FINANCIAL INSTITUTIONS REFORM, RECOVERY, AND ENFORCEMENT ACT OF 1989
FIRREA OF 1989
Public Law 101-73, as amended
FINANCIAL INSTITUTIONS REFORM, RECOVERY, AND ENFORCEMENT ACT OF 1989
73
117–286
Statute Compilation
United States House of Representatives
Office of the Legislative Counsel
text/xml
EN
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Financial Institutions Reform, Recovery, and Enforcement Act of 1989
10913
101
1989-08-09
FINANCIAL INSTITUTIONS REFORM, RECOVERY, AND ENFORCEMENT ACT OF 19891
[Public Law 101-73]
[As Amended Through P.L. 117–286, Enacted December 27, 2022]
[Currency: This publication is a compilation of the text of Public Law 101-73. 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—

PURPOSES
SEC. 101.
[12 U.S.C. 1811 nt.]

PURPOSES.
The purposes of this Act are as follows:
^1
Note: The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 largely amended other Acts. Many free-standing provisions of such Act, while still effect, do not have a permanent or long-term application and have therefore not been included in this compilation.
(1)
To promote, through regulatory reform, a safe and stable system of affordable housing finance.
(2)
To improve the supervision of savings associations by strengthening capital, accounting, and other supervisory standards.
(3)
To curtail investments and other activities of savings associations that pose unacceptable risks to the Federal deposit insurance funds.
(4)
To promote the independence of the Federal Deposit Insurance Corporation from the institutions the deposits of which it insures, by providing an independent board of directors, adequate funding, and appropriate powers.
(5)
To put the Federal deposit insurance funds on a sound financial footing.
(6)
To establish an Office of Thrift Supervision in the Department of the Treasury, under the general oversight of the Secretary of the Treasury.
(7)
To establish a new corporation, to be known as the Resolution Trust Corporation, to contain, manage, and resolve failed savings associations.
(8)
To provide funds from public and private sources to deal expeditiously with failed depository institutions.
(9)
To strengthen the enforcement powers of Federal regulators of depository institutions.
(10)
To strengthen the civil sanctions and criminal penalties for defrauding or otherwise damaging depository institutions and their depositors.
* * * * * * *
TITLE III—

SAVINGS ASSOCIATIONS
* * * * * * *
SEC. 302.
[12 U.S.C. 1467 nt.]

SAVINGS PROVISIONS.
Notwithstanding the amendment made by this title to section 10 of the Home Owners' Loan Act and the repeal of section 416 of the National Housing Act—
(1)
any plan approved by the Federal Home Loan Bank Board under such section 10 for any Federal savings association shall continue in effect as long as such association adheres to the plan and continues to submit to the Comptroller of the Currency regular and complete reports on the association's progress in meeting the association's goals under the plan; and
(2)
any plan approved by the Federal Savings and Loan Insurance Corporation under such section 416 for any State savings association shall continue in effect as long as such association adheres to the plan and continues to submit to the Federal Deposit Insurance Corporation regular and complete reports on the association's progress in meeting the savings association's goals under the plan.
* * * * * * *
SEC. 305.

TRANSITIONAL RULES REGARDING CERTAIN LOANS AND EFFECTIVE DATES.
(a)

Divestiture of Certain Loans and Investments Not Required.—
[12 U.S.C. 1464 nt.]
The limitations on loans and investments contained in section 5(c) of the Home Owners' Loan Act, as amended by section 301, do not require the divestiture of any loan or investment that was lawful when made under the provisions of such section as those provisions were in effect at the time such loan or investment was made.
(b)
[Repealed by section 367(3) of Public Law 111–203.]
(c)

Effective Date.—
[12 U.S.C. 1461 nt.]
The amendments made by section 301 relating to civil penalties shall apply with respect to violations committed and activities engaged in after the date of the enactment of this Act, except that the increased maximum civil penalties of $5,000 and $25,000 per violation or per day may apply to such violations or activities committed or engaged in before such date with respect to an institution if such violations or activities—
(1)
are not already subject to a notice issued by the appropriate Federal banking agency or the Board (initiating an administrative proceeding); and
(2)
occurred after the completion of the last report of examination of the institution by the appropriate Federal banking agency (as defined in section 3 of the Federal Deposit Insurance Act) occurring before the date of the enactment of this Act.
* * * * * * *
SEC. 308.
[12 U.S.C. 1463 nt.]

PRESERVING MINORITY OWNERSHIP OF MINORITY FINANCIAL INSTITUTIONS.
(a)

Consultation on Methods.—
The Secretary of the Treasury shall consult with the Chairman of the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the Chairman of the National Credit Union Administration, and the Chairperson of the Board of Directors of the Federal Deposit Insurance Corporation on methods for best achieving the following goals:
(1)
Preserving the present number of minority depository institutions.
(2)
Preserving their minority character in cases involving mergers or acquisition of a minority depository institution by using general preference guidelines in the following order:
(A)
Same type of minority depository institution in the same city.
(B)
Same type of minority depository institution in the same State.
(C)
Same type of minority depository institution nationwide.
(D)
Any type of minority depository institution in the same city.
(E)
Any type of minority depository institution in the same State.
(F)
Any type of minority depository institution nationwide.
(G)
Any other bidders.
(3)
Providing technical assistance to prevent insolvency of institutions not now insolvent.
(4)
Promoting and encouraging creation of new minority depository institutions.
(5)
Providing for training, technical assistance, and educational programs.
(b)

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

Minority financial institution.—
The term “minority depository institution” means any depository institution that—
(A)
if a privately owned institution, 51 percent is owned by one or more socially and economically disadvantaged individuals;
(B)
if publicly owned, 51 percent of the stock is owned by one or more socially and economically disadvantaged individuals; and
(C)
in the case of a mutual institution where the majority of the Board of Directors, account holders, and the community which it services is predominantly minority.
(2)

Minority.—
The term “minority” means any black American, Native American, Hispanic American, or Asian American.
(c)

Reports.—
The Secretary of the Treasury, the Chairman of the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the Chairman of the National Credit Union Administration, and the Chairperson of Board of Directors of the Federal Deposit Insurance Corporation shall each submit an annual report to the Congress containing a description of actions taken to carry out this section.
TITLE IV—

TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY
* * * * * * *
SEC. 402.
[12 U.S.C. 1437 nt.]

CONTINUATION AND COORDINATION OF CERTAIN REGULATIONS.
(a)

Regulations Relating to Insurance Functions.—
All regulations and orders of the Federal Savings and Loan Insurance Corporation, or the Federal Home Loan Bank Board (in such Board's capacity as the board of trustees of such Corporation), which are in effect on the date of the enactment of this Act and relate to—
(1)
the provision, rates, or cancellation of insurance of accounts; or
(2)
the administration of the insurance fund of the Federal Savings and Loan Insurance Corporation,
shall remain in effect according to the terms of such regulations and orders and shall be enforceable by the Federal Deposit Insurance Corporation unless determined otherwise by such Corporation after consultation with the Comptroller of the Currency and, with respect to regulations and orders relating to the scope of deposit insurance coverage, pursuant to subsection (c).
(b)
[Repealed by section 367(5)(B) of Public Law 111–203.]
(c)

Procedure for Differences in Deposit Insurance Coverage Between FSLIC and FDIC.—
(1)

Transition rule.—
Until the effective date of regulations prescribed under paragraph (3)(B), any determination of the amount of any insured deposit in any depository institution which becomes an insured depository institution as a result of the amendment made to section 4(a) of the Federal Deposit Insurance Act by section 205(1) of this Act shall be made in accordance with the regulations and interpretations of the Federal Savings and Loan Insurance Corporation for determining the amount of an insured account which were in effect on the day before the date of the enactment of this Act.
(2)

Limitation on extent of coverage.—
During the period beginning on the date of the enactment of this Act and ending on the effective date of regulations prescribed under paragraph (3)(B), the amount of any insured account which is required to be treated as an insured deposit pursuant to paragraph (1) shall not exceed the amount of insurance to which such insured account would otherwise have been entitled pursuant to the regulations and interpretations of the Federal Savings and Loan Insurance Corporation which were in effect on the day before the date of the enactment of this Act.
(3)

Uniform treatment of insured deposits.—
The Federal Deposit Insurance Corporation shall—
(A)
review its regulations, principles, and interpretations for deposit insurance coverage and those established by the Federal Savings and Loan Insurance Corporation; and
(B)
on or before the end of the 270-day period beginning on the date of the enactment of this Act, prescribe a uniform set of regulations which shall be applicable to all insured deposits in insured depository institutions (except to the extent any provision of this Act, any amendment made by this Act to the Federal Deposit Insurance Act, or any other provision of law requires or explicitly permits the Federal Deposit Insurance Corporation to treat insured deposits of Savings Association Insurance Fund members differently than insured deposits of Bank Insurance Fund members).
(4)

Factors required to be considered.—
In prescribing regulations providing for the uniform treatment of deposit insurance coverage, the Federal Deposit Insurance Corporation shall consider all relevant factors necessary to promote safety and soundness, depositor confidence, and the stability of deposits in insured depository institutions.
(5)

Notice; effective date.—
Regulations prescribed under this subsection shall—
(A)
provide for effective notice to depositors in insured depository institutions of any change in deposit insurance coverage which would result under such regulations; and
(B)
take effect on or before the end of the 90-day period beginning on the date such regulations become final.
(6)

Definitions.—
For purposes of this subsection—
(A)

Insured account.—
The term “insured account” has the meaning given to such term in section 401(c) of the National Housing Act (as in effect before the date of the enactment of this Act).
(B)

Insured depository institution.—
The term “insured depository institution” has the meaning given to such term in section 3(c)(2) of the Federal Deposit Insurance Act.
(d)

Interim Treatment of Custodial Accounts.—
(1)

In general.—
Subject to paragraph (2) and notwithstanding subsection (a) or any limitation contained in the Federal Deposit Insurance Act relating to the amount of deposit insurance available to any 1 borrower, amounts held in custodial accounts in insured depository institutions (as defined in section 3(c)(2) of such Act) for the payment of principal, interest, tax, and insurance payments for mortgage borrowers, shall be insured under the Federal Deposit Insurance Act in the amount of $100,000 per mortgage borrower.
(2)

Treatment after effective date of new regulations.—
After the effective date of the regulations prescribed under subsection (c)—
(A)
the amount of deposit insurance available for custodial accounts shall be determined in accordance with such regulations; and
(B)
paragraph (1) shall cease to apply with respect to such accounts.
(e)

Treatment of References in Adjustable Rate Mortgage Instruments.—
(1)

In general.—
For purposes of adjustable rate mortgage instruments that are in effect as of the date of enactment of this Act, any reference in the instrument to the Federal Savings and Loan Insurance Corporation, the Federal Home Loan Bank Board, or institutions insured by the Federal Savings and Loan Insurance Corporation before such date shall be treated as a reference to the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, the Comptroller of the Currency, or institutions which are members of the Savings Association Insurance Fund, as appropriate on the basis of the transfer of functions pursuant to this Act, unless the context of the reference requires otherwise.
(2)

