[Congressional Record (Bound Edition), Volume 154 (2008), Part 4]
[Senate]
[Pages 5045-5149]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           TEXT OF AMENDMENTS

  SA 4387. Mr. DODD (for himself and Mr. Shelby) submitted an amendment 
intended to be proposed by him to the bill H.R. 3221, moving the United 
States toward greater energy independence and security, developing 
innovative new technologies, reducing carbon emissions, creating green 
jobs, protecting consumers, increasing clean renewable energy 
production, and modernizing our energy infrastructure, and to amend the 
Internal Revenue Code of 1986 to provide tax incentives for the 
production of renewable energy and energy conservation; as follows:

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the 
     ``Foreclosure Prevention Act of 2008''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.

                 TITLE I--FHA MODERNIZATION ACT OF 2008

Sec. 101. Short title.

              Subtitle A--Building American Homeownership

Sec. 111. Short title.
Sec. 112. Maximum principal loan obligation.
Sec. 113. Cash investment requirement and prohibition of seller-funded 
              downpayment assistance.
Sec. 114. Mortgage insurance premiums.
Sec. 115. Rehabilitation loans.
Sec. 116. Discretionary action.
Sec. 117. Insurance of condominiums.
Sec. 118. Mutual Mortgage Insurance Fund.
Sec. 119. Hawaiian home lands and Indian reservations.
Sec. 120. Conforming and technical amendments.
Sec. 121. Insurance of mortgages.
Sec. 122. Home equity conversion mortgages.
Sec. 123. Energy efficient mortgages program.
Sec. 124. Pilot program for automated process for borrowers without 
              sufficient credit history.
Sec. 125. Homeownership preservation.
Sec. 126. Use of FHA savings for improvements in FHA technologies, 
              procedures, processes, program performance, staffing, and 
              salaries.
Sec. 127. Post-purchase housing counseling eligibility improvements.
Sec. 128. Pre-purchase homeownership counseling demonstration.
Sec. 129. Fraud prevention.
Sec. 130. Limitation on mortgage insurance premium increases.
Sec. 131. Savings provision.
Sec. 132. Implementation.
Sec. 133. Moratorium on implementation of risk-based premiums.

          Subtitle B--Manufactured Housing Loan Modernization

Sec. 141. Short title.
Sec. 142. Purposes.
Sec. 143. Exception to limitation on financial institution portfolio.
Sec. 144. Insurance benefits.
Sec. 145. Maximum loan limits.
Sec. 146. Insurance premiums.
Sec. 147. Technical corrections.
Sec. 148. Revision of underwriting criteria.
Sec. 149. Prohibition against kickbacks and unearned fees.
Sec. 150. Leasehold requirements.

     TITLE II--MORTGAGE FORECLOSURE PROTECTIONS FOR SERVICEMEMBERS

Sec. 201. Temporary increase in maximum loan guaranty amount for 
              certain housing loans guaranteed by the Secretary of 
              Veterans Affairs.
Sec. 202. Counseling on mortgage foreclosures for members of the Armed 
              Forces returning from service abroad.
Sec. 203. Enhancement of protections for servicemembers relating to 
              mortgages and mortgage foreclosures.

TITLE III--EMERGENCY ASSISTANCE FOR THE REDEVELOPMENT OF ABANDONED AND 
                            FORECLOSED HOMES

Sec. 301. Emergency assistance for the redevelopment of abandoned and 
              foreclosed homes.

                 TITLE IV--HOUSING COUNSELING RESOURCES

Sec. 401. Housing counseling resources.

              TITLE V--MORTGAGE DISCLOSURE IMPROVEMENT ACT

Sec. 501. Short title.
Sec. 502. Enhanced mortgage loan disclosures.

                    TITLE VI--TAX-RELATED PROVISIONS

Sec. 601. Election for 4-year carryback of certain net operating losses 
              and temporary suspension of 90 percent AMT limit.
Sec. 602. Modifications on use of qualified mortgage bonds; temporary 
              increased volume cap for certain housing bonds.
Sec. 603. Credit for certain home purchases.

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Sec. 604. Additional standard deduction for real property taxes for 
              nonitemizers.

                    TITLE VII--EMERGENCY DESIGNATION

Sec. 701. Emergency designation.

                 TITLE I--FHA MODERNIZATION ACT OF 2008

     SEC. 101. SHORT TITLE.

       This title may be cited as the ``FHA Modernization Act of 
     2008''.

              Subtitle A--Building American Homeownership

     SEC. 111. SHORT TITLE.

       This subtitle may be cited as the ``Building American 
     Homeownership Act of 2008''.

     SEC. 112. MAXIMUM PRINCIPAL LOAN OBLIGATION.

       (a) In General.--Paragraph (2) of section 203(b)(2) of the 
     National Housing Act (12 U.S.C. 1709(b)(2)) is amended--
       (1) by amending subparagraphs (A) and (B) to read as 
     follows:
       ``(A) not to exceed the lesser of--
       ``(i) in the case of a 1-family residence, 110 percent of 
     the median 1-family house price in the area, as determined by 
     the Secretary; and in the case of a 2-, 3-, or 4-family 
     residence, the percentage of such median price that bears the 
     same ratio to such median price as the dollar amount 
     limitation in effect for 2007 under section 305(a)(2) of the 
     Federal Home Loan Mortgage Corporation Act (12 U.S.C. 
     1454(a)(2)) for a 2-, 3-, or 4-family residence, 
     respectively, bears to the dollar amount limitation in effect 
     for 2007 under such section for a 1-family residence; or
       ``(ii) 132 percent of the dollar amount limitation in 
     effect for 2007 under such section 305(a)(2) for a residence 
     of the applicable size (without regard to any authority to 
     increase such limitations with respect to properties located 
     in Alaska, Guam, Hawaii, or the Virgin Islands), except that 
     each such maximum dollar amount shall be adjusted effective 
     January 1 of each year beginning with 2009, by adding to or 
     subtracting from each such amount (as it may have been 
     previously adjusted) a percentage thereof equal to the 
     percentage increase or decrease, during the most recently 
     completed 12-month or 4-quarter period ending before the time 
     of determining such annual adjustment, in an housing price 
     index developed or selected by the Secretary for purposes of 
     adjustments under this clause;

     except that the dollar amount limitation in effect under this 
     subparagraph for any size residence for any area may not be 
     less than the greater of: (I) the dollar amount limitation in 
     effect under this section for the area on October 21, 1998; 
     or (II) 65 percent of the dollar amount limitation in effect 
     for 2007 under such section 305(a)(2) for a residence of the 
     applicable size, as such limitation is adjusted by any 
     subsequent percentage adjustments determined under clause 
     (ii) of this subparagraph; and
       ``(B) not to exceed 100 percent of the appraised value of 
     the property.''; and
       (2) in the matter following subparagraph (B), by striking 
     the second sentence (relating to a definition of ``average 
     closing cost'') and all that follows through ``section 
     3103A(d) of title 38, United States Code.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect upon the expiration of the date described 
     in section 202(a) of the Economic Stimulus Act of 2008 
     (Public Law 110-185).

     SEC. 113. CASH INVESTMENT REQUIREMENT AND PROHIBITION OF 
                   SELLER-FUNDED DOWNPAYMENT ASSISTANCE.

       Paragraph 9 of section 203(b) of the National Housing Act 
     (12 U.S.C. 1709(b)(9)) is amended to read as follows:
       ``(9) Cash investment requirement.--
       ``(A) In general.--A mortgage insured under this section 
     shall be executed by a mortgagor who shall have paid, in 
     cash, on account of the property an amount equal to not less 
     than 3.5 percent of the appraised value of the property or 
     such larger amount as the Secretary may determine.
       ``(B) Family members.--For purposes of this paragraph, the 
     Secretary shall consider as cash or its equivalent any 
     amounts borrowed from a family member (as such term is 
     defined in section 201), subject only to the requirements 
     that, in any case in which the repayment of such borrowed 
     amounts is secured by a lien against the property, that--
       ``(i) such lien shall be subordinate to the mortgage; and
       ``(ii) the sum of the principal obligation of the mortgage 
     and the obligation secured by such lien may not exceed 100 
     percent of the appraised value of the property.
       ``(C) Prohibited sources.--In no case shall the funds 
     required by subparagraph (A) consist, in whole or in part, of 
     funds provided by any of the following parties before, 
     during, or after closing of the property sale:
       ``(i) The seller or any other person or entity that 
     financially benefits from the transaction.
       ``(ii) Any third party or entity that is reimbursed, 
     directly or indirectly, by any of the parties described in 
     clause (i).''.

     SEC. 114. MORTGAGE INSURANCE PREMIUMS.

       Section 203(c)(2) of the National Housing Act (12 U.S.C. 
     1709(c)(2)) is amended--
       (1) in the matter preceding subparagraph (A), by striking 
     ``or of the General Insurance Fund'' and all that follows 
     through ``section 234(c),,''; and
       (2) in subparagraph (A)--
       (A) by striking ``2.25 percent'' and inserting ``3 
     percent''; and
       (B) by striking ``2.0 percent'' and inserting ``2.75 
     percent''.

     SEC. 115. REHABILITATION LOANS.

       Subsection (k) of section 203 of the National Housing Act 
     (12 U.S.C. 1709(k)) is amended--
       (1) in paragraph (1), by striking ``on'' and all that 
     follows through ``1978''; and
       (2) in paragraph (5)--
       (A) by striking ``General Insurance Fund'' the first place 
     it appears and inserting ``Mutual Mortgage Insurance Fund''; 
     and
       (B) in the second sentence, by striking the comma and all 
     that follows through ``General Insurance Fund''.

     SEC. 116. DISCRETIONARY ACTION.

       The National Housing Act is amended--
       (1) in subsection (e) of section 202 (12 U.S.C. 1708(e))--
       (A) in paragraph (3)(B), by striking ``section 202(e) of 
     the National Housing Act'' and inserting ``this subsection''; 
     and
       (B) by redesignating such subsection as subsection (f);
       (2) by striking paragraph (4) of section 203(s) (12 U.S.C. 
     1709(s)(4)) and inserting the following new paragraph:
       ``(4) the Secretary of Agriculture;''; and
       (3) by transferring subsection (s) of section 203 (as 
     amended by paragraph (2) of this section) to section 202, 
     inserting such subsection after subsection (d) of section 
     202, and redesignating such subsection as subsection (e).

     SEC. 117. INSURANCE OF CONDOMINIUMS.

       (a) In General.--Section 234 of the National Housing Act 
     (12 U.S.C. 1715y) is amended--
       (1) in subsection (c), in the first sentence--
       (A) by striking ``and'' before ``(2)''; and
       (B) by inserting before the period at the end the 
     following: ``, and (3) the project has a blanket mortgage 
     insured by the Secretary under subsection (d)''; and
       (2) in subsection (g), by striking ``, except that'' and 
     all that follows and inserting a period.
       (b) Definition of Mortgage.--Section 201(a) of the National 
     Housing Act (12 U.S.C. 1707(a)) is amended--
       (1) before ``a first mortgage'' insert ``(A)'';
       (2) by striking ``or on a leasehold (1)'' and inserting 
     ``(B) a first mortgage on a leasehold on real estate (i)'';
       (3) by striking ``or (2)'' and inserting ``, or (ii)''; and
       (4) by inserting before the semicolon the following: ``, or 
     (C) a first mortgage given to secure the unpaid purchase 
     price of a fee interest in, or long-term leasehold interest 
     in, real estate consisting of a one-family unit in a 
     multifamily project, including a project in which the 
     dwelling units are attached, or are manufactured housing 
     units, semi-detached, or detached, and an undivided interest 
     in the common areas and facilities which serve the project''.
       (c) Definition of Real Estate.--Section 201 of the National 
     Housing Act (12 U.S.C. 1707) is amended by adding at the end 
     the following new subsection:
       ``(g) The term `real estate' means land and all natural 
     resources and structures permanently affixed to the land, 
     including residential buildings and stationary manufactured 
     housing. The Secretary may not require, for treatment of any 
     land or other property as real estate for purposes of this 
     title, that such land or property be treated as real estate 
     for purposes of State taxation.''.

     SEC. 118. MUTUAL MORTGAGE INSURANCE FUND.

       (a) In General.--Subsection (a) of section 202 of the 
     National Housing Act (12 U.S.C. 1708(a)) is amended to read 
     as follows:
       ``(a) Mutual Mortgage Insurance Fund.--
       ``(1) Establishment.--Subject to the provisions of the 
     Federal Credit Reform Act of 1990, there is hereby created a 
     Mutual Mortgage Insurance Fund (in this title referred to as 
     the `Fund'), which shall be used by the Secretary to carry 
     out the provisions of this title with respect to mortgages 
     insured under section 203. The Secretary may enter into 
     commitments to guarantee, and may guarantee, such insured 
     mortgages.
       ``(2) Limit on loan guarantees.--The authority of the 
     Secretary to enter into commitments to guarantee such insured 
     mortgages shall be effective for any fiscal year only to the 
     extent that the aggregate original principal loan amount 
     under such mortgages, any part of which is guaranteed, does 
     not exceed the amount specified in appropriations Acts for 
     such fiscal year.
       ``(3) Fiduciary responsibility.--The Secretary has a 
     responsibility to ensure that the Mutual Mortgage Insurance 
     Fund remains financially sound.
       ``(4) Annual independent actuarial study.--The Secretary 
     shall provide for an independent actuarial study of the Fund 
     to be conducted annually, which shall analyze the financial 
     position of the Fund. The Secretary shall submit a report 
     annually to the Congress describing the results of such study 
     and assessing the financial status of the Fund. The report 
     shall recommend adjustments to underwriting standards, 
     program

[[Page 5047]]

     participation, or premiums, if necessary, to ensure that the 
     Fund remains financially sound.
       ``(5) Quarterly reports.--During each fiscal year, the 
     Secretary shall submit a report to the Congress for each 
     calendar quarter, which shall specify for mortgages that are 
     obligations of the Fund--
       ``(A) the cumulative volume of loan guarantee commitments 
     that have been made during such fiscal year through the end 
     of the quarter for which the report is submitted;
       ``(B) the types of loans insured, categorized by risk;
       ``(C) any significant changes between actual and projected 
     claim and prepayment activity;
       ``(D) projected versus actual loss rates; and
       ``(E) updated projections of the annual subsidy rates to 
     ensure that increases in risk to the Fund are identified and 
     mitigated by adjustments to underwriting standards, program 
     participation, or premiums, and the financial soundness of 
     the Fund is maintained.

     The first quarterly report under this paragraph shall be 
     submitted on the last day of the first quarter of fiscal year 
     2008, or on the last day of the first full calendar quarter 
     following the enactment of the Building American 
     Homeownership Act of 2008, whichever is later.
       ``(6) Adjustment of premiums.--If, pursuant to the 
     independent actuarial study of the Fund required under 
     paragraph (4), the Secretary determines that the Fund is not 
     meeting the operational goals established under paragraph (7) 
     or there is a substantial probability that the Fund will not 
     maintain its established target subsidy rate, the Secretary 
     may either make programmatic adjustments under this title as 
     necessary to reduce the risk to the Fund, or make appropriate 
     premium adjustments.
       ``(7) Operational goals.--The operational goals for the 
     Fund are--
       ``(A) to minimize the default risk to the Fund and to 
     homeowners by among other actions instituting fraud 
     prevention quality control screening not later than 18 months 
     after the date of enactment of the Building American 
     Homeownership Act of 2008; and
       ``(B) to meet the housing needs of the borrowers that the 
     single family mortgage insurance program under this title is 
     designed to serve.''.
       (b) Obligations of Fund.--The National Housing Act is 
     amended as follows:
       (1) Homeownership voucher program mortgages.--In section 
     203(v) (12 U.S.C. 1709(v))--
       (A) by striking ``Notwithstanding section 202 of this 
     title, the'' and inserting ``The''; and
       (B) by striking ``General Insurance Fund'' the first place 
     such term appears and all that follows through the end of the 
     subsection and inserting ``Mutual Mortgage Insurance Fund.''.
       (2) Home equity conversion mortgages.--Section 255(i)(2)(A) 
     of the National Housing Act (12 U.S.C. 1715z-20(i)(2)(A)) is 
     amended by striking ``General Insurance Fund'' and inserting 
     ``Mutual Mortgage Insurance Fund''.
       (c) Conforming Amendments.--The National Housing Act is 
     amended--
       (1) in section 205 (12 U.S.C. 1711), by striking 
     subsections (g) and (h); and
       (2) in section 519(e) (12 U.S.C. 1735c(e)), by striking 
     ``203(b)'' and all that follows through ``203(i)'' and 
     inserting ``203, except as determined by the Secretary''.

     SEC. 119. HAWAIIAN HOME LANDS AND INDIAN RESERVATIONS.

       (a) Hawaiian Home Lands.--Section 247(c) of the National 
     Housing Act (12 U.S.C. 1715z-12(c)) is amended--
       (1) by striking ``General Insurance Fund established in 
     section 519'' and inserting ``Mutual Mortgage Insurance 
     Fund''; and
       (2) in the second sentence, by striking ``(1) all 
     references'' and all that follows through ``and (2)''.
       (b) Indian Reservations.--Section 248(f) of the National 
     Housing Act (12 U.S.C. 1715z-13(f)) is amended--
       (1) by striking ``General Insurance Fund'' the first place 
     it appears through ``519'' and inserting ``Mutual Mortgage 
     Insurance Fund''; and
       (2) in the second sentence, by striking ``(1) all 
     references'' and all that follows through ``and (2)''.

     SEC. 120. CONFORMING AND TECHNICAL AMENDMENTS.

       (a) Repeals.--The following provisions of the National 
     Housing Act are repealed:
       (1) Subsection (i) of section 203 (12 U.S.C. 1709(i)).
       (2) Subsection (o) of section 203 (12 U.S.C. 1709(o)).
       (3) Subsection (p) of section 203 (12 U.S.C. 1709(p)).
       (4) Subsection (q) of section 203 (12 U.S.C. 1709(q)).
       (5) Section 222 (12 U.S.C. 1715m).
       (6) Section 237 (12 U.S.C. 1715z-2).
       (7) Section 245 (12 U.S.C. 1715z-10).
       (b) Definition of Area.--Section 203(u)(2)(A) of the 
     National Housing Act (12 U.S.C. 1709(u)(2)(A)) is amended by 
     striking ``shall'' and all that follows and inserting ``means 
     a metropolitan statistical area as established by the Office 
     of Management and Budget;''.
       (c) Definition of State.--Section 201(d) of the National 
     Housing Act (12 U.S.C. 1707(d)) is amended by striking ``the 
     Trust Territory of the Pacific Islands'' and inserting ``the 
     Commonwealth of the Northern Mariana Islands''.

     SEC. 121. INSURANCE OF MORTGAGES.

       Subsection (n)(2) of section 203 of the National Housing 
     Act (12 U.S.C. 1709(n)(2)) is amended--
       (1) in subparagraph (A), by inserting ``or subordinate 
     mortgage or'' before ``lien given''; and
       (2) in subparagraph (C), by inserting ``or subordinate 
     mortgage or'' before ``lien''.

     SEC. 122. HOME EQUITY CONVERSION MORTGAGES.

       (a) In General.--Section 255 of the National Housing Act 
     (12 U.S.C. 1715z-20) is amended--
       (1) in subsection (b)(2), insert `` `real estate,' '' after 
     `` `mortgagor','';
       (2) in subsection (g), by striking ``established under 
     section 203(b)(2)'' and all that follows through ``located'' 
     and inserting ``limitation established under section 
     305(a)(2) of the Federal Home Loan Mortgage Corporation Act 
     for a 1-family residence'';
       (3) in subsection (i)(1)(C), by striking ``limitations'' 
     and inserting ``limitation''; and
       (4) by adding at the end the following new subsection:
       ``(o) Authority To Insure Home Purchase Mortgage.--
       ``(1) In general.--Notwithstanding any other provision of 
     this section, the Secretary may insure, upon application by a 
     mortgagee, a home equity conversion mortgage upon such terms 
     and conditions as the Secretary may prescribe, when the home 
     equity conversion mortgage will be used to purchase a 1- to 
     4-family dwelling unit, one unit of which that the mortgagor 
     will occupy as a primary residence, and to provide for any 
     future payments to the mortgagor, based on available equity, 
     as authorized under subsection (d)(9).
       ``(2) Limitation on principal obligation.--A home equity 
     conversion mortgage insured pursuant to paragraph (1) shall 
     involve a principal obligation that does not exceed the 
     dollar amount limitation determined under section 305(a)(2) 
     of the Federal Home Loan Mortgage Corporation Act for a 1-
     family residence.''.
       (b) Mortgages for Cooperatives.--Subsection (b) of section 
     255 of the National Housing Act (12 U.S.C. 1715z-20(b)) is 
     amended--
       (1) in paragraph (4)--
       (A) by inserting ``a first or subordinate mortgage or 
     lien'' before ``on all stock'';
       (B) by inserting ``unit'' after ``dwelling''; and
       (C) by inserting ``a first mortgage or first lien'' before 
     ``on a leasehold''; and
       (2) in paragraph (5), by inserting ``a first or subordinate 
     lien on'' before ``all stock''.
       (c) Limitation on Origination Fees.--Section 255 of the 
     National Housing Act (12 U.S.C. 1715z-20), as amended by the 
     preceding provisions of this section, is further amended--
       (1) by redesignating subsections (k), (l), and (m) as 
     subsections (l), (m), and (n), respectively; and
       (2) by inserting after subsection (j) the following new 
     subsection:
       ``(k) Limitation on Origination Fees.--The Secretary shall 
     establish limits on the origination fee that may be charged 
     to a mortgagor under a mortgage insured under this section, 
     which limitations shall--
       ``(1) equal 1.5 percent of the maximum claim amount of the 
     mortgage unless adjusted thereafter on the basis of--
       ``(A) the costs to the mortgagor; and
       ``(B) the impact of such fees on the reverse mortgage 
     market;
       ``(2) be subject to a minimum allowable amount;
       ``(3) provide that the origination fee may be fully 
     financed with the mortgage;
       ``(4) include any fees paid to correspondent mortgagees 
     approved by the Secretary; and
       ``(5) have the same effective date as subsection (o)(2) 
     regarding the limitation on principal obligation.''.
       (d) Study Regarding Program Costs and Credit 
     Availability.--
       (1) In general.--The Comptroller General of the United 
     States shall conduct a study regarding the costs and 
     availability of credit under the home equity conversion 
     mortgages for elderly homeowners program under section 255 of 
     the National Housing Act (12 U.S.C. 1715z-20) (in this 
     subsection referred to as the ``program'').
       (2) Purpose.--The purpose of the study required under 
     paragraph (1) is to help Congress analyze and determine the 
     effects of limiting the amounts of the costs or fees under 
     the program from the amounts charged under the program as of 
     the date of the enactment of this title.
       (3) Content of report.--The study required under paragraph 
     (1) should focus on--
       (A) the cost to mortgagors of participating in the program;
       (B) the financial soundness of the program;
       (C) the availability of credit under the program; and
       (D) the costs to elderly homeowners participating in the 
     program, including--
       (i) mortgage insurance premiums charged under the program;

[[Page 5048]]

       (ii) up-front fees charged under the program; and
       (iii) margin rates charged under the program.
       (4) Timing of report.--Not later than 12 months after the 
     date of the enactment of this title, the Comptroller General 
     shall submit a report to the Committee on Banking, Housing, 
     and Urban Affairs of the Senate and the Committee on 
     Financial Services of the House of Representatives setting 
     forth the results and conclusions of the study required under 
     paragraph (1).

     SEC. 123. ENERGY EFFICIENT MORTGAGES PROGRAM.

       Section 106(a)(2) of the Energy Policy Act of 1992 (42 
     U.S.C. 12712 note) is amended--
       (1) by amending subparagraph (C) to read as follows:
       ``(C) Costs of improvements.--The cost of cost-effective 
     energy efficiency improvements shall not exceed the greater 
     of--
       ``(i) 5 percent of the property value (not to exceed 5 
     percent of the limit established under section 203(b)(2)(A)) 
     of the National Housing Act (12 U.S.C. 1709(b)(2)(A); or
       ``(ii) 2 percent of the limit established under section 
     203(b)(2)(B) of such Act.''; and
       (2) by adding at the end the following:
       ``(D) Limitation.--In any fiscal year, the aggregate number 
     of mortgages insured pursuant to this section may not exceed 
     5 percent of the aggregate number of mortgages for 1- to 4-
     family residences insured by the Secretary of Housing and 
     Urban Development under title II of the National Housing Act 
     (12 U.S.C. 1707 et seq.) during the preceding fiscal year.''.

     SEC. 124. PILOT PROGRAM FOR AUTOMATED PROCESS FOR BORROWERS 
                   WITHOUT SUFFICIENT CREDIT HISTORY.

       (a) Establishment.--Title II of the National Housing Act 
     (12 U.S.C. 1707 et seq.) is amended by adding at the end the 
     following new section:

     ``SEC. 257. PILOT PROGRAM FOR AUTOMATED PROCESS FOR BORROWERS 
                   WITHOUT SUFFICIENT CREDIT HISTORY.

       ``(a) Establishment.--The Secretary shall carry out a pilot 
     program to establish, and make available to mortgagees, an 
     automated process for providing alternative credit rating 
     information for mortgagors and prospective mortgagors under 
     mortgages on 1- to 4-family residences to be insured under 
     this title who have insufficient credit histories for 
     determining their creditworthiness. Such alternative credit 
     rating information may include rent, utilities, and insurance 
     payment histories, and such other information as the 
     Secretary considers appropriate.
       ``(b) Scope.--The Secretary may carry out the pilot program 
     under this section on a limited basis or scope, and may 
     consider limiting the program to first-time homebuyers.
       ``(c) Limitation.--In any fiscal year, the aggregate number 
     of mortgages insured pursuant to the automated process 
     established under this section may not exceed 5 percent of 
     the aggregate number of mortgages for 1- to 4-family 
     residences insured by the Secretary under this title during 
     the preceding fiscal year.
       ``(d) Sunset.--After the expiration of the 5-year period 
     beginning on the date of the enactment of the Building 
     American Homeownership Act of 2008, the Secretary may not 
     enter into any new commitment to insure any mortgage, or 
     newly insure any mortgage, pursuant to the automated process 
     established under this section.''.
       (b) GAO Report.--Not later than the expiration of the two-
     year period beginning on the date of the enactment of this 
     subtitle, the Comptroller General of the United States shall 
     submit to the Congress a report identifying the number of 
     additional mortgagors served using the automated process 
     established pursuant to section 257 of the National Housing 
     Act (as added by the amendment made by subsection (a) of this 
     section) and the impact of such process and the insurance of 
     mortgages pursuant to such process on the safety and 
     soundness of the insurance funds under the National Housing 
     Act of which such mortgages are obligations.

     SEC. 125. HOMEOWNERSHIP PRESERVATION.

       The Secretary of Housing and Urban Development and the 
     Commissioner of the Federal Housing Administration, in 
     consultation with industry, the Neighborhood Reinvestment 
     Corporation, and other entities involved in foreclosure 
     prevention activities, shall--
       (1) develop and implement a plan to improve the Federal 
     Housing Administration's loss mitigation process; and
       (2) report such plan to the Committee on Banking, Housing, 
     and Urban Affairs of the Senate and the Committee on 
     Financial Services of the House of Representatives.

     SEC. 126. USE OF FHA SAVINGS FOR IMPROVEMENTS IN FHA 
                   TECHNOLOGIES, PROCEDURES, PROCESSES, PROGRAM 
                   PERFORMANCE, STAFFING, AND SALARIES.

       (a) Authorization of Appropriations.--There is authorized 
     to be appropriated for each of fiscal years 2009 through 
     2013, $25,000,000, from negative credit subsidy for the 
     mortgage insurance programs under title II of the National 
     Housing Act, to the Secretary of Housing and Urban 
     Development for increasing funding for the purpose of 
     improving technology, processes, program performance, 
     eliminating fraud, and for providing appropriate staffing in 
     connection with the mortgage insurance programs under title 
     II of the National Housing Act.
       (b) Certification.--The authorization under subsection (a) 
     shall not be effective for a fiscal year unless the Secretary 
     of Housing and Urban Development has, by rulemaking in 
     accordance with section 553 of title 5, United States Code 
     (notwithstanding subsections (a)(2), (b)(B), and (d)(3) of 
     such section), made a determination that--
       (1) premiums being, or to be, charged during such fiscal 
     year for mortgage insurance under title II of the National 
     Housing Act are established at the minimum amount sufficient 
     to--
       (A) comply with the requirements of section 205(f) of such 
     Act (relating to required capital ratio for the Mutual 
     Mortgage Insurance Fund); and
       (B) ensure the safety and soundness of the other mortgage 
     insurance funds under such Act; and
       (2) any negative credit subsidy for such fiscal year 
     resulting from such mortgage insurance programs adequately 
     ensures the efficient delivery and availability of such 
     programs.
       (c) Study and Report.--The Secretary of Housing and Urban 
     Development shall conduct a study to obtain recommendations 
     from participants in the private residential (both single 
     family and multifamily) mortgage lending business and the 
     secondary market for such mortgages on how best to update and 
     upgrade processes and technologies for the mortgage insurance 
     programs under title II of the National Housing Act so that 
     the procedures for originating, insuring, and servicing of 
     such mortgages conform with those customarily used by 
     secondary market purchasers of residential mortgage loans. 
     Not later than the expiration of the 12-month period 
     beginning on the date of the enactment of this title, the 
     Secretary shall submit a report to the Congress describing 
     the progress made and to be made toward updating and 
     upgrading such processes and technology, and providing 
     appropriate staffing for such mortgage insurance programs.

     SEC. 127. POST-PURCHASE HOUSING COUNSELING ELIGIBILITY 
                   IMPROVEMENTS.

       Section 106(c)(4) of the Housing and Urban Development Act 
     of 1968 (12 U.S.C. 1701x(c)(4)) is amended:
       (1) in subparagraph (C)--
       (A) in clause (i), by striking ``; or'' and inserting a 
     semicolon;
       (B) in clause (ii), by striking the period at the end and 
     inserting a semicolon; and
       (C) by adding at the end the following:
       ``(iii) a significant reduction in the income of the 
     household due to divorce or death; or
       ``(iv) a significant increase in basic expenses of the 
     homeowner or an immediate family member of the homeowner 
     (including the spouse, child, or parent for whom the 
     homeowner provides substantial care or financial assistance) 
     due to--

       ``(I) an unexpected or significant increase in medical 
     expenses;
       ``(II) a divorce;
       ``(III) unexpected and significant damage to the property, 
     the repair of which will not be covered by private or public 
     insurance; or
       ``(IV) a large property-tax increase; or'';

       (2) by striking the matter that follows subparagraph (C); 
     and
       (3) by adding at the end the following:
       ``(D) the Secretary of Housing and Urban Development 
     determines that the annual income of the homeowner is no 
     greater than the annual income established by the Secretary 
     as being of low- or moderate-income.''.

     SEC. 128. PRE-PURCHASE HOMEOWNERSHIP COUNSELING 
                   DEMONSTRATION.

       (a) Establishment of Program.--For the period beginning on 
     the date of enactment of this title and ending on the date 
     that is 3 years after such date of enactment, the Secretary 
     of Housing and Urban Development shall establish and conduct 
     a demonstration program to test the effectiveness of 
     alternative forms of pre-purchase homeownership counseling 
     for eligible homebuyers.
       (b) Forms of Counseling.--The Secretary of Housing and 
     Urban Development shall provide to eligible homebuyers pre-
     purchase homeownership counseling under this section in the 
     form of--
       (1) telephone counseling;
       (2) individualized in-person counseling;
       (3) web-based counseling;
       (4) counseling classes; or
       (5) any other form or type of counseling that the Secretary 
     may, in his discretion, determine appropriate.
       (c) Size of Program.--The Secretary shall make available 
     the pre-purchase homeownership counseling described in 
     subsection (b) to not more than 3,000 eligible homebuyers in 
     any given year.
       (d) Incentive to Participate.--The Secretary of Housing and 
     Urban Development may provide incentives to eligible 
     homebuyers to participate in the demonstration program 
     established under subsection (a). Such incentives may include 
     the reduction of any insurance premium charges owed by the 
     eligible homebuyer to the Secretary.
       (e) Eligible Homebuyer Defined.--For purposes of this 
     section an ``eligible homebuyer'' means a first-time 
     homebuyer who

[[Page 5049]]

     has been approved for a home loan with a loan-to-value ratio 
     between 97 percent and 98.5 percent.
       (f) Report to Congress.--The Secretary of Housing and Urban 
     Development shall report to the Committee on Banking, 
     Housing, and Urban Affairs of the Senate and the Committee on 
     Financial Services of the House of Representative--
       (1) on an annual basis, on the progress and results of the 
     demonstration program established under subsection (a); and
       (2) for the period beginning on the date of enactment of 
     this title and ending on the date that is 5 years after such 
     date of enactment, on the payment history and delinquency 
     rates of eligible homebuyers who participated in the 
     demonstration program.

     SEC. 129. FRAUD PREVENTION.

       Section 1014 of title 18, United States Code, is amended in 
     the first sentence--
       (1) by inserting ``the Federal Housing Administration'' 
     before ``the Farm Credit Administration''; and
       (2) by striking ``commitment, or loan'' and inserting 
     ``commitment, loan, or insurance agreement or application for 
     insurance or a guarantee''.

     SEC. 130. LIMITATION ON MORTGAGE INSURANCE PREMIUM INCREASES.

       (a) In General.--Notwithstanding any other provision of 
     law, including any provision of this title and any amendment 
     made by this title--
       (1) for the period beginning on the date of the enactment 
     of this title and ending on October 1, 2009, the premiums 
     charged for mortgage insurance under multifamily housing 
     programs under the National Housing Act may not be increased 
     above the premium amounts in effect under such program on 
     October 1, 2006, unless the Secretary of Housing and Urban 
     Development determines that, absent such increase, insurance 
     of additional mortgages under such program would, under the 
     Federal Credit Reform Act of 1990, require the appropriation 
     of new budget authority to cover the costs (as such term is 
     defined in section 502 of the Federal Credit Reform Act of 
     1990 (2 U.S.C. 661a) of such insurance; and
       (2) a premium increase pursuant to paragraph (1) may be 
     made only if not less than 30 days prior to such increase 
     taking effect, the Secretary of Housing and Urban 
     Development--
       (A) notifies the Committee on Banking, Housing, and Urban 
     Affairs of the Senate and the Committee on Financial Services 
     of the House of Representatives of such increase; and
       (B) publishes notice of such increase in the Federal 
     Register.
       (b) Waiver.--The Secretary of Housing and Urban Development 
     may waive the 30-day notice requirement under subsection 
     (a)(2), if the Secretary determines that waiting 30-days 
     before increasing premiums would cause substantial damage to 
     the solvency of multifamily housing programs under the 
     National Housing Act.

     SEC. 131. SAVINGS PROVISION.

       Any mortgage insured under title II of the National Housing 
     Act before the date of enactment of this subtitle shall 
     continue to be governed by the laws, regulations, orders, and 
     terms and conditions to which it was subject on the day 
     before the date of the enactment of this subtitle.

     SEC. 132. IMPLEMENTATION.

       The Secretary of Housing and Urban Development shall by 
     notice establish any additional requirements that may be 
     necessary to immediately carry out the provisions of this 
     subtitle. The notice shall take effect upon issuance.

     SEC. 133. MORATORIUM ON IMPLEMENTATION OF RISK-BASED 
                   PREMIUMS.

       For the 12-month period beginning on the date of enactment 
     of this title, the Secretary of Housing and Urban Development 
     shall not enact, execute, or take any action to make 
     effective the planned implementation of risk-based premiums, 
     which are designed for mortgage lenders to offer borrowers an 
     FHA-insured product that provides a range of mortgage 
     insurance premium pricing, based on the risk the insurance 
     contract represents, as such planned implementation was set 
     forth in the Notice published in the Federal Register on 
     September 20, 2007 (Vol. 72, No. 182, Page 53872).

          Subtitle B--Manufactured Housing Loan Modernization

     SEC. 141. SHORT TITLE.

       This subtitle may be cited as the ``FHA Manufactured 
     Housing Loan Modernization Act of 2008''.

     SEC. 142. PURPOSES.

       The purposes of this subtitle are--
       (1) to provide adequate funding for FHA-insured 
     manufactured housing loans for low- and moderate-income 
     homebuyers during all economic cycles in the manufactured 
     housing industry;
       (2) to modernize the FHA title I insurance program for 
     manufactured housing loans to enhance participation by Ginnie 
     Mae and the private lending markets; and
       (3) to adjust the low loan limits for title I manufactured 
     home loan insurance to reflect the increase in costs since 
     such limits were last increased in 1992 and to index the 
     limits to inflation.

     SEC. 143. EXCEPTION TO LIMITATION ON FINANCIAL INSTITUTION 
                   PORTFOLIO.

       The second sentence of section 2(a) of the National Housing 
     Act (12 U.S.C. 1703(a)) is amended--
       (1) by striking ``In no case'' and inserting ``Other than 
     in connection with a manufactured home or a lot on which to 
     place such a home (or both), in no case''; and
       (2) by striking ``: Provided, That with'' and inserting ``. 
     With''.

     SEC. 144. INSURANCE BENEFITS.

       (a) In General.--Subsection (b) of section 2 of the 
     National Housing Act (12 U.S.C. 1703(b)), is amended by 
     adding at the end the following new paragraph:
       ``(8) Insurance benefits for manufactured housing loans.--
     Any contract of insurance with respect to loans, advances of 
     credit, or purchases in connection with a manufactured home 
     or a lot on which to place a manufactured home (or both) for 
     a financial institution that is executed under this title 
     after the date of the enactment of the FHA Manufactured 
     Housing Loan Modernization Act of 2008 by the Secretary shall 
     be conclusive evidence of the eligibility of such financial 
     institution for insurance, and the validity of any contract 
     of insurance so executed shall be incontestable in the hands 
     of the bearer from the date of the execution of such 
     contract, except for fraud or misrepresentation on the part 
     of such institution.''.
       (b) Applicability.--The amendment made by subsection (a) 
     shall only apply to loans that are registered or endorsed for 
     insurance after the date of the enactment of this title.

     SEC. 145. MAXIMUM LOAN LIMITS.

       (a) Dollar Amounts.--Paragraph (1) of section 2(b) of the 
     National Housing Act (12 U.S.C. 1703(b)(1)) is amended--
       (1) in clause (ii) of subparagraph (A), by striking 
     ``$17,500'' and inserting ``$25,090'';
       (2) in subparagraph (C) by striking ``$48,600'' and 
     inserting ``$69,678'';
       (3) in subparagraph (D) by striking ``$64,800'' and 
     inserting ``$92,904'';
       (4) in subparagraph (E) by striking ``$16,200'' and 
     inserting ``$23,226''; and
       (5) by realigning subparagraphs (C), (D), and (E) 2 ems to 
     the left so that the left margins of such subparagraphs are 
     aligned with the margins of subparagraphs (A) and (B).
       (b) Annual Indexing.--Subsection (b) of section 2 of the 
     National Housing Act (12 U.S.C. 1703(b)), as amended by the 
     preceding provisions of this title, is further amended by 
     adding at the end the following new paragraph:
       ``(9) Annual indexing of manufactured housing loans.--The 
     Secretary shall develop a method of indexing in order to 
     annually adjust the loan limits established in subparagraphs 
     (A)(ii), (C), (D), and (E) of this subsection. Such index 
     shall be based on the manufactured housing price data 
     collected by the United States Census Bureau. The Secretary 
     shall establish such index no later than 1 year after the 
     date of the enactment of the FHA Manufactured Housing Loan 
     Modernization Act of 2008.''
       (c) Technical and Conforming Changes.--Paragraph (1) of 
     section 2(b) of the National Housing Act (12 U.S.C. 
     1703(b)(1)) is amended--
       (1) by striking ``No'' and inserting ``Except as provided 
     in the last sentence of this paragraph, no''; and
       (2) by adding after and below subparagraph (G) the 
     following:
       ``The Secretary shall, by regulation, annually increase the 
     dollar amount limitations in subparagraphs (A)(ii), (C), (D), 
     and (E) (as such limitations may have been previously 
     adjusted under this sentence) in accordance with the index 
     established pursuant to paragraph (9).''.

     SEC. 146. INSURANCE PREMIUMS.

       Subsection (f) of section 2 of the National Housing Act (12 
     U.S.C. 1703(f)) is amended--
       (1) by inserting ``(1) Premium charges.--'' after ``(f)''; 
     and
       (2) by adding at the end the following new paragraph:
       ``(2) Manufactured Home Loans.--Notwithstanding paragraph 
     (1), in the case of a loan, advance of credit, or purchase in 
     connection with a manufactured home or a lot on which to 
     place such a home (or both), the premium charge for the 
     insurance granted under this section shall be paid by the 
     borrower under the loan or advance of credit, as follows:
       ``(A) At the time of the making of the loan, advance of 
     credit, or purchase, a single premium payment in an amount 
     not to exceed 2.25 percent of the amount of the original 
     insured principal obligation.
       ``(B) In addition to the premium under subparagraph (A), 
     annual premium payments during the term of the loan, advance, 
     or obligation purchased in an amount not exceeding 1.0 
     percent of the remaining insured principal balance (excluding 
     the portion of the remaining balance attributable to the 
     premium collected under subparagraph (A) and without taking 
     into account delinquent payments or prepayments).
       ``(C) Premium charges under this paragraph shall be 
     established in amounts that are sufficient, but do not exceed 
     the minimum amounts necessary, to maintain a negative credit 
     subsidy for the program under this section for insurance of 
     loans, advances of credit, or purchases in connection with a 
     manufactured home or a lot on which to place such a home (or 
     both), as determined

[[Page 5050]]

     based upon risk to the Federal Government under existing 
     underwriting requirements.
       ``(D) The Secretary may increase the limitations on premium 
     payments to percentages above those set forth in 
     subparagraphs (A) and (B), but only if necessary, and not in 
     excess of the minimum increase necessary, to maintain a 
     negative credit subsidy as described in subparagraph (C).''.

     SEC. 147. TECHNICAL CORRECTIONS.

       (a) Dates.--Subsection (a) of section 2 of the National 
     Housing Act (12 U.S.C. 1703(a)) is amended--
       (1) by striking ``on and after July 1, 1939,'' each place 
     such term appears; and
       (2) by striking ``made after the effective date of the 
     Housing Act of 1954''.
       (b) Authority of Secretary.--Subsection (c) of section 2 of 
     the National Housing Act (12 U.S.C. 1703(c)) is amended to 
     read as follows:
       ``(c) Handling and Disposal of Property.--
       ``(1) Authority of secretary.--Notwithstanding any other 
     provision of law, the Secretary may--
       ``(A) deal with, complete, rent, renovate, modernize, 
     insure, or assign or sell at public or private sale, or 
     otherwise dispose of, for cash or credit in the Secretary's 
     discretion, and upon such terms and conditions and for such 
     consideration as the Secretary shall determine to be 
     reasonable, any real or personal property conveyed to or 
     otherwise acquired by the Secretary, in connection with the 
     payment of insurance heretofore or hereafter granted under 
     this title, including any evidence of debt, contract, claim, 
     personal property, or security assigned to or held by him in 
     connection with the payment of insurance heretofore or 
     hereafter granted under this section; and
       ``(B) pursue to final collection, by way of compromise or 
     otherwise, all claims assigned to or held by the Secretary 
     and all legal or equitable rights accruing to the Secretary 
     in connection with the payment of such insurance, including 
     unpaid insurance premiums owed in connection with insurance 
     made available by this title.
       ``(2) Advertisements for proposals.--Section 3709 of the 
     Revised Statutes shall not be construed to apply to any 
     contract of hazard insurance or to any purchase or contract 
     for services or supplies on account of such property if the 
     amount thereof does not exceed $25,000.
       ``(3) Delegation of authority.--The power to convey and to 
     execute in the name of the Secretary, deeds of conveyance, 
     deeds of release, assignments and satisfactions of mortgages, 
     and any other written instrument relating to real or personal 
     property or any interest therein heretofore or hereafter 
     acquired by the Secretary pursuant to the provisions of this 
     title may be exercised by an officer appointed by the 
     Secretary without the execution of any express delegation of 
     power or power of attorney. Nothing in this subsection shall 
     be construed to prevent the Secretary from delegating such 
     power by order or by power of attorney, in the Secretary's 
     discretion, to any officer or agent the Secretary may 
     appoint.''.

     SEC. 148. REVISION OF UNDERWRITING CRITERIA.

       (a) In General.--Subsection (b) of section 2 of the 
     National Housing Act (12 U.S.C. 1703(b)), as amended by the 
     preceding provisions of this title, is further amended by 
     adding at the end the following new paragraph:
       ``(10) Financial soundness of manufactured housing 
     program.--The Secretary shall establish such underwriting 
     criteria for loans and advances of credit in connection with 
     a manufactured home or a lot on which to place a manufactured 
     home (or both), including such loans and advances represented 
     by obligations purchased by financial institutions, as may be 
     necessary to ensure that the program under this title for 
     insurance for financial institutions against losses from such 
     loans, advances of credit, and purchases is financially 
     sound.''.
       (b) Timing.--Not later than the expiration of the 6-month 
     period beginning on the date of the enactment of this title, 
     the Secretary of Housing and Urban Development shall revise 
     the existing underwriting criteria for the program referred 
     to in paragraph (10) of section 2(b) of the National Housing 
     Act (as added by subsection (a) of this section) in 
     accordance with the requirements of such paragraph.

     SEC. 149. PROHIBITION AGAINST KICKBACKS AND UNEARNED FEES.

       Title I of the National Housing Act is amended by adding at 
     the end of section 9 the following new section:

     ``SEC. 10. PROHIBITION AGAINST KICKBACKS AND UNEARNED FEES.

       ``(a) In General.--Except as provided in subsection (b), 
     the provisions of sections 3, 8, 16, 17, 18, and 19 of the 
     Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2601 
     et seq.) shall apply to each sale of a manufactured home 
     financed with an FHA-insured loan or extension of credit, as 
     well as to services rendered in connection with such 
     transactions.
       ``(b) Authority of the Secretary.--The Secretary is 
     authorized to determine the manner and extent to which the 
     provisions of sections 3, 8, 16, 17, 18, and 19 of the Real 
     Estate Settlement Procedures Act of 1974 (12 U.S.C. 2601 et 
     seq.) may reasonably be applied to the transactions described 
     in subsection (a), and to grant such exemptions as may be 
     necessary to achieve the purposes of this section.
       ``(c) Definitions.--For purposes of this section--
       ``(1) the term `federally related mortgage loan' as used in 
     sections 3, 8, 16, 17, 18, and 19 of the Real Estate 
     Settlement Procedures Act of 1974 (12 U.S.C. 2601 et seq.) 
     shall include an FHA-insured loan or extension of credit made 
     to a borrower for the purpose of purchasing a manufactured 
     home that the borrower intends to occupy as a personal 
     residence; and
       ``(2) the term `real estate settlement service' as used in 
     sections 3, 8, 16, 17, 18, and 19 of the Real Estate 
     Settlement Procedures Act of 1974 (12 U.S.C. 2601 et seq.) 
     shall include any service rendered in connection with a loan 
     or extension of credit insured by the Federal Housing 
     Administration for the purchase of a manufactured home.
       ``(d) Unfair and Deceptive Practices.--In connection with 
     the purchase of a manufactured home financed with a loan or 
     extension of credit insured by the Federal Housing 
     Administration under this title, the Secretary shall prohibit 
     acts or practices in connection with loans or extensions of 
     credit that the Secretary finds to be unfair, deceptive, or 
     otherwise not in the interests of the borrower.''.

     SEC. 150. LEASEHOLD REQUIREMENTS.

       Subsection (b) of section 2 of the National Housing Act (12 
     U.S.C. 1703(b)), as amended by the preceding provisions of 
     this title, is further amended by adding at the end the 
     following new paragraph:
       ``(11) Leasehold requirements.--No insurance shall be 
     granted under this section to any such financial institution 
     with respect to any obligation representing any such loan, 
     advance of credit, or purchase by it, made for the purposes 
     of financing a manufactured home which is intended to be 
     situated in a manufactured home community pursuant to a 
     lease, unless such lease--
       ``(A) expires not less than 3 years after the origination 
     date of the obligation;
       ``(B) is renewable upon the expiration of the original 3 
     year term by successive 1 year terms; and
       ``(C) requires the lessor to provide the lessee written 
     notice of termination of the lease not less than 180 days 
     prior to the expiration of the current lease term in the 
     event the lessee is required to move due to the closing of 
     the manufactured home community, and further provides that 
     failure to provide such notice to the mortgagor in a timely 
     manner will cause the lease term, at its expiration, to 
     automatically renew for an additional 1 year term.''.

     TITLE II--MORTGAGE FORECLOSURE PROTECTIONS FOR SERVICEMEMBERS

     SEC. 201. TEMPORARY INCREASE IN MAXIMUM LOAN GUARANTY AMOUNT 
                   FOR CERTAIN HOUSING LOANS GUARANTEED BY THE 
                   SECRETARY OF VETERANS AFFAIRS.

       Notwithstanding subparagraph (C) of section 3703(a)(1) of 
     title 38, United States Code, for purposes of any loan 
     described in subparagraph (A)(i)(IV) of such section that is 
     originated during the period beginning on the date of the 
     enactment of this Act and ending on December 31, 2008, the 
     term ``maximum guaranty amount'' shall mean an amount equal 
     to 25 percent of the higher of--
       (1) the limitation determined under section 305(a)(2) of 
     the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 
     1454(a)(2)) for the calendar year in which the loan is 
     originated for a single-family residence; or
       (2) 125 percent of the area median price for a single-
     family residence, but in no case to exceed 175 percent of the 
     limitation determined under such section 305(a)(2) for the 
     calendar year in which the loan is originated for a single-
     family residence.

     SEC. 202. COUNSELING ON MORTGAGE FORECLOSURES FOR MEMBERS OF 
                   THE ARMED FORCES RETURNING FROM SERVICE ABROAD.

       (a) In General.--The Secretary of Defense shall develop and 
     implement a program to advise members of the Armed Forces 
     (including members of the National Guard and Reserve) who are 
     returning from service on active duty abroad (including 
     service in Operation Iraqi Freedom and Operation Enduring 
     Freedom) on actions to be taken by such members to prevent or 
     forestall mortgage foreclosures.
       (b) Elements.--The program required by subsection (a) shall 
     include the following:
       (1) Credit counseling.
       (2) Home mortgage counseling.
       (3) Such other counseling and information as the Secretary 
     considers appropriate for purposes of the program.
       (c) Timing of Provision of Counseling.--Counseling and 
     other information under the program required by subsection 
     (a) shall be provided to a member of the Armed Forces covered 
     by the program as soon as practicable after the return of the 
     member from service as described in subsection (a).

     SEC. 203. ENHANCEMENT OF PROTECTIONS FOR SERVICEMEMBERS 
                   RELATING TO MORTGAGES AND MORTGAGE 
                   FORECLOSURES.

       (a) Extension of Period of Protections Against Mortgage 
     Foreclosures.--
       (1) Extension of protection period.--Subsection (c) of 
     section 303 of the

[[Page 5051]]

     Servicemembers Civil Relief Act (50 U.S.C. App. 533) is 
     amended by striking ``90 days'' and inserting ``9 months''.
       (2) Extension of stay of proceedings period.--Subsection 
     (b) of such section is amended by striking ``90 days'' and 
     inserting ``9 months''.
       (b) Treatment of Mortgages as Obligations Subject to 
     Interest Rate Limitation.--Section 207 of the Servicemembers 
     Civil Relief Act (50 U.S.C. App. 527) is amended--
       (1) in subsection (a)(1), by striking ``in excess of 6 
     percent'' and all that follows and inserting ``in excess of 6 
     percent--
       ``(A) during the period of military service and one year 
     thereafter, in the case of an obligation or liability 
     consisting of a mortgage, trust deed, or other security in 
     the nature of a mortgage; or
       ``(B) during the period of military service, in the case of 
     any other obligation or liability.''; and
       (2) by striking subsection (d) and inserting the following 
     new subsection:
       ``(d) Definitions.--In this section:
       ``(1) Interest.--The term `interest' includes service 
     charges, renewal charges, fees, or any other charges (except 
     bona fide insurance) with respect to an obligation or 
     liability.
       ``(2) Obligation or liability.--The term `obligation or 
     liability' includes an obligation or liability consisting of 
     a mortgage, trust deed, or other security in the nature of a 
     mortgage.''.
       (c) Effective Date; Sunset.--
       (1) Effective date.--The amendment made by subsection (a) 
     shall take effect on the date of the enactment of this Act.
       (2) Sunset.--The amendments made by subsection (a) shall 
     expire on December 31, 2010. Effective January 1, 2011, the 
     provisions of subsections (b) and (c) of section 303 of the 
     Servicemembers Civil Relief Act, as in effect on the day 
     before the date of the enactment of this Act, are hereby 
     revived.

TITLE III--EMERGENCY ASSISTANCE FOR THE REDEVELOPMENT OF ABANDONED AND 
                            FORECLOSED HOMES

     SEC. 301. EMERGENCY ASSISTANCE FOR THE REDEVELOPMENT OF 
                   ABANDONED AND FORECLOSED HOMES.

       (a) Direct Appropriations.--There are appropriated out of 
     any money in the Treasury not otherwise appropriated for the 
     fiscal year 2008, $4,000,000,000, to remain available until 
     expended, for assistance to States and units of general local 
     government (as such terms are defined in section 102 of the 
     Housing and Community Development Act of 1974 (42 U.S.C. 
     5302)) for the redevelopment of abandoned and foreclosed upon 
     homes and residential properties.
       (b) Allocation of Appropriated Amounts.--
       (1) In general.--The amounts appropriated or otherwise made 
     available to States and units of general local government 
     under this section shall be allocated based on a funding 
     formula established by the Secretary of Housing and Urban 
     Development (in this title referred to as the ``Secretary'').
       (2) Formula to be devised swiftly.--The funding formula 
     required under paragraph (1) shall be established not later 
     than 60 days after the date of enactment of this section.
       (3) Criteria.--The funding formula required under paragraph 
     (1) shall ensure that any amounts appropriated or otherwise 
     made available under this section are allocated to States and 
     units of general local government with the greatest need, as 
     such need is determined in the discretion of the Secretary 
     based on--
       (A) the number and percentage of home foreclosures in each 
     State or unit of general local government;
       (B) the number and percentage of homes financed by a 
     subprime mortgage related loan in each State or unit of 
     general local government; and
       (C) the number and percentage of homes in default or 
     delinquency in each State or unit of general local 
     government.
       (4) Distribution.--Amounts appropriated or otherwise made 
     available under this section shall be distributed according 
     to the funding formula established by the Secretary under 
     paragraph (1) not later than 30 days after the establishment 
     of such formula.
       (c) Use of Funds.--
       (1) In general.--Any State or unit of general local 
     government that receives amounts pursuant to this section 
     shall, not later than 18 months after the receipt of such 
     amounts, use such amounts to purchase and redevelop abandoned 
     and foreclosed homes and residential properties.
       (2) Priority.--Any State or unit of general local 
     government that receives amounts pursuant to this section 
     shall in distributing such amounts give priority emphasis and 
     consideration to those metropolitan areas, metropolitan 
     cities, urban areas, rural areas, low- and moderate-income 
     areas, and other areas with the greatest need, including 
     those--
       (A) with the greatest percentage of home foreclosures;
       (B) with the highest percentage of homes financed by a 
     subprime mortgage related loan; and
       (C) identified by the State or unit of general local 
     government as likely to face a significant rise in the rate 
     of home foreclosures.
       (3) Eligible uses.--Amounts made available under this 
     section may be used to--
       (A) establish financing mechanisms for purchase and 
     redevelopment of foreclosed upon homes and residential 
     properties, including such mechanisms as soft-seconds, loan 
     loss reserves, and shared-equity loans for low- and moderate-
     income homebuyers;
       (B) purchase and rehabilitate homes and residential 
     properties that have been abandoned or foreclosed upon, in 
     order to sell, rent, or redevelop such homes and properties;
       (C) establish land banks for homes that have been 
     foreclosed upon; and
       (D) demolish blighted structures.
       (d) Limitations.--
       (1) On purchases.--Any purchase of a foreclosed upon home 
     or residential property under this section shall be at a 
     discount from the current market appraised value of the home 
     or property, taking into account its current condition, and 
     such discount shall ensure that purchasers are paying below-
     market value for the home or property.
       (2) Sale of homes.--If an abandoned or foreclosed upon home 
     or residential property is purchased, redeveloped, or 
     otherwise sold to an individual as a primary residence, then 
     such sale shall be in an amount equal to or less than the 
     cost to acquire and redevelop or rehabilitate such home or 
     property up to a decent, safe, and habitable condition.
       (3) Reinvestment of profits.--
       (A) Revenues generated from sales.--Any revenue generated 
     from the sale, rental, redevelopment, rehabilitation, or any 
     other eligible use that is in excess of the cost to acquire 
     and redevelop (including reasonable development fees) or 
     rehabilitate an abandoned or foreclosed upon home or 
     residential property shall be provided to and used by the 
     State or unit of general local government in accordance with, 
     and in furtherance of, the intent and provisions of this 
     section.
       (B) Other revenues.--Any revenue generated under 
     subparagraphs (A), (C) or (D) of subsection (c)(3) shall be 
     provided to and used by the State or unit of general local 
     government in accordance with, and in furtherance of, the 
     intent and provisions of this section.
       (e) Rules of Construction.--
       (1) In general.--Except as otherwise provided by this 
     section, amounts appropriated, revenues generated, or amounts 
     otherwise made available to States and units of general local 
     government under this section shall be treated as though such 
     funds were community development block grant funds under 
     title I of the Housing and Community Development Act of 1974 
     (42 U.S.C. 5301 et seq.).
       (2) No match.--No matching funds shall be required in order 
     for a State or unit of general local government to receive 
     any amounts under this section.
       (f) Authority to Specify Alternative Requirements.--
       (1) In general.--In administering any amounts appropriated 
     or otherwise made available under this section, the Secretary 
     may specify alternative requirements to any provision under 
     title I of the Housing and Community Development Act of 1974 
     (except for those related to fair housing, nondiscrimination, 
     labor standards, and the environment) in accordance with the 
     terms of this section and for the sole purpose of expediting 
     the use of such funds.
       (2) Notice.--The Secretary shall provide written notice of 
     its intent to exercise the authority to specify alternative 
     requirements under paragraph (1) to the Committee on Banking, 
     Housing and Urban Affairs of the Senate and the Committee on 
     Financial Services of the House of Representatives not later 
     than 10 business days before such exercise of authority is to 
     occur.
       (3) Low and moderate income requirement.--
       (A) In general.--Notwithstanding the authority of the 
     Secretary under paragraph (1)--
       (i) all of the funds appropriated or otherwise made 
     available under this section shall be used with respect to 
     individuals and families whose income does not exceed 120 
     percent of area median income; and
       (ii) not less than 25 percent of the funds appropriated or 
     otherwise made available under this section shall be used for 
     the purchase and redevelopment of abandoned or foreclosed 
     upon homes or residential properties that will be used to 
     house individuals or families whose incomes do not exceed 50 
     percent of area median income.
       (B) Recurrent requirement.--The Secretary shall, by rule or 
     order, ensure, to the maximum extent practicable and for the 
     longest feasible term, that the sale, rental, or 
     redevelopment of abandoned and foreclosed upon homes and 
     residential properties under this section remain affordable 
     to individuals or families described in subparagraph (A).
       (g) Periodic Audits.--In consultation with the Secretary of 
     Housing and Urban Development, the Comptroller General of the 
     United States shall conduct periodic audits to ensure that 
     funds appropriated, made available, or otherwise distributed 
     under this section are being used in a manner consistent with 
     the criteria provided in this section.

[[Page 5052]]



                 TITLE IV--HOUSING COUNSELING RESOURCES

     SEC. 401. HOUSING COUNSELING RESOURCES.

       There are appropriated out of any money in the Treasury not 
     otherwise appropriated for the fiscal year 2008, for an 
     additional amount for the ``Neighborhood Reinvestment 
     Corporation--Payment to the Neighborhood Reinvestment 
     Corporation'' $100,000,000, to remain available until 
     September 30, 2008, for foreclosure mitigation activities 
     under the terms and conditions contained in the second 
     undesignated paragraph (beginning with the phrase ``For an 
     additional amount'') under the heading ``Neighborhood 
     Reinvestment Corporation--Payment to the Neighborhood 
     Reinvestment Corporation'' of Public Law 110-161.

              TITLE V--MORTGAGE DISCLOSURE IMPROVEMENT ACT

     SEC. 501. SHORT TITLE.

       This title may be cited as the ``Mortgage Disclosure 
     Improvement Act of 2008''.

     SEC. 502. ENHANCED MORTGAGE LOAN DISCLOSURES.

       (a) Truth in Lending Act Disclosures.--Section 128(b)(2) of 
     the Truth in Lending Act (15 U.S.C. 1638(b)(2)) is amended--
       (1) by inserting ``(A)'' before ``In the'';
       (2) by striking ``a residential mortgage transaction, as 
     defined in section 103(w)'' and inserting ``any extension of 
     credit that is secured by the dwelling of a consumer'';
       (3) by striking ``shall be made in accordance'' and all 
     that follows through ``extended, or''; and
       (4) by striking ``If the'' and all that follows through the 
     end of the paragraph and inserting the following:
       ``(B) In the case of an extension of credit that is secured 
     by the dwelling of a consumer, in addition to the other 
     disclosures required by subsection (a), the disclosures 
     provided under this paragraph shall--
       ``(i) state in conspicuous type size and format, the 
     following: `You are not required to complete this agreement 
     merely because you have received these disclosures or signed 
     a loan application.'; and
       ``(ii) be furnished to the borrower not later than 7 
     business days before the date of consummation of the 
     transaction, and at the time of consummation of the 
     transaction, subject to subparagraph (D).
       ``(C) In the case of an extension of credit that is secured 
     by the dwelling of a consumer, under which the annual rate of 
     interest is variable, or with respect to which the regular 
     payments may otherwise be variable, in addition to the other 
     disclosures required by subsection (a), the disclosures 
     provided under this paragraph shall do the following:
       ``(i) Label the payment schedule as follows: `Payment 
     Schedule: Payments Will Vary Based on Interest Rate Changes'.
       ``(ii) State in conspicuous type size and format examples 
     of adjustments to the regular required payment on the 
     extension of credit based on the change in the interest rates 
     specified by the contract for such extension of credit. Among 
     the examples required to be provided under this clause is an 
     example that reflects the maximum payment amount of the 
     regular required payments on the extension of credit, based 
     on the maximum interest rate allowed under the contract, in 
     accordance with the rules of the Board. Prior to issuing any 
     rules pursuant to this clause, the Board shall conduct 
     consumer testing to determine the appropriate format for 
     providing the disclosures required under this subparagraph to 
     consumers so that such disclosures can be easily understood.
       ``(D) In any case in which the disclosure statement 
     provided 7 business days before the date of consummation of 
     the transaction contains an annual percentage rate of 
     interest that is no longer accurate, as determined under 
     section 107(c), the creditor shall furnish an additional, 
     corrected statement to the borrower, not later than 3 
     business days before the date of consummation of the 
     transaction. A consumer may modify or waive receipt of the 
     additional, corrected statement 3 business days before the 
     date of consummation of the transaction in order to meet a 
     bona fide personal financial emergency, only if the consumer 
     provides the creditor a dated, written statement that--
       ``(i) describes the emergency;
       ``(ii) specifically modifies or waives the right; and
       ``(iii) bears the signature of all the consumers entitled 
     to receive the disclosure.
       ``(E) The consumer shall receive the disclosures required 
     under this subsection before paying any fee to the creditor 
     or other person in connection with the consumer's application 
     for a residential mortgage transaction. If the disclosures 
     are mailed to the consumer, the consumer is considered to 
     have received them 3 business days after they are mailed. A 
     creditor or other person may impose a fee for obtaining the 
     consumer's credit report before the consumer has received the 
     disclosures under this subsection, provided the fee is bona 
     fide and reasonable in amount.''.
       (b) Civil Liability.--Section 130(a) of the Truth in 
     Lending Act (15 U.S.C. 1640(a)) is amended--
       (1) in paragraph (2)(A)(iii), by striking ``not less than 
     $200 or greater than $2,000'' and inserting ``not less than 
     $400 or greater than $4,000''; and
       (2) in the penultimate sentence of the undesignated matter 
     following paragraph (4)--
       (A) by inserting ``or section 128(b)(2)(C)(ii),''after 
     ``128(a),''; and
       (B) by inserting ``or section 128(b)(2)(C)(ii)'' before the 
     period.

                    TITLE VI--TAX-RELATED PROVISIONS

     SEC. 601. ELECTION FOR 4-YEAR CARRYBACK OF CERTAIN NET 
                   OPERATING LOSSES AND TEMPORARY SUSPENSION OF 90 
                   PERCENT AMT LIMIT.

       (a) In General.--
       (1) 4-year carryback of certain losses.--Subparagraph (H) 
     of section 172(b)(1) of the Internal Revenue Code of 1986 
     (relating to years to which loss may be carried) is amended 
     to read as follows:
       ``(H) Additional carryback of certain losses.--
       ``(i) Taxable years ending during 2001 and 2002.--In the 
     case of a net operating loss for any taxable year ending 
     during 2001 or 2002, subparagraph (A)(i) shall be applied by 
     substituting `5' for `2' and subparagraph (F) shall not 
     apply.
       ``(ii) Taxable years ending during 2008 and 2009.--In the 
     case of a net operating loss with respect to any eligible 
     taxpayer (within the meaning of section 168(k)(4)) for any 
     taxable year ending during 2008 or 2009--

       ``(I) subparagraph (A)(i) shall be applied by substituting 
     `4' for `2',
       ``(II) subparagraph (E)(ii) shall be applied by 
     substituting `3' for `2', and
       ``(III) subparagraph (F) shall not apply.''.

       (2) Temporary suspension of 90 percent limit on certain nol 
     carrybacks and carryovers.--
       (A) In general.--Section 56(d) of the Internal Revenue Code 
     of 1986 (relating to definition of alternative tax net 
     operating loss deduction) is amended by adding at the end the 
     following new paragraph:
       ``(3) Additional adjustments.--For purposes of paragraph 
     (1)(A), in the case of an eligible taxpayer (within the 
     meaning of section 168(k)(4)), the amount described in 
     subclause (I) of paragraph (1)(A)(ii) shall be increased by 
     the amount of the net operating loss deduction allowable for 
     the taxable year under section 172 attributable to the sum 
     of--
       ``(A) carrybacks of net operating losses from taxable years 
     ending during 2008 and 2009, and
       ``(B) carryovers of net operating losses to taxable years 
     ending during 2008 or 2009.''.
       (B) Conforming amendment.--Subclause (I) of section 
     56(d)(1)(A)(i) of such Code is amended by inserting ``amount 
     of such'' before ``deduction described in clause (ii)(I)''.
       (3) Effective dates.--
       (A) Net operating losses.--The amendments made by paragraph 
     (1) shall apply to net operating losses arising in taxable 
     years ending in 2008 or 2009.
       (B) Suspension of amt limitation.--The amendments made by 
     paragraph (2) shall apply to taxable years ending after 
     December 31, 1997.
       (4) Anti-abuse rules.--The Secretary of Treasury or the 
     Secretary's designee shall prescribe such rules as are 
     necessary to prevent the abuse of the purposes of the 
     amendments made by this subsection, including anti-stuffing 
     rules, anti-churning rules (including rules relating to sale-
     leasebacks), and rules similar to the rules under section 
     1091 of the Internal Revenue Code of 1986 relating to losses 
     from wash sales.
       (b) Election Among Stimulus Incentives.--
       (1) In general.--
       (A) Bonus depreciation.--Section 168(k) of the Internal 
     Revenue Code of 1986 (relating to special allowance for 
     certain property acquired after December 31, 2007, and before 
     January 1, 2009), as amended by the Economic Stimulus Act of 
     2008, is amended--
       (i) in paragraph (1), by inserting ``placed in service by 
     an eligible taxpayer'' after ``any qualified property'', and
       (ii) by adding at the end the following new paragraph:
       ``(4) Eligible taxpayer.--
       ``(A) In general.--At such time and in such manner as the 
     Secretary shall prescribe, each taxpayer may elect to be an 
     eligible taxpayer with respect to 1 (and only 1) of the 
     following:
       ``(i) This subsection and section 179(b)(7).
       ``(ii) The application of section 56(d)(1)(A)(ii)(I) and 
     section 172(b)(1)(H)(ii) in connection with net operating 
     losses relating to taxable years ending during 2008 and 2009.
       ``(B) Eligible taxpayer.--For purposes of each of the 
     provisions described in subparagraph (A), a taxpayer shall 
     only be treated as an eligible taxpayer with respect to the 
     provision with respect to which the taxpayer made the 
     election under subparagraph (A).
       ``(C) Election irrevocable.--An election under subparagraph 
     (A) may not be revoked except with the consent of the 
     Secretary.''.
       (B) Effective date.--The amendments made by this paragraph 
     shall take effect as if included in section 103 of the 
     Economic Stimulus Act of 2008.
       (2) Election for increased expensing.--
       (A) In general.--Paragraph (7) of section 179(b) of the 
     Internal Revenue Code of 1986 (relating to limitations), as 
     added by the Economic Stimulus Act of 2008, is amended to 
     read as follows:
       ``(7) Special rule for eligible taxpayers in 2008.--In the 
     case of any taxable year of any eligible taxpayer (within the 
     meaning of section 168(k)(4)) beginning in 2008--

[[Page 5053]]

       ``(A) the dollar limitation under paragraph (1) shall be 
     $250,000,
       ``(B) the dollar limitation under paragraph (2) shall be 
     $800,000, and
       ``(C) the amounts described in subparagraphs (A) and (B) 
     shall not be adjusted under paragraph (5).''.
       (B) Effective date.--The amendment made by this paragraph 
     shall take effect as if included in section 102 of the 
     Economic Stimulus Act of 2008.

     SEC. 602. MODIFICATIONS ON USE OF QUALIFIED MORTGAGE BONDS; 
                   TEMPORARY INCREASED VOLUME CAP FOR CERTAIN 
                   HOUSING BONDS.

       (a) Use of Qualified Mortgage Bonds Proceeds for Subprime 
     Refinancing Loans.--Section 143(k) of the Internal Revenue 
     Code of 1986 (relating to other definitions and special 
     rules) is amended by adding at the end the following new 
     paragraph:
       ``(12) Special rules for subprime refinancings.--
       ``(A) In general.--Notwithstanding the requirements of 
     subsection (i)(1), the proceeds of a qualified mortgage issue 
     may be used to refinance a mortgage on a residence which was 
     originally financed by the mortgagor through a qualified 
     subprime loan.
       ``(B) Special rules.--In applying this paragraph to any 
     case in which the proceeds of a qualified mortgage issue are 
     used for any refinancing described in subparagraph (A)--
       ``(i) subsection (a)(2)(D)(i) (relating to proceeds must be 
     used within 42 months of date of issuance) shall be applied 
     by substituting `12-month period' for `42-month period' each 
     place it appears,
       ``(ii) subsection (d) (relating to 3-year requirement) 
     shall not apply, and
       ``(iii) subsection (e) (relating to purchase price 
     requirement) shall be applied by using the market value of 
     the residence at the time of refinancing in lieu of the 
     acquisition cost.
       ``(C) Qualified subprime loan.--The term `qualified 
     subprime loan' means an adjustable rate single-family 
     residential mortgage loan originated after December 31, 2001, 
     and before January 1, 2008, that the bond issuer determines 
     would be reasonably likely to cause financial hardship to the 
     borrower if not refinanced.
       ``(D) Termination.--This paragraph shall not apply to any 
     bonds issued after December 31, 2010.''.
       (b) Increased Volume Cap for Certain Bonds.--
       (1) In general.--Subsection (d) of section 146 of the 
     Internal Revenue Code of 1986 (relating to State ceiling) is 
     amended by adding at the end the following new paragraph:
       ``(5) Increase and set aside for housing bonds for 2008.--
       ``(A) Increase for 2008.--In the case of calendar year 
     2008, the State ceiling for each State shall be increased by 
     an amount equal to $10,000,000,000 multiplied by a fraction--
       ``(i) the numerator of which is the population of such 
     State, and
       ``(ii) the denominator of which is the total population of 
     all States.
       ``(B) Set aside.--
       ``(i) In general.--Any amount of the State ceiling for any 
     State which is attributable to an increase under this 
     paragraph shall be allocated solely for one or more qualified 
     purposes.
       ``(ii) Qualified purpose.--For purposes of this paragraph, 
     the term `qualified purpose' means--

       ``(I) the issuance of exempt facility bonds used solely to 
     provide qualified residential rental projects, or
       ``(II) a qualified mortgage issue (determined by 
     substituting `12-month period' for `42-month period' each 
     place it appears in section 143(a)(2)(D)(i)).''.

       (2) Carryforward of unused limitations.--Subsection (f) of 
     section 146 of such Code (relating to elective carryforward 
     of unused limitation for specified purpose) is amended by 
     adding at the end the following new paragraph:
       ``(6) Special rules for increased volume cap under 
     subsection (d)(5).--
       ``(A) In general.--No amount which is attributable to the 
     increase under subsection (d)(5) may be used--
       ``(i) for a carryforward purpose other than a qualified 
     purpose (as defined in subsection (d)(5)), and
       ``(ii) to issue any bond after calendar year 2010.
       ``(B) Ordering rules.--For purposes of subparagraph (A), 
     any carryforward of an issuing authority's volume cap for 
     calendar year 2008 shall be treated as attributable to such 
     increase to the extent of such increase.''.
       (c) Alternative Minimum Tax Exemption for Qualified 
     Mortgage Bonds, Qualified Veterans' Mortgage Bonds, and Bonds 
     for Qualified Residential Rental Projects.--
       (1) In general.--Clause (ii) of section 57(a)(5)(C) of the 
     Internal Revenue Code of 1986 (relating to specified private 
     activity bonds) is amended by striking ``shall not include'' 
     and all that follows and inserting ``shall not include--

       ``(I) any qualified 501(c)(3) bond (as defined in section 
     145), or
       ``(II) any qualified mortgage bond (as defined in section 
     143(a)), any qualified veterans' mortgage bond (as defined in 
     section 143(b)), or any exempt facility bond (as defined in 
     section 142(a)) issued as part of an issue 95 percent or more 
     of the net proceeds of which are to be used to provide 
     qualified residential rental projects (as defined in section 
     142(d)), but only if such bond is issued after the date of 
     the enactment of this subclause and before January 1, 2011.

     Subclause (II) shall not apply to a refunding bond unless 
     such subclause applied to the refunded bond (or in the case 
     of a series of refundings, the original bond).''.
       (2) Conforming amendment.--The heading for section 
     57(a)(5)(C)(ii) of such Code is amended by striking 
     ``qualified 501(c)(3) bonds'' and inserting ``certain 
     bonds''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after the date of the enactment 
     of this Act.

     SEC. 603. CREDIT FOR CERTAIN HOME PURCHASES.

       (a) Allowance of Credit.--Subpart A of part IV of 
     subchapter A of chapter 1 of the Internal Revenue Code of 
     1986 (relating to nonrefundable personal credits) is amended 
     by inserting after section 25D the following new section:

     ``SEC. 25E. CREDIT FOR CERTAIN HOME PURCHASES.

       ``(a) Allowance of Credit.--
       ``(1) In general.--In the case of an individual who is a 
     purchaser of a qualified principal residence during the 
     taxable year, there shall be allowed as a credit against the 
     tax imposed by this chapter an amount equal to so much of the 
     purchase price of the residence as does not exceed $7,000.
       ``(2) Allocation of credit amount.--The amount of the 
     credit allowed under paragraph (1) shall be equally divided 
     among the 2 taxable years beginning with the taxable year in 
     which the purchase of the qualified principal residence is 
     made.
       ``(b) Limitations.--
       ``(1) Date of purchase.--The credit allowed under 
     subsection (a) shall be allowed only with respect to 
     purchases made--
       ``(A) after the date of the enactment of this section, and
       ``(B) before the date that is 12 months after such date.
       ``(2) Limitation based on amount of tax.--In the case of a 
     taxable year to which section 26(a)(2) does not apply, the 
     credit allowed under subsection (a) for any taxable year 
     shall not exceed the excess of--
       ``(A) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(B) the sum of the credits allowable under this subpart 
     (other than this section and section 23) for the taxable 
     year.
       ``(3) One-time only.--
       ``(A) In general.--If a credit is allowed under this 
     section in the case of any individual (and such individual's 
     spouse, if married) with respect to the purchase of any 
     qualified principal residence, no credit shall be allowed 
     under this section in any taxable year with respect to the 
     purchase of any other qualified principal residence by such 
     individual or a spouse of such individual.
       ``(B) Joint purchase.--In the case of a purchase of a 
     qualified principal residence by 2 or more unmarried 
     individuals or by 2 married individuals filing separately, no 
     credit shall be allowed under this section if a credit under 
     this section has been allowed to any of such individuals in 
     any taxable year with respect to the purchase of any other 
     qualified principal residence.
       ``(c) Qualified Principal Residence.--For purposes of this 
     section--
       ``(1) In general.--The term `qualified principal residence' 
     means an eligible single-family residence that is purchased 
     to be the principal residence of the purchaser.
       ``(2) Eligible single-family residence.--
       ``(A) In general.--The term `eligible single-family 
     residence' means a single-family structure that is a 
     residence--
       ``(i) upon which foreclosure has been filed pursuant to the 
     laws of the State in which the residence is located, and
       ``(ii) which--

       ``(I) is a new previously unoccupied residence for which a 
     building permit was issued and construction began on or 
     before September 1, 2007, or
       ``(II) was occupied as a principal residence by the 
     mortgagor for at least 1 year prior to the foreclosure 
     filing.

       ``(B) Certification.--In the case of an eligible single-
     family residence described in subparagraph (A)(ii)(I), no 
     credit shall be allowed under this section unless the 
     purchaser submits a certification by the seller of such 
     residence that such residence meets the requirements of such 
     subparagraph.
       ``(3) Principal residence.--The term `principal residence' 
     has the same meaning as when used in section 121.
       ``(d) Denial of Double Benefit.--No credit shall be allowed 
     under this section for any purchase for which a credit is 
     allowed under section 1400C.
       ``(e) Recapture in the Case of Certain Dispositions.--In 
     the event that a taxpayer--
       ``(1) disposes of the qualified principal residence with 
     respect to which a credit is allowed under subsection (a), or
       ``(2) fails to occupy such residence as the taxpayer's 
     principal residence,

     at any time within 24 months after the date on which the 
     taxpayer purchased such residence, then the remaining portion 
     of the

[[Page 5054]]

     credit allowed under subsection (a) shall be disallowed in 
     the taxable year during which such disposition occurred or in 
     which the taxpayer failed to occupy the residence as a 
     principal residence, and in any subsequent taxable year in 
     which the remaining portion of the credit would, but for this 
     subsection, have been allowed.
       ``(f) Special Rules.--
       ``(1) Joint purchase.--
       ``(A) Married individuals filing separately.--In the case 
     of 2 married individuals filing separately, subsection (a) 
     shall be applied to each such individual by substituting 
     `$3,500' for `$7,000' in paragraph (1) thereof.
       ``(B) Unmarried individuals.--If 2 or more individuals who 
     are not married purchase a qualified principal residence, the 
     amount of the credit allowed under subsection (a) shall be 
     allocated among such individuals in such manner as the 
     Secretary may prescribe, except that the total amount of the 
     credits allowed to all such individuals shall not exceed 
     $7,000.
       ``(2) Purchase; purchase price.--Rules similar to the rules 
     of paragraphs (2) and (3) of section 1400C(e) (as in effect 
     on the date of the enactment of this section) shall apply for 
     purposes of this section.
       ``(3) Reporting requirement.--Rules similar to the rules of 
     section 1400C(f) (as so in effect) shall apply for purposes 
     of this section.
       ``(g) Basis Adjustment.--For purposes of this subtitle, if 
     a credit is allowed under this section with respect to the 
     purchase of any residence, the basis of such residence shall 
     be reduced by the amount of the credit so allowed.''.
       (b) Conforming Amendments.--
       (1) Section 24(b)(3)(B) of the Internal Revenue Code of 
     1986 is amended by striking ``and 25B'' and inserting ``, 
     25B, and 25E''.
       (2) Section 25(e)(1)(C)(ii) of such Code is amended by 
     inserting ``25E,'' after ``25D,''.
       (3) Section 25B(g)(2) of such Code is amended by striking 
     ``section 23'' and inserting ``sections 23 and 25E''.
       (4) Section 25D(c)(2) of such Code is amended by striking 
     ``and 25B'' and inserting ``25B, and 25E''.
       (5) Section 26(a)(1) of such Code is amended by striking 
     ``and 25B'' and inserting ``25B, and 25E''.
       (6) Section 904(i) of such Code is amended by striking 
     ``and 25B'' and inserting ``25B, and 25E''.
       (7) Subsection (a) of section 1016 of such Code is amended 
     by striking ``and'' at the end of paragraph (36), by striking 
     the period at the end of paragraph (37) and inserting ``, 
     and'', and by adding at the end the following new paragraph:
       ``(38) to the extent provided in section 25E(g).''.
       (8) Section 1400C(d)(2) of such Code is amended by striking 
     ``and 25D'' and inserting ``25D, and 25E''.
       (c) Clerical Amendment.--The table of sections for subpart 
     A of part IV of subchapter A of chapter 1 of the Internal 
     Revenue Code of 1986 is amended by inserting after the item 
     relating to section 25D the following new item:

``Sec. 25E. Credit for certain home purchases.''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to purchases in taxable years ending after the 
     date of the enactment of this Act.
       (e) Application of EGTRRA Sunset.--The amendment made by 
     subsection (b)(1) shall be subject to title IX of the 
     Economic Growth and Tax Relief Reconciliation Act of 2001 in 
     the same manner as the provisions of such Act to which such 
     amendment relates.

     SEC. 604. ADDITIONAL STANDARD DEDUCTION FOR REAL PROPERTY 
                   TAXES FOR NONITEMIZERS.

       (a) In General.--Section 63(c)(1) of the Internal Revenue 
     Code of 1986 (defining standard deduction) is amended by 
     striking ``and'' at the end of subparagraph (A), by striking 
     the period at the end of subparagraph (B) and inserting ``, 
     and'', and by adding at the end the following new 
     subparagraph:
       ``(C) in the case of any taxable year beginning in 2008, 
     the real property tax deduction.''.
       (b) Definition.--Section 63(c) of the Internal Revenue Code 
     of 1986 is amended by adding at the end the following new 
     paragraph:
       ``(8) Real property tax deduction.--
       ``(A) In general.--For purposes of paragraph (1), the real 
     property tax deduction is so much of the amount of the 
     eligible State and local real property taxes paid or accrued 
     by the taxpayer during the taxable year which do not exceed 
     $500 ($1,000 in the case of a joint return).
       ``(B) Eligible state and local real property taxes.--For 
     purposes of subparagraph (A), the term `eligible State and 
     local real property taxes' means State and local real 
     property taxes (within the meaning of section 164), but only 
     if the rate of tax for all residential real property taxes in 
     the jurisdiction has not been increased at any time after 
     April 2, 2008, and before January 1, 2009.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

                    TITLE VII--EMERGENCY DESIGNATION

     SEC. 701. EMERGENCY DESIGNATION.

       For purposes of Senate enforcement, all provisions of this 
     Act are designated as emergency requirements and necessary to 
     meet emergency needs pursuant to section 204 of S. Con. Res. 
     21 (110th Congress), the concurrent resolution on the budget 
     for fiscal year 2008.
                                 ______
                                 
  SA 4388. Mr. DURBIN (for himself, Mr. Reid, Mr. Obama, Mrs. Clinton, 
Mr. Whitehouse, Mr. Schumer, Mrs. Feinstein, Mr. Menendez, Mrs. Boxer, 
Mr. Brown, Mr. Kennedy, Mr. Harkin, Mr. Kerry, Mr. Reed, and Mr. Biden) 
submitted an amendment intended to be proposed to amendment SA 4387 
submitted by Mr. Dodd (for himself and Mr. Shelby) to the bill H.R. 
3221, moving the United States toward greater energy independence and 
security, developing innovative new technologies, reducing carbon 
emissions, creating green jobs, protecting consumers, increasing clean 
renewable energy production, and modernizing our energy infrastructure, 
and to amend the Internal Revenue Code of 1986 to provide tax 
incentives for the production of renewable energy and energy 
conservation; which was ordered to lie on the table; as follows:

       At the end, add the following:

                          TITLE __--BANKRUPTCY

     SEC. __1. SHORT TITLE.

       This title may be cited as the ``Helping Families Save 
     Their Homes in Bankruptcy Act of 2008''.

                  Subtitle A--Minimizing Foreclosures

     SEC. __21. DEFINITIONS.

       Section 101 of title 11, United States Code, is amended--
       (1) by redesignating paragraphs (40A) and (40B) as 
     paragraphs (40B) and (40C), respectively;
       (2) by inserting after paragraph (40) the following:
       ``(40A) The term `nontraditional mortgage' means a security 
     interest in the debtor's principal residence that secures a 
     debt for a loan that at any period during the term of the 
     loan provides for the deferral of payment of principal or 
     interest through permitting periodic payments that do not 
     cover the full amount of interest due or that cover only the 
     interest due, except that such term excludes--
       ``(A) a loan that at any period during the term of the loan 
     provides for the deferral of payment of principal through 
     permitting periodic payments that cover only the interest 
     due, if the creditor demonstrates that it determined in good 
     faith at the time the loan was consummated, after undergoing 
     a full underwriting process based on verified and documented 
     information, that the debtor had a reasonable ability to 
     repay at the full interest and principal payment amount 
     (assuming an initial 30 year full amortization), and payments 
     under the loan resulted in a debt-to-income ratio of the 
     debtor in an amount equal to or less than that which would 
     have been permitted under guidelines and directives 
     established by the Secretary of Housing and Urban Development 
     pursuant to section 203.33 of title 24, Code of Federal 
     Regulations, for loans subject to such section;
       ``(B) a home equity line of credit that is in a subordinate 
     lien position; and
       ``(C) a reverse mortgage.'';
       (3) by redesignating paragraphs (53B) through (53D) as 
     paragraphs (53C), (53D), (53E), and (53F), respectively; and
       (4) by inserting after paragraph (53A) the following:
       ``(53B) The term `subprime mortgage' means a security 
     interest in the debtor's principal residence that secures a 
     debt for a loan that has an annual percentage rate that is 
     greater than--
       ``(A) the sum of 3 percent plus the yield on United States 
     Treasury securities having comparable periods of maturity, if 
     the loan is secured by a first mortgage or first deed of 
     trust; or
       ``(B) the sum of 5 percent plus the yield on United States 
     Treasury securities having comparable periods of maturity, if 
     the loan is secured by a subordinate mortgage or subordinate 
     deed of trust.

     Without regard to whether such loan is subject to or 
     reportable under the Home Mortgage Disclosure Act, the 
     difference between the annual percentage rate of such loan 
     and the yield on United States Treasury securities having 
     comparable periods of maturity shall be determined using the 
     procedures and calculation methods applicable to loans that 
     are subject to the reporting requirements of such Act, except 
     that such yield shall be determined as of the 15th day of the 
     month preceding the month in which a completed application is 
     submitted for such loan. If such loan provides for a fixed 
     interest rate for an introductory period and then resets or 
     adjusts to a variable interest rate, the determination of the 
     annual percentage rate shall be based on the greater of the 
     introductory rate and the fully indexed rate. For purposes of 
     this paragraph, the term `fully indexed rate' means the 
     prevailing index rate on a residential mortgage loan at the 
     time at which the loan is made, plus the margin that will 
     apply after the expiration of an introductory interest 
     rate.''.

[[Page 5055]]



     SEC. __22. SPECIAL RULES FOR MODIFICATION OF LOANS SECURED BY 
                   RESIDENCES.

       (a) In General.--Section 1322(b) of title 11, United States 
     Code, is amended--
       (1) in paragraph (10), by striking ``and'' at the end;
       (2) by redesignating paragraph (11) as paragraph (12); and
       (3) by inserting after paragraph (10) the following:
       ``(11) notwithstanding paragraph (2) and otherwise 
     applicable nonbankruptcy law--
       ``(A) modify an allowed secured claim for a debt incurred 
     prior to the effective date of this paragraph secured by a 
     nontraditional mortgage, or a subprime mortgage, and any lien 
     subordinate to such claim, on the debtor's principal 
     residence, as described in subparagraph (B), if, after 
     deduction from the debtor's current monthly income of the 
     expenses permitted for debtors described in section 
     1325(b)(3) of this title (other than amounts contractually 
     due to creditors holding such allowed secured claims and 
     additional payments necessary to maintain possession of that 
     residence), the debtor has insufficient remaining income to 
     retain possession of the residence by curing a default and 
     maintaining payments while the case is pending, as provided 
     under paragraph (5);
       ``(B) provide for payment of such claim--
       ``(i) in an amount equal to the amount of the allowed 
     secured claim;
       ``(ii) for a period that is the longer of 30 years (reduced 
     by the period for which the loan has been outstanding) or the 
     remaining term of such loan, beginning on the date of the 
     order for relief under this chapter; and
       ``(iii) at a rate of interest accruing after such date 
     calculated at a fixed annual percentage rate, in an amount 
     equal to the most recently published annual yield on 
     conventional mortgages published by the Board of Governors of 
     the Federal Reserve System, as of the applicable time set 
     forth in the rules of the Board, plus a reasonable premium 
     for risk; and
       ``(C) if a claim has been modified to an amount below the 
     original principal of the loan pursuant to subparagraph 
     (B)(i) and the debtor's principal residence is sold during 
     the term of the plan, the holder of the claim shall be 
     entitled to receive, in addition to the unpaid portion of the 
     allowed secured claim, the net proceeds of the sale, or the 
     amount of the holder's allowed unsecured claim, whichever is 
     less; and''.
       (b) Conforming Amendment.--Section 1325(a)(5) of title 11, 
     United States Code, is amended by inserting before ``with 
     respect'' the following: ``except as otherwise provided in 
     section 1322(b)(11) of this title,''.

     SEC. __23. WAIVER OF COUNSELING REQUIREMENT WHEN HOMES ARE IN 
                   FORECLOSURE.

       Section 109(h) of title 11, United States Code, is amended 
     by adding at the end the following:
       ``(5) Paragraph (1) shall not apply with respect to a 
     debtor who files with the court a certification that a 
     foreclosure sale of the debtor's principal residence has been 
     scheduled.''.

             Subtitle B--Providing Other Debtor Protections

     SEC. __41. COMBATING EXCESSIVE FEES.

       Section 1322(c) of title 11, the United States Code, is 
     amended--
       (1) in paragraph (1), by striking ``and'' at the end;
       (2) in paragraph (2), by striking the period at the end and 
     inserting a semicolon; and
       (3) by adding at the end the following:
       ``(3) the plan need not provide for the payment of, and the 
     debtor, the debtor's property, and property of the estate 
     shall not be liable for, any fee, cost, or charge, 
     notwithstanding section 506(b), that arises in connection 
     with a claim secured by the debtor's principal residence if 
     the event that gives rise to such fee, cost, or charge occurs 
     while the case is pending but before the discharge order, 
     except to the extent that--
       ``(A) notice of such fees, costs or charges is filed with 
     the court, and served on the debtor and the trustee, before 
     the expiration of the earlier of--
       ``(i) 1 year after the event that gives rise to such fee, 
     cost, or charge occurs; or
       ``(ii) 60 days before the closing of the case; and
       ``(B) such fees, costs, or charges are lawful, reasonable, 
     and provided for in the agreement under which such claim or 
     security interest arose;
       ``(4) the failure of a party to give notice described in 
     paragraph (3) shall be deemed a waiver of any claim for fees, 
     costs, or charges described in paragraph (3) for all 
     purposes, and any attempt to collect such fees, costs, or 
     charges shall constitute a violation of section 524(a)(2) of 
     this title or, if the violation occurs before the date of 
     discharge, of section 362(a) of this title; and
       ``(5) a plan may provide for the waiver of any prepayment 
     penalty on a claim secured by the principal residence of the 
     debtor.''.

     SEC. __42. MAINTAINING DEBTORS' LEGAL CLAIMS.

       Section 554(e) of title 11, United States Code, is amended 
     by adding at the end the following:
       ``(e) In any action in State or Federal court with respect 
     to a claim or defense asserted by an individual debtor in 
     such action that was not scheduled under section 521(a)(1) of 
     this title, the trustee shall be allowed a reasonable time to 
     request joinder or substitution as the real party in 
     interest. If the trustee does not request joinder or 
     substitution in such action, the debtor may proceed as the 
     real party in interest, and no such action shall be dismissed 
     on the ground that it is not prosecuted in the name of the 
     real party in interest or on the ground that the debtor's 
     claims were not properly scheduled in a case under this 
     title.''.

     SEC. __43. RESOLVING DISPUTES.

       Section 1334 of title 28, United States Code, is amended by 
     adding at the end the following: ``Notwithstanding any 
     agreement for arbitration that is subject to chapter 1 of 
     title 9, in any core proceeding under section 157(b) of this 
     title involving an individual debtor whose debts are 
     primarily consumer debts, the court may hear and determine 
     the proceeding, and enter appropriate orders and judgments, 
     in lieu of referral to arbitration.''.

     SEC. __44. ENACTING A HOMESTEAD FLOOR FOR DEBTORS OVER 55 
                   YEARS OF AGE.

       (a) In General.--Section 522(b)(3) of title 11, United 
     States Code, is amended--
       (1) in subparagraph (B), by striking ``and'' at the end;
       (2) in subparagraph (C), by striking the period at the end 
     and inserting ``; and''; and
       (3) by adding at the end and inserting the following:
       ``(D) if the debtor, as of the date of the filing of the 
     petition, is 55 years old or older, the debtor's aggregate 
     interest, not to exceed $75,000 in value, in real property or 
     personal property that the debtor or a dependent of the 
     debtor uses as a principal residence, or in a cooperative 
     that owns property that the debtor or a dependent of the 
     debtor uses as a principal residence.''.
       (b) Exemption Authority.--Section 522(d)(1) of title 11, 
     United States Code, is amended by inserting ``or, if the 
     debtor is 55 years of age or older, $75,000 in value,'' 
     before ``in real property''.

     SEC. __45. DISALLOWING CLAIMS FROM VIOLATIONS OF CONSUMER 
                   PROTECTION LAWS.

       Section 502(b) of title 11, United States Code, is 
     amended--
       (1) in paragraph (8), by striking ``or'' at the end;
       (2) in paragraph (9), by striking the period at the end and 
     inserting ``; or''; and
       (3) by adding at the end the following:
       ``(10) the claim is subject to any remedy for damages or 
     rescission due to failure to comply with any applicable 
     requirement under the Truth in Lending Act (15 U.S.C. 1601 et 
     seq.), or any other provision of applicable State or Federal 
     consumer protection law that was in force when the 
     noncompliance took place, notwithstanding the prior entry of 
     a foreclosure judgment.''.
                                 ______
                                 
  SA 4389. Ms. LANDRIEU (for herself, Mr. Cochran, Mr. Vitter, and Mr. 
Wicker) submitted an amendment intended to be proposed by her to the 
bill H.R. 3221, moving the United States toward greater energy 
independence and security, developing innovative new technologies, 
reducing carbon emissions, creating green jobs, protecting consumers, 
increasing clean renewable energy production, and modernizing our 
energy infrastructure, and to amend the Internal Revenue Code of 1986 
to provide tax incentives for the production of renewable energy and 
energy conservation; which was ordered to lie on the table; as follows:

       At the end add the following:

              TITLE __--HURRICANE-RELATED CASUALTY LOSSES

     SEC. _01. USE OF AMENDED INCOME TAX RETURNS TO TAKE INTO 
                   ACCOUNT RECEIPT OF CERTAIN HURRICANE-RELATED 
                   CASUALTY LOSS GRANTS BY DISALLOWING PREVIOUSLY 
                   TAKEN CASUALTY LOSS DEDUCTIONS.

       Notwithstanding any other provision of the Internal Revenue 
     Code of 1986, if a taxpayer claims a deduction for any 
     taxable year with respect to a casualty loss to a personal 
     residence (within the meaning of section 121 of such Code) 
     resulting from Hurricane Katrina or Hurricane Rita and in a 
     subsequent taxable year receives a grant under Public Law 
     109-148, 109-234, or 110-116 as reimbursement for such loss 
     from the State of Louisiana or the State of Mississippi, such 
     taxpayer may elect to file an amended income tax return for 
     the taxable year in which such deduction was allowed and 
     disallow such deduction. If elected, such amended return must 
     be filed not later than the due date for filing the tax 
     return for the taxable year in which the taxpayer receives 
     such reimbursement or the date that is 4 months after the 
     date of the enactment of this Act, whichever is later. Any 
     increase in Federal income tax resulting from such 
     disallowance shall not be subject to any penalty or interest 
     under such Code if such amended return is so filed.

[[Page 5056]]



                       TITLE __--GO ZONE PROPERTY

     SEC. _01. WAIVER OF DEADLINE ON CONSTRUCTION OF GO ZONE 
                   PROPERTY ELIGIBLE FOR BONUS DEPRECIATION.

       (a) In General.--Subparagraph (B) of section 1400N(d)(3) of 
     the Internal Revenue Code of 1986 is amended to read as 
     follows:
       ``(B) without regard to `and before January 1, 2009' in 
     clause (i) thereof,''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after December 31, 
     2007.
                                 ______
                                 
  SA 4390. Mr. HATCH (for himself, Mr. Salazar, and Mr. Kerry) 
submitted an amendment intended to be proposed by him to the bill H.R. 
3221, moving the United States toward greater energy independence and 
security, developing innovative new technologies, reducing carbon 
emissions, creating green jobs, protecting consumers, increasing clean 
renewable energy production, and modernizing our energy infrastructure, 
and to amend the Internal Revenue Code of 1986 to provide tax 
incentives for the production of renewable energy and energy 
conservation; which was ordered to lie on the table; as follows:

       At the end add the following:

      TITLE VIII--REIT INVESTMENT DIVERSIFICATION AND EMPOWERMENT

     SEC. 800. SHORT TITLE; AMENDMENT OF 1986 CODE.

       (a) Short Title.--This title may be cited as the ``REIT 
     Investment Diversification and Empowerment Act of 2008''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this title an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.

      Subtitle A--Foreign Currency and Other Qualified Activities

     SEC. 801. REVISIONS TO REIT INCOME TESTS.

