[House Report 118-103]
[From the U.S. Government Publishing Office]


118th Congress     }                                     {      Report
                        HOUSE OF REPRESENTATIVES
 1st Session       }                                     {     118-103

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



 
              MIDDLE CLASS BORROWER PROTECTION ACT OF 2023

                                _______
                                

  June 7, 2023.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. McHenry, from the Committee on Financial Services, submitted the 
                               following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 3564]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 3564) to cancel recent changes made by the 
Federal Housing Finance Agency to the up-front loan level 
pricing adjustments charged by Fannie Mae and Freddie Mac for 
guarantee of single-family mortgages, and for other purposes, 
having considered the same, reports favorably thereon with an 
amendment and recommends that the bill as amended do pass.
    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Middle Class Borrower Protection Act 
of 2023''.

SEC. 2. REPEAL OF RECALIBRATED SINGLE-FAMILY PRICING FRAMEWORK.

   Not later than the expiration of the 60-day period beginning on the 
date of the enactment of this Act, the Director of the Federal Housing 
Finance Agency shall revise the recalibrated single-family pricing 
framework charged by the enterprises for guarantee of mortgages on 
single-family housing so that such fees are identical to the fees of 
the standard single-family pricing framework in effect immediately 
before May 1, 2023.

SEC. 3. RESTRICTIONS ON FHFA ADJUSTMENTS TO SINGLE-FAMILY PRICING 
                    FRAMEWORK.

  (a) Temporary Prohibition on Further Adjustments to Single-family 
Pricing Framework.--During the period beginning upon the date of the 
revision of the recalibrated single-family pricing framework pursuant 
to section 2 and ending 90 days after the submission to the Congress of 
the report required under section 5, the Director may not further 
revise the single-family pricing framework from such framework in 
effect pursuant to the revision required by section 2.
  (b) Administrative Procedures for Adoption of Adjustments to the 
Single-family Pricing Framework.--After expiration of the period 
referred to in subsection (a), when proposing adjustments to the 
single-family pricing framework, the Director shall follow procedures 
that are as close as practicable to those requirements for a Federal 
agency issuing a rule under chapter 5 of title 5, United States Code 
(commonly referred to as the ``Administrative Procedure Act'').
  (c) FHFA Requirement for the Use of Risk-based Pricing.--Section 
1367(b)(2) of the Federal Housing Enterprises Financial Safety and 
Soundness Act of 1992 (12 U.S.C. 4617(b)(2)) is amended by adding at 
the end the following new subparagraph:
                  ``(L) Additional powers as conservator.--The Agency 
                shall, as conservator for an enterprise, to the 
                greatest extent feasible require that any 
                modifications, including increases, decreases, or 
                eliminations, approved to a loan-level pricing 
                adjustment fee, as such term is defined in section 6 of 
                the Middle Class Borrower Protection Act of 2023, 
                charged by an enterprise shall be based on the risk 
                posed by the mortgage loan to the enterprise.''.

SEC. 4. PROHIBITION OF LOAN-LEVEL PRICE ADJUSTMENTS BASED ON DEBT-TO-
                    INCOME RATIO.

   The Director and the enterprises shall not impose any loan-level 
pricing adjustment fee that is based on the ratio of the debt of the 
mortgagor to the income of the mortgagor.

SEC. 5. GAO STUDY.

  (a) Study.--The Comptroller General of the United States shall 
conduct a study of the revisions made by the Federal Housing Finance 
Agency to the standard single-family pricing framework under the 
recalibrated single-family pricing framework to--
          (1) analyze--
                  (A) the methodology, policy considerations, and any 
                other objectives used by the Federal Housing Finance 
                Agency as the basis for such revisions, including the 
                authority cited by the Director under the Federal 
                Housing Enterprises Financial Safety and Soundness Act 
                of 1992 (12 U.S.C. 4501 et seq.) to require such 
                revisions;
                  (B) the data, econometric modeling, and other inputs 
                supplied by the enterprises during the revisions 
                process;
                  (C) the extent to which such revisions comply with 
                the objectives of the Enterprise Regulatory Capital 
                Framework, including the interaction with and treatment 
                of any private mortgage insurance required in 
                connection with a residential mortgage transaction; and
                  (D) the economic impact of such revisions on various 
                classes of lenders and borrowers affected by such 
                revisions; and
          (2) determine the extent to which such revisions--
                  (A) were conducted on the basis of, and how they 
                might deviate from, the principle of risk-based 
                pricing;
                  (B) deviate from the data, econometric modeling, and 
                other inputs supplied by the enterprises during the 
                revisions process;
                  (C) achieve the objectives of the Enterprise 
                Regulatory Capital Framework, including if such 
                revisions have resulted in either a negative 
                profitability gap or negative rate of return on the 
                targeted rate of return on capital for any business 
                segment under the recalibrated single-family pricing 
                framework; and
                  (D) represent any increased risks to the safety and 
                soundness of the enterprises.
  (b) Report.--The Comptroller General shall submit a report to the 
Congress setting forth the findings and conclusions of the study not 
later than the expiration of the 14-month period beginning on the date 
of the enactment of this Act.

SEC. 6. DEFINITIONS.

  In this Act:
          (1) Director.--The term ``Director'' means the Director of 
        the Federal Housing Finance Agency.
          (2) Enterprise.--The term ``enterprise'' has the meaning 
        given such term in section 1303 of the Federal Housing 
        Enterprises Financial Safety and Soundness Act of 1992 (12 
        U.S.C. 4502).
          (3) Loan-level pricing adjustment fee.--The term ``loan-level 
        pricing adjustment fee'' means an up-front fee paid by lenders 
        when a mortgage loan is acquired by an enterprise.
          (4) Recalibrated single-family pricing framework.--The term 
        ``recalibrated single-family pricing framework'' means the 
        loan-level pricing adjustment fee structure as referred to in 
        the announcement of the Federal Housing Finance Agency on 
        January 19, 2023, relating to ``Updates to the Enterprises' 
        Single-Family Pricing Framework'', and set forth in Federal 
        National Mortgage Association Lender Letter LL-2023-01 and 
        Federal Home Loan Mortgage Corporation Bulletin 2023-1.
          (5) Risk-based pricing.--The term ``risk-based pricing'' 
        means the calibration of fees based on the expected credit 
        losses to an enterprise of each single-family mortgage category 
        as defined by an enterprise based on the credit score and loan-
        to-value ratio characteristics of a mortgage.
          (6) Standard single-family pricing framework.--The term 
        ``standard single-family pricing framework'' means the loan-
        level pricing adjustment fee structure in effect on April 30, 
        2023.

                          Purpose and Summary

    Introduced on May 22, 2023, by Representative Warren 
Davidson, H.R. 3564, the Middle Class Borrower Protection Act 
of 2023, would rescind the recently enacted Loan Level Pricing 
Adjustments (LLPA) fee increases and reinstate the LLPA fee 
structure in effect prior to May 1, 2023. It would also 
institute a temporary LLPA fee change freeze, pending a GAO 
review. The bill directs GAO to review the process the Federal 
Housing Finance Agency (FHFA) uses to set LLPA fees, makes 
future LLPA fee changes subject to a standard the 
Administrative Procedure Act's notice and comment procedure, 
requires future conservator-mandated LLPA fee changes to be 
risk-based, and prohibits the imposition of any new LLPA fees 
based on the debt-to-income (DTI) ratio of borrowers.

                  Background and Need For Legislation

    In January 2023, FHFA announced a set of mandated changes 
to the LLPA pricing grid for the housing Government Sponsored 
Enterprises (GSEs), Fannie Mae and Freddie Mac, affecting the 
vast majority of single-family purchase and rate-term refinance 
loans sold to the GSEs. These changes altered the structure of 
the LLPAs, which are one-time upfront fees charged to lenders 
when the GSEs purchase their loans. LLPAs get passed on from 
lenders to borrowers in the form of higher interest rates. 
FHFA's changes increased fees for many higher credit quality 
borrowers (half of all borrowers with FICO scores over 680) 
while simultaneously decreasing fees for 90 percent of lower 
credit quality borrowers (those with FICO scores under 680), 
regardless of how much of a down payment they made.
    Despite strong opposition to FHFA's action--including a 
joint letter on April 25, 2023, by Chairman McHenry and Housing 
Subcommittee Chair Davidson urging FHFA to reverse its 
decision--the new LLPA changes took effect on May 1. On May 17, 
the Housing and Insurance Subcommittee held a hearing on the 
issue where it heard testimony that the new LLPA grids are 
flawed, there exists much confusion over the process FHFA uses 
to price credit risk, and the new pricing means high risk 
borrowers gain while low risk borrowers lose. At the hearing, 
all four bipartisan witnesses agreed that increasing fairness, 
oversight, and accountability in FHFA's pricing process were 
important goals. This is what H.R. 3564 is designed to 
accomplish.

                                Hearing

    The Committee on Financial Services held a hearing 
examining matters relating to H.R. 3564 on May 23, 2023, titled 
``FHFA Oversight: Protecting Homeowners and Taxpayers.''
    The Subcommittee on Housing and Insurance of the Committee 
on Financial Services held a hearing examining matters relating 
to H.R. 3564 on May 17, 2023, titled ``The Current Mortgage 
Market: Undermining Housing Affordability with Politics.''

                        Committee Consideration

    The Committee on Financial Services met in open session on 
May 24, 2023, and ordered H.R. 3564 to be reported favorably to 
the House as amended by a recorded vote of 26 ayes to 22 nays 
(Record vote no. FC-66), a quorum being present. Before the 
question was called to order the bill favorably reported, the 
Committee adopted an amendment in the nature of a substitute 
offered by Mr. Davidson by voice vote.

                            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 order to report legislation and amendments thereto. H.R. 
3564 was ordered reported favorably to the House as amended by 
a recorded vote of 26 ayes to 22 nays (Record vote no. FC-66), 
a quorum being present.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                      Committee Oversight Findings

    Pursuant to clause 3(c) of rule XIII of the Rules of the 
House of Representatives, the findings and recommendations of 
the Committee, based on oversight activities under clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
are incorporated in the descriptive portions of this report.

                    Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the goal of H.R. 3564 is to repeal 
the recently enacted LLPA fee increases and reinstate the LLPA 
fee structure in effect prior to May 1, 2023.

   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 of 1973.

                 Congressional Budget Office Estimates

    Pursuant to clause 3(d)(1) of House rule XIII, 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.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of the 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.

                  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

    With respect to clause 9 of rule XXI of the Rules of the 
House of Representatives, the Committee has carefully reviewed 
the provisions of the bill and states that the provisions of 
the bill do not contain any congressional earmarks, limited tax 
benefits, or limited tariff benefits within the meaning of the 
rule.

                    Duplication of Federal Programs

    In compliance with clause 3(c)(5) of rule XIII of the Rules 
of the House of Representatives, the Committee states that no 
provision of the bill establishes or reauthorizes a program of 
the Federal Government known to be duplicative of another 
Federal program, including any program that was included in a 
report to Congress pursuant to section 21 of the Public Law 
111-139 or the most recent Catalog of Federal Domestic 
Assistance.

             Section-by-Section Analysis of the Legislation

    Section 1. Establishes the short title of the bill as the 
``Middle Class Borrower Protection Act of 2023.''
    Section 2. Requires the Director of FHFA to reinstate the 
LLPA fee structure in effect immediately prior to May 1, 2023, 
within 6 days of enactment.
    Section 3. Establishes a series of restrictions on FHFA's 
ability to make adjustments to the LLPA fee structure. Creates 
a new temporary prohibition on FHFA making further adjustments 
to the LLPA fee structure until 90 days after the submission of 
an independent Government Accountability Office (GAO) review of 
FHFA's LLPA fee setting process. Requires that any future 
adjustments to the LLPA fee structure be carried out as close 
as practicable to the requirements for federal agencies under 
the Administrative Procedure Act. Amends Section 1367(b)(2) of 
the Federal Housing Enterprises Financial Safety and Soundness 
Act of 1992 to require that any future adjustments to the LLPA 
fee structure made by FHFA, when acting as conservator for a 
GSE, shall be based on the risk posed by the mortgage loan to 
that GSE.
    Section 4. Prohibits FHFA or the GSEs from imposing any 
LLPA fee based on the DTI ratio of a borrower.
    Section 5. Requires GAO to conduct a study of FHFA's 
adjustments to the LLPA fee structure, and report its findings 
to Congress within 14 months of enactment, regarding the 
following: the methodology, policy considerations, and any 
other objectives used by FHFA to support the changes; how the 
changes interact with the GSEs' new regulatory capital rule; 
the economic impact of the changes on lenders and borrowers; 
the extent to which the changes adhere to or deviate from the 
principle of risk-based pricing; and if changes represent any 
increased risks to the safety and soundness of the GSEs.
    Section 6. Establishes the definitions used within the Act.

         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 below, as prepared by the 
Office of Legislative Counsel.

         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 (new matter is 
printed in italics and existing law in which no change is 
proposed is shown in roman):

 FEDERAL HOUSING ENTERPRISES FINANCIAL SAFETY AND SOUNDNESS ACT OF 1992




           *       *       *       *       *       *       *
TITLE XIII--GOVERNMENT SPONSORED ENTERPRISES

           *       *       *       *       *       *       *


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

           *       *       *       *       *       *       *


SEC. 1367. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED REGULATED 
                    ENTITIES.

