HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1992
Public Law 102–550, as amended
106 Stat. 3941, as amended
HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1992
550
117–286
Statute Compilation
United States House of Representatives
Office of the Legislative Counsel
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
GPO Statute Compilations USLM converter, version 20230403.1
2024-03-01
Multifamily Housing Finance Improvement Act
Community Investment Corporation Demonstration Act
Community Outreach Partnership Act of 1992
Federal Housing Enterprises Financial Safety and Soundness Act of 1992
Residential Lead-Based Paint Hazard Reduction Act of 1992
Housing and Community Development Act of 1992
Removal of Regulatory Barriers to Affordable Housing Act of 1992
10705
102
1992-10-28
HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1992
[Public Law 102–550; 106 Stat. 3941; 12 U.S.C. 4501 et seq.]
[As Amended Through P.L. 117–286, Enacted December 27, 2022]
[Currency: This publication is a compilation of the text of Public Law 102–550. It was last amended by the public law listed in the As Amended Through note above and below at the bottom of each page of the pdf version and reflects current law through the date of the enactment of the public law listed at https://www.govinfo.gov/app/collection/comps/]
[Note: While this publication does not represent an official version of any Federal statute, substantial efforts have been made to ensure the accuracy of its contents. The official version of Federal law is found in the United States Statutes at Large and in the United States Code. The legal effect to be given to the Statutes at Large and the United States Code is established by statute (1 U.S.C. 112, 204).]
* * * * * * *
TITLE I—

HOUSING ASSISTANCE
* * * * * * *
Subtitle E—

Homeownership Programs
* * * * * * *
SEC. 184.
[12 U.S.C. 1715z–13a]

LOAN GUARANTEES FOR INDIAN HOUSING.
(a)

Authority.—
To provide access to sources of private financing to Indian families, Indian housing authorities, and Indian tribes, who otherwise could not acquire housing financing because of the unique legal status of Indian lands, the Secretary may guarantee not to exceed 100 percent of the unpaid principal and interest due on any loan eligible under subsection (b) made to an Indian family, Indian housing authority, or Indian tribe.
(b)

Eligible Loans.—
Loans guaranteed pursuant to this section shall meet the following requirements:
(1)

Eligible borrowers.—
The loans shall be made only to borrowers who are Indian families, Indian housing authorities, or Indian tribes.
(2)

Eligible housing.—
The loan shall be used to construct, acquire, refinance, or rehabilitate 1- to 4-family dwellings that are standard housing and are located on trust land or land located in an Indian or Alaska Native area.
(3)

Security.—
The loan may be secured by any collateral authorized under existing Federal law or applicable State or tribal law.
(4)

Lenders.—
The loan shall be made only by a lender approved by and meeting qualifications established by the Secretary, except that loans otherwise insured or guaranteed by an agency of the Federal Government or made by an organization of Indians from amounts borrowed from the United States shall not be eligible for guarantee under this section. The following lenders are deemed to be approved under this paragraph:
(A)
Any mortgagee approved by the Secretary of Housing and Urban Development for participation in the single family mortgage insurance program under title II of the National Housing Act.
(B)
Any lender whose housing loans under chapter 37 of title 38, United States Code are automatically guaranteed pursuant to section 1802(d) of such title.
(C)
Any lender approved by the Secretary of Agriculture to make guaranteed loans for single family housing under the Housing Act of 1949.
(D)
Any other lender that is supervised, approved, regulated, or insured by any agency of the Federal Government.
(5)

Terms.—
The loan shall—
(A)
be made for a term not exceeding 30 years;
(B)
bear interest (exclusive of the guarantee fee under section 404 and service charges, if any) at a rate agreed upon by the borrower and the lender and determined by the Secretary to be reasonable, which may not exceed the rate generally charged in the area (as determined by the Secretary) for home mortgage loans not guaranteed or insured by any agency or instrumentality of the Federal Government;
(C)
involve a principal obligation not exceeding—
(i)
97.75 percent of the appraised value of the property as of the date the loan is accepted for guarantee (or 98.75 percent if the value of the property is $50,000 or less); and
(ii)
the amount approved by the Secretary under this section; and
(D)
involve a payment on account of the property (i) in cash or its equivalent, or (ii) through the value of any improvements to the property made through the skilled or unskilled labor of the borrower, as the Secretary shall provide.
(c)

Certificate of Guarantee.—
(1)

Approval process.—
Before the Secretary approves any loan for guarantee under this section, the lender shall submit the application for the loan to the Secretary for examination. If the Secretary approves the loan for guarantee, the Secretary shall issue a certificate under this paragraph as evidence of the guarantee.
(2)

Standard for approval.—
The Secretary may approve a loan for guarantee under this section and issue a certificate under this paragraph only if the Secretary determines there is a reasonable prospect of repayment of the loan.
(3)

Effect.—
A certificate of guarantee issued under this paragraph by the Secretary shall be conclusive evidence of the eligibility of the loan for guarantee under the provisions of this section and the amount of such guarantee. Such evidence shall be incontestable in the hands of the bearer and the full faith and credit of the United States is pledged to the payment of all amounts agreed to be paid by the Secretary as security for such obligations.
(4)

Fraud and misrepresentation.—
This subsection may not be construed to preclude the Secretary from establishing defenses against the original lender based on fraud or material misrepresentation or to bar the Secretary from establishing by regulations in effect on the date of issuance or disbursement, whichever is earlier, partial defenses to the amount payable on the guarantee.
(5)

Trailing documents.—
(A)

In general.—
The Secretary may issue a certificate of guarantee under this subsection for a loan involving a security interest in Indian trust land before the Secretary receives the trailing documents required by the Secretary from the Bureau of Indian Affairs, including the final certified title status report showing the recordation by the Bureau of Indian Affairs of the mortgage relating to the loan, if the originating lender agrees to indemnify the Secretary for any losses that may result when—
(i)
a claim payment is presented to the Secretary due to the default of the borrower on the loan; and
(ii)
the required trailing documents are outstanding.
(B)

Termination of indemnification agreement.—
An indemnification agreement between an originating lender and the Secretary described in subparagraph (A) shall only terminate upon receipt by the Secretary of the trailing documents described in that subparagraph in a form and manner that is acceptable to the Secretary.
(C)

Rule of construction.—
Nothing in this paragraph shall be construed as authorizing the Bureau of Indian Affairs to delay the issuance of a final certified title status report and recorded mortgage relating to a loan closed on Indian trust land.
(d)

Guarantee Fee.—
The Secretary shall establish and collect, at the time of issuance of the guarantee, a fee for the guarantee of loans under this section, in an amount not exceeding 3 percent of the principal obligation of the loan. The Secretary may also establish and collect annual premium payments in an amount not exceeding 1 percent of the remaining guaranteed balance (excluding the portion of the remaining balance attributable to the fee collected at the time of issuance of the guarantee). The Secretary shall establish the amount of the fees and premiums by publishing a notice in the Federal Register. The Secretary shall deposit any fees and premiums collected under this subsection in the Indian Housing Loan Guarantee Fund established under subsection (i).
(e)

Liability Under Guarantee.—
The liability under a guarantee provided under this section shall decrease or increase on a pro rata basis according to any decrease or increase in the amount of the unpaid obligation under the provisions of the loan agreement.
(f)

Transfer and Assumption.—
Notwithstanding any other provision of law, any loan guaranteed under this section, including the security given for the loan, may be sold or assigned by the lender to any financial institution subject to examination and supervision by an agency of the Federal Government or of any State or the District of Columbia.
(g)

Disqualification of Lenders and Civil Money Penalties.—
(1)

In general.—
If the Secretary determines that any lender or holder of a guarantee certificate under subsection (c) has failed to maintain adequate accounting records, to adequately service loans guaranteed under this section, to exercise proper credit or underwriting judgment, or has engaged in practices otherwise detrimental to the interest of a borrower or the United States, the Secretary may—
(A)
refuse, either temporarily or permanently, to guarantee any further loans made by such lender or holder;
(B)
bar such lender or holder from acquiring additional loans guaranteed under this section; and
(C)
require that such lender or holder assume not less than 10 percent of any loss on further loans made or held by the lender or holder that are guaranteed under this section.
(2)

Civil money penalties for intentional violations.—
If the Secretary determines that any lender or holder of a guarantee certificate under subsection (c) has intentionally failed to maintain adequate accounting records, to adequately service loans guaranteed under this section, or to exercise proper credit or underwriting judgment, the Secretary may impose a civil money penalty on such lender or holder in the manner and amount provided under section 536 of the National Housing Act with respect to mortgagees and lenders under such Act.
(3)

Payment on loans made in good faith.—
Notwithstanding paragraphs (1) and (2), the Secretary may not refuse to pay pursuant to a valid guarantee on loans of a lender or holder barred under this subsection if the loans were previously made in good faith.
(h)

Payment Under Guarantee.—
(1)

Lender options.—
(A)

In general.—
In the event of default by the borrower on a loan guaranteed under this section, the holder of the guarantee certificate shall provide written notice of the default to the Secretary. Upon providing such notice, the holder of the guarantee certificate shall be entitled to payment under the guarantee (subject to the provisions of this section) and may proceed to obtain payment in one of the following manners:
(i)

Foreclosure.—
The holder of the certificate may initiate foreclosure proceedings (after providing written notice of such action to the Secretary) and upon a final order by the court authorizing foreclosure and submission to the Secretary of a claim for payment under the guarantee, the Secretary shall pay to the holder of the certificate the pro rata portion of the amount guaranteed (as determined pursuant to subsection (e)) plus reasonable fees and expenses as approved by the Secretary. The Secretary shall be subrogated to the rights of the holder of the guarantee and the lender holder shall assign the obligation and security to the Secretary.
(ii)

No foreclosure.—
Without seeking foreclosure (or in any case in which a foreclosure proceeding initiated under clause (i) continues for a period in excess of 1 year), the holder of the guarantee may submit to the Secretary a request to assign the obligation and security interest to the Secretary in return for payment of the claim under the guarantee. The Secretary may accept assignment of the loan if
the Secretary determines that the assignment is in the best interests of the United States. Upon assignment, the Secretary shall pay to the holder of the
guarantee the pro rata portion of the amount guaranteed (as determined under subsection (e)). The
Secretary shall be subrogated to the rights of the holder of the guarantee and the holder shall assign the obligation and security to the Secretary.
(B)

Requirements.—
Before any payment under a guarantee is made under subparagraph (A), the holder of the guarantee shall exhaust all reasonable possibilities of collection. Exhausting all reasonable possibilities of collection by the holder of the guarantee shall include a good faith consideration of loan modification as well as meeting standards for servicing loans in default, as determined by the Secretary. Upon payment, in whole or in part, to the holder, the note or judgment evidencing the debt shall be assigned to the United States and the holder shall have no further claim against the borrower or the United States. The Secretary shall then take such action to collect as the Secretary determines appropriate.
(2)

Limitations on liquidation.—
In the event of a default by the borrower on a loan guaranteed under this section involving a security interest in restricted Indian land, the mortgagee or the Secretary shall only pursue liquidation after offering to transfer the account to an eligible tribal member, the tribe, or the Indian housing authority serving the tribe or tribes. If the mortgagee or the Secretary subsequently proceeds to liquidate the account, the mortgagee or the Secretary shall not sell, transfer, or otherwise dispose of or alienate the property except to one of the entities described in the preceding sentence.
(i)

Indian Housing Loan Guarantee Fund.—
(1)

Establishment.—
There is established in the Treasury of the United States the Indian Housing Loan Guarantee Fund for the purpose of providing loan guarantees under this section.
(2)

Credits.—
The Guarantee Fund shall be credited with—
(A)
any amounts, claims, notes, mortgages, contracts, and property acquired by the Secretary under this section, and any collections and proceeds therefrom;
(B)
any amounts appropriated under paragraph (7);
(C)
any guarantee fees collected under subsection (d); and
(D)
any interest or earnings on amounts invested under paragraph (4).
(3)

Use.—
Amounts in the Guarantee Fund shall be available, to the extent provided in appropriation Acts, for—
(A)
fulfilling any obligations of the Secretary with respect to loans guaranteed under this section, including the costs (as such term is defined in section 502 of the Congressional Budget Act of 1974) of such loans;
(B)
paying taxes, insurance, prior liens, expenses necessary to make fiscal adjustment in connection with the application and transmittal of collections, and other expenses and advances to protect the Secretary for loans which are guaranteed under this section or held by the Secretary;
(C)
acquiring such security property at foreclosure sales or otherwise;
(D)
paying administrative expenses in connection with this section; and
(E)
reasonable and necessary costs of rehabilitation and repair to properties that the Secretary holds or owns pursuant to this section.
(4)

Investment.—
Any amounts in the Guarantee Fund determined by the Secretary to be in excess of amounts currently required to carry out this section may be invested in obligations of the United States.
(5)

Limitation on commitments to guarantee loans and mortgages.—
(A)

Requirement of appropriations.—
The authority of the Secretary to enter into commitments to guarantee loans under this section shall be effective for any fiscal year to the extent or in such amounts as are or have been provided in appropriations Acts, without regard to the fiscal year for which such amounts were appropriated.
(B)

Limitations on costs of guarantees.—
The authority of the Secretary to enter into commitments to guarantee loans under this section shall be effective for any fiscal year only to the extent that amounts in the Guarantee Fund are or have been made available in appropriation Acts to cover the costs (as such term is defined in section 502 of the Congressional Budget Act of 1974) of such loan guarantees for such fiscal year. Any amounts appropriated pursuant to this subparagraph shall remain available until expended.
(C)

Limitation on outstanding aggregate principal amount.—
Subject to the limitations in subparagraphs (A) and (B), the Secretary may enter into commitments to guarantee loans under this section in each of fiscal years 2008 through 2012 with an aggregate outstanding principal amount not exceeding such amount as may be provided in appropriation Acts for such fiscal year.
(6)

Liabilities.—
All liabilities and obligations of the assets credited to the Guarantee Fund under paragraph (2)(A) shall be liabilities and obligations of the Guarantee Fund.
(7)

Authorization of appropriations.—
There are authorized to be appropriated to the Guarantee Fund to carry out this section such sums as may be necessary for each of fiscal years 2008 through 2012.
(j)

Requirements for Standard Housing.—
The Secretary shall, by regulation, establish housing safety and quality standards for use under this section. Such standards shall provide sufficient flexibility to permit the use of various designs and materials in housing acquired with loans guaranteed under this section. The standards shall require each dwelling unit in any housing so acquired to—
(1)
be decent, safe, sanitary, and modest in size and design;
(2)
conform with applicable general construction standards for the region;
(3)
contain a heating system that—
(A)
has the capacity to maintain a minimum temperature in the dwelling of 65 degrees Fahrenheit during the coldest weather in the area;
(B)
is safe to operate and maintain;
(C)
delivers a uniform distribution of heat; and
(D)
conforms to any applicable tribal heating code or, if there is no applicable tribal code, an appropriate county, State, or National code;
(4)
contain a plumbing system that—
(A)
uses a properly installed system of piping;
(B)
includes a kitchen sink and a partitional bathroom with lavatory, toilet, and bath or shower; and
(C)
uses water supply, plumbing, and sewage disposal systems that conform to any applicable tribal code or, if there is no applicable tribal code, the minimum standards established by the applicable county or State;
(5)
contain an electrical system using wiring and equipment properly installed to safely supply electrical energy for adequate lighting and for operation of appliances that conforms to any applicable tribal code or, if there is no applicable tribal code, an appropriate county, State, or National code;
(6)
be not less than—
(A)
(i)
570 square feet in size, if designed for a family of not more than 4 persons;
(ii)
850 square feet in size, if designed for a family of not less than 5 and not more than 7 persons; and
(iii)
1020 square feet in size, if designed for a family of not less than 8 persons, or
(B)
the size provided under the applicable locally adopted standards for size of dwelling units;
except that the Secretary, upon the request of a tribe or Indian housing authority, may waive the size requirements under this paragraph; and
(7)
conform with the energy performance requirements for new construction established by the Secretary under section 526(a) of the National Housing Act.
(k)

Environmental Review.—
For purposes of environmental,1 review, decisionmaking, and action under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) and any other law that furthers the purposes of that Act, a loan guarantee under this section shall—
^1
So in law.
(1)
be treated as a grant under the Native American Housing Assistance and Self-Determination Act of 1996 (25 U.S.C. 4101 et seq.); and
(2)
be subject to the regulations promulgated by the Secretary to carry out section 105 of the Native American Housing Assistance and Self-Determination Act of 1996 (25 U.S.C. 4115).
(l)

Definitions.—
For purposes of this section:
(1)
The term “family” means 1 or more persons maintaining a household, as the Secretary shall by regulation provide.
(2)
The term “Guarantee Fund” means the Indian Housing Loan Guarantee Fund established under subsection (i).
(3)
The term “Indian” means person recognized as being Indian or Alaska Native by an Indian tribe, the Federal Government, or any State.
(4)
The term “Indian area” means the area within which an Indian housing authority or Indian tribe is authorized to provide housing.
(5)
The term “Indian housing authority” means any entity that—
(A)
is authorized to engage in or assist in the development or operation of—
(i)
low-income housing for Indians; or
(ii)
housing subject to the provisions of this section; and
(B)
is established—
(i)
by exercise of the power of self-government of an Indian tribe independent of State law; or
(ii)
by operation of State law providing specifically for housing authorities for Indians, including regional housing authorities in the State of Alaska.
The term includes tribally designated housing entities under the Native American Housing Assistance and Self-Determination Act of 1996.
(6)
The term “Secretary” means the Secretary of Housing and Urban Development.
(7)
The term “standard housing” means a dwelling unit or housing that complies with the requirements established under subsection (j).
(8)

Tribe; indian tribe.—
The term “tribe” or “Indian tribe” means any Indian tribe, band, nation, or other organized group or community of Indians, including any Alaska Native village or regional or village corporation as defined in or established pursuant to the Alaska Native Claims Settlement Act, that is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians pursuant to the Indian Self-Determination and Education Assistance Act of 1975.
(9)
The term “trust land” means land title to which is held by the United States for the benefit of an Indian or Indian tribe or title to which is held by an Indian tribe subject to a restriction against alienation imposed by the United States.
SEC. 184A.
[12 U.S.C. 1715z–13b]

LOAN GUARANTEES FOR NATIVE HAWAIIAN HOUSING.2
^2
This section was added by section 204 of the Omnibus Indian Advancement Act, Pub. L. 106–568, approved December 27, 2000. Section 514 of the American Homeownership and Economic Opportunity Act of 2000, Pub. L. 106–569, enacted on the same day, made an amendment adding to this Act (a second time) a section almost identical to that added by Pub. L. 106–568. The later amendment (made by Pub. L. 106–569) is shown in this compilation.
(a)

Definitions.—
In this section:
(1)

Department of hawaiian home lands.—
The term “Department of Hawaiian Home Lands” means the agency or department of the government of the State of Hawaii that is responsible for the administration of the Hawaiian Homes Commission Act, 1920 (42 Stat. 108 et seq.).
(2)

Eligible entity.—
The term “eligible entity” means a Native Hawaiian family, the Department of Hawaiian Home Lands, the Office of Hawaiian Affairs, and private nonprofit or private for-profit organizations experienced in the planning and development of affordable housing for Native Hawaiians.
(3)

Family.—
The term “family” means one or more persons maintaining a household, as the Secretary shall by regulation provide.
(4)

Guarantee fund.—
The term “Guarantee Fund” means the Native Hawaiian Housing Loan Guarantee Fund established under subsection (j).
(5)

Hawaiian home lands.—
The term “Hawaiian Home Lands” means lands that—
(A)
have the status of Hawaiian Home Lands under section 204 of the Hawaiian Homes Commission Act (42 Stat. 110); or
(B)
are acquired pursuant to that Act.
(6)

Native hawaiian.—
The term “Native Hawaiian” means any individual who is—
(A)
a citizen of the United States; and
(B)
a descendant of the aboriginal people, who, prior to 1778, occupied and exercised sovereignty in the area that currently constitutes the State of Hawaii, as evidenced by—
(i)
genealogical records;
(ii)
verification by kupuna (elders) or kama'aina (long-term community residents); or
(iii)
birth records of the State of Hawaii.
(7)

Office of hawaiian affairs.—
The term “Office of Hawaiian Affairs” means the entity of that name established under the constitution of the State of Hawaii.
(b)

Authority.—
To provide access to sources of private financing to Native Hawaiian families who otherwise could not acquire housing financing because of the unique legal status of the Hawaiian Home Lands or as a result of a lack of access to private financial markets, the Secretary may guarantee an amount not to exceed 100 percent of the unpaid principal and interest that is due on an eligible loan under subsection (c).
(c)

Eligible Loans.—
Under this section, a loan is an eligible loan if that loan meets the following requirements:
(1)

Eligible borrowers.—
The loan is made only to a borrower who is—
(A)
a Native Hawaiian family;
(B)
the Department of Hawaiian Home Lands;
(C)
the Office of Hawaiian Affairs; or
(D)
a private nonprofit organization experienced in the planning and development of affordable housing for Native Hawaiians.
(2)

Eligible housing.—
(A)

In general.—
The loan will be used to construct, acquire, or rehabilitate not more than 4-family dwellings that are standard housing and are located on Hawaiian Home Lands for which a housing plan described in subparagraph (B) applies.
(B)

Housing plan.—
A housing plan described in this subparagraph is a housing plan that—
(i)
has been submitted and approved by the Secretary under section 803 of the Native American Housing Assistance and Self-Determination Act of 1996; and
(ii)
provides for the use of loan guarantees under this section to provide affordable homeownership housing on Hawaiian Home Lands.
(3)

Security.—
The loan may be secured by any collateral authorized under applicable Federal or State law.
(4)

Lenders.—
(A)

In general.—
The loan shall be made only by a lender approved by, and meeting qualifications established by, the Secretary, including any lender described in subparagraph (B), except that a loan otherwise insured or guaranteed by an agency of the Federal Government or made by the Department of Hawaiian Home Lands from amounts borrowed from the United States shall not be eligible for a guarantee under this section.
(B)

Approval.—
The following lenders shall be considered to be lenders that have been approved by the Secretary:
(i)
Any mortgagee approved by the Secretary for participation in the single family mortgage insurance program under title II of the National Housing Act (12 U.S.C.A. 1707 et seq.).
(ii)
Any lender that makes housing loans under chapter 37 of title 38, United States Code, that are automatically guaranteed under section 3702(d) of title 38, United States Code.
(iii)
Any lender approved by the Secretary of Agriculture to make guaranteed loans for single family housing under the Housing Act of 1949 (42 U.S.C.A. 1441 et seq.).
(iv)
Any other lender that is supervised, approved, regulated, or insured by any agency of the Federal Government.
(5)

Terms.—
The loan shall—
(A)
be made for a term not exceeding 30 years;
(B)
bear interest (exclusive of the guarantee fee under subsection (e) and service charges, if any) at a rate agreed upon by the borrower and the lender and determined by the Secretary to be reasonable, but not to exceed the rate generally charged in the area (as determined by the Secretary) for home mortgage loans not guaranteed or insured by any agency or instrumentality of the Federal Government;
(C)
involve a principal obligation not exceeding—
(i)
97.75 percent of the appraised value of the property as of the date the loan is accepted for guarantee (or 98.75 percent if the value of the property is $50,000 or less); or
(ii)
the amount approved by the Secretary under this section; and
(D)
involve a payment on account of the property—
(i)
in cash or its equivalent; or
(ii)
through the value of any improvements to the property made through the skilled or unskilled labor of the borrower, as the Secretary shall provide.
(d)

Certificate of Guarantee.—
(1)

Approval process.—
(A)

In general.—
Before the Secretary approves any loan for guarantee under this section, the lender shall submit the application for the loan to the Secretary for examination.
(B)

Approval.—
If the Secretary approves the application submitted under subparagraph (A), the Secretary shall issue a certificate under this subsection as evidence of the loan guarantee approved.
(2)

Standard for approval.—
The Secretary may approve a loan for guarantee under this section and issue a certificate under this subsection only if the Secretary determines that there is a reasonable prospect of repayment of the loan.
(3)

Effect.—
(A)

In general.—
A certificate of guarantee issued under this subsection by the Secretary shall be conclusive evidence of the eligibility of the loan for guarantee under this section and the amount of that guarantee.
(B)

Evidence.—
The evidence referred to in subparagraph (A) shall be incontestable in the hands of the bearer.
(C)

Full faith and credit.—
The full faith and credit of the United States is pledged to the payment of all amounts agreed to be paid by the Secretary as security for the obligations made by the Secretary under this section.
(4)

Fraud and misrepresentation.—
This subsection may not be construed—
(A)
to preclude the Secretary from establishing defenses against the original lender based on fraud or material misrepresentation; or
(B)
to bar the Secretary from establishing by regulations that are on the date of issuance or disbursement, whichever is earlier, partial defenses to the amount payable on the guarantee.
(e)

Guarantee Fee.—
(1)

In general.—
The Secretary shall fix and collect a guarantee fee for the guarantee of a loan under this section, which may not exceed the amount equal to 1 percent of the principal obligation of the loan.
(2)

Payment.—
The fee under this subsection shall—
(A)
be paid by the lender at time of issuance of the guarantee; and
(B)
be adequate, in the determination of the Secretary, to cover expenses and probable losses.
(3)

Deposit.—
The Secretary shall deposit any fees collected under this subsection in the Native Hawaiian Housing Loan Guarantee Fund established under subsection (j).
(f)

Liability Under Guarantee.—
The liability under a guarantee provided under this section shall decrease or increase on a pro rata basis according to any decrease or increase in the amount of the unpaid obligation under the provisions of the loan agreement involved.
(g)

Transfer and Assumption.—
Notwithstanding any other provision of law, any loan guaranteed under this section, including the security given for the loan, may be sold or assigned by the lender to any financial institution subject to examination and supervision by an agency of the Federal Government or of any State or the District of Columbia.
(h)

Disqualification of Lenders and Civil Money Penalties.—
(1)

In general.—
(A)

Grounds for action.—
The Secretary may take action under subparagraph (B) if the Secretary determines that any lender or holder of a guarantee certificate under subsection (d)—
(i)
has failed—
(I)
to maintain adequate accounting records;
(II)
to service adequately loans guaranteed under this section; or
(III)
to exercise proper credit or underwriting judgment; or
(ii)
has engaged in practices otherwise detrimental to the interest of a borrower or the United States.
(B)

Actions.—
Upon a determination by the Secretary that a holder of a guarantee certificate under subsection (d) has failed to carry out an activity described in subparagraph (A)(i) or has engaged in practices described in subparagraph (A)(ii), the Secretary may—
(i)
refuse, either temporarily or permanently, to guarantee any further loans made by such lender or holder;
(ii)
bar such lender or holder from acquiring additional loans guaranteed under this section; and
(iii)
require that such lender or holder assume not less than 10 percent of any loss on further loans made or held by the lender or holder that are guaranteed under this section.
(2)

Civil money penalties for intentional violations.—
(A)

In general.—
The Secretary may impose a civil monetary penalty on a lender or holder of a guarantee certificate under subsection (d) if the Secretary determines that the holder or lender has intentionally failed—
(i)
to maintain adequate accounting records;
(ii)
to adequately service loans guaranteed under this section; or
(iii)
to exercise proper credit or underwriting judgment.
(B)

Penalties.—
A civil monetary penalty imposed under this paragraph shall be imposed in the manner and be in an amount provided under section 536 of the National Housing Act (12 U.S.C.A. 1735f–1) with respect to mortgagees and lenders under that Act.
(3)

Payment on loans made in good faith.—
Notwithstanding paragraphs (1) and (2), if a loan was made in good faith, the Secretary may not refuse to pay a lender or holder of a valid guarantee on that loan, without regard to whether the lender or holder is barred under this subsection.
(i)

Payment Under Guarantee.—
(1)

Lender options.—
(A)

In general.—
(i)

Notification.—
If a borrower on a loan guaranteed under this section defaults on the loan, the holder of the guarantee certificate shall provide written notice of the default to the Secretary.
(ii)

Payment.—
Upon providing the notice required under clause (i), the holder of the guarantee certificate shall be entitled to payment under the guarantee (subject to the provisions of this section) and may proceed to obtain payment in one of the following manners:
(I)

Foreclosure.—
- (aa)

In general.—
The holder of the certificate may initiate foreclosure proceedings (after providing written notice of that action to the Secretary).
- (bb)

Payment.—
Upon a final order by the court authorizing foreclosure and submission to the Secretary of a claim for payment under the guarantee, the Secretary shall pay to the holder of the certificate the pro rata portion of the amount guaranteed (as determined pursuant to subsection (f)) plus reasonable fees and expenses as approved by the Secretary.
- (cc)

Subrogation.—
The rights of the Secretary shall be subrogated to the rights of the holder of the guarantee. The holder shall assign the obligation and security to the Secretary.
(II)

No foreclosure.—
- (aa)

In general.—
Without seeking foreclosure (or in any case in which a foreclosure proceeding initiated under clause (i) continues for a period in excess of 1 year), the holder of the guarantee may submit to the Secretary a request to assign the obligation and security interest to the Secretary in return for payment of the claim under the guarantee. The Secretary may accept assignment of the loan if the Secretary determines that the assignment is in the best interest of the United States.
- (bb)

Payment.—
Upon assignment, the Secretary shall pay to the holder of the guarantee the pro rata portion of the amount guaranteed (as determined under subsection (f)).
- (cc)

Subrogation.—
The rights of the Secretary shall be subrogated to the rights of the holder of the guarantee. The holder shall assign the obligation and security to the Secretary.
(B)

Requirements.—
Before any payment under a guarantee is made under subparagraph (A), the holder of the guarantee shall exhaust all reasonable possibilities of collection. Upon payment, in whole or in part, to the holder, the note or judgment evidencing the debt shall be assigned to the United States and the holder shall have no further claim against the borrower or the United States. The Secretary shall then take such action to collect as the Secretary determines to be appropriate.
(2)

Limitations on liquidation.—
(A)

In general.—
If a borrower defaults on a loan guaranteed under this section that involves a security interest in restricted Hawaiian Home Land property, the mortgagee or the Secretary shall only pursue liquidation after offering to transfer the account to another eligible Hawaiian family or the Department of Hawaiian Home Lands.
(B)

Limitation.—
If, after action is taken under subparagraph (A), the mortgagee or the Secretary subsequently proceeds to liquidate the account, the mortgagee or the Secretary shall not sell, transfer, or otherwise dispose of or alienate the property described in subparagraph (A) except to another eligible Hawaiian family or to the Department of Hawaiian Home Lands.
(j)

Hawaiian Housing Loan Guarantee Fund.—
(1)

Establishment.—
There is established in the Treasury of the United States the Hawaiian Housing Loan Guarantee Fund for the purpose of providing loan guarantees under this section.
(2)

Credits.—
The Guarantee Fund shall be credited with—
(A)
any amount, claims, notes, mortgages, contracts, and property acquired by the Secretary under this section, and any collections and proceeds therefrom;
(B)
any amounts appropriated pursuant to paragraph (7);
(C)
any guarantee fees collected under subsection (e); and
(D)
any interest or earnings on amounts invested under paragraph (4).
(3)

Use.—
Amounts in the Guarantee Fund shall be available, to the extent provided in appropriations Acts, for—
(A)
fulfilling any obligations of the Secretary with respect to loans guaranteed under this section, including the costs (as that term is defined in section 502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a)) of such loans;
(B)
paying taxes, insurance, prior liens, expenses necessary to make fiscal adjustment in connection with the application and transmittal of collections, and other expenses and advances to protect the Secretary for loans which are guaranteed under this section or held by the Secretary;
(C)
acquiring such security property at foreclosure sales or otherwise;
(D)
paying administrative expenses in connection with this section; and
(E)
reasonable and necessary costs of rehabilitation and repair to properties that the Secretary holds or owns pursuant to this section.
(4)

Investment.—
Any amounts in the Guarantee Fund determined by the Secretary to be in excess of amounts currently required at the time of the determination to carry out this section may be invested in obligations of the United States.
(5)

Limitation on commitments to guarantee loans and mortgages.—
(A)

Requirement of appropriations.—
The authority of the Secretary to enter into commitments to guarantee loans under this section shall be effective for any fiscal year to the extent, or in such amounts as are, or have been, provided in appropriations Acts, without regard to the fiscal year for which such amounts were appropriated.
(B)

Limitations on costs of guarantees.—
The authority of the Secretary to enter into commitments to guarantee loans under this section shall be effective for any fiscal year only to the extent that amounts in the Guarantee Fund are or have been made available in appropriations Acts to cover the costs (as that term is defined in section 502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a)) of such loan guarantees for such fiscal year. Any amounts appropriated pursuant to this subparagraph shall remain available until expended.
(C)

Limitation on outstanding aggregate principal amount.—
Subject to the limitations in subparagraphs (A) and (B), the Secretary may enter into commitments to guarantee loans under this section for each of fiscal years 2001, 2002, 2003, 2004, and 20053 with an aggregate outstanding principal amount not exceeding $100,000,000 for each such fiscal year.
^3
This section as shown was added by section 514 of the American Homeownership and Economic Opportunity Act of 2000, Pub. L. 106–569, approved December 27, 2000. Section 204 of the Omnibus Indian Advancement Act, Pub. L. 106–568, enacted on the same day, made an amendment inserting a section almost identical to that added by Pub. L. 106–569. In such amendment, this subparagraph provides authority to enter in loan guarantee commitments “for each of fiscal years 2000, 2001, 2002, 2003, and 2004” in the stated amount.
(6)

Liabilities.—
All liabilities and obligations of the assets credited to the Guarantee Fund under paragraph (2)(A) shall be liabilities and obligations of the Guarantee Fund.
(7)

Authorization of appropriations.—
There are authorized to be appropriated to the Guarantee Fund to carry out this section such sums as may be necessary for each of fiscal years 2001, 2002, 2003, 2004, and 2005.4
^4
This section as shown was added by section 514 of the American Homeownership and Economic Opportunity Act of 2000, Pub. L. 106–569, approved December 27, 2000. Section 204 of the Omnibus Indian Advancement Act, Pub. L. 106–568, enacted on the same day, made an amendment inserting a section almost identical to that added by Pub. L. 106–569. In such amendment, this paragraph authorizes appropriations of such sums as may be necessary “for each of fiscal years 2000, 2001, 2002, 2003, and 2004”.
(k)

Requirements for Standard Housing.—
(1)

In general.—
The Secretary shall, by regulation, establish housing safety and quality standards to be applied for use under this section.
(2)

Standards.—
The standards referred to in paragraph (1) shall—
(A)
provide sufficient flexibility to permit the use of various designs and materials in housing acquired with loans guaranteed under this section; and
(B)
require each dwelling unit in any housing acquired in the manner described in subparagraph (A) to—
(i)
be decent, safe, sanitary, and modest in size and design;
(ii)
conform with applicable general construction standards for the region in which the housing is located;
(iii)
contain a plumbing system that—
(I)
uses a properly installed system of piping;
(II)
includes a kitchen sink and a partitional bathroom with lavatory, toilet, and bath or shower; and
(III)
uses water supply, plumbing, and sewage disposal systems that conform to any minimum standards established by the applicable county or State;
(iv)
contain an electrical system using wiring and equipment properly installed to safely supply electrical energy for adequate lighting and for operation of appliances that conforms to any appropriate county, State, or national code;
(v)
be not less than the size provided under the applicable locally adopted standards for size of dwelling units, except that the Secretary, upon request of the Department of Hawaiian Home Lands may waive the size requirements under this paragraph; and
(vi)
conform with the energy performance requirements for new construction established by the Secretary under section 526(a) of the National Housing Act (12 U.S.C.A. 1735f–4), unless the Secretary determines that the requirements are not applicable.
(l)

Applicability of Civil Rights Statutes.—
To the extent that the requirements of title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d et seq.) or of the Fair Housing Act5 (42 U.S.C.A. 3601 et seq.) apply to a guarantee provided under this subsection, nothing in the requirements concerning discrimination on the basis of race shall be construed to prevent the provision of the guarantee to an eligible entity on the basis that the entity serves Native Hawaiian families or is a Native Hawaiian family.
^5
This title as shown was added by section 514 of the American Homeownership and Economic Opportunity Act of 2000, Pub. L. 106–569, approved December 27, 2000. Section 204 of the Omnibus Indian Advancement Act, Pub. L. 106–568, enacted on the same day, made an amendment inserting a title almost identical to that added by Pub. L. 106–569. In such amendment, this subsection refers to title VIII of the Act popularly known as the “Civil Rights Act of 1968” rather than to the Fair Housing Act.
* * * * * * *
SEC. 186.
[42 U.S.C. 12898a]

ENTERPRISE ZONE HOMEOWNERSHIP OPPORTUNITY GRANTS.
(a)

Statement of Purpose.—
It is the purpose of this section—
(1)
to encourage homeownership by families in the United States who are not otherwise able to afford homeownership;
(2)
to encourage the redevelopment of economically depressed areas; and
(3)
to provide better housing opportunities in federally approved and equivalent State-approved enterprise zones.
(b)

Definitions.—
For purposes of this section the following definitions shall apply:
(1)

Home.—
The term “home” means any 1- to 4-family dwelling. Such term includes any dwelling unit in a condominium project or cooperative project consisting of not more than 4 dwelling units, any town house, and any manufactured home.
(2)

Metropolitan statistical area.—
The term “metropolitan statistical area” means a metropolitan statistical area as established by the Office of Management and Budget.
(3)

Nonprofit organization.—
The term “nonprofit organization” means a private nonprofit corporation, or other private nonprofit legal entity, that is approved by the Secretary as to financial responsibility.
(4)

Secretary.—
The term “Secretary” means the Secretary of Housing and Urban Development.
(5)

State.—
The term “State” means each of the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, the Northern Mariana Islands, the Trust Territory of the Pacific Islands, and any other territory or possession of the United States.
(6)

Unit of general local government.—
The term “unit of general local government” means any borough, city, county, parish, town, township, village, or other general purpose political subdivision of a State.
(c)

Assistance to Nonprofit Organizations.—
(1)

In general.—
The Secretary may provide assistance to nonprofit organizations to carry out enterprise zone homeownership opportunity programs to promote homeownership in federally approved and equivalent State-approved enterprise zones in accordance with the provisions of this section. Such assistance shall be made in the form of grants.
(2)

Applications.—
Applications for assistance under this section shall be made in such form, and in accordance with such procedures, as the Secretary may prescribe.
(d)

Eligible Uses of Assistance.—
(1)

In general.—
Any nonprofit organization receiving assistance under this section shall use such assistance to provide loans to families purchasing homes constructed or rehabilitated in accordance with an enterprise zone homeownership opportunity program approved under this section.
(2)

Specific requirements.—
Each loan made to a family under this subsection shall—
(A)
be secured by a second mortgage held by the Secretary on the property involved;
(B)
be in an amount not exceeding $15,000;
(C)
bear no interest; and
(D)
be repayable to the Secretary upon the sales, lease, or other transfer of such property.
(e)

Program Requirements.—
(1)

In general.—
Assistance provided under this section may be used only in connection with an enterprise zone homeownership opportunity program of construction or rehabilitation of homes.
(2)

Family need.—
Each family purchasing a home under this section shall—
(A)
have a family income on the date of such purchase that is not more than the median income for a family of 4 persons (adjusted for family size) in the metropolitan statistical area in which a federally approved or equivalent State-approved enterprise zone is located; and
(B)
not have owned a home during the 3-year period preceding such purchase.
(3)

Downpayment.—
Each family purchasing a home under this section shall make a downpayment of not less than 5 percent of the sale price of such home.
(4)

Leasing prohibition.—
No family purchasing a home under this section may lease such home.
(f)

Terms and Conditions of Assistance.—
(1)

Local consultation.—
No proposed enterprise zone homeownership opportunity program may be approved by the Secretary under this section unless the applicant involved demonstrates to the satisfaction of the Secretary that—
(A)
it has consulted with and received the support of residents of the neighborhood in which such program is to be located; and
(B)
it has the approval of each unit of general local government in which such program is to be located.
(2)

Program schedule.—
Each applicant for assistance under this section shall submit to the Secretary an estimated schedule for completion of its proposed enterprise zone homeownership opportunity program, which schedule shall have been agreed to by each unit of general local government in which such program is to be located.
(3)

Location.—
All homes constructed or rehabilitated under such program will be located in federally approved or equivalent State-approved enterprise zones.
(4)

Sales contracts.—
Sales contracts entered into under such program will contain provisions requiring repayment of any loan made under this section upon the sale or other transfer of the home involved, unless the Secretary approves a transfer of such home without repayment (in which case the second mortgage held by the Secretary on such home shall remain in force until such loan is fully repaid).
(g)

Program Selection Criteria.—
(1)

In general.—
In selecting enterprise zone homeownership opportunity programs for assistance under this section from among eligible programs, the Secretary shall make such selection on the basis of the extent to which—
(A)
non-Federal public or private entities will contribute land necessary to make each program feasible;
(B)
non-Federal public and private financial or other contributions (including tax abatements, waivers of fees related to development, waivers of construction, development, or zoning requirements, and direct financial contributions) will reduce the cost of home6 constructed or rehabilitated under each program;
^6
So in law.
(C)
each program will produce the greatest number of units for the least amount of assistance provided under this section, taking into consideration the cost differences among different market areas; and
(D)
each program provides for the involvement of local residents in the planning, and construction or rehabilitation, of homes.
(2)

Exception.—
To the extent that non-Federal public entities are prohibited by the law of any State from making any form of contribution described in subparagraph (A) or (B) of paragraph (1), the Secretary shall not consider such form of contribution in evaluating such program.
(h)

Regulations.—
Not later than 180 days after the date of enactment of this section7, the Secretary shall issue final regulations to carry out the provisions of this title.8 Any such regulations shall be issued in accordance with section 553 of title 5, United States Code, notwithstanding the provisions of subsection (a)(2) of such section.
^7
The date of enactment was October 28, 1992.
^8
So in law. Probably intended to refer to this section.
(i)

Funding.—
There are authorized to be appropriated to carry out this section $30,000,000 in each of fiscal years 1993 and 1994.
* * * * * * *
TITLE IV—

MULTIFAMILY HOUSING PLANNING AND INVESTMENT STRATEGIES
SEC. 401.
[12 U.S.C. 1715z–1a note]

DEFINITIONS.
For purposes of this title:
(1)

Covered multifamily housing property.—
The term “covered multifamily housing property” means any housing—
(A)
that is—
(i)
reserved for occupancy by very low-income elderly persons pursuant to section 202(d)(1) of the Housing Act of 1959;
(ii)
assisted under the provisions of section 202 of the Housing Act of 1959 (as such section existed before the effectiveness of the amendment made by section 801(a) of the Cranston-Gonzalez National Affordable Housing Act);
(iii)
financed by a loan or mortgage insured, assisted, or held by the Secretary or a State or State agency under section 236 of the National Housing Act; or
(iv)
financed by a loan or mortgage insured or held by the Secretary pursuant to section 221(d)(3) of the National Housing Act; and
(B)
that is not eligible for assistance under—
(i)
the Low-Income Housing Preservation and Resident Homeownership Act of 1990;
(ii)
the provisions of the Emergency Low Income Housing Preservation Act of 1987 (as in effect immediately before the date of the enactment of the Cranston-Gonzalez National Affordable Housing Act9); or
^9
November 28, 1990
(iii)
the HOME Investment Partnerships Act.
(2)

Covered multifamily housing property for the elderly.—
The term “covered multifamily housing property for the elderly” means any multifamily housing project that was designed or designated to serve, or is serving, elderly persons or families and is assisted under a program administered by the Secretary.
(3)

Secretary.—
The term “Secretary” means the Secretary of Housing and Urban Development.
SEC. 402.
[12 U.S.C. 1715z–1a note]

REQUIRED SUBMISSION.
(a)

In General.—
The owner of each covered multifamily housing property, and the owner of each covered multifamily housing property for the elderly, shall submit to the Secretary of Housing and Urban Development a comprehensive needs assessment of the property under this title. The assessment shall be prepared by an entity that does not have an identity of interest with the owner.
(b)

Timing.—
To ensure that assessments for all covered multifamily housing properties will be submitted on or before the conclusion of fiscal year 1997, the Secretary shall require the owners of such properties, including covered multifamily housing properties for the elderly, to submit the assessments for the properties in accordance with the following schedule:
(1)
For fiscal year 1994, 10 percent of the aggregate number of such properties.
(2)
For each of fiscal years 1995, 1996, and 1997, an additional 30 percent of the aggregate number of such properties.
SEC. 403.
[12 U.S.C. 1715z–1a note]

CONTENTS.
(a)

In General.—
Each comprehensive needs assessment submitted under this title for a covered multifamily housing property or a covered multifamily housing property for the elderly shall contain the following information with respect to the property:
(1)
A description of any financial or other assistance currently needed for the property to ensure that the property is maintained in a livable condition and to ensure the financial viability of the project.
(2)
A description of any financial or other assistance for the property that, at the time of the assessment, is reasonably foreseeable as necessary to ensure that the property is maintained in a livable condition and to ensure the financial viability of the project, during the remaining useful life of the property.
(3)
A description of any resources available for meeting the current and future needs of the property described under paragraphs (1) and (2) and the likelihood of obtaining such resources.
(4)
A description of any assistance needed for the property under programs administered by the Secretary.
(b)

Projects for the Elderly.—
Each comprehensive needs assessment for a covered multifamily housing property for the elderly shall include, in addition to the information required under subsection (a), the following information with respect to the property:
(1)
A description of the supportive service needs of such residents and any supportive services provided to elderly residents of the property.
(2)
A description of any modernization needs and activities for the property.
(3)
A description of any personnel needs for the property.
SEC. 404.
[12 U.S.C. 1715z–1a note]

SUBMISSION AND REVIEW.
(a)

Form.—
The Secretary shall establish the form and manner of submission of the comprehensive needs assessments under this title.
(b)

Resident Review.—
The Secretary shall require each owner of a covered multifamily housing property and each owner of a covered multifamily housing property for the elderly to make available to the residents of the property the comprehensive needs assessment that is to be submitted to the Secretary. The Secretary shall require each owner to provide for such residents to submit comments and opinions regarding the assessment to the owner before the submission of the assessment.
(c)

State Housing Finance Agency Review.—
To the extent that a covered multifamily housing property or a covered multifamily housing property for the elderly is financed or assisted by a State housing finance agency (as such term is defined in section 802 of the Housing and Community Development Act of 1974), the Secretary shall require the owner of the property to submit the comprehensive needs assessment for the property to the State housing finance agency upon submitting the assessment to the Secretary.
(d)

Review.—
(1)

In general.—
The Secretary shall review each comprehensive needs assessment for completeness and adequacy before the expiration of the 90-day period beginning on the receipt of the assessment and shall notify the owner of the property for which the assessment was submitted of the findings of such review.
(2)

Incomplete or inadequate assessments.—
If the Secretary determines that the assessment is substantially incomplete or inadequate, the Secretary shall—
(A)
notify the owner of the portion or portions of the assessment requiring completion or other revision; and
(B)
require the owner to submit an amended assessment to the Secretary not later than 30 days after such notification.
(e)

Cost of Preparation of Strategy.—
The Secretary shall consider any costs relating to preparing a comprehensive needs assessment under this title for a covered multifamily housing property that do not exceed $5,000 for the property as an eligible project expense for the property. The Secretary shall provide that an owner may not increase the rental charge for any unit in a covered multifamily housing property to provide for the cost of preparing a comprehensive needs assessment.
(f)

Publication of Method for Receiving Capital Needs Assessment.—
The Secretary shall cause to be published in the Federal Register the method by which the Secretary determines which capital needs assessments will be received each year in accordance with section 402(b) and subsection (d) of this section.
(g)

Annual Review and Report of Funding and Targeting for Covered Multifamily Properties for the Elderly.—
(1)

Review.—
The Secretary shall annually conduct a comprehensive review of—
(A)
the funding levels required to fully address the needs of covered multifamily housing properties for the elderly identified in the comprehensive needs assessments under section 403(b), specifically identifying any expenses necessary to make substantial repairs and add features (such as congregate dining facilities and commercial kitchens) resulting from development of a property in compliance with cost-containment requirements established by the Secretary;
(B)
the adequacy of the geographic targeting of resources provided under programs of the Department with respect to covered multifamily housing properties for the elderly, based on information acquired pursuant to section 403(b); and
(C)
local housing markets throughout the United States, with respect to the need, availability, and cost of housing for elderly persons and families, which shall include review of any information and plans relating to housing for elderly persons and families included in comprehensive housing affordability strategies submitted by jurisdictions pursuant to section 105 of the Cranston-Gonzalez National Affordable Housing Act.
(2)

Report.—
The Secretary of Housing and Urban Development shall submit a report to the Congress annually describing the results of the annual comprehensive needs assessments under section 402 for covered multifamily housing properties for the elderly and the annual review conducted under paragraph (1) of this subsection, which shall contain a description of the methods used by project owners and by the Secretary to acquire the information described in section 402(b) and any findings and recommendations of the Secretary pursuant to the review.
SEC. 405.

