Text: H.R.2900 — 102nd Congress (1991-1992)All Information (Except Text)

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Union Calendar No. 124
102d CONGRESS
1st Session
H. R. 2900
[Report No. 102-206]
A BILL
To improve supervision and regulation with respect to the financial safety
and soundness of the Federal National Mortgage Association, the Federal
Home Loan Mortgage Corporation, and the Federal Home Loan Bank System,
and for other purposes.
September 17, 1991
Reported with an amendment, committed to the Committee of the Whole House
on the State of the Union, and ordered to be printed
HR 2900 RH
Union Calendar No. 124
102d CONGRESS
1st Session
 H. R. 2900
[Report No. 102-206]
To improve supervision and regulation with respect to the financial safety
and soundness of the Federal National Mortgage Association, the Federal
Home Loan Mortgage Corporation, and the Federal Home Loan Bank System,
and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JULY 16, 1991
Mr. GONZALEZ (for himself, Mr. WYLIE, and Mrs. ROUKEMA) introduced the
following bill; which was referred to the Committee on Banking, Finance and
Urban Affairs
September 17, 1991
Reported with an amendment, committed to the Committee of the Whole House
on the State of the Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part printed
in italic]
[For text of introduced bill, see copy of bill as introduced on July 16, 1991]
A BILL
To improve supervision and regulation with respect to the financial safety
and soundness of the Federal National Mortgage Association, the Federal
Home Loan Mortgage Corporation, and the Federal Home Loan Bank System,
and for other purposes.
  Be it enacted by the Senate and House of Representatives of the United
  States of America in Congress assembled,
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
  (a) SHORT TITLE- This Act may be cited as the `Government-Sponsored Housing
  Enterprises Financial Safety and Soundness Act of 1991'.
  (b) Table of Contents-
Sec. 1. Short title and table of contents.
Sec. 2. Congressional findings.
Sec. 3. Definitions.
TITLE I--SUPERVISION AND REGULATION OF FNMA AND FHLMC
Subtitle A--Establishment of Financial Safety and Soundness Regulator
Sec. 101. Establishment of Office of Secondary Market Examination and
Oversight.
Sec. 102. Director.
Sec. 103. Authority of Director.
Sec. 104. Personnel.
Sec. 105. Funding.
Sec. 106. Annual reports.
Sec. 107. Information, records, and meetings.
Sec. 108. Regulations and orders.
Subtitle B--Amendments to Other Acts
Sec. 121. Amendments to Federal National Mortgage Association Charter Act.
Sec. 122. Amendments to Federal Home Loan Mortgage Corporation Act.
Sec. 123. Amendments to title 5, United States Code.
Sec. 124. Amendment to Department of Housing and Urban Development Act.
Subtitle C--Miscellaneous Provisions
Sec. 131. Implementation.
Sec. 132. Review of underwriting guidelines.
TITLE II--REQUIRED CAPITAL LEVELS FOR FNMA AND FHLMC AND SPECIAL ENFORCEMENT
POWERS
Sec. 201. Risk-based capital levels.
Sec. 202. Minimum capital levels.
Sec. 203. Critical capital levels.
Sec. 204. Enforcement levels.
Sec. 205. Mandatory supervisory actions applicable to enterprises within
level II.
Sec. 206. Supervisory actions applicable to enterprises within level III.
Sec. 207. Mandatory appointment of conservator for enterprises within level IV.
Sec. 208. Conservatorship.
Sec. 209. Capital restoration plans.
Sec. 210. Judicial review of Director action.
Sec. 211. Examinations.
TITLE III--CEASE-AND-DESIST ORDERS AND CIVIL MONEY PENALTIES AGAINST FNMA
AND FHLMC
Sec. 301. Cease-and-desist proceedings.
Sec. 302. Temporary cease-and-desist orders.
Sec. 303. Hearings.
Sec. 304. Judicial review.
Sec. 305. Enforcement and jurisdiction.
Sec. 306. Civil money penalties.
Sec. 307. Notice of service.
Sec. 308. Subpoena authority.
TITLE IV--REGULATION OF FEDERAL HOME LOAN BANK SYSTEM
Sec. 401. Primacy of financial safety and soundness for Federal Housing
Finance Board.
Sec. 402. Advances to nonqualified thrift lender members.
Sec. 403. Study regarding Federal Home Loan Bank System.
TITLE V--PRIVATIZATION STUDY
Sec. 501. Study of impact of privatization of FNMA and FHLMC.
SEC. 2. CONGRESSIONAL FINDINGS.
  The Congress finds that--
  (1) the Federal National Mortgage Association, the Federal Home Loan Mortgage
  Corporation, and the Federal Home Loan Banks have important public missions
  that are reflected in the statutes establishing the enterprises;
  (2) because the continued ability of the Federal National Mortgage
  Association and the Federal Home Loan Mortgage Corporation to accomplish
  their public missions is important to providing housing in the United
  States and the health of the Nation's economy, more effective Federal
  regulation is needed to reduce the risk of failure of the enterprises;
  (3) the Federal National Mortgage Association, the Federal Home Loan
  Mortgage Corporation, and the Federal Home Loan Banks currently pose
  minimal financial risk to the Federal Government;
  (4) such enterprises are not backed by the full faith and credit of the
  United States;
  (5) the entity regulating the Federal National Mortgage Association and
  the Federal Home Loan Mortgage Corporation should have sufficient autonomy
  from the enterprises and special interest groups;
  (6) the entity regulating such enterprises should have the authority to
  establish capital standards, require financial disclosure, prescribe
  adequate standards for books and records and other internal controls,
  conduct examinations when necessary, and enforce compliance with the
  standards and rules that it establishes; and
  (7) while the Federal Housing Finance Board has the authority necessary to
  effectively regulate the financial safety and soundness of the operations
  of the Federal Home Loan Banks, the Federal Home Loan Bank Act should be
  amended to emphasize that providing for financial safety and soundness is
  the primary mission of the Board.
SEC. 3. DEFINITIONS.
  For purposes of this Act:
  (1) COMPENSATION- The term `compensation' means any payment of money or the
  provision of any other thing of current or potential value in connection
  with employment.
  (2) CORE CAPITAL- The term `core capital' means, with respect to an
  enterprise, the sum of the following (as determined in accordance with
  generally accepted accounting principles):
  (A) The par value of outstanding common stock.
  (B) The par value of outstanding preferred stock.
  (C) Paid-in capital.
  (D) Retained earnings.
  (3) DIRECTOR- The term `Director' means the Director of the Office of
  Secondary Market Examination and Oversight of the Department of Housing
  and Urban Development.
  (4) ENTERPRISE- The term `enterprise' means--
  (A) the Federal National Mortgage Association and any subsidiary thereof; and
  (B) the Federal Home Loan Mortgage Corporation and any subsidiary thereof.
  (5) EXECUTIVE OFFICER- The term `executive officer' means, with respect
  to an enterprise, the chief executive officer of the enterprise, chief
  financial officer of the enterprise, president of the enterprise, vice
  chairman of the enterprise, any executive vice president of the enterprise,
  and any senior vice president of the enterprise in charge of a principal
  business unit, division, or function.
  (6) OFFICE- The term `Office' means the Office of Secondary Market
  Examination and Oversight of the Department of Housing and Urban Development.
  (7) REGULATORY CAPITAL- The term `regulatory capital' means, with respect
  to an enterprise--
  (A) the core capital of the enterprise plus a total allowance for
  foreclosure losses (including an allowance for portfolio mortgage losses,
  an allowance for nonreimbursable foreclosure costs on government claims,
  and any liability reflected on the balance sheet for the corporation for
  estimated foreclosure losses on mortgage-backed securities); plus
  (B) any other amounts from sources of funds available to absorb losses
  incurred by the enterprise, that the Director by regulation determines
  are appropriate to include in determining regulatory capital.
  (8) SECRETARY- The term `Secretary' means the Secretary of Housing and
  Urban Development.
  (9) STATE- The term `State' means the States of the United States, the
  District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of
  the Northern Mariana Islands, Guam, the Virgin Islands, American Samoa,
  the Trust Territory of the Pacific Islands, and any other territory or
  possession of the United States.
TITLE I--SUPERVISION AND REGULATION OF FNMA AND FHLMC
Subtitle A--Establishment of Financial Safety and Soundness Regulator
SEC. 101. ESTABLISHMENT OF OFFICE OF SECONDARY MARKET EXAMINATION AND
OVERSIGHT.
  Effective January 1, 1992, there shall be established in the Department of
  Housing and Urban Development the Office of  Secondary Market Examination
  and Oversight, which shall be an office within the Department.
SEC. 102. DIRECTOR.
  (a) IN GENERAL- The Office shall be under the management of a Director,
  who shall be appointed by the President by and with the advice and consent
  of the Senate from among individuals who are citizens of the United States
  and have experience in financial management or oversight. An individual may
  not be appointed as Director if the individual has served as an executive
  officer of an enterprise at any time during the 5-year period ending upon
  the appointment of such individual.
  (b) TERM- The Director shall be appointed for a term of 5 years.
  (c) VACANCY- A vacancy in the position of Director shall be filled in the
  manner in which the original appointment was made under subsection (a). Any
  Director appointed to fill a vacancy occurring before the expiration of the
  term for which the Director's predecessor was appointed shall be appointed
  only for the remainder of that term.
  (d) SERVICE AFTER END OF TERM- A Director may serve after the expiration
  of the term for which the Director was appointed until a successor Director
  has been appointed.
  (e) DEPUTY DIRECTOR-
  (1) IN GENERAL- There shall be in the Office a Deputy Director who shall be
  appointed by the President from among individuals who are citizens of the
  United States and have experience in financial management or oversight. An
  individual may not be appointed as Deputy Director if the individual has
  served as an executive officer of an enterprise at any time during the
  5-year period ending upon the appointment of such individual.
  (2) TERM- The Deputy Director shall be appointed for a term of 5 years.
  (3) FUNCTIONS- The Deputy Director shall have such functions, powers,
  and duties as the Director shall prescribe. In the event of the death,
  resignation, sickness, or absence of the Director, the Deputy Director
  shall serve as acting Director until the return of the Director or the
  appointment of a successor under subsection (c).
SEC. 103. AUTHORITY OF DIRECTOR.
  (a) EXCLUSIVE AUTHORITY- The Director shall make determinations and
  take actions that the Director determines necessary with respect to each
  enterprise regarding--
  (1) examinations of the enterprises under section 211;
  (2) decisions to appoint conservators for the enterprises;
  (3) enforcement actions under titles II and III, including any final
  decisions in contested administrative enforcement proceedings; and
  (4) approval of payments of dividends by the enterprises under section
  303(c)(2) of the Federal National Mortgage Association Charter Act and
  section 303(b)(3)(B) of the Federal Home Loan Mortgage Corporation Act.
The authority of the Director under this subsection shall not be subject to
the review or approval of the Secretary.
  (b) AUTHORITY SUBJECT TO APPROVAL OF SECRETARY- Any authority of the Director
  not referred to in subsection (a), including the authority to issue rules and
  regulations, shall be subject to the review and approval of the Secretary,
  but the Secretary may delegate the authority to review to other officers
  and employees of the Department of Housing and Urban Development.
  (c) DELEGATION OF AUTHORITY- The Director may delegate to officers and
  employees of the Office any of the functions, powers, and duties of the
  Director, as the Director considers appropriate.
SEC. 104. PERSONNEL.
  The Director shall appoint and fix the compensation of such officers and
  employees of the Office as the Director considers necessary to carry out
  the functions of the Director and the Office. Officers and employees shall
  be appointed without regard to civil service laws and their compensation
  fixed without regard to the provisions of title 5, United States Code.
SEC. 105. FUNDING.
  (a) ASSESSMENTS AND FEES- The Director may establish and collect from the
  enterprises such assessments, fees, and other charges that the Director
  considers necessary so that the amount collected is an amount sufficient
  to provide for reasonable costs and expenses of the Office of Secondary
  Market Examination and Oversight, including the expenses of any examinations
  under section 211.
  (b) FUND- There is established in the Treasury of the United States a fund
  to be known as the Secondary Market Examination and Oversight Fund. Any
  assessments, fees, and charges collected pursuant to subsection (a) shall
  be deposited in the Fund. Amounts in the Fund shall be available, to the
  extent provided in appropriations Acts--
  (1) to carry out the responsibilities of the Director relating to the
  enterprises; and
  (2) for necessary administrative and nonadministrative expenses of the
  Office to carry out the purposes of this Act.
SEC. 106. ANNUAL REPORTS.
  The Director shall submit to the Congress, not later than April 15 of each
  year, a written report, which shall include--
  (1) a description of the actions taken, and being undertaken, by the
  Director to carry out this Act;
  (2) a description of the financial safety and soundness of each enterprise,
  including the results and conclusions of the annual examinations of the
  enterprises conducted under section 211(a)(1); and
  (3) any recommendations for legislation to enhance the financial safety
  and soundness of the enterprises.
SEC. 107. INFORMATION, RECORDS, AND MEETINGS.
  For purposes of subchapter II of chapter 5 of title 5, United States Code
  (5 U.S.C. 551 et seq.), the Office shall be considered an agency responsible
  for the regulation or supervision of financial institutions.
SEC. 108. REGULATIONS AND ORDERS.
  Subject to the approval of the Secretary (as provided in section 103(b)),
  the Director shall issue any regulations and orders necessary to carry out
  the duties of the Director and to carry out this Act. The regulations under
  this section shall be issued after notice and opportunity for public comment
  pursuant to the provisions of section 553 of title 5, United States Code
  (notwithstanding subsections (b)(B) and (d)(3) of such section).
Subtitle B--Amendments to Other Acts
SEC. 121. AMENDMENTS TO FEDERAL NATIONAL MORTGAGE ASSOCIATION CHARTER ACT.
