator or receiver of such 
                enterprise;
                    ``(B) acting based upon a suit, claim, or cause of 
                action purchased from, assigned by, or otherwise 
                conveyed by such receiver or conservator; or
                    ``(C) for gross negligence, including any similar 
                conduct or conduct that demonstrates a greater 
                disregard of a duty of care (than gross negligence) 
                including intentional tortious conduct, as such terms 
                are defined and determined under applicable State law.
            ``(2) No limitation.--Nothing in this paragraph shall 
        impair or affect any right of the Agency under other applicable 
        law.
    ``(h) Damages.--In any proceeding related to any claim against a 
director, officer, employee, agent, attorney, accountant, appraiser, or 
any other party employed by or providing services to an enterprise, 
recoverable damages determined to result from the improvident or 
otherwise improper use or investment of any assets of the enterprise 
shall include principal losses and appropriate interest.
    ``(i) Limited-Life Enterprise.--
            ``(1) Organization.--
                    ``(A) Purpose.--If an enterprise is in default, or 
                if the Agency anticipates that an enterprise will 
                default, the Agency may organize a limited-life 
                enterprise with those powers and attributes of the 
                enterprise in default or in danger of default that the 
                Director determines necessary, subject to the 
                provisions of this subsection. The Director shall grant 
                a temporary charter to the limited-life enterprise, and 
                the limited-life enterprise shall operate subject to 
                that charter.
                    ``(B) Authorities.--Upon the creation of a limited-
                life enterprise under subparagraph (A), the limited-
                life enterprise may--
                            ``(i) assume such liabilities of the 
                        enterprise that is in default or in danger of 
                        default as the Agency may, in its discretion, 
                        determine to be appropriate, provided that the 
                        liabilities assumed shall not exceed the amount 
                        of assets of the limited-life enterprise;
                            ``(ii) purchase such assets of the 
                        enterprise that is in default, or in danger of 
                        default, as the Agency may, in its discretion, 
                        determine to be appropriate; and
                            ``(iii) perform any other temporary 
                        function which the Agency may, in its 
                        discretion, prescribe in accordance with this 
                        section.
            ``(2) Charter.--
                    ``(A) Conditions.--The Agency may grant a temporary 
                charter if the Agency determines that the continued 
                operation of the enterprise in default or in danger of 
                default is in the best interest of the national economy 
                and the housing markets.
                    ``(B) Limited-life enterprise treated as being in 
                default for certain purposes.--A limited-life 
                enterprise shall be treated as an enterprise in default 
                at such times and for such purposes as the Agency may, 
                in its discretion, determine.
                    ``(C) Management.--A limited-life enterprise, upon 
                the granting of its charter, shall be under the 
                management of a board of directors consisting of not 
                fewer than 5 nor more than 10 members appointed by the 
                Agency.
                    ``(D) Bylaws.--The board of directors of a limited-
                life enterprise shall adopt such bylaws as may be 
                approved by the Agency.
            ``(3) Capital stock.--No capital stock need be paid into a 
        limited-life enterprise by the Agency.
            ``(4) Investments.--Funds of a limited-life enterprise 
        shall be kept on hand in cash, invested in obligations of the 
        United States or obligations guaranteed as to principal and 
        interest by the United States, or deposited with the Agency, or 
        any Federal Reserve bank.
            ``(5) Exempt status.--Notwithstanding any other provision 
        of Federal or State law, the limited-life enterprise, its 
        franchise, property, and income shall be exempt from all 
        taxation now or hereafter imposed by the United States, by any 
        territory, dependency, or possession thereof, or by any State, 
        county, municipality, or local taxing authority.
            ``(6) Other Exemptions.--When acting as a receiver, the 
        following provisions shall apply with respect to the Agency:
                    ``(A) The Agency, including its franchise, its 
                capital, reserves, and surplus, and its income, shall 
                be exempt from all taxation imposed by any State, 
                country, municipality, or local taxing authority, 
                except that any real property of the Agency shall be 
                subject to State, territorial, county, municipal, or 
                local taxation to the same extent according to its 
                value as other real property is taxed, except that, 
                notwithstanding the failure of any person to challenge 
                an assessment under State law of the value of such 
                property, and the tax thereon, shall be determined as 
                of the period for which such tax is imposed.
                    ``(B) No property of the Agency shall be subject to 
                levy, attachment, garnishment, foreclosure, or sale 
                without the consent of the Agency, nor shall any 
                involuntary lien attach to the property of the Agency.
                    ``(C) The Agency shall not be liable for any 
                amounts in the nature of penalties or fines, including 
                those arising from the failure of any person to pay any 
                real property, personal property, probate, or recording 
                tax or any recording or filing fees when due.
            ``(7) Winding up.--
                    ``(A) In general.--Subject to subparagraph (B), 
                unless Congress authorizes the sale of the capital 
                stock of the limited-life enterprise, not later than 2 
                years after the date of its organization, the Agency 
                shall wind up the affairs of the limited-life 
                enterprise.
                    ``(B) Extension.--The Director may, in the 
                discretion of the Director, extend the status of the 
                limited-life enterprise for 3 additional 1-year 
                periods.
            ``(8) Transfer of assets and liabilities.--
                    ``(A) In general.--
                            ``(i) Transfer of assets and liabilities.--
                        The Agency, as receiver, may transfer any 
                        assets and liabilities of an enterprise in 
                        default, or in danger of default, to the 
                        limited-life enterprise in accordance with 
                        paragraph (1).
                            ``(ii) Subsequent transfers.--At any time 
                        after a charter is transferred to a limited-
                        life enterprise, the Agency, as receiver, may 
                        transfer any assets and liabilities of such 
                        enterprise in default, or in danger in default, 
                        as the Agency may, in its discretion, determine 
                        to be appropriate in accordance with paragraph 
                        (1).
                            ``(iii) Effective without approval.--The 
                        transfer of any assets or liabilities of an 
                        enterprise in default, or in danger of default, 
                        transferred to a limited-life enterprise shall 
                        be effective without any further approval under 
                        Federal or State law, assignment, or consent 
                        with respect thereto.
            ``(9) Proceeds.--To the extent that available proceeds from 
        the limited-life enterprise exceed amounts required to pay 
        obligations, such proceeds may be paid to the enterprise in 
        default, or in danger of default.
            ``(10) Powers of limited-life enterprises.--
                    ``(A) In general.--Each limited-life enterprise 
                created under this subsection shall have all corporate 
                powers of, and be subject to the same provisions of law 
                as, the enterprise in default or in danger of default 
                to which it relates, except that--
                            ``(i) the Agency may--
                                    ``(I) remove the directors of a 
                                limited-life enterprise; and
                                    ``(II) fix the compensation of 
                                members of the board of directors and 
                                senior management, as determined by the 
                                Agency in its discretion, of a limited-
                                life enterprise;
                            ``(ii) the Agency may indemnify the 
                        representatives for purposes of paragraph 
                        (1)(B), and the directors, officers, employees, 
                        and agents of a limited-life enterprise on such 
                        terms as the Agency determines to be 
                        appropriate; and
                            ``(iii) the board of directors of a 
                        limited-life enterprise--
                                    ``(I) shall elect a chairperson who 
                                may also serve in the position of chief 
                                executive officer, except that such 
                                person shall not serve either as 
                                chairperson or as chief executive 
                                officer without the prior approval of 
                                the Agency; and
                                    ``(II) may appoint a chief 
                                executive officer who is not also the 
                                chairperson, except that such person 
                                shall not serve as chief executive 
                                officer without the prior approval of 
                                the Agency.
                    ``(B) Stay of judicial action.--Any judicial action 
                to which a limited-life enterprise becomes a party by 
                virtue of its acquisition of any assets or assumption 
                of any liabilities of an enterprise in default shall be 
                stayed from further proceedings for a period of up to 
                45 days at the request of the limited-life enterprise. 
                Such period may be modified upon the consent of all 
                parties.
            ``(11) No federal status.--
                    ``(A) Agency status.--A limited-life enterprise is 
                not an agency, establishment, or instrumentality of the 
                United States.
                    ``(B) Employee status.--Representatives for 
                purposes of paragraph (1)(B), interim directors, 
                directors, officers, employees, or agents of a limited-
                life enterprise are not, solely by virtue of service in 
                any such capacity, officers or employees of the United 
                States. Any employee of the Agency or of any Federal 
                instrumentality who serves at the request of the Agency 
                as a representative for purposes of paragraph (1)(B), 
                interim director, director, officer, employee, or agent 
                of a limited-life enterprise shall not--
                            ``(i) solely by virtue of service in any 
                        such capacity lose any existing status as an 
                        officer or employee of the United States for 
                        purposes of title 5, United States Code, or any 
                        other provision of law; or
                            ``(ii) receive any salary or benefits for 
                        service in any such capacity with respect to a 
                        limited-life enterprise in addition to such 
                        salary or benefits as are obtained through 
                        employment with the Agency or such Federal 
                        instrumentality.
    ``(j) Prohibition of Charter Revocation.--In no case may a receiver 
appointed pursuant to this section revoke, annul, or terminate the 
charter of an enterprise.
    ``(k) Obtaining Credit by a Limited-Life Enterprise.--
            ``(1) In general.--The limited-life enterprise may obtain 
        unsecured credit and incur unsecured debt in the ordinary 
        course of business.
            ``(2) Inability to obtain credit.--If the limited-life 
        enterprise is unable to obtain unsecured credit the Director 
        may authorize the obtaining of credit or the incurring of 
        debt--
                    ``(A) with priority over any or all administrative 
                expenses;
                    ``(B) secured by a lien on property that is not 
                otherwise subject to a lien; or
                    ``(C) secured by a junior lien on property that is 
                subject to a lien.
            ``(3) Limitations.--
                    ``(A) In general.--The Director, after notice and a 
                hearing, may authorize the obtaining of credit or the 
                incurring of debt secured by a senior or equal lien on 
                property that is subject to a lien (other than 
                mortgages that collateralize the mortgage-backed 
                securities issued or guaranteed by the enterprise) only 
                if--
                            ``(i) the limited-life enterprise is unable 
                        to obtain such credit otherwise; and
                            ``(ii) there is adequate protection of the 
                        interest of the holder of the lien on the 
                        property which such senior or equal lien is 
                        proposed to be granted.
                    ``(B) Burden of proof.--In any hearing under this 
                subsection, the Director has the burden of proof on the 
                issue of adequate protection.
            ``(4) Affect on debts and liens.--The reversal or 
        modification on appeal of an authorization under this 
        subsection to obtain credit or incur debt, or of a grant under 
        this section of a priority or a lien, does not affect the 
        validity of any debt so incurred, or any priority or lien so 
        granted, to an entity that extended such credit in good faith, 
        whether or not such entity knew of the pendency of the appeal, 
        unless such authorization and the incurring of such debt, or 
        the granting of such priority or lien, were stayed pending 
        appeal.
    (b) Technical and Conforming Amendments.--The Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 
et seq.) is amended--
            (1) in section 1368 (12 U.S.C. 4618)--
                    (A) by striking ``an enterprise'' each place that 
                term appears and inserting ``a regulated entity''; and
                    (B) by striking ``the enterprise'' each place that 
                term appears and inserting ``the regulated entity'';
            (2) in section 1369C (12 U.S.C. 4622), by striking 
        ``enterprise'' each place that term appears and inserting 
        ``regulated entity'';
            (3) in section 1369D (12 U.S.C. 4623)--
                    (A) by striking ``an enterprise'' each place that 
                term appears and inserting ``a regulated entity''; and
                    (B) in subsection (a)(1), by striking ``An 
                enterprise'' and inserting ``A regulated entity''; and
            (4) by striking sections 1369, 1369A, and 1369B (12 U.S.C. 
        4619, 4620, and 4621).

