[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1427 Introduced in House (IH)]







110th CONGRESS
  1st Session
                                H. R. 1427

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


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 9, 2007

 Mr. Frank of Massachusetts (for himself, Mr. Watt, Mr. Baker, and Mr. 
Gary G. Miller of California) introduced the following bill; which was 
            referred to the Committee on Financial Services

_______________________________________________________________________

                                 A BILL


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

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Federal Housing 
Finance Reform Act of 2007''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title and table of contents.
Sec. 2. Definitions.
  TITLE I--REFORM OF REGULATION OF ENTERPRISES AND FEDERAL HOME LOAN 
                                 BANKS

            Subtitle A--Improvement of Safety and Soundness

Sec. 101. Establishment of the Federal Housing Finance Agency.
Sec. 102. Duties and authorities of Director.
Sec. 103. Federal Housing Enterprise Board.
Sec. 104. Authority to require reports by regulated entities.
Sec. 105. Disclosure of charitable contributions by Enterprises.
Sec. 106. Assessments.
Sec. 107. Examiners and accountants.
Sec. 108. Prohibition and withholding of executive compensation.
Sec. 109. Reviews of regulated entities.
Sec. 110. Regulations and orders.
Sec. 111. Risk-Based capital requirements.
Sec. 112. Minimum and critical capital levels.
Sec. 113. Review of and authority over enterprise assets and 
                            liabilities.
Sec. 114. Corporate governance of enterprises.
Sec. 115. Required registration under Securities Exchange Act of 1934.
Sec. 116. Financial Institutions Examination Council.
Sec. 117. Guarantee fee study.
Sec. 118. Conforming amendments.
             Subtitle B--Improvement of Mission Supervision

Sec. 121. Transfer of product approval and housing goal oversight.
Sec. 122. Review of enterprise products.
Sec. 123. Conforming loan limits.
Sec. 124. Annual housing report regarding regulated entities.
Sec. 125. Revision of housing goals.
Sec. 126. Duty to serve underserved markets.
Sec. 127. Monitoring and enforcing compliance with housing goals.
Sec. 128. Affordable Housing Fund.
Sec. 129. Consistency with mission.
Sec. 130. Enforcement.
Sec. 131. Conforming amendments.
                  Subtitle C--Prompt Corrective Action

Sec. 141. Capital classifications.
Sec. 142. Supervisory actions applicable to undercapitalized regulated 
                            entities.
Sec. 143. Supervisory actions applicable to significantly 
                            undercapitalized regulated entities.
Sec. 144. Authority over critically undercapitalized regulated 
                            entities.
Sec. 145. Conforming amendments.
                    Subtitle D--Enforcement Actions

Sec. 161. Cease-and-Desist proceedings.
Sec. 162. Temporary Cease-and-Desist proceedings.
Sec. 163. Prejudgment attachment.
Sec. 164. Enforcement and jurisdiction.
Sec. 165. Civil money penalties.
Sec. 166. Removal and prohibition authority.
Sec. 167. Criminal penalty.
Sec. 168. Subpoena authority.
Sec. 169. Conforming amendments.
                     Subtitle E--General Provisions

Sec. 181. Boards of Enterprises.
Sec. 182. Report on portfolio operations, safety and soundness, and 
                            mission of Enterprises.
Sec. 183. Conforming and technical amendments.
Sec. 184. Study of alternative secondary market systems.
Sec. 185. Effective date.
                   TITLE II--FEDERAL HOME LOAN BANKS

Sec. 201. Definitions.
Sec. 202. Directors.
Sec. 203. Federal Housing Finance Agency oversight of Federal Home Loan 
                            Banks.
Sec. 204. Joint activities of Banks.
Sec. 205. Sharing of information between Federal Home Loan Banks.
Sec. 206. Reorganization of Banks and voluntary merger.
Sec. 207. Securities and Exchange Commission disclosure.
Sec. 208. Community financial institution members.
Sec. 209. Technical and conforming amendments.
Sec. 210. Study of affordable Housing program use for long-term care 
                            facilities.
Sec. 211. Effective date.
TITLE III--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY OF OFFICE OF 
 FEDERAL HOUSING ENTERPRISE OVERSIGHT, FEDERAL HOUSING FINANCE BOARD, 
            AND DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

       Subtitle A--Office of Federal Housing Enterprise Oversight

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

Sec. 321. Abolishment of the Federal Housing Finance Board.
Sec. 322. Continuation and coordination of certain regulations.
Sec. 323. Transfer and rights of employees of the Federal Housing 
                            Finance Board.
Sec. 324. Transfer of property and facilities.
        Subtitle C--Department of Housing and Urban Development

Sec. 341. Termination of enterprise-related functions.
Sec. 342. Continuation and coordination of certain regulations.
Sec. 343. Transfer and rights of employees.
Sec. 344. Transfer of appropriations, property, and facilities.

SEC. 2. DEFINITIONS.

    Section 1303 of the Housing and Community Development Act of 1992 
(12 U.S.C. 4502) is amended--
            (1) in paragraph (7), by striking ``an enterprise'' and 
        inserting ``a regulated entity'';
            (2) by striking ``the enterprise'' each place such term 
        appears (except in paragraphs (4) and (18)) and inserting ``the 
        regulated entity'';
            (3) in paragraph (5), by striking ``Office of Federal 
        Housing Enterprise Oversight of the Department of Housing and 
        Urban Development'' and inserting ``Federal Housing Finance 
        Agency'';
            (4) in each of paragraphs (8), (9), (10), and (19), by 
        striking ``Secretary'' each place that term appears and 
        inserting ``Director'';
            (5) in paragraph (13), by inserting ``, with respect to an 
        enterprise,'' after ``means'';
            (6) by redesignating paragraphs (16) through (19) as 
        paragraphs (20) through (23), respectively;
            (7) by striking paragraphs (14) and (15) and inserting the 
        following new paragraphs:
            ``(18) Regulated entity.--The term `regulated entity' 
        means--
                    ``(A) the Federal National Mortgage Association and 
                any affiliate thereof;
                    ``(B) the Federal Home Loan Mortgage Corporation 
                and any affiliate thereof; and
                    ``(C) each Federal home loan bank.
            ``(19) Regulated entity-affiliated party.--The term 
        `regulated entity-affiliated party' means--
                    ``(A) any director, officer, employee, or agent 
                for, a regulated entity, or controlling shareholder of 
                an enterprise;
                    ``(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, except that a shareholder of a 
                regulated entity shall not be considered to have 
                participated in the affairs of that regulated entity 
                solely by reason of being a member or customer of the 
                regulated entity;
                    ``(C) any independent contractor for a regulated 
                entity (including any attorney, appraiser, or 
                accountant), if--
                            ``(i) the independent contractor knowingly 
                        or recklessly participates in--
                                    ``(I) any violation of any law or 
                                regulation;
                                    ``(II) any breach of fiduciary 
                                duty; or
                                    ``(III) any unsafe or unsound 
                                practice; and
                            ``(ii) such violation, breach, or practice 
                        caused, or is likely to cause, more than a 
                        minimal financial loss to, or a significant 
                        adverse effect on, the regulated entity; and''.
                    ``(D) any not-for-profit corporation that receives 
                its principal funding, on an ongoing basis, from any 
                regulated entity.'';
            (8) by redesignating paragraphs (8) through (13) as 
        paragraphs (12) through (17), respectively; and
            (9) by inserting after paragraph (7) the following new 
        paragraph:
            ``(11) Federal home loan bank.--The term `Federal home loan 
        bank' means a bank established under the authority of the 
        Federal Home Loan Bank Act.'';
            (10) by redesignating paragraphs (2) through (7) as 
        paragraphs (5) through (10), respectively; and
            (11) by inserting after paragraph (1) the following new 
        paragraphs:
            ``(2) Agency.--The term `Agency' means the Federal Housing 
        Finance Agency.
            ``(3) Authorizing statutes.--The term `authorizing 
        statutes' means--
                    ``(A) the Federal National Mortgage Association 
                Charter Act;
                    ``(B) the Federal Home Loan Mortgage Corporation 
                Act; and
                    ``(C) the Federal Home Loan Bank Act.
            ``(4) Board.--The term `Board' means the Federal Housing 
        Enterprise Board established under section 1313B.''.

  TITLE I--REFORM OF REGULATION OF ENTERPRISES AND FEDERAL HOME LOAN 
                                 BANKS

            Subtitle A--Improvement of Safety and Soundness

SEC. 101. ESTABLISHMENT OF THE FEDERAL HOUSING FINANCE AGENCY.

    (a) In General.--The Housing and Community Development Act of 1992 
(12 U.S.C. 4501 et seq.) is amended by striking sections 1311 and 1312 
and inserting the following:

``SEC. 1311. ESTABLISHMENT OF THE FEDERAL HOUSING FINANCE AGENCY.

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

``SEC. 1312. DIRECTOR.

    ``(a) Establishment of Position.--There is established the position 
of the Director of the Federal Housing Finance Agency, who shall be the 
head of the Agency.
    ``(b) Appointment; Term.--
            ``(1) Appointment.--The Director shall be appointed by the 
        President, by and with the advice and consent of the Senate, 
        from among individuals who are citizens of the United States, 
        have a demonstrated understanding of financial management or 
        oversight, and have a demonstrated understanding of capital 
        markets, including the mortgage securities markets and housing 
        finance.
            ``(2) Term and removal.--The Director shall be appointed 
        for a term of 5 years and may be removed by the President only 
        for cause.
            ``(3) Vacancy.--A vacancy in the position of Director that 
        occurs before the expiration of the term for which a Director 
        was appointed shall be filled in the manner established under 
        paragraph (1), and the Director appointed to fill such vacancy 
        shall be appointed only for the remainder of such term.
            ``(4) Service after end of term.--An individual may serve 
        as the Director after the expiration of the term for which 
        appointed until a successor has been appointed.
            ``(5) Transitional provision.--Notwithstanding paragraphs 
        (1) and (2), the Director of the Office of Federal Housing 
        Enterprise Oversight of the Department of Housing and Urban 
        Development shall serve as the Director until a successor has 
        been appointed under paragraph (1).
    ``(c) Deputy Director of the Division of Enterprise Regulation.--
            ``(1) In general.--The Agency shall have a Deputy Director 
        of the Division of Enterprise Regulation, who shall be 
        appointed by the Director from among individuals who are 
        citizens of the United States, have a demonstrated 
        understanding of financial management or oversight and of 
        mortgage securities markets and housing finance.
            ``(2) Functions.--The Deputy Director of the Division of 
        Enterprise Regulation shall have such functions, powers, and 
        duties with respect to the oversight of the enterprises as the 
        Director shall prescribe.
    ``(d) Deputy Director of the Division of Federal Home Loan Bank 
Regulation.--
            ``(1) In general.--The Agency shall have a Deputy Director 
        of the Division of Federal Home Loan Bank Regulation, who shall 
        be appointed by the Director from among individuals who are 
        citizens of the United States, have a demonstrated 
        understanding of financial management or oversight and of the 
        Federal Home Loan Bank System and housing finance.
            ``(2) Functions.--The Deputy Director of the Division of 
        Federal Home Loan Bank Regulation shall have such functions, 
        powers, and duties with respect to the oversight of the Federal 
        home loan banks as the Director shall prescribe.
    ``(e) Deputy Director for Housing.--
            ``(1) In general.--The Agency shall have a Deputy Director 
        for Housing, who shall be appointed by the Director from among 
        individuals who are citizens of the United States, and have a 
        demonstrated understanding of the housing markets and housing 
        finance.
            ``(2) Functions.--The Deputy Director for Housing shall 
        have such functions, powers, and duties with respect to the 
        oversight of the housing mission and goals of the enterprises, 
        and with respect to oversight of the housing mission of the 
        Federal home loan banks, as the Director shall prescribe.
    ``(f) Limitations.--The Director and each of the Deputy Directors 
may not--
            ``(1) have any direct or indirect financial interest in any 
        regulated entity or regulated entity-affiliated party;
            ``(2) hold any office, position, or employment in any 
        regulated entity or regulated entity-affiliated party; or
            ``(3) have served as an executive officer or director of 
        any regulated entity, or regulated entity-affiliated party, at 
        any time during the 3-year period ending on the date of 
        appointment of such individual as Director or Deputy Director.
    ``(g) Ombudsman.--The Director shall establish, by regulation, an 
Office of the Ombudsman in the Agency. Such regulations shall provide 
that the Ombudsman will consider complaints and appeals from any 
regulated entity and any person that has a business relationship with a 
regulated entity and shall specify the duties and authority of the 
Ombudsman.''.
    (b) Appointment of Director.--Notwithstanding any other provision 
of law or of this Act, the President may, any time after the date of 
the enactment of this Act, appoint an individual to serve as the 
Director of the Federal Housing Finance Agency, as such office is 
established by the amendment made by subsection (a). This subsection 
shall take effect on the date of the enactment of this Act.

SEC. 102. DUTIES AND AUTHORITIES OF DIRECTOR.

    (a) In General.--The Housing and Community Development Act of 1992 
(12 U.S.C. 4513) is amended by striking section 1313 and inserting the 
following new sections:

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

    ``(a) Duties.--
            ``(1) Principal duties.--The principal duties of the 
        Director shall be--
                    ``(A) to oversee the operations of each regulated 
                entity; and
                    ``(B) to ensure that--
                            ``(i) each regulated entity operates in a 
                        safe and sound manner, including maintenance of 
                        adequate capital and internal controls;
                            ``(ii) the operations and activities of 
                        each regulated entity foster liquid, efficient, 
                        competitive, and resilient national housing 
                        finance markets that minimize the cost of 
                        housing finance (including activities relating 
                        to mortgages on housing for low- and moderate- 
                        income families involving a reasonable economic 
                        return that may be less than the return earned 
                        on other activities);
                            ``(iii) each regulated entity complies with 
                        this title and the rules, regulations, 
                        guidelines, and orders issued under this title 
                        and the authorizing statutes; and
                            ``(iv) each regulated entity carries out 
                        its statutory mission only through activities 
                        that are consistent with this title and the 
                        authorizing statutes.
            ``(2) Scope of authority.--The authority of the Director 
        shall include the authority--
                    ``(A) to review and, if warranted based on the 
                principal duties described in paragraph (1), reject any 
                acquisition or transfer of a controlling interest in an 
                enterprise; and
                    ``(B) to exercise such incidental powers as may be 
                necessary or appropriate to fulfill the duties and 
                responsibilities of the Director in the supervision and 
                regulation of each regulated entity.
    ``(b) Delegation of Authority.--The Director may delegate to 
officers or employees of the Agency, including each of the Deputy 
Directors, any of the functions, powers, or duties of the Director, as 
the Director considers appropriate.
    ``(c) Litigation Authority.--
            ``(1) In general.--In enforcing any provision of this 
        title, any regulation or order prescribed under this title, or 
        any other provision of law, rule, regulation, or order, or in 
        any other action, suit, or proceeding to which the Director is 
        a party or in which the Director is interested, and in the 
        administration of conservatorships and receiverships, the 
        Director may act in the Director's own name and through the 
        Director's own attorneys, or request that the Attorney General 
        of the United States act on behalf of the Director.
            ``(2) Consultation with attorney general.--The Director 
        shall provide notice to, and consult with, the Attorney General 
        of the United States before taking an action under paragraph 
        (1) of this subsection or under section 1344(a), 1345(d), 
        1348(c), 1372(e), 1375(a), 1376(d), or 1379D(c), except that, 
        if the Director determines that any delay caused by such prior 
        notice and consultation may adversely affect the safety and 
        soundness responsibilities of the Director under this title, 
        the Director shall notify the Attorney General as soon as 
        reasonably possible after taking such action.
            ``(3) Subject to suit.--Except as otherwise provided by 
        law, the Director shall be subject to suit (other than suits on 
        claims for money damages) by a regulated entity or director or 
        officer thereof with respect to any matter under this title or 
        any other applicable provision of law, rule, order, or 
        regulation under this title, in the United States district 
        court for the judicial district in which the regulated entity 
        has its principal place of business, or in the United States 
        District Court for the District of Columbia, and the Director 
        may be served with process in the manner prescribed by the 
        Federal Rules of Civil Procedure.

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

    ``(a) Standards.--The Director shall establish standards, by 
regulation, guideline, or order, for each regulated entity relating 
to--
            ``(1) adequacy of internal controls and information systems 
        taking into account the nature and scale of business 
        operations;
            ``(2) independence and adequacy of internal audit systems;
            ``(3) management of credit and counterparty risk, including 
        systems to identify concentrations of credit risk and 
        prudential limits to restrict exposure of the regulated entity 
        to a single counterparty or groups of related counterparties;
            ``(4) management of interest rate risk exposure;
            ``(5) management of market risk, including standards that 
        provide for systems that accurately measure, monitor, and 
        control market risks and, as warranted, that establish 
        limitations on market risk;
            ``(6) adequacy and maintenance of liquidity and reserves;
            ``(7) management of any asset and investment portfolio;
            ``(8) investments and acquisitions by a regulated entity, 
        to ensure that they are consistent with the purposes of this 
        Act and the authorizing statutes;
            ``(9) maintenance of adequate records, in accordance with 
        consistent accounting policies and practices that enable the 
        Director to evaluate the financial condition of the regulated 
        entity;
            ``(10) issuance of subordinated debt by that particular 
        regulated entity, as the Director considers necessary;
            ``(11) overall risk management processes, including 
        adequacy of oversight by senior management and the board of 
        directors and of processes and policies to identify, measure, 
        monitor, and control material risks, including reputational 
        risks, and for adequate, well-tested business resumption plans 
        for all major systems with remote site facilities to protect 
        against disruptive events; and
            ``(12) such other operational and management standards as 
        the Director determines to be appropriate.
    ``(b) Failure To Meet Standards.--
            ``(1) Plan requirement.--
                    ``(A) In general.--If the Director determines that 
                a regulated entity fails to meet any standard 
                established under subsection (a)--
                            ``(i) if such standard is established by 
                        regulation, the Director shall require the 
                        regulated entity to submit an acceptable plan 
                        to the Director within the time allowed under 
                        subparagraph (C); and
                            ``(ii) if such standard is established by 
                        guideline, the Director may require the 
                        regulated entity to submit a plan described in 
                        clause (i).
                    ``(B) Contents.--Any plan required under 
                subparagraph (A) shall specify the actions that the 
                regulated entity will take to correct the deficiency. 
                If the regulated entity is undercapitalized, the plan 
                may be a part of the capital restoration plan for the 
                regulated entity under section 1369C.
                    ``(C) Deadlines for submission and review.--The 
                Director shall by regulation establish deadlines that--
                            ``(i) provide the regulated entities with 
                        reasonable time to submit plans required under 
                        subparagraph (A), and generally require a 
                        regulated entity to submit a plan not later 
                        than 30 days after the Director determines that 
                        the entity fails to meet any standard 
                        established under subsection (a); and
                            ``(ii) require the Director to act on plans 
                        expeditiously, and generally not later than 30 
                        days after the plan is submitted.
            ``(2) Required order upon failure to submit or implement 
        plan.--If a regulated entity fails to submit an acceptable plan 
        within the time allowed under paragraph (1)(C), or fails in any 
        material respect to implement a plan accepted by the Director, 
        the following shall apply:
                    ``(A) Required correction of deficiency.--The 
                Director shall, by order, require the regulated entity 
                to correct the deficiency.
                    ``(B) Other authority.--The Director may, by order, 
                take one or more of the following actions until the 
                deficiency is corrected:
                            ``(i) Prohibit the regulated entity from 
                        permitting its average total assets (as such 
                        term is defined in section 1316(b)) during any 
                        calendar quarter to exceed its average total 
                        assets during the preceding calendar quarter, 
                        or restrict the rate at which the average total 
                        assets of the entity may increase from one 
                        calendar quarter to another.
                            ``(ii) Require the regulated entity--
                                    ``(I) in the case of an enterprise, 
                                to increase its ratio of core capital 
                                to assets.
                                    ``(II) in the case of a Federal 
                                home loan bank, to increase its ratio 
                                of total capital (as such term is 
                                defined in section 6(a)(5) of the 
                                Federal Home Loan Bank Act (12 U.S.C. 
                                1426(a)(5)) to assets.
                            ``(iii) Require the regulated entity to 
                        take any other action that the Director 
                        determines will better carry out the purposes 
                        of this section than any of the actions 
                        described in this subparagraph.
            ``(3) Mandatory restrictions.--In complying with paragraph 
        (2), the Director shall take one or more of the actions 
        described in clauses (i) through (iii) of paragraph (2)(B) if--
                    ``(A) the Director determines that the regulated 
                entity fails to meet any standard prescribed under 
                subsection (a);
                    ``(B) the regulated entity has not corrected the 
                deficiency; and
                    ``(C) during the 18-month period before the date on 
                which the regulated entity first failed to meet the 
                standard, the entity underwent extraordinary growth, as 
                defined by the Director.
    ``(c) Other Enforcement Authority Not Affected.--The authority of 
the Director under this section is in addition to any other authority 
of the Director.''.
    (b) Independence in Congressional Testimony and Recommendations.--
Section 111 of Public Law 93-495 (12 U.S.C. 250) is amended by striking 
``the Federal Housing Finance Board'' and inserting ``the Director of 
the Federal Housing Finance Agency''.

SEC. 103. FEDERAL HOUSING ENTERPRISE BOARD.

    (a) In General.--Title XIII of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4501 et seq.) is amended by 
inserting after section 1313A, as added by section 102 of this Act, the 
following new section:

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

    ``(a) In General.--There is established the Federal Housing 
Enterprise Board, which shall advise the Director with respect to 
overall strategies and policies in carrying out the duties of the 
Director under this title.
    ``(b) Limitations.--The Board may not exercise any executive 
authority, and the Director may not delegate to the Board any of the 
functions, powers, or duties of the Director.
    ``(c) Composition.--The Board shall be comprised of 3 members, of 
whom--
            ``(1) one member shall be the Secretary of the Treasury;
            ``(2) one member shall be the Secretary of Housing and 
        Urban Development; and
            ``(3) one 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 or the Secretary of Housing and Urban Development 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 Housing 
and Community Development Act of 1992 (12 U.S.C. 4521 (a)) is amended--
            (1) in paragraph (3), by striking ``and'' at the end; and
            (2) by striking paragraph (4) and inserting the following 
        new paragraphs:
            ``(4) an assessment of the Board 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 missions;
            ``(5) operations, resources, and performance of the Agency; 
        and
            ``(6) such other matters relating to the Agency and its 
        fulfillment of its mission.''.

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

    Section 1314 of the Housing and Community Development Act of 1992 
(12 U.S.C. 4514) is amended--
            (1) in the section heading, by striking ``enterprises'' and 
        inserting ``regulated entities'';
            (2) in subsection (a)--
                    (A) in the subsection heading, by striking 
                ``Special Reports and Reports of Financial Condition'' 
                and inserting ``Regular and Special Reports'';
                    (B) in paragraph (1)--
                            (i) in the paragraph heading, by striking 
                        ``Financial condition'' and inserting ``Regular 
                        reports''; and
                            (ii) by striking ``reports of financial 
                        condition and operations'' and inserting 
                        ``regular reports on the condition (including 
                        financial condition), management, activities, 
                        or operations of the regulated entity, as the 
                        Director considers appropriate''; and
                    (C) in paragraph (2), after ``submit special 
                reports'' insert ``on any of the topics specified in 
                paragraph (1) or such other topics''; and
            (3) by adding at the end the following new subsection:
    ``(c) Reports of Fraudulent Financial Transactions.--
            ``(1) Requirement to report.--The Director shall require a 
        regulated entity to submit to the Director a timely report upon 
        discovery by the regulated entity that it has purchased or sold 
        a fraudulent loan or financial instrument or suspects a 
        possible fraud relating to a purchase or sale of any loan or 
        financial instrument. The Director shall require the regulated 
        entities to establish and maintain procedures designed to 
        discover any such transactions.
            ``(2) Protection from liability for reports.--
                    ``(A) In general.--If a regulated entity makes a 
                report pursuant to paragraph (1), or a regulated 
                entity-affiliated party makes, or requires another to 
                make, such a report, and such report is made in a good 
                faith effort to comply with the requirements of 
                paragraph (1), such regulated entity or regulated 
                entity-affiliated party shall not be liable to any 
                person under any law or regulation of the United 
                States, any constitution, law, or regulation of any 
                State or political subdivision of any State, or under 
                any contract or other legally enforceable agreement 
                (including any arbitration agreement), for such report 
                or for any failure to provide notice of such report to 
                the person who is the subject of such report or any 
                other person identified in the report.
                    ``(B) Rule of construction.--Subparagraph (A) shall 
                not be construed as creating--
                            ``(i) any inference that the term `person', 
                        as used in such subparagraph, may be construed 
                        more broadly than its ordinary usage so as to 
                        include any government or agency of government; 
                        or
                            ``(ii) any immunity against, or otherwise 
                        affecting, any civil or criminal action brought 
                        by any government or agency of government to 
                        enforce any constitution, law, or regulation of 
                        such government or agency.''.

SEC. 105. DISCLOSURE OF CHARITABLE CONTRIBUTIONS BY ENTERPRISES.

    Section 1314 of the Housing and Community Development Act of 1992 
(12 U.S.C. 4514), as amended by the preceding provisions of this Act, 
is further amended by adding at the end the following new subsection:
    ``(d) Disclosure of Charitable Contributions by Enterprises.--
            ``(1) Required disclosure.--The Director shall, by 
        regulation, require each enterprise to submit a report 
        annually, in a format designated by the Director, containing 
        the following information:
                    ``(A) Total value.--The total value of 
                contributions made by the enterprise to nonprofit 
                organizations during its previous fiscal year.
                    ``(B) Substantial contributions.--If the value of 
                contributions made by the enterprise to any nonprofit 
                organization during its previous fiscal year exceeds 
                the designated amount, the name of that organization 
                and the value of contributions.
                    ``(C) Substantial contributions to insider-
                affiliated charities.--Identification of each 
                contribution whose value exceeds the designated amount 
                that were made by the enterprise during the 
                enterprise's previous fiscal year to any nonprofit 
                organization of which a director, officer, or 
                controlling person of the enterprise, or a spouse 
                thereof, was a director or trustee, the name of such 
                nonprofit organization, and the value of the 
                contribution.
            ``(2) Definitions.--For purposes of this subsection--
                    ``(A) the term `designated amount' means such 
                amount as may be designated by the Director by 
                regulation, consistent with the public interest and the 
                protection of investors for purposes of this 
                subsection; and
                    ``(B) the Director may, by such regulations as the 
                Director deems necessary or appropriate in the public 
                interest, define the terms officer and controlling 
                person.
            ``(3) Public availability.--The Director shall make the 
        information submitted pursuant to this subsection publicly 
        available.''.

SEC. 106. ASSESSMENTS.

    Section 1316 of the Housing and Community Development Act of 1992 
(12 U.S.C. 4516) is amended--
            (1) by striking subsection (a) and inserting the following 
        new subsection:
    ``(a) Annual Assessments.--The Director shall establish and collect 
from the regulated entities annual assessments in an amount not 
exceeding the amount sufficient to provide for reasonable costs and 
expenses of the Agency, including--
            ``(1) the expenses of any examinations under section 1317 
        of this Act and under section 20 of the Federal Home Loan Bank 
        Act;
            ``(2) the expenses of obtaining any reviews and credit 
        assessments under section 1319; and
            ``(3) such amounts in excess of actual expenses for any 
        given year as deemed necessary by the Director to maintain a 
        working capital fund in accordance with subsection (e).'';
            (2) in subsection (b)--
                    (A) in the subsection heading, by striking 
                ``Enterprises'' and inserting ``Regulated Entities'' ;
                    (B) by realigning paragraph (2) two ems from the 
                left margin, so as to align the left margin of such 
                paragraph with the left margins of paragraph (1);
                    (C) in paragraph (1)--
                            (i) by striking ``Each enterprise'' and 
                        inserting ``Each regulated entity'';
                            (ii) by striking ``each enterprise'' and 
                        inserting ``each regulated entity''; and
                            (iii) by striking ``both enterprises'' and 
                        inserting ``all of the regulated entities''; 
                        and
                    (D) in paragraph (3)--
                            (i) in subparagraph (B), by striking 
                        ``subparagraph (A)'' and inserting ``clause 
                        (i)'';
                            (ii) by redesignating subparagraphs (A), 
                        (B), and (C) as clauses (i), (ii) and (ii), 
                        respectively, and realigning such clauses, as 
                        so redesignated, so as to be indented 6 ems 
                        from the left margin;
                            (iii) by striking the matter that precedes 
                        clause (i), as so redesignated, and inserting 
                        the following:
            ``(3) Definition of total assets.--For purposes of this 
        section, the term `total assets' means as follows:
                    ``(A) Enterprises.--With respect to an enterprise, 
                the sum of--''; and
                            (iv) by adding at the end the following new 
                        subparagraph:
                    ``(B) Federal home loan banks.--With respect to a 
                Federal home loan bank, the total assets of the Bank, 
                as determined by the Director in accordance with 
                generally accepted accounting principles.'';
            (3) by striking subsection (c) and inserting the following 
        new subsection:
    ``(c) Increased Costs of Regulation.--
            ``(1) Increase for inadequate capitalization.--The 
        semiannual payments made pursuant to subsection (b) by any 
        regulated entity that is not classified (for purposes of 
        subtitle B) as adequately capitalized may be increased, as 
        necessary, in the discretion of the Director to pay additional 
        estimated costs of regulation of the regulated entity.
            ``(2) Adjustment for enforcement activities.--The Director 
        may adjust the amounts of any semiannual assessments for an 
        assessment under subsection (a) that are to be paid pursuant to 
        subsection (b) by a regulated entity, as necessary in the 
        discretion of the Director, to ensure that the costs of 
        enforcement activities under subtitle B and C for a regulated 
        entity are borne only by such regulated entity.
            ``(3) Additional assessment for deficiencies.--If at any 
        time, as a result of increased costs of regulation of a 
        regulated entity that is not classified (for purposes of 
        subtitle B) as adequately capitalized or as the result of 
        supervisory or enforcement activities under subtitle B or C for 
        a regulated entity, the amount available from any semiannual 
        payment made by such regulated entity pursuant to subsection 
        (b) is insufficient to cover the costs of the Agency with 
        respect to such entity, the Director may make and collect from 
        such regulated entity an immediate assessment to cover the 
        amount of such deficiency for the semiannual period. If, at the 
        end of any semiannual period during which such an assessment is 
        made, any amount remains from such assessment, such remaining 
        amount shall be deducted from the assessment for such regulated 
        entity for the following semiannual period.'';
            (4) in subsection (d), by striking ``If'' and inserting 
        ``Except with respect to amounts collected pursuant to 
        subsection (a)(3), if''; and
            (5) by striking subsections (e) through (g) and inserting 
        the following new subsections:
    ``(e) Working Capital Fund.--At the end of each year for which an 
assessment under this section is made, the Director shall remit to each 
regulated entity any amount of assessment collected from such regulated 
entity that is attributable to subsection (a)(3) and is in excess of 
the amount the Director deems necessary to maintain a working capital 
fund.
    ``(f) Treatment of Assessments.--
            ``(1) Deposit.--Amounts received by the Director from 
        assessments under this section may be deposited by the Director 
        in the manner provided in section 5234 of the Revised Statutes 
        (12 U.S.C. 192) for monies deposited by the Comptroller of the 
        Currency.
            ``(2) Not government funds.--The amounts received by the 
        Director from any assessment under this section shall not be 
        construed to be Government or public funds or appropriated 
        money.
            ``(3) No apportionment of funds.--Notwithstanding any other 
        provision of law, the amounts received by the Director from any 
        assessment under this section shall not be subject to 
        apportionment for the purpose of chapter 15 of title 31, United 
        States Code, or under any other authority.
            ``(4) Use of funds.--The Director may use any amounts 
        received by the Director from assessments under this section 
        for compensation of the Director and other employees of the 
        Agency and for all other expenses of the Director and the 
        Agency.
            ``(5) Availability of oversight fund amounts.--
        Notwithstanding any other provision of law, any amounts 
        remaining in the Federal Housing Enterprises Oversight Fund 
        established under this section (as in effect before the 
        effective date under section 185 of the Federal Housing Finance 
        Reform Act of 2007), and any amounts remaining from assessments 
        on the Federal Home Loan banks pursuant to section 18(b) of the 
        Federal Home Loan Bank Act (12 U.S.C. 1438(b)), shall, upon 
        such effective date, be treated for purposes of this subsection 
        as amounts received from assessments under this section.
    ``(g) Budget and Financial Management.--
            ``(1) Financial operating plans and forecasts.--The 
        Director shall provide to the Director of the Office of 
        Management and Budget copies of the Director's financial 
        operating plans and forecasts as prepared by the Director in 
        the ordinary course of the Agency's operations, and copies of 
        the quarterly reports of the Agency's financial condition and 
        results of operations as prepared by the Director in the 
        ordinary course of the Agency's operations.
            ``(2) Financial statements.--The Agency shall prepare 
        annually a statement of assets and liabilities and surplus or 
        deficit; a statement of income and expenses; and a statement of 
        sources and application of funds.
            ``(3) Financial management systems.--The Agency shall 
        implement and maintain financial management systems that comply 
        substantially with Federal financial management systems 
        requirements, applicable Federal accounting standards, and that 
        uses a general ledger system that accounts for activity at the 
        transaction level.
            ``(4) Assertion of internal controls.--The Director shall 
        provide to the Comptroller General an assertion as to the 
        effectiveness of the internal controls that apply to financial 
        reporting by the Agency, using the standards established in 
        section 3512 (c) of title 31, United States Code.
            ``(5) Rule of construction.--This subsection may not be 
        construed as implying any obligation on the part of the 
        Director to consult with or obtain the consent or approval of 
        the Director of the Office of Management and Budget with 
        respect to any reports, plans, forecasts, or other information 
        referred to in paragraph (1) or any jurisdiction or oversight 
        over the affairs or operations of the Agency.
    ``(h) Audit of Agency.--
            ``(1) In general.--The Comptroller General shall annually 
        audit the financial transactions of the Agency in accordance 
        with the U.S. generally accepted government auditing standards 
        as may be prescribed by the Comptroller General of the United 
        States. The audit shall be conducted at the place or places 
        where accounts of the Agency are normally kept. The 
        representatives of the Government Accountability Office shall 
        have access to the personnel and to all books, accounts, 
        documents, papers, records (including electronic records), 
        reports, files, and all other papers, automated data, things, 
        or property belonging to or under the control of or used or 
        employed by the Agency pertaining to its financial transactions 
        and necessary to facilitate the audit, and such representatives 
        shall be afforded full facilities for verifying transactions 
        with the balances or securities held by depositories, fiscal 
        agents, and custodians. All such books, accounts, documents, 
        records, reports, files, papers, and property of the Agency 
        shall remain in possession and custody of the Agency. The 
        Comptroller General may obtain and duplicate any such books, 
        accounts, documents, records, working papers, automated data 
        and files, or other information relevant to such audit without 
        cost to the Comptroller General and the Comptroller General's 
        right of access to such information shall be enforceable 
        pursuant to section 716(c) of title 31, United States Code.
            ``(2) Report.--The Comptroller General shall submit to the 
        Congress a report of each annual audit conducted under this 
        subsection. The report to the Congress shall set forth the 
        scope of the audit and shall include the statement of assets 
        and liabilities and surplus or deficit, the statement of income 
        and expenses, the statement of sources and application of 
        funds, and such comments and information as may be deemed 
        necessary to inform Congress of the financial operations and 
        condition of the Agency, together with such recommendations 
        with respect thereto as the Comptroller General may deem 
        advisable. A copy of each report shall be furnished to the 
        President and to the Agency at the time submitted to the 
        Congress.
            ``(3) Assistance and costs.--For the purpose of conducting 
        an audit under this subsection, the Comptroller General may, in 
        the discretion of the Comptroller General, employ by contract, 
        without regard to section 5 of title 41, United States Code, 
        professional services of firms and organizations of certified 
        public accountants for temporary periods or for special 
        purposes. Upon the request of the Comptroller General, the 
        Director of the Agency shall transfer to the Government 
        Accountability Office from funds available, the amount 
        requested by the Comptroller General to cover the full costs of 
        any audit and report conducted by the Comptroller General. The 
        Comptroller General shall credit funds transferred to the 
        account established for salaries and expenses of the Government 
        Accountability Office, and such amount shall be available upon 
        receipt and without fiscal year limitation to cover the full 
        costs of the audit and report.''.

SEC. 107. EXAMINERS AND ACCOUNTANTS.

    (a) Examinations.--Section 1317 of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4517) is amended--
            (1) in subsection (a), by adding after the period at the 
        end the following: ``Each examination under this subsection of 
        a regulated entity shall include a review of the procedures 
        required to be established and maintained by the regulated 
        entity pursuant to section 1314(c) (relating to fraudulent 
        financial transactions) and the report regarding each such 
        examination shall describe any problems with such procedures 
        maintained by the regulated entity.'';
            (2) in subsection (b)--
                    (A) by inserting ``of a regulated entity'' after 
                ``under this section''; and
                    (B) by striking ``to determine the condition of an 
                enterprise for the purpose of ensuring its financial 
                safety and soundness'' and inserting ``or 
                appropriate''; and
            (3) in subsection (c)--
                    (A) in the second sentence, by inserting ``to 
                conduct examinations under this section'' before the 
                period; and
                    (B) in the third sentence, by striking ``from 
                amounts available in the Federal Housing Enterprises 
                Oversight Fund''.
    (b) Enhanced Authority To Hire Examiners and Accountants.--Section 
1317 of the Housing and Community Development Act of 1992 (12 U.S.C. 
4517) is amended by adding at the end the following new subsection:
    ``(g) Appointment of Accountants, Economists, Specialists, and 
Examiners.--
            ``(1) Applicability.--This section applies with respect to 
        any position of examiner, accountant, specialist in financial 
        markets, specialist in technology, and economist at the Agency, 
        with respect to supervision and regulation of the regulated 
        entities, that is in the competitive service.
            ``(2) Appointment authority.--The Director may appoint 
        candidates to any position described in paragraph (1)--
                    ``(A) in accordance with the statutes, rules, and 
                regulations governing appointments in the excepted 
                service; and
                    ``(B) notwithstanding any statutes, rules, and 
                regulations governing appointments in the competitive 
                service.''.
    (c) Repeal.--Section 20 of the Federal Home Loan Bank Act (12 
U.S.C. 1440) is amended--
            (1) in the section heading, by striking ``reports'' and 
        inserting ``gao audits'';
            (2) in the third sentence, by striking ``the Board and'' 
        each place such term appears; and
            (3) by striking the first two sentences and inserting the 
        following: ``The Federal home loan banks shall be subject to 
        examinations by the Director to the extent provided in section 
        1317 of the Federal Housing Enterprises Financial Safety and 
        Soundness Act of 1992 (12 U.S.C. 4517).''.

SEC. 108. PROHIBITION AND WITHHOLDING OF EXECUTIVE COMPENSATION.

