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109th Congress                                            Rept. 109-171
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 1

======================================================================
 
               FEDERAL HOUSING FINANCE REFORM ACT OF 2005

                                _______
                                

                 July 14, 2005.--Ordered to be printed

                                _______
                                

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

                              R E P O R T

                             together with

                    ADDITIONAL AND DISSENTING VIEWS

                        [To accompany H.R. 1461]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Financial Services, to whom was referred the 
bill (H.R. 1461) to reform the regulation of certain housing-
related Government-sponsored enterprises, and for other 
purposes, having considered the same, report favorably thereon 
with an amendment and recommend that the bill as amended do 
pass.

                                CONTENTS

                                                                   Page
Amendment........................................................     2
Purpose and Summary..............................................    81
Background and Need for Legislation..............................    85
Hearings.........................................................    88
Committee Consideration..........................................    89
Committee Votes..................................................    89
Committee Oversight Findings.....................................    94
Performance Goals and Objectives.................................    94
New Budget Authority, Entitlement Authority, and Tax Expenditures    94
Committee Cost Estimate..........................................    94
Congressional Budget Office Estimate.............................    95
Federal Mandates Statement.......................................   103
Advisory Committee Statement.....................................   103
Constitutional Authority Statement...............................   103
Applicability to Legislative Branch..............................   103
Exchange of Committee Correspondence.............................   103
Section-by-Section Analysis of the Legislation...................   104
Changes in Existing Law Made by the Bill, as Reported............   121
Additional and Dissenting Views..................................   299

                               Amendment

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

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Federal Housing 
Finance Reform Act of 2005''.
  (b) Table of Contents.--The table of contents for this Act is as 
follows:

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

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

            Subtitle A--Improvement of safety and soundness

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

             Subtitle B--Improvement of mission supervision

Sec. 121. Transfer of program and activities approval and housing goal 
oversight.
Sec. 122. Review by Director of new programs and activities of 
enterprises.
Sec. 123. Conforming loan limits.
Sec. 124. Annual housing report regarding regulated entities.
Sec. 125. Revision of housing goals.
Sec. 126. Duty to serve underserved markets.
Sec. 127. Monitoring and enforcing compliance with housing goals.
Sec. 128. Affordable housing fund.
Sec. 129. Consistency with mission.
Sec. 130. Enforcement.
Sec. 131. Conforming amendments.

                  Subtitle C--Prompt corrective action

Sec. 141. Capital classifications.
Sec. 142. Supervisory actions applicable to undercapitalized regulated 
entities.
Sec. 143. Supervisory actions applicable to significantly 
undercapitalized regulated entities.
Sec. 144. Authority over critically undercapitalized regulated 
entities.
Sec. 145. Conforming amendments.

                    Subtitle D--Enforcement actions

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

                     Subtitle E--General provisions

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

                   TITLE II--FEDERAL HOME LOAN BANKS

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

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

       Subtitle A--Office of Federal Housing Enterprise Oversight

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

               Subtitle B--Federal Housing Finance Board

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

        Subtitle C--Department of Housing and Urban Development

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

SEC. 2. DEFINITIONS.

  Section 1303 of the Housing and Community Development Act of 1992 (12 
U.S.C. 4502) is amended--
          (1) in paragraph (7), by striking ``an enterprise'' and 
        inserting ``a regulated entity'';
          (2) by striking ``the enterprise'' each place such term 
        appears (except in paragraphs (4) and (18)) and inserting ``the 
        regulated entity'';
          (3) in paragraph (5), by striking ``Office of Federal Housing 
        Enterprise Oversight of the Department of Housing and Urban 
        Development'' and inserting ``Federal Housing Finance Agency'';
          (4) in each of paragraphs (8), (9), (10), and (19), by 
        striking ``Secretary'' each place that term appears and 
        inserting ``Director'';
          (5) in paragraph (13), by inserting ``, with respect to an 
        enterprise,'' after ``means'';
          (6) by redesignating paragraphs (16) through (19) as 
        paragraphs (20) through (23), respectively;
          (7) by striking paragraphs (14) and (15) and inserting the 
        following new paragraphs:
          ``(18) Regulated entity.--The term `regulated entity' means--
                  ``(A) the Federal National Mortgage Association and 
                any affiliate thereof;
                  ``(B) the Federal Home Loan Mortgage Corporation and 
                any affiliate thereof; and
                  ``(C) each Federal home loan bank.
          ``(19) Regulated entity-affiliated party.--The term 
        `regulated entity-affiliated party' means--
                  ``(A) any director, officer, employee, or controlling 
                stockholder of, or agent for, a regulated entity;
                  ``(B) any shareholder, affiliate, consultant, or 
                joint venture partner of a regulated entity, and any 
                other person, as determined by the Director (by 
                regulation or on a case-by-case basis) that 
                participates in the conduct of the affairs of a 
                regulated entity; and
                  ``(C) any independent contractor for a regulated 
                entity (including any attorney, appraiser, or 
                accountant); and
                  ``(D) any not-for-profit corporation that receives 
                its principal funding, on an ongoing basis, from any 
                regulated entity.'';
          (8) by redesignating paragraphs (8) through (13) as 
        paragraphs (12) through (17), respectively; and
          (9) by inserting after paragraph (7) the following new 
        paragraph:
          ``(11) Federal home loan bank.--The term `Federal home loan 
        bank' means a bank established under the authority of the 
        Federal Home Loan Bank Act.'';
          (10) by redesignating paragraphs (2) through (7) as 
        paragraphs (5) through (10), respectively; and
          (11) by inserting after paragraph (1) the following new 
        paragraphs:
          ``(2) Agency.--The term `Agency' means the Federal Housing 
        Finance Agency.
          ``(3) Authorizing statutes.--The term `authorizing statutes' 
        means--
                  ``(A) the Federal National Mortgage Association 
                Charter Act;
                  ``(B) the Federal Home Loan Mortgage Corporation Act; 
                and
                  ``(C) the Federal Home Loan Bank Act.
          ``(4) Board.--The term `Board' means the Housing Finance 
        Oversight Board established under section 1313B.''.

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

            Subtitle A--Improvement of Safety and Soundness

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

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

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

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

``SEC. 1312. DIRECTOR.

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

SEC. 102. DUTIES AND AUTHORITIES OF DIRECTOR.

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

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

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

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

  ``(a) Standards.--The Director shall establish standards, by 
regulation, guideline, or order, for each regulated entity relating 
to--
          ``(1) adequacy of internal controls and information systems 
        taking into account the nature and scale of business 
        operations;
          ``(2) independence and adequacy of internal audit systems;
          ``(3) management of credit and counterparty risk, including 
        systems to identify concentrations of credit risk and 
        prudential limits to restrict exposure of the regulated entity 
        to a single counterparty or groups of related counterparties;
          ``(4) management of interest rate risk exposure;
          ``(5) management of market risk, including standards that 
        provide for systems that accurately measure, monitor, and 
        control market risks and, as warranted, that establish 
        limitations on market risk;
          ``(6) adequacy and maintenance of liquidity and reserves;
          ``(7) management of any asset and investment portfolio;
          ``(8) investments and acquisitions by a regulated entity, to 
        ensure that they are consistent with the purposes of this Act 
        and the authorizing statutes;
          ``(9) maintenance of adequate records, in accordance with 
        consistent accounting policies and practices that enable the 
        Director to evaluate the financial condition of the regulated 
        entity;
          ``(10) issuance of subordinated debt by that particular 
        regulated entity, as the Director considers necessary;
          ``(11) overall risk management processes, including adequacy 
        of oversight by senior management and the board of directors 
        and of processes and policies to identify, measure, monitor, 
        and control material risks, including reputational risks, and 
        for adequate, well-tested business resumption plans for all 
        major systems with remote site facilities to protect against 
        disruptive events; and
          ``(12) such other operational and management standards as the 
        Director determines to be appropriate.
  ``(b) Failure to Meet Standards.--
          ``(1) Plan requirement.--
                  ``(A) In general.--If the Director determines that a 
                regulated entity fails to meet any standard established 
                under subsection (a)--
                          ``(i) if such standard is established by 
                        regulation, the Director shall require the 
                        regulated entity to submit an acceptable plan 
                        to the Director within the time allowed under 
                        subparagraph (C); and
                          ``(ii) if such standard is established by 
                        guideline, the Director may require the 
                        regulated entity to submit a plan described in 
                        clause (i).
                  ``(B) Contents.--Any plan required under subparagraph 
                (A) shall specify the actions that the regulated entity 
                will take to correct the deficiency. If the regulated 
                entity is undercapitalized, the plan may be a part of 
                the capital restoration plan for the regulated entity 
                under section 1369C.
                  ``(C) Deadlines for submission and review.--The 
                Director shall by regulation establish deadlines that--
                          ``(i) provide the regulated entities with 
                        reasonable time to submit plans required under 
                        subparagraph (A), and generally require a 
                        regulated entity to submit a plan not later 
                        than 30 days after the Director determines that 
                        the entity fails to meet any standard 
                        established under subsection (a); and
                          ``(ii) require the Director to act on plans 
                        expeditiously, and generally not later than 30 
                        days after the plan is submitted.
          ``(2) Required order upon failure to submit or implement 
        plan.--If a regulated entity fails to submit an acceptable plan 
        within the time allowed under paragraph (1)(C), or fails in any 
        material respect to implement a plan accepted by the Director, 
        the following shall apply:
                  ``(A) Required correction of deficiency.--The 
                Director shall, by order, require the regulated entity 
                to correct the deficiency.
                  ``(B) Other authority.--The Director may, by order, 
                take one or more of the following actions until the 
                deficiency is corrected:
                          ``(i) Prohibit the regulated entity from 
                        permitting its average total assets (as such 
                        term is defined in section 1316(b)) during any 
                        calendar quarter to exceed its average total 
                        assets during the preceding calendar quarter, 
                        or restrict the rate at which the average total 
                        assets of the entity may increase from one 
                        calendar quarter to another.
                          ``(ii) Require the regulated entity--
                                  ``(I) in the case of an enterprise, 
                                to increase its ratio of core capital 
                                to assets.
                                  ``(II) in the case of a Federal home 
                                loan bank, to increase its ratio of 
                                total capital (as such term is defined 
                                in section 6(a)(5) of the Federal Home 
                                Loan Bank Act (12 U.S.C. 1426(a)(5)) to 
                                assets.
                          ``(iii) Require the regulated entity to take 
                        any other action that the Director determines 
                        will better carry out the purposes of this 
                        section than any of the actions described in 
                        this subparagraph
          ``(3) Mandatory restrictions.--In complying with paragraph 
        (2), the Director shall take one or more of the actions 
        described in clauses (i) through (iii) of paragraph (2)(B) if--
                  ``(A) the Director determines that the regulated 
                entity fails to meet any standard prescribed under 
                subsection (a);
                  ``(B) the regulated entity has not corrected the 
                deficiency; and
                  ``(C) during the 18-month period before the date on 
                which the regulated entity first failed to meet the 
                standard, the entity underwent extraordinary growth, as 
                defined by the Director.
  ``(c) Other Enforcement Authority not Affected.--The authority of the 
Director under this section is in addition to any other authority of 
the Director.''.
  (b) Independence in Congressional Testimony and Recommendations.--
Section 111 of Public Law 93-495 (12 U.S.C. 250) is amended by striking 
``the Federal Housing Finance Board'' and inserting ``the Director of 
the Federal Housing Finance Agency''.

SEC. 103. HOUSING FINANCE OVERSIGHT BOARD.

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

``SEC. 1313B. HOUSING FINANCE OVERSIGHT BOARD.

  ``(a) In General.--There is established the Housing Finance Oversight 
Board.
  ``(b) Duties.--
          ``(1) In general.--The Board shall advise the Director with 
        respect to overall strategies and policies in carrying out the 
        duties of the Director under this title, at the request of the 
        Director and at the initiative of the Board, and shall carry 
        out such functions as otherwise provided by law.
          ``(2) Limitation.--The Director may not delegate to the Board 
        any of the functions, powers, or duties of the Director.
  ``(c) Composition.--The Board shall be comprised of 5 members, as 
follows:
          ``(1) One member shall be the Director, who shall serve as 
        the Chairperson of the Board.
          ``(2) One member shall be the Secretary of the Treasury or 
        the designee of the Secretary.
          ``(3) One member shall be the Secretary of Housing and Urban 
        Development or the designee of the Secretary.
          ``(4) Two members shall be appointed by the President, by and 
        with the advice and consent of the Senate, who shall include--
                  ``(A) one individual who has extensive experience and 
                expertise in the capital markets (including debt 
                markets), the secondary mortgage market, and mortgage-
                backed securities; and
                  ``(B) one individual who has extensive experience and 
                expertise in mortgage finance (including single family 
                and multifamily housing mortgage finance), development 
                of affordable housing, and economic development and 
                revitalization.
  ``(d) Terms and Vacancies.--
          ``(1) Terms.--Each member of the Board pursuant to paragraph 
        (4) shall be appointed for a term of 3 years, and may be 
        removed by the President only for cause.
          ``(2) Vacancies.--A member of the Board appointed to fill a 
        vacancy occurring before the expiration of the term for which 
        the member's predecessor was appointed shall be appointed only 
        for the remainder of that term. A member of the Board may serve 
        after the expiration of the member's term until a successor has 
        been appointed.
  ``(e) Prohibition of Additional Compensation.--Notwithstanding any 
other provision of law, members of Board pursuant to paragraphs (1), 
(2), and (3) shall not receive additional compensation by reason of 
service on the Board.
  ``(f) Limitations.--Each member of the Board may not--
          ``(1) have any direct or indirect financial interest in any 
        regulated entity or regulated entity-affiliated party; or
          ``(2) hold any office, position, or employment in any 
        regulated entity or regulated entity-affiliated party.
  ``(g) Full-Time Members and Staff.--
          ``(1) Full-time members.--The members of the Board pursuant 
        to subsection (c)(4) shall serve on a full-time basis.
          ``(2) Staff.--The staff of the Board shall be appointed 
        subject to the provisions of title 5, United States Code, 
        governing appointments in the competitive service, and shall be 
        paid in accordance with the provisions of chapter 51 and 
        subchapter III of chapter 53 of that title relating to 
        classification and General Schedule pay rates, except that each 
        member of the Board pursuant to paragraph (4) may appoint one 
        staff member without regard to the such provisions governing 
        appointments in the competitive service and such staff members 
        may be paid by the Board without regard to the such provisions 
        relating to classification and General Schedule pay rates.
  ``(h) Meetings.--
          ``(1) In general.--The Board shall meet upon notice by the 
        Director, but in no event shall the Board meet less frequently 
        than once every 3 months.
          ``(2) Special meetings.--Any member of the Board may, upon 
        giving written notice to the Director, require a special 
        meeting of the Board, which shall be convened by the Director 
        within 30 days after such notice.
  ``(i) Testimony.--On an annual basis, the Board shall testify before 
Congress regarding--
          ``(1) the safety and soundness of the regulated entities;
          ``(2) any material deficiencies in the conduct of the 
        operations of the regulated entities;
          ``(3) the overall operational status of the regulated 
        entities;
          ``(4) an evaluation of the performance of the regulated 
        entities in carrying out their respective missions;
          ``(5) operations, resources, and performance of the Agency 
        and the Board; and
          ``(6) such other matters relating to the Agency, the Board, 
        and the regulated entities, and their fulfillment of their 
        missions, as the Board determines appropriate.
  ``(j) Costs.--Costs of the Board, including staff, shall be paid by 
the Agency as a cost and expense of the Agency.
  ``(k) Exemption.--Notwithstanding any other provision of law, the 
provisions of section 552b of title 5, United States Code, shall not 
apply to the Board.''.
  (b) Annual Report of the Director.--Section 1319B(a) of the Housing 
and Community Development Act of 1992 (12 U.S.C. 4521 (a)) is amended--
          (1) in paragraph (3), by striking ``and'' at the end; and
          (2) by striking paragraph (4) and inserting the following new 
        paragraphs:
          ``(4) an assessment of the Board with respect to--
                  ``(A) the safety and soundness of the regulated 
                entities;
                  ``(B) any material deficiencies in the conduct of the 
                operations of the regulated entities;
                  ``(C) the overall operational status of the regulated 
                entities;
                  ``(D) an evaluation of the performance of the 
                regulated entities in carrying out their missions, 
                including compliance of the enterprises with the 
                housing goals under subpart B of part 2 of this 
                subtitle and compliance of the Federal home loan banks 
                with the community investment and affordable housing 
                programs under subsections (i) and (j) of section 10 of 
                the Federal Home Loan Bank Act;
                  ``(E) an evaluation of the performance of the Agency 
                in fulfilling its duties and responsibilities under 
                law; and
                  ``(F) such other matters relating to the Board and 
                the fulfillment of its duties as the Board considers 
                appropriate;
          ``(5) operations, resources, and performance of the Agency; 
        and
          ``(6) such other matters relating to the Agency and its 
        fulfillment of its mission.''.

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

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

SEC. 105. DISCLOSURE OF CHARITABLE CONTRIBUTIONS BY ENTERPRISES.

  Section 1314 of the Housing and Community Development Act of 1992 (12 
U.S.C. 4514), as amended by the preceding provisions of this Act, is 
further amended by adding at the end the following new subsection:
          ``(d) Disclosure of Charitable Contributions by 
        Enterprises.--
          ``(1) Required disclosure.--The Director shall, by 
        regulation, require each enterprise to submit a report 
        annually, in a format designated by the Director, containing 
        the following information:
                  ``(A) Total value.--The total value of contributions 
                made by the enterprise to nonprofit organizations 
                during its previous fiscal year.
                  ``(B) Substantial contributions.--If the value of 
                contributions made by the enterprise to any nonprofit 
                organization during its previous fiscal year exceeds 
                the designated amount, the name of that organization 
                and the value of contributions.
                  ``(C) Substantial contributions to insider-affiliated 
                charities.--Identification of each contribution whose 
                value exceeds the designated amount that were made by 
                the enterprise during the enterprise's previous fiscal 
                year to any nonprofit organization of which a director, 
                officer, or controlling person of the enterprise, or a 
                spouse thereof, was a director or trustee, the name of 
                such nonprofit organization, and the value of the 
                contribution.
          ``(2) Definitions.--For purposes of this subsection--
                  ``(A) the term `designated amount' means such amount 
                as may be designated by the Director by regulation, 
                consistent with the public interest and the protection 
                of investors for purposes of this subsection; and
                  ``(B) the Director may, by such regulations as the 
                Director deems necessary or appropriate in the public 
                interest, define the terms officer and controlling 
                person.
          ``(3) Public availability.--The Director shall make the 
        information submitted pursuant to this subsection publicly 
        available.''.

SEC. 106. ASSESSMENTS.

  Section 1316 of the Housing and Community Development Act of 1992 (12 
U.S.C. 4516) is amended--
          (1) by striking subsection (a) and inserting the following 
        new subsection:
  ``(a) Annual Assessments.--The Director shall establish and collect 
from the regulated entities annual assessments in an amount not 
exceeding the amount sufficient to provide for reasonable costs and 
expenses of the Agency, including--
          ``(1) the expenses of any examinations under section 1317 of 
        this Act and under section 20 of the Federal Home Loan Bank 
        Act;
          ``(2) the expenses of obtaining any reviews and credit 
        assessments under section 1319; and
          ``(3) such amounts in excess of actual expenses for any given 
        year as deemed necessary by the Director to maintain a working 
        capital fund in accordance with subsection (e).'';
          (2) in subsection (b)--
                  (A) in the subsection heading, by striking 
                ``Enterprises'' and inserting ``Regulated Entities'' ;
                  (B) by realigning paragraph (2) two ems from the left 
                margin, so as to align the left margin of such 
                paragraph with the left margins of paragraph (1);
                  (C) in paragraph (1)--
                          (i) by striking ``Each enterprise'' and 
                        inserting ``Each regulated entity'';
                          (ii) by striking ``each enterprise'' and 
                        inserting ``each regulated entity''; and
                          (iii) by striking ``both enterprises'' and 
                        inserting ``all of the regulated entities''; 
                        and
                  (D) in paragraph (3)--
                          (i) in subparagraph (B), by striking 
                        ``subparagraph (A)'' and inserting ``clause 
                        (i)'';
                          (ii) by redesignating subparagraphs (A), (B), 
                        and (C) as clauses (i), (ii) and (ii), 
                        respectively, and realigning such clauses, as 
                        so redesignated, so as to be indented 6 ems 
                        from the left margin;
                          (iii) by striking the matter that precedes 
                        clause (i), as so redesignated, and inserting 
                        the following:
          ``(3) Definition of total assets.--For purposes of this 
        section, the term `total assets' means as follows:
                  ``(A) Enterprises.--With respect to an enterprise, 
                the sum of--''; and
                          (iv) by adding at the end the following new 
                        subparagraph:
                  ``(B) Federal home loan banks.--With respect to a 
                Federal home loan bank, the total assets of the Bank, 
                as determined by the Director in accordance with 
                generally accepted accounting principles.''.
          (3) by striking subsection (c) and inserting the following 
        new subsection:
  ``(c) Increased Costs of Regulation.--
          ``(1) Increase for inadequate capitalization.--The semiannual 
        payments made pursuant to subsection (b) by any regulated 
        entity that is not classified (for purposes of subtitle B) as 
        adequately capitalized may be increased, as necessary, in the 
        discretion of the Director to pay additional estimated costs of 
        regulation of the regulated entity.
          ``(2) Adjustment for enforcement activities.--The Director 
        may adjust the amounts of any semiannual assessments for an 
        assessment under subsection (a) that are to be paid pursuant to 
        subsection (b) by a regulated entity, as necessary in the 
        discretion of the Director, to ensure that the costs of 
        enforcement activities under subtitle B and C for a regulated 
        entity are borne only by such regulated entity.
          ``(3) Additional assessment for deficiencies.--If at any 
        time, as a result of increased costs of regulation of a 
        regulated entity that is not classified (for purposes of 
        subtitle B) as adequately captitalized or as the result of 
        supervisory or enforcement activities under subtitle B or C for 
        a regulated entity, the amount available from any semiannual 
        payment made by such regulated entity pursuant to subsection 
        (b) is insufficient to cover the costs of the Agency with 
        respect to such entity, the Director may make and collect from 
        such regulated entity an immediate assessment to cover the 
        amount of such deficiency for the semiannual period. If, at the 
        end of any semiannual period during which such an assessment is 
        made, any amount remains from such assessment, such remaining 
        amount shall be deducted from the assessment for such regulated 
        entity for the following semiannual period.''.
          (4) in subsection (d), by striking ``If'' and inserting 
        ``Except with respect to amounts collected pursuant to 
        subsection (a)(3), if''; and
          (5) by striking subsections (e) through (g) and inserting the 
        following new subsections:
  ``(e) Working Capital Fund.--At the end of each year for which an 
assessment under this section is made, the Director shall remit to each 
regulated entity any amount of assessment collected from such regulated 
entity that is attributable to subsection (a)(3) and is in excess of 
the amount the Director deems necessary to maintain a working capital 
fund.
  ``(f) Treatment of Assessments.--
          ``(1) Deposit.--Amounts received by the Director from 
        assessments under this section may be deposited by the Director 
        in the manner provided in section 5234 of the Revised Statutes 
        (12 U.S.C. 192) for monies deposited by the Comptroller of the 
        Currency.
          ``(2) Not government funds.--The amounts received by the 
        Director from any assessment under this section shall not be 
        construed to be Government or public funds or appropriated 
        money.
          ``(3) No apportionment of funds.--Notwithstanding any other 
        provision of law, the amounts received by the Director from any 
        assessment under this section shall not be subject to 
        apportionment for the purpose of chapter 15 of title 31, United 
        States Code, or under any other authority.
          ``(4) Use of funds.--The Director may use any amounts 
        received by the Director from assessments under this section 
        for compensation of the Director and other employees of the 
        Agency and for all other expenses of the Director and the 
        Agency.
          ``(5) Availability of oversight fund amounts.--
        Notwithstanding any other provision of law, any amounts 
        remaining in the Federal Housing Enterprises Oversight Fund 
        established under this section (as in effect before the 
        effective date under section 185 of the Federal Housing Finance 
        Reform Act of 2005), and any amounts remaining from assessments 
        on the Federal Home Loan banks pursuant to section 18(b) of the 
        Federal Home Loan Bank Act (12 U.S.C. 1438(b)), shall, upon 
        such effective date, be treated for purposes of this subsection 
        as amounts received from assessments under this section.
  ``(g) Budget and Financial Management.--
          ``(1) Financial operating plans and forecasts.--The Director 
        shall provide to the Director of the Office of Management and 
        Budget copies of the Director's financial operating plans and 
        forecasts as prepared by the Director in the ordinary course of 
        the Agency's operations, and copies of the quarterly reports of 
        the Agency's financial condition and results of operations as 
        prepared by the Director in the ordinary course of the Agency's 
        operations.
          ``(2) Financial statements.--The Agency shall prepare 
        annually a statement of assets and liabilities and surplus or 
        deficit; a statement of income and expenses; and a statement of 
        sources and application of funds.
          ``(3) Financial management systems.--The Agency shall 
        implement and maintain financial management systems that comply 
        substantially with Federal financial management systems 
        requirements, applicable Federal accounting standards, and that 
        uses a general ledger system that accounts for activity at the 
        transaction level.
          ``(4) Assertion of internal controls.--The Director shall 
        provide to the Comptroller General an assertion as to the 
        effectiveness of the internal controls that apply to financial 
        reporting by the Agency, using the standards established in 
        section 3512 (c) of title 31, United States Code.
          ``(5) Rule of construction.--This subsection may not be 
        construed as implying any obligation on the part of the 
        Director to consult with or obtain the consent or approval of 
        the Director of the Office of Management and Budget with 
        respect to any reports, plans, forecasts, or other information 
        referred to in paragraph (1) or any jurisdiction or oversight 
        over the affairs or operations of the Agency.
  ``(h) Audit of Agency.--
          ``(1) In general.--The Comptroller General shall annually 
        audit the financial transactions of the Agency in accordance 
        with the U.S. generally accepted government auditing standards 
        as may be prescribed by the Comptroller General of the United 
        States. The audit shall be conducted at the place or places 
        where accounts of the Agency are normally kept. The 
        representatives of the Government Accountability Office shall 
        have access to the personnel and to all books, accounts, 
        documents, papers, records (including electronic records), 
        reports, files, and all other papers, automated data, things, 
        or property belonging to or under the control of or used or 
        employed by the Agency pertaining to its financial transactions 
        and necessary to facilitate the audit, and such representatives 
        shall be afforded full facilities for verifying transactions 
        with the balances or securities held by depositaries, fiscal 
        agents, and custodians. All such books, accounts, documents, 
        records, reports, files, papers, and property of the Agency 
        shall remain in possession and custody of the Agency. The 
        Comptroller General may obtain and duplicate any such books, 
        accounts, documents, records, working papers, automated data 
        and files, or other information relevant to such audit without 
        cost to the Comptroller General and the Comptroller General's 
        right of access to such information shall be enforceable 
        pursuant to section 716(c) of title 31, United States Code.
          ``(2) Report.--The Comptroller General shall submit to the 
        Congress a report of each annual audit conducted under this 
        subsection. The report to the Congress shall set forth the 
        scope of the audit and shall include the statement of assets 
        and liabilities and surplus or deficit, the statement of income 
        and expenses, the statement of sources and application of 
        funds, and such comments and information as may be deemed 
        necessary to inform Congress of the financial operations and 
        condition of the Agency, together with such recommendations 
        with respect thereto as the Comptroller General may deem 
        advisable. A copy of each report shall be furnished to the 
        President and to the Agency at the time submitted to the 
        Congress.
          ``(3) Assistance and costs.--For the purpose of conducting an 
        audit under this subsection, the Comptroller General may, in 
        the discretion of the Comptroller General, employ by contract, 
        without regard to section 5 of title 41, United States Code, 
        professional services of firms and organizations of certified 
        public accountants for temporary periods or for special 
        purposes. Upon the request of the Comptroller General, the 
        Director of the Agency shall transfer to the Government 
        Accountability Office from funds available, the amount 
        requested by the Comptroller General to cover the full costs of 
        any audit and report conducted by the Comptroller General. The 
        Comptroller General shall credit funds transferred to the 
        account established for salaries and expenses of the Government 
        Accountability Office, and such amount shall be available upon 
        receipt and without fiscal year limitation to cover the full 
        costs of the audit and report.''.

SEC. 107. EXAMINERS AND ACCOUNTANTS.

  (a) Examinations.--Section 1317 of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4517) is amended----
          (1) in subsection (a), by adding after the period at the end 
        the following: ``Each examination under this subsection of a 
        regulated entity shall include a review of the procedures 
        required to be established and maintained by the regulated 
        entity pursuant to section 1314(c) (relating to fraudulent 
        financial transactions) and the report regarding each such 
        examination shall describe any problems with such procedures 
        maintained by the regulated entity.'';
          (2) in subsection (b)--
                  (A) by inserting ``of a regulated entity'' after 
                ``under this section''; and
                  (B) by striking ``to determine the condition of an 
                enterprise for the purpose of ensuring its financial 
                safety and soundness'' and inserting ``or appropriate'' 
                ; and
          (3) in subsection (c)--
                  (A) in the second sentence, by inserting ``to conduct 
                examinations under this section'' before the period; 
                and
                  (B) in the third sentence, by striking ``from amounts 
                available in the Federal Housing Enterprises Oversight 
                Fund''.
  (b) Enhanced Authority to Hire Examiners and Accountants.--Section 
1317 of the Housing and Community Development Act of 1992 (12 U.S.C. 
4517) is amended by adding at the end the following new subsection:
  ``(g) Appointment of Accountants, Economists, Specialists, and 
Examiners.--
          ``(1) Applicability.--This section applies with respect to 
        any position of examiner, accountant, specialist in financial 
        markets, specialist in technology, and economist at the Agency, 
        with respect to supervision and regulation of the regulated 
        entities, that is in the competitive service.
          ``(2) Appointment authority.--The Director may appoint 
        candidates to any position described in paragraph (1)--
                  ``(A) in accordance with the statutes, rules, and 
                regulations governing appointments in the excepted 
                service; and
                  ``(B) notwithstanding any statutes, rules, and 
                regulations governing appointments in the competitive 
                service.''.
  (c) Repeal.--Section 20 of the Federal Home Loan Bank Act (12 U.S.C. 
1440) is amended--
          (1) in the section heading, by striking ``reports'' and 
        inserting ``gao audits'';
          (2) in the third sentence, by striking ``the Board and'' each 
        place such term appears; and
          (3) by striking the first two sentences and inserting the 
        following: ``The Federal home loan banks shall be subject to 
        examinations by the Director to the extent provided in section 
        1317 of the Federal Housing Enterprises Financial Safety and 
        Soundness Act of 1992 (12 U.S.C. 4517).''.

SEC. 108. PROHIBITION AND WITHHOLDING OF EXECUTIVE COMPENSATION.

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

SEC. 109. REVIEWS OF REGULATED ENTITIES.

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

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

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

SEC. 110. REGULATIONS AND ORDERS.

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

SEC. 111. RISK-BASED CAPITAL REQUIREMENTS.

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

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

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

SEC. 112. MINIMUM AND CRITICAL CAPITAL LEVELS.

  (a) Minimum Capital Level.--Section 1362 of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4612) is amended--
          (1) in subsection (a), by striking ``In General'' and 
        inserting ``Enterprises'' ; and
          (2) by striking subsection (b) and inserting the following 
        new subsections:
  ``(b) Federal Home Loan Banks.--For purposes of this subtitle, the 
minimum capital level for each Federal home loan bank shall be the 
minimum capital required to be maintained to comply with the leverage 
requirement for the bank established under section 6(a)(2) of the 
Federal Home Loan Bank Act (12 U.S.C. 1426(a)(2)).
  ``(c) Establishment of Revised Minimum Capital Levels.--
Notwithstanding subsections (a) and (b) and notwithstanding the capital 
classifications of the regulated entities, the Director may, by 
regulations issued under section 1319G(b), establish a minimum capital 
level for the enterprises, for the Federal home loan banks, or for both 
the enterprises and the banks, that is higher than the level specified 
in subsection (a) for the enterprises or the level specified in 
subsection (b) for the Federal home loan banks, to the extent needed to 
ensure that the regulated entities operate in a safe and sound manner.
  ``(d) Authority to Require Temporary Increase.--Notwithstanding 
subsections (a) and (b) and any minimum capital level established 
pursuant to subsection (c), the Director may, by order, increase the 
minimum capital level for a regulated entity for such period as the 
Director may provide if the Director--
          ``(1) makes any of the determinations specified in 
        subparagraphs (A) through (C) of section 1364(c)(1); or
          ``(2) determines that the regulated entity has violated any 
        of the prudential management and operations standards 
        established pursuant to section 1313A and, as a result of such 
        violation, is operating in an unsafe and unsound manner.
  ``(e) Authority to Establish Additional Capital and Reserve 
Requirements for Particular Programs.--The Director may, at any time by 
order or regulation, establish such capital or reserve requirements 
with respect to any program or activity of a regulated entity as the 
Director considers appropriate to ensure that the regulated entity 
operates in a safe and sound manner, with sufficient capital and 
reserves to support the risks that arise in the operations and 
management of the regulated entity.
  ``(f) Periodic Review.--The Director shall periodically review the 
amount of core capital maintained by the enterprises, the amount of 
capital retained by the Federal home loan banks, and the minimum 
capital levels established for such regulated entities pursuant to this 
section. The Director may, by regulations issued under section 
1319G(b), adjust the minimum capital levels as necessary, based on the 
Director's review.''.
  (b) Critical Capital Levels.--
          (1) In general.--Section 1363 of the Housing and Community 
        Development Act of 1992 (12 U.S.C. 4613) is amended--
                  (A) by striking ``For'' and inserting ``(a) 
                Enterprises.--For''; and
                  (B) by adding at the end the following new 
                subsection:
  ``(b) Federal Home Loan Banks.--
          ``(1) In general.--For purposes of this subtitle, the 
        critical capital level for each Federal home loan bank shall be 
        such amount of capital as the Director shall, by regulation 
        require.
          ``(2) Consideration of other critical capital levels.--In 
        establishing the critical capital level under paragraph (1) for 
        the Federal home loan banks, the Director shall take due 
        consideration of the critical capital level established under 
        subsection (a) for the enterprises, with such modifications as 
        the Director determines to be appropriate to reflect the 
        difference in operations between the banks and the 
        enterprises.''.
          (2) Regulations.--Not later than the expiration of the 180-
        day period beginning on the effective date under section 185, 
        the Director of the Federal Housing Finance Agency shall issue 
        regulations pursuant to section 1363(b) of the Housing and 
        Community Development Act of 1992 (as added by paragraph (1) of 
        this subsection) establishing the critical capital level under 
        such section.

SEC. 113. REVIEW OF AND AUTHORITY OVER ENTERPRISE ASSETS AND 
                    LIABILITIES.

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

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

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

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

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

SEC. 114. CORPORATE GOVERNANCE OF ENTERPRISES.

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

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

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

SEC. 115. REQUIRED REGISTRATION UNDER SECURITIES EXCHANGE ACT OF 1934.

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

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

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

SEC. 116. FINANCIAL INSTITUTIONS EXAMINATION COUNCIL.

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

SEC. 117. GUARANTEE FEE STUDY.

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

SEC. 118. CONFORMING AMENDMENTS.

  (a) 1992 Act.--Part 1 of subtitle A of title XIII of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4511 et seq.), as amended 
by the preceding provisions of this Act, is further amended--
          (1) by striking ``an enterprise'' each place such term 
        appears in such part (except in sections 1313(a)(2)(A), 
        1313A(b)(2)(B)(ii)(I), and 1316(b)(3)) and inserting ``a 
        regulated entity'';
          (2) by striking ``the enterprise'' each place such term 
        appears in such part (except in section 1316(b)(3)) and 
        inserting ``the regulated entity'';
          (3) by striking ``the enterprises'' each place such term 
        appears in such part (except in sections 1312(c)(2), 
        1312(e)(2), and 1319B(a)(4)(D)) and inserting ``the regulated 
        entities'';
          (4) by striking ``each enterprise'' each place such term 
        appears in such part and inserting ``each regulated entity'';
          (5) by striking ``Office'' each place such term appears in 
        such part (except in sections 1312(b)(5), 1315(b), and 1316(g), 
        and section 1317(c)) and inserting ``Agency'';
          (6) in section 1315 (12 U.S.C. 4515)--
                  (A) in subsection (a)--
                          (i) in the subsection heading, by striking 
                        ``Office Personnel'' and inserting ``In 
                        General''; and
                          (ii) by striking ``The'' and inserting 
                        ``Subject to titles III and IV of the Federal 
                        Housing Finance Reform Act of 2005, the'';
                  (B) by striking subsections (d) and (f); and
                  (C) by redesignating subsection (e) as subsection 
                (d);
          (7) in section 1319A (12 U.S.C. 4520)--
                  (A) by striking ``(a) In General.--Each enterprise'' 
                and inserting ``Each regulated entity''; and
                  (B) by striking subsection (b);
          (8) in section 1319B (12 U.S.C. 4521), by striking 
        ``Committee on Banking, Finance and Urban Affairs'' each place 
        such term appears and inserting ``Committee on Financial 
        Services''; and
          (9) in section 1319F (12 U.S.C. 4525), striking all that 
        follows ``United States Code'' and inserting ``, the Agency 
        shall be considered an agency responsible for the regulation or 
        supervision of financial institutions.''.
  (b) Amendments to Fannie Mae Charter Act.--The Federal National 
Mortgage Association Charter Act (12 U.S.C. 1716 et seq.) is amended--
          (1) by striking ``Director of the Office of Federal Housing 
        Enterprise Oversight of the Department of Housing and Urban 
        Development'' each place such term appears, and inserting 
        ``Director of the Federal Housing Finance Agency'', in--
                  (A) section 303(c)(2) (12 U.S.C. 1718(c)(2));
                  (B) section 309(d)(3)(B) (12 U.S.C. 1723a(d)(3)(B)); 
                and
                  (C) section 309(k)(1); and
          (2) in section 309--
                  (A) in subsections (d)(3)(A) and (n)(1), by striking 
                ``Banking, Finance and Urban Affairs'' each place such 
                term appears and inserting ``Financial Services''; and
                  (B) in subsection (m)--
                          (i) in paragraph (1), by striking 
                        ``Secretary'' the second place such term 
                        appears and inserting ``Director''; and
                          (ii) in paragraph (2), by striking 
                        ``Secretary'' the second place such term 
                        appears and inserting ``Director''; and
                          (iii) by striking ``Secretary'' each other 
                        place such term appears and inserting 
                        ``Director of the Federal Housing Finance 
                        Agency''; and
                  (C) in subsection (n), by striking ``Secretary'' each 
                place such term appears and inserting ``Director of the 
                Federal Housing Finance Agency''; and
  (c) Amendments to Freddie Mac Act.--The Federal Home Loan Mortgage 
Corporation Act is amended--
          (1) by striking ``Director of the Office of Federal Housing 
        Enterprise Oversight of the Department of Housing and Urban 
        Development'' each place such term appears, and inserting 
        ``Director of the Federal Housing Finance Agency'', in--
                  (A) section 303(b)(2) (12 U.S.C. 1452(b)(2));
                  (B) section 303(h)(2) (12 U.S.C. 1452(h)(2)); and
                  (C) section 307(c)(1) (12 U.S.C. 1456(c)(1));
          (2) in sections 303(h)(1) and 307(f)(1) (12 U.S.C. 
        1452(h)(1), 1456(f)(1)), by striking ``Banking, Finance and 
        Urban Affairs'' each place such term appears and inserting 
        ``Financial Services'';
          (3) in section 306(i) (12 U.S.C. 1455(i))--
                  (A) by striking ``1316(c)'' and inserting ``306(c)''; 
                and
                  (B) by striking ``section 106'' and inserting 
                ``section 1316''; and
          (4) in section 307 (12 U.S.C. 1456))--
                  (A) in subsection (e)--
                          (i) in paragraph (1), by striking 
                        ``Secretary'' the second place such term 
                        appears and inserting ``Director''; and
                          (ii) in paragraph (2), by striking 
                        ``Secretary'' the second place such term 
                        appears and inserting ``Director''; and
                          (iii) by striking ``Secretary'' each other 
                        place such term appears and inserting 
                        ``Director of the Federal Housing Finance 
                        Agency''; and
                  (B) in subsection (f), by striking ``Secretary'' each 
                place such term appears and inserting ``Director of the 
                Federal Housing Finance Agency''.

             Subtitle B--Improvement of Mission Supervision

SEC. 121. TRANSFER OF PROGRAM AND ACTIVITIES APPROVAL AND HOUSING GOAL 
                    OVERSIGHT.

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

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

          (2) by striking sections 1321 and 1322.

SEC. 122. REVIEW BY DIRECTOR OF NEW PROGRAMS AND ACTIVITIES OF 
                    ENTERPRISES.

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

``SEC. 1321. REVIEW AND APPROVAL BY DIRECTOR OF NEW PROGRAMS AND 
                    BUSINESS ACTIVITIES OF ENTERPRISES.

  ``(a) Limitation on Authority to Undertake Programs and Activities.--
An enterprise may not undertake any new program, including a pilot 
program, or any new business activity except in accordance with the 
procedures set forth in this section and orders and regulations issued 
under this section.
  ``(b) New Programs.--
          ``(1) Prior approval requirement.--An enterprise may not 
        commence any new program before it has obtained the approval of 
        the Director, pursuant to this subsection, for the new program.
          ``(2) Application.--The Director shall, by order or 
        regulation, require that an enterprise shall, to obtain a 
        determination by the Director regarding approval of a new 
        program by the enterprise, submit to the Director a written 
        application for the new program in a format as prescribed by 
        the Director.
          ``(3) Notice.--Immediately upon receipt of a complete 
        application for a new program, the Director shall cause to be 
        published in the Federal Register notice of the receipt of such 
        application and of the period for public comment pursuant to 
        paragraph (4) regarding such new program, and a description of 
        the new program proposed by the application.
          ``(4) Public comment period.--During the 30-day period 
        beginning upon publication pursuant to paragraph (3) of a 
        notice regarding such an application, the Director shall 
        receive public comments regarding the new program.
          ``(5) Determination.--Not less than 15 days after the 
        conclusion of the public comment period pursuant to paragraph 
        (4) regarding an application but not more than 30 days after 
        the conclusion of such comment period, the Director shall 
        approve, conditionally approve, or reject such program, in 
        writing.
          ``(6) Standard for approval.--The Director may approve, or 
        conditionally approve, a new program of an enterprise only if 
        the Director determines, taking into consideration any relevant 
        information and comments received during the public comment 
        period, that such new program--
                  ``(A) does not contravene and is not inconsistent 
                with the purposes of this title, the Federal National 
                Mortgage Association Charter Act, or the Federal Home 
                Loan Mortgage Corporation Act, as such purposes are 
                determined taking into consideration the definitions of 
                the terms `mortgage loan origination' and `secondary 
                mortgage market' pursuant to section 1303;
                  ``(B) is not otherwise inconsistent with the safety 
                and soundness of the enterprise; and
                  ``(C) is in the public interest.
          ``(7) Limitation.--The Director, in implementing this 
        subsection, may not prevent an enterprise from continuing to 
        offer the automated loan underwriting system in existence on 
        the date of the enactment of the Federal Housing Finance Reform 
        Act of 2005 or continuing to engage in counseling and education 
        activities.
  ``(c) New Business Activities.--
          ``(1) Authority of director to prohibit new business 
        activities.--The Director shall have authority to prohibit any 
        new business activity by an enterprise if the Director 
        determines, in writing, that such activity--
                  ``(A) contravenes or is inconsistent with the 
                purposes of this title, the Federal National Mortgage 
                Association Charter Act, or the Federal Home Loan 
                Mortgage Corporation Act;
                  ``(B) is otherwise inconsistent with the safety and 
                soundness of the enterprise; or
                  ``(C) is not in the public interest.
          ``(2) Notification of new business activities.--An enterprise 
        that undertakes any new business activity shall provide written 
        notice of the activity to the Director and may commence the new 
        business activity only in accordance with paragraph (4).
          ``(3) Director determination of applicable procedure.--
                  ``(A) Timing.--Immediately upon receipt of any notice 
                under paragraph (2) regarding a new business activity, 
                the Director shall undertake a determination under 
                subparagraph (B) of this paragraph regarding the new 
                business activity.
                  ``(B) Determination and treatment as new program.--If 
                the Director determines that any new business activity 
                consists of, relates to, or involves any new program--
                          ``(i) the Director shall notify the 
                        enterprise of the determination;
                          ``(ii) the new business activity described in 
                        the notice shall be considered a new program 
                        for purposes of this section; and
                          ``(iii) the Director shall prohibit the 
                        enterprise from carrying out the activity 
                        except to the extent that approval for the 
                        activity is obtained pursuant to subsection 
                        (b).
          ``(4) Commencement.--An enterprise may commence a new 
        business activity--
                  ``(A) if the Director issues a written approval 
                regarding such new business activity, immediately upon 
                such issuance or at such other time as provided by the 
                Director in such letter; or
                  ``(B) if, during the 30-day period beginning upon 
                receipt by the Director of notice pursuant to paragraph 
                (2) regarding a new business activity, the Director has 
                not issued to the enterprise a written approval or 
                denial of the new business activity, upon the 
                expiration of such 30-day period.
  ``(d) Approval and Conditional Approval.--The Director may at any 
time conditionally approve the undertaking of a particular new program 
or new business activity by an enterprise and set forth the terms and 
conditions that apply to the program or activity with which the 
enterprise shall comply if it undertakes the new program or activity. 
Such approval may, in the discretion of the Director, be in the form of 
a written agreement between the enterprise and the Director and shall 
be subject to such terms and conditions therein. Such a written 
agreement or conditional approval shall be enforceable under subtitle 
C.
  ``(e) Determination and Treatment of Activity as New Business 
Activity.--If the Director determines that any activity of an 
enterprise consists of, relates to, or involves any new business 
activity--
          ``(1) the Director shall notify the enterprise of the 
        determination;
          ``(2) such activity shall be considered a new business 
        activity for purposes of this section; and
          ``(3) the Director shall prohibit the enterprise from 
        carrying out the activity except to the extent that approval 
        for the activity is obtained pursuant to subsection (c).
  ``(f) Effect on Other Authorities.--
          ``(1) Examinations.--Nothing in this section may be construed 
        to limit, in any manner, any other authority or right the 
        Director may have under other provisions of law to conduct an 
        examination of an enterprise.
          ``(2) Requests for information.--Nothing in this section may 
        be construed to limit the right of the Director at any time to 
        request additional information from an enterprise concerning 
        any business activity.
          ``(3) No implied right of action.--This section shall not 
        create any private right of action against an enterprise or any 
        director or executive officer of an enterprise, or impair any 
        private right of action under other applicable law.
          ``(4) No limitation.--Nothing in this section may be 
        construed to restrict the general supervisory and regulatory 
        authority of the Director over all programs, products, 
        activities, or business operations of any kind.
  ``(g) Report on Programs and Business Activities.--Not later than the 
expiration of the 180-day period beginning on the effective date under 
section 185 of the Federal Housing Finance Reform Act of 2005, each 
enterprise shall submit to the Director a report identifying and 
describing each program and business activity of the enterprise engaged 
in or existing as of the submission of the report.
  ``(h) Regulations.--The Director shall by order or regulation issue 
rules and procedures to implement this section, including in the 
discretion of the Director, such definitions, interpretations, forms, 
and other guidances as the Director considers appropriate.''.
  (b) Definitions.--Section 1303 of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4502), as amended by section 2 of 
this Act, is further amended--
          (1) by redesignating paragraphs (17) through (23) as 
        paragraphs (20) through (26), respectively;
          (2) by inserting after paragraph (16) the following new 
        paragraph:
          ``(19) New business activity.--The term `new business 
        activity' means, with respect to an enterprise, a business 
        activity that--
                  ``(A) is materially changed or materially different 
                from any of the business activities that the enterprise 
                was engaging in on the effective date under section 185 
                of the Federal Housing Finance Reform Act of 2005; and
                  ``(B) the enterprise has not previously obtained 
                authorization, pursuant to the provisions of section 
                1321(c), to offer, undertake, transact, conduct, or 
                engage in.'';
          (3) by redesignating paragraphs (15) and (16) as paragraphs 
        (17) and (18), respectively;
          (4) by inserting after paragraph (14) the following new 
        paragraph:
          ``(16) Mortgage markets.--The terms `mortgage loan 
        origination' and `secondary mortgage market' shall have such 
        meanings as the Director shall, by regulation, prescribe 
        consistent with the Federal National Mortgage Association 
        Charter Act and the Federal Home Loan Mortgage Corporation Act. 
        The Director shall issue such regulations not later than the 
        expiration of the 12-month period beginning on the effective 
        date under section 185 of the Federal Housing Finance Reform 
        Act of 2005, and the Director shall review such regulations on 
        a periodic basis.'';
          (5) by redesignating paragraphs (5) through (14) as 
        paragraphs (6) through (15), respectively; and
          (6) by inserting after paragraph (4) the following new 
        paragraph:
          ``(5) Business activity.--The term `business activity' means, 
        with respect to an enterprise, any offering, undertaking, 
        transacting, conducting, or engaging in any conduct, activity, 
        or product by the enterprise, as the Director shall provide.''.
  (c) Conforming Amendments.--
          (1) Fannie mae.--Section 302(b)(6) of the Federal National 
        Mortgage Association Charter Act (12 U.S.C. 1717(b)(6)) is 
        amended--
                  (A) by striking ``new program (as such term is'' and 
                inserting ``new program or new business activity (as 
                such terms are''; and
                  (B) by striking ``before obtaining the approval of 
                the Secretary under section 1322'' and inserting 
                ``except in accordance with section 1321''.
          (2) Freddie mac.--Section 305(c) of the Federal Home Loan 
        Mortgage Corporation Act (12 U.S.C. 1454(c)) is amended--
                  (A) by striking ``new program (as such term is'' and 
                inserting ``new program or new business activity (as 
                such terms are''; and
                  (B) by striking ``before obtaining the approval of 
                the Secretary under section 1322'' and inserting 
                ``except in accordance with section 1321''.

SEC. 123. CONFORMING LOAN LIMITS.

  (a) Fannie Mae.--
          (1) General limit.--Section 302(b)(2) of the Federal National 
        Mortgage Association Charter Act (12 U.S.C. 1717(b)(2)) is 
        amended by striking the 7th and 8th sentences and inserting the 
        following new sentences: ``Such limitations shall not exceed 
        $359,650 for a mortgage secured by a single-family residence, 
        $460,400 for a mortgage secured by a 2-family residence, 
        $556,500 for a mortgage secured by a 3-family residence, and 
        $691,600 for a mortgage secured by a 4-family residence, except 
        that such maximum limitations shall be adjusted effective 
        January 1 of each year beginning after the effective date under 
        section 185 of the Federal Housing Finance Reform Act of 2005, 
        subject to the limitations in this paragraph. Each adjustment 
        shall be made by adding to or subtracting from each such amount 
        (as it may have been previously adjusted) a percentage thereof 
        equal to the percentage increase or decrease, during the most 
        recent 12-month or fourth-quarter period ending before the time 
        of determining such annual adjustment, in the housing price 
        index maintained by the Director of the Federal Housing Finance 
        Agency (pursuant to section 1322 of the Housing and Community 
        Development Act of 1992 (12 U.S.C. 4541)).''.
          (2) High-cost area limit.--Section 302(b)(2) of the Federal 
        National Mortgage Association Charter Act is (12 U.S.C. 
        1717(b)(2)) is amended by adding after the period at the end 
        the following: ``Such foregoing limitations shall also be 
        increased with respect to properties of a particular size 
        located in any area for which the median price for such size 
        residence exceeds the foregoing limitation for such size 
        residence, to the lesser of 150 percent of such foregoing 
        limitation for such size residence or the amount that is equal 
        to the median price in such area for such size residence, 
        except that, subject to the order, if any, issued by the 
        Director of the Federal Housing Finance Agency pursuant to 
        section 123(d)(3) of the Federal Housing Finance Reform Act of 
        2005, such increase shall apply only with respect to mortgages 
        on which are based securities issued and sold by the 
        corporation.''
  (b) Freddie Mac.--
          (1) General limit.-- Section 305(a)(2) of the Federal Home 
        Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) is amended 
        by striking the 6th and 7th sentences and inserting the 
        following new sentences: ``Such limitations shall not exceed 
        $359,650 for a mortgage secured by a single-family residence, 
        $460,400 for a mortgage secured by a 2-family residence, 
        $556,500 for a mortgage secured by a 3-family residence, and 
        $691,600 for a mortgage secured by a 4-family residence, except 
        that such maximum limitations shall be adjusted effective 
        January 1 of each year beginning after the effective date under 
        section 185 of the Federal Housing Finance Reform Act of 2005, 
        subject to the limitations in this paragraph. Each adjustment 
        shall be made by adding to or subtracting from each such amount 
        (as it may have been previously adjusted) a percentage thereof 
        equal to the percentage increase or decrease, during the most 
        recent 12-month or fourth-quarter period ending before the time 
        of determining such annual adjustment, in the housing price 
        index maintained by the Director of the Federal Housing Finance 
        Agency (pursuant to section 1322 of the Housing and Community 
        Development Act of 1992 (12 U.S.C. 4541)).''.
          (2) High-cost area limit.--Section 305(a)(2) of the Federal 
        Home Loan Mortgage Corporation Act is amended by adding after 
        the period at the end the following: ``Such foregoing 
        limitations shall also be increased with respect to properties 
        of a particular size located in any area for which the median 
        price for such size residence exceeds the foregoing limitation 
        for such size residence, to the lesser of 150 percent of such 
        foregoing limitation for such size residence or the amount that 
        is equal to the median price in such area for such size 
        residence, except that, subject to the order, if any, issued by 
        the Director of the Federal Housing Finance Agency pursuant to 
        section 123(d)(3) of the Federal Housing Finance Reform Act of 
        2005, such increase shall apply only with respect to mortgages 
        on which are based securities issued and sold by the 
        Corporation.''
  (c) Housing Price Index.--Subpart A of part 2 of subtitle A of title 
XIII of the Housing and Community Development Act of 1992 (as amended 
by the preceding provisions of this Act) is amended by inserting after 
section 1321 (as added by section 122 of this Act) the following new 
section:

``SEC. 1322. HOUSING PRICE INDEX.

  ``(a) In General.--The Director shall establish and maintain a method 
of assessing the national average 1-family house price for use for 
adjusting the conforming loan limitations of the enterprises. In 
establishing such method, the Director shall take into consideration 
the monthly survey of all major lenders conducted by the Federal 
Housing Finance Agency to determine the national average 1-family house 
price, the House Price Index maintained by the Office of Federal 
Housing Enterprise Oversight of the Department of Housing and Urban 
Development before the effective date under section 185 of the Federal 
Housing Finance Reform Act of 2005, any appropriate house price indexes 
of the Bureau of the Census of the Department of Commerce, and any 
other indexes or measures that the Director considers appropriate.
  ``(b) GAO Audit.--
          ``(1) In general.--At such times as are required under 
        paragraph (2), the Comptroller General of the United States 
        shall conduct an audit of the methodology established by the 
        Director under subsection (a) to determine whether the 
        methodology established is an accurate and appropriate means of 
        measuring changes to the national average 1-family house price.
          ``(2) Timing.--An audit referred to in paragraph (1) shall be 
        conducted and completed not later than the expiration of the 
        180-day period that begins upon each of the following dates:
                  ``(A) Establishment.--The date upon which such 
                methodology is initially established under subsection 
                (a) in final form by the Director.
                  ``(B) Modification or amendment.--Each date upon 
                which any modification or amendment to such methodology 
                is adopted in final form by the Director.
          ``(3) Report.--Within 30 days of the completion of any audit 
        conducted under this subsection, the Comptroller General shall 
        submit a report detailing the results and conclusions of the 
        audit to the Director, the Committee on Financial Services of 
        the House of Representatives, and the Committee on Banking, 
        Housing, and Urban Affairs of the Senate.''.
  (d) Conditions on Conforming Loan Limit for High-Cost Areas.--
          (1) Study.--The Director of the Federal Housing Finance 
        Agency shall conduct a study under this subsection during the 
        six-month period beginning on the effective date under section 
        185 of this Act.
          (2) Issues.--The study under this subsection shall 
        determine--
                  (A) the effect that restricting the conforming loan 
                limits for high-cost areas only to mortgages on which 
                are based securities issued and sold by the Federal 
                National Mortgage Association and the Federal Home Loan 
                Mortgage Corporation (as provided in the last sentence 
                of section 302(b)(2) of the Federal National Mortgage 
                Association Charter Act and the last sentence of 
                section 305(a)(2) of the Federal Home Loan Mortgage 
                Corporation Act, pursuant to the amendments made by 
                subsections (a)(2) and (b)(2) of this section) would 
                have on the cost to borrowers for mortgages on housing 
                in such high-cost areas;
                  (B) the effects that such restrictions would have on 
                the availability of mortgages for housing in such high-
                cost areas; and
                  (C) the extent to which the Federal National Mortgage 
                Association and the Federal Home Loan Mortgage 
                Corporation will be able to issue and sell securities 
                based on mortgages for housing located in such high-
                cost areas.
          (3) Determination.--
                  (A) In general.--Not later than the expiration of the 
                six-month period specified in paragraph (1), the 
                Director of the Federal Housing Finance Agency shall 
                make a determination, based on the results of the study 
                under this subsection, of whether the restriction of 
                conforming loan limits for high-cost areas only to 
                mortgages on which are based securities issued and sold 
                by the Federal National Mortgage Association and the 
                Federal Home Loan Mortgage Corporation (as provided in 
                the amendments made by subsections (a)(2) and (b)(2) of 
                this section) will result in an increase in the cost to 
                borrowers for mortgages on housing in such high-cost 
                areas.
                  (B) Order.-- If such determination is that costs to 
                borrowers on housing in such high-cost areas will be 
                increased by such restrictions, the Director may issue 
                an order terminating such restrictions, in whole or in 
                part.
          (4) Publication.-- Not later than the expiration of the six-
        month period specified in paragraph (1), the Director of the 
        Federal Housing Finance Agency shall cause to be published in 
        the Federal Register--
                  (A) a report that--
                          (i) describes the study under this 
                        subsection; and
                          (ii) sets forth the conclusions of the study 
                        regarding the issues to be determined under 
                        paragraph (2); and
                  (B) notice of the determination of the Director under 
                paragraph (3); and
                  (C) the order of the Director under paragraph (3).
          (5) Definition.--For purposes of this subsection, the term 
        ``conforming loan limits for high-cost areas'' means the dollar 
        amount limitations applicable under the section 302(b)(2) of 
        the Federal National Mortgage Association Charter Act and 
        section 305(a)(2) of the Federal Home Loan Mortgage Corporation 
        Act (as amended by subsections (a) and (b) of this section) for 
        areas described in the last sentence of such sections (as so 
        amended).
  (e) Regular Adjustment of Conforming Loan Limits.--
          (1) Adjustment for year intervening before effective date.--
        Notwithstanding section 302(b)(2) of the Federal National 
        Mortgage Association Charter Act and section 305(a)(2) of the 
        Federal Home Loan Mortgage Corporation Act, as amended by this 
        section, the maximum dollar amount limitations in such sections 
        shall be adjusted on the effective date under section 185 of 
        this Act, and the limitations as so adjusted shall be 
        immediately effective, so that the limitations under such 
        sections applicable to the year in which such effective date 
        occurs are equal to the limitations in effect under such 
        sections immediately before such effective date.
          (2) Further adjustments.--After such effective date, the 
        dollar amount limitations as adjusted pursuant to paragraph (1) 
        shall be considered ``such amount (as it may have been 
        previously adjusted'' for purposes of section 302(b)(2) of the 
        Federal National Mortgage Association Charter Act and section 
        305(a)(2) of the Federal Home Loan Mortgage Corporation Act.

SEC. 124. ANNUAL HOUSING REPORT REGARDING REGULATED ENTITIES.

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

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

  ``(a) In General.--After reviewing and analyzing the reports 
submitted under section 309(n) of the Federal National Mortgage 
Association Charter Act, section 307(f) of the Federal Home Loan 
Mortgage Corporation Act, and section 10(j)(11) of the Federal Home 
Loan Bank Act (12 U.S.C. 1430(j)(11)), the Director shall submit a 
report, not later than October 30 of each year, to the Committee on 
Financial Services of the House of Representatives and the Committee on 
Banking, Housing, and Urban Affairs of the Senate, on the activities of 
each regulated entity.
  ``(b) Contents.--The report shall--
          ``(1) discuss the extent to which--
                  ``(A) each enterprise is achieving the annual housing 
                goals established under subpart B of this part;
                  ``(B) each enterprise is complying with section 1337;
                  ``(C) each Federal home loan bank is complying with 
                section 10(j) of the Federal Home Loan Bank Act; and
                  ``(D) each regulated entity is achieving the purposes 
                of the regulated entity established by law;
          ``(2) aggregate and analyze relevant data on income to assess 
        the compliance by each enterprise with the housing goals 
        established under subpart B;
          ``(3) aggregate and analyze data on income, race, and gender 
        by census tract and other relevant classifications, and compare 
        such data with larger demographic, housing, and economic 
        trends;
          ``(4) examine actions that--
                  ``(A) each enterprise has undertaken or could 
                undertake to promote and expand the annual goals 
                established under subpart B and the purposes of the 
                enterprise established by law; and
                  ``(B) each Federal home loan bank has taken or could 
                undertake to promote and expand the community 
                investment program and affordable housing program of 
                the bank established under section subsections (i) and 
                (j) of section 10 of the Federal Home Loan Bank Act;
          ``(5) examine the primary and secondary multifamily housing 
        mortgage markets and describe--
                  ``(A) the availability and liquidity of mortgage 
                credit;
                  ``(B) the status of efforts to provide standard 
                credit terms and underwriting guidelines for 
                multifamily housing and to securitize such mortgage 
                products; and
                  ``(C) any factors inhibiting such standardization and 
                securitization;
          ``(6) examine actions each regulated entity has undertaken 
        and could undertake to promote and expand opportunities for 
        first-time homebuyers;
          ``(7) describe any actions taken under section 1325(5) with 
        respect to originators found to violate fair lending 
        procedures;
          ``(8) discuss and analyze existing conditions and trends, 
        including conditions and trends relating to pricing, in the 
        housing markets and mortgage markets; and
          ``(9) identify the extent to which each enterprise is 
        involved in mortgage purchases and secondary market activities 
        involving subprime loans (as identified in accordance with the 
        regulations issued pursuant to section 124(b) of the Federal 
        Housing Finance Reform Act of 2005) and compare the 
        characteristics of subprime loans purchased and securitized by 
        the enterprises to other loans purchased and securitized by the 
        enterprises
  ``(c) Data Collection and Reporting.--
          ``(1) In general.--To assist the Director in analyzing the 
        matters described in subsection (b) and establishing the 
        methodology described in section 1322, the Director shall 
        conduct, on a monthly basis, a survey of mortgage markets in 
        accordance with this subsection.
          ``(2) Data points.--Each monthly survey conducted by the 
        Director under paragraph (1) shall collect data on--
                  ``(A) the characteristics of individual mortgages 
                that are eligible for purchase by the enterprises and 
                the characteristics of individual mortgages that are 
                not eligible for purchase by the enterprises including, 
                in both cases, information concerning--
                          ``(i) the price of the house that secures the 
                        mortgage;
                          ``(ii) the loan-to-value ratio of the 
                        mortgage, which shall reflect any secondary 
                        liens on the relevant property;
                          ``(iii) the terms of the mortgage;
                          ``(iv) the creditworthiness of the borrower 
                        or borrowers; and
                          ``(v) whether the mortgage, in the case of a 
                        conforming mortgage, was purchased by an 
                        enterprise; and
                  ``(B) such other matters as the Director determines 
                to be appropriate.
          ``(3) Public availability.--The Director shall make any data 
        collected by the Director in connection with the conduct of a 
        monthly survey available to the public in a timely manner, 
        provided that the Director may modify the data released to the 
        public to ensure that the data is not released in an 
        identifiable form.
          ``(4) Definition.--For purposes of this subsection, the term 
        `identifiable form' means any representation of information 
        that permits the identity of a borrower to which the 
        information relates to be reasonably inferred by either direct 
        or indirect means.''.
  (b) Standards for Subprime Loans.--The Director shall, not later than 
one year after the effective date under section 185, by regulations 
issued under section 1316G of the Housing and Community Development Act 
of 1992, establish standards by which mortgages purchased and mortgages 
purchased and securitized shall be characterized as subprime for the 
purpose of, and only for the purpose of, complying with the reporting 
requirement under section 1324(b)(9) of such Act.

