[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 1100 Introduced in Senate (IS)]







110th CONGRESS
  1st Session
                                S. 1100

To address the regulation of secondary mortgage market enterprises, and 
                          for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 12, 2007

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

_______________________________________________________________________

                                 A BILL


 
To address the regulation of secondary mortgage market enterprises, and 
                          for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

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

      Subtitle A--Improvement of Safety and Soundness Supervision

Sec. 101. Establishment of the Federal Housing Enterprise Regulatory 
                            Agency.
Sec. 102. Duties and authorities of Director.
Sec. 103. Federal Housing Enterprise Board.
Sec. 104. Authority to require reports by regulated entities.
Sec. 105. Examiners and accountants; authority to contract for reviews 
                            of regulated entities.
Sec. 106. Assessments.
Sec. 107. Regulations and orders.
Sec. 108. Prudential management and operations standards.
Sec. 109. Capital levels and holdings.
Sec. 110. Risk-Based capital test for enterprises.
Sec. 111. Registration of enterprise securities.
Sec. 112. Limit on golden parachutes.
Sec. 113. Reporting of fraudulent loans.
             Subtitle B--Improvement of Mission Supervision

Sec. 121. Transfer of program approval and housing goal oversight.
Sec. 122. Review of enterprise products.
Sec. 123. Monitoring and enforcing compliance with housing goals.
Sec. 124. Assumption by Director of other HUD responsibilities.
Sec. 125. Administrative and judicial enforcement proceedings.
Sec. 126. Conforming loan limits.
Sec. 127. Reporting of mortgage data; housing goals.
Sec. 128. Duty to serve underserved markets.
Sec. 129. Home purchase goal.
                  Subtitle C--Prompt Corrective Action

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

Sec. 151. Cease-and-desist proceedings.
Sec. 152. Temporary cease-and-desist proceedings.
Sec. 153. Removal and prohibition authority.
Sec. 154. Enforcement and jurisdiction.
Sec. 155. Civil money penalties.
Sec. 156. Criminal penalty.
Sec. 157. Notice after separation from service.
Sec. 158. Subpoena authority.
                     Subtitle E--General Provisions

Sec. 161. Conforming and technical amendments.
Sec. 162. Presidentially appointed directors of enterprises.
Sec. 163. Effective date.
                   TITLE II--FEDERAL HOME LOAN BANKS

Sec. 201. Directors.
Sec. 202. Definitions.
Sec. 203. Agency oversight of Federal home loan banks.
Sec. 204. Federal Home Loan Bank Finance Facility.
Sec. 205. Exclusion from certain securities reporting requirements.
Sec. 206. Mergers.
Sec. 207. Authority to reduce districts.
Sec. 208. Management of home loan banks.
TITLE III--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY OF OFHEO AND 
                   THE FEDERAL HOUSING FINANCE BOARD

                           Subtitle A--OFHEO

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

Sec. 311. Abolishment of the Federal Housing Finance Board.
Sec. 312. Continuation and coordination of certain regulations.
Sec. 313. Transfer and rights of employees of the Federal Housing 
                            Finance Board.
Sec. 314. Transfer of property and facilities.
                     TITLE IV--STUDIES AND REPORTS

Sec. 401. Study and report on Basel II and enterprise debt.
Sec. 402. Affordable housing audits.
Sec. 403. Report on insured depository institution holdings of 
                            regulated entity debt and mortgage-backed 
                            securities.
Sec. 404. Report on risk-based capital levels.
Sec. 405. Report on resources and allocations.
Sec. 406. Study and report on guarantee fees.
Sec. 407. Report on conforming loan limits.
Sec. 408. Reviews and studies relating to enterprises and related 
                            foundations.
Sec. 409. Recommendations.

SEC. 2. DEFINITIONS.

    (a) Federal Safety and Soundness Act Definitions.--Section 1303 of 
the Federal Housing Enterprises Financial Safety and Soundness Act of 
1992 (12 U.S.C. 4502) is amended--
            (1) in each of paragraphs (8), (9), (10), and (19), by 
        striking ``Secretary'' each place that term appears and 
        inserting ``Director'';
            (2) in paragraph (14), by striking ``Office of Federal 
        Housing Enterprise Oversight of the Department of Housing and 
        Urban Development'' and inserting ``Federal Housing Enterprise 
        Regulatory Agency'';
            (3) by redesignating paragraphs (16) through (19) as 
        paragraphs (22) through (25), respectively;
            (4) by striking paragraph (15) and inserting the following:
            ``(21) Regulated entity.--The term `regulated entity' 
        means--
                    ``(A) the Federal National Mortgage Association and 
                any affiliate thereof;
                    ``(B) the Federal Home Loan Mortgage Corporation 
                and any affiliate thereof; and
                    ``(C) any Federal Home Loan Bank.'';
            (5) by striking paragraph (13);
            (6) by redesignating paragraph (7) as paragraph (13);
            (7) by redesignating paragraphs (11), (12), and (14) as 
        paragraphs (18) through (20), respectively;
            (8) by striking paragraphs (8) through (10) and inserting 
        the following:
            ``(15) Low-income.--The term `low-income' means a family 
        income that is less than 50 percent of the area median income, 
        or a family income that is less than 50 percent of the area 
        median income.
            ``(16) Median income.--The term `area median income' 
        means--
                    ``(A) the median family income for a metropolitan 
                statistical area (as designated under 13 U.S.C. 421), 
                if the family is located in a metropolitan statistical 
                area; or
                    ``(B) the statewide nonmetropolitan median family 
                income, if the family is located outside a metropolitan 
                statistical area.
            ``(17) Moderate-income.--The term `moderate-income' means 
        an individual income that is at least 50 percent and less than 
        80 percent of the area median income, or a median family income 
        that is at least 50 percent and not more than 80 percent of the 
        area median income.'';
            (9) in paragraph (5)--
                    (A) by striking ``(5)'' and inserting ``(9)''; and
                    (B) by striking ``Office of Federal Housing 
                Enterprise Oversight of the Department of Housing and 
                Urban Development'' and inserting ``Federal Housing 
                Enterprise Regulatory Agency'';
            (10) by redesignating paragraph (6) as paragraph (10);
            (11) by redesignating paragraphs (2) through (4) as 
        paragraphs (5) through (7), respectively;
            (12) by inserting after paragraph (7), as redesignated, the 
        following:
            ``(8) Default; in danger of default.--
                    ``(A) Default.--The term `default' means, with 
                respect to a regulated entity, any adjudication or 
                other official determination by any court of competent 
                jurisdiction, or the Agency, pursuant to which a 
                conservator, receiver, limited-life regulated entity, 
                or legal custodian is appointed for a regulated entity.
                    ``(B) In danger of default.--The term `in danger of 
                default' means a regulated entity with respect to 
                which--
                            ``(i) in the opinion of the Agency--
                                    ``(I) the regulated entity is not 
                                likely to be able to pay the 
                                obligations of the regulated entity in 
                                the normal course of business; or
                                    ``(II) the regulated entity has 
                                incurred or is likely to incur losses 
                                that will deplete all or substantially 
                                all of its capital; and
                            ``(ii) there is no reasonable prospect that 
                        the capital of the regulated entity will be 
                        replenished.'';
            (13) by inserting after paragraph (1) the following:
            ``(2) Agency; director.--The term--
                    ``(A) `Agency' means the Federal Housing Enterprise 
                Regulatory Agency established under section 1311; and
                    ``(B) `Director' means the Director of the Agency, 
                appointed under section 1312;
            ``(3) Authorizing statutes.--The term `authorizing 
        statutes' means--
                    ``(A) the Federal National Mortgage Association 
                Charter Act;
                    ``(B) the Federal Home Loan Mortgage Corporation 
                Act; and
                    ``(C) the Federal Home Loan Bank Act.
            ``(4) Board.--The term `Board' means the Federal Housing 
        Enterprise Board established under section 1313A.'';
            (14) by inserting after paragraph (10), as redesignated, 
        the following:
            ``(11) Entity-affiliated party.--The term `entity-
        affiliated party' means--
                    ``(A) any director, officer, employee, or 
                controlling stockholder of, or agent for, a regulated 
                entity;
                    ``(B) any shareholder, affiliate, consultant, or 
                joint venture partner of a regulated entity, and any 
                other person, as determined by the Director (by 
                regulation or on a case-by-case basis) that 
                participates in the conduct of the affairs of a 
                regulated entity, provided that a member of a Federal 
                Home Loan Bank shall not be deemed to have participated 
                in the affairs of that Bank solely by virtue of being a 
                shareholder of, and obtaining advances from, that Bank;
                    ``(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; and
                    ``(E) the Finance Facility.
            ``(12) Finance facility.--The term `Finance Facility' means 
        the Federal Home Loan Bank Finance Facility established under 
        section 11A of the Federal Home Loan Bank Act.
            ``(13) Limited-life regulated entity.--The term `limited-
        life regulated entity' means an entity established by the 
        Agency under section 1367(i) with respect to a Federal Home 
        Loan Bank in default or in danger of default or with respect to 
        an enterprise in default or in danger of default.'';
            (15) in paragraph (25), as so redesignated by this section, 
        by striking ``60'' each place that term appears and inserting 
        ``30''; and
            (16) by adding at the end the following:
            ``(26) Upper- and middle-income.--
                    ``(A) Upper-income.--The term `upper-income' means 
                a family income that is 120 percent of the area median 
                income or greater.
                    ``(B) Middle-income.--The term `middle-income' 
                means a family income that is not less than 80 percent 
                but less than 120 percent of the area median income, or 
                a median family income that is at least 80 percent and 
                not more than 120 percent.
            ``(27) Violation.--The term `violation' includes any action 
        (alone or in combination with another or others) for or toward 
        causing, bringing about, participating in, counseling, or 
        aiding or abetting a violation.''.
    (b) References in This Act.--As used in this Act, unless otherwise 
specified--
            (1) the term ``Agency'' means the Federal Housing 
        Enterprise Regulatory Agency;
            (2) the term ``Director'' means the Director of the Agency; 
        and
            (3) the terms ``enterprise'', ``Finance Facility'', 
        ``regulated entity'', and ``authorizing statutes'' have the 
        same meanings as in section 1303 of the Federal Housing 
        Enterprises Financial Safety and Soundness Act of 1992, as 
        amended by this Act.

              TITLE I--REFORM OF REGULATION OF ENTERPRISES

      Subtitle A--Improvement of Safety and Soundness Supervision

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

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

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

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

``SEC. 1312. DIRECTOR.

    ``(a) Establishment of Position.--There is established the position 
of the Director of the Agency, who shall be the head of the Agency.
    ``(b) Appointment; Term.--
            ``(1) Appointment.--The Director shall be appointed by the 
        President, by and with the advice and consent of the Senate, 
        from among individuals who are citizens of the United States, 
        have a demonstrated understanding of financial management or 
        oversight, and have a demonstrated understanding of capital 
        markets, including the mortgage securities markets and housing 
        finance.
            ``(2) Term.--The Director shall be appointed for a term of 
        6 years, unless removed before the end of such term for cause 
        by the President.
            ``(3) Vacancy.--A vacancy in the position of Director that 
        occurs before the expiration of the term for which a Director 
        was appointed shall be filled in the manner established under 
        paragraph (1), and the Director appointed to fill such vacancy 
        shall be appointed only for the remainder of such term.
            ``(4) Service after end of term.--An individual may serve 
        as the Director after the expiration of the term for which 
        appointed until a successor has been appointed.
            ``(5) Transitional provision.--Notwithstanding paragraphs 
        (1) and (2), during the period beginning on the effective date 
        of the Federal Housing Enterprise Regulatory Reform Act of 
        2007, and ending on the date on which the Director is appointed 
        and confirmed, the person serving as the Director of the Office 
        of Federal Housing Enterprise Oversight of the Department of 
        Housing and Urban Development on that effective date shall act 
        for all purposes as, and with the full powers of, the Director.
    ``(c) Deputy Director of the Division of Enterprise Regulation.--
            ``(1) In general.--The Agency shall have a Deputy Director 
        of the Division of Enterprise Regulation, who shall be 
        designated by the Director from among individuals who are 
        citizens of the United States, have a demonstrated 
        understanding of financial management or oversight, and have a 
        demonstrated understanding of mortgage securities markets and 
        housing finance.
            ``(2) Functions.--The Deputy Director of the Division of 
        Enterprise Regulation shall have such functions, powers, and 
        duties with respect to the oversight of the enterprises as the 
        Director shall prescribe.
    ``(d) Deputy Director of the Division of Federal Home Loan Bank 
Regulation.--
            ``(1) In general.--The Agency shall have a Deputy Director 
        of the Division of Federal Home Loan Bank Regulation, who shall 
        be designated by the Director from among individuals who are 
        citizens of the United States, have a demonstrated 
        understanding of financial management or oversight, and have a 
        demonstrated understanding of the Federal Home Loan Bank System 
        and housing finance.
            ``(2) Functions.--The Deputy Director of the Division of 
        Federal Home Loan Bank Regulation shall have such functions, 
        powers, and duties with respect to the oversight of the Federal 
        Home Loan Banks as the Director shall prescribe.
    ``(e) Deputy Director for Housing Mission and Goals.--
            ``(1) In general.--The Agency shall have a Deputy Director 
        for Housing Mission and Goals, who shall be designated by the 
        Director from among individuals who are citizens of the United 
        States, and have a demonstrated understanding of the housing 
        markets and housing finance.
            ``(2) Functions.--The Deputy Director for Housing Mission 
        and Goals shall have such functions, powers, and duties with 
        respect to the oversight of the housing mission and goals of 
        the regulated entities as the Director shall prescribe.
    ``(f) Acting Director.--In the event of the death, resignation, 
sickness, or absence of the Director, the President shall designate 
either the Deputy Director of the Division of Enterprise Regulation, 
the Deputy Director of the Division of Federal Home Loan Bank 
Regulation, or the Deputy Director for Housing Mission and Goals, to 
serve as acting Director until the return of the Director, or the 
appointment of a successor pursuant to subsection (b).
    ``(g) Limitations.--The Director and each of the Deputy Directors 
may not--
            ``(1) have any direct or indirect financial interest in any 
        regulated entity or entity-affiliated party;
            ``(2) hold any office, position, or employment in any 
        regulated entity or entity-affiliated party; or
            ``(3) have served as an executive officer or director of 
        any regulated entity or entity-affiliated party at any time 
        during the 3-year period preceding the date of appointment of 
        such individual as Director or Deputy Director.''.

SEC. 102. DUTIES AND AUTHORITIES OF DIRECTOR.

    (a) In General.--Section 1313 of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4513) is amended 
to read as follows:

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

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

SEC. 103. FEDERAL HOUSING ENTERPRISE BOARD.

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

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

    ``(a) In General.--There is established the Federal Housing 
Enterprise Board, 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 4 members, of 
whom--
            ``(1) 1 member shall be the Secretary of the Treasury;
            ``(2) 1 member shall be the Secretary of Housing and Urban 
        Development;
            ``(3) 1 member shall be the Chairman of the Securities and 
        Exchange Commission; and
            ``(4) 1 member shall be the Director, who shall serve as 
        the Chairperson of the Board.
    ``(d) Meetings.--
            ``(1) In general.--The Board shall meet upon notice by the 
        Director, but in no event shall the Board meet less frequently 
        than once every 3 months.
            ``(2) Special meetings.--Either the Secretary of the 
        Treasury, the Secretary of Housing and Urban Development, or 
        the Chairman of the Securities and Exchange Commission may, 
        upon giving written notice to the Director, require a special 
        meeting of the Board.
    ``(e) Testimony.--On an annual basis, the Board shall testify 
before Congress regarding--
            ``(1) the safety and soundness of the regulated entities;
            ``(2) any material deficiencies in the conduct of the 
        operations of the regulated entities;
            ``(3) the overall operational status of the regulated 
        entities;
            ``(4) an evaluation of the performance of the regulated 
        entities in carrying out their respective missions;
            ``(5) operations, resources, and performance of the Agency; 
        and
            ``(6) such other matters relating to the Agency and its 
        fulfillment of its mission, as the Board determines 
        appropriate.''.
    (b) Annual Report of the Director.--Section 1319B(a) of the Federal 
Housing Enterprises Financial Safety and Soundness Act of 1992 (12 
U.S.C. 4521(a)) is amended--
            (1) by striking ``enterprise'' each place that term appears 
        and inserting ``regulated entity'';
            (2) by striking ``enterprises'' each place that term 
        appears and inserting ``regulated entities'';
            (3) in paragraph (3), by striking ``; and'' and inserting a 
        semicolon;
            (4) in paragraph (4), by striking ``1994.'' and inserting 
        ``1994; and''; and
            (5) by adding at the end the following:
            ``(5) the assessment of the Board or any of its members 
        with respect to--
                    ``(A) the safety and soundness of the regulated 
                entities;
                    ``(B) any material deficiencies in the conduct of 
                the operations of the regulated entities;
                    ``(C) the overall operational status of the 
                regulated entities; and
                    ``(D) an evaluation of the performance of the 
                regulated entities in carrying out their respective 
                missions;
            ``(6) operations, resources, and performance of the Agency; 
        and
            ``(7) such other matters relating to the Agency and the 
        fulfillment of its mission.''.