       (a) Addition of Permissible Income Categories.--Section 
     856(c) (relating to limitations) is amended--
       (1) by striking ``and'' at the end of paragraph (2)(G) and 
     by inserting after paragraph (2)(H) the following new 
     subparagraphs:
       ``(I) passive foreign exchange gains; and
       ``(J) any other item of income or gain as determined by the 
     Secretary;'', and
       (2) by striking ``and'' at the end of paragraphs (3)(H) and 
     (3)(I) and by inserting after paragraph (3)(I) the following 
     new subparagraphs:
       ``(J) real estate foreign exchange gains; and
       ``(K) any other item of income or gain as determined by the 
     Secretary; and''.
       (b) Rules Regarding Foreign Currency Transactions.--Section 
     856 (defining real estate investment trust) is amended by 
     adding at the end the following new subsection:
       ``(n) Rules Regarding Foreign Currency Transactions.--With 
     respect to any taxable year--
       ``(1) Real estate foreign exchange gains.--For purposes of 
     subsection (c)(3)(J), the term `real estate foreign exchange 
     gains' means--
       ``(A) foreign currency gains (as defined in section 
     988(b)(1)) which are attributable to--
       ``(i) any item described in subsection (c)(3) (other than 
     in subparagraph (J) thereof),
       ``(ii) the acquisition or ownership of obligations secured 
     by mortgages on real property or on interests in real 
     property (other than foreign currency gains attributable to 
     any item described in clause (i)), or
       ``(iii) becoming or being the obligor under obligations 
     secured by mortgages on real property or on interests in real 
     property (other than foreign currency gains attributable to 
     any item described in clause (i)),
       ``(B) gains described in section 987 attributable to a 
     qualified business unit (as defined by section 989) of the 
     real estate investment trust, but only if such qualified 
     business unit meets the requirements under--
       ``(i) subsection (c)(3) (without regard to subparagraph (J) 
     thereof) for the taxable year, and
       ``(ii) subsection (c)(4)(A) at the close of each quarter 
     that the real estate investment trust has directly or 
     indirectly held the qualified business unit, and
       ``(C) any other foreign currency gains as determined by the 
     Secretary.
       ``(2) Passive foreign exchange gains.--For purposes of 
     subsection (c)(2)(I), the term `passive foreign exchange 
     gains' means--
       ``(A) real estate foreign exchange gains,
       ``(B) foreign currency gains (as defined in section 
     988(b)(1)) which are not described in subparagraph (A) and 
     which are attributable to any item described in subsection 
     (c)(2) (other than in subparagraph (I) thereof), and
       ``(C) any other foreign currency gains as determined by the 
     Secretary.''.
       (c) Addition to REIT Hedging Rule.--Subparagraph (G) of 
     section 856(c)(5) is amended to read as follows:
       ``(G) Treatment of certain hedging instruments.--Except to 
     the extent as determined by the Secretary--
       ``(i) any income of a real estate investment trust from a 
     hedging transaction (as defined in clause (ii) or (iii) of 
     section 1221(b)(2)(A)) which is clearly identified pursuant 
     to section 1221(a)(7), including gain from the sale or 
     disposition of such a transaction, shall not constitute gross 
     income under paragraphs (2) and (3) to the extent that the 
     transaction hedges any indebtedness incurred or to be 
     incurred by the trust to acquire or carry real estate assets, 
     and
       ``(ii) any income of a real estate investment trust from a 
     transaction entered into by the trust primarily to manage 
     risk of currency fluctuations with respect to any item 
     described in paragraph (2) or (3), including gain from the 
     termination of such a transaction, shall not constitute gross 
     income under paragraphs (2) and (3), but only if such 
     transaction is clearly identified as such before the close of 
     the day on which it was acquired, originated, or entered into 
     (or such other time as the Secretary may prescribe).''.
       (d) Authority to Exclude Items of Income From REIT Income 
     Tests.--Section 856(c)(5) is amended by adding at the end the 
     following new subparagraph:
       ``(H) Secretarial authority to exclude other items of 
     income.--The Secretary is authorized to determine whether any 
     item of income or gain which does not otherwise qualify under 
     paragraph (2) or (3) may be considered as not constituting 
     gross income solely for purposes of this part.''.

     SEC. 802. REVISIONS TO REIT ASSET TESTS.

       (a) Clarification of Valuation Test.--The first sentence in 
     the matter following section 856(c)(4)(B)(iii)(III) is 
     amended by inserting ``(including a discrepancy caused solely 
     by the change in the foreign currency exchange rate used to 
     value a foreign asset)'' after ``such requirements''.
       (b) Clarification of Permissible Asset Category.--Section 
     856(c)(5), as amended by this Act, is amended by adding at 
     the end the following new subparagraph:
       ``(I) Cash.--The term `cash' includes foreign currency if 
     the real estate investment trust or its qualified business 
     unit (as defined in section 989) uses such foreign currency 
     as its functional currency (as defined in section 985(b)).''.

     SEC. 803. CONFORMING FOREIGN CURRENCY REVISIONS.

       (a) Net Income From Foreclosure Property.--Clause (i) of 
     section 857(b)(4)(B) is amended to read as follows:
       ``(i) gain (including any foreign currency gain, as defined 
     in section 988(b)(1)) from the sale or other disposition of 
     foreclosure property described in section 1221(a)(1) and the 
     gross income for the taxable year derived from foreclosure 
     property (as defined in section 856(e)), but only to the 
     extent such gross income is not described in (or, in the case 
     of foreign currency gain, not attributable to gross income 
     described in) section 856(c)(3) other than subparagraph (F) 
     thereof, over''.
       (b) Net Income From Prohibited Transactions.--Clause (i) of 
     section 857(b)(6)(B) is amended to read as follows:
       ``(i) the term `net income derived from prohibited 
     transactions' means the excess of the gain (including any 
     foreign currency gain, as defined in section 988(b)(1)) from 
     prohibited transactions over the deductions (including any 
     foreign currency loss, as defined in section 988(b)(2)) 
     allowed by this chapter which are directly connected with 
     prohibited transactions;''.

                 Subtitle B--Taxable Reit Subsidiaries

     SEC. 811. CONFORMING TAXABLE REIT SUBSIDIARY ASSET TEST.

       Section 856(c)(4)(B)(ii) is amended by striking ``20 
     percent'' and inserting ``25 percent''.

                        Subtitle C--Dealer Sales

     SEC. 821. HOLDING PERIOD UNDER SAFE HARBOR.

       Section 857(b)(6) (relating to income from prohibited 
     transactions) is amended--
       (1) by striking ``4 years'' in subparagraphs (C)(i), 
     (C)(iv), and (D)(i) and inserting ``2 years'',
       (2) by striking ``4-year period'' in subparagraphs (C)(ii), 
     (D)(ii), and (D)(iii) and inserting ``2-year period'', and
       (3) by striking ``real estate asset''and all that follows 
     through ``if'' in the matter preceding clause (i) of 
     subparagraphs (C) and (D), respectively, and inserting ``real 
     estate asset (as defined in section 856(c)(5)(B)) and which 
     is described in section 1221(a)(1) if''.

     SEC. 822. DETERMINING VALUE OF SALES UNDER SAFE HARBOR.

       Section 857(b)(6) is amended--
       (1) by striking the semicolon at the end of subparagraph 
     (C)(iii) and inserting ``, or (III) the fair market value of 
     property (other than sales of foreclosure property or sales 
     to which section 1033 applies) sold during the taxable year 
     does not exceed 10 percent of the fair market value of all of 
     the assets of the trust as of the beginning of the taxable 
     year;'', and
       (2) by adding ``or'' at the end of subclause (II) of 
     subparagraph (D)(iv) and by adding at the end of such 
     subparagraph the following new subclause:
       ``(III) the fair market value of property (other than sales 
     of foreclosure property or sales to which section 1033 
     applies) sold during the taxable year does not exceed 10 
     percent of the fair market value of all of the assets of the 
     trust as of the beginning of the taxable year,''.

[[Page 5057]]



                     Subtitle D--Health Care Reits

     SEC. 831. CONFORMITY FOR HEALTH CARE FACILITIES.

       (a) Related Party Rentals.--Subparagraph (B) of section 
     856(d)(8) (relating to special rule for taxable REIT 
     subsidiaries) is amended to read as follows:
       ``(B) Exception for certain lodging facilities and health 
     care property.--The requirements of this subparagraph are met 
     with respect to an interest in real property which is a 
     qualified lodging facility (as defined in paragraph (9)(D)) 
     or a qualified health care property (as defined in subsection 
     (e)(6)(D)(i)) leased by the trust to a taxable REIT 
     subsidiary of the trust if the property is operated on behalf 
     of such subsidiary by a person who is an eligible independent 
     contractor. For purposes of this section, a taxable REIT 
     subsidiary is not considered to be operating or managing a 
     qualified health care property or qualified lodging facility 
     solely because it--
       ``(i) directly or indirectly possesses a license, permit, 
     or similar instrument enabling it to do so, or
       ``(ii) employs individuals working at such property or 
     facility located outside the United States, but only if an 
     eligible independent contractor is responsible for the daily 
     supervision and direction of such individuals on behalf of 
     the taxable REIT subsidiary pursuant to a management 
     agreement or similar service contract.''.
       (b) Eligible Independent Contractor.--Subparagraphs (A) and 
     (B) of section 856(d)(9) (relating to eligible independent 
     contractor) are amended to read as follows:
       ``(A) In general.--The term `eligible independent 
     contractor' means, with respect to any qualified lodging 
     facility or qualified health care property (as defined in 
     subsection (e)(6)(D)(i)), any independent contractor if, at 
     the time such contractor enters into a management agreement 
     or other similar service contract with the taxable REIT 
     subsidiary to operate such qualified lodging facility or 
     qualified health care property, such contractor (or any 
     related person) is actively engaged in the trade or business 
     of operating qualified lodging facilities or qualified health 
     care properties, respectively, for any person who is not a 
     related person with respect to the real estate investment 
     trust or the taxable REIT subsidiary.
       ``(B) Special rules.--Solely for purposes of this paragraph 
     and paragraph (8)(B), a person shall not fail to be treated 
     as an independent contractor with respect to any qualified 
     lodging facility or qualified health care property (as so 
     defined) by reason of the following:
       ``(i) The taxable REIT subsidiary bears the expenses for 
     the operation of such qualified lodging facility or qualified 
     health care property pursuant to the management agreement or 
     other similar service contract.
       ``(ii) The taxable REIT subsidiary receives the revenues 
     from the operation of such qualified lodging facility or 
     qualified health care property, net of expenses for such 
     operation and fees payable to the operator pursuant to such 
     agreement or contract.
       ``(iii) The real estate investment trust receives income 
     from such person with respect to another property that is 
     attributable to a lease of such other property to such person 
     that was in effect as of the later of--

       ``(I) January 1, 1999, or
       ``(II) the earliest date that any taxable REIT subsidiary 
     of such trust entered into a management agreement or other 
     similar service contract with such person with respect to 
     such qualified lodging facility or qualified health care 
     property.''.

       (c) Taxable Reit Subsidiaries.--The last sentence of 
     section 856(l)(3) is amended--
       (1) by inserting ``or a health care facility'' after ``a 
     lodging facility'', and
       (2) by inserting ``or health care facility'' after ``such 
     lodging facility''.

                 Subtitle E--Effective Dates and Sunset

     SEC. 841 EFFECTIVE DATES AND SUNSET.

       (a) In General.--Except as otherwise provided in this 
     section, the amendments made by this title shall apply to 
     taxable years beginning after the date of the enactment of 
     this Act.
       (b) REIT Income Tests.--
       (1) The amendment made by section 801(a) and (b) shall 
     apply to gains and items of income recognized after the date 
     of the enactment of this Act.
       (2) The amendment made by section 801(c) shall apply to 
     transactions entered into after the date of the enactment of 
     this Act.
       (3) The amendment made by section 801(d) shall apply after 
     the date of the enactment of this Act.
       (c) Conforming Foreign Currency Revisions.--
       (1) The amendment made by section 803(a) shall apply to 
     gains recognized after the date of the enactment of this Act.
       (2) The amendment made by section 803(b) shall apply to 
     gains and deductions recognized after the date of the 
     enactment of this Act.
       (d) Dealer Sales.--The amendments made by subtitle C shall 
     apply to sales made after the date of the enactment of this 
     Act.
       (e) Sunset.--All amendments made by this title shall not 
     apply to taxable years beginning after the date which is 5 
     years after the date of the enactment of this Act. The 
     Internal Revenue Code of 1986 shall be applied and 
     administered to taxable years described in the preceding 
     sentence as if the amendments so described had never been 
     enacted.
                                 ______
                                 
  SA 4391. Mr. WICKER (for himself and Mr. Cochran) submitted an 
amendment intended to be proposed by him to the bill H.R. 3221, moving 
the United States toward greater energy independence and security, 
developing innovative new technologies, reducing carbon emissions, 
creating green jobs, protecting consumers, increasing clean renewable 
energy production, and modernizing our energy infrastructure, and to 
amend the Internal Revenue Code of 1986 to provide tax incentives for 
the production of renewable energy and energy conservation; which was 
ordered to lie on the table; as follows:

       At the end add the following:

                       TITLE __--GO ZONE PROPERTY

     SEC. _01. WAIVER OF DEADLINE ON CONSTRUCTION OF GO ZONE 
                   PROPERTY ELIGIBLE FOR BONUS DEPRECIATION.

       (a) In General.--Subparagraph (B) of section 1400N(d)(3) of 
     the Internal Revenue Code of 1986 is amended to read as 
     follows:
       ``(B) without regard to `and before January 1, 2009' in 
     clause (i) thereof,''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after December 31, 
     2007.
                                 ______
                                 
  SA 4392. Mr. SPECTER submitted an amendment intended to be proposed 
by him to the bill H.R. 3221, moving the United States toward greater 
energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       At the appropriate place, insert the following:

                    TITLE __--BANKRUPTCY PROVISIONS

     SEC. __1. SHORT TITLE.

       This title may be cited as the ``Home Owners' Mortgage and 
     Equity Savings Act'' or the ``HOMES Act''.

     SEC. __2. AUTHORITY TO MODIFY CERTAIN MORTGAGES.

       Section 1322(b) of title 11, United States Code, is 
     amended--
       (1) in paragraph (2), by inserting ``except as provided in 
     paragraph (11),'' after ``residence,'';
       (2) by redesignating paragraph (11) as paragraph (12);
       (3) in paragraph (10), by striking ``and'' at the end; and
       (4) by inserting after paragraph (10) the following:
       ``(11) with respect to a claim secured by a security 
     interest in real property initiated before September 26, 
     2007, that is the debtor's principal residence, if the 
     current monthly income of the debtor and the debtor's spouse 
     combined, when multiplied by 12, is less than, in the case of 
     a debtor in a household of 1 person, 150 percent of the 
     median family income of the applicable State for 1 earner, in 
     the case of a debtor in a household of 2, 3, or 4 
     individuals, the highest median family income of the 
     applicable State for a family of the same number or fewer 
     individuals, or in the case of a debtor in a household 
     exceeding 4 individuals, the highest median family income of 
     the applicable State for a family of 4 or fewer individuals, 
     plus $525 per month for each individual in excess of 4--
       ``(A) modify the rights of any holder of such claim by 
     lowering the principal amount of the loan to the fair market 
     value of the real property securing the loan at the time of 
     submission of the plan, to the extent that such fair market 
     value is less than the principal amount outstanding on the 
     loan, if such action is agreed to in writing by the debtor 
     and the holder of the claim;
       ``(B) waive any otherwise applicable early repayment or 
     prepayment penalties; and
       ``(C) in any case in which the applicable rate of interest 
     is adjustable under the mortgage contract, modify the rights 
     of any holder of such claim, by prohibiting or delaying 
     adjustments to the rate of interest applicable to the debt on 
     and after the date of filing of the plan or voiding any such 
     adjustments that occurred during the 2-year period preceding 
     that date of filing; and''.

     SEC. __3. TREATMENT OF CERTAIN INTEREST AND FEES.

       Section 548(a) of title 11, United States Code, is amended 
     by adding at the end the following:
       ``(3) For purposes of chapter 13, where the court finds 
     there was a substantial failure to disclose material terms 
     regarding interest, late fees, or other fees related to a 
     claim secured by a security interest in the debtor's 
     principal residence, the court may consider such interest, 
     late fees, or other fees to be a transfer covered under 
     paragraph (1)(B).''.

[[Page 5058]]



     SEC. __4. DELAY OF COUNSELING REQUIREMENT WHEN HOUSES ARE IN 
                   FORECLOSURE.

       Section 109(h) of title 11, United States Code, is amended 
     by adding at the end the following:
       ``(5) The requirements of paragraph (1) may be delayed 
     until after the date of filing, with respect to a debtor who 
     submits to the court a certification that the holder of a 
     claim secured by the debtor's principal residence has 
     initiated a judicial or nonjudicial foreclosure on the 
     debtor's principal residence.''.

     SEC. __5. STUDY AND REPORT.

       (a) Study.--The Comptroller General of the United States 
     shall conduct a study to determine the impact of allowing 
     bankruptcy judges to restructure principal residence 
     mortgages on the secondary market for mortgages.
       (b) Report to Congress.--Not later than 180 days after the 
     date of enactment of this Act, the Comptroller General shall 
     submit a report to Congress on the results of the study 
     required under subsection (a).

     SEC. __6. SUNSET.

       This title and the amendments made by this title shall 
     apply with respect to filings under chapter 13 of title 11, 
     United States Code, occurring during the 7-year period 
     following the date of enactment of this Act.
                                 ______
                                 
  SA 4393. Mrs. FEINSTEIN (for herself, Mr. Martinez, Mr. Obama, Mrs. 
Boxer, Mr. Salazar, Mr. Durbin and Ms. Klobuchar) submitted an 
amendment intended to be proposed by her to the bill H.R. 3221, moving 
the United States toward greater energy independence and security, 
developing innovative new technologies, reducing carbon emissions, 
creating green jobs, protecting consumers, increasing clean renewable 
energy production, and modernizing our energy infrastructure, and to 
amend the Internal Revenue Code of 1986 to provide tax incentives for 
the production of renewable energy and energy conservation; which was 
ordered to lie on the table; as follows:

       At the end, add the following:

               TITLE VII--S.A.F.E. MORTGAGE LICENSING ACT

     SEC. 701. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This title may be cited as the ``Secure 
     and Fair Enforcement for Mortgage Licensing Act of 2008'' or 
     ``S.A.F.E. Mortgage Licensing Act of 2008''.
       (b) Table of Contents.--The table of contents for this 
     title is as follows:

Sec. 701. Short title; table of contents.
Sec. 702. Purposes and methods for establishing a mortgage licensing 
              system and registry.
Sec. 703. Definitions.
Sec. 704. License or registration required.
Sec. 705. State license and registration application and issuance.
Sec. 706. Standards for State license renewal.
Sec. 707. System of registration administration by Federal banking 
              agencies.
Sec. 708. Secretary of Housing and Urban Development backup authority 
              to establish a loan originator licensing system.
Sec. 709. Backup authority to establish a nationwide mortgage licensing 
              and registry system.
Sec. 710. Fees.
Sec. 711. Background checks of loan originators.
Sec. 712. Confidentiality of information.
Sec. 713. Liability provisions.
Sec. 714. Enforcement under HUD backup licensing system.
Sec. 715. Preemption of State law.
Sec. 716. Reports and recommendations to Congress.
Sec. 717. Study and reports on defaults and foreclosures.

     SEC. 702. PURPOSES AND METHODS FOR ESTABLISHING A MORTGAGE 
                   LICENSING SYSTEM AND REGISTRY.

       In order to increase uniformity, reduce regulatory burden, 
     enhance consumer protection, and reduce fraud, the States, 
     through the Conference of State Bank Supervisors and the 
     American Association of Residential Mortgage Regulators, are 
     hereby encouraged to establish a Nationwide Mortgage 
     Licensing System and Registry for the residential mortgage 
     industry that accomplishes all of the following objectives:
       (1) Provides uniform license applications and reporting 
     requirements for State-licensed loan originators.
       (2) Provides a comprehensive licensing and supervisory 
     database.
       (3) Aggregates and improves the flow of information to and 
     between regulators.
       (4) Provides increased accountability and tracking of loan 
     originators.
       (5) Streamlines the licensing process and reduces the 
     regulatory burden.
       (6) Enhances consumer protections and supports anti-fraud 
     measures.
       (7) Provides consumers with easily accessible information, 
     offered at no charge, utilizing electronic media, including 
     the Internet, regarding the employment history of, and 
     publicly adjudicated disciplinary and enforcement actions 
     against, loan originators.
       (8) Establishes a means by which residential mortgage loan 
     originators would be required to act in the best interests of 
     the consumer, to the greatest extent possible.

     SEC. 703. DEFINITIONS.

       For purposes of this title, the following definitions shall 
     apply:
       (1) Federal banking agencies.--The term ``Federal banking 
     agencies'' means the Board of Governors of the Federal 
     Reserve System, the Comptroller of the Currency, the Director 
     of the Office of Thrift Supervision, the National Credit 
     Union Administration, and the Federal Deposit Insurance 
     Corporation.
       (2) Depository institution.--The term ``depository 
     institution'' has the same meaning as in section 3 of the 
     Federal Deposit Insurance Act, and includes any credit union.
       (3) Loan originator.--
       (A) In general.--The term ``loan originator''--
       (i) means an individual who--

       (I) takes a residential mortgage loan application;
       (II) assists a consumer in obtaining or applying to obtain 
     a residential mortgage loan; or
       (III) offers or negotiates terms of a residential mortgage 
     loan, for direct or indirect compensation or gain, or in the 
     expectation of direct or indirect compensation or gain;

       (ii) includes any individual who represents to the public, 
     through advertising or other means of communicating or 
     providing information (including the use of business cards, 
     stationery, brochures, signs, rate lists, or other 
     promotional items), that such individual can or will provide 
     or perform any of the activities described in clause (i);
       (iii) does not include any individual who is not otherwise 
     described in clause (i) or (ii) and who performs purely 
     administrative or clerical tasks on behalf of a person who is 
     described in any such clause; and
       (iv) does not include a person or entity that only performs 
     real estate brokerage activities and is licensed or 
     registered in accordance with applicable State law, unless 
     the person or entity is compensated by a lender, a mortgage 
     broker, or other loan originator or by any agent of such 
     lender, mortgage broker, or other loan originator.
       (B) Other definitions relating to loan originator.--For 
     purposes of this subsection, an individual ``assists a 
     consumer in obtaining or applying to obtain a residential 
     mortgage loan'' by, among other things, advising on loan 
     terms (including rates, fees, other costs), preparing loan 
     packages, or collecting information on behalf of the consumer 
     with regard to a residential mortgage loan.
       (C) Administrative or clerical tasks.--The term 
     ``administrative or clerical tasks'' means the receipt, 
     collection, and distribution of information common for the 
     processing or underwriting of a loan in the mortgage industry 
     and communication with a consumer to obtain information 
     necessary for the processing or underwriting of a residential 
     mortgage loan.
       (D) Real estate brokerage activity defined.--The term 
     ``real estate brokerage activity'' means any activity that 
     involves offering or providing real estate brokerage services 
     to the public, including--
       (i) acting as a real estate agent or real estate broker for 
     a buyer, seller, lessor, or lessee of real property;
       (ii) listing or advertising real property for sale, 
     purchase, lease, rental, or exchange;
       (iii) providing advice in connection with sale, purchase, 
     lease, rental, or exchange of real property;
       (iv) bringing together parties interested in the sale, 
     purchase, lease, rental, or exchange of real property;
       (v) negotiating, on behalf of any party, any portion of a 
     contract relating to the sale, purchase, lease, rental, or 
     exchange of real property (other than in connection with 
     providing financing with respect to any such transaction);
       (vi) engaging in any activity for which a person engaged in 
     the activity is required to be registered or licensed as a 
     real estate agent or real estate broker under any applicable 
     law; and
       (vii) offering to engage in any activity, or act in any 
     capacity, described in clause (i), (ii), (iii), (iv), (v), or 
     (vi).
       (4) Loan processor or underwriter.--
       (A) In general.--The term ``loan processor or underwriter'' 
     means an individual who performs clerical or support duties 
     at the direction of and subject to the supervision and 
     instruction of--
       (i) a State-licensed loan originator; or
       (ii) a registered loan originator.
       (B) Clerical or support duties.--For purposes of 
     subparagraph (A), the term ``clerical or support duties'' may 
     include--
       (i) the receipt, collection, distribution, and analysis of 
     information common for the processing or underwriting of a 
     residential mortgage loan; and
       (ii) communicating with a consumer to obtain the 
     information necessary for the processing or underwriting of a 
     loan, to the extent that such communication does not include 
     offering or negotiating loan rates or terms, or counseling 
     consumers about residential mortgage loan rates or terms.
       (5) Nationwide mortgage licensing system and registry.--The 
     term ``Nationwide

[[Page 5059]]

     Mortgage Licensing System and Registry'' means a mortgage 
     licensing system developed and maintained by the Conference 
     of State Bank Supervisors and the American Association of 
     Residential Mortgage Regulators for the State licensing and 
     registration of State-licensed loan originators and the 
     registration of registered loan originators or any system 
     established by the Secretary under section 709.
       (6) Registered loan originator.--The term ``registered loan 
     originator'' means any individual who--
       (A) meets the definition of loan originator and is an 
     employee of a depository institution or a wholly-owned 
     subsidiary of a depository institution; and
       (B) is registered with, and maintains a unique identifier 
     through, the Nationwide Mortgage Licensing System and 
     Registry.
       (7) Residential mortgage loan.--The term ``residential 
     mortgage loan'' means any loan primarily for personal, 
     family, or household use that is secured by a mortgage, deed 
     of trust, or other equivalent consensual security interest on 
     a dwelling (as defined in section 103(v) of the Truth in 
     Lending Act) or residential real estate upon which is 
     constructed or intended to be constructed a dwelling (as so 
     defined).
       (8) Secretary.--The term ``Secretary'' means the Secretary 
     of Housing and Urban Development.
       (9) State-licensed loan originator.--The term ``State-
     licensed loan originator'' means any individual who--
       (A) is a loan originator;
       (B) is not an employee of a depository institution or any 
     wholly-owned subsidiary of a depository institution; and
       (C) is licensed by a State or by the Secretary under 
     section 708 and registered as a loan originator with, and 
     maintains a unique identifier through, the Nationwide 
     Mortgage Licensing System and Registry.
       (10) Subprime mortgage.--The term ``subprime mortgage'' 
     means a residential mortgage loan--
       (A) that is secured by real property that is used or 
     intended to be used as a principal dwelling;
       (B) that is typically offered to borrowers having weakened 
     credit histories and reduced repayment capacity, as measured 
     by lower credit scores, debt-to-income ratios, and other 
     relevant criteria; and
       (C) the characteristics of which may include--
       (i) low initial payments based on a fixed introductory rate 
     that expires after a short period and then adjusts to a 
     variable index rate plus a margin for the remaining term of 
     the loan;
       (ii) very high or no limits on how much the payment amount 
     or the interest rate may increase (referred to as ``payment 
     caps'' or ``rate caps'') on reset dates;
       (iii) limited or no documentation of the income of the 
     borrower;
       (iv) product features likely to result in frequent 
     refinancing to maintain an affordable monthly payment; and
       (v) substantial prepayment penalties or prepayment 
     penalties that extend beyond the initial fixed interest rate 
     period.
       (11) Unique identifier.--The term ``unique identifier'' 
     means a number or other identifier that--
       (A) permanently identifies a loan originator; and
       (B) is assigned by protocols established by the Nationwide 
     Mortgage Licensing System and Registry and the Federal 
     banking agencies to facilitate electronic tracking of loan 
     originators and uniform identification of, and public access 
     to, the employment history of and the publicly adjudicated 
     disciplinary and enforcement actions against loan 
     originators.

     SEC. 704. LICENSE OR REGISTRATION REQUIRED.

       (a) In General.--An individual may not engage in the 
     business of a loan originator without first--
       (1) obtaining and maintaining, through an annual renewal--
       (A) a registration as a registered loan originator; or
       (B) a license and registration as a State-licensed loan 
     originator; and
       (2) obtaining a unique identifier.
       (b) Loan Processors and Underwriters.--
       (1) Supervised loan processors and underwriters.--A loan 
     processor or underwriter who does not represent to the 
     public, through advertising or other means of communicating 
     or providing information (including the use of business 
     cards, stationery, brochures, signs, rate lists, or other 
     promotional items), that such individual can or will perform 
     any of the activities of a loan originator shall not be 
     required to be a State-licensed loan originator or a 
     registered loan originator.
       (2) Independent contractors.--A loan processor or 
     underwriter may not work as an independent contractor unless 
     such processor or underwriter is a State-licensed loan 
     originator or a registered loan originator.

     SEC. 705. STATE LICENSE AND REGISTRATION APPLICATION AND 
                   ISSUANCE.

       (a) Background Checks.--In connection with an application 
     to any State for licensing and registration as a State-
     licensed loan originator, the applicant shall, at a minimum, 
     furnish to the Nationwide Mortgage Licensing System and 
     Registry information concerning the applicant's identity, 
     including--
       (1) fingerprints for submission to the Federal Bureau of 
     Investigation, and any governmental agency or entity 
     authorized to receive such information for a State and 
     national criminal history background check; and
       (2) personal history and experience, including 
     authorization for the System to obtain--
       (A) an independent credit report obtained from a consumer 
     reporting agency described in section 603(p) of the Fair 
     Credit Reporting Act; and
       (B) information related to any administrative, civil or 
     criminal findings by any governmental jurisdiction.
       (b) Issuance of License.--The minimum standards for 
     licensing and registration as a State-licensed loan 
     originator shall include the following:
       (1) The applicant has never had a loan originator or 
     similar license revoked in any governmental jurisdiction.
       (2) The applicant has never been convicted of, or pled 
     guilty or nolo contendere to, a felony in a domestic, 
     foreign, or military court.
       (3) The applicant has demonstrated financial 
     responsibility, character, and general fitness such as to 
     command the confidence of the community and to warrant a 
     determination that the loan originator will operate honestly, 
     fairly, and efficiently within the purposes of this title.
       (4) The applicant has completed the pre-licensing education 
     requirement described in subsection (c).
       (5) The applicant has passed a written test that meets the 
     test requirement described in subsection (d).
       (6) The applicant has met a minimum net worth requirement.
       (c) Pre-Licensing Education of Loan Originators.--
       (1) Minimum educational requirements.--In order to meet the 
     pre-licensing education requirement referred to in subsection 
     (b)(4), a person shall complete at least 20 hours of 
     education approved in accordance with paragraph (2), which 
     shall include at least--
       (A) 3 hours of Federal law and regulations;
       (B) 3 hours of ethics, which shall include instruction on 
     fraud, consumer protection, and fair lending issues; and
       (C) 2 hours of training related to lending standards for 
     the subprime mortgage marketplace.
       (2) Approved educational courses.--For purposes of 
     paragraph (1), pre-licensing education courses shall be 
     reviewed, and approved by the Nationwide Mortgage Licensing 
     System and Registry.
       (3) Limitation and standards.--
       (A) Limitation.--To maintain the independence of the 
     approval process, the Nationwide Mortgage Licensing System 
     and Registry shall not directly or indirectly offer pre-
     licensure educational courses for loan originators.
       (B) Standards.--In approving courses under this section, 
     the Nationwide Mortgage Licensing System and Registry shall 
     apply reasonable standards in the review and approval of 
     courses.
       (d) Testing of Loan Originators.--
       (1) In general.--In order to meet the written test 
     requirement referred to in subsection (b)(5), an individual 
     shall pass, in accordance with the standards established 
     under this subsection, a qualified written test developed by 
     the Nationwide Mortgage Licensing System and Registry and 
     administered by an approved test provider.
       (2) Qualified test.--A written test shall not be treated as 
     a qualified written test for purposes of paragraph (1) 
     unless--
       (A) the test consists of a minimum of 100 questions; and
       (B) the test adequately measures the applicant's knowledge 
     and comprehension in appropriate subject areas, including--
       (i) ethics;
       (ii) Federal law and regulation pertaining to mortgage 
     origination;
       (iii) State law and regulation pertaining to mortgage 
     origination; and
       (iv) Federal and State law and regulation, including 
     instruction on fraud, consumer protection, subprime mortgage 
     marketplace, and fair lending issues.
       (3) Minimum competence.--
       (A) Passing score.--An individual shall not be considered 
     to have passed a qualified written test unless the individual 
     achieves a test score of not less than 75 percent correct 
     answers to questions.
       (B) Initial retests.--An individual may retake a test 3 
     consecutive times with each consecutive taking occurring in 
     less than 14 days after the preceding test.
       (C) Subsequent retests.--After 3 consecutive tests, an 
     individual shall wait at least 14 days before taking the test 
     again.
       (D) Retest after lapse of license.--A State-licensed loan 
     originator who fails to maintain a valid license for a period 
     of 5 years or longer shall retake the test, not taking into 
     account any time during which such individual is a registered 
     loan originator.
       (e) Mortgage Call Reports.--Each mortgage licensee shall 
     submit to the Nationwide Mortgage Licensing System and 
     Registry reports of condition, which shall be in such form 
     and shall contain such information as the Nationwide Mortgage 
     Licensing System and Registry may require.

[[Page 5060]]



     SEC. 706. STANDARDS FOR STATE LICENSE RENEWAL.

       (a) In General.--The minimum standards for license renewal 
     for State-licensed loan originators shall include the 
     following:
       (1) The loan originator continues to meet the minimum 
     standards for license issuance.
       (2) The loan originator has satisfied the annual continuing 
     education requirements described in subsection (b).
       (b) Continuing Education for State-Licensed Loan 
     Originators.--
       (1) In general.--In order to meet the annual continuing 
     education requirements referred to in subsection (a)(2), a 
     State-licensed loan originator shall complete at least 8 
     hours of education approved in accordance with paragraph (2), 
     which shall include at least--
       (A) 3 hours of Federal law and regulations;
       (B) 2 hours of ethics, which shall include instruction on 
     fraud, consumer protection, and fair lending issues; and
       (C) 2 hours of training related to lending standards for 
     the subprime mortgage marketplace.
       (2) Approved educational courses.--For purposes of 
     paragraph (1), continuing education courses shall be 
     reviewed, and approved by the Nationwide Mortgage Licensing 
     System and Registry.
       (3) Calculation of continuing education credits.--A State-
     licensed loan originator--
       (A) may only receive credit for a continuing education 
     course in the year in which the course is taken; and
       (B) may not take the same approved course in the same or 
     successive years to meet the annual requirements for 
     continuing education.
       (4) Instructor credit.--A State-licensed loan originator 
     who is approved as an instructor of an approved continuing 
     education course may receive credit for the originator's own 
     annual continuing education requirement at the rate of 2 
     hours credit for every 1 hour taught.
       (5) Limitation and standards.--
       (A) Limitation.--To maintain the independence of the 
     approval process, the Nationwide Mortgage Licensing System 
     and Registry shall not directly or indirectly offer any 
     continuing education courses for loan originators.
       (B) Standards.--In approving courses under this section, 
     the Nationwide Mortgage Licensing System and Registry shall 
     apply reasonable standards in the review and approval of 
     courses.

     SEC. 707. SYSTEM OF REGISTRATION ADMINISTRATION BY FEDERAL 
                   BANKING AGENCIES.

       (a) Development.--
       (1) In general.--The Federal banking agencies shall 
     jointly, through the Federal Financial Institutions 
     Examination Council, develop and maintain a system for 
     registering employees of depository institutions or 
     subsidiaries of depository institutions as registered loan 
     originators with the Nationwide Mortgage Licensing System and 
     Registry. The system shall be implemented before the end of 
     the 1-year period beginning on the date of the enactment of 
     this title.
       (2) Registration requirements.--In connection with the 
     registration of any loan originator who is an employee of a 
     depository institution or a wholly-owned subsidiary of a 
     depository institution with the Nationwide Mortgage Licensing 
     System and Registry, the appropriate Federal banking agency 
     shall, at a minimum, furnish or cause to be furnished to the 
     Nationwide Mortgage Licensing System and Registry information 
     concerning the employees's identity, including--
       (A) fingerprints for submission to the Federal Bureau of 
     Investigation, and any governmental agency or entity 
     authorized to receive such information for a State and 
     national criminal history background check; and
       (B) personal history and experience, including 
     authorization for the Nationwide Mortgage Licensing System 
     and Registry to obtain information related to any 
     administrative, civil or criminal findings by any 
     governmental jurisdiction.
       (b) Coordination.--
       (1) Unique identifier.--The Federal banking agencies, 
     through the Financial Institutions Examination Council, shall 
     coordinate with the Nationwide Mortgage Licensing System and 
     Registry to establish protocols for assigning a unique 
     identifier to each registered loan originator that will 
     facilitate electronic tracking and uniform identification of, 
     and public access to, the employment history of and publicly 
     adjudicated disciplinary and enforcement actions against loan 
     originators.
       (2) Nationwide mortgage licensing system and registry 
     development.--To facilitate the transfer of information 
     required by subsection (a)(2), the Nationwide Mortgage 
     Licensing System and Registry shall coordinate with the 
     Federal banking agencies, through the Financial Institutions 
     Examination Council, concerning the development and 
     operation, by such System and Registry, of the registration 
     functionality and data requirements for loan originators.
       (c) Consideration of Factors and Procedures.--In 
     establishing the registration procedures under subsection (a) 
     and the protocols for assigning a unique identifier to a 
     registered loan originator, the Federal banking agencies 
     shall make such de minimis exceptions as may be appropriate 
     to paragraphs (1)(A) and (2) of section 704(a), shall make 
     reasonable efforts to utilize existing information to 
     minimize the burden of registering loan originators, and 
     shall consider methods for automating the process to the 
     greatest extent practicable consistent with the purposes of 
     this title.

     SEC. 708. SECRETARY OF HOUSING AND URBAN DEVELOPMENT BACKUP 
                   AUTHORITY TO ESTABLISH A LOAN ORIGINATOR 
                   LICENSING SYSTEM.

       (a) Back up Licensing System.--If, by the end of the 1-year 
     period, or the 2-year period in the case of a State whose 
     legislature meets only biennially, beginning on the date of 
     the enactment of this title or at any time thereafter, the 
     Secretary determines that a State does not have in place by 
     law or regulation a system for licensing and registering loan 
     originators that meets the requirements of sections 705 and 
     706 and subsection (d) of this section, or does not 
     participate in the Nationwide Mortgage Licensing System and 
     Registry, the Secretary shall provide for the establishment 
     and maintenance of a system for the licensing and 
     registration by the Secretary of loan originators operating 
     in such State as State-licensed loan originators.
       (b) Licensing and Registration Requirements.--The system 
     established by the Secretary under subsection (a) for any 
     State shall meet the requirements of sections 705 and 706 for 
     State-licensed loan originators.
       (c) Unique Identifier.--The Secretary shall coordinate with 
     the Nationwide Mortgage Licensing System and Registry to 
     establish protocols for assigning a unique identifier to each 
     loan originator licensed by the Secretary as a State-licensed 
     loan originator that will facilitate electronic tracking and 
     uniform identification of, and public access to, the 
     employment history of and the publicly adjudicated 
     disciplinary and enforcement actions against loan 
     originators.
       (d) State Licensing Law Requirements.--For purposes of this 
     section, the law in effect in a State meets the requirements 
     of this subsection if the Secretary determines the law 
     satisfies the following minimum requirements:
       (1) A State loan originator supervisory authority is 
     maintained to provide effective supervision and enforcement 
     of such law, including the suspension, termination, or 
     nonrenewal of a license for a violation of State or Federal 
     law.
       (2) The State loan originator supervisory authority ensures 
     that all State-licensed loan originators operating in the 
     State are registered with Nationwide Mortgage Licensing 
     System and Registry.
       (3) The State loan originator supervisory authority is 
     required to regularly report violations of such law, as well 
     as enforcement actions and other relevant information, to the 
     Nationwide Mortgage Licensing System and Registry.
       (e) Temporary Extension of Period.--The Secretary may 
     extend, by not more than 12 months, the 1-year or 2-year 
     period, as the case may be, referred to in subsection (a) for 
     the licensing of loan originators in any State under a State 
     licensing law that meets the requirements of sections 705 and 
     706 and subsection (d) if the Secretary determines that such 
     State is making a good faith effort to establish a State 
     licensing law that meets such requirements, license mortgage 
     originators under such law, and register such originators 
     with the Nationwide Mortgage Licensing System and Registry.
       (f) Limitation on HUD-Licensed Loan Originators.--Any loan 
     originator who is licensed by the Secretary under a system 
     established under this section for any State may not use such 
     license to originate loans in any other State.
       (g) Contracting Authority.--The Secretary may enter into 
     contracts with qualified independent parties, as necessary to 
     efficiently fulfill the obligations of the Secretary under 
     this Section.

     SEC. 709. BACKUP AUTHORITY TO ESTABLISH A NATIONWIDE MORTGAGE 
                   LICENSING AND REGISTRY SYSTEM.

       If at any time the Secretary determines that the Nationwide 
     Mortgage Licensing System and Registry is failing to meet the 
     requirements and purposes of this title for a comprehensive 
     licensing, supervisory, and tracking system for loan 
     originators, the Secretary shall establish and maintain such 
     a system to carry out the purposes of this title and the 
     effective registration and regulation of loan originators.

     SEC. 710. FEES.

       The Federal banking agencies, the Secretary, and the 
     Nationwide Mortgage Licensing System and Registry may charge 
     reasonable fees to cover the costs of maintaining and 
     providing access to information from the Nationwide Mortgage 
     Licensing System and Registry, to the extent that such fees 
     are not charged to consumers for access to such system and 
     registry.

     SEC. 711. BACKGROUND CHECKS OF LOAN ORIGINATORS.

       (a) Access to Records.--Notwithstanding any other provision 
     of law, in providing identification and processing functions, 
     the Attorney General shall provide access to all criminal 
     history information to the appropriate State officials 
     responsible for regulating State-licensed loan originators to 
     the

[[Page 5061]]

     extent criminal history background checks are required under 
     the laws of the State for the licensing of such loan 
     originators.
       (b) Agent.--For the purposes of this section and in order 
     to reduce the points of contact which the Federal Bureau of 
     Investigation may have to maintain for purposes of subsection 
     (a), the Conference of State Bank Supervisors or a wholly 
     owned subsidiary may be used as a channeling agent of the 
     States for requesting and distributing information between 
     the Department of Justice and the appropriate State agencies.

     SEC. 712. CONFIDENTIALITY OF INFORMATION.

       (a) System Confidentiality.--Except as otherwise provided 
     in this section, any requirement under Federal or State law 
     regarding the privacy or confidentiality of any information 
     or material provided to the Nationwide Mortgage Licensing 
     System and Registry or a system established by the Secretary 
     under section 709, and any privilege arising under Federal or 
     State law (including the rules of any Federal or State court) 
     with respect to such information or material, shall continue 
     to apply to such information or material after the 
     information or material has been disclosed to the system. 
     Such information and material may be shared with all State 
     and Federal regulatory officials with mortgage industry 
     oversight authority without the loss of privilege or the loss 
     of confidentiality protections provided by Federal and State 
     laws.
       (b) Nonapplicability of Certain Requirements.--Information 
     or material that is subject to a privilege or confidentiality 
     under subsection (a) shall not be subject to--
       (1) disclosure under any Federal or State law governing the 
     disclosure to the public of information held by an officer or 
     an agency of the Federal Government or the respective State; 
     or
       (2) subpoena or discovery, or admission into evidence, in 
     any private civil action or administrative process, unless 
     with respect to any privilege held by the Nationwide Mortgage 
     Licensing System and Registry or the Secretary with respect 
     to such information or material, the person to whom such 
     information or material pertains waives, in whole or in part, 
     in the discretion of such person, that privilege.
       (c) Coordination With Other Law.--Any State law, including 
     any State open record law, relating to the disclosure of 
     confidential supervisory information or any information or 
     material described in subsection (a) that is inconsistent 
     with subsection (a) shall be superseded by the requirements 
     of such provision to the extent State law provides less 
     confidentiality or a weaker privilege.
       (d) Public Access to Information.--This section shall not 
     apply with respect to the information or material relating to 
     the employment history of, and publicly adjudicated 
     disciplinary and enforcement actions against, loan 
     originators that is included in Nationwide Mortgage Licensing 
     System and Registry for access by the public.

     SEC. 713. LIABILITY PROVISIONS.

       The Secretary, any State official or agency, any Federal 
     banking agency, or any organization serving as the 
     administrator of the Nationwide Mortgage Licensing System and 
     Registry or a system established by the Secretary under 
     section 9, or any officer or employee of any such entity, 
     shall not be subject to any civil action or proceeding for 
     monetary damages by reason of the good-faith action or 
     omission of any officer or employee of any such entity, while 
     acting within the scope of office or employment, relating to 
     the collection, furnishing, or dissemination of information 
     concerning persons who are loan originators or are applying 
     for licensing or registration as loan originators.

     SEC. 714. ENFORCEMENT UNDER HUD BACKUP LICENSING SYSTEM.

       (a) Summons Authority.--The Secretary may--
       (1) examine any books, papers, records, or other data of 
     any loan originator operating in any State which is subject 
     to a licensing system established by the Secretary under 
     section 708; and
       (2) summon any loan originator referred to in paragraph (1) 
     or any person having possession, custody, or care of the 
     reports and records relating to such loan originator, to 
     appear before the Secretary or any delegate of the Secretary 
     at a time and place named in the summons and to produce such 
     books, papers, records, or other data, and to give testimony, 
     under oath, as may be relevant or material to an 
     investigation of such loan originator for compliance with the 
     requirements of this title.
       (b) Examination Authority.--
       (1) In general.--If the Secretary establishes a licensing 
     system under section 708 for any State, the Secretary shall 
     appoint examiners for the purposes of administering such 
     section.
       (2) Power to examine.--Any examiner appointed under 
     paragraph (1) shall have power, on behalf of the Secretary, 
     to make any examination of any loan originator operating in 
     any State which is subject to a licensing system established 
     by the Secretary under section 708 whenever the Secretary 
     determines an examination of any loan originator is necessary 
     to determine the compliance by the originator with this 
     title.
       (3) Report of examination.--Each examiner appointed under 
     paragraph (1) shall make a full and detailed report of 
     examination of any loan originator examined to the Secretary.
       (4) Administration of oaths and affirmations; evidence.--In 
     connection with examinations of loan originators operating in 
     any State which is subject to a licensing system established 
     by the Secretary under section 708, or with other types of 
     investigations to determine compliance with applicable law 
     and regulations, the Secretary and examiners appointed by the 
     Secretary may administer oaths and affirmations and examine 
     and take and preserve testimony under oath as to any matter 
     in respect to the affairs of any such loan originator.
       (5) Assessments.--The cost of conducting any examination of 
     any loan originator operating in any State which is subject 
     to a licensing system established by the Secretary under 
     section 708 shall be assessed by the Secretary against the 
     loan originator to meet the Secretary's expenses in carrying 
     out such examination.
       (c) Cease and Desist Proceeding.--
       (1) Authority of secretary.--If the Secretary finds, after 
     notice and opportunity for hearing, that any person is 
     violating, has violated, or is about to violate any provision 
     of this title, or any regulation thereunder, with respect to 
     a State which is subject to a licensing system established by 
     the Secretary under section 708, the Secretary may publish 
     such findings and enter an order requiring such person, and 
     any other person that is, was, or would be a cause of the 
     violation, due to an act or omission the person knew or 
     should have known would contribute to such violation, to 
     cease and desist from committing or causing such violation 
     and any future violation of the same provision, rule, or 
     regulation. Such order may, in addition to requiring a person 
     to cease and desist from committing or causing a violation, 
     require such person to comply, or to take steps to effect 
     compliance, with such provision or regulation, upon such 
     terms and conditions and within such time as the Secretary 
     may specify in such order. Any such order may, as the 
     Secretary deems appropriate, require future compliance or 
     steps to effect future compliance, either permanently or for 
     such period of time as the Secretary may specify, with such 
     provision or regulation with respect to any loan originator.
       (2) Hearing.--The notice instituting proceedings pursuant 
     to paragraph (1) shall fix a hearing date not earlier than 30 
     days nor later than 60 days after service of the notice 
     unless an earlier or a later date is set by the Secretary 
     with the consent of any respondent so served.
       (3) Temporary order.--Whenever the Secretary determines 
     that the alleged violation or threatened violation specified 
     in the notice instituting proceedings pursuant to paragraph 
     (1), or the continuation thereof, is likely to result in 
     significant dissipation or conversion of assets, significant 
     harm to consumers, or substantial harm to the public interest 
     prior to the completion of the proceedings, the Secretary may 
     enter a temporary order requiring the respondent to cease and 
     desist from the violation or threatened violation and to take 
     such action to prevent the violation or threatened violation 
     and to prevent dissipation or conversion of assets, 
     significant harm to consumers, or substantial harm to the 
     public interest as the Secretary deems appropriate pending 
     completion of such proceedings. Such an order shall be 
     entered only after notice and opportunity for a hearing, 
     unless the Secretary determines that notice and hearing prior 
     to entry would be impracticable or contrary to the public 
     interest. A temporary order shall become effective upon 
     service upon the respondent and, unless set aside, limited, 
     or suspended by the Secretary or a court of competent 
     jurisdiction, shall remain effective and enforceable pending 
     the completion of the proceedings.
       (4) Review of temporary orders.--
       (A) Review by secretary.--At any time after the respondent 
     has been served with a temporary cease-and-desist order 
     pursuant to paragraph (3), the respondent may apply to the 
     Secretary to have the order set aside, limited, or suspended. 
     If the respondent has been served with a temporary cease-and-
     desist order entered without a prior hearing before the 
     Secretary, the respondent may, within 10 days after the date 
     on which the order was served, request a hearing on such 
     application and the Secretary shall hold a hearing and render 
     a decision on such application at the earliest possible time.
       (B) Judicial review.--Within--
       (i) 10 days after the date the respondent was served with a 
     temporary cease-and-desist order entered with a prior hearing 
     before the Secretary; or
       (ii) 10 days after the Secretary renders a decision on an 
     application and hearing under paragraph (1), with respect to 
     any temporary cease-and-desist order entered without a prior 
     hearing before the Secretary,
     the respondent may apply to the United States district court 
     for the district in which the respondent resides or has its 
     principal place of business, or for the District of Columbia, 
     for an order setting aside, limiting, or suspending the 
     effectiveness or enforcement of the order, and the court 
     shall have jurisdiction to enter such an order. A respondent 
     served with a temporary cease-and-

[[Page 5062]]

     desist order entered without a prior hearing before the 
     Secretary may not apply to the court except after hearing and 
     decision by the Secretary on the respondent's application 
     under subparagraph (A).
       (C) No automatic stay of temporary order.--The commencement 
     of proceedings under subparagraph (B) shall not, unless 
     specifically ordered by the court, operate as a stay of the 
     Secretary's order.
       (5) Authority of the secretary to prohibit persons from 
     serving as loan originators.--In any cease-and-desist 
     proceeding under paragraph (1), the Secretary may issue an 
     order to prohibit, conditionally or unconditionally, and 
     permanently or for such period of time as the Secretary shall 
     determine, any person who has violated this title or 
     regulations thereunder, from acting as a loan originator if 
     the conduct of that person demonstrates unfitness to serve as 
     a loan originator.
       (d) Authority of the Secretary To Assess Money Penalties.--
       (1) In general.--The Secretary may impose a civil penalty 
     on a loan originator operating in any State which is subject 
     to licensing system established by the Secretary under 
     section 708, if the Secretary finds, on the record after 
     notice and opportunity for hearing, that such loan originator 
     has violated or failed to comply with any requirement of this 
     title or any regulation prescribed by the Secretary under 
     this title or order issued under subsection (c).
       (2) Maximum amount of penalty.--The maximum amount of 
     penalty for each act or omission described in paragraph (1) 
     shall be $5,000 for each day the violation continues.

     SEC. 715. PREEMPTION OF STATE LAW.

       Nothing in this title may be construed to preempt the law 
     of any State, to the extent that such State law provides 
     greater protection to consumers than is provided under this 
     title.

     SEC. 716. REPORTS AND RECOMMENDATIONS TO CONGRESS.

       (a) Annual Reports.--Not later than 1 year after the date 
     of enactment of this title, and annually thereafter, the 
     Secretary shall submit a report to Congress on the 
     effectiveness of the provisions of this title, including 
     legislative recommendations, if any, for strengthening 
     consumer protections, enhancing examination standards, and 
     streamlining communication between all stakeholders involved 
     in residential mortgage loan origination and processing.
       (b) Legislative Recommendations.--Not later than 6 months 
     after the date of enactment of this title, the Secretary 
     shall make recommendations to Congress on legislative reforms 
     to the Real Estate Settlement Procedures Act of 1974, that 
     the Secretary deems appropriate to promote more transparent 
     disclosures, allowing consumers to better shop and compare 
     mortgage loan terms and settlement costs.

     SEC. 717. STUDY AND REPORTS ON DEFAULTS AND FORECLOSURES.

       (a) Study Required.--The Secretary shall conduct an 
     extensive study of the root causes of default and foreclosure 
     of home loans, using as much empirical data as is available.
       (b) Preliminary Report to Congress.--Not later than 6 
     months after the date of enactment of this title, the 
     Secretary shall submit to Congress a preliminary report 
     regarding the study required by this section.
       (c) Final Report to Congress.--Not later than 12 months 
     after the date of enactment of this title, the Secretary 
     shall submit to Congress a final report regarding the results 
     of the study required by this section, which shall include 
     any recommended legislation relating to the study, and 
     recommendations for best practices and for a process to 
     provide targeted assistance to populations with the highest 
     risk of potential default or foreclosure.
                                 ______
                                 
  SA 4394. Ms. MIKULSKI (for herself, Mr. Kennedy and Mr. Harkin) 
submitted an amendment intended to be proposed to amendment SA 4387 
submitted by Mr. Dodd (for himself and Mr. Shelby) to the bill H.R. 
3221, moving the United States toward greater energy independence and 
security, developing innovative new technologies, reducing carbon 
emissions, creating green jobs, protecting consumers, increasing clean 
renewable energy production, and modernizing our energy infrastructure, 
and to amend the Internal Revenue Code of 1986 to provide tax 
incentives for the production of renewable energy and energy 
conservation; which was ordered to lie on the table; as follows:

       On page 58, line 10, strike ``$100,000,000'' and insert 
     ``$137,500,000''.
       On page 58, line 17, strike the period and insert the 
     following: ``: Provided, That, of such amounts $37,500,000 
     shall be used by the Neighborhood Reinvestment Corporation 
     (referred to in this section as the `NRC') to (1) make grants 
     to counseling intermediaries approved by the Department of 
     Housing and Urban Development or the NRC to hire attorneys 
     trained and capable of assisting homeowners of owner-occupied 
     homes with mortgages in default, in danger of default, or 
     subject to or at risk of foreclosure who have legal issues 
     that cannot be handled by counselors already employed by such 
     intermediaries, and (2) support NRC partnerships with State 
     and local legal organizations and organizations described in 
     section 501(c)(3) of the Internal Revenue Code of 1986 and 
     exempt from tax under section 501(a) of that Code with 
     demonstrated relevant legal experience in home foreclosure 
     law, as such experience is determined by the Chief Executive 
     Officer of NRC: Provided further, That for the purpose of the 
     prior proviso the term `relevant experience' means experience 
     representing homeowners in negotiations and or legal 
     proceedings aimed at preventing or mitigating foreclosure or 
     providing legal research and technical legal expertise to 
     community based organizations whose goal is to reduce, 
     prevent, or mitigate foreclosure: Provided further, That of 
     the amounts provided for in the prior provisos the NRC shall 
     give priority consideration to counseling intermediaries and 
     legal organizations that (1) provide legal assistance in the 
     100 metropolitan statistical areas (as defined by the 
     Director of the Office of Management and Budget) with the 
     highest home foreclosure rates, and (2) have the capacity to 
     begin using the financial assistance within 90 days after 
     receipt of the assistance.''.
       On page 58, between lines 17 and 18, insert the following:

     SEC. 302. LEGAL ASSISTANCE RELATED TO HOME OWNERSHIP 
                   PRESERVATION AND FORECLOSURE PREVENTION.

       (a) Appropriation.--
       (1) In general.--There is authorized to be appropriated and 
     there is appropriated to the Legal Services Corporation 
     $37,500,000 to provide legal assistance related to home 
     ownership preservation, home foreclosure prevention, and 
     tenancy associated with home foreclosure.
       (2) Availability.--Such funds shall remain available until 
     expended.
       (b) Funding Requirements.--Each limitation on expenditures, 
     and each term or condition, that applies to funds 
     appropriated to the Legal Services Corporation under the 
     Commerce, Justice, Science, and Related Agencies 
     Appropriations Act, 2008, shall apply to funds appropriated 
     to the Corporation under subsection (a), except as provided 
     in subsections (a)(1) and (c).
       (c) Priority.--In providing financial assistance from the 
     funds appropriated under subsection (a), the Corporation 
     shall give priority to eligible entities and individuals 
     that--
       (1) provide legal assistance in the 100 metropolitan 
     statistical areas (as defined by the Director of the Office 
     of Management and Budget) with the highest home foreclosure 
     rates; and
       (2) have the capacity to begin using the financial 
     assistance within 90 days after receipt of the assistance.
                                 ______
                                 
  SA 4395. Mr. BUNNING submitted an amendment intended to be proposed 
to amendment SA 4387 submitted by Mr. Dodd (for himself and Mr. Shelby) 
to the bill H.R. 3221, moving the United States toward greater energy 
independence and security, developing innovative new technologies, 
reducing carbon emissions, creating green jobs, protecting consumers, 
increasing clean renewable energy production, and modernizing our 
energy infrastructure, and to amend the Internal Revenue Code of 1986 
to provide tax incentives for the production of renewable energy and 
energy conservation; which was ordered to lie on the table; as follows:

       At the end of title VI, add the following:

     SEC. 605. DEDUCTION FOR POINTS ON HOME MORTGAGE REFINANCING 
                   ALLOWED IN YEAR PAID.

       (a) In General.--Paragraph (2) of section 461(g) of the 
     Internal Revenue Code of 1986 (relating to prepaid interest) 
     is amended--
       (1) by striking ``This subsection'' and inserting the 
     following:
       ``(A) In general.--This subsection'', and
       (2) by adding at the end the following new subparagraph:
       ``(B) Exception for certain refinancings.--
       ``(i) In general.--This subsection shall not apply to 
     points paid--

       ``(I) in respect of indebtedness secured by such residence 
     resulting from the refinancing of indebtedness meeting the 
     requirements of the subparagraph (A), and
       ``(II) before January 1, 2011.

       ``(ii) Limitation.--Clause (i) shall apply only to the 
     extent the amount of the indebtedness resulting from such 
     refinancing does not exceed the sum of--

       ``(I) the amount of the refinanced indebtedness, plus
       ``(II) the lesser of $10,000 or the points paid in respect 
     of the indebtedness resulting from the refinancing to the 
     extent that the indebtedness resulting from the refinancing 
     does not exceed the refinanced indebtedness.

       ``(iii) Adjustment for inflation.--In the case of any 
     calendar year beginning after 2008, the $10,000 amount under 
     clause (ii)(II) shall be increased by an amount equal to--

       ``(I) such dollar amount, multiplied by
       ``(II) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar

[[Page 5063]]

     year in which the taxable year begins, determined by 
     substituting `calendar year 2007' for `calendar year 1992' in 
     subparagraph (B) thereof.

     If any amount as adjusted under the preceding sentence is not 
     a multiple of $100, such amount shall be rounded to the next 
     nearest multiple of $100.''.
       (b) Conforming Amendment.--The heading of paragraph (2) of 
     section 461(g) of such Code is amended by striking 
     ``Exception'' and inserting ``Exceptions''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to amounts paid in taxable years beginning after 
     December 31, 2007.
                                 ______
                                 
  SA 4396. Mr. BROWNBACK submitted an amendment intended to be proposed 
by him to the bill H.R. 3221, moving the United States toward greater 
energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       At the end of the bill, add the following:

  TITLE VIII--COMMISSION ON HOUSING AND REGULATORY ACCOUNTABILITY AND 
                                 REVIEW

     SEC. 801. DEFINITIONS.

       In this title:
       (1) Agency.--The term ``agency'' means--
       (A) the Department of Housing and Urban Development; and
       (B) the Department of the Treasury.
       (2) Calendar day.--The term ``calendar day'' means a 
     calendar day other than 1 on which either House is not in 
     session because of an adjournment of more than 3 days to a 
     date certain.
       (3) Commission bill.--The term ``Commission bill'' means 
     only a bill which is introduced as provided under section 
     806, and contains the proposed legislation included in the 
     report submitted to Congress under section 803(a), without 
     modification.
       (4) Program.--The term ``program'' means any activity or 
     function of an agency.

     SEC. 802. ESTABLISHMENT OF COMMISSION.

       (a) Establishment.--There is established the Commission on 
     Housing and Regulatory Accountability and Review (referred to 
     in this title as the ``Commission'').
       (b) Membership.--
       (1) In general.--The Commission shall consist of 15 
     members, of which, not later than 30 days after the date of 
     enactment of this Act--
       (A) 3 shall be appointed by the President;
       (B) 3 shall be appointed by the majority leader of the 
     Senate;
       (C) 3 shall be appointed by the minority leader of the 
     Senate;
       (D) 3 shall be appointed by the Speaker of the House of 
     Representatives; and
       (E) 3 shall be appointed by the minority leader of the 
     House of Representatives.
       (2) Cochairpersons.--The President shall designate 2 
     Cochairpersons from among the members of the Commission. The 
     Cochairpersons may not be affiliated with the same political 
     party.
       (c) Date.--Members of the Commission shall be appointed by 
     not later than 30 days after the date of enactment of this 
     Act.
       (d) Period of Appointment; Vacancies.--Members shall be 
     appointed for the life of the Commission. Any vacancy in the 
     Commission shall not affect its powers, but shall be filled 
     in the same manner as the original appointment.
       (e) Meetings.--
       (1) Initial meeting.--Not later than 30 days after the date 
     on which all members of the Commission have been appointed, 
     the Commission shall hold its first meeting.
       (2) Subsequent meetings.--The Commission shall meet at the 
     call of the Cochairpersons or a majority of its members.
       (f) Quorum.--Eight members of the Commission shall 
     constitute a quorum for purposes of voting, but a quorum is 
     not required for members to meet and hold hearings.

     SEC. 803. DUTIES OF THE COMMISSION.

       (a) In General.--The Commission shall--
       (1) evaluate all agencies and programs within the 
     Department of Housing and Urban Development and the 
     Department of Treasury using the criteria under subsection 
     (c); and
       (2) not later than 18 months after the date of enactment of 
     this Act, submit to Congress with respect to the evaluation 
     under paragraph (1)--
       (A) a plan with recommendations of the agencies and 
     programs that should be realigned or eliminated; and
       (B) proposed legislation to implement the plan described 
     under subparagraph (A).
       (b) Relocation of Federal Employees.--The proposed 
     legislation under subsection (a) shall provide that if the 
     position of an employee of an agency is eliminated as a 
     result of the implementation of the plan under subsection 
     (a)(2), the affected agency shall make reasonable efforts to 
     relocate such employee to another position within the agency 
     or within another Federal agency (including Federal agencies 
     other than the Department of Housing and Urban Development 
     and the Department of the Treasury).
       (c) Criteria.--
       (1) Duplicative.--If 2 or more agencies or programs are 
     performing the same essential function and the function can 
     be consolidated or streamlined into a single agency or 
     program, the Commission shall recommend that the agencies or 
     programs be realigned.
       (2) Wasteful or inefficient.--The Commission may recommend 
     the realignment or elimination of any agency or program that 
     has wasted Federal funds by--
       (A) egregious spending;
       (B) mismanagement of resources and personnel; or
       (C) use of such funds for personal benefit or the benefit 
     of a special interest group.
       (3) Outdated, irrelevant, or failed.--The Commission may 
     recommend the elimination of any agency or program that--
       (A) has completed its intended purpose;
       (B) has become irrelevant; or
       (C) has failed to meet its objectives.

     SEC. 804. POWERS OF THE COMMISSION.

       (a) Hearings.--Subject to subsection (d), the 
     Cochairpersons of the Commission may, for the purpose of 
     carrying out this title--
       (1) hold such hearings, sit and act at such times and 
     places, take such testimony, receive such evidence, and 
     administer such oaths as the chairperson of the Commission 
     considers advisable;
       (2) require, by subpoena or otherwise, the attendance and 
     testimony of such witnesses as the chairperson of the 
     Commission considers advisable; and
       (3) require, by subpoena or otherwise, the production of 
     such books, records, correspondence, memoranda, papers, 
     documents, tapes, and other evidentiary materials relating to 
     any matter under investigation by the Commission.
       (b) Subpoenas.--
       (1) Issuance.--
       (A) In general.--A subpoena may be issued under this 
     section only by--
       (i) the agreement of the Cochairpersons; or
       (ii) the affirmative vote of 8 members of the Commission.
       (B) Signature.--Subpoenas issued under this section may be 
     issued under the signature of both Cochairpersons of the 
     Commission and may be served by any person designated by the 
     Cochairpersons or by a member designated by a majority of the 
     Commission.
       (2) Enforcement.--In the case of contumacy or failure to 
     obey a subpoena issued under this section, the United States 
     district court for the judicial district in which the 
     subpoenaed person resides, is served, or may be found, may 
     issue an order requiring such person to appear at any 
     designated place to testify or to produce documentary or 
     other evidence. Any failure to obey the order of the court 
     may be punished by the court as a contempt of that court.
       (c) Technical Assistance.--Upon the request of the 
     Commission, the head of a Federal agency shall provide such 
     technical assistance to the Commission as the Commission 
     determines to be necessary to carry out its duties.
       (d) Information.--
       (1) In general.--The Commission shall have reasonable 
     access to budgetary, performance or programmatic materials, 
     resources, statistical data, and other information the 
     Commission determines to be necessary to carry out its duties 
     from the Congressional Budget Office, and other agencies and 
     representatives of the executive and legislative branches of 
     the Federal Government. The Cochairpersons shall make 
     requests for such access in writing when necessary.
       (2) Receipt, handling, storage, and dissemination of 
     information.--Information shall only be received, handled, 
     stored, and disseminated by members of the Commission and its 
     staff consistent with all applicable statutes, regulations, 
     and Executive orders.
       (3) Limitation of access to personal tax information.--
     Information requested, subpoenaed, or otherwise accessed 
     under this title shall not include tax data from the United 
     States Internal Revenue Service, the release of which would 
     otherwise be in violation of law.
       (e) Postal Services.--The Commission may use the United 
     States mails in the same manner and under the same conditions 
     as other departments and agencies of the Federal Government.

     SEC. 805. COMMISSION PERSONNEL MATTERS.

       (a) Compensation of Members.--
       (1) Non-federal members.--Except as provided under 
     subsection (b), each member of the Commission who is not an 
     officer or employee of the Federal Government shall not be 
     compensated.
       (2) Federal officers or employees.--All members of the 
     Commission who are officers or employees of the United States 
     shall serve without compensation in addition to that received 
     for their services as officers or employees of the United 
     States.
       (b) Travel Expenses.--The members of the Commission shall 
     be allowed travel expenses, including per diem in lieu of 
     subsistence, at rates authorized for employees of agencies 
     under subchapter I of chapter 57 of title 5, United States 
     Code, while away from their homes or regular places of 
     business in

[[Page 5064]]

     the performance of services for the Commission.
       (c) Staff.--
       (1) In general.--With the approval of the majority of the 
     Commission, the Cochairpersons of the Commission may, appoint 
     an executive director and such other additional personnel as 
     may be necessary to enable the Commission to perform its 
     duties.
       (2) Compensation.--Upon the approval of the Cochairpersons, 
     the executive director may fix the compensation of the 
     executive director and other personnel without regard to 
     chapter 51 and subchapter III of chapter 53 of title 5, 
     United States Code, relating to classification of positions 
     and General Schedule pay rates, except that the rate of pay 
     for the executive director and other personnel may not exceed 
     the maximum rate payable for a position at GS-15 of the 
     General Schedule under section 5332 of such title.
       (3) Personnel as federal employees.--
       (A) In general.--The executive director and any personnel 
     of the Commission who are employees shall be employees under 
     section 2105 of title 5, United States Code, for purposes of 
     chapters 63, 81, 83, 84, 85, 87, 89, 89A, 89B, and 90 of that 
     title.
       (B) Members of commission.--Subparagraph (A) shall not be 
     construed to apply to members of the Commission.
       (d) Detail of Government Employees.--Any Federal Government 
     employee may be detailed to the Commission without 
     reimbursement from the Commission, and such detail shall be 
     without interruption or loss of civil service status or 
     privilege.
       (e) Procurement of Temporary and Intermittent Services.--
     With the approval of the majority of the Commission, the 
     chairperson of the Commission may procure temporary and 
     intermittent services under section 3109(b) of title 5, 
     United States Code, at rates for individuals which do not 
     exceed the daily equivalent of the annual rate of basic pay 
     prescribed for level V of the Executive Schedule under 
     section 5316 of such title.

     SEC. 806. EXPEDITED CONSIDERATION OF REFORM PROPOSALS.

       (a) Introduction and Committee Consideration.--
       (1) Introduction.--The Commission bill language provisions 
     submitted pursuant to section 803(a) shall be introduced in 
     the Senate by the majority leader, or the majority leader's 
     designee, and in the House of Representatives, by the 
     Speaker, or the Speaker's designee. Upon such introduction, 
     the Commission bill shall be referred to the appropriate 
     committees of Congress under paragraph (2). If the Commission 
     bill is not introduced in accordance with the preceding 
     sentence, then any member of Congress may introduce the 
     Commission bill in their respective House of Congress 
     beginning on the date that is the 5th calendar day that such 
     House is in session following the date of the submission of 
     such aggregate legislative language provisions.
       (2) Committee consideration.--
       (A) Referral.--A Commission bill introduced under paragraph 
     (1) shall be referred to any appropriate committee of 
     jurisdiction in the Senate, any appropriate committee of 
     jurisdiction in the House of Representatives, the Committee 
     on the Budget of the Senate and the Committee on the Budget 
     of the House of Representatives. A committee to which a 
     Commission bill is referred under this paragraph may review 
     and comment on such bill, may report such bill to the 
     respective House, and may not amend such bill.
       (B) Reporting.--Not later than 30 calendar days after the 
     introduction of the Commission bill, each Committee of 
     Congress to which the Commission bill was referred shall 
     report the bill.
       (C) Discharge of committee.--If a committee to which is 
     referred a Commission bill has not reported such Commission 
     bill at the end of 30 calendar days after its introduction or 
     at the end of the first day after there has been reported to 
     the House involved a Commission bill, whichever is earlier, 
     such committee shall be deemed to be discharged from further 
     consideration of such Commission bill, and such Commission 
     bill shall be placed on the appropriate calendar of the House 
     involved.
       (b) Expedited Procedure.--
       (1) Consideration.--
       (A) In general.--Not later than 5 calendar days after the 
     date on which a committee has reported a Commission bill or 
     been discharged from consideration of a Commission bill, the 
     majority leader of the Senate, or the majority leader's 
     designee, or the Speaker of the House of Representatives, or 
     the Speaker's designee, shall move to proceed to the 
     consideration of the Commission bill. It shall also be in 
     order for any member of the Senate or the House of 
     Representatives, respectively, to move to proceed to the 
     consideration of the Commission bill at any time after the 
     conclusion of such 5-day period.
       (B) Motion to proceed.--A motion to proceed to the 
     consideration of a Commission bill is highly privileged in 
     the House of Representatives and is privileged in the Senate 
     and is not debatable. The motion is not subject to amendment 
     or to a motion to postpone consideration of the Commission 
     bill. A motion to proceed to the consideration of other 
     business shall not be in order. A motion to reconsider the 
     vote by which the motion to proceed is agreed to or not 
     agreed to shall not be in order. If the motion to proceed is 
     agreed to, the Senate or the House of Representatives, as the 
     case may be, shall immediately proceed to consideration of 
     the Commission bill without intervening motion, order, or 
     other business, and the Commission bill shall remain the 
     unfinished business of the Senate or the House of 
     Representatives, as the case may be, until disposed of.
       (C) Limited debate.--Debate on the Commission bill and on 
     all debatable motions and appeals in connection therewith 
     shall be limited to not more than 10 hours, which shall be 
     divided equally between those favoring and those opposing the 
     Commission bill. A motion further to limit debate on the 
     Commission bill is in order and is not debatable. All time 
     used for consideration of the Commission bill, including time 
     used for quorum calls (except quorum calls immediately 
     preceding a vote) and voting, shall come from the 10 hours of 
     debate.
       (D) Amendments.--No amendment to the Commission bill shall 
     be in order in the Senate and the House of Representatives.
       (E) Vote on final passage.--Immediately following the 
     conclusion of the debate on the Commission bill, the vote on 
     final passage of the Commission bill shall occur.
       (F) Other motions not in order.--A motion to postpone 
     consideration of the Commission bill, a motion to proceed to 
     the consideration of other business, or a motion to recommit 
     the Commission bill is not in order. A motion to reconsider 
     the vote by which the Commission bill is agreed to or not 
     agreed to is not in order.
       (2) Consideration by other house.--If, before the passage 
     by one House of the Commission bill that was introduced in 
     such House, such House receives from the other House a 
     Commission bill as passed by such other House--
       (A) the Commission bill of the other House shall not be 
     referred to a committee and may only be considered for final 
     passage in the House that receives it under subparagraph (C);
       (B) the procedure in the House in receipt of the Commission 
     bill of the other House, with respect to the Commission bill 
     that was introduced in the House in receipt of the Commission 
     bill of the other House, shall be the same as if no 
     Commission bill had been received from the other House; and
       (C) notwithstanding subparagraph (B), the vote on final 
     passage shall be on the Commission bill of the other House.
     Upon disposition of a Commission bill that is received by one 
     House from the other House, it shall no longer be in order to 
     consider the Commission bill that was introduced in the 
     receiving House.
       (c) Rules of the Senate and the House of Representatives.--
     This section is enacted by Congress--
       (1) as an exercise of the rulemaking power of the Senate 
     and the House of Representatives, respectively, and is deemed 
     to be part of the rules of each House, respectively, but 
     applicable only with respect to the procedure to be followed 
     in that House in the case of a Commission bill, and it 
     supersedes other rules only to the extent that it is 
     inconsistent with such rules; and
       (2) with full recognition of the constitutional right of 
     either House to change the rules (so far as they relate to 
     the procedure of that House) at any time, in the same manner, 
     and to the same extent as in the case of any other rule of 
     that House.

     SEC. 807. TERMINATION OF THE COMMISSION.

       The Commission shall terminate 90 days after the date on 
     which the Commission submits the final evaluation and plan 
     report under section 803.

     SEC. 808. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated such sums as may be 
     necessary for carrying out this title for each of the fiscal 
     years 2008 through 2010.
                                 ______
                                 
  SA 4397. Mrs. MURRAY (for herself, Mr. Schumer, Mr. Casey, Mr. Brown, 
Mrs. Clinton, Mr. Menendez, Mr. Kerry, Ms. Klobuchar, Mr. Lautenberg, 
Mr. Obama, Ms. Mikulski, and Mr. Reed) submitted an amendment intended 
to be proposed to amendment SA 4387 submitted by Mr. Dodd (for himself 
and Mr. Shelby) to the bill H.R. 3221, moving the United States toward 
greater energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; as follows:

       On page 58, line 10, strike ``$100,000,000'' and all that 
     follows through ``2008'' on line 11, and insert the 
     following: ``$200,000,000, to remain available until December 
     31, 2008''.
                                 ______
                                 
  SA 4398. Mr. SALAZAR submitted an amendment intended to be proposed 
by

[[Page 5065]]

him to the bill H.R. 3221, moving the United States toward greater 
energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       At the end of title IV, add the following:

     SEC. 402. CREDIT COUNSELING.

       (a) In General.--Entities approved by the Neighborhood 
     Reinvestment Corporation or the Secretary and State housing 
     finance entities receiving funds under this title shall work 
     to identify and coordinate with State and local non-profit 
     organizations operating statewide toll-free foreclosure 
     prevention hotlines, including those that--
       (1) serve as a consumer referral source and data repository 
     for borrowers experiencing some form of delinquency or 
     foreclosure;
       (2) connect callers with local housing counseling agencies 
     approved by the Neighborhood Reinvestment Corporation or the 
     Secretary to assist with working out a positive resolution to 
     their mortgage delinquency or foreclosure; or
       (3) facilitate or offer free assistance to help homeowners 
     to understand their options, negotiate solutions, and find 
     the best resolution for their particular circumstances.
                                 ______
                                 
  SA 4399. Mr. COBURN submitted an amendment intended to be proposed by 
him to the bill H.R. 3221, moving the United States toward greater 
energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       At the appropriate place, insert the following:

     SEC. ___. VETERANS HOUSING.

       (a) Short Title.--This section may be cited as the 
     ``Housing for Heroes Act of 2008''.
       (b) Authority of the Secretary to Reprogram Funds.--
     Notwithstanding any other provision of law, the Secretary of 
     Housing and Urban Development may reprogram any funds 
     appropriated or otherwise made available under this or any 
     other Act for the Department of Housing and Urban Development 
     that are intended to be used for any congressionally directed 
     spending item to provide housing assistance to veterans of 
     the Armed Forces who are eligible for housing assistance 
     under the laws administered by the Secretary.
       (c) Report of the Secretary on Veterans Housing.--Prior to 
     September 30 of each fiscal year beginning with fiscal year 
     2008, the Secretary of Housing and Urban Development shall 
     report annually to Congress and make available on its public 
     Internet website a description of:
       (1) The total number of veterans of the Armed Forces who 
     sought housing assistance under any law administered by the 
     Secretary in the preceding 12 months.
       (2) The total number of veterans of the Armed Forces who 
     received any such housing assistance in the preceding 12 
     months.
       (3) The total number of veterans of the Armed Forces who 
     did not receive such housing assistance due to a lack of 
     funding in the preceding 12 months.
       (4) The total number of section 8 vouchers applied for by 
     veterans of the Armed Forces
       (5) The total number of section 8 vouchers provided to 
     veterans of the Armed Forces who were eligible for such 
     vouchers.
       (6) The total number of section 8 vouchers that could not 
     be provided to veterans of the Armed Forces who were 
     determined eligible for such vouchers within 6 months of that 
     veteran submitting an application pursuant to section 
     8(o)(19) of the United States Housing Act of 1937 (42 U.S.C. 
     1437f(o)(19) due to a lack of funding.
       (7) The total number and cost of congressionally directed 
     spending items in the annual budget of the Department of 
     Housing and Urban Development.
       (8) The number and total amount of congressionally directed 
     spending items in the annual budget of the Department of 
     Housing and Urban Development that have been reprogrammed to 
     support housing assistance for veterans of the Armed Forces.
       (9) A listing of any congressionally directed spending 
     items for which funding was not reprogrammed and an 
     explanation for each why such funds were not reprogrammed if 
     there are any veterans of the Armed Forces who are not 
     receiving housing assistance due to a lack of funding.
       (d) Current Funding.--For fiscal year 2008, the Secretary 
     of Housing and Urban Development may reprogram any 
     unobligated funds appropriated or otherwise made available 
     under any prior Act for the Department of Housing and Urban 
     Development that are intended to be used for any 
     congressionally directed spending item.
       (e) Definitions.--As used in this section--
       (1) the term ``congressionally directed spending item'' has 
     the same meaning given that term under section 521 of the 
     Honest Leadership and Open Government Act of 2007 (Public Law 
     110-81); and
       (2) the term ``section 8 voucher'' means a voucher 
     available to eligible veterans under section 8(o)(19) of the 
     United States Housing Act of 1937 (42 U.S.C. 1437f(o)(19)).
                                 ______
                                 
  SA 4400. Mr. COBURN submitted an amendment intended to be proposed by 
him to the bill H.R. 3221, moving the United States toward greater 
energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       At the appropriate place, insert the following:

     SEC. ___. REPORT ON FEDERAL HOUSING ASSISTANCE PROGRAMS.

       Not later than 2 years after the date of enactment of this 
     Act, the Comptroller General of the United States shall 
     submit to Congress a report that contains--
       (1) a complete list of all programs administered by the 
     Department of Housing and Urban Development that provide 
     housing assistance;
       (2) for each program listed under paragraph (1)--
       (A) the total amount of Federal funds used to carry out 
     each program in the most recent fiscal year for which 
     comparable data is available;
       (B) the proportion of funding spent on direct housing 
     assistance for each program in the most recent fiscal year 
     and the proportion spent on administration, counseling, and 
     other activities not directly related to housing support;
       (C) the amount of improper payments or fraud identified or 
     estimated in each program in the most recent fiscal year; and
       (D) the findings of any performance reviews of 
     effectiveness with respect to achieving the goals of the 
     program conducted by the Director of the Office of Management 
     and Budget, the Comptroller General, or other agencies of 
     each program within the previous 10 years (noting if no such 
     review was conducted);
       (3) a description of the funding formula for each housing 
     grant program administered by the Department of Housing and 
     Urban Development with recommendations to ensure better 
     equity in distribution and targeting of such funds to assist 
     those without permanent housing;
       (4) a description of the amounts the Federal Government has 
     spent on housing assistance over the past 25 years and how 
     the number of those in the country without permanent housing 
     today compares to the same number 25 years ago; and
       (5) as of the date of the completion of the report--
       (A) the number of employees of the Department of Housing 
     and Urban Development, including contractors and other 
     individuals whose salary is paid in full or part by the 
     Department; and
       (B) the number of individuals who receive housing 
     assistance from the Department.
                                 ______
                                 
  SA 4401. Mr. SANDERS submitted an amendment intended to be proposed 
by him to the bill H.R. 3221, moving the United States toward greater 
energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       At the appropriate place, insert the following new section:

     SEC. __. NATIONAL CONSUMER CREDIT USURY RATE.

       Section 107 of the Truth in Lending Act (15 U.S.C. 1606) is 
     amended by adding at the end the following:
       ``(f) National Consumer Credit Usury Rate.--The annual 
     percentage rate applicable to any extension of credit may not 
     exceed by more than 8 percentage points the rate established 
     under section 6621(a)(2) of the Internal Revenue Code of 
     1986, as determined by the Board.''.
                                 ______
                                 
  SA 4402. Mr. MENENDEZ submitted an amendment intended to be proposed 
by him to the bill H.R. 3221, moving the United States toward greater 
energy

[[Page 5066]]

independence and security, developing innovative new technologies, 
reducing carbon emissions, creating green jobs, protecting consumers, 
increasing clean renewable energy production, and modernizing our 
energy infrastructure, and to amend the Internal Revenue Code of 1986 
to provide tax incentives for the production of renewable energy and 
energy conservation; which was ordered to lie on the table; as follows:

       At the end of title IV, insert the following:

     SEC. __. FINANCIAL EDUCATION AND COUNSELING ASSISTANCE ACT OF 
                   2007.

       (a) Short Title.--This section may be cited as the 
     ``Financial Education and Counseling Assistance Act of 
     2007''.
       (b) Financial Education and Counseling.--
       (1) Demonstration program.--Section 106 of the Housing and 
     Urban Development Act of 1968 (12 U.S.C. 1701x) is amended by 
     adding at the end the following:
       ``(g) Financial Education and Counseling.--
       ``(1) Purposes.--The purposes of this subsection are to--
       ``(A) increase financial education and counseling services 
     available to homeowners and prospective homebuyers;
       ``(B) assist homeowners and prospective homebuyers to 
     develop monthly budgets, build personal savings, finance or 
     plan for major purchases, reduce their debt, improve their 
     financial stability, and set and reach their financial goals;
       ``(C) help homeowners and prospective homebuyers understand 
     their credit histories and its relationship to their credit 
     score, so as to improve their credit score;
       ``(D) educate homeowners and prospective homebuyers about 
     the options available to build savings or plan for 
     retirement; and
       ``(E) provide financial education and counseling for 
     homeowners and prospective homebuyers seeking to understand 
     or improve their credit, savings, bill payments, or other 
     personal financial needs.
       ``(2) Authority.--The Secretary of Housing and Urban 
     Development shall carry out a grant program to assist 
     eligible organizations to provide financial education and 
     counseling services to homeowners and prospective homebuyers.
       ``(3) Grants.--
       ``(A) In general.--The Secretary shall make grants to 
     eligible organizations to enable such organization to provide 
     a range of financial education and counseling services to 
     homeowners and prospective homebuyers.
       ``(B) Selection.--The Secretary shall select organizations 
     to receive assistance under this subsection based on their 
     experience and ability to provide financial education and 
     counseling services to homeowners and prospective homebuyers.
       ``(C) Preference.--The Secretary shall give preference to 
     established community-based financial education and 
     counseling organizations capable of providing in-person 
     services.
       ``(4) Eligible organizations.--To be eligible to receive a 
     grant under this subsection, an eligible organization shall 
     be a--
       ``(A) housing counseling agency certified by the Secretary 
     under subsection (e);
       ``(B) nonprofit organization organized under section 
     501(c)(3) of the Internal Revenue Code;
       ``(C) State, local, or tribal government agency; or
       ``(D) community development financial institution (as 
     defined in section 103(5) of the Community Development 
     Banking and Financial Institutions Act of 1994 (12 U.S.C. 
     4702(5)) or a credit union.
       ``(5) Eligible uses.--A grant awarded to an eligible 
     organization under this subsection shall be used to provide a 
     range of financial education and counseling services, 
     including--
       ``(A) assisting in the expansion of mortgage and housing-
     related financial counseling services;
       ``(B) providing information on important financial topics 
     to homeowners and prospective homebuyers; and
       ``(C) assisting homeowners and prospective homebuyers to--
       ``(i) develop sustainable monthly budgets;
       ``(ii) understand their credit history and their credit 
     scores, so as to improve their credit score;
       ``(iii) develop a plan to manage their bills, reduce their 
     debt, and improve their savings; and
       ``(iv) set and reach their financial goals.
       ``(6) Counseling activities.--
       ``(A) Regulations.--The Secretary shall develop and issue 
     guidelines and regulations to carry out the financial 
     education and counseling program established under this 
     subsection.
       ``(B) Content of regulations.--The guidelines and 
     regulations required under subparagraph (A) shall be modeled 
     on the regulations issued by the Secretary pursuant to the 
     housing counseling program under subsection (c) and shall 
     require each eligible organization under this subsection to--
       ``(i) conduct a preliminary interview with a homeowner or 
     prospective homebuyer to determine the financial needs of 
     such homeowner or renter;
       ``(ii) develop a financial plan tailored to meet the 
     financial needs of such homeowner or prospective homebuyer; 
     and
       ``(iii) help each such homeowner or prospective homebuyer 
     achieve their financial goals.
       ``(7) Coordination with the financial literacy and 
     education commission.--In developing the guidelines and 
     regulations required under paragraph (6) and in carrying out 
     the grant program established under this subsection, the 
     Secretary shall seek advice from and work in coordination 
     with the Financial Literacy and Education Commission 
     established under section 513 of the Fair and Accurate Credit 
     Transactions Act of 2003 (20 U.S.C. 9702) in order to avoid 
     duplication and to utilize the resources and experience of 
     the Commission.
       ``(8) Outreach.--
       ``(A) To individuals.--The Secretary, in cooperation with 
     eligible organizations, shall--
       ``(i) carry out outreach efforts to ensure that homeowners 
     and prospective homebuyers are aware of the financial 
     education and counseling opportunities under this subsection; 
     and
       ``(ii) make an special effort to serve individuals who--

       ``(I) qualify for the earned income tax credit under 
     section 32 of the Internal Revenue Code;
       ``(II) have a low credit score, damaged credit, or are 
     without sufficient data to create a credit score;
       ``(III) are in danger of filing for bankruptcy;
       ``(IV) are subject to, or are in danger of, becoming 
     subject to foreclosure proceedings; and
       ``(V) have low levels of personal saving, low net-worth, or 
     high levels of debt.

       ``(B) To grantees.--The Secretary shall also make an effort 
     to publish grant opportunities under this subsection to 
     eligible organizations who may not typically seek out such 
     Federal funding.
       ``(9) Study and report on effectiveness and impact.--
       ``(A) In general.--Not later than 2 years after the date of 
     enactment of the Financial Education and Counseling 
     Assistance Act of 2007, the Inspector General of the 
     Department of Housing and Urban Development shall conduct a 
     study and report to the Committee on Banking, Housing, and 
     Urban Affairs of the Senate and the Committee on Financial 
     Services of the House of Representatives on the effectiveness 
     and impact of the grant program established under this 
     subsection.
       ``(B) Content of study.--The study required under 
     subparagraph (A) shall include the following:
       ``(i) The effectiveness of the grant program established 
     under this subsection in improving the financial situation of 
     homeowners and prospective homebuyers served by the grant 
     program.
       ``(ii) The impact of the financial education and counseling 
     services provided under this subsection on reducing debt, 
     building savings, and improving the overall financial well-
     being of homeowners and prospective homebuyers served by the 
     grant program.
       ``(iii) An evaluation of the effectiveness and quality of 
     the counselors providing financial education and counseling 
     services under the grant program.
       ``(10) Authorization of appropriations.--There are 
     authorized to be appropriated such sums as are necessary to 
     carry out this subsection.''.
       (2) Certification of financial counselors.--Section 
     106(e)(1) of the Housing and Urban Development Act of 1968 
     (12 U.S.C. 1701x(e)(1)) is amended by striking ``(c), or 
     (d),'' and inserting ``(c), (d), or (g)''.
                                 ______
                                 
  SA 4403. Mr. KERRY (for himself and Ms. Snowe) submitted an amendment 
intended to be proposed by him to the bill H.R. 3221, moving the United 
States toward greater energy independence and security, developing 
innovative new technologies, reducing carbon emissions, creating green 
jobs, protecting consumers, increasing clean renewable energy 
production, and modernizing our energy infrastructure, and to amend the 
Internal Revenue Code of 1986 to provide tax incentives for the 
production of renewable energy and energy conservation; which was 
ordered to lie on the table; as follows:

       At the end, insert the following:

           TITLE VIII--NATIONAL AFFORDABLE HOUSING TRUST FUND

     SEC. 801. SHORT TITLE.

       This title may be cited as the ``National Affordable 
     Housing Trust Fund Act of 2008''.

     SEC. 802. NATIONAL AFFORDABLE HOUSING TRUST FUND.

       (a) In General.--Title II of the Cranston-Gonzalez National 
     Affordable Housing Act (42 U.S.C. 12721 et seq.) is amended 
     by adding at the end the following new subtitle:

          ``Subtitle G--National Affordable Housing Trust Fund

     ``SEC. 291. PURPOSES.

       ``The purposes of this subtitle are--
       ``(1) to address the national shortage of housing that is 
     affordable to low-income

[[Page 5067]]

     families by creating a permanently appropriated fund, with 
     dedicated sources of funding, to finance additional housing 
     activities, without supplanting existing housing 
     appropriations or existing State and local funding for 
     affordable housing;
       ``(2) to enable rental housing to be built, for families 
     with the greatest economic need, in mixed-income settings and 
     in areas with the greatest economic opportunities;
       ``(3) to promote ownership of one-to-four family owner-
     occupied housing by low-income families; and
       ``(4) to construct, rehabilitate, and preserve at least 
     1,500,000 affordable dwelling units over the next decade.

     ``SEC. 292. TRUST FUND.

       ``(a) Establishment.--There is established in the Treasury 
     of the United States a trust fund to be known as the National 
     Affordable Housing Trust Fund.
       ``(b) Deposits to Trust Fund.--There shall be authorized to 
     be appropriated to the Trust Fund such sums as necessary to 
     carry out this subtitle for fiscal years 2009 and 2010.
       ``(c) Expenditures From Trust Fund.--Amounts in the Trust 
     Fund shall be available to the Secretary of Housing and Urban 
     Development, and are hereby appropriated, for providing 
     assistance under this subtitle.
       ``(d) Federal Assistance.--All assistance provided using 
     amounts in the Trust Fund shall be considered to be Federal 
     financial assistance.

     ``SEC. 293. ALLOCATIONS FOR STATES, INDIAN TRIBES, INSULAR 
                   AREAS, AND PARTICIPATING LOCAL JURISDICTIONS.

       ``(a) Determination of Amount Available for Fiscal Year.--
     For fiscal year 2009 and for each fiscal year thereafter, the 
     Secretary shall determine the total amount available from the 
     Trust Fund pursuant to section 292(c) for assistance under 
     this subtitle and shall use such amount to provide such 
     assistance for such fiscal year.
       ``(b) Allocation.--For each such fiscal year, of such total 
     amount available from the Trust Fund, the Secretary shall 
     allocate for use under section 294--
       ``(1) 40 percent for States, Indian tribes, and insular 
     areas; and
       ``(2) 60 percent for participating local jurisdictions.

     ``SEC. 294. ASSISTANCE FROM TRUST FUND.

       ``(a) Affordable Housing Needs Formula.--
       ``(1) Establishment and factors.--The Secretary shall 
     establish a formula to allocate amounts made available for a 
     fiscal year for assistance under this subtitle among States, 
     all Indian tribes, insular areas, and participating local 
     jurisdictions based on the relative needs of such entities, 
     for funds to increase the supply of decent quality affordable 
     housing. The formula shall be based upon a comparison of the 
     following factors with respect to each State, Indian tribes, 
     each insular area, and each participating local jurisdiction:
       ``(A) The ratio of the population of the State, Indian 
     tribes, insular area, or participating jurisdiction, to the 
     aggregate population of all States, Indian tribes, insular 
     areas, and participating jurisdictions.
       ``(B) The percentage of families in the jurisdiction of the 
     State, of Indian tribes, or of the insular area or 
     participating jurisdiction that live in substandard housing.
       ``(C) The percentage of families in the jurisdiction of the 
     State, of Indian tribes, or of the insular area or 
     participating jurisdiction that pay more than 50 percent of 
     their annual income for housing costs.
       ``(D) The percentage of persons in the jurisdiction of the 
     State, of Indian tribes, or of the insular area or 
     participating jurisdiction having an income at or below the 
     poverty line.
       ``(E) The cost of constructing or carrying out 
     rehabilitation of housing in the jurisdiction of the State, 
     of Indian tribes, or of the insular area or participating 
     jurisdiction.
       ``(F) The percentage of the population of the State, of 
     Indian tribes, or of the insular area or participating 
     jurisdiction that resides in counties having extremely low 
     vacancy rates.
       ``(G) The percentage of housing stock in the jurisdiction 
     of the State, of Indian tribes, or of the insular area or 
     participating jurisdiction that is extremely old housing.
       ``(H) For the jurisdiction of a State, of Indian tribes, or 
     of an insular area or participating jurisdiction that has an 
     extremely low percentage of affordable rental housing, the 
     extent to which the State, Indian tribes, or the insular area 
     or participating jurisdiction has in the preceding fiscal 
     year increased the percentage of rental housing within its 
     jurisdiction that is affordable housing.
       ``(I) The relationship between the median family income for 
     the area, as determined by the Secretary, and fair market 
     rent.
       ``(J) Any other factors that the Secretary determines to be 
     appropriate.
       ``(2) Failure to establish.--If, in any fiscal year 
     referred to in section 293(a), the regulations establishing 
     the formula required under paragraph (1) of this subsection 
     have not been issued by the date that the Secretary 
     determines the total amount available from the Trust Fund for 
     assistance under this subtitle for such fiscal year pursuant 
     to section 292(c), or there has been enacted before such date 
     a joint resolution expressly disapproving the use of the 
     formula required under paragraph (1) and submitted to the 
     Congress pursuant to paragraph (3), for purposes of such 
     fiscal year--
       ``(A) section 293(b), paragraphs (2) and (3) of subsection 
     (b) of this section, and subsection (c) of this section shall 
     not apply;
       ``(B) the allocation for Indian tribes shall be such amount 
     as the Secretary shall establish; and
       ``(C) the formula amount for each State, insular area, or 
     participating local jurisdiction shall be determined by 
     applying, for such State, insular area, or participating 
     local jurisdiction, the percentage that is equal to the 
     percentage of the total amounts made available for such 
     fiscal year for allocation under subtitle A of this title (42 
     U.S.C. 12741 et seq.) that are allocated in such year, 
     pursuant to such subtitle, to such State, insular area, or 
     participating local jurisdiction, respectively, and the 
     allocation for each State, insular area, or participating 
     jurisdiction, for purposes of subsection (e) shall, except as 
     provided in subsection (d), be the formula amount for the 
     State, insular area, or participating jurisdiction, 
     respectively.
       ``(3) Submission to congress.--Notwithstanding any other 
     provision of this subtitle, any formula established by the 
     Secretary pursuant to this subsection shall be submitted to 
     the Committee on Financial Services of the House of 
     Representatives and the Committee on Banking, Housing, and 
     Urban Affairs of the Senate not less than 120 days before 
     application of the formula for purposes of determining 
     formula amounts under subsection (b) for a fiscal year. Such 
     submission shall be accompanied by a detailed explanation of 
     the factors under the formula and anticipated effects of the 
     formula.
       ``(b) Formula Amount.--
       ``(1) In general.--For each fiscal year referred to in 
     section 293(a), the Secretary shall determine the formula 
     amount under this subsection for each State, for Indian 
     tribes, for each insular area, and for each participating 
     local jurisdiction.
       ``(2) States, indian tribes, and insular areas.--The 
     formula amount for each State, for Indian tribes, and for 
     each insular area shall be the amount determined for such 
     State, for Indian tribes, or for such insular area by 
     applying the formula under subsection (a) of this section to 
     the total amount allocated under section 293(b)(1) for all 
     States, Indian tribes, and insular areas for the fiscal year.
       ``(3) Participating local jurisdictions.--The formula 
     amount for each participating local jurisdiction shall be the 
     amount determined for such participating local jurisdiction 
     by applying the formula under subsection (a) of this section 
     to the total amount allocated under section 293(b)(2) for all 
     participating local jurisdictions for the fiscal year.
       ``(4) Notice.--For each fiscal year referred to in section 
     293(a), not later than 60 days after the date that the 
     Secretary determines the total amount available from the 
     Trust Fund for such fiscal year pursuant to section 292(c) 
     for assistance under this subtitle, the Secretary shall cause 
     to be published in the Federal Register a notice that such 
     amounts shall be so available.
       ``(c) Allocation Based on Affordable Housing Needs 
     Formula.--The allocation under this subsection for a State, 
     for Indian tribes, for an insular area, or for a local 
     participating jurisdiction for a fiscal year shall be 
     determined as follows:
       ``(1) States.--Subject to subsection (d), the allocation 
     for a State shall be as follows:
       ``(A) Minimum amount.--If the formula amount determined 
     under subsection (b)(2) for the State for the fiscal year is 
     less than 1 percent of the total amount allocated for such 
     fiscal year under section 293(b)(1), the allocation for the 
     State shall be 1 percent of the total amount allocated for 
     such fiscal year under section 293(b)(1).
       ``(B) Formula amount.--If the formula amount determined 
     under subsection (b)(2) for the State for the fiscal year is 
     0.5 percent or more of the total amount allocated for such 
     fiscal year under section 293(b)(1), the allocation for the 
     State shall be the formula amount for the State, except 
     that--
       ``(i) the Secretary shall reduce such formula amounts for 
     all States whose allocations are determined under this 
     subparagraph on a pro rata basis, except as provided in 
     clause (ii), by the amount necessary to account for any 
     increases from the formula amount for allocations made under 
     subparagraph (A), so that the total of the allocations for 
     all States pursuant to this paragraph is equal to the 
     aggregate of the formula amounts under subsection (b)(2) for 
     all States; and
       ``(ii) no reduction pursuant to clause (i) for any State 
     may reduce the formula amount for the State to less than 0.5 
     percent of such total amount allocated for such fiscal year.
       ``(2) Indian tribes and insular areas.--The allocation for 
     Indian tribes and for each insular area shall be the formula 
     amount for Indian tribes or for the insular area, 
     respectively, determined under subsection (b), as applicable.
       ``(3) Participating local jurisdictions.--Subject to 
     subsection (d), the allocation for each participating local 
     jurisdiction shall be the formula amount for the jurisdiction 
     determined under subsection (b).

[[Page 5068]]

       ``(d) Allocation Exception for Years in Which Less Than $2 
     Billion Is Available.--If, for any fiscal year, the total 
     amount available pursuant to section 293(a) for assistance 
     under this subtitle is less than $2,000,000,000--
       ``(1) for each participating local jurisdiction having a 
     formula amount for such fiscal year of less than $750,000, 
     the allocation shall be $0, except that the allocation for 
     such a jurisdiction for such fiscal year shall be the formula 
     amount for the jurisdiction for such fiscal year if--
       ``(A) the Secretary finds that the jurisdiction has 
     demonstrated a capacity to carry out provisions of this 
     subtitle and the State in which such jurisdiction is located 
     has authorized the Secretary to transfer to the jurisdiction 
     a portion of the State's allocation that is equal to or 
     greater than the difference between the jurisdiction's 
     formula amount and $750,000, or the State or jurisdiction has 
     made available such an amount from the State's or 
     jurisdiction's own sources available for use by the 
     jurisdiction in accordance with this subtitle; or
       ``(B) the formula amount for such jurisdiction for such 
     fiscal year is an amount that is greater than the formula 
     amount for such fiscal year for any other participating local 
     jurisdiction that is located in the same State; and
       ``(2) in the case of any jurisdiction whose allocation is 
     $0 by operation of paragraph (1), the allocation for the 
     State in which such participating local jurisdiction is 
     located shall be increased by the amount of the formula 
     amount for the participating local jurisdiction.
     Any adjustments pursuant to paragraphs (1) and (2) shall be 
     made notwithstanding the allocation percentages under section 
     293(b).
       ``(e) Grant Awards.--For each fiscal year referred to in 
     section 293(a), using the amounts made available to the 
     Secretary from the Trust Fund for such fiscal year under 
     section 292(c), the Secretary shall, subject to subsection 
     (f), make a grant to each State, insular area, and 
     participating local jurisdiction in the amount of the 
     allocation under subsection (a)(2), (c), or (d), as 
     applicable, for the State, area, or jurisdiction, 
     respectively.
       ``(f) Matching Requirement.--
       ``(1) In general.--Each grantee for a fiscal year shall 
     contribute to eligible activities funded with Trust Fund 
     grant amounts, or require the contribution to such eligible 
     activities by recipients of such Trust Fund grant amounts of, 
     in addition to any such grant amounts, not less than the 
     following amount:
       ``(A) State, local, or private resources.--To the extent 
     that such contributed amounts are derived from State, local, 
     or private resources, 12.5 percent of such grant amounts.
       ``(B) Federal amounts.--To the extent that such contributed 
     amounts are derived from State- or locally-controlled amounts 
     from Federal assistance, or from amounts made available under 
     the affordable housing program of a Federal Home Loan Bank 
     pursuant to section 10(j) of the Federal Home Loan Bank Act 
     (12 U.S.C. 1430(j)), 25 percent of such grant amounts.