                    Subtitle D--Enforcement Actions

SEC. 151. CEASE-AND-DESIST PROCEEDINGS.

    Section 1371 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4631) is amended--
            (1) by striking subsections (a) and (b) and inserting the 
        following:
    ``(a) Issuance for Unsafe or Unsound Practices and Violations.--If, 
in the opinion of the Director, a regulated entity, any enterprise-
affiliated party, or the Federal Home Loan Bank Finance Corporation, is 
engaging or has engaged, or the Director has reasonable cause to 
believe that the regulated entity, any enterprise-affiliated party, or 
the Federal Home Loan Bank Finance Corporation is about to engage, in 
an unsafe or unsound practice in conducting the business of the 
regulated entity, or is violating or has violated, or the Director has 
reasonable cause to believe that the regulated entity, any enterprise-
affiliated party, or the Federal Home Loan Bank Finance Corporation is 
about to violate, a law, rule, regulation, or order, or any condition 
imposed in writing by the Director in connection with the granting of 
any application or other request by the regulated entity or any written 
agreement entered into with the Director, the Director may issue and 
serve upon the regulated entity, enterprise-affiliated party, or the 
Federal Home Loan Bank Finance Corporation a notice of charges in 
respect thereof.
    ``(b) Issuance for Unsatisfactory Rating.--If a regulated entity 
receives, in its most recent report of examination, a less-than-
satisfactory rating for credit risk, market risk, operations, or 
corporate governance, the Director may (if the deficiency is not 
corrected) deem the regulated entity to be engaging in an unsafe or 
unsound practice for purposes of subsection (a).'';
            (2) in subsection (c)(2)--
                    (A) by striking ``or director'' and inserting 
                ``director, or enterprise-affiliated party''; and
                    (B) by inserting ``or enterprise-affiliated party'' 
                before ``consents'';
            (3) in subsections (c), (d), and (e)--
                    (A) by striking ``the enterprise'' each place that 
                term appears and inserting ``the regulated entity''; 
                and
                    (B) by striking ``an enterprise'' each place that 
                term appears and inserting ``a regulated entity'';
            (4) in subsection (d)--
                    (A) by striking ``or director'' and inserting 
                ``director, or enterprise-affiliated party''; and
                    (B) in paragraph (1), by striking ``or a director'' 
                and inserting ``, director, or enterprise-affiliated 
                party'';
            (5) in each of subsections (d)(7) and (e), by inserting 
        ``or enterprise-affiliated party'' after ``enterprise'' each 
        place that term appears; and
            (6) in subsection (f), by striking ``or director'' and 
        inserting ``director, or enterprise-affiliated party''.

SEC. 152. TEMPORARY CEASE-AND-DESIST PROCEEDINGS.

    Section 1372 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4632) is amended--
            (1) by striking subsection (a) and inserting the following:
    ``(a) Grounds for Issuance.--
            ``(1) In general.--If the Director determines that the 
        actions specified in the notice of charges served upon a 
        regulated entity, any enterprise-affiliated party, or the 
        Federal Home Loan Bank Finance Corporation, pursuant to section 
        1371(a), or the continuation thereof, is likely to cause 
        insolvency or significant dissipation of assets or earnings of 
        that entity, or is likely to weaken the condition of that 
        entity prior to the completion of the proceedings conducted 
        pursuant to sections 1371 and 1373, the Director may--
                    ``(A) issue a temporary order requiring that entity 
                to cease and desist from any such violation or 
                practice; and
                    ``(B) require that entity to take affirmative 
                action to prevent or remedy such insolvency, 
                dissipation, condition, or prejudice pending completion 
                of such proceedings.
            ``(2) Additional requirements.--An order issued under 
        paragraph (1) may include any requirement authorized under 
        subsection 1371(d).'';
            (2) in subsection (b)--
                    (A) by striking ``or director'' and inserting 
                ``director, or enterprise-affiliated party''; and
                    (B) by striking ``enterprise'' and inserting 
                ``regulated entity'';
            (3) in subsection (c), by striking ``enterprise'' and 
        inserting ``regulated entity'';
            (4) in subsection (d)--
                    (A) by striking ``or director'' and inserting 
                ``director, or enterprise-affiliated party''; and
                    (B) by striking ``An enterprise'' and inserting ``A 
                regulated entity''; and
            (5) by striking subsection (e) and inserting the following:
    ``(e) Enforcement.--If a temporary cease-and-desist order is issued 
under subsection (a), the Director may apply to the United States 
District Court for the District of Columbia, or the United States 
district court within the jurisdiction of which the headquarters of the 
regulated entity is located, for an injunction to enforce such order, 
and, if the court determines that the notice of charges issued under 
section 1371(a) are accurate, it shall be the duty of the court to 
issue such injunction.''.

SEC. 153. REMOVAL AND PROHIBITION AUTHORITY.

    (a) In General.--Subtitle C of part 1 of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4631 
et seq.) is amended--
            (1) by redesignating sections 1377 through 1379B (12 U.S.C. 
        4637-4641) as sections 1379 through 1379D, respectively; and
            (2) by inserting after section 1376 (12 U.S.C. 4636) the 
        following:

``SEC. 1377. REMOVAL AND PROHIBITION AUTHORITY.