    (a) In General.--Section 1318 of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4518) is amended--
            (1) in the section heading, by striking ``of excessive'' 
        and inserting ``and withholding of executive'';
            (2) by redesignating subsection (b) as subsection (d); and
            (3) by inserting after subsection (a) the following new 
        subsections:
    ``(b) Factors.--In making any determination under subsection (a), 
the Director may take into consideration any factors the Director 
considers relevant, including any wrongdoing on the part of the 
executive officer, and such wrongdoing shall include any fraudulent act 
or omission, breach of trust or fiduciary duty, violation of law, rule, 
regulation, order, or written agreement, and insider abuse with respect 
to the regulated entity. The approval of an agreement or contract 
pursuant to section 309(d)(3)(B) of the Federal National Mortgage 
Association Charter Act (12 U.S.C. 1723a(d)(3)(B)) or section 303(h)(2) 
of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 
1452(h)(2)) shall not preclude the Director from making any subsequent 
determination under subsection (a).
    ``(c) Withholding of Compensation.--In carrying out subsection (a), 
the Director may require a regulated entity to withhold any payment, 
transfer, or disbursement of compensation to an executive officer, or 
to place such compensation in an escrow account, during the review of 
the reasonableness and comparability of compensation.''.
    (b) Conforming Amendments.--
            (1) Fannie mae.--Section 309(d) of the Federal National 
        Mortgage Association Charter Act (12 U.S.C. 1723a(d)) is 
        amended by adding at the end the following new paragraph:
    ``(4) Notwithstanding any other provision of this section, the 
corporation shall not transfer, disburse, or pay compensation to any 
executive officer, or enter into an agreement with such executive 
officer, without the approval of the Director, for matters being 
reviewed under section 1318 of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4518).''.
            (2) Freddie mac.--Section 303(h) of the Federal Home Loan 
        Mortgage Corporation Act (12 U.S.C. 1452(h)) is amended by 
        adding at the end the following new paragraph:
    ``(4) Notwithstanding any other provision of this section, the 
Corporation shall not transfer, disburse, or pay compensation to any 
executive officer, or enter into an agreement with such executive 
officer, without the approval of the Director, for matters being 
reviewed under section 1318 of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4518).''.
            (3) Federal home loan banks.--Section 7 of the Federal Home 
        Loan Bank Act (12 U.S.C. 1427) is amended by adding at the end 
        the following new subsection:
    ``(l) Withholding of Compensation.--Notwithstanding any other 
provision of this section, a Federal home loan bank shall not transfer, 
disburse, or pay compensation to any executive officer, or enter into 
an agreement with such executive officer, without the approval of the 
Director, for matters being reviewed under section 1318 of the Federal 
Housing Enterprises Financial Safety and Soundness Act of 1992 (12 
U.S.C. 4518).''.

SEC. 109. REVIEWS OF REGULATED ENTITIES.

    Section 1319 of the Housing and Community Development Act of 1992 
(12 U.S.C. 4519) is amended--
            (1) by striking the section designation and heading and 
        inserting the following:

``SEC. 1319. REVIEWS OF REGULATED ENTITIES.'';

        and
            (2) by striking ``effectively recognized'' and all that 
        follows through ``broker-dealers'' and inserting the following: 
        ``that the Director considers appropriate, including an entity 
        that is registered under section 15 of the Securities Exchange 
        Act of 1934 (15 U.S.C. 78a) as a nationally registered 
        statistical rating organization''.

SEC. 110. REGULATIONS AND ORDERS.

    Section 1319G of the Housing and Community Development Act of 1992 
(12 U.S.C. 4526) is amended--
            (1) by striking subsection (a) and inserting the following 
        new subsection:
    ``(a) Authority.--The Director shall issue any regulations, 
guidelines, and orders necessary to carry out the duties of the 
Director under this title and each of the authorizing statutes to 
ensure that the purposes of this title and such Acts are 
accomplished.'';
            (2) in subsection (b), by inserting ``, this title, or any 
        of the authorizing statutes'' after ``under this section''; and
            (3) by striking subsection (c).

SEC. 111. RISK-BASED CAPITAL REQUIREMENTS.

    (a) In General.--Section 1361 of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4611) is amended to read as follows:

``SEC. 1361. RISK-BASED CAPITAL LEVELS FOR REGULATED ENTITIES.

    ``(a) In General.--
            ``(1) Enterprises.--The Director shall, by regulation, 
        establish risk-based capital requirements for the enterprises 
        to ensure that the enterprises operate in a safe and sound 
        manner, maintaining sufficient capital and reserves to support 
        the risks that arise in the operations and management of the 
        enterprises.
            ``(2) Federal home loan banks.--The Director shall 
        establish risk-based capital standards under section 6 of the 
        Federal Home Loan Bank Act for the Federal home loan banks.
    ``(b) Confidentiality of Information.--Any person that receives any 
book, record, or information from the Director or a regulated entity to 
enable the risk-based capital requirements established under this 
section to be applied shall--
            ``(1) maintain the confidentiality of the book, record, or 
        information in a manner that is generally consistent with the 
        level of confidentiality established for the material by the 
        Director or the regulated entity; and
            ``(2) be exempt from section 552 of title 5, United States 
        Code, with respect to the book, record, or information.
    ``(c) No Limitation.--Nothing in this section shall limit the 
authority of the Director to require other reports or undertakings, or 
take other action, in furtherance of the responsibilities of the 
Director under this Act.''.
    (b) Federal Home Loan Banks Risk-Based Capital.--Section 6(a)(3) of 
the Federal Home Loan Bank Act (12 U.S.C. 1426(a)(3)) is amended--
            (1) by striking subparagraph (A) and inserting the 
        following new subparagraph:
                    ``(A) Risk-based capital standards.--The Director 
                shall, by regulation, establish risk-based capital 
                standards for the Federal home loan banks to ensure 
                that the Federal home loan banks operate in a safe and 
                sound manner, with sufficient permanent capital and 
                reserves to support the risks that arise in the 
                operations and management of the Federal home loans 
                banks.''; and
            (2) in subparagraph (B), by striking ``(A)(ii)'' and 
        inserting ``(A)''.

SEC. 112. MINIMUM AND CRITICAL CAPITAL LEVELS.

    (a) Minimum Capital Level.--Section 1362 of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4612) is amended--
            (1) in subsection (a), by striking ``in general'' and 
        inserting ``enterprises''; and
            (2) by striking subsection (b) and inserting the following 
        new subsections:
    ``(b) Federal Home Loan Banks.--For purposes of this subtitle, the 
minimum capital level for each Federal home loan bank shall be the 
minimum capital required to be maintained to comply with the leverage 
requirement for the bank established under section 6(a)(2) of the 
Federal Home Loan Bank Act (12 U.S.C. 1426(a)(2)).
    ``(c) Establishment of Revised Minimum Capital Levels.--
Notwithstanding subsections (a) and (b) and notwithstanding the capital 
classifications of the regulated entities, the Director may, by 
regulations issued under section 1319G(b), establish a minimum capital 
level for the enterprises, for the Federal home loan banks, or for both 
the enterprises and the banks, that is higher than the level specified 
in subsection (a) for the enterprises or the level specified in 
subsection (b) for the Federal home loan banks, to the extent needed to 
ensure that the regulated entities operate in a safe and sound manner.
    ``(d) Authority To Require Temporary Increase.--Notwithstanding 
subsections (a) and (b) and any minimum capital level established 
pursuant to subsection (c), the Director may, by order, increase the 
minimum capital level for a regulated entity on a temporary basis for 
such period as the Director may provide if the Director--
            ``(1) makes any determination specified in subparagraphs 
        (A) through (C) of section 1364(c)(1);
            ``(2) determines that the regulated entity has violated any 
        of the prudential standards established pursuant to section 
        1313A and, as a result of such violation, determines that an 
        unsafe and unsound condition exists; or
            ``(3) determines that an unsafe and unsound condition 
        exists, except that a temporary increase in minimum capital 
        imposed on a regulated entity pursuant to this paragraph shall 
        not remain in place for a period of more than 6 months unless 
        the Director makes a renewed determination of the existence of 
        an unsafe and unsound condition.
    ``(e) Authority To Establish Additional Capital and Reserve 
Requirements for Particular Programs.--The Director may, at any time by 
order or regulation, establish such capital or reserve requirements 
with respect to any program or activity of a regulated entity as the 
Director considers appropriate to ensure that the regulated entity 
operates in a safe and sound manner, with sufficient capital and 
reserves to support the risks that arise in the operations and 
management of the regulated entity.''.
    (b) Critical Capital Levels.--
            (1) In general.--Section 1363 of the Housing and Community 
        Development Act of 1992 (12 U.S.C. 4613) is amended--
                    (A) by striking ``For'' and inserting ``(a) 
                Enterprises.--For''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(b) Federal Home Loan Banks.--
            ``(1) In general.--For purposes of this subtitle, the 
        critical capital level for each Federal home loan bank shall be 
        such amount of capital as the Director shall, by regulation 
        require.
            ``(2) Consideration of other critical capital levels.--In 
        establishing the critical capital level under paragraph (1) for 
        the Federal home loan banks, the Director shall take due 
        consideration of the critical capital level established under 
        subsection (a) for the enterprises, with such modifications as 
        the Director determines to be appropriate to reflect the 
        difference in operations between the banks and the 
        enterprises.''.
            (2) Regulations.--Not later than the expiration of the 180-
        day period beginning on the effective date under section 185, 
        the Director of the Federal Housing Finance Agency shall issue 
        regulations pursuant to section 1363(b) of the Housing and 
        Community Development Act of 1992 (as added by paragraph (1) of 
        this subsection) establishing the critical capital level under 
        such section.

SEC. 113. REVIEW OF AND AUTHORITY OVER ENTERPRISE ASSETS AND 
              LIABILITIES.

    (a) In General.--Subtitle B of title XIII of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4611 et seq.) is amended--
            (1) by striking the subtitle designation and heading and 
        inserting the following:

 ``Subtitle B--Required Capital Levels for Regulated Entities, Special 
      Enforcement Powers, and Reviews of Assets and Liabilities'';

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

``SEC. 1369E. REVIEWS OF ENTERPRISE ASSETS AND LIABILITIES.

    ``(a) In General.--The Director shall, by regulation, establish 
standards by which the portfolio holdings, or rate of growth of the 
portfolio holdings, of the enterprises will be deemed to be consistent 
with the mission and the safe and sound operations of the enterprises. 
In developing such standards, the Director shall consider--
            ``(1) the size or growth of the mortgage market;
            ``(2) the need for the portfolio in maintaining liquidity 
        or stability of the secondary mortgage market (including the 
        market for the mortgage-backed securities the enterprises 
        issue);
            ``(3) the need for an inventory of mortgages in connection 
        with securitizations;
            ``(4) the need for the portfolio to directly support the 
        affordable housing mission of the enterprises;
            ``(5) the liquidity needs of the enterprises;
            ``(6) any potential risks posed by the nature of the 
        portfolio holdings; and
            ``(7) any additional factors the Director determines to be 
        appropriate, except that such factors shall be consistent with 
        the purposes of this Act and any of the authorizing statutes.
    ``(b) Temporary Adjustments.--The Director may, by order, make 
temporary adjustments to the established standards for an enterprise or 
both enterprises, such as during times of economic distress or market 
disruption.
    ``(c) Authority To Require Disposition or Acquisition.--The 
Director shall monitor the portfolio of each enterprise. Pursuant to 
subsection (a) and notwithstanding the capital classifications of the 
enterprises, the Director may, by order, require an enterprise, under 
such terms and conditions as the Director determines to be appropriate, 
to dispose of or acquire any asset, if the Director determines that 
such action is consistent with the purposes of this Act or any of the 
authorizing statutes.''.
    (b) Regulations.--Not later than the expiration of the 180-day 
period beginning on the effective date under section 185, the Director 
of the Federal Housing Finance Agency shall issue regulations pursuant 
to section 1369E(a) of the Housing and Community Development Act of 
1992 (as added by subsection (a) of this section) establishing the 
portfolio holdings standards under such section.

SEC. 114. CORPORATE GOVERNANCE OF ENTERPRISES.

    The Housing and Community Development Act of 1992 is amended by 
inserting before section 1323 (12 U.S.C. 4543) the following new 
section:

``SEC. 1322A. CORPORATE GOVERNANCE OF ENTERPRISES.

    ``(a) Board of Directors.--
            ``(1) Independence.--A majority of seated members of the 
        board of directors of each enterprise shall be independent 
        board members, as defined under rules set forth by the New York 
        Stock Exchange, as such rules may be amended from time to time.
            ``(2) Frequency of meetings.--To carry out its obligations 
        and duties under applicable laws, rules, regulations, and 
        guidelines, the board of directors of an enterprise shall meet 
        at least eight times a year and not less than once a calendar 
        quarter.
            ``(3) Non-management board member meetings.--The non-
        management directors of an enterprise shall meet at regularly 
        scheduled executive sessions without management participation.
            ``(4) Quorum; prohibition on proxies.--For the transaction 
        of business, a quorum of the board of directors of an 
        enterprise shall be at least a majority of the seated board of 
        directors and a board member may not vote by proxy.
            ``(5) Information.--The management of an enterprise shall 
        provide a board member of the enterprise with such adequate and 
        appropriate information that a reasonable board member would 
        find important to the fulfillment of his or her fiduciary 
        duties and obligations.
            ``(6) Annual review.--At least annually, the board of 
        directors of each enterprise shall review, with appropriate 
        professional assistance, the requirements of laws, rules, 
        regulations, and guidelines that are applicable to its 
        activities and duties.
    ``(b) Committees of Boards of Directors.--
            ``(1) Frequency of meetings.--Any committee of the board of 
        directors of an enterprise shall meet with sufficient frequency 
        to carry out its obligations and duties under applicable laws, 
        rules, regulations, and guidelines.
            ``(2) Required committees.--Each enterprise shall provide 
        for the establishment, however styled, of the following 
        committees of the board of directors:
                    ``(A) Audit committee.
                    ``(B) Compensation committee.
                    ``(C) Nominating/corporate governance committee.
        Such committees shall be in compliance with the charter, 
        independence, composition, expertise, duties, responsibilities, 
        and other requirements set forth under section 10A(m) of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78j-1(m)), with 
        respect to the audit committee, and under rules issued by the 
        New York Stock Exchange, as such rules may be amended from time 
        to time.
    ``(c) Compensation.--
            ``(1) In general.--The compensation of board members, 
        executive officers, and employees of an enterprise--
                    ``(A) shall not be in excess of that which is 
                reasonable and appropriate;
                    ``(B) shall be commensurate with the duties and 
                responsibilities of such persons;
                    ``(C) shall be consistent with the long-term goals 
                of the enterprise;
                    ``(D) shall not focus solely on earnings 
                performance, but shall take into account risk 
                management, operational stability and legal and 
                regulatory compliance as well; and
                    ``(E) shall be undertaken in a manner that complies 
                with applicable laws, rules, and regulations.
            ``(2) Reimbursement.--If an enterprise is required to 
        prepare an accounting restatement due to the material 
        noncompliance of the enterprise, as a result of misconduct, 
        with any financial reporting requirement under the securities 
        laws, the chief executive officer and chief financial officer 
        of the enterprise shall reimburse the enterprise as provided 
        under section 304 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 
        7243). This provision does not otherwise limit the authority of 
        the Agency to employ remedies available to it under its 
        enforcement authorities.
    ``(d) Code of Conduct and Ethics.--
            ``(1) In general.--An enterprise shall establish and 
        administer a written code of conduct and ethics that is 
        reasonably designed to assure the ability of board members, 
        executive officers, and employees of the enterprise to 
        discharge their duties and responsibilities, on behalf of the 
        enterprise, in an objective and impartial manner, and that 
        includes standards required under section 406 of the Sarbanes-
        Oxley Act of 2002 (15 U.S.C. 7264) and other applicable laws, 
        rules, and regulations.
            ``(2) Review.--Not less than once every three years, an 
        enterprise shall review the adequacy of its code of conduct and 
        ethics for consistency with practices appropriate to the 
        enterprise and make any appropriate revisions to such code.
    ``(e) Conduct and Responsibilities of Board of Directors.--The 
board of directors of an enterprise shall be responsible for directing 
the conduct and affairs of the enterprise in furtherance of the safe 
and sound operation of the enterprise and shall remain reasonably 
informed of the condition, activities, and operations of the 
enterprise. The responsibilities of the board of directors shall 
include having in place adequate policies and procedures to assure its 
oversight of, among other matters, the following:
            ``(1) Corporate strategy, major plans of action, risk 
        policy, programs for legal and regulatory compliance and 
        corporate performance, including prudent plans for growth and 
        allocation of adequate resources to manage operations risk.
            ``(2) Hiring and retention of qualified executive officers 
        and succession planning for such executive officers.
            ``(3) Compensation programs of the enterprise.
            ``(4) Integrity of accounting and financial reporting 
        systems of the enterprise, including independent audits and 
        systems of internal control.
            ``(5) Process and adequacy of reporting, disclosures, and 
        communications to shareholders, investors, and potential 
        investors.
            ``(6) Extensions of credit to board members and executive 
        officers.
            ``(7) Responsiveness of executive officers in providing 
        accurate and timely reports to Federal regulators and in 
        addressing the supervisory concerns of Federal regulators in a 
        timely and appropriate manner.
    ``(f) Prohibition of Extensions of Credit.--An enterprise may not 
directly or indirectly, including through any subsidiary, extend or 
maintain credit, arrange for the extension of credit, or renew an 
extension of credit, in the form of a personal loan to or for any board 
member or executive officer of the enterprise, as provided by section 
13(k) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(k)).
    ``(g) Certification of Disclosures.--The chief executive officer 
and the chief financial officer of an enterprise shall review each 
quarterly report and annual report issued by the enterprise and such 
reports shall include certifications by such officers as required by 
section 302 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7241).
    ``(h) Change of Audit Partner.--An enterprise may not accept audit 
services from an external auditing firm if the lead or coordinating 
audit partner who has primary responsibility for the external audit of 
the enterprise, or the external audit partner who has responsibility 
for reviewing the external audit has performed audit services for the 
enterprise in each of the five previous fiscal years.
    ``(i) Compliance Program.--
            ``(1) Requirement.--Each enterprise shall establish and 
        maintain a compliance program that is reasonably designed to 
        assure that the enterprise complies with applicable laws, 
        rules, regulations, and internal controls.
            ``(2) Compliance officer.--The compliance program of an 
        enterprise shall be headed by a compliance officer, however 
        styled, who reports directly to the chief executive officer of 
        the enterprise. The compliance officer shall report regularly 
        to the board of directors or an appropriate committee of the 
        board of directors on compliance with and the adequacy of 
        current compliance policies and procedures of the enterprise, 
        and shall recommend any adjustments to such policies and 
        procedures that the compliance officer considers necessary and 
        appropriate.
    ``(j) Risk Management Program.--
            ``(1) Requirement.--Each enterprise shall establish and 
        maintain a risk management program that is reasonably designed 
        to manage the risks of the operations of the enterprise.
            ``(2) Risk management officer.--The risk management program 
        of an enterprise shall be headed by a risk management officer, 
        however styled, who reports directly to the chief executive 
        officer of the enterprise. The risk management officer shall 
        report regularly to the board of directors or an appropriate 
        committee of the board of directors on compliance with and the 
        adequacy of current risk management policies and procedures of 
        the enterprise, and shall recommend any adjustments to such 
        policies and procedures that the risk management officer 
        considers necessary and appropriate.
    ``(k) Compliance With Other Laws.--
            ``(1) Deregistered or unregistered common stock.--If an 
        enterprise deregisters or has not registered its common stock 
        with the Securities and Exchange Commission under the 
        Securities Exchange Act of 1934, the enterprise shall comply or 
        continue to comply with sections 10A(m) and 13(k) of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78j-1(m), 78m(k)) 
        and sections 302, 304, and 406 of the Sarbanes-Oxley Act of 
        2002 (15 U.S.C. 7241, 7243, 7264), subject to such requirements 
        as provided by subsection (l) of this section.
            ``(2) Registered common stock.--An enterprise that has its 
        common stock registered with the Securities and Exchange 
        Commission shall maintain such registered status, unless it 
        provides 60 days prior written notice to the Director stating 
        its intent to deregister and its understanding that it will 
        remain subject to the requirements of the sections of the 
        Securities Exchange Act of 1934 and the Sarbanes-Oxley Act of 
        2002, subject to such requirements as provided by subsection 
        (l) of this section.
    ``(l) Other Matters.--The Director may from time to time establish 
standards, by regulation, order, or guideline, regarding such other 
corporate governance matters of the enterprises as the Director 
considers appropriate.
    ``(m) Modification of Standards.--In connection with standards of 
Federal or State law (including the Revised Model Corporation Act) or 
New York Stock Exchange rules that are made applicable to an enterprise 
by section 1710.10 of the Director's rules (12 C.F.R. 1710.10) and by 
subsections (a), (b), (g), (i), (j), and (k) of this section, the 
Director, in the Director's sole discretion, may modify the standards 
contained in this section or in part 1710 of the Director's rules (12 
U.S.C. Part 1710) in accordance with section 553 of title 5, United 
States Code, and upon written notice to the enterprise.''.

SEC. 115. REQUIRED REGISTRATION UNDER SECURITIES EXCHANGE ACT OF 1934.

    The Housing and Community Development Act of 1992 is amended by 
adding after section 1322A, as added by the preceding provisions of 
this Act, the following new section:

``SEC. 1322B. REQUIRED REGISTRATION UNDER SECURITIES EXCHANGE ACT OF 
              1934.

    ``(a) In General.--Each regulated entity shall register at least 
one class of the capital stock of such regulated entity, and maintain 
such registration with the Securities and Exchange Commission, under 
the Securities Exchange Act of 1934.
    ``(b) Enterprises.--Each enterprise shall comply with sections 14 
and 16 of the Securities Exchange Act of 1934.''.

SEC. 116. FINANCIAL INSTITUTIONS EXAMINATION COUNCIL.

    The Federal Financial Institutions Examination Council Act of 1978 
is amended--
            (1) in section 1003 (12 U.S.C. 3302)--
                    (A) in paragraph (1), by inserting ``Director of 
                the Federal Housing Finance Agency,'' after 
                ``Supervision,''; and
                    (B) in paragraph (3), by striking ``or a credit 
                union;'' and inserting ``a credit union, or a regulated 
                entity (as such term is defined in section 1303 of the 
                Housing and Community Development Act of 1992 (12 
                U.S.C. 4502)).'';
            (2) in section 1004 (12 U.S.C. 3303)--
                    (A) in paragraph (4), by inserting a semicolon at 
                the end;
                    (B) by redesignating paragraph (5) as paragraph 
                (6); and
                    (C) by inserting after paragraph (4) the following 
                new paragraph:
            ``(5) the Director of the Federal Housing Finance Agency; 
        and''; and
            (3) in section 1006(d) (12 U.S.C. 3305(d)), by striking 
        ``and employees of the Federal Housing Finance Board''.

SEC. 117. GUARANTEE FEE STUDY.

    (a) In General.--The Comptroller General of the United States, in 
consultation with the heads of the federal banking agencies and the 
Director of the Office of Federal Housing Enterprise Oversight of the 
Department of Housing and Urban Development, shall, not later than one 
year after the date of the enactment of this Act, submit to the 
Congress a study concerning the pricing, transparency and reporting of 
the Federal National Mortgage Association, the Federal Home Loan 
Mortgage Corporation, and the Federal home loan banks with regard to 
guarantee fees and concerning analogous practices, transparency and 
reporting requirements (including advances pricing practices by the 
Federal Home Loan Banks) of other participants in the business of 
mortgage purchases and securitization.
    (b) Factors.--The study required by this section shall examine 
various factors such as credit risk, counterparty risk considerations, 
economic value considerations, and volume considerations used by the 
regulated entities (as such term is defined in section 1303 of the 
Housing and Community Development Act of 1992) included in the study in 
setting the amount of fees they charge.
    (c) Contents of Report.--The report required under subsection (a) 
shall identify and analyze--
            (1) the factors used by each enterprise (as such term is 
        defined in section 1303 of the Housing and Community 
        Development Act of 1992) in determining the amount of the 
        guarantee fees it charges;
            (2) the total revenue the enterprises earn from guarantee 
        fees;
            (3) the total costs incurred by the enterprises for 
        providing guarantees;
            (4) the average guarantee fee charged by the enterprises;
            (5) an analysis of how and why the guarantee fees charged 
        differ from such fees charged during the previous year;
            (6) a breakdown of the revenue and costs associated with 
        providing guarantees, based on product type and risk 
        classifications; and
            (7) other relevant information on guarantee fees with other 
        participants in the mortgage and securitization business.
    (d) Protection of Information.--Nothing in this section may be 
construed to require or authorize the Government Accounting Office, in 
connection with the study mandated by this section, to disclose 
information of the enterprises or other organization that is 
confidential or proprietary.
    (e) Effective Date.--This section shall take effect on the date of 
the enactment of this Act.

SEC. 118. CONFORMING AMENDMENTS.

    (a) 1992 Act.--Part 1 of subtitle A of title XIII of the Housing 
and Community Development Act of 1992 (12 U.S.C. 4511 et seq.), as 
amended by the preceding provisions of this Act, is further amended--
            (1) by striking ``an enterprise'' each place such term 
        appears in such part (except in sections 1313(a)(2)(A), 
        1313A(b)(2)(B)(ii)(I), and 1316(b)(3)) and inserting ``a 
        regulated entity'';
            (2) by striking ``the enterprise'' each place such term 
        appears in such part (except in section 1316(b)(3)) and 
        inserting ``the regulated entity'';
            (3) by striking ``the enterprises'' each place such term 
        appears in such part (except in sections 1312(c)(2), 
        1312(e)(2), and 1319B(a)(4)(D)) and inserting ``the regulated 
        entities'';
            (4) by striking ``each enterprise'' each place such term 
        appears in such part and inserting ``each regulated entity'';
            (5) by striking ``Office'' each place such term appears in 
        such part (except in sections 1312(b)(5), 1315(b), and 1316(g), 
        and section 1317(c)) and inserting ``Agency'';
            (6) in section 1315 (12 U.S.C. 4515)--
                    (A) in subsection (a)--
                            (i) in the subsection heading, by striking 
                        ``Office Personnel'' and inserting ``In 
                        General''; and
                            (ii) by striking ``The'' and inserting 
                        ``Subject to titles III and IV of the Federal 
                        Housing Finance Reform Act of 2007, the'';
                    (B) by striking subsections (d) and (f); and
                    (C) by redesignating subsection (e) as subsection 
                (d);
            (7) in section 1319A (12 U.S.C. 4520)--
                    (A) by striking ``(a) In General.--Each 
                enterprise'' and inserting ``Each regulated entity''; 
                and
                    (B) by striking subsection (b);
            (8) in section 1319B (12 U.S.C. 4521), by striking 
        ``Committee on Banking, Finance and Urban Affairs'' each place 
        such term appears and inserting ``Committee on Financial 
        Services''; and
            (9) in section 1319F (12 U.S.C. 4525), striking all that 
        follows ``United States Code'' and inserting ``, the Agency 
        shall be considered an agency responsible for the regulation or 
        supervision of financial institutions.''.
    (b) Amendments to Fannie Mae Charter Act.--The Federal National 
Mortgage Association Charter Act (12 U.S.C. 1716 et seq.) is amended--
            (1) by striking ``Director of the Office of Federal Housing 
        Enterprise Oversight of the Department of Housing and Urban 
        Development'' each place such term appears, and inserting 
        ``Director of the Federal Housing Finance Agency'', in--
                    (A) section 303(c)(2) (12 U.S.C. 1718(c)(2));
                    (B) section 309(d)(3)(B) (12 U.S.C. 
                1723a(d)(3)(B)); and
                    (C) section 309(k)(1); and
            (2) in section 309--
                    (A) in subsections (d)(3)(A) and (n)(1), by 
                striking ``Banking, Finance and Urban Affairs'' each 
                place such term appears and inserting ``Financial 
                Services''; and
                    (B) in subsection (m)--
                            (i) in paragraph (1), by striking 
                        ``Secretary'' the second place such term 
                        appears and inserting ``Director'';
                            (ii) in paragraph (2), by striking 
                        ``Secretary'' the second place such term 
                        appears and inserting ``Director''; and
                            (iii) by striking ``Secretary'' each other 
                        place such term appears and inserting 
                        ``Director of the Federal Housing Finance 
                        Agency''; and
                    (C) in subsection (n), by striking ``Secretary'' 
                each place such term appears and inserting ``Director 
                of the Federal Housing Finance Agency''.
    (c) Amendments to Freddie Mac Act.--The Federal Home Loan Mortgage 
Corporation Act is amended--
            (1) by striking ``Director of the Office of Federal Housing 
        Enterprise Oversight of the Department of Housing and Urban 
        Development'' each place such term appears, and inserting 
        ``Director of the Federal Housing Finance Agency'', in--
                    (A) section 303(b)(2) (12 U.S.C. 1452(b)(2));
                    (B) section 303(h)(2) (12 U.S.C. 1452(h)(2)); and
                    (C) section 307(c)(1) (12 U.S.C. 1456(c)(1));
            (2) in sections 303(h)(1) and 307(f)(1) (12 U.S.C. 
        1452(h)(1), 1456(f)(1)), by striking ``Banking, Finance and 
        Urban Affairs'' each place such term appears and inserting 
        ``Financial Services'';
            (3) in section 306(i) (12 U.S.C. 1455(i))--
                    (A) by striking ``1316(c)'' and inserting 
                ``306(c)''; and
                    (B) by striking ``section 106'' and inserting 
                ``section 1316''; and
            (4) in section 307 (12 U.S.C. 1456))--
                    (A) in subsection (e)--
                            (i) in paragraph (1), by striking 
                        ``Secretary'' the second place such term 
                        appears and inserting ``Director'';
                            (ii) in paragraph (2), by striking 
                        ``Secretary'' the second place such term 
                        appears and inserting ``Director''; and
                            (iii) by striking ``Secretary'' each other 
                        place such term appears and inserting 
                        ``Director of the Federal Housing Finance 
                        Agency''; and
                    (B) in subsection (f), by striking ``Secretary'' 
                each place such term appears and inserting ``Director 
                of the Federal Housing Finance Agency''.

             Subtitle B--Improvement of Mission Supervision

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

    Part 2 of subtitle A of title XIII of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4541 et seq.) is amended--
            (1) by striking the designation and heading for the part 
        and inserting the following:

   ``PART 2--PRODUCT APPROVAL BY DIRECTOR, CORPORATE GOVERNANCE, AND 
                   ESTABLISHMENT OF HOUSING GOALS'';

        and
            (2) by striking sections 1321 and 1322.

SEC. 122. REVIEW OF ENTERPRISE PRODUCTS.

    (a) In General.--Part 2 of subtitle A of title XIII of the Housing 
and Community Development Act of 1992 is amended by inserting before 
section 1323 (12 U.S.C. 4543) the following new section:

``SEC. 1321. PRIOR APPROVAL AUTHORITY FOR PRODUCTS OF ENTERPRISES.

    ``(a) In General.--The Director shall require each enterprise to 
obtain the approval of the Director for any product of the enterprise 
before initially offering the product.
    ``(b) Standard for Approval.--In considering any request for 
approval of a product pursuant to subsection (a), the Director shall 
make a determination that--
            ``(1) in the case of a product of the Federal National 
        Mortgage Association, the Director determines that the product 
        is authorized under paragraph (2), (3), (4), or (5) of section 
        302(b) or section 304 of the Federal National Mortgage 
        Association Charter Act, (12 U.S.C. 1717(b), 1719);
            ``(2) in the case of a product of the Federal Home Loan 
        Mortgage Corporation, the Director determines that the product 
        is authorized under paragraph (1), (4), or (5) of section 
        305(a) of the Federal Home Loan Mortgage Corporation Act (12 
        U.S.C. 1454(a));
            ``(3) the product is in the public interest;
            ``(4) the product is consistent with the safety and 
        soundness of the enterprise or the mortgage finance system; and
            ``(5) the product does not materially impair the efficiency 
        of the mortgage finance system.
    ``(c) Procedure for Approval.--
            ``(1) Submission of request.--An enterprise shall submit to 
        the Director a written request for approval of a product that 
        describes the product in such form as prescribed by order or 
        regulation of the Director.
            ``(2) Request for public comment.--Immediately upon receipt 
        of a request for approval of a product, as required under 
        paragraph (1), the Director shall publish notice of such 
        request and of the period for public comment pursuant to 
        paragraph (3) regarding the product, and a description of the 
        product proposed by the request. The Director shall give 
        interested parties the opportunity to respond in writing to the 
        proposed product.
            ``(3) Public comment period.--During the 30-day period 
        beginning on the date of publication pursuant to paragraph (2) 
        of a request for approval of a product, the Director shall 
        receive public comments regarding the proposed product.
            ``(4) Offering of product.--
                    ``(A) In general.--Not later than 30 days after the 
                close of the public comment period described in 
                paragraph (3), the Director shall approve or deny the 
                product, specifying the grounds for such decision in 
                writing.
                    ``(B) Failure to act.--If the Director fails to act 
                within the 30-day period described in subparagraph (A), 
                the enterprise may offer the product.
    ``(d) Expedited Review.--
            ``(1) Determination and notice.--If an enterprise 
        determines that any new activity, service, undertaking, or 
        offering is not a product, as defined in subsection (f), the 
        enterprise shall provide written notice to the Director prior 
        to the commencement of such activity, service, undertaking, or 
        offering.
            ``(2) Director determination of applicable procedure.--
        Immediately upon receipt of any notice pursuant to paragraph 
        (1), the Director shall make a determination under paragraph 
        (3).
            ``(3) Determination and treatment as product.--If the 
        Director determines that any new activity, service, 
        undertaking, or offering consists of, relates to, or involves a 
        product--
                    ``(A) the Director shall notify the enterprise of 
                the determination;
                    ``(B) the new activity, service, undertaking, or 
                offering described in the notice under paragraph (1) 
                shall be considered a product for purposes of this 
                section; and
                    ``(C) the enterprise shall withdraw its request or 
                submit a written request for approval of the product 
                pursuant to subsection (c).
    ``(e) Conditional Approval.--The Director may conditionally approve 
the offering of any product by an enterprise, and may establish terms, 
conditions, or limitations with respect to such product with which the 
enterprise must comply in order to offer such product.
    ``(f) Definition of Product.--For purposes of this section, the 
term `product' does not include--
            ``(1) the automated loan underwriting system of an 
        enterprise in existence as of the date of the enactment of the 
        Federal Housing Finance Reform Act of 2007, including any 
        upgrade to the technology, operating system, or software to 
        operate the underwriting system; or
            ``(2) any modification to the mortgage terms and conditions 
        or mortgage underwriting criteria relating to the mortgages 
        that are purchased or guaranteed by an enterprise: Provided, 
        That such modifications do not alter the underlying transaction 
        so as to include services or financing, other than residential 
        mortgage financing, or create significant new exposure to risk 
        for the enterprise or the holder of the mortgage.
    ``(g) No Limitation.--Nothing in this section shall be deemed to 
restrict--
            ``(1) the safety and soundness authority of the Director 
        over all new and existing products or activities; or
            ``(2) the authority of the Director to review all new and 
        existing products or activities to determine that such products 
        or activities are consistent with the statutory mission of the 
        enterprise.''.
    (b) Conforming Amendments.--
            (1) Fannie mae.--Section 302(b)(6) of the Federal National 
        Mortgage Association Charter Act (12 U.S.C. 1717(b)(6)) is 
        amended--
                    (A) by striking ``implement any new program'' and 
                inserting ``initially offer any product'';
                    (B) by striking ``section 1303'' and inserting 
                ``section 1321(f)''; and
                    (C) by striking ``before obtaining the approval of 
                the Secretary under section 1322'' and inserting 
                ``except in accordance with section 1321''.
            (2) Freddie mac.--Section 305(c) of the Federal Home Loan 
        Mortgage Corporation Act (12 U.S.C. 1454(c)) is amended--
                    (A) by striking ``implement any new program'' and 
                inserting ``initially offer any product'';
                    (B) by striking ``section 1303'' and inserting 
                ``section 1321(f)''; and
                    (C) by striking ``before obtaining the approval of 
                the Secretary under section 1322'' and inserting 
                ``except in accordance with section 1321''.
            (3) 1992 act.--Section 1303 of the Housing and Community 
        Development Act of 1992 (12 U.S.C. 4502), as amended by section 
        2 of this Act, is further amended--
                    (A) by striking paragraph (17) (relating to the 
                definition of ``new program'') ; and
                    (B) by redesignating paragraphs (18) through (23) 
                as paragraphs (17) through (22), respectively.

SEC. 123. CONFORMING LOAN LIMITS.

    (a) Fannie Mae.--
            (1) General limit.--Section 302(b)(2) of the Federal 
        National Mortgage Association Charter Act (12 U.S.C. 
        1717(b)(2)) is amended by striking the 7th and 8th sentences 
        and inserting the following new sentences: ``For 2007, such 
        limitations shall not exceed $417,000 for a mortgage secured by 
        a single-family residence, $533,850 for a mortgage secured by a 
        2-family residence, $645,300 for a mortgage secured by a 3-
        family residence, and $801,950 for a mortgage secured by a 4-
        family residence, except that such maximum limitations shall be 
        adjusted effective January 1 of each year beginning with 2008, 
        subject to the limitations in this paragraph. Each adjustment 
        shall be made by adding to or subtracting from each such amount 
        (as it may have been previously adjusted) a percentage thereof 
        equal to the percentage increase or decrease, during the most 
        recent 12-month or four-quarter period ending before the time 
        of determining such annual adjustment, in the housing price 
        index maintained by the Director of the Federal Housing Finance 
        Agency (pursuant to section 1322 of the Housing and Community 
        Development Act of 1992 (12 U.S.C. 4541)).''.
            (2) High-cost area limit.--Section 302(b)(2) of the Federal 
        National Mortgage Association Charter Act is (12 U.S.C. 
        1717(b)(2)) is amended by adding after the period at the end 
        the following: ``Such foregoing limitations shall also be 
        increased with respect to properties of a particular size 
        located in any area for which the median price for such size 
        residence exceeds the foregoing limitation for such size 
        residence, to the lesser of 150 percent of such foregoing 
        limitation for such size residence or the amount that is equal 
        to the median price in such area for such size residence, 
        except that, subject to the order, if any, issued by the 
        Director of the Federal Housing Finance Agency pursuant to 
        section 123(d)(3) of the Federal Housing Finance Reform Act of 
        2007, such increase shall apply only with respect to mortgages 
        on which are based securities issued and sold by the 
        corporation.''.
    (b) Freddie Mac.--
            (1) General limit.--Section 305(a)(2) of the Federal Home 
        Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) is amended 
        by striking the 6th and 7th sentences and inserting the 
        following new sentences: ``For 2007, such limitations shall not 
        exceed $417,000 for a mortgage secured by a single-family 
        residence, $533,850 for a mortgage secured by a 2-family 
        residence, $645,300 for a mortgage secured by a 3-family 
        residence, and $801,950 for a mortgage secured by a 4-family 
        residence, except that such maximum limitations shall be 
        adjusted effective January 1 of each year beginning with 2008, 
        subject to the limitations in this paragraph. Each adjustment 
        shall be made by adding to or subtracting from each such amount 
        (as it may have been previously adjusted) a percentage thereof 
        equal to the percentage increase or decrease, during the most 
        recent 12-month or four-quarter period ending before the time 
        of determining such annual adjustment, in the housing price 
        index maintained by the Director of the Federal Housing Finance 
        Agency (pursuant to section 1322 of the Housing and Community 
        Development Act of 1992 (12 U.S.C. 4541)).''.
            (2) High-cost area limit.--Section 305(a)(2) of the Federal 
        Home Loan Mortgage Corporation Act is amended by adding after 
        the period at the end the following: ``Such foregoing 
        limitations shall also be increased with respect to properties 
        of a particular size located in any area for which the median 
        price for such size residence exceeds the foregoing limitation 
        for such size residence, to the lesser of 150 percent of such 
        foregoing limitation for such size residence or the amount that 
        is equal to the median price in such area for such size 
        residence, except that, subject to the order, if any, issued by 
        the Director of the Federal Housing Finance Agency pursuant to 
        section 123(d)(3) of the Federal Housing Finance Reform Act of 
        2007, such increase shall apply only with respect to mortgages 
        on which are based securities issued and sold by the 
        Corporation.''.
    (c) Housing Price Index.--Subpart A of part 2 of subtitle A of 
title XIII of the Housing and Community Development Act of 1992 (as 
amended by the preceding provisions of this Act) is amended by 
inserting after section 1321 (as added by section 122 of this Act) the 
following new section:

``SEC. 1322. HOUSING PRICE INDEX.

