I 112th CONGRESS 1st Session H. R. 1225 IN THE HOUSE OF REPRESENTATIVES March 29, 2011 Mr. Pearce (for himself, Mr. Garrett, Mr. Bachus, and Mr. Hensarling) introduced the following bill; which was referred to the Committee on Financial Services A BILL To prohibit Fannie Mae and Freddie Mac from issuing any new debt without approval in advance by the Secretary of the Treasury.

1.

Short title

This Act may be cited as the GSE Debt Issuance Approval Act of 2011.

2.

Prohibition of issuance of new debt by enterprises without advance approval by Treasury

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

1369F.

Requirements for issuance of new debt

(a)

Requirement for advance approval by Treasury

An enterprise shall not, after the date of the enactment of the GSE Debt Issuance Approval Act of 2011, newly issue any note, bill, bond, debenture, or any other debt security, obligation, or instrument of any form or in any amount unless the issuance of such debt security, obligation, or instrument was approved in advance in accordance with this section by the Secretary of the Treasury (in this section referred to as the Secretary). (b)

Written request

The Secretary may not approve the issuance of any debt security, obligation, or instrument under this section by an enterprise unless the enterprise has submitted to the Secretary of the Treasury and to the Director, in such form as the Secretary shall require, a written request identifying and describing the debt securities, obligations, and instruments proposed to be issued, including the par values, terms to maturity, interest rates, forms, timing of issuance, and all other terms regarding issuance of such securities, obligations, and instruments. (c)

Determination and justification

Upon receiving a written request pursuant to subsection (b) for approval of the issuance of debt by an enterprise, the Secretary shall promptly review the request, make a determination of whether to approve or deny the request, taking into consideration any information or comments of the Director regarding such request, and submit to the enterprise, the Congress, and the Director written notice of approval or denial of the request, which shall include an explanation and justification for the approval or denial of the issuance of the new debt. (d)

Conditional approval

In approving a request under this section by an enterprise to issue any debt security, obligation, or instrument, the Secretary may, in the written notice of approval of such request pursuant to subsection (c), limit or change the terms of the issuance of the debt securities, obligations, or instruments approved for issuance from the terms of the proposed issuance of securities, obligations, or instruments described in the request for such approval submitted by the enterprise pursuant to subsection (b). (e)

Effective date

Notwithstanding approval under this section of the issuance of debt by an enterprise or submission of the notice of such approval as required under subsection (c), the enterprise may not issue any debt security, obligation, or instrument pursuant to such approval before the expiration of the 7-day period beginning upon submission of such notice of approval to the Congress.

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