[House Report 110-142]
[From the U.S. Government Publishing Office]



110th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    110-142

======================================================================



 
               FEDERAL HOUSING FINANCE REFORM ACT OF 2007

                                _______
                                

  May 9, 2007.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Frank of Massachusetts, from the Committee on Financial Services, 
                        submitted the following

                              R E P O R T

                             together with

                    ADDITIONAL AND DISSENTING VIEWS

                        [To accompany H.R. 1427]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Financial Serivces, to whom was referred the 
bill (H.R. 1427) to reform the regulation of certain housing-
related Government-sponsored enterprises, and for other 
purposes, having considered the same, report favorably thereon 
with an amendment and recommend that the bill as amended do 
pass.

                                CONTENTS

                                                                   Page
Amendment........................................................     2
Purpose and Summary..............................................    87
Background and Need for Legislation..............................    95
Hearings.........................................................    98
Committee Consideration..........................................    98
Committee Votes..................................................    99
Committee Oversight Findings.....................................   108
Performance Goals and Objectives.................................   108
New Budget Authority, Entitlement Authority, and Tax Expenditures   108
Committee Cost Estimate..........................................   108
Congressional Budget Office Estimate.............................   108
Federal Mandates Statement.......................................   117
Advisory Committee Statement.....................................   117
Constitutional Authority Statement...............................   118
Applicability to Legislative Branch..............................   118
Earmark Identification...........................................   118
Exchange of Committee Correspondence.............................   119
Section-by-Section Analysis of the Legislation...................   125
Changes in Existing Law Made by the Bill, as Reported............   148
Additional and Dissenting Views..................................   338

                               Amendment

  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Federal Housing 
Finance Reform Act of 2007''.
  (b) Table of Contents.--The table of contents for this Act 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. Revision of housing goals.
Sec. 137. Duty to serve underserved markets.
Sec. 138. Monitoring and enforcing compliance with housing goals.
Sec. 139. Affordable Housing Fund.
Sec. 140. Consistency with mission.
Sec. 141. Enforcement.
Sec. 142. 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.

                   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.'';
          (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 Act, 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, 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 Act, 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 5 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;
          ``(3) one member shall be the Director, who shall serve as 
        the Chairperson of the Board; and
          ``(4) two members, who shall be appointed by the President, 
        by and with the advise and consent of the Senate, who are 
        experts or experienced in the field of financial services, 
        housing finance, affordable housing, or mortgage lending.
The members pursuant to paragraph (4) shall be appointed for a term of 
four years. The Board may not, at any time, have more than three 
members of the same political party.
  ``(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;
          ``(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 Act, 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, 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 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:

``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 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 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 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 
C.F.R. 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 Act, 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 Act, 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:

   ``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 Act, 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 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 Act) is amended by inserting after 
section 1321 (as added by section 132 of this Act) 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 Act.
          (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 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. 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 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--
          ``(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 Act, 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. 137. 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 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. 138. 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. 139. 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.
          ``(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.
  ``(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 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, completed a program of counseling with 
                respect to the responsibilities and financial 
                management involved in homeownership that is approved 
                by the Director; 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.
  ``(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 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. 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.''.
  (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 Act, 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. 140. 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 Act, 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. 141. 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. 142. 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--
          (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
          ``(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.
                  ``(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 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 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--
                                  ``(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 Act, 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;
                                  ``(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 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 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 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 Act, 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 Act--
                  (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 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;
                          ``(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 
                        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 Act) 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 
Act, 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 Act, 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 Act--
                  (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 Act, 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.--
          (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.

                   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;
          (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, and 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; and
                  (B) 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 Act, 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'';
                  (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 Act.

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 Act, 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 212, 657, 1006, 1014, and inserting 
``Federal Housing Finance Agency''.
  (d) MAHRA 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 
Act. 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 Act or any amendment made by this Act to any 
        other provision of law.
          (2) Agency services.--Any agency, department, or other 
        instrumentality of the United States, and any successor to any 
        such agency, department, or instrumentality, which was 
        providing supporting services to the Office of Federal Housing 
        Enterprise Oversight before the expiration of the period under 
        subsection (a) in connection with functions that are 
        transferred to the Director 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 Act, 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 Act 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
          (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 Act or any amendment made by this 
        Act to any other provision of law.
          (2) Agency services.--Any agency, department, or other 
        instrumentality of the United States, and any successor to any 
        such agency, department, or instrumentality, which was 
        providing supporting services to the Board before the 
        expiration of the 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.
          (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 Act or any amendment made by 
        this Act to any other provision of law.
          (2) Agency services.--Any agency, department, or other 
        instrumentality of the United States, and any successor to any 
        such agency, department, or instrumentality, which was 
        providing supporting services to the 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.

                          Purpose and Summary

    H.R. 1427, the Federal Housing Finance Reform Act of 2007, 
was introduced on March 9, 2007, by Financial Services 
Committee Chairman Barney Frank, with Mr. Watt, Mr. Baker, and 
Mr. Gary G. Miller. H.R. 1427 is based in significant part on a 
bill passed by the House in the 109th Congress by a vote of 
331-90. Modifications have been made in several areas of the 
bill in this Congress to reflect discussions with the U.S. 
Department of the Treasury late in the last Congress. The 
purpose of the bill is to ensure that the government sponsored 
enterprises supporting the mortgage markets operate in a safe 
and sound manner and fulfill the missions assigned under their 
charters, both through establishment of a strong, independent 
regulator and through enhancements to their mission 
responsibilities.

                      SUMMARY OF MAJOR PROVISIONS

    H.R. 1427 establishes the Federal Housing Finance Agency 
(FHFA or Agency) as an independent agency to oversee the safe 
and sound operations as well as the mission functions of the 
housing government sponsored enterprises (GSEs)--Fannie Mae, 
Freddie Mac, and the 12 Federal Home Loan Banks (collectively, 
the regulated entities). The Agency assumes the supervisory 
duties of the Office of Federal Housing Enterprise Oversight 
(OFHEO), the Federal Housing Finance Board (Finance Board), and 
the Department of Housing and Urban Development (HUD) (with 
respect to mission oversight of Fannie Mae and Freddie Mac).
    The independent agency created in this legislation is 
headed by a Director appointed by the President and confirmed 
by the Senate for a five-year term. The Director will appoint 
three deputy directors: a Deputy Director of the Division of 
Enterprise Regulation; a Deputy Director of Federal Home Loan 
Bank Regulation; and a Deputy Director for Housing. Among other 
things, this supervisory structure recognizes the unique nature 
of, and differences between, the Federal Home Loan Banks and 
the enterprises.
    An oversight board (called the Federal Housing Enterprise 
Board) is created to advise the Director with respect to 
overall strategies and policies in carrying out the duties of 
the Director. The Enterprise Board will consist of the Director 
of the Agency, the Secretaries of Treasury and HUD, and two 
additional appointed directors. Funding for the Agency is to be 
provided by an annual assessment by the Agency on the regulated 
entities for the FHFA's reasonable costs and expenses. 
Congressional appropriations approval is not required.

Safety and soundness provisions

    The legislation strengthens the existing safety and 
soundness oversight of the regulated entities, particularly 
with respect to Fannie Mae and Freddie Mac (the enterprises), 
providing the new regulator with safety and soundness authority 
that is comparable to and in some areas broader than that of 
the federal bank regulatory agencies. Under the legislation, 
the Director of the Agency will have enhanced authority in 
several areas critical to the safety and soundness of the GSEs:
    Capital. The legislation provides the Agency significantly 
strengthened authority to establish appropriate capital 
standards for the regulated entities. In particular, the 
legislation removes restrictions on authority of the 
enterprises' current regulator that limit the regulator's 
ability to impose risk-based capital requirements that cover 
the full range of risks encountered by the enterprises. 
Instead, the Agency will have broad authority to establish and 
adjust risk-based capital standards and critical capital levels 
for all of the regulated entities in order to ensure that they 
operate in a safe and sound manner and maintain sufficient 
capital reserves. The Committee expects that the new regulator 
will use this expanded authority to determine whether the 
existing rules for the enterprises, which focus primarily on 
interest rate risk, should be strengthened, supplemented, or 
replaced, such as with standards that focus on the particular 
assets held by the enterprises. The Committee believes that 
providing the Agency flexibility to establish comprehensive 
risk-based capital standards will considerably enhance ongoing 
oversight of the safety and soundness oversight of the 
enterprises, particularly in a prompt corrective action 
framework, and that strong risk-based capital rules, combined 
with appropriate risk management and supervisory oversight, are 
the best means of ensuring that the enterprises operate safely.
    As is the case under banking laws and regulations, a robust 
risk-based capital regime is an effective first line of defense 
in a strong financial oversight system. The legislation 
provides, as a further safeguard to address issues related to 
safety and soundness, significant new authority to the Agency 
with respect to minimum capital requirements. The Agency will 
have the authority to adopt rules to revise the minimum capital 
levels of the enterprises or the Federal Home Loan Banks, or 
both, to the extent needed to ensure that they operate in a 
safe and sound manner. The Agency is given specific authority 
to increase the minimum capital requirement for an individual 
regulated entity by order on a temporary basis to address 
certain violations or unsafe and unsound conditions, with 
temporary increases rescinded when the underlying conditions 
are remedied. The legislation also provides the Agency 
authority to establish capital or reserve requirements for 
specific programs or activities of the regulated entities.
    In all cases, the Committee expects the Agency to exercise 
this authority in a manner consistent with that of the federal 
banking regulators, by establishing capital requirements 
necessary to ensure the safety and soundness of the regulated 
entities themselves, and not to address broader issues of 
potential risk to the financial system unrelated to oversight 
of the safety and soundness of the regulated entities.
    Prudential standards. The Agency is provided authority to 
set prudential management and operations standards for the 
regulated entities, confirming and clarifying the authority of 
the enterprises' current regulator to adopt such standards. The 
requirements of the legislation for the adoption of prudential 
standards are broadly comparable to the requirements currently 
applicable to the federal bank regulatory agencies. As with the 
bank regulatory agencies, the Agency would be required to 
establish standards for internal controls, internal audit, 
liquidity, asset and investment management, record systems, and 
management of interest rate, market, and credit risk, as well 
as other operational and management standards the Agency 
determines are appropriate.
    Portfolio standards. In addition to the prudential 
standards requirements, the legislation includes a specific 
requirement for the establishment of standards for the safe and 
sound and mission-compliant operation of the enterprises' 
portfolios. The factors to be considered are limited 
accordingly to the safety and soundness and mission of the 
enterprises themselves, and not to the competitive or financial 
impact on other market participants. The Committee expects the 
new regulator to establish standards governing the future 
operation and growth of the portfolios that will both ensure 
the safety and soundness of the enterprises and enable them to 
provide the support for the secondary mortgage markets 
contemplated under their charters. The standards required under 
this section are not intended to address potential risks to the 
financial system unrelated to oversight of the safe and sound 
operation of the portfolios of the enterprises themselves. To 
be clear, any system risk that results from the unsafe or 
unsound operations of the portfolios will clearly be addressed 
when safety and soundness is addressed. However, the Committee 
does not believe that systemic risk can be attributed to the 
operation of the portfolios if they are operating in a safe and 
sound manner. Therefore, the requirement for the development of 
standards is not intended to permit the new regulator to place 
arbitrary limits on the size of the portfolios of the 
enterprises.
    This legislation further requires that the Director monitor 
the portfolios of the enterprises and provides the Director 
with the extraordinary authority to require an enterprise to 
dispose of or acquire assets, if the Director determines that 
such action is consistent with the safety and soundness or 
mission of the enterprise and is justified by the Director's 
regulatory responsibilities. The Committee expects this 
authority to be used solely as necessary to ensure the safety 
and soundness of the enterprises or their compliance with the 
requirements of their charters. As with the portfolio 
standards, the Committee does not expect this authority to be 
used to place arbitrary limits on the size of the enterprises' 
portfolios.
    Prompt corrective action. The legislation strengthens the 
existing requirements for prompt corrective action by the 
regulator in response to conditions that could result in 
significant degradation of the capital of the regulated 
entities. H.R. 1427 requires the Director to establish capital 
classifications for the regulated entities similar to those 
which exist for federally regulated banks and provides 
authority for the Director to take actions to return the 
enterprise to financial health.
    Insolvency. The legislation would provide the new regulator 
with the authority to place a regulated entity into 
conservatorship or receivership if the Director determines that 
one or more of the statutory grounds exists. The new regulator 
also has authority to place a regulated entity that has been 
classified as critically undercapitalized entity into 
conservatorship or receivership. Further, the regulator must 
place the entity into receivership if the Agency determines 
that the debts of the entity have exceeded its assets for 30 
days or the entity has not been paying its debts as they became 
due for 30 days. The conservatorship and receivership 
provisions were modeled after similar provisions in the Federal 
Deposit Insurance Act that apply to federally insured 
depository institutions.
    These provisions are intended to address a criticism of the 
current regulatory regime for the enterprises, under which the 
existing regulator does not have the authority to place an 
enterprise in receivership, which some critics believe has led 
to inadequate market discipline with respect to the operations 
of the enterprises. Additionally, the legislation provides for 
the first time a specific framework for receivership of a 
Federal Home Loan Bank.
    Enforcement powers. The legislation strengthens the 
existing enforcement powers of the current regulators. The 
Agency is vested with cease-and-desist powers, if the Director 
has reasonable cause to believe that the regulated entity or an 
affiliated party is engaged in an unsafe or unsound practice or 
other violation of law. The Agency is empowered to issue civil 
money penalties and has the authority to remove management.
    Federal Home Loan Bank operations. H.R. 1427 improves the 
operations of the Federal Home Loan Bank System by permitting 
the formation of joint offices by two or more Banks, specifying 
that joint offices are subject to supervision and oversight to 
the same extent as are the Banks, requiring sharing of 
information among the Banks, and raising the total asset 
eligibility cap for community financial institution members 
that use advances for additional lending activities. Two or 
more Banks are permitted to merge with approval of the boards 
of the Banks involved and the Agency. The legislation reforms 
the method by which each Bank elects its board of directors, 
requiring that two-fifths be independent directors with at 
least two being public interest directors.
    Other. The legislation includes a variety of additional 
measures intended to strengthen the new regulator, such as a 
provision adding the Agency as a liaison member of the Federal 
Financial Institutions Examination Council (FFIEC), as well as 
measures intended to strengthen the operation of the 
enterprises and Federal Home Loan Banks, such as corporate 
governance improvements and requirements for the composition, 
operation, and compensation of the boards of directors of the 
enterprises.

Mission Oversight

    New product review. Under the legislation, the authority to 
review and approve new products is transferred from HUD to the 
Agency. New products will be subject to a public notice and 
comment period before an enterprise can initially offer the 
product. The Director must approve or deny the product within 
30 days after the close of the public comment period; if the 
Director does not act within 30 days, the enterprise may offer 
the product. A product may only be approved if it is authorized 
by law, in the public interest, consistent with safety and 
soundness of the enterprise and the mortgage finance system, 
and does not materially impair the efficiency of the mortgage 
finance system. The legislation also provides for an expedited 
review process for any new activity, service, undertaking or 
offering that an enterprise determines is not a product. The 
Agency must be notified of any such activity, must determine 
whether the activity, service, undertaking, or offering 
consists of, relates to, or involves a product and, if so, must 
notify the enterprise of that determination and treat the new 
activity, service, undertaking or offering as a product.
    The definition of the term ``product'' explicitly excludes 
the automated underwriting system of an enterprise in existence 
on the date of enactment, including any upgrade to the 
technology, operating system, or software to operate the 
system. The term ``product'' also does not include 
modifications to 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 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. The term ``product'' 
is not defined in the legislation, other than by the exclusion.
    The Committee believes that the legislation provides the 
Agency with the flexibility to establish a workable system that 
will provide predictability as to what offerings or changes to 
existing offerings rise to the level of a new product that will 
be subject to notice and approval, addressing both the need to 
provide notice to market participants of new products and the 
need for the enterprises to respond in a timely manner to 
market demands. The Committee intends that the Agency will look 
to similar processes developed by the federal bank regulatory 
agencies in establishing procedures to minimize unnecessary 
burden on the enterprises and originating institutions while 
fulfilling the objectives of the provision.
    The provision does not apply to existing products or 
activities that were commenced or offered prior to the 
enactment of this legislation, but does not limit the authority 
of the Agency to review products and activities for safety and 
soundness and compliance with the enterprises' respective 
charters.
    Conforming loan limits. The bill updates the statutory 
conforming loan limit dollar amounts to reflect 2007 levels, 
and requires the Agency to adjust the conforming loan limit 
according to the annual housing price index maintained by the 
Agency. An additional high-cost area limit is authorized for 
areas where the median home sales price with respect to certain 
properties in that area exceeds the generally conforming loan 
limit, up to the lower of 150 percent of the conforming loan 
limit or the median home price for such properties in that 
area. This is consistent with current statutory authority for 
loan limits to go up to 150 percent of the nationwide 
conforming loan limit in Alaska, Hawaii, and U.S. territories. 
Loans in high-cost areas above the general conforming loan 
limit must be securitized. The Director will conduct a study of 
whether the securitization requirement raises the cost of high-
cost area loans, and may terminate the requirement if it is 
found to raise costs.
    Affordable Housing Goals. The affordable housing goals are 
revised to target these numerical goals to better meet the 
needs of lower income borrowers and communities, and to better 
align the income categories with the Community Reinvestment 
Act, in order to augment financial institutions' activities in 
serving low- and very-low income communities and families. The 
goals are also revised to create a statutory multifamily loan 
goal.
    Under existing law, the enterprises must meet three annual 
housing goals established by HUD. These goals measure all 
single-family and multi-family mortgage purchases (including 
refinancings), and have been set as a percentage of total 
mortgage purchases that meet the three statutory goal 
categories, which are based on area median income (AMI), as 
follows: (1) ``low-income'' (less than 100 percent of AMI): (2) 
``special affordable'' (less than 60 percent of AMI plus less 
than 80 percent of AMI in low-income areas; and (3) ``central 
cities, rural areas and other underserved areas'' (families in 
census tracts below 90 percent of AMI, plus families in 
minority census tracts below 120 percent of AMI). In addition, 
HUD has authority to establish subgoals, and currently uses 
such authority to establish home purchase subgoals and a multi-
family subgoal, which is volume-based.
    This legislation better targets these goals, by creating 3 
single family owner occupied affordable housing goals, 
measuring mortgages that serve families which are: (1) ``low 
income'' (less than 80 percent of AMI), (2) ``very low income'' 
(less than 50 percent of AMI), and (3) living in census tracts 
below 80 percent of AMI plus those families below 100 percent 
of AMI living in minority census tracts. To reflect the 
narrowing of the types of loans measured, a statutory subgoal 
is established for refinancings, and a separate statutory 
subgoal is established for single family rental housing units.
    In addition, the bill creates a statutory multifamily 
housing goal, to be based on loan volume, measuring units 
assisting low income families, very low income families, and 
units assisted by low income housing tax credits. The bill also 
requires establishment of additional requirements for smaller 
multifamily housing projects.
    In establishing these goals, the legislation also 
recognizes that a verifiable measurement baseline is necessary 
to ensure consistency and accuracy over time. The Director is 
required to establish the single-family goals on Home Mortgage 
Disclosure Act (HMDA) data by using the prior 3-year market 
averages for each goal category, with authority to adjust such 
goals to reflect expected changes in market performance, using 
factors similar to those in current statute regarding goal 
establishment, and with a requirement that the enterprises must 
lead the market in each goal area. In addition, the Director 
must assign added credit toward achievement of the housing 
goals for mortgage purchase activities of an enterprise that 
supports housing that includes a licensed childcare center, or 
that supports housing that meets energy efficiency or other 
Federal, State or local environmental standards for the 
geographic area where the housing is located.
    Duty to Serve. The bill also creates a statutory duty for 
the enterprises to serve underserved markets that lack adequate 
credit through conventional lending sources. The bill specifies 
three areas--manufactured housing, affordable housing 
preservation, and rural housing--and gives the Director 
authority to establish other underserved markets. Enterprises 
are required to develop loan products and flexible underwriting 
guidelines, and are to be evaluated on this basis, as well as 
the extent of outreach to qualified loan sellers and the volume 
of loans purchased. However, it is not intended that the 
Director would create percent-of-business or other numeric 
goals under this section.
    Affordable Housing Fund. The legislation creates an 
``Affordable Housing Fund,'' to be managed by the Director. 
Funds are derived through contributions to be made by Fannie 
Mae and Freddie Mac each year from 2007 through 2012, with the 
fund sunsetting after this five year period. Contributions are 
to be made in amounts equal to 1.2 basis points on each 
enterprise's average total outstanding mortgages (including 
both those held in portfolio and those securitized) from the 
prior calendar year. Seventy-five percent of these funds are 
used for affordable housing fund purposes, and twenty-five 
percent are allocated to the federal government as payments to 
REFCORP, in order to keep the bill deficit neutral. The 
Director can temporarily suspend allocations by an enterprise 
upon a finding that the allocation would contribute to the 
financial instability of the enterprise, would cause the 
enterprise to be undercapitalized or would prevent the 
enterprise from successfully completing a capital restoration 
plan.
    Seventy-five percent of the affordable housing funds 
available in the first year will go to Louisiana and twenty-
five percent of such funds will go to Mississippi for 
affordable housing needs arising out of Hurricanes Katrina and 
Rita. Thereafter, funds are allocated by formula to the states 
(including also D.C., federal territories, and federally 
recognized tribes). This formula is to be developed by HUD, and 
is to be based on a number of factors, including population, 
housing affordability, percentage of very and extremely low 
income families, cost of rehab, and extent of substandard and 
aging housing. If HUD fails to establish this formula on time, 
funds are distributed to states based on HOME allocations to 
states and Participating Jurisdictions.
    One-hundred percent of funds must be used for the benefit 
of very low (below 50 percent of AMI) and extremely low (below 
30 percent of AMI) income families. Very- and extremely low-
income families are traditionally the hardest groups to provide 
affordable housing to without the availability of subsidies, 
and existing programs are often unable to provide the level of 
subsidies necessary to make rents affordable for such families. 
Funds may be used for both rental housing and homeownership, 
with at least ten percent of funds used by each state for home 
ownership. Home ownership purposes may include down payment 
assistance, closing costs, and assistance for interest-rate 
buy-downs for very low and extremely low income households who 
are first-time homebuyers. Families receiving homeownership 
assistance must have completed prepurchase counseling prior to 
buying the home. Funds also may be used for public 
infrastructure activities in conjunction with housing, but no 
more than 12.5 percent of funds in any state may be used for 
this purpose.
    Affordable housing grants are to be made to eligible 
recipients, which can be any organization, agency, or other 
entity (including a for-profit entity, a nonprofit entity, or a 
faith-based organization) that has a demonstrated capacity to 
carry out the proposed fund use. Grantee funds may only be used 
for affordable housing uses, and not for administrative costs, 
except that by regulation the Director can limit the amount of 
any grant amounts a state (or DC, a territory, or tribe) may 
use for administrative costs of carrying out the program to a 
percentage of such grant amounts, which may not exceed 10 
percent of grant funds used.
    Each state allocates funds under its own Allocation Plan, 
to be based on priority housing needs in each state, and on 
criteria that include greatest impact, geographic diversity, 
ability to obligate funds in a timely manner, and the extent to 
which rental housing projects are affordable, especially for 
extremely low income families. Funds are redistributed from any 
state that does not obligate funds within 2 years.
    The bill contains a number of provisions to ensure that AHF 
funds are used for the specified housing purposes and are not 
misused or used for other purposes, including an explicit 
prohibition against fund use for political activities, 
advocacy, lobbying, counseling, travel expenses, or preparation 
or advice on tax returns. The bill provides that funds 
allocated for the affordable housing fund, may be transferred 
at a later date to a national Affordable Housing Trust Fund 
that may be subsequently enacted into law.
    The GAO shall conduct a study and report to Congress within 
one year of enactment concerning the effect the AHF will have 
on availability and affordability of credit for homebuyers, and 
the extent to which the costs to the enterprises of funding the 
AHF will be passed on to homebuyers.
    Transition provisions. The bill ensures that OFHEO, the 
Finance Board, and the offices in HUD that oversee Fannie Mae 
and Freddie Mac will continue their supervisory roles during 
the six-month period between the enactment and effective dates. 
During this time, OFHEO, the Finance Board, and HUD will have 
continued authority to issue regulations, ensure the safe and 
sound operation, and monitor the mission functions of the GSEs. 
On the effective date, all OFHEO, Finance Board, and HUD 
employees involved in the oversight of the GSEs will be 
transferred to the new Agency. All of the existing regulations 
from the former regulatory agencies will remain in force under 
the new Agency.

                  Background and Need for Legislation

    Freddie Mac, Fannie Mae, and several of the Federal Home 
Loan Banks have experienced considerable accounting, financial 
reporting, and managerial problems in recent years. Significant 
operational and safety and soundness issues that have appeared 
since 2001 have highlighted the need to fortify the supervisory 
structure for all of the regulated entities to ensure that they 
conduct their business in a safe and sound manner and fulfill 
their statutory missions.
    Fannie Mae and Freddie Mac were chartered by Congress in 
order to create a secondary market and increase liquidity in 
the home mortgage markets. Through their charters, the GSEs are 
granted special privileges not available to other private-
sector firms. The Secretary of the Treasury is authorized, in 
his discretion, to purchase up to $2.25 billion of any 
obligations of the enterprises. The enterprises are exempt from 
state regulation, state income taxation, and SEC registration.
    Fannie Mae and Freddie Mac buy residential mortgages from 
lenders and finance the purchases either by issuing debt 
securities or by packaging mortgages in the form of mortgage 
backed securities (MBS), on which they guarantee payment for a 
fee. Purchasers of the debt and MBS include mutual funds, major 
financial institutions, pension funds, insurance companies, 
individual investors, central banks, and other institutions in 
foreign countries. The safety and soundness of the enterprises 
is regulated by the Office of Federal Housing Enterprise 
Oversight (OFHEO). HUD is responsible for mission regulation of 
the enterprises.
    In 1992, Congress established affordable housing goals for 
the enterprises to ensure a more targeted transfer of GSE 
benefits to the housing market. Even though the enterprises are 
required by charter to help facilitate affordable housing, HUD 
has found that the enterprises lag behind the private sector in 
their affordable housing performance. Each enterprise must 
create an affordable housing fund in order for more of the 
subsidy to pass through to consumers.
    The Federal Home Loan Bank System was established by 
Congress in 1932 to provide liquidity to home mortgage lenders. 
The Bank System encompasses twelve regional Federal Home Loan 
Banks (Banks), each of which is cooperatively owned by its 
commercial bank, savings association, credit union, and 
insurance company member institutions. The Banks issue debt for 
which they are jointly and severally liable, and use the 
proceeds principally to make collateralized advances to their 
8,000-plus member institutions. Member institutions primarily 
secure advances with residential mortgages and other housing-
related assets. The Federal Home Loan Banks are supervised by 
the Federal Housing Finance Board, an independent agency of the 
executive branch consisting of 5 appointed members. The System 
fulfills its mission by providing members with access to 
funding and technical assistance, and through special 
affordable housing and community and economic development 
programs.
    The Affordable Housing Program (AHP) of the Federal Home 
Loan Banks is the largest private grant program for housing in 
the nation. The AHP is funded with 10 percent each of the 
Federal Home Loan Banks' annual earnings and has been a 
significant source of funds for financing the production and 
revitalization of affordable housing for people with low- and 
moderate-incomes. The AHP is a competitive program that 
provides grants to finance the purchase, construction, or 
rehabilitation of owner-occupied or rental housing. Grants can 
also be used to lower the interest rate on loans or cover down 
payment and closing costs. AHP grants are flexible and often 
serve as a ``bridge'' for housing projects, providing ``gap'' 
financing to make thousands of housing projects and home 
purchases. In 2005, approximately $230 million was made 
available for regional housing projects, creating almost 40,000 
affordable housing units. Since the program's inception in 
1991, over $2.54 billion dollars in AHP grants and subsidized 
advances have been awarded, creating almost 430,000 affordable 
housing units.
    H.R. 1427 creates a similar program for Fannie Mae and 
Freddie Mac, establishing a new Affordable Housing Fund, funded 
through annual contributions from Fannie Mae and Freddie Mac. 
This new fund is designed to meet the affordable housing needs 
of our nation's poorest very low income and extremely low 
income families, which studies have shown have the most severe 
housing affordability needs. Traditionally, making housing 
affordable for such families requires deeper levels of housing 
subsidies than are typically available in most federal housing 
programs. The new Affordable Housing Fund is designed to target 
subsidies to these families. Funds are directed in the first 
year to meet housing needs arising out of Hurricanes Katrina 
and Rita, and in later years are distributed nationwide to 
states by formula.
    As of December 31, 2004 (the last annual report filed), 
Fannie Mae reported total assets of approximately $1 trillion. 
As of December 31, 2006, Freddie Mac reported total assets of 
$813 billion, and the twelve Federal Home Loan Banks $1 
trillion. As of the same date, Freddie Mac held $753 billion in 
outstanding debt, and the Federal Home Loan Banks $934 billion 
in debt. The combined portfolios of Fannie Mae and Freddie Mac 
have grown from $138 billion in 1990 to $1.4 trillion at year 
end 2006. The Federal Home Loan Banks held $98 billion at year 
end 2006.
    Freddie Mac announced in January 2003 that it would need to 
revise its financial statements, resulting in a special review 
by OFHEO. Following the discovery of accounting irregularities 
and a reorganization of its management, Freddie Mac announced 
in November 2003 that it had overstated earnings by $1 billion 
in 2001. The company said the error in its 2001 earnings--
restated to $3.16 billion from $4.15 billion--stemmed from 
failure to properly account for derivatives activity.
    In December 2003, OFHEO released a report on the special 
examination of Freddie Mac finding that the enterprise 
disregarded accounting rules, internal controls and disclosure 
standards. Furthermore, the report found that overall the 
company had understated its earnings by $5 billion between 
2001-2003, and that the Board of Directors had failed to 
exercise adequate oversight. Freddie Mac entered into a consent 
order and settlement with OFHEO, under which it was required to 
undertake remedial actions relating to governance, corporate 
culture, internal controls, accounting practices, disclosure 
and oversight. The company also paid a $125 million civil money 
penalty. On March 23, 2007, Freddie Mac released its 2006 year-
end financial reports and expects to resume filing timely 
quarterly and annual financial statements in the second half of 
2007. Once Freddie Mac becomes current in its financial 
reporting, the company will begin the process of registering 
its capital stock with the SEC.
    Shortly after the announcement of Freddie Mac's financial 
reporting problems, OFHEO began a special examination of Fannie 
Mae. In September 2004, the agency issued a report identifying 
a number of deficiencies within Fannie Mae, including 
insufficient internal controls, the improper application of 
accounting standards, and inadequate corporate governance 
policies. OFHEO concluded that Fannie Mae was ``significantly 
undercapitalized'' in the third quarter of 2004, and required 
that the enterprise's minimum capital requirement be increased 
by 30% to strengthen its financial position.
    In May 2006, Fannie Mae entered into a Consent Order to 
settle matters related to accounting, internal control and 
other failures leading to a restatement of earnings by and 
losses to the enterprise. Under the Consent Order, Fannie Mae 
paid $400 million in fines and penalties and undertook numerous 
remedial actions. At the end of 2006, Fannie Mae announced that 
the restatement of its financial reports would lower its 
reported earnings by a total of $6.3 billion for the period 
between 2001 and 2004. In February 2007, Fannie Mae announced 
its intention to file the company's 2005 annual report by the 
end of August and the 2006 annual report before the end of 
2007.
    Like Freddie Mac, Fannie Mae agreed to improve its internal 
controls and its corporate governance, and temporarily increase 
its capital levels. Fannie Mae additionally changed its 
leadership team in the wake of the accounting restatement, and 
OFHEO is presently pursuing administrative action against 
several former Fannie Mae executives.
    A number of Federal Home Loan Banks also have identified 
financial reporting and management deficiencies in recent 
years. For example, during their efforts to register with the 
SEC six Federal Home Loan Banks (Atlanta, Dallas, Des Moines, 
Indianapolis, Pittsburgh, and Topeka) determined that they had 
to restate certain financial statements due to misapplications 
of accounting standards, primarily those rules for derivative 
instruments and hedging activities. The Federal Home Loan Bank 
of Chicago also restated its financials and entered into an 
agreement with the Finance Board to better manage its risks, 
but this announcement occurred prior to the SEC review.
    Additionally, the Federal Home Loan Bank of Seattle entered 
into a written supervisory agreement with the FHFB in December 
2004. The agreement resulted from an excessive exposure to 
interest-rate risk volatility. The Federal Home Loan Bank of 
Seattle has since filed and begun to implement a 3-year 
business and capital management plan to better manage its 
operations.
    In the 109th Congress, the House Financial Services 
Committee approved H.R. 1461, the Federal Housing Finance 
Reform Act, by a vote of 65 to 5. The legislation subsequently 
passed the House by a vote of 331 to 90. On October 31, 2005, 
H.R. 1461 was received in the Senate, read twice and referred 
to the Committee on Banking, Housing, and Urban Affairs. While 
the Senate Committee on Banking, Housing, and Urban Affairs 
approved a GSE regulatory reform bill (S. 190), the legislation 
never came up for consideration on the Senate floor. As a 
result, H.R. 1461 died at the end of the 109th Congress.

                                Hearings

    The Subcommittee on Capital Markets, Insurance and 
Government Sponsored Enterprises held a hearing on March 12, 
2007, titled ``Legislative Proposals on GSE Reform.'' The 
following witnesses testified: Mr. John R. Price, President and 
Chief Executive Officer, Federal Home Loan Bank of Pittsburgh; 
Mr. Thomas M. Stevens, Immediate Past President, National 
Association of Realtors; Mr. John M. Robbins, CMB, Chairman, 
Mortgage Bankers Association; Mr. Arthur R. Connelly, Chairman, 
South Shore Savings Bank; Mr. R. Michael Stewart Menzies, Sr., 
President/Chief Executive Officer, Easton Bank and Trust 
Company; Ms. Karen Shaw Petrou, Managing Partner, Federal 
Financial Analytics, Inc.; and Mr. Scott Stern, Chief Executive 
Officer, Lenders One, Chairman, National Alliance of 
Independent Mortgage Bankers.
    The Financial Services Committee held a hearing on March 
15, 2007, titled ``Legislative Proposals on GSE Reform.'' The 
following witnesses testified: The Honorable Robert Steel, 
Under Secretary for Domestic Finance, U.S. Department of the 
Treasury; The Honorable James B. Lockhart III, Director, Office 
of Federal Housing Enterprise Oversight; The Honorable John 
Dalton, President, Housing Policy Council, Financial Services 
Roundtable; Mr. Richard F. Syron, Chairman and Chief Executive 
Officer, Freddie Mac; Mr. Daniel H. Mudd, President and Chief 
Executive Officer, Fannie Mae; Gerald M. Howard, Executive Vice 
President and Chief Executive Officer, National Association of 
Home Builders; Ms. Judith A. Kennedy, President and Chief 
Executive Officer, National Association of Affordable Housing 
Lenders; Mr. Allen J. Fishbein, Director of Housing and Credit 
Policy, Consumer Federation of America; Ms. Sheila Crowley, 
President, National Low Income Housing Coalition; Mr. Thomas 
Gleason, Board Member, National Council of State Housing 
Agencies; and Mr. Michael Flynn, Director of Government 
Affairs, Reason Foundation.

                        Committee Consideration

    The Committee on Financial Services met in open session on 
March 28, 2007, and on March 29, 2007, ordered H.R. 1427, 
Federal Housing Finance Reform Act of 2007, reported, as 
amended, with a favorable recommendation by a record vote of 45 
yeas and 19 nays.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. A 
motion by Mr. Frank to report the bill to the House with a 
favorable recommendation was agreed to by a record vote of 45 
yeas and 19 nays (Record vote FC-37). The names of Members 
voting for and against follow:

                                              RECORD VOTE NO. FC-37
----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................        X   ........  .........  Mr. Bachus.......  ........        X   .........
Mr. Kanjorski..................  ........  ........  .........  Mr. Baker........        X   ........  .........
Ms. Waters.....................        X   ........  .........  Ms. Pryce (OH)...        X   ........  .........
Mrs. Maloney...................        X   ........  .........  Mr. Castle.......        X   ........  .........
Mr. Gutierrez..................        X   ........  .........  Mr. King (NY)....        X   ........  .........
Ms. Velazquez..................  ........  ........  .........  Mr. Royce........  ........        X   .........
Mr. Watt.......................  ........  ........  .........  Mr. Lucas........  ........        X   .........
Mr. Ackerman...................        X   ........  .........  Mr. Paul.........  ........        X   .........
Ms. Carson.....................        X   ........  .........  Mr. Gillmor......        X   ........  .........
Mr. Sherman....................        X   ........  .........  Mr. LaTourette...        X   ........  .........
Mr. Meeks......................        X   ........  .........  Mr. Manzullo.....  ........        X   .........
Mr. Moore (KS).................        X   ........  .........  Mr. Jones........        X   ........  .........
Mr. Capuano....................        X   ........  .........  Mrs. Biggert.....  ........        X   .........
Mr. Hinojosa...................        X   ........  .........  Mr. Shays........        X   ........  .........
Mr. Clay.......................        X   ........  .........  Mr. Miller (CA)..        X   ........  .........
Mrs. McCarthy..................        X   ........  .........  Mrs. Capito......        X   ........  .........
Mr. Baca.......................        X   ........  .........  Mr. Feeney.......  ........        X   .........
Mr. Lynch......................  ........  ........  .........  Mr. Hensarling...  ........  ........  .........
Mr. Miller (NC)................        X   ........  .........  Mr. Garrett (NJ).  ........        X   .........
Mr. Scott......................        X   ........  .........  Ms. Brown-Waite..  ........        X   .........
Mr. Green......................        X   ........  .........  Mr. Barrett (SC).  ........        X   .........
Mr. Cleaver....................        X   ........  .........  Mr. Renzi........        X   ........  .........
Ms. Bean.......................        X   ........  .........  Mr. Gerlach......        X   ........  .........
Ms. Moore (WI).................        X   ........  .........  Mr. Pearce.......  ........        X   .........
Mr. Davis (TN).................        X   ........  .........  Mr. Neugebauer...  ........        X   .........
Mr. Sires......................        X   ........  .........  Mr. Price (GA)...  ........        X   .........
Mr. Hodes......................        X   ........  .........  Mr. Davis (KY)...        X   ........  .........
Mr. Ellison....................        X   ........  .........  Mr. McHenry......  ........        X   .........
Mr. Klein......................        X   ........  .........  Mr. Campbell.....  ........        X   .........
Mr. Mahoney (FL)...............        X   ........  .........  Mr. Putnam.......  ........        X   .........
Mr. Wilson.....................        X   ........  .........  Mrs. Bachmann....  ........        X   .........
Mr. Perlmutter.................        X   ........  .........  Mr. Roskam.......  ........        X   .........
Mr. Murphy.....................        X   ........  .........  Mr. Marchant.....  ........        X   .........
Mr. Donnelly...................        X   ........  .........
Mr. Wexler.....................  ........  ........  .........
Mr. Marshall...................        X   ........  .........
Mr. Boren......................        X   ........  .........
----------------------------------------------------------------------------------------------------------------

    The following amendments were disposed of by record votes. 
The names of Members voting for and against follow:
    An amendment by Mr. Bachus, No. 2, striking section 128 
(Affordable Housing Fund), was not agreed to by record vote of 
15 yeas and 31 nays (Record vote FC-27):

                                              RECORD VOTE NO. FC-27
----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................  ........        X   .........  Mr. Bachus.......        X   ........  .........
Mr. Kanjorski..................  ........  ........  .........  Mr. Baker........        X   ........  .........
Ms. Waters.....................  ........        X   .........  Ms. Pryce (OH)...  ........  ........  .........
Mrs. Maloney...................  ........        X   .........  Mr. Castle.......  ........  ........  .........
Mr. Gutierrez..................  ........  ........  .........  Mr. King (NY)....        X   ........  .........
Ms. Velazquez..................  ........  ........  .........  Mr. Royce........        X   ........  .........
Mr. Watt.......................  ........  ........  .........  Mr. Lucas........        X   ........  .........
Mr. Ackerman...................  ........        X   .........  Mr. Paul.........  ........  ........  .........
Ms. Carson.....................  ........        X   .........  Mr. Gillmor......  ........  ........  .........
Mr. Sherman....................  ........        X   .........  Mr. LaTourette...  ........        X   .........
Mr. Meeks......................  ........        X   .........  Mr. Manzullo.....        X   ........  .........
Mr. Moore (KS).................  ........        X   .........  Mr. Jones........  ........  ........  .........
Mr. Capuano....................  ........        X   .........  Mrs. Biggert.....        X   ........  .........
Mr. Hinojosa...................  ........  ........  .........  Mr. Shays........  ........        X   .........
Mr. Clay.......................  ........        X   .........  Mr. Miller (CA)..        X   ........  .........
Mrs. McCarthy..................  ........        X   .........  Mrs. Capito......  ........        X   .........
Mr. Baca.......................  ........        X   .........  Mr. Feeney.......        X   ........  .........
Mr. Lynch......................  ........  ........  .........  Mr. Hensarling...  ........  ........  .........
Mr. Miller (NC)................  ........        X   .........  Mr. Garrett (NJ).        X   ........  .........
Mr. Scott......................  ........  ........  .........  Ms. Brown-Waite..  ........  ........  .........
Mr. Green......................  ........        X   .........  Mr. Barrett (SC).        X   ........  .........
Mr. Cleaver....................  ........  ........  .........  Mr. Renzi........  ........  ........  .........
Ms. Bean.......................  ........        X   .........  Mr. Gerlach......  ........        X   .........
Ms. Moore (WI).................  ........  ........  .........  Mr. Pearce.......        X   ........  .........
Mr. Davis (TN).................  ........        X   .........  Mr. Neugebauer...  ........  ........  .........
Mr. Sires......................  ........        X   .........  Mr. Price (GA)...  ........  ........  .........
Mr. Hodes......................  ........        X   .........  Mr. Davis (KY)...  ........  ........  .........
Mr. Ellison....................  ........        X   .........  Mr. McHenry......        X   ........  .........
Mr. Klein......................  ........        X   .........  Mr. Campbell.....  ........  ........  .........
Mr. Mahoney (FL)...............  ........        X   .........  Mr. Putnam.......        X   ........  .........
Mr. Wilson.....................  ........  ........  .........  Mrs. Bachmann....        X   ........  .........
Mr. Perlmutter.................  ........        X   .........  Mr. Roskam.......  ........  ........  .........
Mr. Murphy.....................  ........        X   .........  Mr. Marchant.....  ........  ........  .........
Mr. Donnelly...................  ........        X   .........
Mr. Wexler.....................  ........        X   .........
Mr. Marshall...................  ........        X   .........
Mr. Boren......................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mr. Bachus, No. 4, regarding Affordable 
Housing Fund amounts to FHLB affordable housing program, was 
not agreed to, as modified, by record vote of 16 yeas and 36 
nays (Record vote FC-28):

                                              RECORD VOTE NO. FC-28
----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................  ........        X   .........  Mr. Bachus.......        X   ........  .........
Mr. Kanjorski..................  ........  ........  .........  Mr. Baker........  ........        X   .........
Ms. Waters.....................  ........        X   .........  Ms. Pryce (OH)...  ........        X   .........
Mrs. Maloney...................  ........        X   .........  Mr. Castle.......  ........        X   .........
Mr. Gutierrez..................  ........  ........  .........  Mr. King (NY)....  ........        X   .........
Ms. Velazquez..................  ........  ........  .........  Mr. Royce........  ........        X   .........
Mr. Watt.......................  ........  ........  .........  Mr. Lucas........        X   ........  .........
Mr. Ackerman...................  ........        X   .........  Mr. Paul.........  ........  ........  .........
Ms. Carson.....................  ........        X   .........  Mr. Gillmor......        X   ........  .........
Mr. Sherman....................  ........        X   .........  Mr. LaTourette...        X   ........  .........
Mr. Meeks......................  ........        X   .........  Mr. Manzullo.....        X   ........  .........
Mr. Moore (KS).................  ........        X   .........  Mr. Jones........  ........  ........  .........
Mr. Capuano....................  ........        X   .........  Mrs. Biggert.....        X   ........  .........
Mr. Hinojosa...................  ........  ........  .........  Mr. Shays........  ........  ........  .........
Mr. Clay.......................  ........        X   .........  Mr. Miller (CA)..  ........        X   .........
Mrs. McCarthy..................  ........        X   .........  Mrs. Capito......  ........        X   .........
Mr. Baca.......................  ........        X   .........  Mr. Feeney.......        X   ........  .........
Mr. Lynch......................  ........  ........  .........  Mr. Hensarling...        X   ........  .........
Mr. Miller (NC)................  ........        X   .........  Mr. Garrett (NJ).        X   ........  .........
Mr. Scott......................  ........  ........  .........  Ms. Brown-Waite..  ........  ........  .........
Mr. Green......................  ........        X   .........  Mr. Barrett (SC).        X   ........  .........
Mr. Cleaver....................  ........  ........  .........  Mr. Renzi........        X   ........  .........
Ms. Bean.......................  ........        X   .........  Mr. Gerlach......  ........        X   .........
Ms. Moore (WI).................  ........  ........  .........  Mr. Pearce.......        X   ........  .........
Mr. Davis (TN).................  ........        X   .........  Mr. Neugebauer...  ........  ........  .........
Mr. Sires......................  ........        X   .........  Mr. Price (GA)...  ........  ........  .........
Mr. Hodes......................  ........        X   .........  Mr. Davis (KY)...        X   ........  .........
Mr. Ellison....................  ........        X   .........  Mr. McHenry......        X   ........  .........
Mr. Klein......................  ........        X   .........  Mr. Campbell.....  ........  ........  .........
Mr. Mahoney (FL)...............  ........        X   .........  Mr. Putnam.......        X   ........  .........
Mr. Wilson.....................  ........        X   .........  Mrs. Bachmann....        X   ........  .........
Mr. Perlmutter.................  ........        X   .........  Mr. Roskam.......  ........  ........  .........
Mr. Murphy.....................  ........        X   .........  Mr. Marchant.....  ........  ........  .........
Mr. Donnelly...................  ........        X   .........
Mr. Wexler.....................  ........        X   .........
Mr. Marshall...................  ........        X   .........
Mr. Boren......................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mrs. Biggert, No. 8, requiring Affordable 
Housing Fund grants to be administered by HUD, was not agreed 
to by a record vote of 20 yeas and 35 nays (Record vote FC-29):

                                              RECORD VOTE NO. FC-29
----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................  ........        X   .........  Mr. Bachus.......        X   ........  .........
Mr. Kanjorski..................  ........  ........  .........  Mr. Baker........        X   ........  .........
Ms. Waters.....................  ........  ........  .........  Ms. Pryce (OH)...  ........        X   .........
Mrs. Maloney...................  ........        X   .........  Mr. Castle.......  ........        X   .........
Mr. Gutierrez..................  ........  ........  .........  Mr. King (NY)....  ........  ........  .........
Ms. Velazquez..................  ........  ........  .........  Mr. Royce........  ........        X   .........
Mr. Watt.......................  ........  ........  .........  Mr. Lucas........        X   ........  .........
Mr. Ackerman...................  ........        X   .........  Mr. Paul.........  ........  ........  .........
Ms. Carson.....................  ........        X   .........  Mr. Gillmor......        X   ........  .........
Mr. Sherman....................  ........        X   .........  Mr. LaTourette...  ........        X   .........
Mr. Meeks......................  ........        X   .........  Mr. Manzullo.....        X   ........  .........
Mr. Moore (KS).................  ........        X   .........  Mr. Jones........  ........  ........  .........
Mr. Capuano....................  ........        X   .........  Mrs. Biggert.....        X   ........  .........
Mr. Hinojosa...................  ........        X   .........  Mr. Shays........  ........  ........  .........
Mr. Clay.......................  ........        X   .........  Mr. Miller (CA)..        X   ........  .........
Mrs. McCarthy..................  ........        X   .........  Mrs. Capito......        X   ........  .........
Mr. Baca.......................  ........        X   .........  Mr. Feeney.......  ........        X   .........
Mr. Lynch......................  ........        X   .........  Mr. Hensarling...        X   ........  .........
Mr. Miller (NC)................  ........        X   .........  Mr. Garrett (NJ).        X   ........  .........
Mr. Scott......................  ........        X   .........  Ms. Brown-Waite..  ........        X   .........
Mr. Green......................  ........        X   .........  Mr. Barrett (SC).        X   ........  .........
Mr. Cleaver....................  ........        X   .........  Mr. Renzi........        X   ........  .........
Ms. Bean.......................  ........        X   .........  Mr. Gerlach......        X   ........  .........
Ms. Moore (WI).................  ........        X   .........  Mr. Pearce.......  ........  ........  .........
Mr. Davis (TN).................  ........        X   .........  Mr. Neugebauer...        X   ........  .........
Mr. Sires......................  ........        X   .........  Mr. Price (GA)...  ........  ........  .........
Mr. Hodes......................  ........        X   .........  Mr. Davis (KY)...        X   ........  .........
Mr. Ellison....................  ........  ........  .........  Mr. McHenry......        X   ........  .........
Mr. Klein......................  ........        X   .........  Mr. Campbell.....        X   ........  .........
Mr. Mahoney (FL)...............  ........        X   .........  Mr. Putnam.......        X   ........  .........
Mr. Wilson.....................  ........  ........  .........  Mrs. Bachmann....        X   ........  .........
Mr. Perlmutter.................  ........        X   .........  Mr. Roskam.......  ........  ........  .........
Mr. Murphy.....................  ........        X   .........  Mr. Marchant.....        X   ........  .........
Mr. Donnelly...................  ........        X   .........
Mr. Wexler.....................  ........  ........  .........
Mr. Marshall...................  ........        X   .........
Mr. Boren......................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mr. Hensarling, No. 11, on conforming loan 
limits, was not agreed to by a record vote of 10 yeas and 51 
nays (Record vote FC-30):

                                              RECORD VOTE NO. FC-30
----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................  ........        X   .........  Mr. Bachus.......        X   ........  .........
Mr. Kanjorski..................  ........  ........  .........  Mr. Baker........        X   ........  .........
Ms. Waters.....................  ........        X   .........  Ms. Pryce (OH)...        X   ........  .........
Mrs. Maloney...................  ........        X   .........  Mr. Castle.......        X   ........  .........
Mr. Gutierrez..................  ........        X   .........  Mr. King (NY)....  ........        X   .........
Ms. Velazquez..................  ........  ........  .........  Mr. Royce........        X   ........  .........
Mr. Watt.......................  ........  ........  .........  Mr. Lucas........  ........        X   .........
Mr. Ackerman...................  ........        X   .........  Mr. Paul.........  ........  ........  .........
Ms. Carson.....................  ........        X   .........  Mr. Gillmor......  ........        X   .........
Mr. Sherman....................  ........        X   .........  Mr. LaTourette...  ........        X   .........
Mr. Meeks......................  ........        X   .........  Mr. Manzullo.....  ........        X   .........
Mr. Moore (KS).................  ........        X   .........  Mr. Jones........  ........        X   .........
Mr. Capuano....................  ........        X   .........  Mrs. Biggert.....  ........        X   .........
Mr. Hinojosa...................  ........        X   .........  Mr. Shays........  ........  ........  .........
Mr. Clay.......................  ........        X   .........  Mr. Miller (CA)..  ........        X   .........
Mrs. McCarthy..................  ........        X   .........  Mrs. Capito......  ........        X   .........
Mr. Baca.......................  ........        X   .........  Mr. Feeney.......  ........        X   .........
Mr. Lynch......................  ........        X   .........  Mr. Hensarling...        X   ........  .........
Mr. Miller (NC)................  ........        X   .........  Mr. Garrett (NJ).        X   ........  .........
Mr. Scott......................  ........        X   .........  Ms. Brown-Waite..  ........        X   .........
Mr. Green......................  ........        X   .........  Mr. Barrett (SC).        X   ........  .........
Mr. Cleaver....................  ........        X   .........  Mr. Renzi........  ........        X   .........
Ms. Bean.......................  ........        X   .........  Mr. Gerlach......  ........        X   .........
Ms. Moore (WI).................  ........        X   .........  Mr. Pearce.......  ........  ........  .........
Mr. Davis (TN).................  ........        X   .........  Mr. Neugebauer...  ........        X   .........
Mr. Sires......................  ........        X   .........  Mr. Price (GA)...  ........  ........  .........
Mr. Hodes......................  ........        X   .........  Mr. Davis (KY)...  ........        X   .........
Mr. Ellison....................  ........        X   .........  Mr. McHenry......  ........        X   .........
Mr. Klein......................  ........        X   .........  Mr. Campbell.....  ........        X   .........
Mr. Mahoney (FL)...............  ........        X   .........  Mr. Putnam.......        X   ........  .........
Mr. Wilson.....................  ........        X   .........  Mrs. Bachmann....        X   ........  .........
Mr. Perlmutter.................  ........        X   .........  Mr. Roskam.......  ........  ........  .........
Mr. Murphy.....................  ........        X   .........  Mr. Marchant.....  ........        X   .........
Mr. Donnelly...................  ........        X   .........
Mr. Wexler.....................  ........  ........  .........
Mr. Marshall...................  ........        X   .........
Mr. Boren......................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Ms. Waters, No. 12, directing regulated 
entities to consider inclusion of minorities and women, was 
agreed to by a record vote of 34 yeas and 27 nays (Record vote 
FC-31):