     Nothing in this paragraph may be construed to prevent a 
     grantee or recipient from complying with this paragraph only 
     by contributions in accordance with subparagraph (A), only by 
     contributions in accordance with subparagraph (B), or by a 
     combination of such contributions.
       ``(2) Reduction or waiver for recipients in fiscal 
     distress.--The Secretary may reduce or waive the requirement 
     under paragraph (1) with respect to any grantee that the 
     Secretary determines, pursuant to such demonstration by the 
     recipient as the Secretary shall require, is in fiscal 
     distress. The Secretary shall make determinations regarding 
     fiscal distress for purposes of this paragraph in the same 
     manner, and according to the same criteria, as fiscal 
     distress is determined with respect to jurisdictions under 
     section 220(d) (42 U.S.C. 12750(d)).
       ``(3) Qualification of services funding for match.--For 
     purposes of meeting the requirements of paragraph (1), 
     amounts that a grantee, recipient, or other governmental or 
     private agency or entity commits to contribute to provide 
     services to residents of affordable housing provided using 
     grant amounts under this subtitle, by entering into a binding 
     commitment for such contribution as the Secretary shall 
     require, shall be considered contributions to eligible 
     activities. Amounts to be considered eligible contributions 
     under this paragraph shall not exceed 33 percent of the total 
     cost of the eligible activity.
       ``(4) Reduction or waiver for certain activities.--With 
     respect to Trust Fund grant amounts made available for a 
     fiscal year, the Secretary shall reduce or waive the amount 
     of contributions otherwise required under paragraph (1) to be 
     made with respect to eligible activities to be carried out 
     with such grant amounts and for which any variance from 
     zoning laws or other waiver of regulatory requirements was 
     approved by the local jurisdiction. Such reduction may be 
     implemented in the year following the year in which such 
     activities are funded with Trust Fund grant amounts.
       ``(5) Waiver for disaster areas.--In the case of any area 
     that is subject to a declaration by the President of a major 
     disaster or emergency under the Robert T. Stafford Disaster 
     Relief and Emergency Assistance Act (42 U.S.C. 5121), the 
     Secretary shall, for the fiscal year following such 
     declaration, waive the requirement under paragraph (1) with 
     respect to any eligible activities to be carried out in such 
     area.
       ``(g) Competitive Grants for Indian Tribes.--For each 
     fiscal year referred to in section 293(a), the Secretary 
     shall, using amounts allocated for Indian tribes pursuant to 
     subsection (a)(2)(B) or (c)(2), as applicable, and subject to 
     subsection (f), make grants to Indian tribes on a competitive 
     basis, based upon such criteria as the Secretary shall 
     establish, which shall include the factors specified in 
     section 295(c)(2)(B).
       ``(h) Use by State of Unused Funds of Local 
     Jurisdictions.--If any participating local jurisdiction for 
     which an allocation is made for a fiscal year pursuant to 
     this section notifies the Secretary of an intent not to use 
     all or part of such funds, any such funds that will not be 
     used by the jurisdiction shall be added to the grant award 
     under subsection (e) for the State in which such jurisdiction 
     is located.
       ``(i) Competitive Grants for Areas Without Allocation Plans 
     and Recipients With Insufficient Matching Contributions.--
       ``(1) Available amounts.--For a fiscal year, the following 
     amounts shall be available for grants under this subsection:
       ``(A) Allocation for areas not submitting allocation 
     plans.--With respect to each State, insular area, or 
     participating local jurisdiction that has not, before the 
     expiration of the 12-month period beginning upon the date of 
     the publication of the notice of funding availability for 
     such fiscal year under subsection (b)(4), submitted to and 
     had approved by the Secretary an allocation plan for such 
     fiscal year meeting the requirements of section 295, the 
     amount of the allocation for such State, insular area, or 
     participating local jurisdiction for such fiscal year 
     determined under this section.
       ``(B) Unmatched portion of allocation.--With respect to any 
     grantee for which the Trust Fund grant amount awarded for 
     such fiscal year is reduced from the amount of the allocation 
     determined under this section for the grantee by reason of 
     failure comply with the requirements under subsection (f), 
     the amount by which such allocation for the grantee for the 
     fiscal year exceeds the Trust Fund grant amount for the 
     grantee for the fiscal year.
       ``(C) Uncommitted amounts.--Any Trust Fund grant amounts 
     for a fiscal year that are not committed for use for eligible 
     activities before the expiration of the 24-month period 
     beginning upon the date of the publication of the notice of 
     availability of amounts under subsection (b)(4) for such 
     fiscal year.
       ``(D) Unused amounts.--Any Trust Fund grant amounts for 
     which the grantee notifies the Secretary that such funds will 
     not be used under this subtitle.
       ``(2) Notice.--For each fiscal year, not later than 60 days 
     after the date that the Secretary determines that the amounts 
     described in paragraph (1) shall be available for grants 
     under this subsection, the Secretary shall cause to be 
     published in the Federal Register a notice that such amounts 
     shall be so available.
       ``(3) Applications.--The Secretary shall provide for 
     nonprofit and public entities (and consortia thereof, which 
     may include regional consortia of units of local government) 
     to submit applications, during the 9-month period beginning 
     upon publication of a notice of funding availability under 
     paragraph (2) for a fiscal year, for a grant of all or a 
     portion of the amounts referred to in paragraph (1) for such 
     fiscal year. Such an application shall include a 
     certification that the applicant will comply with all 
     requirements of this subtitle applicable to a grantee under 
     this subsection.
       ``(4) Selection criteria.--The Secretary shall, by 
     regulation, establish criteria for selecting applicants that 
     meet the requirements of paragraph (3) for funding under this 
     subsection. Such criteria shall give priority to applications 
     that provide that grant amounts under this subsection will be 
     used for eligible activities relating to affordable housing 
     that is located in the State or insular area, as applicable, 
     for which such grant funds were originally allocated under 
     this section.
       ``(5) Award and use of grant assistance.--
       ``(A) Award.--Subject only to the absence of applications 
     meeting the requirements of paragraph (3), upon the 
     expiration of the period referred to in such paragraph, the 
     Secretary shall select an applicant or applicants under this 
     subsection to receive the amounts available under paragraph 
     (1) and shall make a grant or grants to such applicant or 
     applicants. The selection shall be based upon the criteria 
     established under paragraph (4).
       ``(B) Use.--Amounts from a grant under this subsection 
     shall be Trust Fund grant amounts for purposes of this 
     subtitle.

     ``SEC. 295. ALLOCATION PLANS.

       ``(a) In General.--Each grantee that is a State, insular 
     area, participating local jurisdiction, or grantee under 
     section 294(i) for a fiscal year, shall establish an 
     allocation plan

[[Page 5069]]

     in accordance with this section for the distribution of Trust 
     Fund grant amounts provided to the grantee for such fiscal 
     year, which shall be a plan that--
       ``(1) provides for use of such amounts in accordance with 
     section 296;
       ``(2) is based on priority housing needs, including 
     priority housing needs in rural areas, as determined by the 
     grantee; and
       ``(3) is consistent with the comprehensive housing 
     affordability strategy under section 105 (42 U.S.C. 12705) or 
     any applicable consolidated submission used for purposes of 
     applying for other community planning and development and 
     housing assistance programs administered by the Secretary, 
     for the applicable State, insular area, jurisdiction, or 
     grantee under section 294(i).
       ``(b) Establishment.--In establishing an allocation plan, a 
     grantee described in subsection (a) shall notify the public 
     of the establishment of the plan, provide an opportunity for 
     public comments regarding the plan, consider any public 
     comments received, and make the completed plan available to 
     the public.
       ``(c) Contents.--Each allocation plan of a grantee 
     described in subsection (a) shall comply with the following 
     requirements:
       ``(1) Application requirements for eligible recipients.--
     The allocation plan shall set forth the requirements for 
     eligible recipients to apply to the grantee to receive 
     assistance from Trust Fund grant amounts of the grantee for 
     use for eligible activities, including a requirement that 
     each such application include--
       ``(A) a description of the eligible activities to be 
     conducted using such assistance;
       ``(B) a certification by the eligible recipient applying 
     for such assistance that any housing assisted with such grant 
     amounts will comply with--
       ``(i) all of the requirements under this subtitle, 
     including the targeting requirements under section 296(c) and 
     the affordable housing requirements under section 297;
       ``(ii) section 808(d) of the Fair Housing Act (relating to 
     the obligation to affirmatively further fair housing); and
       ``(iii) section 504 of the Rehabilitation Act of 1973 
     (relating to prohibition of discrimination on the basis of 
     disability); and
       ``(C) in the case of any recipient who has received 
     assistance from Trust Fund grant amounts in any previous 
     fiscal year, a report on the progress made in carrying out 
     the eligible activities funded with such previous assistance.
       ``(2) Selection process and criteria for assistance.--
       ``(A) Selection process.--The allocation plan shall set 
     forth a process for the grantee to select eligible activities 
     meeting the grantee's priority housing needs for funding with 
     Trust Fund grant amounts of the grantee, which shall comply 
     with requirements for such process as the Secretary shall, by 
     regulation, establish.
       ``(B) Selection criteria.--The allocation plan shall set 
     forth the factors for consideration in selecting among 
     applicants that meet the application requirements established 
     pursuant to paragraph (1), which shall provide for geographic 
     diversity among eligible activities to be assisted with Trust 
     Fund grant amounts of the grantee and shall include--
       ``(i) the merits of the proposed eligible activity of the 
     applicant, including the extent to which the activity 
     addresses housing needs identified in the allocation plan of 
     the grantee and the applicable comprehensive housing 
     affordability strategy or consolidated submission referred to 
     in subsection (a)(3);
       ``(ii) the experience of the applicant, including its 
     principals, in carrying out projects similar to the proposed 
     eligible activity;
       ``(iii) the ability of the applicant to obligate grant 
     amounts for the proposed eligible activities and to undertake 
     such activities in a timely manner;
       ``(iv) the extent of leveraging of funds by the applicant 
     from private and other non-Federal sources for carrying out 
     the eligible activities to be funded with Trust Fund grant 
     amounts, including assistance made available under section 8 
     of the United States Housing Act of 1937 (42 U.S.C. 1437f) 
     that is devoted to the project that contains the affordable 
     housing to be assisted with such assistance;
       ``(v) the extent of local assistance that will be provided 
     in carrying out the eligible activities, including financial 
     assistance;
       ``(vi) the efficiency of total project fund use as measured 
     by the cost per unit of the proposal, as adjusted by factors 
     which shall include whether the funding with Trust Fund grant 
     amounts is for new construction, rehabilitation, 
     preservation, or homeownership assistance, whether the 
     project involves supportive housing, differences in 
     construction and rehabilitation costs in different areas of 
     the grantee, and other appropriate adjustments;
       ``(vii) the degree to which the project in which the 
     affordable housing will be located will have residents of 
     various incomes;
       ``(viii) the extent of employment and other economic 
     opportunities for low-income families in the area in which 
     the housing will be located;
       ``(ix) the extent to which the applicant demonstrates the 
     ability to maintain dwelling units as affordable housing 
     through the use of assistance made available under this 
     subtitle, assistance leveraged from non-Federal sources, 
     assistance made available under section 8 of the United 
     States Housing Act of 1937 (42 U.S.C. 1437f), State or local 
     assistance, programs to increase tenant income, cross-
     subsidization, and any other resources;
       ``(x) the extent to which the applicant demonstrates that 
     the county in which the housing is to be located is 
     experiencing an extremely low vacancy rate;
       ``(xi) the extent to which the percentage of the housing 
     located in such county that is extremely old housing exceeds 
     35 percent;
       ``(xii) the extent to which the housing assisted with the 
     grant amounts will be accessible to persons with 
     disabilities;
       ``(xiii) the extent to which the applicant demonstrates 
     that the affordable housing assisted with the grant amounts 
     will be located in proximity to public transportation, job 
     opportunities, child care, and community revitalization 
     projects;
       ``(xiv) the extent to which the applicant has provided that 
     assistance from grant amounts will be used for eligible 
     activities relating to housing located in census tracts in 
     which the number of families having incomes less than the 
     poverty line is less than 20 percent;
       ``(xv) the extent to which the housing assisted with grant 
     amounts will comply with energy efficiency standards and the 
     national Green Communities criteria checklist for residential 
     construction that provides criteria for the design, 
     development, and operation of affordable housing, as the 
     Secretary shall by regulation provide; and
       ``(xvi) the extent to which the design, construction, and 
     operation of the housing assisted with grant amounts reduces 
     utility costs for residents and thereby reduces their total 
     housing cost.
     A grantee may allocate a portion of funds under this section 
     for use by such grantee for eligible activities pursuant to 
     the selection process under subparagraph (A).
       ``(3) Use for first responders and teachers.--To the extent 
     that Trust Fund grant amounts of a grantee are made available 
     for eligible activities involving one- to four-family owner-
     occupied housing, the grantee may give preference in the use 
     of such grant amounts to eligible activities relating to 
     affordable housing for first responders, public safety 
     officers, teachers, and other public employees who have 
     family incomes such that such use of the grant amounts 
     complies with the requirements under section 296(c).
       ``(4) Performance goals, benchmarks, and timetables.--The 
     allocation plan shall include performance goals, benchmarks, 
     and timetables for the grantee for the conducting of eligible 
     activities with Trust Fund grant amounts that comply with 
     requirements and standards for such goals, benchmarks, and 
     timetables as the Secretary shall, by regulation, establish.
       ``(d) Review and Approval by Secretary.--
       ``(1) Submission.--A grantee described in subsection (a) 
     shall submit an allocation plan for the fiscal year for which 
     the grant is made to the Secretary not later than the 
     expiration of the 6-month period beginning upon the notice of 
     funding availability under section 294(b)(4) for such fiscal 
     year amounts.
       ``(2) Review and approval or disapproval.--The Secretary 
     shall review and approve or disapprove an allocation plan not 
     later than the expiration of the 3-month period beginning 
     upon submission of the plan.
       ``(3) Standard for disapproval.--The Secretary may 
     disapprove an allocation plan only if the plan fails to 
     comply with requirements of this section or section 296.
       ``(4) Resubmission upon disapproval.--If the Secretary 
     disapproves a plan, the grantee may submit to the Secretary a 
     revised plan for review and approval or disapproval under 
     this subsection.
       ``(5) Timing for fiscal year 2009.--With respect only to 
     fiscal year 2009, the Secretary may extend each of the 
     periods referred to in paragraphs (1) and (2), and the period 
     referred to in section 294(i)(1)(A), by not more than 6 
     months.

     ``SEC. 296. USE OF ASSISTANCE BY RECIPIENTS.

       ``(a) Distribution to Recipients; Use Requirements.--Each 
     grantee shall distribute Trust Fund grant amounts of the 
     grantee to eligible recipients for use in accordance with 
     this section. Trust Fund grant amounts of a grantee may be 
     used, or committed for use, only for eligible activities 
     that--
       ``(1) are conducted in the jurisdiction of the grantee;
       ``(2) in the case of a grantee that is a State, insular 
     area, participating local jurisdiction, or grantee under 
     section 294(i), comply with the allocation plan of the 
     grantee under section 295;
       ``(3) are selected for funding by the grantee in accordance 
     with the process and criteria for such selection established 
     pursuant to section 295(c)(2); and
       ``(4) comply with the targeting requirements under 
     subsection (c) of this section and the affordable housing 
     requirements under section 297.
       ``(b) Eligible Recipients.--Trust Fund grant amounts of a 
     grantee may be provided only to an organization, agency, or 
     other entity (including a for-profit entity, a nonprofit 
     entity, a faith-based organization, a

[[Page 5070]]

     community development financial institution, a community 
     development corporation, and a State or local housing trust 
     fund) that--
       ``(1) demonstrates the experience, ability, and capacity 
     (including financial capacity) to undertake, comply, and 
     manage the eligible activity;
       ``(2) demonstrates its familiarity with the requirements of 
     any other Federal, State or local housing program that will 
     be used in conjunction with such grant amounts to ensure 
     compliance with all applicable requirements and regulations 
     of such programs; and
       ``(3) makes such assurances to the grantee as the Secretary 
     shall, by regulation, require to ensure that the recipient 
     will comply with the requirements of this subtitle during the 
     entire period that begins upon selection of the recipient to 
     receive such grant amounts and ending upon the conclusion of 
     all eligible activities that are engaged in by the recipient 
     and funded with such grant amounts.
       ``(c) Targeting Requirements.--The targeting requirements 
     under this subsection are as follows:
       ``(1) Requirement of use of all amounts for affordable 
     housing for low-income families.--All Trust Fund grant 
     amounts of a grantee shall be distributed for use only for 
     eligible activities relating to affordable housing that are 
     for the benefit only of families whose incomes do not exceed 
     80 percent of the greater of--
       ``(A) the median family income for the area in which the 
     housing is located, as determined by the Secretary with 
     adjustments for smaller and larger families; and
       ``(B) the median family income for the State or insular 
     area in which the housing is located, as determined by the 
     Secretary with adjustments for smaller and larger families.
       ``(2) Use of 75 percent for affordable housing for 
     extremely low-income families.--Not less than 75 percent of 
     the Trust Fund grant amounts of a grantee for each fiscal 
     year shall be used only for eligible activities relating to 
     affordable housing that are for the benefit only of families 
     whose incomes do not exceed the higher of--
       ``(A) 30 percent of the median family income for the area 
     in which the housing is located, as determined by the 
     Secretary with adjustments for smaller and larger families; 
     and
       ``(B) the poverty line (as such term is defined in section 
     673 of the Omnibus Budget Reconciliation Act of 1981 (42 
     U.S.C. 9902), including any revision required by such 
     section) applicable to a family of the size involved.
       ``(3) Use of 30 percent for affordable housing for very 
     poor families.--Not less than 30 percent of the Trust Fund 
     grant amounts of a grantee for each fiscal year shall be used 
     only for eligible activities relating to affordable housing 
     that are for the benefit only of families whose incomes do 
     not exceed the maximum amount of income that an individual or 
     family could have, taking into consideration any income 
     disregards, and remain eligible for benefits under the 
     Supplemental Security Income program under title XVI of the 
     Social Security Act (42 U.S.C. 1381 et seq.).
       ``(4) Limitation for years in which less than $2 billion is 
     available.--If, for any fiscal year, the total amount 
     available pursuant to section 293(a) for assistance under 
     this subtitle is less than $2,000,000,000, in addition to the 
     other requirements under this subsection, all such amounts 
     shall be used only for eligible activities relating to 
     affordable housing that are for the benefit only of families 
     whose incomes do not exceed 50 percent of the median family 
     income for the area in which the housing is located, as 
     determined by the Secretary with adjustments for smaller and 
     larger families.
       ``(5) Review of targeting requirements.--The Secretary 
     shall assess the need for, and the appropriateness of, the 
     requirements under paragraphs (1) through (3) and shall 
     submit a report to the Congress on the results of the 
     assessment not later than October 1, 2010, and not later than 
     the expiration of the 5-year period beginning upon such date 
     and each successive 5-year period thereafter. In each such 
     report, the Secretary shall identify and make recommendations 
     regarding the continuation or adjustment of the targeting 
     requirements in paragraphs (1) through (3).
       ``(d) Use for Rural Areas.--Of the Trust Fund grant amounts 
     for any fiscal year for any grantee that is a State or 
     participating local jurisdiction that includes any rural 
     areas, the State or participating local jurisdiction shall 
     use a portion for eligible activities located in rural areas 
     that is proportionate to the identified need for such 
     activities in such rural areas.
       ``(e) Cost Limits.--The Secretary shall establish 
     limitations on the amount of Trust Fund grant amounts that 
     may be used, on a per unit basis, for eligible activities. 
     Such limitations shall be the same as the per unit cost 
     limits established pursuant to section 212(e) (42 U.S.C. 
     12742(e)), as adjusted annually, and established by number of 
     bedrooms, market area, and eligible activity.
       ``(f) Forms of Assistance.--
       ``(1) In general.--Assistance may be distributed pursuant 
     to this section in the form of--
       ``(A) capital grants, noninterest-bearing or low-interest 
     loans or advances, deferred payment loans, guarantees, and 
     loan loss reserves;
       ``(B) in the case of assistance for ownership of one- to 
     four-family owner-occupied housing, downpayment assistance, 
     closing cost assistance, and assistance for interest rate 
     buy-downs; and
       ``(C) any other forms of assistance approved by the 
     Secretary.
       ``(2) Repayments.--If a grantee awards assistance under 
     this section in the form of a loan or other mechanism by 
     which funds are later repaid to the grantee, any repayments 
     and returns received by the grantee shall be distributed by 
     the grantee in accordance with the allocation plan under 
     section 295 for the grantee for the fiscal year in which such 
     repayments are made or returns are received.
       ``(g) Coordination With Other Assistance.--In distributing 
     assistance pursuant to this section, each grantee shall, to 
     the maximum extent practicable, coordinate such distribution 
     with the provision of other Federal, State, tribal, and local 
     housing assistance, including--
       ``(1) in the case of any State, housing credit dollar 
     amounts allocated by the State under section 42(h) of the 
     Internal Revenue Code of 1986;
       ``(2) assistance made available under subtitles A through F 
     (42 U.S.C. 12721 et seq.) or the community development block 
     grant program under title I of the Housing and Community 
     Development Act of 1974 (42 U.S.C. 5301 et seq.);
       ``(3) private activity bonds;
       ``(4) assistance made available under section 9 of the 
     United States Housing Act of 1937 (42 U.S.C. 1437g);
       ``(5) assistance made available under section 8(o) of the 
     United States Housing Act of 1937 (42 U.S.C. 1437f(o));
       ``(6) assistance made available under title V of the 
     Housing Act of 1949 (42 U.S.C. 1471 et seq.);
       ``(7) assistance made available under section 101 of the 
     Native American Housing Assistance and Self-Determination Act 
     of 1996 (25 U.S.C. 4111);
       ``(8) assistance made available from any State or local 
     housing trust fund established to provide or assist in making 
     available affordable housing; and
       ``(9) any other housing assistance programs.
       ``(h) Prohibited Uses.--The Secretary shall--
       ``(1) by regulation, set forth prohibited uses of grant 
     amounts under this subtitle, which shall include use for--
       ``(A) political activities;
       ``(B) advocacy;
       ``(C) lobbying, whether directly or through other parties;
       ``(D) counseling services;
       ``(E) travel expenses; and
       ``(F) preparing or providing advice on tax returns;
       ``(2) by regulation, provide that, except as provided in 
     paragraph (3), grant amounts under this subtitle may not be 
     used for administrative, outreach, or other costs of--
       ``(A) a grantee; or
       ``(B) any recipient of such grant amounts; and
       ``(3) by regulation, limit the amount of any Trust Fund 
     grant amounts for a fiscal year that may be used for 
     administrative costs of the grantee of carrying out the 
     program required under this subtitle to a percentage of such 
     grant amounts of the grantee for such fiscal year, which may 
     not exceed 10 percent.
       ``(i) Labor Standards.--Each grantee receiving Trust Fund 
     grant amounts shall ensure that contracts for eligible 
     activities assisted with such amounts comply with the same 
     requirements under section 286 (42 U.S.C. 12836) that are 
     applicable to contracts for construction of affordable 
     housing assisted under subtitles A and D.
       ``(j) Compliance With Other Federal Laws.--All amounts from 
     the Trust Fund shall be allocated in accordance with, and any 
     eligible activities carried out in whole or in part with 
     grant amounts under this subtitle (including housing provided 
     with such grant amounts) shall comply with and be operated in 
     compliance with, other applicable provisions of Federal law, 
     including--
       ``(1) laws relating to tenant protections and tenant rights 
     to participate in decision making regarding their residences;
       ``(2) laws requiring public participation, including laws 
     relating to Consolidated Plans, Qualified Allocation Plans, 
     and Public Housing Agency Plans; and
       ``(3) fair housing laws and laws regarding accessibility in 
     federally assisted housing, including section 504 of the 
     Rehabilitation Act of 1973.

     ``SEC. 297. AFFORDABLE HOUSING.

       ``(a) Rental Housing.--A rental dwelling unit (which may 
     include a dwelling unit in limited equity cooperative 
     housing, as such term is defined in section 143(k) of the 
     Internal Revenue Code of 1986 (26 U.S.C. 143(k)) or in 
     housing of a cooperative housing corporation, as such term is 
     defined in section 216(b) of the Internal Revenue Code of 
     1986 (26 U.S.A. 216(b))), shall be considered affordable 
     housing for purposes of this subtitle only if

[[Page 5071]]

     the dwelling unit is subject to legally binding commitments 
     that ensure that the dwelling unit meets all of the following 
     requirements:
       ``(1) Rents.--The dwelling unit bears a rent not greater 
     than the lesser of--
       ``(A) the existing fair market rental established by the 
     Secretary under section 8(c) of the United States Housing Act 
     of 1937 (42 U.S.C. 1437f(c)) for a dwelling unit of the same 
     size in the same market area, or the applicable payment 
     standard for assistance under section 8(o) of such Act, if 
     higher; and
       ``(B) a rent that does not exceed 30 percent of the 
     adjusted income of a family whose income equals 65 percent of 
     the median income for the area, as determined by the 
     Secretary, with adjustment for number of bedrooms in the 
     unit, except that the Secretary may establish income ceilings 
     higher or lower than 65 percent of the median for the area on 
     the basis of the findings of the Secretary that such 
     variations are necessary because of prevailing levels of 
     construction costs or fair market rents, or unusually high or 
     low family incomes.
       ``(2) Tenant rent contribution.--The contribution toward 
     rent by the family residing in the dwelling unit will not 
     exceed 30 percent of the adjusted income of such family.
       ``(3) Non-discrimination against voucher holders.--The 
     dwelling unit is located in a project in which all dwelling 
     units are subject to enforceable restrictions that provide 
     that a unit may not be refused for leasing to a holder of a 
     voucher of eligibility under section 8 of the United States 
     Housing Act of 1937 (42 U.S.C. 1437f) because of the status 
     of the prospective tenant as a holder of such voucher.
       ``(4) Mixed income.--
       ``(A) In general.--The dwelling unit is located in a 
     project--
       ``(i) that receives assistance under this subtitle; and
       ``(ii) for which not more than 50 percent of the rental 
     units in the project that are not previously occupied may be 
     rented initially only to families with incomes described in 
     section 296(c)(2), as determined at a reasonable time before 
     occupancy.
       ``(B) Rehabilitation.--In the case of a dwelling unit in a 
     project for which Trust Fund grant amounts are used for the 
     rehabilitation of the project, the dwelling unit is located 
     in a project in which the percentage of units being rented 
     upon completion of the rehabilitation to families with 
     incomes described in section 296(c)(2) may not exceed the 
     higher of 50 percent or the percentage of such families 
     occupying the project at the time funds are awarded for such 
     project.
       ``(C) Exceptions.--Subparagraph (A) shall not apply in the 
     case of a project that--
       ``(i) has 25 or fewer dwelling units and that is--

       ``(I) located in a census tract in which the number of 
     families having incomes less than the poverty line is less 
     than 20 percent;
       ``(II) located in a rural area, as such term is defined in 
     section 520 of the Housing Act of 1949 (42 U.S.C. 1490); or
       ``(III) specifically made available only for households 
     comprised of disabled families; or

       ``(ii) is specifically made available only for households 
     comprised of elderly families.
       ``(5) Visitability.--To the extent the dwelling unit is not 
     required under Federal law to comply with standards relating 
     to accessibility to persons with disabilities, the dwelling 
     unit complies with such basic visitability standards as the 
     Secretary shall by regulation provide.
       ``(6) Duration of use.--The dwelling unit will continue to 
     be subject to all requirements under this subsection for not 
     less than 50 years.
       ``(b) Owner-Occupied Housing.--For purposes of any eligible 
     activity involving one- to four-family owner-occupied housing 
     (which may include housing of a cooperative housing 
     corporation, as such term is defined in section 216(b) of the 
     Internal Revenue Code of 1986 (26 U.S.C. 216(b))), such a 
     residence shall be considered affordable housing for purposes 
     of this subtitle only if--
       ``(1) in the case of housing to be made available for 
     purchase--
       ``(A) the housing is available for purchase only for use as 
     a principal residence by families that qualify as first-time 
     homebuyers, as such term is defined in section 104 (42 U.S.C. 
     12704), except that any reference in such section to 
     assistance under title II of this Act shall for purposes of 
     this section be considered to refer to assistance from Trust 
     Fund grant amounts;
       ``(B) the housing has an initial purchase price that meets 
     the requirements of section 215(b)(1); and
       ``(C) the housing is subject to the same resale 
     restrictions established under section 215(b)(3) and 
     applicable to the participating jurisdiction that is the 
     State in which such housing is located; and
       ``(2) the housing is made available for purchase only by, 
     or in the case of assistance to a homebuyer pursuant to this 
     subsection, the assistance is made available only to, 
     homebuyers who have, before purchase, completed a program of 
     counseling with respect to the responsibilities and financial 
     management involved in homeownership that is approved by the 
     Secretary and includes counseling regarding financial 
     literacy, strategies to save money, qualifying for a mortgage 
     loan, methods to avoid predatory lenders and foreclosure, 
     and, where appropriate by region, any requirements and costs 
     associated with obtaining flood or other disaster-specific 
     insurance coverage; except that the Secretary may, at the 
     request of a State, waive the requirements of this paragraph 
     with respect to a geographic area or areas within the State 
     if--
       ``(A) the travel time or distance involved in providing 
     counseling with respect to such area or areas, as otherwise 
     required under this paragraph, on an in-person basis is 
     excessive or the cost of such travel is prohibitive; and
       ``(B) the State provides alternative forms of counseling 
     for such area or areas, which may include interactive 
     telephone counseling, on-line counseling, interactive video 
     counseling, and interactive home study counseling and a 
     program of financial literacy and education to promote an 
     understanding of consumer, economic, and personal finance 
     issues and concepts, including saving for retirement, 
     managing credit, long-term care, and estate planning and 
     education on predatory lending, identity theft, and financial 
     abuse schemes relating to homeownership that is approved by 
     the Secretary, except that entities providing such counseling 
     shall not discriminate against any particular form of 
     housing.
       ``(c) Priority for Families on Section 8 or Public Housing 
     Waiting List for 12 Months or Longer.--A dwelling unit in 
     rental housing or owner-occupied housing shall be considered 
     affordable housing for purposes of this subtitle only if the 
     dwelling unit is subject to such requirements, as the 
     Secretary shall provide, to ensure that priority for 
     occupancy in or, in the case of owner-occupied housing, 
     purchase of, the dwelling unit is provided to families who 
     are eligible for rental assistance under section 8 of the 
     United States Housing Act of 1937 (42 U.S.C. 1437f) or 
     occupancy in public housing assisted under such Act, and have 
     applied to a public housing agency for such assistance or 
     occupancy, as applicable, and been on a waiting list of a 
     public housing agency for such assistance or occupancy, as 
     applicable, for at least 12 consecutive months.

     ``SEC. 298. OTHER PROVISIONS.

       ``(a) Effect of Assistance Under Program.--Notwithstanding 
     any other provision of law, the provision of assistance under 
     this subtitle for a project shall not reduce the amount of 
     assistance for which such project is otherwise eligible under 
     subtitles A through F of this title, if the project does not 
     exceed the cost limits established pursuant to section 
     296(e).
       ``(b) Accountability of Grantees and Recipients.--
       ``(1) Recipients.--
       ``(A) Tracking of funds.--The Secretary shall--
       ``(i) require each grantee to develop and maintain a system 
     to ensure that each recipient of assistance from Trust Fund 
     grant amounts of the grantee uses such amounts in accordance 
     with this subtitle, the regulations issued under this 
     subtitle, and any requirements or conditions under which such 
     amounts were provided; and
       ``(ii) establish minimum requirements for agreements, 
     between the grantee and recipients, regarding assistance from 
     the Trust Fund grant amounts of the grantee, which shall 
     include--

       ``(I) appropriate continuing financial and project 
     reporting, record retention, and audit requirements for the 
     duration of the grant to the recipient to ensure compliance 
     with the limitations and requirements of this subtitle and 
     the regulations under this subtitle; and
       ``(II) any other requirements that the Secretary determines 
     are necessary to ensure appropriate grant administration and 
     compliance.

       ``(B) Misuse of funds.--
       ``(i) Reimbursement requirement.--If any recipient of 
     assistance from Trust Fund grant amounts of a grantee is 
     determined, in accordance with clause (ii), to have used any 
     such amounts in a manner that is materially in violation of 
     this subtitle, the regulations issued under this subtitle, or 
     any requirements or conditions under which such amounts were 
     provided--

       ``(I) such recipient shall be ineligible for any further 
     assistance from any Trust Fund grant amounts of any grantee 
     during the period that begins upon such determination and 
     ends upon reinstatement by the Secretary of the eligibility 
     of recipient for such assistance, except that the Secretary 
     may reinstate such an ineligible recipient only pursuant to 
     application by the recipient for such reinstatement and the 
     recipient may not apply to the Secretary for such 
     reinstatement during the 12-month period, or the 10-year 
     period in the case of a second or subsequent such 
     determination, beginning upon such determination; and
       ``(II) the grantee shall require that, within 12 months 
     after the determination of such misuse, the recipient shall 
     reimburse the grantee for such misused amounts and return to 
     the grantee any amounts from the Trust Fund grant amounts of 
     the grantee that remain unused or uncommitted for use.

     The remedies under this clause are in addition to any other 
     remedies that may be available under law.

[[Page 5072]]

       ``(ii) Determination.--A determination is made in 
     accordance with this clause if the determination is--

       ``(I) made by the Secretary; or
       ``(II)(aa) made by the grantee;
       ``(bb) the grantee provides notification of the 
     determination to the Secretary for review, in the discretion 
     of the Secretary, of the determination; and
       ``(cc) the Secretary does not subsequently reverse the 
     determination.

       ``(2) Grantees.--
       ``(A) Report.--
       ``(i) In general.--The Secretary shall require each grantee 
     receiving Trust Fund grant amounts for a fiscal year to 
     submit a report, for such fiscal year, to the Secretary 
     that--

       ``(I) describes the activities funded under this subtitle 
     during such year with the Trust Fund grant amounts of the 
     grantee;
       ``(II) describes the manner in which the grantee complied 
     during such fiscal year with the allocation plan established 
     pursuant to section 295 for the grantee; and
       ``(III) certifies the number of total dwelling units of 
     affordable housing that were constructed, preserved, or 
     rehabilitated during such fiscal year with assistance from 
     Trust Funds grant amounts of the grantee comply with widely 
     accepted standards for green building.

       ``(ii) Public availability.--The Secretary shall make such 
     reports pursuant to this subparagraph publicly available.
       ``(B) Misuse of funds.--If the Secretary determines, after 
     reasonable notice and opportunity for hearing, that a grantee 
     has failed to comply substantially with any provision of this 
     subtitle and until the Secretary is satisfied that there is 
     no longer any such failure to comply, the Secretary shall--
       ``(i) reduce the amount of assistance under this section to 
     the grantee by an amount equal to the amount of Trust Fund 
     grant amounts which were not used in accordance with this 
     subtitle;
       ``(ii) require the grantee to repay the Secretary an amount 
     equal to the amount of the Trust Fund grant amounts which 
     were not used in accordance with this subtitle;
       ``(iii) limit the availability of assistance under this 
     subtitle to the grantee to activities or recipients not 
     affected by such failure to comply; or
       ``(iv) terminate any assistance under this subtitle to the 
     grantee.
       ``(c) Green Housing Clearinghouse.--
       ``(1) Establishment.--The Secretary shall establish a 
     clearinghouse of information relating to green building 
     techniques to provide grantees and recipients of Trust Fund 
     amounts information regarding use of Trust Fund grant amounts 
     in a manner that increases the efficiency of buildings and 
     their use of energy, water, and materials, and reducing 
     building impacts on human health and the environment, through 
     better siting, design, construction, operation, maintenance, 
     and removal, including information regarding best practices 
     and technical recommendations.
       ``(2) Access through internet.--The Secretary shall make 
     the information of the clearinghouse available by means of 
     the Internet.

     ``SEC. 299. DEFINITIONS.

       ``For purposes of this subtitle, the following definitions 
     shall apply:
       ``(1) Eligible activities.--The term `eligible activities' 
     means activities relating to the construction, preservation, 
     or rehabilitation of affordable rental housing or affordable 
     one- to four-family owner-occupied housing, including--
       ``(A) the construction of new housing;
       ``(B) the acquisition of real property;
       ``(C) site preparation and improvement, including 
     demolition;
       ``(D) rehabilitation of existing housing;
       ``(E) use of funds to facilitate affordability for homeless 
     and other extremely low-income households of dwelling units 
     assisted with Trust Fund grant amounts, in a combined amount 
     not to exceed 20 percent of the project grant amount, for--
       ``(i) project-based rental assistance for not more than 12 
     months for a project assisted with Trust Fund grant amounts;
       ``(ii) project operating reserves for use to cover the loss 
     of rental assistance or in conjunction with a project loan; 
     or
       ``(iii) project operating accounts used to cover net 
     operating income shortfalls for dwelling units assisted with 
     Trust Fund grant amounts;
       ``(F) use of funds to facilitate affordability for families 
     having incomes described in section 296(c)(3), in a combined 
     amount for a grantee in any fiscal year not to exceed 10 
     percent of the aggregate Trust Fund grant amounts provided to 
     the grantee for such fiscal year, for project operating 
     accounts used to cover net operating income shortfalls for 
     dwelling units assisted with Trust Fund grant amounts;
       ``(G) providing incentives to maintain existing housing 
     (including manufactured housing) as affordable housing and to 
     establish or extend any low-income affordability restrictions 
     for such housing, including covering capital expenditures and 
     costs of establishing community land trusts to provide sites 
     for manufactured housing provided such incentives; and
       ``(H) in the case of affordable one- to four-family owner-
     occupied housing, downpayment assistance, closing cost 
     assistance, and assistance for interest rate buy-downs.
       ``(2) Eligible recipient.--The term `eligible recipient' 
     means an entity that meets the requirements under section 
     296(b) for receipt of Trust Fund grant amounts of a grantee.
       ``(3) Extremely low vacancy rate.--The term `extremely low 
     vacancy rate' means a housing or rental vacancy rate of 2 
     percent or less.
       ``(4) Extremely old housing.--The term `extremely old 
     housing' means housing that is 45 years old or older.
       ``(5) Families.--The term `families' has the meaning given 
     such term in section 3(b) of the United States Housing Act of 
     1937 (42 U.S.C. 1437a(b)).
       ``(6) Fiscal distress; severe fiscal distress.--The terms 
     `fiscal distress' and `severe fiscal distress' have the 
     meanings given such terms in section 220(d).
       ``(7) Grantee.--The term `grantee' means--
       ``(A) a State, insular area, or participating local 
     jurisdiction for which a grant is made under section 294(e);
       ``(B) an Indian tribe for which a grant is made under 
     section 294(g); or
       ``(C) a nonprofit or public entity for which a grant is 
     made under section 294(i).
       ``(8) Indian tribe.--The term `Indian tribe' means a 
     federally recognized Indian tribe.
       ``(9) Insular area.--The term `insular area' has the 
     meaning given such term in section 104.
       ``(10) Participating local jurisdiction.--The term 
     `participating local jurisdiction' means, with respect to a 
     fiscal year--
       ``(A) any unit of general local government (as such term is 
     defined in section 104 (42 U.S.C. 12704) that qualifies as a 
     participating jurisdiction under section 216 (42 U.S.C. 
     12746) for such fiscal year; and
       ``(B) at the option of such a consortium, any consortium of 
     units of general local governments that is designated 
     pursuant to section 216 (42 U.S.C. 12746) as a participating 
     jurisdiction for purposes of title II.
       ``(11) Poverty line.--The term `poverty line' has the 
     meaning given such term in section 673(2) of the Omnibus 
     Budget Reconciliation Act of 1981, including any revision 
     required by such section.
       ``(12) Recipient.--The term `recipient' means an entity 
     that receives assistance from a grantee, pursuant to section 
     296(a), from Trust Fund grant amounts of the grantee.
       ``(13) Rural area.--The term `rural area' has the meaning 
     given such term in section 520 of the Housing Act of 1949 (42 
     U.S.C. 1490).
       ``(14) Secretary.--The term `Secretary' means the Secretary 
     of Housing and Urban Development.
       ``(15) State.--The term `State' has the meaning given such 
     term in section 104.
       ``(16) Trust fund.--The term `Trust Fund' means the 
     National Affordable Housing Trust Fund established under 
     section 292.
       ``(17) Trust fund grant amounts.--The term `Trust Fund 
     grant amounts' means amounts from the Trust Fund that are 
     provided to a grantee pursuant to subsection (e), (g), or (i) 
     of section 294.

     ``SEC. 299A. INAPPLICABILITY OF HOME PROVISIONS.

       ``Except as specifically provided otherwise in this 
     subtitle, no requirement under, or provision of, title I or 
     subtitles A through F of this title shall apply to assistance 
     provided under this subtitle.

     ``SEC. 299B. REGULATIONS.

       ``Not later than 6 months after the date of enactment of 
     the National Affordable Housing Trust Fund Act of 2008, the 
     Secretary of Housing and Urban Development shall promulgate 
     regulations to carry out this subtitle, which shall include 
     regulations establishing the affordable housing needs formula 
     in accordance with section 294(a).

     ``SEC. 299C. BENEFITS.

       ``Nothing in this subtitle allows any payments under this 
     subtitle for any individual or head of household that is not 
     a legal resident.''.
       (b) Conforming Amendment.--Section 201 of the Cranston-
     Gonzalez National Affordable Housing Act (42 U.S.C. 12701 
     note) is amended by striking ``This title'' and inserting 
     ``Subtitles A through F of this title''.
                                 ______
                                 
  SA 4404. Ms. LANDRIEU submitted an amendment intended to be proposed 
by her to the bill H.R. 3221, moving the United States toward greater 
energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       Beginning on page 68, strike line 22 and all that follows 
     through line 4 on page 69 and and insert the following:
       ``(A) In general.--Notwithstanding the requirements of 
     subsection (i)(1), the proceeds of a qualified mortgage issue 
     may be used to refinance a mortgage which--
       ``(i) was originally financed by the mortgagor through a 
     qualified subprime loan, or

[[Page 5073]]

       ``(ii) is a mortgage on a residence--

       ``(I) located in the Gulf Opportunity Zone (as defined in 
     section 1400M(1)) and damaged or rendered uninhabitable by 
     reason of Hurricane Katrina,
       ``(II) located in the Rita GO Zone (as defined in section 
     1400M(3)) and damaged or rendered uninhabitable by reason of 
     Hurricane Rita, or
       ``(III) located in the Wilma GO Zone (as defined in section 
     1400M(5)) and damaged or rendered uninhabitable by reason of 
     Hurricane Wilma.

       On page 72, between lines 10 and 11, insert the following:
       (c) Waiver of 3-Year Requirement for Homes Damaged by 
     Hurricanes Katrina, Rita, and Wilma.--Paragraph (2) of 
     section 143(d) of the Internal Revenue Code of 1986 is 
     amended by striking ``and'' at the end of subparagraph (C), 
     by inserting ``and'' at the end of subparagraph (D), and by 
     inserting after subparagraph (D) the following new 
     subparagraph:
       ``(E) in the case of bonds issued after the date of the 
     enactment of this subparagraph and before January 1, 2011, 
     financing with respect to the purchase of any residence--
       ``(i) located in the Gulf Opportunity Zone (as defined in 
     section 1400M(1)) and damaged or rendered uninhabitable by 
     reason of Hurricane Katrina,
       ``(ii) located in the Rita GO Zone (as defined in section 
     1400M(3)) and damaged or rendered uninhabitable by reason of 
     Hurricane Rita, or
       ``(iii) located in the Wilma GO Zone (as defined in section 
     1400M(5)) and damaged or rendered uninhabitable by reason of 
     Hurricane Wilma,''.
       On page 72, line 11, strike ``(c)'' and insert ``(d)''.
       On page 73, line 19, strike ``(d)'' and insert ``(e)''.
                                 ______
                                 
  SA 4405. Ms. LANDRIEU submitted an amendment intended to be proposed 
by her to the bill H.R. 3221, moving the United States toward greater 
energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       On page 52, line 4, strike ``; and'' and insert a 
     semicolon.
       On page 52, line 7, strike the period and insert ``; and''.
       On page 52, between lines 7 and 8, insert the following:
       (D) the number and percentage of homes damaged or rendered 
     uninhabitable as a result of Hurricanes Katrina, Rita, and 
     Wilma in each State or unit of general local government.
                                 ______
                                 
  SA 4406. Mr. VOINOVICH (for himself, Ms. Stabenow, Mr. Hatch, Mr. 
Rockefeller, Mr. Smith, Ms. Cantwell, Mr. Vitter, and Mr. Levin) 
submitted an amendment intended to be proposed by him to the bill H.R. 
3221, moving the United States toward greater energy independence and 
security, developing innovative new technologies, reducing carbon 
emissions, creating green jobs, protecting consumers, increasing clean 
renewable energy production, and modernizing our energy infrastructure, 
and to amend the Internal Revenue Code of 1986 to provide tax 
incentives for the production of renewable energy and energy 
conservation; which was ordered to lie on the table; as follows:

       At the end of title VI, insert the following:

     SEC. ___. ELECTION TO ACCELERATE AMT AND R AND D CREDITS IN 
                   LIEU OF BONUS DEPRECIATION.

       (a) In General.--Section 168(k), as amended by this Act, is 
     amended by adding at the end the following new paragraph:
       ``(5) Election to accelerate amt and r and d credits in 
     lieu of bonus depreciation.--
       ``(A) In general.--If a corporation which is an eligible 
     taxpayer (within the meaning of paragraph (4)) for purposes 
     of this subsection elects to have this paragraph apply--
       ``(i) no additional depreciation shall be allowed under 
     paragraph (1) for any qualified property placed in service 
     during any taxable year to which paragraph (1) would 
     otherwise apply, and
       ``(ii) the limitations described in subparagraph (B) for 
     such taxable year shall be increased by an aggregate amount 
     not in excess of the bonus depreciation amount for such 
     taxable year.
       ``(B) Limitations to be increased.--The limitations 
     described in this subparagraph are--
       ``(i) the limitation under section 38(c), and
       ``(ii) the limitation under section 53(c).
       ``(C) Bonus depreciation amount.--For purposes of this 
     paragraph--
       ``(i) In general.--The bonus depreciation amount for any 
     applicable taxable year is an amount equal to the product of 
     20 percent and the excess (if any) of--

       ``(I) the aggregate amount of depreciation which would be 
     determined under this section for the taxable year if no 
     election under this paragraph were made and if this 
     subsection applied only to eligible qualified property, over
       ``(II) the aggregate amount of depreciation allowable under 
     this section for the taxable year.

       ``(ii) Eligible qualified property.--For purposes of clause 
     (i), the term `eligible qualified property' means qualified 
     property under paragraph (2), except that in applying 
     paragraph (2) for purposes of this clause--

       ``(I) `March 31, 2008' shall be substituted for `December 
     31, 2007' each place it appears in subparagraph (A) and 
     clauses (i) and (ii) of subparagraph (E) thereof,
       ``(II) only adjusted basis attributable to manufacture, 
     construction, or production after March 31, 2008, and before 
     January 1, 2009, shall be taken into account under 
     subparagraph (B)(ii) thereof, and
       ``(III) in the case of property which is a passenger 
     aircraft, the written binding contract limitation under 
     subparagraph (A)(iii)(I) thereof shall not apply.

       ``(iii) Maximum amount.--The bonus depreciation amount for 
     any applicable taxable year shall not exceed the applicable 
     limitation under clause (iv), reduced (but not below zero) by 
     the bonus depreciation amount for any preceding taxable year.
       ``(iv) Applicable limitation.--For purposes of clause 
     (iii), the term `applicable limitation' means, with respect 
     to any eligible taxpayer, the lesser of--

       ``(I) $50,000,000, or
       ``(II) 50 percent of the sum of the amounts determined with 
     respect to the eligible taxpayer under clauses (ii) and (iii) 
     of subparagraph (D).

       ``(v) Aggregation rule.--All corporations which are treated 
     as a single employer under section 52(a) shall be treated as 
     1 taxpayer for purposes of applying the limitation under this 
     subparagraph and determining the applicable limitation under 
     clause (iv).
       ``(D) Allocation of bonus depreciation amounts.--
       ``(i) In general.--Subject to clauses (ii) and (iii), the 
     taxpayer shall, at such time and in such manner as the 
     Secretary may prescribe, specify the portion (if any) of the 
     bonus depreciation amount which is to be allocated to each of 
     the limitations described in subparagraph (B).
       ``(ii) Business credit limitation.--The portion of the 
     bonus depreciation amount allocated to the limitation 
     described in subparagraph (B)(i) shall not exceed an amount 
     equal to the portion of the credit allowable under section 38 
     for the taxable year which is allocable to business credit 
     carryforwards to such taxable year which are--

       ``(I) from taxable years beginning before January 1, 2006, 
     and
       ``(II) properly allocable (determined under the rules of 
     section 38(d)) to the research credit determined under 
     section 41(a).

       ``(iii) Alternative minimum tax credit limitation.--The 
     portion of the bonus depreciation amount allocated to the 
     limitation described in subparagraph (B)(ii) shall not exceed 
     an amount equal to the portion of the minimum tax credit 
     allowable under section 53 for the taxable year which is 
     allocable to the adjusted minimum tax imposed for taxable 
     years beginning before January 1, 2006.
       ``(E) Credit refundable.--Any aggregate increases in the 
     credits allowed under section 38 or 53 by reason of this 
     paragraph shall, for purposes of this title, be treated as a 
     credit allowed to the taxpayer under subpart C of part IV of 
     subchapter A.
       ``(F) Other rules.--
       ``(i) Election.--Any election under this paragraph 
     (including any allocation under subparagraph (D)) may be 
     revoked only with the consent of the Secretary.
       ``(ii) Deduction allowed in computing minimum tax.--
     Notwithstanding this paragraph, paragraph (2)(G) shall apply 
     with respect to the deduction computed under this section 
     (after application of this paragraph) with respect to 
     property placed in service during any applicable taxable 
     year.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after December 31, 
     2007, in taxable years ending after such date.
                                 ______
                                 
  SA 4407. Mr. KYL submitted an amendment intended to be proposed by 
him to the bill H.R. 3221, moving the United States toward greater 
energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation;

       At the end add the following:

[[Page 5074]]



              TITLE _--PRINCIPAL RESIDENCE GAIN EXCLUSION

     SEC. _01. INFLATION ADJUSTMENT FOR PRINCIPAL RESIDENCE GAIN 
                   EXCLUSION DOLLAR LIMITATION.

       (a) In General.--Section 121(b) of the Internal Revenue 
     Code of 1986 (relating to limitations) is amended by adding 
     at the end the following new paragraph:
       ``(4) Inflation adjustment.--In the case of any calendar 
     year after 2008, the dollar amount contained in paragraph (1) 
     shall be increased by an amount equal to--
       ``(A) such dollar amount, multiplied by
       ``(B) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year, determined by 
     substituting `calendar year 2007' for `calendar year 1992' in 
     subparagraph (B) thereof.

     Any increase determined under the preceding sentence shall be 
     rounded to the nearest multiple of $1,000.''.
       (b) Conforming Amendment.--So much of subparagraph (A) of 
     section 121(b)(2) of the Internal Revenue Code of 1986 as 
     precedes clause (i) thereof is amended to read as follows:
       ``(A) Limitation for certain joint returns.--Paragraph (1) 
     shall be applied by doubling the dollar amount specified in 
     such paragraph if--''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to years beginning after December 31, 2008.
                                 ______
                                 
  SA 4408. Mr. SPECTER submitted an amendment intended to be proposed 
by him to the bill H.R. 3221, moving the United States toward greater 
energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

        At the appropriate place, insert the following:

      SEC. ---- . LEGAL SAFE HARBOR FOR ENTERING INTO CERTAIN LOAN 
                   MODIFICATIONS OR WORKOUT PLANS.

        Section 6 of the Real Estate Settlement Procedures Act of 
     1974 (12 U.S.C. 2605) is amended--
        (1) by redesignating subsections (i) and (j) as 
     subsections (j) and (k), respectively; and
        (2) by inserting after subsection (h) the following:
        ``(i) Duty of Servicers Regarding Certain Loan 
     Modifications or Workout Plans.--
       ``(1) In general.--Notwithstanding any other provision of 
     law, absent specific contractual provisions to the contrary, 
     a servicer of pooled qualified residential mortgages--
       ``(A) owes any duty to determine if the net present value 
     of the payments on the loan as modified is likely to be 
     greater than the anticipated net recovery that would result 
     from foreclosure to all investors and parties having a direct 
     or indirect interest in the pooled loans or securitization 
     vehicle, but not to any individual party or group of parties; 
     and
        ``(B) acts in the best interests of all such investors and 
     parties, if the servicer agrees to or implements a qualified 
     loan modification or workout plan for a qualified residential 
     mortgage, or if, and only if, such efforts are unsuccessful 
     or infeasible, takes other reasonable loss mitigation 
     actions, including accepting partial payments or short sale 
     of the property; and
        ``(C) if the servicer acts in a manner consistent with the 
     duty set forth in subparagraphs (A) and (B), shall not be 
     liable under any law or regulation of the United States, any 
     State or any political subdivision of any State, for entering 
     into a qualified loan modification or workout plan in any 
     action filed by or on behalf of any person--
        ``(i) based on the person's ownership of any interest in a 
     residential mortgage, a pool of residential mortgage loans, 
     or a securitization vehicle, that distributes payments out of 
     the principal, interest, or other payment on loans in the 
     pool;
       ``(ii) based on the person's obligation to make payments 
     determined in reference to any loan or interest referred to 
     in clause (i); or
        ``(iii) based on the person's obligation to insure any 
     loan or any interest referred to in clause (i).
        ``(2) Definitions.--As used in this subsection--
        ``(A) the term `qualified loan modification or workout 
     plan' means a contract, modification, or plan relating to a 
     qualified residential mortgage loan consummated after January 
     1, 2004, with respect to which--
        ``(i) payment default on the loan or loans has occurred, 
     is imminent, or is reasonably foreseeable;
        ``(ii) the dwelling securing the loan or loans is the 
     primary residence of the owner;
        ``(iii) the servicer reasonably believes that the 
     anticipated recovery under the loan modification or workout 
     plan will exceed the anticipated recovery through 
     foreclosure, on a net present value basis;
        ``(iv) the effective period runs for at least 5 years from 
     the date of adoption of the plan, or until the borrower sells 
     or refinances the property, if that occurs earlier; and
        ``(v) the borrower is not required to pay additional fees 
     to the servicer;
        ``(B) the term `qualified residential mortgage' means a 
     consumer credit transaction or loan that is secured by the 
     consumer's principal dwelling;
        ``(C) the term `securitization vehicle' means a trust, 
     corporation, partnership, limited liability entity, special 
     purpose entity, or other structure that is the issuer, or is 
     created by the issuer, of mortgage pass-through certificates, 
     participation certificates, mortgage-backed securities, or 
     other similar securities backed by a pool of assets that 
     includes residential mortgage loans.; and''
        (D) the term ``servicer'' includes the entities listed in 
     subsection (i)(2)(A) and (B) of RESPA (12 U.S.C. sections 
     2605(i)(2)(A) and (B)).
        Effective Period--this section shall apply only with 
     respect to qualified loan modifications or workout plans 
     initiated during the 6 month period beginning on the date of 
     enactment of this section.
                                 ______
                                 
  SA 4409. Mrs. McCASKILL submitted an amendment intended to be 
proposed by her to the bill H.R. 3221, moving the United States toward 
greater energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       At the end of the bill, insert the following:

          TITLE VIII--REVERSE MORTGAGE PROTECTION PROCEEDS ACT

     SEC. 801. SHORT TITLE.

       This title may be cited as the ``Reverse Mortgage Proceeds 
     Protection Act''.

     SEC. 802. PROHIBITION ON REQUIRED PURCHASE OF AN ANNUITY.

       Section 255 of the National Housing Act of 1937 (12 U.S.C. 
     1715z-20) is amended--
       (1) by amending subsection (d)(1) to read as follows:
       ``(1) have been originated by a mortgagee approved by the 
     Secretary;'';
       (2) by amending subsection (d)(2)(B) to read as follows:
       ``(B) has received adequate counseling, as provided in 
     subsection (f), by an independent third party that is not, 
     either directly or indirectly, associated with or compensated 
     by a party involved in-
       ``(i) originating or servicing the mortgage;
       ``(ii) funding the loan underlying the mortgage; or
       ``(iii) the sale of annuities, investments, long-term care 
     insurance, or any other type of financial or insurance 
     product;'';
       (3) in subsection (f)--
       (A) by striking ``(f) Information Services for 
     Mortgagors.--'' and inserting ``(f) Counseling Services and 
     Information for Mortgagors.--''; and
       (B) by amending the matter preceding paragraph (1) to read 
     as follows: ``The Secretary shall provide or cause to be 
     provided adequate counseling for the mortgagor, as described 
     in subsection (d)(2)(B). Such counseling shall be provided by 
     counselors that meet qualification standards and follow 
     uniform counseling protocols. The qualification standards and 
     counseling protocols shall be established by the Secretary 
     within 12 months of the date of enactment of the Reverse 
     Mortgage Proceeds Protection Act. The protocols shall require 
     a qualified counselor to discuss with each mortgagor 
     information which shall include--''
       (4) striking subsection (l);
       (5) redesignating subsection (m) as subsection (l);
       (6) amending subsection (l), as so redesignated, to read as 
     follows:
       ``(l) Funding for Counseling.--The Secretary shall use a 
     portion of the mortgage insurance premiums collected under 
     the program under this section to adequately fund the 
     counseling and disclosure activities required under 
     subsection (f), including counseling for those homeowners who 
     elect not to take out a home equity conversion mortgage.''; 
     and
       (7) adding at the end the following:
       ``(m) Requirements on Mortgage Originators.--
       ``(1) In general.--The mortgagee and any other party that 
     participates in the origination of a mortgage to be insured 
     under this section shall--
       ``(A) not participate in, be associated with, or employ any 
     party that participates in or is associated with any other 
     financial or insurance activity; or
       ``(B) demonstrate to the Secretary that the mortgagee or 
     other party maintains, or will maintain, firewalls and other 
     safeguards designed to ensure that--
       ``(i) individuals participating in the origination of the 
     mortgage shall have no involvement with, or incentive to 
     provide the

[[Page 5075]]

     mortgagor with, any other financial or insurance product; and
       ``(ii) the mortgagor shall not be required, directly or 
     indirectly, as a condition of obtaining a mortgage under this 
     section, to purchase any other financial or insurance 
     product.
       ``(2) Approval of other parties.--All parties that 
     participate in the origination of a mortgage to be insured 
     under this section shall be approved by the Secretary.
       ``(n) Prohibition Against Requirements To Purchase 
     Additional Products.--The mortgagee or any other party shall 
     not be required by the mortgagor or any other party to 
     purchase an insurance, annuity, or other additional product 
     as a requirement or condition of eligibility for a mortgage 
     authorized under subsection (c).
       ``(o) Regulations To Protect Elderly Homeowners.--Not later 
     than 12 months after the date of enactment of the Reverse 
     Mortgage Proceeds Protection Act, the Secretary shall, in 
     consultation with other relevant Federal departments and 
     agencies, promulgate regulations to help protect elderly 
     homeowners from the marketing of financial and insurance 
     products not in the interest of such homeowners, including 
     the marketing or sale of an annuity or investment associated 
     with obtaining, or as a condition of obtaining, any home 
     equity conversion mortgage.
       ``(p) Study To Determine Consumer Protections and 
     Underwriting Standards.--The Secretary shall conduct a study 
     to examine and determine appropriate consumer protections and 
     underwriting standards to ensure that the purchase of 
     products referred to in subsection (n) is appropriate for the 
     consumer. In conducting such study, the Secretary shall 
     consult with consumer advocates (including recognized experts 
     in consumer protection), industry representatives, 
     representatives of counseling organizations, and other 
     interested parties.''.
                                 ______
                                 
  SA 4410. Mrs. FEINSTEIN (for herself, Mr. Martinez, Mrs. Boxer, Mr. 
Obama, Mr. Salazar, Mrs. Dole, Mr. Durbin, and Mrs. Clinton) submitted 
an amendment intended to be proposed by her to the bill H.R. 3221, 
moving the United States toward greater energy independence and 
security, developing innovative new technologies, reducing carbon 
emissions, creating green jobs, protecting consumers, increasing clean 
renewable energy production, and modernizing our energy infrastructure, 
and to amend the Internal Revenue Code of 1986 to provide tax 
incentives for the production of renewable energy and energy 
conservation; which was ordered to lie on the table; as follows:

       At the end of the bill, add the following:

               TITLE VII--S.A.F.E. MORTGAGE LICENSING ACT

     SEC. 701. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This title may be cited as the ``Secure 
     and Fair Enforcement for Mortgage Licensing Act of 2008'' or 
     ``S.A.F.E. Mortgage Licensing Act of 2008''.
       (b) Table of Contents.--The table of contents for this 
     title is as follows:

Sec. 701. Short title; table of contents.
Sec. 702. Purposes and methods for establishing a mortgage licensing 
              system and registry.
Sec. 703. Definitions.
Sec. 704. License or registration required.
Sec. 705. State license and registration application and issuance.
Sec. 706. Standards for State license renewal.
Sec. 707. System of registration administration by Federal banking 
              agencies.
Sec. 708. Secretary of Housing and Urban Development backup authority 
              to establish a loan originator licensing system.
Sec. 709. Backup authority to establish a nationwide mortgage licensing 
              and registry system.
Sec. 710. Fees.
Sec. 711. Background checks of loan originators.
Sec. 712. Confidentiality of information.
Sec. 713. Liability provisions.
Sec. 714. Enforcement under HUD backup licensing system.
Sec. 715. Preemption of State law.
Sec. 716. Reports and recommendations to Congress.
Sec. 717. Study and reports on defaults and foreclosures

     SEC. 702. PURPOSES AND METHODS FOR ESTABLISHING A MORTGAGE 
                   LICENSING SYSTEM AND REGISTRY.

       In order to increase uniformity, reduce regulatory burden, 
     enhance consumer protection, and reduce fraud, the States, 
     through the Conference of State Bank Supervisors and the 
     American Association of Residential Mortgage Regulators, are 
     hereby encouraged to establish a Nationwide Mortgage 
     Licensing System and Registry for the residential mortgage 
     industry that accomplishes all of the following objectives:
       (1) Provides uniform license applications and reporting 
     requirements for State-licensed loan originators.
       (2) Provides a comprehensive licensing and supervisory 
     database.
       (3) Aggregates and improves the flow of information to and 
     between regulators.
       (4) Provides increased accountability and tracking of loan 
     originators.
       (5) Streamlines the licensing process and reduces the 
     regulatory burden.
       (6) Enhances consumer protections and supports anti-fraud 
     measures.
       (7) Provides consumers with easily accessible information, 
     offered at no charge, utilizing electronic media, including 
     the Internet, regarding the employment history of, and 
     publicly adjudicated disciplinary and enforcement actions 
     against, loan originators.
       (8) Establishes a means by which residential mortgage loan 
     originators would be required to act in the best interests of 
     the consumer, to the greatest extent possible.

     SEC. 703. DEFINITIONS.

       For purposes of this title, the following definitions shall 
     apply:
       (1) Federal banking agencies.--The term ``Federal banking 
     agencies'' means the Board of Governors of the Federal 
     Reserve System, the Comptroller of the Currency, the Director 
     of the Office of Thrift Supervision, the National Credit 
     Union Administration, and the Federal Deposit Insurance 
     Corporation.
       (2) Depository institution.--The term ``depository 
     institution'' has the same meaning as in section 3 of the 
     Federal Deposit Insurance Act, and includes any credit union.
       (3) Loan originator.--
       (A) In general.--The term ``loan originator''--
       (i) means an individual who--

       (I) takes a residential mortgage loan application;
       (II) assists a consumer in obtaining or applying to obtain 
     a residential mortgage loan; or
       (III) offers or negotiates terms of a residential mortgage 
     loan, for direct or indirect compensation or gain, or in the 
     expectation of direct or indirect compensation or gain;

       (ii) includes any individual who represents to the public, 
     through advertising or other means of communicating or 
     providing information (including the use of business cards, 
     stationery, brochures, signs, rate lists, or other 
     promotional items), that such individual can or will provide 
     or perform any of the activities described in clause (i);
       (iii) does not include any individual who is not otherwise 
     described in clause (i) or (ii) and who performs purely 
     administrative or clerical tasks on behalf of a person who is 
     described in any such clause; and
       (iv) does not include a person or entity that only performs 
     real estate brokerage activities and is licensed or 
     registered in accordance with applicable State law, unless 
     the person or entity is compensated by a lender, a mortgage 
     broker, or other loan originator or by any agent of such 
     lender, mortgage broker, or other loan originator.
       (B) Other definitions relating to loan originator.--For 
     purposes of this subsection, an individual ``assists a 
     consumer in obtaining or applying to obtain a residential 
     mortgage loan'' by, among other things, advising on loan 
     terms (including rates, fees, other costs), preparing loan 
     packages, or collecting information on behalf of the consumer 
     with regard to a residential mortgage loan.
       (C) Administrative or clerical tasks.--The term 
     ``administrative or clerical tasks'' means the receipt, 
     collection, and distribution of information common for the 
     processing or underwriting of a loan in the mortgage industry 
     and communication with a consumer to obtain information 
     necessary for the processing or underwriting of a residential 
     mortgage loan.
       (D) Real estate brokerage activity defined.--The term 
     ``real estate brokerage activity'' means any activity that 
     involves offering or providing real estate brokerage services 
     to the public, including--
       (i) acting as a real estate agent or real estate broker for 
     a buyer, seller, lessor, or lessee of real property;
       (ii) listing or advertising real property for sale, 
     purchase, lease, rental, or exchange;
       (iii) providing advice in connection with sale, purchase, 
     lease, rental, or exchange of real property;
       (iv) bringing together parties interested in the sale, 
     purchase, lease, rental, or exchange of real property;
       (v) negotiating, on behalf of any party, any portion of a 
     contract relating to the sale, purchase, lease, rental, or 
     exchange of real property (other than in connection with 
     providing financing with respect to any such transaction);
       (vi) engaging in any activity for which a person engaged in 
     the activity is required to be registered or licensed as a 
     real estate agent or real estate broker under any applicable 
     law; and
       (vii) offering to engage in any activity, or act in any 
     capacity, described in clause (i), (ii), (iii), (iv), (v), or 
     (vi).
       (4) Loan processor or underwriter.--
       (A) In general.--The term ``loan processor or underwriter'' 
     means an individual who performs clerical or support duties 
     at the direction of and subject to the supervision and 
     instruction of--
       (i) a State-licensed loan originator; or
       (ii) a registered loan originator.
       (B) Clerical or support duties.--For purposes of 
     subparagraph (A), the term ``clerical or support duties'' may 
     include--

[[Page 5076]]

       (i) the receipt, collection, distribution, and analysis of 
     information common for the processing or underwriting of a 
     residential mortgage loan; and
       (ii) communicating with a consumer to obtain the 
     information necessary for the processing or underwriting of a 
     loan, to the extent that such communication does not include 
     offering or negotiating loan rates or terms, or counseling 
     consumers about residential mortgage loan rates or terms.
       (5) Nationwide mortgage licensing system and registry.--The 
     term ``Nationwide Mortgage Licensing System and Registry'' 
     means a mortgage licensing system developed and maintained by 
     the Conference of State Bank Supervisors and the American 
     Association of Residential Mortgage Regulators for the State 
     licensing and registration of State-licensed loan originators 
     and the registration of registered loan originators or any 
     system established by the Secretary under section 709.
       (6) Registered loan originator.--The term ``registered loan 
     originator'' means any individual who--
       (A) meets the definition of loan originator and is an 
     employee of a depository institution or a wholly-owned 
     subsidiary of a depository institution; and
       (B) is registered with, and maintains a unique identifier 
     through, the Nationwide Mortgage Licensing System and 
     Registry.
       (7) Residential mortgage loan.--The term ``residential 
     mortgage loan'' means any loan primarily for personal, 
     family, or household use that is secured by a mortgage, deed 
     of trust, or other equivalent consensual security interest on 
     a dwelling (as defined in section 103(v) of the Truth in 
     Lending Act) or residential real estate upon which is 
     constructed or intended to be constructed a dwelling (as so 
     defined).
       (8) Secretary.--The term ``Secretary'' means the Secretary 
     of Housing and Urban Development.
       (9) State-licensed loan originator.--The term ``State-
     licensed loan originator'' means any individual who--
       (A) is a loan originator;
       (B) is not an employee of a depository institution or any 
     wholly-owned subsidiary of a depository institution; and
       (C) is licensed by a State or by the Secretary under 
     section 708 and registered as a loan originator with, and 
     maintains a unique identifier through, the Nationwide 
     Mortgage Licensing System and Registry.
       (10) Subprime mortgage.--The term ``subprime mortgage'' 
     means a residential mortgage loan--
       (A) that is secured by real property that is used or 
     intended to be used as a principal dwelling;
       (B) that is typically offered to borrowers having weakened 
     credit histories and reduced repayment capacity, as measured 
     by lower credit scores, debt-to-income ratios, and other 
     relevant criteria; and
       (C) the characteristics of which may include--
       (i) low initial payments based on a fixed introductory rate 
     that expires after a short period and then adjusts to a 
     variable index rate plus a margin for the remaining term of 
     the loan;
       (ii) very high or no limits on how much the payment amount 
     or the interest rate may increase (referred to as ``payment 
     caps'' or ``rate caps'') on reset dates;
       (iii) limited or no documentation of the income of the 
     borrower;
       (iv) product features likely to result in frequent 
     refinancing to maintain an affordable monthly payment; and
       (v) substantial prepayment penalties or prepayment 
     penalties that extend beyond the initial fixed interest rate 
     period.
       (11) Unique identifier.--The term ``unique identifier'' 
     means a number or other identifier that--
       (A) permanently identifies a loan originator; and
       (B) is assigned by protocols established by the Nationwide 
     Mortgage Licensing System and Registry and the Federal 
     banking agencies to facilitate electronic tracking of loan 
     originators and uniform identification of, and public access 
     to, the employment history of and the publicly adjudicated 
     disciplinary and enforcement actions against loan 
     originators.

     SEC. 704. LICENSE OR REGISTRATION REQUIRED.

       (a) In General.--An individual may not engage in the 
     business of a loan originator without first--
       (1) obtaining and maintaining, through an annual renewal--
       (A) a registration as a registered loan originator; or
       (B) a license and registration as a State-licensed loan 
     originator; and
       (2) obtaining a unique identifier.
       (b) Loan Processors and Underwriters.--
       (1) Supervised loan processors and underwriters.--A loan 
     processor or underwriter who does not represent to the 
     public, through advertising or other means of communicating 
     or providing information (including the use of business 
     cards, stationery, brochures, signs, rate lists, or other 
     promotional items), that such individual can or will perform 
     any of the activities of a loan originator shall not be 
     required to be a State-licensed loan originator or a 
     registered loan originator.
       (2) Independent contractors.--A loan processor or 
     underwriter may not work as an independent contractor unless 
     such processor or underwriter is a State-licensed loan 
     originator or a registered loan originator.

     SEC. 705. STATE LICENSE AND REGISTRATION APPLICATION AND 
                   ISSUANCE.

       (a) Background Checks.--In connection with an application 
     to any State for licensing and registration as a State-
     licensed loan originator, the applicant shall, at a minimum, 
     furnish to the Nationwide Mortgage Licensing System and 
     Registry information concerning the applicant's identity, 
     including--
       (1) fingerprints for submission to the Federal Bureau of 
     Investigation, and any governmental agency or entity 
     authorized to receive such information for a State and 
     national criminal history background check; and
       (2) personal history and experience, including 
     authorization for the System to obtain--
       (A) an independent credit report obtained from a consumer 
     reporting agency described in section 603(p) of the Fair 
     Credit Reporting Act; and
       (B) information related to any administrative, civil or 
     criminal findings by any governmental jurisdiction.
       (b) Issuance of License.--The minimum standards for 
     licensing and registration as a State-licensed loan 
     originator shall include the following:
       (1) The applicant has never had a loan originator or 
     similar license revoked in any governmental jurisdiction.
       (2) The applicant has never been convicted of, or pled 
     guilty or nolo contendere to, a felony in a domestic, 
     foreign, or military court.
       (3) The applicant has demonstrated financial 
     responsibility, character, and general fitness such as to 
     command the confidence of the community and to warrant a 
     determination that the loan originator will operate honestly, 
     fairly, and efficiently within the purposes of this title.
       (4) The applicant has completed the pre-licensing education 
     requirement described in subsection (c).
       (5) The applicant has passed a written test that meets the 
     test requirement described in subsection (d).
       (6) The applicant has met a minimum net worth requirement.
       (c) Pre-Licensing Education of Loan Originators.--
       (1) Minimum educational requirements.--In order to meet the 
     pre-licensing education requirement referred to in subsection 
     (b)(4), a person shall complete at least 20 hours of 
     education approved in accordance with paragraph (2), which 
     shall include at least--
       (A) 3 hours of Federal law and regulations;
       (B) 3 hours of ethics, which shall include instruction on 
     fraud, consumer protection, and fair lending issues; and
       (C) 2 hours of training related to lending standards for 
     the subprime mortgage marketplace.
       (2) Approved educational courses.--For purposes of 
     paragraph (1), pre-licensing education courses shall be 
     reviewed, and approved by the Nationwide Mortgage Licensing 
     System and Registry.
       (3) Limitation and standards.--
       (A) Limitation.--To maintain the independence of the 
     approval process, the Nationwide Mortgage Licensing System 
     and Registry shall not directly or indirectly offer pre-
     licensure educational courses for loan originators.
       (B) Standards.--In approving courses under this section, 
     the Nationwide Mortgage Licensing System and Registry shall 
     apply reasonable standards in the review and approval of 
     courses.
       (d) Testing of Loan Originators.--
       (1) In general.--In order to meet the written test 
     requirement referred to in subsection (b)(5), an individual 
     shall pass, in accordance with the standards established 
     under this subsection, a qualified written test developed by 
     the Nationwide Mortgage Licensing System and Registry and 
     administered by an approved test provider.
       (2) Qualified test.--A written test shall not be treated as 
     a qualified written test for purposes of paragraph (1) 
     unless--
       (A) the test consists of a minimum of 100 questions; and
       (B) the test adequately measures the applicant's knowledge 
     and comprehension in appropriate subject areas, including--
       (i) ethics;
       (ii) Federal law and regulation pertaining to mortgage 
     origination;
       (iii) State law and regulation pertaining to mortgage 
     origination; and
       (iv) Federal and State law and regulation, including 
     instruction on fraud, consumer protection, subprime mortgage 
     marketplace, and fair lending issues.
       (3) Minimum competence.--
       (A) Passing score.--An individual shall not be considered 
     to have passed a qualified written test unless the individual 
     achieves a test score of not less than 75 percent correct 
     answers to questions.
       (B) Initial retests.--An individual may retake a test 3 
     consecutive times with each consecutive taking occurring in 
     less than 14 days after the preceding test.
       (C) Subsequent retests.--After 3 consecutive tests, an 
     individual shall wait at least 14 days before taking the test 
     again.
       (D) Retest after lapse of license.--A State-licensed loan 
     originator who fails to

[[Page 5077]]

     maintain a valid license for a period of 5 years or longer 
     shall retake the test, not taking into account any time 
     during which such individual is a registered loan originator.
       (e) Mortgage Call Reports.--Each mortgage licensee shall 
     submit to the Nationwide Mortgage Licensing System and 
     Registry reports of condition, which shall be in such form 
     and shall contain such information as the Nationwide Mortgage 
     Licensing System and Registry may require.

     SEC. 706. STANDARDS FOR STATE LICENSE RENEWAL.

       (a) In General.--The minimum standards for license renewal 
     for State-licensed loan originators shall include the 
     following:
       (1) The loan originator continues to meet the minimum 
     standards for license issuance.
       (2) The loan originator has satisfied the annual continuing 
     education requirements described in subsection (b).
       (b) Continuing Education for State-Licensed Loan 
     Originators.--
       (1) In general.--In order to meet the annual continuing 
     education requirements referred to in subsection (a)(2), a 
     State-licensed loan originator shall complete at least 8 
     hours of education approved in accordance with paragraph (2), 
     which shall include at least--
       (A) 3 hours of Federal law and regulations;
       (B) 2 hours of ethics, which shall include instruction on 
     fraud, consumer protection, and fair lending issues; and
       (C) 2 hours of training related to lending standards for 
     the subprime mortgage marketplace.
       (2) Approved educational courses.--For purposes of 
     paragraph (1), continuing education courses shall be 
     reviewed, and approved by the Nationwide Mortgage Licensing 
     System and Registry.
       (3) Calculation of continuing education credits.--A State-
     licensed loan originator--
       (A) may only receive credit for a continuing education 
     course in the year in which the course is taken; and
       (B) may not take the same approved course in the same or 
     successive years to meet the annual requirements for 
     continuing education.
       (4) Instructor credit.--A State-licensed loan originator 
     who is approved as an instructor of an approved continuing 
     education course may receive credit for the originator's own 
     annual continuing education requirement at the rate of 2 
     hours credit for every 1 hour taught.
       (5) Limitation and standards.--
       (A) Limitation.--To maintain the independence of the 
     approval process, the Nationwide Mortgage Licensing System 
     and Registry shall not directly or indirectly offer any 
     continuing education courses for loan originators.
       (B) Standards.--In approving courses under this section, 
     the Nationwide Mortgage Licensing System and Registry shall 
     apply reasonable standards in the review and approval of 
     courses.

     SEC. 707. SYSTEM OF REGISTRATION ADMINISTRATION BY FEDERAL 
                   BANKING AGENCIES.

       (a) Development.--
       (1) In general.--The Federal banking agencies shall 
     jointly, through the Federal Financial Institutions 
     Examination Council, develop and maintain a system for 
     registering employees of depository institutions or 
     subsidiaries of depository institutions as registered loan 
     originators with the Nationwide Mortgage Licensing System and 
     Registry. The system shall be implemented before the end of 
     the 1-year period beginning on the date of the enactment of 
     this title.
       (2) Registration requirements.--In connection with the 
     registration of any loan originator who is an employee of a 
     depository institution or a wholly-owned subsidiary of a 
     depository institution with the Nationwide Mortgage Licensing 
     System and Registry, the appropriate Federal banking agency 
     shall, at a minimum, furnish or cause to be furnished to the 
     Nationwide Mortgage Licensing System and Registry information 
     concerning the employees's identity, including--
       (A) fingerprints for submission to the Federal Bureau of 
     Investigation, and any governmental agency or entity 
     authorized to receive such information for a State and 
     national criminal history background check; and
       (B) personal history and experience, including 
     authorization for the Nationwide Mortgage Licensing System 
     and Registry to obtain information related to any 
     administrative, civil or criminal findings by any 
     governmental jurisdiction.
       (b) Coordination.--
       (1) Unique identifier.--The Federal banking agencies, 
     through the Financial Institutions Examination Council, shall 
     coordinate with the Nationwide Mortgage Licensing System and 
     Registry to establish protocols for assigning a unique 
     identifier to each registered loan originator that will 
     facilitate electronic tracking and uniform identification of, 
     and public access to, the employment history of and publicly 
     adjudicated disciplinary and enforcement actions against loan 
     originators.
       (2) Nationwide mortgage licensing system and registry 
     development.--To facilitate the transfer of information 
     required by subsection (a)(2), the Nationwide Mortgage 
     Licensing System and Registry shall coordinate with the 
     Federal banking agencies, through the Financial Institutions 
     Examination Council, concerning the development and 
     operation, by such System and Registry, of the registration 
     functionality and data requirements for loan originators.
       (c) Consideration of Factors and Procedures.--In 
     establishing the registration procedures under subsection (a) 
     and the protocols for assigning a unique identifier to a 
     registered loan originator, the Federal banking agencies 
     shall make such de minimis exceptions as may be appropriate 
     to paragraphs (1)(A) and (2) of section 704(a), shall make 
     reasonable efforts to utilize existing information to 
     minimize the burden of registering loan originators, and 
     shall consider methods for automating the process to the 
     greatest extent practicable consistent with the purposes of 
     this title.

     SEC. 708. SECRETARY OF HOUSING AND URBAN DEVELOPMENT BACKUP 
                   AUTHORITY TO ESTABLISH A LOAN ORIGINATOR 
                   LICENSING SYSTEM.

       (a) Back up Licensing System.--If, by the end of the 1-year 
     period, or the 2-year period in the case of a State whose 
     legislature meets only biennially, beginning on the date of 
     the enactment of this title or at any time thereafter, the 
     Secretary determines that a State does not have in place by 
     law or regulation a system for licensing and registering loan 
     originators that meets the requirements of sections 705 and 
     706 and subsection (d) of this section, or does not 
     participate in the Nationwide Mortgage Licensing System and 
     Registry, the Secretary shall provide for the establishment 
     and maintenance of a system for the licensing and 
     registration by the Secretary of loan originators operating 
     in such State as State-licensed loan originators.
       (b) Licensing and Registration Requirements.--The system 
     established by the Secretary under subsection (a) for any 
     State shall meet the requirements of sections 705 and 706 for 
     State-licensed loan originators.
       (c) Unique Identifier.--The Secretary shall coordinate with 
     the Nationwide Mortgage Licensing System and Registry to 
     establish protocols for assigning a unique identifier to each 
     loan originator licensed by the Secretary as a State-licensed 
     loan originator that will facilitate electronic tracking and 
     uniform identification of, and public access to, the 
     employment history of and the publicly adjudicated 
     disciplinary and enforcement actions against loan 
     originators.
       (d) State Licensing Law Requirements.--For purposes of this 
     section, the law in effect in a State meets the requirements 
     of this subsection if the Secretary determines the law 
     satisfies the following minimum requirements:
       (1) A State loan originator supervisory authority is 
     maintained to provide effective supervision and enforcement 
     of such law, including the suspension, termination, or 
     nonrenewal of a license for a violation of State or Federal 
     law.
       (2) The State loan originator supervisory authority ensures 
     that all State-licensed loan originators operating in the 
     State are registered with Nationwide Mortgage Licensing 
     System and Registry.
       (3) The State loan originator supervisory authority is 
     required to regularly report violations of such law, as well 
     as enforcement actions and other relevant information, to the 
     Nationwide Mortgage Licensing System and Registry.
       (e) Temporary Extension of Period.--The Secretary may 
     extend, by not more than 12 months, the 1-year or 2-year 
     period, as the case may be, referred to in subsection (a) for 
     the licensing of loan originators in any State under a State 
     licensing law that meets the requirements of sections 705 and 
     706 and subsection (d) if the Secretary determines that such 
     State is making a good faith effort to establish a State 
     licensing law that meets such requirements, license mortgage 
     originators under such law, and register such originators 
     with the Nationwide Mortgage Licensing System and Registry.
       (f) Limitation on HUD-Licensed Loan Originators.--Any loan 
     originator who is licensed by the Secretary under a system 
     established under this section for any State may not use such 
     license to originate loans in any other State.
       (g) Contracting Authority.--The Secretary may enter into 
     contracts with qualified independent parties, as necessary to 
     efficiently fulfill the obligations of the Secretary under 
     this Section.

     SEC. 709. BACKUP AUTHORITY TO ESTABLISH A NATIONWIDE MORTGAGE 
                   LICENSING AND REGISTRY SYSTEM.

       If at any time the Secretary determines that the Nationwide 
     Mortgage Licensing System and Registry is failing to meet the 
     requirements and purposes of this title for a comprehensive 
     licensing, supervisory, and tracking system for loan 
     originators, the Secretary shall establish and maintain such 
     a system to carry out the purposes of this title and the 
     effective registration and regulation of loan originators.

     SEC. 710. FEES.

       The Federal banking agencies, the Secretary, and the 
     Nationwide Mortgage Licensing System and Registry may charge 
     reasonable fees to cover the costs of maintaining

[[Page 5078]]

     and providing access to information from the Nationwide 
     Mortgage Licensing System and Registry, to the extent that 
     such fees are not charged to consumers for access to such 
     system and registry.

     SEC. 711. BACKGROUND CHECKS OF LOAN ORIGINATORS.

       (a) Access to Records.--Notwithstanding any other provision 
     of law, in providing identification and processing functions, 
     the Attorney General shall provide access to all criminal 
     history information to the appropriate State officials 
     responsible for regulating State-licensed loan originators to 
     the extent criminal history background checks are required 
     under the laws of the State for the licensing of such loan 
     originators.
       (b) Agent.--For the purposes of this section and in order 
     to reduce the points of contact which the Federal Bureau of 
     Investigation may have to maintain for purposes of subsection 
     (a), the Conference of State Bank Supervisors or a wholly 
     owned subsidiary may be used as a channeling agent of the 
     States for requesting and distributing information between 
     the Department of Justice and the appropriate State agencies.

     SEC. 712. CONFIDENTIALITY OF INFORMATION.

       (a) System Confidentiality.--Except as otherwise provided 
     in this section, any requirement under Federal or State law 
     regarding the privacy or confidentiality of any information 
     or material provided to the Nationwide Mortgage Licensing 
     System and Registry or a system established by the Secretary 
     under section 709, and any privilege arising under Federal or 
     State law (including the rules of any Federal or State court) 
     with respect to such information or material, shall continue 
     to apply to such information or material after the 
     information or material has been disclosed to the system. 
     Such information and material may be shared with all State 
     and Federal regulatory officials with mortgage industry 
     oversight authority without the loss of privilege or the loss 
     of confidentiality protections provided by Federal and State 
     laws.
       (b) Nonapplicability of Certain Requirements.--Information 
     or material that is subject to a privilege or confidentiality 
     under subsection (a) shall not be subject to--
       (1) disclosure under any Federal or State law governing the 
     disclosure to the public of information held by an officer or 
     an agency of the Federal Government or the respective State; 
     or
       (2) subpoena or discovery, or admission into evidence, in 
     any private civil action or administrative process, unless 
     with respect to any privilege held by the Nationwide Mortgage 
     Licensing System and Registry or the Secretary with respect 
     to such information or material, the person to whom such 
     information or material pertains waives, in whole or in part, 
     in the discretion of such person, that privilege.
       (c) Coordination With Other Law.--Any State law, including 
     any State open record law, relating to the disclosure of 
     confidential supervisory information or any information or 
     material described in subsection (a) that is inconsistent 
     with subsection (a) shall be superseded by the requirements 
     of such provision to the extent State law provides less 
     confidentiality or a weaker privilege.
       (d) Public Access to Information.--This section shall not 
     apply with respect to the information or material relating to 
     the employment history of, and publicly adjudicated 
     disciplinary and enforcement actions against, loan 
     originators that is included in Nationwide Mortgage Licensing 
     System and Registry for access by the public.

     SEC. 713. LIABILITY PROVISIONS.

       The Secretary, any State official or agency, any Federal 
     banking agency, or any organization serving as the 
     administrator of the Nationwide Mortgage Licensing System and 
     Registry or a system established by the Secretary under 
     section 9, or any officer or employee of any such entity, 
     shall not be subject to any civil action or proceeding for 
     monetary damages by reason of the good-faith action or 
     omission of any officer or employee of any such entity, while 
     acting within the scope of office or employment, relating to 
     the collection, furnishing, or dissemination of information 
     concerning persons who are loan originators or are applying 
     for licensing or registration as loan originators.

     SEC. 714. ENFORCEMENT UNDER HUD BACKUP LICENSING SYSTEM.

       (a) Summons Authority.--The Secretary may--
       (1) examine any books, papers, records, or other data of 
     any loan originator operating in any State which is subject 
     to a licensing system established by the Secretary under 
     section 708; and
       (2) summon any loan originator referred to in paragraph (1) 
     or any person having possession, custody, or care of the 
     reports and records relating to such loan originator, to 
     appear before the Secretary or any delegate of the Secretary 
     at a time and place named in the summons and to produce such 
     books, papers, records, or other data, and to give testimony, 
     under oath, as may be relevant or material to an 
     investigation of such loan originator for compliance with the 
     requirements of this title.
       (b) Examination Authority.--
       (1) In general.--If the Secretary establishes a licensing 
     system under section 708 for any State, the Secretary shall 
     appoint examiners for the purposes of administering such 
     section.
       (2) Power to examine.--Any examiner appointed under 
     paragraph (1) shall have power, on behalf of the Secretary, 
     to make any examination of any loan originator operating in 
     any State which is subject to a licensing system established 
     by the Secretary under section 708 whenever the Secretary 
     determines an examination of any loan originator is necessary 
     to determine the compliance by the originator with this 
     title.
       (3) Report of examination.--Each examiner appointed under 
     paragraph (1) shall make a full and detailed report of 
     examination of any loan originator examined to the Secretary.
       (4) Administration of oaths and affirmations; evidence.--In 
     connection with examinations of loan originators operating in 
     any State which is subject to a licensing system established 
     by the Secretary under section 708, or with other types of 
     investigations to determine compliance with applicable law 
     and regulations, the Secretary and examiners appointed by the 
     Secretary may administer oaths and affirmations and examine 
     and take and preserve testimony under oath as to any matter 
     in respect to the affairs of any such loan originator.
       (5) Assessments.--The cost of conducting any examination of 
     any loan originator operating in any State which is subject 
     to a licensing system established by the Secretary under 
     section 708 shall be assessed by the Secretary against the 
     loan originator to meet the Secretary's expenses in carrying 
     out such examination.
       (c) Cease and Desist Proceeding.--
       (1) Authority of secretary.--If the Secretary finds, after 
     notice and opportunity for hearing, that any person is 
     violating, has violated, or is about to violate any provision 
     of this title, or any regulation thereunder, with respect to 
     a State which is subject to a licensing system established by 
     the Secretary under section 708, the Secretary may publish 
     such findings and enter an order requiring such person, and 
     any other person that is, was, or would be a cause of the 
     violation, due to an act or omission the person knew or 
     should have known would contribute to such violation, to 
     cease and desist from committing or causing such violation 
     and any future violation of the same provision, rule, or 
     regulation. Such order may, in addition to requiring a person 
     to cease and desist from committing or causing a violation, 
     require such person to comply, or to take steps to effect 
     compliance, with such provision or regulation, upon such 
     terms and conditions and within such time as the Secretary 
     may specify in such order. Any such order may, as the 
     Secretary deems appropriate, require future compliance or 
     steps to effect future compliance, either permanently or for 
     such period of time as the Secretary may specify, with such 
     provision or regulation with respect to any loan originator.
       (2) Hearing.--The notice instituting proceedings pursuant 
     to paragraph (1) shall fix a hearing date not earlier than 30 
     days nor later than 60 days after service of the notice 
     unless an earlier or a later date is set by the Secretary 
     with the consent of any respondent so served.
       (3) Temporary order.--Whenever the Secretary determines 
     that the alleged violation or threatened violation specified 
     in the notice instituting proceedings pursuant to paragraph 
     (1), or the continuation thereof, is likely to result in 
     significant dissipation or conversion of assets, significant 
     harm to consumers, or substantial harm to the public interest 
     prior to the completion of the proceedings, the Secretary may 
     enter a temporary order requiring the respondent to cease and 
     desist from the violation or threatened violation and to take 
     such action to prevent the violation or threatened violation 
     and to prevent dissipation or conversion of assets, 
     significant harm to consumers, or substantial harm to the 
     public interest as the Secretary deems appropriate pending 
     completion of such proceedings. Such an order shall be 
     entered only after notice and opportunity for a hearing, 
     unless the Secretary determines that notice and hearing prior 
     to entry would be impracticable or contrary to the public 
     interest. A temporary order shall become effective upon 
     service upon the respondent and, unless set aside, limited, 
     or suspended by the Secretary or a court of competent 
     jurisdiction, shall remain effective and enforceable pending 
     the completion of the proceedings.
       (4) Review of temporary orders.--
       (A) Review by secretary.--At any time after the respondent 
     has been served with a temporary cease-and-desist order 
     pursuant to paragraph (3), the respondent may apply to the 
     Secretary to have the order set aside, limited, or suspended. 
     If the respondent has been served with a temporary cease-and-
     desist order entered without a prior hearing before the 
     Secretary, the respondent may, within 10 days after the date 
     on which the order was served, request a hearing on such 
     application and the Secretary shall hold a hearing and render 
     a decision on such application at the earliest possible time.
       (B) Judicial review.--Within--
       (i) 10 days after the date the respondent was served with a 
     temporary cease-and-desist order entered with a prior hearing 
     before the Secretary; or

[[Page 5079]]

       (ii) 10 days after the Secretary renders a decision on an 
     application and hearing under paragraph (1), with respect to 
     any temporary cease-and-desist order entered without a prior 
     hearing before the Secretary,

     the respondent may apply to the United States district court 
     for the district in which the respondent resides or has its 
     principal place of business, or for the District of Columbia, 
     for an order setting aside, limiting, or suspending the 
     effectiveness or enforcement of the order, and the court 
     shall have jurisdiction to enter such an order. A respondent 
     served with a temporary cease-and-desist order entered 
     without a prior hearing before the Secretary may not apply to 
     the court except after hearing and decision by the Secretary 
     on the respondent's application under subparagraph (A).
       (C) No automatic stay of temporary order.--The commencement 
     of proceedings under subparagraph (B) shall not, unless 
     specifically ordered by the court, operate as a stay of the 
     Secretary's order.
       (5) Authority of the secretary to prohibit persons from 
     serving as loan originators.--In any cease-and-desist 
     proceeding under paragraph (1), the Secretary may issue an 
     order to prohibit, conditionally or unconditionally, and 
     permanently or for such period of time as the Secretary shall 
     determine, any person who has violated this title or 
     regulations thereunder, from acting as a loan originator if 
     the conduct of that person demonstrates unfitness to serve as 
     a loan originator.
       (d) Authority of the Secretary To Assess Money Penalties.--
       (1) In general.--The Secretary may impose a civil penalty 
     on a loan originator operating in any State which is subject 
     to licensing system established by the Secretary under 
     section 708, if the Secretary finds, on the record after 
     notice and opportunity for hearing, that such loan originator 
     has violated or failed to comply with any requirement of this 
     title or any regulation prescribed by the Secretary under 
     this title or order issued under subsection (c).
       (2) Maximum amount of penalty.--The maximum amount of 
     penalty for each act or omission described in paragraph (1) 
     shall be $5,000 for each day the violation continues.

     SEC. 715. PREEMPTION OF STATE LAW.

       Nothing in this title may be construed to preempt the law 
     of any State, to the extent that such State law provides 
     greater protection to consumers than is provided under this 
     title.

     SEC. 716. REPORTS AND RECOMMENDATIONS TO CONGRESS.

       (a) Annual Reports.--Not later than 1 year after the date 
     of enactment of this title, and annually thereafter, the 
     Secretary shall submit a report to Congress on the 
     effectiveness of the provisions of this title, including 
     legislative recommendations, if any, for strengthening 
     consumer protections, enhancing examination standards, and 
     streamlining communication between all stakeholders involved 
     in residential mortgage loan origination and processing.
       (b) Legislative Recommendations.--Not later than 6 months 
     after the date of enactment of this title, the Secretary 
     shall make recommendations to Congress on legislative reforms 
     to the Real Estate Settlement Procedures Act of 1974, that 
     the Secretary deems appropriate to promote more transparent 
     disclosures, allowing consumers to better shop and compare 
     mortgage loan terms and settlement costs.

     SEC. 717. STUDY AND REPORTS ON DEFAULTS AND FORECLOSURES.

       (a) Study Required.--The Secretary shall conduct an 
     extensive study of the root causes of default and foreclosure 
     of home loans, using as much empirical data as is available.
       (b) Preliminary Report to Congress.--Not later than 6 
     months after the date of enactment of this title, the 
     Secretary shall submit to Congress a preliminary report 
     regarding the study required by this section.
       (c) Final Report to Congress.--Not later than 12 months 
     after the date of enactment of this title, the Secretary 
     shall submit to Congress a final report regarding the results 
     of the study required by this section, which shall include 
     any recommended legislation relating to the study, and 
     recommendations for best practices and for a process to 
     provide targeted assistance to populations with the highest 
     risk of potential default or foreclosure.
                                 ______
                                 
  SA 4411. Mr. KOHL (for himself and Mrs. Lincoln) submitted an 
amendment intended to be proposed to amendment SA 4387 submitted by Mr. 
Dodd (for himself and Mr. Shelby) to the bill H.R. 3221, moving the 
United States toward greater energy independence and security, 
developing innovative new technologies, reducing carbon emissions, 
creating green jobs, protecting consumers, increasing clean renewable 
energy production, and modernizing our energy infrastructure, and to 
amend the Internal Revenue Code of 1986 to provide tax incentives for 
the production of renewable energy and energy conservation; which was 
ordered to lie on the table; as follows:

       On page 82, between lines 7 and 8, insert the following:

                  TITLE VII--FORECLOSURE RESCUE FRAUD

     SEC. 701. DEFINITIONS.

       In this title:
       (1) Commission.--The term ``Commission'' means the Federal 
     Trade Commission.
       (2) Foreclosure consultant.--The term ``foreclosure 
     consultant''--
       (A) means a person who directly or indirectly makes any 
     solicitation, representation, or offer to a homeowner facing 
     foreclosure on residential real property to perform, with or 
     without compensation, or who performs, with or without 
     compensation, any service that such person represents will 
     prevent, postpone, or reverse the effect of such foreclosure; 
     and
       (B) does not include--
       (i) an attorney licensed to practice law in the State in 
     which the property is located who has established an 
     attorney-client relationship with the homeowner;
       (ii) a housing counseling agency approved by the Secretary; 
     or
       (iii) a person licensed as a real estate broker or 
     salesperson in the State where the property is located, and 
     such person engages in acts permitted under the licensure 
     laws of such State.
       (3) Homeowner.--The term ``homeowner'', with respect to 
     residential real property for which an action to foreclose on 
     the mortgage or deed of trust on such real property is filed, 
     means the person holding record title to such property as of 
     the date on which such action is filed.
       (4) Loan servicer.--The term ``loan servicer'' has the same 
     meaning as the term ``servicer'' in section 6(i)(2) of the 
     Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 
     2605(i)(2)).
       (5) Residential mortgage loan.--The term ``residential 
     mortgage loan'' means any loan primarily for personal, 
     family, or household use that is secured by a mortgage, deed 
     of trust, or other equivalent consensual security interest on 
     a dwelling (as defined in section 103(v) of the Truth in 
     Lending Act (15 U.S.C. 1602)(v)) or residential real estate 
     upon which is constructed or intended to be constructed a 
     dwelling (as so defined).
       (6) Residential real property.--The term ``residential real 
     property'' has the meaning given the term ``dwelling'' in 
     section 103 of the Consumer Credit Protection Act (15 U.S.C. 
     1602).
       (7) Secretary.--The term ``Secretary'' means the Secretary 
     of Housing and Urban Development.

     SEC. 702. MORTGAGE RESCUE FRAUD PROTECTION.