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

    (a) In General.--Section 1314 of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4514) is 
amended--
            (1) in the section heading, by striking ``enterprises'' and 
        inserting ``regulated entities'';
            (2) by striking ``an enterprise'' each place that term 
        appears and inserting ``a regulated entity'';
            (3) by striking ``the enterprise'' and inserting ``the 
        regulated entity'';
            (4) in subsection (a)--
                    (A) by striking the subsection heading and all that 
                follows through ``and operations'' in paragraph (1) and 
                inserting the following:
    ``(a) Regular and Special Reports.--
            ``(1) Regular reports.--The Director may require, by 
        general or specific orders, a regulated entity to submit 
        regular reports, including financial statements determined on a 
        fair value basis, on the condition (including financial 
        condition), management, activities, or operations of the 
        regulated entity, as the Director considers appropriate''; and
                    (B) in paragraph (2)--
                            (i) by inserting ``, by general or specific 
                        orders,'' after ``may also require''; and
                            (ii) by striking ``whenever'' and inserting 
                        ``on any of the topics specified in paragraph 
                        (1) or any other relevant topics, if''; and
            (5) by adding at the end the following:
    ``(c) Penalties for Failure To Make Reports.--
            ``(1) Violations.--It shall be a violation of this section 
        for any regulated entity--
                    ``(A) to fail to make, obtain, transmit, or publish 
                any report or information required by the Director 
                under this section, section 309(k) of the Federal 
                National Mortgage Association Charter Act, or section 
                307(c) of the Federal Home Loan Mortgage Corporation 
                Act, within the period of time specified in such 
                provision of law or otherwise by the Director; or
                    ``(B) to submit or publish any false or misleading 
                report or information under this section.
            ``(2) Penalties.--
                    ``(A) Tier 1.--
                            ``(i) In general.--A violation described in 
                        paragraph (1) shall be subject to a penalty of 
                        not more than $2,000 for each day during which 
                        such violation continues, in any case in 
                        which--
                                    ``(I) the subject regulated entity 
                                maintains procedures reasonably adapted 
                                to avoid any inadvertent error and the 
                                violation was unintentional and a 
                                result of such an error; or
                                    ``(II) the violation was an 
                                inadvertent transmittal or publication 
                                of any report which was minimally late.
                            ``(ii) Burden of proof.--For purposes of 
                        this subparagraph, the regulated entity shall 
                        have the burden of proving that the error was 
                        inadvertent or that a report was inadvertently 
                        transmitted or published late.
                    ``(B) Tier 2.--A violation described in paragraph 
                (1) shall be subject to a penalty of not more than 
                $20,000 for each day during which such violation 
                continues or such false or misleading information is 
                not corrected, in any case that is not addressed in 
                subparagraph (A) or (C).
                    ``(C) Tier 3.--A violation described in paragraph 
                (1) shall be subject to a penalty of not more than 
                $2,000,000 per day for each day during which such 
                violation continues or such false or misleading 
                information is not corrected, in any case in which the 
                subject regulated entity committed such violation 
                knowingly or with reckless disregard for the accuracy 
                of any such information or report.
            ``(3) Assessments.--Any penalty imposed under this 
        subsection shall be in lieu of a penalty under section 1376, 
        but shall be assessed and collected by the Director in the 
        manner provided in section 1376 for penalties imposed under 
        that section, and any such assessment (including the 
        determination of the amount of the penalty) shall be otherwise 
        subject to the provisions of section 1376.
            ``(4) Hearing.--A regulated entity against which a penalty 
        is assessed under this section shall be afforded an agency 
        hearing if the regulated entity submits a request for a hearing 
        not later than 20 days after the date of the issuance of the 
        notice of assessment. Section 1374 shall apply to any such 
        proceedings.''.
    (b) Conforming Amendment.--The Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is 
amended by striking sections 1327 and 1328.

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

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

SEC. 106. ASSESSMENTS.

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

SEC. 107. REGULATIONS AND ORDERS.

    Section 1319G of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4526) is amended--
            (1) by striking subsection (a) and inserting the following:
    ``(a) Authority.--The Director shall issue any regulations, 
guidelines, directives, or orders necessary to carry out the duties of 
the Director under this title or the authorizing statutes, and to 
ensure that the purposes of this title and the authorizing statutes are 
accomplished.''; and
            (2) by striking subsection (c).

SEC. 108. PRUDENTIAL MANAGEMENT AND OPERATIONS STANDARDS.

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

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

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

SEC. 109. CAPITAL LEVELS AND HOLDINGS.

    Subtitle B of the Federal Housing Enterprises Financial Safety and 
Soundness Act of 1992 (12 U.S.C. 4611 et seq.) is amended--
            (1) by striking the subtitle designation and heading and 
        inserting the following:

    ``Subtitle B--Required Capital Levels for Enterprises, Special 
 Enforcement Powers, Limitation on Assets, and Securities Treatment'';

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

``SEC. 1369E. AFFORDABLE HOUSING FOCUSED PORTFOLIOS.

    ``(a) Supporting Affordable Housing.--Congress finds that, 
consistent with the missions of the enterprises, the portfolio holdings 
of the enterprises should be focused, to the maximum extent possible, 
on mortgages and mortgage-backed securities that meet the affordable 
housing goals established for the enterprises pursuant to this Act.
    ``(b) Authority of the Director.--The Director shall, by 
regulation, provide that any mortgages or mortgage-related securities 
acquired by an enterprise after the date of enactment of this Act 
shall--
            ``(1) meet one or more of the housing goals established for 
        the enterprise under this Act; or
            ``(2) be promptly securitized and sold to third parties.
    ``(c) Temporary Adjustments.--The Director may, by order, make 
temporary adjustments to the standards under subsection (b), if such 
action would help to mitigate market disruptions in the housing finance 
system.''.

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

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

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

    ``(a) In General.--The Director shall, by regulation or order, 
establish risk-based capital requirements for each of the enterprises 
to ensure that the enterprises operate in a safe and sound manner, with 
sufficient capital and reserves to support the risks that arise in the 
operations and management of each enterprise.
    ``(b) No Limitation.--Nothing in this section limits the authority 
of the Director to require other reports or undertakings in furtherance 
of the responsibilities of the Director under this Act.''.
    (b) Minimum Capital Levels for Regulated Entities.--
            (1) Enterprises.--Section 1362 of the Federal Housing 
        Enterprises Financial Safety and Soundness Act of 1992 (12 
        U.S.C. 4612) is amended--
                    (A) in the section heading, by inserting ``for 
                enterprises'' after ``levels''; and
                    (B) by striking subsection (b) and inserting the 
                following:
    ``(b) Regulatory Discretion.--The Director may, by regulation or 
order, establish a minimum capital level that is higher than the level 
specified in subsection (a).''.
            (2) Federal home loan banks.--Section 6(a)(2) of the 
        Federal Home Loan Bank Act (12 U.S.C. 1426(a)(2)) is amended by 
        adding at the end the following:
                    ``(C) Authority to alter level.--The Director may, 
                by regulation or order, establish a minimum capital 
                level that is higher than the level specified in 
                subparagraph (A).''.

SEC. 111. REGISTRATION OF ENTERPRISE SECURITIES.

    (a) Fannie Mae.--
            (1) Mortgage-backed securities.--Section 304(d) of the 
        Federal National Mortgage Association Charter Act (12 U.S.C. 
        1719(d)) is amended by striking the fourth sentence and 
        inserting the following: ``Securities issued by the corporation 
        under this subsection shall not be exempt securities for 
        purposes of the Securities Act of 1933.''.
            (2) Subordinate obligations.--Section 304(e) of the Federal 
        National Mortgage Association Charter Act (12 U.S.C. 1719(e)) 
        is amended by striking the fourth sentence and inserting the 
        following: ``Obligations issued by the corporation under this 
        subsection shall not be exempt securities for purposes of the 
        Securities Act of 1933.''.
            (3) Securities.--Section 311 of the Federal National 
        Mortgage Association Charter Act (12 U.S.C. 1723c) is amended--
                    (A) in the section heading, by striking 
                ``association'';
                    (B) by inserting ``(a) In General.--'' after ``sec. 
                311.'';
                    (C) in the second sentence, by inserting ``by the 
                Association'' after ``issued''; and
                    (D) by adding at the end the following:
    ``(b) Treatment of Corporation Securities.--
            ``(1) In general.--Any stock, obligations, securities, 
        participations, or other instruments issued or guaranteed by 
        the corporation pursuant to this title shall not be exempt 
        securities for purposes of the Securities Act of 1933.
            ``(2) Exemption for approved sellers.--Notwithstanding any 
        other provision of this title or the Securities Act of 1933, 
        transactions involving the initial disposition by an approved 
        seller of pooled certificates that are acquired by that seller 
        from the corporation upon the initial issuance of the pooled 
        certificates shall be deemed to be transactions by a person 
        other than an issuer, underwriter, or dealer for purposes of 
        the Securities Act of 1933.
            ``(3) Definitions.--For purposes of this subsection, the 
        following definitions shall apply:
                    ``(A) Approved seller.--The term `approved seller' 
                means an institution approved by the corporation to 
                sell mortgage loans to the corporation in exchange for 
                pooled certificates.
                    ``(B) Pooled certificates.--The term `pooled 
                certificates' means single class mortgage-backed 
                securities guaranteed by the corporation that have been 
                issued by the corporation directly to the approved 
                seller in exchange for the mortgage loans underlying 
                such mortgage-backed securities.
            ``(4) Mortgage related securities.--A single class 
        mortgage-backed security guaranteed by the corporation that has 
        been issued by the corporation directly to the approved seller 
        in exchange for the mortgage loans underlying such mortgage-
        backed securities or directly by the corporation for cash shall 
        be deemed to be a mortgage related security, as defined in 
        section 3(a) of the Securities Exchange Act of 1934.''.
    (b) Freddie Mac.--Section 306(g) of the Federal Home Loan Mortgage 
Corporation Act (12 U.S.C. 1455(g)) is amended to read as follows:
    ``(g) Treatment of Securities.--
            ``(1) In general.--Any securities issued or guaranteed by 
        the Corporation shall not be exempt securities for purposes of 
        the Securities Act of 1933.
            ``(2) Exemption for approved sellers.--Notwithstanding any 
        other provision of this title or the Securities Act of 1933, 
        transactions involving the initial disposition by an approved 
        seller of pooled certificates that are acquired by that seller 
        from the Corporation upon the initial issuance of the pooled 
        certificates shall be deemed to be transactions by a person 
        other than an issuer, underwriter, or dealer for purposes of 
        the Securities Act of 1933.
            ``(3) Definitions.--For purposes of this subsection, the 
        following definitions shall apply:
                    ``(A) Approved seller.--The term `approved seller' 
                means an institution approved by the Corporation to 
                sell mortgage loans to the Corporation in exchange for 
                pooled certificates.
                    ``(B) Pooled certificates.--The term `pooled 
                certificates' means single class mortgage-backed 
                securities guaranteed by the Corporation that have been 
                issued by the Corporation directly to the approved 
                seller in exchange for the mortgage loans underlying 
                such mortgage-backed securities.''.
    (c) Limitation on Fees.--Section 6(b)(2) of the Securities Act of 
1933 (15 U.S.C. 77f(b)(2)) is amended by adding at the end the 
following: ``Notwithstanding any other provision of this title, no 
applicant, or group of affiliated applicants that does not include any 
investment company registered under the Investment Company Act of 1940, 
filing a registration statement subject to a fee shall be required in 
any fiscal year with respect to all registration statements filed by 
such applicant in such fiscal year to pay an aggregate amount in fees 
to the Commission pursuant to this subsection in an amount that exceeds 
5 percent of the target offsetting collection amount for such fiscal 
year. Fees paid in connection with registration statements relating to 
business combinations shall not be included in calculating the total 
fees paid by any such applicant.''.
    (d) No Effect on Other Law.--Nothing in this section or the 
amendments made by this section shall be construed to affect any 
exemption from the provisions of the Trust Indenture Act of 1939 
provided to the Federal National Mortgage Association or the Federal 
Home Loan Mortgage Corporation.
    (e) Regulations.--The Securities and Exchange Commission may issue 
such regulations as may be necessary or appropriate to carry out this 
section and the amendments made by this section.
    (f) Effective Date.--The amendments made by this section shall 
become effective 1 year after the date of enactment of this Act.

SEC. 112. LIMIT ON GOLDEN PARACHUTES.

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

SEC. 113. REPORTING OF FRAUDULENT LOANS.

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

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

    ``(a) 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 the purchase or sale of any loan or financial instrument. 
The Director shall require each regulated entity to establish and 
maintain procedures designed to discover any such transactions.
    ``(b) Protection From Liability for Reports.--Any regulated entity 
that makes a report pursuant to subsection (a), and any entity-
affiliated party, that makes or requires another to make any such 
report, shall not be liable to any person under any provision of law or 
regulation, 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 persons 
identified in the report.''.

             Subtitle B--Improvement of Mission Supervision

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

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

         ``PART `2'--ADDITIONAL AUTHORITIES OF THE DIRECTOR'';

            and
            (2) by striking sections 1321 and 1322.

SEC. 122. REVIEW OF ENTERPRISE PRODUCTS.

    Part 2 of subtitle A of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.), as amended 
by this Act, is amended by inserting before section 1323 the following:

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

    ``(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 impair the stability or 
        competitiveness 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), 
                then 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 excluded from the definition of a product under 
        subsection (f), then 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 a 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 the 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.--As used in this section, the term 
`product'--
            ``(1) all programs, products, and activities, offered by 
        the enterprise in the marketplace; and
            ``(2) does not include--
                    ``(A) the automated loan underwriting system of an 
                enterprise in existence as of the date of enactment of 
                the Federal Housing Enterprise Regulatory Reform Act of 
                2007, including any upgrade to the technology, 
                operating system, or software to operate the 
                underwriting system; or
                    ``(B) 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 an 
        enterprise.''.

SEC. 123. MONITORING AND ENFORCING COMPLIANCE WITH HOUSING GOALS.

    Section 1336(a)(1) of the Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992 (12 U.S.C. 4566(a)(1)) is amended by 
striking ``established'' and all that follows through ``1334'' and 
inserting ``under this subpart''.

SEC. 124. ASSUMPTION BY DIRECTOR OF OTHER HUD RESPONSIBILITIES.

    (a) In General.--Part 2 of subtitle A of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4541 
et seq.) is amended--
            (1) by striking ``Secretary'' each place that term appears 
        and inserting ``Director'' in each of sections 1323, 1324, 
        1326, 1331, 1332, 1333, 1334, and 1336;
            (2) in section 1332 (12 U.S.C. 4562), by striking 
        subsection (d);
            (3) in section 1333 (12 U.S.C. 4563), by striking 
        subsection (d);
            (4) in section 1334 (12 U.S.C. 4564), by striking 
        subsection (d); and
            (5) by striking sections 1337, 1338, and 1349 (12 U.S.C. 
        4567, 4562 note, 4589).
    (b) Retention of Fair Housing Responsibilities.--Section 1325 of 
the Federal Housing Enterprises Financial Safety and Soundness Act of 
1992 (12 U.S.C. 4545) is amended in the matter preceding paragraph (1), 
by inserting ``of Housing and Urban Development'' after ``The 
Secretary''.

SEC. 125. ADMINISTRATIVE AND JUDICIAL ENFORCEMENT PROCEEDINGS.

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

SEC. 126. CONFORMING LOAN LIMITS.

    (a) Fannie Mae.--Section 302(b)(2) of the Federal National Mortgage 
Association Charter Act (12 U.S.C. 1717(b)(2)) is amended by striking 
``The Corporation shall establish'' and all that follows through the 
end of the paragraph and inserting the following: ``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, or $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 after the effective date under section 163 of the Federal 
Housing Enterprise Regulatory Reform Act of 2007, subject to the 
limitations in this paragraph. Such limitation shall be calculated with 
respect to the total original principal obligation of the mortgage, and 
not merely with respect to the interest purchased by the enterprise. 
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 fourth quarter period ending before the time of 
determining such annual adjustment, in the housing price index 
maintained by the Director of the Federal Housing Enterprise Regulatory 
Agency (pursuant to section 1321 of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4541)).''.
    (b) Freddie Mac.--Section 305(a)(2) of the Federal Home Loan 
Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) is amended by striking 
``The Corporation shall establish'' and all that follows through the 
end of the paragraph and inserting the following: ``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, or $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 after the effective date under section 163 of the Federal 
Housing Enterprise Regulatory Reform Act of 2007, subject to the 
limitations in this paragraph. Such limitation shall be calculated with 
respect to the total original principal obligation of the mortgage and 
not merely with respect to the interest purchased by the enterprise. 
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 fourth quarter period ending before the time of 
determining such annual adjustment, in the housing price index 
maintained by the Director of the Federal Housing Enterprise Regulatory 
Agency (pursuant to section 1321 of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4541)).''.
    (c) Housing Price Index.--The Federal Housing Enterprises Financial 
Safety and Soundness Act of 1992, as amended by this Act, is amended by 
inserting before section 1323 the following:

``SEC. 1322. HOUSING PRICE INDEX.

    ``(a) Method of Assessment.--The Director shall establish, by 
regulation, and maintain a method of assessing the national average 
single-family housing price for use in adjusting the conforming loan 
limitations of the enterprises.
    ``(b) Considerations.--The Director shall take into consideration 
the monthly survey of all major lenders conducted by the Agency to 
determine the national average single-family house price, the Housing 
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 163 of the Federal Housing Enterprise 
Regulatory Reform Act of 2007, any appropriate housing price indexes of 
the Bureau of the Census of the Department of Commerce, and any other 
indexes or measure that the Director considers appropriate.''.

SEC. 127. REPORTING OF MORTGAGE DATA; HOUSING GOALS.

    (a) Reporting of Mortgage Data.--Section 1325 of the Federal 
Housing Enterprises Financial Safety and Soundness Act of 1992 (12 
U.S.C. 4546), as so redesignated by this Act, is amended--
            (1) in subsection (a), by striking ``The Director'' and 
        inserting ``Subject to subsection (d), the Director''; and
            (2) by adding at the end the following:
    ``(d) Mortgage Data.--The Director shall, by regulation or order, 
provide that certain information relating to single family mortgage 
data of the enterprises shall be disclosed to the public in order to 
make available to the public the same data from the enterprises that is 
required of insured depository institutions under the Home Mortgage 
Disclosure Act.''.
    (b) Definitions.--Section 1334 of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4564), as amended 
by this Act, is amended by adding at the end the following:
    ``(d) Definitions.--For purposes of this section, the term 
`underserved area' means an urban census tract that has--
            ``(1) an average median family income of less than 80 
        percent of the area median family income; or
            ``(2) a minority population of at least 30 percent and a 
        median family income of less than 100 percent of the area 
        family median income.''.

SEC. 128. DUTY TO SERVE UNDERSERVED MARKETS.

    (a) Establishment and Evaluation of Performance.--Section 1335 of 
the Federal Housing Enterprises Financial Safety and Soundness 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) by inserting ``and to carry out the duty under 
                subsection (a)'' before ``, each enterprise shall'';
                    (B) in paragraph (3), by inserting ``and'' at the 
                end;
                    (C) in paragraph (4), by striking ``; and'' and 
                inserting a period; and
                    (D) by striking paragraph (5); and
            (4) by redesignating subsection (a) as subsection (b);
            (5) by inserting before subsection (b) (as so redesignated) 
        the following:
    ``(a) Duty To Serve Underserved Markets.--
            ``(1) Duty.--In accordance with the purposes 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 lead the industry in 
        developing loan products and flexible underwriting guidelines 
        to facilitate a secondary market--
                    ``(A) for mortgages on manufactured homes for very 
                low-, low-, and moderate-income families;
                    ``(B) 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) 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 Director identifies as lacking adequate credit 
                through conventional lending sources, which underserved 
                markets may be identified by borrower type, market 
                segment, or geographic area; and
                    ``(D) for mortgages originated through State or 
                local affordable or subsidized housing programs.''; and
            (6) by adding at the end the following new subsection:
    ``(c) Evaluation and Reporting of Compliance.--
            ``(1) Method of evaluation.--Not later than 6 months after 
        the effective date of title I of the Federal Housing Enterprise 
        Regulatory Reform Act of 2007, the Director shall establish a 
        method 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.
            ``(2) Annual evaluations.--Using the method established 
        under paragraph (1), the Director shall, for each year, 
        evaluate such compliance and rate the performance of each 
        enterprise as to the 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).
            ``(3) Separate evaluations.--In determining whether an 
        enterprise has complied with the duty under subsection (a), 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.''.
    (b) Enforcement.--Section 1336(a) of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 
4566(a)) is amended--
            (1) in paragraph (1), by inserting before the period ``and 
        with the duty under section 1335A of each enterprise with 
        respect to underserved markets''; and
            (2) by adding at the end the following:
            ``(4) Enforcement of duty to provide mortgage credit to 
        underserved markets.--Compliance with 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 
        sections 1332, 1333, and 1334 are enforceable. Such duty shall 
        not be enforceable under any provision of this title (including 
        subpart C), other than this section, or under any provision of 
        the Federal National Mortgage Association Charter Act or the 
        Federal Home Loan Mortgage Corporation Act, as applicable.''.

