‘(A) DEFAULT- The term ‘default’ means, with respect to a regulated entity, any adjudication or other official determination by any court of competent jurisdiction, or the Agency, pursuant to which a conservator, receiver, limited-life regulated entity, or legal custodian is appointed for a regulated entity.
‘(B) IN DANGER OF DEFAULT- The term ‘in danger of default’ means a regulated entity with respect to which, in the opinion of the Agency--
‘(i) the regulated entity is not likely to be able to pay the obligations of the regulated entity in the normal course of business; or
‘(ii) the regulated entity--
‘(I) has incurred or is likely to incur losses that will deplete all or substantially all of its capital; and
‘(II) there is no reasonable prospect that the capital of the regulated entity will be replenished.’;
(11) by inserting after paragraph (1) the following:
‘(A) the Federal National Mortgage Association Charter Act;
‘(B) the Federal Home Loan Mortgage Corporation Act; and
‘(C) the Federal Home Loan Bank Act.
(12) by inserting after paragraph (10), as redesignated by this section, the following:
‘(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, provided that a member of a Federal Home Loan Bank shall not be deemed to have participated in the affairs of that Bank solely by virtue of being a shareholder of, and obtaining advances from, that Bank;
‘(C) any independent contractor for a regulated entity (including any attorney, appraiser, or accountant), if--
‘(i) the independent contractor knowingly or recklessly participates in--
‘(I) any violation of any law or regulation;
‘(II) any breach of fiduciary duty; or
‘(III) any unsafe or unsound practice; and
(13) by inserting after paragraph (12), as redesignated by this section, the following:
‘(13) LIMITED-LIFE REGULATED ENTITY- The term ‘limited-life regulated entity’ means an entity established by the Agency under section 1367(i) with respect to a Federal Home Loan Bank in default or in danger of default or with respect to an enterprise in default or in danger of default.’; and
(14) by adding at the end the following:
‘(25) VIOLATION- The term ‘violation’ includes any action (alone or in combination with another or others) for or toward causing, bringing about, participating in, counseling, or aiding or abetting a violation.’.
(b) References in This Act- As used in this Act, unless otherwise specified--
(1) the term ‘Agency’ means the Federal Housing Finance Agency;
(2) the term ‘Director’ means the Director of the Agency; and
(3) the terms ‘enterprise’, ‘regulated entity’, and ‘authorizing statutes’ have the same meanings as in section 1303 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended by this Act.
TITLE I--REFORM OF REGULATION OF ENTERPRISES
Subtitle A--Improvement of Safety and Soundness Supervision
SEC. 1101. ESTABLISHMENT OF THE FEDERAL HOUSING FINANCE AGENCY.
The Federal Housing Enterprises Financial Safety and Soundness 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, THE FEDERAL HOME LOAN BANKS, AND THE OFFICE OF FINANCE- The Director shall have general regulatory authority over each regulated entity and the Office of Finance, and shall exercise such general regulatory authority, including such duties and authorities set forth under section 1313, to ensure that the purposes of this Act, the authorizing statutes, and any other applicable law are carried out.
‘SEC. 1312. DIRECTOR.
‘(a) Establishment of Position- There is established the position of the Director of the 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- The Director shall be appointed for a term of 5 years, unless removed before the end of such term for cause by the President.
‘(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), during the period beginning on the effective date of the Federal Housing Finance Regulatory Reform Act of 2008, and ending on the date on which the Director is appointed and confirmed, the person serving as the Director of the Office of Federal Housing Enterprise Oversight of the Department of Housing and Urban Development on that effective date shall act for all purposes as, and with the full powers of, the Director.
‘(1) IN GENERAL- The Agency shall have a Deputy Director of the Division of Enterprise Regulation, who shall be designated 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 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.
‘(1) IN GENERAL- The Agency shall have a Deputy Director of the Division of Federal Home Loan Bank Regulation, who shall be designated 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 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.
‘(1) IN GENERAL- The Agency shall have a Deputy Director for Housing Mission and Goals, who shall be designated 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 Mission and Goals shall have such functions, powers, and duties with respect to the oversight of the housing mission and goals of the enterprises, and with respect to oversight of the housing finance and community and economic development mission of the Federal Home Loan Banks, as the Director shall prescribe.
‘(3) CONSIDERATIONS- In exercising such functions, powers, and duties, the Deputy Director for Housing Mission and Goals shall consider the differences between the enterprises and the Federal Home Loan Banks, including those described in section 1313(d).
‘(1) have any direct or indirect financial interest in any regulated entity or entity-affiliated party;
‘(2) hold any office, position, or employment in any regulated entity or entity-affiliated party; or
‘(3) have served as an executive officer or director of any regulated entity or entity-affiliated party at any time during the 3-year period preceding the date of appointment or designation of such individual as Director or Deputy Director, as applicable.’.
SEC. 1102. DUTIES AND AUTHORITIES OF THE DIRECTOR.
(a) In General- Section 1313 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4513) is amended to read as follows:
‘SEC. 1313. DUTIES AND AUTHORITIES OF DIRECTOR.
‘(a) Duties-
‘(1) PRINCIPAL DUTIES- The principal duties of the Director shall be--
‘(A) to oversee the prudential 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 (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;
‘(iv) each regulated entity carries out its statutory mission only through activities that are authorized under and consistent with this title and the authorizing statutes; and
‘(v) the activities of each regulated entity and the manner in which such regulated entity is operated are consistent with the public interest.
‘(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 a regulated entity; 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.
‘(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 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. 1103. FEDERAL HOUSING FINANCE OVERSIGHT BOARD.
(a) In General- The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is amended by inserting after section 1313 the following:
‘SEC. 1313A. FEDERAL HOUSING FINANCE OVERSIGHT BOARD.
‘(a) In General- There is established the Federal Housing Finance Oversight Board, which shall advise the Director with respect to overall strategies and policies in carrying out the duties of the Director under this title.
‘(b) Limitations- The Board may not exercise any executive authority, and the Director may not delegate to the Board any of the functions, powers, or duties of the Director.
‘(c) Composition- The Board shall be comprised of 4 members, of whom--
‘(1) 1 member shall be the Secretary of the Treasury;
‘(2) 1 member shall be the Secretary of Housing and Urban Development;
‘(3) 1 member shall be the Chairman of the Securities and Exchange Commission; and
‘(4) 1 member shall be the Director, who shall serve as the Chairperson of the Board.
‘(1) IN GENERAL- The Board shall meet upon notice by the Director, but in no event shall the Board meet less frequently than once every 3 months.