       (a) Limits on Foreclosure Consultants.--A foreclosure 
     consultant may not--
       (1) claim, demand, charge, collect, or receive any 
     compensation from a homeowner for services performed by such 
     foreclosure consultant with respect to residential real 
     property until such foreclosure consultant has fully 
     performed each service that such foreclosure consultant 
     contracted to perform or represented would be performed with 
     respect to such residential real property;
       (2) hold any power of attorney from any homeowner, except 
     to inspect documents, as provided by applicable law;
       (3) receive any consideration from a third party in 
     connection with services rendered to a homeowner by such 
     third party with respect to the foreclosure of residential 
     real property, unless such consideration is fully disclosed 
     to such homeowner in writing before such services are 
     rendered;
       (4) accept any wage assignment, any lien of any type on 
     real or personal property, or other security to secure the 
     payment of compensation with respect to services provided by 
     such foreclosure consultant in connection with the 
     foreclosure of residential real property; or
       (5) acquire any interest, directly or indirectly, in the 
     residence of a homeowner with whom the foreclosure consultant 
     has contracted.
       (b) Contract Requirements.--
       (1) Written contract required.--Notwithstanding any other 
     provision of law, a foreclosure consultant may not provide to 
     a homeowner a service related to the foreclosure of 
     residential real property--
       (A) unless--
       (i) a written contract for the purchase of such service has 
     been signed and dated by the homeowner; and
       (ii) such contract complies with the requirements described 
     in paragraph (2); and
       (B) before the end of the 3-business day period beginning 
     on the date on which the contract is signed.
       (2) Terms and conditions of contract.--The requirements 
     described in this paragraph, with respect to a contract, are 
     as follows:
       (A) The contract includes, in writing--
       (i) a full and detailed description of the exact nature of 
     the contract and the total amount and terms of compensation;
       (ii) the name, physical address, phone number, email 
     address, and facsimile number, if any, of the foreclosure 
     consultant to whom a notice of cancellation can be mailed or 
     sent under subsection (d); and
       (iii) a conspicuous statement in at least 12 point bold 
     face type in immediate proximity

[[Page 5080]]

     to the space reserved for the homeowner's signature on the 
     contract that reads as follows: ``You may cancel this 
     contract without penalty or obligation at any time before 
     midnight of the 3rd business day after the date on which you 
     sign the contract. See the attached notice of cancellation 
     form for an explanation of this right.''.
       (B) The contract is written in the principal language used 
     by both the homeowner and the foreclosure consultant.
       (C) The contract is accompanied by the form required by 
     subsection (c)(2).
       (c) Right to Cancel Contract.--
       (1) In general.--With respect to a contract between a 
     homeowner and a foreclosure consultant regarding the 
     foreclosure on the residential real property of such 
     homeowner, such homeowner may cancel such contract without 
     penalty or obligation by mailing a notice of cancellation not 
     later than midnight of the 3rd business day after the date on 
     which such contract is executed or would become enforceable 
     against the parties to such contract.
       (2) Cancellation form and other information.--Each contract 
     described in paragraph (1) shall be accompanied by a form, in 
     duplicate, that--
       (A) has the heading ``Notice of Cancellation'' in boldface 
     type; and
       (B) contains in boldface type the following statement:
       ``You may cancel this contract, without any penalty or 
     obligation, at any time before midnight of the 3rd day after 
     the date on which the contract is signed by you.
       ``To cancel this contract, mail or deliver a signed and 
     dated copy of this cancellation notice or any other 
     equivalent written notice to [insert name of foreclosure 
     consultant] at [insert address of foreclosure consultant] 
     before midnight on [insert date].
       ``I hereby cancel this transaction on [insert date] [insert 
     homeowner signature].''.
       (d) Waiver of Rights and Protections Prohibited.--
       (1) In general.--A waiver by a homeowner of any protection 
     provided by this section or any right of a homeowner under 
     this section--
       (A) shall be treated as void; and
       (B) may not be enforced by any Federal or State court or by 
     any person.
       (2) Attempt to obtain a waiver.--Any attempt by any person 
     to obtain a waiver from any homeowner of any protection 
     provided by this section or any right of the homeowner under 
     this section shall be treated as a violation of this section.
       (3) Contracts not in compliance.--Any contract that does 
     not comply with the applicable provisions of this title shall 
     be void and may not be enforceable by any party.

     SEC. 703. WARNINGS TO HOMEOWNERS OF FORECLOSURE RESCUE SCAMS.

       (a) In General.--If a loan servicer finds that a homeowner 
     has failed to make 2 consecutive payments on a residential 
     mortgage loan and such loan is at risk of being foreclosed 
     upon, the loan servicer shall notify such homeowner of the 
     dangers of fraudulent activities associated with foreclosure.
       (b) Notice Requirements.--Each notice provided under 
     subsection (a) shall--
       (1) be in writing;
       (2) be included with a mailing of account information;
       (3) have the heading ``Notice Required by Federal Law'' in 
     a 14-point boldface type in English and Spanish at the top of 
     such notice; and
       (4) contain the following statement: ``Mortgage foreclosure 
     is a complex process. Some people may approach you about 
     saving your home. You should be careful about any such 
     promises. There are government and nonprofit agencies you may 
     contact for helpful information about the foreclosure 
     process. Contact your lender immediately at [____], call the 
     Department of Housing and Urban Development Housing 
     Counseling Line at (800) 569-4287 to find a housing 
     counseling agency certified by the Department to assist you 
     in avoiding foreclosure, or visit the Department's Tips for 
     Avoiding Foreclosure website at http://www.hud.gov/
 foreclosure for additional assistance.'' (the blank space to 
     be filled in by the loan servicer).

     SEC. 704. CIVIL LIABILITY.

       (a) Liability Established.--Any foreclosure consultant who 
     fails to comply with any provision of section 702 or 703 with 
     respect to any other person shall be liable to such person in 
     an amount equal to the sum of the amounts determined under 
     each of the following paragraphs:
       (1) Actual damages.--The greater of--
       (A) the amount of any actual damage sustained by such 
     person as a result of such failure; or
       (B) any amount paid by the person to the foreclosure 
     consultant.
       (2) Punitive damages.--
       (A) Individual actions.--In the case of any action by an 
     individual, such amount (in addition to damages described in 
     paragraph (1)) as the court may allow.
       (B) Class actions.--In the case of a class action, the sum 
     of--
       (i) the aggregate of the amount which the court may allow 
     for each named plaintiff; and
       (ii) the aggregate of the amount which the court may allow 
     for each other class member, without regard to any minimum 
     individual recovery.
       (3) Attorneys' fees.--In the case of any successful action 
     to enforce any liability under paragraph (1) or (2), the 
     costs of the action, together with reasonable attorneys' 
     fees.
       (b) Factors To Be Considered in Awarding Punitive 
     Damages.--In determining the amount of any liability of any 
     foreclosure consultant under subsection (a)(2), the court 
     shall consider, among other relevant factors--
       (1) the frequency and persistence of noncompliance by the 
     foreclosure consultant;
       (2) the nature of the noncompliance;
       (3) the extent to which such noncompliance was intentional; 
     and
       (4) in the case of any class action, the number of 
     consumers adversely affected.

     SEC. 705. ADMINISTRATIVE ENFORCEMENT.

       (a) Enforcement by Federal Trade Commission.--
       (1) Unfair or deceptive act or practice.--A violation of a 
     prohibition described in section 702 or a failure to comply 
     with any provision of section 702 or 703 shall be treated as 
     a violation of a rule defining an unfair or deceptive act or 
     practice described under section 18(a)(1)(B) of the Federal 
     Trade Commission Act (15 U.S.C. 57a(a)(1)(B)).
       (2) Actions by the federal trade commission.--The Federal 
     Trade Commission shall enforce the provisions of sections 702 
     and 703 in the same manner, by the same means, and with the 
     same jurisdiction, powers, and duties as though all 
     applicable terms and provisions of the Federal Trade 
     Commission Act (15 U.S.C. 41 et seq.) were incorporated into 
     and made part of this title.
       (b) State Action for Violations.--
       (1) Authority of states.--In addition to such other 
     remedies as are provided under State law, whenever the chief 
     law enforcement officer of a State, or an official or agency 
     designated by a State, has reason to believe that any person 
     has violated or is violating the provisions of section 702 or 
     703, the State--
       (A) may bring an action to enjoin such violation;
       (B) may bring an action on behalf of its residents to 
     recover damages for which the person is liable to such 
     residents under section 704 as a result of the violation; and
       (C) in the case of any successful action under subparagraph 
     (A) or (B), shall be awarded the costs of the action and 
     reasonable attorney fees, as determined by the court.
       (2) Rights of federal trade commission.--
       (A) Notice to commission.--The State shall serve prior 
     written notice of any civil action under paragraph (1) upon 
     the Commission and provide the Commission with a copy of its 
     complaint, except in any case in which such prior notice is 
     not feasible, in which case the State shall serve such notice 
     immediately upon instituting such action.
       (B) Intervention.--The Commission shall have the right--
       (i) to intervene in any action referred to in subparagraph 
     (A);
       (ii) upon so intervening, to be heard on all matters 
     arising in the action; and
       (iii) to file petitions for appeal in such actions.
       (3) Investigatory powers.--For purposes of bringing any 
     action under this subsection, nothing in this subsection 
     shall prevent the chief law enforcement officer, or an 
     official or agency designated by a State, from exercising the 
     powers conferred on the chief law enforcement officer or such 
     official by the laws of such State to conduct investigations 
     or to administer oaths or affirmations, or to compel the 
     attendance of witnesses or the production of documentary and 
     other evidence.
       (4) Limitation.--Whenever the Federal Trade Commission has 
     instituted a civil action for a violation of section 702 or 
     703, no State may, during the pendency of such action, bring 
     an action under this section against any defendant named in 
     the complaint of the Commission for any violation of section 
     702 or 703 that is alleged in that complaint.

     SEC. 706. PREEMPTION.

       Nothing in this title affects any provision of State or 
     local law respecting any foreclosure consultant, residential 
     mortgage loan, or residential real property that provides 
     equal or greater protection to homeowners than what is 
     provided under this title.
                                 ______
                                 
  SA 4412. Mr. SCHUMER submitted an amendment intended to be proposed 
to amendment SA 4387 submitted by Mr. Dodd (for himself and Mr. Shelby) 
to the bill H.R. 3221, moving the United States toward greater energy 
independence and security, developing innovative new technologies, 
reducing carbon emissions, creating green jobs, protecting consumers, 
increasing clean renewable energy production, and modernizing our 
energy infrastructure, and to amend the Internal Revenue Code of 1986 
to provide tax incentives for the production of renewable energy and 
energy conservation; which was ordered to lie on the table; as follows:

       On page 82, between lines 7 and 8, insert the following:

[[Page 5081]]



     SEC. 605. RECYCLING OF TAX-EXEMPT DEBT FOR FINANCING 
                   RESIDENTIAL RENTAL PROJECTS.

       (a) In General.--Section 146(i) of the Internal Revenue 
     Code of 1986 (relating to treatment of refunding issues) is 
     amended by adding at the end the following new paragraph:
       ``(6) Treatment of certain residential rental project bonds 
     as refunding bonds irrespective of obligor.--
       ``(A) In general.--Subject to subparagraph (B), if within 6 
     months after receipt of a repayment of a conduit loan used to 
     finance a project described in 142(d) such repayment is used 
     to provide a new conduit loan for any project so described, 
     any bond which is issued to refinance the issue financing the 
     original conduit loan shall be treated as a refunding issue 
     to the extent the principal amount of such refunding issue 
     does not exceed the principal amount of the bonds refunded.
       ``(B) Limitations.--Subparagraph (A) shall apply to only 
     one refunding of the original issue and only if--
       ``(i) the refunding issue is issued not later than the 
     earlier of--

       ``(I) the date which is 4 years after the date on which the 
     original issue was issued, or
       ``(II) December 31, 2014,

       ``(ii) the refunded bond is issued before January 1, 2011,
       ``(iii) the latest maturity date of any bond of the 
     refunding issue is not later than 34 years after the date on 
     which the refunded bond was issued, and
       ``(iv) the refunding issue shall have been approved in 
     accordance with section 147(f) prior to the issuance of the 
     refunding issue.''.
       (b) Conforming Amendment.--Clause (ii) of section 
     42(h)(4)(A) of the Internal Revenue Code of 1986 (relating to 
     credits for buildings financed by tax-exempt bonds subject to 
     volume cap not taken into account) is amended by inserting 
     ``or such financing is refunded as described in section 
     146(i)(6)'' after ``provide such financing''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to repayments of conduit loans received after the 
     date of the enactment of this Act.
                                 ______
                                 
  SA 4413. Mr. SCHUMER submitted an amendment intended to be proposed 
to amendment SA 4387 submitted by Mr. Dodd (for himself and Mr. Shelby) 
to the bill H.R. 3221, moving the United States toward greater energy 
independence and security, developing innovative new technologies, 
reducing carbon emissions, creating green jobs, protecting consumers, 
increasing clean renewable energy production, and modernizing our 
energy infrastructure, and to amend the Internal Revenue Code of 1986 
to provide tax incentives for the production of renewable energy and 
energy conservation; which was ordered to lie on the table; as follows:

       On page 82, between lines 7 and 8, insert the following:

     SEC. 605. RECYCLING OF TAX-EXEMPT DEBT FOR FINANCING 
                   RESIDENTIAL RENTAL PROJECTS.

       (a) In General.--Section 146(i) of the Internal Revenue 
     Code of 1986 (relating to treatment of refunding issues) is 
     amended by adding at the end the following new paragraph:
       ``(6) Treatment of certain residential rental project bonds 
     as refunding bonds irrespective of obligor.--
       ``(A) In general.--Subject to subparagraph (B), if within 6 
     months after receipt of a repayment of a conduit loan used to 
     finance a project described in 142(d) such repayment is used 
     to provide a new conduit loan for any project so described, 
     any bond which is issued to refinance the issue financing the 
     original conduit loan shall be treated as a refunding issue 
     to the extent the principal amount of such refunding issue 
     does not exceed the principal amount of the bonds refunded.
       ``(B) Limitations.--Subparagraph (A) shall apply to only 
     one refunding of the original issue and only if--
       ``(i) the refunding issue is issued not later than the 
     earlier of--

       ``(I) the date which is 4 years after the date on which the 
     original issue was issued, or
       ``(II) December 31, 2010,

       ``(ii) the latest maturity date of any bond of the 
     refunding issue is not later than 34 years after the date on 
     which the refunded bond was issued, and
       ``(iii) the refunding issue shall have been approved in 
     accordance with section 147(f) prior to the issuance of the 
     refunding issue.''.
       (b) Conforming Amendment.--Clause (ii) of section 
     42(h)(4)(A) of the Internal Revenue Code of 1986 (relating to 
     credits for buildings financed by tax-exempt bonds subject to 
     volume cap not taken into account) is amended by inserting 
     ``or such financing is refunded as described in section 
     146(i)(6)'' after ``provide such financing''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to repayments of conduit loans received after the 
     date of the enactment of this Act.
                                 ______
                                 
  SA 4414. Mr. FEINGOLD (for himself and Mr. Coleman) submitted an 
amendment intended to be proposed to amendment SA 4387 submitted by Mr. 
Dodd (for himself and Mr. Shelby) to the bill H.R. 3221, moving the 
United States toward greater energy independence and security, 
developing innovative new technologies, reducing carbon emissions, 
creating green jobs, protecting consumers, increasing clean renewable 
energy production, and modernizing our energy infrastructure, and to 
amend the Internal Revenue Code of 1986 to provide tax incentives for 
the production of renewable energy and energy conservation; which was 
ordered to lie on the table; as follows:

       On page 53, line 24, strike ``; and'' and insert a 
     semicolon.
       On page 53, line 25, strike the period and insert a 
     semicolon.
       On page 53, after line 25, insert the following:
       (E) conduct observations of neighborhoods where abandoned 
     or foreclosed upon homes or residential properties are 
     located to document instances of vandalism, unauthorized use, 
     theft, or deterioration of the abandoned or foreclosed upon 
     homes or residential properties in order to use this 
     documentation in code enforcement proceedings; and
       (F) make efforts to bring abandoned or foreclosed upon 
     homes or residential properties into compliance with State, 
     county, city, or local building and property maintenance code 
     requirements through code enforcement proceedings.
                                 ______
                                 
  SA 4415. Ms. CANTWELL (for herself, Mr. Smith, and Mr. Kerry) 
submitted an amendment intended to be proposed to amendment SA 4387 
submitted by Mr. Dodd (for himself and Mr. Shelby) to the bill H.R. 
3221, moving the United States toward greater energy independence and 
security, developing innovative new technologies, reducing carbon 
emissions, creating green jobs, protecting consumers, increasing clean 
renewable energy production, and modernizing our energy infrastructure, 
and to amend the Internal Revenue Code of 1986 to provide tax 
incentives for the production of renewable energy and energy 
conservation; which was ordered to lie on the table; as follows:

       At the end, insert the following:

               TITLE VIII--AFFORDABLE HOUSING INVESTMENT

     SEC. 801. AMENDMENT OF 1986 CODE.

       Except as otherwise expressly provided, whenever in this 
     title an amendment or repeal is expressed in terms of an 
     amendment to, or repeal of, a section or other provision, the 
     reference shall be considered to be made to a section or 
     other provision of the Internal Revenue Code of 1986.

     Subtitle A--Facilitate Development of Housing Credit Property

     SEC. 811. RENAMING THE LOW-INCOME HOUSING CREDIT AS THE 
                   AFFORDABLE HOUSING CREDIT.

       (a) In General.--The heading of section 42 (relating to 
     low-income housing credit) is amended by striking ``LOW-
     INCOME'' and inserting ``AFFORDABLE''.
       (b) Conforming Amendments.--
       (1) Sections 38(b)(5), 42(a), 772(a)(7), and 772(d)(5) are 
     each amended by striking ``low-income'' and inserting 
     ``affordable''.
       (2) The headings of subparagraphs (3)(D) and (6)(B) of 
     section 469(i) are each amended by striking ``low-income'' 
     and inserting ``affordable''.
       (3) The table of sections for subpart D of part IV of 
     subchapter A of chapter 1 is amended by striking the item 
     relating to section 42 and inserting the following:

``Sec. 42. Affordable housing credit.''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 812. MODIFICATION OF RULES FOR DETERMINING APPLICABLE 
                   PERCENTAGE.

       (a) In General.--Subsection (b) of section 42 is amended--
       (1) by striking the semicolon and all that follows to the 
     period in the heading,
       (2) by striking paragraph (1) and inserting the following 
     new paragraph:
       ``(1) In general.--For purposes of this section, the term 
     `applicable percentage' means the greater of the alternative 
     applicable percentage determined under paragraph (2) or--
       ``(A) 9 percent in the case of any building to which 
     subparagraph (B) does not apply, and
       ``(B) 4 percent in the case of--
       ``(i) any existing building, and
       ``(ii) any new building if, at any time during the taxable 
     year or any prior taxable year, there is or was outstanding 
     any obligation--

       ``(I) not taken into account under section 146,
       ``(II) which is exempt from tax under section 103, and
       ``(III) the proceeds of which are or were used (directly or 
     indirectly) with respect to such building or the operation 
     thereof.'',

       (3) by striking ``Buildings placed in service after 1987'' 
     in the heading for paragraph

[[Page 5082]]

     (2) and inserting ``Alternative applicable percentage'', and
       (4) by striking ``In the case of any qualified low-income 
     building placed in service by the taxpayer after 1987, the 
     term `applicable percentage' means'' in paragraph (2)(A) and 
     inserting ``For purposes of paragraph (1), the term 
     `alternative applicable percentage' means''.
       (b) Modification of Rules Related to Federal Subsidies.--
       (1) In general.--Paragraph (2) of section 42(i) (relating 
     to determination of whether building is Federally subsidized) 
     is amended to read as follows:
       ``(2) Exceptions for certain new buildings otherwise 
     subject to 4 percent credit limitation.--
       ``(A) Election to reduce eligible basis by proceeds of 
     obligations.--A tax-exempt obligation shall not be taken into 
     account under subsection (b)(1)(B)(ii) if the taxpayer elects 
     to exclude the proceeds of such obligation from the eligible 
     basis of the building for purposes of subsection (d).
       ``(B) Special rule for subsidized construction financing.--
     A tax-exempt obligation used to provide construction 
     financing for any building shall not be taken into account 
     under subsection (b)(1)(B)(ii) if--
       ``(i) such obligation (when issued) identified the building 
     for which the proceeds of such obligation would be used, and
       ``(ii) such obligation is redeemed before such building is 
     placed in service.''.
       (2) Conforming amendment.--Section 1400N(c)(6) is amended 
     by striking ``December 31, 2010'' and inserting ``the date of 
     the enactment of the Affordable Housing Investment Act of 
     2008''.

     SEC. 813. INCREASE IN CREDIT FOR BUILDINGS IN STATE 
                   DESIGNATED AREAS.

       (a) In General.--Clause (i) of section 42(d)(5)(C) 
     (relating to increase in credit for buildings in high cost 
     areas) is amended by striking ``or difficult development 
     area'' and inserting ``, difficult development area, or State 
     designated project''.
       (b) State Designated Project.--Subparagraph (C) of section 
     42(d)(5) is amended by adding at the end the following new 
     clause:
       ``(v) State designated project.--For purposes of this 
     subparagraph, the term `State designated project' means any 
     project published as part of a State's qualified allocation 
     plan (as defined in subsection (m)(1)(B)) and designated by 
     the housing credit agency as meeting such criteria for 
     designation under this clause as the State in which such 
     project is located may specify. The rules of clauses (ii)(II) 
     and (iii)(II) shall not apply for purposes designations made 
     under this clause.''.
       (c) Conforming Amendment.--The heading of subparagraph (C) 
     of section 42(d)(5) is amended by striking ``buildings in 
     high cost areas'' and inserting ``certain buildings''.

     SEC. 814. MODIFICATION OF SCATTERED SITE RULE.

       Paragraph (7) of section 42(g) (relating to scattered site 
     projects) is amended to read as follows:
       ``(7) Scattered site projects.--Buildings which would (but 
     for their lack of proximity) be treated as a project for 
     purposes of this section shall be so treated if the rent-
     restricted (within the meaning of paragraph (2)) residential 
     units of such project are distributed among such buildings in 
     proportion to the number of residential units in each 
     building.''.

     SEC. 815. TREATMENT OF RURAL PROJECTS.

       Section 42(i) (relating to definitions and special rules) 
     is amended by adding at the end the following new paragraph:
       ``(8) Treatment of rural projects.--For purposes of this 
     section, in the case of any project for residential rental 
     property located in a rural area (as defined in section 520 
     of the Housing Act of 1949), any income limitation measured 
     by reference to area median gross income shall be measured by 
     reference to the greater of area median gross income or 
     national non-metropolitan median income.''.

     SEC. 816. EXPANSION OF ALLOWABLE BASIS FOR COMMUNITY SERVICE 
                   FACILITIES.

       Section 42(d)(4)(C) (relating to inclusion of basis of 
     property used to provide services for certain nontenants) is 
     amended--
       (1) by striking ``10 percent of the eligible basis'' in 
     clause (ii)and inserting ``20 percent of the first $5,000,000 
     in eligible basis plus 10 percent of the remaining eligible 
     basis'', and
       (2) by adding at the end the following new flush sentences:

     ``For each calendar year beginning after 2008, the dollar 
     amount in clause (ii) shall be increased by an amount equal 
     to such dollar amount multiplied by the cost-of-living 
     adjustment determined under section 1(f)(3), determined by 
     substituting `calendar year 2007' for `calendar year 1992' in 
     subparagraph (B) thereof. If any amount adjusted under the 
     preceding sentence is not a multiple of $100,000, such amount 
     shall be rounded to the next lowest multiple of $100,000.''.

  Subtitle B--Improve Coordination With Other Federal Housing Programs

     SEC. 821. AFFORDABLE HOUSING CREDITS ALLOWED FOR SECTION 8 
                   MODERATE REHABILITATION DEVELOPMENTS.

       Paragraph (2) of section 42(c) (relating to qualified low-
     income building) is amended by striking the last sentence.

     SEC. 822. MODIFICATION TO LOW-INCOME HOUSING CREDIT RULES FOR 
                   REDUCTION OF ELIGIBLE BASIS BY GRANTS RECEIVED.

       (a) In General.--The Secretary of the Treasury shall modify 
     Treasury Regulations section 1.42-16(b) to provide that none 
     of the following shall be considered a grant made with 
     respect to a building or its operation for purposes of 
     section 42(d)(5)(A) of the Internal Revenue Code of 1986:
       (1) Rental assistance under section 521 of the Housing Act 
     of 1949 (42 U.S.C. 1490a).
       (2) Assistance under section 538(f)(5) of the Housing Act 
     of 1949 (42 U.S.C. 1490p-2(f)(5)).
       (3) Interest reduction payments under section 236 of the 
     National Housing Act (12 U.S.C. 1715z-1).
       (4) Rental assistance under section 202 of the Housing Act 
     of 1959 (12 U.S.C. 1701q).
       (5) Rental assistance under section 811 of the Cranston-
     Gonzalez National Affordable Housing Act (42 U.S.C. 8013).
       (6) Modernization, operating, and rental assistance 
     pursuant to section 202 of the Native American Housing 
     Assistance and Self-Determination Act of 1996 (25 U.S.C. 
     4132).
       (7) Assistance under title IV of the Stewart B. McKinney 
     Homeless Assistance Act (42 U.S.C. 11361 et seq.).
       (8) Tenant-based rental assistance under section 212 of the 
     Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 
     12742).
       (9) Assistance under the AIDS Housing Opportunity Act (42 
     U.S.C. 12901 et seq.).
       (10) Per diem payments under section 2012 of title 38, 
     United States Code.
       (11) Rent supplements under section 101 of the Housing and 
     Urban Development Act of 1965 (12 U.S.C. 1701s).
       (12) Assistance under section 542 of the Housing Act of 
     1949 (42 U.S.C. 1490r).
       (13) Any other ongoing payment used to enable the property 
     to be rented to low-income tenants.
       (b) Effective Date.--The modifications required by this 
     section shall take effect on the date of the enactment of 
     this Act.
       (c) No Inference.--Nothing contained in subsection (a) may 
     be construed to create any inference with respect to the 
     consideration of any program specified under subsection (a) 
     as a grant made with respect to a building or its operation 
     for purposes of section 42(d)(5)(A) of the Internal Revenue 
     Code of 1986 as in effect on the day before such date of 
     enactment.

   Subtitle C--Facilitate Private Investment Capital to Increase the 
              Efficiency of Affordable Housing Investment

     SEC. 831. REPEAL OF RECAPTURE BOND RULE.

       (a) In General.--Paragraph (6) of section 42(j) (relating 
     to recapture of credit) is amended to read as follows:
       ``(6) No recapture on disposition of building (or interest 
     therein) reasonably expected to continue as a qualified low-
     income building.--
       ``(A) In general.--In the case of a disposition of a 
     building or an interest therein, the taxpayer shall be 
     discharged from liability for any additional tax under this 
     subsection by reason of such disposition if it is reasonably 
     expected that such building will continue to be operated as a 
     qualified low-income building for the remaining compliance 
     period with respect to such building.
       ``(B) Statute of limitations.--
       ``(i) Extension of period.--The period for assessing a 
     deficiency attributable to the application of subparagraph 
     (A) with respect to a building (or interest therein) during 
     the compliance period with respect to such building shall not 
     expire before the expiration of 3 years after the end of such 
     compliance period.
       ``(ii) Assessment.--Such deficiency may be assessed before 
     the expiration of the 3-year period referred to in clause (i) 
     notwithstanding the provisions of any other law or rule of 
     law which would otherwise prevent such assessment.''.
       (b) Information Reporting.--
       (1) In general.--Subpart B of part III of subchapter A of 
     chapter 61 (relating to information concerning transactions 
     with other persons) is amended by inserting after section 
     6050V the following new section:

     ``SEC. 6050W. RETURNS RELATING TO PAYMENT OF LOW-INCOME 
                   HOUSING CREDIT REPAYMENT AMOUNT.

       ``(a) Requirement of Reporting.--Every person who, at any 
     time during the taxable year, is an owner of a building (or 
     an interest therein)--
       ``(1) which is in the compliance period at any time during 
     such year, and
       ``(2) with respect to which recapture is required by 
     section 42(j),

     shall, at such time as the Secretary may prescribe, make the 
     return described in subsection (b).
       ``(b) Form and Manner of Returns.--A return is described in 
     this subsection if such return--
       ``(1) is in such form as the Secretary may prescribe, and
       ``(2) contains--
       ``(A) the name, address, and TIN of each person who, with 
     respect to such building or interest, was formerly an 
     investor in such owner at any time during the compliance 
     period,
       ``(B) the amount (if any) of any credit recapture amount 
     required under section 42(j), and

[[Page 5083]]

       ``(C) such other information as the Secretary may 
     prescribe.
       ``(c) Statements To Be Furnished to Persons With Respect to 
     Whom Information Is Required.--Every person required to make 
     a return under subsection (a) shall furnish to each person 
     whose name is required to be set forth in such return a 
     written statement showing--
       ``(1) the name and address of the person required to make 
     such return and the phone number of the information contact 
     for such person, and
       ``(2) the information required to be shown on the return 
     with respect to such person.

     The written statement required under the preceding sentence 
     shall be furnished on or before March 31 of the year 
     following the calendar year for which the return under 
     subsection (a) is required to be made.
       ``(d) Compliance Period.--For purposes of this section, the 
     term `compliance period' has the meaning given such term by 
     section 42(i).''.
       (2) Assessable penalties.--
       (A) Subparagraph (B) of section 6724(d)(1) (relating to 
     definitions) is amended by inserting after clause (xxi) the 
     following new clause:
       ``(xxii) section 6050W (relating to returns relating to 
     payment of low-income housing credit repayment amount),''.
       (B) Paragraph (2) of section 6724(d) is amended by striking 
     ``or'' at the end of subparagraph (BB), by striking the 
     period at the end of subparagraph (CC) and inserting ``, 
     or'', and by adding after subparagraph (CC) the following new 
     subparagraph:
       ``(DD) section 6050W (relating to returns relating to 
     payment of low-income housing credit repayment amount).''.
       (3) Clerical amendment.--The table of sections for subpart 
     B of part III of subchapter A of chapter 61 is amended by 
     inserting after the item relating to section 6050V the 
     following new item:

``Sec. 6050W. Returns relating to payment of low-income housing credit 
              repayment amount.''.
       (c) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply with respect to any liability for the credit recapture 
     amount under section 42(j) of the Internal Revenue Code of 
     1986 that arises after the date of the enactment of this Act.
       (2) Special rule for low-income housing buildings sold 
     before date of enactment of this act.--In the case of a 
     building disposed of before the date of the enactment of this 
     Act with respect to which the taxpayer posted a bond (or 
     alternative form of security) under section 42(j) of the 
     Internal Revenue Code of 1986 (as in effect before such date 
     of enactment), the taxpayer may elect (by notifying the 
     Secretary of the Treasury in writing)--
       (A) to cease to be subject to the bond requirements under 
     section 42(j)(6) of such Code, as in effect before such date 
     of enactment, and
       (B) to be subject to the requirements of section 42(j) of 
     such Code, as amended by this section.

     SEC. 832. AFFORDABLE HOUSING CREDIT ALLOWED AGAINST 
                   ALTERNATIVE MINIMUM TAX.

       (a) In General.--Subparagraph (B) of section 38(c)(4) 
     (relating to special rules for specified credits) is amended 
     by redesignating clauses (ii), (iii), and (iv) as clauses 
     (iii), (iv), and (v), respectively, and by inserting after 
     clause (i) the following new clause:
       ``(ii) the credit determined under section 42(a),''.
       (b) Effective Date.--The amendments made by this subsection 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

         Subtitle D--Help Preserve Existing Affordable Housing

     SEC. 841. REPEAL OF 10-YEAR RULE FOR ACQUISITION HOUSING 
                   CREDITS.

       (a) In General.--Subparagraph (B) of section 42(d)(2) 
     (relating to existing buildings) is amended by striking 
     clause (ii) and by redesignating clauses (iii) and (iv) as 
     clauses (ii) and (iii), respectively.
       (b) Conforming Amendment.--Section 42(d) is amended by 
     striking paragraph (6) and by redesignating paragraph (7) as 
     paragraph (6).

     SEC. 842. MODIFICATION OF RELATED PERSON RULE FOR AFFORDABLE 
                   HOUSING CREDIT.

       (a) In General.--Clause (iii) of section 42(d)(2)(D) 
     (related to related person, etc.) is amended to read as 
     follows:
       ``(iii) Related person.--For purposes of subparagraph 
     (B)(iii), a person (hereinafter in this subclause referred to 
     as the `related person') is related to any person if the 
     related person bears a relationship to such person specified 
     in section 267(b) or 707(b)(1), or the related person and 
     such person are engaged in trades or businesses under common 
     control (within the meaning of subsections (a) and (b) of 
     section 52.''.
       (b) Effective Date.--The amendment made by this subsection 
     shall take effect on the date of the enactment of this Act.

   Subtitle E--Simplify Administration of the Housing Credit Program

     SEC. 851. ELIMINATION OF CERTAIN ANNUAL RECERTIFICATIONS OF 
                   TENANT INCOMES.

       Paragraph (8) of section 42(g) (relating to qualified low-
     income housing project) is amended--
       (1) by striking ``may waive'' in the mater preceding 
     subparagraph (A);
       (2) by inserting ``may waive'' before ``any recapture'' in 
     subparagraph (A); and
       (3) by inserting ``shall waive'' before ``any annual 
     recertification'' in subparagraph (B).

 Subtitle F--Conform Multifamily Housing Bond Rules to Housing Credit 
                                 Rules

     SEC. 861. COORDINATION OF CERTAIN RULES APPLICABLE TO 
                   AFFORDABLE HOUSING CREDIT AND QUALIFIED 
                   RESIDENTIAL RENTAL PROJECT EXEMPT FACILITY 
                   BONDS.

       (a) Determination of Next Available Unit.--Paragraph (3) of 
     section 142(d) (relating to current income determinations) is 
     amended by adding at the end the following new subparagraph:
       ``(C) Exception for projects with respect to which 
     affordable housing credit is allowed.--In the case of a 
     project with respect to which credit is allowed under section 
     42, the second sentence of subparagraph (B) shall be applied 
     by substituting `building (within the meaning of section 42)' 
     for `project'.''.
       (b) Students.--Paragraph (2) of section 142(d) (relating to 
     definitions and special rules) is amended by adding at the 
     end the following new subparagraph:
       ``(C) Students.--Students (as defined in section 152(f)(2)) 
     shall not be treated as satisfying the requirements of 
     subparagraph (A) or (B) of paragraph (1) except under rules 
     similar to the rules of 42(i)(3)(D).''.
       (c) Single-Room Occupancy Units.--Paragraph (2) of section 
     142(d) (relating to definitions and special rules), as 
     amended by this Act, is further amended by adding at the end 
     the following new subparagraph:
       ``(D) Single-room occupancy units.--A unit shall not fail 
     to be treated as a residential unit merely because such unit 
     is a single-room occupancy unit (within the meaning of 
     section 42).''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to determinations of the status of qualified 
     residential rental projects for periods beginning after the 
     date of the enactment of this Act, with respect to bonds 
     issued before, on, or after such date.

         Subtitle G--Improve the Mortgage Revenue Bond Program

     SEC. 871. SPECIAL RULE FOR USE OF MORTGAGE BONDS FOR DISASTER 
                   VICTIMS, SINGLE PARENTS, AND HOMEMAKERS.

       (a) In General.--Paragraph (2) of section 143(d) (relating 
     to exceptions to 3-year requirement) is amended by striking 
     ``and'' at the end of subparagraph (C) and by inserting after 
     subparagraph (D) the following new subparagraphs:
       ``(E) financing of residences for individuals with an 
     ownership interest in a principal residence which--
       ``(i) is located in an area with respect to which a major 
     disaster has been declared by the President under section 401 
     of the Robert T. Stafford Disaster Relief and Emergency 
     Assistance Act, and
       ``(ii) has been rendered uninhabitable by reason of the 
     major disaster,
       ``(F) financing of residences for individuals who--
       ``(i) are not married, and
       ``(ii) have one or more qualifying children (within the 
     meaning of section 152), and
       ``(G) financing of residences for displaced homemakers,''.
       (b) Displaced Homemakers.--Section 143(d) is amended by 
     adding at the end the following new paragraph:
       ``(4) Displaced homemaker.--For purposes of paragraph 
     (2)(G), the term `displaced homemaker' means any individual 
     who is--
       ``(A) over 18 years of age,
       ``(B) is not employed or underemployed and is experiencing 
     difficulty in obtaining or upgrading employment, and
       ``(C) has not worked full-time full-year in the labor force 
     for a number of years before the date on which financing for 
     a residence is supplied, but has, during such years, worked 
     primarily without remuneration to care for the home and 
     family.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after the date of the enactment 
     of this Act.

     SEC. 872. REPEAL OF REQUIRED USE OF CERTAIN PRINCIPAL 
                   REPAYMENTS ON QUALIFIED MORTGAGE ISSUES TO 
                   REDEEM BONDS.

       (a) In General.--Subparagraph (A) of section 143(a)(2) 
     (relating to qualified mortgage issue defined) is amended by 
     inserting ``and'' at the end of clause (ii), by striking ``, 
     and'' at the end of clause (iii) and inserting a period, and 
     by striking clause (iv) and the last sentence.
       (b) Conforming Amendment.--Clause (ii) of section 
     143(a)(2)(D) is amended by striking ``(and clause (iv) of 
     subparagraph (A))''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to repayments received after the date of the 
     enactment of this Act.

                       Subtitle H--Effective Date

     SEC. 881. EFFECTIVE DATE.

       Except as otherwise provided in this title, the amendments 
     made by this title shall apply to--

[[Page 5084]]

       (1) housing credit dollar amounts allocated after the date 
     of the enactment of this Act, and
       (2) buildings placed in service after such date to the 
     extent paragraph (1) of section 42(h) of the Internal Revenue 
     Code of 1986 does not apply to such building by reason of 
     paragraph (4) thereof, but only with respect to bonds issued 
     after such date.
                                 ______
                                 
  SA 4416. Ms. CANTWELL (for herself, Mr. Smith, and Mr. Kerry) 
submitted an amendment intended to be proposed to amendment SA 4387 
submitted by Mr. Dodd (for himself and Mr. Shelby) to the bill H.R. 
3221, moving the United States toward greater energy independence and 
security, developing innovative new technologies, reducing carbon 
emissions, creating green jobs, protecting consumers, increasing clean 
renewable energy production, and modernizing our energy infrastructure, 
and to amend the Internal Revenue Code of 1986 to provide tax 
incentives for the production of renewable energy and energy 
conservation; which was ordered to lie on the table; as follows:

       On page 82, between lines 7 and 8, insert the following:

     SEC. 605. AFFORDABLE HOUSING CREDIT ALLOWED AGAINST 
                   ALTERNATIVE MINIMUM TAX.

       (a) In General.--Subparagraph (B) of section 38(c)(4) of 
     the Internal Revenue Code of 1986 (relating to specified 
     credits) is amended--
       (1) by redesignating clauses (ii), (iii), and (iv) as 
     clauses (iii), (iv), and (v), respectively, and
       (2) by inserting after clause (i) the following new clause:
       ``(ii) the credit determined under section 42(a),''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.
                                 ______
                                 
  SA 4417. Mr. DORGAN submitted an amendment intended to be proposed by 
him to the bill H.R. 3221, moving the United States toward greater 
energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       At the appropriate place, insert the following:

     [SEC. ------. RULEMAKING PROCEDURE FOR SUBPRIME LENDING 
                   MORTGAGES AND NONTRADITIONAL MORTGAGE LOANS.

       Notwithstanding section 18 of the Federal Trade Commission 
     Act (15 U.S.C. 57a) or any other provision of law, the 
     Federal Trade Commission shall conduct rulemaking proceedings 
     with respect to subprime mortgage lending and nontraditional 
     mortgage loans in accordance with section 553 of title 5, 
     United States Code.

     SEC. ------. ENFORCEMENT BY STATE ATTORNEYS GENERAL.

       (a) In General.--Except as provided in subsection (f), a 
     State, as parens patriae, may bring a civil action on behalf 
     of its residents in an appropriate State or district court of 
     the United States to enforce the provisions of the Federal 
     Trade Commission Act or any other Act enforced by the Federal 
     Trade Commission to obtain penalties and relief provided 
     under such Acts whenever the attorney general of the State 
     has reason to believe that the interests of the residents of 
     the State have been or are being threatened or adversely 
     affected by a violation of a subprime mortgage lending rule 
     or a nontraditional mortgage loan rule promulgated by the 
     Federal Trade Commission.
       (b) Notice.--The State shall serve written notice to the 
     Commission of any civil action under subsection (a) at least 
     60 days prior to initiating such civil action. The notice 
     shall include a copy of the complaint to be filed to initiate 
     such civil action, except that if it is not feasible for the 
     State to provide such prior notice, the State shall provide 
     notice immediately upon instituting such civil action.
       (c) Intervention by FTC.--Upon receiving the notice 
     required by subsection (b), the Commission may intervene in 
     such civil action and upon intervening--
       (1) be heard on all matters arising in such civil action; 
     and
       (2) file petitions for appeal of a decision in such civil 
     action.
       (d) Savings Clause.--Nothing in this section shall prevent 
     the attorney general of a State from exercising the powers 
     conferred on the attorney general by the laws of such State 
     to conduct investigations or to administer oaths or 
     affirmations or to compel the attendance of witnesses or the 
     production of documentary and other evidence. Nothing in this 
     section shall prohibit the attorney general of a State, or 
     other authorized State officer, from proceeding in State or 
     Federal court on the basis of an alleged violation of any 
     civil or criminal statute of that State.
       (e) Venue; Service of Process; Joinder.--In a civil action 
     brought under subsection (a)--
       (1) the venue shall be a judicial district in which the 
     lender or a related party operates or is authorized to do 
     business;
       (2) process may be served without regard to the territorial 
     limits of the district or of the State in which the civil 
     action is instituted; and
       (3) a person who participated with a lender or related 
     party an alleged violation that is being litigated in the 
     civil action may be joined in the civil action without regard 
     to the residence of the person.
       (f) Preemptive Action by FTC.--If the Commission has 
     instituted a civil action or an administrative action for 
     violation of this Act or any other Act enforced by the 
     Commission, no State attorney general, or other official or 
     agency of a State, may bring an action under this section 
     during the pendency of that action against any defendant 
     named in the complaint of the Commission for any violation of 
     this Act alleged in the complaint.
       (g) Award of Costs and Fees.--If the attorney general of a 
     State prevails in any civil action under subsection (a), the 
     State can recover reasonable costs and attorney fees from the 
     lender or related party.
                                 ______
                                 
  SA 4418. Mr. MARTINEZ (for himself and Mr. Carper) submitted an 
amendment intended to be proposed by him to the bill H.R. 3221 moving 
the United States toward greater energy independence and security, 
developing innovative new technologies, reducing carbon emissions, 
creating green jobs, protecting consumers, increasing clean renewable 
energy production, and modernizing our energy infrastructure, and to 
amend the Internal Revenue Code of 1986 to provide tax incentives for 
the production of renewable energy and energy conservation; which was 
ordered to lie on the table; as follows:

       At the end, add the following:

             TITLE VIII--REGULATION OF HOUSING ENTERPRISES

     SEC. 800. SHORT TITLE.

       This title may be cited as the ``Federal Housing Enterprise 
     Regulatory Reform Act of 2008''.

                           Subtitle A--OFHEO

     SEC. 801. DUTIES AND AUTHORITIES OF THE DIRECTOR OF OFHEO.

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

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

       ``(a) Duties.--
       ``(1) Principal duties.--The principal duties of the 
     Director shall be--
       ``(A) to oversee the operations of each enterprise; and
       ``(B) to ensure that--
       ``(i) each enterprise operates in a safe and sound manner, 
     including maintenance of adequate capital and internal 
     controls;
       ``(ii) the operations and activities of each enterprise 
     foster liquid, efficient, competitive, and resilient national 
     housing finance markets that minimize the cost of housing 
     finance (including activities relating to mortgages on 
     housing for low- and moderate- income families involving a 
     reasonable economic return that may be less than the return 
     earned on other activities);
       ``(iii) each enterprise complies with this title and the 
     rules, regulations, guidelines, and orders issued under this 
     title and the authorizing statutes; and
       ``(iv) each enterprise carries out its statutory mission 
     only through activities that are consistent with this title 
     and the authorizing statutes.
       ``(2) Scope of authority.--The authority of the Director 
     shall include the authority--
       ``(A) to review and, if warranted based on the principal 
     duties described in paragraph (1), reject any acquisition or 
     transfer of a controlling interest in an enterprise; and
       ``(B) to exercise such incidental powers as may be 
     necessary or appropriate to fulfill the duties and 
     responsibilities of the Director in the supervision and 
     regulation of each enterprise.
       ``(b) Delegation of Authority.--The Director may delegate 
     to officers or employees of the Office, including each of the 
     Deputy Directors, any of the functions, powers, or duties of 
     the Director, as the Director considers appropriate.
       ``(c) Litigation Authority.--
       ``(1) In general.--In enforcing any provision of this 
     title, any regulation or order prescribed under this title, 
     or any other provision of law, rule, regulation, or order, or 
     in any other action, suit, or proceeding to which the 
     Director is a party or in which the Director is interested, 
     and in the administration of conservatorships and 
     receiverships, the Director may act in the Director's own 
     name and through the Director's own attorneys.
       ``(2) Subject to suit.--Except as otherwise provided by 
     law, the Director shall be subject to suit (other than suits 
     on claims for

[[Page 5085]]

     money damages) by an enterprise or director or officer 
     thereof with respect to any matter under this title or any 
     other applicable provision of law, rule, order, or regulation 
     under this title, in the United States district court for the 
     judicial district in which the enterprise has its principal 
     place of business, or in the United States District Court for 
     the District of Columbia, and the Director may be served with 
     process in the manner prescribed by the Federal Rules of 
     Civil Procedure.

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

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

     SEC. 802. AUTHORITY TO REQUIRE REPORTS BY ENTERPRISES.

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

     SEC. 803. DISCLOSURE OF CHARITABLE CONTRIBUTIONS BY 
                   ENTERPRISES.

       Section 1314 of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4514), as amended by the preceding 
     provisions of this Act, is further amended by adding at the 
     end the following:
       ``(d) Disclosure of Charitable Contributions by 
     Enterprises.--
       ``(1) Required disclosure.--The Director shall, by 
     regulation, require each enterprise to submit a report 
     annually, in a format designated by the Director, containing 
     the following information:
       ``(A) Total value.--The total value of contributions made 
     by the enterprise to nonprofit organizations during its 
     previous fiscal year.
       ``(B) Substantial contributions.--If the value of 
     contributions made by the enterprise to any nonprofit 
     organization during its previous fiscal year exceeds the 
     designated amount, the name of that organization and the 
     value of contributions.
       ``(C) Substantial contributions to insider-affiliated 
     charities.--Identification of each contribution whose value 
     exceeds the designated amount that were made by the 
     enterprise during the enterprise's previous fiscal year to 
     any nonprofit organization of which a director, officer, or 
     controlling person of the enterprise, or a spouse thereof, 
     was a director or trustee, the name of such nonprofit 
     organization, and the value of the contribution.

[[Page 5086]]

       ``(2) Definitions.--For purposes of this subsection--
       ``(A) the term `designated amount' means such amount as may 
     be designated by the Director by regulation, consistent with 
     the public interest and the protection of investors for 
     purposes of this subsection; and
       ``(B) the Director may, by such regulations as the Director 
     deems necessary or appropriate in the public interest, define 
     the terms officer and controlling person.
       ``(3) Public availability.--The Director shall make the 
     information submitted pursuant to this subsection publicly 
     available.''.

     SEC. 804. ASSESSMENTS.

       Section 1316 of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4516) is amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) Annual Assessments.--The Director shall establish and 
     collect from the enterprises annual assessments in an amount 
     not exceeding the amount sufficient to provide for reasonable 
     costs and expenses of the Office, including--
       ``(1) the expenses of any examinations under section 1317;
       ``(2) the expenses of obtaining any reviews and credit 
     assessments under section 1319; and
       ``(3) such amounts in excess of actual expenses for any 
     given year as deemed necessary by the Director to maintain a 
     working capital fund in accordance with subsection (e).'';
       (2) in subsection (b)--
       (A) by realigning paragraph (2) two ems from the left 
     margin, so as to align the left margin of such paragraph with 
     the left margins of paragraph (1); and
       (B) in paragraph (3)--
       (i) in subparagraph (B), by striking ``subparagraph (A)'' 
     and inserting ``clause (i)'';
       (ii) by redesignating subparagraphs (A), (B), and (C) as 
     clauses (i), (ii) and (ii), respectively, and realigning such 
     clauses, as so redesignated, so as to be indented 6 ems from 
     the left margin;
       (iii) by striking the matter that precedes clause (i), as 
     so redesignated, and inserting the following:
       ``(3) Definition of total assets.--For purposes of this 
     section, the term `total assets' means as follows:
       ``(A) Enterprises.--With respect to an enterprise, the sum 
     of--''; and
       (3) by striking subsection (c) and inserting the following:
       ``(c) Increased Costs of Regulation.--
       ``(1) Increase for inadequate capitalization.--The 
     semiannual payments made pursuant to subsection (b) by any 
     enterprise that is not classified (for purposes of subtitle 
     B) as adequately capitalized may be increased, as necessary, 
     in the discretion of the Director to pay additional estimated 
     costs of regulation of the enterprise.
       ``(2) Adjustment for enforcement activities.--The Director 
     may adjust the amounts of any semiannual assessments for an 
     assessment under subsection (a) that are to be paid pursuant 
     to subsection (b) by an enterprise, as necessary in the 
     discretion of the Director, to ensure that the costs of 
     enforcement activities under subtitle B and C for an 
     enterprise are borne only by such enterprise.
       ``(3) Additional assessment for deficiencies.--If at any 
     time, as a result of increased costs of regulation of an 
     enterprise that is not classified (for purposes of subtitle 
     B) as adequately captitalized or as the result of supervisory 
     or enforcement activities under subtitle B or C for an 
     enterprise, the amount available from any semiannual payment 
     made by such enterprise pursuant to subsection (b) is 
     insufficient to cover the costs of the Office with respect to 
     such enterprise, the Director may make and collect from such 
     enterprise an immediate assessment to cover the amount of 
     such deficiency for the semiannual period. If, at the end of 
     any semiannual period during which such an assessment is 
     made, any amount remains from such assessment, such remaining 
     amount shall be deducted from the assessment for such 
     enterprise for the following semiannual period.'';
       (4) in subsection (d), by striking ``If'' and inserting 
     ``Except with respect to amounts collected pursuant to 
     subsection (a)(3), if''; and
       (5) by striking subsections (e) through (g) and inserting 
     the following:
       ``(e) Working Capital Fund.--At the end of each year for 
     which an assessment under this section is made, the Director 
     shall remit to each enterprise any amount of assessment 
     collected from such enterprise that is attributable to 
     subsection (a)(3) and is in excess of the amount the Director 
     deems necessary to maintain a working capital fund.
       ``(f) Treatment of Assessments.--
       ``(1) Deposit.--Amounts received by the Director from 
     assessments under this section may be deposited by the 
     Director in the manner provided in section 5234 of the 
     Revised Statutes of the United States (12 U.S.C. 192) for 
     monies deposited by the Comptroller of the Currency.
       ``(2) Not government funds.--The amounts received by the 
     Director from any assessment under this section shall not be 
     construed to be Government or public funds or appropriated 
     money.
       ``(3) No apportionment of funds.--Notwithstanding any other 
     provision of law, the amounts received by the Director from 
     any assessment under this section shall not be subject to 
     apportionment for the purpose of chapter 15 of title 31, 
     United States Code, or under any other authority.
       ``(4) Use of funds.--The Director may use any amounts 
     received by the Director from assessments under this section 
     for compensation of the Director and other employees of the 
     Office and for all other expenses of the Director and the 
     Office.
       ``(5) Availability of oversight fund amounts.--
     Notwithstanding any other provision of law, any amounts 
     remaining in the Federal Housing Enterprises Oversight Fund 
     established under this section (as in effect on the day 
     before the effective date of the Federal Housing Enterprise 
     Regulatory Reform Act of 2008), shall, upon such effective 
     date, be treated for purposes of this subsection as amounts 
     received from assessments under this section.
       ``(g) Budget and Financial Management.--
       ``(1) Financial operating plans and forecasts.--The 
     Director shall provide to the Director of the Office of 
     Management and Budget copies of the Director's financial 
     operating plans and forecasts as prepared by the Director in 
     the ordinary course of the Office's operations, and copies of 
     the quarterly reports of the Office's financial condition and 
     results of operations as prepared by the Director in the 
     ordinary course of the Office's operations.
       ``(2) Financial statements.--The Office shall prepare 
     annually a statement of assets and liabilities and surplus or 
     deficit; a statement of income and expenses; and a statement 
     of sources and application of funds.
       ``(3) Financial management systems.--The Office shall 
     implement and maintain financial management systems that 
     comply substantially with Federal financial management 
     systems requirements, applicable Federal accounting 
     standards, and that uses a general ledger system that 
     accounts for activity at the transaction level.
       ``(4) Assertion of internal controls.--The Director shall 
     provide to the Comptroller General an assertion as to the 
     effectiveness of the internal controls that apply to 
     financial reporting by the Office, using the standards 
     established in section 3512 (c) of title 31, United States 
     Code.
       ``(5) Rule of construction.--This subsection may not be 
     construed as implying any obligation on the part of the 
     Director to consult with or obtain the consent or approval of 
     the Director of the Office of Management and Budget with 
     respect to any reports, plans, forecasts, or other 
     information referred to in paragraph (1) or any jurisdiction 
     or oversight over the affairs or operations of the Office.
       ``(h) Audit of Office.--
       ``(1) In general.--The Comptroller General shall annually 
     audit the financial transactions of the Office in accordance 
     with the U.S. generally accepted government auditing 
     standards as may be prescribed by the Comptroller General of 
     the United States. The audit shall be conducted at the place 
     or places where accounts of the Office are normally kept. The 
     representatives of the Government Accountability Office shall 
     have access to the personnel and to all books, accounts, 
     documents, papers, records (including electronic records), 
     reports, files, and all other papers, automated data, things, 
     or property belonging to or under the control of or used or 
     employed by the Office pertaining to its financial 
     transactions and necessary to facilitate the audit, and such 
     representatives shall be afforded full facilities for 
     verifying transactions with the balances or securities held 
     by depositaries, fiscal agents, and custodians. All such 
     books, accounts, documents, records, reports, files, papers, 
     and property of the Office shall remain in possession and 
     custody of the Office. The Comptroller General may obtain and 
     duplicate any such books, accounts, documents, records, 
     working papers, automated data and files, or other 
     information relevant to such audit without cost to the 
     Comptroller General and the Comptroller General's right of 
     access to such information shall be enforceable pursuant to 
     section 716(c) of title 31, United States Code.
       ``(2) Report.--The Comptroller General shall submit to the 
     Congress a report of each annual audit conducted under this 
     subsection. The report to the Congress shall set forth the 
     scope of the audit and shall include the statement of assets 
     and liabilities and surplus or deficit, the statement of 
     income and expenses, the statement of sources and application 
     of funds, and such comments and information as may be deemed 
     necessary to inform Congress of the financial operations and 
     condition of the Office, together with such recommendations 
     with respect thereto as the Comptroller General may deem 
     advisable. A copy of each report shall be furnished to the 
     President and to the Office at the time submitted to the 
     Congress.
       ``(3) Assistance and costs.--For the purpose of conducting 
     an audit under this subsection, the Comptroller General may, 
     in the discretion of the Comptroller General, employ by 
     contract, without regard to section 5 of title 41, United 
     States Code, professional services of firms and organizations 
     of certified public accountants for temporary periods or for 
     special purposes. Upon the request

[[Page 5087]]

     of the Comptroller General, the Director of the Office shall 
     transfer to the Government Accountability Office from funds 
     available, the amount requested by the Comptroller General to 
     cover the full costs of any audit and report conducted by the 
     Comptroller General. The Comptroller General shall credit 
     funds transferred to the account established for salaries and 
     expenses of the Government Accountability Office, and such 
     amount shall be available upon receipt and without fiscal 
     year limitation to cover the full costs of the audit and 
     report.''.

     SEC. 805. EXAMINERS AND ACCOUNTANTS.

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

     SEC. 806. PROHIBITION AND WITHHOLDING OF EXECUTIVE 
                   COMPENSATION.

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

     SEC. 807. REVIEWS OF ENTERPRISES.

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

     ``SEC. 1319. REVIEWS OF ENTERPRISES.''; AND

       (2) by inserting after ``any entity'' the following: ``that 
     the Director considers appropriate, including an entity''.

     SEC. 808. REGULATIONS AND ORDERS.

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

     SEC. 809. RISK-BASED CAPITAL REQUIREMENTS.

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

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

       ``(a) In General.--The Director shall, by regulation, 
     establish risk-based capital requirements for the enterprises 
     to ensure that the enterprises operate in a safe and sound 
     manner, maintaining sufficient capital and reserves to 
     support the risks that arise in the operations and management 
     of the enterprises.
       ``(b) Confidentiality of Information.--Any person that 
     receives any book, record, or information from the Director 
     or an enterprise to enable the risk-based capital 
     requirements established under this section to be applied 
     shall--
       ``(1) maintain the confidentiality of the book, record, or 
     information in a manner that is generally consistent with the 
     level of confidentiality established for the material by the 
     Director or the enterprise; and
       ``(2) be exempt from section 552 of title 5, United States 
     Code, with respect to the book, record, or information.
       ``(c) No Limitation.--Nothing in this section shall limit 
     the authority of the Director to require other reports or 
     undertakings, or take other action, in furtherance of the 
     responsibilities of the Director under this Act.''.

     SEC. 810. REVIEW OF AND AUTHORITY OVER ENTERPRISE ASSETS AND 
                   LIABILITIES.

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

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

       (2) by adding at the end the following:

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

       ``(a) In General.--The Director shall conduct, on a 
     periodic basis, a review of the on-balance sheet and off-
     balance sheet assets and liabilities of each enterprise.
       ``(b) Authority To Require Disposition or Acquisition.--
     Pursuant to such a review and notwithstanding the capital 
     classifications of the enterprises, the Director may by order 
     require an enterprise, under such terms and conditions as the 
     Director determines to be appropriate, to dispose of or 
     acquire any asset or liability, if the Director determines 
     that such action is consistent with the safe and sound 
     operation of the enterprise or with the purposes of this Act 
     or any of the authorizing statutes.''.

     SEC. 811. CORPORATE GOVERNANCE OF ENTERPRISES.

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

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

       ``(a) Board of Directors.--
       ``(1) Independence.--A majority of seated members of the 
     board of directors of each enterprise shall be independent 
     board members, as defined under rules set forth by the New 
     York Stock Exchange, as such rules may be amended from time 
     to time.
       ``(2) Frequency of meetings.--To carry out its obligations 
     and duties under applicable laws, rules, regulations, and 
     guidelines, the board of directors of an enterprise shall 
     meet at least eight times a year and not less than once a 
     calendar quarter.
       ``(3) Non-management board member meetings.--The non-
     management directors of an enterprise shall meet at regularly 
     scheduled executive sessions without management 
     participation.
       ``(4) Quorum; prohibition on proxies.--For the transaction 
     of business, a quorum of the board of directors of an 
     enterprise shall be at least a majority of the seated board 
     of directors and a board member may not vote by proxy.

[[Page 5088]]

       ``(5) Information.--The management of an enterprise shall 
     provide a board member of the enterprise with such adequate 
     and appropriate information that a reasonable board member 
     would find important to the fulfillment of his or her 
     fiduciary duties and obligations.
       ``(6) Annual review.--At least annually, the board of 
     directors of each enterprise shall review, with appropriate 
     professional assistance, the requirements of laws, rules, 
     regulations, and guidelines that are applicable to its 
     activities and duties.
       ``(b) Committees of Boards of Directors.--
       ``(1) Frequency of meetings.--Any committee of the board of 
     directors of an enterprise shall meet with sufficient 
     frequency to carry out its obligations and duties under 
     applicable laws, rules, regulations, and guidelines.
       ``(2) Required committees.--Each enterprise shall provide 
     for the establishment, however styled, of the following 
     committees of the board of directors:
       ``(A) Audit committee.
       ``(B) Compensation committee.
       ``(C) Nominating/corporate governance committee.

     Such committees shall be in compliance with the charter, 
     independence, composition, expertise, duties, 
     responsibilities, and other requirements set forth under 
     section 10A(m) of the Securities Exchange Act of 1934 (15 
     U.S.C. 78j-1(m)), with respect to the audit committee, and 
     under rules issued by the New York Stock Exchange, as such 
     rules may be amended from time to time.
       ``(c) Compensation.--
       ``(1) In general.--The compensation of board members, 
     executive officers, and employees of an enterprise--
       ``(A) shall not be in excess of that which is reasonable 
     and appropriate;
       ``(B) shall be commensurate with the duties and 
     responsibilities of such persons,
       ``(C) shall be consistent with the long-term goals of the 
     enterprise;
       ``(D) shall not focus solely on earnings performance, but 
     shall take into account risk management, operational 
     stability and legal and regulatory compliance as well; and
       ``(E) shall be undertaken in a manner that complies with 
     applicable laws, rules, and regulations.
       ``(2) Reimbursement.--If an enterprise is required to 
     prepare an accounting restatement due to the material 
     noncompliance of the enterprise, as a result of misconduct, 
     with any financial reporting requirement under the securities 
     laws, the chief executive officer and chief financial officer 
     of the enterprise shall reimburse the enterprise as provided 
     under section 304 of the Sarbanes-Oxley Act of 2002 (15 
     U.S.C. 7243). This provision does not otherwise limit the 
     authority of the Office to employ remedies available to it 
     under its enforcement authorities.
       ``(d) Code of Conduct and Ethics.--
       ``(1) In general.--An enterprise shall establish and 
     administer a written code of conduct and ethics that is 
     reasonably designed to assure the ability of board members, 
     executive officers, and employees of the enterprise to 
     discharge their duties and responsibilities, on behalf of the 
     enterprise, in an objective and impartial manner, and that 
     includes standards required under section 406 of the 
     Sarbanes-Oxley Act of 2002 (15 U.S.C. 7264) and other 
     applicable laws, rules, and regulations.
       ``(2) Review.--Not less than once every three years, an 
     enterprise shall review the adequacy of its code of conduct 
     and ethics for consistency with practices appropriate to the 
     enterprise and make any appropriate revisions to such code.
       ``(e) Conduct and Responsibilities of Board of Directors.--
     The board of directors of an enterprise shall be responsible 
     for directing the conduct and affairs of the enterprise in 
     furtherance of the safe and sound operation of the enterprise 
     and shall remain reasonably informed of the condition, 
     activities, and operations of the enterprise. The 
     responsibilities of the board of directors shall include 
     having in place adequate policies and procedures to assure 
     its oversight of, among other matters, the following:
       ``(1) Corporate strategy, major plans of action, risk 
     policy, programs for legal and regulatory compliance and 
     corporate performance, including prudent plans for growth and 
     allocation of adequate resources to manage operations risk.
       ``(2) Hiring and retention of qualified executive officers 
     and succession planning for such executive officers.
       ``(3) Compensation programs of the enterprise.
       ``(4) Integrity of accounting and financial reporting 
     systems of the enterprise, including independent audits and 
     systems of internal control.
       ``(5) Process and adequacy of reporting, disclosures, and 
     communications to shareholders, investors, and potential 
     investors.
       ``(6) Extensions of credit to board members and executive 
     officers.
       ``(7) Responsiveness of executive officers in providing 
     accurate and timely reports to Federal regulators and in 
     addressing the supervisory concerns of Federal regulators in 
     a timely and appropriate manner.
       ``(f) Prohibition of Extensions of Credit.--An enterprise 
     may not directly or indirectly, including through any 
     subsidiary, extend or maintain credit, arrange for the 
     extension of credit, or renew an extension of credit, in the 
     form of a personal loan to or for any board member or 
     executive officer of the enterprise, as provided by section 
     13(k) of the Securities Exchange Act of 1934 (15 U.S.C. 
     78m(k)).
       ``(g) Certification of Disclosures.--The chief executive 
     officer and the chief financial officer of an enterprise 
     shall review each quarterly report and annual report issued 
     by the enterprise and such reports shall include 
     certifications by such officers as required by section 302 of 
     the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7241).
       ``(h) Change of Audit Partner.--An enterprise may not 
     accept audit services from an external auditing firm if the 
     lead or coordinating audit partner who has primary 
     responsibility for the external audit of the enterprise, or 
     the external audit partner who has responsibility for 
     reviewing the external audit has performed audit services for 
     the enterprise in each of the five previous fiscal years.
       ``(i) Compliance Program.--
       ``(1) Requirement.--Each enterprise shall establish and 
     maintain a compliance program that is reasonably designed to 
     assure that the enterprise complies with applicable laws, 
     rules, regulations, and internal controls.
       ``(2) Compliance officer.--The compliance program of an 
     enterprise shall be headed by a compliance officer, however 
     styled, who reports directly to the chief executive officer 
     of the enterprise. The compliance officer shall report 
     regularly to the board of directors or an appropriate 
     committee of the board of directors on compliance with and 
     the adequacy of current compliance policies and procedures of 
     the enterprise, and shall recommend any adjustments to such 
     policies and procedures that the compliance officer considers 
     necessary and appropriate.
       ``(j) Risk Management Program.--
       ``(1) Requirement.--Each enterprise shall establish and 
     maintain a risk management program that is reasonably 
     designed to manage the risks of the operations of the 
     enterprise.
       ``(2) Risk management officer.--The risk management program 
     of an enterprise shall be headed by a risk management 
     officer, however styled, who reports directly to the chief 
     executive officer of the enterprise. The risk management 
     officer shall report regularly to the board of directors or 
     an appropriate committee of the board of directors on 
     compliance with and the adequacy of current risk management 
     policies and procedures of the enterprise, and shall 
     recommend any adjustments to such policies and procedures 
     that the risk management officer considers necessary and 
     appropriate.
       ``(k) Compliance With Other Laws.--
       ``(1) Deregistered or unregistered common stock.--If an 
     enterprise deregisters or has not registered its common stock 
     with the Securities and Exchange Commission under the 
     Securities Exchange Act of 1934, the enterprise shall comply 
     or continue to comply with sections 10A(m) and 13(k) of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78j-1(m), 78m(k)) 
     and sections 302, 304, and 406 of the Sarbanes-Oxley Act of 
     2002 (15 U.S.C. 7241, 7243, 7264), subject to such 
     requirements as provided by subsection (l) of this section.
       ``(2) Registered common stock.--An enterprise that has its 
     common stock registered with the Securities and Exchange 
     Commission shall maintain such registered status, unless it 
     provides 60 days prior written notice to the Director stating 
     its intent to deregister and its understanding that it will 
     remain subject to the requirements of the sections of the 
     Securities Exchange Act of 1934 and the Sarbanes-Oxley Act of 
     2002, subject to such requirements as provided by subsection 
     (l) of this section.
       ``(l) Other Matters.--The Director may from time to time 
     establish standards, by regulation, order, or guideline, 
     regarding such other corporate governance matters of the 
     enterprises as the Director considers appropriate.
       ``(m) Modification of Standards.--In connection with 
     standards of Federal or State law (including the Revised 
     Model Corporation Act) or New York Stock Exchange rules that 
     are made applicable to an enterprise by section 1710.10 of 
     the Director's rules (12 C.F.R. 1710.10) and by subsections 
     (a), (b), (g), (i), (j), and (k) of this section, the 
     Director, in the Director's sole discretion, may modify the 
     standards contained in this section or in part 1710 of the 
     Director's rules (12 U.S.C. Part 1710) in accordance with 
     section 553 of title 5, United States Code, and upon written 
     notice to the enterprise.''.

     SEC. 812. REQUIRED REGISTRATION UNDER SECURITIES EXCHANGE ACT 
                   OF 1934.

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

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

       ``(a) In General.--Each enterprise shall register at least 
     one class of the capital stock of such enterprise, and 
     maintain such registration with the Securities and Exchange 
     Commission, under the Securities Exchange Act of 1934.

[[Page 5089]]

       ``(b) Enterprises.--Each enterprise shall comply with 
     sections 14 and 16 of the Securities Exchange Act of 1934.''.

     SEC. 813. FINANCIAL INSTITUTIONS EXAMINATION COUNCIL.

       The Federal Financial Institutions Examination Council Act 
     of 1978 is amended--
       (1) in section 1003 (12 U.S.C. 3302)--
       (A) in paragraph (1), by inserting ``Director of the Office 
     of Federal Housing Enterprise Oversight of the Department of 
     Housing and Urban Development,'' after ``Supervision,''; and
       (B) in paragraph (3), by striking ``or a credit union;'' 
     and inserting ``a credit union, or an enterprise (as that 
     term is defined in section 1303 of the Housing and Community 
     Development Act of 1992 (12 U.S.C. 4502)).'';
       (2) in section 1004(a) (12 U.S.C. 3303)--
       (A) in paragraph (4), by striking the comma at the end and 
     inserting a semicolon;
       (B) by redesignating paragraphs (5) and (6) as paragraphs 
     (6) and (7), respectively; and
       (C) by inserting after paragraph (4) the following:
       ``(5) the Director of the Office of Federal Housing 
     Enterprise Oversight of the Department of Housing and Urban 
     Development; and''; and
       (3) in section 1006(d) (12 U.S.C. 3305(d)), by striking 
     ``and employees of the Federal Housing Finance Board''.

             Subtitle B--Improvement of Mission Supervision

     SEC. 821. TRANSFER OF PROGRAM APPROVAL AND HOUSING GOAL 
                   OVERSIGHT.

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

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

       and
       (2) by striking sections 1321 and 1322.

     SEC. 822. REVIEW OF ENTERPRISE PRODUCTS.

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

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

       ``(a) In General.--The Director shall require each 
     enterprise to obtain the approval of the Director for any 
     product of the enterprise before initially offering the 
     product.
       ``(b) Standard for Approval.--In considering any request 
     for approval of a product pursuant to subsection (a), the 
     Director shall make a determination that--
       ``(1) in the case of a product of the Federal National 
     Mortgage Association, the Director determines that the 
     product is authorized under paragraph (2), (3), (4), or (5) 
     of section 302(b) or section 304 of the Federal National 
     Mortgage Association Charter Act (12 U.S.C. 1717(b), 1719);
       ``(2) in the case of a product of the Federal Home Loan 
     Mortgage Corporation, the Director determines that the 
     product is authorized under paragraph (1), (4), or (5) of 
     section 305(a) of the Federal Home Loan Mortgage Corporation 
     Act (12 U.S.C. 1454(a));
       ``(3) the product is in the public interest;
       ``(4) the product is consistent with the safety and 
     soundness of the enterprise or the mortgage finance system; 
     and
       ``(5) the product does not impair the stability or 
     competitiveness of the mortgage finance system.
       ``(c) Procedure for Approval.--
       ``(1) Submission of request.--An enterprise shall submit to 
     the Director a written request for approval of a product that 
     describes the product in such form as prescribed by order or 
     regulation of the Director.
       ``(2) Request for public comment.--Immediately upon receipt 
     of a request for approval of a product, as required under 
     paragraph (1), the Director shall publish notice of such 
     request and of the period for public comment pursuant to 
     paragraph (3) regarding the product, and a description of the 
     product proposed by the request. The Director shall give 
     interested parties the opportunity to respond in writing to 
     the proposed product.
       ``(3) Public comment period.--During the 30-day period 
     beginning on the date of publication pursuant to paragraph 
     (2) of a request for approval of a product, the Director 
     shall receive public comments regarding the proposed product.
       ``(4) Offering of product.--
       ``(A) In general.--Not later than 30 days after the close 
     of the public comment period described in paragraph (3), the 
     Director shall approve or deny the product, specifying the 
     grounds for such decision in writing.
       ``(B) Failure to act.--If the Director fails to act within 
     the 30-day period described in subparagraph (A), then the 
     enterprise may offer the product.
       ``(d) Expedited Review.--
       ``(1) Determination and notice.--If an enterprise 
     determines that any new activity, service, undertaking or 
     offering is excluded from the definition of a product under 
     subsection (f), then the enterprise shall provide written 
     notice to the Director prior to the commencement of such 
     activity, service, undertaking, or offering.
       ``(2) Director determination of applicable procedure.--
     Immediately upon receipt of any notice pursuant to paragraph 
     (1), the Director shall make a determination under paragraph 
     (3).
       ``(3) Determination and treatment as a product.--If the 
     Director determines that any new activity, service, 
     undertaking, or offering consists of, relates to, or involves 
     a product--
       ``(A) the Director shall notify the enterprise of the 
     determination;
       ``(B) the new activity, service, undertaking, or offering 
     described in the notice under paragraph (1) shall be 
     considered a product for the purposes of this section; and
       ``(C) the enterprise shall withdraw its request or submit a 
     written request for approval of the product pursuant to 
     subsection (c).
       ``(e) Conditional Approval.--The Director may conditionally 
     approve the offering of any product by an enterprise, and may 
     establish terms, conditions, or limitations with respect to 
     such product with which the enterprise must comply in order 
     to offer such product.
       ``(f) Definition of Product.--As used in this section, the 
     term `product'--
       ``(1) all programs, products, and activities, offered by 
     the enterprise in the marketplace; and
       ``(2) does not include--
       ``(A) the automated loan underwriting system of an 
     enterprise in existence as of the date of enactment of the 
     Federal Housing Enterprise Regulatory Reform Act of 2008, 
     including any upgrade to the technology, operating system, or 
     software to operate the underwriting system; or
       ``(B) any modification to the mortgage terms and conditions 
     or mortgage underwriting criteria relating to the mortgages 
     that are purchased or guaranteed by an enterprise, provided 
     that such modifications do not alter the underlying 
     transaction so as to include services or financing, other 
     than residential mortgage financing, or create significant 
     new exposure to risk for the enterprise or the holder of the 
     mortgage.
       ``(g) No Limitation.--Nothing in this section shall be 
     deemed to restrict--
       ``(1) the safety and soundness authority of the Director 
     over all new and existing products or activities; or
       ``(2) the authority of the Director to review all new and 
     existing products or activities to determine that such 
     products or activities are consistent with the statutory 
     mission of an enterprise.''.

     SEC. 823. MONITORING AND ENFORCING COMPLIANCE WITH HOUSING 
                   GOALS.

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

     SEC. 824. ASSUMPTION BY DIRECTOR OF OTHER HUD 
                   RESPONSIBILITIES.

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

     SEC. 825. ADMINISTRATIVE AND JUDICIAL ENFORCEMENT 
                   PROCEEDINGS.

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

     SEC. 826. CONFORMING LOAN LIMITS.

       (a) Fannie Mae.--Section 302(b)(2) of the Federal National 
     Mortgage Association Charter Act (12 U.S.C. 1717(b)(2)) is 
     amended by striking ``The Corporation shall establish'' and 
     all that follows through the end of the paragraph and 
     inserting the following: ``Such limitations shall not exceed 
     $417,000 for a mortgage secured by a single-family residence, 
     $533,850 for a mortgage secured by a 2-family residence, 
     $645,300 for a mortgage

[[Page 5090]]

     secured by a 3-family residence, or $801,950 for a mortgage 
     secured by a 4-family residence, except that such maximum 
     limitations shall be adjusted effective January 1 of each 
     year beginning after the effective date under section 163 of 
     the Federal Housing Enterprise Regulatory Reform Act of 2008, 
     subject to the limitations in this paragraph. Such limitation 
     shall be calculated with respect to the total original 
     principal obligation of the mortgage, and not merely with 
     respect to the interest purchased by the enterprise. Each 
     adjustment shall be made by adding to or subtracting from 
     each such amount (as it may have been previously adjusted) a 
     percentage thereof equal to the percentage increase or 
     decrease, during the most recent 12-month or fourth quarter 
     period ending before the time of determining such annual 
     adjustment, in the housing price index maintained by the 
     Director of the Office of Federal Housing Enterprise 
     Oversight (pursuant to section 1321 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4541)).''.
       (b) Freddie Mac.--Section 305(a)(2) of the Federal Home 
     Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) is 
     amended by striking ``The Corporation shall establish'' and 
     all that follows through the end of the paragraph and 
     inserting the following: ``Such limitations shall not exceed 
     $417,000 for a mortgage secured by a single-family residence, 
     $533,850 for a mortgage secured by a 2-family residence, 
     $645,300 for a mortgage secured by a 3-family residence, or 
     $801,950 for a mortgage secured by a 4-family residence, 
     except that such maximum limitations shall be adjusted 
     effective January 1 of each year beginning after the 
     effective date under section 163 of the Federal Housing 
     Enterprise Regulatory Reform Act of 2008, subject to the 
     limitations in this paragraph. Such limitation shall be 
     calculated with respect to the total original principal 
     obligation of the mortgage and not merely with respect to the 
     interest purchased by the enterprise. Each adjustment shall 
     be made by adding to or subtracting from each such amount (as 
     it may have been previously adjusted) a percentage thereof 
     equal to the percentage increase or decrease, during the most 
     recent 12-month or fourth quarter period ending before the 
     time of determining such annual adjustment, in the housing 
     price index maintained by the Director of the Office of 
     Federal Housing Enterprise Oversight (pursuant to section 
     1321 of the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 (12 U.S.C. 4541)).''.
       (c) Housing Price Index.--The Federal Housing Enterprises 
     Financial Safety and Soundness Act of 1992, as amended by 
     this Act, is amended by inserting before section 1323 the 
     following:

     ``SEC. 1322. HOUSING PRICE INDEX.

       ``(a) Method of Assessment.--The Director shall establish, 
     by regulation, and maintain a method of assessing the 
     national average single-family housing price for use in 
     adjusting the conforming loan limitations of the enterprises.
       ``(b) Considerations.--The Director shall take into 
     consideration the monthly survey of all major lenders 
     conducted by the Office to determine the national average 
     single-family house price, the Housing Price Index maintained 
     by the Office of Federal Housing Enterprise Oversight of the 
     Department of Housing and Urban Development before the 
     effective date under section 163 of the Federal Housing 
     Enterprise Regulatory Reform Act of 2008, any appropriate 
     housing price indexes of the Bureau of the Census of the 
     Department of Commerce, and any other indexes or measure that 
     the Director considers appropriate.''.

     SEC. 827. REPORTING OF MORTGAGE DATA; HOUSING GOALS.

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

     SEC. 828. DUTY TO SERVE UNDERSERVED MARKETS.

       (a) Establishment and Evaluation of Performance.--Section 
     1335 of the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 (12 U.S.C. 4565) is amended--
       (1) in the section heading, by inserting ``DUTY TO SERVE 
     UNDERSERVED MARKETS AND'' before ``OTHER'';
       (2) by striking subsection (b);
       (3) in subsection (a)--
       (A) by inserting ``and to carry out the duty under 
     subsection (a)'' before ``, each enterprise shall'';
       (B) in paragraph (3), by inserting ``and'' at the end;
       (C) in paragraph (4), by striking ``; and'' and inserting a 
     period; and
       (D) by striking paragraph (5); and
       (4) by redesignating subsection (a) as subsection (b);
       (5) by inserting before subsection (b) (as so redesignated) 
     the following:
       ``(a) Duty To Serve Underserved Markets.--
       ``(1) Duty.--In accordance with the purposes of the 
     enterprises under section 301(3) of the Federal National 
     Mortgage Association Charter Act (12 U.S.C. 1716) and section 
     301(b)(3) of the Federal Home Loan Mortgage Corporation Act 
     (12 U.S.C. 1451 note) to undertake activities relating to 
     mortgages on housing for very low-, low-, and moderate-income 
     families, involving a reasonable economic return that may be 
     less than the return earned on other activities, each 
     enterprise shall have the duty to increase the liquidity of 
     mortgage investments and improve the distribution of 
     investment capital available for mortgage financing for 
     underserved markets.
       ``(2) Underserved markets.--To meet its duty under 
     paragraph (1), each enterprise shall lead the industry in 
     developing loan products and flexible underwriting guidelines 
     to facilitate a secondary market--
       ``(A) for mortgages on manufactured homes for very low-, 
     low-, and moderate-income families;
       ``(B) to preserve housing affordable to very low-, low-, 
     and moderate-income families, including housing projects 
     subsidized under--
       ``(i) the project-based and tenant-based rental assistance 
     programs under section 8 of the United States Housing Act of 
     1937;
       ``(ii) the program under section 236 of the National 
     Housing Act;
       ``(iii) the below market interest rate mortgage program 
     under section 221(d)(4) of the National Housing Act;
       ``(iv) the supportive housing for the elderly program under 
     section 202 of the Housing Act of 1959;
       ``(v) the supportive housing program for persons with 
     disabilities under section 811 of the Cranston-Gonzalez 
     National Affordable Housing Act; and
       ``(vi) the rural rental housing program under section 515 
     of the Housing Act of 1949;
       ``(C) for mortgages on housing for very low-, low-, and 
     moderate-income families in rural areas, and for mortgages 
     for housing for any other underserved market for very low-, 
     low-, and moderate-income families that the Director 
     identifies as lacking adequate credit through conventional 
     lending sources, which underserved markets may be identified 
     by borrower type, market segment, or geographic area; and
       ``(D) for mortgages originated through State or local 
     affordable or subsidized housing programs.''; and
       (6) by adding at the end the following:
       ``(c) Evaluation and Reporting of Compliance.--
       ``(1) Method of evaluation.--Not later than 6 months after 
     the effective date of title I of the Federal Housing 
     Enterprise Regulatory Reform Act of 2008, the Director shall 
     establish a method for evaluating whether, and the extent to 
     which, the enterprises have complied with the duty under 
     subsection (a) to serve underserved markets and for rating 
     the extent of such compliance.
       ``(2) Annual evaluations.--Using the method established 
     under paragraph (1), the Director shall, for each year, 
     evaluate such compliance and rate the performance of each 
     enterprise as to the extent of compliance. The Director shall 
     include such evaluation and rating for each enterprise for a 
     year in the report for that year submitted pursuant to 
     section 1319B(a).
       ``(3) Separate evaluations.--In determining whether an 
     enterprise has complied with the duty under subsection (a), 
     the Director shall separately evaluate whether the enterprise 
     has complied with such duty with respect to each of the 
     underserved markets identified in subsection (a), taking into 
     consideration--
       ``(A) the development of loan products and more flexible 
     underwriting guidelines;
       ``(B) the extent of outreach to qualified loan sellers in 
     each of such underserved markets; and
       ``(C) the volume of loans purchased in each of such 
     underserved markets.''.
       (b) Enforcement.--Section 1336(a) of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4566(a)) is amended--
       (1) in paragraph (1), by inserting before the period ``and 
     with the duty under section 1335A of each enterprise with 
     respect to underserved markets''; and
       (2) by adding at the end the following:

[[Page 5091]]

       ``(4) Enforcement of duty to provide mortgage credit to 
     underserved markets.--Compliance with the duty under section 
     1335(a) of each enterprise to serve underserved markets (as 
     determined in accordance with section 1335(c)) shall be 
     enforceable under this section to the same extent and under 
     the same provisions that the housing goals established under 
     sections 1332, 1333, and 1334 are enforceable. Such duty 
     shall not be enforceable under any provision of this title 
     (including subpart C), other than this section, or under any 
     provision of the Federal National Mortgage Association 
     Charter Act or the Federal Home Loan Mortgage Corporation 
     Act, as applicable.''.

     SEC. 829. HOME PURCHASE GOAL.

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

     ``SEC. 1334A. HOME PURCHASE GOAL.

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

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

       ``(a) In General.--
       ``(1) Authority to address goals.--The Director may, by 
     regulation, establish additional annual housing goals, or 
     modify or rescind existing housing goals, to address national 
     housing needs consistent with the missions, of the 
     enterprises and the authorizing statutes, for the purchase of 
     mortgages, if the Director determines, by regulation, that 
     the housing need is greatest.
       ``(2) Methodology.--The Director may issue a regulation 
     which establishes or modifies any goal under this 
     subsection--
       ``(A) as a percentage of the mortgage purchases of each 
     enterprise;
       ``(B) as a dollar amount of each enterprise's mortgage 
     purchases; or
       ``(C) by such other means as necessary to increase the 
     enterprises' secondary market financing of mortgages 
     addressed by the goal.
       ``(b) Factors To Be Considered.--In establishing any 
     additional goals under this section, the Director shall 
     consider--
       ``(1) national housing needs;
       ``(2) economic, housing, and demographic conditions;
       ``(3) the performance and effort of the enterprises toward 
     achieving the need addressed by any such additional goal in 
     previous years;
       ``(4) the size of the conventional mortgage market serving 
     the need addressed by the goal, relative to the size of the 
     overall conventional mortgage market;
       ``(5) the ability of the enterprises to lead the industry 
     in making mortgage credit available to meet the need 
     addressed by the goal; and
       ``(6) the need to maintain the sound financial condition of 
     the enterprises.
       ``(c) Transition.--In order to permit a transition to the 
     establishment of any goal under this section, such goal shall 
     not be effective or enforceable during the 1-year period 
     beginning on the date of its establishment under subsection 
     (a).'';
       (2) in section 1335 (12 U.S.C. 4565(a)), by striking ``meet 
     the low-'' and all that follows through ``1334'' and 
     inserting ``meet the goals under this subpart'';
       (3) in section 1336 (12 U.S.C. 4566), by striking 
     subsections (b) and (c) and inserting the following:
       ``(b) Notice and Preliminary Determination of Failure To 
     Meet Goals.--
       ``(1) Notice.--If the Director preliminarily determines 
     that an enterprise has failed, or that there is a substantial 
     probability that an enterprise will fail, to meet any housing 
     goal under this subpart, the Director shall provide written 
     notice to the enterprise of such a preliminary determination, 
     the reasons for such determination, and the information on 
     which the Director based the determination.
       ``(2) Response period.--
       ``(A) In general.--During the 30-day period beginning on 
     the date on which an enterprise is provided notice under 
     paragraph (1), the enterprise may submit to the Director any 
     written information that the enterprise considers appropriate 
     for consideration by the Director in finally determining 
     whether such failure has occurred or whether the achievement 
     of such goal was or is feasible.
       ``(B) Extended period.--The Director may extend the period 
     under subparagraph (A) for good cause for not more than 30 
     additional days.
       ``(C) Shortened period.--The Director may shorten the 
     period under subparagraph (A) for good cause.
       ``(D) Failure to respond.--The failure of an enterprise to 
     provide information during the 30-day period under this 
     paragraph (as extended or shortened) shall waive any right of 
     the enterprise to comment on the proposed determination or 
     action of the Director.
       ``(3) Consideration of information and final 
     determination.--
       ``(A) In general.--After the expiration of the response 
     period under paragraph (2), or upon receipt of information 
     provided during such period by the enterprise, whichever 
     occurs earlier, the Director shall issue a final 
     determination on--
       ``(i) whether the enterprise has failed, or there is a 
     substantial probability that the enterprise will fail, to 
     meet the housing goal; and
       ``(ii) whether (taking into consideration market and 
     economic conditions and the financial condition of the 
     enterprise) the achievement of the housing goal was or is 
     feasible.
       ``(B) Considerations.--In making a final determination 
     under subparagraph (A), the Director shall take into 
     consideration any relevant information submitted by the 
     enterprise during the response period.
       ``(C) Notice.--The Director shall provide written notice, 
     including a response to any information submitted during the 
     response period to the enterprise, the Committee on Banking, 
     Housing, and Urban Affairs of the Senate, and the Committee 
     on Financial Services of the House of Representatives, of--
       ``(i) each final determination under this paragraph that an 
     enterprise has failed, or that there is a substantial 
     probability that the enterprise will fail, to meet a housing 
     goal;
       ``(ii) each final determination that the achievement of a 
     housing goal was or is feasible; and
       ``(iii) the reasons for each such final determination.
       ``(c) Cease and Desist, Civil Money Penalties, and Remedies 
     Including Housing Plans.--
       ``(1) Requirement.--If the Director finds, pursuant to 
     subsection (b), that there is a substantial probability that 
     an enterprise will fail, or has actually failed, to meet any 
     housing goal under this subpart, and that the achievement of 
     the housing goal was or is feasible, the Director may require 
     that the enterprise submit a housing plan under this 
     subsection. If the Director makes such a finding and the 
     enterprise refuses to submit such a plan, submits an 
     unacceptable plan, fails to comply with the plan, or the 
     Director finds that the enterprise has failed to meet any 
     housing goal under this subpart, in addition to requiring an 
     enterprise to submit a housing plan, the Director may issue a 
     cease and desist order in accordance with section 1341, 
     impose civil money penalties in accordance with section 1345, 
     or order other remedies as set forth in paragraph (7).
       ``(2) Housing plan.--If the Director requires a housing 
     plan under this subsection, such a plan shall be--
       ``(A) a feasible plan describing the specific actions the 
     enterprise will take--
       ``(i) to achieve the goal for the next calendar year; and
       ``(ii) if the Director determines that there is a 
     substantial probability that the enterprise will fail to meet 
     a goal in the current year, to make such improvements and

[[Page 5092]]

     changes in its operations as are reasonable in the remainder 
     of such year; and
       ``(B) sufficiently specific to enable the Director to 
     monitor compliance periodically.
       ``(3) Deadline for submission.--The Director shall, by 
     regulation, establish a deadline for an enterprise to comply 
     with any remedial action or submit a housing plan to the 
     Director, which may not be more than 45 days after the 
     enterprise is provided notice. The regulations shall provide 
     that the Director may extend the deadline to the extent that 
     the Director determines necessary. Any extension of the 
     deadline shall be in writing and for a time certain.
       ``(4) Approval.--The Director shall review each submission 
     by an enterprise, including a housing plan submitted under 
     this subsection, and, not later than 30 days after 
     submission, approve or disapprove the plan or other action. 
     The Director may extend the period for approval or 
     disapproval for a single additional 30-day period if the 
     Director determines it necessary. The Director shall approve 
     any plan that the Director determines is likely to succeed, 
     and conforms with the Federal National Mortgage Association 
     Charter Act or the Federal Home Loan Mortgage Corporation Act 
     (as applicable), this title, and any other applicable 
     provision of law.
       ``(5) Notice of approval and disapproval.--The Director 
     shall provide written notice to any enterprise submitting a 
     housing plan of the approval or disapproval of the plan 
     (which shall include the reasons for any disapproval of the 
     plan) and of any extension of the period for approval or 
     disapproval.
       ``(6) Resubmission.--If the initial housing plan submitted 
     by an enterprise under this section is disapproved, the 
     enterprise shall submit an amended plan acceptable to the 
     Director not later than 30 days after such disapproval, or 
     such longer period that the Director determines is in the 
     public interest.
       ``(7) Additional remedies for failure to meet goals.--In 
     addition to ordering a housing plan under this section, 
     issuing a cease and desist order under section 1341, and 
     ordering civil money penalties under section 1345, the 
     Director may seek other actions when an enterprise fails to 
     meet a goal, including requesting that the Director exercise 
     appropriate enforcement authority available to the Director 
     under this title to prohibit the enterprise from entering 
     into new activities, to freeze any pending approval of new 
     activities, and to order the enterprise to suspend activities 
     pending its achievement of the goal.'';
       (4) by striking section 1338 (12 U.S.C. 4568);
       (5) by striking from the heading of subpart C ``of Housing 
     Goals'';
       (6) by striking section 1341 (12 U.S.C. 4581) and inserting 
     the following:

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

       ``(a) Grounds for Issuance.--The Director may issue and 
     serve a notice of charges under this section upon an 
     enterprise if the Director determines that--
       ``(1) the enterprise has failed to meet any housing goal 
     established under subpart B, following a written notice and 
     determination of such failure in accordance with section 
     1336;
       ``(2) the enterprise has failed to submit a report under 
     section 1327, following a notice of such failure, an 
     opportunity for comment by the enterprise, and a final 
     determination by the Director;
       ``(3) the enterprise has failed to submit the information 
     required under subsection (m) or (n) of section 309 of the 
     Federal National Mortgage Association Charter Act, subsection 
     (e) or (f) of section 307 of the Federal Home Loan Mortgage 
     Corporation Act, or section 1337 of this title;
       ``(4) the enterprise has violated any provision of part 2 
     of this title or any order, rule, or regulation under part 2;
       ``(5) the enterprise has failed to submit a housing plan or 
     perform its responsibilities under a remedial order that 
     substantially complies with section 1336(c) within the 
     applicable period; or
       ``(6) the enterprise has failed to comply with a housing 
     plan under section 1336(c).
       ``(b) Procedure.--
       ``(1) Notice of charges.--Each notice of charges issued 
     under this section shall contain a statement of the facts 
     constituting the alleged conduct and shall fix a time and 
     place at which a hearing will be held to determine on the 
     record whether an order to cease and desist from such conduct 
     should issue.
       ``(2) Issuance of order.--If the Director finds on the 
     record made at a hearing described in paragraph (1) that any 
     conduct specified in the notice of charges has been 
     established (or the enterprise consents pursuant to section 
     1342(a)(4)), the Director may issue and serve upon the 
     enterprise an order requiring the enterprise to--
       ``(A) comply with the goals;
       ``(B) submit a report under section 1327;
       ``(C) comply with any provision of part 2 of this title or 
     any order, rule, or regulation under part 2;
       ``(D) submit a housing plan in compliance with section 
     1336(c);
       ``(E) comply with the housing plan in compliance with 
     section 1336(c); or
       ``(F) provide the information required under subsection (m) 
     or (n) of section 309 of the Federal National Mortgage 
     Association Charter Act, or subsection (e) or (f) of section 
     307 of the Federal Home Loan Mortgage Corporation Act.
       ``(c) Effective Date.--An order under this section shall 
     become effective upon the expiration of the 30-day period 
     beginning on the date of service of the order upon the 
     enterprise (except in the case of an order issued upon 
     consent, which shall become effective at the time specified 
     therein), and shall remain effective and enforceable as 
     provided in the order, except to the extent that the order is 
     stayed, modified, terminated, or set aside by action of the 
     Director of or otherwise, as provided in this subpart.''; and
       (7) by striking section 1345 and inserting the following:

     ``SEC. 1345. CIVIL MONEY PENALTIES.

       ``(a) Authority.--The Director may impose a civil money 
     penalty, in accordance with the provisions of this section, 
     on any enterprise that has failed to--
       ``(1) meet any housing goal established under subpart B, 
     following a written notice and determination of such failure 
     in accordance with section 1336(b);
       ``(2) submit a report under section 1327, following a 
     notice of such failure, an opportunity for comment by the 
     enterprise, and a final determination by the Director;
       ``(3) submit the information required under subsection (m) 
     or (n) of section 309 of the Federal National Mortgage 
     Association Charter Act or subsection (e) or (f) of section 
     307 of the Federal Home Loan Mortgage Corporation Act;
       ``(4) comply with any provision of part 2 of this title or 
     any order, rule, or regulation under part 2;
       ``(5) submit a housing plan or perform its responsibilities 
     under a remedial order issued pursuant to section 1336(c) 
     within the required period; or
       ``(6) comply with a housing plan for the enterprise under 
     section 1336(c).
       ``(b) Amount of Penalty.--The amount of a penalty under 
     this section, as determined by the Director, may not exceed--
       ``(1) for any failure described in paragraph (1), (5), or 
     (6) of subsection (a), $100,000 for each day that the failure 
     occurs; and
       ``(2) for any failure described in paragraph (2), (3), or 
     (4) of subsection (a), $50,000 for each day that the failure 
     occurs.
       ``(c) Procedures.--
       ``(1) Establishment.--The Director shall establish 
     standards and procedures governing the imposition of civil 
     money penalties under this section. Such standards and 
     procedures--
       ``(A) shall provide for the Director to notify the 
     enterprise in writing of the determination of the Director to 
     impose the penalty, which shall be made on the record;
       ``(B) shall provide for the imposition of a penalty only 
     after the enterprise has been given an opportunity for a 
     hearing on the record pursuant to section 1342; and
       ``(C) may provide for review by the Director of any 
     determination or order, or interlocutory ruling, arising from 
     a hearing.
       ``(2) Factors in determining amount of penalty.--In 
     determining the amount of a penalty under this section, the 
     Director shall give consideration to factors including--
       ``(A) the gravity of the offense;
       ``(B) any history of prior offenses;
       ``(C) ability to pay the penalty;
       ``(D) injury to the public;
       ``(E) benefits received;
       ``(F) deterrence of future violations;
       ``(G) the length of time that the enterprise should 
     reasonably take to achieve the goal; and
       ``(H) such other factors as the Director may determine, by 
     regulation, to be appropriate.
       ``(d) Action To Collect Penalty.--If an enterprise fails to 
     comply with an order by the Director imposing a civil money 
     penalty under this section, after the order is no longer 
     subject to review, as provided in sections 1342 and 1343, the 
     Director may request the Attorney General of the United 
     States to bring an action in the United States District Court 
     for the District of Columbia to obtain a monetary judgment 
     against the enterprise, and such other relief as may be 
     available. The monetary judgment may, in the court's 
     discretion, include the attorneys' fees and other expenses 
     incurred by the United States in connection with the action. 
     In an action under this subsection, the validity and 
     appropriateness of the order imposing the penalty shall not 
     be subject to review.
       ``(e) Settlement by Director.--The Director may compromise, 
     modify, or remit any civil money penalty which may be, or has 
     been, imposed under this section.
       ``(f) Deposit of Penalties.--The Director shall deposit any 
     civil money penalties collected under this section into the 
     General Fund of the Treasury.''.

                  Subtitle C--Prompt Corrective Action

     SEC. 831. CRITICAL CAPITAL LEVELS.

       Section 1363 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4613) is 
     amended--
       (1) by redesignating paragraphs (1) through (3) as 
     subparagraphs (A) through (C), respectively, and indenting 
     appropriately;
       (2) by striking ``shall be the sum of--'' and inserting the 
     following: ``shall be--
       ``(1) the sum of--''; and

[[Page 5093]]

       (3) in paragraph (1)(C), as so designated by this section, 
     by striking the period at the end and inserting the 
     following: ``; or
       ``(2) such other level as the Director shall establish, by 
     regulation.''.

     SEC. 832. CAPITAL CLASSIFICATIONS.

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

     SEC. 833. SUPERVISORY ACTIONS APPLICABLE TO UNDERCAPITALIZED 
                   ENTERPRISES.

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

     SEC. 834. SUPERVISORY ACTIONS APPLICABLE TO SIGNIFICANTLY 
                   UNDERCAPITALIZED ENTERPRISES.

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

     SEC. 835. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED 
                   ENTERPRISES.

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

     ``SEC. 1367. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED 
                   ENTERPRISES.

       ``(a) Appointment of the Office as Conservator or 
     Receiver.--
       ``(1) In general.--Notwithstanding any other provision of 
     Federal or State law, the Director may appoint the Office as 
     conservator or receiver for an enterprise in the manner 
     provided under paragraph (2) or (4). All references to the 
     conservator or receiver under this section are references to 
     the Office acting as conservator or receiver.
       ``(2) Discretionary appointment.--The Office may, at the 
     discretion of the Director, be appointed conservator or 
     receiver for the purpose of reorganizing, rehabilitating, or 
     winding up the affairs of an enterprise.
       ``(3) Grounds for discretionary appointment of conservator 
     or receiver.--The grounds for appointing conservator or 
     receiver for any enterprise under paragraph (2) are as 
     follows:
       ``(A) Substantial dissipation.--Substantial dissipation of 
     assets or earnings due to--
       ``(i) any violation of any provision of Federal or State 
     law; or
       ``(ii) any unsafe or unsound practice.
       ``(B) Unsafe or unsound condition.--An unsafe or unsound 
     condition to transact business.