  (a) Appointment of the Agency as Conservator or Receiver.--
          (1) In general.--Notwithstanding any other provision 
        of Federal or State law, the Director may appoint the 
        Agency as conservator or receiver for a regulated 
        entity in the manner provided under paragraph (2) or 
        (4). All references to the conservator or receiver 
        under this section are references to the Agency acting 
        as conservator or receiver.
          (2) Discretionary appointment.--The Agency may, at 
        the discretion of the Director, be appointed 
        conservator or receiver for the purpose of 
        reorganizing, rehabilitating, or winding up the affairs 
        of a regulated entity.
          (3) Grounds for discretionary appointment of 
        conservator or receiver.--The grounds for appointing 
        conservator or receiver for any regulated entity under 
        paragraph (2) are as follows:
                  (A) Assets insufficient for obligations.--The 
                assets of the regulated entity are less than 
                the obligations of the regulated entity to its 
                creditors and others.
                  (B) Substantial dissipation.--Substantial 
                dissipation of assets or earnings due to--
                          (i) any violation of any provision of 
                        Federal or State law; or
                          (ii) any unsafe or unsound practice.
                  (C) Unsafe or unsound condition.--An unsafe 
                or unsound condition to transact business.
                  (D) Cease and desist orders.--Any willful 
                violation of a cease and desist order that has 
                become final.
                  (E) Concealment.--Any concealment of the 
                books, papers, records, or assets of the 
                regulated entity, or any refusal to submit the 
                books, papers, records, or affairs of the 
                regulated entity, for inspection to any 
                examiner or to any lawful agent of the 
                Director.
                  (F) Inability to meet obligations.--The 
                regulated entity is likely to be unable to pay 
                its obligations or meet the demands of its 
                creditors in the normal course of business.
                  (G) Losses.--The regulated entity has 
                incurred or is likely to incur losses that will 
                deplete all or substantially all of its 
                capital, and there is no reasonable prospect 
                for the regulated entity to become adequately 
                capitalized (as defined in section 1364(a)(1)).
                  (H) Violations of law.--Any violation of any 
                law or regulation, or any unsafe or unsound 
                practice or condition that is likely to--
                          (i) cause insolvency or substantial 
                        dissipation of assets or earnings; or
                          (ii) weaken the condition of the 
                        regulated entity.
                  (I) Consent.--The regulated entity, by 
                resolution of its board of directors or its 
                shareholders or members, consents to the 
                appointment.
                  (J) Undercapitalization.--The regulated 
                entity is undercapitalized or significantly 
                undercapitalized (as defined in section 
                1364(a)(3)), and--
                          (i) has no reasonable prospect of 
                        becoming adequately capitalized;
                          (ii) fails to become adequately 
                        capitalized, as required by--
                                  (I) section 1365(a)(1) with 
                                respect to a regulated entity; 
                                or
                                  (II) section 1366(a)(1) with 
                                respect to a significantly 
                                undercapitalized regulated 
                                entity;
                          (iii) fails to submit a capital 
                        restoration plan acceptable to the 
                        Agency within the time prescribed under 
                        section 1369C; or
                          (iv) materially fails to implement a 
                        capital restoration plan submitted and 
                        accepted under section 1369C.
                  (K) Critical undercapitalization.--The 
                regulated entity is critically 
                undercapitalized, as defined in section 
                1364(a)(4).
                  (L) Money laundering.--The Attorney General 
                notifies the Director in writing that the 
                regulated entity has been found guilty of a 
                criminal offense under section 1956 or 1957 of 
                title 18, United States Code, or section 5322 
                or 5324 of title 31, United States Code.
          (4) Mandatory receivership.--
                  (A) In general.--The Director shall appoint 
                the Agency as receiver for a regulated entity 
                if the Director determines, in writing, that--
                          (i) the assets of the regulated 
                        entity are, and during the preceding 60 
                        calendar days have been, less than the 
                        obligations of the regulated entity to 
                        its creditors and others; or
                          (ii) the regulated entity is not, and 
                        during the preceding 60 calendar days 
                        has not been, generally paying the 
                        debts of the regulated entity (other 
                        than debts that are the subject of a 
                        bona fide dispute) as such debts become 
                        due.
                  (B) Periodic determination required for 
                critically undercapitalized regulated entity.--
                If a regulated entity is critically 
                undercapitalized, the Director shall make a 
                determination, in writing, as to whether the 
                regulated entity meets the criteria specified 
                in clause (i) or (ii) of subparagraph (A)--
                          (i) not later than 30 calendar days 
                        after the regulated entity initially 
                        becomes critically undercapitalized; 
                        and
                          (ii) at least once during each 
                        succeeding 30-calendar day period.
                  (C) Determination not required if 
                receivership already in place.--Subparagraph 
                (B) does not apply with respect to a regulated 
                entity in any period during which the Agency 
                serves as receiver for the regulated entity.
                  (D) Receivership terminates 
                conservatorship.--The appointment of the Agency 
                as receiver of a regulated entity under this 
                section shall immediately terminate any 
                conservatorship established for the regulated 
                entity under this title.
          (5) Judicial review.--
                  (A) In general.--If the Agency is appointed 
                conservator or receiver under this section, the 
                regulated entity may, within 30 days of such 
                appointment, bring an action in the United 
                States district court for the judicial district 
                in which the home office of such regulated 
                entity is located, or in the United States 
                District Court for the District of Columbia, 
                for an order requiring the Agency to remove 
                itself as conservator or receiver.
                  (B) Review.--Upon the filing of an action 
                under subparagraph (A), the court shall, upon 
                the merits, dismiss such action or direct the 
                Agency to remove itself as such conservator or 
                receiver.
          (6) Directors not liable for acquiescing in 
        appointment of conservator or receiver.--The members of 
        the board of directors of a regulated entity shall not 
        be liable to the shareholders or creditors of the 
        regulated entity for acquiescing in or consenting in 
        good faith to the appointment of the Agency as 
        conservator or receiver for that regulated entity.
          (7) Agency not subject to any other federal agency.--
        When acting as conservator or receiver, the Agency 
        shall not be subject to the direction or supervision of 
        any other agency of the United States or any State in 
        the exercise of the rights, powers, and privileges of 
        the Agency.
  (b) Powers and Duties of the Agency as Conservator or 
Receiver.--
          (1) Rulemaking authority of the agency.--The Agency 
        may prescribe such regulations as the Agency determines 
        to be appropriate regarding the conduct of 
        conservatorships or receiverships.
          (2) General powers.--
                  (A) Successor to regulated entity.--The 
                Agency shall, as conservator or receiver, and 
                by operation of law, immediately succeed to--
                          (i) all rights, titles, powers, and 
                        privileges of the regulated entity, and 
                        of any stockholder, officer, or 
                        director of such regulated entity with 
                        respect to the regulated entity and the 
                        assets of the regulated entity; and
                          (ii) title to the books, records, and 
                        assets of any other legal custodian of 
                        such regulated entity.
                  (B) Operate the regulated entity.--The Agency 
                may, as conservator or receiver--
                          (i) take over the assets of and 
                        operate the regulated entity with all 
                        the powers of the shareholders, the 
                        directors, and the officers of the 
                        regulated entity and conduct all 
                        business of the regulated entity;
                          (ii) collect all obligations and 
                        money due the regulated entity;
                          (iii) perform all functions of the 
                        regulated entity in the name of the 
                        regulated entity which are consistent 
                        with the appointment as conservator or 
                        receiver;
                          (iv) preserve and conserve the assets 
                        and property of the regulated entity; 
                        and
                          (v) provide by contract for 
                        assistance in fulfilling any function, 
                        activity, action, or duty of the Agency 
                        as conservator or receiver.
                  (C) Functions of officers, directors, and 
                shareholders of a regulated entity.--The Agency 
                may, by regulation or order, provide for the 
                exercise of any function by any stockholder, 
                director, or officer of any regulated entity 
                for which the Agency has been named conservator 
                or receiver.
                  (D) Powers as conservator.--The Agency may, 
                as conservator, take such action as may be--
                          (i) necessary to put the regulated 
                        entity in a sound and solvent 
                        condition; and
                          (ii) appropriate to carry on the 
                        business of the regulated entity and 
                        preserve and conserve the assets and 
                        property of the regulated entity.
                  (E) Additional powers as receiver.--In any 
                case in which the Agency is acting as receiver, 
                the Agency shall place the regulated entity in 
                liquidation and proceed to realize upon the 
                assets of the regulated entity in such manner 
                as the Agency deems appropriate, including 
                through the sale of assets, the transfer of 
                assets to a limited-life regulated entity 
                established under subsection (i), or the 
                exercise of any other rights or privileges 
                granted to the Agency under this paragraph.
                  (F) Organization of new enterprise.--The 
                Agency may, as receiver for an enterprise, 
                organize a successor enterprise that will 
                operate pursuant to subsection (i).
                  (G) Transfer or sale of assets and 
                liabilities.--The Agency may, as conservator or 
                receiver, transfer or sell any asset or 
                liability of the regulated entity in default, 
                and may do so without any approval, assignment, 
                or consent with respect to such transfer or 
                sale.
                  (H) Payment of valid obligations.--The 
                Agency, as conservator or receiver, shall, to 
                the extent of proceeds realized from the 
                performance of contracts or sale of the assets 
                of a regulated entity, pay all valid 
                obligations of the regulated entity that are 
                due and payable at the time of the appointment 
                of the Agency as conservator or receiver, in 
                accordance with the prescriptions and 
                limitations of this section.
                  (I) Subpoena authority.--
                          (i) In general.--
                                  (I) Agency authority.--The 
                                Agency may, as conservator or 
                                receiver, and for purposes of 
                                carrying out any power, 
                                authority, or duty with respect 
                                to a regulated entity 
                                (including determining any 
                                claim against the regulated 
                                entity and determining and 
                                realizing upon any asset of any 
                                person in the course of 
                                collecting money due the 
                                regulated entity), exercise any 
                                power established under section 
                                1348.
                                  (II) Applicability of law.--
                                The provisions of section 1348 
                                shall apply with respect to the 
                                exercise of any power under 
                                this subparagraph, in the same 
                                manner as such provisions apply 
                                under that section.
                          (ii) Subpoena.--A subpoena or 
                        subpoena duces tecum may be issued 
                        under clause (i) only by, or with the 
                        written approval of, the Director, or 
                        the designee of the Director.
                          (iii) Rule of construction.--This 
                        subsection shall not be construed to 
                        limit any rights that the Agency, in 
                        any capacity, might otherwise have 
                        under section 1317 or 1379B.
                  (J) Incidental powers.--The Agency may, as 
                conservator or receiver--
                          (i) exercise all powers and 
                        authorities specifically granted to 
                        conservators or receivers, 
                        respectively, under this section, and 
                        such incidental powers as shall be 
                        necessary to carry out such powers; and
                          (ii) take any action authorized by 
                        this section, which the Agency 
                        determines is in the best interests of 
                        the regulated entity or the Agency.
                  (K) Other provisions.--
                          (i) Shareholders and creditors of 
                        failed regulated entity.--
                        Notwithstanding any other provision of 
                        law, the appointment of the Agency as 
                        receiver for a regulated entity 
                        pursuant to paragraph (2) or (4) of 
                        subsection (a) and its succession, by 
                        operation of law, to the rights, 
                        titles, powers, and privileges 
                        described in subsection (b)(2)(A) shall 
                        terminate all rights and claims that 
                        the stockholders and creditors of the 
                        regulated entity may have against the 
                        assets or charter of the regulated 
                        entity or the Agency arising as a 
                        result of their status as stockholders 
                        or creditors, except for their right to 
                        payment, resolution, or other 
                        satisfaction of their claims, as 
                        permitted under subsections (b)(9), 
                        (c), and (e).
                          (ii) Assets of regulated entity.--
                        Notwithstanding any other provision of 
                        law, for purposes of this section, the 
                        charter of a regulated entity shall not 
                        be considered an asset of the regulated 
                        entity.
                  (L) Additional powers as conservator.--The 
                Agency shall, as conservator for an enterprise, 
                to the greatest extent feasible require that 
                any modifications, including increases, 
                decreases, or eliminations, approved to a loan-
                level pricing adjustment fee, as such term is 
                defined in section 6 of the Middle Class 
                Borrower Protection Act of 2023, charged by an 
                enterprise shall be based on the risk posed by 
                the mortgage loan to the enterprise.
          (3) Authority of receiver to determine claims.--
                  (A) In general.--The Agency may, as receiver, 
                determine claims in accordance with the 
                requirements of this subsection and any 
                regulations prescribed under paragraph (4).
                  (B) Notice requirements.--The receiver, in 
                any case involving the liquidation or winding 
                up of the affairs of a closed regulated entity, 
                shall--
                          (i) promptly publish a notice to the 
                        creditors of the regulated entity to 
                        present their claims, together with 
                        proof, to the receiver by a date 
                        specified in the notice which shall be 
                        not less than 90 days after the date of 
                        publication of such notice; and
                          (ii) republish such notice 
                        approximately 1 month and 2 months, 
                        respectively, after the date of 
                        publication under clause (i).
                  (C) Mailing required.--The receiver shall 
                mail a notice similar to the notice published 
                under subparagraph (B)(i) at the time of such 
                publication to any creditor shown on the books 
                of the regulated entity--
                          (i) at the last address of the 
                        creditor appearing in such books; or
                          (ii) upon discovery of the name and 
                        address of a claimant not appearing on 
                        the books of the regulated entity, 
                        within 30 days after the discovery of 
                        such name and address.
          (4) Rulemaking authority relating to determination of 
        claims.--Subject to subsection (c), the Director may 
        prescribe regulations regarding the allowance or 
        disallowance of claims by the receiver and providing 
        for administrative determination of claims and review 
        of such determination.
          (5) Procedures for determination of claims.--
                  (A) Determination period.--
                          (i) In general.--Before the end of 
                        the 180-day period beginning on the 
                        date on which any claim against a 
                        regulated entity is filed with the 
                        Agency as receiver, the Agency shall 
                        determine whether to allow or disallow 
                        the claim and shall notify the claimant 
                        of any determination with respect to 
                        such claim.
                          (ii) Extension of time.--The period 
                        described in clause (i) may be extended 
                        by a written agreement between the 
                        claimant and the Agency.
                          (iii) Mailing of notice sufficient.--
                        The requirements of clause (i) shall be 
                        deemed to be satisfied if the notice of 
                        any determination with respect to any 
                        claim is mailed to the last address of 
                        the claimant which appears--
                                  (I) on the books of the 
                                regulated entity;
                                  (II) in the claim filed by 
                                the claimant; or
                                  (III) in documents submitted 
                                in proof of the claim.
                          (iv) Contents of notice of 
                        disallowance.--If any claim filed under 
                        clause (i) is disallowed, the notice to 
                        the claimant shall contain--
                                  (I) a statement of each 
                                reason for the disallowance; 
                                and
                                  (II) the procedures available 
                                for obtaining agency review of 
                                the determination to disallow 
                                the claim or judicial 
                                determination of the claim.
                  (B) Allowance of proven claim.--The receiver 
                shall allow any claim received on or before the 
                date specified in the notice published under 
                paragraph (3)(B)(i) by the receiver from any 
                claimant which is proved to the satisfaction of 
                the receiver.
                  (C) Disallowance of claims filed after filing 
                period.--Claims filed after the date specified 
                in the notice published under paragraph 
                (3)(B)(i), or the date specified under 
                paragraph (3)(C), shall be disallowed and such 
                disallowance shall be final.
                  (D) Authority to disallow claims.--
                          (i) In general.--The receiver may 
                        disallow any portion of any claim by a 
                        creditor or claim of security, 
                        preference, or priority which is not 
                        proved to the satisfaction of the 
                        receiver.
                          (ii) Payments to less than fully 
                        secured creditors.--In the case of a 
                        claim of a creditor against a regulated 
                        entity which is secured by any property 
                        or other asset of such regulated 
                        entity, the receiver--
                                  (I) may treat the portion of 
                                such claim which exceeds an 
                                amount equal to the fair market 
                                value of such property or other 
                                asset as an unsecured claim 
                                against the regulated entity; 
                                and
                                  (II) may not make any payment 
                                with respect to such unsecured 
                                portion of the claim, other 
                                than in connection with the 
                                disposition of all claims of 
                                unsecured creditors of the 
                                regulated entity.
                          (iii) Exceptions.--No provision of 
                        this paragraph shall apply with respect 
                        to--
                                  (I) any extension of credit 
                                from any Federal Reserve Bank, 
                                Federal Home Loan Bank, or the 
                                United States Treasury; or
                                  (II) any security interest in 
                                the assets of the regulated 
                                entity securing any such 
                                extension of credit.
                  (E) No judicial review of determination 
                pursuant to subparagraph (d).--No court may 
                review the determination of the Agency under 
                subparagraph (D) to disallow a claim.
                  (F) Legal effect of filing.--
                          (i) Statute of limitation tolled.--
                        For purposes of any applicable statute 
                        of limitations, the filing of a claim 
                        with the receiver shall constitute a 
                        commencement of an action.
                          (ii) No prejudice to other actions.--
                        Subject to paragraph (10), the filing 
                        of a claim with the receiver shall not 
                        prejudice any right of the claimant to 
                        continue any action which was filed 
                        before the date of the appointment of 
                        the receiver, subject to the 
                        determination of claims by the 
                        receiver.
          (6) Provision for judicial determination of claims.--
                  (A) In general.--The claimant may file suit 
                on a claim (or continue an action commenced 
                before the appointment of the receiver) in the 
                district or territorial court of the United 
                States for the district within which the 
                principal place of business of the regulated 
                entity is located or the United States District 
                Court for the District of Columbia (and such 
                court shall have jurisdiction to hear such 
                claim), before the end of the 60-day period 
                beginning on the earlier of--