TROUBLED MULTIFAMILY HOUSING.
(a)

Mandatory Elements.—
Section 201(d) of the Housing and Community Development Amendments of 1978 (12 U.S.C. 1715z–1a(d)) is amended—
* * * * * * *
(b)

Selection Criteria.—
(1)

Repeal of section 201(k)(4).—
Section 201(k)(4) of the Housing and Community Development Amendments of 1978 (12 U.S.C. 1715z–1a(k)(4)) is repealed.
(2)

New criteria.—
Section 201 of the Housing and Community Development Amendments of 1978 is amended by adding at the end the following new subsection:
* * * * * * *
(c)

Low-Income Affordability Restrictions.—
Section 201(l)(2)(D) of the Housing and Community Development Amendments of 1978 (12 U.S.C. 1715z–1a(l)(2)(D)) is amended by adding at the end the following: “The Secretary may require owners receiving assistance for capital improvements under this section to retain the housing as housing affordable for very low-income families or persons, low-income families or persons and moderate-income families or persons for the remaining useful life of the housing. For purposes of this section, the term ‘remaining useful life’ means, with respect to housing assisted under this section, the period during which the physical characteristics of the housing remain in a condition suitable for occupancy, assuming normal maintenance and repairs are made and major systems and capital components are replaced as becomes necessary.”.
(d)

Exclusivity of Assistance.—
Section 201 of the Housing and Community Development Amendments of 1978, as amended by this section, is further amended by adding at the end the following new subsection:
* * * * * * *
(e)

Owner Contributions.—
Section 201(k)(2) of the Housing and Community Development Amendments of 1978 is amended—
* * * * * * *
(f)

Coordination of Assistance.—
Section 201 of the Housing and Community Development Amendments of 1978, as amended by this section, is further amended by adding at the end the following new subsection:
* * * * * * *
SEC. 406.

FLEXIBLE SUBSIDY PROGRAM.
Section 201(d)(6) of the Housing and Community Development Amendments of 1978 (12 U.S.C. 1715z–1a(d)(6)) is amended by inserting before the period at the end the following: “; and except that the Secretary shall review and approve or disapprove each plan not later than the expiration of the 30-day period beginning upon the date of submission of the plan to the Secretary by the owner, but if the Secretary fails to inform the owner of approval or disapproval of the plan within such period the plan shall be considered to have been approved”.
SEC. 407.

CAPACITY STUDY.
Section 110(a) of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12710(a)) is amended—
* * * * * * *
SEC. 408.

FLEXIBLE SUBSIDY PROGRAM.
(a)

Authorization of Appropriations.—
Section 201(j)(5) of the Housing and Community Development Amendments of 1978 (12 U.S.C. 1715z–1a(j)(5)) is amended to read as follows:
* * * * * * *
(b)

Use of Section 236 Rental Assistance Fund Amounts for Flexible Subsidy Payments.—
Section 236(f)(3) of the National Housing Act (12 U.S.C. 1715z–1a(f)(3)) is amended by striking “September 30, 1992” and inserting “September 30, 1994”.
SEC. 409.
[12 U.S.C. 1715z–1a note]

FUNDING.
(a)

Allocation of Assistance.—
Based upon needs identified in comprehensive needs assessments, and subject to otherwise applicable program requirements, including selection criteria, the Secretary may allocate the following assistance to owners of covered multifamily housing projects and may provide such assistance on a noncompetitive basis:
(1)
Operating assistance and capital improvement assistance for troubled multifamily housing projects pursuant to section 201 of the Housing and Community Development Amendments of 1978, except for assistance set aside under section 201(n)(1).
(2)
Loan management assistance available pursuant to section 8 of the United States Housing Act of 1937.
(b)

Operating Assistance and Capital Improvement Assistance.—
In providing assistance under subsection (a) the Secretary shall use the selection criteria set forth in section 201(n) of the Housing and Community Development Amendments of 1978.
(c)

Amount of Assistance.—
The Secretary may fund all or only a portion of the needs identified in the capital needs assessment of an owner selected to receive assistance under this section.
TITLE V—

MORTGAGE INSURANCE AND SECONDARY MORTGAGE MARKET
* * * * * * *
Subtitle C—

Improvement of Financing for Multifamily Housing
SEC. 541.
[12 U.S.C. 1707 note]

SHORT TITLE.
This subtitle may be cited as the “Multifamily Housing Finance Improvement Act”.
SEC. 542.
[12 U.S.C. 1715z–22]

MULTIFAMILY MORTGAGE CREDIT PROGRAMS.
(a)

In General.—
The Secretary of Housing and Urban Development (hereinafter referred to as the “Secretary”) shall carry out programs through the Federal Housing Administration to provide new forms of Federal credit enhancement for multifamily loans. In carrying out the programs, the Secretary shall include an evaluation of the effectiveness of entering into partnerships or other contractual arrangements including reinsurance and risk-sharing agreements with State or local housing finance agencies, the Federal Housing Finance Board, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, qualified financial institutions, and other State or local mortgage insurance companies or bank lending consortia.
(b)

Risk-Sharing Program.—
(1)

In general.—
The Secretary shall carry out a program in conjunction with qualified participating entities to provide Federal credit enhancement for loans for affordable multifamily housing through a system of risk-sharing agreements with such entities.
(2)

Program requirements.—
(A)

In general.—
In carrying out the program under this subsection, the Secretary shall enter into risk-sharing agreements with qualified participating entities.
(B)

Mortgage insurance and reinsurance.—
Agreements under subparagraph (A) may provide for (i) mortgage insurance through the Federal Housing Administration of loans for affordable multifamily housing originated by or through, or purchased by, qualified participating entities, and (ii) reinsurance, including reinsurance of pools of loans, on affordable multifamily housing. In entering into risk-sharing agreements under this subsection covering mortgages, the Secretary may give preference to mortgages that are not already in the portfolios of qualified participating entities.
(C)

Risk apportionment.—
Agreements entered into under this subsection between the Secretary and a qualified participating entity shall specify the percentage of loss that each of the parties to the agreement will assume in the event of default of the insured or reinsured multifamily mortgage. Such agreements shall specify that the qualified participating entity and the Secretary shall share any loss in accordance with the risk-sharing agreement.
(D)

Reimbursement capacity.—
Agreements entered into under this subsection between the Secretary and a qualified participating entity shall provide evidence acceptable to the Secretary of the capacity of such entity to fulfill any reimbursement obligations made pursuant to this subsection. Evidence of such capacity which may be considered by the Secretary may include—
(i)
a pledge of the full faith and credit of a qualified participating entity to fulfill any obligations entered into by the entity;
(ii)
reserves pledged or otherwise restricted by the qualified participating entity in an amount equal to an agreed upon percentage of the loss assumed by the entity under subparagraph (C);
(iii)
funds pledged through a State or local guarantee fund; or
(iv)
any other form of evidence mutually agreed upon by the Secretary and the qualified participating entity.
(E)

Underwriting standards.—
The Secretary shall allow any qualified participating entity to use its own underwriting standards and loan terms and conditions for purposes of underwriting loans to be insured under this subsection, except as provided in this section, without further review by the Secretary, except that the Secretary may impose additional underwriting criteria and loan terms and conditions for contractual agreements where the Secretary retains more than 50 percent of the risk of loss. Any financing permitted on property insured under this subsection other than the first mortgage shall be expressly subordinate to the insured mortgage.
(F)

Authority of secretary.—
The Secretary, upon request of a qualified participating entity, may insure or reinsure and make commitments to insure or reinsure under this section any mortgage, advance, loan, or pool of mortgages otherwise eligible under this section, pursuant to a risk-sharing agreement providing that the qualified participating entity will carry out (under a delegation or otherwise, and with or without compensation, but subject to audit, exception, or review requirements) such credit approval, appraisal, inspection, issuance of commitments, approval of insurance of advances, cost certification, servicing, property disposition, or other functions as the Secretary shall approve as consistent with the purpose of this section. All appraisals of property for mortgage insurance under this section shall be completed by a Certified General Appraiser in accordance with the Uniform Standards of Professional Appraisal Practice.
(G)

Disclosure of records.—
Qualified participating entities shall make available to the Secretary or the Secretary's designee, at the Secretary's request, such financial and other records as the Secretary deems necessary for purposes of review and monitoring for the program under this section.
(3)

Development of alternatives.—
The Secretary shall develop and assess a variety of risk-sharing alternatives, including arrangements under which the Secretary assumes an appropriate share of the risk related to long-term mortgage loans on newly constructed or acquired multifamily rental housing, mortgage refinancings, bridge financing for construction, and other forms of multifamily housing mortgage lending that the Secretary deems appropriate to carry out the purposes of this subsection. Such alternatives shall be designed—
(A)
to ensure that other parties bear a share of the risk, in percentage amount and in position of exposure, that is sufficient to create strong, market-oriented incentives for other participating parties to maintain sound underwriting and loan management practices;
(B)
to develop credit mechanisms, including sound underwriting criteria, processing methods, and credit enhancements, through which resources of the Federal Housing Administration can assist in increasing multifamily housing lending as needed to meet the expected need in the United States;
(C)
to provide a more adequate supply of mortgage credit for sound multifamily rental housing projects in underserved urban and rural markets;
(D)
to encourage major financial institutions to expand their participation in mortgage lending for sound multifamily housing, through means such as mitigating uncertainties regarding actions of the Federal Government (including the possible failure to renew short-term subsidy contracts);
(E)
to increase the efficiency, and lower the costs to the Federal Government, of processing and servicing multifamily housing mortgage loans insured by the Federal Housing Administration; and
(F)
to improve the quality and expertise of Federal Housing Administration staff and other resources, as required for sound management of reinsurance and other market-oriented forms of credit enhancement.
(4)

Eligibility standards.—
The Secretary shall establish and enforce standards for eligibility under this subsection of qualified participating entities under this subsection, as the Secretary determines to be appropriate.
(5)

Insurance authority.—
Using any authority provided in appropriation Acts to insure mortgages under the National Housing Act, the Secretary may enter into commitments under this subsection for risk-sharing units.
(6)

Fees.—
The Secretary shall establish and collect premiums and fees under this subsection as the Secretary determines appropriate to (A) achieve the purpose of this subsection, and (B) compensate the Federal Housing Administration for the risks assumed and related administrative costs.
(7)

Non-federal participation.—
The Secretary shall carry out this subsection, to the maximum extent practicable, with the participation of well-established residential mortgage originators, financial institutions that invest in multifamily housing mortgages, multifamily housing sponsors, and such other private sector experts in multifamily housing finance as the Secretary determines to be appropriate.
(8)

Prohibition on ginnie mae securitization.—
The Government National Mortgage Association shall not securitize any multifamily loans insured or reinsured under this subsection.
(9)

Qualification as affordable housing.—
Multifamily housing securing loans insured or reinsured under this subsection shall qualify as affordable only if the housing is occupied by families and bears rents not greater than the gross rent for rent-restricted residential units as determined under section 42(g) of the Internal Revenue Code of 1986.
(10)

Certification of subsidy layering compliance.—
The requirements of section 102(d) of the Department of Housing and Urban Development Reform Act of 1989 may be satisfied in connection with a commitment to insure a mortgage under this subsection by a certification by a housing credit agency (including an entity established by a State that provides mortgage insurance) to the Secretary that the combination of assistance within the jurisdiction of the Secretary and other government assistance provided in connection with a property for which a mortgage is to be insured shall not be any greater than is necessary to provide affordable housing.
(11)

Implementation.—
The Secretary shall take any administrative actions necessary to initiate the program under this subsection.
(c)

Housing Finance Agency Program.—
(1)

In general.—
The Secretary shall carry out a specific program in conjunction with qualified housing finance agencies (including entities established by States that provide mortgage insurance) to provide Federal credit enhancement for loans for affordable multifamily housing through a system of risk-sharing agreements with such agencies.
(2)

program 10 requirements.—
^{10}
Section 235(5) of H.R. 5482 (106th Congress, as introduced in the House of Representatives; 114 Stat. 1441A–35), enacted by section 1(a)(1) of Public Law 106–377 (114 Stat. 1441) amends section 542 by striking “pilot” and “Pilot” each place such terms appear. The heading for paragraph (2) probably should have been amended by striking “program” and inserting “Program”.
(A)

In general.—
In carrying out the program authorized under this subsection, the Secretary shall enter into risk-sharing agreements with qualified housing finance agencies.
(B)

Mortgage insurance.—
Agreements under subparagraph (A) shall provide for full mortgage insurance through the Federal Housing Administration of the loans for affordable multifamily housing originated by or through qualified housing finance agencies and for reimbursement to the Secretary by such agencies for either all or a portion of the losses incurred on the loans insured.
(C)

Risk apportionment.—
Agreements entered into under this subsection between the Secretary and a qualified housing finance agency shall specify the percentage of loss that each of the parties to the agreement will assume in the event of default of the insured multifamily mortgage. Such agreements shall specify that the qualified housing finance agency and the Secretary shall share any loss in accordance with the risk-sharing agreement.
(D)

Reimbursement capacity.—
Agreements entered into under this subsection between the Secretary and a qualified housing finance agency shall provide evidence of the capacity of such agency to fulfill any reimbursement obligations made pursuant to this subsection. Evidence of such capacity may include—
(i)
a pledge of the full faith and credit of a qualified State or local agency to fulfill any obligations entered into by the qualified housing finance agency;
(ii)
reserves pledged or otherwise restricted by the qualified housing finance agency in an amount equal to an agreed upon percentage of the loss assumed by the housing finance agency under subparagraph (C);
(iii)
funds pledged through a State or local guarantee fund; or
(iv)
any other form of evidence mutually agreed upon by the Secretary and the qualified housing finance agency.
(E)

Underwriting standards.—
The Secretary shall allow any qualified housing finance agency to use its own underwriting standards and loan terms and conditions for purposes of underwriting loans to be insured under this subsection without further review by the Secretary, except that the Secretary may impose additional underwriting criteria and loan terms and conditions for contractual agreements where the Secretary retains more than 50 percent of the risk of loss.
(F)

Disclosure of records.—
Qualified housing finance agencies shall make available to the Secretary such financial and other records as the Secretary deems necessary for program review and monitoring purposes.
(3)

Mortgage insurance premiums.—
The Secretary shall establish a schedule of insurance premium payments for mortgages insured under this subsection based on the percentage of loss the Secretary may assume. Such schedule shall reflect lower or nominal premiums for qualified housing finance agencies that assume a greater share of the risk apportioned according to paragraph (2)(C).
(4)

Insurance authority.—
Using any authority provided in appropriation Acts to insure mortgages under the National Housing Act, the Secretary may enter into commitments under this subsection for risk-sharing units.
(5)

Identity of interest.—
Notwithstanding any other provision of law, the Secretary shall not apply identity of interest provisions to agreements entered into with qualified State housing finance agencies under this subsection.
(6)

Prohibition on ginnie mae securitization.—
The Government National Mortgage Association shall not securitize any multifamily loans insured under this subsection.
(7)

Qualification as affordable housing.—
Multifamily housing securing loans insured under this subsection shall qualify as affordable only if the housing is occupied by families and bears rents not greater than the gross rent for rent-restricted residential units as determined under section 42(g) of the Internal Revenue Code of 1986.
(8)

Regulations.—
Not later than 90 days after the date of enactment of this Act 11, the Secretary shall issue such regulations as may be necessary to carry out this subsection.
^{11}
The date of enactment was October 28, 1992.
(9)

Environmental and other reviews.—
(A)

Environmental reviews.—
(i)

In general.—
(I)
In order to assure that the policies of the National Environmental Policy Act of 1969 and other provisions of law which further the purposes of such Act (as specified in regulations issued by the Secretary) are most effectively implemented in connection with the insurance of mortgages under subsection (c)(2), and to assure to the public undiminished protection of the environment, the Secretary may, under such regulations, in lieu of the environmental protection procedures otherwise applicable, provide for agreements to endorse for insurance mortgages under subsection (c)(2) upon the request of qualified housing finance agencies under this subsection, if the State or unit of general local government, as designated by the Secretary in accordance with regulations, assumes all of the responsibilities for environmental review, decisionmaking, and action pursuant to such Act, and such other provisions of law as the regulations of the Secretary may specify, that would otherwise apply to the Secretary with respect to the insurance of mortgages on particular properties.
(II)
The Secretary shall issue regulations to carry out this subparagraph only after consultation with the Council on Environmental Quality. Such regulations shall, among other matters, provide—
- (aa)
for the monitoring of the performance of environmental reviews under this subparagraph;
- (bb)
subject to the discretion of the Secretary, for the provision or facilitation of training for such performance; and
- (cc)
subject to the discretion of the Secretary, for the suspension or termination by the Secretary of the qualified housing finance agency's responsibilities under subclause (I).
(III)
The Secretary's duty under subclause (II) shall not be construed to limit any responsibility assumed by a State or unit of general local government with respect to any particular property under subclause (I).
(ii)

Procedure.—
The Secretary shall approve a mortgage for the provision of mortgage insurance subject to the procedures authorized by this paragraph only if, not less than 15 days prior to such approval, prior to any approval, commitment, or endorsement of mortgage insurance on the property on behalf of the Secretary, and prior to any commitment by the qualified housing finance agency to provide financing under the risk-sharing agreement with respect to the property, the qualified housing finance agency submits to the Secretary a request for such approval, accompanied by a certification of the State or unit of general local government that meets the requirements of clause (iii). The Secretary's approval of any such certification shall be deemed to satisfy the Secretary's responsibilities under the National Environmental Policy Act of 1969 and such other provisions of law as the regulations of the Secretary specify insofar as those responsibilities relate to the provision of mortgage insurance on the property that is covered by such certification.
(iii)

Certification.—
A certification under the procedures authorized by this paragraph shall—
(I)
be in a form acceptable to the Secretary;
(II)
be executed by the chief executive officer or other officer of the State or unit of general local government who qualifies under regulations of the Secretary;
(III)
specify that the State or unit of general local government under this section has fully carried out its responsibilities as described under clause (i); and
(IV)
specify that the certifying officer consents to assume the status of a responsible Federal official under the National Environmental Policy Act of 1969 and under each provision of law specified in regulations issued by the Secretary insofar as the provisions of such Act or such other provisions of law apply pursuant to clause (i), and is authorized and consents on behalf of the State or unit of general local government and himself or herself to accept the jurisdiction of the Federal courts for the purpose of enforcement of the responsibilities as such an official.
(iv)

Approval by states.—
In cases in which a unit of general local government carries out the responsibilities described in clause (i), the Secretary may permit the State to perform those actions of the Secretary described in clause (ii) and the performance of such actions by the State, where permitted by the Secretary, shall be deemed to satisfy the Secretary's responsibilities referred to in the second sentence of clause (ii).
(B)

Lead-based paint poisoning prevention.—
In carrying out the requirements of section 302 of the Lead-Based Paint Poisoning Prevention Act, the Secretary may provide by regulation for the assumption of all or part of the Secretary's duties under such Act by qualified housing finance agencies, for purposes of this section.
(C)

Certification of subsidy layering compliance.—
The requirements of section 102(d) of the Department of Housing and Urban Development Reform Act of 1989 may be satisfied in connection with a commitment to insure a mortgage under this subsection by a certification by a housing credit agency (including an entity established by a State that provides mortgage insurance) to the Secretary that the combination of assistance within the jurisdiction of the Secretary and other government assistance provided in connection with a property for which a mortgage is to be insured shall not be any greater than is necessary to provide affordable housing.
(10)

Definitions.—
For purposes of this subsection, the following definitions shall apply:
(A)

Mortgage.—
The term “mortgage” means a first mortgage on real estate that is—
(i)
owned in fee simple; or
(ii)
subject to a leasehold interest that—
(I)
has a term of not less than 99 years and is renewable; or
(II)
has a remaining term that extends beyond the maturity of the mortgage for a period of not less than 10 years.
(B)

First mortgage.—
The term “first mortgage” means a single first lien given to secure advances on, or the unpaid purchase price of, real estate, under the laws of the State in which the real estate is located, together with the credit instrument, if any, secured thereby. Any other financing permitted on property insured under this section must be expressly subordinate to the insured mortgage.
(C)

Unit of general local government; state.—
The terms “unit of general local government” and “State” have the same meanings as in section 102(a) of the Housing and Community Development Act of 1974.
SEC. 543.
[12 U.S.C. 1707 note]

NATIONAL INTERAGENCY TASK FORCE ON MULTIFAMILY HOUSING.
(a)

Purpose.—
The purpose of this section is to establish a National Interagency Task Force on Multifamily Housing to develop recommendations for establishing a national database on multifamily housing loans.
(b)

Establishment of Task Force.—
There is established a Task Force known as the National Interagency Task Force on Multifamily Housing (hereafter in this section referred to as the “Task Force”).
(c)

Membership of Task Force.—
(1)

Federal officials.—
The Task Force shall be composed of—
(A)
the Secretary of Housing and Urban Development;
(B)
the Chairperson of the Federal Housing Finance Board;
(C)
the Comptroller of the Currency;
(D)
the Chairperson of the Federal National Mortgage Association; and
(E)
the Chairperson of the Federal Home Loan Mortgage Corporation,
or their designees, and the persons appointed under paragraphs (2) and (3).
(2)

Appointments by the secretary.—
The Secretary shall appoint as members of the Task Force—
(A)
1 individual who is a representative of a State housing finance agency;
(B)
1 individual who is a representative of a local housing finance agency;
(C)
1 individual who is a representative of the building industry with experience in multifamily housing; and
(D)
1 individual who is a representative of the life insurance industry with experience in multifamily loan performance data.
(3)

Appointments by the chairperson of the fhfb.—
The Chairman of the Federal Housing Finance Board shall appoint as members of the Task Force—
(A)
1 individual who is a representative from the financial services industry with experience in multifamily housing underwriting;
(B)
1 individual who is a representative from the nonprofit housing development sector with experience in subsidized multifamily housing development; and
(C)
1 individual who is a representative from a nationally recognized rating agency.
(d)

Administration.—
(1)

Chairpersons.—
The Task Force shall be chaired jointly by the Secretary and the Chairman of the Federal Housing Finance Board.
(2)

Meetings.—
The Task Force shall meet no less than 4 times, at the call of the Chairpersons of the Task Force.
(3)

Quorum.—
A majority of the members of the Task Force shall constitute a quorum for the transaction of business.
(4)

Voting.—
Each member of the Task Force shall be entitled to 1 vote, which shall be equal to the vote of every other member of the Task Force.
(5)

Vacancies.—
Any vacancy on the Task Force shall not affect its powers, but shall be filled in the manner in which the original appointment was made.
(6)

Prohibition on additional pay.—
Members of the Task Force shall serve without compensation, but shall be reimbursed for travel, subsistence, and other necessary expenses incurred in the performance of their duties as members of the Task Force.
(e)

Functions of the Task Force.—
(1)

In general.—
The Task Force shall conduct a multifamily housing financial data project in order to improve the availability and efficiency of financing for multifamily rental housing. The project shall—
(A)
analyze available data regarding the performance of multifamily housing mortgage loans in all regions of the country;
(B)
prepare a comprehensive national database on the operation and financing of multifamily housing that will provide reliable information appropriate to meet the projected needs of lenders, investors, sponsors, property managers, and public officials;
(C)
identify important factors that affect the long-term financial and operational soundness of multifamily housing properties, including factors relating to project credit risk, project underwriting, interest rate risk, real estate market conditions, public subsidies, tax policies, borrower characteristics, program management standards, and government policies;
(D)
develop common definitions, standards, and procedures that will improve multifamily housing underwriting and accelerate the development of a strong, competitive, and efficient secondary market for multifamily housing loans; and
(E)
make available appropriate information to various organizations in forms that will assist in improving multifamily housing loan underwriting and servicing.
(2)

Final report.—
Not later than 1 year following the enactment of this Act 12, the Task Force shall submit to the Congress a final report which shall contain the information, evaluations, and recommendations specified in paragraph (1).
^{12}
The date of enactment was October 28, 1992.
(f)

Authority of Task Force.—
(1)

Rules and regulations.—
The Task Force may adopt such rules and regulations as may be necessary to establish its procedures and to govern the manner of its operations, organization and personnel.
(2)

Access to data.—
The members of the Task Force representing the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Secretary of Housing and Urban Development, the Federal Housing Finance Board, the Federal National Mortgage Association, and the Federal Home Loan Mortgage Corporation shall make available to the Task Force a representative sample of multifamily housing mortgage loans in order for the Task Force to make its findings and recommendations, except that—
(A)
all information obtained shall be used only for the purposes authorized in this section;
(B)
the Task Force shall maintain the confidentiality of all such information obtained in the manner established for the material by the submitting entity, and such data shall not be subject to release under section 552 of title 5, United States Code;
(C)
only aggregate data shall be publicly released by the Task Force unless it receives the explicit permission of the mortgage originator or government-sponsored enterprise from which the information is obtained; and
(D)
any officer or employee of the Secretary, the Board of Governors of the Federal Reserve, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, or the Federal Housing Finance Board shall be subject to the penalties under section 1906 of title 18, United States Code, if—
(i)
by virtue of employment or official position, the officer or employee has possession of or access to any book, record, or information made available under this subsection and established as confidential under subparagraph (C); and
(ii)
the officer or employee discloses the material in any manner other than to an officer or employee of the same Federal agency employing the officer or employee, or other than pursuant to the exemptions under section 1906.
(3)

Sample data.—
In order to ensure a representative sample of multifamily housing data, the Department of Housing and Urban Development, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation are authorized to request loan data from a representative sample of mortgage originators or the government-sponsored enterprises regulated by these agencies, and mortgages originated by housing finance agencies and life insurance companies, except that—
(A)
all information obtained shall be used only for the purposes authorized in this section;
(B)
the Task Force shall maintain the confidentiality of all such information obtained in the manner established for the material by the submitting entity, and such data shall not be subject to release under section 552 of title 5, United States Code;
(C)
only aggregate data shall be publicly released by the Task Force unless it receives the explicit permission of the mortgage originator or government-sponsored enterprise from which the information is obtained; and
(D)
any officer or employee of the Secretary, the the 13 Board of Governors of the Federal Reserve, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, or the Federal Housing Finance Board shall be subject to the penalties under section 1906 of title 18, United States Code, if—
^{13}
So in law. See amendment made by section 371(2)(B)(ii) of Public Law 111–203.
(i)
by virtue of employment or official position, the officer or employee has possession of or access to any book, record, or information made available under this subsection and established as confidential under subparagraph (C); and
(ii)
the officer or employee discloses the material in any manner other than to an officer or employee of the same Federal agency employing the officer or employee, or other than pursuant to the exemptions under section 1906.
(4)

Agency resources.—
The Task Force may, with the consent of any Federal agency or department represented on the Task Force, utilize the information, services, staff and facilities of such agency or department on a reimbursable basis, to assist the Task Force in carrying out its duties under this section.
(5)

Mails.—
The Task Force may use the United States mails in the same manner and under the same conditions as other Federal agencies.
(6)

Contracting.—
The Task Force may, to such extent and in such amounts as are provided in appropriations Acts, enter into contracts with private firms, institutions, and individuals for the purpose of discharging its duties under this section.
(7)

Staff.—
The Task Force may appoint and fix the compensation of such personnel as it deems advisable, in accordance with the provisions of title 5, United States Code, governing appointments to the competitive service, and the provisions of chapter 51 and subchapter III of chapter 53 of such title, relating to classification of General Schedule pay rates.
(g)

Independent Evaluation.—
The Comptroller General of the United States shall be authorized to conduct an independent analysis of the findings and recommendations submitted by the Task Force to the Congress under this section.
(h)

Authorization of Appropriations.—
There are authorized to be appropriated to carry out this section not to exceed $6,000,000 for fiscal year 1993 and $6,252,000 for fiscal year 1994. Funds appropriated under this subsection shall remain available until expended.
SEC. 544.
[12 U.S.C. 1707 note]

DEFINITIONS.
For purposes of this subtitle:
(1)
The term “multifamily housing” means housing accommodations on the mortgaged property that are designed principally for residential use, conform to standards satisfactory to the Secretary, and consist of not less than 5 rental units on 1 site. These units may be detached, semidetached, row house, or multifamily structures.
(2)
The term “qualified housing finance agency” means any State or local housing finance agency that—
(A)
carries the designation of “top tier” or its equivalent, as evaluated by Standard and Poors or any other nationally recognized rating agency;
(B)
receives a rating of “A” for its general obligation bonds from a nationally recognized rating agency; or
(C)
otherwise demonstrates its capacity as a sound and experienced agency based on, but not limited to, its experience in financing multifamily housing, fund balances, administrative capabilities, investment policy, internal controls and financial management, portfolio quality, and State or local support.
(3)
The term “reinsurance agreement” means a contractual obligation under which the Secretary, in exchange for appropriate compensation, agrees to assume a specified portion of the risk of loss that a lender or other party has previously assumed with respect to a mortgage on a multifamily housing property.
(4)
The term “Secretary” means the Secretary of Housing and Urban Development.
(5)
The term “qualified participating entity” means an entity approved by the Secretary for participation in the pilot program under this subsection, which may include—
(A)
the Federal National Mortgage Association;
(B)
the Federal Home Loan Mortgage Corporation;
(C)
State housing finance and mortgage insurance agencies; and
(D)
the Federal Housing Finance Board.
* * * * * * *
TITLE VI—

HOUSING FOR ELDERLY PERSONS AND PERSONS WITH DISABILITIES
* * * * * * *
Subtitle C—

Standards and Obligations of Residency in Federally Assisted Housing
SEC. 641.
[42 U.S.C. 13601]

COMPLIANCE BY OWNERS AS CONDITION OF FEDERAL ASSISTANCE.
The Secretary of Housing and Urban Development shall require owners of federally assisted housing (as such term is defined in section 683(2)), as a condition of receiving housing assistance for such housing, to comply with the procedures and requirements established under this subtitle.
SEC. 642.
[42 U.S.C. 13602]

COMPLIANCE WITH CRITERIA FOR OCCUPANCY AS REQUIREMENT FOR TENANCY.
In selecting tenants for occupancy of units in federally assisted housing, an owner of such housing shall utilize the criteria for occupancy in federally assisted housing established by the Secretary, by regulation, under section 643. If an owner determines that an applicant for occupancy in the housing does not meet such criteria, the owner may deny such applicant occupancy.
SEC. 643.
[42 U.S.C. 13603]

ESTABLISHMENT OF CRITERIA FOR OCCUPANCY.
(a)

Task Force.—
(1)

Establishment.—
To assist the Secretary in establishing reasonable criteria for occupancy in federally assisted housing, the Secretary shall establish a task force to review all rules, policy statements, handbooks, technical assistance memoranda, and other relevant documents issued by the Department of Housing and Urban Development on the standards and obligations governing residency in federally assisted housing and make recommendations to the Secretary for the establishment of such criteria for occupancy.
(2)

Members.—
The Secretary shall appoint members to the task force, which shall include individuals representing the interests of owners, managers, and tenants of federally assisted housing, public housing agencies, owner and tenant advocacy organizations, persons with disabilities and disabled families, organizations assisting homeless individuals, and social service, mental health, and other nonprofit servicer providers who serve federally assisted housing.
(3)

Compensation.—
Members of the task force shall not receive compensation for serving on the task force.
(4)

Duties.—
The task force shall—
(A)
review all existing standards, regulations, and guidelines governing occupancy and tenant selection policies in federally assisted housing;
(B)
review all existing standards, regulations, and guidelines governing lease provisions and other rules of occupancy for federally assisted housing;
(C)
determine whether the standards, regulations, and guidelines reviewed under subparagraphs (A) and (B) provide sufficient guidance to owners and managers of federally assisted housing to—
(i)
develop procedures for preselection inquiries sufficient to determine the capacity of applicants to comply with reasonable lease terms and conditions of occupancy;
(ii)
utilize leases that prohibit behavior which endangers the health or safety of other tenants or violates the rights of other tenants to peaceful enjoyment of the premises;
(iii)
assess the need to provide, and appropriate measures for providing, reasonable accommodations required under the Fair Housing Act and section 504 of the Rehabilitation Act of 1973 for persons with various types of disabilities; and
(iv)
comply with civil rights laws and regulations;
(D)
propose criteria for occupancy in federally assisted housing, standards for the reasonable performance and behavior of tenants of federally assisted housing, compliance standards consistent with the reasonable accommodation of the requirements of the Fair Housing Act and section 504 of the Rehabilitation Act of 1973, standards for compliance with other civil rights laws, and procedures for the eviction of tenants not complying with such standards consistent with sections 6 and 8 of the United States Housing Act of 1937; and
(E)
report to the Congress and the Secretary of Housing and Urban Development pursuant to paragraph (7).
(5)

Procedure.—
In carrying out its duties, the task force shall hold public hearings and receive written comments for a period of not less than 60 days.
(6)

Support.—
The Secretary of Housing and Urban Development shall cooperate fully with the task force and shall provide support staff and office space to assist the task force in carrying out its duties.
(7)

Reports.—
Not later than 3 months after the date of enactment of this Act 14, the task force shall submit to the Secretary and the Congress a preliminary report describing its initial actions. Not later than 6 months after the date of enactment of this Act 14, the task force shall submit a report to the Secretary and the Congress, which shall include—
^{14}
The date of enactment was October 28, 1992.
(A)
a description of its findings; and
(B)
recommendations to revise such standards, regulations, and guidelines to provide accurate and complete guidance to owners and managers of federally assisted housing as determined necessary under paragraph (4).
(b)

Rulemaking.—
(1)

Authority.—
The Secretary shall, by regulation, establish criteria for selection of tenants for occupancy in federally assisted housing and lease provisions for such housing.
(2)

Standards.—
The criteria shall provide sufficient guidance to owners and managers of federally assisted housing to enable them to (A) select tenants capable of complying with reasonable lease terms, (B) utilize leases prohibiting behavior which endangers the health or safety of others or violates the right of other tenants to peaceful enjoyment of the premises, (C) comply with legal requirements to make reasonable accommodations for persons with disabilities, and (D) comply with civil rights laws. The criteria shall be consistent with the requirements under subsections (k) and (l) of section 6 and section 8(d)(1) of the United States Housing Act of 1937 and any similar contract and lease requirements for federally assisted housing. In establishing the criteria, the Secretary shall take into consideration the report of the task force under subsection (a)(7).
(3)

Procedure.—
Not later than 90 days after the submission of the final report under subsection (a)(7), the Secretary shall issue a notice of proposed rulemaking of the regulations under this subsection providing for notice and opportunity for public comment regarding the regulations, pursuant to the provisions of section 553 of title 5, United States Code (notwithstanding subsections (a)(2), (b)(B), and (d)(3) of such section). The duration of the period for public comment under such section 553 shall not be less than 60 days. The Secretary shall issue final regulations under this subsection not later than the expiration of the 60-day period beginning upon the conclusion of the comment period, which shall take effect upon issuance.
SEC. 644.
[42 U.S.C. 13604]

ASSISTED APPLICATIONS.
(a)

Authority.—
The Secretary shall provide that any individual or family applying for occupancy in federally assisted housing may include in the application for the housing the name, address, phone number, and other relevant information of a family member, friend, or social, health, advocacy, or other organization, and that the owner shall treat such information as confidential.
(b)

Maintenance of Information.—
The Secretary shall require the owner of any federally assisted housing receiving an application including such information to maintain such information for any applicants who become tenants of the housing, for the purposes of facilitating contact by the owner with such person or organization to assist in providing any services or special care for the tenant and assist in resolving any relevant tenancy issues arising during the tenancy of such tenant.
(c)

Limitations.—
An owner of federally assisted housing may not require any individual or family applying for occupancy in the housing to provide the information described in subsection (a).
Subtitle D—

Authority To Provide Preferences for Elderly Residents and Units for Disabled Residents in Certain Section 8 Assisted Housing
SEC. 651.
[42 U.S.C. 13611]

AUTHORITY.
Notwithstanding any other provision of law, an owner of a covered section 8 housing project (as such term is defined in section 659) designed primarily for occupancy by elderly families may, in selecting tenants for units in the project that become available for occupancy, give preference to elderly families who have applied for occupancy in the housing, subject to the requirements of this subtitle.
SEC. 652.
[42 U.S.C. 13612]

RESERVATION OF UNITS FOR DISABLED FAMILIES.
(a)

Requirement.—
Notwithstanding any other provision of law, for any project for which an owner gives preference in occupancy to elderly families pursuant to section 651, such owner shall (subject to sections 653, 654, and 655) reserve units in the project for occupancy only by disabled families who are not elderly or near-elderly families (and who have applied for occupancy in the housing) in the number determined under subsection (b).
(b)

Number of Units.—
Each owner required to reserve units in a project for occupancy under subsection (a) shall reserve a number of units in the project that is not less than the lesser of—
(1)
the number of units equivalent to the higher of—
(A)
the percentage of units in the project that were occupied by such disabled families upon the date of the enactment of this Act; or
(B)
the percentage of units in the project that were occupied by such families upon January 1, 1992; or
(2)
10 percent of the number of units in the project.
SEC. 653.
[42 U.S.C. 13613]

SECONDARY PREFERENCES.
(a)

Insufficient Elderly Families.—
If an owner of a covered section 8 housing project in which elderly families are given a preference for occupancy pursuant to section 651 determines (in accordance with regulations established by the Secretary) that there are insufficient numbers of elderly families who have applied for occupancy in the housing to fill all the units in the project not reserved under section 652, the owner may give preference for occupancy of such units to disabled families who are near-elderly families and have applied for occupancy in the housing.
(b)

Insufficient Non-Elderly Disabled Families.—
If an owner of a covered section 8 housing project in which elderly families are given a preference for occupancy pursuant to section 651 determines (in accordance with regulations established by the Secretary) that there are insufficient numbers of disabled families who are not elderly or near-elderly families and have applied for occupancy in the housing to fill all the units in the project reserved under section 652, the owner may give preference for occupancy of units so reserved to disabled families who are near-elderly families and have applied for occupancy in the housing.
SEC. 654.
[42 U.S.C. 13614]

GENERAL AVAILABILITY OF UNITS.
If an owner of a covered section 8 housing project in which disabled families who are near-elderly families are given a preference for occupancy pursuant to subsection (a) or (b) of section 653 determines (in accordance with regulations established by the Secretary) that there are an insufficient number of such families to fill all the units in the project for which the preference is applicable, the owner shall make such units generally available for occupancy by families who have applied, and are eligible, for occupancy in the housing, without regard to the preferences established pursuant to this subtitle.
SEC. 655.
[42 U.S.C. 13615]

PREFERENCE WITHIN GROUPS.
Among disabled families qualifying for occupancy in units reserved under section 652, and among elderly families and near-elderly families qualifying for preference for occupancy pursuant to section 651 or 653, preference for occupancy in units that are assisted under section 8 of the United States Housing Act of 1937 shall be given to disabled families according to any preferences established under any system established under section 8(d)(1)(A) by the public housing agency.
SEC. 656.
[42 U.S.C. 13616]

PROHIBITION OF EVICTIONS.
Any tenant who, except for reservation of a percentage of the units of a project pursuant to section 652 or any preference for occupancy established pursuant to this subtitle, is lawfully residing in a dwelling unit in a covered section 8 housing project, may not be evicted or otherwise required to vacate such unit because of the reservation or preferences or because of any action taken by the Secretary of Housing and Urban Development or the owner of the project pursuant to this subtitle.
SEC. 657.
[42 U.S.C. 13617]

TREATMENT OF COVERED SECTION 8 HOUSING NOT SUBJECT TO ELDERLY PREFERENCE.
If an owner of any covered section 8 housing project designed primarily for occupancy by elderly families does not give preference in occupancy to elderly families as authorized in this subtitle, then elderly families (as such term was defined in section 3 of the United States Housing Act of 1937 before the date of the enactment of this Act) shall be eligible for occupancy in such housing to the same extent that such families were eligible before the date of the enactment of this Act.
SEC. 658.
[42 U.S.C. 13618]

TREATMENT OF OTHER FEDERALLY ASSISTED HOUSING.
(a)

Restricted Occupancy.—
An owner of any federally assisted project (or portion of a project) as described in subparagraphs (D), (E), and (F) of section 683(2) that was designed for occupancy by elderly families may continue to restrict occupancy in such project (or portion) to elderly families in accordance with the rules, standards, and agreements governing occupancy in such housing in effect at the time of the development of the housing.
(b)

Prohibition of Evictions.—
Any tenant who is lawfully residing in a dwelling unit in a housing project described in subsection (a) may not be evicted or otherwise required to vacate such unit because of any reservation or preferences under this subtitle or because of any action taken by the Secretary of Housing and Urban Development or the owner of the project pursuant to this subtitle.
SEC. 659.
[42 U.S.C. 13619]

COVERED SECTION 8 HOUSING.
For purposes of this subtitle, the term “covered section 8 housing” means housing described in section 683(2)(G) that was originally designed for occupancy by elderly families.
SEC. 660.