‘(2) SPECIAL MEETINGS- Either the Secretary of the Treasury, the Secretary of Housing and Urban Development, or the Chairman of the Securities and Exchange Commission may, upon giving written notice to the Director, require a special meeting of the Board.
‘(1) the safety and soundness of the regulated entities;
‘(2) any material deficiencies in the conduct of the operations of the regulated entities;
‘(3) the overall operational status of the regulated entities;
‘(4) an evaluation of the performance of the regulated entities in carrying out their respective missions;
‘(5) operations, resources, and performance of the Agency; and
‘(6) such other matters relating to the Agency and its fulfillment of its mission, as the Board determines appropriate.’.
(1) by striking ‘enterprise’ each place that term appears and inserting ‘regulated entity’;
(2) by striking ‘enterprises’ each place that term appears and inserting ‘regulated entities’;
(3) in paragraph (3), by striking ‘; and’ and inserting a semicolon;
(4) in paragraph (4), by striking ‘1994.’ and inserting ‘1994; and’; and
(5) by adding at the end the following:
‘(5) the assessment of the Board or any of its members with respect to--
‘(A) the safety and soundness of the regulated entities;
‘(B) any material deficiencies in the conduct of the operations of the regulated entities;
‘(C) the overall operational status of the regulated entities; and
‘(D) an evaluation of the performance of the regulated entities in carrying out their respective missions;
SEC. 1104. AUTHORITY TO REQUIRE REPORTS BY REGULATED ENTITIES.
(a) In General- Section 1314 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4514) is amended--
(1) in the section heading, by striking ‘enterprises’ and inserting ‘regulated entities’;
(2) by striking ‘an enterprise’ each place that term appears and inserting ‘a regulated entity’;
(3) by striking ‘the enterprise’ and inserting ‘the regulated entity’;
(4) in subsection (a)--
(A) by striking the subsection heading and all that follows through ‘and operations’ in paragraph (1) and inserting the following:
‘(1) REGULAR REPORTS- The Director may require, by general or specific orders, a regulated entity to submit regular reports, including financial statements determined on a fair value basis, on the condition (including financial condition), management, activities, or operations of the regulated entity, as the Director considers appropriate’; and
(B) in paragraph (2)--
(i) by inserting ‘, by general or specific orders,’ after ‘may also require’; and
(ii) by striking ‘whenever’ and inserting ‘on any of the topics specified in paragraph (1) or any other relevant topics, if’; and
‘(1) VIOLATIONS- It shall be a violation of this section for any regulated entity--
‘(A) to fail to make, transmit, or publish any report or obtain any information required by the Director under this section, section 309(k) of the Federal National Mortgage Association Charter Act, section 307(c) of the Federal Home Loan Mortgage Corporation Act, or section 20 of the Federal Home Loan Bank Act, within the period of time specified in such provision of law or otherwise by the Director; or
‘(B) to submit or publish any false or misleading report or information under this section.
‘(A) FIRST TIER-
‘(i) IN GENERAL- A violation described in paragraph (1) shall be subject to a penalty of not more than $2,000 for each day during which such violation continues, in any case in which--
‘(I) the subject regulated entity maintains procedures reasonably adapted to avoid any inadvertent error and the violation was unintentional and a result of such an error; or
‘(II) the violation was an inadvertent transmittal or publication of any report which was minimally late.
(b) Conforming Amendment- The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is amended by striking sections 1327 and 1328.
SEC. 1105. EXAMINERS AND ACCOUNTANTS; AUTHORITY TO CONTRACT FOR REVIEWS OF REGULATED ENTITIES; OMBUDSMAN.
(a) In General- Section 1317 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4517) is amended--
(1) in subsection (a), by striking ‘enterprise’ each place that term appears and inserting ‘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’;
(3) in subsection (c), in the second sentence, by inserting before the period ‘to conduct examinations under this section’;
(4) by redesignating subsections (d) through (f) as subsections (e) through (g), respectively; and
(5) by inserting after subsection (c) the following:
‘(d) Inspector General- There shall be within the Agency an Inspector General, who shall be appointed in accordance with section 3(a) of the Inspector General Act of 1978.’.
(b) Direct Hire Authority To Hire Accountants, Economists, and Examiners- Section 1317 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4517) is amended by adding at the end the following:
‘(1) APPLICABILITY- This section shall apply with respect to any position of examiner, accountant, economist, and specialist in financial markets and in technology 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) Amendments to Inspector General Act- Section 11 of the Inspector General Act of 1978 (5 U.S.C. App.) is amended--
(1) in paragraph (1), by inserting ‘; the Director of the Federal Housing Finance Agency’ after ‘Social Security Administration’; and
(2) in paragraph (2), by inserting ‘, the Federal Housing Finance Agency’ after ‘Social Security Administration’.
(d) Authority To Contract for Reviews of Regulated Entities- Section 1319 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4519) is amended--
(1) in the section heading, by striking ‘enterprises by rating organization’ and inserting ‘regulated entities’; and
(2) by striking ‘enterprises’ and inserting ‘regulated entities’.
(e) Office of the Ombudsman- Section 1317 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4517) is amended by adding at the end the following:
‘(i) Ombudsman- The Director shall establish, by regulation, an Office of the Ombudsman within the Agency, which shall be responsible for considering complaints and appeals, from any regulated entity and any person that has a business relationship with a regulated entity, regarding any matter relating to the regulation and supervision of such regulated entity by the Agency. The regulation issued by the Director under this subsection shall specify the authority and duties of the Office of the Ombudsman.’.
SEC. 1106. ASSESSMENTS.
Section 1316 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4516) is amended--
(1) by striking subsection (a) and inserting the following:
‘(1) the expenses of any examinations under section 1317 of this Act and under section 20 of the Federal Home Loan Bank Act;
‘(2) the expenses of obtaining any reviews and credit assessments under section 1319;
‘(3) such amounts in excess of actual expenses for any given year as deemed necessary by the Director to maintain a working capital fund in accordance with subsection (e); and
‘(4) the windup of the affairs of the Office of Federal Housing Enterprise Oversight and the Federal Housing Finance Board under title III of the Federal Housing Finance Regulatory Reform Act of 2008.’;
(2) in subsection (b)--
(A) by realigning the margins of paragraph (2) two ems from the left, so as to align the left margin of such paragraph with the left margins of paragraph (1);
(B) by redesignating paragraphs (2) and (3) as paragraphs (3) and (4), respectively; and
(C) by inserting after paragraph (1) the following:
‘(1) INCREASE FOR INADEQUATE CAPITALIZATION- The semiannual payments made pursuant to subsection (b) by any regulated entity that is not classified (for purposes of subtitle B) as adequately capitalized may be increased, as necessary, in the discretion of the Director to pay additional estimated costs of regulation of the regulated entity.