                          (i) the end of the period described 
                        in paragraph (5)(A)(i) with respect to 
                        any claim against a regulated entity 
                        for which the Agency is receiver; or
                          (ii) the date of any notice of 
                        disallowance of such claim pursuant to 
                        paragraph (5)(A)(i).
                  (B) Statute of limitations.--A claim shall be 
                deemed to be disallowed (other than any portion 
                of such claim which was allowed by the 
                receiver), and such disallowance shall be 
                final, and the claimant shall have no further 
                rights or remedies with respect to such claim, 
                if the claimant fails, before the end of the 
                60-day period described under subparagraph (A), 
                to file suit on such claim (or continue an 
                action commenced before the appointment of the 
                receiver).
          (7) Review of claims.--
                  (A) Other review procedures.--
                          (i) In general.--The Agency shall 
                        establish such alternative dispute 
                        resolution processes as may be 
                        appropriate for the resolution of 
                        claims filed under paragraph (5)(A)(i).
                          (ii) Criteria.--In establishing 
                        alternative dispute resolution 
                        processes, the Agency shall strive for 
                        procedures which are expeditious, fair, 
                        independent, and low cost.
                          (iii) Voluntary binding or nonbinding 
                        procedures.--The Agency may establish 
                        both binding and nonbinding processes 
                        under this subparagraph, which may be 
                        conducted by any government or private 
                        party. All parties, including the 
                        claimant and the Agency, must agree to 
                        the use of the process in a particular 
                        case.
                  (B) Consideration of incentives.--The Agency 
                shall seek to develop incentives for claimants 
                to participate in the alternative dispute 
                resolution process.
          (8) Expedited determination of claims.--
                  (A) Establishment required.--The Agency shall 
                establish a procedure for expedited relief 
                outside of the routine claims process 
                established under paragraph (5) for claimants 
                who--
                          (i) allege the existence of legally 
                        valid and enforceable or perfected 
                        security interests in assets of any 
                        regulated entity for which the Agency 
                        has been appointed receiver; and
                          (ii) allege that irreparable injury 
                        will occur if the routine claims 
                        procedure is followed.
                  (B) Determination period.--Before the end of 
                the 90-day period beginning on the date on 
                which any claim is filed in accordance with the 
                procedures established under subparagraph (A), 
                the Director shall--
                          (i) determine--
                                  (I) whether to allow or 
                                disallow such claim; or
                                  (II) whether such claim 
                                should be determined pursuant 
                                to the procedures established 
                                under paragraph (5); and
                          (ii) notify the claimant of the 
                        determination, and if the claim is 
                        disallowed, provide a statement of each 
                        reason for the disallowance and the 
                        procedure for obtaining agency review 
                        or judicial determination.
                  (C) Period for filing or renewing suit.--Any 
                claimant who files a request for expedited 
                relief shall be permitted to file a suit, or to 
                continue a suit filed before the date of 
                appointment of the receiver, seeking a 
                determination of the rights of the claimant 
                with respect to such security interest after 
                the earlier of--
                          (i) the end of the 90-day period 
                        beginning on the date of the filing of 
                        a request for expedited relief; or
                          (ii) the date on which the Agency 
                        denies the claim.
                  (D) Statute of limitations.--If an action 
                described under subparagraph (C) is not filed, 
                or the motion to renew a previously filed suit 
                is not made, before the end of the 30-day 
                period beginning on the date on which such 
                action or motion may be filed under 
                subparagraph (B), the claim shall be deemed to 
                be disallowed as of the end of such period 
                (other than any portion of such claim which was 
                allowed by the receiver), such disallowance 
                shall be final, and the claimant shall have no 
                further rights or remedies with respect to such 
                claim.
                  (E) Legal effect of filing.--
                          (i) Statute of limitation tolled.--
                        For purposes of any applicable statute 
                        of limitations, the filing of a claim 
                        with the receiver shall constitute a 
                        commencement of an action.
                          (ii) No prejudice to other actions.--
                        Subject to paragraph (10), the filing 
                        of a claim with the receiver shall not 
                        prejudice any right of the claimant to 
                        continue any action that was filed 
                        before the appointment of the receiver, 
                        subject to the determination of claims 
                        by the receiver.
          (9) Payment of claims.--
                  (A) In general.--The receiver may, in the 
                discretion of the receiver, and to the extent 
                that funds are available from the assets of the 
                regulated entity, pay creditor claims, in such 
                manner and amounts as are authorized under this 
                section, which are--
                          (i) allowed by the receiver;
                          (ii) approved by the Agency pursuant 
                        to a final determination pursuant to 
                        paragraph (7) or (8); or
                          (iii) determined by the final 
                        judgment of any court of competent 
                        jurisdiction.
                  (B) Agreements against the interest of the 
                agency.--No agreement that tends to diminish or 
                defeat the interest of the Agency in any asset 
                acquired by the Agency as receiver under this 
                section shall be valid against the Agency 
                unless such agreement is in writing and 
                executed by an authorized officer or 
                representative of the regulated entity.
                  (C) Payment of dividends on claims.--The 
                receiver may, in the sole discretion of the 
                receiver, pay from the assets of the regulated 
                entity dividends on proved claims at any time, 
                and no liability shall attach to the Agency by 
                reason of any such payment, for failure to pay 
                dividends to a claimant whose claim is not 
                proved at the time of any such payment.
                  (D) Rulemaking authority of the director.--
                The Director may prescribe such rules, 
                including definitions of terms, as the Director 
                deems appropriate to establish a single uniform 
                interest rate for, or to make payments of post-
                insolvency interest to creditors holding proven 
                claims against the receivership estates of the 
                regulated entity, following satisfaction by the 
                receiver of the principal amount of all 
                creditor claims.
          (10) Suspension of legal actions.--
                  (A) In general.--After the appointment of a 
                conservator or receiver for a regulated entity, 
                the conservator or receiver may, in any 
                judicial action or proceeding to which such 
                regulated entity is or becomes a party, request 
                a stay for a period not to exceed--
                          (i) 45 days, in the case of any 
                        conservator; and
                          (ii) 90 days, in the case of any 
                        receiver.
                  (B) Grant of stay by all courts required.--
                Upon receipt of a request by the conservator or 
                receiver under subparagraph (A) for a stay of 
                any judicial action or proceeding in any court 
                with jurisdiction of such action or proceeding, 
                the court shall grant such stay as to all 
                parties.
          (11) Additional rights and duties.--
                  (A) Prior final adjudication.--The Agency 
                shall abide by any final unappealable judgment 
                of any court of competent jurisdiction which 
                was rendered before the appointment of the 
                Agency as conservator or receiver.
                  (B) Rights and remedies of conservator or 
                receiver.--In the event of any appealable 
                judgment, the Agency as conservator or 
                receiver--
                          (i) shall have all of the rights and 
                        remedies available to the regulated 
                        entity (before the appointment of such 
                        conservator or receiver) and the 
                        Agency, including removal to Federal 
                        court and all appellate rights; and
                          (ii) shall not be required to post 
                        any bond in order to pursue such 
                        remedies.
                  (C) No attachment or execution.--No 
                attachment or execution may issue by any court 
                upon assets in the possession of the receiver, 
                or upon the charter, of a regulated entity for 
                which the Agency has been appointed receiver.
                  (D) Limitation on judicial review.--Except as 
                otherwise provided in this subsection, no court 
                shall have jurisdiction over--
                          (i) any claim or action for payment 
                        from, or any action seeking a 
                        determination of rights with respect 
                        to, the assets or charter of any 
                        regulated entity for which the Agency 
                        has been appointed receiver; or
                          (ii) any claim relating to any act or 
                        omission of such regulated entity or 
                        the Agency as receiver.
                  (E) Disposition of assets.--In exercising any 
                right, power, privilege, or authority as 
                conservator or receiver in connection with any 
                sale or disposition of assets of a regulated 
                entity for which the Agency has been appointed 
                conservator or receiver, the Agency shall 
                conduct its operations in a manner which--
                          (i) maximizes the net present value 
                        return from the sale or disposition of 
                        such assets;
                          (ii) minimizes the amount of any loss 
                        realized in the resolution of cases; 
                        and
                          (iii) ensures adequate competition 
                        and fair and consistent treatment of 
                        offerors.
          (12) Statute of limitations for actions brought by 
        conservator or receiver.--
                  (A) In general.--Notwithstanding any 
                provision of any contract, the applicable 
                statute of limitations with regard to any 
                action brought by the Agency as conservator or 
                receiver shall be--
                          (i) in the case of any contract 
                        claim, the longer of--
                                  (I) the 6-year period 
                                beginning on the date on which 
                                the claim accrues; or
                                  (II) the period applicable 
                                under State law; and
                          (ii) in the case of any tort claim, 
                        the longer of--
                                  (I) the 3-year period 
                                beginning on the date on which 
                                the claim accrues; or
                                  (II) the period applicable 
                                under State law.
                  (B) Determination of the date on which a 
                claim accrues.--For purposes of subparagraph 
                (A), the date on which the statute of 
                limitations begins to run on any claim 
                described in such subparagraph shall be the 
                later of--
                          (i) the date of the appointment of 
                        the Agency as conservator or receiver; 
                        or
                          (ii) the date on which the cause of 
                        action accrues.
          (13) Revival of expired state causes of action.--
                  (A) In general.--In the case of any tort 
                claim described under clause (ii) for which the 
                statute of limitations applicable under State 
                law with respect to such claim has expired not 
                more than 5 years before the appointment of the 
                Agency as conservator or receiver, the Agency 
                may bring an action as conservator or receiver 
                on such claim without regard to the expiration 
                of the statute of limitations applicable under 
                State law.
                  (B) Claims described.--A tort claim referred 
                to under clause (i) is a claim arising from 
                fraud, intentional misconduct resulting in 
                unjust enrichment, or intentional misconduct 
                resulting in substantial loss to the regulated 
                entity.
          (14) Accounting and recordkeeping requirements.--
                  (A) In general.--The Agency as conservator or 
                receiver shall, consistent with the accounting 
                and reporting practices and procedures 
                established by the Agency, maintain a full 
                accounting of each conservatorship and 
                receivership or other disposition of a 
                regulated entity in default.
                  (B) Annual accounting or report.--With 
                respect to each conservatorship or 
                receivership, the Agency shall make an annual 
                accounting or report available to the Board, 
                the Comptroller General of the United States, 
                the Committee on Banking, Housing, and Urban 
                Affairs of the Senate, and the Committee on 
                Financial Services of the House of 
                Representatives.
                  (C) Availability of reports.--Any report 
                prepared under subparagraph (B) shall be made 
                available by the Agency upon request to any 
                shareholder of a regulated entity or any member 
                of the public.
                  (D) Recordkeeping requirement.--After the end 
                of the 6-year period beginning on the date on 
                which the conservatorship or receivership is 
                terminated by the Director, the Agency may 
                destroy any records of such regulated entity 
                which the Agency, in the discretion of the 
                Agency, determines to be unnecessary, unless 
                directed not to do so by a court of competent 
                jurisdiction or governmental agency, or 
                prohibited by law.
          (15) Fraudulent transfers.--
                  (A) In general.--The Agency, as conservator 
                or receiver, may avoid a transfer of any 
                interest of an entity-affiliated party, or any 
                person determined by the conservator or 
                receiver to be a debtor of the regulated 
                entity, in property, or any obligation incurred 
                by such party or person, that was made within 5 
                years of the date on which the Agency was 
                appointed conservator or receiver, if such 
                party or person voluntarily or involuntarily 
                made such transfer or incurred such liability 
                with the intent to hinder, delay, or defraud 
                the regulated entity, the Agency, the 
                conservator, or receiver.
                  (B) Right of recovery.--To the extent a 
                transfer is avoided under subparagraph (A), the 
                conservator or receiver may recover, for the 
                benefit of the regulated entity, the property 
                transferred, or, if a court so orders, the 
                value of such property (at the time of such 
                transfer) from--
                          (i) the initial transferee of such 
                        transfer or the entity-affiliated party 
                        or person for whose benefit such 
                        transfer was made; or
                          (ii) any immediate or mediate 
                        transferee of any such initial 
                        transferee.
                  (C) Rights of transferee or obligee.--The 
                conservator or receiver may not recover under 
                subparagraph (B) from--
                          (i) any transferee that takes for 
                        value, including satisfaction or 
                        securing of a present or antecedent 
                        debt, in good faith; or
                          (ii) any immediate or mediate good 
                        faith transferee of such transferee.
                  (D) Rights under this paragraph.--The rights 
                under this paragraph of the conservator or 
                receiver described under subparagraph (A) shall 
                be superior to any rights of a trustee or any 
                other party (other than any party which is a 
                Federal agency) under title 11, United States 
                Code.
          (16) Attachment of assets and other injunctive 
        relief.--Subject to paragraph (17), any court of 
        competent jurisdiction may, at the request of the 
        conservator or receiver, issue an order in accordance 
        with rule 65 of the Federal Rules of Civil Procedure, 
        including an order placing the assets of any person 
        designated by the conservator or receiver under the 
        control of the court, and appointing a trustee to hold 
        such assets.
          (17) Standards of proof.--Rule 65 of the Federal 
        Rules of Civil Procedure shall apply with respect to 
        any proceeding under paragraph (16) without regard to 
        the requirement of such rule that the applicant show 
        that the injury, loss, or damage is irreparable and 
        immediate.
          (18) Treatment of claims arising from breach of 
        contracts executed by the conservator or receiver.--
                  (A) In general.--Notwithstanding any other 
                provision of this subsection, any final and 
                unappealable judgment for monetary damages 
                entered against the conservator or receiver for 
                the breach of an agreement executed or approved 
                in writing by the conservator or receiver after 
                the date of its appointment, shall be paid as 
                an administrative expense of the conservator or 
                receiver.
                  (B) No limitation of power.--Nothing in this 
                paragraph shall be construed to limit the power 
                of the conservator or receiver to exercise any 
                rights under contract or law, including to 
                terminate, breach, cancel, or otherwise 
                discontinue such agreement.
          (19) General exceptions.--
                  (A) Limitations.--The rights of the 
                conservator or receiver appointed under this 
                section shall be subject to the limitations on 
                the powers of a receiver under sections 402 
                through 407 of the Federal Deposit Insurance 
                Corporation Improvement Act of 1991 (12 U.S.C. 
                4402 through 4407).
                  (B) Mortgages held in trust.--
                          (i) In general.--Any mortgage, pool 
                        of mortgages, or interest in a pool of 
                        mortgages held in trust, custodial, or 
                        agency capacity by a regulated entity 
                        for the benefit of any person other 
                        than the regulated entity shall not be 
                        available to satisfy the claims of 
                        creditors generally, except that 
                        nothing in this clause shall be 
                        construed to expand or otherwise affect 
                        the authority of any regulated entity.
                          (ii) Holding of mortgages.--Any 
                        mortgage, pool of mortgages, or 
                        interest in a pool of mortgages 
                        described in clause (i) shall be held 
                        by the conservator or receiver 
                        appointed under this section for the 
                        beneficial owners of such mortgage, 
                        pool of mortgages, or interest in 
                        accordance with the terms of the 
                        agreement creating such trust, 
                        custodial, or other agency arrangement.
                          (iii) Liability of conservator or 
                        receiver.--The liability of the 
                        conservator or receiver appointed under 
                        this section for damages shall, in the 
                        case of any contingent or unliquidated 
                        claim relating to the mortgages held in 
                        trust, be estimated in accordance with 
                        the regulations of the Director.
  (c) Priority of Expenses and Unsecured Claims.--
          (1) In general.--Unsecured claims against a regulated 
        entity, or the receiver therefor, that are proven to 
        the satisfaction of the receiver shall have priority in 
        the following order:
                  (A) Administrative expenses of the receiver.
                  (B) Any other general or senior liability of 
                the regulated entity (which is not a liability 
                described under subparagraph (C) or (D).
                  (C) Any obligation subordinated to general 
                creditors (which is not an obligation described 
                under subparagraph (D)).
                  (D) Any obligation to shareholders or members 
                arising as a result of their status as 
                shareholder or members.
          (2) Creditors similarly situated.--All creditors that 
        are similarly situated under paragraph (1) shall be 
        treated in a similar manner, except that the receiver 
        may take any action (including making payments) that 
        does not comply with this subsection, if--
                  (A) the Director determines that such action 
                is necessary to maximize the value of the 
                assets of the regulated entity, to maximize the 
                present value return from the sale or other 
                disposition of the assets of the regulated 
                entity, or to minimize the amount of any loss 
                realized upon the sale or other disposition of 
                the assets of the regulated entity; and
                  (B) all creditors that are similarly situated 
                under paragraph (1) receive not less than the 
                amount provided in subsection (e)(2).
          (3) Definition.--As used in this subsection, the term 
        ``administrative expenses of the receiver'' includes--
                  (A) the actual, necessary costs and expenses 
                incurred by the receiver in preserving the 
                assets of a failed regulated entity or 
                liquidating or otherwise resolving the affairs 
                of a failed regulated entity; and
                  (B) any obligations that the receiver 
                determines are necessary and appropriate to 
                facilitate the smooth and orderly liquidation 
                or other resolution of the regulated entity.
  (d) Provisions Relating to Contracts Entered Into Before 
Appointment of Conservator or Receiver.--
          (1) Authority to repudiate contracts.--In addition to 
        any other rights a conservator or receiver may have, 
        the conservator or receiver for any regulated entity 
        may disaffirm or repudiate any contract or lease--
                  (A) to which such regulated entity is a 
                party;
                  (B) the performance of which the conservator 
                or receiver, in its sole discretion, determines 
                to be burdensome; and
                  (C) the disaffirmance or repudiation of which 
                the conservator or receiver determines, in its 
                sole discretion, will promote the orderly 
                administration of the affairs of the regulated 
                entity.
          (2) Timing of repudiation.--The conservator or 
        receiver shall determine whether or not to exercise the 
        rights of repudiation under this subsection within a 
        reasonable period following such appointment.
          (3) Claims for damages for repudiation.--
                  (A) In general.--Except as otherwise provided 
                under subparagraph (C) and paragraphs (4), (5), 
                and (6), the liability of the conservator or 
                receiver for the disaffirmance or repudiation 
                of any contract pursuant to paragraph (1) shall 
                be--
                          (i) limited to actual direct 
                        compensatory damages; and
                          (ii) determined as of--
                                  (I) the date of the 
                                appointment of the conservator 