SECTION 8 PREFERENCE.
Section 8(d) of the United States Housing Act of 1937 (42 U.S.C. 1437f(d)) is amended by adding at the end the following new paragraph:
“(4)
A public housing agency that serves more than one unit of general local government may, at the discretion of the agency, in allocating assistance under this section, give priority to disabled families that are not elderly families.”
.
SEC. 661.
[42 U.S.C. 13620]

STUDY.
The Secretary of Housing and Urban Development shall conduct a study to determine the extent to which Federal housing programs serve elderly families, disabled families, and families with children, in relation to the need of such families who are eligible for assistance under such programs. The Secretary shall submit a report to the Congress describing the study and the findings of the study not later than the expiration of the 1-year period beginning on the date of the enactment of this Act.15
^{15}
The date of enactment was October 28, 1992.
Subtitle E—

Service Coordinators for Elderly and Disabled Residents of Federally Assisted Housing
SEC. 671.
[42 U.S.C. 13631]

REQUIREMENT TO PROVIDE SERVICE COORDINATORS.
(a)

In General.—
To the extent that amounts are made available for providing service coordinators under this section, the Secretary shall require owners of covered federally assisted housing projects (as such term is defined in subsection (d)) receiving such amounts to provide for employing or otherwise retaining the services of one or more individuals to coordinate the provision of supportive services for elderly and disabled families residing in the projects (in this section referred to as a “service coordinator”). No such elderly or disabled family may be required to accept services.
(b)

Responsibilities.—
Each service coordinator of a covered federally assisted housing project provided pursuant to this subtitle or the amendments made by this subtitle—
(1)
shall consult with the owner of the housing, tenants, any tenant organizations, any resident management organizations, service providers, and any other appropriate persons, to identify the particular needs and characteristics of elderly and disabled families who reside in the project and any supportive services related to such needs and characteristics;
(2)
shall manage and coordinate the provision of such services for residents of the project;
(3)
may provide training to tenants of the project in the obligations of tenancy or coordinate such training;
(4)
shall meet the minimum qualifications and standards required under section 802(d)(4) of the Cranston-Gonzalez National Affordable Housing Act; and
(5)
may carry out other appropriate activities for residents of the project.
(c)

Included Services.—
Supportive services referred to under subsection (b)(1) may include health-related services, mental health services, services for nonmedical counseling, meals, transportation, personal care, bathing, toileting, housekeeping, chore assistance, safety, group and socialization activities, assistance with medications (in accordance with any applicable State laws), case management, personal emergency response, education and outreach regarding telemarketing fraud in accordance with the standards issued under subsection (f), and other appropriate services. The services may be provided through any agency of the Federal Government or any other public or private department, agency, or organization.
(d)

Covered Federally Assisted Housing.—
For purposes of this subtitle, the term “covered federally assisted housing” means housing that is federally assisted housing (as such term is defined in section 683(2)), except that such term does not include housing described in subparagraphs (C) and (D) of such section.
(e)

Services for Low-Income Elderly or Disabled Families Residing in Vicinity of Certain Projects.—
To the extent only that this section applies to service coordinators for covered federally assisted housing described in subparagraphs (B), (C), (D), (E), (F), and (G) of section 683(2), any reference in this section to elderly or disabled residents of a project shall be construed to include low-income elderly or disabled families living in the vicinity of such project.
(f)

Protection Against Telemarketing Fraud.—
(1)

In general.—
The Secretary, in coordination with the Secretary of Health and Human Services, shall establish standards for service coordinators in federally assisted housing who are providing education and outreach to elderly persons residing in such housing regarding telemarketing fraud. The standards shall be designed to ensure that such education and outreach informs such elderly persons of the dangers of telemarketing fraud and facilitates the investigation and prosecution of telemarketers engaging in fraud against such residents.
(2)

Contents.—
The standards established under this subsection shall require that any such education and outreach be provided in a manner that—
(A)
informs such residents of—
(i)
the prevalence of telemarketing fraud targeted against elderly persons;
(ii)
how telemarketing fraud works;
(iii)
how to identify telemarketing fraud;
(iv)
how to protect themselves against telemarketing fraud, including an explanation of the dangers of providing bank account, credit card, or other financial or personal information over the telephone to unsolicited callers;
(v)
how to report suspected attempts at telemarketing fraud; and
(vi)
their consumer protection rights under Federal law;
(B)
provides such other information as the Secretary considers necessary to protect such residents against fraudulent telemarketing; and
(C)
disseminates the information provided by appropriate means, and in determining such appropriate means, the Secretary shall consider on-site presentations at federally assisted housing, public service announcements, a printed manual or pamphlet, an Internet website, and telephone outreach to residents whose names appear on “mooch lists” confiscated from fraudulent telemarketers.
SEC. 672.

REQUIRED TRAINING OF SERVICE COORDINATORS.
Section 802(d)(4) of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 8011(d)(4)) is amended by inserting after the period at the end of the first sentence beginning after subparagraph (E) the following new sentence: “Such qualifications and standards shall include requiring each service coordinator to be trained in the aging process, elder services, disability services, eligibility for and procedures of Federal and applicable State entitlement programs, legal liability issues relating to providing service coordination, drug and alcohol use and abuse by the elderly, and mental health issues.”.
SEC. 673.

COSTS OF PROVIDING SERVICE COORDINATORS IN PUBLIC HOUSING.
Section 9(a)(1)(B) of the United States Housing Act of 1937 (42 U.S.C. 1437g(a)(1)(B)) is amended—
* * * * * * *
SEC. 674.

COSTS OF PROVIDING SERVICE COORDINATORS IN PROJECT-BASED SECTION 8 HOUSING.
Section 8(d)(2) of the United States Housing Act of 1937 (42 U.S.C. 1437f(d)(2)) is amended by adding at the end the following new subparagraph:
* * * * * * *
SEC. 675.

COSTS OF PROVIDING SERVICE COORDINATORS FOR FAMILIES RECEIVING FEDERAL TENANT-BASED ASSISTANCE.
Section 8(q) of the United States Housing Act of 1937 (42 U.S.C. 1437f(q)) is amended—
* * * * * * *
SEC. 676.
[42 U.S.C. 13632]

GRANTS FOR COSTS OF PROVIDING SERVICE COORDINATORS IN CERTAIN FEDERALLY ASSISTED HOUSING.
(a)

Authority.—
The Secretary may make grants under this section to owners of federally assisted housing projects described in subparagraphs (B), (C), (D), (E), (F), and (G) of section 683(2). Any grant amounts shall be used for the costs of employing or otherwise retaining the services of one or more service coordinators under section 671 to coordinate the provision of any services within the project for residents of the project who are elderly families and disabled families (as such terms are defined in section 683 of this Act). A service coordinator funded with a grant under this section for a project may provide services to low-income elderly or disabled families living in the vicinity of such project.
(b)

Application and Selection.—
The Secretary shall provide for the form and manner of applications for grants under this section and for selection of applicants to receive such grants.
(c)

Eligible Project Expense.—
For any federally assisted housing project described in subparagraph (B), (C), (D), (E), (F), or (G) of section 683(2) that does not receive a grant under this section, the cost of employing or otherwise retaining the services of one or more service coordinators under section 671 and not more than 15 percent of the cost of providing services to the residents of the project shall be considered an eligible project expense, but only to the extent that amounts are available from project rent and other income for such costs.
SEC. 677.

EXPANDED RESPONSIBILITIES OF SERVICE COORDINATORS IN SECTION 202 HOUSING.
(a)

Supportive Housing for the Elderly.—
Section 202(g) of the Housing Act of 1959 (12 U.S.C. 1701q(g)), as amended by section 801 of the Cranston-Gonzalez National Affordable Housing Act, is amended—
* * * * * * *
(b)
[12 U.S.C. 1701q note]

Old Section 202 Projects.—
(1)

Availability of section 8 assistance.—
Subject to the availability of appropriations for contract amendments for the purpose of this paragraph, in determining the amount of assistance under section 8 of the United States Housing Act of 1937 to be provided for a project assisted under section 202 of the Housing Act of 1959, as in effect before the effectiveness of the amendments made by section 801 of the Cranston-Gonzalez National Affordable Housing Act, the Secretary shall consider (and annually adjust for) the costs of—
(A)
employing or otherwise retaining the services of one or more service coordinators under section 661 of this Act to coordinate the provision of any services within the project for residents of the project who are elderly families and disabled families; and
(B)
expenses for the provision of such services.
Not more than 15 percent of the cost of the provision of services under subparagraph (B) may be considered under this paragraph for purposes of determining the amount of assistance provided.
(2)

Inapplicability of hud reform act provisions.—
Notwithstanding section 102 of the Department of Housing and Urban Development Reform Act of 1989, the provisions of paragraphs (1), (2), and (3) of subsection (a) of such section shall not apply to amendments to contracts under section 8 of the United States Housing Act of 1937 made to carry out the purposes of paragraph (1) of this subsection.
(3)

Limitation.—
If a project is receiving congregate housing services assistance under the Congregate Housing Services Act of 1978 or section 802 of the Cranston-Gonzalez National Affordable Housing Act, the amount of costs provided pursuant to paragraph (1) for the project may not exceed the additional amount necessary to cover the costs of providing for the coordination of services for residents of the project who are not eligible residents under such section 802 or eligible project residents under the Congregate Housing Services Act of 1978, as applicable.
Subtitle F—

General Provisions
SEC. 681.

COMPREHENSIVE HOUSING AFFORDABILITY STRATEGIES.
Section 105(b) of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12705(b)) is amended—
* * * * * * *
SEC. 682.

CONFORMING AMENDMENTS.
(a)

Public Housing.—
Section 6(c)(4) of the United States Housing Act of 1937 (42 U.S.C. 1437d(c)(4)) is amended—
* * * * * * *
(b)

Project-Based Section 8 Housing.—
Section 8(d)(2) of the United States Housing Act of 1937 (42 U.S.C. 1437f(d)(2)), as amended by section 664 of this Act, is further amended by adding at the end the following new subparagraphs:
* * * * * * *
(c)

Supportive Housing for the Elderly.—
Section 202 of the Housing Act of 1959 (12 U.S.C. 1701q), as amended by section 801 of the Cranston-Gonzalez National Affordable Housing Act, is amended—
* * * * * * *
SEC. 683.
[42 U.S.C. 13641]

DEFINITIONS.
For purposes of this title:
(1)

Elderly, disabled, and near-elderly families.—
The terms “elderly family”, “disabled family”, and “near-elderly family” have the meanings given the terms under section 3(b)(3) of the United States Housing Act of 1937.
(2)

Federally assisted housing.—
The terms “federally assisted housing” and “project” mean—
(A)
a public housing project (as such term is defined in section 3(b) of the United States Housing Act of 1937);
(B)
housing for which project-based assistance is provided under section 8 of the United States Housing Act of 1937;
(C)
housing that is assisted under section 202 of the Housing Act of 1959 (as amended by section 801 of the Cranston-Gonzalez National Affordable Housing Act);
(D)
housing that is assisted under section 202 of the Housing Act of 1959, as such section existed before the enactment of the Cranston-Gonzalez National Affordable Housing Act;
(E)
housing financed by a loan or mortgage insured under section 221(d)(3) of the National Housing Act that bears interest at a rate determined under the proviso of section 221(d)(5) of such Act;
(F)
housing insured, assisted, or held by the Secretary or a State or State agency under section 236 of the National Housing Act;
(G)
housing constructed or substantially rehabilitated pursuant to assistance provided under section 8(b)(2) of the United States Housing Act of 1937, as in effect before October 1, 1983, that is assisted under a contract for assistance under such section; and
(H)
housing that is assisted under section 811 of the Cranston-Gonzalez Affording Housing Act (42 U.S.C. 8013).
(3)

Housing assistance.—
The term “housing assistance” means, with respect to federally assisted housing, the grant, contribution, capital advance, loan, mortgage insurance, or other assistance provided for the housing under the provisions of law referred to in paragraph (2). The term also includes any related assistance provided for the housing by the Secretary, including any rental assistance for low-income occupants.
(4)

Owner.—
The term “owner” means, with respect to federally assisted housing, the entity or private person, including a cooperative or public housing agency, that has the legal right to lease or sublease dwelling units in such housing.
(5)

Secretary.—
The term “Secretary” means the Secretary of Housing and Urban Development.
SEC. 684.
[42 U.S.C. 13642]

APPLICABILITY.
Except as otherwise provided in subtitles B through F of this title and the amendments made by such subtitles, such subtitles and the amendments made by such subtitles shall apply upon the expiration of the 6-month period beginning on the date of the enactment of this Act.16
^{16}
The date of enactment was October 28, 1992.
SEC. 685.
[42 U.S.C. 13643]

REGULATIONS.
The Secretary shall issue regulations necessary to carry out subtitles B through F of this title and the amendments made by such subtitles not later than the expiration of the 6-month period beginning on the date of the enactment of this Act.16 The regulations shall be issued after notice and opportunity for public comment pursuant to the provisions of section 553 of title 5, United States Code (notwithstanding subsections (a)(2), (b)(B), and (d)(3) of such section).
* * * * * * *
TITLE VIII—

COMMUNITY DEVELOPMENT
* * * * * * *
Subtitle C—

Miscellaneous Programs
* * * * * * *
SEC. 851.
[42 U.S.C. 5307 note]

COMMUNITY OUTREACH ACT.
(a)

Short Title.—
This section may be cited as the “Community Outreach Partnership Act of 1992”.
(b)

Purpose.—
The Secretary shall carry out, in accordance with this section, a 5-year demonstration program to determine the feasibility of facilitating partnerships between institutions of higher education and communities to solve urban problems through research, outreach, and the exchange of information.
(c)

Grant Program.—
(1)

In general.—
The Secretary is authorized to make grants to public and private nonprofit institutions of higher education to assist in establishing or carrying out research and outreach activities addressing the problems of urban areas.
(2)

Use of grants.—
Grants under this Act 17 shall be used to establish and operate Community Outreach Partnership Centers (hereafter in this section referred to as “Centers”) which shall—
^{17}
So in law. Probably intended to refer to this section.
(A)
conduct competent and qualified research and investigations on theoretical or practical problems in large and small cities; and
(B)
facilitate partnerships and outreach activities between institutions of higher education, local communities, and local governments to address urban problems.
(3)

Specific problems.—
Research and outreach activities assisted under this Act 17 shall focus on problems associated with housing, economic development, neighborhood revitalization, infrastructure, health care, job training, education, crime prevention, planning, community organizing, and other areas deemed appropriate by the Secretary.
(d)

Application.—
Any public or private nonprofit institution of higher education may submit an application for a grant under this section in such form and containing such information as the Secretary may require by regulation.
(e)

Selection Criteria.—
(1)

In general.—
The Secretary shall select recipients of grants under this section on the basis of the following criteria:
(A)
The demonstrated research and outreach resources available to the applicant for carrying out the purposes of this section.
(B)
The capability of the applicant to provide leadership in solving community problems and in making national contributions to solving long-term and immediate urban problems.
(C)
The demonstrated commitment of the applicant to supporting urban research and outreach programs by providing matching contributions for any Federal assistance received.
(D)
The demonstrated ability of the applicant to disseminate results of research and successful strategies developed through outreach activities to other Centers and communities served through the demonstration program.
(E)
The projects and activities that the applicant proposes to carry out under the grant.
(F)
The effectiveness of the applicant's strategy to provide outreach activities to communities.
(G)
The extent of need in the communities to be served by the Centers.
(H)
Other criteria deemed appropriate by the Secretary.
(2)

Preference.—
The Secretary shall give preference to institutions of higher education that undertake research and outreach activities by bringing together knowledge and expertise in the various social science and technical disciplines that relate to urban problems.
(f)

Federal Shares.—
The Federal share of a grant under this section shall not be more than—
(1)
50 percent of the cost of establishing and operating a Center's research activities; and
(2)
75 percent of the cost of establishing and operating a Center's outreach activities.
(g)

Non-Federal Shares.—
The non-Federal share of a grant may include cash, or the value of non-cash contributions, equipment, or other in-kind contributions deemed appropriate by the Secretary.
(h)

Responsibilities.—
A Center established under this section shall—
(1)
employ the research and outreach resources of its sponsoring institution of higher education to solve specific urban problems identified by communities served by the Center;
(2)
establish outreach activities in areas identified in the grant application as the communities to be served;
(3)
establish a community advisory committee comprised of representatives of local institutions and residents of the communities to be served to assist in identifying local needs and advise on the development and implementation of strategies to address those issues;
(4)
coordinate outreach activities in communities to be served by the Center;
(5)
facilitate public service projects in the communities served by the Center;
(6)
act as a clearinghouse for the dissemination of information;
(7)
develop instructional programs, convene conferences, and provide training for local community leaders, when appropriate; and
(8)
exchange information with other Centers.
(i)

National Advisory Council.—
(1)

Establishment.—
The Secretary shall establish a national advisory council (hereafter in this section referred to as the “council”) to—
(A)
disseminate the results of research and outreach activities carried out under this section;
(B)
act as a clearinghouse between grant recipients and other institutions of higher education; and
(C)
review and evaluate programs carried out by grant recipients.
(2)

Members.—
The council shall be composed of 12 members to be appointed by the Secretary as follows—
(A)
3 representatives of State and local governments;
(B)
3 representatives of institutions of higher education that receive grants under this section;
(C)
3 individuals or representatives of organizations that possess significant expertise in urban issues; and
(D)
3 representatives from community advisory committees created pursuant to this section.
(3)

Vacancies.—
A vacancy in the membership of the council shall be filled in the manner in which the original appointment was made.
(4)

Compensation.—
Members of the council shall serve without pay.
(5)

Chairman.—
The council shall elect a member to serve as chairperson of the council.
(6)

Meetings.—
The council shall meet at least biannually and at such other times as the chairman may designate.
(j)

National Clearinghouse.—
The Secretary shall establish a national clearinghouse to disseminate information resulting from the research and successful outreach activities developed through the Centers to grant recipients and other interested institutions of higher education.
(k)

Authorizations.—
The sums set aside by section 107 of the Housing and Community Development Act of 1974 for the purpose of this section shall be available—
(1)
to enable Centers to carry out research and outreach activities;
(2)
to establish and operate the national clearinghouse to be established under subsection (j).
(l)

Reporting.—
(1)

In general.—
The Secretary of Housing and Urban Development shall submit an annual report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Banking, Finance and Urban Affairs of the House of Representatives 18.
^{18}
Section 1(a) of Public Law 104–14, 109 Stat. 186, provides, in part, that “any reference in any provision of law enacted before January 4, 1995, to . . . the Committee on Banking, Finance and Urban Affairs of the House of Representatives shall be treated as referring to the Committee on Banking and Financial Services of the House of Representatives”. However, H. Res. 5, 107th Congress, agreed to on January 3, 2001, abolished the Committee on Banking and Financial Services and established the Committee on Financial Services, which has jurisdiction over many of the areas previously under the jurisdiction of the Committee on Banking and Financial Services.
(2)

Contents.—
The report under paragraph (1) shall contain a summary of the activities carried out under this section during the preceding fiscal year, and findings and conclusions drawn from such activities.
SEC. 852.
[42 U.S.C. 5304 note]

COMPUTERIZED DATABASE OF COMMUNITY DEVELOPMENT NEEDS.
(a)

Establishment of Demonstration Program.—
Not later than the expiration of the 1-year period beginning on the date appropriations for the purposes of this section are made available, the Secretary of Housing and Urban Development (hereafter in this section referred to as the “Secretary”) shall establish and implement a demonstration program to determine the feasibility of assisting States and units of general local government to develop methods, utilizing contemporary computer technology, to—
(1)
monitor, inventory, and maintain current listings of the community development needs of the States and units of general local government; and
(2)
coordinate strategies within States (especially among various units of general local government) for meeting such needs.
(b)

Integrated Database System and Computer Mapping Tool.—
(1)

Development and purposes.—
In carrying out the program under this section, the Secretary shall provide for the development of an integrated database system and computer mapping tool designed to efficiently (A) collect, store, process, and retrieve information relating to priority nonhousing community development needs within States, and (B) coordinate strategies for meeting such needs. The integrated database system and computer mapping tool shall be designed in a manner to coordinate and facilitate the preparation of community development plans under section 104(m)(1) of the Housing and Community Development Act of 1974 and to process any information necessary for such plans.
(2)

Availability to states.—
The Secretary shall make the integrated database system and computer mapping tool developed pursuant to this subsection available to States without charge.
(3)

Coordination with existing technology.—
The Secretary shall, to the extent practicable, utilize existing technologies and coordinate such activities with existing data systems to prevent duplication.
(c)

Technical Assistance.—
Under the program under this section, the Secretary shall provide consultation and advice to States and units of general local government regarding the capabilities and advantages of the integrated database system and computer mapping tool developed pursuant to subsection (b) and assistance in installing and using the database system and mapping tool.
(d)

Grants.—
(1)

Authority and purpose.—
The Secretary shall, to the extent amounts are made available under appropriation Acts pursuant to subsection (g), make grants to States for capital costs relating to installation and use of the integrated database system and computer mapping tool developed pursuant to subsection (b).
(2)

Limitations.—
The Secretary may not make more than one grant under this subsection to any single State. The Secretary may not make a grant under this subsection to any single State in an amount exceeding $1,000,000.
(3)

Application and selection.—
The Secretary shall provide for the form and manner of applications for grants under this subsection. The Secretary shall establish criteria for the selection of States which have submitted applications to receive grants under this section and shall select recipients according to such criteria, which shall give priority to States having, on a long-term basis (as determined by the Secretary), levels of unemployment above the national average level.
(e)

State Coordination of Local Needs.—
Each State that receives a grant under subsection (d) shall annually submit to the Secretary a report containing a summary of the priority nonhousing community development needs within the State.
(f)

Reports by Secretary.—
The Secretary shall annually submit to the Committees on Banking, Finance and Urban Affairs of the House of Representatives 19 and Banking, Housing, and Urban Affairs of the Senate, a report containing a summary of the information submitted for the year by States pursuant to subsection (e), which shall describe the priority nonhousing community development needs within such States.
^{19}
Section 1(a) of Public Law 104–14, 109 Stat. 186, provides, in part, that “any reference in any provision of law enacted before January 4, 1995, to . . . the Committee on Banking, Finance and Urban Affairs of the House of Representatives shall be treated as referring to the Committee on Banking and Financial Services of the House of Representatives”. However, H. Res. 5, 107th Congress, agreed to on January 3, 2001, abolished the Committee on Banking and Financial Services and established the Committee on Financial Services, which has jurisdiction over many of the areas previously under the jurisdiction of the Committee on Banking and Financial Services.
(g)

Authorization of Appropriations.—
There are authorized to be appropriated for each of the fiscal years 1993 and 1994, $10,000,000 to carry out the program established under this section.
SEC. 853.
[42 U.S.C. 5305 note]

COMMUNITY INVESTMENT CORPORATION DEMONSTRATION.
(a)

Short Title.—
This section may be cited as the “Community Investment Corporation Demonstration Act”.
(b)

Community Investment Corporation Demonstration.—
(1)

Findings.—
The Congress finds that—
(A)
the Nation's urban and rural communities face critical social and economic problems arising from lack of growth; growing numbers of low-income persons and persons living in poverty; lack of employment and other opportunities to improve the quality of life of these residents; and lack of capital for business located in, or seeking to locate in these communities;
(B)
the future well-being of the United States and its residents depends on the restoration and maintenance of viable local economies, and will require increased public and private investment in low-income housing, business development, and economic and community development activities, and technical assistance to local organizations carrying out revitalization strategies;
(C)
lack of expertise and technical capacity can significantly limit the ability of residents and local institutions to effectively carry out revitalization strategies;
(D)
the Federal Government needs to develop new models for facilitating local revitalization activities;
(E)
indigenous community-based financial institutions play a significant role in identifying and responding to community needs; and
(F)
institutions, such as South Shore Bank (Chicago, Illinois), Southern Development Bancorporation (Arkadelphia, Arkansas), Center for Community Self Help (Durham, North Carolina), and Community Capital Bank (Brooklyn, New York), with a primary mission of promoting community development have proven their ability to promote revitalization and are appropriate models for restoring economic stability and growth in distressed communities and neighborhoods.
(2)

Purposes.—
The demonstration program carried out under this section shall—
(A)
improve access to capital for initiatives which benefit residents and businesses in targeted geographic areas; and
(B)
test new models for bringing credit and investment capital to targeted geographic areas and low-income persons in such areas through the provision of assistance for capital, development services, and technical assistance.
(3)

Definitions.—
As used in this section—
(A)
the term “Federal financial supervisory agency” means—
(i)
the Comptroller of the Currency with respect to national banks;
(ii)
the Board of Governors of the Federal Reserve System with respect to State-chartered banks which are members of the Federal Reserve System and bank holding companies;
(iii)
the Federal Deposit Insurance Corporation with respect to State-chartered banks and savings banks which are not members of the Federal Reserve System and the deposits of which are insured by the Federal Deposit Insurance Corporation;
(iv)
the National Credit Union Administration Board with respect to insured credit union associations; and
(v)
the Office of Thrift Supervision with respect to insured savings associations and savings and loan holding companies that are not bank holding companies;
(B)
the term “community investment corporation” means an eligible organization selected by the Secretary to receive assistance pursuant to this section;
(C)
the term “development services” means activities that are consistent with the purposes of this section and which support and strengthen the lending and investment activities undertaken by eligible organizations including—
(i)
the development of real estate;
(ii)
administrative activities associated with the extension of credit or necessary to make an investment;
(iii)
marketing and management assistance;
(iv)
business planning and counseling services; and
(v)
other capacity building activities which enable borrowers, prospective borrowers, or entities in which eligible organizations have invested, or expect to invest, to improve the likelihood of success of their activities;
(D)
the term “eligible organization” means an entity—
(i)
that is organized as—
(I)
a depository institution holding company as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813); or
(II)
a nonprofit organization—
- (aa)
that is organized under State law;
- (bb)
has no part of its net earnings inuring to the benefit of any member, founder, contributor, or other person;
- (cc)
complies with standards of financial accountability acceptable to the Secretary; and
- (dd)
is affiliated with a nondepository lending institution; or is affiliated with a regulated financial institution but is not a subsidiary thereof;
(ii)
that has as its primary mission the revitalization of a targeted geographic area;
(iii)
that maintains, through significant representation on its governing board and otherwise, accountability to community residents;
(iv)
that has principals active in the implementation of its programs who possess significant experience in lending and the development of affordable housing, small business development, or community revitalization;
(v)
that directly or through a subsidiary or affiliate carries out development services; and
(vi)
that will match any assistance received dollar-for-dollar with non-Federal sources of funds;
(E)
the term “equity investment” means a capital contribution through the purchase of nonvoting common stock or through equity grants or contributions to capital reserves or surplus, subject to terms and conditions satisfactory to the Secretary;
(F)
the term “low-income person” means a person in a family whose income does not exceed 80 percent of the median income for the area, as determined by the Secretary with adjustments for smaller and larger families;
(G)
the term “regulated financial institution” means an insured depository institution (as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813), or an insured credit union as defined in section 101 of the Federal Credit Union Act (12 U.S.C. 1752));
(H)
the term “Secretary” means the Secretary of Housing and Urban Development;
(I)
the term “targeted geographic area” means a geographically contiguous area of chronic economic distress, as measured by unemployment, growth lag, poverty, lag in growth of per capita income, extent of blight and disinvestment, fiscal distress, or other indicators deemed appropriate by the Secretary, that has been identified by an eligible organization as the area to be served by it; and
(J)
an entity is an “affiliate” of another entity if the first entity controls, is controlled by, or is under common control with the other entity.
(4)

Selection criteria.—
The Secretary shall select eligible organizations from among applications submitted to participate in the demonstration program, using selection criteria based on—
(A)
the capacity of the eligible organizations to carry out the purposes of this section;
(B)
the range and comprehensiveness of lending, investment strategies, and development services to be offered by the organizations directly or through subsidiaries and affiliates thereof;
(C)
the types of activities to be pursued, including lending and development of small business, agriculture, industrial, commercial, or residential projects;
(D)
the extent of need in the targeted geographic area to be served;
(E)
the experience and background of the principals at each eligible organization responsible for carrying out the purposes of this section;
(F)
the extent to which the eligible organizations directly or through subsidiaries and affiliates has successfully implemented other revitalization activities;
(G)
an appropriate distribution of eligible organizations among regions of the United States; and
(H)
other criteria determined to be appropriate by the Secretary and consistent with the purposes of this section.
(5)

Program assistance.—
The Secretary shall—
(A)
carry out, in accordance with this section, a program to improve access to capital and demonstrate the feasibility of facilitating the revitalization of targeted geographic areas by providing assistance to eligible organizations;
(B)
accept applications from eligible organizations; and
(C)
select eligible organizations to receive assistance pursuant to this section.
(6)

Activities required.—
All eligible organizations receiving assistance pursuant to this section are required to engage in activities that provide access to capital for initiatives which benefit residents and businesses in targeted geographic areas.
(7)

Capital assistance.—
(A)

In general.—
(i)

In general.—
The Secretary shall make grants and loans to eligible organizations.
(ii)

Loans.—
Assistance provided to a depository institution holding company that is an eligible organization as defined in paragraph (3)(D)(i)(I) shall be in the form of a loan to be repaid to the Secretary. The terms and conditions of each loan shall be determined by the Secretary based on the ability of such entity to repay, except that interest shall accrue at the current Treasury rate for obligations of comparable maturity.
(iii)

Grants or loans.—
Assistance provided to an eligible organization that is a nonprofit organization, as defined in paragraph (3)(D)(i)(II), may be in the form of a grant or a loan. If an eligible organization that is a nonprofit organization uses assistance that it received under this section to provide assistance to a for-profit entity, the assistance provided by the nonprofit organization must be in the form of a loan with interest to be repaid to the nonprofit organization and the nonprofit organization must use the proceeds of the loan for activities consistent with this section.
(B)

Eligible activities.—
Capital assistance may only be used to support the following activities that facilitate revitalization of targeted geographic areas or that provide economic opportunities for low-income persons—
(i)
increasing the capital available for the purpose of making loans;
(ii)
providing funds for equity investments in projects;
(iii)
providing a portion of loan loss reserves of regulated financial institutions; and
(iv)
providing credit enhancement.
(C)

Capital requirements.—
Any investment derived from assistance provided by the Secretary and made by an eligible organization to a regulated financial institution shall not be included as an asset in calculating compliance with applicable capital standards. Such standards shall be satisfied from sources other than assistance provided under this section.
(D)

Authorization.—
There are authorized to be appropriated to carry out this paragraph $25,000,000 for fiscal year 1993 and $26,000,000 for fiscal year 1994 to be used to provide capital assistance to eligible organizations. Funds appropriated pursuant to this subparagraph shall remain available until expended.
(8)

Development services and technical assistance grants.—
(A)

In general.—
The Secretary shall—
(i)
provide grants or loans to eligible organizations for the provision of development services that support and contribute to the success of the mission of such organizations; and
(ii)
provide, or contract to provide, technical assistance to eligible organizations to assist in establishing program activities that are consistent with the purposes of this section.
(B)

Authorization.—
There are authorized to be appropriated to carry out this paragraph, $15,000,000 for fiscal year 1993 and $15,600,000 for fiscal year 1994. Funds appropriated pursuant to this subparagraph shall remain available until expended.
(9)

Training program.—
(A)

In general.—
The Secretary shall establish, or contract to establish, an ongoing training program to assist eligible organizations and their staffs in developing the capacity to carry out the purposes of this section.
(B)

Authorization.—
There are authorized to be appropriated to carry out this paragraph $2,000,000 for fiscal year 1993 and $2,100,000 for fiscal year 1994. Funds appropriated pursuant to this subparagraph shall remain available until expended.
(10)

Reports.—
The Secretary shall determine the appropriate reporting requirements with which eligible organizations receiving assistance under this section must comply.
(11)

Advisory board.—
(A)

In general.—
In establishing requirements to carry out the provisions of this section, and in considering applications under this section, the Secretary shall consult with an advisory board comprised of the following members:
(i)
the Administrator of the Small Business Administration;
(ii)
two representatives from among the Federal financial supervisory agencies who possess expertise in matters related to extending credit to persons in low-income communities;
(iii)
two representatives of organizations that possess expertise in development of low-income housing;
(iv)
two representatives of organizations that possess expertise in economic development;
(v)
two representatives of organizations that possess expertise in small business development;
(vi)
two representatives from organizations that possess expertise in the needs of low-income communities; and
(vii)
two representatives from community investment corporations receiving assistance under this section.
(B)

Chairperson.—
The Board shall elect from among its members a chairperson who shall serve for a term of 2 years.
(C)

Terms.—
The members shall serve for terms of 3 years which shall expire on a staggered basis.
(D)

Reimbursement.—
The members shall serve without additional compensation but shall be reimbursed for travel, per diem, and other necessary expenses incurred in the performance of their duties as members of the advisory board, in accordance with sections 5702 and 5703 of title 5, United States Code.
(E)

Designated representatives.—
A member who is necessarily absent from a meeting of the board, or of a committee of the board, may participate in such meeting through a duly designated representative who is serving in the same agency or organization as the absent member.
(F)

Quorum.—
The presence of a majority of members, or their representatives, shall constitute a quorum.
(12)

Evaluation and report.—
The Secretary shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Banking, Finance and Urban Affairs of the House of Representatives 20 an annual report containing a summary of the activities carried out under this section during the fiscal year and any preliminary findings or conclusions drawn from the demonstration program.
^{20}
Section 1(a) of Public Law 104–14, 109 Stat. 186, provides, in part, that “any reference in any provision of law enacted before January 4, 1995, to . . . the Committee on Banking, Finance and Urban Affairs of the House of Representatives shall be treated as referring to the Committee on Banking and Financial Services of the House of Representatives”. However, H. Res. 5, 107th Congress, agreed to on January 3, 2001, abolished the Committee on Banking and Financial Services and established the Committee on Financial Services, which has jurisdiction over many of the areas previously under the jurisdiction of the Committee on Banking and Financial Services.
(13)

No benefit rule.—
To the extent that assistance is provided to an eligible organization that is a depository institution holding company, the Secretary shall ensure, to the extent practicable, that such assistance does not inure to the benefit of directors, officers, employees and stockholders.
(14)

Regulations.—
(A)
The Secretary shall issue such regulations as may be necessary to carry out the provisions of this subsection.
(B)
The appropriate Federal financial supervisory agency, by regulation or order—
(i)
may restrict any regulated financial institution's receipt of an extension of credit from, or investment by, an eligible organization;
(ii)
may restrict the making, by a regulated financial institution or holding company, of an extension of credit to, or investment in, an eligible organization; and
(iii)
shall prohibit any transaction that poses an undue risk to the affected deposit insurance fund.
(C)
To the extent practicable, the Secretary and the Federal financial supervisory agencies shall coordinate the development of regulations and other program guidelines.
(15)

Safety and soundness of insured depositories.—
Nothing in this section shall limit the applicability of other law relating to the safe and sound operation and management of a regulated financial institution (or a holding company) affiliated with an eligible organization or receiving assistance provided under this section.
(16)

Effective date.—
This section shall become effective 6 months from the date of enactment of this Act.21
^{21}
The date of enactment was October 28, 1992.
* * * * * * *
TITLE IX—

REGULATORY AND MISCELLANEOUS PROGRAMS
Subtitle A—

Miscellaneous
* * * * * * *
SEC. 911.
[42 U.S.C. 3545 note]

SUBSIDY LAYERING REVIEW.
(a)

Certification of Subsidy Layering Compliance.—
The requirements of section 102(d) of the Department of Housing and Urban Development Reform Act of 1989 may be satisfied in connection with a project receiving assistance under a program that is within the jurisdiction of the Department of Housing and Urban Development and under section 42 of the Internal Revenue Code of 1986 by a certification by a housing credit agency to the Secretary, submitted in accordance with guidelines established by the Secretary, that the combination of assistance within the jurisdiction of the Secretary and other government assistance provided in connection with a property for which assistance is to be provided within the jurisdiction of the Department of Housing and Urban Development and under section 42 of the Internal Revenue Code of 1986 shall not be any greater than is necessary to provide affordable housing.
(b)

In Particular.—
The guidelines established pursuant to subsection (a) shall—
(1)
require that the amount of equity capital contributed by investors to a project partnership is not less than the amount generally contributed by investors in current market conditions, as determined by the housing credit agency; and
(2)
require that project costs, including developer fees, are within a reasonable range, taking into account project size, project characteristics, project location and project risk factors, as determined by the housing credit agency.
(c)

Revocation by Secretary.—
If the Secretary determines that a housing credit agency has failed to comply with the guidelines established under subsection (a), the Secretary—
(1)
may inform the housing credit agency that the agency may no longer submit certification of subsidy layering compliance under this section; and
(2)
shall carry out section 102(d) of the Department of Housing and Urban Development Reform Act of 1989 relating to affected projects allocated a low-income housing tax credit pursuant to section 42 of the Internal Revenue Code of 1986.
(d)

Applicability.—
Section 102(d) of the Department of Housing and Urban Development Reform Act of 198922 (42 U.S.C. 3545(d)) shall apply only to projects for which an application for assistance or insurance was filed after the date of enactment of the Housing and Urban Development Reform Act.
^{22}
Probably intended to refer to the Department of Housing and Urban Development Reform Act of 1989, approved December 15, 1989, which is set forth ante, this part.
SEC. 912.
[42 U.S.C. 5511a]

SOLAR ASSISTANCE FINANCING ENTITY.
(a)

Establishment.—
The Secretary of Housing and Urban Development shall establish within the Department of Housing and Urban Development the Solar Assistance Financing Entity (in this section referred to as the “Entity”).
(b)

Purpose.—
The purpose of the Entity shall be to assist in financing solar and renewable energy capital investments and projects for eligible buildings under subsection (c).
(c)

Eligible Buildings.—
The Entity may provide assistance under this section only for the following buildings:
(1)

Single family housing.—
Any building consisting of 1 to 4 dwelling units that has a system for heating or cooling, or both.
(2)

Multifamily housing.—
Any building consisting of more than 4 dwelling units that has a system for heating or cooling, or both.
(3)

Commercial buildings.—
Any building used primarily to carry on a business (including any nonprofit business) that is not used primarily for the manufacture or production of raw materials, products, or agricultural commodities.
(4)

Schools, hospitals, and agricultural buildings.—
Any school, any hospital, and any building used exclusively in connection with the harvesting, storage, or drying of agricultural commodities.
(5)

Other buildings.—
Any other building of a type that the Entity considers appropriate.
(d)

Financing Options.—
Assistance provided under this section by the Entity may be provided only for programs for financing solar and renewable energy capital investments and projects, which may include programs for making loans, making grants, reducing the principal obligations of loans, prepayment of interest on loans, purchase and sale of loans and advances of credit, providing loan guarantees, providing loan downpayment assistance, and providing rebates and other incentives for the purchase and installation of solar and renewable energy measures.
(e)

Authority to Leverage Other Funds.—
The Entity may encourage or require programs receiving assistance under this section to supplement the assistance received under this section with amounts from other public and private sources, and, in making assistance under this section available, may give preference to programs that leverage amounts from such other sources.
(f)

Provision of Assistance.—
The Entity shall provide assistance under this section through State agencies responsible for developing State energy conservation plans pursuant to section 362 of the Energy Policy and Conservation Act, or any other entity or agency authorized to specifically carry out the purposes of this section.
(g)

Regulations.—
Not later than the expiration of the 12-month period beginning on the date of the enactment of this Act 23, the Secretary of Housing and Urban Development, in consultation with the Secretary of Energy, shall issue any regulations necessary to carry out this section, which shall ensure maximum flexibility in utilizing amounts made available under this section.
^{23}
The date of enactment was October 28, 1992.
(h)

Authorization of Appropriations.—
There are authorized to be appropriated to carry out this section $10,000,000 for fiscal year 1993 and $10,420,000 for fiscal year 1994. Such sums are to be available until expended.
(i)

Repeals.—
(1)

Solar energy and energy conservation bank act.—
Subtitle A of title V of the Energy Security Act (12 U.S.C. 3601 et seq.) is repealed.
(2)

Federal national mortgage association charter act.—
Sections 315 and 316 of the Federal National Mortgage Association Charter Act (12 U.S.C. 1723g, 1723h) are repealed.
* * * * * * *
SEC. 916.
[42 U.S.C. 5306 note]

CDBG ASSISTANCE FOR UNITED STATES-MEXICO BORDER REGION.
(a)

Set-Aside for Colonias.—
The States of Arizona, California, New Mexico, and Texas shall each make available, for activities designed to meet the needs of the residents of colonias in the State relating to water, sewage, and housing, the following percentage of the amount allocated for the State under section 106(d) of the Housing and Community Development Act of 1974 (42 U.S.C. 5306(d)):
(1)

First fiscal year.—
For the first fiscal year to which this section applies, 10 percent.
(2)

Succeeding fiscal years.—
For each of the succeeding fiscal years to which this section applies, a percentage (not to exceed 10 percent) that is determined by the Secretary of Housing and Urban Development to be appropriate after consultation with representatives of the interests of the residents of colonias.
(b)

Eligible Activities.—
Assistance distributed pursuant to this section may be used only to carry out the following activities:
(1)

Planning.—
Payment of the cost of planning community development (including water and sewage facilities) and housing activities, including the cost of—
(A)
the provision of information and technical assistance to residents of the area in which the activities are to be concentrated and to appropriate nonprofit organizations and public agencies acting on behalf of the residents; and
(B)
preliminary surveys and analyses of market needs, preliminary site engineering and architectural services, site options, applications, mortgage commitments, legal services, and obtaining construction loans.
(2)

Assessments for public improvements.—
The payment of assessments (including any charge made as a condition of obtaining access) levied against properties owned and occupied by persons of low and moderate income to recover the capital cost for a public improvement.
(3)

Other improvements.—
Other activities eligible under section 105 of the Housing and Community Development Act of 1974 designed to meet the needs of residents of colonias.
(c)

Distribution of Assistance.—
Assistance shall be made available pursuant to this section in accordance with a distribution plan that gives priority to colonias having the greatest need for such assistance.
(d)

Applicable Law.—
Except to the extent inconsistent with this section, assistance provided pursuant to this section shall be subject to the provisions of title I of the Housing and Community Development Act of 1974 (42 U.S.C. 5301 et seq.).
(e)

Definitions.—
For purposes of this section:
(1)

Colonia.—
The term “colonia” means any identifiable community that—
(A)
is in the State of Arizona, California, New Mexico, or Texas;
(B)
is in the United States-Mexico border region;
(C)
is determined to be a colonia on the basis of objective criteria, including lack of potable water supply, lack of adequate sewage systems, and lack of decent, safe, and sanitary housing; and
(D)24
was in existence as a colonia before the date of the enactment of the Cranston-Gonzalez National Affordable Housing Act.
^{24}
Indented so in law.
(2)

Nonprofit organization.—
The term “nonprofit organization” means an organization described in section 501(c) of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of such Code.
(3)

Persons of low and moderate income.—
The term “persons of low and moderate income” has the meaning given the term in section 102(a) of the Housing and Community Development Act of 1974 (42 U.S.C. 5302(a)).
(4)

United states-mexico border region.—
The term “United States-Mexico border region” means the area of the United States within 150 miles of the border between the United States and Mexico, except that the term does not include any standard metropolitan statistical area that has a population exceeding 1,000,000.
* * * * * * *
SEC. 920.
[42 U.S.C. 3546]

USE OF DOMESTIC PRODUCTS.
(a)
Prohibition Against Fraudulent Use of “Made in America” Labels.—A person shall not intentionally affix a label bearing the inscription of “Made in America”, or any inscription with that meaning, to any product sold in or shipped to the United States, if that product is not a domestic product.
(b)

Report.—
The Secretary of Housing and Urban Development and the Secretary of Agriculture shall each submit, before January 1, 1994, a report to the Congress on procurements of products that are not domestic products.
(c)

Definitions.—
For the purposes of this section, the term “domestic product” means a product—
(1)
that is manufactured or produced in the United States; and
(2)
at least 50 percent of the cost of the articles, materials, or supplies of which are mined, produced, or manufactured in the United States.
* * * * * * *
SEC. 925.