Substitution for indexes.—
If any index used to calculate the applicable interest rate on any adjustable rate mortgage instrument is no longer calculated and made available as a direct or indirect result of the enactment of this Act, any index—
(A)
made available by the Comptroller of the Currency, the Chairperson of the Federal Deposit Insurance Corporation, or the Chairperson of the Federal Housing Finance Agency pursuant to paragraph (3); or
(B)
determined by the Comptroller of the Currency, the Chairperson of the Federal Deposit Insurance Corporation, or the Chairperson of the Federal Housing Finance Agency, pursuant to paragraph (4), to be substantially similar to the index which is no longer calculated or made available,
may be substituted by the holder of any such adjustable rate mortgage instrument upon notice to the borrower.
(3)

Agency action required to provide continued availability of indexes.—
Promptly after the enactment of this subsection, the Comptroller of the Currency, the Chairperson of the Federal Deposit Insurance Corporation, and the Chairperson of the Federal Housing Finance Agency shall take such action as may be necessary to assure that the indexes prepared by the Federal Savings and Loan Insurance Corporation, the Federal Home Loan Bank Board, and the Federal home loan banks immediately prior to the enactment of this subsection and used to calculate the interest rate on adjustable rate mortgage instruments continue to be available.
(4)

Requirements relating to substitute indexes.—
If any agency can no longer make available an index pursuant to paragraph (3), an index that is substantially similar to such index may be substituted for such index for purposes of paragraph (2) if the Comptroller of the Currency, the Chairperson of the Federal Deposit Insurance Corporation, or the Chairperson of the Federal Housing Finance Agency, as the case may be, determines, after notice and opportunity for comment, that—
(A)
the new index is based upon data substantially similar to that of the original index; and
(B)
the substitution of the new index will result in an interest rate substantially similar to the rate in effect at the time the original index became unavailable.
SEC. 403.
[12 U.S.C. 1437 nt.]

DETERMINATION OF TRANSFERRED FUNCTIONS AND EMPLOYEES.
(a)

All FHLBB and FSLIC Employees Shall Be Transferred.—
All employees of the Federal Home Loan Bank Board and the Federal Savings and Loan Insurance Corporation shall be identified for transfer under subsection (b) to the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, or the Federal Housing Finance Board.
(b)

Functions and Employees Transferred.—
(1)

In general.—
The Director of the Office of Thrift Supervision, the Chairperson of the Oversight Board of the Resolution Trust Corporation, the Chairperson of the Federal Deposit Insurance Corporation, the Chairperson of the Federal Housing Finance Board, and the Chairman of the Federal Home Loan Bank Board (as of the day before the date of the enactment of this Act) shall jointly determine the functions or activities of the Federal Home Loan Bank Board and the Federal Savings and Loan Insurance Corporation, and the number of employees of such Board and Corporation necessary to perform or support such functions or activities, which are transferred from the Federal Home Loan Bank Board and the Federal Savings and Loan Insurance Corporation to the Office of Thrift Supervision, the Resolution Trust Corporation, the Federal Deposit Insurance Corporation, or the Federal Housing Finance Board, as the case may be.
(2)

Allocation of employees.—
The Director of the Office of Thrift Supervision, the Chairperson of the Oversight Board of the Resolution Trust Corporation, the Chairperson of the Federal Deposit Insurance Corporation, and the Chairperson of the Federal Housing Finance Board shall allocate the employees of the Federal Home Loan Bank Board and the Federal Savings and Loan Insurance Corporation consistent with the number determined pursuant to paragraph (1) in a manner which such Director, Chairman, and Chairpersons, in their sole discretion, deem equitable, except that, within work units, the agency preferences of individual employees shall be accommodated as far as possible.
(c)

Federal Home Loan Bank Personnel.—
Employees of the Federal home loan banks or the joint offices of such banks who, on the day before the date of the enactment of this Act, are performing functions or activities on behalf of the Federal Home Loan Bank Board or the Federal Savings and Loan Insurance Corporation shall be treated as employees of the Federal Home Loan Bank Board or the Federal Savings and Loan Insurance Corporation for purposes of determining, pursuant to subsection (b)(1), the number of employees performing or supporting functions or activities of such Board or Corporation to the extent such functions or activities are transferred to the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, the Resolution Trust Corporation, or the Federal Housing Finance Board.
(d)

FSLIC Employees Engaged in Conservatorship or Receivership Functions.—
Individuals who, on the day before the date of the enactment of this Act, are employed by the Federal Savings and Loan Insurance Corporation in such Corporation's capacity as conservator or receiver of any insured depository institution shall be treated as employees of the Federal Savings and Loan Insurance Corporation for purposes of determining, pursuant to subsection (b)(1), the number of employees performing or supporting functions or activities of such Corporation if such conservatorship or receivership is transferred to the Federal Deposit Insurance Corporation or the Resolution Trust Corporation.
SEC. 404.
[12 U.S.C. 1437 nt.]

RIGHTS OF EMPLOYEES OF ABOLISHED AGENCIES.
All employees identified for transfer under subsection (b) of section 403 (other than individuals described in subsection (c) or (d) of such section) shall be entitled to the following rights:
(1)
Each employee so identified shall be transferred to the appropriate agency or entity for employment no later than 60 days after the date of the enactment of this Act and such transfer shall be deemed a transfer of function for the purpose of section 3503 of title 5, United States Code.
(2)
Each transferred employee shall be guaranteed a position with the same status, tenure, grade, and pay as that held on the day immediately preceding the transfer. Each such employee holding a permanent position shall not be involuntarily separated or reduced in grade or compensation for 1 year after the date of transfer, except for cause or, if the employee is a temporary employee, separated in accordance with the terms of the appointment.
(3)
(A)
In the case of employees occupying positions in the excepted service or the Senior Executive Service, any appointment authority established pursuant to law or regulations of the Office of Personnel Management for filling such positions shall be transferred, subject to subparagraph (B).
(B)
An agency or entity may decline a transfer of authority under subparagraph (A) (and the employees appointed pursuant thereto) to the extent that such authority relates to positions excepted from the competitive service because of their confidential, policy-making, policy-determining, or policy-advocating character, and noncareer positions in the Senior Executive Service (within the meaning of section 3132(a)(7) of title 5, United States Code).
(4)
If any agency or entity to which employees are transferred determines, after the end of the 1-year period beginning on the date the transfer of functions to such agency or entity is completed, that a reorganization of the combined work force is required, that reorganization shall be deemed a “major reorganization” for purposes of affording affected employees retirement under section 8336(d)(2) or 8414(b)(1)(B) of title 5, United States Code.
(5)
Any employee accepting employment with any agency or entity (other than the Office of Thrift Supervision) as a result of such transfer may retain for 1 year after the date such transfer occurs membership in any employee benefit program of the Federal Home Loan Bank Board, including insurance, to which such employee belongs on the date of the enactment of this Act if—
(A)
the employee does not elect to give up the benefit or membership in the program; and
(B)
the benefit or program is continued by the Director of the Office of Thrift Supervision.
The difference in the costs between the benefits which would have been provided by such agency or entity and those provided by this section shall be paid by the Director of the Office of Thrift Supervision. If any employee elects to give up membership in a health insurance program or the health insurance program is not continued by the Director of the Office of Thrift Supervision, the employee shall be permitted to select an alternate Federal health insurance program within 30 days of such election or notice, without regard to any other regularly scheduled open season.
(6)
Any employee employed by the Office of Thrift Supervision as a result of the transfer may retain membership in any employee benefit program of the Federal Home Loan Bank Board, including insurance, which such employee has on the date of enactment of this Act, if such employee does not elect to give up such membership and the benefit or program is continued by the Director of the Office of Thrift Supervision. If any employee elects to give up membership in a health insurance program or the health insurance program is not continued by the Director of the Office of Thrift Supervision, such employee shall be permitted to select an alternate Federal health insurance program within 30 days of such election or discontinuance, without regard to any other regularly scheduled open season.
(7)
A transferring employee in the Senior Executive Service shall be placed in a comparable position at the agency or entity to which such employee is transferred.
(8)
Transferring employees shall receive notice of their position assignments not later than 120 days after the effective date of their transfer.
(9)
Upon the termination of the Resolution Trust Corporation pursuant to section 21A(m) of the Federal Home Loan Bank Act, any employee of the Federal Deposit Insurance Corporation assigned to the Resolution Trust Corporation shall be reassigned to a position within the Federal Deposit Insurance Corporation in accordance with the provisions of paragraphs (2) and (4) through (7) of this subsection, except that the liability for any difference in the costs of benefits described in paragraph (5) shall be a liability of the Resolution Trust Corporation and not the Office of Thrift Supervision.
SEC. 405.
[12 U.S.C. 1437 nt.]

DIVISION OF PROPERTY AND FACILITIES.
Before the end of the 60-day period beginning on the date of the enactment of this Act, the Director of the Office of Thrift Supervision, the Chairperson of the Oversight Board of the Resolution Trust Corporation, the Chairperson of the Federal Deposit Insurance Corporation, and the Chairperson of the Federal Housing Finance Board shall jointly divide all property of the Federal Savings and Loan Insurance Corporation and the Federal Home Loan Bank Board used to perform functions and activities of the Federal Home Loan Bank Board among the Office of Thrift Supervision, the Resolution Trust Corporation, the Federal Deposit Insurance Corporation, and the Federal Housing Finance Board in accordance with the division of responsibilities, functions, and activities effected by this Act. Any disagreement between them in so doing shall be resolved by the Director of the Office of Management and Budget.
* * * * * * *
TITLE VII—

FEDERAL HOME LOAN BANK SYSTEM REFORMS
Subtitle A—

Federal Home Loan Bank Act Amendments
* * * * * * *
SEC. 722.
[12 U.S.C. 1437 nt.]