SEC. 125. REVISION OF HOUSING GOALS.

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

``SEC. 1331. ESTABLISHMENT OF HOUSING GOALS.

  ``(a) In General.--The Director shall establish, effective for the 
first year that begins after the effective date under section 185 of 
the Federal Housing Finance Reform Act of 2005 and each year 
thereafter, annual housing goals, with respect to the mortgage 
purchases by the enterprises, as follows:
          ``(1) Single family housing goals.--Three single-family 
        housing goals under section 1332.
          ``(2) Multifamily special affordable housing goals.--A 
        multifamily special affordable housing goal under section 1333.
  ``(b) Eliminating Interest Rate Disparities.--
          ``(1) In general.--In establishing and implementing the 
        housing goals under this subpart, the Director shall require 
        the enterprises to disclose appropriate information to allow 
        the Director to assess if there are any disparities in interest 
        rates charged on mortgages to borrowers who are minorities as 
        compared with borrowers of similar creditworthiness who are not 
        minorities, as evidenced in reports pursuant to the Home 
        Mortgage Disclosure Act of 1975.
          ``(2) Report and remedy.--Upon a finding by the Director, 
        pursuant to the information provided by an enterprise in 
        paragraph (1), that a pattern of disparities in interest rates 
        exists, the Director shall--
                  ``(A) submit to the Committee on Financial Services 
                of the House of Representatives and the Committee on 
                Banking, Housing, and Urban Affairs of the Senate a 
                report detailing the disparities; and
                  ``(B) require the enterprise to take such action as 
                the Director deems appropriate pursuant to this Act to 
                remedy the interest rate disparities identified.
          ``(3) Protection of identity.--In carrying out this 
        subsection, the Director shall ensure that no information is 
        made public that would reasonably allow identification, 
        directly or indirectly, of an individual borrower.
  ``(c) Timing.--The Director shall establish an annual deadline by 
which the Director shall establish the annual housing goals under this 
subpart for each year, taking into consideration the need for the 
enterprises to reasonably and sufficiently plan their operations and 
activities in advance, including operations and activities necessary to 
meet such annual goals.

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

  ``(a) In General.--The Director shall establish an annual goal for 
the purchase by each enterprise of conventional, conforming, single-
family, owner-occupied, purchase money mortgages financing housing for 
each of the following categories of families:
          ``(1) Low-income families.
          ``(2) Families that reside in low-income areas.
          ``(3) Very low-income families.
  ``(b) Determination of Compliance.--The Director shall determine, for 
each year that the housing goal under this section is in effect 
pursuant to section 1331(a), whether each enterprise has complied with 
the single-family housing goal established under this section for such 
year. An enterprise shall be considered to be in compliance with such a 
goal for a year only if--
          ``(1) for each of the types of families described in 
        subsection (a), the percentage of the number of conventional, 
        conforming, single-family, owner-occupied, purchase money 
        mortgages purchased by each enterprise in such year that serve 
        such families, meets or exceeds
          ``(2) the target for the year for such type of family that is 
        established under subsection (c).
  ``(c) Annual Targets.--
          ``(1) In general.--Except as provided in paragraph (2), for 
        each of the types of families described in subsection (a), the 
        target under this subsection for a year shall be the average 
        percentage, for the three years that most recently precede such 
        year and for which information under the Home Mortgage 
        Disclosure Act of 1975 is publicly available, of the number of 
        conventional, conforming, single-family, owner-occupied, 
        purchase money mortgages originated in such year that serves 
        such type of family, as determined by the Director using the 
        information obtained and determined pursuant to paragraphs (3) 
        and (4).
          ``(2) Authority to increase targets.--
                  ``(A) In general.--The Director may, for any year, 
                establish by regulation, for any or all of the types of 
                families described in subsection (a), percentage 
                targets that are higher than the percentages for such 
                year determined pursuant to paragraph (1), to reflect 
                expected changes in market performance related to such 
                information under the Home Mortgage Disclosure Act of 
                1975.
                  ``(B) Factors.--In establishing any targets pursuant 
                to subparagraph (A), the Director shall consider the 
                following factors:
                          ``(i) National housing needs.
                          ``(ii) Economic, housing, and demographic 
                        conditions.
                          ``(iii) The performance and effort of the 
                        enterprises toward achieving the housing goals 
                        under this section in previous years.
                          ``(iv) The size of the conventional mortgage 
                        market serving each of the types of families 
                        described in subsection (a) relative to the 
                        size of the overall conventional mortgage 
                        market.
                          ``(v) The need to maintain the sound 
                        financial condition of the enterprises.
          ``(3) HMDA information.--The Director shall annually obtain 
        information submitted in compliance with the Home Mortgage 
        Disclosure Act of 1975 regarding conventional, conforming, 
        single-family, owner-occupied, purchase money mortgages 
        originated and purchased for the previous year.
          ``(4) Conforming mortgages.--In determining whether a 
        mortgage is a conforming mortgage for purposes of this 
        paragraph, the Director shall consider the original principal 
        balance of the mortgage loan to be the principal balance as 
        reported in the information referred to in paragraph (3), as 
        rounded to the nearest thousand dollars.
  ``(d) Notice of Determination and Enterprise Comment.--
          ``(1) Notice.--Within 30 days of making a determination under 
        subsection (b) regarding a compliance of an enterprise for a 
        year with the housing goal established under this section and 
        before any public disclosure thereof, the Director shall 
        provide notice of the determination to the enterprise, which 
        shall include an analysis and comparison, by the Director, of 
        the performance of the enterprise for the year and the targets 
        for the year under subsection (c).
          ``(2) Comment period.--The Director shall provide each 
        enterprise an opportunity to comment on the determination 
        during the 30-day period beginning upon receipt by the 
        enterprise of the notice.
  ``(e) Use of Borrower Income.--In monitoring the performance of each 
enterprise pursuant to the housing goals under this section and 
evaluating such performance (for purposes of section 1336), the 
Director shall consider a mortgagor's income to be such income at the 
time of origination of the mortgage.

``SEC. 1333. MULTIFAMILY SPECIAL AFFORDABLE GOAL.

  ``(a) Establishment.--
          ``(1) In general.--The Director shall establish, by 
        regulation, an annual goal for the purchase by each enterprise 
        of each of the following types of mortgages on multifamily 
        housing:
                  ``(A) Mortgages that finance dwelling units for very 
                low-income families.
                  ``(B) Mortgages that finance dwelling units assisted 
                by the low-income housing tax credit under section 42 
                of the Internal Revenue Code of 1986.
          ``(2) Additional requirements for smaller projects.--The 
        Director shall establish, within the goal under this section, 
        additional requirements for the purchase by each enterprise of 
        mortgages described in paragraph (1) for multifamily housing 
        projects of a smaller or limited size, which may be based on 
        the number of dwelling units in the project or the amount of 
        the mortgage, or both, and shall include multifamily housing 
        projects of such smaller sizes as are typical among such 
        projects that serve rural areas.
          ``(3) Factors.--In establishing the goal under this section 
        relating to mortgages on multifamily housing for an enterprise, 
        the Director shall consider--
                  ``(A) national multifamily mortgage credit needs;
                  ``(B) the performance and effort of the enterprise in 
                making mortgage credit available for multifamily 
                housing in previous years;
                  ``(C) the size of the multifamily mortgage market;
                  ``(D) the ability of the enterprise to lead the 
                industry in making mortgage credit available, 
                especially for underserved markets, such as for small 
                multifamily projects of 5 to 50 units, multifamily 
                properties in need of rehabilitation, and multifamily 
                properties located in rural areas; and
                  ``(E) the need to maintain the sound financial 
                condition of the enterprise.
  ``(b) Units Financed by Housing Finance Agency Bonds.--The Director 
shall give full credit toward the achievement of the multifamily 
special affordable housing goal under this section (for purposes of 
section 1336) to dwelling units in multifamily housing that otherwise 
qualifies under such goal and that is financed by tax-exempt or taxable 
bonds issued by a State or local housing finance agency, but only if--
          ``(1) such bonds are secured by a guarantee of the 
        enterprise; or
          ``(2) are not investment grade and are purchased by the 
        enterprise.
  ``(c) Use of Tenant Income or Rent.--The Director shall monitor the 
performance of each enterprise in meeting the goals established under 
this section and shall evaluate such performance (for purposes of 
section 1336) based on--
          ``(1) the income of the prospective or actual tenants of the 
        property, where such data are available; or
          ``(2) where the data referred to in paragraph (1) are not 
        available, rent levels affordable to low-income and very low-
        income families.
A rent level shall be considered to be affordable for purposes of this 
subsection for an income category referred to in this subsection if it 
does not exceed 30 percent of the maximum income level of such income 
category, with appropriate adjustments for unit size as measured by the 
number of bedrooms.
  ``(d) Determination of Compliance.--The Director shall, for each year 
that the housing goal under this section is in effect pursuant to 
section 1331(a), determine whether each enterprise has complied with 
such goal and the additional requirements under subsection (a)(2).

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

  ``(a) Authority.--An enterprise may petition the Director in writing 
at any time during a year to reduce the level of any goal for such year 
established pursuant to this subpart.
  ``(b) Standard for Reduction.--The Director may reduce the level for 
a goal pursuant to such a petition only if--
          ``(1) market and economic conditions or the financial 
        condition of the enterprise require such action; or
          ``(2) efforts to meet the goal would result in the constraint 
        of liquidity, over-investment in certain market segments, or 
        other consequences contrary to the intent of this subpart, or 
        section 301(3) of the Federal National Mortgage Association 
        Charter Act (12 U.S.C. 1716(3)) or section 301(3) of the 
        Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1451 
        note), as applicable.
  ``(c) Determination.--The Director shall make a determination 
regarding any proposed reduction within 30 days of receipt of the 
petition regarding the reduction. The Director may extend such period 
for a single additional 15-day period, but only if the Director 
requests additional information from the enterprise. A denial by the 
Director to reduce the level of any goal under this section may be 
appealed to the United States District Court for the District of 
Columbia or the United States district court in the jurisdiction in 
which the headquarters of an enterprise is located.''.
  (b) Conforming Amendments.--The Housing and Community Development Act 
of 1992 is amended----
          (1) in section 1335(a) (12 U.S.C. 4565(a)), in the matter 
        preceding paragraph (1), by striking ``low- and moderate-income 
        housing goal'' and all that follows through ``section 1334'' 
        and inserting ``housing goals established under this subpart'';
          (2) in section 1336(a)(1) (12 U.S.C. 4566(a)(1)), by striking 
        ``sections 1332, 1333, and 1334,'' and inserting ``this 
        subpart'' .
  (c) Definitions.--Section 1303 of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4502), as amended by the preceding 
provisions of this Act, is further amended--
          (1) in paragraph (26), by striking ``60 percent'' each place 
        such term appears and inserting ``50 percent'';
          (2) by redesignating paragraphs (23) through (26) as 
        paragraphs (27) through (30), respectively;
          (3) by inserting after paragraph (22) the following new 
        paragraph:
          ``(26) Rural areas.--The term `rural areas' means any areas 
        that are non-metropolitan areas (as such term is defined by the 
        Director of the Office of Management and Budget), including 
        micropolitan areas and tribal trust lands.''.
          (4) by redesignating paragraphs (14) through (22) as 
        paragraphs (17) through (25), respectively; and
          (5) by inserting after paragraph (13) the following new 
        paragraph:
          ``(16) Low-income area.--The term `low income area' means a 
        census tract or block numbering area in which the median income 
        does not exceed 80 percent of the median income for the area in 
        which such census tract or block numbering area is located, 
        and, for the purposes of section 1332(a)(2), shall include 
        families having incomes not greater than 100 percent of the 
        area median income who reside in minority census tracts.'';
          (6) by redesignating paragraphs (12) and (13) as paragraphs 
        (14) and (15), respectively;
          (7) by inserting after paragraph (11) the following new 
        paragraph:
          ``(13) Extremely low-income.--The term `extremely low-income' 
        means--
                  ``(A) in the case of owner-occupied units, income not 
                in excess of 30 percent of the area median income; and
                  ``(B) in the case of rental units, income not in 
                excess of 30 percent of the area median income, with 
                adjustments for smaller and larger families, as 
                determined by the Secretary.'';
          (8) by redesignating paragraphs (8) through (11) as 
        paragraphs (9) through (12), respectively; and
          (9) by inserting after paragraph (7) the following new 
        paragraph:
          ``(8) Conforming mortgage.--The term `conforming mortgage' 
        means, with respect to an enterprise, a conventional mortgage 
        having an original principal obligation that does not exceed 
        the dollar limitation, in effect at the time of such 
        origination, under, as applicable--
                  ``(A) section 302(b)(2) of the Federal National 
                Mortgage Association Charter Act; or
                  ``(B) section 305(a)(2) of the Federal Home Loan 
                Mortgage Corporation Act.''.

SEC. 126. DUTY TO SERVE UNDERSERVED MARKETS.

  (a) Establishment and Evaluation of Performance.--Section 1335 of the 
Housing and Community Development Act of 1992 (12 U.S.C. 4565) is 
amended--
          (1) in the section heading, by inserting ``duty to serve 
        underserved markets and'' before ``other'';
          (2) by striking subsection (b);
          (3) in subsection (a)--
                  (A) in the matter preceding paragraph (1), by 
                inserting ``and to carry out the duty under subsection 
                (a) of this section'' before ``, each enterprise 
                shall'';
                  (B) in paragraph (3), by inserting ``and'' after the 
                semicolon at the end;
                  (C) in paragraph (4), by striking ``; and'' and 
                inserting a period;
                  (D) by striking paragraph (5); and
                  (E) by redesignating such subsection as subsection 
                (b);
          (4) by inserting before subsection (b) (as so redesignated by 
        paragraph (3)(E) of this subsection) the following new 
        subsection:
  ``(a) Duty to Serve Underserved Markets.--
          ``(1) Duty.--In accordance with the purpose of the 
        enterprises under section 301(3) of the Federal National 
        Mortgage Association Charter Act (12 U.S.C. 1716) and section 
        301(b)(3) of the Federal Home Loan Mortgage Corporation Act (12 
        U.S.C. 1451 note) to undertake activities relating to mortgages 
        on housing for very low-, low-, and moderate-income families 
        involving a reasonable economic return that may be less than 
        the return earned on other activities, each enterprise shall 
        have the duty to increase the liquidity of mortgage investments 
        and improve the distribution of investment capital available 
        for mortgage financing for underserved markets.
          ``(2) Underserved markets.--To meet its duty under paragraph 
        (1), each enterprise shall comply with the following 
        requirements with respect to the following underserved markets:
                  ``(A) Manufactured housing.--The enterprise shall 
                lead the industry in developing loan products and 
                flexible underwriting guidelines to facilitate a 
                secondary market for mortgages on manufactured homes 
                for very low-, low-, and moderate-income families.
                  ``(B) Affordable housing preservation.--The 
                enterprise shall lead the industry in developing loan 
                products and flexible underwriting guidelines to 
                facilitate a secondary market to preserve housing 
                affordable to very low-, low-, and moderate-income 
                families, including housing projects subsidized under--
                          ``(i) the project-based and tenant-based 
                        rental assistance programs under section 8 of 
                        the United States Housing Act of 1937;
                          ``(ii) the program under section 236 of the 
                        National Housing Act;
                          ``(iii) the below-market interest rate 
                        mortgage program under section 221(d)(4) of the 
                        National Housing Act;
                          ``(iv) the supportive housing for the elderly 
                        program under section 202 of the Housing Act of 
                        1959;
                          ``(v) the supportive housing program for 
                        persons with disabilities under section 811 of 
                        the Cranston-Gonzalez National Affordable 
                        Housing Act; and
                          ``(vi) the rural rental housing program under 
                        section 515 of the Housing Act of 1949.
                  ``(C) Rural and other underserved markets.--The 
                enterprise shall lead the industry in developing loan 
                products and flexible underwriting guidelines to 
                facilitate a secondary market for mortgages on housing 
                for very low-, low-, and moderate-income families in 
                rural areas, and for mortgages for housing for any 
                other underserved market for very low-, low-, and 
                moderate-income families that the Secretary identifies 
                as lacking adequate credit through conventional lending 
                sources. Such underserved markets may be identified by 
                borrower type, market segment, or geographic area.''; 
                and
          (5) by adding at the end the following new subsection:
  ``(c) Evaluation and Reporting of Compliance.--
          ``(1) In general.--Not later than 6 months after the 
        effective date under section 185 of the Federal Housing Finance 
        Reform Act of 2005, the Director shall establish a manner for 
        evaluating whether, and the extent to which, the enterprises 
        have complied with the duty under subsection (a) to serve 
        underserved markets and for rating the extent of such 
        compliance. Using such method, the Director shall, for each 
        year, evaluate such compliance and rate the performance of each 
        enterprise as to extent of compliance. The Director shall 
        include such evaluation and rating for each enterprise for a 
        year in the report for that year submitted pursuant to section 
        1319B(a).
          ``(2) Separate evaluations.--In determining whether an 
        enterprise has complied with the duty referred to in paragraph 
        (1), the Director shall separately evaluate whether the 
        enterprise has complied with such duty with respect to each of 
        the underserved markets identified in subsection (a), taking 
        into consideration--
                  ``(A) the development of loan products and more 
                flexible underwriting guidelines;
                  ``(B) the extent of outreach to qualified loan 
                sellers in each of such underserved markets; and
                  ``(C) the volume of loans purchased in each of such 
                underserved markets.''.
  (b) Enforcement.--Subsection (a) of section 1336 of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4566(a)) is amended--
          (1) in paragraph (1), by inserting ``and with the duty under 
        section 1335A of each enterprise with respect to underserved 
        markets,'' before ``as provided in this section,''; and
          (2) by adding at the end of such subsection, as amended by 
        the preceding provisions of this title, the following new 
        paragraph:
          ``(4) Enforcement of duty to provide mortgage credit to 
        underserved markets.--The duty under section 1335(a) of each 
        enterprise to serve underserved markets (as determined in 
        accordance with section 1335(c)) shall be enforceable under 
        this section to the same extent and under the same provisions 
        that the housing goals established under sections 1332, 1333, 
        and 1334 are enforceable. Such duty shall not be enforceable 
        under any other provision of this title (including subpart C of 
        this part) other than this section or under any provision of 
        the Federal National Mortgage Association Charter Act or the 
        Federal Home Loan Mortgage Corporation Act.''.

SEC. 127. MONITORING AND ENFORCING COMPLIANCE WITH HOUSING GOALS.

  Section 1336 of the Housing and Community Development Act of 1992 (12 
U.S.C. 4566) is amended--
          (1) in subsection (b)--
                  (A) in the subsection heading, by inserting 
                ``Preliminary'' before ``Determination'';
                  (B) by striking paragraph (1) and inserting the 
                following new paragraph:
          ``(1) Notice.--If the Director preliminarily determines that 
        an enterprise has failed, or that there is a substantial 
        probability that an enterprise will fail, to meet any housing 
        goal established under this subpart, the Director shall provide 
        written notice to the enterprise of such a preliminary 
        determination, the reasons for such determination, and the 
        information on which the Director based the determination.'';
                  (C) in paragraph (2)--
                          (i) in subparagraph (A), by inserting 
                        ``finally'' before ``determining'';
                          (ii) by striking subparagraphs (B) and (C) 
                        and inserting the following new subparagraph:
                  ``(B) Extension or shortening of period.--The 
                Director may--
                          ``(i) extend the period under subparagraph 
                        (A) for good cause for not more than 30 
                        additional days; and
                          ``(ii) shorten the period under subparagraph 
                        (A) for good cause.''; and
                          (iii) by redesignating subparagraph (D) as 
                        subparagraph (C); and
                  (D) in paragraph (3)--
                          (i) in subparagraph (A), by striking 
                        ``determine'' and inserting ``issue a final 
                        determination of'';
                          (ii) in subparagraph (B), by inserting 
                        ``final'' before ``determinations''; and
                          (iii) in subparagraph (C)--
                                  (I) by striking ``Committee on 
                                Banking, Finance and Urban Affairs'' 
                                and inserting ``Committee on Financial 
                                Services''; and
                                  (II) by inserting ``final'' before 
                                ``determination'' each place such term 
                                appears; and
          (2) in subsection (c)--
                  (A) by striking the subsection designation and 
                heading and all that follows through the end of 
                paragraph (1) and inserting the following:
  ``(c) Cease and Desist Orders, Civil Money Penalties, and Remedies 
Including Housing Plans.--
          ``(1) Requirement.--If the Director finds, pursuant to 
        subsection (b), that there is a substantial probability that an 
        enterprise will fail, or has actually failed, to meet any 
        housing goal under this subpart and that the achievement of the 
        housing goal was or is feasible, the Director may require that 
        the enterprise submit a housing plan under this subsection. If 
        the Director makes such a finding and the enterprise refuses to 
        submit such a plan, submits an unacceptable plan, fails to 
        comply with the plan or the Director finds that the enterprise 
        has failed to meet any housing goal under this subpart, in 
        addition to requiring an enterprise to submit a housing plan, 
        the Director may issue a cease and desist order in accordance 
        with section 1341, impose civil money penalties in accordance 
        with section 1345, or order other remedies as set forth in 
        paragraph (7) of this subsection.'';
                  (B) in paragraph (2)--
                          (i) by striking ``contents.--Each housing 
                        plan'' and inserting ``housing plan.--If the 
                        Director requires a housing plan under this 
                        section, such a plan''; and
                          (ii) in subparagraph (B), by inserting ``and 
                        changes in its operations'' after 
                        ``improvements'';
                  (C) in paragraph (3)--
                          (i) by inserting ``comply with any remedial 
                        action or'' before ``submit a housing plan''; 
                        and
                          (ii) by striking ``under subsection (b)(3) 
                        that a housing plan is required'';
                  (D) in paragraph (4), by striking the first two 
                sentences and inserting the following: ``The Director 
                shall review each submission by an enterprise, 
                including a housing plan submitted under this 
                subsection, and not later than 30 days after 
                submission, approve or disapprove the plan or other 
                action. The Director may extend the period for approval 
                or disapproval for a single additional 30-day period if 
                the Director determines such extension necessary.''; 
                and
                  (E) by adding at the end the following new paragraph:
          ``(7) Additional remedies for failure to meet goals.--In 
        addition to ordering a housing plan under this section, issuing 
        cease and desist orders under section 1341, and ordering civil 
        money penalties under section 1345, the Director may seek other 
        actions when an enterprise fails to meet a goal, and exercise 
        appropriate enforcement authority available to the Director 
        under this Act to prohibit the enterprise from entering into 
        new programs and new business activities and to order the 
        enterprise to suspend programs and business activities pending 
        its achievement of the goal.''.

SEC. 128. AFFORDABLE HOUSING FUND.

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

``SEC. 1337. AFFORDABLE HOUSING FUND.

  ``(a) Establishment and Purpose.--Each enterprise shall establish and 
manage an affordable housing fund in accordance with this section. The 
purpose of the affordable housing fund shall be--
          ``(1) to increase homeownership for extremely low-and very 
        low-income families;
          ``(2) to increase investment in housing in low-income areas, 
        and areas designated as qualified census tracts or an area of 
        chronic economic distress pursuant to section 143(j) of the 
        Internal Revenue Code of 1986 (26 U.S.C. 143(j));
          ``(3) to increase and preserve the supply of rental and 
        owner-occupied housing for extremely low- and very low-income 
        families; and
          ``(4) to increase investment in economic and community 
        development in economically underserved areas.
  ``(b) Allocation of Amounts by Enterprises.--
          ``(1) In general.--In accordance with regulations issued by 
        the Director under subsection (l) and subject to paragraph (2) 
        of this subsection, each enterprise shall allocate to the 
        affordable housing fund established under subsection (a) by the 
        enterprise, in each year beginning after the effective date 
        under section 185 of the Federal Housing Finance Reform Act of 
        2005, 5 percent of the after-tax income of the enterprise for 
        the preceding year.
          ``(2) Limitation.--An enterprise shall not be required to 
        make an allocation for a year to the affordable housing fund of 
        the enterprise established under subsection (a) unless--
                  ``(A) the enterprise is classified by the Director at 
                the time of such allocation as adequately capitalized; 
                and
                  ``(B) the enterprise generated after-tax income for 
                the preceding year.
          ``(3) Determination of after-tax income.--For purposes of 
        this section, the term `after-tax income' means, with respect 
        to an enterprise for a year, the amount reported by the 
        enterprise for such year in the enterprise's annual report for 
        such year that is filed with the Securities and Exchange 
        Commission, except that for any year in which no such filing is 
        made by an enterprise or such filing is not timely made, such 
        term means the amount determined by the Director based on the 
        income tax return filings of the enterprise.
  ``(c) Selection of Activities Funded Using Affordable Housing Fund 
Amounts.--Amounts from the affordable housing fund of the enterprise 
may be used, or committed for use, only for activities that--
          ``(1) are eligible under subsection (d) for such use; and
          ``(2) are selected for funding by the enterprise in 
        accordance with the process and criteria for such selection 
        established pursuant to subsection (l)(2)(C).
  ``(d) Eligible Activities.--Amounts from the affordable housing fund 
of an enterprise shall be eligible for use, or for commitment for use, 
only for assistance for--
          ``(1) the production, preservation, and rehabilitation of 
        rental housing, including housing under the programs identified 
        in section 1335(a)(2)(B), except that amounts provided from the 
        Fund may be used for the benefit only of extremely low- and 
        very low-income families;
          ``(2) the production, preservation, and rehabilitation of 
        housing for homeownership, including such forms as downpayment 
        assistance, closing cost assistance, and assistance for 
        interest-rate buy-downs, that--
                  ``(A) is available for purchase only for use as a 
                principal residence by families that qualify both as--
                          ``(i) extremely low- and very-low income 
                        families at the times described in 
                        subparagraphs (A) through (C) of section 
                        215(b)(2) of the Cranston-Gonzalez National 
                        Affordable Housing Act (42 U.S.C. 12745(b)(2)); 
                        and
                          ``(ii) first-time homebuyers, as such term is 
                        defined in section 104 of the Cranston-Gonzalez 
                        National Affordable Housing Act (42 U.S.C. 
                        12704), except that any reference in such 
                        section to assistance under title II of such 
                        Act shall for purposes of this section be 
                        considered to refer to assistance from the 
                        affordable housing fund of the enterprise;
                  ``(B) has an initial purchase price that meets the 
                requirements of section 215(b)(1) of the Cranston-
                Gonzalez National Affordable Housing Act; and
                  ``(C) is subject to the same resale restrictions 
                established under section 215(b)(3) of the Cranston-
                Gonzalez National Affordable Housing Act and applicable 
                to the participating jurisdiction that is the State in 
                which such housing is located; and
          ``(3) leveraged grants under subsection (e).
  ``(e) Leveraged Grants.--
          ``(1) In general.--Pursuant to regulations issued by the 
        Director, each enterprise shall carry out a program under this 
        subsection to make leveraged grants from amounts in the 
        affordable housing fund of the enterprise, subject to the 
        requirements under this subsection.
          ``(2) Eligible purposes.--Amounts from the affordable housing 
        fund of an enterprise may be used only for leveraged grants 
        under paragraph (4) for--
                  ``(A) the development, preservation, rehabilitation, 
                or purchase of affordable housing that meets 
                underserved needs for affordable housing;
                  ``(B) community or economic development activities in 
                economically underserved areas; or
                  ``(C) a combination of the activities identified in 
                subparagraphs (A) and (B).
          ``(3) Eligible sponsors.--A leveraged grant under this 
        subsection may be made only on behalf of a sponsor that meets 
        such requirements as the Director shall establish for 
        experience and success in carrying out the types of activities 
        proposed under the application of the sponsor, such as the 
        following entities:
                  ``(A) A low-income housing fund.
                  ``(B) A housing finance agency of a State or unit of 
                general local government.
                  ``(C) A non-profit organization having as one of its 
                principal purposes the development or management of 
                affordable housing.
                  ``(D) A community development financial institution.
                  ``(E) A national non-profit housing intermediary.
                  ``(F) A community development corporation.
                  ``(G) A community development entity.
          ``(4) Eligible uses.--Amounts from the affordable housing 
        fund of an enterprise may be used under this subsection only 
        for the following types of leveraged grants:
                  ``(A) To provide loan loss reserves.
                  ``(B) To capitalize a revolving loan fund.
                  ``(C) To provide equity capitalization of an 
                affordable housing fund.
                  ``(D) To provide equity capitalization of a community 
                development or economic development fund.
                  ``(E) For risk sharing loans.
                  ``(F) For the funding of a specific, detailed 
                investment plan that identifies the specific types of 
                uses and the expected timeframes with respect to such 
                uses.
          ``(5) Applications.--The Director shall provide, in the 
        application process established pursuant to subsection 
        (l)(2)(C), for eligible sponsors under paragraph (3) of this 
        subsection to submit applications to an enterprise for 
        leveraged grants pursuant to this subsection, which shall 
        include a detailed description of--
                  ``(A) the types of affordable housing or community or 
                economic development activities for which the leveraged 
                grant is made;
                  ``(B) the type of eligible leveraged grants under 
                paragraph (4) to be made in the project;
                  ``(C) the types, sources, and amounts of other 
                funding for the project;
                  ``(D) and the expected time frame of the leveraged 
                grant under this subsection.
          ``(6) Limitations.--The Director shall by regulation--
                  ``(A) ensure that leveraged grants pursuant to this 
                subsection are designed to alleviate need for 
                affordable housing in underserved markets identified in 
                section 1335(a) having the greatest need for such 
                housing or to address community and economic 
                development needs in economically underserved areas 
                having the greatest need; and
                  ``(B) any returns from leveraged grants under this 
                subsection accrue to the affordable housing fund of the 
                enterprise and are available for use only as provided 
                under this section.
  ``(f) Limitations on Use.--
          ``(1) Amounts for homeownership.--Of any amounts allocated 
        pursuant to subsection (b) in each year to the affordable 
        housing fund of an enterprise, not less than 10 percent shall 
        be used for activities under paragraph (2) of subsection (d).
          ``(2) Amounts for leveraged grants.--Of any amounts allocated 
        pursuant to subsection (b) in each year to the affordable 
        housing fund of an enterprise, not more than 12.5 percent shall 
        be used for leveraged grants under subsection (e).
          ``(3) Deadline for commitment or use.--Any amounts allocated 
        to the affordable housing fund of an enterprise shall be used 
        or committed for use within two years of the date of such 
        allocation.
          ``(4) Use of returns.--Any return on investment of any 
        amounts allocated pursuant to subsection (b) to the affordable 
        housing fund of an enterprise shall be available for use by the 
        enterprise only for eligible activities under subsection (d).
          ``(5) Administrative costs.--The Director shall, by 
        regulation--
                  ``(A) provide that, except as provided in 
                subparagraph (B), amounts allocated to the affordable 
                housing fund of an enterprise may not be used for 
                administrative, outreach, or other costs of--
                          ``(i) the enterprise; or
                          ``(ii) any recipient of amounts from the 
                        affordable housing fund; and
                  ``(B) limit the amount of any such contributions that 
                may be used for administrative costs of the enterprise 
                of maintaining the affordable housing fund and carrying 
                out the program under this section.
          ``(6) Prohibition of consideration of use for meeting housing 
        goals.--In determining compliance with the housing goals under 
        this subpart, the Director may not consider amounts used under 
        this section for eligible activities under subsection (d). The 
        Director shall give credit toward the achievement of such 
        housing goals to purchases of mortgages for housing that 
        receives funding under this section, but only to the extent 
        that such purchases are funded other than under this section.
          ``(7) Prohibition of certain subgrants.--The Director shall, 
        by regulation, ensure that amounts from the affordable housing 
        fund of an enterprise awarded under this section to a national 
        non-profit housing intermediary are not used for the purpose of 
        distributing subgrants to other non-profit entities.
  ``(g) Consistency of Use With Housing Needs.--
          ``(1) Quarterly reports.--The Director shall require each 
        enterprise to submit a report, on a quarterly basis, to the 
        Director and the affordable housing board established under 
        subsection (j) describing the activities funded under this 
        section during such quarter with amounts from the affordable 
        housing fund of the enterprise established under this section. 
        The Director shall make such reports publicly available. The 
        affordable housing board shall review each report by an 
        enterprise to determine the consistency of such activities 
        funded with the criteria for selection of such activities 
        established pursuant to subsection (l)(2)(C).
          ``(2) Replenishment.--If the affordable housing board 
        determines that an activity funded by an enterprise with 
        amounts from the affordable housing fund of the enterprise is 
        not consistent with the criteria established pursuant to 
        subsection (l)(2)(C), the board shall notify the Director and 
        the Director shall require the enterprise to allocate to such 
        affordable housing fund (in addition to amounts allocated in 
        compliance with subsection (b)) an amount equal to the sum of 
        the amounts from the affordable housing fund used and further 
        committed for use for such activity.
  ``(h) Capital Requirements.--The utilization or commitment of amounts 
from the affordable housing fund of an enterprise shall not be subject 
to the risk-based capital requirements established pursuant to section 
1361(a).
  ``(i) Reporting Requirement.--Each enterprise shall include, in the 
report required under section 309(m) of the Federal National Mortgage 
Association Charter Act or section 307(f) of the Federal Home Loan 
Mortgage Corporation Act, as applicable, a description of the actions 
taken by the enterprise to utilize or commit amounts allocated under 
this section to the affordable housing fund of the enterprise 
established under this section.
  ``(j) Affordable Housing Board.--
          ``(1) Appointment.--The Director shall appoint an affordable 
        housing board of 7, 9, or 11 persons, who shall include--
                  ``(A) the Director, or the Director's designee;
                  ``(B) the Secretary of Housing and Urban Development, 
                or the Secretary's designee;
                  ``(C) the Secretary of Agriculture, or the 
                Secretary's designee;
                  ``(D) 2 persons from for-profit organizations or 
                businesses actively involved in providing or promoting 
                affordable housing for extremely low- and very low-
                income households; and
                  ``(E) 2 persons from nonprofit organizations actively 
                involved in providing or promoting affordable housing 
                for extremely low- and very low-income households.
          ``(2) Terms.--
                  ``(A) In general.--Except as provided in subparagraph 
                (B), the term of each member of the affordable housing 
                board appointed pursuant to paragraph (1) (but not 
                including members appointed pursuant to subparagraphs 
                (A), (B), and (C)) shall be 3 years.
                  ``(B) Initial appointees.--The Director shall appoint 
                the initial members of the affordable housing board not 
                later than the expiration of the 60-day period 
                beginning on the date of the enactment of this Act. As 
                designated by the Director at the time of appointment, 
                of the members of the affordable housing board first 
                appointed pursuant to paragraph (1) (but not including 
                members appointed pursuant to subparagraphs (A), (B), 
                and (C))--
                          ``(i) in the case of a board having 7 
                        members--
                                  ``(I) one shall be appointed for a 
                                term of one year; and
                                  ``(II) one shall be appointed for a 
                                term of two years;
                          ``(ii) in the case of a board having 9 
                        members--
                                  ``(I) two shall be appointed for a 
                                term of one year; and
                                  ``(II) two shall be appointed for a 
                                term of two years; and
                          ``(iii) in the case of a board having 11 
                        members--
                                  ``(I) two shall be appointed for a 
                                term of one year; and
                                  ``(II) three shall be appointed for a 
                                term of two years;
          ``(3) Duties.--The affordable housing board shall meet not 
        less than quarterly--
                  ``(A) to determine extremely low- and very low-income 
                housing needs;
                  ``(B) to advise the Director with respect to--
                          ``(i) establishment of the selection criteria 
                        under subsection (l)(2)(C) that provide for 
                        appropriate use of amounts from the affordable 
                        housing funds of the enterprises to meet such 
                        needs; and
                          ``(ii) operation of, and changes to, the 
                        program under this section appropriate to meet 
                        such needs; and
                  ``(C) to review the reports submitted by the 
                enterprises pursuant to subsection (g)(1) to determine 
                whether the activities funded using amounts from the 
                affordable housing funds of the enterprises comply with 
                the regulations issued pursuant to subsection (l)(2)(C) 
                and inform the Director of such determinations, for 
                purposes of subsection (g)(2).
          ``(4) Expenses and per diem.--Members of the board shall 
        receive travel expenses, including per diem in lieu of 
        subsistence, in accordance with sections 5702 and 5703 of title 
        5, United States Code.
          ``(5) Advisory committee.--The board shall be considered an 
        advisory committee for purposes of the Federal Advisory 
        Committee Act (5 U.S.C. App.).
          ``(6) Duration.-- The board shall have continued existence 
        until terminated by law.
  ``(k) Definition.--For purposes of this section, the term 
`economically underserved area' means an area that predominantly 
includes census tracts for which--
          ``(1) at least 20 percent of the population is below the 
        poverty line (as such term is defined in section 673(2) of the 
        Omnibus Budget Reconciliation Act of 1981 (42 U.S.C. 9902(2)), 
        including any revision required by such section), applicable to 
        a family of the size involved; or
          ``(2) median family income does not exceed the greater of--
                  ``(A) 80 percent of the median family income for the 
                metropolitan statistical area in which such census 
                tracts are located; or
                  ``(B) 80 percent of the median family income for the 
                State in which such census tracts are located.
  ``(l) Regulations.--
          ``(1) In general.--The Director shall issue regulations to 
        carry out this section.
          ``(2) Required contents.--The regulations issued under this 
        subsection shall include--
                  ``(A) authority for the Director to audit, provide 
                for an audit, or otherwise verify an enterprise's 
                activities, to ensure compliance with this section;
                  ``(B) a requirement that the Director ensure that the 
                affordable housing fund of each enterprise is audited 
                not less than annually to ensure compliance with this 
                section;
                  ``(C) requirements for a process for application to, 
                and selection by, an enterprise for activities to be 
                funded with amounts from the affordable housing fund, 
                which shall provide that--
                          ``(i) selection shall based upon specific 
                        criteria, including a prioritization of funding 
                        based upon--
                                  ``(I) greatest impact;
                                  ``(II) geographic diversity;
                                  ``(III) ability to obligate amounts 
                                and undertake activities so funded in a 
                                timely manner;
                                  ``(IV) in the case of rental housing 
                                projects under subsection (d)(1), the 
                                extent to which rents for units in the 
                                project funded are affordable, 
                                especially for extremely low-income 
                                families; and
                                  ``(V) in the case of rental housing 
                                projects under subsection (d)(1), the 
                                extent of the duration for which such 
                                rents will remain affordable; and
                          ``(ii) an enterprise may not require for such 
                        selection that an activity involve financing or 
                        underwriting of any kind by the enterprise 
                        (other than funding through the affordable 
                        housing fund of the enterprise) and may not 
                        give preference in such selection to activities 
                        that involve such financing; and
                  ``(D) requirements to ensure that amounts from the 
                affordable housing funds of the enterprises used for 
                rental housing under subsection (d)(1) are used only 
                for the benefit of extremely low- and very-low income 
                families.
          ``(3) Limitation.--Any regulations issued by the Director 
        pursuant to this section shall be no more restrictive on the 
        enterprises' activities in connection with the allocation of 
        after-tax income under this section than the regulations issued 
        to implement the affordable housing program of the Federal home 
        loan banks pursuant to section 10(j) of the Federal Home Loan 
        Bank Act (12 U.S.C. 1430(j)).''.
  (b) Contributions for 2006.--
          (1) Reservation and contribution.--In 2006, each enterprise 
        (as such term is defined in section 1303 of the Housing and 
        Community Development Act of 1992) shall reserve for 
        contribution to the affordable housing fund to be established 
        by the enterprise pursuant to section 1337 of such Act (as 
        amended by subsection (a) of this section), an amount equal to 
        3.5 percent of the after-tax income of the enterprise for 2005. 
        Upon the establishment of such affordable housing fund, each 
        enterprise shall allocate to such fund the amounts reserved 
        under this subsection by the enterprise.
          (2) Exception to deadline for commitment.--Section 1337(e)(2) 
        of the Housing and Community Development Act of 1992 (as 
        amended by subsection (a) of this section) shall not apply to 
        amounts allocated to the affordable housing fund of an 
        enterprise pursuant to paragraph (1).
          (3) After-tax income.--For purposes of this subsection, the 
        term ``after-tax income'' has the meaning provided in 
        subsection (b)(3) of the new section 1337 to be inserted by the 
        amendment made by subsection (a) of this section.
          (4) Effective date.--This subsection shall take effect on the 
        date of the enactment of this Act.

SEC. 129. CONSISTENCY WITH MISSION.

  Subpart B of part 2 of subtitle A of title XIII of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4561 et seq.) is amended 
by adding after section 1337, as added by section 127 of this Act, the 
following new section:

``SEC. 1338. CONSISTENCY WITH MISSION.

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

SEC. 130. ENFORCEMENT.

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

                      ``Subpart C--Enforcement''.

SEC. 131. CONFORMING AMENDMENTS.

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

                  Subtitle C--Prompt Corrective Action

SEC. 141. CAPITAL CLASSIFICATIONS.

  (a) In General.--Section 1364 of the Housing and Community 
Development Act of 1992 (12 U.S.C. 4614) is amended--
          (1) in the heading for subsection (a) by striking ``In 
        General'' and inserting ``Enterprises'';
          (2) in subsection (c)--
                  (A) by striking ``subsection (b)'' and inserting 
                ``subsection (c)'';
                  (B) by striking ``enterprises'' and inserting 
                ``regulated entities''; and
                  (C) by striking the last sentence;
          (3) by redesignating subsections (c) (as so amended by 
        paragraph (2) of this subsection) and (d) as subsections (d) 
        and (f), respectively;
          (4) by striking subsection (b) and inserting the following 
        new subsections:
  ``(b) Federal Home Loan Banks.--
          ``(1) Establishment and criteria.--For purposes of this 
        subtitle, the Director shall, by regulation--
                  ``(A) establish the capital classifications specified 
                under paragraph (2) for the Federal home loan banks;
                  ``(B) establish criteria for each such capital 
                classification based on the amount and types of capital 
                held by a bank and the risk-based, minimum, and 
                critical capital levels for the banks and taking due 
                consideration of the capital classifications 
                established under subsection (a) for the enterprises, 
                with such modifications as the Director determines to 
                be appropriate to reflect the difference in operations 
                between the banks and the enterprises; and
                  ``(C) shall classify the Federal home loan banks 
                according to such capital classifications.
          ``(2) Classifications.--The capital classifications specified 
        under this paragraph are--
                  ``(A) adequately capitalized;
                  ``(B) undercapitalized;
                  ``(C) significantly undercapitalized; and
                  ``(D) critically undercapitalized.
  ``(c) Discretionary Classification.--
          ``(1) Grounds for reclassification.--The Director may 
        reclassify a regulated entity under paragraph (2) if--
                  ``(A) at any time, the Director determines in writing 
                that the regulated entity is engaging in conduct that 
                could result in a rapid depletion of core or total 
                capital or, in the case of an enterprise, that the 
                value of the property subject to mortgages held or 
                securitized by the enterprise has decreased 
                significantly;
                  ``(B) after notice and an opportunity for hearing, 
                the Director determines that the regulated entity is in 
                an unsafe or unsound condition; or
                  ``(C) pursuant to section 1371(b), the Director deems 
                the regulated entity to be engaging in an unsafe or 
                unsound practice.
          ``(2) Reclassification.--In addition to any other action 
        authorized under this title, including the reclassification of 
        a regulated entity for any reason not specified in this 
        subsection, if the Director takes any action described in 
        paragraph (1) the Director may classify a regulated entity--
                  ``(A) as undercapitalized, if the regulated entity is 
                otherwise classified as adequately capitalized;
                  ``(B) as significantly undercapitalized, if the 
                regulated entity is otherwise classified as 
                undercapitalized; and
                  ``(C) as critically undercapitalized, if the 
                regulated entity is otherwise classified as 
                significantly undercapitalized.''; and
          (5) by inserting after subsection (d) (as so redesignated by 
        paragraph (3) of this subsection), the following new 
        subsection:
  ``(e) Restriction on Capital Distributions.--
          ``(1) In general.--A regulated entity shall make no capital 
        distribution if, after making the distribution, the regulated 
        entity would be undercapitalized.
          ``(2) Exception.--Notwithstanding paragraph (1), the Director 
        may permit a regulated entity, to the extent appropriate or 
        applicable, to repurchase, redeem, retire, or otherwise acquire 
        shares or ownership interests if the repurchase, redemption, 
        retirement, or other acquisition--
                  ``(A) is made in connection with the issuance of 
                additional shares or obligations of the regulated 
                entity in at least an equivalent amount; and
                  ``(B) will reduce the financial obligations of the 
                regulated entity or otherwise improve the financial 
                condition of the entity.''.
  (b) Regulations.--Not later than the expiration of the 180-day period 
beginning on the effective date under section 185, the Director of the 
Federal Housing Finance Agency shall issue regulations to carry out 
section 1364(b) of the Housing and Community Development Act of 1992 
(as added by paragraph (4) of this subsection), relating to capital 
classifications for the Federal home loan banks.

SEC. 142. SUPERVISORY ACTIONS APPLICABLE TO UNDERCAPITALIZED REGULATED 
                    ENTITIES.

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

SEC. 143. SUPERVISORY ACTIONS APPLICABLE TO SIGNIFICANTLY 
                    UNDERCAPITALIZED REGULATED ENTITIES.

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

SEC. 144. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED REGULATED 
                    ENTITIES.