                                or receiver; or
                                  (II) in the case of any 
                                contract or agreement referred 
                                to in paragraph (8), the date 
                                of the disaffirmance or 
                                repudiation of such contract or 
                                agreement.
                  (B) No liability for other damages.--For 
                purposes of subparagraph (A), the term ``actual 
                direct compensatory damages'' shall not 
                include--
                          (i) punitive or exemplary damages;
                          (ii) damages for lost profits or 
                        opportunity; or
                          (iii) damages for pain and suffering.
                  (C) Measure of damages for repudiation of 
                financial contracts.--In the case of any 
                qualified financial contract or agreement to 
                which paragraph (8) applies, compensatory 
                damages shall be--
                          (i) deemed to include normal and 
                        reasonable costs of cover or other 
                        reasonable measures of damages utilized 
                        in the industries for such contract and 
                        agreement claims; and
                          (ii) paid in accordance with this 
                        subsection and subsection (e), except 
                        as otherwise specifically provided in 
                        this section.
          (4) Leases under which the regulated entity is the 
        lessee.--
                  (A) In general.--If the conservator or 
                receiver disaffirms or repudiates a lease under 
                which the regulated entity was the lessee, the 
                conservator or receiver shall not be liable for 
                any damages (other than damages determined 
                under subparagraph (B)) for the disaffirmance 
                or repudiation of such lease.
                  (B) Payments of rent.--Notwithstanding 
                subparagraph (A), the lessor under a lease to 
                which that subparagraph applies shall--
                          (i) be entitled to the contractual 
                        rent accruing before the later of the 
                        date on which--
                                  (I) the notice of 
                                disaffirmance or repudiation is 
                                mailed; or
                                  (II) the disaffirmance or 
                                repudiation becomes effective, 
                                unless the lessor is in default 
                                or breach of the terms of the 
                                lease;
                          (ii) have no claim for damages under 
                        any acceleration clause or other 
                        penalty provision in the lease; and
                          (iii) have a claim for any unpaid 
                        rent, subject to all appropriate 
                        offsets and defenses, due as of the 
                        date of the appointment, which shall be 
                        paid in accordance with this subsection 
                        and subsection (e).
          (5) Leases under which the regulated entity is the 
        lessor.--
                  (A) In general.--If the conservator or 
                receiver repudiates an unexpired written lease 
                of real property of the regulated entity under 
                which the regulated entity is the lessor and 
                the lessee is not, as of the date of such 
                repudiation, in default, the lessee under such 
                lease may either--
                          (i) treat the lease as terminated by 
                        such repudiation; or
                          (ii) remain in possession of the 
                        leasehold interest for the balance of 
                        the term of the lease, unless the 
                        lessee defaults under the terms of the 
                        lease after the date of such 
                        repudiation.
                  (B) Provisions applicable to lessee remaining 
                in possession.--If any lessee under a lease 
                described under subparagraph (A) remains in 
                possession of a leasehold interest under clause 
                (ii) of subparagraph (A)--
                          (i) the lessee--
                                  (I) shall continue to pay the 
                                contractual rent pursuant to 
                                the terms of the lease after 
                                the date of the repudiation of 
                                such lease; and
                                  (II) may offset against any 
                                rent payment which accrues 
                                after the date of the 
                                repudiation of the lease, and 
                                any damages which accrue after 
                                such date due to the 
                                nonperformance of any 
                                obligation of the regulated 
                                entity under the lease after 
                                such date; and
                          (ii) the conservator or receiver 
                        shall not be liable to the lessee for 
                        any damages arising after such date as 
                        a result of the repudiation, other than 
                        the amount of any offset allowed under 
                        clause (i)(II).
          (6) Contracts for the sale of real property.--
                  (A) In general.--If the conservator or 
                receiver repudiates any contract for the sale 
                of real property and the purchaser of such real 
                property under such contract is in possession, 
                and is not, as of the date of such repudiation, 
                in default, such purchaser may either--
                          (i) treat the contract as terminated 
                        by such repudiation; or
                          (ii) remain in possession of such 
                        real property.
                  (B) Provisions applicable to purchaser 
                remaining in possession.--If any purchaser of 
                real property under any contract described 
                under subparagraph (A) remains in possession of 
                such property under clause (ii) of subparagraph 
                (A)--
                          (i) the purchaser--
                                  (I) shall continue to make 
                                all payments due under the 
                                contract after the date of the 
                                repudiation of the contract; 
                                and
                                  (II) may offset against any 
                                such payments any damages which 
                                accrue after such date due to 
                                the nonperformance (after such 
                                date) of any obligation of the 
                                regulated entity under the 
                                contract; and
                          (ii) the conservator or receiver 
                        shall--
                                  (I) not be liable to the 
                                purchaser for any damages 
                                arising after such date as a 
                                result of the repudiation, 
                                other than the amount of any 
                                offset allowed under clause 
                                (i)(II);
                                  (II) deliver title to the 
                                purchaser in accordance with 
                                the provisions of the contract; 
                                and
                                  (III) have no obligation 
                                under the contract other than 
                                the performance required under 
                                subclause (II).
                  (C) Assignment and sale allowed.--
                          (i) In general.--No provision of this 
                        paragraph shall be construed as 
                        limiting the right of the conservator 
                        or receiver to assign the contract 
                        described under subparagraph (A), and 
                        sell the property subject to the 
                        contract and the provisions of this 
                        paragraph.
                          (ii) No liability after assignment 
                        and sale.--If an assignment and sale 
                        described under clause (i) is 
                        consummated, the conservator or 
                        receiver shall have no further 
                        liability under the contract described 
                        under subparagraph (A), or with respect 
                        to the real property which was the 
                        subject of such contract.
          (7) Service contracts.--
                  (A) Services performed before appointment.--
                In the case of any contract for services 
                between any person and any regulated entity for 
                which the Agency has been appointed conservator 
                or receiver, any claim of such person for 
                services performed before the appointment of 
                the conservator or receiver shall be--
                          (i) a claim to be paid in accordance 
                        with subsections (b) and (e); and
                          (ii) deemed to have arisen as of the 
                        date on which the conservator or 
                        receiver was appointed.
                  (B) Services performed after appointment and 
                prior to repudiation.--If, in the case of any 
                contract for services described under 
                subparagraph (A), the conservator or receiver 
                accepts performance by the other person before 
                the conservator or receiver makes any 
                determination to exercise the right of 
                repudiation of such contract under this 
                section--
                          (i) the other party shall be paid 
                        under the terms of the contract for the 
                        services performed; and
                          (ii) the amount of such payment shall 
                        be treated as an administrative expense 
                        of the conservatorship or receivership.
                  (C) Acceptance of performance no bar to 
                subsequent repudiation.--The acceptance by the 
                conservator or receiver of services referred to 
                under subparagraph (B) in connection with a 
                contract described in such subparagraph shall 
                not affect the right of the conservator or 
                receiver to repudiate such contract under this 
                section at any time after such performance.
          (8) Certain qualified financial contracts.--
                  (A) Rights of parties to contracts.--Subject 
                to paragraphs (9) and (10), and notwithstanding 
                any other provision of this title (other than 
                subsection (b)(9)(B) of this section), any 
                other Federal law, or the law of any State, no 
                person shall be stayed or prohibited from 
                exercising--
                          (i) any right of that person to cause 
                        the termination, liquidation, or 
                        acceleration of any qualified financial 
                        contract with a regulated entity that 
                        arises upon the appointment of the 
                        Agency as receiver for such regulated 
                        entity at any time after such 
                        appointment;
                          (ii) any right under any security 
                        agreement or arrangement or other 
                        credit enhancement relating to one or 
                        more qualified financial contracts; or
                          (iii) any right to offset or net out 
                        any termination value, payment amount, 
                        or other transfer obligation arising 
                        under or in connection with 1 or more 
                        contracts and agreements described in 
                        clause (i), including any master 
                        agreement for such contracts or 
                        agreements.
                  (B) Applicability of other provisions.--
                Subsection (b)(10) shall apply in the case of 
                any judicial action or proceeding brought 
                against any receiver referred to under 
                subparagraph (A), or the regulated entity for 
                which such receiver was appointed, by any party 
                to a contract or agreement described under 
                subparagraph (A)(i) with such regulated entity.
                  (C) Certain transfers not avoidable.--
                          (i) In general.--Notwithstanding 
                        paragraph (11), or any other provision 
                        of Federal or State law relating to the 
                        avoidance of preferential or fraudulent 
                        transfers, the Agency, whether acting 
                        as such or as conservator or receiver 
                        of a regulated entity, may not avoid 
                        any transfer of money or other property 
                        in connection with any qualified 
                        financial contract with a regulated 
                        entity.
                          (ii) Exception for certain 
                        transfers.--Clause (i) shall not apply 
                        to any transfer of money or other 
                        property in connection with any 
                        qualified financial contract with a 
                        regulated entity if the Agency 
                        determines that the transferee had 
                        actual intent to hinder, delay, or 
                        defraud such regulated entity, the 
                        creditors of such regulated entity, or 
                        any conservator or receiver appointed 
                        for such regulated entity.
                  (D) Certain contracts and agreements 
                defined.--In this subsection the following 
                definitions shall apply:
                          (i) Qualified financial contract.--
                        The term ``qualified financial 
                        contract'' means any securities 
                        contract, commodity contract, forward 
                        contract, repurchase agreement, swap 
                        agreement, and any similar agreement 
                        that the Agency determines by 
                        regulation, resolution, or order to be 
                        a qualified financial contract for 
                        purposes of this paragraph.
                          (ii) Securities contract.--The term 
                        ``securities contract''--
                                  (I) means a contract for the 
                                purchase, sale, or loan of a 
                                security, a certificate of 
                                deposit, a mortgage loan, or 
                                any interest in a mortgage 
                                loan, a group or index of 
                                securities, certificates of 
                                deposit, or mortgage loans or 
                                interests therein (including 
                                any interest therein or based 
                                on the value thereof) or any 
                                option on any of the foregoing, 
                                including any option to 
                                purchase or sell any such 
                                security, certificate of 
                                deposit, mortgage loan, 
                                interest, group or index, or 
                                option, and including any 
                                repurchase or reverse 
                                repurchase transaction on any 
                                such security, certificate of 
                                deposit, mortgage loan, 
                                interest, group or index, or 
                                option;
                                  (II) does not include any 
                                purchase, sale, or repurchase 
                                obligation under a 
                                participation in a commercial 
                                mortgage loan, unless the 
                                Agency determines by 
                                regulation, resolution, or 
                                order to include any such 
                                agreement within the meaning of 
                                such term;
                                  (III) means any option 
                                entered into on a national 
                                securities exchange relating to 
                                foreign currencies;
                                  (IV) means the guarantee by 
                                or to any securities clearing 
                                agency of any settlement of 
                                cash, securities, certificates 
                                of deposit, mortgage loans or 
                                interests therein, group or 
                                index of securities, 
                                certificates of deposit, or 
                                mortgage loans or interests 
                                therein (including any interest 
                                therein or based on the value 
                                thereof) or option on any of 
                                the foregoing, including any 
                                option to purchase or sell any 
                                such security, certificate of 
                                deposit, mortgage loan, 
                                interest, group or index, or 
                                option;
                                  (V) means any margin loan;
                                  (VI) means any other 
                                agreement or transaction that 
                                is similar to any agreement or 
                                transaction referred to in this 
                                clause;
                                  (VII) means any combination 
                                of the agreements or 
                                transactions referred to in 
                                this clause;
                                  (VIII) means any option to 
                                enter into any agreement or 
                                transaction referred to in this 
                                clause;
                                  (IX) means a master agreement 
                                that provides for an agreement 
                                or transaction referred to in 
                                subclause (I), (III), (IV), 
                                (V), (VI), (VII), or (VIII), 
                                together with all supplements 
                                to any such master agreement, 
                                without regard to whether the 
                                master agreement provides for 
                                an agreement or transaction 
                                that is not a securities 
                                contract under this clause, 
                                except that the master 
                                agreement shall be considered 
                                to be a securities contract 
                                under this clause only with 
                                respect to each agreement or 
                                transaction under the master 
                                agreement that is referred to 
                                in subclause (I), (III), (IV), 
                                (V), (VI), (VII), or (VIII); 
                                and
                                  (X) means any security 
                                agreement or arrangement or 
                                other credit enhancement 
                                related to any agreement or 
                                transaction referred to in this 
                                clause, including any guarantee 
                                or reimbursement obligation in 
                                connection with any agreement 
                                or transaction referred to in 
                                this clause.
                          (iii) Commodity contract.--The term 
                        ``commodity contract'' means--
                                  (I) with respect to a futures 
                                commission merchant, a contract 
                                for the purchase or sale of a 
                                commodity for future delivery 
                                on, or subject to the rules of, 
                                a contract market or board of 
                                trade;
                                  (II) with respect to a 
                                foreign futures commission 
                                merchant, a foreign future;
                                  (III) with respect to a 
                                leverage transaction merchant, 
                                a leverage transaction;
                                  (IV) with respect to a 
                                clearing organization, a 
                                contract for the purchase or 
                                sale of a commodity for future 
                                delivery on, or subject to the 
                                rules of, a contract market or 
                                board of trade that is cleared 
                                by such clearing organization, 
                                or commodity option traded on, 
                                or subject to the rules of, a 
                                contract market or board of 
                                trade that is cleared by such 
                                clearing organization;
                                  (V) with respect to a 
                                commodity options dealer, a 
                                commodity option;
                                  (VI) any other agreement or 
                                transaction that is similar to 
                                any agreement or transaction 
                                referred to in this clause;
                                  (VII) any combination of the 
                                agreements or transactions 
                                referred to in this clause;
                                  (VIII) any option to enter 
                                into any agreement or 
                                transaction referred to in this 
                                clause;
                                  (IX) a master agreement that 
                                provides for an agreement or 
                                transaction referred to in 
                                subclause (I), (II), (III), 
                                (IV), (V), (VI), (VII), or 
                                (VIII), together with all 
                                supplements to any such master 
                                agreement, without regard to 
                                whether the master agreement 
                                provides for an agreement or 
                                transaction that is not a 
                                commodity contract under this 
                                clause, except that the master 
                                agreement shall be considered 
                                to be a commodity contract 
                                under this clause only with 
                                respect to each agreement or 
                                transaction under the master 
                                agreement that is referred to 
                                in subclause (I), (II), (III), 
                                (IV), (V), (VI), (VII), or 
                                (VIII); or
                                  (X) any security agreement or 
                                arrangement or other credit 
                                enhancement related to any 
                                agreement or transaction 
                                referred to in this clause, 
                                including any guarantee or 
                                reimbursement obligation in 
                                connection with any agreement 
                                or transaction referred to in 
                                this clause.
                          (iv) Forward contract.--The term 
                        ``forward contract'' means--
                                  (I) a contract (other than a 
                                commodity contract) for the 
                                purchase, sale, or transfer of 
                                a commodity or any similar 
                                good, article, service, right, 
                                or interest which is presently 
                                or in the future becomes the 
                                subject of dealing in the 
                                forward contract trade, or 
                                product or byproduct thereof, 
                                with a maturity date more than 
                                2 days after the date on which 
                                the contract is entered into, 
                                including a repurchase 
                                transaction, reverse repurchase 
                                transaction, consignment, 
                                lease, swap, hedge transaction, 
                                deposit, loan, option, 
                                allocated transaction, 
                                unallocated transaction, or any 
                                other similar agreement;
                                  (II) any combination of 
                                agreements or transactions 
                                referred to in subclauses (I) 
                                and (III);
                                  (III) any option to enter 
                                into any agreement or 