TRANSFERRED EMPLOYEES OF FEDERAL HOME LOAN BANKS AND JOINT OFFICES.
(a)

In General.—
Each employee of the Federal Home Loan Banks or joint offices of such Banks performing a function identified for transfer under section 403 of this Act, including employees who otherwise would be ineligible for employment by the United States because of their citizenship, shall be transferred for employment not later than 60 days after the date of the enactment of this Act.
(b)

Notice to Employees.—
Transferring employees shall receive notice of their position assignments not later than 120 days after the effective date of their transfer.
(c)

Guaranteed Position.—
Each transferred employee shall be guaranteed a position with the same status and tenure as that held by such employee on the day immediately preceding the transfer. Each such employee holding a permanent position shall not be involuntarily separated for one year after the date of transfer, except for cause.
(d)

Pay and Benefits.—
Each employee transferred under this section shall be entitled to receive, during the one-year period immediately following the transfer, pay and benefits comparable to those received by such employee immediately preceding the transfer. Where necessary or appropriate to further the safety and soundness of the thrift industry, the employing agency may continue the pre-transfer compensation of any transferring employee for up to 2 years beyond the expiration of the period provided for under the preceding sentence. Such pay and benefits shall be subject to the comparability provisions of this Act. Any transferred employee who suffers a reduction of pay or benefits as a result of such comparability provisions shall be compensated for such reduction during the 1 year period following the transfer by assessments from the Federal Home Loan Bank or joint office of such Banks, from which the employee transferred. In any event, this subsection shall only apply to a transferred employee while such employee remains with the agency to which the employee is transferred.
(e)

Health Insurance.—
If the health insurance program of a transferred employee is not continued by the agency to which the employee is transferred, such employee may elect to participate in the agency's health insurance program notwithstanding health conditions pre-existing at the time of election or enrollment into an alternate health insurance program of the agency to which he or she is transferred and without regard to any other regularly scheduled open season. Such election shall be made within 30 days of the transfer.
(f)

Equitable Treatment.—
The Director of the Office of Thrift Supervision or the Chairperson of the Federal Housing Finance Board shall take such action as is necessary on a case-by-case basis so that employees transferring under this section receive equitable treatment regarding credit for prior service with a Federal entity or instrumentality, or with a Federal Home Loan Bank or joint office of such Banks, with respect to the transferring employees' retirement accounts and the transferring employees' accrued leave or vacation time, in recognition of the transferring employees' supervisory service.
(g)

Special Rule for Certain Annuitants.—
An individual who was a reemployed annuitant on July 26, 1989, and who is transferred under this section, shall not be subject to the deduction from pay required by section 8344 or 8468 of title 5, United States Code, during the 1-year period beginning on the date of enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.
* * * * * * *
TITLE IX—

REGULATORY ENFORCEMENT AUTHORITY AND CRIMINAL ENHANCEMENTS
* * * * * * *
Subtitle E—

Civil Penalties For Violations Involving Financial Institutions
SEC. 951.
[12 U.S.C. 1833a]

CIVIL PENALTIES.
(a)

In General.—
Whoever violates any provision of law to which this section is made applicable by subsection (c) shall be subject to a civil penalty in an amount assessed by the court in a civil action under this section.
(b)

Maximum Amount of Penalty.—
(1)

Generally.—
The amount of the civil penalty shall not exceed $1,000,000.
(2)

Special rule for continuing violations.—
In the case of a continuing violation, the amount of the civil penalty may exceed the amount described in paragraph (1) but may not exceed the lesser of $1,000,000 per day or $5,000,000.
(3)

Special rule for violations creating gain or loss.—
(A)
If any person derives pecuniary gain from the violation, or if the violation results in pecuniary loss to a person other than the violator, the amount of the civil penalty may exceed the amounts described in paragraphs (1) and (2) but may not exceed the amount of such gain or loss.
(B)
As used in this paragraph, the term “person” includes the Bank Insurance Fund, the Savings Association Insurance Fund, and after the merger of such funds, the Deposit Insurance Fund, and the National Credit Union Share Insurance Fund.
(c)

Violations to Which Penalty Is Applicable.—
This section applies to a violation of, or a conspiracy to violate—
(1)
section 215, 656, 657, 1005, 1006, 1007, 1014, or 1344 of title 18, United States Code;
(2)
section 287, 1001, 1032, 13412 or 1343 of title 18, United States Code, affecting a federally insured financial institution; or
^2
Section 2596(d)(1) of the Crime Control Act of 1990 (104 Stat. 4908), as amended by section 330003 of the Violent Crime Control and Law Enforcement Act of 1994 (P.L. 103–322), amended subsection (c)(2) by inserting “287, 1001, 1032,” before “1341;”. The law did not reflect the existence of a semicolon after “1341”. Subsequently, section 4(b)(2)(B)(i) of the Small Business Investment Company Amendments Act of 2001 (P.L. 107–100; 115 Stat. 966–967) amends section 951(c)(2) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 by striking “1341;” and inserting “1341”. The amendment made by section 4(b)(2)(B)(i) of P.L. 107–100 probably should have been made to section 2596(d)(1) of the Crime Control Act of 1990 (104 Stat. 4908). Subsection (c)(2), as shown above, reflects as if it had been made to such Act in order to reflect the probable intent of Congress.
(3)
section 16(a) of the Small Business Act (15 U.S.C. 645(a)).
(d)

Effective Date.—
This section shall apply to violations occurring on or after August 10, 1984.
(e)

Attorney General to Bring Action.—
A civil action to recover a civil penalty under this section shall be commenced by the Attorney General.
(f)

Burden of Proof.—
In a civil action to recover a civil penalty under this section, the Attorney General must establish the right to recovery by a preponderance of the evidence.
(g)

Administrative Subpoenas.—
(1)

In general.—
For the purpose of conducting a civil investigation in contemplation of a civil proceeding under this section, the Attorney General may—
(A)
administer oaths and affirmations;
(B)
take evidence; and
(C)
by subpoena, summon witnesses and require the production of any books, papers, correspondence, memoranda, or other records which the Attorney General deems relevant or material to the inquiry. Such subpoena may require the attendance of witnesses and the production of any such records from any place in the United States at any place in the United States designated by the Attorney General.
(2)

Procedures applicable.—
The same procedures and limitations as are provided with respect to civil investigative demands in subsections (g), (h), and (j) of section 1968 of title 18, United States Code, apply with respect to a subpoena issued under this subsection. Process required by such subsections to be served upon the custodian shall be served on the Attorney General. Failure to comply with an order of the court to enforce such subpoena shall be punishable as contempt.
(3)

Limitation.—
In the case of a subpoena for which the return date is less than 5 days after the date of service, no person shall be found in contempt for failure to comply by the return date if such person files a petition under paragraph (2) not later than 5 days after the date of service.
(h)

Statute of Limitations.—
A civil action under this section may not be commenced later than 10 years after the cause of action accrues.
* * * * * * *
TITLE X—

STUDIES OF FEDERAL DEPOSIT INSURANCE, BANKING SERVICES, AND THE SAFETY AND SOUNDNESS OF GOVERNMENT-SPONSORED ENTERPRISES
SEC. 1001.

STUDY OF FEDERAL DEPOSIT INSURANCE SYSTEM.
(a)

In General.—
The Secretary of the Treasury, in consultation with the Comptroller of the Currency, the Chairman of the Board of Governors of the Federal Reserve System, the Director of the Office of Thrift Supervision, the Chairperson of the Federal Deposit Insurance Corporation, the Chairman of the National Credit Union Administration Board, the Director of the Office of Management and Budget, and individuals from the private sector, shall conduct a study of the Federal deposit insurance system.
(b)

Topics.—
As part of the study required under subsection (a), the Secretary of the Treasury shall investigate, review, and evaluate the following:
(1)
The feasibility of establishing a deposit insurance premium rate structure which would take into account, on an institution-by-institution basis—
(A)
asset quality risk;
(B)
interest rate risk;
(C)
quality of management; and
(D)
profitability and capital.
(2)
Incentives for market discipline, including the advantages of—
(A)
limiting each depositor to 1 insured account per institution;
(B)
reducing the amount insured, or providing for a graduated decrease in the percentage of the amounts deposited which are insured as the amounts deposited increase;
(C)
combining Federal with private insurance in order to bring the market discipline of private insurance to bear on the management of the depository institution; and
(D)
ensuring, by law or regulation, that on the closing of any insured depository institution, the appropriate Federal insurance fund will honor only its explicit liabilities, and will never make good any losses on deposits not explicitly covered by Federal deposit insurance.
(3)
The scope of deposit insurance coverage and its impact on the liability of the insurance fund.
(4)
The feasibility of market value accounting, assessments on foreign deposits, limitations on brokered deposits, the addition of collateralized borrowings to the deposit insurance base, and multiple insured accounts.
(5)
The impact on the deposit insurance funds of varying State and Federal bankruptcy exemptions and the feasibility of—
(A)
uniform exemptions;
(B)
limits on exemptions when necessary to repay obligations owed to federally insured depository institutions; and
(C)
requiring borrowers from federally insured depository institutions to .post a personal or corporate bond when obtaining a mortgage on real property.
(6)
Policies to be followed with respect to the recapitalization or closure of insured depository institutions whose capital is depleted to, or near the point of, insolvency.
(7)
The efficiency of housing subsidies through the Federal home loan bank system.
(8)
Alternatives to Federal deposit insurance.
(9)
The feasibility of developing and administering, through the appropriate Federal banking agency, an examination of the principles and techniques of risk management and the application of such principles and techniques to the management of insured institutions.
(10)
The adequacy of capital of insured credit unions and the National Credit Union Share Insurance Fund, including whether the supervision of such fund should be separated from the other functions of the National Credit Union Administration.
(11)
The feasibility of requiring, by statute or other means, that—
(A)
independent auditors and accountants of a depository institution report the results of any audit of the institution to the relevant regulatory agency or agencies;
(B)
a regulator share reports on a depository institution with the institution's independent auditors and accountants; and
(C)
independent auditors and accountants participate in conferences between the regulator and the depository institution.
(12)
The feasibility of adopting regulations which are the same as or similar to the provisions of England's Banking Act, 1987, ch. 22 (4 Halsbury's Statutes of England and Wales 527- 650 (198711, enacted on May 15, 1987, relating to the Bank of England's relationship with auditors and reporting accountants (including sections 8, 39, 41, 45, 46, 47, 82, 83, 85, and 94 of such Act).
(c)

Final Report.—
Not later than the close of the 18-month period beginning on the date of the enactment of this Act, the Secretary of the Treasury shall submit to the Congress a final report containing a detailed statement of findings made, and conclusions drawn from, the study conducted under this section, including such recommendations for administrative and legislative action as the Secretary determines to be appropriate.
* * * * * * *
SEC. 1002.
[12 U.S.C. 1811 nt.]