  (a) PURCHASE OF CONGREGATE CARE AND NURSING HOME MORTGAGES- Section
  302(b)(2) of the Federal National Mortgage Association Charter Act (12
  U.S.C. 1717(b)(2)) is amended by inserting after the 5th sentence the
  following new sentence: `For purposes of this title, the term `conventional
  mortgages' shall include mortgages on congregate care, nursing home, and
  other group housing facilities that provide housing and other specialized
  medical and health care services to occupants.'.
  (b) CAPITALIZATION- Section 303 of the Federal National Mortgage Association
  Charter Act (12 U.S.C. 1718) is amended--
  (1) in subsection (a), by inserting after the period at the end the following
  new sentence: `The corporation may issue shares of common stock in return
  for appropriate payments into capital or capital and surplus.';
  (2) by striking subsection (b) and inserting the following new subsection:
  `(b)(1) The corporation may impose charges or fees, which may be regarded
  as elements of pricing, with the objective that all costs and expenses of
  the operations of the corporation should be within its income derived from
  such operations and that such operations should be fully self-supporting.
  `(2) All earnings from the operations of the corporation shall annually
  be transferred to the general surplus account of the corporation. At any
  time, funds of the general surplus account may, in the discretion of the
  board of directors, be transferred to reserves.';
  (3) by striking subsection (c) and inserting the following new subsection:
  `(c)(1) Except as provided in paragraph (2), the corporation may pay to
  holders of its common stock such dividends as may be declared by the board
  of directors. All dividends shall be charged against the general surplus
  account of the corporation.
  `(2) The corporation may not make any payment of dividends that would
  decrease the regulatory capital of the corporation (as such term is defined
  in section 3 of the Government-Sponsored Housing Enterprises Financial
  Safety and Soundness Act of 1991) to an amount less than the risk-based
  capital level for the corporation established under section 201 of such
  Act or that would decrease the core capital of the corporation (as such
  term is defined in such section 3) to an amount less than the minimum
  capital level for the corporation established under section 202 of such
  Act, without prior written approval of the payment by the Director of the
  Office of Secondary Market Examination and Oversight of the Department of
  Housing and Urban Development.
  `(3) The Director of the Office of Secondary Market Examination and Oversight
  may require the corporation to submit a report to the Director after the
  declaration of any dividend by the corporation and before the payment of the
  dividend. The report shall be made in such form and under such circumstances
  and shall contain such information as the Director shall require.'; and
  (4) in subsection (f)--
  (A) by striking `to make payments' and all that follows through `such
  capital contributions,'; and
  (B) by striking `additional shares of such stock,' and inserting `shares
  of common stock of the corporation'.
  (c) RATIO OF OBLIGATIONS-
  (1) IN GENERAL- Section 304 of the Federal National Mortgage Association
  Charter Act (12 U.S.C. 1719) is amended--
  (A) in subsection (b), by striking the semicolon in the first sentence
  and all that follows through end of the second sentence and inserting a
  period; and
  (B) in subsection (e), by striking the fourth sentence.
  (2) EFFECTIVE DATE- The amendments made by paragraph (1) shall take effect
  upon the expiration of the 18-month period beginning on the date of the
  enactment of this Act.
  (d) STATEMENT IN SECURITIES- Section 304(d) of the Federal National Mortgage
  Association Charter Act (12 U.S.C. 1719(d)) is amended by inserting after
  the period at the end the following new sentence: `The corporation shall
  insert appropriate language in all of the securities issued under this
  subsection clearly indicating that such securities, together with the
  interest thereon, are not guaranteed by the United States and do not
  constitute a debt or obligation of the United States or any agency or
  instrumentality thereof other than the corporation.'.
  (e) ASSESSMENTS FOR OFFICE OF SECONDARY MARKET EXAMINATION AND OVERSIGHT-
  The first sentence of section 304(f) of the Federal National Mortgage
  Association Charter Act (12 U.S.C. 1719(f)) is amended by inserting after
  `section 309(g)' the following: `of this Act and section 105(a) of the
  Government-Sponsored Housing Enterprises Financial Safety and Soundness
  Act of 1991'.
  (f) BOARD OF DIRECTORS-
  (1) IN GENERAL- Effective on the date of the enactment of this Act,
  the second sentence of section 308(b) of the Federal National Mortgage
  Association Charter Act (12 U.S.C. 1723(b)) is amended--
  (A) by striking `and' after the second comma; and
  (B) by inserting before the period at the end the following: `, and at least
  one person chosen from organizations with more than a 2-year history of
  representing consumer or community interests or the interests of residents
  of low-income housing'.
  (2) IMPLEMENTATION- The amendments made by paragraph (1) shall apply to
  the first annual appointment by the President of members to the board of
  directors of the Federal National Mortgage Association that occurs after
  the date of the enactment of this Act.
  (g) COMPENSATION- Section 309(d) of the Federal National Mortgage Association
  Charter Act (12 U.S.C. 1723a(d)) is amended--
  (1) in the first sentence of paragraph (2) by striking `as it may determine'
  and inserting the following: `as the board of directors determines
  reasonable and comparable with compensation for employment in positions
  in other similar businesses (including other major financial services
  companies) involving similar duties and responsibilities, except that that
  a significant portion of potential compensation of all executive officers
  (as such term is defined in paragraph (3)(C)) of the corporation shall be
  based on the performance of the corporation'; and
  (2) by adding at the end the following new paragraph:
  `(3)(A) Not later than June 30, 1992, and annually thereafter, the
  corporation shall submit a report to the Congress on (i) the comparability of
  the compensation policies of the corporation with the compensation policies
  of other similar businesses, (ii) in the aggregate, the percentage of total
  cash compensation and payments under employee benefit plans (which shall
  be defined in a manner consistent with the corporation's proxy statement
  for the annual meeting of shareholders for the preceding year) earned by
  executive officers of the corporation during the preceding year that was
  based on the corporation's performance, and (iii) the comparability of the
  corporation's financial performance with the performance of other similar
  businesses. The report shall include a copy of the corporation's proxy
  statement for the annual meeting of shareholders for the preceding year.
  `(B) After the date of the enactment of the Government-Sponsored Housing
  Enterprises Financial Safety and Soundness Act of 1991, the corporation
  may not enter into any agreement or contract to provide any payment of
  money or other thing of current or potential value in connection with the
  termination of employment of any executive officer of the corporation,
  unless such agreement or contract is approved in advance by the Secretary
  of Housing and Urban Development. The Secretary may not approve any such
  agreement or contract unless the Secretary determines that the benefits
  provided under the agreement or contract are comparable to benefits under
  such agreements for officers of other public and private entities involved
  in financial services and housing interests who have comparable duties and
  responsibilities. For purposes of this subparagraph, any renegotiation,
  amendment, or change after such date of enactment to any such agreement
  or contract entered into on or before such date of enactment shall be
  considered entering into an agreement or contract.
  `(C) For purposes of this paragraph, the term `executive officer' has the
  meaning given the term in section 3 of the Government-Sponsored Housing
  Enterprises Financial Safety and Soundness Act of 1991.'.
  (h) GENERAL REGULATORY POWERS- Section 309(h) of the Federal National
  Mortgage Association Charter Act (12 U.S.C. 1723a(h)) is amended to read
  as follows:
  `(h)(1) Except for the authority of the Director of the Office of
  Secondary Market Examination and Oversight pursuant to section 103(a) of
  the Government-Sponsored Housing Enterprises Financial Safety and Soundness
  Act of 1991, the Secretary of Housing and Urban Development shall have
  general regulatory power over the Federal National Mortgage Association
  and shall make such rules and regulations as shall be necessary and proper
  to ensure that the purposes of this title are accomplished.
  `(2)(A) The Secretary shall require that a reasonable portion of the
  corporation's mortgage purchases be related to the national goal of providing
  adequate housing for low- and moderate-income families, but with reasonable
  economic return to the corporation.
  `(B) For purposes of this paragraph, the term `low-income family' means
  a family or individual whose income does not exceed 80 percent of the
  median income for the area, as determined by the Secretary, and the
  term `moderate-income family' means a family or individual who is not
  a low-income family and whose income does not exceed 100 percent of the
  median income for the area, as determined by the Secretary; except that
  the Secretary may establish income ceilings for low- and moderate-income
  families higher and lower than 80 and 100 percent of the median for the
  area, respectively, if the Secretary determines that such variations are
  necessary because of prevailing levels of construction or rental costs or
  unusually high or low family incomes.
  `(3) The Secretary may require the corporation to make reports on its
  activities as the Secretary deems advisable. The Secretary shall, not
  later than June 30 of each year, report to the Congress on the activities
  of the corporation under this title.
  `(4) The Secretary shall, by regulation, prohibit the corporation from
  purchasing mortgages from any mortgage seller that discriminates on the basis
  of race, religion, national origin, ethnic background, sex, marital status,
  or age in connection with the origination of a mortgage. The Secretary
  shall determine when a mortgage seller has discriminated as provided in
  this section and shall consider violations of the Fair Housing Act, the
  Equal Credit Opportunity Act (relating to mortgage credit), or any other
  Federal, State, or other law prohibiting similar discriminatory practices,
  as evidence of discrimination under this paragraph. The Secretary shall
  notify the Corporation when a mortgage seller has been found to have
  discriminated and shall notify the Corporation of the duration of the
  suspension under this paragraph.'.
  (i) REQUESTS FOR APPROVAL- The first sentence of section 309(i) of the
  Federal National Mortgage Association Charter Act (12 U.S.C. 1723a(i))
  is amended by striking `, after the date of the enactment of the Secondary
  Mortgage Market Enhancement Act of 1984,'.
  (j) GAO AUDITS- The first sentence of section 309(j) of the Federal
  National Mortgage Association Charter Act (12 U.S.C. 1723a(j)) is amended
  to read as follows: `The programs, activities, receipts, expenditures, and
  financial transactions of the corporation shall be subject to audit by the
  Comptroller General of the United States under such rules and regulations
  as may be prescribed by the Comptroller General.'.
  (k) REPORTS TO DIRECTOR- Section 309 of the Federal National Mortgage
  Association Charter Act (12 U.S.C. 1723a) is amended by adding at the end
  the following new subsection:
  `(k)(1) The corporation shall submit to the Director of the Office of
  Secondary Market Examination and Oversight of the Department of Housing
  and Urban Development quarterly reports of the financial condition of
  the corporation which shall be in such form, contain such information,
  and be submitted on such dates as the Director of the Office of Secondary
  Market Examination and Oversight shall require.
  `(2) Each report of condition shall contain a declaration by the president,
  vice president, treasurer, or any other officer designated by the board
  of directors of the corporation to make such declaration, that the report
  is true and correct to the best of such officer's knowledge and belief.
  `(3) The Director of the Office of Secondary Market Examination and
  Oversight may require the corporation to submit additional reports of
  financial condition, which shall be in such form, contain such information,
  and be submitted on such dates as the Director may require. The Director
  may also require the corporation to submit special reports whenever, in
  the judgment of the Director, such reports are necessary to carry out the
  purposes of the Government-Sponsored Housing Enterprises Financial Safety
  and Soundness Act of 1991. The Director may not require the inclusion
  in any such special report of any information that is not reasonably
  obtainable by the corporation. The Director shall notify the corporation,
  a reasonable period in advance of the date for submission of any report,
  of any specific information to be contained in the report and the date
  for the submission of the report.'.
  (l) REPORT REGARDING MORTGAGE AND BORROWER CHARACTERISTICS- Section 309 of
  the Federal National Mortgage Association Charter Act (12 U.S.C. 1723a),
  as amended by the preceding provisions of this section, is further amended
  by adding at the end the following new subsection:
  `(l)(1) With respect to residential mortgages for which information is
  or was required to be made available under the Home Mortgage Disclosure
  Act of 1975, the corporation shall, for each year, submit a report to the
  Secretary of Housing and Urban Development containing information describing
  the characteristics of such mortgages purchased by the corporation during
  the year and the borrowers under such mortgages, including the number and
  dollar amounts of such mortgages, the incomes, racial characteristics,
  and gender of the borrowers under such mortgages, and any other information
  that the Secretary may require.
  `(2) The report under this subsection shall be itemized in a manner
  sufficient to disclose the information and characteristics required under
  paragraph (1) by area, as required by the Secretary. For purposes of this
  paragraph, the term `area' means (A) census tracts, for mortgage loans
  secured by property located within any county with a population of more
  than 30,000, within a primary metropolitan statistical area, metropolitan
  statistical area, or consolidated metropolitan statistical area that
  is not comprised of designated primary metropolitan statistical areas,
  or (B) counties, for mortgage loans secured by property located in any
  other location.
  `(3) The Corporation shall make the first report under this subsection
  after issuance of regulations implementing this subsection pursuant to
  section 131 of the Government-Sponsored Housing Enterprises Financial
  Safety and Soundness Act of 1991.'.
  (m) STOCK ISSUANCES- The second sentence of section 311 of the Federal
  National Mortgage Association Charter Act (12 U.S.C. 1723c) is amended
  by striking `and all issuances of stock, and debt obligations convertible
  into stock, by the corporation'.
  (n) HOUSING IMPACT GOALS AND PERFORMANCE- The Federal National Mortgage
  Association Charter Act (12 U.S.C. 1716 et seq.) is amended by inserting
  after section 312 the following new section:
`HOUSING IMPACT GOALS AND PERFORMANCE
  `SEC. 313. (a) FINDINGS- The Congress finds that--
  `(1) as a government-sponsored secondary mortgage market enterprise, the
  corporation has an affirmative obligation to promote affordable housing
  for low- and moderate-income families, consistent with the corporation's
  overall mission;
  `(2) the corporation should establish annual affordable housing goals and
  report to the Congress annually on the achievement of the goals; and
  `(3) the ability of the corporation to meet affordable housing goals is
  dependent upon the availability of public subsidies provided under Federal
  law to assist very low-income and low-income families afford decent rental
  housing and homeownership.