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

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

  ``(a) Appointment of Agency as Conservator or Receiver.--
          ``(1) In general.--Notwithstanding any other provision of 
        Federal or State law, if any of the grounds under paragraph (3) 
        exist, at the discretion of the Director, the Director may 
        establish a conservatorship or receivership, as appropriate, 
        for the purpose of reorganizing, rehabilitating, or winding up 
        the affairs of a regulated entity.
          ``(2) Appointment.--In any conservatorship or receivership 
        established under this section, the Director shall appoint the 
        Agency as conservator or receiver.
          ``(3) Grounds for appointment.--The grounds for appointing a 
        conservator or receiver for a regulated entity are as follows:
                  ``(A) Assets insufficient for obligations.--The 
                assets of the regulated entity are less than the 
                obligations of the regulated entity to its creditors 
                and others.
                  ``(B) Substantial dissipation.--Substantial 
                dissipation of assets or earnings due to--
                          ``(i) any violation of any provision of 
                        Federal or State law; or
                          ``(ii) any unsafe or unsound practice.
                  ``(C) Unsafe or unsound condition.--An unsafe or 
                unsound condition to transact business.
                  ``(D) Cease-and-desist orders.--Any willful violation 
                of a cease-and-desist order that has become final.
                  ``(E) Concealment.--Any concealment of the books, 
                papers, records, or assets of the regulated entity, or 
                any refusal to submit the books, papers, records, or 
                affairs of the regulated entity, for inspection to any 
                examiner or to any lawful agent of the Director.
                  ``(F) Inability to meet obligations.--The regulated 
                entity is likely to be unable to pay its obligations or 
                meet the demands of its creditors in the normal course 
                of business.
                  ``(G) Losses.--The regulated entity has incurred or 
                is likely to incur losses that will deplete all or 
                substantially all of its capital, and there is no 
                reasonable prospect for the regulated entity to become 
                adequately capitalized (as defined in section 
                1364(a)(1)).
                  ``(H) Violations of law.--Any violation of any law or 
                regulation, or any unsafe or unsound practice or 
                condition that is likely to--
                          ``(i) cause insolvency or substantial 
                        dissipation of assets or earnings; or
                          ``(ii) weaken the condition of the regulated 
                        entity.
                  ``(I) Consent.--The regulated entity, by resolution 
                of its board of directors or its shareholders or 
                members, consents to the appointment.
                  ``(J) Undercapitalization.--The regulated entity is 
                undercapitalized or significantly undercapitalized (as 
                defined in section 1364(a)(3) or in regulations issued 
                pursuant to section 1364(b), as applicable), and--
                          ``(i) has no reasonable prospect of becoming 
                        adequately capitalized;
                          ``(ii) fails to become adequately 
                        capitalized, as required by--
                                  ``(I) section 1365(a)(1) with respect 
                                to an undercapitalized regulated 
                                entity; or
                                  ``(II) section 1366(a)(1) with 
                                respect to a significantly 
                                undercapitalized regulated entity;
                          ``(iii) fails to submit a capital restoration 
                        plan acceptable to the Agency within the time 
                        prescribed under section 1369C; or
                          ``(iv) materially fails to implement a 
                        capital restoration plan submitted and accepted 
                        under section 1369C.
                  ``(K) Critical undercapitalization.--The regulated 
                entity is critically undercapitalized, as defined in 
                section 1364(a)(4) or in regulations issued pursuant to 
                section 1364(b), as applicable.
                  ``(L) Money laundering.--The Attorney General 
                notifies the Director in writing that the regulated 
                entity has been found guilty of a criminal offense 
                under section 1956 or 1957 of title 18, United States 
                Code, or section 5322 or 5324 of title 31, United 
                States Code.
          ``(4) Judicial review.--
                  ``(A) In general.--If the Agency is appointed 
                conservator or receiver under this section, the 
                regulated entity may, within 30 days of such 
                appointment, bring an action in the United States 
                District Court for the judicial district in which the 
                principal place of business of such regulated entity is 
                located, or in the United States District Court for the 
                District of Columbia, for an order requiring the Agency 
                to remove itself as conservator or receiver.
                  ``(B) Review.--Upon the filing of an action under 
                subparagraph (A), the court shall, upon the merits, 
                dismiss such action or direct the Agency to remove 
                itself as such conservator or receiver.
          ``(5) Directors not liable for acquiescing in appointment of 
        conservator or receiver.--The members of the board of directors 
        of a regulated entity shall not be liable to the shareholders 
        or creditors of the regulated entity for acquiescing in or 
        consenting in good faith to the appointment of the Agency as 
        conservator or receiver for that regulated entity.
          ``(6) Agency not subject to any other federal agency.--When 
        acting as conservator or receiver, the Agency shall not be 
        subject to the direction or supervision of any other agency of 
        the United States or any State in the exercise of the rights, 
        powers, and privileges of the Agency.
  ``(b) Powers and Duties of the Agency as Conservator or Receiver.--
          ``(1) Rulemaking authority of the agency.--The Agency may 
        prescribe such regulations as the Agency determines to be 
        appropriate regarding the conduct of conservatorships or 
        receiverships.
          ``(2) General powers.--
                  ``(A) Successor to regulated entity.--The Agency 
                shall, as conservator or receiver, and by operation of 
                law, immediately succeed to--
                          ``(i) all rights, titles, powers, and 
                        privileges of the regulated entity, and of any 
                        stockholder, officer, or director of such 
                        regulated entity with respect to the regulated 
                        entity and the assets of the regulated entity; 
                        and
                          ``(ii) title to the books, records, and 
                        assets of any other legal custodian of such 
                        regulated entity.
                  ``(B) Operate the regulated entity.--The Agency may, 
                as conservator or receiver--
                          ``(i) take over the assets of and operate the 
                        regulated entity with all the powers of the 
                        shareholders, the directors, and the officers 
                        of the regulated entity and conduct all 
                        business of the regulated entity;
                          ``(ii) collect all obligations and money due 
                        the regulated entity;
                          ``(iii) perform all functions of the 
                        regulated entity in the name of the regulated 
                        entity which are consistent with the 
                        appointment as conservator or receiver; and
                          ``(iv) preserve and conserve the assets and 
                        property of such regulated entity.
                  ``(C) Functions of officers, directors, and 
                shareholders of a regulated entity.--The Agency may, by 
                regulation or order, provide for the exercise of any 
                function by any stockholder, director, or officer of 
                any regulated entity for which the Agency has been 
                named conservator or receiver.
                  ``(D) Powers as conservator.--The Agency may, as 
                conservator, take such action as may be--
                          ``(i) necessary to put the regulated entity 
                        in a sound and solvent condition; and
                          ``(ii) appropriate to carry on the business 
                        of the regulated entity and preserve and 
                        conserve the assets and property of the 
                        regulated entity.
                  ``(E) Additional powers as receiver.--The Agency may, 
                as receiver, place the regulated entity in liquidation 
                and proceed to realize upon the assets of the regulated 
                entity, having due regard to the conditions of the 
                housing finance market.
                  ``(F) Organization of new regulated entities.--The 
                Agency may, as receiver, organize a successor regulated 
                entity that will operate pursuant to subsection (i).
                  ``(G) Transfer of assets and liabilities.--The Agency 
                may, as conservator or receiver, transfer any asset or 
                liability of the regulated entity in default without 
                any approval, assignment, or consent with respect to 
                such transfer. Any Federal home loan bank may, with the 
                approval of the Agency, acquire the assets of any Bank 
                in conservatorship or receivership, and assume the 
                liabilities of such Bank
                  ``(H) Payment of valid obligations.--The Agency, as 
                conservator or receiver, shall, to the extent of 
                proceeds realized from the performance of contracts or 
                sale of the assets of a regulated entity, pay all valid 
                obligations of the regulated entity in accordance with 
                the prescriptions and limitations of this section.
                  ``(I) Subpoena authority.--
                          ``(i) In general.--
                                  ``(I) In general.--The Agency may, as 
                                conservator or receiver, and for 
                                purposes of carrying out any power, 
                                authority, or duty with respect to a 
                                regulated entity (including determining 
                                any claim against the regulated entity 
                                and determining and realizing upon any 
                                asset of any person in the course of 
                                collecting money due the regulated 
                                entity), exercise any power established 
                                under section 1348.
                                  ``(II) Applicability of law.--The 
                                provisions of section 1348 shall apply 
                                with respect to the exercise of any 
                                power exercised under this subparagraph 
                                in the same manner as such provisions 
                                apply under that section.
                          ``(ii) Authority of director.--A subpoena or 
                        subpoena duces tecum may be issued under clause 
                        (i) only by, or with the written approval of, 
                        the Director, or the designee of the Director.
                          ``(iii) Rule of construction.--This 
                        subsection shall not be construed to limit any 
                        rights that the Agency, in any capacity, might 
                        otherwise have under section 1317 or 1379D.
                  ``(J) Contracting for services.--The Agency may, as 
                conservator or receiver, provide by contract for the 
                carrying out of any of its functions, activities, 
                actions, or duties as conservator or receiver.
                  ``(K) Incidental powers.--The Agency may, as 
                conservator or receiver--
                          ``(i) exercise all powers and authorities 
                        specifically granted to conservators or 
                        receivers, respectively, under this section, 
                        and such incidental powers as shall be 
                        necessary to carry out such powers; and
                          ``(ii) take any action authorized by this 
                        section, which the Agency determines is in the 
                        best interests of the regulated entity or the 
                        Agency.
          ``(3) Authority of receiver to determine claims.--
                  ``(A) In general.--The Agency may, as receiver, 
                determine claims in accordance with the requirements of 
                this subsection and any regulations prescribed under 
                paragraph (4).
                  ``(B) Notice requirements.--The receiver, in any case 
                involving the liquidation or winding up of the affairs 
                of a closed regulated entity, shall--
                          ``(i) promptly publish a notice to the 
                        creditors of the regulated entity to present 
                        their claims, together with proof, to the 
                        receiver by a date specified in the notice 
                        which shall be not less than 90 days after the 
                        publication of such notice; and
                          ``(ii) republish such notice approximately 1 
                        month and 2 months, respectively, after the 
                        publication under clause (i).
                  ``(C) Mailing required.--The receiver shall mail a 
                notice similar to the notice published under 
                subparagraph (B)(i) at the time of such publication to 
                any creditor shown on the books of the regulated 
                entity--
                          ``(i) at the last address of the creditor 
                        appearing in such books; or
                          ``(ii) upon discovery of the name and address 
                        of a claimant not appearing on the books of the 
                        regulated entity within 30 days after the 
                        discovery of such name and address.
          ``(4) Rulemaking authority relating to determination of 
        claims.--Subject to subsection (c), the Director may prescribe 
        regulations regarding the allowance or disallowance of claims 
        by the receiver and providing for administrative determination 
        of claims and review of such determination.
          ``(5) Procedures for determination of claims.--
                  ``(A) Determination period.--
                          ``(i) In general.--Before the end of the 180-
                        day period beginning on the date on which any 
                        claim against a regulated entity is filed with 
                        the Agency as receiver, the Agency shall 
                        determine whether to allow or disallow the 
                        claim and shall notify the claimant of any 
                        determination with respect to such claim.
                          ``(ii) Extension of time.--The period 
                        described in clause (i) may be extended by a 
                        written agreement between the claimant and the 
                        Agency.
                          ``(iii) Mailing of notice sufficient.--The 
                        notification requirements of clause (i) shall 
                        be deemed to be satisfied if the notice of any 
                        determination with respect to any claim is 
                        mailed to the last address of the claimant 
                        which appears--
                                  ``(I) on the books of the regulated 
                                entity;
                                  ``(II) in the claim filed by the 
                                claimant; or
                                  ``(III) in documents submitted in 
                                proof of the claim.
                          ``(iv) Contents of notice of disallowance.--
                        If any claim filed under clause (i) is 
                        disallowed, the notice to the claimant shall 
                        contain--
                                  ``(I) a statement of each reason for 
                                the disallowance; and
                                  ``(II) the procedures available for 
                                obtaining agency review of the 
                                determination to disallow the claim or 
                                judicial determination of the claim.
                  ``(B) Allowance of proven claim.--The receiver shall 
                allow any claim received on or before the date 
                specified in the notice published under paragraph 
                (3)(B)(i), or the date specified in the notice required 
                under paragraph (3)(C), which is proved to the 
                satisfaction of the receiver.
                  ``(C) Disallowance of claims filed after end of 
                filing period.--Claims filed after the date specified 
                in the notice published under paragraph (3)(B)(i), or 
                the date specified under paragraph (3)(C), shall be 
                disallowed and such disallowance shall be final.
                  ``(D) Authority to disallow claims.--
                          ``(i) In general.--The receiver may disallow 
                        any portion of any claim by a creditor or claim 
                        of security, preference, or priority which is 
                        not proved to the satisfaction of the receiver.
                          ``(ii) Payments to less than fully secured 
                        creditors.--In the case of a claim of a 
                        creditor against a regulated entity which is 
                        secured by any property or other asset of such 
                        regulated entity, the receiver--
                                  ``(I) may treat the portion of such 
                                claim which exceeds an amount equal to 
                                the fair market value of such property 
                                or other asset as an unsecured claim 
                                against the regulated entity; and
                                  ``(II) may not make any payment with 
                                respect to such unsecured portion of 
                                the claim other than in connection with 
                                the disposition of all claims of 
                                unsecured creditors of the regulated 
                                entity.
                          ``(iii) Exceptions.--No provision of this 
                        paragraph shall apply with respect to any 
                        extension of credit from any Federal Reserve 
                        Bank, Federal home loan bank, or the Treasury 
                        of the United States.
                  ``(E) No judicial review of determination pursuant to 
                subparagraph (D).--No court may review the 
                determination of the Agency under subparagraph (D) to 
                disallow a claim. This subparagraph shall not effect 
                the authority of a claimant to obtain de novo judicial 
                review of a claim pursuant to paragraph (6).
                  ``(F) Legal effect of filing.--
                          ``(i) Statute of limitation tolled.--For 
                        purposes of any applicable statute of 
                        limitations, the filing of a claim with the 
                        receiver shall constitute a commencement of an 
                        action.
                          ``(ii) No prejudice to other actions.--
                        Subject to paragraph (10), the filing of a 
                        claim with the receiver shall not prejudice any 
                        right of the claimant to continue any action 
                        which was filed before the date of the 
                        appointment of the receiver, subject to the 
                        determination of claims by the receiver.
          ``(6) Provision for judicial determination of claims.--
                  ``(A) In general.--The claimant may file suit on a 
                claim (or continue an action commenced before the 
                appointment of the receiver) in the district or 
                territorial court of the United States for the district 
                within which the principal place of business of the 
                regulated entity is located or the United States 
                District Court for the District of Columbia (and such 
                court shall have jurisdiction to hear such claim), 
                before the end of the 60-day period beginning on the 
                earlier of--
                          ``(i) the end of the period described in 
                        paragraph (5)(A)(i) with respect to any claim 
                        against a regulated entity for which the Agency 
                        is receiver; or
                          ``(ii) the date of any notice of disallowance 
                        of such claim pursuant to paragraph (5)(A)(i).
                  ``(B) Statute of limitations.--A claim shall be 
                deemed to be disallowed (other than any portion of such 
                claim which was allowed by the receiver), and such 
                disallowance shall be final, and the claimant shall 
                have no further rights or remedies with respect to such 
                claim, if the claimant fails, before the end of the 60-
                day period described under subparagraph (A), to file 
                suit on such claim (or continue an action commenced 
                before the appointment of the receiver).
          ``(7) Review of claims.--
                  ``(A) Other review procedures.--
                          ``(i) In general.--The Agency shall establish 
                        such alternative dispute resolution processes 
                        as may be appropriate for the resolution of 
                        claims filed under paragraph (5)(A)(i).
                          ``(ii) Criteria.--In establishing alternative 
                        dispute resolution processes, the Agency shall 
                        strive for procedures which are expeditious, 
                        fair, independent, and low cost.
                          ``(iii) Voluntary binding or nonbinding 
                        procedures.--The Agency may establish both 
                        binding and nonbinding processes, which may be 
                        conducted by any government or private party. 
                        All parties, including the claimant and the 
                        Agency, must agree to the use of the process in 
                        a particular case.
                  ``(B) Consideration of incentives.--The Agency shall 
                seek to develop incentives for claimants to participate 
                in the alternative dispute resolution process.
          ``(8) Expedited determination of claims.--
                  ``(A) Establishment required.--The Agency shall 
                establish a procedure for expedited relief outside of 
                the routine claims process established under paragraph 
                (5) for claimants who--
                          ``(i) allege the existence of legally valid 
                        and enforceable or perfected security interests 
                        in assets of any regulated entity for which the 
                        Agency has been appointed receiver; and
                          ``(ii) allege that irreparable injury will 
                        occur if the routine claims procedure is 
                        followed.
                  ``(B) Determination period.--Before the end of the 
                90-day period beginning on the date any claim is filed 
                in accordance with the procedures established under 
                subparagraph (A), the Director shall--
                          ``(i) determine--
                                  ``(I) whether to allow or disallow 
                                such claim; or
                                  ``(II) whether such claim should be 
                                determined pursuant to the procedures 
                                established under paragraph (5); and
                          ``(ii) notify the claimant of the 
                        determination, and if the claim is disallowed, 
                        provide a statement of each reason for the 
                        disallowance and the procedure for obtaining 
                        agency review or judicial determination.
                  ``(C) Period for filing or renewing suit.--Any 
                claimant who files a request for expedited relief shall 
                be permitted to file a suit, or to continue a suit 
                filed before the appointment of the receiver, seeking a 
                determination of the rights of the claimant with 
                respect to such security interest after the earlier 
                of--
                          ``(i) the end of the 90-day period beginning 
                        on the date of the filing of a request for 
                        expedited relief; or
                          ``(ii) the date the Agency denies the claim.
                  ``(D) Statute of limitations.--If an action described 
                under subparagraph (C) is not filed, or the motion to 
                renew a previously filed suit is not made, before the 
                end of the 30-day period beginning on the date on which 
                such action or motion may be filed under subparagraph 
                (B), the claim shall be deemed to be disallowed as of 
                the end of such period (other than any portion of such 
                claim which was allowed by the receiver), such 
                disallowance shall be final, and the claimant shall 
                have no further rights or remedies with respect to such 
                claim.
                  ``(E) Legal effect of filing.--
                          ``(i) Statute of limitation tolled.--For 
                        purposes of any applicable statute of 
                        limitations, the filing of a claim with the 
                        receiver shall constitute a commencement of an 
                        action.
                          ``(ii) No prejudice to other actions.--
                        Subject to paragraph (10), the filing of a 
                        claim with the receiver shall not prejudice any 
                        right of the claimant to continue any action 
                        that was filed before the appointment of the 
                        receiver, subject to the determination of 
                        claims by the receiver.
          ``(9) Payment of claims.--
                  ``(A) In general.--The receiver may, in the 
                discretion of the receiver, and to the extent funds are 
                available from the assets of the regulated entity, pay 
                creditor claims, in such manner and amounts as are 
                authorized under this section, which are--
                          ``(i) allowed by the receiver;
                          ``(ii) approved by the Agency pursuant to a 
                        final determination pursuant to paragraph (7) 
                        or (8); or
                          ``(iii) determined by the final judgment of 
                        any court of competent jurisdiction.
                  ``(B) Agreements against the interest of the 
                agency.--No agreement that tends to diminish or defeat 
                the interest of the Agency in any asset acquired by the 
                Agency as receiver under this section shall be valid 
                against the Agency unless such agreement is in writing, 
                and executed by an authorized official of the regulated 
                entity, except that such requirements for qualified 
                financial contracts shall be applied in a manner 
                consistent with reasonable business trading practices 
                in the financial contracts market.
                  ``(C) Payment of dividends on claims.--The receiver 
                may, in the sole discretion of the receiver, pay from 
                the assets of the regulated entity dividends on proved 
                claims at any time, and no liability shall attach to 
                the Agency, by reason of any such payment, for failure 
                to pay dividends to a claimant whose claim is not 
                proved at the time of any such payment.
                  ``(D) Rulemaking authority of the director.--The 
                Director may prescribe such rules, including 
                definitions of terms, as the Director deems appropriate 
                to establish a single uniform interest rate for, or to 
                make payments of post-insolvency interest to creditors 
                holding proven claims against the receivership estates 
                of regulated entities following satisfaction by the 
                receiver of the principal amount of all creditor 
                claims.
          ``(10) Suspension of legal actions.--
                  ``(A) In general.--After the appointment of a 
                conservator or receiver for a regulated entity, the 
                conservator or receiver may, in any judicial action or 
                proceeding to which such regulated entity is or becomes 
                a party, request a stay for a period not to exceed--
                          ``(i) 45 days, in the case of any 
                        conservator; and
                          ``(ii) 90 days, in the case of any receiver.
                  ``(B) Grant of stay by all courts required.--Upon 
                receipt of a request by any conservator or receiver 
                under subparagraph (A) for a stay of any judicial 
                action or proceeding in any court with jurisdiction of 
                such action or proceeding, the court shall grant such 
                stay as to all parties.
          ``(11) Additional rights and duties.--
                  ``(A) Prior final adjudication.--The Agency shall 
                abide by any final unappealable judgment of any court 
                of competent jurisdiction which was rendered before the 
                appointment of the Agency as conservator or receiver.
                  ``(B) Rights and remedies of conservator or 
                receiver.--In the event of any appealable judgment, the 
                Agency as conservator or receiver shall--
                          ``(i) have all the rights and remedies 
                        available to the regulated entity (before the 
                        appointment of such conservator or receiver) 
                        and the Agency, including removal to Federal 
                        court and all appellate rights; and
                          ``(ii) not be required to post any bond in 
                        order to pursue such remedies.
                  ``(C) No attachment or execution.--No attachment or 
                execution may issue by any court upon assets in the 
                possession of the receiver.
                  ``(D) Limitation on judicial review.--Except as 
                otherwise provided in this subsection, no court shall 
                have jurisdiction over--
                          ``(i) any claim or action for payment from, 
                        or any action seeking a determination of rights 
                        with respect to, the assets of any regulated 
                        entity for which the Agency has been appointed 
                        receiver; or
                          ``(ii) any claim relating to any act or 
                        omission of such regulated entity or the Agency 
                        as receiver.
                  ``(E) Disposition of assets.--In exercising any 
                right, power, privilege, or authority as conservator or 
                receiver in connection with any sale or disposition of 
                assets of a regulated entity for which the Agency has 
                been appointed conservator or receiver, the Agency 
                shall conduct its operations in a manner which 
                maintains stability in the housing finance markets and, 
                to the extent consistent with that goal--
                          ``(i) maximizes the net present value return 
                        from the sale or disposition of such assets;
                          ``(ii) minimizes the amount of any loss 
                        realized in the resolution of cases; and
                          ``(iii) ensures adequate competition and fair 
                        and consistent treatment of offerors.
          ``(12) Statute of limitations for actions brought by 
        conservator or receiver.--
                  ``(A) In general.--Notwithstanding any provision of 
                any contract, the applicable statute of limitations 
                with regard to any action brought by the Agency as 
                conservator or receiver shall be--
                          ``(i) in the case of any contract claim, the 
                        longer of--
                                  ``(I) the 6-year period beginning on 
                                the date the claim accrues; or
                                  ``(II) the period applicable under 
                                State law; and
                          ``(ii) in the case of any tort claim, the 
                        longer of--
                                  ``(I) the 3-year period beginning on 
                                the date the claim accrues; or
                                  ``(II) the period applicable under 
                                State law.
                  ``(B) Determination of the date on which a claim 
                accrues.--For purposes of subparagraph (A), the date on 
                which the statute of limitations begins to run on any 
                claim described in such subparagraph shall be the later 
                of--
                          ``(i) the date of the appointment of the 
                        Agency as conservator or receiver; or
                          ``(ii) the date on which the cause of action 
                        accrues.
          ``(13) Revival of expired state causes of action.--
                  ``(A) In general.--In the case of any tort claim 
                described under subparagraph (B) for which the statute 
                of limitations applicable under State law with respect 
                to such claim has expired not more than 5 years before 
                the appointment of the Agency as conservator or 
                receiver, the Agency may bring an action as conservator 
                or receiver on such claim without regard to the 
                expiration of the statute of limitation applicable 
                under State law.
                  ``(B) Claims described.--A tort claim referred to 
                under subparagraph (A) is a claim arising from fraud, 
                intentional misconduct resulting in unjust enrichment, 
                or intentional misconduct resulting in substantial loss 
                to the regulated entity.
          ``(14) Accounting and recordkeeping requirements.--
                  ``(A) In general.--The Agency as conservator or 
                receiver shall, consistent with the accounting and 
                reporting practices and procedures established by the 
                Agency, maintain a full accounting of each 
                conservatorship and receivership or other disposition 
                of a regulated entity in default.
                  ``(B) Annual accounting or report.--With respect to 
                each conservatorship or receivership, the Agency shall 
                make an annual accounting or report available to the 
                Board, the Comptroller General of the United States, 
                the Committee on Banking, Housing, and Urban Affairs of 
                the Senate, and the Committee on Financial Services of 
                the House of Representatives.
                  ``(C) Availability of reports.--Any report prepared 
                under subparagraph (B) shall be made available by the 
                Agency upon request to any shareholder of a regulated 
                entity or any member of the public.
                  ``(D) Recordkeeping requirement.--After the end of 
                the 6-year period beginning on the date that the 
                conservatorship or receivership is terminated by the 
                Director, the Agency may destroy any records of such 
                regulated entity which the Agency, in the discretion of 
                the Agency, determines to be unnecessary unless 
                directed not to do so by a court of competent 
                jurisdiction or governmental agency, or prohibited by 
                law.
          ``(15) Fraudulent transfers.--
                  ``(A) In general.--The Agency, as conservator or 
                receiver, may avoid a transfer of any interest of a 
                regulated entity-affiliated party, or any person who 
                the conservator or receiver determines is a debtor of 
                the regulated entity, in property, or any obligation 
                incurred by such party or person, that was made within 
                5 years of the date on which the Agency was appointed 
                conservator or receiver, if such party or person 
                voluntarily or involuntarily made such transfer or 
                incurred such liability with the intent to hinder, 
                delay, or defraud the regulated entity, the Agency, the 
                conservator, or receiver.
                  ``(B) Right of recovery.--To the extent a transfer is 
                avoided under subparagraph (A), the conservator or 
                receiver may recover, for the benefit of the regulated 
                entity, the property transferred, or, if a court so 
                orders, the value of such property (at the time of such 
                transfer) from--
                          ``(i) the initial transferee of such transfer 
                        or the regulated entity-affiliated party or 
                        person for whose benefit such transfer was 
                        made; or
                          ``(ii) any immediate or mediate transferee of 
                        any such initial transferee.
                  ``(C) Rights of transferee or obligee.--The 
                conservator or receiver may not recover under 
                subparagraph (B) from--
                          ``(i) any transferee that takes for value, 
                        including satisfaction or securing of a present 
                        or antecedent debt, in good faith; or
                          ``(ii) any immediate or mediate good faith 
                        transferee of such transferee.
                  ``(D) Rights under this paragraph.--The rights under 
                this paragraph of the conservator or receiver described 
                under subparagraph (A) shall be superior to any rights 
                of a trustee or any other party (other than any party 
                which is a Federal agency) under title 11, United 
                States Code.
          ``(16) Attachment of assets and other injunctive relief.--
        Subject to paragraph (17), any court of competent jurisdiction 
        may, at the request of the conservator or receiver, issue an 
        order in accordance with Rule 65 of the Federal Rules of Civil 
        Procedure, including an order placing the assets of any person 
        designated by the Agency or such conservator under the control 
        of the court, and appointing a trustee to hold such assets.
          ``(17) Standards of proof.--Rule 65 of the Federal Rules of 
        Civil Procedure shall apply with respect to any proceeding 
        under paragraph (16) without regard to the requirement of such 
        rule that the applicant show that the injury, loss, or damage 
        is irreparable and immediate.
          ``(18) Treatment of claims arising from breach of contracts 
        executed by the receiver or conservator.--
                  ``(A) In general.--Notwithstanding any other 
                provision of this subsection, any final and 
                unappealable judgment for monetary damages entered 
                against a receiver or conservator for the breach of an 
                agreement executed or approved in writing by such 
                receiver or conservator after the date of its 
                appointment, shall be paid as an administrative expense 
                of the receiver or conservator.
                  ``(B) No limitation of power.--Nothing in this 
                paragraph shall be construed to limit the power of a 
                receiver or conservator to exercise any rights under 
                contract or law, including to terminate, breach, 
                cancel, or otherwise discontinue such agreement.
          ``(19) General exceptions.--
                  ``(A) Limitations.--The rights of a conservator or 
                receiver appointed under this section shall be subject 
                to the limitations on the powers of a receiver under 
                sections 402 through 407 of the Federal Deposit 
                Insurance Corporation Improvement Act of 1991 (12 
                U.S.C. 4402 through 4407).
                  ``(B) Mortgages held in trust.--
                          ``(i) In general.--Any mortgage, pool of 
                        mortgages, or interest in a pool of mortgages, 
                        held in trust, custodial, or agency capacity by 
                        a regulated entity for the benefit of persons 
                        other than the regulated entity shall not be 
                        available to satisfy the claims of creditors 
                        generally.
                          ``(ii) Holding of mortgages.--Any mortgage, 
                        pool of mortgages, or interest in a pool of 
                        mortgages, described under clause (i) shall be 
                        held by the conservator or receiver appointed 
                        under this section for the beneficial owners of 
                        such mortgage, pool of mortgages, or interest 
                        in a pool of mortgages in accordance with the 
                        terms of the agreement creating such trust, 
                        custodial, or other agency arrangement.
                          ``(iii) Liability of receiver.--The liability 
                        of a receiver appointed under this section for 
                        damages shall, in the case of any contingent or 
                        unliquidated claim relating to the mortgages 
                        held in trust, be estimated in accordance set 
                        forth in the regulations of the Director.
  ``(c) Priority of Expenses and Unsecured Claims.--
          ``(1) In general.--Unsecured claims against a regulated 
        entity, or a receiver, that are proven to the satisfaction of 
        the receiver shall have priority in the following order:
                  ``(A) Administrative expenses of the receiver.
                  ``(B) Any other general or senior liability of the 
                regulated entity and claims of other Federal home loan 
                banks arising from their payment obligations (including 
                joint and several payment obligations).
                  ``(C) Any obligation subordinated to general 
                creditors.
                  ``(D) Any obligation to shareholders or members 
                arising as a result of their status as shareholder or 
                members.
          ``(2) Creditors similarly situated.--All creditors that are 
        similarly situated under paragraph (1) shall be treated in a 
        similar manner, except that the Agency may make such other 
        payments to creditors necessary to maximize the present value 
        return from the sale or disposition or such regulated entity's 
        assets or to minimize the amount of any loss realized in the 
        resolution of cases so long as all creditors similarly situated 
        receive not less than the amount provided under subsection 
        (e)(2).
          ``(3) Definition.--The term `administrative expenses of the 
        receiver' shall include the actual, necessary costs and 
        expenses incurred by the receiver in preserving the assets of 
        the regulated entity or liquidating or otherwise resolving the 
        affairs of the regulated entity. Such expenses shall include 
        obligations that are incurred by the receiver after appointment 
        as receiver that the Director determines are necessary and 
        appropriate to facilitate the smooth and orderly liquidation or 
        other resolution of the regulated entity.
  ``(d) Provisions Relating to Contracts Entered Into Before 
Appointment of Conservator or Receiver.--
          ``(1) Authority to repudiate contracts.--In addition to any 
        other rights a conservator or receiver may have, the 
        conservator or receiver for any regulated entity may disaffirm 
        or repudiate any contract or lease--
                  ``(A) to which such regulated entity is a party;
                  ``(B) the performance of which the conservator or 
                receiver, in its sole discretion, determines to be 
                burdensome; and
                  ``(C) the disaffirmance or repudiation of which the 
                conservator or receiver determines, in its sole 
                discretion, will promote the orderly administration of 
                the affairs of the regulated entity.
          ``(2) Timing of repudiation.--The conservator or receiver 
        shall determine whether or not to exercise the rights of 
        repudiation under this subsection within a reasonable period 
        following such appointment.
          ``(3) Claims for damages for repudiation.--
                  ``(A) In general.--Except as otherwise provided under 
                subparagraph (C) and paragraphs (4), (5), and (6), the 
                liability of the conservator or receiver for the 
                disaffirmance or repudiation of any contract pursuant 
                to paragraph (1) shall be--
                          ``(i) limited to actual direct compensatory 
                        damages; and
                          ``(ii) determined as of--
                                  ``(I) the date of the appointment of 
                                the conservator or receiver; or
                                  ``(II) in the case of any contract or 
                                agreement referred to in paragraph (8), 
                                the date of the disaffirmance or 
                                repudiation of such contract or 
                                agreement.
                  ``(B) No liability for other damages.--For purposes 
                of subparagraph (A), the term `actual direct 
                compensatory damages' shall not include--
                          ``(i) punitive or exemplary damages;
                          ``(ii) damages for lost profits or 
                        opportunity; or
                          ``(iii) damages for pain and suffering.
                  ``(C) Measure of damages for repudiation of financial 
                contracts.--In the case of any qualified financial 
                contract or agreement to which paragraph (8) applies, 
                compensatory damages shall be--
                          ``(i) deemed to include normal and reasonable 
                        costs of cover or other reasonable measures of 
                        damages utilized in the industries for such 
                        contract and agreement claims; and
                          ``(ii) paid in accordance with this 
                        subsection and subsection (e), except as 
                        otherwise specifically provided in this 
                        section.
          ``(4) Leases under which the regulated entity is the 
        lessee.--
                  ``(A) In general.--If the conservator or receiver 
                disaffirms or repudiates a lease under which the 
                regulated entity was the lessee, the conservator or 
                receiver shall not be liable for any damages (other 
                than damages determined under subparagraph (B)) for the 
                disaffirmance or repudiation of such lease.
                  ``(B) Payments of rent.--Notwithstanding subparagraph 
                (A), the lessor under a lease to which that 
                subparagraph applies shall--
                          ``(i) be entitled to the contractual rent 
                        accruing before the later of the date--
                                  ``(I) the notice of disaffirmance or 
                                repudiation is mailed; or
                                  ``(II) the disaffirmance or 
                                repudiation becomes effective, unless 
                                the lessor is in default or breach of 
                                the terms of the lease;
                          ``(ii) have no claim for damages under any 
                        acceleration clause or other penalty provision 
                        in the lease; and
                          ``(iii) have a claim for any unpaid rent, 
                        subject to all appropriate offsets and 
                        defenses, due as of the date of the 
                        appointment, which shall be paid in accordance 
                        with this subsection and subsection (e).
          ``(5) Leases under which the regulated entity is the 
        lessor.--
                  ``(A) In general.--If the conservator or receiver 
                repudiates an unexpired written lease of real property 
                of the regulated entity under which the regulated 
                entity is the lessor and the lessee is not, as of the 
                date of such repudiation, in default, the lessee under 
                such lease may either--
                          ``(i) treat the lease as terminated by such 
                        repudiation; or
                          ``(ii) remain in possession of the leasehold 
                        interest for the balance of the term of the 
                        lease, unless the lessee defaults under the 
                        terms of the lease after the date of such 
                        repudiation.
                  ``(B) Provisions applicable to lessee remaining in 
                possession.--If any lessee under a lease described 
                under subparagraph (A) remains in possession of a 
                leasehold interest under clause (ii) of such 
                subparagraph--
                          ``(i) the lessee--
                                  ``(I) shall continue to pay the 
                                contractual rent pursuant to the terms 
                                of the lease after the date of the 
                                repudiation of such lease; and
                                  ``(II) may offset against any rent 
                                payment which accrues after the date of 
                                the repudiation of the lease, and any 
                                damages which accrue after such date 
                                due to the nonperformance of any 
                                obligation of the regulated entity 
                                under the lease after such date; and
                          ``(ii) the conservator or receiver shall not 
                        be liable to the lessee for any damages arising 
                        after such date as a result of the repudiation 
                        other than the amount of any offset allowed 
                        under clause (i)(II).
          ``(6) Contracts for the sale of real property.--
                  ``(A) In general.--If the conservator or receiver 
                repudiates any contract for the sale of real property 
                and the purchaser of such real property under such 
                contract is in possession, and is not, as of the date 
                of such repudiation, in default, such purchaser may 
                either--
                          ``(i) treat the contract as terminated by 
                        such repudiation; or
                          ``(ii) remain in possession of such real 
                        property.
                  ``(B) Provisions applicable to purchaser remaining in 
                possession.--If any purchaser of real property under 
                any contract described under subparagraph (A) remains 
                in possession of such property under clause (ii) of 
                such subparagraph--
                          ``(i) the purchaser--
                                  ``(I) shall continue to make all 
                                payments due under the contract after 
                                the date of the repudiation of the 
                                contract; and
                                  ``(II) may offset against any such 
                                payments any damages which accrue after 
                                such date due to the nonperformance 
                                (after such date) of any obligation of 
                                the regulated entity under the 
                                contract; and
                          ``(ii) the conservator or receiver shall--
                                  ``(I) not be liable to the purchaser 
                                for any damages arising after such date 
                                as a result of the repudiation other 
                                than the amount of any offset allowed 
                                under clause (i)(II);
                                  ``(II) deliver title to the purchaser 
                                in accordance with the provisions of 
                                the contract; and
                                  ``(III) have no obligation under the 
                                contract other than the performance 
                                required under subclause (II).
                  ``(C) Assignment and sale allowed.--
                          ``(i) In general.--No provision of this 
                        paragraph shall be construed as limiting the 
                        right of the conservator or receiver to assign 
                        the contract described under subparagraph (A), 
                        and sell the property subject to the contract 
                        and the provisions of this paragraph.
                          ``(ii) No liability after assignment and 
                        sale.--If an assignment and sale described 
                        under clause (i) is consummated, the 
                        conservator or receiver shall have no further 
                        liability under the contract described under 
                        subparagraph (A), or with respect to the real 
                        property which was the subject of such 
                        contract.
          ``(7) Provisions applicable to service contracts.--
                  ``(A) Services performed before appointment.--In the 
                case of any contract for services between any person 
                and any regulated entity for which the Agency has been 
                appointed conservator or receiver, any claim of such 
                person for services performed before the appointment of 
                the conservator or the receiver shall be--
                          ``(i) a claim to be paid in accordance with 
                        subsections (b) and (e); and
                          ``(ii) deemed to have arisen as of the date 
                        the conservator or receiver was appointed.
                  ``(B) Services performed after appointment and prior 
                to repudiation.--If, in the case of any contract for 
                services described under subparagraph (A), the 
                conservator or receiver accepts performance by the 
                other person before the conservator or receiver makes 
                any determination to exercise the right of repudiation 
                of such contract under this section--
                          ``(i) the other party shall be paid under the 
                        terms of the contract for the services 
                        performed; and
                          ``(ii) the amount of such payment shall be 
                        treated as an administrative expense of the 
                        conservatorship or receivership.
                  ``(C) Acceptance of performance no bar to subsequent 
                repudiation.--The acceptance by any conservator or 
                receiver of services referred to under subparagraph (B) 
                in connection with a contract described in such 
                subparagraph shall not affect the right of the 
                conservator or receiver to repudiate such contract 
                under this section at any time after such performance.
          ``(8) Certain qualified financial contracts.--
                  ``(A) Rights of parties to contracts.--Subject to 
                paragraphs (9) and (10) and notwithstanding any other 
                provision of this Act, any other Federal law, or the 
                law of any State, no person shall be stayed or 
                prohibited from exercising--
                          ``(i) any right such person has to cause the 
                        termination, liquidation, or acceleration of 
                        any qualified financial contract with a 
                        regulated entity that arises upon the 
                        appointment of the Agency as receiver for such 
                        regulated entity at any time after such 
                        appointment;
                          ``(ii) any right under any security agreement 
                        or arrangement or other credit enhancement 
                        relating to one or more qualified financial 
                        contracts described in clause (i); or
                          ``(iii) any right to offset or net out any 
                        termination value, payment amount, or other 
                        transfer obligation arising under or in 
                        connection with 1 or more contracts and 
                        agreements described in clause (i), including 
                        any master agreement for such contracts or 
                        agreements.
                  ``(B) Applicability of other provisions.--Paragraph 
                (10) of subsection (b) shall apply in the case of any 
                judicial action or proceeding brought against any 
                receiver referred to under subparagraph (A), or the 
                regulated entity for which such receiver was appointed, 
                by any party to a contract or agreement described under 
                subparagraph (A)(i) with such regulated entity.
                  ``(C) Certain transfers not avoidable.--
                          ``(i) In general.--Notwithstanding paragraph 
                        (11) or any other Federal or State laws 
                        relating to the avoidance of preferential or 
                        fraudulent transfers, the Agency, whether 
                        acting as such or as conservator or receiver of 
                        a regulated entity, may not avoid any transfer 
                        of money or other property in connection with 
                        any qualified financial contract with a 
                        regulated entity.
                          ``(ii) Exception for certain transfers.--
                        Clause (i) shall not apply to any transfer of 
                        money or other property in connection with any 
                        qualified financial contract with a regulated 
                        entity if the Agency determines that the 
                        transferee had actual intent to hinder, delay, 
                        or defraud such regulated entity, the creditors 
                        of such regulated entity, or any conservator or 
                        receiver appointed for such regulated entity.
                  ``(D) Certain contracts and agreements defined.--In 
                this subsection:
                          ``(i) Qualified financial contract.--The term 
                        `qualified financial contract' means any 
                        securities contract, commodity contract, 
                        forward contract, repurchase agreement, swap 
                        agreement, and any similar agreement that the 
                        Agency determines by regulation, resolution, or 
                        order to be a qualified financial contract for 
                        purposes of this paragraph.
                          ``(ii) Securities contract.--The term 
                        `securities contract'--
                                  ``(I) means a contract for the 
                                purchase, sale, or loan of a security, 
                                a certificate of deposit, a mortgage 
                                loan, or any interest in a mortgage 
                                loan, a group or index of securities, 
                                certificates of deposit, or mortgage 
                                loans or interests therein (including 
                                any interest therein or based on the 
                                value thereof) or any option on any of 
                                the foregoing, including any option to 
                                purchase or sell any such security, 
                                certificate of deposit, mortgage loan, 
                                interest, group or index, or option, 
                                and including any repurchase or reverse 
                                repurchase transaction on any such 
                                security, certificate of deposit, 
                                mortgage loan, interest, group or 
                                index, or option;
                                  ``(II) does not include any purchase, 
                                sale, or repurchase obligation under a 
                                participation in a commercial mortgage 
                                loan unless the Agency determines by 
                                regulation, resolution, or order to 
                                include any such agreement within the 
                                meaning of such term;
                                  ``(III) means any option entered into 
                                on a national securities exchange 
                                relating to foreign currencies;
                                  ``(IV) means the guarantee by or to 
                                any securities clearing agency of any 
                                settlement of cash, securities, 
                                certificates of deposit, mortgage loans 
                                or interests therein, group or index of 
                                securities, certificates of deposit, or 
                                mortgage loans or interests therein 
                                (including any interest therein or 
                                based on the value thereof) or option 
                                on any of the foregoing, including any 
                                option to purchase or sell any such 
                                security, certificate of deposit, 
                                mortgage loan, interest, group or 
                                index, or option;
                                  ``(V) means any margin loan;
                                  ``(VI) means any other agreement or 
                                transaction that is similar to any 
                                agreement or transaction referred to in 
                                this clause;
                                  ``(VII) means any combination of the 
                                agreements or transactions referred to 
                                in this clause;
                                  ``(VIII) means any option to enter 
                                into any agreement or transaction 
                                referred to in this clause;
                                  ``(IX) means a master agreement that 
                                provides for an agreement or 
                                transaction referred to in subclause 
                                (I), (III), (IV), (V), (VI), (VII), or 
                                (VIII), together with all supplements 
                                to any such master agreement, without 
                                regard to whether the master agreement 
                                provides for an agreement or 
                                transaction that is not a securities 
                                contract under this clause, except that 
                                the master agreement shall be 
                                considered to be a securities contract 
                                under this clause only with respect to 
                                each agreement or transaction under the 
                                master agreement that is referred to in 
                                subclause (I), (III), (IV), (V), (VI), 
                                (VII), or (VIII); and
                                  ``(X) means any security agreement or 
                                arrangement or other credit enhancement 
                                related to any agreement or transaction 
                                referred to in this clause, including 
                                any guarantee or reimbursement 
                                obligation in connection with any 
                                agreement or transaction referred to in 
                                this clause.
                          ``(iii) Commodity contract.--The term 
                        `commodity contract' means--
                                  ``(I) with respect to a futures 
                                commission merchant, a contract for the 
                                purchase or sale of a commodity for 
                                future delivery on, or subject to the 
                                rules of, a contract market or board of 
                                trade;
                                  ``(II) with respect to a foreign 
                                futures commission merchant, a foreign 
                                future;
                                  ``(III) with respect to a leverage 
                                transaction merchant, a leverage 
                                transaction;
                                  ``(IV) with respect to a clearing 
                                organization, a contract for the 
                                purchase or sale of a commodity for 
                                future delivery on, or subject to the 
                                rules of, a contract market or board of 
                                trade that is cleared by such clearing 
                                organization, or commodity option 
                                traded on, or subject to the rules of, 
                                a contract market or board of trade 
                                that is cleared by such clearing 
                                organization;
                                  ``(V) with respect to a commodity 
                                options dealer, a commodity option;
                                  ``(VI) any other agreement or 
                                transaction that is similar to any 
                                agreement or transaction referred to in 
                                this clause;
                                  ``(VII) any combination of the 
                                agreements or transactions referred to 
                                in this clause;
                                  ``(VIII) any option to enter into any 
                                agreement or transaction referred to in 
                                this clause;
                                  ``(IX) a master agreement that 
                                provides for an agreement or 
                                transaction referred to in subclause 
                                (I), (II), (III), (IV), (V), (VI), 
                                (VII), or (VIII), together with all 
                                supplements to any such master 
                                agreement, without regard to whether 
                                the master agreement provides for an 
                                agreement or transaction that is not a 
                                commodity contract under this clause, 
                                except that the master agreement shall 
                                be considered to be a commodity 
                                contract under this clause only with 
                                respect to each agreement or 
                                transaction under the master agreement 
                                that is referred to in subclause (I), 
                                (II), (III), (IV), (V), (VI), (VII), or 
                                (VIII); or
                                  ``(X) any security agreement or 
                                arrangement or other credit enhancement 
                                related to any agreement or transaction 
                                referred to in this clause, including 
                                any guarantee or reimbursement 
                                obligation in connection with any 
                                agreement or transaction referred to in 
                                this clause.
                          ``(iv) Forward contract.--The term `forward 
                        contract' means--
                                  ``(I) a contract (other than a 
                                commodity contract) for the purchase, 
                                sale, or transfer of a commodity or any 
                                similar good, article, service, right, 
                                or interest which is presently or in 
                                the future becomes the subject of 
                                dealing in the forward contract trade, 
                                or product or byproduct thereof, with a 
                                maturity date more than 2 days after 
                                the date the contract is entered into, 
                                including, a repurchase transaction, 
                                reverse repurchase transaction, 
                                consignment, lease, swap, hedge 
                                transaction, deposit, loan, option, 
                                allocated transaction, unallocated 
                                transaction, or any other similar 
                                agreement;
                                  ``(II) any combination of agreements 
                                or transactions referred to in 
                                subclauses (I) and (III);
                                  ``(III) any option to enter into any 
                                agreement or transaction referred to in 
                                subclause (I) or (II);
                                  ``(IV) a master agreement that 
                                provides for an agreement or 
                                transaction referred to in subclauses 
                                (I), (II), or (III), together with all 
                                supplements to any such master 
                                agreement, without regard to whether 
                                the master agreement provides for an 
                                agreement or transaction that is not a 
                                forward contract under this clause, 
                                except that the master agreement shall 
                                be considered to be a forward contract 
                                under this clause only with respect to 
                                each agreement or transaction under the 
                                master agreement that is referred to in 
                                subclause (I), (II), or (III); or
                                  ``(V) any security agreement or 
                                arrangement or other credit enhancement 
                                related to any agreement or transaction 
                                referred to in subclause (I), (II), 
                                (III), or (IV), including any guarantee 
                                or reimbursement obligation in 
                                connection with any agreement or 
                                transaction referred to in any such 
                                subclause.
                          ``(v) Repurchase agreement.--The term 
                        `repurchase agreement' (which definition also 
                        applies to a reverse repurchase agreement)--
                                  ``(I) means an agreement, including 
                                related terms, which provides for the 
                                transfer of one or more certificates of 
                                deposit, mortgage-related securities 
                                (as such term is defined in the 
                                Securities Exchange Act of 1934), 
                                mortgage loans, interests in mortgage-
                                related securities or mortgage loans, 
                                eligible bankers' acceptances, 
                                qualified foreign government securities 
                                or securities that are direct 
                                obligations of, or that are fully 
                                guaranteed by, the United States or any 
                                agency of the United States against the 
                                transfer of funds by the transferee of 
                                such certificates of deposit, eligible 
                                bankers' acceptances, securities, 
                                mortgage loans, or interests with a 
                                simultaneous agreement by such 
                                transferee to transfer to the 
                                transferor thereof certificates of 
                                deposit, eligible bankers' acceptances, 
                                securities, mortgage loans, or 
                                interests as described above, at a date 
                                certain not later than 1 year after 
                                such transfers or on demand, against 
                                the transfer of funds, or any other 
                                similar agreement;
                                  ``(II) does not include any 
                                repurchase obligation under a 
                                participation in a commercial mortgage 
                                loan unless the Agency determines by 
                                regulation, resolution, or order to 
                                include any such participation within 
                                the meaning of such term;
                                  ``(III) means any combination of 
                                agreements or transactions referred to 
                                in subclauses (I) and (IV);
                                  ``(IV) means any option to enter into 
                                any agreement or transaction referred 
                                to in subclause (I) or (III);
                                  ``(V) means a master agreement that 
                                provides for an agreement or 
                                transaction referred to in subclause 
                                (I), (III), or (IV), together with all 
                                supplements to any such master 
                                agreement, without regard to whether 
                                the master agreement provides for an 
                                agreement or transaction that is not a 
                                repurchase agreement under this clause, 
                                except that the master agreement shall 
                                be considered to be a repurchase 
                                agreement under this subclause only 
                                with respect to each agreement or 
                                transaction under the master agreement 
                                that is referred to in subclause (I), 
                                (III), or (IV); and
                                  ``(VI) means any security agreement 
                                or arrangement or other credit 
                                enhancement related to any agreement or 
                                transaction referred to in subclause 
                                (I), (III), (IV), or (V), including any 
                                guarantee or reimbursement obligation 
                                in connection with any agreement or 
                                transaction referred to in any such 
                                subclause.
                        For purposes of this clause, the term 
                        `qualified foreign government security' means a 
                        security that is a direct obligation of, or 
                        that is fully guaranteed by, the central 
                        government of a member of the Organization for 
                        Economic Cooperation and Development (as 
                        determined by regulation or order adopted by 
                        the appropriate Federal banking authority).
                          ``(vi) Swap agreement.--The term `swap 
                        agreement' means--
                                  ``(I) any agreement, including the 
                                terms and conditions incorporated by 
                                reference in any such agreement, which 
                                is an interest rate swap, option, 
                                future, or forward agreement, including 
                                a rate floor, rate cap, rate collar, 
                                cross-currency rate swap, and basis 
                                swap; a spot, same day-tomorrow, 
                                tomorrow-next, forward, or other 
                                foreign exchange or precious metals 
                                agreement; a currency swap, option, 
                                future, or forward agreement; an equity 
                                index or equity swap, option, future, 
                                or forward agreement; a debt index or 
                                debt swap, option, future, or forward 
                                agreement; a total return, credit 
                                spread or credit swap, option, future, 
                                or forward agreement; a commodity index 
                                or commodity swap, option, future, or 
                                forward agreement; or a weather swap, 
                                weather derivative, or weather option;
                                  ``(II) any agreement or transaction 
                                that is similar to any other agreement 
                                or transaction referred to in this 
                                clause and that is of a type that has 
                                been, is presently, or in the future 
                                becomes, the subject of recurrent 
                                dealings in the swap markets (including 
                                terms and conditions incorporated by 
                                reference in such agreement) and that 
                                is a forward, swap, future, or option 
                                on one or more rates, currencies, 
                                commodities, equity securities or other 
                                equity instruments, debt securities or 
                                other debt instruments, quantitative 
                                measures associated with an occurrence, 
                                extent of an occurrence, or contingency 
                                associated with a financial, 
                                commercial, or economic consequence, or 
                                economic or financial indices or 
                                measures of economic or financial risk 
                                or value;
                                  ``(III) any combination of agreements 
                                or transactions referred to in this 
                                clause;
                                  ``(IV) any option to enter into any 
                                agreement or transaction referred to in 
                                this clause;
                                  ``(V) a master agreement that 
                                provides for an agreement or 
                                transaction referred to in subclause 
                                (I), (II), (III), or (IV), together 
                                with all supplements to any such master 
                                agreement, without regard to whether 
                                the master agreement contains an 
                                agreement or transaction that is not a 
                                swap agreement under this clause, 
                                except that the master agreement shall 
                                be considered to be a swap agreement 
                                under this clause only with respect to 
                                each agreement or transaction under the 
                                master agreement that is referred to in 
                                subclause (I), (II), (III), or (IV); 
                                and
                                  ``(VI) any security agreement or 
                                arrangement or other credit enhancement 
                                related to any agreements or 
                                transactions referred to in subclause 
                                (I), (II), (III), (IV), or (V), 
                                including any guarantee or 
                                reimbursement obligation in connection 
                                with any agreement or transaction 
                                referred to in any such subclause.
                        Such term is applicable for purposes of this 
                        subsection only and shall not be construed or 
                        applied so as to challenge or affect the 
                        characterization, definition, or treatment of 
                        any swap agreement under any other statute, 
                        regulation, or rule, including the Securities 
                        Act of 1933, the Securities Exchange Act of 
                        1934, the Public Utility Holding Company Act of 
                        1935, the Trust Indenture Act of 1939, the 
                        Investment Company Act of 1940, the Investment 
                        Advisers Act of 1940, the Securities Investor 
                        Protection Act of 1970, the Commodity Exchange 
                        Act, the Gramm-Leach-Bliley Act, and the Legal 
                        Certainty for Bank Products Act of 2000.
                          ``(vii) Treatment of master agreement as one 
                        agreement.--Any master agreement for any 
                        contract or agreement described in any 
                        preceding clause of this subparagraph (or any 
                        master agreement for such master agreement or 
                        agreements), together with all supplements to 
                        such master agreement, shall be treated as a 
                        single agreement and a single qualified 
                        financial contract. If a master agreement 
                        contains provisions relating to agreements or 
                        transactions that are not themselves qualified 
                        financial contracts, the master agreement shall 
                        be deemed to be a qualified financial contract 
                        only with respect to those transactions that 
                        are themselves qualified financial contracts.
                          ``(viii) Transfer.--The term `transfer' means 
                        every mode, direct or indirect, absolute or 
                        conditional, voluntary or involuntary, of 
                        disposing of or parting with property or with 
                        an interest in property, including retention of 
                        title as a security interest and foreclosure of 
                        the regulated entity's equity of redemption.
                  ``(E) Certain protections in event of appointment of 
                conservator.--Notwithstanding any other provision of 
                this Act (other than paragraph (13) of this 
                subsection), any other Federal law, or the law of any 
                State, no person shall be stayed or prohibited from 
                exercising--
                          ``(i) any right such person has to cause the 
                        termination, liquidation, or acceleration of 
                        any qualified financial contract with a 
                        regulated entity in a conservatorship based 
                        upon a default under such financial contract 
                        which is enforceable under applicable 
                        noninsolvency law;
                          ``(ii) any right under any security agreement 
                        or arrangement or other credit enhancement 
                        relating to one or more such qualified 
                        financial contracts; or
                          ``(iii) any right to offset or net out any 
                        termination values, payment amounts, or other 
                        transfer obligations arising under or in 
                        connection with such qualified financial 
                        contracts.
                  ``(F) Clarification.--No provision of law shall be 
                construed as limiting the right or power of the Agency, 
                or authorizing any court or agency to limit or delay, 
                in any manner, the right or power of the Agency to 
                transfer any qualified financial contract in accordance 
                with paragraphs (9) and (10) of this subsection or to 
                disaffirm or repudiate any such contract in accordance 
                with subsection (d)(1) of this section.
                  ``(G) Walkaway clauses not effective.--
                          ``(i) In general.--Notwithstanding the 
                        provisions of subparagraphs (A) and (E), and 
                        sections 403 and 404 of the Federal Deposit 
                        Insurance Corporation Improvement Act of 1991, 
                        no walkaway clause shall be enforceable in a 
                        qualified financial contract of a regulated 
                        entity in default.
                          ``(ii) Walkaway clause defined.--For purposes 
                        of this subparagraph, the term `walkaway 
                        clause' means a provision in a qualified 
                        financial contract that, after calculation of a 
                        value of a party's position or an amount due to 
                        or from 1 of the parties in accordance with its 
                        terms upon termination, liquidation, or 
                        acceleration of the qualified financial 
                        contract, either does not create a payment 
                        obligation of a party or extinguishes a payment 
                        obligation of a party in whole or in part 
                        solely because of such party's status as a 
                        nondefaulting party.
          ``(9) Transfer of qualified financial contracts.--In making 
        any transfer of assets or liabilities of a regulated entity in 
        default which includes any qualified financial contract, the 
        conservator or receiver for such regulated entity shall 
        either--
                  ``(A) transfer to 1 person--
                          ``(i) all qualified financial contracts 
                        between any person (or any affiliate of such 
                        person) and the regulated entity in default;
                          ``(ii) all claims of such person (or any 
                        affiliate of such person) against such 
                        regulated entity under any such contract (other 
                        than any claim which, under the terms of any 
                        such contract, is subordinated to the claims of 
                        general unsecured creditors of such regulated 
                        entity);
                          ``(iii) all claims of such regulated entity 
                        against such person (or any affiliate of such 
                        person) under any such contract; and
                          ``(iv) all property securing or any other 
                        credit enhancement for any contract described 
                        in clause (i) or any claim described in clause 
                        (ii) or (iii) under any such contract; or
                  ``(B) transfer none of the financial contracts, 
                claims, or property referred to under subparagraph (A) 
                (with respect to such person and any affiliate of such 
                person).
          ``(10) Notification of transfer.--
                  ``(A) In general.--If--
                          ``(i) the conservator or receiver for a 
                        regulated entity in default makes any transfer 
                        of the assets and liabilities of such regulated 
                        entity, and
                          ``(ii) the transfer includes any qualified 
                        financial contract,
                the conservator or receiver shall notify any person who 
                is a party to any such contract of such transfer by 
                5:00 p.m. (eastern time) on the business day following 
                the date of the appointment of the receiver in the case 
                of a receivership, or the business day following such 
                transfer in the case of a conservatorship.
                  ``(B) Certain rights not enforceable.--
                          ``(i) Receivership.--A person who is a party 
                        to a qualified financial contract with a 
                        regulated entity may not exercise any right 
                        that such person has to terminate, liquidate, 
                        or net such contract under paragraph (8)(A) of 
                        this subsection or section 403 or 404 of the 
                        Federal Deposit Insurance Corporation 
                        Improvement Act of 1991, solely by reason of or 
                        incidental to the appointment of a receiver for 
                        the regulated entity (or the insolvency or 
                        financial condition of the regulated entity for 
                        which the receiver has been appointed)--
                                  ``(I) until 5:00 p.m. (eastern time) 
                                on the business day following the date 
                                of the appointment of the receiver; or
                                  ``(II) after the person has received 
                                notice that the contract has been 
                                transferred pursuant to paragraph 
                                (9)(A).
                          ``(ii) Conservatorship.--A person who is a 
                        party to a qualified financial contract with a 
                        regulated entity may not exercise any right 
                        that such person has to terminate, liquidate, 
                        or net such contract under paragraph (8)(E) of 
                        this subsection or section 403 or 404 of the 
                        Federal Deposit Insurance Corporation 
                        Improvement Act of 1991, solely by reason of or 
                        incidental to the appointment of a conservator 
                        for the regulated entity (or the insolvency or 
                        financial condition of the regulated entity for 
                        which the conservator has been appointed).
                          ``(iii) Notice.--For purposes of this 
                        paragraph, the Agency as receiver or 
                        conservator of a regulated entity shall be 
                        deemed to have notified a person who is a party 
                        to a qualified financial contract with such 
                        regulated entity if the Agency has taken steps 
                        reasonably calculated to provide notice to such 
                        person by the time specified in subparagraph 
                        (A).
                  ``(C) Business day defined.--For purposes of this 
                paragraph, the term `business day' means any day other 
                than any Saturday, Sunday, or any day on which either 
                the New York Stock Exchange or the Federal Reserve Bank 
                of New York is closed.
          ``(11) Disaffirmance or repudiation of qualified financial 
        contracts.--In exercising the rights of disaffirmance or 
        repudiation of a conservator or receiver with respect to any 
        qualified financial contract to which a regulated entity is a 
        party, the conservator or receiver for such institution shall 
        either--
                  ``(A) disaffirm or repudiate all qualified financial 
                contracts between--
                          ``(i) any person or any affiliate of such 
                        person; and
                          ``(ii) the regulated entity in default; or
                  ``(B) disaffirm or repudiate none of the qualified 
                financial contracts referred to in subparagraph (A) 
                (with respect to such person or any affiliate of such 
                person).
          ``(12) Certain security interests not avoidable.--No 
        provision of this subsection shall be construed as permitting 
        the avoidance of any legally enforceable or perfected security 
        interest in any of the assets of any regulated entity, except 
        where such an interest is taken in contemplation of the 
        insolvency of the regulated entity, or with the intent to 
        hinder, delay, or defraud the regulated entity or the creditors 
        of such regulated entity.
          ``(13) Authority to enforce contracts.--
                  ``(A) In general.--Notwithstanding any provision of a 
                contract providing for termination, default, 
                acceleration, or exercise of rights upon, or solely by 
                reason of, insolvency or the appointment of a 
                conservator or receiver, the conservator or receiver 
                may enforce any contract or regulated entity bond 
                entered into by the regulated entity.
                  ``(B) Certain rights not affected.--No provision of 
                this paragraph may be construed as impairing or 
                affecting any right of the conservator or receiver to 
                enforce or recover under a director's or officer's 
                liability insurance contract or surety bond under other 
                applicable law.
                  ``(C) Consent requirement.--
                          ``(i) In general.--Except as otherwise 
                        provided under this section, no person may 
                        exercise any right or power to terminate, 
                        accelerate, or declare a default under any 
                        contract to which a regulated entity is a 
                        party, or to obtain possession of or exercise 
                        control over any property of the regulated 
                        entity, or affect any contractual rights of the 
                        regulated entity, without the consent of the 
                        conservator or receiver, as appropriate, for a 
                        period of--
                                  ``(I) 45 days after the date of 
                                appointment of a conservator; or
                                  ``(II) 90 days after the date of 
                                appointment of a receiver.
                          ``(ii) Exceptions.--This paragraph shall--
                                  ``(I) not apply to a director's or 
                                officer's liability insurance contract;
                                  ``(II) not apply to the rights of 
                                parties to any qualified financial 
                                contracts under subsection (d)(8); and
                                  ``(III) not be construed as 
                                permitting the conservator or receiver 
                                to fail to comply with otherwise 
                                enforceable provisions of such 
                                contracts.
          ``(14) Savings clause.--The meanings of terms used in this 
        subsection are applicable for purposes of this subsection only, 
        and shall not be construed or applied so as to challenge or 
        affect the characterization, definition, or treatment of any 
        similar terms under any other statute, regulation, or rule, 
        including the Gramm-Leach-Bliley Act, the Legal Certainty for 
        Bank Products Act of 2000, the securities laws (as that term is 
        defined in section 3(a)(47) of the Securities Exchange Act of 
        1934), and the Commodity Exchange Act
          ``(15) Exception for federal reserve and federal home loan 
        banks.--No provision of this subsection shall apply with 
        respect to--
                  ``(A) any extension of credit from any Federal home 
                loan bank or Federal Reserve Bank to any regulated 
                entity; or
                  ``(B) any security interest in the assets of the 
                regulated entity securing any such extension of credit.
  ``(e) Valuation of Claims in Default.--
          ``(1) In general.--Notwithstanding any other provision of 
        Federal law or the law of any State, and regardless of the 
        method which the Agency determines to utilize with respect to a 
        regulated entity in default or in danger of default, including 
        transactions authorized under subsection (i), this subsection 
        shall govern the rights of the creditors of such regulated 
        entity.
          ``(2) Maximum liability.--The maximum liability of the 
        Agency, acting as receiver or in any other capacity, to any 
        person having a claim against the receiver or the regulated 
        entity for which such receiver is appointed shall equal the 
        lesser of--
                  ``(A) the amount such claimant would have received if 
                the Agency had liquidated the assets and liabilities of 
                such regulated entity without exercising the authority 
                of the Agency under subsection (i) of this section; or
                  ``(B) the amount of proceeds realized from the 
                performance of contracts or sale of the assets of the 
                regulated entity.
  ``(f) Limitation on Court Action.--Except as provided in this section 
or at the request of the Director, no court may take any action to 
restrain or affect the exercise of powers or functions of the Agency as 
a conservator or a receiver.
  ``(g) Liability of Directors and Officers.--
          ``(1) In general.--A director or officer of a regulated 
        entity may be held personally liable for monetary damages in 
        any civil action by, on behalf of, or at the request or 
        direction of the Agency, which action is prosecuted wholly or 
        partially for the benefit of the Agency--
                  ``(A) acting as conservator or receiver of such 
                regulated entity, or
                  ``(B) acting based upon a suit, claim, or cause of 
                action purchased from, assigned by, or otherwise 
                conveyed by such receiver or conservator,
        for gross negligence, including any similar conduct or conduct 
        that demonstrates a greater disregard of a duty of care (than 
        gross negligence) including intentional tortious conduct, as 
        such terms are defined and determined under applicable State 
        law.
          ``(2) No limitation.--Nothing in this paragraph shall impair 
        or affect any right of the Agency under other applicable law.
  ``(h) Damages.--In any proceeding related to any claim against a 
director, officer, employee, agent, attorney, accountant, appraiser, or 
any other party employed by or providing services to a regulated 
entity, recoverable damages determined to result from the improvident 
or otherwise improper use or investment of any assets of the regulated 
entity shall include principal losses and appropriate interest.
  ``(i) Limited-Life Regulated Entities.--
          ``(1) Organization.--
                  ``(A) Purpose.--If a regulated entity is in default, 
                or if the Agency anticipates that a regulated entity 
                will default, the Agency may organize a limited-life 
                regulated entity with those powers and attributes of 
                the regulated entity in default or in danger of default 
                that the Director determines necessary, subject to the 
                provisions of this subsection. The Director shall grant 
                a temporary charter to the limited-life regulated 
                entity, and the limited-life regulated entity shall 
                operate subject to that charter.
                  ``(B) Authorities.--Upon the creation of a limited-
                life regulated entity under subparagraph (A), the 
                limited-life regulated entity may--
                          ``(i) assume such liabilities of the 
                        regulated entity that is in default or in 
                        danger of default as the Agency may, in its 
                        discretion, determine to be appropriate, 
                        provided that the liabilities assumed shall not 
                        exceed the amount of assets of the limited-life 
                        regulated entity;
                          ``(ii) purchase such assets of the regulated 
                        entity that is in default, or in danger of 
                        default, as the Agency may, in its discretion, 
                        determine to be appropriate; and
                          ``(iii) perform any other temporary function 
                        which the Agency may, in its discretion, 
                        prescribe in accordance with this section.
          ``(2) Charter.--
                  ``(A) Conditions.--The Agency may grant a temporary 
                charter if the Agency determines that the continued 
                operation of the regulated entity in default or in 
                danger of default is in the best interest of the 
                national economy and the housing markets.
                  ``(B) Treatment as being in default for certain 
                purposes.--A limited-life regulated entity shall be 
                treated as a regulated entity in default at such times 
                and for such purposes as the Agency may, in its 
                discretion, determine.
                  ``(C) Management.--A limited-life regulated entity, 
                upon the granting of its charter, shall be under the 
                management of a board of directors consisting of not 
                fewer than 5 nor more than 10 members appointed by the 
                Agency.
                  ``(D) Bylaws.--The board of directors of a limited-
                life regulated entity shall adopt such bylaws as may be 
                approved by the Agency.
          ``(3) Capital stock.--No capital stock need be paid into a 
        limited-life regulated entity by the Agency.
          ``(4) Investments.--Funds of a limited-life regulated entity 
        shall be kept on hand in cash, invested in obligations of the 
        United States or obligations guaranteed as to principal and 
        interest by the United States, or deposited with the Agency, or 
        any Federal Reserve bank.
          ``(5) Exempt status.--Notwithstanding any other provision of 
        Federal or State law, the limited-life regulated entity, its 
        franchise, property, and income shall be exempt from all 
        taxation now or hereafter imposed by the United States, by any 
        territory, dependency, or possession thereof, or by any State, 
        county, municipality, or local taxing authority.
          ``(6) Winding up.--
                  ``(A) In general.--Subject to subparagraph (B), 
                unless Congress authorizes the sale of the capital 
                stock of the limited-life regulated entity, not later 
                than 2 years after the date of its organization, the 
                Agency shall wind up the affairs of the limited-life 
                regulated entity.
                  ``(B) Extension.--The Director may, in the discretion 
                of the Director, extend the status of the limited-life 
                regulated entity for 3 additional 1-year periods.
          ``(7) Transfer of assets and liabilities.--
                  ``(A) In general.--
                          ``(i) Transfer of assets and liabilities.--
                        The Agency, as receiver, may transfer any 
                        assets and liabilities of a regulated entity in 
                        default, or in danger of default, to the 
                        limited-life regulated entity in accordance 
                        with paragraph (1).
                          ``(ii) Subsequent transfers.--At any time 
                        after a charter is transferred to a limited-
                        life regulated entity, the Agency, as receiver, 
                        may transfer any assets and liabilities of such 
                        regulated entity in default, or in danger in 
                        default, as the Agency may, in its discretion, 
                        determine to be appropriate in accordance with 
                        paragraph (1).
                          ``(iii) Effective without approval.--The 
                        transfer of any assets or liabilities of a 
                        regulated entity in default, or in danger of 
                        default, transferred to a limited-life 
                        regulated entity shall be effective without any 
                        further approval under Federal or State law, 
                        assignment, or consent with respect thereto.
          ``(8) Proceeds.--To the extent that available proceeds from 
        the limited-life regulated entity exceed amounts required to 
        pay obligations, such proceeds may be paid to the regulated 
        entity in default, or in danger of default.
          ``(9) Powers.--
                  ``(A) In general.--Each limited-life regulated entity 
                created under this subsection shall have all corporate 
                powers of, and be subject to the same provisions of law 
                as, the regulated entity in default or in danger of 
                default to which it relates, except that--
                          ``(i) the Agency may--
                                  ``(I) remove the directors of a 
                                limited-life regulated entity; and
                                  ``(II) fix the compensation of 
                                members of the board of directors and 
                                senior management, as determined by the 
                                Agency in its discretion, of a limited-
                                life regulated entity;
                          ``(ii) the Agency may indemnify the 
                        representatives for purposes of paragraph 
                        (1)(B), and the directors, officers, employees, 
                        and agents of a limited-life regulated entity 
                        on such terms as the Agency determines to be 
                        appropriate; and
                          ``(iii) the board of directors of a limited-
                        life regulated entity--
                                  ``(I) shall elect a chairperson who 
                                may also serve in the position of chief 
                                executive officer, except that such 
                                person shall not serve either as 
                                chairperson or as chief executive 
                                officer without the prior approval of 
                                the Agency; and
                                  ``(II) may appoint a chief executive 
                                officer who is not also the 
                                chairperson, except that such person 
                                shall not serve as chief executive 
                                officer without the prior approval of 
                                the Agency.
                  ``(B) Stay of judicial action.--Any judicial action 
                to which a limited-life regulated entity becomes a 
                party by virtue of its acquisition of any assets or 
                assumption of any liabilities of a regulated entity in 
                default shall be stayed from further proceedings for a 
                period of up to 45 days at the request of the limited-
                life regulated entity. Such period may be modified upon 
                the consent of all parties.
          ``(10) Obtaining of credit and incurring of debt.--
                  ``(A) In general.--The limited-life regulated entity 
                may obtain unsecured credit and incur unsecured debt in 
                the ordinary course of business.
                  ``(B) Inability to obtain credit.--If the limited-
                life regulated entity is unable to obtain unsecured 
                credit the Director may authorize the obtaining of 
                credit or the incurring of debt--
                          ``(i) with priority over any or all 
                        administrative expenses;
                          ``(ii) secured by a lien on property that is 
                        not otherwise subject to a lien; or
                          ``(iii) secured by a junior lien on property 
                        that is subject to a lien.
                  ``(C) Limitations.--
                          ``(i) In general.--The Director, after notice 
                        and a hearing, may authorize the obtaining of 
                        credit or the incurring of debt secured by a 
                        senior or equal lien on property that is 
                        subject to a lien (other than mortgages that 
                        collateralize the mortgage-backed securities 
                        issued or guaranteed by the regulated entity) 
                        only if--
                                  ``(I) the limited-life regulated 
                                entity is unable to obtain such credit 
                                otherwise; and
                                  ``(II) there is adequate protection 
                                of the interest of the holder of the 
                                lien on the property which such senior 
                                or equal lien is proposed to be 
                                granted.
                          ``(ii) Burden of proof.--In any hearing under 
                        this subsection, the Director has the burden of 
                        proof on the issue of adequate protection.
                  ``(D) Affect on debts and liens.--The reversal or 
                modification on appeal of an authorization under this 
                paragraph to obtain credit or incur debt, or of a grant 
                under this section of a priority or a lien, does not 
                affect the validity of any debt so incurred, or any 
                priority or lien so granted, to an entity that extended 
                such credit in good faith, whether or not such entity 
                knew of the pendency of the appeal, unless such 
                authorization and the incurring of such debt, or the 
                granting of such priority or lien, were stayed pending 
                appeal.
          ``(11) Issuance of preferred debt.--A limited-life regulated 
        entity may, subject to the approval of the Director and subject 
        to such terms and conditions as the Director may prescribe, 
        issue notes, bonds, or other debt obligations of a class to 
        which all other debt obligations of the limited-life regulated 
        entity shall be subordinate in right and payment.
          ``(12) No federal status.--
                  ``(A) Agency status.--A limited-life regulated entity 
                is not an agency, establishment, or instrumentality of 
                the United States.
                  ``(B) Employee status.--Representatives for purposes 
                of paragraph (1)(B), interim directors, directors, 
                officers, employees, or agents of a limited-life 
                regulated entity are not, solely by virtue of service 
                in any such capacity, officers or employees of the 
                United States. Any employee of the Agency or of any 
                Federal instrumentality who serves at the request of 
                the Agency as a representative for purposes of 
                paragraph (1)(B), interim director, director, officer, 
                employee, or agent of a limited-life regulated entity 
                shall not--
                          ``(i) solely by virtue of service in any such 
                        capacity lose any existing status as an officer 
                        or employee of the United States for purposes 
                        of title 5, United States Code, or any other 
                        provision of law; or
                          ``(ii) receive any salary or benefits for 
                        service in any such capacity with respect to a 
                        limited-life regulated entity in addition to 
                        such salary or benefits as are obtained through 
                        employment with the Agency or such Federal 
                        instrumentality.
          ``(13) Additional powers.--In addition to any other powers 
        granted under this subsection, a limited-life regulated entity 
        may--
                  ``(A) extend a maturity date or change in an interest 
                rate or other term of outstanding securities;
                  ``(B) issue securities of the limited-life regulated 
                entity, for cash, for property, for existing 
                securities, or in exchange for claims or interests, or 
                for any other appropriate purposes; and
                  ``(C) take any other action not inconsistent with 
                this section.
  ``(j) Other Exemptions.--When acting as a receiver, the following 
provisions shall apply with respect to the Agency:
          ``(1) Exemption from taxation.--The Agency, including its 
        franchise, its capital, reserves, and surplus, and its income, 
        shall be exempt from all taxation imposed by any State, 
        country, municipality, or local taxing authority, except that 
        any real property of the Agency shall be subject to State, 
        territorial, county, municipal, or local taxation to the same 
        extent according to its value as other real property is taxed, 
        except that, notwithstanding the failure of any person to 
        challenge an assessment under State law of the value of such 
        property, and the tax thereon, shall be determined as of the 
        period for which such tax is imposed.
          ``(2) Exemption from attachment and liens.--No property of 
        the Agency shall be subject to levy, attachment, garnishment, 
        foreclosure, or sale without the consent of the Agency, nor 
        shall any involuntary lien attach to the property of the 
        Agency.
          ``(3) Exemption from penalties and fines.--The Agency shall 
        not be liable for any amounts in the nature of penalties or 
        fines, including those arising from the failure of any person 
        to pay any real property, personal property, probate, or 
        recording tax or any recording or filing fees when due.
  ``(k) Prohibition of Charter Revocation.--In no case may a receiver 
appointed pursuant to this section revoke, annul, or terminate the 
charter of a regulated entity.''.
  (b) Conforming Amendments.--Subtitle B of title XIII of the Housing 
and Community Development Act of 1992 is amended by striking sections 
1369 (12 U.S.C. 4619), 1369A (12 U.S.C. 4620), and 1369B (12 U.S.C. 
4621).

SEC. 145. CONFORMING AMENDMENTS.

  Title XIII of the Housing and Community Development Act of 1992, as 
amended by the preceding provisions of this Act, is further amended--
          (1) in sections 1365 (12 U.S.C. 4615) through 1369D (12 
        U.S.C. 4623), but not including section 1367 (12 U.S.C. 4617) 
        as added by section 144 of this Act--
                  (A) by striking ``An enterprise'' each place such 
                term appears and inserting ``A regulated entity'';
                  (B) by striking ``an enterprise'' each place such 
                term appears and inserting ``a regulated entity''; and
                  (C) by striking ``the enterprise'' each place such 
                term appears and inserting ``the regulated entity'';
          (2) in section 1366 (12 U.S.C. 4616)--
                  (A) in subsection (b)(7), by striking ``section 1369 
                (excluding subsection (a)(1) and (2))'' and inserting 
                ``section 1367''; and
                  (B) in subsection (d), by striking ``the 
                enterprises'' and inserting ``the regulated entities'';
          (3) in section 1368(d) (12 U.S.C. 4618(d)), by striking 
        ``Committee on Banking, Finance and Urban Affairs'' and 
        inserting ``Committee on Financial Services'';
          (4) in section 1369C(c) (12 U.S.C. 4622(c)), by striking 
        ``any enterprise'' and inserting ``any regulated entity''; and
          (5) in subsections (a) and (d) of section 1369D, by striking 
        ``section 1366 or 1367 or action under section 1369)'' each 
        place such phrase appears and inserting ``section 1367)''.

                    Subtitle D--Enforcement Actions

SEC. 161. CEASE-AND-DESIST PROCEEDINGS.

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

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

  Section 1372 of the Housing and Community Development Act of 1992 (12 
U.S.C. 4632) is amended--
          (1) by striking subsection (a) and inserting the following 
        new subsection:
  ``(a) Grounds for Issuance.--Whenever the Director determines that 
the violation or threatened violation or the unsafe or unsound practice 
or practices specified in the notice of charges served upon the 
regulated entity or any regulated entity-affiliated party pursuant to 
section 1371(a), or the continuation thereof, is likely to cause 
insolvency or significant dissipation of assets or earnings of the 
regulated entity, or is likely to weaken the condition of the regulated 
entity prior to the completion of the proceedings conducted pursuant to 
sections 1371 and 1373, the Director may issue a temporary order 
requiring the regulated entity or such party to cease and desist from 
any such violation or practice and to take affirmative action to 
prevent or remedy such insolvency, dissipation, condition, or prejudice 
pending completion of such proceedings. Such order may include any 
requirement authorized under section 1371(d).'';
          (2) in subsection (b), by striking ``enterprise, executive 
        officer, or director'' and inserting ``regulated entity or 
        regulated entity-affiliated party'';
          (3) in subsection (d)--
                  (A) by striking ``An enterprise, executive officer, 
                or director'' and inserting ``A regulated entity or 
                regulated entity-affiliated party''; and
                  (B) by striking ``the enterprise, executive officer, 
                or director'' and inserting ``the regulated entity or 
                regulated entity-affiliated party''; and
          (4) by striking subsection (e) and in inserting the following 
        new subsection:
  ``(e) Enforcement.--In the case of violation or threatened violation 
of, or failure to obey, a temporary cease-and-desist order issued 
pursuant to this section, the Director may apply to the United States 
District Court for the District of Columbia or the United States 
district court within the jurisdiction of which the headquarters of the 
regulated entity is located, for an injunction to enforce such order, 
and, if the court determines that there has been such violation or 
threatened violation or failure to obey, it shall be the duty of the 
court to issue such injunction.''.

SEC. 163. PREJUDGMENT ATTACHMENT.

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

``SEC. 1375A. PREJUDGMENT ATTACHMENT.

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

SEC. 164. ENFORCEMENT AND JURISDICTION.

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

SEC. 165. CIVIL MONEY PENALTIES.