[[Page 5094]]

       ``(C) Cease-and-desist orders.--Any willful violation of a 
     cease-and-desist order that has become final.
       ``(D) Concealment.--Any concealment of the books, papers, 
     records, or assets of the enterprise, or any refusal to 
     submit the books, papers, records, or affairs of the 
     enterprise, for inspection to any examiner or to any lawful 
     agent of the Director.
       ``(E) Inability to meet obligations.--The enterprise is 
     likely to be unable to pay its obligations or meet the 
     demands of its creditors in the normal course of business.
       ``(F) Losses.--The enterprise has incurred or is likely to 
     incur losses that will deplete all or substantially all of 
     its capital, and there is no reasonable prospect for the 
     enterprise to become adequately capitalized (as defined in 
     section 1364(a)(1)).
       ``(G) Violations of law.--Any violation of any law or 
     regulation, or any unsafe or unsound practice or condition 
     that is likely to--
       ``(i) cause insolvency or substantial dissipation of assets 
     or earnings; or
       ``(ii) weaken the condition of the enterprise.
       ``(H) Consent.--The enterprise, by resolution of its board 
     of directors or its shareholders or members, consents to the 
     appointment.
       ``(I) Undercapitalization.--The enterprise is 
     undercapitalized or significantly undercapitalized (as 
     defined in section 1364(a)(3)), and--
       ``(i) has no reasonable prospect of becoming adequately 
     capitalized;
       ``(ii) fails to become adequately capitalized, as required 
     by--

       ``(I) section 1365(a)(1) with respect to an enterprise; or
       ``(II) section 1366(a)(1) with respect to a significantly 
     undercapitalized enterprise;

       ``(iii) fails to submit a capital restoration plan 
     acceptable to the Office within the time prescribed under 
     section 1369C; or
       ``(iv) materially fails to implement a capital restoration 
     plan submitted and accepted under section 1369C.
       ``(J) Critical undercapitalization.--The enterprise is 
     critically undercapitalized, as defined in section 
     1364(a)(4).
       ``(K) Money laundering.--The Attorney General notifies the 
     Director in writing that the enterprise has been found guilty 
     of a criminal offense under section 1956 or 1957 of title 18, 
     United States Code, or section 5322 or 5324 of title 31, 
     United States Code.
       ``(4) Mandatory receivership.--
       ``(A) In general.--The Director shall appoint the Office as 
     receiver for an enterprise if the Director determines, in 
     writing, that--
       ``(i) the assets of the enterprise are, and during the 
     preceding 30 calendar days have been, less than the 
     obligations of the enterprise to its creditors and others; or
       ``(ii) the enterprise is not, and during the preceding 30 
     calendar days has not been, generally paying the debts of the 
     enterprise (other than debts that are the subject of a bona 
     fide dispute) as such debts become due.
       ``(B) Periodic determination required for critically 
     undercapitalized enterprise.--If an enterprise is critically 
     undercapitalized, the Director shall make a determination, in 
     writing, as to whether the enterprise meets the criteria 
     specified in clause (i) or (ii) of subparagraph (A)--
       ``(i) not later than 30 calendar days after the enterprise 
     initially becomes critically undercapitalized; and
       ``(ii) at least once during each succeeding 30-calendar day 
     period.
       ``(C) Determination not required if receivership already in 
     place.--Subparagraph (B) does not apply with respect to an 
     enterprise in any period during which the Office serves as 
     receiver for the enterprise.
       ``(D) Receivership terminates conservatorship.--The 
     appointment of the Office as receiver of an enterprise under 
     this section shall immediately terminate any conservatorship 
     established for the enterprise under this title.
       ``(5) Judicial review.--
       ``(A) In general.--If the Office is appointed conservator 
     or receiver under this section, the enterprise may, within 30 
     days of such appointment, bring an action in the United 
     States district court for the judicial district in which the 
     home office of such enterprise is located, or in the United 
     States District Court for the District of Columbia, for an 
     order requiring the Office to remove itself as conservator or 
     receiver.
       ``(B) Review.--Upon the filing of an action under 
     subparagraph (A), the court shall, upon the merits, dismiss 
     such action or direct the Office to remove itself as such 
     conservator or receiver.
       ``(6) Directors not liable for acquiescing in appointment 
     of conservator or receiver.--The members of the board of 
     directors of an enterprise shall not be liable to the 
     shareholders or creditors of the enterprise for acquiescing 
     in or consenting in good faith to the appointment of the 
     Office as conservator or receiver for that enterprise.
       ``(7) Office not subject to any other federal agency.--When 
     acting as conservator or receiver, the Office shall not be 
     subject to the direction or supervision of any other agency 
     of the United States or any State in the exercise of the 
     rights, powers, and privileges of the Office.
       ``(b) Powers and Duties of the Office as Conservator or 
     Receiver.--
       ``(1) Rulemaking authority of the office.--The Office may 
     prescribe such regulations as the Office determines to be 
     appropriate regarding the conduct of conservatorships or 
     receiverships.
       ``(2) General powers.--
       ``(A) Successor to enterprise.--The Office shall, as 
     conservator or receiver, and by operation of law, immediately 
     succeed to--
       ``(i) all rights, titles, powers, and privileges of the 
     enterprise, and of any stockholder, officer, or director of 
     such enterprise with respect to the enterprise and the assets 
     of the enterprise; and
       ``(ii) title to the books, records, and assets of any other 
     legal custodian of such enterprise.
       ``(B) Operate the enterprise.--The Office may, as 
     conservator or receiver--
       ``(i) take over the assets of and operate the enterprise 
     with all the powers of the shareholders, the directors, and 
     the officers of the enterprise and conduct all business of 
     the enterprise;
       ``(ii) collect all obligations and money due the 
     enterprise;
       ``(iii) perform all functions of the enterprise in the name 
     of the enterprise which are consistent with the appointment 
     as conservator or receiver;
       ``(iv) preserve and conserve the assets and property of the 
     enterprise; and
       ``(v) provide by contract for assistance in fulfilling any 
     function, activity, action, or duty of the Office as 
     conservator or receiver.
       ``(C) Functions of officers, directors, and shareholders of 
     an enterprise.--The Office may, by regulation or order, 
     provide for the exercise of any function by any stockholder, 
     director, or officer of any enterprise for which the Office 
     has been named conservator or receiver.
       ``(D) Powers as conservator.--The Office may, as 
     conservator, take such action as may be--
       ``(i) necessary to put the enterprise in a sound and 
     solvent condition; and
       ``(ii) appropriate to carry on the business of the 
     enterprise and preserve and conserve the assets and property 
     of the enterprise.
       ``(E) Additional powers as receiver.--In any case in which 
     the Office is acting as receiver, the Office shall place the 
     enterprise in liquidation and proceed to realize upon the 
     assets of the enterprise in such manner as the Office deems 
     appropriate, including through the sale of assets, the 
     transfer of assets to a limited-life enterprise established 
     under subsection (i), or the exercise of any other rights or 
     privileges granted to the Office under this paragraph.
       ``(F) Organization of new enterprise.--The Office shall, as 
     receiver for an enterprise, organize a successor enterprise 
     that will operate pursuant to subsection (i).
       ``(G) Transfer or sale of assets and liabilities.--The 
     Office may, as conservator or receiver, transfer or sell any 
     asset or liability of the enterprise in default, and may do 
     so without any approval, assignment, or consent with respect 
     to such transfer or sale.
       ``(H) Payment of valid obligations.--The Office, as 
     conservator or receiver, shall, to the extent of proceeds 
     realized from the performance of contracts or sale of the 
     assets of an enterprise, pay all valid obligations of the 
     enterprise that are due and payable at the time of the 
     appointment of the Office as conservator or receiver, in 
     accordance with the prescriptions and limitations of this 
     section.
       ``(I) Subpoena authority.--
       ``(i) In general.--

       ``(I) Office authority.--The Office may, as conservator or 
     receiver, and for purposes of carrying out any power, 
     authority, or duty with respect to an enterprise (including 
     determining any claim against the enterprise and determining 
     and realizing upon any asset of any person in the course of 
     collecting money due the enterprise), exercise any power 
     established under section 1348.
       ``(II) Applicability of law.--The provisions of section 
     1348 shall apply with respect to the exercise of any power 
     under this subparagraph, in the same manner as such 
     provisions apply under that section.

       ``(ii) Subpoena.--A subpoena or subpoena duces tecum may be 
     issued under clause (i) only by, or with the written approval 
     of, the Director, or the designee of the Director.
       ``(iii) Rule of construction.--This subsection shall not be 
     construed to limit any rights that the Office, in any 
     capacity, might otherwise have under section 1317 or 1379B.
       ``(J) Incidental powers.--The Office may, as conservator or 
     receiver--
       ``(i) exercise all powers and authorities specifically 
     granted to conservators or receivers, respectively, under 
     this section, and such incidental powers as shall be 
     necessary to carry out such powers; and
       ``(ii) take any action authorized by this section, which 
     the Office determines is in the best interests of the 
     enterprise or the Office.
       ``(K) Other provisions.--
       ``(i) Shareholders and creditors of failed enterprise.--
     Notwithstanding any other provision of law, the appointment 
     of the Office as receiver for an enterprise pursuant to 
     paragraph (2) or (4) of subsection (a) and its succession, by 
     operation of law, to the rights, titles, powers, and 
     privileges described in subsection (b)(2)(A) shall terminate 
     all rights and claims that the stockholders and creditors of 
     the enterprise may have against the assets or charter of the 
     enterprise or the Office arising as a result of

[[Page 5095]]

     their status as stockholders or creditors, except for their 
     right to payment, resolution, or other satisfaction of their 
     claims, as permitted under subsections (b)(9), (c), and (e).
       ``(ii) Assets of enterprise.--Notwithstanding any other 
     provision of law, for purposes of this section, the charter 
     of an enterprise shall not be considered an asset of the 
     enterprise.
       ``(3) Authority of receiver to determine claims.--
       ``(A) In general.--The Office may, as receiver, determine 
     claims in accordance with the requirements of this subsection 
     and any regulations prescribed under paragraph (4).
       ``(B) Notice requirements.--The receiver, in any case 
     involving the liquidation or winding up of the affairs of a 
     closed enterprise, shall--
       ``(i) promptly publish a notice to the creditors of the 
     enterprise to present their claims, together with proof, to 
     the receiver by a date specified in the notice which shall be 
     not less than 90 days after the date of publication of such 
     notice; and
       ``(ii) republish such notice approximately 1 month and 2 
     months, respectively, after the date of publication under 
     clause (i).
       ``(C) Mailing required.--The receiver shall mail a notice 
     similar to the notice published under subparagraph (B)(i) at 
     the time of such publication to any creditor shown on the 
     books of the enterprise--
       ``(i) at the last address of the creditor appearing in such 
     books; or
       ``(ii) upon discovery of the name and address of a claimant 
     not appearing on the books of the enterprise, within 30 days 
     after the discovery of such name and address.
       ``(4) Rulemaking authority relating to determination of 
     claims.--Subject to subsection (c), the Director may 
     prescribe regulations regarding the allowance or disallowance 
     of claims by the receiver and providing for administrative 
     determination of claims and review of such determination.
       ``(5) Procedures for determination of claims.--
       ``(A) Determination period.--
       ``(i) In general.--Before the end of the 180-day period 
     beginning on the date on which any claim against an 
     enterprise is filed with the Office as receiver, the Office 
     shall determine whether to allow or disallow the claim and 
     shall notify the claimant of any determination with respect 
     to such claim.
       ``(ii) Extension of time.--The period described in clause 
     (i) may be extended by a written agreement between the 
     claimant and the Office.
       ``(iii) Mailing of notice sufficient.--The requirements of 
     clause (i) shall be deemed to be satisfied if the notice of 
     any determination with respect to any claim is mailed to the 
     last address of the claimant which appears--

       ``(I) on the books of the enterprise;
       ``(II) in the claim filed by the claimant; or
       ``(III) in documents submitted in proof of the claim.

       ``(iv) Contents of notice of disallowance.--If any claim 
     filed under clause (i) is disallowed, the notice to the 
     claimant shall contain--

       ``(I) a statement of each reason for the disallowance; and
       ``(II) the procedures available for obtaining agency review 
     of the determination to disallow the claim or judicial 
     determination of the claim.

       ``(B) Allowance of proven claim.--The receiver shall allow 
     any claim received on or before the date specified in the 
     notice published under paragraph (3)(B)(i) by the receiver 
     from any claimant which is proved to the satisfaction of the 
     receiver.
       ``(C) Disallowance of claims filed after filing period.--
     Claims filed after the date specified in the notice published 
     under paragraph (3)(B)(i), or the date specified under 
     paragraph (3)(C), shall be disallowed and such disallowance 
     shall be final.
       ``(D) Authority to disallow claims.--
       ``(i) In general.--The receiver may disallow any portion of 
     any claim by a creditor or claim of security, preference, or 
     priority which is not proved to the satisfaction of the 
     receiver.
       ``(ii) Payments to less than fully secured creditors.--In 
     the case of a claim of a creditor against an enterprise which 
     is secured by any property or other asset of such enterprise, 
     the receiver--

       ``(I) may treat the portion of such claim which exceeds an 
     amount equal to the fair market value of such property or 
     other asset as an unsecured claim against the enterprise; and
       ``(II) may not make any payment with respect to such 
     unsecured portion of the claim, other than in connection with 
     the disposition of all claims of unsecured creditors of the 
     enterprise.

       ``(iii) Exceptions.--No provision of this paragraph shall 
     apply with respect to--

       ``(I) any extension of credit from any Federal Reserve Bank 
     or the United States Treasury; or
       ``(II) any security interest in the assets of the 
     enterprise securing any such extension of credit.

       ``(E) No judicial review of determination pursuant to 
     subparagraph (d).--No court may review the determination of 
     the Office under subparagraph (D) to disallow a claim.
       ``(F) Legal effect of filing.--
       ``(i) Statute of limitation tolled.--For purposes of any 
     applicable statute of limitations, the filing of a claim with 
     the receiver shall constitute a commencement of an action.
       ``(ii) No prejudice to other actions.--Subject to paragraph 
     (10), the filing of a claim with the receiver shall not 
     prejudice any right of the claimant to continue any action 
     which was filed before the date of the appointment of the 
     receiver, subject to the determination of claims by the 
     receiver.
       ``(6) Provision for judicial determination of claims.--
       ``(A) In general.--The claimant may file suit on a claim 
     (or continue an action commenced before the appointment of 
     the receiver) in the district or territorial court of the 
     United States for the district within which the principal 
     place of business of the enterprise is located or the United 
     States District Court for the District of Columbia (and such 
     court shall have jurisdiction to hear such claim), before the 
     end of the 60-day period beginning on the earlier of--
       ``(i) the end of the period described in paragraph 
     (5)(A)(i) with respect to any claim against an enterprise for 
     which the Office is receiver; or
       ``(ii) the date of any notice of disallowance of such claim 
     pursuant to paragraph (5)(A)(i).
       ``(B) Statute of limitations.--A claim shall be deemed to 
     be disallowed (other than any portion of such claim which was 
     allowed by the receiver), and such disallowance shall be 
     final, and the claimant shall have no further rights or 
     remedies with respect to such claim, if the claimant fails, 
     before the end of the 60-day period described under 
     subparagraph (A), to file suit on such claim (or continue an 
     action commenced before the appointment of the receiver).
       ``(7) Review of claims.--
       ``(A) Other review procedures.--
       ``(i) In general.--The Office shall establish such 
     alternative dispute resolution processes as may be 
     appropriate for the resolution of claims filed under 
     paragraph (5)(A)(i).
       ``(ii) Criteria.--In establishing alternative dispute 
     resolution processes, the Office shall strive for procedures 
     which are expeditious, fair, independent, and low cost.
       ``(iii) Voluntary binding or nonbinding procedures.--The 
     Office may establish both binding and nonbinding processes 
     under this subparagraph, which may be conducted by any 
     government or private party. All parties, including the 
     claimant and the Office, must agree to the use of the process 
     in a particular case.
       ``(B) Consideration of incentives.--The Office shall seek 
     to develop incentives for claimants to participate in the 
     alternative dispute resolution process.
       ``(8) Expedited determination of claims.--
       ``(A) Establishment required.--The Office shall establish a 
     procedure for expedited relief outside of the routine claims 
     process established under paragraph (5) for claimants who--
       ``(i) allege the existence of legally valid and enforceable 
     or perfected security interests in assets of any enterprise 
     for which the Office has been appointed receiver; and
       ``(ii) allege that irreparable injury will occur if the 
     routine claims procedure is followed.
       ``(B) Determination period.--Before the end of the 90-day 
     period beginning on the date on which any claim is filed in 
     accordance with the procedures established under subparagraph 
     (A), the Director shall--
       ``(i) determine--

       ``(I) whether to allow or disallow such claim; or
       ``(II) whether such claim should be determined pursuant to 
     the procedures established under paragraph (5); and

       ``(ii) notify the claimant of the determination, and if the 
     claim is disallowed, provide a statement of each reason for 
     the disallowance and the procedure for obtaining Office 
     review or judicial determination.
       ``(C) Period for filing or renewing suit.--Any claimant who 
     files a request for expedited relief shall be permitted to 
     file a suit, or to continue a suit filed before the date of 
     appointment of the receiver, seeking a determination of the 
     rights of the claimant with respect to such security interest 
     after the earlier of--
       ``(i) the end of the 90-day period beginning on the date of 
     the filing of a request for expedited relief; or
       ``(ii) the date on which the Office denies the claim.
       ``(D) Statute of limitations.--If an action described under 
     subparagraph (C) is not filed, or the motion to renew a 
     previously filed suit is not made, before the end of the 30-
     day period beginning on the date on which such action or 
     motion may be filed under subparagraph (B), the claim shall 
     be deemed to be disallowed as of the end of such period 
     (other than any portion of such claim which was allowed by 
     the receiver), such disallowance shall be final, and the 
     claimant shall have no further rights or remedies with 
     respect to such claim.
       ``(E) Legal effect of filing.--
       ``(i) Statute of limitation tolled.--For purposes of any 
     applicable statute of limitations, the filing of a claim with 
     the receiver shall constitute a commencement of an action.

[[Page 5096]]

       ``(ii) No prejudice to other actions.--Subject to paragraph 
     (10), the filing of a claim with the receiver shall not 
     prejudice any right of the claimant to continue any action 
     that was filed before the appointment of the receiver, 
     subject to the determination of claims by the receiver.
       ``(9) Payment of claims.--
       ``(A) In general.--The receiver may, in the discretion of 
     the receiver, and to the extent that funds are available from 
     the assets of the enterprise, pay creditor claims, in such 
     manner and amounts as are authorized under this section, 
     which are--
       ``(i) allowed by the receiver;
       ``(ii) approved by the Office pursuant to a final 
     determination pursuant to paragraph (7) or (8); or
       ``(iii) determined by the final judgment of any court of 
     competent jurisdiction.
       ``(B) Agreements against the interest of the office.--No 
     agreement that tends to diminish or defeat the interest of 
     the Office in any asset acquired by the Office as receiver 
     under this section shall be valid against the Office unless 
     such agreement is in writing and executed by an authorized 
     officer or representative of the enterprise.
       ``(C) Payment of dividends on claims.--The receiver may, in 
     the sole discretion of the receiver, pay from the assets of 
     the enterprise dividends on proved claims at any time, and no 
     liability shall attach to the Office by reason of any such 
     payment, for failure to pay dividends to a claimant whose 
     claim is not proved at the time of any such payment.
       ``(D) Rulemaking authority of the director.--The Director 
     may prescribe such rules, including definitions of terms, as 
     the Director deems appropriate to establish a single uniform 
     interest rate for, or to make payments of post-insolvency 
     interest to creditors holding proven claims against the 
     receivership estates of any enterprise, following 
     satisfaction by the receiver of the principal amount of all 
     creditor claims.
       ``(10) Suspension of legal actions.--
       ``(A) In general.--After the appointment of a conservator 
     or receiver for an enterprise, the conservator or receiver 
     may, in any judicial action or proceeding to which such 
     enterprise is or becomes a party, request a stay for a period 
     not to exceed--
       ``(i) 45 days, in the case of any conservator; and
       ``(ii) 90 days, in the case of any receiver.
       ``(B) Grant of stay by all courts required.--Upon receipt 
     of a request by the conservator or receiver under 
     subparagraph (A) for a stay of any judicial action or 
     proceeding in any court with jurisdiction of such action or 
     proceeding, the court shall grant such stay as to all 
     parties.
       ``(11) Additional rights and duties.--
       ``(A) Prior final adjudication.--The Office shall abide by 
     any final unappealable judgment of any court of competent 
     jurisdiction which was rendered before the appointment of the 
     Office as conservator or receiver.
       ``(B) Rights and remedies of conservator or receiver.--In 
     the event of any appealable judgment, the Office as 
     conservator or receiver--
       ``(i) shall have all of the rights and remedies available 
     to the enterprise (before the appointment of such conservator 
     or receiver) and the Office, including removal to Federal 
     court and all appellate rights; and
       ``(ii) shall not be required to post any bond in order to 
     pursue such remedies.
       ``(C) No attachment or execution.--No attachment or 
     execution may issue by any court upon assets in the 
     possession of the receiver, or upon the charter, of an 
     enterprise for which the Office has been appointed receiver.
       ``(D) Limitation on judicial review.--Except as otherwise 
     provided in this subsection, no court shall have jurisdiction 
     over--
       ``(i) any claim or action for payment from, or any action 
     seeking a determination of rights with respect to, the assets 
     or charter of any enterprise for which the Office has been 
     appointed receiver; or
       ``(ii) any claim relating to any act or omission of such 
     enterprise or the Office as receiver.
       ``(E) Disposition of assets.--In exercising any right, 
     power, privilege, or authority as conservator or receiver in 
     connection with any sale or disposition of assets of an 
     enterprise for which the Office has been appointed 
     conservator or receiver, the Office shall conduct its 
     operations in a manner which--
       ``(i) maximizes the net present value return from the sale 
     or disposition of such assets;
       ``(ii) minimizes the amount of any loss realized in the 
     resolution of cases; and
       ``(iii) ensures adequate competition and fair and 
     consistent treatment of offerors.
       ``(12) Statute of limitations for actions brought by 
     conservator or receiver.--
       ``(A) In general.--Notwithstanding any provision of any 
     contract, the applicable statute of limitations with regard 
     to any action brought by the Office as conservator or 
     receiver shall be--
       ``(i) in the case of any contract claim, the longer of--

       ``(I) the 6-year period beginning on the date on which the 
     claim accrues; or
       ``(II) the period applicable under State law; and

       ``(ii) in the case of any tort claim, the longer of--

       ``(I) the 3-year period beginning on the date on which the 
     claim accrues; or
       ``(II) the period applicable under State law.

       ``(B) Determination of the date on which a claim accrues.--
     For purposes of subparagraph (A), the date on which the 
     statute of limitations begins to run on any claim described 
     in such subparagraph shall be the later of--
       ``(i) the date of the appointment of the Office as 
     conservator or receiver; or
       ``(ii) the date on which the cause of action accrues.
       ``(13) Revival of expired state causes of action.--
       ``(A) In general.--In the case of any tort claim described 
     under subparagraph (B) for which the statute of limitations 
     applicable under State law with respect to such claim has 
     expired not more than 5 years before the appointment of the 
     Office as conservator or receiver, the Office may bring an 
     action as conservator or receiver on such claim without 
     regard to the expiration of the statute of limitations 
     applicable under State law.
       ``(B) Claims described.--A tort claim referred to under 
     subparagraph (A) is a claim arising from fraud, intentional 
     misconduct resulting in unjust enrichment, or intentional 
     misconduct resulting in substantial loss to the enterprise.
       ``(14) Accounting and recordkeeping requirements.--
       ``(A) In general.--The Office as conservator or receiver 
     shall, consistent with the accounting and reporting practices 
     and procedures established by the Office, maintain a full 
     accounting of each conservatorship and receivership or other 
     disposition of an enterprise in default.
       ``(B) Annual accounting or report.--With respect to each 
     conservatorship or receivership, the Office shall make an 
     annual accounting or report available to the Board, the 
     Comptroller General of the United States, the Committee on 
     Banking, Housing, and Urban Affairs of the Senate, and the 
     Committee on Financial Services of the House of 
     Representatives.
       ``(C) Availability of reports.--Any report prepared under 
     subparagraph (B) shall be made available by the Office upon 
     request to any shareholder of an enterprise or any member of 
     the public.
       ``(D) Recordkeeping requirement.--After the end of the 6-
     year period beginning on the date on which the 
     conservatorship or receivership is terminated by the 
     Director, the Office may destroy any records of such 
     enterprise which the Office, in the discretion of the Office, 
     determines to be unnecessary, unless directed not to do so by 
     a court of competent jurisdiction or governmental agency, or 
     prohibited by law.
       ``(15) Fraudulent transfers.--
       ``(A) In general.--The Office, as conservator or receiver, 
     may avoid a transfer of any interest of an enterprise-
     affiliated party, or any person determined by the conservator 
     or receiver to be a debtor of the enterprise, in property, or 
     any obligation incurred by such party or person, that was 
     made within 5 years of the date on which the Office was 
     appointed conservator or receiver, if such party or person 
     voluntarily or involuntarily made such transfer or incurred 
     such liability with the intent to hinder, delay, or defraud 
     the enterprise, the Office, the conservator, or receiver.
       ``(B) Right of recovery.--To the extent a transfer is 
     avoided under subparagraph (A), the conservator or receiver 
     may recover, for the benefit of the enterprise, the property 
     transferred, or, if a court so orders, the value of such 
     property (at the time of such transfer) from--
       ``(i) the initial transferee of such transfer or the 
     enterprise-affiliated party or person for whose benefit such 
     transfer was made; or
       ``(ii) any immediate or mediate transferee of any such 
     initial transferee.
       ``(C) Rights of transferee or obligee.--The conservator or 
     receiver may not recover under subparagraph (B) from--
       ``(i) any transferee that takes for value, including 
     satisfaction or securing of a present or antecedent debt, in 
     good faith; or
       ``(ii) any immediate or mediate good faith transferee of 
     such transferee.
       ``(D) Rights under this paragraph.--The rights under this 
     paragraph of the conservator or receiver described under 
     subparagraph (A) shall be superior to any rights of a trustee 
     or any other party (other than any party which is a Federal 
     agency) under title 11, United States Code.
       ``(16) Attachment of assets and other injunctive relief.--
     Subject to paragraph (17), any court of competent 
     jurisdiction may, at the request of the conservator or 
     receiver, issue an order in accordance with Rule 65 of the 
     Federal Rules of Civil Procedure, including an order placing 
     the assets of any person designated by the conservator or 
     receiver under the control of the court, and appointing a 
     trustee to hold such assets.
       ``(17) Standards of proof.--Rule 65 of the Federal Rules of 
     Civil Procedure shall apply with respect to any proceeding 
     under paragraph (16) without regard to the requirement of 
     such rule that the applicant show that the injury, loss, or 
     damage is irreparable and immediate.

[[Page 5097]]

       ``(18) Treatment of claims arising from breach of contracts 
     executed by the conservator or receiver.--
       ``(A) In general.--Notwithstanding any other provision of 
     this subsection, any final and unappealable judgment for 
     monetary damages entered against the conservator or receiver 
     for the breach of an agreement executed or approved in 
     writing by the conservator or receiver after the date of its 
     appointment, shall be paid as an administrative expense of 
     the conservator or receiver.
       ``(B) No limitation of power.--Nothing in this paragraph 
     shall be construed to limit the power of the conservator or 
     receiver to exercise any rights under contract or law, 
     including to terminate, breach, cancel, or otherwise 
     discontinue such agreement.
       ``(19) General exceptions.--
       ``(A) Limitations.--The rights of the conservator or 
     receiver appointed under this section shall be subject to the 
     limitations on the powers of a receiver under sections 402 
     through 407 of the Federal Deposit Insurance Corporation 
     Improvement Act of 1991 (12 U.S.C. 4402 through 4407).
       ``(B) Mortgages held in trust.--
       ``(i) In general.--Any mortgage, pool of mortgages, or 
     interest in a pool of mortgages held in trust, custodial, or 
     agency capacity by an enterprise for the benefit of any 
     person other than the enterprise shall not be available to 
     satisfy the claims of creditors generally.
       ``(ii) Holding of mortgages.--Any mortgage, pool of 
     mortgages, or interest in a pool of mortgages described in 
     clause (i) shall be held by the conservator or receiver 
     appointed under this section for the beneficial owners of 
     such mortgage, pool of mortgages, or interest in accordance 
     with the terms of the agreement creating such trust, 
     custodial, or other agency arrangement.
       ``(iii) Liability of conservator or receiver.--The 
     liability of the conservator or receiver appointed under this 
     section for damages shall, in the case of any contingent or 
     unliquidated claim relating to the mortgages held in trust, 
     be estimated in accordance with in the regulations of the 
     Director.
       ``(c) Priority of Expenses and Unsecured Claims.--
       ``(1) In general.--Unsecured claims against an enterprise, 
     or the receiver therefor, that are proven to the satisfaction 
     of the receiver shall have priority in the following order:
       ``(A) Administrative expenses of the receiver.
       ``(B) Any other general or senior liability of the 
     enterprise (which is not a liability described under 
     subparagraph (C) or (D).
       ``(C) Any obligation subordinated to general creditors 
     (which is not an obligation described under subparagraph 
     (D)).
       ``(D) Any obligation to shareholders or members arising as 
     a result of their status as shareholder or members.
       ``(2) Creditors similarly situated.--All creditors that are 
     similarly situated under paragraph (1) shall be treated in a 
     similar manner, except that the receiver may take any action 
     (including making payments) that does not comply with this 
     subsection, if--
       ``(A) the Director determines that such action is necessary 
     to maximize the value of the assets of the enterprise, to 
     maximize the present value return from the sale or other 
     disposition of the assets of the enterprise, or to minimize 
     the amount of any loss realized upon the sale or other 
     disposition of the assets of the enterprise assets; and
       ``(B) all creditors that are similarly situated under 
     paragraph (1) receive not less than the amount provided in 
     subsection (e)(2).
       ``(3) Definition.--As used in this subsection, the term 
     `administrative expenses of the receiver' includes--
       ``(A) the actual, necessary costs and expenses incurred by 
     the receiver in preserving the assets of a failed enterprise 
     or liquidating or otherwise resolving the affairs of a failed 
     enterprise; and
       ``(B) any obligations that the receiver determines are 
     necessary and appropriate to facilitate the smooth and 
     orderly liquidation or other resolution of the enterprise.
       ``(d) Provisions Relating to Contracts Entered Into Before 
     Appointment of Conservator or Receiver.--
       ``(1) Authority to repudiate contracts.--In addition to any 
     other rights a conservator or receiver may have, the 
     conservator or receiver for any enterprise may disaffirm or 
     repudiate any contract or lease--
       ``(A) to which such enterprise is a party;
       ``(B) the performance of which the conservator or receiver, 
     in its sole discretion, determines to be burdensome; and
       ``(C) the disaffirmance or repudiation of which the 
     conservator or receiver determines, in its sole discretion, 
     will promote the orderly administration of the affairs of the 
     enterprise.
       ``(2) Timing of repudiation.--The conservator or receiver 
     shall determine whether or not to exercise the rights of 
     repudiation under this subsection within a reasonable period 
     following such appointment.
       ``(3) Claims for damages for repudiation.--
       ``(A) In general.--Except as otherwise provided under 
     subparagraph (C) and paragraphs (4), (5), and (6), the 
     liability of the conservator or receiver for the 
     disaffirmance or repudiation of any contract pursuant to 
     paragraph (1) shall be--
       ``(i) limited to actual direct compensatory damages; and
       ``(ii) determined as of--

       ``(I) the date of the appointment of the conservator or 
     receiver; or
       ``(II) in the case of any contract or agreement referred to 
     in paragraph (8), the date of the disaffirmance or 
     repudiation of such contract or agreement.

       ``(B) No liability for other damages.--For purposes of 
     subparagraph (A), the term `actual direct compensatory 
     damages' shall not include--
       ``(i) punitive or exemplary damages;
       ``(ii) damages for lost profits or opportunity; or
       ``(iii) damages for pain and suffering.
       ``(C) Measure of damages for repudiation of financial 
     contracts.--In the case of any qualified financial contract 
     or agreement to which paragraph (8) applies, compensatory 
     damages shall be--
       ``(i) deemed to include normal and reasonable costs of 
     cover or other reasonable measures of damages utilized in the 
     industries for such contract and agreement claims; and
       ``(ii) paid in accordance with this subsection and 
     subsection (e), except as otherwise specifically provided in 
     this section.
       ``(4) Leases under which the enterprise is the lessee.--
       ``(A) In general.--If the conservator or receiver 
     disaffirms or repudiates a lease under which the enterprise 
     was the lessee, the conservator or receiver shall not be 
     liable for any damages (other than damages determined under 
     subparagraph (B)) for the disaffirmance or repudiation of 
     such lease.
       ``(B) Payments of rent.--Notwithstanding subparagraph (A), 
     the lessor under a lease to which that subparagraph applies 
     shall--
       ``(i) be entitled to the contractual rent accruing before 
     the later of the date on which--

       ``(I) the notice of disaffirmance or repudiation is mailed; 
     or
       ``(II) the disaffirmance or repudiation becomes effective, 
     unless the lessor is in default or breach of the terms of the 
     lease;

       ``(ii) have no claim for damages under any acceleration 
     clause or other penalty provision in the lease; and
       ``(iii) have a claim for any unpaid rent, subject to all 
     appropriate offsets and defenses, due as of the date of the 
     appointment, which shall be paid in accordance with this 
     subsection and subsection (e).
       ``(5) Leases under which the enterprise is the lessor.--
       ``(A) In general.--If the conservator or receiver 
     repudiates an unexpired written lease of real property of the 
     enterprise under which the enterprise is the lessor and the 
     lessee is not, as of the date of such repudiation, in 
     default, the lessee under such lease may either--
       ``(i) treat the lease as terminated by such repudiation; or
       ``(ii) remain in possession of the leasehold interest for 
     the balance of the term of the lease, unless the lessee 
     defaults under the terms of the lease after the date of such 
     repudiation.
       ``(B) Provisions applicable to lessee remaining in 
     possession.--If any lessee under a lease described under 
     subparagraph (A) remains in possession of a leasehold 
     interest under clause (ii) of subparagraph (A)--
       ``(i) the lessee--

       ``(I) shall continue to pay the contractual rent pursuant 
     to the terms of the lease after the date of the repudiation 
     of such lease; and
       ``(II) may offset against any rent payment which accrues 
     after the date of the repudiation of the lease, and any 
     damages which accrue after such date due to the 
     nonperformance of any obligation of the enterprise under the 
     lease after such date; and

       ``(ii) the conservator or receiver shall not be liable to 
     the lessee for any damages arising after such date as a 
     result of the repudiation, other than the amount of any 
     offset allowed under clause (i)(II).
       ``(6) Contracts for the sale of real property.--
       ``(A) In general.--If the conservator or receiver 
     repudiates any contract for the sale of real property and the 
     purchaser of such real property under such contract is in 
     possession, and is not, as of the date of such repudiation, 
     in default, such purchaser may either--
       ``(i) treat the contract as terminated by such repudiation; 
     or
       ``(ii) remain in possession of such real property.
       ``(B) Provisions applicable to purchaser remaining in 
     possession.--If any purchaser of real property under any 
     contract described under subparagraph (A) remains in 
     possession of such property under clause (ii) of subparagraph 
     (A)--
       ``(i) the purchaser--

       ``(I) shall continue to make all payments due under the 
     contract after the date of the repudiation of the contract; 
     and
       ``(II) may offset against any such payments any damages 
     which accrue after such date due to the nonperformance (after 
     such date) of any obligation of the enterprise under the 
     contract; and

       ``(ii) the conservator or receiver shall--

       ``(I) not be liable to the purchaser for any damages 
     arising after such date as a result of the repudiation, other 
     than the amount of any offset allowed under clause (i)(II);

[[Page 5098]]

       ``(II) deliver title to the purchaser in accordance with 
     the provisions of the contract; and
       ``(III) have no obligation under the contract other than 
     the performance required under subclause (II).

       ``(C) Assignment and sale allowed.--
       ``(i) In general.--No provision of this paragraph shall be 
     construed as limiting the right of the conservator or 
     receiver to assign the contract described under subparagraph 
     (A), and sell the property subject to the contract and the 
     provisions of this paragraph.
       ``(ii) No liability after assignment and sale.--If an 
     assignment and sale described under clause (i) is 
     consummated, the conservator or receiver shall have no 
     further liability under the contract described under 
     subparagraph (A), or with respect to the real property which 
     was the subject of such contract.
       ``(7) Service contracts.--
       ``(A) Services performed before appointment.--In the case 
     of any contract for services between any person and any 
     enterprise for which the Office has been appointed 
     conservator or receiver, any claim of such person for 
     services performed before the appointment of the conservator 
     or receiver shall be--
       ``(i) a claim to be paid in accordance with subsections (b) 
     and (e); and
       ``(ii) deemed to have arisen as of the date on which the 
     conservator or receiver was appointed.
       ``(B) Services performed after appointment and prior to 
     repudiation.--If, in the case of any contract for services 
     described under subparagraph (A), the conservator or receiver 
     accepts performance by the other person before the 
     conservator or receiver makes any determination to exercise 
     the right of repudiation of such contract under this 
     section--
       ``(i) the other party shall be paid under the terms of the 
     contract for the services performed; and
       ``(ii) the amount of such payment shall be treated as an 
     administrative expense of the conservatorship or 
     receivership.
       ``(C) Acceptance of performance no bar to subsequent 
     repudiation.--The acceptance by the conservator or receiver 
     of services referred to under subparagraph (B) in connection 
     with a contract described in such subparagraph shall not 
     affect the right of the conservator or receiver to repudiate 
     such contract under this section at any time after such 
     performance.
       ``(8) Certain qualified financial contracts.--
       ``(A) Rights of parties to contracts.--Subject to 
     paragraphs (9) and (10), and notwithstanding any other 
     provision of this title (other than subsection (b)(9)(B) of 
     this section), any other Federal law, or the law of any 
     State, no person shall be stayed or prohibited from 
     exercising--
       ``(i) any right of that person to cause the termination, 
     liquidation, or acceleration of any qualified financial 
     contract with an enterprise that arises upon the appointment 
     of the Office as receiver for such enterprise at any time 
     after such appointment;
       ``(ii) any right under any security agreement or 
     arrangement or other credit enhancement relating to one or 
     more qualified financial contracts; or
       ``(iii) any right to offset or net out any termination 
     value, payment amount, or other transfer obligation arising 
     under or in connection with 1 or more contracts and 
     agreements described in clause (i), including any master 
     agreement for such contracts or agreements.
       ``(B) Applicability of other provisions.--Subsection 
     (b)(10) shall apply in the case of any judicial action or 
     proceeding brought against any receiver referred to under 
     subparagraph (A), or the enterprise for which such receiver 
     was appointed, by any party to a contract or agreement 
     described under subparagraph (A)(i) with such enterprise.
       ``(C) Certain transfers not avoidable.--
       ``(i) In general.--Notwithstanding paragraph (11), or any 
     other provision of Federal or State law relating to the 
     avoidance of preferential or fraudulent transfers, the 
     Office, whether acting as such or as conservator or receiver 
     of an enterprise, may not avoid any transfer of money or 
     other property in connection with any qualified financial 
     contract with an enterprise.
       ``(ii) Exception for certain transfers.--Clause (i) shall 
     not apply to any transfer of money or other property in 
     connection with any qualified financial contract with an 
     enterprise if the Office determines that the transferee had 
     actual intent to hinder, delay, or defraud such enterprise, 
     the creditors of such enterprise, or any conservator or 
     receiver appointed for such enterprise.
       ``(D) Certain contracts and agreements defined.--In this 
     subsection the following definitions shall apply:
       ``(i) Qualified financial contract.--The term `qualified 
     financial contract' means any securities contract, commodity 
     contract, forward contract, repurchase agreement, swap 
     agreement, and any similar agreement that the Office 
     determines by regulation, resolution, or order to be a 
     qualified financial contract for purposes of this paragraph.
       ``(ii) Securities contract.--The term `securities 
     contract'--

       ``(I) means a contract for the purchase, sale, or loan of a 
     security, a certificate of deposit, a mortgage loan, or any 
     interest in a mortgage loan, a group or index of securities, 
     certificates of deposit, or mortgage loans or interests 
     therein (including any interest therein or based on the value 
     thereof) or any option on any of the foregoing, including any 
     option to purchase or sell any such security, certificate of 
     deposit, mortgage loan, interest, group or index, or option, 
     and including any repurchase or reverse repurchase 
     transaction on any such security, certificate of deposit, 
     mortgage loan, interest, group or index, or option;
       ``(II) does not include any purchase, sale, or repurchase 
     obligation under a participation in a commercial mortgage 
     loan, unless the Office determines by regulation, resolution, 
     or order to include any such agreement within the meaning of 
     that term;
       ``(III) means any option entered into on a national 
     securities exchange relating to foreign currencies;
       ``(IV) means the guarantee by or to any securities clearing 
     agency of any settlement of cash, securities, certificates of 
     deposit, mortgage loans or interests therein, group or index 
     of securities, certificates of deposit, or mortgage loans or 
     interests therein (including any interest therein or based on 
     the value thereof) or option on any of the foregoing, 
     including any option to purchase or sell any such security, 
     certificate of deposit, mortgage loan, interest, group or 
     index, or option;
       ``(V) means any margin loan;
       ``(VI) means any other agreement or transaction that is 
     similar to any agreement or transaction referred to in this 
     clause;
       ``(VII) means any combination of the agreements or 
     transactions referred to in this clause;
       ``(VIII) means any option to enter into any agreement or 
     transaction referred to in this clause;
       ``(IX) means a master agreement that provides for an 
     agreement or transaction referred to in subclause (I), (III), 
     (IV), (V), (VI), (VII), or (VIII), together with all 
     supplements to any such master agreement, without regard to 
     whether the master agreement provides for an agreement or 
     transaction that is not a securities contract under this 
     clause, except that the master agreement shall be considered 
     to be a securities contract under this clause only with 
     respect to each agreement or transaction under the master 
     agreement that is referred to in subclause (I), (III), (IV), 
     (V), (VI), (VII), or (VIII); and
       ``(X) means any security agreement or arrangement or other 
     credit enhancement related to any agreement or transaction 
     referred to in this clause, including any guarantee or 
     reimbursement obligation in connection with any agreement or 
     transaction referred to in this clause.

       ``(iii) Commodity contract.--The term `commodity contract' 
     means--

       ``(I) with respect to a futures commission merchant, a 
     contract for the purchase or sale of a commodity for future 
     delivery on, or subject to the rules of, a contract market or 
     board of trade;
       ``(II) with respect to a foreign futures commission 
     merchant, a foreign future;
       ``(III) with respect to a leverage transaction merchant, a 
     leverage transaction;
       ``(IV) with respect to a clearing organization, a contract 
     for the purchase or sale of a commodity for future delivery 
     on, or subject to the rules of, a contract market or board of 
     trade that is cleared by such clearing organization, or 
     commodity option traded on, or subject to the rules of, a 
     contract market or board of trade that is cleared by such 
     clearing organization;
       ``(V) with respect to a commodity options dealer, a 
     commodity option;
       ``(VI) any other agreement or transaction that is similar 
     to any agreement or transaction referred to in this clause;
       ``(VII) any combination of the agreements or transactions 
     referred to in this clause;
       ``(VIII) any option to enter into any agreement or 
     transaction referred to in this clause;
       ``(IX) a master agreement that provides for an agreement or 
     transaction referred to in subclause (I), (II), (III), (IV), 
     (V), (VI), (VII), or (VIII), together with all supplements to 
     any such master agreement, without regard to whether the 
     master agreement provides for an agreement or transaction 
     that is not a commodity contract under this clause, except 
     that the master agreement shall be considered to be a 
     commodity contract under this clause only with respect to 
     each agreement or transaction under the master agreement that 
     is referred to in subclause (I), (II), (III), (IV), (V), 
     (VI), (VII), or (VIII); or
       ``(X) any security agreement or arrangement or other credit 
     enhancement related to any agreement or transaction referred 
     to in this clause, including any guarantee or reimbursement 
     obligation in connection with any agreement or transaction 
     referred to in this clause.

       ``(iv) Forward contract.--The term `forward contract' 
     means--

       ``(I) a contract (other than a commodity contract) for the 
     purchase, sale, or transfer of a commodity or any similar 
     good, article, service, right, or interest which is presently 
     or in the future becomes the subject of dealing in the 
     forward contract trade, or product

[[Page 5099]]

     or byproduct thereof, with a maturity date more than 2 days 
     after the date on which the contract is entered into, 
     including a repurchase transaction, reverse repurchase 
     transaction, consignment, lease, swap, hedge transaction, 
     deposit, loan, option, allocated transaction, unallocated 
     transaction, or any other similar agreement;
       ``(II) any combination of agreements or transactions 
     referred to in subclauses (I) and (III);
       ``(III) any option to enter into any agreement or 
     transaction referred to in subclause (I) or (II);
       ``(IV) a master agreement that provides for an agreement or 
     transaction referred to in subclauses (I), (II), or (III), 
     together with all supplements to any such master agreement, 
     without regard to whether the master agreement provides for 
     an agreement or transaction that is not a forward contract 
     under this clause, except that the master agreement shall be 
     considered to be a forward contract under this clause only 
     with respect to each agreement or transaction under the 
     master agreement that is referred to in subclause (I), (II), 
     or (III); or
       ``(V) any security agreement or arrangement or other credit 
     enhancement related to any agreement or transaction referred 
     to in subclause (I), (II), (III), or (IV), including any 
     guarantee or reimbursement obligation in connection with any 
     agreement or transaction referred to in any such subclause.

       ``(v) Repurchase agreement.--The term `repurchase 
     agreement' (including a reverse repurchase agreement)--

       ``(I) means an agreement, including related terms, which 
     provides for the transfer of one or more certificates of 
     deposit, mortgage-related securities (as that term is defined 
     in section 3 of the Securities Exchange Act of 1934), 
     mortgage loans, interests in mortgage-related securities or 
     mortgage loans, eligible bankers' acceptances, qualified 
     foreign government securities (defined for purposes of this 
     clause as a security that is a direct obligation of, or that 
     is fully guaranteed by, the central government of a member of 
     the Organization for Economic Cooperation and Development, as 
     determined by regulation or order adopted by the appropriate 
     Federal banking authority), or securities that are direct 
     obligations of, or that are fully guaranteed by, the United 
     States or any agency of the United States against the 
     transfer of funds by the transferee of such certificates of 
     deposit, eligible bankers' acceptances, securities, mortgage 
     loans, or interests with a simultaneous agreement by such 
     transferee to transfer to the transferor thereof certificates 
     of deposit, eligible bankers' acceptances, securities, 
     mortgage loans, or interests as described above, at a date 
     certain not later than 1 year after such transfers or on 
     demand, against the transfer of funds, or any other similar 
     agreement;
       ``(II) does not include any repurchase obligation under a 
     participation in a commercial mortgage loan, unless the 
     Office determines by regulation, resolution, or order to 
     include any such participation within the meaning of such 
     term;
       ``(III) means any combination of agreements or transactions 
     referred to in subclauses (I) and (IV);
       ``(IV) means any option to enter into any agreement or 
     transaction referred to in subclause (I) or (III);
       ``(V) means a master agreement that provides for an 
     agreement or transaction referred to in subclause (I), (III), 
     or (IV), together with all supplements to any such master 
     agreement, without regard to whether the master agreement 
     provides for an agreement or transaction that is not a 
     repurchase agreement under this clause, except that the 
     master agreement shall be considered to be a repurchase 
     agreement under this subclause only with respect to each 
     agreement or transaction under the master agreement that is 
     referred to in subclause (I), (III), or (IV); and
       ``(VI) means any security agreement or arrangement or other 
     credit enhancement related to any agreement or transaction 
     referred to in subclause (I), (III), (IV), or (V), including 
     any guarantee or reimbursement obligation in connection with 
     any agreement or transaction referred to in any such 
     subclause.

       ``(vi) Swap agreement.--The term `swap agreement' means--

       ``(I) any agreement, including the terms and conditions 
     incorporated by reference in any such agreement, which is an 
     interest rate swap, option, future, or forward agreement, 
     including a rate floor, rate cap, rate collar, cross-currency 
     rate swap, and basis swap; a spot, same day-tomorrow, 
     tomorrow-next, forward, or other foreign exchange or precious 
     metals agreement; a currency swap, option, future, or forward 
     agreement; an equity index or equity swap, option, future, or 
     forward agreement; a debt index or debt swap, option, future, 
     or forward agreement; a total return, credit spread or credit 
     swap, option, future, or forward agreement; a commodity index 
     or commodity swap, option, future, or forward agreement; or a 
     weather swap, weather derivative, or weather option;
       ``(II) any agreement or transaction that is similar to any 
     other agreement or transaction referred to in this clause and 
     that is of a type that has been, is presently, or in the 
     future becomes, the subject of recurrent dealings in the swap 
     markets (including terms and conditions incorporated by 
     reference in such agreement) and that is a forward, swap, 
     future, or option on one or more rates, currencies, 
     commodities, equity securities or other equity instruments, 
     debt securities or other debt instruments, quantitative 
     measures associated with an occurrence, extent of an 
     occurrence, or contingency associated with a financial, 
     commercial, or economic consequence, or economic or financial 
     indices or measures of economic or financial risk or value;
       ``(III) any combination of agreements or transactions 
     referred to in this clause;
       ``(IV) any option to enter into any agreement or 
     transaction referred to in this clause;
       ``(V) a master agreement that provides for an agreement or 
     transaction referred to in subclause (I), (II), (III), or 
     (IV), together with all supplements to any such master 
     agreement, without regard to whether the master agreement 
     contains an agreement or transaction that is not a swap 
     agreement under this clause, except that the master agreement 
     shall be considered to be a swap agreement under this clause 
     only with respect to each agreement or transaction under the 
     master agreement that is referred to in subclause (I), (II), 
     (III), or (IV); and
       ``(VI) any security agreement or arrangement or other 
     credit enhancement related to any agreements or transactions 
     referred to in subclause (I), (II), (III), (IV), or (V), 
     including any guarantee or reimbursement obligation in 
     connection with any agreement or transaction referred to in 
     any such subclause.

       ``(vii) Treatment of master agreement as one agreement.--
     Any master agreement for any contract or agreement described 
     in any preceding clause of this subparagraph (or any master 
     agreement for such master agreement or agreements), together 
     with all supplements to such master agreement, shall be 
     treated as a single agreement and a single qualified 
     financial contract. If a master agreement contains provisions 
     relating to agreements or transactions that are not 
     themselves qualified financial contracts, the master 
     agreement shall be deemed to be a qualified financial 
     contract only with respect to those transactions that are 
     themselves qualified financial contracts.
       ``(viii) Transfer.--The term `transfer' means every mode, 
     direct or indirect, absolute or conditional, voluntary or 
     involuntary, of disposing of or parting with property or with 
     an interest in property, including retention of title as a 
     security interest and foreclosure of the equity of redemption 
     of the enterprise.
       ``(E) Certain protections in event of appointment of 
     conservator.--Notwithstanding any other provision of this 
     section, any other Federal law, or the law of any State 
     (other than paragraph (10) of this subsection and subsection 
     (b)(9)(B)), no person shall be stayed or prohibited from 
     exercising--
       ``(i) any right such person has to cause the termination, 
     liquidation, or acceleration of any qualified financial 
     contract with an enterprise in a conservatorship based upon a 
     default under such financial contract which is enforceable 
     under applicable noninsolvency law;
       ``(ii) any right under any security agreement or 
     arrangement or other credit enhancement relating to 1 or more 
     such qualified financial contracts; or
       ``(iii) any right to offset or net out any termination 
     values, payment amounts, or other transfer obligations 
     arising under or in connection with such qualified financial 
     contracts.
       ``(F) Clarification.--No provision of law shall be 
     construed as limiting the right or power of the Office, or 
     authorizing any court or agency to limit or delay in any 
     manner, the right or power of the Office to transfer any 
     qualified financial contract in accordance with paragraphs 
     (9) and (10), or to disaffirm or repudiate any such contract 
     in accordance with subsection (d)(1).
       ``(G) Walkaway clauses not effective.--
       ``(i) In general.--Notwithstanding the provisions of 
     subparagraphs (A) and (E), and sections 403 and 404 of the 
     Federal Deposit Insurance Corporation Improvement Act of 
     1991, no walkaway clause shall be enforceable in a qualified 
     financial contract of an enterprise in default.
       ``(ii) Walkaway clause defined.--For purposes of this 
     subparagraph, the term `walkaway clause' means a provision in 
     a qualified financial contract that, after calculation of a 
     value of a party's position or an amount due to or from 1 of 
     the parties in accordance with its terms upon termination, 
     liquidation, or acceleration of the qualified financial 
     contract, either does not create a payment obligation of a 
     party or extinguishes a payment obligation of a party in 
     whole or in part solely because of the status of such party 
     as a nondefaulting party.
       ``(9) Transfer of qualified financial contracts.--In making 
     any transfer of assets or liabilities of an enterprise in 
     default which includes any qualified financial contract, the 
     conservator or receiver for such enterprise shall either--
       ``(A) transfer to 1 person--
       ``(i) all qualified financial contracts between any person 
     (or any affiliate of such person) and the enterprise in 
     default;

[[Page 5100]]

       ``(ii) all claims of such person (or any affiliate of such 
     person) against such enterprise under any such contract 
     (other than any claim which, under the terms of any such 
     contract, is subordinated to the claims of general unsecured 
     creditors of such enterprise);
       ``(iii) all claims of such enterprise against such person 
     (or any affiliate of such person) under any such contract; 
     and
       ``(iv) all property securing, or any other credit 
     enhancement for any contract described in clause (i), or any 
     claim described in clause (ii) or (iii) under any such 
     contract; or
       ``(B) transfer none of the financial contracts, claims, or 
     property referred to under subparagraph (A) (with respect to 
     such person and any affiliate of such person).
       ``(10) Notification of transfer.--
       ``(A) In general.--The conservator or receiver shall notify 
     any person that is a party to a contract or transfer by 5:00 
     p.m. (Eastern Standard Time) on the business day following 
     the date of the appointment of the receiver in the case of a 
     receivership, or the business day following such transfer in 
     the case of a conservatorship, if--
       ``(i) the conservator or receiver for an enterprise in 
     default makes any transfer of the assets and liabilities of 
     such enterprise; and
       ``(ii) such transfer includes any qualified financial 
     contract.
       ``(B) Certain rights not enforceable.--
       ``(i) Receivership.--A person who is a party to a qualified 
     financial contract with an enterprise may not exercise any 
     right that such person has to terminate, liquidate, or net 
     such contract under paragraph (8)(A) of this subsection or 
     under section 403 or 404 of the Federal Deposit Insurance 
     Corporation Improvement Act of 1991, solely by reason of or 
     incidental to the appointment of a receiver for the 
     enterprise (or the insolvency or financial condition of the 
     enterprise for which the receiver has been appointed)--

       ``(I) until 5:00 p.m. (Eastern Standard Time) on the 
     business day following the date of the appointment of the 
     receiver; or
       ``(II) after the person has received notice that the 
     contract has been transferred pursuant to paragraph (9)(A).

       ``(ii) Conservatorship.--A person who is a party to a 
     qualified financial contract with an enterprise may not 
     exercise any right that such person has to terminate, 
     liquidate, or net such contract under paragraph (8)(E) of 
     this subsection or under section 403 or 404 of the Federal 
     Deposit Insurance Corporation Improvement Act of 1991, solely 
     by reason of or incidental to the appointment of a 
     conservator for the enterprise (or the insolvency or 
     financial condition of the enterprise for which the 
     conservator has been appointed).
       ``(iii) Notice.--For purposes of this paragraph, the 
     conservator or receiver of an enterprise shall be deemed to 
     have notified a person who is a party to a qualified 
     financial contract with such enterprise, if the conservator 
     or receiver has taken steps reasonably calculated to provide 
     notice to such person by the time specified in subparagraph 
     (A).
       ``(C) Business day defined.--For purposes of this 
     paragraph, the term `business day' means any day other than 
     any Saturday, Sunday, or any day on which either the New York 
     Stock Exchange or the Federal Reserve Bank of New York is 
     closed.
       ``(11) Disaffirmance or repudiation of qualified financial 
     contracts.--In exercising the rights of disaffirmance or 
     repudiation of a conservator or receiver with respect to any 
     qualified financial contract to which an enterprise is a 
     party, the conservator or receiver for such institution shall 
     either--
       ``(A) disaffirm or repudiate all qualified financial 
     contracts between--
       ``(i) any person or any affiliate of such person; and
       ``(ii) the enterprise in default; or
       ``(B) disaffirm or repudiate none of the qualified 
     financial contracts referred to in subparagraph (A) (with 
     respect to such person or any affiliate of such person).
       ``(12) Certain security interests not avoidable.--No 
     provision of this subsection shall be construed as permitting 
     the avoidance of any legally enforceable or perfected 
     security interest in any of the assets of any enterprise, 
     except where such an interest is taken in contemplation of 
     the insolvency of the enterprise, or with the intent to 
     hinder, delay, or defraud the enterprise or the creditors of 
     such enterprise.
       ``(13) Authority to enforce contracts.--
       ``(A) In general.--Notwithstanding any provision of a 
     contract providing for termination, default, acceleration, or 
     exercise of rights upon, or solely by reason of, insolvency 
     or the appointment of, or the exercise of rights or powers 
     by, a conservator or receiver, the conservator or receiver 
     may enforce any contract, other than a contract for liability 
     insurance for a director or officer, or a contract or an 
     enterprise bond, entered into by the enterprise.
       ``(B) Certain rights not affected.--No provision of this 
     paragraph may be construed as impairing or affecting any 
     right of the conservator or receiver to enforce or recover 
     under a liability insurance contract for an officer or 
     director, or enterprise bond under other applicable law.
       ``(C) Consent requirement.--
       ``(i) In general.--Except as otherwise provided under this 
     section, no person may exercise any right or power to 
     terminate, accelerate, or declare a default under any 
     contract to which an enterprise is a party, or to obtain 
     possession of or exercise control over any property of the 
     enterprise, or affect any contractual rights of the 
     enterprise, without the consent of the conservator or 
     receiver, as appropriate, for a period of--

       ``(I) 45 days after the date of appointment of a 
     conservator; or
       ``(II) 90 days after the date of appointment of a receiver.

       ``(ii) Exceptions.--This subparagraph shall not--

       ``(I) apply to a contract for liability insurance for an 
     officer or director;
       ``(II) apply to the rights of parties to certain qualified 
     financial contracts under subsection (d)(8); and
       ``(III) be construed as permitting the conservator or 
     receiver to fail to comply with otherwise enforceable 
     provisions of such contracts.

       ``(14) Savings clause.--The meanings of terms used in this 
     subsection are applicable for purposes of this subsection 
     only, and shall not be construed or applied so as to 
     challenge or affect the characterization, definition, or 
     treatment of any similar terms under any other statute, 
     regulation, or rule, including the Gramm-Leach-Bliley Act, 
     the Legal Certainty for Bank Products Act of 2000, the 
     securities laws (as that term is defined in section 3(a)(47) 
     of the Securities Exchange Act of 1934), and the Commodity 
     Exchange Act.
       ``(e) Valuation of Claims in Default.--
       ``(1) In general.--Notwithstanding any other provision of 
     Federal law or the law of any State, and regardless of the 
     method which the Office determines to utilize with respect to 
     an enterprise in default or in danger of default, including 
     transactions authorized under subsection (i), this subsection 
     shall govern the rights of the creditors of such enterprise.
       ``(2) Maximum liability.--The maximum liability of the 
     Office, acting as receiver or in any other capacity, to any 
     person having a claim against the receiver or the enterprise 
     for which such receiver is appointed shall be not more than 
     the amount that such claimant would have received if the 
     Office had liquidated the assets and liabilities of the 
     enterprise without exercising the authority of the Office 
     under subsection (i).
       ``(f) Limitation on Court Action.--Except as provided in 
     this section or at the request of the Director, no court may 
     take any action to restrain or affect the exercise of powers 
     or functions of the Office as a conservator or a receiver.
       ``(g) Liability of Directors and Officers.--
       ``(1) In general.--A director or officer of an enterprise 
     may be held personally liable for monetary damages in any 
     civil action described in paragraph (2) brought by, on behalf 
     of, or at the request or direction of the Office, and 
     prosecuted wholly or partially for the benefit of the 
     Office--
       ``(A) acting as conservator or receiver of such enterprise; 
     or
       ``(B) acting based upon a suit, claim, or cause of action 
     purchased from, assigned by, or otherwise conveyed by such 
     receiver or conservator.
       ``(2) Actions addressed.--Paragraph (1) applies in any 
     civil action for gross negligence, including any similar 
     conduct or conduct that demonstrates a greater disregard of a 
     duty of care than gross negligence, including intentional 
     tortious conduct, as such terms are defined and determined 
     under applicable State law.
       ``(3) No limitation.--Nothing in this subsection shall 
     impair or affect any right of the Office under other 
     applicable law.
       ``(h) Damages.--In any proceeding related to any claim 
     against a director, officer, employee, agent, attorney, 
     accountant, appraiser, or any other party employed by or 
     providing services to an enterprise, recoverable damages 
     determined to result from the improvident or otherwise 
     improper use or investment of any assets of the enterprise 
     shall include principal losses and appropriate interest.
       ``(i) Limited-Life Enterprises.--
       ``(1) Organization.--
       ``(A) Purpose.--The Office, as receiver appointed pursuant 
     to subsection (a), shall, in the case of an enterprise, 
     organize a limited-life enterprise with respect to that 
     enterprise in accordance with this subsection.
       ``(B) Authorities.--Upon the creation of a limited-life 
     enterprise under subparagraph (A), the limited-life 
     enterprise may--
       ``(i) assume such liabilities of the enterprise that is in 
     default or in danger of default as the Office may, in its 
     discretion, determine to be appropriate, except that the 
     liabilities assumed shall not exceed the amount of assets 
     purchased or transferred from the enterprise to the limited-
     life enterprise;
       ``(ii) purchase such assets of the enterprise that is in 
     default, or in danger of default as the Office may, in its 
     discretion, determine to be appropriate; and
       ``(iii) perform any other temporary function which the 
     Office may, in its discretion, prescribe in accordance with 
     this section.
       ``(2) Charter and establishment.--
       ``(A) Transfer of charter.--

[[Page 5101]]

       ``(i) Fannie mae.--If the Office is appointed as receiver 
     for the Federal National Mortgage Association, the limited-
     life enterprise established under this subsection with 
     respect to such enterprise shall, by operation of law and 
     immediately upon its organization--

       ``(I) succeed to the charter of the Federal National 
     Mortgage Association, as set forth in the Federal National 
     Mortgage Association Charter Act; and
       ``(II) thereafter operate in accordance with, and subject 
     to, such charter, this Act, and any other provision of law to 
     which the Federal National Mortgage Association is subject, 
     except as otherwise provided in this subsection.

       ``(ii) Freddie mac.--If the Office is appointed as receiver 
     for the Federal Home Loan Mortgage Corporation, the limited-
     life enterprise established under this subsection with 
     respect to such enterprise shall, by operation of law and 
     immediately upon its organization--

       ``(I) succeed to the charter of the Federal Home Loan 
     Mortgage Corporation, as set forth in the Federal Home Loan 
     Mortgage Corporation Charter Act; and
       ``(II) thereafter operate in accordance with, and subject 
     to, such charter, this Act, and any other provision of law to 
     which the Federal Home Loan Mortgage Corporation is subject, 
     except as otherwise provided in this subsection.

       ``(B) Interests in and assets and obligations of enterprise 
     in default.--Notwithstanding subparagraph (A) or any other 
     provision of law--
       ``(i) a limited-life enterprise shall assume, acquire, or 
     succeed to the assets or liabilities of an enterprise only to 
     the extent that such assets or liabilities are transferred by 
     the Office to the limited-life enterprise in accordance with, 
     and subject to the restrictions set forth in, paragraph 
     (1)(B);
       ``(ii) a limited-life enterprise shall not assume, acquire, 
     or succeed to any obligation that an enterprise for which a 
     receiver has been appointed may have to any shareholder of 
     the enterprise that arises as a result of the status of that 
     person as a shareholder of the enterprise; and
       ``(iii) no shareholder or creditor of an enterprise shall 
     have any right or claim against the charter of the enterprise 
     once the Office has been appointed receiver for the 
     enterprise and a limited-life enterprise succeeds to the 
     charter pursuant to subparagraph (A).
       ``(C) Limited-life enterprise treated as being in default 
     for certain purposes.--A limited-life enterprise shall be 
     treated as an enterprise in default at such times and for 
     such purposes as the Office may, in its discretion, 
     determine.
       ``(D) Management.--Upon its establishment, a limited-life 
     enterprise shall be under the management of a board of 
     directors consisting of not fewer than 5 nor more than 10 
     members appointed by the Office.
       ``(E) Bylaws.--The board of directors of a limited-life 
     enterprise shall adopt such bylaws as may be approved by the 
     Office.
       ``(3) Capital stock.--
       ``(A) No requirement.--The Office is not required to pay 
     capital stock into a limited-life enterprise or to issue any 
     capital stock on behalf of a limited-life enterprise 
     established under this subsection.
       ``(B) Authority.--If the Director determines that such 
     action is advisable, the Office may cause capital stock or 
     other securities of a limited-life enterprise established 
     with respect to an enterprise to be issued and offered for 
     sale, in such amounts and on such terms and conditions as the 
     Director may determine, in the discretion of the Director.
       ``(4) Investments.--Funds of a limited-life enterprise 
     shall be kept on hand in cash, invested in obligations of the 
     United States or obligations guaranteed as to principal and 
     interest by the United States, or deposited with the Office, 
     or any Federal reserve bank.
       ``(5) Exempt tax status.--Notwithstanding any other 
     provision of Federal or State law, a limited-life enterprise, 
     its franchise, property, and income shall be exempt from all 
     taxation now or hereafter imposed by the United States, by 
     any territory, dependency, or possession thereof, or by any 
     State, county, municipality, or local taxing authority.
       ``(6) Winding up.--
       ``(A) In general.--Subject to subparagraphs (B) and (C), 
     not later than 2 years after the date of its organization, 
     the Office shall wind up the affairs of a limited-life 
     enterprise.
       ``(B) Extension.--The Director may, in the discretion of 
     the Director, extend the status of a limited-life enterprise 
     for 3 additional 1-year periods.
       ``(C) Termination of status as limited-life enterprise.--
       ``(i) In general.--Upon the sale by the Office of 80 
     percent or more of the capital stock of a limited-life 
     enterprise, as defined in clause (iv), to 1 or more persons 
     (other than the Office)--

       ``(I) the status of the limited-life enterprise as such 
     shall terminate; and
       ``(II) the enterprise shall cease to be a limited-life 
     enterprise for purposes of this subsection.

       ``(ii) Divestiture of remaining stock, if any.--

       ``(I) In general.--Not later than 1 year after the date on 
     which the status of a limited-life enterprise is terminated 
     pursuant to clause (i), the Office shall sell to 1 or more 
     persons (other than the Office) any remaining capital stock 
     of the former limited-life enterprise.
       ``(II) Extension authorized.--The Director may extend the 
     period referred to in subclause (I) for not longer than an 
     additional 2 years, if the Director determines that such 
     action would be in the public interest.

       ``(iii) Savings clause.--Notwithstanding any provision of 
     law, other than clause (ii), the Office shall not be required 
     to sell the capital stock of an enterprise or a limited-life 
     enterprise established with respect to an enterprise.
       ``(iv) Applicability.--This subparagraph applies only with 
     respect to a limited-life enterprise that is established with 
     respect to an enterprise.
       ``(7) Transfer of assets and liabilities.--
       ``(A) In general.--
       ``(i) Transfer of assets and liabilities.--The Office, as 
     receiver, may transfer any assets and liabilities of an 
     enterprise in default, or in danger of default, to the 
     limited-life enterprise in accordance with and subject to the 
     restrictions of paragraph (1).
       ``(ii) Subsequent transfers.--At any time after the 
     establishment of a limited-life enterprise, the Office, as 
     receiver, may transfer any assets and liabilities of the 
     enterprise in default, or in danger of default, as the Office 
     may, in its discretion, determine to be appropriate in 
     accordance with and subject to the restrictions of paragraph 
     (1).
       ``(iii) Effective without approval.--The transfer of any 
     assets or liabilities of an enterprise in default or in 
     danger of default to a limited-life enterprise shall be 
     effective without any further approval under Federal or State 
     law, assignment, or consent with respect thereto.
       ``(iv) Equitable treatment of similarly situated 
     creditors.--The Office shall treat all creditors of an 
     enterprise in default or in danger of default that are 
     similarly situated under subsection (c)(1) in a similar 
     manner in exercising the authority of the Office under this 
     subsection to transfer any assets or liabilities of the 
     enterprise to the limited-life enterprise established with 
     respect to such enterprise, except that the Office may take 
     actions (including making payments) that do not comply with 
     this clause, if--

       ``(I) the Director determines that such actions are 
     necessary to maximize the value of the assets of the 
     enterprise, to maximize the present value return from the 
     sale or other disposition of the assets of the enterprise, or 
     to minimize the amount of any loss realized upon the sale or 
     other disposition of the assets of the enterprise; and
       ``(II) all creditors that are similarly situated under 
     subsection (c)(1) receive not less than the amount provided 
     in subsection (e)(2).

       ``(v) Limitation on transfer of liabilities.--
     Notwithstanding any other provision of law, the aggregate 
     amount of liabilities of an enterprise that are transferred 
     to, or assumed by, a limited-life enterprise may not exceed 
     the aggregate amount of assets of the enterprise that are 
     transferred to, or purchased by, the limited-life enterprise.
       ``(8) Regulations.--The Office may promulgate such 
     regulations as the Office determines to be necessary or 
     appropriate to implement this subsection.
       ``(9) Powers of limited-life enterprises.--
       ``(A) In general.--Each limited-life enterprise created 
     under this subsection shall have all corporate powers of, and 
     be subject to the same provisions of law as, the enterprise 
     in default or in danger of default to which it relates, 
     except that--
       ``(i) the Office may--

       ``(I) remove the directors of a limited-life enterprise;
       ``(II) fix the compensation of members of the board of 
     directors and senior management, as determined by the Office 
     in its discretion, of a limited-life enterprise; and
       ``(III) indemnify the representatives for purposes of 
     paragraph (1)(B), and the directors, officers, employees, and 
     agents of a limited-life enterprise on such terms as the 
     Office determines to be appropriate; and

       ``(ii) the board of directors of a limited-life 
     enterprise--

       ``(I) shall elect a chairperson who may also serve in the 
     position of chief executive officer, except that such person 
     shall not serve either as chairperson or as chief executive 
     officer without the prior approval of the Office; and
       ``(II) may appoint a chief executive officer who is not 
     also the chairperson, except that such person shall not serve 
     as chief executive officer without the prior approval of the 
     Office.

       ``(B) Stay of judicial action.--Any judicial action to 
     which a limited-life enterprise becomes a party by virtue of 
     its acquisition of any assets or assumption of any 
     liabilities of an enterprise in default shall be stayed from 
     further proceedings for a period of not longer than 45 days, 
     at the request of the limited-life enterprise. Such period 
     may be modified upon the consent of all parties.
       ``(10) No federal status.--

[[Page 5102]]

       ``(A) Agency status.--A limited-life enterprise is not an 
     agency, establishment, or instrumentality of the United 
     States.
       ``(B) Employee status.--Representatives for purposes of 
     paragraph (1)(B), interim directors, directors, officers, 
     employees, or agents of a limited-life enterprise are not, 
     solely by virtue of service in any such capacity, officers or 
     employees of the United States. Any employee of the Office or 
     of any Federal instrumentality who serves at the request of 
     the Office as a representative for purposes of paragraph 
     (1)(B), interim director, director, officer, employee, or 
     agent of a limited-life enterprise shall not--
       ``(i) solely by virtue of service in any such capacity lose 
     any existing status as an officer or employee of the United 
     States for purposes of title 5, United States Code, or any 
     other provision of law; or
       ``(ii) receive any salary or benefits for service in any 
     such capacity with respect to a limited-life enterprise in 
     addition to such salary or benefits as are obtained through 
     employment with the Office or such Federal instrumentality.
       ``(11) Authority to obtain credit.--
       ``(A) In general.--A limited-life enterprise may obtain 
     unsecured credit and issue unsecured debt.
       ``(B) Inability to obtain credit.--If a limited-life 
     enterprise is unable to obtain unsecured credit or issue 
     unsecured debt, the Director may authorize the obtaining of 
     credit or the issuance of debt by the limited-life 
     enterprise--
       ``(i) with priority over any or all of the obligations of 
     the limited-life enterprise;
       ``(ii) secured by a lien on property of the limited-life 
     enterprise that is not otherwise subject to a lien; or
       ``(iii) secured by a junior lien on property of the 
     limited-life enterprise that is subject to a lien.
       ``(C) Limitations.--
       ``(i) In general.--The Director, after notice and a 
     hearing, may authorize the obtaining of credit or the 
     issuance of debt by a limited-life enterprise that is secured 
     by a senior or equal lien on property of the limited-life 
     enterprise that is subject to a lien (other than mortgages 
     that collateralize the mortgage-backed securities issued or 
     guaranteed by an enterprise) only if--

       ``(I) the limited-life enterprise is unable to otherwise 
     obtain such credit or issue such debt; and
       ``(II) there is adequate protection of the interest of the 
     holder of the lien on the property with respect to which such 
     senior or equal lien is proposed to be granted.

       ``(12) Burden of proof.--In any hearing under this 
     subsection, the Director has the burden of proof on the issue 
     of adequate protection.
       ``(13) Affect on debts and liens.--The reversal or 
     modification on appeal of an authorization under this 
     subsection to obtain credit or issue debt, or of a grant 
     under this section of a priority or a lien, does not affect 
     the validity of any debt so issued, or any priority or lien 
     so granted, to an entity that extended such credit in good 
     faith, whether or not such entity knew of the pendency of the 
     appeal, unless such authorization and the issuance of such 
     debt, or the granting of such priority or lien, were stayed 
     pending appeal.
       ``(j) Other Office Exemptions.--
       ``(1) Applicability.--The provisions of this subsection 
     shall apply with respect to the Office in any case in which 
     the Office is acting as a conservator or a receiver.
       ``(2) Taxation.--The Office, including its franchise, its 
     capital, reserves, and surplus, and its income, shall be 
     exempt from all taxation imposed by any State, county, 
     municipality, or local taxing authority, except that any real 
     property of the Office shall be subject to State, 
     territorial, county, municipal, or local taxation to the same 
     extent according to its value as other real property is 
     taxed, except that, notwithstanding the failure of any person 
     to challenge an assessment under State law of the value of 
     such property, and the tax thereon, shall be determined as of 
     the period for which such tax is imposed.
       ``(3) Property protection.--No property of the Office shall 
     be subject to levy, attachment, garnishment, foreclosure, or 
     sale without the consent of the Office, nor shall any 
     involuntary lien attach to the property of the Office.
       ``(4) Penalties and fines.--The Office shall not be liable 
     for any amounts in the nature of penalties or fines, 
     including those arising from the failure of any person to pay 
     any real property, personal property, probate, or recording 
     tax or any recording or filing fees when due.
       ``(k) Prohibition of Charter Revocation.--In no case may 
     the receiver appointed pursuant to this section revoke, 
     annul, or terminate the charter of an enterprise.''.
       (b) Technical and Conforming Amendments.--The Federal 
     Housing Enterprises Financial Safety and Soundness Act of 
     1992 (12 U.S.C. 4501 et seq.) is amended by striking sections 
     1369, 1369A, and 1369B (12 U.S.C. 4619, 4620, and 4621).

                    Subtitle D--Enforcement Actions

     SEC. 841. CEASE-AND-DESIST PROCEEDINGS.

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

     SEC. 842. TEMPORARY CEASE-AND-DESIST PROCEEDINGS.

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

[[Page 5103]]



     SEC. 843. REMOVAL AND PROHIBITION AUTHORITY.

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

     ``SEC. 1377. REMOVAL AND PROHIBITION AUTHORITY.

       ``(a) Authority To Issue Order.--
       ``(1) In general.--The Director may serve upon a party 
     described in paragraph (2), or any officer, director, or 
     management of the Finance Facility a written notice of the 
     intention of the Director to suspend or remove such party 
     from office, or prohibit any further participation by such 
     party, in any manner, in the conduct of the affairs of the 
     enterprise.
       ``(2) Applicability.--A party described in this paragraph 
     is an enterprise-affiliated party or any officer, director, 
     or management of the Finance Facility, if the Director 
     determines that--
       ``(A) that party, officer, or director has, directly or 
     indirectly--
       ``(i) violated--

       ``(I) any law or regulation;
       ``(II) any cease-and-desist order which has become final;
       ``(III) any condition imposed in writing by the Director in 
     connection with the grant of any application or other request 
     by such enterprise; or
       ``(IV) any written agreement between such enterprise and 
     the Director;

       ``(ii) engaged or participated in any unsafe or unsound 
     practice in connection with any enterprise or business 
     institution; or
       ``(iii) committed or engaged in any act, omission, or 
     practice which constitutes a breach of such party's fiduciary 
     duty;
       ``(B) by reason of the violation, practice, or breach 
     described in subparagraph (A)--
       ``(i) such enterprise or business institution has suffered 
     or will probably suffer financial loss or other damage; or
       ``(ii) such party has received financial gain or other 
     benefit; and
       ``(C) the violation, practice, or breach described in 
     subparagraph (A)--
       ``(i) involves personal dishonesty on the part of such 
     party; or
       ``(ii) demonstrates willful or continuing disregard by such 
     party for the safety or soundness of such enterprise or 
     business institution.
       ``(b) Suspension Order.--
       ``(1) Suspension or prohibition authority.--If the Director 
     serves written notice under subsection (a) upon a party 
     subject to that subsection (a), the Director may, by order, 
     suspend or remove such party from office, or prohibit such 
     party from further participation in any manner in the conduct 
     of the affairs of the enterprise, if the Director--
       ``(A) determines that such action is necessary for the 
     protection of the enterprise; and
       ``(B) serves such party with written notice of the order.
       ``(2) Effective period.--Any order issued under this 
     subsection--
       ``(A) shall become effective upon service; and
       ``(B) unless a court issues a stay of such order under 
     subsection (g), shall remain in effect and enforceable 
     until--
       ``(i) the date on which the Director dismisses the charges 
     contained in the notice served under subsection (a) with 
     respect to such party; or
       ``(ii) the effective date of an order issued under 
     subsection (b).
       ``(3) Copy of order.--If the Director issues an order under 
     subsection (b) to any party, the Director shall serve a copy 
     of such order on any enterprise with which such party is 
     affiliated at the time such order is issued.
       ``(c) Notice, Hearing, and Order.--
       ``(1) Notice.--A notice under subsection (a) of the 
     intention of the Director to issue an order under this 
     section shall contain a statement of the facts constituting 
     grounds for such action, and shall fix a time and place at 
     which a hearing will be held on such action.
       ``(2) Timing of hearing.--A hearing shall be fixed for a 
     date not earlier than 30 days, nor later than 60 days, after 
     the date of service of notice under subsection (a), unless an 
     earlier or a later date is set by the Director at the request 
     of--
       ``(A) the party receiving such notice, and good cause is 
     shown; or
       ``(B) the Attorney General of the United States.
       ``(3) Consent.--Unless the party that is the subject of a 
     notice delivered under subsection (a) appears at the hearing 
     in person or by a duly authorized representative, such party 
     shall be deemed to have consented to the issuance of an order 
     under this section.
       ``(4) Issuance of order of suspension.--The Director may 
     issue an order under this section, as the Director may deem 
     appropriate, if--
       ``(A) a party is deemed to have consented to the issuance 
     of an order under paragraph (3); or
       ``(B) upon the record made at the hearing, the Director 
     finds that any of the grounds specified in the notice have 
     been established.
       ``(5) Effectiveness of order.--Any order issued under 
     paragraph (4) shall become effective at the expiration of 30 
     days after the date of service upon the relevant enterprise 
     and party (except in the case of an order issued upon consent 
     under paragraph (3), which shall become effective at the time 
     specified therein). Such order shall remain effective and 
     enforceable except to such extent as it is stayed, modified, 
     terminated, or set aside by action of the Director or a 
     reviewing court.
       ``(d) Prohibition of Certain Specific Activities.--Any 
     person subject to an order issued under this section shall 
     not--
       ``(1) participate in any manner in the conduct of the 
     affairs of any enterprise or the Finance Facility;
       ``(2) solicit, procure, transfer, attempt to transfer, 
     vote, or attempt to vote any proxy, consent, or authorization 
     with respect to any voting rights in any enterprise;
       ``(3) violate any voting agreement previously approved by 
     the Director; or
       ``(4) vote for a director, or serve or act as an 
     enterprise-affiliated party of an enterprise or as an officer 
     or director of the Finance Facility.
       ``(e) Industry-Wide Prohibition.--
       ``(1) In general.--Except as provided in paragraph (2), any 
     person who, pursuant to an order issued under this section, 
     has been removed or suspended from office in an enterprise or 
     the Finance Facility, or prohibited from participating in the 
     conduct of the affairs of an enterprise or the Finance 
     Facility, may not, while such order is in effect, continue or 
     commence to hold any office in, or participate in any manner 
     in the conduct of the affairs of, any enterprise or the 
     Finance Facility.
       ``(2) Exception if director provides written consent.--If, 
     on or after the date on which an order is issued under this 
     section which removes or suspends from office any party, or 
     prohibits such party from participating in the conduct of the 
     affairs of an enterprise or the Finance Facility, such party 
     receives the written consent of the Director, the order 
     shall, to the extent of such consent, cease to apply to such 
     party with respect to the enterprise or such Finance Facility 
     described in the written consent. Any such consent shall be 
     publicly disclosed.
       ``(3) Violation of paragraph (1) treated as violation of 
     order.--Any violation of paragraph (1) by any person who is 
     subject to an order issued under subsection (h) shall be 
     treated as a violation of the order.
       ``(f) Applicability.--This section shall only apply to a 
     person who is an individual, unless the Director specifically 
     finds that it should apply to a corporation, firm, or other 
     business entity.
       ``(g) Stay of Suspension and Prohibition of Enterprise-
     Affiliated Party.--Not later than 10 days after the date on 
     which any enterprise-affiliated party has been suspended from 
     office or prohibited from participation in the conduct of the 
     affairs of an enterprise under this section, such party may 
     apply to the United States District Court for the District of 
     Columbia, or the United States district court for the 
     judicial district in which the headquarters of the enterprise 
     is located, for a stay of such suspension or prohibition 
     pending the completion of the administrative proceedings 
     pursuant to subsection (c). The court shall have jurisdiction 
     to stay such suspension or prohibition.
       ``(h) Suspension or Removal of Enterprise-Affiliated Party 
     Charged With Felony.--
       ``(1) Suspension or prohibition.--
       ``(A) In general.--Whenever any enterprise-affiliated party 
     is charged in any information, indictment, or complaint, with 
     the commission of or participation in a crime involving 
     dishonesty or breach of trust which is punishable by 
     imprisonment for a term exceeding 1 year under Federal or 
     State law, the Director may, if continued service or 
     participation by such party may pose a threat to the 
     enterprise or impair public confidence in the enterprise, by 
     written notice served upon such party, suspend such party 
     from office or prohibit such party from further participation 
     in any manner in the conduct of the affairs of any 
     enterprise.
       ``(B) Provisions applicable to notice.--
       ``(i) Copy.--A copy of any notice under subparagraph (A) 
     shall be served upon the relevant enterprise.
       ``(ii) Effective period.--A suspension or prohibition under 
     subparagraph (A) shall remain in effect until the 
     information, indictment, or complaint referred to in 
     subparagraph (A) is finally disposed of, or until terminated 
     by the Director.
       ``(2) Removal or prohibition.--
       ``(A) In general.--If a judgment of conviction or an 
     agreement to enter a pretrial diversion or other similar 
     program is entered against an enterprise-affiliated party in 
     connection with a crime described in paragraph (1)(A), at 
     such time as such judgment is not subject to further 
     appellate review, the Director may, if continued service or 
     participation by such party may pose a threat to the 
     enterprise or impair public confidence in the enterprise, 
     issue and serve upon such party an order removing such party 
     from office or prohibiting such party from further 
     participation in any manner in the conduct of the

[[Page 5104]]

     affairs of the enterprise without the prior written consent 
     of the Director.
       ``(B) Provisions applicable to order.--
       ``(i) Copy.--A copy of any order under subparagraph (A) 
     shall be served upon the relevant enterprise, at which time 
     the enterprise-affiliated party who is subject to the order 
     (if a director or an officer) shall cease to be a director or 
     officer of such enterprise.
       ``(ii) Effect of acquittal.--A finding of not guilty or 
     other disposition of the charge shall not preclude the 
     Director from instituting proceedings after such finding or 
     disposition to remove a party from office or to prohibit 
     further participation in the affairs of an enterprise 
     pursuant to subsection (a) or (b).
       ``(iii) Effective period.--Unless terminated by the 
     Director, any notice of suspension or order of removal issued 
     under this subsection shall remain effective and outstanding 
     until the completion of any hearing or appeal authorized 
     under paragraph (4).
       ``(3) Authority of remaining board members.--
       ``(A) In general.--If at any time, because of the 
     suspension of 1 or more directors pursuant to this section, 
     there shall be on the board of directors of an enterprise 
     less than a quorum of directors not so suspended, all powers 
     and functions vested in or exercisable by such board shall 
     vest in and be exercisable by the director or directors on 
     the board not so suspended, until such time as there shall be 
     a quorum of the board of directors.
       ``(B) Appointment of temporary directors.--If all of the 
     directors of an enterprise are suspended pursuant to this 
     section, the Director shall appoint persons to serve 
     temporarily as directors pending the termination of such 
     suspensions, or until such time as those who have been 
     suspended cease to be directors of the enterprise and their 
     respective successors take office.
       ``(4) Hearing regarding continued participation.--
       ``(A) In general.--Not later than 30 days after the date of 
     service of any notice of suspension or order of removal 
     issued pursuant to paragraph (1) or (2), the enterprise-
     affiliated party may request in writing an opportunity to 
     appear before the Director to show that the continued service 
     or participation in the conduct of the affairs of the 
     enterprise by such party does not, or is not likely to, pose 
     a threat to the interests of the enterprise, or threaten to 
     impair public confidence in the enterprise.
       ``(B) Timing and form of hearing.--Upon receipt of a 
     request for a hearing under subparagraph (A), the Director 
     shall fix a time (not later than 30 days after the date of 
     receipt of such request, unless extended at the request of 
     such party) and place at which the enterprise-affiliated 
     party may appear, personally or through counsel, before the 
     Director or 1 or more designated employees of the Director to 
     submit written materials (or, at the discretion of the 
     Director, oral testimony) and oral argument.
       ``(C) Determination.--Not later than 60 days after the date 
     of a hearing under subparagraph (B), the Director shall 
     notify the enterprise-affiliated party whether the suspension 
     or prohibition from participation in any manner in the 
     conduct of the affairs of the enterprise will be continued, 
     terminated, or otherwise modified, or whether the order 
     removing such party from office or prohibiting such party 
     from further participation in any manner in the conduct of 
     the affairs of the enterprise will be rescinded or otherwise 
     modified. Such notification shall contain a statement of the 
     basis for any adverse decision of the Director.
       ``(5) Rules.--The Director is authorized to prescribe such 
     rules as may be necessary to carry out this subsection.''.
       (b) Conforming Amendments.--
       (1) Safety and soundness act.--Subtitle C of title XIII of 
     the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 (42 U.S.C. 4501 et seq.) is amended--
       (A) in section 1317(f), by striking ``section 1379B'' and 
     inserting ``section 1379D'';
       (B) in section 1373(a)--
       (i) in paragraph (1), by striking ``or 1376(c)'' and 
     inserting ``, 1376(c), or 1377'';
       (ii) in paragraph (2), by inserting ``or 1377'' 
     after''1371''; and
       (iii) in paragraph (4), by inserting ``or removal or 
     prohibition'' after ``cease and desist''; and
       (C) in section 1374(a)--
       (i) by striking ``or 1376'' and inserting ``, 1376, or 
     1377''; and
       (ii) by striking ``such section'' and inserting ``this 
     title''.
       (2) Fannie mae charter act.--Section 308(b) of the Federal 
     National Mortgage Association Charter Act (12 U.S.C. 1723(b)) 
     is amended in the second sentence, by striking ``The'' and 
     inserting ``Except to the extent that action under section 
     1377 of the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 temporarily results in a lesser number, 
     the''.
       (3) Freddie mac charter act.--Section 303(a)(2)(A) of the 
     Federal Home Loan Mortgage Corporation Act (12 U.S.C. 
     1452(a)(2)(A)) is amended, in the second sentence, by 
     striking ``The'' and inserting ``Except to the extent action 
     under section 1377 of the Federal Housing Enterprises 
     Financial Safety and Soundness Act of 1992 temporarily 
     results in a lesser number, the''.

     SEC. 844. ENFORCEMENT AND JURISDICTION.

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

     SEC. 845. CIVIL MONEY PENALTIES.

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

[[Page 5105]]

       (A) by striking ``or director'' each place that term 
     appears and inserting ``director, or enterprise-affiliated 
     party'';
       (B) by striking ``request the Attorney General of the 
     United States to'';
       (C) by inserting ``, or the United States district court 
     within the jurisdiction of which the headquarters of the 
     enterprise is located,'' after ``District of Columbia'';
       (D) by striking ``, or may, under the direction and control 
     of the Attorney General of the United States, bring such an 
     action''; and
       (E) by striking ``and section 1374''.

     SEC. 846. CRIMINAL PENALTY.

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

     ``SEC. 1378. CRIMINAL PENALTY.

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

     SEC. 847. NOTICE AFTER SEPARATION FROM SERVICE.

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

     SEC. 848. SUBPOENA AUTHORITY.

       Section 1379B of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4641) is 
     amended--
       (1) in subsection (a)--
       (A) in the matter preceding paragraph (1)--
       (i) by striking ``administrative'';
       (ii) by inserting ``, examination, or investigation'' after 
     ``proceeding'';
       (iii) by striking ``subchapter'' and inserting ``title''; 
     and
       (iv) by inserting ``or any designated representative 
     thereof, including any person designated to conduct any 
     hearing under this subtitle'' after ``Director''; and
       (B) in paragraph (4), by striking ``issued by the 
     Director'';
       (2) in subsection (b), by inserting ``or in any territory 
     or other place subject to the jurisdiction of the United 
     States'' after ``State'';
       (3) by striking subsection (c) and inserting the following:
       ``(c) Enforcement.--
       ``(1) In general.--The Director, or any party to 
     proceedings under this subtitle, may apply to the United 
     States District Court for the District of Columbia, or the 
     United States district court for the judicial district of the 
     United States in any territory in which such proceeding is 
     being conducted, or where the witness resides or carries on 
     business, for enforcement of any subpoena or subpoena duces 
     tecum issued pursuant to this section.
       ``(2) Power of court.--The courts described under paragraph 
     (1) shall have the jurisdiction and power to order and 
     require compliance with any subpoena issued under paragraph 
     (1)'';
       (4) in subsection (d), by inserting ``enterprise-affiliated 
     party'' before ``may allow''; and
       (5) by adding at the end the following:
       ``(e) Penalties.--A person shall be guilty of a 
     misdemeanor, and upon conviction, shall be subject to a fine 
     of not more than $1,000 or to imprisonment for a term of not 
     more than 1 year, or both, if that person willfully fails or 
     refuses, in disobedience of a subpoena issued under 
     subsection (c), to--
       ``(1) attend court;
       ``(2) testify in court;
       ``(3) answer any lawful inquiry; or
       ``(4) produce books, papers, correspondence, contracts, 
     agreements, or such other records as requested in the 
     subpoena.''.
                                 ______
                                 
  SA 4419. Mr. ENSIGN submitted an amendment intended to be proposed to 
amendment SA 4387 submitted by Mr. Dodd (for himself and Mr. Shelby) to 
the bill H.R. 3221, moving the United States toward greater energy 
independence and security, developing innovative new technologies, 
reducing carbon emissions, creating green jobs, protecting consumers, 
increasing clean renewable energy production, and modernizing our 
energy infrastructure, and to amend the Internal Revenue Code of 1986 
to provide tax incentives for the production of renewable energy and 
energy conservation; which was ordered to lie on the table; as follows:

       At the end, add the following:

                 TITLE VIII--CLEAN ENERGY TAX STIMULUS

     SEC. 801. SHORT TITLE; ETC.

       (a) Short Title.--This title may be cited as the ``Clean 
     Energy Tax Stimulus Act of 2008''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this title an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.

      Subtitle A--Extension of Clean Energy Production Incentives

     SEC. 811. EXTENSION AND MODIFICATION OF RENEWABLE ENERGY 
                   PRODUCTION TAX CREDIT.

       (a) Extension of Credit.--Each of the following provisions 
     of section 45(d) (relating to qualified facilities) is 
     amended by striking ``January 1, 2009'' and inserting 
     ``January 1, 2010'':
       (1) Paragraph (1).
       (2) Clauses (i) and (ii) of paragraph (2)(A).
       (3) Clauses (i)(I) and (ii) of paragraph (3)(A).
       (4) Paragraph (4).
       (5) Paragraph (5).
       (6) Paragraph (6).
       (7) Paragraph (7).
       (8) Paragraph (8).
       (9) Subparagraphs (A) and (B) of paragraph (9).
       (b) Production Credit for Electricity Produced From Marine 
     Renewables.--
       (1) In general.--Paragraph (1) of section 45(c) (relating 
     to resources) is amended by striking ``and'' at the end of 
     subparagraph (G), by striking the period at the end of 
     subparagraph (H) and inserting ``, and'', and by adding at 
     the end the following new subparagraph:
       ``(I) marine and hydrokinetic renewable energy.''.
       (2) Marine renewables.--Subsection (c) of section 45 is 
     amended by adding at the end the following new paragraph:
       ``(10) Marine and hydrokinetic renewable energy.--
       ``(A) In general.--The term `marine and hydrokinetic 
     renewable energy' means energy derived from--
       ``(i) waves, tides, and currents in oceans, estuaries, and 
     tidal areas,
       ``(ii) free flowing water in rivers, lakes, and streams,
       ``(iii) free flowing water in an irrigation system, canal, 
     or other man-made channel, including projects that utilize 
     nonmechanical structures to accelerate the flow of water for 
     electric power production purposes, or
       ``(iv) differentials in ocean temperature (ocean thermal 
     energy conversion).
       ``(B) Exceptions.--Such term shall not include any energy 
     which is derived from any source which utilizes a dam, 
     diversionary structure (except as provided in subparagraph 
     (A)(iii)), or impoundment for electric power production 
     purposes.''.
       (3) Definition of facility.--Subsection (d) of section 45 
     is amended by adding at the end the following new paragraph:
       ``(11) Marine and hydrokinetic renewable energy 
     facilities.--In the case of a facility producing electricity 
     from marine and hydrokinetic renewable energy, the term 
     `qualified facility' means any facility owned by the 
     taxpayer--
       ``(A) which has a nameplate capacity rating of at least 150 
     kilowatts, and
       ``(B) which is originally placed in service on or after the 
     date of the enactment of this paragraph and before January 1, 
     2010.''.
       (4) Credit rate.--Subparagraph (A) of section 45(b)(4) is 
     amended by striking ``or (9)'' and inserting ``(9), or 
     (11)''.
       (5) Coordination with small irrigation power.--Paragraph 
     (5) of section 45(d), as amended by subsection (a), is 
     amended by striking ``January 1, 2010'' and inserting ``the 
     date of the enactment of paragraph (11)''.
       (c) Sales of Electricity to Regulated Public Utilities 
     Treated as Sales to Unrelated Persons.--Section 45(e)(4) 
     (relating to related persons) is amended by adding at the end 
     the following new sentence: ``A taxpayer shall be treated as 
     selling electricity to an unrelated person if such 
     electricity is sold to a regulated public utility (as defined 
     in section 7701(a)(33).''.
       (d) Trash Facility Clarification.--Paragraph (7) of section 
     45(d) is amended--
       (1) by striking ``facility which burns'' and inserting 
     ``facility (other than a facility described in paragraph (6)) 
     which uses'', and
       (2) by striking ``combustion''.
       (e) Effective Dates.--
       (1) Extension.--The amendments made by subsection (a) shall 
     apply to property originally placed in service after December 
     31, 2008.
       (2) Modifications.--The amendments made by subsections (b) 
     and (c) shall apply to electricity produced and sold after 
     the date of the enactment of this Act, in taxable years 
     ending after such date.
       (3) Trash facility clarification.--The amendments made by 
     subsection (d) shall apply to electricity produced and sold 
     before, on, or after December 31, 2007.

     SEC. 812. EXTENSION AND MODIFICATION OF SOLAR ENERGY AND FUEL 
                   CELL INVESTMENT TAX CREDIT.

       (a) Extension of Credit.--
       (1) Solar energy property.--Paragraphs (2)(A)(i)(II) and 
     (3)(A)(ii) of section 48(a) (relating to energy credit) are 
     each amended by striking ``January 1, 2009'' and inserting 
     ``January 1, 2017''.
       (2) Fuel cell property.--Subparagraph (E) of section 
     48(c)(1) (relating to qualified

[[Page 5106]]

     fuel cell property) is amended by striking ``December 31, 
     2008'' and inserting ``December 31, 2017''.
       (3) Qualified microturbine property.--Subparagraph (E) of 
     section 48(c)(2) (relating to qualified microturbine 
     property) is amended by striking ``December 31, 2008'' and 
     inserting ``December 31, 2017''.
       (b) Allowance of Energy Credit Against Alternative Minimum 
     Tax.--Subparagraph (B) of section 38(c)(4) (relating to 
     specified credits) is amended by striking ``and'' at the end 
     of clause (iii), by striking the period at the end of clause 
     (iv) and inserting ``, and'', and by adding at the end the 
     following new clause:
       ``(v) the credit determined under section 46 to the extent 
     that such credit is attributable to the energy credit 
     determined under section 48.''.
       (c) Repeal of Dollar per Kilowatt Limitation for Fuel Cell 
     Property.--
       (1) In general.--Section 48(c)(1) (relating to qualified 
     fuel cell), as amended by subsection (a)(2), is amended by 
     striking subparagraph (B) and by redesignating subparagraphs 
     (C), (D), and (E) as subparagraphs (B), (C), and (D), 
     respectively.
       (2) Conforming amendment.--Section 48(a)(1) is amended by 
     striking ``paragraphs (1)(B) and (2)(B) of subsection (c)'' 
     and inserting ``subsection (c)(2)(B)''.
       (d) Public Electric Utility Property Taken Into Account.--
       (1) In general.--Paragraph (3) of section 48(a) is amended 
     by striking the second sentence thereof.
       (2) Conforming amendments.--
       (A) Paragraph (1) of section 48(c), as amended by this 
     section, is amended by striking subparagraph (C) and 
     redesignating subparagraph (D) as subparagraph (C).
       (B) Paragraph (2) of section 48(c), as amended by 
     subsection (a)(3), is amended by striking subparagraph (D) 
     and redesignating subparagraph (E) as subparagraph (D).
       (e) Effective Dates.--
       (1) Extension.--The amendments made by subsection (a) shall 
     take effect on the date of the enactment of this Act.
       (2) Allowance against alternative minimum tax.--The 
     amendments made by subsection (b) shall apply to credits 
     determined under section 46 of the Internal Revenue Code of 
     1986 in taxable years beginning after the date of the 
     enactment of this Act and to carrybacks of such credits.
       (3) Fuel cell property and public electric utility 
     property.--The amendments made by subsections (c) and (d) 
     shall apply to periods after the date of the enactment of 
     this Act, in taxable years ending after such date, under 
     rules similar to the rules of section 48(m) of the Internal 
     Revenue Code of 1986 (as in effect on the day before the date 
     of the enactment of the Revenue Reconciliation Act of 1990).

     SEC. 813. EXTENSION AND MODIFICATION OF RESIDENTIAL ENERGY 
                   EFFICIENT PROPERTY CREDIT.