‘(2) ADJUSTMENT FOR ENFORCEMENT ACTIVITIES- The Director may adjust the amounts of any semiannual payments for an assessment under subsection (a) that are to be paid pursuant to subsection (b) by a regulated entity, as necessary in the discretion of the Director, to ensure that the costs of enforcement activities under this Act for a regulated entity are borne only by such regulated entity.
‘(3) ADDITIONAL ASSESSMENT FOR DEFICIENCIES- If at any time, as a result of increased costs of regulation of a regulated entity that is not classified (for purposes of subtitle B) as adequately capitalized or as the result of supervisory or enforcement activities under this Act for a regulated entity, the amount available from any semiannual payment made by such regulated entity pursuant to subsection (b) is insufficient to cover the costs of the Agency with respect to such entity, the Director may make and collect from such regulated entity an immediate assessment to cover the amount of such deficiency for the semiannual period. If, at the end of any semiannual period during which such an assessment is made, any amount remains from such assessment, such remaining amount shall be deducted from the assessment for such regulated entity for the following semiannual period.’;
(4) in subsection (d), by striking ‘If’ and inserting ‘Except with respect to amounts collected pursuant to subsection (a)(3), if’; and
(5) by striking subsections (e) through (g) and inserting the following:
‘(1) DEPOSIT- Amounts received by the Director from assessments under this section may be deposited by the Director in the manner provided in section 5234 of the Revised Statutes of the United States (12 U.S.C. 192) for monies deposited by the Comptroller of the Currency.
‘(2) NOT GOVERNMENT FUNDS- The amounts received by the Director from any assessment under this section shall not be construed to be Government or public funds or appropriated money.
‘(3) NO APPORTIONMENT OF FUNDS- Notwithstanding any other provision of law, the amounts received by the Director from any assessment under this section shall not be subject to apportionment for the purpose of chapter 15 of title 31, United States Code, or under any other authority.
‘(4) USE OF FUNDS- The Director may use any amounts received by the Director from assessments under this section for compensation of the Director and other employees of the 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 of the Federal Housing Finance Regulatory Reform Act of 2008, and any amounts remaining from assessments on the Federal Home Loan Banks pursuant to section 18(b) of the Federal Home Loan Bank Act (12 U.S.C. 1438(b)), shall, upon such effective date, be treated for purposes of this subsection as amounts received from assessments under this section.
‘(6) TREASURY INVESTMENTS-
‘(A) AUTHORITY- The Director may request the Secretary of the Treasury to invest such portions of amounts received by the Director from assessments paid under this section that, in the Director’s discretion, are not required to meet the current working needs of the Agency.
‘(B) GOVERNMENT OBLIGATIONS- Pursuant to a request under subparagraph (A), the Secretary of the Treasury shall invest such amounts in Government obligations guaranteed as to principal and interest by the United States with maturities suitable to the needs of the Agency and bearing interest at a rate determined by the Secretary of the Treasury taking into consideration current market yields on outstanding marketable obligations of the United States of comparable maturity.
‘(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--
‘(A) assets and liabilities and surplus or deficit;
‘(B) income and expenses; and
‘(C) sources and application of funds.
‘(A) comply substantially with Federal financial management systems requirements and applicable Federal accounting standards; and
‘(B) use a general ledger system that accounts for activity at the transaction level.
‘(1) IN GENERAL- The Comptroller General shall annually audit the financial transactions of the Agency in accordance with the United States generally accepted government auditing standards as may be prescribed by the Comptroller General of the United States. The audit shall be conducted at the place or places where accounts of the Agency are normally kept. The representatives of the Government Accountability Office shall have access to the personnel and to all books, accounts, documents, papers, records (including electronic records), reports, files, and all other papers, automated data, things, or property belonging to or under the control of or used or employed by the Agency pertaining to its financial transactions and necessary to facilitate the audit, and such representatives shall be afforded full facilities for verifying transactions with the balances or securities held by depositories, fiscal agents, and custodians. All such books, accounts, documents, records, reports, files, papers, and property of the Agency shall remain in possession and custody of the Agency. The Comptroller General may obtain and duplicate any such books, accounts, documents, records, working papers, automated data and files, or other information relevant to such audit without cost to the Comptroller General and the Comptroller General’s right of access to such information shall be enforceable pursuant to section 716(c) of title 31, United States Code.
‘(2) REPORT- The Comptroller General shall submit to the Congress a report of each annual audit conducted under this subsection. The report to the Congress shall set forth the scope of the audit and shall include the statement of assets and liabilities and surplus or deficit, the statement of income and expenses, the statement of sources and application of funds, and such comments and information as may be deemed necessary to inform Congress of the financial operations and condition of the Agency, together with such recommendations with respect thereto as the Comptroller General may deem advisable. A copy of each report shall be furnished to the President and to the Agency at the time submitted to the Congress.
‘(3) ASSISTANCE AND COSTS- For the purpose of conducting an audit under this subsection, the Comptroller General may, in the discretion of the Comptroller General, employ by contract, without regard to section 3709 of the Revised Statutes of the United States (41 U.S.C. 5), 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. 1107. REGULATIONS AND ORDERS.
Section 1319G of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4526) is amended--
(1) by striking subsection (a) and inserting the following:
‘(a) Authority- The Director shall issue any regulations, guidelines, or orders necessary to carry out the duties of the Director under this title or the authorizing statutes, and to ensure that the purposes of this title and the authorizing statutes are accomplished.’; and
(2) by striking subsection (c).
SEC. 1108. PRUDENTIAL MANAGEMENT AND OPERATIONS STANDARDS.
The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is amended by inserting after section 1313A, as added by this Act, the following new section:
‘SEC. 1313B. PRUDENTIAL MANAGEMENT AND OPERATIONS STANDARDS.
‘(a) Standards- The Director shall establish standards, by regulation or guideline, 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 interest rate risk exposure;
‘(4) 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;
‘(5) adequacy and maintenance of liquidity and reserves;
‘(6) management of asset and investment portfolio growth;
‘(7) investments and acquisitions of assets by a regulated entity, to ensure that they are consistent with the purposes of this title and the authorizing statutes;
‘(8) 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;
‘(9) 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;
‘(10) 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; and
‘(11) such other operational and management standards as the Director determines to be appropriate.
‘(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).
‘(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.
‘(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.
‘(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.
SEC. 1109. REVIEW OF AND AUTHORITY OVER ENTERPRISE ASSETS AND LIABILITIES.