SEC. 129. HOME PURCHASE GOAL.

    The Federal Housing Enterprises Financial Safety and Soundness Act 
of 1992 (12 U.S.C. 4501 et seq.) is amended--
            (1) by inserting after section 1334 the following:

``SEC. 1334A. HOME PURCHASE GOAL.

    ``(a) Establishment.--
            ``(1) In general.--The Director shall establish an annual 
        home purchase goal for the purchase by each enterprise of 
        mortgage financing of owner-occupied single family dwelling 
        units.
            ``(2) Components.--The Director may, by regulation, 
        establish components for the goal established under paragraph 
        (1) to include any or all of the following:
                    ``(A) First-time home buyers.
                    ``(B) Low- and moderate-income home buyers.
                    ``(C) Home buyers in central cities, rural areas, 
                and other underserved areas.
                    ``(D) Home buyers who obtain financing through 
                State or local affordable or subsidized housing 
                programs.
            ``(3) Other authority.--The Director may, by regulation, 
        establish the goal under paragraph (1) with components as 
        percentages of enterprise business, or by such other means as 
        necessary to increase the secondary market financing of 
        mortgages by the enterprises for home purchases, consistent 
        with the missions of the enterprises.
            ``(4) Enforceability.--The components of the goal 
        established by the Director under paragraph (1) shall be 
        enforceable as goals under subpart C.
    ``(b) Factors To Be Considered.--In establishing the home purchase 
goal for an enterprise under this section, the Director shall 
consider--
            ``(1) national housing needs;
            ``(2) economic, housing, and demographic conditions;
            ``(3) the performance and effort of the enterprises toward 
        achieving the home purchase goal in previous years;
            ``(4) the size of the conventional mortgage market serving 
        home purchasers, relative to the size of the overall 
        conventional mortgage market;
            ``(5) the ability of the enterprises to lead the industry 
        in making mortgage credit available for home purchasers; and
            ``(6) the need to maintain the sound financial condition of 
        the enterprises.
    ``(c) Transition.--In order to permit a transition to the 
establishment of the goal under this section, such goal shall not be 
effective or enforceable during the 1-year period beginning on the date 
of its establishment under subsection (a).
    ``(d) Implementation During Transition.--The Director shall 
establish, by rule, any requirements necessary to implement the 
transition provisions under subsection (c), after providing the 
enterprises with an opportunity to review and comment not less than 30 
days before the issuance of such notice.

``SEC. 1334B HOUSING GOALS, ADDITIONS, MODIFICATIONS, AND RESCISSIONS.

    ``(a) In General.--
            ``(1) Authority to address goals.--The Director may, by 
        regulation, establish additional annual housing goals, or 
        modify or rescind existing housing goals, to address national 
        housing needs consistent with the missions, of the enterprises 
        and the authorizing statutes, for the purchase of mortgages, if 
        the Director determines, by regulation, that the housing need 
        is greatest.
            ``(2) Methodology.--The Director may issue a regulation 
        which establishes or modifies any goal under this subsection--
                    ``(A) as a percentage of the mortgage purchases of 
                each enterprise;
                    ``(B) as a dollar amount of each enterprise's 
                mortgage purchases; or
                    ``(C) by such other means as necessary to increase 
                the enterprises' secondary market financing of 
                mortgages addressed by the goal.
    ``(b) Factors To Be Considered.--In establishing any additional 
goals under this section, the Director shall consider--
            ``(1) national housing needs;
            ``(2) economic, housing, and demographic conditions;
            ``(3) the performance and effort of the enterprises toward 
        achieving the need addressed by any such additional goal in 
        previous years;
            ``(4) the size of the conventional mortgage market serving 
        the need addressed by the goal, relative to the size of the 
        overall conventional mortgage market;
            ``(5) the ability of the enterprises to lead the industry 
        in making mortgage credit available to meet the need addressed 
        by the goal; and
            ``(6) the need to maintain the sound financial condition of 
        the enterprises.
    ``(c) Transition.--In order to permit a transition to the 
establishment of any goal under this section, such goal shall not be 
effective or enforceable during the 1-year period beginning on the date 
of its establishment under subsection (a).'';
            (2) in section 1335 (12 U.S.C. 4565(a)), by striking ``meet 
        the low-'' and all that follows through ``1334'' and inserting 
        ``meet the goals under this subpart'';
            (3) in section 1336 (12 U.S.C. 4566), by striking 
        subsections (b) and (c) and inserting the following:
    ``(b) Notice and Preliminary Determination of Failure To Meet 
Goals.--
            ``(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 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.
            ``(2) Response period.--
                    ``(A) In general.--During the 30-day period 
                beginning on the date on which an enterprise is 
                provided notice under paragraph (1), the enterprise may 
                submit to the Director any written information that the 
                enterprise considers appropriate for consideration by 
                the Director in finally determining whether such 
                failure has occurred or whether the achievement of such 
                goal was or is feasible.
                    ``(B) Extended period.--The Director may extend the 
                period under subparagraph (A) for good cause for not 
                more than 30 additional days.
                    ``(C) Shortened period.--The Director may shorten 
                the period under subparagraph (A) for good cause.
                    ``(D) Failure to respond.--The failure of an 
                enterprise to provide information during the 30-day 
                period under this paragraph (as extended or shortened) 
                shall waive any right of the enterprise to comment on 
                the proposed determination or action of the Director.
            ``(3) Consideration of information and final 
        determination.--
                    ``(A) In general.--After the expiration of the 
                response period under paragraph (2), or upon receipt of 
                information provided during such period by the 
                enterprise, whichever occurs earlier, the Director 
                shall issue a final determination on--
                            ``(i) whether the enterprise has failed, or 
                        there is a substantial probability that the 
                        enterprise will fail, to meet the housing goal; 
                        and
                            ``(ii) whether (taking into consideration 
                        market and economic conditions and the 
                        financial condition of the enterprise) the 
                        achievement of the housing goal was or is 
                        feasible.
                    ``(B) Considerations.--In making a final 
                determination under subparagraph (A), the Director 
                shall take into consideration any relevant information 
                submitted by the enterprise during the response period.
                    ``(C) Notice.--The Director shall provide written 
                notice, including a response to any information 
                submitted during the response period to the enterprise, 
                the Committee on Banking, Housing, and Urban Affairs of 
                the Senate, and the Committee on Financial Services of 
                the House of Representatives, of--
                            ``(i) each final determination under this 
                        paragraph that an enterprise has failed, or 
                        that there is a substantial probability that 
                        the enterprise will fail, to meet a housing 
                        goal;
                            ``(ii) each final determination that the 
                        achievement of a housing goal was or is 
                        feasible; and
                            ``(iii) the reasons for each such final 
                        determination.
    ``(c) Cease and Desist, 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).
            ``(2) Housing plan.--If the Director requires a housing 
        plan under this subsection, such a plan shall be--
                    ``(A) a feasible plan describing the specific 
                actions the enterprise will take--
                            ``(i) to achieve the goal for the next 
                        calendar year; and
                            ``(ii) if the Director determines that 
                        there is a substantial probability that the 
                        enterprise will fail to meet a goal in the 
                        current year, to make such improvements and 
                        changes in its operations as are reasonable in 
                        the remainder of such year; and
                    ``(B) sufficiently specific to enable the Director 
                to monitor compliance periodically.
            ``(3) Deadline for submission.--The Director shall, by 
        regulation, establish a deadline for an enterprise to comply 
        with any remedial action or submit a housing plan to the 
        Director, which may not be more than 45 days after the 
        enterprise is provided notice. The regulations shall provide 
        that the Director may extend the deadline to the extent that 
        the Director determines necessary. Any extension of the 
        deadline shall be in writing and for a time certain.
            ``(4) Approval.--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 it 
        necessary. The Director shall approve any plan that the 
        Director determines is likely to succeed, and conforms with the 
        Federal National Mortgage Association Charter Act or the 
        Federal Home Loan Mortgage Corporation Act (as applicable), 
        this title, and any other applicable provision of law.
            ``(5) Notice of approval and disapproval.--The Director 
        shall provide written notice to any enterprise submitting a 
        housing plan of the approval or disapproval of the plan (which 
        shall include the reasons for any disapproval of the plan) and 
        of any extension of the period for approval or disapproval.
            ``(6) Resubmission.--If the initial housing plan submitted 
        by an enterprise under this section is disapproved, the 
        enterprise shall submit an amended plan acceptable to the 
        Director not later than 30 days after such disapproval, or such 
        longer period that the Director determines is in the public 
        interest.
            ``(7) Additional remedies for failure to meet goals.--In 
        addition to ordering a housing plan under this section, issuing 
        a cease and desist order 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, including 
        requesting that the Director exercise appropriate enforcement 
        authority available to the Director under this title to 
        prohibit the enterprise from entering into new activities, to 
        freeze any pending approval of new activities, and to order the 
        enterprise to suspend activities pending its achievement of the 
        goal.'';
            (4) by striking section 1338 (12 U.S.C. 4568);
            (5) by striking from the heading of subpart C ``of Housing 
        Goals'';
            (6) by striking section 1341 (12 U.S.C. 4581) and inserting 
        the following:

``SEC. 1341. CEASE-AND-DESIST PROCEEDINGS.

    ``(a) Grounds for Issuance.--The Director may issue and serve a 
notice of charges under this section upon an enterprise if the Director 
determines that--
            ``(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 1327, 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, subsection 
        (e) or (f) of section 307 of the Federal Home Loan Mortgage 
        Corporation Act, or section 1337 of this title;
            ``(4) the enterprise has violated any provision of part 2 
        of this title or any order, rule, or regulation under part 2;
            ``(5) the enterprise has failed to submit a housing plan or 
        perform its responsibilities under a remedial order that 
        substantially 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).
    ``(b) Procedure.--
            ``(1) Notice of charges.--Each notice of charges issued 
        under this section shall contain a statement of the facts 
        constituting the alleged conduct and shall fix a time and place 
        at which a hearing will be held to determine on the record 
        whether an order to cease and desist from such conduct should 
        issue.
            ``(2) Issuance of order.--If the Director finds on the 
        record made at a hearing described in paragraph (1) that any 
        conduct specified in the notice of charges has been established 
        (or the enterprise consents pursuant to section 1342(a)(4)), 
        the Director may issue and serve upon the enterprise an order 
        requiring the enterprise to--
                    ``(A) comply with the goals;
                    ``(B) submit a report under section 1327;
                    ``(C) comply with any provision of part 2 of this 
                title or any order, rule, or regulation under part 2;
                    ``(D) submit a housing plan in compliance with 
                section 1336(c);
                    ``(E) comply with the housing plan in compliance 
                with 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.
    ``(c) Effective Date.--An order under this section shall become 
effective upon the expiration of the 30-day period beginning on the 
date of service of the order upon the enterprise (except in the case of 
an order issued upon consent, which shall become effective at the time 
specified therein), and shall remain effective and enforceable as 
provided in the order, except to the extent that the order is stayed, 
modified, terminated, or set aside by action of the Director of or 
otherwise, as provided in this subpart.''; and
            (7) by striking section 1345 and inserting the following:

``SEC. 1345. CIVIL MONEY PENALTIES.

    ``(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 1327, 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 part 2 of this title or 
        any order, rule, or regulation under part 2;
            ``(5) submit a housing plan or perform its responsibilities 
        under a remedial order issued 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 a penalty under this 
section, as determined by the Director, may not exceed--
            ``(1) for any failure described in paragraph (1), (5), or 
        (6) of subsection (a), $100,000 for each day that the failure 
        occurs; and
            ``(2) for any failure described in paragraph (2), (3), or 
        (4) of subsection (a), $50,000 for each day that the failure 
        occurs.
    ``(c) Procedures.--
            ``(1) Establishment.--The Director shall establish 
        standards and procedures governing the imposition of civil 
        money penalties under this section. Such standards and 
        procedures--
                    ``(A) shall provide for the Director to notify the 
                enterprise in writing of the determination of the 
                Director to impose the penalty, which shall be made on 
                the record;
                    ``(B) shall provide for the imposition of a penalty 
                only after the enterprise has been given an opportunity 
                for a hearing on the record pursuant to section 1342; 
                and
                    ``(C) may provide for review by the Director of any 
                determination or order, or interlocutory ruling, 
                arising from a hearing.
            ``(2) Factors in determining amount of penalty.--In 
        determining the amount of a penalty under this section, the 
        Director shall give consideration to factors including--
                    ``(A) the gravity of the offense;
                    ``(B) any history of prior offenses;
                    ``(C) ability to pay the penalty;
                    ``(D) injury to the public;
                    ``(E) benefits received;
                    ``(F) deterrence of future violations;
                    ``(G) the length of time that the enterprise should 
                reasonably take to achieve the goal; and
                    ``(H) such other factors as the Director may 
                determine, by regulation, to be appropriate.
    ``(d) Action To Collect Penalty.--If an enterprise fails to comply 
with an order by the Director imposing a civil money penalty under this 
section, after the order is no longer subject to review, as provided in 
sections 1342 and 1343, the Director may request the Attorney General 
of the United States to bring an action in the United States District 
Court for the District of Columbia to obtain a monetary judgment 
against the enterprise, and such other relief as may be available. The 
monetary judgment may, in the court's discretion, include the 
attorneys' fees and other expenses incurred by the United States in 
connection with the action. In an action under this subsection, the 
validity and appropriateness of the order imposing the penalty shall 
not be subject to review.
    ``(e) Settlement by Director.--The Director may compromise, modify, 
or remit any civil money penalty which may be, or has been, imposed 
under this section.
    ``(f) Deposit of Penalties.--The Director shall deposit any civil 
money penalties collected under this section into the General Fund of 
the Treasury.''.

                  Subtitle C--Prompt Corrective Action

SEC. 141. CRITICAL CAPITAL LEVELS.

    Section 1363 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4613) is amended--
            (1) by redesignating paragraphs (1) through (3) as clauses 
        (i) through (iii), respectively, and indenting appropriately;
            (2) by striking ``this subtitle, the critical capital level 
        for each enterprise shall be the sum of--'' and inserting the 
        following: ``this subtitle, the critical capital level--
            ``(1) for each enterprise shall be--
                    ``(A) the sum of--''; and
            (3) in paragraph (1)(A)(iii), as so designated by this 
        section, by striking the period at the end and inserting the 
        following: ``; or
                    ``(B) such other level as the Director shall 
                establish, by regulation; and
            ``(2) for each Federal Home Loan Bank, shall be the level 
        that the Director shall establish, by regulation.''.

SEC. 142. CAPITAL CLASSIFICATIONS.

    Section 1364 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4614) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (3)(A)--
                            (i) by striking clause (i); and
                            (ii) by redesignating clauses (ii) and 
                        (iii) as clauses (i) and (ii), respectively; 
                        and
                    (B) in paragraph (4)(A), by striking ``enterprise--
                '' and all that follows through ``(ii) does'' and 
                inserting ``enterprise does'';
            (2) by striking subsection (b) and inserting the following:
    ``(b) Discretionary Classification.--
            ``(1) Grounds for reclassification.--The Director may 
        reclassify a regulated entity under paragraph (2) if--
                    ``(A) at any time, the Director determines in 
                writing that a regulated entity is engaging in conduct 
                that could result in a rapid depletion of core capital, 
                or that the value of the property subject to mortgages 
                held or securitized by an enterprise, or the value of 
                collateral pledged as security, has decreased 
                significantly;
                    ``(B) after notice and an opportunity for hearing, 
                the Director determines that a regulated entity is in 
                an unsafe or unsound condition; or
                    ``(C) pursuant to section 1371(b), the Director 
                determines that a regulated entity is engaging in an 
                unsafe or unsound practice.
            ``(2) Reclassification.--In addition to any other action 
        authorized under this title, including the reclassification of 
        a regulated entity for any reason not specified in this 
        subsection, if the Director takes any action described in 
        paragraph (1), the Director may reclassify a regulated entity--
                    ``(A) as `undercapitalized', if the regulated 
                entity is otherwise classified as adequately 
                capitalized;
                    ``(B) as `significantly undercapitalized', if the 
                regulated entity is otherwise classified as 
                undercapitalized; and
                    ``(C) as `critically undercapitalized', if the 
                regulated entity is otherwise classified as 
                significantly undercapitalized.''; and
            (3) by striking subsection (d) and inserting the following:
    ``(d) Restriction on Capital Distributions.--
            ``(1) In general.--A regulated entity shall make no capital 
        distribution if, after making the distribution, the regulated 
        entity would be undercapitalized.
            ``(2) Exception.--Notwithstanding paragraph (1), the 
        Director may permit a regulated entity to repurchase, redeem, 
        retire, or otherwise acquire shares or ownership interests if 
        the repurchase, redemption, retirement, or other acquisition--
                    ``(A) is made in connection with the issuance of 
                additional shares or obligations of the regulated 
                entity in at least an equivalent amount; and
                    ``(B) will reduce the financial obligations of the 
                regulated entity or otherwise improve the financial 
                condition of the regulated entity.''.

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

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

SEC. 144. SUPERVISORY ACTIONS APPLICABLE TO SIGNIFICANTLY 
              UNDERCAPITALIZED REGULATED ENTITIES.

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

SEC. 145. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED REGULATED 
              ENTITIES.