  `(b) ESTABLISHMENT AND REPORTING OF HOUSING IMPACT GOALS-
  `(1) REQUIREMENT- Not later than January 15, 1992, and annually thereafter,
  the corporation shall establish, in writing, and submit to the Congress, the
  corporation's affordable housing goals under this subsection for the year.
  `(2) MORTGAGE PURCHASES- For 1992, 1993, and 1994, the affordable housing
  goals shall include mortgage purchases in the following volumes and
  characteristics:
  `(A) 1992 AND 1993- During the 2-year period consisting of 1992 and 1993,
  mortgage purchases of not less than $2,000,000,000, with one-half of such
  purchases directed to 1- to 4-family housing and one-half to multifamily
  housing satisfying the requirements under subsection (c).
  `(B) 1994- For 1994, mortgage purchases of not less than 1 percent of the
  total amount of mortgage purchases of the corporation during 1993, with 40
  percent of such purchases directed to 1- to 4-family housing and 60 percent
  to multifamily housing satisfying the requirements under subsection (c).
  `(c) INCOME CHARACTERISTICS-
  `(1) MULTIFAMILY MORTGAGES- Purchases of multifamily housing mortgages
  under subsection (b)(2) shall be directed in the following proportions:
  `(A) 45 percent for multifamily housing affordable to families whose
  incomes do not exceed 80 percent of the median income for the area; and
  `(B) 55 percent for multifamily housing in which--
  `(i) at least 20 percent of the units are affordable to families whose
  incomes do not exceed 50 percent of the median income for the area; or
  `(ii) at least 40 percent of the units are affordable to families whose
  incomes do not exceed 60 percent of the median income for the area.
  `(2) SINGLE FAMILY MORTGAGES- Purchases of 1- to 4-family housing mortgages
  under subsection (b)(2) shall be directed in the following proportions:
  `(A) 45 percent for mortgages for families whose incomes do not exceed 80
  percent of the median income for the area and who live in census tracts
  in which the median income does not exceed 80 percent of the area median; and
  `(B) 55 percent for mortgages for families whose incomes do not exceed 60
  percent of the median income for the area.
  `(d) ADVISORY COUNCIL- The corporation shall appoint an Affordable Housing
  Advisory Council to advise the corporation regarding possible methods for
  achieving the affordable housing goals established under this section. The
  Council shall consist of 15 individuals, who shall include representatives
  of community-based and other nonprofit and for-profit organizations and
  State and local government agencies actively engaged in the promotion,
  development, or financing of housing for low-income families.
  `(e) OTHER REQUIREMENTS- In working to meet the affordable housing goals
  under this section, the corporation shall--
  `(1) design programs and products that facilitate the use of assistance
  provided by the Federal Government and State and local governments;
  `(2) develop partnerships with nonprofit and for-profit organizations
  that develop and finance housing and with State and local governments,
  including housing finance agencies;
  `(3) take affirmative steps to help primary lenders make housing credit
  available in areas with concentrations of low-income and minority families
  and to assist such lenders in meeting their obligations under the Community
  Reinvestment Act of 1977;
  `(4) undertake financings in both rural and urban areas, geographically
  dispersed across all regions of the United States;
  `(5) develop the institutional capacity to serve as an efficient financing
  partner in helping to finance low- and moderate-income housing; and
  `(6) in undertaking activities to meet such goals, maintain prudent
  underwriting and servicing, operate in a manner consistent with the
  principle that investments earn a reasonable return for risks assumed,
  and provide that all activities of the corporation shall be consistent
  with the safe and sound operation of the corporation.
  `(f) REPORT ON ACHIEVEMENT OF HOUSING IMPACT GOALS- Not later than March 15,
  1993, and annually thereafter, the corporation shall submit to the Congress
  a written report setting forth the activities of the corporation in the
  preceding calendar year that serve low- and moderate-income families,
  including--
  `(1) the dollar volume of homeownership and rental housing business related
  to each of the specific mortgage purchase goals adopted under the affordable
  housing goals, including the number of families served, the income, race,
  and gender of homebuyers served, the income of tenants of rental housing
  (based on available information), and the geographic distribution of the
  housing financed;
  `(2) any barriers to achieving the goals, including the unavailability of
  public subsidies necessary to serve low- and very low-income families;
  `(3) any targeted underwriting features adopted in order to promote
  affordable housing;
  `(4) any actions identified by the management of the corporation as
  appropriate to enhance the organization of the corporation to achieve the
  affordable housing goals and implementation of such actions;
  `(5) any actions taken affirmatively to help primary lenders make housing
  credit available to areas with concentrations of low-income and minority
  families;
  `(6) any partnerships developed with nonprofit and for-profit organizations
  and with State and local governments and housing finance agencies,
  including how the corporation's activities support the objectives of local
  comprehensive housing affordability strategies; and
  `(7) the extent to which the mortgage purchases of the corporation have been
  used in conjunction with public subsidy programs under Federal law, including
  the programs under titles II, III, IV, VI, and VII of the Cranston-Gonzalez
  National Affordable Housing Act (and the amendments made by such titles),
  the community investment and affordable housing programs of the Federal
  Home Loan Banks under section 10 of the Federal Home Loan Bank Act, the
  affordable housing provisions applicable to the Resolution Trust Corporation
  under section 21A(c) of the Federal Home Loan Bank Act, and special lending
  activities conducted in support of the Community Reinvestment Act of 1977.
The corporation shall make the reports under this subsection available to
the public at the principal and regional offices of the corporation.
  `(g) COLLECTION OF DEMOGRAPHIC DATA- To facilitate the ability of the
  corporation to report on the demographic characteristics of families served,
  the corporation shall collect from mortgage sellers, with respect to each
  owner-occupied single family mortgage purchased, information collected by
  the seller on the income, race, and gender of the mortgagor. The corporation
  shall also make its best efforts to collect information with respect to
  the income of residents of rental properties financed by the corporation.
  `(h) AUTHORIZATION OF ACTIVITIES- Notwithstanding any other provision of law,
  the corporation may undertake activities and devote resources in support of
  the affordable housing goals under this section without the prior approval
  of the Secretary of Housing and Urban Development. The general regulatory
  power of the Secretary under section 309(h)(1) shall not apply to this
  section. During the period that the corporation is required to establish
  affordable housing goals, the Secretary may not establish mortgage purchase
  requirements under section 309(h)(2) for housing benefiting families in
  the income groups served by the affordable housing goals.
  `(i) DEFINITIONS- For the purpose of this section--
  `(1) the term `median income' means the unadjusted median family income
  for an area, as determined and published annually by the Secretary of
  Housing and Urban Development; and
  `(2) the term `mortgage purchases' includes mortgages purchased for
  portfolio and securitization.'.
  (o) TECHNICAL AMENDMENTS-
  (1) Section 302(c) of the Federal National Mortgage Association Charter Act
  (12 U.S.C. 1717(c)) is amended--
  (A) in paragraph (2)--
  (i) in the first sentence following subparagraph (F), by striking `him'
  and inserting `the trustor'; and
  (ii) in the last sentence, by striking `his' each place it appears and
  inserting `the trustor's'; and
  (B) in paragraph (3), by striking `he' each place it appears and inserting
  `the trustor'.
  (2) Section 304(c) of the Federal National Mortgage Association Charter Act
  (12 U.S.C. 1719(c)) is amended--
  (A) by striking `his' each place it appears and inserting `the Secretary's';
  and
  (B) in the fourth sentence--
  (i) by striking `he' and inserting `the Secretary'; and
  (ii) by striking `him' and inserting `the Secretary'.
  (3) Section 309 of the Federal National Mortgage Association Charter Act
  (12 U.S.C. 1723a) is amended--
  (A) in subsection (d)(2)--
  (i) in the third sentence, by striking `his employment' each place it
  appears and inserting `the employment of such officer or employee'; and
  (ii) in the last sentence, by striking `his basic pay' and inserting
  `the basic pay of such person'; and
  (B) in subsection (e), by striking `he or it' and inserting `the individual,
  association, partnership, or corporation'.
  (p) EFFECTIVE DATE- Except as otherwise provided in this section and the
  amendments made by this section, the amendments made by this section shall
  take effect on January 1, 1992.
SEC. 122. AMENDMENTS TO FEDERAL HOME LOAN MORTGAGE CORPORATION ACT.
  (a) DEFINITIONS- Section 302 of the Federal Home Loan Mortgage Corporation
  Act (12 U.S.C. 1451) is amended--
  (1) in subsection (h), by inserting after the period at the end the following
  new sentence: `The term `residential mortgage' also includes a loan or
  advance of credit secured by a mortgage or other lien on congregate care,
  nursing home, and other group housing facilities that provide housing and
  other specialized medical and health care services to occupants.'; and
  (2) by adding at the end the following new subsections:
  `(m) The term `low-income family' means a family or individual whose income
  does not exceed 80 percent of the median income for the area, as determined
  by the Secretary, except that the Secretary may establish income ceilings
  higher and lower than 80 percent of the median for the area if the Secretary
  determines that such variations are necessary because of prevailing levels
  of construction or rental costs or unusually high or low family incomes.
  `(n) The term `moderate-income family' means a family or individual who
  is not a low-income family and whose income does not exceed 100 percent
  of the median income for the area, as determined by the Secretary, except
  that the Secretary may establish income ceilings higher and lower than 100
  percent of the median for the area if the Secretary determines that such
  variations are necessary because of prevailing levels of construction or
  rental costs or unusually high or low family incomes.'.
  (b) BOARD OF DIRECTORS-
  (1) IN GENERAL- Effective on the date of the enactment of this Act, the
  second sentence of section 303(a)(2)(A) of the Federal Home Loan Mortgage
  Corporation Act (12 U.S.C. 1452(a)(2)(A)) is amended--
  (A) by striking `and' after the second comma; and
  (B) by inserting before the period at the end the following: `, and at
  least 1 person chosen from organizations with more than a 2-year history of
  representing consumer or community interests or the interests of residents
  of low-income housing'.
  (2) IMPLEMENTATION- The amendments made by paragraph (1) shall apply to
  the first annual appointment by the President of members to the Board of
  Directors of the Federal Home Loan Mortgage Corporation that occurs after
  the date of the enactment of this Act.
  (c) GENERAL REGULATORY POWERS- Section 303(b) of the Federal Home Loan
  Mortgage Corporation Act (12 U.S.C. 1452(b)) is amended--
  (1) in paragraph (1), by striking `The' and inserting the following:
  `Except for the authority of the Director of the Office of Secondary
  Market Examination and Oversight of the Department of Housing and Urban
  Development pursuant to section 103(a) of the Government-Sponsored Housing
  Enterprises Financial Safety and Soundness Act of 1991, the';
  (2) in paragraph (2), by striking `may require' and inserting `shall
  require';
  (3) by striking paragraph (3) and inserting the following new paragraph:
  `(3)(A) Except as provided in subparagraph (B), the Corporation may pay
  to holders of its common stock such dividends as may be declared by the
  Board of Directors.
  `(B) The Corporation may not make any payment of dividends that would
  decrease the regulatory capital of the Corporation (as such term is defined
  in section 3 of the Government-Sponsored Housing Enterprises Financial
  Safety and Soundness Act of 1991) to an amount less than the risk-based
  capital level for the Corporation established under section 201 of such
  Act or that would decrease the core capital of the Corporation (as such
  term is defined in such section 3) to an amount less than the minimum
  capital level for the Corporation established under section 202 of such
  Act, without prior written approval of the payment by the Director of the
  Office of Secondary Market Examination and Oversight of the Department of
  Housing and Urban Development.
  `(C) The Director of the Office of Secondary Market Examination and Oversight
  may require the Corporation to submit a report to the Director after the
  declaration of any dividend by the Corporation and before the payment of the
  dividend. The report shall be made in such form and under such circumstances
  and shall contain such information as the Director shall require.';
  (4) in paragraph (4), by striking `may examine and audit the books and
  financial transactions of the Corporation and'; and
  (5) by striking paragraph (6) and inserting the following new paragraph:
  `(6) The Secretary shall, by regulation, prohibit the Corporation from
  purchasing mortgages from any mortgage seller that discriminates on the basis
  of race, religion, national origin, ethnic background, sex, marital status,
  or age in connection with the origination of a mortgage. The Secretary
  shall determine when a mortgage seller has discriminated as provided in
  this section and shall consider violations of the Fair Housing Act, the
  Equal Credit Opportunity Act (relating to mortgage credit), or any other
  Federal, State, or other law prohibiting similar discriminatory practices,
  as evidence of discrimination under this paragraph. The Secretary shall
  notify the Corporation when a mortgage seller has been found to have
  discriminated and shall notify the Corporation of the duration of the
  suspension under this paragraph.'.
  (d) RATIO OF CAPITAL AND OBLIGATIONS- Effective upon the expiration of
  the 18-month period beginning on the date of the enactment of this Act,
  section 303(b) of the Federal Home Loan Mortgage Corporation Act (12
  U.S.C. 1452(b)) is amended by striking paragraph (5).
  (e) COMPENSATION- Section 303 of the Federal Home Loan Mortgage Corporation
  Act (12 U.S.C. 1452) is amended--
  (1) in clause (9) of the first sentence of subsection (c), by inserting after
  `agents' the following: `as the Board of Directors determines reasonable
  and comparable with compensation for employment in positions in other
  similar businesses (including other major financial services companies)
  involving similar duties and responsibilities, except that a significant
  portion of potential compensation of all executive officers (as such term
  is defined in subsection (h)(3)) of the Corporation shall be based on the
  performance of the Corporation'; and
  (2) by adding at the end the following new subsection:
  `(h)(1) Not later than June 30, 1992, and annually thereafter, the
  Corporation shall submit a report to the Congress on (A) the comparability of
  the compensation policies of the Corporation with the compensation policies
  of other similar businesses, (B) in the aggregate, the percentage of total
  cash compensation and payments under employee benefit plans (which shall
  be defined in a manner consistent with the Corporation's proxy statement
  for the annual meeting of shareholders for the preceding year) earned by
  executive officers of the Corporation during the preceding year that was
  based on the Corporation's performance, and (C) the comparability of the
  Corporation's financial performance with the performance of other similar
  businesses. The report shall include a copy of the Corporation's proxy
  statement for the annual meeting of shareholders for the preceding year.