    ``(a) Authority To Issue Order.--
            ``(1) In general.--The Director may serve upon a party 
        described in paragraph (2), or any officer or director of the 
        Federal Home Loan Bank Finance Corporation a written notice of 
        the intention of the Director to suspend or remove such party 
        from office, or prohibit any further participation by such 
        party, in any manner, in the conduct of the affairs of the 
        regulated entity.
            ``(2) Applicability.--A party described in this paragraph 
        is an enterprise-affiliated party or any officer or director of 
        the Federal Home Loan Bank Finance Corporation, if the Director 
        determines that--
                    ``(A) that party, officer, or director has, 
                directly or indirectly--
                            ``(i) violated--
                                    ``(I) any law or regulation;
                                    ``(II) any cease-and-desist order 
                                which has become final;
                                    ``(III) any condition imposed in 
                                writing by the Director in connection 
                                with the grant of any application or 
                                other request by such regulated entity; 
                                or
                                    ``(IV) any written agreement 
                                between such regulated entity and the 
                                Director;
                            ``(ii) engaged or participated in any 
                        unsafe or unsound practice in connection with 
                        any regulated entity; or
                            ``(iii) committed or engaged in any act, 
                        omission, or practice which constitutes a 
                        breach of such party's fiduciary duty;
                    ``(B) by reason of the violation, practice, or 
                breach described in subparagraph (A)--
                            ``(i) such regulated entity has suffered or 
                        will probably suffer financial loss or other 
                        damage; or
                            ``(ii) such party has received financial 
                        gain or other benefit; and
                    ``(C) the violation, practice, or breach described 
                in subparagraph (A)--
                            ``(i) involves personal dishonesty on the 
                        part of such party; or
                            ``(ii) demonstrates willful or continuing 
                        disregard by such party for the safety or 
                        soundness of such regulated entity.
    ``(b) Suspension Order.--
            ``(1) Suspension or prohibition authority.--If the Director 
        serves written notice under subsection (a) upon a party subject 
        to that subsection (a), the Director may, by order, suspend or 
        remove such party from office, or prohibit such party from 
        further participation in any manner in the conduct of the 
        affairs of the regulated entity, if the Director--
                    ``(A) determines that such action is necessary for 
                the protection of the regulated entity; and
                    ``(B) serves such party with written notice of the 
                order.
            ``(2) Effective period.--Any order issued under this 
        subsection--
                    ``(A) shall become effective upon service; and
                    ``(B) unless a court issues a stay of such order 
                under subsection (g), shall remain in effect and 
                enforceable until--
                            ``(i) the date on which 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 under subsection (b).
            ``(3) Copy of order.--If the Director issues an order under 
        subsection (b) to any party, the Director shall serve a copy of 
        such order on any regulated entity with which such party is 
        affiliated at the time such order is issued.
    ``(c) Notice, Hearing, and Order.--
            ``(1) Notice.--A notice under subsection (a) of the 
        intention of the Director to issue an order under this section 
        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.
            ``(2) Timing of hearing.--A hearing shall be fixed for a 
        date not earlier than 30 days, nor later than 60 days, after 
        the date of service of notice under subsection (a), unless an 
        earlier or a later date is set by the Director at the request 
        of--
                    ``(A) the party receiving such notice, and good 
                cause is shown; or
                    ``(B) the Attorney General of the United States.
            ``(3) Consent.--Unless the party that is the subject of a 
        notice delivered under subsection (a) appears 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 under 
        this section.
            ``(4) Issuance of order of suspension.--The Director may 
        issue an order under this section, as the Director may deem 
        appropriate, if--
                    ``(A) a party is deemed to have consented to the 
                issuance of an order under paragraph (3); or
                    ``(B) upon the record made at the hearing, the 
                Director finds that any of the grounds specified in the 
                notice have been established.
            ``(5) Effectiveness of order.--Any order issued under 
        paragraph (4) shall become effective at the expiration of 30 
        days after the date of service upon the relevant regulated 
        entity and party (except in the case of an order issued upon 
        consent under paragraph (3), which shall become effective at 
        the time specified therein). Such order shall remain effective 
        and enforceable except to such extent as it is stayed, 
        modified, terminated, or set aside by action of the Director or 
        a reviewing court.
    ``(d) Prohibition of Certain Specific Activities.--Any person 
subject to an order issued under this section shall not--
            ``(1) participate in any manner in the conduct of the 
        affairs of any regulated entity or the Federal Home Loan Bank 
        Finance Corporation;
            ``(2) solicit, procure, transfer, attempt to transfer, 
        vote, or attempt to vote any proxy, consent, or authorization 
        with respect to any voting rights in any regulated entity;
            ``(3) violate any voting agreement previously approved by 
        the Director; or
            ``(4) vote for a director, or serve or act as an 
        enterprise-affiliated party of a regulated entity or as an 
        officer or director of the Federal Home Loan Bank Finance 
        Corporation.
    ``(e) Industry-Wide Prohibition.--
            ``(1) In general.--Except as provided in paragraph (2), any 
        person who, pursuant to an order issued under this section, has 
        been removed or suspended from office in a regulated entity or 
        the Federal Home Loan Bank Finance Corporation, or prohibited 
        from participating in the conduct of the affairs of a regulated 
        entity or such Corporation, may not, while such order is in 
        effect, continue or commence to hold any office in, or 
        participate in any manner in the conduct of the affairs of, any 
        regulated entity or such Corporation.
            ``(2) Exception if director provides written consent.--If, 
        on or after the date on which an order is issued under this 
        section which removes or suspends from office any party, or 
        prohibits such party from participating in the conduct of the 
        affairs of a regulated entity or the Federal Home Loan Bank 
        Finance Corporation, such party receives the written consent of 
        the Director, the order shall, to the extent of such consent, 
        cease to apply to such party with respect to the regulated 
        entity or such Corporation described in the written consent. 
        Any such consent shall be publicly disclosed.
            ``(3) Violation of paragraph (1) treated as violation of 
        order.--Any violation of paragraph (1) by any person who is 
        subject to an order issued under subsection (h) 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 entity.
    ``(g) Stay of Suspension and Prohibition of Enterprise-Affiliated 
Party.--Not later than 10 days after the date on which any enterprise-
affiliated party has been suspended from office or prohibited from 
participation in the conduct of the affairs of a regulated entity under 
this section, such party may apply to the United States District Court 
for the District of Columbia, or the United States district court for 
the judicial district in which the headquarters of the regulated entity 
is located, for a stay of such suspension or prohibition pending the 
completion of the administrative proceedings pursuant to subsection 
(c). The court shall have jurisdiction to stay such suspension 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 1 year under Federal or State law, the 
                Director may, if continued service or participation by 
                such party may pose a threat to the regulated entity or 
                impair public confidence in the regulated entity, by 
                written notice served upon such party, suspend such 
                party from office or prohibit such party from further 
                participation in any manner in the conduct of the 
                affairs of any regulated entity.
                    ``(B) Provisions applicable to notice.--
                            ``(i) Copy.--A copy of any notice under 
                        subparagraph (A) shall be served upon the 
                        relevant regulated entity.
                            ``(ii) Effective period.--A suspension or 
                        prohibition under subparagraph (A) shall remain 
                        in effect until the information, indictment, or 
                        complaint referred to in subparagraph (A) 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 regulated entity or 
                impair public confidence in the regulated entity, 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 regulated entity without the prior 
                written consent of the Director.
                    ``(B) Provisions applicable to order.--
                            ``(i) Copy.--A copy of any order under 
                        subparagraph (A) shall be served upon the 
                        relevant regulated entity, at which time 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 
                        regulated entity.
                            ``(ii) Effect of acquittal.--A finding of 
                        not guilty or other disposition of the charge 
                        shall not preclude the Director from 
                        instituting proceedings after such finding or 
                        disposition to remove a party from office or to 
                        prohibit further participation in the affairs 
                        of a regulated entity pursuant to subsection 
                        (a), (d), or (e).
                            ``(iii) Effective period.--Unless 
                        terminated by the Director, 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).
            ``(3) Authority of remaining board members.--
                    ``(A) In general.--If at any time, because of the 
                suspension of 1 or more directors pursuant to this 
                section, there shall be on the board of directors of a 
                regulated entity less than a quorum of directors not so 
                suspended, all powers and functions vested in or 
                exercisable by such board shall vest in and be 
                exercisable by the director or directors on the board 
                not so suspended, until such time as there shall be a 
                quorum of the board of directors.
                    ``(B) Appointment of temporary directors.--If all 
                of the directors of a regulated entity are suspended 
                pursuant to this section, the Director shall appoint 
                persons to serve temporarily as directors pending the 
                termination of such suspensions, or until such time as 
                those who have been suspended cease to be directors of 
                the regulated entity and their respective successors 
                take office.
            ``(4) Hearing regarding continued participation.--
                    ``(A) In general.--Not later than 30 days after the 
                date of service of any notice of suspension or order of 
                removal issued pursuant to paragraph (1) or (2), the 
                enterprise-affiliated party may request in writing an 
                opportunity to appear before the Director to show that 
                the continued service or participation in the conduct 
                of the affairs of the regulated entity by such party 
                does not, or is not likely to, pose a threat to the 
                interests of the regulated entity, or threaten to 
                impair public confidence in the regulated entity.
                    ``(B) Timing and form of hearing.--Upon receipt of 
                a request for a hearing under subparagraph (A), the 
                Director shall fix a time (not later than 30 days after 
                the date of receipt of such request, unless extended at 
                the request of such party) and place at which the 
                enterprise-affiliated party may appear, personally or 
                through counsel, before the Director or 1 or more 
                designated employees of the Director to submit written 
                materials (or, at the discretion of the Director, oral 
                testimony) and oral argument.
                    ``(C) Determination.--Not later than 60 days after 
                the date of a hearing under subparagraph (B), the 
                Director shall notify the enterprise-affiliated party 
                whether the suspension or prohibition from 
                participation in any manner in the conduct of the 
                affairs of the regulated entity will be continued, 
                terminated, or otherwise modified, or whether the order 
                removing such party from office or prohibiting such 
                party from further participation in any manner in the 
                conduct of the affairs of the regulated entity will be 
                rescinded or otherwise modified. Such notification 
                shall contain a statement of the basis for any adverse 
                decision of the Director.
            ``(5) Rules.--The Director is authorized to prescribe such 
        rules as may be necessary to carry out this subsection.
    ``(i) Hearings and Judicial Review.--
            ``(1) Venue and procedure.--
                    ``(A) In general.--Any hearing under this section 
                shall be held in the District of Columbia or in the 
                Federal judicial district in which the headquarters of 
                the regulated entity is located, unless the party 
                afforded the hearing consents to another place, and 
                shall be conducted in accordance with the provisions of 
                chapter 5 of title 5, United States Code.
                    ``(B) Decision.--After any hearing under this 
                section, and not later than 90 days after the Director 
                has notified the parties that the case has been 
                submitted to it for final decision, the Director shall 
                render its decision (which shall include findings of 
                fact upon which the decision of the Director is 
                predicated) and issue and serve upon each party to the 
                proceeding an order or orders consistent with the 
                provisions of this section.
                    ``(C) Judicial review.--Judicial review of any 
                order issued under subparagraph (B) shall be 
                exclusively as provided in this subsection.
                    ``(D) Modification of order.--
                            ``(i) In general.--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 with the court, 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.
                            ``(ii) Limitation.--Upon the filing of the 
                        record, the Director may modify, terminate, or 
                        set aside any order under this subsection only 
                        with permission of the court.
            ``(2) Review of order.--
                    ``(A) In general.--Any party to any proceeding 
                under paragraph (1) may obtain a review of any order 
                served pursuant to paragraph (1) (other than an order 
                issued with the consent of the regulated entity or the 
                enterprise-affiliated party, or an order issued under 
                subsection (h)) by the filing in the United States 
                Court of Appeals for the District of Columbia Circuit, 
                or the Court of Appeals of the United States for the 
                circuit in which the headquarters of the relevant 
                regulated entity is located, within 30 days after the 
                date of service of such order, a written petition 
                praying that the order of the Director be modified, 
                terminated, or set aside.
                    ``(B) Forwarding of petition; filing of record.--A 
                copy of any petition filed under subparagraph (A) shall 
                be transmitted by the clerk of the court to the 
                Director, and the Director shall file in the court the 
                record in the proceeding, as provided in section 2112 
                of title 28, United States Code.
                    ``(C) Jurisdiction.--Upon the filing of a petition 
                under subparagraph (B), the court shall have 
                jurisdiction, which upon the filing of the record shall 
                (except as provided under paragraph (1)(D)(ii)) be 
                exclusive, to affirm, modify, terminate, or set aside, 
                in whole or in part, the order of the Director.
                    ``(D) Finality of decree.--The judgment and decree 
                of the court under this paragraph shall be final, 
                except that it shall be subject to review by the 
                Supreme Court of the United States, 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 Federal Housing 
        Enterprises Financial Safety and Soundness Act of 1992 (12 
        U.S.C. 4517(f)) is amended by striking ``section 1379B'' and 
        inserting ``section 1379D''.
            (2) Fannie mae charter act.--Section 308(b) of the Federal 
        National Mortgage Association Charter Act (12 U.S.C. 1723(b)) 
        is amended in the second sentence, by striking ``The'' and 
        inserting ``Except to the extent that action under section 1377 
        of the Federal Housing Enterprises Financial Safety and 
        Soundness Act of 1992 temporarily results in a lesser number, 
        the''.
            (3) Freddie mac charter act.--Section 303(a)(2)(A) of the 
        Federal Home Loan Mortgage Corporation Act (12 U.S.C. 
        1452(a)(2)(A)) is amended, in the second sentence, by striking 
        ``The'' and inserting ``Except to the extent action under 
        section 1377 of the Federal Housing Enterprises Financial 
        Safety and Soundness Act of 1992 temporarily results in a 
        lesser number, the''.

SEC. 154. ENFORCEMENT AND JURISDICTION.

    (a) In General.--Section 1375 of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4635) is 
amended--
            (1) by striking subsection (a) and inserting the following:
    ``(a) Enforcement.--The Director may, in the discretion of the 
Director, apply to the United States District Court for the District of 
Columbia, or the United States district court within the jurisdiction 
of which the headquarters of the regulated entity is located, for the 
enforcement of any effective and outstanding notice, order, or subpoena 
issued under this title, 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, order, or 
subpoena.''; and
            (2) in subsection (b), by striking ``or 1376'' and 
        inserting ``1376, or 1377''.
    (b) Conforming Amendment.--Section 1379B of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4641) 
is amended by striking subsection (c) and redesignating subsection (d) 
as subsection (c).

SEC. 155. CIVIL MONEY PENALTIES.

    Section 1376 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4636) is amended--
            (1) in subsection (a), in the matter preceding paragraph 
        (1), by striking ``Any enterprise, or any executive officer or 
        director of any enterprise'' and inserting ``Any regulated 
        entity, or any executive officer of a regulated entity or any 
        enterprise-affiliated party,''; and
            (2) by striking subsection (b) and inserting the following:
    ``(b) Amount of Penalty.--
            ``(1) First tier.--A regulated entity or enterprise-
        affiliated party shall forfeit and pay a civil penalty of not 
        more than $10,000 for each day during which a violation 
        continues, if such regulated entity or party--
                    ``(A) violates any provision of this title, the 
                authorizing statutes, or any order, condition, rule, or 
                regulation under this title or any authorizing statute;
                    ``(B) violates any final or temporary order or 
                notice issued pursuant to this title;
                    ``(C) violates any condition imposed in writing by 
                the Director in connection with the grant of any 
                application or other request by such regulated entity;
                    ``(D) violates any written agreement between the 
                regulated entity and the Director; or
                    ``(E) engages in any conduct that the Director 
                determines to be an unsafe or unsound practice.
            ``(2) Second tier.--Notwithstanding paragraph (1), a 
        regulated entity or enterprise-affiliated party shall forfeit 
        and pay a civil penalty of not more than $50,000 for each day 
        during which a violation, practice, or breach continues, if--
                    ``(A) the regulated entity or enterprise-affiliated 
                party, respectively--
                            ``(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 
                        the regulated entity; or
                            ``(iii) breaches any fiduciary duty; and
                    ``(B) the violation, practice, or breach--
                            ``(i) is part of a pattern of misconduct;
                            ``(ii) causes or is likely to cause more 
                        than a minimal loss to the regulated entity; or
                            ``(iii) results in pecuniary gain or other 
                        benefit to such party.
            ``(3) Third tier.--Notwithstanding paragraphs (1) and (2), 
        any regulated entity or enterprise-affiliated party 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, if such regulated entity or enterprise-affiliated 
        party--
                    ``(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 the 
                        regulated entity; or
                            ``(iii) breaches any fiduciary duty; and
                    ``(B) knowingly or recklessly causes a substantial 
                loss to the regulated entity or a substantial pecuniary 
                gain or other benefit to such party by reason of such 
                violation, practice, or breach.
            ``(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 paragraph 
        (3) is--
                    ``(A) in the case of any enterprise-affiliated 
                party, an amount not to exceed $2,000,000; and
                    ``(B) in the case of any regulated entity, 
                $2,000,000.'';
            (3) in subsection (c), by striking ``enterprise'' each 
        place that term appears and inserting ``regulated entity'';
            (4) in subsection (d)--
                    (A) by striking ``or director'' each place such 
                term appears and inserting ``director, or enterprise-
                affiliated party'';
                    (B) by striking ``an enterprise'' and inserting ``a 
                regulated entity'';
                    (C) by striking ``the enterprise'' and inserting 
                ``the regulated entity'';
                    (D) by striking ``request the Attorney General of 
                the United States to'';
                    (E) by inserting ``, or the United States district 
                court within the jurisdiction of which the headquarters 
                of the regulated entity is located,'' after ``District 
                of Columbia'';
                    (F) by striking ``, or may, under the direction and 
                control of the Attorney General of the United States, 
                bring such an action''; and
                    (G) by striking ``and section 1374''; and
            (5) in subsection (g), by striking ``An enterprise'' and 
        inserting ``A regulated entity''.