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

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

    ``(a) Appointment of the Agency as Conservator or Receiver.--
            ``(1) In general.--Notwithstanding any other provision of 
        Federal or State law, the Director may appoint the Agency as 
        conservator or receiver for a regulated entity in the manner 
        provided under paragraph (2) or (4). All references to the 
        conservator or receiver under this section are references to 
        the Agency acting as conservator or receiver.
            ``(2) Discretionary appointment.--The Agency may, at the 
        discretion of the Director, be appointed conservator or 
        receiver for the purpose of reorganizing, rehabilitating, or 
        winding up the affairs of a regulated entity.
            ``(3) Grounds for discretionary appointment of conservator 
        or receiver.--The grounds for appointing conservator or 
        receiver for any regulated entity under paragraph (2) are as 
        follows:
                    ``(A) 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.
                    ``(B) Unsafe or unsound condition.--An unsafe or 
                unsound condition to transact business.
                    ``(C) Cease-and-desist orders.--Any willful 
                violation of a cease-and-desist order that has become 
                final.
                    ``(D) 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.
                    ``(E) 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.
                    ``(F) 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)).
                    ``(G) 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.
                    ``(H) Consent.--The regulated entity, by resolution 
                of its board of directors or its shareholders or 
                members, consents to the appointment.
                    ``(I) Undercapitalization.--The regulated entity is 
                undercapitalized or significantly undercapitalized (as 
                defined in section 1364(a)(3)), and--
                            ``(i) has no reasonable prospect of 
                        becoming adequately capitalized;
                            ``(ii) fails to become adequately 
                        capitalized, as required by--
                                    ``(I) section 1365(a)(1) with 
                                respect to a 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.
                    ``(J) Critical undercapitalization.--The regulated 
                entity is critically undercapitalized, as defined in 
                section 1364(a)(4).
                    ``(K) 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 undercapitalized 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) does 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 of the Agency as receiver of a regulated 
                entity under this section shall immediately terminate 
                any conservatorship established for the regulated 
                entity under this title.
            ``(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 
                home office 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;
                            ``(iv) preserve and conserve the assets and 
                        property of the regulated entity; and
                            ``(v) provide by contract for assistance in 
                        fulfilling any function, activity, action, or 
                        duty of the Agency as conservator or receiver.
                    ``(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.--In any case 
                in which the Agency is acting as receiver, the Agency 
                shall place the regulated entity in liquidation and 
                proceed to realize upon the assets of the regulated 
                entity in such manner as the Agency deems appropriate, 
                including through the sale of assets, the transfer of 
                assets to a limited-life regulated entity established 
                under subsection (i), or the exercise of any other 
                rights or privileges granted to the Agency under this 
                paragraph.
                    ``(F) Organization of new enterprise.--The Agency 
                shall, as receiver for an enterprise, organize a 
                successor enterprise that will operate pursuant to 
                subsection (i).
                    ``(G) Transfer or sale of assets and liabilities.--
                The Agency may, as conservator or receiver, transfer or 
                sell any asset or liability of the regulated entity in 
                default, and may do so without any approval, 
                assignment, or consent with respect to such transfer or 
                sale.
                    ``(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 that are due and 
                payable at the time of the appointment of the Agency as 
                conservator or receiver, in accordance with the 
                prescriptions and limitations of this section.
                    ``(I) Subpoena authority.--
                            ``(i) In general.--
                                    ``(I) Agency authority.--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 under this subparagraph, in the 
                                same manner as such provisions apply 
                                under that section.
                            ``(ii) Subpoena.--A subpoena or subpoena 
                        duces tecum may be issued under clause (i) only 
                        by, or with the written approval of, the 
                        Director, or the designee of the Director.
                            ``(iii) Rule of construction.--This 
                        subsection shall not be construed to limit any 
                        rights that the Agency, in any capacity, might 
                        otherwise have under section 1317 or 1379B.
                    ``(J) Incidental powers.--The Agency may, as 
                conservator or receiver--
                            ``(i) exercise all powers and authorities 
                        specifically granted to conservators or 
                        receivers, respectively, under this section, 
                        and such incidental powers as shall be 
                        necessary to carry out such powers; and
                            ``(ii) take any action authorized by this 
                        section, which the Agency determines is in the 
                        best interests of the regulated entity or the 
                        Agency.
                    ``(K) Other provisions.--
                            ``(i) Shareholders and creditors of failed 
                        regulated entity.--Notwithstanding any other 
                        provision of law, the appointment of the Agency 
                        as receiver for a regulated entity pursuant to 
                        paragraph (2) or (4) of subsection (a) and its 
                        succession, by operation of law, to the rights, 
                        titles, powers, and privileges described in 
                        subsection (b)(2)(A) shall terminate all rights 
                        and claims that the stockholders and creditors 
                        of the regulated entity may have against the 
                        assets or charter of the regulated entity or 
                        the Agency arising as a result of their status 
                        as stockholders or creditors, except for their 
                        right to payment, resolution, or other 
                        satisfaction of their claims, as permitted 
                        under subsections (b)(9), (c), and (e).
                            ``(ii) Assets of regulated entity.--
                        Notwithstanding any other provision of law, for 
                        purposes of this section, the charter of a 
                        regulated entity shall not be considered an 
                        asset of the regulated entity.
            ``(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 
                        date of publication of such notice; and
                            ``(ii) republish such notice approximately 
                        1 month and 2 months, respectively, after the 
                        date of 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 
                        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) by the receiver from any claimant which is 
                proved to the satisfaction of the receiver.
                    ``(C) Disallowance of claims filed after 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--
                                    ``(I) any extension of credit from 
                                any Federal Reserve Bank or the United 
                                States Treasury; or
                                    ``(II) any security interest in the 
                                assets of the regulated entity securing 
                                any such extension of credit.
                    ``(E) No judicial review of determination pursuant 
                to subparagraph (d).--No court may review the 
                determination of the Agency under subparagraph (D) to 
                disallow a claim.
                    ``(F) Legal effect of filing.--
                            ``(i) Statute of limitation tolled.--For 
                        purposes of any applicable statute of 
                        limitations, the filing of a claim with the 
                        receiver shall constitute a commencement of an 
                        action.
                            ``(ii) No prejudice to other actions.--
                        Subject to paragraph (10), the filing of a 
                        claim with the receiver shall not prejudice any 
                        right of the claimant to continue any action 
                        which was filed before the date of the 
                        appointment of the receiver, subject to the 
                        determination of claims by the receiver.
            ``(6) Provision for judicial determination of claims.--
                    ``(A) In general.--The claimant may file suit on a 
                claim (or continue an action commenced before the 
                appointment of the receiver) in the district or 
                territorial court of the United States for the district 
                within which the principal place of business of the 
                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 under this 
                        subparagraph, 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 on which 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 date of 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 on which 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 that 
                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 officer or representative 
                of the regulated entity.
                    ``(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 entity, 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 the 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--
                            ``(i) shall have all of 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) shall 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, or upon the charter, of a 
                regulated entity for which the Agency has been 
                appointed 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 or charter 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--
                            ``(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 on which 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 on which 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 limitations 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 on which 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 an 
                entity-affiliated party, or any person determined by 
                the conservator or receiver to be 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 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 conservator or receiver 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 conservator or receiver.--
                    ``(A) In general.--Notwithstanding any other 
                provision of this subsection, any final and 
                unappealable judgment for monetary damages entered 
                against the conservator or receiver for the breach of 
                an agreement executed or approved in writing by the 
                conservator or receiver after the date of its 
                appointment, shall be paid as an administrative expense 
                of the conservator or receiver.
                    ``(B) No limitation of power.--Nothing in this 
                paragraph shall be construed to limit the power of the 
                conservator or receiver 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 the 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 
                        an enterprise for the benefit of any person 
                        other than the enterprise 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 in 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 
                        accordance with the terms of the agreement 
                        creating such trust, custodial, or other agency 
                        arrangement.
                            ``(iii) Liability of conservator or 
                        receiver.--The liability of the conservator or 
                        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 with 
                        in the regulations of the Director.
    ``(c) Priority of Expenses and Unsecured Claims.--
            ``(1) In general.--Unsecured claims against a regulated 
        entity, or the receiver therefor, 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 (which is not a liability described 
                under subparagraph (C) or (D).
                    ``(C) Any obligation subordinated to general 
                creditors (which is not an obligation described under 
                subparagraph (D)).
                    ``(D) Any obligation to shareholders or members 
                arising as a result of their status as shareholder or 
                members.
            ``(2) Creditors similarly situated.--All creditors that are 
        similarly situated under paragraph (1) shall be treated in a 
        similar manner, except that the receiver may take any action 
        (including making payments) that does not comply with this 
        subsection, if--
                    ``(A) the Director determines that such action is 
                necessary to maximize the value of the assets of the 
                regulated entity, to maximize the present value return 
                from the sale or other disposition of the assets of the 
                regulated entity, or to minimize the amount of any loss 
                realized upon the sale or other disposition of the 
                assets of the regulated entity assets; and
                    ``(B) all creditors that are similarly situated 
                under paragraph (1) receive not less than the amount 
                provided in subsection (e)(2).
            ``(3) Definition.--As used in this subsection, the term 
        `administrative expenses of the receiver' includes--
                    ``(A) the actual, necessary costs and expenses 
                incurred by the receiver in preserving the assets of a 
                failed regulated entity or liquidating or otherwise 
                resolving the affairs of a failed regulated entity; and
                    ``(B) any obligations that the receiver 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 on 
                        which--
                                    ``(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 subparagraph 
                (A)--
                            ``(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 
                subparagraph (A)--
                            ``(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) 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 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 
                        on which 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 the 
                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 title (other than subsection 
                (b)(9)(B) of this section), any other Federal law, or 
                the law of any State, no person shall be stayed or 
                prohibited from exercising--
                            ``(i) any right of that person 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; or
                            ``(iii) any right to offset or net out any 
                        termination value, payment amount, or other 
                        transfer obligation arising under or in 
                        connection with 1 or more contracts and 
                        agreements described in clause (i), including 
                        any master agreement for such contracts or 
                        agreements.
                    ``(B) Applicability of other provisions.--
                Subsection (b)(10) 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 provision of 
                        Federal or State law 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 the following definitions shall apply:
                            ``(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 on which 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' (including 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 section 3 
                                of the Securities Exchange Act of 
                                1934), mortgage loans, interests in 
                                mortgage-related securities or mortgage 
                                loans, eligible bankers' acceptances, 
                                qualified foreign government securities 
                                (defined for purposes of this clause as 
                                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), 
                                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.
                            ``(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.
                            ``(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 equity of redemption of the regulated 
                        entity.
                    ``(E) Certain protections in event of appointment 
                of conservator.--Notwithstanding any other provision of 
                this section, any other Federal law, or the law of any 
                State (other than paragraph (10) of this subsection and 
                subsection (b)(9)(B)), 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 1 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), or to disaffirm or 
                repudiate any such contract in accordance with 
                subsection (d)(1).
                    ``(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 the status of such party 
                        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.--The conservator or receiver 
                shall notify any person that is a party to a contract 
                or transfer by 5:00 p.m. (Eastern Standard 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, 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) such transfer includes any qualified 
                        financial contract.
                    ``(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 under 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 
                                Standard 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 under 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 conservator or receiver 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 conservator or receiver 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, or the 
                exercise of rights or powers by, a conservator or 
                receiver, the conservator or receiver may enforce any 
                contract, other than a contract for liability insurance 
                for a director or officer, or a contract or a 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 liability insurance contract 
                for an officer or director, or regulated entity 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 subparagraph shall 
                        not--
                                    ``(I) apply to a contract for 
                                liability insurance for an officer or 
                                director;
                                    ``(II) apply to the rights of 
                                parties to certain qualified financial 
                                contracts under subsection (d)(8); and
                                    ``(III) 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.
    ``(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 be not more 
        than the amount that such claimant would have received if the 
        Agency had liquidated the assets and liabilities of the 
        regulated entity without exercising the authority of the Agency 
        under subsection (i).
    ``(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 described in paragraph (2) brought by, on 
        behalf of, or at the request or direction of the Agency, and 
        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.
            ``(2) Actions addressed.--Paragraph (1) applies in any 
        civil action 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.
            ``(3) No limitation.--Nothing in this subsection 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.--The Agency, as receiver appointed 
                pursuant to subsection (a)--
                            ``(i) may, in the case of a Federal Home 
                        Loan Bank, organize a limited-life regulated 
                        entity with those powers and attributes of the 
                        Federal Home Loan Bank in default or in danger 
                        of default as the Director determines 
                        necessary, subject to the provisions of this 
                        subsection, and the Director shall grant a 
                        temporary charter to that limited-life 
                        regulated entity, and that limited-life 
                        regulated entity shall operate subject to that 
                        charter; and
                            ``(ii) shall, in the case of an enterprise, 
                        organize a limited-life regulated entity with 
                        respect to that enterprise in accordance with 
                        this subsection.
                    ``(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, except 
                        that the liabilities assumed shall not exceed 
                        the amount of assets purchased or transferred 
                        from the regulated entity to 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 and establishment.--
                    ``(A) Transfer of charter.--
                            ``(i) Fannie mae.--If the Agency is 
                        appointed as receiver for the Federal National 
                        Mortgage Association, the limited-life 
                        regulated entity established under this 
                        subsection with respect to such enterprise 
                        shall, by operation of law and immediately upon 
                        its organization--
                                    ``(I) succeed to the charter of the 
                                Federal National Mortgage Association, 
                                as set forth in the Federal National 
                                Mortgage Association Charter Act; and
                                    ``(II) thereafter operate in 
                                accordance with, and subject to, such 
                                charter, this Act, and any other 
                                provision of law to which the Federal 
                                National Mortgage Association is 
                                subject, except as otherwise provided 
                                in this subsection.
                            ``(ii) Freddie mac.--If the Agency is 
                        appointed as receiver for the Federal Home Loan 
                        Mortgage Corporation, the limited-life 
                        regulated entity established under this 
                        subsection with respect to such enterprise 
                        shall, by operation of law and immediately upon 
                        its organization--
                                    ``(I) succeed to the charter of the 
                                Federal Home Loan Mortgage Corporation, 
                                as set forth in the Federal Home Loan 
                                Mortgage Corporation Charter Act; and
                                    ``(II) thereafter operate in 
                                accordance with, and subject to, such 
                                charter, this Act, and any other 
                                provision of law to which the Federal 
                                Home Loan Mortgage Corporation is 
                                subject, except as otherwise provided 
                                in this subsection.
                    ``(B) Interests in and assets and obligations of 
                regulated entity in default.--Notwithstanding 
                subparagraph (A) or any other provision of law--
                            ``(i) a limited-life regulated entity shall 
                        assume, acquire, or succeed to the assets or 
                        liabilities of a regulated entity only to the 
                        extent that such assets or liabilities are 
                        transferred by the Agency to the limited-life 
                        regulated entity in accordance with, and 
                        subject to the restrictions set forth in, 
                        paragraph (1)(B);
                            ``(ii) a limited-life regulated entity 
                        shall not assume, acquire, or succeed to any 
                        obligation that a regulated entity for which a 
                        receiver has been appointed may have to any 
                        shareholder of the regulated entity that arises 
                        as a result of the status of that person as a 
                        shareholder of the regulated entity; and
                            ``(iii) no shareholder or creditor of a 
                        regulated entity shall have any right or claim 
                        against the charter of the regulated entity 
                        once the Agency has been appointed receiver for 
                        the regulated entity and a limited-life 
                        regulated entity succeeds to the charter 
                        pursuant to subparagraph (A).
                    ``(C) Limited-life regulated entity treated 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.
                    ``(D) Management.--Upon its establishment, a 
                limited-life regulated entity 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.
                    ``(E) 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.--
                            ``(A) No agency requirement.--The Agency is 
                        not required to pay capital stock into a 
                        limited-life regulated entity or to issue any 
                        capital stock on behalf of a limited-life 
                        regulated entity established under this 
                        subsection.
                            ``(B) Authority.--If the Director 
                        determines that such action is advisable, the 
                        Agency may cause capital stock or other 
                        securities of a limited-life regulated entity 
                        established with respect to an enterprise to be 
                        issued and offered for sale, in such amounts 
                        and on such terms and conditions as the 
                        Director may determine, in the discretion of 
                        the Director.
            ``(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 tax status.--Notwithstanding any other 
        provision of Federal or State law, a 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 subparagraphs (B) and 
                (C), not later than 2 years after the date of its 
                organization, the Agency shall wind up the affairs of a 
                limited-life regulated entity.
                    ``(B) Extension.--The Director may, in the 
                discretion of the Director, extend the status of a 
                limited-life regulated entity for 3 additional 1-year 
                periods.
                    ``(C) Termination of status as limited-life 
                regulated entity.--
                            ``(i) In general.--Upon the sale by the 
                        Agency of 80 percent or more of the capital 
                        stock of a limited-life regulated entity, as 
                        defined in clause (iv), to 1 or more persons 
                        (other than the Agency)--
                                    ``(I) the status of the limited-
                                life regulated entity as such shall 
                                terminate; and
                                    ``(II) the entity shall cease to be 
                                a limited-life regulated entity for 
                                purposes of this subsection.
                            ``(ii) Divestiture of remaining stock, if 
                        any.--
                                    ``(I) In general.--Not later than 1 
                                year after the date on which the status 
                                of a limited-life regulated entity is 
                                terminated pursuant to clause (i), the 
                                Agency shall sell to 1 or more persons 
                                (other than the Agency) any remaining 
                                capital stock of the former limited-
                                life regulated entity.
                                    ``(II) Extension authorized.--The 
                                Director may extend the period referred 
                                to in subclause (I) for not longer than 
                                an additional 2 years, if the Director 
                                determines that such action would be in 
                                the public interest.
                            ``(iii) Savings clause.--Notwithstanding 
                        any provision of law, other than clause (ii), 
                        the Agency shall not be required to sell the 
                        capital stock of an enterprise or a limited-
                        life regulated entity established with respect 
                        to an enterprise.
                            ``(iv) Applicability.--This subparagraph 
                        applies only with respect to a limited-life 
                        regulated entity that is established with 
                        respect to an enterprise.
            ``(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 and subject to the restrictions of 
                        paragraph (1).
                            ``(ii) Subsequent transfers.--At any time 
                        after the establishment of a limited-life 
                        regulated entity, the Agency, as receiver, may 
                        transfer any assets and liabilities of the 
                        regulated entity in default, or in danger of 
                        default, as the Agency may, in its discretion, 
                        determine to be appropriate in accordance with 
                        and subject to the restrictions of paragraph 
                        (1).
                            ``(iii) Effective without approval.--The 
                        transfer of any assets or liabilities of a 
                        regulated entity in default or in danger of 
                        default to a limited-life regulated entity 
                        shall be effective without any further approval 
                        under Federal or State law, assignment, or 
                        consent with respect thereto.
                            ``(iv) Equitable treatment of similarly 
                        situated creditors.--The Agency shall treat all 
                        creditors of a regulated entity in default or 
                        in danger of default that are similarly 
                        situated under subsection (c)(1) in a similar 
                        manner in exercising the authority of the 
                        Agency under this subsection to transfer any 
                        assets or liabilities of the regulated entity 
                        to the limited-life regulated entity 
                        established with respect to such regulated 
                        entity, except that the Agency may take actions 
                        (including making payments) that do not comply 
                        with this clause, if--
                                    ``(I) the Director determines that 
                                such actions are necessary to maximize 
                                the value of the assets of the 
                                regulated entity, to maximize the 
                                present value return from the sale or 
                                other disposition of the assets of the 
                                regulated entity, or to minimize the 
                                amount of any loss realized upon the 
                                sale or other disposition of the assets 
                                of the regulated entity; and
                                    ``(II) all creditors that are 
                                similarly situated under subsection 
                                (c)(1) receive not less than the amount 
                                provided in subsection (e)(2).
                            ``(v) Limitation on transfer of 
                        liabilities.--Notwithstanding any other 
                        provision of law, the aggregate amount of 
                        liabilities of a regulated entity that are 
                        transferred to, or assumed by, a limited-life 
                        regulated entity may not exceed the aggregate 
                        amount of assets of the regulated entity that 
                        are transferred to, or purchased by, the 
                        limited-life regulated entity.
            ``(8) Regulations.--The Agency may promulgate such 
        regulations as the Agency determines to be necessary or 
        appropriate to implement this subsection.
            ``(9) Powers of limited-life regulated entities.--
                    ``(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;
                                    ``(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; and
                                    ``(III) 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
                            ``(ii) 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 not longer than 45 days, at the request of 
                the limited-life regulated entity. Such period may be 
                modified upon the consent of all parties.
            ``(10) 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.
            ``(11) Authority to obtain credit.--
                    ``(A) In general.--A limited-life regulated entity 
                may obtain unsecured credit and issue unsecured debt.
                    ``(B) Inability to obtain credit.--If a limited-
                life regulated entity is unable to obtain unsecured 
                credit or issue unsecured debt, the Director may 
                authorize the obtaining of credit or the issuance of 
                debt by the limited-life regulated entity--
                            ``(i) with priority over any or all of the 
                        obligations of the limited-life regulated 
                        entity;
                            ``(ii) secured by a lien on property of the 
                        limited-life regulated entity that is not 
                        otherwise subject to a lien; or
                            ``(iii) secured by a junior lien on 
                        property of the limited-life regulated entity 
                        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 issuance of debt by 
                        a limited-life regulated entity that is secured 
                        by a senior or equal lien on property of the 
                        limited-life regulated entity that is subject 
                        to a lien (other than mortgages that 
                        collateralize the mortgage-backed securities 
                        issued or guaranteed by an enterprise) only 
                        if--
                                    ``(I) the limited-life regulated 
                                entity is unable to otherwise obtain 
                                such credit or issue such debt; and
                                    ``(II) there is adequate protection 
                                of the interest of the holder of the 
                                lien on the property with respect to 
                                which such senior or equal lien is 
                                proposed to be granted.
            ``(12) Burden of proof.--In any hearing under this 
        subsection, the Director has the burden of proof on the issue 
        of adequate protection.
            ``(13) Affect on debts and liens.--The reversal or 
        modification on appeal of an authorization under this 
        subsection to obtain credit or issue debt, or of a grant under 
        this section of a priority or a lien, does not affect the 
        validity of any debt so issued, 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 issuance of such debt, or the 
        granting of such priority or lien, were stayed pending appeal.
    ``(j) Other Agency Exemptions.--
            ``(1) Applicability.--The provisions of this subsection 
        shall apply with respect to the Agency in any case in which the 
        Agency is acting as a conservator or a receiver.
            ``(2) Taxation.--The Agency, including its franchise, its 
        capital, reserves, and surplus, and its income, shall be exempt 
        from all taxation imposed by any State, county, 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.
            ``(3) Property protection.--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.
            ``(4) 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 the 
receiver appointed pursuant to this section revoke, annul, or terminate 
the charter of an enterprise.''.
    (b) Technical and Conforming Amendments.--The Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 
et seq.) is amended--
            (1) in section 1368 (12 U.S.C. 4618)--
                    (A) by striking ``an enterprise'' each place that 
                term appears and inserting ``a regulated entity''; and
                    (B) by striking ``the enterprise'' each place that 
                term appears and inserting ``the regulated entity'';
            (2) in section 1369C (12 U.S.C. 4622), by striking 
        ``enterprise'' each place that term appears and inserting 
        ``regulated entity'';
            (3) in section 1369D (12 U.S.C. 4623)--
                    (A) by striking ``an enterprise'' each place that 
                term appears and inserting ``a regulated entity''; and
                    (B) in subsection (a)(1), by striking ``An 
                enterprise'' and inserting ``A regulated entity''; and
            (4) by striking sections 1369, 1369A, and 1369B (12 U.S.C. 
        4619, 4620, and 4621).