SURVEY OF BANK FEES AND SERVICES.
(a)

Annual Survey Required.—
The Board of Governors of the Federal Reserve System shall obtain a sample, which is representative by geographic location and size of the institution, of—
(1)
certain retail banking services provided by insured depository institutions; and
(2)
the fees, if any, which are imposed by such institutions for providing any such service, including fees imposed for not sufficient funds, deposit items returned, and automated teller machine transactions.
(b)

Annual Report to Congress Required.—
(1)

Preparation.—
The Board of Governors of the Federal Reserve System shall prepare a report of the results of each survey conducted pursuant to subsection (a).
(2)

Contents of the report.—
Each report prepared pursuant to paragraph (1) shall include—
(A)
a description of any discernible trend, in the Nation as a whole, in each of the 50 States, and in each consolidated metropolitan statistical area or primary metropolitan statistical area (as defined by the Director of the Office of Management and Budget), in the cost and availability of retail banking services (including fees imposed for providing such services), that delineates differences between insured depository institutions on the basis of both the size of the institution and any engagement of the institution in multistate activity; and
(B)
a description of the correlation, if any, among the following factors:
(i)
An increase or decrease in the amount of any deposit insurance premium assessed by the Federal Deposit Insurance Corporation against insured depository institutions.
(ii)
An increase or decrease in the amount of the fees imposed by such institutions for providing retail banking services.
(iii)
A decrease in the availability of such services.
(3)

Submission to congress.—
The Board of Governors of the Federal Reserve System shall submit an annual report to the Congress not later than September 1, 1995, and not later than June 1 of each subsequent year.
TITLE XI—

REAL ESTATE APPRAISAL REFORM AMENDMENTS
SEC. 1101.
[12 U.S.C. 3331]

PURPOSE.
The purpose of this title is to provide that Federal financial and public policy interests in real estate related transactions will be protected by requiring that real estate appraisals utilized in connection with federally related transactions are performed in writing, in accordance with uniform standards, by individuals whose competency has been demonstrated and whose professional conduct will be subject to effective supervision.
[Section 1102 amended the Federal Financial Institutions Examination Council Act of 1978.]
SEC. 1103.
[12 U.S.C. 3332]

FUNCTIONS OF APPRAISAL SUBCOMMITTEE.
(a)

In General.—
The Appraisal Subcommittee shall—
(1)
monitor the requirements established by States—
(A)
for the certification and licensing of individuals who are qualified to perform appraisals in connection with federally related transactions, including a code of professional responsibility; and
(B)
for the registration and supervision of the operations and activities of an appraisal management company;
(2)
monitor the requirements established by the Federal financial institutions regulatory agencies with respect to—
(A)
appraisal standards for federally related transactions under their jurisdiction, and
(B)
determinations as to which federally related transactions under their jurisdiction require the services of a State certified appraiser and which require the services of a State licensed appraiser;
(3)
maintain a national registry of State certified and licensed appraisers who are eligible to perform appraisals in federally related transactions; and3
^3
So in law. The word “and” at the end of paragraph (3) probably shouldn't appear and the period at the end of paragraphs (4) and (5) probably should read “;” and “; and”, respectively.
(4)
transmit an annual report to the Congress not later than January 31 of each year which describes the manner in which each function assigned to the Appraisal Subcommittee has been carried out during the preceding year.
(5)
transmit an annual report to the Congress not later than June 15 of each year that describes the manner in which each function assigned to the Appraisal Subcommittee has been carried out during the preceding year. The report shall also detail the activities of the Appraisal Subcommittee, including the results of all audits of State appraiser regulatory agencies, and provide an accounting of disapproved actions and warnings taken in the previous year, including a description of the conditions causing the disapproval and actions taken to achieve compliance.
(6)
maintain a national registry of appraisal management companies that either are registered with and subject to supervision of a State appraiser certifying and licensing agency or are operating subsidiaries of a Federally regulated financial institution.
(b)

Monitoring and Reviewing Foundation.—
The Appraisal Subcommittee shall monitor and review the practices, procedures, activities, and organizational structure of the Appraisal Foundation.
SEC. 1104.
[12 U.S.C. 3333]

CHAIRPERSON OF APPRAISAL SUBCOMMITTEE; TERM OF CHAIRPERSON; MEETINGS.
(a)

Chairperson.—
The Council shall select the Chairperson of the subcommittee. The term of the Chairperson shall be 2 years.
(b)

Meetings; Quorum; Voting.—
The Appraisal Subcommittee shall meet in public session after notice in the Federal Register, but may close certain portions of these meetings related to personnel and review of preliminary State audit reports, at the call of the Chairperson or a majority of its members when there is business to be conducted. A majority of members of the Appraisal Subcommittee shall constitute a quorum but 2 or more members may hold hearings. Decisions of the Appraisal Subcommittee shall be made by the vote of a majority of its members. The subject matter discussed in any closed or executive session shall be described in the Federal Register notice of the meeting.
SEC. 1105.
[12 U.S.C. 3334]

OFFICERS AND STAFF.
The Chairperson of the Appraisal Subcommittee shall appoint such officers and staff as may be necessary to carry out the functions of this title consistent with the appointment and compensation practices of the Council.
SEC. 1106.
[12 U.S.C. 3335]

POWERS OF APPRAISAL SUBCOMMITTEE.
The Appraisal Subcommittee may, for the purpose of carrying out this title, establish advisory committees, hold hearings prescribe regulations in accordance with chapter 5 of title 5, United States Code (commonly referred to as the Administrative Procedures Act) after notice and opportunity for comment,,4 sit and act at times and places, take testimony, receive evidence, provide information, and perform research, as the Appraisal Subcommittee considers appropriate. Any regulations prescribed by the Appraisal Subcommittee shall (unless otherwise provided in this title) be limited to the following functions: temporary practice, national registry, information sharing, and enforcement. For purposes of prescribing regulations, the Appraisal Subcommittee shall establish an advisory committee of industry participants, including appraisers, lenders, consumer advocates, real estate agents, and government agencies, and hold meetings as necessary to support the development of regulations.
^4
Two commas so in law. See amendment made by section 1473(d)(1) of Public Law 111–203.
SEC. 1107.
[12 U.S.C. 3336]

PROCEDURES FOR ESTABLISHING APPRAISAL STANDARDS AND REQUIRING THE USE OF CERTIFIED AND LICENSED APPRAISERS.
Appraisal standards and requirements for using State certified and licensed appraisers in federally related transactions pursuant to this title shall be prescribed in accordance with procedures set forth in section 553 of title 5, United States Code, including the publication of notice and receipt of written comments or the holding of public hearings with respect to any standards or requirements proposed to be established.
SEC. 1108.
[12 U.S.C. 3337]

STARTUP FUNDING.
(a)

In General.—
For purposes of this title, the Secretary of the Treasury shall pay to the Appraisal Subcommittee a one-time payment of $5,000,000 on the date of the enactment of this Act. Thereafter, expenses of the subcommittee shall be funded through the collection of registry fees from certain certified and licensed appraisers pursuant to section 1109 or, if required, pursuant to section 1122(b) of this title.
(b)

Additional Funds.—
Except as provided in section 1122(b) of this title, funds in addition to the funds provided under subsection (a) may be made available to the Appraisal Subcommittee only if authorized and appropriated by law.
(c)

Repayment of Treasury Loan.—
Not later than September 30, 1998, the Appraisal Subcommittee shall repay to the Secretary of the Treasury the unpaid portion of the $5,000,000 paid to the Appraisal Subcommittee pursuant to this section.
SEC. 1109.
[12 U.S.C. 3338]

ROSTER OF STATE CERTIFIED OR LICENSED APPRAISERS; AUTHORITY TO COLLECT AND TRANSMIT FEES.
(a)

In General.—
Each State with an appraiser certifying and licensing agency whose certifications and licenses comply with this title, shall—
(1)
transmit to the Appraisal Subcommittee, no less than annually, a roster listing individuals who have received a State certification or license in accordance with this title;
(2)
transmit reports on the issuance and renewal of licenses and certifications, sanctions, disciplinary actions, license and certification revocations, and license and certification suspensions on a timely basis to the national registry of the Appraisal Subcommittee;
(3)
transmit reports on a timely basis of supervisory activities involving appraisal management companies or other third-party providers of appraisals and appraisal management services, including investigations initiated and disciplinary actions taken; and
(4)
collect—
(A)
from such individuals who perform or seek to perform appraisals in federally related transactions, an annual registry fee of not more than $40, such fees to be transmitted by the State agencies to the Council on an annual basis; and
(B)
from an appraisal management company that either has registered with a State appraiser certifying and licensing agency in accordance with this title or operates as a subsidiary of a federally regulated financial institution, an annual registry fee of—
(i)
in the case of such a company that has been in existence for more than a year, $25 multiplied by the number of appraisers working for or contracting with such company in such State during the previous year, but where such $25 amount may be adjusted, up to a maximum of $50, at the discretion of the Appraisal Subcommittee, if necessary to carry out the Subcommittee's functions under this title; and
(ii)
in the case of such a company that has not been in existence for more than a year, $25 multiplied by an appropriate number to be determined by the Appraisal Subcommittee, and where such number will be used for determining the fee of all such companies that were not in existence for more than a year, but where such $25 amount may be adjusted, up to a maximum of $50, at the discretion of the Appraisal Subcommittee, if necessary to carry out the Subcommittee's functions under this title.
Subject to the approval of the Council, the Appraisal Subcommittee may adjust the dollar amount of registry fees under paragraph (4)(A), up to a maximum of $80 per annum, as necessary to carry out its functions under this title. The Appraisal Subcommittee shall consider at least once every 5 years whether to adjust the dollar amount of the registry fees to account for inflation. In implementing any change in registry fees, the Appraisal Subcommittee shall provide flexibility to the States for multi-year certifications and licenses already in place, as well as a transition period to implement the changes in registry fees. In establishing the amount of the annual registry fee for an appraisal management company, the Appraisal Subcommittee shall have the discretion to impose a minimum annual registry fee for an appraisal management company to protect against the under reporting of the number of appraisers working for or contracted by the appraisal management company.
(b)

Use of Amounts Appropriated or Collected.—
Amounts appropriated for or collected by the Appraisal Subcommittee under this section shall be used—
(1)
to maintain a registry of individuals who are qualified and eligible to perform appraisals in connection with federally related transactions;
(2)
to support its activities under this title;
(3)
to reimburse the general fund of the Treasury for amounts appropriated to and expended by the Appraisal Subcommittee during the 24-month startup period following the date of the enactment of this title;
(4)
to make grants in such amounts as it deems appropriate to the Appraisal Foundation, to help defray those costs of the foundation relating to the activities of its Appraisal Standards and Appraiser Qualification Boards;
(5)
to make grants to State appraiser certifying and licensing agencies, in accordance with policies to be developed by the Appraisal Subcommittee, to support the efforts of such agencies to comply with this title, including—
(A)
the complaint process, complaint investigations, and appraiser enforcement activities of such agencies; and
(B)
the submission of data on State licensed and certified appraisers and appraisal management companies to the National appraisal registry, including information affirming that the appraiser or appraisal management company meets the required qualification criteria and formal and informal disciplinary actions; and
(6)
to report to all State appraiser certifying and licensing agencies when a license or certification is surrendered, revoked, or suspended.
SEC. 1110.
[12 U.S.C. 3339]