(a) In General- Subtitle B of the Federal Housing Enterprises Financial Safety and Soundness 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’;
(2) by adding at the end the following new section:
‘SEC. 1369E. REVIEWS OF ENTERPRISE ASSETS AND LIABILITIES.
‘(a) In General- The Director shall, by regulation, establish criteria governing the portfolio holdings of the enterprises, to ensure that the holdings are backed by sufficient capital and consistent with the mission and the safe and sound operations of the enterprises. In establishing such criteria, the Director shall consider the ability of the enterprises to provide a liquid secondary market through securitization activities, the portfolio holdings in relation to the overall mortgage market, and adherence to the standards specified in section 1313B.
‘(b) Temporary Adjustments- The Director may, by order, make temporary adjustments to the established standards for an enterprise or both enterprises, such as during times of economic distress or market disruption.
‘(c) Authority To Require Disposition or Acquisition- The Director shall monitor the portfolio of each enterprise. Pursuant to subsection (a) and notwithstanding the capital classifications of the enterprises, the Director may, by order, require an enterprise, under such terms and conditions as the Director determines to be appropriate, to dispose of or acquire any asset, if the Director determines that such action is consistent with the purposes of this Act or any of the authorizing statutes.’.
(b) Regulations- Not later than the expiration of the 180-day period beginning on the effective date of this Act, the Director shall issue regulations pursuant to section 1369E(a) of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (as added by subsection (a) of this section) establishing the portfolio holdings standards under such section.
SEC. 1110. RISK-BASED CAPITAL REQUIREMENTS.
(a) In General- Section 1361 of the Federal Housing Enterprises Financial Safety and Soundness 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.
(1) by striking subparagraph (A) and inserting the following:
‘(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
SEC. 1111. MINIMUM CAPITAL LEVELS.
Section 1362 of the Federal Housing Enterprises Financial Safety and Soundness 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:
‘(1) IN GENERAL- Notwithstanding subsections (a) and (b) and any minimum capital level established pursuant to subsection (c), the Director may, by order, increase the minimum capital level for a regulated entity on a temporary basis, when the Director determines that such an increase is necessary and consistent with the prudential regulation and the safe and sound operations of a regulated entity.
‘(2) RESCISSION- The Director shall rescind any temporary minimum capital level established under paragraph (1) when the Director determines that the circumstances or facts no longer justify the temporary minimum capital level.
‘(3) REGULATIONS REQUIRED- The Director shall issue regulations establishing--
‘(A) standards for the imposition of a temporary increase in minimum capital under paragraph (1);
‘(B) the standards and procedures that the Director will use to make the determination referred to in paragraph (2); and
‘(C) a reasonable time frame for periodic review of any temporary increase in minimum capital for the purpose of making the determination referred to in paragraph (2).
SEC. 1112. REGISTRATION UNDER THE SECURITIES LAWS.
The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended by adding at the end the following:
‘SEC. 38. FEDERAL NATIONAL MORTGAGE ASSOCIATION, FEDERAL HOME LOAN MORTGAGE CORPORATION, FEDERAL HOME LOAN BANKS.
‘(a) Federal National Mortgage Association and Federal Home Loan Mortgage Corporation- No class of equity securities of the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation shall be treated as an exempted security for purposes of section 12, 13, 14, or 16.
‘(b) Federal Home Loan Banks-
‘(1) REGISTRATION- Each Federal Home Loan Bank shall register a class of its common stock under section 12(g), not later than 120 days after the date of enactment of the Federal Housing Finance Regulatory Reform Act of 2008, and shall thereafter maintain such registration and be treated for purposes of this title as an ‘issuer’, the securities of which are required to be registered under section 12, regardless of the number of members holding such stock at any given time.
‘(2) STANDARDS RELATING TO AUDIT COMMITTEES- Each Federal Home Loan Bank shall comply with the rules issued by the Commission under section 10A(m).
‘(1) FEDERAL HOME LOAN BANK; MEMBER- The terms ‘Federal Home Loan Bank’ and ‘member’, have the same meanings as in section 2 of the Federal Home Loan Bank Act.
‘(2) FEDERAL NATIONAL MORTGAGE ASSOCIATION- The term ‘Federal National Mortgage Association’ means the corporation created by the Federal National Mortgage Association Charter Act.
‘(3) FEDERAL HOME LOAN MORTGAGE CORPORATION- The term ‘Federal Home Loan Mortgage Corporation’ means the corporation created by the Federal Home Loan Mortgage Corporation Act.’.
SEC. 1113. PROHIBITION AND WITHHOLDING OF EXECUTIVE COMPENSATION.
(a) In General- Section 1318 of the Federal Housing Enterprises Financial Safety and Soundness 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) in subsection (a)--
(A) by striking ‘enterprise’ and inserting ‘regulated entity’; and
(B) by striking ‘enterprises’ and inserting ‘regulated entities’;
(3) by redesignating subsection (b) as subsection (d); and
(4) by inserting after subsection (a) the following:
‘(b) Factors- In making any determination under subsection (a), the Director may take into consideration any factors the Director considers relevant, including any wrongdoing on the part of the executive officer, and such wrongdoing shall include any fraudulent act or omission, breach of trust or fiduciary duty, violation of law, rule, regulation, order, or written agreement, and insider abuse with respect to the 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. 1114. LIMIT ON GOLDEN PARACHUTES.
Section 1318 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4518) is amended by adding at the end the following:
‘(1) GOLDEN PARACHUTES AND INDEMNIFICATION PAYMENTS- The Director may prohibit or limit, by regulation or order, any golden parachute payment or indemnification payment.
‘(2) FACTORS TO BE TAKEN INTO ACCOUNT- The Director shall prescribe, by regulation, the factors to be considered by the Director in taking any action pursuant to paragraph (1), which may include such factors as--
‘(A) whether there is a reasonable basis to believe that the affiliated party has committed any fraudulent act or omission, breach of trust or fiduciary duty, or insider abuse with regard to the regulated entity that has had a material effect on the financial condition of the regulated entity;
‘(B) whether there is a reasonable basis to believe that the affiliated party is substantially responsible for the insolvency of the regulated entity, the appointment of a conservator or receiver for the regulated entity, or the troubled condition of the regulated entity (as defined in regulations prescribed by the Director);
‘(C) whether there is a reasonable basis to believe that the affiliated party has materially violated any applicable provision of Federal or State law or regulation that has had a material effect on the financial condition of the regulated entity;
‘(D) whether the affiliated party was in a position of managerial or fiduciary responsibility; and
‘(E) the length of time that the party was affiliated with the regulated entity, and the degree to which--
‘(i) the payment reasonably reflects compensation earned over the period of employment; and
‘(ii) the compensation involved represents a reasonable payment for services rendered.