                                transaction referred to in 
                                subclause (I) or (II);
                                  (IV) a master agreement that 
                                provides for an agreement or 
                                transaction referred to in 
                                subclauses (I), (II), or (III), 
                                together with all supplements 
                                to any such master agreement, 
                                without regard to whether the 
                                master agreement provides for 
                                an agreement or transaction 
                                that is not a forward contract 
                                under this clause, except that 
                                the master agreement shall be 
                                considered to be a forward 
                                contract under this clause only 
                                with respect to each agreement 
                                or transaction under the master 
                                agreement that is referred to 
                                in subclause (I), (II), or 
                                (III); or
                                  (V) any security agreement or 
                                arrangement or other credit 
                                enhancement related to any 
                                agreement or transaction 
                                referred to in subclause (I), 
                                (II), (III), or (IV), including 
                                any guarantee or reimbursement 
                                obligation in connection with 
                                any agreement or transaction 
                                referred to in any such 
                                subclause.
                          (v) Repurchase agreement.--The term 
                        ``repurchase agreement'' (including a 
                        reverse repurchase agreement)--
                                  (I) means an agreement, 
                                including related terms, which 
                                provides for the transfer of 
                                one or more certificates of 
                                deposit, mortgage-related 
                                securities (as such term is 
                                defined in section 3 of the 
                                Securities Exchange Act of 
                                1934), mortgage loans, 
                                interests in mortgage-related 
                                securities or mortgage loans, 
                                eligible bankers' acceptances, 
                                qualified foreign government 
                                securities (defined for 
                                purposes of this clause as a 
                                security that is a direct 
                                obligation of, or that is fully 
                                guaranteed by, the central 
                                government of a member of the 
                                Organization for Economic 
                                Cooperation and Development, as 
                                determined by regulation or 
                                order adopted by the 
                                appropriate Federal banking 
                                authority), or securities that 
                                are direct obligations of, or 
                                that are fully guaranteed by, 
                                the United States or any agency 
                                of the United States against 
                                the transfer of funds by the 
                                transferee of such certificates 
                                of deposit, eligible bankers' 
                                acceptances, securities, 
                                mortgage loans, or interests 
                                with a simultaneous agreement 
                                by such transferee to transfer 
                                to the transferor thereof 
                                certificates of deposit, 
                                eligible bankers' acceptances, 
                                securities, mortgage loans, or 
                                interests as described above, 
                                at a date certain not later 
                                than 1 year after such 
                                transfers or on demand, against 
                                the transfer of funds, or any 
                                other similar agreement;
                                  (II) does not include any 
                                repurchase obligation under a 
                                participation in a commercial 
                                mortgage loan, unless the 
                                Agency determines by 
                                regulation, resolution, or 
                                order to include any such 
                                participation within the 
                                meaning of such term;
                                  (III) means any combination 
                                of agreements or transactions 
                                referred to in subclauses (I) 
                                and (IV);
                                  (IV) means any option to 
                                enter into any agreement or 
                                transaction referred to in 
                                subclause (I) or (III);
                                  (V) means a master agreement 
                                that provides for an agreement 
                                or transaction referred to in 
                                subclause (I), (III), or (IV), 
                                together with all supplements 
                                to any such master agreement, 
                                without regard to whether the 
                                master agreement provides for 
                                an agreement or transaction 
                                that is not a repurchase 
                                agreement under this clause, 
                                except that the master 
                                agreement shall be considered 
                                to be a repurchase agreement 
                                under this subclause only with 
                                respect to each agreement or 
                                transaction under the master 
                                agreement that is referred to 
                                in subclause (I), (III), or 
                                (IV); and
                                  (VI) means any security 
                                agreement or arrangement or 
                                other credit enhancement 
                                related to any agreement or 
                                transaction referred to in 
                                subclause (I), (III), (IV), or 
                                (V), including any guarantee or 
                                reimbursement obligation in 
                                connection with any agreement 
                                or transaction referred to in 
                                any such subclause.
                          (vi) Swap agreement.--The term ``swap 
                        agreement'' means--
                                  (I) any agreement, including 
                                the terms and conditions 
                                incorporated by reference in 
                                any such agreement, which is an 
                                interest rate swap, option, 
                                future, or forward agreement, 
                                including a rate floor, rate 
                                cap, rate collar, cross-
                                currency rate swap, and basis 
                                swap; a spot, same day-
                                tomorrow, tomorrow-next, 
                                forward, or other foreign 
                                exchange or precious metals 
                                agreement; a currency swap, 
                                option, future, or forward 
                                agreement; an equity index or 
                                equity swap, option, future, or 
                                forward agreement; a debt index 
                                or debt swap, option, future, 
                                or forward agreement; a total 
                                return, credit spread or credit 
                                swap, option, future, or 
                                forward agreement; a commodity 
                                index or commodity swap, 
                                option, future, or forward 
                                agreement; or a weather swap, 
                                weather derivative, or weather 
                                option;
                                  (II) any agreement or 
                                transaction that is similar to 
                                any other agreement or 
                                transaction referred to in this 
                                clause and that is of a type 
                                that has been, is presently, or 
                                in the future becomes, the 
                                subject of recurrent dealings 
                                in the swap markets (including 
                                terms and conditions 
                                incorporated by reference in 
                                such agreement) and that is a 
                                forward, swap, future, or 
                                option on one or more rates, 
                                currencies, commodities, equity 
                                securities or other equity 
                                instruments, debt securities or 
                                other debt instruments, 
                                quantitative measures 
                                associated with an occurrence, 
                                extent of an occurrence, or 
                                contingency associated with a 
                                financial, commercial, or 
                                economic consequence, or 
                                economic or financial indices 
                                or measures of economic or 
                                financial risk or value;
                                  (III) any combination of 
                                agreements or transactions 
                                referred to in this clause;
                                  (IV) any option to enter into 
                                any agreement or transaction 
                                referred to in this clause;
                                  (V) a master agreement that 
                                provides for an agreement or 
                                transaction referred to in 
                                subclause (I), (II), (III), or 
                                (IV), together with all 
                                supplements to any such master 
                                agreement, without regard to 
                                whether the master agreement 
                                contains an agreement or 
                                transaction that is not a swap 
                                agreement under this clause, 
                                except that the master 
                                agreement shall be considered 
                                to be a swap agreement under 
                                this clause only with respect 
                                to each agreement or 
                                transaction under the master 
                                agreement that is referred to 
                                in subclause (I), (II), (III), 
                                or (IV); and
                                  (VI) any security agreement 
                                or arrangement or other credit 
                                enhancement related to any 
                                agreements or transactions 
                                referred to in subclause (I), 
                                (II), (III), (IV), or (V), 
                                including any guarantee or 
                                reimbursement obligation in 
                                connection with any agreement 
                                or transaction referred to in 
                                any such subclause.
                          (vii) Treatment of master agreement 
                        as one agreement.--Any master agreement 
                        for any contract or agreement described 
                        in any preceding clause of this 
                        subparagraph (or any master agreement 
                        for such master agreement or 
                        agreements), together with all 
                        supplements to such master agreement, 
                        shall be treated as a single agreement 
                        and a single qualified financial 
                        contract. If a master agreement 
                        contains provisions relating to 
                        agreements or transactions that are not 
                        themselves qualified financial 
                        contracts, the master agreement shall 
                        be deemed to be a qualified financial 
                        contract only with respect to those 
                        transactions that are themselves 
                        qualified financial contracts.
                          (viii) Transfer.--The term 
                        ``transfer'' means every mode, direct 
                        or indirect, absolute or conditional, 
                        voluntary or involuntary, of disposing 
                        of or parting with property or with an 
                        interest in property, including 
                        retention of title as a security 
                        interest and foreclosure of the equity 
                        of redemption of the regulated entity.
                  (E) Certain protections in event of 
                appointment of conservator.--Notwithstanding 
                any other provision of this section, any other 
                Federal law, or the law of any State (other 
                than paragraph (10) of this subsection and 
                subsection (b)(9)(B)), no person shall be 
                stayed or prohibited from exercising--
                          (i) any right such person has to 
                        cause the termination, liquidation, or 
                        acceleration of any qualified financial 
                        contract with a regulated entity in a 
                        conservatorship based upon a default 
                        under such financial contract which is 
                        enforceable under applicable 
                        noninsolvency law;
                          (ii) any right under any security 
                        agreement or arrangement or other 
                        credit enhancement relating to 1 or 
                        more such qualified financial 
                        contracts; or
                          (iii) any right to offset or net out 
                        any termination values, payment 
                        amounts, or other transfer obligations 
                        arising under or in connection with 
                        such qualified financial contracts.
                  (F) Clarification.--No provision of law shall 
                be construed as limiting the right or power of 
                the Agency, or authorizing any court or agency 
                to limit or delay in any manner, the right or 
                power of the Agency to transfer any qualified 
                financial contract in accordance with 
                paragraphs (9) and (10), or to disaffirm or 
                repudiate any such contract in accordance with 
                subsection (d)(1).
                  (G) Walkaway clauses not effective.--
                          (i) In general.--Notwithstanding the 
                        provisions of subparagraphs (A) and 
                        (E), and sections 403 and 404 of the 
                        Federal Deposit Insurance Corporation 
                        Improvement Act of 1991, no walkaway 
                        clause shall be enforceable in a 
                        qualified financial contract of a 
                        regulated entity in default.
                          (ii) Walkaway clause defined.--For 
                        purposes of this subparagraph, the term 
                        ``walkaway clause'' means a provision 
                        in a qualified financial contract that, 
                        after calculation of a value of a 
                        party's position or an amount due to or 
                        from 1 of the parties in accordance 
                        with its terms upon termination, 
                        liquidation, or acceleration of the 
                        qualified financial contract, either 
                        does not create a payment obligation of 
                        a party or extinguishes a payment 
                        obligation of a party in whole or in 
                        part solely because of the status of 
                        such party as a nondefaulting party.
          (9) Transfer of qualified financial contracts.--In 
        making any transfer of assets or liabilities of a 
        regulated entity in default which includes any 
        qualified financial contract, the conservator or 
        receiver for such regulated entity shall either--
                  (A) transfer to 1 person--
                          (i) all qualified financial contracts 
                        between any person (or any affiliate of 
                        such person) and the regulated entity 
                        in default;
                          (ii) all claims of such person (or 
                        any affiliate of such person) against 
                        such regulated entity under any such 
                        contract (other than any claim which, 
                        under the terms of any such contract, 
                        is subordinated to the claims of 
                        general unsecured creditors of such 
                        regulated entity);
                          (iii) all claims of such regulated 
                        entity against such person (or any 
                        affiliate of such person) under any 
                        such contract; and
                          (iv) all property securing, or any 
                        other credit enhancement for any 
                        contract described in clause (i), or 
                        any claim described in clause (ii) or 
                        (iii) under any such contract; or
                  (B) transfer none of the financial contracts, 
                claims, or property referred to under 
                subparagraph (A) (with respect to such person 
                and any affiliate of such person).
          (10) Notification of transfer.--
                  (A) In general.--The conservator or receiver 
                shall notify any person that is a party to a 
                contract or transfer by 5:00 p.m. (Eastern 
                Standard Time) on the business day following 
                the date of the appointment of the receiver in 
                the case of a receivership, or the business day 
                following such transfer in the case of a 
                conservatorship, if--
                          (i) the conservator or receiver for a 
                        regulated entity in default makes any 
                        transfer of the assets and liabilities 
                        of such regulated entity; and
                          (ii) such transfer includes any 
                        qualified financial contract.
                  (B) Certain rights not enforceable.--
                          (i) Receivership.--A person who is a 
                        party to a qualified financial contract 
                        with a regulated entity may not 
                        exercise any right that such person has 
                        to terminate, liquidate, or net such 
                        contract under paragraph (8)(A) of this 
                        subsection or under section 403 or 404 
                        of the Federal Deposit Insurance 
                        Corporation Improvement Act of 1991, 
                        solely by reason of or incidental to 
                        the appointment of a receiver for the 
                        regulated entity (or the insolvency or 
                        financial condition of the regulated 
                        entity for which the receiver has been 
                        appointed)--
                                  (I) until 5:00 p.m. (Eastern 
                                Standard Time) on the business 
                                day following the date of the 
                                appointment of the receiver; or
                                  (II) after the person has 
                                received notice that the 
                                contract has been transferred 
                                pursuant to paragraph (9)(A).
                          (ii) Conservatorship.--A person who 
                        is a party to a qualified financial 
                        contract with a regulated entity may 
                        not exercise any right that such person 
                        has to terminate, liquidate, or net 
                        such contract under paragraph (8)(E) of 
                        this subsection or under section 403 or 
                        404 of the Federal Deposit Insurance 
                        Corporation Improvement Act of 1991, 
                        solely by reason of or incidental to 
                        the appointment of a conservator for 
                        the regulated entity (or the insolvency 
                        or financial condition of the regulated 
                        entity for which the conservator has 
                        been appointed).
                          (iii) Notice.--For purposes of this 
                        paragraph, the conservator or receiver 
                        of a regulated entity shall be deemed 
                        to have notified a person who is a 
                        party to a qualified financial contract 
                        with such regulated entity, if the 
                        conservator or receiver has taken steps 
                        reasonably calculated to provide notice 
                        to such person by the time specified in 
                        subparagraph (A).
                  (C) Business day defined.--For purposes of 
                this paragraph, the term ``business day'' means 
                any day other than any Saturday, Sunday, or any 
                day on which either the New York Stock Exchange 
                or the Federal Reserve Bank of New York is 
                closed.
          (11) Disaffirmance or repudiation of qualified 
        financial contracts.--In exercising the rights of 
        disaffirmance or repudiation of a conservator or 
        receiver with respect to any qualified financial 
        contract to which a regulated entity is a party, the 
        conservator or receiver for such institution shall 
        either--
                  (A) disaffirm or repudiate all qualified 
                financial contracts between--
                          (i) any person or any affiliate of 
                        such person; and
                          (ii) the regulated entity in default; 
                        or
                  (B) disaffirm or repudiate none of the 
                qualified financial contracts referred to in 
                subparagraph (A) (with respect to such person 
                or any affiliate of such person).
          (12) Certain security interests not avoidable.--No 
        provision of this subsection shall be construed as 
        permitting the avoidance of any legally enforceable or 
        perfected security interest in any of the assets of any 
        regulated entity, except where such an interest is 
        taken in contemplation of the insolvency of the 
        regulated entity, or with the intent to hinder, delay, 
        or defraud the regulated entity or the creditors of 
        such regulated entity.
          (13) Authority to enforce contracts.--
                  (A) In general.--Notwithstanding any 
                provision of a contract providing for 
                termination, default, acceleration, or exercise 
                of rights upon, or solely by reason of, 
                insolvency or the appointment of, or the 
                exercise of rights or powers by, a conservator 
                or receiver, the conservator or receiver may 
                enforce any contract, other than a contract for 
                liability insurance for a director or officer, 
                or a contract or a regulated entity bond, 
                entered into by the regulated entity.
                  (B) Certain rights not affected.--No 
                provision of this paragraph may be construed as 
                impairing or affecting any right of the 
                conservator or receiver to enforce or recover 
                under a liability insurance contract for an 
                officer or director, or regulated entity bond 
                under other applicable law.
                  (C) Consent requirement.--
                          (i) In general.--Except as otherwise 
                        provided under this section, no person 
                        may exercise any right or power to 
                        terminate, accelerate, or declare a 
                        default under any contract to which a 
                        regulated entity is a party, or to 
                        obtain possession of or exercise 
                        control over any property of the 
                        regulated entity, or affect any 
                        contractual rights of the regulated 
                        entity, without the consent of the 
                        conservator or receiver, as 
                        appropriate, for a period of--
                                  (I) 45 days after the date of 
                                appointment of a conservator; 
                                or
                                  (II) 90 days after the date 
                                of appointment of a receiver.
                          (ii) Exceptions.--This subparagraph 
                        shall not--
                                  (I) apply to a contract for 