       (a) Extension.--Section 25D(g) (relating to termination) is 
     amended by striking ``December 31, 2008'' and inserting 
     ``December 31, 2009''.
       (b) No Dollar Limitation for Credit for Solar Electric 
     Property.--
       (1) In general.--Section 25D(b)(1) (relating to maximum 
     credit) is amended by striking subparagraph (A) and by 
     redesignating subparagraphs (B) and (C) as subparagraphs (A) 
     and (B), respectively.
       (2) Conforming amendments.--Section 25D(e)(4) is amended--
       (A) by striking clause (i) in subparagraph (A),
       (B) by redesignating clauses (ii) and (iii) in subparagraph 
     (A) as clauses (i) and (ii), respectively, and
       (C) by striking ``, (2),'' in subparagraph (C).
       (c) Credit Allowed Against Alternative Minimum Tax.--
       (1) In general.--Subsection (c) of section 25D is amended 
     to read as follows:
       ``(c) Limitation Based on Amount of Tax; Carryforward of 
     Unused Credit.--
       ``(1) Limitation based on amount of tax.--In the case of a 
     taxable year to which section 26(a)(2) does not apply, the 
     credit allowed under subsection (a) for the taxable year 
     shall not exceed the excess of--
       ``(A) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(B) the sum of the credits allowable under this subpart 
     (other than this section) and section 27 for the taxable 
     year.
       ``(2) Carryforward of unused credit.--
       ``(A) Rule for years in which all personal credits allowed 
     against regular and alternative minimum tax.--In the case of 
     a taxable year to which section 26(a)(2) applies, if the 
     credit allowable under subsection (a) exceeds the limitation 
     imposed by section 26(a)(2) for such taxable year reduced by 
     the sum of the credits allowable under this subpart (other 
     than this section), such excess shall be carried to the 
     succeeding taxable year and added to the credit allowable 
     under subsection (a) for such succeeding taxable year.
       ``(B) Rule for other years.--In the case of a taxable year 
     to which section 26(a)(2) does not apply, if the credit 
     allowable under subsection (a) exceeds the limitation imposed 
     by paragraph (1) for such taxable year, such excess shall be 
     carried to the succeeding taxable year and added to the 
     credit allowable under subsection (a) for such succeeding 
     taxable year.''.
       (2) Conforming amendments.--
       (A) Section 23(b)(4)(B) is amended by inserting ``and 
     section 25D'' after ``this section''.
       (B) Section 24(b)(3)(B) is amended by striking ``and 25B'' 
     and inserting ``, 25B, and 25D''.
       (C) Section 25B(g)(2) is amended by striking ``section 23'' 
     and inserting ``sections 23 and 25D''.
       (D) Section 26(a)(1) is amended by striking ``and 25B'' and 
     inserting ``25B, and 25D''.
       (d) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply to taxable years beginning after December 31, 2007.
       (2) Application of egtrra sunset.--The amendments made by 
     subparagraphs (A) and (B) of subsection (c)(2) shall be 
     subject to title IX of the Economic Growth and Tax Relief 
     Reconciliation Act of 2001 in the same manner as the 
     provisions of such Act to which such amendments relate.

     SEC. 814. EXTENSION AND MODIFICATION OF CREDIT FOR CLEAN 
                   RENEWABLE ENERGY BONDS.

       (a) Extension.--Section 54(m) (relating to termination) is 
     amended by striking ``December 31, 2008'' and inserting 
     ``December 31, 2009''.
       (b) Increase in National Limitation.--Section 54(f) 
     (relating to limitation on amount of bonds designated) is 
     amended--
       (1) by inserting ``, and for the period beginning after the 
     date of the enactment of the Clean Energy Tax Stimulus Act of 
     2008 and ending before January 1, 2010, $400,000,000'' after 
     ``$1,200,000,000'' in paragraph (1),
       (2) by striking ``$750,000,000 of the'' in paragraph (2) 
     and inserting ``$750,000,000 of the $1,200,000,000'', and
       (3) by striking ``bodies'' in paragraph (2) and inserting 
     ``bodies, and except that the Secretary may not allocate more 
     than \1/3\ of the $400,000,000 national clean renewable 
     energy bond limitation to finance qualified projects of 
     qualified borrowers which are public power providers nor more 
     than \1/3\ of such limitation to finance qualified projects 
     of qualified borrowers which are mutual or cooperative 
     electric companies described in section 501(c)(12) or section 
     1381(a)(2)(C)''.
       (c) Public Power Providers Defined.--Section 54(j) is 
     amended--
       (1) by adding at the end the following new paragraph:
       ``(6) Public power provider.--The term `public power 
     provider' means a State utility with a service obligation, as 
     such terms are defined in section 217 of the Federal Power 
     Act (as in effect on the date of the enactment of this 
     paragraph).'', and
       (2) by inserting ``; Public Power Provider'' before the 
     period at the end of the heading.
       (d) Technical Amendment.--The third sentence of section 
     54(e)(2) is amended by striking ``subsection (l)(6)'' and 
     inserting ``subsection (l)(5)''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after the date of the enactment 
     of this Act.

     SEC. 815. EXTENSION OF SPECIAL RULE TO IMPLEMENT FERC 
                   RESTRUCTURING POLICY.

       (a) Qualifying Electric Transmission Transaction.--
       (1) In general.--Section 451(i)(3) (defining qualifying 
     electric transmission transaction) is amended by striking 
     ``January 1, 2008'' and inserting ``January 1, 2010''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to transactions after December 31, 2007.
       (b) Independent Transmission Company.--
       (1) In general.--Section 451(i)(4)(B)(ii) (defining 
     independent transmission company) is amended by striking 
     ``December 31, 2007'' and inserting ``the date which is 2 
     years after the date of such transaction''.
       (2) Effective date.--The amendment made by this subsection 
     shall take effect as if included in the amendments made by 
     section 909 of the American Jobs Creation Act of 2004.

    Subtitle B--Extension of Incentives to Improve Energy Efficiency

     SEC. 821. EXTENSION AND MODIFICATION OF CREDIT FOR ENERGY 
                   EFFICIENCY IMPROVEMENTS TO EXISTING HOMES.

       (a) Extension of Credit.--Section 25C(g) (relating to 
     termination) is amended by striking ``December 31, 2007'' and 
     inserting ``December 31, 2009''.
       (b) Qualified Biomass Fuel Property.--
       (1) In general.--Section 25C(d)(3) is amended--
       (A) by striking ``and'' at the end of subparagraph (D),
       (B) by striking the period at the end of subparagraph (E) 
     and inserting ``, and'', and
       (C) by adding at the end the following new subparagraph:
       ``(F) a stove which uses the burning of biomass fuel to 
     heat a dwelling unit located in the United States and used as 
     a residence by the taxpayer, or to heat water for use in such 
     a dwelling unit, and which has a thermal efficiency rating of 
     at least 75 percent.''.
       (2) Biomass fuel.--Section 25C(d) (relating to residential 
     energy property expenditures) is amended by adding at the end 
     the following new paragraph:

[[Page 5107]]

       ``(6) Biomass fuel.--The term `biomass fuel' means any 
     plant-derived fuel available on a renewable or recurring 
     basis, including agricultural crops and trees, wood and wood 
     waste and residues (including wood pellets), plants 
     (including aquatic plants), grasses, residues, and fibers.''.
       (c) Modifications of Standards for Energy-Efficient 
     Building Property.--
       (1) Electric heat pumps.--Subparagraph (B) of section 
     25C(d)(3) is amended to read as follows:
       ``(A) an electric heat pump which achieves the highest 
     efficiency tier established by the Consortium for Energy 
     Efficiency, as in effect on January 1, 2008.''.
       (2) Central air conditioners.--Section 25C(d)(3)(D) is 
     amended by striking ``2006'' and inserting ``2008''.
       (3) Water heaters.--Subparagraph (E) of section 25C(d) is 
     amended to read as follows:
       ``(E) a natural gas, propane, or oil water heater which has 
     either an energy factor of at least 0.80 or a thermal 
     efficiency of at least 90 percent.''.
       (4) Oil furnaces and hot water boilers.--Paragraph (4) of 
     section 25C(d) is amended to read as follows:
       ``(4) Qualified natural gas, propane, and oil furnaces and 
     hot water boilers.--
       ``(A) Qualified natural gas furnace.--The term `qualified 
     natural gas furnace' means any natural gas furnace which 
     achieves an annual fuel utilization efficiency rate of not 
     less than 95.
       ``(B) Qualified natural gas hot water boiler.--The term 
     `qualified natural gas hot water boiler' means any natural 
     gas hot water boiler which achieves an annual fuel 
     utilization efficiency rate of not less than 90.
       ``(C) Qualified propane furnace.--The term `qualified 
     propane furnace' means any propane furnace which achieves an 
     annual fuel utilization efficiency rate of not less than 95.
       ``(D) Qualified propane hot water boiler.--The term 
     `qualified propane hot water boiler' means any propane hot 
     water boiler which achieves an annual fuel utilization 
     efficiency rate of not less than 90.
       ``(E) Qualified oil furnaces.--The term `qualified oil 
     furnace' means any oil furnace which achieves an annual fuel 
     utilization efficiency rate of not less than 90.
       ``(F) Qualified oil hot water boiler.--The term `qualified 
     oil hot water boiler' means any oil hot water boiler which 
     achieves an annual fuel utilization efficiency rate of not 
     less than 90.''.
       (d) Effective Date.--The amendments made this section shall 
     apply to expenditures made after December 31, 2007.

     SEC. 822. EXTENSION AND MODIFICATION OF TAX CREDIT FOR ENERGY 
                   EFFICIENT NEW HOMES.

       (a) Extension of Credit.--Subsection (g) of section 45L 
     (relating to termination) is amended by striking ``December 
     31, 2008'' and inserting ``December 31, 2010''.
       (b) Allowance for Contractor's Personal Residence.--
     Subparagraph (B) of section 45L(a)(1) is amended to read as 
     follows:
       ``(B)(i) acquired by a person from such eligible contractor 
     and used by any person as a residence during the taxable 
     year, or
       ``(ii) used by such eligible contractor as a residence 
     during the taxable year.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to homes acquired after December 31, 2008.

     SEC. 823. EXTENSION AND MODIFICATION OF ENERGY EFFICIENT 
                   COMMERCIAL BUILDINGS DEDUCTION.

       (a) Extension.--Section 179D(h) (relating to termination) 
     is amended by striking ``December 31, 2008'' and inserting 
     ``December 31, 2009''.
       (b) Adjustment of Maximum Deduction Amount.--
       (1) In general.--Subparagraph (A) of section 179D(b)(1) 
     (relating to maximum amount of deduction) is amended by 
     striking ``$1.80'' and inserting ``$2.25''.
       (2) Partial allowance.--Paragraph (1) of section 179D(d) is 
     amended--
       (A) by striking ``$.60'' and inserting ``$0.75'', and
       (B) by striking ``$1.80'' and inserting ``$2.25''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act.

     SEC. 824. MODIFICATION AND EXTENSION OF ENERGY EFFICIENT 
                   APPLIANCE CREDIT FOR APPLIANCES PRODUCED AFTER 
                   2007.

       (a) In General.--Subsection (b) of section 45M (relating to 
     applicable amount) is amended to read as follows:
       ``(b) Applicable Amount.--For purposes of subsection (a)--
       ``(1) Dishwashers.--The applicable amount is--
       ``(A) $45 in the case of a dishwasher which is manufactured 
     in calendar year 2008 or 2009 and which uses no more than 324 
     kilowatt hours per year and 5.8 gallons per cycle, and
       ``(B) $75 in the case of a dishwasher which is manufactured 
     in calendar year 2008, 2009, or 2010 and which uses no more 
     than 307 kilowatt hours per year and 5.0 gallons per cycle 
     (5.5 gallons per cycle for dishwashers designed for greater 
     than 12 place settings).
       ``(2) Clothes washers.--The applicable amount is--
       ``(A) $75 in the case of a residential top-loading clothes 
     washer manufactured in calendar year 2008 which meets or 
     exceeds a 1.72 modified energy factor and does not exceed a 
     8.0 water consumption factor,
       ``(B) $125 in the case of a residential top-loading clothes 
     washer manufactured in calendar year 2008 or 2009 which meets 
     or exceeds a 1.8 modified energy factor and does not exceed a 
     7.5 water consumption factor,
       ``(C) $150 in the case of a residential or commercial 
     clothes washer manufactured in calendar year 2008, 2009, or 
     2010 which meets or exceeds 2.0 modified energy factor and 
     does not exceed a 6.0 water consumption factor, and
       ``(D) $250 in the case of a residential or commercial 
     clothes washer manufactured in calendar year 2008, 2009, or 
     2010 which meets or exceeds 2.2 modified energy factor and 
     does not exceed a 4.5 water consumption factor.
       ``(3) Refrigerators.--The applicable amount is--
       ``(A) $50 in the case of a refrigerator which is 
     manufactured in calendar year 2008, and consumes at least 20 
     percent but not more than 22.9 percent less kilowatt hours 
     per year than the 2001 energy conservation standards,
       ``(B) $75 in the case of a refrigerator which is 
     manufactured in calendar year 2008 or 2009, and consumes at 
     least 23 percent but no more than 24.9 percent less kilowatt 
     hours per year than the 2001 energy conservation standards,
       ``(C) $100 in the case of a refrigerator which is 
     manufactured in calendar year 2008, 2009, or 2010, and 
     consumes at least 25 percent but not more than 29.9 percent 
     less kilowatt hours per year than the 2001 energy 
     conservation standards, and
       ``(D) $200 in the case of a refrigerator manufactured in 
     calendar year 2008, 2009, or 2010 and which consumes at least 
     30 percent less energy than the 2001 energy conservation 
     standards.''.
       (b) Eligible Production.--
       (1) Similar treatment for all appliances.--Subsection (c) 
     of section 45M (relating to eligible production) is amended--
       (A) by striking paragraph (2),
       (B) by striking ``(1) In general'' and all that follows 
     through ``the eligible'' and inserting ``The eligible'', and
       (C) by moving the text of such subsection in line with the 
     subsection heading and redesignating subparagraphs (A) and 
     (B) as paragraphs (1) and (2), respectively.
       (2) Modification of base period.--Paragraph (2) of section 
     45M(c), as amended by paragraph (1) of this section, is 
     amended by striking ``3-calendar year'' and inserting ``2-
     calendar year''.
       (c) Types of Energy Efficient Appliances.--Subsection (d) 
     of section 45M (defining types of energy efficient 
     appliances) is amended to read as follows:
       ``(d) Types of Energy Efficient Appliance.--For purposes of 
     this section, the types of energy efficient appliances are--
       ``(1) dishwashers described in subsection (b)(1),
       ``(2) clothes washers described in subsection (b)(2), and
       ``(3) refrigerators described in subsection (b)(3).''.
       (d) Aggregate Credit Amount Allowed.--
       (1) Increase in limit.--Paragraph (1) of section 45M(e) 
     (relating to aggregate credit amount allowed) is amended to 
     read as follows:
       ``(1) Aggregate credit amount allowed.--The aggregate 
     amount of credit allowed under subsection (a) with respect to 
     a taxpayer for any taxable year shall not exceed $75,000,000 
     reduced by the amount of the credit allowed under subsection 
     (a) to the taxpayer (or any predecessor) for all prior 
     taxable years beginning after December 31, 2007.''.
       (2) Exception for certain refrigerator and clothes 
     washers.--Paragraph (2) of section 45M(e) is amended to read 
     as follows:
       ``(2) Amount allowed for certain refrigerators and clothes 
     washers.--Refrigerators described in subsection (b)(3)(D) and 
     clothes washers described in subsection (b)(2)(D) shall not 
     be taken into account under paragraph (1).''.
       (e) Qualified Energy Efficient Appliances.--
       (1) In general.--Paragraph (1) of section 45M(f) (defining 
     qualified energy efficient appliance) is amended to read as 
     follows:
       ``(1) Qualified energy efficient appliance.--The term 
     `qualified energy efficient appliance' means--
       ``(A) any dishwasher described in subsection (b)(1),
       ``(B) any clothes washer described in subsection (b)(2), 
     and
       ``(C) any refrigerator described in subsection (b)(3).''.
       (2) Clothes washer.--Section 45M(f)(3) (defining clothes 
     washer) is amended by inserting ``commercial'' before 
     ``residential'' the second place it appears.
       (3) Top-loading clothes washer.--Subsection (f) of section 
     45M (relating to definitions) is amended by redesignating 
     paragraphs (4), (5), (6), and (7) as paragraphs (5), (6), 
     (7), and (8), respectively, and by inserting after paragraph 
     (3) the following new paragraph:
       ``(4) Top-loading clothes washer.--The term `top-loading 
     clothes washer' means a clothes washer which has the clothes 
     container compartment access located on the

[[Page 5108]]

     top of the machine and which operates on a vertical axis.''.
       (4) Replacement of energy factor.--Section 45M(f)(6), as 
     redesignated by paragraph (3), is amended to read as follows:
       ``(6) Modified energy factor.--The term `modified energy 
     factor' means the modified energy factor established by the 
     Department of Energy for compliance with the Federal energy 
     conservation standard.''.
       (5) Gallons per cycle; water consumption factor.--Section 
     45M(f) (relating to definitions), as amended by paragraph 
     (3), is amended by adding at the end the following:
       ``(9) Gallons per cycle.--The term `gallons per cycle' 
     means, with respect to a dishwasher, the amount of water, 
     expressed in gallons, required to complete a normal cycle of 
     a dishwasher.
       ``(10) Water consumption factor.--The term `water 
     consumption factor' means, with respect to a clothes washer, 
     the quotient of the total weighted per-cycle water 
     consumption divided by the cubic foot (or liter) capacity of 
     the clothes washer.''.
       (f) Effective Date.--The amendments made by this section 
     shall apply to appliances produced after December 31, 2007.
                                 ______
                                 
  SA 4420. Mr. NELSON of Florida (for himself and Mr. Coleman) 
submitted an amendment intended to be proposed by him to the bill H.R. 
3221, moving the United States toward greater energy independence and 
security, developing innovative new technologies, reducing carbon 
emissions, creating green jobs, protecting consumers, increasing clean 
renewable energy production, and modernizing our energy infrastructure, 
and to amend the Internal Revenue Code of 1986 to provide tax 
incentives for the production of renewable energy and energy 
conservation; which was ordered to lie on the table; as follows:

       At the end of title VI, insert the following:

     SEC. PENALTY-FREE WITHDRAWALS FROM RETIREMENT PLANS FOR 
                   FORECLOSURE RECOVERY RELIEF FOR INDIVIDUALS 
                   WITH MORTGAGES ON THEIR PRINCIPAL RESIDENCES.

       (a) In General.--Section 72(t) of the Internal Revenue Code 
     of 1986 shall not apply to any qualified foreclosure recovery 
     distribution.
       (b) Limitations.--
       (1) In general.--For purposes of this section, the 
     aggregate amount of distributions received by an individual 
     which may he treated as qualified foreclosure recovery 
     distributions for any taxable year shall not exceed the 
     excess (if any) of--
       (A) the lesser of
       (i) the individual's qualified mortgage expenditures for 
     the taxable year, or
       (ii) $25,000, over
       (B) the aggregate amounts treated as qualified foreclosure 
     recovery distributions received by such individual for all 
     prior taxable years.
       (2) Treatment of plan distributions.--If a distribution to 
     an individual would (without regard to paragraph (1)) be a 
     qualified foreclosure recovery distribution, a plan shall not 
     be treated as violating any requirement of the Internal 
     Revenue Code of 1986 merely because the plan treats such 
     distribution as a qualified foreclosure recovery 
     distribution, unless the aggregate amount of such 
     distributions from all plans maintained by the employer (and 
     any member of any controlled group which includes the 
     employer) to such individual exceeds $25,000.
       (3) Controlled group.--For purposes of paragraph (2), the 
     term ``controlled group'' means any group treated as a single 
     employer under subsection (b), (e), (m), or (o) of section 
     414 of such Code.
       (c) Amount Distributed May Be Repaid.--
       (1) In general.--Any individual who receives a qualified 
     foreclosure recovery distribution may, at any time during the 
     3-year period beginning on the day after the date on which 
     such distribution was received, make one or more 
     contributions in an aggregate amount not to exceed the amount 
     of such distribution to an eligible retirement plan of which 
     such individual is a beneficiary and to which a rollover 
     contribution of such distribution could be made under section 
     402(c), 403(a)(4), 403(h)(8), 408(d)(3), or 457(e)(16) of the 
     Internal Revenue Code of 1986, as the case may be.
       (2) Treatment of repayments of distributions from eligible 
     retirement plans other than iras.--For purposes of such Code, 
     if a contribution is made pursuant to paragraph (1) with 
     respect to a qualified foreclosure recovery distribution from 
     an eligible retirement plan other than an individual 
     retirement plan, then the taxpayer shall, to the extent of 
     the amount of the contribution, be treated as having received 
     the qualified foreclosure recovery distribution in an 
     eligible rollover distribution (as defined in section 
     402(e)(4) of such Code) and as having transferred the amount 
     to the eligible retirement plan in a direct trustee to 
     trustee transfer within 60 days of the distribution.
       (3) Treatment of repayments for distributions from iras.--
     For purposes of such Code, if a contribution is made pursuant 
     to paragraph (1) with respect to a qualified foreclosure 
     recovery distribution from an individual retirement plan (as 
     defined by section 7701(a)(37) of such Code), then, to the 
     extent of the amount of the contribution, the qualified 
     foreclosure recovery distribution shall be treated as a 
     distribution described in section 408(d)(3) of such Code and 
     as having been transferred to the eligible retirement plan in 
     a direct trustee to trustee transfer within 60 days of the 
     distribution.
       (4) Application to eligible retirement plans.--
       (A) In general.--Nothing in this section shall be treated 
     as requiring an eligible retirement plan to accept any 
     contributions described in this subsection.
       (B) Qualification.--An eligible retirement plan shall not 
     be treated as violating any requirement of Federal law solely 
     by reason of the acceptance of contributions described in 
     this subparagraph.
       (d) Definitions.--For Purposes of This Section
       (1) Qualified foreclosure recovery distribution.--The term 
     ``qualified foreclosure recovery distribution'' means any 
     distribution to an individual from an eligible retirement 
     plan which is made--
       (A) on or after the date of the enactment of this Act and 
     before January 1, 2010, and
       (B) during a taxable year during which the individual has 
     qualifying mortgage expenditures.
       (2) Qualifying mortgage expenditures.-- 
       (A) In general.--The term ``qualifying mortgage 
     expenditures'' means any of the following expenditures:
       (i) Payment of principal or interest on an applicable 
     mortgage.
       (ii) Payment of costs paid or incurred in refinancing, or 
     modifying the terms of, an applicable mortgage.
       (B) Applicable mortgage.--The term ``applicable mortgage'' 
     means a mortgage which--
       (i) was entered into after December 31, 1999, and before 
     the date of the enactment of this Act, and
       (ii) constitutes a security interest in the principal 
     residence of the mortgagor.
       (C) Joint filers.--In the case of married individuals 
     filing a joint return under section 6013 of the Internal 
     Revenue Code of 1986, the qualifying mortgage expenditures of 
     the taxpayer may be allocated between the spouses in such 
     manner as they elect.
       (3) Eligible retirement plan.--The term ``eligible 
     retirement plan'' shall have the meaning given such term by 
     section 402(c)(8)(B) of such Code.
       (4) Principal residence.--The term ``principal residence'' 
     has the same meaning as when used in section 121 of such 
     Code.
       (e) Income Inclusion Spread Over 3-Year Period for 
     Qualified Foreclosure Recovery Distributions.--
       (1) In general.--In the case of any qualified foreclosure 
     recovery distribution, unless the taxpayer elects not to have 
     this subsection apply for any taxable year, any amount 
     required to be included in gross income for such taxable year 
     shall be so included ratably over the 3-taxable year period 
     beginning with such taxable year.
       (2) Special rule.--For purposes of paragraph (1), rules 
     similar to the rules of subparagraph
       (E) of section 408A(d)(3) of the Internal Revenue Code of 
     1986 shall apply.
       (f) Special Rules. 
       (1) Exemption of distributions from trustee to trustee 
     transfer and withholding rules.--For purposes of sections 
     401(a)(31), 402(f), and 3405 of the Internal Revenue Code of 
     1986, qualified foreclosure recovery distributions shall not 
     be treated as eligible rollover distributions.
       (2) Qualified foreclosure recovery distributions treated as 
     meeting plan distribution requirements.--For purposes of such 
     Code, a qualified foreclosure recovery distribution shall be 
     treated as meeting the requirements of sections 
     401(k)(2)(B)(i), 403(b)(7)(A)(ii), 403(b)(11), and 
     457(d)(1)(A) of such Code.
       (3) Substantially equal periodic payments.--A qualified 
     foreclosure recovery distribution--
       (A) shall be disregarded in determining whether a payment 
     is a part of a series of substantially equal periodic payment 
     under section 72(t)(2)(A)(iv) of such Code, and
       (B) shall not constitute a change in substantially equal 
     periodic payments under section 72(t)(4) of such Code.
       (g) Provisions Relating to Plan Amendments.--
       (1) In general.--If this subsection applies to any 
     amendment to any plan or annuity contract, such plan or 
     contract shall be treated as being operated in accordance 
     with the terms of the plan during the period described in 
     paragraph (2)(B)(i).
       (2) Amendments to which subsection applies.--
       (A) In general.--This subsection shall apply to any 
     amendment to any plan or annuity contract which is made--
        (i) pursuant to the provisions this section, or pursuant 
     to any regulation issued by the Secretary of the Treasury or 
     the Secretary of Labor under this section, and
       (ii) on or before the last day of the first plan year 
     beginning on or after January 1, 2010, or such later date as 
     the Secretary of the Treasury may prescribe.

     In the case of a governmental plan (as defined in section 
     414(d) of the Internal Revenue Code of 1986), clause (ii) 
     shall be applied

[[Page 5109]]

     by substituting the date which is 2 years after the date 
     otherwise applied under clause (ii).
       (B) Conditions.--This subsection shall not apply to any 
     amendment unless--
       (i) during the period--
       (I) beginning on the date the legislative or regulatory 
     amendment described in subparagraph (A)(i) takes effect (or 
     in the case of a plan or contract amendment not required by 
     such legislative or regulatory amendment, any later effective 
     date specified by the plan), and
       (II) ending on the date described in subparagraph (A)(ii) 
     (or, if earlier, the date the plan or contract amendment is 
     adopted),

     the plan or contract is operated as if such plan or contract 
     amendment were in effect; and
       (ii) such plan or contract amendment applies retroactively 
     for such period.
                                 ______
                                 
  SA 4421. Mr. CARDIN (for himself and Mr. Ensign) proposed an 
amendment to amendment SA 4387 submitted by Mr. Dodd (for himself and 
Mr. Shelby) to the bill H.R. 3221, moving the United States toward 
greater energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       At the end, insert the following:

                TITLE--FIRST-TIME HOMEBUYERS' TAX CREDIT

     SEC. _01. CREDIT FOR FIRST-TIME HOMEBUYERS.

       (a) In General.--Subpart A of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     nonrefundable personal credits) is amended by inserting after 
     section 25D the following new section:

     ``SEC. 25E. PURCHASE OF PRINCIPAL RESIDENCE BY FIRST-TIME 
                   HOMEBUYER.

       ``(a) Allowance of Credit.--
       ``(1) In general.--In the case of an individual who is a 
     first-time homebuyer of a principal residence in the United 
     States during any taxable year, there shall be allowed as a 
     credit against the tax imposed by this subtitle for the 
     taxable year an amount equal to so much of the purchase price 
     of the residence as does not exceed $7,000.
       ``(2) Allocation of credit amount.--The amount of the 
     credit allowed under paragraph (1) shall be equally divided 
     among the 2 taxable years beginning with the taxable year in 
     which the purchase of the principal residence is made.
       ``(b) Limitations.--
       ``(1) Limitation based on modified adjusted gross income.--
       ``(A) In general.--The amount allowable as a credit under 
     subsection (a) (determined without regard to this subsection) 
     for the taxable year shall be reduced (but not below zero) by 
     the amount which bears the same ratio to the credit so 
     allowable as--
       ``(i) the excess (if any) of--

       ``(I) the taxpayer's modified adjusted gross income for 
     such taxable year, over
       ``(II) $70,000 ($110,000 in the case of a joint return), 
     bears to

       ``(ii) $20,000.
       ``(B) Modified adjusted gross income.--For purposes of 
     paragraph (1), the term `modified adjusted gross income' 
     means the adjusted gross income of the taxpayer for the 
     taxable year increased by any amount excluded from gross 
     income under section 911, 931, or 933.
       ``(2) Limitation based on amount of tax.--In the case of a 
     taxable year to which section 26(a)(2) does not apply, the 
     credit allowed under subsection (a) for any taxable year 
     shall not exceed the excess of--
       ``(A) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(B) the sum of the credits allowable under this subpart 
     (other than this section and section 23) for the taxable 
     year.
       ``(c) Definitions and Special Rules.--For purposes of this 
     section--
       ``(1) First-time homebuyer.--
       ``(A) In general.--The term `first-time homebuyer' has the 
     same meaning as when used in section 72(t)(8)(D)(i).
       ``(B) One-time only.--If an individual is treated as a 
     first-time homebuyer with respect to any principal residence, 
     such individual may not be treated as a first-time homebuyer 
     with respect to any other principal residence.
       ``(C) Married individuals filing jointly.--In the case of 
     married individuals who file a joint return, the credit under 
     this section is allowable only if both individuals are first-
     time homebuyers.
       ``(D) Other taxpayers.--If 2 or more individuals who are 
     not married purchase a principal residence--
       ``(i) the credit under this section is allowable only if 
     each of the individuals is a first-time homebuyer, and
       ``(ii) the amount of the credit allowed under subsection 
     (a) shall be allocated among such individuals in such manner 
     as the Secretary may prescribe.
       ``(2) Principal residence.--The term `principal residence' 
     has the same meaning as when used in section 121.
       ``(3) Purchase.--
       ``(A) In general.--The term `purchase' means any 
     acquisition, but only if--
       ``(i) the property is not acquired from a person whose 
     relationship to the person acquiring it would result in the 
     disallowance of losses under section 267 or 707(b) (but, in 
     applying section 267 (b) and (c) for purposes of this 
     section, paragraph (4) of section 267(c) shall be treated as 
     providing that the family of an individual shall include only 
     the individual's spouse, ancestors, and lineal descendants), 
     and
       ``(ii) the basis of the property in the hands of the person 
     acquiring it is not determined--

       ``(I) in whole or in part by reference to the adjusted 
     basis of such property in the hands of the person from whom 
     acquired, or
       ``(II) under section 1014(a) (relating to property acquired 
     from a decedent).

       ``(B) Construction.--A residence which is constructed by 
     the taxpayer shall be treated as purchased by the taxpayer.
       ``(4) Purchase price.--The term `purchase price' means the 
     adjusted basis of the principal residence on the date of 
     acquisition (within the meaning of section 72(t)(8)(D)(iii)).
       ``(d) Denial of Double Benefit.--No credit shall be allowed 
     under subsection (a) for any expense for which a deduction or 
     credit is allowed under any other provision of this chapter.
       ``(e) Recapture in the Case of Certain Dispositions.--In 
     the event that a taxpayer--
       ``(1) disposes of the principal residence with respect to 
     which a credit is allowed under subsection (a), or
       ``(2) fails to occupy such residence as the taxpayer's 
     principal residence,

     at any time within 24 months after the date on which the 
     taxpayer purchased such residence, then the remaining portion 
     of the credit allowed under subsection (a) shall be 
     disallowed in the taxable year during which such disposition 
     occurred or in which the taxpayer failed to occupy the 
     residence as a principal residence, and in any subsequent 
     taxable year in which the remaining portion of the credit 
     would, but for this subsection, have been allowed.
       ``(f) Basis Adjustment.--For purposes of this subtitle, if 
     a credit is allowed under this section with respect to the 
     purchase of any residence, the basis of such residence shall 
     be reduced by the amount of the credit so allowed.
       ``(g) Property To Which Section Applies.--The provisions of 
     this section shall apply to a principal residence if the 
     taxpayer's date of acquisition of the residence (within the 
     meaning of section 72(t)(8)(D)(iii)) and date of settlement 
     on such residence are during the period beginning on the date 
     of the enactment of this section and ending on the date that 
     is 1 year after such date.''.
       (b) Conforming Amendments.--
       (1) Section 24(b)(3)(B) of the Internal Revenue Code of 
     1986 is amended by striking ``and 25B'' and inserting ``, 
     25B, and 25E''.
       (2) Section 25(e)(1)(C)(ii) of such Code is amended by 
     inserting ``25E,'' after ``25D,''.
       (3) Section 25B(g)(2) of such Code is amended by striking 
     ``section 23'' and inserting ``sections 23 and 25E''.
       (4) Section 25D(c)(2) of such Code is amended by striking 
     ``and 25B'' and inserting ``25B, and 25E''.
       (5) Section 26(a)(1) of such Code is amended by striking 
     ``and 25B'' and inserting ``25B, and 25E''.
       (6) Section 904(i) of such Code is amended by striking 
     ``and 25B'' and inserting ``25B, and 25E''.
       (7) Subsection (a) of section 1016 of such Code is amended 
     by striking ``and'' at the end of paragraph (36), by striking 
     the period at the end of paragraph (37) and inserting ``, 
     and'', and by adding at the end the following new paragraph:
       ``(38) to the extent provided in section 25E(f).''.
       (8) Section 1400C(d)(2) of such Code is amended by striking 
     ``and 25D'' and inserting ``25D, and 25E''.
       (c) Clerical Amendment.--The table of sections for subpart 
     A of part IV of subchapter A of chapter 1 of the Internal 
     Revenue Code of 1986 is amended by inserting after the item 
     relating to section 25D the following new item:

``Sec. 25E. Purchase of principal residence by first-time homebuyer.''.
                                 ______
                                 
  SA 4422. Mr. ROBERTS (for himself and Mr. Brownback) submitted an 
amendment intended to be proposed to amendment SA 4389 submitted by Ms. 
Landrieu (for herself, Mr. Cochran, Mr. Vitter, and Mr. Wicker) to the 
amendment SA 4387 submitted by Mr. Dodd (for himself and Mr. Shelby) to 
the bill H.R. 3221, moving the United

[[Page 5110]]

States toward greater energy independence and security, developing 
innovative new technologies, reducing carbon emissions, creating green 
jobs, protecting consumers, increasing clean renewable energy 
production, and modernizing our energy infrastructure, and to amend the 
Internal Revenue Code of 1986 to provide tax incentives for the 
production of renewable energy and energy conservation; which was 
ordered to lie on the table; as follows:

       At the end add the following:

                 TITLE--DISASTER TAX RELIEF ASSISTANCE

     SEC. ___. TEMPORARY TAX RELIEF FOR KIOWA COUNTY, KANSAS AND 
                   SURROUNDING AREA.

       The following provisions of or relating to the Internal 
     Revenue Code of 1986 shall apply, in addition to the areas 
     described in such provisions, to an area with respect to 
     which a major disaster has been declared by the President 
     under section 401 of the Robert T. Stafford Disaster Relief 
     and Emergency Assistance Act (FEMA-1699-DR, as in effect on 
     the date of the enactment of this Act) by reason of severe 
     storms and tornados beginning on May 4, 2007, and determined 
     by the President to warrant individual or individual and 
     public assistance from the Federal Government under such Act 
     with respect to damages attributed to such storms and 
     tornados:
       (1) Suspension of certain limitations on personal casualty 
     losses.--Section 1400S(b)(1) of the Internal Revenue Code of 
     1986, by substituting ``May 4, 2007'' for ``August 25, 
     2005''.
       (2) Extension of replacement period for nonrecognition of 
     gain.--Section 405 of the Katrina Emergency Tax Relief Act of 
     2005, by substituting ``on or after May 4, 2007, by reason of 
     the May 4, 2007, storms and tornados'' for ``on or after 
     August 25, 2005, by reason of Hurricane Katrina''.
       (3) Employee retention credit for employers affected by may 
     4 storms and tornados.--Section 1400R(a) of the Internal 
     Revenue Code of 1986--
       (A) by substituting ``May 4, 2007'' for ``August 28, 2005'' 
     each place it appears,
       (B) by substituting ``January 1, 2008'' for ``January 1, 
     2006'' both places it appears, and
       (C) only with respect to eligible employers who employed an 
     average of not more than 200 employees on business days 
     during the taxable year before May 4, 2007.
       (4) Special allowance for certain property acquired on or 
     after may 5, 2007.--Section 1400N(d) of such Code--
       (A) by substituting ``qualified Recovery Assistance 
     property'' for ``qualified Gulf Opportunity Zone property'' 
     each place it appears,
       (B) by substituting ``May 5, 2007'' for ``August 28, 2005'' 
     each place it appears,
       (C) by substituting ``December 31, 2008'' for ``December 
     31, 2007'' in paragraph (2)(A)(v),
       (D) by substituting ``December 31, 2009'' for ``December 
     31, 2008'' in paragraph (2)(A)(v),
       (E) by substituting ``May 4, 2007'' for ``August 27, 2005'' 
     in paragraph (3)(A),
       (F) by substituting ``January 1, 2009'' for ``January 1, 
     2008'' in paragraph (3)(B), and
       (G) determined without regard to paragraph (6) thereof.
       (5) Increase in expensing under section 179.--Section 
     1400N(e) of such Code, by substituting ``qualified section 
     179 Recovery Assistance property'' for ``qualified section 
     179 Gulf Opportunity Zone property'' each place it appears.
       (6) Expensing for certain demolition and clean-up costs.--
     Section 1400N(f) of such Code--
       (A) by substituting ``qualified Recovery Assistance clean-
     up cost'' for ``qualified Gulf Opportunity Zone clean-up 
     cost'' each place it appears, and
       (B) by substituting ``beginning on May 4, 2007, and ending 
     on December 31, 2009'' for ``beginning on August 28, 2005, 
     and ending on December 31, 2007'' in paragraph (2) thereof.
       (7) Treatment of public utility property disaster losses.--
     Section 1400N(o) of such Code.
       (8) Treatment of net operating losses attributable to storm 
     losses.--Section 1400N(k) of such Code--
       (A) by substituting ``qualified Recovery Assistance loss'' 
     for ``qualified Gulf Opportunity Zone loss'' each place it 
     appears,
       (B) by substituting ``after May 3, 2007, and before on 
     January 1, 2010'' for ``after August 27, 2005, and before 
     January 1, 2008'' each place it appears,
       (C) by substituting ``May 4, 2007'' for ``August 28, 2005'' 
     in paragraph (2)(B)(ii)(I) thereof,
       (D) by substituting ``qualified Recovery Assistance 
     property'' for ``qualified Gulf Opportunity Zone property'' 
     in paragraph (2)(B)(iv) thereof, and
       (E) by substituting ``qualified Recovery Assistance 
     casualty loss'' for ``qualified Gulf Opportunity Zone 
     casualty loss'' each place it appears.
       (9) Treatment of representations regarding income 
     eligibility for purposes of qualified rental project 
     requirements.--Section 1400N(n) of such Code.
       (10) Special rules for use of retirement funds.--Section 
     1400Q of such Code--
       (A) by substituting ``qualified Recovery Assistance 
     distribution'' for ``qualified hurricane distribution'' each 
     place it appears,
       (B) by substituting ``on or after May 4, 2007, and before 
     January 1, 2009'' for ``on or after August 25, 2005, and 
     before January 1, 2007'' in subsection (a)(4)(A)(i),
       (C) by substituting ``qualified storm distribution'' for 
     ``qualified Katrina distribution'' each place it appears,
       (D) by substituting ``after November 4, 2006, and before 
     May 5, 2007'' for ``after February 28, 2005, and before 
     August 29, 2005'' in subsection (b)(2)(B)(ii),
       (E) by substituting ``beginning on May 4, 2007, and ending 
     on November 5, 2007'' for ``beginning on August 25, 2005, and 
     ending on February 28, 2006'' in subsection (b)(3)(A),
       (F) by substituting ``qualified storm individual'' for 
     ``qualified Hurricane Katrina individual'' each place it 
     appears,
       (G) by substituting ``December 31, 2007'' for ``December 
     31, 2006'' in subsection (c)(2)(A),
       (H) by substituting ``beginning on June 4, 2007, and ending 
     on December 31, 2007'' for ``beginning on September 24, 2005, 
     and ending on December 31, 2006'' in subsection (c)(4)(A)(i),
       (I) by substituting ``May 4, 2007'' for ``August 25, 2005'' 
     in subsection (c)(4)(A)(ii), and
       (J) by substituting ``January 1, 2008'' for ``January 1, 
     2007'' in subsection (d)(2)(A)(ii).
                                 ______
                                 
  SA 4423. Mr. NELSON of Florida (for himself and Mr. Coleman) 
submitted an amendment intended to be proposed by him to the bill H.R. 
3221, moving the United States toward greater energy independence and 
security, developing innovative new technologies, reducing carbon 
emissions, creating green jobs, protecting consumers, increasing clean 
renewable energy production, and modernizing our energy infrastructure, 
and to amend the Internal Revenue Code of 1986 to provide tax 
incentives for the production of renewable energy and energy 
conservation; which was ordered to lie on the table; as follows:

       At the end of title VI, insert the following:

     SEC. __. PENALTY-FREE WITHDRAWALS FROM RETIREMENT PLANS FOR 
                   FORECLOSURE RECOVERY RELIEF FOR INDIVIDUALS 
                   WITH MORTGAGES ON THEIR PRINCIPAL RESIDENCES.

       (a) In General.--Section 72(t) of the Internal Revenue Code 
     of 1986 shall not apply to any qualified foreclosure recovery 
     distribution.
       (b) Limitations.--
       (1) In general.--For purposes of this section, the 
     aggregate amount of distributions received by an individual 
     which may be treated as qualified foreclosure recovery 
     distributions for any taxable year shall not exceed the 
     lesser of--
       (A) the individual's qualified mortgage expenditures for 
     the taxable year, or
       (B) the excess (if any) of--
       (i) $25,000, over
       (ii) the aggregate amounts treated as qualified foreclosure 
     recovery distributions received by such individual for all 
     prior taxable years.
       (2) Treatment of plan distributions.--If a distribution to 
     an individual would (without regard to paragraph (1)) be a 
     qualified foreclosure recovery distribution, a plan shall not 
     be treated as violating any requirement of the Internal 
     Revenue Code of 1986 merely because the plan treats such 
     distribution as a qualified foreclosure recovery 
     distribution, unless the aggregate amount of such 
     distributions from all plans maintained by the employer (and 
     any member of any controlled group which includes the 
     employer) to such individual exceeds $25,000.
       (3) Controlled group.--For purposes of paragraph (2), the 
     term ``controlled group'' means any group treated as a single 
     employer under subsection (b), (c), (m), or (o) of section 
     414 of such Code.
       (c) Amount Distributed May Be Repaid.--
       (1) In general.--Any individual who receives a qualified 
     foreclosure recovery distribution may, at any time during the 
     3-year period beginning on the day after the date on which 
     such distribution was received, make one or more 
     contributions in an aggregate amount not to exceed the amount 
     of such distribution to an eligible retirement plan of which 
     such individual is a beneficiary and to which a rollover 
     contribution of such distribution could be made under section 
     402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16) of the 
     Internal Revenue Code of 1986, as the case may be.
       (2) Treatment of repayments of distributions from eligible 
     retirement plans other than iras.--For purposes of such Code, 
     if a contribution is made pursuant to paragraph (1) with 
     respect to a qualified foreclosure recovery distribution from 
     an eligible retirement plan other than an individual 
     retirement plan, then the taxpayer shall, to the extent of 
     the amount of the contribution, be treated as having received 
     the qualified foreclosure recovery distribution in an 
     eligible rollover distribution (as defined in section 
     402(c)(4) of such Code) and as having transferred the amount 
     to the eligible retirement plan in a direct trustee to 
     trustee transfer within 60 days of the distribution.
       (3) Treatment of repayments for distributions from iras.--
     For purposes of such Code, if a contribution is made pursuant 
     to

[[Page 5111]]

     paragraph (1) with respect to a qualified foreclosure 
     recovery distribution from an individual retirement plan (as 
     defined by section 7701(a)(37) of such Code), then, to the 
     extent of the amount of the contribution, the qualified 
     foreclosure recovery distribution shall be treated as a 
     distribution described in section 408(d)(3) of such Code and 
     as having been transferred to the eligible retirement plan in 
     a direct trustee to trustee transfer within 60 days of the 
     distribution.
       (4) Application to eligible retirement plans.--
       (A) In general.--Nothing in this section shall be treated 
     as requiring an eligible retirement plan to accept any 
     contributions described in this subsection.
       (B) Qualification.--An eligible retirement plan shall not 
     be treated as violating any requirement of Federal law solely 
     by reason of the acceptance of contributions described in 
     this subparagraph.
       (d) Definitions.--For purposes of this section--
       (1) Qualified foreclosure recovery distribution.--The term 
     ``qualified foreclosure recovery distribution'' means any 
     distribution to an individual from an eligible retirement 
     plan which is made--
       (A) on or after the date of the enactment of this Act and 
     before January 1, 2010, and
       (B) during a taxable year during which the individual has 
     qualifying mortgage expenditures.
       (2) Qualifying mortgage expenditures.--
       (A) In general.--The term ``qualifying mortgage 
     expenditures'' means any of the following expenditures:
       (i) Payment of principal or interest on an applicable 
     mortgage.
       (ii) Payment of costs paid or incurred in refinancing, or 
     modifying the terms of, an applicable mortgage.
       (B) Applicable mortgage.--The term ``applicable mortgage'' 
     means a mortgage which--
       (i) was entered into after December 31, 1999, and before 
     the date of the enactment of this Act, and
       (ii) constitutes a security interest in the principal 
     residence of the mortgagor.
       (C) Joint filers.--In the case of married individuals 
     filing a joint return under section 6013 of the Internal 
     Revenue Code of 1986, the qualifying mortgage expenditures of 
     the taxpayer may be allocated between the spouses in such 
     manner as they elect.
       (3) Eligible retirement plan.--The term ``eligible 
     retirement plan'' shall have the meaning given such term by 
     section 402(c)(8)(B) of such Code.
       (4) Principal residence.--The term ``principal residence'' 
     has the same meaning as when used in section 121 of such 
     Code.
       (e) Income Inclusion Spread Over 3-Year Period for 
     Qualified Foreclosure Recovery Distributions.--
       (1) In general.--In the case of any qualified foreclosure 
     recovery distribution, unless the taxpayer elects not to have 
     this subsection apply for any taxable year, any amount 
     required to be included in gross income for such taxable year 
     shall be so included ratably over the 3-taxable year period 
     beginning with such taxable year.
       (2) Special rule.--For purposes of paragraph (1), rules 
     similar to the rules of subparagraph (E) of section 
     408A(d)(3) of the Internal Revenue Code of 1986 shall apply.
       (f) Special Rules.--
       (1) Exemption of distributions from trustee to trustee 
     transfer and withholding rules.--For purposes of sections 
     401(a)(31), 402(f), and 3405 of the Internal Revenue Code of 
     1986, qualified foreclosure recovery distributions shall not 
     be treated as eligible rollover distributions.
       (2) Qualified foreclosure recovery distributions treated as 
     meeting plan distribution requirements.--For purposes of such 
     Code, a qualified foreclosure recovery distribution shall be 
     treated as meeting the requirements of sections 
     401(k)(2)(B)(i), 403(b)(7)(A)(ii), 403(b)(11), and 
     457(d)(1)(A) of such Code.
       (3) Substantially equal periodic payments.--A qualified 
     foreclosure recovery distribution--
       (A) shall be disregarded in determining whether a payment 
     is a part of a series of substantially equal periodic payment 
     under section 72(t)(2)(A)(iv) of such Code, and
       (B) shall not constitute a change in substantially equal 
     periodic payments under section 72(t)(4) of such Code.
       (g) Provisions Relating to Plan Amendments.--
       (1) In general.--If this subsection applies to any 
     amendment to any plan or annuity contract, such plan or 
     contract shall be treated as being operated in accordance 
     with the terms of the plan during the period described in 
     paragraph (2)(B)(i).
       (2) Amendments to which subsection applies.--
       (A) In general.--This subsection shall apply to any 
     amendment to any plan or annuity contract which is made--
       (i) pursuant to the provisions this section, or pursuant to 
     any regulation issued by the Secretary of the Treasury or the 
     Secretary of Labor under this section, and
       (ii) on or before the last day of the first plan year 
     beginning on or after January 1, 2010, or such later date as 
     the Secretary of the Treasury may prescribe.

     In the case of a governmental plan (as defined in section 
     414(d) of the Internal Revenue Code of 1986), clause (ii) 
     shall be applied by substituting the date which is 2 years 
     after the date otherwise applied under clause (ii).
       (B) Conditions.--This subsection shall not apply to any 
     amendment unless--
       (i) during the period--

       (I) beginning on the date the legislative or regulatory 
     amendment described in subparagraph (A)(i) takes effect (or 
     in the case of a plan or contract amendment not required by 
     such legislative or regulatory amendment, any later effective 
     date specified by the plan), and
       (II) ending on the date described in subparagraph (A)(ii) 
     (or, if earlier, the date the plan or contract amendment is 
     adopted),

     the plan or contract is operated as if such plan or contract 
     amendment were in effect; and
       (ii) such plan or contract amendment applies retroactively 
     for such period.
                                 ______
                                 
  SA 4424. Mrs. HUTCHISON (for herself and Mr. Nelson of Florida) 
submitted an amendment intended to be proposed to amendment SA 4387 
submitted by Mr. Dodd (for himself and Mr. Shelby) to the bill H.R. 
3221, moving the United States toward greater energy independence and 
security, developing innovative new technologies, reducing carbon 
emissions, creating green jobs, protecting consumers, increasing clean 
renewable energy production, and modernizing our energy infrastructure, 
and to amend the Internal Revenue Code of 1986 to provide tax 
incentives for the production of renewable energy and energy 
conservation; which was ordered to lie on the table; as follows:

       At the end of title IV, insert the following:

     SEC. 605. NEW RESTAURANT PROPERTY TREATED AS 15-YEAR 
                   PROPERTY.

       (a) In General.--Section 168(e)(3)(E) of the Internal 
     Revenue Code of 1986 (defining 15-year property) is amended 
     by striking ``and'' at the end of clause (vii), by striking 
     the period at the end of clause (viii) and inserting ``, 
     and'', and by adding at the end the following new clause:
       ``(ix) any qualified new restaurant property placed in 
     service before the date that is 12 months after the date of 
     the enactment of this clause.''.
       (b) Qualified New Restaurant Property.--Subsection (e) of 
     section 168 of such Code is amended by adding at the end the 
     following new paragraph:
       ``(8) Qualified new restaurant property.--The term 
     `qualified new restaurant property' means any section 1250 
     property which is a building if more than 50 percent of the 
     building's square footage is devoted to preparation of, and 
     seating for on-premises consumption of, prepared meals.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act.
                                 ______
                                 
  SA 4425. Mrs. HUTCHISON (for herself and Mr. Nelson of Florida) 
submitted an amendment intended to be proposed by her to the bill H.R. 
3221, moving the United States toward greater energy independence and 
security, developing innovative new technologies, reducing carbon 
emissions, creating green jobs, protecting consumers, increasing clean 
renewable energy production, and modernizing our energy infrastructure, 
and to amend the Internal Revenue Code of 1986 to provide tax 
incentives for the production of renewable energy and energy 
conservation; which was ordered to lie on the table; as follows:

       At the end of title VI, insert the following:

     SEC. 605. NEW RESTAURANT PROPERTY TREATED AS 20-YEAR 
                   PROPERTY.

       (a) In General.--Subparagraph (F) of section 168(e)(3) of 
     the Internal Revenue Code of 1986 (defining 20-year property) 
     is amended to read as follows:
       ``(F) 20-year property.--The term `20-year property' 
     means--
       ``(i) initial clearing and grading land improvements with 
     respect to any electric utility transmission and distribution 
     plant, and
       ``(ii) any qualified new restaurant property placed in 
     service before the date that is 12 months after the date of 
     the enactment of this clause.''.
       (b) Qualified New Restaurant Property.--Subsection (e) of 
     section 168 of such Code is amended by adding at the end the 
     following new paragraph:
       ``(8) Qualified new restaurant property.--The term 
     `qualified new restaurant property' means any section 1250 
     property which is a building if more than 50 percent of the 
     building's square footage is devoted to preparation of, and 
     seating for on-premises consumption of, prepared meals.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act.

[[Page 5112]]


                                 ______
                                 
  SA 4426. Mr. MARTINEZ (for himself and Mr. Carper) submitted an 
amendment intended to be proposed to amendment SA 4387 submitted by Mr. 
Dodd (for himself and Mr. Shelby) to the bill H.R. 3221, moving the 
United States toward greater energy independence and security, 
developing innovative new technologies, reducing carbon emissions, 
creating green jobs, protecting consumers, increasing clean renewable 
energy production, and modernizing our energy infrastructure, and to 
amend the Internal Revenue Code of 1986 to provide tax incentives for 
the production of renewable energy and energy conservation; which was 
ordered to lie on the table; as follows:

       At the end, add the following:

                               DIVISION 2

     SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

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

Sec. 1. Short title and table of contents.
Sec. 2. Definitions.

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

            Subtitle A--Improvement of Safety and Soundness

Sec. 101. Establishment of the Federal Housing Finance Agency.
Sec. 102. Duties and authorities of Director.
Sec. 103. Federal Housing Enterprise Board.
Sec. 104. Authority to require reports by regulated entities.
Sec. 105. Disclosure of income and charitable contributions by 
              enterprises.
Sec. 106. Assessments.
Sec. 107. Examiners and accountants.
Sec. 108. Prohibition and withholding of executive compensation.
Sec. 109. Reviews of regulated entities.
Sec. 110. Inclusion of minorities and women; diversity in Agency 
              workforce.
Sec. 111. Regulations and orders.
Sec. 112. Non-waiver of privileges.
Sec. 113. Risk-Based capital requirements.
Sec. 114. Minimum and critical capital levels.
Sec. 115. Review of and authority over enterprise assets and 
              liabilities.
Sec. 116. Corporate governance of enterprises.
Sec. 117. Required registration under Securities Exchange Act of 1934.
Sec. 118. Liaison with Financial Institutions Examination Council.
Sec. 119. Guarantee fee study.
Sec. 120. Conforming amendments.

             Subtitle B--Improvement of Mission Supervision

Sec. 131. Transfer of product approval and housing goal oversight.
Sec. 132. Review of enterprise products.
Sec. 133. Conforming loan limits.
Sec. 134. Annual housing report regarding regulated entities.
Sec. 135. Annual reports by regulated entities on affordable housing 
              stock.
Sec. 136. Mortgagor identification requirements for mortgages of 
              regulated entities.
Sec. 137. Revision of housing goals.
Sec. 138. Duty to serve underserved markets.
Sec. 139. Monitoring and enforcing compliance with housing goals.
Sec. 140. Affordable Housing Fund.
Sec. 141. Consistency with mission.
Sec. 142. Enforcement.
Sec. 143. Conforming amendments.

                  Subtitle C--Prompt Corrective Action

Sec. 151. Capital classifications.
Sec. 152. Supervisory actions applicable to undercapitalized regulated 
              entities.
Sec. 153. Supervisory actions applicable to significantly 
              undercapitalized regulated entities.
Sec. 154. Authority over critically undercapitalized regulated 
              entities.
Sec. 155. Conforming amendments.

                    Subtitle D--Enforcement Actions

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

                     Subtitle E--General Provisions

Sec. 181. Boards of enterprises.
Sec. 182. Report on portfolio operations, safety and soundness, and 
              mission of enterprises.
Sec. 183. Conforming and technical amendments.
Sec. 184. Study of alternative secondary market systems.
Sec. 185. Effective date.

                   TITLE II--FEDERAL HOME LOAN BANKS

Sec. 201. Definitions.
Sec. 202. Directors.
Sec. 203. Federal Housing Finance Agency oversight of Federal Home Loan 
              Banks.
Sec. 204. Joint activities of Banks.
Sec. 205. Sharing of information between Federal Home Loan Banks.
Sec. 206. Reorganization of Banks and voluntary merger.
Sec. 207. Securities and Exchange Commission disclosure.
Sec. 208. Community financial institution members.
Sec. 209. Technical and conforming amendments.
Sec. 210. Study of affordable housing program use for long-term care 
              facilities.
Sec. 211. Effective date.

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

       Subtitle A--Office of Federal Housing Enterprise Oversight

Sec. 301. Abolishment of OFHEO.
Sec. 302. Continuation and coordination of certain regulations.
Sec. 303. Transfer and rights of employees of OFHEO.
Sec. 304. Transfer of property and facilities.

               Subtitle B--Federal Housing Finance Board

Sec. 321. Abolishment of the Federal Housing Finance Board.
Sec. 322. Continuation and coordination of certain regulations.
Sec. 323. Transfer and rights of employees of the Federal Housing 
              Finance Board.
Sec. 324. Transfer of property and facilities.

        Subtitle C--Department of Housing and Urban Development

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

     SEC. 2. DEFINITIONS.

       Section 1303 of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4502) is amended--
       (1) in paragraph (7), by striking ``an enterprise'' and 
     inserting ``a regulated entity'';
       (2) by striking ``the enterprise'' each place such term 
     appears (except in paragraphs (4) and (18)) and inserting 
     ``the regulated entity'';
       (3) in paragraph (5), by striking ``Office of Federal 
     Housing Enterprise Oversight of the Department of Housing and 
     Urban Development'' and inserting ``Federal Housing Finance 
     Agency'';
       (4) in each of paragraphs (8), (9), (10), and (19), by 
     striking ``Secretary'' each place that term appears and 
     inserting ``Director'';
       (5) in paragraph (13), by inserting ``, with respect to an 
     enterprise,'' after ``means'';
       (6) by redesignating paragraphs (16) through (19) as 
     paragraphs (20) through (23), respectively;
       (7) by striking paragraphs (14) and (15) and inserting the 
     following new paragraphs:
       ``(18) Regulated entity.--The term `regulated entity' 
     means--
       ``(A) the Federal National Mortgage Association and any 
     affiliate thereof;
       ``(B) the Federal Home Loan Mortgage Corporation and any 
     affiliate thereof; and
       ``(C) each Federal home loan bank.
       ``(19) Regulated entity-affiliated party.--The term 
     `regulated entity-affiliated party' means--
       ``(A) any director, officer, employee, or agent for, a 
     regulated entity, or controlling shareholder of an 
     enterprise;
       ``(B) any shareholder, affiliate, consultant, or joint 
     venture partner of a regulated entity, and any other person, 
     as determined by the Director (by regulation or on a case-by-
     case basis) that participates in the conduct of the affairs 
     of a regulated entity, except that a shareholder of a 
     regulated entity shall not be considered to have participated 
     in the affairs of that regulated entity solely by reason of 
     being a member or customer of the regulated entity;
       ``(C) any independent contractor for a regulated entity 
     (including any attorney, appraiser, or accountant), if--
       ``(i) the independent contractor knowingly or recklessly 
     participates in--

       ``(I) any violation of any law or regulation;
       ``(II) any breach of fiduciary duty; or
       ``(III) any unsafe or unsound practice; and

       ``(ii) such violation, breach, or practice caused, or is 
     likely to cause, more than a minimal financial loss to, or a 
     significant adverse effect on, the regulated entity; and
       ``(D) any not-for-profit corporation that receives its 
     principal funding, on an ongoing basis, from any regulated 
     entity.''.
       (8) by redesignating paragraphs (8) through (13) as 
     paragraphs (12) through (17), respectively; and
       (9) by inserting after paragraph (7) the following new 
     paragraph:
       ``(11) Federal home loan bank.--The term `Federal home loan 
     bank' means a bank established under the authority of the 
     Federal Home Loan Bank Act.'';

[[Page 5113]]

       (10) by redesignating paragraphs (2) through (7) as 
     paragraphs (5) through (10), respectively; and
       (11) by inserting after paragraph (1) the following new 
     paragraphs:
       ``(2) Agency.--The term `Agency' means the Federal Housing 
     Finance Agency.
       ``(3) Authorizing statutes.--The term `authorizing 
     statutes' means--
       ``(A) the Federal National Mortgage Association Charter 
     Act;
       ``(B) the Federal Home Loan Mortgage Corporation Act; and
       ``(C) the Federal Home Loan Bank Act.
       ``(4) Board.--The term `Board' means the Federal Housing 
     Enterprise Board established under section 1313B.''.

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

            Subtitle A--Improvement of Safety and Soundness

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

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

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

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

     ``SEC. 1312. DIRECTOR.

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

     SEC. 102. DUTIES AND AUTHORITIES OF DIRECTOR.

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

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

       ``(a) Duties.--
       ``(1) Principal duties.--The principal duties of the 
     Director shall be--
       ``(A) to oversee the operations of each regulated entity 
     and any joint office of the Federal Home Loan Banks; and
       ``(B) to ensure that--
       ``(i) each regulated entity operates in a safe and sound 
     manner, including maintenance of adequate capital and 
     internal controls;
       ``(ii) the operations and activities of each regulated 
     entity foster liquid, efficient, competitive, and resilient 
     national housing finance markets that minimize the cost of 
     housing finance (including activities relating to mortgages 
     on housing for low- and moderate-income families involving a 
     reasonable economic return that may be less than the return 
     earned on other activities);
       ``(iii) each regulated entity complies with this title and 
     the rules, regulations, guidelines, and orders issued under 
     this title and the authorizing statutes; and
       ``(iv) each regulated entity carries out its statutory 
     mission only through activities that are consistent with this 
     title and the authorizing statutes.
       ``(2) Scope of authority.--The authority of the Director 
     shall include the authority--
       ``(A) to review and, if warranted based on the principal 
     duties described in paragraph (1), reject any acquisition or 
     transfer of a controlling interest in an enterprise; and
       ``(B) to exercise such incidental powers as may be 
     necessary or appropriate to fulfill the duties and 
     responsibilities of the Director in the supervision and 
     regulation of each regulated entity.
       ``(b) Delegation of Authority.--The Director may delegate 
     to officers or employees of the Agency, including each of the 
     Deputy Directors, any of the functions, powers, or duties of 
     the Director, as the Director considers appropriate.
       ``(c) Litigation Authority.--
       ``(1) In general.--In enforcing any provision of this 
     title, any regulation or order prescribed under this title, 
     or any other provision of law, rule, regulation, or order, or 
     in any other action, suit, or proceeding to which the 
     Director is a party or in which the Director is interested, 
     and in the administration of conservatorships and 
     receiverships, the Director may act in the Director's own 
     name and through the Director's own attorneys, or request 
     that the Attorney General of the United States act on behalf 
     of the Director.
       ``(2) Consultation with attorney general.--The Director 
     shall provide notice to,

[[Page 5114]]

     and consult with, the Attorney General of the United States 
     before taking an action under paragraph (1) of this 
     subsection or under section 1344(a), 1345(d), 1348(c), 
     1372(e), 1375(a), 1376(d), or 1379D(c), except that, if the 
     Director determines that any delay caused by such prior 
     notice and consultation may adversely affect the safety and 
     soundness responsibilities of the Director under this title, 
     the Director shall notify the Attorney General as soon as 
     reasonably possible after taking such action.
       ``(3) Subject to suit.--Except as otherwise provided by 
     law, the Director shall be subject to suit (other than suits 
     on claims for money damages) by a regulated entity or 
     director or officer thereof with respect to any matter under 
     this title or any other applicable provision of law, rule, 
     order, or regulation under this title, in the United States 
     district court for the judicial district in which the 
     regulated entity has its principal place of business, or in 
     the United States District Court for the District of 
     Columbia, and the Director may be served with process in the 
     manner prescribed by the Federal Rules of Civil Procedure.

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

       ``(a) Standards.--The Director shall establish standards, 
     by regulation, guideline, or order, for each regulated entity 
     relating to--
       ``(1) adequacy of internal controls and information 
     systems, including information security and privacy policies 
     and practices, taking into account the nature and scale of 
     business operations;
       ``(2) independence and adequacy of internal audit systems;
       ``(3) management of credit and counterparty risk, including 
     systems to identify concentrations of credit risk and 
     prudential limits to restrict exposure of the regulated 
     entity to a single counterparty or groups of related 
     counterparties;
       ``(4) management of interest rate risk exposure;
       ``(5) management of market risk, including standards that 
     provide for systems that accurately measure, monitor, and 
     control market risks and, as warranted, that establish 
     limitations on market risk;
       ``(6) adequacy and maintenance of liquidity and reserves;
       ``(7) management of any asset and investment portfolio;
       ``(8) investments and acquisitions by a regulated entity, 
     to ensure that they are consistent with the purposes of this 
     Act and the authorizing statutes;
       ``(9) maintenance of adequate records, in accordance with 
     consistent accounting policies and practices that enable the 
     Director to evaluate the financial condition of the regulated 
     entity;
       ``(10) issuance of subordinated debt by that particular 
     regulated entity, as the Director considers necessary;
       ``(11) overall risk management processes, including 
     adequacy of oversight by senior management and the board of 
     directors and of processes and policies to identify, measure, 
     monitor, and control material risks, including reputational 
     risks, and for adequate, well-tested business resumption 
     plans for all major systems with remote site facilities to 
     protect against disruptive events; and
       ``(12) such other operational and management standards as 
     the Director determines to be appropriate.
       ``(b) Failure To Meet Standards.--
       ``(1) Plan requirement.--
       ``(A) In general.--If the Director determines that a 
     regulated entity fails to meet any standard established under 
     subsection (a)--
       ``(i) if such standard is established by regulation, the 
     Director shall require the regulated entity to submit an 
     acceptable plan to the Director within the time allowed under 
     subparagraph (C); and
       ``(ii) if such standard is established by guideline, the 
     Director may require the regulated entity to submit a plan 
     described in clause (i).
       ``(B) Contents.--Any plan required under subparagraph (A) 
     shall specify the actions that the regulated entity will take 
     to correct the deficiency. If the regulated entity is 
     undercapitalized, the plan may be a part of the capital 
     restoration plan for the regulated entity under section 
     1369C.
       ``(C) Deadlines for submission and review.--The Director 
     shall by regulation establish deadlines that--
       ``(i) provide the regulated entities with reasonable time 
     to submit plans required under subparagraph (A), and 
     generally require a regulated entity to submit a plan not 
     later than 30 days after the Director determines that the 
     entity fails to meet any standard established under 
     subsection (a); and
       ``(ii) require the Director to act on plans expeditiously, 
     and generally not later than 30 days after the plan is 
     submitted.
       ``(2) Required order upon failure to submit or implement 
     plan.--If a regulated entity fails to submit an acceptable 
     plan within the time allowed under paragraph (1)(C), or fails 
     in any material respect to implement a plan accepted by the 
     Director, the following shall apply:
       ``(A) Required correction of deficiency.--The Director 
     shall, by order, require the regulated entity to correct the 
     deficiency.
       ``(B) Other authority.--The Director may, by order, take 
     one or more of the following actions until the deficiency is 
     corrected:
       ``(i) Prohibit the regulated entity from permitting its 
     average total assets (as such term is defined in section 
     1316(b)) during any calendar quarter to exceed its average 
     total assets during the preceding calendar quarter, or 
     restrict the rate at which the average total assets of the 
     entity may increase from one calendar quarter to another.
       ``(ii) Require the regulated entity--

       ``(I) in the case of an enterprise, to increase its ratio 
     of core capital to assets.
       ``(II) in the case of a Federal home loan bank, to increase 
     its ratio of total capital (as such term is defined in 
     section 6(a)(5) of the Federal Home Loan Bank Act (12 U.S.C. 
     1426(a)(5)) to assets.

       ``(iii) Require the regulated entity to take any other 
     action that the Director determines will better carry out the 
     purposes of this section than any of the actions described in 
     this subparagraph.
       ``(3) Mandatory restrictions.--In complying with paragraph 
     (2), the Director shall take one or more of the actions 
     described in clauses (i) through (iii) of paragraph (2)(B) 
     if--
       ``(A) the Director determines that the regulated entity 
     fails to meet any standard prescribed under subsection (a);
       ``(B) the regulated entity has not corrected the 
     deficiency; and
       ``(C) during the 18-month period before the date on which 
     the regulated entity first failed to meet the standard, the 
     entity underwent extraordinary growth, as defined by the 
     Director.
       ``(c) Other Enforcement Authority Not Affected.--The 
     authority of the Director under this section is in addition 
     to any other authority of the Director.''.
       (b) Independence in Congressional Testimony and 
     Recommendations.--Section 111 of Public Law 93-495 (12 U.S.C. 
     250) is amended by striking ``the Federal Housing Finance 
     Board'' and inserting ``the Director of the Federal Housing 
     Finance Agency''.

     SEC. 103. FEDERAL HOUSING ENTERPRISE BOARD.

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

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

       ``(a) In General.--There is established the Federal Housing 
     Enterprise Board, which shall advise the Director with 
     respect to overall strategies and policies in carrying out 
     the duties of the Director under this title.
       ``(b) Limitations.--The Board may not exercise any 
     executive authority, and the Director may not delegate to the 
     Board any of the functions, powers, or duties of the 
     Director.
       ``(c) Composition.--The Board shall be comprised of 3 
     members, of whom--
       ``(1) one member shall be the Secretary of the Treasury;
       ``(2) one member shall be the Secretary of Housing and 
     Urban Development; and
       ``(3) one member shall be the Director, who shall serve as 
     the Chairperson of the Board.
       ``(d) Meetings.--
       ``(1) In general.--The Board shall meet upon notice by the 
     Director, but in no event shall the Board meet less 
     frequently than once every 3 months.
       ``(2) Special meetings.--Either the Secretary of the 
     Treasury or the Secretary of Housing and Urban Development 
     may, upon giving written notice to the Director, require a 
     special meeting of the Board.
       ``(e) Testimony.--On an annual basis, the Board shall 
     testify before Congress regarding--
       ``(1) the safety and soundness of the regulated entities;
       ``(2) any material deficiencies in the conduct of the 
     operations of the regulated entities;
       ``(3) the overall operational status of the regulated 
     entities;
       ``(4) an evaluation of the performance of the regulated 
     entities in carrying out their respective missions;
       ``(5) operations, resources, and performance of the Agency; 
     and
       ``(6) such other matters relating to the Agency and its 
     fulfillment of its mission, as the Board determines 
     appropriate.''.
       (b) Annual Report of the Director.--Section 1319B(a) of the 
     Housing and Community Development Act of 1992 (12 U.S.C. 4521 
     (a)) is amended--
       (1) in paragraph (3), by striking ``and'' at the end; and
       (2) by striking paragraph (4) and inserting the following 
     new paragraphs:
       ``(4) an assessment of the Board or any of its members with 
     respect to--
       ``(A) the safety and soundness of the regulated entities;
       ``(B) any material deficiencies in the conduct of the 
     operations of the regulated entities;
       ``(C) the overall operational status of the regulated 
     entities; and
       ``(D) an evaluation of the performance of the regulated 
     entities in carrying out their missions;

[[Page 5115]]

       ``(5) operations, resources, and performance of the Agency;
       ``(6) a description of the demographic makeup of the 
     workforce of the Agency and the actions taken pursuant to 
     section 1319A(b) to provide for diversity in the workforce; 
     and
       ``(7) such other matters relating to the Agency and its 
     fulfillment of its mission.''.

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

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

     SEC. 105. DISCLOSURE OF INCOME AND CHARITABLE CONTRIBUTIONS 
                   BY ENTERPRISES.

       Section 1314 of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4514), as amended by the preceding 
     provisions of this Division, is further amended by adding at 
     the end the following new subsections:
       ``(d) Disclosure of Charitable Contributions by 
     Enterprises.--
       ``(1) Required disclosure.--The Director shall, by 
     regulation, require each enterprise to submit a report 
     annually, in a format designated by the Director, containing 
     the following information:
       ``(A) Total value.--The total value of contributions made 
     by the enterprise to nonprofit organizations during its 
     previous fiscal year.
       ``(B) Substantial contributions.--If the value of 
     contributions made by the enterprise to any nonprofit 
     organization during its previous fiscal year exceeds the 
     designated amount, the name of that organization and the 
     value of contributions.
       ``(C) Substantial contributions to insider-affiliated 
     charities.--Identification of each contribution whose value 
     exceeds the designated amount that were made by the 
     enterprise during the enterprise's previous fiscal year to 
     any nonprofit organization of which a director, officer, or 
     controlling person of the enterprise, or a spouse thereof, 
     was a director or trustee, the name of such nonprofit 
     organization, and the value of the contribution.
       ``(2) Definitions.--For purposes of this subsection--
       ``(A) the term `designated amount' means such amount as may 
     be designated by the Director by regulation, consistent with 
     the public interest and the protection of investors for 
     purposes of this subsection; and
       ``(B) the Director may, by such regulations as the Director 
     deems necessary or appropriate in the public interest, define 
     the terms officer and controlling person.
       ``(3) Public availability.--The Director shall make the 
     information submitted pursuant to this subsection publicly 
     available.
       ``(e) Disclosure of Income.--Each enterprise shall include, 
     in each annual report filed under section 13 of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78m), the income 
     reported by the issuer to the Internal Revenue Service for 
     the most recent taxable year. Such income shall--
       ``(1) be presented in a prominent location in each such 
     report and in a manner that permits a ready comparison of 
     such income to income otherwise required to be included in 
     such reports under regulations issued under such section; and
       ``(2) be submitted to the Securities and Exchange 
     Commission in a form and manner suitable for entry into the 
     EDGAR system of such Commission for public availability under 
     such system.''.

     SEC. 106. ASSESSMENTS.

       Section 1316 of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4516) is amended--
       (1) by striking subsection (a) and inserting the following 
     new subsection:
       ``(a) Annual Assessments.--The Director shall establish and 
     collect from the regulated entities annual assessments in an 
     amount not exceeding the amount sufficient to provide for 
     reasonable costs and expenses of the Agency, including--
       ``(1) the expenses of any examinations under section 1317 
     of this Act and under section 20 of the Federal Home Loan 
     Bank Act;
       ``(2) the expenses of obtaining any reviews and credit 
     assessments under section 1319;
       ``(3) such amounts in excess of actual expenses for any 
     given year as deemed necessary by the Director to maintain a 
     working capital fund in accordance with subsection (e); and
       ``(4) the wind up of the affairs of the Office of Federal 
     Housing Enterprise Oversight and the Federal Housing Finance 
     Board under title III of the Federal Housing Finance Reform 
     Act of 2007.'';
       (2) in subsection (b)--
       (A) in the subsection heading, by striking ``Enterprises'' 
     and inserting ``Regulated Entities'' ;
       (B) by realigning paragraph (2) two ems from the left 
     margin, so as to align the left margin of such paragraph with 
     the left margins of paragraph (1);
       (C) in paragraph (1)--
       (i) by striking ``Each enterprise'' and inserting ``Each 
     regulated entity'';
       (ii) by striking ``each enterprise'' and inserting ``each 
     regulated entity''; and
       (iii) by striking ``both enterprises'' and inserting ``all 
     of the regulated entities''; and
       (D) in paragraph (3)--
       (i) in subparagraph (B), by striking ``subparagraph (A)'' 
     and inserting ``clause (i)'';
       (ii) by redesignating subparagraphs (A), (B), and (C) as 
     clauses (i), (ii) and (ii), respectively, and realigning such 
     clauses, as so redesignated, so as to be indented 6 ems from 
     the left margin;
       (iii) by striking the matter that precedes clause (i), as 
     so redesignated, and inserting the following:
       ``(3) Definition of total assets.--For purposes of this 
     section, the term `total assets' means as follows:
       ``(A) Enterprises.--With respect to an enterprise, the sum 
     of--''; and
       (iv) by adding at the end the following new subparagraph:
       ``(B) Federal home loan banks.--With respect to a Federal 
     home loan bank, the total assets of the Bank, as determined 
     by the Director in accordance with generally accepted 
     accounting principles.'';
       (3) by striking subsection (c) and inserting the following 
     new subsection:
       ``(c) Increased Costs of Regulation.--
       ``(1) Increase for inadequate capitalization.--The 
     semiannual payments made pursuant to subsection (b) by any 
     regulated entity that is not classified (for purposes of 
     subtitle B) as adequately capitalized may be increased, as 
     necessary, in the discretion of the Director to pay 
     additional estimated costs of regulation of the regulated 
     entity.
       ``(2) Adjustment for enforcement activities.--The Director 
     may adjust the amounts of any semiannual payments for an 
     assessment under subsection (a) that are to be paid pursuant 
     to subsection (b) by a regulated entity, as necessary in the 
     discretion of the Director, to ensure that the costs of 
     enforcement activities under this Act for a regulated entity 
     are borne only by such regulated entity.
       ``(3) Additional assessment for deficiencies.--If at any 
     time, as a result of increased costs of regulation of a 
     regulated entity that is not classified (for purposes of 
     subtitle B) as adequately capitalized or as the result of 
     supervisory or enforcement activities under this Act for a 
     regulated entity, the amount available from any semiannual 
     payment made by such regulated entity pursuant to subsection 
     (b) is insufficient to cover the costs of the Agency with 
     respect to such entity, the Director may make and collect 
     from such regulated entity an immediate assessment to cover 
     the amount of such deficiency for the semiannual period. If,

[[Page 5116]]

     at the end of any semiannual period during which such an 
     assessment is made, any amount remains from such assessment, 
     such remaining amount shall be deducted from the assessment 
     for such regulated entity for the following semiannual 
     period.'';
       (4) in subsection (d), by striking ``If'' and inserting 
     ``Except with respect to amounts collected pursuant to 
     subsection (a)(3), if''; and
       (5) by striking subsections (e) through (g) and inserting 
     the following new subsections:
       ``(e) Working Capital Fund.--At the end of each year for 
     which an assessment under this section is made, the Director 
     shall remit to each regulated entity any amount of assessment 
     collected from such regulated entity that is attributable to 
     subsection (a)(3) and is in excess of the amount the Director 
     deems necessary to maintain a working capital fund.
       ``(f) Treatment of Assessments.--
       ``(1) Deposit.--Amounts received by the Director from 
     assessments under this section may be deposited by the 
     Director in the manner provided in section 5234 of the 
     Revised Statutes (12 U.S.C. 192) for monies deposited by the 
     Comptroller of the Currency.
       ``(2) Not government funds.--The amounts received by the 
     Director from any assessment under this section shall not be 
     construed to be Government or public funds or appropriated 
     money.
       ``(3) No apportionment of funds.--Notwithstanding any other 
     provision of law, the amounts received by the Director from 
     any assessment under this section shall not be subject to 
     apportionment for the purpose of chapter 15 of title 31, 
     United States Code, or under any other authority.
       ``(4) Use of funds.--The Director may use any amounts 
     received by the Director from assessments under this section 
     for compensation of the Director and other employees of the 
     Agency and for all other expenses of the Director and the 
     Agency.
       ``(5) Availability of oversight fund amounts.--
     Notwithstanding any other provision of law, any amounts 
     remaining in the Federal Housing Enterprises Oversight Fund 
     established under this section (as in effect before the 
     effective date under section 185 of the Federal Housing 
     Finance Reform Act of 2007), and any amounts remaining from 
     assessments on the Federal Home Loan banks pursuant to 
     section 18(b) of the Federal Home Loan Bank Act (12 U.S.C. 
     1438(b)), shall, upon such effective date, be treated for 
     purposes of this subsection as amounts received from 
     assessments under this section.
       ``(6) Treasury investments.--
       ``(A) Authority.--The Director may request the Secretary of 
     the Treasury to invest such portions of amount received by 
     the Director from assessments paid under this section that, 
     in the Director's discretion, are not required to meet the 
     current working needs of the Agency.
       ``(B) Government obligations.--Pursuant to a request under 
     subparagraph (A), the Secretary of the Treasury shall invest 
     such amounts in government obligations guaranteed as to 
     principal and interest by the United States with maturities 
     suitable to the needs of Agency and bearing interest at a 
     rate determined by the Secretary of the Treasury taking into 
     consideration current market yields on outstanding marketable 
     obligations of the United States of comparable maturity.
       ``(g) Budget and Financial Management.--
       ``(1) Financial operating plans and forecasts.--The 
     Director shall provide to the Director of the Office of 
     Management and Budget copies of the Director's financial 
     operating plans and forecasts as prepared by the Director in 
     the ordinary course of the Agency's operations, and copies of 
     the quarterly reports of the Agency's financial condition and 
     results of operations as prepared by the Director in the 
     ordinary course of the Agency's operations.
       ``(2) Financial statements.--The Agency shall prepare 
     annually a statement of assets and liabilities and surplus or 
     deficit; a statement of income and expenses; and a statement 
     of sources and application of funds.
       ``(3) Financial management systems.--The Agency shall 
     implement and maintain financial management systems that 
     comply substantially with Federal financial management 
     systems requirements, applicable Federal accounting 
     standards, and that uses a general ledger system that 
     accounts for activity at the transaction level.
       ``(4) Assertion of internal controls.--The Director shall 
     provide to the Comptroller General an assertion as to the 
     effectiveness of the internal controls that apply to 
     financial reporting by the Agency, using the standards 
     established in section 3512(c) of title 31, United States 
     Code.
       ``(5) Rule of construction.--This subsection may not be 
     construed as implying any obligation on the part of the 
     Director to consult with or obtain the consent or approval of 
     the Director of the Office of Management and Budget with 
     respect to any reports, plans, forecasts, or other 
     information referred to in paragraph (1) or any jurisdiction 
     or oversight over the affairs or operations of the Agency.
       ``(h) Audit of Agency.--
       ``(1) In general.--The Comptroller General shall annually 
     audit the financial transactions of the Agency in accordance 
     with the U.S. generally accepted government auditing 
     standards as may be prescribed by the Comptroller General of 
     the United States. The audit shall be conducted at the place 
     or places where accounts of the Agency are normally kept. The 
     representatives of the Government Accountability Office shall 
     have access to the personnel and to all books, accounts, 
     documents, papers, records (including electronic records), 
     reports, files, and all other papers, automated data, things, 
     or property belonging to or under the control of or used or 
     employed by the Agency pertaining to its financial 
     transactions and necessary to facilitate the audit, and such 
     representatives shall be afforded full facilities for 
     verifying transactions with the balances or securities held 
     by depositories, fiscal agents, and custodians. All such 
     books, accounts, documents, records, reports, files, papers, 
     and property of the Agency shall remain in possession and 
     custody of the Agency. The Comptroller General may obtain and 
     duplicate any such books, accounts, documents, records, 
     working papers, automated data and files, or other 
     information relevant to such audit without cost to the 
     Comptroller General and the Comptroller General's right of 
     access to such information shall be enforceable pursuant to 
     section 716(c) of title 31, United States Code.
       ``(2) Report.--The Comptroller General shall submit to the 
     Congress a report of each annual audit conducted under this 
     subsection. The report to the Congress shall set forth the 
     scope of the audit and shall include the statement of assets 
     and liabilities and surplus or deficit, the statement of 
     income and expenses, the statement of sources and application 
     of funds, and such comments and information as may be deemed 
     necessary to inform Congress of the financial operations and 
     condition of the Agency, together with such recommendations 
     with respect thereto as the Comptroller General may deem 
     advisable. A copy of each report shall be furnished to the 
     President and to the Agency at the time submitted to the 
     Congress.
       ``(3) Assistance and costs.--For the purpose of conducting 
     an audit under this subsection, the Comptroller General may, 
     in the discretion of the Comptroller General, employ by 
     contract, without regard to section 5 of title 41, United 
     States Code, professional services of firms and organizations 
     of certified public accountants for temporary periods or for 
     special purposes. Upon the request of the Comptroller 
     General, the Director of the Agency shall transfer to the 
     Government Accountability Office from funds available, the 
     amount requested by the Comptroller General to cover the full 
     costs of any audit and report conducted by the Comptroller 
     General. The Comptroller General shall credit funds 
     transferred to the account established for salaries and 
     expenses of the Government Accountability Office, and such 
     amount shall be available upon receipt and without fiscal 
     year limitation to cover the full costs of the audit and 
     report.''.

     SEC. 107. EXAMINERS AND ACCOUNTANTS.

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

[[Page 5117]]

     authority of this subsection shall not be considered to cause 
     such position to be converted from the competitive service to 
     the excepted service.''.
       (c) Repeal.--Section 20 of the Federal Home Loan Bank Act 
     (12 U.S.C. 1440) is amended--
       (1) by striking the section heading and inserting the 
     following: ``examinations and gao audits'';
       (2) in the third sentence, by striking ``the Board and'' 
     each place such term appears; and
       (3) by striking the first two sentences and inserting the 
     following: ``The Federal home loan banks shall be subject to 
     examinations by the Director to the extent provided in 
     section 1317 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4517).''.

     SEC. 108. PROHIBITION AND WITHHOLDING OF EXECUTIVE 
                   COMPENSATION.

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

     SEC. 109. REVIEWS OF REGULATED ENTITIES.

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

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

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

     SEC. 110. INCLUSION OF MINORITIES AND WOMEN; DIVERSITY IN 
                   AGENCY WORKFORCE.

       Section 1319A of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4520) is amended--
       (1) in the section heading, by striking ``EQUAL OPPORTUNITY 
     IN SOLICITATION OF CONTRACTS'' and inserting ``MINORITY AND 
     WOMEN INCLUSION; DIVERSITY REQUIREMENTS'';
       (2) in subsection (a), by striking ``(a) In General.--Each 
     enterprise'' and inserting ``(e) Outreach.--Each regulated 
     entity''; and
       (3) by striking subsection (b);
       (4) by inserting before subsection (e), as so redesignated 
     by paragraph (2) of this section, the following new 
     subsections:
       ``(a) Office of Minority and Women Inclusion.--Each 
     regulated entity shall establish an Office of Minority and 
     Women Inclusion, or designate an office of the entity, that 
     shall be responsible for carrying out this section and all 
     matters of the entity relating to diversity in management, 
     employment, and business activities in accordance with such 
     standards and requirements as the Director shall establish.
       ``(b) Inclusion in All Levels of Business Activities.--Each 
     regulated entity shall develop and implement standards and 
     procedures to ensure, to the maximum extent possible, the 
     inclusion and utilization of minorities (as such term is 
     defined in section 1204(c) of the Financial Institutions 
     Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1811 
     note)) and women, and minority- and women-owned businesses 
     (as such terms are defined in section 21A(r)(4) of the 
     Federal Home Loan Bank Act (12 U.S.C. 1441a(r)(4)) (including 
     financial institutions, investment banking firms, mortgage 
     banking firms, asset management firms, broker-dealers, 
     financial services firms, underwriters, accountants, brokers, 
     investment consultants, and providers of legal services) in 
     all business and activities of the regulated entity at all 
     levels, including in procurement, insurance, and all types of 
     contracts (including contracts for the issuance or guarantee 
     of any debt, equity, or mortgage-related securities, the 
     management of its mortgage and securities portfolios, the 
     making of its equity investments, the purchase, sale and 
     servicing of single- and multi-family mortgage loans, and the 
     implementation of its affordable housing program and 
     initiatives). The processes established by each regulated 
     entity for review and evaluation for contract proposals and 
     to hire service providers shall include a component that 
     gives consideration to the diversity of the applicant.
       ``(c) Applicability.--This section shall apply to all 
     contracts of a regulated entity for services of any kind, 
     including services that require the services of investment 
     banking, asset management entities, broker-dealers, financial 
     services entities, underwriters, accountants, investment 
     consultants, and providers of legal services.
       ``(d) Inclusion in Annual Reports.--Each regulated entity 
     shall include, in the annual report submitted by the entity 
     to the Director pursuant to section 309(k) of the Federal 
     National Mortgage Association Charter Act (12 U.S.C. 
     1723a(k)), section 307(c) of the Federal Home Loan Mortgage 
     Corporation Act (12 U.S.C. 1456(c)), and section 20 of the 
     Federal Home Loan Bank Act (12 U.S.C. 1440), as applicable, 
     detailed information describing the actions taken by the 
     entity pursuant to this section, which shall include a 
     statement of the total amounts paid by the entity to third 
     party contractors since the last such report and the 
     percentage of such amounts paid to businesses described in 
     subsection (b) of this section.''; and
       (5) by adding at the end the following new subsection:
       ``(f) Diversity in Agency Workforce.--The Agency shall take 
     affirmative steps to seek diversity in its workforce at all 
     levels of the agency consistent with the demographic 
     diversity of the United States, which shall include--
       ``(1) heavily recruiting at historically Black colleges and 
     universities, Hispanic-serving institutions, women's 
     colleges, and colleges that typically serve majority minority 
     populations;
       ``(2) sponsoring and recruiting at job fairs in urban 
     communities, and placing employment advertisements in 
     newspapers and magazines oriented toward women and people of 
     color;
       ``(3) partnering with organizations that are focused on 
     developing opportunities for minorities and women to place 
     talented young minorities and women in industry internships, 
     summer employment, and full-time positions; and
       ``(4) where feasible, partnering with inner-city high 
     schools, girls' high schools, and high schools with majority 
     minority populations to establish or enhance financial 
     literacy programs and provide mentoring.''.

     SEC. 111. REGULATIONS AND ORDERS.

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

     SEC. 112. NON-WAIVER OF PRIVILEGES.

       Part 1 of subtitle A of title XIII of the Housing and 
     Community Development Act of 1992 (12 U.S.C. 4511) is amended 
     by adding at the end the following new section:

[[Page 5118]]



     ``SEC. 1319H. PRIVILEGES NOT AFFECTED BY DISCLOSURE.

       ``(a) In General.--The submission by any person of any 
     information to the Agency for any purpose in the course of 
     any supervisory or regulatory process of the Agency shall not 
     be construed as waiving, destroying, or otherwise affecting 
     any privilege such person may claim with respect to such 
     information under Federal or State law as to any person or 
     entity other than the Agency.
       ``(b) Rule of Construction.--No provision of subsection (a) 
     may be construed as implying or establishing that--
       ``(1) any person waives any privilege applicable to 
     information that is submitted or transferred under any 
     circumstance to which subsection (a) does not apply; or
       ``(2) any person would waive any privilege applicable to 
     any information by submitting the information to the Agency, 
     but for this subsection.''.

     SEC. 113. RISK-BASED CAPITAL REQUIREMENTS.

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

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

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

     SEC. 114. MINIMUM AND CRITICAL CAPITAL LEVELS.

       (a) Minimum Capital Level.--Section 1362 of the Housing and 
     Community Development Act of 1992 (12 U.S.C. 4612) is 
     amended--
       (1) in subsection (a), by striking ``In General'' and 
     inserting ``Enterprises''; and
       (2) by striking subsection (b) and inserting the following 
     new subsections:
       ``(b) Federal Home Loan Banks.--For purposes of this 
     subtitle, the minimum capital level for each Federal home 
     loan bank shall be the minimum capital required to be 
     maintained to comply with the leverage requirement for the 
     bank established under section 6(a)(2) of the Federal Home 
     Loan Bank Act (12 U.S.C. 1426(a)(2)).
       ``(c) Establishment of Revised Minimum Capital Levels.--
     Notwithstanding subsections (a) and (b) and notwithstanding 
     the capital classifications of the regulated entities, the 
     Director may, by regulations issued under section 1319G, 
     establish a minimum capital level for the enterprises, for 
     the Federal home loan banks, or for both the enterprises and 
     the banks, that is higher than the level specified in 
     subsection (a) for the enterprises or the level specified in 
     subsection (b) for the Federal home loan banks, to the extent 
     needed to ensure that the regulated entities operate in a 
     safe and sound manner.
       ``(d) Authority To Require Temporary Increase.--
     Notwithstanding subsections (a) and (b) and any minimum 
     capital level established pursuant to subsection (c), the 
     Director may, by order, increase the minimum capital level 
     for a regulated entity on a temporary basis for such period 
     as the Director may provide if the Director--
       ``(1) makes any determination specified in subparagraphs 
     (A) through (C) of section 1364(c)(1);
       ``(2) determines that the regulated entity has violated any 
     of the prudential standards established pursuant to section 
     1313A and, as a result of such violation, determines that an 
     unsafe and unsound condition exists; or
       ``(3) determines that an unsafe and unsound condition 
     exists, except that a temporary increase in minimum capital 
     imposed on a regulated entity pursuant to this paragraph 
     shall not remain in place for a period of more than 6 months 
     unless the Director makes a renewed determination of the 
     existence of an unsafe and unsound condition.
       ``(e) Authority To Establish Additional Capital and Reserve 
     Requirements for Particular Programs.--The Director may, at 
     any time by order or regulation, establish such capital or 
     reserve requirements with respect to any program or activity 
     of a regulated entity as the Director considers appropriate 
     to ensure that the regulated entity operates in a safe and 
     sound manner, with sufficient capital and reserves to support 
     the risks that arise in the operations and management of the 
     regulated entity.
       ``(f) Periodic Review.--The Director shall periodically 
     review the amount of core capital maintained by the 
     enterprises, the amount of capital retained by the Federal 
     home loan banks, and the minimum capital levels established 
     for such regulated entities pursuant to this section. The 
     Director shall rescind any temporary minimum capital level 
     increase if the Director determines that the circumstances or 
     facts justifying the temporary increase are no longer 
     present.''.
       (b) Critical Capital Levels.--
       (1) In general.--Section 1363 of the Housing and Community 
     Development Act of 1992 (12 U.S.C. 4613) is amended--
       (A) by striking ``For'' and inserting ``(a) Enterprises.--
     For''; and
       (B) by adding at the end the following new subsection:
       ``(b) Federal Home Loan Banks.--
       ``(1) In general.--For purposes of this subtitle, the 
     critical capital level for each Federal home loan bank shall 
     be such amount of capital as the Director shall, by 
     regulation require.
       ``(2) Consideration of other critical capital levels.--In 
     establishing the critical capital level under paragraph (1) 
     for the Federal home loan banks, the Director shall take due 
     consideration of the critical capital level established under 
     subsection (a) for the enterprises, with such modifications 
     as the Director determines to be appropriate to reflect the 
     difference in operations between the banks and the 
     enterprises.''.
       (2) Regulations.--Not later than the expiration of the 180-
     day period beginning on the effective date under section 185, 
     the Director of the Federal Housing Finance Agency shall 
     issue regulations pursuant to section 1363(b) of the Housing 
     and Community Development Act of 1992 (as added by paragraph 
     (1) of this subsection) establishing the critical capital 
     level under such section.

     SEC. 115. REVIEW OF AND AUTHORITY OVER ENTERPRISE ASSETS AND 
                   LIABILITIES.

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

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

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

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

       ``(a) In General.--The Director shall, by regulation, 
     establish standards by which the portfolio holdings, or rate 
     of growth of the portfolio holdings, of the enterprises will 
     be deemed to be consistent with the mission and the safe and 
     sound operations of the enterprises. In developing such 
     standards, the Director shall consider--
       ``(1) the size or growth of the mortgage market;
       ``(2) the need for the portfolio in maintaining liquidity 
     or stability of the secondary mortgage market (including the 
     market for the mortgage-backed securities the enterprises 
     issue);
       ``(3) the need for an inventory of mortgages in connection 
     with securitizations;
       ``(4) the need for the portfolio to directly support the 
     affordable housing mission of the enterprises;
       ``(5) the liquidity needs of the enterprises;
       ``(6) any potential risks posed to the enterprises by the 
     nature of the portfolio holdings; and
       ``(7) any additional factors that the Director determines 
     to be necessary to carry out the purpose under the first 
     sentence of this subsection to establish standards for 
     assessing whether the portfolio holdings are consistent with 
     the mission and safe and sound operations of the enterprises.
       ``(b) Temporary Adjustments.--The Director may, by order, 
     make temporary adjustments to the established standards for 
     an enterprise or both enterprises, such as during times of 
     economic distress or market disruption.
       ``(c) Authority To Require Disposition or Acquisition.--The 
     Director shall monitor the portfolio of each enterprise. 
     Pursuant to subsection (a) and notwithstanding the capital 
     classifications of the enterprises, the Director may, by 
     order, require an enterprise, under such terms and conditions 
     as the Director determines to be appropriate, to dispose of 
     or acquire any asset, if the Director

[[Page 5119]]

     determines that such action is consistent with the purposes 
     of this Act or any of the authorizing statutes.''.
       (b) Regulations.--Not later than the expiration of the 180-
     day period beginning on the effective date under section 185, 
     the Director of the Federal Housing Finance Agency shall 
     issue regulations pursuant to section 1369E(a) of the Housing 
     and Community Development Act of 1992 (as added by subsection 
     (a) of this section) establishing the portfolio holdings 
     standards under such section.

     SEC. 116. CORPORATE GOVERNANCE OF ENTERPRISES.

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

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

       ``(a) Board of Directors.--
       ``(1) Independence.--A majority of seated members of the 
     board of directors of each enterprise shall be independent 
     board members, as defined under rules set forth by the New 
     York Stock Exchange, as such rules may be amended from time 
     to time.
       ``(2) Frequency of meetings.--To carry out its obligations 
     and duties under applicable laws, rules, regulations, and 
     guidelines, the board of directors of an enterprise shall 
     meet at least eight times a year and not less than once a 
     calendar quarter.
       ``(3) Non-management board member meetings.--The non-
     management directors of an enterprise shall meet at regularly 
     scheduled executive sessions without management 
     participation.
       ``(4) Quorum; prohibition on proxies.--For the transaction 
     of business, a quorum of the board of directors of an 
     enterprise shall be at least a majority of the seated board 
     of directors and a board member may not vote by proxy.
       ``(5) Information.--The management of an enterprise shall 
     provide a board member of the enterprise with such adequate 
     and appropriate information that a reasonable board member 
     would find important to the fulfillment of his or her 
     fiduciary duties and obligations.
       ``(6) Annual review.--At least annually, the board of 
     directors of each enterprise shall review, with appropriate 
     professional assistance, the requirements of laws, rules, 
     regulations, and guidelines that are applicable to its 
     activities and duties.
       ``(b) Committees of Boards of Directors.--
       ``(1) Frequency of meetings.--Any committee of the board of 
     directors of an enterprise shall meet with sufficient 
     frequency to carry out its obligations and duties under 
     applicable laws, rules, regulations, and guidelines.
       ``(2) Required committees.--Each enterprise shall provide 
     for the establishment, however styled, of the following 
     committees of the board of directors:
       ``(A) Audit committee.
       ``(B) Compensation committee.
       ``(C) Nominating/corporate governance committee.