                                              RECORD VOTE NO. FC-31
----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................        X   ........  .........  Mr. Bachus.......  ........        X   .........
Mr. Kanjorski..................  ........  ........  .........  Mr. Baker........  ........        X   .........
Ms. Waters.....................        X   ........  .........  Ms. Pryce (OH)...  ........        X   .........
Mrs. Maloney...................        X   ........  .........  Mr. Castle.......  ........  ........  .........
Mr. Gutierrez..................        X   ........  .........  Mr. King (NY)....  ........        X   .........
Ms. Velazquez..................  ........  ........  .........  Mr. Royce........  ........        X   .........
Mr. Watt.......................  ........  ........  .........  Mr. Lucas........  ........        X   .........
Mr. Ackerman...................        X   ........  .........  Mr. Paul.........  ........        X   .........
Ms. Carson.....................        X   ........  .........  Mr. Gillmor......  ........        X   .........
Mr. Sherman....................        X   ........  .........  Mr. LaTourette...  ........        X   .........
Mr. Meeks......................        X   ........  .........  Mr. Manzullo.....  ........        X   .........
Mr. Moore (KS).................        X   ........  .........  Mr. Jones........  ........        X   .........
Mr. Capuano....................        X   ........  .........  Mrs. Biggert.....  ........        X   .........
Mr. Hinojosa...................        X   ........  .........  Mr. Shays........  ........  ........  .........
Mr. Clay.......................        X   ........  .........  Mr. Miller (CA)..  ........        X   .........
Mrs. McCarthy..................        X   ........  .........  Mrs. Capito......  ........        X   .........
Mr. Baca.......................        X   ........  .........  Mr. Feeney.......  ........        X   .........
Mr. Lynch......................        X   ........  .........  Mr. Hensarling...  ........  ........  .........
Mr. Miller (NC)................        X   ........  .........  Mr. Garrett (NJ).  ........        X   .........
Mr. Scott......................        X   ........  .........  Ms. Brown-Waite..  ........        X   .........
Mr. Green......................        X   ........  .........  Mr. Barrett (SC).  ........        X   .........
Mr. Cleaver....................        X   ........  .........  Mr. Renzi........        X   ........  .........
Ms. Bean.......................        X   ........  .........  Mr. Gerlach......  ........        X   .........
Ms. Moore (WI).................        X   ........  .........  Mr. Pearce.......  ........  ........  .........
Mr. Davis (TN).................        X   ........  .........  Mr. Neugebauer...  ........        X   .........
Mr. Sires......................        X   ........  .........  Mr. Price (GA)...  ........        X   .........
Mr. Hodes......................        X   ........  .........  Mr. Davis (KY)...  ........        X   .........
Mr. Ellison....................        X   ........  .........  Mr. McHenry......  ........        X   .........
Mr. Klein......................        X   ........  .........  Mr. Campbell.....  ........        X   .........
Mr. Mahoney (FL)...............        X   ........  .........  Mr. Putnam.......  ........        X   .........
Mr. Wilson.....................        X   ........  .........  Mrs. Bachmann....  ........        X   .........
Mr. Perlmutter.................        X   ........  .........  Mr. Roskam.......  ........        X   .........
Mr. Murphy.....................        X   ........  .........  Mr. Marchant.....  ........        X   .........
Mr. Donnelly...................        X   ........  .........
Mr. Wexler.....................  ........  ........  .........
Mr. Marshall...................        X   ........  .........
Mr. Boren......................        X   ........  .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mr. Frank, No. 14, reserving authority for 
Affordable Housing Fund grants, was agreed to, as modified, by 
a record vote of 35 yeas and 26 nays (Record vote FC-32):

                                              RECORD VOTE NO. FC-32
----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................        X   ........  .........  Mr. Bachus.......  ........        X   .........
Mr. Kanjorksi..................  ........  ........  .........  Mr. Baker........  ........  ........  .........
Ms. Waters.....................        X   ........  .........  Ms. Pryce (OH)...  ........        X   .........
Mrs. Maloney...................        X   ........  .........  Mr. Castle.......  ........  ........  .........
Mr. Gutierrez..................        X   ........  .........  Mr. King (NY)....  ........        X   .........
Ms. Velazquez..................  ........  ........  .........  Mr. Royce........  ........        X   .........
Mr. Watt.......................  ........  ........  .........  Mr. Lucas........  ........        X   .........
Mr. Ackerman...................        X   ........  .........  Mr. Paul.........  ........        X   .........
Ms. Carson.....................        X   ........  .........  Mr. Gillmor......  ........        X   .........
Mr. Sherman....................        X   ........  .........  Mr. LaTourette...        X   ........  .........
Mr. Meeks......................        X   ........  .........  Mr. Manzullo.....  ........        X   .........
Mr. Moore (KS).................        X   ........  .........  Mr. Jones........  ........        X   .........
Mr. Capuano....................        X   ........  .........  Mrs. Biggert.....  ........        X   .........
Mr. Hinojosa...................        X   ........  .........  Mr. Shays........  ........  ........  .........
Mr. Clay.......................        X   ........  .........  Mr. Miller (CA)..  ........        X   .........
Mrs. McCarthy..................        X   ........  .........  Mrs. Capito......  ........        X   .........
Mr. Baca.......................        X   ........  .........  Mr. Feeney.......  ........        X   .........
Mr. Lynch......................        X   ........  .........  Mr. Hensarling...  ........  ........  .........
Mr. Miller (NC)................        X   ........  .........  Mr. Garrett (NJ).  ........        X   .........
Mr. Scott......................        X   ........  .........  Ms. Brown-Waite..  ........        X   .........
Mr. Green......................        X   ........  .........  Mr. Barrett (SC).  ........        X   .........
Mr. Cleaver....................        X   ........  .........  Mr. Renzi........  ........        X   .........
Ms. Bean.......................        X   ........  .........  Mr. Gerlach......  ........        X   .........
Ms. Moore (WI).................        X   ........  .........  Mr. Pearce.......  ........  ........  .........
Mr. Davis (TN).................        X   ........  .........  Mr. Neugebauer...  ........        X   .........
Mr. Sires......................        X   ........  .........  Mr. Price (GA)...  ........  ........  .........
Mr. Hodes......................        X   ........  .........  Mr. Davis (KY)...  ........        X   .........
Mr. Ellison....................        X   ........  .........  Mr. McHenry......  ........        X   .........
Mr. Klein......................        X   ........  .........  Mr. Campbell.....  ........        X   .........
Mr. Mahoney (FL)...............        X   ........  .........  Mr. Putnam.......  ........        X   .........
Mr. Wilson.....................        X   ........  .........  Mrs. Bachmann....  ........        X   .........
Mr. Perlmutter.................        X   ........  .........  Mr. Roskam.......  ........        X   .........
Mr. Murphy.....................        X   ........  .........  Mr. Marchant.....  ........        X   .........
Mr. Donnelly...................        X   ........  .........
Mr. Wexler.....................        X   ........  .........
Mr. Marshall...................        X   ........  .........
Mr. Boren......................        X   ........  .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mr. McHenry, No. 17, establishing Habitat 
for Humanity as the recipient of Affordable Housing Fund grant, 
was not agreed to by a record vote of 13 yeas and 50 nays 
(Record vote FC-33):

                                              RECORD VOTE NO. FC-33
----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................  ........        X   .........  Mr. Bachus.......  ........  ........  .........
Mr. Kanjorski..................  ........  ........  .........  Mr. Baker........        X   ........  .........
Ms. Waters.....................  ........        X   .........  Ms. Pryce (OH)...  ........        X   .........
Mrs. Maloney...................  ........        X   .........  Mr. Castle.......  ........        X   .........
Mr. Gutierrez..................  ........        X   .........  Mr. King (NY)....  ........        X   .........
Ms. Velazquez..................  ........  ........  .........  Mr. Royce........  ........        X   .........
Mr. Watt.......................  ........  ........  .........  Mr. Lucas........  ........        X   .........
Mr. Ackerman...................  ........        X   .........  Mr. Paul.........        X   ........  .........
Ms. Carson.....................  ........        X   .........  Mr. Gillmor......  ........        X   .........
Mr. Sherman....................  ........        X   .........  Mr. LaTourette...  ........        X   .........
Mr. Meeks......................  ........        X   .........  Mr. Manzullo.....        X   ........  .........
Mr. Moore (KS).................  ........        X   .........  Mr. Jones........        X   ........  .........
Mr. Capuano....................  ........        X   .........  Mrs. Biggert.....  ........        X   .........
Mr. Hinojosa...................  ........        X   .........  Mr. Shays........  ........        X   .........
Mr. Clay.......................  ........        X   .........  Mr. Miller (CA)..  ........        X   .........
Mrs. McCarthy..................  ........        X   .........  Mrs. Capito......  ........        X   .........
Mr. Baca.......................  ........        X   .........  Mr. Feeney.......        X   ........  .........
Mr. Lynch......................  ........        X   .........  Mr. Hensarling...  ........  ........  .........
Mr. Miller (NC)................  ........        X   .........  Mr. Garrett (NJ).        X   ........  .........
Mr. Scott......................  ........        X   .........  Ms. Brown-Waite..  ........        X   .........
Mr. Green......................  ........        X   .........  Mr. Barrett (SC).        X   ........  .........
Mr. Cleaver....................  ........        X   .........  Mr. Renzi........  ........        X   .........
Ms. Bean.......................  ........        X   .........  Mr. Gerlach......  ........        X   .........
Ms. Moore (WI).................  ........        X   .........  Mr. Pearce.......  ........  ........  .........
Mr. Davis (TN).................  ........        X   .........  Mr. Neugebauer...  ........        X   .........
Mr. Sires......................  ........        X   .........  Mr. Price (GA)...  ........  ........  .........
Mr. Hodes......................  ........        X   .........  Mr. Davis (KY)...  ........        X   .........
Mr. Ellison....................  ........        X   .........  Mr. McHenry......        X   ........  .........
Mr. Klein......................  ........        X   .........  Mr. Campbell.....        X   ........  .........
Mr. Mahoney (FL)...............  ........        X   .........  Mr. Putnam.......        X   ........  .........
Mr. Wilson.....................  ........        X   .........  Mrs. Bachmann....        X   ........  .........
Mr. Perlmutter.................  ........        X   .........  Mr. Roskam.......        X   ........  .........
Mr. Murphy.....................  ........        X   .........  Mr. Marchant.....        X   ........  .........
Mr. Donnelly...................  ........        X   .........
Mr. Wexler.....................  ........        X   .........
Mr. Marshall...................  ........        X   .........
Mr. Boren......................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mr. Garrett, No. 22, setting portfolio 
guidelines, was not agreed to by a record vote of 15 yeas and 
48 nays (Record vote FC-34):

                                              RECORD VOTE NO. FC-34
----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................  ........        X   .........  Mr. Bachus.......  ........  ........  .........
Mr. Kanjorski..................  ........  ........  .........  Mr. Baker........        X   ........  .........
Ms. Waters.....................  ........        X   .........  Ms. Pryce (OH)...  ........        X   .........
Mrs. Maloney...................  ........        X   .........  Mr. Castle.......  ........        X   .........
Mr. Gutierrez..................  ........        X   .........  Mr. King (NY)....  ........        X   .........
Ms. Velazquez..................  ........  ........  .........  Mr. Royce........        X   ........  .........
Mr. Watt.......................  ........  ........  .........  Mr. Lucas........        X   ........  .........
Mr. Ackerman...................  ........        X   .........  Mr. Paul.........        X   ........  .........
Ms. Carson.....................  ........        X   .........  Mr. Gillmor......  ........        X   .........
Mr. Sherman....................  ........        X   .........  Mr. LaTourette...  ........        X   .........
Mr. Meeks......................  ........        X   .........  Mr. Manzullo.....        X   ........  .........
Mr. Moore (KS).................  ........        X   .........  Mr. Jones........        X   ........  .........
Mr. Capuano....................  ........        X   .........  Mrs. Biggert.....  ........        X   .........
Mr. Hinojosa...................  ........        X   .........  Mr. Shays........  ........        X   .........
Mr. Clay.......................  ........        X   .........  Mr. Miller (CA)..  ........        X   .........
Mrs. McCarthy..................  ........        X   .........  Mrs. Capito......  ........        X   .........
Mr. Baca.......................  ........        X   .........  Mr. Feeney.......        X   ........  .........
Mr. Lynch......................  ........        X   .........  Mr. Hensarling...  ........  ........  .........
Mr. Miller (NC)................  ........        X   .........  Mr. Garrett (NJ).        X   ........  .........
Mr. Scott......................  ........        X   .........  Ms. Brown-Waite..  ........        X   .........
Mr. Green......................  ........        X   .........  Mr. Barrett (SC).        X   ........  .........
Mr. Cleaver....................  ........        X   .........  Mr. Renzi........  ........        X   .........
Ms. Bean.......................  ........        X   .........  Mr. Gerlach......  ........        X   .........
Ms. Moore (WI).................  ........        X   .........  Mr. Pearce.......  ........        X   .........
Mr. Davis (TN).................  ........        X   .........  Mr. Neugebauer...  ........        X   .........
Mr. Sires......................  ........        X   .........  Mr. Price (GA)...        X   ........  .........
Mr. Hodes......................  ........        X   .........  Mr. Davis (KY)...  ........        X   .........
Mr. Ellison....................  ........        X   .........  Mr. McHenry......  ........  ........  .........
Mr. Klein......................  ........        X   .........  Mr. Campbell.....        X   ........  .........
Mr. Mahoney (FL)...............  ........        X   .........  Mr. Putnam.......        X   ........  .........
Mr. Wilson.....................  ........        X   .........  Mrs. Bachmann....        X   ........  .........
Mr. Perlmutter.................  ........        X   .........  Mr. Roskam.......        X   ........  .........
Mr. Murphy.....................  ........        X   .........  Mr. Marchant.....        X   ........  .........
Mr. Donnelly...................  ........        X   .........
Mr. Wexler.....................  ........  ........  .........
Mr. Marshall...................  ........        X   .........
Mr. Boren......................  ........        X   .........
----------------------------------------------------------------------------------------------------------

    An amendment by Mr. Neugebauer, No. 25, setting a cap on 
the Affordable Housing Fund, was not agreed to by a record vote 
of 30 yeas and 35 nays (Record vote FC-35):

                                              RECORD VOTE NO. FC-35
----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................  ........        X   .........  Mr. Bachus.......        X   ........  .........
Mr. Kanjorski..................  ........  ........  .........  Mr. Baker........        X   ........  .........
Ms. Waters.....................  ........        X   .........  Ms. Pryce (OH)...        X   ........  .........
Mrs. Maloney...................  ........        X   .........  Mr. Castle.......        X   ........  .........
Mr. Gutierrez..................  ........        X   .........  Mr. King (NY)....        X   ........  .........
Ms. Velazquez..................  ........  ........  .........  Mr. Royce........        X   ........  .........
Mr. Watt.......................  ........  ........  .........  Mr. Lucas........        X   ........  .........
Mr. Ackerman...................  ........        X   .........  Mr. Paul.........        X   ........  .........
Ms. Carson.....................  ........        X   .........  Mr. Gillmor......        X   ........  .........
Mr. Sherman....................  ........        X   .........  Mr. LaTourette...        X   ........  .........
Mr. Meeks......................  ........        X   .........  Mr. Manzullo.....        X   ........  .........
Mr. Moore (KS).................  ........        X   .........  Mr. Jones........        X   ........  .........
Mr. Capuano....................  ........        X   .........  Mrs. Biggert.....        X   ........  .........
Mr. Hinojosa...................  ........        X   .........  Mr. Shays........  ........        X   .........
Mr. Clay.......................  ........        X   .........  Mr. Miller (CA)..        X   ........  .........
Mrs. McCarthy..................  ........        X   .........  Mrs. Capito......        X   ........  .........
Mr. Baca.......................  ........        X   .........  Mr. Feeney.......        X   ........  .........
Mr. Lynch......................  ........        X   .........  Mr. Hensarling...  ........  ........  .........
Mr. Miller (NC)................  ........        X   .........  Mr. Garrett (NJ).        X   ........  .........
Mr. Scott......................  ........        X   .........  Ms. Brown-Waite..        X   ........  .........
Mr. Green......................  ........        X   .........  Mr. Barrett (SC).        X   ........  .........
Mr. Cleaver....................  ........        X   .........  Mr. Renzi........  ........        X   .........
Ms. Bean.......................  ........        X   .........  Mr. Gerlach......        X   ........  .........
Ms. Moore (WI).................  ........        X   .........  Mr. Pearce.......        X   ........  .........
Mr. Davis (TN).................  ........        X   .........  Mr. Neugebauer...        X   ........  .........
Mr. Sires......................  ........        X   .........  Mr. Price (GA)...        X   ........  .........
Mr. Hodes......................  ........        X   .........  Mr. Davis (KY)...        X   ........  .........
Mr. Ellison....................  ........        X   .........  Mr. McHenry......        X   ........  .........
Mr. Klein......................  ........        X   .........  Mr. Campbell.....        X   ........  .........
Mr. Mahoney (FL)...............  ........        X   .........  Mr. Putnam.......        X   ........  .........
Mr. Wilson.....................  ........        X   .........  Mrs. Bachmann....        X   ........  .........
Mr. Perlmutter.................  ........        X   .........  Mr. Roskam.......        X   ........  .........
Mr. Murphy.....................  ........        X   .........  Mr. Marchant.....        X   ........  .........
Mr. Donnelly...................  ........        X   .........
Mr. Wexler.....................  ........  ........  .........
Mr. Marshall...................  ........        X   .........
Mr. Boren......................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mr. Price, No. 27, setting portfolio 
requirements, was not agreed to by a record vote of 15 yeas and 
50 nays (Record vote FC-36):

                                              RECORD VOTE NO. FC-36
----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................  ........        X   .........  Mr. Bachus.......        X   ........  .........
Mr. Kanjorski..................  ........  ........  .........  Mr. Baker........        X   ........  .........
Ms. Waters.....................  ........        X   .........  Ms. Pryce (OH)...  ........        X   .........
Mrs. Maloney...................  ........        X   .........  Mr. Castle.......  ........        X   .........
Mr. Gutierrez..................  ........        X   .........  Mr. King (NY)....  ........        X   .........
Ms. Velazquez..................  ........  ........  .........  Mr. Royce........        X   ........  .........
Mr. Watt.......................  ........  ........  .........  Mr. Lucas........  ........        X   .........
Mr. Ackerman...................  ........        X   .........  Mr. Paul.........        X   ........  .........
Ms. Carson.....................  ........        X   .........  Mr. Gillmor......        X   ........  .........
Mr. Sherman....................  ........        X   .........  Mr. LaTourette...  ........        X   .........
Mr. Meeks......................  ........        X   .........  Mr. Manzullo.....        X   ........  .........
Mr. Moore (KS).................  ........        X   .........  Mr. Jones........  ........        X   .........
Mr. Capuano....................  ........        X   .........  Mrs. Biggert.....  ........        X   .........
Mr. Hinojosa...................  ........        X   .........  Mr. Shays........  ........        X   .........
Mr. Clay.......................  ........        X   .........  Mr. Miller (CA)..  ........        X   .........
Mrs. McCarthy..................  ........        X   .........  Mrs. Capito......  ........        X   .........
Mr. Baca.......................  ........        X   .........  Mr. Feeney.......  ........        X   .........
Mr. Lynch......................  ........        X   .........  Mr. Hensarling...  ........  ........  .........
Mr. Miller (NC)................  ........        X   .........  Mr. Garrett (NJ).        X   ........  .........
Mr. Scott......................  ........        X   .........  Ms. Brown-Waite..  ........        X   .........
Mr. Green......................  ........        X   .........  Mr. Barrett (SC).        X   ........  .........
Mr. Cleaver....................  ........        X   .........  Mr. Renzi........  ........        X   .........
Ms. Bean.......................  ........        X   .........  Mr. Gerlach......  ........        X   .........
Ms. Moore (WI).................  ........        X   .........  Mr. Pearce.......        X   ........  .........
Mr. Davis (TN).................  ........        X   .........  Mr. Neugebauer...  ........        X   .........
Mr. Sires......................  ........        X   .........  Mr. Price (GA)...        X   ........  .........
Mr. Hodes......................  ........        X   .........  Mr. Davis (KY)...  ........        X   .........
Mr. Ellison....................  ........        X   .........  Mr. McHenry......        X   ........  .........
Mr. Klein......................  ........        X   .........  Mr. Campbell.....        X   ........  .........
Mr. Mahoney (FL)...............  ........        X   .........  Mr. Putnam.......        X   ........  .........
Mr. Wilson.....................  ........        X   .........  Mrs. Bachmann....        X   ........  .........
Mr. Perlmutter.................  ........        X   .........  Mr. Roskam.......  ........        X   .........
Mr. Murphy.....................  ........        X   .........  Mr. Marchant.....        X   ........  .........
Mr. Donnelly...................  ........        X   .........
Mr. Wexler.....................  ........  ........  .........
Mr. Marshall...................  ........        X   .........
Mr. Boren......................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    The following other amendments were also considered by the 
Committee:
    An amendment by Mr. Frank, No. 1, manager's amendment, was 
agreed to by a voice vote.
    An amendment by Mr. Sires, No. 3, providing an FHLB 
directors grandfather clause, was agreed to by a voice vote.
    An amendment by Mr. Frank, No. 5, establishing additional 
factors for portfolio standards, was agreed to by a voice vote.
    An amendment by Mr. Shays, No. 6, regarding Enterprise 
boards of directors, was agreed to by a voice vote.
    An amendment by Mr. Hinojosa, No. 7, providing homebuyers 
pre-purchasing counseling, was agreed to by a voice vote.
    An amendment by Mr. Frank, No. 9, requiring periodic review 
of core/minimum capital, was agreed to by a voice vote.
    An amendment by Mr. Baker, No. 10, requiring LHFA use of 
2007 Affordable Housing Fund amounts, was offered and 
withdrawn.
    An amendment by Mr. Neugebauer, No. 13, setting guidelines 
for eligible recipients of Affordable Housing Fund grants, was 
agreed to by a voice vote.
    An amendment by Mr. Gillmor, No. 15, directing each 
enterprise to include disclosure of income information, was 
agreed to by a voice vote.
    An amendment by Mr. Clay, No. 16, setting single family 
housing goal targets, was agreed to by a voice vote.
    An amendment by Mr. Lynch, No. 18, setting single family 
rental housing goals, was agreed to by a voice vote.
    An amendment by Mrs. Biggert, No. 19, providing a limit on 
states' administrative costs of the Affordable Housing Fund, 
was agreed to by a voice vote.
    An amendment by Mr. Meeks, No. 20, regarding diversity in 
the Agency workforce, was agreed to by a voice vote.
    An amendment by Ms. Waters, No. 21, regarding Federal 
Housing Enterprise Board membership, was agreed to by a voice 
vote.
    An amendment by Mr. Royce, No. 23, striking limited-life 
entity proceeds, was not agreed to by a voice vote.
    An amendment by Mr. Perlmutter, No. 24, setting 125 percent 
credit for energy/environmental standards as housing goals, was 
agreed to by a voice vote.
    An amendment by Mrs. Maloney, No. 26, setting housing goals 
credit for licensed childcare, was agreed to by a voice vote.
    An amendment by Ms. Waters, No. 28, taking community 
demographics into consideration in appointing independent 
directors, was agreed to by a voice vote.
    An amendment by Mr. Shays, No. 29, including information 
security/privacy controls, was agreed to by a voice vote.
    An amendment by Mr. Paul, No. 30, eliminating authority for 
Fannie Mae, Freddie Mac, and FHLBs to borrow from the Treasury, 
was not agreed to by a voice vote.
    An amendment by Mr. McHenry (offered by Mr. Bachus), No. 
31, setting limitations on Affordable Housing Fund recipients, 
was not agreed by a voice vote.
    An amendment by Mr. McHenry (offered by Mr. Bachus), No. 
32, requiring a GAO report on the Affordable Housing Fund, was 
agreed to, as modified by a voice vote.

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee held hearings and made 
findings that are reflected in this report.

                    Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the Committee establishes the 
following performance related goals and objectives for this 
legislation:
    The Federal Housing Finance Agency will oversee the safe 
and sound operation as well as the mission functions of Fannie 
Mae, Freddie Mac, and the Federal Home Loan Bank System. The 
Agency will be equipped with the tools and powers possessed by 
a world class regulator. The Agency will ensure that the GSEs 
do not pose a significant risk to the domestic or international 
financial system.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, or tax expenditures or revenues contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                                    April 23, 2007.
Hon. Barney Frank,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: As you requested, the Congressional 
Budget Office has prepared the enclosed cost estimate for H.R. 
1427, the Federal Housing Finance Reform Act of 2007.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Susanne S. 
Mehlman (for federal spending), Emily Schlect (for federal 
revenues), Marjorie Miller (for the state and local impact), 
and Paige Piper/Bach (for the private-sector impact).
            Sincerely,
                                                   Peter R. Orszag.
    Enclosure.

H.R. 1427--Federal Housing Finance Reform Act of 2007

    Summary: H.R. 1427 would establish a single regulator--the 
Federal Housing Finance Agency (FHFA)--for government-sponsored 
enterprises (GSEs) involved in the home mortgage market. GSEs 
are privately owned, Congressionally chartered financial 
institutions created to enhance the availability of credit in 
the economy. The GSEs that would be regulated by FHFA under the 
bill include the Federal National Mortgage Association (Fannie 
Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), 
and the Federal Home Loan Banks (FHLBs). These GSEs were 
created to increase the availability of credit for home 
mortgages.
    FHFA would be an independent agency within the federal 
government with the authority to oversee the safety, soundness, 
and mission of the housing GSEs. Under H.R. 1427, FHFA would be 
authorized to collect fees from the GSEs and to spend such fees 
to pay for its operating costs. Because the GSEs would be 
compelled by the government to pay those fees, the amounts 
collected and spent would be recorded on the federal budget as 
governmental revenues and outlays, respectively. CBO expects 
that FHFA would become operational midway through fiscal year 
2008, that its operations would cost about $50 million in 2008, 
and that fees collected by the agency would cover that 
spending.
    The legislation also would require Fannie Mae and Freddie 
Mac to contribute amounts equal to 1.2 basis points on their 
average total mortgage portfolios (that is, 1.2 cents per $100 
of the value of their mortgage portfolios) from the previous 
year to a new affordable housing fund created by the bill. 
Those contributions would occur over calendar years 2007 
through 2011 and would be used for three purposes. First, each 
year, 25 percent of the funds deposited in the affordable 
housing fund would be used to pay some of the interest on the 
Resolution Funding Corporation (REF CORP) bonds that would 
otherwise be paid by the U.S. Treasury. Second, in the first 
year of the fund's operation, the remaining 75 percent of the 
funds would be used to fund the reconstruction of housing in 
areas of Louisiana and Mississippi affected by Hurricanes 
Katrina and Rita. In subsequent years, that remaining 75 
percent would be used to provide grants to states and Indian 
tribes to support home ownership and rental housing among low-
income households and investment in public infrastructure 
associated with housing activities.
    As a result of the fees that would be collected and spent 
by FHFA and the transactions of the affordable housing fund, 
CBO estimates that enacting this legislation would increase 
revenues and direct spending by $2.7 billion over the 2008-2012 
period and by $3.3 billion over the 2008-2017 period.
    Finally, CBO estimates that implementing H.R. 1427 would 
result in net savings of about $22 million in discretionary 
spending over the next five years, assuming that appropriations 
are reduced to reflect the changes in regulatory structure that 
would be established in the legislation. Those savings would 
result from a reduction in the regulatory responsibilities of 
the Department of Housing and Urban Development (HUD).
    H.R. 1427 contains several intergovernmental mandates as 
defined in the Unfunded Mandates Reform Act (UMRA), but CBO 
estimates that the aggregate costs to state, local, and tribal 
governments would be minimal and would not exceed the threshold 
established in that act ($66 million in 2007, adjusted annually 
for inflation). The bill also would authorize formula grants to 
support affordable housing programs, which would benefit state, 
local, and tribal governments.
    H.R. 1427 would impose several private-sector mandates, as 
defined in UMRA, on Fannie Mae, Freddie Mac, and the FHLBs. CBO 
estimates that the aggregate direct cost of those mandates 
would exceed the annual threshold established by UMRA ($131 
million in 2007, adjusted annually for inflation) in fiscal 
years 2008 through 2011.
    Estimated cost to the Federal Government: The bill's 
estimated budgetary impact over the next five years is 
summarized in Table 1. The costs of this legislation fall 
within budget function 370 (commerce and housing credit).

            TABLE 1. ESTIMATED BUDGETARY IMPACT OF H.R. 1427
------------------------------------------------------------------------
                                      By fiscal year, in millions of
                                                 dollars--
                                 ---------------------------------------
                                   2008    2009    2010    2011    2012
------------------------------------------------------------------------
                           CHANGES IN REVENUES
 
Estimated Revenues..............     850     540     590     630     110
 
                       CHANGES IN DIRECT SPENDING
 
Estimated Budget Authority......     850     540     590     630     110
Estimated Outlays...............     570     520     560     610     460
 
              CHANGES IN SPENDING SUBJECT TO APPROPRIATION
 
Estimated Authorization Level...      -1      -3      -6      -6      -6
Estimated Outlays...............      -1      -3      -6      -6      -6
------------------------------------------------------------------------

    Basis of estimate: The budgetary impact of the bill would 
stem mostly from the establishment of a new regulator for the 
GSEs and from the creation of the affordable housing fund. For 
this estimate, CBO assumes that H.R. 1427 will be enacted by 
the end of fiscal year 2007, that the affordable housing fund 
will become effective upon enactment, that the FHFA will become 
operational midway into fiscal year 2008, and that 
appropriation actions consistent with this bill will occur.

Background on GSE regulation

    Currently, HUD is responsible for setting affordable 
housing goals for Fannie Mae and Freddie Mac and ensuring that 
these two GSEs meet such goals. HUD's oversight activities are 
funded from the agency's annual appropriation. In 2006, HUD 
spent about $6 million to perform those oversight 
responsibilities. In addition, the Office of Federal Housing 
Enterprise Oversight (OFHEO), an independent agency within HUD, 
currently oversees the financial safety and soundness of these 
two GSEs. OFHEO is funded through annual assessments collected 
from Fannie Mae and Freddie Mac; the collection and spending of 
those assessments are subject to appropriation actions. In 
2007, OFHEO was authorized to collect and spend about $60 
million to perform its duties.
    The FHLB system, which consists of 12 regionally based 
banks, is currently regulated by the Federal Housing Finance 
Board (FHFB). FHFB is an independent agency that oversees the 
financial safety and soundness of the FHLBs as well as their 
mission compliance; it is funded through annual assessments 
collected on the earnings of the FHLBs. The collection and 
spending of those annual assessment are not subject to 
appropriation actions. In 2007, FHFB anticipates that 
assessments and spending will total about $34 million.
    Under this legislation, beginning midway through 2008, FHFA 
would assume all of the responsibilities associated with 
oversight of Fannie Mae's and Freddie Mac's housing mission, 
which are currently under HUD's jurisdiction. Additionally, 
enacting H.R. 1427 would abolish OFHEO and FHFB six months 
following its enactment, and their functions and current staff 
would be transferred to FHFA. The legislation also would 
establish an Inspector General within FHFA.

Revenues and direct spending

    CBO estimates that the collection and spending of fees by 
FHFA would increase revenues and direct spending by about $1.1 
billion over the next 10 years.
    We also estimate that enacting the affordable housing fund 
provisions of H.R. 1427 would increase revenues and direct 
spending by about $2.2 billion over the same period. CBO 
assumes that Fannie Mae and Freddie Mac would begin making 
deposits to the new, affordable housing funds in calendar year 
2007, and that payments to REFCORP and spending for grants and 
other types of financial assistance from the funds also would 
begin in calendar year 2007. The estimated impact of the bill 
on direct spending and revenues over fiscal years 2008 through 
2017 is shown in Table 2.
    FHFA Fees and Spending. While many of the regulatory 
activities currently performed by HUD, OFHEO, and FHFB would 
continue under H.R. 1427, enacting this legislation also would 
establish some new authorities, such as the authority to 
liquidate a troubled or insolvent GSE and the authority to 
limit the portfolio holdings of Fannie Mae and Freddie Mac 
(that is, the amount of mortgages that are held instead of 
repackaged and then sold as mortgage-backed securities) to 
ensure financial soundness and consistency with the mission of 
these two GSEs. In addition, Fannie Mae and Freddie Mac would 
not be able to undertake any new program without prior approval 
from the Director of FHFA. Also, section 106 of this 
legislation would authorize the Director of FHFA to assess fees 
on the housing-related GSEs each year to obtain funding for 
reasonable costs and expenses associated with FHFA's 
responsibilities. Those fees paid by the GSEs would be 
classified as federal revenues because they would be imposed 
through the exercise of the government's sovereign power.

                     TABLE 2.--ESTIMATED IMPACT OF H.R. 1427 ON DIRECT SPENDING AND REVENUES
----------------------------------------------------------------------------------------------------------------
                                                      By fiscal year, in millions of dollars--
                                   -----------------------------------------------------------------------------
                                      2008     2009     2010     2011    2012   2013   2014   2015   2016   2017
----------------------------------------------------------------------------------------------------------------
FHFA Fees:
  Estimated Budget Authority......       50      100      110      110    110    110    120    120    120    120
  Estimated Outlays...............       50      100      110      110    110    110    120    120    120    120
  Estimated Revenues..............       50      100      110      110    110    110    120    120    120    120
Affordable Housing Funds:
  Estimated Budget Authority......    1,070      590      640      690      0      0      0      0      0      0
  Estimated Outlays:
    Fund Payments of REFCORP            270      150      160      170      0      0      0      0      0      0
     Interest.....................
    All Other Payments............      520      420      450      500    350      0      0      0      0      0
                                   -----------------------------------------------------------------------------
        Total Outlays.............      790      570      610      670    350      0      0      0      0      0
    Estimated Revenues............      800      440      480      520      0      0      0      0      0      0
Reduction in Treasury Payments of
 REFCORP Interest:
  Estimated Budget Authority......     -270     -150     -160     -170      0      0      0      0      0      0
  Estimated Outlays...............     -270     -150     -160     -170      0      0      0      0      0      0
Total Impact of H.R. 1427 on
 Direct Spending and Revenues:
  Estimated Budget Authority......      850      540      590      630    110    110    120    120    120    120
  Estimated Outlays...............      570      520      560      610    460    110    120    120    120    120
    Estimated Revenues............      850      540      590      630    110    110    120    120    120    120
----------------------------------------------------------------------------------------------------------------
Note: Positive (negative) changes in revenues correspond to decreases (increases) in budget deficits. Positive
  (negative) changes in direct spending correspond to increases (decreases) in budget deficits.

    Revenue Effects of the Fees Assessed by FHFA. CBO estimates 
that FHFA would require annual funding of about $50 million in 
2008, approximately half the amount that will be spent under 
current law to oversee the GSEs in 2007. In susbsequent years, 
we estimate that the new agency would spend $100 million to 
$120 million a year. Under the bill, the first assessment by 
FHFA would occur midway into 2008, and CBO estimates that 
resulting collections would total about $1.1 billion over the 
2008-2017 period. We expect that the fees assessed by FHFA 
would be roughly the same amount currently paid to OFHEO and 
FHFB. CBO estimates that any increase in costs stemming from 
the new responsibilities of FHFA would be offset by savings 
from merging the technical and administrative functions of 
OFHEO and FHFB.
    CBO expects that the new collections under the bill would 
be treated as revenues in the budget. Because the new fees paid 
by the GSEs to FHFA would be approximately equal to the amounts 
they would pay to OFHEO and FHFB under current law, taxable 
incomes of Fannie Mae and Freddie Mac or of other entities in 
the economy would not change significantly under the bill.
    Spending Effects of the Fees Assessed by FHFA. CBO expects 
that such spending would begin in fiscal year 2008 after FHFA 
is established. We estimate that, in most years, FHFA would 
spend the total amount of fees it collects from the GSEs. Thus, 
enacting this provision would increase federal outlays by about 
$480 million over the 2008-2012 period and by about $1.1 
billion over the 2008-2017 period.
    Affordable Housing Fund. Section 139 of H.R. 1427 would 
establish an affordable housing fund managed by the Director of 
FHFA. To support that fund, both Fannie Mae and Freddie Mac 
would be required to contribute amounts equal to 1.2 basis 
points on the previous year's average mortgage portfolio, 
(including mortgages held and those securitized), provided that 
the GSE is adequately capitalized and such contributions would 
not contribute to the GSE's financial instability. Under the 
legislation, these contributions by the GSEs would occur over 
calendar years 2007 through 2011 and would be used to pay some 
of the interest on REFCORP bonds, provide assistance to areas 
impacted by Hurricanes Katrina and Rita, and provide grants to 
states to support home ownership and public infrastructure. No 
later than June 30, 2011, the Director of FHFA would be 
required to report to the House Committee on Financial Services 
and the Senate Committee on Banking, Housing, and Urban Affairs 
on whether the affordable housing fund should be extended or 
modified after the end of calendar year 2011.
    REFCORP Bonds. The Resolution Trust Corporation (RTC) was 
created by the Financial Institutions Reform, Recovery, and 
Enforcement Act of 1989 (FIRREA) in the aftermath of the 
savings and loan crisis of the late 1980s as a means of 
liquidating insolvent institutions. FIRREA also established 
REFCORP to finance the operations of the RTC by issuing bonds. 
REFCORP issued about $30 billion in noncallable long-term bonds 
that mature between October 2019 and April 2030. The annual 
interest payable on those bonds through 2019 is $2.6 billion. 
(Interest payments will decrease from 2020 through 2030 as the 
bonds mature.)
    The bulk of the interest on these bonds is paid by the U.S. 
Treasury. Under FIRREA, and later under the Gramm-Leach-Biley 
Act of 2000, the FHLBs are required to pay some of the interest 
due on these bonds. To the extent that those payments from the 
FHLBs are not sufficient to pay the interest due on the bonds, 
the U.S. Treasury is required to pay the remaining amounts due. 
(In 2006, for example, the Treasury paid about $2 billion of 
the interest due.) H.R. 1427 would direct that 25 percent of 
the amounts deposited in the affordable housing fund each year 
to be used to pay some of the interest on REFCORP Bonds. Thus, 
CBO estimates that the amount of interest paid by the Treasury 
would decrease over the 2008-2012 period by about $750 million.
    Grants and other Financial Assistance. In fiscal year 2008, 
the remaining 75 percent of the deposits to the affordable 
housing fund would be provided to the Louisiana Housing Finance 
Agency and the Mississippi Development Authority to support 
reconstruction of affordable housing in areas affected by 
Hurricanes Katrina and Rita.
    In subsequent years, 75 percent of the deposits to the 
affordable housing fund would be used to provide grants to 
states and Indian tribes to support efforts to increase and 
improve home ownership and rental housing for extremely low- 
and very low-income families, and investment in public 
infrastructure associated with housing activities. The funds 
would be distributed based on a formula developed by HUD. Also 
under the bill, the fund's resources could not be used to fund 
activities, such as lobbying or counseling services, or pay for 
a grantee's administrative expenses.
    Budgetary Treatment of the Affordable Housing Fund. The 
required contributions to the affordable housing fund would be 
considered revenues because the bill compels their expenditure 
for governmental purposes. The deposit of specific amounts into 
the new fund would be compulsory, not voluntary. Likewise, 
expenditures from the fund would be a form of federal spending 
because the affordable housing funds could be obligated only 
for purposes specified in the bill. (FHFA would enforce the 
requirement for deposits into the affordable housing fund and 
would oversee spending of those funds to ensure compliance with 
federal purposes.)
    Revenue Impact of Establishing the Affordable Housing Fund. 
The estimated revenue effect of establishing the fund consists 
of two broad components. First, the levy on the average total 
mortgage portfolio (that is, payments equal to 1.2 basis points 
on the value of the average mortgage portfolio) would be 
accounted for as a revenue when credited to the affordable 
housing fund. The combined mortgage portfolio for these GSEs 
has averaged $3.8 trillion over the last five years. CBO 
estimates that future portfolios of these entities will grow by 
CBO's forecast of mortgage debt outstanding (that is, mortgage 
debt on one to four family residences), which is estimated to 
be about 5 percent to 7 percent annually . We also estimate 
that because section 133 of this legislation would permit the 
GSEs to securitize and sell certain high-dollar loans in high-
cost areas, a small expansion in the GSEs' volume of mortgage-
backed securities would result.
    CBO assumes that H.R. 1427 will be enacted by the end of 
fiscal year 2007, which would result in two assessments 
occurring in fiscal year 2008 and one assessment in each of the 
subsequent three fiscal years. The first assessment for the 
affordable housing fund would be based on the 2006 value of 
mortgage portfolios and would occur in calendar year 2007, but 
paid in fiscal year 2008. CBO estimates that in 2006 the value 
of the mortgage portfolios for both GSEs totaled about $4.3 
trillion, and we estimate that the assessment for 2008 would 
total $520 million. In addition, an assessment on the 2007 
value of mortgage portfolios would be collected in fiscal year 
2008 of about $550 million in fiscal year 2008. CBO estimates 
that over the 2008-2011 period, assessments would total about 
$3.0 billion. (Under H.R. 1427, collections would stop in 2011; 
continuation of the fund would require additional legislative 
action.)
    Second, spending of amounts from the affordable housing 
fund for both payments to the REFCORP and financial assistance 
to affordable housing programs would generate deductions 
against taxable corporate profits for the two GSEs. If the 
GSEs' taxable profits were reduced as a result of the 
affordable housing program, they would pay lower corporate 
income taxes. If the GSEs passed through some of the 
assessments to customers in the form of higher fees, other 
taxable incomes in the economy would presumably be lower. 
Therefore, CBO estimates that the payments to the affordable 
housing fund would reduce total taxable incomes in the economy 
and thus diminish federal tax receipts by about $750 million 
over the 2008-2012 period (25 percent of the amount of the 
payments from the funds). However, payments from the affordable 
housing fund to REFCORP would result in savings to the Treasury 
that are equal to the revenue loss caused by lower taxable 
incomes.
    Spending from the Affordable Housing Fund. Expenditures 
from the fund would constitute direct spending by the federal 
government and would likely begin in fiscal year 2008. We 
estimate that enacting this provision would increase federal 
outlays by $3 billion over the 2008-2012 period, with no 
spending after 2012 under this legislation.
    The bill would require that affordable housing fund grant 
amounts be committed for use within two years of the date the 
amounts are made available to the grantee. Unused amounts would 
be returned to the fund. While CBO estimates a lag between the 
recording of federal revenues and the spending of amounts in 
fund, we estimate that enacting the affordable housing 
provision would be deficit-neutral both over the 2008-2012, 
with no revenues or spending after 2012.

Other effects on spending

    Enacting H.R. 1427 also could have an additional minor 
impact on revenues and direct spending because this bill would 
provide for civil and criminal penalties against GSEs or a 
party affiliated with them for various violations of law. While 
enacting the legislation would expand the number of possible 
violations, CBO expects that the amount of fines assessed would 
not significantly increase under the bill. In fact, prior to 
the $125 million fine paid by Freddie Mac in 2003, a $125,000 
fine paid by one of its former employees, and a $400 million 
fine paid by Fannie Mae in 2007, no fines had been collected 
from any of the housing-related GSEs.
    Section 117 would direct GSEs to register their capital 
stock with the Securities and Exchange Commission (SEC) under 
the Securities Act of 1934. Registering under this act involves 
standardized disclosure of certain financial information but 
would not involve any payment of fees associated with other 
securities laws.
    Under current law, GSEs are exempt from registering their 
capital stock with the SEC. However, Fannie Mae has registered 
its stock voluntarily, though its filings have been suspended 
pending restated financial statements. Freddie Mac intends to 
register, but like Fannie Mae, cannot do so until its financial 
statements are corrected. The FHLBs are registered with the 
SEC. Based on information provided by the SEC, CBO estimates 
that implementing section 117 of H.R. 1427 would impose no 
significant costs on the SEC.
    In addition, enacting this legislation would abolish the 
FHFB. Thus, the receipts collected and spent by this regulatory 
body would no longer appear in the budget beginning midway 
through fiscal year 2008. Because collections and spending by 
FHFB are about equal, eliminating FHFB would have no net 
budgetary effect.

Spending subject to appropriation

    Implementing H.R. 1427 could result in net savings of about 
$22 million in discretionary spending over the next five years, 
assuming appropriation actions consistent with the legislation.
    Changes in HUD's Regulatory Responsibilities. CBO estimates 
that implementing the bill would reduce HUD spending by about 
$2 million beginning midway through 2008 and $6 million in each 
subsequent year because FHFA would take over HUD's current GSE-
oversight responsibilities, though HUD would be responsible for 
developing regulations associated with allocating funds from 
the affordable housing fund.
    GAO Studies and Audits. H.R. 1427 would require GAO to 
conduct several studies and audits over the next five years, 
including a study to examine the practices used by the GSEs to 
set guarantee fees, a study of the effects of the affordable 
housing fund on the cost of housing for borrowers, and an audit 
of the methodology used by FHF A to calculate changes in 
housing prices. Based on information from GAO, CBO estimates 
that it would cost GAO about $4 million over the next five 
years to carry out its responsibilities under this legislation. 
The bill also would require GAO to conduct annual audits of the 
financial transactions associated with the new regulator. 
However, the costs associated with the annual audits could be 
funded through the assessments collected by FHFA.
    Elimination of OFHEO. Under H.R. 1427, OFHEO would be 
abolished six months after enactment. Because its collections 
are about equal to its spending, the elimination ofOFHEO would 
have no net budgetary effect.
    Estimated impact on State, local, and tribal governments: 
Several provisions of H.R. 1427 would preempt state laws and 
thus constitute intergovernmental mandates as defined in UMRA. 
Those provisions would allow FHF A to act outside the authority 
of state law in some circumstances and would preempt state 
statute-of-limitations and contract laws. These preemptions 
would primarily occur in the unlikely instance that FHF A 
serves as the receiver or conservator of a regulated entity. 
CBO estimates that the aggregate costs to states of complying 
with these mandates would be minimal and would not exceed the 
threshold established in UMRA ($66 million, in 2007, adjusted 
annually for inflation). The bill also would authorize formula 
grants to support affordable housing programs, which would 
benefit state, local, and tribal governments.
    Estimated impact on the private sector: H.R. 1427 would 
impose several private-sector mandates, as defined in UMRA, on 
Fannie Mae, Freddie Mac, and the FHLBs. The bill would require 
Fannie Mae and Freddie Mac to contribute to a new affordable 
housing fund. In addition, the bill would require the housing-
related GSEs to comply with new requirements to be administered 
by the FHF A and to register their capital stock with the SEC. 
CBO estimates that the aggregate direct cost of those mandates 
would exceed the annual threshold established by UMRA ($131 
million in 2007, adjusted annually for inflation) in fiscal 
years 2008 through 2011.

Affordable housing fund

    The most costly mandate would require Fannie Mae and 
Freddie Mac to make contributions to the affordable housing 
fund to be established by this bill. In each calendar year 
through 2011, those GSE's would be required to allocate amounts 
equal to 1.2 basis points for each dollar of their average 
total mortgage portfolios from the previous year. CBO estimates 
that the direct cost of those mandatory contributions would 
total approximately $3 billion over the 2008-2011 period.

Regulatory functions

    The bill would establish a new federal regulator for the 
GSEs involved in the home mortgage market--Fannie Mae, Freddie 
Mac, and the FHLBs. In general, the GSEs would have to comply 
with regulations administered by their new regulator--the 
Federal Housing Finance Agency. Under current law, those GSEs 
pay assessments to their regulators. Under the bill, they would 
pay assessments for the operation of the FHFA. The duty to pay 
those fees would be a private-sector mandate, but CBO expects 
that the new fees would not differ significantly from the 
amounts the GSEs would otherwise pay to their current 
regulators.
    The bill would authorize the FHFA to establish a 
conservatorship or receivership over a critically 
undercapitalized GSE, to increase the amount of capital GSEs 
must hold, and to limit the portfolio holdings of the GSEs to 
ensure financial soundness. Such new authority would impose 
private-sector mandates on the GSEs when it is utilized.
    The cost to the GSEs would depend on how the regulations 
governing such authority are implemented. Because that 
information is not available, CBO cannot determine the cost of 
those mandates.
    The bill also would impose new reporting requirements on 
the GSEs. The bill would require Fannie Mae and Freddie Mac to 
submit an annual report to the FHFA on certain charitable 
contributions and to include in their annual report to the 
Securities and Exchange Commission their income reported to the 
Internal Revenue Service. According to industry 
representatives, the cost to comply with those mandates would 
be minimal.
    In addition, Fannie Mae, Freddie Mac, and the FHLBs would 
each be required to establish an Office of Minority and Women 
for developing and implementing standards and procedures to 
ensure the inclusion of minorities and women in their business 
activities. The GSEs also would have to conduct, or provide for 
the conducting of, an annual study to determine the levels of 
affordable housing inventory and the changes in those levels. 
According to industry representatives, the cost to comply with 
those mandates would be small relative to the annual threshold.

Registration of capital stock

    The bill also would require the GSEs to register their 
capital stock with the SEC under the Securities Act of 1934. 
Registering under this act involves a standardized disclosure 
of certain financial information. Under current law, GSEs are 
exempt from registering their capital stock with the SEC. 
According to the SEC, Fannie Mae has registered its stock 
voluntarily, though its filings have been suspended pending 
restated financial statements and Freddie Mac intends to 
register, when its financial statements are corrected. The 
FHLBs are registered with the SEC. Therefore, the direct cost 
to the GSEs to comply with this mandate would be minimal.
    Estimate prepared by: Federal spending: Susanne S. Mehlman. 
Federal revenues: Emily Schlect. Impact on State, local, and 
tribal governments: Marjorie Miller. Impact on the private 
sector: Paige Piper/Bach.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis and G. Thomas Woodward, Assistant 
Director for Tax Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that the 
Constitutional Authority of Congress to enact this legislation 
is provided by Article 1, section 8, clause 1 (relating to the 
general welfare of the United States) and clause 3 (relating to 
the power to regulate interstate commerce).

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

                         Earmark Identification

    H.R. 1427 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of rule XXI.


             Section-by-Section Analysis of the Legislation


Section 1. Short title

    This section establishes the short title of the bill, the 
``Federal Housing Finance Reform Act of 2007.''

Section 2. Definitions

    This section defines various terms referred to in the bill, 
including ``regulated entities,'' which refer to Fannie Mae, 
Freddie Mac, and the Federal Home Loan Banks, and generally 
conforms existing definitions to reflect the provisions of this 
bill.

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


            Subtitle A--Improvement of Safety and Soundness


Section 101. Establishment of the Federal Housing Finance Agency

    Creates an independent agency, the Federal Housing Finance 
Agency (FHFA or Agency) as an independent Agency of the Federal 
government, headed by a presidentially appointed Senate-
confirmed Director, to oversee Fannie Mae, Freddie Mac and the 
Federal Home Loan Banks (collectively the ``regulated 
entities''). This provision grants the FHFA general supervisory 
and regulatory authority over the regulated entities, including 
any joint office of the Federal Home Loan Banks, and requires 
the agency to ensure that the purposes of the Act, the 
authorizing statutes and other applicable laws are carried out. 
The Director has a term of 5 years and may be removed only for 
cause. The Director shall appoint three Deputy Directors: 
Deputy Director of the Division of Enterprise Regulation; 
Deputy Director of Federal Home Loan Bank Regulation; and 
Deputy Director for Housing.

Section 102. Duties and authorities of Director

    The principal duties of the Director will be to oversee the 
operations of the regulated entities (and any joint office of 
the Federal Home Loan Banks) and ensure their safe and sound 
operation as well as oversee their respective housing or 
housing finance and community and economic development 
missions. Regarding their housing missions, the Director must 
ensure that ``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 * * * .'' This provision clarifies, consistent 
with existing authority, that the Director will establish 
prudential management and operations standards for each 
regulated entity comparable to standards established by the 
Federal bank regulatory agencies for depository institutions. 
This section provides an enforcement regime for the standards, 
which may require the regulated entity that fails to meet the 
prescribed standards to submit a corrective plan, restrict 
asset growth, or increase capital. The Director is authorized 
to testify before Congress without prior Administration review 
of the testimony and to review and, if warranted, reject any 
acquisition or transfer of a controlling interest in an 
enterprise. The Director also is granted independent litigating 
authority to enforce the government-sponsored enterprise 
provisions of the Housing and Community Development Act of 
1992, as amended, any regulation or order thereunder, 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. This 
general independent litigation authority is supplemented by 
section 164, which grants specific authorization to the 
Director to enforce notices and orders issued under the capital 
and enforcement provisions of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992.