‘(A) in contemplation of the insolvency of such regulated entity, or after the commission of an act of insolvency; and
‘(B) with a view to, or having the result of--
‘(i) preventing the proper application of the assets of the regulated entity to creditors; or
‘(ii) preferring one creditor over another.
‘(A) IN GENERAL- For purposes of this subsection, the term ‘golden parachute payment’ means any payment (or any agreement to make any payment) in the nature of compensation by any regulated entity for the benefit of any affiliated party pursuant to an obligation of such regulated entity that--
‘(i) is contingent on the termination of such party’s affiliation with the regulated entity; and
‘(ii) is received on or after the date on which--
‘(I) the regulated entity became insolvent;
‘(II) any conservator or receiver is appointed for such regulated entity; or
‘(III) the Director determines that the regulated entity is in a troubled condition (as defined in the regulations of the Director).
‘(i) any payment made pursuant to a retirement plan which is qualified (or is intended to be qualified) under section 401 of the Internal Revenue Code of 1986, or other nondiscriminatory benefit plan;
‘(ii) any payment made pursuant to a bona fide deferred compensation plan or arrangement which the Director determines, by regulation or order, to be permissible; or
‘(iii) any payment made by reason of the death or disability of an affiliated party.
‘(A) INDEMNIFICATION PAYMENT- Subject to paragraph (6), the term ‘indemnification payment’ means any payment (or any agreement to make any payment) by any regulated entity for the benefit of any person who is or was an affiliated party, to pay or reimburse such person for any liability or legal expense with regard to any administrative proceeding or civil action instituted by the Agency which results in a final order under which such person--
‘(i) is assessed a civil money penalty;
‘(ii) is removed or prohibited from participating in conduct of the affairs of the regulated entity; or
‘(iii) is required to take any affirmative action to correct certain conditions resulting from violations or practices, by order of the Director.
‘(i) any legal or other professional expense incurred in connection with any claim, proceeding, or action;
‘(ii) the amount of, and any cost incurred in connection with, any settlement of any claim, proceeding, or action; and
‘(iii) the amount of, and any cost incurred in connection with, any judgment or penalty imposed with respect to any claim, proceeding, or action.
‘(i) any direct or indirect transfer of any funds or any asset; and
‘(ii) any segregation of any funds or assets for the purpose of making, or pursuant to an agreement to make, any payment after the date on which such funds or assets are segregated, without regard to whether the obligation to make such payment is contingent on--
‘(I) the determination, after such date, of the liability for the payment of such amount; or
‘(II) the liquidation, after such date, of the amount of such payment.
SEC. 1115. REPORTING OF FRAUDULENT LOANS.
Part 1 of subtitle C of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4631 et seq.), as amended by this Act, is amended by adding at the end the following:
‘SEC. 1379E. REPORTING OF FRAUDULENT LOANS.
‘(a) 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 the purchase or sale of any loan or financial instrument. The Director shall require each regulated entity to establish and maintain procedures designed to discover any such transactions.
‘(b) Protection From Liability for Reports- Any regulated entity that, in good faith, makes a report pursuant to subsection (a), and any entity-affiliated party, that, in good faith, makes or requires another to make any such report, shall not be liable to any person under any provision of law or regulation, 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 persons identified in the report.’.
SEC. 1116. INCLUSION OF MINORITIES AND WOMEN; DIVERSITY IN AGENCY WORKFORCE.
Section 1319A of the Housing and Community Development Act of 1992 (12 U.S.C. 4520) is amended--
(1) in the section heading, by striking ‘equal opportunity in solicitation of contracts’ and inserting ‘minority and women inclusion; diversity requirements’;
(2) in subsection (a), by striking ‘(a) In General- Each enterprise’ and inserting ‘(e) Outreach- Each regulated entity’; and
(3) by striking subsection (b);
(4) by inserting before subsection (e), as so redesignated by paragraph (2) of this section, the following new subsections:
‘(a) Office of Minority and Women Inclusion- Each regulated entity shall establish an Office of Minority and Women Inclusion, or designate an office of the entity, that shall be responsible for carrying out this section and all matters of the entity relating to diversity in management, employment, and business activities in accordance with such standards and requirements as the Director shall establish.
‘(b) Inclusion in All Levels of Business Activities- Each regulated entity shall develop and implement standards and procedures to ensure, to the maximum extent possible, the inclusion and utilization of minorities (as such term is defined in section 1204(c) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1811 note)) and women, and minority- and women-owned businesses (as such terms are defined in section 21A(r)(4) of the Federal Home Loan Bank Act (12 U.S.C. 1441a(r)(4)) (including financial institutions, investment banking firms, mortgage banking firms, asset management firms, broker-dealers, financial services firms, underwriters, accountants, brokers, investment consultants, and providers of legal services) in all business and activities of the regulated entity at all levels, including in procurement, insurance, and all types of contracts (including contracts for the issuance or guarantee of any debt, equity, or mortgage-related securities, the management of its mortgage and securities portfolios, the making of its equity investments, the purchase, sale and servicing of single- and multi-family mortgage loans, and the implementation of its affordable housing program and initiatives). The processes established by each regulated entity for review and evaluation for contract proposals and to hire service providers shall include a component that gives consideration to the diversity of the applicant.
‘(c) Applicability- This section shall apply to all contracts of a regulated entity for services of any kind, including services that require the services of investment banking, asset management entities, broker-dealers, financial services entities, underwriters, accountants, investment consultants, and providers of legal services.
‘(d) Inclusion in Annual Reports- Each regulated entity shall include, in the annual report submitted by the entity to the Director pursuant to section 309(k) of the Federal National Mortgage Association Charter Act (12 U.S.C. 1723a(k)), section 307(c) of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1456(c)), and section 20 of the Federal Home Loan Bank Act (12 U.S.C. 1440), as applicable, detailed information describing the actions taken by the entity pursuant to this section, which shall include a statement of the total amounts paid by the entity to third party contractors since the last such report and the percentage of such amounts paid to businesses described in subsection (b) of this section.’; and
(5) by adding at the end the following new subsection:
‘(1) heavily recruiting at historically Black colleges and universities, Hispanic-serving institutions, women’s colleges, and colleges that typically serve majority minority populations;
‘(2) sponsoring and recruiting at job fairs in urban communities, and placing employment advertisements in newspapers and magazines oriented toward women and people of color;
‘(3) partnering with organizations that are focused on developing opportunities for minorities and women to place talented young minorities and women in industry internships, summer employment, and full-time positions; and
‘(4) where feasible, partnering with inner-city high schools, girls’ high schools, and high schools with majority minority populations to establish or enhance financial literacy programs and provide mentoring.’.