    ``(a) In General.--The Director shall establish and maintain a 
method of assessing the national average 1-family house price for use 
for adjusting the conforming loan limitations of the enterprises. In 
establishing such method, the Director shall take into consideration 
the monthly survey of all major lenders conducted by the Federal 
Housing Finance Agency to determine the national average 1-family house 
price, the House Price Index maintained by the Office of Federal 
Housing Enterprise Oversight of the Department of Housing and Urban 
Development before the effective date under section 185 of the Federal 
Housing Finance Reform Act of 2007, any appropriate house price indexes 
of the Bureau of the Census of the Department of Commerce, and any 
other indexes or measures that the Director considers appropriate.
    ``(b) GAO Audit.--
            ``(1) In general.--At such times as are required under 
        paragraph (2), the Comptroller General of the United States 
        shall conduct an audit of the methodology established by the 
        Director under subsection (a) to determine whether the 
        methodology established is an accurate and appropriate means of 
        measuring changes to the national average 1-family house price.
            ``(2) Timing.--An audit referred to in paragraph (1) shall 
        be conducted and completed not later than the expiration of the 
        180-day period that begins upon each of the following dates:
                    ``(A) Establishment.--The date upon which such 
                methodology is initially established under subsection 
                (a) in final form by the Director.
                    ``(B) Modification or amendment.--Each date upon 
                which any modification or amendment to such methodology 
                is adopted in final form by the Director.
            ``(3) Report.--Within 30 days of the completion of any 
        audit conducted under this subsection, the Comptroller General 
        shall submit a report detailing the results and conclusions of 
        the audit to the Director, the Committee on Financial Services 
        of the House of Representatives, and the Committee on Banking, 
        Housing, and Urban Affairs of the Senate.''.
    (d) Conditions on Conforming Loan Limit for High-Cost Areas.--
            (1) Study.--The Director of the Federal Housing Finance 
        Agency shall conduct a study under this subsection during the 
        six-month period beginning on the effective date under section 
        185 of this Act.
            (2) Issues.--The study under this subsection shall 
        determine--
                    (A) the effect that restricting the conforming loan 
                limits for high-cost areas only to mortgages on which 
                are based securities issued and sold by the Federal 
                National Mortgage Association and the Federal Home Loan 
                Mortgage Corporation (as provided in the last sentence 
                of section 302(b)(2) of the Federal National Mortgage 
                Association Charter Act and the last sentence of 
                section 305(a)(2) of the Federal Home Loan Mortgage 
                Corporation Act, pursuant to the amendments made by 
                subsections (a)(2) and (b)(2) of this section) would 
                have on the cost to borrowers for mortgages on housing 
                in such high-cost areas;
                    (B) the effects that such restrictions would have 
                on the availability of mortgages for housing in such 
                high-cost areas; and
                    (C) the extent to which the Federal National 
                Mortgage Association and the Federal Home Loan Mortgage 
                Corporation will be able to issue and sell securities 
                based on mortgages for housing located in such high-
                cost areas.
            (3) Determination.--
                    (A) In general.--Not later than the expiration of 
                the six-month period specified in paragraph (1), the 
                Director of the Federal Housing Finance Agency shall 
                make a determination, based on the results of the study 
                under this subsection, of whether the restriction of 
                conforming loan limits for high-cost areas only to 
                mortgages on which are based securities issued and sold 
                by the Federal National Mortgage Association and the 
                Federal Home Loan Mortgage Corporation (as provided in 
                the amendments made by subsections (a)(2) and (b)(2) of 
                this section) will result in an increase in the cost to 
                borrowers for mortgages on housing in such high-cost 
                areas.
                    (B) Order.--If such determination is that costs to 
                borrowers on housing in such high-cost areas will be 
                increased by such restrictions, the Director may issue 
                an order terminating such restrictions, in whole or in 
                part.
            (4) Publication.--Not later than the expiration of the six-
        month period specified in paragraph (1), the Director of the 
        Federal Housing Finance Agency shall cause to be published in 
        the Federal Register--
                    (A) a report that--
                            (i) describes the study under this 
                        subsection; and
                            (ii) sets forth the conclusions of the 
                        study regarding the issues to be determined 
                        under paragraph (2); and
                    (B) notice of the determination of the Director 
                under paragraph (3); and
                    (C) the order of the Director under paragraph (3).
            (5) Definition.--For purposes of this subsection, the term 
        ``conforming loan limits for high-cost areas'' means the dollar 
        amount limitations applicable under the section 302(b)(2) of 
        the Federal National Mortgage Association Charter Act and 
        section 305(a)(2) of the Federal Home Loan Mortgage Corporation 
        Act (as amended by subsections (a) and (b) of this section) for 
        areas described in the last sentence of such sections (as so 
        amended).

SEC. 124. ANNUAL HOUSING REPORT REGARDING REGULATED ENTITIES.

    (a) In General.--The Housing and Community Development Act of 1992 
is amended by striking section 1324 (12 U.S.C. 4544) and inserting the 
following new section:

``SEC. 1324. ANNUAL HOUSING REPORT REGARDING REGULATED ENTITIES.

    ``(a) In General.--After reviewing and analyzing the reports 
submitted under section 309(n) of the Federal National Mortgage 
Association Charter Act, section 307(f) of the Federal Home Loan 
Mortgage Corporation Act, and section 10(j)(11) of the Federal Home 
Loan Bank Act (12 U.S.C. 1430(j)(11)), the Director shall submit a 
report, not later than October 30 of each year, to the Committee on 
Financial Services of the House of Representatives and the Committee on 
Banking, Housing, and Urban Affairs of the Senate, on the activities of 
each regulated entity.
    ``(b) Contents.--The report shall--
            ``(1) discuss the extent to which--
                    ``(A) each enterprise is achieving the annual 
                housing goals established under subpart B of this part;
                    ``(B) each enterprise is complying with section 
                1337;
                    ``(C) each Federal home loan bank is complying with 
                section 10(j) of the Federal Home Loan Bank Act; and
                    ``(D) each regulated entity is achieving the 
                purposes of the regulated entity established by law;
            ``(2) aggregate and analyze relevant data on income to 
        assess the compliance by each enterprise with the housing goals 
        established under subpart B;
            ``(3) aggregate and analyze data on income, race, and 
        gender by census tract and other relevant classifications, and 
        compare such data with larger demographic, housing, and 
        economic trends;
            ``(4) examine actions that--
                    ``(A) each enterprise has undertaken or could 
                undertake to promote and expand the annual goals 
                established under subpart B and the purposes of the 
                enterprise established by law; and
                    ``(B) each Federal home loan bank has taken or 
                could undertake to promote and expand the community 
                investment program and affordable housing program of 
                the bank established under section subsections (i) and 
                (j) of section 10 of the Federal Home Loan Bank Act;
            ``(5) examine the primary and secondary multifamily housing 
        mortgage markets and describe--
                    ``(A) the availability and liquidity of mortgage 
                credit;
                    ``(B) the status of efforts to provide standard 
                credit terms and underwriting guidelines for 
                multifamily housing and to securitize such mortgage 
                products; and
                    ``(C) any factors inhibiting such standardization 
                and securitization;
            ``(6) examine actions each regulated entity has undertaken 
        and could undertake to promote and expand opportunities for 
        first-time homebuyers, including the use of alternative credit 
        scoring;
            ``(7) describe any actions taken under section 1325(5) with 
        respect to originators found to violate fair lending 
        procedures;
            ``(8) discuss and analyze existing conditions and trends, 
        including conditions and trends relating to pricing, in the 
        housing markets and mortgage markets; and
            ``(9) identify the extent to which each enterprise is 
        involved in mortgage purchases and secondary market activities 
        involving subprime loans (as identified in accordance with the 
        regulations issued pursuant to section 124(b) of the Federal 
        Housing Finance Reform Act of 2007) and compare the 
        characteristics of subprime loans purchased and securitized by 
        the enterprises to other loans purchased and securitized by the 
        enterprises.
    ``(c) Data Collection and Reporting.--
            ``(1) In general.--To assist the Director in analyzing the 
        matters described in subsection (b) and establishing the 
        methodology described in section 1322, the Director shall 
        conduct, on a monthly basis, a survey of mortgage markets in 
        accordance with this subsection.
            ``(2) Data points.--Each monthly survey conducted by the 
        Director under paragraph (1) shall collect data on--
                    ``(A) the characteristics of individual mortgages 
                that are eligible for purchase by the enterprises and 
                the characteristics of individual mortgages that are 
                not eligible for purchase by the enterprises including, 
                in both cases, information concerning--
                            ``(i) the price of the house that secures 
                        the mortgage;
                            ``(ii) the loan-to-value ratio of the 
                        mortgage, which shall reflect any secondary 
                        liens on the relevant property;
                            ``(iii) the terms of the mortgage;
                            ``(iv) the creditworthiness of the borrower 
                        or borrowers; and
                            ``(v) whether the mortgage, in the case of 
                        a conforming mortgage, was purchased by an 
                        enterprise; and
                    ``(B) such other matters as the Director determines 
                to be appropriate.
            ``(3) Public availability.--The Director shall make any 
        data collected by the Director in connection with the conduct 
        of a monthly survey available to the public in a timely manner, 
        provided that the Director may modify the data released to the 
        public to ensure that the data is not released in an 
        identifiable form.
            ``(4) Definition.--For purposes of this subsection, the 
        term `identifiable form' means any representation of 
        information that permits the identity of a borrower to which 
        the information relates to be reasonably inferred by either 
        direct or indirect means.''.
    (b) Standards for Subprime Loans.--The Director shall, not later 
than one year after the effective date under section 185, by 
regulations issued under section 1316G of the Housing and Community 
Development Act of 1992, establish standards by which mortgages 
purchased and mortgages purchased and securitized shall be 
characterized as subprime for the purpose of, and only for the purpose 
of, complying with the reporting requirement under section 1324(b)(9) 
of such Act.

SEC. 125. REVISION OF HOUSING GOALS.

    (a) Housing Goals.--The Housing and Community Development Act of 
1992 is amended by striking sections 1331 through 1334 (12 U.S.C. 4561-
4) and inserting the following new sections:

``SEC. 1331. ESTABLISHMENT OF HOUSING GOALS.

    ``(a) In General.--The Director shall establish, effective for the 
first year that begins after the effective date under section 185 of 
the Federal Housing Finance Reform Act of 2007 and each year 
thereafter, annual housing goals, with respect to the mortgage 
purchases by the enterprises, as follows:
            ``(1) Single family housing goals.--Three single-family 
        housing goals under section 1332.
            ``(2) Multifamily special affordable housing goals.--A 
        multifamily special affordable housing goal under section 1333.
    ``(b) Eliminating Interest Rate Disparities.--
            ``(1) In general.--In establishing and implementing the 
        housing goals under this subpart, the Director shall require 
        the enterprises to disclose appropriate information to allow 
        the Director to assess if there are any disparities in interest 
        rates charged on mortgages to borrowers who are minorities as 
        compared with borrowers of similar creditworthiness who are not 
        minorities, as evidenced in reports pursuant to the Home 
        Mortgage Disclosure Act of 1975.
            ``(2) Report and remedy.--Upon a finding by the Director, 
        pursuant to the information provided by an enterprise in 
        paragraph (1), that a pattern of disparities in interest rates 
        exists, the Director shall--
                    ``(A) submit to the Committee on Financial Services 
                of the House of Representatives and the Committee on 
                Banking, Housing, and Urban Affairs of the Senate a 
                report detailing the disparities; and
                    ``(B) require the enterprise to take such action as 
                the Director deems appropriate pursuant to this Act to 
                remedy the interest rate disparities identified.
            ``(3) Protection of identity.--In carrying out this 
        subsection, the Director shall ensure that no information is 
        made public that would reasonably allow identification, 
        directly or indirectly, of an individual borrower.
    ``(c) Timing.--The Director shall establish an annual deadline by 
which the Director shall establish the annual housing goals under this 
subpart for each year, taking into consideration the need for the 
enterprises to reasonably and sufficiently plan their operations and 
activities in advance, including operations and activities necessary to 
meet such annual goals.

``SEC. 1332. SINGLE-FAMILY HOUSING GOALS.

    ``(a) In General.--The Director shall establish an annual goal for 
the purchase by each enterprise of conventional, conforming, single-
family, owner-occupied, purchase money mortgages financing housing for 
each of the following categories of families:
            ``(1) Low-income families.
            ``(2) Families that reside in low-income areas.
            ``(3) Very low-income families.
    ``(b) Refinance Subgoal.--
            ``(1) In general.--The Director shall establish a separate 
        subgoal within the goal under subsection (a)(1) for the 
        purchase by each enterprise of mortgages for low-income 
        families on single family housing given to pay off or prepay an 
        existing loan secured by the same property. The Director shall, 
        for each year, determine whether each enterprise has complied 
        with the subgoal under this subsection in the same manner 
        provided under this section for determining compliance with the 
        housing goal.
            ``(2) Enforcement.--For purposes of section 1336, the 
        subgoal established under paragraph (1) of this subsection 
        shall be considered to be a housing goal established under this 
        section. Such subgoal shall not be enforceable under any other 
        provision of this title (including subpart C of this part) 
        other than section 1336 or under any provision of the Federal 
        National Mortgage Association Charter Act or the Federal Home 
        Loan Mortgage Corporation Act.
    ``(c) Determination of Compliance.--The Director shall determine, 
for each year that the housing goal under this section is in effect 
pursuant to section 1331(a), whether each enterprise has complied with 
the single-family housing goal established under this section for such 
year. An enterprise shall be considered to be in compliance with such a 
goal for a year only if, for each of the types of families described in 
subsection (a), the percentage of the number of conventional, 
conforming, single-family, owner-occupied, purchase money mortgages 
purchased by each enterprise in such year that serve such families, 
meets or exceeds the target for the year for such type of family that 
is established under subsection (d).
    ``(d) Annual Targets.--
            ``(1) In general.--Except as provided in paragraph (2), for 
        each of the types of families described in subsection (a), the 
        target under this subsection for a year shall be the average 
        percentage, for the three years that most recently precede such 
        year and for which information under the Home Mortgage 
        Disclosure Act of 1975 is publicly available, of the number of 
        conventional, conforming, single-family, owner-occupied, 
        purchase money mortgages originated in such year that serves 
        such type of family, as determined by the Director using the 
        information obtained and determined pursuant to paragraphs (3) 
        and (4).
            ``(2) Authority to increase targets.--
                    ``(A) In general.--The Director may, for any year, 
                establish by regulation, for any or all of the types of 
                families described in subsection (a), percentage 
                targets that are higher than the percentages for such 
                year determined pursuant to paragraph (1), to reflect 
                expected changes in market performance related to such 
                information under the Home Mortgage Disclosure Act of 
                1975.
                    ``(B) Factors.--In establishing any targets 
                pursuant to subparagraph (A), the Director shall 
                consider the following factors:
                            ``(i) National housing needs.
                            ``(ii) Economic, housing, and demographic 
                        conditions.
                            ``(iii) The performance and effort of the 
                        enterprises toward achieving the housing goals 
                        under this section in previous years.
                            ``(iv) The size of the conventional 
                        mortgage market serving each of the types of 
                        families described in subsection (a) relative 
                        to the size of the overall conventional 
                        mortgage market.
                            ``(v) The need to maintain the sound 
                        financial condition of the enterprises.
            ``(3) HMDA information.--The Director shall annually obtain 
        information submitted in compliance with the Home Mortgage 
        Disclosure Act of 1975 regarding conventional, conforming, 
        single-family, owner-occupied, purchase money mortgages 
        originated and purchased for the previous year.
            ``(4) Conforming mortgages.--In determining whether a 
        mortgage is a conforming mortgage for purposes of this 
        paragraph, the Director shall consider the original principal 
        balance of the mortgage loan to be the principal balance as 
        reported in the information referred to in paragraph (3), as 
        rounded to the nearest thousand dollars.
    ``(e) Notice of Determination and Enterprise Comment.--
            ``(1) Notice.--Within 30 days of making a determination 
        under subsection (c) regarding a compliance of an enterprise 
        for a year with the housing goal established under this section 
        and before any public disclosure thereof, the Director shall 
        provide notice of the determination to the enterprise, which 
        shall include an analysis and comparison, by the Director, of 
        the performance of the enterprise for the year and the targets 
        for the year under subsection (d).
            ``(2) Comment period.--The Director shall provide each 
        enterprise an opportunity to comment on the determination 
        during the 30-day period beginning upon receipt by the 
        enterprise of the notice.
    ``(f) Use of Borrower Income.--In monitoring the performance of 
each enterprise pursuant to the housing goals under this section and 
evaluating such performance (for purposes of section 1336), the 
Director shall consider a mortgagor's income to be such income at the 
time of origination of the mortgage.

``SEC. 1333. MULTIFAMILY SPECIAL AFFORDABLE HOUSING GOAL.

    ``(a) Establishment.--
            ``(1) In general.--The Director shall establish, by 
        regulation, an annual goal for the purchase by each enterprise 
        of each of the following types of mortgages on multifamily 
        housing:
                    ``(A) Mortgages that finance dwelling units for 
                low-income families.
                    ``(B) Mortgages that finance dwelling units for 
                very low-income families.
                    ``(C) Mortgages that finance dwelling units 
                assisted by the low-income housing tax credit under 
                section 42 of the Internal Revenue Code of 1986.
            ``(2) Additional requirements for smaller projects.--The 
        Director shall establish, within the goal under this section, 
        additional requirements for the purchase by each enterprise of 
        mortgages described in paragraph (1) for multifamily housing 
        projects of a smaller or limited size, which may be based on 
        the number of dwelling units in the project or the amount of 
        the mortgage, or both, and shall include multifamily housing 
        projects of such smaller sizes as are typical among such 
        projects that serve rural areas.
            ``(3) Factors.--In establishing the goal under this section 
        relating to mortgages on multifamily housing for an enterprise 
        for a year, the Director shall consider--
                    ``(A) national multifamily mortgage credit needs;
                    ``(B) the performance and effort of the enterprise 
                in making mortgage credit available for multifamily 
                housing in previous years;
                    ``(C) the size of the multifamily mortgage market;
                    ``(D) the ability of the enterprise to lead the 
                industry in making mortgage credit available, 
                especially for underserved markets, such as for small 
                multifamily projects of 5 to 50 units, multifamily 
                properties in need of rehabilitation, and multifamily 
                properties located in rural areas; and
                    ``(E) the need to maintain the sound financial 
                condition of the enterprise.
    ``(b) Units Financed by Housing Finance Agency Bonds.--The Director 
shall give credit toward the achievement of the multifamily special 
affordable housing goal under this section (for purposes of section 
1336) to dwelling units in multifamily housing that otherwise qualifies 
under such goal and that is financed by tax-exempt or taxable bonds 
issued by a State or local housing finance agency, but only if--
            ``(1) such bonds are secured by a guarantee of the 
        enterprise; or
            ``(2) are not investment grade and are purchased by the 
        enterprise.
    ``(c) Use of Tenant Income or Rent.--The Director shall monitor the 
performance of each enterprise in meeting the goals established under 
this section and shall evaluate such performance (for purposes of 
section 1336) based on--
            ``(1) the income of the prospective or actual tenants of 
        the property, where such data are available; or
            ``(2) where the data referred to in paragraph (1) are not 
        available, rent levels affordable to low-income and very low-
        income families.
A rent level shall be considered to be affordable for purposes of this 
subsection for an income category referred to in this subsection if it 
does not exceed 30 percent of the maximum income level of such income 
category, with appropriate adjustments for unit size as measured by the 
number of bedrooms.
    ``(d) Determination of Compliance.--The Director shall, for each 
year that the housing goal under this section is in effect pursuant to 
section 1331(a), determine whether each enterprise has complied with 
such goal and the additional requirements under subsection (a)(2).

``SEC. 1334. DISCRETIONARY ADJUSTMENT OF HOUSING GOALS.

    ``(a) Authority.--An enterprise may petition the Director in 
writing at any time during a year to reduce the level of any goal for 
such year established pursuant to this subpart.
    ``(b) Standard for Reduction.--The Director may reduce the level 
for a goal pursuant to such a petition only if--
            ``(1) market and economic conditions or the financial 
        condition of the enterprise require such action; or
            ``(2) efforts to meet the goal would result in the 
        constraint of liquidity, over-investment in certain market 
        segments, or other consequences contrary to the intent of this 
        subpart, or section 301(3) of the Federal National Mortgage 
        Association Charter Act (12 U.S.C. 1716(3)) or section 301(3) 
        of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 
        1451 note), as applicable.
    ``(c) Determination.--The Director shall make a determination 
regarding any proposed reduction within 30 days of receipt of the 
petition regarding the reduction. The Director may extend such period 
for a single additional 15-day period, but only if the Director 
requests additional information from the enterprise. A denial by the 
Director to reduce the level of any goal under this section may be 
appealed to the United States District Court for the District of 
Columbia or the United States district court in the jurisdiction in 
which the headquarters of an enterprise is located.''.
    (b) Conforming Amendments.--The Housing and Community Development 
Act of 1992 is amended--
            (1) in section 1335(a) (12 U.S.C. 4565(a)), in the matter 
        preceding paragraph (1), by striking ``low- and moderate-income 
        housing goal'' and all that follows through ``section 1334'' 
        and inserting ``housing goals established under this subpart''; 
        and
            (2) in section 1336(a)(1) (12 U.S.C. 4566(a)(1)), by 
        striking ``sections 1332, 1333, and 1334,'' and inserting 
        ``this subpart''.
    (c) Definitions.--Section 1303 of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4502), as amended by the preceding 
provisions of this Act, is further amended--
            (1) in paragraph (22) (relating to the definition of ``very 
        low-income''), by striking ``60 percent'' each place such term 
        appears and inserting ``50 percent'';
            (2) by redesignating paragraphs (19) through (22) as 
        paragraphs (23) through (26), respectively;
            (3) by inserting after paragraph (18) the following new 
        paragraph:
            ``(22) Rural area.--The term `rural area' has the meaning 
        given such term in section 520 of the Housing Act of 1949 (42 
        U.S.C. 1490), except that such term includes micropolitan areas 
        and tribal trust lands.''.
            (4) by redesignating paragraphs (13) through (18) as 
        paragraphs (16) through (21), respectively;
            (5) by inserting after paragraph (12) the following new 
        paragraph:
            ``(15) Low-income area.--The term `low income area' means a 
        census tract or block numbering area in which the median income 
        does not exceed 80 percent of the median income for the area in 
        which such census tract or block numbering area is located, 
        and, for the purposes of section 1332(a)(2), shall include 
        families having incomes not greater than 100 percent of the 
        area median income who reside in minority census tracts.'';
            (6) by redesignating paragraphs (11) and (12) as paragraphs 
        (13) and (14), respectively;
            (7) by inserting after paragraph (10) the following new 
        paragraph:
            ``(12) Extremely low-income.--The term `extremely low-
        income' means--
                    ``(A) in the case of owner-occupied units, income 
                not in excess of 30 percent of the area median income; 
                and
                    ``(B) in the case of rental units, income not in 
                excess of 30 percent of the area median income, with 
                adjustments for smaller and larger families, as 
                determined by the Secretary.'';
            (8) by redesignating paragraphs (7) through (10) as 
        paragraphs (8) through (11), respectively; and
            (9) by inserting after paragraph (6) the following new 
        paragraph:
            ``(7) Conforming mortgage.--The term `conforming mortgage' 
        means, with respect to an enterprise, a conventional mortgage 
        having an original principal obligation that does not exceed 
        the dollar limitation, in effect at the time of such 
        origination, under, as applicable--
                    ``(A) section 302(b)(2) of the Federal National 
                Mortgage Association Charter Act; or
                    ``(B) section 305(a)(2) of the Federal Home Loan 
                Mortgage Corporation Act.''.

SEC. 126. DUTY TO SERVE UNDERSERVED MARKETS.

    (a) Establishment and Evaluation of Performance.--Section 1335 of 
the Housing and Community Development Act of 1992 (12 U.S.C. 4565) is 
amended--
            (1) in the section heading, by inserting ``duty to serve 
        underserved markets and'' before ``other'';
            (2) by striking subsection (b);
            (3) in subsection (a)--
                    (A) in the matter preceding paragraph (1), by 
                inserting ``and to carry out the duty under subsection 
                (a) of this section'' before ``, each enterprise 
                shall'';
                    (B) in paragraph (3), by inserting ``and'' after 
                the semicolon at the end;
                    (C) in paragraph (4), by striking ``; and'' and 
                inserting a period;
                    (D) by striking paragraph (5); and
                    (E) by redesignating such subsection as subsection 
                (b);
            (4) by inserting before subsection (b) (as so redesignated 
        by paragraph (3)(E) of this subsection) the following new 
        subsection:
    ``(a) Duty To Serve Underserved Markets.--
            ``(1) Duty.--In accordance with the purpose of the 
        enterprises under section 301(3) of the Federal National 
        Mortgage Association Charter Act (12 U.S.C. 1716) and section 
        301(b)(3) of the Federal Home Loan Mortgage Corporation Act (12 
        U.S.C. 1451 note) to undertake activities relating to mortgages 
        on housing for very low-, low-, and moderate-income families 
        involving a reasonable economic return that may be less than 
        the return earned on other activities, each enterprise shall 
        have the duty to increase the liquidity of mortgage investments 
        and improve the distribution of investment capital available 
        for mortgage financing for underserved markets.
            ``(2) Underserved markets.--To meet its duty under 
        paragraph (1), each enterprise shall comply with the following 
        requirements with respect to the following underserved markets:
                    ``(A) Manufactured housing.--The enterprise shall 
                lead the industry in developing loan products and 
                flexible underwriting guidelines to facilitate a 
                secondary market for mortgages on manufactured homes 
                for very low-, low-, and moderate-income families.
                    ``(B) Affordable housing preservation.--The 
                enterprise shall lead the industry in developing loan 
                products and flexible underwriting guidelines to 
                facilitate a secondary market to preserve housing 
                affordable to very
                low-, low-, and moderate-income families, including 
                housing projects subsidized under--
                            ``(i) the project-based and tenant-based 
                        rental assistance programs under section 8 of 
                        the United States Housing Act of 1937;
                            ``(ii) the program under section 236 of the 
                        National Housing Act;
                            ``(iii) the below-market interest rate 
                        mortgage program under section 221(d)(4) of the 
                        National Housing Act;
                            ``(iv) the supportive housing for the 
                        elderly program under section 202 of the 
                        Housing Act of 1959;
                            ``(v) the supportive housing program for 
                        persons with disabilities under section 811 of 
                        the Cranston-Gonzalez National Affordable 
                        Housing Act; and
                            ``(vi) the rural rental housing program 
                        under section 515 of the Housing Act of 1949.
                    ``(C) Rural and other underserved markets.--The 
                enterprise shall lead the industry in developing loan 
                products and flexible underwriting guidelines to 
                facilitate a secondary market for mortgages on housing 
                for very
                low-, low-, and moderate-income families in rural 
                areas, and for mortgages for housing for any other 
                underserved market for very low-, low-, and moderate-
                income families that the Secretary identifies as 
                lacking adequate credit through conventional lending 
                sources. Such underserved markets may be identified by 
                borrower type, market segment, or geographic area.''; 
                and
            (5) by adding at the end the following new subsection:
    ``(c) Evaluation and Reporting of Compliance.--
            ``(1) In general.--Not later than 6 months after the 
        effective date under section 185 of the Federal Housing Finance 
        Reform Act of 2007, the Director shall establish a manner for 
        evaluating whether, and the extent to which, the enterprises 
        have complied with the duty under subsection (a) to serve 
        underserved markets and for rating the extent of such 
        compliance. Using such method, the Director shall, for each 
        year, evaluate such compliance and rate the performance of each 
        enterprise as to extent of compliance. The Director shall 
        include such evaluation and rating for each enterprise for a 
        year in the report for that year submitted pursuant to section 
        1319B(a).
            ``(2) Separate evaluations.--In determining whether an 
        enterprise has complied with the duty referred to in paragraph 
        (1), the Director shall separately evaluate whether the 
        enterprise has complied with such duty with respect to each of 
        the underserved markets identified in subsection (a), taking 
        into consideration--
                    ``(A) the development of loan products and more 
                flexible underwriting guidelines;
                    ``(B) the extent of outreach to qualified loan 
                sellers in each of such underserved markets; and
                    ``(C) the volume of loans purchased in each of such 
                underserved markets.
            ``(3) Manufactured housing market.--In determining whether 
        an enterprise has complied with the duty under subparagraph (A) 
        of subsection (a)(2), the Director may consider loans secured 
        by both real and personal property.''.
    (b) Enforcement.--Subsection (a) of section 1336 of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4566(a)) is amended--
            (1) in paragraph (1), by inserting ``and with the duty 
        under section 1335A of each enterprise with respect to 
        underserved markets,'' before ``as provided in this section,''; 
        and
            (2) by adding at the end of such subsection, as amended by 
        the preceding provisions of this title, the following new 
        paragraph:
            ``(4) Enforcement of duty to provide mortgage credit to 
        underserved markets.--The duty under section 1335(a) of each 
        enterprise to serve underserved markets (as determined in 
        accordance with section 1335(c)) shall be enforceable under 
        this section to the same extent and under the same provisions 
        that the housing goals established under this subpart are 
        enforceable. Such duty shall not be enforceable under any other 
        provision of this title (including subpart C of this part) 
        other than this section or under any provision of the Federal 
        National Mortgage Association Charter Act or the Federal Home 
        Loan Mortgage Corporation Act.''.

SEC. 127. MONITORING AND ENFORCING COMPLIANCE WITH HOUSING GOALS.

    Section 1336 of the Housing and Community Development Act of 1992 
(12 U.S.C. 4566) is amended--
            (1) in subsection (b)--
                    (A) in the subsection heading, by inserting 
                ``Preliminary'' before ``Determination'';
                    (B) by striking paragraph (1) and inserting the 
                following new paragraph:
            ``(1) Notice.--If the Director preliminarily determines 
        that an enterprise has failed, or that there is a substantial 
        probability that an enterprise will fail, to meet any housing 
        goal established under this subpart, the Director shall provide 
        written notice to the enterprise of such a preliminary 
        determination, the reasons for such determination, and the 
        information on which the Director based the determination.'';
                    (C) in paragraph (2)--
                            (i) in subparagraph (A), by inserting 
                        ``finally'' before ``determining'';
                            (ii) by striking subparagraphs (B) and (C) 
                        and inserting the following new subparagraph:
                    ``(B) Extension or shortening of period.--The 
                Director may--
                            ``(i) extend the period under subparagraph 
                        (A) for good cause for not more than 30 
                        additional days; and
                            ``(ii) shorten the period under 
                        subparagraph (A) for good cause.''; and
                            (iii) by redesignating subparagraph (D) as 
                        subparagraph (C); and
                    (D) in paragraph (3)--
                            (i) in subparagraph (A), by striking 
                        ``determine'' and inserting ``issue a final 
                        determination of'';
                            (ii) in subparagraph (B), by inserting 
                        ``final'' before ``determinations''; and
                            (iii) in subparagraph (C)--
                                    (I) by striking ``Committee on 
                                Banking, Finance and Urban Affairs'' 
                                and inserting ``Committee on Financial 
                                Services''; and
                                    (II) by inserting ``final'' before 
                                ``determination'' each place such term 
                                appears; and
            (2) in subsection (c)--
                    (A) by striking the subsection designation and 
                heading and all that follows through the end of 
                paragraph (1) and inserting the following:
    ``(c) Cease and Desist Orders, Civil Money Penalties, and Remedies 
Including Housing Plans.--
            ``(1) Requirement.--If the Director finds, pursuant to 
        subsection (b), that there is a substantial probability that an 
        enterprise will fail, or has actually failed, to meet any 
        housing goal under this subpart and that the achievement of the 
        housing goal was or is feasible, the Director may require that 
        the enterprise submit a housing plan under this subsection. If 
        the Director makes such a finding and the enterprise refuses to 
        submit such a plan, submits an unacceptable plan, fails to 
        comply with the plan or the Director finds that the enterprise 
        has failed to meet any housing goal under this subpart, in 
        addition to requiring an enterprise to submit a housing plan, 
        the Director may issue a cease and desist order in accordance 
        with section 1341, impose civil money penalties in accordance 
        with section 1345, or order other remedies as set forth in 
        paragraph (7) of this subsection.'';
                    (B) in paragraph (2)--
                            (i) by striking ``contents.--Each housing 
                        plan'' and inserting ``housing plan.--If the 
                        Director requires a housing plan under this 
                        section, such a plan''; and
                            (ii) in subparagraph (B), by inserting 
                        ``and changes in its operations'' after 
                        ``improvements'';
                    (C) in paragraph (3)--
                            (i) by inserting ``comply with any remedial 
                        action or'' before ``submit a housing plan''; 
                        and
                            (ii) by striking ``under subsection (b)(3) 
                        that a housing plan is required'';
                    (D) in paragraph (4), by striking the first two 
                sentences and inserting the following: ``The Director 
                shall review each submission by an enterprise, 
                including a housing plan submitted under this 
                subsection, and not later than 30 days after 
                submission, approve or disapprove the plan or other 
                action. The Director may extend the period for approval 
                or disapproval for a single additional 30-day period if 
                the Director determines such extension necessary.''; 
                and
                    (E) by adding at the end the following new 
                paragraph:
            ``(7) Additional remedies for failure to meet goals.--In 
        addition to ordering a housing plan under this section, issuing 
        cease and desist orders under section 1341, and ordering civil 
        money penalties under section 1345, the Director may seek other 
        actions when an enterprise fails to meet a goal, and exercise 
        appropriate enforcement authority available to the Director 
        under this Act to prohibit the enterprise from initially 
        offering any product (as such term is defined in section 
        1321(f)) or engaging in any new activities, services, 
        undertakings, and offerings and to order the enterprise to 
        suspend products and activities, services, undertakings, and 
        offerings pending its achievement of the goal.''.

SEC. 128. AFFORDABLE HOUSING FUND.

    (a) In General.--The Housing and Community Development Act of 1992 
is amended by striking sections 1337 and 1338 (12 U.S.C. 4562 note) and 
inserting the following new section:

``SEC. 1337. AFFORDABLE HOUSING FUND.