Section 103. Federal Housing Enterprise Board

    A board, consisting of the Director, as chair, the 
Secretaries of Treasury and the Department of Housing and Urban 
Development (HUD), and two additional appointed members, will 
advise the Director on strategies and policies in carrying out 
the duties of the Director. The additional directors are 
presidentially appointed Senate confirmed, have a term of 4 
years, and can be removed only for cause. The board meets by 
notice of the Director, but at least every three months. The 
Board is prohibited from exercising any ``executive 
authority.'' The Board is required to testify before Congress 
and submit an annual report regarding safety and soundness, any 
material deficiencies, overall operational status, and 
performance in carrying out housing mission with respect to the 
regulated entities, as well as the operations, resources, 
workforce diversity, mission fulfillment and performance of the 
Agency.

Section 104. Authority to require reports by regulated entities

    The Director may require the regulated entities to submit 
regular reports on condition, management, activities, or 
operations, and any special reports. Reports of fraudulent 
financial transactions must be submitted to the Director.

Section 105. Disclosure of income and charitable contributions by 
        enterprises

    The enterprises must submit annually to the Director a 
report on the total value of contributions made by the 
enterprise to non-profit organizations during its previous 
fiscal year. This report must also include specific information 
about the value and recipients of substantial contributions and 
about substantial contributions given to charities affiliated 
with enterprise insiders. The Director shall make the 
information submitted in the reports publicly available.
    Each enterprise must prominently disclose in its annual 
report the amount of income reported by the enterprise to the 
Internal Revenue Service for the most recent taxable year.

Section 106. Assessments

    Permits the Agency to obtain funding for winding up the 
affairs of the Office of Federal Housing Enterprise Oversight 
(OFHEO) and the Federal Housing Finance Board (Finance Board) 
and for reasonable costs and expenses on an annual basis 
through assessments on the regulated entities. The amounts 
received by the Director are not to be considered government 
funds or appropriated monies. It is expected that, in making 
annual assessments and disbursing funds for agency expenses, 
the Director will, to the extent possible, have assessments 
from Fannie Mae and Freddie Mac be used for supervision of 
those regulated entities and assessments from the Federal Home 
Loan Banks be used for supervision of those entities. Each 
regulated entity is to be assessed in accordance with its total 
assets. The Director is permitted to adjust assessments to pay 
additional estimated costs of regulating a regulated entity 
that is not adequately capitalized, or to ensure that a 
regulated entity bears the cost of enforcement activity it 
generates. Consistent with current practice at OFHEO and the 
Finance Board, assessments will be deposited with the U.S. 
Department of the Treasury, and the Director may request the 
Secretary of the Treasury to invest amounts of the collected 
assessments.
    Assessments are not subject to apportionment, and, although 
the Director must submit financial operating plans, forecasts, 
and reports of agency financial condition to OMB, the latter 
has no approval authority with regard to the reports or other 
related jurisdiction over the agency.
    The Government Accountability Office (GAO) must annually 
audit the financial transaction of the Agency and submit a 
report to Congress of each annual audit conducted. The Agency 
must reimburse GAO for the costs of any CPA firms the GAO hires 
in connection with such audits.

Section 107. Examiners and accountants

    Grants the Agency special authority to hire examiners, 
accountants, economists, and experts in financial markets and 
information technology.

Section 108. Prohibition and withholding of executive compensation

    Grants the Director, when making a determination of whether 
to prohibit the payment of compensation to any executive 
officer of the regulated entities, authority to take into 
account any factors the Director considers relevant, including 
``any wrongdoing on the part of the executive officer.'' The 
Director is authorized to direct a regulated entity to withhold 
any payment, transfer, or disbursement of compensation to an 
executive officer or to place such compensation into escrow 
during review of the reasonableness and comparability of 
compensation. The approval of an agreement or contract does not 
preclude the Agency's ability to make such a determination.

Section 109. Reviews of regulated entities

    The Director may contract with any entity, including a 
nationally recognized statistical rating organization, that the 
Director considers appropriate to conduct a review of the 
regulated entities.

Section 110. Inclusion of minorities and women

    Each regulated entity must have an Office of Minority and 
Women Inclusion responsible for matters relating to diversity 
in all aspects of the entity's management, employment, and 
business activities in accordance with requirements established 
by the Director. Each regulated entity must develop and 
implement standards and procedures to ensure, to the maximum 
extent possible, the inclusion and utilization of minorities 
and women, and minority- and women-owned businesses at all 
levels of the entity and in all business and activities of the 
entity. Processes for evaluation of all contract proposals and 
for service provider hires of any kind must give consideration 
to the diversity of the applicants. Each regulated entity must 
disclose in its annual report detailed information about 
actions taken by the Office.
    The Agency must take affirmative steps to seek diversity in 
all levels of its workforce consistent with the demographic 
diversity of the United States.

Section 111. Regulations and orders

    The Director will issue any regulations, guidelines, and 
orders necessary to carry out the duties of the Director.

Section 112. Non-waiver of privileges

    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. 
This provision may not be construed to imply or establish that 
any person waives any privilege applicable to information that 
is submitted or transferred under any circumstance to which the 
provision does not apply, or that any person would waive any 
privilege applicable to any information by submitting the 
information to the Agency, but for the provision.

Section 113. Risk-based capital requirements

    The Agency is authorized to establish risk-based capital 
requirements for the regulated entities to ensure they operate 
in a safe and sound manner with sufficient permanent capital to 
support risk-taking. This section removes the current 
limitations on the form and content of risk-based capital rules 
included in the existing statute in order to provide the Agency 
with broad authority to adopt robust risk-based capital 
standards to ensure the safe and sound operation of the 
regulated entities. This section does not eliminate current 
risk-based capital regulations, which will remain in effect 
unless amended by the Director.

Section 114. Minimum and critical capital levels

    This section authorizes the Director to raise the minimum 
capital requirements for the enterprises or federal home loan 
banks, or both, by regulation subject to notice and comment, 
from the current statutory levels to the extent such an 
increase is needed to ensure the regulated entities operate in 
a safe and sound manner, notwithstanding their capital 
classifications.
    The section also provides the Director the authority to 
require a temporary increase in minimum capital for a regulated 
entity by order under certain circumstances related to the 
safety and soundness of the entity. A temporary increase in 
minimum capital may be required if the Director: (1) makes a 
determination for reclassification of capital category under 
the prompt corrective action provisions that an entity is 
engaging in conduct that could rapidly deplete its capital or 
significantly decrease the value of assets held, is engaged in 
an unsafe or unsound practice, or is in an unsafe and unsound 
condition; (2) determines that the regulated entity has 
violated any of the prudential standards and as a result of 
such violation determines that an unsafe or unsound condition 
exists; or (3) determines that an unsafe or unsound condition 
exists. A temporary increase in minimum capital ordered under 
this third provision, however, shall not remain in place for 
more than 6 months unless the Director makes a renewed 
determination of the existence of an unsafe and unsound 
condition.
    Additionally, 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 that 
the Director considers appropriate to ensure that the regulated 
entity enterprise 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.
    This section provides for the periodic review of the 
capital of the regulated entities and any minimum capital level 
established under this section. If the Director determines that 
the circumstances justifying any temporary minimum capital 
increase made under this section are no longer present, the 
Director must rescind the temporary increase. The Director 
cannot lower minimum capital levels below current statutory 
levels.
    Not later than 180 days after the effective date, the 
Director will establish by regulation critical capital levels 
for the Federal Home Loan Banks. In establishing critical 
capital levels for the Federal Home Loan Banks, the Director 
will take due consideration of the critical capital level 
established for the enterprises, with such modifications as the 
Director determines to be appropriate to reflect the difference 
in operations between the Federal Home Loan Banks and the 
enterprises.

Section 115. Review of and authority over enterprise assets and 
        liabilities

    Section 115 provides the regulator with authority to 
establish standards for the safe and sound and mission-
compliant operation of the enterprises' portfolios. Not later 
than 180 days after the effective date, the Director must 
establish standards, after a notice and comment rule making 
process, 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. The Committee intends that the standards 
established under this section be designed to support the safe 
and sound operation of the enterprises, as well as their 
compliance with their charters and the fulfillment of their 
missions to provide liquidity and stability to the secondary 
markets for home mortgages. The standards required under this 
section are not intended to address potential risks to the 
financial system that are unrelated to specific considerations 
of the safe and sound operation of the enterprises' portfolios, 
nor are they intended to limit the enterprises' portfolios 
predominantly to assets acquired for the purposes of meeting 
the enterprises' affordable housing goals.
    In developing the standards, the Director must consider a 
list of factors related to both the safety and soundness of the 
enterprises and the roles they play in the secondary mortgages 
markets. The Director is required to 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; (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 by the nature of the portfolio 
holdings; and (7) any additional factors the Director 
determines to be necessary to carry out the purposes of this 
section to assess mission-compliance and safety and soundness 
of the operation of the enterprises. The purpose of the 
standards-setting required in this section is to provide 
standards for the safe and sound and mission-compliant 
operation of the portfolios and the factors therefore are 
limited to the safety and soundness and mission of the 
enterprises themselves, not other market participants.
    While this section requires the establishment of standards 
for operation and growth of the portfolios, the Director is 
provided authority, by order, to make temporary adjustments to 
the portfolio standards, such as during times of economic 
distress or market disruption. Such authority could be used by 
the Director to ensure that the enterprises are able to provide 
adequate liquidity to the market as needed without violating 
the standards.
    The section requires that the Director monitor the 
portfolios of the enterprises. Pursuant to this review, and 
notwithstanding the capital classifications of the enterprises, 
the Director may by order and subject to such terms and 
conditions the Director determines to be appropriate, require 
an enterprise to dispose of or acquire any assets, if the 
Director determines that such action is consistent with the 
safety and soundness or mission of the enterprise.

Section 116. Corporate governance of enterprises

    This section codifies a 2005 rule making by OFHEO for 
improvements in corporate governance, regarding boards of 
directors, compensation, codes of conduct and ethics, conduct 
and responsibilities of boards of directors, audits, extensions 
of credit to board members and executive officers, compliance 
program requirements, change of audit partners, risk 
management, CEO and CFO certification of disclosure, and other 
matters.

Section 117. Required registration under Securities Exchange Act of 
        1934.

    Each regulated entity shall be required to register at 
least one class of the entity's capital stock with the 
Securities and Exchange Commission (SEC).

Section 118. Liaison with Financial Institutions Examination Council

    The Agency is to participate on the Federal Financial 
Institutions Examination Council (FFIEC) in a liaison capacity. 
The FFIEC prescribes uniform standards for examination of 
financial institutions, with federal financial regulators as 
members.

Section 119. Guarantee fee study

    The Agency, in consultation with the federal bank 
regulatory agencies and HUD, will, within 18 months of 
enactment, submit to Congress a study concerning the pricing, 
transparency, and reporting of Fannie Mae, Freddie Mac, and the 
Federal Home Loan Banks regarding guarantee fees and the 
practices of other participants in the business of mortgage 
purchases and securitization.

Section 120. Conforming amendments

    This section makes changes that are necessary to conform 
existing law with new provisions in H.R. 1427, such as 
eliminating references to the ``Office of Federal Housing 
Enterprise Oversight'' and replacing them with the ``Federal 
Housing Finance Agency,'' striking sections made unnecessary by 
earlier parts of the bill, and striking outdated provisions 
pertaining to the issuance of regulations.

             Subtitle B--Improvement of Mission Supervision


Section 131. Transfer of product approval and housing goal oversight

    This section amends and transfers authority to oversee the 
mission requirements of Fannie Mae and Freddie Mac from HUD to 
the Agency.

Section 132. Review of enterprise products

    This section strikes the ``program'' approval provisions of 
current law and replaces it with provisions under which the 
Director shall require each enterprise to submit a written 
request for and obtain the approval of the Director for a new 
product before the enterprise may initially offer the product. 
An enterprise may not offer any new product prior to obtaining 
approval of the Director, following public notice and 30-day 
comment period. The Director may approve, or conditionally 
approve, a new product if the Director determines that: (1) the 
product is authorized under the enterprise's chartering act; 
(2) the product is in the public interest; (3) the product is 
consistent with the safety and soundness of the enterprise and 
the mortgage finance system; and (4) the product does not 
materially impair the efficiency of the mortgage finance 
system.
    Immediately upon receipt of a request for approval of a 
product, the Director is required to publish notice of the 
request and of the 30-day period for public comment. Not later 
than 30 days after the close of the public comment period, the 
Director must approve or deny the product and specify the 
grounds for the decision in writing. If the Director does not 
act within the 30-day period to approve or deny a product, the 
enterprise may offer the product.
    This section provides for expedited review of any new 
activity, service, undertaking or offering that an enterprise 
determines is not a product. Immediately upon receipt of a 
notice from an enterprise that a new activity, service, 
undertaking or offering is not a product, the Director must 
determine if the activity, service, undertaking or offering 
consists of, relates to, or involves a product. If the Director 
determines that any new activity, service, undertaking, or 
offering consists of, relates to, or involves a product, the 
Director shall notify the enterprise of that determination, and 
the new activity, service, undertaking or offering shall be 
considered a product subject to the established approval 
process for new products.
    The Director may conditionally approve the offering of any 
product and may establish terms, conditions, or limitations 
with respect to the product and with which the enterprise must 
comply.
    The product review process does not apply to certain 
fundamental aspects of enterprise operation. The definition of 
the term ``product'' explicitly excludes the automated 
underwriting system of an enterprise in existence on the date 
of enactment, including any upgrade to the technology, 
operating system, or software to operate the system. The term 
``product'' also does not include modifications to 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 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.
    This section does not define specifically the term 
``product'' other than by exclusion, due to the difficulty of 
adequately delineating the scope of offerings that the Director 
may determine are authorized under the enterprises' charters 
and meet the other criteria set forth for approval. In 
determining what offerings or changes to existing offerings 
rise to the level of a new product that should be subject to 
notice and approval, this section therefore provides the 
Director adequate flexibility to implement this provision in a 
manner that addresses both the need to provide notice to market 
participants of new products and the need for the enterprises 
to respond in a timely manner to market demands. The Committee 
expects that the Agency will establish procedures, similar to 
those developed by the federal bank regulatory agencies, to 
provide for a timely and efficient process that will minimize 
unnecessary burden on the enterprises and originating 
institutions while assuring prompt and appropriate public 
notice. As with the banking agencies, the Committee expects 
that the Agency will establish procedures that provide for 
appropriate treatment of proprietary business information.
    The provision does not apply to existing products or 
activities that were commenced or offered prior to the 
enactment of this legislation, but does not limit the authority 
of the Agency to review products and activities for safety and 
soundness and compliance with the enterprises' respective 
charters.

Section 133. Conforming loan limits

    This section updates statutory language from 1981 that set 
conforming loan limits for Fannie Mae and Freddie Mac, and 
provided for adjustments upward through an index/housing 
survey. While the conforming loan limit has been raised every 
year since 1981, this section inserts 2007 conforming loan 
limits that were set by the current regulator at $417,000 for a 
one-unit single family residence; $533,850 for a two-unit 
family residence; $645,300 for a three-unit family residence 
and $801,950 for a four-unit family residence. Allows for these 
limits to be adjusted annually, starting on January 1 after the 
effective date of this legislation, to reflect increases and, 
for the first time, decreases in housing prices, and a new 
method for establishing annual adjustments authorized in this 
section.
    This section authorizes Fannie Mae and Freddie Mac to 
further increase loan limits above the conforming loan limits 
in areas in which the median home prices are greater than the 
conforming loan limits. The enterprises may adjust loan limits 
in any such area up to the lesser of 150 percent of the 
conforming loan limit or the area median home price. This 
increase applies only to mortgages on which are based 
securities issued and sold by an enterprise. This provision is 
different from current law, which provides similar loan limit 
adjustments for Alaska, Hawaii, Guam and the Virgin Islands set 
at 150 percent of the conforming loan limit, without any 
relationship to median home prices.
    The Director must establish a Housing Price Index, which 
would be subject to a GAO audit on the methodology and timing 
of the index followed by a report to Congress. The Director 
will conduct a study, within six months of the effective date, 
of whether the securitization requirement raises the cost of 
high-cost area loans, and may terminate the requirement if it 
is found to raise costs to borrowers.

Section 134. Annual housing report regarding regulated entities

    The Director must submit an annual report to Congress after 
reviewing the Affordable Housing Activities Reports (AHARs) 
submitted by Fannie Mae and Freddie Mac and certain reports on 
the Federal Home Loan Banks in supporting low income housing 
and community development.
    The Director's report will examine the affordable housing 
goals and how each enterprise is complying with those goals and 
the housing fund provisions, the progress of the Federal Home 
Loan Banks in their Mfordable Housing Program (AHP) and 
Community Investment Program (CIP), and whether the regulated 
entities are achieving their respective missions. The bill 
requires detailed reporting by the Agency on housing and 
affordable housing issues and requires a detailed monthly 
survey of mortgage markets to assist the Agency in this report 
and in the establishment of the housing price index methodology 
to determine loan limits. Data collected for the monthly survey 
must be made public, but the Agency may modify the data in 
order to not reveal a borrower's identity.
    This provision also requires the Agency, by regulation, to 
establish standards by which mortgages purchased and/or 
securitized by the enterprises shall be characterized as 
subprime loans. These standards are solely to provide data for 
purposes of the Agency report to identify the extent to which 
each enterprise is engaged in purchasing or other secondary 
market activities involving subprime loans. In its reports, the 
Agency also must identify the extent to which each enterprise 
is purchasing and securitizing subprime loans, and compare the 
characteristics of subprime loans purchased and securitized by 
the enterprises with other loans.

Section 135. Annual reports by regulated entities on affordable housing 
        stock

    The regulated entities shall, pursuant to regulatory 
requirements established by the Director, conduct or provide 
for the conduct of an annual study to determine the levels and 
changes in levels of affordable housing inventory for the 
United States, each State, and each community in each State. 
Affordable housing inventory shall include affordable rental 
dwelling units and affordable homeownership dwelling units.

Section 136. Revision of housing goals

    The Director is required to establish for the enterprises 
three single family housing goals and a multifamily special 
affordable housing goal. The bill adds a refinance subgoal to 
the single family goals, and a subgoal for single family rental 
housing units. In implementing these goals, the Director and 
the enterprises are required to address evidence of any 
disparities in interest rates between minorities and non-
minorities of similar creditworthiness. The bill strengthens 
enforcement authority in the event that enterprises do not meet 
their housing goals. Compliance with the single-family goals 
for each year will be measured by whether the annual numerical 
targets established by the Director are met or exceeded.
    Specifically, the bill replaces the three existing housing 
goals with three single family housing goals that measure the 
percentage of single family, owner-occupied purchase money 
mortgages for the following: (1) ``low-income'' families 
(families with incomes of 80 percent or less of area median 
income (AMI)); (2) ``very low-income'' families (families with 
incomes of 50 percent or less of AMI) and (3) families that 
reside in low-income areas (census tracts with median incomes 
of 80 percent or less of AMI and families with incomes less 
than 100 percent of AMI who reside in minority tracts). 
Separate statutory subgoals are established for refinancings, 
and for single family rental housing units. The Director will 
set the annual single family housing goal targets (both owner-
occupied and rental) prospectively, using the prior three year 
average of market HMDA data as a baseline, and may increase the 
targets adjust to reflect expected changes in market 
performance based on factors similar to those in current law 
regarding goal establishment, including the ability of the 
enterprise to lead the industry in each goal area in making 
mortgage credit available. This provision should provide the 
Director flexibility to continue the practice of considering 
the enterprises' penetration into the subprime and other 
markets.
    The Director continues to have discretion to set goals for 
a multi-year period. Setting multi-year goals allows the 
enterprises time to plan and incorporate goal-qualifying 
activities into their longer-term business strategies.
    The newly created Multifamily Special Affordable Housing 
Goal measures mortgages that finance dwelling units for low-
income families (families with incomes of 80 percent or less of 
AMI), very-low income families (families with incomes of 50 
percent or less of AMI), and mortgages that finance dwelling 
units assisted by the low-income housing tax credit. The bill 
contains additional requirements to increase the purchase of 
small multifamily mortgages. The Director will give credit 
towards the Multifamily Special Affordable Housing Goal to 
dwelling units in multifamily housing that is financed by 
taxexempt or taxable bonds issued by a State or local housing 
finance agency if the bonds are secured by a guarantee of an 
enterprise or if the bonds are not investment grade and are 
purchased by an enterprise.
    An enterprise may petition the Director, in writing, for a 
reduction in the housing goals. The Director may reduce the 
goal level only if market and economic conditions or the 
financial condition of the enterprise require such action, or 
if efforts to meet the goal would result in liquidity 
constraints, over-investment in certain market segments, or 
other consequences contrary to the enterprise's purpose. A 
denial from the Director to reduce the level of the goal may be 
appealed in the courts.
    The Director shall assign added credit toward achievement 
of the housing goals for mortgage purchase activities of an 
enterprise that supports housing that includes a licensed 
childcare center, or that supports housing that meets energy 
efficiency or other Federal, State or local environmental 
standards for the geographic area where the housing is located. 
The availability of additional credit shall not be used to 
increase any housing goal, subgoal or target.

Section 137. Duty to serve underserved markets

    This section adds a duty for each enterprise to serve 
underserved markets that lack adequate credit through 
conventional lending sources by increasing the liquidity of 
mortgage investments and improving the distribution of 
investment capital available for mortgage financing for 
underserved markets. This section instructs the enterprises to 
undertake activities relating to mortgages on housing for very 
low (50 percent and less of AMI), low (80 percent and less of 
AMI) and moderate (100 percent and less of AMI) income 
families.
    The Enterprises are required to lead the industry in 
developing loan products and flexible underwriting guidelines 
to facilitate a secondary market in three specified markets--
manufactured housing, affordable housing preservation 
(including through current government programs), and rural 
housing--and the Director may establish other underserved 
markets. However, it is not intended that the Director would 
create percent-of-business or other numeric goals under this 
section.
    Within six months of the effective date, the Director must 
establish a manner for evaluating compliance of the enterprises 
under each of the three categories of the duty to serve 
provisions. When evaluating compliance, the Director will take 
into consideration: (1) the development of loan products and 
more flexible underwriting guidelines; (2) the extent of 
outreach to qualified loan sellers in underserved markets; and 
(3) the volume of loans purchased in such underserved markets.
    The Director must report to Congress annually on this 
evaluation and the duty-to-serve provisions are enforceable 
under the same provisions as the housing subgoals.

Section 138. Monitoring and enforcing compliance with housing goals

    The Director is authorized to take a number of steps to 
enforce compliance, including cease-and-desist orders, 
prohibition on enterprise offerings of products or engaging in 
any new activities, services, undertakings and offerings 
pending achievement of the goals, and civil money penalties not 
to exceed $50,000 per day, if the enterprise has failed to meet 
a housing goal, has failed to submit a housing plan if 
required, submits an unacceptable plan, fails to comply with 
the plan, or violates any other rule, regulation, or order 
relative to the housing goals.

Section 139. Affordable housing fund

    This section creates an ``Affordable Housing Fund,'' to be 
managed by the Director. Funds are derived through 
contributions to be made by Fannie Mae and Freddie Mac each 
year from 2007 through 2012, with the fund sunsetting after 
this five year period. Contributions are to be made in amounts 
equal to 1.2 basis points on each enterprise's average total 
outstanding mortgages (including both those held in portfolio 
and those securitized) from the prior calendar year. Seventy-
five percent of these funds are used for affordable housing 
fund purposes, and twenty-five percent are allocated to the 
federal government, to keep the bill deficit neutral. The 
Director can temporarily suspend allocations by an enterprise 
upon a finding that the allocation would contribute to the 
financial instability of the enterprise, would cause the 
enterprise to be undercapitalized or would prevent the 
enterprise from successfully completing a capital restoration 
plan.
    Seventy-five percent of the affordable housing funds 
available in the first year will go to Louisiana and twenty-
five percent of such funds will go to Mississippi for 
affordable housing needs arising out of Hurricanes Katrina and 
Rita. Thereafter, funds are allocated by formula to the states 
(including also D.C., federal territories, and federally 
recognized tribes). This formula is to be developed by HUD, and 
is to be based on a number of factors, including population, 
housing affordability, percentage of very and extremely low 
income families, cost of rehab, and extent of substandard and 
aging housing. If HUD fails to establish this formula on time, 
funds are distributed to states based on HOME allocations to 
states and Participating Jurisdictions.
    One-hundred percent of funds must be used for the benefit 
of very low and extremely low income families. Funds may be 
used for both rental housing and homeownership, with at least 
ten percent of funds used by each state for home ownership. 
Families receiving homeownership assistance must have completed 
prepurchase counseling prior to buying the home. Funds also may 
be used for public infrastructure activities in conjunction 
with housing, but no more than 12.5 percent of funds in any 
state may be used for this purpose.
    Affordable housing grants are to be made to eligible 
recipients, which can be any ``organization, agency, or other 
entity (including a for-profit entity, a nonprofit entity, and 
a faith-based organization)'' that has demonstrated experience 
and capacity to conduct an eligible activity, demonstrates the 
ability and financial capacity to undertake, comply, and manage 
the eligible activity, and 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. Grantee funds may only be used for affordable housing 
uses, and not for administrative costs, except that by 
regulation the Director can limit the amount of any grant 
amounts a state, (or D.C. a territory or tribe) may use for 
administrative costs of carrying out the program to a 
percentage of such grant amounts, which may not exceed 10 
percent of grant funds used.
    Each state allocates funds under its own Allocation Plan, 
to be based on priority housing needs in each state, and on 
criteria that include greatest impact, geographic diversity, 
ability to obligate funds in a timely manner, and the extent to 
which rental housing projects are affordable, especially for 
extremely low income families. Funds are redistributed from any 
state that does not obligate funds within 2 years.
    This section includes a number of provisions to ensure that 
the funds are used for housing and are not misused or used for 
other purposes. The Director is required to adopt regulations 
to set forth prohibited uses of Fund grant amounts, such as 
administrative, outreach or other costs of the grantee (other 
than administrative costs of carrying out the Fund program) or 
any grant recipient, and political activities, advocacy, 
lobbying, counseling, travel expense, or preparation or advice 
on tax returns. Grantees are required to submit annually a 
report to the Director to describe the activities funded during 
that year and the grantee's compliance with the allocation 
plan. These reports will be made publicly available. Other 
provisions to ensure appropriate use of Fund grant amounts 
include: (1) a requirement by the Director to establish program 
regulations; (2) authority for the Director to audit each 
state's compliance; (3) a requirement that each state develop 
systems to ensure program compliance and required annual state 
fund use reports; and (4) authority for the Director to impose 
penalties on states that do not comply with requirements, 
including requiring states and grantees to reimburse misused 
funds.
    H.R. 1427 authorizes affordable housing funds allocated 
under the bill to be transferred at a later date to a national 
affordable housing trust fund that may be subsequently enacted 
into law. Although the establishment of an affordable housing 
fund with monies allocated from the GSEs will play a 
significant role in providing affordable housing, a national 
shortage of affordable housing will still exist. A trust fund 
would serve as a dedicated source of revenue for the production 
of new housing and the preservation and rehabilitation of 
existing housing that is affordable for low income people.
    The GAO is required to conduct a study and report to 
Congress within one year of enactment concerning the effect the 
AHF will have on availability and affordability of credit for 
homebuyers, and the extent to which the costs to the 
enterprises of funding the AHF will be passed on to homebuyers.

Section 140. Consistency with mission

    This section clarifies that the changes made relating to 
housing goals, duty to serve, and the affordable housing fund 
should not be construed to authorize an enterprise to engage in 
any program or activity that contravenes or is inconsistent 
with the charter acts of the enterprises.

Section 141. Enforcement

    This section expands the enforcement authority currently 
provided the HUD Secretary with respect to enforcement of the 
enterprises' housing goals. The expanded authority allows the 
Director to issue and serve a notice of charges and to impose 
cease and desist orders and civil money penalties on an 
enterprise, if the Director determines that the enterprise has: 
(1) failed to meet a housing goal; (2) failed to submit certain 
required reports; (3) failed to submit mortgage data and other 
information and reports required under the chartering acts of 
the enterprises; (4) failed to submit an acceptable housing 
plan, if required; or (5) failed to comply with a housing plan 
or any other order, rule, or regulation under the applicable 
sections of the Housing and Community Development Act of 1992, 
as amended by this bill.
    The amount of civil money penalties that may be imposed may 
not exceed $50,000 for each day a failure to meet a housing 
goal, submit or comply with a required housing plan occurs; and 
$20,000 per day for failure to submit required reports or 
information or failure to comply with any order, rule or 
regulation for each day a failure occurs.
    The Director may directly seek enforcement 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 enterprise is located; or may request 
the Department of Justice to bring the action.

Section 142. Conforming amendments

    Makes changes that are necessary to conform existing law 
with new provisions in H.R. 1427, such as eliminating 
references to the ``Secretary of HUD'' and replacing them with 
the ``Director,'' striking sections made unnecessary by earlier 
parts of the bill, and striking outdated provisions pertaining 
to the issuance of regulations.

                  Subtitle C--Prompt Corrective Action


Section 151. Capital classifications

    This section establishes capital classifications for the 
Federal Home Loan Banks as well as for Fannie Mae and Freddie 
Mac. The regulated entities can be classified as: adequately 
capitalized, undercapitalized, significantly undercapitalized, 
and critically undercapitalized. The Director may reclassify a 
regulated entity at any time, if: (1) the Director determines 
in writing that a 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, the value of the property 
securitized has decreased significantly; (2) after notice and 
hearing, the Director determines that the entity is in an 
unsafe or unsound condition; or (3) if the entity is engaging 
in an unsafe or unsound practice, as deemed by the Director 
under section 1371(b).
    A regulated entity will make no capital distribution if, 
after making the distribution, the entity would be 
undercapitalized.

Section 152. Supervisory actions applicable to undercapitalized 
        regulated entities

    If a regulated entity is classified as undercapitalized, 
the Director must ``closely monitor'' the condition of the 
regulated entity and review and monitor the entity's compliance 
with a capital restoration plan. Additionally, the Director 
will have the authority to restrict the asset growth of an 
undercapitalized entity. Undercapitalized entities may not 
acquire any interest in any entity, offer any new product or 
engage in any new activity, service, undertaking or offering 
without prior approval from the Director. If the Director 
determines it is necessary, the Director also may use authority 
and take actions applicable to significantly undercapitalized 
enterprises.

Section 153. Supervisory actions applicable to significantly 
        undercapitalized regulated entities

    This section makes existing discretionary actions mandatory 
for significantly undercapitalized entities. The Director must 
take one or more supervisory actions to improve the management 
of the entity, including ordering a new election for the board 
of directors, dismissal of directors or executive officers, or 
requiring the entity to employ qualified management. 
Additionally, a significantly undercapitalized regulated entity 
cannot, without prior written approval by the Director, pay any 
bonus to any executive officer or provide compensation to any 
executive officer that exceeds that officer's average rate of 
compensation from the preceding calendar year.

Section 154. Authority over critically undercapitalized regulated 
        entities

    The Director may establish a conservatorship or 
receivership over a critically undercapitalized entity for the 
purpose of reorganizing, rehabilitating, or winding up the 
affairs of a regulated entity. The grounds for appointing a 
conservator or receiver include: assets are insufficient to 
cover obligations; there is a substantial dissipation of assets 
due to violations of law or unsafe or unsound practices; an 
unsafe or unsound condition to transact business; willful 
violations of cease-and-desist orders; concealment of books, 
papers, records or assets; the inability to meet obligations; 
losses that will deplete all of the entity's capital; any 
violation of law likely to cause insolvency or substantial 
dissipation of assets or earnings; consent by resolution of a 
regulated entity's board of directors; undercapitalization with 
no reasonable prospect of becoming adequately capitalized or 
failure to submit or implement a capital restoration plan; 
critical undercapitalization; or a determination that an entity 
is guilty of money laundering.
    The Director must appoint the Agency as receiver for a 
regulated entity if the Director determines in writing that the 
assets of the regulated entity are and have been for the past 
month less than its obligations, or that the regulated entity 
is not and has not been for the past month generally paying its 
debts as those debts become due. Receivership and 
conservatorship appointments may be challenged in federal 
court.
    The Agency, as conservator or receiver, may issue 
regulations as appropriate for the conduct of the 
conservatorship or receivership. The Agency succeeds to all the 
rights, titles, powers, and privileges of the regulated entity 
and of any stockholder, officer, or director of such regulated 
entity, and title to the books, records, and assets of any 
other legal custodian of such regulated entity. The Agency 
shall take over all assets and obligations of the regulated 
entity, perform all functions of the regulated entity, and 
preserve and conserve the assets and property of the regulated 
entity.
    The Agency, as conservator, may take such action as may be 
necessary to put the regulated entity into a sound and solvent 
condition, and to carry out the business of the entity. As 
receiver, the Agency may place a regulated entity into 
liquidation having due regard for the housing finance market 
and may organize a successor entity.
    The Agency, as conservator or receiver, may transfer any 
asset or liability of the regulated entity in default without 
any approval, assignment or consent. Any Federal Home Loan Bank 
may acquire the assets of any Bank in conservatorship or 
receivership with the approval of the Agency. The Agency, as 
conservator or receiver, shall pay all valid obligations of the 
regulated entity, to the extent proceeds of operations or sales 
are available. The Agency shall have the authority to issue 
subpoenas for the purposes of carrying out its authorities, and 
may contract for services relating to the carrying out of its 
functions, actions, activities, or duties. The Agency also is 
granted any incidental authorities it may need to carry out its 
powers as conservator or receiver.
    The Agency, as receiver, must promptly publish and mail 
notice to the creditors of the regulated entities to present 
their claims to the receiver. The receiver may allow or 
disallow claims by creditors according to the provisions set 
forth in this section. The right of a conservator or receiver 
shall be subject to the limitations on the powers of a receiver 
under section 402 through 407 of the Federal Deposit Insurance 
Corporation Improvement Act of 1991 concerning financial system 
risk.
    Mortgages, or interests in pools of mortgages, held in 
trust, custodial, or agency capacity by a regulated entity 
shall not be available to satisfy the claims of creditors 
generally. Such mortgages or interest in a pool of mortgages 
shall be held by the conservator or receiver for the beneficial 
owners of such mortgages in accordance with the terms of the 
agreement creating such trust, custodial, or agency agreement. 
This provision is intended to protect the interests of holders 
of mortgage-backed securities by ensuring that the assets 
backing such securities do not become entangled in the 
insolvency estate of a regulated entity.
    The Agency as conservator or receiver may disaffirm or 
repudiate any contract or lease to which the regulated entity 
is a party the performance of which the conservator or receiver 
determines to be burdensome and the repudiation of which will 
promote the orderly administration of the affairs of the 
regulated entity. Specific provisions are established for the 
treatment of qualified financial contracts, which include 
securities or commodity contracts, forward contracts, 
repurchase agreements, swap agreements and master agreements. 
No provisions of this subsection applies to extensions of 
credit from any Federal Home Loan Bank or Federal Reserve Bank 
to any regulated entity, or to any securities interest in the 
assets of the regulated entity securing such extension of 
credit.
    The Agency may organize a limited-life regulated entity 
(LLRE) if a regulated entity is in default or it is in danger 
of default. The Director shall grant a temporary charter to the 
LLRE and the LLRE shall assume the liabilities of the regulated 
entity, purchase the assets of the regulated entity, and 
perform any other temporary functions which the Agency may 
prescribe. The Agency will not have the authority to revoke the 
charter of a regulated entity.

Section 155. Conforming amendments

    This section makes changes that are necessary to conform 
existing law to the new provisions included in H.R. 1427.

                    Subtitle D--Enforcement Actions


Section 161. Cease-and-desist proceedings

    If a regulated entity or regulated entity affiliated party 
is engaged in, has engaged in, or is about to engage in, an 
unsafe or unsound practice or is violating, has violated, or is 
about to violate a law, rule, regulation or condition imposed 
in writing by the Director in connection with an application or 
request, the Director may issue and serve a notice of charges 
on the regulated entity or regulated entity-affiliated party 
with respect to these actions. The Director may deem an entity 
to be engaged in unsafe and unsound practices if the entity 
receives a less than satisfactory rating for asset quality, 
management, earnings, or liquidity in its most recent report of 
examination.

Section 162. Temporary cease-and-desist proceedings

    Whenever the Director determines that the violation or 
threatened violation or unsafe or unsound practice specified in 
the notice of charges is likely to cause insolvency or a 
significant dissipation of assets or earnings or is likely to 
weaken the condition of the regulated entity prior to 
completion of the proceedings for issuance of a permanent 
cease-and-desist order, the Director may issue a temporary 
cease-and-desist order requiring the regulated entity to 
discontinue such violation or practice and to take affirmative 
action to prevent or remedy such condition. The Agency may 
enforce these orders through its independent litigation 
authority.

Section 163. Prejudgment attachment

    In any action brought pursuant to this title, or to enforce 
an order for money damages, restitution, or civil money 
penalties, the Director or the Attorney General may seek 
prohibitions against the withdrawal, transfer, removal, 
dissipation of any funds, assets, or other property.

Section 164. Enforcement and jurisdiction

    The Director is granted independent litigation authority to 
enforce notices and orders issued under the capital and 
enforcement provisions of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992. This is in addition 
to the general authority granted under section 102 to enforce 
the government-sponsored enterprise provisions of the Housing 
and Community Development Act of 1992, as amended, any 
regulation or order thereunder, 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.

Section 165. Civil money penalties

    This section establishes three tiers of civil monetary 
penalties that can be imposed on regulated entities or 
regulated entity-affiliated parties for violations of this 
title, the authorizing statutes, or any order, condition, rule, 
regulation, or the engaging in unsafe or unsound practices.
    Under the first tier, violations of this title, the 
authorizing statutes, or any order, condition, rule, 
regulation, or the engaging in unsafe or unsound practices 
shall result in civil money penalties of not more than $10,000 
for each day the violation continues.
    Under the second tier, if a regulated entity or regulated 
entity-affiliated party commits any violation described above, 
recklessly engages in an unsafe or unsound practice, or 
breaches any fiduciary duty and these actions are part of a 
pattern of misconduct, will result more than a minimal loss, or 
result in pecuniary gain or benefit, the party shall forfeit 
and pay a civil penalty of not more than $50,000 for each day 
the violation continues.
    Under the third tier, if a regulated entity or regulated 
entity-affiliated party knowingly commits any violation 
described above, engages in unsafe or unsound practices, or 
breaches any fiduciary duty, and knowingly or recklessly causes 
a substantial loss to the regulated entity or a substantial 
pecuniary gain or benefit to such party, the party shall 
forfeit and pay a civil penalty not to exceed the maximum 
amount permitted for each day the violation continues. The 
maximum daily amount for any civil money penalty that can be 
assessed is not to exceed $2 million for any individual and for 
any regulated entity.

Section 166. Removal and prohibition authority

    If the Director determines that a regulated entity-
affiliated party, directly or indirectly, violated any law, 
regulation, final cease-and-desist order, written condition or 
written agreement or engaged in any unsafe or unsound practice, 
or breach of fiduciary duty and, by reason of the violation, 
practice or breach, the regulated entity has suffered or will 
probably suffer financial loss or other damage, or the 
enterprise-affiliated party received a financial gain or other 
benefit, and the violation involves personal dishonesty or 
willful or continuing disregard for the safety and soundness of 
the entity. Under those circumstances, the Director may by 
written order and after notice and opportunity for hearing, 
suspend any regulated entity-affiliated party from office, 
prohibit such party from further participation in the affairs 
of the regulated entity, or prohibit the payment of 
compensation to the party if the Director determines that such 
action is necessary for protection of the regulated entity and 
serves such party with written notice of the suspension or 
prohibition.
    Additionally, the Director may suspend or remove any 
regulated entity-affiliated party who is indicted or convicted 
of a felony involving dishonesty or breach of trust where 
continued service poses a threat to the regulated entity or 
impairs public confidence therein.
    A party that is suspended and/or prohibited from 
participation in the affairs of a regulated entity under this 
section may apply to the courts for a stay of such suspension.

Section 167. Criminal penalty

    This section provides that a person, who is subject to a 
removal or prohibition order and who knowingly participated 
directly or indirectly in the conduct of the affairs of any 
regulated entity, shall be fined not more than $1,000,000, 
imprisoned for not more than 5 years, or both.

Section 168. Subpoena authority

    The Agency is granted the power to issue and enforce 
subpoenas.

Section 169. Conforming amendments

    This section includes various conforming amendments.

                     Subtitle E--General Provisions


Section 181. Boards of enterprises

    The boards of Fannie Mae and Freddie Mac shall consist of 
13 persons elected by the shareholders, or such other number 
that the Director determines.

Section 182. Report on portfolio operations, safety and soundness, and 
        mission of enterprises

    Within a year, the Agency must submit a report to Congress 
on: the portfolio holdings of Fannie Mae and Freddie Mac; a 
description of 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 obligations of the 
enterprises; analyses of portfolio holdings for safety and 
soundness, mission fulfillment, and potential systemic risk 
implications for the enterprises, the housing and capital 
markets and the financial system of portfolio holdings 
(including whether such holdings should be limited or reduced 
over time).

Section 183. Conforming and technical amendments

    Makes changes necessary to conform existing law with new 
provisions included in H.R. 1427, such as setting the pay scale 
for the Director and Deputy Directors, striking sections made 
unnecessary by other parts of the bill, and establishing an 
Office of the Inspector General.

Section 184. Study of alternative secondary market systems

    The Agency, in consultation with the Federal Reserve Board, 
the Department of the Treasury, and the Department of Housing 
and Urban Development, shall conduct a study of the effects on 
financial and housing finance markets of alternatives to the 
current secondary market system for housing finance. Issues 
specified in this section must be addressed in the study. The 
Agency will submit a report to Congress on the study within 24 
months of the effective date.

                   TITLE II--FEDERAL HOME LOAN BANKS


Section 201. Definitions

    New definitions are provided.

Section 202. Directors

    The management of each Federal Home Loan Bank is vested in 
a board of 13 directors, or such other number as the Director 
determines appropriate, with terms of four years. All directors 
of a Bank who are not independent directors shall be elected by 
the members. Officers or directors of members of a Federal Home 
Loan Bank located in the district in which the Bank is located 
will have a majority of the board seats. This provision 
preserves the requirement in current law for the Agency to 
maintain the total number of elected directors representing 
members in any state at a number at least equal to the total 
number of elected directors representing that state as of 
December 31, 1960. This provision would not apply to 
directorships in any Federal Home Loan Bank resulting from the 
merger of one or more Banks. At least two-fifths of the 
directors will be independent members appointed by the Agency 
from a list recommended by the Federal Housing Enterprise 
Board, with at least 2 being public interest directors. In 
appointing independent members, the Agency may consult with 
each Federal Home Loan Bank about the knowledge, skills, and 
expertise needed on the Bank's board, and must take into 
consideration the demographic makeup of the community most 
served by the Affordable Housing Program of the Bank. Each Bank 
may pay directors for reasonable compensation and expenses, 
subject to the approval of the Director, which shall be 
reported to Congress in the Agency's annual report.

Section 203. Federal Housing Finance Agency oversight of Federal Home 
        Loan Banks

    The Federal Housing Finance Board is abolished and replaced 
by the Federal Housing Finance Agency.
    The Director may enforce Federal Home Loan Bank compliance 
with the Affordable Housing Program and Community Investment 
Program requirements in the same manner and to the same extent 
as the Director may monitor and enforce the housing goals for 
the enterprises.

Section 204. Joint activities of Banks

    Subject to 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 the 
Office of Finance to perform those functions or services. This 
section is not intended to broaden the activities of the Banks, 
but to provide the Banks a means through which they can more 
efficiently conduct some of their business operations.

Section 205. Sharing of information between federal home loan banks

    Not later than six months after the effective date, the 
Director shall prescribe rules 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 within the Bank System.

Section 206. Reorganization of banks and voluntary merger

    Any two or more Federal Home Loan Banks may merge upon 
approval of their boards and of the Director of the Agency. The 
Director shall promulgate regulations establishing the 
conditions and procedures for the consideration and approval of 
any voluntary merger.

Section 207. Securities and Exchange Commission disclosure

    This section exempts the Federal Home Loan Banks from 
compliance with some disclosure, reporting and other 
requirements under the Securities Exchange Act of 1934 (the 
``'34 Act''), the Securities Act of 1933 (the ``'33 Act''), and 
the Investment Company Act of 1940. In particular, shares of 
Federal Home Loan Bank stock are deemed exempted securities 
under the '33 and '34 Acts; Federal Home Loan Bank obligations 
are deemed ``exempted securities'' under the '33 and '34 Acts, 
``government securities'' under the '34 Act and the Investment 
Company Act of 1940, and are excluded from the definition of 
``government securities broker'' and ``government securities 
dealer'' under the '34 Act and the Investment Company Act of 
1940.
    In issuing any final regulations to implement these 
provisions, the Securities and Exchange Commission must 
consider the ``distinctive characteristics'' of the Federal 
Home Loan Banks when evaluating the accounting treatment of 
REFCORP, the role of the Federal Home Loan Banks' combined 
financial statements, the accounting classification of 
redeemable capital stock, and the accounting treatment related 
to the joint and several liability for the Federal Home Loan 
Banks' consolidated obligations.

Section 208. Community financial institution members

    The threshold amount of total assets necessary for a 
Federal Home Loan Bank member to qualify as a community 
financial institution, and thus to become eligible to obtain 
long-term advances for small business, small farm, and small 
agribusiness funding purposes, and to use such loans as 
collateral for advances, is raised from $500 million to $1 
billion. Community financial institutions may also use advances 
for community development lending and such loans as collateral 
for advances.

Section 209. Technical and conforming amendments

    Makes changes necessary to conform existing law with new 
provisions included in H.R. 1427, such as eliminating 
references to the ``Office of Federal Housing Enterprise 
Oversight'' and the ``Federal Housing Finance Board'' and 
replacing them with the ``Director of the Federal Housing 
Finance Agency.'' Amends the Sarbanes-Oxley Act of 2002 by 
adding the Agency to the list of those federal agencies with 
which the Public Company Accounting Oversight Board may share 
information without loss of confidentiality.

Section 210. Study of affordable housing program use for long term care 
        facilities

    GAO is required to study the use of the Federal Home Loan 
Banks' Affordable Housing Program to fund long-term care 
facilities for low- and moderate-income individuals and its 
applicability to the affordable housing funds of the 
enterprises. Not later than one year from the date of 
enactment, GAO will submit a report to the Director and to 
Congress regarding the results of the study.

Section 211. Effective date

    Except as specifically provided, this title will be 
effective 6 months from the date of enactment.

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


Section 301. Abolishment of OFHEO

    The Office of Federal Housing Enterprise Oversight (OFHEO) 
and the positions of the Director and Deputy Director of OFHEO 
are abolished six months after the date of enactment. During 
that six-month period, the Director of OFHEO will, for the 
purpose of winding up the affairs of OFHEO, manage the Office. 
OFHEO also will fulfill all its current duties under law during 
this time period. The bill contains various provisions for an 
orderly transfer of functions.

Section 302. Continuation and coordination of certain regulations

    All regulations, determinations and resolutions that were 
issued by OFHEO and in effect on the date of abolishment will 
continue to be in effect and enforceable by or against the 
Director of the Agency until modified, terminated, set aside or 
superseded by the Agency, any court of competent jurisdiction, 
or operation of law.

Section 303. Transfer and rights of employees of OFHEO

    OFHEO employees are transferred to the Agency, will be 
guaranteed a position with the Agency and will retain their 
benefits for one year following the transfer. The Director has 
the right to decline a transfer of employees occupying 
positions in the excepted service or the Senior Executive 
Service or pursuant to any appointment authority established 
pursuant to law or Office of Personnel Management (OPM) 
regulations, to the extent that such authority relates to 
positions excepted on the basis of their confidential, policy-
making, policy-determining or policy-advocating 
responsibilities, and noncareer positions in the Senior 
Executive Service. If the Director determines, at the end of 
the 1-year period that a reorganization of the combined 
workforce is required, that reorganization shall be deemed a 
major reorganization for purposes of affording affected 
employees' retirement.

Section 304. Transfer of property and facilities

    The property of OFHEO will become the property of the 
Agency.

               Subtitle B--Federal Housing Finance Board


Section 321. Termination of the Federal Housing Finance Board

    The Federal Housing Finance Board is abolished six months 
after enactment. During that six-month period, the Finance 
Board, will for the purposes of winding up the affairs of the 
Finance Board, manage the Finance Board. The Finance Board also 
will fulfill all its current duties under law during this time 
period. The bill makes various provisions for an orderly 
transfer of functions.

Section 322. Continuation and coordination of certain regulations

    All regulations, determinations and resolutions that were 
issued by the Finance Board and in effect on the date of 
abolishment will continue to be in effect and enforceable by or 
against the Director of the Agency until modified, terminated, 
set aside or superseded by the Agency, any court of competent 
jurisdiction, or operation of law.

Section 323. Transfer and rights of employees of the Federal Housing 
        Finance Board

    Finance Board employees are transferred to the Agency, will 
be guaranteed a position with the Agency and will retain their 
benefits for one year following the transfer. The Director has 
the right to decline a transfer of employees occupying 
positions in the excepted service or the Senior Executive 
Service or pursuant to any appointment authority established 
pursuant to law or OPM regulations, to the extent that such 
authority relates to positions excepted on the basis of their 
confidential, policy-making, policy-determining or policy-
advocating responsibilities, and noncareer positions in the 
Senior Executive Service. If the Director determines, at the 
end of the 1-year period that a reorganization of the combined 
workforce is required, that reorganization shall be deemed a 
major reorganization for purposes of affording affected 
employees' retirement.

Section 324. Transfer of property and facilities

    The property of Finance Board will become the property of 
the Agency.

        Subtitle C--Department of Housing: and Urban Development


Section 341. Termination of enterprise-related functions

    The Secretary of HUD, in consultation with the Director of 
OFHEO, will determine, within three months of enactment, the 
HUD functions, duties and activities regarding oversight or 
regulation of the enterprises, and employees of HUD necessary 
to perform such functions, duties and activities. During the 
six-month period beginning on the date of enactment, HUD will, 
for the purpose of winding up the affairs of HUD regarding 
enterprise-related functions, manage the enterprise-related 
employees and functions of HUD. HUD also will fulfill all its 
current duties under law during this time period. The bill 
makes various provisions for an orderly transfer of functions.

Section 342. Continuation and coordination of certain regulations

    All regulations, orders and determinations that were issued 
by HUD and in effect on the date of termination abolishment 
will continue to be in effect and enforceable by or against the 
Director of the Agency until modified, terminated, set aside or 
superseded by the Agency, any court of competent jurisdiction, 
or operation of law.

Section 343. Transfer and rights of employees of Department of Housing 
        and Urban Development

    Enterprise-related employees of HUD will be transferred to 
the Agency, will be guaranteed a position with the Agency and 
will retain their benefits for one year following the transfer. 
Enterprise-related employees of HUD may decline transfer to a 
position at the Agency, and in such case shall be guaranteed a 
position at HUD and 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. The Director has the right to decline a transfer of 
employees occupying positions in the excepted service or the 
Senior Executive Service or pursuant to any appointment 
authority established pursuant to law or OPM regulations, to 
the extent that such authority relates to positions excepted on 
the basis of their confidential, policy-making, policy-
determining or policy-advocating responsibilities, and 
noncareer positions in the Senior Executive Service. If the 
Director determines, at the end of the 1-year period that a 
reorganization of the combined workforce is required, that 
reorganization shall be deemed a major reorganization for 
purposes of affording affected employees' retirement.

Section 344. Transfer of appropriations, property, and facilities

    The property and unexpended appropriations of HUD related 
to enterprise oversight will transfer to the Agency.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

    TITLE XIII OF THE HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1992


TITLE XIII--GOVERNMENT SPONSORED ENTERPRISES

           *       *       *       *       *       *       *


SEC. 1303. DEFINITIONS.