  Section 1376 of the Housing and Community Development Act of 1992 (12 
U.S.C. 4636) is amended--
          (1) in subsection (a)--
                  (A) in the matter preceding paragraph (1), by 
                striking ``or any executive officer or'' and inserting 
                ``any executive officer of a regulated entity, any 
                regulated entity-affiliated party, or any''; and
                  (B) in paragraph (1)--
                          (i) by striking ``the Federal National 
                        Mortgage Association Charter Act, the Federal 
                        Home Loan Mortgage Corporation Act'' and 
                        inserting ``any provision of any of the 
                        authorizing statutes'';
                          (ii) by striking ``or Act'' and inserting 
                        ``or statute'';
                          (iii) by striking ``or subsection'' and 
                        inserting ``, subsection''; and
                          (iv) by inserting ``, or paragraph (5) or 
                        (12) of section 10(j) of the Federal Home Loan 
                        Bank Act'' before the semicolon at the end;
          (2) by striking subsection (b) and inserting the following 
        new subsection:
  ``(b) Amount of Penalty.--
          ``(1) First tier.--Any regulated entity which, or any 
        regulated entity-affiliated party who--
                  ``(A) violates any provision of this title, any 
                provision of any of the authorizing statutes, or any 
                order, condition, rule, or regulation under any such 
                title or statute, except that the Director may not, 
                pursuant to this section, enforce compliance with any 
                housing goal established under subpart B of part 2 of 
                subtitle A of this title, with section 1336 or 1337 of 
                this title, with subsection (m) or (n) of section 309 
                of the Federal National Mortgage Association Charter 
                Act (12 U.S.C. 1723a(m), (n)), with subsection (e) or 
                (f) of section 307 of the Federal Home Loan Mortgage 
                Corporation Act (12 U.S.C. 1456(e), (f)), or with 
                paragraph (5) or (12) of section 10(j) of the Federal 
                Home Loan Bank Act;
                  ``(B) violates any final or temporary order or notice 
                issued pursuant to this title;
                  ``(C) violates any condition imposed in writing by 
                the Director in connection with the grant of any 
                application or other request by such regulated entity;
                  ``(D) violates any written agreement between the 
                regulated entity and the Director; or
                  ``(E) engages in any conduct the Director determines 
                to be an unsafe or unsound practice, shall forfeit and 
                pay a civil penalty of not more than $10,000 for each 
                day during which such violation continues.
          ``(2) Second tier.--Notwithstanding paragraph (1)--
                  ``(A) if a regulated entity, or a regulated entity-
                affiliated party--
                          ``(i) commits any violation described in any 
                        subparagraph of paragraph (1);
                          ``(ii) recklessly engages in an unsafe or 
                        unsound practice in conducting the affairs of 
                        such regulated entity; or
                          ``(iii) breaches any fiduciary duty; and
                  ``(B) the violation, practice, or breach--
                          ``(i) is part of a pattern of misconduct;
                          ``(ii) causes or is likely to cause more than 
                        a minimal loss to such regulated entity; or
                          ``(iii) results in pecuniary gain or other 
                        benefit to such party, the regulated entity or 
                        regulated entity-affiliated party shall forfeit 
                        and pay a civil penalty of not more than 
                        $50,000 for each day during which such 
                        violation, practice, or breach continues.
          ``(3) Third tier.--Notwithstanding paragraphs (1) and (2), 
        any regulated entity which, or any regulated entity-affiliated 
        party who--
                  ``(A) knowingly--
                          ``(i) commits any violation or engages in any 
                        conduct described in any subparagraph of 
                        paragraph (1);
                          ``(ii) engages in any unsafe or unsound 
                        practice in conducting the affairs of such 
                        regulated entity; or
                          ``(iii) breaches any fiduciary duty; and
                  ``(B) knowingly or recklessly causes a substantial 
                loss to such regulated entity or a substantial 
                pecuniary gain or other benefit to such party by reason 
                of such violation, practice, or breach, shall forfeit 
                and pay a civil penalty in an amount not to exceed the 
                applicable maximum amount determined under paragraph 
                (4) for each day during which such violation, practice, 
                or breach continues.
          ``(4) Maximum amounts of penalties for any violation 
        described in paragraph (3).--The maximum daily amount of any 
        civil penalty which may be assessed pursuant to paragraph (3) 
        for any violation, practice, or breach described in such 
        paragraph is--
                  ``(A) in the case of any person other than a 
                regulated entity, an amount not to exceed $2,000,000; 
                and
                  ``(B) in the case of any regulated entity, 
                $2,000,000.'';
          (3) in subsection (c)(1)(B), by striking ``enterprise, 
        executive officer, or director'' and inserting ``regulated 
        entity or regulated entity-affiliated party'';
          (4) in subsection (d), by striking the first sentence and 
        inserting the following: ``If a regulated entity or regulated 
        entity-affiliated party fails to comply with an order of the 
        Director imposing a civil money penalty under this section, 
        after the order is no longer subject to review as provided 
        under subsection (c)(1) and section 1374, the Director may, in 
        the discretion of the Director, bring an action in the United 
        States District Court for the District of Columbia, or the 
        United States district court within the jurisdiction of which 
        the headquarters of the regulated entity is located, to obtain 
        a monetary judgment against the regulated entity or regulated 
        entity affiliated party and such other relief as may be 
        available, or request that the Attorney General of the United 
        States bring such an action.''; and
          (5) in subsection (g), by striking ``subsection (b)(3)'' and 
        inserting ``this section, unless authorized by the Director by 
        rule, regulation, or order''.

SEC. 166. REMOVAL AND PROHIBITION AUTHORITY.

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

``SEC. 1377. REMOVAL AND PROHIBITION AUTHORITY.

  ``(a) Authority to Issue Order.--Whenever the Director determines 
that--
          ``(1) any regulated entity-affiliated party has, directly or 
        indirectly--
                  ``(A) violated--
                          ``(i) any law or regulation;
                          ``(ii) any cease-and-desist order which has 
                        become final;
                          ``(iii) any condition imposed in writing by 
                        the Director in connection with the grant of 
                        any application or other request by such 
                        regulated entity; or
                          ``(iv) any written agreement between such 
                        regulated entity and the Director;
                  ``(B) engaged or participated in any unsafe or 
                unsound practice in connection with any regulated 
                entity; or
                  ``(C) committed or engaged in any act, omission, or 
                practice which constitutes a breach of such party's 
                fiduciary duty;
          ``(2) by reason of the violation, practice, or breach 
        described in any subparagraph of paragraph (1)--
                  ``(A) such regulated entity has suffered or will 
                probably suffer financial loss or other damage; or
                  ``(B) such party has received financial gain or other 
                benefit by reason of such violation, practice, or 
                breach; and
          ``(3) such violation, practice, or breach--
                  ``(A) involves personal dishonesty on the part of 
                such party; or
                  ``(B) demonstrates willful or continuing disregard by 
                such party for the safety or soundness of such 
                regulated entity, the Director may serve upon such 
                party a written notice of the Director's intention to 
                remove such party from office or to prohibit any 
                further participation by such party, in any manner, in 
                the conduct of the affairs of any regulated entity.
  ``(b) Suspension Order.--
          ``(1) Suspension or prohibition authority.--If the Director 
        serves written notice under subsection (a) to any regulated 
        entity-affiliated party of the Director's intention to issue an 
        order under such subsection, the Director may--
                  ``(A) suspend such party from office or prohibit such 
                party from further participation in any manner in the 
                conduct of the affairs of the regulated entity, if the 
                Director--
                          ``(i) determines that such action is 
                        necessary for the protection of the regulated 
                        entity; and
                          ``(ii) serves such party with written notice 
                        of the suspension order; and
                  ``(B) prohibit the regulated entity from releasing to 
                or on behalf of the regulated entity-affiliated party 
                any compensation or other payment of money or other 
                thing of current or potential value in connection with 
                any resignation, removal, retirement, or other 
                termination of employment or office of the party.
          ``(2) Effective period.--Any suspension order issued under 
        this subsection--
                  ``(A) shall become effective upon service; and
                  ``(B) unless a court issues a stay of such order 
                under subsection (g) of this section, shall remain in 
                effect and enforceable until--
                          ``(i) the date the Director dismisses the 
                        charges contained in the notice served under 
                        subsection (a) with respect to such party; or
                          ``(ii) the effective date of an order issued 
                        by the Director to such party under subsection 
                        (a).
          ``(3) Copy of order.--If the Director issues a suspension 
        order under this subsection to any regulated entity-affiliated 
        party, the Director shall serve a copy of such order on any 
        regulated entity with which such party is affiliated at the 
        time such order is issued.
  ``(c) Notice, Hearing, and Order.--A notice of intention to remove a 
regulated entity-affiliated party from office or to prohibit such party 
from participating in the conduct of the affairs of a regulated entity 
shall contain a statement of the facts constituting grounds for such 
action, and shall fix a time and place at which a hearing will be held 
on such action. Such hearing shall be fixed for a date not earlier than 
30 days nor later than 60 days after the date of service of such 
notice, unless an earlier or a later date is set by the Director at the 
request of (1) such party, and for good cause shown, or (2) the 
Attorney General of the United States. Unless such party shall appear 
at the hearing in person or by a duly authorized representative, such 
party shall be deemed to have consented to the issuance of an order of 
such removal or prohibition. In the event of such consent, or if upon 
the record made at any such hearing the Director shall find that any of 
the grounds specified in such notice have been established, the 
Director may issue such orders of suspension or removal from office, or 
prohibition from participation in the conduct of the affairs of the 
regulated entity, as it may deem appropriate, together with an order 
prohibiting compensation described in subsection (b)(1)(B). Any such 
order shall become effective at the expiration of 30 days after service 
upon such regulated entity and such party (except in the case of an 
order issued upon consent, which shall become effective at the time 
specified therein). Such order shall remain effective and enforceable 
except to such extent as it is stayed, modified, terminated, or set 
aside by action of the Director or a reviewing court.
  ``(d) Prohibition of Certain Specific Activities.--Any person subject 
to an order issued under this section shall not--
          ``(1) participate in any manner in the conduct of the affairs 
        of any regulated entity;
          ``(2) solicit, procure, transfer, attempt to transfer, vote, 
        or attempt to vote any proxy, consent, or authorization with 
        respect to any voting rights in any regulated entity;
          ``(3) violate any voting agreement previously approved by the 
        Director; or
          ``(4) vote for a director, or serve or act as a regulated 
        entity-affiliated party.
  ``(e) Industry-Wide Prohibition.--
          ``(1) In general.--Except as provided in paragraph (2), any 
        person who, pursuant to an order issued under this section, has 
        been removed or suspended from office in a regulated entity or 
        prohibited from participating in the conduct of the affairs of 
        a regulated entity may not, while such order is in effect, 
        continue or commence to hold any office in, or participate in 
        any manner in the conduct of the affairs of, any regulated 
        entity.
          ``(2) Exception if director provides written consent.--If, on 
        or after the date an order is issued under this section which 
        removes or suspends from office any regulated entity-affiliated 
        party or prohibits such party from participating in the conduct 
        of the affairs of a regulated entity, such party receives the 
        written consent of the Director, the order shall, to the extent 
        of such consent, cease to apply to such party with respect to 
        the regulated entity described in the written consent. If the 
        Director grants such a written consent, it shall publicly 
        disclose such consent.
          ``(3) Violation of paragraph (1) treated as violation of 
        order.--Any violation of paragraph (1) by any person who is 
        subject to an order described in such subsection shall be 
        treated as a violation of the order.
  ``(f) Applicability.--This section shall only apply to a person who 
is an individual, unless the Director specifically finds that it should 
apply to a corporation, firm, or other business enterprise.
  ``(g) Stay of Suspension and Prohibition of Regulated Entity-
Affiliated Party.--Within 10 days after any regulated entity-affiliated 
party has been suspended from office and/or prohibited from 
participation in the conduct of the affairs of a regulated entity under 
this section, such party may apply to the United States District Court 
for the District of Columbia, or the United States district court for 
the judicial district in which the headquarters of the regulated entity 
is located, for a stay of such suspension and/or prohibition and any 
prohibition under subsection (b)(1)(B) pending the completion of the 
administrative proceedings pursuant to the notice served upon such 
party under this section, and such court shall have jurisdiction to 
stay such suspension and/or prohibition.
  ``(h) Suspension or Removal of Regulated Entity-Affiliated Party 
Charged With Felony.--
          ``(1) Suspension or prohibition.--
                  ``(A) In general.--Whenever any regulated entity-
                affiliated party is charged in any information, 
                indictment, or complaint, with the commission of or 
                participation in a crime involving dishonesty or breach 
                of trust which is punishable by imprisonment for a term 
                exceeding one year under State or Federal law, the 
                Director may, if continued service or participation by 
                such party may pose a threat to the regulated entity or 
                impair public confidence in the regulated entity, by 
                written notice served upon such party--
                          ``(i) suspend such party from office or 
                        prohibit such party from further participation 
                        in any manner in the conduct of the affairs of 
                        any regulated entity; and
                          ``(ii) prohibit the regulated entity from 
                        releasing to or on behalf of the regulated 
                        entity-affiliated party any compensation or 
                        other payment of money or other thing of 
                        current or potential value in connection with 
                        the period of any such suspension or with any 
                        resignation, removal, retirement, or other 
                        termination of employment or office of the 
                        party.
                  ``(B) Provisions applicable to notice.--
                          ``(i) Copy.--A copy of any notice under 
                        paragraph (1)(A) shall also be served upon the 
                        regulated entity.
                          ``(ii) Effective period.--A suspension or 
                        prohibition under subparagraph (A) shall remain 
                        in effect until the information, indictment, or 
                        complaint referred to in such subparagraph is 
                        finally disposed of or until terminated by the 
                        Director.
          ``(2) Removal or prohibition.--
                  ``(A) In general.--If a judgment of conviction or an 
                agreement to enter a pretrial diversion or other 
                similar program is entered against a regulated entity-
                affiliated party in connection with a crime described 
                in paragraph (1)(A), at such time as such judgment is 
                not subject to further appellate review, the Director 
                may, if continued service or participation by such 
                party may pose a threat to the regulated entity or 
                impair public confidence in the regulated entity, issue 
                and serve upon such party an order that--
                          ``(i) removes such party from office or 
                        prohibits such party from further participation 
                        in any manner in the conduct of the affairs of 
                        the regulated entity without the prior written 
                        consent of the Director; and
                          ``(ii) prohibits the regulated entity from 
                        releasing to or on behalf of the regulated 
                        entity-affiliated party any compensation or 
                        other payment of money or other thing of 
                        current or potential value in connection with 
                        the termination of employment or office of the 
                        party.
                  ``(B) Provisions applicable to order.--
                          ``(i) Copy.--A copy of any order under 
                        paragraph (2)(A) shall also be served upon the 
                        regulated entity, whereupon the regulated 
                        entity-affiliated party who is subject to the 
                        order (if a director or an officer) shall cease 
                        to be a director or officer of such regulated 
                        entity.
                          ``(ii) Effect of acquittal.--A finding of not 
                        guilty or other disposition of the charge shall 
                        not preclude the Director from instituting 
                        proceedings after such finding or disposition 
                        to remove such party from office or to prohibit 
                        further participation in regulated entity 
                        affairs, and to prohibit compensation or other 
                        payment of money or other thing of current or 
                        potential value in connection with any 
                        resignation, removal, retirement, or other 
                        termination of employment or office of the 
                        party, pursuant to subsections (a), (d), or (e) 
                        of this section.
                          ``(iii) Effective period.--Any notice of 
                        suspension or order of removal issued under 
                        this subsection shall remain effective and 
                        outstanding until the completion of any hearing 
                        or appeal authorized under paragraph (4) unless 
                        terminated by the Director.
          ``(3) Authority of remaining board members.--If at any time, 
        because of the suspension of one or more directors pursuant to 
        this section, there shall be on the board of directors of a 
        regulated entity less than a quorum of directors not so 
        suspended, all powers and functions vested in or exercisable by 
        such board shall vest in and be exercisable by the director or 
        directors on the board not so suspended, until such time as 
        there shall be a quorum of the board of directors. In the event 
        all of the directors of a regulated entity are suspended 
        pursuant to this section, the Director shall appoint persons to 
        serve temporarily as directors in their place and stead pending 
        the termination of such suspensions, or until such time as 
        those who have been suspended cease to be directors of the 
        regulated entity and their respective successors take office.
          ``(4) Hearing regarding continued participation.--Within 30 
        days from service of any notice of suspension or order of 
        removal issued pursuant to paragraph (1) or (2) of this 
        subsection, the regulated entity-affiliated party concerned may 
        request in writing an opportunity to appear before the Director 
        to show that the continued service to or participation in the 
        conduct of the affairs of the regulated entity by such party 
        does not, or is not likely to, pose a threat to the interests 
        of the regulated entity or threaten to impair public confidence 
        in the regulated entity. Upon receipt of any such request, the 
        Director shall fix a time (not more than 30 days after receipt 
        of such request, unless extended at the request of such party) 
        and place at which such party may appear, personally or through 
        counsel, before one or more members of the Director or 
        designated employees of the Director to submit written 
        materials (or, at the discretion of the Director, oral 
        testimony) and oral argument. Within 60 days of such hearing, 
        the Director shall notify such party whether the suspension or 
        prohibition from participation in any manner in the conduct of 
        the affairs of the regulated entity will be continued, 
        terminated, or otherwise modified, or whether the order 
        removing such party from office or prohibiting such party from 
        further participation in any manner in the conduct of the 
        affairs of the regulated entity, and prohibiting compensation 
        in connection with termination will be rescinded or otherwise 
        modified. Such notification shall contain a statement of the 
        basis for the Director's decision, if adverse to such party. 
        The Director is authorized to prescribe such rules as may be 
        necessary to effectuate the purposes of this subsection.
  ``(i) Hearings and Judicial Review.--
          ``(1) Venue and procedure.--Any hearing provided for in this 
        section shall be held in the District of Columbia or in the 
        Federal judicial district in which the headquarters of the 
        regulated entity is located, unless the party afforded the 
        hearing consents to another place, and shall be conducted in 
        accordance with the provisions of chapter 5 of title 5, United 
        States Code. After such hearing, and within 90 days after the 
        Director has notified the parties that the case has been 
        submitted to it for final decision, it shall render its 
        decision (which shall include findings of fact upon which its 
        decision is predicated) and shall issue and serve upon each 
        party to the proceeding an order or orders consistent with the 
        provisions of this section. Judicial review of any such order 
        shall be exclusively as provided in this subsection. Unless a 
        petition for review is timely filed in a court of appeals of 
        the United States, as provided in paragraph (2), and thereafter 
        until the record in the proceeding has been filed as so 
        provided, the Director may at any time, upon such notice and in 
        such manner as it shall deem proper, modify, terminate, or set 
        aside any such order. Upon such filing of the record, the 
        Director may modify, terminate, or set aside any such order 
        with permission of the court.
          ``(2) Review of order.--Any party to any proceeding under 
        paragraph (1) may obtain a review of any order served pursuant 
        to paragraph (1) (other than an order issued with the consent 
        of the regulated entity or the regulated entity-affiliated 
        party concerned, or an order issued under subsection (h) of 
        this section) by the filing in the United States Court of 
        Appeals for the District of Columbia Circuit or court of 
        appeals of the United States for the circuit in which the 
        headquarters of the regulated entity is located, within 30 days 
        after the date of service of such order, a written petition 
        praying that the order of the Director be modified, terminated, 
        or set aside. A copy of such petition shall be forthwith 
        transmitted by the clerk of the court to the Director, and 
        thereupon the Director shall file in the court the record in 
        the proceeding, as provided in section 2112 of title 28, United 
        States Code. Upon the filing of such petition, such court shall 
        have jurisdiction, which upon the filing of the record shall 
        (except as provided in the last sentence of paragraph (1)) be 
        exclusive, to affirm, modify, terminate, or set aside, in whole 
        or in part, the order of the Director. Review of such 
        proceedings shall be had as provided in chapter 7 of title 5, 
        United States Code. The judgment and decree of the court shall 
        be final, except that the same shall be subject to review by 
        the Supreme Court upon certiorari, as provided in section 1254 
        of title 28, United States Code.
          ``(3) Proceedings not treated as stay.--The commencement of 
        proceedings for judicial review under paragraph (2) shall not, 
        unless specifically ordered by the court, operate as a stay of 
        any order issued by the Director.''.
  (b) Conforming Amendments.--
          (1) 1992 act.--Section 1317(f) of the Housing and Community 
        Development Act of 1992 (12 U.S.C. 4517(f)) is amended by 
        striking ``section 1379B'' and inserting ``section 1379D''.
          (2) Fannie mae charter act.--The second sentence of 
        subsection (b) of section 308 of the Federal National Mortgage 
        Association Charter Act (12 U.S.C. 1723(b)) is amended by 
        striking ``The'' and inserting ``Except to the extent that 
        action under section 1377 of the Housing and Community 
        Development Act of 1992 temporarily results in a lesser number, 
        the''.
          (3) Freddie mac act.--The second sentence of subparagraph (A) 
        of section 303(a)(2) of the Federal Home Loan Mortgage 
        Corporation Act (12 U.S.C. 1452(a)(2)(A)) is amended by 
        striking ``The'' and inserting ``Except to the extent that 
        action under section 1377 of the Housing and Community 
        Development Act of 1992 temporarily results in a lesser number, 
        the''.

SEC. 167. CRIMINAL PENALTY.

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

``SEC. 1378. CRIMINAL PENALTY.

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

SEC. 168. SUBPOENA AUTHORITY.

  Section 1379D(c) of the Housing and Community Development Act of 1992 
(12 U.S.C. 4641(c)), as so redesignated by section 165(a)(1) of this 
Act, is further amended--
          (1) by striking ``request the Attorney General of the United 
        States to'' and inserting ``, in the discretion of the 
        Director,'';
          (2) by inserting ``or request that the Attorney General of 
        the United States bring such an action,'' after ``District of 
        Columbia,''; and
          (3) by striking ``or may, under the direction and control of 
        the Attorney General, bring such an action''.

SEC. 169. CONFORMING AMENDMENTS.

  Subtitle C of title XIII of the Housing and Community Development Act 
of 1992 is amended--
          (1) in section 1372(c)(1) (12 U.S.C. 4632(c)), by striking 
        ``that enterprise'' and inserting ``that regulated entity'';
          (2) in section 1379 (12 U.S.C. 4637), as so redesignated by 
        section 165(a)(1) of this Act--
                  (A) by inserting ``, or of a regulated entity-
                affiliated party,'' before ``shall not affect''; and
                  (B) by striking ``such director or executive 
                officer'' each place such term appears and inserting 
                ``such director, executive officer, or regulated 
                entity-affiliated party'';
          (3) in section 1379A (12 U.S.C. 4638), as so redesignated by 
        section 165(a)(1) of this Act, by inserting ``or against a 
        regulated entity-affiliated party,'' before ``or impair'';
          (4) by striking ``An enterprise'' each place such term 
        appears in such subtitle and inserting ``A regulated entity'';
          (5) by striking ``an enterprise'' each place such term 
        appears in such subtitle and inserting ``a regulated entity'';
          (6) by striking ``the enterprise'' each place such term 
        appears in such subtitle and inserting ``the regulated 
        entity''; and
          (7) by striking ``any enterprise'' each place such term 
        appears in such subtitle and inserting ``any regulated 
        entity''.

                     Subtitle E--General Provisions

SEC. 181. PRESIDENTIALLY APPOINTED DIRECTORS OF ENTERPRISES.

  (a) Fannie Mae.--
          (1) In general.--Subsection (b) of section 308 of the Federal 
        National Mortgage Association Charter Act (12 U.S.C. 1723(b)) 
        is amended--
                  (A) in the first sentence, by striking ``eighteen 
                persons, five of whom shall be appointed annually by 
                the President of the United States, and the remainder 
                of whom'' and inserting ``not less than 7 and not more 
                than 15 persons, who'';
                  (B) in the second sentence, by striking ``appointed 
                by the President'';
                  (C) in the third sentence--
                          (i) by striking ``appointed or''; and
                          (ii) by striking ``, except that any such 
                        appointed member may be removed from office by 
                        the President for good cause'';
                  (D) in the fourth sentence, by striking ``elective''; 
                and
                  (E) by striking the fifth sentence.
          (2) Transitional provision.--The amendments made by paragraph 
        (1) shall not apply to any appointed position of the board of 
        directors of the Federal National Mortgage Association until 
        the expiration of the annual term for such position during 
        which the effective date under section 185 occurs.
  (b) Freddie Mac.--
          (1) In general.--Paragraph (2) of section 303(a) of the 
        Federal Home Loan Mortgage Corporation Act (12 U.S.C. 
        1452(a)(2)) is amended--
                  (A) in subparagraph (A)--
                          (i) in the first sentence, by striking ``18 
                        persons, 5 of whom shall be appointed annually 
                        by the President of the United States and the 
                        remainder of whom'' and inserting ``not less 
                        than 7 and not more than 15 persons, who''; and
                          (ii) in the second sentence, by striking 
                        ``appointed by the President of the United 
                        States'';
                  (B) in subparagraph (B)--
                          (i) by striking ``such or''; and
                          (ii) by striking ``, except that any 
                        appointed member may be removed from office by 
                        the President for good cause''; and
                  (C) in subparagraph (C)--
                          (i) by striking the first sentence; and
                          (ii) by striking ``elective''.
          (2) Transitional provision.--The amendments made by paragraph 
        (1) shall not apply to any appointed position of the Board of 
        Directors of the Federal Home Loan Mortgage Corporation until 
        the expiration of the annual term for such position during 
        which the effective date under section 185 occurs.

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

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

SEC. 183. CONFORMING AND TECHNICAL AMENDMENTS.

  (a) 1992 Act.--Title XIII of the Housing and Community Development 
Act of 1992 is amended by striking section 1383 (12 U.S.C. 1451 note).
  (b) Title 18, United States Code.--Section 1905 of title 18, United 
States Code, is amended by striking ``Office of Federal Housing 
Enterprise Oversight'' and inserting ``Federal Housing Finance Agency'' 

  (c) Flood Disaster Protection Act of 1973.--Section 102(f)(3)(A) of 
the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a(f)(3)(A)) is 
amended by striking ``Director of the Office of Federal Housing 
Enterprise Oversight of the Department of Housing and Urban 
Development'' and inserting ``Director of the Federal Housing Finance 
Agency''.
  (d) Department of Housing and Urban Development Act.--Section 5 of 
the Department of Housing and Urban Development Act (42 U.S.C. 3534) is 
amended by striking subsection (d).
  (e) Title 5, United States Code.--
          (1) Director's pay rate.--Section 5313 of title 5, United 
        States Code, is amended by striking the item relating to the 
        Director of the Office of Federal Housing Enterprise Oversight, 
        Department of Housing and Urban Development and inserting the 
        following new item:
  `` Director of the Federal Housing Finance Agency.''.
          (2) Deputy directors' pay rate.--Section 5314 of title 5, 
        United States Code, is amended by adding at the end the 
        following new item:
  `` Deputy Directors, Federal Housing Finance Agency (3).''.
          (3) Pay rate for members of housing finance oversight 
        board.--Section 5315 of title 5, United States Code, is amended 
        by adding at the end the following new item:
  `` Members, Housing Finance Oversight Board.''.
          (4) Exclusion from senior executive service.--Section 
        3132(a)(1)(D) of title 5, United States Code, is amended by 
        striking ``the Office of Federal Housing Enterprise Oversight 
        of the Department of Housing and Urban Development'' and 
        inserting ``the Federal Housing Finance Agency''.
  (f) Inspector General Act of 1978.--Section 8G(a)(2) of the Inspector 
General Act of 1978 (5 U.S.C. App.) is amended by striking ``Federal 
Housing Finance Board'' and inserting ``Federal Housing Finance 
Agency''.
  (g) Federal Deposit Insurance Act.--Section 11(t)(2)(A) of the 
Federal Deposit Insurance Act (12 U.S.C.1821(t)(2)(A)) is amended by 
adding at the end the following new clause:
                          ``(vii) The Federal Housing Finance 
                        Agency.''.
  (h) 1997 Emergency Supplemental Appropriations Act.--Section 10001 of 
the 1997 Emergency Supplemental Appropriations Act for Recovery From 
Natural Disasters, and for Overseas Peacekeeping Efforts, Including 
Those In Bosnia (42 U.S.C. 3548) is amended--
          (1) by striking ``the Government National Mortgage 
        Association, and the Office of Federal Housing Enterprise 
        Oversight'' and inserting ``and the Government National 
        Mortgage Association''; and
          (2) by striking ``, the Government National Mortgage 
        Association, or the Office of Federal Housing Enterprise 
        Oversight'' and inserting ``or the Government National Mortgage 
        Association''.
  (i) National Homeownership Trust Act .--Section 302(b)(4) of the 
Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 
12851(b)(4)) is amended by striking ``the chairperson of the Federal 
Housing Finance Board'' and inserting ``the Director of the Federal 
Housing Finance Agency''.

SEC. 184. STUDY OF ALTERNATIVE SECONDARY MARKET SYSTEMS.

  (a) In General.--The Director of the Federal Housing Finance Agency, 
in consultation with the Board of Governors of the Federal Reserve 
System, the Secretary of the Treasury, and the Secretary of Housing and 
Urban Development, shall conduct a comprehensive study of the effects 
on financial and housing finance markets of alternatives to the current 
secondary market system for housing finance, taking into consideration 
changes in the structure of financial and housing finance markets and 
institutions since the creation of the Federal National Mortgage 
Association and the Federal Home Loan Mortgage Corporation.
  (b) Contents.--The study under this section shall--
          (1) include, among the alternatives to the current secondary 
        market system analyzed--
                  (A) repeal of the chartering Acts for the Federal 
                National Mortgage Association and the Federal Home Loan 
                Mortgage Corporation;
                  (B) establishing bank-like mechanisms for granting 
                new charters for limited purposed mortgage 
                securitization entities;
                  (C) permitting the Director of the Federal Housing 
                Finance Agency to grant new charters for limited 
                purpose mortgage securitization entities, which shall 
                include analyzing the terms on which such charters 
                should be granted, including whether such charters 
                should be sold, or whether such charters and the 
                charters for the Federal National Mortgage Association 
                and the Federal Home Loan Mortgage Corporation should 
                be taxed or otherwise assessed a monetary price; and
                  (D) such other alternatives as the Director considers 
                appropriate;
          (2) examine all of the issues involved in making the 
        transition to a completely private secondary mortgage market 
        system;
          (3) examine the technological advancements the private sector 
        has made in providing liquidity in the secondary mortgage 
        market and how such advancements have affected liquidity in the 
        secondary mortgage market; and
          (4) examine how taxpayers would be impacted by each 
        alternative system, including the complete privatization of the 
        Federal National Mortgage Association and the Federal Home Loan 
        Mortgage Corporation.
  (c) Report.--The Director of the Federal Housing Finance Agency shall 
submit a report to the Congress on the study not later than the 
expiration of the 12-month period beginning on the effective date under 
section 185.

SEC. 185. EFFECTIVE DATE.

  Except as specifically provided otherwise in this title, the 
amendments made by this title shall take effect on, and shall apply 
beginning on, the expiration of the 1-year period beginning on the date 
of the enactment of this Act.

                   TITLE II--FEDERAL HOME LOAN BANKS

SEC. 201. DEFINITIONS.

  Section 2 of the Federal Home Loan Bank Act (12 U.S.C. 1422) is 
amended--
          (1) by striking paragraphs (1), (10), and (11);
          (2) by redesignating paragraphs (2) through (9) as paragraphs 
        (1) through (8), respectively;
          (3) by redesignating paragraphs (12) and (13) as paragraphs 
        (9) and (10), respectively; and
          (4) by adding at the end the following:
          ``(11) Director.--The term `Director' means the Director of 
        the Federal Housing Finance Agency.
          ``(12) Agency.--The term `Agency' means the Federal Housing 
        Finance Agency.''.

SEC. 202. DIRECTORS.

  (a) Election.--Section 7 of the Federal Home Loan Bank Act (12 U.S.C. 
1427) is amended--
          (1) by striking subsection (a) and inserting the following:
  ``(a) Number; Election; Qualifications; Conflicts of Interest.--
          ``(1) In general.--The management of each Federal Home Loan 
        Bank shall be vested in a board of 13 directors, or such other 
        number as the Director determines appropriate, each of whom 
        shall be elected by the members and shall be a citizen of the 
        United States.
          ``(2) Member directors.--A majority of the directors of each 
        Bank shall be officers or directors of a member of such Bank 
        that is located in the district in which such Bank is located.
          ``(3) Independent directors.--At least one-third of the 
        directors of each Bank shall be independent directors as 
        follows:
                  ``(A) In general.--Each independent director shall be 
                a bona fide resident of the district in which such Bank 
                is located.
                  ``(B) Public interest directors.--At least 2 of the 
                independent directors under this paragraph of each Bank 
                shall be representatives chosen from organizations with 
                more than a 2-year history of representing consumer or 
                community interests on banking services, credit needs, 
                housing, or financial consumer protections.
                  ``(C) Other directors.--Each independent director 
                that is not a public interest director under 
                subparagraph (B) shall have demonstrated knowledge of, 
                or experience in, financial management, auditing and 
                accounting, risk management practices, derivatives, 
                project development, or organizational management, or 
                such other knowledge or expertise as the Director may 
                provide by regulation.
                  ``(D) Conflicts of interest.--An independent director 
                under this paragraph of a Bank may not, during such 
                director's term of office, serve as an officer of any 
                Federal Home Loan Bank or as a director or officer of 
                any member of a Bank.'';
          (2) in subsection (b)--
                  (A) in the first sentence, by striking 
                ``directorship'' and inserting ``member directorship 
                pursuant to subsection (a)(2)'' ; and
                  (B) by inserting after the period at the end of the 
                first sentence the following new sentence: ``Each 
                independent directorship pursuant to subsection (a)(3) 
                shall be filled by election by a plurality of the votes 
                of the members of the Bank at large, in which election 
                each member shall be entitled to nominate candidates 
                and to cast the same number of votes as in an election 
                to fill a directorship allocated to the member's 
                State.'';
          (3) in subsection (c), by striking the second, third, and 
        fifth sentences;
          (4) in subsection (d)--
                  (A) in the first sentence, by striking ``, whether 
                elected or appointed,'';
                  (B) in the second sentence, by striking ``or 
                appointed''; and
                  (C) in the third sentence, by striking ``an 
                elective'' each place such term appears and inserting 
                ``a''; and
          (5) by striking ``elective'' each place such term appears 
        (except in subsection (e)).
  (b) Terms.--
          (1) In general.--Section 7(d) of the Federal Home Loan Bank 
        Act (12 U.S.C. 1427(i)) is amended--
                  (A) in the first sentence, by striking ``3 years'' 
                and inserting ``4 years''; and
                  (B) in the second sentence--
                          (i) by striking ``Federal Home Loan Bank 
                        System Modernization Act of 1999'' and 
                        inserting ``Federal Housing Finance Reform Act 
                        of 2005''; and
                          (ii) by striking ``1/3'' and inserting ``1/
                        4''.
          (2) Savings provision.--The amendments made by paragraph (1) 
        shall not apply to the term of office of any director of a 
        Federal home loan bank who is serving as of the effective date 
        of this Act under section 211, including any director elected 
        to fill a vacancy in any such office.
  (c) Vacancies.--Subsection (f) of section 7 of the Federal Home Loan 
Bank Act (12 U.S.C. 1427(f)) is amended to read as follows:
  ``(f) Vacancies.--A Bank director elected to fill a vacancy shall be 
elected for the unexpired term of his or her predecessor in office. In 
the event of a vacancy in any Bank directorship, such vacancy shall be 
filled by an affirmative vote of a majority of the remaining Bank 
directors, regardless of whether such remaining Bank directors 
constitute a quorum of the Bank's board of directors. A Bank director 
so elected shall satisfy the requirements for eligibility which were 
applicable to his predecessor. If any Bank director shall cease to have 
any qualification set forth in this section, the office held by such 
person shall immediately become vacant. ''.
  (d) Compensation.--Subsection (i) of section 7 of the Federal Home 
Loan Bank Act (12 U.S.C. 1427(i)) is amended to read as follows:
  ``(i) Directors' Compensation.--
          ``(1) In general.--Each Federal home loan bank may pay the 
        directors on the board of directors for the bank reasonable and 
        appropriate compensation for the time required of such 
        directors, and reasonable and appropriate expenses incurred by 
        such directors, in connection with service on the board of 
        directors, in accordance with resolutions adopted by the board 
        of directors and subject to the approval of the Director.
          ``(2) Annual report by the board.--The Director shall 
        include, in the annual report submitted to the Congress 
        pursuant to section 1319B of the Federal Housing Enterprises 
        Financial Safety and Soundness Act of 1992, information 
        regarding the compensation and expenses paid by the Federal 
        home loan banks to the directors on the boards of directors of 
        the banks.''.
  (e) Transition Rule.--Any member of the board of directors of a 
Federal Home Loan Bank serving as of the effective date under section 
211 may continue to serve as a member of such board of directors for 
the remainder of the term of such office as provided in section 7 of 
the Federal Home Loan Bank Act, as in effect before such effective 
date.

SEC. 203. FEDERAL HOUSING FINANCE AGENCY OVERSIGHT OF FEDERAL HOME LOAN 
                    BANKS.

  The Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.), other than 
in provisions of that Act added or amended otherwise by this Act, is 
amended--
          (1) by striking sections 2A and 2B (12 U.S.C. 1422a, 1422b);
          (2) in section 6 (12 U.S.C. 1426(b)(1))--
                  (A) in subsection (b)(1), in the matter preceding 
                subparagraph (A), by striking ``Finance Board 
                approval'' and inserting ``approval by the Director''; 
                and
                  (B) in each of subsections (c)(4)(B) and (d)(2), by 
                striking ``Finance Board regulations'' each place that 
                term appears and inserting ``regulations of the 
                Director'';
          (3) in section 8 (12 U.S.C. 1428), in the section heading, by 
        striking ``by the board'';
          (4) in section 10(b) (12 U.S.C. 1430), by striking ``by 
        formal resolution'';
          (5) in section 11 (12 U.S.C. 1431)--
                  (A) in subsection (b)--
                          (i) in the first sentence--
                                  (I) by striking ``The Board'' and 
                                inserting ``The Office of Finance, as 
                                agent for the Banks,''; and
                                  (II) by striking ``the Board'' and 
                                inserting ``such Office''; and
                          (ii) in the second and fourth sentences, by 
                        striking ``the Board'' each place such term 
                        appears and inserting ``the Office of 
                        Finance'';
                  (B) in subsection (c)--
                          (i) by striking ``the Board'' the first place 
                        such term appears and inserting ``the Office of 
                        Finance, as agent for the Banks,''; and
                          (ii) by striking ``the Board'' the second 
                        place such term appears and inserting ``such 
                        Office''; and
                  (C) in subsection (f)--
                          (i) by striking the two commas after 
                        ``permit'' and inserting ``or''; and
                          (ii) by striking the comma after ``require'';
          (6) in section 15 (12 U.S.C. 1435), by inserting ``or the 
        Director'' after ``the Board'';
          (7) in section 18 (12 U.S.C. 1438), by striking subsection 
        (b);
          (8) in section 21 (12 U.S.C. 1441)--
                  (A) in subsection (b)--
                          (i) in paragraph (5), by striking 
                        ``Chairperson of the Federal Housing Finance 
                        Board'' and inserting ``Director''; and
                          (ii) in the heading for paragraph (8), by 
                        striking ``federal housing finance board'' and 
                        inserting ``director''; and
                  (B) in subsection (i), in the heading for paragraph 
                (2), by striking ``Federal housing finance board'' and 
                inserting ``Director'';
          (9) in section 23 (12 U.S.C. 1443), by striking ``Board of 
        Directors of the Federal Housing Finance Board'' and inserting 
        ``Director'';
          (10) by striking ``the Board'' each place such term appears 
        in such Act (except in section 15 (12 U.S.C. 1435), section 
        21(f)(2) (12 U.S.C. 1441(f)(2)), subsections (a), (k)(2)(B)(i), 
        and (n)(6)(C)(ii) of section 21A (12 U.S.C. 1441a), subsections 
        (e)(7), (f)(2)(C), and (k)(7)(B)(ii) of section 21B (12 U.S.C. 
        1441b), and the first two places such term appears in section 
        22 (12 U.S.C. 1442)) and inserting ``the Director'';
          (11) by striking ``The Board'' each place such term appears 
        in such Act (except in sections 7(e) (12 U.S.C. 1427(e)), and 
        11(b) (12 U.S.C. 1431(b)) and inserting ``The Director'';
          (12) by striking ``the Board's'' each place such term appears 
        in such Act and inserting ``the Director's'';
          (13) by striking ``The Board's'' each place such term appears 
        in such Act and inserting ``The Director's'';
          (14) by striking ``The Finance Board'' each place such term 
        appears in such Act and inserting ``The Director'';
          (15) by striking ``the Finance Board'' each place such term 
        appears in such Act and inserting ``the Director'';
          (16) by striking ``Federal Housing Finance Board'' each place 
        such term appears and inserting ``Director'';
          (17) in section 11(i) (12 U.S.C. 1431(i), by striking ``the 
        Chairperson of''; and
          (18) in section 21(e)(9) (12 U.S.C. 1441(e)(9)), by striking 
        ``Chairperson of the''.

SEC. 204. JOINT ACTIVITIES OF BANKS.

  Section 11 of the Federal Home Loan Bank Act (12 U.S.C. 1431) is 
amended by adding at the end the following new subsection:
  ``(l) Joint Activities.--Subject to the regulation of the Director, 
any two or more Federal Home Loan Banks may establish a joint office 
for the purpose of performing functions for, or providing services to, 
the Banks on a common or collective basis, or may require that the 
Office of Finance perform such functions or services, but only if the 
Banks are otherwise authorized to perform such functions or services 
individually.''.

SEC. 205. SHARING OF INFORMATION BETWEEN FEDERAL HOME LOAN BANKS.

  (a) In General.-- The Federal Home Loan Bank Act is amended by 
inserting after section 20 (12 U.S.C. 1440) the following new section:

``SEC. 20A. SHARING OF INFORMATION BETWEEN FEDERAL HOME LOAN BANKS.

  ``(a) Regulatory Authority.--The Director shall prescribe such 
regulations as may be necessary to ensure that each Federal Home Loan 
Bank has access to information that the Bank needs to determine the 
nature and extent of its joint and several liability.
  ``(b) No Waiver of Privilege.--The Director shall not be deemed to 
have waived any privilege applicable to any information concerning a 
Federal Home Loan Bank by transferring, or permitting the transfer of, 
that information to any other Federal Home Loan Bank for the purpose of 
enabling the recipient to evaluate the nature and extent of its joint 
and several liability.''.
  (b) Regulations.--The regulations required under the amendment made 
by subsection (a) shall be issued in final form not later than 6 months 
after the effective date under section 211 of this Act.

SEC. 206. REORGANIZATION OF BANKS AND VOLUNTARY MERGER.

  Section 26 of the Federal Home Loan Bank Act (12 U.S.C. 1446) is 
amended--
          (1) by inserting ``(a) Reorganization.--'' before 
        ``Whenever''; and
          (2) by striking ``liquidated or'' each place such phrase 
        appears;
          (3) by striking ``liquidation or''; and
          (4) by adding at the end the following new subsection:
  ``(b) Voluntary Mergers.--Any Bank may, with the approval of the 
Director, and the approval of the boards of directors of the Banks 
involved, merge with another Bank. The Director shall promulgate 
regulations establishing the conditions and procedures for the 
consideration and approval of any such voluntary merger, including the 
procedures for Bank member approval.''.

SEC. 207. SECURITIES AND EXCHANGE COMMISSION DISCLOSURE.

  (a) In General.--The Federal Home Loan Banks shall be exempt from 
compliance with--
          (1) sections 13(e), 14(a), 14(c), and 17A of the Securities 
        Exchange Act of 1934 and related Commission regulations; and
          (2) section 15 of that Act and related Securities and 
        Exchange Commission regulations with respect to transactions in 
        capital stock of the Banks.
  (b) Member Exemption.--The members of the Federal Home Loan Banks 
shall be exempt from compliance with sections 13(d), 13(f), 13(g), 
14(d), and 16 of the Securities Exchange Act of 1934 and related 
Securities and Exchange Commission regulations with respect to their 
ownership of, or transactions in, capital stock of the Federal Home 
Loan Banks.
  (c) Exempted and Government Securities.--
          (1) Capital stock.--The capital stock issued by each of the 
        Federal Home Loan Banks under section 6 of the Federal Home 
        Loan Bank Act are--
                  (A) exempted securities within the meaning of section 
                3(a)(2) of the Securities Act of 1933; and
                  (B) ``exempted securities'' within the meaning of 
                section 3(a)(12)(A) of the Securities Exchange Act of 
                1934.
          (2) Other obligations.--The debentures, bonds, and other 
        obligations issued under section 11 of the Federal Home Loan 
        Bank Act are--
                  (A) exempted securities within the meaning of section 
                3(a)(2) of the Securities Act of 1933;
                  (B) ``government securities'' within the meaning of 
                section 3(a)(42) of the Securities Exchange Act of 
                1934;
                  (C) excluded from the definition of ``government 
                securities broker'' within section 3(a)(43) of the 
                Securities Exchange Act of 1934;
                  (D) excluded from the definition of ``government 
                securities dealer'' within section 3(a)(44) of the 
                Securities Exchange Act of 1934; and
                  (E) ``government securities'' within the meaning of 
                section 2(a)(16) of the Investment Company Act of 1940.
  (d) Exemption From Reporting Requirements.--The Federal Home Loan 
Banks shall be exempt from periodic reporting requirements pertaining 
to--
          (1) the disclosure of related party transactions that occur 
        in the ordinary course of business of the Banks with their 
        members; and
          (2) the disclosure of unregistered sales of equity 
        securities.
  (e) Tender Offers.--The Securities and Exchange Commission's rules 
relating to tender offers shall not apply in connection with 
transactions in capital stock of the Federal Home Loan Banks.
  (f) Regulations.--In issuing final regulations to implement 
provisions of this section, the Securities and Exchange Commission 
shall consider the distinctive characteristics of the Federal Home Loan 
Banks when evaluating the accounting treatment with respect to the 
payment to Resolution Funding Corporation, the role of the combined 
financial statements of the twelve Banks, the accounting classification 
of redeemable capital stock, and the accounting treatment related to 
the joint and several nature of the obligations of the Banks.

SEC. 208. COMMUNITY FINANCIAL INSTITUTION MEMBERS.

  (a) Total Asset Requirement.--Paragraph (10) of section 2 of the 
Federal Home Loan Bank Act (12 U.S.C. 1422(10)), as so redesignated by 
section 201(3) of this Act, is amended by striking ``$500,000,000'' 
each place such term appears and inserting ``$1,000,000,000''.
  (b) Use of Advances for Community Development Activities.--Section 
10(a) of the Federal Home Loan Bank Act (12 U.S.C. 1430(a)) is 
amended--
          (1) in paragraph (2)(B)--
                  (A) by striking ``and''; and
                  (B) by inserting ``, and community development 
                activities'' before the period at the end;
          (2) in paragraph (3)(E), by inserting ``or community 
        development activities'' after ``agriculture,''; and
          (3) in paragraph (6)--
                  (A) by striking ``and''; and
                  (B) by inserting ``, and `community development 
                activities' '' before ``shall''.

SEC. 209. TECHNICAL AND CONFORMING AMENDMENTS.

  (a) Right to Financial Privacy Act of 1978.--Section 1113(o) of the 
Right to Financial Privacy Act of 1978 (12 U.S.C. 3413(o)) is amended--
          (1) by striking ``Federal Housing Finance Board'' and 
        inserting ``Federal Housing Finance Agency''; and
          (2) by striking ``Federal Housing Finance Board's'' and 
        inserting ``Federal Housing Finance Agency's''.
  (b) Riegle Community Development and Regulatory Improvement Act of 
1994.--Section 117(e) of the Riegle Community Development and 
Regulatory Improvement Act of 1994 (12 U.S.C. 4716(e)) is amended by 
striking ``Federal Housing Finance Board'' and inserting ``Federal 
Housing Finance Agency''.
  (c) Title 18, United States Code.--Title 18, United States Code, is 
amended by striking ``Federal Housing Finance Board'' each place such 
term appears in each of sections 212, 657, 1006, 1014, and inserting 
``Federal Housing Finance Agency''.
  (d) MAHRA Act of 1997.--Section 517(b)(4) of the Multifamily Assisted 
Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f note) is 
amended by striking ``Federal Housing Finance Board'' and inserting 
``Federal Housing Finance Agency''.
  (e) Title 44, United States Code.--Section 3502(5) of title 44, 
United States Code, is amended by striking ``Federal Housing Finance 
Board'' and inserting ``Federal Housing Finance Agency''.
  (f) Access to Local TV Act of 2000.--Section 1004(d)(2)(D)(iii) of 
the Launching Our Communities' Access to Local Television Act of 2000 
(47 U.S.C. 1103(d)(2)(D)(iii)) is amended by striking ``Office of 
Federal Housing Enterprise Oversight, the Federal Housing Finance 
Board'' and inserting ``Federal Housing Finance Agency''.

SEC. 210. STUDY OF AFFORDABLE HOUSING PROGRAM USE FOR LONG-TERM CARE 
                    FACILITIES.

  The Comptroller General shall conduct a study of the use of 
affordable housing programs of the Federal home loan banks under 
section 10(j) of the Federal Home Loan Bank Act to determine how and 
the extent to which such programs are used to assist long-term care 
facilities for low- and moderate-income individuals, and the 
effectiveness and adequacy of such assistance in meeting the needs of 
affected communities. The study shall examine the applicability of such 
use to the affordable housing programs required to be established by 
the enterprises pursuant to the amendment made by section 128 of this 
Act. The Comptroller General shall submit a report to the Director of 
the Federal Housing Finance Agency and the Congress regarding the 
results of the study not later than the expiration of the 1-year period 
beginning on the date of the enactment of this Act.

SEC. 211. EFFECTIVE DATE.

  Except as specifically provided otherwise in this title, the 
amendments made by this title shall take effect on, and shall apply 
beginning on, the expiration of the 1-year period beginning on the date 
of the enactment of this Act.

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

       Subtitle A--Office of Federal Housing Enterprise Oversight

SEC. 301. ABOLISHMENT OF OFHEO.

  (a) In General.--Effective at the end of the 1-year period beginning 
on the date of the enactment of this Act, the Office of Federal Housing 
Enterprise Oversight of the Department of Housing and Urban Development 
and the positions of the Director and Deputy Director of such Office 
are abolished.
  (b) Disposition of Affairs.--During the 1-year period beginning on 
the date of the enactment of this Act, the Director of the Office of 
Federal Housing Enterprise Oversight shall, solely for the purpose of 
winding up the affairs of the Office of Federal Housing Enterprise 
Oversight--
          (1) manage the employees of such Office and provide for the 
        payment of the compensation and benefits of any such employee 
        which accrue before the effective date of the transfer of such 
        employee pursuant to section 303; and
          (2) may take any other action necessary for the purpose of 
        winding up the affairs of the Office.
  (c) Status of Employees Before Transfer.--The amendments made by 
title I and the abolishment of the Office of Federal Housing Enterprise 
Oversight under subsection (a) of this section may not be construed to 
affect the status of any employee of such Office as employees of an 
agency of the United States for purposes of any other provision of law 
before the effective date of the transfer of any such employee pursuant 
to section 303.
  (d) Use of Property and Services.--
          (1) Property.--The Director of the Federal Housing Finance 
        Agency may use the property of the Office of Federal Housing 
        Enterprise Oversight to perform functions which have been 
        transferred to the Director of the Federal Housing Finance 
        Agency for such time as is reasonable to facilitate the orderly 
        transfer of functions transferred pursuant to any other 
        provision of this Act or any amendment made by this Act to any 
        other provision of law.
          (2) Agency services.--Any agency, department, or other 
        instrumentality of the United States, and any successor to any 
        such agency, department, or instrumentality, which was 
        providing supporting services to the Office of Federal Housing 
        Enterprise Oversight before the expiration of the period under 
        subsection (a) in connection with functions that are 
        transferred to the Director of the Federal Housing Finance 
        Agency shall--
                  (A) continue to provide such services, on a 
                reimbursable basis, until the transfer of such 
                functions is complete; and
                  (B) consult with any such agency to coordinate and 
                facilitate a prompt and reasonable transition.
  (e) Savings Provisions.--
          (1) Existing rights, duties, and obligations not affected.--
        Subsection (a) shall not affect the validity of any right, 
        duty, or obligation of the United States, the Director of the 
        Office of Federal Housing Enterprise Oversight, or any other 
        person, which--
                  (A) arises under or pursuant to the title XIII of the 
                Housing and Community Development Act of 1992, the 
                Federal National Mortgage Association Charter Act, the 
                Federal Home Loan Mortgage Corporation Act, or any 
                other provision of law applicable with respect to such 
                Office; and
                  (B) existed on the day before the abolishment under 
                subsection (a) of this section.
          (2) Continuation of suits.--No action or other proceeding 
        commenced by or against the Director of the Office of Federal 
        Housing Enterprise Oversight in connection with functions that 
        are transferred to the Director of the Federal Housing Finance 
        Agency shall abate by reason of the enactment of this Act, 
        except that the Director of the Federal Housing Finance Agency 
        shall be substituted for the Director of the Office of Federal 
        Housing Enterprise Oversight as a party to any such action or 
        proceeding.

SEC. 302. CONTINUATION AND COORDINATION OF CERTAIN REGULATIONS.

  All regulations, orders, determinations, and resolutions that--
          (1) were issued, made, prescribed, or allowed to become 
        effective by--
                  (A) the Office of Federal Housing Enterprise 
                Oversight; or
                  (B) a court of competent jurisdiction and that relate 
                to functions transferred by this subtitle; and
          (2) are in effect on the date of the abolishment under 
        section 301(a) of this Act, shall remain in effect according to 
        the terms of such regulations, orders, determinations, and 
        resolutions, and shall be enforceable by or against the 
        Director of the Federal Housing Finance Agency until modified, 
        terminated, set aside, or superseded in accordance with 
        applicable law by such Director, as the case may be, any court 
        of competent jurisdiction, or operation of law.

SEC. 303. TRANSFER AND RIGHTS OF EMPLOYEES OF OFHEO.

  (a) Transfer.--Each employee of the Office of Federal Housing 
Enterprise Oversight shall be transferred to the Federal Housing 
Finance Agency for employment no later than the date of the abolishment 
under section 301(a) of this Act and such transfer shall be deemed a 
transfer of function for purposes of section 3503 of title 5, United 
States Code.
  (b) Guaranteed Positions.--Each employee transferred under subsection 
(a) shall be guaranteed a position with the same status, tenure, grade, 
and pay as that held on the day immediately preceding the transfer. 
Each such employee holding a permanent position shall not be 
involuntarily separated or reduced in grade or compensation for 12 
months after the date of transfer, except for cause or, if the employee 
is a temporary employee, separated in accordance with the terms of the 
appointment.
  (c) Appointment Authority for Excepted Service Employees.--
          (1) In general.--In the case of employees occupying positions 
        in the excepted service, any appointment authority established 
        pursuant to law or regulations of the Office of Personnel 
        Management for filling such positions shall be transferred, 
        subject to paragraph (2).
          (2) Decline of transfer.--The Director of the Federal Housing 
        Finance Agency may decline a transfer of authority under 
        paragraph (1) (and the employees appointed pursuant thereto) to 
        the extent that such authority relates to positions excepted 
        from the competitive service because of their confidential, 
        policy-making, policy-determining, or policy-advocating 
        character.
  (d) Reorganization.--If the Director of the Federal Housing Finance 
Agency determines, after the end of the 1-year period beginning on the 
date of the abolishment under section 201(a), that a reorganization of 
the combined work force is required, that reorganization shall be 
deemed a major reorganization for purposes of affording affected 
employees retirement under section 8336(d)(2) or 8414(b)(1)(B) of title 
5, United States Code.
  (e) Employee Benefit Programs.--Any employee of the Office of Federal 
Housing Enterprise Oversight accepting employment with the Director of 
the Federal Housing Finance Agency as a result of a transfer under 
subsection (a) may retain for 12 months after the date such transfer 
occurs membership in any employee benefit program of the Federal 
Housing Finance Agency or the Office of Federal Housing Enterprise 
Oversight, as applicable, including insurance, to which such employee 
belongs on the date of the abolishment under section 201(a) if--
          (1) the employee does not elect to give up the benefit or 
        membership in the program; and
          (2) the benefit or program is continued by the Director of 
        the Federal Housing Finance Agency;
The difference in the costs between the benefits which would have been 
provided by such agency and those provided by this section shall be 
paid by the Director of the Federal Housing Finance Agency. If any 
employee elects to give up membership in a health insurance program or 
the health insurance program is not continued by such Director, the 
employee shall be permitted to select an alternate Federal health 
insurance program within 30 days of such election or notice, without 
regard to any other regularly scheduled open season.

SEC. 304. TRANSFER OF PROPERTY AND FACILITIES.

  Upon the abolishment under section 301(a), all property of the Office 
of Federal Housing Enterprise Oversight shall transfer to the Director 
of the Federal Housing Finance Agency.

               Subtitle B--Federal Housing Finance Board

SEC. 321. ABOLISHMENT OF THE FEDERAL HOUSING FINANCE BOARD.

  (a) In General.--Effective at the end of the 1-year period beginning 
on the date of enactment of this Act, the Federal Housing Finance Board 
(in this title referred to as the ``Board'') is abolished.
  (b) Disposition of Affairs.--During the 1-year period beginning on 
the date of enactment of this Act, the Board, solely for the purpose of 
winding up the affairs of the Board--
          (1) shall manage the employees of such Board and provide for 
        the payment of the compensation and benefits of any such 
        employee which accrue before the effective date of the transfer 
        of such employee under section 323; and
          (2) may take any other action necessary for the purpose of 
        winding up the affairs of the Board.
  (c) Status of Employees Before Transfer.--The amendments made by 
titles I and II and the abolishment of the Board under subsection (a) 
may not be construed to affect the status of any employee of such Board 
as employees of an agency of the United States for purposes of any 
other provision of law before the effective date of the transfer of any 
such employee under section 323.
  (d) Use of Property and Services.--
          (1) Property.--The Director of the Federal Housing Finance 
        Agency may use the property of the Board to perform functions 
        which have been transferred to the Director of the Federal 
        Housing Finance Agency for such time as is reasonable to 
        facilitate the orderly transfer of functions transferred under 
        any other provision of this Act or any amendment made by this 
        Act to any other provision of law.
          (2) Agency services.--Any agency, department, or other 
        instrumentality of the United States, and any successor to any 
        such agency, department, or instrumentality, which was 
        providing supporting services to the Board before the 
        expiration of the 1-year period under subsection (a) in 
        connection with functions that are transferred to the Director 
        of the Federal Housing Finance Agency shall--
                  (A) continue to provide such services, on a 
                reimbursable basis, until the transfer of such 
                functions is complete; and
                  (B) consult with any such agency to coordinate and 
                facilitate a prompt and reasonable transition.
  (e) Savings Provisions.--
          (1) Existing rights, duties, and obligations not affected.--
        Subsection (a) shall not affect the validity of any right, 
        duty, or obligation of the United States, a member of the 
        Board, or any other person, which--
                  (A) arises under the Federal Home Loan Bank Act or 
                any other provision of law applicable with respect to 
                such Board; and
                  (B) existed on the day before the effective date of 
                the abolishment under subsection (a).
          (2) Continuation of suits.--No action or other proceeding 
        commenced by or against the Board in connection with functions 
        that are transferred to the Director of the Federal Housing 
        Finance Agency shall abate by reason of the enactment of this 
        Act, except that the Director of the Federal Housing Finance 
        Agency shall be substituted for the Board or any member thereof 
        as a party to any such action or proceeding.

SEC. 322. CONTINUATION AND COORDINATION OF CERTAIN REGULATIONS.

  (a) In General.--All regulations, orders, and determinations 
described under subsection (b) shall remain in effect according to the 
terms of such regulations, orders, determinations, and resolutions, and 
shall be enforceable by or against the Director of the Federal Housing 
Finance Agency until modified, terminated, set aside, or superseded in 
accordance with applicable law by such Director, any court of competent 
jurisdiction, or operation of law.
  (b) Applicability.--A regulation, order, or determination is 
described under this subsection if it--
          (1) was issued, made, prescribed, or allowed to become 
        effective by--
                  (A) the Board; or
                  (B) a court of competent jurisdiction and relates to 
                functions transferred by this subtitle; and
          (2) is in effect on the effective date of the abolishment 
        under section 321(a).

SEC. 323. TRANSFER AND RIGHTS OF EMPLOYEES OF THE FEDERAL HOUSING 
                    FINANCE BOARD.

  (a) Transfer.--Each employee of the Board shall be transferred to the 
Federal Housing Finance Agency for employment not later than the 
effective date of the abolishment under section 321(a), and such 
transfer shall be deemed a transfer of function for purposes of section 
3503 of title 5, United States Code.
  (b) Guaranteed Positions.--Each employee transferred under subsection 
(a) shall be guaranteed a position with the same status, tenure, grade, 
and pay as that held on the day immediately preceding the transfer. 
Each such employee holding a permanent position shall not be 
involuntarily separated or reduced in grade or compensation for 12 
months after the date of transfer, except for cause or, if the employee 
is a temporary employee, separated in accordance with the terms of the 
appointment.
  (c) Appointment Authority for Excepted and Senior Executive Service 
Employees.--
          (1) In general.--In the case of employees occupying positions 
        in the excepted service or the Senior Executive Service, any 
        appointment authority established under law or by regulations 
        of the Office of Personnel Management for filling such 
        positions shall be transferred, subject to paragraph (2).
          (2) Decline of transfer.--The Director of the Federal Housing 
        Finance Agency may decline a transfer of authority under 
        paragraph (1) to the extent that such authority relates to 
        positions excepted from the competitive service because of 
        their confidential, policymaking, policy-determining, or 
        policy-advocating character, and noncareer positions in the 
        Senior Executive Service (within the meaning of section 
        3132(a)(7) of title 5, United States Code).
  (d) Reorganization.--If the Director of the Federal Housing Finance 
Agency determines, after the end of the 1-year period beginning on the 
effective date of the abolishment under section 321(a), that a 
reorganization of the combined workforce is required, that 
reorganization shall be deemed a major reorganization for purposes of 
affording affected employees retirement under section 8336(d)(2) or 
8414(b)(1)(B) of title 5, United States Code.
  (e) Employee Benefit Programs.--
          (1) In general.--Any employee of the Board accepting 
        employment with the Federal Housing Finance Agency as a result 
        of a transfer under subsection (a) may retain for 12 months 
        after the date on which such transfer occurs membership in any 
        employee benefit program of the Federal Housing Finance Agency 
        or the Board, as applicable, including insurance, to which such 
        employee belongs on the effective date of the abolishment under 
        section 321(a) if--
                  (A) the employee does not elect to give up the 
                benefit or membership in the program; and
                  (B) the benefit or program is continued by the 
                Director of the Federal Housing Finance Agency.
          (2) Cost differential.--The difference in the costs between 
        the benefits which would have been provided by the Board and 
        those provided by this section shall be paid by the Director of 
        the Federal Housing Finance Agency. If any employee elects to 
        give up membership in a health insurance program or the health 
        insurance program is not continued by such Director, the 
        employee shall be permitted to select an alternate Federal 
        health insurance program within 30 days after such election or 
        notice, without regard to any other regularly scheduled open 
        season.

SEC. 324. TRANSFER OF PROPERTY AND FACILITIES.

  Upon the effective date of the abolishment under section 321(a), all 
property of the Board shall transfer to the Director of the Federal 
Housing Finance Agency.

        Subtitle C--Department of Housing and Urban Development

SEC. 341. TERMINATION OF ENTERPRISE-RELATED FUNCTIONS.