PERFORMANCE GOALS.
(a)
[42 U.S.C. 3536]

Performance Goals for the Department of Housing and Urban Development.—
(1)

In general.—
The Secretary of the Department of Housing and Urban Development (hereafter in this Act referred to as the “Secretary”) may establish performance goals for the major programs of the Department of Housing and Urban Development in order to measure progress towards meeting the objectives of national housing policy.
(2)

Form of goals.—
The performance goals referred to in paragraph (1) shall be expressed in terms sufficient to measure progress.
(3)

Report.—
The Secretary shall include in the Secretary's annual report to the Congress a description of the progress made in attaining the performance goals for each program, citing the results achieved in each program for the previous year.
(4)

Failure to meet goals.—
If a performance standard or goal has not been met, the description under paragraph (3) shall include an explanation of why the goal was not met, propose plans for achieving the performance goal, and recommend any legislative or regulatory changes necessary for achievement of the goal.
(b)
[42 U.S.C. 1471 note]

Performance Goals for the Farmers Home Administration.—
(1)

In general.—
The Secretary of Agriculture may establish performance goals for the major housing programs of the Farmers Home Administration in order to measure progress towards meeting the objectives of national housing policy.
(2)

Form of goals.—
The performance goals referred to in paragraph (1) shall be expressed in terms sufficient to measure progress.
(3)

Report.—
The Secretary of Agriculture shall prepare a report to the Congress on the progress made in attaining the performance goals for each program, citing the actual results achieved in such program for the previous year.
(4)

Failure to meet goals.—
If a performance standard or goal has not been met, the report under paragraph (3) shall include an explanation of why the goal was not met, propose plans for achieving the performance goal, and recommend any legislative or regulatory changes necessary for achievement of the goal.
* * * * * * *
TITLE X—

RESIDENTIAL LEAD-BASED PAINT HAZARD REDUCTION ACT OF 1992
SEC. 1001.
[42 U.S.C. 4851 note]

SHORT TITLE.
This title may be cited as the “Residential Lead-Based Paint Hazard Reduction Act of 1992”.
SEC. 1002.
[42 U.S.C. 4851]

FINDINGS.
The Congress finds that—
(1)
low-level lead poisoning is widespread among American children, afflicting as many as 3,000,000 children under age 6, with minority and low-income communities disproportionately affected;
(2)
at low levels, lead poisoning in children causes intelligence quotient deficiencies, reading and learning disabilities, impaired hearing, reduced attention span, hyperactivity, and behavior problems;
(3)
pre-1980 American housing stock contains more than 3,000,000 tons of lead in the form of lead-based paint, with the vast majority of homes built before 1950 containing substantial amounts of lead-based paint;
(4)
the ingestion of household dust containing lead from deteriorating or abraded lead-based paint is the most common cause of lead poisoning in children;
(5)
the health and development of children living in as many as 3,800,000 American homes is endangered by chipping or peeling lead paint, or excessive amounts of lead-contaminated dust in their homes;
(6)
the danger posed by lead-based paint hazards can be reduced by abating lead-based paint or by taking interim measures to prevent paint deterioration and limit children's exposure to lead dust and chips;
(7)
despite the enactment of laws in the early 1970's requiring the Federal Government to eliminate as far as practicable lead-based paint hazards in federally owned, assisted, and insured housing, the Federal response to this national crisis remains severely limited; and
(8)
the Federal Government must take a leadership role in building the infrastructure—including an informed public, State and local delivery systems, certified inspectors, contractors, and laboratories, trained workers, and available financing and insurance—necessary to ensure that the national goal of eliminating lead-based paint hazards in housing can be achieved as expeditiously as possible.
SEC. 1003.
[42 U.S.C. 4851a]

PURPOSES.
The purposes of this Act are—
(1)
to develop a national strategy to build the infrastructure necessary to eliminate lead-based paint hazards in all housing as expeditiously as possible;
(2)
to reorient the national approach to the presence of lead-based paint in housing to implement, on a priority basis, a broad program to evaluate and reduce lead-based paint hazards in the Nation's housing stock;
(3)
to encourage effective action to prevent childhood lead poisoning by establishing a workable framework for lead-based paint hazard evaluation and reduction and by ending the current confusion over reasonable standards of care;
(4)
to ensure that the existence of lead-based paint hazards is taken into account in the development of Government housing policies and in the sale, rental, and renovation of homes and apartments;
(5)
to mobilize national resources expeditiously, through a partnership among all levels of government and the private sector, to develop the most promising, cost-effective methods for evaluating and reducing lead-based paint hazards;
(6)
to reduce the threat of childhood lead poisoning in housing owned, assisted, or transferred by the Federal Government; and
(7)
to educate the public concerning the hazards and sources of lead-based paint poisoning and steps to reduce and eliminate such hazards.
SEC. 1004.
[42 U.S.C. 4851b]

DEFINITIONS.
For the purposes of this Act, the following definitions shall apply:
(1)

Abatement.—
The term “abatement” means any set of measures designed to permanently eliminate lead-based paint hazards in accordance with standards established by appropriate Federal agencies. Such term includes—
(A)
the removal of lead-based paint and lead-contaminated dust, the permanent containment or encapsulation of lead-based paint, the replacement of lead-painted surfaces or fixtures, and the removal or covering of lead contaminated soil; and
(B)
all preparation, cleanup, disposal, and postabatement clearance testing activities associated with such measures.
(2)

Accessible surface.—
The term “accessible surface” means an interior or exterior surface painted with lead-based paint that is accessible for a young child to mouth or chew.
(3)

Certified contractor.—
The term “certified contractor” means—
(A)
a contractor, inspector, or supervisor who has completed a training program certified by the appropriate Federal agency and has met any other requirements for certification or licensure established by such agency or who has been certified by any State through a program which has been found by such Federal agency to be at least as rigorous as the Federal certification program; and
(B)
workers or designers who have fully met training requirements established by the appropriate Federal agency.
(4)

Contract for the purchase and sale of residential real property.—
The term “contract for the purchase and sale of residential real property” means any contract or agreement in which one party agrees to purchase an interest in real property on which there is situated 1 or more residential dwellings used or occupied, or intended to be used or occupied, in whole or in part, as the home or residence of 1 or more persons.
(5)

Deteriorated paint.—
The term “deteriorated paint” means any interior or exterior paint that is peeling, chipping, chalking or cracking or any paint located on an interior or exterior surface or fixture that is damaged or deteriorated.
(6)

Evaluation.—
The term “evaluation” means risk assessment, inspection, or risk assessment and inspection.
(7)

Federally assisted housing.—
The term “federally assisted housing” means residential dwellings receiving project-based assistance under programs including—
(A)
section 221(d)(3) or 236 of the National Housing Act;
(B)
section 125 of the Housing and Urban Development Act of 1965;
^{25}
So in law. Probably intended to refer to section 101.
(C)
section 8 of the United States Housing Act of 1937; or
(D)
sections 502(a), 504, 514, 515, 516 and 533 of the Housing Act of 1949.
(8)

Federally owned housing.—
The term “federally owned housing” means residential dwellings owned or managed by a Federal agency, or for which a Federal agency is a trustee or conservator. For the purpose of this paragraph, the term “Federal agency” includes the Department of Housing and Urban Development, the Farmers Home Administration, the Resolution Trust Corporation, the Federal Deposit Insurance Corporation, the General Services Administration, the Department of Defense, the Department of Veterans Affairs, the Department of the Interior, the Department of Transportation, and any other Federal agency.
(9)

Federally supported work.—
The term “federally supported work” means any lead hazard evaluation or reduction activities conducted in federally owned or assisted housing or funded in whole or in part through any financial assistance program of the Department of Housing and Urban Development, the Farmers Home Administration, or the Department of Veterans Affairs.
(10)

Friction surface.—
The term “friction surface” means an interior or exterior surface that is subject to abrasion or friction, including certain window, floor, and stair surfaces.
(11)

Impact surface.—
The term “impact surface” means an interior or exterior surface that is subject to damage by repeated impacts, for example, certain parts of door frames.
(12)

Inspection.—
The term “inspection” means a surface-by-surface investigation to determine the presence of lead-based paint as provided in section 302(c) of the Lead-Based Paint Poisoning Prevention Act and the provision of a report explaining the results of the investigation.
(13)

Interim controls.—
The term “interim controls” means a set of measures designed to reduce temporarily human exposure or likely exposure to lead-based paint hazards, including specialized cleaning, repairs, maintenance, painting, temporary containment, ongoing monitoring of lead-based paint hazards or potential hazards, and the establishment and operation of management and resident education programs.
(14)

Lead-based paint.—
The term “lead-based paint” means paint or other surface coatings that contain lead in excess of limits established under section 302(c) of the Lead-Based Paint Poisoning Prevention Act.
(15)

Lead-based paint hazard.—
The term “lead-based paint hazard” means any condition that causes exposure to lead from lead-contaminated dust, lead-contaminated soil, lead-contaminated paint that is deteriorated or present in accessible surfaces, friction surfaces, or impact surfaces that would result in adverse human health effects as established by the appropriate Federal agency.
(16)

Lead-contaminated dust.—
The term “lead-contaminated dust” means surface dust in residential dwellings that contains an area or mass concentration of lead in excess of levels determined by the appropriate Federal agency to pose a threat of adverse health effects in pregnant women or young children.
(17)

Lead-contaminated soil.—
The term “lead-contaminated soil” means bare soil on residential real property that contains lead at or in excess of the levels determined to be hazardous to human health by the appropriate Federal agency.
(18)

Mortgage loan.—
The term “mortgage loan” includes any loan (other than temporary financing such as a construction loan) that—
(A)
is secured by a first lien on any interest in residential real property; and
(B)
either—
(i)
is insured, guaranteed, made, or assisted by the Department of Housing and Urban Development, the Department of Veterans Affairs, or the Farmers Home Administration, or by any other agency of the Federal Government; or
(ii)
is intended to be sold by each originating mortgage institution to any federally chartered secondary mortgage market institution.
(19)

Originating mortgage institution.—
The term “originating mortgage institution” means a lender that provides mortgage loans.
(20)

Priority housing.—
The term “priority housing” means target housing that qualifies as affordable housing under section 215 of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12745), including housing that receives assistance under subsection (b) or (o) of section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f(b) or (o)).
(21)

Public housing.—
The term “public housing” has the same meaning given the term in section 3(b) of the United States Housing Act of 1937 (42 U.S.C. 1437a(b)(1)).
(22)

Reduction.—
The term “reduction” means measures designed to reduce or eliminate human exposure to lead-based paint hazards through methods including interim controls and abatement.
(23)

Residential dwelling.—
The term “residential dwelling” means—
(A)
a single-family dwelling, including attached structures such as porches and stoops; or
(B)
a single-family dwelling unit in a structure that contains more than 1 separate residential dwelling unit, and in which each such unit is used or occupied, or intended to be used or occupied, in whole or in part, as the home or residence of 1 or more persons.
(24)

Residential real property.—
The term “residential real property” means real property on which there is situated 1 or more residential dwellings used or occupied, or intended to be used or occupied, in whole or in part, as the home or residence of 1 or more persons.
(25)

Risk assessment.—
The term “risk assessment” means an on-site investigation to determine and report the existence, nature, severity and location of lead-based paint hazards in residential dwellings, including—
(A)
information gathering regarding the age and history of the housing and occupancy by children under age 6;
(B)
visual inspection;
(C)
limited wipe sampling or other environmental sampling techniques;
(D)
other activity as may be appropriate; and
(E)
provision of a report explaining the results of the investigation.
(26)

Secretary.—
The term “Secretary” means the Secretary of Housing and Urban Development.
(27)

Target housing.—
The term “target housing” means any housing constructed prior to 1978, except housing for the elderly or persons with disabilities 26 (unless any child who is less than 6 years of age resides or is expected to reside in such housing). In the case of jurisdictions which banned the sale or use of lead-based paint prior to 1978, the Secretary, at the Secretary's discretion, may designate an earlier date.
^{26}
Section 237(b)(1) of division K of Public Law 115–31 amends section 1004(27) by inserting “or any 0-bedroom dwelling” after “disabilities,”. However “disabilities,” does not appear in law and thus this amendment was not executed.
Subtitle A—

Lead-Based Paint Hazard Reduction
SEC. 1011.
[42 U.S.C. 4852]

GRANTS FOR LEAD-BASED PAINT HAZARD REDUCTION IN TARGET HOUSING.
(a)

General Authority.—
The Secretary is authorized to provide grants to eligible applicants to evaluate and reduce lead-based paint hazards in housing that is not federally assisted housing, federally owned housing, or public housing, in accordance with the provisions of this section. Grants shall only be made under this section to provide assistance for housing which meets the following criteria—
(1)
for grants made to assist rental housing, at least 50 percent of the units must be occupied by or made available to families with incomes at or below 50 percent of the area median income level and the remaining units shall be occupied or made available to families with incomes at or below 80 percent of the area median income level, and in all cases the landlord shall give priority in renting units assisted under this section, for not less than 3 years following the completion of lead abatement activities, to families with a child under the age of six years, except that buildings with five or more units may have 20 percent of the units occupied by families with incomes above 80 percent of area median income level;
(2)
for grants made to assist housing owned by owner-occupants, all units assisted with grants under this section shall be the principal residence of families with income at or below 80 percent of the area median income level, and not less than 90 percent of the units assisted with grants under this section shall be occupied by a child under the age of six years or shall be units where a child under the age of six years spends a significant amount of time visiting; and
(3)
notwithstanding paragraphs (1) and (2), Round II grantees who receive assistance under this section may use such assistance for priority housing.
(b)

Eligible Applicants.—
A State or unit of local government that has an approved comprehensive housing affordability strategy under section 105 of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12705) is eligible to apply for a grant under this section.
(c)

Form of Applications.—
To receive a grant under this section, a State or unit of local government shall submit an application in such form and in such manner as the Secretary shall prescribe. An application shall contain—
(1)
a copy of that portion of an applicant's comprehensive housing affordability strategy required by section 105(b)(16) of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12701 et seq.);
(2)
a description of the amount of assistance the applicant seeks under this section;
(3)
a description of the planned activities to be undertaken with grants under this section, including an estimate of the amount to be allocated to each activity;
(4)
a description of the forms of financial assistance to owners and occupants of housing that will be provided through grants under this section; and
(5)
such assurances as the Secretary may require regarding the applicant's capacity to carry out the activities.
(d)

Selection Criteria.—
The Secretary shall award grants under this section on the basis of the merit of the activities proposed to be carried out and on the basis of selection criteria, which shall include—
(1)
the extent to which the proposed activities will reduce the risk of lead-based paint poisoning to children under the age of 6 who reside in housing;
(2)
the degree of severity and extent of lead-based paint hazards in the jurisdiction to be served;
(3)
the ability of the applicant to leverage State, local, and private funds to supplement the grant under this section;
(4)
the ability of the applicant to carry out the proposed activities; and
(5)
such other factors as the Secretary determines appropriate to ensure that grants made available under this section are used effectively and to promote the purposes of this Act.
(e)

Eligible Activities.—
A grant under this section may be used to—
(1)
perform risk assessments and inspections in housing;
(2)
provide for the interim control of lead-based paint hazards in housing;
(3)
provide for the abatement of lead-based paint hazards in housing;
(4)
provide for the additional cost of reducing lead-based paint hazards in units undergoing renovation funded by other sources;
(5)
ensure that risk assessments, inspections, and abatements are carried out by certified contractors in accordance with section 402 of the Toxic Substances Control Act, as added by section 1021 of this Act;
(6)
monitor the blood-lead levels of workers involved in lead hazard reduction activities funded under this section;
(7)
assist in the temporary relocation of families forced to vacate housing while lead hazard reduction measures are being conducted;
(8)
educate the public on the nature and causes of lead poisoning and measures to reduce exposure to lead, including exposure due to residential lead-based paint hazards;
(9)
test soil, interior surface dust, and the blood-lead levels of children under the age of 6 residing in housing after lead-based paint hazard reduction activity has been conducted, to assure that such activity does not cause excessive exposures to lead; and
(10)
carry out such other activities that the Secretary determines appropriate to promote the purposes of this Act.
(f)

Forms of Assistance.—
The applicant may provide the services described in this section through a variety of programs, including grants, loans, equity investments, revolving loan funds, loan funds, loan guarantees, interest write-downs, and other forms of assistance approved by the Secretary.
(g)

Technical Assistance and Capacity Building.—
(1)

In general.—
The Secretary shall develop the capacity of eligible applicants to carry out the requirements of section 105(b)(16) of the Cranston-Gonzalez National Affordable Housing Act and to carry out activities under this section. In fiscal years 1993 and 1994, the Secretary may make grants of up to $200,000 for the purpose of establishing State training, certification or accreditation programs that meet the requirements of section 402 of the Toxic Substances Control Act, as added by section 1021 of this Act.
(2)

Set-aside.—
Of the total amount approved in appropriation Acts under subsection (o), there shall be set aside to carry out this subsection $3,000,000 for fiscal year 1993 and $3,000,000 for fiscal year 1994.
(h)

Matching Requirement.—
Each recipient of a grant under this section shall make contributions toward the cost of activities that receive assistance under this section in an amount not less than 10 percent of the total grant amount under this section.
(i)

Prohibition of Substitution of Funds.—
Grants under this subtitle may not be used to replace other amounts made available or designated by State or local governments for use for the purposes under this subtitle.
(j)

Limitation on Use.—
An applicant shall ensure that not more than 10 percent of the grant will be used for administrative expenses associated with the activities funded.
(k)

Financial Records.—
An applicant shall maintain and provide the Secretary with financial records sufficient, in the determination of the Secretary, to ensure proper accounting and disbursing of amounts received from a grant under this section.
(l)

Report.—
An applicant under this section shall submit to the Secretary, for any fiscal year in which the applicant expends grant funds under this section, a report that—
(1)
describes the use of the amounts received;
(2)
states the number of risk assessments and the number of inspections conducted in residential dwellings;
(3)
states the number of residential dwellings in which lead-based paint hazards have been reduced through interim controls;
(4)
states the number of residential dwellings in which lead-based paint hazards have been abated; and
(5)
provides any other information that the Secretary determines to be appropriate.
(m)

Notice of Funding Availability.—
The Secretary shall publish a Notice of Funding Availability pursuant to this section not later than 120 days after funds are appropriated for this section.
(n)

Relationship to Other Law.—
Effective 2 years after the date of promulgation of regulations under section 402 of the Toxic Substances Control Act, no grants for lead-based paint hazard evaluation or reduction may be awarded to a State under this section unless such State has an authorized program under section 404 of the Toxic Substances Control Act.
(o)

Environmental Review.—
(1)

In general.—
For purposes of environmental review, decisionmaking, and action pursuant to the National Environmental Policy Act of 1969 and other provisions of law that further the purposes of such Act, a grant under this section shall be treated as assistance under the HOME Investment Partnership Act 27, established under title II of the Cranston-Gonzalez National Affordable Housing Act, and shall be subject to the regulations promulgated by the Secretary to implement section 288 of such Act.
^{27}
Probably intended to refer to the HOME Investment Partnerships Act.
(2)

Applicability.—
This subsection shall apply to—
(A)
grants awarded under this section; and
(B)
grants awarded to States and units of general local government for the abatement of significant lead-based paint and lead dust hazards in low- and moderate-income owner-occupied units and low-income privately owned rental units pursuant to title II of the Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1992 (Public Law 102–139, 105 Stat. 736).
(p)

Authorization of Appropriations.—
For the purposes of carrying out this Act, there are authorized to be appropriated $125,000,000 for fiscal year 1993 and $250,000,000 for fiscal year 1994.
SEC. 1012.

EVALUATION AND REDUCTION OF LEAD-BASED PAINT HAZARDS IN FEDERALLY ASSISTED HOUSING.
(a)

General Requirements.—
Section 302 of the Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4822) is amended—
* * * * * * *
(b)

Measurement Criteria.—
Section 302(b) of the Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4822(b)) is amended * * *.
(c)

Inspection.—
Section 302(c) of the Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4822(c)) is amended—
* * * * * * *
(d)

Public Housing.—
Section 302(d)(1) of the Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4822(d)(1)) is amended—
* * * * * * *
(e)

HOME Investment Partnerships.—
Section 212(a) of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12742(a)) is amended by adding at the end the following new paragraph:
* * * * * * *
(f)

Community Development Block Grants.—
Section 105(a) of the Housing and Community Development Act of 1974 (42 U.S.C. 5305(a)) is amended—
* * * * * * *
(g)

Section 8 Rental Assistance.—
Section 8(c)(2)(B) of the United States Housing Act of 1937 (42 U.S.C. 1437f(c)(2)(B)) is amended * * *.
(h)

HOPE for Public and Indian Housing Homeownership.—
The United States Housing Act of 1937 (42 U.S.C. 1437 et seq.) is amended—
* * * * * * *
(i)

HOPE for Homeownership of Multifamily Units.—
The Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12701 et seq.) is amended—
* * * * * * *
(j)

HOPE for Homeownership of Single Family Homes.—
The Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12701 et seq.) is amended—
* * * * * * *
(k)

FHA Insurance for Single Family Homes.—
(1)

Home improvement loans.—
Section 2(a) of the National Housing Act (12 U.S.C. 1703(a)) is amended in the fifth paragraph—
* * * * * * *
(2)

Rehabilitation loans.—
Section 203(k)(2)(B) of the National Housing Act (12 U.S.C. 1709(k)(2)(B)) is amended * * *.
(l)

FHA Insurance for Multifamily Housing.—
Section 221(d)(4)(iv) of the National Housing Act (12 U.S.C. 1715l(d)(4)(iv)) is amended * * *.
(m)

Rural Housing.—
Section 501(a) of the Housing Act of 1949 (42 U.S.C. 1471) is amended by adding at the end the following:
* * * * * * *
SEC. 1013.

DISPOSITION OF FEDERALLY OWNED HOUSING.
Section 302(a) of the Lead-Based Paint Poisoning Prevention Act (42 U.S.C. 4822(a)) (as amended by section 1012(a)) is amended by striking the fourth sentence and adding at the end the folliwng:
* * * * * * *
SEC. 1014.

COMPREHENSIVE HOUSING AFFORDABILITY STRATEGY.
Section 105 of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12705) is amended—
* * * * * * *
SEC. 1015.
[42 U.S.C. 4852a]

TASK FORCE ON LEAD-BASED PAINT HAZARD REDUCTION AND FINANCING.
(a)

In General.—
The Secretary, in consultation with the Administrator of the Environmental Protection Agency, shall establish a task force to make recommendations on expanding resources and efforts to evaluate and reduce lead-based paint hazards in private housing.
(b)

Membership.—
The task force shall include individuals representing the Department of Housing and Urban Development, the Farmers Home Administration, the Department of Veterans Affairs, the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, the Environmental Protection Agency, employee organizations in the building and construction trades industry, landlords, tenants, primary lending institutions, private mortgage insurers, single-family and multifamily real estate interests, nonprofit housing developers, property liability insurers, public housing agencies, low-income housing advocacy organizations, national, State and local lead-poisoning prevention advocates and experts, and community-based organizations located in areas with substantial rental housing.
(c)

Responsibilities.—
The task force shall make recommendations to the Secretary and the Administrator of the Environmental Protection Agency concerning—
(1)
incorporating the need to finance lead-based paint hazard reduction into underwriting standards;
(2)
developing new loan products and procedures for financing lead-based paint hazard evaluation and reduction activities;
(3)
adjusting appraisal guidelines to address lead safety;
(4)
incorporating risk assessments or inspections for lead-based paint as a routine procedure in the origination of new residential mortgages;
(5)
revising guidelines, regulations, and educational pamphlets issued by the Department of Housing and Urban Development and other Federal agencies relating to lead-based paint poisoning prevention;
(6)
reducing the current uncertainties of liability related to lead-based paint in rental housing by clarifying standards of care for landlords and lenders, and by exploring the “safe harbor” concept;
(7)
increasing the availability of liability insurance for owners of rental housing and certified contractors and establishing alternative systems to compensate victims of lead-based paint poisoning; and
(8)
evaluating the utility and appropriateness of requiring risk assessments or inspections and notification to prospective lessees of rental housing.
(d)

Compensation.—
The members of the task force shall not receive Federal compensation for their participation.
SEC. 1016.
[42 U.S.C. 4852b]

NATIONAL CONSULTATION ON LEAD-BASED PAINT HAZARD REDUCTION.
In carrying out this Act, the Secretary shall consult on an ongoing basis with the Administrator of the Environmental Protection Agency, the Director of the Centers for Disease Control, other Federal agencies concerned with lead poisoning prevention, and the task force established pursuant to section 1015.
SEC. 1017.
[42 U.S.C. 4852c]

GUIDELINES FOR LEAD-BASED PAINT HAZARD EVALUATION AND REDUCTION ACTIVITIES.
Not later than 12 months after the date of enactment of this Act 28, the Secretary, in consultation with the Administrator of the Environmental Protection Agency, the Secretary of Labor, and the Secretary of Health and Human Services (acting through the Director of the Centers for Disease Control), shall issue guidelines for the conduct of federally supported work involving risk assessments, inspections, interim controls, and abatement of lead-based paint hazards. Such guidelines shall be based upon criteria that measure the condition of the housing (and the presence of children under age 6 for the purposes of risk assessments) and shall not be based upon criteria that measure the health of the residents of the housing.
^{28}
The date of enactment was October 28, 1992.
SEC. 1018.
[42 U.S.C. 4852d]

DISCLOSURE OF INFORMATION CONCERNING LEAD UPON TRANSFER OF RESIDENTIAL PROPERTY.
(a)

Lead Disclosure in Purchase and Sale or Lease of Target Housing.—
(1)

Lead-based paint hazards.—
Not later than 2 years after the date of enactment of this Act,28 the Secretary and the Administrator of the Environmental Protection Agency shall promulgate regulations under this section for the disclosure of lead-based paint hazards in target housing which is offered for sale or lease. The regulations shall require that, before the purchaser or lessee is obligated under any contract to purchase or lease the housing, the seller or lessor shall—
(A)
provide the purchaser or lessee with a lead hazard information pamphlet, as prescribed by the Administrator of the Environmental Protection Agency under section 406 of the Toxic Substances Control Act;
(B)
disclose to the purchaser or lessee the presence of any known lead-based paint, or any known lead-based paint hazards, in such housing and provide to the purchaser or lessee any lead hazard evaluation report available to the seller or lessor; and
(C)
permit the purchaser a 10-day period (unless the parties mutually agree upon a different period of time) to conduct a risk assessment or inspection for the presence of lead-based paint hazards.
(2)

Contract for purchase and sale.—
Regulations promulgated under this section shall provide that every contract for the purchase and sale of any interest in target housing shall contain a Lead Warning Statement and a statement signed by the purchaser that the purchaser has—
(A)
read the Lead Warning Statement and understands its contents;
(B)
received a lead hazard information pamphlet; and
(C)
had a 10-day opportunity (unless the parties mutually agreed upon a different period of time) before becoming obligated under the contract to purchase the housing to conduct a risk assessment or inspection for the presence of lead-based paint hazards.
(3)

Contents of lead warning statement.—
The Lead Warning Statement shall contain the following text printed in large type on a separate sheet of paper attached to the contract:
“Every purchaser of any interest in residential real property on which a residential dwelling was built prior to 1978 is notified that such property may present exposure to lead from lead-based paint that may place young children at risk of developing lead poisoning. Lead poisoning in young children may produce permanent neurological damage, including learning disabilities, reduced intelligence quotient, behavioral problems, and impaired memory. Lead poisoning also poses a particular risk to pregnant women. The seller of any interest in residential real property is required to provide the buyer with any information on lead-based paint hazards from risk assessments or inspections in the seller's possession and notify the buyer of any known lead-based paint hazards. A risk assessment or inspection for possible lead-based paint hazards is recommended prior to purchase.”
.
(4)

Compliance assurance.—
Whenever a seller or lessor has entered into a contract with an agent for the purpose of selling or leasing a unit of target housing, the regulations promulgated under this section shall require the agent, on behalf of the seller or lessor, to ensure compliance with the requirements of this section.
(5)

Promulgation.—
A suit may be brought against the Secretary of Housing and Urban Development and the Administrator of the Environmental Protection Agency under section 20 of the Toxic Substances Control Act to compel promulgation of the regulations required under this section and the Federal district court shall have jurisdiction to order such promulgation.
(b)

Penalties for Violations.—
(1)

Monetary penalty.—
Any person who knowingly violates any provision of this section shall be subject to civil money penalties in accordance with the provisions of section 102 of the Department of Housing and Urban Development Reform Act of 1989 (42 U.S.C. 3545).
(2)

Action by secretary.—
The Secretary is authorized to take such lawful action as may be necessary to enjoin any violation of this section.
(3)

Civil liability.—
Any person who knowingly violates the provisions of this section shall be jointly and severally liable to the purchaser or lessee in an amount equal to 3 times the amount of damages incurred by such individual.
(4)

Costs.—
In any civil action brought for damages pursuant to paragraph (3), the appropriate court may award court costs to the party commencing such action, together with reasonable attorney fees and any expert witness fees, if that party prevails.
(5)

Prohibited act.—
It shall be a prohibited act under section 409 of the Toxic Substances Control Act for any person to fail or refuse to comply with a provision of this section or with any rule or order issued under this section. For purposes of enforcing this section under the Toxic Substances Control Act, the penalty for each violation applicable under section 16 of that Act shall not be more than $10,000.
(c)

Validity of Contracts and Liens.—
Nothing in this section shall affect the validity or enforceability of any sale or contract for the purchase and sale or lease of any interest in residential real property or any loan, loan agreement, mortgage, or lien made or arising in connection with a mortgage loan, nor shall anything in this section create a defect in title.
(d)

Effective Date.—
The regulations under this section shall take effect 3 years after the date of the enactment of this title.28
Subtitle B—

Lead Exposure Reduction
SEC. 1021.

CONTRACTOR TRAINING AND CERTIFICATION.
(a)

Amendment to the Toxic Substances Control Act.—
The Toxic Substances Control Act (15 U.S.C. 2601 et seq.) is amended by adding after title III the following new title:

“TITLE IV—

LEAD EXPOSURE REDUCTION”
* * * * * * *
Subtitle C—

Worker Protection
SEC. 1031.
[42 U.S.C. 4853]

WORKER PROTECTION.
Not later than 180 days after the enactment of this Act,29 the Secretary of Labor shall issue an interim final regulation regulating occupational exposure to lead in the construction industry. Such interim final regulation shall provide employment and places of employment to employees which are as safe and healthful as those which would prevail under the Department of Housing and Urban Development guidelines published at Federal Register 55, page 38973 (September 28, 1990) (Revised Chapter 8). Such interim final regulations shall take effect upon issuance (except that such regulations may include a reasonable delay in the effective date), shall have the legal effect of an Occupational Safety and Health Standard, and shall apply until a final standard becomes effective under section 6 of the Occupational Safety and Health Act of 1970.
^{29}
The date of enactment was October 28, 1992.
SEC. 1032.
[42 U.S.C. 4853a]

COORDINATION BETWEEN ENVIRONMENTAL PROTECTION AGENCY AND DEPARTMENT OF LABOR.
The Secretary of Labor, in promulgating regulations under section 1031, shall consult and coordinate with the Administrator of the Environmental Protection Agency for the purpose of achieving the maximum enforcement of title IV of the Toxic Substances Control Act and the Occupational Safety and Health Act of 1970 while imposing the least burdens of duplicative requirements on those subject to such title and Act and for other purposes.
SEC. 1033.

NIOSH RESPONSIBILITIES.
Section 22 of the Occupational Safety and Health Act of 1970 is amended by adding the following new subsection at the end thereof:
* * * * * * *
Subtitle D—

Research and Development
PART 1—

HUD RESEARCH
SEC. 1051.
[42 U.S.C. 4854]

RESEARCH ON LEAD EXPOSURE FROM OTHER SOURCES.
The Secretary, in cooperation with other Federal agencies, shall conduct research on strategies to reduce the risk of lead exposure from other sources, including exterior soil and interior lead dust in carpets, furniture, and forced air ducts.
SEC. 1052.
[42 U.S.C. 4854a]

TESTING TECHNOLOGIES.
The Secretary, in cooperation with other Federal agencies, shall conduct research to—
(1)
develop improved methods for evaluating lead-based paint hazards in housing;
(2)
develop improved methods for reducing lead-based paint hazards in housing;
(3)
develop improved methods for measuring lead in paint films, dust, and soil samples;
(4)
establish performance standards for various detection methods, including spot test kits;
(5)
establish performance standards for lead-based paint hazard reduction methods, including the use of encapsulants;
(6)
establish appropriate cleanup standards;
(7)
evaluate the efficacy of interim controls in various hazard situations;
(8)
evaluate the relative performance of various abatement techniques;
(9)
evaluate the long-term cost-effectiveness of interim control and abatement strategies; and
(10)
assess the effectiveness of hazard evaluation and reduction activities funded by this Act.
SEC. 1053.
[42 U.S.C. 4854b]

AUTHORIZATION.
Of the total amount approved in appropriation Acts under section 1011(o)30, there shall be set aside to carry out this part $5,000,000 for fiscal year 1993, and $5,000,000 for fiscal year 1994.
^{30}
Probably intended to refer to section 1011(p).
PART 2—

GAO REPORT
SEC. 1056.
[42 U.S.C. 4855]

FEDERAL IMPLEMENTATION AND INSURANCE STUDY.
(a)

Federal Implementation Study.—
The Comptroller General of the United States shall assess the effectiveness of Federal enforcement and compliance with lead safety laws and regulations, including any changes needed in annual inspection procedures to identify lead-based paint hazards in units receiving assistance under subsections (b) and (o) of section 8 of the United States Housing Act of 1937.
(b)

Insurance Study.—
The Comptroller General of the United States shall assess the availability of liability insurance for owners of residential housing that contains lead-based paint and persons engaged in lead-based paint hazard evaluation and reduction activities. In carrying out the assessment, the Comptroller General shall—
(1)
analyze any precedents in the insurance industry for the containment and abatement of environmental hazards, such as asbestos, in federally assisted housing;
(2)
provide an assessment of the recent insurance experience in the public housing lead hazard identification and reduction program; and
(3)
recommend measures for increasing the availability of liability insurance to owners and contractors engaged in federally supported work.
Subtitle E—

Reports
SEC. 1061.
[42 U.S.C. 4856]

REPORTS OF THE SECRETARY OF HOUSING AND URBAN DEVELOPMENT.31
^{31}
Section 3003(a)(1) of the Federal Reports Elimination and Sunset Act of 1995, Pub. L. 104–66, which is set forth post in part XII of this compilation, provides that certain provisions of law requiring submittal to Congress of an annual, semiannual, or other regular periodic report shall cease to be effective on May 15, 2000. This section is covered by such provision. However, section 1102 of the American Homeownership and Economic Opportunity Act of 2000, Public Law 106–569, set forth post in part XII of this compilation, provides that such section 3003(a)(1) shall not apply to the report required to be submitted under this section.
(a)

Annual Report.—
The Secretary shall transmit to the Congress an annual report that—
(1)
sets forth the Secretary's assessment of the progress made in implementing the various programs authorized by this title;
(2)
summarizes the most current health and environmental studies on childhood lead poisoning, including studies that analyze the relationship between interim control and abatement activities and the incidence of lead poisoning in resident children;
(3)
recommends legislative and administrative initiatives that may improve the performance by the Department of Housing and Urban Development in combating lead hazards through the expansion of lead hazard evaluation and reduction activities;
(4)
describes the results of research carried out in accordance with subtitle D; and
(5)
estimates the amount of Federal assistance annually expended on lead hazard evaluation and reduction activities.
(b)

Biennial Report.—
(1)

In general.—
24 months after the date of enactment of this Act,32 and at the end of every 24-month period thereafter, the Secretary shall report to the Congress on the progress of the Department of Housing and Urban Development in implementing expanded lead-based paint hazard evaluation and reduction activities.
^{32}
The date of enactment was October 28, 1992.
(2)

Contents.—
The report shall—
(A)
assess the effectiveness of section 1018 in making the public aware of lead-based paint hazards;
(B)
estimate the extent to which lead-based paint hazard evaluation and reduction activities are being conducted in the various categories of housing;
(C)
monitor and report expenditures for lead-based paint hazard evaluation and reduction for programs within the jurisdiction of the Department of Housing and Urban Development;
(D)
identify the infrastructure needed to eliminate lead-based paint hazards in all housing as expeditiously as possible, including cost-effective technology, standards and regulations, trained and certified contractors, certified laboratories, liability insurance, private financing techniques, and appropriate Government subsidies;
(E)
assess the extent to which the infrastructure described in subparagraph (D) exists, make recommendations to correct shortcomings, and provide estimates of the costs of measures needed to build an adequate infrastructure; and
(F)
include any additional information that the Secretary deems appropriate.
* * * * * * *
TITLE XII—

REMOVAL OF REGULATORY BARRIERS TO AFFORDABLE HOUSING
SEC. 1201.
[42 U.S.C. 12705a note]

SHORT TITLE.
This title may be cited as the “Removal of Regulatory Barriers to Affordable Housing Act of 1992”.
SEC. 1202.
[42 U.S.C. 12705a]

PURPOSES.
The purposes of this title are—
(1)
to encourage State and local governments to further identify and remove regulatory barriers to affordable housing (including barriers that are excessive, unnecessary, duplicative, or exclusionary) that significantly increase housing costs and limit the supply of affordable housing; and
(2)
to strengthen the connection between Federal housing assistance and State and local efforts to identify and eliminate regulatory barriers.
SEC. 1203.
[42 U.S.C. 12705b]

DEFINITION OF REGULATORY BARRIERS TO AFFORDABLE HOUSING.
For purposes of this title, the terms “regulatory barriers to affordable housing” and “regulatory barriers” mean any public policies (including policies embodied in statutes, ordinances, regulations, or administrative procedures or processes) required to be identified by a jurisdiction in connection with its comprehensive housing affordability strategy under section 105(b)(4) of the Cranston-Gonzalez National Affordable Housing Act. Such terms do not include policies relating to rents imposed on a structure by a jurisdiction or policies that have served to create or preserve, or can be shown to create or preserve, housing for low- and very low-income families, including displacement protections, demolition controls, replacement housing requirements, relocation benefits, housing trust funds, dedicated funding sources, waiver of local property taxes and builder fees, inclusionary zoning, rental zoning overlays, long-term use restrictions, and rights of first refusal.
SEC. 1204.
[42 U.S.C. 12705c]

GRANTS FOR REGULATORY BARRIER REMOVAL STRATEGIES AND IMPLEMENTATION.
(a)

Funding.—
There is authorized to be appropriated for grants under subsections (b) and (c) such sums as may be necessary for each of fiscal years 2001, 2002, 2003, 2004, and 2005.
(b)

Grant Authority.—
The Secretary may make grants to States and units of general local government (including consortia of such governments) for the costs of developing and implementing strategies to remove regulatory barriers to affordable housing, including the costs of—
(1)
identifying, assessing, and monitoring State and local regulatory barriers;
(2)
identifying State and local policies (including laws and regulations) that permit or encourage regulatory barriers;
(3)
developing legislation to provide State, local, or regional programs to reduce regulatory barriers and developing a strategy for adoption of such legislation;
(4)
developing model State or local standards and ordinances to reduce regulatory barriers and assisting in the adoption and use of the standards and ordinances;
(5)
carrying out the simplification and consolidation of administrative procedures and processes constituting regulatory barriers to affordable housing, including the issuance of permits; and
(6)
providing technical assistance and information to units of general local government for implementation of legislative and administrative reform programs to remove regulatory barriers to affordable housing.
[(c)
[Repealed.] ]
(d)

Definition.—
For purposes of this section, the terms “regulatory barriers to affordable housing” and “regulatory barriers” have the meaning given such terms in section 1203.
(e)

Application and Selection.—
The Secretary shall provide for the form and manner of applications for grants under this section, which shall describe how grant amounts will assist the State or unit of general local government in developing and implementing strategies to remove regulatory barriers to affordable housing. The Secretary shall establish criteria for approval of applications under this subsection and such criteria shall require that grant amounts be used in a manner consistent with the strategy contained in the comprehensive housing affordability strategy for the jurisdiction pursuant to section 105(b)(4) of the Cranston-Gonzalez National Affordable Housing Act.
(f)

Selection of Grantees.—
To the extent amounts are made available to carry out this section, the Secretary shall provide grants on a competitive basis to eligible grantees based on the proposed uses of such amounts, as provided in applications under subsection (e).
(g)

Coordination With Clearinghouse.—
Each State and unit of general local government receiving a grant under this section, shall consult, coordinate, and exchange information with the clearinghouse established under section 1205.
(h)

Reports to Secretary.—
Each State and unit of general local government receiving a grant under this section shall submit a report to the Secretary, not less than 12 months after receiving the grant, describing any activities carried out with the grant amounts. The report shall contain an assessment of the impact of any regulatory barriers identified by the grantee on the housing patterns of minorities.
(i)

Conforming Amendments.—
The first sentence of section 106(d)(1) of the Housing and Community Development Act of 1974 (42 U.S.C. 5306(d)(1)) is amended by striking “for grants” and all that follows through “(2))” and inserting “that remains after allocations pursuant to paragraphs (1) and (2) of subsection (a)”.
SEC. 1205.
[42 U.S.C. 12705d]

REGULATORY BARRIERS CLEARINGHOUSE.
(a)

Establishment.—
The Secretary of Housing and Urban Development shall establish a clearinghouse to serve as a national repository to receive, collect, process, assemble, and disseminate information regarding—
(1)
State and local laws, regulations, and policies affecting the development, maintenance, improvement, availability, or cost of affordable housing (including tax policies affecting land and other property, land use controls, zoning ordinances, building codes, fees and charges, growth limits, and policies that affect the return on investment in residential property), and the prevalence and effects on affordable housing of such laws, regulations, and policies;
(2)
State and local activities, strategies, and plans to remove or ameliorate the negative effects, if any, of such laws, regulations, and policies, including particularly innovative or successful activities, strategies, and plans; and
(3)
State and local strategies, activities and plans that promote affordable housing and housing desegregation, including particularly innovative or successful strategies, activities, and plans.
(b)

Functions.—
The clearinghouse established under subsection (a) shall—
(1)
respond to inquiries from State and local governments, other organizations, and individuals requesting information regarding State and local laws, regulations, policies, activities, strategies, and plans described in subsection (a);
(2)
provide assistance in identifying, examining, and understanding such laws, regulations, policies, activities, strategies, and plans; and
(3)
by making available through a World Wide Web site of the Department, by electronic mail, or otherwise, provide to each housing agency of a unit of general local government that serves an area having a population greater than 100,000, an index of all State and local strategies and plans submitted under subsection (a) to the clearinghouse, which—
(A)
shall describe the types of barriers to affordable housing that the strategy or plan was designed to ameliorate or remove; and
(B)
shall, not later than 30 days after submission to the clearinghouse of any new strategy or plan, be updated to include the new strategy or plan submitted.
(c)

Organization.—
The clearinghouse under this section shall be established within the Office of Policy Development of the Department of Housing and Urban Development and shall be under the direction of the Assistant Secretary for Policy Development and Research.
(d)

Timing.—
The clearinghouse under this section (as amended by section 103 of the Housing Affordability Barrier Removal Act of 2000) shall be established and commence carrying out the functions of the clearinghouse under this section not later than 1 year after the date of the enactment of such Act.33 The Secretary of Housing and Urban Development may comply with the requirements under this section by reestablishing the clearinghouse that was originally established to comply with this section and updating and improving such clearinghouse to the extent necessary to comply with the requirements of this section as in effect pursuant to the enactment of such Act.
^{33}
The date of enactment was December 27, 2000.
SEC. 1206.