    ``(a) Establishment and Purpose.--The Director, in consultation 
with the Secretary of Housing and Urban Development, shall establish 
and manage an affordable housing fund in accordance with this section, 
which shall be funded with amounts allocated by the enterprises under 
subsection (b). The purpose of the affordable housing fund shall be to 
provide formula grants to grantees for use--
            ``(1) to increase homeownership for extremely low-and very 
        low-income families;
            ``(2) to increase investment in housing in low-income 
        areas, and areas designated as qualified census tracts or an 
        area of chronic economic distress pursuant to section 143(j) of 
        the Internal Revenue Code of 1986 (26 U.S.C. 143(j));
            ``(3) to increase and preserve the supply of rental and 
        owner-occupied housing for extremely low- and very low-income 
        families;
            ``(4) to increase investment in public infrastructure 
        development in connection with housing assisted under this 
        section; and
            ``(5) to leverage investments from other sources in 
        affordable housing and in public infrastructure development in 
        connection with housing assisted under this section.
    ``(b) Allocation of Amounts by Enterprises.--
            ``(1) In general.--In accordance with regulations issued by 
        the Director under subsection (m) and subject to paragraph (2) 
        of this subsection and subsection (i)(5), each enterprise shall 
        allocate to the affordable housing fund established under 
        subsection (a), in each of the years 2007 through 2011, an 
        amount equal to 1.2 basis points for each dollar of the average 
        total mortgage portfolio of the enterprise during the preceding 
        year.
            ``(2) Suspension of contributions.--The Director shall 
        temporarily suspend the allocation under paragraph (1) by an 
        enterprise to the affordable housing fund upon a finding by the 
        Director that such allocations--
                    ``(A) are contributing, or would contribute, to the 
                financial instability of the enterprise;
                    ``(B) are causing, or would cause, the enterprise 
                to be classified as undercapitalized; or
                    ``(C) are preventing, or would prevent, the 
                enterprise from successfully completing a capital 
                restoration plan under section 1369C.
            ``(3) 5-year sunset and report.--
                    ``(A) Sunset.--The enterprises shall not be 
                required to make allocations to the affordable housing 
                fund in 2012 or in any year thereafter.
                    ``(B) Report on program continuance.--Not later 
                than June 30, 2011, the Director shall submit to the 
                Committee on Financial Services of the House of 
                Representatives and the Committee on Banking, Housing, 
                and Urban Affairs of the Senate a report making 
                recommendations on whether the program under this 
                section, including the requirement for the enterprises 
                to make allocations to the affordable housing fund, 
                should be extended and on any modifications for the 
                program.
    ``(c) Affordable Housing Needs Formulas.--
            ``(1) Allocation for 2007.--
                    ``(A) Allocation percentages for louisiana and 
                mississippi.--For purposes of subsection (d)(1)(A), the 
                allocation percentages for 2007 for the grantees under 
                this section for such year shall be as follows:
                            ``(i) The allocation percentage for the 
                        Louisiana Housing Finance Agency shall be 75 
                        percent.
                            ``(ii) The allocation percentage for the 
                        Mississippi Development Authority shall be 25 
                        percent.
                    ``(B) Use in disaster areas.--Affordable housing 
                grant amounts for 2007 shall be used only as provided 
                in subsection (g) only for such eligible activities in 
                areas that were subject to a declaration by the 
                President of a major disaster or emergency under the 
                Robert T. Stafford Disaster Relief and Emergency 
                Assistance Act (42 U.S.C. 5121 et seq.) in connection 
                with Hurricane Katrina or Rita of 2005.
            ``(2) Allocation formula for other years.--The Secretary of 
        Housing and Urban Development shall, by regulation, establish a 
        formula to allocate, among the States (as such term is defined 
        in section 1303) and federally recognized Indian tribes, the 
        amounts provided by the enterprises in each year referred to 
        subsection (b)(1), other than 2007, to the affordable housing 
        fund established under this section. The formula shall be based 
        on the following factors, with respect to each State and tribe:
                    ``(A) The ratio of the population of the State or 
                federally recognized Indian tribe to the aggregate 
                population of all the States and tribes.
                    ``(B) The percentage of families in the State or 
                federally recognized Indian tribe that pay more than 50 
                percent of their annual income for housing costs.
                    ``(C) The percentage of persons in the State or 
                federally recognized Indian tribe that are members of 
                extremely low- or very low-income families.
                    ``(D) The cost of developing or carrying out 
                rehabilitation of housing in the State or for the 
                federally recognized Indian tribe.
                    ``(E) The percentage of families in the State or 
                federally recognized Indian tribe that live in 
                substandard housing.
                    ``(F) The percentage of housing stock in the State 
                or for the federally recognized Indian tribe that is 
                extremely old housing.
                    ``(G) Any other factors that the Secretary 
                determines to be appropriate.
            ``(3) Failure to establish.--If, in any year referred to in 
        subsection (b)(1), other than 2007, the regulations 
        establishing the formula required under paragraph (2) of this 
        subsection have not been issued by the date that the Director 
        determines the amounts described in subsection (d)(1) to be 
        available for affordable housing fund grants in such year, for 
        purposes of such year any amounts for a State (as such term is 
        defined in section 1303 of this Act) that would otherwise be 
        determined under subsection (d) by applying the formula 
        established pursuant to paragraph (2) of this subsection shall 
        be determined instead by applying, for such State, the 
        percentage that is equal to the percentage of the total amounts 
        made available for such year for allocation under subtitle A of 
        title II of the Cranston-Gonzalez National Affordable Housing 
        Act (42 U.S.C. 12741 et seq.) that are allocated in such year, 
        pursuant to such subtitle, to such State (including any insular 
        area or unit of general local government, as such terms are 
        defined in section 104 of such Act (42 U.S.C. 12704), that is 
        treated as a State under section 1303 of this Act) and to 
        participating jurisdictions and other eligible entities within 
        such State.
    ``(d) Allocation of Formula Amount; Grants.--
            ``(1) Formula amount.--For each year referred to in 
        subsection (b)(1), the Director shall determine the formula 
        amount under this section for each grantee, which shall be the 
        amount determined for such grantee--
                    ``(A) for 2007, by applying the allocation 
                percentages under subparagraph (A) of subsection (c)(1) 
                to the sum of the total amounts allocated by the 
                enterprises to the affordable housing fund for such 
                year, less any amounts used pursuant to subsection 
                (i)(1); and
                    ``(B) for any other year referred to in subsection 
                (b)(1) (other than 2007), by applying the formula 
                established pursuant to paragraph (2) of subsection (c) 
                to the sum of the total amounts allocated by the 
                enterprises to the affordable housing fund for such 
                year and any recaptured amounts available pursuant to 
                subsection (i)(4), less any amounts used pursuant to 
                subsection (i)(1).
            ``(2) Notice.--In each year referred to in subsection 
        (b)(1), not later than 60 days after the date that the Director 
        determines the amounts described in paragraph (1) to be 
        available for affordable housing fund grants to grantees in 
        such year, the Director shall cause to be published in the 
        Federal Register a notice that such amounts shall be so 
        available.
            ``(3) Grant amount.--
                    ``(A) In general.--For each year referred to in 
                subsection (b)(1), the Director shall make a grant from 
                amounts in the affordable housing fund to each grantee 
                in an amount that is, except as provided in 
                subparagraph (B), equal to the formula amount under 
                this section for the grantee. A grantee may designate a 
                State housing finance agency, housing and community 
                development entity, tribally designated housing entity 
                (as such term is defined in section 4 of the Native 
                American Housing Assistance and Self-Determination Act 
                of 1997 (25 U.S.C. 4103)) or other qualified 
                instrumentality of the grantee to receive such grant 
                amounts.
                    ``(B) Reduction for failure to obtain return of 
                misused funds.--If in any year a grantee, fails to 
                obtain reimbursement or return of the full amount 
                required under subsection (j)(1)(B) to be reimbursed or 
                returned to the grantee during such year--
                            ``(i) except as provided in clause (ii)--
                                    ``(I) the amount of the grant for 
                                the grantee for the succeeding year, as 
                                determined pursuant to subparagraph 
                                (A), shall be reduced by the amount by 
                                which such amounts required to be 
                                reimbursed or returned exceed the 
                                amount actually reimbursed or returned; 
                                and
                                    ``(II) the amount of the grant for 
                                the succeeding year for each other 
                                grantee whose grant is not reduced 
                                pursuant to clause (i) shall be 
                                increased by the amount determined by 
                                applying the formula established 
                                pursuant to subsection (c)(2) to the 
                                total amount of all reductions for all 
                                grantees for such year pursuant to 
                                clause (i); or
                            ``(ii) in any case in which such failure to 
                        obtain reimbursement or return occurs during a 
                        year immediately preceding a year in which 
                        grants under this subsection will not be made, 
                        the grantee shall pay to the Director for 
                        reallocation among the other grantees an amount 
                        equal to the amount of the reduction for the 
                        grantee that would otherwise apply under clause 
                        (i)(I).
    ``(e) Grantee Allocation Plans.--
            ``(1) In general.--For each year that a grantee receives 
        affordable housing fund grant amounts, the grantee shall 
        establish an allocation plan in accordance with this 
        subsection, which shall be a plan for the distribution of such 
        grant amounts of the grantee for such year that--
                    ``(A) is based on priority housing needs, as 
                determined by the grantee in accordance with the 
                regulations established under subsection (m)(2)(C); and
                    ``(B) complies with subsection (f).
            ``(2) Establishment.--In establishing an allocation plan, a 
        grantee shall notify the public of the establishment of the 
        plan, provide an opportunity for public comments regarding the 
        plan, consider any public comments received, and make the 
        completed plan available to the public.
            ``(3) Contents.--An allocation plan of a grantee shall set 
        forth the requirements for eligible recipients under subsection 
        (h) to apply to the grantee to receive assistance from 
        affordable housing fund grant amounts, including a requirement 
        that each such application include--
                    ``(A) a description of the eligible activities to 
                be conducted using such assistance; and
                    ``(B) a certification by the eligible recipient 
                applying for such assistance that any housing units 
                assisted with such assistance will comply with the 
                requirements under this section.
    ``(f) Selection of Activities Funded Using Affordable Housing Fund 
Grant Amounts.--Affordable housing fund grant amounts of a grantee may 
be used, or committed for use, only for activities that--
            ``(1) are eligible under subsection (g) for such use;
            ``(2) comply with the applicable allocation plan under 
        subsection (e) of the grantee; and
            ``(3) are selected for funding by the grantee in accordance 
        with the process and criteria for such selection established 
        pursuant to subsection (m)(2)(C).
    ``(g) Eligible Activities.--Affordable housing fund grant amounts 
of a grantee shall be eligible for use, or for commitment for use, only 
for assistance for--
            ``(1) the production, preservation, and rehabilitation of 
        rental housing, including housing under the programs identified 
        in section 1335(a)(2)(B), except that such grant amounts may be 
        used for the benefit only of extremely low- and very low-income 
        families;
            ``(2) the production, preservation, and rehabilitation of 
        housing for homeownership, including such forms as downpayment 
        assistance, closing cost assistance, and assistance for 
        interest-rate buy-downs, that--
                    ``(A) is available for purchase only for use as a 
                principal residence by families that qualify both as--
                            ``(i) extremely low- and very-low income 
                        families at the times described in 
                        subparagraphs (A) through (C) of section 
                        215(b)(2) of the Cranston-Gonzalez National 
                        Affordable Housing Act (42 U.S.C. 12745(b)(2)); 
                        and
                            ``(ii) first-time homebuyers, as such term 
                        is defined in section 104 of the Cranston-
                        Gonzalez National Affordable Housing Act (42 
                        U.S.C. 12704), except that any reference in 
                        such section to assistance under title II of 
                        such Act shall for purposes of this section be 
                        considered to refer to assistance from 
                        affordable housing fund grant amounts;
                    ``(B) has an initial purchase price that meets the 
                requirements of section 215(b)(1) of the Cranston-
                Gonzalez National Affordable Housing Act; and
                    ``(C) is subject to the same resale restrictions 
                established under section 215(b)(3) of the Cranston-
                Gonzalez National Affordable Housing Act and applicable 
                to the participating jurisdiction that is the State in 
                which such housing is located; and
            ``(3) public infrastructure development activities in 
        connection with housing activities funded under paragraph (1) 
        or (2).
    ``(h) Eligible Recipients.--Affordable housing fund grant amounts 
of a grantee may be provided only to a recipient that is an 
organization, agency, or other entity (including a for-profit entity, a 
nonprofit entity, and a faith-based organization) that
            ``(1) has a demonstrated capacity for carrying out 
        activities of the type that are to be funded with such grant 
        amounts; and
            ``(2) makes such assurances to the grantee as the Director 
        shall, by regulation, require to ensure that the recipient will 
        comply with the requirements of this section during the entire 
        period that begins upon selection of the recipient to receive 
        such grant amounts and ending upon the conclusion of all 
        activities under subsection (g) that are engaged in by the 
        recipient and funded with such grant amounts.
    ``(i) Limitations on Use.--
            ``(1) Required amount for refcorp.--Of the aggregate amount 
        allocated pursuant to subsection (b) in each year to the 
        affordable housing fund, 25 percent shall be used as provided 
        in section 21B(f)(2)(E) of the Federal Home Loan Bank Act (12 
        U.S.C. 1441b(f)(2)(E)).
            ``(2) Required amount for homeownership activities.--Of the 
        aggregate amount of affordable housing fund grant amounts 
        provided in each year to a grantee, not less than 10 percent 
        shall be used for activities under paragraph (2) of subsection 
        (g).
            ``(3) Maximum amount for public infrastructure development 
        activities in connection with affordable housing activities.--
        Of the aggregate amount of affordable housing fund grant 
        amounts provided in each year to a grantee, not more than 12.5 
        percent may be used for activities under paragraph (3) of 
        subsection (g).
            ``(4) Deadline for commitment or use.--Any affordable 
        housing fund grant amounts of a grantee shall be used or 
        committed for use within two years of the date of that such 
        grant amounts are made available to the grantee. The Director 
        shall recapture into the affordable housing fund any such 
        amounts not so used or committed for use and allocate such 
        amounts under subsection (d)(1) in the first year after such 
        recapture.
            ``(5) Use of returns.--The Director shall, by regulation 
        provide that any return on a loan or other investment of any 
        affordable housing fund grant amounts of a grantee shall be 
        treated, for purposes of availability to and use by the 
        grantee, as affordable housing fund grant amounts.
            ``(6) Prohibited uses.--The Director shall--
                    ``(A) by regulation, set forth prohibited uses of 
                affordable housing fund grant amounts, which shall 
                include use for--
                            ``(i) political activities;
                            ``(ii) advocacy;
                            ``(iii) lobbying, whether directly or 
                        through other parties;
                            ``(iv) counseling services;
                            ``(v) travel expenses; and
                            ``(vi) preparing or providing advice on tax 
                        returns;
                    ``(B) by regulation, provide that, except as 
                provided in subparagraph (C), affordable housing fund 
                grant amounts of a grantee may not be used for 
                administrative, outreach, or other costs of--
                            ``(i) the grantee; or
                            ``(ii) any recipient of such grant amounts; 
                        and
                    ``(C) by regulation, limit the amount of any 
                affordable housing fund grant amounts that may be used 
                for administrative costs of the grantee of carrying out 
                the program required under this section.
            ``(7) Prohibition of consideration of use for meeting 
        housing goals or duty to serve.--In determining compliance with 
        the housing goals under this subpart and the duty to serve 
        underserved markets under section 1335, the Director may not 
        consider any affordable housing fund grant amounts used under 
        this section for eligible activities under subsection (g). The 
        Director shall give credit toward the achievement of such 
        housing goals and such duty to serve underserved markets to 
        purchases by the enterprises of mortgages for housing that 
        receives funding from affordable housing fund grant amounts, 
        but only to the extent that such purchases by the enterprises 
        are funded other than with such grant amounts.
    ``(j) Accountability of Recipients and Grantees.--
            ``(1) Recipients.--
                    ``(A) Tracking of funds.--The Director shall--
                            ``(i) require each grantee to develop and 
                        maintain a system to ensure that each recipient 
                        of assistance from affordable housing fund 
                        grant amounts of the grantee uses such amounts 
                        in accordance with this section, the 
                        regulations issued under this section, and any 
                        requirements or conditions under which such 
                        amounts were provided; and--
                            ``(ii) establish minimum requirements for 
                        agreements, between the grantee and recipients, 
                        regarding assistance from the affordable 
                        housing fund grant amounts of the grantee, 
                        which shall include--
                                    ``(I) appropriate continuing 
                                financial and project reporting, record 
                                retention, and audit requirements for 
                                the duration of the grant to the 
                                recipient to ensure compliance with the 
                                limitations and requirements of this 
                                section and the regulations under this 
                                section; and
                                    ``(II) any other requirements that 
                                the Director determines are necessary 
                                to ensure appropriate grant 
                                administration and compliance.
                    ``(B) Misuse of funds.--
                            ``(i) Reimbursement requirement.--If any 
                        recipient of assistance from affordable housing 
                        fund grant amounts of a grantee is determined, 
                        in accordance with clause (ii), to have used 
                        any such amounts in a manner that is materially 
                        in violation of this section, the regulations 
                        issued under this section, or any requirements 
                        or conditions under which such amounts were 
                        provided, the grantee shall require that, 
                        within 12 months after the determination of 
                        such misuse, the recipient shall reimburse the 
                        grantee for such misused amounts and return to 
                        the grantee any amounts from the affordable 
                        housing fund grant amounts of the grantee that 
                        remain unused or uncommitted for use. The 
                        remedies under this clause are in addition to 
                        any other remedies that may be available under 
                        law.
                            ``(ii) Determination.--A determination is 
                        made in accordance with this clause if the 
                        determination is--
                                    ``(I) made by the Director; or
                                    ``(II)(aa) made by the grantee;
                                    ``(bb) the grantee provides 
                                notification of the determination to 
                                the Director for review, in the 
                                discretion of the Director, of the 
                                determination; and
                                    ``(cc) the Director does not 
                                subsequently reverse the determination.
            ``(2) Grantees.--
                    ``(A) Report.--
                            ``(i) In general.--The Director shall 
                        require each grantee receiving affordable 
                        housing fund grant amounts for a year to submit 
                        a report, for such year, to the Director that--
                                    ``(I) describes the activities 
                                funded under this section during such 
                                year with the affordable housing fund 
                                grant amounts of the grantee; and
                                    ``(II) the manner in which the 
                                grantee complied during such year with 
                                the allocation plan established 
                                pursuant to subsection (e) for the 
                                grantee.
                            ``(ii) Public availability.--The Director 
                        shall make such reports pursuant to this 
                        subparagraph publicly available.
                    ``(B) Misuse of funds.--If the Director determines, 
                after reasonable notice and opportunity for hearing, 
                that a grantee has failed to comply substantially with 
                any provision of this section and until the Director is 
                satisfied that there is no longer any such failure to 
                comply, the Director shall--
                            ``(i) reduce the amount of assistance under 
                        this section to the grantee by an amount equal 
                        to the amount affordable housing fund grant 
                        amounts which were not used in accordance with 
                        this section;
                            ``(ii) require the grantee to repay the 
                        Director an amount equal to the amount of the 
                        amount affordable housing fund grant amounts 
                        which were not used in accordance with this 
                        section;
                            ``(iii) limit the availability of 
                        assistance under this section to the grantee to 
                        activities or recipients not affected by such 
                        failure to comply; or
                            ``(iv) terminate any assistance under this 
                        section to the grantee.
    ``(k) Capital Requirements.--The utilization or commitment of 
amounts from the affordable housing fund shall not be subject to the 
risk-based capital requirements established pursuant to section 
1361(a).
    ``(l) Definitions.--For purposes of this section, the following 
definitions shall apply:
            ``(1) Affordable housing fund grant amounts.--The term 
        `affordable housing fund grant amounts' means amounts from the 
        affordable housing fund established under subsection (a) that 
        are provided to a grantee pursuant to subsection (d)(3).
            ``(2) Grantee.--The term `grantee' means--
                    ``(A) with respect to 2007, the Louisiana Housing 
                Finance Agency and the Mississippi Development 
                Authority; and
                    ``(B) with respect to the years referred to in 
                subsection (b)(1), other than 2007, each State (as such 
                term is defined in section 1303) and each federally 
                recognized Indian tribe.
            ``(3) Recipient.--The term `recipient' means an entity 
        meeting the requirements under subsection (h) that receives 
        assistance from a grantee from affordable housing fund grant 
        amounts of the grantee.
            ``(4) Total mortgage portfolio.--The term ``total mortgage 
        portfolio'' means, with respect to a year, the sum, for all 
        mortgages outstanding during that year in any form, including 
        whole loans, mortgage-backed securities, participation 
        certificates, or other structured securities backed by 
        mortgages, of the dollar amount of the unpaid outstanding 
        principle balances under such mortgages. Such term includes all 
        such mortgages or securitized obligations, whether retained in 
        portfolio, or sold in any form. The Director is authorized to 
        promulgate rules further defining such term as necessary to 
        implement this section and to address market developments.
    ``(m) Regulations.--
            ``(1) In general.--The Director, in consultation with the 
        Secretary of Housing and Urban Development, shall issue 
        regulations to carry out this section.
            ``(2) Required contents.--The regulations issued under this 
        subsection shall include--
                    ``(A) a requirement that the Director ensure that 
                the program of each grantee for use of affordable 
                housing fund grant amounts of the grantee is audited 
                not less than annually to ensure compliance with this 
                section;
                    ``(B) authority for the Director to audit, provide 
                for an audit, or otherwise verify a grantee's 
                activities, to ensure compliance with this section;
                    ``(C) requirements for a process for application 
                to, and selection by, each grantee for activities 
                meeting the grantee's priority housing needs to be 
                funded with affordable housing fund grant amounts of 
                the grantee, which shall provide for priority in 
                funding to be based upon--
                            ``(i) greatest impact;
                            ``(ii) geographic diversity;
                            ``(iii) ability to obligate amounts and 
                        undertake activities so funded in a timely 
                        manner;
                            ``(iv) in the case of rental housing 
                        projects under subsection (g)(1), the extent to 
                        which rents for units in the project funded are 
                        affordable, especially for extremely low-income 
                        families; and
                            ``(v) in the case of rental housing 
                        projects under subsection (g)(1), the extent of 
                        the duration for which such rents will remain 
                        affordable; and
                    ``(D) requirements to ensure that amounts provided 
                to a grantee from the affordable housing fund that are 
                used for rental housing under subsection (g)(1) are 
                used only for the benefit of extremely low- and very-
                low income families; and
                    ``(E) limitations on public infrastructure 
                development activities that are eligible pursuant to 
                subsection (g)(3) for funding with affordable housing 
                fund grant amounts and requirements for the connection 
                between such activities and housing activities funded 
                under paragraph (1) or (2) of subsection (g).
    ``(n) Enforcement of Requirements on Enterprise.--Compliance by the 
enterprises with the requirements under this section shall be 
enforceable under subpart C. Any reference in such subpart to this part 
or to an order, rule, or regulation under this part specifically 
includes this section and any order, rule, or regulation under this 
section.''.
    (b) Timely Establishment of Affordable Housing Needs Formula.--
            (1) In general.--The Secretary of Housing and Urban 
        Development shall, not later than the effective date under 
        section 185 of this Act, issue the regulations establishing the 
        affordable housing needs formulas in accordance with the 
        provisions of paragraphs (1)(B) and (2) of section 1337(c) of 
        the Housing and Community Development Act of 1992, as such 
        section is amended by subsection (a) of this section.
            (2) Effective date.--This subsection shall take effect on 
        the date of the enactment of this Act.
    (c) REFCORP Payments.--Section 21B(f)(2) of the Federal Home Loan 
Bank Act (12 U.S.C. 1441b(f)(2)) is amended--
            (1) in subparagraph (E), by striking ``and (D)'' and 
        inserting ``(D), and (E)'';
            (2) by redesignating subparagraph (E) as subparagraph (F); 
        and
            (3) by inserting after subparagraph (D) the following new 
        subparagraph:
                    ``(E) Payments by fannie mae and freddie mac.--To 
                the extent that the amounts available pursuant to 
                subparagraphs (A), (B), (C), and (D) are insufficient 
                to cover the amount of interest payments, each 
                enterprise (as such term is defined in section 1303 of 
                the Housing and Community Development Act of 1992 (42 
                U.S.C. 4502)) shall transfer to the Funding Corporation 
                in each calendar year the amounts allocated for use 
                under this subparagraph pursuant to section 1337(i)(1) 
                of such Act.''.

SEC. 129. CONSISTENCY WITH MISSION.

    Subpart B of part 2 of subtitle A of title XIII of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4561 et seq.) is amended 
by adding after section 1337, as added by section 127 of this Act, the 
following new section:

``SEC. 1338. CONSISTENCY WITH MISSION.

    ``This subpart may not be construed to authorize an enterprise to 
engage in any program or activity that contravenes or is inconsistent 
with the Federal National Mortgage Association Charter Act or the 
Federal Home Loan Mortgage Corporation Act.''.

SEC. 130. ENFORCEMENT.

    (a) Cease-and-Desist Proceedings.--Section 1341 of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4581) is amended--
            (1) by striking subsection (a) and inserting the following 
        new subsection:
    ``(a) Grounds for Issuance.--The Director may issue and serve a 
notice of charges under this section upon an enterprise if the Director 
determines--
            ``(1) the enterprise has failed to meet any housing goal 
        established under subpart B, following a written notice and 
        determination of such failure in accordance with section 1336;
            ``(2) the enterprise has failed to submit a report under 
        section 1314, following a notice of such failure, an 
        opportunity for comment by the enterprise, and a final 
        determination by the Director;
            ``(3) the enterprise has failed to submit the information 
        required under subsection (m) or (n) of section 309 of the 
        Federal National Mortgage Association Charter Act, or 
        subsection (e) or (f) of section 307 of the Federal Home Loan 
        Mortgage Corporation Act;
            ``(4) the enterprise has violated any provision of this 
        part or any order, rule or regulation under this part;
            ``(5) the enterprise has failed to submit a housing plan 
        that complies with section 1336(c) within the applicable 
        period; or
            ``(6) the enterprise has failed to comply with a housing 
        plan under section 1336(c).'';
            (2) in subsection (b)(2), by striking ``requiring the 
        enterprise to'' and all that follows through the end of the 
        paragraph and inserting the following: ``requiring the 
        enterprise to--
                    ``(A) comply with the goal or goals;
                    ``(B) submit a report under section 1314;
                    ``(C) comply with any provision this part or any 
                order, rule or regulation under such part;
                    ``(D) submit a housing plan in compliance with 
                section 1336(c);
                    ``(E) comply with a housing plan submitted under 
                section 1336(c); or
                    ``(F) provide the information required under 
                subsection (m) or (n) of section 309 of the Federal 
                National Mortgage Association Charter Act or subsection 
                (e) or (f) of section 307 of the Federal Home Loan 
                Mortgage Corporation Act, as applicable.'';
            (3) in subsection (c), by inserting ``date of the'' before 
        ``service of the order''; and
            (4) by striking subsection (d).
    (b) Authority of Director To Enforce Notices and Orders.--Section 
1344 of the Housing and Community Development Act of 1992 (12 U.S.C. 
4584) is amended by striking subsection (a) and inserting the following 
new subsection:
    ``(a) Enforcement.--The Director may, in the discretion of the 
Director, apply to the United States District Court for the District of 
Columbia, or the United States district court within the jurisdiction 
of which the headquarters of the enterprise is located, for the 
enforcement of any effective and outstanding notice or order issued 
under section 1341 or 1345, or request that the Attorney General of the 
United States bring such an action. Such court shall have jurisdiction 
and power to order and require compliance with such notice or order.''.
    (c) Civil Money Penalties.--Section 1345 of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4585) is amended--
            (1) by striking subsections (a) and (b) and inserting the 
        following new subsections:
    ``(a) Authority.--The Director may impose a civil money penalty, in 
accordance with the provisions of this section, on any enterprise that 
has failed to--
            ``(1) meet any housing goal established under subpart B, 
        following a written notice and determination of such failure in 
        accordance with section 1336(b);
            ``(2) submit a report under section 1314, following a 
        notice of such failure, an opportunity for comment by the 
        enterprise, and a final determination by the Director;
            ``(3) submit the information required under subsection (m) 
        or (n) of section 309 of the Federal National Mortgage 
        Association Charter Act, or subsection (e) or (f) of section 
        307 of the Federal Home Loan Mortgage Corporation Act;
            ``(4) comply with any provision of this part or any order, 
        rule or regulation under this part;
            ``(5) submit a housing plan pursuant to section 1336(c) 
        within the required period; or
            ``(6) comply with a housing plan for the enterprise under 
        section 1336(c).
    ``(b) Amount of Penalty.--The amount of the penalty, as determined 
by the Director, may not exceed--
            ``(1) for any failure described in paragraph (1), (5), or 
        (6) of subsection (a), $50,000 for each day that the failure 
        occurs; and
            ``(2) for any failure described in paragraph (2), (3), or 
        (4) of subsection (a), $20,000 for each day that the failure 
        occurs.'';
            (2) in subsection (c)--
                    (A) in paragraph (1)--
                            (i) in subparagraph (A), by inserting 
                        ``and'' after the semicolon at the end;
                            (ii) in subparagraph (B), by striking ``; 
                        and'' and inserting a period; and
                            (iii) by striking subparagraph (C); and
                    (B) in paragraph (2), by inserting after the period 
                at the end the following: ``In determining the penalty 
                under subsection (a)(1), the Director shall give 
                consideration to the length of time the enterprise 
                should reasonably take to achieve the goal.'';
            (3) in the first sentence of subsection (d)--
                    (A) by striking ``request the Attorney General of 
                the United States to'' and inserting ``, in the 
                discretion of the Director,''; and
                    (B) by inserting ``, or request that the Attorney 
                General of the United States bring such an action'' 
                before the period at the end;
            (4) by striking subsection (f); and
            (5) by redesignating subsection (g) as subsection (f).
    (d) Enforcement of Subpoenas.--Section 1348(c) of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4588(c)) is amended--
            (1) by striking ``request the Attorney General of the 
        United States to'' and inserting ``, in the discretion of the 
        Director,''; and
            (2) by inserting ``or request that the Attorney General of 
        the United States bring such an action,'' after ``District of 
        Columbia,''
    (e) Conforming Amendment.--The heading for subpart C of part 2 of 
subtitle A of the Housing and Community Development Act of 1992 is 
amended to read as follows:

                      ``Subpart C--Enforcement''.

SEC. 131. CONFORMING AMENDMENTS.

    Part 2 of subtitle A of title XIII of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4541 et seq.) is amended--
            (1) by striking ``Secretary'' each place such term appears 
        in such part and inserting ``Director'';
            (2) in the section heading for section 1323 (12 U.S.C. 
        4543), by inserting ``of enterprises'' before the period at the 
        end;
            (3) by striking section 1327 (12 U.S.C. 4547);
            (4) by striking section 1328 (12 U.S.C. 4548);
            (5) in sections 1345(c)(1)(A) and 1346(b) (12 U.S.C. 
        4585(c)(1)(A), 4586(b)), by striking ``Secretary's'' each place 
        such term appears and inserting ``Director's''; and
            (6) by striking section 1349 (12 U.S.C. 4589).

                  Subtitle C--Prompt Corrective Action

SEC. 141. CAPITAL CLASSIFICATIONS.

    (a) In General.--Section 1364 of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4614) is amended--
            (1) in the heading for subsection (a) by striking ``In 
        General'' and inserting ``Enterprises'';
            (2) in subsection (c)--
                    (A) by striking ``subsection (b)'' and inserting 
                ``subsection (c)'';
                    (B) by striking ``enterprises'' and inserting 
                ``regulated entities''; and
                    (C) by striking the last sentence;
            (3) by redesignating subsections (c) (as so amended by 
        paragraph (2) of this subsection) and (d) as subsections (d) 
        and (f), respectively;
            (4) by striking subsection (b) and inserting the following 
        new subsections:
    ``(b) Federal Home Loan Banks.--
            ``(1) Establishment and criteria.--For purposes of this 
        subtitle, the Director shall, by regulation--
                    ``(A) establish the capital classifications 
                specified under paragraph (2) for the Federal home loan 
                banks;
                    ``(B) establish criteria for each such capital 
                classification based on the amount and types of capital 
                held by a bank and the risk-based, minimum, and 
                critical capital levels for the banks and taking due 
                consideration of the capital classifications 
                established under subsection (a) for the enterprises, 
                with such modifications as the Director determines to 
                be appropriate to reflect the difference in operations 
                between the banks and the enterprises; and
                    ``(C) shall classify the Federal home loan banks 
                according to such capital classifications.
            ``(2) Classifications.--The capital classifications 
        specified under this paragraph are--
                    ``(A) adequately capitalized;
                    ``(B) undercapitalized;
                    ``(C) significantly undercapitalized; and
                    ``(D) critically undercapitalized.
    ``(c) Discretionary Classification.--
            ``(1) Grounds for reclassification.--The Director may 
        reclassify a regulated entity under paragraph (2) if--
                    ``(A) at any time, the Director determines in 
                writing that the regulated entity is engaging in 
                conduct that could result in a rapid depletion of core 
                or total capital or, in the case of an enterprise, that 
                the value of the property subject to mortgages held or 
                securitized by the enterprise has decreased 
                significantly;
                    ``(B) after notice and an opportunity for hearing, 
                the Director determines that the regulated entity is in 
                an unsafe or unsound condition; or
                    ``(C) pursuant to section 1371(b), the Director 
                deems the regulated entity to be engaging in an unsafe 
                or unsound practice.
            ``(2) Reclassification.--In addition to any other action 
        authorized under this title, including the reclassification of 
        a regulated entity for any reason not specified in this 
        subsection, if the Director takes any action described in 
        paragraph (1) the Director may classify a regulated entity--
                    ``(A) as undercapitalized, if the regulated entity 
                is otherwise classified as adequately capitalized;
                    ``(B) as significantly undercapitalized, if the 
                regulated entity is otherwise classified as 
                undercapitalized; and
                    ``(C) as critically undercapitalized, if the 
                regulated entity is otherwise classified as 
                significantly undercapitalized.''; and
            (5) by inserting after subsection (d) (as so redesignated 
        by paragraph (3) of this subsection), the following new 
        subsection:
    ``(e) Restriction on Capital Distributions.--
            ``(1) In general.--A regulated entity shall make no capital 
        distribution if, after making the distribution, the regulated 
        entity would be undercapitalized.
            ``(2) Exception.--Notwithstanding paragraph (1), the 
        Director may permit a regulated entity, to the extent 
        appropriate or applicable, to repurchase, redeem, retire, or 
        otherwise acquire shares or ownership interests if the 
        repurchase, redemption, retirement, or other acquisition--
                    ``(A) is made in connection with the issuance of 
                additional shares or obligations of the regulated 
                entity in at least an equivalent amount; and
                    ``(B) will reduce the financial obligations of the 
                regulated entity or otherwise improve the financial 
                condition of the entity.''.
    (b) Regulations.--Not later than the expiration of the 180-day 
period beginning on the effective date under section 185, the Director 
of the Federal Housing Finance Agency shall issue regulations to carry 
out section 1364(b) of the Housing and Community Development Act of 
1992 (as added by paragraph (4) of this subsection), relating to 
capital classifications for the Federal home loan banks.

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

    Section 1365 of the Housing and Community Development Act of 1992 
(12 U.S.C. 4615) is amended--
            (1) in the section heading, by striking ``enterprises'' and 
        inserting ``regulated entities'';
            (2) in subsection (a)--
                    (A) by redesignating paragraphs (1) and (2) as 
                paragraphs (2) and (3), respectively;
                    (B) by inserting before paragraph (2) the following 
                paragraph:
            ``(1) Required monitoring.--The Director shall--
                    ``(A) closely monitor the condition of any 
                regulated entity that is classified as 
                undercapitalized;
                    ``(B) closely monitor compliance with the capital 
                restoration plan, restrictions, and requirements 
                imposed under this section; and
                    ``(C) periodically review the plan, restrictions, 
                and requirements applicable to the undercapitalized 
                regulated entity to determine whether the plan, 
                restrictions, and requirements are achieving the 
                purpose of this section.''; and
                    (C) by inserting at the end the following new 
                paragraphs:
            ``(4) Restriction of asset growth.--A regulated entity that 
        is classified as undercapitalized shall not permit its average 
        total assets (as such term is defined in section 1316(b) during 
        any calendar quarter to exceed its average total assets during 
        the preceding calendar quarter unless--
                    ``(A) the Director has accepted the capital 
                restoration plan of the regulated entity;
                    ``(B) any increase in total assets is consistent 
                with the plan; and
                    ``(C) the ratio of total capital to assets for the 
                regulated entity increases during the calendar quarter 
                at a rate sufficient to enable the entity to become 
                adequately capitalized within a reasonable time.
            ``(5) Prior approval of acquisitions, new products, and new 
        activities.--A regulated entity that is classified as 
        undercapitalized shall not, directly or indirectly, acquire any 
        interest in any entity or initially offer any new product (as 
        such term is defined in section 1321(f)) or engage in any new 
        activity, service, undertaking, or offering unless--
                    ``(A) the Director has accepted the capital 
                restoration plan of the regulated entity, the entity is 
                implementing the plan, and the Director determines that 
                the proposed action is consistent with and will further 
                the achievement of the plan; or
                    ``(B) the Director determines that the proposed 
                action will further the purpose of this section.'';
            (3) in the subsection heading for subsection (b), by 
        striking ``From Undercapitalized to Significantly 
        Undercapitalized''; and
            (4) by striking subsection (c) and inserting the following 
        new subsection:
    ``(c) Other Discretionary Safeguards.--The Director may take, with 
respect to a regulated entity that is classified as undercapitalized, 
any of the actions authorized to be taken under section 1366 with 
respect to a regulated entity that is classified as significantly 
undercapitalized, if the Director determines that such actions are 
necessary to carry out the purpose of this subtitle.''.

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

    Section 1366 of the Housing and Community Development Act of 1992 
(12 U.S.C. 4616) is amended--
            (1) in the section heading, by striking ``enterprises'' and 
        inserting ``entities'';
            (2) in subsection (a)(2)(A), by striking ``enterprise'' the 
        last place such term appears;
            (3) in subsection (b)--
                    (A) in the subsection heading, by striking 
                ``Discretionary Supervisory Actions'' and inserting 
                ``Specific Actions'';
                    (B) in the matter preceding paragraph (1), by 
                striking ``may, at any time, take any'' and inserting 
                ``shall carry out this section by taking, at any time, 
                one or more'';
                    (C) by redesignating paragraphs (5) and (6) as 
                paragraphs (6) and (7), respectively;
                    (D) by inserting after paragraph (4) the following 
                new paragraph:
            ``(5) Improvement of management.--Take one or more of the 
        following actions:
                    ``(A) New election of board.--Order a new election 
                for the board of directors of the regulated entity.
                    ``(B) Dismissal of directors or executive 
                officers.--Require the regulated entity to dismiss from 
                office any director or executive officer who had held 
                office for more than 180 days immediately before the 
                entity became undercapitalized. Dismissal under this 
                subparagraph shall not be construed to be a removal 
                pursuant to the Director's enforcement powers provided 
                in section 1377.
                    ``(C) Employ qualified executive officers.--Require 
                the regulated entity to employ qualified executive 
                officers (who, if the Director so specifies, shall be 
                subject to approval by the Director).''; and
                    (E) by inserting at the end the following new 
                paragraph:
            ``(8) Other action.--Require the regulated entity to take 
        any other action that the Director determines will better carry 
        out the purpose of this section than any of the actions 
        specified in this paragraph.'';
            (4) by redesignating subsection (c) as subsection (d); and
            (5) by inserting after subsection (b) the following new 
        subsection:
    ``(c) Restriction on Compensation of Executive Officers.--A 
regulated entity that is classified as significantly undercapitalized 
may not, without prior written approval by the Director--
            ``(1) pay any bonus to any executive officer; or
            ``(2) provide compensation to any executive officer at a 
        rate exceeding that officer's average rate of compensation 
        (excluding bonuses, stock options, and profit sharing) during 
        the 12 calendar months preceding the calendar month in which 
        the regulated entity became undercapitalized.''.

SEC. 144. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED REGULATED 
              ENTITIES.

    (a) In General.--Section 1367 of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4617) is amended to read as follows:

``SEC. 1367. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED REGULATED 
              ENTITIES.