  (a) Termination Date.--For purposes of this subtitle, the term 
``termination date'' means the date that occurs one year after the date 
of the enactment of this Act.
  (b) Determination of Transferred Functions and Employees.--
          (1) In general.--Not later than the expiration of the 6-month 
        period beginning on the date of the enactment of this Act, the 
        Secretary, in consultation with the Director of the Office of 
        Federal Housing Enterprise Oversight, shall determine--
                  (A) the functions, duties, and activities of the 
                Secretary of Housing and Urban Development regarding 
                oversight or regulation of the enterprises under or 
                pursuant to the authorizing statutes, title XIII of the 
                Housing and Community Development Act of 1992, and any 
                other provisions of law, as in effect before the date 
                of the enactment of this Act, but not including any 
                such functions, duties, and activities of the Director 
                of the Office of Federal Housing Enterprise Oversight 
                of the Department of Housing and Urban Development and 
                such Office; and
                  (B) the employees of the Department of Housing and 
                Urban Development necessary to perform such functions, 
                duties, and activities.
          (2) Enterprise-related functions.--For purposes of this 
        subtitle, the term ``enterprise-related functions of the 
        Department'' means the functions, duties, and activities of the 
        Department of Housing and Urban Development determined under 
        paragraph (1)(A).
          (3) Enterprise-related employees.--For purposes of this 
        subtitle, the term ``enterprise-related employees of the 
        Department'' means the employees of the Department of Housing 
        and Urban Development determined under paragraph (1)(B).
  (c) Disposition of Affairs.--During the 1-year period beginning on 
the date of enactment of this Act, the Secretary of Housing and Urban 
Development (in this title referred to as the ``Secretary''), solely 
for the purpose of winding up the affairs of the Secretary regarding 
the enterprise-related functions of the Department of Housing and Urban 
Development (in this title referred to as the ``Department)'' --
          (1) shall manage the enterprise-related employees of the 
        Department and provide for the payment of the compensation and 
        benefits of any such employee which accrue before the effective 
        date of the transfer of any such employee under section 343; 
        and
          (2) may take any other action necessary for the purpose of 
        winding up the enterprise-related functions of the Department.
  (d) Status of Employees Before Transfer.--The amendments made by 
titles I and II and the termination of the enterprise-related functions 
of the Department under subsection (b) may not be construed to affect 
the status of any employee of the Department as employees of an agency 
of the United States for purposes of any other provision of law before 
the effective date of the transfer of any such employee under section 
343.
  (e) Use of Property and Services.--
          (1) Property.--The Director of the Federal Housing Finance 
        Agency may use the property of the Secretary to perform 
        functions which have been transferred to the Director of the 
        Federal Housing Finance Agency for such time as is reasonable 
        to facilitate the orderly transfer of functions transferred 
        under any other provision of this Act or any amendment made by 
        this Act to any other provision of law.
          (2) Agency services.--Any agency, department, or other 
        instrumentality of the United States, and any successor to any 
        such agency, department, or instrumentality, which was 
        providing supporting services to the Secretary regarding 
        enterprise-related functions of the Department before the 
        termination date under subsection (a) in connection with such 
        functions that are transferred to the Director of the Federal 
        Housing Finance Agency shall--
                  (A) continue to provide such services, on a 
                reimbursable basis, until the transfer of such 
                functions is complete; and
                  (B) consult with any such agency to coordinate and 
                facilitate a prompt and reasonable transition.
  (f) Savings Provisions.--
          (1) Existing rights, duties, and obligations not affected.--
        Subsection (a) shall not affect the validity of any right, 
        duty, or obligation of the United States, the Secretary, or any 
        other person, which--
                  (A) arises under the authorizing statutes, title XIII 
                of the Housing and Community Development Act of 1992, 
                or any other provision of law applicable with respect 
                to the Secretary, in connection with the enterprise-
                related functions of the Department; and
                  (B) existed on the day before the termination date 
                under subsection (a).
          (2) Continuation of suits.--No action or other proceeding 
        commenced by or against the Secretary in connection with the 
        enterprise-related functions of the Department shall abate by 
        reason of the enactment of this Act, except that the Director 
        of the Federal Housing Finance Agency shall be substituted for 
        the Secretary or any member thereof as a party to any such 
        action or proceeding.

SEC. 342. CONTINUATION AND COORDINATION OF CERTAIN REGULATIONS.

  (a) In General.--All regulations, orders, and determinations 
described in subsection (b) shall remain in effect according to the 
terms of such regulations, orders, determinations, and resolutions, and 
shall be enforceable by or against the Director of the Federal Housing 
Finance Agency until modified, terminated, set aside, or superseded in 
accordance with applicable law by such Director, any court of competent 
jurisdiction, or operation of law.
  (b) Applicability.--A regulation, order, or determination is 
described under this subsection if it--
          (1) was issued, made, prescribed, or allowed to become 
        effective by--
                  (A) the Secretary; or
                  (B) a court of competent jurisdiction and that relate 
                to the enterprise-related functions of the Department; 
                and
          (2) is in effect on the termination date under section 
        341(a).

SEC. 343. TRANSFER AND RIGHTS OF EMPLOYEES.

  (a) Transfer.--
          (1) In general.--Except as provided in paragraph (2), each 
        enterprise-related employee of the Department shall be 
        transferred to the Federal Housing Finance Agency for 
        employment not later than the termination date under section 
        341(a) and such transfer shall be deemed a transfer of function 
        for purposes of section 3503 of title 5, United States Code.
          (2) Authority to decline.--An enterprise-related employee of 
        the Department may, in the discretion of the employee, decline 
        transfer under paragraph (1) to a position in the Federal 
        Housing Finance Agency and shall be guaranteed a position in 
        the Department with the same status, tenure, grade, and pay as 
        that held on the day immediately preceding the date that such 
        declination was made. Each such employee holding a permanent 
        position shall not be involuntarily separated or reduced in 
        grade or compensation for 12 months after the date that the 
        transfer would otherwise have occurred, except for cause or, if 
        the employee is a temporary employee, separated in accordance 
        with the terms of the appointment.
  (b) Guaranteed Positions.--Each enterprise-related employee of the 
Department transferred under subsection (a) shall be guaranteed a 
position with the same status, tenure, grade, and pay as that held on 
the day immediately preceding the transfer. Each such employee holding 
a permanent position shall not be involuntarily separated or reduced in 
grade or compensation for 12 months after the date of transfer, except 
for cause or, if the employee is a temporary employee, separated in 
accordance with the terms of the appointment.
  (c) Appointment Authority for Excepted and Senior Executive Service 
Employees.--
          (1) In general.--In the case of employees occupying positions 
        in the excepted service or the Senior Executive Service, any 
        appointment authority established under law or by regulations 
        of the Office of Personnel Management for filling such 
        positions shall be transferred, subject to paragraph (2).
          (2) Decline of transfer.--The Director of the Federal Housing 
        Finance Agency may decline a transfer of authority under 
        paragraph (1) to the extent that such authority relates to 
        positions excepted from the competitive service because of 
        their confidential, policymaking, policy-determining, or 
        policy-advocating character, and noncareer positions in the 
        Senior Executive Service (within the meaning of section 
        3132(a)(7) of title 5, United States Code).
  (d) Reorganization.--If the Director of the Federal Housing Finance 
Agency determines, after the end of the 1-year period beginning on the 
termination date under section 341(a), that a reorganization of the 
combined workforce is required, that reorganization shall be deemed a 
major reorganization for purposes of affording affected employees 
retirement under section 8336(d)(2) or 8414(b)(1)(B) of title 5, United 
States Code.
  (e) Employee Benefit Programs.--
          (1) In general.--Any enterprise-related employee of the 
        Department accepting employment with the Federal Housing 
        Finance Agency as a result of a transfer under subsection (a) 
        may retain for 12 months after the date on which such transfer 
        occurs membership in any employee benefit program of the 
        Federal Housing Finance Agency or the Department, as 
        applicable, including insurance, to which such employee belongs 
        on the termination date under section 341(a) if--
                  (A) the employee does not elect to give up the 
                benefit or membership in the program; and
                  (B) the benefit or program is continued by the 
                Director of the Federal Housing Finance Agency.
          (2) Cost differential.--The difference in the costs between 
        the benefits which would have been provided by the Department 
        and those provided by this section shall be paid by the 
        Director of the Federal Housing Finance Agency. If any employee 
        elects to give up membership in a health insurance program or 
        the health insurance program is not continued by such Director, 
        the employee shall be permitted to select an alternate Federal 
        health insurance program within 30 days after such election or 
        notice, without regard to any other regularly scheduled open 
        season.

SEC. 344. TRANSFER OF APPROPRIATIONS, PROPERTY, AND FACILITIES.

  Upon the termination date under section 341(a), all assets, 
liabilities, contracts, property, records, and unexpended balances of 
appropriations, authorizations, allocations, and other funds employed, 
held, used, arising from, available to, or to be made available to the 
Department in connection with enterprise-related functions of the 
Department shall transfer to the Director of the Federal Housing 
Finance Agency. Unexpended funds transferred by this section shall be 
used only for the purposes for which the funds were originally 
authorized and appropriated.

                          Purpose and Summary

    H.R. 1461, the Federal Housing Finance Reform Act of 2005, 
establishes the Federal Housing Finance Agency, an independent 
agency to oversee the safe and sound operation as well as the 
mission functions of the government sponsored enterprises 
(GSEs)--Fannie Mae, Freddie Mac, and the 12 Federal Home Loan 
Banks. The Agency assumes the supervisory duties of the Office 
of Federal Housing Enterprise Oversight (OFHEO), the Federal 
Housing Finance Board (FHFB), and the Department of Housing and 
Urban Development (HUD).
    H.R. 1461 was introduced on April 5, 2005, by Capital 
Markets, Insurance, and Government Sponsored Enterprises 
Subcommittee Chairman Richard Baker. The Agency created in this 
legislation is headed by a Director appointed by the President 
and confirmed by the Senate. There will be three deputy 
directors appointed by the Director. Additionally, an oversight 
board is created that will advise the Director on the 
supervision of the regulated entities. The oversight board will 
consist of the Director of the Agency, the Secretaries of 
Treasury and HUD, and 2 additional appointed directors.
    The Director of the Agency has several important 
supervisory powers: (1) to adjust risk-based capital standards; 
(2) to adjust minimum capital levels on a permanent or 
temporary basis for the entities, as well as for specific 
programs of the enterprises; (3) to monitor and adjust the 
portfolio holdings of the enterprises in accordance with safety 
and soundness or mission related considerations; (4) to place a 
critically undercapitalized entity into receivership; (5) to 
set prudential management and operations standards; (6) to 
initiate prompt corrective actions for undercapitalized 
entities; (7) to take enforcement actions, such as cease-and-
desist orders, civil money and criminal penalties; (8) to hire 
examiners and accountants; and (9) to prohibit or withhold 
executive compensation for wrongdoing. The regulated entities 
must also register at least one class of stock with the SEC 
under the Securities Exchange Act of 1934; the enterprises must 
make several corporate governance improvements and disclose 
charitable donations by an enterprise and enterprise insiders.
    Under the legislation, the authority to review and approve 
new programs and activities is transferred from HUD to the 
Agency. New programs will be subject to a public notice and 
comment period prior to a determination by the Agency whether 
the program is permissible. The Agency must be notified of any 
new activities and an enterprise may not engage in a new 
activity until 30 days after notifying the Agency. The 
legislation permits the director to review existing activities 
to ensure that they are operating in a safe and sound manner 
and are in compliance with the mission of the enterprises.
    The bill authorizes the Director to raise loan limits in 
areas that meet the definition of high-cost. A high-cost area 
would be one where the median home sales price exceeds the 
current national conforming loan limit. The high-cost area loan 
limit would be allowed to rise to the area's median home price 
but increases would be capped at 150 percent of the statutory 
loan limit--the same limit that now applies to Alaska, Hawaii, 
and the two island territories. For purposes of clarity and 
consistency, the Director should, to the maximum degree 
possible, utilize the same housing price methodology used to 
determine the national conforming loan limit in determining the 
high-cost area limit.
    The affordable housing goals rewrite existing law to 
provide clarity and realign with the needs of low-income 
communities as well as financial institutions who are serving 
these low- and very-low income communities and families.
    Under existing law, the enterprises were directed to meet 
three housing goals established by HUD. To meet these 
affordable housing goals, the enterprises were directed to 
purchase mortgages for households representing three income 
strata, commonly measured as area median income (AMI). These 
three income strata are: (1) moderate-income (100 percent AMI); 
(2) low-income (80 percent of AMI); and (3) very-low income (60 
percent of AMI). In addition to these income based goals, the 
current law also directed the enterprises through goals to 
purchase mortgages in central cities, rural areas and other 
underserved housing goals. These goals have been established by 
HUD as percentage-of-business requirements. In addition, HUD 
has established by regulation a multi-family subgoal, which was 
volume-based. The existing statute needed clarity to ensure 
that the enterprises, the public, as well as the regulator, 
could easily interpret and implement the intended affordable 
housing mission.
    The bill generally realigns the affordable housing goals 
with the same regulatory requirements for Community 
Reinvestment Act-type loans; this approach should enable 
financial institutions to leverage more capital to meet the 
increasing needs in very-low income and low-income households 
and communities.
    This legislation simplifies the affordable housing goals to 
require the enterprises to meet goals established by the 
Director for single and multifamily areas in low-income (80 
percent of AMI) or very-low income (redefined as 50 percent of 
AMI), or in cases where low income housing tax credits 
properties are involved (60 percent of AMI). This 
simplification will place the enterprises on par with financial 
institutions, which also must meet affordable housing needs 
under CRA.
    In establishing these goals, the legislation also 
recognizes that a verifiable measurement baseline is necessary 
to ensure consistency and accuracy over time. The Director must 
base the single-family goals on Home Mortgage Disclosure Act 
(HMDA) data by using 3-year averages to determine the market.
    The Director may increase single-family goals above the 
averages established by the HMDA data to reflect expected 
changes in market performance based on various factors. This 
provision should provide the Director flexibility to continue 
the practice of considering the enterprises' penetration into 
the subprime and other markets.
    While the legislation requires the Director to establish 
annual housing goals, the Director continues to have discretion 
to set goals for a multi-year period. Setting multi-year goals 
may be a more reasonable approach because it allows the 
enterprises time to plan and incorporate goal-qualifying 
activities into their longer-term business strategies.
    The enterprises are required to serve underserved markets, 
such as manufactured housing, affordable housing preservation, 
and rural and other underserved markets. While the enterprises 
are required to develop loan products and flexible underwriting 
guidelines and to lead the industry, it is not intended that 
the Director would create percent-of-business or other numeric 
goals.
    The Director may remove as well as add designated markets 
that reflect contemporary market needs, as identified by the 
Agency's data as well as information submitted by the public.
    The legislation requires each enterprise to allocate 3.5 
percent of its after-tax income during the first year after 
enactment, and 5 percent in subsequent years, to a new 
affordable housing fund, modeled after the Affordable Housing 
Program of the Federal Home Loan Banks. No allocation to this 
fund is required when an enterprise is less than adequately 
capitalized.
    The enterprises' Affordable Housing Fund (AHF) will be 
targeted to those families that fall within extremely low- (30% 
of AMI) and very low-income (50% of AMI) levels. The very- and 
extremely-low income families are traditionally the hardest 
groups to serve, and existing programs are often unable to 
provide the deep targeting necessary to address those incomes. 
With respect to rental housing projects, funding will be 
prioritized to the extent rents are affordable, especially for 
extremely low-income families.
    The AHF provides resources to address the nation's most 
pressing housing problems. To promote new and innovative ways 
to address affordable housing needs, the bill is deliberately 
flexible. For example, the funds can be made available as 
grants, loans, or other forms of assistance for a specific 
project identified in a fund application. Amounts could also be 
used to fund loan loss reserves, revolving loans, and other 
forms of use which will leverage the funding of multiple 
projects under an investment plan identifying both the types of 
activities being undertaken and the expected time frame of such 
plan. No less than 10 percent of each enterprise's fund can be 
allocated for homeownership purposes such as down payment 
assistance, closing costs, and assistance for interest-rate 
buy-downs for very low and extremely low income households who 
are first-time homebuyers.
    The Director shall establish criteria to ensure that AHF 
monies will be awarded through a competitive application 
process, similar to the FHLBs' AHP, taking into consideration 
prioritization of funding based on greatest impact, geographic 
diversity, the ability of an entity to obligate amounts and 
undertake activities in a timely manner, and, in the case of 
rental housing, the extent to which rents will remain 
affordable.
    Like AHP, the enterprises will control distribution of 
their funds. However, the bill includes safeguards against 
possible abuses of the fund. First, the Director will appoint 
an affordable housing board, whose members will include the 
Secretaries of HUD and Agriculture, and two persons each from 
businesses and non-profits actively engaged in providing 
housing for very- or extremely-low income households. The board 
will be responsible for determining very- and extremely-low 
income housing needs and will advise the director on priorities 
for the use of funds. Second, the enterprises must submit 
quarterly public reports on how they are distributing the 
funds. Funds can only be used for production, preservation, and 
rehabilitation of affordable housing. Third, no amounts can be 
used for administrative costs or fees, or for activities 
outside the charters of the enterprises. If there is a finding 
that funds were improperly used, an enterprise must repay the 
funds to the AHF.
    Requiring a percentage of funds to be directed for 
affordable housing will ensure that the enterprises' subsidies 
flow more effectively to homebuyers and renters. The 
restructured goals and the AHF will direct the enterprises to 
segments of the market that they have not previously reached.
    A separate component of the AHF allows for use of a 
percentage of the funds for leveraged grants for affordable 
housing and community development purposes. No more than 12.5 
percent of the AHF may be used for these activities.
    Recipients of community development funds may include low-
income housing funds, state or local housing finance agencies, 
affordable housing nonprofit organizations, community 
development financial institutions, national non-profit housing 
intermediaries, community development corporations, and 
community development entities. Any funds awarded to a national 
non-profit housing intermediary may not be used to distribute 
sub-grants to other non-profit entities. Any returns from the 
community development grants accrue to the AHF.
    H.R. 1461 permits the Director to establish capital 
classifications for the regulated entities similar to those 
which exist for financial institutions. If a regulated entity 
becomes undercapitalized or significantly undercapitalized, the 
Director may take actions to return the enterprise to financial 
health. If a regulated entity becomes critically 
undercapitalized, the Director may place the enterprise into 
conservatorship or receivership. The legislation specifically 
outlines how a receivership would function in such a situation. 
The receivership language was modeled after similar provisions 
in the Federal Deposit Insurance Act that apply to federally 
insured depositories.
    The Agency is vested with cease-and-desist powers, if the 
Director has reasonable cause to believe that the regulated 
entity or an affiliated party is engaged in an unsafe or 
unsound practice or other violation of law. Additionally, 
violations of this Act may result in civil money and/or 
criminal penalties.
    H.R. 1461 improves the operations of the Federal Home Loan 
Bank System by permitting the formation of joint offices by two 
or more Banks, requiring sharing of information among the 
Banks, and raising the eligibility cap for community financial 
institution members that use advances for additional lending 
activities. The legislation reforms the method by which each 
Bank elects its board of directors, requiring that one-third be 
independent directors with at least two being public interest 
directors.
    The bill ensures that OFHEO, the FHFB, and the offices in 
HUD that oversee Fannie Mae and Freddie Mac will continue their 
supervisory roles during the one-year period between the 
enactment and effective dates. During this time, OFHEO, the 
FHFB, and HUD will have continued authority to issue 
regulations, ensure the safe and sound operation, and monitor 
the mission functions of the GSEs. On the effective date, all 
OFHEO, FHFB, and HUD employees involved in the oversight of the 
GSEs will be transferred to the new Agency. All of the existing 
regulations from the former regulatory agencies will remain in 
force under the new Agency.

                  Background and Need for Legislation

    Fannie Mae and Freddie Mac were chartered by Congress in 
order to create a secondary market and increase liquidity in 
the home mortgage markets. Through their charters, the GSEs are 
granted special privileges not available to other private-
sector firms. Both enterprises have a $2.25 billion line-of-
credit with the Treasury Department and they are exempt from 
state regulation, state income taxation, and SEC registration. 
The enterprises are able to borrow funds at a lower rate than 
other financial institutions primarily due to the perception 
that their debt is backed by the federal government. 
Additionally, these enterprises are exempt from the privacy 
protections provided to consumers through the Gramm-Leach-
Biliey Act of 1999.
    Fannie Mae and Freddie Mac are the dominant institutions in 
the secondary mortgage market. They buy residential mortgages 
from lenders and finance the purchases either by issuing debt 
securities or by packaging mortgages in the form of mortgage 
backed securities (MBS), on which they guarantee payment for a 
fee. Purchasers of the debt and MBS include mutual funds, major 
financial institutions, pension funds, insurance companies, 
individual investors, central banks, and other institutions in 
foreign countries. The safety and soundness of the enterprises 
is regulated by the Office of Federal Housing Enterprise 
Oversight (OFHEO). HUD is responsible for mission regulation of 
the enterprises.
    In 2003, the Congressional Budget Office estimated that GSE 
status provided Fannie Mae and Freddie Mac a $23 billion 
federal subsidy, of which $13.6 billion was passed through to 
borrowers as lower mortgage rates; the remainder of the subsidy 
was retained for management compensation and shareholder 
returns ($9.4 billion). Federal Reserve Board studies estimate 
that less than half of this subsidy actually passes through to 
borrowers.
    The Federal Home Loan Bank System was established by 
Congress in 1932 to provide liquidity to home mortgage lenders. 
The Banks issue debt for which they are jointly and severally 
liable, and use the proceeds principally to make advances to 
their members. Member institutions primarily secure advances 
with residential mortgages and other housing-related assets. 
The Federal Home Loan Banks are supervised by the Federal 
Housing Finance Board, an independent agency of the executive 
branch consisting of 5 appointed members. The System fulfills 
its mission by providing members with access to funding, 
technical assistance, and special affordable housing and 
community development programs. The System encompasses twelve 
separate, regional Federal Home Loan Banks (FHLBs, or Banks), 
each of which is a member-owned cooperative. There are over 
8,000 members in the System comprised of commercial banks, 
savings institutions, credit unions, and insurance companies.
    The Affordable Housing Program (AHP) of the twelve FHLBanks 
is the largest private sector grant program for housing in the 
nation. The AHP is funded with 10 percent each of the FHLBanks' 
annual earnings and has been a significant source of funds for 
financing the production and revitalization of affordable 
housing for people with low- and moderate-incomes. The AHP is a 
competitive program that provides grants to finance the 
purchase, construction, or rehabilitation of owner-occupied or 
rental housing. Grants can also be used to lower the interest 
rate on loans or cover down payment and closing costs. AHP 
grants are flexible and often serve as a ``bridge'' for housing 
projects, providing ``gap'' financing to make thousands of 
housing projects and home purchases. In 2005, approximately 
$230 million was made available for regional housing projects, 
creating almost 40,000 affordable housing units. Since the 
program's inception in 1991, over $2.1 billion dollars in AHP 
funds have been awarded, creating almost 430,000 affordable 
housing units. H.R. 1461 creates a similar program for Fannie 
Mae and Freddie Mac to provide affordable housing investments.
    As of June 30, 2004, Fannie Mae had total assets of $940 
billion, Freddie Mac $805 billion, and the twelve FHLBs $896 
billion. As of the same date, Fannie Mae held $940 billion in 
outstanding debt, Freddie Mac $744 billion, and the FHLBs $816 
billion in debt.
    Federal law explicitly exempts Fannie Mae, Freddie Mac, and 
the Federal Home Loan Banks from the 10% of assets statutory 
limitation on commercial banks' holdings of the ``investment 
securities'' of individual firms. That exemption and the 
perception of a federal guarantee of the enterprises' 
obligations result in investors not limiting their holdings of 
those securities in the same way they limit their investments 
in debt issued by non-GSEs. In March 2000, the Undersecretary 
of the Treasury for Domestic Finance reported that at mid-year 
1999 commercial banks held over $210 billion in GSE debt, 
representing almost 4% of total bank assets and over one-third 
of total bank capital. In 2003, OFHEO determined that over 
1,600 commercial banks held at least 51% of their capital in 
the form of debt issued by Fannie Mae and almost 1,000 
commercial banks held at least 51% of their capital in the form 
of debt issued by Freddie Mac.
    The GSEs hold mortgages and MBS in their retained, 
investment portfolios. By exploiting their borrowing advantage 
in the marketplace, the GSEs are able to purchase mortgages 
more profitably than others in the market. The GSEs then earn 
profits on the regular payments made on the mortgages. The 
combined portfolios of Fannie Mae and Freddie Mac have grown 
from $138 billion in 1990 to $1.6 trillion at yearend 2004. The 
Federal Home Loan Banks held $115 billion at yearend 2004.
    The result of these massive debt obligations and mortgage 
holdings is a large amount of risk being concentrated in very 
few institutions. An adverse market action or ill-advised 
investment could result in widespread losses to holders of this 
debt. Additionally, spikes or dips in interest rates could 
result in a very negative impact on the value of the retained 
portfolio. It is this overconcentration that has raised 
systemic risk concerns for Federal Reserve Board Chairman 
Greenspan and Treasury Secretary Snow.
    In 1992, Congress established affordable housing goals for 
the enterprises to ensure a more targeted transfer of GSE 
benefits to the housing market. Even though the enterprises are 
required by charter to help facilitate affordable housing, HUD 
has found that the enterprises lag behind the private sector in 
their affordable housing performance. Each enterprise must 
create an affordable housing fund in order for more of the 
subsidy to pass through to consumers.
    A report by the majority staff of the Committee found that 
the enterprises boosted their affordable housing performance by 
double counting loans, purchasing pools that were revocable, 
and acquiring decades-old mortgages.
    In January 2003, Freddie Mac began a restatement of 
earnings following a refusal by its outside auditor to sign off 
on its financial statement. On June 9, 2003, the company 
announced that it would undertake a management reorganization 
because of accounting irregularities discovered during the 
company's restatement process. OFHEO initiated a special review 
of Freddie Mac to determine the extent of the wrongdoing. OFHEO 
also demanded the removal of additional members of the 
management team, who were involved in improper accounting 
practices.
    In November 2003, Freddie Mac announced that they had 
overstated earnings by $1 billion in 2001. The company said the 
error in its 2001 earnings--restated to $3.16 billion from 
$4.15 billion--stemmed from failure to properly account for 
derivatives activity.
    In December 2003, OFHEO released a report on the special 
examination of Freddie Mac finding that the enterprise 
disregarded accounting rules, internal controls, disclosure 
standards, and ultimately, the public trust in the pursuit of 
steady earnings growth. Furthermore, the report found that the 
Board of Directors was complacent and failed to exercise 
adequate oversight. It was determined that Freddie Mac had 
misstated its earnings by $5 billion between 2001-2003.
    OFHEO initiated a special examination of Fannie Mae shortly 
after completing its exam of Freddie Mac. A report of initial 
findings on Fannie Mae in September 2004 cited internal control 
deficiencies, violations of GAAP accounting standards, earnings 
manipulations to meet compensation targets, and questionable 
management oversight. Fannie Mae disputed these findings and 
sought a review of OFHEO's findings by the SEC.
    The SEC concurred with OFHEO's findings of GAAP violations 
and directed Fannie Mae to restate its earnings for 2001-2003. 
As a result, Fannie Mae has been forced to recognize nearly $12 
billion in losses and has reorganized its senior management.
    OFHEO concluded in December 2004 that Fannie Mae was 
``significantly undercapitalized'' in the third quarter of 
2004, and required that the enterprise's minimum capital 
requirement be increased by 30% to strengthen its financial 
position.
    Since 2002 the Federal Home Loan Bank System has 
experienced several restatements and significant losses at some 
Banks. In 2004, the FHLBanks of Chicago and Seattle entered 
into written supervisory agreements with the FHFB to implement 
changes to improve their risk management, capital structure, 
governance, and other practices and procedures.

                                Hearings

    The Subcommittee on Capital Markets, Insurance, and 
Government Sponsored Enterprises held a hearing on February 9, 
2005, titled, ``Accounting Irregularities at Fannie Mae and the 
Impact on Investors''. The following witness testified: Donald 
T. Nicolaisen, Chief Accountant, U.S. Securities and Exchange 
Commission.
    The Subcommittee on Capital Markets, Insurance, and 
Government Sponsored Enterprises held a hearing on March 9, 
2005, titled ``GSE Reform and the Federal Home Loan Bank 
System.'' The following witnesses testified: The Honorable 
Ronald A. Rosenfeld, Chairman, Federal Housing Finance Board; 
Mr. David H. Hehman, President and Chief Executive Officer, 
Federal Home Loan Bank of Cincinnati; Mr. F. Weller Meyer, 
President and Chief Executive Officer, Acacia Federal Savings 
Bank; Mr. Jan Miller, President and Chief Executive Officer, 
Wainwright Bank; and Mr. Joseph F. Conners, Executive Vice 
President and Chief Financial Officer, Beneficial Savings Bank.
    The Subcommittee on Capital Markets, Insurance, and 
Government Sponsored Enterprises held a hearing on April 6, 
2005, titled, ``Additional Accounting and Management Failures 
at Fannie Mae-OFHEO's Efforts to Ensure Safe and Sound 
Operations.'' The following witness testified: the Honorable 
Armando Falcon, Director, Office of Federal Housing Enterprise 
Oversight.
    The Financial Services Committee held a hearing on April 
13, 2005, titled ``The Administration's Perspective on GSE 
Regulatory Reform.'' The following witnesses testified: The 
Honorable John Snow, Secretary of the Treasury, and the 
Honorable Alfonso Jackson, Secretary of the Department of 
Housing and Urban Development.

                        Committee Consideration

    The Committee on Financial Services met in open session on 
May 25, 2005, and ordered HR 1461, the Federal Housing Finance 
Reform Act of 2005, favorably reported to the House with an 
amendment by a record vote of 65 yeas and 5 nays.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. A 
motion by Mr. Oxley to report the bill, with an amendment, to 
the House with a favorable recommendation was agreed to by a 
record vote of 65 yeas and 5 nays (Record vote no. FC-5). The 
names of Members voting for and against follow:

                                              RECORD VOTE NO. FC-5
----------------------------------------------------------------------------------------------------------------
             Representative                  Aye       Nay             Representative             Aye      Nay
----------------------------------------------------------------------------------------------------------------
Mr. Oxley...............................        X   ........  Mr. Frank (MA).................        X   .......
Mr. Leach...............................        X   ........  Mr. Kanjorski..................        X   .......
Mr. Baker...............................        X   ........  Ms. Waters.....................        X   .......
Ms. Pryce (OH)..........................        X   ........  Mr. Sanders....................        X   .......
Mr. Bachus..............................        X   ........  Mrs. Maloney...................        X   .......
Mr. Castle..............................        X   ........  Mr. Gutierrez..................        X   .......
Mr. King (NY)...........................        X   ........  Ms. Velazquez..................        X   .......
Mr. Royce...............................  ........        X   Mr. Watt.......................        X   .......
Mr. Lucas...............................        X   ........  Mr. Ackerman...................        X   .......
Mr. Ney.................................        X   ........  Ms. Hooley.....................        X   .......
Mrs. Kelly..............................        X   ........  Ms. Carson.....................        X   .......
Mr. Paul................................  ........        X   Mr. Sherman....................        X   .......
Mr. Gillmor.............................        X   ........  Mr. Meeks (NY).................        X   .......
Mr. Ryun (KS)...........................        X   ........  Ms. Lee........................        X   .......
Mr. LaTourette..........................        X   ........  Mr. Moore (KS).................        X   .......
Mr. Manzullo............................        X   ........  Mr. Capuano....................        X   .......
Mr. Jones (NC)..........................        X   ........  Mr. Ford.......................        X   .......
Mrs. Biggert............................        X   ........  Mr. Hinojosa...................        X   .......
Mr. Shays...............................        X   ........  Mr. Crowley....................        X   .......
Mr. Fossella............................        X   ........  Mr. Clay.......................        X   .......
Mr. Gary G. Miller (CA).................        X   ........  Mr. Israel.....................        X   .......
Mr. Tiberi..............................        X   ........  Mrs. McCarthy..................        X   .......
Mr. Kennedy (MN)........................        X   ........  Mr. Baca.......................        X   .......
Mr. Feeney..............................  ........        X   Mr. Matheson...................        X   .......
Mr. Hensarling..........................  ........        X   Mr. Lynch......................        X   .......
Mr. Garrett (NJ)........................  ........        X   Mr. Miller (NC)................        X   .......
Ms. Brown-Waite (FL)....................        X   ........  Mr. Scott (GA).................        X   .......
Mr. Barrett (SC)........................        X   ........  Mr. Davis (AL).................        X   .......
Ms. Harris..............................        X   ........  Mr. Al Green (TX)..............        X   .......
Mr. Renzi...............................        X   ........  Mr. Cleaver....................        X   .......
Mr. Gerlach.............................        X   ........  Ms. Bean.......................        X   .......
Mr. Pearce..............................        X   ........  Ms. Wasserman Schultz..........        X   .......
Mr. Neugebauer..........................        X   ........  Ms. Moore (WI).................        X   .......
Mr. Price (GA)..........................        X
Mr. Fitzpatrick (PA)....................        X
Mr. Davis (KY)..........................        X
Mr. McHenry.............................       X
----------------------------------------------------------------------------------------------------------------
Note: Mr. Sanders is an independent, but caucuses with the Democratic Caucus.

    The following amendments were considered by record votes. 
The names of Members voting for and against follow:

          An amendment to the amendment in the nature of a 
        substitute by Mr. Kanjorski, No. 1e, establishing 
        boards of enterprises, was NOT AGREED TO by a record 
        vote of 35 yeas and 35 nays (Record vote no. FC-1).

                                              RECORD VOTE NO. FC-1
----------------------------------------------------------------------------------------------------------------
             Representative                  Aye       Nay             Representative             Aye      Nay
----------------------------------------------------------------------------------------------------------------
Mr. Oxley...............................  ........        X   Mr. Frank (MA).................        X   .......
Mr. Leach...............................  ........        X   Mr. Kanjorski..................        X   .......
Mr. Baker...............................  ........        X   Ms. Waters.....................        X   .......
Ms. Pryce (OH)..........................  ........        X   Mr. Sanders....................        X   .......
Mr. Bachus..............................  ........        X   Mrs. Maloney...................        X   .......
Mr. Castle..............................  ........        X   Mr. Gutierrez..................        X   .......
Mr. King (NY)...........................  ........        X   Ms. Velazquez..................        X   .......
Mr. Royce...............................  ........        X   Mr. Watt.......................        X   .......
Mr. Lucas...............................  ........        X   Mr. Ackerman...................        X   .......
Mr. Ney.................................  ........        X   Ms. Hooley.....................        X   .......
Mrs. Kelly..............................  ........        X   Ms. Carson.....................        X   .......
Mr. Paul................................  ........        X   Mr. Sherman....................        X   .......
Mr. Gillmor.............................  ........        X   Mr. Meeks (NY).................        X   .......
Mr. Ryun (KS)...........................  ........        X   Ms. Lee........................        X   .......
Mr. LaTourette..........................        X   ........  Mr. Moore (KS).................        X   .......
Mr. Manzullo............................  ........        X   Mr. Capuano....................        X   .......
Mr. Jones (NC)..........................  ........        X   Mr. Ford.......................        X   .......
Mrs. Biggert............................  ........        X   Mr. Hinojosa...................        X   .......
Mr. Shays...............................  ........        X   Mr. Crowley....................        X   .......
Mr. Fossella............................  ........        X   Mr. Clay.......................        X   .......
Mr. Gary G. Miller (CA).................  ........        X   Mr. Israel.....................        X   .......
Mr. Tiberi..............................        X   ........  Mrs. McCarthy..................        X   .......
Mr. Kennedy (MN)........................  ........        X   Mr. Baca.......................        X   .......
Mr. Feeney..............................  ........        X   Mr. Matheson...................        X   .......
Mr. Hensarling..........................  ........        X   Mr. Lynch......................        X   .......
Mr. Garrett (NJ)........................  ........        X   Mr. Miller (NC)................        X   .......
Ms. Brown-Waite (FL)....................  ........        X   Mr. Scott (GA).................        X   .......
Mr. Barrett (SC)........................  ........        X   Mr. Davis (AL).................        X   .......
Ms. Harris..............................  ........        X   Mr. Al Green (TX)..............        X   .......
Mr. Renzi...............................  ........        X   Mr. Cleaver....................        X   .......
Mr. Gerlach.............................  ........        X   Ms. Bean.......................        X   .......
Mr. Pearce..............................  ........        X   Ms. Wasserman Schultz..........        X   .......
Mr. Neugebauer..........................  ........        X   Ms. Moore (WI).................        X   .......
Mr. Price (GA)..........................  ........        X
Mr. Fitzpatrick (PA)....................  ........        X
Mr. Davis (KY)..........................  ........        X
Mr. McHenry.............................  ........       X
----------------------------------------------------------------------------------------------------------------
Note: Mr. Sanders is an independent, but caucuses with the Democratic Caucus

          An amendment to the amendment in the nature of a 
        substitute by Mr. Paul, No. 1h, eliminating authority 
        to borrow from the Treasury of the United States was 
        NOT AGREED TO by a record vote of 14 yeas and 56 nays 
        (FC-2).

                                              RECORD VOTE NO. FC-2
----------------------------------------------------------------------------------------------------------------
             Representative                  Aye       Nay             Representative            Aye       Nay
----------------------------------------------------------------------------------------------------------------
Mr. Oxley...............................  ........        X   Mr. Frank (MA).................  .......        X
Mr. Leach...............................        X   ........  Mr. Kanjorski..................  .......        X
Mr. Baker...............................        X   ........  Ms. Waters.....................  .......        X
Ms. Pryce (OH)..........................  ........        X   Mr. Sanders....................  .......        X
Mr. Bachus..............................  ........        X   Mrs. Maloney...................  .......        X
Mr. Castle..............................  ........        X   Mr. Gutierrez..................  .......        X
Mr. King (NY)...........................  ........        X   Ms. Velazquez..................  .......        X
Mr. Royce...............................        X   ........  Mr. Watt.......................  .......        X
Mr. Lucas...............................        X   ........  Mr. Ackerman...................  .......        X
Mr. Ney.................................  ........        X   Ms. Hooley.....................  .......        X
Mrs. Kelly..............................  ........        X   Ms. Carson.....................  .......        X
Mr. Paul................................        X   ........  Mr. Sherman....................  .......        X
Mr. Gillmor.............................        X   ........  Mr. Meeks (NY).................  .......        X
Mr. Ryun (KS)...........................  ........        X   Ms. Lee........................  .......        X
Mr. LaTourette..........................  ........        X   Mr. Moore (KS).................  .......        X
Mr. Manzullo............................  ........        X   Mr. Capuano....................  .......        X
Mr. Jones (NC)..........................        X   ........  Mr. Ford.......................  .......        X
Mrs. Biggert............................  ........        X   Mr. Hinojosa...................  .......        X
Mr. Shays...............................        X   ........  Mr. Crowley....................  .......        X
Mr. Fossella............................  ........        X   Mr. Clay.......................  .......        X
Mr. Gary G. Miller (CA).................  ........        X   Mr. Israel.....................  .......        X
Mr. Tiberi..............................  ........        X   Mrs. McCarthy..................  .......        X
Mr. Kennedy (MN)........................  ........        X   Mr. Baca.......................  .......        X
Mr. Feeney..............................        X   ........  Mr. Matheson...................  .......        X
Mr. Hensarling..........................        X   ........  Mr. Lynch......................  .......        X
Mr. Garrett (NJ)........................        X   ........  Mr. Miller (NC)................  .......        X
Ms. Brown-Waite (FL)....................  ........        X   Mr. Scott (GA).................  .......        X
Mr. Barrett (SC)........................  ........        X   Mr. Davis (AL).................  .......        X
Ms. Harris..............................  ........        X   Mr. Al Green (TX)..............  .......        X
Mr. Renzi...............................  ........        X   Mr. Cleaver....................  .......        X
Mr. Gerlach.............................  ........        X   Ms. Bean.......................  .......        X
Mr. Pearce..............................        X   ........  Ms. Wasserman Schultz..........  .......        X
Mr. Neugebauer..........................  ........        X   Ms. Moore (WI).................  .......        X
Mr. Price (GA)..........................        X
Mr. Fitzpatrick (PA)....................  ........        X
Mr. Davis (KY)..........................  ........        X
Mr. McHenry.............................        X   ........
----------------------------------------------------------------------------------------------------------------
Note: Mr. Sanders is an independent, but caucuses with the Democratic Caucus.

          An amendment to the amendment in the nature of a 
        substitute by Mr. Royce, No. 1l, striking the 
        Affordable Housing Fund was NOT AGREED TO by a record 
        vote of 17 yeas and 53 nays (FC-3).

                                              RECORD VOTE NO. FC-3
----------------------------------------------------------------------------------------------------------------
             Representative                  Aye       Nay             Representative            Aye       Nay
----------------------------------------------------------------------------------------------------------------
Mr. Oxley...............................  ........        X   Mr. Frank (MA).................  .......        X
Mr. Leach...............................  ........        X   Mr. Kanjorski..................  .......        X
Mr. Baker...............................        X   ........  Ms. Waters.....................  .......        X
Ms. Pryce (OH)..........................        X   ........  Mr. Sanders....................  .......        X
Mr. Bachus..............................        X   ........  Mrs. Maloney...................  .......        X
Mr. Castle..............................  ........        X   Mr. Gutierrez..................  .......        X
Mr. King (NY)...........................  ........        X   Ms. Velazquez..................  .......        X
Mr. Royce...............................        X   ........  Mr. Watt.......................  .......        X
Mr. Lucas...............................        X   ........  Mr. Ackerman...................  .......        X
Mr. Ney.................................  ........        X   Ms. Hooley.....................  .......        X
Mrs. Kelly..............................  ........        X   Ms. Carson.....................  .......        X
Mr. Paul................................        X   ........  Mr. Sherman....................  .......        X
Mr. Gillmor.............................  ........        X   Mr. Meeks (NY).................  .......        X
Mr. Ryun (KS)...........................        X   ........  Ms. Lee........................  .......        X
Mr. LaTourette..........................  ........        X   Mr. Moore (KS).................  .......        X
Mr. Manzullo............................        X   ........  Mr. Capuano....................  .......        X
Mr. Jones (NC)..........................        X   ........  Mr. Ford.......................  .......        X
Mrs. Biggert............................  ........        X   Mr. Hinojosa...................  .......        X
Mr. Shays...............................  ........        X   Mr. Crowley....................  .......        X
Mr. Fossella............................  ........        X   Mr. Clay.......................  .......        X
Mr. Gary G. Miller (CA).................  ........        X   Mr. Israel.....................  .......        X
Mr. Tiberi..............................  ........        X   Mrs. McCarthy..................  .......        X
Mr. Kennedy (MN)........................  ........        X   Mr. Baca.......................  .......        X
Mr. Feeney..............................        X   ........  Mr. Matheson...................  .......        X
Mr. Hensarling..........................        X   ........  Mr. Lynch......................  .......        X
Mr. Garrett (NJ)........................        X   ........  Mr. Miller (NC)................  .......        X
Ms. Brown-Waite (FL)....................        X   ........  Mr. Scott (GA).................  .......        X
Mr. Barrett (SC)........................        X   ........  Mr. Davis (AL).................  .......        X
Ms. Harris..............................  ........        X   Mr. Al Green (TX)..............  .......        X
Mr. Renzi...............................  ........        X   Mr. Cleaver....................  .......        X
Mr. Gerlach.............................  ........        X   Ms. Bean.......................  .......        X
Mr. Pearce..............................        X   ........  Ms. Wasserman Schultz..........  .......        X
Mr. Neugebauer..........................  ........        X   Ms. Moore (WI).................  .......        X
Mr. Price (GA)..........................        X   ........
Mr. Fitzpatrick (PA)....................  ........        X
Mr. Davis (KY)..........................  ........        X
Mr. McHenry.............................        X   ........
----------------------------------------------------------------------------------------------------------------
Note: Mr. Sanders is an independent, but caucuses with the Democratic Caucus

          An amendment to the amendment in the nature of a 
        substitute by Mr. Frank, No. 1o, establishing a Federal 
        Housing Finance Oversight Board as the regulator was 
        NOT AGREED TO by a record vote of 33 yeas and 37 nays 
        (FC-4).

                                              RECORD VOTE NO. FC-4
----------------------------------------------------------------------------------------------------------------
             Representative                  Aye       Nay             Representative             Aye      Nay
----------------------------------------------------------------------------------------------------------------
Mr. Oxley...............................  ........        X   Mr. Frank (MA).................        X   .......
Mr. Leach...............................  ........        X   Mr. Kanjorski..................        X   .......
Mr. Baker...............................  ........        X   Ms. Waters.....................        X   .......
Ms. Pryce (OH)..........................  ........        X   Mr. Sanders....................        X   .......
Mr. Bachus..............................  ........        X   Mrs. Maloney...................        X   .......
Mr. Castle..............................  ........        X   Mr. Gutierrez..................        X   .......
Mr. King (NY)...........................  ........        X   Ms. Velazquez..................        X   .......
Mr. Royce...............................  ........        X   Mr. Watt.......................        X   .......
Mr. Lucas...............................  ........        X   Mr. Ackerman...................        X   .......
Mr. Ney.................................  ........        X   Ms. Hooley.....................        X   .......
Mrs. Kelly..............................  ........        X   Ms. Carson.....................        X   .......
Mr. Paul................................  ........        X   Mr. Sherman....................        X   .......
Mr. Gillmor.............................  ........        X   Mr. Meeks (NY).................        X   .......
Mr. Ryun (KS)...........................  ........        X   Ms. Lee........................        X   .......
Mr. LaTourette..........................  ........        X   Mr. Moore (KS).................        X   .......
Mr. Manzullo............................  ........        X   Mr. Capuano....................        X   .......
Mr. Jones (NC)..........................  ........        X   Mr. Ford.......................        X   .......
Mrs. Biggert............................  ........        X   Mr. Hinojosa...................        X   .......
Mr. Shays...............................  ........        X   Mr. Crowley....................        X   .......
Mr. Fossella............................  ........        X   Mr. Clay.......................        X   .......
Mr. Gary G. Miller (CA).................  ........        X   Mr. Israel.....................        X   .......
Mr. Tiberi..............................  ........        X   Mrs. McCarthy..................        X   .......
Mr. Kennedy (MN)........................  ........        X   Mr. Baca.......................        X   .......
Mr. Feeney..............................  ........        X   Mr. Matheson...................        X   .......
Mr. Hensarling..........................  ........        X   Mr. Lynch......................        X   .......
Mr. Garrett (NJ)........................  ........        X   Mr. Miller (NC)................        X   .......
Ms. Brown-Waite (FL)....................  ........        X   Mr. Scott (GA).................        X   .......
Mr. Barrett (SC)........................  ........        X   Mr. Davis (AL).................        X   .......
Ms. Harris..............................  ........        X   Mr. Al Green (TX)..............        X   .......
Mr. Renzi...............................  ........        X   Mr. Cleaver....................        X   .......
Mr. Gerlach.............................  ........        X   Ms. Bean.......................        X   .......
Mr. Pearce..............................  ........        X   Ms. Wasserman Schultz..........        X   .......
Mr. Neugebauer..........................  ........        X   Ms. Moore (WI).................        X   .......
Mr. Price (GA)..........................  ........        X
Mr. Fitzpatrick (PA)....................  ........        X
Mr. Davis (KY)..........................  ........        X
Mr. McHenry.............................  ........       X
----------------------------------------------------------------------------------------------------------------
Note: Mr. Sanders is an independent, but caucuses with the Democratic Caucus

    The following other amendments were also considered by the 
Committee:
          An amendment in the nature of a substitute by Mr. 
        Oxley, No. 1, making various substantive and technical 
        changes to the bill, was AGREED TO, as amended, by a 
        voice vote.
          An en bloc amendment to the amendment in the nature 
        of a substitute by Mr. Oxley, No. 1a, was AGREED TO by 
        a voice vote.
          An amendment to the amendment in the nature of a 
        substitute by Mr. Gillmor, No. 1b, regarding disclosure 
        of charitable contributions was AGREED TO by a voice 
        vote.
          An amendment to the amendment in the nature of a 
        substitute by Mr. Gutierrez, No. 1c, regarding single 
        family housing subgoals was AGREED TO by a voice vote.
          An amendment to the amendment in the nature of a 
        substitute by Mr. Bachus, No. 1d, requiring a guarantee 
        fee study was AGREED TO by a voice vote.
          An amendment to the amendment in the nature of a 
        substitute by Mr. Royce, No. 1f, establishing a FHFA 
        ombudsman was WITHDRAWN.
          An amendment to the amendment in the nature of a 
        substitute by Mr. Davis of Alabama, No. 1g, requiring 
        an annual housing report was AGREED TO, as modified, by 
        a voice vote.
          An amendment to the amendment in the nature of a 
        substitute by Mr. Leach, No. 1i, regarding GSE mission 
        oversight had a point of order sustained against its 
        consideration.
          An amendment to the amendment in the nature of a 
        substitute by Mr. Royce, No. 1j, regarding Federal 
        Financial Institutions Examination Council membership 
        was AGREED TO by a voice vote.
          An amendment to the amendment in the nature of a 
        substitute by Mr. Meeks, No. 1k, eliminating interest 
        rate disparities was AGREED TO, as modified, by a voice 
        vote.
          An amendment to the amendment in the nature of a 
        substitute by Ms. Waters, No. 1m, placing a limitation 
        on subgrants was AGREED TO by a voice vote.
          An amendment to the amendment in the nature of a 
        substitute by Mr. Renzi, No. 1n, modifying the 
        definition of rural was AGREED TO by a voice vote.
          An amendment to the amendment in the nature of a 
        substitute by Mr. McHenry, No. 1p, requiring a GSE 
        study was WITHDRAWN.
          An amendment to the amendment in the nature of a 
        substitute by Mr. Gutierrez, No. 1q, regarding 
        liability for certain reports of fraudulent financial 
        transactions was AGREED TO, as modified, by voice vote.
          An amendment to the amendment in the nature of a 
        substitute by Mr. Garrett, No. 1r, establishing 
        portfolio limitations was WITHDRAWN.
          An amendment to the amendment in the nature of a 
        substitute by Mr. Gerlach, No. 1s, requiring a study of 
        affordable housing program use for long-term care 
        facilities was AGREED TO by a voice vote.
          An amendment to the amendment in the nature of a 
        substitute by Mr. Royce, No. 1t, striking age 
        limitations on enterprise boards of directors was 
        AGREED TO by a voice vote.
          An amendment to the amendment in the nature of a 
        substitute by Mr. Hensarling, No. 1u, requiring a study 
        of alternative secondary market systems was AGREED TO 
        by a voice vote.
          An amendment to the amendment in the nature of a 
        substitute by Mr. Pearce, No. 1v, requiring recipient 
        reports, was WITHDRAWN.

                      Committee Oversight Findings

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

                    Performance Goals and Objectives

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

   New Budget Authority, Entitlement Authority, and Tax Expenditures

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

                        Committee Cost Estimate

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

                  Congressional Budget Office Estimate

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

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 30, 2005.
Hon. Michael G. Oxley,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1461, the Federal 
Housing Finance Reform Act of 2005.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Susanne S. 
Mehlman (for federal costs), Mark Booth (for revenues), Sarah 
Puro (for the state and local impact), and Paige Piper/Bach 
(for the private-sector impact).
            Sincerely,
                                     Douglas Holtz-Eakin, Director.
    Enclosure.

H.R. 1461--Federal Housing Finance Reform Act of 2004

    Summary: Enacting H.R. 1461 would establish a single 
regulator--the Federal Housing Finance Agency (FHFA)--for 
government-sponsored enterprises (GSEs) involved in the home 
mortgage market. GSEs are privately owned, Congressionally 
chartered financial institutions created to enhance the 
availability of credit in the economy. The GSEs that would be 
regulated by FHFA under the bill include the Federal National 
Mortgage Association (Fannie Mae), the Federal Home Loan 
Mortgage Corporation (Freddie Mac), and the Federal Home Loan 
Banks (FHLBs). These GSEs were created to increase the 
availability of credit for home mortgages.
    FHFA would be an independent agency within the federal 
government with the authority to oversee the safety, soundness, 
and housing mission of these GSEs. Under H.R. 1461, FHFA would 
be authorized to collect fees from the GSEs and to spend such 
fees to pay for its operating costs. Because the GSEs would be 
compelled by the government to pay those fees, the amounts 
collected and spent should be recorded on the federal budget as 
governmental revenues and outlays, respectively. CBO estimates 
that the operations of FHFA would cost about $100 million a 
year starting in 2007 and that fees collected by the agency 
would cover that spending.
    The legislation also would require Fannie Mae and Freddie 
Mac to contribute 5 percent (3.5 percent in 2006) of their 
after-tax income, generally as reported to the Securities and 
Exchange Commission (SEC), to new affordable housing funds 
created by the bill. These funds would be used to provide 
grants and other types of financial assistance to increase home 
ownership among low-income households. Because these entities 
would be compelled to spend specified amounts of funds to meet 
a specific governmental purpose, the collections and spending 
of the affordable housing funds should also be recorded on the 
federal budget. Spending from the funds should be recorded as 
federal outlays, and deposits to the funds should be shown as 
governmental revenues. As a result of the fees that would be 
collected and spent by FHFA and the transactions of the 
affordable housing funds, CBO estimates that enacting this 
legislation would increase direct spending by $2.3 billion over 
the 2006-2010 period and by $6.3 billion over the 2006-2015 
period. We further estimate that the collection of the fees by 
FHFA and the creation of the affordable housing funds would 
increase federal revenues by $2.7 billion over the 2006-2010 
period and by $6.0 billion over the 2006-2015 period.
    Pursuant to section 407 of H. Con. Res. 95 (the Concurrent 
Resolution on the Budget, Fiscal Year 2006), CBO estimates that 
enacting H.R. 1461 would cause an increase in direct spending 
greater than $5 billion in at least one of the 10-year periods 
between 2016 and 2056.
    Finally, CBO estimates that implementing H.R. 1461 would 
result in net savings of about $22 million in discretionary 
spending over the next five years, assuming that appropriations 
are reduced to reflect the changes in regulatory structure that 
would be established in the legislation. Those savings would 
result from a reduction in the regulatory responsibilities of 
the Department of Housing and Urban Development (HUD).
    H.R. 1461 contains several intergovernmental mandates as 
defined in the Unfunded Mandates Reform Act (UMRA), but CBO 
estimates that the aggregate costs to state, local, and tribal 
governments would be minimal and would not exceed the threshold 
established in that act ($62 million in 2005, adjusted annually 
for inflation).
    The bill also would impose several private-sector mandates 
as defined in UMRA on Fannie Mae, Freddie Mac, and the FHLBs. 
CBO estimates that the aggregate direct cost of those mandates 
would exceed the annual threshold established by UMRA ($123 
million in 2005, adjusted annually for inflation) in each of 
the first five years the mandates are in effect.
    Estimated cost to the Federal Government: For this 
estimate, CBO assumes that H.R. 1461 will be enacted by the end 
of fiscal year 2005, that FHFA would become operational 
beginning in fiscal year 2007, and that appropriation actions 
consistent with this bill will occur. The bill's estimated 
budgetary impact is shown in Table 1. The costs of this 
legislation fall within budget function 370 (commerce and 
housing credit).

            TABLE 1. ESTIMATED BUDGETARY IMPACT OF H.R. 1461
------------------------------------------------------------------------
                                      By fiscal year, in millions of
                                                 dollars--
                                 ---------------------------------------
                                   2006    2007    2008    2009    2010
------------------------------------------------------------------------
                       CHANGES IN DIRECT SPENDING

Estimated Budget Authority......     360     650     680     710     750
Estimated Outlays...............       0     340     590     670     710

                           CHANGES IN REVENUES

Estimated Revenues..............     360     590     560     570     600

              CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated Authorization Level...      -4      -3      -5      -5      -5
Estimated Outlays...............      -4      -3      -5      -5      -5
------------------------------------------------------------------------

    Basis of estimate: The budgetary impact of the bill would 
stem mostly from the establishment of a new regulator for the 
GSEs and from the creation of the affordable housing funds of 
Fannie Mae and Freddie Mac.

Background on GSE regulation

    Currently, HUD is responsible for setting affordable 
housing goals for Fannie Mae and Freddie Mac and ensuring that 
these two GSEs meet such goals. HUD's oversight activities are 
funded from the agency's annual appropriation. (In 2004, HUD 
spent about $4 million to perform those oversight 
responsibilities.) In addition, the Office of Federal Housing 
Enterprise Oversight (OFHEO), an independent agency within HUD, 
currently oversees the financial safety and soundness of these 
two GSEs. OFHEO is funded through annual assessments collected 
from Fannie Mae and Freddie Mac; the collection and spending of 
those assessments are subject to appropriation actions. In 
2005, OFHEO was authorized to collect and spend about $60 
million to perform its duties.
    The FHLB system, which consists of 12 regionally based 
banks, is currently regulated by the Federal Housing Finance 
Board (FHFB). FHFB is an independent agency that oversees the 
financial safety and soundness of the FHLBs as well as their 
mission compliance; it is funded through annual assessments 
collected from the earnings of the FHLBs. The collection and 
spending of these annual assessment are not subject to 
appropriation action. In 2005, FHFB anticipates that 
assessments and spending will total about $36 million.
    Under H.R. 1461, beginning in 2007, FHFA would assume all 
of the responsibilities associated with oversight of the GSEs' 
housing mission, which are currently under HUD's jurisdiction. 
Additionally, enacting H.R. 1461 would abolish OFHEO and FHFB 
one year following its enactment, and their functions and 
current staff would be transferred to FHFA. The legislation 
also would establish an Inspector General within FHFA.

Direct spending and revenues

    CBO estimates that the collection and spending of fees by 
FHFA would increase direct spending and revenues by about $980 
million over the next 10 years.
    We also estimate that enacting the affordable housing fund 
provisions of H.R. 1461 would increase direct spending by about 
$5.4 billion over the next 10 years and increase federal 
revenues by $5.1 billion over the same period. CBO assumes that 
Fannie Mae and Freddie Mac would begin making deposits to their 
affordable housing funds in 2006, and that spending from the 
funds would begin in 2007 after FHFA becomes operational and 
issues regulations governing the administration of the 
affordable housing funds. The estimated impact of the bill on 
direct spending and revenues over the 2006-2015 period is shown 
in Table 2.
    FHFA Fees and Spending. While many of the activities 
currently performed by HUD, OFHEO, and FHFB would continue 
under H.R. 1461, enacting this legislation also would establish 
some new authorities, such as the authority to liquidate a 
troubled or insolvent GSE and the authority to limit the 
portfolio holdings of the GSEs (that is, the amount of 
mortgages that are held instead of repackaged and then sold as 
mortgage-backed securities) to ensure financial soundness. In 
addition, the GSEs would not be able to undertake any new 
program or business activity without prior approval from the 
Director of FHFA. Also, section 106 of this legislation would 
authorize the Director of FHFA to assess fees on the housing-
related GSEs each year to obtain funding for reasonable costs 
and expenses associated with FHFA's responsibilities. Those 
fees paid by the GSEs should be classified as governmental 
revenues because they would be imposed through the exercise of 
the government's sovereign power. The expenditure of the fees 
collected by FHFA would be government spending.

                     TABLE 2. ESTIMATED IMPACT OF H.R. 1461 ON DIRECT SPENDING AND REVENUES
----------------------------------------------------------------------------------------------------------------
                                                     By fiscal year, in millions of dollars--
                                 -------------------------------------------------------------------------------
                                   2006    2007    2008    2009    2010    2011    2012    2013    2014    2015
----------------------------------------------------------------------------------------------------------------
FHFA fees:
    Estimated Budget Authority..       0     100     100     100     110     110     110     110     120     120
    Estimated Outlays...........       0     100     100     100     110     110     110     110     120     120
    Estimated Revenues..........       0     100     100     100     110     110     110     110     120     120
Affordable housing funds:
    Estimated Budget Authority..     360     550     580     610     640     670     700     730     760     800
    Estimated Outlays...........       0     240     490     570     600     630     660     690     720     750
    Estimated Revenues..........     360     490     460     470     490     510     540     560     580     610
Total:
    Estimated Budget Authority..     360     650     680     710     750     780     810     840     880     920
    Estimated Outlays...........       0     340     590     670     710     740     770     800     840     870
    Estimated Revenues..........     360     590     560     570     600     620     650     670     700     730
----------------------------------------------------------------------------------------------------------------

    Revenue Effects of the Fees Assessed by FHFA. CBO estimates 
that FHFA would require annual funding in the neighborhood of 
$100 million, approximately the amount that will be spent under 
current law to oversee the GSEs in 2005. Under the bill, the 
first assessment by FHFA would occur in 2007, and CBO estimates 
that resulting collections would total $980 million over the 
2007-2015 period. We expect that the fees assessed by FHFA 
would be roughly the same amount currently paid to OFHEO and 
FHFB. CBO estimates that any increase in costs stemming from 
the new responsibilities of FHFA would be offset by savings 
from merging the technical and administrative functions of 
OFHEO and FHFB.
    The new collections under the bill should be treated as 
governmental revenues in the budget. Because the new fees paid 
by the GSEs to FHFA would be approximately equal to the amounts 
they would pay to OFHEO and FHFB under current law, taxable 
incomes of Fannie Mae and Freddie Mac or of other entities in 
the economy would not change significantly.
    Spending Effects of the Fees Assessed by FHFA. CBO expects 
that such spending would begin in 2007 after FHFA is 
established. We estimate that, in most years, FHFA would spend 
the total amount of fees it collects from the GSEs. Thus, 
enacting this provision would increase federal outlays by about 
$410 million over the 2007-2010 period and by about $980 
million over the 2007-2015 period.
    Affordable Housing Funds. Section 128 of this legislation 
would establish affordable housing funds at both Fannie Mae and 
Freddie Mac. To support such funds, each of these GSEs would be 
required to contribute 5 percent (3.5 percent in 2006) of their 
after-tax income for the preceding year, provided that the GSE 
is adequately capitalized and has generated after-tax income 
for the year. The funds could be used to provide grants and 
subsidies to state and local agencies, nonprofit groups that 
are dedicated to increasing home ownership for extremely low- 
and very low-income families, and community development 
financial institutions that support investment in regions with 
a significant population of households below the poverty level. 
Such grants could be used, for example, to contribute to loan 
loss reserves, provide down-payment assistance, and subsidize 
the cost of certain home loans.
    The funds' resources could not be used to purchase 
mortgages or pay other corporate expenses other than 
maintaining the fund. Because the affordable housing goals that 
would be established by section 125 of this legislation could 
only be met by Fannie Mae and Freddie Mac through the purchase 
of certain types of mortgages, the new affordable housing funds 
would not directly contribute to meeting those goals. (However, 
any mortgages that are made possible by the funds and are 
subsequently purchased by the GSEs could be used to meet the 
new affordable housing goals.)
    The Director of FHFA would promulgate the regulations 
governing how the GSEs administer the affordable housing funds. 
The Director also would appoint a board consisting of 7, 9, or 
11 persons, including the Director and the Secretaries of HUD 
and Agriculture, that would advise the Director on criteria for 
appropriate uses of the funds and review reports submitted by 
Fannie Mae and Freddie Mac to determine compliance with the 
regulations governing the funds.
    The allocations to the affordable housing funds should be 
considered governmental revenues because the bill mandates 
their expenditure for a governmental purpose. Although the 
funds would remain in the possession of the GSEs, they are 
removed from private control and converted to government use 
through an exercise of sovereign power. The deposit of specific 
amounts into the new funds would be compulsory, not voluntary. 
Likewise, expenditures from the funds would be a form of 
federal spending because the affordable housing funds may be 
obligated only for purposes specified in the bill. FHFA would 
enforce the requirement for deposits into the affordable 
housing funds and would oversee spending of those funds to 
ensure compliance with federal purposes.
    Revenue Effects of the Affordable Housing Funds. The 
estimated revenue effect of establishing the funds consists of 
two broad components. First, the levy of 5 percent of after-tax 
net income (3.5 percent in 2006) would be accounted for as a 
revenue when credited to the affordable housing funds. The 
total combined after-tax income for these GSEs has averaged $10 
billion over the past five years. Assuming that future income 
would continue around this average and increase by CBO's 
forecast of the growth in gross domestic product (GDP), CBO 
estimates that in 2005 the GSEs would have available about $10 
billion in after-tax income. The first assessment for the 
affordable housing funds would be mandated to occur in 2006 and 
would total an estimated $360 million. Over the 2006-2015 
period, assessments would total an estimated $6.4 billion.
    Second, the spending of amounts from the affordable housing 
funds would generate deductions against taxable corporate 
profits for the two GSEs. If the GSEs' taxable profits were 
reduced as a result of the affordable housing program, they 
would pay lower corporate income taxes. If the GSEs passed 
through some of the assessments to customers in the form of 
higher fees, other taxable incomes in the economy would 
presumably be lower. Therefore, CBO estimates that the payments 
from the affordable housing funds would reduce total taxable 
incomes in the economy and thus diminish federal tax receipts 
by 25 percent of the amount of those payments. In 2007, CBO 
estimates that about $240 million would be spent from the 
funds, reducing revenues by about $60 million in that year. 
Over the 2006-2015 period, CBO estimates that this second 
effect would reduce revenues by about $1.3 billion.
    Spending Effects of the Affordable Housing Funds. 
Expenditures from the funds should be treated as direct 
spending of the federal government. CBO expects that such 
spending would begin in 2007 after FHFA is established. We 
estimate that enacting this provision would increase federal 
outlays by $1.9 billion over the 2006-2010 period and $5.4 
billion over the 2006-2015 period.
    The bill requires that amounts allocated to the affordable 
housing funds be committed for use within two years. CBO 
estimates that the lag between the recording of federal 
revenues and the spending of amounts in fund would result in a 
net reduction in the federal deficit in 2006 and 2007. After 
2007, the estimated reduction in taxable income and its effect 
on tax revenues would result in increased deficits. Over the 
2006-2015 period, CBO estimates that revenues would be 
increased by about $5.1 billion and direct spending would be 
increased by $5.4 billion, for a net increase in the deficit of 
almost $300 million.