     Such committees shall be in compliance with the charter, 
     independence, composition, expertise, duties, 
     responsibilities, and other requirements set forth under 
     section 10A(m) of the Securities Exchange Act of 1934 (15 
     U.S.C. 78j-1(m)), with respect to the audit committee, and 
     under rules issued by the New York Stock Exchange, as such 
     rules may be amended from time to time.
       ``(c) Compensation.--
       ``(1) In general.--The compensation of board members, 
     executive officers, and employees of an enterprise--
       ``(A) shall not be in excess of that which is reasonable 
     and appropriate;
       ``(B) shall be commensurate with the duties and 
     responsibilities of such persons;
       ``(C) shall be consistent with the long-term goals of the 
     enterprise;
       ``(D) shall not focus solely on earnings performance, but 
     shall take into account risk management, operational 
     stability and legal and regulatory compliance as well; and
       ``(E) shall be undertaken in a manner that complies with 
     applicable laws, rules, and regulations.
       ``(2) Reimbursement.--If an enterprise is required to 
     prepare an accounting restatement due to the material 
     noncompliance of the enterprise, as a result of misconduct, 
     with any financial reporting requirement under the securities 
     laws, the chief executive officer and chief financial officer 
     of the enterprise shall reimburse the enterprise as provided 
     under section 304 of the Sarbanes-Oxley Act of 2002 (15 
     U.S.C. 7243). This provision does not otherwise limit the 
     authority of the Agency to employ remedies available to it 
     under its enforcement authorities.
       ``(d) Code of Conduct and Ethics.--
       ``(1) In general.--An enterprise shall establish and 
     administer a written code of conduct and ethics that is 
     reasonably designed to assure the ability of board members, 
     executive officers, and employees of the enterprise to 
     discharge their duties and responsibilities, on behalf of the 
     enterprise, in an objective and impartial manner, and that 
     includes standards required under section 406 of the 
     Sarbanes-Oxley Act of 2002 (15 U.S.C. 7264) and other 
     applicable laws, rules, and regulations.
       ``(2) Review.--Not less than once every three years, an 
     enterprise shall review the adequacy of its code of conduct 
     and ethics for consistency with practices appropriate to the 
     enterprise and make any appropriate revisions to such code.
       ``(e) Conduct and Responsibilities of Board of Directors.--
     The board of directors of an enterprise shall be responsible 
     for directing the conduct and affairs of the enterprise in 
     furtherance of the safe and sound operation of the enterprise 
     and shall remain reasonably informed of the condition, 
     activities, and operations of the enterprise. The 
     responsibilities of the board of directors shall include 
     having in place adequate policies and procedures to assure 
     its oversight of, among other matters, the following:
       ``(1) Corporate strategy, major plans of action, risk 
     policy, programs for legal and regulatory compliance and 
     corporate performance, including prudent plans for growth and 
     allocation of adequate resources to manage operations risk.
       ``(2) Hiring and retention of qualified executive officers 
     and succession planning for such executive officers.
       ``(3) Compensation programs of the enterprise.
       ``(4) Integrity of accounting and financial reporting 
     systems of the enterprise, including independent audits and 
     systems of internal control.
       ``(5) Process and adequacy of reporting, disclosures, and 
     communications to shareholders, investors, and potential 
     investors.
       ``(6) Extensions of credit to board members and executive 
     officers.
       ``(7) Responsiveness of executive officers in providing 
     accurate and timely reports to Federal regulators and in 
     addressing the supervisory concerns of Federal regulators in 
     a timely and appropriate manner.
       ``(f) Prohibition of Extensions of Credit.--An enterprise 
     may not directly or indirectly, including through any 
     subsidiary, extend or maintain credit, arrange for the 
     extension of credit, or renew an extension of credit, in the 
     form of a personal loan to or for any board member or 
     executive officer of the enterprise, as provided by section 
     13(k) of the Securities Exchange Act of 1934 (15 U.S.C. 
     78m(k)).
       ``(g) Certification of Disclosures.--The chief executive 
     officer and the chief financial officer of an enterprise 
     shall review each quarterly report and annual report issued 
     by the enterprise and such reports shall include 
     certifications by such officers as required by section 302 of 
     the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7241).
       ``(h) Change of Audit Partner.--An enterprise may not 
     accept audit services from an external auditing firm if the 
     lead or coordinating audit partner who has primary 
     responsibility for the external audit of the enterprise, or 
     the external audit partner who has responsibility for 
     reviewing the external audit has performed audit services for 
     the enterprise in each of the five previous fiscal years.
       ``(i) Compliance Program.--
       ``(1) Requirement.--Each enterprise shall establish and 
     maintain a compliance program that is reasonably designed to 
     assure that the enterprise complies with applicable laws, 
     rules, regulations, and internal controls.
       ``(2) Compliance officer.--The compliance program of an 
     enterprise shall be headed by a compliance officer, however 
     styled, who reports directly to the chief executive officer 
     of the enterprise. The compliance officer shall report 
     regularly to the board of directors or an appropriate 
     committee of the board of directors on compliance with and 
     the adequacy of current compliance policies and procedures of 
     the enterprise, and shall recommend any adjustments to such 
     policies and procedures that the compliance officer considers 
     necessary and appropriate.
       ``(j) Risk Management Program.--
       ``(1) Requirement.--Each enterprise shall establish and 
     maintain a risk management program that is reasonably 
     designed to manage the risks of the operations of the 
     enterprise.
       ``(2) Risk management officer.--The risk management program 
     of an enterprise shall be headed by a risk management 
     officer, however styled, who reports directly to the chief 
     executive officer of the enterprise. The risk management 
     officer shall report regularly to the board of directors or 
     an appropriate committee of the board of directors on 
     compliance with and the adequacy of current risk management 
     policies and procedures of the enterprise, and shall 
     recommend any adjustments to such policies and procedures 
     that the risk management officer considers necessary and 
     appropriate.
       ``(k) Compliance With Other Laws.--
       ``(1) Deregistered or unregistered common stock.--If an 
     enterprise deregisters or has not registered its common stock 
     with the Securities and Exchange Commission under the 
     Securities Exchange Act of 1934, the enterprise shall comply 
     or continue to comply with sections 10A(m) and 13(k) of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78j-1(m), 78m(k)) 
     and sections 302, 304, and 406 of the Sarbanes-Oxley Act of 
     2002 (15 U.S.C. 7241, 7243, 7264), subject to such 
     requirements as provided by subsection (l) of this section.
       ``(2) Registered common stock.--An enterprise that has its 
     common stock registered

[[Page 5120]]

     with the Securities and Exchange Commission shall maintain 
     such registered status, unless it provides 60 days prior 
     written notice to the Director stating its intent to 
     deregister and its understanding that it will remain subject 
     to the requirements of the sections of the Securities 
     Exchange Act of 1934 and the Sarbanes-Oxley Act of 2002, 
     subject to such requirements as provided by subsection (l) of 
     this section.
       ``(l) Other Matters.--The Director may from time to time 
     establish standards, by regulation, order, or guideline, 
     regarding such other corporate governance matters of the 
     enterprises as the Director considers appropriate.
       ``(m) Modification of Standards.--In connection with 
     standards of Federal or State law (including the Revised 
     Model Corporation Act) or New York Stock Exchange rules that 
     are made applicable to an enterprise by section 1710.10 of 
     the Director's rules (12 CFR 1710.10) and by subsections (a), 
     (b), (g), (i), (j), and (k) of this section, the Director, in 
     the Director's sole discretion, may modify the standards 
     contained in this section or in part 1710 of the Director's 
     rules (12 CFR Part 1710) in accordance with section 553 of 
     title 5, United States Code, and upon written notice to the 
     enterprise.''.

     SEC. 117. REQUIRED REGISTRATION UNDER SECURITIES EXCHANGE ACT 
                   OF 1934.

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

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

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

     SEC. 118. LIAISON WITH FINANCIAL INSTITUTIONS EXAMINATION 
                   COUNCIL.

       Section 1007 of the Federal Financial Institutions 
     Examination Council Act of 1978 (12 U.S.C. 3306) is amended--
       (1) in the section heading, by inserting after ``state'' 
     the following: ``and federal housing finance agency''; and
       (2) by inserting after ``financial institutions'' the 
     following: ``, and one representative of the Federal Housing 
     Finance Agency,''.

     SEC. 119. GUARANTEE FEE STUDY.

       (a) In General.--The Director of the Federal Housing 
     Finance Agency, in consultation with the heads of the federal 
     banking agencies, shall, not later than 18 months after the 
     date of the enactment of this Act, submit to the Congress a 
     study concerning the pricing, transparency and reporting of 
     the Federal National Mortgage Association, the Federal Home 
     Loan Mortgage Corporation, and the Federal home loan banks 
     with regard to guarantee fees and concerning analogous 
     practices, transparency and reporting requirements (including 
     advances pricing practices by the Federal Home Loan Banks) of 
     other participants in the business of mortgage purchases and 
     securitization.
       (b) Factors.--The study required by this section shall 
     examine various factors such as credit risk, counterparty 
     risk considerations, economic value considerations, and 
     volume considerations used by the regulated entities (as such 
     term is defined in section 1303 of the Housing and Community 
     Development Act of 1992) included in the study in setting the 
     amount of fees they charge.
       (c) Contents of Report.--The report required under 
     subsection (a) shall identify and analyze--
       (1) the factors used by each enterprise (as such term is 
     defined in section 1303 of the Housing and Community 
     Development Act of 1992) in determining the amount of the 
     guarantee fees it charges;
       (2) the total revenue the enterprises earn from guarantee 
     fees;
       (3) the total costs incurred by the enterprises for 
     providing guarantees;
       (4) the average guarantee fee charged by the enterprises;
       (5) an analysis of how and why the guarantee fees charged 
     differ from such fees charged during the previous year;
       (6) a breakdown of the revenue and costs associated with 
     providing guarantees, based on product type and risk 
     classifications; and
       (7) other relevant information on guarantee fees with other 
     participants in the mortgage and securitization business.
       (d) Protection of Information.--Nothing in this section may 
     be construed to require or authorize the Director of the 
     Federal Housing Finance Agency, in connection with the study 
     mandated by this section, to disclose information of the 
     enterprises or other organization that is confidential or 
     proprietary.
       (e) Effective Date.--This section shall take effect on the 
     date of the enactment of this Act.

     SEC. 120. CONFORMING AMENDMENTS.

       (a) 1992 Act.--Part 1 of subtitle A of title XIII of the 
     Housing and Community Development Act of 1992 (12 U.S.C. 4511 
     et seq.), as amended by the preceding provisions of this 
     Division, is further amended--
       (1) by striking ``an enterprise'' each place such term 
     appears in such part (except in sections 1313(a)(2)(A), 
     1313A(b)(2)(B)(ii)(I), and 1316(b)(3)) and inserting ``a 
     regulated entity'';
       (2) by striking ``the enterprise'' each place such term 
     appears in such part (except in section 1316(b)(3)) and 
     inserting ``the regulated entity'';
       (3) by striking ``the enterprises'' each place such term 
     appears in such part (except in sections 1312(c)(2), and 
     1312(e)(2)) and inserting ``the regulated entities'';
       (4) by striking ``each enterprise'' each place such term 
     appears in such part and inserting ``each regulated entity'';
       (5) by striking ``Office'' each place such term appears in 
     such part (except in sections 1311(b)(2), 1312(b)(5), 
     1315(b), and 1316(a)(4), (g), and (h), 1317(c), and 1319A(a)) 
     and inserting ``Agency'';
       (6) in section 1315 (12 U.S.C. 4515)--
       (A) in subsection (a)--
       (i) in the subsection heading, by striking ``Office 
     Personnel'' and inserting ``In General''; and
       (ii) by striking ``The'' and inserting ``Subject to title 
     III of the Federal Housing Finance Reform Act of 2007, the'';
       (B) by striking subsections (d) and (f); and
       (C) by redesignating subsection (e) as subsection (d);
       (7) in section 1319B (12 U.S.C. 4521), by striking 
     ``Committee on Banking, Finance and Urban Affairs'' each 
     place such term appears and inserting ``Committee on 
     Financial Services''; and
       (8) in section 1319F (12 U.S.C. 4525), striking all that 
     follows ``United States Code'' and inserting ``, the Agency 
     shall be considered an agency responsible for the regulation 
     or supervision of financial institutions.''.
       (b) Amendments to Fannie Mae Charter Act.--The Federal 
     National Mortgage Association Charter Act (12 U.S.C. 1716 et 
     seq.) is amended--
       (1) by striking ``Director of the Office of Federal Housing 
     Enterprise Oversight of the Department of Housing and Urban 
     Development'' each place such term appears, and inserting 
     ``Director of the Federal Housing Finance Agency'', in--
       (A) section 303(c)(2) (12 U.S.C. 1718(c)(2));
       (B) section 309(d)(3)(B) (12 U.S.C. 1723a(d)(3)(B)); and
       (C) section 309(k)(1); and
       (2) in section 309--
       (A) in subsections (d)(3)(A) and (n)(1), by striking 
     ``Banking, Finance and Urban Affairs'' each place such term 
     appears and inserting ``Financial Services''; and
       (B) in subsection (m)--
       (i) in paragraph (1), by striking ``Secretary'' the second 
     place such term appears and inserting ``Director'';
       (ii) in paragraph (2), by striking ``Secretary'' the second 
     place such term appears and inserting ``Director''; and
       (iii) by striking ``Secretary'' each other place such term 
     appears and inserting ``Director of the Federal Housing 
     Finance Agency''; and
       (C) in subsection (n), by striking ``Secretary'' each place 
     such term appears and inserting ``Director of the Federal 
     Housing Finance Agency''.
       (c) Amendments to Freddie Mac Act.--The Federal Home Loan 
     Mortgage Corporation Act is amended--
       (1) by striking ``Director of the Office of Federal Housing 
     Enterprise Oversight of the Department of Housing and Urban 
     Development'' each place such term appears, and inserting 
     ``Director of the Federal Housing Finance Agency'', in--
       (A) section 303(b)(2) (12 U.S.C. 1452(b)(2));
       (B) section 303(h)(2) (12 U.S.C. 1452(h)(2)); and
       (C) section 307(c)(1) (12 U.S.C. 1456(c)(1));
       (2) in sections 303(h)(1) and 307(f)(1) (12 U.S.C. 
     1452(h)(1), 1456(f)(1)), by striking ``Banking, Finance and 
     Urban Affairs'' each place such term appears and inserting 
     ``Financial Services'';
       (3) in section 306(i) (12 U.S.C. 1455(i))--
       (A) by striking ``1316(c)'' and inserting ``306(c)''; and
       (B) by striking ``section 106'' and inserting ``section 
     1316''; and
       (4) in section 307 (12 U.S.C. 1456))--
       (A) in subsection (e)--
       (i) in paragraph (1), by striking ``Secretary'' the second 
     place such term appears and inserting ``Director'';
       (ii) in paragraph (2), by striking ``Secretary'' the second 
     place such term appears and inserting ``Director''; and
       (iii) by striking ``Secretary'' each other place such term 
     appears and inserting ``Director of the Federal Housing 
     Finance Agency''; and
       (B) in subsection (f), by striking ``Secretary'' each place 
     such term appears and inserting ``Director of the Federal 
     Housing Finance Agency''.

             Subtitle B--Improvement of Mission Supervision

     SEC. 131. TRANSFER OF PRODUCT APPROVAL AND HOUSING GOAL 
                   OVERSIGHT.

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

[[Page 5121]]



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

     and
       (2) by striking sections 1321 and 1322.

     SEC. 132. REVIEW OF ENTERPRISE PRODUCTS.

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

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

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

     SEC. 133. CONFORMING LOAN LIMITS.

       (a) Fannie Mae.--
       (1) General limit.--Section 302(b)(2) of the Federal 
     National Mortgage Association Charter Act (12 U.S.C. 
     1717(b)(2)) is amended--
       (A) in the 4th sentence, by striking ``the Resolution Trust 
     Corporation,''; and
       (B) by striking the 7th and 8th sentences and inserting the 
     following new sentences: ``For 2007, such limitations shall 
     not exceed $417,000 for a mortgage secured by a single-family 
     residence, $533,850 for a mortgage secured by a 2-family 
     residence, $645,300 for a mortgage secured by a 3-family 
     residence, and $801,950 for a mortgage secured by a 4-family 
     residence, except that such maximum limitations shall be 
     adjusted effective January 1 of each year beginning with 
     2008, subject to the limitations in this paragraph. Each 
     adjustment shall be made by adding to or subtracting from 
     each such amount (as it may have been previously adjusted) a 
     percentage thereof equal to the percentage increase or 
     decrease, during the most recent 12-month or four-quarter 
     period ending before the time of determining such annual 
     adjustment, in the housing price index maintained by the 
     Director of the Federal Housing Finance Agency (pursuant to 
     section 1322 of the Housing and Community Development Act of 
     1992 (12 U.S.C. 4541)).''.
       (2) High-cost area limit.--Section 302(b)(2) of the Federal 
     National Mortgage Association Charter Act is (12 U.S.C. 
     1717(b)(2)) is amended by adding after the period at the end 
     the following: ``Such foregoing limitations shall also be 
     increased with respect to properties of a particular size 
     located in any area for which the median price for such size 
     residence exceeds the foregoing limitation for such size 
     residence, to the lesser of 150 percent of such foregoing 
     limitation for such size residence or the amount that is 
     equal to the median price in such area for such size 
     residence, except that, subject to the order, if any, issued 
     by the Director of the Federal Housing Finance Agency 
     pursuant to section 133(d)(3) of the Federal Housing Finance 
     Reform Act of 2007, such increase shall apply only with 
     respect to mortgages on which are based securities issued and 
     sold by the corporation.''.
       (b) Freddie Mac.--
       (1) General limit.--Section 305(a)(2) of the Federal Home 
     Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) is 
     amended--
       (A) in the 3rd sentence, by striking ``the Resolution Trust 
     Corporation,''; and
       (B) by striking the 6th and 7th sentences and inserting the 
     following new sentences: ``For 2007, such limitations shall 
     not exceed $417,000 for a mortgage secured by a single-family 
     residence, $533,850 for a mortgage secured by a 2-family 
     residence, $645,300 for a mortgage secured by a 3-family 
     residence, and $801,950 for a mortgage secured by a 4-family 
     residence, except that such maximum limitations shall be 
     adjusted effective January 1 of each year beginning with 
     2008, subject to the limitations in this paragraph. Each 
     adjustment shall be made by adding to or subtracting from 
     each such amount (as it may have been previously adjusted) a 
     percentage thereof equal to the percentage increase or 
     decrease, during the most recent

[[Page 5122]]

     12-month or four-quarter period ending before the time of 
     determining such annual adjustment, in the housing price 
     index maintained by the Director of the Federal Housing 
     Finance Agency (pursuant to section 1322 of the Housing and 
     Community Development Act of 1992 (12 U.S.C. 4541)).''
       (2) High-cost area limit.--Section 305(a)(2) of the Federal 
     Home Loan Mortgage Corporation Act is amended by adding after 
     the period at the end the following: ``Such foregoing 
     limitations shall also be increased with respect to 
     properties of a particular size located in any area for which 
     the median price for such size residence exceeds the 
     foregoing limitation for such size residence, to the lesser 
     of 150 percent of such foregoing limitation for such size 
     residence or the amount that is equal to the median price in 
     such area for such size residence, except that, subject to 
     the order, if any, issued by the Director of the Federal 
     Housing Finance Agency pursuant to section 133(d)(3) of the 
     Federal Housing Finance Reform Act of 2007, such increase 
     shall apply only with respect to mortgages on which are based 
     securities issued and sold by the Corporation.''.
       (c) Housing Price Index.--Subpart A of part 2 of subtitle A 
     of title XIII of the Housing and Community Development Act of 
     1992 (as amended by the preceding provisions of this 
     Division) is amended by inserting after section 1321 (as 
     added by section 132 of this Division) the following new 
     section:

     ``SEC. 1322. HOUSING PRICE INDEX.

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

     SEC. 134. ANNUAL HOUSING REPORT REGARDING REGULATED ENTITIES.

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

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

       ``(a) In General.--After reviewing and analyzing the 
     reports submitted under section 309(n) of the Federal 
     National Mortgage Association Charter Act, section 307(f) of 
     the Federal Home Loan Mortgage Corporation Act, and section 
     10(j)(11) of the Federal Home Loan Bank Act (12 U.S.C. 
     1430(j)(11)), the Director shall submit a report, not later 
     than October 30 of each year, to the Committee on Financial 
     Services of the House of Representatives and the Committee on 
     Banking, Housing, and Urban Affairs of the Senate, on the 
     activities of each regulated entity.
       ``(b) Contents.--The report shall--
       ``(1) discuss the extent to which--
       ``(A) each enterprise is achieving the annual housing goals 
     established under subpart B of this part;
       ``(B) each enterprise is complying with section 1337;
       ``(C) each Federal home loan bank is complying with section 
     10(j) of the Federal Home Loan Bank Act; and
       ``(D) each regulated entity is achieving the purposes of 
     the regulated entity established by law;
       ``(2) aggregate and analyze relevant data on income to 
     assess the compliance by each enterprise with the housing 
     goals established under subpart B;
       ``(3) aggregate and analyze data on income, race, and 
     gender by census tract and other relevant classifications, 
     and compare such data with larger demographic, housing, and 
     economic trends;
       ``(4) examine actions that--
       ``(A) each enterprise has undertaken or could undertake to 
     promote and expand the annual goals established under subpart 
     B and the purposes of the enterprise established by law; and
       ``(B) each Federal home loan bank has taken or could 
     undertake to promote and expand the community investment 
     program and affordable housing program of the bank 
     established under section subsections (i) and (j) of section 
     10 of the Federal Home Loan Bank Act;
       ``(5) examine the primary and secondary multifamily housing 
     mortgage markets and describe--
       ``(A) the availability and liquidity of mortgage credit;
       ``(B) the status of efforts to provide standard credit 
     terms and underwriting guidelines for multifamily housing and 
     to securitize such mortgage products; and
       ``(C) any factors inhibiting such standardization and 
     securitization;
       ``(6) examine actions each regulated entity has undertaken 
     and could undertake to promote and expand opportunities for 
     first-time homebuyers, including the use of alternative 
     credit scoring;
       ``(7) describe any actions taken under section 1325(5) with 
     respect to originators found to violate fair lending 
     procedures;
       ``(8) discuss and analyze existing conditions and trends, 
     including conditions and trends relating to pricing, in the 
     housing markets and mortgage markets; and
       ``(9) identify the extent to which each enterprise is 
     involved in mortgage purchases and secondary market 
     activities involving subprime loans (as identified in 
     accordance with the regulations issued pursuant to section 
     134(b) of the Federal Housing Finance

[[Page 5123]]

     Reform Act of 2007) and compare the characteristics of 
     subprime loans purchased and securitized by the enterprises 
     to other loans purchased and securitized by the enterprises.
       ``(c) Data Collection and Reporting.--
       ``(1) In general.--To assist the Director in analyzing the 
     matters described in subsection (b) and establishing the 
     methodology described in section 1322, the Director shall 
     conduct, on a monthly basis, a survey of mortgage markets in 
     accordance with this subsection.
       ``(2) Data points.--Each monthly survey conducted by the 
     Director under paragraph (1) shall collect data on--
       ``(A) the characteristics of individual mortgages that are 
     eligible for purchase by the enterprises and the 
     characteristics of individual mortgages that are not eligible 
     for purchase by the enterprises including, in both cases, 
     information concerning--
       ``(i) the price of the house that secures the mortgage;
       ``(ii) the loan-to-value ratio of the mortgage, which shall 
     reflect any secondary liens on the relevant property;
       ``(iii) the terms of the mortgage;
       ``(iv) the creditworthiness of the borrower or borrowers; 
     and
       ``(v) whether the mortgage, in the case of a conforming 
     mortgage, was purchased by an enterprise; and
       ``(B) such other matters as the Director determines to be 
     appropriate.
       ``(3) Public availability.--The Director shall make any 
     data collected by the Director in connection with the conduct 
     of a monthly survey available to the public in a timely 
     manner, provided that the Director may modify the data 
     released to the public to ensure that the data is not 
     released in an identifiable form.
       ``(4) Definition.--For purposes of this subsection, the 
     term `identifiable form' means any representation of 
     information that permits the identity of a borrower to which 
     the information relates to be reasonably inferred by either 
     direct or indirect means.''.
       (b) Standards for Subprime Loans.--The Director shall, not 
     later than one year after the effective date under section 
     185, by regulations issued under section 1316G of the Housing 
     and Community Development Act of 1992, establish standards by 
     which mortgages purchased and mortgages purchased and 
     securitized shall be characterized as subprime for the 
     purpose of, and only for the purpose of, complying with the 
     reporting requirement under section 1324(b)(9) of such Act.

     SEC. 135. ANNUAL REPORTS BY REGULATED ENTITIES ON AFFORDABLE 
                   HOUSING STOCK.

       The Housing and Community Development Act of 1992 is 
     amended by inserting after section 1328 (12 U.S.C. 4548) the 
     following new section:

     ``SEC. 1329. ANNUAL REPORTS ON AFFORDABLE HOUSING STOCK.

       ``(a) In General.--To obtain information helpful in 
     applying the formula under section 1337(c)(2) for the 
     affordable housing program under such section and for other 
     appropriate uses, the regulated entities shall conduct, or 
     provide for the conducting of, a study on an annual basis to 
     determine the levels of affordable housing inventory, and the 
     changes in such levels, in communities throughout the United 
     States.
       ``(b) Contents.--The annual study under this section shall 
     determine, for the United States, each State, and each 
     community within each State--
       ``(1) the level of affordable housing inventory, including 
     affordable rental dwelling units and affordable homeownership 
     dwelling units;
       ``(2) any changes to the level of such inventory during the 
     12-month period of the study under this section, including--
       ``(A) any additions to such inventory, disaggregated by the 
     category of such additions (including new construction or 
     housing conversion);
       ``(B) any subtractions from such inventory, disaggregated 
     by the category of such subtractions (including abandonment, 
     demolition, or upgrade to market-rate housing);
       ``(C) the number of new affordable dwelling units placed in 
     service; and
       ``(D) the number of affordable housing dwelling units 
     withdrawn from service;
       ``(3) the types of financing used to build any dwelling 
     units added to such inventory level and the period during 
     which such units are required to remain affordable;
       ``(4) any excess demand for affordable housing, including 
     the number of households on rental housing waiting lists and 
     the tenure of the wait on such lists; and
       ``(5) such other information as the Director may require.
       ``(c) Report.--For each annual study conducted pursuant to 
     this section, the regulated entities shall submit to the 
     Congress, and make publicly available, a report setting forth 
     the findings of the study.
       ``(d) Regulations and Timing.--The Director shall, by 
     regulation, establish requirements for the studies and 
     reports under this section, including deadlines for the 
     submission of such annual reports and standards for 
     determining affordable housing.''.

     SEC. 136. MORTGAGOR IDENTIFICATION REQUIREMENTS FOR MORTGAGES 
                   OF REGULATED ENTITIES.

       (a) In General.--Subpart A of part 2 of subtitle A of title 
     XIII of the Housing and Community Development Act of 1992 (12 
     U.S.C. 4541 et seq.), as amended by the preceding provisions 
     of this Division, is further amended by adding at the end the 
     following new section:

     ``SEC. 1330. MORTGAGOR IDENTIFICATION REQUIREMENTS FOR 
                   MORTGAGES OF REGULATED ENTITIES.

       ``(a) Limitation.--The Director shall by regulation 
     establish standards, and shall enforce compliance with such 
     standards, that--
       ``(1) prohibit the enterprises from the purchase, service, 
     holding, selling, lending on the security of, or otherwise 
     dealing with any mortgage on a one- to four-family residence 
     that will be used as the principal residence of the mortgagor 
     that does not meet the requirements under subsection (b); and
       ``(2) prohibit the Federal home loan banks from providing 
     any advances to a member for use in financing, and from 
     accepting as collateral for any advance to a member, any 
     mortgage on a one- to four-family residence that will be used 
     as the principal residence of the mortgagor that does not 
     meet the requirements under subsection (b).
       ``(b) Identification Requirements.--The requirements under 
     this subsection with respect to a mortgage are that the 
     mortgagor have, at the time of settlement on the mortgage, a 
     Social Security account number.''.
       (b) Fannie Mae.--Section 304 of the Federal National 
     Mortgage Association Charter Act (12 U.S.C. 1719) is amended 
     by adding at the end the following new subsection:
       ``(g) Prohibition Regarding Mortgagor Identification 
     Requirement.--Nothing in this Act may be construed to 
     authorize the corporation to purchase, service, hold, sell, 
     lend on the security of, or otherwise deal with any mortgage 
     that the corporation is prohibited from so dealing with under 
     the standards issued under section 1330 of the Housing and 
     Community Development Act of 1992 by the Director of the 
     Federal Housing Finance Agency.''.
       (c) Freddie Mac.--Section 305 of the Federal Home Loan 
     Mortgage Corporation Act (12 U.S.C. 1454) is amended by 
     adding at the end the following new subsection:
       ``(d) Prohibition Regarding Mortgagor Identification 
     Requirements.--Nothing in this Act may be construed to 
     authorize the Corporation to purchase, service, hold, sell, 
     lend on the security of, or otherwise deal with any mortgage 
     that the Corporation is prohibited from so dealing with under 
     the standards issued under section 1330 of the Housing and 
     Community Development Act of 1992 by the Director of the 
     Federal Housing Finance Agency.''.
       (d) Federal Home Loan Banks.--Section 10(a) of the Federal 
     Home Loan Bank Act (12 U.S.C. 1430(a)) is amended--
       (1) by redesignating paragraph (6) as paragraph (7); and
       (2) by inserting after paragraph (5) the following new 
     paragraph:
       ``(6) Prohibition regarding mortgagor identification 
     requirements.--Nothing in this Act may be construed to 
     authorize a Federal Home Loan Bank to provide any advance to 
     a member for use in financing, or accept as collateral for an 
     advance under this section, any mortgage that a Bank is 
     prohibited from so accepting under the standards issued under 
     section 1330 of the Housing and Community Development Act of 
     1992 by the Director of the Federal Housing Finance 
     Agency.''.

     SEC. 137. REVISION OF HOUSING GOALS.

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

     ``SEC. 1331. ESTABLISHMENT OF HOUSING GOALS.

       ``(a) In General.--The Director shall establish, effective 
     for the first year that begins after the effective date under 
     section 185 of the Federal Housing Finance Reform Act of 2007 
     and each year thereafter, annual housing goals, with respect 
     to the mortgage purchases by the enterprises, as follows:
       ``(1) Single family housing goals.--Three single-family 
     housing goals under section 1332.
       ``(2) Multifamily special affordable housing goals.--A 
     multifamily special affordable housing goal under section 
     1333.
       ``(b) Eliminating Interest Rate Disparities.--
       ``(1) In general.--Upon request by the Director, an 
     enterprise shall provide to the Director, in a form 
     determined by the Director, data the Director may review to 
     determine whether there exist disparities in interest rates 
     charged on mortgages to borrowers who are minorities as 
     compared with comparable mortgages to borrowers of similar 
     creditworthiness who are not minorities.
       ``(2) Remedial actions upon preliminary finding.--Upon a 
     preliminary finding by the Director that a pattern of 
     disparities in interest rates with respect to any lender or 
     lenders exists pursuant to the data provided by an enterprise 
     in paragraph (1), the Director shall--
       ``(A) refer the preliminary finding to the appropriate 
     regulatory or enforcement agency for further review;
       ``(B) require the enterprise to submit additional data with 
     respect to any lender or lenders, as appropriate and to the 
     extent practicable, to the Director who shall submit

[[Page 5124]]

     any such additional data to the regulatory or enforcement 
     agency for appropriate action; and
       ``(C) require the enterprise to undertake remedial actions, 
     as appropriate, pursuant to section 1325(5) (12 U.S.C. 
     4545(5)).
       ``(3) Annual report to congress.--The Director shall submit 
     to the Committee on Financial Services of the House of 
     Representatives and the Committee on Banking, Housing, and 
     Urban Affairs of the Senate a report describing the actions 
     taken, and being taken, by the Director to carry out this 
     subsection. No such report shall identify any lender or 
     lenders who have not been found to have engaged in 
     discriminatory lending practices pursuant to a final 
     adjudication on the record, and after opportunity for an 
     administrative hearing, in accordance with subchapter II of 
     chapter 5 of title 5, United States Code.
       ``(4) Protection of identity of individuals.--In carrying 
     out this subsection, the Director shall ensure that no 
     property-related or financial information that would enable a 
     borrower to be identified shall be made public.
       ``(c) Timing.--The Director shall establish an annual 
     deadline by which the Director shall establish the annual 
     housing goals under this subpart for each year, taking into 
     consideration the need for the enterprises to reasonably and 
     sufficiently plan their operations and activities in advance, 
     including operations and activities necessary to meet such 
     annual goals.

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

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

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

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

[[Page 5125]]

       ``(1) the income of the prospective or actual tenants of 
     the property, where such data are available; or
       ``(2) where the data referred to in paragraph (1) are not 
     available, rent levels affordable to low-income and very low-
     income families.

     A rent level shall be considered to be affordable for 
     purposes of this subsection for an income category referred 
     to in this subsection if it does not exceed 30 percent of the 
     maximum income level of such income category, with 
     appropriate adjustments for unit size as measured by the 
     number of bedrooms.
       ``(d) Determination of Compliance.--The Director shall, for 
     each year that the housing goal under this section is in 
     effect pursuant to section 1331(a), determine whether each 
     enterprise has complied with such goal and the additional 
     requirements under subsection (a)(2).

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

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

     SEC. 138. DUTY TO SERVE UNDERSERVED MARKETS.

       (a) Establishment and Evaluation of Performance.--Section 
     1335 of the Housing and Community Development Act of 1992 (12 
     U.S.C. 4565) is amended--
       (1) in the section heading, by inserting ``DUTY TO SERVE 
     UNDERSERVED MARKETS AND'' before ``OTHER'';
       (2) by striking subsection (b);
       (3) in subsection (a)--
       (A) in the matter preceding paragraph (1), by inserting 
     ``and to carry out the duty under subsection (a) of this 
     section'' before ``, each enterprise shall'';
       (B) in paragraph (3), by inserting ``and'' after the 
     semicolon at the end;
       (C) in paragraph (4), by striking ``; and'' and inserting a 
     period;
       (D) by striking paragraph (5); and
       (E) by redesignating such subsection as subsection (b);
       (4) by inserting before subsection (b) (as so redesignated 
     by paragraph (3)(E) of this subsection) the following new 
     subsection:
       ``(a) Duty To Serve Underserved Markets.--
       ``(1) Duty.--In accordance with the purpose of the 
     enterprises under section 301(3) of the Federal National 
     Mortgage Association Charter Act (12 U.S.C. 1716) and section 
     301(b)(3) of the Federal Home Loan Mortgage Corporation Act 
     (12 U.S.C. 1451 note) to undertake activities relating to 
     mortgages on housing for very low-, low-, and moderate-income 
     families involving a reasonable economic return that may be 
     less than the return earned on other activities, each 
     enterprise shall have the duty to increase the liquidity of 
     mortgage investments and improve the distribution of 
     investment capital available for mortgage financing for 
     underserved markets.
       ``(2) Underserved markets.--To meet its duty under 
     paragraph (1), each enterprise shall comply with the 
     following requirements with respect to the following 
     underserved markets:
       ``(A) Manufactured housing.--The enterprise shall lead the 
     industry in developing loan products and flexible 
     underwriting guidelines to facilitate a secondary market for 
     mortgages on manufactured homes for very low-, low-, and 
     moderate-income families.
       ``(B) Affordable housing preservation.--The enterprise 
     shall lead the industry in developing loan products and 
     flexible underwriting guidelines to facilitate a secondary 
     market to preserve housing affordable to very low-, low-, and 
     moderate-income families, including housing projects 
     subsidized under--
       ``(i) the project-based and tenant-based rental assistance 
     programs under section 8 of the United States Housing Act of 
     1937;
       ``(ii) the program under section 236 of the National 
     Housing Act;
       ``(iii) the below-market interest rate mortgage program 
     under section 221(d)(4) of the National Housing Act;
       ``(iv) the supportive housing for the elderly program under 
     section 202 of the Housing Act of 1959;
       ``(v) the supportive housing program for persons with 
     disabilities under section 811 of the Cranston-Gonzalez 
     National Affordable Housing Act;
       ``(vi) the programs under title IV of the McKinney-Vento 
     Homeless Assistance Act (42 U.S.C. 11361 et seq.), but only 
     permanent supportive housing projects subsidized under such 
     programs; and
       ``(vii) the rural rental housing program under section 515 
     of the Housing Act of 1949.
       ``(C) Rural and other underserved markets.--The enterprise 
     shall lead the industry in developing loan products and 
     flexible underwriting guidelines to facilitate a secondary 
     market for mortgages on housing for very low-, low-, and 
     moderate-income families in rural areas, and for mortgages 
     for housing for any other underserved market for very low-, 
     low-, and moderate-income families that the Secretary 
     identifies as lacking adequate credit through conventional 
     lending sources. Such underserved markets may be identified 
     by borrower type, market segment, or geographic area.''; and
       (5) by adding at the end the following new subsection:
       ``(c) Evaluation and Reporting of Compliance.--
       ``(1) In general.--Not later than 6 months after the 
     effective date under section 185 of the Federal Housing 
     Finance Reform Act of 2007, the Director shall establish a 
     manner for evaluating whether, and the extent to which, the 
     enterprises have complied with the duty under subsection (a) 
     to serve underserved markets and for rating the extent of 
     such compliance. Using such method, the Director shall, for 
     each year, evaluate such compliance and rate the performance 
     of each enterprise as to extent of compliance. The Director 
     shall include such evaluation and rating for each enterprise 
     for a year in the report for that year submitted pursuant to 
     section 1319B(a).
       ``(2) Separate evaluations.--In determining whether an 
     enterprise has complied

[[Page 5126]]

     with the duty referred to in paragraph (1), the Director 
     shall separately evaluate whether the enterprise has complied 
     with such duty with respect to each of the underserved 
     markets identified in subsection (a), taking into 
     consideration--
       ``(A) the development of loan products and more flexible 
     underwriting guidelines;
       ``(B) the extent of outreach to qualified loan sellers in 
     each of such underserved markets; and
       ``(C) the volume of loans purchased in each of such 
     underserved markets.
       ``(3) Manufactured housing market.--In determining whether 
     an enterprise has complied with the duty under subparagraph 
     (A) of subsection (a)(2), the Director may consider loans 
     secured by both real and personal property.''.
       (b) Enforcement.--Subsection (a) of section 1336 of the 
     Housing and Community Development Act of 1992 (12 U.S.C. 
     4566(a)) is amended--
       (1) in paragraph (1), by inserting ``and with the duty 
     under section 1335(a) of each enterprise with respect to 
     underserved markets,'' before ``as provided in this 
     section''; and
       (2) by adding at the end of such subsection, as amended by 
     the preceding provisions of this title, the following new 
     paragraph:
       ``(4) Enforcement of duty to provide mortgage credit to 
     underserved markets.--The duty under section 1335(a) of each 
     enterprise to serve underserved markets (as determined in 
     accordance with section 1335(c)) shall be enforceable under 
     this section to the same extent and under the same provisions 
     that the housing goals established under this subpart are 
     enforceable. Such duty shall not be enforceable under any 
     other provision of this title (including subpart C of this 
     part) other than this section or under any provision of the 
     Federal National Mortgage Association Charter Act or the 
     Federal Home Loan Mortgage Corporation Act.''.

     SEC. 139. MONITORING AND ENFORCING COMPLIANCE WITH HOUSING 
                   GOALS.

       (a) Additional Credit for Certain Mortgages.--Section 
     1336(a) of the Housing and Community Development Act of 1992 
     (12 U.S.C. 4566(a)) is amended--
       (1) in paragraph (2), by inserting ``, except as provided 
     in paragraph (4),'' after ``which''; and
       (2) by adding at the end the following new paragraph:
       ``(5) Additional credit.--The Director shall assign more 
     than 125 percent credit toward achievement, under this 
     section, of the housing goals for mortgage purchase 
     activities of the enterprises that comply with the 
     requirements of such goals and support--
       ``(A) housing that meets energy efficiency or other 
     environmental standards that are established by a Federal, 
     State, or local governmental authority with respect to the 
     geographic area where the housing is located or are otherwise 
     widely recognized; or
       ``(B) housing that includes a licensed childcare center.

     The availability of additional credit under this paragraph 
     shall not be used to increase any housing goal, subgoal, or 
     target established under this subpart.''.
       (b) Monitoring and Enforcement.--Section 1336 of the 
     Housing and Community Development Act of 1992 (12 U.S.C. 
     4566) is amended--
       (1) in subsection (b)--
       (A) in the subsection heading, by inserting ``Preliminary'' 
     before ``Determination'';
       (B) by striking paragraph (1) and inserting the following 
     new paragraph:
       ``(1) Notice.--If the Director preliminarily determines 
     that an enterprise has failed, or that there is a substantial 
     probability that an enterprise will fail, to meet any housing 
     goal established under this subpart, the Director shall 
     provide written notice to the enterprise of such a 
     preliminary determination, the reasons for such 
     determination, and the information on which the Director 
     based the determination.'';
       (C) in paragraph (2)--
       (i) in subparagraph (A), by inserting ``finally'' before 
     ``determining'';
       (ii) by striking subparagraphs (B) and (C) and inserting 
     the following new subparagraph:
       ``(B) Extension or shortening of period.--The Director 
     may--
       ``(i) extend the period under subparagraph (A) for good 
     cause for not more than 30 additional days; and
       ``(ii) shorten the period under subparagraph (A) for good 
     cause.''; and
       (iii) by redesignating subparagraph (D) as subparagraph 
     (C); and
       (D) in paragraph (3)--
       (i) in subparagraph (A), by striking ``determine'' and 
     inserting ``issue a final determination of'';
       (ii) in subparagraph (B), by inserting ``final'' before 
     ``determinations''; and
       (iii) in subparagraph (C)--

       (I) by striking ``Committee on Banking, Finance and Urban 
     Affairs'' and inserting ``Committee on Financial Services''; 
     and
       (II) by inserting ``final'' before ``determination'' each 
     place such term appears; and

       (2) in subsection (c)--
       (A) by striking the subsection designation and heading and 
     all that follows through the end of paragraph (1) and 
     inserting the following:
       ``(c) Cease and Desist Orders, Civil Money Penalties, and 
     Remedies Including Housing Plans.--
       ``(1) Requirement.--If the Director finds, pursuant to 
     subsection (b), that there is a substantial probability that 
     an enterprise will fail, or has actually failed, to meet any 
     housing goal under this subpart and that the achievement of 
     the housing goal was or is feasible, the Director may require 
     that the enterprise submit a housing plan under this 
     subsection. If the Director makes such a finding and the 
     enterprise refuses to submit such a plan, submits an 
     unacceptable plan, fails to comply with the plan or the 
     Director finds that the enterprise has failed to meet any 
     housing goal under this subpart, in addition to requiring an 
     enterprise to submit a housing plan, the Director may issue a 
     cease and desist order in accordance with section 1341, 
     impose civil money penalties in accordance with section 1345, 
     or order other remedies as set forth in paragraph (7) of this 
     subsection.'';
       (B) in paragraph (2)--
       (i) by striking ``Contents.--Each housing plan'' and 
     inserting ``Housing plan.--If the Director requires a housing 
     plan under this section, such a plan''; and
       (ii) in subparagraph (B), by inserting ``and changes in its 
     operations'' after ``improvements'';
       (C) in paragraph (3)--
       (i) by inserting ``comply with any remedial action or'' 
     before ``submit a housing plan''; and
       (ii) by striking ``under subsection (b)(3) that a housing 
     plan is required'';
       (D) in paragraph (4), by striking the first two sentences 
     and inserting the following: ``The Director shall review each 
     submission by an enterprise, including a housing plan 
     submitted under this subsection, and not later than 30 days 
     after submission, approve or disapprove the plan or other 
     action. The Director may extend the period for approval or 
     disapproval for a single additional 30-day period if the 
     Director determines such extension necessary.''; and
       (E) by adding at the end the following new paragraph:
       ``(7) Additional remedies for failure to meet goals.--In 
     addition to ordering a housing plan under this section, 
     issuing cease and desist orders under section 1341, and 
     ordering civil money penalties under section 1345, the 
     Director may seek other actions when an enterprise fails to 
     meet a goal, and exercise appropriate enforcement authority 
     available to the Director under this Act to prohibit the 
     enterprise from initially offering any product (as such term 
     is defined in section 1321(f)) or engaging in any new 
     activities, services, undertakings, and offerings and to 
     order the enterprise to suspend products and activities, 
     services, undertakings, and offerings pending its achievement 
     of the goal.''.

     SEC. 140. AFFORDABLE HOUSING FUND.

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

     ``SEC. 1337. AFFORDABLE HOUSING FUND.

       ``(a) Establishment and Purpose.--The Director, in 
     consultation with the Secretary of Housing and Urban 
     Development, shall establish and manage an affordable housing 
     fund in accordance with this section, which shall be funded 
     with amounts allocated by the enterprises under subsection 
     (b). The purpose of the affordable housing fund shall be to 
     provide formula grants to grantees for use--
       ``(1) to increase homeownership for extremely low-and very 
     low-income families;
       ``(2) to increase investment in housing in low-income 
     areas, and areas designated as qualified census tracts or an 
     area of chronic economic distress pursuant to section 143(j) 
     of the Internal Revenue Code of 1986 (26 U.S.C. 143(j));
       ``(3) to increase and preserve the supply of rental and 
     owner-occupied housing for extremely low- and very low-income 
     families;
       ``(4) to increase investment in public infrastructure 
     development in connection with housing assisted under this 
     section; and
       ``(5) to leverage investments from other sources in 
     affordable housing and in public infrastructure development 
     in connection with housing assisted under this section.
       ``(b) Allocation of Amounts by Enterprises.--
       ``(1) In general.--In accordance with regulations issued by 
     the Director under subsection (m) and subject to paragraph 
     (2) of this subsection and subsection (i)(5), each enterprise 
     shall allocate to the affordable housing fund established 
     under subsection (a), in each of the years 2007 through 2011, 
     an amount equal to 1.2 basis points for each dollar of the 
     average total mortgage portfolio of the enterprise during the 
     preceding year.
       ``(2) Suspension of contributions.--The Director shall 
     temporarily suspend the allocation under paragraph (1) by an 
     enterprise to the affordable housing fund upon a finding by 
     the Director that such allocations--
       ``(A) are contributing, or would contribute, to the 
     financial instability of the enterprise;
       ``(B) are causing, or would cause, the enterprise to be 
     classified as undercapitalized; or
       ``(C) are preventing, or would prevent, the enterprise from 
     successfully completing a capital restoration plan under 
     section 1369C.

[[Page 5127]]

       ``(3) 5-year sunset and report.--
       ``(A) Sunset.--The enterprises shall not be required to 
     make allocations to the affordable housing fund in 2012 or in 
     any year thereafter.
       ``(B) Report on program continuance.--Not later than June 
     30, 2011, the Director shall submit to the Committee on 
     Financial Services of the House of Representatives and the 
     Committee on Banking, Housing, and Urban Affairs of the 
     Senate a report making recommendations on whether the program 
     under this section, including the requirement for the 
     enterprises to make allocations to the affordable housing 
     fund, should be extended and on any modifications for the 
     program.
       ``(4) Prohibition of pass-through of cost of allocations.--
     The Director shall, by regulation, prohibit each enterprise 
     from redirecting such costs, through increased charges or 
     fees, or decreased premiums, or in any other manner, to the 
     originators of mortgages purchased or securitized by the 
     enterprise.
       ``(c) Affordable Housing Needs Formulas.--
       ``(1) Allocation for 2007.--
       ``(A) Allocation percentages for louisiana and 
     mississippi.--For purposes of subsection (d)(1)(A), the 
     allocation percentages for 2007 for the grantees under this 
     section for such year shall be as follows:
       ``(i) The allocation percentage for the Louisiana Housing 
     Finance Agency shall be 75 percent.
       ``(ii) The allocation percentage for the Mississippi 
     Development Authority shall be 25 percent.
       ``(B) Use in disaster areas.--Affordable housing grant 
     amounts for 2007 shall be used only as provided in subsection 
     (g) only for such eligible activities in areas that were 
     subject to a declaration by the President of a major disaster 
     or emergency under the Robert T. Stafford Disaster Relief and 
     Emergency Assistance Act (42 U.S.C. 5121 et seq.) in 
     connection with Hurricane Katrina or Rita of 2005.
       ``(2) Allocation formula for other years.--The Secretary of 
     Housing and Urban Development shall, by regulation, establish 
     a formula to allocate, among the States (as such term is 
     defined in section 1303) and federally recognized Indian 
     tribes, the amounts provided by the enterprises in each year 
     referred to subsection (b)(1), other than 2007, to the 
     affordable housing fund established under this section. The 
     formula shall be based on the following factors, with respect 
     to each State and tribe:
       ``(A) The ratio of the population of the State or federally 
     recognized Indian tribe to the aggregate population of all 
     the States and tribes.
       ``(B) The percentage of families in the State or federally 
     recognized Indian tribe that pay more than 50 percent of 
     their annual income for housing costs.
       ``(C) The percentage of persons in the State or federally 
     recognized Indian tribe that are members of extremely low- or 
     very low-income families.
       ``(D) The cost of developing or carrying out rehabilitation 
     of housing in the State or for the federally recognized 
     Indian tribe.
       ``(E) The percentage of families in the State or federally 
     recognized Indian tribe that live in substandard housing.
       ``(F) The percentage of housing stock in the State or for 
     the federally recognized Indian tribe that is extremely old 
     housing.
       ``(G) Any other factors that the Secretary determines to be 
     appropriate.
       ``(3) Failure to establish.--If, in any year referred to in 
     subsection (b)(1), other than 2007, the regulations 
     establishing the formula required under paragraph (2) of this 
     subsection have not been issued by the date that the Director 
     determines the amounts described in subsection (d)(1) to be 
     available for affordable housing fund grants in such year, 
     for purposes of such year any amounts for a State (as such 
     term is defined in section 1303 of this Act) that would 
     otherwise be determined under subsection (d) by applying the 
     formula established pursuant to paragraph (2) of this 
     subsection shall be determined instead by applying, for such 
     State, the percentage that is equal to the percentage of the 
     total amounts made available for such year for allocation 
     under subtitle A of title II of the Cranston-Gonzalez 
     National Affordable Housing Act (42 U.S.C. 12741 et seq.) 
     that are allocated in such year, pursuant to such subtitle, 
     to such State (including any insular area or unit of general 
     local government, as such terms are defined in section 104 of 
     such Act (42 U.S.C. 12704), that is treated as a State under 
     section 1303 of this Act) and to participating jurisdictions 
     and other eligible entities within such State.
       ``(d) Allocation of Formula Amount; Grants.--
       ``(1) Formula amount.--For each year referred to in 
     subsection (b)(1), the Director shall determine the formula 
     amount under this section for each grantee, which shall be 
     the amount determined for such grantee--
       ``(A) for 2007, by applying the allocation percentages 
     under subparagraph (A) of subsection (c)(1) to the sum of the 
     total amounts allocated by the enterprises to the affordable 
     housing fund for such year, less any amounts used pursuant to 
     subsection (i)(1); and
       ``(B) for any other year referred to in subsection (b)(1) 
     (other than 2007), by applying the formula established 
     pursuant to paragraph (2) of subsection (c) to the sum of the 
     total amounts allocated by the enterprises to the affordable 
     housing fund for such year and any recaptured amounts 
     available pursuant to subsection (i)(4), less any amounts 
     used pursuant to subsection (i)(1).
       ``(2) Notice.--In each year referred to in subsection 
     (b)(1), not later than 60 days after the date that the 
     Director determines the amounts described in paragraph (1) to 
     be available for affordable housing fund grants to grantees 
     in such year, the Director shall cause to be published in the 
     Federal Register a notice that such amounts shall be so 
     available.
       ``(3) Grant amount.--
       ``(A) In general.--For each year referred to in subsection 
     (b)(1), the Director shall make a grant from amounts in the 
     affordable housing fund to each grantee in an amount that is, 
     except as provided in subparagraph (B), equal to the formula 
     amount under this section for the grantee. A grantee may 
     designate a State housing finance agency, housing and 
     community development entity, tribally designated housing 
     entity (as such term is defined in section 4 of the Native 
     American Housing Assistance and Self-Determination Act of 
     1997 (25 U.S.C. 4103)) or other qualified instrumentality of 
     the grantee to receive such grant amounts.
       ``(B) Reduction for failure to obtain return of misused 
     funds.--If in any year a grantee fails to obtain 
     reimbursement or return of the full amount required under 
     subsection (j)(1)(B) to be reimbursed or returned to the 
     grantee during such year--
       ``(i) except as provided in clause (ii)--

       ``(I) the amount of the grant for the grantee for the 
     succeeding year, as determined pursuant to subparagraph (A), 
     shall be reduced by the amount by which such amounts required 
     to be reimbursed or returned exceed the amount actually 
     reimbursed or returned; and
       ``(II) the amount of the grant for the succeeding year for 
     each other grantee whose grant is not reduced pursuant to 
     subclause (I) shall be increased by the amount determined by 
     applying the formula established pursuant to subsection 
     (c)(2) to the total amount of all reductions for all grantees 
     for such year pursuant to subclause (I); or

       ``(ii) in any case in which such failure to obtain 
     reimbursement or return occurs during a year immediately 
     preceding a year in which grants under this subsection will 
     not be made, the grantee shall pay to the Director for 
     reallocation among the other grantees an amount equal to the 
     amount of the reduction for the grantee that would otherwise 
     apply under clause (i)(I).
       ``(e) Grantee Allocation Plans.--
       ``(1) In general.--For each year that a grantee receives 
     affordable housing fund grant amounts, the grantee shall 
     establish an allocation plan in accordance with this 
     subsection, which shall be a plan for the distribution of 
     such grant amounts of the grantee for such year that--
       ``(A) is based on priority housing needs, as determined by 
     the grantee in accordance with the regulations established 
     under subsection (m)(2)(C);
       ``(B) complies with subsection (f); and
       ``(C) includes performance goals, benchmarks, and 
     timetables for the grantee for the production, preservation, 
     and rehabilitation of affordable rental and homeownership 
     housing with such grant amounts that comply with the 
     requirements established by the Director pursuant to 
     subsection (m)(2)(F).
       ``(2) Establishment.--In establishing an allocation plan, a 
     grantee shall notify the public of the establishment of the 
     plan, provide an opportunity for public comments regarding 
     the plan, consider any public comments received, and make the 
     completed plan available to the public.
       ``(3) Contents.--An allocation plan of a grantee shall set 
     forth the requirements for eligible recipients under 
     subsection (h) to apply to the grantee to receive assistance 
     from affordable housing fund grant amounts, including a 
     requirement that each such application include--
       ``(A) a description of the eligible activities to be 
     conducted using such assistance; and
       ``(B) a certification by the eligible recipient applying 
     for such assistance that any housing units assisted with such 
     assistance will comply with the requirements under this 
     section.
       ``(f) Selection of Activities Funded Using Affordable 
     Housing Fund Grant Amounts.--Affordable housing fund grant 
     amounts of a grantee may be used, or committed for use, only 
     for activities that--
       ``(1) are eligible under subsection (g) for such use;
       ``(2) comply with the applicable allocation plan under 
     subsection (e) of the grantee; and
       ``(3) are selected for funding by the grantee in accordance 
     with the process and criteria for such selection established 
     pursuant to subsection (m)(2)(C).
       ``(g) Eligible Activities.--Affordable housing fund grant 
     amounts of a grantee shall be eligible for use, or for 
     commitment for use, only for assistance for--
       ``(1) the production, preservation, and rehabilitation of 
     rental housing, including housing under the programs 
     identified in section 1335(a)(2)(B), except that such grant

[[Page 5128]]

     amounts may be used for the benefit only of extremely low- 
     and very low-income families;
       ``(2) the production, preservation, and rehabilitation of 
     housing for homeownership, including such forms as 
     downpayment assistance, closing cost assistance, and 
     assistance for interest-rate buy-downs, that--
       ``(A) is available for purchase only for use as a principal 
     residence by families that qualify both as--
       ``(i) extremely low- and very-low income families at the 
     times described in subparagraphs (A) through (C) of section 
     215(b)(2) of the Cranston-Gonzalez National Affordable 
     Housing Act (42 U.S.C. 12745(b)(2)); and
       ``(ii) first-time homebuyers, as such term is defined in 
     section 104 of the Cranston-Gonzalez National Affordable 
     Housing Act (42 U.S.C. 12704), except that any reference in 
     such section to assistance under title II of such Act shall 
     for purposes of this section be considered to refer to 
     assistance from affordable housing fund grant amounts;
       ``(B) has an initial purchase price that meets the 
     requirements of section 215(b)(1) of the Cranston-Gonzalez 
     National Affordable Housing Act;
       ``(C) is subject to the same resale restrictions 
     established under section 215(b)(3) of the Cranston-Gonzalez 
     National Affordable Housing Act and applicable to the 
     participating jurisdiction that is the State in which such 
     housing is located; and
       ``(D) is made available for purchase only by, or in the 
     case of assistance under this paragraph, is made available 
     only to, homebuyers who have, before purchase--
       ``(i) completed a program of counseling with respect to the 
     responsibilities and financial management involved in 
     homeownership that is approved by the Director; except that 
     the Director may, at the request of a State, waive the 
     requirements of this subparagraph with respect to a 
     geographic area or areas within the State if: (I) the travel 
     time or distance involved in providing counseling with 
     respect to such area or areas, as otherwise required under 
     this subparagraph, on an in-person basis is excessive or the 
     cost of such travel is prohibitive; and (II) the State 
     provides alternative forms of counseling for such area or 
     areas, which may include interactive telephone counseling, 
     on-line counseling, interactive video counseling, and 
     interactive home study counseling and a program of financial 
     literacy and education to promote an understanding of 
     consumer, economic, and personal finance issues and concepts, 
     including saving for retirement, managing credit, long-term 
     care, and estate planning and education on predatory lending, 
     identity theft, and financial abuse schemes relating to 
     homeownership that is approved by the Director, except that 
     entities providing such counseling shall not discriminate 
     against any particular form of housing; and
       ``(ii) demonstrated, in accordance with regulations as the 
     Director shall issue setting forth requirements for 
     sufficient evidence, that they are lawfully present in the 
     United States; and
       ``(3) public infrastructure development activities in 
     connection with housing activities funded under paragraph (1) 
     or (2).
       ``(h) Eligible Recipients.--Affordable housing fund grant 
     amounts of a grantee may be provided only to a recipient that 
     is an organization, agency, or other entity (including a for-
     profit entity, a nonprofit entity, and a faith-based 
     organization) that--
       ``(1) has demonstrated experience and capacity to conduct 
     an eligible activity under (g), as evidenced by its ability 
     to--
       ``(A) own, construct or rehabilitate, manage, and operate 
     an affordable multifamily rental housing development;
       ``(B) design, construct or rehabilitate, and market 
     affordable housing for homeownership;
       ``(C) provide forms of assistance, such as downpayments, 
     closing costs, or interest-rate buy-downs, for purchasers; or
       ``(D) construct related public infrastructure development 
     activities in connection with such housing activities;
       ``(2) demonstrates the ability and financial capacity to 
     undertake, comply, and manage the eligible activity;
       ``(3) demonstrates its familiarly with the requirements of 
     any other Federal, State or local housing program that will 
     be used in conjunction with such grant amounts to ensure 
     compliance with all applicable requirements and regulations 
     of such programs; and
       ``(4) makes such assurances to the grantee as the Director 
     shall, by regulation, require to ensure that the recipient 
     will comply with the requirements of this section during the 
     entire period that begins upon selection of the recipient to 
     receive such grant amounts and ending upon the conclusion of 
     all activities under subsection (g) that are engaged in by 
     the recipient and funded with such grant amounts.
       ``(i) Limitations on Use.--
       ``(1) Required amount for refcorp.--Of the aggregate amount 
     allocated pursuant to subsection (b) in each year to the 
     affordable housing fund, 25 percent shall be used as provided 
     in section 21B(f)(2)(E) of the Federal Home Loan Bank Act (12 
     U.S.C. 1441b(f)(2)(E)).
       ``(2) Required amount for homeownership activities.--Of the 
     aggregate amount of affordable housing fund grant amounts 
     provided in each year to a grantee, not less than 10 percent 
     shall be used for activities under paragraph (2) of 
     subsection (g).
       ``(3) Maximum amount for public infrastructure development 
     activities in connection with affordable housing 
     activities.--Of the aggregate amount of affordable housing 
     fund grant amounts provided in each year to a grantee, not 
     more than 12.5 percent may be used for activities under 
     paragraph (3) of subsection (g).
       ``(4) Deadline for commitment or use.--Any affordable 
     housing fund grant amounts of a grantee shall be used or 
     committed for use within two years of the date of that such 
     grant amounts are made available to the grantee. The Director 
     shall recapture into the affordable housing fund any such 
     amounts not so used or committed for use and allocate such 
     amounts under subsection (d)(1) in the first year after such 
     recapture.
       ``(5) Use of returns.--The Director shall, by regulation 
     provide that any return on a loan or other investment of any 
     affordable housing fund grant amounts of a grantee shall be 
     treated, for purposes of availability to and use by the 
     grantee, as affordable housing fund grant amounts.
       ``(6) Prohibited uses.--The Director shall--
       ``(A) by regulation, set forth prohibited uses of 
     affordable housing fund grant amounts, which shall include 
     use for--
       ``(i) political activities;
       ``(ii) advocacy;
       ``(iii) lobbying, whether directly or through other 
     parties;
       ``(iv) counseling services;
       ``(v) travel expenses; and
       ``(vi) preparing or providing advice on tax returns;
       ``(B) by regulation, provide that, except as provided in 
     subparagraph (C), affordable housing fund grant amounts of a 
     grantee may not be used for administrative, outreach, or 
     other costs of--
       ``(i) the grantee; or
       ``(ii) any recipient of such grant amounts; and
       ``(C) by regulation, limit the amount of any affordable 
     housing fund grant amounts of the grantee for a year that may 
     be used for administrative costs of the grantee of carrying 
     out the program required under this section to a percentage 
     of such grant amounts of the grantee for such year, which may 
     not exceed 10 percent.
       ``(7) Prohibition of consideration of use for meeting 
     housing goals or duty to serve.--In determining compliance 
     with the housing goals under this subpart and the duty to 
     serve underserved markets under section 1335, the Director 
     may not consider any affordable housing fund grant amounts 
     used under this section for eligible activities under 
     subsection (g). The Director shall give credit toward the 
     achievement of such housing goals and such duty to serve 
     underserved markets to purchases by the enterprises of 
     mortgages for housing that receives funding from affordable 
     housing fund grant amounts, but only to the extent that such 
     purchases by the enterprises are funded other than with such 
     grant amounts.
       ``(8) Acceptable identification requirement for occupancy 
     or assistance.--
       ``(A) In general.--Any assistance provided with any 
     affordable housing grant amounts may not be made available 
     to, or on behalf of, any individual or household unless the 
     individual provides, or, in the case of a household, all 
     adult members of the household provide, personal 
     identification in one of the following forms:
       ``(i) Social security card with photo identification card 
     or real id act identification.--

       ``(I) A social security card accompanied by a photo 
     identification card issued by the Federal Government or a 
     State Government; or
       ``(II) A driver's license or identification card issued by 
     a State in the case of a State that is in compliance with 
     title II of the REAL ID Act of 2005 (title II of division B 
     of Public Law 109-13; 49 U.S.C. 30301 note).

       ``(ii) Passport.--A passport issued by the United States or 
     a foreign government.
       ``(iii) USCIS photo identification card.--A photo 
     identification card issued by the Secretary of Homeland 
     Security (acting through the Director of the United States 
     Citizenship and Immigration Services).
       ``(B) Regulations.--The Director shall, by regulation, 
     require that each grantee and recipient take such actions as 
     the Director considers necessary to ensure compliance with 
     the requirements of subparagraph (A).
       ``(j) Accountability of Recipients and Grantees.--
       ``(1) Recipients.--
       ``(A) Tracking of funds.--The Director shall--
       ``(i) require each grantee to develop and maintain a system 
     to ensure that each recipient of assistance from affordable 
     housing fund grant amounts of the grantee uses such amounts 
     in accordance with this section, the regulations issued under 
     this section, and any requirements or conditions under which 
     such amounts were provided; and
       ``(ii) establish minimum requirements for agreements, 
     between the grantee and recipients, regarding assistance from 
     the affordable housing fund grant amounts of the grantee, 
     which shall include--

       ``(I) appropriate continuing financial and project 
     reporting, record retention, and

[[Page 5129]]

     audit requirements for the duration of the grant to the 
     recipient to ensure compliance with the limitations and 
     requirements of this section and the regulations under this 
     section; and
       ``(II) any other requirements that the Director determines 
     are necessary to ensure appropriate grant administration and 
     compliance.

       ``(B) Misuse of funds.--
       ``(i) Reimbursement requirement.--If any recipient of 
     assistance from affordable housing fund grant amounts of a 
     grantee is determined, in accordance with clause (ii), to 
     have used any such amounts in a manner that is materially in 
     violation of this section, the regulations issued under this 
     section, or any requirements or conditions under which such 
     amounts were provided, the grantee shall require that, within 
     12 months after the determination of such misuse, the 
     recipient shall reimburse the grantee for such misused 
     amounts and return to the grantee any amounts from the 
     affordable housing fund grant amounts of the grantee that 
     remain unused or uncommitted for use. The remedies under this 
     clause are in addition to any other remedies that may be 
     available under law.
       ``(ii) Determination.--A determination is made in 
     accordance with this clause if the determination is--

       ``(I) made by the Director; or
       ``(II)(aa) made by the grantee;
       ``(bb) the grantee provides notification of the 
     determination to the Director for review, in the discretion 
     of the Director, of the determination; and
       ``(cc) the Director does not subsequently reverse the 
     determination.

       ``(2) Grantees.--
       ``(A) Report.--
       ``(i) In general.--The Director shall require each grantee 
     receiving affordable housing fund grant amounts for a year to 
     submit a report, for such year, to the Director that--

       ``(I) describes the activities funded under this section 
     during such year with the affordable housing fund grant 
     amounts of the grantee; and
       ``(II) the manner in which the grantee complied during such 
     year with the allocation plan established pursuant to 
     subsection (e) for the grantee.

       ``(ii) Public availability.--The Director shall make such 
     reports pursuant to this subparagraph publicly available.
       ``(B) Misuse of funds.--If the Director determines, after 
     reasonable notice and opportunity for hearing, that a grantee 
     has failed to comply substantially with any provision of this 
     section and until the Director is satisfied that there is no 
     longer any such failure to comply, the Director shall--
       ``(i) reduce the amount of assistance under this section to 
     the grantee by an amount equal to the amount affordable 
     housing fund grant amounts which were not used in accordance 
     with this section;
       ``(ii) require the grantee to repay the Director an amount 
     equal to the amount of the amount affordable housing fund 
     grant amounts which were not used in accordance with this 
     section;
       ``(iii) limit the availability of assistance under this 
     section to the grantee to activities or recipients not 
     affected by such failure to comply; or
       ``(iv) terminate any assistance under this section to the 
     grantee.
       ``(k) Capital Requirements.--The utilization or commitment 
     of amounts from the affordable housing fund shall not be 
     subject to the risk-based capital requirements established 
     pursuant to section 1361(a).
       ``(l) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       ``(1) Affordable housing fund grant amounts.--The term 
     `affordable housing fund grant amounts' means amounts from 
     the affordable housing fund established under subsection (a) 
     that are provided to a grantee pursuant to subsection (d)(3).
       ``(2) Grantee.--The term `grantee' means--
       ``(A) with respect to 2007, the Louisiana Housing Finance 
     Agency and the Mississippi Development Authority; and
       ``(B) with respect to the years referred to in subsection 
     (b)(1), other than 2007, each State (as such term is defined 
     in section 1303) and each federally recognized Indian tribe.
       ``(3) Recipient.--The term `recipient' means an entity 
     meeting the requirements under subsection (h) that receives 
     assistance from a grantee from affordable housing fund grant 
     amounts of the grantee.
       ``(4) Total mortgage portfolio.--The term `total mortgage 
     portfolio' means, with respect to a year, the sum, for all 
     mortgages outstanding during that year in any form, including 
     whole loans, mortgage-backed securities, participation 
     certificates, or other structured securities backed by 
     mortgages, of the dollar amount of the unpaid outstanding 
     principal balances under such mortgages. Such term includes 
     all such mortgages or securitized obligations, whether 
     retained in portfolio, or sold in any form. The Director is 
     authorized to promulgate rules further defining such term as 
     necessary to implement this section and to address market 
     developments.
       ``(5) Very-low income family.--The term `very low-income 
     family' has the meaning given such term in section 1303, 
     except that such term includes any family that resides in a 
     rural area that has an income that does not exceed the 
     poverty line (as such term is defined in section 673(2) of 
     the Omnibus Budget Reconciliation Act of 1981 (42 U.S.C. 
     9902(2)), including any revision required by such section) 
     applicable to a family of the size involved.
       ``(m) Regulations.--
       ``(1) In general.--The Director, in consultation with the 
     Secretary of Housing and Urban Development, shall issue 
     regulations to carry out this section.
       ``(2) Required contents.--The regulations issued under this 
     subsection shall include--
       ``(A) a requirement that the Director ensure that the 
     program of each grantee for use of affordable housing fund 
     grant amounts of the grantee is audited not less than 
     annually to ensure compliance with this section;
       ``(B) authority for the Director to audit, provide for an 
     audit, or otherwise verify a grantee's activities, to ensure 
     compliance with this section;
       ``(C) requirements for a process for application to, and 
     selection by, each grantee for activities meeting the 
     grantee's priority housing needs to be funded with affordable 
     housing fund grant amounts of the grantee, which shall 
     provide for priority in funding to be based upon--
       ``(i) greatest impact;
       ``(ii) geographic diversity;
       ``(iii) ability to obligate amounts and undertake 
     activities so funded in a timely manner;
       ``(iv) in the case of rental housing projects under 
     subsection (g)(1), the extent to which rents for units in the 
     project funded are affordable, especially for extremely low-
     income families;
       ``(v) in the case of rental housing projects under 
     subsection (g)(1), the extent of the duration for which such 
     rents will remain affordable;
       ``(vi) the extent to which the application makes use of 
     other funding sources; and
       ``(vii) the merits of an applicant's proposed eligible 
     activity;
       ``(D) requirements to ensure that amounts provided to a 
     grantee from the affordable housing fund that are used for 
     rental housing under subsection (g)(1) are used only for the 
     benefit of extremely low- and very-low income families;
       ``(E) limitations on public infrastructure development 
     activities that are eligible pursuant to subsection (g)(3) 
     for funding with affordable housing fund grant amounts and 
     requirements for the connection between such activities and 
     housing activities funded under paragraph (1) or (2) of 
     subsection (g); and
       ``(F) requirements and standards for establishment, by 
     grantees (including the grantees for 2007 pursuant to 
     subsection (l)(2)(A)), of performance goals, benchmarks, and 
     timetables for the production, preservation, and 
     rehabilitation of affordable rental and homeownership housing 
     with affordable housing fund grant amounts.
       ``(n) Enforcement of Requirements on Enterprise.--
     Compliance by the enterprises with the requirements under 
     this section shall be enforceable under subpart C. Any 
     reference in such subpart to this part or to an order, rule, 
     or regulation under this part specifically includes this 
     section and any order, rule, or regulation under this 
     section.
       ``(o) Affordable Housing Trust Fund.--If, after the 
     enactment of this Act, in any year, there is enacted any 
     provision of Federal law establishing an affordable housing 
     trust fund other than under this title for use only for 
     grants to provide affordable rental housing and affordable 
     homeownership opportunities, and the subsequent year is a 
     year referred to in subsection (b)(1), the Director shall in 
     such subsequent year and any remaining years referred to in 
     subsection (b)(1) transfer to such affordable housing trust 
     fund the aggregate amount allocated pursuant to subsection 
     (b) in such year to the affordable housing fund under this 
     section, less any amounts used pursuant to subsection (i)(1). 
     For such subsequent and remaining years, the provisions of 
     subsections (c) and (d) shall not apply. Notwithstanding any 
     other provision of law, assistance provided using amounts 
     transferred to such affordable housing trust fund pursuant to 
     this subsection may not be used for any of the activities 
     specified in clauses (i) through (vi) of subsection (i)(6). 
     Nothing in this subsection shall be construed to alter the 
     terms and conditions of the affordable housing fund under 
     this section or to extend the life of such fund.
       ``(p) Funding Accountability and Transparency.--Any grant 
     under this section to a grantee from the affordable housing 
     fund established under subsection (a), any assistance 
     provided to a recipient by a grantee from affordable housing 
     fund grant amounts, and any grant, award, or other assistance 
     from an affordable housing trust fund referred to in 
     subsection (o) shall be considered a Federal award for 
     purposes of the Federal Funding Accountability and 
     Transparency Act of 2006 (31 U.S.C. 6101 note). Upon the 
     request of the Director of the Office of Management and 
     Budget, the Director of the Federal Housing Finance Agency 
     shall obtain and provide such information regarding any such 
     grants, assistance, and awards as the Director of the Office 
     of Management and Budget considers necessary to comply with 
     the requirements of such Act, as applicable pursuant to the 
     preceding sentence.''.

[[Page 5130]]

       (b) Timely Establishment of Affordable Housing Needs 
     Formula.--
       (1) In general.--The Secretary of Housing and Urban 
     Development shall, not later than the effective date under 
     section 185 of this Division, issue the regulations 
     establishing the affordable housing needs formulas in 
     accordance with the provisions of section 1337(c)(2) of the 
     Housing and Community Development Act of 1992, as such 
     section is amended by subsection (a) of this section.
       (2) Effective date.--This subsection shall take effect on 
     the date of the enactment of this Act.
       (c) REFCORP Payments.--Section 21B(f)(2) of the Federal 
     Home Loan Bank Act (12 U.S.C. 1441b(f)(2)) is amended--
       (1) in subparagraph (E), by striking ``and (D)'' and 
     inserting ``(D), and (E)'';
       (2) by redesignating subparagraph (E) as subparagraph (F); 
     and
       (3) by inserting after subparagraph (D) the following new 
     subparagraph:
       ``(E) Payments by fannie mae and freddie mac.--To the 
     extent that the amounts available pursuant to subparagraphs 
     (A), (B), (C), and (D) are insufficient to cover the amount 
     of interest payments, each enterprise (as such term is 
     defined in section 1303 of the Housing and Community 
     Development Act of 1992 (42 U.S.C. 4502)) shall transfer to 
     the Funding Corporation in each calendar year the amounts 
     allocated for use under this subparagraph pursuant to section 
     1337(i)(1) of such Act.''.
       (d) GAO Report.--The Comptroller General shall conduct a 
     study to determine the effects that the affordable housing 
     fund established under section 1337 of the Housing and 
     Community Development Act of 1992, as added by the amendment 
     made by subsection (a) of this section, will have on the 
     availability and affordability of credit for homebuyers, 
     including the effects on such credit of the requirement under 
     such section 1337(b) that the Federal National Mortgage 
     Association and Federal Home Loan Mortgage Corporation make 
     allocations of amounts to such fund based on the average 
     total mortgage portfolios, and the extent to which the costs 
     of such allocation requirement will be borne by such entities 
     or will be passed on to homebuyers. Not later than the 
     expiration of the 12-month period beginning on the date of 
     the enactment of this Act, the Comptroller General shall 
     submit a report to the Congress setting forth the results and 
     conclusions of such study. This subsection shall take effect 
     on the date of the enactment of this Act.

     SEC. 141. CONSISTENCY WITH MISSION.

       Subpart B of part 2 of subtitle A of title XIII of the 
     Housing and Community Development Act of 1992 (12 U.S.C. 4561 
     et seq.) is amended by adding after section 1337, as added by 
     section 139 of this Division, the following new section:

     ``SEC. 1338. CONSISTENCY WITH MISSION.

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

     SEC. 142. ENFORCEMENT.

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

                      ``Subpart C--Enforcement''.

     SEC. 143. CONFORMING AMENDMENTS.

       Part 2 of subtitle A of title XIII of the Housing and 
     Community Development Act of 1992 (12 U.S.C. 4541 et seq.) is 
     amended--
       (1) by striking ``Secretary'' each place such term appears 
     in such part and inserting ``Director'';
       (2) in the section heading for section 1323 (12 U.S.C. 
     4543), by inserting ``OF ENTERPRISES'' before the period at 
     the end;
       (3) by striking section 1327 (12 U.S.C. 4547);
       (4) by striking section 1328 (12 U.S.C. 4548);
       (5) by redesignating section 1329 (as amended by section 
     135) as section 1327;
       (6) in sections 1345(c)(1)(A), 1346(a), and 1346(b) (12 
     U.S.C. 4585(c)(1)(A), 4586(a), and 4586(b)), by striking 
     ``Secretary's'' each place such term appears and inserting 
     ``Director's''; and
       (7) by striking section 1349 (12 U.S.C. 4589).

                  Subtitle C--Prompt Corrective Action

     SEC. 151. CAPITAL CLASSIFICATIONS.

       (a) In General.--Section 1364 of the Housing and Community 
     Development Act of 1992 (12 U.S.C. 4614) is amended--

[[Page 5131]]

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

     SEC. 152. SUPERVISORY ACTIONS APPLICABLE TO UNDERCAPITALIZED 
                   REGULATED ENTITIES.

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

     SEC. 153. SUPERVISORY ACTIONS APPLICABLE TO SIGNIFICANTLY 
                   UNDERCAPITALIZED REGULATED ENTITIES.

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

[[Page 5132]]

       ``(2) provide compensation to any executive officer at a 
     rate exceeding that officer's average rate of compensation 
     (excluding bonuses, stock options, and profit sharing) during 
     the 12 calendar months preceding the calendar month in which 
     the regulated entity became undercapitalized.''.

     SEC. 154. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED 
                   REGULATED ENTITIES.

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

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

       ``(a) Appointment of Agency as Conservator or Receiver.--
       ``(1) In general.--Notwithstanding any other provision of 
     Federal or State law, if any of the grounds under paragraph 
     (3) exist, at the discretion of the Director, the Director 
     may establish a conservatorship or receivership, as 
     appropriate, for the purpose of reorganizing, rehabilitating, 
     or winding up the affairs of a regulated entity.
       ``(2) Appointment.--In any conservatorship or receivership 
     established under this section, the Director shall appoint 
     the Agency as conservator or receiver.
       ``(3) Grounds for appointment.--The grounds for appointing 
     a conservator or receiver for a regulated entity are as 
     follows:
       ``(A) Assets insufficient for obligations.--The assets of 
     the regulated entity are less than the obligations of the 
     regulated entity to its creditors and others.
       ``(B) Substantial dissipation.--Substantial dissipation of 
     assets or earnings due to--
       ``(i) any violation of any provision of Federal or State 
     law; or
       ``(ii) any unsafe or unsound practice.
       ``(C) Unsafe or unsound condition.--An unsafe or unsound 
     condition to transact business.
       ``(D) Cease-and-desist orders.--Any willful violation of a 
     cease-and-desist order that has become final.
       ``(E) Concealment.--Any concealment of the books, papers, 
     records, or assets of the regulated entity, or any refusal to 
     submit the books, papers, records, or affairs of the 
     regulated entity, for inspection to any examiner or to any 
     lawful agent of the Director.
       ``(F) Inability to meet obligations.--The regulated entity 
     is likely to be unable to pay its obligations or meet the 
     demands of its creditors in the normal course of business.
       ``(G) Losses.--The regulated entity has incurred or is 
     likely to incur losses that will deplete all or substantially 
     all of its capital, and there is no reasonable prospect for 
     the regulated entity to become adequately capitalized (as 
     defined in section 1364(a)(1)).
       ``(H) Violations of law.--Any violation of any law or 
     regulation, or any unsafe or unsound practice or condition 
     that is likely to--
       ``(i) cause insolvency or substantial dissipation of assets 
     or earnings; or
       ``(ii) weaken the condition of the regulated entity.
       ``(I) Consent.--The regulated entity, by resolution of its 
     board of directors or its shareholders or members, consents 
     to the appointment.
       ``(J) Undercapitalization.--The regulated entity is 
     undercapitalized or significantly undercapitalized (as 
     defined in section 1364(a)(3) or in regulations issued 
     pursuant to section 1364(b), as applicable), and--
       ``(i) has no reasonable prospect of becoming adequately 
     capitalized;
       ``(ii) fails to become adequately capitalized, as required 
     by--

       ``(I) section 1365(a)(1) with respect to an 
     undercapitalized regulated entity; or
       ``(II) section 1366(a)(1) with respect to a significantly 
     undercapitalized regulated entity;

       ``(iii) fails to submit a capital restoration plan 
     acceptable to the Agency within the time prescribed under 
     section 1369C; or
       ``(iv) materially fails to implement a capital restoration 
     plan submitted and accepted under section 1369C.
       ``(K) Critical undercapitalization.--The regulated entity 
     is critically undercapitalized, as defined in section 
     1364(a)(4) or in regulations issued pursuant to section 
     1364(b), as applicable.
       ``(L) Money laundering.--The Attorney General notifies the 
     Director in writing that the regulated entity has been found 
     guilty of a criminal offense under section 1956 or 1957 of 
     title 18, United States Code, or section 5322 or 5324 of 
     title 31, United States Code.
       ``(4) Mandatory receivership.--
       ``(A) In general.--The Director shall appoint the Agency as 
     receiver for a regulated entity if the Director determines, 
     in writing, that--
       ``(i) the assets of the regulated entity are, and during 
     the preceding 30 calendar days have been, less than the 
     obligations of the regulated entity to its creditors and 
     others; or
       ``(ii) the regulated entity is not, and during the 
     preceding 30 calendar days has not been, generally paying the 
     debts of the regulated entity (other than debts that are the 
     subject of a bona fide dispute) as such debts become due.
       ``(B) Periodic determination required for critically under 
     capitalized regulated entity.--If a regulated entity is 
     critically undercapitalized, the Director shall make a 
     determination, in writing, as to whether the regulated entity 
     meets the criteria specified in clause (i) or (ii) of 
     subparagraph (A)--
       ``(i) not later than 30 calendar days after the regulated 
     entity initially becomes critically undercapitalized; and
       ``(ii) at least once during each succeeding 30-calendar day 
     period.
       ``(C) Determination not required if receivership already in 
     place.--Subparagraph (B) shall not apply with respect to a 
     regulated entity in any period during which the Agency serves 
     as receiver for the regulated entity.
       ``(D) Receivership terminates conservatorship.--The 
     appointment under this section of the Agency as receiver of a 
     regulated entity shall immediately terminate any 
     conservatorship established under this title for the 
     regulated entity.
       ``(5) Judicial review.--
       ``(A) In general.--If the Agency is appointed conservator 
     or receiver under this section, the regulated entity may, 
     within 30 days of such appointment, bring an action in the 
     United States District Court for the judicial district in 
     which the principal place of business of such regulated 
     entity is located, or in the United States District Court for 
     the District of Columbia, for an order requiring the Agency 
     to remove itself as conservator or receiver.
       ``(B) Review.--Upon the filing of an action under 
     subparagraph (A), the court shall, upon the merits, dismiss 
     such action or direct the Agency to remove itself as such 
     conservator or receiver.
       ``(6) Directors not liable for acquiescing in appointment 
     of conservator or receiver.--The members of the board of 
     directors of a regulated entity shall not be liable to the 
     shareholders or creditors of the regulated entity for 
     acquiescing in or consenting in good faith to the appointment 
     of the Agency as conservator or receiver for that regulated 
     entity.
       ``(7) Agency not subject to any other federal agency.--When 
     acting as conservator or receiver, the Agency shall not be 
     subject to the direction or supervision of any other agency 
     of the United States or any State in the exercise of the 
     rights, powers, and privileges of the Agency.
       ``(b) Powers and Duties of the Agency as Conservator or 
     Receiver.--
       ``(1) Rulemaking authority of the agency.--The Agency may 
     prescribe such regulations as the Agency determines to be 
     appropriate regarding the conduct of conservatorships or 
     receiverships.
       ``(2) General powers.--
       ``(A) Successor to regulated entity.--The Agency shall, as 
     conservator or receiver, and by operation of law, immediately 
     succeed to--
       ``(i) all rights, titles, powers, and privileges of the 
     regulated entity, and of any stockholder, officer, or 
     director of such regulated entity with respect to the 
     regulated entity and the assets of the regulated entity; and
       ``(ii) title to the books, records, and assets of any other 
     legal custodian of such regulated entity.
       ``(B) Operate the regulated entity.--The Agency may, as 
     conservator or receiver--
       ``(i) take over the assets of and operate the regulated 
     entity with all the powers of the shareholders, the 
     directors, and the officers of the regulated entity and 
     conduct all business of the regulated entity;
       ``(ii) collect all obligations and money due the regulated 
     entity;
       ``(iii) perform all functions of the regulated entity in 
     the name of the regulated entity which are consistent with 
     the appointment as conservator or receiver; and
       ``(iv) preserve and conserve the assets and property of 
     such regulated entity.
       ``(C) Functions of officers, directors, and shareholders of 
     a regulated entity.--The Agency may, by regulation or order, 
     provide for the exercise of any function by any stockholder, 
     director, or officer of any regulated entity for which the 
     Agency has been named conservator or receiver.
       ``(D) Powers as conservator.--The Agency may, as 
     conservator, take such action as may be--
       ``(i) necessary to put the regulated entity in a sound and 
     solvent condition; and
       ``(ii) appropriate to carry on the business of the 
     regulated entity and preserve and conserve the assets and 
     property of the regulated entity, including, if two or more 
     Federal home loan banks have been placed in conservatorship 
     contemporaneously, merging two or more such banks into a 
     single Federal home loan bank.
       ``(E) Additional powers as receiver.--The Agency may, as 
     receiver, place the regulated entity in liquidation and 
     proceed to realize upon the assets of the regulated entity, 
     having due regard to the conditions of the housing finance 
     market.
       ``(F) Organization of new regulated entities.--The Agency 
     may, as receiver, organize a successor regulated entity that 
     will operate pursuant to subsection (i).
       ``(G) Transfer of assets and liabilities.--The Agency may, 
     as conservator or receiver, transfer any asset or liability 
     of the regulated entity in default without any approval, 
     assignment, or consent with respect to such transfer. Any 
     Federal home loan bank may, with the approval of the Agency, 
     acquire the assets of any Bank in conservatorship or 
     receivership, and assume the liabilities of such Bank.

[[Page 5133]]

       ``(H) Payment of valid obligations.--The Agency, as 
     conservator or receiver, shall, to the extent of proceeds 
     realized from the performance of contracts or sale of the 
     assets of a regulated entity, pay all valid obligations of 
     the regulated entity in accordance with the prescriptions and 
     limitations of this section.
       ``(I) Subpoena authority.--
       ``(i) In general.--

       ``(I) In general.--The Agency may, as conservator or 
     receiver, and for purposes of carrying out any power, 
     authority, or duty with respect to a regulated entity 
     (including determining any claim against the regulated entity 
     and determining and realizing upon any asset of any person in 
     the course of collecting money due the regulated entity), 
     exercise any power established under section 1348.
       ``(II) Applicability of law.--The provisions of section 
     1348 shall apply with respect to the exercise of any power 
     exercised under this subparagraph in the same manner as such 
     provisions apply under that section.

       ``(ii) Authority of director.--A subpoena or subpoena duces 
     tecum may be issued under clause (i) only by, or with the 
     written approval of, the Director, or the designee of the 
     Director.
       ``(iii) Rule of construction.--This subsection shall not be 
     construed to limit any rights that the Agency, in any 
     capacity, might otherwise have under section 1317 or 1379D.
       ``(J) Contracting for services.--The Agency may, as 
     conservator or receiver, provide by contract for the carrying 
     out of any of its functions, activities, actions, or duties 
     as conservator or receiver.
       ``(K) Incidental powers.--The Agency may, as conservator or 
     receiver--
       ``(i) exercise all powers and authorities specifically 
     granted to conservators or receivers, respectively, under 
     this section, and such incidental powers as shall be 
     necessary to carry out such powers; and
       ``(ii) take any action authorized by this section, which 
     the Agency determines is in the best interests of the 
     regulated entity or the Agency.
       ``(3) Authority of receiver to determine claims.--
       ``(A) In general.--The Agency may, as receiver, determine 
     claims in accordance with the requirements of this subsection 
     and any regulations prescribed under paragraph (4).
       ``(B) Notice requirements.--The receiver, in any case 
     involving the liquidation or winding up of the affairs of a 
     closed regulated entity, shall--
       ``(i) promptly publish a notice to the creditors of the 
     regulated entity to present their claims, together with 
     proof, to the receiver by a date specified in the notice 
     which shall be not less than 90 days after the publication of 
     such notice; and
       ``(ii) republish such notice approximately 1 month and 2 
     months, respectively, after the publication under clause (i).
       ``(C) Mailing required.--The receiver shall mail a notice 
     similar to the notice published under subparagraph (B)(i) at 
     the time of such publication to any creditor shown on the 
     books of the regulated entity--
       ``(i) at the last address of the creditor appearing in such 
     books; or
       ``(ii) upon discovery of the name and address of a claimant 
     not appearing on the books of the regulated entity within 30 
     days after the discovery of such name and address.
       ``(4) Rulemaking authority relating to determination of 
     claims.--Subject to subsection (c), the Director may 
     prescribe regulations regarding the allowance or disallowance 
     of claims by the receiver and providing for administrative 
     determination of claims and review of such determination.
       ``(5) Procedures for determination of claims.--
       ``(A) Determination period.--
       ``(i) In general.--Before the end of the 180-day period 
     beginning on the date on which any claim against a regulated 
     entity is filed with the Agency as receiver, the Agency shall 
     determine whether to allow or disallow the claim and shall 
     notify the claimant of any determination with respect to such 
     claim.
       ``(ii) Extension of time.--The period described in clause 
     (i) may be extended by a written agreement between the 
     claimant and the Agency.
       ``(iii) Mailing of notice sufficient.--The notification 
     requirements of clause (i) shall be deemed to be satisfied if 
     the notice of any determination with respect to any claim is 
     mailed to the last address of the claimant which appears--

       ``(I) on the books of the regulated entity;
       ``(II) in the claim filed by the claimant; or
       ``(III) in documents submitted in proof of the claim.

       ``(iv) Contents of notice of disallowance.--If any claim 
     filed under clause (i) is disallowed, the notice to the 
     claimant shall contain--

       ``(I) a statement of each reason for the disallowance; and
       ``(II) the procedures available for obtaining agency review 
     of the determination to disallow the claim or judicial 
     determination of the claim.

       ``(B) Allowance of proven claim.--The receiver shall allow 
     any claim received on or before the date specified in the 
     notice published under paragraph (3)(B)(i), or the date 
     specified in the notice required under paragraph (3)(C), 
     which is proved to the satisfaction of the receiver.
       ``(C) Disallowance of claims filed after end of filing 
     period.--Claims filed after the date specified in the notice 
     published under paragraph (3)(B)(i), or the date specified 
     under paragraph (3)(C), shall be disallowed and such 
     disallowance shall be final.
       ``(D) Authority to disallow claims.--
       ``(i) In general.--The receiver may disallow any portion of 
     any claim by a creditor or claim of security, preference, or 
     priority which is not proved to the satisfaction of the 
     receiver.
       ``(ii) Payments to less than fully secured creditors.--In 
     the case of a claim of a creditor against a regulated entity 
     which is secured by any property or other asset of such 
     regulated entity, the receiver--

       ``(I) may treat the portion of such claim which exceeds an 
     amount equal to the fair market value of such property or 
     other asset as an unsecured claim against the regulated 
     entity; and
       ``(II) may not make any payment with respect to such 
     unsecured portion of the claim other than in connection with 
     the disposition of all claims of unsecured creditors of the 
     regulated entity.

       ``(iii) Exceptions.--No provision of this paragraph shall 
     apply with respect to any extension of credit from any 
     Federal Reserve Bank, Federal home loan bank, or the Treasury 
     of the United States.
       ``(E) No judicial review of determination pursuant to 
     subparagraph (D).--No court may review the determination of 
     the Agency under subparagraph (D) to disallow a claim. This 
     subparagraph shall not affect the authority of a claimant to 
     obtain de novo judicial review of a claim pursuant to 
     paragraph (6).
       ``(F) Legal effect of filing.--
       ``(i) Statute of limitation tolled.--For purposes of any 
     applicable statute of limitations, the filing of a claim with 
     the receiver shall constitute a commencement of an action.
       ``(ii) No prejudice to other actions.--Subject to paragraph 
     (10), the filing of a claim with the receiver shall not 
     prejudice any right of the claimant to continue any action 
     which was filed before the date of the appointment of the 
     receiver, subject to the determination of claims by the 
     receiver.
       ``(6) Provision for judicial determination of claims.--
       ``(A) In general.--The claimant may file suit on a claim 
     (or continue an action commenced before the appointment of 
     the receiver) in the district or territorial court of the 
     United States for the district within which the principal 
     place of business of the regulated entity is located or the 
     United States District Court for the District of Columbia 
     (and such court shall have jurisdiction to hear such claim), 
     before the end of the 60-day period beginning on the earlier 
     of--
       ``(i) the end of the period described in paragraph 
     (5)(A)(i) with respect to any claim against a regulated 
     entity for which the Agency is receiver; or
       ``(ii) the date of any notice of disallowance of such claim 
     pursuant to paragraph (5)(A)(i).
       ``(B) Statute of limitations.--A claim shall be deemed to 
     be disallowed (other than any portion of such claim which was 
     allowed by the receiver), and such disallowance shall be 
     final, and the claimant shall have no further rights or 
     remedies with respect to such claim, if the claimant fails, 
     before the end of the 60-day period described under 
     subparagraph (A), to file suit on such claim (or continue an 
     action commenced before the appointment of the receiver).
       ``(7) Review of claims.--
       ``(A) Other review procedures.--
       ``(i) In general.--The Agency shall establish such 
     alternative dispute resolution processes as may be 
     appropriate for the resolution of claims filed under 
     paragraph (5)(A)(i).
       ``(ii) Criteria.--In establishing alternative dispute 
     resolution processes, the Agency shall strive for procedures 
     which are expeditious, fair, independent, and low cost.
       ``(iii) Voluntary binding or nonbinding procedures.--The 
     Agency may establish both binding and nonbinding processes, 
     which may be conducted by any government or private party. 
     All parties, including the claimant and the Agency, must 
     agree to the use of the process in a particular case.
       ``(B) Consideration of incentives.--The Agency shall seek 
     to develop incentives for claimants to participate in the 
     alternative dispute resolution process.
       ``(8) Expedited determination of claims.--
       ``(A) Establishment required.--The Agency shall establish a 
     procedure for expedited relief outside of the routine claims 
     process established under paragraph (5) for claimants who--
       ``(i) allege the existence of legally valid and enforceable 
     or perfected security interests in assets of any regulated 
     entity for which the Agency has been appointed receiver; and
       ``(ii) allege that irreparable injury will occur if the 
     routine claims procedure is followed.
       ``(B) Determination period.--Before the end of the 90-day 
     period beginning on the

[[Page 5134]]

     date any claim is filed in accordance with the procedures 
     established under subparagraph (A), the Director shall--
       ``(i) determine--

       ``(I) whether to allow or disallow such claim; or
       ``(II) whether such claim should be determined pursuant to 
     the procedures established under paragraph (5); and

       ``(ii) notify the claimant of the determination, and if the 
     claim is disallowed, provide a statement of each reason for 
     the disallowance and the procedure for obtaining agency 
     review or judicial determination.
       ``(C) Period for filing or renewing suit.--Any claimant who 
     files a request for expedited relief shall be permitted to 
     file a suit, or to continue a suit filed before the 
     appointment of the receiver, seeking a determination of the 
     rights of the claimant with respect to such security interest 
     after the earlier of--
       ``(i) the end of the 90-day period beginning on the date of 
     the filing of a request for expedited relief; or
       ``(ii) the date the Agency denies the claim.
       ``(D) Statute of limitations.--If an action described under 
     subparagraph (C) is not filed, or the motion to renew a 
     previously filed suit is not made, before the end of the 30-
     day period beginning on the date on which such action or 
     motion may be filed under subparagraph (B), the claim shall 
     be deemed to be disallowed as of the end of such period 
     (other than any portion of such claim which was allowed by 
     the receiver), such disallowance shall be final, and the 
     claimant shall have no further rights or remedies with 
     respect to such claim.
       ``(E) Legal effect of filing.--
       ``(i) Statute of limitation tolled.--For purposes of any 
     applicable statute of limitations, the filing of a claim with 
     the receiver shall constitute a commencement of an action.
       ``(ii) No prejudice to other actions.--Subject to paragraph 
     (10), the filing of a claim with the receiver shall not 
     prejudice any right of the claimant to continue any action 
     that was filed before the appointment of the receiver, 
     subject to the determination of claims by the receiver.
       ``(9) Payment of claims.--
       ``(A) In general.--The receiver may, in the discretion of 
     the receiver, and to the extent funds are available from the 
     assets of the regulated entity, pay creditor claims, in such 
     manner and amounts as are authorized under this section, 
     which are--
       ``(i) allowed by the receiver;
       ``(ii) approved by the Agency pursuant to a final 
     determination pursuant to paragraph (7) or (8); or
       ``(iii) determined by the final judgment of any court of 
     competent jurisdiction.
       ``(B) Agreements against the interest of the agency.--No 
     agreement that tends to diminish or defeat the interest of 
     the Agency in any asset acquired by the Agency as receiver 
     under this section shall be valid against the Agency unless 
     such agreement is in writing, and executed by an authorized 
     official of the regulated entity, except that such 
     requirements for qualified financial contracts shall be 
     applied in a manner consistent with reasonable business 
     trading practices in the financial contracts market.
       ``(C) Payment of dividends on claims.--The receiver may, in 
     the sole discretion of the receiver, pay from the assets of 
     the regulated entity dividends on proved claims at any time, 
     and no liability shall attach to the Agency, by reason of any 
     such payment, for failure to pay dividends to a claimant 
     whose claim is not proved at the time of any such payment.
       ``(D) Rulemaking authority of the director.--The Director 
     may prescribe such rules, including definitions of terms, as 
     the Director deems appropriate to establish a single uniform 
     interest rate for, or to make payments of post-insolvency 
     interest to creditors holding proven claims against the 
     receivership estates of regulated entities following 
     satisfaction by the receiver of the principal amount of all 
     creditor claims.
       ``(10) Suspension of legal actions.--
       ``(A) In general.--After the appointment of a conservator 
     or receiver for a regulated entity, the conservator or 
     receiver may, in any judicial action or proceeding to which 
     such regulated entity is or becomes a party, request a stay 
     for a period not to exceed--
       ``(i) 45 days, in the case of any conservator; and
       ``(ii) 90 days, in the case of any receiver.
       ``(B) Grant of stay by all courts required.--Upon receipt 
     of a request by any conservator or receiver under 
     subparagraph (A) for a stay of any judicial action or 
     proceeding in any court with jurisdiction of such action or 
     proceeding, the court shall grant such stay as to all 
     parties.
       ``(11) Additional rights and duties.--
       ``(A) Prior final adjudication.--The Agency shall abide by 
     any final unappealable judgment of any court of competent 
     jurisdiction which was rendered before the appointment of the 
     Agency as conservator or receiver.
       ``(B) Rights and remedies of conservator or receiver.--In 
     the event of any appealable judgment, the Agency as 
     conservator or receiver shall--
       ``(i) have all the rights and remedies available to the 
     regulated entity (before the appointment of such conservator 
     or receiver) and the Agency, including removal to Federal 
     court and all appellate rights; and
       ``(ii) not be required to post any bond in order to pursue 
     such remedies.
       ``(C) No attachment or execution.--No attachment or 
     execution may issue by any court upon assets in the 
     possession of the receiver.
       ``(D) Limitation on judicial review.--Except as otherwise 
     provided in this subsection, no court shall have jurisdiction 
     over--
       ``(i) any claim or action for payment from, or any action 
     seeking a determination of rights with respect to, the assets 
     of any regulated entity for which the Agency has been 
     appointed receiver; or
       ``(ii) any claim relating to any act or omission of such 
     regulated entity or the Agency as receiver.
       ``(E) Disposition of assets.--In exercising any right, 
     power, privilege, or authority as conservator or receiver in 
     connection with any sale or disposition of assets of a 
     regulated entity for which the Agency has been appointed 
     conservator or receiver, the Agency shall conduct its 
     operations in a manner which maintains stability in the 
     housing finance markets and, to the extent consistent with 
     that goal--
       ``(i) maximizes the net present value return from the sale 
     or disposition of such assets;
       ``(ii) minimizes the amount of any loss realized in the 
     resolution of cases; and
       ``(iii) ensures adequate competition and fair and 
     consistent treatment of offerors.
       ``(12) Statute of limitations for actions brought by 
     conservator or receiver.--
       ``(A) In general.--Notwithstanding any provision of any 
     contract, the applicable statute of limitations with regard 
     to any action brought by the Agency as conservator or 
     receiver shall be--
       ``(i) in the case of any contract claim, the longer of--

       ``(I) the 6-year period beginning on the date the claim 
     accrues; or
       ``(II) the period applicable under State law; and

       ``(ii) in the case of any tort claim, the longer of--

       ``(I) the 3-year period beginning on the date the claim 
     accrues; or
       ``(II) the period applicable under State law.