                                liability insurance for an 
                                officer or director;
                                  (II) apply to the rights of 
                                parties to certain qualified 
                                financial contracts under 
                                subsection (d)(8); and
                                  (III) be construed as 
                                permitting the conservator or 
                                receiver to fail to comply with 
                                otherwise enforceable 
                                provisions of such contracts.
          (14) Savings clause.--The meanings of terms used in 
        this subsection are applicable for purposes of this 
        subsection only, and shall not be construed or applied 
        so as to challenge or affect the characterization, 
        definition, or treatment of any similar terms under any 
        other statute, regulation, or rule, including the 
        Gramm-Leach-Bliley Act, the Legal Certainty for Bank 
        Products Act of 2000, the securities laws (as that term 
        is defined in section 3(a)(47) of the Securities 
        Exchange Act of 1934), and the Commodity Exchange Act.
          (15) Exception for federal reserve and federal home 
        loan banks.--No provision of this subsection shall 
        apply with respect to--
                  (A) any extension of credit from any Federal 
                Home Loan Bank or Federal Reserve Bank to any 
                regulated entity; or
                  (B) any security interest in the assets of 
                the regulated entity securing any such 
                extension of credit.
  (e) Valuation of Claims in Default.--
          (1) In general.--Notwithstanding any other provision 
        of Federal law or the law of any State, and regardless 
        of the method which the Agency determines to utilize 
        with respect to a regulated entity in default or in 
        danger of default, including transactions authorized 
        under subsection (i), this subsection shall govern the 
        rights of the creditors of such regulated entity.
          (2) Maximum liability.--The maximum liability of the 
        Agency, acting as receiver or in any other capacity, to 
        any person having a claim against the receiver or the 
        regulated entity for which such receiver is appointed 
        shall be not more than the amount that such claimant 
        would have received if the Agency had liquidated the 
        assets and liabilities of the regulated entity without 
        exercising the authority of the Agency under subsection 
        (i).
  (f) Limitation on Court Action.--Except as provided in this 
section or at the request of the Director, no court may take 
any action to restrain or affect the exercise of powers or 
functions of the Agency as a conservator or a receiver.
  (g) Liability of Directors and Officers.--
          (1) In general.--A director or officer of a regulated 
        entity may be held personally liable for monetary 
        damages in any civil action described in paragraph (2) 
        brought by, on behalf of, or at the request or 
        direction of the Agency, and prosecuted wholly or 
        partially for the benefit of the Agency--
                  (A) acting as conservator or receiver of such 
                regulated entity; or
                  (B) acting based upon a suit, claim, or cause 
                of action purchased from, assigned by, or 
                otherwise conveyed by such receiver or 
                conservator.
          (2) Actions addressed.--Paragraph (1) applies in any 
        civil action for gross negligence, including any 
        similar conduct or conduct that demonstrates a greater 
        disregard of a duty of care than gross negligence, 
        including intentional tortious conduct, as such terms 
        are defined and determined under applicable State law.
          (3) No limitation.--Nothing in this subsection shall 
        impair or affect any right of the Agency under other 
        applicable law.
  (h) Damages.--In any proceeding related to any claim against 
a director, officer, employee, agent, attorney, accountant, 
appraiser, or any other party employed by or providing services 
to a regulated entity, recoverable damages determined to result 
from the improvident or otherwise improper use or investment of 
any assets of the regulated entity shall include principal 
losses and appropriate interest.
  (i) Limited-Life Regulated Entities.--
          (1) Organization.--
                  (A) Purpose.--The Agency, as receiver 
                appointed pursuant to subsection (a)--
                          (i) may, in the case of a Federal 
                        Home Loan Bank, organize a limited-life 
                        regulated entity with those powers and 
                        attributes of the Federal Home Loan 
                        Bank in default or in danger of default 
                        as the Director determines necessary, 
                        subject to the provisions of this 
                        subsection, and the Director shall 
                        grant a temporary charter to that 
                        limited-life regulated entity, and that 
                        limited-life regulated entity may 
                        operate subject to that charter; and
                          (ii) shall, in the case of an 
                        enterprise, organize a limited-life 
                        regulated entity with respect to that 
                        enterprise in accordance with this 
                        subsection.
                  (B) Authorities.--Upon the creation of a 
                limited-life regulated entity under 
                subparagraph (A), the limited-life regulated 
                entity may--
                          (i) assume such liabilities of the 
                        regulated entity that is in default or 
                        in danger of default as the Agency may, 
                        in its discretion, determine to be 
                        appropriate, except that the 
                        liabilities assumed shall not exceed 
                        the amount of assets purchased or 
                        transferred from the regulated entity 
                        to the limited-life regulated entity;
                          (ii) purchase such assets of the 
                        regulated entity that is in default, or 
                        in danger of default as the Agency may, 
                        in its discretion, determine to be 
                        appropriate; and
                          (iii) perform any other temporary 
                        function which the Agency may, in its 
                        discretion, prescribe in accordance 
                        with this section.
          (2) Charter and establishment.--
                  (A) Transfer of charter.--
                          (i) Fannie mae.--If the Agency is 
                        appointed as receiver for the Federal 
                        National Mortgage Association, the 
                        limited-life regulated entity 
                        established under this subsection with 
                        respect to such enterprise shall, by 
                        operation of law and immediately upon 
                        its organization--
                                  (I) succeed to the charter of 
                                the Federal National Mortgage 
                                Association, as set forth in 
                                the Federal National Mortgage 
                                Association Charter Act; and
                                  (II) thereafter operate in 
                                accordance with, and subject 
                                to, such charter, this Act, and 
                                any other provision of law to 
                                which the Federal National 
                                Mortgage Association is 
                                subject, except as otherwise 
                                provided in this subsection.
                          (ii) Freddie mac.--If the Agency is 
                        appointed as receiver for the Federal 
                        Home Loan Mortgage Corporation, the 
                        limited-life regulated entity 
                        established under this subsection with 
                        respect to such enterprise shall, by 
                        operation of law and immediately upon 
                        its organization--
                                  (I) succeed to the charter of 
                                the Federal Home Loan Mortgage 
                                Corporation, as set forth in 
                                the Federal Home Loan Mortgage 
                                Corporation Charter Act; and
                                  (II) thereafter operate in 
                                accordance with, and subject 
                                to, such charter, this Act, and 
                                any other provision of law to 
                                which the Federal Home Loan 
                                Mortgage Corporation is 
                                subject, except as otherwise 
                                provided in this subsection.
                  (B) Interests in and assets and obligations 
                of regulated entity in default.--
                Notwithstanding subparagraph (A) or any other 
                provision of law--
                          (i) a limited-life regulated entity 
                        shall assume, acquire, or succeed to 
                        the assets or liabilities of a 
                        regulated entity only to the extent 
                        that such assets or liabilities are 
                        transferred by the Agency to the 
                        limited-life regulated entity in 
                        accordance with, and subject to the 
                        restrictions set forth in, paragraph 
                        (1)(B);
                          (ii) a limited-life regulated entity 
                        shall not assume, acquire, or succeed 
                        to any obligation that a regulated 
                        entity for which a receiver has been 
                        appointed may have to any shareholder 
                        of the regulated entity that arises as 
                        a result of the status of that person 
                        as a shareholder of the regulated 
                        entity; and
                          (iii) no shareholder or creditor of a 
                        regulated entity shall have any right 
                        or claim against the charter of the 
                        regulated entity once the Agency has 
                        been appointed receiver for the 
                        regulated entity and a limited-life 
                        regulated entity succeeds to the 
                        charter pursuant to subparagraph (A).
                  (C) Limited-life regulated entity treated as 
                being in default for certain purposes.--A 
                limited-life regulated entity shall be treated 
                as a regulated entity in default at such times 
                and for such purposes as the Agency may, in its 
                discretion, determine.
                  (D) Management.--Upon its establishment, a 
                limited-life regulated entity shall be under 
                the management of a board of directors 
                consisting of not fewer than 5 nor more than 10 
                members appointed by the Agency.
                  (E) Bylaws.--The board of directors of a 
                limited-life regulated entity shall adopt such 
                bylaws as may be approved by the Agency.
          (3) Capital stock.--
                          (A) No agency requirement.--The 
                        Agency is not required to pay capital 
                        stock into a limited-life regulated 
                        entity or to issue any capital stock on 
                        behalf of a limited-life regulated 
                        entity established under this 
                        subsection.
                          (B) Authority.--If the Director 
                        determines that such action is 
                        advisable, the Agency may cause capital 
                        stock or other securities of a limited-
                        life regulated entity established with 
                        respect to an enterprise to be issued 
                        and offered for sale, in such amounts 
                        and on such terms and conditions as the 
                        Director may determine, in the 
                        discretion of the Director.
          (4) Investments.--Funds of a limited-life regulated 
        entity shall be kept on hand in cash, invested in 
        obligations of the United States or obligations 
        guaranteed as to principal and interest by the United 
        States, or deposited with the Agency, or any Federal 
        reserve bank.
          (5) Exempt tax status.--Notwithstanding any other 
        provision of Federal or State law, a limited-life 
        regulated entity, its franchise, property, and income 
        shall be exempt from all taxation now or hereafter 
        imposed by the United States, by any territory, 
        dependency, or possession thereof, or by any State, 
        county, municipality, or local taxing authority.
          (6) Winding up.--
                  (A) In general.--Subject to subparagraphs (B) 
                and (C), not later than 2 years after the date 
                of its organization, the Agency shall wind up 
                the affairs of a limited-life regulated entity.
                  (B) Extension.--The Director may, in the 
                discretion of the Director, extend the status 
                of a limited-life regulated entity for 3 
                additional 1-year periods.
                  (C) Termination of status as limited-life 
                regulated entity.--
                          (i) In general.--Upon the sale by the 
                        Agency of 80 percent or more of the 
                        capital stock of a limited-life 
                        regulated entity, as defined in clause 
                        (iv), to 1 or more persons (other than 
                        the Agency)--
                                  (I) the status of the 
                                limited-life regulated entity 
                                as such shall terminate; and
                                  (II) the entity shall cease 
                                to be a limited-life regulated 
                                entity for purposes of this 
                                subsection.
                          (ii) Divestiture of remaining stock, 
                        if any.--
                                  (I) In general.--Not later 
                                than 1 year after the date on 
                                which the status of a limited-
                                life regulated entity is 
                                terminated pursuant to clause 
                                (i), the Agency shall sell to 1 
                                or more persons (other than the 
                                Agency) any remaining capital 
                                stock of the former limited-
                                life regulated entity.
                                  (II) Extension authorized.--
                                The Director may extend the 
                                period referred to in subclause 
                                (I) for not longer than an 
                                additional 2 years, if the 
                                Director determines that such 
                                action would be in the public 
                                interest.
                          (iii) Savings clause.--
                        Notwithstanding any provision of law, 
                        other than clause (ii), the Agency 
                        shall not be required to sell the 
                        capital stock of an enterprise or a 
                        limited-life regulated entity 
                        established with respect to an 
                        enterprise.
                          (iv) Applicability.--This 
                        subparagraph applies only with respect 
                        to a limited-life regulated entity that 
                        is established with respect to an 
                        enterprise.
          (7) Transfer of assets and liabilities.--
                  (A) In general.--
                          (i) Transfer of assets and 
                        liabilities.--The Agency, as receiver, 
                        may transfer any assets and liabilities 
                        of a regulated entity in default, or in 
                        danger of default, to the limited-life 
                        regulated entity in accordance with and 
                        subject to the restrictions of 
                        paragraph (1).
                          (ii) Subsequent transfers.--At any 
                        time after the establishment of a 
                        limited-life regulated entity, the 
                        Agency, as receiver, may transfer any 
                        assets and liabilities of the regulated 
                        entity in default, or in danger of 
                        default, as the Agency may, in its 
                        discretion, determine to be appropriate 
                        in accordance with and subject to the 
                        restrictions of paragraph (1).
                          (iii) Effective without approval.--
                        The transfer of any assets or 
                        liabilities of a regulated entity in 
                        default or in danger of default to a 
                        limited-life regulated entity shall be 
                        effective without any further approval 
                        under Federal or State law, assignment, 
                        or consent with respect thereto.
                          (iv) Equitable treatment of similarly 
                        situated creditors.--The Agency shall 
                        treat all creditors of a regulated 
                        entity in default or in danger of 
                        default that are similarly situated 
                        under subsection (c)(1) in a similar 
                        manner in exercising the authority of 
                        the Agency under this subsection to 
                        transfer any assets or liabilities of 
                        the regulated entity to the limited-
                        life regulated entity established with 
                        respect to such regulated entity, 
                        except that the Agency may take actions 
                        (including making payments) that do not 
                        comply with this clause, if--
                                  (I) the Director determines 
                                that such actions are necessary 
                                to maximize the value of the 
                                assets of the regulated entity, 
                                to maximize the present value 
                                return from the sale or other 
                                disposition of the assets of 
                                the regulated entity, or to 
                                minimize the amount of any loss 
                                realized upon the sale or other 
                                disposition of the assets of 
                                the regulated entity; and
                                  (II) all creditors that are 
                                similarly situated under 
                                subsection (c)(1) receive not 
                                less than the amount provided 
                                in subsection (e)(2).
                          (v) Limitation on transfer of 
                        liabilities.--Notwithstanding any other 
                        provision of law, the aggregate amount 
                        of liabilities of a regulated entity 
                        that are transferred to, or assumed by, 
                        a limited-life regulated entity may not 
                        exceed the aggregate amount of assets 
                        of the regulated entity that are 
                        transferred to, or purchased by, the 
                        limited-life regulated entity.
          (8) Regulations.--The Agency may promulgate such 
        regulations as the Agency determines to be necessary or 
        appropriate to implement this subsection.
          (9) Powers of limited-life regulated entities.--
                  (A) In general.--Each limited-life regulated 
                entity created under this subsection shall have 
                all corporate powers of, and be subject to the 
                same provisions of law as, the regulated entity 
                in default or in danger of default to which it 
                relates, except that--
                          (i) the Agency may--
                                  (I) remove the directors of a 
                                limited-life regulated entity;
                                  (II) fix the compensation of 
                                members of the board of 
                                directors and senior 
                                management, as determined by 
                                the Agency in its discretion, 
                                of a limited-life regulated 
                                entity; and
                                  (III) indemnify the 
                                representatives for purposes of 
                                paragraph (1)(B), and the 
                                directors, officers, employees, 
                                and agents of a limited-life 
                                regulated entity on such terms 
                                as the Agency determines to be 
                                appropriate; and
                          (ii) the board of directors of a 
                        limited-life regulated entity--
                                  (I) shall elect a chairperson 
                                who may also serve in the 
                                position of chief executive 
                                officer, except that such 
                                person shall not serve either 
                                as chairperson or as chief 
                                executive officer without the 
                                prior approval of the Agency; 
                                and
                                  (II) may appoint a chief 
                                executive officer who is not 
                                also the chairperson, except 
                                that such person shall not 
                                serve as chief executive 
                                officer without the prior 
                                approval of the Agency.
                  (B) Stay of judicial action.--Any judicial 
                action to which a limited-life regulated entity 
                becomes a party by virtue of its acquisition of 
                any assets or assumption of any liabilities of 
                a regulated entity in default shall be stayed 
                from further proceedings for a period of not 
                longer than 45 days, at the request of the 
                limited-life regulated entity. Such period may 
                be modified upon the consent of all parties.
          (10) No federal status.--
                  (A) Agency status.--A limited-life regulated 
                entity is not an agency, establishment, or 
                instrumentality of the United States.
                  (B) Employee status.--Representatives for 
                purposes of paragraph (1)(B), interim 
                directors, directors, officers, employees, or 
                agents of a limited-life regulated entity are 
                not, solely by virtue of service in any such 
                capacity, officers or employees of the United 
                States. Any employee of the Agency or of any 
                Federal instrumentality who serves at the 
                request of the Agency as a representative for 
                purposes of paragraph (1)(B), interim director, 
                director, officer, employee, or agent of a 
                limited-life regulated entity shall not--
                          (i) solely by virtue of service in 
                        any such capacity lose any existing 
                        status as an officer or employee of the 
                        United States for purposes of title 5, 
                        United States Code, or any other 
                        provision of law; or
                          (ii) receive any salary or benefits 
                        for service in any such capacity with 
                        respect to a limited-life regulated 
                        entity in addition to such salary or 
                        benefits as are obtained through 
                        employment with the Agency or such 
                        Federal instrumentality.
          (11) Authority to obtain credit.--
                  (A) In general.--A limited-life regulated 
                entity may obtain unsecured credit and issue 
                unsecured debt.
                  (B) Inability to obtain credit.--If a 
                limited-life regulated entity is unable to 
                obtain unsecured credit or issue unsecured 
                debt, the Director may authorize the obtaining 
                of credit or the issuance of debt by the 
                limited-life regulated entity--
                          (i) with priority over any or all of 
                        the obligations of the limited-life 
                        regulated entity;
                          (ii) secured by a lien on property of 
                        the limited-life regulated entity that 
                        is not otherwise subject to a lien; or
                          (iii) secured by a junior lien on 
                        property of the limited-life regulated 
                        entity that is subject to a lien.
                  (C) Limitations.--
                          (i) In general.--The Director, after 
                        notice and a hearing, may authorize the 
                        obtaining of credit or the issuance of 
                        debt by a limited-life regulated entity 
                        that is secured by a senior or equal 
                        lien on property of the limited-life 
                        regulated entity that is subject to a 
                        lien (other than mortgages that 
                        collateralize the mortgage-backed 
                        securities issued or guaranteed by an 
                        enterprise) only if--
                                  