  For purposes of this title:
          (1) Affiliate.--Except as provided by the Director, 
        the term ``affiliate'' means any entity that controls, 
        is controlled by, or is under common control with, an 
        enterprise.
          (2) Agency.--The term ``Agency'' means the Federal 
        Housing Finance Agency.
          (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.
          [(2)] (5) Capital distribution.--
                  (A) In general.--The term ``capital 
                distribution'' means--
                          (i) any dividend or other 
                        distribution in cash or in kind made 
                        with respect to any shares of, or other 
                        ownership interest in, an enterprise, 
                        except a dividend consisting only of 
                        shares of [the enterprise] the 
                        regulated entity;
                          (ii) any payment made by an 
                        enterprise to repurchase, redeem, 
                        retire, or otherwise acquire any of its 
                        shares, including any extension of 
                        credit made to finance an acquisition 
                        by [the enterprise] the regulated 
                        entity of such shares; and
                          (iii) any transaction that the 
                        Director determines by regulation to 
                        be, in substance, the distribution of 
                        capital.
                  (B) Exception.--Any payment made by an 
                enterprise to repurchase its shares for the 
                purpose of fulfilling an obligation of [the 
                enterprise] the regulated entity under an 
                employee stock ownership plan that is qualified 
                under section 401 of the Internal Revenue Code 
                of 1986 or any substantially equivalent plan, 
                as determined by the Director, shall not be 
                considered a capital distribution.
          [(3)] (6) Compensation.--The term ``compensation'' 
        means any payment of money or the provision of any 
        other thing of current or potential value in connection 
        with employment.
          (7) 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.
          [(4)] (8) Core capital.--The term ``core capital'' 
        means, with respect to an enterprise, the sum of the 
        following (as determined in accordance with generally 
        accepted accounting principles):
                  (A) * * *

           *       *       *       *       *       *       *

          [(5)] (9) Director.--The term ``Director'' means the 
        Director of the [Office of Federal Housing Enterprise 
        Oversight of the Department of Housing and Urban 
        Development] Federal Housing Finance Agency.
          [(6)] (10) Enterprise.--The term ``enterprise'' 
        means--
                  (A) the Federal National Mortgage Association 
                and any affiliate thereof; and
                  (B) the Federal Home Loan Mortgage 
                Corporation and any affiliate thereof.
          [(7)] (11) Executive officer.--The term ``executive 
        officer'' means, with respect to [an enterprise] a 
        regulated entity, the chairman of the board of 
        directors, chief executive officer, chief financial 
        officer, president, vice chairman, any executive vice 
        president, and any senior vice president in charge of a 
        principal business unit, division, or function.
          (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.
          (13) Federal home loan bank.--The term ``Federal home 
        loan bank'' means a bank established under the 
        authority of the Federal Home Loan Bank Act.
          [(8)] (14) Low-income.--The term ``low-income'' 
        means--
                  (A) in the case of owner-occupied units, 
                income not in excess of 80 percent of area 
                median income; and
                  (B) in the case of rental units, income not 
                in excess of 80 percent of area median income, 
                with adjustments for smaller and larger 
                families, as determined by the [Secretary] 
                Director.
          (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.
          [(9)] (16) Median income.--The term ``median income'' 
        means, with respect to an area, the unadjusted median 
        family income for the area, as determined and published 
        annually by the [Secretary] Director.
          [(10)] (17) Moderate-income.--The term ``moderate-
        income'' means--
                  (A) in the case of owner-occupied units, 
                income not in excess of area median income; and
                  (B) in the case of rental units, income not 
                in excess of area median income, with 
                adjustments for smaller and larger families, as 
                determined by the [Secretary] Director.
          [(11)] (18) Mortgage purchases.--The term ``mortgage 
        purchases'' includes mortgages purchased for portfolio 
        or securitization.
          [(12)] (19) Multifamily housing.--The term 
        ``multifamily housing'' means a residence consisting of 
        more than 4 dwelling units.
          [(13) New program.--The term ``new program'' means 
        any program for the purchasing, servicing, selling, 
        lending on the security of, or otherwise dealing in, 
        conventional mortgages that--
                  [(A) is significantly different from programs 
                that have been approved under this Act or that 
                were approved or engaged in by an enterprise 
                before the date of the enactment of this Act; 
                or
                  [(B) represents an expansion, in terms of the 
                dollar volume or number of mortgages or 
                securities involved, of programs above limits 
                expressly contained in any prior approval.
          [(14) Office.--The term ``Office'' means the Office 
        of Federal Housing Enterprise Oversight of the 
        Department of Housing and Urban Development.
          [(15) Secretary.--The term ``Secretary'' means the 
        Secretary of Housing and Urban Development.]
          (20) Regulated entity.--The term ``regulated entity'' 
        means--
                  (A) the Federal National Mortgage Association 
                and any affiliate thereof;
                  (B) the Federal Home Loan Mortgage 
                Corporation and any affiliate thereof; and
                  (C) each Federal home loan bank.
          (21) 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.
          (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.
          [(16)] (23) Single family housing.--The term ``single 
        family housing'' means a residence consisting of 1 to 4 
        dwelling units.
          [(17)] (24) State.--The term ``State'' means the 
        States of the United States, the District of Columbia, 
        the Commonwealth of Puerto Rico, the Commonwealth of 
        the Northern Mariana Islands, Guam, the Virgin Islands, 
        American Samoa, the Trust Territory of the Pacific 
        Islands, and any other territory or possession of the 
        United States.
          [(18)] (25) Total capital.--The term ``total 
        capital'' means, with respect to an enterprise, the sum 
        of the following:
                  (A) * * *

           *       *       *       *       *       *       *

          [(19)] (26) Very low-income.--The term ``very low-
        income'' means--
                  (A) in the case of owner-occupied units, 
                income not in excess of [60] 50 percent of area 
                median income; and
                  (B) in the case of rental units, income not 
                in excess of [60] 50 percent of area median 
                income, with adjustments for smaller and larger 
                families, as determined by the [Secretary] 
                Director.

           *       *       *       *       *       *       *


         Subtitle A--Supervision and Regulation of Enterprises

            PART 1--FINANCIAL SAFETY AND SOUNDNESS REGULATOR

[SEC. 1311. ESTABLISHMENT OF OFFICE OF FEDERAL HOUSING ENTERPRISE 
                    OVERSIGHT.

  [There is hereby established an office within the Department 
of Housing and Urban Development, which shall be known as the 
Office of Federal Housing Enterprise Oversight.

[SEC. 1312. DIRECTOR.

  [(a) Appointment.--The Office shall be under the management 
of a Director, who 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 mortgage 
security markets and housing finance. An individual may not be 
appointed as Director if the individual has served as an 
executive officer or director of an enterprise at any time 
during the 3-year period ending upon the nomination of such 
individual for appointment as Director.
  [(b) Term.--The Director shall be appointed for a term of 5 
years.
  [(c) Vacancy.--A vacancy in the position of Director shall be 
filled in the manner in which the original appointment was made 
under subsection (a).
  [(d) Service After End of Term.--A Director may serve after 
the expiration of the term for which the Director was appointed 
until a successor Director has been appointed.
  [(e) Deputy Director.--
          [(1) In general.--The Office shall have a Deputy 
        Director 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 have a demonstrated 
        understanding of mortgage security markets and housing 
        finance. An individual may not be appointed as Deputy 
        Director if the individual has served as an executive 
        officer or director of an enterprise at any time during 
        the 3-year period ending upon the appointment of such 
        individual as Deputy Director.
          [(2) Functions.--The Deputy Director shall have such 
        functions, powers, and duties as the Director shall 
        prescribe. In the event of the death, resignation, 
        sickness, or absence of the Director, the Deputy 
        Director shall serve as acting Director until the 
        return of the Director or the appointment of a 
        successor pursuant to subsection (c).

[SEC. 1313. DUTY AND AUTHORITY OF DIRECTOR.

  [(a) Duty.--The duty of the Director shall be to ensure that 
the enterprises are adequately capitalized and operating 
safely, in accordance with this title.
  [(b) Authority Exclusive of Secretary.--The Director is 
authorized, without the review or approval of the Secretary, to 
make such determinations, take such actions, and perform such 
functions as the Director determines necessary regarding--
          [(1) the issuance of regulations to carry out this 
        part, subtitle B, and subtitle C (including the 
        establishment of capital standards pursuant to subtitle 
        B);
          [(2) examinations of the enterprises under section 
        1317;
          [(3) determining the capital levels of the 
        enterprises and classification of the enterprises 
        within capital classifications established under 
        subtitle B;
          [(4) decisions to appoint conservators for the 
        enterprises;
          [(5) administrative and enforcement actions under 
        subtitle B, actions taken under subtitle C with respect 
        to enforcement of subtitle B, and other matters 
        relating to safety and soundness;
          [(6) approval of payments of capital distributions by 
        the enterprises under section 303(c)(2) of the Federal 
        National Mortgage Association Charter Act and section 
        303(b)(2) of the Federal Home Loan Mortgage Corporation 
        Act;
          [(7) requiring the enterprises to submit reports 
        under section 1314 of this title, section 309(k) of the 
        Federal National Mortgage Association Charter Act, and 
        section 307(c) of the Federal Home Loan Mortgage 
        Corporation Act;
          [(8) prohibiting the payment of excessive 
        compensation by the enterprises to any executive 
        officer of the enterprises under section 1318;
          [(9) the management of the Office, including the 
        establishment and implementation of annual budgets, the 
        hiring of, and compensation levels for, personnel of 
        the Office, and annual assessments for the costs of the 
        Office;
          [(10) conducting research and financial analysis; and
          [(11) the submission of reports required by the 
        Director under this title.
  [(c) Authority Subject to Approval of Secretary.--Any 
determinations, actions, and functions of the Director not 
referred to in subsection (b) shall be subject to the review 
and approval of the Secretary.
  [(d) Delegation of Authority.--The Director may delegate to 
officers and employees of the Office any of the functions, 
powers, and duties of the Director, as the Director considers 
appropriate.
  [(e) Independence in Providing Information to Congress.--The 
Director shall not be required to obtain the prior approval, 
comment, or review of any officer or agency of the United 
States before submitting to the Congress, or any committee or 
subcommittee thereof, any reports, recommendations, testimony, 
or comments if such submissions include a statement indicating 
that the views expressed therein are those of the Director and 
do not necessarily represent the views of the Secretary or the 
President.]

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.

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, 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.

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 5 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;
          (3) one member shall be the Director, who shall serve 
        as the Chairperson of the Board; and
          (4) two members, who shall be appointed by the 
        President, by and with the advise and consent of the 
        Senate, who are experts or experienced in the field of 
        financial services, housing finance, affordable 
        housing, or mortgage lending.
The members pursuant to paragraph (4) shall be appointed for a 
term of four years. The Board may not, at any time, have more 
than three members of the same political party.
  (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.

SEC. 1314. AUTHORITY TO REQUIRE REPORTS BY [ENTERPRISES] REGULATED 
                    ENTITIES.

  (a) [Special Reports and Reports of Financial Condition] 
Regular and Special Reports.--
          (1) [Financial condition] Regular reports.--The 
        Director may require [an enterprise] a regulated entity 
        to submit [reports of financial condition and 
        operations] regular reports on the condition (including 
        financial condition), management, activities, or 
        operations of the regulated entity, as the Director 
        considers appropriate (in addition to the annual and 
        quarterly reports required under section 309(k) of the 
        Federal National Mortgage Association Charter Act and 
        section 307(c) of the Federal Home Loan Mortgage 
        Corporation Act).
          (2) Special reports.--The Director may also require 
        [an enterprise] a regulated entity to submit special 
        reports on any of the topics specified in paragraph (1) 
        or such other topics whenever, in the judgment of the 
        Director, such reports are necessary to carry out the 
        purposes of this title.
          (3) Limitation.--The Director may not require the 
        inclusion, in any report pursuant to paragraph (1) or 
        (2), of any information that is not reasonably 
        obtainable by [the enterprise] the regulated entity.
          (4) Notice and declaration.--The Director shall 
        notify [the enterprise] the regulated entity, a 
        reasonable period in advance of the date for submission 
        of any report under this subsection, of any specific 
        information to be contained in the report and the date 
        for the submission of the report. Each report under 
        this subsection shall contain a declaration by the 
        president, vice president, treasurer, or any other 
        officer designated by the board of directors of [the 
        enterprise] the regulated entity to make such 
        declaration, that the report is true and correct to the 
        best of such officer's knowledge and belief.
  (b) Capital Distributions.--The Director may require [an 
enterprise] a regulated entity to submit a report to the 
Director after the declaration of any capital distribution by 
[the enterprise] the regulated entity and before making the 
capital distribution. The report shall be made in such form and 
under such circumstances and shall contain such information as 
the Director shall require.
  (c) 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.
  (d) Disclosure of Charitable Contributions by Enterprises.--
          (1) Required disclosure.--The Director shall, by 
        regulation, require each regulated entity 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 regulated entity to 
                nonprofit organizations during its previous 
                fiscal year.
                  (B) Substantial contributions.--If the value 
                of contributions made by the regulated entity 
                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 regulated entity 
                during the enterprise's previous fiscal year to 
                any nonprofit organization of which a director, 
                officer, or controlling person of the regulated 
                entity, 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. 1315. PERSONNEL.

  (a) [Office Personnel.--The] In General.--Subject to title 
III of the Federal Housing Finance Reform Act of 2007, the 
Director may appoint and fix the compensation of such officers 
and employees of the [Office] Agency as the Director considers 
necessary to carry out the functions of the Director and the 
[Office] Agency. Officers and employees may be paid without 
regard to the provisions of chapter 51 and subchapter III of 
chapter 53 of title 5, United States Code, relating to 
classification and General Schedule pay rates.

           *       *       *       *       *       *       *

  (c) Personnel of Other Federal Agencies.--In carrying out the 
duties of the [Office] Agency, the Director may use 
information, services, staff, and facilities of any executive 
agency, independent agency, or department on a reimbursable 
basis, with the consent of such agency or department.
  [(d) Reimbursement of HUD.--The Director shall reimburse the 
Department of Housing and Urban Development for reasonable 
costs incurred by the Department that are directly related to 
the operations of the Office.]
  [(e)] (d) Outside Experts and Consultants.--Notwithstanding 
any provision of law limiting pay or compensation, the Director 
may appoint and compensate such outside experts and consultants 
as the Director determines necessary to assist the work of the 
[Office] Agency.
  [(f) Equal Opportunity Report.--Not later than the expiration 
of the 180-day period beginning upon the appointment of the 
Director under section 1312, the Director shall submit to the 
Committee on Banking, Finance and Urban Affairs of the House of 
Representatives and the Committee on Banking, Housing, and 
Urban Affairs of the Senate a report containing--
          [(1) a complete description of the equal opportunity, 
        affirmative action, and minority business enterprise 
        utilization programs of the Office; and
          [(2) such recommendations for administrative and 
        legislative action as the Director determines 
        appropriate to carry out such programs.]

SEC. 1316. FUNDING.

  [(a) Annual Assessments.--The Director may, to the extent 
provided in appropriation Acts, 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 the expenses of any examinations under 
section 1317. The initial annual assessment shall include any 
startup costs of the Office and any anticipated costs and 
expenses of the Office for the following fiscal year.]
  (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.
  (b) Allocation of Annual Assessment to [Enterprises] 
Regulated Entities.--
          (1) Amount of payment.--[Each enterprise] Each 
        regulated entity shall pay to the Director a proportion 
        of the annual assessment made pursuant to subsection 
        (a) that bears the same ratio to the total annual 
        assessment that the total assets of [each enterprise] 
        each regulated entity bears to the total assets of 
        [both enterprises] all of the regulated entities.
          (2) Timing of payment.--The annual assessment shall 
        be payable semiannually for each fiscal year, on 
        October 1 and April 1.
          [(3) Definition.--For the purpose of this section, 
        the term ``total assets'' means, with respect to an 
        enterprise, the sum of--]
          (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--
                          [(A)] (i) on-balance-sheet assets of 
                        the enterprise, as determined in 
                        accordance with generally accepted 
                        accounting principles;
                          [(B)] (ii) the unpaid principal 
                        balance of outstanding mortgage-backed 
                        securities issued or guaranteed by the 
                        enterprise that are not included in 
                        [subparagraph (A)] clause (i); and
                          [(C)] (iii) other off-balance-sheet 
                        obligations as determined by the 
                        Director.
                  (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.
  [(c) Deficiencies Due to Increased Costs of Regulation.--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.]
  (c) Increased Costs of Regulation.--
          (1) Increase for inadequate capitalization.--The 
        semiannual payments made pursuant to subsection (b) by 
        any regulated entity that is not classified (for 
        purposes of subtitle B) as adequately capitalized may 
        be increased, as necessary, in the discretion of the 
        Director to pay additional estimated costs of 
        regulation of the regulated entity.
          (2) Adjustment for enforcement activities.--The 
        Director may adjust the amounts of any semiannual 
        payments for an assessment under subsection (a) that 
        are to be paid pursuant to subsection (b) by a 
        regulated entity, as necessary in the discretion of the 
        Director, to ensure that the costs of enforcement 
        activities under this Act for a regulated entity are 
        borne only by such regulated entity.
          (3) Additional assessment for deficiencies.--If at 
        any time, as a result of increased costs of regulation 
        of a regulated entity that is not classified (for 
        purposes of subtitle B) as adequately capitalized or as 
        the result of supervisory or enforcement activities 
        under this Act for a regulated entity, the amount 
        available from any semiannual payment made by such 
        regulated entity pursuant to subsection (b) is 
        insufficient to cover the costs of the Agency with 
        respect to such entity, the Director may make and 
        collect from such regulated entity an immediate 
        assessment to cover the amount of such deficiency for 
        the semiannual period. If, at the end of any semiannual 
        period during which such an assessment is made, any 
        amount remains from such assessment, such remaining 
        amount shall be deducted from the assessment for such 
        regulated entity for the following semiannual period.
  (d) Surplus.--[If] Except with respect to amounts collected 
pursuant to subsection (a)(3), if any amount from any annual 
assessment collected from [an enterprise] a regulated entity 
remains unobligated at the end of the year for which the 
assessment was collected, such amount shall be credited to the 
assessment to be collected from the regulated entity for the 
following year.
  [(e) Initial Special Assessment.--Not later than the 
expiration of the 30-day period beginning on the date of the 
enactment of this Act, the enterprises shall each pay into the 
Federal Housing Enterprises Oversight Fund established under 
subsection (f) an initial assessment of $1,500,000 to cover the 
startup costs of the Office, including space and modifications 
thereof, capital equipment, supplies, recruitment, and 
activities of the Office during the period preceding the first 
annual assessment under subsection (a). Any amounts collected 
from an enterprise under this subsection shall be credited 
against the first annual assessment collected pursuant to 
subsection (a), and are hereby appropriated, and shall be 
available and used, without fiscal year limitation, as provided 
in this section.
  [(f) Fund.--There is established in the Treasury of the 
United States a fund to be known as the Federal Housing 
Enterprises Oversight Fund. Any assessments collected pursuant 
to this section shall be deposited in the Fund. Amounts in the 
Fund shall be available, to the extent provided in 
appropriation Acts and subsection (e), for--
          [(1) carrying out the responsibilities of the 
        Director relating to the enterprises; and
          [(2) necessary administrative and nonadministrative 
        expenses of the Office to carry out the purposes of 
        this title.
  [(g) Budget and Financial Reports.--
          [(1) Financial operating plans and forecasts.--Before 
        the beginning of each fiscal year, the Director shall 
        submit a copy of the financial operating plans and 
        forecasts for the Office to the Secretary and the 
        Director of the Office of Management and Budget.
          [(2) Reports of operations.--As soon as practicable 
        after the end of each fiscal year and each quarter 
        thereof, the Director shall submit a copy of the report 
        of the results of the operations of the Office during 
        such period to the Secretary and the Director of the 
        Office of Management and Budget.
          [(3) Inclusion in president's budget.--The annual 
        plans, forecasts, and reports required under this 
        subsection shall be included (A) in the Budget of the 
        United States in the appropriate form, and (B) in the 
        congressional justifications of the Department of 
        Housing and Urban Development for each fiscal year in a 
        form determined by the Secretary.]
  (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. 1317. EXAMINATIONS.

  (a) Annual Examination.--The Director shall annually conduct 
an on-site examination under this section of [each enterprise] 
each regulated entity to determine the condition of [the 
enterprise] the regulated entity for the purpose of ensuring 
its financial safety and soundness. 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.
  (b) Other Examinations.--In addition to annual examinations 
under subsection (a), the Director may conduct an examination 
under this section of a regulated entity whenever the Director 
determines that an examination is necessary [to determine the 
condition of an enterprise for the purpose of ensuring its 
financial safety and soundness] or appropriate.
  (c) Examiners.--The Director shall appoint examiners to 
conduct examinations under this section. The Director may 
contract with the Comptroller of the Currency, the Board of 
Governors of the Federal Reserve System, the Federal Deposit 
Insurance Corporation, or the Director of the Office of Thrift 
Supervision for the services of examiners to conduct 
examinations under this section. The Director shall reimburse 
such agencies for any costs of providing examiners [from 
amounts available in the Federal Housing Enterprises Oversight 
Fund].

           *       *       *       *       *       *       *

  (e) Technical Experts.--The Director may obtain the services 
of any technical experts the Director considers appropriate to 
provide temporary technical assistance relating to examinations 
to the Director, officers, and employees of the [Office] 
Agency. The Director shall describe, in the record of each 
examination, the nature and extent of any such temporary 
technical assistance.
  (f) Oaths, Evidence, and Subpoena Powers.--In connection with 
examinations under this section, the Director shall have the 
authority provided under section [1379B] 1379D.
  (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 authority of this 
        subsection shall not be considered to cause such 
        position to be converted from the competitive service 
        to the excepted service.

SEC. 1318. PROHIBITION [OF EXCESSIVE] AND WITHHOLDING OF EXECUTIVE 
                    COMPENSATION.

  (a) In General.--The Director shall prohibit [the 
enterprises] the regulated entities from providing compensation 
to any executive officer of [the enterprise] the regulated 
entity that is not reasonable and comparable with compensation 
for employment in other similar businesses (including other 
publicly held financial institutions or major financial 
services companies) involving similar duties and 
responsibilities.
  (b) Factors.--In making any determination under subsection 
(a), the Director may take into consideration any factors the 
Director considers relevant, including any wrongdoing on the 
part of the executive officer, and such wrongdoing shall 
include any fraudulent act or omission, breach of trust or 
fiduciary duty, violation of law, rule, regulation, order, or 
written agreement, and insider abuse with respect to the 
regulated entity. The approval of an agreement or contract 
pursuant to section 309(d)(3)(B) of the Federal National 
Mortgage Association Charter Act (12 U.S.C. 1723a(d)(3)(B)) or 
section 303(h)(2) of the Federal Home Loan Mortgage Corporation 
Act (12 U.S.C. 1452(h)(2)) shall not preclude the Director from 
making any subsequent determination under subsection (a).
  (c) Withholding of Compensation.--In carrying out subsection 
(a), the Director may require a regulated entity to withhold 
any payment, transfer, or disbursement of compensation to an 
executive officer, or to place such compensation in an escrow 
account, during the review of the reasonableness and 
comparability of compensation.
  [(b)] (d) Prohibition of Setting Compensation.--In carrying 
out subsection (a), the Director may not prescribe or set a 
specific level or range of compensation.

[SEC. 1319. AUTHORITY TO PROVIDE FOR REVIEW OF ENTERPRISES BY RATING 
                    ORGANIZATION.]

SEC. 1319. REVIEWS OF REGULATED ENTITIES.

  The Director may, on such terms and conditions as the 
Director deems appropriate, contract with any entity that [is a 
nationally recognized statistical rating organization, as such 
term is defined in section 3(a) of the Securities Exchange Act 
of 1934] 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, to conduct a review of [the 
enterprises] the regulated entities.

SEC. 1319A. [EQUAL OPPORTUNITY IN SOLICITATION OF CONTRACTS] MINORITY 
                    AND WOMEN INCLUSION; DIVERSITY REQUIREMENTS.

  (a) Office of Minority and Women Inclusion.--Each regulated 
entity shall establish an Office of Minority and Women 
Inclusion, or designate an office of the entity, that shall be 
responsible for carrying out this section and all matters of 
the entity relating to diversity in management, employment, and 
business activities in accordance with such standards and 
requirements as the Director shall establish.
  (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.
  [(a) In General.--Each enterprise] (e) Outreach.--Each 
regulated entity shall establish a minority outreach program to 
ensure the inclusion (to the maximum extent possible) in 
contracts entered into by the enterprises of minorities and 
women and businesses owned by minorities and women, including 
financial institutions, investment banking firms, underwriters, 
accountants, brokers, and providers of legal services.
  [(b) Report.--Not later than the expiration of the 180-day 
period beginning on the date of the enactment of this Act, each 
enterprise shall submit to the Committee on Banking, Finance 
and Urban Affairs of the House of Representatives and the 
Committee on Banking, Housing, and Urban Affairs of the Senate 
a report describing the actions taken by the enterprise 
pursuant to subsection (a).]
  (f) Diversity in Agency Workforce.--The Agency shall take 
affirmative steps to seek diversity in its workforce at all 
levels of the agency consistent with the demographic diversity 
of the United States, which shall include--
          (1) heavily recruiting at historically Black colleges 
        and universities, Hispanic-serving institutions, 
        women's colleges, and colleges that typically serve 
        majority minority populations;
          (2) sponsoring and recruiting at job fairs in urban 
        communities, and placing employment advertisements in 
        newspapers and magazines oriented toward women and 
        people of color;
          (3) partnering with organizations that are focused on 
        developing opportunities for minorities and women to 
        place talented young minorities and women in industry 
        internships, summer employment, and full-time 
        positions; and
          (4) where feasible, partnering with inner-city high 
        schools, girls' high schools, and high schools with 
        majority minority populations to establish or enhance 
        financial literacy programs and provide mentoring.

SEC. 1319B. ANNUAL REPORTS BY DIRECTOR.

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

           *       *       *       *       *       *       *


SEC. 1319C. PUBLIC DISCLOSURE OF FINAL ORDERS AND AGREEMENTS.

  (a) In General.--The Director shall make available to the 
public--
          (1) any written agreement or other written statement 
        for which a violation may be redressed by the Director 
        or any modification to or termination thereof, unless 
        the Director, in the Director's discretion, determines 
        that public disclosure would be contrary to the public 
        interest or determines under subsection (c) that public 
        disclosure would seriously threaten the financial 
        health or security of [the enterprise] the regulated 
        entity;

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *


SEC. 1319D. LIMITATION ON SUBSEQUENT EMPLOYMENT.

  Neither the Director nor any former officer or employee of 
the [Office] Agency who, while employed by the [Office] Agency, 
was compensated at a rate in excess of the lowest rate for a 
position classified higher than GS-15 of the General Schedule 
under section 5107 of title 5, United States Code, may accept 
compensation from [an enterprise] a regulated entity during the 
2-year period beginning on the date of separation from 
employment by the [Office] Agency.

SEC. 1319E. AUDITS BY GAO.

  The Comptroller General shall audit the operations of the 
[Office] Agency in accordance with generally accepted 
Government auditing standards. All books, records, accounts, 
reports, files, and property belonging to, or used by, the 
[Office] Agency shall be made available to the Comptroller 
General. Audits under this section shall be conducted annually 
for the first 2 fiscal years following the date of the 
enactment of this Act and as appropriate thereafter.

SEC. 1319F. INFORMATION, RECORDS, AND MEETINGS.

  For purposes of subchapter II of chapter 5 of title 5, United 
States Code[--
          [(1) the Office, and
          [(2) the Department of Housing and Urban Development, 
        with respect to activities under this title,
shall be considered agencies responsible for the regulation or 
supervision of financial institutions.], the Agency shall be 
considered an agency responsible for the regulation or 
supervision of financial institutions.

SEC. 1319G. REGULATIONS AND ORDERS.

  [(a) Authority.--The Director shall issue any regulations and 
orders necessary to carry out the duties of the Director and to 
carry out this title before the expiration of the 18-month 
period beginning on the appointment of the Director under 
section 1312. Such regulations and orders shall be subject to 
the approval of the Secretary only to the extent provided in 
subsections (b) and (c) of section 1313.]
  (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.
  (b) Notice and Comment.--Any regulations issued by the 
Director under this section, this title, or any of the 
authorizing statutes shall be issued after notice and 
opportunity for public comment pursuant to the provisions of 
section 553 of title 5, United States Code.
  [(c) Congressional Review.--The Director may not publish any 
regulation for comment under subsection (b) unless, not less 
than 15 days before it is published for comment, the Director 
has submitted a copy of the regulation, in the form it is 
intended to be proposed, to the Committee on Banking, Finance 
and Urban Affairs of the House of Representatives and the 
Committee on Banking, Housing, and Urban Affairs of the 
Senate.]

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.

                    [PART 2--AUTHORITY OF SECRETARY]

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

                      Subpart A--General Authority

[SEC. 1321. REGULATORY AUTHORITY.

  [Except for the authority of the Director of the Office of 
Federal Housing Enterprise Oversight described in section 
1313(b) and all other matters relating to the safety and 
soundness of the enterprises, the Secretary of Housing and 
Urban Development shall have general regulatory power over each 
enterprise and shall make such rules and regulations as shall 
be necessary and proper to ensure that this part and the 
purposes of the Federal National Mortgage Association Charter 
Act and the Federal Home Loan Mortgage Corporation Act are 
accomplished.

[SEC. 1322. PRIOR APPROVAL AUTHORITY FOR NEW PROGRAMS.

  [(a) Authority.--The Secretary shall require each enterprise 
to obtain the approval of the Secretary for any new program of 
the enterprise before implementing the program.
  [(b) Standard for Approval.--
          [(1) Permanent standard.--Except as provided in 
        paragraph (2), the Secretary shall approve any new 
        program of an enterprise for purposes of subsection (a) 
        unless--
                  [(A) for a new program of the Federal 
                National Mortgage Association, the Secretary 
                determines that the program is not authorized 
                under paragraph (2), (3), (4), or (5) of 
                section 302(b) of the Federal National Mortgage 
                Association Charter Act, or under section 304 
                of such Act;
                  [(B) for a new program of the Federal Home 
                Loan Mortgage Corporation, the Secretary 
                determines that the program is not authorized 
                under section 305(a) (1), (4), or (5) of the 
                Federal Home Loan Mortgage Corporation Act; or
                  [(C) the Secretary determines that the new 
                program is not in the public interest.
          [(2) Transition standard.--Before the date occurring 
        12 months after the date of the effectiveness of the 
        regulations under section 1361(e) establishing the 
        risk-based capital test, the Secretary shall approve 
        any new program of an enterprise for purposes of 
        subsection (a) unless--
                  [(A) The Secretary makes a determination as 
                described in paragraph (1) (A), (B), or (C); or
                  [(B) the Director determines that the new 
                program would risk significant deterioration of 
                the financial condition of the enterprise.
  [(c) Procedure for Approval.--
          [(1) Submission of request.--To obtain the approval 
        of the Secretary for purposes of subsection (a), an 
        enterprise shall submit to the Secretary a written 
        request for approval of the new program that describes 
        the program.
          [(2) Response.--The Secretary shall, not later than 
        the expiration of the 45-day period beginning upon the 
        submission of a request for approval, approve the 
        request or submit to the Committee on Banking, Finance 
        and Urban Affairs of the House of Representatives and 
        the Committee on Banking, Housing, and Urban Affairs of 
        the Senate a report explaining the reasons for not 
        approving the request. The Secretary may extend such 
        period for a single additional 15-day period only if 
        the Secretary requests additional information from the 
        enterprise.
          [(3) Failure to respond.--If the Secretary fails to 
        approve the request or fails to submit a report under 
        paragraph (2) during the period under such paragraph, 
        the request shall be considered to have been approved.
          [(4) Review of disapproval.--
                  [(A) Unauthorized new programs.--If the 
                Secretary submits a report under paragraph (2) 
                of this subsection disapproving a request for 
                approval on the grounds under subparagraph (A) 
                or (B) of subsection (b)(1), the Secretary 
                shall provide the enterprise submitting the 
                request with a timely opportunity to review and 
                supplement the administrative record.
                  [(B) New programs not in public interest.--If 
                the Secretary submits a report under paragraph 
                (2) of this subsection disapproving a request 
                for approval on the grounds under subsection 
                (b)(1)(C) or (b)(2)(B), the Secretary shall 
                provide the enterprise submitting the request 
                notice of, and opportunity for, a hearing on 
                the record regarding such disapproval.]

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.

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.

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 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 C.F.R. Part 1710) in accordance with section 553 of 
title 5, United States Code, and upon written notice to the 
enterprise.

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. 1323. PUBLIC ACCESS TO MORTGAGE INFORMATION OF ENTERPRISES.

  (a) In General.--The [Secretary] Director shall make 
available to the public, in forms useful to the public 
(including forms accessible by computers), the data submitted 
by the enterprises in the reports required under section 309(m) 
of the Federal National Mortgage Association Charter Act or 
section 307(e) of the Federal Home Loan Mortgage Corporation 
Act.
  (b) Access.--
          (1) Proprietary data.--Except as provided in 
        paragraph (2), the [Secretary] Director may not make 
        available to the public data that the [Secretary] 
        Director determines pursuant to section 1326 are 
        proprietary information.
          (2) Exception.--The [Secretary] Director shall not 
        restrict access to the data provided in accordance with 
        section 309(m)(1)(A) of the Federal National Mortgage 
        Association Charter Act or section 307(e)(1)(A) of the 
        Federal Home Loan Mortgage Corporation Act.
  (c) Fees.--The [Secretary] Director may charge reasonable 
fees to cover the cost of making data available under this 
section to the public.

[SEC. 1324. ANNUAL HOUSING REPORT.

  [(a) In General.--After reviewing and analyzing the reports 
submitted under section 309(n) of the Federal National Mortgage 
Association Charter Act and section 307(f) of the Federal Home 
Loan Mortgage Corporation Act, the Secretary shall submit a 
report, as part of the annual report under section 1328(a) of 
this title, on the extent to which each enterprise is achieving 
the annual housing goals established under subpart B of this 
part and the purposes of the enterprise established by law.
  [(b) Contents.--The report shall--
          [(1) aggregate and analyze census tract data to 
        assess the compliance of each enterprise with the 
        central cities, rural areas, and other underserved 
        areas housing goal and to determine levels of business 
        in central cities, rural areas, underserved areas, low- 
        and moderate-income census tracts, minority census 
        tracts, and other geographical areas deemed appropriate 
        by the Secretary;
          [(2) aggregate and analyze data on income to assess 
        the compliance of each enterprise with the low- and 
        moderate-income and special affordable housing goals;
          [(3) aggregate and analyze data on income, race, and 
        gender by census tract and compare such data with 
        larger demographic, housing, and economic trends;
          [(4) examine actions that each enterprise has 
        undertaken or could undertake to promote and expand the 
        annual goals established under sections 1332, 1333, and 
        1334, and the purposes of the enterprise established by 
        law;
          [(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 enterprise has undertaken 
        and could undertake to promote and expand opportunities 
        for first-time homebuyers; and
          [(7) describe any actions taken under section 1325(5) 
        with respect to originators found to violate fair 
        lending procedures.]

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 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.

SEC. 1325. FAIR HOUSING.

  The [Secretary] Director shall--
          (1) * * *
          (2) by regulation, require each enterprise to submit 
        data to the [Secretary] Director to assist the 
        [Secretary] Director in investigating whether a 
        mortgage lender with which the enterprise does business 
        has failed to comply with the Fair Housing Act;
          (3) by regulation, require each enterprise to submit 
        data to the [Secretary] Director to assist in 
        investigating whether a mortgage lender with which the 
        enterprise does business has failed to comply with the 
        Equal Credit Opportunity Act, and shall submit any such 
        information received to the appropriate Federal 
        agencies, as provided in section 704 of the Equal 
        Credit Opportunity Act, for appropriate action;

           *       *       *       *       *       *       *


SEC. 1326. PROHIBITION OF PUBLIC DISCLOSURE OF PROPRIETARY INFORMATION.

  (a) In General.--The [Secretary] Director may, by regulation 
or order, provide that certain information shall be treated as 
proprietary information and not subject to disclosure under 
section 1323 of this title, section 309(n)(3) of the Federal 
National Mortgage Association Charter Act, or section 307(f)(3) 
of the Federal Home Loan Mortgage Corporation Act.
  (b) Protection of Information on Housing Activities.--The 
[Secretary] Director shall not provide public access to, or 
disclose to the public, any information required to be 
submitted by an enterprise under section 309(n) of the Federal 
National Mortgage Association Charter Act or section 307(f) of 
the Federal Home Loan Mortgage Corporation Act that the 
[Secretary] Director determines is proprietary.

           *       *       *       *       *       *       *


[SEC. 1327. AUTHORITY TO REQUIRE REPORTS BY ENTERPRISES.

  [The Secretary shall require each enterprise to submit 
reports on its activities to the Secretary as the Secretary 
considers appropriate.

[SEC. 1328. REPORTS BY SECRETARY.

  [(a) Annual Report.--The Secretary shall, not later than June 
30 of each year, submit a report to the Committee on Banking, 
Finance and Urban Affairs of the House of Representatives and 
the Committee on Banking, Housing, and Urban Affairs of the 
Senate on the activities of each enterprise.
  [(b) Views on Budget and Financial Plans of Enterprises.--On 
an annual basis, the Secretary shall provide the Committees 
referred to in subsection (a) with comments on the plans, 
forecasts, and reports required under section 1316(g).]

SEC. 1327. 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.

                        Subpart B--Housing Goals

[SEC. 1331. ESTABLISHMENT.

  [(a) In General.--The Secretary shall establish, by 
regulation, housing goals under this subpart for each 
enterprise. The housing goals shall include a low- and 
moderate-income housing goal pursuant to section 1332, a 
special affordable housing goal pursuant to section 1333, and a 
central cities, rural areas, and other underserved areas 
housing goal pursuant to section 1334. The Secretary shall 
implement this subpart in a manner consistent with section 
301(3) of the Federal National Mortgage Association Charter Act 
and section 301(b)(3) of the Federal Home Loan Mortgage 
Corporation Act.
  [(b) Consideration of Units in Multifamily Housing.--In 
establishing any goal under this subpart, the Secretary may 
take into consideration the number of housing units financed by 
any mortgage on multifamily housing purchased by an enterprise.
  [(c) Adjustment of Housing Goals.--Except as otherwise 
provided in this title, from year to year the Secretary may, by 
regulation, adjust any housing goal established under this 
subpart.

[SEC. 1332. LOW- AND MODERATE-INCOME HOUSING GOAL.

  [(a) In General.--The Secretary shall establish an annual 
goal for the purchase by each enterprise of mortgages on 
housing for low- and moderate-income families. The Secretary 
may establish separate specific subgoals within the goal under 
this section and such subgoals shall not be enforceable under 
the provisions of section 1336, any other provision of this 
title, or any provision of the Federal National Mortgage 
Association Charter Act or the Federal Home Loan Mortgage 
Corporation Act.
  [(b) Factors To Be Applied.--In establishing the goal under 
this section, the Secretary shall consider--
          [(1) national housing needs;
          [(2) economic, housing, and demographic conditions;
          [(3) the performance and effort of the enterprises 
        toward achieving the low- and moderate-income housing 
        goal in previous years;
          [(4) the size of the conventional mortgage market 
        serving low- and moderate-income families 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 low- 
        and moderate-income families; and
          [(6) the need to maintain the sound financial 
        condition of the enterprises.
  [(c) Use of Borrower and Tenant Income.--
          [(1) In general.--The Secretary shall monitor the 
        performance of each enterprise in carrying out this 
        section and shall evaluate such performance (for 
        purposes of section 1336) based on--
                  [(A) in the case of an owner-occupied 
                dwelling, the mortgagor's income at the time of 
                origination of the mortgage; or
                  [(B) in the case of a rental dwelling--
                          [(i) the income of the prospective or 
                        actual tenants of the property, where 
                        such data are available; or
                          [(ii) the rent levels affordable to 
                        low- and moderate-income families, 
                        where the data referred to in clause 
                        (i) are not available.
          [(2) Affordability.--For the purpose of paragraph 
        (1)(B)(ii), a rent level shall be considered affordable 
        if it does not exceed 30 percent of the maximum income 
        level of the income categories referred to in this 
        section, with appropriate adjustments for unit size as 
        measured by the number of bedrooms.
  [(d) Transition.--
          [(1) Interim target.--Notwithstanding any other 
        provision of this section, during the 2-year period 
        beginning on January 1, 1993, the annual target under 
        this section for low- and moderate-income mortgage 
        purchases for each enterprise shall be 30 percent of 
        the total number of dwelling units financed by mortgage 
        purchases of the enterprise.
          [(2) Interim goal.--During such 2-year period, the 
        Secretary shall establish a separate annual goal for 
        each enterprise, the achievement of which shall 
        require--
                  [(A) an enterprise that is not meeting the 
                target under paragraph (1) upon January 1, 
                1993, to improve its performance relative to 
                such target annually and, to the maximum extent 
                feasible, to meet such target at the conclusion 
                of such 2-year period; and
                  [(B) an enterprise that is meeting the target 
                under paragraph (1) upon January 1, 1993, to 
                improve its performance relative to the target.
          [(3) Implementation.--The Secretary shall establish 
        any requirements necessary to implement the transition 
        provisions under this subsection by notice, after 
        providing the enterprises with an opportunity to review 
        and comment not less than 30 days before the issuance 
        of such notice. Such notice shall be issued not later 
        than the expiration of the 90-day period beginning upon 
        the date of the enactment of this Act and shall be 
        effective upon issuance.

[SEC. 1333. SPECIAL AFFORDABLE HOUSING GOAL.

  [(a) Establishment.--
          [(1) In general.--The Secretary shall establish a 
        special annual goal designed to adjust the purchase by 
        each enterprise of mortgages on rental and owner-
        occupied housing to meet the then-existing unaddressed 
        needs of, and affordable to, low-income families in 
        low-income areas and very low-income families. The 
        special affordable housing goal established under this 
        section for an enterprise shall not be less than 1 
        percent of the dollar amount of the mortgage purchases 
        by the enterprise for the previous year.
          [(2) Standards.--In establishing the special 
        affordable housing goal for an enterprise, the 
        Secretary shall consider--
                  [(A) data submitted to the Secretary in 
                connection with the special affordable housing 
                goal for previous years;
                  [(B) the performance and efforts of the 
                enterprise toward achieving the special 
                affordable housing goal in previous years;
                  [(C) national housing needs within the 
                categories set forth in this section;
                  [(D) the ability of the enterprise to lead 
                the industry in making mortgage credit 
                available for low-income and very low-income 
                families; and
                  [(E) the need to maintain the sound financial 
                condition of the enterprise.
  [(b) Full Credit Activities.--
          [(1) In general.--The Secretary shall give full 
        credit toward achievement of the special affordable 
        housing goal under this section (for purposes of 
        section 1336) to the following activities:
                  [(A) Federally related mortgages.--The 
                purchase or securitization of federally insured 
                or guaranteed mortgages, if--
                          [(i) such mortgages cannot be readily 
                        securitized through the Government 
                        National Mortgage Association or any 
                        other Federal agency;
                          [(ii) participation of the enterprise 
                        substantially enhances the 
                        affordability of the housing subject to 
                        such mortgages; and
                          [(iii) the mortgages involved are on 
                        housing that otherwise qualifies under 
                        such goal to be considered for purposes 
                        of such goal.
                  [(B) Portfolios.--The purchase or refinancing 
                of existing, seasoned portfolios of loans, if--
                          [(i) the seller is engaged in a 
                        specific program to use the proceeds of 
                        such sales to originate additional 
                        loans that meet such goal; and
                          [(ii) such purchases or refinancings 
                        support additional lending for housing 
                        that otherwise qualifies under such 
                        goal to be considered for purposes of 
                        such goal.
                  [(C) RTC and fdic loans.--The purchase of 
                direct loans made by the Resolution Trust 
                Corporation or the Federal Deposit Insurance 
                Corporation, if such loans--
                          [(i) are not guaranteed by such 
                        agencies themselves or other Federal 
                        agencies;
                          [(ii) are made with recourse 
                        provisions similar to those offered 
                        through private mortgage insurance or 
                        other conventional sellers; and
                          [(iii) are made for the purchase of 
                        housing that otherwise qualifies under 
                        such goal to be considered for purposes 
                        of such goal.
          [(2) Exclusion.--No credit toward the achievement of 
        the special affordable housing goal may be given to the 
        purchase or securitization of mortgages associated with 
        the refinancing of the existing enterprise portfolios.
  [(c) Use of Borrower and Tenant Income.--
          [(1) In general.--The Secretary shall monitor the 
        performance of each enterprise in carrying out this 
        section and shall evaluate such performance (for 
        purposes of section 1336) based on--
                  [(A) in the case of an owner-occupied 
                dwelling, the mortgagor's income at the time of 
                origination of the mortgage; or
                  [(B) in the case of a rental dwelling--
                          [(i) the income of the prospective or 
                        actual tenants of the property, where 
                        such data are available; or
                          [(ii) the rent levels affordable to 
                        low-income and very low-income 
                        families, where the data referred to in 
                        clause (i) are not available.
          [(2) Affordability.--For the purpose of paragraph 
        (1)(B)(ii), a rent level shall be considered affordable 
        if it does not exceed 30 percent of the maximum income 
        level of the income categories referred to in this 
        section, with appropriate adjustments for unit size as 
        measured by the number of bedrooms.
  [(d) Transition.--
          [(1) FNMA mortgage purchases.--Notwithstanding any 
        other provision of this section, during the 2-year 
        period beginning on January 1, 1993, the special 
        affordable housing goal for the Federal National 
        Mortgage Association shall include mortgage purchases 
        of not less than $2,000,000,000 (for such 2-year 
        period), with one-half of such purchases consisting of 
        mortgages on single family housing and one-half 
        consisting of mortgages on multifamily housing.
          [(2) FHLMC mortgage purchases.--Notwithstanding any 
        other provision of this section, during the 2-year 
        period beginning on January 1, 1993, the special 
        affordable housing goal for the Federal Home Loan 
        Mortgage Corporation shall include mortgage purchases 
        of not less than $1,500,000,000 (for such 2-year 
        period), with one-half of such purchases consisting of 
        mortgages on single family housing and one-half 
        consisting of mortgages on multifamily housing.
          [(3) Income characteristics for mortgage purchases.--
                  [(A) Multifamily mortgages.--The special 
                affordable housing goals established under 
                paragraphs (1) and (2) shall provide that, of 
                mortgages on multifamily housing that are 
                purchased and contribute to the achievement of 
                such goals--
                          [(i) 45 percent shall be mortgages on 
                        multifamily housing affordable to low-
                        income families; and
                          [(ii) 55 percent shall be mortgages 
                        on multifamily housing in which--
                                  [(I) at least 20 percent of 
                                the units are affordable to 
                                families whose incomes do not 
                                exceed 50 percent of the median 
                                income for the area; or
                                  [(II) at least 40 percent of 
                                the units are affordable to 
                                very low-income families.
                  [(B) Single family mortgages.--The special 
                affordable housing goals established under 
                paragraphs (1) and (2) shall provide that, of 
                mortgages on single family housing that are 
                purchased and contribute to the achievement of 
                such goals--
                          [(i) 45 percent shall be mortgages of 
                        low-income families who live in census 
                        tracts in which the median income does 
                        not exceed 80 percent of the area 
                        median income; and
                          [(ii) 55 percent shall be mortgages 
                        of very low-income families.
                  [(C) Compliance with special affordable 
                housing goals.--Only the portion of mortgages 
                on multifamily housing purchased by an 
                enterprise that are attributable to units 
                affordable to low-income families shall 
                contribute to the achievement of the special 
                affordable housing goals under subparagraph 
                (A)(ii).
          [(4) Implementation.--The Secretary shall establish 
        any requirements necessary to implement the transition 
        provisions under this subsection by notice, after 
        providing the enterprises with an opportunity to review 
        and comment not less than 30 days before the issuance 
        of such notice. Such notice shall be issued not later 
        than the expiration of the 90-day period beginning upon 
        the date of the enactment of this Act and shall be 
        effective upon issuance.

[SEC. 1334. CENTRAL CITIES, RURAL AREAS, AND OTHER UNDERSERVED AREAS 
                    HOUSING GOAL.

  [(a) In General.--The Secretary shall establish an annual 
goal for the purchase by each enterprise of mortgages on 
housing located in central cities, rural areas, and other 
underserved areas. The Secretary may establish separate 
subgoals within the goal under this section and such subgoals 
shall not be enforceable under the provisions of section 1336, 
any other provision of this title, or any provision of the 
Federal National Mortgage Association Charter Act or the 
Federal Home Loan Mortgage Corporation Act.
  [(b) Factors To Be Applied.--In establishing the housing goal 
under this section, the Secretary shall consider--
          [(1) urban and rural housing needs and the housing 
        needs of underserved areas;
          [(2) economic, housing, and demographic conditions;
          [(3) the performance and efforts of the enterprises 
        toward achieving the central cities, rural areas, and 
        other underserved areas housing goal in previous years;
          [(4) the size of the conventional mortgage market for 
        central cities, rural areas, and other underserved 
        areas 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 throughout 
        the United States, including central cities, rural 
        areas, and other underserved areas; and
          [(6) the need to maintain the sound financial 
        condition of the enterprises.
  [(c) Location of Properties.--The Secretary shall monitor the 
performance of each enterprise in carrying out this section and 
shall evaluate such performance (for purposes of section 1336) 
based on the location of the properties subject to mortgages 
purchased by each enterprise.
  [(d) Transition.--
          [(1) Interim target.--Notwithstanding any other 
        provision of this section, during the 2-year period 
        beginning on January 1, 1993, the annual target under 
        this section for purchases by each enterprise of 
        mortgages on housing located in central cities shall be 
        30 percent of the total number of dwelling units 
        financed by mortgage purchases of the enterprise.
          [(2) Interim goal.--During such 2-year period, the 
        Secretary shall establish a separate annual goal for 
        each enterprise, the achievement of which shall 
        require--
                  [(A) an enterprise that is not meeting the 
                target under paragraph (1) upon January 1, 
                1993, to improve its performance relative to 
                such target annually and, to the maximum extent 
                feasible, to meet such target at the conclusion 
                of such 2-year period; and
                  [(B) an enterprise that is meeting the target 
                under paragraph (1) upon January 1, 1993, to 
                improve its performance relative to the target.
          [(3) Definition of central city.--For purposes of 
        this subsection, the term ``central city'' means any 
        political subdivision designated as a central city by 
        the Office of Management and Budget.
          [(4) Implementation.--The Secretary shall establish 
        any requirements necessary to implement the transition 
        provisions under this subsection by notice, after 
        providing the enterprises with an opportunity to review 
        and comment not less than 30 days before the issuance 
        of such notice. Such notice shall be issued not later 
        than the expiration of the 90-day period beginning upon 
        the date of the enactment of this Act and shall be 
        effective upon issuance.]

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 
                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--
          (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.

SEC. 1335. DUTY TO SERVE UNDERSERVED MARKETS AND OTHER REQUIREMENTS.

  (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.
  [(a)] (b) In General.--To meet the [low- and moderate-income 
housing goal under section 1332, the special affordable housing 
goal under section 1333, and the central cities, rural areas, 
and other underserved areas housing goal under section 1334] 
housing goals established under this subpart and to carry out 
the duty under subsection (a) of this section, each enterprise 
shall--
          (1) * * *

           *       *       *       *       *       *       *

          (3) take affirmative steps to--
                  (A) * * *

           *       *       *       *       *       *       *

        which shall include developing appropriate and prudent 
        underwriting standards, business practices, repurchase 
        requirements, pricing, fees, and procedures; and
          (4) develop the institutional capacity to help 
        finance low- and moderate-income housing, including 
        housing for first-time homebuyers[; and].
          [(5) assist in maintaining the affordability of 
        assisted units in eligible multifamily housing projects 
        with expiring contracts, as defined under the 
        Multifamily Assisted Housing Reform and Affordability 
        Act of 1997.]
  [(b) Affordable Housing Goals.--Actions taken under 
subsection (a)(5) shall constitute part of the contribution of 
each entity in meeting its affordable housing goals under 
sections 1332, 1333, and 1334 for any fiscal year, as 
determined by the Secretary.]
  (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 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.

SEC. 1336. MONITORING AND ENFORCING COMPLIANCE WITH HOUSING GOALS.

  (a) In General.--
          (1) Authority.--The [Secretary] Director shall 
        monitor and enforce compliance with the housing goals 
        established under [sections 1332, 1333, and 1334,] this 
        subpart and with the duty under section 1335(a) of each 
        enterprise with respect to underserved markets, as 
        provided in this section.
          (2) Guidelines.--The [Secretary] Director shall 
        establish guidelines to measure the extent of 
        compliance with the housing goals, which, except as 
        provided in paragraph (4), may assign full credit, 
        partial credit, or no credit toward achievement of the 
        housing goals to different categories of mortgage 
        purchase activities of the enterprises, based on such 
        criteria as the [Secretary] Director deems appropriate.