SUBSTANTIALLY EQUIVALENT FEDERAL AND STATE BARRIER ASSESSMENT REMOVAL REQUIREMENTS.
Section 105(b)(4) of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12705(b)(4)) is amended * * *.
TITLE XIII—

GOVERNMENT SPONSORED ENTERPRISES
SEC. 1301.
[12 U.S.C. 4501 note]

SHORT TITLE.
This title may be cited as the “Federal Housing Enterprises Financial Safety and Soundness Act of 1992”.
SEC. 1302.
[12 U.S.C. 4501]

CONGRESSIONAL FINDINGS.
The Congress finds that—
(1)
the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation (referred to in this section collectively as the “enterprises”), and the Federal Home Loan Banks (referred to in this section as the “Banks”), have important public missions that are reflected in the statutes and charter Acts establishing the Banks and the enterprises;
(2)
because the continued ability of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation to accomplish their public missions is important to providing housing in the United States and the health of the Nation's economy, more effective Federal regulation is needed to reduce the risk of failure of the enterprises;
(3)
considering the current operating procedures of the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, and the Federal Home Loan Banks, the enterprises and the Banks currently pose low financial risk of insolvency;
(4)
neither the enterprises nor the Banks, nor any securities or obligations issued by the enterprises or the Banks, are backed by the full faith and credit of the United States;
(5)
an entity regulating the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation should have sufficient autonomy from the enterprises and special interest groups;
(6)
an entity regulating such enterprises should have the authority to establish capital standards, require financial disclosure, prescribe adequate standards for books and records and other internal controls, conduct examinations when necessary, and enforce compliance with the standards and rules that it establishes;
(7)
the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation have an affirmative obligation to facilitate the financing of affordable housing for low- and moderate-income families in a manner consistent with their overall public purposes, while maintaining a strong financial condition and a reasonable economic return; and
(8)
the Federal Home Loan Bank Act should be amended to emphasize that providing for financial safety and soundness of the Federal Home Loan Banks is the primary mission of the Federal Housing Finance Board.
SEC. 1303.
[12 U.S.C. 4502]

DEFINITIONS.
For purposes of this title:
(1)

Affiliate.—
Except as provided by the Director, the term “affiliate” means any entity that controls, is controlled by, or is under common control with, an enterprise.
(2)

Agency.—
The term “Agency” means the Federal Housing Finance Agency established under section 1311.
(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 Finance Oversight Board established under section 1313A.
(5)

Capital distribution.—
(A)

In general.—
The term “capital distribution” means—
(i)
any dividend or other distribution in cash or in kind made with respect to any shares of, or other ownership interest in, an enterprise, except a dividend consisting only of shares of the enterprise;
(ii)
any payment made by an enterprise to repurchase, redeem, retire, or otherwise acquire any of its shares, including any extension of credit made to finance an acquisition by the enterprise of such shares; and
(iii)
any transaction that the Director determines by regulation to be, in substance, the distribution of capital.
(B)

Exception.—
Any payment made by an enterprise to repurchase its shares for the purpose of fulfilling an obligation of the enterprise under an employee stock ownership plan that is qualified under section 401 of the Internal Revenue Code of 1986 or any substantially equivalent plan, as determined by the Director, shall not be considered a capital distribution.
(6)

Compensation.—
The term “compensation” means any payment of money or the provision of any other thing of current or potential value in connection with employment.
(7)

Core capital.—
The term “core capital” means, with respect to an enterprise, the sum of the following (as determined in accordance with generally accepted accounting principles):
(A)
The par or stated value of outstanding common stock.
(B)
The par or stated value of outstanding perpetual, noncumulative preferred stock.
(C)
Paid-in capital.
(D)
Retained earnings.
The core capital of an enterprise shall not include any amounts that the enterprise could be required to pay, at the option of investors, to retire capital instruments.
(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, 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—
(I)
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.
(9)

Director.—
The term “Director” means the Director of the Federal Housing Finance Agency.
(10)

Enterprise.—
The term “enterprise” means—
(A)
the Federal National Mortgage Association and any affiliate thereof; and
(B)
the Federal Home Loan Mortgage Corporation and any affiliate thereof.
(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;
(D)
any not-for-profit corporation that receives its principal funding, on an ongoing basis, from any regulated entity; and
(E)
the Office of Finance.
(12)

Executive officer.—
The term “executive officer” means, with respect to an enterprise, the chairman of the board of directors, chief executive officer, chief financial officer, president, vice chairman, any executive vice president, and any senior vice president in charge of a principal business unit, division, or function.
(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.
(14)

Low-income.—
The term “low-income” means—
(A)
in the case of owner-occupied units, income not in excess of 80 percent of area median income; and
(B)
in the case of rental units, income not in excess of 80 percent of area median income, with adjustments for smaller and larger families, as determined by the Director.
(15)

Median income.—
The term “median income” means, with respect to an area, the unadjusted median family income for the area, as determined and published annually by the Director.
(16)

Moderate-income.—
The term “moderate-income” means—
(A)
in the case of owner-occupied units, income not in excess of area median income; and
(B)
in the case of rental units, income not in excess of area median income, with adjustments for smaller and larger families, as determined by the Director.
(17)

Mortgage purchases.—
The term “mortgage purchases” includes mortgages purchased for portfolio or securitization.
(18)

Multifamily housing.—
The term “multifamily housing” means a residence consisting of more than 4 dwelling units.
(19)

Office of finance.—
The term “Office of Finance” means the Office of Finance of the Federal Home Loan Bank System (or any successor thereto).
(20)

Regulated entity.—
The term “regulated entity” means—
(A)
the Federal National Mortgage Association and any affiliate thereof;
(B)
the Federal Home Loan Mortgage Corporation and any affiliate thereof; and
(C)
any Federal Home Loan Bank.
(21)

Single family housing.—
The term “single family housing” means a residence consisting of 1 to 4 dwelling units.
(22)

State.—
The term “State” means the States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, Guam, the Virgin Islands, American Samoa, the Trust Territory of the Pacific Islands, and any other territory or possession of the United States.
(23)

Total capital.—
The term “total capital” means, with respect to an enterprise, the sum of the following:
(A)
The core capital of the enterprise;
(B)
A general allowance for foreclosure losses, which—
(i)
shall include an allowance for portfolio mortgage losses, an allowance for nonreimbursable foreclosure costs on government claims, and an allowance for liabilities reflected on the balance sheet for the enterprise for estimated foreclosure losses on mortgage-backed securities; and
(ii)
shall not include any reserves of the enterprise made or held against specific assets.
(C)
Any other amounts from sources of funds available to absorb losses incurred by the enterprise, that the Director by regulation determines are appropriate to include in determining total capital.
(24)

Very low-income.—
(A)

In general.—
The term “very low-income” means—
(i)
in the case of owner-occupied units, families having incomes not greater than 50 percent of the area median income; and
(ii)
in the case of rental units, families having incomes not greater than 50 percent of the area median income, with adjustments for smaller and larger families, as determined by the Director.
(B)

Rule of construction.—
For purposes of section 34 1338 and 1339, the term “very low-income” means—
^{34}
So in law.
(i)
in the case of owner-occupied units, income in excess of 30 percent but not greater than 50 percent of the area median income; and
(ii)
in the case of rental units, income in excess of 30 percent but not greater than 50 percent of the area median income, with adjustments for smaller and larger families, as determined by the Director.
(25)

Violation.—
The term “violation” includes any action (alone or in combination with another or others) for or toward causing, bringing about, participating in, counseling, or aiding or abetting a violation.
(26)

Conforming mortgage.—
The term “conforming mortgage” means, with respect to an enterprise, a conventional mortgage having an original principal obligation that does not exceed the dollar amount limitation in effect at the time of such origination and applicable to such mortgage, under, as applicable—
(A)
section 302(b)(2) of the Federal National Mortgage Association Charter Act; or
(B)
section 305(a)(2) of the Federal Home Loan Mortgage Corporation Act.
(27)

Extremely low-income.—
The term “extremely low-income” means—
(A)
in the case of owner-occupied units, income not in excess of 30 percent of the area median income; and
(B)
in the case of rental units, income not in excess of 30 percent of the area median income, with adjustments for smaller and larger families, as determined by the Director.
(28)

Low-income area.—
The term “low-income area” means a census tract or block numbering area in which the median income does not exceed 80 percent of the median income for the area in which such census tract or block numbering area is located, and, for the purposes of section 1332(a)(1)(B), shall include families having incomes not greater than 100 percent of the area median income who reside in minority census tracts and shall include families having incomes not greater than 100 percent of the area median income who reside in designated disaster areas.
(29)

Minority census tract.—
The term “minority census tract” means a census tract that has a minority population of at least 30 percent and a median family income of less than 100 percent of the area family median income.
(30)

Shortage of standard rental units both affordable and available to extremely low-income renter households.—
(A)

In general.—
The term “shortage of standard rental units both affordable and available to extremely low-income renter households” means the gap between—
(i)
the number of units with complete plumbing and kitchen facilities with a rent that is 30 percent or less of 30 percent of the adjusted area median income as determined by the Director that are occupied by extremely low-income renter households or are vacant for rent; and
(ii)
the number of extremely low-income renter households.
(B)

Rule of construction.—
If the number of units described in subparagraph (A)(i) exceeds the number of extremely low-income households as described in subparagraph (A)(ii), there is no shortage.
(31)

Shortage of standard rental units both affordable and available to very low-income renter households.—
(A)

In general.—
The term “shortage of standard rental units both affordable and available to very low-income renter households” means the gap between—
(i)
the number of units with complete plumbing and kitchen facilities with a rent that is 30 percent or less of 50 percent of the adjusted area median income as determined by the Director that are occupied by either extremely low- or very low-income renter households or are vacant for rent; and
(ii)
the number of extremely low- and very low-income renter households.
(B)

Rule of construction.—
If the number of units described in subparagraph (A)(i) exceeds the number of extremely low- and very low-income households as described in subparagraph (A)(ii), there is no shortage.
SEC. 1304.
[12 U.S.C. 4503]

PROTECTION OF TAXPAYERS AGAINST LIABILITY.
This title and the amendments made by this title may not be construed as obligating the Federal Government, either directly or indirectly, to provide any funds to the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, or the Federal Home Loan Banks, or to honor, reimburse, or otherwise guarantee any obligation or liability of the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, or the Federal Home Loan Banks. This title and the amendments made by this title may not be construed as implying that any such enterprise or Bank, or any obligations or securities of such an enterprise or Bank, are backed by the full faith and credit of the United States.
Subtitle A—

Supervision and Regulation of Enterprises
PART 1—

FINANCIAL SAFETY AND SOUNDNESS REGULATOR
SEC. 1311.
[12 U.S.C. 4511]

ESTABLISHMENT OF THE FEDERAL HOUSING FINANCE AGENCY.
(a)

Establishment.—
There is established the Federal Housing Finance Agency, which shall be an independent agency of the Federal Government.
(b)

General Supervisory and Regulatory Authority.—
(1)

In general.—
Each regulated entity shall, to the extent provided in this title, be subject to the supervision and regulation of the Agency.
(2)

Authority over fannie mae, freddie mac, the federal home loan banks, and the office of finance.—
The Director shall have general regulatory authority over each regulated entity and the Office of Finance, 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.
[12 U.S.C. 4512]

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 5 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 Finance Regulatory Reform Act of 2008, 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 enterprises, and with respect to oversight of the housing finance and community and economic development mission of the Federal Home Loan Banks, as the Director shall prescribe.
(3)

Considerations.—
In exercising such functions, powers, and duties, the Deputy Director for Housing Mission and Goals shall consider the differences between the enterprises and the Federal Home Loan Banks, including those described in section 1313(d).
(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 or designation of such individual as Director or Deputy Director, as applicable.
SEC. 1313.
[12 U.S.C. 4513]

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; and
(v)
the activities of each regulated entity and the manner in which such regulated entity is operated are consistent with the public interest.
(2)

Scope of authority.—
The authority of the Director shall include the authority—
(A)
to review and, if warranted based on the principal duties described in paragraph (1), reject any acquisition or transfer of a controlling interest in 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.
(3)

Coordination with the chairman of the board of governors of the federal reserve system.—
(A)

Consultation.—
The Director shall consult with, and consider the views of, the Chairman of the Board of Governors of the Federal Reserve System, with respect to the risks posed by the regulated entities to the financial system, prior to issuing any proposed or final regulations, orders, and guidelines with respect to the exercise of the additional authority provided in this Act regarding prudential management and operations standards, safe and sound operations of, and capital requirements and portfolio standards applicable to the regulated entities (as such term is defined in section 1303). The Director also shall consult with the Chairman regarding any decision to place a regulated entity into conservatorship or receivership.
(B)

Information sharing.—
To facilitate the consultative process, the Director shall share information with the Board of Governors of the Federal Reserve System on a regular, periodic basis as determined by the Director and the Board regarding the capital, asset and liabilities, financial condition, and risk management practices of the regulated entities as well as any information related to financial market stability.
(C)

Termination of consultation requirement.—
The requirement of the Director to consult with the Board of Governors of the Federal Reserve System under this paragraph shall expire at the conclusion of December 31, 2009.
(b)

Delegation of Authority.—
The Director may delegate to officers and employees of the Agency any of the functions, powers, or duties of the Director, as the Director considers appropriate.
(c)

Litigation Authority.—
(1)

In general.—
In enforcing any provision of this title, any regulation or order prescribed under this title, or any other provision of law, rule, regulation, or order, or in any other action, suit, or proceeding to which the Director is a party or in which the Director is interested, and in the administration of conservatorships and receiverships, the Director may act in the Director's own name and through the Director's own attorneys.
(2)

Subject to suit.—
Except as otherwise provided by law, the Director shall be subject to suit (other than suits on claims for money damages) by a regulated entity with respect to any matter under this title or any other applicable provision of law, rule, order, or regulation under this title, in the United States district court for the judicial district in which the regulated entity has its principal place of business, or in the United States District Court for the District of Columbia, and the Director may be served with process in the manner prescribed by the Federal Rules of Civil Procedure.
(f)35

Recognition of Distinctions Between the Enterprises and the Federal Home Loan Banks.—
Prior to promulgating any regulation or taking any other formal or informal agency action of general applicability and future effect relating to the Federal Home Loan Banks (other than any regulation, advisory document, or examination guidance of the Federal Housing Finance Board that the Director reissues after the authority of the Director over the Federal Home Loan Banks takes effect), including the issuance of an advisory document or examination guidance, the Director shall consider the differences between the Federal Home Loan Banks and the enterprises with respect to—
^{35}
So in law. There are no subsections (d) or (e). See amendments made by sections 1102(a) and 1201 of Public Law 110–289.
(1)
the Banks'—
(A)
cooperative ownership structure;
(B)
the mission of providing liquidity to members;
(C)
affordable housing and community development mission;
(D)
capital structure; and
(E)
joint and several liability; and
(2)
any other differences that the Director considers appropriate.
SEC. 1313A.
[12 U.S.C. 4513a]

FEDERAL HOUSING FINANCE OVERSIGHT BOARD.
(a)

In General.—
There is established the Federal Housing Finance Oversight 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.
SEC. 1313B.
[12 U.S.C. 4513b]

PRUDENTIAL MANAGEMENT AND OPERATIONS STANDARDS.
(a)

Standards.—
The Director shall establish standards, by regulation 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;
(9)
management of credit and counterparty risk, including systems to identify concentrations of credit risk and prudential limits to restrict exposure of the regulated entity to a single counterparty or groups of related counterparties;
(10)
maintenance of adequate records, in accordance with consistent accounting policies and practices that enable the Director to evaluate the financial condition of the regulated entity; and
(11)
such other operational and management standards as the Director determines to be appropriate.
(b)

Failure To Meet Standards.—
(1)

Plan requirement.—
(A)

In general.—
If the Director determines that a regulated entity fails to meet any standard established under subsection (a)—
(i)
if such standard is established by regulation, the Director shall require the regulated entity to submit an acceptable plan to the Director within the time allowed under subparagraph (C); and
(ii)
if such standard is established by guideline, the Director may require the regulated entity to submit a plan described in clause (i).
(B)

Contents.—
Any plan required under subparagraph (A) shall specify the actions that the regulated entity will take to correct the deficiency. If the regulated entity is undercapitalized, the plan may be a part of the capital restoration plan for the regulated entity under section 1369C.
(C)

Deadlines for submission and review.—
The Director shall by regulation establish deadlines that—
(i)
provide the regulated entities with reasonable time to submit plans required under subparagraph (A), and generally require a regulated entity to submit a plan not later than 30 days after the Director determines that the entity fails to meet any standard established under subsection (a); and
(ii)
require the Director to act on plans expeditiously, and generally not later than 30 days after the plan is submitted.
(2)

Required order upon failure to submit or implement plan.—
If a regulated entity fails to submit an acceptable plan within the time allowed under paragraph (1)(C), or fails in any material respect to implement a plan accepted by the Director, the following shall apply:
(A)

Required correction of deficiency.—
The Director shall, by order, require the regulated entity to correct the deficiency.
(B)

Other authority.—
The Director may, by order, take one or more of the following actions until the deficiency is corrected:
(i)
Prohibit the regulated entity from permitting its average total assets (as such term is defined in section 1316(b)) during any calendar quarter to exceed its average total assets during the preceding calendar quarter, or restrict the rate at which the average total assets of the entity may increase from one calendar quarter to another.
(ii)
Require the regulated entity—
(I)
in the case of an enterprise, to increase its ratio of core capital to assets.
(II)
in the case of a Federal Home Loan Bank, to increase its ratio of total capital (as such term is defined in section 6(a)(5) of the Federal Home Loan Bank Act (12 U.S.C. 1426(a)(5)) to assets.
(iii)
Require the regulated entity to take any other action that the Director determines will better carry out the purposes of this section than any of the actions described in this subparagraph.
(3)

Mandatory restrictions.—
In complying with paragraph (2), the Director shall take one or more of the actions described in clauses (i) through (iii) of paragraph (2)(B) if—
(A)
the Director determines that the regulated entity fails to meet any standard prescribed under subsection (a);
(B)
the regulated entity has not corrected the deficiency; and
(C)
during the 18-month period before the date on which the regulated entity first failed to meet the standard, the entity underwent extraordinary growth, as defined by the Director.
(c)

Other Enforcement Authority Not Affected.—
The authority of the Director under this section is in addition to any other authority of the Director.
SEC. 1314.
[12 U.S.C. 4514]

AUTHORITY TO REQUIRE REPORTS BY REGULATED ENTITIES.36
^{36}
Section 1104(a)(3) of Public Law 110–289 (122 Stat. 2666) amends section 1314 by striking “the enterprise” and inserting “the regulated entity”. The amendment was carried out each place such term appeared in order to reflect the probable intent of Congress.
(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 (in addition to the annual and quarterly reports required under section 309(k) of the Federal National Mortgage Association Charter Act and section 307(c) of the Federal Home Loan Mortgage Corporation Act).
(2)

Special reports.—
The Director may also require, by general or specific orders, a regulated entity to submit special reports on any of the topics specified in paragraph (1) or any other relevant topics, if, in the judgment of the Director, such reports are necessary to carry out the purposes of this title.
(3)

Limitation.—
The Director may not require the inclusion, in any report pursuant to paragraph (1) or (2), of any information that is not reasonably obtainable by the regulated entity.
(4)

Notice and declaration.—
The Director shall notify the regulated entity, a reasonable period in advance of the date for submission of any report under this subsection, of any specific information to be contained in the report and the date for the submission of the report. Each report under this subsection shall contain a declaration by the president, vice president, treasurer, or any other officer designated by the board of directors of the regulated entity to make such declaration, that the report is true and correct to the best of such officer's knowledge and belief.
(b)

Capital Distributions.—
The Director may require a regulated entity to submit a report to the Director after the declaration of any capital distribution by the regulated entity and before making the capital distribution. The report shall be made in such form and under such circumstances and shall contain such information as the Director shall require.
(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, transmit, or publish any report or obtain any information required by the Director under this section, section 309(k) of the Federal National Mortgage Association Charter Act, section 307(c) of the Federal Home Loan Mortgage Corporation Act, or section 20 of the Federal Home Loan Bank 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)

First tier.—
(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)

Second tier.—
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)

Third tier.—
A violation described in paragraph (1) shall be subject to a penalty of not more than $1,000,000 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.
SEC. 1315.
[12 U.S.C. 4515]

PERSONNEL.
(a)

In General.—
Subject to title III of the Federal Housing Finance Regulatory Reform Act of 2008, the Director may appoint and fix the compensation of such officers and employees of the Agency as the Director considers necessary to carry out the functions of the Director and the Agency. Officers and employees may be paid without regard to the provisions of chapter 51 and subchapter III of chapter 53 of title 5, United States Code, relating to classification and General Schedule pay rates.
(b)

Comparability of Compensation With Federal Banking Agencies.—
In fixing and directing compensation under subsection (a), the Director shall consult with, and maintain comparability with compensation of officers and employees of the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation.
(c)

Personnel of Other Federal Agencies.—
In carrying out the duties of the Agency, the Director may use information, services, staff, and facilities of any executive agency, independent agency, or department on a reimbursable basis, with the consent of such agency or department.
(d)

Outside Experts and Consultants.—
Notwithstanding any provision of law limiting pay or compensation, the Director may appoint and compensate such outside experts and consultants as the Director determines necessary to assist the work of the Agency.
SEC. 1316.
[12 U.S.C. 4516]

FUNDING.
(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 (including administrative costs) and expenses of the Agency, including—
(1)
the expenses of any examinations under section 1317 of this Act and under section 20 of the Federal Home Loan Bank Act;
(2)
the expenses of obtaining any reviews and credit assessments under section 1319;
(3)
such amounts in excess of actual expenses for any given year as deemed necessary by the Director to maintain a working capital fund in accordance with subsection (e); and
(4)
the windup of the affairs of the Office of Federal Housing Enterprise Oversight and the Federal Housing Finance Board under title III of the Federal Housing Finance Regulatory Reform Act of 2008.
(b)

Allocation of Annual Assessment to Enterprises.—
(1)

Amount of payment.—
Each enterprise shall pay to the Director a proportion of the annual assessment made pursuant to subsection (a) that bears the same ratio to the total annual assessment that the total assets of each enterprise bears to the total assets of both enterprises.
(2)

Separate treatment of federal home loan bank and enterprise assessments.—
Assessments collected from the enterprises shall not exceed the amounts sufficient to provide for the costs and expenses described in subsection (a) relating to the enterprises. Assessments collected from the Federal Home Loan Banks shall not exceed the amounts sufficient to provide for the costs and expenses described in subsection (a) relating to the Federal Home Loan Banks.
(3)

Timing of payment.—
The annual assessment shall be payable semiannually for each fiscal year, on October 1 and April 1.
(4)

Definition.—
For the purpose of this section, the term “total assets” means, with respect to an enterprise, the sum of—
(A)
on-balance-sheet assets of the enterprise, as determined in accordance with generally accepted accounting principles;
(B)
the unpaid principal balance of outstanding mortgage-backed securities issued or guaranteed by the enterprise that are not included in subparagraph (A); and
(C)
other off-balance-sheet obligations as determined by the Director.
(c)

Increased Costs of Regulation.—
(1)

Increase for inadequate capitalization.—
The semiannual payments made pursuant to subsection (b) by any regulated entity that is not classified (for purposes of subtitle B) as adequately capitalized may be increased, as necessary, in the discretion of the Director to pay additional estimated costs of regulation of the regulated entity.
(2)

Adjustment for enforcement activities.—
The Director may adjust the amounts of any semiannual payments for an assessment under subsection (a) that are to be paid pursuant to subsection (b) by a regulated entity, as necessary in the discretion of the Director, to ensure that the costs of enforcement activities under this Act for a regulated entity are borne only by such regulated entity.
(3)

Additional assessment for deficiencies.—
If at any time, as a result of increased costs of regulation of a regulated entity that is not classified (for purposes of subtitle B) as adequately capitalized or as the result of supervisory or enforcement activities under this Act for a regulated entity, the amount available from any semiannual payment made by such regulated entity pursuant to subsection (b) is insufficient to cover the costs of the Agency with respect to such entity, the Director may make and collect from such regulated entity an immediate assessment to cover the amount of such deficiency for the semiannual period. If, at the end of any semiannual period during which such an assessment is made, any amount remains from such assessment, such remaining amount shall be deducted from the assessment for such regulated entity for the following semiannual period.
(d)

Surplus.—
Except with respect to amounts collected pursuant to subsection (a)(3), if any amount from any annual assessment collected from an enterprise remains unobligated at the end of the year for which the assessment was collected, such amount shall be credited to the assessment to be collected from the enterprise for the following year.
(e)

Working Capital Fund.—
At the end of each year for which an assessment under this section is made, the Director shall remit to each regulated entity any amount of assessment collected from such regulated entity that is attributable to subsection (a)(3) and is in excess of the amount the Director deems necessary to maintain a working capital fund.
(f)

Treatment of Assessments.—
(1)

Deposit.—
Amounts received by the Director from assessments under this section may be deposited by the Director in the manner provided in section 5234 of the Revised Statutes of the United States (12 U.S.C. 192) for monies deposited by the Comptroller of the Currency.
(2)

Not government funds.—
The amounts received by the Director from any assessment under this section shall not be construed to be Government or public funds or appropriated money.
(3)

No apportionment of funds.—
Notwithstanding any other provision of law, the amounts received by the Director from any assessment under this section shall not be subject to apportionment for the purpose of chapter 15 of title 31, United States Code, or under any other authority.
(4)

Use of funds.—
The Director may use any amounts received by the Director from assessments under this section for compensation of the Director and other employees of the Agency and for all other expenses of the Director and the Agency.
(5)

Availability of oversight fund amounts.—
Notwithstanding any other provision of law, any amounts remaining in the Federal Housing Enterprises Oversight Fund established under this section (as in effect before the effective date of the Federal Housing Finance Regulatory Reform Act of 2008, and any amounts remaining from assessments on the Federal Home Loan Banks pursuant to section 18(b) of the Federal Home Loan Bank Act (12 U.S.C. 1438(b)), shall, upon such effective date, be treated for purposes of this subsection as amounts received from assessments under this section.
(6)

Treasury investments.—
(A)

Authority.—
The Director may request the Secretary of the Treasury to invest such portions of amounts received by the Director from assessments paid under this section that, in the Director's discretion, are not required to meet the current working needs of the Agency.
(B)

Government obligations.—
Pursuant to a request under subparagraph (A), the Secretary of the Treasury shall invest such amounts in Government obligations guaranteed as to principal and interest by the United States with maturities suitable to the needs of the Agency and bearing interest at a rate determined by the Secretary of the Treasury taking into consideration current market yields on outstanding marketable obligations of the United States of comparable maturity.
(g)

Budget and Financial Management.—
(1)

Financial operating plans and forecasts.—
The Director shall provide to the Director of the Office of Management and Budget copies of the Director's financial operating plans and forecasts, as prepared by the Director in the ordinary course of the Agency's operations, and copies of the quarterly reports of the Agency's financial condition and results of operations, as prepared by the Director in the ordinary course of the Agency's operations.
(2)

Financial statements.—
The Agency shall prepare annually a statement of—
(A)
assets and liabilities and surplus or deficit;
(B)
income and expenses; and
(C)
sources and application of funds.
(3)

Financial management systems.—
The Agency shall implement and maintain financial management systems that—
(A)
comply substantially with Federal financial management systems requirements and applicable Federal accounting standards; and
(B)
use a general ledger system that accounts for activity at the transaction level.
(4)

Assertion of internal controls.—
The Director shall provide to the Comptroller General of the United States an assertion as to the effectiveness of the internal controls that apply to financial reporting by the Agency, using the standards established in section 3512(c) of title 31, United States Code.
(5)

Rule of construction.—
This subsection may not be construed as implying any obligation on the part of the Director to consult with or obtain the consent or approval of the Director of the Office of Management and Budget with respect to any report, plan, forecast, or other information referred to in paragraph (1) or any jurisdiction or oversight over the affairs or operations of the Agency.
(h)

Audit of Agency.—
(1)

In general.—
The Comptroller General shall annually audit the financial transactions of the Agency in accordance with the United States generally accepted government auditing standards as may be prescribed by the Comptroller General of the United States. The audit shall be conducted at the place or places where accounts of the Agency are normally kept. The representatives of the Government Accountability Office shall have access to the personnel and to all books, accounts, documents, papers, records (including electronic records), reports, files, and all other papers, automated data, things, or property belonging to or under the control of or used or employed by the Agency pertaining to its financial transactions and necessary to facilitate the audit, and such representatives shall be afforded full facilities for verifying transactions with the balances or securities held by depositories, fiscal agents, and custodians. All such books, accounts, documents, records, reports, files, papers, and property of the Agency shall remain in possession and custody of the Agency. The Comptroller General may obtain and duplicate any such books, accounts, documents, records, working papers, automated data and files, or other information relevant to such audit without cost to the Comptroller General and the Comptroller General's right of access to such information shall be enforceable pursuant to section 716(c) of title 31, United States Code.
(2)

Report.—
The Comptroller General shall submit to the Congress a report of each annual audit conducted under this subsection. The report to the Congress shall set forth the scope of the audit and shall include the statement of assets and liabilities and surplus or deficit, the statement of income and expenses, the statement of sources and application of funds, and such comments and information as may be deemed necessary to inform Congress of the financial operations and condition of the Agency, together with such recommendations with respect thereto as the Comptroller General may deem advisable. A copy of each report shall be furnished to the President and to the Agency at the time submitted to the Congress.
(3)

Assistance and costs.—
For the purpose of conducting an audit under this subsection, the Comptroller General may, in the discretion of the Comptroller General, employ by contract, without regard to section 3709 of the Revised Statutes of the United States (41 U.S.C. 5), professional services of firms and organizations of certified public accountants for temporary periods or for special purposes. Upon the request of the Comptroller General, the Director of the Agency shall transfer to the Government Accountability Office from funds available, the amount requested by the Comptroller General to cover the full costs of any audit and report conducted by the Comptroller General. The Comptroller General shall credit funds transferred to the account established for salaries and expenses of the Government Accountability Office, and such amount shall be available upon receipt and without fiscal year limitation to cover the full costs of the audit and report.
SEC. 1317.
[12 U.S.C. 4517]

EXAMINATIONS.
(a)

Annual Examination.—
The Director shall annually conduct an on-site examination under this section of each regulated entity to determine the condition of the regulated entity for the purpose of ensuring its financial safety and soundness.
(b)

Other Examinations.—
In addition to annual examinations under subsection (a), the Director may conduct an examination under this section of a regulated entity whenever the Director determines that an examination is necessary or appropriate.
(c)

Examiners.—
The Director shall appoint examiners to conduct examinations under this section. The Director may contract with the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, or the Federal Deposit Insurance Corporation for the services of examiners to conduct examinations under this section. The Director shall reimburse such agencies for any costs of providing examiners from amounts available in the Federal Housing Enterprises Oversight Fund.
(d)

Inspector General.—
There shall be within the Agency an Inspector General, who shall be appointed in accordance with section 403(a) of title 5, United States Code.
(e)

Law Applicable to Examiners.—
The Director and each examiner shall have the same authority and each examiner shall be subject to the same disclosures, prohibitions, obligations, and penalties as are applicable to examiners employed by the Federal Reserve banks.
(f)

Technical Experts.—
The Director may obtain the services of any technical experts the Director considers appropriate to provide temporary technical assistance relating to examinations to the Director, officers, and employees of the Office. The Director shall describe, in the record of each examination, the nature and extent of any such temporary technical assistance.
(g)

Oaths, Evidence, and Subpoena Powers.—
In connection with examinations under this section, the Director shall have the authority provided under section 1379B 37.
^{37}
The reference to section 1379B in subsection (g) probably should be a reference to section 1379D. See amendment made by section 1153(b)(1)(A) of Public Law 110–289, 122 Stat. 2774. Such amendment could not be executed because of a previous amendment made by section 1105(a)(4) of such Public Law which redesignated subsection (f) as subsection (g).
(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.
(i)

Ombudsman.—
The Director shall establish, by regulation, an Office of the Ombudsman within the Agency, which shall be responsible for considering complaints and appeals, from any regulated entity and any person that has a business relationship with a regulated entity, regarding any matter relating to the regulation and supervision of such regulated entity by the Agency. The regulation issued by the Director under this subsection shall specify the authority and duties of the Office of the Ombudsman.
SEC. 1318.
[12 U.S.C. 4518]

PROHIBITION AND WITHHOLDING OF EXECUTIVE COMPENSATION.
(a)

In General.—
The Director shall prohibit the regulated entities from providing compensation to any executive officer of the regulated entity that is not reasonable and comparable with compensation for employment in other similar businesses (including other publicly held financial institutions or major financial services companies) involving similar duties and responsibilities.
(b)

Factors.—
In making any determination under subsection (a), the Director may take into consideration any factors the Director considers relevant, including any wrongdoing on the part of the executive officer, and such wrongdoing shall include any fraudulent act or omission, breach of trust or fiduciary duty, violation of law, rule, regulation, order, or written agreement, and insider abuse with respect to the regulated entity. The approval of an agreement or contract pursuant to section 309(d)(3)(B) of the Federal National Mortgage Association Charter Act (12 U.S.C. 1723a(d)(3)(B)) or section 303(h)(2) of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1452(h)(2)) shall not preclude the Director from making any subsequent determination under subsection (a).
(c)

Withholding of Compensation.—
In carrying out subsection (a), the Director may require a regulated entity to withhold any payment, transfer, or disbursement of compensation to an executive officer, or to place such compensation in an escrow account, during the review of the reasonableness and comparability of compensation.
(d)

Prohibition of Setting Compensation.—
In carrying out subsection (a), the Director may not prescribe or set a specific level or range of compensation.
(e)

Authority To Regulate or Prohibit Certain Forms of Benefits to Affiliated Parties.—
(1)

Golden parachutes and indemnification payments.—
The Director may prohibit or limit, by regulation or order, any golden parachute payment or indemnification payment.
(2)

Factors to be taken into account.—
The Director shall prescribe, by regulation, the factors to be considered by the Director 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 Director);
(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 effect 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 Director determines that the regulated entity is in a troubled condition (as defined in the regulations of the Director).
(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 Director 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 Director.
(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. 1319.
[12 U.S.C. 4519]

AUTHORITY TO PROVIDE FOR REVIEW OF REGULATED ENTITIES.
The Director may, on such terms and conditions as the Director deems appropriate, contract with any entity to conduct a review of the regulated entities.
SEC. 1319A.
[12 U.S.C. 4520]

MINORITY AND WOMEN INCLUSION; DIVERSITY REQUIREMENTS.
(a)

Office of Minority and Women Inclusion.—
Each regulated entity shall establish an Office of Minority and Women Inclusion, or designate an office of the entity, that shall be responsible for carrying out this section and all matters of the entity relating to diversity in management, employment, and business activities in accordance with such standards and requirements as the Director shall establish.38
^{38}
Section 1116 of Public Law 110–289, 122 Stat. 2681, struck subsection (b) of this section and added new subsections (a), (b), (c), (d), and (f). Section 1161(a)(2)(B) of such Public Law, 122 Stat. 2779, also struck subsection (b), probably an error. The new subsection (b), added by section 1116 and struck by section 1161, reads as follows:
(b) Inclusion in All Levels of Business Activities.—Each regulated entity shall develop and implement standards and procedures to ensure, to the maximum extent possible, the inclusion and utilization of minorities (as such term is defined in section 1204(c) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1811 note)) and women, and minority- and women-owned businesses (as such terms are defined in section 21A(r)(4) of the Federal Home Loan Bank Act (12 U.S.C. 1441a(r)(4)) (including financial institutions, investment banking firms, mortgage banking firms, asset management firms, broker-dealers, financial services firms, underwriters, accountants, brokers, investment consultants, and providers of legal services) in all business and activities of the regulated entity at all levels, including in procurement, insurance, and all types of contracts (including contracts for the issuance or guarantee of any debt, equity, or mortgage-related securities, the management of its mortgage and securities portfolios, the making of its equity investments, the purchase, sale and servicing of single- and multi-family mortgage loans, and the implementation of its affordable housing program and initiatives). The processes established by each regulated entity for review and evaluation for contract proposals and to hire service providers shall include a component that gives consideration to the diversity of the applicant.
(c)

Applicability.—
This section shall apply to all contracts of a regulated entity for services of any kind, including services that require the services of investment banking, asset management entities, broker-dealers, financial services entities, underwriters, accountants, investment consultants, and providers of legal services.
(d)

Inclusion in Annual Reports.—
Each regulated entity shall include, in the annual report submitted by the entity to the Director pursuant to section 309(k) of the Federal National Mortgage Association Charter Act (12 U.S.C. 1723a(k)), section 307(c) of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1456(c)), and section 20 of the Federal Home Loan Bank Act (12 U.S.C. 1440), as applicable, detailed information describing the actions taken by the entity pursuant to this section, which shall include a statement of the total amounts paid by the entity to third party contractors since the last such report and the percentage of such amounts paid to businesses described in subsection (b) of this section.
(e)

Outreach.—
Each regulated entity shall establish a minority outreach program to ensure the inclusion (to the maximum extent possible) in contracts entered into by the enterprises of minorities and women and businesses owned by minorities and women, including financial institutions, investment banking firms, underwriters, accountants, brokers, and providers of legal services.
(f)

Diversity in Agency Workforce.—
The Agency shall take affirmative steps to seek diversity in its workforce at all levels of the agency consistent with the demographic diversity of the United States, which shall include—
(1)
heavily recruiting at historically Black colleges and universities, Hispanic-serving institutions, women's colleges, and colleges that typically serve majority minority populations;
(2)
sponsoring and recruiting at job fairs in urban communities, and placing employment advertisements in newspapers and magazines oriented toward women and people of color;
(3)
partnering with organizations that are focused on developing opportunities for minorities and women to place talented young minorities and women in industry internships, summer employment, and full-time positions; and
(4)
where feasible, partnering with inner-city high schools, girls' high schools, and high schools with majority minority populations to establish or enhance financial literacy programs and provide mentoring.
SEC. 1319B.
[12 U.S.C. 4521]

ANNUAL REPORTS BY DIRECTOR.
(a)

General Report.—
The Director shall submit to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate, not later than June 15 of each year, a written report, which shall include—
(1)
a description of the actions taken, and being undertaken, by the Director to carry out this title;
(2)
a description of the financial safety and soundness of each regulated entity, including the results and conclusions of the annual examinations of the regulated entities conducted under section 1317(a);
(3)
any recommendations for legislation to enhance the financial safety and soundness of the regulated entities;
(4)
a description of—
(A)
whether the procedures established by each regulated entity pursuant to section 102(b)(3) of the Flood Disaster Protection Act of 1973 are adequate and being complied with, and
(B)
the results and conclusions of any examination, as determined necessary by the Director, to determine the compliance of the regulated entities with the requirements of section 102(b)(3) of such Act, which shall include a description of the methods used to determine compliance and the types and sources of deficiencies (if any), and identify any corrective measures that have been taken to remedy any such deficiencies,
except that the information described in this paragraph shall be included only in each of the first, third, and fifth annual reports under this subsection required to be submitted after the expiration of the 1-year period beginning on the date of enactment of the Riegle Community Development and Regulatory Improvement Act of 199439; and
^{39}
The date of enactment was September 23, 1994.
(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.
(b)

Report on Enforcement Actions.—
Not later than March 15 of each year, the Director shall submit to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate a written report describing, for the preceding calendar year, the requests by the Director to the Attorney General for enforcement actions under subtitle C and describing the disposition of each request, which shall include statements of—
(1)
the total number of requests made by the Director;
(2)
the number of requests that resulted in the commencement of litigation by the Department of Justice;
(3)
the number of requests that did not result in the commencement of litigation by the Department of Justice;
(4)
with respect to requests that resulted in the commence-ment of litigation—
(A)
the number of days between the date of the request and the commencement of the litigation; and
(B)
the number of days between the date of the commencement and termination of the litigation; and
(5)
the number of litigation requests pending at the beginning of the calendar year, the number of requests made during the calendar year, the number of requests for which action was completed during the calendar year, and the number of requests pending at the end of the calendar year.
SEC. 1319C.
[12 U.S.C. 4522]

PUBLIC DISCLOSURE OF FINAL ORDERS AND AGREEMENTS.
(a)

In General.—
The Director shall make available to the public—
(1)
any written agreement or other written statement for which a violation may be redressed by the Director or any modification to or termination thereof, unless the Director, in the Director's discretion, determines that public disclosure would be contrary to the public interest or determines under subsection (c) that public disclosure would seriously threaten the financial health or security of the enterprise;
(2)
any order that is issued with respect to any administrative enforcement proceeding initiated by the Director under subtitle C and that has become final; and
(3)
any modification to or termination of any final order made public pursuant to this subsection.
(b)

Hearings.—
All hearings on the record with respect to any action of the Director or notice of charges issued by the Director shall be open to the public, unless the Director, in the Director's discretion, determines that holding an open hearing would be contrary to the public interest.
(c)

Delay of Public Disclosure Under Exceptional Circumstances.—
If the Director makes a determination in writing that the public disclosure of any final order pursuant to subsection (a) would seriously threaten the financial health or security of the enterprise, the Director may delay the public disclosure of such order for a reasonable time.
(d)

Documents Filed Under Seal in Public Enforcement Hearings.—
The Director may file any document or part thereof under seal in any hearing under subtitle C if the Director determines in writing that disclosure thereof would be contrary to the public interest.
(e)

Retention of Documents.—
The Director shall keep and maintain a record, for not less than 6 years, of all documents described in subsection (a) and all enforcement agreements and other supervisory actions and supporting documents issued with respect to or in connection with any enforcement proceeding initiated by the Director under subtitle C.
(f)

Disclosures to Congress.—
This section may not be construed to authorize the withholding of any information from, or to prohibit the disclosure of any information to, the Congress or any committee or subcommittee thereof.
SEC. 1319D.
[12 U.S.C. 4523]

LIMITATION ON SUBSEQUENT EMPLOYMENT.
Neither the Director nor any former officer or employee of the Agency who, while employed by the Agency, was compensated at a rate in excess of the lowest rate for a position classified higher than GS–15 of the General Schedule under section 5107 of title 5, United States Code, may accept compensation from an enterprise during the 2-year period beginning on the date of separation from employment by the Agency.
SEC. 1319E.
[12 U.S.C. 4524]

AUDITS BY GAO.
The Comptroller General shall audit the operations of the Agency in accordance with generally accepted Government auditing standards. All books, records, accounts, reports, files, and property belonging to, or used by, the Agency shall be made available to the Comptroller General. Audits under this section shall be conducted annually for the first 2 fiscal years following the date of the enactment of this Act 40 and as appropriate thereafter.
^{40}
The date of enactment was October 28, 1992.
SEC. 1319F.
[12 U.S.C. 4525]

INFORMATION, RECORDS, AND MEETINGS.
For purposes of subchapter II of chapter 5 of title 5, United States Code—
(1)
the Agency, and
(2)
the Department of Housing and Urban Development, with respect to activities under this title,
shall be considered agencies responsible for the regulation or supervision of financial institutions.
SEC. 1319G.
[12 U.S.C. 4526]

REGULATIONS AND ORDERS.
(a)

Authority.—
The Director shall issue any regulations, guidelines, 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.
(b)

Notice and Comment.—
Any regulations issued by the Director under this section shall be issued after notice and opportunity for public comment pursuant to the provisions of section 553 of title 5, United States Code.
SEC. 1319H.
[U.S.C. 4527]

DATA STANDARDS.
(a)

Requirement.—
The Agency shall, by rule, adopt data standards for all collections of information that are regularly filed with or submitted to the Agency.
(b)

Consistency.—
The data standards required under subsection (a) shall incorporate, and ensure compatibility with (to the extent feasible), all applicable data standards established in the rules promulgated under section 124 of the Financial Stability Act of 2010, including, to the extent practicable, by having the characteristics described in clauses (i) through (vi) of subsection (c)(1)(B) of such section 124.
SEC. 1319I.
[U.S.C. 4528]

OPEN DATA PUBLICATION.
All public data assets published by the Agency shall be—
(1)
made available as an open Government data asset (as defined in section 3502 of title 44, United States Code);
(2)
freely available for download;
(3)
rendered in a human-readable format; and
(4)
accessible via application programming interface where appropriate.
PART 2—

ADDITIONAL AUTHORITIES OF THE DIRECTOR
Subpart A—

General Authority
SEC. 1321.
[12 U.S.C. 4541]

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 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 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; and
(4)
the product is consistent with the safety and soundness of the enterprise or 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.
(C)

Temporary approval.—
The Director may, subject to the rules of the Director, provide for temporary approval of the offering of a product without a public comment period, if the Director finds that the existence of exigent circumstances makes such delay contrary to the public interest.
(d)

Conditional Approval.—
If the Director approves the offering of any product by an enterprise, the Director may establish terms, conditions, or limitations with respect to such product with which the enterprise must comply in order to offer such product.
(e)

Exclusions.—
(1)

In general.—
The requirements of subsections (a) through (d) do not apply with respect to—
(A)
the automated loan underwriting system of an enterprise in existence as of the date of enactment of the Federal Housing Finance Regulatory Reform Act of 2008, including any upgrade to the technology, operating system, or software to operate the underwriting system;
(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
(C)
any other activity that is substantially similar, as determined by rule of the Director to—
(i)
the activities described in subparagraphs (A) and (B); and
(ii)
other activities that have been approved by the Director in accordance with this section.
(2)

Expedited review.—
(A)

Enterprise notice.—
For any new activity that an enterprise considers not to be a product, the enterprise shall provide written notice to the Director of such activity, and may not commence such activity until the date of receipt of a notice under subparagraph (B) or the expiration of the period described in subparagraph (C). The Director shall establish, by regulation, the form and content of such written notice.
(B)

Director determination.—
Not later than 15 days after the date of receipt of a notice under subparagraph (A), the Director shall determine whether such activity is a product subject to approval under this section. The Director shall, immediately upon so determining, notify the enterprise.
(C)

Failure to act.—
If the Director fails to determine whether such activity is a product within the 15-day period described in subparagraph (B), the enterprise may commence the new activity in accordance with subparagraph (A).
(f)

No Limitation.—
Nothing in this section may be construed 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. 1322.
[12 U.S.C. 4542]

HOUSING PRICE INDEX.
The Director shall establish and maintain a method of assessing the national average 1-family house price for use for adjusting the conforming loan limitations of the enterprises. In establishing such method, the Director shall take into consideration the monthly survey of all major lenders conducted by the Federal Housing Finance Agency to determine the national average 1-family house price, the House Price Index maintained by the Office of Federal Housing Enterprise Oversight of the Department of Housing and Urban Development before the effective date of the Federal Housing Finance Regulatory Reform Act of 2008, any appropriate house price indexes of the Bureau of the Census of the Department of Commerce, and any other indexes or measures that the Director considers appropriate.
SEC. 1323.
[12 U.S.C. 4543]