Other effects on spending

    Enacting H.R. 1461 also could further affect direct 
spending and revenues because this bill would provide for civil 
and criminal penalties against GSEs or a party affiliated with 
them for various violations of law. While enacting the 
legislation would expand the number of possible violations, CBO 
has no reason to expect that the amount of fines assessed would 
significantly increase under the bill. In fact, prior to the 
large fine paid by Freddie Mac in 2003 ($125 million) and the 
amount paid by one of its former employees ($125,000), no fines 
had been collected from any of the housing-related GSEs.
    Section 115 of the bill would direct GSEs to register their 
capital stock with the SEC under the Securities Act of 1934. 
Registering under this act involves standardized disclosure of 
certain financial information but does not include any payment 
of fees associated with other securities laws.
    Under current law, GSEs are exempt from registering their 
capital stock with the SEC. However, Fannie Mae is currently 
registering with the SEC voluntarily, and Freddie Mac intends 
to do the same in the near future. In addition, the FHLBs are 
expected to register by August 2005. Based on information 
provided by the SEC, CBO estimates that implementing section 
115 of H.R. 1461 would impose no significant costs on the SEC.
    In addition, enacting this legislation would abolish FHFB 
and thus the receipts collected and spent by this regulatory 
body would no longer appear in the budget beginning in 2007. 
Because collections and spending by FHFB are about equal, 
eliminating FHFB would have no net budgetary effect.

Spending subject to appropriation

    Changes in HUD's Regulatory Responsibilities. Beginning in 
2007, CBO estimates that implementing the bill would reduce HUD 
spending by about $5 million a year because FHFA would take 
over HUD's current GSE-oversight responsibilities.
    GAO Studies and Audits. Enacting H.R. 1461 would require 
GAO to conduct several studies and audits over the next five 
years, including a study that would examine the practices used 
by the GSEs to set guarantee fees and an audit of the 
methodology used by FHFA to calculate changes in housing 
prices. Based on information from GAO, CBO estimates that GAO 
would incur costs of about $3 million over the next five years 
to carry out its responsibilities under this legislation. The 
bill also would require GAO to conduct annual audits of the 
financial transactions associated with the new regulator. 
However, the costs associated with the annual audits could be 
funded through the assessments collected by FHFA.
    Elimination of OFHEO. After OFHEO is abolished, beginning 
in 2007, the collections received and spent by this regulatory 
body will no longer appear in the budget. Because collections 
are about equal to spending, the elimination of OFHEO would 
have no net budgetary effect.
    Estimated long-term effects on direct spending: Pursuant to 
section 407 of H. Con. Res. 95 (the Concurrent Resolution on 
the Budget, Fiscal Year 2006), CBO estimates that enacting H.R. 
1461 would cause an increase in direct spending greater than $5 
billion in at least one of the 10-year periods between 2016 and 
2056.
    Estimated impact on state, local, and tribal governments: 
Several provisions of H.R. 1461 would preempt state law and 
thus constitute intergovernmental mandates as defined in UMRA. 
Those provisions would allow FHFA to act outside the authority 
of state law in some circumstances and would preempt state 
statute-of-limitation and contract laws. Those preemptions 
would primarily occur in the unlikely instance that FHFA serves 
as the receiver or conservator of a regulated entity. CBO 
estimates that the aggregate costs to states of complying with 
these mandates would be minimal and would not exceed the 
threshold established in UMRA ($62 million in 2005, adjusted 
annually for inflation).
    Estimated impact on the private sector: H.R. 1461 would 
impose several private-sector mandates, as defined in UMRA, on 
Fannie Mae, Freddie Mac, and the FHLBs. CBO estimates that the 
aggregate direct cost of those mandates would exceed the annual 
threshold established by UMRA ($123 million in 2005, adjusted 
annually for inflation) in each of the first five years the 
mandates are in effect.

Affordable housing funds

    The most costly mandate is the requirement that Fannie Mae 
and Freddie Mac establish and manage affordable housing funds 
to increase homeownership for low-income families and to 
increase investment in low-income areas. The bill would require 
the GSEs to contribute 5 percent of their annual after-tax 
income for the preceding year to the fund beginning in 2007. 
(That percentage would be 3.5 percent in 2006.) Based on their 
historical net earnings, CBO estimates that the direct cost of 
those mandatory contributions would be approximately $360 
million in 2006. Assuming continued growth in net earnings for 
those GSEs, the cost of those contributions could increase to 
more than $600 million in 2010.

Regulatory functions

    The bill would establish a new federal regulator for Fannie 
Mae, Freddie Mac, and the FHLBs. Under current law, those GSEs 
pay assessments to their regulators. Under the bill, they would 
pay assessments for the operation of their new regulator--the 
Federal Housing Finance Agency. The duty to pay those fees 
would be a private-sector mandate, but CBO expects that the new 
fees would not differ significantly from the amounts the GSEs 
would otherwise pay to their current regulators.
    The bill also would authorize FHFA to liquidate an 
insolvent GSE, to increase the amount of capital GSEs must 
hold, and to limit the portfolio holdings of the GSEs to ensure 
financial soundness. In addition, the GSEs would be required to 
receive approval from FHFA before beginning any new program or 
activity. Such new authority would impose private-sector 
mandates on the GSEs when it is utilized. The cost to the GSEs 
would depend on how the regulations governing such authority 
are implemented. Because that information is not available, CBO 
cannot determine the cost of those mandates.
    In addition, the bill would impose new mandates on the 
housing-related GSEs by requiring them to report in a timely 
manner the discovery of certain fraudulent financial 
transactions and by requiring Fannie Mae and Freddie Mac to 
submit an annual report to FHFA on certain charitable 
contributions. According to industry sources, the direct cost 
of providing those reports would be minimal.

Registration of capital stock

    The bill also would require the housing-related GSEs to 
register at least one class of their capital stock with the SEC 
under the Securities Act of 1934. Registering under this act 
involves standardized disclosure of certain financial 
information but does not include payment of fees associated 
with other securities laws. According to the SEC, Fannie Mae 
has registered, Freddie Mac intends to do so in the near 
future, and the FHLBs are expected to register by August 2005. 
Therefore, the direct cost to the GSEs to comply with the 
mandate would be minimal.
    Estimate prepared by: Federal Costs: Susanne S. Mehlman; 
Revenues: Mark Booth; Impact on State, Local, and Tribal 
Governments: Sarah Puro; and Impact on the Private Sector: 
Paige Piper/Bach.
    Estimate approved by: Robert A. Sunshine, Assistant 
Director for Budget Analysis and G. Thomas Woodward, Assistant 
Director for Tax Analysis.

                       Federal Mandates Statement

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

                      Advisory Committee Statement

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

                   Constitutional Authority Statement

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

                  Applicability to Legislative Branch

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

                  Exchange of Committee Correspondence

                          House of Representatives,
                            Committee on Government Reform,
                                     Washington, DC, July 14, 2005.
Hon. Michael G. Oxley,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: On May 25, the Committee on Financial 
Services ordered H.R. 1461, ``Federal Housing Finance Reform 
Act of 2005,'' reported to the House. Thank you for consulting 
with the Committee on Government Reform on those matters in 
H.R. 1461 within the Committee's jurisdiction including 
provisions regarding the civil service and the Freedom of 
Information Act. I am writing to confirm our mutual 
understanding with respect to the consideration of H.R. 1461.
    In the interest of expediting the House's consideration of 
H.R. 1461, the Committee on Government Reform will not request 
a sequential referral of the bill. However, the Committee does 
so only with the understanding that this procedural route will 
not prejudice the Committee's jurisdictional interest and its 
prerogatives in this bill or similar legislation.
    I respectfully request your support for the appointment of 
outside conferees from the Committee on Government Reform 
should H.R. 1461 or a similar Senate bill be considered in 
conference with the Senate. Finally, I request that you include 
our exchange of letters on this matter in the Financial 
Services Committee Report on H.R. 1461 and in the Congressional 
Record during consideration of this bill on the House floor. 
Thank you for your attention to these matters.
            Sincerely,
                                               Tom Davis, Chairman.
                                ------                                

                          House of Representatives,
                           Committee on Financial Services,
                                     Washington, DC, July 14, 2005.
Hon. Tom Davis,
Chairman, Committee on Government Reform,
Rayburn House Office Building, Washington, DC.
    Dear Chairman Davis: Thank you for your letter concerning 
H.R. 1461, the ``Federal Housing Finance Reform Act of 2005,'' 
which the Committee on Financial Services has ordered reported. 
This bill will be considered by the House shortly.
    I want to confirm our mutual understanding with respect to 
the consideration of this bill. I acknowledge that portions of 
the bill as reported fall within the jurisdiction of the 
Committee on Government Reform, and I appreciate your 
cooperation in moving the bill to the House floor 
expeditiously. I further agree that your decision to not to 
proceed on this bill will not prejudice the Committee on 
Government Reform with respect to its prerogatives on this or 
similar legislation. I would support your request for conferees 
on those provisions within your jurisdiction in the event of a 
House-Senate conference.
    I will include a copy of this letter and your response in 
the Congressional Record and in the Committee on Financial 
Services report on the bill. Thank you again for your 
assistance.
            Yours truly,
                                        Michael G. Oxley, Chairman.

             Section-by-Section Analysis of the Legislation


Section 1. Short title

    This section establishes the short title of the bill, the 
``Federal Housing Finance Reform Act of 2005.''

Section 2. Definitions

    This section defines various terms referred to in the bill, 
including ``regulated entities'' that refer to Fannie Mae, 
Freddie Mac, and the Federal Home Loan Banks.

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


            Subtitle A--Improvement of Safety and Soundness


Section 101. Establishment of the Federal Housing Finance Agency

    Creates the Federal Housing Finance Agency as an 
independent Agency of the Federal government, headed by a 
presidentially appointed Director, to oversee Fannie Mae, 
Freddie Mac and the Federal Home Loan Bank System. The Director 
has a term of 5 years and can be removed only for cause. There 
are three Deputy Directors, appointed by the Director, for the 
Division of Enterprise Regulation, the Division of Federal Home 
Loan Bank Regulation, and for Housing.

Section 102. Duties and authorities of Director

    The principal duties of the Director will be to oversee the 
operations of the regulated entities and ensure their safe and 
sound operation as well as oversee their housing mission. 
Regarding their housing mission, the Director must ensure that 
``the operations and activities of each regulated entity foster 
liquid, efficient, competitive, and resilient national housing 
finance markets that minimize the cost of housing finance.'' 
The phrase ``minimize the cost of housing finance'' is not 
intended to be a separate or additional duty, but simply 
acknowledges that lower housing costs are a natural consequence 
of liquid, efficient, competitive, and resilient national 
housing finance markets. The Director will establish prudential 
management and operations standards for each regulated entity. 
The Director is given enforcement authority for failure to meet 
those standards and will have general regulatory authority.

Section 103. Housing Finance Oversight Board

    A board, consisting of the Director, as chair, the 
Secretaries of Treasury and HUD, and two additional appointed 
members, will advise the Director on strategies and policies in 
carrying out the duties of the Director. The additional 
directors are presidentially appointed, have a term of 3 years, 
and can be removed only for cause. The board meets by notice of 
the Director, but at least every three months.

Section 104. Authority to require reports by regulated entities

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

Section 105. Disclosure of charitable contributions by enterprises

    The enterprises must submit annually to the Director a 
report on the total value of contributions made by the 
enterprise to non-profit organizations during its previous 
fiscal year. This report must also include contributions given 
to charities affiliated with enterprise insiders.

Section 106. Assessments

    Permits the Agency to obtain funding for reasonable costs 
and expenses on an annual basis through assessments on the 
regulated entities. The amounts received by the Director are 
not to be considered government funds or appropriated monies. 
In making annual assessments and disbursing funds for agency 
expenses, the Director should, as much as possible, have 
assessments from Fannie Mae and Freddie Mac be used for 
supervision of those regulated entities and assessments from 
the Federal Home Loan Banks be used for supervision of those 
entities.

Section 107. Examiners and accountants

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

Section 108. Prohibition and withholding of executive compensation

    Grants the Agency the authority to require a regulated 
entity to withhold compensation for wrongdoing by an executive 
of a regulated entity. The Agency may take into consideration 
any factors it deems relevant in making a determination to 
withhold compensation. The approval of an agreement or contract 
does not preclude the Agency's ability to make such a 
determination.

Section 109. Reviews of regulated entities

    The Director may contract with any entity that the Director 
considers appropriate to conduct a review.

Section 110. Regulations and orders

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

Section 111. Risk-based capital requirements

    The Agency is authorized to establish risk-based capital 
requirements for the regulated entities to ensure they operate 
in a safe and sound manner with sufficient permanent capital to 
support risk-taking. This section does not eliminate current 
risk-based capital regulations, which will remain in effect 
unless amended by the Director.

Section 112. Minimum and critical capital levels

    The Director is permitted to raise minimum capital levels, 
by regulation, to ensure the regulated entities operate in a 
safe and sound manner, notwithstanding their capital 
classifications. The Director may, by order, also require 
temporary increases in minimum capital or, by order or 
regulation, require that additional capital be held for a 
particular program. The Director will periodically review the 
capital levels of the regulated entities and may, by 
regulation, make adjustments based on the review. The Director 
cannot lower minimum capital levels below current statutory 
levels.

Section 113. Review of and authority over enterprise assets and 
        liabilities

    The Director will periodically review the assets and 
liabilities of Fannie Mae and Freddie Mac and, upon review and 
notwithstanding capital classifications, may require the 
disposition or acquisition of certain assets and liabilities, 
if the Director determines such action is consistent with the 
safety and soundness or mission of the enterprise.

Section 114. Corporate governance of enterprises

    This section codifies the recent rulemaking by OFHEO for 
improvements in corporate governance, regarding boards of 
directors, compensation, codes of conduct, audits, compliance, 
risk management, and other matters.

Section 115. Required registration under Securities Exchange Act of 
        1934

    Requires each regulated entity to register at least one 
class of stock with the SEC.

Section 116. Financial Institutions Examination Council

    The Director is provided membership on the Federal 
Financial Institutions Examination Council (FFIEC), which 
prescribes uniform standards for examination of financial 
institutions, with federal financial regulators as members.

Section 117. Guarantee fee study

    The Government Accountability Office (GAO), in consultation 
with federal financial regulators and HUD, will, within one 
year of enactment, submit to Congress a study concerning the 
pricing, transparency, and reporting of Fannie Mae, Freddie 
Mac, and the Federal Home Loan Banks regarding guarantee fees 
and the practices of other participants in the business of 
mortgage purchases and securitization.

Section 118. Conforming amendments

    Makes changes that are necessary to conform existing law 
with new provisions in H.R. 1461, such as eliminating 
references to the ``Office of Federal Housing Enterprise 
Oversight'' and replacing them with the ``Federal Housing 
Finance Agency,'' striking sections made unnecessary by earlier 
parts of the bill, and striking outdated provisions pertaining 
to the issuance of regulations.

             Subtitle B--Improvement of Mission Supervision


Section 121. Transfer of program and activities approval and housing 
        goal oversight

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

Section 122. Review by Director of new programs and activities of 
        enterprises

    An enterprise may not undertake a new program, including a 
pilot program, until there has been a determination by the 
Director, following public notice and a 30-day comment period, 
that the new program is permissible. The Director may approve, 
or conditionally approve, a new program, only if: (1) the new 
program does not contravene and is not inconsistent with this 
Act or the enterprise's chartering act, taking into 
consideration the terms ``mortgage loan origination'' and 
``secondary mortgage market;'' (2) is not inconsistent with the 
safety and soundness of the enterprise; and (3) is in the 
public interest. The Director may not prevent an enterprise 
from continuing to offer the automated underwriting system in 
existence on the date of enactment or continuing to engage in 
counseling or education activities. The Committee does not 
intend that the regulations required under new Section 1303(16) 
would prohibit Fannie Mae or Freddie Mac from offering existing 
automated loan underwriting systems to any originator of 
mortgage loans including mortgage brokers. Nonmaterial changes 
to automated underwriting systems would not be subject to new 
program or new activity review under this section.
    The Director may prohibit a new business activity, if: (1) 
it contravenes or is inconsistent with this Act or the 
enterprise's chartering act; (2) is inconsistent with the 
safety and soundness of the enterprise; or (3) is not in the 
public interest. Notice of new business activities must be 
filed with the Director, who has 30 days to approve, 
conditionally approve, or disapprove any new activity. If the 
Director does not act within the 30-day time period, the 
enterprise may commence the new activity. Immediately upon 
receipt of the notice of the new activity, the Director must 
determine if the proposed activity consists of, relates to, or 
involves a new program. If such a determination is made, the 
approval procedures for new programs will apply.
    Business activities of the enterprises mean any offering, 
undertaking, transacting, conducting, or engaging in any 
conduct, activity or product. New activities are material 
changes to activities engaged in on the effective date and any 
activities that the enterprises have not been authorized to 
undertake. The Director is also required to define the terms 
``mortgage loan origination'' and ``secondary mortgage market'' 
consistent with the chartering acts. None of this section's 
provisions limits the Director's ability to review existing 
programs or activities to ensure that they are being conducted 
in a safe and sound manner and in compliance with the mission 
of the enterprises.

Section 123. Conforming loan limit

    Subsections (a) and (b) of this section update statutory 
language from 1981 that set conforming loan limits for Fannie 
Mae and Freddie Mac, and provided for adjustments upward 
through an index/housing survey. While the conforming loan 
limit has been raised every year since 1981, this section 
merely inserts 2005 conforming loan limits that were set by the 
current regulator at $359,650 for a one-unit single family 
residence; $460,400 for a two-unit family residence; $556,500 
for a three-unit family residence and $691,600 for a four-unit 
family residence. The subsections allow for these limits to be 
adjusted annually, starting on January 1 after the effective 
date of this legislation, to reflect increases and, for the 
first time, decreases in housing prices, and a new method for 
establishing annual adjustments authorized in subsection (c).
    These subsections also authorize Fannie Mae and Freddie Mac 
to further increase loan limits above the conforming loan 
limits in an area in which the median home price is greater 
than the conforming loan limit. The enterprises may adjust loan 
limits in any such area up to the lesser of 150 percent of the 
conforming loan limit or the area median home price. This 
increase applies only to mortgages on which are based 
securities issued and sold by an enterprise. This provision is 
different than current law that provides similar loan limit 
adjustments for Alaska, Hawaii, Guam and the Virgin Islands set 
at 150 percent of the conforming loan limit, without any 
relationship to median home prices.
    Subsection (c) requires the Director to develop a Housing 
Price Index, which would be subject to a GAO audit on the 
methodology and timing of the index followed by a report to 
Congress. Subsection (d) requires the Director to conduct a 
study, within six months of the effective date, of issues 
related to loan limits in high cost areas. If the study 
concludes that the restriction only to mortgages securitized by 
an enterprise causes an increase in the cost to borrowers, the 
Director would have authority to terminate restrictions.
    Subsection (e) allows adjustment of conforming loan limits 
under current law during the interim period between the 
enactment and effective dates to account for increases in home 
prices under the existing index.

Section 124. Annual housing report regarding regulated entities

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

Section 125. Revision of housing goals

    This section eliminates the current housing goals and 
replaces them with three single-family housing goals and a 
multifamily special affordable housing goal, to be established 
annually. A deadline for the annual goals must be adopted to 
allow sufficient planning by the enterprises to meet the goals.
    In establishing and implementing the goals, the Director 
must require the enterprises to disclose appropriate 
information to allow the Director to assess if there are any 
disparities in interest rates between minorities and non-
minorities of similar creditworthiness. If the Director 
determines that interest rate disparities exist, those findings 
must be reported to Congress and the Director must instruct the 
enterprise to take appropriate action to remedy the interest 
rate disparities identified.
    This section requires the Director to establish three 
single-family purchase goals for conventional, conforming, 
single-family, owner-occupied, purchase money mortgages, 
financing housing for: (1) families with incomes of 80 percent 
or less of area median income (AMI); (2) families in census 
tracts with median incomes of 80 percent or less of AMI and 
families with incomes less than 100 percent of AMI who reside 
in minority tracts; and (3) families with incomes of 50 percent 
or less of AMI.
    Compliance with the single-family goals for each year will 
be measured by whether the numerical target established by the 
Director is met or exceeded. Such targets are to be established 
prospectively, using a rolling average of data derived from the 
Home Mortgage Disclosure Act (HMDA) for the three immediately 
preceding years for which information under HMDA is publicly 
available, except that the Director may increase such targets 
to reflect expected changes in market performance.
    The Director will notify each enterprise 30 days prior to 
determination of compliance with the single-family goals, and 
before public notice. The enterprises have 30 days from receipt 
of notice to comment on the determination.
    The Director is required to establish a Multifamily Special 
Affordable Goal for each of the following types of multifamily 
housing: (1) mortgages that finance dwelling units for families 
with incomes of 50 percent or less of AMI, and (2) mortgages 
that finance dwelling units assisted by the low-income housing 
tax credit, which are affordable to under 60 percent of AMI. 
The Director is also instructed to establish additional 
requirements within the Multifamily Special Affordable Goal for 
small loans measured by either mortgage amounts or number of 
dwelling units in the project or both.
    The establishment of the multifamily goals must be based on 
certain statutory factors including national multifamily 
mortgage credit needs, the size of the multifamily market, the 
ability of enterprises to lead the industry in making 
multifamily mortgage credit available for underserved markets, 
such as for small multifamily projects of 5-50 units, 
multifamily projects in need of rehabilitation, and properties 
located in rural areas defined to include micropolitan areas 
and tribal lands.
    The Director is instructed to determine compliance with 
both the Multifamily Special Affordable Goal and the additional 
requirement to purchase smaller multifamily loans.
    Under this section, an enterprise may petition the 
Director, in writing, for a reduction in the housing goals. The 
Director may reduce the goal level only if market and economic 
conditions or the financial condition of the enterprise 
requires such action, or if efforts to meet the goal would 
result in liquidity constraints, overinvestment in certain 
market segments, or other consequences contrary to the 
enterprise's purpose. The Director is required to make a 
determination regarding any proposed reduction within 30 days 
of receipt of the petition. The 30-day period may be extended, 
only if the Director requires additional information from the 
enterprise. A denial from the Director to reduce the level of 
the goal may be appealed in the courts.

Section 126. Duty to serve underserved markets

    This section adds a duty to increase liquidity of mortgage 
investments and improve the distribution of investment capital 
available for mortgage financing for underserved markets. This 
section instructs the enterprises to undertake activities 
relating to mortgages on housing for very low (50 percent and 
less of AMI), low (80 percent and less of AMI) and moderate 
(100 percent and less of AMI) income families.
    To meet this duty, each enterprise must lead the industry 
in developing loan products and flexible underwriting 
guidelines to facilitate a secondary market in manufactured 
housing, preservation of affordable housing (including through 
current government programs), and rural housing. The Director 
is also authorized to establish other underserved markets that 
lack adequate credit through conventional lending sources.
    Within six months of the effective date, the Director must 
establish a manner for evaluating compliance of the enterprises 
under each of the three categories of the duty to serve 
provisions. When evaluating compliance, the Director will take 
into consideration: (1) the development of loan products and 
more flexible underwriting guidelines; (2) the extent of 
outreach to qualified loan sellers in underserved markets; and 
(3) the volume of loans purchased in such underserved markets.
    The Director must report to Congress annually on this 
evaluation and the duty to serve provisions are enforceable 
under the same provisions as the housing goals.

Section 127. Monitoring and enforcing compliance with housing goals

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

Section 128. Affordable housing fund

    Subsections (a) through (d) establish the affordable 
housing fund, outline eligible activities, and specify the 
amounts to be allocated by each enterprise.
    The purpose of the affordable housing fund is to: (1) 
increase homeownership for extremely low-income families, 
defined as 30 percent of area median income (AMI) and very low-
income families, defined as 50 percent of AMI; (2) increase 
investment in housing in low-income areas and areas designated 
as qualified census tracts or an area of chronic economic 
distress; (3) increase and preserve the supply of rental and 
owner-occupied housing for extremely low- and very low-income 
families; and (4) increase investment in economic and community 
development in economically underserved areas. ``Economically 
underserved areas'' are defined as census tracts where 20 
percent of the population is below the poverty line or median 
family income does not exceed the greater of 80 percent of AMI 
or 80 percent of state median income.
    In 2006, each enterprise will reserve 3.5 percent of its 
2005 after-tax income for the fund. After establishing the 
affordable housing fund, each enterprise allocates 5 percent of 
after-tax income annually to the fund, provided each enterprise 
is adequately capitalized and generates after-tax income for 
the preceding year.
    Fund monies will be used only for: (1) the production, 
preservation, and rehabilitation of rental housing for 
extremely low- and very low-income families; (2) the 
production, preservation and rehabilitation of housing for 
homeownership, such as down payment assistance, closing costs, 
and assistance for interest-rate buy-downs, for extremely low- 
and very-low income families who are first-time homebuyers; and 
(3) leveraged grants. At least 10% of the affordable housing 
fund monies must be used for homeownership activities.
    In subsection (e), each enterprise is authorized to 
distribute no more than 12.5 percent of the overall fund monies 
for leveraged grants. Eligible purposes for leveraged grants 
are: (1) development, preservation, rehabilitation, or purchase 
of affordable housing that meets underserved needs for 
affordable housing; and (2) community or economic development 
activities in economically underserved areas; or (3) a 
combination of those two. Recipients of leveraged grants shall 
include only certain entities, such as a low income housing 
funds, state or local housing finance agencies, non-profit 
affordable housing organizations, community development 
financial institutions, national non-profit housing 
intermediaries, community development corporations, and 
community development entities.
    Eligible uses of leveraged grants are limited to providing 
loan loss reserves, capitalizing a revolving loan fund, 
providing equity capitalization to an affordable housing fund, 
capitalizing a community development or economic development 
fund, establishing risk sharing loans, and funding specific 
investment plans. The distribution of leveraged grants is 
subject to an application process established through 
regulation by the Agency and any returns from leveraged grants 
accrue to the affordable housing fund.
    In subsection (f), any amounts allocated from the 
affordable housing fund must be used or committed within two 
years, and any return on investment from fund monies shall be 
used only for eligible uses of the fund. The Director shall 
issue regulations to ensure that monies may not be used for 
administrative, outreach, or other costs incurred by the 
enterprises or any fund recipients, except that the Director 
may allow certain administrative costs to be used by the 
enterprises for maintaining the affordable housing fund and 
carrying out the program. This subsection also specifically 
prohibits the use of the affordable housing fund monies to 
count toward housing goals, unless non-fund monies are used to 
purchase the mortgages.
    The Director, through regulation, must ensure that funds 
awarded to a national non-profit housing intermediary are not 
used to distribute sub-grants to other non-profit entities.
    Subsection (g) requires the enterprises to submit quarterly 
reports to the Director and the Affordable Housing Board 
outlining the activities funded through the affordable housing 
fund. These reports will be made publicly available. The 
Affordable Housing Board shall review each report to determine 
whether the funded activities are consistent with the criteria 
established by the Director. Any failure to use these funds 
properly will result in an enterprise having to replace those 
funds.
    Subsection (j) requires the Director to appoint an 
Affordable Housing Board comprised of 7, 9, or 11 persons. The 
Board shall at least include the Director, the Secretaries of 
HUD and Agriculture, two persons from for-profit housing 
organizations, and 2 persons from non-profit housing 
organizations. The non-governmental members of the Affordable 
Housing Board shall be limited to a term of three years. The 
Affordable Housing Board shall meet at least four times a year 
to determine extremely low- and very low-income housing needs 
and to provide advice to the Director on establishing the 
selection criteria for the affordable housing fund. Additional 
tasks of the Affordable Housing Board shall include a review of 
the operations under the affordable housing fund and a review 
of the quarterly reports submitted by the enterprises that 
outline activities funded by the affordable housing fund.
    The Director shall issue regulations to carry out the 
affordable housing fund, including an annual audit of each 
enterprise's affordable housing fund activities. The Director 
shall also issue regulations outlining that the selection of 
funded activities shall be based on a specific criteria, 
including a prioritization of funding based upon greatest 
impact, geographic diversity, the ability of an entity to 
obligate amounts and undertake activities in a timely manner, 
and, in the case of rental housing, the extent and duration for 
which rents will remain affordable.

Section 129. Consistency with mission

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

Section 130. Enforcement

    This section expands the enforcement authority currently 
provided the HUD Secretary with respect to enforcement of the 
enterprises' housing goals. The expanded authority allows the 
Director to issue and serve a notice of charges and to impose 
cease and desist and civil money penalties on an enterprise, if 
the Director determines that the enterprise has: (1) failed to 
meet a housing goal; (2) failed to submit a report under 
section 1314 or certain other sections; (3) failed to submit an 
acceptable housing plan, if required; or (4) fails to comply 
with the plan or any other order, rule, or regulation under 
sections 1321 through 1348 of the Housing and Community 
Development Act of 1992, as amended by this bill.
    The Director may directly seek enforcement in the United 
States District Court for the District of Columbia or the 
United States District Court within the jurisdiction of which 
the headquarters of the enterprise is located.

Section 131. Conforming amendments

    Makes changes that are necessary to conform existing law 
with new provisions in H.R. 1461, such as eliminating 
references to the ``Secretary of HUD'' and replacing them with 
the ``Director,'' striking sections made unnecessary by earlier 
parts of the bill, and striking outdated provisions pertaining 
to the issuance of regulations.

                  Subtitle C--Prompt Corrective Action


Section 141. Capital classifications

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

Section 142. Supervisory actions applicable to undercapitalized 
        regulated entities

    If a regulated entity becomes undercapitalized, it will be 
monitored for compliance with a capital restoration plan and 
will require prior approval of any new programs or activities. 
Additionally, the Director will have the authority to restrict 
the asset growth of an undercapitalized entity. 
Undercapitalized entities may not acquire any interest in any 
entity or engage in a new program or activity without prior 
approval from the Director. If the Director determines it is 
necessary, the Director also may use authority and take actions 
applicable to significantly undercapitalized enterprises.

Section 143. Supervisory actions applicable to significantly 
        undercapitalized regulated entities

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

Section 144. Authority over critically undercapitalized regulated 
        entities

    The Director may establish a conservatorship or 
receivership over critically undercapitalized entities for the 
purpose of reorganizing, rehabilitating, or winding up the 
affairs of a regulated entity. The grounds for appointing a 
conservator or receiver include: assets are insufficient to 
cover obligations; there is a substantial dissipation of assets 
due to violations of law or unsafe or unsound practices; an 
unsafe or unsound condition; violations of cease-and-desist 
orders; concealment of books, papers, records or assets; the 
inability to meet obligations; losses that will deplete all of 
its capital; any violation of law likely to cause insolvency or 
substantial dissipation of assets or earnings; by resolution of 
a regulated entity's board of directors; undercapitalization; 
critical undercapitalization; or a determination that an entity 
is guilty of money laundering.
    The Agency, as conservator or receiver, may issue 
regulations as appropriate for the conduct of the 
conservatorship or receivership. The Agency succeeds to all the 
rights, titles, powers, and privileges of the regulated entity 
and of any stockholder, officer, or director of such regulated 
entity, and title to the books, records, and assets of any 
other legal custodian of such regulated entity. The Agency 
shall take over all assets and obligations of the regulated 
entity, perform all functions of the regulated entity, and 
preserve and conserve the assets and property of the regulated 
entity.
    The Agency, as conservator, may take such action as may be 
necessary to put the regulated entity into a sound and solvent 
condition, and to carry out the business of the entity. As 
receiver, the Agency may place a regulated entity into 
liquidation having due regard for the housing finance market 
and may organize a successor entity.
    The Agency, as conservator or receiver, may transfer any 
asset or liability of the regulated entity in default without 
any approval, assignment or consent. Any Federal Home Loan Bank 
may acquire the assets of any Bank with the approval of the 
Agency. The Agency, as conservator or receiver, shall pay all 
valid obligations of the regulated entity, to the extent 
proceeds of operations or sales are available. The Agency shall 
have the authority to issue subpoenas for the purposes of 
carrying out its authorities, and may contract for services 
relating to the carrying out of its functions, actions, 
activities, or duties. The Agency also is granted any 
incidental authorities it may need to carry out its powers as 
conservator or receiver.
    The Agency, as receiver, must promptly publish and mail 
notice to the creditors of the regulated entities to present 
their claims to the receiver. The receiver may allow or 
disallow claims by creditors according to the provisions set 
forth in this section. The right of a conservator or receiver 
shall be subject to the limitations on the powers of a receiver 
under section 402 through 407 of the Federal Deposit Insurance 
Corporation Improvement Act of 1991 concerning financial system 
risk. Also, mortgages, or interest in a pool of mortgages, held 
in trust, custodial, or agency capacity by a regulated entity 
shall not be available to satisfy the claims of creditors 
generally. Such mortgages or interest in a pool of mortgages 
shall be held by the conservator or receiver for the beneficial 
owners of such mortgages in accordance with the terms of the 
agreement creating such trust, custodial, or agency agreement.
    The Agency as conservator or receiver may disaffirm or 
repudiate any contract or lease to which the regulated entity 
is a party the performance of which the conservator or receiver 
determines to be burdensome and the repudiation of which will 
promote the orderly administration of the affairs of the 
regulated entity. Specific provisions are established for the 
treatment of qualified financial contracts, including swap 
agreements and master agreements.
    The Agency may organize a limited-life regulated entity 
(LLRE) if a regulated entity is in default or it is in danger 
of default. The Director shall grant a temporary charter to the 
LLRE and the LLRE shall assume the liabilities of the regulated 
entity, purchase the assets of the regulated entity, and 
perform any other temporary functions which the Agency may 
prescribe. The Agency will not have the authority to revoke the 
charter of a regulated entity.

Section 145. Conforming amendments

    This section makes changes that are necessary to conform 
existing law with the new provisions included in H.R. 1461.

                    Subtitle D--Enforcement Actions


Section 161. Cease-and-desist proceedings

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

Section 162. Temporary cease-and-desist proceedings

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

Section 163. Prejudgment attachment

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

Section 164. Enforcement and jurisdiction

    The Director is granted independent litigation authority to 
enforce the provisions under this title.

Section 165. Civil money penalties

    Violations of this title, the authorizing statutes, or any 
order, condition, rule, regulation, or the engaging in unsafe 
or unsound practices shall result in civil money penalties of 
not more than $10,000 for each day which the violation 
continues.
    If a regulated entity or regulated entity affiliated party 
commits any violation described above, recklessly engages in 
unsafe or unsound practices, or breaches any fiduciary duty and 
these actions are part of a pattern of misconduct, will result 
in more than a minimal loss, or result in a pecuniary gain or 
other benefit, the party shall forfeit and pay a civil penalty 
of not more than $50,000 for each day which the violation 
continues.
    If a regulated entity or regulated entity affiliated party 
knowingly commits any violation described above, engages in 
unsafe or unsound practices, or breaches any fiduciary duty, 
and knowingly and recklessly causes a substantial loss to such 
regulated entity results in a substantial pecuniary gain or 
other benefit, the party by reason of such violation, practice, 
or breach shall forfeit the gain and pay a civil penalty in an 
amount not to exceed the maximum amount permitted for each day 
which the violation continues. The maximum daily amount for any 
civil money penalty that can be assessed is not to exceed 
$2,000,000 for any individual and shall be $2,000,000 for any 
regulated entity.

Section 166. Removal and prohibition authority

    The Director may by order suspend a party from office or 
prohibit such party from further participation in the affairs 
of the regulated entity, if the Director determines that the 
party has violated a law, order, or condition; engaged in any 
unsafe and unsound activity; or committed a violation of 
fiduciary duty and that such action is necessary for the 
protection of the regulated entity, there has been an adverse 
financial impact on the entity, or such breach was willful and 
dishonest.
    A party that is suspended and/or prohibited from 
participation in the affairs of a regulated entity under this 
section may apply to the courts for a stay of such suspension.

Section 167. Criminal penalty

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

Section 168. Subpoena authority

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

Section 169. Conforming amendments

    This section includes various conforming amendments.

                     Subtitle E--General Provisions


Section 181. Presidentially appointed directors of enterprises

    The boards of Fannie Mae and Freddie Mac will no longer 
have presidentially appointed directors. The size of the boards 
may vary from 7-15 members.

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

    Within a year, the Agency must submit a report to Congress 
on the portfolio holdings of Fannie Mae and Freddie Mac, a 
description of risk implications, and analyses of safety and 
soundness, mission, and systemic risk factors.

Section 183. Conforming and technical amendments

    This section includes various conforming amendments.

Section 184. Study of alternative secondary market systems

    The Agency, in consultation with the Federal Reserve, the 
Department of Treasury, and the Department of Housing and Urban 
Development, shall conduct a study of the effects on financial 
and housing finance markets of alternatives to the current 
secondary market system for housing finance.

Section 185. Effective date

    Except as specifically provided, this legislation shall 
take effect on the expiration of the 1-year period beginning on 
the date of enactment.

                   TITLE II--FEDERAL HOME LOAN BANKS


Section 201. Definitions

    New definitions are provided.

Section 202. Directors

    The board of a Federal Home Loan Bank will have 13 elected 
directors, unless the Director otherwise decides, with terms of 
four years. The members of a Federal Home Loan Bank shall have 
a majority of the board seats. One-third of the directors will 
be independent with at least 2 being public interest directors. 
Each Bank may pay directors for reasonable compensation and 
expenses.

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

    The Federal Housing Finance Board is abolished and replaced 
by the Federal Housing Finance Agency.

Section 204. Joint activities of banks

    Any two or more Federal Home Loan Banks may establish a 
joint office for the purpose of performing functions for or 
providing services to the Banks on a common or collective 
basis. This section is not intended to broaden the activities 
of the Banks, but to provide the Banks a means through which 
they can more efficiently conduct some of their business 
operations.

Section 205. Sharing of information between Federal Home Loan Banks

    The Director shall prescribe rules to ensure that each 
Federal Home Loan Bank has access to information that the Bank 
needs to determine the nature and extent of its joint and 
several liability within the Bank System.

Section 206. Reorganization of banks and voluntary merger

    Any Federal Home Loan Bank may merge with another upon 
approval of their boards and of the Director of the Agency.

Section 207. Securities and Exchange Commission disclosure

    The Federal Home Loan Banks are exempted from compliance 
with some disclosures under the Securities and Exchange Act of 
1934 and some SEC regulations relating to capital stock 
registered pursuant to this act and other obligations.

Section 208. Community financial institution members

    Eligibility for Federal Home Loan Bank members to use 
advances for small businesses, farms, and agribusinesses, or 
use such loans as collateral for advances, is raised to $1 
billion in assets and such community financial institutions may 
also use advances for community development lending and such 
loans as collateral for advances.

Section 209. Technical and conforming amendments

    Makes changes that are necessary to conform existing law 
with new provisions included in H.R. 1461, such as eliminating 
references to the ``Office of Federal Housing Enterprise 
Oversight'' and the ``Federal Housing Finance Board,'' 
replacing them with the ``Director of the Federal Housing 
Finance Agency,'' setting the pay scale for the Director and 
Deputy Directors, striking sections made unnecessary by other 
parts of the bill, and establishing an Office of the Inspector 
General.

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

    GAO is required to study the use of the Federal Home Loan 
Banks' Affordable Housing Program to fund long-term care 
facilities for low- and moderate-income individuals and its 
applicability to the affordable housing funds of the 
enterprises.

Section 211. Effective date

    This title will be effective one year from the date of 
enactment.

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


       Subtitle A--Office of Federal Housing Enterprise Oversight


Section 301. Abolishment of OFHEO

    The Office of Federal Housing Enterprise Oversight (OFHEO) 
is abolished one year after the date of enactment. During that 
one-year period, OFHEO will continue to have oversight and 
regulatory authority for the safety and soundness of Fannie Mae 
and Freddie Mac; OFHEO will fulfill all its current duties 
during this time period.

Section 302. Continuation and coordination of certain regulations

    All regulations and other regulatory actions relating to 
the oversight of the enterprises will remain in effect and be 
enforceable at the Agency.

Section 303. Transfer and rights of employees of OFHEO

    Employees transferred will be guaranteed a position with 
the Agency and will retain their benefits for one year 
following the transfer.

Section 304. Transfer of property and facilities

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

               Subtitle B--Federal Housing Finance Board


Section 321. Abolishment of the Federal Housing Finance Board

    The Federal Housing Finance Board is abolished one year 
after the date of enactment. During that one-year period, the 
Finance Board will continue to have oversight and regulatory 
authority for the safety and soundness and mission of the 
Federal Home Loan Bank System.

Section 322. Continuation and coordination of certain regulations

    All regulations and other regulatory actions relating to 
the oversight of the Federal Home Loan Banks will remain in 
effect and be enforceable at the Agency.

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

    Employees transferred will be guaranteed a position with 
the Agency and will retain their benefits for one year 
following the transfer.

Section 324. Transfer of property and facilities

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

        Subtitle C--Department of Housing and Urban Development


Section 341. Termination of enterprise-related functions

    The Secretary of HUD, in consultation with the Director of 
OFHEO, will determine, within 6 months of enactment, which 
functions and employees of HUD are ``enterprise-related'' and 
will transfer to the Agency on the effective date. During the 
one-year period between the enactment and effective dates, HUD 
will continue to oversee the affordable housing goals, new 
programs, and mission of the enterprises.

Section 342. Continuation and coordination of certain regulations

    All regulations and other regulatory actions relating to 
oversight of the enterprises will remain in effect and be 
enforceable at the Agency.

Section 343. Transfer and rights of employees

    Employees transferring will be guaranteed a position in the 
Agency and will retain their benefits for one year following 
the transfer.

Section 344. Transfer of appropriations, property, and facilities

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

         Changes in Existing Law Made by the Bill, as Reported

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

HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1992

           *       *       *       *       *       *       *



TITLE XIII--GOVERNMENT SPONSORED ENTERPRISES

           *       *       *       *       *       *       *


SEC. 1303. DEFINITIONS.

  For purposes of this title:
          (1)  * * *
          (2) Agency.--The term ``Agency'' means the Federal 
        Housing Finance Agency.
          (3) Authorizing statutes.--The term ``authorizing 
        statutes'' means--
                  (A) the Federal National Mortgage Association 
                Charter Act;
                  (B) the Federal Home Loan Mortgage 
                Corporation Act; and
                  (C) the Federal Home Loan Bank Act.
          (4) Board.--The term ``Board'' means the Housing 
        Finance Oversight Board established under section 
        1313B.
          (5) Business activity.--The term ``business 
        activity'' means, with respect to an enterprise, any 
        offering, undertaking, transacting, conducting, or 
        engaging in any conduct, activity, or product by the 
        enterprise, as the Director shall provide.
          [(2)] (6) Capital distribution.--
                  (A) In general.--The term ``capital 
                distribution'' means--
                          (i) any dividend or other 
                        distribution in cash or in kind made 
                        with respect to any shares of, or other 
                        ownership interest in, an enterprise, 
                        except a dividend consisting only of 
                        shares of [the enterprise] the 
                        regulated entity;
                          (ii) any payment made by an 
                        enterprise to repurchase, redeem, 
                        retire, or otherwise acquire any of its 
                        shares, including any extension of 
                        credit made to finance an acquisition 
                        by [the enterprise] the regulated 
                        entity of such shares; and

           *       *       *       *       *       *       *

                  (B) Exception.--Any payment made by an 
                enterprise to repurchase its shares for the 
                purpose of fulfilling an obligation of [the 
                enterprise] the regulated entity under an 
                employee stock ownership plan that is qualified 
                under section 401 of the Internal Revenue Code 
                of 1986 or any substantially equivalent plan, 
                as determined by the Director, shall not be 
                considered a capital distribution.
          [(3)] (7) 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.
          (8) Conforming mortgage.--The term ``conforming 
        mortgage'' means, with respect to an enterprise, a 
        conventional mortgage having an original principal 
        obligation that does not exceed the dollar limitation, 
        in effect at the time of such origination, under, as 
        applicable--
                  (A) section 302(b)(2) of the Federal National 
                Mortgage Association Charter Act; or
                  (B) section 305(a)(2) of the Federal Home 
                Loan Mortgage Corporation Act.
          [(4)] (9) Core capital.--The term ``core capital'' 
        means, with respect to an enterprise, the sum of the 
        following (as determined in accordance with generally 
        accepted accounting principles):
                  (A)  * * *

           *       *       *       *       *       *       *

          [(5)] (10) Director.--The term ``Director'' means the 
        Director of the [Office of Federal Housing Enterprise 
        Oversight of the Department of Housing and Urban 
        Development] Federal Housing Finance Agency.
          [(6)] (11) Enterprise.--The term ``enterprise'' 
        means--
                  (A)  * * *

           *       *       *       *       *       *       *

          [(7)] (12) Executive officer.--The term ``executive 
        officer'' means, with respect to [an enterprise] a 
        regulated entity, the chairman of the board of 
        directors, chief executive officer, chief financial 
        officer, president, vice chairman, any executive vice 
        president, and any senior vice president in charge of a 
        principal business unit, division, or function.
          (13) Extremely low-income.--The term ``extremely low-
        income'' means--
                  (A) in the case of owner-occupied units, 
                income not in excess of 30 percent of the area 
                median income; and
                  (B) in the case of rental units, income not 
                in excess of 30 percent of the area median 
                income, with adjustments for smaller and larger 
                families, as determined by the Secretary.
          (14) Federal home loan bank.--The term ``Federal home 
        loan bank'' means a bank established under the 
        authority of the Federal Home Loan Bank Act.
          [(8)] (15) Low-income.--The term ``low-income'' 
        means--
                  (A)  * * *
                  (B) in the case of rental units, income not 
                in excess of 80 percent of area median income, 
                with adjustments for smaller and larger 
                families, as determined by the [Secretary] 
                Director.
          (16) Low-income area.--The term ``low income area'' 
        means a census tract or block numbering area in which 
        the median income does not exceed 80 percent of the 
        median income for the area in which such census tract 
        or block numbering area is located, and, for the 
        purposes of section 1332(a)(2), shall include families 
        having incomes not greater than 100 percent of the area 
        median income who reside in minority census tracts.
          [(9)] (17) Median income.--The term ``median income'' 
        means, with respect to an area, the unadjusted median 
        family income for the area, as determined and published 
        annually by the [Secretary] Director.
          [(10)] (18) Moderate-income.--The term ``moderate-
        income'' means--
                  (A)  * * *
                  (B) in the case of rental units, income not 
                in excess of area median income, with 
                adjustments for smaller and larger families, as 
                determined by the [Secretary] Director.
          (19) Mortgage markets.--The terms ``mortgage loan 
        origination'' and ``secondary mortgage market'' shall 
        have such meanings as the Director shall, by 
        regulation, prescribe consistent with the Federal 
        National Mortgage Association Charter Act and the 
        Federal Home Loan Mortgage Corporation Act. The 
        Director shall issue such regulations not later than 
        the expiration of the 12-month period beginning on the 
        effective date under section 185 of the Federal Housing 
        Finance Reform Act of 2005, and the Director shall 
        review such regulations on a periodic basis.
          [(11)] (20) Mortgage purchases.--The term ``mortgage 
        purchases'' includes mortgages purchased for portfolio 
        or securitization.
          [(12)] (21) Multifamily housing.--The term 
        ``multifamily housing'' means a residence consisting of 
        more than 4 dwelling units.
          (22) New business activity.--The term ``new business 
        activity'' means, with respect to an enterprise, a 
        business activity that--
                  (A) is materially changed or materially 
                different from any of the business activities 
                that the enterprise was engaging in on the 
                effective date under section 185 of the Federal 
                Housing Finance Reform Act of 2005; and
                  (B) the enterprise has not previously 
                obtained authorization, pursuant to the 
                provisions of section 1321(c), to offer, 
                undertake, transact, conduct, or engage in.
          [(13)] (23) New program.--The term ``new program'' 
        means, with respect to an enterprise, any program for 
        the purchasing, servicing, selling, lending on the 
        security of, or otherwise dealing in, conventional 
        mortgages that--
                  (A)  * * *

           *       *       *       *       *       *       *

          [(14) Office.--The term ``Office'' means the Office 
        of Federal Housing Enterprise Oversight of the 
        Department of Housing and Urban Development.
          [(15) Secretary.--The term ``Secretary'' means the 
        Secretary of Housing and Urban Development.]
          (24) Regulated entity.--The term ``regulated entity'' 
        means--
                  (A) the Federal National Mortgage Association 
                and any affiliate thereof;
                  (B) the Federal Home Loan Mortgage 
                Corporation and any affiliate thereof; and
                  (C) each Federal home loan bank.
          (25) Regulated entity-affiliated party.--The term 
        ``regulated entity-affiliated party'' means--
                  (A) any director, officer, employee, or 
                controlling stockholder of, or agent for, a 
                regulated entity;
                  (B) any shareholder, affiliate, consultant, 
                or joint venture partner of a regulated entity, 
                and any other person, as determined by the 
                Director (by regulation or on a case-by-case 
                basis) that participates in the conduct of the 
                affairs of a regulated entity; and
                  (C) any independent contractor for a 
                regulated entity (including any attorney, 
                appraiser, or accountant); and
                  (D) any not-for-profit corporation that 
                receives its principal funding, on an ongoing 
                basis, from any regulated entity.
          (26) Rural areas.--The term ``rural areas'' means any 
        areas that are non-metropolitan areas (as such term is 
        defined by the Director of the Office of Management and 
        Budget), including micropolitan areas and tribal trust 
        lands.
          [(16)] (27) Single family housing.--The term ``single 
        family housing'' means a residence consisting of 1 to 4 
        dwelling units.
          [(17)] (28) State.--The term ``State'' means the 
        States of the United States, the District of Columbia, 
        the Commonwealth of Puerto Rico, the Commonwealth of 
        the Northern Mariana Islands, Guam, the Virgin Islands, 
        American Samoa, the Trust Territory of the Pacific 
        Islands, and any other territory or possession of the 
        United States.
          [(18)] (29) Total capital.--The term ``total 
        capital'' means, with respect to an enterprise, the sum 
        of the following:
                  (A)  * * *

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *


         Subtitle A--Supervision and Regulation of Enterprises

            PART 1--FINANCIAL SAFETY AND SOUNDNESS REGULATOR

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

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

[SEC. 1312. DIRECTOR.

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

[SEC. 1313. DUTY AND AUTHORITY OF DIRECTOR.

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

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

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

SEC. 1312. DIRECTOR.

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

SEC. 1313. DUTIES AND AUTHORITIES OF DIRECTOR.

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

SEC. 1313A. PRUDENTIAL MANAGEMENT AND OPERATIONS STANDARDS.

  (a) Standards.--The Director shall establish standards, by 
regulation, guideline, or order, for each regulated entity 
relating to--
          (1) adequacy of internal controls and information 
        systems taking into account the nature and scale of 
        business operations;
          (2) independence and adequacy of internal audit 
        systems;
          (3) management of credit and counterparty risk, 
        including systems to identify concentrations of credit 
        risk and prudential limits to restrict exposure of the 
        regulated entity to a single counterparty or groups of 
        related counterparties;
          (4) management of interest rate risk exposure;
          (5) management of market risk, including standards 
        that provide for systems that accurately measure, 
        monitor, and control market risks and, as warranted, 
        that establish limitations on market risk;
          (6) adequacy and maintenance of liquidity and 
        reserves;
          (7) management of any asset and investment portfolio;
          (8) investments and acquisitions by a regulated 
        entity, to ensure that they are consistent with the 
        purposes of this Act and the authorizing statutes;
          (9) maintenance of adequate records, in accordance 
        with consistent accounting policies and practices that 
        enable the Director to evaluate the financial condition 
        of the regulated entity;
          (10) issuance of subordinated debt by that particular 
        regulated entity, as the Director considers necessary;
          (11) overall risk management processes, including 
        adequacy of oversight by senior management and the 
        board of directors and of processes and policies to 
        identify, measure, monitor, and control material risks, 
        including reputational risks, and for adequate, well-
        tested business resumption plans for all major systems 
        with remote site facilities to protect against 
        disruptive events; and
          (12) such other operational and management standards 
        as the Director determines to be appropriate.
  (b) Failure To Meet Standards.--
          (1) Plan requirement.--
                  (A) In general.--If the Director determines 
                that a regulated entity fails to meet any 
                standard established under subsection (a)--
                          (i) if such standard is established 
                        by regulation, the Director shall 
                        require the regulated entity to submit 
                        an acceptable plan to the Director 
                        within the time allowed under 
                        subparagraph (C); and
                          (ii) if such standard is established 
                        by guideline, the Director may require 
                        the regulated entity to submit a plan 
                        described in clause (i).
                  (B) Contents.--Any plan required under 
                subparagraph (A) shall specify the actions that 
                the regulated entity will take to correct the 
                deficiency. If the regulated entity is 
                undercapitalized, the plan may be a part of the 
                capital restoration plan for the regulated 
                entity under section 1369C.
                  (C) Deadlines for submission and review.--The 
                Director shall by regulation establish 
                deadlines that--
                          (i) provide the regulated entities 
                        with reasonable time to submit plans 
                        required under subparagraph (A), and 
                        generally require a regulated entity to 
                        submit a plan not later than 30 days 
                        after the Director determines that the 
                        entity fails to meet any standard 
                        established under subsection (a); and
                          (ii) require the Director to act on 
                        plans expeditiously, and generally not 
                        later than 30 days after the plan is 
                        submitted.
          (2) Required order upon failure to submit or 
        implement plan.--If a regulated entity fails to submit 
        an acceptable plan within the time allowed under 
        paragraph (1)(C), or fails in any material respect to 
        implement a plan accepted by the Director, the 
        following shall apply:
                  (A) Required correction of deficiency.--The 
                Director shall, by order, require the regulated 
                entity to correct the deficiency.
                  (B) Other authority.--The Director may, by 
                order, take one or more of the following 
                actions until the deficiency is corrected:
                          (i) Prohibit the regulated entity 
                        from permitting its average total 
                        assets (as such term is defined in 
                        section 1316(b)) during any calendar 
                        quarter to exceed its average total 
                        assets during the preceding calendar 
                        quarter, or restrict the rate at which 
                        the average total assets of the entity 
                        may increase from one calendar quarter 
                        to another.
                          (ii) Require the regulated entity--
                                  (I) in the case of an 
                                enterprise, to increase its 
                                ratio of core capital to 
                                assets.
                                  (II) in the case of a Federal 
                                home loan bank, to increase its 
                                ratio of total capital (as such 
                                term is defined in section 
                                6(a)(5) of the Federal Home 
                                Loan Bank Act (12 U.S.C. 
                                1426(a)(5)) to assets.
                          (iii) Require the regulated entity to 
                        take any other action that the Director 
                        determines will better carry out the 
                        purposes of this section than any of 
                        the actions described in this 
                        subparagraph
          (3) Mandatory restrictions.--In complying with 
        paragraph (2), the Director shall take one or more of 
        the actions described in clauses (i) through (iii) of 
        paragraph (2)(B) if--
                  (A) the Director determines that the 
                regulated entity fails to meet any standard 
                prescribed under subsection (a);
                  (B) the regulated entity has not corrected 
                the deficiency; and
                  (C) during the 18-month period before the 
                date on which the regulated entity first failed 
                to meet the standard, the entity underwent 
                extraordinary growth, as defined by the 
                Director.
  (c) Other Enforcement Authority not Affected.--The authority 
of the Director under this section is in addition to any other 
authority of the Director.

SEC. 1313B. HOUSING FINANCE OVERSIGHT BOARD.

  (a) In General.--There is established the Housing Finance 
Oversight Board.
  (b) Duties.--
          (1) In general.--The Board shall advise the Director 
        with respect to overall strategies and policies in 
        carrying out the duties of the Director under this 
        title, at the request of the Director and at the 
        initiative of the Board, and shall carry out such 
        functions as otherwise provided by law.
          (2) Limitation.--The Director may not delegate to the 
        Board any of the functions, powers, or duties of the 
        Director.
  (c) Composition.--The Board shall be comprised of 5 members, 
as follows:
          (1) One member shall be the Director, who shall serve 
        as the Chairperson of the Board.
          (2) One member shall be the Secretary of the Treasury 
        or the designee of the Secretary.
          (3) One member shall be the Secretary of Housing and 
        Urban Development or the designee of the Secretary.
          (4) Two members shall be appointed by the President, 
        by and with the advice and consent of the Senate, who 
        shall include--
                  (A) one individual who has extensive 
                experience and expertise in the capital markets 
                (including debt markets), the secondary 
                mortgage market, and mortgage-backed 
                securities; and
                  (B) one individual who has extensive 
                experience and expertise in mortgage finance 
                (including single family and multifamily 
                housing mortgage finance), development of 
                affordable housing, and economic development 
                and revitalization.
  (d) Terms and Vacancies.--
          (1) Terms.--Each member of the Board pursuant to 
        paragraph (4) shall be appointed for a term of 3 years, 
        and may be removed by the President only for cause.
          (2) Vacancies.--A member of the Board appointed to 
        fill a vacancy occurring before the expiration of the 
        term for which the member's predecessor was appointed 
        shall be appointed only for the remainder of that term. 
        A member of the Board may serve after the expiration of 
        the member's term until a successor has been appointed.
  (e) Prohibition of Additional Compensation.--Notwithstanding 
any other provision of law, members of Board pursuant to 
paragraphs (1), (2), and (3) shall not receive additional 
compensation by reason of service on the Board.
  (f) Limitations.--Each member of the Board may not--
          (1) have any direct or indirect financial interest in 
        any regulated entity or regulated entity-affiliated 
        party; or
          (2) hold any office, position, or employment in any 
        regulated entity or regulated entity-affiliated party.
  (g) Full-Time Members and Staff.--
          (1) Full-time members.--The members of the Board 
        pursuant to subsection (c)(4) shall serve on a full-
        time basis.
          (2) Staff.--The staff of the Board shall be appointed 
        subject to the provisions of title 5, United States 
        Code, governing appointments in the competitive 
        service, and shall be paid in accordance with the 
        provisions of chapter 51 and subchapter III of chapter 
        53 of that title relating to classification and General 
        Schedule pay rates, except that each member of the 
        Board pursuant to paragraph (4) may appoint one staff 
        member without regard to the such provisions governing 
        appointments in the competitive service and such staff 
        members may be paid by the Board without regard to the 
        such provisions relating to classification and General 
        Schedule pay rates.
  (h) Meetings.--
          (1) In general.--The Board shall meet upon notice by 
        the Director, but in no event shall the Board meet less 
        frequently than once every 3 months.
          (2) Special meetings.--Any member of the Board may, 
        upon giving written notice to the Director, require a 
        special meeting of the Board, which shall be convened 
        by the Director within 30 days after such notice.
  (i) Testimony.--On an annual basis, the Board shall testify 
before Congress regarding--
          (1) the safety and soundness of the regulated 
        entities;
          (2) any material deficiencies in the conduct of the 
        operations of the regulated entities;
          (3) the overall operational status of the regulated 
        entities;
          (4) an evaluation of the performance of the regulated 
        entities in carrying out their respective missions;
          (5) operations, resources, and performance of the 
        Agency and the Board; and
          (6) such other matters relating to the Agency, the 
        Board, and the regulated entities, and their 
        fulfillment of their missions, as the Board determines 
        appropriate.
  (j) Costs.--Costs of the Board, including staff, shall be 
paid by the Agency as a cost and expense of the Agency.
  (k) Exemption.--Notwithstanding any other provision of law, 
the provisions of section 552b of title 5, United States Code, 
shall not apply to the Board.

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

  (a) [Special Reports and Reports of Financial Condition] 
Regular and Special Reports.--
          (1) [Financial condition] Regular reports.--The 
        Director may require [an enterprise] a regulated entity 
        to submit [reports of financial condition and 
        operations] regular reports on the condition (including 
        financial condition), management, activities, or 
        operations of the regulated entity, as the Director 
        considers appropriate (in addition to the annual and 
        quarterly reports required under section 309(k) of the 
        Federal National Mortgage Association Charter Act and 
        section 307(c) of the Federal Home Loan Mortgage 
        Corporation Act).
          (2) Special reports.--The Director may also require 
        [an enterprise] a regulated entity to submit special 
        reports on any of the topics specified in paragraph (1) 
        or such other topics whenever, in the judgment of the 
        Director, such reports are necessary to carry out the 
        purposes of this title.
          (3) Limitation.--The Director may not require the 
        inclusion, in any report pursuant to paragraph (1) or 
        (2), of any information that is not reasonably 
        obtainable by [the enterprise] the regulated entity.
          (4) Notice and declaration.--The Director shall 
        notify [the enterprise] the regulated entity, a 
        reasonable period in advance of the date for submission 
        of any report under this subsection, of any specific 
        information to be contained in the report and the date 
        for the submission of the report. Each report under 
        this subsection shall contain a declaration by the 
        president, vice president, treasurer, or any other 
        officer designated by the board of directors of [the 
        enterprise] the regulated entity to make such 
        declaration, that the report is true and correct to the 
        best of such officer's knowledge and belief.
  (b) Capital Distributions.--The Director may require [an 
enterprise] a regulated entity to submit a report to the 
Director after the declaration of any capital distribution by 
[the enterprise] the regulated entity and before making the 
capital distribution. The report shall be made in such form and 
under such circumstances and shall contain such information as 
the Director shall require.
  (c) Reports of Fraudulent Financial Transactions.--
          (1) Requirement to report.--The Director shall 
        require a regulated entity to submit to the Director a 
        timely report upon discovery by the regulated entity 
        that it has purchased or sold a fraudulent loan or 
        financial instrument or suspects a possible fraud 
        relating to a purchase or sale of any loan or financial 
        instrument. The Director shall require the regulated 
        entities to establish and maintain procedures designed 
        to discover any such transactions.
          (2) Protection from liability for reports.--
                  (A) In general.--If a regulated entity makes 
                a report pursuant to paragraph (1), or a 
                regulated entity-affiliated party makes, or 
                requires another to make, such a report, and 
                such report is made in a good faith effort to 
                comply with the requirements of paragraph (1), 
                such regulated entity or regulated entity-
                afffiliated party shall not be liable to any 
                person under any law or regulation of the 
                United States, any constitution, law, or 
                regulation of any State or political 
                subdivision of any State, or under any contract 
                or other legally enforceable agreement 
                (including any arbitration agreement), for such 
                report or for any failure to provide notice of 
                such report to the person who is the subject of 
                such report or any other person identified in 
                the report.
                  (B) Rule of construction.--Subparagraph (A) 
                shall not be construed as creating--
                          (i) any inference that the term 
                        ``person'', as used in such 
                        subparagraph, may be construed more 
                        broadly than its ordinary usage so as 
                        to include any government or agency of 
                        government; or
                          (ii) any immunity against, or 
                        otherwise affecting, any civil or 
                        criminal action brought by any 
                        government or agency of government to 
                        enforce any constitution, law, or 
                        regulation of such government or 
                        agency.
          (d) Disclosure of Charitable Contributions by 
        Enterprises.--
          (1) Required disclosure.--The Director shall, by 
        regulation, require each regulated entity to submit a 
        report annually, in a format designated by the 
        Director, containing the following information:
                  (A) Total value.--The total value of 
                contributions made by the regulated entity to 
                nonprofit organizations during its previous 
                fiscal year.
                  (B) Substantial contributions.--If the value 
                of contributions made by the regulated entity 
                to any nonprofit organization during its 
                previous fiscal year exceeds the designated 
                amount, the name of that organization and the 
                value of contributions.
                  (C) Substantial contributions to insider-
                affiliated charities.--Identification of each 
                contribution whose value exceeds the designated 
                amount that were made by the regulated entity 
                during the enterprise's previous fiscal year to 
                any nonprofit organization of which a director, 
                officer, or controlling person of the regulated 
                entity, or a spouse thereof, was a director or 
                trustee, the name of such nonprofit 
                organization, and the value of the 
                contribution.
          (2) Definitions.--For purposes of this subsection--
                  (A) the term ``designated amount'' means such 
                amount as may be designated by the Director by 
                regulation, consistent with the public interest 
                and the protection of investors for purposes of 
                this subsection; and
                  (B) the Director may, by such regulations as 
                the Director deems necessary or appropriate in 
                the public interest, define the terms officer 
                and controlling person.
          (3) Public availability.--The Director shall make the 
        information submitted pursuant to this subsection 
        publicly available.