    ``(a) Appointment of Agency as Conservator or Receiver.--
            ``(1) In general.--Notwithstanding any other provision of 
        Federal or State law, if any of the grounds under paragraph (3) 
        exist, at the discretion of the Director, the Director may 
        establish a conservatorship or receivership, as appropriate, 
        for the purpose of reorganizing, rehabilitating, or winding up 
        the affairs of a regulated entity.
            ``(2) Appointment.--In any conservatorship or receivership 
        established under this section, the Director shall appoint the 
        Agency as conservator or receiver.
            ``(3) Grounds for appointment.--The grounds for appointing 
        a conservator or receiver for a regulated entity are as 
        follows:
                    ``(A) Assets insufficient for obligations.--The 
                assets of the regulated entity are less than the 
                obligations of the regulated entity to its creditors 
                and others.
                    ``(B) Substantial dissipation.--Substantial 
                dissipation of assets or earnings due to--
                            ``(i) any violation of any provision of 
                        Federal or State law; or
                            ``(ii) any unsafe or unsound practice.
                    ``(C) Unsafe or unsound condition.--An unsafe or 
                unsound condition to transact business.
                    ``(D) Cease-and-desist orders.--Any willful 
                violation of a cease-and-desist order that has become 
                final.
                    ``(E) Concealment.--Any concealment of the books, 
                papers, records, or assets of the regulated entity, or 
                any refusal to submit the books, papers, records, or 
                affairs of the regulated entity, for inspection to any 
                examiner or to any lawful agent of the Director.
                    ``(F) Inability to meet obligations.--The regulated 
                entity is likely to be unable to pay its obligations or 
                meet the demands of its creditors in the normal course 
                of business.
                    ``(G) Losses.--The regulated entity has incurred or 
                is likely to incur losses that will deplete all or 
                substantially all of its capital, and there is no 
                reasonable prospect for the regulated entity to become 
                adequately capitalized (as defined in section 
                1364(a)(1)).
                    ``(H) Violations of law.--Any violation of any law 
                or regulation, or any unsafe or unsound practice or 
                condition that is likely to--
                            ``(i) cause insolvency or substantial 
                        dissipation of assets or earnings; or
                            ``(ii) weaken the condition of the 
                        regulated entity.
                    ``(I) Consent.--The regulated entity, by resolution 
                of its board of directors or its shareholders or 
                members, consents to the appointment.
                    ``(J) Undercapitalization.--The regulated entity is 
                undercapitalized or significantly undercapitalized (as 
                defined in section 1364(a)(3) or in regulations issued 
                pursuant to section 1364(b), as applicable), and--
                            ``(i) has no reasonable prospect of 
                        becoming adequately capitalized;
                            ``(ii) fails to become adequately 
                        capitalized, as required by--
                                    ``(I) section 1365(a)(1) with 
                                respect to an undercapitalized 
                                regulated entity; or
                                    ``(II) section 1366(a)(1) with 
                                respect to a significantly 
                                undercapitalized regulated entity;
                            ``(iii) fails to submit a capital 
                        restoration plan acceptable to the Agency 
                        within the time prescribed under section 1369C; 
                        or
                            ``(iv) materially fails to implement a 
                        capital restoration plan submitted and accepted 
                        under section 1369C.
                    ``(K) Critical undercapitalization.--The regulated 
                entity is critically undercapitalized, as defined in 
                section 1364(a)(4) or in regulations issued pursuant to 
                section 1364(b), as applicable.
                    ``(L) Money laundering.--The Attorney General 
                notifies the Director in writing that the regulated 
                entity has been found guilty of a criminal offense 
                under section 1956 or 1957 of title 18, United States 
                Code, or section 5322 or 5324 of title 31, United 
                States Code.
            ``(4) Mandatory receivership.--
                    ``(A) In general.--The Director shall appoint the 
                Agency as receiver for a regulated entity if the 
                Director determines, in writing, that--
                            ``(i) the assets of the regulated entity 
                        are, and during the preceding 30 calendar days 
                        have been, less than the obligations of the 
                        regulated entity to its creditors and others; 
                        or
                            ``(ii) the regulated entity is not, and 
                        during the preceding 30 calendar days has not 
                        been, generally paying the debts of the 
                        regulated entity (other than debts that are the 
                        subject of a bona fide dispute) as such debts 
                        become due.
                    ``(B) Periodic determination required for 
                critically under capitalized regulated entity.--If a 
                regulated entity is critically undercapitalized, the 
                Director shall make a determination, in writing, as to 
                whether the regulated entity meets the criteria 
                specified in clause (i) or (ii) of subparagraph (A)--
                            ``(i) not later than 30 calendar days after 
                        the regulated entity initially becomes 
                        critically undercapitalized; and
                            ``(ii) at least once during each succeeding 
                        30-calendar day period.
                    ``(C) Determination not required if receivership 
                already in place.--Subparagraph (B) shall not apply 
                with respect to a regulated entity in any period during 
                which the Agency serves as receiver for the regulated 
                entity.
                    ``(D) Receivership terminates conservatorship.--The 
                appointment under this section of the Agency as 
                receiver of a regulated entity shall immediately 
                terminate any conservatorship established under this 
                title for the regulated entity.
            ``(5) Judicial review.--
                    ``(A) In general.--If the Agency is appointed 
                conservator or receiver under this section, the 
                regulated entity may, within 30 days of such 
                appointment, bring an action in the United States 
                District Court for the judicial district in which the 
                principal place of business of such regulated entity is 
                located, or in the United States District Court for the 
                District of Columbia, for an order requiring the Agency 
                to remove itself as conservator or receiver.
                    ``(B) Review.--Upon the filing of an action under 
                subparagraph (A), the court shall, upon the merits, 
                dismiss such action or direct the Agency to remove 
                itself as such conservator or receiver.
            ``(6) Directors not liable for acquiescing in appointment 
        of conservator or receiver.--The members of the board of 
        directors of a regulated entity shall not be liable to the 
        shareholders or creditors of the regulated entity for 
        acquiescing in or consenting in good faith to the appointment 
        of the Agency as conservator or receiver for that regulated 
        entity.
            ``(7) Agency not subject to any other federal agency.--When 
        acting as conservator or receiver, the Agency shall not be 
        subject to the direction or supervision of any other agency of 
        the United States or any State in the exercise of the rights, 
        powers, and privileges of the Agency.
    ``(b) Powers and Duties of the Agency as Conservator or Receiver.--
            ``(1) Rulemaking authority of the agency.--The Agency may 
        prescribe such regulations as the Agency determines to be 
        appropriate regarding the conduct of conservatorships or 
        receiverships.
            ``(2) General powers.--
                    ``(A) Successor to regulated entity.--The Agency 
                shall, as conservator or receiver, and by operation of 
                law, immediately succeed to--
                            ``(i) all rights, titles, powers, and 
                        privileges of the regulated entity, and of any 
                        stockholder, officer, or director of such 
                        regulated entity with respect to the regulated 
                        entity and the assets of the regulated entity; 
                        and
                            ``(ii) title to the books, records, and 
                        assets of any other legal custodian of such 
                        regulated entity.
                    ``(B) Operate the regulated entity.--The Agency 
                may, as conservator or receiver--
                            ``(i) take over the assets of and operate 
                        the regulated entity with all the powers of the 
                        shareholders, the directors, and the officers 
                        of the regulated entity and conduct all 
                        business of the regulated entity;
                            ``(ii) collect all obligations and money 
                        due the regulated entity;
                            ``(iii) perform all functions of the 
                        regulated entity in the name of the regulated 
                        entity which are consistent with the 
                        appointment as conservator or receiver; and
                            ``(iv) preserve and conserve the assets and 
                        property of such regulated entity.
                    ``(C) Functions of officers, directors, and 
                shareholders of a regulated entity.--The Agency may, by 
                regulation or order, provide for the exercise of any 
                function by any stockholder, director, or officer of 
                any regulated entity for which the Agency has been 
                named conservator or receiver.
                    ``(D) Powers as conservator.--The Agency may, as 
                conservator, take such action as may be--
                            ``(i) necessary to put the regulated entity 
                        in a sound and solvent condition; and
                            ``(ii) appropriate to carry on the business 
                        of the regulated entity and preserve and 
                        conserve the assets and property of the 
                        regulated entity.
                    ``(E) Additional powers as receiver.--The Agency 
                may, as receiver, place the regulated entity in 
                liquidation and proceed to realize upon the assets of 
                the regulated entity, having due regard to the 
                conditions of the housing finance market.
                    ``(F) Organization of new regulated entities.--The 
                Agency may, as receiver, organize a successor regulated 
                entity that will operate pursuant to subsection (i).
                    ``(G) Transfer of assets and liabilities.--The 
                Agency may, as conservator or receiver, transfer any 
                asset or liability of the regulated entity in default 
                without any approval, assignment, or consent with 
                respect to such transfer. Any Federal home loan bank 
                may, with the approval of the Agency, acquire the 
                assets of any Bank in conservatorship or receivership, 
                and assume the liabilities of such Bank.
                    ``(H) Payment of valid obligations.--The Agency, as 
                conservator or receiver, shall, to the extent of 
                proceeds realized from the performance of contracts or 
                sale of the assets of a regulated entity, pay all valid 
                obligations of the regulated entity in accordance with 
                the prescriptions and limitations of this section.
                    ``(I) Subpoena authority.--
                            ``(i) In general.--
                                    ``(I) In general.--The Agency may, 
                                as conservator or receiver, and for 
                                purposes of carrying out any power, 
                                authority, or duty with respect to a 
                                regulated entity (including determining 
                                any claim against the regulated entity 
                                and determining and realizing upon any 
                                asset of any person in the course of 
                                collecting money due the regulated 
                                entity), exercise any power established 
                                under section 1348.
                                    ``(II) Applicability of law.--The 
                                provisions of section 1348 shall apply 
                                with respect to the exercise of any 
                                power exercised under this subparagraph 
                                in the same manner as such provisions 
                                apply under that section.
                            ``(ii) Authority of director.--A subpoena 
                        or subpoena duces tecum may be issued under 
                        clause (i) only by, or with the written 
                        approval of, the Director, or the designee of 
                        the Director.
                            ``(iii) Rule of construction.--This 
                        subsection shall not be construed to limit any 
                        rights that the Agency, in any capacity, might 
                        otherwise have under section 1317 or 1379D.
                    ``(J) Contracting for services.--The Agency may, as 
                conservator or receiver, provide by contract for the 
                carrying out of any of its functions, activities, 
                actions, or duties as conservator or receiver.
                    ``(K) Incidental powers.--The Agency may, as 
                conservator or receiver--
                            ``(i) exercise all powers and authorities 
                        specifically granted to conservators or 
                        receivers, respectively, under this section, 
                        and such incidental powers as shall be 
                        necessary to carry out such powers; and
                            ``(ii) take any action authorized by this 
                        section, which the Agency determines is in the 
                        best interests of the regulated entity or the 
                        Agency.
            ``(3) Authority of receiver to determine claims.--
                    ``(A) In general.--The Agency may, as receiver, 
                determine claims in accordance with the requirements of 
                this subsection and any regulations prescribed under 
                paragraph (4).
                    ``(B) Notice requirements.--The receiver, in any 
                case involving the liquidation or winding up of the 
                affairs of a closed regulated entity, shall--
                            ``(i) promptly publish a notice to the 
                        creditors of the regulated entity to present 
                        their claims, together with proof, to the 
                        receiver by a date specified in the notice 
                        which shall be not less than 90 days after the 
                        publication of such notice; and
                            ``(ii) republish such notice approximately 
                        1 month and 2 months, respectively, after the 
                        publication under clause (i).
                    ``(C) Mailing required.--The receiver shall mail a 
                notice similar to the notice published under 
                subparagraph (B)(i) at the time of such publication to 
                any creditor shown on the books of the regulated 
                entity--
                            ``(i) at the last address of the creditor 
                        appearing in such books; or
                            ``(ii) upon discovery of the name and 
                        address of a claimant not appearing on the 
                        books of the regulated entity within 30 days 
                        after the discovery of such name and address.
            ``(4) Rulemaking authority relating to determination of 
        claims.--Subject to subsection (c), the Director may prescribe 
        regulations regarding the allowance or disallowance of claims 
        by the receiver and providing for administrative determination 
        of claims and review of such determination.
            ``(5) Procedures for determination of claims.--
                    ``(A) Determination period.--
                            ``(i) In general.--Before the end of the 
                        180-day period beginning on the date on which 
                        any claim against a regulated entity is filed 
                        with the Agency as receiver, the Agency shall 
                        determine whether to allow or disallow the 
                        claim and shall notify the claimant of any 
                        determination with respect to such claim.
                            ``(ii) Extension of time.--The period 
                        described in clause (i) may be extended by a 
                        written agreement between the claimant and the 
                        Agency.
                            ``(iii) Mailing of notice sufficient.--The 
                        notification requirements of clause (i) shall 
                        be deemed to be satisfied if the notice of any 
                        determination with respect to any claim is 
                        mailed to the last address of the claimant 
                        which appears--
                                    ``(I) on the books of the regulated 
                                entity;
                                    ``(II) in the claim filed by the 
                                claimant; or
                                    ``(III) in documents submitted in 
                                proof of the claim.
                            ``(iv) Contents of notice of 
                        disallowance.--If any claim filed under clause 
                        (i) is disallowed, the notice to the claimant 
                        shall contain--
                                    ``(I) a statement of each reason 
                                for the disallowance; and
                                    ``(II) the procedures available for 
                                obtaining agency review of the 
                                determination to disallow the claim or 
                                judicial determination of the claim.
                    ``(B) Allowance of proven claim.--The receiver 
                shall allow any claim received on or before the date 
                specified in the notice published under paragraph 
                (3)(B)(i), or the date specified in the notice required 
                under paragraph (3)(C), which is proved to the 
                satisfaction of the receiver.
                    ``(C) Disallowance of claims filed after end of 
                filing period.--Claims filed after the date specified 
                in the notice published under paragraph (3)(B)(i), or 
                the date specified under paragraph (3)(C), shall be 
                disallowed and such disallowance shall be final.
                    ``(D) Authority to disallow claims.--
                            ``(i) In general.--The receiver may 
                        disallow any portion of any claim by a creditor 
                        or claim of security, preference, or priority 
                        which is not proved to the satisfaction of the 
                        receiver.
                            ``(ii) Payments to less than fully secured 
                        creditors.--In the case of a claim of a 
                        creditor against a regulated entity which is 
                        secured by any property or other asset of such 
                        regulated entity, the receiver--
                                    ``(I) may treat the portion of such 
                                claim which exceeds an amount equal to 
                                the fair market value of such property 
                                or other asset as an unsecured claim 
                                against the regulated entity; and
                                    ``(II) may not make any payment 
                                with respect to such unsecured portion 
                                of the claim other than in connection 
                                with the disposition of all claims of 
                                unsecured creditors of the regulated 
                                entity.
                            ``(iii) Exceptions.--No provision of this 
                        paragraph shall apply with respect to any 
                        extension of credit from any Federal Reserve 
                        Bank, Federal home loan bank, or the Treasury 
                        of the United States.
                    ``(E) No judicial review of determination pursuant 
                to subparagraph (D).--No court may review the 
                determination of the Agency under subparagraph (D) to 
                disallow a claim. This subparagraph shall not effect 
                the authority of a claimant to obtain de novo judicial 
                review of a claim pursuant to paragraph (6).
                    ``(F) Legal effect of filing.--
                            ``(i) Statute of limitation tolled.--For 
                        purposes of any applicable statute of 
                        limitations, the filing of a claim with the 
                        receiver shall constitute a commencement of an 
                        action.
                            ``(ii) No prejudice to other actions.--
                        Subject to paragraph (10), the filing of a 
                        claim with the receiver shall not prejudice any 
                        right of the claimant to continue any action 
                        which was filed before the date of the 
                        appointment of the receiver, subject to the 
                        determination of claims by the receiver.
            ``(6) Provision for judicial determination of claims.--
                    ``(A) In general.--The claimant may file suit on a 
                claim (or continue an action commenced before the 
                appointment of the receiver) in the district or 
                territorial court of the United States for the district 
                within which the principal place of business of the 
                regulated entity is located or the United States 
                District Court for the District of Columbia (and such 
                court shall have jurisdiction to hear such claim), 
                before the end of the 60-day period beginning on the 
                earlier of--
                            ``(i) the end of the period described in 
                        paragraph (5)(A)(i) with respect to any claim 
                        against a regulated entity for which the Agency 
                        is receiver; or
                            ``(ii) the date of any notice of 
                        disallowance of such claim pursuant to 
                        paragraph (5)(A)(i).
                    ``(B) Statute of limitations.--A claim shall be 
                deemed to be disallowed (other than any portion of such 
                claim which was allowed by the receiver), and such 
                disallowance shall be final, and the claimant shall 
                have no further rights or remedies with respect to such 
                claim, if the claimant fails, before the end of the 60-
                day period described under subparagraph (A), to file 
                suit on such claim (or continue an action commenced 
                before the appointment of the receiver).
            ``(7) Review of claims.--
                    ``(A) Other review procedures.--
                            ``(i) In general.--The Agency shall 
                        establish such alternative dispute resolution 
                        processes as may be appropriate for the 
                        resolution of claims filed under paragraph 
                        (5)(A)(i).
                            ``(ii) Criteria.--In establishing 
                        alternative dispute resolution processes, the 
                        Agency shall strive for procedures which are 
                        expeditious, fair, independent, and low cost.
                            ``(iii) Voluntary binding or nonbinding 
                        procedures.--The Agency may establish both 
                        binding and nonbinding processes, which may be 
                        conducted by any government or private party. 
                        All parties, including the claimant and the 
                        Agency, must agree to the use of the process in 
                        a particular case.
                    ``(B) Consideration of incentives.--The Agency 
                shall seek to develop incentives for claimants to 
                participate in the alternative dispute resolution 
                process.
            ``(8) Expedited determination of claims.--
                    ``(A) Establishment required.--The Agency shall 
                establish a procedure for expedited relief outside of 
                the routine claims process established under paragraph 
                (5) for claimants who--
                            ``(i) allege the existence of legally valid 
                        and enforceable or perfected security interests 
                        in assets of any regulated entity for which the 
                        Agency has been appointed receiver; and
                            ``(ii) allege that irreparable injury will 
                        occur if the routine claims procedure is 
                        followed.
                    ``(B) Determination period.--Before the end of the 
                90-day period beginning on the date any claim is filed 
                in accordance with the procedures established under 
                subparagraph (A), the Director shall--
                            ``(i) determine--
                                    ``(I) whether to allow or disallow 
                                such claim; or
                                    ``(II) whether such claim should be 
                                determined pursuant to the procedures 
                                established under paragraph (5); and
                            ``(ii) notify the claimant of the 
                        determination, and if the claim is disallowed, 
                        provide a statement of each reason for the 
                        disallowance and the procedure for obtaining 
                        agency review or judicial determination.
                    ``(C) Period for filing or renewing suit.--Any 
                claimant who files a request for expedited relief shall 
                be permitted to file a suit, or to continue a suit 
                filed before the appointment of the receiver, seeking a 
                determination of the rights of the claimant with 
                respect to such security interest after the earlier 
                of--
                            ``(i) the end of the 90-day period 
                        beginning on the date of the filing of a 
                        request for expedited relief; or
                            ``(ii) the date the Agency denies the 
                        claim.
                    ``(D) Statute of limitations.--If an action 
                described under subparagraph (C) is not filed, or the 
                motion to renew a previously filed suit is not made, 
                before the end of the 30-day period beginning on the 
                date on which such action or motion may be filed under 
                subparagraph (B), the claim shall be deemed to be 
                disallowed as of the end of such period (other than any 
                portion of such claim which was allowed by the 
                receiver), such disallowance shall be final, and the 
                claimant shall have no further rights or remedies with 
                respect to such claim.
                    ``(E) Legal effect of filing.--
                            ``(i) Statute of limitation tolled.--For 
                        purposes of any applicable statute of 
                        limitations, the filing of a claim with the 
                        receiver shall constitute a commencement of an 
                        action.
                            ``(ii) No prejudice to other actions.--
                        Subject to paragraph (10), the filing of a 
                        claim with the receiver shall not prejudice any 
                        right of the claimant to continue any action 
                        that was filed before the appointment of the 
                        receiver, subject to the determination of 
                        claims by the receiver.
            ``(9) Payment of claims.--
                    ``(A) In general.--The receiver may, in the 
                discretion of the receiver, and to the extent funds are 
                available from the assets of the regulated entity, pay 
                creditor claims, in such manner and amounts as are 
                authorized under this section, which are--
                            ``(i) allowed by the receiver;
                            ``(ii) approved by the Agency pursuant to a 
                        final determination pursuant to paragraph (7) 
                        or (8); or
                            ``(iii) determined by the final judgment of 
                        any court of competent jurisdiction.
                    ``(B) Agreements against the interest of the 
                agency.--No agreement that tends to diminish or defeat 
                the interest of the Agency in any asset acquired by the 
                Agency as receiver under this section shall be valid 
                against the Agency unless such agreement is in writing, 
                and executed by an authorized official of the regulated 
                entity, except that such requirements for qualified 
                financial contracts shall be applied in a manner 
                consistent with reasonable business trading practices 
                in the financial contracts market.
                    ``(C) Payment of dividends on claims.--The receiver 
                may, in the sole discretion of the receiver, pay from 
                the assets of the regulated entity dividends on proved 
                claims at any time, and no liability shall attach to 
                the Agency, by reason of any such payment, for failure 
                to pay dividends to a claimant whose claim is not 
                proved at the time of any such payment.
                    ``(D) Rulemaking authority of the director.--The 
                Director may prescribe such rules, including 
                definitions of terms, as the Director deems appropriate 
                to establish a single uniform interest rate for, or to 
                make payments of post-insolvency interest to creditors 
                holding proven claims against the receivership estates 
                of regulated entities following satisfaction by the 
                receiver of the principal amount of all creditor 
                claims.
            ``(10) Suspension of legal actions.--
                    ``(A) In general.--After the appointment of a 
                conservator or receiver for a regulated entity, the 
                conservator or receiver may, in any judicial action or 
                proceeding to which such regulated entity is or becomes 
                a party, request a stay for a period not to exceed--
                            ``(i) 45 days, in the case of any 
                        conservator; and
                            ``(ii) 90 days, in the case of any 
                        receiver.
                    ``(B) Grant of stay by all courts required.--Upon 
                receipt of a request by any conservator or receiver 
                under subparagraph (A) for a stay of any judicial 
                action or proceeding in any court with jurisdiction of 
                such action or proceeding, the court shall grant such 
                stay as to all parties.
            ``(11) Additional rights and duties.--
                    ``(A) Prior final adjudication.--The Agency shall 
                abide by any final unappealable judgment of any court 
                of competent jurisdiction which was rendered before the 
                appointment of the Agency as conservator or receiver.
                    ``(B) Rights and remedies of conservator or 
                receiver.--In the event of any appealable judgment, the 
                Agency as conservator or receiver shall--
                            ``(i) have all the rights and remedies 
                        available to the regulated entity (before the 
                        appointment of such conservator or receiver) 
                        and the Agency, including removal to Federal 
                        court and all appellate rights; and
                            ``(ii) not be required to post any bond in 
                        order to pursue such remedies.
                    ``(C) No attachment or execution.--No attachment or 
                execution may issue by any court upon assets in the 
                possession of the receiver.
                    ``(D) Limitation on judicial review.--Except as 
                otherwise provided in this subsection, no court shall 
                have jurisdiction over--
                            ``(i) any claim or action for payment from, 
                        or any action seeking a determination of rights 
                        with respect to, the assets of any regulated 
                        entity for which the Agency has been appointed 
                        receiver; or
                            ``(ii) any claim relating to any act or 
                        omission of such regulated entity or the Agency 
                        as receiver.
                    ``(E) Disposition of assets.--In exercising any 
                right, power, privilege, or authority as conservator or 
                receiver in connection with any sale or disposition of 
                assets of a regulated entity for which the Agency has 
                been appointed conservator or receiver, the Agency 
                shall conduct its operations in a manner which 
                maintains stability in the housing finance markets and, 
                to the extent consistent with that goal--
                            ``(i) maximizes the net present value 
                        return from the sale or disposition of such 
                        assets;
                            ``(ii) minimizes the amount of any loss 
                        realized in the resolution of cases; and
                            ``(iii) ensures adequate competition and 
                        fair and consistent treatment of offerors.
            ``(12) Statute of limitations for actions brought by 
        conservator or receiver.--
                    ``(A) In general.--Notwithstanding any provision of 
                any contract, the applicable statute of limitations 
                with regard to any action brought by the Agency as 
                conservator or receiver shall be--
                            ``(i) in the case of any contract claim, 
                        the longer of--
                                    ``(I) the 6-year period beginning 
                                on the date the claim accrues; or
                                    ``(II) the period applicable under 
                                State law; and
                            ``(ii) in the case of any tort claim, the 
                        longer of--
                                    ``(I) the 3-year period beginning 
                                on the date the claim accrues; or
                                    ``(II) the period applicable under 
                                State law.
                    ``(B) Determination of the date on which a claim 
                accrues.--For purposes of subparagraph (A), the date on 
                which the statute of limitations begins to run on any 
                claim described in such subparagraph shall be the later 
                of--
                            ``(i) the date of the appointment of the 
                        Agency as conservator or receiver; or
                            ``(ii) the date on which the cause of 
                        action accrues.
            ``(13) Revival of expired state causes of action.--
                    ``(A) In general.--In the case of any tort claim 
                described under subparagraph (B) for which the statute 
                of limitations applicable under State law with respect 
                to such claim has expired not more than 5 years before 
                the appointment of the Agency as conservator or 
                receiver, the Agency may bring an action as conservator 
                or receiver on such claim without regard to the 
                expiration of the statute of limitation applicable 
                under State law.
                    ``(B) Claims described.--A tort claim referred to 
                under subparagraph (A) is a claim arising from fraud, 
                intentional misconduct resulting in unjust enrichment, 
                or intentional misconduct resulting in substantial loss 
                to the regulated entity.
            ``(14) Accounting and recordkeeping requirements.--
                    ``(A) In general.--The Agency as conservator or 
                receiver shall, consistent with the accounting and 
                reporting practices and procedures established by the 
                Agency, maintain a full accounting of each 
                conservatorship and receivership or other disposition 
                of a regulated entity in default.
                    ``(B) Annual accounting or report.--With respect to 
                each conservatorship or receivership, the Agency shall 
                make an annual accounting or report available to the 
                Board, the Comptroller General of the United States, 
                the Committee on Banking, Housing, and Urban Affairs of 
                the Senate, and the Committee on Financial Services of 
                the House of Representatives.
                    ``(C) Availability of reports.--Any report prepared 
                under subparagraph (B) shall be made available by the 
                Agency upon request to any shareholder of a regulated 
                entity or any member of the public.
                    ``(D) Recordkeeping requirement.--After the end of 
                the 6-year period beginning on the date that the 
                conservatorship or receivership is terminated by the 
                Director, the Agency may destroy any records of such 
                regulated entity which the Agency, in the discretion of 
                the Agency, determines to be unnecessary unless 
                directed not to do so by a court of competent 
                jurisdiction or governmental agency, or prohibited by 
                law.
            ``(15) Fraudulent transfers.--
                    ``(A) In general.--The Agency, as conservator or 
                receiver, may avoid a transfer of any interest of a 
                regulated entity-affiliated party, or any person who 
                the conservator or receiver determines is a debtor of 
                the regulated entity, in property, or any obligation 
                incurred by such party or person, that was made within 
                5 years of the date on which the Agency was appointed 
                conservator or receiver, if such party or person 
                voluntarily or involuntarily made such transfer or 
                incurred such liability with the intent to hinder, 
                delay, or defraud the regulated entity, the Agency, the 
                conservator, or receiver.
                    ``(B) Right of recovery.--To the extent a transfer 
                is avoided under subparagraph (A), the conservator or 
                receiver may recover, for the benefit of the regulated 
                entity, the property transferred, or, if a court so 
                orders, the value of such property (at the time of such 
                transfer) from--
                            ``(i) the initial transferee of such 
                        transfer or the regulated entity-affiliated 
                        party or person for whose benefit such transfer 
                        was made; or
                            ``(ii) any immediate or mediate transferee 
                        of any such initial transferee.
                    ``(C) Rights of transferee or obligee.--The 
                conservator or receiver may not recover under 
                subparagraph (B) from--
                            ``(i) any transferee that takes for value, 
                        including satisfaction or securing of a present 
                        or antecedent debt, in good faith; or
                            ``(ii) any immediate or mediate good faith 
                        transferee of such transferee.
                    ``(D) Rights under this paragraph.--The rights 
                under this paragraph of the conservator or receiver 
                described under subparagraph (A) shall be superior to 
                any rights of a trustee or any other party (other than 
                any party which is a Federal agency) under title 11, 
                United States Code.
            ``(16) Attachment of assets and other injunctive relief.--
        Subject to paragraph (17), any court of competent jurisdiction 
        may, at the request of the conservator or receiver, issue an 
        order in accordance with Rule 65 of the Federal Rules of Civil 
        Procedure, including an order placing the assets of any person 
        designated by the Agency or such conservator under the control 
        of the court, and appointing a trustee to hold such assets.
            ``(17) Standards of proof.--Rule 65 of the Federal Rules of 
        Civil Procedure shall apply with respect to any proceeding 
        under paragraph (16) without regard to the requirement of such 
        rule that the applicant show that the injury, loss, or damage 
        is irreparable and immediate.
            ``(18) Treatment of claims arising from breach of contracts 
        executed by the receiver or conservator.--
                    ``(A) In general.--Notwithstanding any other 
                provision of this subsection, any final and 
                unappealable judgment for monetary damages entered 
                against a receiver or conservator for the breach of an 
                agreement executed or approved in writing by such 
                receiver or conservator after the date of its 
                appointment, shall be paid as an administrative expense 
                of the receiver or conservator.
                    ``(B) No limitation of power.--Nothing in this 
                paragraph shall be construed to limit the power of a 
                receiver or conservator to exercise any rights under 
                contract or law, including to terminate, breach, 
                cancel, or otherwise discontinue such agreement.
            ``(19) General exceptions.--
                    ``(A) Limitations.--The rights of a conservator or 
                receiver appointed under this section shall be subject 
                to the limitations on the powers of a receiver under 
                sections 402 through 407 of the Federal Deposit 
                Insurance Corporation Improvement Act of 1991 (12 
                U.S.C. 4402 through 4407).
                    ``(B) Mortgages held in trust.--
                            ``(i) In general.--Any mortgage, pool of 
                        mortgages, or interest in a pool of mortgages, 
                        held in trust, custodial, or agency capacity by 
                        a regulated entity for the benefit of persons 
                        other than the regulated entity shall not be 
                        available to satisfy the claims of creditors 
                        generally.
                            ``(ii) Holding of mortgages.--Any mortgage, 
                        pool of mortgages, or interest in a pool of 
                        mortgages, described under clause (i) shall be 
                        held by the conservator or receiver appointed 
                        under this section for the beneficial owners of 
                        such mortgage, pool of mortgages, or interest 
                        in a pool of mortgages in accordance with the 
                        terms of the agreement creating such trust, 
                        custodial, or other agency arrangement.
                            ``(iii) Liability of receiver.--The 
                        liability of a receiver appointed under this 
                        section for damages shall, in the case of any 
                        contingent or unliquidated claim relating to 
                        the mortgages held in trust, be estimated in 
                        accordance set forth in the regulations of the 
                        Director.
    ``(c) Priority of Expenses and Unsecured Claims.--
            ``(1) In general.--Unsecured claims against a regulated 
        entity, or a receiver, that are proven to the satisfaction of 
        the receiver shall have priority in the following order:
                    ``(A) Administrative expenses of the receiver.
                    ``(B) Any other general or senior liability of the 
                regulated entity and claims of other Federal home loan 
                banks arising from their payment obligations (including 
                joint and several payment obligations).
                    ``(C) Any obligation subordinated to general 
                creditors.
                    ``(D) Any obligation to shareholders or members 
                arising as a result of their status as shareholder or 
                members.
            ``(2) Creditors similarly situated.--All creditors that are 
        similarly situated under paragraph (1) shall be treated in a 
        similar manner, except that the Agency may make such other 
        payments to creditors necessary to maximize the present value 
        return from the sale or disposition or such regulated entity's 
        assets or to minimize the amount of any loss realized in the 
        resolution of cases so long as all creditors similarly situated 
        receive not less than the amount provided under subsection 
        (e)(2).
            ``(3) Definition.--The term `administrative expenses of the 
        receiver' shall include the actual, necessary costs and 
        expenses incurred by the receiver in preserving the assets of 
        the regulated entity or liquidating or otherwise resolving the 
        affairs of the regulated entity. Such expenses shall include 
        obligations that are incurred by the receiver after appointment 
        as receiver that the Director determines are necessary and 
        appropriate to facilitate the smooth and orderly liquidation or 
        other resolution of the regulated entity.
    ``(d) Provisions Relating to Contracts Entered Into Before 
Appointment of Conservator or Receiver.--
            ``(1) Authority to repudiate contracts.--In addition to any 
        other rights a conservator or receiver may have, the 
        conservator or receiver for any regulated entity may disaffirm 
        or repudiate any contract or lease--
                    ``(A) to which such regulated entity is a party;
                    ``(B) the performance of which the conservator or 
                receiver, in its sole discretion, determines to be 
                burdensome; and
                    ``(C) the disaffirmance or repudiation of which the 
                conservator or receiver determines, in its sole 
                discretion, will promote the orderly administration of 
                the affairs of the regulated entity.
            ``(2) Timing of repudiation.--The conservator or receiver 
        shall determine whether or not to exercise the rights of 
        repudiation under this subsection within a reasonable period 
        following such appointment.
            ``(3) Claims for damages for repudiation.--
                    ``(A) In general.--Except as otherwise provided 
                under subparagraph (C) and paragraphs (4), (5), and 
                (6), the liability of the conservator or receiver for 
                the disaffirmance or repudiation of any contract 
                pursuant to paragraph (1) shall be--
                            ``(i) limited to actual direct compensatory 
                        damages; and
                            ``(ii) determined as of--
                                    ``(I) the date of the appointment 
                                of the conservator or receiver; or
                                    ``(II) in the case of any contract 
                                or agreement referred to in paragraph 
                                (8), the date of the disaffirmance or 
                                repudiation of such contract or 
                                agreement.
                    ``(B) No liability for other damages.--For purposes 
                of subparagraph (A), the term `actual direct 
                compensatory damages' shall not include--
                            ``(i) punitive or exemplary damages;
                            ``(ii) damages for lost profits or 
                        opportunity; or
                            ``(iii) damages for pain and suffering.
                    ``(C) Measure of damages for repudiation of 
                financial contracts.--In the case of any qualified 
                financial contract or agreement to which paragraph (8) 
                applies, compensatory damages shall be--
                            ``(i) deemed to include normal and 
                        reasonable costs of cover or other reasonable 
                        measures of damages utilized in the industries 
                        for such contract and agreement claims; and
                            ``(ii) paid in accordance with this 
                        subsection and subsection (e), except as 
                        otherwise specifically provided in this 
                        section.
            ``(4) Leases under which the regulated entity is the 
        lessee.--
                    ``(A) In general.--If the conservator or receiver 
                disaffirms or repudiates a lease under which the 
                regulated entity was the lessee, the conservator or 
                receiver shall not be liable for any damages (other 
                than damages determined under subparagraph (B)) for the 
                disaffirmance or repudiation of such lease.
                    ``(B) Payments of rent.--Notwithstanding 
                subparagraph (A), the lessor under a lease to which 
                that subparagraph applies shall--
                            ``(i) be entitled to the contractual rent 
                        accruing before the later of the date--
                                    ``(I) the notice of disaffirmance 
                                or repudiation is mailed; or
                                    ``(II) the disaffirmance or 
                                repudiation becomes effective, unless 
                                the lessor is in default or breach of 
                                the terms of the lease;
                            ``(ii) have no claim for damages under any 
                        acceleration clause or other penalty provision 
                        in the lease; and
                            ``(iii) have a claim for any unpaid rent, 
                        subject to all appropriate offsets and 
                        defenses, due as of the date of the 
                        appointment, which shall be paid in accordance 
                        with this subsection and subsection (e).
            ``(5) Leases under which the regulated entity is the 
        lessor.--
                    ``(A) In general.--If the conservator or receiver 
                repudiates an unexpired written lease of real property 
                of the regulated entity under which the regulated 
                entity is the lessor and the lessee is not, as of the 
                date of such repudiation, in default, the lessee under 
                such lease may either--
                            ``(i) treat the lease as terminated by such 
                        repudiation; or
                            ``(ii) remain in possession of the 
                        leasehold interest for the balance of the term 
                        of the lease, unless the lessee defaults under 
                        the terms of the lease after the date of such 
                        repudiation.
                    ``(B) Provisions applicable to lessee remaining in 
                possession.--If any lessee under a lease described 
                under subparagraph (A) remains in possession of a 
                leasehold interest under clause (ii) of such 
                subparagraph--
                            ``(i) the lessee--
                                    ``(I) shall continue to pay the 
                                contractual rent pursuant to the terms 
                                of the lease after the date of the 
                                repudiation of such lease; and
                                    ``(II) may offset against any rent 
                                payment which accrues after the date of 
                                the repudiation of the lease, and any 
                                damages which accrue after such date 
                                due to the nonperformance of any 
                                obligation of the regulated entity 
                                under the lease after such date; and
                            ``(ii) the conservator or receiver shall 
                        not be liable to the lessee for any damages 
                        arising after such date as a result of the 
                        repudiation other than the amount of any offset 
                        allowed under clause (i)(II).
            ``(6) Contracts for the sale of real property.--
                    ``(A) In general.--If the conservator or receiver 
                repudiates any contract for the sale of real property 
                and the purchaser of such real property under such 
                contract is in possession, and is not, as of the date 
                of such repudiation, in default, such purchaser may 
                either--
                            ``(i) treat the contract as terminated by 
                        such repudiation; or
                            ``(ii) remain in possession of such real 
                        property.
                    ``(B) Provisions applicable to purchaser remaining 
                in possession.--If any purchaser of real property under 
                any contract described under subparagraph (A) remains 
                in possession of such property under clause (ii) of 
                such subparagraph--
                            ``(i) the purchaser--
                                    ``(I) shall continue to make all 
                                payments due under the contract after 
                                the date of the repudiation of the 
                                contract; and
                                    ``(II) may offset against any such 
                                payments any damages which accrue after 
                                such date due to the nonperformance 
                                (after such date) of any obligation of 
                                the regulated entity under the 
                                contract; and
                            ``(ii) the conservator or receiver shall--
                                    ``(I) not be liable to the 
                                purchaser for any damages arising after 
                                such date as a result of the 
                                repudiation other than the amount of 
                                any offset allowed under clause 
                                (i)(II);
                                    ``(II) deliver title to the 
                                purchaser in accordance with the 
                                provisions of the contract; and
                                    ``(III) have no obligation under 
                                the contract other than the performance 
                                required under subclause (II).
                    ``(C) Assignment and sale allowed.--
                            ``(i) In general.--No provision of this 
                        paragraph shall be construed as limiting the 
                        right of the conservator or receiver to assign 
                        the contract described under subparagraph (A), 
                        and sell the property subject to the contract 
                        and the provisions of this paragraph.
                            ``(ii) No liability after assignment and 
                        sale.--If an assignment and sale described 
                        under clause (i) is consummated, the 
                        conservator or receiver shall have no further 
                        liability under the contract described under 
                        subparagraph (A), or with respect to the real 
                        property which was the subject of such 
                        contract.
            ``(7) Provisions applicable to service contracts.--
                    ``(A) Services performed before appointment.--In 
                the case of any contract for services between any 
                person and any regulated entity for which the Agency 
                has been appointed conservator or receiver, any claim 
                of such person for services performed before the 
                appointment of the conservator or the receiver shall 
                be--
                            ``(i) a claim to be paid in accordance with 
                        subsections (b) and (e); and
                            ``(ii) deemed to have arisen as of the date 
                        the conservator or receiver was appointed.
                    ``(B) Services performed after appointment and 
                prior to repudiation.--If, in the case of any contract 
                for services described under subparagraph (A), the 
                conservator or receiver accepts performance by the 
                other person before the conservator or receiver makes 
                any determination to exercise the right of repudiation 
                of such contract under this section--
                            ``(i) the other party shall be paid under 
                        the terms of the contract for the services 
                        performed; and
                            ``(ii) the amount of such payment shall be 
                        treated as an administrative expense of the 
                        conservatorship or receivership.
                    ``(C) Acceptance of performance no bar to 
                subsequent repudiation.--The acceptance by any 
                conservator or receiver of services referred to under 
                subparagraph (B) in connection with a contract 
                described in such subparagraph shall not affect the 
                right of the conservator or receiver to repudiate such 
                contract under this section at any time after such 
                performance.
            ``(8) Certain qualified financial contracts.--
                    ``(A) Rights of parties to contracts.--Subject to 
                paragraphs (9) and (10) and notwithstanding any other 
                provision of this Act, any other Federal law, or the 
                law of any State, no person shall be stayed or 
                prohibited from exercising--
                            ``(i) any right such person has to cause 
                        the termination, liquidation, or acceleration 
                        of any qualified financial contract with a 
                        regulated entity that arises upon the 
                        appointment of the Agency as receiver for such 
                        regulated entity at any time after such 
                        appointment;
                            ``(ii) any right under any security 
                        agreement or arrangement or other credit 
                        enhancement relating to one or more qualified 
                        financial contracts described in clause (i); or
                            ``(iii) any right to offset or net out any 
                        termination value, payment amount, or other 
                        transfer obligation arising under or in 
                        connection with 1 or more contracts and 
                        agreements described in clause (i), including 
                        any master agreement for such contracts or 
                        agreements.
                    ``(B) Applicability of other provisions.--Paragraph 
                (10) of subsection (b) shall apply in the case of any 
                judicial action or proceeding brought against any 
                receiver referred to under subparagraph (A), or the 
                regulated entity for which such receiver was appointed, 
                by any party to a contract or agreement described under 
                subparagraph (A)(i) with such regulated entity.
                    ``(C) Certain transfers not avoidable.--
                            ``(i) In general.--Notwithstanding 
                        paragraph (11) or any other Federal or State 
                        laws relating to the avoidance of preferential 
                        or fraudulent transfers, the Agency, whether 
                        acting as such or as conservator or receiver of 
                        a regulated entity, may not avoid any transfer 
                        of money or other property in connection with 
                        any qualified financial contract with a 
                        regulated entity.
                            ``(ii) Exception for certain transfers.--
                        Clause (i) shall not apply to any transfer of 
                        money or other property in connection with any 
                        qualified financial contract with a regulated 
                        entity if the Agency determines that the 
                        transferee had actual intent to hinder, delay, 
                        or defraud such regulated entity, the creditors 
                        of such regulated entity, or any conservator or 
                        receiver appointed for such regulated entity.
                    ``(D) Certain contracts and agreements defined.--In 
                this subsection:
                            ``(i) Qualified financial contract.--The 
                        term `qualified financial contract' means any 
                        securities contract, commodity contract, 
                        forward contract, repurchase agreement, swap 
                        agreement, and any similar agreement that the 
                        Agency determines by regulation, resolution, or 
                        order to be a qualified financial contract for 
                        purposes of this paragraph.
                            ``(ii) Securities contract.--The term 
                        `securities contract'--
                                    ``(I) means a contract for the 
                                purchase, sale, or loan of a security, 
                                a certificate of deposit, a mortgage 
                                loan, or any interest in a mortgage 
                                loan, a group or index of securities, 
                                certificates of deposit, or mortgage 
                                loans or interests therein (including 
                                any interest therein or based on the 
                                value thereof) or any option on any of 
                                the foregoing, including any option to 
                                purchase or sell any such security, 
                                certificate of deposit, mortgage loan, 
                                interest, group or index, or option, 
                                and including any repurchase or reverse 
                                repurchase transaction on any such 
                                security, certificate of deposit, 
                                mortgage loan, interest, group or 
                                index, or option;
                                    ``(II) does not include any 
                                purchase, sale, or repurchase 
                                obligation under a participation in a 
                                commercial mortgage loan unless the 
                                Agency determines by regulation, 
                                resolution, or order to include any 
                                such agreement within the meaning of 
                                such term;
                                    ``(III) means any option entered 
                                into on a national securities exchange 
                                relating to foreign currencies;
                                    ``(IV) means the guarantee by or to 
                                any securities clearing agency of any 
                                settlement of cash, securities, 
                                certificates of deposit, mortgage loans 
                                or interests therein, group or index of 
                                securities, certificates of deposit, or 
                                mortgage loans or interests therein 
                                (including any interest therein or 
                                based on the value thereof) or option 
                                on any of the foregoing, including any 
                                option to purchase or sell any such 
                                security, certificate of deposit, 
                                mortgage loan, interest, group or 
                                index, or option;
                                    ``(V) means any margin loan;
                                    ``(VI) means any other agreement or 
                                transaction that is similar to any 
                                agreement or transaction referred to in 
                                this clause;
                                    ``(VII) means any combination of 
                                the agreements or transactions referred 
                                to in this clause;
                                    ``(VIII) means any option to enter 
                                into any agreement or transaction 
                                referred to in this clause;
                                    ``(IX) means a master agreement 
                                that provides for an agreement or 
                                transaction referred to in subclause 
                                (I), (III), (IV), (V), (VI), (VII), or 
                                (VIII), together with all supplements 
                                to any such master agreement, without 
                                regard to whether the master agreement 
                                provides for an agreement or 
                                transaction that is not a securities 
                                contract under this clause, except that 
                                the master agreement shall be 
                                considered to be a securities contract 
                                under this clause only with respect to 
                                each agreement or transaction under the 
                                master agreement that is referred to in 
                                subclause (I), (III), (IV), (V), (VI), 
                                (VII), or (VIII); and
                                    ``(X) means any security agreement 
                                or arrangement or other credit 
                                enhancement related to any agreement or 
                                transaction referred to in this clause, 
                                including any guarantee or 
                                reimbursement obligation in connection 
                                with any agreement or transaction 
                                referred to in this clause.
                            ``(iii) Commodity contract.--The term 
                        `commodity contract' means--
                                    ``(I) with respect to a futures 
                                commission merchant, a contract for the 
                                purchase or sale of a commodity for 
                                future delivery on, or subject to the 
                                rules of, a contract market or board of 
                                trade;
                                    ``(II) with respect to a foreign 
                                futures commission merchant, a foreign 
                                future;
                                    ``(III) with respect to a leverage 
                                transaction merchant, a leverage 
                                transaction;
                                    ``(IV) with respect to a clearing 
                                organization, a contract for the 
                                purchase or sale of a commodity for 
                                future delivery on, or subject to the 
                                rules of, a contract market or board of 
                                trade that is cleared by such clearing 
                                organization, or commodity option 
                                traded on, or subject to the rules of, 
                                a contract market or board of trade 
                                that is cleared by such clearing 
                                organization;
                                    ``(V) with respect to a commodity 
                                options dealer, a commodity option;
                                    ``(VI) any other agreement or 
                                transaction that is similar to any 
                                agreement or transaction referred to in 
                                this clause;
                                    ``(VII) any combination of the 
                                agreements or transactions referred to 
                                in this clause;
                                    ``(VIII) any option to enter into 
                                any agreement or transaction referred 
                                to in this clause;
                                    ``(IX) a master agreement that 
                                provides for an agreement or 
                                transaction referred to in subclause 
                                (I), (II), (III), (IV), (V), (VI), 
                                (VII), or (VIII), together with all 
                                supplements to any such master 
                                agreement, without regard to whether 
                                the master agreement provides for an 
                                agreement or transaction that is not a 
                                commodity contract under this clause, 
                                except that the master agreement shall 
                                be considered to be a commodity 
                                contract under this clause only with 
                                respect to each agreement or 
                                transaction under the master agreement 
                                that is referred to in subclause (I), 
                                (II), (III), (IV), (V), (VI), (VII), or 
                                (VIII); or
                                    ``(X) any security agreement or 
                                arrangement or other credit enhancement 
                                related to any agreement or transaction 
                                referred to in this clause, including 
                                any guarantee or reimbursement 
                                obligation in connection with any 
                                agreement or transaction referred to in 
                                this clause.
                            ``(iv) Forward contract.--The term `forward 
                        contract' means--
                                    ``(I) a contract (other than a 
                                commodity contract) for the purchase, 
                                sale, or transfer of a commodity or any 
                                similar good, article, service, right, 
                                or interest which is presently or in 
                                the future becomes the subject of 
                                dealing in the forward contract trade, 
                                or product or byproduct thereof, with a 
                                maturity date more than 2 days after 
                                the date the contract is entered into, 
                                including, a repurchase transaction, 
                                reverse repurchase transaction, 
                                consignment, lease, swap, hedge 
                                transaction, deposit, loan, option, 
                                allocated transaction, unallocated 
                                transaction, or any other similar 
                                agreement;
                                    ``(II) any combination of 
                                agreements or transactions referred to 
                                in subclauses (I) and (III);
                                    ``(III) any option to enter into 
                                any agreement or transaction referred 
                                to in subclause (I) or (II);
                                    ``(IV) a master agreement that 
                                provides for an agreement or 
                                transaction referred to in subclauses 
                                (I), (II), or (III), together with all 
                                supplements to any such master 
                                agreement, without regard to whether 
                                the master agreement provides for an 
                                agreement or transaction that is not a 
                                forward contract under this clause, 
                                except that the master agreement shall 
                                be considered to be a forward contract 
                                under this clause only with respect to 
                                each agreement or transaction under the 
                                master agreement that is referred to in 
                                subclause (I), (II), or (III); or
                                    ``(V) any security agreement or 
                                arrangement or other credit enhancement 
                                related to any agreement or transaction 
                                referred to in subclause (I), (II), 
                                (III), or (IV), including any guarantee 
                                or reimbursement obligation in 
                                connection with any agreement or 
                                transaction referred to in any such 
                                subclause.
                            ``(v) Repurchase agreement.--The term 
                        `repurchase agreement' (which definition also 
                        applies to a reverse repurchase agreement)--
                                    ``(I) means an agreement, including 
                                related terms, which provides for the 
                                transfer of one or more certificates of 
                                deposit, mortgage-related securities 
                                (as such term is defined in the 
                                Securities Exchange Act of 1934), 
                                mortgage loans, interests in mortgage-
                                related securities or mortgage loans, 
                                eligible bankers' acceptances, 
                                qualified foreign government securities 
                                or securities that are direct 
                                obligations of, or that are fully 
                                guaranteed by, the United States or any 
                                agency of the United States against the 
                                transfer of funds by the transferee of 
                                such certificates of deposit, eligible 
                                bankers' acceptances, securities, 
                                mortgage loans, or interests with a 
                                simultaneous agreement by such 
                                transferee to transfer to the 
                                transferor thereof certificates of 
                                deposit, eligible bankers' acceptances, 
                                securities, mortgage loans, or 
                                interests as described above, at a date 
                                certain not later than 1 year after 
                                such transfers or on demand, against 
                                the transfer of funds, or any other 
                                similar agreement;
                                    ``(II) does not include any 
                                repurchase obligation under a 
                                participation in a commercial mortgage 
                                loan unless the Agency determines by 
                                regulation, resolution, or order to 
                                include any such participation within 
                                the meaning of such term;
                                    ``(III) means any combination of 
                                agreements or transactions referred to 
                                in subclauses (I) and (IV);
                                    ``(IV) means any option to enter 
                                into any agreement or transaction 
                                referred to in subclause (I) or (III);
                                    ``(V) means a master agreement that 
                                provides for an agreement or 
                                transaction referred to in subclause 
                                (I), (III), or (IV), together with all 
                                supplements to any such master 
                                agreement, without regard to whether 
                                the master agreement provides for an 
                                agreement or transaction that is not a 
                                repurchase agreement under this clause, 
                                except that the master agreement shall 
                                be considered to be a repurchase 
                                agreement under this subclause only 
                                with respect to each agreement or 
                                transaction under the master agreement 
                                that is referred to in subclause (I), 
                                (III), or (IV); and
                                    ``(VI) means any security agreement 
                                or arrangement or other credit 
                                enhancement related to any agreement or 
                                transaction referred to in subclause 
                                (I), (III), (IV), or (V), including any 
                                guarantee or reimbursement obligation 
                                in connection with any agreement or 
                                transaction referred to in any such 
                                subclause.
                        For purposes of this clause, the term 
                        `qualified foreign government security' means a 
                        security that is a direct obligation of, or 
                        that is fully guaranteed by, the central 
                        government of a member of the Organization for 
                        Economic Cooperation and Development (as 
                        determined by regulation or order adopted by 
                        the appropriate Federal banking authority).
                            ``(vi) Swap agreement.--The term `swap 
                        agreement' means--
                                    ``(I) any agreement, including the 
                                terms and conditions incorporated by 
                                reference in any such agreement, which 
                                is an interest rate swap, option, 
                                future, or forward agreement, including 
                                a rate floor, rate cap, rate collar, 
                                cross-currency rate swap, and basis 
                                swap; a spot, same day-tomorrow, 
                                tomorrow-next, forward, or other 
                                foreign exchange or precious metals 
                                agreement; a currency swap, option, 
                                future, or forward agreement; an equity 
                                index or equity swap, option, future, 
                                or forward agreement; a debt index or 
                                debt swap, option, future, or forward 
                                agreement; a total return, credit 
                                spread or credit swap, option, future, 
                                or forward agreement; a commodity index 
                                or commodity swap, option, future, or 
                                forward agreement; or a weather swap, 
                                weather derivative, or weather option;
                                    ``(II) any agreement or transaction 
                                that is similar to any other agreement 
                                or transaction referred to in this 
                                clause and that is of a type that has 
                                been, is presently, or in the future 
                                becomes, the subject of recurrent 
                                dealings in the swap markets (including 
                                terms and conditions incorporated by 
                                reference in such agreement) and that 
                                is a forward, swap, future, or option 
                                on one or more rates, currencies, 
                                commodities, equity securities or other 
                                equity instruments, debt securities or 
                                other debt instruments, quantitative 
                                measures associated with an occurrence, 
                                extent of an occurrence, or contingency 
                                associated with a financial, 
                                commercial, or economic consequence, or 
                                economic or financial indices or 
                                measures of economic or financial risk 
                                or value;
                                    ``(III) any combination of 
                                agreements or transactions referred to 
                                in this clause;
                                    ``(IV) any option to enter into any 
                                agreement or transaction referred to in 
                                this clause;
                                    ``(V) a master agreement that 
                                provides for an agreement or 
                                transaction referred to in subclause 
                                (I), (II), (III), or (IV), together 
                                with all supplements to any such master 
                                agreement, without regard to whether 
                                the master agreement contains an 
                                agreement or transaction that is not a 
                                swap agreement under this clause, 
                                except that the master agreement shall 
                                be considered to be a swap agreement 
                                under this clause only with respect to 
                                each agreement or transaction under the 
                                master agreement that is referred to in 
                                subclause (I), (II), (III), or (IV); 
                                and
                                    ``(VI) any security agreement or 
                                arrangement or other credit enhancement 
                                related to any agreements or 
                                transactions referred to in subclause 
                                (I), (II), (III), (IV), or (V), 
                                including any guarantee or 
                                reimbursement obligation in connection 
                                with any agreement or transaction 
                                referred to in any such subclause.
                        Such term is applicable for purposes of this 
                        subsection only and shall not be construed or 
                        applied so as to challenge or affect the 
                        characterization, definition, or treatment of 
                        any swap agreement under any other statute, 
                        regulation, or rule, including the Securities 
                        Act of 1933, the Securities Exchange Act of 
                        1934, the Public Utility Holding Company Act of 
                        1935, the Trust Indenture Act of 1939, the 
                        Investment Company Act of 1940, the Investment 
                        Advisers Act of 1940, the Securities Investor 
                        Protection Act of 1970, the Commodity Exchange 
                        Act, the Gramm-Leach-Bliley Act, and the Legal 
                        Certainty for Bank Products Act of 2000.
                            ``(vii) Treatment of master agreement as 
                        one agreement.--Any master agreement for any 
                        contract or agreement described in any 
                        preceding clause of this subparagraph (or any 
                        master agreement for such master agreement or 
                        agreements), together with all supplements to 
                        such master agreement, shall be treated as a 
                        single agreement and a single qualified 
                        financial contract. If a master agreement 
                        contains provisions relating to agreements or 
                        transactions that are not themselves qualified 
                        financial contracts, the master agreement shall 
                        be deemed to be a qualified financial contract 
                        only with respect to those transactions that 
                        are themselves qualified financial contracts.
                            ``(viii) Transfer.--The term `transfer' 
                        means every mode, direct or indirect, absolute 
                        or conditional, voluntary or involuntary, of 
                        disposing of or parting with property or with 
                        an interest in property, including retention of 
                        title as a security interest and foreclosure of 
                        the regulated entity's equity of redemption.
                    ``(E) Certain protections in event of appointment 
                of conservator.--Notwithstanding any other provision of 
                this Act (other than paragraph (13) of this 
                subsection), any other Federal law, or the law of any 
                State, no person shall be stayed or prohibited from 
                exercising--
                            ``(i) any right such person has to cause 
                        the termination, liquidation, or acceleration 
                        of any qualified financial contract with a 
                        regulated entity in a conservatorship based 
                        upon a default under such financial contract 
                        which is enforceable under applicable 
                        noninsolvency law;
                            ``(ii) any right under any security 
                        agreement or arrangement or other credit 
                        enhancement relating to one or more such 
                        qualified financial contracts; or
                            ``(iii) any right to offset or net out any 
                        termination values, payment amounts, or other 
                        transfer obligations arising under or in 
                        connection with such qualified financial 
                        contracts.
                    ``(F) Clarification.--No provision of law shall be 
                construed as limiting the right or power of the Agency, 
                or authorizing any court or agency to limit or delay, 
                in any manner, the right or power of the Agency to 
                transfer any qualified financial contract in accordance 
                with paragraphs (9) and (10) of this subsection or to 
                disaffirm or repudiate any such contract in accordance 
                with subsection (d)(1) of this section.
                    ``(G) Walkaway clauses not effective.--
                            ``(i) In general.--Notwithstanding the 
                        provisions of subparagraphs (A) and (E), and 
                        sections 403 and 404 of the Federal Deposit 
                        Insurance Corporation Improvement Act of 1991, 
                        no walkaway clause shall be enforceable in a 
                        qualified financial contract of a regulated 
                        entity in default.
                            ``(ii) Walkaway clause defined.--For 
                        purposes of this subparagraph, the term 
                        `walkaway clause' means a provision in a 
                        qualified financial contract that, after 
                        calculation of a value of a party's position or 
                        an amount due to or from 1 of the parties in 
                        accordance with its terms upon termination, 
                        liquidation, or acceleration of the qualified 
                        financial contract, either does not create a 
                        payment obligation of a party or extinguishes a 
                        payment obligation of a party in whole or in 
                        part solely because of such party's status as a 
                        nondefaulting party.
            ``(9) Transfer of qualified financial contracts.--In making 
        any transfer of assets or liabilities of a regulated entity in 
        default which includes any qualified financial contract, the 
        conservator or receiver for such regulated entity shall 
        either--
                    ``(A) transfer to 1 person--
                            ``(i) all qualified financial contracts 
                        between any person (or any affiliate of such 
                        person) and the regulated entity in default;
                            ``(ii) all claims of such person (or any 
                        affiliate of such person) against such 
                        regulated entity under any such contract (other 
                        than any claim which, under the terms of any 
                        such contract, is subordinated to the claims of 
                        general unsecured creditors of such regulated 
                        entity);
                            ``(iii) all claims of such regulated entity 
                        against such person (or any affiliate of such 
                        person) under any such contract; and
                            ``(iv) all property securing or any other 
                        credit enhancement for any contract described 
                        in clause (i) or any claim described in clause 
                        (ii) or (iii) under any such contract; or
                    ``(B) transfer none of the financial contracts, 
                claims, or property referred to under subparagraph (A) 
                (with respect to such person and any affiliate of such 
                person).
            ``(10) Notification of transfer.--
                    ``(A) In general.--If--
                            ``(i) the conservator or receiver for a 
                        regulated entity in default makes any transfer 
                        of the assets and liabilities of such regulated 
                        entity, and
                            ``(ii) the transfer includes any qualified 
                        financial contract,
                the conservator or receiver shall notify any person who 
                is a party to any such contract of such transfer by 
                5:00 p.m. (eastern time) on the business day following 
                the date of the appointment of the receiver in the case 
                of a receivership, or the business day following such 
                transfer in the case of a conservatorship.
                    ``(B) Certain rights not enforceable.--
                            ``(i) Receivership.--A person who is a 
                        party to a qualified financial contract with a 
                        regulated entity may not exercise any right 
                        that such person has to terminate, liquidate, 
                        or net such contract under paragraph (8)(A) of 
                        this subsection or section 403 or 404 of the 
                        Federal Deposit Insurance Corporation 
                        Improvement Act of 1991, solely by reason of or 
                        incidental to the appointment of a receiver for 
                        the regulated entity (or the insolvency or 
                        financial condition of the regulated entity for 
                        which the receiver has been appointed)--
                                    ``(I) until 5:00 p.m. (eastern 
                                time) on the business day following the 
                                date of the appointment of the 
                                receiver; or
                                    ``(II) after the person has 
                                received notice that the contract has 
                                been transferred pursuant to paragraph 
                                (9)(A).
                            ``(ii) Conservatorship.--A person who is a 
                        party to a qualified financial contract with a 
                        regulated entity may not exercise any right 
                        that such person has to terminate, liquidate, 
                        or net such contract under paragraph (8)(E) of 
                        this subsection or section 403 or 404 of the 
                        Federal Deposit Insurance Corporation 
                        Improvement Act of 1991, solely by reason of or 
                        incidental to the appointment of a conservator 
                        for the regulated entity (or the insolvency or 
                        financial condition of the regulated entity for 
                        which the conservator has been appointed).
                            ``(iii) Notice.--For purposes of this 
                        paragraph, the Agency as receiver or 
                        conservator of a regulated entity shall be 
                        deemed to have notified a person who is a party 
                        to a qualified financial contract with such 
                        regulated entity if the Agency has taken steps 
                        reasonably calculated to provide notice to such 
                        person by the time specified in subparagraph 
                        (A).
                    ``(C) Business day defined.--For purposes of this 
                paragraph, the term `business day' means any day other 
                than any Saturday, Sunday, or any day on which either 
                the New York Stock Exchange or the Federal Reserve Bank 
                of New York is closed.
            ``(11) Disaffirmance or repudiation of qualified financial 
        contracts.--In exercising the rights of disaffirmance or 
        repudiation of a conservator or receiver with respect to any 
        qualified financial contract to which a regulated entity is a 
        party, the conservator or receiver for such institution shall 
        either--
                    ``(A) disaffirm or repudiate all qualified 
                financial contracts between--
                            ``(i) any person or any affiliate of such 
                        person; and
                            ``(ii) the regulated entity in default; or
                    ``(B) disaffirm or repudiate none of the qualified 
                financial contracts referred to in subparagraph (A) 
                (with respect to such person or any affiliate of such 
                person).
            ``(12) Certain security interests not avoidable.--No 
        provision of this subsection shall be construed as permitting 
        the avoidance of any legally enforceable or perfected security 
        interest in any of the assets of any regulated entity, except 
        where such an interest is taken in contemplation of the 
        insolvency of the regulated entity, or with the intent to 
        hinder, delay, or defraud the regulated entity or the creditors 
        of such regulated entity.
            ``(13) Authority to enforce contracts.--
                    ``(A) In general.--Notwithstanding any provision of 
                a contract providing for termination, default, 
                acceleration, or exercise of rights upon, or solely by 
                reason of, insolvency or the appointment of a 
                conservator or receiver, the conservator or receiver 
                may enforce any contract or regulated entity bond 
                entered into by the regulated entity.
                    ``(B) Certain rights not affected.--No provision of 
                this paragraph may be construed as impairing or 
                affecting any right of the conservator or receiver to 
                enforce or recover under a director's or officer's 
                liability insurance contract or surety bond under other 
                applicable law.
                    ``(C) Consent requirement.--
                            ``(i) In general.--Except as otherwise 
                        provided under this section, no person may 
                        exercise any right or power to terminate, 
                        accelerate, or declare a default under any 
                        contract to which a regulated entity is a 
                        party, or to obtain possession of or exercise 
                        control over any property of the regulated 
                        entity, or affect any contractual rights of the 
                        regulated entity, without the consent of the 
                        conservator or receiver, as appropriate, for a 
                        period of--
                                    ``(I) 45 days after the date of 
                                appointment of a conservator; or
                                    ``(II) 90 days after the date of 
                                appointment of a receiver.
                            ``(ii) Exceptions.--This paragraph shall--
                                    ``(I) not apply to a director's or 
                                officer's liability insurance contract;
                                    ``(II) not apply to the rights of 
                                parties to any qualified financial 
                                contracts under subsection (d)(8); and
                                    ``(III) not be construed as 
                                permitting the conservator or receiver 
                                to fail to comply with otherwise 
                                enforceable provisions of such 
                                contracts.
            ``(14) Savings clause.--The meanings of terms used in this 
        subsection are applicable for purposes of this subsection only, 
        and shall not be construed or applied so as to challenge or 
        affect the characterization, definition, or treatment of any 
        similar terms under any other statute, regulation, or rule, 
        including the Gramm-Leach-Bliley Act, the Legal Certainty for 
        Bank Products Act of 2000, the securities laws (as that term is 
        defined in section 3(a)(47) of the Securities Exchange Act of 
        1934), and the Commodity Exchange Act.
            ``(15) Exception for federal reserve and federal home loan 
        banks.--No provision of this subsection shall apply with 
        respect to--
                    ``(A) any extension of credit from any Federal home 
                loan bank or Federal Reserve Bank to any regulated 
                entity; or
                    ``(B) any security interest in the assets of the 
                regulated entity securing any such extension of credit.
    ``(e) Valuation of Claims in Default.--
            ``(1) In general.--Notwithstanding any other provision of 
        Federal law or the law of any State, and regardless of the 
        method which the Agency determines to utilize with respect to a 
        regulated entity in default or in danger of default, including 
        transactions authorized under subsection (i), this subsection 
        shall govern the rights of the creditors of such regulated 
        entity.
            ``(2) Maximum liability.--The maximum liability of the 
        Agency, acting as receiver or in any other capacity, to any 
        person having a claim against the receiver or the regulated 
        entity for which such receiver is appointed shall equal the 
        lesser of--
                    ``(A) the amount such claimant would have received 
                if the Agency had liquidated the assets and liabilities 
                of such regulated entity without exercising the 
                authority of the Agency under subsection (i) of this 
                section; or
                    ``(B) the amount of proceeds realized from the 
                performance of contracts or sale of the assets of the 
                regulated entity.
    ``(f) Limitation on Court Action.--Except as provided in this 
section or at the request of the Director, no court may take any action 
to restrain or affect the exercise of powers or functions of the Agency 
as a conservator or a receiver.
    ``(g) Liability of Directors and Officers.--
            ``(1) In general.--A director or officer of a regulated 
        entity may be held personally liable for monetary damages in 
        any civil action by, on behalf of, or at the request or 
        direction of the Agency, which action is prosecuted wholly or 
        partially for the benefit of the Agency--
                    ``(A) acting as conservator or receiver of such 
                regulated entity, or
                    ``(B) acting based upon a suit, claim, or cause of 
                action purchased from, assigned by, or otherwise 
                conveyed by such receiver or conservator,
        for gross negligence, including any similar conduct or conduct 
        that demonstrates a greater disregard of a duty of care (than 
        gross negligence) including intentional tortious conduct, as 
        such terms are defined and determined under applicable State 
        law.
            ``(2) No limitation.--Nothing in this paragraph shall 
        impair or affect any right of the Agency under other applicable 
        law.
    ``(h) Damages.--In any proceeding related to any claim against a 
director, officer, employee, agent, attorney, accountant, appraiser, or 
any other party employed by or providing services to a regulated 
entity, recoverable damages determined to result from the improvident 
or otherwise improper use or investment of any assets of the regulated 
entity shall include principal losses and appropriate interest.
    ``(i) Limited-Life Regulated Entities.--
            ``(1) Organization.--
                    ``(A) Purpose.--If a regulated entity is in 
                default, or if the Agency anticipates that a regulated 
                entity will default, the Agency may organize a limited-
                life regulated entity with those powers and attributes 
                of the regulated entity in default or in danger of 
                default that the Director determines necessary, subject 
                to the provisions of this subsection. The Director 
                shall grant a temporary charter to the limited-life 
                regulated entity, and the limited-life regulated entity 
                shall operate subject to that charter.
                    ``(B) Authorities.--Upon the creation of a limited-
                life regulated entity under subparagraph (A), the 
                limited-life regulated entity may--
                            ``(i) assume such liabilities of the 
                        regulated entity that is in default or in 
                        danger of default as the Agency may, in its 
                        discretion, determine to be appropriate, 
                        provided that the liabilities assumed shall not 
                        exceed the amount of assets of the limited-life 
                        regulated entity;
                            ``(ii) purchase such assets of the 
                        regulated entity that is in default, or in 
                        danger of default, as the Agency may, in its 
                        discretion, determine to be appropriate; and
                            ``(iii) perform any other temporary 
                        function which the Agency may, in its 
                        discretion, prescribe in accordance with this 
                        section.
            ``(2) Charter.--
                    ``(A) Conditions.--The Agency may grant a temporary 
                charter if the Agency determines that the continued 
                operation of the regulated entity in default or in 
                danger of default is in the best interest of the 
                national economy and the housing markets.
                    ``(B) Treatment as being in default for certain 
                purposes.--A limited-life regulated entity shall be 
                treated as a regulated entity in default at such times 
                and for such purposes as the Agency may, in its 
                discretion, determine.
                    ``(C) Management.--A limited-life regulated entity, 
                upon the granting of its charter, shall be under the 
                management of a board of directors consisting of not 
                fewer than 5 nor more than 10 members appointed by the 
                Agency.
                    ``(D) Bylaws.--The board of directors of a limited-
                life regulated entity shall adopt such bylaws as may be 
                approved by the Agency.
            ``(3) Capital stock.--No capital stock need be paid into a 
        limited-life regulated entity by the Agency.
            ``(4) Investments.--Funds of a limited-life regulated 
        entity shall be kept on hand in cash, invested in obligations 
        of the United States or obligations guaranteed as to principal 
        and interest by the United States, or deposited with the 
        Agency, or any Federal Reserve bank.
            ``(5) Exempt status.--Notwithstanding any other provision 
        of Federal or State law, the limited-life regulated entity, its 
        franchise, property, and income shall be exempt from all 
        taxation now or hereafter imposed by the United States, by any 
        territory, dependency, or possession thereof, or by any State, 
        county, municipality, or local taxing authority.
            ``(6) Winding up.--
                    ``(A) In general.--Subject to subparagraph (B), 
                unless Congress authorizes the sale of the capital 
                stock of the limited-life regulated entity, not later 
                than 2 years after the date of its organization, the 
                Agency shall wind up the affairs of the limited-life 
                regulated entity.
                    ``(B) Extension.--The Director may, in the 
                discretion of the Director, extend the status of the 
                limited-life regulated entity for 3 additional 1-year 
                periods.
            ``(7) Transfer of assets and liabilities.--
                    ``(A) In general.--
                            ``(i) Transfer of assets and liabilities.--
                        The Agency, as receiver, may transfer any 
                        assets and liabilities of a regulated entity in 
                        default, or in danger of default, to the 
                        limited-life regulated entity in accordance 
                        with paragraph (1).
                            ``(ii) Subsequent transfers.--At any time 
                        after a charter is transferred to a limited-
                        life regulated entity, the Agency, as receiver, 
                        may transfer any assets and liabilities of such 
                        regulated entity in default, or in danger in 
                        default, as the Agency may, in its discretion, 
                        determine to be appropriate in accordance with 
                        paragraph (1).
                            ``(iii) Effective without approval.--The 
                        transfer of any assets or liabilities of a 
                        regulated entity in default, or in danger of 
                        default, transferred to a limited-life 
                        regulated entity shall be effective without any 
                        further approval under Federal or State law, 
                        assignment, or consent with respect thereto.
            ``(8) Proceeds.--To the extent that available proceeds from 
        the limited-life regulated entity exceed amounts required to 
        pay obligations, such proceeds may be paid to the regulated 
        entity in default, or in danger of default.
            ``(9) Powers.--
                    ``(A) In general.--Each limited-life regulated 
                entity created under this subsection shall have all 
                corporate powers of, and be subject to the same 
                provisions of law as, the regulated entity in default 
                or in danger of default to which it relates, except 
                that--
                            ``(i) the Agency may--
                                    ``(I) remove the directors of a 
                                limited-life regulated entity; and
                                    ``(II) fix the compensation of 
                                members of the board of directors and 
                                senior management, as determined by the 
                                Agency in its discretion, of a limited-
                                life regulated entity;
                            ``(ii) the Agency may indemnify the 
                        representatives for purposes of paragraph 
                        (1)(B), and the directors, officers, employees, 
                        and agents of a limited-life regulated entity 
                        on such terms as the Agency determines to be 
                        appropriate; and
                            ``(iii) the board of directors of a 
                        limited-life regulated entity--
                                    ``(I) shall elect a chairperson who 
                                may also serve in the position of chief 
                                executive officer, except that such 
                                person shall not serve either as 
                                chairperson or as chief executive 
                                officer without the prior approval of 
                                the Agency; and
                                    ``(II) may appoint a chief 
                                executive officer who is not also the 
                                chairperson, except that such person 
                                shall not serve as chief executive 
                                officer without the prior approval of 
                                the Agency.
                    ``(B) Stay of judicial action.--Any judicial action 
                to which a limited-life regulated entity becomes a 
                party by virtue of its acquisition of any assets or 
                assumption of any liabilities of a regulated entity in 
                default shall be stayed from further proceedings for a 
                period of up to 45 days at the request of the limited-
                life regulated entity. Such period may be modified upon 
                the consent of all parties.
            ``(10) Obtaining of credit and incurring of debt.--
                    ``(A) In general.--The limited-life regulated 
                entity may obtain unsecured credit and incur unsecured 
                debt in the ordinary course of business.
                    ``(B) Inability to obtain credit.--If the limited-
                life regulated entity is unable to obtain unsecured 
                credit the Director may authorize the obtaining of 
                credit or the incurring of debt--
                            ``(i) with priority over any or all 
                        administrative expenses;
                            ``(ii) secured by a lien on property that 
                        is not otherwise subject to a lien; or
                            ``(iii) secured by a junior lien on 
                        property that is subject to a lien.
                    ``(C) Limitations.--
                            ``(i) In general.--The Director, after 
                        notice and a hearing, may authorize the 
                        obtaining of credit or the incurring of debt 
                        secured by a senior or equal lien on property 
                        that is subject to a lien (other than mortgages 
                        that collateralize the mortgage-backed 
                        securities issued or guaranteed by the 
                        regulated entity) only if--
                                    ``(I) the limited-life regulated 
                                entity is unable to obtain such credit 
                                otherwise; and
                                    ``(II) there is adequate protection 
                                of the interest of the holder of the 
                                lien on the property which such senior 
                                or equal lien is proposed to be 
                                granted.
                            ``(ii) Burden of proof.--In any hearing 
                        under this subsection, the Director has the 
                        burden of proof on the issue of adequate 
                        protection.
                    ``(D) Affect on debts and liens.--The reversal or 
                modification on appeal of an authorization under this 
                paragraph to obtain credit or incur debt, or of a grant 
                under this section of a priority or a lien, does not 
                affect the validity of any debt so incurred, or any 
                priority or lien so granted, to an entity that extended 
                such credit in good faith, whether or not such entity 
                knew of the pendency of the appeal, unless such 
                authorization and the incurring of such debt, or the 
                granting of such priority or lien, were stayed pending 
                appeal.
            ``(11) Issuance of preferred debt.--A limited-life 
        regulated entity may, subject to the approval of the Director 
        and subject to such terms and conditions as the Director may 
        prescribe, issue notes, bonds, or other debt obligations of a 
        class to which all other debt obligations of the limited-life 
        regulated entity shall be subordinate in right and payment.
            ``(12) No federal status.--
                    ``(A) Agency status.--A limited-life regulated 
                entity is not an agency, establishment, or 
                instrumentality of the United States.
                    ``(B) Employee status.--Representatives for 
                purposes of paragraph (1)(B), interim directors, 
                directors, officers, employees, or agents of a limited-
                life regulated entity are not, solely by virtue of 
                service in any such capacity, officers or employees of 
                the United States. Any employee of the Agency or of any 
                Federal instrumentality who serves at the request of 
                the Agency as a representative for purposes of 
                paragraph (1)(B), interim director, director, officer, 
                employee, or agent of a limited-life regulated entity 
                shall not--
                            ``(i) solely by virtue of service in any 
                        such capacity lose any existing status as an 
                        officer or employee of the United States for 
                        purposes of title 5, United States Code, or any 
                        other provision of law; or
                            ``(ii) receive any salary or benefits for 
                        service in any such capacity with respect to a 
                        limited-life regulated entity in addition to 
                        such salary or benefits as are obtained through 
                        employment with the Agency or such Federal 
                        instrumentality.
            ``(13) Additional powers.--In addition to any other powers 
        granted under this subsection, a limited-life regulated entity 
        may--
                    ``(A) extend a maturity date or change in an 
                interest rate or other term of outstanding securities;
                    ``(B) issue securities of the limited-life 
                regulated entity, for cash, for property, for existing 
                securities, or in exchange for claims or interests, or 
                for any other appropriate purposes; and
                    ``(C) take any other action not inconsistent with 
                this section.
    ``(j) Other Exemptions.--When acting as a receiver, the following 
provisions shall apply with respect to the Agency:
            ``(1) Exemption from taxation.--The Agency, including its 
        franchise, its capital, reserves, and surplus, and its income, 
        shall be exempt from all taxation imposed by any State, 
        country, municipality, or local taxing authority, except that 
        any real property of the Agency shall be subject to State, 
        territorial, county, municipal, or local taxation to the same 
        extent according to its value as other real property is taxed, 
        except that, notwithstanding the failure of any person to 
        challenge an assessment under State law of the value of such 
        property, and the tax thereon, shall be determined as of the 
        period for which such tax is imposed.
            ``(2) Exemption from attachment and liens.--No property of 
        the Agency shall be subject to levy, attachment, garnishment, 
        foreclosure, or sale without the consent of the Agency, nor 
        shall any involuntary lien attach to the property of the 
        Agency.
            ``(3) Exemption from penalties and fines.--The Agency shall 
        not be liable for any amounts in the nature of penalties or 
        fines, including those arising from the failure of any person 
        to pay any real property, personal property, probate, or 
        recording tax or any recording or filing fees when due.
    ``(k) Prohibition of Charter Revocation.--In no case may a receiver 
appointed pursuant to this section revoke, annul, or terminate the 
charter of a regulated entity.''.
    (b) Conforming Amendments.--
            (1) Housing and community development act of 1992.--
        Subtitle B of title XIII of the Housing and Community 
        Development Act of 1992 is amended by striking sections 1369 
        (12 U.S.C. 4619), 1369A (12 U.S.C. 4620), and 1369B (12 U.S.C. 
        4621).
            (2) Federal home loan banks.--Section 25 of the Federal 
        Home Loan Bank Act (12 U.S.C. 1445) is amended by striking 
        ``Board under this Act'' and inserting ``Director under section 
        1367 of the Housing and Community Development Act of 1992''.