  `(2) Notwithstanding the first sentence of subsection (c), after the
  date of the enactment of the Government-Sponsored Housing Enterprises
  Financial Safety and Soundness Act of 1991, the Corporation may not enter
  into any agreement or contract to provide any payment of money or other
  thing of current or potential value in connection with the termination
  of employment of any executive officer of the Corporation, unless such
  agreement or contract is approved in advance by the Secretary of Housing
  and Urban Development. The Secretary may not approve any such agreement
  or contract unless the Secretary determines that the benefits provided
  under the agreement or contract are comparable to benefits under such
  agreements for officers of other public and private entities involved
  in financial services and housing interests who have comparable duties
  and responsibilities. For purposes of this paragraph, any renegotiation,
  amendment, or change after such date of enactment to any such agreement
  or contract entered into on or before such date of enactment shall be
  considered entering into an agreement or contract.
  `(3) For purposes of this subsection, the term `executive officer' has the
  meaning given the term in section 3 of the Government-Sponsored Housing
  Enterprises Financial Safety and Soundness Act of 1991.'.
  (f) CAPITAL STOCK- Section 304 of the Federal Home Loan Mortgage Corporation
  Act (12 U.S.C. 1453) is amended--
  (1) by striking subsections (b), (c), and (d);
  (2) in subsection (a)(1), by striking `(1) The common stock' and all that
  follows and inserting the following: `The common stock of the Corporation
  shall consist of voting common stock, which shall be issued to such holders
  in the manner and amount, and subject to any limitations on concentration
  of ownership, as may be established by the Corporation.'; and
  (3) in subsection (a)(2)--
  (A) in the first sentence, by striking `nonvoting common stock and the';
  (B) by striking the last sentence; and
  (C) by striking the paragraph designation and inserting `(b)'.
  (g) MORTGAGE SELLERS- Section 305(a)(1) of the Federal Home Loan Mortgage
  Corporation Act (12 U.S.C. 1454(a)(1)) is amended--
  (1) in the first sentence, by striking `from any Federal home loan bank' and
  all that follows through the end of the sentence and inserting a period; and
  (2) in the second sentence, by striking `, and the servicing' and all that
  follows through the end of the sentence and inserting a period.
  (h) OBLIGATIONS AND SECURITIES AND ASSESSMENTS FOR OFFICE- Section 306 of
  the Federal Home Loan Mortgage Corporation (12 U.S.C. 1455) is amended--
  (1) in subsection (h)--
  (A) by inserting `(1)' after `(h)`; and
  (B) by adding at the end the following new paragraph:
  `(2) The Corporation shall insert appropriate language in all of the
  obligations and securities of the Corporation issued under this section
  and section 305 clearly indicating that such obligations and securities,
  together with the interest thereon, are not guaranteed by the United States
  and do not constitute a debt or obligation of the United States or any
  agency or instrumentality thereof other than the Corporation.'; and
  (2) in the first sentence of subsection (i), by striking `section 303(c)
  or 306(c)' and inserting the following: `sections 303(c) and 306(c) of
  this Act and section 105(a) of the Government-Sponsored Housing Enterprises
  Financial Safety and Soundness Act of 1991'.
  (i) GAO AUDITS- The first sentence of section 307(b) of the Federal Home
  Loan Mortgage Corporation Act (12 U.S.C. 1456(b)) is amended to read as
  follows: `The programs, activities, receipts, expenditures, and financial
  transactions of the Corporation shall be subject to audit by the Comptroller
  General of the United States under such rules and regulations as may be
  prescribed by the Comptroller General.'.
  (j) REPORTS TO DIRECTOR- Section 307 of the Federal Home Loan Mortgage
  Corporation Act (12 U.S.C. 1456) is amended by adding at the end the
  following new subsection:
  `(c)(1) The Corporation shall submit to the Director of the Office of
  Secondary Market Examination and Oversight of the Department of Housing
  and Urban Development quarterly reports of the financial condition of
  the Corporation which shall be in such form, contain such information,
  and be submitted on such dates as the Director of the Office of Secondary
  Market Examination and Oversight shall require.
  `(2) Each report of condition shall contain a declaration by the president,
  vice president, treasurer, or any other officer designated by the Board
  of Directors of the Corporation to make such declaration, that the report
  is true and correct to the best of such officer's knowledge and belief.
  `(3) The Director of the Office of Secondary Market Examination and
  Oversight may require the Corporation to submit additional reports of
  financial condition, which shall be in such form, contain such information,
  and be submitted on such dates as the Director shall require. The Director
  may also require the Corporation to submit special reports whenever, in
  the judgment of the Director, such reports are necessary to carry out the
  purposes of the Government-Sponsored Housing Enterprises Financial Safety
  and Soundness Act of 1991. The Director may not require the inclusion
  in any such special report of any information that is not reasonably
  obtainable by the Corporation. The Director shall notify the Corporation,
  a reasonable period in advance of the date for submission of any report,
  of any specific information to be contained in the report and the date
  for the submission of the report.'.
  (k) REPORT REGARDING MORTGAGE AND BORROWER CHARACTERISTICS- Section 307
  of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1456), as
  amended by the preceding provisions of this section, is further amended
  by adding at the end the following new subsection:
  `(d)(1) With respect to residential mortgages for which information is
  or was required to be made available under the Home Mortgage Disclosure
  Act of 1975, the Corporation shall, for each year, submit a report to the
  Secretary of Housing and Urban Development containing information describing
  the characteristics of such mortgages purchased by the Corporation during
  the year and the borrowers under such mortgages, including the number and
  dollar amounts of such mortgages, the incomes, racial characteristics,
  and gender of the borrowers under such mortgages, and any other information
  that the Secretary may require.
  `(2) The report under this subsection shall be itemized in a manner
  sufficient to disclose the information and characteristics required under
  paragraph (1) by area, as required by the Secretary. For purposes of this
  paragraph, the term `area' means (A) census tracts, for mortgage loans
  secured by property located within any county with a population of more
  than 30,000, within a primary metropolitan statistical area, metropolitan
  statistical area, or consolidated metropolitan statistical area that
  is not comprised of designated primary metropolitan statistical areas,
  or (B) counties, for mortgage loans secured by property located in any
  other location.
  `(3) The Corporation shall make the first report under this subsection
  after issuance of regulations implementing this subsection pursuant to
  section 131 of the Government-Sponsored Housing Enterprises Financial
  Safety and Soundness Act of 1991.'.
  (l) HOUSING IMPACT GOALS AND PERFORMANCE- The Federal Home Loan Mortgage
  Corporation Act (12 U.S.C. 1451 et seq.) is amended by adding at the end
  the following new section:
`HOUSING IMPACT GOALS AND PERFORMANCE
  `SEC. 311. (a) FINDINGS- The Congress finds that--
  `(1) as a government-sponsored secondary mortgage market enterprise, the
  Corporation has an affirmative obligation to promote affordable housing
  for low- and moderate-income families, consistent with the Corporation's
  overall mission;
  `(2) the Corporation should establish annual affordable housing goals and
  report to the Congress annually on the achievement of the goals; and
  `(3) the ability of the Corporation to meet affordable housing goals is
  dependent upon the availability of public subsidies provided under Federal
  law to assist very low-income and low-income families afford decent rental
  housing and homeownership.
  `(b) ESTABLISHMENT AND REPORTING OF HOUSING IMPACT GOALS-
  `(1) REQUIREMENT- Not later than January 15, 1992, and annually thereafter,
  the Corporation shall establish, in writing, and submit to the Congress, the
  Corporation's affordable housing goals under this subsection for the year.
  `(2) MORTGAGE PURCHASES- For 1992, 1993, and 1994, the affordable housing
  goals shall include mortgage purchases in the following volumes and
  characteristics:
  `(A) 1992 AND 1993- During the 2-year period consisting of 1992 and 1993,
  mortgage purchases of not less than $1,500,000,000, with one-half of such
  purchases directed to 1- to 4-family housing and one-half to multifamily
  housing satisfying the requirements under subsection (c).
  `(B) 1994- For 1994, mortgage purchases of not less than 1 percent of the
  total amount of mortgage purchases of the Corporation during 1993, with 40
  percent of such purchases directed to 1- to 4-family housing and 60 percent
  to multifamily housing satisfying the requirements under subsection (c).
  `(c) INCOME CHARACTERISTICS-
  `(1) MULTIFAMILY MORTGAGES- Purchases of multifamily housing mortgages
  under subsection (b)(2) shall be directed in the following proportions:
  `(A) 45 percent for multifamily housing affordable to families whose
  incomes do not exceed 80 percent of the median income for the area; and
  `(B) 55 percent for multifamily housing in which--
  `(i) at least 20 percent of the units are affordable to families whose
  incomes do not exceed 50 percent of the median income for the area; or
  `(ii) at least 40 percent of the units are affordable to families whose
  incomes do not exceed 60 percent of the median income for the area.
  `(2) SINGLE FAMILY MORTGAGES- Purchases of 1- to 4-family housing mortgages
  under subsection (b)(2) shall be directed in the following proportions:
  `(A) 45 percent for mortgages for families whose incomes do not exceed 80
  percent of the median income for the area and who live in census tracts
  in which the median income does not exceed 80 percent of the area median; and
  `(B) 55 percent for mortgages for families whose incomes do not exceed 60
  percent of the median income for the area.
  `(d) ADVISORY COUNCIL- The Corporation shall appoint an Affordable Housing
  Advisory Council to advise the Corporation regarding possible methods for
  achieving the affordable housing goals established under this section. The
  Council shall consist of 15 individuals, who shall include representatives
  of community-based and other nonprofit and for-profit organizations and
  State and local government agencies actively engaged in the promotion,
  development, or financing of housing for low-income families.
  `(e) OTHER REQUIREMENTS- In working to meet the affordable housing goals
  under this section, the Corporation shall--
  `(1) design programs and products that facilitate the use of assistance
  provided by the Federal Government and State and local governments;
  `(2) develop partnerships with nonprofit and for-profit organizations
  that develop and finance housing and with State and local governments,
  including housing finance agencies;
  `(3) take affirmative steps to help primary lenders make housing credit
  available in areas with concentrations of low-income and minority families
  and to assist such lenders in meeting their obligations under the Community
  Reinvestment Act of 1977;
  `(4) undertake financings in both rural and urban areas, geographically
  dispersed across all regions of the United States;
  `(5) develop the institutional capacity to serve as an efficient financing
  partner in helping to finance low- and moderate-income housing; and
  `(6) in undertaking activities to meet such goals, maintain prudent
  underwriting and servicing, operate in a manner consistent with the
  principle that investments earn a reasonable return for risks assumed,
  and provide that all activities of the Corporation shall be consistent
  with the safe and sound operation of the Corporation.
  `(f) REPORT ON ACHIEVEMENT OF HOUSING IMPACT GOALS- Not later than March 15,
  1993, and annually thereafter, the Corporation shall submit to the Congress
  a written report setting forth the activities of the Corporation in the
  preceding calendar year that serve low- and moderate-income families,
  including--
  `(1) the dollar volume of homeownership and rental housing business related
  to each of the specific mortgage purchase goals adopted under the affordable
  housing goals, including the number of families served, the income, race,
  and gender of homebuyers served, the income of tenants of rental housing
  (based on available information), and the geographic distribution of the
  housing financed;
  `(2) any barriers to achieving the goals, including the unavailability of
  public subsidies necessary to serve low- and very low-income families;
  `(3) any targeted underwriting features adopted in order to promote
  affordable housing;
  `(4) any actions identified by the management of the Corporation as
  appropriate to enhance the organization of the Corporation to achieve the
  affordable housing goals and implementation of such actions;
  `(5) any actions taken affirmatively to help primary lenders make housing
  credit available to areas with concentrations of low-income and minority
  families;
  `(6) any partnerships developed with nonprofit and for-profit organizations
  and with State and local governments and housing finance agencies,
  including how the Corporation's activities support the objectives of local
  comprehensive housing affordability strategies; and
  `(7) the extent to which the mortgage purchases of the Corporation have been
  used in conjunction with public subsidy programs under Federal law, including
  the programs under titles II, III, IV, VI, and VII of the Cranston-Gonzalez
  National Affordable Housing Act (and the amendments made by such titles),
  the community investment and affordable housing programs of the Federal
  Home Loan Banks under section 10 of the Federal Home Loan Bank Act, the
  affordable housing provisions applicable to the Resolution Trust Corporation
  under section 21A(c) of the Federal Home Loan Bank Act, and special lending
  activities conducted in support of the Community Reinvestment Act of 1977.
The Corporation shall make the reports under this subsection available to
the public at the principal and regional offices of the Corporation.
  `(g) COLLECTION OF DEMOGRAPHIC DATA- To facilitate the ability of the
  Corporation to report on the demographic characteristics of families served,
  the Corporation shall collect from mortgage sellers, with respect to each
  owner-occupied single family mortgage purchased, information collected by
  the seller on the income, race, and gender of the mortgagor. The Corporation
  shall also make its best efforts to collect information with respect to
  the income of residents of rental properties financed by the Corporation.
  `(h) AUTHORIZATION OF ACTIVITIES- Notwithstanding any other provision of law,
  the Corporation may undertake activities and devote resources in support of
  the affordable housing goals under this section without the prior approval
  of the Secretary of Housing and Urban Development. The general regulatory
  powers of the Secretary under section 303(b)(1) shall not apply to this
  section. During the period that the Corporation is required to establish
  affordable housing goals, the Secretary may not establish mortgage purchase
  requirements under section 303(b)(2) for housing benefiting families in
  the income groups served by the affordable housing goals.