FUNCTIONS OF THE FEDERAL FINANCIAL INSTITUTIONS REGULATORY AGENCIES RELATING TO APPRAISAL STANDARDS.
Each Federal financial institutions regulatory agency and the Resolution Trust Corporation shall prescribe appropriate standards for the performance of real estate appraisals in connection with federally related transactions under the jurisdiction of each such agency or instrumentality. These rules shall require, at a minimum—
(1)
that real estate appraisals be performed in accordance with generally accepted appraisal standards as evidenced by the appraisal standards promulgated by the Appraisal Standards Board of the Appraisal Foundation;
(2)
that such appraisals shall be written appraisals; and
(3)
that such appraisals shall be subject to appropriate review for compliance with the Uniform Standards of Professional Appraisal Practice.
Each such agency or instrumentality may require compliance with additional standards if it makes a determination in writing that such additional standards are required in order to properly carry out its statutory responsibilities.
SEC. 1111.
[12 U.S.C. 3340]

TIME FOR PROPOSAL AND ADOPTION OF STANDARDS.
Appraisal standards established under this title shall be proposed not later than 6 months and shall be adopted in final form and become effective not later than 12 months after the date of the enactment of this Act.
SEC. 1112.
[12 U.S.C. 3341]

FUNCTIONS OF THE FEDERAL FINANCIAL INSTITUTIONS REGULATORY AGENCIES RELATING TO APPRAISER QUALIFICATIONS.
(a)

In General.—
Each Federal financial institutions regulatory agency and the Resolution Trust Corporation shall prescribe, in accordance with sections 1113 and 1114 of this title, which categories of federally related transactions should be appraised by a State certified appraiser and which by a State licensed appraiser under this title.
(b)

Threshold Level.—
Each Federal financial institutions regulatory agency and the Resolution Trust Corporation may establish a threshold level at or below which a certified or licensed appraiser is not required to perform appraisals in connection with federally related transactions, if such agency determines in writing that such threshold level does not represent a threat to the safety and soundness of financial institutions, and receives concurrence from the Bureau of Consumer Financial Protection that such threshold level provides reasonable protection for consumers who purchase 1–4 unit single-family residences.
(c)

GAO Study of Appraisals in Connection With Real Estate Related Financial Transactions Below the Threshold Level.—
(1)

GAO studies.—
The Comptroller General of the United States may conduct, under such conditions as the Comptroller General determines appropriate, studies on the adequacy and quality of appraisals or evaluations conducted in connection with real estate related financial transactions below the threshold level established under subsection (b), taking into account—
(A)
the cost to any financial institution involved in any such transaction;
(B)
the possibility of losses to the Deposit Insurance Fund or the National Credit Union Share Insurance Fund;
(C)
the cost to any customer involved in any such transaction; and
(D)
the effect on low-income housing.
(2)

Reports to congress and the appropriate federal financial institutions regulatory agencies.—
Upon completing each of the studies referred to in paragraph (1), the Comptroller General shall submit a report on the Comptroller General's findings and conclusions with respect to such study to the Federal financial institutions regulatory agencies, the Committee on Banking, Finance and Urban Affairs of the House of Representatives, and the Committee on Banking, Housing, and Urban Affairs of the Senate, together with such recommendations for legislative or administrative action as the Comptroller General determines to be appropriate.
SEC. 1113.
[12 U.S.C. 3342]

TRANSACTIONS REQUIRING THE SERVICES OF A STATE CERTIFIED APPRAISER.
In determining whether an appraisal in connection with a federally related transaction shall be performed by a State certified appraiser, an agency or instrumentality under this title shall consider whether transactions, either individually or collectively, are of sufficient financial or public policy importance to the United States that an individual who performs an appraisal in connection with such transactions should be a State certified appraiser, except that—
(1)
a State certified appraiser shall be required for all federally related transactions having a value of $1,000,000 or more; and
(2)
1-to-4 unit, single family residential appraisals may be performed by State licensed appraisers unless the size and complexity requires a State certified appraiser5.
^5
Section 1473(e)(2) of Public Law 111–203 provides for an amendment to section 1113 of “the Financial Institutions [and] Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3342)” to insert before the period the following: “, where a complex 1-to-4 unit single family residential appraisal means an appraisal for which the property to be appraised, the form of ownership, the property characteristics, or the market conditions are atypical”. The reference to the amended law probably should not have included the word “and” after “Financial Institutions”.
SEC. 1114.
[12 U.S.C. 3343]

TRANSACTIONS REQUIRING THE SERVICES OF A STATE LICENSED APPRAISER.
All federally related transactions not requiring the services of a State certified appraiser shall be performed by either a State certified or licensed appraiser.
SEC. 1115.
[12 U.S.C. 3344]

TIME FOR PROPOSAL AND ADOPTION OF RULES.
As appropriate, rules issued under sections 1113 and 1114 shall be proposed not later than 6 months and shall be effective upon adoption in final form not later than 12 months after the date of the enactment of this Act.
SEC. 1116.
[12 U.S.C. 3345]

CERTIFICATION AND LICENSING REQUIREMENTS.
(a)

In General.—
For purposes of this title, the term “State certified real estate appraiser” means any individual who has satisfied the requirements for State certification in a State or territory whose criteria for certification as a real estate appraiser currently meets the minimum criteria for certification issued by the Appraiser Qualification Board of the Appraisal Foundation.
(b)

Restriction.—
No individual shall be a State certified real estate appraiser under this section unless such individual has achieved a passing grade upon a suitable examination administered by a State or territory that is consistent with and equivalent to the Uniform State Certification Examination issued or endorsed by the Appraiser Qualification Board of the Appraisal Foundation.
(c)

Definition.—
As used in this section, the term “State licensed appraiser” means an individual who has satisfied the requirements for State licensing in a State or territory whose criteria for the licensing of a real estate appraiser currently meet or exceed the minimum criteria issued by the Appraisal Qualifications Board of The Appraisal Foundation for the licensing of real estate appraisers.
(d)

Additional Qualification Criteria.—
Nothing in this title shall be construed to prevent any Federal agency or instrumentality under this title from establishing such additional qualification criteria as may be necessary or appropriate to carry out the statutory responsibilities of such department, agency, or instrumentality.
(e)

Minimum Qualification Requirements.—
Any requirements established for individuals in the position of “Trainee Appraiser” and “Supervisory Appraiser” shall meet or exceed the minimum qualification requirements of the Appraiser Qualifications Board of The Appraisal Foundation. The Appraisal Subcommittee shall have the authority to enforce these requirements.
SEC. 1117.
[12 U.S.C. 3346]

ESTABLISHMENT OF STATE APPRAISER CERTIFYING AND LICENSING AGENCIES.
To assure the availability of State certified and licensed appraisers for the performance in a State of appraisals in federally related transactions and to assure effective supervision of the activities of certified and licensed appraisers, a State may establish a State appraiser certifying and licensing agency. The duties of such agency may additionally include the registration and supervision of appraisal management companies and the addition of information about the appraisal management company to the national registry.
SEC. 1118.
[12 U.S.C. 3347]

MONITORING OF STATE APPRAISER CERTIFYING AND LICENSING AGENCIES.
(a)

In General.—
The Appraisal Subcommittee shall monitor each State appraiser certifying and licensing agency for the purposes of determining whether such agency—
(1)
has policies, practices, funding, staffing, and procedures that are consistent with this title;
(2)
processes complaints and completes investigations in a reasonable time period;
(3)
appropriately disciplines sanctioned appraisers and appraisal management companies;
(4)
maintains an effective regulatory program; and
(5)
reports complaints and disciplinary actions on a timely basis to the national registries on appraisers and appraisal management companies maintained by the Appraisal Subcommittee.
The Appraisal Subcommittee shall have the authority to remove a State licensed or certified appraiser or a registered appraisal management company from a national registry on an interim basis, not to exceed 90 days, pending State agency action on licensing, certification, registration, and disciplinary proceedings. The Appraisal Subcommittee and all agencies, instrumentalities, and Federally recognized entities under this title shall not recognize appraiser certifications and licenses from States whose appraisal policies, practices, funding, staffing, or procedures are found to be inconsistent with this title. The Appraisal Subcommittee shall have the authority to impose sanctions, as described in this section, against a State agency that fails to have an effective appraiser regulatory program. In determining whether such a program is effective, the Appraisal Subcommittee shall include an analysis of the licensing and certification of appraisers, the registration of appraisal management companies, the issuance of temporary licenses and certifications for appraisers, the receiving and tracking of submitted complaints against appraisers and appraisal management companies, the investigation of complaints, and enforcement actions against appraisers and appraisal management companies. The Appraisal Subcommittee shall have the authority to impose interim actions and suspensions against a State agency as an alternative to, or in advance of, the derecognition of a State agency.
(b)

Disapproval by Appraisal Subcommittee.—
The Federal financial institutions, regulatory agencies, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, and the Resolution Trust Corporation shall accept certifications and licenses awarded by a State appraiser certifying the licensing agency unless the Appraisal Subcommittee issues a written finding that—
(1)
the State agency fails to recognize and enforce the standards, requirements, and procedures prescribed pursuant to this title;
(2)
the State agency is not granted authority or sufficient funding by the State which is adequate to permit the agency to carry out its functions under this title; or
(3)
decisions concerning appraisal standards, appraiser qualifications and supervision of appraiser practices are not made in a manner that carries out the purposes of this title.
(c)

Rejection of State Certifications and Licenses.—
(1)

Opportunity to be heard or correct conditions.—
Before refusing to recognize a State's appraiser certifications or licenses, the Appraisal Subcommittee shall provide that State's certifying and licensing agency a written notice of its intention not to recognize the State's certified or licensed appraisers and ample opportunity to provide rebuttal information or to correct the conditions causing the refusal.
(2)

Adoption of procedures.—
The Appraisal Subcommittee shall adopt written procedures for taking actions described in this section.
(3)

Judicial review.—
A decision of the subcommittee under this section shall be subject to judicial review.
SEC. 1119.
[12 U.S.C. 3348]

RECOGNITION OF STATE CERTIFIED AND LICENSED APPRAISERS FOR PURPOSES OF THIS TITLE.
(a)

Effective Date for Use of Certified or Licensed Appraisers Only.—
(1)

In general.—
Not later than December 31, 1992, all appraisals performed in connection with federally related transactions shall be performed only by individuals certified or licensed in accordance with the requirements of this title.
(2)

Extension of effective date.—
Subject to the approval of the Council, the Appraisal Subcommittee may extend, until December 31, 1991, the effective date for the use of certified or licensed appraisers if it makes a written finding that a State has made substantial progress in establishing a State certification and licensing system that appears to conform to the provisions of this title.
(b)

Temporary Waiver of Appraiser Certification or Licensing Requirements for State Having Scarcity of Qualified Appraisers.—
Subject to the approval of the Council, the Appraisal Subcommittee may waive any requirement relating to certification or licensing of a person to perform appraisals under this title if the Appraisal Subcommittee or a State agency whose certifications and licenses are in compliance with this title, makes a written determination that there is a scarcity of certified or licensed appraisers to perform appraisals in connection with federally related transactions in a State, or in any geographical political subdivision of a State, leading to significant delays in the performance of such appraisals. The waiver terminates when the Appraisal Subcommittee determines that such significant delays have been eliminated.
(c)