           *       *       *       *       *       *       *

          (3) Extent of compliance.--In determining compliance 
        with the housing goals established under this subpart, 
        the [Secretary] Director--
                  (A) shall consider any single mortgage 
                purchased by an enterprise as contributing to 
                the achievement of each housing goal for which 
                such mortgage purchase qualifies; and
                  (B) may take into consideration the number of 
                housing units financed by any mortgage on 
                housing purchased by an enterprise.
          (4) Enforcement of duty to provide mortgage credit to 
        underserved markets.--The duty under section 1335(a) of 
        each enterprise to serve underserved markets (as 
        determined in accordance with section 1335(c)) shall be 
        enforceable under this section to the same extent and 
        under the same provisions that the housing goals 
        established under this subpart are enforceable. Such 
        duty shall 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.
          (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) Notice and Preliminary Determination of Failure To Meet 
Goals.--
          [(1) Notice.--If the Secretary 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 section 1332, 1333, or 
        1334, the Secretary shall provide written notice to the 
        enterprise of such a determination, the reasons for 
        such determination, the requirement to submit a housing 
        plan under subsection (c) of this section, and the 
        information on which the Secretary based the 
        determination or imposed such requirement.]
          (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.
          (2) Response period.--
                  (A) In general.--During the 30-day period 
                beginning on the date that an enterprise is 
                provided notice under paragraph (1), the 
                enterprise may submit to the [Secretary] 
                Director any written information that the 
                enterprise considers appropriate for 
                consideration by the [Secretary] Director in 
                finally determining whether such failure has 
                occurred or whether the achievement of such 
                goal was or is feasible.
                  [(B) Extended period.--The Secretary may 
                extend the period under subparagraph (A) for 
                good cause for not more than 30 additional 
                days.
                  [(C) Shortened period.--The Secretary may 
                shorten the period under subparagraph (A) for 
                good cause.]
                  (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.
                  [(D)] (C) 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 [Secretary] 
                Director.
          (3) Consideration of information and 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 [Secretary] Director shall 
                [determine] issue a final determination of (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 such final 
                determinations, the [Secretary] Director shall 
                take into consideration any relevant 
                information submitted by the enterprise during 
                the response period.
                  (C) Notice.--The [Secretary] Director shall 
                provide written notice to the enterprise, the 
                Committee on [Banking, Finance and Urban 
                Affairs]  Financial Services of the House of 
                Representatives, and the Committee on Banking, 
                Housing, and Urban Affairs of the Senate, of--
                          (i) each final determination 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.
                Such notice shall respond to any information 
                submitted during the response period.
  [(c) Housing Plans.--
          [(1) Requirement.--If the [Secretary] Director finds 
        pursuant to subsection (b), that an enterprise has 
        failed, or that there is a substantial probability that 
        an enterprise will fail, to meet any housing goal 
        established under section 1332, 1333, or 1334, and that 
        the achievement of the housing goal was or is feasible, 
        the Secretary shall require the enterprise to submit a 
        housing plan under this subsection for approval by the 
        Secretary.]
  (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.
          (2) [Contents.--Each housing plan] Housing plan.--If 
        the Director requires a housing plan under this 
        section, such a plan shall be a feasible plan 
        describing the specific actions the enterprise will 
        take--
                  (A) to achieve the goal for the next calendar 
                year; or
                  (B) if the [Secretary] Director determines 
                that there is a substantial probability that 
                the enterprise will fail to meet a goal in the 
                current year, to make such improvements and 
                changes in its operations as are reasonable in 
                the remainder of such year.
        The plan shall be sufficiently specific to enable the 
        [Secretary] Director to monitor compliance 
        periodically.
          (3) Deadline for submission.--The [Secretary] 
        Director shall, by regulation, establish a deadline for 
        an enterprise to comply with any remedial action or 
        submit a housing plan to the [Secretary] Director, 
        which may not be more than 45 days after the enterprise 
        is provided notice [under subsection (b)(3) that a 
        housing plan is required]. The regulations shall 
        provide that the [Secretary] Director may extend the 
        deadline to the extent that the [Secretary] Director 
        determines necessary. Any extension of the deadline 
        shall be in writing and for a time certain.
          (4) Approval.--[The Secretary shall review each 
        housing plan submitted under this subsection and, not 
        later than 30 days after submission of the plan, 
        approve or disapprove the plan. The Secretary may 
        extend the period for approval or disapproval for a 
        single additional 30-day period if the Secretary 
        determines it necessary.] 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. The [Secretary] Director 
        shall approve any plan that the [Secretary] 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 laws 
        and regulations.
          (5) Notice of approval and disapproval.--The 
        [Secretary] 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 is disapproved, the 
        enterprise shall submit an amended plan acceptable to 
        the [Secretary] Director within 30 days or such longer 
        period that the [Secretary] 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 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. 1337. REPORTS DURING TRANSITION.

  [Each enterprise shall submit to the Secretary, the Committee 
on Banking, Finance and Urban Affairs of the House of 
Representatives, and the Committee on Banking, Housing, and 
Urban Affairs of the Senate, a report for each transitional 
housing goal for the enterprise under section 1332(d), 1333(d), 
or 1334(d), describing the actions the enterprise plans to take 
to meet such goal. Each such report shall be submitted within 
45 days after the establishment of the goal for which the 
report is submitted.

[SEC. 1338. EFFECTIVE DATE OF TRANSITION GOALS.

  [The housing goals established under sections 1332(d), 
1333(d), and 1334(d) shall not become effective until January 
1, 1993.]

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.
          (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.
  (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 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, completed 
                a program of counseling with respect to the 
                responsibilities and financial management 
                involved in homeownership that is approved by 
                the Director; 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.
  (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 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. 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.

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.

               [Subpart C--Enforcement of Housing Goals]

                         Subpart C--Enforcement

SEC. 1341. CEASE-AND-DESIST PROCEEDINGS.

  [(a) Grounds for Issuance.--The Secretary may issue and serve 
a notice of charges under this section upon an enterprise if, 
in the determination of the Secretary--
          [(1) the enterprise has failed to submit a housing 
        plan that substantially complies with section 1336(c) 
        within the applicable period;
          [(2) the enterprise is engaging or has engaged, or 
        the Secretary has reasonable cause to believe that the 
        enterprise is about to engage, in any failure to make a 
        good faith effort to comply with a housing plan for the 
        enterprise submitted and approved under section 
        1336(c); or
          [(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.]
  (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).
  (b) Procedure.--
          (1) Notice of charges.--Each notice of charges 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 [Secretary] Director 
        finds on the record made at such hearing that any 
        conduct specified in the notice of charges has been 
        established (or the enterprise consents pursuant to 
        section 1342(a)(4)), the [Secretary] Director may issue 
        and serve upon the enterprise an order [requiring the 
        enterprise to (A) submit a housing plan in compliance 
        with section 1336(c), (B) comply with the housing plan, 
        or (C) provide 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.] 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.
  (c) Effective Date.--An order under this section shall become 
effective upon the expiration of the 30-day period beginning on 
the date of the 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 [Secretary] Director 
or otherwise, as provided in this subpart.
  [(d) Transition Period Limitation.--The [Secretary] Director 
may not impose any cease-and-desist order under this section 
for any failure by an enterprise, during the 2-year period 
beginning on the January 1, 1993, to comply with an approved 
housing plan, unless the [Secretary] Director determines that 
the enterprise has intentionally failed to make a good faith 
effort to comply with the approved plan.]

SEC. 1342. HEARINGS.

  (a) * * *
  (b) Issuance of Order.--
          (1) In general.--After any such hearing, and within 
        90 days after the enterprise has been notified that the 
        case has been submitted to the [Secretary] Director for 
        final decision, the [Secretary] Director shall render 
        the decision (which shall include findings of fact upon 
        which the decision is predicated) and shall issue and 
        serve upon the enterprise an order or orders consistent 
        with the provisions of this subpart.
          (2) Modification.--Judicial review of any such order 
        shall be exclusively as provided in section 1343. 
        Unless such a petition for review is timely filed as 
        provided in section 1343, and thereafter until the 
        record in the proceeding has been filed as so provided, 
        the [Secretary] Director may at any time, modify, 
        terminate, or set aside any such order, upon such 
        notice and in such manner as the [Secretary] Director 
        considers proper. Upon such filing of the record, the 
        [Secretary] Director may modify, terminate, or set 
        aside any such order with permission of the court.

SEC. 1343. JUDICIAL REVIEW.

  (a) Commencement.--An enterprise that is a party to a 
proceeding under section 1341 or 1345 may obtain review of any 
final order issued under such section by filing in the United 
States Court of Appeals for the District of Columbia Circuit, 
within 30 days after the date of service of such order, a 
written petition praying that the order of the [Secretary] 
Director be modified, terminated, or set aside. The clerk of 
the court shall transmit a copy of the petition to the 
[Secretary] Director.
  (b) Filing of Record.--Upon receiving a copy of a petition, 
the [Secretary] Director shall file in the court the record in 
the proceeding, as provided in section 2112 of title 28, United 
States Code.
  (c) Jurisdiction.--Upon the filing of a petition, such court 
shall have jurisdiction, which upon the filing of the record by 
the [Secretary] Director shall (except as provided in the last 
sentence of section 1342(b)(2)) be exclusive, to affirm, 
modify, terminate, or set aside, in whole or in part, the order 
of the [Secretary] Director.
  (d) Review.--Review of such proceedings shall be governed by 
chapter 7 of title 5, United States Code.
  (e) Order To Pay Penalty.--Such court shall have the 
authority in any such review to order payment of any penalty 
imposed by the [Secretary] Director under this subpart.
  (f) No Automatic Stay.--The commencement of proceedings for 
judicial review under this section shall not, unless 
specifically ordered by the court, operate as a stay of any 
order issued by the [Secretary] Director.

SEC. 1344. ENFORCEMENT AND JURISDICTION.

  [(a) Enforcement.--The Secretary may request the Attorney 
General of the United States to bring an action in the United 
States District Court for the District of Columbia for the 
enforcement of any effective notice or order issued under 
section 1341 or 1345. Such court shall have jurisdiction and 
power to order and require compliance herewith.]
  (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.

           *       *       *       *       *       *       *


SEC. 1345. CIVIL MONEY PENALTIES.

  [(a) Authority.--The Secretary may impose a civil money 
penalty, in accordance with the provisions of this section, on 
any enterprise that has failed--
          [(1) to submit a housing plan that substantially 
        complies with section 1336(c) within the applicable 
        period;
          [(2) to make a good faith effort to comply with a 
        housing plan for the enterprise submitted and approved 
        under section 1336(c); or
          [(3) 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.
  [(b) Amount of Penalty.--The amount of the penalty, as 
determined by the Secretary, may not exceed--
          [(1) for any failure described in subsection (a)(1), 
        $25,000 for each day that the failure occurs; and
          [(2) for any failure described in subsection (a) (2) 
        or (3), $10,000 for each day that the failure occurs.]
  (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.
  (c) Procedures.--
          (1) Establishment.--The [Secretary] 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 [Secretary] 
                Director to notify the enterprise in writing of 
                the [Secretary's] Director's determination to 
                impose the penalty, which shall be made on the 
                record; and
                  (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 
                for 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 [Secretary] Director shall give consideration to 
        such factors as the gravity of the offense, any history 
        of prior offenses, ability to pay the penalty, injury 
        to the public, benefits received, deterrence of future 
        violations, and such other factors as the [Secretary] 
        Director may determine, by regulation, to be 
        appropriate. 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.
  (d) Action To Collect Penalty.--If an enterprise fails to 
comply with an order by the [Secretary] Director imposing a 
civil money penalty under this section, after the order is no 
longer subject to review as provided by sections 1342 and 1343, 
the [Secretary] Director may [request the Attorney General of 
the United States to], in the discretion of the Director, 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, or 
request that the Attorney General of the United States bring 
such an action. 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 Secretary.--The [Secretary] Director may 
compromise, modify, or remit any civil money penalty which may 
be, or has been, imposed under this section.
  [(f) Transition Period Limitation.--The Secretary may not 
impose any civil money penalty under this section for any 
failure by an enterprise, during the 2-year period beginning on 
January 1, 1993, to comply with an approved housing plan, 
unless the Secretary determines that the enterprise has 
intentionally failed to make a good faith effort to comply with 
an approved plan.]
  [(g)] (f) Deposit of Penalties.--The [Secretary] Director 
shall deposit any civil money penalties collected under this 
section into the general fund of the Treasury.

SEC. 1346. PUBLIC DISCLOSURE OF FINAL ORDERS AND AGREEMENTS.

  (a) In General.--The [Secretary] Director shall make 
available to the public--
          (1) any written agreement or other written statement 
        for which a violation may be redressed by the 
        [Secretary] Director or any modification to or 
        termination thereof, unless the [Secretary] Director, 
        in the [Secretary's] Director's discretion, determines 
        that public disclosure would be contrary to the public 
        interest or determines under subsection (c) that public 
        disclosure would seriously threaten the financial 
        health or security of the enterprise;
          (2) any order that is issued with respect to any 
        administrative enforcement proceeding initiated by the 
        [Secretary] Director under this subpart and that has 
        become final in accordance with sections 1342 and 1343; 
        and
          (3) any modification to or termination of any final 
        order made public pursuant to this subsection.
  (b) Hearings.--All hearings with respect to any notice of 
charges issued by the [Secretary] Director shall be open to the 
public, unless the [Secretary] Director, in the [Secretary's] 
Director's discretion, determines that holding an open hearing 
would be contrary to the public interest.
  (c) Delay of Public Disclosure Under Exceptional 
Circumstances.--If the [Secretary] Director makes a 
determination in writing that the public disclosure of any 
final order pursuant to subsection (a) would seriously threaten 
the financial soundness of the enterprise, the [Secretary] 
Director may delay the public disclosure of such order for a 
reasonable time.
  (d) Documents Filed Under Seal in Public Enforcement 
Hearings.--The [Secretary] Director may file any document or 
part thereof under seal in any hearing under this subpart if 
the [Secretary] Director determines in writing that disclosure 
thereof would be contrary to the public interest.
  (e) Retention of Documents.--The [Secretary] Director shall 
keep and maintain a record, for not less than 6 years, of all 
documents described in subsection (a) and all enforcement 
agreements and other supervisory actions and supporting 
documents issued with respect to or in connection with any 
enforcement proceeding initiated by the [Secretary] Director 
under this subpart.
  (f) Disclosures to Congress.--This section may not be 
construed to authorize the withholding, or to prohibit the 
disclosure, of any information to the Congress or any committee 
or subcommittee thereof.

SEC. 1347. NOTICE OF SERVICE.

  Any service required or authorized to be made by the 
[Secretary] Director under this subpart may be made by 
registered mail or in such other manner reasonably calculated 
to give actual notice, as the [Secretary] Director may by 
regulation or otherwise provide.

SEC. 1348. SUBPOENA AUTHORITY.

  (a) In General.--In the course of or in connection with any 
administrative proceeding under this subpart, the [Secretary] 
Director shall have the authority--
          (1) * * *

           *       *       *       *       *       *       *

          (4) to revoke, quash, or modify subpoenas and 
        subpoenas duces tecum issued by the [Secretary] 
        Director.

           *       *       *       *       *       *       *

  (c) Enforcement.--The [Secretary] Director may [request the 
Attorney General of the United States to], in the discretion of 
the Director, bring an action in the United States district 
court for the judicial district in which such proceeding is 
being conducted, or where the witness resides or conducts 
business, or the United States District Court for the District 
of Columbia, or request that the Attorney General of the United 
States bring such an action, for enforcement of any subpoena or 
subpoena duces tecum issued pursuant to this section. Such 
courts shall have jurisdiction and power to order and require 
compliance therewith.

           *       *       *       *       *       *       *


[SEC. 1349. REGULATIONS.

  [The Secretary shall issue any final regulations necessary to 
implement the provisions of this part (not including the 
provisions of sections 1332(d), 1333(d), and 1334(d), relating 
to transition housing goals) not later than the expiration of 
the 18-month period beginning on the date of the enactment of 
this Act. Such regulations shall be issued after notice and 
opportunity for public comment pursuant to the provisions of 
section 553 of title 5, United States Code.]

           *       *       *       *       *       *       *


   [Subtitle B--Required Capital Levels for Enterprises and Special 
                           Enforcement Powers

[SEC. 1361. RISK-BASED CAPITAL LEVELS.

  [(a) Risk-Based Capital Test.--The Director shall, by 
regulation, establish a risk-based capital test under this 
section for the enterprises. When applied to an enterprise, the 
risk-based capital test shall determine the amount of total 
capital for the enterprise that is sufficient for the 
enterprise to maintain positive capital during a 10-year period 
in which the following circumstances occur (in this section 
referred to as the ``stress period''):
          [(1) Credit risk.--With respect to mortgages owned or 
        guaranteed by the enterprise and other obligations of 
        the enterprise, losses occur throughout the United 
        States at a rate of default and severity (based on any 
        measurements of default reasonably related to 
        prevailing practice for that industry in determining 
        capital adequacy) reasonably related to the rate and 
        severity that occurred in contiguous areas of the 
        United States containing an aggregate of not less than 
        5 percent of the total population of the United States 
        that, for a period of not less than 2 years, 
        experienced the highest rates of default and severity 
        of mortgage losses, in comparison with such rates of 
        default and severity of mortgage losses in other such 
        areas for any period of such duration.
          [(2) Interest rate risk.--
                  [(A) In general.--Interest rates decrease as 
                described in subparagraph (B) or increase as 
                described in subparagraph (C), whichever would 
                require more capital for the enterprise.
                  [(B) Decreases.--The 10-year constant 
                maturity Treasury yield decreases during the 
                first year of the stress period and will remain 
                at the new level for the remainder of the 
                stress period. The yield decreases to the 
                lesser of--
                          [(i) 600 basis points below the 
                        average yield during the preceding 9 
                        months, or
                          [(ii) 60 percent of the average yield 
                        during the preceding 3 years,
                but in no case to a yield less than 50 percent 
                of the average yield during the preceding 9 
                months.
                  [(C) Increases.--The 10-year constant 
                maturity Treasury yield increases during the 
                first year of the stress period and will remain 
                at the new level for the remainder of the 
                stress period. The yield increases to the 
                greater of--
                          [(i) 600 basis points above the 
                        average yield during the preceding 9 
                        months, or
                          [(ii) 160 percent of the average 
                        yield during the preceding 3 years,
                but in no case to a yield greater than 175 
                percent of the average yield during the 
                preceding 9 months.
                  [(D) Different terms to maturity.--Yields of 
                Treasury instruments with other terms to 
                maturity will change relative to the 10-year 
                constant maturity Treasury yield in patterns 
                and for durations that are reasonably related 
                to historical experience and are judged 
                reasonable by the Director.
                  [(E) Large increases in yields.--If the 10-
                year constant maturity Treasury yield is 
                assumed to increase by more than 50 percent 
                over the average yield during the preceding 9 
                months, the Director shall adjust the losses in 
                paragraphs (1) and (3) to reflect a 
                correspondingly higher rate of general price 
                inflation.
          [(3) New business.--
                  [(A) In general.--Any contractual commitments 
                of the enterprise to purchase mortgages or 
                issue securities will be fulfilled. The 
                characteristics of resulting mortgage 
                purchases, securities issued, and other 
                financing will be consistent with the 
                contractual terms of such commitments, recent 
                experience, and the economic characteristics of 
                the stress period. No other purchases of 
                mortgages shall be assumed, except as provided 
                in subparagraph (B).
                  [(B) Additional new business.--The Director 
                may, after consideration of each of the studies 
                required by subparagraph (C), assume that the 
                enterprise conducts additional new business 
                during the stress period consistent with the 
                following--
                          [(i) Amount and product types.--The 
                        amount and types of mortgages purchased 
                        and their financing will be reasonably 
                        related to recent experience and the 
                        economic characteristics of the stress 
                        period.
                          [(ii) Losses.--Default and loss 
                        severity characteristics of mortgages 
                        purchased will be reasonably related to 
                        historical experience.
                          [(iii) Pricing.--Prices charged by 
                        the enterprise in purchasing new 
                        mortgages will be reasonably related to 
                        recent experience and the economic 
                        characteristics of the stress period. 
                        The Director may assume that a 
                        reasonable period of time would lapse 
                        before the enterprise would recognize 
                        and react to the characteristics of the 
                        stress period.
                          [(iv) Interest rate risk.--Interest 
                        rate risk on new mortgages purchased 
                        will occur to an extent reasonably 
                        related to historical experience.
                          [(v) Reserves.--The enterprise must 
                        maintain reserves during and at the end 
                        of the stress period on new business 
                        conducted during the first 5 years of 
                        the stress period reasonably related to 
                        the expected future losses on such 
                        business, consistent with generally 
                        accepted accounting principles and 
                        industry accounting practice.
                  [(C) Studies.--Within 1 year after 
                regulations are first issued under subsection 
                (e), the Director of the Congressional Budget 
                Office, and the Comptroller General of the 
                United States shall each submit to the 
                Committee on Banking, Housing, and Urban 
                Affairs of the Senate and the Committee on 
                Banking, Finance and Urban Affairs of the House 
                of Representatives a study of the advisability 
                and appropriate form of any new business 
                assumptions under subparagraph (B).
                  [(D) Effective date.--The provisions of 
                subparagraph (B) shall become effective 4 years 
                after regulations are first issued under 
                subsection (e).
          [(4) Other activities.--Losses or gains on other 
        activities, including interest rate and foreign 
        exchange hedging activities, shall be determined by the 
        Director, on the basis of available information, to be 
        consistent with the stress period.
  [(b) Considerations.--
          [(1) In general.--In establishing the risk-based 
        capital test under subsection (a), the Director shall 
        take into account appropriate distinctions among types 
        of mortgage products, differences in seasoning of 
        mortgages, and any other factors the Director considers 
        appropriate.
          [(2) Consistency.--Characteristics of the stress 
        period other than those specifically set forth in 
        subsection (a), such as prepayment experience and 
        dividend policies, will be those determined by the 
        Director, on the basis of available information, to be 
        most consistent with the stress period.
  [(c) Risk-Based Capital Level.--For purposes of this 
subtitle, the risk-based capital level for an enterprise shall 
be equal to the sum of the following amounts:
          [(1) Credit and interest rate risk.--The amount of 
        total capital determined by applying the risk-based 
        capital test under subsection (a) to the enterprise.
          [(2) Management and operations risk.--To provide for 
        management and operations risk, 30 percent of the 
        amount of total capital determined by applying the 
        risk-based capital test under subsection (a) to the 
        enterprise.
  [(d) Definitions.--For purposes of this section:
          [(1) Seasoning.--The term ``seasoning'' means the 
        change over time in the ratio of the unpaid principal 
        balance of a mortgage to the value of the property by 
        which such mortgage loan is secured, determined on an 
        annual basis by region, in accordance with the Constant 
        Quality Home Price Index published by the Secretary of 
        Commerce (or any index of similar quality, authority, 
        and public availability that is regularly used by the 
        Federal Government).
          [(2) Type of mortgage product.--The term ``type of 
        mortgage product'' means a classification of one or 
        more mortgage products, as established by the Director, 
        which have similar characteristics from each set of 
        characteristics under the following subparagraphs:
                  [(A) The property securing the mortgage is--
                          [(i) a residential property 
                        consisting of 1 to 4 dwelling units; or
                          [(ii) a residential property 
                        consisting of more than 4 dwelling 
                        units.
                  [(B) The interest rate on the mortgage is--
                          [(i) fixed; or
                          [(ii) adjustable.
                  [(C) The priority of the lien securing the 
                mortgage is--
                          [(i) first; or
                          [(ii) second or other.
                  [(D) The term of the mortgage is--
                          [(i) 1 to 15 years;
                          [(ii) 16 to 30 years; or
                          [(iii) more than 30 years.
                  [(E) The owner of the property is--
                          [(i) an owner-occupant; or
                          [(ii) an investor.
                  [(F) The unpaid principal balance of the 
                mortgage--
                          [(i) will amortize completely over 
                        the term of the mortgage and will not 
                        increase significantly at any time 
                        during the term of the mortgage;
                          [(ii) will not amortize completely 
                        over the term of the mortgage and will 
                        not increase significantly at any time 
                        during the term of the mortgage; or
                          [(iii) may increase significantly at 
                        some time during the term of the 
                        mortgage.
                  [(G) Any other characteristics of the 
                mortgage, as the Director may determine.
  [(e) Regulations.--
          [(1) Issuance.--The Director shall issue final 
        regulations establishing the risk-based capital test 
        under this section not later than the expiration of the 
        18-month period beginning on the date of the 
        appointment of the Director. Such regulations shall be 
        issued after notice and opportunity for public comment 
        pursuant to the provisions of section 553 of title 5, 
        United States Code, and shall take effect upon 
        issuance.
          [(2) Contents.--The regulations under this subsection 
        shall contain specific requirements, definitions, 
        methods, variables, and parameters used under the risk-
        based capital test and in implementing the test (such 
        as loan loss severity, float income, loan-to-value 
        ratios, taxes, yield curve slopes, default experience, 
        and prepayment rates). The regulations shall be 
        sufficiently specific to permit an individual other 
        than the Director to apply the test in the same manner 
        as the Director.
          [(3) Confidentiality of information.--Any person that 
        receives any book, record, or information from the 
        Director or an enterprise to enable the risk-based 
        capital test to be applied shall--
                  [(A) 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
                  [(B) be exempt from section 552 of title 5, 
                United States Code, with respect to the book, 
                record, or information.
  [(f) Availability of Model.--The Director shall provide 
copies of the statistical model or models used to implement the 
risk-based capital test under this section to the Secretary, 
the Board of Governors of the Federal Reserve System, the 
Director of the Office of Management and Budget, the 
Comptroller General of the United States, and the Director of 
the Congressional Budget Office. The Director shall make copies 
of such model or models available for public acquisition and 
may charge a reasonable fee for such copies.]

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

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.

SEC. 1362. MINIMUM CAPITAL LEVELS.

  (a) [In General] Enterprises.--For purposes of this subtitle, 
the minimum capital level for each enterprise shall be the sum 
of--
          (1) * * *

           *       *       *       *       *       *       *

  [(b) Transition.--Notwithstanding subsection (a), during the 
18-month period beginning upon the date of the enactment of 
this Act, the minimum capital level for each enterprise shall 
be the sum of--
          [(1) 2.25 percent of the aggregate on-balance sheet 
        assets of the enterprise, as determined in accordance 
        with generally accepted accounting principles;
          [(2) 0.40 percent of the unpaid principal balance of 
        outstanding mortgage-backed securities and 
        substantially equivalent instruments issued or 
        guaranteed by the enterprise that are not included in 
        paragraph (1); and
          [(3) 0.40 percent of other off-balance sheet 
        obligations of the enterprise not included in paragraph 
        (2) (excluding commitments in excess of 50 percent of 
        the average dollar amount of the commitments 
        outstanding each quarter over the preceding 4 
        quarters), except that the Director shall adjust such 
        percentage to reflect differences in the credit risk of 
        such obligations in relation to the instruments 
        included in paragraph (2).]
  (b) Federal Home Loan Banks.--For purposes of this subtitle, 
the minimum capital level for each Federal home loan bank shall 
be the minimum capital required to be maintained to comply with 
the leverage requirement for the bank established under section 
6(a)(2) of the Federal Home Loan Bank Act (12 U.S.C. 
1426(a)(2)).
  (c) Establishment of Revised Minimum Capital Levels.--
Notwithstanding subsections (a) and (b) and notwithstanding the 
capital classifications of the regulated entities, the Director 
may, by regulations issued under section 1319G, establish a 
minimum capital level for the enterprises, for the Federal home 
loan banks, or for both the enterprises and the banks, that is 
higher than the level specified in subsection (a) for the 
enterprises or the level specified in subsection (b) for the 
Federal home loan banks, to the extent needed to ensure that 
the regulated entities operate in a safe and sound manner.
  (d) Authority To Require Temporary Increase.--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.

SEC. 1363. CRITICAL CAPITAL LEVELS.

  [For] (a) Enterprises.--For purposes of this subtitle, the 
critical capital level for each enterprise shall be the sum 
of--
          (1) * * *

           *       *       *       *       *       *       *

  (b) Federal Home Loan Banks.--
          (1) In general.--For purposes of this subtitle, the 
        critical capital level for each Federal home loan bank 
        shall be such amount of capital as the Director shall, 
        by regulation require.
          (2) Consideration of other critical capital levels.--
        In establishing the critical capital level under 
        paragraph (1) for the Federal home loan banks, the 
        Director shall take due consideration of the critical 
        capital level established under subsection (a) for the 
        enterprises, with such modifications as the Director 
        determines to be appropriate to reflect the difference 
        in operations between the banks and the enterprises.

SEC. 1364. CAPITAL CLASSIFICATIONS.

  (a) [In General] Enterprises.--For purposes of this subtitle, 
the Director shall classify the enterprises according to the 
following capital classifications:
          (1) * * *

           *       *       *       *       *       *       *

  [(b) Discretionary Classification.--If at any time the 
Director determines in writing that an enterprise is engaging 
in conduct not approved by the Director that could result in a 
rapid depletion of core capital or that the value of the 
property subject to mortgages held or securitized by the 
enterprise has decreased significantly, the Director may 
classify the enterprise--
          [(1) as undercapitalized, if the enterprise is 
        otherwise classified as adequately capitalized;
          [(2) as significantly undercapitalized, if the 
        enterprise is otherwise classified as undercapitalized; 
        and
          [(3) as critically undercapitalized, if the 
        enterprise is otherwise classified as significantly 
        undercapitalized.]
  (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.
  [(c)] (d) Quarterly Determination.--The Director shall 
determine the capital classification of the [enterprises] 
regulated entities for purposes of this subtitle on not less 
than a quarterly basis (and as appropriate under subsection 
[(b)] (c)). [The first such determination shall be made during 
the 3-month period beginning on the appointment of the 
Director.]
  (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.
  [(d)] (f) Implementation.--Notwithstanding any other 
provision of this section, during the period beginning on the 
date of the enactment of this Act and ending upon the effective 
date of section 1365 (as provided in section 1365(c)), an 
enterprise shall be classified as adequately capitalized if the 
enterprise maintains an amount of core capital that is equal to 
or exceeds the minimum capital level for the enterprise under 
section 1362.

SEC. 1365. SUPERVISORY ACTIONS APPLICABLE TO UNDERCAPITALIZED 
                    [ENTERPRISES] REGULATED ENTITIES.

  (a) Mandatory Actions.--
          (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.
          [(1)] (2) Capital restoration plan.--[An enterprise] 
        A regulated entity that is classified as 
        undercapitalized shall, within the time period provided 
        in section 1369C (b) and (d), submit to the Director a 
        capital restoration plan that complies with section 
        1369C and carry out the plan after approval.
          [(2)] (3) Restriction on capital distributions.--[An 
        enterprise] A regulated entity that is classified as 
        undercapitalized may not make any capital distribution 
        that would result in [the enterprise] the regulated 
        entity being reclassified as significantly 
        undercapitalized or critically undercapitalized.
          (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.
  (b) Discretionary Reclassification [From Undercapitalized to 
Significantly Undercapitalized].--The Director may reclassify 
as significantly undercapitalized [an enterprise] a regulated 
entity that is classified as undercapitalized (and [the 
enterprise] the regulated entity shall be subject to the 
provisions of section 1366) if--
          (1) [the enterprise] the regulated entity does not 
        submit a capital restoration plan that is substantially 
        in compliance with section 1369C within the applicable 
        period or the Director does not approve the capital 
        restoration plan submitted by [the enterprise] the 
        regulated entity; or
          (2) the Director determines that [the enterprise] the 
        regulated entity has failed to make, in good faith, 
        reasonable efforts necessary to comply with the capital 
        restoration plan and fulfill the schedule for the plan 
        approved by the Director.
  [(c) Effective Date.--This section shall take effect upon the 
expiration of the 1-year period beginning on the date of the 
effectiveness of the regulations issued under section 1361(e) 
establishing the risk-based capital test.]
  (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. 1366. SUPERVISORY ACTIONS APPLICABLE TO SIGNIFICANTLY 
                    UNDERCAPITALIZED [ENTERPRISES] REGULATED ENTITIES.

  (a) Mandatory Supervisory Actions.--
          (1) Capital restoration plan.--[An enterprise] A 
        regulated entity that is classified as significantly 
        undercapitalized shall, within the time period under 
        section 1369C (b) and (d), submit to the Director a 
        capital restoration plan that complies with section 
        1369C and carry out the plan after approval.
          (2) Restrictions on capital distributions.--
                  (A) Prior approval.--[An enterprise] A 
                regulated entity that is classified as 
                significantly undercapitalized may not make any 
                capital distribution that would result in [the 
                enterprise] the regulated entity being 
                reclassified as critically undercapitalized. 
                [An enterprise] A regulated entity that is 
                classified as significantly undercapitalized 
                [enterprise] may not make any other capital 
                distribution unless the Director approves the 
                distribution.
                  (B) Standard for approval.--The Director may 
                approve a capital distribution by [an 
                enterprise] a regulated entity classified as 
                significantly undercapitalized only if the 
                Director determines that the distribution (i) 
                will enhance the ability of [the enterprise] 
                the regulated entity to meet the risk-based 
                capital level and the minimum capital level for 
                [the enterprise] the regulated entity promptly, 
                (ii) will contribute to the long-term financial 
                safety and soundness of [the enterprise] the 
                regulated entity, or (iii) is otherwise in the 
                public interest.
  (b) [Discretionary Supervisory Actions] Specific Actions.--In 
addition to any other actions taken by the Director (including 
actions under subsection (a)), the Director [may, at any time, 
take any] shall carry out this section by taking, at any time, 
one or more of the following actions with respect to [an 
enterprise] a regulated entity that is classified as 
significantly undercapitalized:
          (1) Limitation on increase in obligations.--Limit any 
        increase in, or order the reduction of, any obligations 
        of [the enterprise] the regulated entity, including 
        off-balance sheet obligations.
          (2) Limitation on growth.--Limit or prohibit the 
        growth of the assets of [the enterprise] the regulated 
        entity or require contraction of the assets of [the 
        enterprise] the regulated entity.
          (3) Acquisition of new capital.--Require [the 
        enterprise] the regulated entity to acquire new capital 
        in a form and amount determined by the Director.
          (4) Restriction of activities.--Require [the 
        enterprise] the regulated entity to terminate, reduce, 
        or modify any activity that the Director determines 
        creates excessive risk to [the enterprise] the 
        regulated entity.
          (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).
          [(5)] (6) Reclassification from significantly to 
        critically undercapitalized.--The Director may 
        reclassify as critically undercapitalized [an 
        enterprise] a regulated entity that is classified as 
        significantly undercapitalized (and [the enterprise] 
        the regulated entity shall be subject to the provisions 
        of section 1367) if--
                  (A) [the enterprise] the regulated entity 
                does not submit a capital restoration plan that 
                is substantially in compliance with section 
                1369C within the applicable period or the 
                Director does not approve the capital 
                restoration plan submitted by [the enterprise] 
                the regulated entity; or
                  (B) the Director determines that [the 
                enterprise] the regulated entity has failed to 
                make, in good faith, reasonable efforts 
                necessary to comply with the capital 
                restoration plan and fulfill the schedule for 
                the plan approved by the Director.
          [(6)] (7) Conservatorship.--Appoint a conservator for 
        [the enterprise] the regulated entity in accordance 
        with the provisions of [section 1369 (excluding 
        subsection (a) (1) and (2))] section 1367, but only if 
        the Director determines--
                  (A) that the amount of core capital of [the 
                enterprise] the regulated entity is less than 
                the minimum capital level established for [the 
                enterprise] the regulated entity under section 
                1362; and
                  (B) that alternative remedies available to 
                the Director under this title are not 
                satisfactory.
          (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.
  (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
          (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.
  [(c)] (d) Effective Date.--This section shall take effect 
upon the first classification of [the enterprises] the 
regulated entities within capital classifications that occurs 
under section 1364.

[SEC. 1367.  APPOINTMENT OF CONSERVATORS FOR CRITICALLY 
                    UNDERCAPITALIZED ENTERPRISES.

  [(a) Appointment.--
          [(1) In general.--Upon a determination and notice 
        under section 1368(d) that an enterprise is critically 
        undercapitalized and not later than 30 days after 
        providing notice under section 1369(a)(3), the Director 
        shall appoint a conservator for the enterprise in 
        accordance with the provisions of section 1369 
        (excluding subsections (a) (1) and (2)).
          [(2) Exception.--Notwithstanding paragraph (1), the 
        Director may determine not to appoint a conservator for 
        an enterprise classified as critically 
        undercapitalized, but only pursuant to a written 
        finding by the Director, with the written concurrence 
        of the Secretary of the Treasury, that--
                  [(A) the appointment of a conservator would 
                have serious adverse effects on economic 
                conditions of national financial markets or on 
                the financial stability of the housing finance 
                market; and
                  [(B) the public interest would be better 
                served by taking some other enforcement action 
                authorized under this title.
  [(b) Authority.--The Director shall have the authority to 
take any actions under sections 1365 and 1366 with respect to 
an enterprise under conservatorship.
  [(c) Approval of Activities.--
          [(1) Conservator.--The conservator of any enterprise 
        classified as critically undercapitalized may undertake 
        an activity subject to the approval of the Secretary 
        under section 1322 of this title only with the 
        additional approval of the Director.
          [(2) No conservator.--If the Director determines 
        under subsection (a)(2) not to appoint a conservator 
        for an enterprise classified as critically 
        undercapitalized, the provisions of section 1366 shall 
        apply with respect to the enterprise.
  [(d) Effective Date.--This section shall take effect upon the 
first classification of the enterprises within capital 
classifications that occurs under section 1364.]

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.
                  (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 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 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--
                                  (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 Act, 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;
                                  (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 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 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 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.

SEC. 1368. NOTICE OF CLASSIFICATION AND ENFORCEMENT ACTION.

  (a) Notice.--Before taking any action referred to in 
subsection (b), the Director shall provide to [the enterprise] 
the regulated entity written notice of the proposed action, 
which states the reasons for the proposed action and the 
information on which the proposed action is based.
  (b) Applicability.--The requirements of subsection (a) shall 
apply to the following actions:
          (1) Classification or reclassification of [an 
        enterprise] a regulated entity within a particular 
        capital classification under section 1364.

           *       *       *       *       *       *       *

  (c) Response Period.--
          (1) In general.--During the 30-day period beginning 
        on the date that [an enterprise] a regulated entity is 
        provided notice under subsection (a) of a proposed 
        action, [the enterprise] the regulated entity may 
        submit to the Director any information relevant to the 
        action that [the enterprise] the regulated entity 
        considers appropriate for consideration by the Director 
        in determining whether to take such action. The 
        Director may, at the discretion of the Director, hold 
        an informal administrative hearing to receive and 
        discuss such information and the proposed 
        determination.
          (2) Extended period.--The Director may extend the 
        period under paragraph (1) for good cause for not more 
        than 30 additional days.
          (3) Shortened period.--The Director may shorten the 
        period under paragraph (1) if the Director determines 
        that the condition of [the enterprise] the regulated 
        entity so requires or [the enterprise] the regulated 
        entity consents.
          (4) Failure to respond.--The failure of [an 
        enterprise] a regulated entity to provide information 
        during the response period under this subsection (as 
        extended or shortened) shall waive any right of [the 
        enterprise] the regulated entity to comment on the 
        proposed action of the Director.
  (d) Consideration of Information and Determination.--After 
the expiration of the response period under subsection (c) or 
upon receipt of information provided during such period by [the 
enterprise] the regulated entity, whichever occurs earlier, the 
Director shall determine whether to take the action proposed, 
taking into consideration any relevant information submitted by 
[the enterprise] the regulated entity during the response 
period. The Director shall provide written notice of a 
determination to take action and the reasons for such 
determination to [the enterprise] the regulated entity, the 
Committee on [Banking, Finance and Urban Affairs] Financial 
Services of the House of Representatives, and the Committee on 
Banking, Housing, and Urban Affairs of the Senate. Such notice 
shall respond to any information submitted during the response 
period.
  (e) Effective Date of Actions.--An action referred to in 
subsection (b) shall take effect upon receipt by [the 
enterprise] the regulated entity of notice of the determination 
of the Director under subsection (d), unless otherwise provided 
in such notice.

[SEC. 1369. APPOINTMENT OF CONSERVATORS.

  [(a) Appointment.--
          [(1) Discretionary authority.--The Director may, 
        after providing notice under paragraph (3), appoint a 
        conservator for an enterprise upon a determination in 
        writing--
                  [(A) that alternative remedies available to 
                the Director under this title are not 
                satisfactory; and
                  [(B) that--
                          [(i) the enterprise is not likely to 
                        pay its obligations in the normal 
                        course of business;
                          [(ii) the enterprise has incurred or 
                        is reasonably likely to incur losses 
                        that would deplete substantially all of 
                        its core capital and it is unlikely 
                        that the enterprise will replenish its 
                        core capital within a reasonable 
                        period;
                          [(iii) the enterprise has concealed 
                        or is concealing books, papers, 
                        records, or assets of the enterprise 
                        that are material to the discharge of 
                        the Director's responsibilities under 
                        this subtitle, or has refused or is 
                        refusing to submit such books, papers, 
                        records, or information regarding the 
                        affairs of the enterprise for 
                        inspection to the Director upon 
                        request; or
                          [(iv) the enterprise has willfully 
                        violated, or is willfully violating, a 
                        final cease-and-desist order under 
                        section 1371.
          [(2) Consent of enterprise.--Notwithstanding 
        paragraph (1), the Director may appoint a conservator 
        for an enterprise if the enterprise, by an affirmative 
        vote of a majority of the members of its board of 
        directors or by an affirmative vote of a majority of 
        its shareholders, consents to such appointment.
          [(3) Notice.--Upon making a determination under 
        paragraph (1) of this subsection or under section 1366 
        or 1367 to appoint a conservator for an enterprise, or 
        upon consent of the enterprise under paragraph (2) to 
        such an appointment, the Director shall provide written 
        notice to the enterprise, the Committee on Banking, 
        Finance and Urban Affairs of the House of 
        Representatives, and the Committee on Banking, Housing, 
        and Urban Affairs of the Senate--
                  [(A) that a conservator will be appointed for 
                the enterprise;
                  [(B) stating the reasons for the appointment 
                of the conservator; and
                  [(C) identifying the person or governmental 
                agency that the Director intends to appoint as 
                conservator.
          [(4) Qualifications.--The conservator shall be--
                  [(A) the Director or any other governmental 
                agency; or
                  [(B) any person that--
                          [(i) has no claim against, or 
                        financial interest in, the enterprise 
                        or other basis for a conflict of 
                        interest; and
                          [(ii) has the financial and 
                        management expertise necessary to 
                        direct the operations and affairs of 
                        the enterprise.
  [(b) Judicial Review.--
          [(1) Timing and jurisdiction.--Except as provided in 
        paragraph (2), an enterprise for which a conservator is 
        appointed (pursuant to this section or section 1366 or 
        1367) may bring an action in the United States District 
        Court for the District of Columbia for an order 
        requiring the Director to terminate the appointment of 
        the conservator. The court, upon the merits, shall 
        dismiss such action or shall direct the Director to 
        terminate the appointment of the conservator. Such an 
        action may be commenced only during the 20-day period 
        beginning upon the appointment of the conservator.
          [(2) Consensual appointments.--Appointment of a 
        conservator pursuant to consent of the enterprise under 
        subsection (a)(2) shall not be subject to judicial 
        review under this subsection.
          [(3) Standard of review.--A decision of the Director 
        to appoint a conservator may be set aside under this 
        subsection only if the court finds that the decision 
        was arbitrary, capricious, an abuse of discretion, or 
        otherwise not in accordance with applicable laws.
          [(4) Limitation on jurisdiction.--Except as otherwise 
        provided in this subsection, no court may take any 
        action regarding the removal of a conservator or 
        otherwise restrain or affect the exercise of powers or 
        functions of a conservator.
  [(c) Replacement.--The Director may, without notice or 
hearing, replace a conservator with another conservator. Such 
replacement shall not affect the right of the enterprise under 
subsection (b) to obtain judicial review of the decision of the 
Director to appoint a conservator.
  [(d) Examinations.--The Director may examine and supervise 
any enterprise in conservatorship during the period in which 
the enterprise continues to operate as a going concern.
  [(e) Termination.--
          [(1) Discretionary.--At any time the Director 
        determines that termination of a conservatorship 
        pursuant to an appointment under subsection (a) is in 
        the public interest and may safely be accomplished, the 
        Director may terminate the conservatorship and permit 
        the enterprise to resume the transaction of its 
        business subject to such terms, conditions, and 
        limitations as the Director may prescribe.
          [(2) Mandatory.--The Director shall terminate a 
        conservatorship initiated pursuant to section 1366 or 
        1367 upon a determination by the Director that the 
        enterprise has maintained an amount of core capital 
        that is equal to or exceeds the minimum capital level 
        for the enterprise established under section 1362, and 
        may by written order prescribe such terms, conditions, 
        and limitations on the enterprise as the Director 
        considers appropriate.
          [(3) Terms.--Any terms, conditions, and limitations 
        imposed by the Director upon termination of a 
        conservatorship shall be enforceable and reviewable 
        under the provisions of sections 1374 and 1375, to the 
        same extent as any cease-and-desist order issued 
        pursuant to subtitle C.

[SEC. 1369A. POWERS OF CONSERVATORS.

  [(a) General Powers.--A conservator shall have all the powers 
of the shareholders, directors, and officers of the enterprise 
under conservatorship and may operate the enterprise in the 
name of the enterprise, unless the Director provides otherwise.
  [(b) Additional Power.--A conservator may avoid any security 
interest taken by a creditor with the intent to hinder, delay, 
or defraud the enterprise or the creditors of the enterprise.
  [(c) Limitations by Director.--A conservator shall be subject 
to any rules, regulations, and orders issued from time to time 
by the Director and, except as otherwise specifically provided 
in such rules, regulations, or orders or in section 1369B, 
shall have the same rights and privileges and be subject to the 
same duties, restrictions, penalties, conditions, and 
limitations applicable to directors, officers, or employees of 
the enterprise.
  [(d) Enforcement of Contracts.--
          [(1) In general.--A conservator may enforce any 
        contract described in paragraph (2), notwithstanding 
        any provision of the contract providing for the 
        termination, default, acceleration, or other exercise 
        of rights upon, or solely by reason of, the insolvency 
        of the enterprise or the appointment of a conservator.
          [(2) Enforceable contracts.--Any contract that is 
        within a class of contracts shall be enforceable under 
        paragraph (1) if the Director--
                  [(A) determines that the continued 
                enforceability of such class of contracts is 
                necessary to achieve the purpose of the 
                conservatorship; and
                  [(B) specifically provides for the 
                enforceability of such class of contracts in a 
                regulation or order, issued for the purpose of 
                this subsection, which describes such class.
          [(3) Applicability.--This subsection and any 
        regulation or order issued under this subsection shall 
        apply only to contracts entered into, modified, 
        extended, or renewed after the effective date of the 
        regulation or order.
  [(e) Stays.--
          [(1) In general.--Not later than 45 days after 
        appointment pursuant to section 1366, 1367, or 1369, or 
        45 days after receipt of actual notice of an action or 
        proceeding that is pending at the time of appointment, 
        a conservator may request that any judicial action or 
        proceeding to which the conservator or the enterprise 
        is or may become a party be stayed for a period not 
        exceeding 45 days after the request. Upon petition, the 
        court shall grant such stay as to all parties.
          [(2) Federal agency as conservator.--In any case in 
        which the conservator appointed for an enterprise is a 
        Federal agency or an officer or employee of the Federal 
        Government, the conservator may make a request for a 
        stay under paragraph (1) only with the prior consent of 
        the Attorney General and subject to the direction and 
        control of the Attorney General.
  [(f) Payment of Creditors.--The Director may require a 
conservator to set aside and make available for payment to 
creditors any amounts that the Director determines may safely 
be used for such purpose. All creditors who are similarly 
situated shall be treated in a similar manner.
  [(g) Compensation of Conservator and Employees.--A 
conservator and professional employees (other than Federal 
employees) appointed to represent or assist the conservator may 
be compensated for activities conducted as conservator. 
Compensation may not be provided in amounts greater than the 
compensation paid to employees of the Federal Government for 
similar services, except that the Director may provide for 
compensation at higher rates (but not in excess of rates 
prevailing in the private sector), if the Director determines 
that compensation at higher rates is necessary in order to 
recruit and retain competent personnel.
  [(h) Expenses.--All expenses of a conservatorship pursuant to 
this section (including compensation pursuant to subsection 
(f)) shall be paid by the enterprise under conservatorship and 
shall be secured by a lien on the enterprise, which shall have 
priority over any other lien.
  [(i) Conflicts of Interest and Financial Disclosure.--A 
conservator shall be subject to any laws and regulations 
relating to conflicts of interest and financial disclosure that 
apply to employees of the Office.

[SEC. 1369B. LIABILITY PROTECTION FOR CONSERVATORS.

  [(a) Federal Agencies and Employees.--In any case in which a 
conservator appointed under this subtitle is a Federal agency 
or an officer or employee of the Federal Government, the 
provisions of chapters 161 and 171 of title 28, United States 
Code, shall apply with respect to the liability of the 
conservator for acts or omissions performed pursuant to and in 
the course of the duties and responsibilities of the 
conservatorship.
  [(b) Other Conservators.--In any case where the conservator 
is not a conservator described in subsection (a), the 
conservator shall not be personally liable for damages in tort 
or otherwise for acts or omissions performed pursuant to and in 
the course of the duties and responsibilities of the 
conservatorship, unless such acts or omissions constitute gross 
negligence or any form of intentional tortious conduct or 
criminal conduct.
  [(c) Indemnification.--The Director, with the approval of the 
Attorney General, may indemnify the conservator on such terms 
as the Director considers appropriate.]

SEC. 1369C. CAPITAL RESTORATION PLANS.

  (a) Contents.--Each capital restoration plan submitted under 
this subtitle shall set forth a feasible plan for restoring the 
core capital of [the enterprise] the regulated entity subject 
to the plan to an amount not less than the minimum capital 
level for [the enterprise] the regulated entity and for 
restoring the total capital of [the enterprise] the regulated 
entity to an amount not less than the risk-based capital level 
for [the enterprise] the regulated entity. Each capital 
restoration plan shall--
          (1) specify the level of capital [the enterprise] the 
        regulated entity will achieve and maintain;
          (2) describe the actions that [the enterprise] the 
        regulated entity will take to become classified as 
        adequately capitalized;
          (3) establish a schedule for completing the actions 
        set forth in the plan;
          (4) specify the types and levels of [activities 
        (including existing and new programs)] activities, 
        services, undertakings, and offerings (including 
        existing and new products (as such term is defined in 
        section 1321(f)) in which [the enterprise] the 
        regulated entity will engage during the term of the 
        plan; and
          (5) describe the actions that [the enterprise] the 
        regulated entity will take to comply with any mandatory 
        and discretionary requirements imposed under this 
        subtitle.
  (b) Deadlines for Submission.--The Director shall, by 
regulation, establish a deadline for submission of a capital 
restoration plan, which may not be more than 45 days after [the 
enterprise] the regulated entity is notified in writing that a 
plan is required. The regulations shall provide that the 
Director may extend the deadline to the extent that the 
Director determines it necessary. Any extension of the deadline 
shall be in writing and for a time certain.
  (c) Approval.--The Director shall review each capital 
restoration plan submitted under this section and, not later 
than 30 days after submission of the plan, approve or 
disapprove the plan. The Director may extend the period for 
approval or disapproval for any plan for a single additional 
30-day period if the Director determines it necessary. The 
Director shall provide written notice to [any enterprise] any 
regulated entity submitting a plan of the approval or 
disapproval of the plan (which shall include the reasons for 
any disapproval of the plan) and of any extension of the period 
for approval or disapproval.
  (d) Resubmission.--If the Director disapproves the initial 
capital restoration plan submitted by [the enterprise] the 
regulated entity, [the enterprise] the regulated entity shall 
submit an amended plan acceptable to the Director within 30 
days or such longer period that the Director determines is in 
the public interest.

SEC. 1369D. JUDICIAL REVIEW OF DIRECTOR ACTION.

  (a) Jurisdiction.--
          (1) Filing of petition.--[An enterprise] A regulated 
        entity that is not classified as critically 
        undercapitalized and is the subject of a classification 
        under section 1364 or a discretionary supervisory 
        action taken under this subtitle by the Director (other 
        than action to appoint a conservator under [section 
        1366 or 1367 or action under section 1369)] section 
        1367) may obtain review of the classification or action 
        by filing, within 10 days after receiving written 
        notice of the Director's action, a written petition 
        requesting that the classification or action of the 
        Director be modified, terminated, or set aside.

           *       *       *       *       *       *       *

  (c) Unavailability of Stay.--The commencement of proceedings 
for judicial review pursuant to this section shall not operate 
as a stay of any action taken by the Director. Pending judicial 
review of the action, the court shall not have jurisdiction to 
stay, enjoin, or otherwise delay any supervisory action taken 
by the Director with respect to [an enterprise] a regulated 
entity that is classified as significantly or critically 
undercapitalized or any action of the Director that results in 
the classification of [an enterprise] a regulated entity as 
significantly or critically undercapitalized.
  (d) Limitation on Jurisdiction.--Except as provided in this 
section, no court shall have jurisdiction to affect, by 
injunction or otherwise, the issuance or effectiveness of any 
classification or action of the Director under this subtitle 
(other than appointment of a conservator under [section 1366 or 
1367 or action under section 1369)] section 1367) or to review, 
modify, suspend, terminate, or set aside such classification or 
action.

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 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 determines that such action is 
consistent with the purposes of this Act or any of the 
authorizing statutes.

                   Subtitle C--Enforcement Provisions

SEC. 1371. CEASE-AND-DESIST PROCEEDINGS.