  `(i) DEFINITIONS- For the purpose of this section--
  `(1) the term `median income' means the unadjusted median family income
  for an area, as determined and published annually by the Secretary of
  Housing and Urban Development; and
  `(2) the term `mortgage purchases' includes mortgages purchased for
  portfolio and securitization.'.
  (m) EFFECTIVE DATE- Except as provided in this section and the amendments
  made by this section, the amendments made by this section shall take effect
  on January 1, 1992.
SEC. 123. AMENDMENTS TO TITLE 5, UNITED STATES CODE.
  (a) DIRECTOR AT LEVEL II OF EXECUTIVE SCHEDULE- Section 5313 of title 5,
  United States Code, is amended by inserting at the end the following
  new item:
  `Director of the Office of Secondary Market Examination and Oversight,
  Department of Housing and Urban Development.'.
  (b) DEPUTY DIRECTOR AT LEVEL III OF EXECUTIVE SCHEDULE- Section 5314
  of title 5, United States Code, is amended by inserting at the end the
  following new item:
  `Deputy Director of the Office of Secondary Market Examination and Oversight,
  Department of Housing and Urban Development.'.
  (c) DEFINITION OF AGENCY- Section 3132(a)(1)(D) of title 5, United States
  Code, is amended by inserting `the Office of Secondary Market Examination
  and Oversight of the Department of Housing and Urban Development,' after
  `Farm Credit Administration,'.
SEC. 124. AMENDMENT TO DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT ACT.
  Section 5 of the Department of Housing and Urban Development Act (42
  U.S.C. 3534) is amended by adding at the end the following new subsection:
  `(d) Notwithstanding any other provision of this Act, the Secretary may
  not merge or consolidate the Office of Secondary Market Examination and
  Oversight of the Department, or any of the functions or responsibilities
  of such Office with any function or program administered by the Secretary,
  unless specifically provided by a reorganization plan pursuant to chapter
  9 of title 5, United States Code.'.
Subtitle C--Miscellaneous Provisions
SEC. 131. IMPLEMENTATION.
  (a) IN GENERAL- The Secretary of Housing and Urban Development and the
  Director of the Office of Secondary Market Examination and Oversight of the
  Department of Housing and Urban Development, as appropriate, shall issue
  final regulations providing for the implementation of the provisions of this
  title and the amendments made by this title not later than the expiration of
  the 18-month period beginning on the date of the enactment of this Act. Such
  regulations shall clearly delineate the responsibilities and authority of
  the Secretary and the Director pursuant to the provision of and amendments
  made by this title. Any regulations issued by the Director pursuant to
  this section shall be issued under the authority provided in section 108.
  (b) NOTICE AND COMMENT- The regulations under this section shall be issued
  after notice and opportunity for public comment pursuant to the provisions
  of section 553 of title 5, United States Code (notwithstanding subsections
  (b)(B) and (d)(3) of such section).
SEC. 132. REVIEW OF UNDERWRITING GUIDELINES.
  (a) STUDY- Each of the enterprises shall conduct a study to review the
  underwriting guidelines of the enterprise. The studies shall--
  (1) examine the extent to which the underwriting guidelines prevent or
  inhibit the purchase or securitization of mortgages for housing located
  in mixed-use, urban center, and predominantly minority neighborhoods and
  for housing for low- and moderate-income families;
  (2) examine the standards employed by private mortgage insurers and the
  extent to which such standards inhibit the purchase and securitization by
  the enterprises of mortgages described in paragraph (1); and
  (3) consider the implications of implementing underwriting standards that--
  (A) establish a downpayment requirement for mortgagors of 5 percent or less;
  (B) allow the use of cash on hand as a source for downpayments; and
  (C) approve borrowers who have a credit history of delinquencies if the
  borrower can demonstrate a satisfactory credit history for at least the
  12-month period ending on the date of the application for the mortgage.
  (b) REPORT- Not later than the expiration of the 1-year period beginning
  on the date of the enactment of this Act, each of the enterprises shall
  submit to the Secretary and to the Congress a report regarding the study
  conducted by the enterprise under subsection (a). The reports shall
  include any recommendations of the enterprises for better meeting the
  housing needs of low- and moderate-income families.
TITLE II--REQUIRED CAPITAL LEVELS FOR FNMA AND FHLMC AND SPECIAL ENFORCEMENT
POWERS
SEC. 201. RISK-BASED CAPITAL LEVELS.
  (a) RISK-BASED CAPITAL TEST- The Director shall, by regulation, establish
  a risk-based capital test under this section for the enterprises. When
  applied to an enterprise, the risk-based capital test shall determine the
  amount of regulatory capital for the enterprise that is sufficient for the
  enterprise to maintain positive capital during a 10-year period in which
  both of the following circumstances occur:
  (1) CREDIT RISK- With respect to mortgages owned or guaranteed by
  the enterprise and other obligations of the enterprise, losses occur
  throughout the United States at a rate of default and severity (based
  on any measurements of default reasonably related to prevailing industry
  practice in determining capital adequacy) reasonably related to the rate and
  severity that occurred in contiguous areas of the United States containing
  an aggregate of not less than 5 percent of the total population of the
  United States that, for a period of not less than 2 years (as established
  by the Director), experienced the highest rates of default and severity
  of mortgage losses, in comparison with such rates of default and severity
  of mortgage losses in other such areas for any period of such duration,
  as determined by the Director.
  (2) INTEREST RATE RISK- Interest rates on Treasury obligations of varying
  terms increase or decrease over the first 12 months of such 10-year period
  by not more than the lesser of (A) 50 percent (with respect to the average
  interest rates on such obligations during the 12-month period preceding the
  10-year period), or (B) 600 basis points, and remain at such level for the
  remainder of the period. This paragraph may not be construed to require
  the Director to determine interest rate risk under this paragraph based
  on the interest rates for various long-term and short-term obligations
  all increasing or all decreasing concurrently.
  (b) CONSIDERATIONS- In establishing the risk-based capital test under
  subsection (a), the Director shall take into account appropriate distinctions
  based on various types of mortgage products, varying terms of Treasury
  obligations, differences in seasoning of mortgages, and any other factors
  the Director considers appropriate.
  (c) RISK-BASED CAPITAL LEVEL- For purposes of this title, the risk-based
  capital level for an enterprise shall be equal to the sum of the following
  amounts:
  (1) CREDIT AND INTEREST RATE RISK- The amount of regulatory capital
  determined by applying the risk-based capital test under subsection (a)
  to the enterprise, adjusted to account for foreign exchange risk.
  (2) MANAGEMENT AND OPERATIONS RISK- To provide for management and operations
  risk, 30 percent of the amount of regulatory capital determined by applying
  the risk-based capital test under subsection (a) to the enterprise.
  (d) EFFECT OF HOUSING IMPACT GOALS- Notwithstanding any other provision
  of this section, if the capital held by an enterprise against any on- and
  off-balance sheet assets and obligations resulting from purchases undertaken
  pursuant to section 313 of the Federal National Mortgage Association Charter
  Act or section 311 of the Federal Home Loan Mortgage Corporation Act, as
  applicable, is equal to or greater than the minimum capital level for the
  enterprise set forth for on- and off-balance sheet assets and obligations
  under section 202, then in determining the risk-based capital level for
  the enterprise the Director shall disregard any such on- and off-balance
  sheet assets and obligations.
  (e) DEFINITIONS- For purposes of this section:
  (1) SEASONING- The term `seasoning' means the change over time in the ratio
  of the unpaid principal balance of a mortgage to the value of the property by
  which such mortgage loan is secured, determined on an annual basis by region,
  in accordance with the Constant Quality Home Price Index published by the
  Secretary of Commerce (or any successor index of similar quality, authority,
  and public availability that is regularly used by the Federal Government).
  (2) TYPE OF MORTGAGE PRODUCT- The term `type of mortgage product' means
  a classification of one or more mortgage products, as established by the
  Director, which have similar characteristics from each set of characteristics
  under the following subparagraphs:
  (A) The property securing the mortgage is--
  (i) a residential property consisting of 1 to 4 dwelling units; or
  (ii) a residential property consisting of more than 4 dwelling units.
  (B) The interest rate on the mortgage is--
  (i) fixed; or
  (ii) adjustable.
  (C) The priority of the lien securing the mortgage is--
  (i) first; or
  (ii) second or other.
  (D) The term of the mortgage is--
  (i) 1 to 15 years;
  (ii) 16 to 30 years; or
  (iii) more than 30 years.
  (E) The owner of the property is--
  (i) an owner-occupant; or
  (ii) an investor.
  (F) The unpaid principal balance of the mortgage--
  (i) will amortize completely over the term of the mortgage and will not
  increase significantly at any time during the term of the mortgage;
  (ii) will not amortize completely over the term of the mortgage and will
  not increase significantly at any time during the term of the mortgage; or
  (iii) may increase significantly at some time during the term of the
  mortgage.
  (G) Any other characteristics of the mortgage, as the Director may determine.
  (f) REGULATIONS- The Director shall issue final regulations establishing the
  risk-based capital test under this section not later than the expiration
  of the 2-year period beginning on the date of the enactment of this
  Act. Such regulations shall contain specific requirements, definitions,
  methods, variables, and parameters used under the risk-based capital test
  and in implementing the test (such as loan loss severity, float income,
  loan-to value ratios, taxes, yield curve slopes, default experience,
  and prepayment rates). The regulations shall be sufficiently specific to
  permit an individual other than the Director to apply the test in the same
  manner as the Director.
  (g) AVAILABILITY OF MODEL- The Director shall make copies of the statistical
  model or models used to implement the risk-based capital test under this
  section available for public acquisition and may charge a reasonable fee
  for such copies.
SEC. 202. MINIMUM CAPITAL LEVELS.
  (a) IN GENERAL- For purposes of this title, the minimum capital level for
  each enterprise shall be an amount of core capital equal to the sum of--
  (1) 2.50 percent of the aggregate on-balance sheet assets of the enterprise,
  as determined in accordance with generally accepted accounting principles;
  and
  (2) 0.45 percent of the unpaid principal balance of outstanding
  mortgage-backed securities and substantially equivalent instruments issued or
  guaranteed by the enterprise and other off-balance sheet obligations of the
  enterprise, excluding commitments to purchase mortgages or issue securities,
  as determined in accordance with generally accepted accounting principles.
  (b) TRANSITION- Notwithstanding subsection (a), for the period beginning
  upon the date of the enactment of this Act and ending upon the expiration
  of the 18-month period beginning upon such date of enactment, the minimum
  capital level for each enterprise shall be an amount of core capital equal
  to the sum of--
  (1) 2.25 percent of the aggregate on-balance sheet assets of the enterprise,
  as determined in accordance with generally accepted accounting principles;
  and
  (2) 0.40 percent of the unpaid principal balance of outstanding
  mortgage-backed securities and substantially equivalent instruments issued or
  guaranteed by the enterprise and other off-balance sheet obligations of the
  enterprise, excluding commitments to purchase mortgages or issue securities,
  as determined in accordance with generally accepted accounting principles.
SEC. 203. CRITICAL CAPITAL LEVELS.
  For purposes of this title, the critical capital level for each enterprise
  shall be an amount of core capital equal to the sum of--
  (1) 1.25 percent of the aggregate on-balance sheet assets of the enterprise,
  as determined in accordance with generally accepted accounting principles;
  and
  (2) 0.25 percent of the unpaid principal balance of outstanding
  mortgage-backed securities and substantially equivalent instruments issued or
  guaranteed by the enterprise and other off-balance sheet obligations of the
  enterprise, excluding commitments to purchase mortgages or issue securities,
  as determined in accordance with generally accepted accounting principles.
SEC. 204. ENFORCEMENT LEVELS.
  (a) IN GENERAL- The Director shall classify the enterprises, for purposes
  of this title, according to the following enforcement levels:
  (1) LEVEL I- An enterprise shall be classified as within level I if the
  enterprise--
  (A) maintains an amount of regulatory capital that is equal to or exceeds
  the risk-based capital level established for the enterprise under section
  201; and
  (B) equals or exceeds the minimum capital level for the enterprise
  established under section 202.
  (2) LEVEL II- An enterprise shall be classified as within level II if--
  (A) the enterprise--
  (i) maintains an amount of regulatory capital that is less than the
  risk-based capital level established for the enterprise; and
  (ii) equals or exceeds the minimum capital level for the enterprise; or
  (B) the enterprise is otherwise classified within level II under subsection
  (b) of this section.
  (3) LEVEL III- An enterprise shall be classified as within level III if--
  (A) the enterprise--
  (i) does not equal or exceed the minimum capital level for the enterprise;
  and
  (ii) equals or exceeds the critical capital level for the enterprise
  established under section 203; or
  (B) the enterprise is otherwise classified within level III under subsection
  (b) of this section.
  (4) LEVEL IV- An enterprise shall be classified as within level IV if
  the enterprise--
  (A) does not equal or exceed the critical capital level for the enterprise;
  or
  (B) is otherwise classified within level IV under subsection (b) of this
  section.
  (b) DISCRETIONARY CLASSIFICATION- If at any time the Director determines in
  writing that an enterprise is taking any action not approved by the Director
  that could result in a rapid depletion of core capital or that the value
  of the property secured by mortgages held or securitized by the enterprise
  has decreased significantly, the Director may classify the enterprise--
  (1) as within level II, if the enterprise is otherwise within level I;
  (2) as within level III, if the enterprise is otherwise within level II; or
  (3) as within level IV, if the enterprise is otherwise within level III.
  (c) QUARTERLY DETERMINATION- The Director shall determine the classification
  of the enterprises for purposes of this title on not less than a quarterly
  basis (and as appropriate under subsection (b)). The first such determination
  shall be made for the quarter ending March 31, 1992.