SEC. 156. CRIMINAL PENALTY.

    (a) In General.--Subtitle C of title XIII of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4631 
et seq.), as amended by this Act, is amended by adding at the end the 
following:

``SEC. 1378. CRIMINAL PENALTY.

    ``Whoever, being subject to an order in effect under section 1377, 
without the prior written approval of the Director, knowingly 
participates, directly or indirectly, in any manner (including by 
engaging in an activity specifically prohibited in such an order) in 
the conduct of the affairs of any regulated entity shall, 
notwithstanding section 3571 of title 18, be fined not more than 
$1,000,000, imprisoned for not more than 5 years, or both.''.
    (b) Technical and Conforming Amendments.--The Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 
et seq.) is amended--
            (1) in section 1379 (as so designated by this Act)--
                    (A) by striking ``an enterprise'' and inserting ``a 
                regulated entity''; and
                    (B) by striking ``the enterprise'' and inserting 
                ``the regulated entity'';
            (2) in section 1379A (as so designated by this Act), by 
        striking ``an enterprise'' and inserting ``a regulated 
        entity'';
            (3) in section 1379B(c) (as so designated by this Act), by 
        striking ``enterprise'' and inserting ``regulated entity''; and
            (4) in section 1379D (as so designated by this Act), by 
        striking ``enterprise'' and inserting ``regulated entity''.

SEC. 157. NOTICE AFTER SEPARATION FROM SERVICE.

    Section 1379 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4637), as so designated by this 
Act, is amended--
            (1) by striking ``2-year'' and inserting ``6-year''; and
            (2) by inserting ``or an enterprise-affiliated party'' 
        after ``enterprise'' each place that term appears.

        Subtitle E--Other Reporting Regarding Regulated Entities

SEC. 161. REPORTING REGARDING REGULATED ENTITIES.

    Part 3 of subtitle A of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 is amended--
            (1) by striking sections 1351, 1352, and 1353 (Public Law 
        102-550; 106 Stat. 3969), except that no provisions of law 
        amended by any such section repealed shall be affected by such 
        repeal; and
            (2) by striking sections 1354, 1355, and 1356 (12 U.S.C. 
        4601-3) and inserting the following:

``SEC. 1351. REPORTS REGARDING ISSUES AND ACTIVITIES OF REGULATED 
              ENTITIES.

    ``(a) Insured Depository Institution Holdings of Enterprise Debt 
and Mortgage-Backed Securities.--Not later than 2 years after the date 
of enactment of the Federal Housing Enterprise Regulatory Reform Act of 
2005, the Director, 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 regulated entities (including mortgage-backed 
        securities) are held by federally insured depository 
        institutions, including such extent by type of institution and 
        such extent relative to the capital of the institution;
            ``(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 a 
        regulated entity; and
            ``(3) the effects on the enterprises, the banking industry, 
        and mortgage markets, if prudent limits on the holdings of the 
        obligations of a regulated entity were placed on federally 
        insured depository institutions.
    ``(b) Portfolio Operations, Risk Management, and Mission.--
            ``(1) In general.--Not later than 2 years after the date of 
        enactment of the Federal Housing Enterprise Regulatory Reform 
        Act of 2005, the Director shall submit a report to the 
        Congress--
                    ``(A) describing the holdings of the regulated 
                entities in retained mortgages and repurchased 
                mortgage-backed securities and the use of derivatives 
                for hedging purposes;
                    ``(B) describing the extent of such holdings 
                relative to other assets and the risk implications of 
                such holdings;
                    ``(C) containing an analysis of such holdings for 
                safety and soundness or mission compliance purposes; 
                and
                    ``(D) containing an assessment of whether such 
                holdings and other assets of the regulated entities 
                fulfill the mission purposes of the regulated entities 
                under the Federal National Mortgage Association Charter 
                Act, the Federal Home Loan Mortgage Corporation Act, 
                and the Federal Home Loan Bank Act.
            ``(2) Consultation.--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 2 years after the date of 
enactment of the Federal Housing Enterprise Regulatory Reform Act of 
2005, the Director shall submit a report to Congress regarding--
            ``(1) the extent of outstanding obligations of the 
        regulated entities and the rate of growth of such obligations; 
        and
            ``(2) an analysis as to the appropriate level of debt 
        issuances of a regulated entity to operate in a safe and sound 
        manner, comply with its mission, and maintain a certain credit 
        rating or debt rating.
    ``(d) Risk-Based Capital Levels.--
            ``(1) In general.--The Director shall submit a report to 
        the Congress, at the end of each fiscal quarter, regarding--
                    ``(A) the risk-based capital levels for the 
                enterprises under section 1361, including a description 
                of the risk-based capital test under that section and 
                any assumptions of the Director and factors used by the 
                Director in establishing the test; and
                    ``(B) the minimum and critical capital levels for 
                the enterprises pursuant to sections 1362 and 1363, 
                respectively.
            ``(2) Timing.--Each report under this subsection shall be 
        submitted not later than 60 days after the end of each fiscal 
        quarter.
    ``(e) Resources and Allocations.--The Comptroller General of the 
United States shall submit a report to Congress annually, on a fiscal 
year basis, regarding--
            ``(1) the allocation of resources of the Agency by the 
        Director; and
            ``(2) the level of assessments collected by the Director 
        for the operation of the Agency.
    ``(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 F--General Provisions

SEC. 171. CONFORMING AND TECHNICAL AMENDMENTS.

    (a) Amendments to 1992 Act.--The Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.), as 
amended by this Act, is amended--
            (1) in section 1315 (12 U.S.C. 4515)--
                    (A) in subsection (a)--
                            (i) by striking ``(a) Office Personnel.--
                        The'' and inserting ``(a) In General.--Subject 
                        to title III of the Federal Enterprise 
                        Regulatory Reform Act of 2005, the''; and
                            (ii) by striking ``the Office'' each place 
                        that term appears and inserting ``the Agency'';
                    (B) in subsection (c), by striking ``the Office'' 
                and inserting ``the Agency'';
                    (C) in subsection (e), by striking ``the Office'' 
                and inserting ``the Agency'';
                    (D) by striking subsection (d) and redesignating 
                subsection (e) as subsection (d); and
                    (E) 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 1364(c) (12 U.S.C. 4614(c)), by striking the 
        last sentence;
            (4) by striking section 1383 (12 U.S.C. 1451 note);
            (5) in each of sections 1319D, 1319E, and 1319F (12 U.S.C. 
        4523, 4524, 4525) by striking ``the Office'' each place that 
        term appears and inserting ``the Agency''; and
            (6) in each of sections 1319B and 1369(a)(3) (12 U.S.C. 
        4521, 4619(a)(3)), by striking ``Committee on Banking, Finance 
        and Urban Affairs'' each place such term appears and inserting 
        ``Committee on Financial Services''.
    (b) Amendments to Fannie Mae Charter Act.--The Federal National 
Mortgage Association Charter Act (12 U.S.C. 1716 et seq.) is amended--
            (1) in each of sections 303(c)(2) (12 U.S.C. 1718(c)(2)), 
        309(d)(3)(B) (12 U.S.C. 1723a(d)(3)(B)), and 309(k)(1) (12 
        U.S.C. 1723a(k)(1)), by striking ``Director of the Office of 
        Federal Housing Enterprise Oversight of the Department of 
        Housing and Urban Development'' each place that term appears, 
        and inserting ``Director of the Federal Housing Enterprise 
        Regulatory Agency'';
            (2) in section 309--
                    (A) in subsection (m) (12 U.S.C. 1723a(m))--
                            (i) in paragraph (1), by striking ``to the 
                        Secretary, in a form determined by the 
                        Secretary'' and inserting ``to the Director of 
                        the Federal Housing Enterprise Regulatory 
                        Agency, in a form determined by the Director''; 
                        and
                            (ii) in paragraph (2), by striking ``to the 
                        Secretary, in a form determined by the 
                        Secretary'' and inserting ``to the Director of 
                        the Federal Housing Enterprise Regulatory 
                        Agency, in a form determined by the Director'';
                    (B) in subsection (n) (12 U.S.C. 1723a(n))--
                            (i) in paragraph (1), by striking ``and the 
                        Secretary'' and inserting ``and the Director of 
                        the Federal Housing Enterprise Regulatory 
                        Agency''; and
                            (ii) in paragraph (2), by striking 
                        ``Secretary'' each place that term appears and 
                        inserting ``Director of the Federal Housing 
                        Enterprise Regulatory Agency''; and
                    (C) in paragraph (3)(B), by striking ``Secretary'' 
                and inserting ``Director of the Federal Housing 
                Enterprise Regulatory Agency''.
    (c) Amendments to Freddie Mac Act.--The Federal Home Loan Mortgage 
Corporation Act (12 U.S.C. 1451 et seq.) is amended--
            (1) in each of sections 303(b)(2) (12 U.S.C. 1452(b)(2)), 
        303(h)(2) (12 U.S.C. 1452(h)(2)), and section 307(c)(1) (12 
        U.S.C. 1456(c)(1)), by striking ``Director of the Office of 
        Federal Housing Enterprise Oversight of the Department of 
        Housing and Urban Development'' each place that term appears, 
        and inserting ``Director of the Federal Housing Enterprise 
        Regulatory Agency'';
            (2) in section 306 (12 U.S.C. 1455)--
                    (A) in subsection (c)(2), by inserting ``the'' 
                after ``Secretary of'';
                    (B) in subsection (i)--
                            (i) by striking ``section 1316(c)'' and 
                        inserting ``section 306(c)''; and
                            (ii) by striking ``section 106'' and 
                        inserting ``section 1316''; and
                    (C) in subsection (j), by striking ``of 
                substantially'' and inserting ``or substantially''; and
            (3) in section 307 (12 U.S.C. 1456)--
                    (A) in subsection (e)--
                            (i) in paragraph (1), by striking ``to the 
                        Secretary, in a form determined by the 
                        Secretary'' and inserting ``to the Director of 
                        the Federal Housing Enterprise Regulatory 
                        Agency, in a form determined by the Director''; 
                        and
                            (ii) in paragraph (2), by striking ``to the 
                        Secretary, in a form determined by the 
                        Secretary'' and inserting ``to the Director of 
                        the Federal Housing Enterprise Regulatory 
                        Agency, in a form determined by the Director''; 
                        and
                    (B) in subsection (f)--
                            (i) in paragraph (1), by striking ``and the 
                        Secretary'' and inserting ``and the Director of 
                        the Federal Housing Enterprise Regulatory 
                        Agency'';
                            (ii) in paragraph (2), by striking ``the 
                        Secretary'' each place that term appears and 
                        inserting ``the Director of the Federal Housing 
                        Enterprise Regulatory Agency''; and
                            (iii) in paragraph (3)(B), by striking 
                        ``Secretary'' and inserting ``Director of the 
                        Federal Housing Enterprise Regulatory Agency''.
    (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 ``Federal Housing 
Enterprise Regulatory Agency''.
    (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 Federal Housing 
Enterprise Regulatory Agency''.
    (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 5313 of 
title 5, United States Code, is amended by striking the item relating 
to the Director of the Office of Federal Housing Enterprise Oversight, 
Department of Housing and Urban Development and inserting the following 
new item:
            ``Director of the Federal Housing Enterprise Regulatory 
        Agency.''.