SEC. 1117. TEMPORARY AUTHORITY FOR PURCHASE OF OBLIGATIONS OF REGULATED ENTITIES BY SECRETARY OF TREASURY.
(a) Fannie Mae- Section 304 of the Federal National Mortgage Association Charter Act (12 U.S.C. 1719) is amended by adding at the end the following new subsection:
‘(1) AUTHORITY TO PURCHASE-
‘(A) GENERAL AUTHORITY- In addition to the authority under subsection (c) of this section, the Secretary of the Treasury is authorized to purchase any obligations and other securities issued by the corporation under any section of this Act, on such terms and conditions as the Secretary may determine and in such amounts as the Secretary may determine. Nothing in this subsection requires the corporation to issue obligations or securities to the Secretary without mutual agreement between the Secretary and the corporation. Nothing in this subsection permits or authorizes the Secretary, without the agreement of the corporation, to engage in open market purchases of the common securities of the corporation.
‘(B) EMERGENCY DETERMINATION REQUIRED- In connection with any use of this authority, the Secretary must determine that such actions are necessary to--
‘(i) provide stability to the financial markets;
‘(ii) prevent disruptions in the availability of mortgage finance; and
‘(iii) protect the taxpayer.
‘(i) The need for preferences or priorities regarding payments to the Government.
‘(ii) Limits on maturity or disposition of obligations or securities to be purchased.
‘(iii) The corporation’s plan for the orderly resumption of private market funding or capital market access.
‘(iv) The probability of the corporation fulfilling the terms of any such obligation or other security, including repayment.
‘(v) The need to maintain the corporation’s status as a private shareholder-owned company.
‘(vi) Restrictions on the use of corporation resources, including limitations on the payment of dividends and executive compensation and any such other terms and conditions as appropriate for those purposes.
‘(A) EXERCISE OF RIGHTS- The Secretary of the Treasury may, at any time, exercise any rights received in connection with such purchases.
‘(B) SALE OF OBLIGATION AND SECURITIES- The Secretary of the Treasury may, at any time, subject to the terms of the security or otherwise upon terms and conditions and at prices determined by the Secretary, sell any obligation or security acquired by the Secretary under this subsection.
‘(C) APPLICATION OF SUNSET TO PURCHASED OBLIGATIONS OR SECURITIES- The authority of the Secretary of the Treasury to hold, exercise any rights received in connection with, or sell, any obligations or securities purchased is not subject to the provisions of paragraph (4).
(b) Freddie Mac- Section 306 of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1455) is amended by adding at the end the following new subsection:
‘(1) AUTHORITY TO PURCHASE-
‘(A) GENERAL AUTHORITY- In addition to the authority under subsection (c) of this section, the Secretary of the Treasury is authorized to purchase any obligations and other securities issued by the Corporation under any section of this Act, on such terms and conditions as the Secretary may determine and in such amounts as the Secretary may determine. Nothing in this subsection requires the Corporation to issue obligations or securities to the Secretary without mutual agreement between the Secretary and the Corporation. Nothing in this subsection permits or authorizes the Secretary, without the agreement of the Corporation, to engage in open market purchases of the common securities of the Corporation.
‘(B) EMERGENCY DETERMINATION REQUIRED- In connection with any use of this authority, the Secretary must determine that such actions are necessary to--
‘(i) provide stability to the financial markets;
‘(ii) prevent disruptions in the availability of mortgage finance; and
‘(iii) protect the taxpayer.
‘(i) The need for preferences or priorities regarding payments to the Government.
‘(ii) Limits on maturity or disposition of obligations or securities to be purchased.
‘(iii) The Corporation’s plan for the orderly resumption of private market funding or capital market access.
‘(iv) The probability of the Corporation fulfilling the terms of any such obligation or other security, including repayment.
‘(v) The need to maintain the Corporation’s status as a private shareholder-owned company.
‘(vi) Restrictions on the use of Corporation resources, including limitations on the payment of dividends and executive compensation and any such other terms and conditions as appropriate for those purposes.
‘(A) EXERCISE OF RIGHTS- The Secretary of the Treasury may, at any time, exercise any rights received in connection with such purchases.
‘(B) SALE OF OBLIGATION AND SECURITIES- The Secretary of the Treasury may, at any time, subject to the terms of the security or otherwise upon terms and conditions and at prices determined by the Secretary, sell any obligation or security acquired by the Secretary under this subsection.
‘(C) APPLICATION OF SUNSET TO PURCHASED OBLIGATIONS OR SECURITIES- The authority of the Secretary of the Treasury to hold, exercise any rights received in connection with, or sell, any obligations or securities purchased is not subject to the provisions of paragraph (4).
(c) Federal Home Loan 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:
‘(1) AUTHORITY TO PURCHASE-
‘(A) GENERAL AUTHORITY- In addition to the authority under subsection (i) of this section, the Secretary of the Treasury is authorized to purchase any obligations issued by any Federal Home Loan Bank under any section of this Act, on such terms and conditions as the Secretary may determine and in such amounts as the Secretary may determine. Nothing in this subsection requires a Federal Home Loan Bank to issue obligations or securities to the Secretary without mutual agreement between the Secretary and the Federal Home Loan Bank. Nothing in this subsection permits or authorizes the Secretary, without the agreement of the Federal Home Loan Bank, to engage in open market purchases of the common securities of any Federal Home Loan Bank.
‘(B) EMERGENCY DETERMINATION REQUIRED- In connection with any use of this authority, the Secretary must determine that such actions are necessary to--
‘(i) provide stability to the financial markets;
‘(ii) prevent disruptions in the availability of mortgage finance; and
‘(iii) protect the taxpayer.
‘(i) The need for preferences or priorities regarding payments to the Government.
‘(ii) Limits on maturity or disposition of obligations or securities to be purchased.
‘(iii) The Federal Home Loan Bank’s plan for the orderly resumption of private market funding or capital market access.
‘(iv) The probability of the Federal Home Loan Bank fulfilling the terms of any such obligation or other security, including repayment.
‘(v) The need to maintain the Federal Home Loan Bank’s status as a private shareholder-owned company.
‘(vi) Restrictions on the use of Federal Home Loan Bank resources, including limitations on the payment of dividends and executive compensation and any such other terms and conditions as appropriate for those purposes.
‘(A) EXERCISE OF RIGHTS- The Secretary of the Treasury may, at any time, exercise any rights received in connection with such purchases.