  [(a) Grounds for Issuance Against Adequately Capitalized 
Enterprises.--The Director may issue and serve a notice of 
charges under this section upon an enterprise that is 
classified (for purposes of subtitle B) as adequately 
capitalized or upon any executive officer or director of such 
an enterprise, if in the determination of the Director, the 
enterprise, executive officer, or director is engaging or has 
engaged, or the Director has reasonable cause to believe that 
the enterprise, executive officer, or director is about to 
engage, in--
          [(1) any conduct that threatens to cause a 
        significant depletion of the core capital of the 
        enterprise;
          [(2) any conduct or violation that may result in the 
        issuance of an order described in subsection (d)(1); or
          [(3) any conduct that violates--
                  [(A) any provision of this title, the Federal 
                National Mortgage Association Charter Act, the 
                Federal Home Loan Mortgage Corporation Act, or 
                any order, rule, or regulation under any such 
                title or Act, except that the Director may not 
                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, or with 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; or
                  [(B) any written agreement entered into by 
                the enterprise with the Director.
  [(b) Grounds for Issuance Against Undercapitalized, 
Significantly Undercapitalized, and Critically Undercapitalized 
Enterprises.--The Director may issue and serve a notice of 
charges under this section upon an enterprise classified (for 
purposes of subtitle B) as undercapitalized, significantly 
undercapitalized, or critically undercapitalized, or any 
executive officer or director of any such enterprise, if in the 
determination of the Director the enterprise, executive 
officer, or director is engaging or has engaged, or the 
Director has reasonable cause to believe that the enterprise, 
executive officer, or director is about to engage, in--
          [(1) any conduct likely to result in a material 
        depletion of the core capital of the enterprise, or
          [(2) any conduct or violation described in paragraph 
        (2) or (3) of subsection (a),
except that the Director may not 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, or 
with 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.]
  (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.
  (c) Procedure.--
          (1) * * *
          (2) Issuance of order.--If the Director finds on the 
        record made at such hearing that any conduct or 
        violation specified in the notice of charges has been 
        established (or [the enterprise] the regulated entity 
        consents pursuant to section 1373(a)(4)), the Director 
        may issue and serve upon the [enterprise, executive 
        officer, or director] regulated entity or regulated 
        entity-affiliated party an order requiring such party 
        to cease and desist from any such conduct or violation 
        and to take affirmative action to correct or remedy the 
        conditions resulting from any such conduct or 
        violation.
  (d) Affirmative Action To Correct Conditions Resulting From 
Violations or Activities.--The authority under this section and 
section 1372 to issue any order requiring an [enterprise, 
executive officer, or director] regulated entity or regulated 
entity-affiliated party to take affirmative action to correct 
or remedy any condition resulting from any conduct or violation 
with respect to which such order is issued includes the 
authority--
          (1) to require [an executive officer or a director] a 
        regulated entity affiliated party to make restitution 
        to, or provide reimbursement (including reimbursement 
        of compensation under section 1318), indemnification, 
        or guarantee against loss to [the enterprise] the 
        regulated entity to the extent that such person--
                  (A) was unjustly enriched in connection with 
                such conduct or violation; or
                  (B) engaged in conduct or a violation that 
                would subject such person to a civil penalty 
                pursuant to section 1376(b)(3);
          (2) to require [an enterprise] a regulated entity to 
        seek restitution, or to obtain reimbursement, 
        indemnification, or guarantee against loss;
          (3) to restrict the growth of [the enterprise] the 
        regulated entity;
          (4) to require [the enterprise] the regulated entity 
        to dispose of any asset involved;
          (5) to require [the enterprise] the regulated entity 
        to rescind agreements or contracts;
          (6) to require [the enterprise] the regulated entity 
        to employ qualified officers or employees (who may be 
        subject to approval by the Director at the direction of 
        the Director); [and]
          (7) to effect an attachment on a regulated entity or 
        regulated entity-affiliated party subject to an order 
        under this section or section 1372; and
          [(7)] (8) to require [the enterprise] the regulated 
        entity to take such other action as the Director 
        determines appropriate.
  (e) Authority To Limit Activities.--The authority to issue an 
order under this section or section 1372 includes the authority 
to place limitations on the activities or functions of [the 
enterprise] the regulated entity or any executive officer or 
director of [the enterprise] the regulated entity.
  (f) Effective Date.--An order under this section shall become 
effective upon the expiration of the 30-day period beginning on 
the service of the order upon [the enterprise] the regulated 
entity, executive officer, or director concerned (except in the 
case of an order issued upon consent, which shall become 
effective at the time specified therein), and shall remain 
effective and enforceable as provided in the order, except to 
the extent that the order is stayed, modified, terminated, or 
set aside by action of the Director or otherwise, as provided 
in this subtitle.

SEC. 1372. TEMPORARY CEASE-AND-DESIST ORDERS.

  [(a) Grounds for Issuance and Scope.--Whenever the Director 
determines that any conduct or violation, or threatened conduct 
or violation, specified in the notice of charges served upon 
the enterprise, executive officer, or director pursuant to 
section 1371 (a) or (b), or the continuation thereof, is 
likely--
          [(1) to cause insolvency,
          [(2) to cause a significant depletion of the core 
        capital of the enterprise, or
          [(3) otherwise to cause irreparable harm to the 
        enterprise,
prior to the completion of the proceedings conducted pursuant 
to section 1371(c), the Director may issue a temporary order 
requiring the enterprise, executive officer, or director to 
cease and desist from any such conduct or violation and to take 
affirmative action to prevent or remedy such insolvency, 
depletion, or harm pending completion of such proceedings. Such 
order may include any requirement authorized under section 
1371(d).]
  (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 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).
  (b) Effective Date.--An order issued pursuant to subsection 
(a) shall become effective upon service upon the [enterprise, 
executive officer, or director] regulated entity or regulated 
entity-affiliated party and, unless set aside, limited, or 
suspended by a court in proceedings pursuant to subsection (d), 
shall remain in effect and enforceable pending the completion 
of the proceedings pursuant to such notice and shall remain 
effective until the Director dismisses the charges specified in 
the notice or until superseded by a cease-and-desist order 
issued pursuant to section 1371.
  (c) Incomplete or Inaccurate Records.--
          (1) Temporary order.--If a notice of charges served 
        under section 1371 (a) or (b) specifies on the basis of 
        particular facts and circumstances that the books and 
        records of [the enterprise] the regulated entity served 
        are so incomplete or inaccurate that the Director is 
        unable, through the normal supervisory process, to 
        determine the financial condition of [the enterprise] 
        the regulated entity or the details or the purpose of 
        any transaction or transactions that may have a 
        material effect on the financial condition of [that 
        enterprise] that regulated entity, the Director may 
        issue a temporary order requiring--
                  (A) * * *

           *       *       *       *       *       *       *

          (2) Effective period.--Any temporary order issued 
        under paragraph (1)--
                  (A) shall become effective upon service; and
                  (B) unless set aside, limited, or suspended 
                by a court in proceedings pursuant to 
                subsection (d), shall remain in effect and 
                enforceable until the earlier of--
                          (i) the completion of the proceeding 
                        initiated under section 1371 in 
                        connection with the notice of charges; 
                        or
                          (ii) the date the Director 
                        determines, by examination or 
                        otherwise, that the books and records 
                        of [the enterprise] the regulated 
                        entity are accurate and reflect the 
                        financial condition of [the enterprise] 
                        the regulated entity.
  (d) Judicial Review.--[An enterprise, executive officer, or 
director] A regulated entity or regulated entity-affiliated 
party that has been served with a temporary order pursuant to 
this section may apply to the United States District Court for 
the District of Columbia within 10 days after such service for 
an injunction setting aside, limiting, or suspending the 
enforcement, operation, or effectiveness of the order pending 
the completion of the administrative proceedings pursuant to 
the notice of charges served upon [the enterprise, executive 
officer, or director] the regulated entity or regulated entity-
affiliated party under section 1371 (a) or (b). Such court 
shall have jurisdiction to issue such injunction.
  [(e) Enforcement by Attorney General.--In the case of 
violation or threatened violation of, or failure to obey, a 
temporary order issued pursuant to this section, the Director 
may request the Attorney General of the United States to bring 
an action in the United States District Court for the District 
of Columbia for an injunction to enforce such order or may, 
under the direction and control of the Attorney General, bring 
such an action. If the court finds any such violation, 
threatened violation, or failure to obey, the court shall issue 
such injunction.]
  (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. 1375. ENFORCEMENT AND JURISDICTION.

  [(a) Enforcement.--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 for the 
enforcement of any effective notice or order issued under this 
subtitle or subtitle B or may, under the direction and control 
of the Attorney General, bring such an action. Such court shall 
have jurisdiction and power to order and require compliance 
herewith.]
  (a) Enforcement.--The Director may, in the discretion of the 
Director, apply to the United States District Court for the 
District of Columbia, or the United States district court 
within the jurisdiction of which the headquarters of the 
regulated entity is located, for the enforcement of any 
effective and outstanding notice or order issued under this 
subtitle or subtitle B, or request that the Attorney General of 
the United States bring such an action. Such court shall have 
jurisdiction and power to order and require compliance with 
such notice or order.
  (b) Limitation on Jurisdiction.--Except as otherwise provided 
in this subtitle and sections 1369 and 1369D, no court shall 
have jurisdiction to affect, by injunction or otherwise, the 
issuance or enforcement of any notice or order under section 
1371, 1372, [or 1376] 1376, or 1377, or subtitle B, or to 
review, modify, suspend, terminate, or set aside any such 
notice or order.

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. 1376. CIVIL MONEY PENALTIES.

  (a) In General.--The Director may impose a civil money 
penalty in accordance with this section on [any enterprise, or 
any executive officer or director] any regulated entity, or any 
regulated-entity affiliated party of [any enterprise] any 
regulated entity, that--
          (1) violates any provision of this title, [the 
        Federal National Mortgage Association Charter Act, the 
        Federal Home Loan Mortgage Corporation Act] any 
        provision of any of the authorizing statutes, or any 
        order, rule, or regulation under any such title [or 
        Act] or statute, except that the Director may not 
        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, or with 
        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, or paragraph (5) or 
        (12) of section 10(j) of the Federal Home Loan Bank 
        Act;
          (2) violates any final or temporary order issued 
        pursuant to section 1365, 1366, 1371, or 1372;
          (3) violates any written agreement between [the 
        enterprise] the regulated entity and the Director; or
          (4) engages in any conduct that causes or is likely 
        to cause a loss to [the enterprise] the regulated 
        entity.
  [(b) Amount of Penalty.--
          [(1) First tier.--The Director may impose a penalty 
        on an enterprise for any violation described in 
        paragraphs (1) through (3) of subsection (a). The 
        amount of a penalty under this paragraph shall not 
        exceed $5,000 for each day that a violation continues.
          [(2) Second tier.--The Director may impose a penalty 
        on an executive officer or director in an amount not to 
        exceed $10,000, or on an enterprise in an amount not to 
        exceed $25,000, for each day that a violation or 
        conduct described in subsection (a) continues, if the 
        Director finds that the violation or conduct--
                  [(A) is part of a pattern of misconduct; or
                  [(B) involved recklessness and caused or 
                would be likely to cause a material loss to the 
                enterprise.
          [(3) Third tier.--The Director may impose a penalty 
        on an executive officer or director in an amount not to 
        exceed $100,000, or on an enterprise in an amount not 
        to exceed $1,000,000, for each day that a violation or 
        conduct described in subsection (a) continues, if the 
        Director finds that the violation or conduct was 
        knowing and caused or would be likely to cause a 
        substantial loss to the enterprise.]
  (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.
  (c) Procedures.--
          (1) Establishment.--The Director shall establish 
        standards and procedures governing the imposition of 
        civil money penalties under subsections (a) and (b). 
        Such standards and procedures--
                  (A) shall provide for the Director to notify 
                [the enterprise] the regulated entity in 
                writing of the Director's determination to 
                impose the penalty, which shall be made on the 
                record;
                  (B) shall provide for the imposition of a 
                penalty only after the [enterprise, executive 
                officer, or director] regulated entity or 
                regulated entity-affiliated party has been 
                given an opportunity for a hearing on the 
                record pursuant to section 1373; and
                  (C) may provide for review by the Director of 
                any determination or order, or interlocutory 
                ruling, arising from a hearing.
          (2) Factors in determining amount of penalty.--In 
        determining the amount of a penalty under this section, 
        the Director shall give consideration to such factors 
        as the gravity of the violation, any history of prior 
        violations, the effect of the penalty on the safety and 
        soundness of [the enterprise] the regulated entity, any 
        injury to the public, any benefits received, and 
        deterrence of future violations, and any other factors 
        the Director may determine by regulation to be 
        appropriate.
          (3) Review of imposition of penalty.--The order of 
        the Director imposing a penalty under this section 
        shall not be subject to review, except as provided in 
        section 1374.
  (d) Action To Collect Penalty.--[If an enterprise, executive 
officer, or director 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 
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, 
executive officer, or director and such other relief as may be 
available, or may, under the direction and control of the 
Attorney General, bring such an action.] 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. The monetary judgment may, 
in the discretion of the court, include any attorneys fees and 
other expenses incurred by the United States in connection with 
the action. In an action under this subsection, the validity 
and appropriateness of the order of the Director imposing the 
penalty shall not be subject to review.

           *       *       *       *       *       *       *

  (g) Prohibition of Reimbursement or Indemnification.--[An 
enterprise] A regulated entity may not reimburse or indemnify 
any individual for any penalty imposed under [subsection 
(b)(3)] this section, unless authorized by the Director by 
rule, regulation, or order.

           *       *       *       *       *       *       *


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;
                          (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 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.

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. [1377] 1379. NOTICE AFTER SEPARATION FROM SERVICE.

  The resignation, termination of employment or participation, 
or separation of a director or executive officer of [an 
enterprise] a regulated entity, or of a regulated entity-
affiliated party, shall not affect the jurisdiction and 
authority of the Director to issue any notice and proceed under 
this subtitle against any [such director or executive officer] 
such director, executive officer, or regulated entity-
affiliated party, if such notice is served before the end of 
the 2-year period beginning on the date [such director or 
executive officer] such director, executive officer, or 
regulated entity-affiliated party ceases to be associated with 
[the enterprise] the regulated entity.

SEC. [1378] 1379A. PRIVATE RIGHTS OF ACTION.

  This title and the amendments made by this title shall not 
create any private right of action on behalf of any person 
against [an enterprise] a regulated entity, or any director or 
executive officer of [an enterprise,] a regulated entity, or 
against a regulated entity-affiliated party, or impair any 
existing private right of action under other applicable law.

SEC. [1379] 1379B. PUBLIC DISCLOSURE OF FINAL ORDERS AND AGREEMENTS.

  (a) * * *

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *


SEC. [1379A] 1379C. NOTICE OF SERVICE.

  Any service required or authorized to be made by the Director 
under this subtitle may be made by registered mail, or in such 
other manner reasonably calculated to give actual notice as the 
Director may by regulation or otherwise provide.

SEC. [1379B] 1379D. SUBPOENA AUTHORITY.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Enforcement.--The Director may [request the Attorney 
General of the United States to], in the discretion of the 
Director, bring an action in the United States district court 
for the judicial district in which such proceeding is being 
conducted, or where the witness resides or conducts business, 
or the United States District Court for the District of 
Columbia, or request that the Attorney General of the United 
States bring such an action, for enforcement of any subpoena or 
subpoena duces tecum issued pursuant to this section [or may, 
under the direction and control of the Attorney General, bring 
such an action]. Such courts shall have jurisdiction and power 
to order and require compliance therewith.
  (d) Fees and Expenses.--Witnesses subpoenaed under this 
section shall be paid the same fees and mileage that are paid 
witnesses in the district courts of the United States. Any 
court having jurisdiction of any proceeding instituted under 
this section by [an enterprise] a regulated entity may allow to 
any such party such reasonable expenses and attorneys fees as 
the court deems just and proper. Such expenses and fees shall 
be paid by [the enterprise] the regulated entity or from its 
assets.

         Subtitle D--Amendments to Charter Acts of Enterprises

          * * * * * * *

[SEC. 1383. IMPLEMENTATION.

  [(a) In General.--The Secretary of Housing and Urban 
Development and the Director, as appropriate, shall issue any 
final regulations necessary to implement the amendments made by 
this subtitle not later than the expiration of the 18-month 
period beginning on the date of the enactment of this Act.
  [(b) Notice and Comment.--The regulations under this section 
shall be issued after notice and opportunity for public comment 
pursuant to the provisions of section 553 of title 5, United 
States Code.]
          * * * * * * *
                              ----------                              


                        ACT OF OCTOBER 28, 1974

                          (Public Law 93-495)
   AN ACT To increase deposit insurance from $20,000 to $40,000, to 
    provide full insurance for public unit deposits of $100,000 per 
    account, to establish a National Commission on Electronic Fund 
                   Transfers, and for other purposes.

TITLE I--AMENDMENTS TO AND EXTENSIONS OF PROVISIONS OF LAW RELATING TO 
             FEDERAL REGULATION OF DEPOSITORY INSTITUTIONS

          * * * * * * *
             independence of financial regulatory agencies
Sec. 111. No officer or agency of the United States shall have 
any authority to require the Securities and Exchange 
Commission, the Board of Governors of the Federal Reserve 
System, the Federal Deposit Insurance Corporation, the 
Comptroller of the Currency, the Director of the Office of 
Thrift Supervision, [the Federal Housing Finance Board] the 
Director of the Federal Housing Finance Agency, or the National 
Credit Union Administration to submit legislative 
recommendations, or testimony, or comments on legislation, to 
any officer or agency of the United States for approval, 
comments, or review, prior to the submission of such 
recommendations, testimony, or comments to the Congress if such 
recommendations, testimony, or comments to the Congress include 
a statement indicating that the views expressed therein are 
those of the agency submitting them and do not necessarily 
represent the views of the President.
          * * * * * * *
                              ----------                              


                       FEDERAL HOME LOAN BANK ACT

                              definitions
  Sec. 2. As used in this Act--
          [(1) Board.--The terms ``Finance Board'' and 
        ``Board'' mean the Federal Housing Finance Board 
        established under section 2A.]
          [(2)] (1)(A) Bank.--The term ``Federal Home Loan 
        Bank'' or ``Bank'' means a bank established under the 
        authority of the Federal Home Loan Bank Act.
          (B) Bank system.--The term ``Federal Home Loan Bank 
        System'' means the Federal Home Loan Banks under the 
        supervision of [the Board] the Director.
          [(3)] (2) State.--The term ``State'', in addition to 
        the States of the United States, includes the District 
        of Columbia, Guam, Puerto Rico, the United States 
        Virgin Islands, American Samoa, and the Commonwealth of 
        the Northern Mariana Islands.
  [(4)] (3) The term ``member'' means any institution which has 
subscribed for the stock of a Federal Home Loan Bank.
  [(5)] (4) The term ``home mortgage loan'' means a loan made 
by a member upon the security of a home mortgage.
  [(6)] (5) The term ``home mortgage'' means a mortgage upon 
real estate, in fee simple, or on a leasehold (1) under a lease 
for not less than ninety-nine years which is renewable or (2) 
under a lease having a period of not less than fifty years to 
run from the date the mortgage was executed, upon which is 
located, or which comprises or includes, one or more homes or 
other dwelling units, all of which may be defined by [the 
Board] the Director, and shall include, in addition to first 
mortgages, such classes of first liens as are commonly given to 
secure advances on real estate by institutions authorized under 
this Act to become members, under the laws of the State in 
which the real estate is located, together with the credit 
instruments, if any, secured thereby.
  [(7)] (6) The term ``unpaid principal,'' when used in respect 
of a loan secured by a home mortgage means the principal 
thereof less the sum of (1) payments made on such principal, 
and (2) in cases where shares or stock are pledged as security 
for the loan, the payments made on such shares or stock plus 
earnings or dividends apportioned or credited thereon.
  [(8)] (7) An ``amortized'' or ``installment'' home mortgage 
loan shall, for the purposes of this Act, be a home mortgage 
loan to be repaid or liquidated in not less than eight years by 
means of regular weekly, monthly, or quarterly payments made 
directly in reduction of the debt or upon stock or shares 
pledged as collateral for the repayment of such loan.
          [(9)] (8) Savings association.--The term ``savings 
        association'' has the meaning given to such term in 
        section 3 of the Federal Deposit Insurance Act.
          [(10) Chairperson.--The term ``Chairperson'' means 
        the Chairperson of the Board.
          [(11) Secretary.--The term ``Secretary'' means the 
        Secretary of Housing and Urban Development.]
          [(12)] (9) Insured depository institution.--The term 
        ``insured depository institution'' means--
                  (A) an insured depository institution (as 
                defined in section 3 of the Federal Deposit 
                Insurance Act), and
                  (B) except as used in sections 21A and 21B, 
                an insured credit union (as defined in section 
                101 of the Federal Credit Union Act).
          [(13)] (10) Community financial institution.--
                  (A) In general.--The term ``community 
                financial institution'' means a member--
                          (i) the deposits of which are insured 
                        under the Federal Deposit Insurance 
                        Act; and
                          (ii) that has, as of the date of the 
                        transaction at issue, less than 
                        [$500,000,000] $1,000,000,000 in 
                        average total assets, based on an 
                        average of total assets over the 3 
                        years preceding that date.
                  (B) Adjustments.--The [$500,000,000] 
                $1,000,000,000 limit referred to in 
                subparagraph (A)(ii) shall be adjusted annually 
                by [the Finance Board] the Director, based on 
                the annual percentage increase, if any, in the 
                Consumer Price Index for all urban consumers, 
                as published by the Department of Labor.
          (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. 2A. FEDERAL HOUSING FINANCE BOARD.

  [(a) Establishment.--
          [(1) In general.--There is established the Federal 
        Housing Finance Board, which shall succeed to the 
        authority of the Federal Home Loan Bank Board with 
        respect to the Federal Home Loan Banks.
          [(2) Status.--The Board shall be an independent 
        agency in the executive branch of the Government.
  [(3) Duties.--
          [(A) Safety and soundness.--The primary duty of the 
        Board shall be to ensure that the Federal Home Loan 
        Banks operate in a financially safe and sound manner.
          [(B) Other duties.--To the extent consistent with 
        subparagraph (A), the duties of the Board shall also 
        be--
                  [(i) to supervise the Federal Home Loan 
                Banks;
                  [(ii) to ensure that the Federal Home Loan 
                Banks carry out their housing finance mission; 
                and
                  [(iii) to ensure that the Federal Home Loan 
                Banks remain adequately capitalized and able to 
                raise funds in the capital markets.
  [(b) Management.--
          [(1) In general.--The management of the Board shall 
        be vested in a Board of Directors consisting of 5 
        directors as follows:
                  [(A) The Secretary who shall serve without 
                additional compensation.
                  [(B) Four citizens of the United States, 
                appointed by the President, by and with the 
                advice and consent of the Senate, each of whom 
                shall hold office for a term of 7 years.
          [(2) Provisions relating to appointed directors.--
                  [(A) In general.--The directors appointed 
                pursuant to paragraph (1)(B) shall be from 
                among persons with extensive experience or 
                training in housing finance or with a 
                commitment to providing specialized housing 
                credit. An appointed director shall not hold 
                any other appointed office during his or her 
                term as director. Not more than 3 directors 
                shall be members of the same political party. 
                Not more than 1 appointed director shall be 
                from any single district of the Federal Home 
                Loan Bank System. Nominations pursuant to this 
                subparagraph shall be referred in the Senate to 
                the Committee on Banking, Housing, and Urban 
                Affairs.
                  [(B) Consumer representative.--At least 1 
                director shall be chosen from an organization 
                with more than a 2-year history of representing 
                consumer or community interests on banking 
                services, credit needs, housing, or financial 
                consumer protections.
                  [(C) Limitations on conflicts of interest.--
                No director may--
                          [(i) serve as a director or officer 
                        of any Federal Home Loan Bank or any 
                        member of any Bank; or
                          [(ii) hold shares of, or any other 
                        financial interest in, any member of 
                        any such Bank.
                  [(D) Clarification of status.--
                          [(i) In general.--The directors 
                        appointed pursuant to paragraph (1)(B) 
                        shall serve on a full-time basis after 
                        December 31, 1993.
                          [(ii) Rule of construction.--Clause 
                        (i) shall not be construed as implying 
                        that any other position may be filled 
                        or held on a less than full-time basis.
          [(3) Initial terms.--Notwithstanding paragraph (2), 
        of the directors first appointed--
                  [(A) one shall be appointed for a term of 1 
                year;
                  [(B) one shall be appointed for a term of 3 
                years; and
                  [(C) one shall be appointed for a term of 5 
                years.
  [(c) Chairperson; Transitional Provisions.--
          [(1) In general.--The President shall designate 1 of 
        the appointed directors to be the Chairperson of the 
        Board. The Chairperson shall designate another director 
        to serve as Acting Chairperson during the absence or 
        disability of the Chairperson.
          [(2) Transitional provision.--Beginning on the date 
        of enactment of the Financial Institutions Reform, 
        Recovery, and Enforcement Act of 1989, until such time 
        that at least 2 directors are appointed and confirmed 
        pursuant to subsection (b), the Secretary shall act for 
        all purposes and with the full powers of the Board of 
        Directors. The Secretary may utilize the services of 
        employees from the Department of Housing and Urban 
        Development to perform services for the Board of 
        Directors during such transition period.
  [(d) Vacancies.--
          [(1) In general.--Any vacancy on the Board of 
        Directors shall be filled in the manner in which the 
        original appointment was made. Any director appointed 
        to fill a vacancy occurring before the expiration of 
        the term for which such director's predecessor was 
        appointed shall be appointed only for the remainder of 
        such term. Each director may continue to serve until a 
        successor has been appointed and qualified.
          [(2) The secretary.--In the event of a vacancy in the 
        office of Secretary or during the absence or disability 
        of the Secretary, the Acting Secretary shall act as a 
        director in place of the Secretary.

[SEC. 2B. POWERS AND DUTIES.

  [(a) General Powers.--The Board shall have the following 
powers:
          [(1) To supervise the Federal Home Loan Banks and to 
        promulgate and enforce such regulations and orders as 
        are necessary from time to time to carry out the 
        provisions of this Act.
          [(2) To suspend or remove for cause a director, 
        officer, employee, or agent of any Federal Home Loan 
        Bank or joint office. The cause of such suspension or 
        removal shall be communicated in writing to such 
        director, officer, employee, or agent and to such Bank 
        or joint office. Notwithstanding any other provision of 
        this Act, no officer, employee, or agent of a Bank or 
        joint office shall be a Federal officer or employee 
        under any definition of either term in title 5, United 
        States Code.
          [(3) To determine necessary expenditures of the Board 
        under this Act and the manner in which such 
        expenditures shall be incurred, allowed, and paid.
          [(4) To use the United States mails in the same 
        manner and under the same conditions as a department or 
        agency of the United States.
          [(5) To issue and serve a notice of charges upon a 
        Federal home loan bank or upon any executive officer or 
        director of a Federal home loan bank if, in the 
        determination of the Finance Board, the Bank, executive 
        officer, or director is engaging or has engaged in, or 
        the Finance Board has reasonable cause to believe that 
        the Bank, executive officer, or director is about to 
        engage in an unsafe or unsound practice in conducting 
        the business of the bank, or any conduct that violates 
        any provision of this Act or any law, order, rule, or 
        regulation or any condition imposed in writing by the 
        Finance Board in connection with the granting of any 
        application or other request by the Bank, or any 
        written agreement entered into by the Bank with the 
        agency, in accordance with the procedures provided in 
        subsection (c) or (f) of section 1371 of the Federal 
        Housing Enterprises Financial Safety and Soundness Act 
        of 1992. Such authority includes the same authority to 
        issue an order requiring a party to take affirmative 
        action to correct conditions resulting from violations 
        or practices or to limit activities of a Bank or any 
        executive officer or director of a Bank as appropriate 
        Federal banking agencies have to take with respect to 
        insured depository institutions under paragraphs (6) 
        and (7) of section 8(b) of the Federal Deposit 
        Insurance Act, and to have all other powers, rights, 
        and duties to enforce this Act with respect to the 
        Federal home loan banks and their executive officers 
        and directors as the Office of Federal Housing 
        Enterprise Oversight has to enforce the Federal Housing 
        Enterprises Financial Safety and Soundness Act of 1992, 
        the Federal National Mortgage Association Charter Act, 
        or the Federal Home Loan Mortgage Corporation Act with 
        respect to the Federal housing enterprises under 
        subtitle C (other than section 1371) of the Federal 
        Housing Enterprises Financial Safety and Soundness Act 
        of 1992.
          [(6) To address any insufficiencies in capital levels 
        resulting from the application of section 5(f) of the 
        Home Owners' Loan Act.
          [(7) To act in its own name and through its own 
        attorneys--
                  [(A) in enforcing any provision of this Act 
                or any regulation promulgated under this Act; 
                or
                  [(B) in any action, suit, or proceeding to 
                which the Finance Board is a party that 
                involves the Board's regulation or supervision 
                of any Federal home loan bank.
  [(b) Staff.--
          [(1) Board staff.--Subject to title IV of the 
        Financial Institutions Reform, Recovery, and 
        Enforcement Act of 1989, the Board may employ, direct, 
        and fix the compensation and number of employees, 
        attorneys, and agents of the Federal Housing Finance 
        Board, except that in no event shall the Board delegate 
        any function to any employee, administrative unit of 
        any Bank, or joint office of the Federal Home Loan Bank 
        System. The prohibition contained in the preceding 
        sentence shall not apply to the delegation of 
        ministerial functions including issuing consolidated 
        obligations pursuant to section 11(b). In directing and 
        fixing such compensation, the Board shall consult with 
        and maintain comparability with the compensation at the 
        Federal bank regulatory agencies. Such compensation 
        shall be paid without regard to the provisions of other 
        laws applicable to officers or employees of the United 
        States, except the Chairperson and other Directors 
        shall be compensated as prescribed in sections 5314 and 
        5315 of title 5, United States Code, respectively.
          [(2) Abolition of joint offices.--The joint or 
        collective offices of the Federal Home Loan Bank 
        System, except for the Office of Finance, are hereby 
        abolished.
  [(c) Receipts of the Board.--Receipts of the Board derived 
from assessments levied upon the Federal Home Loan Banks and 
from other sources (other than receipts from the sale of 
consolidated Federal Home Loan Bank bonds and debentures issued 
under section 11 of this Act) shall be deposited in the 
Treasury of the United States. Salaries of the directors and 
other employees of the Board and all other expenses thereof may 
be paid from such assessments or other sources and shall not be 
construed to be Government Funds or appropriated monies, or 
subject to apportionment for the purposes of chapter 15 of 
title 31, United States Code, or any other authority.
  [(d) Annual Report.--The Board shall make an annual report to 
the Congress.]

                        FEDERAL HOME LOAN BANKS

  Sec. 3. As soon as practicable [the Board] the Director shall 
divide the continental United States, Puerto Rico, the Virgin 
Islands, Guam, and the Territories of Alaska and Hawaii into 
not less than eight nor more than twelve districts. Such 
districts shall be apportioned with due regard to the 
convenience and customary course of business of the 
institutions eligible to and likely to subscribe for stock of a 
Federal Home Loan Bank to be formed under this Act, but no such 
district shall contain a fractional part of any State. The 
districts thus created may be readjusted and new districts may 
from time to time be created by [the Board] the Director, not 
to exceed twelve in all. Such districts shall be known as 
Federal Home Loan Bank districts and may be designated by 
number. As soon as practicable [the Board] the Director shall 
establish, in each district, a Federal Home Loan Bank at such 
city as may be designated by [the Board] the Director. Its 
title shall include the name of the city at which it is 
established.

             ELIGIBILITY OF MEMBERS AND NONMEMBER BORROWERS

  Sec. 4. (a) Criteria for Eligibility.--
          (1) In general.--Any building and loan association, 
        savings and loan association, cooperative bank, 
        homestead association, insurance company, savings bank, 
        or any insured depository institution (as defined in 
        section 2 of this Act), shall be eligible to become a 
        member of a Federal Home Loan Bank if such 
        institution--
                  (A) is duly organized under the laws of any 
                State or of the United States;
                  (B) is subject to inspection and regulation 
                under the banking laws, or under similar laws, 
                of the State or of the United States; and
                  (C) makes such home mortgage loans as, in the 
                judgment of [the Board] the Director, are long-
                term loans (except that in the case of a 
                savings bank, this subparagraph applies only 
                if, in the judgment of [the Board] the 
                Director, its time deposits, as defined in 
                section 19 of the Federal Reserve Act, warrant 
                its making such loans).

           *       *       *       *       *       *       *

          (3) Certain institutions.--An insured depository 
        institution commencing its initial business operations 
        after January 1, 1989, may become a member of a Federal 
        Home Loan Bank if it complies with regulations and 
        orders prescribed by [the Board] the Director for the 
        10 percent asset requirement (described in the 
        paragraph (2)) within one year after the commencement 
        of its operations.

           *       *       *       *       *       *       *

  (b) An institution eligible to become a member under this 
section may become a member only of, or secure advances from, 
the Federal Home Loan Bank of the district in which is located 
the institution's principal place of business, or of the bank 
of a district adjoining such district, if demanded by 
convenience and then only with the approval of [the Board] the 
Director.
  (c) Notwithstanding the provisions of clause (2) of 
subsection (a) of this section requiring inspection and 
regulation under law as a condition with respect to eligibility 
for membership, any building and loan association which would 
be eligible to become a member of a Federal Home Loan Bank 
except for the fact that it is not subject to inspection and 
regulation under the banking laws or similar laws of the State 
in which such association is organized shall, upon subjecting 
itself to such inspection and regulation as [the Board] the 
Director shall prescribe, be eligible to become a member.

           *       *       *       *       *       *       *


SEC. 6. CAPITAL STRUCTURE OF FEDERAL HOME LOAN BANKS.

  (a) Regulations.--
          (1) Capital standards.--Not later than 18 months 
        after the date of the enactment of the Federal Home 
        Loan Bank System Modernization Act of 1999, [the 
        Finance Board] the Director shall issue regulations 
        prescribing uniform capital standards applicable to 
        each Federal home loan bank, which shall require each 
        such bank to meet--
                  (A) * * *

           *       *       *       *       *       *       *

          (3) Risk-based capital standards.--
                  [(A) In general.--Each Federal home loan bank 
                shall maintain permanent capital in an amount 
                that is sufficient, as determined in accordance 
                with the regulations of the Finance Board, to 
                meet--
                          [(i) the credit risk to which the 
                        Federal home loan bank is subject; and
                          [(ii) the market risk, including 
                        interest rate risk, to which the 
                        Federal home loan bank is subject, 
                        based on a stress test established by 
                        the Finance Board that rigorously tests 
                        for changes in market variables, 
                        including changes in interest rates, 
                        rate volatility, and changes in the 
                        shape of the yield curve.]
                  (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.
                  (B) Consideration of other risk-based 
                standards.--In establishing the risk-based 
                standard under subparagraph (A)[(ii)], [the 
                Finance Board] the Director shall take due 
                consideration of any risk-based capital test 
                established pursuant to section 1361 of the 
                Federal Housing Enterprises Financial Safety 
                and Soundness Act of 1992 (12 U.S.C. 4611) for 
                the enterprises (as defined in that Act), with 
                such modifications as [the Finance Board] the 
                Director determines to be appropriate to 
                reflect differences in operations between the 
                Federal home loan banks and those enterprises.
          (4) Other regulatory requirements.--The regulations 
        issued by [the Finance Board] the Director under 
        paragraph (1) shall--
                  (A) * * *

           *       *       *       *       *       *       *

          (5) Definitions of capital.--For purposes of 
        determining compliance with the capital standards 
        established under this subsection--
                  (A) permanent capital of a Federal home loan 
                bank shall include--
                          (i) the amounts paid for the Class B 
                        stock; and
                          (ii) the retained earnings of the 
                        bank (as determined in accordance with 
                        generally accepted accounting 
                        principles); and
                  (B) total capital of a Federal home loan bank 
                shall include--
                          (i) permanent capital;
                          (ii) the amounts paid for the Class A 
                        stock;
                          (iii) consistent with generally 
                        accepted accounting principles, and 
                        subject to the regulation of [the 
                        Finance Board] the Director, a general 
                        allowance for losses, which may not 
                        include any reserves or allowances made 
                        or held against specific assets; and
                          (iv) any other amounts from sources 
                        available to absorb losses incurred by 
                        the bank that [the Finance Board] the 
                        Director determines by regulation to be 
                        appropriate to include in determining 
                        total capital.
          (6) Transition period.--Notwithstanding any other 
        provision of this Act, the requirements relating to 
        purchase and retention of capital stock of a Federal 
        home loan bank by any member thereof in effect on the 
        day before the date of the enactment of the Federal 
        Home Loan Bank System Modernization Act of 1999, shall 
        continue in effect with respect to each Federal home 
        loan bank until the regulations required by this 
        subsection have taken effect and the capital structure 
        plan required by subsection (b) has been approved by 
        [the Finance Board] the Director and implemented by 
        such bank.
  (b) Capital Structure Plan.--
          (1) Approval of plans.--Not later than 270 days after 
        the date of publication by [the Finance Board] the 
        Director of final regulations in accordance with 
        subsection (a), the board of directors of each Federal 
        home loan bank shall submit for [Finance Board 
        approval] approval by the Director a plan establishing 
        and implementing a capital structure for such bank 
        that--
                  (A) the board of directors determines is best 
                suited for the condition and operation of the 
                bank and the interests of the members of the 
                bank;
                  (B) meets the requirements of subsection (c); 
                and
                  (C) meets the minimum capital standards and 
                requirements established under subsection (a) 
                and other regulations prescribed by [the 
                Finance Board] the Director.
          (2) Approval of modifications.--The board of 
        directors of a Federal home loan bank shall submit to 
        [the Finance Board] the Director for approval any 
        modifications that the bank proposes to make to an 
        approved capital structure plan.
  (c) Contents of Plan.--The capital structure plan of each 
Federal home loan bank shall contain provisions addressing each 
of the following:
          (1) * * *
                  (B) Investment alternatives.--
                          (i) In general.--In establishing the 
                        minimum investment required for each 
                        member under subparagraph (A), a 
                        Federal home loan bank may, in its 
                        discretion, include any 1 or more of 
                        the requirements referred to in clause 
                        (ii), or any other provisions approved 
                        by [the Finance Board] the Director.
                          (ii) Authorized requirements.--A 
                        requirement is referred to in this 
                        clause if it is a requirement for--
                                  (I) a stock purchase based on 
                                a percentage of the total 
                                assets of a member; or
                                  (II) a stock purchase based 
                                on a percentage of the 
                                outstanding advances from the 
                                bank to the member.
                  (C) Minimum amount.--Each capital structure 
                plan of a Federal home loan bank shall require 
                that the minimum stock investment established 
                for members shall be set at a level that is 
                sufficient for the bank to meet the minimum 
                capital requirements established by [the 
                Finance Board] the Director under subsection 
                (a).
                  (D) Adjustments to minimum required 
                investment.--The capital structure plan of each 
                Federal home loan bank shall impose a 
                continuing obligation on the board of directors 
                of the bank to review and adjust the minimum 
                investment required of each member of that 
                bank, as necessary to ensure that the bank 
                remains in compliance with applicable minimum 
                capital levels established by [the Finance 
                Board] the Director, and shall require each 
                member to comply promptly with any adjustments 
                to the required minimum investment.

           *       *       *       *       *       *       *

          (4) Classes of stock.--
                  (A) In general.--The capital structure plan 
                of a Federal home loan bank shall afford each 
                member of that bank the option of maintaining 
                its required investment in the bank through the 
                purchase of any combination of classes of stock 
                authorized by the board of directors of the 
                bank and approved by [the Finance Board] the 
                Director in accordance with its regulations.
                  (B) Rights requirement.--A Federal home loan 
                bank shall include in its capital structure 
                plan provisions establishing terms, rights, and 
                preferences, including minimum investment, 
                dividends, voting, and liquidation preferences 
                of each class of stock issued by the bank, 
                consistent with [Finance Board regulations] 
                regulations of the Director and market 
                requirements.
                  (C) Reduced minimum investment.--The capital 
                structure plan of a Federal home loan bank may 
                provide for a reduced minimum stock investment 
                for any member of that bank that elects to 
                purchase Class B in a manner that is consistent 
                with meeting the minimum capital requirements 
                of the bank, as established by [the Finance 
                Board] the Director.

           *       *       *       *       *       *       *

          (6) Bank review of plan.--Before filing a capital 
        structure plan with [the Finance Board] the Director, 
        each Federal home loan bank shall conduct a review of 
        the plan by--
                  (A) an independent certified public 
                accountant, to ensure, to the extent possible, 
                that implementation of the plan would not 
                result in any write-down of the redeemable bank 
                stock investment of its members; and
                  (B) at least one major credit rating agency, 
                to determine, to the extent possible, whether 
                implementation of the plan would have any 
                material effect on the credit ratings of the 
                bank.
  (d) Termination of Membership.--
          (1) Voluntary withdrawal.--Any member may withdraw 
        from a Federal home loan bank if the member provides 
        written notice to the bank of its intent to do so and 
        if, on the date of withdrawal, there is in effect a 
        certification by [the Finance Board] the Director that 
        the withdrawal will not cause the Federal Home Loan 
        Bank System to fail to meet its obligation under 
        section 21B(f)(2)(C) to contribute to the debt service 
        for the obligations issued by the Resolution Funding 
        Corporation. The applicable stock redemption notice 
        periods shall commence upon receipt of the notice by 
        the bank. Upon the expiration of the applicable notice 
        period for each class of redeemable stock, the member 
        may surrender such stock to the bank, and shall be 
        entitled to receive in cash the par value of the stock. 
        During the applicable notice periods, the member shall 
        be entitled to dividends and other membership rights 
        commensurate with continuing stock ownership.
          (2) Involuntary withdrawal.--
                  (A) In general.--The board of directors of a 
                Federal home loan bank may terminate the 
                membership of any institution if, subject to 
                [Finance Board regulations] regulations of the 
                Director, it determines that--
                          (i) * * *

           *       *       *       *       *       *       *

  (f) Impairment of Capital.--If [the Finance Board] the 
Director or the board of directors of a Federal home loan bank 
determines that the bank has incurred or is likely to incur 
losses that result in or are expected to result in charges 
against the capital of the bank, the bank shall not redeem or 
repurchase any stock of the bank without the prior approval of 
[the Finance Board] the Director while such charges are 
continuing or are expected to continue. In no case may a bank 
redeem or repurchase any applicable capital stock if, following 
the redemption, the bank would fail to satisfy any minimum 
capital requirement.
  (g) Rejoining After Divestiture of All Shares.--
          (1) * * *
          (2) Exception for withdrawals from membership before 
        1998.--Any institution that withdrew from membership in 
        any Federal home loan bank before December 31, 1997, 
        may acquire shares of a Federal home loan bank at any 
        time after that date, subject to the approval of [the 
        Finance Board] the Director and the requirements of 
        this Act.

           *       *       *       *       *       *       *


                          MANAGEMENT OF BANKS

  Sec. 7. [(a) The management of each Federal Home Loan Bank 
shall be vested in a board of fourteen directors, eight of whom 
shall be elected by the members as hereinafter provided in this 
section and six of whom shall be appointed by the Board 
referred to in section 2A, all of whom shall be citizens of the 
United States, and each of whom shall be either a bona fide 
resident of the district in which such bank is located or an 
officer or director of a member of such bank located in that 
district: Provided, That in any district which includes five or 
more States the Board may by regulation increase the elective 
directors to a number not exceeding thirteen and may increase 
the appointive directors to a number not exceeding three-
fourths the number of elective directors: Provided further, 
That, if at any time the number of elective directors in the 
case of any district is not at least equal to the number of 
States in such district the Board shall exercise the authority 
conferred by the next preceding proviso so as to increase such 
elective directors to a number at least equal to the number of 
States in such district. At least 2 of the Federal Home Loan 
Bank directors who are appointed by the Board 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, or financial consumer 
protections. No Federal Home Loan Bank director who is 
appointed pursuant to this subsection may, during such Bank 
director's term of office, serve as an officer of any Federal 
Home Loan Bank or a director or officer of any member of a 
Bank, or hold shares, or any other financial interest in, any 
member of a Bank.]
  (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, and 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).
  (b) Each [elective directorship] member directorship 
established pursuant to subsection (a)(2) shall be designated 
by [the Board] the Director as representing the members located 
in a particular State, and shall be filled by a person who is 
an officer or director of a member located in that State, each 
of which members shall be entitled to nominate an eligible 
person for such directorship, and such office shall be filled 
from such nominees by a plurality of the votes which such 
members may cast in an election held for the purpose of filling 
such office, in which election each such member may cast for 
such office a number of votes equal to the number of shares of 
stock in such bank required by this Act to be held by such 
member at the end of the calendar year next preceding the 
election, as determined pursuant to regulation of [the Board] 
the Director, but not in excess of the average number of shares 
of stock in such bank required by this Act to be held at the 
end of such calendar year by the respective members of such 
bank located in such State, as so determined. No person who is 
an officer or director of a member that fails to meet any 
applicable capital requirement is eligible to hold the office 
of Federal Home Loan Bank director. As used in this subsection 
and in subsection (c) of this section, the term ``member'' 
means a member of a Federal home loan bank which was a member 
of such bank at the end of such calendar year.
  (c) The number of elective directorships designated as 
representing the members located in each separate State in a 
bank district shall be determined by [the Board] the Director 
in the approximate ratio of the percentage of the required 
stock, as determined pursuant to regulation of [the Board] the 
Director, of the members located in that State at the end of 
the calendar year next preceding the date of the election to 
the total required stock, as so detemined, of all members of 
such bank at the end of such year, except that in the case of 
each State such number shall not be less than one and shall not 
be more than six. Notwithstanding any other provision of this 
section, (A) except as provided in clause (B) of this sentence, 
if at any time the number of [elective] member directorships so 
designated as representing the members located in any State 
would not be at least equal to the total number of elective 
directorships which, on December 31, 1960, were filled by 
officers or directors of members whose principal places of 
business were located in such State, [the Board] the Director 
shall add to the board of directors of the bank of the district 
in which such State is located such number of [elective] member 
directorships, and shall so designate the directorship or 
directorships thus added, that the number of [elective] member 
directorships designated as representing the members located in 
such State will equal said total number. Any [elective] member 
directorship so added shall exist only until the expiration of 
its first term. [The Board] The Director shall, with respect to 
each member of a Federal home loan bank, designate the State in 
the district of such bank in which such member shall, for the 
purposes of this subsection and subsection (b) of this section, 
be deemed to be located, and may from time to time change any 
such designation, but if the principal place of business of any 
such member is located in a State of such district it shall be 
the duty of [the Board] the Director to designate such State as 
the State in which such member shall, for said purposes, be 
deemed to be located. As used in the second sentence of this 
subsection, the term ``total number of elective directorships'' 
means the total number of elective directorships on the board 
of directors of the bank of the district in which such State 
was located on December 31, 1960, and the term ``members'' 
where used for the second time in such sentence means members 
of such bank, 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.
  (d) The term of each director, whether elected or appointed, 
shall be [3 years] 4 years. The board of directors of each 
Federal home loan bank and [the Finance Board] the Director 
shall adjust the terms of members first elected or appointed 
after the date of the enactment of the [Federal Home Loan Bank 
System Modernization Act of 1999] Federal Housing Finance 
Reform Act of 2007 to ensure that the terms of the members of 
the board of directors are staggered with approximately [\1/3\] 
\1/4\ of the terms expiring each year. If any person, before or 
after, or partly before and partly after, the date of the 
enactment of this sentence, has been elected to each of three 
consecutive full terms as an [elective] director of a Federal 
home loan bank in any [elective] directorship or [elective] 
directorships and has served for all or part of each of said 
terms, such person shall not be eligible for election to an 
[elective] directorship of such bank for a term which begins 
earlier than two years after the expiration of the last 
expiring of said three terms. [The Board] The Director is 
hereby authorized to prescribe such rules and regulations as it 
may deem necessary or appropriate for the nomination and 
election of directors of Federal home loan banks, including, 
without limitation on the generality of the foregoing, rules 
and regulations with respect to the breaking of ties and with 
respect to the inclusion of more than one directorship on a 
single ballot and the methods of voting and of determining the 
results of voting in such cases.
  (e) Each term, outstanding on the effective date of the 
amendment to this section abolishing the division of elective 
directors into classes, of an elective or appointive 
directorship then existing shall continue until its original 
date of expiration, and any elective or appointive directorship 
in existence on said date shall continue to exist to the same 
extent as if it had been established by or under this section 
on or after said date. The Board in its discretion may shorten 
the next succeeding term of any such elective directorship to 
one year, and may fill such term by appointment. The term 
``States'' or ``State'' as used in this section shall mean the 
States of the Union, the District of Columbia, and the 
Commonwealth of Puerto Rico. The Board, by regulation or 
otherwise, may add an additional elective directorship to the 
board of directors of the bank of any district in which the 
Commonwealth of Puerto Rico is included at the time such 
directorship is added and which does not then include five or 
more States, may fix the commencement and the duration, which 
shall not exceed two years, of the initial term of any 
directorship so added, and may fill any such initial term by 
appointment: Provided, That (1) any directorship added pursuant 
to the foregoing provisions of this sentence shall be 
designated by [the Board] the Director, pursuant to subsection 
(b) of this section, as representing the members located in the 
Commonwealth of Puerto Rico, (2) such designation of such 
directorship shall not be changed, and (3) such directorship 
shall automatically cease to exist if and when the Commonwealth 
of Puerto Rico ceases to be included in such district.
  (f) Vacancies.--
          (1) In general.--A Bank director appointed or elected 
        to fill a vacancy shall be appointed or elected for the 
        unexpired term of his or her predecessor in office.
          (2) [Appointed] Independent bank directors.--In the 
        event of a vacancy in any [appointive] independent Bank 
        directorship, such vacancy shall be filled through 
        appointment by [the Board] the Director for the 
        unexpired term. If any [appointive] independent Bank 
        director shall cease to have the qualifications set 
        forth in subsection (a), the office held by such person 
        shall immediately become vacant, but such person may 
        continue to act as a Bank director until his or her 
        successor assumes the vacated office [or the term of 
        such office expires, whichever occurs first]. 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) [Elected] Member bank directors.--In the event of 
        a vacancy in any [elective] member Bank directorship, 
        such vacancy shall be filled by an affirmative vote of 
        a majority of the remaining Bank directors, regardless 
        of whether such remaining Bank directors constitute a 
        quorum of the Bank's board of directors. A Bank 
        director so elected shall satisfy the requirements for 
        eligibility which were applicable to his predecessor. 
        If any [elective] member Bank director shall cease to 
        have any qualification set forth in this section, the 
        office held by such person shall immediately become 
        vacant, and such person shall not continue to act as a 
        Bank director.

           *       *       *       *       *       *       *

  (h) If at any time when nominations are required members 
shall hold less than $1,000,000 of the capital stock of the 
Federal home loan bank, [the Board] the Director shall appoint 
a director or directors to fill the place or places for which 
such nominations are required, and [the Board] the Director 
may, prior to the filing of the certificate mentioned in 
section 12, appoint directors who shall be respectively 
designated by it as appointive directors and as [elective] 
directors, in accordance with the provisions of this section.
  [(i) Directors' Compensation.--
          [(1) In general.--Subject to paragraph (2), each bank 
        may pay its directors reasonable compensation for the 
        time required of them, and their necessary expenses, in 
        the performance of their duties, in accordance with the 
        resolutions adopted by the such directors, subject to 
        the approval of the board.
          [(2) Limitation.--
                  [(A) In general.--The annual salary of each 
                of the following members of the board of 
                directors of a Federal home loan bank may not 
                exceed the amount specified:

                                                [The annual compensation
In the case of the--                                  may not exceed--  
    Chairperson...............................................  $25,000 
    Vice Chairperson..........................................  $20,000 
    All other members.........................................  $15,000.

                  [(B) Adjustment.--Beginning January 1, 2001, 
                each dollar amount referred to in the table in 
                subparagraph (A) shall be adjusted annually by 
                the Finance Board, based on the annual 
                percentage increase, if any, in the Consumer 
                Price Index for all urban consumers, as 
                published by the Department of Labor.
                  [(C) Expenses.--Subparagraph (A) shall not be 
                construed as prohibiting the reimbursement of 
                expenses incurred by members of the board of 
                directors of any Federal home loan bank in 
                connection with service on the board of 
                directors.]
  (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.

           *       *       *       *       *       *       *

  (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).

                EXAMINATIONS AND STUDIES [BY THE BOARD]

  Sec. 8. [The Board] The Director shall cause to be made from 
time to time examinations of the laws of the various States of 
the United States and the regulations and procedure thereunder 
governing conditions under which institutions of the kinds 
which may become members or nonmember borrowers under this Act 
are permitted to be formed or to do business, or relating to 
the conveying or recording of land titles, or to homestead and 
other rights, or to the enforcement of the rights of holders of 
mortgages on lands securing loans, or otherwise. If any such 
examination shall indicate, in the opinion of [the Board] the 
Director, that under the laws of any such State or the 
regulations or procedure thereunder there would be inadequate 
protection to a Federal Home Loan Bank in making or collecting 
advances under this Act, [the Board] the Director may withhold 
or limit the operation of any Federal Home Loan Bank in such 
State until satisfactory conditions of law, regulation, or 
procedure shall be established. In any State where State 
examination of members or nonmember borrowers is deemed 
inadequate for the purposes of the Federal Home Loan Banks, 
[the Board] the Director shall establish such examination, all 
or part of the cost of which may be considered as part of the 
cost of making advances in such State. The banks and/or [the 
Board] the Director may make studies of trends of home and 
other property values, methods of appraisals, and other 
subjects such as they may deem useful for the general guidance 
of their policies and operations and those of institutions 
authorized to secure advances.