SEC. 172. PRESIDENTIALLY APPOINTED DIRECTORS OF ENTERPRISES.

    (a) Fannie Mae.--
            (1) In general.--Section 308(b) of the Federal National 
        Mortgage Association Charter Act (12 U.S.C. 1723(b)) is 
        amended--
                    (A) in the first sentence, by striking ``eighteen 
                persons, five of whom shall be appointed annually by 
                the President of the United States, and the remainder 
                of whom'' and inserting ``13 persons, or such other 
                number that the Director determines appropriate, who'';
                    (B) in the second sentence, by striking ``appointed 
                by the President'';
                    (C) in the third sentence--
                            (i) by striking ``appointed or''; and
                            (ii) by striking ``, except that any such 
                        appointed member may be removed from office by 
                        the President for good cause'';
                    (D) in the fourth sentence, by striking 
                ``elective''; and
                    (E) by striking the fifth sentence.
            (2) Transitional provision.--The amendments made by 
        paragraph (1) shall not apply to any appointed position of the 
        board of directors of the Federal National Mortgage Association 
        until the expiration of the annual term for such position 
        during which the effective date under section 173 occurs.
    (b) Freddie Mac.--
            (1) In general.--Section 303(a)(2) of the Federal Home Loan 
        Mortgage Corporation Act (12 U.S.C. 1452(a)(2)) is amended--
                    (A) in subparagraph (A)--
                            (i) in the first sentence, by striking ``13 
                        persons, 5 of whom shall be appointed annually 
                        by the President of the United States and the 
                        remainder of whom'' and inserting ``13 persons, 
                        or such other number as the Director determines 
                        appropriate, who''; and
                            (ii) in the second sentence, by striking 
                        ``appointed by the President of the United 
                        States'';
                    (B) in subparagraph (B)--
                            (i) by striking ``such or''; and
                            (ii) by striking ``, except that any 
                        appointed member may be removed from office by 
                        the President for good cause''; and
                    (C) in subparagraph (C)--
                            (i) by striking the first sentence; and
                            (ii) by striking ``elective''.
            (2) Transitional provision.--The amendments made by 
        paragraph (1) shall not apply to any appointed position of the 
        board of directors of the Federal Home Loan Mortgage 
        Corporation until the expiration of the annual term for such 
        position during which the effective date under section 173 
        occurs.

SEC. 173. 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 date of enactment of this Act.

                   TITLE II--FEDERAL HOME LOAN BANKS

SEC. 201. DIRECTORS.

    Section 7 of the Federal Home Loan Bank Act (12 U.S.C. 1427) is 
amended--
            (1) by striking subsection (a) and inserting the following:
    ``(a) Number; Appointment and Election; Qualifications; Conflicts 
of Interest.--
            ``(1) In general.--Subject to paragraphs (2) through (4), 
        and except to the extent that action under section 1377 of the 
        Federal Housing Enterprises Financial Safety and Soundness Act 
        of 1992 results in a lesser number, the management of each 
        Federal Home Loan Bank shall be vested in a board of 13 
        directors, or such other number as the Director determines 
        appropriate.
            ``(2) Board makeup.--The board of directors of each Bank 
        shall be comprised of--
                    ``(A) member directors, who shall comprise at least 
                the majority of the members of the board of directors; 
                and
                    ``(B) nonmember directors, who shall comprise not 
                fewer than \1/3\ of the members of the board of 
                directors.
            ``(3) Selection criteria.--
                    ``(A) In general.--Each member of the board of 
                directors shall be--
                            ``(i) elected by majority vote of the 
                        members, in accordance with procedures 
                        established under this section; and
                            ``(ii) a citizen of the United States.
                    ``(B) Nonmember director criteria.--
                            ``(i) Public interest.--Not fewer than 2 of 
                        the nonmember directors shall be selected from 
                        among representatives of organizations having 
                        more than a 2-year history of representing 
                        consumer or community interests on banking 
                        services, credit needs, housing, or financial 
                        consumer protections.
                            ``(ii) Conflicts of interest.--No nonmember 
                        director may, during the term of service on the 
                        board of directors, serve as an officer of any 
                        Federal Home Loan Bank or as a director or 
                        officer of any member of a Bank.
            ``(4) Definitions.--For purposes of this section, the 
        following definitions shall apply:
                    ``(A) Member director.--The terms `member director' 
                and `member directorship' mean a member of the board of 
                directors of a Federal Home Loan Bank who is an officer 
                or director of a member bank that is located in the 
                district in which the Federal Home Loan Bank is 
                located.
                    ``(B) Nonmember director.--The terms `nonmember 
                director' and `nonmember directorship' mean a member of 
                the board of directors of a Federal Home Loan Bank who 
                is a bona fide resident of the district in which the 
                Federal Home Loan Bank is located.'';
            (2) by striking ``elective'' each place that term appears 
        and inserting ``member'', other than in subsections (d) and 
        (f);
            (3) in subsection (b)--
                    (A) in the first sentence, by striking ``Each 
                elective directorship'' and inserting the following:
    ``(b) Directorships.--
            ``(1) Member directors.--Each member director''; and
                    (B) by adding at the end the following:
            ``(2) Nonmember directors.--Each nonmember director shall 
        be elected by the members entitled to vote, from among eligible 
        persons nominated by the Board. Nominees shall meet all 
        applicable requirements prescribed in this section. Procedures 
        for nomination and election of nonmember directors shall be 
        prescribed by the bylaws of each Federal Home Loan Bank, in a 
        manner consistent with the rules and regulations of the Federal 
        Housing Enterprise Agency.'';
            (4) in subsection (d)--
                    (A) in the first sentence--
                            (i) by striking ``, whether elected or 
                        appointed,''; and
                            (ii) by striking ``3 years'' and inserting 
                        4 years''; and
                    (B) in the second sentence--
                            (i) by striking ``Federal Home Loan Bank 
                        System Modernization Act of 1999'' and 
                        inserting ``Federal Housing Enterprise 
                        Regulatory Reform Act of 2005'';
                            (ii) by striking ``\1/3\'' and inserting 
                        ``\1/4\''; and
                            (iii) by striking ``or appointed'';
            (5) in subsection (f)--
                    (A) by striking paragraph (2);
                    (B) by striking ``appointed or'' each place that 
                term appears; and
                    (C) in paragraph (3)--
                            (i) by striking ``(3) Elected bank 
                        directors.--'' and inserting ``Election 
                        process.--''; and
                            (ii) by striking ``and such person shall 
                        not continue to act as a Bank director'' and 
                        inserting ``but such person may continue to act 
                        as a Bank director until his or her successor 
                        assumes the vacated office'';
            (6) in subsection (i)--
                    (A) in paragraph (1), by striking ``Subject to 
                paragraph (2), each'' and inserting ``Each''; and
                    (B) by striking paragraph (2); and
            (7) by adding at the end the following:
    ``(l) Transition Rule.--Any member of the board of directors of a 
Bank elected in accordance with this section prior to the date of 
enactment of this subsection may continue to serve as a member of that 
board of directors for the remainder of the term of service, and until 
his or her successor assumes the vacated office.''.

SEC. 202. DEFINITIONS.

    Section 2 of the Federal Home Loan Bank Act (12 U.S.C. 1422) is 
amended--
            (1) by striking paragraph (1);
            (2) by redesignating paragraphs (2) through (13) as 
        paragraphs (1) through (12), respectively; and
            (3) by adding at the end the following:
            ``(13) Director.--The term `Director' means the Director of 
        the Federal Housing Enterprise Agency.
            ``(14) Agency.--The term `Agency' means the Federal Housing 
        Enterprises Supervisory Agency.''.

SEC. 203. AGENCY OVERSIGHT OF FEDERAL HOME LOAN BANKS.

    The Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.), other than 
in provisions of that Act added or amended otherwise by this Act, is 
amended--
            (1) by striking sections 2A, 2B, and 20 (12 U.S.C. 1422a, 
        1422b, 1440);
            (2) in section 18 (12 U.S.C. 1438), by striking subsection 
        (b);
            (3) by striking ``the Board'' each place that term appears, 
        except in sections 15 and 25, and subsections (a), (b), and (c) 
        of section 11, and inserting ``the Director'';
            (4) by striking ``The Board'' each place that term appears 
        and inserting ``The Director'';
            (5) by striking ``the Finance Board'' each place that term 
        appears and inserting ``the Director'';
            (6) by striking ``The Finance Board'' each place that term 
        appears and inserting ``The Director'';
            (7) in section 6 (12 U.S.C. 1426(b)(1))--
                    (A) in subsection (b)(1), in the matter preceding 
                subparagraph (A), by striking ``Finance Board 
                approval'' and inserting ``approval by the Director''; 
                and
                    (B) in each of subsections (c)(4)(B) and (d)(2), by 
                striking ``Finance Board regulations'' each place that 
                term appears and inserting ``regulations of the 
                Director'';
            (8) by striking ``Federal Housing Finance Board'' each 
        place that term appears and inserting ``Director'';
            (9) by striking ``Federal Home Loan Bank Board'' each place 
        that term appears and inserting ``Director'';
            (10) in section 10 (12 U.S.C. 1430)--
                    (A) in the heading for subsection (b), by striking 
                ``Formal Board Resolution'' and inserting ``Approval of 
                Director''; and
                    (B) in subsection (b), by striking ``by formal 
                resolution''; and
            (11) in section 21(b)(5) (12 U.S.C. 1441(b)(5), by striking 
        ``Chairperson of the Federal Housing Finance Board'' and 
        inserting ``Director''.

SEC. 204. DEBT ISSUING FACILITY.

    The Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.) is amended 
by inserting after section 11 the following:

``SEC. 11A. FEDERAL HOME LOAN BANK FINANCE CORPORATION.