Reports to State Certifying and Licensing Agencies.—
The Appraisal Subcommittee, any other Federal agency or instrumentality, or any federally recognized entity shall report any action of a State certified or licensed appraiser that is contrary to the purposes of this title, to the appropriate State agency for a disposition of the subject of the referral. The State agency shall provide the Appraisal Subcommittee or the other Federal agency or instrumentality with a report on its disposition of the matter referred. Subsequent to such disposition, the subcommittee or the agency or instrumentality may take such further action, pursuant to written procedures, it deems necessary to carry out the purposes of this title.
SEC. 1120.
[12 U.S.C. 3349]

VIOLATIONS IN OBTAINING AND PERFORMING APPRAISALS IN FEDERALLY RELATED TRANSACTIONS.
(a)

Violations.—
Except as authorized by the Appraisal Subcommittee in exercising its waiver authority pursuant to section 1119(b), it shall be a violation of this section—
(1)
for a financial institution to seek, obtain, or give money or any other thing of value in exchange for the performance of an appraisal by a person who the institution knows is not a State certified or licensed appraiser in connection with a federally related transaction; and
(2)
for the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, or the Resolution Trust Corporation to knowingly contract for the performance of any appraisal by a person who is not a State certified or licensed appraiser in connection with a real estate related financial transaction defined in section 1121(5) to which such association or corporation is a party.
(b)

Penalties.—
A financial institution that violates subsection (a)(1) shall be subject to civil penalties under section 8(i)(2) of the Federal Deposit Insurance Act or section 206(k)(2) of the Federal Credit Union Act, as appropriate.
(c)

Proceeding.—
A proceeding with respect to a violation of this section shall be an administrative proceeding which may be conducted by a Federal financial institutions regulatory agency in accordance with the procedures set forth in subchapter II of chapter 5 of title 5, United States Code.
SEC. 1121.
[12 U.S.C. 3350]

DEFINITIONS.
For purposes of this title:
(1)

State appraiser certifying and licensing agency.—
The term “State appraiser certifying and licensing agency” means a State agency established in compliance with this title.
(2)

Appraisal subcommittee; subcommittee.—
The terms “Appraisal Subcommittee” and “subcommittee” mean the Appraisal Subcommittee of the Federal Financial Institutions Examination Council.
(3)

Council.—
The term “Council” means the Federal Financial Institutions Examinations Council.
(4)

Federally related transaction.—
The term “federally related transaction” means any real estate-related financial transaction which—
(A)
a federal financial institutions regulatory agency or the Resolution Trust Corporation engages in, contracts for, or regulates; and
(B)
requires the services of an appraiser.
(5)

Real estate related financial transaction.—
The term “real estate-related financial transaction” means any transaction involving—
(A)
the sale, lease, purchase, investment in or exchange of real property, including interests in property, or the financing thereof;
(B)
the refinancing of real property or interests in real property; and
(C)
the use of real property or interests in property as security for a loan or investment, including mortgage-backed securities.
(6)

Federal financial institutions regulatory agencies.—
The term “Federal financial institutions regulatory agencies” means the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, and the National Credit Union Administration.
(7)

Financial institution.—
The term “financial institution” means an insured depository institution as defined in section 3 of the Federal Deposit Insurance Act or an insured credit union as defined in section 101 of the Federal Credit Union Act.
(8)

Chairperson.—
The term “Chairperson” means the Chairperson of the Appraisal Subcommittee selected by the Council.
(9)

Foundation.—
The terms “Appraisal Foundation” and “Foundation” means the Appraisal Foundation established on November 30, 1987, as a not for profit corporation under the laws of Illinois.
(10)

Written appraisal.—
The term “written appraisal” means a written statement used in connection with a federally related transaction that is independently and impartially prepared by a licensed or certified appraiser setting forth an opinion of defined value of an adequately described property as of a specific date, supported by presentation and analysis of relevant market information.
(11)

Appraisal management company.—
The term “appraisal management company” means, in connection with valuing properties collateralizing mortgage loans or mortgages incorporated into a securitization, any external third party authorized either by a creditor of a consumer credit transaction secured by a consumer's principal dwelling or by an underwriter of or other principal in the secondary mortgage markets, that oversees a network or panel of more than 15 certified or licensed appraisers in a State or 25 or more nationally within a given year—
(A)
to recruit, select, and retain appraisers;
(B)
to contract with licensed and certified appraisers to perform appraisal assignments;
(C)
to manage the process of having an appraisal performed, including providing administrative duties such as receiving appraisal orders and appraisal reports, submitting completed appraisal reports to creditors and underwriters, collecting fees from creditors and underwriters for services provided, and reimbursing appraisers for services performed; or
(D)
to review and verify the work of appraisers.
SEC. 1122.
[12 U.S.C. 3351]

MISCELLANEOUS PROVISIONS.
(a)

Temporary Practice.—
(1)

In general.—
A State appraiser certifying or licensing agency shall recognize on a temporary basis the certification or license of an appraiser issued by another State if—
(A)
the property to be appraised is part of a federally related transaction,
(B)
the appraiser's business is of a temporary nature, and
(C)
the appraiser registers with the appraiser certifying or licensing agency in the State of temporary practice.
(2)

Fees for temporary practice.—
A State appraiser certifying or licensing agency shall not impose excessive fees or burdensome requirements, as determined by the Appraisal Subcommittee, for temporary practice under this subsection.
(b)

Reciprocity.—
Notwithstanding any other provisions of this title, a federally related transaction shall not be appraised by a certified or licensed appraiser unless the State appraiser certifying or licensing agency of the State certifying or licensing such appraiser has in place a policy of issuing a reciprocal certification or license for an individual from another State when—
(1)
the appraiser licensing and certification program of such other State is in compliance with the provisions of this title; and
(2)
the appraiser holds a valid certification from a State whose requirements for certification or licensing meet or exceed the licensure standards established by the State where an individual seeks appraisal licensure.
(c)

Supplemental Funding.—
Funds available to the Federal financial institutions regulatory agencies may be made available to the Financial Institutions Examination Council to support the Council's functions under this title.
(d)

Prohibition Against Discrimination.—
Criteria established by the Federal financial institutions regulatory agencies, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, and the Resolution Trust Corporation for appraiser qualifications in addition to State certification or licensing may include education achieved, experience, sample appraisals, and references from prior clients. Membership in a nationally recognized professional appraisal organization may be a criteria considered, though lack of membership therein shall not be the sole bar against consideration for an assignment under these criteria.
(e)

Other Requirements.—
A corporation, partnership, or other business entity may provide appraisal services in connection with federally related transactions if such appraisal is prepared by individuals certified or licensed in accordance with the requirements of this title. An individual who is not a State certified or licensed appraiser may assist in the preparation of an appraisal if—
(1)
the assistant is under the direct supervision of a licensed or certified individual; and
(2)
the final appraisal document is approved and signed by an individual who is certified or licensed.
(f)

Studies.—
(1)

Study.—
The Appraisal Subcommittee shall—
(A)
conduct a study to determine whether real estate sales and financing information and data that is available to real estate appraisers in the States is sufficient to permit appraisers to properly estimate the values of properties in connection with federally related transactions; and
(B)
study the feasibility and desirability of extending the provisions of this title to the function of personal property appraising and to personal property appraisers in connection with Federal financial and public policy interests.
(2)

Report.—
The Appraisal Subcommittee shall—
(A)
report its findings to the Congress with respect to the study described in paragraph (1)(A) no later than 12 months after the date of the enactment of this title, and
(B)
report its findings with respect to the study described in paragraph (1)(B) to Congress not later than 18 months after the date of the enactment of this title.
(g)

Appraiser Independence Monitoring.—
The Appraisal Subcommittee shall monitor each State appraiser certifying and licensing agency for the purpose of determining whether such agency's policies, practices, and procedures are consistent with the purposes of maintaining appraiser independence and whether such State has adopted and maintains effective laws, regulations, and policies aimed at maintaining appraiser independence.
(h)

Approved Education.—
The Appraisal Subcommittee shall encourage the States to accept courses approved by the Appraiser Qualification Board's Course Approval Program.
(i)

Appraisal Complaint National Hotline.—
If, 6 months after the date of the enactment of this subsection, the Appraisal Subcommittee determines that no national hotline exists to receive complaints of non-compliance with appraisal independence standards and Uniform Standards of Professional Appraisal Practice, including complaints from appraisers, individuals, or other entities concerning the improper influencing or attempted improper influencing of appraisers or the appraisal process, the Appraisal Subcommittee shall establish and operate such a national hotline, which shall include a toll-free telephone number and an email address. If the Appraisal Subcommittee operates such a national hotline, the Appraisal Subcommittee shall refer complaints for further action to appropriate governmental bodies, including a State appraiser certifying and licensing agency, a financial institution regulator, or other appropriate legal authorities. For complaints referred to State appraiser certifying and licensing agencies or to Federal regulators, the Appraisal Subcommittee shall have the authority to follow up such complaint referrals in order to determine the status of the resolution of the complaint.
SEC. 1123.
[12 U.S.C. 3352]

EMERGENCY EXCEPTIONS FOR DISASTER AREAS.
(a)

In General.—
Each Federal financial institutions regulatory agency may, by regulation or order, make exceptions to this title, and to standards prescribed pursuant to this title, for transactions involving institutions for which the agency is the primary Federal regulator with respect to real property located within a disaster area if the agency—
(1)
makes the exception not later than 30 months after the date on which the President determines, pursuant to section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, that a major disaster exists in the area; and
(2)
determines that the exception—
(A)
would facilitate recovery from the major disaster; and
(B)
is consistent with safety and soundness.
(b)

3-Year Limit on Exceptions.—
Any exception made under this section shall expire not later than 3 years after the date of the determination referred to in subsection (a)(1).
(c)

Publication Required.—
Any Federal financial institutions regulatory agency shall publish in the Federal Register a statement that—
(1)
describes any exception made under this section; and
(2)
explains how the exception—
(A)
would facilitate recovery from the major disaster; and
(B)
is consistent with safety and soundness.
(d)

Disaster Area Defined.—
For purposes of this section, the term “disaster area” means an area in which the President, pursuant to section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, has determined that a major disaster exists.
SEC. 1124.
[12 U.S.C. 3353]

APPRAISAL MANAGEMENT COMPANY MINIMUM REQUIREMENTS.
(a)

In General.—
The Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the National Credit Union Administration Board, the Federal Housing Finance Agency, and the Bureau of Consumer Financial Protection shall jointly, by rule, establish minimum requirements to be applied by a State in the registration of appraisal management companies. Such requirements shall include a requirement that such companies—
(1)
register with and be subject to supervision by a State appraiser certifying and licensing agency in each State in which such company operates;
(2)
verify that only licensed or certified appraisers are used for federally related transactions;
(3)
require that appraisals coordinated by an appraisal management company comply with the Uniform Standards of Professional Appraisal Practice; and
(4)
require that appraisals are conducted independently and free from inappropriate influence and coercion pursuant to the appraisal independence standards established under section 129E of the Truth in Lending Act.
(b)