  (d) NOTICE- Upon determining under subsection (b) or (c) that an enterprise
  is within level II or III, the Director shall provide written notice to
  the Congress and to the enterprise--
  (1) that the enterprise is within such level;
  (2) that the enterprise is subject to the provisions of section 205 or 206,
  as applicable; and
  (3) stating the reasons for the classification of the enterprise within
  such level.
  (e) IMPLEMENTATION- Notwithstanding subsection (a)(1), during the period
  beginning on the date of the enactment of this Act and ending upon the
  effective date of section 205 (as provided in section 205(d)), an enterprise
  shall be classified as within level I if the enterprise equals or exceeds
  the applicable minimum capital level for the enterprise under section 202.
SEC. 205. MANDATORY SUPERVISORY ACTIONS APPLICABLE TO ENTERPRISES WITHIN
LEVEL II.
  (a) CAPITAL RESTORATION PLAN- An enterprise within level II shall, within
  the time period provided in section 209(b) and in consultation with the
  Director, submit to the Director a capital restoration plan that complies
  with section 209 and, after approval, carry out the plan.
  (b) RESTRICTION ON DIVIDENDS- An enterprise within level II may not make any
  payment of dividends that would result in the enterprise being reclassified
  as within level III or IV.
  (c) RECLASSIFICATION FROM LEVEL II TO LEVEL III- The Director shall
  immediately reclassify an enterprise within level II as within level III
  (and the enterprise shall be subject to the provisions of section 206), if--
  (1) the enterprise does not submit a capital restoration plan that is
  substantially in compliance with section 209 within the applicable period
  or the Director does not approve the capital restoration plan submitted
  by the enterprise; or
  (2) the Director determines that the enterprise has failed to make, in good
  faith, reasonable efforts necessary to comply with the capital restoration
  plan and fulfill the schedule for the plan approved by the Director.
  (d) EFFECTIVE DATE- This section shall take effect upon the expiration of the
  1-year period beginning on the date of the effectiveness of the regulations
  issued under section 201(f) establishing the risk-based capital test.
SEC. 206. SUPERVISORY ACTIONS APPLICABLE TO ENTERPRISES WITHIN LEVEL III.
  (a) MANDATORY SUPERVISORY ACTIONS-
  (1) CAPITAL RESTORATION PLAN- An enterprise within level III shall, within
  the time period provided in section 209(b) and in consultation with the
  Director, submit to the Director a capital restoration plan that complies
  with section 209 and, after approval, carry out the plan.
  (2) RESTRICTIONS ON DIVIDENDS-
  (A) PRIOR APPROVAL- An enterprise within level III may not make any payment
  of dividends that would result in the enterprise being reclassified as
  within level IV. An enterprise within level III may make any other payment
  of dividends only if the Director approves the payment before the payment.
  (B) STANDARD FOR APPROVAL- The Director may approve a payment of dividends
  by an enterprise within level III only if the Director determines that
  the payment (i) will enhance the ability of the enterprise to meet the
  risk-based capital level and the minimum capital level for the enterprise
  promptly, (ii) will contribute to the long-term safety and soundness of
  the enterprise, or (iii) is otherwise in the public interest.
  (3) APPROVAL OF ACTIVITIES- An enterprise within level III may undertake
  an activity subject to the approval of the Secretary under the Federal
  National Mortgage Association Charter Act or the Federal Home Loan Mortgage
  Corporation Act only with the additional approval of the Director.
  (4) RECLASSIFICATION FROM LEVEL III TO LEVEL IV- The Director shall
  immediately reclassify an enterprise within level III as within level IV
  (and the enterprise shall be subject to the provisions of section 207), if--
  (A) the enterprise does not submit a capital restoration plan that is
  substantially in compliance with section 209 within the applicable period
  or the Director does not approve the capital restoration plan submitted
  by the enterprise; or
  (B) the Director determines that the enterprise has failed to make, in good
  faith, reasonable efforts necessary to comply with the capital restoration
  plan and fulfill the schedule for the plan approved by the Director.
  (b) DISCRETIONARY SUPERVISORY ACTIONS- In addition to any other actions
  taken by the Director (including actions under subsection (a)), the Director
  may, at any time, take any of the following actions with respect to an
  enterprise within level III:
  (1) LIMITATION ON INCREASE IN OBLIGATIONS- Limit any increase in, or order
  the reduction of, any obligations of the enterprise, including off-balance
  sheet obligations.
  (2) LIMITATION ON GROWTH- Limit or prohibit the growth of the assets of
  the enterprise or require contraction of the assets of the enterprise.
  (3) PROHIBITION ON DIVIDENDS- Prohibit the enterprise from making any
  payment of dividends.
  (4) ACQUISITION OF NEW CAPITAL- Require the enterprise to acquire new
  capital in any form and in any amount sufficient to provide for the
  reclassification of the enterprise as within level II.
  (5) RESTRICTION OF ACTIVITIES- Require the enterprise to terminate, reduce,
  or modify any activity that the Director determines creates excessive risk
  to the enterprise.
  (6) CONSERVATORSHIP- Appoint a conservator for the enterprise pursuant to
  section 208.
  (c) EFFECTIVE DATE- This section shall take effect upon the expiration of
  the 18-month period beginning on the date of the enactment of this Act.
SEC. 207. MANDATORY APPOINTMENT OF CONSERVATOR FOR ENTERPRISES WITHIN LEVEL IV.
  (a) NOTICE- Upon determining that an enterprise is within level IV, the
  Director shall provide written notice to the Congress and to the enterprise--
  (1) that the enterprise is within level IV;
  (2) that a conservator shall be appointed for the enterprise pursuant to
  this section.
  (b) APPOINTMENT- If the Director determines that an enterprise is within
  level IV, the Director shall, not later than 30 days after providing
  notice under subsection (a), appoint a conservator for the enterprise. A
  conservator appointed pursuant to this section shall have the authority,
  in the discretion of the conservator, to take any actions under sections
  205 and 206 not inconsistent with the authority of the conservator and to
  take any other actions authorized under section 208.
  (c) APPROVAL OF ACTIVITIES- The conservator of any enterprise within level IV
  may undertake an activity subject to the approval of the Secretary under the
  Federal National Mortgage Association Charter Act or the Federal Home Loan
  Mortgage Corporation Act only with the additional approval of the Director.
  (d) EFFECTIVE DATE- This section shall take effect on January 1, 1992.
SEC. 208. CONSERVATORSHIP.
  (a) Appointment-
  (1) DISCRETIONARY AUTHORITY- The Director may, after providing notice under
  paragraph (2), appoint a conservator for an enterprise upon a determination--
  (A) that the enterprise is not likely to pay its obligations in the normal
  course of business;
  (B) that--
  (i) the enterprise has incurred or is likely to incur losses that will
  deplete all or substantially all of its core capital; and
  (ii) there is no reasonable likelihood that the enterprise will replenish
  its core capital without Federal assistance;
  (C) that the enterprise has concealed books, papers, records, or assets
  of the enterprise that are material to the discharge of the Director's
  responsibilities under this title, or has refused to submit such books,
  papers, records, or information regarding the affairs of the enterprise
  for inspection to the Director upon request; or
  (D) that the enterprise is classified within Level III.
  (2) NOTICE- Upon making a determination under paragraph (1) to appoint
  a conservator under this section for an enterprise, the Director shall
  provide written notice to the Congress and to the enterprise--
  (A) that a conservator will be appointed for the enterprise under this
  section;
  (B) stating the reasons under paragraph (1) for the appointment of the
  conservator; and
  (C) identifying the person, company, or governmental agency that the
  Director intends to appoint as conservator.
  (b) JUDICIAL REVIEW-
  (1) IN GENERAL-
  (A) TIMING AND JURISDICTION- An enterprise for which a conservator is
  appointed (pursuant to this section or section 207) may bring an action in
  the United States District Court for the District of Columbia, for an order
  requiring the Director to terminate the appointment of the conservator. The
  court, upon the merits, shall dismiss such action or shall direct the
  Director to terminate the appointment of the conservator. Such an action
  may be commenced only before the expiration of the 20-day period beginning
  upon the appointment of the conservator.
  (B) STANDARD- A decision of the Director to appoint a conservator may be
  set aside under this paragraph only if the court finds that the decision
  was arbitrary, capricious, an abuse of discretion, or otherwise not in
  accordance with applicable laws.
  (2) STAY-
  (A) IN GENERAL- A conservator appointed pursuant to this section or
  section 207 may request that any judicial action or proceeding to which
  the conservator or the enterprise is or may become a party be stayed for
  a period not exceeding 45 days and commencing upon the appointment of
  the conservator. Upon petition, the court shall grant such stay as to
  all parties.
  (B) FEDERAL AGENCY AS CONSERVATOR- In any case in which the conservator
  appointed for an enterprise is a Federal agency or an officer or employee
  of the Federal Government, the conservator may make a request for a stay
  under subparagraph (A) only with the prior consent of the Attorney General
  and subject to the direction and control of the Attorney General.
  (3) ACTIONS AND ORDERS-
  (A) LIMITATION ON JURISDICTION- Except as otherwise provided in this
  subsection, no court may take any action regarding the removal of a
  conservator or otherwise restrain or affect the exercise of powers or
  functions of a conservator.
  (B) ENFORCEMENT OF ORDERS- The Director, with the prior consent of the
  Attorney General and subject to the direction and control of the Attorney
  General, may apply to a court which shall have the jurisdiction to enforce
  an order of the Director relating to--
  (i) the conservatorship and the enterprise in conservatorship; or
  (ii) restraining or affecting the exercise of authority or functions of
  a conservator.
  (c) APPOINTMENT BY CONSENT- Notwithstanding subsection (a), the Director may
  appoint a conservator for an enterprise if the enterprise, by an affirmative
  vote of a majority of its board of directors or by an affirmative vote of
  a majority of its shareholders, consents to such appointment.
  (d) EXCLUSIVE APPOINTMENT AUTHORITY AND LIMITATION- The Director shall
  have exclusive authority to appoint a conservator for an enterprise. The
  Director may not appoint as a conservator for an enterprise the Office of
  Secondary Market Examination and Oversight, the Department of Housing and
  Urban Development, or any officer or employee of such Office or Department.
  (e) REPLACEMENT OF CONSERVATOR- The Director may, without notice or hearing,
  replace a conservator with another conservator. Such replacement shall not
  affect the right of the enterprise under subsection (b) to obtain judicial
  review of the decision of the Director to appoint a conservator.
  (f) EXAMINATIONS- The Director may examine and supervise any enterprise
  in conservatorship during the period in which the enterprise continues to
  operate as a going concern.
  (g) TERMINATION-
  (1) DISCRETIONARY- At any time the Director determines that termination
  of a conservatorship pursuant to an appointment under subsection (a)
  is in the public interest and may safely be accomplished, the Director
  may terminate the conservatorship and permit the enterprise to resume
  the transaction of its business subject to such terms, conditions, and
  limitations as the Director may prescribe.
  (2) MANDATORY- The Director shall terminate a conservatorship pursuant to
  this section or section 207 upon a determination by the Director that the
  enterprise equals or exceeds the minimum capital level for the enterprise
  established under section 202. The Director may not impose any terms,
  conditions, or limitations on the transaction of business of an enterprise
  whose conservatorship is terminated under this paragraph.
  (h) POWERS AND DUTIES-
  (1) GENERAL POWERS- A conservator shall have all the powers of the
  shareholders, directors, and officers of the enterprise under conservatorship
  and may operate the enterprise in the name of the enterprise, unless the
  Director provides otherwise.
  (2) LIMITATIONS BY DIRECTOR- A conservator shall be subject to any rules,
  regulations, and orders issued from time to time by the Director and, except
  as otherwise specifically provided in such rules, regulations, or orders or
  in subsection (i), shall have the same rights and privileges and be subject
  to the same duties, restrictions, penalties, conditions, and limitations
  applicable to directors, officers, or employees of the enterprise.
  (3) PAYMENT OF CREDITORS- The Director may require a conservator to set
  aside and make available for payment to creditors any amounts that the
  Director determines may safely be used for such purpose. All creditors
  who are similarly situated shall be treated in a similar manner.
  (4) COMPENSATION OF CONSERVATOR AND EMPLOYEES- A conservator and professional
  employees (other than Federal employees) appointed to represent or
  assist the conservator may be compensated for activities conducted as
  conservator. Compensation may not be provided in amounts greater than
  the compensation paid to employees of the Federal Government for similar
  services, except that the Director may provide for compensation at higher
  rates (but not in excess of rates prevailing in the private sector), if
  the Director determines that compensation at higher rates is necessary in
  order to recruit and retain competent personnel.
  (5) EXPENSES- All expenses of a conservatorship pursuant to this section
  (including compensation under paragraph (4)) shall be paid by the enterprise
  and shall be secured by a lien on the enterprise, which shall have priority
  over any other lien.
  (i) LIABILITY PROTECTIONS-
  (1) FEDERAL AGENCIES AND EMPLOYEES- In any case in which the conservator
  is a Federal agency or an officer or employee of the Federal Government,
  the provisions of chapters 161 and 171 of title 28, United States Code,
  shall apply with respect to the liability of the conservator for acts
  or omissions performed pursuant to and in the course of the duties and
  responsibilities of the conservatorship.
  (2) OTHER CONSERVATORS- In any case where the conservator is not a
  conservator described in paragraph (1), the conservator shall not be
  personally liable for damages in tort or otherwise for acts or omissions
  performed pursuant to and in the course of the duties and responsibilities
  of the conservatorship, unless such acts or omissions constitute gross
  negligence, including any similar conduct or any form of intentional
  tortious conduct.
  (3) INDEMNIFICATION- The Director, with the approval of the Attorney
  General, may indemnify the conservator on such terms as the Director
  considers appropriate.
SEC. 209. CAPITAL RESTORATION PLANS.