PUBLIC ACCESS TO MORTGAGE INFORMATION.
(a)

In General.—
The Director 41 shall make available to the public, in forms useful to the public (including forms accessible by computers), the data submitted by the enterprises in the reports required under section 309(m) of the Federal National Mortgage Association Charter Act or section 307(e) of the Federal Home Loan Mortgage Corporation Act.
^{41}
Section 1126(1)(A) of Public Law 110–289 provides as follows:
SEC. 1126. PUBLIC USE DATABASE.
Section 1323 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (42 U.S.C. 4543) is amended—
(1) in subsection (a)—
(A) by striking “(a) In General.—The Secretary” and inserting the following:
``(a) Availability.—
``(1) In general.—The Director''; and
The amendment could not be executed because of an earlier amendment made by section 1122(a)(1) of such Public Law which provided for an amendment to strike “Secretary” and insert “Director” each place it appears in section 1323.
(2)

Census tract level reporting.—
Such data shall include the data elements required to be reported under the Home Mortgage Disclosure Act of 1975, at the census tract level.
(b)

Access.—
(1)

Proprietary data.—
Except as provided in paragraph (2), the Director may not make available to the public data that the Director determines pursuant to section 1326 are proprietary information.
(2)

Exception.—
The Director shall not restrict access to the data provided in accordance with section 309(m)(1)(A) of the Federal National Mortgage Association Charter Act or section 307(e)(1)(A) of the Federal Home Loan Mortgage Corporation Act or with subsection (a)(2).
(c)

Fees.—
The Director may charge reasonable fees to cover the cost of making data available under this section to the public.
(d)

Timing.—
Data submitted under this section by an enterprise in connection with a provision referred to in subsection (a) shall be made publicly available in accordance with this section not later than September 30 of the year following the year to which the data relates.
SEC. 1324.
[12 U.S.C. 4544]

ANNUAL HOUSING REPORT.
(a)

In General.—
After reviewing and analyzing the reports submitted under section 309(n) of the Federal National Mortgage Association Charter Act and section 307(f) of the Federal Home Loan Mortgage Corporation Act, the Director shall submit a report, not later than October 30 of each year, to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives, on the activities of each enterprise.
(b)

Contents.—
The report required under subsection (a) shall—
(1)
discuss—
(A)
the extent to and manner in which—
(i)
each enterprise is achieving the annual housing goals established under subpart B;
(ii)
each enterprise is complying with its duty to serve underserved markets, as established under section 1335;
(iii)
each enterprise is complying with section 1337;
(iv)
each enterprise received credit towards achieving each of its goals resulting from a transaction or activity pursuant to section 1331(b)(2); and
(v)
each enterprise is achieving the purposes of the enterprise established by law; and
(B)
the actions that each enterprise could undertake to promote and expand the purposes of the enterprise;
(2)
aggregate and analyze relevant data on income to assess the compliance of each enterprise with the housing goals established under subpart B;
(3)
aggregate and analyze data on income, race, and gender by census tract and other relevant classifications, and compare such data with larger demographic, housing, and economic trends;
(4)
identify the extent to which each enterprise is involved in mortgage purchases and secondary market activities involving subprime and nontraditional loans;
(5)
compare the characteristics of subprime and nontraditional loans both purchased and securitized by each enterprise to other loans purchased and securitized by each enterprise; and
(6)
compare the characteristics of high-cost loans purchased and securitized, where such securities are not held on portfolio to loans purchased and securitized, where such securities are either retained on portfolio or repurchased by the enterprise, including such characteristics as—
(A)
the purchase price of the property that secures the mortgage;
(B)
the loan-to-value ratio of the mortgage, which shall reflect any secondary liens on the relevant property;
(C)
the terms of the mortgage;
(D)
the creditworthiness of the borrower; and
(E)
any other relevant data, as determined by the Director.
(c)

Data Collection and Reporting.—
(1)

In general.—
To assist the Director in analyzing the matters described in subsection (b), the Director shall conduct, on a monthly basis, a survey of mortgage markets in accordance with this subsection.
(2)

Data points.—
Each monthly survey conducted by the Director under paragraph (1) shall collect data on—
(A)
the characteristics of individual mortgages that are eligible for purchase by the enterprises and the characteristics of individual mortgages that are not eligible for purchase by the enterprises including, in both cases, information concerning—
(i)
the price of the house that secures the mortgage;
(ii)
the loan-to-value ratio of the mortgage, which shall reflect any secondary liens on the relevant property;
(iii)
the terms of the mortgage;
(iv)
the creditworthiness of the borrower or borrowers; and
(v)
whether the mortgage, in the case of a conforming mortgage, was purchased by an enterprise;
(B)
the characteristics of individual subprime and nontraditional mortgages that are eligible for purchase by the enterprises and the characteristics of borrowers under such mortgages, including the creditworthiness of such borrowers and determination whether such borrowers would qualify for prime lending; and
(C)
such other matters as the Director determines to be appropriate.
(3)

Public availability.—
The Director shall make any data collected by the Director in connection with the conduct of a monthly survey available to the public in a timely manner, provided that the Director may modify the data released to the public to ensure that the data—
(A)
is not released in an identifiable form; and
(B)
is not otherwise obtainable from other publicly available data sets.
(4)

Definition.—
For purposes of this subsection, the term “identifiable form” means any representation of information that permits the identity of a borrower to which the information relates to be reasonably inferred by either direct or indirect means.
SEC. 1325.
[12 U.S.C. 4545]

FAIR HOUSING.
The Secretary of Housing and Urban Development shall—
(1)
by regulation, prohibit each enterprise from discriminating in any manner in the purchase of any mortgage because of race, color, religion, sex, handicap, familial status, age, or national origin, including any consideration of the age or location of the dwelling or the age of the neighborhood or census tract where the dwelling is located in a manner that has a discriminatory effect;
(2)
by regulation, require each enterprise to submit data to the Secretary to assist the Secretary in investigating whether a mortgage lender with which the enterprise does business has failed to comply with the Fair Housing Act;
(3)
by regulation, require each enterprise to submit data to the Secretary to assist in investigating whether a mortgage lender with which the enterprise does business has failed to comply with the Equal Credit Opportunity Act, and shall submit any such information received to the appropriate Federal agencies, as provided in section 704 of the Equal Credit Opportunity Act, for appropriate action;
(4)
obtain information from other regulatory and enforcement agencies of the Federal Government and State and local governments regarding violations by lenders of the Fair Housing Act and the Equal Credit Opportunity Act and make such information available to the enterprises;
(5)
direct the enterprises to undertake various remedial actions, including suspension, probation, reprimand, or settlement, against lenders that have been found to have engaged in discriminatory lending practices in violation of the Fair Housing Act or the Equal Credit Opportunity Act, pursuant to a final adjudication on the record, and after opportunity for an administrative hearing, in accordance with subchapter II of chapter 5 of title 5, United States Code; and
(6)
periodically review and comment on the underwriting and appraisal guidelines of each enterprise to ensure that such guidelines are consistent with the Fair Housing Act and this section.
SEC. 1326.
[12 U.S.C. 4546]

PROHIBITION OF PUBLIC DISCLOSURE OF PROPRIETARY INFORMATION.
(a)

In General.—
Subject to subsection (d), the Director may, by regulation or order, provide that certain information shall be treated as proprietary information and not subject to disclosure under section 1323 of this title, section 309(n)(3) of the Federal National Mortgage Association Charter Act, or section 307(f)(3) of the Federal Home Loan Mortgage Corporation Act.
(b)

Protection of Information on Housing Activities.—
The Director shall not provide public access to, or disclose to the public, any information required to be submitted by an enterprise under section 309(n) of the Federal National Mortgage Association Charter Act or section 307(f) of the Federal Home Loan Mortgage Corporation Act that the Director determines is proprietary.
(c)

Nondisclosure Pending Consideration.—
This section may not be construed to authorize the disclosure of information to, or examination of data by, the public or a representative of any person or agency pending the issuance of a final decision under this section.
(d)

Mortgage Information.—
Subject to privacy considerations, as described in section 304(j) of the Home Mortgage Disclosure Act of 1975 (12 U.S.C. 2803(j)), 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—
(1)
the same data from the enterprises that is required of insured depository institutions under the Home Mortgage Disclosure Act of 1975; and
(2)
information collected by the Director under section 1324(b)(6).
SEC. 1327.
[12 U.S.C. 4547]

ENTERPRISE GUARANTEE FEES.
(a)

Definitions.—
For purposes of this section, the following definitions shall apply:
(1)

Guarantee fee.—
The term “guarantee fee”—
(A)
means a fee described in subsection (b); and
(B)
includes—
(i)
the guaranty fee charged by the Federal National Mortgage Association with respect to mortgage-backed securities; and
(ii)
the management and guarantee fee charged by the Federal Home Loan Mortgage Corporation with respect to participation certificates.
(2)

Average fees.—
The term “average fees” means the average contractual fee rate of single-family guaranty arrangements by an enterprise entered into during 2011, plus the recognition of any up-front cash payments over an estimated average life, expressed in terms of basis points. Such definition shall be interpreted in a manner consistent with the annual report on guarantee fees by the Federal Housing Finance Agency.
(b)

Increase.—
(1)

In general.—
(A)

Phased increase required.—
Subject to subsection (c), the Director shall require each enterprise to charge a guarantee fee in connection with any guarantee of the timely payment of principal and interest on securities, notes, and other obligations based on or backed by mortgages on residential real properties designed principally for occupancy of from 1 to 4 families, consummated after the date of enactment of this section.
(B)

Amount.—
The amount of the increase required under this section shall be determined by the Director to appropriately reflect the risk of loss, as well the cost of capital allocated to similar assets held by other fully private regulated financial institutions, but such amount shall be not less than an average increase of 10 basis points for each origination year or book year above the average fees imposed in 2011 for such guarantees. The Director shall prohibit an enterprise from offsetting the cost of the fee to mortgage originators, borrowers, and investors by decreasing other charges, fees, or premiums, or in any other manner.
(2)

Authority to limit offer of guarantee.—
The Director shall prohibit an enterprise from consummating any offer for a guarantee to a lender for mortgage-backed securities, if—
(A)
the guarantee is inconsistent with the requirements of this section; or
(B)
the risk of loss is allowed to increase, through lowering of the underwriting standards or other means, for the primary purpose of meeting the requirements of this section.
(3)

Deposit in Treasury.—
Amounts received from fee increases imposed under this section shall be deposited directly into the United States Treasury, and shall be available only to the extent provided in subsequent appropriations Acts. The fees charged pursuant to this section shall not be considered a reimbursement to the Federal Government for the costs or subsidy provided to an enterprise.
(c)

Phase-in.—
(1)

In general.—
The Director may provide for compliance with subsection (b) by allowing each enterprise to increase the guarantee fee charged by the enterprise gradually over the 2-year period beginning on the date of enactment of this section, in a manner sufficient to comply with this section. In determining a schedule for such increases, the Director shall—
(A)
provide for uniform pricing among lenders;
(B)
provide for adjustments in pricing based on risk levels; and
(C)
take into consideration conditions in financial markets.
(2)

Rule of construction.—
Nothing in this subsection shall be interpreted to undermine the minimum increase required by subsection (b).
(d)

Information Collection and Annual Analysis.—
The Director shall require each enterprise to provide to the Director, as part of its annual report submitted to Congress—
(1)
a description of—
(A)
changes made to up-front fees and annual fees as part of the guarantee fees negotiated with lenders;
(B)
changes to the riskiness of the new borrowers compared to previous origination years or book years; and
(C)
any adjustments required to improve for future origination years or book years, in order to be in complete compliance with subsection (b); and
(2)
an assessment of how the changes in the guarantee fees described in paragraph (1) met the requirements of subsection (b).
(e)

Enforcement.—
(1)

Required adjustments.—
Based on the information from subsection (d) and any other information the Director deems necessary, the Director shall require an enterprise to make adjustments in its guarantee fee in order to be in compliance with subsection (b).
(2)

Noncompliance penalty.—
An enterprise that has been found to be out of compliance with subsection (b) for any 2 consecutive years shall be precluded from providing any guarantee for a period, determined by rule of the Director, but in no case less than 1 year.
(3)

Rule of construction.—
Nothing in this subsection shall be interpreted as preventing the Director from initiating and implementing an enforcement action against an enterprise, at a time the Director deems necessary, under other existing enforcement authority.
(f)

Expiration.—
The provisions of this section shall expire on October 1, 2032.
SEC. 1328.
[12 U.S.C. 4548]

REGULATIONS FOR USE OF CREDIT SCORES.
The Director shall—
(1)
by regulation, establish standards and criteria for any process used by an enterprise to validate and approve credit scoring models pursuant to section 302(b)(7) of the Federal National Mortgage Association Charter Act (12 U.S.C. 1717(b)(7)) and section 305(d) of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1454(d)); and
(2)
ensure that any credit scoring model that is validated and approved by an enterprise under section 302(b)(7) (12 U.S.C. 1717(b)(7)) of the Federal National Mortgage Association Charter Act or section 305(d) of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1454(d)) meets the requirements of clauses (i), (ii), and (iii) of section 302(b)(7)(C) of the Federal National Mortgage Association Charter Act and subparagraphs (A), (B), and (C) of section 305(d)(3) of the Federal Home Loan Mortgage Corporation Act, respectively.
Subpart B—

Housing Goals
SEC. 1331.
[12 U.S.C. 4561]

ESTABLISHMENT OF HOUSING GOALS.
(a)

In General.—
The Director shall, by regulation, establish effective for 2010 and each year thereafter, annual housing goals, with respect to the mortgage purchases by the enterprises, as follows:
(1)

Single-family housing goals.—
Four single-family housing goals under section 1332.
(2)

Multifamily special affordable housing goal.—
One multifamily special affordable housing goal under section 1333.
(b)

Timing.—
The Director shall, by regulation, establish an annual deadline by which the Director shall establish the annual housing goals under this subpart for each year, taking into consideration the need for the enterprises to reasonably and sufficiently plan their operations and activities in advance, including operations and activities necessary to meet such annual goals.
(c)

Transition.—
The annual housing goals effective for 2008 pursuant to this subpart, as in effect before the enactment of the Federal Housing Finance Regulatory Reform Act of 2008, shall remain in effect for 2009, except that not later than the expiration of the 270-day period beginning on the date of the enactment of such Act, the Director shall review such goals applicable for 2009 to determine the feasibility of such goals given the market conditions current at such time and, after seeking public comment for a period not to exceed 30 days, may make appropriate adjustments consistent with such market conditions.
(d)

Eliminating Interest Rate Disparities.—
(1)

In general.—
Upon request by the Director, an enterprise shall provide to the Director, in a form determined by the Director, data the Director may review to determine whether there exist disparities in interest rates charged on mortgages to borrowers who are minorities as compared with comparable mortgages to borrowers of similar creditworthiness who are not minorities.
(2)

Remedial actions upon preliminary finding.—
Upon a preliminary finding by the Director that a pattern of disparities in interest rates with respect to any lender or lenders exists pursuant to the data provided by an enterprise in paragraph (1), the Director shall—
(A)
refer the preliminary finding to the appropriate regulatory or enforcement agency for further review; and
(B)
require the enterprise to submit additional data with respect to any lender or lenders, as appropriate and to the extent practicable, to the Director who shall submit any such additional data to the regulatory or enforcement agency for appropriate action.
(3)

Annual report to congress.—
The Director shall submit to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate a report describing the actions taken, and being taken, by the Director to carry out this subsection. No such report shall identify any lender or lenders who have not been found to have engaged in discriminatory lending practices pursuant to a final adjudication on the record, and after opportunity for an administrative hearing, in accordance with subchapter II of chapter 5 of title 5, United States Code.
(4)

Protection of identity of individuals.—
In carrying out this subsection, the Director shall ensure that no property-related or financial information that would enable a borrower to be identified shall be made public.
SEC. 1332.
[12 U.S.C. 4562]

SINGLE-FAMILY HOUSING GOALS.
(a)

In General.—
The Director shall, by regulation, establish annual goals for the purchase by each enterprise of the following types of mortgages for the following categories of families:
(1)

Purchase-money mortgages.—
A goal for purchase of conventional, conforming, single-family, purchase money mortgages financing owner-occupied housing for each of the following categories of families:
(A)
Low-income families.
(B)
Families that reside in low-income areas.
(C)
Very low-income families.
(2)

Refinancing mortgages.—
A goal for purchase of conventional, conforming mortgages on owner-occupied, single-family housing for low-income families that are given to pay off or prepay an existing loan secured by the same property.
(b)

Goals as a Percentage of Total Mortgage Purchases.—
The goals established under paragraphs (1) and (2) of subsection (a) shall be established as a percentage of the total number of conventional, conforming, single-family, owner-occupied, purchase money mortgages purchased by the enterprise, or as percentage of the total number of conventional, single-family, owner-occupied refinance mortgages purchased by the enterprise, as applicable, that are mortgages for the types of families specified in paragraphs (1) and (2) of subsection (a).
(c)

Single-Family, Owner-Occupied Rental Housing Units.—
The Director shall require each enterprise to report the number of rental housing units affordable to low-income families each year which are contained in mortgages purchased by the enterprise financing 2- to 4-unit single-family, owner-occupied properties and may, by regulation, establish additional requirements relating to such units.
(d)

Determination of Compliance.—
(1)

In general.—
The Director shall determine, for each year that the housing goals under this section are in effect pursuant to section 1331(a), whether each enterprise has complied with each such goal established under subsection (a) of this section and any additional requirements which may be established under subsection (c) of this section.
(2)

Purchase-money mortgage goals.—
An enterprise shall be considered to be in compliance with a housing goal under subparagraph (A), (B), or (C) of subsection (a)(1) for a year only if, for the type of family described in such subparagraph, the percentage of the number of conventional, conforming, single-family, owner-occupied, purchase money mortgages purchased by the enterprise in such year that serve such families, meets or exceeds the target for the year for such type of family that is established under subsection (e).
(3)

Refinance goal.—
An enterprise shall be considered to be in compliance with the refinance goal under subsection (a)(2) for a year only if the percentage of the number of conventional, conforming, single-family, owner-occupied refinance mortgages purchased by the enterprise in such year that serve low-income families meets or exceeds the target for the year that is established under subsection (e).
(e)

Annual Targets.—
(1)

In general.—
The Director shall, by regulation, establish annual targets for each goal and subgoal under this section, provided that the Director shall not set prospective targets longer than three years. In establishing such targets, the Director shall not consider segments of the market determined to be unacceptable or contrary to good lending practices, inconsistent with safety and soundness, or unauthorized for purchase by the enterprises.
(2)

Goals targets.—
(A)

Calculation.—
The Director shall calculate, for each of the types of families described in subsection (a), the percentage, for each of the three years that most recently precede such year and for which information under the Home Mortgage Disclosure Act of 1975 is publicly available—
(i)
of the number of conventional, conforming, single-family, owner-occupied purchase money mortgages originated in such year that serve such type of family, or
(ii)
the number of conventional, conforming, single-family, owner-occupied refinance mortgages originated in such year that serve low-income families,
as applicable, as determined by the Director using the information obtained and determined pursuant to paragraphs (4) and (5).
(B)

Establishment of goal targets.—
The Director shall, by regulation, establish targets for each of the goal categories, taking into consideration the calculations under subparagraph (A) and the following factors:
(i)
National housing needs.
(ii)
Economic, housing, and demographic conditions, including expected market developments.
(iii)
The performance and effort of the enterprises toward achieving the housing goals under this section in previous years.
(iv)
The ability of the enterprise to lead the industry in making mortgage credit available.
(v)
Such other reliable mortgage data as may be available.
(vi)
The size of the purchase money conventional mortgage market, or refinance conventional mortgage market, as applicable, serving each of the types of families described in subsection (a), relative to the size of the overall purchase money mortgage market or the overall refinance mortgage market, respectively.
(vii)
The need to maintain the sound financial condition of the enterprises.
(3)

Authority to adjust targets.—
The Director may, by regulation, adjust the percentage targets previously established by regulation pursuant to paragraph (2)(B) for any year, to reflect subsequent available data and market developments.
(4)

HMDA information.—
The Director shall annually obtain information submitted in compliance with the Home Mortgage Disclosure Act of 1975 regarding conventional, conforming, single-family, owner-occupied, purchase money and refinance mortgages originated and purchased for the previous year.
(5)

Conforming mortgages.—
In determining whether a mortgage is a conforming mortgage for purposes of this paragraph, the Director shall consider the original principal balance of the mortgage loan to be the principal balance as reported in the information referred to in paragraph (4), as rounded to the nearest thousand dollars.
(f)

Notice of Determination and Enterprise Comment.—
(1)

Notice.—
Within 30 days of making a determination under subsection (d) regarding compliance of an enterprise for a year with a housing goal established under this section and before any public disclosure thereof, the Director shall provide notice of the determination to the enterprise, which shall include an analysis and comparison, by the Director, of the performance of the enterprise for the year and the targets for the year under subsection (e).
(2)

Comment period.—
The Director shall provide each enterprise an opportunity to comment on the determination during the 30-day period beginning upon receipt by the enterprise of the notice.
(g)

Use of Borrower Income.—
In monitoring the performance of each enterprise pursuant to the housing goals under this section and evaluating such performance (for purposes of section 1336), the Director shall consider a mortgagor's income to be such income at the time of origination of the mortgage.
(h)

Consideration of Properties With Rental Units.—
Mortgages financing two- to four-unit owner-occupied properties shall count toward the achievement of the single-family housing goals under this section, if such properties otherwise meet the requirements under this section, notwithstanding the use of one or more units for rental purposes.
(i)

Goals Credit.—
The Director shall determine whether an enterprise shall receive full, partial, or no credit for a transaction toward achievement of any of the housing goals established pursuant to section 1332 and 1333. In making any such determination, the Director shall consider whether a transaction or activity of an enterprise is substantially equivalent to a mortgage purchase and either (1) creates a new market, or (2) adds liquidity to an existing market. No credit toward the achievement of the housing goals and subgoals established under this section may be given to the purchase of mortgages, including any transaction or activity of an enterprise determined to be substantially equivalent to a mortgage purchase, that is determined to be unacceptable or contrary to good lending practices, inconsistent with safety and soundness, or unauthorized for purchase by the enterprises, pursuant to regulations issued by the Director.
SEC. 1333.
[12 U.S.C. 4563]

MULTIFAMILY SPECIAL AFFORDABLE HOUSING GOAL.
(a)

Establishment of Goal.—
(1)

In general.—
The Director shall, by regulation, establish a single annual goal, by either unit or dollar volume, of purchases by each enterprise of mortgages on multifamily housing that finance dwelling units affordable to low-income families.
(2)

Additional requirements for units affordable to very low-income families.—
When establishing the goal under this section, the Director shall establish additional requirements for the purchase by each enterprise of mortgages on multifamily housing that finance dwelling units affordable to very low-income families.
(3)

Reporting on smaller properties.—
The Director shall require each enterprise to report on the purchase by each enterprise of multifamily housing of a smaller or limited size that is affordable to low-income families, which may be based on multifamily projects of 5 to 50 units (as such numbers may be adjusted by the Director) or on mortgages of up to $5,000,000 (as such amount may be adjusted by the Director), and may, by regulation, establish such aditional 42 requirements related to such units.
^{42}
So in law.
(4)

Factors.—
In establishing the goal and additional requirements under this section, the Director shall not consider segments of the market determined to be inconsistent with safety and soundness or unauthorized for purchase by the enterprises, and shall take into consideration—
(A)
national multifamily mortgage credit needs and the ability of the enterprise to provide additional liquidity and stability for the multifamily mortgage market;
(B)
the performance and effort of the enterprise in making mortgage credit available for multifamily housing in previous years;
(C)
the size of the multifamily mortgage market for housing affordable to low-income and very low-income families, including the size of the multifamily markets for housing of a smaller or limited size;
(D)
the ability of the enterprise to lead the market in making multifamily mortgage credit available, especially for multifamily housing described in paragraphs (1) and (2);
(E)
the availability of public subsidies; and
(F)
the need to maintain the sound financial condition of the enterprise.
(b)

Units Financed by Housing Finance Agency Bonds.—
The Director shall give full credit toward the achievement of the multifamily special affordable housing goal under this section (for purposes of section 1336) to dwelling units in multifamily housing that otherwise qualifies under such goal and that is financed by tax-exempt or taxable bonds issued by a State or local housing finance agency, if such bonds, in whole or in part—
(1)
are secured by a guarantee of the enterprise; or
(2)
are purchased by the enterprise, except that the Director may give less than full credit for purchases of investment grade bonds, to the extent that such purchases do not provide a new market or add liquidity to an existing market.
(c)

Measurement of Performance.—
The Director shall monitor the performance of each enterprise in meeting the goals established under this section and shall evaluate such performance (for purposes of section 1336) based on whether the rent levels are affordable. A rent level shall be considered to be affordable for purposes of this subsection for low-income families if it does not exceed 30 percent of the maximum income level of such income category, with appropriate adjustments for unit size as measured by the number of bedrooms.
(d)

Determination of Compliance.—
The Director shall determine, for each year that the housing goal under this section is in effect pursuant to section 1331(a), whether each enterprise has complied with such goal and the additional requirements under subsection (a)(2).
SEC. 1334.
[12 U.S.C. 4564]

DISCRETIONARY ADJUSTMENT OF HOUSING GOALS.
(a)

Authority.—
An enterprise may petition the Director in writing at any time during a year to reduce the level of any goal or subgoal for such year established pursuant to this subpart.
(b)

Standard for Reduction.—
The Director may reduce the level for a goal or subgoal pursuant to such a petition only if—
(1)
market and economic conditions or the financial condition of the enterprise require such action; or
(2)
efforts to meet the goal or subgoal would result in the constraint of liquidity, over-investment in certain market segments, or other consequences contrary to the intent of this subpart, or section 301(3) of the Federal National Mortgage Association Charter Act (12 U.S.C. 1716(3)) or section 301(b)(3) of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1451 note), as applicable.
(c)

Determination.—
The Director shall, promptly upon receipt of a petition regarding a reduction, seek public comment on the reduction for a period of 30 days. The Director shall make a determination regarding any proposed reduction within 30 days after the expiration of such public comment period. The Director may extend such determination period for a single additional 15-day period, but only if the Director requests additional information from the enterprise.
SEC. 1335.
[12 U.S.C. 4565]

DUTY TO SERVE UNDERSERVED MARKETS AND OTHER REQUIREMENTS.
(a)

Duty to Serve Underserved Markets.—
(1)43

Duty.—
To increase the liquidity of mortgage investments and improve the distribution of investment capital available for mortgage financing for underserved markets, each enterprise shall provide leadership to the market in developing loan products and flexible underwriting guidelines to facilitate a secondary market for mortgages for very low-, low-, and moderate-income families with respect to the following underserved markets:
^{43}
So in law. There is no paragraph (2).
(A)

Manufactured housing.—
The enterprise shall develop loan products and flexible underwriting guidelines to facilitate a secondary market for mortgages on manufactured homes for very low-, low-, and moderate-income families.
(B)

Affordable housing preservation.—
The enterprise shall develop loan products and flexible underwriting guidelines to facilitate a secondary market to preserve housing affordable to very low-, low-, and moderate-income families, including housing projects subsidized under—44
^{44}
So in law.
(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;
(vi)
the programs under title IV of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11361 et seq.), but only permanent supportive housing projects subsidized under such programs;
(vii)
the rural rental housing program under section 515 of the Housing Act of 1949;
(viii)
the low-income housing tax credit under section 42 of the Internal Revenue Code of 1986; and
(ix)
comparable state and local affordable housing programs.
(C)

Rural markets.—
The enterprise shall develop loan products and flexible underwriting guidelines to facilitate a secondary market for mortgages on housing for very low-, and low-, and moderate-income families in rural areas.
(b)

In General.—
To meet the housing goals established under this subpart and to carry out the duty under subsection (a) of this section, each enterprise shall—
(1)
design programs and products that facilitate the use of assistance provided by the Federal Government and State and local governments;
(2)
develop relationships with nonprofit and for-profit organizations that develop and finance housing and with State and local governments, including housing finance agencies;
(3)
take affirmative steps to—
(A)
assist primary lenders to make housing credit available in areas with concentrations of low-income and minority families, and
(B)
assist insured depository institutions to meet their obligations under the Community Reinvestment Act of 1977,
which shall include developing appropriate and prudent underwriting standards, business practices, repurchase requirements, pricing, fees, and procedures; and
(4)
develop the institutional capacity to help finance low- and moderate-income housing, including housing for first-time homebuyers.
(c)

Additional Categories.—
The Director may submit recommendations to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate for the establishment of additional categories under subsection (a), provided that the Director makes a preliminary determination that any such category is important to the mission of the enterprises, that the category is an underserved market, and that the establishment of such category is warranted.
(d)

Evaluation and Reporting of Compliance.—
(1)

In general.—
The Director shall, by regulation, establish effective for 2010 and thereafter a manner for evaluating whether, and the extent to which, the enterprises have complied with the duty under subsection (a) to serve underserved markets and for rating the extent of such compliance. Using such method, the Director shall, for 2010 and each year thereafter, evaluate such compliance and rate the performance of each enterprise as to extent of compliance. The Director shall include such evaluation and rating for each enterprise for a year in the report for that year submitted pursuant to section 1319B(a).
(2)

Separate evaluations.—
In determining whether an enterprise has complied with the duty referred to in paragraph (1), the Director shall separately evaluate whether the enterprise has complied with such duty with respect to each of the underserved markets identified in subsection (a), taking into consideration—45
^{45}
So in law.
(A)
the development of loan products, more flexible underwriting guidelines, and other innovative approaches to providing financing to each of such underserved markets;
(B)
the extent of outreach to qualified loan sellers and other market participants in each of such underserved markets;
(C)
the volume of loans purchased in each of such underserved markets relative to the market opportunities available to the enterprise, except that the Director shall not establish specific quantitative targets nor evaluate the enterprises based solely on the volume of loans purchased; and
(D)
the amount of investments and grants in projects which assist in meeting the needs of such underserved markets.
(3)

Manufactured housing market.—
In determining whether an enterprise has complied with the duty under subparagraph (A) of subsection (a)(1), the Director may consider loans secured by both real and personal property.
(4)

Prohibition of consideration of affordable housing fund grants for meeting duty to serve.—
In determining whether an enterprise has complied with the duty referred to in paragraph (1), the Director may not consider any affordable housing fund grant amounts used under section 1337 for eligible activities under subsection (g) of such section.
SEC. 1336.
[12 U.S.C. 4566]

MONITORING AND ENFORCING COMPLIANCE WITH HOUSING GOALS.
(a)

In General.—
(1)

Authority.—
The Director shall monitor and enforce compliance with the housing goals established under this subpart and with the duty under section 1335(a) of each enterprise with respect to underserved markets, as provided in this section.
(2)

Guidelines.—
The Director shall establish guidelines to measure the extent of compliance with the housing goals, which, except as provided in paragraph (5), may assign full credit, partial credit, or no credit toward achievement of the housing goals to different categories of mortgage purchase activities of the enterprises, based on such criteria as the Director deems appropriate.
(3)

Extent of compliance.—
In determining compliance with the housing goals established under this subpart, the Director—
(A)
shall consider any single mortgage purchased by an enterprise as contributing to the achievement of each housing goal for which such mortgage purchase qualifies; and
(B)
may take into consideration the number of housing units financed by any mortgage on housing purchased by an enterprise.
(4)

Enforcement of duty to provide mortgage credit to underserved markets.—
The duty under section 1335(a) of each enterprise to serve underserved markets (as determined in accordance with section 1335(c)) shall be enforceable under this section to the same extent and under the same provisions that the housing goals established under this subpart are enforceable. Such duty shall be enforceable only under this section, except that such duty shall not be subject to subsection (c)(7) of this section and shall not be enforceable under any other provision of this title (including subpart C of this part) or under any provision of the Federal National Mortgage Association Charter Act or the Federal Home Loan Mortgage Corporation Act.
(5)

Additional credit.—
The Director may assign additional credit toward achievement, under this section, of the housing goals for mortgage purchase activities of the enterprises that comply with the requirements of such goals and support housing that includes a licensed childcare center. The availability of additional credit under this paragraph shall not be used to increase any housing goal, subgoal, or target established under this subpart.
(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, or fails to comply with the plan, the Director may issue a cease and desist order in accordance with section 1341 and impose civil money penalties in accordance with section 1345.
(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 establish a deadline for an enterprise to submit a housing plan to the Director, which may not be more than 45 days after the enterprise is provided notice. 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 15 days after such disapproval, or such longer period that the Director determines is in the public interest.
(7)

Cease and desist orders; civil money penalties.—
Solely with respect to the housing goals established under sections 1332(a) and 1333(a)(1), if the Director requires an enterprise to submit a housing plan under this subsection and the enterprise refuses to submit such a plan, submits an unacceptable plan, or fails to comply with the plan, the Director may issue a cease and desist order in accordance with section 1341, impose civil money penalties in accordance with section 1345, exercise other appropriate enforcement authority or seek other appropriate actions.
SEC. 1337.
[12 U.S.C. 4567]

AFFORDABLE HOUSING ALLOCATIONS.
(a)

Set Aside and Allocation of Amounts by Enterprises.—
Subject to subsection (b), in each fiscal year—
(1)
the Federal Home Loan Mortgage Corporation shall—
(A)
set aside an amount equal to 4.2 basis points for each dollar of the unpaid principal balance of its total new business purchases; and
(B)
allocate or otherwise transfer—
(i)
65 percent of such amounts to the Secretary of Housing and Urban Development to fund the Housing Trust Fund established under section 1338; and
(ii)
35 percent of such amounts to fund the Capital Magnet Fund established pursuant to section 1339; and
(2)
the Federal National Mortgage Association shall—
(A)
set aside an amount equal to 4.2 basis points for each dollar of unpaid principal balance of its total new business purchases; and
(B)
allocate or otherwise transfer—
(i)
65 percent of such amounts to the Secretary of Housing and Urban Development to fund the Housing Trust Fund established under section 1338; and
(ii)
35 percent of such amounts to fund the Capital Magnet Fund established pursuant to section 1339.
(b)

Suspension of Contributions.—
The Director shall temporarily suspend allocations under subsection (a) by an enterprise upon a finding by the Director that such allocations—
(1)
are contributing, or would contribute, to the financial instability of the enterprise;
(2)
are causing, or would cause, the enterprise to be classified as undercapitalized; or
(3)
are preventing, or would prevent, the enterprise from successfully completing a capital restoration plan under section 1369C.
(c)

Prohibition of Pass-Through of Cost of Allocations.—
The Director shall, by regulation, prohibit each enterprise from redirecting the costs of any allocation required under this section, through increased charges or fees, or decreased premiums, or in any other manner, to the originators of mortgages purchased or securitized by the enterprise.
(d)

Enforcement of Requirements on Enterprise.—
Compliance by the enterprises with the requirements under this section shall be enforceable under subpart C. Any reference in such subpart to this part or to an order, rule, or regulation under this part specifically includes this section and any order, rule, or regulation under this section.
(e)

Required Amount for HOPE Reserve Fund.—
Of the aggregate amount allocated under subsection (a), 25 percent shall be deposited into a fund established in the Treasury of the United States by the Secretary of the Treasury for such purpose.
(f)

Limitation.—
No funds under this title may be used in conjunction with property taken by eminent domain, unless eminent domain is employed only for a public use, except that, for purposes of this section, public use shall not be construed to include economic development that primarily benefits any private entity.
SEC. 1338.
[12 U.S.C. 4568]

HOUSING TRUST FUND.
(a)

Establishment and Purpose.—
(1)

In general.—
The Secretary of Housing and Urban Development (in this section referred to as the “Secretary”) shall establish and manage a Housing Trust Fund, which shall be funded with amounts allocated by the enterprises under section 1337 and any amounts as are or may be appropriated, transferred, or credited to such Housing Trust Fund under any other provisions of law. The purpose of the Housing Trust Fund under this section is to provide grants to States (as such term is defined in section 1303) for use—
(A)
to increase and preserve the supply of rental housing for extremely low- and very low-income families, including homeless families; and
(B)
to increase homeownership for extremely low- and very low-income families.
(2)

Federal assistance.—
For purposes of the application of Federal civil rights laws, all assistance provided from the Housing Trust Fund shall be considered Federal financial assistance.
(b)

Allocations for HOPE Bond Payments.—
(1)

In general.—
Notwithstanding subsection (c), to help address the mortgage crisis, of the amounts allocated pursuant to clauses (i) and (ii) of section 1337(a)(1)(B) and clauses (i) and (ii) of section 1337(a)(2)(B) in excess of amounts described in section 1337(e)—
(A)
100 percent of such excess shall be used to reimburse the Treasury for payments made pursuant to section 257(w)(1)(C) of the National Housing Act in calendar year 2009;
(B)
50 percent of such excess shall be used to reimburse the Treasury for such payments in calendar year 2010; and
(C)
25 percent of such excess shall be used to reimburse the Treasury for such payments in calendar year 2011.
(2)

Excess funds.—
At the termination of the HOPE for Homeowners Program established under section 257 of the National Housing Act, if amounts used to reimburse the Treasury under paragraph (1) exceed the total net cost to the Government of the HOPE for Homeowners Program, such amounts shall be used for their original purpose, as described in paragraphs (1)(B) and (2)(B) of section 1337(a).
(3)

Treasury fund.—
The amounts referred to in subparagraphs (A) through (C) of paragraph (1) shall be deposited into a fund established in the Treasury of the United States by the Secretary of the Treasury for such purpose.
(c)

Allocation for Housing Trust Fund in Fiscal Year 2010 and Subsequent Years.—
(1)

In general.—
Except as provided in subsection (b), the Secretary shall distribute the amounts allocated for the Housing Trust Fund under this section to provide affordable housing as described in this subsection.
(2)

Permissible designees.—
A State receiving grant amounts under this subsection may designate a State housing finance agency, housing and community development entity, tribally designated housing entity (as such term is defined in section 4 of the Native American Housing Assistance and Self-Determination Act of 199746 (25 U.S.C. 4103)), or any other qualified instrumentality of the State to receive such grant amounts.
^{46}
Probably should refer to the Native American Housing Assistance and Self-Determination Act of 1996.
(3)

Distribution to states by needs-based formula.—
(A)

In general.—
The Secretary shall, by regulation, establish a formula within 12 months of the date of enactment of the Federal Housing Finance Regulatory Reform Act of 2008, to distribute amounts made available under this subsection to each State to provide affordable housing to extremely low- and very low-income households.
(B)

Basis for formula.—
The formula required under subparagraph (A) shall include the following:
(i)
The ratio of the shortage of standard rental units both affordable and available to extremely low-income renter households in the State to the aggregate shortage of standard rental units both affordable and available to extremely low-income renter households in all the States.
(ii)
The ratio of the shortage of standard rental units both affordable and available to very low-income renter households in the State to the aggregate shortage of standard rental units both affordable and available to very low-income renter households in all the States.
(iii)
The ratio of extremely low-income renter households in the State living with either (I) incomplete kitchen or plumbing facilities, (II) more than 1 person per room, or (III) paying more than 50 percent of income for housing costs, to the aggregate number of extremely low-income renter households living with either (IV) incomplete kitchen or plumbing facilities, (V) more than 1 person per room, or (VI) paying more than 50 percent of income for housing costs in all the States.
(iv)
The ratio of very low-income renter households in the State paying more than 50 percent of income on rent relative to the aggregate number of very low-income renter households paying more than 50 percent of income on rent in all the States.
(v)
The resulting sum calculated from the factors described in clauses (i) through (iv) shall be multiplied by the relative cost of construction in the State. For purposes of this subclause 47, the term “cost of construction”—
^{47}
So in law.
(I)
means the cost of construction or building rehabilitation in the State relative to the national cost of construction or building rehabilitation; and
(II)
shall be calculated such that values higher than 1.0 indicate that the State's construction costs are higher than the national average, a value of 1.0 indicates that the State's construction costs are exactly the same as the national average, and values lower than 1.0 indicate that the State's cost of construction are lower than the national average.
(C)

Priority.—
The formula required under subparagraph (A) shall give priority emphasis and consideration to the factor described in subparagraph (B)(i).
(4)

Allocation of grant amounts.—
(A)

Notice.—
Not later than 60 days after the date that the Secretary determines the formula amounts described in paragraph (3), the Secretary shall caused 48 to be published in the Federal Register a notice that such amounts shall be so available.
^{48}
So in law.
(B)

Grant amount.—
In each fiscal year other than fiscal year 2009, the Secretary shall make a grant to each State in an amount that is equal to the formula amount determined under paragraph (3) for that State.
(C)

Minimum state allocations.—
If the formula amount determined under paragraph (3) for a fiscal year would allocate less than $3,000,000 to any of the 50 States of the United States or the District of Columbia, the allocation for such State of the United States or the District of Columbia shall be $3,000,000, and the increase shall be deducted pro rata from the allocations made to all other of the States (as such term is defined in section 1303).
(5)

Allocation plans required.—
(A)

In general.—
For each year that a State or State designated entity receives a grant under this subsection, the State or State designated entity shall establish an allocation plan. Such plan shall—
(i)
set forth a plan for the distribution of grant amounts received by the State or State designated entity for such year;
(ii)
be based on priority housing needs, as determined by the State or State designated entity in accordance with the regulations established under subsection (g)(2)(D);
(iii)
comply with paragraph (6); and
(iv)
include performance goals that comply with the requirements established by the Secretary pursuant to subsection (g)(2).
(B)

Establishment.—
In establishing an allocation plan under this paragraph, a State or State designated entity shall—
(i)
notify the public of the establishment of the plan;
(ii)
provide an opportunity for public comments regarding the plan;
(iii)
consider any public comments received regarding the plan; and
(iv)
make the completed plan available to the public.
(C)

Contents.—
An allocation plan of a State or State designated entity under this paragraph shall set forth the requirements for eligible recipients under paragraph (8) to apply for such grant amounts, including a requirement that each such application include—
(i)
a description of the eligible activities to be conducted using such assistance; and
(ii)
a certification by the eligible recipient applying for such assistance that any housing units assisted with such assistance will comply with the requirements under this section.
(6)

Selection of activities funded using housing trust fund grant amounts.—
Grant amounts received by a State or State designated entity under this subsection may be used, or committed for use, only for activities that—
(A)
are eligible under paragraph (7) for such use;
(B)
comply with the applicable allocation plan of the State or State designated entity under paragraph (5); and
(C)
are selected for funding by the State or State designated entity in accordance with the process and criteria for such selection established pursuant to subsection (g)(2)(D).
(7)

Eligible activities.—
Grant amounts allocated to a State or State designated entity under this subsection shall be eligible for use, or for commitment for use, only for assistance for—
(A)
the production, preservation, and rehabilitation of rental housing, including housing under the programs identified in section 1335(a)(2)(B) and for operating costs, except that not less than 75 percent of such grant amounts shall be used for the benefit only of extremely low-income families or families with incomes at or below the poverty line (as such term is defined in section 673 of the Omnibus Budget Reconciliation Act of 1981 (42 U.S.C. 9902), including any revision required by such section) applicable to a family of the size involved, and not more than 25 percent for the benefit only of very low-income families; and
(B)
the production, preservation, and rehabilitation of housing for homeownership, including such forms as down payment assistance, closing cost assistance, and assistance for interest rate buy-downs, that—
(i)
is available for purchase only for use as a principal residence by families that qualify both as—
(I)
extremely low- and very low-income families at the times described in subparagraphs (A) through (C) of section 215(b)(2) of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12745(b)(2)); and
(II)
first-time homebuyers, as such term is defined in section 104 of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12704), except that any reference in such section to assistance under title II of such Act shall for purposes of this subsection be considered to refer to assistance from affordable housing fund grant amounts;
(ii)
has an initial purchase price that meets the requirements of section 215(b)(1) of the Cranston-Gonzalez National Affordable Housing Act;
(iii)
is subject to the same resale restrictions established under section 215(b)(3) of the Cranston-Gonzalez National Affordable Housing Act and applicable to the participating jurisdiction that is the State in which such housing is located; and
(iv)
is made available for purchase only by, or in the case of assistance under this subsection, is made available only to homebuyers who have, before purchase completed a program of independent financial education and counseling from an eligible organization that meets the requirements of section 13249 of the Federal Housing Finance Regulatory Reform Act of 2008.
^{49}
So in law. Probably should refer to section 1132 of such Act.
(8)

Tenant protections and public participation.—
All amounts from the Trust Fund shall be allocated in accordance with, and any eligible activities carried out in whole or in part with grant amounts under this subtitle (including housing provided with such grant amounts) shall comply with and be operated in compliance with—
(A)
laws relating to tenant protections and tenant rights to participate in decision making regarding their residences;
(B)
laws requiring public participation, including laws relating to Consolidated Plans, Qualified Allocation Plans, and Public Housing Agency Plans; and
(C)
fair housing laws and laws regarding accessibility in federally assisted housing, including section 504 of the Rehabilitation Act of 1973.
(9)