    ``(a) Establishment.--
            ``(1) In general.--There is established the Federal Home 
        Loan Bank Finance Corporation (in this section referred to as 
        the `Corporation'), which shall be a jointly owned subsidiary 
        of the Federal Home Loan Banks.
            ``(2) Purposes.--The purposes of the Corporation are--
                    ``(A) to issue and service the consolidated 
                obligations of the Federal Home Loan Banks in 
                accordance with this Act; and
                    ``(B) to perform all other necessary and proper 
                functions in relation to the issuance and service of 
                such obligations, as fiscal agent on behalf of the 
                Federal Home Loan Banks, and any other functions 
                performed by the Office of Finance on behalf of the 
                Financing Corporation (established under section 21) 
                and the Resolution Funding Corporation (established 
                under section 21B).
            ``(3) Transfer of functions.--
                    ``(A) In general.--The functions of the Office of 
                Finance of the Federal Home Loan Banks, shall be 
                transferred to the Corporation immediately upon the 
                conclusion of the organizational meeting of the board 
                of directors (referred to in this subsection as the 
                `effective time') established under subsection (c).
                    ``(B) Organizational meeting.--The organizational 
                meeting of the board of directors of the Corporation 
                shall occur as soon as practicable after the date of 
                enactment of the Federal Enterprise Regulatory Reform 
                Act of 2005.
                    ``(C) Interim procedures.--Until the effective time 
                under subparagraph (A), the Office of Finance 
                established as a joint office of the Federal Home Loan 
                Banks (referred to in this subsection as the 
                `predecessor office') shall continue to operate as if 
                this section had not been enacted.
                    ``(D) References.--After the effective time under 
                subparagraph (A), any reference under any Federal law 
                to the Office of Finance and the Managing Director of 
                the Office of Finance shall be deemed to be references 
                to the Corporation and the chief executive officer of 
                the Corporation, respectively.
            ``(4) Succession.--
                            ``(i) Assets and liabilities.--At the 
                        effective time, the Corporation shall, by 
                        operation of law and without any further action 
                        by the Federal Housing Finance Board, the 
                        predecessor office, or any court, succeed to 
                        the assets of, and assume all debts, 
                        obligations, contracts, and other liabilities 
                        of the predecessor office, matured or 
                        unmatured, accrued or absolute, contingent or 
                        otherwise, and whether or not reflected or 
                        reserved against on balance sheets, books of 
                        account, or records of the predecessor office.
                            ``(ii) Contracts.--At the effective time, 
                        the existing contractual obligations of the 
                        Federal Housing Finance Board, solely in its 
                        capacity as issuer of consolidated obligations 
                        of the Federal Home Loan Banks and the 
                        predecessor office shall, by operation of law 
                        and without any further action by the Federal 
                        Housing Finance Board, the predecessor office, 
                        or any court, become obligations, entitlements, 
                        and instruments of the Corporation.
                            ``(iii) Taxation.--The succession to 
                        assets, assumption of liabilities, conversion 
                        of obligations and instruments, and 
                        effectuation of any other transaction by the 
                        Corporation to carry out this subsection shall 
                        not be treated as a taxable event under the 
                        laws of any State, or any political subdivision 
                        thereof.
    ``(b) Powers.--Subject to the provisions of this Act, and such 
regulations as the Director may prescribe, the Corporation shall have 
the power--
            ``(1) to issue voting capital stock to the Federal Home 
        Loan Banks;
            ``(2) to issue and service Federal Home Loan Bank 
        consolidated notes, consolidated bonds, consolidated debentures 
        and other consolidated obligations under section 11, on behalf 
        of the Federal Home Loan Banks;
            ``(3) to determine the amount, maturities, rate of 
        interest, terms, and other conditions of Federal Home Loan Bank 
        consolidated obligations;
            ``(4) to adopt, alter, and use a corporate seal;
            ``(5) to make contracts;
            ``(6) to sue and be sued in the corporate capacity of the 
        Corporation, and to complain and defend in any action brought 
        by or against the Corporation in any court of competent 
        jurisdiction;
            ``(7) to determine the terms and conditions under which the 
        Corporation may indemnify its directors, officers, employees, 
        and agents;
            ``(8) to determine and implement the methodology for 
        assessments of the Federal Home Loan Banks to fund all of the 
        expenses of the Corporation; and
            ``(9) to exercise such incidental powers not inconsistent 
        with the provisions of this Act as are necessary or advisable 
        to carry out the purposes of the Corporation.
    ``(c) Board of Directors.--
            ``(1) Establishment.--The management of the Corporation 
        shall be vested in a board of directors composed of the 
        president of each of the Federal Home Loan Banks, ex officio.
            ``(2) Duties.--The board of directors of the Corporation 
        shall administer the affairs of the Corporation in accordance 
        with the provisions of this section.
            ``(3) Interim appointments.--If the office of the president 
        of any Federal Home Loan Bank is vacant, the person serving in 
        such capacity on an acting basis shall serve on the board of 
        directors of the Corporation until replaced by the next person 
        to fill the office of the president of that Federal Home Loan 
        Bank.
            ``(4) Powers.--The board of directors of the Corporation 
        shall exercise such powers as may be necessary or advisable to 
        carry out this section, including the power to--
                    ``(A) set policies for the management and operation 
                of the Corporation;
                    ``(B) approve a strategic business plan for the 
                Corporation;
                    ``(C) review, adopt and monitor annual operation 
                and capital budgets of the Corporation;
                    ``(D) constitute and perform the duties of an audit 
                committee, which to the extent possible shall operate 
                consistent with--
                            ``(i) the requirements established for the 
                        Federal Home Loan Banks; and
                            ``(ii) the requirements pertaining to audit 
                        committee reports set forth in the rules of 
                        Securities and Exchange Commission;
                    ``(E) select, employ, determine the compensation 
                for, and assign the duties and functions of the 
                president of the Corporation, who shall--
                            ``(i) be the chief executive officer for 
                        the Corporation and shall direct the 
                        implementation of the policies adopted by the 
                        board of directors of the Corporation;
                            ``(ii) serve as a member of the Directorate 
                        of the Financing Corporation, under section 
                        21(b)(1)(A) of this Act (12 U.S.C. 
                        1441(b)(1)(A)); and
                            ``(iii) serve as a member of the 
                        Directorate of the Resolution Funding 
                        Corporation, under section 21B(c)(1)(A) of this 
                        Act (12 U.S.C. 1441b(c)(1)(A));
                    ``(F) provide for the review and approval of all 
                contracts of the Corporation;
                    ``(G) have the exclusive authority to employ and 
                contract for the services of an independent, external 
                auditor for the annual and quarterly combined financial 
                statements of the Federal Home Loan Banks; and
                    ``(H) select, evaluate, determine the compensation 
                of, and, as appropriate, replace the internal auditor 
                of the Corporation, who may be removed only by vote of 
                the board of directors of the Corporation.
            ``(5) Pay.--The members of the board of directors of the 
        Corporation shall not receive compensation for their services 
        as members of the board of directors.
            ``(6) Quorum requirement.--
                    ``(A) In general.--No business of the Corporation 
                may be conducted by the board of directors unless a 
                quorum of the members of the board of directors is 
                present in person or by telephone, or through action 
                taken by written consent executed by all of the members 
                of the board of directors.
                    ``(B) Number.--Directors representing a majority of 
                the members of the board of directors shall constitute 
                a quorum.
                    ``(C) Vote required.--Action taken by the board of 
                directors shall be approved by a majority of the 
                directors in attendance at any meeting at which a 
                quorum is present, unless the board of directors adopts 
                procedures requiring a greater voting requirement.
            ``(7) Appointment of officers and adoption of rules of 
        procedure.--The board of directors of the Corporation shall--
                    ``(A) select, from among the members of such board, 
                a Chairperson and a Vice Chairperson; and
                    ``(B) adopt bylaws and other rules of procedure for 
                actions before the board of directors, including the 
                establishment of 1 or more committees to take action on 
                behalf of the board of directors, and the delegation of 
                powers of the board of directors to any committee or 
                officer of the Corporation.
    ``(d) Stock.--
            ``(1) Issuance of equal amount to each bank.--The 
        Corporation shall issue to each Federal Home Loan Bank 1 share 
        of voting capital stock, with a par value of $100 per share.
            ``(2) Restricted transferability.--Stock issued under 
        paragraph (1) may be owned and held only by the Federal Home 
        Loan Banks.
            ``(3) Payment upon issuance.--Upon issuance of any share of 
        stock under this subsection to any Federal Home Loan Bank, the 
        bank shall pay to the Corporation the total amount due for such 
        stock.
            ``(4) Distribution requirement.--
                    ``(A) In general.--The total amount of outstanding 
                stock of the Corporation shall, at all times, be 
                distributed equally among all of the Federal Home Loan 
                Banks.
                    ``(B) Procedures.--The board of directors of the 
                Corporation shall adopt procedures to implement 
                subparagraph (A).
    ``(e) Status.--Except to the extent expressly provided in this 
title, or in rules or regulations promulgated by the Director, or 
unless the context clearly indicates otherwise, the Corporation shall 
be accorded the same status as a Federal Home Loan Bank for purposes of 
any other provision of law, including sections 2B and 13 of this 
Act.''.

SEC. 205. EXCLUSION FROM CERTAIN SECURITIES REPORTING REQUIREMENTS.

    (a) In General.--The Federal Home Loan Banks shall be exempt from 
compliance with--
            (1) sections 13(e), 14(a), 14(c), and 17A of the Securities 
        Exchange Act of 1934, and related Commission regulations; and
            (2) section 15 of the Securities Exchange Act of 1934, and 
        related Commission regulations, with respect to transactions in 
        the capital stock of a Federal Home Loan Bank.
    (b) Member Exemption.--The members of the Federal Home Loan Bank 
System shall be exempt from compliance with sections 13(d), 13(f), 
13(g), 14(d), and 16 of the Securities Exchange Act of 1934, and 
related Commission regulations, with respect to ownership of or 
transactions in the capital stock of the Federal Home Loan Banks by 
such members.
    (c) Exempted and Government Securities.--
            (1) Capital stock.--The capital stock issued by each of the 
        Federal Home Loan Banks under section 6 of the Federal Home 
        Loan Bank Act are--
                    (A) ``exempted securities'', within the meaning of 
                section 3(a)(2) of the Securities Act of 1933; and
                    (B) ``exempted securities'', within the meaning of 
                section 3(a)(12)(A) of the Securities Exchange Act of 
                1934.
            (2) Other obligations.--The debentures, bonds, and other 
        obligations issued under section 11 of the Federal Home Loan 
        Bank Act are--
                    (A) ``exempted securities'', within the meaning of 
                section 3(a)(2) of the Securities Act of 1933;
                    (B) ``government securities'', within the meaning 
                of section 3(a)(42) of the Securities Exchange Act of 
                1934; and
                    (E) ``government securities'' within the meaning of 
                section 2(a)(16) of the Investment Company Act of 1940.
            (3) Brokers and dealers.--A person that effects 
        transactions in the capital stock or other obligations of a 
        Federal Home Loan Bank, for the account of others or for his 
        own account, as applicable--
                    (A) is excluded from the definition of the term 
                ``government securities broker'' under section 3(a)(43) 
                of the Securities Exchange Act of 1934; and
                    (B) is excluded from the definition of ``government 
                securities dealer'' under section 3(a)(44) of the 
                Securities Exchange Act of 1934.
    (d) Exemption From Reporting Requirements.--The Federal Home Loan 
Banks shall be exempt from periodic reporting requirements under the 
securities laws pertaining to--
            (1) the disclosure of related party transactions that occur 
        in the ordinary course of the business of the Banks with 
        members; and
            (2) the disclosure of the unregistered sales of equity 
        securities.
    (e) Tender Offers.--Commission rules relating to tender offers 
shall not apply in connection with transactions in the capital stock of 
the Federal Home Loan Banks.
    (f) Regulations.--
            (1) Final rules.--Not later than 1 year after the date of 
        enactment of this Act, the Commission shall issue final rules 
        to implement this section and the exemptions provided in this 
        section.
            (2) Considerations.--In issuing final regulations under 
        this section, the Commission shall consider the distinctive 
        characteristics of the Federal Home Loan Banks when evaluating 
        the accounting treatment with respect to the payment to the 
        Resolution Funding Corporation, the role of the combined 
        financial statements of the Federal Home Loan Banks, the 
        accounting classification of redeemable capital stock, and the 
        accounting treatment related to the joint and several nature of 
        the obligations of the Banks.
    (g) Applicability.--The exemptions and exclusions provided for in 
this section shall apply in accordance with this section, 
notwithstanding any other provision of law, including any provision of 
the securities laws.
    (h) Definitions.--As used in this section--
            (1) the terms ``Bank'', ``Federal Home Loan Bank'', 
        ``member'', and ``Federal Home Loan Bank System'' have the same 
        meanings as in section 2 of the Federal Home Loan Bank Act (12 
        U.S.C. 1422);
            (2) the term ``Commission'' means the Securities and 
        Exchange Commission''; and
            (3) the term ``securities laws'' has the same meaning as in 
        section 3(a)(47) of the Securities Exchange Act of 1934.