  (a) CONTENTS- Each capital restoration plan submitted under this title shall
  set forth a feasible plan for the enterprise to equal or exceed the minimum
  capital level for the enterprise and for restoring the level of regulatory
  capital of the enterprise subject to the plan to not less than the risk-based
  capital level for the enterprise. Each capital restoration plan shall--
  (1) specify the level of capital the enterprise will achieve and maintain;
  (2) describe the actions that the enterprise will take to equal or exceed
  the minimum capital level for the enterprise and to restore the regulatory
  capital of the enterprise to not less than the risk-based capital level
  for the enterprise;
  (3) establish a schedule for completing the capital restoration plan;
  (4) specify the types and levels of activities in which the enterprise
  will engage during the term of the capital restoration plan; and
  (5) describe the actions that the enterprise will take to comply with any
  mandatory and discretionary requirements imposed under this title.
  (b) DEADLINES FOR SUBMISSION- The Director shall, by regulation, establish
  a deadline for submission of a capital restoration plan, which may not be
  more than 45 days after the enterprise is notified in writing that a plan
  is required. The regulations shall provide that the Director may extend
  the deadline to the extent that the Director determines necessary. Any
  extension of the deadline shall be in writing and for a time certain.
  (c) APPROVAL- The Director shall review each capital restoration plan
  submitted under this section and, not later than 45 days after submission
  of the plan, approve or disapprove the plan. The Director may extend the
  period for approval or disapproval for any plan for a single additional
  45-day period if the Director determines necessary. The Director shall notify
  any enterprise submitting a plan in writing of the approval or disapproval
  of the plan (which shall include the reasons for any disapproval of the
  plan) and of any extension of the period for approval or disapproval. The
  Director shall provide by regulation for resubmission and review of any
  plans disapproved.
SEC. 210. JUDICIAL REVIEW OF DIRECTOR ACTION.
  (a) JURISDICTION-
  (1) FILING OF PETITION- An enterprise within level I, II, or III, that is
  the subject of a mandatory or discretionary supervisory action taken under
  this title by the Director (other than action under section 207 or 208)
  may obtain review of the action by filing, within 10 days after receiving
  written notice of the Director's action, a written petition requesting
  that the action of the Director be modified, terminated, or set aside.
  (2) PLACE FOR FILING- A petition filed pursuant to this subsection shall
  be filed in the United States Court of Appeals for the District of Columbia
  Circuit.
  (b) SCOPE OF REVIEW- An action taken by the Director under this title
  (other than under section 207 or 208) may be modified, terminated, or set
  aside only if the court finds, on the record on which the Director acted,
  that the action of the Director was arbitrary, capricious, an abuse of
  discretion, or otherwise not in accordance with applicable laws.
  (c) UNAVAILABILITY OF STAY- The commencement of proceedings for judicial
  review pursuant to this section shall not operate as a stay of any action
  taken by the Director. Except with respect to any enterprise within level
  I or II that has not been reclassified to level III under section 204(b)
  or 205(c), no court shall have jurisdiction to stay, enjoin, or otherwise
  delay any action taken by the Director under this title pending judicial
  review of the action.
  (d) LIMITATION ON JURISDICTION- Except as provided in this section, no
  court shall have jurisdiction to affect, by injunction or otherwise, the
  issuance or effectiveness of any action of the Director under this title
  (other than action under section 207 or 208) or to review, modify, suspend,
  terminate, or set aside such action.
SEC. 211. EXAMINATIONS.
  (a) TIMING-
  (1) ANNUAL EXAMINATION- The Director shall annually conduct an examination
  under this section of each enterprise to determine the condition of the
  enterprise for the purpose of ensuring its financial safety and soundness.
  (2) OTHER EXAMINATIONS- Whenever the Director determines that an examination
  is necessary to determine the condition of an enterprise for the purpose
  of ensuring its financial safety and soundness the Director may conduct
  an examination under this section.
  (b) EXAMINERS- The Director shall appoint examiners to conduct examinations
  of the enterprises under this section. The Director may, in the discretion of
  the Director, request assistance from the Board of Governors of the Federal
  Reserve System for examinations and utilize the services of examiners
  employed by the Federal Reserve Board to conduct such examinations. The
  Director shall reimburse the Board of Governors of the Federal Reserve
  System for any costs of services provided under this subsection by the
  Federal Reserve Board, from amounts available under this Act.
  (c) TECHNICAL EXPERTS- The Director may obtain the services of any
  technical experts the Director considers necessary and appropriate to
  provide temporary technical assistance relating to examinations to the
  Director and officers and employees of the Office of Secondary Market
  Examination and Oversight. The Director shall describe, in the public
  record of each examination, the nature and extent of any such temporary
  technical assistance.
  (d) OATHS, EVIDENCE, SUBPOENA POWERS- In connection with examinations
  under this section, the Director may--
  (1) administer oaths and affirmations;
  (2) take and preserve testimony under oath; and
  (3) issue subpoenas requiring the attendance and testimony of witnesses
  and the production of evidence.
The attendance of witnesses and the production of evidence may be required
from any place within any State at any designated place where a hearing
relating to an examination is conducted.
  (e) SECOND EXAMINATION BY GAO- Upon a determination by the Director
  that an examination of an enterprise is necessary under this subsection,
  the Comptroller General shall conduct an examination of the enterprise
  solely to provide an independent determination regarding the safety
  and soundness of the enterprise. The examination shall be conducted at
  a time and in a manner that results in minimal disruption to the normal
  business activities of the enterprise. The Comptroller General may obtain
  the services of technical experts in the same manner as the Director may
  obtain such services under subsection (c), except that any entity that
  assists the Director in examining an enterprise may not concurrently assist
  the Comptroller General to examine the enterprise under this subsection.
TITLE III--CEASE-AND-DESIST ORDERS AND CIVIL MONEY PENALTIES AGAINST FNMA
AND FHLMC
SEC. 301. CEASE-AND-DESIST PROCEEDINGS.
  (a) GROUNDS FOR ISSUANCE- The Director may issue and serve upon an
  enterprise or any executive officer of an enterprise a notice of charges
  under this section if, in the determination of the Director, the enterprise
  or executive officer--
  (1) is engaging or has engaged, or the Director has reasonable cause to
  believe that the enterprise or executive officer is about to engage, in
  any activity that could result in a rapid depletion of the core capital
  of the enterprise; or
  (2) is violating or has violated, or the Director has reasonable cause to
  believe that the enterprise or executive officer is about to violate--
  (A) any law, rule, or regulation; or
  (B) any written agreement entered into by the enterprise with the Director.
  (b) PROCEDURE-
  (1) NOTICE OF CHARGES- Each notice of charges shall contain a statement of
  the facts constituting the alleged violation or violations or the activity
  that could result in a rapid depletion of the core capital of the enterprise,
  and shall fix a time and place at which a hearing will be held to determine
  whether an order to cease and desist from such violation or activity should
  issue against the enterprise or executive officer.
  (2) DATE OF HEARING- A hearing pursuant to a notice under paragraph (1)
  shall be fixed for a date not earlier than 30 days nor later than 60 days
  after service of the notice unless an earlier or a later date is set by
  the Director at the request of the enterprise or executive officer served.
  (3) FAILURE TO APPEAR- Unless the enterprise or executive officer served
  appears at the hearing through a duly authorized representative, the
  enterprise or executive officer shall be deemed to have consented to the
  issuance of the cease-and-desist order.
  (4) ISSUANCE OF ORDER- In the event of such consent, or if, upon the
  record made at any such hearing, the Director finds that any violation
  or activity specified in the notice of charges has been established, the
  Director may issue and serve upon the enterprise or executive officer an
  order requiring the enterprise or executive officer to cease and desist
  from any such violation or activity and to take affirmative action to
  correct the conditions resulting from any such violation or activity.
  (c) AFFIRMATIVE ACTION TO CORRECT CONDITIONS RESULTING FROM VIOLATIONS OR
  ACTIVITIES- The authority under this section and section 302 to issue any
  order which requires an enterprise or executive officer to take affirmative
  action to correct or remedy any conditions resulting from any violation or
  activity with respect to which such order is issued includes the authority
  to require such enterprise or executive officer--
  (1) to make restitution or provide reimbursement, indemnification, or
  guarantee against loss if the violation or activity involves a reckless
  disregard for the law or any applicable regulations or prior order of the
  Director or the enterprise or executive officer was unjustly enriched in
  connection with such violation or practice;
  (2) to restrict the growth of the enterprise;
  (3) to dispose of any asset involved;
  (4) to rescind agreements or contracts;
  (5) to employ qualified officers or employees (who may be subject to
  approval by the Director at the direction of the Director); and
  (6) to take such other action as the Director determines appropriate.
  (d) AUTHORITY TO LIMIT ACTIVITIES- The authority to issue an order under
  this section or section 302 includes the authority to place limitations on
  the activities or functions of the enterprise or any director or executive
  officer of the enterprise.
  (e) EFFECTIVE DATE- A cease-and-desist order under this section shall
  become effective upon the expiration of the 30-day period beginning on the
  service of the order upon the enterprise or executive officer concerned
  (except in the case of a cease-and-desist order issued upon consent, which
  shall become effective at the time specified therein), and shall remain
  effective and enforceable as provided in the order, except to the extent
  that the order is stayed, modified, terminated, or set aside by action of
  the Director or otherwise as provided in this title.
SEC. 302. TEMPORARY CEASE-AND-DESIST ORDERS.
  (a) GROUNDS FOR ISSUANCE AND SCOPE- Whenever the Director determines that
  any violation, threatened violation, or activity that could result in a
  rapid depletion of the capital of the enterprise, specified in the notice
  of charges served upon the enterprise or executive officer pursuant to
  section 301(a), or the continuation thereof, is likely--
  (1) to cause insolvency of the enterprise, or
  (2) to weaken the condition of the enterprise prior to the completion of
  the proceedings conducted pursuant to section 301(b),
the Director may issue a temporary order requiring the enterprise or executive
officer to cease-and-desist from any such violation or practice and to take
affirmative action to prevent or remedy such insolvency or condition pending
completion of such proceedings. Such order may include any requirement
authorized under section 301(c).
  (b) EFFECTIVE DATE- An order issued pursuant to subsection (a) shall
  become effective upon service upon the enterprise or executive officer
  and, unless set aside, limited, or suspended by a court in proceedings
  pursuant to subsection (d), shall remain in effect and enforceable pending
  the completion of the proceedings pursuant to such notice and shall remain
  effective until the Director dismisses the charges specified in the notice or
  until superseded by a cease-and-desist order issued pursuant to section 301.
  (c) INCOMPLETE OR INACCURATE RECORDS-
  (1) TEMPORARY ORDER- If a notice of charges served under section 301(a)
  specifies that the books and records of the enterprise served are so
  incomplete or inaccurate that the Director is unable, through the normal
  supervisory process, to determine the financial condition of the enterprise
  or the details or the purpose of any transaction or transactions that
  may have a material effect on the financial condition of that enterprise,
  the Director may issue a temporary order requiring--
  (A) the cessation of any activity or practice which gave rise, whether in
  whole or in part, to the incomplete or inaccurate state of the books or
  records; or
  (B) affirmative action to restore the books or records to a complete and
  accurate state, until the completion of the proceedings under section 301.
  (2) EFFECTIVE PERIOD- Any temporary order issued under paragraph (1)--
  (A) shall become effective upon service; and
  (B) unless set aside, limited, or suspended by a court in proceedings
  pursuant to subsection (d), shall remain in effect and enforceable until
  the earlier of--
  (i) the completion of the proceeding initiated under section 301 in
  connection with the notice of charges; or
  (ii) the date the Director determines, by examination or otherwise, that the
  books and records of the enterprise are accurate and reflect the financial
  condition of the enterprise.
  (d) JUDICIAL REVIEW- Within 10 days after an enterprise or executive officer
  has been served with a temporary cease-and-desist order pursuant to this
  section, the enterprise or executive officer may apply to the United States
  District Court for the District of Columbia for an injunction setting aside,
  limiting, or suspending the enforcement, operation, or effectiveness of the
  order pending the completion of the administrative proceedings pursuant to
  the notice of charges served upon the enterprise or executive officer under
  section 301(a). Such court shall have jurisdiction to issue such injunction.
  (e) ENFORCEMENT BY ATTORNEY GENERAL- In the case of violation or threatened
  violation of, or failure to obey, a temporary order issued pursuant
  to this section, the Director may request the Attorney General of the
  United States to bring an action in the United States District Court for
  the District of Columbia for an injunction to enforce such order. If the
  court finds any such violation, threatened violation, or failure to obey,
  the court shall issue such injunction.
SEC. 303. HEARINGS.
  (a) VENUE AND PROCEDURE- Any hearing under section 301, 302, or 306--
  (1) shall be held in the Federal judicial district or in the territory in
  which the home office of the enterprise is located unless the enterprise
  consents to another place; and
  (2) shall be conducted in accordance with the provisions of chapter 5 of
  title 5, United States Code.
  (b) Issuance of Order-
  (1) IN GENERAL- After any such hearing, and within 90 days after the
  Director has notified the parties that the case has been submitted to the
  Director for final decision, the Director shall render the decision (which
  shall include findings of fact upon which the decision is predicated)
  and shall issue and serve upon each party to the proceeding an order or
  orders consistent with the provisions of this title.
  (2) MODIFICATION- Except as provided in section 302(d), judicial review
  of any such order shall be exclusively as provided in section 304. Unless
  such a petition for review is timely filed as provided in section 304,
  and thereafter until the record in the proceeding has been filed as so
  provided, the Director may at any time, modify, terminate, or set aside any
  such order, upon such notice and in such manner as the Director considers
  proper. Upon such filing of the record, the Director may modify, terminate,
  or set aside any such order with permission of the court.
SEC. 304. JUDICIAL REVIEW.