SEC. 145. CONFORMING AMENDMENTS.

    Title XIII of the Housing and Community Development Act of 1992, as 
amended by the preceding provisions of this Act, is further amended--
            (1) in sections 1365 (12 U.S.C. 4615) through 1369D (12 
        U.S.C. 4623), but not including section 1367 (12 U.S.C. 4617) 
        as added by section 144 of this Act--
                    (A) by striking ``An enterprise'' each place such 
                term appears and inserting ``A regulated entity'';
                    (B) by striking ``an enterprise'' each place such 
                term appears and inserting ``a regulated entity''; and
                    (C) by striking ``the enterprise'' each place such 
                term appears and inserting ``the regulated entity'';
            (2) in section 1366 (12 U.S.C. 4616)--
                    (A) in subsection (b)(7), by striking ``section 
                1369 (excluding subsection (a)(1) and (2))'' and 
                inserting ``section 1367''; and
                    (B) in subsection (d), by striking ``the 
                enterprises'' and inserting ``the regulated entities'';
            (3) in section 1368(d) (12 U.S.C. 4618(d)), by striking 
        ``Committee on Banking, Finance and Urban Affairs'' and 
        inserting ``Committee on Financial Services'';
            (4) in section 1369C (12 U.S.C. 4622)--
                    (A) in subsection (a)(4), by striking ``activities 
                (including existing and new programs)'' and inserting 
                ``activities, services, undertakings, and offerings 
                (including existing and new products (as such term is 
                defined in section 1321(f))''; and
                    (B) in subsection (c), by striking ``any 
                enterprise'' and inserting ``any regulated entity''; 
                and
            (5) in subsections (a) and (d) of section 1369D, by 
        striking ``section 1366 or 1367 or action under section 1369)'' 
        each place such phrase appears and inserting ``section 1367)''.

                    Subtitle D--Enforcement Actions

SEC. 161. CEASE-AND-DESIST PROCEEDINGS.