                    Subtitle D--Enforcement Actions

SEC. 151. CEASE-AND-DESIST PROCEEDINGS.

    Section 1371 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4631) is amended--
            (1) by striking subsections (a) and (b) and inserting the 
        following:
    ``(a) Issuance for Unsafe or Unsound Practices and Violations.--If, 
in the opinion of the Director, a regulated entity or any entity-
affiliated party is engaging or has engaged, or the Director has 
reasonable cause to believe that the regulated entity or any entity-
affiliated party is about to engage, in an unsafe or unsound practice 
in conducting the business of the regulated entity or the Finance 
Facility, or is violating or has violated, or the Director has 
reasonable cause to believe is about to violate, a law, rule, 
regulation, or order, or any condition imposed in writing by the 
Director in connection with the granting of any application or other 
request by the regulated entity or the Finance Facility or any written 
agreement entered into with the Director, the Director may issue and 
serve upon the regulated entity or entity-affiliated party a notice of 
charges in respect thereof.
    ``(b) Issuance for Unsatisfactory Rating.--If a regulated entity 
receives, in its most recent report of examination, a less-than-
satisfactory rating for credit risk, market risk, operations, or 
corporate governance, the Director may (if the deficiency is not 
corrected) deem the regulated entity to be engaging in an unsafe or 
unsound practice for purposes of subsection (a).'';
            (2) in subsection (c)--
                    (A) in paragraph (1), by inserting before the 
                period at the end the following: ``, unless the party 
                served with a notice of charges shall appear at the 
                hearing personally or by a duly authorized 
                representative, the party shall be deemed to have 
                consented to the issuance of the cease-and-desist 
                order''; and
                    (B) in paragraph (2)--
                            (i) by striking ``or director'' and 
                        inserting ``director, or entity-affiliated 
                        party''; and
                            (ii) by inserting ``or entity-affiliated 
                        party'' before ``consents'';
            (3) in each of subsections (c), (d), and (e)--
                    (A) by striking ``the enterprise'' each place that 
                term appears and inserting ``the regulated entity'';
                    (B) by striking ``an enterprise'' each place that 
                term appears and inserting ``a regulated entity''; and
                    (C) by striking ``conduct'' each place that term 
                appears and inserting ``practice'';
            (4) in subsection (d)--
                    (A) in the matter preceding paragraph (1)--
                            (i) by striking ``or director'' and 
                        inserting ``director, or entity-affiliated 
                        party'';
                            (ii) by inserting ``to require a regulated 
                        entity or entity-affiliated party'' after 
                        ``includes the authority'';
                    (B) in paragraph (1)--
                            (i) by striking ``to require an executive 
                        officer or a director to''; and
                            (ii) by striking ``loss'' and all that 
                        follows through ``person'' and inserting 
                        ``loss, if'';
                            (iii) in subparagraph (A), by inserting 
                        ``such entity or party or finance facility'' 
                        before ``was''; and
                            (iv) by striking subparagraph (B) and 
                        inserting the following:
                    ``(B) the violation or practice involved a reckless 
                disregard for the law or any applicable regulations or 
                prior order of the Director;'';] and
                    (C) in paragraph (4), by inserting ``loan or'' 
                before ``asset'';
            (5) in subsection (e), by inserting ``or entity-affiliated 
        party''--
                    (A) before ``or any executive''; and
                    (B) before the period at the end; and
            (6) in subsection (f)--
                    (A) by striking ``enterprise'' and inserting 
                ``regulated entity, finance facility,''; and
                    (B) by striking ``or director'' and inserting 
                ``director, or entity-affiliated party''.

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

    Section 1372 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4632) is amended--
            (1) by striking subsection (a) and inserting the following:
    ``(a) Grounds for Issuance.--
            ``(1) In general.--If the Director determines that the 
        actions specified in the notice of charges served upon a 
        regulated entity or any 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 that entity, or is likely to weaken the condition 
        of that entity prior to the completion of the proceedings 
        conducted pursuant to sections 1371 and 1373, the Director 
        may--
                    ``(A) issue a temporary order requiring that 
                regulated entity or entity-affiliated party to cease 
                and desist from any such violation or practice; and
                    ``(B) require that regulated entity or entity-
                affiliated party to take affirmative action to prevent 
                or remedy such insolvency, dissipation, condition, or 
                prejudice pending completion of such proceedings.
            ``(2) Additional requirements.--An order issued under 
        paragraph (1) may include any requirement authorized under 
        subsection 1371(d).'';
            (2) in subsection (b)--
                    (A) by striking ``or director'' and inserting 
                ``director, or entity-affiliated party''; and
                    (B) by striking ``enterprise'' each place that term 
                appears and inserting ``regulated entity'';
            (3) in subsection (c), by striking ``enterprise'' each 
        place that term appears and inserting ``regulated entity'';
            (4) in subsection (d)--
                    (A) by striking ``or director'' each place that 
                term appears and inserting ``director, or entity-
                affiliated party''; and
                    (B) by striking ``An enterprise'' and inserting ``A 
                regulated entity''; and
            (5) in subsection (e)--
                    (A) by striking ``request the Attorney General of 
                the United States to''; and
                    (B) by striking ``or may, under the direction and 
                control of the Attorney General, bring such action''.

SEC. 153. REMOVAL AND PROHIBITION AUTHORITY.

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

``SEC. 1377. REMOVAL AND PROHIBITION AUTHORITY.

    ``(a) Authority To Issue Order.--
            ``(1) In general.--The Director may serve upon a party 
        described in paragraph (2), or any officer, director, or 
        management of the Finance Facility a written notice of the 
        intention of the Director to suspend or remove such party from 
        office, or prohibit any further participation by such party, in 
        any manner, in the conduct of the affairs of the regulated 
        entity.
            ``(2) Applicability.--A party described in this paragraph 
        is an entity-affiliated party or any officer, director, or 
        management of the Finance Facility, if the Director determines 
        that--
                    ``(A) that party, officer, or director has, 
                directly or indirectly--
                            ``(i) violated--
                                    ``(I) any law or regulation;
                                    ``(II) any cease-and-desist order 
                                which has become final;
                                    ``(III) any condition imposed in 
                                writing by the Director in connection 
                                with the grant of any application or 
                                other request by such regulated entity; 
                                or
                                    ``(IV) any written agreement 
                                between such regulated entity and the 
                                Director;
                            ``(ii) engaged or participated in any 
                        unsafe or unsound practice in connection with 
                        any regulated entity or business institution; 
                        or
                            ``(iii) committed or engaged in any act, 
                        omission, or practice which constitutes a 
                        breach of such party's fiduciary duty;
                    ``(B) by reason of the violation, practice, or 
                breach described in subparagraph (A)--
                            ``(i) such regulated entity or business 
                        institution has suffered or will probably 
                        suffer financial loss or other damage; or
                            ``(ii) such party has received financial 
                        gain or other benefit; and
                    ``(C) the violation, practice, or breach described 
                in subparagraph (A)--
                            ``(i) involves personal dishonesty on the 
                        part of such party; or
                            ``(ii) demonstrates willful or continuing 
                        disregard by such party for the safety or 
                        soundness of such regulated entity or business 
                        institution.
    ``(b) Suspension Order.--
            ``(1) Suspension or prohibition authority.--If the Director 
        serves written notice under subsection (a) upon a party subject 
        to that subsection (a), the Director may, by order, suspend or 
        remove such party from office, or prohibit such party from 
        further participation in any manner in the conduct of the 
        affairs of the regulated entity, if the Director--
                    ``(A) determines that such action is necessary for 
                the protection of the regulated entity; and
                    ``(B) serves such party with written notice of the 
                order.
            ``(2) Effective period.--Any order issued under this 
        subsection--
                    ``(A) shall become effective upon service; and
                    ``(B) unless a court issues a stay of such order 
                under subsection (g), shall remain in effect and 
                enforceable until--
                            ``(i) the date on which the Director 
                        dismisses the charges contained in the notice 
                        served under subsection (a) with respect to 
                        such party; or
                            ``(ii) the effective date of an order 
                        issued under subsection (b).
            ``(3) Copy of order.--If the Director issues an order under 
        subsection (b) to any party, the Director shall serve a copy of 
        such order on any regulated entity with which such party is 
        affiliated at the time such order is issued.
    ``(c) Notice, Hearing, and Order.--
            ``(1) Notice.--A notice under subsection (a) of the 
        intention of the Director to issue an order under this section 
        shall contain a statement of the facts constituting grounds for 
        such action, and shall fix a time and place at which a hearing 
        will be held on such action.
            ``(2) Timing of hearing.--A hearing shall be fixed for a 
        date not earlier than 30 days, nor later than 60 days, after 
        the date of service of notice under subsection (a), unless an 
        earlier or a later date is set by the Director at the request 
        of--
                    ``(A) the party receiving such notice, and good 
                cause is shown; or
                    ``(B) the Attorney General of the United States.
            ``(3) Consent.--Unless the party that is the subject of a 
        notice delivered under subsection (a) appears at the hearing in 
        person or by a duly authorized representative, such party shall 
        be deemed to have consented to the issuance of an order under 
        this section.
            ``(4) Issuance of order of suspension.--The Director may 
        issue an order under this section, as the Director may deem 
        appropriate, if--
                    ``(A) a party is deemed to have consented to the 
                issuance of an order under paragraph (3); or
                    ``(B) upon the record made at the hearing, the 
                Director finds that any of the grounds specified in the 
                notice have been established.
            ``(5) Effectiveness of order.--Any order issued under 
        paragraph (4) shall become effective at the expiration of 30 
        days after the date of service upon the relevant regulated 
        entity and party (except in the case of an order issued upon 
        consent under paragraph (3), which shall become effective at 
        the time specified therein). Such order shall remain effective 
        and enforceable except to such extent as it is stayed, 
        modified, terminated, or set aside by action of the Director or 
        a reviewing court.
    ``(d) Prohibition of Certain Specific Activities.--Any person 
subject to an order issued under this section shall not--
            ``(1) participate in any manner in the conduct of the 
        affairs of any regulated entity or the Finance Facility;
            ``(2) solicit, procure, transfer, attempt to transfer, 
        vote, or attempt to vote any proxy, consent, or authorization 
        with respect to any voting rights in any regulated entity;
            ``(3) violate any voting agreement previously approved by 
        the Director; or
            ``(4) vote for a director, or serve or act as an entity-
        affiliated party of a regulated entity or as an officer or 
        director of the Finance Facility.
    ``(e) Industry-Wide Prohibition.--
            ``(1) In general.--Except as provided in paragraph (2), any 
        person who, pursuant to an order issued under this section, has 
        been removed or suspended from office in a regulated entity or 
        the Finance Facility, or prohibited from participating in the 
        conduct of the affairs of a regulated entity or the Finance 
        Facility, may not, while such order is in effect, continue or 
        commence to hold any office in, or participate in any manner in 
        the conduct of the affairs of, any regulated entity or the 
        Finance Facility.
            ``(2) Exception if director provides written consent.--If, 
        on or after the date on which an order is issued under this 
        section which removes or suspends from office any party, or 
        prohibits such party from participating in the conduct of the 
        affairs of a regulated entity or the Finance Facility, such 
        party receives the written consent of the Director, the order 
        shall, to the extent of such consent, cease to apply to such 
        party with respect to the regulated entity or such Finance 
        Facility described in the written consent. Any such consent 
        shall be publicly disclosed.
            ``(3) Violation of paragraph (1) treated as violation of 
        order.--Any violation of paragraph (1) by any person who is 
        subject to an order issued under subsection (h) shall be 
        treated as a violation of the order.
    ``(f) Applicability.--This section shall only apply to a person who 
is an individual, unless the Director specifically finds that it should 
apply to a corporation, firm, or other business entity.
    ``(g) Stay of Suspension and Prohibition of Entity-Affiliated 
Party.--Not later than 10 days after the date on which any entity-
affiliated party has been suspended from office or prohibited from 
participation in the conduct of the affairs of a regulated entity under 
this section, such party may apply to the United States District Court 
for the District of Columbia, or the United States district court for 
the judicial district in which the headquarters of the regulated entity 
is located, for a stay of such suspension or prohibition pending the 
completion of the administrative proceedings pursuant to subsection 
(c). The court shall have jurisdiction to stay such suspension or 
prohibition.
    ``(h) Suspension or Removal of Entity-Affiliated Party Charged With 
Felony.--
            ``(1) Suspension or prohibition.--
                    ``(A) In general.--Whenever any 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 1 year 
                under Federal or State law, the Director may, if 
                continued service or participation by such party may 
                pose a threat to the regulated entity or impair public 
                confidence in the regulated entity, by written notice 
                served upon such party, suspend such party from office 
                or prohibit such party from further participation in 
                any manner in the conduct of the affairs of any 
                regulated entity.
                    ``(B) Provisions applicable to notice.--
                            ``(i) Copy.--A copy of any notice under 
                        subparagraph (A) shall be served upon the 
                        relevant regulated entity.
                            ``(ii) Effective period.--A suspension or 
                        prohibition under subparagraph (A) shall remain 
                        in effect until the information, indictment, or 
                        complaint referred to in subparagraph (A) is 
                        finally disposed of, or until terminated by the 
                        Director.
            ``(2) Removal or prohibition.--
                    ``(A) In general.--If a judgment of conviction or 
                an agreement to enter a pretrial diversion or other 
                similar program is entered against an 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 removing such party from 
                office or prohibiting such party from further 
                participation in any manner in the conduct of the 
                affairs of the regulated entity without the prior 
                written consent of the Director.
                    ``(B) Provisions applicable to order.--
                            ``(i) Copy.--A copy of any order under 
                        subparagraph (A) shall be served upon the 
                        relevant regulated entity, at which time the 
                        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 a party from office or to 
                        prohibit further participation in the affairs 
                        of a regulated entity pursuant to subsection 
                        (a) or (b).
                            ``(iii) Effective period.--Unless 
                        terminated by the Director, any notice of 
                        suspension or order of removal issued under 
                        this subsection shall remain effective and 
                        outstanding until the completion of any hearing 
                        or appeal authorized under paragraph (4).
            ``(3) Authority of remaining board members.--
                    ``(A) In general.--If at any time, because of the 
                suspension of 1 or more directors pursuant to this 
                section, there shall be on the board of directors of a 
                regulated entity less than a quorum of directors not so 
                suspended, all powers and functions vested in or 
                exercisable by such board shall vest in and be 
                exercisable by the director or directors on the board 
                not so suspended, until such time as there shall be a 
                quorum of the board of directors.
                    ``(B) Appointment of temporary directors.--If all 
                of the directors of a regulated entity are suspended 
                pursuant to this section, the Director shall appoint 
                persons to serve temporarily as directors pending the 
                termination of such suspensions, or until such time as 
                those who have been suspended cease to be directors of 
                the regulated entity and their respective successors 
                take office.
            ``(4) Hearing regarding continued participation.--
                    ``(A) In general.--Not later than 30 days after the 
                date of service of any notice of suspension or order of 
                removal issued pursuant to paragraph (1) or (2), the 
                entity-affiliated party may request in writing an 
                opportunity to appear before the Director to show that 
                the continued service or participation in the conduct 
                of the affairs of the regulated entity by such party 
                does not, or is not likely to, pose a threat to the 
                interests of the regulated entity, or threaten to 
                impair public confidence in the regulated entity.
                    ``(B) Timing and form of hearing.--Upon receipt of 
                a request for a hearing under subparagraph (A), the 
                Director shall fix a time (not later than 30 days after 
                the date of receipt of such request, unless extended at 
                the request of such party) and place at which the 
                entity-affiliated party may appear, personally or 
                through counsel, before the Director or 1 or more 
                designated employees of the Director to submit written 
                materials (or, at the discretion of the Director, oral 
                testimony) and oral argument.
                    ``(C) Determination.--Not later than 60 days after 
                the date of a hearing under subparagraph (B), the 
                Director shall notify the entity-affiliated party 
                whether the suspension or prohibition from 
                participation in any manner in the conduct of the 
                affairs of the regulated entity will be continued, 
                terminated, or otherwise modified, or whether the order 
                removing such party from office or prohibiting such 
                party from further participation in any manner in the 
                conduct of the affairs of the regulated entity will be 
                rescinded or otherwise modified. Such notification 
                shall contain a statement of the basis for any adverse 
                decision of the Director.
            ``(5) Rules.--The Director is authorized to prescribe such 
        rules as may be necessary to carry out this subsection.''.
    (b) Conforming Amendments.--
            (1) Safety and soundness act.--Subtitle C of title XIII of 
        the Federal Housing Enterprises Financial Safety and Soundness 
        Act of 1992 (42 U.S.C. 4501 et seq.) is amended--
                    (A) in section 1317(f), by striking ``section 
                1379B'' and inserting ``section 1379D'';
                    (B) in section 1373(a)--
                            (i) in paragraph (1), by striking ``or 
                        1376(c)'' and inserting ``, 1376(c), or 1377'';
                            (ii) in paragraph (2), by inserting ``or 
                        1377'' after''1371''; and
                            (iii) in paragraph (4), by inserting ``or 
                        removal or prohibition'' after ``cease and 
                        desist''; and
                    (C) in section 1374(a)--
                            (i) by striking ``or 1376'' and inserting 
                        ``, 1376, or 1377''; and
                            (ii) by striking ``such section'' and 
                        inserting ``this title''.
            (2) Fannie mae charter act.--Section 308(b) of the Federal 
        National Mortgage Association Charter Act (12 U.S.C. 1723(b)) 
        is amended in the second sentence, by striking ``The'' and 
        inserting ``Except to the extent that action under section 1377 
        of the Federal Housing Enterprises Financial Safety and 
        Soundness Act of 1992 temporarily results in a lesser number, 
        the''.
            (3) Freddie mac charter act.--Section 303(a)(2)(A) of the 
        Federal Home Loan Mortgage Corporation Act (12 U.S.C. 
        1452(a)(2)(A)) is amended, in the second sentence, by striking 
        ``The'' and inserting ``Except to the extent action under 
        section 1377 of the Federal Housing Enterprises Financial 
        Safety and Soundness Act of 1992 temporarily results in a 
        lesser number, the''.