  (a) COMMENCEMENT- Any party to a proceeding under section 301 or 306 may
  obtain review of any final order issued under such section by filing in the
  United States Court of Appeals for the District of Columbia Circuit, within
  30 days after the date of service of such order, a written petition praying
  that the order of the Director be modified, terminated, or set aside. The
  clerk of the court shall transmit a copy of the petition to the Director.
  (b) FILING OF RECORD- Upon receiving a copy of a petition, the Director
  shall file in the court the record in the proceeding, as provided in
  section 2112 of title 28, United States Code.
  (c) JURISDICTION- Upon the filing of a petition, such court shall have
  jurisdiction, which upon the filing of the record by the Director shall
  (except as provided in the last sentence of section 303(b)(2)) be exclusive,
  to affirm, modify, terminate, or set aside, in whole or in part, the order
  of the Director.
  (d) REVIEW- Review of such proceedings shall be governed by chapter 7 of
  title 5, United States Code.
  (e) ORDER TO PAY PENALTY- Notwithstanding any other provision of law,
  such court shall have the authority in any such review to order payment
  of any penalty imposed by the Director under this title.
  (f) NO AUTOMATIC STAY- The commencement of proceedings for judicial review
  under this section shall not, unless specifically ordered by the court,
  operate as a stay of any order issued by the Director.
SEC. 305. ENFORCEMENT AND JURISDICTION.
  (a) ENFORCEMENT- The Director may request the Attorney General of the
  United States to bring an action in the United States District Court for
  the District of Columbia for the enforcement of any effective notice or
  order issued under this title, and the court shall have jurisdiction and
  power to order and require compliance herewith.
  (b) LIMITATION ON JURISDICTION- Except as otherwise provided in this title,
  no court shall have jurisdiction to affect, by injunction or otherwise, the
  issuance or enforcement of any notice or order under section 301 or 302, or
  to review, modify, suspend, terminate, or set aside any such notice or order.
SEC. 306. CIVIL MONEY PENALTIES.
  (a) FAILURE TO SUBMIT REPORTS- The Director may impose a civil money
  penalty, in accordance with the provisions of this section, on any
  enterprise that fails to make any report required under section 309(k) of
  the Federal National Mortgage Association Charter Act or section 307(c)
  of the Federal Home Loan Mortgage Corporation Act within the period of
  time established by the Director for submission of the report (except in
  the case of a report submitted minimally late). The amount of the penalty,
  as determined by the Director, may not exceed $5,000 per day for each day
  during which such failure continues.
  (b) UNINTENTIONAL VIOLATIONS- The Director may impose a civil money penalty,
  in accordance with the provisions of this section, on any enterprise that,
  without knowledge--
  (1) violates any law, rule, or regulation;
  (2) violates any final order or temporary order issued pursuant to section
  301 or 302; or
  (3) violates any written agreement between an enterprise and the Director.
The amount of the penalty, as determined by the Director, may not exceed
$5,000 for each day during which such violation continues.
  (c) INTENTIONAL VIOLATIONS- The Director may impose a civil money penalty,
  in accordance with the provisions of this section, on any enterprise that--
  (1) submits to the Director any false or misleading report or information
  with actual knowledge of inaccuracy, deliberate ignorance of inaccuracy,
  or reckless disregard for accuracy; or
  (2) knowingly commits any violation described in subsection (b).
The amount of the penalty, as determined by the Director, may not exceed,
for each day during which such violation, practice, or breach continues,
the lesser of (A) $1,000,000, or (B) one percent of the total assets of
the enterprise.
  (d) PROCEDURES-
  (1) ESTABLISHMENT- The Director shall establish standards and procedures
  governing the imposition of civil money penalties under subsections (a),
  (b), and (c). The standards and procedures--
  (A) shall provide for the Director to make the determination to impose
  the penalty;
  (B) shall provide for the imposition of a penalty only after the enterprise
  has been given notice of, and opportunity for, a hearing on the record; and
  (C) may provide for review by the Director of any determination or order,
  or interlocutory ruling, arising from a hearing.
  (2) FINAL ORDERS- If an enterprise does not request a hearing within 20
  days after receipt of a notice of opportunity for hearing, the imposition
  of a penalty shall constitute a final and unappealable determination. If the
  Director reviews the determination or order, the Director may affirm, modify,
  or reverse the determination or order, and shall state with reasonable
  specificity the basis upon which any such affirmation, modification, or
  reversal is made. If the Director does not review the determination or
  order within 90 days after the issuance of the determination or order,
  the determination or order shall be final.
  (3) FACTORS IN DETERMINING AMOUNT OF PENALTY- In determining the amount
  of a penalty under subsection (a), (b), or (c), the Director shall give
  consideration to such factors as the gravity of the violation, any history
  of prior violations (including violations occurring before the date under
  subsection (i)), the effect of the penalty on the safety and soundness
  of the enterprise, any injury to the public, any benefits received, and
  deterrence of future violations, and any other factors the Director may
  determine by regulation.
  (4) REVIEW OF IMPOSITION OF PENALTY- The determination or order of the
  Director imposing a penalty under subsection (a), (b), or (c) shall not
  be subject to review, except as provided in section 304.
  (e) ACTION TO COLLECT PENALTY- If an enterprise fails to comply with a
  determination or order of the Director imposing a civil money penalty under
  subsection (a), (b), or (c), after the determination or order is no longer
  subject to review as provided under subsection (d)(1) and section 304, the
  Director may request the Attorney General of the United States to bring an
  action in the United States District Court for the District of Columbia to
  obtain a monetary judgment against the enterprise and such other relief
  as may be available. The monetary judgment may, in the discretion of the
  court, include any attorneys fees and other expenses incurred by the United
  States in connection with the action. In an action under this subsection,
  the validity and appropriateness of the determination or order of the
  Director imposing the penalty shall not be subject to review.
  (f) SETTLEMENT BY DIRECTOR- The Director may compromise, modify, or remit any
  civil money penalty which may be, or has been, imposed under this section.
  (g) AVAILABILITY OF OTHER REMEDIES- Any civil money penalty under this
  section shall be in addition to any other available civil remedy and may be
  imposed whether or not the Director imposes other administrative sanctions.
  (h) DEPOSIT OF PENALTIES- The Secretary shall deposit any civil money
  penalties collected under this section into the general fund of the Treasury.
  (i) APPLICABILITY- This section shall apply only to violations under
  subsections (a), (b), and (c) occurring on or after January 1, 1992.
SEC. 307. NOTICE OF SERVICE.
  Any service required or authorized to be made by the Director under this
  title may be made by registered mail, or in such other manner reasonably
  calculated to give actual notice as the Director may by regulation or
  otherwise provide.
SEC. 308. SUBPOENA AUTHORITY.
  (a) IN GENERAL- In the course of or in connection with any administrative
  proceeding under this title, the Director shall have the authority--
  (A) to administer oaths and affirmations;
  (B) to take or cause to be taken depositions;
  (C) to issue subpoenas and subpoenas duces tecum; and
  (D) to revoke, quash, or modify subpoenas and subpoenas duces tecum issued
  by the Director.
  (b) WITNESSES AND DOCUMENTS- The attendance of witnesses and the production
  of documents provided for in this section may be required from any place in
  any State at any designated place where such proceeding is being conducted.
  (c) ENFORCEMENT- The Director may request the Attorney General of the
  United States to bring an action in the United States district court for
  the judicial district in which such proceeding is being conducted, or where
  the witness resides or conducts business, or the United States District
  Court for the District of Columbia, for enforcement of any subpoena or
  subpoena duces tecum issued pursuant to this section. Such courts shall
  have jurisdiction and power to order and require compliance therewith.
  (d) FEES AND EXPENSES- Witnesses subpoenaed under this section shall be
  paid the same fees and mileage that are paid witnesses in the district
  courts of the United States. Any court having jurisdiction of any proceeding
  instituted under this section by an enterprise may allow to any such party
  such reasonable expenses and attorneys fees as the court deems just and
  proper. Such expenses and fees shall be paid by the enterprise or from
  its assets.
TITLE IV--REGULATION OF FEDERAL HOME LOAN BANK SYSTEM
SEC. 401. PRIMACY OF FINANCIAL SAFETY AND SOUNDNESS FOR FEDERAL HOUSING
FINANCE BOARD.
  Section 2A(a)(3) of the Federal Home Loan Bank Act (12 U.S.C. 1422a(a)(3))
  is amended to read as follows:
  `(3) DUTIES-
  `(A) SAFETY AND SOUNDNESS- The primary duty of the Board shall be to
  ensure that the Federal Home Loan Banks operate in a financially safe and
  sound manner.
  `(B) OTHER DUTIES- To the extent consistent with subparagraph (A), the
  duties of the Board shall also be--
  `(i) to supervise the Federal Home Loan Banks;
  `(ii) to ensure that the Federal Home Loan Banks carry out their housing
  finance mission; and
  `(iii) to ensure that the Federal Home Loan Banks remain adequately
  capitalized and able to raise funds in the capital markets.'.
SEC. 402. ADVANCES TO NONQUALIFIED THRIFT LENDER MEMBERS.
  Section 10(e)(2) of the Federal Home Loan Bank Act (12 U.S.C. 1430(e)(2))
  is amended by striking the second sentence and inserting the following new
  sentence: `The aggregate amount of the advances by the Federal Home Loan
  Bank System to members that are not qualified thrift lenders shall not exceed
  30 percent of the total advances of the Federal Home Loan Bank System.'.
SEC. 403. STUDY REGARDING FEDERAL HOME LOAN BANK SYSTEM.
  (a) IN GENERAL- The Federal Housing Finance Board, the Comptroller General
  of the United States, the Director of the Congressional Budget Office,
  and the Secretary of Housing and Urban Development shall each conduct a
  study regarding the following topics:
  (1) The appropriate capital standards for the Federal Home Loan Bank System.
  (2) The relationship between the capital standards for the Federal Home
  Loan Bank System and the capital standards under this Act for the Federal
  National Mortgage Association and the Federal Home Loan Mortgage Corporation.
  (3) The relationship between the capital standards for savings associations
  and the capital standards under this Act for the Federal National Mortgage
  Association and the Federal Home Loan Mortgage Corporation, including
  determining why such enterprises are not subject to the same capital
  requirements as savings associations for similar kinds of on-balance sheet
  and off-balance sheet assets and obligations.
  (4) The desirability of expanding credit products and services for member
  institutions of the Federal Home Loan Bank System, including a determination
  of the feasibility of Federal Home Loan Banks (A) purchasing housing-related
  assets from member institutions and (B) providing credit enhancements and
  other products to members in addition to advances.
  (5) The feasibility of expanding eligible collateral for advances by
  removing the limits on the amount of housing-related assets that member
  institutions can use to collateralize advances.
  (6) Recommendations for further measures to expand the role of the Federal
  Home Loan Bank System as a support mechanism for community-based lenders
  and to reinforce the overall role of the System in housing finance.
  (7) Recommendations for further measures to increase membership in, and
  increase the profitability of, the System by modifying--
  (A) restrictions on membership and stock purchases of nonqualified thrift
  lenders;
  (B) the overall advance limit imposed on the Federal Home Loan Bank System
  to nonqualified thrift lenders; and
  (C) the membership requirement for qualified thrift lenders.
  (8) The competitive effect of the mortgage activities of the Federal National
  Mortgage Association and the Federal Home Loan Mortgage Corporation on the
  home mortgage activities of federally insured depository institutions and
  the cost of such activities to such institutions, the Savings Association
  Insurance Fund, and the Resolution Trust Corporation.
  (b) REPORTS- Not later than 6 months after the date of the enactment of
  this Act, the Federal Housing Finance Board, the Comptroller General, the
  Director of the Congressional Budget Office, and the Secretary of Housing
  and Urban Development shall each submit to the Congress a report on the
  studies required under subsection (a) containing any recommendations for
  legislative action based on the results of the studies.
  (c) COMMENTS- The Secretary of the Treasury, the Director of the Office of
  Secondary Market Examination and Oversight, the Federal Home Loan Mortgage
  Corporation, and the Federal National Mortgage Association shall submit to
  the Congress any recommendations and opinions regarding the studies under
  subsection (a), to the extent that the recommendations and views of such
  officers differ from the recommendations and opinions of the the Federal
  Housing Finance Board, Comptroller General, the Director of Congressional
  Budget Office, and the Secretary of Housing and Urban Development.
  (d) DEFINITION- For purposes of this section the term `housing-related
  assets' means residential mortgages, residential mortgage-related securities,
  loans or loan participations secured by residential real estate, housing
  production loans, and warehouse lines of credit for residential mortgage
  banking activities.
TITLE V--PRIVATIZATION STUDY
SEC. 501. STUDY OF IMPACT OF PRIVATIZATION OF FNMA AND FHLMC.
  (a) IN GENERAL- The Comptroller General of the United States, in consultation
  with the Secretary of Housing and Urban Development, shall conduct and
  submit to the Congress, not later than the expiration of the 1-year period
  beginning on the date of the enactment of this Act, a study regarding the
  effect of repealing the Federal charters of the Federal National Mortgage
  Association and the Federal Home Loan Mortgage Corporation and allowing
  the enterprises to continue to operate as fully private entities.
  (b) REQUIREMENTS- In evaluating the effect of such action, the study shall
  particularly examine the impact on--
  (1) the availability and supply of housing;
  (2) the availability of financing for residential mortgages and the interest
  rates for such mortgages in the primary and secondary markets;
  (3) the size, liquidity, and stability of the market for mortgage-backed
  securities; and
  (4) the overall banking and financial system.
The study shall also examine the direct and indirect monetary benefits that
accrue to the Federal National Mortgage Association and the Federal Home
Loan Mortgage Corporation from their quasi-governmental status.
  (c) INFORMATION- The Federal National Mortgage Association and the Federal
  Home Loan Mortgage Corporation shall provide full and prompt access to the
  Comptroller General and the Secretary of Housing and Urban Development to
  any books, records, and other information requested for the purposes of
  conducting the study under this section.
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