‘(B) SALE OF OBLIGATIONS- The Secretary of the Treasury may, at any time, subject to the terms of the security or otherwise upon terms and conditions and at prices determined by the Secretary, sell any obligation acquired by the Secretary under this subsection.
‘(C) APPLICATION OF SUNSET TO PURCHASED OBLIGATIONS- The authority of the Secretary of the Treasury to hold, exercise any rights received in connection with, or sell, any obligations purchased is not subject to the provisions of paragraph (4).
SEC. 1118. CONSULTATION BETWEEN THE DIRECTOR OF THE FEDERAL HOUSING FINANCE AGENCY AND THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM TO ENSURE FINANCIAL MARKET STABILITY .
Subsection (a) of section 1313 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4513), as amended by the preceding provisions of this Act, is further amended by adding at the end the following new paragraph:
‘(3) COORDINATION WITH THE CHAIRMAN OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM-
‘(A) CONSULTATION- The Director shall consult with, and consider the views of, the Chairman of the Board of Governors of the Federal Reserve System, with respect to the risks posed by the regulated entities to the financial system, prior to issuing any proposed or final regulations, orders, and guidelines with respect to the exercise of the additional authority provided in this Act regarding prudential management and operations standards, safe and sound operations of, and capital requirements and portfolio standards applicable to the regulated entities (as such term is defined in section 1303). The Director also shall consult with the Chairman regarding any decision to place a regulated entity into conservatorship or receivership.
‘(B) INFORMATION SHARING- To facilitate the consultative process, the Director shall share information with the Board of Governors of the Federal Reserve System on a regular, periodic basis as determined by the Director and the Board regarding the capital, asset and liabilities, financial condition, and risk management practices of the regulated entities as well as any information related to financial market stability.
‘(C) TERMINATION OF CONSULTATION REQUIREMENT- The requirement of the Director to consult with the Board of Governors of the Federal Reserve System under this paragraph shall expire at the conclusion of December 31, 2009.’.
Subtitle B--Improvement of Mission Supervision
SEC. 1121. TRANSFER OF PROGRAM APPROVAL AND HOUSING GOAL OVERSIGHT.
Part 2 of subtitle A of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4541 et seq.) is amended--
(1) by striking the heading for the part and inserting the following:
‘PART 2--ADDITIONAL AUTHORITIES OF THE DIRECTOR’;
(2) by striking sections 1321 and 1322.
SEC. 1122. ASSUMPTION BY THE DIRECTOR OF CERTAIN OTHER HUD RESPONSIBILITIES.
(a) In General- Part 2 of subtitle A of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4541 et seq.) is amended--
(1) by striking ‘Secretary’ each place that term appears and inserting ‘Director’ in each of sections 1323, 1326, 1327, 1328, and 1336; and
(2) by striking sections 1338 and 1349 (12 U.S.C. 4562 note and 4589).
(b) Retention of Fair Housing Responsibilities- Section 1325 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4545) is amended in the matter preceding paragraph (1), by inserting ‘of Housing and Urban Development’ after ‘The Secretary’.
SEC. 1123. REVIEW OF ENTERPRISE PRODUCTS.
Part 2 of subtitle A of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4541 et seq.) is amended by inserting before section 1323 the following:
‘SEC. 1321. PRIOR APPROVAL AUTHORITY FOR PRODUCTS.
‘(a) In General- The Director shall require each enterprise to obtain the approval of the Director for any product of the enterprise before initially offering the product.
‘(b) Standard for Approval- In considering any request for approval of a product pursuant to subsection (a), the Director shall make a determination that--
‘(1) in the case of a product of the Federal National Mortgage Association, the product is authorized under paragraph (2), (3), (4), or (5) of section 302(b) or section 304 of the Federal National Mortgage Association Charter Act (12 U.S.C. 1717(b), 1719);
‘(2) in the case of a product of the Federal Home Loan Mortgage Corporation, the product is authorized under paragraph (1), (4), or (5) of section 305(a) of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a));
‘(3) the product is in the public interest; and
‘(4) the product is consistent with the safety and soundness of the enterprise or the mortgage finance system.
‘(1) SUBMISSION OF REQUEST- An enterprise shall submit to the Director a written request for approval of a product that describes the product in such form as prescribed by order or regulation of the Director.
‘(2) REQUEST FOR PUBLIC COMMENT- Immediately upon receipt of a request for approval of a product, as required under paragraph (1), the Director shall publish notice of such request and of the period for public comment pursuant to paragraph (3) regarding the product, and a description of the product proposed by the request. The Director shall give interested parties the opportunity to respond in writing to the proposed product.
‘(3) PUBLIC COMMENT PERIOD- During the 30-day period beginning on the date of publication pursuant to paragraph (2) of a request for approval of a product, the Director shall receive public comments regarding the proposed product.
‘(4) OFFERING OF PRODUCT-
‘(A) IN GENERAL- Not later than 30 days after the close of the public comment period described in paragraph (3), the Director shall approve or deny the product, specifying the grounds for such decision in writing.
‘(B) FAILURE TO ACT- If the Director fails to act within the 30-day period described in subparagraph (A), then the enterprise may offer the product.
‘(C) TEMPORARY APPROVAL- The Director may, subject to the rules of the Director, provide for temporary approval of the offering of a product without a public comment period, if the Director finds that the existence of exigent circumstances makes such delay contrary to the public interest.
‘(1) IN GENERAL- The requirements of subsections (a) through (d) do not apply with respect to--
‘(A) the automated loan underwriting system of an enterprise in existence as of the date of enactment of the Federal Housing Finance Regulatory Reform Act of 2008, including any upgrade to the technology, operating system, or software to operate the underwriting system;
‘(B) any modification to the mortgage terms and conditions or mortgage underwriting criteria relating to the mortgages that are purchased or guaranteed by an enterprise, provided that such modifications do not alter the underlying transaction so as to include services or financing, other than residential mortgage financing; or
‘(C) any other activity that is substantially similar, as determined by rule of the Director to--
‘(i) the activities described in subparagraphs (A) and (B); and
‘(ii) other activities that have been approved by the Director in accordance with this section.
‘(A) ENTERPRISE NOTICE- For any new activity that an enterprise considers not to be a product, the enterprise shall provide written notice to the Director of such activity, and may not commence such activity until the date of receipt of a notice under subparagraph (B) or the expiration of the period described in subparagraph (C). The Director shall establish, by regulation, the form and content of such written notice.
‘(B) DIRECTOR DETERMINATION- Not later than 15 days after the date of receipt of a notice under subparagraph (A), the Director shall determine whether such activity is a product subject to approval under this section. The Director shall, immediately upon so determining, notify the enterprise.