SEC. 1315. PERSONNEL.

  (a) [Office Personnel.--The] In General.--Subject to titles 
III and IV of the Federal Housing Finance Reform Act of 2005, 
the Director may appoint and fix the compensation of such 
officers and employees of the [Office] Agency as the Director 
considers necessary to carry out the functions of the Director 
and the [Office] Agency. Officers and employees may be paid 
without regard to the provisions of chapter 51 and subchapter 
III of chapter 53 of title 5, United States Code, relating to 
classification and General Schedule pay rates.
  (b) Comparability of Compensation With Federal Banking 
Agencies.--In fixing and directing compensation under 
subsection (a), the Director shall consult with, and maintain 
comparability with compensation of officers and employees of 
the Office of the Comptroller of the Currency, the Board of 
Governors of the Federal Reserve System, the Federal Deposit 
Insurance Corporation, and the Office of Thrift Supervision.
  (c) Personnel of Other Federal Agencies.--In carrying out the 
duties of the [Office] Agency, the Director may use 
information, services, staff, and facilities of any executive 
agency, independent agency, or department on a reimbursable 
basis, with the consent of such agency or department.
  [(d) Reimbursement of HUD.--The Director shall reimburse the 
Department of Housing and Urban Development for reasonable 
costs incurred by the Department that are directly related to 
the operations of the Office.]
  [(e)] (d) Outside Experts and Consultants.--Notwithstanding 
any provision of law limiting pay or compensation, the Director 
may appoint and compensate such outside experts and consultants 
as the Director determines necessary to assist the work of the 
[Office] Agency.
  [(f) Equal Opportunity Report.--Not later than the expiration 
of the 180-day period beginning upon the appointment of the 
Director under section 1312, the Director shall submit to the 
Committee on Banking, Finance and Urban Affairs of the House of 
Representatives and the Committee on Banking, Housing, and 
Urban Affairs of the Senate a report containing--
          [(1) a complete description of the equal opportunity, 
        affirmative action, and minority business enterprise 
        utilization programs of the Office; and
          [(2) such recommendations for administrative and 
        legislative action as the Director determines 
        appropriate to carry out such programs.]

SEC. 1316. FUNDING.

  [(a) Annual Assessments.--The Director may, to the extent 
provided in appropriation Acts, establish and collect from the 
enterprises annual assessments in an amount not exceeding the 
amount sufficient to provide for reasonable costs and expenses 
of the Office, including the expenses of any examinations under 
section 1317. The initial annual assessment shall include any 
startup costs of the Office and any anticipated costs and 
expenses of the Office for the following fiscal year.]
  (a) Annual Assessments.--The Director shall establish and 
collect from the regulated entities annual assessments in an 
amount not exceeding the amount sufficient to provide for 
reasonable costs and expenses of the Agency, including--
          (1) the expenses of any examinations under section 
        1317 of this Act and under section 20 of the Federal 
        Home Loan Bank Act;
          (2) the expenses of obtaining any reviews and credit 
        assessments under section 1319; and
          (3) such amounts in excess of actual expenses for any 
        given year as deemed necessary by the Director to 
        maintain a working capital fund in accordance with 
        subsection (e).
  (b) Allocation of Annual Assessment to [Enterprises] 
Regulated Entities.--
          (1) Amount of payment.--[Each enterprise] Each 
        regulated entity shall pay to the Director a proportion 
        of the annual assessment made pursuant to subsection 
        (a) that bears the same ratio to the total annual 
        assessment that the total assets of [each enterprise] 
        each regulated entity bears to the total assets of 
        [both enterprises] all of the regulated entities.
          (2) Timing of payment.--The annual assessment shall 
        be payable semiannually for each fiscal year, on 
        October 1 and April 1.
          [(3) Definition.--For the purpose of this section, 
        the term ``total assets'' means, with respect to an 
        enterprise, the sum of--]
          (3) Definition of total assets.--For purposes of this 
        section, the term ``total assets'' means as follows:
                  (A) Enterprises.--With respect to an 
                enterprise, the sum of--
                          [(A)] (i) on-balance-sheet assets of 
                        the enterprise, as determined in 
                        accordance with generally accepted 
                        accounting principles;
                          [(B)] (ii) the unpaid principal 
                        balance of outstanding mortgage-backed 
                        securities issued or guaranteed by the 
                        enterprise that are not included in 
                        [subparagraph (A)] clause (i); and
                          [(C)] (iii) other off-balance-sheet 
                        obligations as determined by the 
                        Director.
                  (B) Federal home loan banks.--With respect to 
                a Federal home loan bank, the total assets of 
                the Bank, as determined by the Director in 
                accordance with generally accepted accounting 
                principles.
  [(c) Deficiencies Due to Increased Costs of Regulation.--The 
semiannual payments made pursuant to subsection (b) by any 
enterprise that is not classified (for purposes of subtitle B) 
as adequately capitalized may be increased, as necessary, in 
the discretion of the Director to pay additional estimated 
costs of regulation of the enterprise.]
  (c) Increased Costs of Regulation.--
          (1) Increase for inadequate capitalization.--The 
        semiannual payments made pursuant to subsection (b) by 
        any regulated entity that is not classified (for 
        purposes of subtitle B) as adequately capitalized may 
        be increased, as necessary, in the discretion of the 
        Director to pay additional estimated costs of 
        regulation of the regulated entity.
          (2) Adjustment for enforcement activities.--The 
        Director may adjust the amounts of any semiannual 
        assessments for an assessment under subsection (a) that 
        are to be paid pursuant to subsection (b) by a 
        regulated entity, as necessary in the discretion of the 
        Director, to ensure that the costs of enforcement 
        activities under subtitle B and C for a regulated 
        entity are borne only by such regulated entity.
          (3) Additional assessment for deficiencies.--If at 
        any time, as a result of increased costs of regulation 
        of a regulated entity that is not classified (for 
        purposes of subtitle B) as adequately captitalized or 
        as the result of supervisory or enforcement activities 
        under subtitle B or C for a regulated entity, the 
        amount available from any semiannual payment made by 
        such regulated entity pursuant to subsection (b) is 
        insufficient to cover the costs of the Agency with 
        respect to such entity, the Director may make and 
        collect from such regulated entity an immediate 
        assessment to cover the amount of such deficiency for 
        the semiannual period. If, at the end of any semiannual 
        period during which such an assessment is made, any 
        amount remains from such assessment, such remaining 
        amount shall be deducted from the assessment for such 
        regulated entity for the following semiannual period.
  (d) Surplus.--[If] Except with respect to amounts collected 
pursuant to subsection (a)(3), if any amount from any annual 
assessment collected from [an enterprise] a regulated entity 
remains unobligated at the end of the year for which the 
assessment was collected, such amount shall be credited to the 
assessment to be collected from [the enterprise] the regulated 
entity for the following year.
  [(e) Initial Special Assessment.--Not later than the 
expiration of the 30-day period beginning on the date of the 
enactment of this Act, the enterprises shall each pay into the 
Federal Housing Enterprises Oversight Fund established under 
subsection (f) an initial assessment of $1,500,000 to cover the 
startup costs of the Office, including space and modifications 
thereof, capital equipment, supplies, recruitment, and 
activities of the Office during the period preceding the first 
annual assessment under subsection (a). Any amounts collected 
from an enterprise under this subsection shall be credited 
against the first annual assessment collected pursuant to 
subsection (a), and are hereby appropriated, and shall be 
available and used, without fiscal year limitation, as provided 
in this section.
  [(f) Fund.--There is established in the Treasury of the 
United States a fund to be known as the Federal Housing 
Enterprises Oversight Fund. Any assessments collected pursuant 
to this section shall be deposited in the Fund. Amounts in the 
Fund shall be available, to the extent provided in 
appropriation Acts and subsection (e), for--
          [(1) carrying out the responsibilities of the 
        Director relating to the enterprises; and
          [(2) necessary administrative and nonadministrative 
        expenses of the Office to carry out the purposes of 
        this title.
  [(g) Budget and Financial Reports.--
          [(1) Financial operating plans and forecasts.--Before 
        the beginning of each fiscal year, the Director shall 
        submit a copy of the financial operating plans and 
        forecasts for the Office to the Secretary and the 
        Director of the Office of Management and Budget.
          [(2) Reports of operations.--As soon as practicable 
        after the end of each fiscal year and each quarter 
        thereof, the Director shall submit a copy of the report 
        of the results of the operations of the Office during 
        such period to the Secretary and the Director of the 
        Office of Mana gement and Budget.
          [(3) Inclusion in president's budget.--The annual 
        plans, forecasts, and reports required under this 
        subsection shall be included (A) in the Budget of the 
        United States in the appropriate form, and (B) in the 
        congressional justifications of the Department of 
        Housing and Urban Development for each fiscal year in a 
        form determined by the Secretary.]
  (e) Working Capital Fund.--At the end of each year for which 
an assessment under this section is made, the Director shall 
remit to each regulated entity any amount of assessment 
collected from such regulated entity that is attributable to 
subsection (a)(3) and is in excess of the amount the Director 
deems necessary to maintain a working capital fund.
  (f) Treatment of Assessments.--
          (1) Deposit.--Amounts received by the Director from 
        assessments under this section may be deposited by the 
        Director in the manner provided in section 5234 of the 
        Revised Statutes (12 U.S.C. 192) for monies deposited 
        by the Comptroller of the Currency.
          (2) Not government funds.--The amounts received by 
        the Director from any assessment under this section 
        shall not be construed to be Government or public funds 
        or appropriated money.
          (3) No apportionment of funds.--Notwithstanding any 
        other provision of law, the amounts received by the 
        Director from any assessment under this section shall 
        not be subject to apportionment for the purpose of 
        chapter 15 of title 31, United States Code, or under 
        any other authority.
          (4) Use of funds.--The Director may use any amounts 
        received by the Director from assessments under this 
        section for compensation of the Director and other 
        employees of the Agency and for all other expenses of 
        the Director and the Agency.
          (5) Availability of oversight fund amounts.--
        Notwithstanding any other provision of law, any amounts 
        remaining in the Federal Housing Enterprises Oversight 
        Fund established under this section (as in effect 
        before the effective date under section 185 of the 
        Federal Housing Finance Reform Act of 2005), and any 
        amounts remaining from assessments on the Federal Home 
        Loan banks pursuant to section 18(b) of the Federal 
        Home Loan Bank Act (12 U.S.C. 1438(b)), shall, upon 
        such effective date, be treated for purposes of this 
        subsection as amounts received from assessments under 
        this section.
  (g) Budget and Financial Management.--
          (1) Financial operating plans and forecasts.--The 
        Director shall provide to the Director of the Office of 
        Management and Budget copies of the Director's 
        financial operating plans and forecasts as prepared by 
        the Director in the ordinary course of the Agency's 
        operations, and copies of the quarterly reports of the 
        Agency's financial condition and results of operations 
        as prepared by the Director in the ordinary course of 
        the Agency's operations.
          (2) Financial statements.--The Agency shall prepare 
        annually a statement of assets and liabilities and 
        surplus or deficit; a statement of income and expenses; 
        and a statement of sources and application of funds.
          (3) Financial management systems.--The Agency shall 
        implement and maintain financial management systems 
        that comply substantially with Federal financial 
        management systems requirements, applicable Federal 
        accounting standards, and that uses a general ledger 
        system that accounts for activity at the transaction 
        level.
          (4) Assertion of internal controls.--The Director 
        shall provide to the Comptroller General an assertion 
        as to the effectiveness of the internal controls that 
        apply to financial reporting by the Agency, using the 
        standards established in section 3512 (c) of title 31, 
        United States Code.
          (5) Rule of construction.--This subsection may not be 
        construed as implying any obligation on the part of the 
        Director to consult with or obtain the consent or 
        approval of the Director of the Office of Management 
        and Budget with respect to any reports, plans, 
        forecasts, or other information referred to in 
        paragraph (1) or any jurisdiction or oversight over the 
        affairs or operations of the Agency.
  (h) Audit of Agency.--
          (1) In general.--The Comptroller General shall 
        annually audit the financial transactions of the Agency 
        in accordance with the U.S. generally accepted 
        government auditing standards as may be prescribed by 
        the Comptroller General of the United States. The audit 
        shall be conducted at the place or places where 
        accounts of the Agency are normally kept. The 
        representatives of the Government Accountability Office 
        shall have access to the personnel and to all books, 
        accounts, documents, papers, records (including 
        electronic records), reports, files, and all other 
        papers, automated data, things, or property belonging 
        to or under the control of or used or employed by the 
        Agency pertaining to its financial transactions and 
        necessary to facilitate the audit, and such 
        representatives shall be afforded full facilities for 
        verifying transactions with the balances or securities 
        held by depositaries, fiscal agents, and custodians. 
        All such books, accounts, documents, records, reports, 
        files, papers, and property of the Agency shall remain 
        in possession and custody of the Agency. The 
        Comptroller General may obtain and duplicate any such 
        books, accounts, documents, records, working papers, 
        automated data and files, or other information relevant 
        to such audit without cost to the Comptroller General 
        and the Comptroller General's right of access to such 
        information shall be enforceable pursuant to section 
        716(c) of title 31, United States Code.
          (2) Report.--The Comptroller General shall submit to 
        the Congress a report of each annual audit conducted 
        under this subsection. The report to the Congress shall 
        set forth the scope of the audit and shall include the 
        statement of assets and liabilities and surplus or 
        deficit, the statement of income and expenses, the 
        statement of sources and application of funds, and such 
        comments and information as may be deemed necessary to 
        inform Congress of the financial operations and 
        condition of the Agency, together with such 
        recommendations with respect thereto as the Comptroller 
        General may deem advisable. A copy of each report shall 
        be furnished to the President and to the Agency at the 
        time submitted to the Congress.
          (3) Assistance and costs.--For the purpose of 
        conducting an audit under this subsection, the 
        Comptroller General may, in the discretion of the 
        Comptroller General, employ by contract, without regard 
        to section 5 of title 41, United States Code, 
        professional services of firms and organizations of 
        certified public accountants for temporary periods or 
        for special purposes. Upon the request of the 
        Comptroller General, the Director of the Agency shall 
        transfer to the Government Accountability Office from 
        funds available, the amount requested by the 
        Comptroller General to cover the full costs of any 
        audit and report conducted by the Comptroller General. 
        The Comptroller General shall credit funds transferred 
        to the account established for salaries and expenses of 
        the Government Accountability Office, and such amount 
        shall be available upon receipt and without fiscal year 
        limitation to cover the full costs of the audit and 
        report.

SEC. 1317. EXAMINATIONS.

  (a) Annual Examination.--The Director shall annually conduct 
an on-site examination under this section of [each enterprise] 
each regulated entity to determine the condition of [the 
enterprise] the regulated entity for the purpose of ensuring 
its financial safety and soundness. Each examination under this 
subsection of a regulated entity shall include a review of the 
procedures required to be established and maintained by the 
regulated entity pursuant to section 1314(c) (relating to 
fraudulent financial transactions) and the report regarding 
each such examination shall describe any problems with such 
procedures maintained by the regulated entity.
  (b) Other Examinations.--In addition to annual examinations 
under subsection (a), the Director may conduct an examination 
under this section of a regulated entity whenever the Director 
determines that an examination is necessary [to determine the 
condition of an enterprise for the purpose of ensuring its 
financial safety and soundness] or appropriate.
  (c) Examiners.--The Director shall appoint examiners to 
conduct examinations under this section. The Director may 
contract with the Comptroller of the Currency, the Board of 
Governors of the Federal Reserve System, the Federal Deposit 
Insurance Corporation, or the Director of the Office of Thrift 
Supervision for the services of examiners to conduct 
examinations under this section. The Director shall reimburse 
such agencies for any costs of providing examiners [from 
amounts available in the Federal Housing Enterprises Oversight 
Fund].

           *       *       *       *       *       *       *

  (e) Technical Experts.--The Director may obtain the services 
of any technical experts the Director considers appropriate to 
provide temporary technical assistance relating to examinations 
to the Director, officers, and employees of the [Office] 
Agency. The Director shall describe, in the record of each 
examination, the nature and extent of any such temporary 
technical assistance.
  (f) Oaths, Evidence, and Subpoena Powers.--In connection with 
examinations under this section, the Director shall have the 
authority provided under [section 1379B] section 1379D.
  (g) Appointment of Accountants, Economists, Specialists, and 
Examiners.--
          (1) Applicability.--This section applies with respect 
        to any position of examiner, accountant, specialist in 
        financial markets, specialist in technology, and 
        economist at the Agency, with respect to supervision 
        and regulation of the regulated entities, that is in 
        the competitive service.
          (2) Appointment authority.--The Director may appoint 
        candidates to any position described in paragraph (1)--
                  (A) in accordance with the statutes, rules, 
                and regulations governing appointments in the 
                excepted service; and
                  (B) notwithstanding any statutes, rules, and 
                regulations governing appointments in the 
                competitive service.

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

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

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

SEC. 1319. REVIEWS OF REGULATED ENTITIES.

  The Director may, on such terms and conditions as the 
Director deems appropriate, contract with any entity that the 
Director considers appropriate, including an entity effectively 
recognized by the Division of Market Regulation of the 
Securities and Exchange Commission as a nationally recognized 
statistical rating organization for the purposes of the capital 
rules for broker-dealers, to conduct a review of [the 
enterprises] the regulated entities.

SEC. 1319A. EQUAL OPPORTUNITY IN SOLICITATION OF CONTRACTS.

  [(a) In General.--Each enterprise] Each regulated entity 
shall establish a minority outreach program to ensure the 
inclusion (to the maximum extent possible) in contracts entered 
into by the enterprises of minorities and women and businesses 
owned by minorities and women, including financial 
institutions, investment banking firms, underwriters, 
accountants, brokers, and providers of legal services.
  [(b) Report.--Not later than the expiration of the 180-day 
period beginning on the date of the enactment of this Act, each 
enterprise shall submit to the Committee on Banking, Finance 
and Urban Affairs of the House of Representatives and the 
Committee on Banking, Housing, and Urban Affairs of the Senate 
a report describing the actions taken by the enterprise 
pursuant to subsection (a).]

SEC. 1319B. ANNUAL REPORTS BY DIRECTOR.

  (a) General Report.--The Director shall submit to the 
[Committee on Banking, Finance and Urban Affairs] Committee on 
Financial Services of the House of Representatives and the 
Committee on Banking, Housing, and Urban Affairs of the Senate, 
not later than June 15 of each year, a written report, which 
shall include--
          (1) a description of the actions taken, and being 
        undertaken, by the Director to carry out this title;
          (2) a description of the financial safety and 
        soundness of [each enterprise] each regulated entity, 
        including the results and conclusions of the annual 
        examinations of [the enterprises] the regulated 
        entities conducted under section 1317(a);
          (3) any recommendations for legislation to enhance 
        the financial safety and soundness of [the enterprises] 
        the regulated entities; [and]
          [(4) a description of--
                  [(A) whether the procedures established by 
                each enterprise pursuant to section 102(b)(3) 
                of the Flood Disaster Protection Act of 1973 
                are adequate and being complied with, and
                  [(B) the results and conclusions of any 
                examination, as determined necessary by the 
                Director, to determine the compliance of the 
                enterprises with the requirements of section 
                102(b)(3) of such Act, which shall include a 
                description of the methods used to determine 
                compliance and the types and sources of 
                deficiencies (if any), and identify any 
                corrective measures that have been taken to 
                remedy any such deficiencies,
        except that the information described in this paragraph 
        shall be included only in each of the first, third, and 
        fifth annual reports under this subsection required to 
        be submitted after the expiration of the 1-year period 
        beginning on the date of enactment of the Riegle 
        Community Development and Regulatory Improvement Act of 
        1994.]
          (4) an assessment of the Board with respect to--
                  (A) the safety and soundness of the regulated 
                entities;
                  (B) any material deficiencies in the conduct 
                of the operations of the regulated entities;
                  (C) the overall operational status of the 
                regulated entities;
                  (D) an evaluation of the performance of the 
                regulated entities in carrying out their 
                missions, including compliance of the 
                enterprises with the housing goals under 
                subpart B of part 2 of this subtitle and 
                compliance of the Federal home loan banks with 
                the community investment and affordable housing 
                programs under subsections (i) and (j) of 
                section 10 of the Federal Home Loan Bank Act;
                  (E) an evaluation of the performance of the 
                Agency in fulfilling its duties and 
                responsibilities under law; and
                  (F) such other matters relating to the Board 
                and the fulfillment of its duties as the Board 
                considers appropriate;
          (5) operations, resources, and performance of the 
        Agency; and
          (6) such other matters relating to the Agency and its 
        fulfillment of its mission.
  (b) Report on Enforcement Actions.--Not later than March 15 
of each year, the Director shall submit to the [Committee on 
Banking, Finance and Urban Affairs] Committee on Financial 
Services of the House of Representatives and the Committee on 
Banking, Housing, and Urban Affairs of the Senate a written 
report describing, for the preceding calendar year, the 
requests by the Director to the Attorney General for 
enforcement actions under subtitle C and describing the 
disposition of each request, which shall include statements 
of--
          (1)  * * *

           *       *       *       *       *       *       *


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

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

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *


SEC. 1319D. LIMITATION ON SUBSEQUENT EMPLOYMENT.

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

SEC. 1319E. AUDITS BY GAO.

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

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

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

SEC. 1319G. REGULATIONS AND ORDERS.

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

                    [PART 2--AUTHORITY OF SECRETARY]

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

                      Subpart A--General Authority

[SEC. 1321. REGULATORY AUTHORITY.

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

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

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

SEC. 1321. REVIEW AND APPROVAL BY DIRECTOR OF NEW PROGRAMS AND BUSINESS 
                    ACTIVITIES OF ENTERPRISES.

  (a) Limitation on Authority To Undertake Programs and 
Activities.--An enterprise may not undertake any new program, 
including a pilot program, or any new business activity except 
in accordance with the procedures set forth in this section and 
orders and regulations issued under this section.
  (b) New Programs.--
          (1) Prior approval requirement.--An enterprise may 
        not commence any new program before it has obtained the 
        approval of the Director, pursuant to this subsection, 
        for the new program.
          (2) Application.--The Director shall, by order or 
        regulation, require that an enterprise shall, to obtain 
        a determination by the Director regarding approval of a 
        new program by the enterprise, submit to the Director a 
        written application for the new program in a format as 
        prescribed by the Director.
          (3) Notice.--Immediately upon receipt of a complete 
        application for a new program, the Director shall cause 
        to be published in the Federal Register notice of the 
        receipt of such application and of the period for 
        public comment pursuant to paragraph (4) regarding such 
        new program, and a description of the new program 
        proposed by the application.
          (4) Public comment period.--During the 30-day period 
        beginning upon publication pursuant to paragraph (3) of 
        a notice regarding such an application, the Director 
        shall receive public comments regarding the new 
        program.
          (5) Determination.--Not less than 15 days after the 
        conclusion of the public comment period pursuant to 
        paragraph (4) regarding an application but not more 
        than 30 days after the conclusion of such comment 
        period, the Director shall approve, conditionally 
        approve, or reject such program, in writing.
          (6) Standard for approval.--The Director may approve, 
        or conditionally approve, a new program of an 
        enterprise only if the Director determines, taking into 
        consideration any relevant information and comments 
        received during the public comment period, that such 
        new program--
                  (A) does not contravene and is not 
                inconsistent with the purposes of this title, 
                the Federal National Mortgage Association 
                Charter Act, or the Federal Home Loan Mortgage 
                Corporation Act, as such purposes are 
                determined taking into consideration the 
                definitions of the terms ``mortgage loan 
                origination'' and ``secondary mortgage market'' 
                pursuant to section 1303;
                  (B) is not otherwise inconsistent with the 
                safety and soundness of the enterprise; and
                  (C) is in the public interest.
          (7) Limitation.--The Director, in implementing this 
        subsection, may not prevent an enterprise from 
        continuing to offer the automated loan underwriting 
        system in existence on the date of the enactment of the 
        Federal Housing Finance Reform Act of 2005 or 
        continuing to engage in counseling and education 
        activities.
  (c) New Business Activities.--
          (1) Authority of director to prohibit new business 
        activities.--The Director shall have authority to 
        prohibit any new business activity by an enterprise if 
        the Director determines, in writing, that such 
        activity--
                  (A) contravenes or is inconsistent with the 
                purposes of this title, the Federal National 
                Mortgage Association Charter Act, or the 
                Federal Home Loan Mortgage Corporation Act;
                  (B) is otherwise inconsistent with the safety 
                and soundness of the enterprise; or
                  (C) is not in the public interest.
          (2) Notification of new business activities.--An 
        enterprise that undertakes any new business activity 
        shall provide written notice of the activity to the 
        Director and may commence the new business activity 
        only in accordance with paragraph (4).
          (3) Director determination of applicable procedure.--
                  (A) Timing.--Immediately upon receipt of any 
                notice under paragraph (2) regarding a new 
                business activity, the Director shall undertake 
                a determination under subparagraph (B) of this 
                paragraph regarding the new business activity.
                  (B) Determination and treatment as new 
                program.--If the Director determines that any 
                new business activity consists of, relates to, 
                or involves any new program--
                          (i) the Director shall notify the 
                        enterprise of the determination;
                          (ii) the new business activity 
                        described in the notice shall be 
                        considered a new program for purposes 
                        of this section; and
                          (iii) the Director shall prohibit the 
                        enterprise from carrying out the 
                        activity except to the extent that 
                        approval for the activity is obtained 
                        pursuant to subsection (b).
          (4) Commencement.--An enterprise may commence a new 
        business activity--
                  (A) if the Director issues a written approval 
                regarding such new business activity, 
                immediately upon such issuance or at such other 
                time as provided by the Director in such 
                letter; or
                  (B) if, during the 30-day period beginning 
                upon receipt by the Director of notice pursuant 
                to paragraph (2) regarding a new business 
                activity, the Director has not issued to the 
                enterprise a written approval or denial of the 
                new business activity, upon the expiration of 
                such 30-day period.
  (d) Approval and Conditional Approval.--The Director may at 
any time conditionally approve the undertaking of a particular 
new program or new business activity by an enterprise and set 
forth the terms and conditions that apply to the program or 
activity with which the enterprise shall comply if it 
undertakes the new program or activity. Such approval may, in 
the discretion of the Director, be in the form of a written 
agreement between the enterprise and the Director and shall be 
subject to such terms and conditions therein. Such a written 
agreement or conditional approval shall be enforceable under 
subtitle C.
  (e) Determination and Treatment of Activity as New Business 
Activity.--If the Director determines that any activity of an 
enterprise consists of, relates to, or involves any new 
business activity--
          (1) the Director shall notify the enterprise of the 
        determination;
          (2) such activity shall be considered a new business 
        activity for purposes of this section; and
          (3) the Director shall prohibit the enterprise from 
        carrying out the activity except to the extent that 
        approval for the activity is obtained pursuant to 
        subsection (c).
  (f) Effect on Other Authorities.--
          (1) Examinations.--Nothing in this section may be 
        construed to limit, in any manner, any other authority 
        or right the Director may have under other provisions 
        of law to conduct an examination of an enterprise.
          (2) Requests for information.--Nothing in this 
        section may be construed to limit the right of the 
        Director at any time to request additional information 
        from an enterprise concerning any business activity.
          (3) No implied right of action.--This section shall 
        not create any private right of action against an 
        enterprise or any director or executive officer of an 
        enterprise, or impair any private right of action under 
        other applicable law.
          (4) No limitation.--Nothing in this section may be 
        construed to restrict the general supervisory and 
        regulatory authority of the Director over all programs, 
        products, activities, or business operations of any 
        kind.
  (g) Report on Programs and Business Activities.--Not later 
than the expiration of the 180-day period beginning on the 
effective date under section 185 of the Federal Housing Finance 
Reform Act of 2005, each enterprise shall submit to the 
Director a report identifying and describing each program and 
business activity of the enterprise engaged in or existing as 
of the submission of the report.
  (h) Regulations.--The Director shall by order or regulation 
issue rules and procedures to implement this section, including 
in the discretion of the Director, such definitions, 
interpretations, forms, and other guidances as the Director 
considers appropriate.

SEC. 1322. HOUSING PRICE INDEX.

  (a) In General.--The Director shall establish and maintain a 
method of assessing the national average 1-family house price 
for use for adjusting the conforming loan limitations of the 
enterprises. In establishing such method, the Director shall 
take into consideration the monthly survey of all major lenders 
conducted by the Federal Housing Finance Agency to determine 
the national average 1-family house price, the House Price 
Index maintained by the Office of Federal Housing Enterprise 
Oversight of the Department of Housing and Urban Development 
before the effective date under section 185 of the Federal 
Housing Finance Reform Act of 2005, any appropriate house price 
indexes of the Bureau of the Census of the Department of 
Commerce, and any other indexes or measures that the Director 
considers appropriate.
  (b) GAO Audit.--
          (1) In general.--At such times as are required under 
        paragraph (2), the Comptroller General of the United 
        States shall conduct an audit of the methodology 
        established by the Director under subsection (a) to 
        determine whether the methodology established is an 
        accurate and appropriate means of measuring changes to 
        the national average 1-family house price.
          (2) Timing.--An audit referred to in paragraph (1) 
        shall be conducted and completed not later than the 
        expiration of the 180-day period that begins upon each 
        of the following dates:
                  (A) Establishment.--The date upon which such 
                methodology is initially established under 
                subsection (a) in final form by the Director.
                  (B) Modification or amendment.--Each date 
                upon which any modification or amendment to 
                such methodology is adopted in final form by 
                the Director.
          (3) Report.--Within 30 days of the completion of any 
        audit conducted under this subsection, the Comptroller 
        General shall submit a report detailing the results and 
        conclusions of the audit to the Director, the Committee 
        on Financial Services of the House of Representatives, 
        and the Committee on Banking, Housing, and Urban 
        Affairs of the Senate.

SEC. 1322A. CORPORATE GOVERNANCE OF ENTERPRISES.

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

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

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

SEC. 1323. PUBLIC ACCESS TO MORTGAGE INFORMATION OF ENTERPRISES.

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

[SEC. 1324. ANNUAL HOUSING REPORT.

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

SEC. 1324. ANNUAL HOUSING REPORT REGARDING REGULATED ENTITIES.

  (a) In General.--After reviewing and analyzing the reports 
submitted under section 309(n) of the Federal National Mortgage 
Association Charter Act, section 307(f) of the Federal Home 
Loan Mortgage Corporation Act, and section 10(j)(11) of the 
Federal Home Loan Bank Act (12 U.S.C. 1430(j)(11)), the 
Director shall submit a report, not later than October 30 of 
each year, to the Committee on Financial Services of the House 
of Representatives and the Committee on Banking, Housing, and 
Urban Affairs of the Senate, on the activities of each 
regulated entity.
  (b) Contents.--The report shall--
          (1) discuss the extent to which--
                  (A) each enterprise is achieving the annual 
                housing goals established under subpart B of 
                this part;
                  (B) each enterprise is complying with section 
                1337;
                  (C) each Federal home loan bank is complying 
                with section 10(j) of the Federal Home Loan 
                Bank Act; and
                  (D) each regulated entity is achieving the 
                purposes of the regulated entity established by 
                law;
          (2) aggregate and analyze relevant data on income to 
        assess the compliance by each enterprise with the 
        housing goals established under subpart B;
          (3) aggregate and analyze data on income, race, and 
        gender by census tract and other relevant 
        classifications, and compare such data with larger 
        demographic, housing, and economic trends;
          (4) examine actions that--
                  (A) each enterprise has undertaken or could 
                undertake to promote and expand the annual 
                goals established under subpart B and the 
                purposes of the enterprise established by law; 
                and
                  (B) each Federal home loan bank has taken or 
                could undertake to promote and expand the 
                community investment program and affordable 
                housing program of the bank established under 
                section subsections (i) and (j) of section 10 
                of the Federal Home Loan Bank Act;
          (5) examine the primary and secondary multifamily 
        housing mortgage markets and describe--
                  (A) the availability and liquidity of 
                mortgage credit;
                  (B) the status of efforts to provide standard 
                credit terms and underwriting guidelines for 
                multifamily housing and to securitize such 
                mortgage products; and
                  (C) any factors inhibiting such 
                standardization and securitization;
          (6) examine actions each regulated entity has 
        undertaken and could undertake to promote and expand 
        opportunities for first-time homebuyers;
          (7) describe any actions taken under section 1325(5) 
        with respect to originators found to violate fair 
        lending procedures;
          (8) discuss and analyze existing conditions and 
        trends, including conditions and trends relating to 
        pricing, in the housing markets and mortgage markets; 
        and
          (9) identify the extent to which each enterprise is 
        involved in mortgage purchases and secondary market 
        activities involving subprime loans (as identified in 
        accordance with the regulations issued pursuant to 
        section 124(b) of the Federal Housing Finance Reform 
        Act of 2005) and compare the characteristics of 
        subprime loans purchased and securitized by the 
        enterprises to other loans purchased and securitized by 
        the enterprises
  (c) Data Collection and Reporting.--
          (1) In general.--To assist the Director in analyzing 
        the matters described in subsection (b) and 
        establishing the methodology described in section 1322, 
        the Director shall conduct, on a monthly basis, a 
        survey of mortgage markets in accordance with this 
        subsection.
          (2) Data points.--Each monthly survey conducted by 
        the Director under paragraph (1) shall collect data 
        on--
                  (A) the characteristics of individual 
                mortgages that are eligible for purchase by the 
                enterprises and the characteristics of 
                individual mortgages that are not eligible for 
                purchase by the enterprises including, in both 
                cases, information concerning--
                          (i) the price of the house that 
                        secures the mortgage;
                          (ii) the loan-to-value ratio of the 
                        mortgage, which shall reflect any 
                        secondary liens on the relevant 
                        property;
                          (iii) the terms of the mortgage;
                          (iv) the creditworthiness of the 
                        borrower or borrowers; and
                          (v) whether the mortgage, in the case 
                        of a conforming mortgage, was purchased 
                        by an enterprise; and
                  (B) such other matters as the Director 
                determines to be appropriate.
          (3) Public availability.--The Director shall make any 
        data collected by the Director in connection with the 
        conduct of a monthly survey available to the public in 
        a timely manner, provided that the Director may modify 
        the data released to the public to ensure that the data 
        is not released in an identifiable form.
          (4) Definition.--For purposes of this subsection, the 
        term ``identifiable form'' means any representation of 
        information that permits the identity of a borrower to 
        which the information relates to be reasonably inferred 
        by either direct or indirect means.

SEC. 1325. FAIR HOUSING.

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

           *       *       *       *       *       *       *


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

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

           *       *       *       *       *       *       *


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

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

[SEC. 1328. REPORTS BY SECRETARY.

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

                        Subpart B--Housing Goals

[SEC. 1331. ESTABLISHMENT.

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

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

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

[SEC. 1333. SPECIAL AFFORDABLE HOUSING GOAL.

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

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

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

SEC. 1331. ESTABLISHMENT OF HOUSING GOALS.

  (a) In General.--The Director shall establish, effective for 
the first year that begins after the effective date under 
section 185 of the Federal Housing Finance Reform Act of 2005 
and each year thereafter, annual housing goals, with respect to 
the mortgage purchases by the enterprises, as follows:
          (1) Single family housing goals.--Three single-family 
        housing goals under section 1332.
          (2) Multifamily special affordable housing goals.--A 
        multifamily special affordable housing goal under 
        section 1333.
  (b) Eliminating Interest Rate Disparities.--
          (1) In general.--In establishing and implementing the 
        housing goals under this subpart, the Director shall 
        require the enterprises to disclose appropriate 
        information to allow the Director to assess if there 
        are any disparities in interest rates charged on 
        mortgages to borrowers who are minorities as compared 
        with borrowers of similar creditworthiness who are not 
        minorities, as evidenced in reports pursuant to the 
        Home Mortgage Disclosure Act of 1975.
          (2) Report and remedy.--Upon a finding by the 
        Director, pursuant to the information provided by an 
        enterprise in paragraph (1), that a pattern of 
        disparities in interest rates exists, the Director 
        shall--
                  (A) submit to the Committee on Financial 
                Services of the House of Representatives and 
                the Committee on Banking, Housing, and Urban 
                Affairs of the Senate a report detailing the 
                disparities; and
                  (B) require the enterprise to take such 
                action as the Director deems appropriate 
                pursuant to this Act to remedy the interest 
                rate disparities identified.
          (3) Protection of identity.--In carrying out this 
        subsection, the Director shall ensure that no 
        information is made public that would reasonably allow 
        identification, directly or indirectly, of an 
        individual borrower.
  (c) Timing.--The Director shall establish an annual deadline 
by which the Director shall establish the annual housing goals 
under this subpart for each year, taking into consideration the 
need for the enterprises to reasonably and sufficiently plan 
their operations and activities in advance, including 
operations and activities necessary to meet such annual goals.

SEC. 1332. SINGLE-FAMILY HOUSING GOALS.

  (a) In General.--The Director shall establish an annual goal 
for the purchase by each enterprise of conventional, 
conforming, single-family, owner-occupied, purchase money 
mortgages financing housing for each of the following 
categories of families:
          (1) Low-income families.
          (2) Families that reside in low-income areas.
          (3) Very low-income families.
  (b) Determination of Compliance.--The Director shall 
determine, for each year that the housing goal under this 
section is in effect pursuant to section 1331(a), whether each 
enterprise has complied with the single-family housing goal 
established under this section for such year. An enterprise 
shall be considered to be in compliance with such a goal for a 
year only if--
          (1) for each of the types of families described in 
        subsection (a), the percentage of the number of 
        conventional, conforming, single-family, owner-
        occupied, purchase money mortgages purchased by each 
        enterprise in such year that serve such families, meets 
        or exceeds
          (2) the target for the year for such type of family 
        that is established under subsection (c).
  (c) Annual Targets.--
          (1) In general.--Except as provided in paragraph (2), 
        for each of the types of families described in 
        subsection (a), the target under this subsection for a 
        year shall be the average percentage, for the three 
        years that most recently precede such year and for 
        which information under the Home Mortgage Disclosure 
        Act of 1975 is publicly available, of the number of 
        conventional, conforming, single-family, owner-
        occupied, purchase money mortgages originated in such 
        year that serves such type of family, as determined by 
        the Director using the information obtained and 
        determined pursuant to paragraphs (3) and (4).
          (2) Authority to increase targets.--
                  (A) In general.--The Director may, for any 
                year, establish by regulation, for any or all 
                of the types of families described in 
                subsection (a), percentage targets that are 
                higher than the percentages for such year 
                determined pursuant to paragraph (1), to 
                reflect expected changes in market performance 
                related to such information under the Home 
                Mortgage Disclosure Act of 1975.
                  (B) Factors.--In establishing any targets 
                pursuant to subparagraph (A), the Director 
                shall consider the following factors:
                          (i) National housing needs.
                          (ii) Economic, housing, and 
                        demographic conditions.
                          (iii) The performance and effort of 
                        the enterprises toward achieving the 
                        housing goals under this section in 
                        previous years.
                          (iv) The size of the conventional 
                        mortgage market serving each of the 
                        types of families described in 
                        subsection (a) relative to the size of 
                        the overall conventional mortgage 
                        market.
                          (v) The need to maintain the sound 
                        financial condition of the enterprises.
          (3) HMDA information.--The Director shall annually 
        obtain information submitted in compliance with the 
        Home Mortgage Disclosure Act of 1975 regarding 
        conventional, conforming, single-family, owner-
        occupied, purchase money mortgages originated and 
        purchased for the previous year.
          (4) Conforming mortgages.--In determining whether a 
        mortgage is a conforming mortgage for purposes of this 
        paragraph, the Director shall consider the original 
        principal balance of the mortgage loan to be the 
        principal balance as reported in the information 
        referred to in paragraph (3), as rounded to the nearest 
        thousand dollars.
  (d) Notice of Determination and Enterprise Comment.--
          (1) Notice.--Within 30 days of making a determination 
        under subsection (b) regarding a compliance of an 
        enterprise for a year with the housing goal established 
        under this section and before any public disclosure 
        thereof, the Director shall provide notice of the 
        determination to the enterprise, which shall include an 
        analysis and comparison, by the Director, of the 
        performance of the enterprise for the year and the 
        targets for the year under subsection (c).
          (2) Comment period.--The Director shall provide each 
        enterprise an opportunity to comment on the 
        determination during the 30-day period beginning upon 
        receipt by the enterprise of the notice.
  (e) Use of Borrower Income.--In monitoring the performance of 
each enterprise pursuant to the housing goals under this 
section and evaluating such performance (for purposes of 
section 1336), the Director shall consider a mortgagor's income 
to be such income at the time of origination of the mortgage.

SEC. 1333. MULTIFAMILY SPECIAL AFFORDABLE GOAL.

  (a) Establishment.--
          (1) In general.--The Director shall establish, by 
        regulation, an annual goal for the purchase by each 
        enterprise of each of the following types of mortgages 
        on multifamily housing:
                  (A) Mortgages that finance dwelling units for 
                very low-income families.
                  (B) Mortgages that finance dwelling units 
                assisted by the low-income housing tax credit 
                under section 42 of the Internal Revenue Code 
                of 1986.
          (2) Additional requirements for smaller projects.--
        The Director shall establish, within the goal under 
        this section, additional requirements for the purchase 
        by each enterprise of mortgages described in paragraph 
        (1) for multifamily housing projects of a smaller or 
        limited size, which may be based on the number of 
        dwelling units in the project or the amount of the 
        mortgage, or both, and shall include multifamily 
        housing projects of such smaller sizes as are typical 
        among such projects that serve rural areas.
          (3) Factors.--In establishing the goal under this 
        section relating to mortgages on multifamily housing 
        for an enterprise, the Director shall consider--
                  (A) national multifamily mortgage credit 
                needs;
                  (B) the performance and effort of the 
                enterprise in making mortgage credit available 
                for multifamily housing in previous years;
                  (C) the size of the multifamily mortgage 
                market;
                  (D) the ability of the enterprise to lead the 
                industry in making mortgage credit available, 
                especially for underserved markets, such as for 
                small multifamily projects of 5 to 50 units, 
                multifamily properties in need of 
                rehabilitation, and multifamily properties 
                located in rural areas; and
                  (E) the need to maintain the sound financial 
                condition of the enterprise.
  (b) Units Financed by Housing Finance Agency Bonds.--The 
Director shall give full credit toward the achievement of the 
multifamily special affordable housing goal under this section 
(for purposes of section 1336) to dwelling units in multifamily 
housing that otherwise qualifies under such goal and that is 
financed by tax-exempt or taxable bonds issued by a State or 
local housing finance agency, but only if--
          (1) such bonds are secured by a guarantee of the 
        enterprise; or
          (2) are not investment grade and are purchased by the 
        enterprise.
  (c) Use of Tenant Income or Rent.--The Director shall monitor 
the performance of each enterprise in meeting the goals 
established under this section and shall evaluate such 
performance (for purposes of section 1336) based on--
          (1) the income of the prospective or actual tenants 
        of the property, where such data are available; or
          (2) where the data referred to in paragraph (1) are 
        not available, rent levels affordable to low-income and 
        very low-income families.
A rent level shall be considered to be affordable for purposes 
of this subsection for an income category referred to in this 
subsection if it does not exceed 30 percent of the maximum 
income level of such income category, with appropriate 
adjustments for unit size as measured by the number of 
bedrooms.
  (d) Determination of Compliance.--The Director shall, for 
each year that the housing goal under this section is in effect 
pursuant to section 1331(a), determine whether each enterprise 
has complied with such goal and the additional requirements 
under subsection (a)(2).

SEC. 1334. DISCRETIONARY ADJUSTMENT OF HOUSING GOALS.

  (a) Authority.--An enterprise may petition the Director in 
writing at any time during a year to reduce the level of any 
goal for such year established pursuant to this subpart.
  (b) Standard for Reduction.--The Director may reduce the 
level for a goal pursuant to such a petition only if--
          (1) market and economic conditions or the financial 
        condition of the enterprise require such action; or
          (2) efforts to meet the goal would result in the 
        constraint of liquidity, over-investment in certain 
        market segments, or other consequences contrary to the 
        intent of this subpart, or section 301(3) of the 
        Federal National Mortgage Association Charter Act (12 
        U.S.C. 1716(3)) or section 301(3) of the Federal Home 
        Loan Mortgage Corporation Act (12 U.S.C. 1451 note), as 
        applicable.
  (c) Determination.--The Director shall make a determination 
regarding any proposed reduction within 30 days of receipt of 
the petition regarding the reduction. The Director may extend 
such period for a single additional 15-day period, but only if 
the Director requests additional information from the 
enterprise. A denial by the Director to reduce the level of any 
goal under this section may be appealed to the United States 
District Court for the District of Columbia or the United 
States district court in the jurisdiction in which the 
headquarters of an enterprise is located.

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

  (a) Duty To Serve Underserved Markets.--
          (1) Duty.--In accordance with the purpose of the 
        enterprises under section 301(3) of the Federal 
        National Mortgage Association Charter Act (12 U.S.C. 
        1716) and section 301(b)(3) of the Federal Home Loan 
        Mortgage Corporation Act (12 U.S.C. 1451 note) to 
        undertake activities relating to mortgages on housing 
        for very low-, low-, and moderate-income families 
        involving a reasonable economic return that may be less 
        than the return earned on other activities, each 
        enterprise shall have the duty to increase the 
        liquidity of mortgage investments and improve the 
        distribution of investment capital available for 
        mortgage financing for underserved markets.
          (2) Underserved markets.--To meet its duty under 
        paragraph (1), each enterprise shall comply with the 
        following requirements with respect to the following 
        underserved markets:
                  (A) Manufactured housing.--The enterprise 
                shall lead the industry in developing loan 
                products and flexible underwriting guidelines 
                to facilitate a secondary market for mortgages 
                on manufactured homes for very low-, low-, and 
                moderate-income families.
                  (B) Affordable housing preservation.--The 
                enterprise shall lead the industry in 
                developing loan products and flexible 
                underwriting guidelines to facilitate a 
                secondary market to preserve housing affordable 
                to very low-, low-, and moderate-income 
                families, including housing projects subsidized 
                under--
                          (i) the project-based and tenant-
                        based rental assistance programs under 
                        section 8 of the United States Housing 
                        Act of 1937;
                          (ii) the program under section 236 of 
                        the National Housing Act;
                          (iii) the below-market interest rate 
                        mortgage program under section 
                        221(d)(4) of the National Housing Act;
                          (iv) the supportive housing for the 
                        elderly program under section 202 of 
                        the Housing Act of 1959;
                          (v) the supportive housing program 
                        for persons with disabilities under 
                        section 811 of the Cranston-Gonzalez 
                        National Affordable Housing Act; and
                          (vi) the rural rental housing program 
                        under section 515 of the Housing Act of 
                        1949.
                  (C) Rural and other underserved markets.--The 
                enterprise shall lead the industry in 
                developing loan products and flexible 
                underwriting guidelines to facilitate a 
                secondary market for mortgages on housing for 
                very low-, low-, and moderate-income families 
                in rural areas, and for mortgages for housing 
                for any other underserved market for very low-, 
                low-, and moderate-income families that the 
                Secretary identifies as lacking adequate credit 
                through conventional lending sources. Such 
                underserved markets may be identified by 
                borrower type, market segment, or geographic 
                area.
  [(a)] (b) In General.--To meet the [low- and moderate-income 
housing goal under section 1332, the special affordable housing 
goal under section 1333, and the central cities, rural areas, 
and other underserved areas housing goal under section 1334] 
housing goals established under this subpart and to carry out 
the duty under subsection (a) of this section, each enterprise 
shall--
          (1)  * * *

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

        which shall include developing appropriate and prudent 
        underwriting standards, business practices, repurchase 
        requirements, pricing, fees, and procedures; and
          (4) develop the institutional capacity to help 
        finance low- and moderate-income housing, including 
        housing for first-time homebuyers[; and].
          [(5) assist in maintaining the affordability of 
        assisted units in eligible multifamily housing projects 
        with expiring contracts, as defined under the 
        Multifamily Assisted Housing Reform and Affordability 
        Act of 1997.]
  [(b) Affordable Housing Goals.--Actions taken under 
subsection (a)(5) shall constitute part of the contribution of 
each entity in meeting its affordable housing goals under 
sections 1332, 1333, and 1334 for any fiscal year, as 
determined by the Secretary.]
  (c) Evaluation and Reporting of Compliance.--
          (1) In general.--Not later than 6 months after the 
        effective date under section 185 of the Federal Housing 
        Finance Reform Act of 2005, the Director shall 
        establish a manner for evaluating whether, and the 
        extent to which, the enterprises have complied with the 
        duty under subsection (a) to serve underserved markets 
        and for rating the extent of such compliance. Using 
        such method, the Director shall, for each year, 
        evaluate such compliance and rate the performance of 
        each enterprise as to extent of compliance. The 
        Director shall include such evaluation and rating for 
        each enterprise for a year in the report for that year 
        submitted pursuant to section 1319B(a).
          (2) Separate evaluations.--In determining whether an 
        enterprise has complied with the duty referred to in 
        paragraph (1), the Director shall separately evaluate 
        whether the enterprise has complied with such duty with 
        respect to each of the underserved markets identified 
        in subsection (a), taking into consideration--
                  (A) the development of loan products and more 
                flexible underwriting guidelines;
                  (B) the extent of outreach to qualified loan 
                sellers in each of such underserved markets; 
                and
                  (C) the volume of loans purchased in each of 
                such underserved markets.

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

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

           *       *       *       *       *       *       *

          (4) Enforcement of duty to provide mortgage credit to 
        underserved markets.--The duty under section 1335(a) of 
        each enterprise to serve underserved markets (as 
        determined in accordance with section 1335(c)) shall be 
        enforceable under this section to the same extent and 
        under the same provisions that the housing goals 
        established under sections 1332, 1333, and 1334 are 
        enforceable. Such duty shall not be enforceable under 
        any other provision of this title (including subpart C 
        of this part) other than this section or under any 
        provision of the Federal National Mortgage Association 
        Charter Act or the Federal Home Loan Mortgage 
        Corporation Act.
  (b) Notice and Preliminary Determination of Failure To Meet 
Goals.--
          [(1) Notice.--If the Secretary determines that an 
        enterprise has failed, or that there is a substantial 
        probability that an enterprise will fail, to meet any 
        housing goal established under section 1332, 1333, or 
        1334, the Secretary shall provide written notice to the 
        enterprise of such a determination, the reasons for 
        such determination, the requirement to submit a housing 
        plan under subsection (c) of this section, and the 
        information on which the Secretary based the 
        determination or imposed such requirement.]
          (1) Notice.--If the Director preliminarily determines 
        that an enterprise has failed, or that there is a 
        substantial probability that an enterprise will fail, 
        to meet any housing goal established under this 
        subpart, the Director shall provide written notice to 
        the enterprise of such a preliminary determination, the 
        reasons for such determination, and the information on 
        which the Director based the determination.
          (2) Response period.--
                  (A) In general.--During the 30-day period 
                beginning on the date that an enterprise is 
                provided notice under paragraph (1), the 
                enterprise may submit to the [Secretary] 
                Director any written information that the 
                enterprise considers appropriate for 
                consideration by the [Secretary] Director in 
                finally determining whether such failure has 
                occurred or whether the achievement of such 
                goal was or is feasible.
                  [(B) Extended period.--The Secretary may 
                extend the period under subparagraph (A) for 
                good cause for not more than 30 additional 
                days.
                  [(C) Shortened period.--The Secretary may 
                shorten the period under subparagraph (A) for 
                good cause.]
                  (B) Extension or shortening of period.--The 
                Director may--
                          (i) extend the period under 
                        subparagraph (A) for good cause for not 
                        more than 30 additional days; and
                          (ii) shorten the period under 
                        subparagraph (A) for good cause.
                  [(D)] (C) Failure to respond.--The failure of 
                an enterprise to provide information during the 
                30-day period under this paragraph (as extended 
                or shortened) shall waive any right of the 
                enterprise to comment on the proposed 
                determination or action of the [Secretary] 
                Director.
          (3) Consideration of information and determination.--
                  (A) In general.--After the expiration of the 
                response period under paragraph (2) or upon 
                receipt of information provided during such 
                period by the enterprise, whichever occurs 
                earlier, the [Secretary] Director shall 
                [determine] issue a final determination of (i) 
                whether the enterprise has failed, or there is 
                a substantial probability that the enterprise 
                will fail, to meet the housing goal, and (ii) 
                whether (taking into consideration market and 
                economic conditions and the financial condition 
                of the enterprise) the achievement of the 
                housing goal was or is feasible.
                  (B) Considerations.--In making such final 
                determinations, the [Secretary] Director shall 
                take into consideration any relevant 
                information submitted by the enterprise during 
                the response period.
                  (C) Notice.--The [Secretary] Director shall 
                provide written notice to the enterprise, the 
                [Committee on Banking, Finance and Urban 
                Affairs] Committee on Financial Services of the 
                House of Representatives, and the Committee on 
                Banking, Housing, and Urban Affairs of the 
                Senate, of--
                          (i) each final determination that an 
                        enterprise has failed, or that there is 
                        a substantial probability that the 
                        enterprise will fail, to meet a housing 
                        goal;
                          (ii) each final determination that 
                        the achievement of a housing goal was 
                        or is feasible; and
                          (iii) the reasons for each such final 
                        determination.
                Such notice shall respond to any information 
                submitted during the response period.
  [(c) Housing Plans.--
          [(1) Requirement.--If the Secretary finds pursuant to 
        subsection (b), that an enterprise has failed, or that 
        there is a substantial probability that an enterprise 
        will fail, to meet any housing goal established under 
        section 1332, 1333, or 1334, and that the achievement 
        of the housing goal was or is feasible, the Secretary 
        shall require the enterprise to submit a housing plan 
        under this subsection for approval by the Secretary.]
  (c) Cease and Desist Orders, Civil Money Penalties, and 
Remedies Including Housing Plans.--
          (1) Requirement.--If the Director finds, pursuant to 
        subsection (b), that there is a substantial probability 
        that an enterprise will fail, or has actually failed, 
        to meet any housing goal under this subpart and that 
        the achievement of the housing goal was or is feasible, 
        the Director may require that the enterprise submit a 
        housing plan under this subsection. If the Director 
        makes such a finding and the enterprise refuses to 
        submit such a plan, submits an unacceptable plan, fails 
        to comply with the plan or the Director finds that the 
        enterprise has failed to meet any housing goal under 
        this subpart, in addition to requiring an enterprise to 
        submit a housing plan, the Director may issue a cease 
        and desist order in accordance with section 1341, 
        impose civil money penalties in accordance with section 
        1345, or order other remedies as set forth in paragraph 
        (7) of this subsection.
          (2) [Contents.--Each housing plan] housing plan.--If 
        the Director requires a housing plan under this 
        section, such a plan shall be a feasible plan 
        describing the specific actions the enterprise will 
        take--
                  (A) to achieve the goal for the next calendar 
                year; or
                  (B) if the [Secretary] Director determines 
                that there is a substantial probability that 
                the enterprise will fail to meet a goal in the 
                current year, to make such improvements and 
                changes in its operations as are reasonable in 
                the remainder of such year.
        The plan shall be sufficiently specific to enable the 
        [Secretary] Director to monitor compliance 
        periodically.
          (3) Deadline for submission.--The [Secretary] 
        Director shall, by regulation, establish a deadline for 
        an enterprise to comply with any remedial action or 
        submit a housing plan to the [Secretary] Director, 
        which may not be more than 45 days after the enterprise 
        is provided notice [under subsection (b)(3) that a 
        housing plan is required]. The regulations shall 
        provide that the [Secretary] Director may extend the 
        deadline to the extent that the [Secretary] Director 
        determines necessary. Any extension of the deadline 
        shall be in writing and for a time certain.
          (4) Approval.--[The Secretary shall review each 
        housing plan submitted under this subsection and, not 
        later than 30 days after submission of the plan, 
        approve or disapprove the plan. The Secretary may 
        extend the period for approval or disapproval for a 
        single additional 30-day period if the Secretary 
        determines it necessary.] The Director shall review 
        each submission by an enterprise, including a housing 
        plan submitted under this subsection, and not later 
        than 30 days after submission, approve or disapprove 
        the plan or other action. The Director may extend the 
        period for approval or disapproval for a single 
        additional 30-day period if the Director determines 
        such extension necessary. The [Secretary] Director 
        shall approve any plan that the [Secretary] Director 
        determines is likely to succeed, and conforms with the 
        Federal National Mortgage Association Charter Act or 
        the Federal Home Loan Mortgage Corporation Act (as 
        applicable), this title, and any other applicable laws 
        and regulations.
          (5) Notice of approval and disapproval.--The 
        [Secretary] Director shall provide written notice to 
        any enterprise submitting a housing plan of the 
        approval or disapproval of the plan (which shall 
        include the reasons for any disapproval of the plan) 
        and of any extension of the period for approval or 
        disapproval.
          (6) Resubmission.--If the initial housing plan 
        submitted by an enterprise is disapproved, the 
        enterprise shall submit an amended plan acceptable to 
        the [Secretary] Director within 30 days or such longer 
        period that the [Secretary] Director determines is in 
        the public interest.
          (7) Additional remedies for failure to meet goals.--
        In addition to ordering a housing plan under this 
        section, issuing cease and desist orders under section 
        1341, and ordering civil money penalties under section 
        1345, the Director may seek other actions when an 
        enterprise fails to meet a goal, and exercise 
        appropriate enforcement authority available to the 
        Director under this Act to prohibit the enterprise from 
        entering into new programs and new business activities 
        and to order the enterprise to suspend programs and 
        business activities pending its achievement of the 
        goal.

[SEC. 1337. REPORTS DURING TRANSITION.

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

[SEC. 1338. EFFECTIVE DATE OF TRANSITION GOALS.

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

SEC. 1337. AFFORDABLE HOUSING FUND.