       ``(B) Determination of the date on which a claim accrues.--
     For purposes of subparagraph (A), the date on which the 
     statute of limitations begins to run on any claim described 
     in such subparagraph shall be the later of--
       ``(i) the date of the appointment of the Agency as 
     conservator or receiver; or
       ``(ii) the date on which the cause of action accrues.
       ``(13) Revival of expired state causes of action.--
       ``(A) In general.--In the case of any tort claim described 
     under subparagraph (B) for which the statute of limitations 
     applicable under State law with respect to such claim has 
     expired not more than 5 years before the appointment of the 
     Agency as conservator or receiver, the Agency may bring an 
     action as conservator or receiver on such claim without 
     regard to the expiration of the statute of limitation 
     applicable under State law.
       ``(B) Claims described.--A tort claim referred to under 
     subparagraph (A) is a claim arising from fraud, intentional 
     misconduct resulting in unjust enrichment, or intentional 
     misconduct resulting in substantial loss to the regulated 
     entity.
       ``(14) Accounting and recordkeeping requirements.--
       ``(A) In general.--The Agency as conservator or receiver 
     shall, consistent with the accounting and reporting practices 
     and procedures established by the Agency, maintain a full 
     accounting of each conservatorship and receivership or other 
     disposition of a regulated entity in default.
       ``(B) Annual accounting or report.--With respect to each 
     conservatorship or receivership, the Agency shall make an 
     annual accounting or report available to the Board, the 
     Comptroller General of the United States, the Committee on 
     Banking, Housing, and Urban Affairs of the Senate, and the 
     Committee on Financial Services of the House of 
     Representatives.
       ``(C) Availability of reports.--Any report prepared under 
     subparagraph (B) shall be made available by the Agency upon 
     request to any shareholder of a regulated entity or any 
     member of the public.
       ``(D) Recordkeeping requirement.--After the end of the 6-
     year period beginning on the date that the conservatorship or 
     receivership is terminated by the Director, the Agency may 
     destroy any records of such regulated entity which the 
     Agency, in the discretion of the Agency, determines to be 
     unnecessary unless directed not to do so by a court of 
     competent jurisdiction or governmental agency, or prohibited 
     by law.
       ``(15) Fraudulent transfers.--
       ``(A) In general.--The Agency, as conservator or receiver, 
     may avoid a transfer of any interest of a regulated entity-
     affiliated party, or any person who the conservator or 
     receiver determines is a debtor of the regulated entity, in 
     property, or any obligation incurred by such party or person, 
     that was made within 5 years of the date on which the

[[Page 5135]]

     Agency was appointed conservator or receiver, if such party 
     or person voluntarily or involuntarily made such transfer or 
     incurred such liability with the intent to hinder, delay, or 
     defraud the regulated entity, the Agency, the conservator, or 
     receiver.
       ``(B) Right of recovery.--To the extent a transfer is 
     avoided under subparagraph (A), the conservator or receiver 
     may recover, for the benefit of the regulated entity, the 
     property transferred, or, if a court so orders, the value of 
     such property (at the time of such transfer) from--
       ``(i) the initial transferee of such transfer or the 
     regulated entity-affiliated party or person for whose benefit 
     such transfer was made; or
       ``(ii) any immediate or mediate transferee of any such 
     initial transferee.
       ``(C) Rights of transferee or obligee.--The conservator or 
     receiver may not recover under subparagraph (B) from--
       ``(i) any transferee that takes for value, including 
     satisfaction or securing of a present or antecedent debt, in 
     good faith; or
       ``(ii) any immediate or mediate good faith transferee of 
     such transferee.
       ``(D) Rights under this paragraph.--The rights under this 
     paragraph of the conservator or receiver described under 
     subparagraph (A) shall be superior to any rights of a trustee 
     or any other party (other than any party which is a Federal 
     agency) under title 11, United States Code.
       ``(16) Attachment of assets and other injunctive relief.--
     Subject to paragraph (17), any court of competent 
     jurisdiction may, at the request of the conservator or 
     receiver, issue an order in accordance with Rule 65 of the 
     Federal Rules of Civil Procedure, including an order placing 
     the assets of any person designated by the Agency or such 
     conservator under the control of the court, and appointing a 
     trustee to hold such assets.
       ``(17) Standards of proof.--Rule 65 of the Federal Rules of 
     Civil Procedure shall apply with respect to any proceeding 
     under paragraph (16) without regard to the requirement of 
     such rule that the applicant show that the injury, loss, or 
     damage is irreparable and immediate.
       ``(18) Treatment of claims arising from breach of contracts 
     executed by the receiver or conservator.--
       ``(A) In general.--Notwithstanding any other provision of 
     this subsection, any final and unappealable judgment for 
     monetary damages entered against a receiver or conservator 
     for the breach of an agreement executed or approved in 
     writing by such receiver or conservator after the date of its 
     appointment, shall be paid as an administrative expense of 
     the receiver or conservator.
       ``(B) No limitation of power.--Nothing in this paragraph 
     shall be construed to limit the power of a receiver or 
     conservator to exercise any rights under contract or law, 
     including to terminate, breach, cancel, or otherwise 
     discontinue such agreement.
       ``(19) General exceptions.--
       ``(A) Limitations.--The rights of a conservator or receiver 
     appointed under this section shall be subject to the 
     limitations on the powers of a receiver under sections 402 
     through 407 of the Federal Deposit Insurance Corporation 
     Improvement Act of 1991 (12 U.S.C. 4402 through 4407).
       ``(B) Mortgages held in trust.--
       ``(i) In general.--Any mortgage, pool of mortgages, or 
     interest in a pool of mortgages, held in trust, custodial, or 
     agency capacity by a regulated entity for the benefit of 
     persons other than the regulated entity shall not be 
     available to satisfy the claims of creditors generally.
       ``(ii) Holding of mortgages.--Any mortgage, pool of 
     mortgages, or interest in a pool of mortgages, described 
     under clause (i) shall be held by the conservator or receiver 
     appointed under this section for the beneficial owners of 
     such mortgage, pool of mortgages, or interest in a pool of 
     mortgages in accordance with the terms of the agreement 
     creating such trust, custodial, or other agency arrangement.
       ``(iii) Liability of receiver.--The liability of a receiver 
     appointed under this section for damages shall, in the case 
     of any contingent or unliquidated claim relating to the 
     mortgages held in trust, be estimated in accordance set forth 
     in the regulations of the Director.
       ``(c) Priority of Expenses and Unsecured Claims.--
       ``(1) In general.--Unsecured claims against a regulated 
     entity, or a receiver, that are proven to the satisfaction of 
     the receiver shall have priority in the following order:
       ``(A) Administrative expenses of the receiver.
       ``(B) Any other general or senior liability of the 
     regulated entity and claims of other Federal home loan banks 
     arising from their payment obligations (including joint and 
     several payment obligations).
       ``(C) Any obligation subordinated to general creditors.
       ``(D) Any obligation to shareholders or members arising as 
     a result of their status as shareholder or members.
       ``(2) Creditors similarly situated.--All creditors that are 
     similarly situated under paragraph (1) shall be treated in a 
     similar manner, except that the Agency may make such other 
     payments to creditors necessary to maximize the present value 
     return from the sale or disposition or such regulated 
     entity's assets or to minimize the amount of any loss 
     realized in the resolution of cases so long as all creditors 
     similarly situated receive not less than the amount provided 
     under subsection (e)(2).
       ``(3) Definition.--The term `administrative expenses of the 
     receiver' shall include the actual, necessary costs and 
     expenses incurred by the receiver in preserving the assets of 
     the regulated entity or liquidating or otherwise resolving 
     the affairs of the regulated entity. Such expenses shall 
     include obligations that are incurred by the receiver after 
     appointment as receiver that the Director determines are 
     necessary and appropriate to facilitate the smooth and 
     orderly liquidation or other resolution of the regulated 
     entity.
       ``(d) Provisions Relating to Contracts Entered Into Before 
     Appointment of Conservator or Receiver.--
       ``(1) Authority to repudiate contracts.--In addition to any 
     other rights a conservator or receiver may have, the 
     conservator or receiver for any regulated entity may 
     disaffirm or repudiate any contract or lease--
       ``(A) to which such regulated entity is a party;
       ``(B) the performance of which the conservator or receiver, 
     in its sole discretion, determines to be burdensome; and
       ``(C) the disaffirmance or repudiation of which the 
     conservator or receiver determines, in its sole discretion, 
     will promote the orderly administration of the affairs of the 
     regulated entity.
       ``(2) Timing of repudiation.--The conservator or receiver 
     shall determine whether or not to exercise the rights of 
     repudiation under this subsection within a reasonable period 
     following such appointment.
       ``(3) Claims for damages for repudiation.--
       ``(A) In general.--Except as otherwise provided under 
     subparagraph (C) and paragraphs (4), (5), and (6), the 
     liability of the conservator or receiver for the 
     disaffirmance or repudiation of any contract pursuant to 
     paragraph (1) shall be--
       ``(i) limited to actual direct compensatory damages; and
       ``(ii) determined as of--

       ``(I) the date of the appointment of the conservator or 
     receiver; or
       ``(II) in the case of any contract or agreement referred to 
     in paragraph (8), the date of the disaffirmance or 
     repudiation of such contract or agreement.

       ``(B) No liability for other damages.--For purposes of 
     subparagraph (A), the term `actual direct compensatory 
     damages' shall not include--
       ``(i) punitive or exemplary damages;
       ``(ii) damages for lost profits or opportunity; or
       ``(iii) damages for pain and suffering.
       ``(C) Measure of damages for repudiation of financial 
     contracts.--In the case of any qualified financial contract 
     or agreement to which paragraph (8) applies, compensatory 
     damages shall be--
       ``(i) deemed to include normal and reasonable costs of 
     cover or other reasonable measures of damages utilized in the 
     industries for such contract and agreement claims; and
       ``(ii) paid in accordance with this subsection and 
     subsection (e), except as otherwise specifically provided in 
     this section.
       ``(4) Leases under which the regulated entity is the 
     lessee.--
       ``(A) In general.--If the conservator or receiver 
     disaffirms or repudiates a lease under which the regulated 
     entity was the lessee, the conservator or receiver shall not 
     be liable for any damages (other than damages determined 
     under subparagraph (B)) for the disaffirmance or repudiation 
     of such lease.
       ``(B) Payments of rent.--Notwithstanding subparagraph (A), 
     the lessor under a lease to which that subparagraph applies 
     shall--
       ``(i) be entitled to the contractual rent accruing before 
     the later of the date--

       ``(I) the notice of disaffirmance or repudiation is mailed; 
     or
       ``(II) the disaffirmance or repudiation becomes effective, 
     unless the lessor is in default or breach of the terms of the 
     lease;

       ``(ii) have no claim for damages under any acceleration 
     clause or other penalty provision in the lease; and
       ``(iii) have a claim for any unpaid rent, subject to all 
     appropriate offsets and defenses, due as of the date of the 
     appointment, which shall be paid in accordance with this 
     subsection and subsection (e).
       ``(5) Leases under which the regulated entity is the 
     lessor.--
       ``(A) In general.--If the conservator or receiver 
     repudiates an unexpired written lease of real property of the 
     regulated entity under which the regulated entity is the 
     lessor and the lessee is not, as of the date of such 
     repudiation, in default, the lessee under such lease may 
     either--
       ``(i) treat the lease as terminated by such repudiation; or
       ``(ii) remain in possession of the leasehold interest for 
     the balance of the term of the lease, unless the lessee 
     defaults under the terms of the lease after the date of such 
     repudiation.
       ``(B) Provisions applicable to lessee remaining in 
     possession.--If any lessee under a lease described under 
     subparagraph (A) remains in possession of a leasehold 
     interest under clause (ii) of such subparagraph--
       ``(i) the lessee--

[[Page 5136]]

       ``(I) shall continue to pay the contractual rent pursuant 
     to the terms of the lease after the date of the repudiation 
     of such lease; and
       ``(II) may offset against any rent payment which accrues 
     after the date of the repudiation of the lease, and any 
     damages which accrue after such date due to the 
     nonperformance of any obligation of the regulated entity 
     under the lease after such date; and

       ``(ii) the conservator or receiver shall not be liable to 
     the lessee for any damages arising after such date as a 
     result of the repudiation other than the amount of any offset 
     allowed under clause (i)(II).
       ``(6) Contracts for the sale of real property.--
       ``(A) In general.--If the conservator or receiver 
     repudiates any contract for the sale of real property and the 
     purchaser of such real property under such contract is in 
     possession, and is not, as of the date of such repudiation, 
     in default, such purchaser may either--
       ``(i) treat the contract as terminated by such repudiation; 
     or
       ``(ii) remain in possession of such real property.
       ``(B) Provisions applicable to purchaser remaining in 
     possession.--If any purchaser of real property under any 
     contract described under subparagraph (A) remains in 
     possession of such property under clause (ii) of such 
     subparagraph--
       ``(i) the purchaser--

       ``(I) shall continue to make all payments due under the 
     contract after the date of the repudiation of the contract; 
     and
       ``(II) may offset against any such payments any damages 
     which accrue after such date due to the nonperformance (after 
     such date) of any obligation of the regulated entity under 
     the contract; and

       ``(ii) the conservator or receiver shall--

       ``(I) not be liable to the purchaser for any damages 
     arising after such date as a result of the repudiation other 
     than the amount of any offset allowed under clause (i)(II);
       ``(II) deliver title to the purchaser in accordance with 
     the provisions of the contract; and
       ``(III) have no obligation under the contract other than 
     the performance required under subclause (II).

       ``(C) Assignment and sale allowed.--
       ``(i) In general.--No provision of this paragraph shall be 
     construed as limiting the right of the conservator or 
     receiver to assign the contract described under subparagraph 
     (A), and sell the property subject to the contract and the 
     provisions of this paragraph.
       ``(ii) No liability after assignment and sale.--If an 
     assignment and sale described under clause (i) is 
     consummated, the conservator or receiver shall have no 
     further liability under the contract described under 
     subparagraph (A), or with respect to the real property which 
     was the subject of such contract.
       ``(7) Provisions applicable to service contracts.--
       ``(A) Services performed before appointment.--In the case 
     of any contract for services between any person and any 
     regulated entity for which the Agency has been appointed 
     conservator or receiver, any claim of such person for 
     services performed before the appointment of the conservator 
     or the receiver shall be--
       ``(i) a claim to be paid in accordance with subsections (b) 
     and (e); and
       ``(ii) deemed to have arisen as of the date the conservator 
     or receiver was appointed.
       ``(B) Services performed after appointment and prior to 
     repudiation.--If, in the case of any contract for services 
     described under subparagraph (A), the conservator or receiver 
     accepts performance by the other person before the 
     conservator or receiver makes any determination to exercise 
     the right of repudiation of such contract under this 
     section--
       ``(i) the other party shall be paid under the terms of the 
     contract for the services performed; and
       ``(ii) the amount of such payment shall be treated as an 
     administrative expense of the conservatorship or 
     receivership.
       ``(C) Acceptance of performance no bar to subsequent 
     repudiation.--The acceptance by any conservator or receiver 
     of services referred to under subparagraph (B) in connection 
     with a contract described in such subparagraph shall not 
     affect the right of the conservator or receiver to repudiate 
     such contract under this section at any time after such 
     performance.
       ``(8) Certain qualified financial contracts.--
       ``(A) Rights of parties to contracts.--Subject to 
     paragraphs (9) and (10) and notwithstanding any other 
     provision of this Division, any other Federal law, or the law 
     of any State, no person shall be stayed or prohibited from 
     exercising--
       ``(i) any right such person has to cause the termination, 
     liquidation, or acceleration of any qualified financial 
     contract with a regulated entity that arises upon the 
     appointment of the Agency as receiver for such regulated 
     entity at any time after such appointment;
       ``(ii) any right under any security agreement or 
     arrangement or other credit enhancement relating to one or 
     more qualified financial contracts described in clause (i); 
     or
       ``(iii) any right to offset or net out any termination 
     value, payment amount, or other transfer obligation arising 
     under or in connection with 1 or more contracts and 
     agreements described in clause (i), including any master 
     agreement for such contracts or agreements.
       ``(B) Applicability of other provisions.--Paragraph (10) of 
     subsection (b) shall apply in the case of any judicial action 
     or proceeding brought against any receiver referred to under 
     subparagraph (A), or the regulated entity for which such 
     receiver was appointed, by any party to a contract or 
     agreement described under subparagraph (A)(i) with such 
     regulated entity.
       ``(C) Certain transfers not avoidable.--
       ``(i) In general.--Notwithstanding paragraph (11) or any 
     other Federal or State laws relating to the avoidance of 
     preferential or fraudulent transfers, the Agency, whether 
     acting as such or as conservator or receiver of a regulated 
     entity, may not avoid any transfer of money or other property 
     in connection with any qualified financial contract with a 
     regulated entity.
       ``(ii) Exception for certain transfers.--Clause (i) shall 
     not apply to any transfer of money or other property in 
     connection with any qualified financial contract with a 
     regulated entity if the Agency determines that the transferee 
     had actual intent to hinder, delay, or defraud such regulated 
     entity, the creditors of such regulated entity, or any 
     conservator or receiver appointed for such regulated entity.
       ``(D) Certain contracts and agreements defined.--In this 
     subsection:
       ``(i) Qualified financial contract.--The term `qualified 
     financial contract' means any securities contract, commodity 
     contract, forward contract, repurchase agreement, swap 
     agreement, and any similar agreement that the Agency 
     determines by regulation, resolution, or order to be a 
     qualified financial contract for purposes of this paragraph.
       ``(ii) Securities contract.--The term `securities 
     contract'--

       ``(I) means a contract for the purchase, sale, or loan of a 
     security, a certificate of deposit, a mortgage loan, or any 
     interest in a mortgage loan, a group or index of securities, 
     certificates of deposit, or mortgage loans or interests 
     therein (including any interest therein or based on the value 
     thereof) or any option on any of the foregoing, including any 
     option to purchase or sell any such security, certificate of 
     deposit, mortgage loan, interest, group or index, or option, 
     and including any repurchase or reverse repurchase 
     transaction on any such security, certificate of deposit, 
     mortgage loan, interest, group or index, or option;
       ``(II) does not include any purchase, sale, or repurchase 
     obligation under a participation in a commercial mortgage 
     loan unless the Agency determines by regulation, resolution, 
     or order to include any such agreement within the meaning of 
     such term;
       ``(III) means any option entered into on a national 
     securities exchange relating to foreign currencies;
       ``(IV) means the guarantee by or to any securities clearing 
     agency of any settlement of cash, securities, certificates of 
     deposit, mortgage loans or interests therein, group or index 
     of securities, certificates of deposit, or mortgage loans or 
     interests therein (including any interest therein or based on 
     the value thereof) or option on any of the foregoing, 
     including any option to purchase or sell any such security, 
     certificate of deposit, mortgage loan, interest, group or 
     index, or option;
       ``(V) means any margin loan;
       ``(VI) means any other agreement or transaction that is 
     similar to any agreement or transaction referred to in this 
     clause;
       ``(VII) means any combination of the agreements or 
     transactions referred to in this clause;
       ``(VIII) means any option to enter into any agreement or 
     transaction referred to in this clause;
       ``(IX) means a master agreement that provides for an 
     agreement or transaction referred to in subclause (I), (III), 
     (IV), (V), (VI), (VII), or (VIII), together with all 
     supplements to any such master agreement, without regard to 
     whether the master agreement provides for an agreement or 
     transaction that is not a securities contract under this 
     clause, except that the master agreement shall be considered 
     to be a securities contract under this clause only with 
     respect to each agreement or transaction under the master 
     agreement that is referred to in subclause (I), (III), (IV), 
     (V), (VI), (VII), or (VIII); and
       ``(X) means any security agreement or arrangement or other 
     credit enhancement related to any agreement or transaction 
     referred to in this clause, including any guarantee or 
     reimbursement obligation in connection with any agreement or 
     transaction referred to in this clause.

       ``(iii) Commodity contract.--The term `commodity contract' 
     means--

       ``(I) with respect to a futures commission merchant, a 
     contract for the purchase or sale of a commodity for future 
     delivery on, or subject to the rules of, a contract market or 
     board of trade;
       ``(II) with respect to a foreign futures commission 
     merchant, a foreign future;
       ``(III) with respect to a leverage transaction merchant, a 
     leverage transaction;

[[Page 5137]]

       ``(IV) with respect to a clearing organization, a contract 
     for the purchase or sale of a commodity for future delivery 
     on, or subject to the rules of, a contract market or board of 
     trade that is cleared by such clearing organization, or 
     commodity option traded on, or subject to the rules of, a 
     contract market or board of trade that is cleared by such 
     clearing organization;
       ``(V) with respect to a commodity options dealer, a 
     commodity option;
       ``(VI) any other agreement or transaction that is similar 
     to any agreement or transaction referred to in this clause;
       ``(VII) any combination of the agreements or transactions 
     referred to in this clause;
       ``(VIII) any option to enter into any agreement or 
     transaction referred to in this clause;
       ``(IX) a master agreement that provides for an agreement or 
     transaction referred to in subclause (I), (II), (III), (IV), 
     (V), (VI), (VII), or (VIII), together with all supplements to 
     any such master agreement, without regard to whether the 
     master agreement provides for an agreement or transaction 
     that is not a commodity contract under this clause, except 
     that the master agreement shall be considered to be a 
     commodity contract under this clause only with respect to 
     each agreement or transaction under the master agreement that 
     is referred to in subclause (I), (II), (III), (IV), (V), 
     (VI), (VII), or (VIII); or
       ``(X) any security agreement or arrangement or other credit 
     enhancement related to any agreement or transaction referred 
     to in this clause, including any guarantee or reimbursement 
     obligation in connection with any agreement or transaction 
     referred to in this clause.

       ``(iv) Forward contract.--The term `forward contract' 
     means--

       ``(I) a contract (other than a commodity contract) for the 
     purchase, sale, or transfer of a commodity or any similar 
     good, article, service, right, or interest which is presently 
     or in the future becomes the subject of dealing in the 
     forward contract trade, or product or byproduct thereof, with 
     a maturity date more than 2 days after the date the contract 
     is entered into, including, a repurchase transaction, reverse 
     repurchase transaction, consignment, lease, swap, hedge 
     transaction, deposit, loan, option, allocated transaction, 
     unallocated transaction, or any other similar agreement;
       ``(II) any combination of agreements or transactions 
     referred to in subclauses (I) and (III);
       ``(III) any option to enter into any agreement or 
     transaction referred to in subclause (I) or (II);
       ``(IV) a master agreement that provides for an agreement or 
     transaction referred to in subclauses (I), (II), or (III), 
     together with all supplements to any such master agreement, 
     without regard to whether the master agreement provides for 
     an agreement or transaction that is not a forward contract 
     under this clause, except that the master agreement shall be 
     considered to be a forward contract under this clause only 
     with respect to each agreement or transaction under the 
     master agreement that is referred to in subclause (I), (II), 
     or (III); or
       ``(V) any security agreement or arrangement or other credit 
     enhancement related to any agreement or transaction referred 
     to in subclause (I), (II), (III), or (IV), including any 
     guarantee or reimbursement obligation in connection with any 
     agreement or transaction referred to in any such subclause.

       ``(v) Repurchase agreement.--The term `repurchase 
     agreement' (which definition also applies to a reverse 
     repurchase agreement)--

       ``(I) means an agreement, including related terms, which 
     provides for the transfer of one or more certificates of 
     deposit, mortgage-related securities (as such term is defined 
     in the Securities Exchange Act of 1934), mortgage loans, 
     interests in mortgage-related securities or mortgage loans, 
     eligible bankers' acceptances, qualified foreign government 
     securities or securities that are direct obligations of, or 
     that are fully guaranteed by, the United States or any agency 
     of the United States against the transfer of funds by the 
     transferee of such certificates of deposit, eligible bankers' 
     acceptances, securities, mortgage loans, or interests with a 
     simultaneous agreement by such transferee to transfer to the 
     transferor thereof certificates of deposit, eligible bankers' 
     acceptances, securities, mortgage loans, or interests as 
     described above, at a date certain not later than 1 year 
     after such transfers or on demand, against the transfer of 
     funds, or any other similar agreement;
       ``(II) does not include any repurchase obligation under a 
     participation in a commercial mortgage loan unless the Agency 
     determines by regulation, resolution, or order to include any 
     such participation within the meaning of such term;
       ``(III) means any combination of agreements or transactions 
     referred to in subclauses (I) and (IV);
       ``(IV) means any option to enter into any agreement or 
     transaction referred to in subclause (I) or (III);
       ``(V) means a master agreement that provides for an 
     agreement or transaction referred to in subclause (I), (III), 
     or (IV), together with all supplements to any such master 
     agreement, without regard to whether the master agreement 
     provides for an agreement or transaction that is not a 
     repurchase agreement under this clause, except that the 
     master agreement shall be considered to be a repurchase 
     agreement under this subclause only with respect to each 
     agreement or transaction under the master agreement that is 
     referred to in subclause (I), (III), or (IV); and
       ``(VI) means any security agreement or arrangement or other 
     credit enhancement related to any agreement or transaction 
     referred to in subclause (I), (III), (IV), or (V), including 
     any guarantee or reimbursement obligation in connection with 
     any agreement or transaction referred to in any such 
     subclause.

     For purposes of this clause, the term `qualified foreign 
     government security' means a security that is a direct 
     obligation of, or that is fully guaranteed by, the central 
     government of a member of the Organization for Economic 
     Cooperation and Development (as determined by regulation or 
     order adopted by the appropriate Federal banking authority).
       ``(vi) Swap agreement.--The term `swap agreement' means--

       ``(I) any agreement, including the terms and conditions 
     incorporated by reference in any such agreement, which is an 
     interest rate swap, option, future, or forward agreement, 
     including a rate floor, rate cap, rate collar, cross-currency 
     rate swap, and basis swap; a spot, same day-tomorrow, 
     tomorrow-next, forward, or other foreign exchange or precious 
     metals agreement; a currency swap, option, future, or forward 
     agreement; an equity index or equity swap, option, future, or 
     forward agreement; a debt index or debt swap, option, future, 
     or forward agreement; a total return, credit spread or credit 
     swap, option, future, or forward agreement; a commodity index 
     or commodity swap, option, future, or forward agreement; or a 
     weather swap, weather derivative, or weather option;
       ``(II) any agreement or transaction that is similar to any 
     other agreement or transaction referred to in this clause and 
     that is of a type that has been, is presently, or in the 
     future becomes, the subject of recurrent dealings in the swap 
     markets (including terms and conditions incorporated by 
     reference in such agreement) and that is a forward, swap, 
     future, or option on one or more rates, currencies, 
     commodities, equity securities or other equity instruments, 
     debt securities or other debt instruments, quantitative 
     measures associated with an occurrence, extent of an 
     occurrence, or contingency associated with a financial, 
     commercial, or economic consequence, or economic or financial 
     indices or measures of economic or financial risk or value;
       ``(III) any combination of agreements or transactions 
     referred to in this clause;
       ``(IV) any option to enter into any agreement or 
     transaction referred to in this clause;
       ``(V) a master agreement that provides for an agreement or 
     transaction referred to in subclause (I), (II), (III), or 
     (IV), together with all supplements to any such master 
     agreement, without regard to whether the master agreement 
     contains an agreement or transaction that is not a swap 
     agreement under this clause, except that the master agreement 
     shall be considered to be a swap agreement under this clause 
     only with respect to each agreement or transaction under the 
     master agreement that is referred to in subclause (I), (II), 
     (III), or (IV); and
       ``(VI) any security agreement or arrangement or other 
     credit enhancement related to any agreements or transactions 
     referred to in subclause (I), (II), (III), (IV), or (V), 
     including any guarantee or reimbursement obligation in 
     connection with any agreement or transaction referred to in 
     any such subclause.

     Such term is applicable for purposes of this subsection only 
     and shall not be construed or applied so as to challenge or 
     affect the characterization, definition, or treatment of any 
     swap agreement under any other statute, regulation, or rule, 
     including the Securities Act of 1933, the Securities Exchange 
     Act of 1934, the Public Utility Holding Company Act of 1935, 
     the Trust Indenture Act of 1939, the Investment Company Act 
     of 1940, the Investment Advisers Act of 1940, the Securities 
     Investor Protection Act of 1970, the Commodity Exchange Act, 
     the Gramm-Leach-Bliley Act, and the Legal Certainty for Bank 
     Products Act of 2000.
       ``(vii) Treatment of master agreement as one agreement.--
     Any master agreement for any contract or agreement described 
     in any preceding clause of this subparagraph (or any master 
     agreement for such master agreement or agreements), together 
     with all supplements to such master agreement, shall be 
     treated as a single agreement and a single qualified 
     financial contract. If a master agreement contains provisions 
     relating to agreements or transactions that are not 
     themselves qualified financial contracts, the master 
     agreement shall be deemed to be a qualified financial 
     contract only with respect to those transactions that are 
     themselves qualified financial contracts.
       ``(viii) Transfer.--The term `transfer' means every mode, 
     direct or indirect, absolute or conditional, voluntary or 
     involuntary, of disposing of or parting with property

[[Page 5138]]

     or with an interest in property, including retention of title 
     as a security interest and foreclosure of the regulated 
     entity's equity of redemption.
       ``(E) Certain protections in event of appointment of 
     conservator.--Notwithstanding any other provision of this Act 
     (other than paragraph (13) of this subsection), any other 
     Federal law, or the law of any State, no person shall be 
     stayed or prohibited from exercising--
       ``(i) any right such person has to cause the termination, 
     liquidation, or acceleration of any qualified financial 
     contract with a regulated entity in a conservatorship based 
     upon a default under such financial contract which is 
     enforceable under applicable noninsolvency law;
       ``(ii) any right under any security agreement or 
     arrangement or other credit enhancement relating to one or 
     more such qualified financial contracts; or
       ``(iii) any right to offset or net out any termination 
     values, payment amounts, or other transfer obligations 
     arising under or in connection with such qualified financial 
     contracts.
       ``(F) Clarification.--No provision of law shall be 
     construed as limiting the right or power of the Agency, or 
     authorizing any court or agency to limit or delay, in any 
     manner, the right or power of the Agency to transfer any 
     qualified financial contract in accordance with paragraphs 
     (9) and (10) of this subsection or to disaffirm or repudiate 
     any such contract in accordance with subsection (d)(1) of 
     this section.
       ``(G) Walkaway clauses not effective.--
       ``(i) In general.--Notwithstanding the provisions of 
     subparagraphs (A) and (E), and sections 403 and 404 of the 
     Federal Deposit Insurance Corporation Improvement Act of 
     1991, no walkaway clause shall be enforceable in a qualified 
     financial contract of a regulated entity in default.
       ``(ii) Walkaway clause defined.--For purposes of this 
     subparagraph, the term `walkaway clause' means a provision in 
     a qualified financial contract that, after calculation of a 
     value of a party's position or an amount due to or from 1 of 
     the parties in accordance with its terms upon termination, 
     liquidation, or acceleration of the qualified financial 
     contract, either does not create a payment obligation of a 
     party or extinguishes a payment obligation of a party in 
     whole or in part solely because of such party's status as a 
     nondefaulting party.
       ``(9) Transfer of qualified financial contracts.--In making 
     any transfer of assets or liabilities of a regulated entity 
     in default which includes any qualified financial contract, 
     the conservator or receiver for such regulated entity shall 
     either--
       ``(A) transfer to 1 person--
       ``(i) all qualified financial contracts between any person 
     (or any affiliate of such person) and the regulated entity in 
     default;
       ``(ii) all claims of such person (or any affiliate of such 
     person) against such regulated entity under any such contract 
     (other than any claim which, under the terms of any such 
     contract, is subordinated to the claims of general unsecured 
     creditors of such regulated entity);
       ``(iii) all claims of such regulated entity against such 
     person (or any affiliate of such person) under any such 
     contract; and
       ``(iv) all property securing or any other credit 
     enhancement for any contract described in clause (i) or any 
     claim described in clause (ii) or (iii) under any such 
     contract; or
       ``(B) transfer none of the financial contracts, claims, or 
     property referred to under subparagraph (A) (with respect to 
     such person and any affiliate of such person).
       ``(10) Notification of transfer.--
       ``(A) In general.--If--
       ``(i) the conservator or receiver for a regulated entity in 
     default makes any transfer of the assets and liabilities of 
     such regulated entity, and
       ``(ii) the transfer includes any qualified financial 
     contract,

     the conservator or receiver shall notify any person who is a 
     party to any such contract of such transfer by 5:00 p.m. 
     (eastern time) on the business day following the date of the 
     appointment of the receiver in the case of a receivership, or 
     the business day following such transfer in the case of a 
     conservatorship.
       ``(B) Certain rights not enforceable.--
       ``(i) Receivership.--A person who is a party to a qualified 
     financial contract with a regulated entity may not exercise 
     any right that such person has to terminate, liquidate, or 
     net such contract under paragraph (8)(A) of this subsection 
     or section 403 or 404 of the Federal Deposit Insurance 
     Corporation Improvement Act of 1991, solely by reason of or 
     incidental to the appointment of a receiver for the regulated 
     entity (or the insolvency or financial condition of the 
     regulated entity for which the receiver has been appointed)--

       ``(I) until 5:00 p.m. (eastern time) on the business day 
     following the date of the appointment of the receiver; or
       ``(II) after the person has received notice that the 
     contract has been transferred pursuant to paragraph (9)(A).

       ``(ii) Conservatorship.--A person who is a party to a 
     qualified financial contract with a regulated entity may not 
     exercise any right that such person has to terminate, 
     liquidate, or net such contract under paragraph (8)(E) of 
     this subsection or section 403 or 404 of the Federal Deposit 
     Insurance Corporation Improvement Act of 1991, solely by 
     reason of or incidental to the appointment of a conservator 
     for the regulated entity (or the insolvency or financial 
     condition of the regulated entity for which the conservator 
     has been appointed).
       ``(iii) Notice.--For purposes of this paragraph, the Agency 
     as receiver or conservator of a regulated entity shall be 
     deemed to have notified a person who is a party to a 
     qualified financial contract with such regulated entity if 
     the Agency has taken steps reasonably calculated to provide 
     notice to such person by the time specified in subparagraph 
     (A).
       ``(C) Business day defined.--For purposes of this 
     paragraph, the term `business day' means any day other than 
     any Saturday, Sunday, or any day on which either the New York 
     Stock Exchange or the Federal Reserve Bank of New York is 
     closed.
       ``(11) Disaffirmance or repudiation of qualified financial 
     contracts.--In exercising the rights of disaffirmance or 
     repudiation of a conservator or receiver with respect to any 
     qualified financial contract to which a regulated entity is a 
     party, the conservator or receiver for such institution shall 
     either--
       ``(A) disaffirm or repudiate all qualified financial 
     contracts between--
       ``(i) any person or any affiliate of such person; and
       ``(ii) the regulated entity in default; or
       ``(B) disaffirm or repudiate none of the qualified 
     financial contracts referred to in subparagraph (A) (with 
     respect to such person or any affiliate of such person).
       ``(12) Certain security interests not avoidable.--No 
     provision of this subsection shall be construed as permitting 
     the avoidance of any legally enforceable or perfected 
     security interest in any of the assets of any regulated 
     entity, except where such an interest is taken in 
     contemplation of the insolvency of the regulated entity, or 
     with the intent to hinder, delay, or defraud the regulated 
     entity or the creditors of such regulated entity.
       ``(13) Authority to enforce contracts.--
       ``(A) In general.--Notwithstanding any provision of a 
     contract providing for termination, default, acceleration, or 
     exercise of rights upon, or solely by reason of, insolvency 
     or the appointment of a conservator or receiver, the 
     conservator or receiver may enforce any contract or regulated 
     entity bond entered into by the regulated entity.
       ``(B) Certain rights not affected.--No provision of this 
     paragraph may be construed as impairing or affecting any 
     right of the conservator or receiver to enforce or recover 
     under a director's or officer's liability insurance contract 
     or surety bond under other applicable law.
       ``(C) Consent requirement.--
       ``(i) In general.--Except as otherwise provided under this 
     section, no person may exercise any right or power to 
     terminate, accelerate, or declare a default under any 
     contract to which a regulated entity is a party, or to obtain 
     possession of or exercise control over any property of the 
     regulated entity, or affect any contractual rights of the 
     regulated entity, without the consent of the conservator or 
     receiver, as appropriate, for a period of--

       ``(I) 45 days after the date of appointment of a 
     conservator; or

       ``(II) 90 days after the date of appointment of a receiver.

       ``(ii) Exceptions.--This paragraph shall--

       ``(I) not apply to a director's or officer's liability 
     insurance contract;
       ``(II) not apply to the rights of parties to any qualified 
     financial contracts under subsection (d)(8); and
       ``(III) not be construed as permitting the conservator or 
     receiver to fail to comply with otherwise enforceable 
     provisions of such contracts.

       ``(14) Savings clause.--The meanings of terms used in this 
     subsection are applicable for purposes of this subsection 
     only, and shall not be construed or applied so as to 
     challenge or affect the characterization, definition, or 
     treatment of any similar terms under any other statute, 
     regulation, or rule, including the Gramm-Leach-Bliley Act, 
     the Legal Certainty for Bank Products Act of 2000, the 
     securities laws (as that term is defined in section 3(a)(47) 
     of the Securities Exchange Act of 1934), and the Commodity 
     Exchange Act.
       ``(15) Exception for federal reserve and federal home loan 
     banks.--No provision of this subsection shall apply with 
     respect to--
       ``(A) any extension of credit from any Federal home loan 
     bank or Federal Reserve Bank to any regulated entity; or
       ``(B) any security interest in the assets of the regulated 
     entity securing any such extension of credit.
       ``(e) Valuation of Claims in Default.--
       ``(1) In general.--Notwithstanding any other provision of 
     Federal law or the law of any State, and regardless of the 
     method which the Agency determines to utilize with respect to 
     a regulated entity in default or in danger of default, 
     including transactions authorized under subsection (i), this 
     subsection shall govern the rights of the creditors of such 
     regulated entity.
       ``(2) Maximum liability.--The maximum liability of the 
     Agency, acting as receiver or

[[Page 5139]]

     in any other capacity, to any person having a claim against 
     the receiver or the regulated entity for which such receiver 
     is appointed shall equal the lesser of--
       ``(A) the amount such claimant would have received if the 
     Agency had liquidated the assets and liabilities of such 
     regulated entity without exercising the authority of the 
     Agency under subsection (i) of this section; or
       ``(B) the amount of proceeds realized from the performance 
     of contracts or sale of the assets of the regulated entity.
       ``(f) Limitation on Court Action.--Except as provided in 
     this section or at the request of the Director, no court may 
     take any action to restrain or affect the exercise of powers 
     or functions of the Agency as a conservator or a receiver.
       ``(g) Liability of Directors and Officers.--
       ``(1) In general.--A director or officer of a regulated 
     entity may be held personally liable for monetary damages in 
     any civil action by, on behalf of, or at the request or 
     direction of the Agency, which action is prosecuted wholly or 
     partially for the benefit of the Agency--
       ``(A) acting as conservator or receiver of such regulated 
     entity, or
       ``(B) acting based upon a suit, claim, or cause of action 
     purchased from, assigned by, or otherwise conveyed by such 
     receiver or conservator,

     for gross negligence, including any similar conduct or 
     conduct that demonstrates a greater disregard of a duty of 
     care (than gross negligence) including intentional tortious 
     conduct, as such terms are defined and determined under 
     applicable State law.
       ``(2) No limitation.--Nothing in this paragraph shall 
     impair or affect any right of the Agency under other 
     applicable law.
       ``(h) Damages.--In any proceeding related to any claim 
     against a director, officer, employee, agent, attorney, 
     accountant, appraiser, or any other party employed by or 
     providing services to a regulated entity, recoverable damages 
     determined to result from the improvident or otherwise 
     improper use or investment of any assets of the regulated 
     entity shall include principal losses and appropriate 
     interest.
       ``(i) Limited-Life Regulated Entities.--
       ``(1) Organization.--
       ``(A) Purpose.--If a regulated entity is in default, or if 
     the Agency anticipates that a regulated entity will default, 
     the Agency may organize a limited-life regulated entity with 
     those powers and attributes of the regulated entity in 
     default or in danger of default that the Director determines 
     necessary, subject to the provisions of this subsection. The 
     Director shall grant a temporary charter to the limited-life 
     regulated entity, and the limited-life regulated entity shall 
     operate subject to that charter.
       ``(B) Authorities.--Upon the creation of a limited-life 
     regulated entity under subparagraph (A), the limited-life 
     regulated entity may--
       ``(i) assume such liabilities of the regulated entity that 
     is in default or in danger of default as the Agency may, in 
     its discretion, determine to be appropriate, provided that 
     the liabilities assumed shall not exceed the amount of assets 
     of the limited-life regulated entity;
       ``(ii) purchase such assets of the regulated entity that is 
     in default, or in danger of default, as the Agency may, in 
     its discretion, determine to be appropriate; and
       ``(iii) perform any other temporary function which the 
     Agency may, in its discretion, prescribe in accordance with 
     this section.
       ``(2) Charter.--
       ``(A) Conditions.--The Agency may grant a temporary charter 
     if the Agency determines that the continued operation of the 
     regulated entity in default or in danger of default is in the 
     best interest of the national economy and the housing 
     markets.
       ``(B) Treatment as being in default for certain purposes.--
     A limited-life regulated entity shall be treated as a 
     regulated entity in default at such times and for such 
     purposes as the Agency may, in its discretion, determine.
       ``(C) Management.--A limited-life regulated entity, upon 
     the granting of its charter, shall be under the management of 
     a board of directors consisting of not fewer than 5 nor more 
     than 10 members appointed by the Agency.
       ``(D) Bylaws.--The board of directors of a limited-life 
     regulated entity shall adopt such bylaws as may be approved 
     by the Agency.
       ``(3) Capital stock.--No capital stock need be paid into a 
     limited-life regulated entity by the Agency.
       ``(4) Investments.--Funds of a limited-life regulated 
     entity shall be kept on hand in cash, invested in obligations 
     of the United States or obligations guaranteed as to 
     principal and interest by the United States, or deposited 
     with the Agency, or any Federal Reserve bank.
       ``(5) Exempt status.--Notwithstanding any other provision 
     of Federal or State law, the limited-life regulated entity, 
     its franchise, property, and income shall be exempt from all 
     taxation now or hereafter imposed by the United States, by 
     any territory, dependency, or possession thereof, or by any 
     State, county, municipality, or local taxing authority.
       ``(6) Winding up.--
       ``(A) In general.--Subject to subparagraph (B), unless 
     Congress authorizes the sale of the capital stock of the 
     limited-life regulated entity, not later than 2 years after 
     the date of its organization, the Agency shall wind up the 
     affairs of the limited-life regulated entity.
       ``(B) Extension.--The Director may, in the discretion of 
     the Director, extend the status of the limited-life regulated 
     entity for 3 additional 1-year periods.
       ``(7) Transfer of assets and liabilities.--
       ``(A) In general.--
       ``(i) Transfer of assets and liabilities.--The Agency, as 
     receiver, may transfer any assets and liabilities of a 
     regulated entity in default, or in danger of default, to the 
     limited-life regulated entity in accordance with paragraph 
     (1).
       ``(ii) Subsequent transfers.--At any time after a charter 
     is transferred to a limited-life regulated entity, the 
     Agency, as receiver, may transfer any assets and liabilities 
     of such regulated entity in default, or in danger in default, 
     as the Agency may, in its discretion, determine to be 
     appropriate in accordance with paragraph (1).
       ``(iii) Effective without approval.--The transfer of any 
     assets or liabilities of a regulated entity in default, or in 
     danger of default, transferred to a limited-life regulated 
     entity shall be effective without any further approval under 
     Federal or State law, assignment, or consent with respect 
     thereto.
       ``(8) Proceeds.--To the extent that available proceeds from 
     the limited-life regulated entity exceed amounts required to 
     pay obligations, such proceeds may be paid to the regulated 
     entity in default, or in danger of default.
       ``(9) Powers.--
       ``(A) In general.--Each limited-life regulated entity 
     created under this subsection shall have all corporate powers 
     of, and be subject to the same provisions of law as, the 
     regulated entity in default or in danger of default to which 
     it relates, except that--
       ``(i) the Agency may--

       ``(I) remove the directors of a limited-life regulated 
     entity; and
       ``(II) fix the compensation of members of the board of 
     directors and senior management, as determined by the Agency 
     in its discretion, of a limited-life regulated entity;

       ``(ii) the Agency may indemnify the representatives for 
     purposes of paragraph (1)(B), and the directors, officers, 
     employees, and agents of a limited-life regulated entity on 
     such terms as the Agency determines to be appropriate; and
       ``(iii) the board of directors of a limited-life regulated 
     entity--

       ``(I) shall elect a chairperson who may also serve in the 
     position of chief executive officer, except that such person 
     shall not serve either as chairperson or as chief executive 
     officer without the prior approval of the Agency; and
       ``(II) may appoint a chief executive officer who is not 
     also the chairperson, except that such person shall not serve 
     as chief executive officer without the prior approval of the 
     Agency.

       ``(B) Stay of judicial action.--Any judicial action to 
     which a limited-life regulated entity becomes a party by 
     virtue of its acquisition of any assets or assumption of any 
     liabilities of a regulated entity in default shall be stayed 
     from further proceedings for a period of up to 45 days at the 
     request of the limited-life regulated entity. Such period may 
     be modified upon the consent of all parties.
       ``(10) Obtaining of credit and incurring of debt.--
       ``(A) In general.--The limited-life regulated entity may 
     obtain unsecured credit and incur unsecured debt in the 
     ordinary course of business.
       ``(B) Inability to obtain credit.--If the limited-life 
     regulated entity is unable to obtain unsecured credit the 
     Director may authorize the obtaining of credit or the 
     incurring of debt--
       ``(i) with priority over any or all administrative 
     expenses;
       ``(ii) secured by a lien on property that is not otherwise 
     subject to a lien; or
       ``(iii) secured by a junior lien on property that is 
     subject to a lien.
       ``(C) Limitations.--
       ``(i) In general.--The Director, after notice and a 
     hearing, may authorize the obtaining of credit or the 
     incurring of debt secured by a senior or equal lien on 
     property that is subject to a lien (other than mortgages that 
     collateralize the mortgage-backed securities issued or 
     guaranteed by the regulated entity) only if--

       ``(I) the limited-life regulated entity is unable to obtain 
     such credit otherwise; and
       ``(II) there is adequate protection of the interest of the 
     holder of the lien on the property which such senior or equal 
     lien is proposed to be granted.

       ``(ii) Burden of proof.--In any hearing under this 
     subsection, the Director has the burden of proof on the issue 
     of adequate protection.
       ``(D) Effect on debts and liens.--The reversal or 
     modification on appeal of an authorization under this 
     paragraph to obtain credit or incur debt, or of a grant under 
     this section of a priority or a lien, does not affect the 
     validity of any debt so incurred, or any priority or lien so 
     granted, to an entity that extended such credit in good 
     faith, whether

[[Page 5140]]

     or not such entity knew of the pendency of the appeal, unless 
     such authorization and the incurring of such debt, or the 
     granting of such priority or lien, were stayed pending 
     appeal.
       ``(11) Issuance of preferred debt.--A limited-life 
     regulated entity may, subject to the approval of the Director 
     and subject to such terms and conditions as the Director may 
     prescribe, issue notes, bonds, or other debt obligations of a 
     class to which all other debt obligations of the limited-life 
     regulated entity shall be subordinate in right and payment.
       ``(12) No federal status.--
       ``(A) Agency status.--A limited-life regulated entity is 
     not an agency, establishment, or instrumentality of the 
     United States.
       ``(B) Employee status.--Representatives for purposes of 
     paragraph (1)(B), interim directors, directors, officers, 
     employees, or agents of a limited-life regulated entity are 
     not, solely by virtue of service in any such capacity, 
     officers or employees of the United States. Any employee of 
     the Agency or of any Federal instrumentality who serves at 
     the request of the Agency as a representative for purposes of 
     paragraph (1)(B), interim director, director, officer, 
     employee, or agent of a limited-life regulated entity shall 
     not--
       ``(i) solely by virtue of service in any such capacity lose 
     any existing status as an officer or employee of the United 
     States for purposes of title 5, United States Code, or any 
     other provision of law; or
       ``(ii) receive any salary or benefits for service in any 
     such capacity with respect to a limited-life regulated entity 
     in addition to such salary or benefits as are obtained 
     through employment with the Agency or such Federal 
     instrumentality.
       ``(13) Additional powers.--In addition to any other powers 
     granted under this subsection, a limited-life regulated 
     entity may--
       ``(A) extend a maturity date or change in an interest rate 
     or other term of outstanding securities;
       ``(B) issue securities of the limited-life regulated 
     entity, for cash, for property, for existing securities, or 
     in exchange for claims or interests, or for any other 
     appropriate purposes; and
       ``(C) take any other action not inconsistent with this 
     section.
       ``(j) Other Exemptions.--When acting as a receiver, the 
     following provisions shall apply with respect to the Agency:
       ``(1) Exemption from taxation.--The Agency, including its 
     franchise, its capital, reserves, and surplus, and its 
     income, shall be exempt from all taxation imposed by any 
     State, country, municipality, or local taxing authority, 
     except that any real property of the Agency shall be subject 
     to State, territorial, county, municipal, or local taxation 
     to the same extent according to its value as other real 
     property is taxed, except that, notwithstanding the failure 
     of any person to challenge an assessment under State law of 
     the value of such property, and the tax thereon, shall be 
     determined as of the period for which such tax is imposed.
       ``(2) Exemption from attachment and liens.--No property of 
     the Agency shall be subject to levy, attachment, garnishment, 
     foreclosure, or sale without the consent of the Agency, nor 
     shall any involuntary lien attach to the property of the 
     Agency.
       ``(3) Exemption from penalties and fines.--The Agency shall 
     not be liable for any amounts in the nature of penalties or 
     fines, including those arising from the failure of any person 
     to pay any real property, personal property, probate, or 
     recording tax or any recording or filing fees when due.
       ``(k) Prohibition of Charter Revocation.--In no case may a 
     receiver appointed pursuant to this section revoke, annul, or 
     terminate the charter of a regulated entity.''.
       (b) Conforming Amendments.--
       (1) Housing and community development act of 1992.--
     Subtitle B of title XIII of the Housing and Community 
     Development Act of 1992 is amended by striking sections 1369 
     (12 U.S.C. 4619), 1369A (12 U.S.C. 4620), and 1369B (12 
     U.S.C. 4621).
       (2) Federal home loan banks.--Section 25 of the Federal 
     Home Loan Bank Act (12 U.S.C. 1445) is amended to read as 
     follows:

     ``SEC. 25. SUCCESSION OF FEDERAL HOME LOAN BANKS.

       ``Each Federal Home Loan Bank shall have succession until 
     it is voluntarily merged with another Bank under this Act, or 
     until it is merged, reorganized, rehabilitated, liquidated, 
     or otherwise wound up by the Director in accordance with the 
     provisions of section 1367 of the Housing and Community 
     Development Act of 1992, or by further Act of Congress.''.

     SEC. 155. CONFORMING AMENDMENTS.

       Title XIII of the Housing and Community Development Act of 
     1992, as amended by the preceding provisions of this 
     Division, is further amended--
       (1) in sections 1365 (12 U.S.C. 4615) through 1369D (12 
     U.S.C. 4623), but not including section 1367 (12 U.S.C. 4617) 
     as amended by section 154 of this Division--
       (A) by striking ``An enterprise'' each place such term 
     appears and inserting ``A regulated entity'';
       (B) by striking ``an enterprise'' each place such term 
     appears and inserting ``a regulated entity''; and
       (C) by striking ``the enterprise'' each place such term 
     appears and inserting ``the regulated entity'';
       (2) in section 1366 (12 U.S.C. 4616)--
       (A) in subsection (b)(7), by striking ``section 1369 
     (excluding subsection (a)(1) and (2))'' and inserting 
     ``section 1367''; and
       (B) in subsection (d), by striking ``the enterprises'' and 
     inserting ``the regulated entities'';
       (3) in section 1368(d) (12 U.S.C. 4618(d)), by striking 
     ``Committee on Banking, Finance and Urban Affairs'' and 
     inserting ``Committee on Financial Services'';
       (4) in section 1369C (12 U.S.C. 4622)--
       (A) in subsection (a)(4), by striking ``activities 
     (including existing and new programs)'' and inserting 
     ``activities, services, undertakings, and offerings 
     (including existing and new products (as such term is defined 
     in section 1321(f))''; and
       (B) in subsection (c), by striking ``any enterprise'' and 
     inserting ``any regulated entity''; and
       (5) in subsections (a) and (d) of section 1369D, by 
     striking ``section 1366 or 1367 or action under section 
     1369)'' each place such phrase appears and inserting 
     ``section 1367)''.

                    Subtitle D--Enforcement Actions

     SEC. 161. CEASE-AND-DESIST PROCEEDINGS.

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

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

       Section 1372 of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4632) is amended--
       (1) by striking subsection (a) and inserting the following 
     new subsection:
       ``(a) Grounds for Issuance.--Whenever the Director 
     determines that the violation or threatened violation or the 
     unsafe or unsound practice or practices specified in the 
     notice of charges served upon the regulated entity or any 
     regulated entity-affiliated party pursuant to section 
     1371(a), or the continuation thereof, is likely to cause 
     insolvency or significant dissipation of assets or earnings 
     of the regulated entity, or is likely to weaken the condition 
     of the regulated entity prior to the completion of the 
     proceedings conducted pursuant to sections 1371

[[Page 5141]]

     and 1373, the Director may issue a temporary order requiring 
     the regulated entity or such party to cease and desist from 
     any such violation or practice and to take affirmative action 
     to prevent or remedy such insolvency, dissipation, condition, 
     or prejudice pending completion of such proceedings. Such 
     order may include any requirement authorized under section 
     1371(d).'';
       (2) in subsection (b), by striking ``enterprise, executive 
     officer, or director'' and inserting ``regulated entity or 
     regulated entity-affiliated party'';
       (3) in subsection (d)--
       (A) by striking ``An enterprise, executive officer, or 
     director'' and inserting ``A regulated entity or regulated 
     entity-affiliated party''; and
       (B) by striking ``the enterprise, executive officer, or 
     director'' and inserting ``the regulated entity or regulated 
     entity-affiliated party''; and
       (4) by striking subsection (e) and in inserting the 
     following new subsection:
       ``(e) Enforcement.--In the case of violation or threatened 
     violation of, or failure to obey, a temporary cease-and-
     desist order issued pursuant to this section, the Director 
     may apply to the United States District Court for the 
     District of Columbia or the United States district court 
     within the jurisdiction of which the headquarters of the 
     regulated entity is located, for an injunction to enforce 
     such order, and, if the court determines that there has been 
     such violation or threatened violation or failure to obey, it 
     shall be the duty of the court to issue such injunction.''.

     SEC. 163. PREJUDGMENT ATTACHMENT.

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

     ``SEC. 1375A. PREJUDGMENT ATTACHMENT.

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

     SEC. 164. ENFORCEMENT AND JURISDICTION.

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

     SEC. 165. CIVIL MONEY PENALTIES.

       Section 1376 of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4636) is amended--
       (1) in subsection (a)--
       (A) in the matter preceding paragraph (1), by striking ``, 
     or any executive officer or director'' and inserting ``or any 
     regulated-entity affiliated party''; and
       (B) in paragraph (1)--
       (i) by striking ``the Federal National Mortgage Association 
     Charter Act, the Federal Home Loan Mortgage Corporation Act'' 
     and inserting ``any provision of any of the authorizing 
     statutes'';
       (ii) by striking ``or Act'' and inserting ``or statute'';
       (iii) by striking ``or subsection'' and inserting ``, 
     subsection''; and
       (iv) by inserting ``, or paragraph (5) or (12) of section 
     10(j) of the Federal Home Loan Bank Act'' before the 
     semicolon at the end;
       (2) by striking subsection (b) and inserting the following 
     new subsection:
       ``(b) Amount of Penalty.--
       ``(1) First tier.--Any regulated entity which, or any 
     regulated entity-affiliated party who--
       ``(A) violates any provision of this title, any provision 
     of any of the authorizing statutes, or any order, condition, 
     rule, or regulation under any such title or statute, except 
     that the Director may not, pursuant to this section, enforce 
     compliance with any housing goal established under subpart B 
     of part 2 of subtitle A of this title, with section 1336 or 
     1337 of this title, with subsection (m) or (n) of section 309 
     of the Federal National Mortgage Association Charter Act (12 
     U.S.C. 1723a(m), (n)), with subsection (e) or (f) of section 
     307 of the Federal Home Loan Mortgage Corporation Act (12 
     U.S.C. 1456(e), (f)), or with paragraph (5) or (12) of 
     section 10(j) of the Federal Home Loan Bank Act;
       ``(B) violates any final or temporary order or notice 
     issued pursuant to this title;
       ``(C) violates any condition imposed in writing by the 
     Director in connection with the grant of any application or 
     other request by such regulated entity; or
       ``(D) violates any written agreement between the regulated 
     entity and the Director,
     shall forfeit and pay a civil money penalty of not more than 
     $10,000 for each day during which such violation continues.
       ``(2) Second tier.--Notwithstanding paragraph (1)--
       ``(A) if a regulated entity, or a regulated entity-
     affiliated party--
       ``(i) commits any violation described in any subparagraph 
     of paragraph (1);
       ``(ii) recklessly engages in an unsafe or unsound practice 
     in conducting the affairs of such regulated entity; or
       ``(iii) breaches any fiduciary duty; and
       ``(B) the violation, practice, or breach--
       ``(i) is part of a pattern of misconduct;
       ``(ii) causes or is likely to cause more than a minimal 
     loss to such regulated entity; or
       ``(iii) results in pecuniary gain or other benefit to such 
     party,

     the regulated entity or regulated entity-affiliated party 
     shall forfeit and pay a civil penalty of not more than 
     $50,000 for each day during which such violation, practice, 
     or breach continues.
       ``(3) Third tier.--Notwithstanding paragraphs (1) and (2), 
     any regulated entity which, or any regulated entity-
     affiliated party who--
       ``(A) knowingly--
       ``(i) commits any violation or engages in any conduct 
     described in any subparagraph of paragraph (1);
       ``(ii) engages in any unsafe or unsound practice in 
     conducting the affairs of such regulated entity; or
       ``(iii) breaches any fiduciary duty; and
       ``(B) knowingly or recklessly causes a substantial loss to 
     such regulated entity or a substantial pecuniary gain or 
     other benefit to such party by reason of such violation, 
     practice, or breach,

     shall forfeit and pay a civil penalty in an amount not to 
     exceed the applicable maximum amount determined under 
     paragraph (4) for each day during which such violation, 
     practice, or breach continues.
       ``(4) Maximum amounts of penalties for any violation 
     described in paragraph (3).--The maximum daily amount of any 
     civil penalty which may be assessed pursuant to paragraph (3) 
     for any violation, practice, or breach described in such 
     paragraph is--
       ``(A) in the case of any person other than a regulated 
     entity, an amount not to exceed $2,000,000; and
       ``(B) in the case of any regulated entity, $2,000,000.'';
       (3) in subsection (c)(1)(B), by striking ``enterprise, 
     executive officer, or director'' and inserting ``regulated 
     entity or regulated entity-affiliated party'';
       (4) in subsection (d), by striking the first sentence and 
     inserting the following: ``If a regulated entity or regulated 
     entity-affiliated party fails to comply with an order of the 
     Director imposing a civil money penalty under this section, 
     after the order is no longer subject to review as provided 
     under subsection (c)(1) and section 1374, the Director may, 
     in the discretion of the Director, bring an action in the 
     United States District Court for the District of Columbia, or 
     the United States district court within the jurisdiction of 
     which the headquarters of the regulated entity is located, to 
     obtain a monetary judgment against the regulated entity or 
     regulated entity affiliated party and such other relief as 
     may be available, or request that the Attorney General of the 
     United States bring such an action.''; and
       (5) in subsection (g), by striking ``subsection (b)(3)'' 
     and inserting ``this section, unless authorized by the 
     Director by rule, regulation, or order''.

     SEC. 166. REMOVAL AND PROHIBITION AUTHORITY.

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

     ``SEC. 1377. REMOVAL AND PROHIBITION AUTHORITY.

       ``(a) Authority To Issue Order.--Whenever the Director 
     determines that--
       ``(1) any regulated entity-affiliated party has, directly 
     or indirectly--
       ``(A) violated--
       ``(i) any law or regulation;

[[Page 5142]]

       ``(ii) any cease-and-desist order which has become final;
       ``(iii) any condition imposed in writing by the Director in 
     connection with the grant of any application or other request 
     by such regulated entity; or
       ``(iv) any written agreement between such regulated entity 
     and the Director;
       ``(B) engaged or participated in any unsafe or unsound 
     practice in connection with any regulated entity; or
       ``(C) committed or engaged in any act, omission, or 
     practice which constitutes a breach of such party's fiduciary 
     duty;
       ``(2) by reason of the violation, practice, or breach 
     described in any subparagraph of paragraph (1)--
       ``(A) such regulated entity has suffered or will probably 
     suffer financial loss or other damage; or
       ``(B) such party has received financial gain or other 
     benefit by reason of such violation, practice, or breach; and
       ``(3) such violation, practice, or breach--
       ``(A) involves personal dishonesty on the part of such 
     party; or
       ``(B) demonstrates willful or continuing disregard by such 
     party for the safety or soundness of such regulated entity, 
     the Director may serve upon such party a written notice of 
     the Director's intention to remove such party from office or 
     to prohibit any further participation by such party, in any 
     manner, in the conduct of the affairs of any regulated 
     entity.
       ``(b) Suspension Order.--
       ``(1) Suspension or prohibition authority.--If the Director 
     serves written notice under subsection (a) to any regulated 
     entity-affiliated party of the Director's intention to issue 
     an order under such subsection, the Director may--
       ``(A) suspend such party from office or prohibit such party 
     from further participation in any manner in the conduct of 
     the affairs of the regulated entity, if the Director--
       ``(i) determines that such action is necessary for the 
     protection of the regulated entity; and
       ``(ii) serves such party with written notice of the 
     suspension order; and
       ``(B) prohibit the regulated entity from releasing to or on 
     behalf of the regulated entity-affiliated party any 
     compensation or other payment of money or other thing of 
     current or potential value in connection with any 
     resignation, removal, retirement, or other termination of 
     employment or office of the party.
       ``(2) Effective period.--Any suspension order issued under 
     this subsection--
       ``(A) shall become effective upon service; and
       ``(B) unless a court issues a stay of such order under 
     subsection (g) of this section, shall remain in effect and 
     enforceable until--
       ``(i) the date the Director dismisses the charges contained 
     in the notice served under subsection (a) with respect to 
     such party; or
       ``(ii) the effective date of an order issued by the 
     Director to such party under subsection (a).
       ``(3) Copy of order.--If the Director issues a suspension 
     order under this subsection to any regulated entity-
     affiliated party, the Director shall serve a copy of such 
     order on any regulated entity with which such party is 
     affiliated at the time such order is issued.
       ``(c) Notice, Hearing, and Order.--A notice of intention to 
     remove a regulated entity-affiliated party from office or to 
     prohibit such party from participating in the conduct of the 
     affairs of a regulated entity shall contain a statement of 
     the facts constituting grounds for such action, and shall fix 
     a time and place at which a hearing will be held on such 
     action. Such hearing shall be fixed for a date not earlier 
     than 30 days nor later than 60 days after the date of service 
     of such notice, unless an earlier or a later date is set by 
     the Director at the request of (1) such party, and for good 
     cause shown, or (2) the Attorney General of the United 
     States. Unless such party shall appear at the hearing in 
     person or by a duly authorized representative, such party 
     shall be deemed to have consented to the issuance of an order 
     of such removal or prohibition. In the event of such consent, 
     or if upon the record made at any such hearing the Director 
     shall find that any of the grounds specified in such notice 
     have been established, the Director may issue such orders of 
     suspension or removal from office, or prohibition from 
     participation in the conduct of the affairs of the regulated 
     entity, as it may deem appropriate, together with an order 
     prohibiting compensation described in subsection (b)(1)(B). 
     Any such order shall become effective at the expiration of 30 
     days after service upon such regulated entity and such party 
     (except in the case of an order issued upon consent, which 
     shall become effective at the time specified therein). Such 
     order shall remain effective and enforceable except to such 
     extent as it is stayed, modified, terminated, or set aside by 
     action of the Director or a reviewing court.
       ``(d) Prohibition of Certain Specific Activities.--Any 
     person subject to an order issued under this section shall 
     not--
       ``(1) participate in any manner in the conduct of the 
     affairs of any regulated entity;
       ``(2) solicit, procure, transfer, attempt to transfer, 
     vote, or attempt to vote any proxy, consent, or authorization 
     with respect to any voting rights in any regulated entity;
       ``(3) violate any voting agreement previously approved by 
     the Director; or
       ``(4) vote for a director, or serve or act as a regulated 
     entity-affiliated party.
       ``(e) Industry-Wide Prohibition.--
       ``(1) In general.--Except as provided in paragraph (2), any 
     person who, pursuant to an order issued under this section, 
     has been removed or suspended from office in a regulated 
     entity or prohibited from participating in the conduct of the 
     affairs of a regulated entity may not, while such order is in 
     effect, continue or commence to hold any office in, or 
     participate in any manner in the conduct of the affairs of, 
     any regulated entity.
       ``(2) Exception if director provides written consent.--If, 
     on or after the date an order is issued under this section 
     which removes or suspends from office any regulated entity-
     affiliated party or prohibits such party from participating 
     in the conduct of the affairs of a regulated entity, such 
     party receives the written consent of the Director, the order 
     shall, to the extent of such consent, cease to apply to such 
     party with respect to the regulated entity described in the 
     written consent. If the Director grants such a written 
     consent, it shall publicly disclose such consent.
       ``(3) Violation of paragraph (1) treated as violation of 
     order.--Any violation of paragraph (1) by any person who is 
     subject to an order described in such subsection shall be 
     treated as a violation of the order.
       ``(f) Applicability.--This section shall only apply to a 
     person who is an individual, unless the Director specifically 
     finds that it should apply to a corporation, firm, or other 
     business enterprise.
       ``(g) Stay of Suspension and Prohibition of Regulated 
     Entity-Affiliated Party.--Within 10 days after any regulated 
     entity-affiliated party has been suspended from office and/or 
     prohibited from participation in the conduct of the affairs 
     of a regulated entity under this section, such party may 
     apply to the United States District Court for the District of 
     Columbia, or the United States district court for the 
     judicial district in which the headquarters of the regulated 
     entity is located, for a stay of such suspension and/or 
     prohibition and any prohibition under subsection (b)(1)(B) 
     pending the completion of the administrative proceedings 
     pursuant to the notice served upon such party under this 
     section, and such court shall have jurisdiction to stay such 
     suspension and/or prohibition.
       ``(h) Suspension or Removal of Regulated Entity-Affiliated 
     Party Charged With Felony.--
       ``(1) Suspension or prohibition.--
       ``(A) In general.--Whenever any regulated entity-affiliated 
     party is charged in any information, indictment, or 
     complaint, with the commission of or participation in a crime 
     involving dishonesty or breach of trust which is punishable 
     by imprisonment for a term exceeding one year under State or 
     Federal law, the Director may, if continued service or 
     participation by such party may pose a threat to the 
     regulated entity or impair public confidence in the regulated 
     entity, by written notice served upon such party--
       ``(i) suspend such party from office or prohibit such party 
     from further participation in any manner in the conduct of 
     the affairs of any regulated entity; and
       ``(ii) prohibit the regulated entity from releasing to or 
     on behalf of the regulated entity-affiliated party any 
     compensation or other payment of money or other thing of 
     current or potential value in connection with the period of 
     any such suspension or with any resignation, removal, 
     retirement, or other termination of employment or office of 
     the party.
       ``(B) Provisions applicable to notice.--
       ``(i) Copy.--A copy of any notice under paragraph (1)(A) 
     shall also be served upon the regulated entity.
       ``(ii) Effective period.--A suspension or prohibition under 
     subparagraph (A) shall remain in effect until the 
     information, indictment, or complaint referred to in such 
     subparagraph is finally disposed of or until terminated by 
     the Director.
       ``(2) Removal or prohibition.--
       ``(A) In general.--If a judgment of conviction or an 
     agreement to enter a pretrial diversion or other similar 
     program is entered against a regulated entity-affiliated 
     party in connection with a crime described in paragraph 
     (1)(A), at such time as such judgment is not subject to 
     further appellate review, the Director may, if continued 
     service or participation by such party may pose a threat to 
     the regulated entity or impair public confidence in the 
     regulated entity, issue and serve upon such party an order 
     that--
       ``(i) removes such party from office or prohibits such 
     party from further participation in any manner in the conduct 
     of the affairs of the regulated entity without the prior 
     written consent of the Director; and
       ``(ii) prohibits the regulated entity from releasing to or 
     on behalf of the regulated entity-affiliated party any 
     compensation or other payment of money or other thing of 
     current or potential value in connection with the termination 
     of employment or office of the party.
       ``(B) Provisions applicable to order.--
       ``(i) Copy.--A copy of any order under paragraph (2)(A) 
     shall also be served upon the regulated entity, whereupon the 
     regulated

[[Page 5143]]

     entity-affiliated party who is subject to the order (if a 
     director or an officer) shall cease to be a director or 
     officer of such regulated entity.
       ``(ii) Effect of acquittal.--A finding of not guilty or 
     other disposition of the charge shall not preclude the 
     Director from instituting proceedings after such finding or 
     disposition to remove such party from office or to prohibit 
     further participation in regulated entity affairs, and to 
     prohibit compensation or other payment of money or other 
     thing of current or potential value in connection with any 
     resignation, removal, retirement, or other termination of 
     employment or office of the party, pursuant to subsections 
     (a), (d), or (e) of this section.
       ``(iii) Effective period.--Any notice of suspension or 
     order of removal issued under this subsection shall remain 
     effective and outstanding until the completion of any hearing 
     or appeal authorized under paragraph (4) unless terminated by 
     the Director.
       ``(3) Authority of remaining board members.--If at any 
     time, because of the suspension of one or more directors 
     pursuant to this section, there shall be on the board of 
     directors of a regulated entity less than a quorum of 
     directors not so suspended, all powers and functions vested 
     in or exercisable by such board shall vest in and be 
     exercisable by the director or directors on the board not so 
     suspended, until such time as there shall be a quorum of the 
     board of directors. In the event all of the directors of a 
     regulated entity are suspended pursuant to this section, the 
     Director shall appoint persons to serve temporarily as 
     directors in their place and stead pending the termination of 
     such suspensions, or until such time as those who have been 
     suspended cease to be directors of the regulated entity and 
     their respective successors take office.
       ``(4) Hearing regarding continued participation.--Within 30 
     days from service of any notice of suspension or order of 
     removal issued pursuant to paragraph (1) or (2) of this 
     subsection, the regulated entity-affiliated party concerned 
     may request in writing an opportunity to appear before the 
     Director to show that the continued service to or 
     participation in the conduct of the affairs of the regulated 
     entity by such party does not, or is not likely to, pose a 
     threat to the interests of the regulated entity or threaten 
     to impair public confidence in the regulated entity. Upon 
     receipt of any such request, the Director shall fix a time 
     (not more than 30 days after receipt of such request, unless 
     extended at the request of such party) and place at which 
     such party may appear, personally or through counsel, before 
     one or more members of the Director or designated employees 
     of the Director to submit written materials (or, at the 
     discretion of the Director, oral testimony) and oral 
     argument. Within 60 days of such hearing, the Director shall 
     notify such party whether the suspension or prohibition from 
     participation in any manner in the conduct of the affairs of 
     the regulated entity will be continued, terminated, or 
     otherwise modified, or whether the order removing such party 
     from office or prohibiting such party from further 
     participation in any manner in the conduct of the affairs of 
     the regulated entity, and prohibiting compensation in 
     connection with termination will be rescinded or otherwise 
     modified. Such notification shall contain a statement of the 
     basis for the Director's decision, if adverse to such party. 
     The Director is authorized to prescribe such rules as may be 
     necessary to effectuate the purposes of this subsection.
       ``(i) Hearings and Judicial Review.--
       ``(1) Venue and procedure.--Any hearing provided for in 
     this section shall be held in the District of Columbia or in 
     the Federal judicial district in which the headquarters of 
     the regulated entity is located, unless the party afforded 
     the hearing consents to another place, and shall be conducted 
     in accordance with the provisions of chapter 5 of title 5, 
     United States Code. After such hearing, and within 90 days 
     after the Director has notified the parties that the case has 
     been submitted to it for final decision, it shall render its 
     decision (which shall include findings of fact upon which its 
     decision is predicated) and shall issue and serve upon each 
     party to the proceeding an order or orders consistent with 
     the provisions of this section. Judicial review of any such 
     order shall be exclusively as provided in this subsection. 
     Unless a petition for review is timely filed in a court of 
     appeals of the United States, as provided in paragraph (2), 
     and thereafter until the record in the proceeding has been 
     filed as so provided, the Director may at any time, upon such 
     notice and in such manner as it shall deem proper, modify, 
     terminate, or set aside any such order. Upon such filing of 
     the record, the Director may modify, terminate, or set aside 
     any such order with permission of the court.
       ``(2) Review of order.--Any party to any proceeding under 
     paragraph (1) may obtain a review of any order served 
     pursuant to paragraph (1) (other than an order issued with 
     the consent of the regulated entity or the regulated entity-
     affiliated party concerned, or an order issued under 
     subsection (h) of this section) by the filing in the United 
     States Court of Appeals for the District of Columbia Circuit 
     or court of appeals of the United States for the circuit in 
     which the headquarters of the regulated entity is located, 
     within 30 days after the date of service of such order, a 
     written petition praying that the order of the Director be 
     modified, terminated, or set aside. A copy of such petition 
     shall be forthwith transmitted by the clerk of the court to 
     the Director, and thereupon the Director shall file in the 
     court the record in the proceeding, as provided in section 
     2112 of title 28, United States Code. Upon the filing of such 
     petition, such court shall have jurisdiction, which upon the 
     filing of the record shall (except as provided in the last 
     sentence of paragraph (1)) be exclusive, to affirm, modify, 
     terminate, or set aside, in whole or in part, the order of 
     the Director. Review of such proceedings shall be had as 
     provided in chapter 7 of title 5, United States Code. The 
     judgment and decree of the court shall be final, except that 
     the same shall be subject to review by the Supreme Court upon 
     certiorari, as provided in section 1254 of title 28, United 
     States Code.
       ``(3) Proceedings not treated as stay.--The commencement of 
     proceedings for judicial review under paragraph (2) shall 
     not, unless specifically ordered by the court, operate as a 
     stay of any order issued by the Director.''.
       (b) Conforming Amendments.--
       (1) 1992 act.--Section 1317(f) of the Housing and Community 
     Development Act of 1992 (12 U.S.C. 4517(f)) is amended by 
     striking ``section 1379B'' and inserting ``section 1379D''.
       (2) Fannie mae charter act.--The second sentence of 
     subsection (b) of section 308 of the Federal National 
     Mortgage Association Charter Act (12 U.S.C. 1723(b)) is 
     amended by striking ``The'' and inserting ``Except to the 
     extent that action under section 1377 of the Housing and 
     Community Development Act of 1992 temporarily results in a 
     lesser number, the''.
       (3) Freddie mac act.--The second sentence of subparagraph 
     (A) of section 303(a)(2) of the Federal Home Loan Mortgage 
     Corporation Act (12 U.S.C. 1452(a)(2)(A)) is amended by 
     striking ``The'' and inserting ``Except to the extent that 
     action under section 1377 of the Housing and Community 
     Development Act of 1992 temporarily results in a lesser 
     number, the''.

     SEC. 167. CRIMINAL PENALTY.

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

     ``SEC. 1378. CRIMINAL PENALTY.

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

     SEC. 168. SUBPOENA AUTHORITY.

       Section 1379D(c) of the Housing and Community Development 
     Act of 1992 (12 U.S.C. 4641(c)), as so redesignated by 
     section 166(a)(1) of this Division, is further amended--
       (1) by striking ``request the Attorney General of the 
     United States to'' and inserting ``, in the discretion of the 
     Director,'';
       (2) by inserting ``or request that the Attorney General of 
     the United States bring such an action,'' after ``District of 
     Columbia,''; and
       (3) by striking ``or may, under the direction and control 
     of the Attorney General, bring such an action''.

     SEC. 169. CONFORMING AMENDMENTS.

       Subtitle C of title XIII of the Housing and Community 
     Development Act of 1992 (12 U.S.C. 4631 et seq.), as amended 
     by the preceding provisions of this Division, is amended--
       (1) in section 1372(c)(1) (12 U.S.C. 4632(c)), by striking 
     ``that enterprise'' and inserting ``that regulated entity'';
       (2) in section 1379 (12 U.S.C. 4637), as so redesignated by 
     section 166(a)(1) of this Division--
       (A) by inserting ``, or of a regulated entity-affiliated 
     party,'' before ``shall not affect''; and
       (B) by striking ``such director or executive officer'' each 
     place such term appears and inserting ``such director, 
     executive officer, or regulated entity-affiliated party'';
       (3) in section 1379A (12 U.S.C. 4638), as so redesignated 
     by section 166(a)(1) of this Division, by inserting ``or 
     against a regulated entity-affiliated party,'' before ``or 
     impair'';
       (4) by striking ``An enterprise'' each place such term 
     appears in such subtitle and inserting ``A regulated 
     entity'';
       (5) by striking ``an enterprise'' each place such term 
     appears in such subtitle and inserting ``a regulated 
     entity'';
       (6) by striking ``the enterprise'' each place such term 
     appears in such subtitle and inserting ``the regulated 
     entity''; and
       (7) by striking ``any enterprise'' each place such term 
     appears in such subtitle and inserting ``any regulated 
     entity''.

                     Subtitle E--General Provisions

     SEC. 181. BOARDS OF ENTERPRISES.

       (a) Fannie Mae.--

[[Page 5144]]

       (1) In general.--Section 308(b) of the Federal National 
     Mortgage Association Charter Act (12 U.S.C. 1723(b)) is 
     amended--
       (A) in the first sentence, by striking ``eighteen persons, 
     five of whom shall be appointed annually by the President of 
     the United States, and the remainder of whom'' and inserting 
     ``13 persons, or such other number that the Director 
     determines appropriate, who'';
       (B) in the second sentence, by striking ``appointed by the 
     President'';
       (C) in the third sentence--
       (i) by striking ``appointed or''; and
       (ii) by striking ``, except that any such appointed member 
     may be removed from office by the President for good cause'';
       (D) in the fourth sentence, by striking ``elective''; and
       (E) by striking the fifth sentence.
       (2) Transitional provision.--The amendments made by 
     paragraph (1) shall not apply to any appointed position of 
     the board of directors of the Federal National Mortgage 
     Association until the expiration of the annual term for such 
     position during which the effective date under Section 185 
     occurs.
       (b) Freddie Mac.--
       (1) In general.--Section 303(a)(2) of the Federal Home Loan 
     Mortgage Corporation Act (12 U.S.C. 1452(a)(2)) is amended--
       (A) in subparagraph (A)--
       (i) in the first sentence, by striking ``18 persons, 5 of 
     whom shall be appointed annually by the President of the 
     United States and the remainder of whom'' and inserting ``13 
     persons, or such other number as the Director determines 
     appropriate, who''; and
       (ii) in the second sentence, by striking ``appointed by the 
     President of the United States'';
       (B) in subparagraph (B)--
       (i) by striking ``such or''; and
       (ii) by striking ``, except that any appointed member may 
     be removed from office by the President for good cause''; and
       (C) in subparagraph (C)--
       (i) by striking the first sentence; and
       (ii) by striking ``elective''.
       (2) Transitional provision.--The amendments made by 
     paragraph (1) shall not apply to any appointed position of 
     the board of directors of the Federal Home Loan Mortgage 
     Corporation until the expiration of the annual term for such 
     position during which the effective date under Section 185 
     occurs.

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

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

     SEC. 183. CONFORMING AND TECHNICAL AMENDMENTS.

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

     SEC. 184. STUDY OF ALTERNATIVE SECONDARY MARKET SYSTEMS.

       (a) In General.--The Director of the Federal Housing 
     Finance Agency, in consultation with the Board of Governors 
     of the Federal Reserve System, the Secretary of the Treasury, 
     and the Secretary of Housing and Urban Development, shall 
     conduct a comprehensive study of the effects on financial and 
     housing finance markets of alternatives to the current 
     secondary market system for housing finance, taking into 
     consideration changes in the structure of financial and 
     housing finance markets and institutions since the creation 
     of the Federal National Mortgage Association and the Federal 
     Home Loan Mortgage Corporation.
       (b) Contents.--The study under this section shall--
       (1) include, among the alternatives to the current 
     secondary market system analyzed--
       (A) repeal of the chartering Acts for the Federal National 
     Mortgage Association and the Federal Home Loan Mortgage 
     Corporation;
       (B) establishing bank-like mechanisms for granting new 
     charters for limited purposed mortgage securitization 
     entities;
       (C) permitting the Director of the Federal Housing Finance 
     Agency to grant new charters for limited purpose mortgage 
     securitization entities, which shall include analyzing the 
     terms on which such charters should be granted, including 
     whether such charters should be sold, or whether such 
     charters and the charters for the Federal National Mortgage 
     Association and the Federal Home Loan Mortgage Corporation 
     should be taxed or otherwise assessed a monetary price; and
       (D) such other alternatives as the Director considers 
     appropriate;
       (2) examine all of the issues involved in making the 
     transition to a completely private secondary mortgage market 
     system;
       (3) examine the technological advancements the private 
     sector has made in providing liquidity in the secondary 
     mortgage market and how such advancements have affected 
     liquidity in the secondary mortgage market; and
       (4) examine how taxpayers would be impacted by each 
     alternative system, including the complete privatization of 
     the Federal National Mortgage Association and the Federal 
     Home Loan Mortgage Corporation.
       (c) Report.--The Director of the Federal Housing Finance 
     Agency shall submit a report to the Congress on the study not 
     later than the expiration of the 24-month period beginning on 
     the effective date under section 185.

     SEC. 185. EFFECTIVE DATE.

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

                   TITLE II--FEDERAL HOME LOAN BANKS

     SEC. 201. DEFINITIONS.

       Section 2 of the Federal Home Loan Bank Act (12 U.S.C. 
     1422) is amended--
       (1) by striking paragraphs (1), (10), and (11);
       (2) by redesignating paragraphs (2) through (9) as 
     paragraphs (1) through (8), respectively;

[[Page 5145]]

       (3) by redesignating paragraphs (12) and (13) as paragraphs 
     (9) and (10), respectively; and
       (4) by adding at the end the following:
       ``(11) Director.--The term `Director' means the Director of 
     the Federal Housing Finance Agency.
       ``(12) Agency.--The term `Agency' means the Federal Housing 
     Finance Agency.''.

     SEC. 202. DIRECTORS.

       (a) Election.--Section 7 of the Federal Home Loan Bank Act 
     (12 U.S.C. 1427) is amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) Number; Election; Qualifications; Conflicts of 
     Interest.--
       ``(1) In general.--The management of each Federal Home Loan 
     Bank shall be vested in a board of 13 directors, or such 
     other number as the Director determines appropriate, each of 
     whom shall be a citizen of the United States. All directors 
     of a Bank who are not independent directors pursuant to 
     paragraph (3) shall be elected by the members.
       ``(2) Member directors.--A majority of the directors of 
     each Bank shall be officers or directors of a member of such 
     Bank that is located in the district in which such Bank is 
     located.
       ``(3) Independent directors.--At least two-fifths of the 
     directors of each Bank shall be independent directors, who 
     shall be appointed by the Director of the Federal Housing 
     Finance Agency from a list of individuals recommended by the 
     Federal Housing Enterprise Board. The Federal Housing 
     Enterprise Board may recommend individuals who are identified 
     by the Board's own independent process or included on a list 
     of individuals recommended by the board of directors of the 
     Bank involved, which shall be submitted to the Federal 
     Housing Enterprise Board by such board of directors. The 
     number of individuals on any such list submitted by a Bank's 
     board of directors shall be equal to at least two times the 
     number of independent directorships to be filled. All 
     independent directors appointed shall meet the following 
     criteria:
       ``(A) In general.--Each independent director shall be a 
     bona fide resident of the district in which such Bank is 
     located.
       ``(B) Public interest directors.--At least 2 of the 
     independent directors under this paragraph of each Bank shall 
     be representatives chosen from organizations with more than a 
     2-year history of representing consumer or community 
     interests on banking services, credit needs, housing, 
     community development, economic development, or financial 
     consumer protections.
       ``(C) Other directors.--
       ``(i) Qualifications.--Each independent director that is 
     not a public interest director under subparagraph (B) shall 
     have demonstrated knowledge of, or experience in, financial 
     management, auditing and accounting, risk management 
     practices, derivatives, project development, or 
     organizational management, or such other knowledge or 
     expertise as the Director may provide by regulation.
       ``(ii) Consultation with banks.--In appointing other 
     directors to serve on the board of a Federal home loan bank, 
     the Director of the Federal Housing Finance Agency may 
     consult with each Federal home loan bank about the knowledge, 
     skills, and expertise needed to assist the board in better 
     fulfilling its responsibilities.
       ``(D) Conflicts of interest.--Notwithstanding subsection 
     (f)(2), an independent director under this paragraph of a 
     Bank may not, during such director's term of office, serve as 
     an officer of any Federal Home Loan Bank or as a director or 
     officer of any member of a Bank.
       ``(E) Community demographics.--In appointing independent 
     directors of a Bank pursuant to this paragraph, the Director 
     shall take into consideration the demographic makeup of the 
     community most served by the Affordable Housing Program of 
     the Bank pursuant to section 10(j).'';
       (2) in the first sentence of subsection (b), by striking 
     ``elective directorship'' and inserting ``member directorship 
     established pursuant to subsection (a)(2)'';
       (3) in subsection (c)--
       (A) by striking ``elective'' each place such term appears 
     and inserting ``member'', except--
       (i) in the second sentence, the second place such term 
     appears; and
       (ii) each place such term appears in the fifth sentence;
       (B) in the first sentence, by inserting after ``less than 
     one'' the following: ``or two, as determined by the board of 
     directors of the appropriate Federal home loan bank,''; and
       (C) in the second sentence--
       (i) by inserting ``(A) except as provided in clause (B) of 
     this sentence,'' before ``if at any time''; and
       (ii) by inserting before the period at the end the 
     following: ``, and (B) clause (A) of this sentence shall not 
     apply to the directorships of any Federal home loan bank 
     resulting from the merger of any two or more such banks''; 
     and
       (4) by striking ``elective'' each place such term appears 
     (except in subsections (c), (e), and (f)).
       (b) Terms.--
       (1) In general.--Section 7(d) of the Federal Home Loan Bank 
     Act (12 U.S.C. 1427(d)) is amended--
       (A) in the first sentence, by striking ``3 years'' and 
     inserting ``4 years''; and
       (B) in the second sentence--
       (i) by striking ``Federal Home Loan Bank System 
     Modernization Act of 1999'' and inserting ``Federal Housing 
     Finance Reform Act of 2007''; and
       (ii) by striking ``1/3'' and inserting ``1/4''.
       (2) Savings provision.--The amendments made by paragraph 
     (1) shall not apply to the term of office of any director of 
     a Federal home loan bank who is serving as of the effective 
     date of this title under section 211, including any director 
     elected to fill a vacancy in any such office.
       (c) Continued Service of Independent Directors After 
     Expiration of Term.--Section 7(f)(2) of the Federal Home Loan 
     Bank Act (12 U.S.C. 1427(f)(2)) is amended--
       (1) in the second sentence, by striking ``or the term of 
     such office expires, whichever occurs first'';
       (2) by adding at the end the following new sentence: ``An 
     independent Bank director may continue to serve as a director 
     after the expiration of the term of such director until a 
     successor is appointed.'';
       (3) in the paragraph heading, by striking ``Appointed'' and 
     inserting ``Independent''; and
       (4) by striking ``appointive'' each place such term appears 
     and inserting ``independent''.
       (d) Conforming Amendments.--Section 7(f)(3) of the Federal 
     Home Loan Bank Act (12 U.S.C. 1427(f)(3)) is amended--
       (1) in the paragraph heading, by striking ``Elected'' and 
     inserting ``Member''; and
       (2) by striking ``elective'' each place such term appears 
     in the first and third sentences and inserting ``member''.
       (e) Compensation.--Subsection (i) of section 7 of the 
     Federal Home Loan Bank Act (12 U.S.C. 1427(i)) is amended to 
     read as follows:
       ``(i) Directors' Compensation.--
       ``(1) In general.--Each Federal home loan bank may pay the 
     directors on the board of directors for the bank reasonable 
     and appropriate compensation for the time required of such 
     directors, and reasonable and appropriate expenses incurred 
     by such directors, in connection with service on the board of 
     directors, in accordance with resolutions adopted by the 
     board of directors and subject to the approval of the 
     Director.
       ``(2) Annual report by the board.--The Director shall 
     include, in the annual report submitted to the Congress 
     pursuant to section 1319B of the Federal Housing Enterprises 
     Financial Safety and Soundness Act of 1992, information 
     regarding the compensation and expenses paid by the Federal 
     home loan banks to the directors on the boards of directors 
     of the banks.''.
       (f) Transition Rule.--Any member of the board of directors 
     of a Federal Home Loan Bank serving as of the effective date 
     under section 211 may continue to serve as a member of such 
     board of directors for the remainder of the term of such 
     office as provided in section 7 of the Federal Home Loan Bank 
     Act, as in effect before such effective date.

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

       The Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.), 
     other than in provisions of that Act added or amended 
     otherwise by this Division, is amended--
       (1) by striking sections 2A and 2B (12 U.S.C. 1422a, 
     1422b);
       (2) in section 6 (12 U.S.C. 1426(b)(1))--
       (A) in subsection (b)(1), in the matter preceding 
     subparagraph (A), by striking ``Finance Board approval'' and 
     inserting ``approval by the Director''; and
       (B) in each of subsections (c)(4)(B) and (d)(2), by 
     striking ``Finance Board regulations'' each place that term 
     appears and inserting ``regulations of the Director'';
       (3) in section 8 (12 U.S.C. 1428), in the section heading, 
     by striking ``by the board'';
       (4) in section 10(b) (12 U.S.C. 1430(b)), by striking ``by 
     formal resolution'';
       (5) in section 10 (12 U.S.C. 1430), by adding at the end 
     the following new subsection:
       ``(k) Monitoring and Enforcing Compliance With Affordable 
     Housing and Community Investment Program Requirements.--The 
     requirements under subsection (i) and (j) that the Banks 
     establish Community Investment and Affordable Housing 
     Programs, respectively, and contribute to the Affordable 
     Housing Program, shall be enforceable by the Director with 
     respect to the Banks in the same manner and to the same 
     extent as the housing goals under subpart B of part 2 of 
     subtitle A of title XIII of the Housing and Community 
     Development Act of 1992 (12 U.S.C. 4561 et seq.) are 
     enforceable under section 1336 of such Act with respect to 
     the Federal National Mortgage Association and the Federal 
     Home Loan Mortgage Corporation.'';
       (6) in section 11 (12 U.S.C. 1431)--
       (A) in subsection (b)--
       (i) in the first sentence--

       (I) by striking ``The Board'' and inserting ``The Office of 
     Finance, as agent for the Banks,''; and
       (II) by striking ``the Board'' and inserting ``such 
     Office''; and

       (ii) in the second and fourth sentences, by striking ``the 
     Board'' each place such term appears and inserting ``the 
     Office of Finance'';

[[Page 5146]]

       (B) in subsection (c)--
       (i) by striking ``the Board'' the first place such term 
     appears and inserting ``the Office of Finance, as agent for 
     the Banks,''; and
       (ii) by striking ``the Board'' the second place such term 
     appears and inserting ``such Office''; and
       (C) in subsection (f)--
       (i) by striking the two commas after ``permit'' and 
     inserting ``or''; and
       (ii) by striking the comma after ``require'';
       (7) in section 15 (12 U.S.C. 1435), by inserting ``or the 
     Director'' after ``the Board'';
       (8) in section 18 (12 U.S.C. 1438), by striking subsection 
     (b);
       (9) in section 21 (12 U.S.C. 1441)--
       (A) in subsection (b)--
       (i) in paragraph (5), by striking ``Chairperson of the 
     Federal Housing Finance Board'' and inserting ``Director''; 
     and
       (ii) in the heading for paragraph (8), by striking 
     ``federal housing finance board'' and inserting ``director''; 
     and
       (B) in subsection (i), in the heading for paragraph (2), by 
     striking ``Federal housing finance board'' and inserting 
     ``Director'';
       (10) in section 23 (12 U.S.C. 1443), by striking ``Board of 
     Directors of the Federal Housing Finance Board'' and 
     inserting ``Director'';
       (11) by striking ``the Board'' each place such term appears 
     in such Act (except in section 15 (12 U.S.C. 1435), section 
     21(f)(2) (12 U.S.C. 1441(f)(2)), subsections (a), 
     (k)(2)(B)(i), and (n)(6)(C)(ii) of section 21A (12 U.S.C. 
     1441a), subsections (f)(2)(C), and (k)(7)(B)(ii) of section 
     21B (12 U.S.C. 1441b), and the first two places such term 
     appears in section 22 (12 U.S.C. 1442)) and inserting ``the 
     Director'';
       (12) by striking ``The Board'' each place such term appears 
     in such Act (except in sections 7(e) (12 U.S.C. 1427(e)), and 
     11(b) (12 U.S.C. 1431(b)) and inserting ``The Director'';
       (13) by striking ``the Board's'' each place such term 
     appears in such Act and inserting ``the Director's'';
       (14) by striking ``The Board's'' each place such term 
     appears in such Act and inserting ``The Director's'';
       (15) by striking ``the Finance Board'' each place such term 
     appears in such Act and inserting ``the Director'';
       (16) by striking ``Federal Housing Finance Board'' each 
     place such term appears and inserting ``Director'';
       (17) in section 11(i) (12 U.S.C. 1431(i), by striking ``the 
     Chairperson of''; and
       (18) in section 21(e)(9) (12 U.S.C. 1441(e)(9)), by 
     striking ``Chairperson of the''.

     SEC. 204. JOINT ACTIVITIES OF BANKS.

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

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

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

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

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

     SEC. 206. REORGANIZATION OF BANKS AND VOLUNTARY MERGER.

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

     SEC. 207. SECURITIES AND EXCHANGE COMMISSION DISCLOSURE.

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

     SEC. 208. COMMUNITY FINANCIAL INSTITUTION MEMBERS.

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

     SEC. 209. TECHNICAL AND CONFORMING AMENDMENTS.

       (a) Right to Financial Privacy Act of 1978.--Section 
     1113(o) of the Right to Financial Privacy Act of 1978 (12 
     U.S.C. 3413(o)) is amended--
       (1) by striking ``Federal Housing Finance Board'' and 
     inserting ``Federal Housing Finance Agency''; and
       (2) by striking ``Federal Housing Finance Board's'' and 
     inserting ``Federal Housing Finance Agency's''.
       (b) Riegle Community Development and Regulatory Improvement 
     Act of 1994.--Section 117(e) of the Riegle Community 
     Development and Regulatory Improvement Act of 1994 (12 U.S.C. 
     4716(e)) is amended by striking ``Federal Housing Finance 
     Board'' and inserting ``Federal Housing Finance Agency''.
       (c) Title 18, United States Code.--Title 18, United States 
     Code, is amended by striking ``Federal Housing Finance 
     Board'' each place such term appears in each of sections

[[Page 5147]]

     212, 657, 1006, 1014, and inserting ``Federal Housing Finance 
     Agency''.
       (d) MARA Act of 1997.--Section 517(b)(4) of the Multifamily 
     Assisted Housing Reform and Affordability Act of 1997 (42 
     U.S.C. 1437f note) is amended by striking ``Federal Housing 
     Finance Board'' and inserting ``Federal Housing Finance 
     Agency''.
       (e) Title 44, United States Code.--Section 3502(5) of title 
     44, United States Code, is amended by striking ``Federal 
     Housing Finance Board'' and inserting ``Federal Housing 
     Finance Agency''.
       (f) Access to Local TV Act of 2000.--Section 
     1004(d)(2)(D)(iii) of the Launching Our Communities' Access 
     to Local Television Act of 2000 (47 U.S.C. 
     1103(d)(2)(D)(iii)) is amended by striking ``Office of 
     Federal Housing Enterprise Oversight, the Federal Housing 
     Finance Board'' and inserting ``Federal Housing Finance 
     Agency''.
       (g) Sarbanes-Oxley Act of 2002.--Section 
     105(b)(5)(B)(ii)(II) of the Sarbanes-Oxley Act of 2002 (15 
     U.S.C. 7215(B)(5)(b)(ii)(II)) is amended by inserting ``and 
     the Director of the Federal Housing Finance Agency'' after 
     ``Commission,''.

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

       The Comptroller General shall conduct a study of the use of 
     affordable housing programs of the Federal home loan banks 
     under section 10(j) of the Federal Home Loan Bank Act to 
     determine how and the extent to which such programs are used 
     to assist long-term care facilities for low- and moderate-
     income individuals, and the effectiveness and adequacy of 
     such assistance in meeting the needs of affected communities. 
     The study shall examine the applicability of such use to the 
     affordable housing programs required to be established by the 
     enterprises pursuant to the amendment made by section 139 of 
     this Division. The Comptroller General shall submit a report 
     to the Director of the Federal Housing Finance Agency and the 
     Congress regarding the results of the study not later than 
     the expiration of the 1-year period beginning on the date of 
     the enactment of this Act. This section shall take effect on 
     the date of the enactment of this Act.

     SEC. 211. EFFECTIVE DATE.

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

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

       Subtitle A--Office of Federal Housing Enterprise Oversight

     SEC. 301. ABOLISHMENT OF OFHEO.

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

     SEC. 302. CONTINUATION AND COORDINATION OF CERTAIN 
                   REGULATIONS.

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

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

       (a) Transfer.--Each employee of the Office of Federal 
     Housing Enterprise Oversight shall be transferred to the 
     Federal Housing Finance Agency for employment no later than 
     the date of the abolishment under section 301(a) of this 
     Division and such transfer shall be deemed a transfer of 
     function for purposes of section 3503 of title 5, United 
     States Code.
       (b) Guaranteed Positions.--Each employee transferred under 
     subsection (a) shall be guaranteed a position with the same 
     status, tenure, grade, and pay as that held on the day 
     immediately preceding the transfer. Each such employee 
     holding a permanent position shall not be involuntarily 
     separated or reduced in grade or compensation for 12 months 
     after the date of transfer, except for cause or, if the 
     employee is a temporary employee, separated in accordance 
     with the terms of the appointment.
       (c) Appointment Authority for Excepted Service Employees.--
       (1) In general.--In the case of employees occupying 
     positions in the excepted service, any appointment authority 
     established pursuant to law or regulations of the Office of 
     Personnel Management for filling such positions shall be 
     transferred, subject to paragraph (2).
       (2) Decline of transfer.--The Director of the Federal 
     Housing Finance Agency may decline a transfer of authority 
     under paragraph (1) (and the employees appointed pursuant 
     thereto) to the extent that such authority relates to 
     positions excepted from the competitive service because of 
     their confidential, policy-making, policy-determining, or 
     policy-advocating character.
       (d) Reorganization.--If the Director of the Federal Housing 
     Finance Agency determines, after the end of the 1-year period 
     beginning on the date of the abolishment under section 
     301(a), that a reorganization of the combined work force is 
     required, that reorganization shall be deemed a major 
     reorganization for purposes of affording affected employees 
     retirement under section 8336(d)(2) or 8414(b)(1)(B) of title 
     5, United States Code.
       (e) Employee Benefit Programs.--Any employee of the Office 
     of Federal Housing Enterprise Oversight accepting employment 
     with the Director of the Federal Housing Finance Agency as a 
     result of a transfer under subsection (a) may retain for 12 
     months after the date such transfer occurs membership in any 
     employee benefit program of the Federal Housing Finance 
     Agency or the Office of Federal Housing Enterprise Oversight, 
     as applicable, including insurance, to which such employee 
     belongs on the date of the abolishment under section 301(a) 
     if--
       (1) the employee does not elect to give up the benefit or 
     membership in the program; and

[[Page 5148]]

       (2) the benefit or program is continued by the Director of 
     the Federal Housing Finance Agency,

     The difference in the costs between the benefits which would 
     have been provided by such agency and those provided by this 
     section shall be paid by the Director of the Federal Housing 
     Finance Agency. If any employee elects to give up membership 
     in a health insurance program or the health insurance program 
     is not continued by such Director, the employee shall be 
     permitted to select an alternate Federal health insurance 
     program within 30 days of such election or notice, without 
     regard to any other regularly scheduled open season.

     SEC. 304. TRANSFER OF PROPERTY AND FACILITIES.

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

               Subtitle B--Federal Housing Finance Board

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

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

     SEC. 322. CONTINUATION AND COORDINATION OF CERTAIN 
                   REGULATIONS.

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

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

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

     SEC. 324. TRANSFER OF PROPERTY AND FACILITIES.

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

        Subtitle C--Department of Housing and Urban Development

     SEC. 341. TERMINATION OF ENTERPRISE-RELATED FUNCTIONS.

       (a) Termination Date.--For purposes of this subtitle, the 
     term ``termination date'' means the date that occurs 6 months 
     after the date of the enactment of this Act.
       (b) Determination of Transferred Functions and Employees.--
       (1) In general.--Not later than the expiration of the 3-
     month period beginning on the date of the enactment of this 
     Act, the Secretary, in consultation with the Director of the 
     Office of Federal Housing Enterprise Oversight, shall 
     determine--
       (A) the functions, duties, and activities of the Secretary 
     of Housing and Urban Development regarding oversight or 
     regulation of the enterprises under or pursuant to the 
     authorizing statutes, title XIII of the Housing and Community 
     Development Act of 1992, and any other provisions of law, as 
     in effect before the date of the enactment of this Act, but 
     not including any such functions, duties, and activities of 
     the Director of the Office of Federal Housing Enterprise 
     Oversight of the Department of Housing and Urban Development 
     and such Office; and
       (B) the employees of the Department of Housing and Urban 
     Development necessary to perform such functions, duties, and 
     activities.

[[Page 5149]]

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

     SEC. 342. CONTINUATION AND COORDINATION OF CERTAIN 
                   REGULATIONS.

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

     SEC. 343. TRANSFER AND RIGHTS OF EMPLOYEES OF DEPARTMENT OF 
                   HOUSING AND URBAN DEVELOPMENT.

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

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

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

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