SEC. 154. ENFORCEMENT AND JURISDICTION.

    (a) In General.--Section 1375 of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4635) is 
amended--
            (1) by striking subsection (a) and inserting the following:
    ``(a) Enforcement.--The Director may, in the discretion of the 
Director, apply to the United States District Court for the District of 
Columbia, or the United States district court within the jurisdiction 
of which the headquarters of the regulated entity is located, for the 
enforcement of any effective and outstanding notice, order, or subpoena 
issued under this title, or request that the Attorney General of the 
United States bring such an action. Such court shall have jurisdiction 
and power to order and require compliance with such notice, order, or 
subpoena.''; and
            (2) in subsection (b)--
                    (A) by striking ``section 1371, 1372, or 1376 or'';
                    (B) by inserting ``subtitle C, or section 1313A'' 
                after ``subtitle B,''; and
                    (C) by inserting ``, standard,'' after ``notice'' 
                each place that term appears.
    (b) Conforming Amendment.--Section 1379B of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4641) 
is amended by striking subsection (c) and redesignating subsection (d) 
as subsection (c).

SEC. 155. CIVIL MONEY PENALTIES.

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

SEC. 156. CRIMINAL PENALTY.

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

``SEC. 1378. CRIMINAL PENALTY.

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

SEC. 157. NOTICE AFTER SEPARATION FROM SERVICE.

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

SEC. 158. SUBPOENA AUTHORITY.

    Section 1379B of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4641) is amended--
            (1) in subsection (a)--
                    (A) in the matter preceding paragraph (1)--
                            (i) by striking ``administrative'';
                            (ii) by inserting ``, examination, or 
                        investigation'' after ``proceeding'';
                            (iii) by striking ``subchapter'' and 
                        inserting ``title''; and
                            (iv) by inserting ``or any designated 
                        representative thereof, including any person 
                        designated to conduct any hearing under this 
                        subtitle'' after ``Director''; and
                    (B) in paragraph (4), by striking ``issued by the 
                Director'';
            (2) in subsection (b), by inserting ``or in any territory 
        or other place subject to the jurisdiction of the United 
        States'' after ``State'';
            (3) by striking subsection (c) and inserting the following:
    ``(c) Enforcement.--
            ``(1) In general.--The Director, or any party to 
        proceedings under this subtitle, may apply to the United States 
        District Court for the District of Columbia, or the United 
        States district court for the judicial district of the United 
        States in any territory in which such proceeding is being 
        conducted, or where the witness resides or carries on business, 
        for enforcement of any subpoena or subpoena duces tecum issued 
        pursuant to this section.
            ``(2) Power of court.--The courts described under paragraph 
        (1) shall have the jurisdiction and power to order and require 
        compliance with any subpoena issued under paragraph (1)'';
            (4) in subsection (d), by inserting ``enterprise-affiliated 
        party'' before ``may allow''; and
            (5) by adding at the end the following:
    ``(e) Penalties.--A person shall be guilty of a misdemeanor, and 
upon conviction, shall be subject to a fine of not more than $1,000 or 
to imprisonment for a term of not more than 1 year, or both, if that 
person willfully fails or refuses, in disobedience of a subpoena issued 
under subsection (c), to--
            ``(1) attend court;
            ``(2) testify in court;
            ``(3) answer any lawful inquiry; or
            ``(4) produce books, papers, correspondence, contracts, 
        agreements, or such other records as requested in the 
        subpoena.''.

                     Subtitle E--General Provisions

SEC. 161. CONFORMING AND TECHNICAL AMENDMENTS.

    (a) Amendments to 1992 Act.--The Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.), as 
amended by this Act, is amended--
            (1) in section 1315 (12 U.S.C. 4515)--
                    (A) in subsection (a)--
                            (i) by striking ``(a) office personnel.--
                        The'' and inserting ``(a) in general.--Subject 
                        to title III of the Federal Housing Enterprise 
                        Regulatory Reform Act of 2007, the''; and
                            (ii) by striking ``the Office'' each place 
                        that term appears and inserting ``the Agency'';
                    (B) in subsection (c), by striking ``the Office'' 
                and inserting ``the Agency'';
                    (C) in subsection (e), by striking ``the Office'' 
                and inserting ``the Agency'';
                    (D) by striking subsections (d) and (f); and
                    (E) by redesignating subsection (e) as subsection 
                (d);
            (2) in section 1319A (12 U.S.C. 4520)--
                    (A) by striking ``(a) in general.--''; and
                    (B) by striking subsection (b);
            (3) in section 1364(c) (12 U.S.C. 4614(c)), by striking the 
        last sentence;
            (4) by striking section 1383 (12 U.S.C. 1451 note);
            (5) in each of sections 1319D, 1319E, and 1319F (12 U.S.C. 
        4523, 4524, 4525) by striking ``the Office'' each place that 
        term appears and inserting ``the Agency''; and
            (6) in each of sections 1319B and 1369(a)(3) (12 U.S.C. 
        4521, 4619(a)(3)), by striking ``Committee on Banking, Finance 
        and Urban Affairs'' each place that term appears and inserting 
        ``Committee on Financial Services''.
    (b) Amendments to Fannie Mae Charter Act.--The Federal National 
Mortgage Association Charter Act (12 U.S.C. 1716 et seq.) is amended--
            (1) in each of sections 303(c)(2) (12 U.S.C. 1718(c)(2)), 
        309(d)(3)(B) (12 U.S.C. 1723a(d)(3)(B)), and 309(k)(1) (12 
        U.S.C. 1723a(k)(1)), by striking ``Director of the Office of 
        Federal Housing Enterprise Oversight of the Department of 
        Housing and Urban Development'' each place that term appears, 
        and inserting ``Director of the Federal Housing Enterprise 
        Regulatory Agency'';
            (2) in section 309--
                    (A) in subsection (m) (12 U.S.C. 1723a(m))--
                            (i) in paragraph (1), by striking ``to the 
                        Secretary, in a form determined by the 
                        Secretary'' and inserting ``to the Director of 
                        the Federal Housing Enterprise Regulatory 
                        Agency, in a form determined by the Director''; 
                        and
                            (ii) in paragraph (2), by striking ``to the 
                        Secretary, in a form determined by the 
                        Secretary'' and inserting ``to the Director of 
                        the Federal Housing Enterprise Regulatory 
                        Agency, in a form determined by the Director'';
                    (B) in subsection (n) (12 U.S.C. 1723a(n))--
                            (i) in paragraph (1), by striking ``and the 
                        Secretary'' and inserting ``and the Director of 
                        the Federal Housing Enterprise Regulatory 
                        Agency''; and
                            (ii) in paragraph (2), by striking 
                        ``Secretary'' each place that term appears and 
                        inserting ``Director of the Federal Housing 
                        Enterprise Regulatory Agency''; and
                    (C) in paragraph (3)(B), by striking ``Secretary'' 
                and inserting ``Director of the Federal Housing 
                Enterprise Regulatory Agency''.
    (c) Amendments to Freddie Mac Charter Act.--The Federal Home Loan 
Mortgage Corporation Act (12 U.S.C. 1451 et seq.) is amended--
            (1) in each of sections 303(b)(2) (12 U.S.C. 1452(b)(2)), 
        303(h)(2) (12 U.S.C. 1452(h)(2)), and section 307(c)(1) (12 
        U.S.C. 1456(c)(1)), by striking ``Director of the Office of 
        Federal Housing Enterprise Oversight of the Department of 
        Housing and Urban Development'' each place that term appears, 
        and inserting ``Director of the Federal Housing Enterprise 
        Regulatory Agency'';
            (2) in section 306 (12 U.S.C. 1455)--
                    (A) in subsection (c)(2), by inserting ``the'' 
                after ``Secretary of'';
                    (B) in subsection (i)--
                            (i) by striking ``section 1316(c)'' and 
                        inserting ``section 306(c)''; and
                            (ii) by striking ``section 106'' and 
                        inserting ``section 1316''; and
                    (C) in subsection (j), by striking ``of 
                substantially'' and inserting ``or substantially''; and
            (3) in section 307 (12 U.S.C. 1456)--
                    (A) in subsection (e)--
                            (i) in paragraph (1), by striking ``to the 
                        Secretary, in a form determined by the 
                        Secretary'' and inserting ``to the Director of 
                        the Federal Housing Enterprise Regulatory 
                        Agency, in a form determined by the Director''; 
                        and
                            (ii) in paragraph (2), by striking ``to the 
                        Secretary, in a form determined by the 
                        Secretary'' and inserting ``to the Director of 
                        the Federal Housing Enterprise Regulatory 
                        Agency, in a form determined by the Director''; 
                        and
                    (B) in subsection (f)--
                            (i) in paragraph (1), by striking ``and the 
                        Secretary'' and inserting ``and the Director of 
                        the Federal Housing Enterprise Regulatory 
                        Agency'';
                            (ii) in paragraph (2), by striking ``the 
                        Secretary'' each place that term appears and 
                        inserting ``the Director of the Federal Housing 
                        Enterprise Regulatory Agency''; and
                            (iii) in paragraph (3)(B), by striking 
                        ``Secretary'' and inserting ``Director of the 
                        Federal Housing Enterprise Regulatory Agency''.
    (d) Amendment to Title 18, United States Code.--Section 1905 of 
title 18, United States Code, is amended by striking ``Office of 
Federal Housing Enterprise Oversight'' and inserting ``Federal Housing 
Enterprise Regulatory Agency''.
    (e) Amendment to Flood Disaster Protection Act of 1973.--Section 
102(f)(3)(A) of the Flood Disaster Protection Act of 1973 (42 U.S.C. 
4012a(f)(3)(A)) is amended by striking ``Director of the Office of 
Federal Housing Enterprise Oversight of the Department of Housing and 
Urban Development'' and inserting ``Director of the Federal Housing 
Enterprise Regulatory Agency''.
    (f) Amendment to Department of Housing and Urban Development Act.--
Section 5 of the Department of Housing and Urban Development Act (42 
U.S.C. 3534) is amended by striking subsection (d).
    (g) Amendment to Title 5, United States Code.--Section 5313 of 
title 5, United States Code, is amended by striking the item relating 
to the Director of the Office of Federal Housing Enterprise Oversight, 
Department of Housing and Urban Development and inserting the following 
new item:
            ``Director of the Federal Housing Enterprise Regulatory 
        Agency.''.
    (h) Amendment to Sarbanes-Oxley Act.--Section 105(b)(5)(B)(ii)(II) 
of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7215(b)(5)(B)(ii)(II)) is 
amended by inserting ``and the Director of the Federal Housing 
Enterprise Regulatory Agency,'' after ``Commission,''.
    (i) Amendment to 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:
                            ``(vii) The Federal Housing Enterprise 
                        Regulatory Agency.''.

SEC. 162. PRESIDENTIALLY APPOINTED DIRECTORS OF ENTERPRISES.

    (a) Fannie Mae.--
            (1) In general.--Section 308(b) of the Federal National 
        Mortgage Association Charter Act (12 U.S.C. 1723(b)) is 
        amended--
                    (A) in the first sentence, by striking ``eighteen 
                persons, five of whom shall be appointed annually by 
                the President of the United States, and the remainder 
                of whom'' and inserting ``13 persons, or such other 
                number that the Director determines appropriate, who'';
                    (B) in the second sentence, by striking ``appointed 
                by the President'';
                    (C) in the third sentence--
                            (i) by striking ``appointed or''; and
                            (ii) by striking ``, except that any such 
                        appointed member may be removed from office by 
                        the President for good cause'';
                    (D) in the fourth sentence, by striking 
                ``elective''; and
                    (E) by striking the fifth sentence.
            (2) Transitional provision.--The amendments made by 
        paragraph (1) shall not apply to any appointed position of the 
        board of directors of the Federal National Mortgage Association 
        until the expiration of the annual term for such position 
        during which the effective date under section 163 occurs.
    (b) Freddie Mac.--
            (1) In general.--Section 303(a)(2) of the Federal Home Loan 
        Mortgage Corporation Act (12 U.S.C. 1452(a)(2)) is amended--
                    (A) in subparagraph (A)--
                            (i) in the first sentence, by striking ``13 
                        persons, 5 of whom shall be appointed annually 
                        by the President of the United States and the 
                        remainder of whom'' and inserting ``13 persons, 
                        or such other number as the Director determines 
                        appropriate, who''; and
                            (ii) in the second sentence, by striking 
                        ``appointed by the President of the United 
                        States'';
                    (B) in subparagraph (B)--
                            (i) by striking ``such or''; and
                            (ii) by striking ``, except that any 
                        appointed member may be removed from office by 
                        the President for good cause''; and
                    (C) in subparagraph (C)--
                            (i) by striking the first sentence; and
                            (ii) by striking ``elective''.
            (2) Transitional provision.--The amendments made by 
        paragraph (1) shall not apply to any appointed position of the 
        board of directors of the Federal Home Loan Mortgage 
        Corporation until the expiration of the annual term for such 
        position during which the effective date under section 163 
        occurs.

SEC. 163. EFFECTIVE DATE.

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

                   TITLE II--FEDERAL HOME LOAN BANKS

SEC. 201. DIRECTORS.