                                          
                                                  
                                     (I) the limited-life regulated 
                                       entity is unable to otherwise 
                                       obtain such credit or issue such 
                                       debt; and
                                     (II) there is adequate protection 
                                       of the interest of the holder of 
                                       the lien on the property with 
                                       respect to which such senior or 
                                       equal lien is proposed to be 
                                       granted.
                                          (D) Burden of 
                                        proof.--In any hearing 
                                        under this subsection, 
                                        the Director has the 
                                        burden of proof on the 
                                        issue of adequate 
                                        protection.
                                  (12) Effect on debts and 
                                liens.--The reversal or 
                                modification on appeal of an 
                                authorization under this 
                                subsection to obtain credit or 
                                issue debt, or of a grant under 
                                this section of a priority or a 
                                lien, does not affect the 
                                validity of any debt so issued, 
                                or any priority or lien so 
                                granted, to an entity that 
                                extended such credit in good 
                                faith, whether or not such 
                                entity knew of the pendency of 
                                the appeal, unless such 
                                authorization and the issuance 
                                of such debt, or the granting 
                                of such priority or lien, were 
                                stayed pending appeal.
  (j) Other Agency Exemptions.--
          (1) Applicability.--The provisions of this subsection 
        shall apply with respect to the Agency in any case in 
        which the Agency is acting as a conservator or a 
        receiver.
          (2) Taxation.--The Agency, including its franchise, 
        its capital, reserves, and surplus, and its income, 
        shall be exempt from all taxation imposed by any State, 
        county, municipality, or local taxing authority, except 
        that any real property of the Agency shall be subject 
        to State, territorial, county, municipal, or local 
        taxation to the same extent according to its value as 
        other real property is taxed, except that, 
        notwithstanding the failure of any person to challenge 
        an assessment under State law of the value of such 
        property, and the tax thereon, shall be determined as 
        of the period for which such tax is imposed.
          (3) Property protection.--No property of the Agency 
        shall be subject to levy, attachment, garnishment, 
        foreclosure, or sale without the consent of the Agency, 
        nor shall any involuntary lien attach to the property 
        of the Agency.
          (4) Penalties and fines.--The Agency shall not be 
        liable for any amounts in the nature of penalties or 
        fines, including those arising from the failure of any 
        person to pay any real property, personal property, 
        probate, or recording tax or any recording or filing 
        fees when due.
  (k) Prohibition of Charter Revocation.--In no case may the 
receiver appointed pursuant to this section revoke, annul, or 
terminate the charter of an enterprise.