Eligible recipients.—
Grant amounts allocated to a State or State designated entity under this subsection may be provided only to a recipient that is an organization, agency, or other entity (including a for-profit entity or a nonprofit entity) that—
(A)
has demonstrated experience and capacity to conduct an eligible activity under paragraph (7), as evidenced by its ability to—
(i)
own, construct or rehabilitate, manage, and operate an affordable multifamily rental housing development;
(ii)
design, construct or rehabilitate, and market affordable housing for homeownership; or
(iii)
provide forms of assistance, such as down payments, closing costs, or interest rate buy-downs for purchasers;
(B)
demonstrates the ability and financial capacity to undertake, comply, and manage the eligible activity;
(C)
demonstrates its familiarity with the requirements of any other Federal, State, or local housing program that will be used in conjunction with such grant amounts to ensure compliance with all applicable requirements and regulations of such programs; and
(D)
makes such assurances to the State or State designated entity as the Secretary shall, by regulation, require to ensure that the recipient will comply with the requirements of this subsection during the entire period that begins upon selection of the recipient to receive such grant amounts and ending upon the conclusion of all activities under paragraph (8) that are engaged in by the recipient and funded with such grant amounts.
(10)

Limitations on use.—
(A)

Required amount for homeownership activities.—
Of the aggregate amount allocated to a State or State designated entity under this subsection not more than 10 percent shall be used for activities under subparagraph (B) of paragraph (7).
(B)

Deadline for commitment or use.—
Grant amounts allocated to a State or State designated entity under this subsection shall be used or committed for use within 2 years of the date that such grant amounts are made available to the State or State designated entity. The Secretary shall recapture any such amounts not so used or committed for use and reallocate such amounts under this subsection in the first year after such recapture.
(C)

Use of returns.—
The Secretary shall, by regulation, provide that any return on a loan or other investment of any grant amount used by a State or State designated entity to provide a loan under this subsection shall be treated, for purposes of availability to and use by the State or State designated entity, as a grant amount authorized under this subsection.
(D)

Prohibited uses.—
The Secretary shall, by regulation—
(i)
set forth prohibited uses of grant amounts allocated under this subsection, which shall include use for—
(I)
political activities;
(II)
advocacy;
(III)
lobbying, whether directly or through other parties;
(IV)
counseling services;
(V)
travel expenses; and
(VI)
preparing or providing advice on tax returns;
and for the purposes of this subparagraph, the prohibited use of funds for political activities includes influencing the selection, nomination, election, or appointment of one or more candidates to any Federal, State or local office as codified in section 501 of the Internal Revenue Code of 1986 (26 U.S.C. 501);
(ii)
provide that, except as provided in clause (iii), grant amounts of a State or State designated entity may not be used for administrative, outreach, or other costs of—
(I)
the State or State designated entity; or
(II)
any other recipient of such grant amounts; and
(iii)
limit the amount of any grant amounts for a year that may be used by the State or State designated entity for administrative costs of carrying out the program required under this subsection, including home ownership counseling, to a percentage of such grant amounts of the State or State designated entity for such year, which may not exceed 10 percent.
(E)

Prohibition of consideration of use for meeting housing goals or duty to serve.—
In determining compliance with the housing goals under this subpart and the duty to serve underserved markets under section 1335, the Director may not consider any grant amounts used under this section for eligible activities under paragraph (7). The Director shall give credit toward the achievement of such housing goals and such duty to serve underserved markets to purchases by the enterprises of mortgages for housing that receives funding from such grant amounts, but only to the extent that such purchases by the enterprises are funded other than with such grant amounts.
(d)

Reduction for Failure to Obtain Return of Misused Funds.—
If in any year a State or State designated entity fails to obtain reimbursement or return of the full amount required under subsection (e)(1)(B) to be reimbursed or returned to the State or State designated entity during such year—
(1)
except as provided in paragraph (2)—
(A)
the amount of the grant for the State or State designated entity for the succeeding year, as determined pursuant to this section, shall be reduced by the amount by which such amounts required to be reimbursed or returned exceed the amount actually reimbursed or returned; and
(B)
the amount of the grant for the succeeding year for each other State or State designated entity whose grant is not reduced pursuant to subparagraph (A) shall be increased by the amount determined by applying the formula established pursuant to this section to the total amount of all reductions for all State or State designated entities for such year pursuant to subparagraph (A); or
(2)
in any case in which such failure to obtain reimbursement or return occurs during a year immediately preceding a year in which grants under this section will not be made, the State or State designated entity shall pay to the Secretary for reallocation among the other grantees an amount equal to the amount of the reduction for the entity that would otherwise apply under paragraph (1)(A).
(e)

Accountability of Recipients and Grantees.—
(1)

Recipients.—
(A)

Tracking of funds.—
The Secretary shall—
(i)
require each State or State designated entity to develop and maintain a system to ensure that each recipient of assistance under this section uses such amounts in accordance with this section, the regulations issued under this section, and any requirements or conditions under which such amounts were provided; and
(ii)
establish minimum requirements for agreements, between the State or State designated entity and recipients, regarding assistance under this section, which shall include—
(I)
appropriate periodic financial and project reporting, record retention, and audit requirements for the duration of the assistance to the recipient to ensure compliance with the limitations and requirements of this section and the regulations under this section; and
(II)
any other requirements that the Secretary determines are necessary to ensure appropriate administration and compliance.
(B)

Misuse of funds.—
(i)

Reimbursement requirement.—
If any recipient of assistance under this section is determined, in accordance with clause (ii), to have used any such amounts in a manner that is materially in violation of this section, the regulations issued under this section, or any requirements or conditions under which such amounts were provided, the State or State designated entity shall require that, within 12 months after the determination of such misuse, the recipient shall reimburse the State or State designated entity for such misused amounts and return to the State or State designated entity any such amounts that remain unused or uncommitted for use. The remedies under this clause are in addition to any other remedies that may be available under law.
(ii)

Determination.—
A determination is made in accordance with this clause if the determination is made by the Secretary or made by the State or State designated entity, provided that—
(I)
the State or State designated entity provides notification of the determination to the Secretary for review, in the discretion of the Secretary, of the determination; and
(II)
the Secretary does not subsequently reverse the determination.
(2)

Grantees.—
(A)

Report.—
(i)

In general.—
The Secretary shall require each State or State designated entity receiving grant amounts in any given year under this section to submit a report, for such year, to the Secretary that—
(I)
describes the activities funded under this section during such year with such grant amounts; and
(II)50
the manner in which the State or State designated entity complied during such year with any allocation plan established pursuant to subsection (c).
^{50}
So in law.
(ii)

Public availability.—
The Secretary shall make such reports pursuant to this subparagraph publicly available.
(B)

Misuse of funds.—
If the Secretary determines, after reasonable notice and opportunity for hearing, that a State or State designated entity has failed to comply substantially with any provision of this section, and until the Secretary is satisfied that there is no longer any such failure to comply, the Secretary shall—
(i)
reduce the amount of assistance under this section to the State or State designated entity by an amount equal to the amount of grant amounts which were not used in accordance with this section;
(ii)
require the State or State designated entity to repay the Secretary any amount of the grant which was not used in accordance with this section;
(iii)
limit the availability of assistance under this section to the State or State designated entity to activities or recipients not affected by such failure to comply; or
(iv)
terminate any assistance under this section to the State or State designated entity.
(f)

Definitions.—
For purposes of this section, the following definitions shall apply:
(1)

Extremely low-income renter household.—
The term “extremely low-income renter household” means a household whose income is not in excess of 30 percent of the area median income, with adjustments for smaller and larger families, as determined by the Secretary.
(2)

Recipient.—
The term “recipient” means an individual or entity that receives assistance from a State or State designated entity from amounts made available to the State or State designated entity under this section.
(3)

Shortage of standard rental units both affordable and available to extremely low-income renter households.—
(A)

In general.—
The term “shortage of standard rental units both affordable and available to extremely low-income renter households” means for any State or other geographical area the gap between—
(i)
the number of units with complete plumbing and kitchen facilities with a rent that is 30 percent or less of 30 percent of the adjusted area median income as determined by the Secretary that are occupied by extremely low-income renter households or are vacant for rent; and
(ii)
the number of extremely low-income renter households.
(B)

Rule of construction.—
If the number of units described in subparagraph (A)(i) exceeds the number of extremely low-income households as described in subparagraph (A)(ii), there is no shortage.
(4)

Shortage of standard rental units both affordable and available to very low-income renter households.—
(A)

In general.—
The term “shortage of standard rental units both affordable and available to very low-income renter households” means for any State or other geographical area the gap between—
(i)
the number of units with complete plumbing and kitchen facilities with a rent that is 30 percent or less of 50 percent of the adjusted area median income as determined by the Secretary that are occupied by very low-income renter households or are vacant for rent; and
(ii)
the number of very low-income renter households.
(B)

Rule of construction.—
If the number of units described in subparagraph (A)(i) exceeds the number of very low-income households as described in subparagraph (A)(ii), there is no shortage.
(5)

Very low-income family.—
The term “very low-income family” has the meaning given such term in section 1303, except that such term includes any family that resides in a rural area that has an income that does not exceed the poverty line (as such term is defined in section 673(2) of the Omnibus Budget Reconciliation Act of 1981 (42 U.S.C. 9902(2)), including any revision required by such section) applicable to a family of the size involved.
(6)

Very low-income renter households.—
The term “very low-income renter households” means a household whose income is in excess of 30 percent but not greater than 50 percent of the area median income, with adjustments for smaller and larger families, as determined by the Secretary.
(g)

Regulations.—
(1)

In general.—
The Secretary shall issue regulations to carry out this section.
(2)

Required contents.—
The regulations issued under this subsection shall include—
(A)
a requirement that the Secretary ensure that the use of grant amounts under this section by States or State designated entities is audited not less than annually to ensure compliance with this section;
(B)
authority for the Secretary to audit, provide for an audit, or otherwise verify a State or State designated entity's activities to ensure compliance with this section;
(C)
a requirement that, for the purposes of subparagraphs (A) and (B), any financial statement submitted by a grantee or recipient to the Secretary shall be reviewed by an independent certified public accountant in accordance with Statements on Standards for Accounting and Review Services, issued by the American Institute of Certified Public Accountants;
(D)
requirements for a process for application to, and selection by, each State or State designated entity for activities meeting the State or State designated entity's priority housing needs to be funded with grant amounts under this section, which shall provide for priority in funding to be based upon—
(i)
geographic diversity;
(ii)
ability to obligate amounts and undertake activities so funded in a timely manner;
(iii)
in the case of rental housing projects under subsection (c)(7)(A), the extent to which rents for units in the project funded are affordable, especially for extremely low-income families;
(iv)
in the case of rental housing projects under subsection (c)(7)(A), the extent of the duration for which such rents will remain affordable;
(v)
the extent to which the application makes use of other funding sources; and
(vi)
the merits of an applicant's proposed eligible activity;
(E)
requirements to ensure that grant amounts provided to a State or State designated entity under this section that are used for rental housing under subsection (c)(7)(A) are used only for the benefit of extremely low- and very low-income families; and
(F)
requirements and standards for establishment, by a State or State designated entity, for use of grant amounts in 2009 and subsequent years of performance goals, benchmarks, and timetables for the production, preservation, and rehabilitation of affordable rental and homeownership housing with such grant amounts.
(h)

Affordable Housing Trust Fund.—
If, after the date of enactment of the Federal Housing Finance Regulatory Reform Act of 2008, in any year, there is enacted any provision of Federal law establishing an affordable housing trust fund other than under this title for use only for grants to provide affordable rental housing and affordable homeownership opportunities, and the subsequent year is a year referred to in subsection (c), the Secretary shall in such subsequent year and any remaining years referred to in subsection (c) transfer to such affordable housing trust fund the aggregate amount allocated pursuant to subsection (c) in such year. Notwithstanding any other provision of law, assistance provided using amounts transferred to such affordable housing trust fund pursuant to this subsection may not be used for any of the activities specified in clauses (i) through (vi) of subsection (c)(9)(D).
(i)

Funding Accountability and Transparency.—
Any grant under this section to a grantee by a State or State designated entity, any assistance provided to a recipient by a State or State designated entity, and any grant, award, or other assistance from an affordable housing trust fund referred to in subsection (h) shall be considered a Federal award for purposes of the Federal Funding Accountability and Transparency Act of 2006 (31 U.S.C. 6101 note). Upon the request of the Director of the Office of Management and Budget, the Secretary shall obtain and provide such information regarding any such grants, assistance, and awards as the Director of the Office of Management and Budget considers necessary to comply with the requirements of such Act, as applicable, pursuant to the preceding sentence.
SEC. 1339.
[12 U.S.C. 4569]

CAPITAL MAGNET FUND.
(a)

Establishment.—
There is established in the Treasury of the United States a trust fund to be known as the Capital Magnet Fund, which shall be a special account within the Community Development Financial Institutions Fund.
(b)

Deposits to Trust Fund.—
The Capital Magnet Fund shall consist of—
(1)
any amounts transferred to the Fund pursuant to section 1337; and
(2)
any amounts as are or may be appropriated, transferred, or credited to such Fund under any other provisions of law.
(c)

Expenditures From Trust Fund.—
Amounts in the Capital Magnet Fund shall be available to the Secretary of the Treasury to carry out a competitive grant program to attract private capital for and increase investment in—
(1)
the development, preservation, rehabilitation, or purchase of affordable housing for primarily extremely low-, very low-, and low-income families; and
(2)
economic development activities or community service facilities, such as day care centers, workforce development centers, and health care clinics, which in conjunction with affordable housing activities implement a concerted strategy to stabilize or revitalize a low-income area or underserved rural area.
(d)

Federal Assistance.—
For purposes of the application of Federal civil rights laws, all assistance provided using amounts in the Capital Magnet Fund shall be considered Federal financial assistance.
(e)

Eligible Grantees.—
A grant under this section may be made, pursuant to such requirements as the Secretary of the Treasury shall establish for experience and success in attracting private financing and carrying out the types of activities proposed under the application of the grantee, only to—
(1)
a Treasury certified community development financial institution; or
(2)
a nonprofit organization having as 1 of its principal purposes the development or management of affordable housing.
(f)

Eligible Uses.—
Grant amounts awarded from the Capital Magnet Fund pursuant to this section may be used for the purposes described in paragraphs (1) and (2) of subsection (c), including for the following uses:
(1)
To provide loan loss reserves.
(2)
To capitalize a revolving loan fund.
(3)
To capitalize an affordable housing fund.
(4)
To capitalize a fund to support activities described in subsection (c)(2).
(5)
For risk-sharing loans.
(g)

Applications.—
(1)

In general.—
The Secretary of the Treasury shall provide, in a competitive application process established by regulation, for eligible grantees under subsection (e) to submit applications for Capital Magnet Fund grants to the Secretary at such time and in such manner as the Secretary shall determine.
(2)

Content of application.—
The application required under paragraph (1) shall include a detailed description of—
(A)
the types of affordable housing, economic, and community revitalization projects that support or sustain residents of an affordable housing project funded by a grant under this section for which such grant amounts would be used, including the proposed use of eligible grants as authorized under this section;
(B)
the types, sources, and amounts of other funding for such projects; and
(C)
the expected time frame of any grant used for such project.
(h)

Grant Limitation.—
(1)

In general.—
Any 1 eligible grantee and its subsidiaries and affiliates may not be awarded more than 15 percent of the aggregate funds available for grants during any year from the Capital Magnet Fund.
(2)

Geographic diversity.—
(A)

Goal.—
The Secretary of the Treasury shall seek to fund activities in geographically diverse areas of economic distress, including metropolitan and underserved rural areas in every State.
(B)

Diversity defined.—
For purposes of this paragraph, geographic diversity includes those areas that meet objective criteria of economic distress developed by the Secretary of the Treasury, which may include—
(i)
the percentage of low-income families or the extent of poverty;
(ii)
the rate of unemployment or underemployment;
(iii)
extent of blight and disinvestment;
(iv)
projects that target extremely low-, very low-, and low-income families in or outside a designated economic distress area; or
(v)
any other criteria designated by the Secretary of the Treasury.
(3)

Leverage of funds.—
Each grant from the Capital Magnet Fund awarded under this section shall be reasonably expected to result in eligible housing, or economic and community development projects that support or sustain an affordable housing project funded by a grant under this section whose aggregate costs total at least 10 times the grant amount.
(4)

Commitment for use deadline.—
Amounts made available for grants under this section shall be committed for use within 2 years of the date of such allocation. The Secretary of the Treasury shall recapture into the Capital Magnet Fund any amounts not so used or committed for use and allocate such amounts in the first year after such recapture.
(5)

Prohibited uses.—
The Secretary shall, by regulation, set forth prohibited uses of grant amounts awarded under this section, which shall include use for—
(A)
political activities;
(B)
advocacy;
(C)
lobbying, whether directly or through other parties;
(D)
counseling services;
(E)
travel expenses; and
(F)
preparing or providing advice on tax returns;
and for the purposes of this paragraph, the prohibited use of funds for political activities includes influencing the selection, nomination, election, or appointment of one or more candidates to any Federal, State or local office as codified in section §50151 of the Internal Revenue Code of 1986 (26 U.S.C. 501).
^{51}
So in law.
(6)

Additional lobbying restrictions.—
No assistance or amounts made available under this section may be expended by an eligible grantee to pay any person to influence or attempt to influence any agency, elected official, officer or employee of a State or local government in connection with the making, award, extension, continuation, renewal, amendment, or modification of any State or local government contract, grant, loan, or cooperative agreement as such terms are defined in section 1352 of title 31, United States Code.
(7)

Prohibition of consideration of use for meeting housing goals or duty to serve.—
In determining the compliance of the enterprises with the housing goals under this section and the duty to serve underserved markets under section 1335, the Director of the Federal Housing Finance Agency may not consider any Capital Magnet Fund amounts used under this section for eligible activities under subsection (f). The Director of the Federal Housing Finance Agency shall give credit toward the achievement of such housing goals and such duty to serve underserved markets to purchases by the enterprises of mortgages for housing that receives funding from Capital Magnet Fund grant amounts, but only to the extent that such purchases by the enterprises are funded other than with such grant amounts.
(8)

Accountability of recipients and grantees.—
(A)

Tracking of funds.—
The Secretary of the Treasury shall—
(i)
require each grantee to develop and maintain a system to ensure that each recipient of assistance from the Capital Magnet Fund uses such amounts in accordance with this section, the regulations issued under this section, and any requirements or conditions under which such amounts were provided; and
(ii)
establish minimum requirements for agreements, between the grantee and the Capital Magnet Fund, regarding assistance from the Capital Magnet Fund, which shall include—
(I)
appropriate periodic financial and project reporting, record retention, and audit requirements for the duration of the grant to the recipient to ensure compliance with the limitations and requirements of this section and the regulations under this section; and
(II)
any other requirements that the Secretary determines are necessary to ensure appropriate grant administration and compliance.
(B)

Misuse of funds.—
If the Secretary of the Treasury determines, after reasonable notice and opportunity for hearing, that a grantee has failed to comply substantially with any provision of this section and until the Secretary is satisfied that there is no longer any such failure to comply, the Secretary shall—
(i)
reduce the amount of assistance under this section to the grantee by an amount equal to the amount of Capital Magnet Fund grant amounts which were not used in accordance with this section;
(ii)
require the grantee to repay the Secretary any amount of the Capital Magnet Fund grant amounts which were not used in accordance with this section;
(iii)
limit the availability of assistance under this section to the grantee to activities or recipients not affected by such failure to comply; or
(iv)
terminate any assistance under this section to the grantee.
(i)

Periodic Reports.—
(1)

In general.—
The Secretary of the Treasury shall submit a report, on a periodic basis, to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives describing the activities to be funded under this section.
(2)

Reports available to public.—
The Secretary of the Treasury shall make the reports required under paragraph (1) publicly available.
(j)

Regulations.—
(1)

In general.—
The Secretary of the Treasury shall issue regulations to carry out this section.
(2)

Required contents.—
The regulations issued under this subsection shall include—
(A)
authority for the Secretary to audit, provide for an audit, or otherwise verify an enterprise's activities, to ensure compliance with this section;
(B)
a requirement that the Secretary ensure that the allocation of each enterprise is audited not less than annually to ensure compliance with this section;
(C)
a requirement that, for the purposes of subparagraphs (A) and (B), any financial statement submitted by a grantee to the Secretary shall be reviewed by an independent certified public accountant in accordance with Statements on Standards for Accounting and Review Services, issued by the American Institute of Certified Public Accountants; and
(D)
requirements for a process for application to, and selection by, the Secretary for activities to be funded with amounts from the Capital Magnet Fund, which shall provide that—
(i)
funds be fairly distributed to urban, suburban, and rural areas; and
(ii)
selection shall be based upon specific criteria, including a prioritization of funding based upon—
(I)
the ability to use such funds to generate additional investments;
(II)
affordable housing need (taking into account the distinct needs of different regions of the country); and
(III)
ability to obligate amounts and undertake activities so funded in a timely manner.
Subpart C—

Enforcement
SEC. 1341.
[12 U.S.C. 4581]

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 submit a report under section 132752, following a notice of such failure, an opportunity for comment by the enterprise, and a final determination by the Director;
^{52}
Section 1327 was repealed by section 1104(b) of Public Law 110–289, 122 Stat. 2667.
(2)
the enterprise has failed to submit the information required under subsection (m) or (n) of section 309 of the Federal National Mortgage Association Charter Act, or subsection (e) or (f) of section 307 of the Federal Home Loan Mortgage Corporation Act;
(3)
solely with respect to the housing goals established under sections 1332(a) and 1333(a)(1), the enterprise has failed to submit a housing plan that complies with section 1336(c) within the applicable period; or
(4)
solely with respect to the housing goals established under sections 1332(a) and 1333(a)(1), 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)
submit a report under section 132753;
^{53}
Section 1327 was repealed by section 1104(b) of Public Law 110–289, 122 Stat. 2667.
(B)
solely with respect to the housing goals established under sections 1332(a) and 1333(a)(1), submit a housing plan in compliance with section 1336(c);
(C)
solely with respect to the housing goals established under sections 1332(a) and 1333(a)(1), comply with the housing plan in compliance with section 1336(c); or
(D)
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 or otherwise, as provided in this subpart.
SEC. 1342.
[12 U.S.C. 4582]

HEARINGS.
(a)

Requirements.—
(1)

Venue and record.—
Any hearing under section 1341 or 1345 shall be held on the record and in the District of Columbia.
(2)

Timing.—
Any such hearing shall be fixed for a date not earlier than 30 days nor later than 60 days after service of the notice of charges under section 1341(b)(1) or determination to impose a penalty under section 1345(c)(1), unless an earlier or a later date is set by the hearing officer at the request of the enterprise served.
(3)

Procedure.—
Any such hearing shall be conducted in accordance with chapter 5 of title 5, United States Code.
(4)

Failure to appear.—
If the enterprise served fails to appear at the hearing through a duly authorized representative, such enterprise shall be deemed to have consented to the issuance of the cease-and-desist order or the imposition of the penalty for which the hearing is held.
(b)

Issuance of Order.—
(1)

In general.—
After any such hearing, and within 90 days after the enterprise has been notified that the case has been submitted to the Director for final decision, the Director shall render the decision (which shall include findings of fact upon which the decision is predicated) and shall issue and serve upon the enterprise an order or orders consistent with the provisions of this subpart.
(2)

Modification.—
Judicial review of any such order shall be exclusively as provided in section 1343. Unless such a petition for review is timely filed as provided in section 1343, and thereafter until the record in the proceeding has been filed as so provided, the Director may at any time, modify, terminate, or set aside any such order, upon such notice and in such manner as the Director considers proper. Upon such filing of the record, the Director may modify, terminate, or set aside any such order with permission of the court.
SEC. 1343.
[12 U.S.C. 4583]

JUDICIAL REVIEW.
(a)

Commencement.—
An enterprise that is a party to a proceeding under section 1341 or 1345 may obtain review of any final order issued under such section by filing in the United States Court of Appeals for the District of Columbia Circuit, within 30 days after the date of service of such order, a written petition praying that the order of the Director be modified, terminated, or set aside. The clerk of the court shall transmit a copy of the petition to the Director.
(b)

Filing of Record.—
Upon receiving a copy of a petition, the Director shall file in the court the record in the proceeding, as provided in section 2112 of title 28, United States Code.
(c)

Jurisdiction.—
Upon the filing of a petition, such court shall have jurisdiction, which upon the filing of the record by the Director shall (except as provided in the last sentence of section 1342(b)(2)) be exclusive, to affirm, modify, terminate, or set aside, in whole or in part, the order of the Director.
(d)

Review.—
Review of such proceedings shall be governed by chapter 7 of title 5, United States Code.
(e)

Order To Pay Penalty.—
Such court shall have the authority in any such review to order payment of any penalty imposed by the Director under this subpart.
(f)

No Automatic Stay.—
The commencement of proceedings for judicial review under this section shall not, unless specifically ordered by the court, operate as a stay of any order issued by the Director.
SEC. 1344.
[12 U.S.C. 4584]

ENFORCEMENT AND JURISDICTION.
(a)

Enforcement.—
The Secretary may request the Attorney General of the United States to bring an action 54 in the United States District Court for the District of Columbia for the enforcement of any effective notice or order issued under section 1341 or 1345. Such court shall have jurisdiction and power to order and require compliance herewith.
^{54}
Section 1130(e)(1) of Public Law 110–289 (122 Stat. 2711) attempted to amend section 1344(a) by striking “The Secretary may request the Attorney General of the United States to bring a civil action” and inserting “The Director may bring a civil action”. Such amendment was not carried out because the matter proposed to be struck does not appear.
(b)

Limitation on Jurisdiction.—
Except as otherwise provided in this subpart, no court shall have jurisdiction to affect, by injunction or otherwise, the issuance or enforcement of any notice or order under section 1341 or 1345, or to review, modify, suspend, terminate, or set aside any such notice or order.
SEC. 1345.
[12 U.S.C. 4585]

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)
submit a report under section 132755, following a notice of such failure, an opportunity for comment by the enterprise, and a final determination by the Director;
^{55}
Section 1327 was repealed by section 1104(b) of Public Law 110–289, 122 Stat. 2667.
(2)
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;
(3)
solely with respect to the housing goals established under sections 1332(a) and 1333(a)(1), submit a housing plan or perform its responsibilities under a remedial order issued pursuant to section 1336(c) within the required period; or
(4)
solely with respect to the housing goals established under sections 1332(a) and 1333(a)(1), 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 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 use any civil money penalties collected under this section to help fund the Housing Trust Fund established under section 1338.
SEC. 1346.
[12 U.S.C. 4586]

PUBLIC DISCLOSURE OF FINAL ORDERS AND AGREEMENTS.
(a)

In General.—
The Director shall make available to the public—
(1)
any written agreement or other written statement for which a violation may be redressed by the Director or any modification to or termination thereof, unless the Director, in the Secretary's 56 discretion, determines that public disclosure would be contrary to the public interest or determines under subsection (c) that public disclosure would seriously threaten the financial health or security of the enterprise;
^{56}
So in law.
(2)
any order that is issued with respect to any administrative enforcement proceeding initiated by the Director under this subpart and that has become final in accordance with sections 1342 and 1343; and
(3)
any modification to or termination of any final order made public pursuant to this subsection.
(b)

Hearings.—
All hearings with respect to any notice of charges issued by the Director shall be open to the public, unless the Director, in the Secretary's discretion, determines that holding an open hearing would be contrary to the public interest.
(c)

Delay of Public Disclosure Under Exceptional Circumstances.—
If the Director makes a determination in writing that the public disclosure of any final order pursuant to subsection (a) would seriously threaten the financial soundness of the enterprise, the Director may delay the public disclosure of such order for a reasonable time.
(d)

Documents Filed Under Seal in Public Enforcement Hearings.—
The Director may file any document or part thereof under seal in any hearing under this subpart if the Director determines in writing that disclosure thereof would be contrary to the public interest.
(e)

Retention of Documents.—
The Director shall keep and maintain a record, for not less than 6 years, of all documents described in subsection (a) and all enforcement agreements and other supervisory actions and supporting documents issued with respect to or in connection with any enforcement proceeding initiated by the Director under this subpart.
(f)

Disclosures to Congress.—
This section may not be construed to authorize the withholding, or to prohibit the disclosure, of any information to the Congress or any committee or subcommittee thereof.
SEC. 1347.
[12 U.S.C. 4587]

NOTICE OF SERVICE.
Any service required or authorized to be made by the Director under this subpart may be made by registered mail or in such other manner reasonably calculated to give actual notice, as the Director may by regulation or otherwise provide.
SEC. 1348.
[12 U.S.C. 4588]

SUBPOENA AUTHORITY.
(a)

In General.—
In the course of or in connection with any administrative proceeding under this subpart, the Director shall have the authority—
(1)
to administer oaths and affirmations;
(2)
to take and preserve testimony under oath;
(3)
to issue subpoenas and subpoenas duces tecum; and
(4)
to revoke, quash, or modify subpoenas and subpoenas duces tecum issued by the Director.
(b)

Witnesses and Documents.—
The attendance of witnesses and the production of documents provided for in this section may be required from any place in any State at any designated place where such proceeding is being conducted.
(c)

Enforcement.—
The Director may bring an action or may request the Attorney General of the United States to bring an action in the United States district court for the judicial district in which such proceeding is being conducted, or where the witness resides or conducts business, or the United States District Court for the District of Columbia, for enforcement of any subpoena or subpoena duces tecum issued pursuant to this section. Such courts shall have jurisdiction and power to order and require compliance therewith.
(d)

Fees and Expenses.—
Witnesses subpoenaed under this section shall be paid the same fees and mileage that are paid witnesses in the district courts of the United States. Any court having jurisdiction of any proceeding instituted under this section by an enterprise may allow to any such party such reasonable expenses and attorneys fees as the court deems just and proper. Such expenses and fees shall be paid by the enterprise or from its assets.
PART 3—

MISCELLANEOUS PROVISIONS
SEC. 1351.

AMENDMENTS TO TITLE 5, UNITED STATES CODE.
(a)

Director at Level II of Executive Schedule.—
Section 5313 of title 5, United States Code, is amended by inserting at the end the following new item:
Director of the Office of Federal Housing Enterprise Oversight, Department of Housing and Urban Development.''.
(b)

Exclusion From Senior Executive Service.—
Section 3132(a)(1)(D) of title 5, United States Code, is amended by inserting “the Office of Federal Housing Enterprise Oversight of the Department of Housing and Urban Development,” after “Farm Credit Administration,”.
SEC. 1352.

PROHIBITION OF MERGER OF OFFICE.
Section 5 of the Department of Housing and Urban Development Act (42 U.S.C. 3534) is amended by adding at the end the following new subsection:
“(d)
Notwithstanding any other provision of this Act, the Secretary may not merge or consolidate the Office of Federal Housing Enterprise Oversight of the Department, or any of the functions or responsibilities of such Office, with any function or program administered by the Secretary.”
.
SEC. 1353.

PROTECTION OF CONFIDENTIAL INFORMATION.
Section 1905 of title 18, United States Code, is amended by inserting “any person acting on behalf of the Office of Federal Housing Enterprise Oversight,” after “or agency thereof,”.
SEC. 1354.
[12 U.S.C. 4601]

REVIEW OF UNDERWRITING GUIDELINES.
(a)

Study.—
Each of the enterprises shall conduct a study to review the underwriting guidelines of the enterprise. The studies shall examine—
(1)
the extent to which the underwriting guidelines prevent or inhibit the purchase or securitization of mortgages for housing located in mixed-use, urban center, and predominantly minority neighborhoods and for housing for low- and moderate-income families;
(2)
the standards employed by private mortgage insurers and the extent to which such standards inhibit the purchase and securitization by the enterprises of mortgages described in paragraph (1); and
(3)
the implications of implementing underwriting standards that—
(A)
establish a downpayment requirement for mortgagors of 5 percent or less;
(B)
allow the use of cash on hand as a source for downpayments; and
(C)
approve borrowers who have a credit history of delinquencies if the borrower can demonstrate a satisfactory credit history for at least the 12-month period ending on the date of the application for the mortgage.
(b)

Report.—
Not later than the expiration of the 1-year period beginning on the date of the enactment of this Act,57 each enterprise shall submit to the Secretary, the Committee on Banking, Finance and Urban Affairs of the House of Representatives 58, and the Committee on Banking, Housing, and Urban Affairs of the Senate a report regarding the study conducted by the enterprise under subsection (a). Each report shall include any recommendations of the enterprise for better meeting the housing needs of low- and moderate-income families.
^{57}
The date of enactment was October 28, 1992.
^{58}
Section 1(a) of Public Law 104–14, 109 Stat. 186, provides, in part, that “any reference in any provision of law enacted before January 4, 1995, to . . . the Committee on Banking, Finance and Urban Affairs of the House of Representatives shall be treated as referring to the Committee on Banking and Financial Services of the House of Representatives”. However, H. Res. 5, 107th Congress, agreed to on January 3, 2001, abolished the Committee on Banking and Financial Services and established the Committee on Financial Services, which has jurisdiction over many of the areas previously under the jurisdiction of the Committee on Banking and Financial Services.
SEC. 1355.
[12 U.S.C. 4602]

STUDIES OF EFFECTS OF PRIVATIZATION OF FNMA AND FHLMC.
(a)

In General.—
The Comptroller General of the United States, the Secretary of Housing and Urban Development, the Secretary of the Treasury, and the Director of the Congressional Budget Office shall each conduct and submit to the Committee on Banking, Finance and Urban Affairs of the House of Representatives 59 and the Committee on Banking, Housing, and Urban Affairs of the Senate, not later than the expiration of the 2-year period beginning on the date of the enactment of this Act,57 a study regarding the desirability and feasibility of repealing the Federal charters of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, eliminating any Federal sponsorship of the enterprises, and allowing the enterprises to continue to operate as fully private entities.
^{59}
See preceding footnote.
(b)

Requirements.—
Each study shall particularly examine the effects of such privatization on—
(1)
the requirements applicable to the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation under Federal law and the costs to the enterprises;
(2)
the cost of capital to the enterprises;
(3)
housing affordability and availability and the cost of homeownership;
(4)
the level of secondary mortgage market competition subsequently available in the private sector;
(5)
whether increased amounts of capital would be necessary for the enterprises to continue operation;
(6)
the secondary market for residential loans and the liquidity of such loans; and
(7)
any other factors that the Comptroller General, the Secretary of Housing and Urban Development, the Secretary of the Treasury, or the Director of the Congressional Budget Office deems appropriate to enable the Congress to evaluate the desirability and feasibility of privatization of the enterprises.
(c)

Information.—
The Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation shall provide full and prompt access to the Comptroller General, the Secretary of Housing and Urban Development, the Secretary of the Treasury, and the Director of the Congressional Budget Office to any books, records, and other information requested for the purposes of conducting the studies under this section.
(d)

Views of the FNMA and FHLMC.—
(1)

Consideration in studies.—
In conducting the studies under this section, the Comptroller General, the Secretary of Housing and Urban Development, the Secretary of the Treasury, and the Director of the Congressional Budget Office shall each consider the views of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation.
(2)

Direct report.—
The Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation may each report directly to the Committee on Banking, Finance and Urban Affairs of the House of Representatives 59 and the Committee on Banking, Housing, and Urban Affairs of the Senate on its own analysis of the desirability and feasibility of repealing the Federal charters of the enterprises, eliminating any Federal sponsorship, and allowing the enterprises to continue to operate as fully private entities.
SEC. 1356.
[12 U.S.C. 4603]

TRANSITION.
Before the expiration of the period ending 18 months after the appointment of the Director under section 1312, any rules and regulations promulgated before the date of the enactment of this Act by the Secretary pursuant to the Federal National Mortgage Association Charter Act or the Federal Home Loan Mortgage Corporation Act shall remain in effect unless modified, terminated, superseded, or revoked by operation of law or in accordance with law. Such rules and regulations shall terminate, effective upon the expiration of such period.
Subtitle B—

Required Capital Levels for Regulated Entities, Special Enforcement Powers, and Reviews of Assets and Liabilities
SEC. 1361.
[12 U.S.C. 4611]

RISK-BASED CAPITAL LEVELS FOR REGULATED ENTITIES.
(a)

In General.—
(1)

Enterprises.—
The Director shall, by regulation, establish risk-based capital requirements for the enterprises to ensure that the enterprises operate in a safe and sound manner, maintaining sufficient capital and reserves to support the risks that arise in the operations and management of the enterprises.
(2)

Federal home loan banks.—
The Director shall establish risk-based capital standards under section 6 of the Federal Home Loan Bank Act for the Federal Home Loan Banks.
(b)

No Limitation.—
Nothing in this section shall limit the authority of the Director to require other reports or undertakings, or take other action, in furtherance of the responsibilities of the Director under this Act.
SEC. 1362.
[12 U.S.C. 4612]

MINIMUM CAPITAL LEVELS.
(a)

Enterprises.—For 60
purposes of this subtitle, the minimum capital level for each enterprise shall be the sum of—
^{60}
So in law.
(1)
2.50 percent of the aggregate on-balance sheet assets of the enterprise, as determined in accordance with generally accepted accounting principles;
(2)
0.45 percent of the unpaid principal balance of outstanding mortgage-backed securities and substantially equivalent instruments issued or guaranteed by the enterprise that are not included in paragraph (1); and
(3)
0.45 percent of other off-balance sheet obligations of the enterprise not included in paragraph (2) (excluding commitments in excess of 50 percent of the average dollar amount of the commitments outstanding each quarter over the preceding 4 quarters), except that the Director shall adjust such percentage to reflect differences in the credit risk of such obligations in relation to the instruments included in paragraph (2).
(b)

Federal Home Loan Banks.—
For purposes of this subtitle, the minimum capital level for each Federal Home Loan Bank shall be the minimum capital required to be maintained to comply with the leverage requirement for the bank established under section 6(a)(2) of the Federal Home Loan Bank Act (12 U.S.C. 1426(a)(2)).
(c)

Establishment of Revised Minimum Capital Levels.—
Notwithstanding subsections (a) and (b) and notwithstanding the capital classifications of the regulated entities, the Director may, by regulations issued under section 1319G, establish a minimum capital level for the enterprises, for the Federal Home Loan Banks, or for both the enterprises and the banks, that is higher than the level specified in subsection (a) for the enterprises or the level specified in subsection (b) for the Federal Home Loan Banks, to the extent needed to ensure that the regulated entities operate in a safe and sound manner.
(d)

Authority To Require Temporary Increase.—
(1)

In general.—
Notwithstanding subsections (a) and (b) and any minimum capital level established pursuant to subsection (c), the Director may, by order, increase the minimum capital level for a regulated entity on a temporary basis, when the Director determines that such an increase is necessary and consistent with the prudential regulation and the safe and sound operations of a regulated entity.
(2)

Rescission.—
The Director shall rescind any temporary minimum capital level established under paragraph (1) when the Director determines that the circumstances or facts no longer justify the temporary minimum capital level.
(3)

Regulations required.—
The Director shall issue regulations establishing—
(A)
standards for the imposition of a temporary increase in minimum capital under paragraph (1);
(B)
the standards and procedures that the Director will use to make the determination referred to in paragraph (2); and
(C)
a reasonable time frame for periodic review of any temporary increase in minimum capital for the purpose of making the determination referred to in paragraph (2).
(e)

Authority To Establish Additional Capital and Reserve Requirements for Particular Purposes.—
The Director may, at any time by order or regulation, establish such capital or reserve requirements with respect to any product or activity of a regulated entity, as the Director considers appropriate to ensure that the regulated entity operates in a safe and sound manner, with sufficient capital and reserves to support the risks that arise in the operations and management of the regulated entity.
(f)

Periodic Review.—
The Director shall periodically review the amount of core capital maintained by the enterprises, the amount of capital retained by the Federal Home Loan Banks, and the minimum capital levels established for such regulated entities pursuant to this section.
SEC. 1363.
[12 U.S.C. 4613]

CRITICAL CAPITAL LEVELS.
(a)

Enterprises.—
For purposes of this subtitle, the critical capital level for each enterprise shall be the sum of—
(1)
1.25 percent of the aggregate on-balance sheet assets of the enterprise, as determined in accordance with generally accepted accounting principles;
(2)
0.25 percent of the unpaid principal balance of outstanding mortgage-backed securities and substantially equivalent instruments issued or guaranteed by the enterprise that are not included in paragraph (1); and
(3)
0.25 percent of other off-balance sheet obligations of the enterprise not included in paragraph (2) (excluding commitments in excess of 50 percent of the average dollar amount of the commitments outstanding each quarter over the preceding 4 quarters), except that the Director shall adjust such percentage to reflect differences in the credit risk of such obligations in relation to the instruments included in paragraph (2).
(b)

Federal Home Loan Banks.—
(1)

In general.—
For purposes of this subtitle, the critical capital level for each Federal Home Loan Bank shall be such amount of capital as the Director shall, by regulation, require.
(2)

Consideration of other critical capital levels.—
In establishing the critical capital level under paragraph (1) for the Federal Home Loan Banks, the Director shall take due consideration of the critical capital level established under subsection (a) for the enterprises, with such modifications as the Director determines to be appropriate to reflect the difference in operations between the banks and the enterprises.
SEC. 1364.
[12 U.S.C. 4614]

CAPITAL CLASSIFICATIONS.
(a)

Enterprises.—
For purposes of this subtitle, the Director shall classify the enterprises according to the following capital classifications:
(1)

Adequately capitalized.—
An enterprise shall be classified as adequately capitalized if the enterprise—
(A)
maintains an amount of total capital that is equal to or exceeds the risk-based capital level established for the enterprise under section 1361; and
(B)
maintains an amount of core capital that is equal to or exceeds the minimum capital level established for the enterprise under section 1362.
(2)

Undercapitalized.—
An enterprise shall be classified as undercapitalized if—
(A)
the enterprise—
(i)
does not maintain an amount of total capital that is equal to or exceeds the risk-based capital level established for the enterprise; and
(ii)
maintains an amount of core capital that is equal to or exceeds the minimum capital level established for the enterprise; or
(B)
the enterprise is otherwise classified as undercapitalized under subsection (b)(1) of this section.
(3)

Significantly undercapitalized.—
An enterprise shall be classified as significantly undercapitalized if—
(A)
the enterprise—
(i)
does not maintain an amount of total capital that is equal to or exceeds the risk-based capital level established for the enterprise;
(ii)
does not maintain an amount of core capital that is equal to or exceeds the minimum capital level established for the enterprise; and
(iii)
maintains an amount of core capital that is equal to or exceeds the critical capital level established for the enterprise under section 1363; or
(B)
the enterprise is otherwise classified as significantly undercapitalized under subsection (b)(2) of this section or section 1365(b).
(4)

Critically undercapitalized.—
An enterprise shall be classified as critically undercapitalized if—
(A)
the enterprise—
(i)
does not maintain an amount of total capital that is equal to or exceeds the risk-based capital level established for the enterprise; and
(ii)
does not maintain an amount of core capital that is equal to or exceeds the critical capital level for the enterprise; or
(B)
is otherwise classified as critically undercapitalized under subsection (b)(3) of this section or section 1366(b)(5).
(b)

Federal Home Loan Banks.—
(1)

Establishment and criteria.—
For purposes of this subtitle, the Director shall, by regulation—
(A)
establish the capital classifications specified under paragraph (2) for the Federal Home Loan Banks;
(B)
establish criteria for each such capital classification based on the amount and types of capital held by a bank and the risk-based, minimum, and critical capital levels for the banks and taking due consideration of the capital classifications established under subsection (a) for the enterprises, with such modifications as the Director determines to be appropriate to reflect the difference in operations between the banks and the enterprises; and
(C)
shall classify the Federal Home Loan Banks according to such capital classifications.
(2)

Classifications.—
The capital classifications specified under this paragraph are—
(A)
adequately capitalized;
(B)
undercapitalized;
(C)
significantly undercapitalized; and
(D)
critically undercapitalized.
(c)

Discretionary Classification.—
(1)

Grounds for reclassification.—
The Director may reclassify a regulated entity under paragraph (2) if—
(A)
at any time, the Director determines in writing that the regulated entity is engaging in conduct that could result in a rapid depletion of core or total capital or the value of collateral pledged as security has decreased significantly or that the value of the property subject to mortgages held by the regulated entity (or securitized in the case of an enterprise) has decreased significantly;
(B)
after notice and an opportunity for hearing, the Director determines that the regulated entity is in an unsafe or unsound condition; or
(C)
pursuant to section 1371(b), the Director deems the regulated entity to be engaging in an unsafe or unsound practice.
(2)