    Section 7 of the Federal Home Loan Bank Act (12 U.S.C. 1427) is 
amended--
            (1) by striking subsection (a) and inserting the following:
    ``(a) Number; Election; Qualifications; Conflicts of Interest.--
            ``(1) In general.--Subject to paragraphs (2) through (4), 
        the management of each Federal Home Loan Bank shall be vested 
        in a board of 13 directors, or such other number as the 
        Director determines appropriate.
            ``(2) Board makeup.--The board of directors of each Bank 
        shall be comprised of--
                    ``(A) member directors, who shall comprise at least 
                the majority of the members of the board of directors; 
                and
                    ``(B) independent directors, who shall comprise not 
                fewer than \1/3\ of the members of the board of 
                directors.
            ``(3) Selection criteria.--
                    ``(A) In general.--Each member of the board of 
                directors shall be--
                            ``(i) elected by plurality vote of the 
                        members, in accordance with procedures 
                        established under this section; and
                            ``(ii) a citizen of the United States.
                    ``(B) Independent director criteria.--
                            ``(i) Public interest.--Not fewer than 2 of 
                        the independent directors shall be selected 
                        from among representatives of organizations 
                        having more than a 2-year history of 
                        representing consumer or community interests on 
                        banking services, credit needs, housing, or 
                        financial consumer protections.
                            ``(ii) Conflicts of interest.--No 
                        independent director may, during the term of 
                        service on the board of directors, serve as an 
                        officer of any Federal Home Loan Bank or as a 
                        director or officer of any member Bank.
            ``(4) Definitions.--For purposes of this section, the 
        following definitions shall apply:
                    ``(A) Independent director.--The terms `independent 
                director' and `independent directorship' mean a member 
                of the board of directors of a Federal Home Loan Bank 
                who is a bona fide resident of the district in which 
                the Federal Home Loan Bank is located, or the 
                directorship held by such a person, respectively.
                    ``(B) Member director.--The terms `member director' 
                and `member directorship' mean a member of the board of 
                directors of a Federal Home Loan Bank who is an officer 
                or director of a member institution that is located in 
                the district in which the Federal Home Loan Bank is 
                located, or the directorship held by such a person, 
                respectively.'';
            (2) by striking ``elective'' each place that term appears, 
        other than in subsections (d), (e), and (f), and inserting 
        ``member'';
            (3) in subsection (b)--
                    (A) by striking the subsection heading and all that 
                follows through ``Each elective directorship'' and 
                inserting the following:
    ``(b) Directorships.--
            ``(1) Member directorships.--Each member directorship''; 
        and
                    (B) by adding at the end the following:
            ``(2) Independent directorships.--
                    ``(A) Elections.--Each independent director--
                            ``(i) shall be elected by the members 
                        entitled to vote, from among eligible persons 
                        nominated by the board of directors of the 
                        Bank; and
                            ``(ii) shall be filled by a plurality of 
                        the votes of the members of the Bank at large, 
                        with each member having the number of votes for 
                        each such directorship as it has under 
                        subsection (b)(1) in an election to fill member 
                        directorships.
                    ``(B) Criteria.--Nominees shall meet all applicable 
                requirements prescribed in this section.
                    ``(C) Nomination and election procedures.--
                Procedures for nomination and election of independent 
                directors shall be prescribed by the bylaws of each 
                Federal Home Loan Bank, in a manner consistent with the 
                rules and regulations of the Agency.'';
            (4) in subsection (c), by striking the second, third, and 
        fifth sentences;
            (5) in subsection (d)--
                    (A) in the first sentence--
                            (i) by striking ``, whether elected or 
                        appointed,''; and
                            (ii) by striking ``3 years'' and inserting 
                        ``4 years'';
                    (B) in the second sentence--
                            (i) by striking ``Federal Home Loan Bank 
                        System Modernization Act of 1999'' and 
                        inserting ``Federal Housing Enterprise 
                        Regulatory Reform Act of 2007'';
                            (ii) by striking ``\1/3\'' and inserting 
                        ``\1/4\''; and
                            (iii) by striking ``or appointed''; and
                    (C) in the third sentence--
                            (i) by striking ``an elective'' each place 
                        that term appears and inserting ``a''; and
                            (ii) by striking ``in any elective 
                        directorship or elective directorships'';
            (6) in subsection (f)--
                    (A) by striking paragraph (2);
                    (B) by striking ``appointed or'' each place that 
                term appears; and
                    (C) in paragraph (3)--
                            (i) by striking ``(3) elected bank 
                        directors.--'' and inserting ``(2) election 
                        process.--''; and
                            (ii) by striking ``elective'' each place 
                        that term appears;
            (7) in subsection (i)--
                    (A) in paragraph (1), by striking ``(1) in 
                general.--Subject to paragraph (2), each'' and 
                inserting ``Each''; and
                    (B) by striking paragraph (2); and
            (8) by adding at the end the following:
    ``(l) Transition Rule.--Any member of the board of directors of a 
Bank elected or appointed in accordance with this section prior to the 
date of enactment of this subsection may continue to serve as a member 
of that board of directors for the remainder of the existing term of 
service.''.

SEC. 202. 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 Enterprise Regulatory Agency.
            ``(12) Agency.--The term `Agency' means the Federal Housing 
        Enterprise Regulatory Agency, established under section 1311 of 
        the Federal Housing Enterprises Financial Safety and Soundness 
        Act of 1992.
            ``(13) Finance facility.--The term `Finance Facility' means 
        the Federal Home Loan Bank Finance Facility established under 
        section 11A.''.

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

    The Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.), other than 
in provisions of that Act added or amended otherwise by this Act, is 
amended--
            (1) by striking sections 2A, 2B, and 20 (12 U.S.C. 1422a, 
        1422b, 1440);
            (2) in section 18 (12 U.S.C. 1438), by striking subsection 
        (b);
            (3) in section 11 (12 U.S.C. 1431)--
                    (A) by striking subsections (b) and (c);
                    (B) by redesignating subsections (d) through (k) as 
                subsections (c) through (j), respectively;
                    (C) in subsection (a)--
                            (i) by striking ``Board'' each place that 
                        term appears and inserting ``Director''; and
                            (ii) by striking ``upon such terms and 
                        conditions as the Board may approve''; and
                    (D) by inserting after subsection (a) the 
                following:
    ``(b) Issuance of Federal Home Loan Bank Bonds.--The Finance 
Facility may issue consolidated Federal Home Loan Bank debt, which 
shall be the joint and several obligations of all of the Federal Home 
Loan Banks, and shall be issued upon such terms and conditions as set 
by the Finance Facility for the Federal Home Loan Banks.'';
            (4) in section 6 (12 U.S.C. 1426)--
                    (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'';
            (5) in section 10(b) (12 U.S.C. 1430(b))--
                    (A) in the subsection heading, by striking ``Formal 
                Board Resolution'' and inserting ``Approval of 
                Director''; and
                    (B) by striking ``by formal resolution'';
            (6) in section 21(b)(5) (12 U.S.C. 1441(b)(5)), by striking 
        ``Chairperson of the Federal Housing Finance Board'' and 
        inserting ``Director'';
            (7) in section 15 (12 U.S.C. 1435), by striking ``issued 
        with the approval of the Board'' and inserting ``issued under 
        section 11(b)'';
            (8) by striking ``the Board'' each place that term appears 
        and inserting ``the Director'';
            (9) by striking ``The Board'' each place that term appears 
        and inserting ``The Director'';
            (10) by striking ``the Finance Board'' each place that term 
        appears and inserting ``the Director'';
            (11) by striking ``The Finance Board'' each place that term 
        appears and inserting ``The Director''; and
            (12) by striking ``Federal Housing Finance Board'' each 
        place that term appears and inserting ``Director''.

SEC. 204. FEDERAL HOME LOAN BANK FINANCE FACILITY.

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

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

    ``(a) Establishment.--
            ``(1) In general.--The Federal Home Loan Banks shall 
        establish a Federal Home Loan Bank Finance Facility.
            ``(2) Purposes.--The purposes of the Finance Facility are--
                    ``(A) to issue and service the consolidated 
                obligations of the Federal Home Loan Banks in 
                accordance with this Act; and
                    ``(B) to perform all other necessary and proper 
                functions in relation to the issuance and service of 
                such obligations, as fiscal agent on behalf of the 
                Federal Home Loan Banks, and any other functions 
                performed by the Office of Finance on behalf of the 
                Financing Corporation (established under section 21) 
                and the Resolution Funding Corporation (established 
                under section 21B).
            ``(3) Transfer of functions.--
                    ``(A) In general.--The functions of the Office of 
                Finance of the Federal Home Loan Banks shall be 
                transferred to the Finance Facility on the effective 
                time.
                    ``(B) Organizational meeting.--The organizational 
                meeting of the management board of the Finance Facility 
                shall occur as soon as practicable after the date of 
                enactment of the Federal Housing Enterprise Regulatory 
                Reform Act of 2007.
                    ``(C) Interim procedures.--Until the effective 
                time, the predecessor office shall continue to operate 
                as if this section had not been enacted.
                    ``(D) References.--After the effective time, any 
                reference under any provision of Federal law to the 
                Office of Finance and the Managing Director of the 
                Office of Finance shall be deemed to be references to 
                the Finance Facility and the chief executive officer of 
                the Finance Facility, respectively.
            ``(4) Succession.--
                            ``(A) Assets and liabilities.--On and after 
                        the effective time, the Finance Facility shall, 
                        by operation of law and without any further 
                        action by the Federal Housing Finance Board, 
                        the Director, the predecessor office, or any 
                        court, succeed to the assets of, and assume all 
                        debts, obligations, contracts, and other 
                        liabilities of the predecessor office, matured 
                        or unmatured, accrued or absolute, contingent 
                        or otherwise, and whether or not reflected or 
                        reserved against on balance sheets, books of 
                        account, or records of the predecessor office.
                            ``(B) Contracts.--On and after the 
                        effective time, the existing contractual 
                        obligations of the Federal Housing Finance 
                        Board, solely in its capacity as issuer of 
                        consolidated obligations of the Federal Home 
                        Loan Banks and the predecessor office shall, by 
                        operation of law and without any further action 
                        by the Federal Housing Finance Board, the 
                        Director, the predecessor office, or any court, 
                        become obligations, entitlements, and 
                        instruments of the Finance Facility.
                            ``(C) Taxation.--The succession to assets, 
                        assumption of liabilities, conversion of 
                        obligations and instruments, and effectuation 
                        of any other transaction by the Finance 
                        Facility to carry out this subsection shall not 
                        be treated as a taxable event under the laws of 
                        any State, or any political subdivision 
                        thereof.
    ``(b) Powers.--Subject to the provisions of this Act, and such 
regulations as the Director may prescribe, the Finance Facility shall 
have the power--
            ``(1) to issue and service Federal Home Loan Bank 
        consolidated notes, consolidated bonds, consolidated 
        debentures, and other consolidated obligations authorized under 
        section 11, as agent for the Federal Home Loan Banks;
            ``(2) to determine the amount, maturities, rate of 
        interest, terms, and other conditions of Federal Home Loan Bank 
        consolidated obligations;
            ``(3) to make contracts;
            ``(4) to determine the terms and conditions under which the 
        Finance Facility may indemnify the members of the management 
        board, as well as officers, employees, and agents of the 
        Finance Facility;
            ``(5) to determine and implement the methodology for 
        assessments of the Federal Home Loan Banks to fund all of the 
        expenses of the Finance Facility; and
            ``(6) to exercise such incidental powers not inconsistent 
        with the provisions of this Act as are necessary or advisable 
        to carry out the purposes of the Finance Facility.
    ``(c) Management of the Finance Facility.--
            ``(1) Establishment.--The management of the Finance 
        Facility shall be vested in a management board composed of the 
        president of each of the Federal Home Loan Banks, ex officio.
            ``(2) Duties.--The management board of the Finance Facility 
        shall administer the affairs of the Finance Facility in 
        accordance with the provisions of this section.
            ``(3) Interim appointments.--If the office of the president 
        of any Federal Home Loan Bank is vacant, the person serving in 
        such capacity on an acting basis shall serve on the management 
        board of the Finance Facility until replaced by the next person 
        to fill the office of the president of that Federal Home Loan 
        Bank.
            ``(4) Powers.--The management board of the Finance Facility 
        shall exercise such powers as may be necessary or advisable to 
        carry out this section, including the power to--
                    ``(A) set policies for the management and operation 
                of the Finance Facility;
                    ``(B) approve a strategic business plan for the 
                Finance Facility;
                    ``(C) review, adopt, and monitor annual operation 
                and capital budgets of the Finance Facility;
                    ``(D) constitute and perform the duties of an audit 
                committee, which to the extent possible shall operate 
                consistent with--
                            ``(i) the requirements established for the 
                        Federal Home Loan Banks; and
                            ``(ii) the requirements pertaining to audit 
                        committee reports set forth in the rules of the 
                        Securities and Exchange Commission;
                    ``(E) select, employ, determine the compensation 
                for, and assign the duties and functions of the 
                President of the Finance Facility, who shall--
                            ``(i) be the chief executive officer for 
                        the Finance Facility and shall direct the 
                        implementation of the policies adopted by the 
                        management board of the Finance Facility;
                            ``(ii) serve as a member of the Directorate 
                        of the Financing Corporation, under section 
                        21(b)(1)(A); and
                            ``(iii) serve as a member of the 
                        Directorate of the Resolution Funding 
                        Corporation under section 21B(c)(1)(A);
                    ``(F) provide for the review and approval of all 
                contracts of the Finance Facility;
                    ``(G) have the exclusive authority to employ and 
                contract for the services of an independent, external 
                auditor for the annual and quarterly combined financial 
                statements of the Federal Home Loan Banks; and
                    ``(H) select, evaluate, determine the compensation 
                of, and, as appropriate, replace the internal auditor 
                of the Finance Facility, who may be removed only by 
                vote of the management board of the Finance Facility.
            ``(5) Pay.--The members of the management board of the 
        Finance Facility shall not receive compensation for their 
        services as members of the management board.
            ``(6) Quorum requirement.--
                    ``(A) In general.--No business of the Finance 
                Facility may be conducted by the management board 
                unless a quorum of the members of the management board 
                is present in person or by telephone, or through action 
                taken by written consent executed by all of the members 
                of the management board.
                    ``(B) Number.--A quorum shall be a majority of the 
                members of the management board.
                    ``(C) Vote required.--Action taken by the 
                management board shall be approved by a majority of the 
                members in attendance at any meeting at which a quorum 
                is present, unless the management board adopts 
                procedures requiring a greater voting requirement.
            ``(7) Appointment of officers and adoption of rules of 
        procedure.--The management board of the Finance Facility 
        shall--
                    ``(A) select, from among the members of such board, 
                a Chairperson and a Vice Chairperson; and
                    ``(B) adopt bylaws and other rules of procedure for 
                actions before the management board, including--
                            ``(i) the establishment of 1 or more 
                        committees to take action on behalf of the 
                        management board; and
                            ``(ii) the delegation of powers of the 
                        management board to any committee or officer of 
                        the Finance Facility.
    ``(d) Status.--Except to the extent expressly provided in this Act, 
or in rules or regulations promulgated by the Director, or unless the 
context clearly indicates otherwise, the Finance Facility shall be 
accorded the same status as a Federal Home Loan Bank for purposes of 
any other provision of law (including section 13), other than section 
1369F of the Federal Housing Enterprises Financial Safety and Soundness 
Act of 1992.
    ``(e) Definitions.--As used in this section--
            ``(1) the term `effective time' means the conclusion of the 
        organizational meeting of the management board of the Finance 
        Facility;
            ``(2) the term `Finance Facility' includes a corporation, 
        partnership, limited liability company, or joint venture that 
        is jointly owned by the Federal Home Loan Banks;
            ``(3) the term `management board' means the management 
        board of the Finance Facility established in accordance with 
        subsection (c); and
            ``(4) the term `predecessor office' means the Office of 
        Finance established as a joint office of the Federal Home Loan 
        Banks.''.

SEC. 205. EXCLUSION FROM CERTAIN SECURITIES REPORTING REQUIREMENTS.

    (a) In General.--The Federal Home Loan Banks shall be exempt from 
compliance with--
            (1) sections 13(e), 14(a), 14(c), and 17A of the Securities 
        Exchange Act of 1934, and related Commission regulations; and
            (2) section 15 of the Securities Exchange Act of 1934, and 
        related Commission regulations, with respect to transactions in 
        the capital stock of a Federal Home Loan Bank.
    (b) Member Exemption.--The members of the Federal Home Loan Bank 
System shall be exempt from compliance with sections 13(d), 13(f), 
13(g), 14(d), and 16 of the Securities Exchange Act of 1934, and 
related Commission regulations, with respect to ownership of or 
transactions in the capital stock of the Federal Home Loan Banks by 
such members.
    (c) Exempted and Government Securities.--
            (1) Capital stock.--The capital stock issued by each of the 
        Federal Home Loan Banks under section 6 of the Federal Home 
        Loan Bank Act are--
                    (A) exempted securities, within the meaning of 
                section 3(a)(2) of the Securities Act of 1933; and
                    (B) exempted securities, within the meaning of 
                section 3(a)(12)(A) of the Securities Exchange Act of 
                1934.
            (2) Other obligations.--The debentures, bonds, and other 
        obligations issued under section 11 of the Federal Home Loan 
        Bank Act (12 U.S.C. 1431) are--
                    (A) exempted securities, within the meaning of 
                section 3(a)(2) of the Securities Act of 1933;
                    (B) government securities, within the meaning of 
                section 3(a)(42) of the Securities Exchange Act of 
                1934; and
                    (C) government securities, within the meaning of 
                section 2(a)(16) of the Investment Company Act of 1940.
            (3) Brokers and dealers.--A person that effects 
        transactions in the capital stock or other obligations of a 
        Federal Home Loan Bank, for the account of others or for his 
        own account, as applicable, is excluded from the definition 
        of--
                    (A) the term ``government securities broker'' under 
                section 3(a)(43) of the Securities Exchange Act of 
                1934; and
                    (B) the term ``government securities dealer'' under 
                section 3(a)(44) of the Securities Exchange Act of 
                1934.
    (d) Exemption From Reporting Requirements.--The Federal Home Loan 
Banks shall be exempt from periodic reporting requirements under the 
securities laws pertaining to the disclosure of--
            (1) related party transactions that occur in the ordinary 
        course of the business of the Banks with members; and
            (2) the unregistered sales of equity securities.
    (e) Tender Offers.--Commission rules relating to tender offers 
shall not apply in connection with transactions in the capital stock of 
the Federal Home Loan Banks.
    (f) Regulations.--
            (1) Final rules.--Not later than 1 year after the date of 
        enactment of this Act, the Commission shall issue final rules 
        to implement this section and the exemptions provided in this 
        section.
            (2) Considerations.--In issuing final regulations under 
        this section, the Commission shall consider the distinctive 
        characteristics of the Federal Home Loan Banks when 
        evaluating--
                    (A) the accounting treatment with respect to the 
                payment to the Resolution Funding Corporation;
                    (B) the role of the combined financial statements 
                of the Federal Home Loan Banks;
                    (C) the accounting classification of redeemable 
                capital stock; and
                    (D) the accounting treatment related to the joint 
                and several nature of the obligations of the Banks.
    (g) Definitions.--As used in this section--
            (1) the terms ``Bank'', ``Federal Home Loan Bank'', 
        ``member'', and ``Federal Home Loan Bank System'' have the same 
        meanings as in section 2 of the Federal Home Loan Bank Act (12 
        U.S.C. 1422);
            (2) the term ``Commission'' means the Securities and 
        Exchange Commission; and
            (3) the term ``securities laws'' has the same meaning as in 
        section 3(a)(47) of the Securities Exchange Act of 1934 (15 
        U.S.C. 78c(a)(47)).

SEC. 206. MERGERS.

    Section 26 of the Federal Home Loan Bank Act (12 U.S.C. 1446) is 
amended--
            (1) by striking ``Whenever'' and inserting ``(a) in 
        general.--Whenever''; and
            (2) by adding at the end the following:
    ``(b) Mergers Authorized.--
            ``(1) In general.--Any Federal Home Loan Bank may, with the 
        approval of the Director and of the boards of directors of the 
        Banks involved, merge with another Bank.
            ``(2) Regulations required.--The Director shall promulgate 
        regulations establishing the conditions and procedures for the 
        consideration and approval of any voluntary merger described in 
        paragraph (1).''.