           *       *       *       *       *       *       *


SEC. 10. ADVANCES TO MEMBERS.

  (a) In General.--
          (1) * * *
          (2) Purposes of advances.--A long-term advance may 
        only be made for the purposes of--
                  (A) * * *
                  (B) providing funds to any community 
                financial institution for small businesses, 
                small farms, [and] small agri-businesses, and 
                community development activities.
          (3) Collateral.--A Bank, at the time of origination 
        or renewal of a loan or advance, shall obtain and 
        maintain a security interest in collateral eligible 
        pursuant to one or more of the following categories:
                  (A) * * *

           *       *       *       *       *       *       *

                  (E) Secured loans for small business, 
                agriculture, or community development 
                activities or securities representing a whole 
                interest in such secured loans, in the case of 
                any community financial institution.

           *       *       *       *       *       *       *

          (5) Review of certain collateral standards.--[The 
        Board] The Director may review the collateral standards 
        applicable to each Federal home loan bank for the 
        classes of collateral described in subparagraphs (D) 
        and (E) of paragraph (3), and may, if necessary for 
        safety and soundness purposes, require an increase in 
        the collateral standards for any or all of those 
        classes of collateral.
          (6) Definitions.--For purposes of this subsection, 
        the terms ``small business'', ``agriculture'', ``small 
        farm'', [and] ``small agri-business'', and ``community 
        development activities'' shall have the meanings given 
        those terms by regulation of [the Finance Board] the 
        Director.
  (b) For the purposes of this section, each Federal Home Loan 
Bank shall have power to make, or to cause or require to be 
made, such appraisals and other investigations as it may deem 
necessary. No home mortgage otherwise eligible to be accepted 
as collateral security for an advance by a Federal Home Loan 
Bank shall be accepted if any director, officer, employee, 
attorney, or agent of the Federal Home Loan Bank or of the 
borrowing institution is personally liable theron, unless [the 
Board] the Director has specifically approved [by formal 
resolution] such acceptance.

           *       *       *       *       *       *       *

  (g) Community Support Requirements.--
          (1) In general.--Before the end of the 2-year period 
        beginning on the date of enactment of the Financial 
        Institutions Reform, Recovery, and Enforcement Act of 
        1989, [the Board] the Director shall adopt regulations 
        establishing standards of community investment or 
        service for members of Banks to maintain continued 
        access to long-term advances.

           *       *       *       *       *       *       *

  (j) Affordable Housing Program.--
          (1) In general.--Pursuant to regulations promulgated 
        by [the Board] the Director, each Bank shall establish 
        an Affordable Housing Program to subsidize the interest 
        rate on advances to members engaged in lending for long 
        term, low- and moderate-income, owner-occupied and 
        affordable rental housing at subsidized interest rates.
          (2) Standards.--[The Board's] The Director's 
        regulations shall permit Bank members to use subsidized 
        advances received from the Banks to--
                  (A) * * *

           *       *       *       *       *       *       *

          (6) Grounds for Suspending Contributions.--
                  (A) In general.--If a Bank finds that the 
                payments required under this paragraph are 
                contributing to the financial instability of 
                such Bank, it may apply to the [Federal Housing 
                Finance Board] Director for a temporary 
                suspension of such payments.
                  (B) Financial instability.--In determining 
                the financial instability of a Bank, the 
                [Federal Housing Finance Board] Director shall 
                consider such factors as (i) whether the Bank's 
                earnings are severely depressed, (ii) whether 
                there has been a substantial decline in 
                membership capital, and (iii) whether there has 
                been a substantial reduction in advances 
                outstanding.
                  (C) Review.--[The Board] The Director shall 
                review the application and any supporting 
                financial data and issue a written decision 
                approving or disapproving such application. 
                [The Board's] The Director's decision shall be 
                accompanied by specific findings and reasons 
                for its action.
                  (D) Monitoring suspension.--If [the Board] 
                the Director grants a suspension, it shall 
                specify the period of time such suspension 
                shall remain in effect and shall continue to 
                monitor the Bank's financial condition during 
                such suspension.
                  (E) Limitations on grounds for suspension.--
                [The Board] The Director shall not suspend 
                payments to the Affordable Housing Program if 
                the Bank's reduction in earnings is a result of 
                (i) a change in the terms for advances to 
                members which is not justified by market 
                conditions, (ii) inordinate operating and 
                administrative expenses, or (iii) 
                mismanagement.
                  (F) The [Federal Housing Finance Board] 
                Director shall notify the Committee on Banking, 
                Finance and Urban Affairs of the House of 
                Representatives and the Committee on Banking, 
                Housing, and Urban Affairs of the Senate not 
                less than 60 days before such suspension takes 
                effect. Such suspension shall become effective 
                unless a joint resolution is enacted 
                disapproving such suspension.
          (7) Failure to use amounts for affordable housing.--
        If any Bank fails to utilize or commit the full amount 
        provided in this subsection in any year, 90 percent of 
        the amount that has not been utilized or committed in 
        that year shall be deposited by the Bank in an 
        Affordable Housing Reserve Fund administered by [the 
        Board] the Director. The 10 percent of the unutilized 
        and uncommitted amount retained by a Bank should be 
        fully utilized or committed by that Bank during the 
        following year and any remaining portion must be 
        deposited in the Affordable Housing Reserve Fund. Under 
        regulations established by [the Board] the Director, 
        funds from the Affordable Housing Reserve Fund may be 
        made available to any Bank to meet additional 
        affordable housing needs in such Bank's district 
        pursuant to this section.

           *       *       *       *       *       *       *

          (9) Regulations.--The [Federal Housing Finance Board] 
        Director shall promulgate regulations to implement this 
        subsection. Such regulations shall, at a minimum--
                  (A) * * *

           *       *       *       *       *       *       *

          (11) Advisory council.--Each Bank shall appoint an 
        Advisory Council of 7 to 15 persons drawn from 
        community and nonprofit organizations actively involved 
        in providing or promoting low- and moderate-income 
        housing in its district. The Advisory Council shall 
        meet with representatives of the board of directors of 
        the Bank quarterly to advise the Bank on low- and 
        moderate-income housing programs and needs in the 
        district and on the utilization of the advances for 
        these purposes. Each Advisory Council established under 
        this paragraph shall submit to [the Board] the Director 
        at least annually its analysis of the low-income 
        housing activity of the Bank by which it is appointed.
          (12) Reports to congress.--
                  (A) [The Board] The Director shall monitor 
                and report annually to the Congress and the 
                Advisory Council for each Bank the support of 
                low-income housing and community development by 
                the Banks and the utilization of advances for 
                these purposes.
                  (B) The analyses submitted by the Advisory 
                Councils to [the Board] the Director under 
                paragraph (11) shall be included as part of the 
                report required by this paragraph.

           *       *       *       *       *       *       *

  (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.

           *       *       *       *       *       *       *

  Sec. 10b. (a) In General.--Each Federal Home Loan Bank is 
authorized to make advances to nonmember mortgagees approved 
under title II of the National Housing Act. Such mortgagees 
must be chartered institutions having succession and subject to 
the inspection and supervision of some governmental agency, and 
whose principal activity in the mortgage field must consist of 
lending their own funds. Such advances shall not be subject to 
the other provisions and restrictions of this Act, but shall be 
made upon the security of insured mortgages, insured under 
title II of the National Housing Act. Advances made under the 
terms of this section shall be at such rates of interest and 
upon such terms and conditions as shall be determined by [the 
Board] the Director, but no advance may be for an amount in 
excess of 90 per centum of the unpaid principal of the mortgage 
loan given as security.

           *       *       *       *       *       *       *


                   GENERAL POWERS AND DUTIES OF BANKS

  Sec. 11. (a) Each Federal Home Loan Bank shall have power, 
subject to rules and regulations prescribed by [the Board] the 
Director to borrow and give security therefor and to pay 
interest thereon, to issue debentures, bonds, or other 
obligations upon such terms and conditions as [the Board] the 
Director may approve, and to do all things necessary for 
carrying out the provisions of this Act and all things incident 
thereto.
  (b) [The Board] The Office of Finance, as agent for the 
Banks, may issue consolidated Federal Home Loan Bank debentures 
which shall be the joint and several obligations of all Federal 
Home Loan Banks organized and existing under this Act, in order 
to provide funds for any such bank or banks, and such 
debentures shall be issued upon such terms and conditions as 
[the Board] such Office may prescribe. No such debentures shall 
be issued at any time if any of the assets of any Federal Home 
Loan Bank are pledged to secure any debts or subject to any 
lien, and neither [the Board] the Office of Finance nor any 
Federal Home Loan Bank shall have power to pledge any of the 
assets of any Federal Home Loan Bank, or voluntarily to permit 
any lien to attach to the same while any of such debentures so 
issued are outstanding. The debentures issued under this 
section and outstanding shall at no time exceed five times the 
total paid-in capital of all the Federal Home Loan Banks as of 
the time of the issue of such debentures. It shall be the duty 
of [the Board] the Office of Finance not to issue debentures 
under this section in excess of the notes or obligations of 
member institutions held and secured under section 10(a) of 
this Act by all the Federal Home Loan Banks.
  (c) At any time that no debentures are outstanding under this 
Act, or in order to refund all outstanding consolidated 
debentures issued under this section, [the Board] the Office of 
Finance, as agent for the Banks, may issue consolidated Federal 
Home Loan Bank bonds which shall be the joint and several 
obligations of all the Federal Home Loan Banks, and shall be 
secured and be issued upon such terms and conditions as [the 
Board] such Office may prescribe.
  (d) [The Board] The Director shall have full power to require 
any Federal Home Loan Bank to deposit additional collateral or 
to make substitutions of collateral or to adjust equities 
between the Federal Home Loan Banks.
  (e)(1) Each Federal Home Loan Bank shall have power to accept 
deposits made by members of such bank or by any other Federal 
Home Loan Bank or other instrumentality of the United States, 
upon such terms and conditions as [the Board] the Director may 
prescribe, but no Federal Home Loan Bank shall transact any 
banking or other business not incidental to activities 
authorized by this Act.
  (2)(A) [The Board] The Director may, subject to such rules 
and regulations, including definitions of terms used in this 
paragraph, as [the Board] the Director shall from time to time 
prescribe, authorize Federal Home Loan Banks to be drawees of, 
and to engage in, or be agents or intermediaries for, or 
otherwise participate or assist in, the collection and 
settlement of (including presentment, clearing, and payment of, 
and remitting for), checks, drafts, or any other negotiable or 
nonnegotiable items or instruments of payment drawn on or 
issued by members of any Federal Home Loan Bank or by 
institutions which are eligible to make application to become 
members pursuant to section 4, and to have such incidental 
powers as [the Board] the Director shall find necessary for the 
exercise of any such authorization.
  (B) A Federal Home Loan Bank shall make charges, to be 
determined and regulated by [the Board] the Director consistent 
with the principles set forth in section 11A(c) of the Federal 
Reserve Act, or utilize the services of, or act as agent for, 
or be a member of, a Federal Reserve bank, clearinghouse, or 
any other public or private financial institution or other 
agency, in the exercise of any powers or functions pursuant to 
this paragraph.
  (C) [The Board] The Director is authorized, with respect to 
participation in the collection and settlement of any items by 
Federal Home Loan Banks, and with respect to the collection and 
settlement (including payment by the payor institution) of 
items payable by Federal savings and loan associations and 
Federal mutual savings banks, to prescribe rules and 
regulations regarding the rights, powers, responsibilities, 
duties, and liabilities, including standards relating thereto, 
of such Federal Home Loan Banks, associations, or banks and 
other parties to any such items or their collection and 
settlement. In prescribing such rules and regulations, [the 
Board] the Director may adopt or apply, in whole or in part, 
general banking usage and practices, and, in instances or 
respects in which they would otherwise not be applicable, 
Federal Reserve regulations and operating letters, the Uniform 
Commercial Code, and clearinghouse rules.
  (f) [The Board] The Director is authorized and empowered to 
permit[,,] or to require[,] Federal Home Loan Banks, upon such 
terms and conditions as [the Board] the Director may prescribe, 
to rediscount the discounted notes of members held by other 
Federal Home Loan Banks, or to make loans to, or make deposits 
with, such other Federal Home Loan Banks, or to purchase any 
bonds or debentures issued under this section.
  (g) Each Federal Home Loan Bank shall at all times have at 
least an amount equal to the current deposits received from its 
members invested in (1) obligations of the United States, (2) 
deposits in banks or trust companies, (3) advances with a 
maturity of not to exceed five years which are made to members, 
upon such terms and conditions as [the Board] the Director may 
prescribe, and (4) advances with a maturity of not to exceed 
five years which are made to members whose creditor liabilities 
(not including advances from the Federal Home Loan Bank) do not 
exceed 5 per centum of their net assets, and which may be made 
without the security of home mortgages or other security, upon 
such terms and conditions as [the Board] the Director may 
prescribe.
  (h) Such part of the assets of each Federal Home Loan Bank 
(except reserves and amounts provided for in subsection (g)) as 
are not required for advances to members, may be invested, to 
such extent as the bank may deem desirable and subject to such 
regulations, restrictions, and limitations as may be prescribed 
by [the Board] the Director, in obligations of the United 
States, in obligations, participations, or other instruments of 
or issued by the Federal National Mortgage Association, or the 
Government National Mortgage Association, in mortgages, 
obligations, or other securities which are or ever have been 
sold by the Federal Home Loan Mortgage Corporation pursuant to 
section 305 or section 306 of the Federal Home Loan Mortgage 
Corporation Act, in the stock of the Federal National Mortgage 
Association in stock, obligations, or other securities of any 
small business investment company formed pursuant to section 
301 of the Small Business Investment Act of 1958, for the 
purpose of aiding members of the Federal Home Loan Bank System, 
and in such securities as fiduciary and trust funds may be 
invested in under the laws of the State in which the Federal 
Home Loan Bank is located.
  (i) The Secretary of the Treasury is authorized in his 
discretion to purchase any obligations issued pursuant to this 
section, as heretofore, now, or hereafter in force and for such 
purpose the Secretary of the Treasury is authorized to use as a 
public-debt transaction the proceeds of the sale of any 
securities hereafter issued under the Second Liberty Bond Act, 
as now or hereafter in force, and the purposes for which 
securities may be issued under the Second Liberty Bond Act, as 
now or hereafter in force, are extended to include such 
purchases. The Secretary of the Treasury may, at any time, 
sell, upon such terms and conditions and at such price or 
prices as he shall determine, any of the obligations acquired 
by him under this subsection. All redemptions, purchases, and 
sales by the Secretary of the Treasury of such obligations 
under this subsection shall be treated as public-debt 
transactions of the United States. The Secretary of the 
Treasury shall not at any time purchase any obligations under 
this paragraph if such purchase would increase the aggregate 
principal amount of his then outstanding holdings of such 
obligations under this paragraph to an amount greater than 
$4,000,000,000. Each purchase of obligations by the Secretary 
of the Treasury under this subsection shall be upon terms and 
conditions as shall be determined by the Secretary of the 
Treasury and shall bear such rate of interest as may be 
determined by the Secretary of the Treasury taking into 
consideration the current average market yield for the month 
preceding the month of such purchase on outstanding marketable 
obligations of the United States.
  In addition to obligations authorized to be purchased by the 
preceding paragraph, the Secretary of the Treasury is 
authorized to purchase any obligations issued pursuant to this 
section in amounts not to exceed $2,000,000,000. The authority 
provided in this paragraph shall expire August 10, 1975.
  Notwithstanding the foregoing, the authority provided in this 
subsection may be exercised during any calendar quarter 
beginning after the date of enactment of the Depository 
Institutions Amendments of 1974 only if the Secretary of the 
Treasury and [the Chairperson of the Board] the Director 
certify to the Congress that (1) alternative means cannot be 
effectively employed to permit members of the Federal Home Loan 
Bank System to continue to supply reasonable amounts of funds 
to the mortgage market, and (2) the ability to supply such 
funds is substantially impaired because of monetary stringency 
and a high level of interest rates. Any funds borrowed under 
this subsection shall be repaid by the Home Loan Banks at the 
earliest practicable date.

           *       *       *       *       *       *       *

  (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.

              INCORPORATION OF BANKS, AND CORPORATE POWERS

  Sec. 12. (a) The directors of each Federal Home Loan Bank 
shall, in accordance with such rules and regulations as [the 
Board] the Director may prescribe, make and file with [the 
Board] the Director at the earliest practicable date after the 
establishment of such bank, an organization certificate which 
shall contain such information as [the Board] the Director may 
require. Upon the making and filing of such organization 
certificate with [the Board] the Director, such bank shall 
become, as of the date of the execution of its organization 
certificate, a body corporate, and as such and in its name as 
designated by [the Board] the Director it shall have power to 
adopt, alter, and use a corporate seal; to make contracts; to 
purchase or lease and hold or dispose of such real estate as 
may be necessary or convenient for the transaction of its 
business; to sue and be sued, to complain, and to defend, in 
any court of competent jurisdiction, State or Federal; to 
select, employ, and fix the compensation of such officers, 
employees, attorneys, and agents as shall be necessary for the 
transaction of its business; to define their duties, require 
bonds of them and fix the penalties thereof, and to dismiss at 
pleasure such officers, employees, attorneys, and agents; and, 
by the board of directors of the bank, to prescribe, amend, and 
repeal by-laws governing the manner in which its affairs may be 
administered, consistent with applicable laws and regulations, 
as administered by [the Finance Board] the Director. No 
officer, employee, attorney, or agent of a Federal home loan 
bank who receives compensation, may be a member of the board of 
directors. Each such bank shall have all such incidental 
powers, not inconsistent with the provisions of this Act, as 
are customary and usual in corporations generally.
  (b) Subject to such regulations as may be prescribed by [the 
Board] the Director, one or more Federal home loan banks may 
acquire, hold, or dispose of, in whole or in part, or 
facilitate such acquisition, holding, or disposition by members 
of any such bank of, housing project loans, or interests 
therein, having the benefit of any guaranty under section 221 
of the Foreign Assistance Act of 1961, as now or hereafter in 
effect, or loans, or interests therein, having the benefit of 
any guaranty under section 224 of such Act, or any commitment 
or agreement with respect to such loans, or interests therein, 
made pursuant to either of such sections. This authority 
extends to the acquisition, holding, and disposition of loans, 
or interests therein, having the benefit of any guaranty under 
section 221 or 222 of the Foreign Assistance Act of 1961, as 
amended by section 105 of the Foreign Assistance Act of 1969 or 
as hereafter amended or extended, or of any commitment or 
agreement for any such guaranty.
          * * * * * * *
  Sec. 15. Obligations of the Federal Home Loan Banks issued 
with the approval of the Board or the Director under this Act 
shall be lawful investments, and may be accepted as security, 
for all fiduciary, trust, and public funds the investment or 
deposit of which shall be under the authority or control of the 
United States or any officer or officers thereof. The Federal 
reserve banks are authorized to act as depositaries, 
custodians, and/or fiscal agents for Federal Home Loan Banks in 
the general performance of their powers under this Act. All 
obligations of Federal Home Loan Banks shall plainly state that 
such obligations are not obligations of the United States and 
are not guaranteed by the United States.
                         reserves and dividends
  Sec. 16. (a) Each Federal Home Loan Bank may carry to a 
reserve account from time-to-time such portion of its net 
earnings as may be determined by its board of directors. Each 
Federal Home Loan Bank shall establish such additional reserves 
and/or make such charge-offs on account of depreciation or 
impairment of its assets as [the Board] the Director shall 
require from time to time. No dividends shall be paid except 
out of previously retained earnings or current net earnings 
remaining after reductions for all reserves, chargeoffs, 
purchases of capital certificates of the Financing Corporation, 
and payments relating to the Funding Corporation required under 
this Act have been provided for, other than chargeoffs or 
expenses incurred by a Bank in connection with the purchase of 
capital stock of the Financing Corporation under section 21 or 
payments relating to the Funding Corporation Principal Fund 
under section 21B(e). The reserves of each Federal Home Loan 
Bank shall be invested, subject to such regulations, 
restrictions, and limitations as may be prescribed by [the 
Board] the Director, in direct obligations of the United 
States, in obligations, participations, or other instruments of 
or issued by the Federal National Mortgage Association or the 
Government National Mortgage Association, in mortgages, 
obligations, or other securities which are or ever have been 
sold by the Federal Home Loan Mortgage Corporation pursuant to 
section 305 or section 306 of the Federal Home Loan Mortgage 
Corporation Act, and in such securities as fiduciary and trust 
funds may be invested in under the laws of the State in which 
the Federal Home Loan Bank is located.
  (b) Notwithstanding subsection (a) or any other provision of 
this Act, if [the Board] the Director determines that severe 
financial conditions exist threatening the stability of member 
institutions, [the Board] the Director may suspend temporarily 
the requirements of subsection (a) that a portion of net 
earnings be set aside semiannually by each Federal Home Loan 
Bank to a reserve account and permit each Federal Home Loan 
Bank to declare and pay dividends out of undivided profits.
  (c) Exception in Case of Losses in Connection With Financing 
Corporation Stock.--
          (1) In general.--Notwithstanding subsection (a) of 
        this section, if--
                  (A) a Federal Home Loan Bank incurs a 
                chargeoff or an expense in connection with such 
                bank's investment in the stock of the Financing 
                Corporation under section 21;
                  (B) [the Board] the Director determines there 
                is an extraordinary need for the member 
                institutions of the bank to receive dividends; 
                and
                  (C) the bank has reduced all reserves (other 
                than the reserve account required by the first 
                2 sentences of subsection (a)) to zero,
        [the Board] the Director may authorize such bank to 
        declare and pay dividends out of undivided profits (as 
        such term is defined in section 21(d)(7)) or the 
        reserve account required by the first 2 sentences of 
        subsection (a).
          (2) Requirements of section 21 not affected.--
        Notwithstanding any payment of dividends by any Federal 
        Home Loan Bank pursuant to an authorization by [the 
        Board] the Director under paragraph (1), the applicable 
        provisions of section 21 shall continue to apply with 
        respect to such bank, and to such bank's investment in 
        the Financing Corporation, in the same manner and to 
        the same extent as if such payment had not been made.
          * * * * * * *
                        administrative expenses
  Sec. 18.
  [(b) Assessments for Administrative Expenses.--
          [(1) In general.--The Board may impose a semiannual 
        assessment on the Federal Home Loan Banks, the 
        aggregate amount of which is sufficient to provide for 
        the payment of the Board's estimated expenses for the 
        period for which such assessment is made.
          [(2) Deficiencies.--If, at any time, amounts 
        available from any assessment for any semiannual period 
        are insufficient to cover the expenses of the Board 
        incurred in carrying out the provisions of this Act 
        during such period, the Board may make an immediate 
        assessment against the Banks to cover the amount of the 
        deficiency for such semiannual period.
          [(3) Surpluses.--If, at the end of any semiannual 
        period for which an assessment is made, any amount 
        remains from such assessment, such amount will be 
        deducted from the assessment on the Banks by the Board 
        for the following semiannual period.]
          * * * * * * *
         [examinations and reports] examinations and gao audits
  Sec. 20. [The Board shall from time to time, at least 
annually, require examinations and reports of condition of all 
Federal Home Loan Banks in such form as the Board shall 
prescribe and shall furnish periodically statements based upon 
the reports of the banks to the Board. For the purposes of this 
Act, examiners appointed by the Board shall be subject to the 
same requirements, responsibilities, and penalties as are 
applicable to examiners under the National Bank Act and the 
Federal Reserve Act, and shall have, in the exercise of 
functions under this Act, the same powers and privileges as are 
vested in such examiners by law.] 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). In 
addition to such examinations, the Comptroller General may 
audit or examine [the Board and] the Banks, to determine the 
extent to which [the Board and] the Banks are fairly and 
effectively fulfilling the purposes of this Act.

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.

SEC. 21. FINANCING CORPORATION.

  (a) Establishment.--Notwithstanding any other provision of 
law, the [Federal Housing Finance Board] Director shall charter 
a corporation to be known as the Financing Corporation.
  (b) Management of Financing Corporation.--
          (1) Directorate.--The Financing Corporation shall be 
        under the management of a directorate composed of 3 
        members as follows:
                  (A) The Director of the Office of Finance of 
                the Federal Home Loan Banks (or the head of any 
                successor to such office).
                  (B) 2 members selected by the [Federal 
                Housing Finance Board] Director from among the 
                presidents of the Federal Home Loan Banks.
          (2) Terms.--Each member appointed under paragraph 
        (1)(B) shall be appointed for a term of 1 year.
          * * * * * * *
          (5) Chairperson.--The [Chairperson of the Federal 
        Housing Finance Board] Director shall select the 
        chairperson of the Directorate from among the 3 members 
        of the Directorate.
          (6) Staff.--
                  (A) No paid employees.--The Financing 
                Corporation shall have no paid employees.
                  (B) Powers.--The Directorate may, with the 
                approval of the [Federal Housing Finance Board] 
                Director, authorize the officers, employees, or 
                agents of the Federal Home Loan Banks to act 
                for and on behalf of the Financing Corporation 
                in such manner as may be necessary to carry out 
                the functions of the Financing Corporation.
          (7) Administrative expenses.--
                  (A) In general.--All administrative expenses 
                of the Financing Corporation shall be paid by 
                the Federal Home Loan Banks.
                  (B) Pro rata distribution.--The amount each 
                Federal Home Loan Bank shall pay shall be 
                determined by the [Federal Housing Finance 
                Board] Director by multiplying the total 
                administrative expenses for any period by the 
                percentage arrived at by dividing--
                          (i) the aggregate amount the [Federal 
                        Housing Finance Board] Director 
                        required such bank to invest in the 
                        Financing Corporation (as of the time 
                        of such determination) under paragraphs 
                        (4) and (5) of subsection (d) (as 
                        computed without regard to paragraph 
                        (3) or (6) of such subsection); by
                          (ii) the aggregate amount the 
                        [Federal Housing Finance Board] 
                        Director required all Federal Home Loan 
                        Banks to invest (as of the time of such 
                        determination) under such paragraphs.
          * * * * * * *
          (8) Regulation by [federal housing finance board] 
        director.--The Directorate shall be subject to such 
        regulations, orders, and directions as the [Federal 
        Housing Finance Board] Director may prescribe.
          (9) No compensation from financing corporation.--
        Members of the Directorate shall receive no pay, 
        allowances, or benefits from the Financing Corporation 
        by reason of their service on the Directorate.
  (c) Powers of Financing Corporation.--The Financing 
Corporation shall have only the following powers, subject to 
the other provisions of this section and such regulations, 
orders, and directions as the [Federal Housing Finance Board] 
Director may prescribe:
          (1) * * *
          * * * * * * *
  (d) Capitalization of Financing Corporation.--
          (1) Purchase of capital stock by federal home loan 
        banks.--
                  (A) In general.--Each Federal Home Loan Bank 
                shall invest in nonvoting capital stock of the 
                Financing Corporation at such times and in such 
                amounts as the [Federal Housing Finance Board] 
                Director may prescribe under this subsection.
                  (B) Par value; transferability.--Each share 
                of stock issued by the Financing Corporation to 
                a Federal Home Loan Bank shall have par value 
                in an amount determined by the [Federal Housing 
                Finance Board] Director and shall be 
                transferable only among the Federal Home Loan 
                Banks in the manner and to the extent 
                prescribed by the [Federal Housing Finance 
                Board] Director at not less than par value.
          * * * * * * *
          (4) Pro rata distribution of 1st $1,000,000,000 
        invested in financing corporation by home loan banks.--
        Of the first $1,000,000,000 in the aggregate which the 
        Thrift Depositor Protection Oversight Board pursuant to 
        section 21B or the [Federal Housing Finance Board] 
        Director under this section (as the case may be) may 
        require the Federal Home Loan Banks collectively to 
        invest in the stock of the Funding Corporation or 
        invest in the capital stock of the Financing 
        Corporation, respectively, the amount which each 
        Federal Home Loan Bank (or any successor to such Bank) 
        shall invest shall be determined by the Thrift 
        Depositor Protection Oversight Board or the [Federal 
        Housing Finance Board] Director (as the case may be) by 
        multiplying the aggregate amount of such payment or 
        investment by all Banks by the percentage appearing in 
        the following table for each such Bank:

  Bank
                                                              Percentage
Federal Home Loan Bank of Boston..............................    1.8629
Federal Home Loan Bank of New York............................    9.1006
Federal Home Loan Bank of Pittsburgh..........................    4.2702
Federal Home Loan Bank of Atlanta.............................   14.4007
Federal Home Loan Bank of Cincinnati..........................    8.2653
Federal Home Loan Bank of Indianapolis........................    5.2863
Federal Home Loan Bank of Chicago.............................    9.6886
Federal Home Loan Bank of Des Moines..........................    6.9301
Federal Home Loan Bank of Dallas..............................    8.8181
Federal Home Loan Bank of Topeka..............................    5.2706
Federal Home Loan Bank of San Francisco.......................   19.9644
Federal Home Loan Bank of Seattle.............................    6.1422

          (5) Pro rata distribution of amounts required to be 
        invested in excess of $1,000,000,000.--With respect to 
        any amount in excess of the $1,000,000,000 amount 
        referred to in paragraph (4) which the [Federal Housing 
        Finance Board] Director may require the Federal Home 
        Loan Banks to invest in capital stock of the Financing 
        Corporation under this subsection, the amount which 
        each Federal Home Loan Bank (or any successor to such 
        bank) shall invest shall be determined by the [Federal 
        Housing Finance Board] Director by multiplying such 
        excess amount by the percentage arrived at by 
        dividing--
                  (A) the sum of the total assets (as of the 
                most recent December 31) held by all insured 
                institutions which are members of such bank; by
                  (B) the sum of the total assets (as of such 
                date) held by all insured institutions which 
                are members of any Federal Home Loan Bank.
          (6) Special provisions relating to maximum amount 
        limitations.--
                  (A) In general.--If the amount any Federal 
                Home Loan Bank is required to invest in capital 
                stock of the Financing Corporation pursuant to 
                a determination by the [Federal Housing Finance 
                Board] Director under paragraph (5) (or under 
                subparagraph (B) of this paragraph) exceeds the 
                maximum investment amount applicable with 
                respect to such bank under paragraph (3) at the 
                time of such determination (hereinafter in this 
                paragraph referred to as the ``excess 
                amount'')--
                          (i) the [Federal Housing Finance 
                        Board] Director shall require each 
                        remaining Federal Home Loan Bank to 
                        invest (in addition to the amount 
                        determined under paragraph (5) for such 
                        remaining bank and subject to the 
                        maximum investment amount applicable 
                        with respect to such remaining bank 
                        under paragraph (3) at the time of such 
                        determination) in such capital stock on 
                        behalf of the bank in the amount 
                        determined under subparagraph (B);
                          (ii) the [Federal Housing Finance 
                        Board] Director shall require the bank 
                        to subsequently purchase the excess 
                        amount of capital stock from the 
                        remaining banks in the manner described 
                        in subparagraph (C); and
                          (iii) the requirements contained in 
                        subparagraphs (D) and (E) relating to 
                        the use of net earnings shall apply to 
                        such bank until the bank has purchased 
                        all of the excess amount of capital 
                        stock.
                  (B) Allocation of excess amount among 
                remaining home loan banks.--The amount each 
                remaining Federal Home Loan Bank shall be 
                required to invest under subparagraph (A)(i) is 
                the amount determined by the [Federal Housing 
                Finance Board] Director by multiplying the 
                excess amount by the percentage arrived at by 
                dividing--
                          (i) the amount of capital stock of 
                        the Financing Corporation held by such 
                        remaining bank at the time of such 
                        determination; by
                          (ii) the aggregate amount of such 
                        stock held by all remaining banks at 
                        such time.
                  (C) Purchase procedure.--The bank on whose 
                behalf an investment in capital stock is made 
                under subparagraph (A)(i) shall purchase, 
                annually and at the issuance price, from each 
                remaining bank an amount of such stock 
                determined by the [Federal Housing Finance 
                Board] Director by multiplying the amount 
                available for such purchases (at the time of 
                such determination) by the percentage 
                determined under subparagraph (B) with respect 
                to such remaining bank until the aggregate 
                amount of such capital stock has been purchased 
                by the bank.
                  (D) Limitation on dividends.--The amount of 
                dividends which may be paid for any year by a 
                bank on whose behalf an investment is made 
                under subparagraph (A)(i) shall not exceed an 
                amount equal to \1/2\ of the net earnings of 
                the bank for the year.
                  (E) Transfer to account for purchase of stock 
                required.--Of the net earnings for any year of 
                a bank on whose behalf an investment is made 
                under subparagraph (A)(i), such amount as is 
                necessary to make the purchases of stock 
                required under subparagraph (A)(ii) shall be 
                placed in a reserve account (established in 
                such manner as the [Federal Housing Finance 
                Board] Director shall prescribe by regulations) 
                the balance in which shall be available only 
                for such purchases.
          (7) Undivided profits defined.--For purposes of 
        paragraph (3), the term ``undivided profits'' means 
        retained earnings minus the sum of--
                  (A) * * *
          * * * * * * *
  (e) Obligations of the Financing Corporation.--
          (1) Limitation on amount of outstanding 
        obligations.--The aggregate amount of obligations of 
        the Financing Corporation which may be outstanding at 
        any time (as determined by the [Federal Housing Finance 
        Board] Director) shall not exceed the lesser of--
                  (A) * * *
          * * * * * * *
          (4) Investment of united states funds in 
        obligations.--Obligations issued under this section by 
        the Financing Corporation with the approval of the 
        [Federal Housing Finance Board] Director shall be 
        lawful investments, and may be accepted as security, 
        for all fiduciary, trust, and public funds the 
        investment or deposit of which shall be under the 
        authority or control of the United States or any 
        officer of the United States.
          * * * * * * *
          (9) Minority participation in public offerings.--The 
        [Chairperson of the Federal Housing Finance Board] 
        Director and the Directorate shall ensure that minority 
        owned or controlled commercial banks, investment 
        banking firms, underwriters, and bond counsels 
        throughout the United States have an opportunity to 
        participate to a significant degree in any public 
        offering of obligations issued under this section.
          * * * * * * *
  (g) Use and Disposition of Assets of the Financing 
Corporation Not Invested in FSLIC.--
          (1) In general.--Subject to such regulations, 
        restrictions, and limitations as may be prescribed by 
        the [Federal Housing Finance Board] Director, assets of 
        the Financing Corporation, which are not invested in 
        capital certificates or capital stock issued by the 
        Federal Savings and Loan Insurance Corporation under 
        section 402(b)(1)(A) of the National Housing Act before 
        the date of enactment of the Financial Institutions 
        Reform, Recovery, and Enforcement Act of 1989 and after 
        such date in capital certificates issued by the FSLIC 
        Resolution Fund, shall be invested in--
                  (A) * * *
          * * * * * * *
  (i) Termination of the Financing Corporation.--
          (1) In general.--The Financing Corporation shall be 
        dissolved, as soon as practicable, after the earlier 
        of--
                  (A) the maturity and full payment of all 
                obligations issued by the Financing Corporation 
                pursuant to this section; or
                  (B) December 31, 2026.
          (2) [Federal housing finance board] Director 
        authority to conclude the affairs of financing 
        corporation.--Effective on the date of the dissolution 
        of the Financing Corporation under paragraph (1), the 
        [Federal Housing Finance Board] Director may exercise, 
        on behalf of the Financing Corporation, any power of 
        the Financing Corporation which the [Federal Housing 
        Finance Board] Director determines to be necessary to 
        settle and conclude the affairs of the Financing 
        Corporation.
  (j) Regulations.--The [Federal Housing Finance Board] 
Director may prescribe such regulations as may be necessary to 
carry out the provisions of this section, including regulations 
defining terms used in this section.
          * * * * * * *

SEC. 21A. THRIFT DEPOSITOR PROTECTION OVERSIGHT BOARD AND RESOLUTION 
                    TRUST CORPORATION.

  (a) * * *
          * * * * * * *
  (c) Disposition of Eligible Residential Properties.--
          (1) * * *
          * * * * * * *
          (9) Definitions.--For purposes of this subsection--
                  (A) * * *
                  (B) Clearinghouses.--The term 
                ``clearinghouses'' means--
                          (i) the State housing finance agency 
                        for the State in which an eligible 
                        residential property is located,
                          (ii) the Office of Community 
                        Investment (or other comparable 
                        division) within the [Federal Housing 
                        Finance Board] Director, and
          * * * * * * *
  (h) Guarantees of FSLIC.--
          (1) Assumption by corporation.--On the date of the 
        enactment of this section, the Corporation shall, by 
        operation of law (and without further action by the 
        Corporation, the Thrift Depositor Protection Oversight 
        Board, the [Federal Housing Finance Board] Director, 
        the Federal Savings and Loan Insurance Corporation, or 
        any court), assume all rights and obligations of the 
        Federal Savings and Loan Insurance Corporation with 
        respect to any guarantee issued by the Federal Savings 
        and Loan Insurance Corporation during the period 
        beginning on January 1, 1989, and ending on such date 
        of enactment, in connection with any loan to any 
        savings association by any Federal Reserve bank or 
        Federal Home Loan Bank (hereinafter in this subsection 
        referred to as a ``lender'').
          * * * * * * *

SEC. 21B. RESOLUTION FUNDING CORPORATION ESTABLISHED.

  (a) * * *
          * * * * * * *
  (c) Management of Funding Corporation.--
          (1) * * *
          * * * * * * *
          (6) Staff.--
                  (A) No paid employees.--The Funding 
                Corporation shall have no paid employees.
                  (B) Powers.--The Directorate may, with the 
                approval of the [Federal Housing Finance Board] 
                Director authorize the officers, employees, or 
                agents of the Federal Home Loan Banks to act 
                for and on behalf of the Funding Corporation in 
                such manner as may be necessary to carry out 
                the functions of the Funding Corporation.
          * * * * * * *
  (e) Capitalization of Funding Corporation, etc.--
          (1) * * *
          * * * * * * *
          (4) Pro rata distribution of first $1,000,000,000 
        invested in funding corporation by federal home loan 
        banks.--Of the first $1,000,000,000 of the aggregate 
        that the [Federal Housing Finance Board] Director 
        (pursuant to section 21) or the Thrift Depositor 
        Protection Oversight Board (under this section) may 
        require the Federal Home Loan Banks collectively to 
        invest in the capital stock of the Financing 
        Corporation or invest in the capital stock of the 
        Funding Corporation, respectively, the amount which 
        each Federal Home Loan Bank (or any successor to the 
        Bank) shall invest shall be determined by the [Federal 
        Housing Finance Board] Director or the Thrift Depositor 
        Protection Oversight Board (as the case may be) by 
        multiplying the aggregate amount of such investment by 
        all Banks by the percentage appearing in the following 
        table for each such Bank:

    Bank                                                      Percentage
      Federal Home Loan Bank of Boston........................    1.8629
      Federal Home Loan Bank of New York......................    9.1006
      Federal Home Loan Bank of Pittsburgh....................    4.2702
      Federal Home Loan Bank of Atlanta.......................   14.4007
      Federal Home Loan Bank of Cincinnati....................    8.2653
      Federal Home Loan Bank of Indianapolis..................    5.2863
      Federal Home Loan Bank of Chicago.......................    9.6886
      Federal Home Loan Bank of Des Moines....................    6.9301
      Federal Home Loan Bank of Dallas........................    8.8181
      Federal Home Loan Bank of Topeka........................    5.2706
      Federal Home Loan Bank of San Francisco.................   19.9644
      Federal Home Loan Bank of Seattle.......................    6.1422

     * * * * * * *
  (f) Obligations of Funding Corporation.--
          (1) * * *
          (2) Interest payments.--The Funding Corporation shall 
        pay the interest due on such obligations from funds 
        obtained for such interest payments from the following 
        sources:
                  (A) * * *
          * * * * * * *
                  (C) Payments by federal home loan banks.--
                          (i) In general.--To the extent that 
                        the amounts available pursuant to 
                        subparagraphs (A) and (B) are 
                        insufficient to cover the amount of 
                        interest payments, each Federal home 
                        loan bank shall pay to the Funding 
                        Corporation in each calendar year, 20.0 
                        percent of the net earnings of that 
                        Bank (after deducting expenses relating 
                        to section 10(j) and operating 
                        expenses).
                          (ii) Annual determination.--[The 
                        Board] The Director annually shall 
                        determine the extent to which the value 
                        of the aggregate amounts paid by the 
                        Federal home loan banks exceeds or 
                        falls short of the value of an annuity 
                        of $300,000,000 per year that commences 
                        on the issuance date and ends on the 
                        final scheduled maturity date of the 
                        obligations, and shall select 
                        appropriate present value factors for 
                        making such determinations, in 
                        consultation with the Secretary of the 
                        Treasury.
                          (iii) Payment term alterations.--[The 
                        Board] The Director shall extend or 
                        shorten the term of the payment 
                        obligations of a Federal home loan bank 
                        under this subparagraph as necessary to 
                        ensure that the value of all payments 
                        made by the Banks is equivalent to the 
                        value of an annuity referred to in 
                        clause (ii).
                          (iv) Term beyond maturity.--If the 
                        Board extends the term of payment 
                        obligations beyond the final scheduled 
                        maturity date for the obligations, each 
                        Federal home loan bank shall continue 
                        to pay 20.0 percent of its net earnings 
                        (after deducting expenses relating to 
                        section 10(j) and operating expenses) 
                        to the Treasury of the United States 
                        until the value of all such payments by 
                        the Federal home loan banks is 
                        equivalent to the value of an annuity 
                        referred to in clause (ii). In the 
                        final year in which the Federal home 
                        loan banks are required to make any 
                        payment to the Treasury under this 
                        subparagraph, if the dollar amount 
                        represented by 20.0 percent of the net 
                        earnings of the Federal home loan banks 
                        exceeds the remaining obligation of the 
                        Banks to the Treasury, [the Finance 
                        Board] the Director shall reduce the 
                        percentage pro rata to a level 
                        sufficient to pay the remaining 
                        obligation.
          * * * * * * *
                  (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.
                  [(E)] (F) Treasury backup.--
                          (i) In general.--To the extent the 
                        amounts available pursuant to 
                        subparagraphs (A), (B), (C), [and (D)] 
                        (D), and (E) are insufficient to cover 
                        the amount of interest payments, the 
                        Secretary of the Treasury shall pay to 
                        the Funding Corporation the additional 
                        amount due, which shall be used by the 
                        Funding Corporation to pay such 
                        interest.

           *       *       *       *       *       *       *


SEC. 22. MEMBER FINANCIAL INFORMATION.

  (a) In General.--In order to enable the Federal Home Loan 
Banks to carry out the provisions of this Act, the Secretary of 
the Treasury, the Comptroller of the Currency, the Chairman of 
the Board of Governors of the Federal Reserve System, the 
Chairperson of the Federal Deposit Insurance Corporation, the 
Chairperson of the National Credit Union Administration, and 
the Director of the Office of Thrift Supervision, upon request 
by any Federal Home Loan Bank--
          (1) shall make available in confidence to any Federal 
        Home Loan Bank, such reports, records, or other 
        information as may be available, relating to the 
        condition of any member of any Federal Home Loan Bank 
        or any institution with respect to which any such Bank 
        has had or contemplates having transactions under this 
        Act; and
          (2) may perform through their examiners or other 
        employees or agents, for the confidential use of the 
        Federal Home Loan Bank, examinations of institutions 
        for which such agency is the appropriate Federal 
        banking regulatory agency.
In addition, the Comptroller of the Currency, the Chairman of 
the Board of Governors of the Federal Reserve System, the 
Chairperson of the National Credit Union Administration, and 
the Director of the Office of Thrift Supervision shall make 
available to [the Board] the Director or any Federal Home Loan 
Bank the financial reports filed by members of any Bank to 
enable [the Board] the Director or a Bank to compile and 
publish cost of funds indices or other financial or statistical 
reports.
  (b) Consent by Members.--Every member of a Federal Home Loan 
Bank shall, as a condition precedent thereto, be deemed--
          (1) to consent to such examinations as the Bank or 
        [the Board] the Director may require for the purposes 
        of this Act;
          (2) to agree that reports of examinations by local, 
        State, or Federal agencies or institutions may be 
        furnished by such authorities to the Bank or [the 
        Board] the Director upon request; and
          (3) to agree to give the Bank or the Federal agency, 
        upon request, such information as they may need to 
        compile and publish cost of funds indices and to 
        publish other reports or statistical summaries 
        pertaining to the activities of Bank members.

SEC. 23. FORMS OF BANK STOCK AND OBLIGATIONS.

  Any stock, debentures, bonds, notes, or other obligations 
issued under the authority of this Act may be issued in 
uncertificated form, utilizing a book entry method, or in 
certificated form under such rules, regulations, or guidelines 
as the [Board of Directors of the Federal Housing Finance 
Board] Director may provide.
  Sec. 24. (a) * * *
  (b) In all respects, but subject to such additional rules and 
regulations as [the Board] the Director may provide, any such 
organization shall be a member for the purposes of this Act.
  [Sec. 25. Each Federal Home Loan Bank shall have succession 
until dissolved by the Board under this Act or by further Act 
of Congress.]

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. 26. (a) Reorganization.--Whenever [the Board] the 
Director finds that the efficient and economical accomplishment 
of the purposes of this Act will be aided by such action, and 
in accordance with such rules, regulations, and orders as [the 
Board] the Director may prescribe, any Federal Home Loan Bank 
may be [liquidated or] reorganized, and its stock paid off and 
retired in whole or in part in connection therewith after 
paying or making provision for the payment of its liabilities. 
In the case of any such [liquidation or] reorganization, any 
other Federal Home Loan Bank may, with the approval of [the 
Board] the Director, acquire assets of any such [liquidated or] 
reorganized bank and assume liabilities thereof, in whole or in 
part.
  (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.

           *       *       *       *       *       *       *

                              ----------                              


FEDERAL NATIONAL MORTGAGE ASSOCIATION CHARTER ACT

           *       *       *       *       *       *       *


TITLE III--NATIONAL MORTGAGE ASSOCIATIONS

           *       *       *       *       *       *       *


                        CREATION OF ASSOCIATION

Sec. 302. (a) * * *
  (b)(1) * * *
  (2) For the purposes set forth in section 301(a), the 
corporation is authorized, pursuant to commitments or 
otherwise, to purchase, service, sell, lend on the security of, 
or otherwise deal in mortgages which are not insured or 
guaranteed as provided in paragraph (1) (such mortgages 
referred to hereinafter as ``conventional mortgages''). No such 
purchase of a conventional mortgage secured by a property 
comprising one- to four-family dwelling units shall be made if 
the outstanding principal balance of the mortgage at the time 
of purchase exceeds 80 per centum of the value of the property 
securing the mortgage, unless (A) the seller retains a 
participation of not less than 10 per centum in the mortgage; 
(B) for such period and under such circumstances as the 
corporation may require, the seller agrees to repurchase or 
replace the mortgage upon demand of the corporation in the 
event that the mortgage is in default; or (C) that portion of 
the unpaid principal balance of the mortgage which is in excess 
of such 80 per centum is guaranteed or insured by a qualified 
insurer as determined by the corporation. The corporation shall 
not issue a commitment to purchase a conventional mortgage 
prior to the date the mortgage is originated, if such mortgage 
is eligible for purchase under the preceding sentence only by 
reason of compliance with the requirements of clause (A) of 
such sentence. The corporation may purchase a conventional 
mortgage which was originated more than one year prior to the 
purchase date only if the seller is the Federal Deposit 
Insurance Corporation, [the Resolution Trust Corporation,] the 
National Credit Union Administration, or any other seller 
currently engaged in mortgage lending or investing activities. 
For the purpose of this section, the term ``conventional 
mortgages'' shall include a mortgage, lien, or other security 
interest on the stock or membership certificate issued to a 
tenant-stockholder or resident-member of a cooperative housing 
corporation, as defined in section 216 of the Internal Revenue 
Code of 1954, and on the proprietary lease, occupancy 
agreement, or right of tenancy in the dwelling unit of the 
tenant-stockholder or resident-member in such cooperative 
housing corporation. The corporation shall establish 
limitations governing the maximum original principal obligation 
of conventional mortgages that are purchased by it; in any case 
in which the corporation purchases a participation interest in 
such a mortgage, the 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 corporation. [Such limitations shall not exceed $93,750 
for a mortgage secured by a single-family residence, $120,000 
for a mortgage secured by a two-family residence, $145,000 for 
a mortgage secured by a three-family residence, and $180,000 
for a mortgage secured by a four-family residence, except that 
such maximum limitations shall be adjusted effective January 1 
of each year beginning with 1981. Each such adjustment shall be 
made by adding to each such amount (as it may have been 
previously adjusted) a percentage thereof equal to the 
percentage increase during the twelve-month period ending with 
the previous October in the national average one-family house 
price in the monthly survey of all major lenders conducted by 
the Federal Housing Finance Board.] 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)). The foregoing 
limitations may be increased by not to exceed 50 per centum 
with respect to properties located in Alaska, Guam, Hawaii, and 
the Virgin Islands. 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.

           *       *       *       *       *       *       *

  (6) The corporation may not [implement any new program] 
initially offer any product (as such term is defined in 
[section 1303] section 1321(f) of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992) [before 
obtaining the approval of the Secretary under section 1322] 
except in accordance with section 1321 of such Act.

           *       *       *       *       *       *       *


         CAPITALIZATION--FEDERAL NATIONAL MORTGAGE ASSOCIATION

Sec. 303. (a) * * *

           *       *       *       *       *       *       *

  (c)(1) * * *
  (2) The corporation may not make any capital distribution 
that would decrease the total capital of the corporation (as 
such term is defined in section 1303 of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992) to an 
amount less than the risk-based capital level for the 
corporation established under section 1361 of such Act or that 
would decrease the core capital of the corporation (as such 
term is defined in section 1303 of such Act) to an amount less 
than the minimum capital level for the corporation established 
under section 1362 of such Act, without prior written approval 
of the distribution by the [Director of the Office of Federal 
Housing Enterprise Oversight of the Department of Housing and 
Urban Development] Director of the Federal Housing Finance 
Agency.

           *       *       *       *       *       *       *


                               MANAGEMENT

Sec. 308. (a) * * *
  (b) The Federal National Mortgage Association shall have a 
board of directors, which shall consist of [eighteen persons, 
five of whom shall be appointed annually by the President of 
the United States, and the remainder of whom] 13 persons, or 
such other number that the Director determines appropriate, who 
shall be elected annually by the common stockholders. [The] 
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 board shall at all times have 
as members [appointed by the President] at least one person 
from the homebuilding industry, at least one person from the 
mortgage lending industry, at least one person from the real 
estate industry, and at least one person from an organization 
that has represented consumer or community interests for not 
less than 2 years or one person who has demonstrated a career 
commitment to the provision of housing for low-income 
households. Each member of the board of directors shall be 
[appointed or] elected for a term ending on the date of the 
next annual meeting of the stockholders[, except that any such 
appointed member may be removed from office by the President 
for good cause]. Any [elective] seat on the board which becomes 
vacant after the annual election of the directors shall be 
filled by the board, but only for the unexpired portion of the 
term. [Any appointive seat which becomes vacant shall be filled 
by appointment of the President, but only for the unexpired 
portion of the term.] Within the limitations of law and 
regulation, the board shall determine the general policies 
which shall govern the operations of the corporation, and shall 
have power to adopt, amend, and repeal by laws governing the 
performance of the powers and duties granted to or imposed upon 
it by law. The board of directors shall select and effect the 
appointment of qualified persons to fill the offices of 
president and vice president, and such other offices as may be 
provided for in the bylaws. Any member of the board who is a 
full-time officer or employee of the Federal Government shall 
not, as such member, receive compensation for his services.

                             GENERAL POWERS

Sec. 309. (a) * * *

           *       *       *       *       *       *       *

  (d)(1) * * *

           *       *       *       *       *       *       *

  (3)(A) Not later than June 30, 1993, and annually thereafter, 
the corporation shall submit a report to the Committee on 
[Banking, Finance and Urban Affairs] Financial Services of the 
House of Representatives and the Committee on Banking, Housing, 
and Urban Affairs of the Senate on (i) the comparability of the 
compensation policies of the corporation with the compensation 
policies of other similar businesses, (ii) in the aggregate, 
the percentage of total cash compensation and payments under 
employee benefit plans (which shall be defined in a manner 
consistent with the corporation's proxy statement for the 
annual meeting of shareholders for the preceding year) earned 
by executive officers of the corporation during the preceding 
year that was based on the corporation's performance, and (iii) 
the comparability of the corporation's financial performance 
with the performance of other similar businesses. The report 
shall include a copy of the corporation's proxy statement for 
the annual meeting of shareholders for the preceding year.
  (B) Notwithstanding the first sentence of paragraph (2), 
after the date of the enactment of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992 , the 
corporation may not enter into any agreement or contract to 
provide any payment of money or other thing of current or 
potential value in connection with the termination of 
employment of any executive officer of the corporation, unless 
such agreement or contract is approved in advance by the 
[Director of the Office of Federal Housing Enterprise Oversight 
of the Department of Housing and Urban Development] Director of 
the Federal Housing Finance Agency. The Director may not 
approve any such agreement or contract unless the Director 
determines that the benefits provided under the agreement or 
contract are comparable to benefits under such agreements for 
officers of other public and private entities involved in 
financial services and housing interests who have comparable 
duties and responsibilities. For purposes of this subparagraph, 
any renegotiation, amendment, or change after such date of 
enactment to any such agreement or contract entered into on or 
before such date of enactment shall be considered entering into 
an agreement or contract.
  (C) For purposes of this paragraph, the term ``executive 
officer'' has the meaning given the term in section 1303 of the 
Federal Housing Enterprises Financial Safety and Soundness Act 
of 1992.
  (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).