Relation to State Law.—
Nothing in this section shall be construed to prevent States from establishing requirements in addition to any rules promulgated under subsection (a).
(c)

Federally Regulated Financial Institutions.—
The requirements of subsection (a) shall apply to an appraisal management company that is a subsidiary owned and controlled by a financial institution and regulated by a Federal financial institution regulatory agency. An appraisal management company that is a subsidiary owned and controlled by a financial institution regulated by a Federal financial institution regulatory agency shall not be required to register with a State.
(d)

Registration Limitations.—
An appraisal management company shall not be registered by a State or included on the national registry if such company, in whole or in part, directly or indirectly, is owned by any person who has had an appraiser license or certificate refused, denied, cancelled, surrendered in lieu of revocation, or revoked in any State. Additionally, each person that owns more than 10 percent of an appraisal management company shall be of good moral character, as determined by the State appraiser certifying and licensing agency, and shall submit to a background investigation carried out by the State appraiser certifying and licensing agency.
(e)

Reporting.—
The Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the National Credit Union Administration Board, the Federal Housing Finance Agency, and the Bureau of Consumer Financial Protection shall jointly promulgate regulations for the reporting of the activities of appraisal management companies to the Appraisal Subcommittee in determining the payment of the annual registry fee.
(f)

Effective Date.—
(1)

In general.—
No appraisal management company may perform services related to a federally related transaction in a State after the date that is 36 months after the date on which the regulations required to be prescribed under subsection (a) are prescribed in final form unless such company is registered with such State or subject to oversight by a Federal financial institutions regulatory agency.
(2)

Extension of effective date.—
Subject to the approval of the Council, the Appraisal Subcommittee may extend by an additional 12 months the requirements for the registration and supervision of appraisal management companies if it makes a written finding that a State has made substantial progress in establishing a State appraisal management company registration and supervision system that appears to conform with the provisions of this title.
SEC. 1125.
[12 U.S.C. 3354]

AUTOMATED VALUATION MODELS USED TO ESTIMATE COLLATERAL VALUE FOR MORTGAGE LENDING PURPOSES.
(a)

In General.—
Automated valuation models shall adhere to quality control standards designed to—
(1)
ensure a high level of confidence in the estimates produced by automated valuation models;
(2)
protect against the manipulation of data;
(3)
seek to avoid conflicts of interest;
(4)
require random sample testing and reviews; and
(5)
account for any other such factor that the agencies listed in subsection (b) determine to be appropriate.
(b)

Adoption of Regulations.—
The Board, the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the National Credit Union Administration Board, the Federal Housing Finance Agency, and the Bureau of Consumer Financial Protection, in consultation with the staff of the Appraisal Subcommittee and the Appraisal Standards Board of the Appraisal Foundation, shall promulgate regulations to implement the quality control standards required under this section.
(c)

Enforcement.—
Compliance with regulations issued under this subsection shall be enforced by—
(1)
with respect to a financial institution, or subsidiary owned and controlled by a financial institution and regulated by a Federal financial institution regulatory agency, the Federal financial institution regulatory agency that acts as the primary Federal supervisor of such financial institution or subsidiary; and
(2)
with respect to other participants in the market for appraisals of 1-to-4 unit single family residential real estate, the Federal Trade Commission, the Bureau of Consumer Financial Protection, and a State attorney general.
(d)

Automated Valuation Model Defined.—
For purposes of this section, the term “automated valuation model” means any computerized model used by mortgage originators and secondary market issuers to determine the collateral worth of a mortgage secured by a consumer's principal dwelling.
SEC. 1126.
[12 U.S.C. 3355]

BROKER PRICE OPINIONS.
(a)

General Prohibition.—
In conjunction with the purchase of a consumer's principal dwelling, broker price opinions may not be used as the primary basis to determine the value of a piece of property for the purpose of a loan origination of a residential mortgage loan secured by such piece of property.
(b)

Broker Price Opinion Defined.—
For purposes of this section, the term “broker price opinion” means an estimate prepared by a real estate broker, agent, or sales person that details the probable selling price of a particular piece of real estate property and provides a varying level of detail about the property's condition, market, and neighborhood, and information on comparable sales, but does not include an automated valuation model, as defined in section 1125(c).
SEC. 1127.
[12 U.S.C. 3356]

EXEMPTION FROM APPRAISALS OF REAL ESTATE LOCATED IN RURAL AREAS.
(a)

Definitions.—
In this section—
(1)
the term “mortgage originator” has the meaning given the term in section 103 of the Truth in Lending Act (15 U.S.C. 1602); and
(2)
the term “transaction value” means the amount of a loan or extension of credit, including a loan or extension of credit that is part of a pool of loans or extensions of credit.
(b)

Appraisal Not Required.—
Except as provided in subsection (d), notwithstanding any other provision of law, an appraisal in connection with a federally related transaction involving real property or an interest in real property is not required if—
(1)
the real property or interest in real property is located in a rural area, as described in section 1026.35(b)(2)(iv)(A) of title 12, Code of Federal Regulations;
(2)
not later than 3 days after the date on which the Closing Disclosure Form, made in accordance with the final rule of the Bureau of Consumer Financial Protection entitled “Integrated Mortgage Disclosures Under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z)” (78 Fed. Reg. 79730 (December 31, 2013)), relating to the federally related transaction is given to the consumer, the mortgage originator or its agent, directly or indirectly—
(A)
has contacted not fewer than 3 State certified appraisers or State licensed appraisers, as applicable, on the mortgage originator’s approved appraiser list in the market area in accordance with part 226 of title 12, Code of Federal Regulations; and
(B)
has documented that no State certified appraiser or State licensed appraiser, as applicable, was available within 5 business days beyond customary and reasonable fee and timeliness standards for comparable appraisal assignments, as documented by the mortgage originator or its agent;
(3)
the transaction value is less than $400,000; and
(4)
the mortgage originator is subject to oversight by a Federal financial institutions regulatory agency.
(c)

Sale, Assignment, or Transfer.—
A mortgage originator that makes a loan without an appraisal under the terms of subsection (b) shall not sell, assign, or otherwise transfer legal title to the loan unless—
(1)
the loan is sold, assigned, or otherwise transferred to another person by reason of the bankruptcy or failure of the mortgage originator;
(2)
the loan is sold, assigned, or otherwise transferred to another person regulated by a Federal financial institutions regulatory agency, so long as the loan is retained in portfolio by the person;
(3)
the sale, assignment, or transfer is pursuant to a merger of the mortgage originator with another person or the acquisition of the mortgage originator by another person or of another person by the mortgage originator; or
(4)
the sale, loan, or transfer is to a wholly owned subsidiary of the mortgage originator, provided that, after the sale, assignment, or transfer, the loan is considered to be an asset of the mortgage originator for regulatory accounting purposes.
(d)

Exception.—
Subsection (b) shall not apply if—
(1)
a Federal financial institutions regulatory agency requires an appraisal under section 225.63(c), 323.3(c), 34.43(c), or 722.3(e) of title 12, Code of Federal Regulations; or
(2)
the loan is a high-cost mortgage, as defined in section 103 of the Truth in Lending Act (15 U.S.C. 1602).
(e)

Anti-evasion.—
Each Federal financial institutions regulatory agency shall ensure that any mortgage originator that the Federal financial institutions regulatory agency oversees that makes a significant amount of loans under subsection (b) is complying with the requirements of subsection (b)(2) with respect to each loan.
TITLE XII—

MISCELLANEOUS PROVISIONS
* * * * * * *
SEC. 1204.
[12 U.S.C. 1811 nt.]

EXPANSION OF USE OF UNDERUTILIZED MINORITY BANKS, WOMEN'S BANKS, AND LOW-INCOME CREDIT UNIONS.
(a)

Consultation on Expanded Use.—
The Secretary of the Treasury shall consult with the appropriate Federal banking agencies and the National Credit Union Administration Board on methods for increasing the use of underutilized minority banks, women's banks, and limited income credit unions as depositaries or financial agents of Federal agencies.
(b)

Report to Congress.—
The Secretary of the Treasury shall include, in the 1st annual report submitted to the Congress under section 331(a) of title 31, United States Code, after the completion of the consultation required by subsection (a), a report of the actions taken by the Secretary to increase the use of underutilized minority banks, women's banks, and limited income credit unions as depositaries or financial agents of Federal agencies.
(c)

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

Appropriate federal banking agency.—
The term “appropriate Federal banking agency” has the meaning given to such term in section 3(q) of the Federal Deposit Insurance Act.
(2)

Minority bank.—
The term “minority bank” means any depository institution described in clause (i), (ii), or (iii) of section 19(b)(1)(A) of the Federal Reserve Act—
(A)
more than 50 percent of the ownership or control of which is held by 1 or more minority individuals; and
(B)
more than 50 percent of the net profit or loss of which accrues to 1 or more minority individuals.
(3)

Minority.—
The term “minority” means any Black American, Native American, Hispanic American, or Asian American.
(4)

Low-income credit union.—
The term “low-income credit union” means any depository institution described in section 19(b)(1)(A)(iv) of the Federal Reserve Act which serves predominately low-income members (as defined by the National Credit Union Administration Board pursuant to section 101(5) of the Federal Credit Union Act).
(5)

Women's bank.—
The term “women's bank” means any depository institution described in clause (i), (ii), or (iii) of section 19(b)(1)(A) of the Federal Reserve Act—
(A)
more than 50 percent of the outstanding shares of which are held by 1 or more women;
(B)
a majority of the directors on the board of directors of which are women; and
(C)
a significant percentage of senior management positions of which are held by women.
SEC. 1205.
[12 U.S.C. 1818 nt.]