    Section 1371 of the Housing and Community Development Act of 1992 
(12 U.S.C. 4631) is amended--
            (1) by striking subsections (a) and (b) and inserting the 
        following new subsections:
    ``(a) Issuance for Unsafe or Unsound Practices and Violations of 
Rules or Laws.--If, in the opinion of the Director, a regulated entity 
or any regulated entity-affiliated party is engaging or has engaged, or 
the Director has reasonable cause to believe that the regulated entity 
or any regulated entity-affiliated party is about to engage, in an 
unsafe or unsound practice in conducting the business of the regulated 
entity or is violating or has violated, or the Director has reasonable 
cause to believe that the regulated entity or any regulated entity-
affiliated party is about to violate, a law, rule, or regulation, or 
any condition imposed in writing by the Director in connection with the 
granting of any application or other request by the regulated entity or 
any written agreement entered into with the Director, the Director may 
issue and serve upon the regulated entity or such party a notice of 
charges in respect thereof. The Director may not, pursuant to this 
section, enforce compliance with any housing goal established under 
subpart B of part 2 of subtitle A of this title, with section 1336 or 
1337 of this title, with subsection (m) or (n) of section 309 of the 
Federal National Mortgage Association Charter Act (12 U.S.C. 1723a(m), 
(n)), with subsection (e) or (f) of section 307 of the Federal Home 
Loan Mortgage Corporation Act (12 U.S.C. 1456(e), (f)), or with 
paragraph (5) of section 10(j) of the Federal Home Loan Bank Act (12 
U.S.C. 1430(j)).
    ``(b) Issuance for Unsatisfactory Rating.--If a regulated entity 
receives, in its most recent report of examination, a less-than-
satisfactory rating for asset quality, management, earnings, or 
liquidity, the Director may (if the deficiency is not corrected) deem 
the regulated entity to be engaging in an unsafe or unsound practice 
for purposes of this subsection.'';
            (2) in subsection (c)(2), by striking ``enterprise, 
        executive officer, or director'' and inserting ``regulated 
        entity or regulated entity-affiliated party''; and
            (3) in subsection (d)--
                    (A) in the matter preceding paragraph (1), by 
                striking ``enterprise, executive officer, or director'' 
                and inserting ``regulated entity or regulated entity-
                affiliated party'';
                    (B) in paragraph (1)--
                            (i) by striking ``an executive officer or 
                        director'' and inserting ``a regulated entity 
                        affiliated party''; and
                            (ii) by inserting ``(including 
                        reimbursement of compensation under section 
                        1318)'' after ``reimbursement'';
                    (C) in paragraph (6), by striking ``and'' at the 
                end;
                    (D) by redesignating paragraph (7) as paragraph 
                (8); and
                    (E) by inserting after paragraph (6) the following 
                new paragraph:
            ``(7) to effect an attachment on a regulated entity or 
        regulated entity-affiliated party subject to an order under 
        this section or section 1372; and''.

SEC. 162. TEMPORARY CEASE-AND-DESIST PROCEEDINGS.

    Section 1372 of the Housing and Community Development Act of 1992 
(12 U.S.C. 4632) is amended--
            (1) by striking subsection (a) and inserting the following 
        new subsection:
    ``(a) Grounds for Issuance.--Whenever the Director determines that 
the violation or threatened violation or the unsafe or unsound practice 
or practices specified in the notice of charges served upon the 
regulated entity or any regulated entity-affiliated party pursuant to 
section 1371(a), or the continuation thereof, is likely to cause 
insolvency or significant dissipation of assets or earnings of the 
regulated entity, or is likely to weaken the condition of the regulated 
entity prior to the completion of the proceedings conducted pursuant to 
sections 1371 and 1373, the Director may issue a temporary order 
requiring the regulated entity or such party to cease and desist from 
any such violation or practice and to take affirmative action to 
prevent or remedy such insolvency, dissipation, condition, or prejudice 
pending completion of such proceedings. Such order may include any 
requirement authorized under section 1371(d).'';
            (2) in subsection (b), by striking ``enterprise, executive 
        officer, or director'' and inserting ``regulated entity or 
        regulated entity-affiliated party'';
            (3) in subsection (d)--
                    (A) by striking ``An enterprise, executive officer, 
                or director'' and inserting ``A regulated entity or 
                regulated entity-affiliated party''; and
                    (B) by striking ``the enterprise, executive 
                officer, or director'' and inserting ``the regulated 
                entity or regulated entity-affiliated party''; and
            (4) by striking subsection (e) and in inserting the 
        following new subsection:
    ``(e) Enforcement.--In the case of violation or threatened 
violation of, or failure to obey, a temporary cease-and-desist order 
issued pursuant to this section, the Director may apply to the United 
States District Court for the District of Columbia or the United States 
district court within the jurisdiction of which the headquarters of the 
regulated entity is located, for an injunction to enforce such order, 
and, if the court determines that there has been such violation or 
threatened violation or failure to obey, it shall be the duty of the 
court to issue such injunction.''.

SEC. 163. PREJUDGMENT ATTACHMENT.

    The Housing and Community Development Act of 1992 is amended by 
inserting after section 1375 (12 U.S.C. 4635) the following new 
section:

``SEC. 1375A. PREJUDGMENT ATTACHMENT.

    ``(a) In General.--In any action brought pursuant to this title, or 
in actions brought in aid of, or to enforce an order in, any 
administrative or other civil action for money damages, restitution, or 
civil money penalties brought pursuant to this title, the court may, 
upon application of the Director or Attorney General, as applicable, 
issue a restraining order that--
            ``(1) prohibits any person subject to the proceeding from 
        withdrawing, transferring, removing, dissipating, or disposing 
        of any funds, assets or other property; and
            ``(2) appoints a person on a temporary basis to administer 
        the restraining order.
    ``(b) Standard.--
            ``(1) Showing.--Rule 65 of the Federal Rules of Civil 
        Procedure shall apply with respect to any proceeding under 
        subsection (a) without regard to the requirement of such rule 
        that the applicant show that the injury, loss, or damage is 
        irreparable and immediate.
            ``(2) State proceeding.--If, in the case of any proceeding 
        in a State court, the court determines that rules of civil 
        procedure available under the laws of such State provide 
        substantially similar protections to a party's right to due 
        process as Rule 65 (as modified with respect to such proceeding 
        by paragraph (1)), the relief sought under subsection (a) may 
        be requested under the laws of such State.''.

SEC. 164. ENFORCEMENT AND JURISDICTION.

    Section 1375 of the Housing and Community Development Act of 1992 
(12 U.S.C. 4635) is amended--
            (1) by striking subsection (a) and inserting the following 
        new subsection:
    ``(a) Enforcement.--The Director may, in the discretion of the 
Director, apply to the United States District Court for the District of 
Columbia, or the United States district court within the jurisdiction 
of which the headquarters of the regulated entity is located, for the 
enforcement of any effective and outstanding notice or order issued 
under this subtitle or subtitle B, or request that the Attorney General 
of the United States bring such an action. Such court shall have 
jurisdiction and power to order and require compliance with such notice 
or order.''; and
            (2) in subsection (b), by striking ``or 1376'' and 
        inserting ``1376, or 1377''.

SEC. 165. CIVIL MONEY PENALTIES.

    Section 1376 of the Housing and Community Development Act of 1992 
(12 U.S.C. 4636) is amended--
            (1) in subsection (a)--
                    (A) in the matter preceding paragraph (1), by 
                striking ``or any executive officer or'' and inserting 
                ``any executive officer of a regulated entity, any 
                regulated entity-affiliated party, or any''; and
                    (B) in paragraph (1)--
                            (i) by striking ``the Federal National 
                        Mortgage Association Charter Act, the Federal 
                        Home Loan Mortgage Corporation Act'' and 
                        inserting ``any provision of any of the 
                        authorizing statutes'';
                            (ii) by striking ``or Act'' and inserting 
                        ``or statute'';
                            (iii) by striking ``or subsection'' and 
                        inserting ``, subsection''; and
                            (iv) by inserting ``, or paragraph (5) or 
                        (12) of section 10(j) of the Federal Home Loan 
                        Bank Act'' before the semicolon at the end;
            (2) by striking subsection (b) and inserting the following 
        new subsection:
    ``(b) Amount of Penalty.--
            ``(1) First tier.--Any regulated entity which, or any 
        regulated entity-affiliated party who--
                    ``(A) violates any provision of this title, any 
                provision of any of the authorizing statutes, or any 
                order, condition, rule, or regulation under any such 
                title or statute, except that the Director may not, 
                pursuant to this section, enforce compliance with any 
                housing goal established under subpart B of part 2 of 
                subtitle A of this title, with section 1336 or 1337 of 
                this title, with subsection (m) or (n) of section 309 
                of the Federal National Mortgage Association Charter 
                Act (12 U.S.C. 1723a(m), (n)), with subsection (e) or 
                (f) of section 307 of the Federal Home Loan Mortgage 
                Corporation Act (12 U.S.C. 1456(e), (f)), or with 
                paragraph (5) or (12) of section 10(j) of the Federal 
                Home Loan Bank Act;
                    ``(B) violates any final or temporary order or 
                notice issued pursuant to this title;
                    ``(C) violates any condition imposed in writing by 
                the Director in connection with the grant of any 
                application or other request by such regulated entity; 
                or
                    ``(D) violates any written agreement between the 
                regulated entity and the Director,
        shall forfeit and pay a civil money penalty of not more than 
        $10,000 for each day during which such violation continues.
            ``(2) Second tier.--Notwithstanding paragraph (1)--
                    ``(A) if a regulated entity, or a regulated entity-
                affiliated party--
                            ``(i) commits any violation described in 
                        any subparagraph of paragraph (1);
                            ``(ii) recklessly engages in an unsafe or 
                        unsound practice in conducting the affairs of 
                        such regulated entity; or
                            ``(iii) breaches any fiduciary duty; and
                    ``(B) the violation, practice, or breach--
                            ``(i) is part of a pattern of misconduct;
                            ``(ii) causes or is likely to cause more 
                        than a minimal loss to such regulated entity; 
                        or
                            ``(iii) results in pecuniary gain or other 
                        benefit to such party,
        the regulated entity or regulated entity-affiliated party shall 
        forfeit and pay a civil penalty of not more than $50,000 for 
        each day during which such violation, practice, or breach 
        continues.
            ``(3) Third tier.--Notwithstanding paragraphs (1) and (2), 
        any regulated entity which, or any regulated entity-affiliated 
        party who--
                    ``(A) knowingly--
                            ``(i) commits any violation or engages in 
                        any conduct described in any subparagraph of 
                        paragraph (1);
                            ``(ii) engages in any unsafe or unsound 
                        practice in conducting the affairs of such 
                        regulated entity; or
                            ``(iii) breaches any fiduciary duty; and
                    ``(B) knowingly or recklessly causes a substantial 
                loss to such regulated entity or a substantial 
                pecuniary gain or other benefit to such party by reason 
                of such violation, practice, or breach,
        shall forfeit and pay a civil penalty in an amount not to 
        exceed the applicable maximum amount determined under paragraph 
        (4) for each day during which such violation, practice, or 
        breach continues.
            ``(4) Maximum amounts of penalties for any violation 
        described in paragraph (3).--The maximum daily amount of any 
        civil penalty which may be assessed pursuant to paragraph (3) 
        for any violation, practice, or breach described in such 
        paragraph is--
                    ``(A) in the case of any person other than a 
                regulated entity, an amount not to exceed $2,000,000; 
                and
                    ``(B) in the case of any regulated entity, 
                $2,000,000.'';
            (3) in subsection (c)(1)(B), by striking ``enterprise, 
        executive officer, or director'' and inserting ``regulated 
        entity or regulated entity-affiliated party'';
            (4) in subsection (d), by striking the first sentence and 
        inserting the following: ``If a regulated entity or regulated 
        entity-affiliated party fails to comply with an order of the 
        Director imposing a civil money penalty under this section, 
        after the order is no longer subject to review as provided 
        under subsection (c)(1) and section 1374, the Director may, in 
        the discretion of the Director, bring an action in the United 
        States District Court for the District of Columbia, or the 
        United States district court within the jurisdiction of which 
        the headquarters of the regulated entity is located, to obtain 
        a monetary judgment against the regulated entity or regulated 
        entity affiliated party and such other relief as may be 
        available, or request that the Attorney General of the United 
        States bring such an action.''; and
            (5) in subsection (g), by striking ``subsection (b)(3)'' 
        and inserting ``this section, unless authorized by the Director 
        by rule, regulation, or order''.

SEC. 166. REMOVAL AND PROHIBITION AUTHORITY.

    (a) In General.--Subtitle C of title XIII of the Housing and 
Community Development Act of 1992 is amended--
            (1) by redesignating sections 1377, 1378, 1379, 1379A, and 
        1379B (12 U.S.C. 4637-41) as sections 1379, 1379A, 1379B, 
        1379C, and 1379D, respectively; and
            (2) by inserting after section 1376 (12 U.S.C. 4636) the 
        following new section:

``SEC. 1377. REMOVAL AND PROHIBITION AUTHORITY.

    ``(a) Authority To Issue Order.--Whenever the Director determines 
that--
            ``(1) any regulated entity-affiliated party has, directly 
        or indirectly--
                    ``(A) violated--
                            ``(i) any law or regulation;
                            ``(ii) any cease-and-desist order which has 
                        become final;
                            ``(iii) any condition imposed in writing by 
                        the Director in connection with the grant of 
                        any application or other request by such 
                        regulated entity; or
                            ``(iv) any written agreement between such 
                        regulated entity and the Director;
                    ``(B) engaged or participated in any unsafe or 
                unsound practice in connection with any regulated 
                entity; or
                    ``(C) committed or engaged in any act, omission, or 
                practice which constitutes a breach of such party's 
                fiduciary duty;
            ``(2) by reason of the violation, practice, or breach 
        described in any subparagraph of paragraph (1)--
                    ``(A) such regulated entity has suffered or will 
                probably suffer financial loss or other damage; or
                    ``(B) such party has received financial gain or 
                other benefit by reason of such violation, practice, or 
                breach; and
            ``(3) such violation, practice, or breach--
                    ``(A) involves personal dishonesty on the part of 
                such party; or
                    ``(B) demonstrates willful or continuing disregard 
                by such party for the safety or soundness of such 
                regulated entity, the Director may serve upon such 
                party a written notice of the Director's intention to 
                remove such party from office or to prohibit any 
                further participation by such party, in any manner, in 
                the conduct of the affairs of any regulated entity.
    ``(b) Suspension Order.--
            ``(1) Suspension or prohibition authority.--If the Director 
        serves written notice under subsection (a) to any regulated 
        entity-affiliated party of the Director's intention to issue an 
        order under such subsection, the Director may--
                    ``(A) suspend such party from office or prohibit 
                such party from further participation in any manner in 
                the conduct of the affairs of the regulated entity, if 
                the Director--
                            ``(i) determines that such action is 
                        necessary for the protection of the regulated 
                        entity; and
                            ``(ii) serves such party with written 
                        notice of the suspension order; and
                    ``(B) prohibit the regulated entity from releasing 
                to or on behalf of the regulated entity-affiliated 
                party any compensation or other payment of money or 
                other thing of current or potential value in connection 
                with any resignation, removal, retirement, or other 
                termination of employment or office of the party.
            ``(2) Effective period.--Any suspension order issued under 
        this subsection--
                    ``(A) shall become effective upon service; and
                    ``(B) unless a court issues a stay of such order 
                under subsection (g) of this section, shall remain in 
                effect and enforceable until--
                            ``(i) the date the Director dismisses the 
                        charges contained in the notice served under 
                        subsection (a) with respect to such party; or
                            ``(ii) the effective date of an order 
                        issued by the Director to such party under 
                        subsection (a).
            ``(3) Copy of order.--If the Director issues a suspension 
        order under this subsection to any regulated entity-affiliated 
        party, the Director shall serve a copy of such order on any 
        regulated entity with which such party is affiliated at the 
        time such order is issued.
    ``(c) Notice, Hearing, and Order.--A notice of intention to remove 
a regulated entity-affiliated party from office or to prohibit such 
party from participating in the conduct of the affairs of a regulated 
entity shall contain a statement of the facts constituting grounds for 
such action, and shall fix a time and place at which a hearing will be 
held on such action. Such hearing shall be fixed for a date not earlier 
than 30 days nor later than 60 days after the date of service of such 
notice, unless an earlier or a later date is set by the Director at the 
request of (1) such party, and for good cause shown, or (2) the 
Attorney General of the United States. Unless such party shall appear 
at the hearing in person or by a duly authorized representative, such 
party shall be deemed to have consented to the issuance of an order of 
such removal or prohibition. In the event of such consent, or if upon 
the record made at any such hearing the Director shall find that any of 
the grounds specified in such notice have been established, the 
Director may issue such orders of suspension or removal from office, or 
prohibition from participation in the conduct of the affairs of the 
regulated entity, as it may deem appropriate, together with an order 
prohibiting compensation described in subsection (b)(1)(B). Any such 
order shall become effective at the expiration of 30 days after service 
upon such regulated entity and such party (except in the case of an 
order issued upon consent, which shall become effective at the time 
specified therein). Such order shall remain effective and enforceable 
except to such extent as it is stayed, modified, terminated, or set 
aside by action of the Director or a reviewing court.
    ``(d) Prohibition of Certain Specific Activities.--Any person 
subject to an order issued under this section shall not--
            ``(1) participate in any manner in the conduct of the 
        affairs of any regulated entity;
            ``(2) solicit, procure, transfer, attempt to transfer, 
        vote, or attempt to vote any proxy, consent, or authorization 
        with respect to any voting rights in any regulated entity;
            ``(3) violate any voting agreement previously approved by 
        the Director; or
            ``(4) vote for a director, or serve or act as a regulated 
        entity-affiliated party.
    ``(e) Industry-Wide Prohibition.--
            ``(1) In general.--Except as provided in paragraph (2), any 
        person who, pursuant to an order issued under this section, has 
        been removed or suspended from office in a regulated entity or 
        prohibited from participating in the conduct of the affairs of 
        a regulated entity may not, while such order is in effect, 
        continue or commence to hold any office in, or participate in 
        any manner in the conduct of the affairs of, any regulated 
        entity.
            ``(2) Exception if director provides written consent.--If, 
        on or after the date an order is issued under this section 
        which removes or suspends from office any regulated entity-
        affiliated party or prohibits such party from participating in 
        the conduct of the affairs of a regulated entity, such party 
        receives the written consent of the Director, the order shall, 
        to the extent of such consent, cease to apply to such party 
        with respect to the regulated entity described in the written 
        consent. If the Director grants such a written consent, it 
        shall publicly disclose such consent.
            ``(3) Violation of paragraph (1) treated as violation of 
        order.--Any violation of paragraph (1) by any person who is 
        subject to an order described in such subsection shall be 
        treated as a violation of the order.
    ``(f) Applicability.--This section shall only apply to a person who 
is an individual, unless the Director specifically finds that it should 
apply to a corporation, firm, or other business enterprise.
    ``(g) Stay of Suspension and Prohibition of Regulated Entity-
Affiliated Party.--Within 10 days after any regulated entity-affiliated 
party has been suspended from office and/or prohibited from 
participation in the conduct of the affairs of a regulated entity under 
this section, such party may apply to the United States District Court 
for the District of Columbia, or the United States district court for 
the judicial district in which the headquarters of the regulated entity 
is located, for a stay of such suspension and/or prohibition and any 
prohibition under subsection (b)(1)(B) pending the completion of the 
administrative proceedings pursuant to the notice served upon such 
party under this section, and such court shall have jurisdiction to 
stay such suspension and/or prohibition.
    ``(h) Suspension or Removal of Regulated Entity-Affiliated Party 
Charged With Felony.--
            ``(1) Suspension or prohibition.--
                    ``(A) In general.--Whenever any regulated entity-
                affiliated party is charged in any information, 
                indictment, or complaint, with the commission of or 
                participation in a crime involving dishonesty or breach 
                of trust which is punishable by imprisonment for a term 
                exceeding one year under State or Federal law, the 
                Director may, if continued service or participation by 
                such party may pose a threat to the regulated entity or 
                impair public confidence in the regulated entity, by 
                written notice served upon such party--
                            ``(i) suspend such party from office or 
                        prohibit such party from further participation 
                        in any manner in the conduct of the affairs of 
                        any regulated entity; and
                            ``(ii) prohibit the regulated entity from 
                        releasing to or on behalf of the regulated 
                        entity-affiliated party any compensation or 
                        other payment of money or other thing of 
                        current or potential value in connection with 
                        the period of any such suspension or with any 
                        resignation, removal, retirement, or other 
                        termination of employment or office of the 
                        party.
                    ``(B) Provisions applicable to notice.--
                            ``(i) Copy.--A copy of any notice under 
                        paragraph (1)(A) shall also be served upon the 
                        regulated entity.
                            ``(ii) Effective period.--A suspension or 
                        prohibition under subparagraph (A) shall remain 
                        in effect until the information, indictment, or 
                        complaint referred to in such subparagraph is 
                        finally disposed of or until terminated by the 
                        Director.
            ``(2) Removal or prohibition.--
                    ``(A) In general.--If a judgment of conviction or 
                an agreement to enter a pretrial diversion or other 
                similar program is entered against a regulated entity-
                affiliated party in connection with a crime described 
                in paragraph (1)(A), at such time as such judgment is 
                not subject to further appellate review, the Director 
                may, if continued service or participation by such 
                party may pose a threat to the regulated entity or 
                impair public confidence in the regulated entity, issue 
                and serve upon such party an order that--
                            ``(i) removes such party from office or 
                        prohibits such party from further participation 
                        in any manner in the conduct of the affairs of 
                        the regulated entity without the prior written 
                        consent of the Director; and
                            ``(ii) prohibits the regulated entity from 
                        releasing to or on behalf of the regulated 
                        entity-affiliated party any compensation or 
                        other payment of money or other thing of 
                        current or potential value in connection with 
                        the termination of employment or office of the 
                        party.
                    ``(B) Provisions applicable to order.--
                            ``(i) Copy.--A copy of any order under 
                        paragraph (2)(A) shall also be served upon the 
                        regulated entity, whereupon the regulated 
                        entity-affiliated party who is subject to the 
                        order (if a director or an officer) shall cease 
                        to be a director or officer of such regulated 
                        entity.
                            ``(ii) Effect of acquittal.--A finding of 
                        not guilty or other disposition of the charge 
                        shall not preclude the Director from 
                        instituting proceedings after such finding or 
                        disposition to remove such party from office or 
                        to prohibit further participation in regulated 
                        entity affairs, and to prohibit compensation or 
                        other payment of money or other thing of 
                        current or potential value in connection with 
                        any resignation, removal, retirement, or other 
                        termination of employment or office of the 
                        party, pursuant to subsections (a), (d), or (e) 
                        of this section.
                            ``(iii) Effective period.--Any notice of 
                        suspension or order of removal issued under 
                        this subsection shall remain effective and 
                        outstanding until the completion of any hearing 
                        or appeal authorized under paragraph (4) unless 
                        terminated by the Director.
            ``(3) Authority of remaining board members.--If at any 
        time, because of the suspension of one or more directors 
        pursuant to this section, there shall be on the board of 
        directors of a regulated entity less than a quorum of directors 
        not so suspended, all powers and functions vested in or 
        exercisable by such board shall vest in and be exercisable by 
        the director or directors on the board not so suspended, until 
        such time as there shall be a quorum of the board of directors. 
        In the event all of the directors of a regulated entity are 
        suspended pursuant to this section, the Director shall appoint 
        persons to serve temporarily as directors in their place and 
        stead pending the termination of such suspensions, or until 
        such time as those who have been suspended cease to be 
        directors of the regulated entity and their respective 
        successors take office.
            ``(4) Hearing regarding continued participation.--Within 30 
        days from service of any notice of suspension or order of 
        removal issued pursuant to paragraph (1) or (2) of this 
        subsection, the regulated entity-affiliated party concerned may 
        request in writing an opportunity to appear before the Director 
        to show that the continued service to or participation in the 
        conduct of the affairs of the regulated entity by such party 
        does not, or is not likely to, pose a threat to the interests 
        of the regulated entity or threaten to impair public confidence 
        in the regulated entity. Upon receipt of any such request, the 
        Director shall fix a time (not more than 30 days after receipt 
        of such request, unless extended at the request of such party) 
        and place at which such party may appear, personally or through 
        counsel, before one or more members of the Director or 
        designated employees of the Director to submit written 
        materials (or, at the discretion of the Director, oral 
        testimony) and oral argument. Within 60 days of such hearing, 
        the Director shall notify such party whether the suspension or 
        prohibition from participation in any manner in the conduct of 
        the affairs of the regulated entity will be continued, 
        terminated, or otherwise modified, or whether the order 
        removing such party from office or prohibiting such party from 
        further participation in any manner in the conduct of the 
        affairs of the regulated entity, and prohibiting compensation 
        in connection with termination will be rescinded or otherwise 
        modified. Such notification shall contain a statement of the 
        basis for the Director's decision, if adverse to such party. 
        The Director is authorized to prescribe such rules as may be 
        necessary to effectuate the purposes of this subsection.
    ``(i) Hearings and Judicial Review.--
            ``(1) Venue and procedure.--Any hearing provided for in 
        this section shall be held in the District of Columbia or in 
        the Federal judicial district in which the headquarters of the 
        regulated entity is located, unless the party afforded the 
        hearing consents to another place, and shall be conducted in 
        accordance with the provisions of chapter 5 of title 5, United 
        States Code. After such hearing, and within 90 days after the 
        Director has notified the parties that the case has been 
        submitted to it for final decision, it shall render its 
        decision (which shall include findings of fact upon which its 
        decision is predicated) and shall issue and serve upon each 
        party to the proceeding an order or orders consistent with the 
        provisions of this section. Judicial review of any such order 
        shall be exclusively as provided in this subsection. Unless a 
        petition for review is timely filed in a court of appeals of 
        the United States, as provided in paragraph (2), and thereafter 
        until the record in the proceeding has been filed as so 
        provided, the Director may at any time, upon such notice and in 
        such manner as it shall deem proper, modify, terminate, or set 
        aside any such order. Upon such filing of the record, the 
        Director may modify, terminate, or set aside any such order 
        with permission of the court.
            ``(2) Review of order.--Any party to any proceeding under 
        paragraph (1) may obtain a review of any order served pursuant 
        to paragraph (1) (other than an order issued with the consent 
        of the regulated entity or the regulated entity-affiliated 
        party concerned, or an order issued under subsection (h) of 
        this section) by the filing in the United States Court of 
        Appeals for the District of Columbia Circuit or court of 
        appeals of the United States for the circuit in which the 
        headquarters of the regulated entity is located, within 30 days 
        after the date of service of such order, a written petition 
        praying that the order of the Director be modified, terminated, 
        or set aside. A copy of such petition shall be forthwith 
        transmitted by the clerk of the court to the Director, and 
        thereupon the Director shall file in the court the record in 
        the proceeding, as provided in section 2112 of title 28, United 
        States Code. Upon the filing of such petition, such court shall 
        have jurisdiction, which upon the filing of the record shall 
        (except as provided in the last sentence of paragraph (1)) be 
        exclusive, to affirm, modify, terminate, or set aside, in whole 
        or in part, the order of the Director. Review of such 
        proceedings shall be had as provided in chapter 7 of title 5, 
        United States Code. The judgment and decree of the court shall 
        be final, except that the same shall be subject to review by 
        the Supreme Court upon certiorari, as provided in section 1254 
        of title 28, United States Code.
            ``(3) Proceedings not treated as stay.--The commencement of 
        proceedings for judicial review under paragraph (2) shall not, 
        unless specifically ordered by the court, operate as a stay of 
        any order issued by the Director.''.
    (b) Conforming Amendments.--
            (1) 1992 act.--Section 1317(f) of the Housing and Community 
        Development Act of 1992 (12 U.S.C. 4517(f)) is amended by 
        striking ``section 1379B'' and inserting ``section 1379D''.
            (2) Fannie mae charter act.--The second sentence of 
        subsection (b) of section 308 of the Federal National Mortgage 
        Association Charter Act (12 U.S.C. 1723(b)) is amended by 
        striking ``The'' and inserting ``Except to the extent that 
        action under section 1377 of the Housing and Community 
        Development Act of 1992 temporarily results in a lesser number, 
        the''.
            (3) Freddie mac act.--The second sentence of subparagraph 
        (A) of section 303(a)(2) of the Federal Home Loan Mortgage 
        Corporation Act (12 U.S.C. 1452(a)(2)(A)) is amended by 
        striking ``The'' and inserting ``Except to the extent that 
        action under section 1377 of the Housing and Community 
        Development Act of 1992 temporarily results in a lesser number, 
        the''.

SEC. 167. CRIMINAL PENALTY.

    Subtitle C of title XIII of the Housing and Community Development 
Act of 1992 (12 U.S.C. 4631 et seq.) is amended by inserting after 
section 1377 (as added by the preceding provisions of this Act) the 
following new section:

``SEC. 1378. CRIMINAL PENALTY.

    ``Whoever, being subject to an order in effect under section 1377, 
without the prior written approval of the Director, knowingly 
participates, directly or indirectly, in any manner (including by 
engaging in an activity specifically prohibited in such an order) in 
the conduct of the affairs of any regulated entity shall, 
notwithstanding section 3571 of title 18, be fined not more than 
$1,000,000, imprisoned for not more than 5 years, or both.''.

SEC. 168. SUBPOENA AUTHORITY.

    Section 1379D(c) of the Housing and Community Development Act of 
1992 (12 U.S.C. 4641(c)), as so redesignated by section 165(a)(1) of 
this Act, is further amended--
            (1) by striking ``request the Attorney General of the 
        United States to'' and inserting ``, in the discretion of the 
        Director,'';
            (2) by inserting ``or request that the Attorney General of 
        the United States bring such an action,'' after ``District of 
        Columbia,''; and
            (3) by striking ``or may, under the direction and control 
        of the Attorney General, bring such an action''.

SEC. 169. CONFORMING AMENDMENTS.

    Subtitle C of title XIII of the Housing and Community Development 
Act of 1992 is amended--
            (1) in section 1372(c)(1) (12 U.S.C. 4632(c)), by striking 
        ``that enterprise'' and inserting ``that regulated entity'';
            (2) in section 1379 (12 U.S.C. 4637), as so redesignated by 
        section 165(a)(1) of this Act--
                    (A) by inserting ``, or of a regulated entity-
                affiliated party,'' before ``shall not affect''; and
                    (B) by striking ``such director or executive 
                officer'' each place such term appears and inserting 
                ``such director, executive officer, or regulated 
                entity-affiliated party'';
            (3) in section 1379A (12 U.S.C. 4638), as so redesignated 
        by section 165(a)(1) of this Act, by inserting ``or against a 
        regulated entity-affiliated party,'' before ``or impair'';
            (4) by striking ``An enterprise'' each place such term 
        appears in such subtitle and inserting ``A regulated entity'';
            (5) by striking ``an enterprise'' each place such term 
        appears in such subtitle and inserting ``a regulated entity'';
            (6) by striking ``the enterprise'' each place such term 
        appears in such subtitle and inserting ``the regulated 
        entity''; and
            (7) by striking ``any enterprise'' each place such term 
        appears in such subtitle and inserting ``any regulated 
        entity''.

                     Subtitle E--General Provisions

SEC. 181. BOARDS OF ENTERPRISES.

    (a) Fannie Mae.--
            (1) In general.--Subsection (b) of section 308 of the 
        Federal National Mortgage Association Charter Act (12 U.S.C. 
        1723(b)) is amended in the first sentence by striking 
        ``eighteen persons,'' and inserting ``not less than 7 and not 
        more than 15 persons,''.
            (2) Transitional provision.--The amendments made by 
        paragraph (1) shall not apply to any appointed position of the 
        board of directors of the Federal National Mortgage Association 
        until the expiration of the annual term for such position 
        during which the effective date under section 185 occurs.
    (b) Freddie Mac.--
            (1) In general.--Paragraph (2) of section 303(a) of the 
        Federal Home Loan Mortgage Corporation Act (12 U.S.C. 
        1452(a)(2) is amended in subparagraph (A) by striking 
        ``eighteen persons,'' and inserting ``not less than 7 and not 
        more than 15 persons,''.
            (2) Transitional provision.--The amendments made by 
        paragraph (1) shall not apply to any appointed position of the 
        Board of Directors of the Federal Home Loan Mortgage 
        Corporation until the expiration of the annual term for such 
        position during which the effective date under section 185 
        occurs.

SEC. 182. REPORT ON PORTFOLIO OPERATIONS, SAFETY AND SOUNDNESS, AND 
              MISSION OF ENTERPRISES.

    Not later than the expiration of the 12-month period beginning on 
the effective date under section 185, the Director of the Federal 
Housing Finance Agency shall submit a report to the Congress which 
shall include--
            (1) a description of the portfolio holdings of the 
        enterprises (as such term is defined in section 1303 of the 
        Housing and Community Development Act of 1992 (12 U.S.C. 4502) 
        in mortgages (including whole loans and mortgage-backed 
        securities), non-mortgages, and other assets;
            (2) a description of the risk implications for the 
        enterprises of such holdings and the consequent risk management 
        undertaken by the enterprises (including the use of derivatives 
        for hedging purposes), compared with off-balance sheet 
        liabilities of the enterprises (including mortgage-backed 
        securities guaranteed by the enterprises);
            (3) an analysis of portfolio holdings for safety and 
        soundness purposes;
            (4) an assessment of whether portfolio holdings fulfill the 
        mission purposes of the enterprises under the Federal National 
        Mortgage Association Charter Act and the Federal Home Loan 
        Mortgage Corporation Act; and
            (5) an analysis of the potential systemic risk implications 
        for the enterprises, the housing and capital markets, and the 
        financial system of portfolio holdings, and whether such 
        holdings should be limited or reduced over time.

SEC. 183. CONFORMING AND TECHNICAL AMENDMENTS.

    (a) 1992 Act.--Title XIII of the Housing and Community Development 
Act of 1992 is amended by striking section 1383 (12 U.S.C. 1451 note).
    (b) Title 18, United States Code.--Section 1905 of title 18, United 
States Code, is amended by striking ``Office of Federal Housing 
Enterprise Oversight'' and inserting ``Federal Housing Finance 
Agency''.
    (c) Flood Disaster Protection Act of 1973.--Section 102(f)(3)(A) of 
the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a(f)(3)(A)) is 
amended by striking ``Director of the Office of Federal Housing 
Enterprise Oversight of the Department of Housing and Urban 
Development'' and inserting ``Director of the Federal Housing Finance 
Agency''.
    (d) Department of Housing and Urban Development Act.--Section 5 of 
the Department of Housing and Urban Development Act (42 U.S.C. 3534) is 
amended by striking subsection (d).
    (e) Title 5, United States Code.--
            (1) Director's pay rate.--Section 5313 of title 5, United 
        States Code, is amended by striking the item relating to the 
        Director of the Office of Federal Housing Enterprise Oversight, 
        Department of Housing and Urban Development and inserting the 
        following new item:
    ``Director of the Federal Housing Finance Agency.''.
            (2) Deputy directors' pay rate.--Section 5314 of title 5, 
        United States Code, is amended by adding at the end the 
        following new item:
    ``Deputy Directors, Federal Housing Finance Agency (3).''.
            (3) Exclusion from senior executive service.--Section 
        3132(a)(1)(D) of title 5, United States Code, is amended by 
        striking ``the Office of Federal Housing Enterprise Oversight 
        of the Department of Housing and Urban Development'' and 
        inserting ``the Federal Housing Finance Agency''.
    (f) Inspector General Act of 1978.--Section 8G(a)(2) of the 
Inspector General Act of 1978 (5 U.S.C. App.) is amended by striking 
``Federal Housing Finance Board'' and inserting ``Federal Housing 
Finance Agency''.
    (g) Federal Deposit Insurance Act.--Section 11(t)(2)(A) of the 
Federal Deposit Insurance Act (12 U.S.C.1821(t)(2)(A)) is amended by 
adding at the end the following new clause:
                            ``(vii) The Federal Housing Finance 
                        Agency.''.
    (h) 1997 Emergency Supplemental Appropriations Act.--Section 10001 
of the 1997 Emergency Supplemental Appropriations Act for Recovery From 
Natural Disasters, and for Overseas Peacekeeping Efforts, Including 
Those In Bosnia (42 U.S.C. 3548) is amended--
            (1) by striking ``the Government National Mortgage 
        Association, and the Office of Federal Housing Enterprise 
        Oversight'' and inserting ``and the Government National 
        Mortgage Association''; and
            (2) by striking ``, the Government National Mortgage 
        Association, or the Office of Federal Housing Enterprise 
        Oversight'' and inserting ``or the Government National Mortgage 
        Association''.
    (i) National Homeownership Trust Act.--Section 302(b)(4) of the 
Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 
12851(b)(4)) is amended by striking ``the chairperson of the Federal 
Housing Finance Board'' and inserting ``the Director of the Federal 
Housing Finance Agency''.

SEC. 184. STUDY OF ALTERNATIVE SECONDARY MARKET SYSTEMS.

    (a) In General.--The Director of the Federal Housing Finance 
Agency, in consultation with the Board of Governors of the Federal 
Reserve System, the Secretary of the Treasury, and the Secretary of 
Housing and Urban Development, shall conduct a comprehensive study of 
the effects on financial and housing finance markets of alternatives to 
the current secondary market system for housing finance, taking into 
consideration changes in the structure of financial and housing finance 
markets and institutions since the creation of the Federal National 
Mortgage Association and the Federal Home Loan Mortgage Corporation.
    (b) Contents.--The study under this section shall--
            (1) include, among the alternatives to the current 
        secondary market system analyzed--
                    (A) repeal of the chartering Acts for the Federal 
                National Mortgage Association and the Federal Home Loan 
                Mortgage Corporation;
                    (B) establishing bank-like mechanisms for granting 
                new charters for limited purposed mortgage 
                securitization entities;
                    (C) permitting the Director of the Federal Housing 
                Finance Agency to grant new charters for limited 
                purpose mortgage securitization entities, which shall 
                include analyzing the terms on which such charters 
                should be granted, including whether such charters 
                should be sold, or whether such charters and the 
                charters for the Federal National Mortgage Association 
                and the Federal Home Loan Mortgage Corporation should 
                be taxed or otherwise assessed a monetary price; and
                    (D) such other alternatives as the Director 
                considers appropriate;
            (2) examine all of the issues involved in making the 
        transition to a completely private secondary mortgage market 
        system;
            (3) examine the technological advancements the private 
        sector has made in providing liquidity in the secondary 
        mortgage market and how such advancements have affected 
        liquidity in the secondary mortgage market; and
            (4) examine how taxpayers would be impacted by each 
        alternative system, including the complete privatization of the 
        Federal National Mortgage Association and the Federal Home Loan 
        Mortgage Corporation.
    (c) Report.--The Director of the Federal Housing Finance Agency 
shall submit a report to the Congress on the study not later than the 
expiration of the 12-month period beginning on the effective date under 
section 185.

SEC. 185. EFFECTIVE DATE.

    Except as specifically provided otherwise in this title, this title 
shall take effect on and the amendments made by this title shall take 
effect on, and shall apply beginning on, the expiration of the 6-month 
period beginning on the date of the enactment of this Act.

                   TITLE II--FEDERAL HOME LOAN BANKS

SEC. 201. DEFINITIONS.

    Section 2 of the Federal Home Loan Bank Act (12 U.S.C. 1422) is 
amended--
            (1) by striking paragraphs (1), (10), and (11);
            (2) by redesignating paragraphs (2) through (9) as 
        paragraphs (1) through (8), respectively;
            (3) by redesignating paragraphs (12) and (13) as paragraphs 
        (9) and (10), respectively; and
            (4) by adding at the end the following:
            ``(11) Director.--The term `Director' means the Director of 
        the Federal Housing Finance Agency.
            ``(12) Agency.--The term `Agency' means the Federal Housing 
        Finance Agency.''.

SEC. 202. DIRECTORS.