SEC. 206. LIMITATION ON GOLDEN PARACHUTES.

    Section 7(i) of the Federal Home Loan Bank Act (12 U.S.C. 1427) is 
amended by adding at the end the following:
            ``(2) Authority to regulate or prohibit certain forms of 
        benefits to affiliated parties.--
                    ``(A) Golden parachutes and indemnification 
                payments.--The Agency may prohibit or limit, by 
                regulation or order, any golden parachute payment or 
                indemnification payment.
                    ``(B) Factors to be taken into account.--The Agency 
                shall prescribe, by regulation, the factors to be 
                considered by the Agency in taking any action pursuant 
                to subparagraph (A), which may include such factors 
                as--
                            ``(i) whether there is a reasonable basis 
                        to believe that the affiliated party has 
                        committed any fraudulent act or omission, 
                        breach of trust or fiduciary duty, or insider 
                        abuse with regard to the Bank that has had a 
                        material affect on the financial condition of 
                        the Bank;
                            ``(ii) whether there is a reasonable basis 
                        to believe that the affiliated party is 
                        substantially responsible for the insolvency of 
                        the Bank, the appointment of a conservator or 
                        receiver for the Bank, or the troubled 
                        condition of the Bank (as defined in 
                        regulations prescribed by the Agency);
                            ``(iii) whether there is a reasonable basis 
                        to believe that the affiliated party has 
                        materially violated any applicable Federal or 
                        State law or regulation that has had a material 
                        affect on the financial condition of the Bank;
                            ``(iv) whether the affiliated party was in 
                        a position of managerial or fiduciary 
                        responsibility; and
                            ``(v) the length of time the party was 
                        affiliated with the Bank, and the degree to 
                        which--
                                    ``(I) the payment reasonably 
                                reflects compensation earned over the 
                                period of employment; and
                                    ``(II) the compensation involved 
                                represents a reasonable payment for 
                                services rendered.
                    ``(C) Certain payments prohibited.--No Bank may 
                prepay the salary or any liability or legal expense of 
                any affiliated party, if such payment is made--
                            ``(i) in contemplation of the insolvency of 
                        such Bank, or after the commission of an act of 
                        insolvency; and
                            ``(ii) with a view to, or has the result 
                        of--
                                    ``(I) preventing the proper 
                                application of the assets of the Bank 
                                to creditors; or
                                    ``(II) preferring one creditor over 
                                another.
                    ``(D) Golden parachute payment defined.--
                            ``(i) In general.--For purposes of this 
                        paragraph, the term `golden parachute payment' 
                        means any payment (or any agreement to make any 
                        payment) in the nature of compensation by any 
                        Bank for the benefit of any affiliated party, 
                        pursuant to an obligation of such Bank that--
                                    ``(I) is contingent on the 
                                termination of such party's affiliation 
                                with the Bank; and
                                    ``(II) is received on or after the 
                                date on which--
                                            ``(aa) the Bank becomes 
                                        insolvent;
                                            ``(bb) any conservator or 
                                        receiver is appointed for such 
                                        institution; or
                                            ``(cc) the Agency 
                                        determines that the Bank is in 
                                        a troubled condition (as 
                                        defined in the regulations 
                                        prescribed by the Agency).
                            ``(ii) Certain payments in contemplation of 
                        an event.--Any payment which would be a golden 
                        parachute payment but for the fact that such 
                        payment was made before the date referred to in 
                        subclause (II) of clause (i) shall be treated 
                        as a golden parachute payment for purposes of 
                        this paragraph, if the payment was made in 
                        contemplation of the occurrence of an event 
                        described in any provision of such subclause.
                            ``(iii) Certain payments not included.--For 
                        purposes of this paragraph, the term `golden 
                        parachute payment' does not include--
                                    ``(I) any payment made pursuant to 
                                a retirement plan which is qualified 
                                (or is intended to be qualified) under 
                                section 401 of the Internal Revenue 
                                Code of 1986, or other 
                                nondiscriminatory benefit plan;
                                    ``(II) any payment made pursuant to 
                                a bona fide deferred compensation plan 
                                or arrangement which the Agency 
                                determines, by regulation or order, to 
                                be permissible; or
                                    ``(III) any payment made by reason 
                                of the death or disability of an 
                                affiliated party.
                    ``(E) Other definitions.--For purposes of this 
                paragraph--
                            ``(i) Indemnification payment.--Subject to 
                        subparagraph (F), the term `indemnification 
                        payment' means any payment (or any agreement to 
                        make any payment) by any Bank for the benefit 
                        of any person who is or was an affiliated 
                        party, to pay or reimburse such person for any 
                        liability or legal expense with regard to any 
                        administrative proceeding or civil action 
                        instituted by the Agency which results in a 
                        final order under which such person--
                                    ``(I) is assessed a civil money 
                                penalty;
                                    ``(II) is removed or prohibited 
                                from participating in conduct of the 
                                affairs of the Bank; or
                                    ``(III) is required to take any 
                                affirmative action described in section 
                                2B(a)(5) with respect to such Bank.
                            ``(ii) Liability or legal expense.--The 
                        term `liability or legal expense' means--
                                    ``(I) any legal or other 
                                professional expense incurred in 
                                connection with any claim, proceeding, 
                                or action;
                                    ``(II) the amount of, and any cost 
                                incurred in connection with, any 
                                settlement of any claim, proceeding, or 
                                action; and
                                    ``(III) the amount of, and any cost 
                                incurred in connection with, any 
                                judgment or penalty imposed with 
                                respect to any claim, proceeding, or 
                                action.
                            ``(iii) Payment.--The term `payment' 
                        includes--
                                    ``(I) any direct or indirect 
                                transfer of any funds or any asset; and
                                    ``(II) any segregation of any funds 
                                or assets for the purpose of making, or 
                                pursuant to an agreement to make, any 
                                payment after the date on which such 
                                funds or assets are segregated, without 
                                regard to whether the obligation to 
                                make such payment is contingent on--
                                            ``(aa) the determination, 
                                        after such date, of the 
                                        liability for the payment of 
                                        such amount; or
                                            ``(bb) the liquidation, 
                                        after such date, of the amount 
                                        of such payment.
                    ``(F) Certain commercial insurance coverage not 
                treated as covered benefit payment.--No provision of 
                this paragraph shall be construed as prohibiting any 
                Bank from purchasing any commercial insurance policy or 
                fidelity bond, except that, subject to any affirmative 
                action required under section 2B(a)(5), such insurance 
                policy or bond shall not cover any legal or liability 
                expense of the Bank which is described in subparagraph 
                (E)(i).''.

TITLE III--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY OF OFHEO AND 
                   THE FEDERAL HOUSING FINANCE BOARD

                           Subtitle A--OFHEO

SEC. 301. ABOLISHMENT OF OFHEO.

    (a) In General.--Effective at the end of the 180-day period 
beginning on the date of 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 180-day period beginning on 
the date of enactment of this Act, the Director of the Office of 
Federal Housing Enterprise Oversight, solely for the purpose of winding 
up the affairs of the Office of Federal Housing Enterprise Oversight--
            (1) shall manage the employees of such Office and provide 
        for the payment of the compensation and benefits of any such 
        employee which accrue before the effective date of the transfer 
        of such employee under section 303; and
            (2) may take any other action necessary for the purpose of 
        winding up the affairs of the Office.
    (c) Status of Employees Before Transfer.--The amendments made by 
title I and the abolishment of the Office of Federal Housing Enterprise 
Oversight under subsection (a) of this section may not be construed to 
affect the status of any employee of such Office as employees of an 
agency of the United States for purposes of any other provision of law 
before the effective date of the transfer of any such employee under 
section 303.
    (d) Use of Property and Services.--
            (1) Property.--The Director of the Federal Housing 
        Enterprise Regulatory Agency may use the property of the Office 
        of Federal Housing Enterprise Oversight to perform functions 
        which have been transferred to the Director of the Federal 
        Housing Enterprise Regulatory Agency for such time as is 
        reasonable to facilitate the orderly transfer of functions 
        transferred under any other provision of this Act or any 
        amendment made by this Act to any provision of law.
            (2) Agency services.--Any agency, department, or other 
        instrumentality of the United States, and any successor to any 
        such agency, department, or instrumentality, which was 
        providing supporting services to the Office of Federal Housing 
        Enterprise Oversight before the expiration of the period under 
        subsection (a) in connection with functions that are 
        transferred to the Director of the Federal Housing Enterprise 
        Regulatory Agency shall--
                    (A) continue to provide such services, on a 
                reimbursable basis, until the transfer of such 
                functions is complete; and
                    (B) consult with any such agency to coordinate and 
                facilitate a prompt and reasonable transition.
    (e) Savings Provisions.--
            (1) Existing rights, duties, and obligations not 
        affected.--Subsection (a) shall not affect the validity of any 
        right, duty, or obligation of the United States, the Director 
        of the Office of Federal Housing Enterprise Oversight, or any 
        other person, which--
                    (A) arises under 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 date of 
                abolishment under subsection (a).
            (2) Continuation of suits.--No action or other proceeding 
        commenced by or against the Director of the Office of Federal 
        Housing Enterprise Oversight in connection with functions that 
        are transferred to the Director of the Federal Housing 
        Enterprise Regulatory Agency shall abate by reason of the 
        enactment of this Act, except that the Director of the Federal 
        Housing Enterprise Regulatory Agency shall be substituted for 
        the Director of the Office of Federal Housing Enterprise 
        Oversight as a party to any such action or proceeding.

SEC. 302. CONTINUATION AND COORDINATION OF CERTAIN REGULATIONS.

    (a) In General.--All regulations, orders, and determinations 
described under subsection (b) shall remain in effect according to the 
terms of such regulations, orders, determinations, and resolutions, and 
shall be enforceable by or against the Director of the Federal Housing 
Enterprise Regulatory Agency or the Secretary of Housing and Urban 
Development, as the case may be, until modified, terminated, set aside, 
or superseded in accordance with applicable law by such Director or 
Secretary, as the case may be, any court of competent jurisdiction, or 
operation of law.
    (b) Applicability.--A regulation, order, or determination is 
described under this subsection if they--
            (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) the Federal National Mortgage 
                        Association Charter Act, with respect to the 
                        Federal National Mortgage Association; or
                            (iii) the Federal Home Loan Mortgage 
                        Corporation Act, with respect to the Federal 
                        Home Loan Mortgage Corporation; or
                    (C) a court of competent jurisdiction and that 
                relate to functions transferred by this Act; and
            (2) are in effect on the effective date of the abolishment 
        under section 301(a).

SEC. 303. TRANSFER AND RIGHTS OF EMPLOYEES OF OFHEO.