Reclassification.—
In addition to any other action authorized under this title, including the reclassification of a regulated entity for any reason not specified in this subsection, if the Director takes any action described in paragraph (1), the Director may classify a regulated entity—
(A)
as undercapitalized, if the regulated entity is otherwise classified as adequately capitalized;
(B)
as significantly undercapitalized, if the regulated entity is otherwise classified as undercapitalized; and
(C)
as critically undercapitalized, if the regulated entity is otherwise classified as significantly undercapitalized.
(d)61

Quarterly Determination.—
The Director shall determine the capital classification of the regulated entities for purposes of this subtitle on not less than a quarterly basis (and as appropriate under subsection (c)).
^{61}
Section 1142(a) of Public Law 110–289, 122 Stat. 2730, amended subsection (c) of this section by striking the last sentence, redesignating such subsection as subsection (d), and by inserting a new subsection (c). Section 1161(a)(3) of such Public Law, 122 Stat. 2779, also amended this section by striking the last sentence of subsection (c). The latter amendment probably was not intended to be made to the new subsection (c) added by section 1142(a) and it has not been executed.
(e)

Restriction on Capital Distributions.—
(1)

In general.—
A regulated entity shall make no capital distribution if, after making the distribution, the regulated entity would be undercapitalized.
(2)

Exception.—
Notwithstanding paragraph (1), the Director may permit a regulated entity, to the extent appropriate or applicable, to repurchase, redeem, retire, or otherwise acquire shares or ownership interests if the repurchase, redemption, retirement, or other acquisition—
(A)
is made in connection with the issuance of additional shares or obligations of the regulated entity in at least an equivalent amount; and
(B)
will reduce the financial obligations of the regulated entity or otherwise improve the financial condition of the entity.
(f)

Implementation.—
Notwithstanding any other provision of this section, during the period beginning on the date of the enactment of this Act 62 and ending upon the effective date of section 1365 (as provided in section 1365(c)), an enterprise shall be classified as adequately capitalized if the enterprise maintains an amount of core capital that is equal to or exceeds the minimum capital level for the enterprise under section 1362.
^{62}
The date of enactment was October 28, 1992.
SEC. 1365.
[12 U.S.C. 4615]

SUPERVISORY ACTIONS APPLICABLE TO UNDERCAPITALIZED ENTERPRISES.
(a)

Mandatory Actions.—
(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.
(2)

Capital restoration plan.—
A regulated entity that is classified as undercapitalized shall, within the time period provided in section 1369C (b) and (d), submit to the Director a capital restoration plan that complies with section 1369C and carry out the plan after approval.
(3)

Restriction on capital distributions.—
A regulated entity that is classified as undercapitalized may not make any capital distribution that would result in the regulated entity being reclassified as significantly undercapitalized or critically undercapitalized.
(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.
(b)

Reclassification From Undercapitalized to Significantly Undercapitalized.—
The Director shall reclassify as significantly undercapitalized a regulated entity that is classified as undercapitalized (and the regulated entity shall be subject to the provisions of section 1366) if—
(1)
the regulated entity does not submit a capital restoration plan that is substantially in compliance with section 1369C within the applicable period or the Director does not approve the capital restoration plan submitted by the regulated entity; or
(2)
the Director determines that the regulated entity has failed to comply with the capital restoration plan and fulfill the schedule for the plan approved by the Director in any material respect.
(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. 1366.
[12 U.S.C. 4616]

SUPERVISORY ACTIONS APPLICABLE TO SIGNIFICANTLY UNDERCAPITALIZED ENTERPRISES.
(a)

Mandatory Supervisory Actions.—
(1)

Capital restoration plan.—
A regulated entity that is classified as significantly undercapitalized shall, within the time period under section 1369C (b) and (d), submit to the Director a capital restoration plan that complies with section 1369C and carry out the plan after approval.
(2)

Restrictions on capital distributions.—
(A)

Prior approval.—
A regulated entity that is classified as significantly undercapitalized may not make any capital distribution that would result in the regulated entity being reclassified as critically undercapitalized. A regulated entity that is classified as significantly undercapitalized may not make any other capital distribution unless the Director approves the distribution.
(B)

Standard for approval.—
The Director may approve a capital distribution by a regulated entity classified as significantly undercapitalized only if the Director determines that the distribution (i) will enhance the ability of the regulated entity to meet the risk-based capital level and the minimum capital level for the regulated entity promptly, (ii) will contribute to the long-term financial safety and soundness of the regulated entity, or (iii) is otherwise in the public interest.
(b)

Specific Actions.—
In addition to any other actions taken by the Director (including actions under subsection (a)), the Director shall carry out this section by taking, at any time, 1 or more of the following actions with respect to a regulated entity that is classified as significantly undercapitalized:
(1)

Limitation on increase in obligations.—
Limit any increase in, or order the reduction of, any obligations of the regulated entity, including off-balance sheet obligations.
(2)

Limitation on growth.—
Limit or prohibit the growth of the assets of the regulated entity or require contraction of the assets of the regulated entity.
(3)

Acquisition of new capital.—
Require the regulated entity to acquire new capital in a form and amount determined by the Director.
(4)

Restriction of activities.—
Require the regulated entity to terminate, reduce, or modify any activity that the Director determines creates excessive risk to the regulated entity.
(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).
(6)

Reclassification from significantly to critically undercapitalized.—
The Director may reclassify as critically undercapitalized a regulated entity that is classified as significantly undercapitalized (and the regulated entity shall be subject to the provisions of section 1367) if—
(A)
the regulated entity does not submit a capital restoration plan that is substantially in compliance with section 1369C within the applicable period or the Director does not approve the capital restoration plan submitted by the regulated entity; or
(B)
the Director determines that the regulated entity has failed to make, in good faith, reasonable efforts necessary to comply with the capital restoration plan and fulfill the schedule for the plan approved by the Director.
(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.
(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. 1367.
[12 U.S.C. 4617]

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)

Assets insufficient for obligations.—
The assets of the regulated entity are less than the obligations of the regulated entity to its creditors and others.
(B)

Substantial dissipation.—
Substantial dissipation of assets or earnings due to—
(i)
any violation of any provision of Federal or State law; or
(ii)
any unsafe or unsound practice.
(C)

Unsafe or unsound condition.—
An unsafe or unsound condition to transact business.
(D)

Cease and desist orders.—
Any willful violation of a cease and desist order that has become final.
(E)

Concealment.—
Any concealment of the books, papers, records, or assets of the regulated entity, or any refusal to submit the books, papers, records, or affairs of the regulated entity, for inspection to any examiner or to any lawful agent of the Director.
(F)

Inability to meet obligations.—
The regulated entity is likely to be unable to pay its obligations or meet the demands of its creditors in the normal course of business.
(G)

Losses.—
The regulated entity has incurred or is likely to incur losses that will deplete all or substantially all of its capital, and there is no reasonable prospect for the regulated entity to become adequately capitalized (as defined in section 1364(a)(1)).
(H)

Violations of law.—
Any violation of any law or regulation, or any unsafe or unsound practice or condition that is likely to—
(i)
cause insolvency or substantial dissipation of assets or earnings; or
(ii)
weaken the condition of the regulated entity.
(I)

Consent.—
The regulated entity, by resolution of its board of directors or its shareholders or members, consents to the appointment.
(J)

Undercapitalization.—
The regulated entity is undercapitalized or significantly undercapitalized (as defined in section 1364(a)(3)), 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.
(K)

Critical undercapitalization.—
The regulated entity is critically undercapitalized, as defined in section 1364(a)(4).
(L)

Money laundering.—
The Attorney General notifies the Director in writing that the regulated entity has been found guilty of a criminal offense under section 1956 or 1957 of title 18, United States Code, or section 5322 or 5324 of title 31, United States Code.
(4)

Mandatory receivership.—
(A)

In general.—
The Director shall appoint the Agency as receiver for a regulated entity if the Director determines, in writing, that—
(i)
the assets of the regulated entity are, and during the preceding 60 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 60 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 may, 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 63.
^{63}
So in law. Section 1379B of this Act (relating to subpoena authority) was redesignated as section 1379D by section 1153(a)(1) of Public Law 110–289, 122 Stat. 2770.
(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, Federal Home Loan 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 the 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 clause (ii) for which the statute of limitations applicable under State law with respect to such claim has expired not more than 5 years before the appointment of the Agency as conservator or receiver, the Agency may bring an action as conservator or receiver on such claim without regard to the expiration of the statute of limitations applicable under State law.
(B)

Claims described.—
A tort claim referred to under clause (i) is a claim arising from fraud, intentional misconduct resulting in unjust enrichment, or intentional misconduct resulting in substantial loss to the 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 a regulated entity for the benefit of any person other than the regulated entity shall not be available to satisfy the claims of creditors generally, except that nothing in this clause shall be construed to expand or otherwise affect the authority of any regulated entity.
(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 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)64.
^{64}
So in law. There is no second closing parenthesis.
(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; 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.
(15)

Exception for federal reserve and federal home loan banks.—
No provision of this subsection shall apply with respect to—
(A)
any extension of credit from any Federal Home Loan Bank or Federal Reserve Bank to any regulated entity; or
(B)
any security interest in the assets of the regulated entity securing any such extension of credit.
(e)

Valuation of Claims in Default.—
(1)

In general.—
Notwithstanding any other provision of Federal law or the law of any State, and regardless of the method which the Agency determines to utilize with respect to a regulated entity in default or in danger of default, including transactions authorized under subsection (i), this subsection shall govern the rights of the creditors of such regulated entity.
(2)

Maximum liability.—
The maximum liability of the Agency, acting as receiver or in any other capacity, to any person having a claim against the receiver or the regulated entity for which such receiver is appointed shall 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 may 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)65

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—
^{65}
So in law. THere is no clause (ii).
(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.
(D)

Burden of proof.—
In any hearing under this subsection, the Director has the burden of proof on the issue of adequate protection.
(12)

Effect 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.
SEC. 1368.
[12 U.S.C. 4618]

NOTICE OF CLASSIFICATION AND ENFORCEMENT ACTION.
(a)

Notice.—
Before taking any action referred to in subsection (b), the Director shall provide to the regulated entity written notice of the proposed action, which states the reasons for the proposed action and the information on which the proposed action is based.
(b)

Applicability.—
The requirements of subsection (a) shall apply to the following actions:
(1)
Classification or reclassification of a regulated entity within a particular capital classification under section 1364.
(2)
Any discretionary supervisory action pursuant to section 1365.
(3)
Any discretionary supervisory action pursuant to section 1366 except a decision to appoint a conservator under section 1366(b)(6).
Notice of classification under paragraph (1) and notice of supervisory actions under paragraph (2) or (3) may be provided together in a single notice under subsection (a).
(c)

Response Period.—
(1)

In general.—
During the 30-day period beginning on the date that a regulated entity is provided notice under subsection (a) of a proposed action, the regulated entity may submit to the Director any information relevant to the action that the regulated entity considers appropriate for consideration by the Director in determining whether to take such action. The Director may, at the discretion of the Director, hold an informal administrative hearing to receive and discuss such information and the proposed determination.
(2)

Extended period.—
The Director may extend the period under paragraph (1) for good cause for not more than 30 additional days.
(3)

Shortened period.—
The Director may shorten the period under paragraph (1) if the Director determines that the condition of the regulated entity so requires or the regulated entity consents.
(4)

Failure to respond.—
The failure of a regulated entity to provide information during the response period under this subsection (as extended or shortened) shall waive any right of the regulated entity to comment on the proposed action of the Director.
(d)

Consideration of Information and Determination.—
After the expiration of the response period under subsection (c) or upon receipt of information provided during such period by the regulated entity, whichever occurs earlier, the Director shall determine whether to take the action proposed, taking into consideration any relevant information submitted by the regulated entity during the response period. The Director shall provide written notice of a determination to take action and the reasons for such determination to the regulated entity, the Committee on Banking, Finance and Urban Affairs of the House of Representatives 66, and the Committee on Banking, Housing, and Urban Affairs of the Senate. Such notice shall respond to any information submitted during the response period.
^{66}
Section 1(a) of Public Law 104–14, 109 Stat. 186, provides, in part, that “any reference in any provision of law enacted before January 4, 1995, to . . . the Committee on Banking, Finance and Urban Affairs of the House of Representatives shall be treated as referring to the Committee on Banking and Financial Services of the House of Representatives”. However, H. Res. 5, 107th Congress, agreed to on January 3, 2001, abolished the Committee on Banking and Financial Services and established the Committee on Financial Services, which has jurisdiction over many of the areas previously under the jurisdiction of the Committee on Banking and Financial Services.
(e)

Effective Date of Actions.—
An action referred to in subsection (b) shall take effect upon receipt by the regulated entity of notice of the determination of the Director under subsection (d), unless otherwise provided in such notice.
[Sections 1369, 1369A, and 1369B were repealed by Public Law 110–289]
SEC. 1369C.
[12 U.S.C. 4622]

CAPITAL RESTORATION PLANS.
(a)

Contents.—
Each capital restoration plan submitted under this subtitle shall set forth a feasible plan for restoring the core capital of the regulated entity subject to the plan to an amount not less than the minimum capital level for the regulated entity and for restoring the total capital of the regulated entity to an amount not less than the risk-based capital level for the regulated entity. Each capital restoration plan shall—
(1)
specify the level of capital the regulated entity will achieve and maintain;
(2)
describe the actions that the regulated entity will take to become classified as adequately capitalized;
(3)
establish a schedule for completing the actions set forth in the plan;
(4)
specify the types and levels of activities (including existing and new programs) in which the regulated entity will engage during the term of the plan; and
(5)
describe the actions that the regulated entity will take to comply with any mandatory and discretionary requirements imposed under this subtitle.
(b)

Deadlines for Submission.—
The Director shall, by regulation, establish a deadline for submission of a capital restoration plan, which may not be more than 45 days after the regulated entity is notified in writing that a plan is required. The regulations shall provide that the Director may extend the deadline to the extent that the Director determines it necessary. Any extension of the deadline shall be in writing and for a time certain.
(c)

Approval.—
The Director shall review each capital restoration plan submitted under this section and, not later than 30 days after submission of the plan, approve or disapprove the plan. The Director may extend the period for approval or disapproval for any plan for a single additional 30-day period if the Director determines it necessary. The Director shall provide written notice to any regulated entity submitting a 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.
(d)

Resubmission.—
If the Director disapproves the initial capital restoration plan submitted by the regulated entity, the regulated entity shall submit an amended plan acceptable to the Director within 30 days or such longer period that the Director determines is in the public interest.
SEC. 1369D.
[12 U.S.C. 4623]

JUDICIAL REVIEW OF DIRECTOR ACTION.
(a)

Jurisdiction.—
(1)

Filing of petition.—
A regulated entity that is not classified as critically undercapitalized and is the subject of a classification under section 1364 or a discretionary supervisory action taken under this subtitle by the Director (other than action to appoint a conservator under section 1366 or 1367 or action under section 1369) may obtain review of the classification or action by filing, within 10 days after receiving written notice of the Director's action, a written petition requesting that the classification or action of the Director be modified, terminated, or set aside.
(2)

Place for filing.—
A petition filed pursuant to this subsection shall be filed in the United States Court of Appeals for the District of Columbia Circuit.
(b)

Scope of Review.—
The Court may modify, terminate, or set aside an action taken by the Director and reviewed by the Court pursuant to this section only if the court finds, on the record on which the Director acted, that the action of the Director was arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with applicable laws.
(c)

Unavailability of Stay.—
The commencement of proceedings for judicial review pursuant to this section shall not operate as a stay of any action taken by the Director. Pending judicial review of the action, the court shall not have jurisdiction to stay, enjoin, or otherwise delay any supervisory action taken by the Director with respect to a regulated entity that is classified as significantly or critically undercapitalized or any action of the Director that results in the classification of a regulated entity as significantly or critically undercapitalized.
(d)

Limitation on Jurisdiction.—
Except as provided in this section, no court shall have jurisdiction to affect, by injunction or otherwise, the issuance or effectiveness of any classification or action of the Director under this subtitle (other than appointment of a conservator under section 1366 or 1367 or action under section 1369) or to review, modify, suspend, terminate, or set aside such classification or action.
SEC. 1369E.
[12 U.S.C. 4624]

REVIEWS OF ENTERPRISE ASSETS AND LIABILITIES.
(a)

In General.—
The Director shall, by regulation, establish criteria governing the portfolio holdings of the enterprises, to ensure that the holdings are backed by sufficient capital and consistent with the mission and the safe and sound operations of the enterprises. In establishing such criteria, the Director shall consider the ability of the enterprises to provide a liquid secondary market through securitization activities, the portfolio holdings in relation to the overall mortgage market, and adherence to the standards specified in section 1313B.
(b)

Temporary Adjustments.—
The Director may, by order, make temporary adjustments to the established standards for an enterprise or both enterprises, such as during times of economic distress or market disruption.
(c)

Authority To Require Disposition or Acquisition.—
The Director shall monitor the portfolio of each enterprise. Pursuant to subsection (a) and notwithstanding the capital classifications of the enterprises, the Director may, by order, require an enterprise, under such terms and conditions as the Director determines to be appropriate, to dispose of or acquire any asset, if the Director determines that such action is consistent with the purposes of this Act or any of the authorizing statutes.
Subtitle C—

Enforcement Provisions
SEC. 1371.
[12 U.S.C. 4631]

CEASE-AND-DESIST PROCEEDINGS.
(a)

Issuance for Unsafe or Unsound Practices and Violations.—
(1)

Authority of director.—
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 Office of Finance, 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 Office of Finance 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.
(2)

Limitation.—
The Director may not, pursuant to this section, enforce compliance with any housing goal established under subpart B of part 2 of subtitle A of this title, with section 1336 or 1337 of this title, with subsection (m) or (n) of section 309 of the Federal National Mortgage Association Charter Act (12 U.S.C. 1723a(m), (n)), with subsection (e) or (f) of section 307 of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1456(e), (f)), or with paragraph (5) of section 10(j) of the Federal Home Loan Bank Act (12 U.S.C. 1430(j)).
(b)

Issuance for Unsatisfactory Rating.—
If a regulated entity receives, in its most recent report of examination, a less-than-satisfactory rating for asset quality, management, earnings, or liquidity, the Director may (if the deficiency is not corrected) deem the regulated entity to be engaging in an unsafe or unsound practice for purposes of subsection (a).
(c)

Procedure.—
(1)

Notice of charges.—
Each notice of charges under this section shall contain a statement of the facts constituting the alleged practice or violation 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 practice or violation should issue, 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.
(2)

Issuance of order.—
If the Director finds on the record made at such hearing that any practice or violation specified in the notice of charges has been established (or the regulated entity or entity-affiliated party consents pursuant to section 1373(a)(4)), the Director may issue and serve upon the regulated entity, executive officer, director, or entity-affiliated party an order requiring such party to cease and desist from any such practice or violation and to take affirmative action to correct or remedy the conditions resulting from any such practice or violation.
(d)

Affirmative Action To Correct Conditions Resulting From Violations or Activities.—
The authority under this section and section 1372 to issue any order requiring a regulated entity, executive officer, director, or entity-affiliated party to take affirmative action to correct or remedy any condition resulting from any practice or violation with respect to which such order is issued includes the authority to require a regulated entity or entity-affiliated party—
(1)
make restitution to, or provide reimbursement, indemnification, or guarantee against loss, if—
(A)
such entity or party or finance facility was unjustly enriched in connection with such practice or violation; or
(B)
the violation or practice involved a reckless disregard for the law or any applicable regulations or prior order of the Director;
(2)
to require a regulated entity to seek restitution, or to obtain reimbursement, indemnification, or guarantee against loss;
(3)
to restrict the growth of the regulated entity;
(4)
to require the regulated entity to dispose of any loan or asset involved;
(5)
to require the regulated entity to rescind agreements or contracts;
(6)
to require the regulated entity to employ qualified officers or employees (who may be subject to approval by the Director at the direction of the Director); and
(7)
to require the regulated entity to take such other action as the Director determines appropriate.
(e)

Authority To Limit Activities.—
The authority to issue an order under this section or section 1372 includes the authority to place limitations on the activities or functions of the regulated entity or entity-affiliated party or any executive officer or director of the regulated entity or entity-affiliated party.
(f)

Effective Date.—
An order under this section shall become effective upon the expiration of the 30-day period beginning on the service of the order upon the regulated entity, finance facility,,67 executive officer, director, or entity-affiliated party concerned (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 or otherwise, as provided in this subtitle.
^{67}
So in law. See the amendment made by section 1151(6)(A) of Public Law 110–289.
SEC. 1372.
[12 U.S.C. 4632]

TEMPORARY CEASE-AND-DESIST ORDERS.
(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).
(b)

Effective Date.—
An order issued pursuant to subsection (a) shall become effective upon service upon the regulated entity, executive officer, director, or entity-affiliated party and, unless set aside, limited, or suspended by a court in proceedings pursuant to subsection (d), shall remain in effect and enforceable pending the completion of the proceedings pursuant to such notice and shall remain effective until the Director dismisses the charges specified in the notice or until superseded by a cease-and-desist order issued pursuant to section 1371.
(c)

Incomplete or Inaccurate Records.—
(1)

Temporary order.—
If a notice of charges served under section 1371 (a) or (b) specifies on the basis of particular facts and circumstances that the books and records of the regulated entity served are so incomplete or inaccurate that the Director is unable, through the normal supervisory process, to determine the financial condition of the regulated entity or the details or the purpose of any transaction or transactions that may have a material effect on the financial condition of that regulated entity, the Director may issue a temporary order requiring—
(A)
the cessation of any activity or practice which gave rise, whether in whole or in part, to the incomplete or inaccurate state of the books or records; or
(B)
affirmative action to restore the books or records to a complete and accurate state.
(2)

Effective period.—
Any temporary order issued under paragraph (1)—
(A)
shall become effective upon service; and
(B)
unless set aside, limited, or suspended by a court in proceedings pursuant to subsection (d), shall remain in effect and enforceable until the earlier of—
(i)
the completion of the proceeding initiated under section 1371 in connection with the notice of charges; or
(ii)
the date the Director determines, by examination or otherwise, that the books and records of the regulated entity are accurate and reflect the financial condition of the regulated entity.
(d)

Judicial Review.—
A regulated entity, executive officer, director, or entity-affiliated party that has been served with a temporary order pursuant to this section may apply to the United States District Court for the District of Columbia within 10 days after such service for an injunction setting aside, limiting, or suspending the enforcement, operation, or effectiveness of the order pending the completion of the administrative proceedings pursuant to the notice of charges served upon the enterprise, executive officer, director, or entity-affiliated party under section 1371 (a) or (b). Such court shall have jurisdiction to issue such injunction.
(e)

Enforcement by Attorney General.—
In the case of violation or threatened violation of, or failure to obey, a temporary order issued pursuant to this section, the Director may bring an action in the United States District Court for the District of Columbia for an injunction to enforce such order or may, under the direction and control of the Attorney General, bring such an action.68 If the court finds any such violation, threatened violation, or failure to obey, the court shall issue such injunction.
^{68}
Section 1152(5)(B) of Public Law 110–289, 122 Stat. 2770, amended this subsection by striking “or may, under the direction and control of the Attorney General, bring such action”. The amendment could not be executed because the matter to be struck does not appear.
SEC. 1373.
[12 U.S.C. 4633]

HEARINGS.
(a)

Requirements.—
(1)

Venue and record.—
Any hearing under section 1371, 1376(c), or 1377 shall be held on the record and in the District of Columbia.
(2)

Timing.—
Any such hearing shall be fixed for a date not earlier than 30 days nor later than 60 days after service of the notice of charges under section 1371 or 1377 or determination to impose a penalty under section 1376, unless an earlier or a later date is set by the hearing officer at the request of the party served.
(3)

Procedure.—
Any such hearing shall be conducted in accordance with chapter 5 of title 5, United States Code.
(4)

Failure to appear.—
If the party served fails to appear at the hearing through a duly authorized representative, such party shall be deemed to have consented to the issuance of the cease-and-desist 69 order or the imposition of the penalty for which the hearing is held.
^{69}
Section 1153(b)(1)(B)(iii) amended this paragraph by inserting “or removal or prohibition” after “cease and desist”. The amendment could not be executed because such term does not appear in this paragraph.
(b)

Issuance of Order.—
(1)

In general.—
After any such hearing, and within 90 days after the parties have been notified that the case has been submitted to the Director for final decision, the Director shall render the decision (which shall include findings of fact upon which the decision is predicated) and shall issue and serve upon each party to the proceeding an order or orders consistent with the provisions of this subtitle.
(2)

Modification.—
Judicial review of any such order shall be exclusively as provided in section 1374. Unless such a petition for review is timely filed as provided in section 1374, and thereafter until the record in the proceeding has been filed as so provided, the Director may at any time, modify, terminate, or set aside any such order, upon such notice and in such manner as the Director considers proper. Upon such filing of the record, the Director may modify, terminate, or set aside any such order with permission of the court.
SEC. 1374.
[12 U.S.C. 4634]

JUDICIAL REVIEW.
(a)

Commencement.—
Any party to a proceeding under section 137170 1313B, 1376, or 1377 may obtain review of any final order issued under this title by filing in the United States Court of Appeals for the District of Columbia Circuit, within 30 days after the date of service of such order, a written petition praying that the order of the Director be modified, terminated, or set aside. The clerk of the court shall transmit a copy of the petition to the Director.
^{70}
So in law.
(b)

Filing of Record.—
Upon receiving a copy of a petition, the Director shall file in the court the record in the proceeding, as provided in section 2112 of title 28, United States Code.
(c)

Jurisdiction.—
Upon the filing of a petition, such court shall have jurisdiction, which upon the filing of the record by the Director shall (except as provided in the last sentence of section 1373(b)(2)) be exclusive, to affirm, modify, terminate, or set aside, in whole or in part, the order of the Director.
(d)

Review.—
Review of such proceedings shall be governed by chapter 7 of title 5, United States Code.
(e)

Order To Pay Penalty.—
Such court shall have the authority in any such review to order payment of any penalty imposed by the Director under this subtitle.
(f)

No Automatic Stay.—
The commencement of proceedings for judicial review under this section shall not, unless specifically ordered by the court, operate as a stay of any order issued by the Director.
SEC. 1375.
[12 U.S.C. 4635]

ENFORCEMENT AND JURISDICTION.
(a)

Enforcement.—
The Director may, in the discretion of the Director, apply to the United States District Court for the District of Columbia, or the United States district court within the jurisdiction of which the headquarters of the regulated entity is located, for the enforcement of any effective and outstanding notice or order issued under this subtitle or subtitle B, or request that the Attorney General of the United States bring such an action. Such court shall have jurisdiction and power to order and require compliance with such notice or order.
(b)

Limitation on Jurisdiction.—
Except as otherwise provided in this subtitle and sections 1369 and 1369D, no court shall have jurisdiction to affect, by injunction or otherwise, the issuance or enforcement of any notice or order under section 1371, 1372, 1313B, 1376, or 1377, or subtitle B, or to review, modify, suspend, terminate, or set aside any such notice or order.
SEC. 1376.
[12 U.S.C. 4636]

CIVIL MONEY PENALTIES.
(a)

In General.—
The Director may impose a civil money penalty in accordance with this section on any regulated entity or any entity-affiliated party. The Director shall not impose a civil penalty in accordance with this section on any regulated entity or any entity-affiliated party for any violation that is addressed under section 1345(a).
(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; or
(D)
violates any written agreement between the regulated entity and the Director.
(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.
(c)

Procedures.—
(1)

Establishment.—
The Director shall establish standards and procedures governing the imposition of civil money penalties under subsections (a) and (b). Such standards and procedures—
(A)
shall provide for the Director to notify the regulated entity or entity-affiliated party in writing of the Director's determination to impose the penalty, which shall be made on the record;
(B)
shall provide for the imposition of a penalty only after the regulated entity, executive officer, or director or entity-affiliated party has been given an opportunity for a hearing on the record pursuant to section 1373; 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 such factors as the gravity of the violation, any history of prior violations, the effect of the penalty on the safety and soundness of the regulated entity, any injury to the public, any benefits received, and deterrence of future violations, and any other factors the Director may determine by regulation to be appropriate.
(3)

Review of imposition of penalty.—
The order of the Director imposing a penalty under this section shall not be subject to review, except as provided in section 1374.
(d)

Action To Collect Penalty.—
If a regulated entity, executive officer, director, or entity-affiliated party fails to comply with an order of the Director imposing a civil money penalty under this section, after the order is no longer subject to review as provided under subsection (c)(1), the Director may bring an action in the United States District Court for the District of Columbia, or the United States district court within the jurisdiction of which the headquarters of the regulated entity is located, to obtain a monetary judgment against the regulated entity, executive officer, director, or entity-affiliated party and such other relief as may be available, or may, under the direction and control of the Attorney General, bring such an action.71 The monetary judgment may, in the discretion of the court, include any 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 of the Director imposing the penalty shall not be subject to review.
^{71}
Section 1155(4)(F) of Public Law 110–289, 122 Stat. 2777, amended this subsection by striking “, or may, under the direction and control of the Attorney General of the United States, bring such an action”. The amendment could not be executed because the matter to be struck does not appear.
(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)

Availability of Other Remedies.—
Any civil money penalty under this section shall be in addition to any other available civil remedy and may be imposed whether or not the Director imposes other administrative sanctions.
(g)

Prohibition of Reimbursement or Indemnification.—
A regulated entity may not reimburse or indemnify any individual for any penalty imposed under subsection (b)(3).
(h)

Deposit of Penalties.—
The Director shall deposit any civil money penalties collected under this section into the general fund of the Treasury.
(i)

Applicability.—
A penalty under this section may be imposed only for conduct or violations under subsection (a) occurring after the date of the enactment of this Act.72
^{72}
October 28, 1992.
SEC. 1377.
[12 U.S.C. 4636a]

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 Office of Finance 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 Office of Finance, 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 Office of Finance;
(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 Office of Finance.
(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 Office of Finance, or prohibited from participating in the conduct of the affairs of a regulated entity or the Office of Finance, 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 Office of Finance.
(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 Office of Finance, 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 Office of Finance 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.
SEC. 1378.
[12 U.S.C. 4636b]

CRIMINAL PENALTY.
Whoever, being subject to an order in effect under section 1377, without the prior written approval of the Director, knowingly participates, directly or indirectly, in any manner (including by engaging in an activity specifically prohibited in such an order) in the conduct of the affairs of any regulated entity shall, notwithstanding section 3571 of title 18, be fined not more than $1,000,000, imprisoned for not more than 5 years, or both.
SEC. 1379.
[12 U.S.C. 4637]

NOTICE AFTER SEPARATION FROM SERVICE.
The resignation, termination of employment or participation, or separation of a director or executive officer of a regulated entity shall not affect the jurisdiction and authority of the Director to issue any notice and proceed under this subtitle against any such director or executive officer, if such notice is served before the end of the 6-year period beginning on the date such director or executive officer ceases to be associated with the regulated entity.73
^{73}
Section 1157 of Public Law 110–289, 122 Stat. 2777, made numerous amendments to this section replacing references to “directors”, “officers”, and enterprise''. Such amendments could not be executed because of previous amendments to this section made by section 1156(b) of such Public Law.
SEC. 1379A.
[12 U.S.C. 4638]

PRIVATE RIGHTS OF ACTION.
This title and the amendments made by this title shall not create any private right of action on behalf of any person against a regulated entity 74, or any director or executive officer of an enterprise 74, or impair any existing private right of action under other applicable law.
^{74}
Section 1156(b)(2) of Public Law 111–289, 122 Stat. 2777, amended this section by striking “an enterprise” and inserting “a regulated entity”. The term to be struck appeared twice in this section.
SEC. 1379B.
[12 U.S.C. 4639]

PUBLIC DISCLOSURE OF FINAL ORDERS AND AGREEMENTS.75
^{75}
Section 1158 of the Housing and Economic Recovery Act of 2008, Public Law 110–289, 122 Stat. 2778, amended section 1379B of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 in various places. However, section 1153(a)(1) of such Public Law, 122 Stat. 2770, redesignated sections 1379 and 1379B as sections 1379B and 1379D, respectively. The amendments made by such section 1158 cannot be executed to section 1379B, as so redesignated, and are shown in this compilation as executed to section 1379D, as so redesignated.
(a)

In General.—
The Director shall make available to the public—
(1)
any written agreement or other written statement for which a violation may be redressed by the Director or any modification to or termination thereof, unless the Director, in the Director's discretion, determines that public disclosure would be contrary to the public interest;
(2)
any order that is issued with respect to any administrative enforcement proceeding initiated by the Director under this subtitle and that has become final in accordance with sections 1373 and 1374; and
(3)
any modification to or termination of any final order made public pursuant to this subsection.
(b)

Hearings.—
All hearings on the record with respect to any notice of charges issued by the Director shall be open to the public, unless the Director, in the Director's discretion, determines that holding an open hearing would be contrary to the public interest.
(c)

Delay of Public Disclosure Under Exceptional Circumstances.—
If the Director makes a determination in writing that the public disclosure of any final order pursuant to subsection (a) would seriously threaten the financial health or security of the regulated entity, the Director may delay the public disclosure of such order for a reasonable time.
(d)

Documents Filed Under Seal in Public Enforcement Hearings.—
The Director may file any document or part thereof under seal in any hearing commenced by the Director if the Director determines in writing that disclosure thereof would be contrary to the public interest.
(e)

Retention of Documents.—
The Director shall keep and maintain a record, for not less than 6 years, of all documents described in subsection (a) and all enforcement agreements and other supervisory actions and supporting documents issued with respect to or in connection with any enforcement proceeding initiated by the Director under this subtitle or any other law.
(f)

Disclosures to Congress.—
This section may not be construed to authorize the withholding, or to prohibit the disclosure, of any information to the Congress or any committee or subcommittee thereof.
SEC. 1379C.
[12 U.S.C. 4640]

NOTICE OF SERVICE.
Any service required or authorized to be made by the Director under this subtitle may be made by registered mail, or in such other manner reasonably calculated to give actual notice as the Director may by regulation or otherwise provide.
SEC. 1379D.
[12 U.S.C. 4641]

SUBPOENA AUTHORITY.76
^{76}
See footnote to section 1379B.
(a)

In General.—
In the course of or in connection with any proceeding, examination, or investigation under this title, the Director or any designated representative thereof, including any person designated to conduct any hearing under this subtitle shall have the authority—
(1)
to administer oaths and affirmations;
(2)
to take and preserve testimony under oath;
(3)
to issue subpoenas and subpoenas duces tecum; and
(4)
to revoke, quash, or modify subpoenas and subpoenas duces tecum.
(b)

Witnesses and Documents.—
The attendance of witnesses and the production of documents provided for in this section may be required from any place in any State or in any territory or other place subject to the jurisdiction of the United States at any designated place where such proceeding is being conducted.
(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).
(d)

Fees and Expenses.—
Witnesses subpoenaed under this section shall be paid the same fees and mileage that are paid witnesses in the district courts of the United States. Any court having jurisdiction of any proceeding instituted under this section by an regulated entity enterprise-affiliated party 77 may allow to any such party such reasonable expenses and attorneys fees as the court deems just and proper. Such expenses and fees shall be paid by the enterprise 78 or from its assets.
^{77}
So in law.
^{78}
Section 1156 of Public Law 110–289, 122 Stat. 2777, amended this section by “enterprise” and inserting “regulated entity”. The term to be struck appears twice in this section and was executed above in the first occurrence.
(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.
SEC. 1379E.
[12 U.S.C. 4642]

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, in good faith, makes a report pursuant to subsection (a), and any entity-affiliated party, that, in good faith, 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 D—

Amendments to Charter Acts of Enterprises
SEC. 1381.

AMENDMENTS TO FEDERAL NATIONAL MORTGAGE ASSOCIATION CHARTER ACT.
* * * * * * *
SEC. 1382.

AMENDMENTS TO FEDERAL HOME LOAN MORTGAGE CORPORATION ACT.
* * * * * * *
[Section 1383 was repealed by Public Law 110–289]

Subtitle E—

Regulation of Federal Home Loan Bank System
* * * * * * *
TITLE XIV—

HOUSING PROGRAMS UNDER STEWART B. MCKINNEY HOMELESS ASSISTANCE ACT
Subtitle A—

Housing Assistance
* * * * * * *
SEC. 1407.

FHA SINGLE FAMILY PROPERTY DISPOSITION.
(a)

30-Day Marketing Period.—
Except as provided in subsection (b), in carrying out the program for disposition of single family properties acquired by the Department of Housing and Urban Development for use by the homeless under subpart E of part 291 of title 24, Code of Federal Regulations, the Secretary of Housing and Urban Development may not make any eligible property available for lease under such program that has not been listed and made generally available for sale by the Secretary for a period of at least 30 days.
(b)

Exception.—
With respect to any area for which the Secretary determines that there will not be a sufficient quantity of decent, safe, and sanitary affordable housing available for use under the program referred to in subsection (a) if eligible properties located in the area are made generally available for the 30-day period under subsection (a), the Secretary shall reserve for disposition under such program not more than 10 percent of the total number of eligible properties located in the area and shall not market such properties as provided under subsection (a). The Secretary shall consult with the unit of general local government for an area in determining which properties should be reserved for disposition under this subsection.
(c)

State and Local Taxes.—
(1)

Requirement to provide information upon request.—
In carrying out the program referred to in subsection (a), the Secretary of Housing and Urban Development shall provide the information described in paragraph (2) to any lessee or applicant under the program who requests such information.
(2)

Content.—
The information referred in paragraph (1) shall identify and describe any exemptions or reductions relating to payment of property taxes under State and local laws (for the jurisdictions for which the lessee or applicant requests such information) that may be applicable to lessees or applicants, or to properties leased, under such program.
(3)

Exemption from escrow requirement.—
To the extent any lessee of a property under the program referred to in subsection (a) is provided an exemption from any requirement to pay State or local taxes, or a reduction in the amount of any such taxes, the Secretary may not require the lessee to pay or deposit in any escrow account amounts for the payment of such taxes.
TITLE XV—

ANNUNZIO-WYLIE ANTI-MONEY LAUNDERING ACT
SEC. 1500.
[12 U.S.C. 1811 note]

SHORT TITLE.
This title may be cited as the “Annunzio-Wylie Anti-Money Laundering Act”.
* * * * * * *
Subtitle D—

Reports and Miscellaneous
* * * * * * *
SEC. 1542.
[12 U.S.C. 1831m–1]

REPORTS OF INFORMATION REGARDING SAFETY AND SOUNDNESS OF DEPOSITORY INSTITUTIONS.
(a)

Reports to Appropriate Federal Banking Agencies.—
(1)

In general.—
The Attorney General, the Secretary of the Treasury, and the head of any other agency or instrumentality of the United States shall, unless otherwise prohibited by law, disclose to the appropriate Federal banking agency any information that the Attorney General, the Secretary of the Treasury, or such agency head believes raises significant concerns regarding the safety or soundness of any depository institution doing business in the United States.
(2)

Exceptions.—
(A)

Intelligence information.—
(i)

In general.—
The Director of Centra l Intelligence shall disclose to the Attorney General or the Secretary of the Treasury any intelligence information that would otherwise be reported to an appropriate Federal banking agency pursuant to paragraph (1). After consultation with the Director of Central Intelligence, the Attorney General or the Secretary of the Treasury, shall disclose the intelligence information to the appropriate Federal banking agency.
(ii)

Procedures for receipt of intelligence information.—
Each appropriate Federal banking agency, in consultation with the Director of Central Intelligence, shall establish procedures for receipt of intelligence information that are adequate to protect the intelligence information.
(B)

Criminal investigations, safety of government investigators, informants, and witnesses.—
If the Attorney General, the Secretary of the Treasury or their respective designees determines that the disclosure of information pursuant to paragraph (1) may jeopardize a pending civil investigation or litigation, or a pending criminal investigation or prosecution, may result in serious bodily injury or death to Government employees, informants, witnesses or their respective families, or may disclose sensitive investigative techniques and methods, the Attorney General or the Secretary of the Treasury shall—
(i)
provide the appropriate Federal banking agency a description of the information that is as specific as possible without jeopardizing the investigation, litigation, or prosecution, threatening serious bodily injury or death to Government employees, informants, or witnesses or their respective families, or disclosing sensitive investigation techniques and methods; and
(ii)
permit a full review of the information by the Federal banking agency at a location and under procedures that the Attorney General determines will ensure the effective protection of the information while permitting the Federal banking agency to ensure the safety and soundness of any depository institution.
(C)

Grand jury investigations; criminal procedure.—
Paragraph (1) shall not—
(i)
apply to the receipt of information by an agency or instrumentality in connection with a pending grand jury investigation; or
(ii)
be construed to require disclosure of information prohibited by rule 6 of the Federal Rules of Criminal Procedure.
(b)

Procedures for Receipt of Disclosure Reports.—
(1)

In general.—
Within 90 days after the date of enactment of this Act, each appropriate Federal banking agency shall establish procedures for receipt of a disclosure report by an agency or instrumentality made in accordance with subsection (a)(1). The procedures established in accordance with this subsection shall ensure adequate protection of information disclosed, including access control and information accountability.
(2)

Procedures related to each disclosure report.—
Upon receipt of a report in accordance with subsection (a)(1), the appropriate Federal banking agency shall—
(A)
consult with the agency or instrumentality that made the disclosure regarding the adequacy of the procedures established pursuant to paragraph (1), and
(B)
adjust the procedures to ensure adequate protection of the information disclosed.
(c)

Effect on Agencies.—
This section does not impose an affirmative duty on the Attorney General, the Secretary of the Treasury, or the head of any agency or instrumentality of the United States to collect new or to review existing information.
(d)

Definitions.—
For purposes of this section, the terms “appropriate Federal banking agency” and “depository institution” have the same meanings as in section 8 of the Federal Deposit Insurance Act.
* * * * * * *
Subtitle F—

Miscellaneous Provisions
* * * * * * *
SEC. 1564.
[31 U.S.C. 5311 note]

ADVISORY GROUP ON REPORTING REQUIREMENTS.
(a)

Establishment.—
Not later than 90 days after the date of the enactment of this Act, the Secretary of the Treasury shall establish a Bank Secrecy Act Advisory Group consisting of representatives of the Department of the Treasury, the Department of Justice, and the Office of National Control Policy and of other interested persons and financial institutions subject to the reporting requirements of subchapter II of chapter 63 of title 31, United States Code, or section 60501 of the Internal Revenue Code of 1986.
(b)

Purposes.—
The Advisory Group shall provide a means by which the Secretary—
(1)
informs private sector representatives, on a regular basis, of the ways in which the reports submitted pursuant to the requirements referred to in subsection (a) have been used;
(2)
informs private sector representatives, on a regular basis, of how information regarding suspicious financial transactions provided voluntarily by financial institutions has been used; and
(3)
receives advice on the manner in which the reporting requirements referred to in subsection (a) should be modified to enhance the ability of law enforcement agencies to use the information provided for law enforcement purposes.
(c)

Inapplicability of Chapter 10 of Title 5, United States Code.—
Chapter 10 of title 5, United States Code, shall not apply to the Bank Secrecy Act Advisory Group established pursuant to subsection (a).
(d)

Subcommittee on Innovation and Technology.—
(1)

Definitions.—
In this subsection, the terms “Bank Secrecy Act”, “State bank supervisor”, and “State credit union supervisor” have the meanings given the terms in section 6003 of the Anti-Money Laundering Act of 2020.
(2)

Establishment.—
There shall be within the Bank Secrecy Act Advisory Group a subcommittee to be known as the ‘Subcommittee on Innovation and Technology’ to—
(A)
advise the Secretary of the Treasury regarding means by which the Department of the Treasury, FinCEN, the Federal functional regulators, State bank supervisors, and State credit union supervisors, as appropriate, can most effectively encourage and support technological innovation in the area of anti-money laundering and countering the financing of terrorism and proliferation; and
(B)
reduce, to the extent practicable, obstacles to innovation that may arise from existing regulations, guidance, and examination practices related to compliance of financial institutions with the Bank Secrecy Act.
(3)

Membership.—
(A)

In general.—
The subcommittee established under paragraph (1) shall consist of the representatives of the heads of the Federal functional regulators, including, as appropriate, the Bank Secrecy Act Innovation Officers as established in section 6208 of the Anti-Money Laundering Act of 2020, a representative of State bank supervisors, a representative of State credit union supervisors, representatives of a cross-section of financial institutions subject to the Bank Secrecy Act, law enforcement, FinCEN, and any other representative as determined by the Secretary of the Treasury.
(B)

Requirements.—
Each agency representative described in subparagraph (A) shall be an individual who has demonstrated knowledge and competence concerning the application of the Bank Secrecy Act.
(4)

Sunset.—
(A)

In general.—
Except as provided in subparagraph (B), the Subcommittee on Innovation and Technology shall terminate on the date that is 5 years after the date of enactment of this subsection.
(B)

Exception.—
The Secretary of the Treasury may renew the Subcommittee on Innovation for 1-year periods beginning on the date that is 5 years after the date of enactment of this subsection.
* * * * * * *