    (a) Election.--Section 7 of the Federal Home Loan Bank Act (12 
U.S.C. 1427) is amended--
            (1) by striking subsection (a) and inserting the following:
    ``(a) Number; Election; Qualifications; Conflicts of Interest.--
            ``(1) In general.--The management of each Federal Home Loan 
        Bank shall be vested in a board of 13 directors, or such other 
        number as the Director determines appropriate, each of whom 
        shall be a citizen of the United States. All directors of a 
        Bank who are not independent members pursuant to paragraph (3) 
        shall be elected by the members.
            ``(2) Member directors.--A majority of the directors of 
        each Bank shall be officers or directors of a member of such 
        Bank that is located in the district in which such Bank is 
        located.
            ``(3) Independent directors.--At least two-fifths of the 
        directors of each Bank shall be independent directors, who 
        shall be appointed by the Director of the Federal Housing 
        Finance Agency from a list of individuals recommended made by 
        the Federal Housing Enterprise Board, and shall meet the 
        following criteria:
                    ``(A) In general.--Each independent director shall 
                be a bona fide resident of the district in which such 
                Bank is located.
                    ``(B) Public interest directors.--At least 2 of the 
                independent directors under this paragraph of each Bank 
                shall be representatives chosen from organizations with 
                more than a 2-year history of representing consumer or 
                community interests on banking services, credit needs, 
                housing, community development, economic development, 
                or financial consumer protections.
                    ``(C) Other directors.--Each independent director 
                that is not a public interest director under 
                subparagraph (B) shall have demonstrated knowledge of, 
                or experience in, financial management, auditing and 
                accounting, risk management practices, derivatives, 
                project development, or organizational management, or 
                such other knowledge or expertise as the Director may 
                provide by regulation.
                    ``(D) Conflicts of interest.--Notwithstanding 
                subsection (f)(2), an independent director under this 
                paragraph of a Bank may not, during such director's 
                term of office, serve as an officer of any Federal Home 
                Loan Bank or as a director or officer of any member of 
                a Bank.'';
            (2) in the first sentence of subsection (b), by striking 
        ``directorship'' and inserting ``member directorship pursuant 
        to subsection (a)(2)'';
            (3) in subsection (c), by striking the second, third, and 
        fifth sentences; and
            (4) by striking ``elective'' each place such term appears 
        (except in subsections (e) and (f)).
    (b) Terms.--
            (1) In general.--Section 7(d) of the Federal Home Loan Bank 
        Act (12 U.S.C. 1427(i)) is amended--
                    (A) in the first sentence, by striking ``3 years'' 
                and inserting ``4 years''; and
                    (B) in the second sentence--
                            (i) by striking ``Federal Home Loan Bank 
                        System Modernization Act of 1999'' and 
                        inserting ``Federal Housing Finance Reform Act 
                        of 2007''; and
                            (ii) by striking ``1/3'' and inserting ``1/
                        4''.
            (2) Savings provision.--The amendments made by paragraph 
        (1) shall not apply to the term of office of any director of a 
        Federal home loan bank who is serving as of the effective date 
        of this Act under section 211, including any director elected 
        to fill a vacancy in any such office.
    (c) Continued Service of Independent Directors After Expiration of 
Term.--Section 7(f)(2) of the Federal Home Loan Bank Act (12 U.S.C. 
1427(f)(2)) is amended--
            (1) in the second sentence, by striking ``or the term of 
        such office expires, whichever comes first''; and
            (2) by adding at the end the following new sentence: ``An 
        appointive Bank director may continue to serve as a director 
        after the expiration of the term of such director until a 
        successor is appointed.''.
    (d) Compensation.--Subsection (i) of section 7 of the Federal Home 
Loan Bank Act (12 U.S.C. 1427(i)) is amended to read as follows:
    ``(i) Directors' Compensation.--
            ``(1) In general.--Each Federal home loan bank may pay the 
        directors on the board of directors for the bank reasonable and 
        appropriate compensation for the time required of such 
        directors, and reasonable and appropriate expenses incurred by 
        such directors, in connection with service on the board of 
        directors, in accordance with resolutions adopted by the board 
        of directors and subject to the approval of the Director.
            ``(2) Annual report by the board.--The Director shall 
        include, in the annual report submitted to the Congress 
        pursuant to section 1319B of the Federal Housing Enterprises 
        Financial Safety and Soundness Act of 1992, information 
        regarding the compensation and expenses paid by the Federal 
        home loan banks to the directors on the boards of directors of 
        the banks.''.
    (e) Transition Rule.--Any member of the board of directors of a 
Federal Home Loan Bank serving as of the effective date under section 
211 may continue to serve as a member of such board of directors for 
the remainder of the term of such office as provided in section 7 of 
the Federal Home Loan Bank Act, as in effect before such effective 
date.

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

    The Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.), other than 
in provisions of that Act added or amended otherwise by this Act, is 
amended--
            (1) by striking sections 2A and 2B (12 U.S.C. 1422a, 
        1422b);
            (2) in section 6 (12 U.S.C. 1426(b)(1))--
                    (A) in subsection (b)(1), in the matter preceding 
                subparagraph (A), by striking ``Finance Board 
                approval'' and inserting ``approval by the Director''; 
                and
                    (B) in each of subsections (c)(4)(B) and (d)(2), by 
                striking ``Finance Board regulations'' each place that 
                term appears and inserting ``regulations of the 
                Director'';
            (3) in section 8 (12 U.S.C. 1428), in the section heading, 
        by striking ``by the board'';
            (4) in section 10(b) (12 U.S.C. 1430), by striking ``by 
        formal resolution'';
            (5) in section 11 (12 U.S.C. 1431)--
                    (A) in subsection (b)--
                            (i) in the first sentence--
                                    (I) by striking ``The Board'' and 
                                inserting ``The Office of Finance, as 
                                agent for the Banks,''; and
                                    (II) by striking ``the Board'' and 
                                inserting ``such Office''; and
                            (ii) in the second and fourth sentences, by 
                        striking ``the Board'' each place such term 
                        appears and inserting ``the Office of 
                        Finance'';
                    (B) in subsection (c)--
                            (i) by striking ``the Board'' the first 
                        place such term appears and inserting ``the 
                        Office of Finance, as agent for the Banks,''; 
                        and
                            (ii) by striking ``the Board'' the second 
                        place such term appears and inserting ``such 
                        Office''; and
                    (C) in subsection (f)--
                            (i) by striking the two commas after 
                        ``permit'' and inserting ``or''; and
                            (ii) by striking the comma after 
                        ``require'';
            (6) in section 15 (12 U.S.C. 1435), by inserting ``or the 
        Director'' after ``the Board'';
            (7) in section 18 (12 U.S.C. 1438), by striking subsection 
        (b);
            (8) in section 21 (12 U.S.C. 1441)--
                    (A) in subsection (b)--
                            (i) in paragraph (5), by striking 
                        ``Chairperson of the Federal Housing Finance 
                        Board'' and inserting ``Director''; and
                            (ii) in the heading for paragraph (8), by 
                        striking ``federal housing finance board'' and 
                        inserting ``director''; and
                    (B) in subsection (i), in the heading for paragraph 
                (2), by striking ``Federal housing finance board'' and 
                inserting ``Director'';
            (9) in section 23 (12 U.S.C. 1443), by striking ``Board of 
        Directors of the Federal Housing Finance Board'' and inserting 
        ``Director'';
            (10) by striking ``the Board'' each place such term appears 
        in such Act (except in section 15 (12 U.S.C. 1435), section 
        21(f)(2) (12 U.S.C. 1441(f)(2)), subsections (a), (k)(2)(B)(i), 
        and (n)(6)(C)(ii) of section 21A (12 U.S.C. 1441a), subsections 
        (e)(7), (f)(2)(C), and (k)(7)(B)(ii) of section 21B (12 U.S.C. 
        1441b), and the first two places such term appears in section 
        22 (12 U.S.C. 1442)) and inserting ``the Director'';
            (11) by striking ``The Board'' each place such term appears 
        in such Act (except in sections 7(e) (12 U.S.C. 1427(e)), and 
        11(b) (12 U.S.C. 1431(b)) and inserting ``The Director'';
            (12) by striking ``the Board's'' each place such term 
        appears in such Act and inserting ``the Director's'';
            (13) by striking ``The Board's'' each place such term 
        appears in such Act and inserting ``The Director's'';
            (14) by striking ``The Finance Board'' each place such term 
        appears in such Act and inserting ``The Director'';
            (15) by striking ``the Finance Board'' each place such term 
        appears in such Act and inserting ``the Director'';
            (16) by striking ``Federal Housing Finance Board'' each 
        place such term appears and inserting ``Director'';
            (17) in section 11(i) (12 U.S.C. 1431(i), by striking ``the 
        Chairperson of''; and
            (18) in section 21(e)(9) (12 U.S.C. 1441(e)(9)), by 
        striking ``Chairperson of the''.

SEC. 204. JOINT ACTIVITIES OF BANKS.

    Section 11 of the Federal Home Loan Bank Act (12 U.S.C. 1431) is 
amended by adding at the end the following new subsection:
    ``(l) Joint Activities.--Subject to the regulation of the Director, 
any two or more Federal Home Loan Banks may establish a joint office 
for the purpose of performing functions for, or providing services to, 
the Banks on a common or collective basis, or may require that the 
Office of Finance perform such functions or services, but only if the 
Banks are otherwise authorized to perform such functions or services 
individually.''.

SEC. 205. SHARING OF INFORMATION BETWEEN FEDERAL HOME LOAN BANKS.

    (a) In General.--The Federal Home Loan Bank Act is amended by 
inserting after section 20 (12 U.S.C. 1440) the following new section:

``SEC. 20A. SHARING OF INFORMATION BETWEEN FEDERAL HOME LOAN BANKS.

    ``(a) Regulatory Authority.--The Director shall prescribe such 
regulations as may be necessary to ensure that each Federal Home Loan 
Bank has access to information that the Bank needs to determine the 
nature and extent of its joint and several liability.
    ``(b) No Waiver of Privilege.--The Director shall not be deemed to 
have waived any privilege applicable to any information concerning a 
Federal Home Loan Bank by transferring, or permitting the transfer of, 
that information to any other Federal Home Loan Bank for the purpose of 
enabling the recipient to evaluate the nature and extent of its joint 
and several liability.''.
    (b) Regulations.--The regulations required under the amendment made 
by subsection (a) shall be issued in final form not later than 6 months 
after the effective date under section 211 of this Act.

SEC. 206. REORGANIZATION OF BANKS AND VOLUNTARY MERGER.

    Section 26 of the Federal Home Loan Bank Act (12 U.S.C. 1446) is 
amended--
            (1) by inserting ``(a) reorganization.--'' before 
        ``Whenever''; and
            (2) by striking ``liquidated or'' each place such phrase 
        appears;
            (3) by striking ``liquidation or''; and
            (4) by adding at the end the following new subsection:
    ``(b) Voluntary Mergers.--Any Bank may, with the approval of the 
Director, and the approval of the boards of directors of the Banks 
involved, merge with another Bank. The Director shall promulgate 
regulations establishing the conditions and procedures for the 
consideration and approval of any such voluntary merger, including the 
procedures for Bank member approval.''.

SEC. 207. SECURITIES AND EXCHANGE COMMISSION DISCLOSURE.

    (a) In General.--The Federal Home Loan Banks shall be exempt from 
compliance with--
            (1) sections 13(e), 14(a), 14(c), and 17A of the Securities 
        Exchange Act of 1934 and related Commission regulations; and
            (2) section 15 of that Act and related Securities and 
        Exchange Commission regulations with respect to transactions in 
        capital stock of the Banks.
    (b) Member Exemption.--The members of the Federal Home Loan Banks 
shall be exempt from compliance with sections 13(d), 13(f), 13(g), 
14(d), and 16 of the Securities Exchange Act of 1934 and related 
Securities and Exchange Commission regulations with respect to their 
ownership of, or transactions in, capital stock of the Federal Home 
Loan Banks.
    (c) Exempted and Government Securities.--
            (1) Capital stock.--The capital stock issued by each of the 
        Federal Home Loan Banks under section 6 of the Federal Home 
        Loan Bank Act are--
                    (A) exempted securities within the meaning of 
                section 3(a)(2) of the Securities Act of 1933; and
                    (B) ``exempted securities'' within the meaning of 
                section 3(a)(12)(A) of the Securities Exchange Act of 
                1934.
            (2) Other obligations.--The debentures, bonds, and other 
        obligations issued under section 11 of the Federal Home Loan 
        Bank Act are--
                    (A) exempted securities within the meaning of 
                section 3(a)(2) of the Securities Act of 1933;
                    (B) ``government securities'' within the meaning of 
                section 3(a)(42) of the Securities Exchange Act of 
                1934;
                    (C) excluded from the definition of ``government 
                securities broker'' within section 3(a)(43) of the 
                Securities Exchange Act of 1934;
                    (D) excluded from the definition of ``government 
                securities dealer'' within section 3(a)(44) of the 
                Securities Exchange Act of 1934; and
                    (E) ``government securities'' within the meaning of 
                section 2(a)(16) of the Investment Company Act of 1940.
    (d) Exemption From Reporting Requirements.--The Federal Home Loan 
Banks shall be exempt from periodic reporting requirements pertaining 
to--
            (1) the disclosure of related party transactions that occur 
        in the ordinary course of business of the Banks with their 
        members; and
            (2) the disclosure of unregistered sales of equity 
        securities.
    (e) Tender Offers.--The Securities and Exchange Commission's rules 
relating to tender offers shall not apply in connection with 
transactions in capital stock of the Federal Home Loan Banks.
    (f) Regulations.--In issuing final regulations to implement 
provisions of this section, the Securities and Exchange Commission 
shall consider the distinctive characteristics of the Federal Home Loan 
Banks when evaluating the accounting treatment with respect to the 
payment to Resolution Funding Corporation, the role of the combined 
financial statements of the twelve Banks, the accounting classification 
of redeemable capital stock, and the accounting treatment related to 
the joint and several nature of the obligations of the Banks.

SEC. 208. COMMUNITY FINANCIAL INSTITUTION MEMBERS.

    (a) Total Asset Requirement.--Paragraph (10) of section 2 of the 
Federal Home Loan Bank Act (12 U.S.C. 1422(10)), as so redesignated by 
section 201(3) of this Act, is amended by striking ``$500,000,000'' 
each place such term appears and inserting ``$1,000,000,000''.
    (b) Use of Advances for Community Development Activities.--Section 
10(a) of the Federal Home Loan Bank Act (12 U.S.C. 1430(a)) is 
amended--
            (1) in paragraph (2)(B)--
                    (A) by striking ``and''; and
                    (B) by inserting ``, and community development 
                activities'' before the period at the end;
            (2) in paragraph (3)(E), by inserting ``or community 
        development activities'' after ``agriculture,''; and
            (3) in paragraph (6)--
                    (A) by striking ``and''; and
                    (B) by inserting ``, and `community development 
                activities''' before ``shall''.

SEC. 209. TECHNICAL AND CONFORMING AMENDMENTS.

    (a) Right to Financial Privacy Act of 1978.--Section 1113(o) of the 
Right to Financial Privacy Act of 1978 (12 U.S.C. 3413(o)) is amended--
            (1) by striking ``Federal Housing Finance Board'' and 
        inserting ``Federal Housing Finance Agency''; and
            (2) by striking ``Federal Housing Finance Board's'' and 
        inserting ``Federal Housing Finance Agency's''.
    (b) Riegle Community Development and Regulatory Improvement Act of 
1994.--Section 117(e) of the Riegle Community Development and 
Regulatory Improvement Act of 1994 (12 U.S.C. 4716(e)) is amended by 
striking ``Federal Housing Finance Board'' and inserting ``Federal 
Housing Finance Agency''.
    (c) Title 18, United States Code.--Title 18, United States Code, is 
amended by striking ``Federal Housing Finance Board'' each place such 
term appears in each of sections 212, 657, 1006, 1014, and inserting 
``Federal Housing Finance Agency''.
    (d) MAHRA Act of 1997.--Section 517(b)(4) of the Multifamily 
Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f 
note) is amended by striking ``Federal Housing Finance Board'' and 
inserting ``Federal Housing Finance Agency''.
    (e) Title 44, United States Code.--Section 3502(5) of title 44, 
United States Code, is amended by striking ``Federal Housing Finance 
Board'' and inserting ``Federal Housing Finance Agency''.
    (f) Access to Local TV Act of 2000.--Section 1004(d)(2)(D)(iii) of 
the Launching Our Communities' Access to Local Television Act of 2000 
(47 U.S.C. 1103(d)(2)(D)(iii)) is amended by striking ``Office of 
Federal Housing Enterprise Oversight, the Federal Housing Finance 
Board'' and inserting ``Federal Housing Finance Agency''.

SEC. 210. STUDY OF AFFORDABLE HOUSING PROGRAM USE FOR LONG-TERM CARE 
              FACILITIES.

    The Comptroller General shall conduct a study of the use of 
affordable housing programs of the Federal home loan banks under 
section 10(j) of the Federal Home Loan Bank Act to determine how and 
the extent to which such programs are used to assist long-term care 
facilities for low- and moderate-income individuals, and the 
effectiveness and adequacy of such assistance in meeting the needs of 
affected communities. The study shall examine the applicability of such 
use to the affordable housing programs required to be established by 
the enterprises pursuant to the amendment made by section 128 of this 
Act. The Comptroller General shall submit a report to the Director of 
the Federal Housing Finance Agency and the Congress regarding the 
results of the study not later than the expiration of the 1-year period 
beginning on the date of the enactment of this Act. This section shall 
take effect on the date of the enactment of this Act.

SEC. 211. EFFECTIVE DATE.

    Except as specifically provided otherwise in this title, this title 
shall take effect on and the amendments made by this title shall take 
effect on, and shall apply beginning on, the expiration of the 6-month 
period beginning on the date of the enactment of this Act.

TITLE III--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY OF OFFICE OF 
 FEDERAL HOUSING ENTERPRISE OVERSIGHT, FEDERAL HOUSING FINANCE BOARD, 
            AND DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

       Subtitle A--Office of Federal Housing Enterprise Oversight

SEC. 301. ABOLISHMENT OF OFHEO.

    (a) In General.--Effective at the end of the 6-month period 
beginning on the date of the enactment of this Act, the Office of 
Federal Housing Enterprise Oversight of the Department of Housing and 
Urban Development and the positions of the Director and Deputy Director 
of such Office are abolished.
    (b) Disposition of Affairs.--During the 6-month period beginning on 
the date of the enactment of this Act, the Director of the Office of 
Federal Housing Enterprise Oversight shall, for the purpose of winding 
up the affairs of the Office of Federal Housing Enterprise Oversight 
and in addition to carrying out its other responsibilities under law--
            (1) manage the employees of such Office and provide for the 
        payment of the compensation and benefits of any such employee 
        which accrue before the effective date of the transfer of such 
        employee pursuant to section 303; and
            (2) may take any other action necessary for the purpose of 
        winding up the affairs of the Office.
    (c) Status of Employees Before Transfer.--The amendments made by 
title I and the abolishment of the Office of Federal Housing Enterprise 
Oversight under subsection (a) of this section may not be construed to 
affect the status of any employee of such Office as employees of an 
agency of the United States for purposes of any other provision of law 
before the effective date of the transfer of any such employee pursuant 
to section 303.
    (d) Use of Property and Services.--
            (1) Property.--The Director of the Federal Housing Finance 
        Agency may use the property of the Office of Federal Housing 
        Enterprise Oversight to perform functions which have been 
        transferred to the Director of the Federal Housing Finance 
        Agency for such time as is reasonable to facilitate the orderly 
        transfer of functions transferred pursuant to any other 
        provision of this Act or any amendment made by this Act to any 
        other provision of law.
            (2) Agency services.--Any agency, department, or other 
        instrumentality of the United States, and any successor to any 
        such agency, department, or instrumentality, which was 
        providing supporting services to the Office of Federal Housing 
        Enterprise Oversight before the expiration of the period under 
        subsection (a) in connection with functions that are 
        transferred to the Director of the Federal Housing Finance 
        Agency shall--
                    (A) continue to provide such services, on a 
                reimbursable basis, until the transfer of such 
                functions is complete; and
                    (B) consult with any such agency to coordinate and 
                facilitate a prompt and reasonable transition.
    (e) Savings Provisions.--
            (1) Existing rights, duties, and obligations not 
        affected.--Subsection (a) shall not affect the validity of any 
        right, duty, or obligation of the United States, the Director 
        of the Office of Federal Housing Enterprise Oversight, or any 
        other person, which--
                    (A) arises under or pursuant to the title XIII of 
                the Housing and Community Development Act of 1992, the 
                Federal National Mortgage Association Charter Act, the 
                Federal Home Loan Mortgage Corporation Act, or any 
                other provision of law applicable with respect to such 
                Office; and
                    (B) existed on the day before the abolishment under 
                subsection (a) of this section.
            (2) Continuation of suits.--No action or other proceeding 
        commenced by or against the Director of the Office of Federal 
        Housing Enterprise Oversight in connection with functions that 
        are transferred to the Director of the Federal Housing Finance 
        Agency shall abate by reason of the enactment of this Act, 
        except that the Director of the Federal Housing Finance Agency 
        shall be substituted for the Director of the Office of Federal 
        Housing Enterprise Oversight as a party to any such action or 
        proceeding.

SEC. 302. CONTINUATION AND COORDINATION OF CERTAIN REGULATIONS.

    All regulations, orders, determinations, and resolutions that--
            (1) were issued, made, prescribed, or allowed to become 
        effective by--
                    (A) the Office of Federal Housing Enterprise 
                Oversight; or
                    (B) a court of competent jurisdiction and that 
                relate to functions transferred by this subtitle; and
            (2) are in effect on the date of the abolishment under 
        section 301(a) of this Act, shall remain in effect according to 
        the terms of such regulations, orders, determinations, and 
        resolutions, and shall be enforceable by or against the 
        Director of the Federal Housing Finance Agency until modified, 
        terminated, set aside, or superseded in accordance with 
        applicable law by such Director, as the case may be, any court 
        of competent jurisdiction, or operation of law.

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

    (a) Transfer.--Each employee of the Office of Federal Housing 
Enterprise Oversight shall be transferred to the Federal Housing 
Finance Agency for employment no later than the date of the abolishment 
under section 301(a) of this Act and such transfer shall be deemed a 
transfer of function for purposes of section 3503 of title 5, United 
States Code.
    (b) Guaranteed Positions.--Each employee transferred under 
subsection (a) shall be guaranteed a position with the same status, 
tenure, grade, and pay as that held on the day immediately preceding 
the transfer. Each such employee holding a permanent position shall not 
be involuntarily separated or reduced in grade or compensation for 12 
months after the date of transfer, except for cause or, if the employee 
is a temporary employee, separated in accordance with the terms of the 
appointment.
    (c) Appointment Authority for Excepted Service Employees.--
            (1) In general.--In the case of employees occupying 
        positions in the excepted service, any appointment authority 
        established pursuant to law or regulations of the Office of 
        Personnel Management for filling such positions shall be 
        transferred, subject to paragraph (2).
            (2) Decline of transfer.--The Director of the Federal 
        Housing Finance Agency may decline a transfer of authority 
        under paragraph (1) (and the employees appointed pursuant 
        thereto) to the extent that such authority relates to positions 
        excepted from the competitive service because of their 
        confidential, policy-making, policy-determining, or policy-
        advocating character.
    (d) Reorganization.--If the Director of the Federal Housing Finance 
Agency determines, after the end of the 1-year period beginning on the 
date of the abolishment under section 301(a), that a reorganization of 
the combined work force is required, that reorganization shall be 
deemed a major reorganization for purposes of affording affected 
employees retirement under section 8336(d)(2) or 8414(b)(1)(B) of title 
5, United States Code.
    (e) Employee Benefit Programs.--Any employee of the Office of 
Federal Housing Enterprise Oversight accepting employment with the 
Director of the Federal Housing Finance Agency as a result of a 
transfer under subsection (a) may retain for 12 months after the date 
such transfer occurs membership in any employee benefit program of the 
Federal Housing Finance Agency or the Office of Federal Housing 
Enterprise Oversight, as applicable, including insurance, to which such 
employee belongs on the date of the abolishment under section 301(a) 
if--
            (1) the employee does not elect to give up the benefit or 
        membership in the program; and
            (2) the benefit or program is continued by the Director of 
        the Federal Housing Finance Agency,
The difference in the costs between the benefits which would have been 
provided by such agency and those provided by this section shall be 
paid by the Director of the Federal Housing Finance Agency. If any 
employee elects to give up membership in a health insurance program or 
the health insurance program is not continued by such Director, the 
employee shall be permitted to select an alternate Federal health 
insurance program within 30 days of such election or notice, without 
regard to any other regularly scheduled open season.

SEC. 304. TRANSFER OF PROPERTY AND FACILITIES.

    Upon the abolishment under section 301(a), all property of the 
Office of Federal Housing Enterprise Oversight shall transfer to the 
Director of the Federal Housing Finance Agency.

               Subtitle B--Federal Housing Finance Board

SEC. 321. ABOLISHMENT OF THE FEDERAL HOUSING FINANCE BOARD.

    (a) In General.--Effective at the end of the 6-month period 
beginning on the date of enactment of this Act, the Federal Housing 
Finance Board (in this title referred to as the ``Board'') is 
abolished.
    (b) Disposition of Affairs.--During the 6-month period beginning on 
the date of enactment of this Act, the Board, for the purpose of 
winding up the affairs of the Board and in addition to carrying out its 
other responsibilities under law--
            (1) shall manage the employees of such Board and provide 
        for the payment of the compensation and benefits of any such 
        employee which accrue before the effective date of the transfer 
        of such employee under section 323; and
            (2) may take any other action necessary for the purpose of 
        winding up the affairs of the Board.
    (c) Status of Employees Before Transfer.--The amendments made by 
titles I and II and the abolishment of the Board under subsection (a) 
may not be construed to affect the status of any employee of such Board 
as employees of an agency of the United States for purposes of any 
other provision of law before the effective date of the transfer of any 
such employee under section 323.
    (d) Use of Property and Services.--
            (1) Property.--The Director of the Federal Housing Finance 
        Agency may use the property of the Board to perform functions 
        which have been transferred to the Director of the Federal 
        Housing Finance Agency for such time as is reasonable to 
        facilitate the orderly transfer of functions transferred under 
        any other provision of this Act or any amendment made by this 
        Act to any other provision of law.
            (2) Agency services.--Any agency, department, or other 
        instrumentality of the United States, and any successor to any 
        such agency, department, or instrumentality, which was 
        providing supporting services to the Board before the 
        expiration of the period under subsection (a) in connection 
        with functions that are transferred to the Director of the 
        Federal Housing Finance Agency shall--
                    (A) continue to provide such services, on a 
                reimbursable basis, until the transfer of such 
                functions is complete; and
                    (B) consult with any such agency to coordinate and 
                facilitate a prompt and reasonable transition.
    (e) Savings Provisions.--
            (1) Existing rights, duties, and obligations not 
        affected.--Subsection (a) shall not affect the validity of any 
        right, duty, or obligation of the United States, a member of 
        the Board, or any other person, which--
                    (A) arises under the Federal Home Loan Bank Act or 
                any other provision of law applicable with respect to 
                such Board; and
                    (B) existed on the day before the effective date of 
                the abolishment under subsection (a).
            (2) Continuation of suits.--No action or other proceeding 
        commenced by or against the Board in connection with functions 
        that are transferred to the Director of the Federal Housing 
        Finance Agency shall abate by reason of the enactment of this 
        Act, except that the Director of the Federal Housing Finance 
        Agency shall be substituted for the Board or any member thereof 
        as a party to any such action or proceeding.

SEC. 322. CONTINUATION AND COORDINATION OF CERTAIN REGULATIONS.

    (a) In General.--All regulations, orders, and determinations 
described under subsection (b) shall remain in effect according to the 
terms of such regulations, orders, determinations, and resolutions, and 
shall be enforceable by or against the Director of the Federal Housing 
Finance Agency until modified, terminated, set aside, or superseded in 
accordance with applicable law by such Director, any court of competent 
jurisdiction, or operation of law.
    (b) Applicability.--A regulation, order, or determination is 
described under this subsection if it--
            (1) was issued, made, prescribed, or allowed to become 
        effective by--
                    (A) the Board; or
                    (B) a court of competent jurisdiction and relates 
                to functions transferred by this subtitle; and
            (2) is in effect on the effective date of the abolishment 
        under section 321(a).

SEC. 323. TRANSFER AND RIGHTS OF EMPLOYEES OF THE FEDERAL HOUSING 
              FINANCE BOARD.

    (a) Transfer.--Each employee of the Board shall be transferred to 
the Federal Housing Finance Agency for employment not later than the 
effective date of the abolishment under section 321(a), and such 
transfer shall be deemed a transfer of function for purposes of section 
3503 of title 5, United States Code.
    (b) Guaranteed Positions.--Each employee transferred under 
subsection (a) shall be guaranteed a position with the same status, 
tenure, grade, and pay as that held on the day immediately preceding 
the transfer. Each such employee holding a permanent position shall not 
be involuntarily separated or reduced in grade or compensation for 12 
months after the date of transfer, except for cause or, if the employee 
is a temporary employee, separated in accordance with the terms of the 
appointment.
    (c) Appointment Authority for Excepted and Senior Executive Service 
Employees.--
            (1) In general.--In the case of employees occupying 
        positions in the excepted service or the Senior Executive 
        Service, any appointment authority established under law or by 
        regulations of the Office of Personnel Management for filling 
        such positions shall be transferred, subject to paragraph (2).
            (2) Decline of transfer.--The Director of the Federal 
        Housing Finance Agency may decline a transfer of authority 
        under paragraph (1) to the extent that such authority relates 
        to positions excepted from the competitive service because of 
        their confidential, policymaking, policy-determining, or 
        policy-advocating character, and noncareer positions in the 
        Senior Executive Service (within the meaning of section 
        3132(a)(7) of title 5, United States Code).
    (d) Reorganization.--If the Director of the Federal Housing Finance 
Agency determines, after the end of the 1-year period beginning on the 
effective date of the abolishment under section 321(a), that a 
reorganization of the combined workforce is required, that 
reorganization shall be deemed a major reorganization for purposes of 
affording affected employees retirement under section 8336(d)(2) or 
8414(b)(1)(B) of title 5, United States Code.
    (e) Employee Benefit Programs.--
            (1) In general.--Any employee of the Board accepting 
        employment with the Federal Housing Finance Agency as a result 
        of a transfer under subsection (a) may retain for 12 months 
        after the date on which such transfer occurs membership in any 
        employee benefit program of the Federal Housing Finance Agency 
        or the Board, as applicable, including insurance, to which such 
        employee belongs on the effective date of the abolishment under 
        section 321(a) if--
                    (A) the employee does not elect to give up the 
                benefit or membership in the program; and
                    (B) the benefit or program is continued by the 
                Director of the Federal Housing Finance Agency.
            (2) Cost differential.--The difference in the costs between 
        the benefits which would have been provided by the Board and 
        those provided by this section shall be paid by the Director of 
        the Federal Housing Finance Agency. If any employee elects to 
        give up membership in a health insurance program or the health 
        insurance program is not continued by such Director, the 
        employee shall be permitted to select an alternate Federal 
        health insurance program within 30 days after such election or 
        notice, without regard to any other regularly scheduled open 
        season.

SEC. 324. TRANSFER OF PROPERTY AND FACILITIES.

    Upon the effective date of the abolishment under section 321(a), 
all property of the Board shall transfer to the Director of the Federal 
Housing Finance Agency.

        Subtitle C--Department of Housing and Urban Development

SEC. 341. TERMINATION OF ENTERPRISE-RELATED FUNCTIONS.

    (a) Termination Date.--For purposes of this subtitle, the term 
``termination date'' means the date that occurs 6 months after the date 
of the enactment of this Act.
    (b) Determination of Transferred Functions and Employees.--
            (1) In general.--Not later than the expiration of the 3-
        month period beginning on the date of the enactment of this 
        Act, the Secretary, in consultation with the Director of the 
        Office of Federal Housing Enterprise Oversight, shall 
        determine--
                    (A) the functions, duties, and activities of the 
                Secretary of Housing and Urban Development regarding 
                oversight or regulation of the enterprises under or 
                pursuant to the authorizing statutes, title XIII of the 
                Housing and Community Development Act of 1992, and any 
                other provisions of law, as in effect before the date 
                of the enactment of this Act, but not including any 
                such functions, duties, and activities of the Director 
                of the Office of Federal Housing Enterprise Oversight 
                of the Department of Housing and Urban Development and 
                such Office; and
                    (B) the employees of the Department of Housing and 
                Urban Development necessary to perform such functions, 
                duties, and activities.
            (2) Enterprise-related functions.--For purposes of this 
        subtitle, the term ``enterprise-related functions of the 
        Department'' means the functions, duties, and activities of the 
        Department of Housing and Urban Development determined under 
        paragraph (1)(A).
            (3) Enterprise-related employees.--For purposes of this 
        subtitle, the term ``enterprise-related employees of the 
        Department'' means the employees of the Department of Housing 
        and Urban Development determined under paragraph (1)(B).
    (c) Disposition of Affairs.--During the 6-month period beginning on 
the date of enactment of this Act, the Secretary of Housing and Urban 
Development (in this title referred to as the ``Secretary''), for the 
purpose of winding up the affairs of the Secretary regarding the 
enterprise-related functions of the Department of Housing and Urban 
Development (in this title referred to as the ``Department'') and in 
addition to carrying out the Secretary's other responsibilities under 
law regarding such functions--
            (1) shall manage the enterprise-related employees of the 
        Department and provide for the payment of the compensation and 
        benefits of any such employee which accrue before the effective 
        date of the transfer of any such employee under section 343; 
        and
            (2) may take any other action necessary for the purpose of 
        winding up the enterprise-related functions of the Department.
    (d) Status of Employees Before Transfer.--The amendments made by 
titles I and II and the termination of the enterprise-related functions 
of the Department under subsection (b) may not be construed to affect 
the status of any employee of the Department as employees of an agency 
of the United States for purposes of any other provision of law before 
the effective date of the transfer of any such employee under section 
343.
    (e) Use of Property and Services.--
            (1) Property.--The Director of the Federal Housing Finance 
        Agency may use the property of the Secretary to perform 
        functions which have been transferred to the Director of the 
        Federal Housing Finance Agency for such time as is reasonable 
        to facilitate the orderly transfer of functions transferred 
        under any other provision of this Act or any amendment made by 
        this Act to any other provision of law.
            (2) Agency services.--Any agency, department, or other 
        instrumentality of the United States, and any successor to any 
        such agency, department, or instrumentality, which was 
        providing supporting services to the Secretary regarding 
        enterprise-related functions of the Department before the 
        termination date under subsection (a) in connection with such 
        functions that are transferred to the Director of the Federal 
        Housing Finance Agency shall--
                    (A) continue to provide such services, on a 
                reimbursable basis, until the transfer of such 
                functions is complete; and
                    (B) consult with any such agency to coordinate and 
                facilitate a prompt and reasonable transition.
    (f) Savings Provisions.--
            (1) Existing rights, duties, and obligations not 
        affected.--Subsection (a) shall not affect the validity of any 
        right, duty, or obligation of the United States, the Secretary, 
        or any other person, which--
                    (A) arises under the authorizing statutes, title 
                XIII of the Housing and Community Development Act of 
                1992, or any other provision of law applicable with 
                respect to the Secretary, in connection with the 
                enterprise-related functions of the Department; and
                    (B) existed on the day before the termination date 
                under subsection (a).
            (2) Continuation of suits.--No action or other proceeding 
        commenced by or against the Secretary in connection with the 
        enterprise-related functions of the Department shall abate by 
        reason of the enactment of this Act, except that the Director 
        of the Federal Housing Finance Agency shall be substituted for 
        the Secretary or any member thereof as a party to any such 
        action or proceeding.

SEC. 342. CONTINUATION AND COORDINATION OF CERTAIN REGULATIONS.

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

SEC. 343. TRANSFER AND RIGHTS OF EMPLOYEES.

    (a) Transfer.--
            (1) In general.--Except as provided in paragraph (2), each 
        enterprise-related employee of the Department shall be 
        transferred to the Federal Housing Finance Agency for 
        employment not later than the termination date under section 
        341(a) and such transfer shall be deemed a transfer of function 
        for purposes of section 3503 of title 5, United States Code.
            (2) Authority to decline.--An enterprise-related employee 
        of the Department may, in the discretion of the employee, 
        decline transfer under paragraph (1) to a position in the 
        Federal Housing Finance Agency and shall be guaranteed a 
        position in the Department with the same status, tenure, grade, 
        and pay as that held on the day immediately preceding the date 
        that such declination was made. Each such employee holding a 
        permanent position shall not be involuntarily separated or 
        reduced in grade or compensation for 12 months after the date 
        that the transfer would otherwise have occurred, except for 
        cause or, if the employee is a temporary employee, separated in 
        accordance with the terms of the appointment.
    (b) Guaranteed Positions.--Each enterprise-related employee of the 
Department transferred under subsection (a) shall be guaranteed a 
position with the same status, tenure, grade, and pay as that held on 
the day immediately preceding the transfer. Each such employee holding 
a permanent position shall not be involuntarily separated or reduced in 
grade or compensation for 12 months after the date of transfer, except 
for cause or, if the employee is a temporary employee, separated in 
accordance with the terms of the appointment.
    (c) Appointment Authority for Excepted and Senior Executive Service 
Employees.--
            (1) In general.--In the case of employees occupying 
        positions in the excepted service or the Senior Executive 
        Service, any appointment authority established under law or by 
        regulations of the Office of Personnel Management for filling 
        such positions shall be transferred, subject to paragraph (2).
            (2) Decline of transfer.--The Director of the Federal 
        Housing Finance Agency may decline a transfer of authority 
        under paragraph (1) to the extent that such authority relates 
        to positions excepted from the competitive service because of 
        their confidential, policymaking, policy-determining, or 
        policy-advocating character, and noncareer positions in the 
        Senior Executive Service (within the meaning of section 
        3132(a)(7) of title 5, United States Code).
    (d) Reorganization.--If the Director of the Federal Housing Finance 
Agency determines, after the end of the 1-year period beginning on the 
termination date under section 341(a), that a reorganization of the 
combined workforce is required, that reorganization shall be deemed a 
major reorganization for purposes of affording affected employees 
retirement under section 8336(d)(2) or 8414(b)(1)(B) of title 5, United 
States Code.
    (e) Employee Benefit Programs.--
            (1) In general.--Any enterprise-related employee of the 
        Department accepting employment with the Federal Housing 
        Finance Agency as a result of a transfer under subsection (a) 
        may retain for 12 months after the date on which such transfer 
        occurs membership in any employee benefit program of the 
        Federal Housing Finance Agency or the Department, as 
        applicable, including insurance, to which such employee belongs 
        on the termination date under section 341(a) if--
                    (A) the employee does not elect to give up the 
                benefit or membership in the program; and
                    (B) the benefit or program is continued by the 
                Director of the Federal Housing Finance Agency.
            (2) Cost differential.--The difference in the costs between 
        the benefits which would have been provided by the Department 
        and those provided by this section shall be paid by the 
        Director of the Federal Housing Finance Agency. If any employee 
        elects to give up membership in a health insurance program or 
        the health insurance program is not continued by such Director, 
        the employee shall be permitted to select an alternate Federal 
        health insurance program within 30 days after such election or 
        notice, without regard to any other regularly scheduled open 
        season.

SEC. 344. TRANSFER OF APPROPRIATIONS, PROPERTY, AND FACILITIES.

    Upon the termination date under section 341(a), all assets, 
liabilities, contracts, property, records, and unexpended balances of 
appropriations, authorizations, allocations, and other funds employed, 
held, used, arising from, available to, or to be made available to the 
Department in connection with enterprise-related functions of the 
Department shall transfer to the Director of the Federal Housing 
Finance Agency. Unexpended funds transferred by this section shall be 
used only for the purposes for which the funds were originally 
authorized and appropriated.4502
                                 <all>