           *       *       *       *       *       *       *


                             MINORITY VIEWS

    This bill would make homeownership more expensive for 
middle class borrowers by canceling recent changes made by the 
Federal Housing Finance Agency (FHFA) to loan level price 
adjustments (LLPAs) charged by Fannie Mae and Freddie Mac 
(collectively, ``the Enterprises'') for the guarantee of 
single-family mortgages beginning May 1, 2023, and 
reinstituting the 2008 LLPA pricing framework. This bill would 
also require the Government Accountability Office (GAO) to 
submit a report to Congress on the latest pricing framework, 
and temporarily prohibit the FHFA from making any further 
pricing changes until it initiates a rule-making process to 
institute such changes. The bill further prohibits the FHFA 
from setting LLPAs based on debt-to-income ratios.
    Established in 2008, following the mortgage crisis, the 
LLPA pricing grid was intended to help the Enterprises raise 
more capital. LLPAs are charged to lenders by the Enterprises 
for each loan that they purchase, and are passed on to 
borrowers as part of the cost of originating Enterprise-backed 
mortgages. These fees are charged based on the loan type and 
characteristics of a borrower's credit profile, such as loan to 
value ratios (based on down payment amount). The 2008 pricing 
grid resulted in lower wealth and lower income homebuyers being 
charged more for a mortgage than wealthier, higher income 
borrowers with similar credit profiles. Effective May 1, 2023, 
the FHFA's changes to the LLPAs, in part, ensure that borrowers 
with lower wealth or income are not charged more that higher 
wealth and income individuals who are otherwise similarly 
situated. The reductions in fees for these individuals are 
offset by slightly higher fees on loans for second homes, 
investment properties, and cash out refinance transactions. The 
recent changes to the LLPAs also overall continue to help the 
Enterprises build capital as they adhere to increased capital 
requirements that became effective in 2022. On May 10th, FHFA 
eliminated proposed debt-to-income (DTI) LLPAs from its pricing 
framework, which never took effect, and on May 15th , FHFA 
announced that it is requesting public input on the entirety of 
its single-family pricing framework and overall guarantee fees.
    If passed, this bill would: (1) revert back to an unfair 
mortgage pricing scheme that charges middle class borrowers 
with lower wealth, especially first-time homebuyers and rural 
homebuyers, higher fees compared to wealthier homebuyers, 
especially those purchasing vacation homes or investment 
properties; (2) result in operational challenges for the 
Enterprises and lenders as they attempt to revert back to the 
2008 pricing grid, as this bill would require, and undo legal 
contracts; and (3) prevent FHFA and the Enterprises from 
appropriately pricing for credit risk and compromise the safety 
and soundness of the housing finance market by subjecting 
market-shifting pricing decisions that require swift 
implementation to lengthy rulemaking processes. The setting of 
guarantee fees, much like the setting of interest rates, is 
market sensitive and exposing that process to notice and 
comment could lead to market manipulation. Additionally, this 
bill could create political uncertainty regarding the pricing 
of Enterprise securities and diminish the trust of global 
markets in those securities, resulting in increased costs to 
the middle-class borrowers this bill purports to help.
    For these reasons, the minority opposes H.R. 3654.
            Sincerely,
                                   Maxine Waters,
                                           Ranking Member, Committee on 
                                               Financial Services.
                                   Nydia M. Velazquez.
                                   Juan Vargas.
                                   Ritchie Torres.
                                   Nikema Williams.
                                   Al Green,
                                           Ranking Member, Subcommittee 
                                               on Oversight and 
                                               Investigations.
                                   Rashida Tlaib.
                                   Silvia R. Garcia.
                                   Brittany Pettersen.

                                  [all]