    (a) Transfer.--Each employee of the Office of Federal Housing 
Enterprise Oversight shall be transferred to the Federal Housing 
Enterprise Regulatory Agency for employment not later than the 
effective date of the abolishment under section 301(a) and such 
transfer shall be deemed a transfer of function for purposes of section 
3503 of title 5, United States Code.
    (b) Guaranteed Positions.--Each employee transferred under 
subsection (a) shall be guaranteed a position with the same status, 
tenure, grade, and pay as that held on the day immediately preceding 
the transfer. Each such employee holding a permanent position shall not 
be involuntarily separated or reduced in grade or compensation for 12 
months after the date of transfer, except for cause or, if the employee 
is a temporary employee, separated in accordance with the terms of the 
appointment.
    (c) Appointment Authority for Excepted and Senior Executive Service 
Employees.--
            (1) In general.--In the case of employees occupying 
        positions in the excepted service or the Senior Executive 
        Service, any appointment authority established under law or by 
        regulations of the Office of Personnel Management for filling 
        such positions shall be transferred, subject to paragraph (2).
            (2) Decline of transfer.--The Director of the Federal 
        Housing Enterprise Regulatory Agency may decline a transfer of 
        authority under paragraph (1) to the extent that such authority 
        relates to positions excepted from the competitive service 
        because of their confidential, policymaking, policy-
        determining, or policy-advocating character, and noncareer 
        positions in the Senior Executive Service (within the meaning 
        of section 3132(a)(7) of title 5, United States Code).
    (d) Reorganization.--If the Director of the Federal Housing 
Enterprise Regulatory Agency determines, after the end of the 1-year 
period beginning on the effective date of the abolishment under section 
301(a), that a reorganization of the combined workforce is required, 
that reorganization shall be deemed a major reorganization for purposes 
of affording affected employees retirement under section 8336(d)(2) or 
8414(b)(1)(B) of title 5, United States Code.
    (e) Employee Benefit Programs.--
            (1) In general.--Any employee of the Office of Federal 
        Housing Enterprise Oversight accepting employment with the 
        Federal Housing Enterprise Regulatory Agency as a result of a 
        transfer under subsection (a) may retain for 12 months after 
        the date on which such transfer occurs membership in any 
        employee benefit program of the Director of the Federal Housing 
        Enterprise Regulatory Agency or the Office of Federal Housing 
        Enterprise Oversight of the Department of Housing and Urban 
        Development, as applicable, including insurance, to which such 
        employee belongs on the date of the abolishment under section 
        301(a) if--
                    (A) the employee does not elect to give up the 
                benefit or membership in the program; and
                    (B) the benefit or program is continued by the 
                Director of the Federal Housing Enterprise Regulatory 
                Agency.
            (2) Cost differential.--The difference in the costs between 
        the benefits which would have been provided by the Office of 
        Federal Housing Enterprise Oversight and those provided by this 
        section shall be paid by the Director of the Federal Housing 
        Enterprise Regulatory Agency. If any employee elects to give up 
        membership in a health insurance program or the health 
        insurance program is not continued by such Director, the 
        employee shall be permitted to select an alternate Federal 
        health insurance program within 30 days after such election or 
        notice, without regard to any other regularly scheduled open 
        season.

SEC. 304. TRANSFER OF PROPERTY AND FACILITIES.

    Upon the effective date of its abolishment under section 301(a), 
all property of the Office of Federal Housing Enterprise Oversight of 
the Department of Housing and Urban Development shall transfer to the 
Director of the Federal Housing Enterprise Regulatory Agency.

               Subtitle B--Federal Housing Finance Board

SEC. 311. ABOLISHMENT OF THE FEDERAL HOUSING FINANCE BOARD.

    (a) In General.--Effective at the end of the 1-year period 
beginning on the date of enactment of this Act, the Federal Housing 
Finance Board (in this title referred to as the ``Board'') is 
abolished.
    (b) Disposition of Affairs.--During the 1-year period beginning on 
the date of enactment of this Act, the Board, solely for the purpose of 
winding up the affairs of the Board--
            (1) shall manage the employees of such Board and provide 
        for the payment of the compensation and benefits of any such 
        employee which accrue before the effective date of the transfer 
        of such employee under section 403; and
            (2) may take any other action necessary for the purpose of 
        winding up the affairs of the Board.
    (c) Status of Employees Before Transfer.--The amendments made by 
titles I and II and the abolishment of the Board under subsection (a) 
may not be construed to affect the status of any employee of such Board 
as employees of an agency of the United States for purposes of any 
other provision of law before the effective date of the transfer of any 
such employee under section 403.
    (d) Use of Property and Services.--
            (1) Property.--The Director of the Federal Housing 
        Enterprise Regulatory Agency may use the property of the Board 
        to perform functions which have been transferred to the 
        Director of the Federal Housing Enterprise Regulatory Agency 
        for such time as is reasonable to facilitate the orderly 
        transfer of functions transferred under any other provision of 
        this Act or any amendment made by this Act to any other 
        provision of law.
            (2) Agency services.--Any agency, department, or other 
        instrumentality of the United States, and any successor to any 
        such agency, department, or instrumentality, which was 
        providing supporting services to the Board before the 
        expiration of the 1-year period under subsection (a) in 
        connection with functions that are transferred to the Director 
        of the Federal Housing Enterprise Regulatory Agency shall--
                    (A) continue to provide such services, on a 
                reimbursable basis, until the transfer of such 
                functions is complete; and
                    (B) consult with any such agency to coordinate and 
                facilitate a prompt and reasonable transition.
    (e) Savings Provisions.--
            (1) Existing rights, duties, and obligations not 
        affected.--Subsection (a) shall not affect the validity of any 
        right, duty, or obligation of the United States, a member of 
        the Board, or any other person, which--
                    (A) arises under 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, the Federal Home Loan Bank 
                Act, or any other provision of law applicable with 
                respect to such Board; and
                    (B) existed on the day before the effective date of 
                the abolishment under subsection (a).
            (2) Continuation of suits.--No action or other proceeding 
        commenced by or against the Board in connection with functions 
        that are transferred to the Director of the Federal Housing 
        Enterprise Regulatory Agency shall abate by reason of the 
        enactment of this Act, except that the Director of the Federal 
        Housing Enterprise Regulatory Agency shall be substituted for 
        the Board or any member thereof as a party to any such action 
        or proceeding.

SEC. 312. CONTINUATION AND COORDINATION OF CERTAIN REGULATIONS.

    (a) In General.--All regulations, orders, and determinations 
described under subsection (b) shall remain in effect according to the 
terms of such regulations, orders, determinations, and resolutions, and 
shall be enforceable by or against the Director of the Federal Housing 
Enterprise Regulatory Agency until modified, terminated, set aside, or 
superseded in accordance with applicable law by such Director, any 
court of competent jurisdiction, or operation of law.
    (b) Applicability.--A regulation, order, or determination is 
described under this subsection if they--
            (1) were issued, made, prescribed, or allowed to become 
        effective by--
                    (A) the Board; or
                    (B) a court of competent jurisdiction and that 
                relate to functions transferred by this Act; and
            (2) are in effect on the effective date of the abolishment 
        under section 401(a).

SEC. 313. TRANSFER AND RIGHTS OF EMPLOYEES OF THE FEDERAL HOUSING 
              FINANCE BOARD.

    (a) Transfer.--Each employee of the Board shall be transferred to 
the Federal Housing Enterprise Regulatory Agency for employment not 
later than the effective date of the abolishment under section 401(a), 
and such transfer shall be deemed a transfer of function for purposes 
of section 3503 of title 5, United States Code.
    (b) Guaranteed Positions.--Each employee transferred under 
subsection (a) shall be guaranteed a position with the same status, 
tenure, grade, and pay as that held on the day immediately preceding 
the transfer. Each such employee holding a permanent position shall not 
be involuntarily separated or reduced in grade or compensation for 12 
months after the date of transfer, except for cause or, if the employee 
is a temporary employee, separated in accordance with the terms of the 
appointment.
    (c) Appointment Authority for Excepted and Senior Executive Service 
Employees.--
            (1) In general.--In the case of employees occupying 
        positions in the excepted service or the Senior Executive 
        Service, any appointment authority established under law or by 
        regulations of the Office of Personnel Management for filling 
        such positions shall be transferred, subject to paragraph (2).
            (2) Decline of transfer.--The Director of the Federal 
        Housing Enterprise Regulatory Agency may decline a transfer of 
        authority under paragraph (1) to the extent that such authority 
        relates to positions excepted from the competitive service 
        because of their confidential, policymaking, policy-
        determining, or policy-advocating character, and noncareer 
        positions in the Senior Executive Service (within the meaning 
        of section 3132(a)(7) of title 5, United States Code).
    (d) Reorganization.--If the Director of the Federal Housing 
Enterprise Regulatory Agency determines, after the end of the 1-year 
period beginning on the effective date of the abolishment under section 
401(a), that a reorganization of the combined workforce is required, 
that reorganization shall be deemed a major reorganization for purposes 
of affording affected employees retirement under section 8336(d)(2) or 
8414(b)(1)(B) of title 5, United States Code.
    (e) Employee Benefit Programs.--
            (1) In general.--Any employee of the Board accepting 
        employment with the Federal Housing Enterprise Regulatory 
        Agency as a result of a transfer under subsection (a) may 
        retain for 12 months after the date on which such transfer 
        occurs membership in any employee benefit program of the 
        Federal Housing Enterprise Regulatory Agency or the Board, as 
        applicable, including insurance, to which such employee belongs 
        on the effective date of the abolishment under section 201(a) 
        if--
                    (A) the employee does not elect to give up the 
                benefit or membership in the program; and
                    (B) the benefit or program is continued by the 
                Director of the Federal Housing Enterprise Regulatory 
                Agency.
            (2) Cost differential.--The difference in the costs between 
        the benefits which would have been provided by the Board and 
        those provided by this section shall be paid by the Director of 
        the Federal Housing Enterprise Regulatory Agency. If any 
        employee elects to give up membership in a health insurance 
        program or the health insurance program is not continued by 
        such Director, the employee shall be permitted to select an 
        alternate Federal health insurance program within 30 days after 
        the date of such election or notice, without regard to any 
        other regularly scheduled open season.

SEC. 314. TRANSFER OF PROPERTY AND FACILITIES.

    Upon the effective date of the abolishment under section 401(a), 
all property of the Board shall transfer to the Director of the Federal 
Housing Enterprise Regulatory Agency.

                   TITLE IV--MISCELLANEOUS PROVISIONS

SEC. 401. STUDY AND REPORT ON BASEL II AND ENTERPRISE DEBT.

    (a) Study.--The Board of Governors of the Federal Reserve System 
shall conduct a study the effects of the new Basel Capital Accord 
(Basel II), as endorsed by the Group of Ten countries in 
''International Convergence of Capital Measurement and Capital 
Standards: a Revised Framework'' on the regulated entities, as defined 
under this Act. The study shall examine the debt of the regulated 
entities and the capital classification on financial institutions that 
hold such debt.
    (b) Report.--The Chairman of the Board of Governors of the Federal 
Reserve System shall submit a report to Congress on the results of the 
study required by this section 2 years after the date of enactment of 
this Act.

SEC. 402. AFFORDABLE HOUSING REPORTING.

    The Inspector General of the Federal Housing Enterprise Regulatory 
Agency shall conduct an annual audit of the affordable housing 
activities of the Federal National Mortgage Association and the Federal 
Home Loan Mortgage Corporation, programs, and partnerships to ensure 
that such activities, programs, and partnerships support the affordable 
housing mission of those enterprises.
                                 <all>