SEC. 207. AUTHORITY TO REDUCE DISTRICTS.

    Section 3 of the Federal Home Loan Bank Act (12 U.S.C. 1423) is 
amended--
            (1) by striking ``As soon'' and inserting ``(a) in 
        general.--As soon''; and
            (2) by adding at the end the following:
    ``(b) Authority to Reduce Districts.--Notwithstanding subsection 
(a), the number of districts may be reduced to a number less than 8--
            ``(1) pursuant to a voluntary merger between Banks, as 
        approved pursuant to section 26(b); or
            ``(2) pursuant to a decision by the Director to liquidate a 
        bank pursuant to section 1367 of the Federal Housing 
        Enterprises Financial Safety and Soundness Act of 1992.''.

SEC. 208. MANAGEMENT OF HOME LOAN BANKS.

    (a) Board of Directors.--Section 7(a)(1) of the Federal Home Loan 
Bank Act (12 U.S.C. 1427(a)(1)) is amended to read as follows:
            ``(1) In general.--Subject to paragraphs (2) through (4), 
        and except to the extent that action under section 1377 of the 
        Federal Housing Enterprises Financial Safety and Soundness Act 
        of 1992 results in a lesser number, the management of each 
        Federal home loan bank shall be vested in a board of 13 
        directors, or such other number as the board of directors of 
        each Federal home loan bank determines appropriate.''.
    (b) Apportionment Among States; Designation of State Location.--
Section 7(c) of the Federal Home Loan Bank Act (12 U.S.C. 1427(c)) is 
amended to read s follows:
    ``(c) Apportionment Among States; Designation of State Location.--
The number of elective directorships designated as representing the 
members located in each separate State in a bank district shall be 
determined by the Director, in the approximate ratio of the percentage 
of the required stock, as determined pursuant to regulation of the 
Director, of the members located in the State at the end of the 
calendar year next preceding the date of the election to the total 
required stock, as so determined, of all members of such bank at the 
end of such year, except that in the case of each State, such number 
shall not be less than 1 or 2, as determined by the board of directors 
of each Federal home loan bank, and shall be not more than 6.''.

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

                           Subtitle A--OFHEO

SEC. 301. ABOLISHMENT OF OFHEO.

    (a) In General.--Effective at the end of the 1-year period 
beginning on the date of enactment of this Act, the Office of Federal 
Housing Enterprise Oversight of the Department of Housing and Urban 
Development and the positions of the Director and Deputy Director of 
such Office are abolished.
    (b) Disposition of Affairs.--During the 1-year period beginning on 
the date of enactment of this Act, the Director of the Office of 
Federal Housing Enterprise Oversight, solely for the purpose of winding 
up the affairs of the Office of Federal Housing Enterprise Oversight--
            (1) shall manage the employees of such Office and provide 
        for the payment of the compensation and benefits of any such 
        employee which accrue before the effective date of the transfer 
        of such employee under section 303; and
            (2) may take any other action necessary for the purpose of 
        winding up the affairs of the Office.
    (c) Status of Employees Before Transfer.--The amendments made by 
title I and the abolishment of the Office of Federal Housing Enterprise 
Oversight under subsection (a) of this section may not be construed to 
affect the status of any employee of such Office as an employee of an 
agency of the United States for purposes of any other provision of law 
before the effective date of the transfer of any such employee under 
section 303.
    (d) Use of Property and Services.--
            (1) Property.--The Director may use the property of the 
        Office of Federal Housing Enterprise Oversight to perform 
        functions which have been transferred to the Director 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 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 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--
                            (i) the Federal Housing Enterprises 
                        Financial Safety and Soundness Act of 1992;
                            (ii) the Federal National Mortgage 
                        Association Charter Act;
                            (iii) the Federal Home Loan Mortgage 
                        Corporation Act;
                            (iv) or any other provision of law 
                        applicable with respect to such Office; and
                    (B) existed on the day before the date of 
                abolishment under subsection (a).
            (2) Continuation of suits.--No action or other proceeding 
        commenced by or against the Director of the Office of Federal 
        Housing Enterprise Oversight in connection with functions that 
        are transferred to the Director of the Federal Housing 
        Enterprise Regulatory Agency shall abate by reason of the 
        enactment of this Act, except that the Director of the Federal 
        Housing Enterprise Regulatory Agency shall be substituted for 
        the Director of the Office of Federal Housing Enterprise 
        Oversight as a party to any such action or proceeding.

SEC. 302. CONTINUATION AND COORDINATION OF CERTAIN REGULATIONS.

    (a) In General.--All regulations, orders, and determinations 
described in subsection (b) shall remain in effect according to the 
terms of such regulations, orders, and determinations, and shall be 
enforceable by or against the Director or the Secretary of Housing and 
Urban Development, as the case may be, until modified, terminated, set 
aside, or superseded in accordance with applicable law by the Director 
or the Secretary, as the case may be, any court of competent 
jurisdiction, or operation of law.
    (b) Applicability.--A regulation, order, or determination is 
described in this subsection if it--
            (1) was issued, made, prescribed, or allowed to become 
        effective by--
                    (A) the Office of Federal Housing Enterprise 
                Oversight;
                    (B) the Secretary of Housing and Urban Development, 
                and relates to the authority of the Secretary under--
                            (i) the Federal Housing Enterprises 
                        Financial Safety and Soundness Act of 1992;
                            (ii) the Federal National Mortgage 
                        Association Charter Act, with respect to the 
                        Federal National Mortgage Association; or
                            (iii) the Federal Home Loan Mortgage 
                        Corporation Act, with respect to the Federal 
                        Home Loan Mortgage Corporation; or
                    (C) a court of competent jurisdiction, and relates 
                to functions transferred by this Act; and
            (2) is in effect on the effective date of the abolishment 
        under section 301(a).

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

    (a) Transfer.--Each employee of the Office of Federal Housing 
Enterprise Oversight shall be transferred to the Agency for employment, 
not later than the effective date of the abolishment under section 
301(a), and such transfer shall be deemed a transfer of function for 
purposes of section 3503 of title 5, United States Code.
    (b) Guaranteed Positions.--
            (1) In general.--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.
            (2) No involuntary separation or reduction.--An employee 
        transferred under subsection (a) holding a permanent position 
        on the day immediately preceding the transfer may not be 
        involuntarily separated or reduced in grade or compensation 
        during the 12-month period beginning on the date of transfer, 
        except for cause, or, in the case of a temporary employee, 
        separated in accordance with the terms of the appointment of 
        the employee.
    (c) Appointment Authority for Excepted and Senior Executive Service 
Employees.--
            (1) In general.--In the case of an employee occupying a 
        position 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 position shall be transferred, subject to paragraph (2).
            (2) Decline of transfer.--The Director may decline a 
        transfer of authority under paragraph (1) to the extent that 
        such authority relates to--
                    (A) a position excepted from the competitive 
                service because of its confidential, policymaking, 
                policy-determining, or policy-advocating character; or
                    (B) a noncareer position in the Senior Executive 
                Service (within the meaning of section 3132(a)(7) of 
                title 5, United States Code).
    (d) Reorganization.--If the Director determines, after the end of 
the 1-year period beginning on the effective date of the abolishment 
under section 301(a), that a reorganization of the combined workforce 
is required, that reorganization shall be deemed a major reorganization 
for purposes of affording affected employee retirement under section 
8336(d)(2) or 8414(b)(1)(B) of title 5, United States Code.
    (e) Employee Benefit Programs.--
            (1) In general.--Any employee of the Office of Federal 
        Housing Enterprise Oversight accepting employment with the 
        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 Agency 
        or the Office of Federal Housing Enterprise Oversight of the 
        Department of Housing and Urban Development, as applicable, 
        including insurance, to which such employee belongs on the date 
        of the abolishment under section 301(a), if--
                    (A) the employee does not elect to give up the 
                benefit or membership in the program; and
                    (B) the benefit or program is continued by the 
                Director of the Federal Housing Enterprise Regulatory 
                Agency.
            (2) Cost differential.--
                    (A) In general.--The difference in the costs 
                between the benefits which would have been provided by 
                the Office of Federal Housing Enterprise Oversight and 
                those provided by this section shall be paid by the 
                Director.
                    (B) Health insurance.--If any employee elects to 
                give up membership in a health insurance program or the 
                health insurance program is not continued by the 
                Director, the employee shall be permitted to select an 
                alternate Federal health insurance program not later 
                than 30 days after the date of such election or notice, 
                without regard to any other regularly scheduled open 
                season.

SEC. 304. TRANSFER OF PROPERTY AND FACILITIES.

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

               Subtitle B--Federal Housing Finance Board

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

    (a) In General.--Effective at the end of the 1-year period 
beginning on the date of enactment of this Act, the Federal Housing 
Finance Board (in this subtitle referred to as the ``Board'') is 
abolished.
    (b) Disposition of Affairs.--During the 1-year period beginning on 
the date of enactment of this Act, the Board, solely for the purpose of 
winding up the affairs of the Board--
            (1) shall manage the employees of the 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 313; 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 the Board 
as an employee 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 313.
    (d) Use of Property and Services.--
            (1) Property.--The Director may use the property of the 
        Board to perform functions which have been transferred to the 
        Director, for such time as is reasonable to facilitate the 
        orderly transfer of functions transferred under any other 
        provision of this Act or any amendment made by this Act to any 
        other provision of law.
            (2) Agency services.--Any agency, department, or other 
        instrumentality of the United States, and any successor to any 
        such agency, department, or instrumentality, which was 
        providing supporting services to the Board before the 
        expiration of the 1-year period under subsection (a) in 
        connection with functions that are transferred to the Director 
        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 
                the 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 under this Act to the Director shall abate 
        by reason of the enactment of this Act, except that the 
        Director shall be substituted for the Board or any member 
        thereof as a party to any such action or proceeding.

SEC. 312. CONTINUATION AND COORDINATION OF CERTAIN REGULATIONS.

    (a) In General.--All regulations, orders, and determinations 
described under subsection (b) shall remain in effect according to the 
terms of such regulations, orders, and determinations, and shall be 
enforceable by or against the Director until modified, terminated, set 
aside, or superseded in accordance with applicable law by the 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 Act; and
            (2) is in effect on the effective date of the abolishment 
        under section 311(a).

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

    (a) Transfer.--Each employee of the Board shall be transferred to 
the Agency for employment, not later than the effective date of the 
abolishment under section 311(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.--
            (1) In general.--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.
            (2) No involuntary separation or reduction.--An employee 
        holding a permanent position on the day immediately preceding 
        the transfer may not be involuntarily separated or reduced in 
        grade or compensation during the 12-month period beginning on 
        the date of transfer, except for cause, or, if the employee is 
        a temporary employee, separated in accordance with the terms of 
        the appointment of the employee.
    (c) Appointment Authority for Excepted and Senior Executive Service 
Employees.--
            (1) In general.--In the case of an employee occupying a 
        position 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 position shall be transferred, subject to paragraph (2).
            (2) Decline of transfer.--The Director may decline a 
        transfer of authority under paragraph (1) to the extent that 
        such authority relates to--
                    (A) a position excepted from the competitive 
                service because of its confidential, policymaking, 
                policy-determining, or policy-advocating character; or
                    (B) a noncareer position in the Senior Executive 
                Service (within the meaning of section 3132(a)(7) of 
                title 5, United States Code).
    (d) Reorganization.--If the Director determines, after the end of 
the 1-year period beginning on the effective date of the abolishment 
under section 311(a), that a reorganization of the combined workforce 
is required, that reorganization shall be deemed a major reorganization 
for purposes of affording affected employee 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 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 Agency or the Board, as applicable, including insurance, 
        to which such employee belongs on the effective date of the 
        abolishment under section 311(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.
            (2) Cost differential.--
                    (A) In general.--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.
                    (B) Health insurance.--If any employee elects to 
                give up membership in a health insurance program or the 
                health insurance program is not continued by the 
                Director, the employee shall be permitted to select an 
                alternate Federal health insurance program not later 
                than 30 days after the date of such election or notice, 
                without regard to any other regularly scheduled open 
                season.

SEC. 314. TRANSFER OF PROPERTY AND FACILITIES.

    Upon the effective date of the abolishment under section 311(a), 
all property of the Board shall transfer to the Agency.

                     TITLE IV--STUDIES AND REPORTS

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

    (a) Study.--The Board of Governors of the Federal Reserve System 
shall conduct a study on the effects on the regulated entities of the 
new Basel Capital Accord (Basel II), as endorsed by the Group of Ten 
countries in ``The International Convergence of Capital Measurement and 
Capital Standards: a Revised Framework''. The study shall examine the 
debt of the regulated entities and the capital classification on 
financial institutions that hold such debt.
    (b) Report.--The Chairman of the Board of Governors of the Federal 
Reserve System shall submit a report to Congress on the results of the 
study required by this section not later than 2 years after the date of 
enactment of this Act.

SEC. 402. AFFORDABLE HOUSING AUDITS.

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

SEC. 403. REPORT ON INSURED DEPOSITORY INSTITUTION HOLDINGS OF 
              REGULATED ENTITY DEBT AND MORTGAGE-BACKED SECURITIES.

    Not later than 2 years after the date of enactment of this Act, the 
Director, the Secretary of the Treasury, the Board of Governors of the 
Federal Reserve System, the Board of Directors of the Federal Deposit 
Insurance Corporation, and the National Credit Union Administration 
Board shall jointly submit a report to Congress regarding--
            (1) the extent to which obligations issued or guaranteed by 
        the regulated entities (including mortgage-backed securities) 
        are held by federally insured depository institutions, 
        including such extent by type of institution and such extent 
        relative to the capital of the institution;
            (2) the extent to which the unlimited holdings by federally 
        insured depository institutions of the obligations of the 
        regulated entities could produce systemic risk issues, 
        particularly for the safety and soundness of the banking system 
        in the United States, in the event of default or failure by a 
        regulated entity;
            (3) the effects on the regulated entities, the banking 
        industry, and mortgage markets, if prudent limits on the 
        holdings of the obligations of a regulated entity were placed 
        on federally insured depository institutions; and
            (4) the extent to which alternative investments are 
        available to community depository institutions, and the impact 
        that such alternative investments would have on the safety and 
        soundness and capital levels of such community depository 
        institutions.

SEC. 404. REPORT ON RISK-BASED CAPITAL LEVELS.

    (a) In General.--The Director shall submit a report to Congress at 
the end of each fiscal quarter regarding--
            (1) the risk-based capital levels for the regulated 
        entities under section 1361 of the Federal Housing Enterprises 
        Financial Safety and Soundness Act of 1992, as amended by this 
        Act, including a description of the risk-based capital test 
        under that section 1361 and any assumptions of the Director and 
        factors used by the Director in establishing the test; and
            (2) the minimum and critical capital levels for the 
        regulated entities pursuant to sections 1362 and 1363, 
        respectively, of that Act, as so amended.
    (b) Timing.--Each report under this section shall be submitted not 
later than 60 days after the end of each fiscal quarter.

SEC. 405. REPORT ON RESOURCES AND ALLOCATIONS.

    The Comptroller General of the United States shall submit a report 
to Congress annually, on a fiscal year basis, regarding--
            (1) the allocation of resources of the Agency by the 
        Director; and
            (2) the level of assessments collected by the Director for 
        the operation of the Agency.

SEC. 406. STUDY AND REPORT ON GUARANTEE FEES.

    (a) Ongoing Study of Fees.--The Director shall conduct an ongoing 
study of fees charged by enterprises for guaranteeing a mortgage.
    (b) Collection of Data.--The Director shall, by regulation or 
order, establish procedures for the collection of data from enterprises 
for purposes of this subsection, including the format and the process 
for collection of such data.
    (c) Report to Congress.--The Director shall annually submit a 
report to Congress on the results of the study conducted under 
subsection (a), based on the aggregated data collected under subsection 
(a) for the subject year, regarding the amount of such fees and the 
criteria used by the enterprises to determine such fees.
    (d) Contents of Reports.--The reports required under subsection (c) 
shall identify and analyze--
            (1) the factors considered in determining the amount of the 
        guarantee fees charged;
            (2) the total revenue earned by the enterprises 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 any increase or decrease in guarantee 
        fees from the preceding year;
            (6) a breakdown of the revenue and costs associated with 
        providing guarantees, based on product type and risk 
        classifications; and
            (7) a breakdown of guarantee fees charged based on asset 
        size of the originator and the number of loans sold or 
        transferred to an enterprise.
    (e) Protection of Information.--Nothing in this section may be 
construed to require or authorize the Director to publicly disclose 
information that is confidential or proprietary.

SEC. 407. REPORT ON CONFORMING LOAN LIMITS.

    The Comptroller General of the United States shall submit a report 
to Congress on whether raising the loan limits under section 302(b) of 
the Federal National Mortgage Association Act (12 U.S.C. 1717(b)) and 
section 305(a) of the Federal Home Loan Mortgage Corporation Act (12 
U.S.C. 1454(a)) would promote the availability of affordable housing.

SEC. 408. REVIEWS AND STUDIES RELATING TO ENTERPRISES AND RELATED 
              FOUNDATIONS.

    (a) Annual Reviews.--The Director shall annually conduct a review 
of the Freddie Mac Foundation and the Office of Corporate Giving of the 
Federal National Mortgage Corporation (formerly known as the ``Fannie 
Mae Foundation''), or any successors thereto, to ensure that such 
entities are not engaged in impermissible lobbying activities.
    (b) Study on Lobbying Activities To Obstruct Special Examination.--
The Director shall conduct a study to determine whether any actions or 
inactions by an OFHEO-designated executive officer of a Government-
Sponsored Enterprise, that was an employee of the Government-Sponsored-
Enterprise during the period of review of the OFHEO Special Examination 
of Accounting Policies and Practices of Fannie Mae for the years 1998 
through mid-2004 and remains an employee of such Government-Sponsored 
Enterprise as of the date of enactment of this Act, were intended to 
obstruct the Special Examination by OFHEO.
    (c) Report.--The Director shall submit a report to Congress on the 
results of the reviews and study required under subsections (a) and 
(b), not later than 60 days after the date of enactment of this Act, 
and annually thereafter with respect to the reviews conducted under 
subsection (a).

SEC. 409. RECOMMENDATIONS.

    Each report submitted pursuant to this title shall include specific 
recommendations, if any, of appropriate policies, limitations, 
regulations, legislation, or other actions to deal appropriately and 
effectively with the issues addressed by such report.
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