           *       *       *       *       *       *       *

  (k)(1) The corporation shall submit to the [Director of the 
Office of Federal Housing Enterprise Oversight of the 
Department of Housing and Urban Development] Director of the 
Federal Housing Finance Agency annual and quarterly reports of 
the financial condition and operations of the corporation which 
shall be in such form, contain such information, and be 
submitted on such dates as the Director shall require.

           *       *       *       *       *       *       *

  (m)(1) The corporation shall collect, maintain, and provide 
to the [Secretary] Director of the Federal Housing Finance 
Agency, in a form determined by the [Secretary] Director, data 
relating to its mortgages on housing consisting of 1 to 4 
dwelling units. Such data shall include--
          (A) * * *

           *       *       *       *       *       *       *

          (E) any other characteristics that the [Secretary] 
        Director of the Federal Housing Finance Agency 
        considers appropriate, to the extent practicable.
  (2) The corporation shall collect, maintain, and provide to 
the [Secretary] Director of the Federal Housing Finance Agency, 
in a form determined by the [Secretary] Director, data relating 
to its mortgages on housing consisting of more than 4 dwelling 
units. Such data shall include--
          (A) * * *

           *       *       *       *       *       *       *

          (H) any other information that the [Secretary] 
        Director of the Federal Housing Finance Agency 
        considers appropriate, to the extent practicable.

           *       *       *       *       *       *       *

  (n)(1) The corporation shall submit to the Committee on 
[Banking, Finance and Urban Affairs] Financial Services of the 
House of Representatives , the Committee on Banking, Housing, 
and Urban Affairs of the Senate, and the [Secretary] Director 
of the Federal Housing Finance Agency a report on its 
activities under subpart B of part 2 of subtitle A of the 
Federal Housing Enterprises Financial Safety and Soundness Act 
of 1992.
  (2) The report under this subsection shall--
          (A) * * *

           *       *       *       *       *       *       *

          (E) include, in aggregate form and by appropriate 
        category, the data provided to the [Secretary] Director 
        of the Federal Housing Finance Agency under subsection 
        (m)(1)(B);

           *       *       *       *       *       *       *

          (L) include any other information that the 
        [Secretary] Director of the Federal Housing Finance 
        Agency considers appropriate.
  (3)(A) The corporation shall make each report under this 
subsection available to the public at the principal and 
regional offices of the corporation.
  (B) Before making a report under this subsection available to 
the public, the corporation may exclude from the report 
information that the [Secretary] Director of the Federal 
Housing Finance Agency has determined is proprietary 
information under section 1326 of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992.

           *       *       *       *       *       *       *

                              ----------                              


               FEDERAL HOME LOAN MORTGAGE CORPORATION ACT

TITLE III--FEDERAL HOME LOAN MORTGAGE CORPORATION

           *       *       *       *       *       *       *


                    ESTABLISHMENT OF THE CORPORATION

Sec. 303. (a)(1) * * *
  (2)(A) The Board of Directors of the Corporation shall 
consist of [18 persons, 5 of whom shall be appointed annually 
by the President of the United States and the remainder of 
whom] 13 persons, or such other number as the Director 
determines appropriate, who shall be elected annually by the 
voting common stockholders. [The] 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 Board of Directors shall at all times have as members 
[appointed by the President of the United States] at least 1 
person from the homebuilding industry, at least 1 person from 
the mortgage lending industry, at least 1 person from the real 
estate industry, and at least 1 person from an organization 
that has represented consumer or community interests for not 
less than 2 years or 1 person who has demonstrated a career 
commitment to the provision of housing for low-income 
households.
  (B) Each member of the Board of Directors shall be [such or] 
elected for a term ending on the date of the next annual 
meeting of the voting common stockholders[, except that any 
appointed member may be removed from office by the President 
for good cause].
  (C) [Any appointive seat on the Board of Directors that 
becomes vacant shall be filled by appointment by the President 
of the United States, but only for the unexpired portion of the 
term.] Any [elective] seat on the Board of Directors that 
becomes vacant after the annual election of the directors shall 
be filled by the Board of Directors, but only for the unexpired 
portion of the term.

           *       *       *       *       *       *       *

  (b)(1) * * *
  (2) The Corporation may not make any capital distribution 
that would decrease the total capital of the Corporation (as 
such term is defined in section 1303 of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992) to an 
amount less than the risk-based capital level for the 
Corporation established under section 1361 of such Act or that 
would decrease the core capital of the Corporation (as such 
term is defined in section 1303 of such Act) to an amount less 
than the minimum capital level for the Corporation established 
under section 1362 of such Act, without prior written approval 
of the distribution by the [Director of the Office of Federal 
Housing Enterprise Oversight of the Department of Housing and 
Urban Development] Director of the Federal Housing Finance 
Agency.

           *       *       *       *       *       *       *

  (h)(1) Not later than June 30, 1993, and annually thereafter, 
the Corporation shall submit a report to the Committee on 
[Banking, Finance and Urban Affairs] Financial Services of the 
House of Representatives and the Committee on Banking, Housing, 
and Urban Affairs of the Senate on (A) the comparability of the 
compensation policies of the Corporation with the compensation 
policies of other similar businesses, (B) in the aggregate, the 
percentage of total cash compensation and payments under 
employee benefit plans (which shall be defined in a manner 
consistent with the Corporation's proxy statement for the 
annual meeting of shareholders for the preceding year) earned 
by executive officers of the Corporation during the preceding 
year that was based on the Corporation's performance, and (C) 
the comparability of the Corporation's financial performance 
with the performance of other similar businesses. The report 
shall include a copy of the Corporation's proxy statement for 
the annual meeting of shareholders for the preceding year.
  (2) Notwithstanding the first sentence of subsection (c), 
after the date of the enactment of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992, the 
Corporation may not enter into any agreement or contract to 
provide any payment of money or other thing of current or 
potential value in connection with the termination of 
employment of any executive officer of the Corporation, unless 
such agreement or contract is approved in advance by the 
[Director of the Office of Federal Housing Enterprise Oversight 
of the Department of Housing and Urban Development] Director of 
the Federal Housing Finance Agency. The Director may not 
approve any such agreement or contract unless the Director 
determines that the benefits provided under the agreement or 
contract are comparable to benefits under such agreements for 
officers of other public and private entities involved in 
financial services and housing interests who have comparable 
duties and responsibilities. For purposes of this paragraph, 
any renegotiation, amendment, or change after such date of 
enactment to any such agreement or contract entered into on or 
before such date of enactment shall be considered entering into 
an agreement or contract.

           *       *       *       *       *       *       *

  (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).

           *       *       *       *       *       *       *


                          MORTGAGE OPERATIONS

Sec. 305. (a)(1) * * *
  (2) No conventional mortgages secured by a property 
comprising one- to four-family dwelling units shall be 
purchased under this section if the outstanding principal 
balance of the mortgage at the time of purchase exceeds 80 per 
centum of the value of the property securing the mortgage, 
unless (A) the seller retains a participation of not less than 
10 per centum in the mortgage; (B) for such period and under 
such circumstances as the Corporation may require, the seller 
agrees to repurchase or replace the mortgage upon demand of the 
Corporation in the event that the mortgage is in default; or 
(C) that portion of the unpaid principal balance of the 
mortgage which is in excess of such 80 per centum is guaranteed 
or insured by a qualified insurer as determined by the 
Corporation. The Corporation shall not issue a commitment to 
purchase a conventional mortgage prior to the date the mortgage 
is originated, if such mortgage is eligible for purchase under 
the preceding sentence only by reason of compliance with the 
requirements of clause (A) of such sentence. The Corporation 
may purchase a conventional mortgage which was originated more 
than one year prior to the purchase date only if the seller is 
the Federal Deposit Insurance Corporation, [the Resolution 
Trust Corporation,] the National Credit Union Administration, 
or any other seller currently engaged in mortgage lending or 
investing activities. With respect to any transaction in which 
a seller contemporaneously sells mortgages originated more than 
one year old prior to the date of sale to the Corporation and 
receives in payment for such mortgages securities representing 
undivided interests only in those mortgages, the Corporation 
shall not impose any fee or charge upon an eligible seller 
which is not a member of a Federal Home Loan Bank which differs 
from that imposed upon an eligible seller which is such a 
member. The Corporation shall establish limitations governing 
the maximum original principal obligation of conventional 
mortgages that are purchased by it; in any case in which the 
Corporation purchases a participation interest in such a 
mortgage, the 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 
Corporation. [Such limitations shall not exceed $93,750 for a 
mortgage secured by a single-family residence, $120,000 for a 
mortgage secured by a two-family residence, and $145,000 for a 
mortgage secured by a three-family residence, and $180,000 for 
a mortgage secured by a four-family residence, except that such 
maximum limitations shall be adjusted effective January 1 of 
each year beginning with 1981. Each such adjustment shall be 
made by adding to each such amount (as it may have been 
previously adjusted) a percentage thereof equal to the 
percentage increase during the twelve-month period ending with 
the previous October in the national average one-family house 
price in the monthly survey of all major lenders conducted by 
the Federal Housing Finance Board.] 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)). The foregoing 
limitations may be increased by not to exceed 50 per centum 
with respect to properties located in Alaska, Guam, Hawaii, and 
the Virgin Islands. 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) The Corporation may not [implement any new program] 
initially offer any product (as such term is defined in 
[section 1303] section 1321(f) of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992) [before 
obtaining the approval of the Secretary under section 1322] 
except in accordance with section 1321 of such Act.

                       OBLIGATIONS AND SECURITIES

Sec. 306. (a) * * *

           *       *       *       *       *       *       *

  (i) Except for fees paid pursuant to sections 303(c) and 
[1316(c)] 306(c) of this Act and assessments pursuant to 
[section 106] section 1316 of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992, no fee or charge 
may be assessed or collected by the United States (including 
any executive department, agency, or independent establishment 
of the United States) on or with regard to the purchase, 
acquisition, sale, pledge, issuance, guarantee, or redemption 
of any mortgage, asset, obligation, or other security by the 
Corporation. No provision of this subsection shall affect the 
purchase of any obligation by any Federal home loan bank 
pursuant to section 303(a).

           *       *       *       *       *       *       *


                        MISCELLANEOUS PROVISIONS

Sec. 307. (a) * * *

           *       *       *       *       *       *       *

  (c)(1) The Corporation shall submit to the [Director of the 
Office of Federal Housing Enterprise Oversight of the 
Department of Housing and Urban Development] Director of the 
Federal Housing Finance Agency annual and quarterly reports of 
the financial condition and operations of the Corporation which 
shall be in such form, contain such information, and be 
submitted on such dates as the Director shall require.

           *       *       *       *       *       *       *

  (e)(1) The Corporation shall collect, maintain, and provide 
to the [Secretary] Director of the Federal Housing Finance 
Agency, in a form determined by the [Secretary] Director, data 
relating to its mortgages on housing consisting of 1 to 4 
dwelling units. Such data shall include--
          (A) * * *

           *       *       *       *       *       *       *

          (E) any other characteristics that the [Secretary] 
        Director of the Federal Housing Finance Agency 
        considers appropriate, to the extent practicable.
  (2) The Corporation shall collect, maintain, and provide to 
the [Secretary] Director of the Federal Housing Finance Agency, 
in a form determined by the [Secretary] Director, data relating 
to its mortgages on housing consisting of more than 4 dwelling 
units. Such data shall include--
          (A) * * *

           *       *       *       *       *       *       *

          (H) any other information that the [Secretary] 
        Director of the Federal Housing Finance Agency 
        considers appropriate, to the extent practicable.

           *       *       *       *       *       *       *

  (f)(1) The Corporation shall submit to the Committee on 
[Banking, Finance and Urban Affairs] Financial Services of the 
House of Representatives, the Committee on Banking, Housing, 
and Urban Affairs of the Senate, and the [Secretary] Director 
of the Federal Housing Finance Agency a report on its 
activities under subpart B of part 2 of subtitle A of the 
Federal Housing Enterprises Financial Safety and Soundness Act 
of 1992.
  (2) The report under this subsection shall--
          (A) * * *

           *       *       *       *       *       *       *

          (E) include, in aggregate form and by appropriate 
        category, the data provided to the [Secretary] Director 
        of the Federal Housing Finance Agency under subsection 
        (e)(1)(B);

           *       *       *       *       *       *       *

          (L) include any other information that the 
        [Secretary] Director of the Federal Housing Finance 
        Agency considers appropriate.

           *       *       *       *       *       *       *

  (3)(A) * * *
  (B) Before making a report under this subsection available to 
the public, the Corporation may exclude from the report 
information that the [Secretary] Director of the Federal 
Housing Finance Agency has determined is proprietary 
information under section 1326 of the Federal Housing 
Enterprises Financial Safety and Soundness Act of 1992.

           *       *       *       *       *       *       *

                              ----------                              -


     FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL ACT OF 1978

TITLE X--FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL

           *       *       *       *       *       *       *


            STATE AND FEDERAL HOUSING FINANCE AGENCY LIAISON

Sec. 1007. To encourage the application of uniform examination 
principles and standards by State and Federal supervisory 
agencies, the Council shall establish a liaison committee 
composed of five representatives of State agencies which 
supervise financial institutions, and one representative of the 
Federal Housing Finance Agency, which shall meet at least twice 
a year with the Council. Members of the liaison committee shall 
receive a reasonable allowance for necessary expenses incurred 
in attending meetings. Members of the Liaison Committee shall 
elect a chairperson from among the members serving on the 
committee.

           *       *       *       *       *       *       *

                              ----------                              


TITLE 18, UNITED STATES CODE

           *       *       *       *       *       *       *


PART I--CRIMES

           *       *       *       *       *       *       *


CHAPTER 11--BRIBERY, GRAFT, AND CONFLICTS OF INTEREST

           *       *       *       *       *       *       *


Sec. 212. Offer of loan or gratuity to financial institution examiner

  (a) * * *

           *       *       *       *       *       *       *

  (c) Definitions.--In this section:
          (1) * * *
          (2) Federal financial institution regulatory 
        agency.--The term ``Federal financial institution 
        regulatory agency'' means--
                  (A) * * *

           *       *       *       *       *       *       *

                  (E) the [Federal Housing Finance Board] 
                Federal Housing Finance Agency;

           *       *       *       *       *       *       *


CHAPTER 31--EMBEZZLEMENT AND THEFT

           *       *       *       *       *       *       *


Sec. 657. Lending, credit and insurance institutions

  Whoever, being an officer, agent or employee of or connected 
in any capacity with the Federal Deposit Insurance Corporation, 
National Credit Union Administration, Office of Thrift 
Supervision, the Resolution Trust Corporation, any Federal home 
loan bank, the [Federal Housing Finance Board] Federal Housing 
Finance Agency, Farm Credit Administration, Department of 
Housing and Urban Development, Federal Crop Insurance 
Corporation, the Secretary of Agriculture acting through the 
Farmers Home Administration or successor agency, the Rural 
Development Administration or successor agency, or the Farm 
Credit System Insurance Corporation, a Farm Credit Bank, a bank 
for cooperatives or any lending, mortgage, insurance, credit or 
savings and loan corporation or association authorized or 
acting under the laws of the United States or any institution, 
other than an insured bank (as defined in section 656), the 
accounts of which are insured by the Federal Deposit Insurance 
Corporation, or by the National Credit Union Administration 
Board or any small business investment company, or any 
community development financial institution receiving financial 
assistance under the Riegle Community Development and 
Regulatory Improvement Act of 1994, and whoever, being a 
receiver of any such institution, or agent or employee of the 
receiver, embezzles, abstracts, purloins or willfully 
misapplies any moneys, funds, credits, securities or other 
things of value belonging to such institution, or pledged or 
otherwise intrusted to its care, shall be fined not more than 
$1,000,000 or imprisoned not more than 30 years, or both; but 
if the amount or value embezzled, abstracted, purloined or 
misapplied does not exceed $1,000, he shall be fined under this 
title or imprisoned not more than one year, or both.

           *       *       *       *       *       *       *


CHAPTER 47--FRAUD AND FALSE STATEMENTS

           *       *       *       *       *       *       *


Sec. 1006. Federal credit institution entries, reports and transactions

  Whoever, being an officer, agent or employee of or connected 
in any capacity with the Federal Deposit Insurance Corporation, 
National Credit Union Administration, Office of Thrift 
Supervision, any Federal home loan bank, the [Federal Housing 
Finance Board] Federal Housing Finance Agency, the Resolution 
Trust Corporation, Farm Credit Administration, Department of 
Housing and Urban Development, Federal Crop Insurance 
Corporation, the Secretary of Agriculture acting through the 
Farmers Home Administration or successor agency, the Rural 
Development Administration or successor agency, or the Farm 
Credit System Insurance Corporation, a Farm Credit Bank, a bank 
for cooperatives or any lending, mortgage, insurance, credit or 
savings and loan corporation or association authorized or 
acting under the laws of the United States or any institution, 
other than an insured bank (as defined in section 656), the 
accounts of which are insured by the Federal Deposit Insurance 
Corporation, or by the National Credit Union Administration 
Board or any small business investment company, with intent to 
defraud any such institution or any other company, body politic 
or corporate, or any individual, or to deceive any officer, 
auditor, examiner or agent of any such institution or of 
department or agency of the United States, makes any false 
entry in any book, report or statement of or to any such 
institution, or without being duly authorized, draws any order 
or bill of exchange, makes any acceptance, or issues, puts 
forth or assigns any note, debenture, bond or other obligation, 
or draft, bill of exchange, mortgage, judgment, or decree, or, 
with intent to defraud the United States or any agency thereof, 
or any corporation, institution, or association referred to in 
this section, participates or shares in or receives directly or 
indirectly any money, profit, property, or benefits through any 
transaction, loan, commission, contract, or any other act of 
any such corporation, institution, or association, shall be 
fined not more than $1,000,000 or imprisoned not more than 30 
years, or both.

           *       *       *       *       *       *       *


Sec. 1014. Loan and credit applications generally; renewals and 
                    discounts; crop insurance

  Whoever knowingly makes any false statement or report, or 
willfully overvalues any land, property or security, for the 
purpose of influencing in any way the action of the Farm Credit 
Administration, Federal Crop Insurance Corporation or a company 
the Corporation reinsures, the Secretary of Agriculture acting 
through the Farmers Home Administration or successor agency, 
the Rural Development Administration or successor agency, any 
Farm Credit Bank, production credit association, agricultural 
credit association, bank for cooperatives, or any division, 
officer, or employee thereof, or of any regional agricultural 
credit corporation established pursuant to law, or a Federal 
land bank, a Federal land bank association, a Federal Reserve 
bank, a small business investment company, as defined in 
section 103 of the Small Business Investment Act of 1958 (15 
U.S.C. 662), or the Small Business Administration in connection 
with any provision of that Act, a Federal credit union, an 
insured State-chartered credit union, any institution the 
accounts of which are insured by the Federal Deposit Insurance 
Corporation, the Office of Thrift Supervision, any Federal home 
loan bank, the [Federal Housing Finance Board] Federal Housing 
Finance Agency, the Federal Deposit Insurance Corporation, the 
Resolution Trust Corporation, the Farm Credit System Insurance 
Corporation, or the National Credit Union Administration Board, 
a branch or agency of a foreign bank (as such terms are defined 
in paragraphs (1) and (3) of section 1(b) of the International 
Banking Act of 1978), or an organization operating under 
section 25 or section 25(a) of the Federal Reserve Act, upon 
any application, advance, discount, purchase, purchase 
agreement, repurchase agreement, commitment, or loan, or any 
change or extension of any of the same, by renewal, deferment 
of action or otherwise, or the acceptance, release, or 
substitution of security therefor, shall be fined not more than 
$1,000,000 or imprisoned not more than 30 years, or both. The 
term ``State-chartered credit union'' includes a credit union 
chartered under the laws of a State of the United States, the 
District of Columbia, or any commonwealth, territory, or 
possession of the United States.

           *       *       *       *       *       *       *


CHAPTER 93--PUBLIC OFFICERS AND EMPLOYEES

           *       *       *       *       *       *       *


Sec.  1905. Disclosure of confidential information generally

  Whoever, being an officer or employee of the United States or 
of any department or agency thereof, any person acting on 
behalf of the [Office of Federal Housing Enterprise Oversight] 
Federal Housing Finance Agency, or agent of the Department of 
Justice as defined in the Antitrust Civil Process Act (15 
U.S.C. 1311-1314), or being an employee of a private sector 
organization who is or was assigned to an agency under chapter 
37 of title 5, publishes, divulges, discloses, or makes known 
in any manner or to any extent not authorized by law any 
information coming to him in the course of his employment or 
official duties or by reason of any examination or 
investigation made by, or return, report or record made to or 
filed with, such department or agency or officer or employee 
thereof, which information concerns or relates to the trade 
secrets, processes, operations, style of work, or apparatus, or 
to the identity, confidential statistical data, amount or 
source of any income, profits, losses, or expenditures of any 
person, firm, partnership, corporation, or association; or 
permits any income return or copy thereof or any book 
containing any abstract or particulars thereof to be seen or 
examined by any person except as provided by law; shall be 
fined under this title, or imprisoned not more than one year, 
or both; and shall be removed from office or employment.

           *       *       *       *       *       *       *

                              ----------                              -


FLOOD DISASTER PROTECTION ACT OF 1973

           *       *       *       *       *       *       *


TITLE I--EXPANSION OF NATIONAL FLOOD INSURANCE PROGRAM

           *       *       *       *       *       *       *


    FLOOD INSURANCE PURCHASE AND COMPLIANCE REQUIREMENTS AND ESCROW 
                                ACCOUNTS

Sec. 102. (a) * * *

           *       *       *       *       *       *       *

  (f) Civil Monetary Penalties for Failure To Require Flood 
Insurance or Notify.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Civil monetary penalties against gse's.--
                  (A) In general.-- If the Federal National 
                Mortgage Association or the Federal Home Loan 
                Mortgage Corporation is found by the [Director 
                of the Office of Federal Housing Enterprise 
                Oversight of the Department of Housing and 
                Urban Development] Director of the Federal 
                Housing Finance Agency to have a pattern or 
                practice of purchasing loans in violation of 
                the procedures established pursuant to 
                subsection (b)(3), the Director of such Office 
                shall assess a civil penalty against such 
                enterprise in the amount provided under 
                paragraph (5) of this subsection.

           *       *       *       *       *       *       *

                              ----------                              -


DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT ACT

           *       *       *       *       *       *       *


                        TRANSFERS TO DEPARTMENT

Sec. 5. (a) * * *

           *       *       *       *       *       *       *

  [(d) Notwithstanding any other provision of this Act, the 
Secretary may not merge or consolidate the Office of Federal 
Housing Enterprise Oversight of the Department, or any of the 
functions or responsibilities of such Office, with any function 
or program administered by the Secretary.]

           *       *       *       *       *       *       *

                              ----------                              -


TITLE 5, UNITED STATES CODE

           *       *       *       *       *       *       *


PART III--EMPLOYEES

           *       *       *       *       *       *       *


SUBPART B--Employment and Retention

           *       *       *       *       *       *       *


CHAPTER 31--AUTHORITY FOR EMPLOYMENT

           *       *       *       *       *       *       *


SUBCHAPTER II--THE SENIOR EXECUTIVE SERVICE

           *       *       *       *       *       *       *


Sec.  3132. Definitions and exclusions

  (a) For the purpose of this subchapter--
          (1) ``agency'' means an Executive agency, except a 
        Government corporation and the Government 
        Accountability Office, but does not include--
                  (A) * * *

           *       *       *       *       *       *       *

                  (D) the Office of the Comptroller of the 
                Currency, the Office of Thrift Supervision, 
                [the Federal Housing Finance Board,] the 
                Resolution Trust Corporation, the Farm Credit 
                Administration, [the Office of Federal Housing 
                Enterprise Oversight of the Department of 
                Housing and Urban Development] the Federal 
                Housing Finance Agency, and the National Credit 
                Union Administration; or or

           *       *       *       *       *       *       *


SUBPART D--Pay and Allowances

           *       *       *       *       *       *       *


CHAPTER 53--PAY RATES AND SYSTEMS

           *       *       *       *       *       *       *


SUBCHAPTER II--EXECUTIVE SCHEDULE PAY RATES

           *       *       *       *       *       *       *


Sec.  5313. Positions at level II

  Level II of the Executive Schedule applies to the following 
positions, for which the annual rate of basic pay shall be the 
rate determined with respect to such level under chapter 11 of 
title 2, as adjusted by section 5318 of this title:
          Deputy Secretary of Defense.

           *       *       *       *       *       *       *

          [Director of the Office of Federal Housing Enterprise 
        Oversight, Department of Housing and Urban 
        Development.]
          Director of the Federal Housing Finance Agency.

           *       *       *       *       *       *       *

                              ----------                              -


INSPECTOR GENERAL ACT OF 1978

           *       *       *       *       *       *       *


   REQUIREMENTS FOR FEDERAL ENTITIES AND DESIGNATED FEDERAL ENTITIES

Sec. 8G. (a) Notwithstanding section 11 of this Act, as used in 
this section--
  (1) * * *
  (2) the term ``designated Federal entity'' means Amtrak, the 
Appalachian Regional Commission, the Board of Governors of the 
Federal Reserve System, the Board for International 
Broadcasting, the Commodity Futures Trading Commission, the 
Consumer Product Safety Commission, the Corporation for Public 
Broadcasting, the Equal Employment Opportunity Commission, the 
Farm Credit Administration, the Federal Communications 
Commission, the Federal Deposit Insurance Corporation , the 
Federal Election Commission, the Election Assistance 
Commission, the [Federal Housing Finance Board] Federal Housing 
Finance Agency, the Federal Labor Relations Authority, the 
Federal Maritime Commission, the Federal Trade Commission, the 
Legal Services Corporation, the National Archives and Records 
Administration, the National Credit Union Administration, the 
National Endowment for the Arts, the National Endowment for the 
Humanities, the National Labor Relations Board, the National 
Science Foundation, the Panama Canal Commission, the Peace 
Corps, the Pension Benefit Guaranty Corporation, the Securities 
and Exchange Commission, the Smithsonian Institution, the 
United States International Trade Commission, the Postal 
Regulatory Commission, and the United States Postal Service;

           *       *       *       *       *       *       *

                              ----------                              -


            SECTION 11 OF THE FEDERAL DEPOSIT INSURANCE ACT

  Sec. 11. (a) * * *

           *       *       *       *       *       *       *

  (t) Agencies May Share Information Without Waiving 
Privilege.--
          (1) * * *
          (2) Definitions.--For purposes of this subsection:
                  (A) Covered agency.--The term ``covered 
                agency'' means any of the following:
                          (i) * * *

           *       *       *       *       *       *       *

                          (vii) The Federal Housing Finance 
                        Agency.

           *       *       *       *       *       *       *

                              ----------                              -


SECTION 10001 OF THE 1997 EMERGENCY SUPPLEMENTAL APPROPRIATIONS ACT FOR 
RECOVERY FROM NATURAL DISASTERS, AND FOR OVERSEAS PEACEKEEPING EFFORTS, 
                       INCLUDING THOSE IN BOSNIA

  Sec. 10001. The Secretary shall submit semi-annually to the 
Committees on Appropriations a list of all contracts and task 
orders issued under such contracts in excess of $250,000 which 
were entered into during the prior 6-month period by the 
Secretary, [the Government National Mortgage Association, and 
the Office of Federal Housing Enterprise Oversight] and the 
Government National Mortgage Association (or by any officer of 
the Department of Housing and Urban Development[, the 
Government National Mortgage Association, or the Office of 
Federal Housing Enterprise Oversight] or the Government 
National Mortgage Association acting in his or her capacity to 
represent the Secretary or these entities). Each listing shall 
identify the parties to the contract, the term and amount of 
the contract, and the subject matter and responsibilities of 
the parties to the contract.
                              ----------                              -


  SECTION 302 OF THE CRANSTON-GONZALEZ NATIONAL AFFORDABLE HOUSING ACT

SEC. 302. NATIONAL HOMEOWNERSHIP TRUST.

      (a) * * *
      (b) Board of Directors.--The Trust shall be governed by a 
Board of Directors, which shall be composed of--
          (1) * * *

           *       *       *       *       *       *       *

          (4) [the chairperson of the Federal Housing Finance 
        Board] the Director of the Federal Housing Finance 
        Agency;

           *       *       *       *       *       *       *

                              ----------                              -


                 RIGHT TO FINANCIAL PRIVACY ACT OF 1978

TITLE XI--RIGHT TO FINANCIAL PRIVACY

           *       *       *       *       *       *       *


                               EXCEPTIONS

Sec. 1113. (a) * * *

           *       *       *       *       *       *       *

  (o) This title shall not apply to the examination by or 
disclosure to the [Federal Housing Finance Board] Federal 
Housing Finance Agency or any of the Federal home loan banks of 
financial records or information in the exercise of the 
[Federal Housing Finance Board's] Federal Housing Finance 
Agency's authority to extend credit (either directly or through 
a Federal home loan bank) to financial institutions or others.

           *       *       *       *       *       *       *

                              ----------                              -


    SECTION 117 OF THE RIEGLE COMMUNITY DEVELOPMENT AND REGULATORY 
                        IMPROVEMENT ACT OF 1994

SEC. 117. STUDIES AND REPORTS; EXAMINATION AND AUDIT.

  (a) * * *

           *       *       *       *       *       *       *

  (e) Consultation.-- In the conduct of the studies required 
under this section, the Fund shall consult, as appropriate, 
with the Comptroller of the Currency, the Federal Deposit 
Insurance Corporation, the Board of Governors of the Federal 
Reserve System, the [Federal Housing Finance Board] Federal 
Housing Finance Agency, the Farm Credit Administration, the 
Director of the Office of Thrift Supervision, the National 
Credit Union Administration Board, Indian tribal governments, 
community reinvestment organizations, civil rights 
organizations, consumer organizations, financial organizations, 
and such representatives of agencies or other persons, at the 
discretion of the Fund.

           *       *       *       *       *       *       *

                              ----------                              -


   MULTIFAMILY ASSISTED HOUSING REFORM AND AFFORDABILITY ACT OF 1997

TITLE V--HUD MULTIFAMILY HOUSING REFORM

           *       *       *       *       *       *       *


   Subtitle A--FHA-Insured Multifamily Housing Mortgage and Housing 
Assistance Restructuring

           *       *       *       *       *       *       *


SEC. 517. RESTRUCTURING TOOLS.

  (a) * * *
  (b) Restructuring Tools.-- In addition to the requirements of 
subsection (a) and to the extent these actions are consistent 
with this section and with the control of the Secretary of 
applicable accounts in the Treasury of the United States, an 
approved mortgage restructuring and rental assistance 
sufficiency plan under this subtitle may include one or more of 
the following actions:
          (1) * * *

           *       *       *       *       *       *       *

          (4) Credit enhancement.-- Providing any additional 
        State or local mortgage credit enhancements and risk-
        sharing arrangements that may be established with State 
        or local housing finance agencies, the [Federal Housing 
        Finance Board] Federal Housing Finance Agency, the 
        Federal National Mortgage Association, and the Federal 
        Home Loan Mortgage Corporation, to a modified or 
        refinanced first mortgage.

           *       *       *       *       *       *       *

                              ----------                              -


              SECTION 3502 OF TITLE 44, UNITED STATES CODE

Sec.  3502. Definitions

  
   As used in this subchapter--
          (1) * * *

           *       *       *       *       *       *       *

          (5) the term ``independent regulatory agency'' means 
        the Board of Governors of the Federal Reserve System, 
        the Commodity Futures Trading Commission, the Consumer 
        Product Safety Commission, the Federal Communications 
        Commission, the Federal Deposit Insurance Corporation, 
        the Federal Energy Regulatory Commission, the [Federal 
        Housing Finance Board] Federal Housing Finance Agency, 
        the Federal Maritime Commission, the Federal Trade 
        Commission, the Interstate Commerce Commission, the 
        Mine Enforcement Safety and Health Review Commission, 
        the National Labor Relations Board, the Nuclear 
        Regulatory Commission, the Occupational Safety and 
        Health Review Commission, the Postal Regulatory 
        Commission, the Securities and Exchange Commission, and 
        any other similar agency designated by statute as a 
        Federal independent regulatory agency or commission;

           *       *       *       *       *       *       *

                              ----------                              -


   LAUNCHING OUR COMMUNITIES' ACCESS TO LOCAL TELEVISION ACT OF 2000

                              ----------                              


TITLE X--LOCAL TV ACT

           *       *       *       *       *       *       *


SEC. 1004. APPROVAL OF LOAN GUARANTEES.

  (a) * * *

           *       *       *       *       *       *       *

  (d) Requirements and Criteria Applicable to Approval.--
          (1) * * *
          (2) Prerequisites.-- In addition to meeting the 
        underwriting criteria under paragraph (1), a loan may 
        not be guaranteed under this Act unless--
                  (A) * * *

           *       *       *       *       *       *       *

                  (D)(i) * * *

           *       *       *       *       *       *       *

                  (iii) no loan may be made for purposes of 
                this Act by a governmental entity or affiliate 
                thereof, or by the Federal Agricultural 
                Mortgage Corporation, or any institution 
                supervised by the [Office of Federal Housing 
                Enterprise Oversight, the Federal Housing 
                Finance Board] Federal Housing Finance Agency, 
                or any affiliate of such entities;

           *       *       *       *       *       *       *

                              ----------                              -


SARBANES-OXLEY ACT OF 2002

           *       *       *       *       *       *       *


TITLE I--PUBLIC COMPANY ACCOUNTING OVERSIGHT BOARD

           *       *       *       *       *       *       *


SEC. 105. INVESTIGATIONS AND DISCIPLINARY PROCEEDINGS.

  (a) * * *
  (b) Investigations.--
          (1) * * *

           *       *       *       *       *       *       *

          (5) Use of documents.--
                  (A) * * *
                  (B) Availability to government agencies.-- 
                Without the loss of its status as confidential 
                and privileged in the hands of the Board, all 
                information referred to in subparagraph (A) 
                may--
                          (i) * * *
                          (ii) in the discretion of the Board, 
                        when determined by the Board to be 
                        necessary to accomplish the purposes of 
                        this Act or to protect investors, be 
                        made available to--
                                  (I) * * *
                                  (II) the appropriate Federal 
                                functional regulator (as 
                                defined in section 509 of the 
                                Gramm-Leach-Bliley Act (15 
                                U.S.C. 6809)), other than the 
                                Commission, and the Director of 
                                the Federal Housing Finance 
                                Agency with respect to an audit 
                                report for an institution 
                                subject to the jurisdiction of 
                                such regulator;

           *       *       *       *       *       *       *


                    Additional and Dissenting Views

                              ----------                              


               ADDITIONAL VIEWS OF REPRESENTATIVE GERLACH

    I voted for H.R. 1427, the Federal Housing Finance Reform 
Act of 2007 that makes important improvements to the regulatory 
structure governing our government sponsored enterprises--
Fannie Mae, Freddie Mac and the Federal Home Loan Banks. The 
work of the Treasury Department in reaching agreement with 
Chairman Frank on the central issues in this debate has struck 
the right balance and I am confidant that additional fine 
tuning will occur as the process moves forward.
    Section 210 of H.R. 1427 includes a provision I authored in 
the last Congress directing the GAO to study the work that 
Federal Home Loan Banks are doing to assist long-term care 
facilities and to advise the new regulator how these lessons 
might be applied to Fannie Mae and Freddie Mac. With a growing 
need for taking care of our elderly population, every 
conceivable response must be explored.
    One area of great interest to me is the role of Federal 
Home Loan Banks in partnering with member institutions and 
local governments to support economic and community 
development. This is in addition to their great work with 
affordable housing and providing liquidity and capital market 
access to member banks.
    I can point to many examples in my own district of how the 
Federal Home Loan Bank of Pittsburgh is already making a 
tremendous difference in economic development. A senior living 
facility for dementia and Alzheimer's patients was helped by 
the Bank's letter of credit. A local elementary school 
benefited from the Bank's low-interest community development 
financing and a small high tech business, Custom Processing 
Services received small business funding through their Banking 
on Business program.
    The Bank is also a catalyst for important partnerships. In 
Reading, Pennsylvania, Al Boscov, who built Boscov's department 
stores to become the largest privately held department store 
chain in the country, has used his energy and commitment to 
public service to found a non-profit, Our City Reading, that 
has partnered with two local institutions, Sovereign Bank and 
Leesport Bank, to access over $1 million of FHLBank grants. 
These funds are being used in Mr. Boscov's inspirational quest 
to revitalize Reading.
    I want to the FHLBank of Pittsburgh be able to do more to 
help Reading, and challenged communities throughout its three-
state district. As federal and state budgets grow tighter, the 
FHLBank System could become an increasingly important partner 
in economic and community development. While they must operate 
programs that enable their members to realize a return on their 
equity, Federal Home Loan Banks can make important 
contributions in meeting these challenges.
    H.R. 1427 adds ``housing finance and community and economic 
development'' to the mission of Federal Home Loan Banks. This 
is an important step and builds off the statutory recognition 
of this role found in FIRREA and the Gramm Leach Bliley Act.
    This statutory change should enable Federal Home Loan Banks 
to do even more as they partner with member institutions, local 
governments, health care providers and other key leaders in 
local communities. This language sends a clear signal of 
congressional intent to the new regulator that the mission of 
the Federal home Loan Banks includes supporting economic and 
community development through advance programs, new business 
activities, letters of credit, investment powers, and the 
acquired member asset programs.
    I think that the letter from the National League of Cities 
that was inserted into the hearing record by Chairman Kanjorski 
says it very well. The letter states, ``The NLC supports 
efforts at the legislative and regulatory level allowing FHL 
Banks and their members to build on these successful 
partnerships with local governments and expand their impact. We 
are not advocating mandatory program impositions on FHL Banks. 
Rather we want to see a statutory and regulatory environment 
that will support and encourage further development of new ways 
to support public finance and infrastructure in a partnership 
with Federal Home Loan Banks, their members, and local 
governments.''
    I wholeheartedly support the sentiment expressed by the 
League and am glad that this legislation will help support that 
goal.

                                                       Jim Gerlach.

                            DISSENTING VIEWS

    H.R. 1427 includes a number of important reforms which, if 
enacted, would significantly enhance the safety and soundness 
regulation of the housing Government Sponsored Enterprises 
(GSEs). The legislation also provides for the creation of an 
Affordable Housing Fund to be financed by Fannie Mae and 
Freddie Mac and distributed largely by state housing agencies. 
During the Committee's consideration of H.R. 1427, Republicans 
offered a number of amendments to address deficiencies in the 
current construction of the affordable Housing Fund. These 
amendments were designed to ensure that the funds were 
delivered more efficiently and effectively to their intended 
beneficiaries--extremely low-income Americans in desperate need 
of decent affordable housing options. By failing to adopt these 
amendments, the Committee missed an opportunity to build a 
broader bipartisan consensus for GSE reform as this legislation 
heads to the House floor and an uncertain future in the Senate.
    There is general consensus on the Committee that serious 
affordable housing needs in our nation are going unmet. The 
disagreement arises over whether legislation designed to 
enhance regulatory oversight of the housing GSEs is a proper 
vehicle for a massive new government program that is extraneous 
to the bill's underlying purpose. Of equal concern is what 
effect assessing Fannie Mae and Freddie Mac over $500 million 
annually for the next five years will have on those Americans 
seeking to purchase a home or refinance an existing mortgage. 
As publicly traded companies accountable to their shareholders, 
Fannie Mae and Freddie Mac will inevitably seek to pass along 
these new assessments to their customers, resulting in what 
amounts to a middle-class mortgage tax on homeowners across 
America.
    We are also concerned that, as presently constituted, the 
Affordable Housing Fund contains insufficient safeguards to 
ensure that grants will be distributed through a process that 
is objective, cost effective, competitive and fully 
transparent. Although the bill prohibits the use of funds for 
political purposes, political considerations could enter into 
the grant process administered by the States, with the 
potential to turn the program into a ``slush fund'' for 
influential politicians and advocacy groups. To address these 
concerns, we offered two amendments at the Committee markup of 
H.R. 1427.
    The Bachus amendment would have redirected the proceeds 
from the Fund to the Affordable Housing Program administered by 
the Federal Home Loan Bank System. The amendment provided for 
the affordable housing funds to be allocated by the newly 
created GSE regulator among the twelve Federal Home Loan Banks, 
with all of the funds in the first year going to areas affected 
by Hurricane Katrina, as in the underlying legislation.
    Established by statute in 1989, the Affordable Housing 
Program requires the Federal Home Loan Banks to direct 10 
percent of their profits to affordable housing projects. 
Universally considered a success, the program features a 
locally-based, competitively-awarded--and most importantly, 
proven--delivery system. Indeed, in her testimony at the March 
15 Full Committee hearing on GSE reform, Sheila Crowley of the 
National Low Income Housing Coalition praised the Affordable 
Housing Program as ``highly successful'' and a ``conceptual 
cousin'' of what the fund in H.R. 1427 hopes to accomplish.
    In the Home Loan Bank program, member financial 
institutions propose projects to be supported by the fund as 
part of their own community outreach programs, in cooperation 
with nonprofit partners of their choice. The twelve individual 
Home Loan Banks fund and administer these grant projects in 
their respective regions.
    This regionally based delivery system allows the funds to 
be tailored to localized housing and community development 
needs. In fact, local input is often cited as one of the most 
important reasons for the success of the Affordable Housing 
Program. There is just enough centralization in the program to 
maintain an organized structure, with rigorous checks and 
balances. Indeed, in its 16-year history, the Affordable 
Housing Program has distributed $2.3 billion in housing 
assistance grants with not one question raised as to the 
effectiveness and the integrity of the grant process. Moreover, 
the local public-private partnerships represent a common-sense 
way to utilize funding in a way that delivery directly to the 
states never could.
    The Home Loan Banks already have the personnel, systems, 
and regulatory oversight in place to effectively implement a 
program that the Congressional Budget Office estimates will 
result in the distribution of $3 billion over the period 2008-
2011. The Banks' Affordable Housing Program has a time-tested 
track record and enjoys the confidence of the affordable 
housing sector and financial services industry alike. This is 
truly an instance in which there is no need to ``reinvent the 
wheel.''
    Like the Bachus amendment, the Biggert amendment sought to 
establish a more effective delivery mechanism for the new 
affordable housing funds, by redirecting the GSEs' 
contributions to a competitive grant program administered by 
the Department of Housing and Urban Development (HUD) and 
modeled after the Federal Home Loan Bank Affordable Housing 
Program. To ensure timely disbursement of the funds, the 
amendment directed HUD to structure the grant program based on 
HUD's HOME program formula and criteria. In addition, the 
amendment capped the Fund at the lesser of 1.2 basis points of 
the GSEs' average total mortgage portfolios or $520 million per 
year, and set a cap on administrative fees of no more than 10 
percent of Affordable Housing Fund dollars. Finally, the 
amendment created a level playing field for both non-profits 
and for-profits to apply for grants, and added a sixth 
criterion for selection of applications that included the 
ability to leverage the grants through use of other funding 
sources.
    Like the Federal Home Loan Bank System, HUD has long 
experience in administering grant programs of the kind 
envisioned by H.R. 1427. HUD administers over one hundred 
housing programs aimed at increasing homeownership, supporting 
community development, and increasing access to affordable 
housing. Among HUD's many housing programs is the HOME program, 
which Congress created in 1990 and today is the largest Federal 
block grant to State and local governments designed exclusively 
to create affordable housing for low-income households, 
allocating approximately $2 billion annually among the States 
and hundreds of localities nationwide.
    Unlike the new GSE regulator, which will have only one 
national office, HUD has a national headquarters, 10 regional 
offices, and 81 field offices. HUD's regional and field offices 
are primarily responsible for administering HUD's programs and 
act as the primary HUD point of contact for States, local 
public housing authorities, communities, organizations, and 
individuals. More importantly, HUD's regional and field offices 
have a firsthand understanding of the needs of local 
communities across the country and provide regional and local 
oversight of federally operated and funded housing programs.
    In sum, adoption of either of the alternatives we offered 
in Committee would have significantly improved the underlying 
legislation, by establishing a more reliable, objective, and 
competitive system for funding affordable housing priorities. 
While we continue to oppose inclusion of an Affordable Housing 
Fund in H.R. 1427, if the provisions are to remain in the bill, 
we intend to work to ensure that this new $3 billion program is 
used not to subsidize the activities of political advocacy 
groups, but rather to address the very affordable housing needs 
that exist in our country.

                                   Spencer Bachus.
                                   Judy Biggert.

                DISSENTING VIEWS OF REPRESENTATIVE PAUL

    H.R. 1427 fails to address the core problems with the 
Government Sponsored Enterprises (GSEs). Furthermore, since 
this legislation creates new government programs that will 
further artificially increase the demand for housing, H.R. 1427 
increases the economic damage that will occur from the bursting 
of the housing bubble. The main problem with the GSEs is the 
special privileges the federal government gives the GSEs. 
According to the Congressional Budget Office, the housing 
related GSEs received almost 20 billion dollars worth of 
indirect federal subsidies in fiscal year 2004 alone, while 
Wayne Passmore of the Federal Reserve estimates the value of 
the GSE's federal subsidies to be between $122 and $182 
billion.
    One of the major privileges the federal government grants 
to the GSEs is a line of credit from the United States 
Treasury. According to some estimates, the line of credit may 
be worth over two billion dollars. GSEs also benefit from an 
explicit grant of legal authority given to the Federal Reserve 
to purchase the debt of the GSEs. GSEs are the only 
institutions besides the United States Treasury granted 
explicit statutory authority to monetize their debt through the 
Federal Reserve. This provision gives the GSEs a source of 
liquidity unavailable to their competitors.
    This implicit promise by the government to bail out the 
GSEs in times of economic difficulty helps the GSEs attract 
investors who are willing to settle for lower yields than they 
would demand in the absence of the subsidy. Thus, the line of 
credit distorts the allocation of capital. More importantly, 
the line of credit is a promise on behalf of the government to 
engage in a massive unconstitutional and immoral income 
transfer from working Americans to holders of GSE debt. This is 
why I offered an amendment to cut off this line of credit.
    The connection between the GSEs and the government helps 
isolate the GSEs' managements from market discipline. This 
isolation from market discipline is the root cause of the 
mismanagement occurring at Fannie and Freddie. After all, if 
investors did not believe that the federal government would 
bail out Fannie and Freddie if the GSEs faced financial crises, 
then investors would have forced the GSEs to provide assurances 
that the GSEs are following accepted management and accounting 
practices before investors would consider Fannie and Freddie to 
be good investments.
    Former Federal Reserve Chairman Alan Greenspan has 
expressed concern that the government subsidies provided to the 
GSEs makes investors underestimate the risk of investing in 
Fannie Mae and Freddie Mac. Although he has endorsed many of 
the regulatory ``solutions'' being considered here today, 
Chairman Greenspan has implicitly admitted the subsidies are 
the true source of the problems with Fannie and Freddie.
    H.R. 1427 compounds these problems by further insulating 
the GSEs from market discipline. By creating a ``world-class'' 
regulator, Congress would send a signal to investors that 
investors need not concern themselves with investigating the 
financial health and stability of Fannie and Freddie since a 
``world-class'' regulator is performing that function.
    However, one of the forgotten lessons of the financial 
scandals of a few years ago is that the market is superior at 
discovering and punishing fraud and other misbehavior than are 
government regulators. After all, the market discovered, and 
began to punish, the accounting irregularities of Enron before 
the government regulators did.
    Concerns have been raised about the new regulator's 
independence from the Treasury Department. Although the 
Treasury now supports the creation of a new regulator, the 
compromise between Treasury and the drafters of H.R. 1427 does 
not address concerns that isolating the regulator from Treasury 
oversight may lead to regulatory capture. Regulatory capture 
occurs when regulators serve the interests of the businesses 
they are supposed to be regulating instead of the public 
interest. While H.R. 1427 does have some provisions that claim 
to minimize the risk of regulatory capture, regulatory capture 
is always a threat where regulators have significant control 
over the operations of an industry. After all, the industry 
obviously has a greater incentive than any other stakeholder to 
influence the behavior of the regulator.
    The flip side of regulatory capture is that managers and 
owners of highly subsidized and regulated industries are more 
concerned with pleasing the regulators than with pleasing 
consumers or investors, since the industries know that 
investors will believe all is well if the regulator is happy. 
Thus, the regulator and the regulated industry may form a 
symbiosis where each looks out for the other's interests while 
ignoring the concerns of investors.
    Furthermore, my colleagues should consider the 
constitutionality of an ``independent regulator.'' The Founders 
provided for three branches of govenment--an executive, a 
judiciary, and a legislature. Each branch was created as 
sovereign in its sphere and there were to be clear lines of 
accountability for each branch. However, independent regulators 
do not fit comfortably within the three branches; nor are they 
totally accountable to any branch. Regulators at these 
independent agencies often make judicial-like decisions, but 
they are not part of the judiciary. They often make rules, 
similar to the ones regarding capital requirements, that have 
the force of law, but independent regulators are not 
legislative. And, of course, independent regulators enforce the 
laws in the same way, as do other parts of the executive 
branch; yet independent regulators lack the day-to-day 
accountability to the executive that provides a check on other 
regulators.
    Thus, these independent regulators have a concentration of 
powers of all three branches and lack direct accountability to 
any of the democratically chosen branches of government. This 
flies in the face of the Founders' opposition to concentrations 
of power and government bureaucracies that lack accountability. 
These concerns are especially relevant considering the 
remarkable degree of power and autonomy this bill gives to the 
regulator. For example, in the scheme established by H.R. 1427 
the regulator's budget is not subject to appropriations. This 
removes a powerful mechanism for holding the regulator 
accountable to Congress. While the regulator is accountable to 
a board of directors, this board may conduct all deliberations 
in private because it is not subject to the sunshine act.
    Ironically, by transferring the risk of widespread mortgage 
defaults to the taxpayers through government subsidies and 
convincing investors that all is well because a ``world-class'' 
regulator is ensuring the GSEs' soundness, the government 
increases the likelihood of a painful crash in the housing 
market. This is because the special privileges of Fannie and 
Freddie have distorted the housing market by allowing Fannie 
and Freddie to attract capital they could not attract under 
pure market conditions. As a result, capital is diverted from 
its most productive uses into housing. This reduces the 
efficacy of the entire market and thus reduces the standard of 
living of all Americans.
    Despite the long-term damage to the economy inflicted by 
the government's interference in the housing market, the 
government's policy of diverting capital into housing creates a 
short-term boom in housing. Like all artificially created 
bubbles, the boom in housing prices cannot last forever. When 
housing prices fall, homeowners will experience difficulty as 
their equity is wiped out. Furthermore, the holders of the 
mortgage debt will also have a loss. These losses will be 
greater than they would have been had government policy not 
actively encouraged over-investment housing.
    H.R. 1427 further distorts the housing market by 
artificially inflating the demand for housing through the 
creation of a national housing trust fund. This fund further 
diverts capital to housing that, absent government 
intervention, would be put to use more closely matching the 
demands of consumers. Thus, this new housing program will 
reduce efficiency and create yet another unconstitutional 
redistribution program.
    Perhaps the Federal Reserve can stave off the day of 
reckoning by purchasing the GSEs' debt and pumping liquidity 
into the housing market, but this cannot hold off the 
inevitable drop in the housing market forever. In fact, 
postponing the necessary and painful market corrections will 
only deepen the inevitable fall. The more people are invested 
in the market, the greater the effects across the economy when 
the bubble bursts.
    Instead of addressing government polices encouraging the 
misallocation of resources to the housing market, H.R. 1427 
further introduces distortion into the housing market by 
expanding the authority of federal regulators to approve the 
introduction of new products by the GSEs. Such regulation 
inevitably delays the introduction of new innovations to the 
market, or even prevents some potentially valuable products 
from making it to the market. Of Course, these new regulations 
are justified in part by the GSEs' government subsidies. We 
once again see how one bad intervention in the market (the 
GSEs' government subsidies) leads to another (the new 
regulations).
    In conclusion, H.R. 1427 compounds the problems with the 
GSEs and may increases the damage that will be inflicted by a 
bursting of the housing bubble. This is because this bill 
creates a new unaccountable regulator and introduces further 
distortions into the housing market via increased regulatory 
power. H.R. 1427 also violates the Constitution by creating yet 
another unaccountable regulator with quasi-executive, judicial, 
and legislative powers. Instead of expanding unconstitutional 
and market distorting government bureaucracies, Congress should 
act to remove taxpayer support from the housing GSEs before the 
bubble bursts and taxpayers are once again forced to bail out 
investors who were misled by foolish government interference in 
the market.

                                                          Ron Paul.

                                  
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