  (a) Establishment and Purpose.--Each enterprise shall 
establish and manage an affordable housing fund in accordance 
with this section. The purpose of the affordable housing fund 
shall be--
          (1) to increase homeownership for extremely low-and 
        very low-income families;
          (2) to increase investment in housing in low-income 
        areas, and areas designated as qualified census tracts 
        or an area of chronic economic distress pursuant to 
        section 143(j) of the Internal Revenue Code of 1986 (26 
        U.S.C. 143(j));
          (3) to increase and preserve the supply of rental and 
        owner-occupied housing for extremely low- and very low-
        income families; and
          (4) to increase investment in economic and community 
        development in economically underserved areas.
  (b) Allocation of Amounts by Enterprises.--
          (1) In general.--In accordance with regulations 
        issued by the Director under subsection (l) and subject 
        to paragraph (2) of this subsection, each enterprise 
        shall allocate to the affordable housing fund 
        established under subsection (a) by the enterprise, in 
        each year beginning after the effective date under 
        section 185 of the Federal Housing Finance Reform Act 
        of 2005, 5 percent of the after-tax income of the 
        enterprise for the preceding year.
          (2) Limitation.--An enterprise shall not be required 
        to make an allocation for a year to the affordable 
        housing fund of the enterprise established under 
        subsection (a) unless--
                  (A) the enterprise is classified by the 
                Director at the time of such allocation as 
                adequately capitalized; and
                  (B) the enterprise generated after-tax income 
                for the preceding year.
          (3) Determination of after-tax income.--For purposes 
        of this section, the term ``after-tax income'' means, 
        with respect to an enterprise for a year, the amount 
        reported by the enterprise for such year in the 
        enterprise's annual report for such year that is filed 
        with the Securities and Exchange Commission, except 
        that for any year in which no such filing is made by an 
        enterprise or such filing is not timely made, such term 
        means the amount determined by the Director based on 
        the income tax return filings of the enterprise.
  (c) Selection of Activities Funded Using Affordable Housing 
Fund Amounts.--Amounts from the affordable housing fund of the 
enterprise may be used, or committed for use, only for 
activities that--
          (1) are eligible under subsection (d) for such use; 
        and
          (2) are selected for funding by the enterprise in 
        accordance with the process and criteria for such 
        selection established pursuant to subsection (l)(2)(C).
  (d) Eligible Activities.--Amounts from the affordable housing 
fund of an enterprise shall be eligible for use, or for 
commitment for use, only for assistance for--
          (1) the production, preservation, and rehabilitation 
        of rental housing, including housing under the programs 
        identified in section 1335(a)(2)(B), except that 
        amounts provided from the Fund may be used for the 
        benefit only of extremely low- and very low-income 
        families;
          (2) the production, preservation, and rehabilitation 
        of housing for homeownership, including such forms as 
        downpayment assistance, closing cost assistance, and 
        assistance for interest-rate buy-downs, that--
                  (A) is available for purchase only for use as 
                a principal residence by families that qualify 
                both as--
                          (i) extremely low- and very-low 
                        income families at the times described 
                        in subparagraphs (A) through (C) of 
                        section 215(b)(2) of the Cranston-
                        Gonzalez National Affordable Housing 
                        Act (42 U.S.C. 12745(b)(2)); and
                          (ii) first-time homebuyers, as such 
                        term is defined in section 104 of the 
                        Cranston-Gonzalez National Affordable 
                        Housing Act (42 U.S.C. 12704), except 
                        that any reference in such section to 
                        assistance under title II of such Act 
                        shall for purposes of this section be 
                        considered to refer to assistance from 
                        the affordable housing fund of the 
                        enterprise;
                  (B) has an initial purchase price that meets 
                the requirements of section 215(b)(1) of the 
                Cranston-Gonzalez National Affordable Housing 
                Act; and
                  (C) is subject to the same resale 
                restrictions established under section 
                215(b)(3) of the Cranston-Gonzalez National 
                Affordable Housing Act and applicable to the 
                participating jurisdiction that is the State in 
                which such housing is located; and
          (3) leveraged grants under subsection (e).
  (e) Leveraged Grants.--
          (1) In general.--Pursuant to regulations issued by 
        the Director, each enterprise shall carry out a program 
        under this subsection to make leveraged grants from 
        amounts in the affordable housing fund of the 
        enterprise, subject to the requirements under this 
        subsection.
          (2) Eligible purposes.--Amounts from the affordable 
        housing fund of an enterprise may be used only for 
        leveraged grants under paragraph (4) for--
                  (A) the development, preservation, 
                rehabilitation, or purchase of affordable 
                housing that meets underserved needs for 
                affordable housing;
                  (B) community or economic development 
                activities in economically underserved areas; 
                or
                  (C) a combination of the activities 
                identified in subparagraphs (A) and (B).
          (3) Eligible sponsors.--A leveraged grant under this 
        subsection may be made only on behalf of a sponsor that 
        meets such requirements as the Director shall establish 
        for experience and success in carrying out the types of 
        activities proposed under the application of the 
        sponsor, such as the following entities:
                  (A) A low-income housing fund.
                  (B) A housing finance agency of a State or 
                unit of general local government.
                  (C) A non-profit organization having as one 
                of its principal purposes the development or 
                management of affordable housing.
                  (D) A community development financial 
                institution.
                  (E) A national non-profit housing 
                intermediary.
                  (F) A community development corporation.
                  (G) A community development entity.
          (4) Eligible uses.--Amounts from the affordable 
        housing fund of an enterprise may be used under this 
        subsection only for the following types of leveraged 
        grants:
                  (A) To provide loan loss reserves.
                  (B) To capitalize a revolving loan fund.
                  (C) To provide equity capitalization of an 
                affordable housing fund.
                  (D) To provide equity capitalization of a 
                community development or economic development 
                fund.
                  (E) For risk sharing loans.
                  (F) For the funding of a specific, detailed 
                investment plan that identifies the specific 
                types of uses and the expected timeframes with 
                respect to such uses.
          (5) Applications.--The Director shall provide, in the 
        application process established pursuant to subsection 
        (l)(2)(C), for eligible sponsors under paragraph (3) of 
        this subsection to submit applications to an enterprise 
        for leveraged grants pursuant to this subsection, which 
        shall include a detailed description of--
                  (A) the types of affordable housing or 
                community or economic development activities 
                for which the leveraged grant is made;
                  (B) the type of eligible leveraged grants 
                under paragraph (4) to be made in the project;
                  (C) the types, sources, and amounts of other 
                funding for the project;
                  (D) and the expected time frame of the 
                leveraged grant under this subsection.
          (6) Limitations.--The Director shall by regulation--
                  (A) ensure that leveraged grants pursuant to 
                this subsection are designed to alleviate need 
                for affordable housing in underserved markets 
                identified in section 1335(a) having the 
                greatest need for such housing or to address 
                community and economic development needs in 
                economically underserved areas having the 
                greatest need; and
                  (B) any returns from leveraged grants under 
                this subsection accrue to the affordable 
                housing fund of the enterprise and are 
                available for use only as provided under this 
                section.
  (f) Limitations on Use.--
          (1) Amounts for homeownership.--Of any amounts 
        allocated pursuant to subsection (b) in each year to 
        the affordable housing fund of an enterprise, not less 
        than 10 percent shall be used for activities under 
        paragraph (2) of subsection (d).
          (2) Amounts for leveraged grants.--Of any amounts 
        allocated pursuant to subsection (b) in each year to 
        the affordable housing fund of an enterprise, not more 
        than 12.5 percent shall be used for leveraged grants 
        under subsection (e).
          (3) Deadline for commitment or use.--Any amounts 
        allocated to the affordable housing fund of an 
        enterprise shall be used or committed for use within 
        two years of the date of such allocation.
          (4) Use of returns.--Any return on investment of any 
        amounts allocated pursuant to subsection (b) to the 
        affordable housing fund of an enterprise shall be 
        available for use by the enterprise only for eligible 
        activities under subsection (d).
          (5) Administrative costs.--The Director shall, by 
        regulation--
                  (A) provide that, except as provided in 
                subparagraph (B), amounts allocated to the 
                affordable housing fund of an enterprise may 
                not be used for administrative, outreach, or 
                other costs of--
                          (i) the enterprise; or
                          (ii) any recipient of amounts from 
                        the affordable housing fund; and
                  (B) limit the amount of any such 
                contributions that may be used for 
                administrative costs of the enterprise of 
                maintaining the affordable housing fund and 
                carrying out the program under this section.
          (6) Prohibition of consideration of use for meeting 
        housing goals.--In determining compliance with the 
        housing goals under this subpart, the Director may not 
        consider amounts used under this section for eligible 
        activities under subsection (d). The Director shall 
        give credit toward the achievement of such housing 
        goals to purchases of mortgages for housing that 
        receives funding under this section, but only to the 
        extent that such purchases are funded other than under 
        this section.
          (7) Prohibition of certain subgrants.--The Director 
        shall, by regulation, ensure that amounts from the 
        affordable housing fund of an enterprise awarded under 
        this section to a national non-profit housing 
        intermediary are not used for the purpose of 
        distributing subgrants to other non-profit entities.
  (g) Consistency of Use With Housing Needs.--
          (1) Quarterly reports.--The Director shall require 
        each enterprise to submit a report, on a quarterly 
        basis, to the Director and the affordable housing board 
        established under subsection (j) describing the 
        activities funded under this section during such 
        quarter with amounts from the affordable housing fund 
        of the enterprise established under this section. The 
        Director shall make such reports publicly available. 
        The affordable housing board shall review each report 
        by an enterprise to determine the consistency of such 
        activities funded with the criteria for selection of 
        such activities established pursuant to subsection 
        (l)(2)(C).
          (2) Replenishment.--If the affordable housing board 
        determines that an activity funded by an enterprise 
        with amounts from the affordable housing fund of the 
        enterprise is not consistent with the criteria 
        established pursuant to subsection (l)(2)(C), the board 
        shall notify the Director and the Director shall 
        require the enterprise to allocate to such affordable 
        housing fund (in addition to amounts allocated in 
        compliance with subsection (b)) an amount equal to the 
        sum of the amounts from the affordable housing fund 
        used and further committed for use for such activity.
  (h) Capital Requirements.--The utilization or commitment of 
amounts from the affordable housing fund of an enterprise shall 
not be subject to the risk-based capital requirements 
established pursuant to section 1361(a).
  (i) Reporting Requirement.--Each enterprise shall include, in 
the report required under section 309(m) of the Federal 
National Mortgage Association Charter Act or section 307(f) of 
the Federal Home Loan Mortgage Corporation Act, as applicable, 
a description of the actions taken by the enterprise to utilize 
or commit amounts allocated under this section to the 
affordable housing fund of the enterprise established under 
this section.
  (j) Affordable Housing Board.--
          (1) Appointment.--The Director shall appoint an 
        affordable housing board of 7, 9, or 11 persons, who 
        shall include--
                  (A) the Director, or the Director's designee;
                  (B) the Secretary of Housing and Urban 
                Development, or the Secretary's designee;
                  (C) the Secretary of Agriculture, or the 
                Secretary's designee;
                  (D) 2 persons from for-profit organizations 
                or businesses actively involved in providing or 
                promoting affordable housing for extremely low- 
                and very low-income households; and
                  (E) 2 persons from nonprofit organizations 
                actively involved in providing or promoting 
                affordable housing for extremely low- and very 
                low-income households.
          (2) Terms.--
                  (A) In general.--Except as provided in 
                subparagraph (B), the term of each member of 
                the affordable housing board appointed pursuant 
                to paragraph (1) (but not including members 
                appointed pursuant to subparagraphs (A), (B), 
                and (C)) shall be 3 years.
                  (B) Initial appointees.--The Director shall 
                appoint the initial members of the affordable 
                housing board not later than the expiration of 
                the 60-day period beginning on the date of the 
                enactment of this Act. As designated by the 
                Director at the time of appointment, of the 
                members of the affordable housing board first 
                appointed pursuant to paragraph (1) (but not 
                including members appointed pursuant to 
                subparagraphs (A), (B), and (C))--
                          (i) in the case of a board having 7 
                        members--
                                  (I) one shall be appointed 
                                for a term of one year; and
                                  (II) one shall be appointed 
                                for a term of two years;
                          (ii) in the case of a board having 9 
                        members--
                                  (I) two shall be appointed 
                                for a term of one year; and
                                  (II) two shall be appointed 
                                for a term of two years; and
                          (iii) in the case of a board having 
                        11 members--
                                  (I) two shall be appointed 
                                for a term of one year; and
                                  (II) three shall be appointed 
                                for a term of two years;
          (3) Duties.--The affordable housing board shall meet 
        not less than quarterly--
                  (A) to determine extremely low- and very low-
                income housing needs;
                  (B) to advise the Director with respect to--
                          (i) establishment of the selection 
                        criteria under subsection (l)(2)(C) 
                        that provide for appropriate use of 
                        amounts from the affordable housing 
                        funds of the enterprises to meet such 
                        needs; and
                          (ii) operation of, and changes to, 
                        the program under this section 
                        appropriate to meet such needs; and
                  (C) to review the reports submitted by the 
                enterprises pursuant to subsection (g)(1) to 
                determine whether the activities funded using 
                amounts from the affordable housing funds of 
                the enterprises comply with the regulations 
                issued pursuant to subsection (l)(2)(C) and 
                inform the Director of such determinations, for 
                purposes of subsection (g)(2).
          (4) Expenses and per diem.--Members of the board 
        shall receive travel expenses, including per diem in 
        lieu of subsistence, in accordance with sections 5702 
        and 5703 of title 5, United States Code.
          (5) Advisory committee.--The board shall be 
        considered an advisory committee for purposes of the 
        Federal Advisory Committee Act (5 U.S.C. App.).
          (6) Duration.-- The board shall have continued 
        existence until terminated by law.
  (k) Definition.--For purposes of this section, the term 
``economically underserved area'' means an area that 
predominantly includes census tracts for which--
          (1) at least 20 percent of the population is below 
        the poverty line (as such term is defined in section 
        673(2) of the Omnibus Budget Reconciliation Act of 1981 
        (42 U.S.C. 9902(2)), including any revision required by 
        such section), applicable to a family of the size 
        involved; or
          (2) median family income does not exceed the greater 
        of--
                  (A) 80 percent of the median family income 
                for the metropolitan statistical area in which 
                such census tracts are located; or
                  (B) 80 percent of the median family income 
                for the State in which such census tracts are 
                located.
  (l) Regulations.--
          (1) In general.--The Director shall issue regulations 
        to carry out this section.
          (2) Required contents.--The regulations issued under 
        this subsection shall include--
                  (A) authority for the Director to audit, 
                provide for an audit, or otherwise verify an 
                enterprise's activities, to ensure compliance 
                with this section;
                  (B) a requirement that the Director ensure 
                that the affordable housing fund of each 
                enterprise is audited not less than annually to 
                ensure compliance with this section;
                  (C) requirements for a process for 
                application to, and selection by, an enterprise 
                for activities to be funded with amounts from 
                the affordable housing fund, which shall 
                provide that--
                          (i) selection shall based upon 
                        specific criteria, including a 
                        prioritization of funding based upon--
                                  (I) greatest impact;
                                  (II) geographic diversity;
                                  (III) ability to obligate 
                                amounts and undertake 
                                activities so funded in a 
                                timely manner;
                                  (IV) in the case of rental 
                                housing projects under 
                                subsection (d)(1), the extent 
                                to which rents for units in the 
                                project funded are affordable, 
                                especially for extremely low-
                                income families; and
                                  (V) in the case of rental 
                                housing projects under 
                                subsection (d)(1), the extent 
                                of the duration for which such 
                                rents will remain affordable; 
                                and
                          (ii) an enterprise may not require 
                        for such selection that an activity 
                        involve financing or underwriting of 
                        any kind by the enterprise (other than 
                        funding through the affordable housing 
                        fund of the enterprise) and may not 
                        give preference in such selection to 
                        activities that involve such financing; 
                        and
                  (D) requirements to ensure that amounts from 
                the affordable housing funds of the enterprises 
                used for rental housing under subsection (d)(1) 
                are used only for the benefit of extremely low- 
                and very-low income families.
          (3) Limitation.--Any regulations issued by the 
        Director pursuant to this section shall be no more 
        restrictive on the enterprises' activities in 
        connection with the allocation of after-tax income 
        under this section than the regulations issued to 
        implement the affordable housing program of the Federal 
        home loan banks pursuant to section 10(j) of the 
        Federal Home Loan Bank Act (12 U.S.C. 1430(j)).

SEC. 1338. CONSISTENCY WITH MISSION.

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

               [Subpart C--Enforcement of Housing Goals]

                         Subpart C--Enforcement

SEC. 1341. CEASE-AND-DESIST PROCEEDINGS.

  [(a) Grounds for Issuance.--The Secretary may issue and serve 
a notice of charges under this section upon an enterprise if, 
in the determination of the Secretary--
          [(1) the enterprise has failed to submit a housing 
        plan that substantially complies with section 1336(c) 
        within the applicable period;
          [(2) the enterprise is engaging or has engaged, or 
        the Secretary has reasonable cause to believe that the 
        enterprise is about to engage, in any failure to make a 
        good faith effort to comply with a housing plan for the 
        enterprise submitted and approved under section 
        1336(c); or
          [(3) the enterprise has failed to submit the 
        information required under subsection (m) or (n) of 
        section 309 of the Federal National Mortgage 
        Association Charter Act, subsection (e) or (f) of 
        section 307 of the Federal Home Loan Mortgage 
        Corporation Act, or section 1337 of this title.]
  (a) Grounds for Issuance.--The Director may issue and serve a 
notice of charges under this section upon an enterprise if the 
Director determines--
          (1) the enterprise has failed to meet any housing 
        goal established under subpart B, following a written 
        notice and determination of such failure in accordance 
        with section 1336;
          (2) the enterprise has failed to submit a report 
        under section 1314, following a notice of such failure, 
        an opportunity for comment by the enterprise, and a 
        final determination by the Director;
          (3) the enterprise has failed to submit the 
        information required under subsection (m) or (n) of 
        section 309 of the Federal National Mortgage 
        Association Charter Act, or subsection (e) or (f) of 
        section 307 of the Federal Home Loan Mortgage 
        Corporation Act;
          (4) the enterprise has violated any provision of this 
        part or any order, rule or regulation under this part;
          (5) the enterprise has failed to submit a housing 
        plan that complies with section 1336(c) within the 
        applicable period; or
          (6) the enterprise has failed to comply with a 
        housing plan under section 1336(c).
  (b) Procedure.--
          (1) Notice of charges.--Each notice of charges shall 
        contain a statement of the facts constituting the 
        alleged conduct and shall fix a time and place at which 
        a hearing will be held to determine on the record 
        whether an order to cease and desist from such conduct 
        should issue.
          (2) Issuance of order.--If the [Secretary] Director 
        finds on the record made at such hearing that any 
        conduct specified in the notice of charges has been 
        established (or the enterprise consents pursuant to 
        section 1342(a)(4)), the [Secretary] Director may issue 
        and serve upon the enterprise an order [requiring the 
        enterprise to (A) submit a housing plan in compliance 
        with section 1336(c), (B) comply with the housing plan, 
        or (C) provide the information required under 
        subsection (m) or (n) of section 309 of the Federal 
        National Mortgage Association Charter Act, subsection 
        (e) or (f) of section 307 of the Federal Home Loan 
        Mortgage Corporation Act, or section 1337 of this 
        title.] requiring the enterprise to--
                  (A) comply with the goal or goals;
                  (B) submit a report under section 1314;
                  (C) comply with any provision this part or 
                any order, rule or regulation under such part;
                  (D) submit a housing plan in compliance with 
                section 1336(c);
                  (E) comply with a housing plan submitted 
                under section 1336(c); or
                  (F) provide the information required under 
                subsection (m) or (n) of section 309 of the 
                Federal National Mortgage Association Charter 
                Act or subsection (e) or (f) of section 307 of 
                the Federal Home Loan Mortgage Corporation Act, 
                as applicable.
  (c) Effective Date.--An order under this section shall become 
effective upon the expiration of the 30-day period beginning on 
the date of the service of the order upon the enterprise 
(except in the case of an order issued upon consent, which 
shall become effective at the time specified therein), and 
shall remain effective and enforceable as provided in the 
order, except to the extent that the order is stayed, modified, 
terminated, or set aside by action of the [Secretary] Director 
or otherwise, as provided in this subpart.
  [(d) Transition Period Limitation.--The Secretary may not 
impose any cease-and-desist order under this section for any 
failure by an enterprise, during the 2-year period beginning on 
the January 1, 1993, to comply with an approved housing plan, 
unless the Secretary determines that the enterprise has 
intentionally failed to make a good faith effort to comply with 
the approved plan.]

SEC. 1342. HEARINGS.

  (a)  * * *

           *       *       *       *       *       *       *

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

SEC. 1343. JUDICIAL REVIEW.

  (a) Commencement.--An enterprise that is a party to a 
proceeding under section 1341 or 1345 may obtain review of any 
final order issued under such section by filing in the United 
States Court of Appeals for the District of Columbia Circuit, 
within 30 days after the date of service of such order, a 
written petition praying that the order of the [Secretary] 
Director be modified, terminated, or set aside. The clerk of 
the court shall transmit a copy of the petition to the 
[Secretary] Director.
  (b) Filing of Record.--Upon receiving a copy of a petition, 
the [Secretary] Director shall file in the court the record in 
the proceeding, as provided in section 2112 of title 28, United 
States Code.
  (c) Jurisdiction.--Upon the filing of a petition, such court 
shall have jurisdiction, which upon the filing of the record by 
the [Secretary] Director shall (except as provided in the last 
sentence of section 1342(b)(2)) be exclusive, to affirm, 
modify, terminate, or set aside, in whole or in part, the order 
of the [Secretary] Director.

           *       *       *       *       *       *       *

  (e) Order To Pay Penalty.--Such court shall have the 
authority in any such review to order payment of any penalty 
imposed by the [Secretary] Director under this subpart.
  (f) No Automatic Stay.--The commencement of proceedings for 
judicial review under this section shall not, unless 
specifically ordered by the court, operate as a stay of any 
order issued by the [Secretary] Director.

SEC. 1344. ENFORCEMENT AND JURISDICTION.

  [(a) Enforcement.--The Secretary may request the Attorney 
General of the United States to bring an action in the United 
States District Court for the District of Columbia for the 
enforcement of any effective notice or order issued under 
section 1341 or 1345. Such court shall have jurisdiction and 
power to order and require compliance herewith.]
  (a) Enforcement.--The Director may, in the discretion of the 
Director, apply to the United States District Court for the 
District of Columbia, or the United States district court 
within the jurisdiction of which the headquarters of the 
enterprise is located, for the enforcement of any effective and 
outstanding notice or order issued under section 1341 or 1345, 
or request that the Attorney General of the United States bring 
such an action. Such court shall have jurisdiction and power to 
order and require compliance with such notice or order.

           *       *       *       *       *       *       *


SEC. 1345. CIVIL MONEY PENALTIES.

  [(a) Authority.--The Secretary may impose a civil money 
penalty, in accordance with the provisions of this section, on 
any enterprise that has failed--
          [(1) to submit a housing plan that substantially 
        complies with section 1336(c) within the applicable 
        period;
          [(2) to make a good faith effort to comply with a 
        housing plan for the enterprise submitted and approved 
        under section 1336(c); or
          [(3) to submit the information required under 
        subsection (m) or (n) of section 309 of the Federal 
        National Mortgage Association Charter Act, subsection 
        (e) or (f) of section 307 of the Federal Home Loan 
        Mortgage Corporation Act, or section 1337 of this 
        title.
  [(b) Amount of Penalty.--The amount of the penalty, as 
determined by the Secretary, may not exceed--
          [(1) for any failure described in subsection (a)(1), 
        $25,000 for each day that the failure occurs; and
          [(2) for any failure described in subsection (a) (2) 
        or (3), $10,000 for each day that the failure occurs.]
  (a) Authority.--The Director may impose a civil money 
penalty, in accordance with the provisions of this section, on 
any enterprise that has failed to--
          (1) meet any housing goal established under subpart 
        B, following a written notice and determination of such 
        failure in accordance with section 1336(b);
          (2) submit a report under section 1314, following a 
        notice of such failure, an opportunity for comment by 
        the enterprise, and a final determination by the 
        Director;
          (3) submit the information required under subsection 
        (m) or (n) of section 309 of the Federal National 
        Mortgage Association Charter Act, or subsection (e) or 
        (f) of section 307 of the Federal Home Loan Mortgage 
        Corporation Act;
          (4) comply with any provision of this part or any 
        order, rule or regulation under this part;
          (5) submit a housing plan pursuant to section 1336(c) 
        within the required period; or
          (6) comply with a housing plan for the enterprise 
        under section 1336(c).
  (b) Amount of Penalty.--The amount of the penalty, as 
determined by the Director, may not exceed--
          (1) for any failure described in paragraph (1), (5), 
        or (6) of subsection (a), $50,000 for each day that the 
        failure occurs; and
          (2) for any failure described in paragraph (2), (3), 
        or (4) of subsection (a), $20,000 for each day that the 
        failure occurs.
  (c) Procedures.--
          (1) Establishment.--The [Secretary] Director shall 
        establish standards and procedures governing the 
        imposition of civil money penalties under this section. 
        Such standards and procedures--
                  (A) shall provide for the [Secretary] 
                Director to notify the enterprise in writing of 
                the [Secretary's] Director's determination to 
                impose the penalty, which shall be made on the 
                record; and
                  (B) shall provide for the imposition of a 
                penalty only after the enterprise has been 
                given an opportunity for a hearing on the 
                record pursuant to section 1342[; and].
                  [(C) may provide for review by the Director 
                for any determination or order, or 
                interlocutory ruling, arising from a hearing.]
          (2) Factors in determining amount of penalty.--In 
        determining the amount of a penalty under this section, 
        the [Secretary] Director shall give consideration to 
        such factors as the gravity of the offense, any history 
        of prior offenses, ability to pay the penalty, injury 
        to the public, benefits received, deterrence of future 
        violations, and such other factors as the [Secretary] 
        Director may determine, by regulation, to be 
        appropriate. In determining the penalty under 
        subsection (a)(1), the Director shall give 
        consideration to the length of time the enterprise 
        should reasonably take to achieve the goal.
  (d) Action To Collect Penalty.--If an enterprise fails to 
comply with an order by the [Secretary] Director imposing a 
civil money penalty under this section, after the order is no 
longer subject to review as provided by sections 1342 and 1343, 
the [Secretary] Director may [request the Attorney General of 
the United States to], in the discretion of the Director, bring 
an action in the United States District Court for the District 
of Columbia to obtain a monetary judgment against the 
enterprise and such other relief as may be available, or 
request that the Attorney General of the United States bring 
such an action. The monetary judgment may, in the court's 
discretion, include the attorneys fees and other expenses 
incurred by the United States in connection with the action. In 
an action under this subsection, the validity and 
appropriateness of the order imposing the penalty shall not be 
subject to review.
  (e) Settlement by [Secretary] Director.--The [Secretary] 
Director may compromise, modify, or remit any civil money 
penalty which may be, or has been, imposed under this section.
  [(f) Transition Period Limitation.--The Secretary may not 
impose any civil money penalty under this section for any 
failure by an enterprise, during the 2-year period beginning on 
January 1, 1993, to comply with an approved housing plan, 
unless the Secretary determines that the enterprise has 
intentionally failed to make a good faith effort to comply with 
an approved plan.]
  [(g)] (f) Deposit of Penalties.--The [Secretary] Director 
shall deposit any civil money penalties collected under this 
section into the general fund of the Treasury.

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

  (a) In General.--The [Secretary] Director shall make 
available to the public--
          (1) any written agreement or other written statement 
        for which a violation may be redressed by the 
        [Secretary] Director or any modification to or 
        termination thereof, unless the [Secretary] Director, 
        in the Secretary's discretion, determines that public 
        disclosure would be contrary to the public interest or 
        determines under subsection (c) that public disclosure 
        would seriously threaten the financial health or 
        security of the enterprise;
          (2) any order that is issued with respect to any 
        administrative enforcement proceeding initiated by the 
        [Secretary] Director under this subpart and that has 
        become final in accordance with sections 1342 and 1343; 
        and

           *       *       *       *       *       *       *

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

SEC. 1347. NOTICE OF SERVICE.

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

SEC. 1348. SUBPOENA AUTHORITY.

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

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *


[SEC. 1349. REGULATIONS.

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

           *       *       *       *       *       *       *


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

[SEC. 1361. RISK-BASED CAPITAL LEVELS.

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

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

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

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

SEC. 1362. MINIMUM CAPITAL LEVELS.

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

           *       *       *       *       *       *       *

  [(b) Transition.--Notwithstanding subsection (a), during the 
18-month period beginning upon the date of the enactment of 
this Act, the minimum capital level for each enterprise shall 
be the sum of--
          [(1) 2.25 percent of the aggregate on-balance sheet 
        assets of the enterprise, as determined in accordance 
        with generally accepted accounting principles;
          [(2) 0.40 percent of the unpaid principal balance of 
        outstanding mortgage-backed securities and 
        substantially equivalent instruments issued or 
        guaranteed by the enterprise that are not included in 
        paragraph (1); and
          [(3) 0.40 percent of other off-balance sheet 
        obligations of the enterprise not included in paragraph 
        (2) (excluding commitments in excess of 50 percent of 
        the average dollar amount of the commitments 
        outstanding each quarter over the preceding 4 
        quarters), except that the Director shall adjust such 
        percentage to reflect differences in the credit risk of 
        such obligations in relation to the instruments 
        included in paragraph (2).]
  (b) Federal Home Loan Banks.--For purposes of this subtitle, 
the minimum capital level for each Federal home loan bank shall 
be the minimum capital required to be maintained to comply with 
the leverage requirement for the bank established under section 
6(a)(2) of the Federal Home Loan Bank Act (12 U.S.C. 
1426(a)(2)).
  (c) Establishment of Revised Minimum Capital Levels.--
Notwithstanding subsections (a) and (b) and notwithstanding the 
capital classifications of the regulated entities, the Director 
may, by regulations issued under section 1319G(b), establish a 
minimum capital level for the enterprises, for the Federal home 
loan banks, or for both the enterprises and the banks, that is 
higher than the level specified in subsection (a) for the 
enterprises or the level specified in subsection (b) for the 
Federal home loan banks, to the extent needed to ensure that 
the regulated entities operate in a safe and sound manner.
  (d) Authority To Require Temporary Increase.--Notwithstanding 
subsections (a) and (b) and any minimum capital level 
established pursuant to subsection (c), the Director may, by 
order, increase the minimum capital level for a regulated 
entity for such period as the Director may provide if the 
Director--
          (1) makes any of the determinations specified in 
        subparagraphs (A) through (C) of section 1364(c)(1); or
          (2) determines that the regulated entity has violated 
        any of the prudential management and operations 
        standards established pursuant to section 1313A and, as 
        a result of such violation, is operating in an unsafe 
        and unsound manner.
  (e) Authority To Establish Additional Capital and Reserve 
Requirements for Particular Programs.--The Director may, at any 
time by order or regulation, establish such capital or reserve 
requirements with respect to any program or activity of a 
regulated entity as the Director considers appropriate to 
ensure that the regulated entity operates in a safe and sound 
manner, with sufficient capital and reserves to support the 
risks that arise in the operations and management of the 
regulated entity.
  (f) Periodic Review.--The Director shall periodically review 
the amount of core capital maintained by the enterprises, the 
amount of capital retained by the Federal home loan banks, and 
the minimum capital levels established for such regulated 
entities pursuant to this section. The Director may, by 
regulations issued under section 1319G(b), adjust the minimum 
capital levels as necessary, based on the Director's review.

SEC. 1363. CRITICAL CAPITAL LEVELS.

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

           *       *       *       *       *       *       *

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

SEC. 1364. CAPITAL CLASSIFICATIONS.

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

           *       *       *       *       *       *       *

  [(b) Discretionary Classification.--If at any time the 
Director determines in writing that an enterprise is engaging 
in conduct not approved by the Director that could result in a 
rapid depletion of core capital or that the value of the 
property subject to mortgages held or securitized by the 
enterprise has decreased significantly, the Director may 
classify the enterprise--
          [(1) as undercapitalized, if the enterprise is 
        otherwise classified as adequately capitalized;
          [(2) as significantly undercapitalized, if the 
        enterprise is otherwise classified as undercapitalized; 
        and
          [(3) as critically undercapitalized, if the 
        enterprise is otherwise classified as significantly 
        undercapitalized.]
  (b) Federal Home Loan Banks.--
          (1) Establishment and criteria.--For purposes of this 
        subtitle, the Director shall, by regulation--
                  (A) establish the capital classifications 
                specified under paragraph (2) for the Federal 
                home loan banks;
                  (B) establish criteria for each such capital 
                classification based on the amount and types of 
                capital held by a bank and the risk-based, 
                minimum, and critical capital levels for the 
                banks and taking due consideration of the 
                capital classifications established under 
                subsection (a) for the enterprises, with such 
                modifications as the Director determines to be 
                appropriate to reflect the difference in 
                operations between the banks and the 
                enterprises; and
                  (C) shall classify the Federal home loan 
                banks according to such capital 
                classifications.
          (2) Classifications.--The capital classifications 
        specified under this paragraph are--
                  (A) adequately capitalized;
                  (B) undercapitalized;
                  (C) significantly undercapitalized; and
                  (D) critically undercapitalized.
  (c) Discretionary Classification.--
          (1) Grounds for reclassification.--The Director may 
        reclassify a regulated entity under paragraph (2) if--
                  (A) at any time, the Director determines in 
                writing that the regulated entity is engaging 
                in conduct that could result in a rapid 
                depletion of core or total capital or, in the 
                case of an enterprise, that the value of the 
                property subject to mortgages held or 
                securitized by the enterprise has decreased 
                significantly;
                  (B) after notice and an opportunity for 
                hearing, the Director determines that the 
                regulated entity is in an unsafe or unsound 
                condition; or
                  (C) pursuant to section 1371(b), the Director 
                deems the regulated entity to be engaging in an 
                unsafe or unsound practice.
          (2) Reclassification.--In addition to any other 
        action authorized under this title, including the 
        reclassification of a regulated entity for any reason 
        not specified in this subsection, if the Director takes 
        any action described in paragraph (1) the Director may 
        classify a regulated entity--
                  (A) as undercapitalized, if the regulated 
                entity is otherwise classified as adequately 
                capitalized;
                  (B) as significantly undercapitalized, if the 
                regulated entity is otherwise classified as 
                undercapitalized; and
                  (C) as critically undercapitalized, if the 
                regulated entity is otherwise classified as 
                significantly undercapitalized.
  [(c)] (d) Quarterly Determination.--The Director shall 
determine the capital classification of the [enterprises] 
regulated entities for purposes of this subtitle on not less 
than a quarterly basis (and as appropriate under [subsection 
(b)] subsection (c)). [The first such determination shall be 
made during the 3-month period beginning on the appointment of 
the Director.]
  (e) Restriction on Capital Distributions.--
          (1) In general.--A regulated entity shall make no 
        capital distribution if, after making the distribution, 
        the regulated entity would be undercapitalized.
          (2) Exception.--Notwithstanding paragraph (1), the 
        Director may permit a regulated entity, to the extent 
        appropriate or applicable, to repurchase, redeem, 
        retire, or otherwise acquire shares or ownership 
        interests if the repurchase, redemption, retirement, or 
        other acquisition--
                  (A) is made in connection with the issuance 
                of additional shares or obligations of the 
                regulated entity in at least an equivalent 
                amount; and
                  (B) will reduce the financial obligations of 
                the regulated entity or otherwise improve the 
                financial condition of the entity.
  [(d)] (f) Implementation.--Notwithstanding any other 
provision of this section, during the period beginning on the 
date of the enactment of this Act and ending upon the effective 
date of section 1365 (as provided in section 1365(c)), an 
enterprise shall be classified as adequately capitalized if the 
enterprise maintains an amount of core capital that is equal to 
or exceeds the minimum capital level for the enterprise under 
section 1362.

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

  (a) Mandatory Actions.--
          (1) Required monitoring.--The Director shall--
                  (A) closely monitor the condition of any 
                regulated entity that is classified as 
                undercapitalized;
                  (B) closely monitor compliance with the 
                capital restoration plan, restrictions, and 
                requirements imposed under this section; and
                  (C) periodically review the plan, 
                restrictions, and requirements applicable to 
                the undercapitalized regulated entity to 
                determine whether the plan, restrictions, and 
                requirements are achieving the purpose of this 
                section.
          [(1)] (2) Capital restoration plan.--[An enterprise] 
        A regulated entity that is classified as 
        undercapitalized shall, within the time period provided 
        in section 1369C (b) and (d), submit to the Director a 
        capital restoration plan that complies with section 
        1369C and carry out the plan after approval.
          [(2)] (3) Restriction on capital distributions.--[An 
        enterprise] A regulated entity that is classified as 
        undercapitalized may not make any capital distribution 
        that would result in [the enterprise] the regulated 
        entity being reclassified as significantly 
        undercapitalized or critically undercapitalized.
          (4) Restriction of asset growth.--A regulated entity 
        that is classified as undercapitalized shall not permit 
        its average total assets (as such term is defined in 
        section 1316(b) during any calendar quarter to exceed 
        its average total assets during the preceding calendar 
        quarter unless--
                  (A) the Director has accepted the capital 
                restoration plan of the regulated entity;
                  (B) any increase in total assets is 
                consistent with the plan; and
                  (C) the ratio of total capital to assets for 
                the regulated entity increases during the 
                calendar quarter at a rate sufficient to enable 
                the entity to become adequately capitalized 
                within a reasonable time.
          (5) Prior approval of acquisitions, new programs, and 
        new business activities.--A regulated entity that is 
        classified as undercapitalized shall not, directly or 
        indirectly, acquire any interest in any entity or 
        engage in any new program or new business activity 
        unless--
                  (A) the Director has accepted the capital 
                restoration plan of the regulated entity, the 
                entity is implementing the plan, and the 
                Director determines that the proposed action is 
                consistent with and will further the 
                achievement of the plan; or
                  (B) the Director determines that the proposed 
                action will further the purpose of this 
                section.
  (b) Discretionary Reclassification [From Undercapitalized to 
Significantly Undercapitalized].--The Director may reclassify 
as significantly undercapitalized [an enterprise] a regulated 
entity that is classified as undercapitalized (and [the 
enterprise] the regulated entity shall be subject to the 
provisions of section 1366) if--
          (1) [the enterprise] the regulated entity does not 
        submit a capital restoration plan that is substantially 
        in compliance with section 1369C within the applicable 
        period or the Director does not approve the capital 
        restoration plan submitted by [the enterprise] the 
        regulated entity; or
          (2) the Director determines that [the enterprise] the 
        regulated entity has failed to make, in good faith, 
        reasonable efforts necessary to comply with the capital 
        restoration plan and fulfill the schedule for the plan 
        approved by the Director.
  [(c) Effective Date.--This section shall take effect upon the 
expiration of the 1-year period beginning on the date of the 
effectiveness of the regulations issued under section 1361(e) 
establishing the risk-based capital test.]
  (c) Other Discretionary Safeguards.--The Director may take, 
with respect to a regulated entity that is classified as 
undercapitalized, any of the actions authorized to be taken 
under section 1366 with respect to a regulated entity that is 
classified as significantly undercapitalized, if the Director 
determines that such actions are necessary to carry out the 
purpose of this subtitle.

SEC. 1366. SUPERVISORY ACTIONS APPLICABLE TO SIGNIFICANTLY 
                    UNDERCAPITALIZED [ENTERPRISES] ENTITIES.

  (a)  * * *
          (2) Restrictions on capital distributions.--
                  (A) Prior approval.--An enterprise that is 
                classified as significantly undercapitalized 
                may not make any capital distribution that 
                would result in the enterprise being 
                reclassified as critically undercapitalized. An 
                enterprise that is classified as significantly 
                undercapitalized [enterprise] may not make any 
                other capital distribution unless the Director 
                approves the distribution.

           *       *       *       *       *       *       *

  (b) [Discretionary Supervisory Actions] Specific Actions.--In 
addition to any other actions taken by the Director (including 
actions under subsection (a)), the Director [may, at any time, 
take any] shall carry out this section by taking, at any time, 
one or more of the following actions with respect to an 
enterprise that is classified as significantly 
undercapitalized:
          (1)  * * *

           *       *       *       *       *       *       *

          (5) Improvement of management.--Take one or more of 
        the following actions:
                  (A) New election of board.--Order a new 
                election for the board of directors of the 
                regulated entity.
                  (B) Dismissal of directors or executive 
                officers.--Require the regulated entity to 
                dismiss from office any director or executive 
                officer who had held office for more than 180 
                days immediately before the entity became 
                undercapitalized. Dismissal under this 
                subparagraph shall not be construed to be a 
                removal pursuant to the Director's enforcement 
                powers provided in section 1377.
                  (C) Employ qualified executive officers.--
                Require the regulated entity to employ 
                qualified executive officers (who, if the 
                Director so specifies, shall be subject to 
                approval by the Director).
          [(5)] (6) Reclassification from significantly to 
        critically undercapitalized.--The Director may 
        reclassify as critically undercapitalized an enterprise 
        that is classified as significantly undercapitalized 
        (and the enterprise shall be subject to the provisions 
        of section 1367) if--
                  (A)  * * *

           *       *       *       *       *       *       *

          [(6)] (7) Conservatorship.--Appoint a conservator for 
        the enterprise in accordance with the provisions of 
        [section 1369 (excluding subsection (a) (1) and (2))] 
        section 1367, but only if the Director determines--
                  (A)  * * *

           *       *       *       *       *       *       *

          (8) Other action.--Require the regulated entity to 
        take any other action that the Director determines will 
        better carry out the purpose of this section than any 
        of the actions specified in this paragraph.
  (c) Restriction on Compensation of Executive Officers.--A 
regulated entity that is classified as significantly 
undercapitalized may not, without prior written approval by the 
Director--
          (1) pay any bonus to any executive officer; or
          (2) provide compensation to any executive officer at 
        a rate exceeding that officer's average rate of 
        compensation (excluding bonuses, stock options, and 
        profit sharing) during the 12 calendar months preceding 
        the calendar month in which the regulated entity became 
        undercapitalized.
  [(c)] (d) Effective Date.--This section shall take effect 
upon the first classification of [the enterprises] the 
regulated entities within capital classifications that occurs 
under section 1364.

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

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

SEC. 1367. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED REGULATED 
                    ENTITIES.

  (a) Appointment of Agency as Conservator or Receiver.--
          (1) In general.--Notwithstanding any other provision 
        of Federal or State law, if any of the grounds under 
        paragraph (3) exist, at the discretion of the Director, 
        the Director may establish a conservatorship or 
        receivership, as appropriate, for the purpose of 
        reorganizing, rehabilitating, or winding up the affairs 
        of a regulated entity.
          (2) Appointment.--In any conservatorship or 
        receivership established under this section, the 
        Director shall appoint the Agency as conservator or 
        receiver.
          (3) Grounds for appointment.--The grounds for 
        appointing a conservator or receiver for a regulated 
        entity are as follows:
                  (A) Assets insufficient for obligations.--The 
                assets of the regulated entity are less than 
                the obligations of the regulated entity to its 
                creditors and others.
                  (B) Substantial dissipation.--Substantial 
                dissipation of assets or earnings due to--
                          (i) any violation of any provision of 
                        Federal or State law; or
                          (ii) any unsafe or unsound practice.
                  (C) Unsafe or unsound condition.--An unsafe 
                or unsound condition to transact business.
                  (D) Cease-and-desist orders.--Any willful 
                violation of a cease-and-desist order that has 
                become final.
                  (E) Concealment.--Any concealment of the 
                books, papers, records, or assets of the 
                regulated entity, or any refusal to submit the 
                books, papers, records, or affairs of the 
                regulated entity, for inspection to any 
                examiner or to any lawful agent of the 
                Director.
                  (F) Inability to meet obligations.--The 
                regulated entity is likely to be unable to pay 
                its obligations or meet the demands of its 
                creditors in the normal course of business.
                  (G) Losses.--The regulated entity has 
                incurred or is likely to incur losses that will 
                deplete all or substantially all of its 
                capital, and there is no reasonable prospect 
                for the regulated entity to become adequately 
                capitalized (as defined in section 1364(a)(1)).
                  (H) Violations of law.--Any violation of any 
                law or regulation, or any unsafe or unsound 
                practice or condition that is likely to--
                          (i) cause insolvency or substantial 
                        dissipation of assets or earnings; or
                          (ii) weaken the condition of the 
                        regulated entity.
                  (I) Consent.--The regulated entity, by 
                resolution of its board of directors or its 
                shareholders or members, consents to the 
                appointment.
                  (J) Undercapitalization.--The regulated 
                entity is undercapitalized or significantly 
                undercapitalized (as defined in section 
                1364(a)(3) or in regulations issued pursuant to 
                section 1364(b), as applicable), and--
                          (i) has no reasonable prospect of 
                        becoming adequately capitalized;
                          (ii) fails to become adequately 
                        capitalized, as required by--
                                  (I) section 1365(a)(1) with 
                                respect to an undercapitalized 
                                regulated entity; or
                                  (II) section 1366(a)(1) with 
                                respect to a significantly 
                                undercapitalized regulated 
                                entity;
                          (iii) fails to submit a capital 
                        restoration plan acceptable to the 
                        Agency within the time prescribed under 
                        section 1369C; or
                          (iv) materially fails to implement a 
                        capital restoration plan submitted and 
                        accepted under section 1369C.
                  (K) Critical undercapitalization.--The 
                regulated entity is critically 
                undercapitalized, as defined in section 
                1364(a)(4) or in regulations issued pursuant to 
                section 1364(b), as applicable.
                  (L) Money laundering.--The Attorney General 
                notifies the Director in writing that the 
                regulated entity has been found guilty of a 
                criminal offense under section 1956 or 1957 of 
                title 18, United States Code, or section 5322 
                or 5324 of title 31, United States Code.
          (4) Judicial review.--
                  (A) In general.--If the Agency is appointed 
                conservator or receiver under this section, the 
                regulated entity may, within 30 days of such 
                appointment, bring an action in the United 
                States District Court for the judicial district 
                in which the principal place of business of 
                such regulated entity is located, or in the 
                United States District Court for the District 
                of Columbia, for an order requiring the Agency 
                to remove itself as conservator or receiver.
                  (B) Review.--Upon the filing of an action 
                under subparagraph (A), the court shall, upon 
                the merits, dismiss such action or direct the 
                Agency to remove itself as such conservator or 
                receiver.
          (5) Directors not liable for acquiescing in 
        appointment of conservator or receiver.--The members of 
        the board of directors of a regulated entity shall not 
        be liable to the shareholders or creditors of the 
        regulated entity for acquiescing in or consenting in 
        good faith to the appointment of the Agency as 
        conservator or receiver for that regulated entity.
          (6) Agency not subject to any other federal agency.--
        When acting as conservator or receiver, the Agency 
        shall not be subject to the direction or supervision of 
        any other agency of the United States or any State in 
        the exercise of the rights, powers, and privileges of 
        the Agency.
  (b) Powers and Duties of the Agency as Conservator or 
Receiver.--
          (1) Rulemaking authority of the agency.--The Agency 
        may prescribe such regulations as the Agency determines 
        to be appropriate regarding the conduct of 
        conservatorships or receiverships.
          (2) General powers.--
                  (A) Successor to regulated entity.--The 
                Agency shall, as conservator or receiver, and 
                by operation of law, immediately succeed to--
                          (i) all rights, titles, powers, and 
                        privileges of the regulated entity, and 
                        of any stockholder, officer, or 
                        director of such regulated entity with 
                        respect to the regulated entity and the 
                        assets of the regulated entity; and
                          (ii) title to the books, records, and 
                        assets of any other legal custodian of 
                        such regulated entity.
                  (B) Operate the regulated entity.--The Agency 
                may, as conservator or receiver--
                          (i) take over the assets of and 
                        operate the regulated entity with all 
                        the powers of the shareholders, the 
                        directors, and the officers of the 
                        regulated entity and conduct all 
                        business of the regulated entity;
                          (ii) collect all obligations and 
                        money due the regulated entity;
                          (iii) perform all functions of the 
                        regulated entity in the name of the 
                        regulated entity which are consistent 
                        with the appointment as conservator or 
                        receiver; and
                          (iv) preserve and conserve the assets 
                        and property of such regulated entity.
                  (C) Functions of officers, directors, and 
                shareholders of a regulated entity.--The Agency 
                may, by regulation or order, provide for the 
                exercise of any function by any stockholder, 
                director, or officer of any regulated entity 
                for which the Agency has been named conservator 
                or receiver.
                  (D) Powers as conservator.--The Agency may, 
                as conservator, take such action as may be--
                          (i) necessary to put the regulated 
                        entity in a sound and solvent 
                        condition; and
                          (ii) appropriate to carry on the 
                        business of the regulated entity and 
                        preserve and conserve the assets and 
                        property of the regulated entity.
                  (E) Additional powers as receiver.--The 
                Agency may, as receiver, place the regulated 
                entity in liquidation and proceed to realize 
                upon the assets of the regulated entity, having 
                due regard to the conditions of the housing 
                finance market.
                  (F) Organization of new regulated entities.--
                The Agency may, as receiver, organize a 
                successor regulated entity that will operate 
                pursuant to subsection (i).
                  (G) Transfer of assets and liabilities.--The 
                Agency may, as conservator or receiver, 
                transfer any asset or liability of the 
                regulated entity in default without any 
                approval, assignment, or consent with respect 
                to such transfer. Any Federal home loan bank 
                may, with the approval of the Agency, acquire 
                the assets of any Bank in conservatorship or 
                receivership, and assume the liabilities of 
                such Bank
                  (H) Payment of valid obligations.--The 
                Agency, as conservator or receiver, shall, to 
                the extent of proceeds realized from the 
                performance of contracts or sale of the assets 
                of a regulated entity, pay all valid 
                obligations of the regulated entity in 
                accordance with the prescriptions and 
                limitations of this section.
                  (I) Subpoena authority.--
                          (i) In general.--
                                  (I) In general.--The Agency 
                                may, as conservator or 
                                receiver, and for purposes of 
                                carrying out any power, 
                                authority, or duty with respect 
                                to a regulated entity 
                                (including determining any 
                                claim against the regulated 
                                entity and determining and 
                                realizing upon any asset of any 
                                person in the course of 
                                collecting money due the 
                                regulated entity), exercise any 
                                power established under section 
                                1348.
                                  (II) Applicability of law.--
                                The provisions of section 1348 
                                shall apply with respect to the 
                                exercise of any power exercised 
                                under this subparagraph in the 
                                same manner as such provisions 
                                apply under that section.
                          (ii) Authority of director.--A 
                        subpoena or subpoena duces tecum may be 
                        issued under clause (i) only by, or 
                        with the written approval of, the 
                        Director, or the designee of the 
                        Director.
                          (iii) Rule of construction.--This 
                        subsection shall not be construed to 
                        limit any rights that the Agency, in 
                        any capacity, might otherwise have 
                        under section 1317 or 1379D.
                  (J) Contracting for services.--The Agency 
                may, as conservator or receiver, provide by 
                contract for the carrying out of any of its 
                functions, activities, actions, or duties as 
                conservator or receiver.
                  (K) Incidental powers.--The Agency may, as 
                conservator or receiver--
                          (i) exercise all powers and 
                        authorities specifically granted to 
                        conservators or receivers, 
                        respectively, under this section, and 
                        such incidental powers as shall be 
                        necessary to carry out such powers; and
                          (ii) take any action authorized by 
                        this section, which the Agency 
                        determines is in the best interests of 
                        the regulated entity or the Agency.
          (3) Authority of receiver to determine claims.--
                  (A) In general.--The Agency may, as receiver, 
                determine claims in accordance with the 
                requirements of this subsection and any 
                regulations prescribed under paragraph (4).
                  (B) Notice requirements.--The receiver, in 
                any case involving the liquidation or winding 
                up of the affairs of a closed regulated entity, 
                shall--
                          (i) promptly publish a notice to the 
                        creditors of the regulated entity to 
                        present their claims, together with 
                        proof, to the receiver by a date 
                        specified in the notice which shall be 
                        not less than 90 days after the 
                        publication of such notice; and
                          (ii) republish such notice 
                        approximately 1 month and 2 months, 
                        respectively, after the publication 
                        under clause (i).
                  (C) Mailing required.--The receiver shall 
                mail a notice similar to the notice published 
                under subparagraph (B)(i) at the time of such 
                publication to any creditor shown on the books 
                of the regulated entity--
                          (i) at the last address of the 
                        creditor appearing in such books; or
                          (ii) upon discovery of the name and 
                        address of a claimant not appearing on 
                        the books of the regulated entity 
                        within 30 days after the discovery of 
                        such name and address.
          (4) Rulemaking authority relating to determination of 
        claims.--Subject to subsection (c), the Director may 
        prescribe regulations regarding the allowance or 
        disallowance of claims by the receiver and providing 
        for administrative determination of claims and review 
        of such determination.
          (5) Procedures for determination of claims.--
                  (A) Determination period.--
                          (i) In general.--Before the end of 
                        the 180-day period beginning on the 
                        date on which any claim against a 
                        regulated entity is filed with the 
                        Agency as receiver, the Agency shall 
                        determine whether to allow or disallow 
                        the claim and shall notify the claimant 
                        of any determination with respect to 
                        such claim.
                          (ii) Extension of time.--The period 
                        described in clause (i) may be extended 
                        by a written agreement between the 
                        claimant and the Agency.
                          (iii) Mailing of notice sufficient.--
                        The notification requirements of clause 
                        (i) shall be deemed to be satisfied if 
                        the notice of any determination with 
                        respect to any claim is mailed to the 
                        last address of the claimant which 
                        appears--
                                  (I) on the books of the 
                                regulated entity;
                                  (II) in the claim filed by 
                                the claimant; or
                                  (III) in documents submitted 
                                in proof of the claim.
                          (iv) Contents of notice of 
                        disallowance.--If any claim filed under 
                        clause (i) is disallowed, the notice to 
                        the claimant shall contain--
                                  (I) a statement of each 
                                reason for the disallowance; 
                                and
                                  (II) the procedures available 
                                for obtaining agency review of 
                                the determination to disallow 
                                the claim or judicial 
                                determination of the claim.
                  (B) Allowance of proven claim.--The receiver 
                shall allow any claim received on or before the 
                date specified in the notice published under 
                paragraph (3)(B)(i), or the date specified in 
                the notice required under paragraph (3)(C), 
                which is proved to the satisfaction of the 
                receiver.
                  (C) Disallowance of claims filed after end of 
                filing period.--Claims filed after the date 
                specified in the notice published under 
                paragraph (3)(B)(i), or the date specified 
                under paragraph (3)(C), shall be disallowed and 
                such disallowance shall be final.
                  (D) Authority to disallow claims.--
                          (i) In general.--The receiver may 
                        disallow any portion of any claim by a 
                        creditor or claim of security, 
                        preference, or priority which is not 
                        proved to the satisfaction of the 
                        receiver.
                          (ii) Payments to less than fully 
                        secured creditors.--In the case of a 
                        claim of a creditor against a regulated 
                        entity which is secured by any property 
                        or other asset of such regulated 
                        entity, the receiver--
                                  (I) may treat the portion of 
                                such claim which exceeds an 
                                amount equal to the fair market 
                                value of such property or other 
                                asset as an unsecured claim 
                                against the regulated entity; 
                                and
                                  (II) may not make any payment 
                                with respect to such unsecured 
                                portion of the claim other than 
                                in connection with the 
                                disposition of all claims of 
                                unsecured creditors of the 
                                regulated entity.
                          (iii) Exceptions.--No provision of 
                        this paragraph shall apply with respect 
                        to any extension of credit from any 
                        Federal Reserve Bank, Federal home loan 
                        bank, or the Treasury of the United 
                        States.
                  (E) No judicial review of determination 
                pursuant to subparagraph (D).--No court may 
                review the determination of the Agency under 
                subparagraph (D) to disallow a claim. This 
                subparagraph shall not effect the authority of 
                a claimant to obtain de novo judicial review of 
                a claim pursuant to paragraph (6).
                  (F) Legal effect of filing.--
                          (i) Statute of limitation tolled.--
                        For purposes of any applicable statute 
                        of limitations, the filing of a claim 
                        with the receiver shall constitute a 
                        commencement of an action.
                          (ii) No prejudice to other actions.--
                        Subject to paragraph (10), the filing 
                        of a claim with the receiver shall not 
                        prejudice any right of the claimant to 
                        continue any action which was filed 
                        before the date of the appointment of 
                        the receiver, subject to the 
                        determination of claims by the 
                        receiver.
          (6) Provision for judicial determination of claims.--
                  (A) In general.--The claimant may file suit 
                on a claim (or continue an action commenced 
                before the appointment of the receiver) in the 
                district or territorial court of the United 
                States for the district within which the 
                principal place of business of the regulated 
                entity is located or the United States District 
                Court for the District of Columbia (and such 
                court shall have jurisdiction to hear such 
                claim), before the end of the 60-day period 
                beginning on the earlier of--
                          (i) the end of the period described 
                        in paragraph (5)(A)(i) with respect to 
                        any claim against a regulated entity 
                        for which the Agency is receiver; or
                          (ii) the date of any notice of 
                        disallowance of such claim pursuant to 
                        paragraph (5)(A)(i).
                  (B) Statute of limitations.--A claim shall be 
                deemed to be disallowed (other than any portion 
                of such claim which was allowed by the 
                receiver), and such disallowance shall be 
                final, and the claimant shall have no further 
                rights or remedies with respect to such claim, 
                if the claimant fails, before the end of the 
                60-day period described under subparagraph (A), 
                to file suit on such claim (or continue an 
                action commenced before the appointment of the 
                receiver).
          (7) Review of claims.--
                  (A) Other review procedures.--
                          (i) In general.--The Agency shall 
                        establish such alternative dispute 
                        resolution processes as may be 
                        appropriate for the resolution of 
                        claims filed under paragraph (5)(A)(i).
                          (ii) Criteria.--In establishing 
                        alternative dispute resolution 
                        processes, the Agency shall strive for 
                        procedures which are expeditious, fair, 
                        independent, and low cost.
                          (iii) Voluntary binding or nonbinding 
                        procedures.--The Agency may establish 
                        both binding and nonbinding processes, 
                        which may be conducted by any 
                        government or private party. All 
                        parties, including the claimant and the 
                        Agency, must agree to the use of the 
                        process in a particular case.
                  (B) Consideration of incentives.--The Agency 
                shall seek to develop incentives for claimants 
                to participate in the alternative dispute 
                resolution process.
          (8) Expedited determination of claims.--
                  (A) Establishment required.--The Agency shall 
                establish a procedure for expedited relief 
                outside of the routine claims process 
                established under paragraph (5) for claimants 
                who--
                          (i) allege the existence of legally 
                        valid and enforceable or perfected 
                        security interests in assets of any 
                        regulated entity for which the Agency 
                        has been appointed receiver; and
                          (ii) allege that irreparable injury 
                        will occur if the routine claims 
                        procedure is followed.
                  (B) Determination period.--Before the end of 
                the 90-day period beginning on the date any 
                claim is filed in accordance with the 
                procedures established under subparagraph (A), 
                the Director shall--
                          (i) determine--
                                  (I) whether to allow or 
                                disallow such claim; or
                                  (II) whether such claim 
                                should be determined pursuant 
                                to the procedures established 
                                under paragraph (5); and
                          (ii) notify the claimant of the 
                        determination, and if the claim is 
                        disallowed, provide a statement of each 
                        reason for the disallowance and the 
                        procedure for obtaining agency review 
                        or judicial determination.
                  (C) Period for filing or renewing suit.--Any 
                claimant who files a request for expedited 
                relief shall be permitted to file a suit, or to 
                continue a suit filed before the appointment of 
                the receiver, seeking a determination of the 
                rights of the claimant with respect to such 
                security interest after the earlier of--
                          (i) the end of the 90-day period 
                        beginning on the date of the filing of 
                        a request for expedited relief; or
                          (ii) the date the Agency denies the 
                        claim.
                  (D) Statute of limitations.--If an action 
                described under subparagraph (C) is not filed, 
                or the motion to renew a previously filed suit 
                is not made, before the end of the 30-day 
                period beginning on the date on which such 
                action or motion may be filed under 
                subparagraph (B), the claim shall be deemed to 
                be disallowed as of the end of such period 
                (other than any portion of such claim which was 
                allowed by the receiver), such disallowance 
                shall be final, and the claimant shall have no 
                further rights or remedies with respect to such 
                claim.
                  (E) Legal effect of filing.--
                          (i) Statute of limitation tolled.--
                        For purposes of any applicable statute 
                        of limitations, the filing of a claim 
                        with the receiver shall constitute a 
                        commencement of an action.
                          (ii) No prejudice to other actions.--
                        Subject to paragraph (10), the filing 
                        of a claim with the receiver shall not 
                        prejudice any right of the claimant to 
                        continue any action that was filed 
                        before the appointment of the receiver, 
                        subject to the determination of claims 
                        by the receiver.
          (9) Payment of claims.--
                  (A) In general.--The receiver may, in the 
                discretion of the receiver, and to the extent 
                funds are available from the assets of the 
                regulated entity, pay creditor claims, in such 
                manner and amounts as are authorized under this 
                section, which are--
                          (i) allowed by the receiver;
                          (ii) approved by the Agency pursuant 
                        to a final determination pursuant to 
                        paragraph (7) or (8); or
                          (iii) determined by the final 
                        judgment of any court of competent 
                        jurisdiction.
                  (B) Agreements against the interest of the 
                agency.--No agreement that tends to diminish or 
                defeat the interest of the Agency in any asset 
                acquired by the Agency as receiver under this 
                section shall be valid against the Agency 
                unless such agreement is in writing, and 
                executed by an authorized official of the 
                regulated entity, except that such requirements 
                for qualified financial contracts shall be 
                applied in a manner consistent with reasonable 
                business trading practices in the financial 
                contracts market.
                  (C) Payment of dividends on claims.--The 
                receiver may, in the sole discretion of the 
                receiver, pay from the assets of the regulated 
                entity dividends on proved claims at any time, 
                and no liability shall attach to the Agency, by 
                reason of any such payment, for failure to pay 
                dividends to a claimant whose claim is not 
                proved at the time of any such payment.
                  (D) Rulemaking authority of the director.--
                The Director may prescribe such rules, 
                including definitions of terms, as the Director 
                deems appropriate to establish a single uniform 
                interest rate for, or to make payments of post-
                insolvency interest to creditors holding proven 
                claims against the receivership estates of 
                regulated entities following satisfaction by 
                the receiver of the principal amount of all 
                creditor claims.
          (10) Suspension of legal actions.--
                  (A) In general.--After the appointment of a 
                conservator or receiver for a regulated entity, 
                the conservator or receiver may, in any 
                judicial action or proceeding to which such 
                regulated entity is or becomes a party, request 
                a stay for a period not to exceed--
                          (i) 45 days, in the case of any 
                        conservator; and
                          (ii) 90 days, in the case of any 
                        receiver.
                  (B) Grant of stay by all courts required.--
                Upon receipt of a request by any conservator or 
                receiver under subparagraph (A) for a stay of 
                any judicial action or proceeding in any court 
                with jurisdiction of such action or proceeding, 
                the court shall grant such stay as to all 
                parties.
          (11) Additional rights and duties.--
                  (A) Prior final adjudication.--The Agency 
                shall abide by any final unappealable judgment 
                of any court of competent jurisdiction which 
                was rendered before the appointment of the 
                Agency as conservator or receiver.
                  (B) Rights and remedies of conservator or 
                receiver.--In the event of any appealable 
                judgment, the Agency as conservator or receiver 
                shall--
                          (i) have all the rights and remedies 
                        available to the regulated entity 
                        (before the appointment of such 
                        conservator or receiver) and the 
                        Agency, including removal to Federal 
                        court and all appellate rights; and
                          (ii) not be required to post any bond 
                        in order to pursue such remedies.
                  (C) No attachment or execution.--No 
                attachment or execution may issue by any court 
                upon assets in the possession of the receiver.
                  (D) Limitation on judicial review.--Except as 
                otherwise provided in this subsection, no court 
                shall have jurisdiction over--
                          (i) any claim or action for payment 
                        from, or any action seeking a 
                        determination of rights with respect 
                        to, the assets of any regulated entity 
                        for which the Agency has been appointed 
                        receiver; or
                          (ii) any claim relating to any act or 
                        omission of such regulated entity or 
                        the Agency as receiver.
                  (E) Disposition of assets.--In exercising any 
                right, power, privilege, or authority as 
                conservator or receiver in connection with any 
                sale or disposition of assets of a regulated 
                entity for which the Agency has been appointed 
                conservator or receiver, the Agency shall 
                conduct its operations in a manner which 
                maintains stability in the housing finance 
                markets and, to the extent consistent with that 
                goal--
                          (i) maximizes the net present value 
                        return from the sale or disposition of 
                        such assets;
                          (ii) minimizes the amount of any loss 
                        realized in the resolution of cases; 
                        and
                          (iii) ensures adequate competition 
                        and fair and consistent treatment of 
                        offerors.
          (12) Statute of limitations for actions brought by 
        conservator or receiver.--
                  (A) In general.--Notwithstanding any 
                provision of any contract, the applicable 
                statute of limitations with regard to any 
                action brought by the Agency as conservator or 
                receiver shall be--
                          (i) in the case of any contract 
                        claim, the longer of--
                                  (I) the 6-year period 
                                beginning on the date the claim 
                                accrues; or
                                  (II) the period applicable 
                                under State law; and
                          (ii) in the case of any tort claim, 
                        the longer of--
                                  (I) the 3-year period 
                                beginning on the date the claim 
                                accrues; or
                                  (II) the period applicable 
                                under State law.
                  (B) Determination of the date on which a 
                claim accrues.--For purposes of subparagraph 
                (A), the date on which the statute of 
                limitations begins to run on any claim 
                described in such subparagraph shall be the 
                later of--
                          (i) the date of the appointment of 
                        the Agency as conservator or receiver; 
                        or
                          (ii) the date on which the cause of 
                        action accrues.
          (13) Revival of expired state causes of action.--
                  (A) In general.--In the case of any tort 
                claim described under subparagraph (B) for 
                which the statute of limitations applicable 
                under State law with respect to such claim has 
                expired not more than 5 years before the 
                appointment of the Agency as conservator or 
                receiver, the Agency may bring an action as 
                conservator or receiver on such claim without 
                regard to the expiration of the statute of 
                limitation applicable under State law.
                  (B) Claims described.--A tort claim referred 
                to under subparagraph (A) is a claim arising 
                from fraud, intentional misconduct resulting in 
                unjust enrichment, or intentional misconduct 
                resulting in substantial loss to the regulated 
                entity.
          (14) Accounting and recordkeeping requirements.--
                  (A) In general.--The Agency as conservator or 
                receiver shall, consistent with the accounting 
                and reporting practices and procedures 
                established by the Agency, maintain a full 
                accounting of each conservatorship and 
                receivership or other disposition of a 
                regulated entity in default.
                  (B) Annual accounting or report.--With 
                respect to each conservatorship or 
                receivership, the Agency shall make an annual 
                accounting or report available to the Board, 
                the Comptroller General of the United States, 
                the Committee on Banking, Housing, and Urban 
                Affairs of the Senate, and the Committee on 
                Financial Services of the House of 
                Representatives.
                  (C) Availability of reports.--Any report 
                prepared under subparagraph (B) shall be made 
                available by the Agency upon request to any 
                shareholder of a regulated entity or any member 
                of the public.
                  (D) Recordkeeping requirement.--After the end 
                of the 6-year period beginning on the date that 
                the conservatorship or receivership is 
                terminated by the Director, the Agency may 
                destroy any records of such regulated entity 
                which the Agency, in the discretion of the 
                Agency, determines to be unnecessary unless 
                directed not to do so by a court of competent 
                jurisdiction or governmental agency, or 
                prohibited by law.
          (15) Fraudulent transfers.--
                  (A) In general.--The Agency, as conservator 
                or receiver, may avoid a transfer of any 
                interest of a regulated entity-affiliated 
                party, or any person who the conservator or 
                receiver determines is a debtor of the 
                regulated entity, in property, or any 
                obligation incurred by such party or person, 
                that was made within 5 years of the date on 
                which the Agency was appointed conservator or 
                receiver, if such party or person voluntarily 
                or involuntarily made such transfer or incurred 
                such liability with the intent to hinder, 
                delay, or defraud the regulated entity, the 
                Agency, the conservator, or receiver.
                  (B) Right of recovery.--To the extent a 
                transfer is avoided under subparagraph (A), the 
                conservator or receiver may recover, for the 
                benefit of the regulated entity, the property 
                transferred, or, if a court so orders, the 
                value of such property (at the time of such 
                transfer) from--
                          (i) the initial transferee of such 
                        transfer or the regulated entity-
                        affiliated party or person for whose 
                        benefit such transfer was made; or
                          (ii) any immediate or mediate 
                        transferee of any such initial 
                        transferee.
                  (C) Rights of transferee or obligee.--The 
                conservator or receiver may not recover under 
                subparagraph (B) from--
                          (i) any transferee that takes for 
                        value, including satisfaction or 
                        securing of a present or antecedent 
                        debt, in good faith; or
                          (ii) any immediate or mediate good 
                        faith transferee of such transferee.
                  (D) Rights under this paragraph.--The rights 
                under this paragraph of the conservator or 
                receiver described under subparagraph (A) shall 
                be superior to any rights of a trustee or any 
                other party (other than any party which is a 
                Federal agency) under title 11, United States 
                Code.
          (16) Attachment of assets and other injunctive 
        relief.--Subject to paragraph (17), any court of 
        competent jurisdiction may, at the request of the 
        conservator or receiver, issue an order in accordance 
        with Rule 65 of the Federal Rules of Civil Procedure, 
        including an order placing the assets of any person 
        designated by the Agency or such conservator under the 
        control of the court, and appointing a trustee to hold 
        such assets.
          (17) Standards of proof.--Rule 65 of the Federal 
        Rules of Civil Procedure shall apply with respect to 
        any proceeding under paragraph (16) without regard to 
        the requirement of such rule that the applicant show 
        that the injury, loss, or damage is irreparable and 
        immediate.
          (18) Treatment of claims arising from breach of 
        contracts executed by the receiver or conservator.--
                  (A) In general.--Notwithstanding any other 
                provision of this subsection, any final and 
                unappealable judgment for monetary damages 
                entered against a receiver or conservator for 
                the breach of an agreement executed or approved 
                in writing by such receiver or conservator 
                after the date of its appointment, shall be 
                paid as an administrative expense of the 
                receiver or conser