CREDIT STANDARDS ADVISORY COMMITTEE.
(a)

Establishment.—
There is hereby established the Credit Standards Advisory Committee (in this section referred to as the “Committee”).
(b)

Membership.—
(1)

Appointment.—
The Committee shall consist of 11 members, as follows:
(A)
The Chairman of the Board of Governors of the Federal Reserve System, or the Chairman's designee.
(B)
The Chairperson of the Federal Deposit Insurance Corporation, or the Chairperson's designee.
(C)
The Comptroller of the Currency, or the Comptroller's designee.
(D)
The Chairman of the National Credit Union Administration, or the Chairman's designee.
(E)
6 members of the public appointed by the President who are knowledgeable with the credit standards and lending practices of insured depository institutions, no more than 3 of whom shall be from the same political party.
(2)

Terms.—
Each member appointed under paragraph (1)(E) shall serve for the life of the Committee.
(3)

Chairperson.—
The Chairperson of the Committee shall be designated by the President from among the members appointed under paragraph (1)(F).
(4)

Vacancies.—
Any vacancy on the Committee shall be filled in the manner in which the original appointment was made.
(5)

Pay and expenses.—
Members of the Committee shall serve without pay but each member of the Committee shall be reimbursed for expenses incurred in connection with attendance of such members at meetings of the Committee. All expenses of the Committee shall be shared on a pro rata basis, based upon each agency's total budget for the preceding year by the Federal financial regulators specified in subparagraphs (A) through (E) of paragraph (1).
(6)

Meetings.—
The Committee shall meet, not less frequently than quarterly, at the call of the chairperson or a majority of the members.
(c)

Duties of the Committee.—
The Committee shall do the following:
(1)

Review credit standards, lending practices, and supervision by federal regulators.—
Review the credit standards and lending practices of insured depository institutions and the supervision of such standards and practices by the Federal financial regulators.
(2)

Prepare recommendations.—
Prepare written comments and recommendations for the Federal financial regulators to ensure that insured depository institutions adhere to prudential credit standards and lending practices that are consistent for all insured depository institutions, to the maximum extent possible.
(3)

Monitor credit standards, lending practices, and supervision by federal regulators.—
Monitor the credit standards and lending practices of insured depository institutions, and the supervision of such standards and practices by the Federal financial regulators, to ensure that insured depository institutions can meet the demands of a modern and globally competitive financial world.
(d)

Annual Report.—
(1)

Required.—
Not later than January 30 of each year, the Committee shall submit a report to the Committee on Banking, Finance and Urban Affairs of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate.
(2)

Contents.—
The report required by paragraph (1) shall describe the activities of the Committee during the preceding year and the reports and recommendations made by the Committee to the Federal financial regulators.
(e)

Conflict of Interest Guidelines.—
The Committee shall prescribe such guidelines as the Committee determines to be appropriate to avoid conflicts of interest with respect to the disclosure to and use by members of the Committee of information relating to insured depository institutions and the Federal financial regulators.
(f)

Chapter 10 of Title 5, United States Code Does not Apply.—
Chapter 10 of title 5, United States Code, shall not apply with respect to the Committee.
SEC. 1206.
[12 U.S.C. 1833b]

COMPARABILITY IN COMPENSATION SCHEDULES.
(a)6

In General.—
The Federal Deposit Insurance Corporation, the Comptroller of the Currency, the National Credit Union Administration Board, the Federal Housing Finance Board, the Office of Financial Research, and the Bureau of Consumer Financial Protection the Oversight Board7 of the Resolution Trust Corporation, the Farm Credit Administration, in establishing and adjusting schedules of compensation and benefits which are to be determined solely by each agency under applicable provisions of law, shall inform the heads of the other agencies and the Congress of such compensation and benefits and shall seek to maintain comparability regarding compensation and benefits.
^6
Effective on July 21, 2011, section 367(8) of Public Law 111–203 attempts to amend section 1206(a) but the amendments could not be executed in light of amendments made by section 152(d)(3) of such Public Law, which takes effect on date of enactment.
^7
The Oversight Board was redesignated as the Thrift Depositor Protection Oversight Board by the Resolution Trust Corporation Refinancing, Restructuring, and Improvement Act of 1991 (see section 302(a) of such Act, 105 Stat. 1767) and subsequently abolished under section 14 of the Homeowners Protection Act of 1998 (12 U.S.C. 1441a note). The Board's authority and duties were transferred to the Secretary of the Treasury. The Resolution Trust Corporation has been abolished (see section 21A(m) of the Federal Home Loan Bank Act).
(b)

Commodity Futures Trading Commission.—
In establishing and adjusting schedules of compensation and benefits for employees of the Commodity Futures Trading Commission under applicable provisions of law, the Commission shall—
(1)
inform the heads of the agencies referred to in subsection (a) and Congress of such compensation and benefits; and
(2)
seek to maintain comparability with those agencies regarding compensation and benefits.
* * * * * * *
SEC. 1208.
[12 U.S.C. 1811 nt.]

EXPENDITURE OF TAXPAYER MONEY ONLY FOR DEPOSIT INSURANCE PURPOSES.
Funds appropriated to the Secretary of the Treasury pursuant to an authorization contained in this Act, and any amount authorized to be borrowed from the Secretary of the Treasury by any entity pursuant to this Act, may only be used as permitted by law, and may not otherwise be used for making any payment to any shareholder in, or creditor to, any insured depository institution.
* * * * * * *
SEC. 1213.
[12 U.S.C. 1833c]

COMPTROLLER GENERAL AUDIT AND ACCESS TO RECORDS.
(a)

Audit of Agencies or Other Persons Performing Functions Under Banking Laws.—
(1)

In general.—
Except as provided in paragraph (2), all agencies, corporations, organizations, and other persons of any description which perform any function or activity under this Act, or any other Act which is amended by this Act, shall be subject to audit by the Comptroller General of the United States with respect to such function or activity.
(2)

Exceptions.—
Paragraph (1) shall not apply to—
(A)
any function or activity of the Board of Governors of the Federal Reserve System or the Federal Reserve banks that is described in any paragraph of section 714(b) of title 31, United States Code; and
(B)
any function or activity of the Federal National Mortgage Association, except as provided in section 309(j) of the Federal National Mortgage Association Charter Act.
(b)

Audit of Persons Providing Certain Goods or Services.—
All persons and organizations which, by contract, grant, or otherwise, provide goods or services to, or receive financial assistance from, any agency or other person performing functions or activities under this Act shall be subject to audit by the Comptroller General with respect to such provision of goods or services or receipt of financial assistance.
(c)

Provisions Applicable to Audits Under This Section.—
(1)

Nature and scope of audit.—
The Comptroller General shall determine the nature, scope, and terms and conditions of audits conducted under this section.
(2)

Coordination with other provisions of law.—
The authority of the Comptroller General under this section shall be in addition to any audit authority available to the Comptroller General under other provisions of this Act or any other law.
(3)

Rights of access, examination, and copying.—
The Comptroller General, and any duly authorized representative of the Comptroller General, shall have access to, and the right to examine and copy, all records and other recorded information in any form, and to examine any property, within the possession or control of any agency or person which is subject to audit under this section which the Comptroller General deems relevant to an audit conducted under this section.
(4)

Enforcement of right of access.—
The Comptroller General's right of access to information under this section shall be enforceable pursuant to section 716 of title 31, United States Code.
(5)

Maintenance of confidential records.—
The provisions of section 716(e) of title 31, United States Code, shall apply to information obtained by the Comptroller General under this section.
* * * * * * *
SEC. 1216.
[12 U.S.C. 1833e]

EQUAL OPPORTUNITY.
(a)

In General.—
For purposes of this Act, Executive Order Numbered 11478, providing for equal employment opportunity in the Federal Government, shall apply to—
(1)
the Comptroller of the Currency;
(2)
the Federal Housing Finance Agency; and
(3)
the Federal Deposit Insurance Corporation.
(b)

Affirmative Program for Equal Employment Opportunity.—
For purposes of this Act, sections 1 and 2 of Executive Order Numbered 11478, providing for the adoption and implementation of equal employment opportunity, shall apply to the Federal Home Loan Banks, the Federal National Mortgage Association, and the Federal Home Loan Mortgage Corporation.
(c)8

Solicitation of Contracts.—
The Federal Deposit Insurance Corporation, the Comptroller of the Currency, and the Federal Housing Finance Agency, the Oversight Board of the Resolution Trust Corporation, and the Resolution Trust Corporation shall each prescribe regulations to establish and oversee a minority outreach program within each such agency to ensure inclusion, to the maximum extent possible, of minorities and women, and entities owned by minorities and women, including financial institutions, investment banking firms, underwriters, accountants, and providers of legal services, in all contracts entered into by the agency with such persons or entities, public and private, in order to manage the institutions and their assets for which the agency is responsible or to perform such other functions authorized under any law applicable to such agency.
^8
The amendment by section 367(9)(B)(ii) of Public Law 111–203 by striking “the Thrift Depositor Protection Oversight Board of the Resolution Trust Corporation, and the Resolution Trust Corporation” could not be execute because the matter proposed to be struck does not appear.
(d)

Report to Congress.—
Before the end of the 180-day period beginning on the date of the enactment of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989—
(1)
the Federal Deposit Insurance Corporation;
(2)
the Comptroller of the Currency;
(3)
the Federal Housing Finance Board;
(4)
the Federal Home Loan Mortgage Corporation; and
(5)
the Federal National Mortgage Association,
shall each submit to the Congress a report containing a complete description of the actions taken by such agency pursuant to subsections (a) and (b) and such recommendations for administrative and legislative action as each such agency may determine to be appropriate to carry out the purposes of such subsection.
* * * * * * *
TITLE XIII—

PARTICIPATION BY STATE HOUSING FINANCE AUTHORITIES AND NONPROFIT ENTITIES
SEC. 1301.
[12 U.S.C. 1441a–1]

DEFINITIONS.
For purposes of this title:
(1)

State housing finance authority.—
The term “State housing finance authority” means any public agency, authority, or corporation which—
(A)
serves as an instrumentality of any State or any political subdivision of any State; and
(B)
functions as a source of residential mortgage loan financing in that State.
(2)

Nonprofit entity.—
The term “nonprofit entity” means any not-for-profit corporation chartered under State law that is exempt from Federal taxation under section 501(c) of the Internal Revenue Code of 1986 and no part of the net earnings of which inures to the benefit of any member, founder, contributor, or individual (including any nonprofit entity established by the corporation established under title IX of the Housing and Urban Development Act of 1968).
(3)

Mortgage-related assets.—
The term “mortgage-related assets” means—
(A)
residential mortgage loans secured by 1- to 4-family or multifamily dwellings; and
(B)
real property improved with 1- to 4-family or multifamily residential dwellings,
which are located within the jurisdiction of the applicable State housing finance authority or within the geographical area served by the nonprofit entity.
(4)

Net income.—
The term “net income” means income after deduction of all associated expenses calculated in accordance with generally accepted accounting principles.
SEC. 1302.
[12 U.S.C. 1441a–2]

AUTHORIZATION FOR STATE HOUSING FINANCE AGENCIES AND NONPROFIT ENTITIES TO PURCHASE MORTGAGE-RELATED ASSETS.
(a)

Authorization.—
Notwithstanding any other provision of Federal or State law, a State housing finance authority or nonprofit entity may purchase mortgage-related assets from the Resolution Trust Corporation or from financial institutions with respect to which the Federal Deposit Insurance Corporation is acting as a conservator or receiver (including assets associated with any trust business), and any contract for such purchase shall be effective in accordance with its terms without any further approval, assignment, or consent with respect to that contract.
(b)

Investment Requirement.—
Any State housing finance authority or nonprofit entity which purchases mortgage-related assets pursuant to subsection (a) shall invest any net income attributable to the ownership of those assets in financing, refinancing, or rehabilitating low- and moderate-income housing within the jurisdiction of the State housing finance authority or within the geographical area served by the nonprofit entity.
* * * * * * *