‘(C) FAILURE TO ACT- If the Director fails to determine whether such activity is a product within the 15-day period described in subparagraph (B), the enterprise may commence the new activity in accordance with subparagraph (A).
‘(1) the safety and soundness authority of the Director over all new and existing products or activities; or
‘(2) the authority of the Director to review all new and existing products or activities to determine that such products or activities are consistent with the statutory mission of an enterprise.’.
SEC. 1124. CONFORMING LOAN LIMITS.
(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 $417,000 for a mortgage secured by a single-family residence, $533,850 for a mortgage secured by a 2-family residence, $645,300 for a mortgage secured by a 3-family residence, and $801,950 for a mortgage secured by a 4-family residence, except that such maximum limitations shall be adjusted effective January 1 of each year beginning after the effective date of the Federal Housing Finance Regulatory Reform Act of 2008, subject to the limitations in this paragraph. Each adjustment shall be made by adding to each such amount (as it may have been previously adjusted) a percentage thereof equal to the percentage increase, during the most recent 12-month or 4-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 Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4541)). If the change in such house price index during the most recent 12-month or 4-quarter period ending before the time of determining such annual adjustment is a decrease, then no adjustment shall be made for the next year, and the next adjustment shall take into account prior declines in the house price index, so that any adjustment shall reflect the net change in the house price index since the last adjustment. Declines in the house price index shall be accumulated and then reduce increases until subsequent increases exceed prior declines.’.
(2) HIGH-COST AREA LIMIT- Section 302(b)(2) of the Federal National Mortgage Association Charter Act (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 115 percent of the median house price for such size residence exceeds the foregoing limitation for such size residence, to the lesser of 150 percent of such limitation for such size residence or the amount that is equal to 115 percent of the median house price in such area for such size residence.’.
(3) EFFECTIVE DATE- The amendments made by paragraphs (1) and (2) of this subsection shall take effect upon the expiration of the date described in section 201(a) of the Economic Stimulus Act of 2008 (Public Law 110-185).
(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 $417,000 for a mortgage secured by a single-family residence, $533,850 for a mortgage secured by a 2-family residence, $645,300 for a mortgage secured by a 3-family residence, and $801,950 for a mortgage secured by a 4-family residence, except that such maximum limitations shall be adjusted effective January 1 of each year beginning after the effective date of the Federal Housing Finance Regulatory Reform Act of 2008, subject to the limitations in this paragraph. Each adjustment shall be made by adding to each such amount (as it may have been previously adjusted) a percentage thereof equal to the percentage increase, during the most recent 12-month or 4-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 Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4541)). If the change in such house price index during the most recent 12-month or 4-quarter period ending before the time of determining such annual adjustment is a decrease, then no adjustment shall be made for the next year, and the next adjustment shall take into account prior declines in the house price index, so that any adjustment shall reflect the net change in the house price index since the last adjustment. Declines in the house price index shall be accumulated and then reduce increases until subsequent increases exceed prior declines.’.
(2) HIGH-COST AREA LIMIT- Section 305(a)(2) of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(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 115 percent of the median house price for such size residence exceeds the foregoing limitation for such size residence, to the lesser of 150 percent of such limitation for such size residence or the amount that is equal to 115 percent of the median house price in such area for such size residence.’.
(3) EFFECTIVE DATE- The amendments made by paragraphs (1) and (2) of this subsection shall take effect upon the expiration of the date described in section 201(a) of the Economic Stimulus Act of 2008 (Public Law 110-185).
(c) Sense of Congress- It is the sense of the Congress that the securitization of mortgages by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation plays an important role in providing liquidity to the United States housing markets. Therefore, the Congress encourages the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation to securitize mortgages acquired under the increased conforming loan limits established under this Act.
(d) Housing Price Index- Part 2 of subtitle A of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4541 et seq.) is amended by inserting after section 1321 (as added by section 1123 of this Act) the following new section:
‘SEC. 1322. HOUSING PRICE INDEX.
‘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 of the Federal Housing Finance Regulatory Reform Act of 2008, 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.’.
SEC. 1125. ANNUAL HOUSING REPORT.
(a) Repeal- Section 1324 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4544) is hereby repealed.
(b) Annual Housing Report- The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 is amended by inserting after section 1323 the following:
‘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 Director shall submit a report, not later than October 30 of each year, to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives, on the activities of each enterprise.
‘(b) Contents- The report required under subsection (a) shall--
‘(1) discuss--
‘(A) the extent to and manner in which--
‘(i) each enterprise is achieving the annual housing goals established under subpart B;
‘(ii) each enterprise is complying with its duty to serve underserved markets, as established under section 1335;
‘(iii) each enterprise is complying with section 1337;
‘(iv) each enterprise received credit towards achieving each of its goals resulting from a transaction or activity pursuant to section 1331(b)(2); and
‘(v) each enterprise is achieving the purposes of the enterprise established by law; and
‘(A) the purchase price of the property that secures the mortgage;
‘(B) the loan-to-value ratio of the mortgage, which shall reflect any secondary liens on the relevant property;
‘(C) the terms of the mortgage;
‘(D) the creditworthiness of the borrower; and
‘(E) any other relevant data, as determined by the Director.
‘(1) IN GENERAL- To assist the Director in analyzing the matters described in subsection (b), 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;
‘(A) is not released in an identifiable form; and
‘(B) is not otherwise obtainable from other publicly available data sets.
SEC. 1126. PUBLIC USE DATABASE.
Section 1323 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (42 U.S.C. 4543) is amended--
(1) in subsection (a)--
(A) by striking ‘(a) In General- The Secretary’ and inserting the following:
‘(1) IN GENERAL- The Director’; and
(B) by adding at the end the following new paragraph:
SEC. 1127. REPORTING OF MORTGAGE DATA.
Section 1326 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4546) is amended--
(1) in subsection (a), by striking ‘The Director’ and inserting ‘Subject to subsection (d), the Director’; and
(2) by adding at the end the following:
‘(1) the same data from the enterprises that is required of insured depository institutions under the Home Mortgage Disclosure Act of 1975; and
‘(2) information collected by the Director under section 1324(b)(6).’.
SEC. 1128. REVISION OF HOUSING GOALS.
(a) Repeal- Sections 1331 through 1334 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4561 through 4564) are hereby repealed.
(b) Housing Goals- The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 is amended by inserting before section 1335 the following:
‘SEC. 1331. ESTABLISHMENT OF HOUSING GOALS.
‘(a) In General- The Director shall, by regulation, establish effective for 2010 and each year thereafter, annual housing goals, with respect to the mortgage purchases by the enterprises, as follows:
‘(1) SINGLE-FAMILY HOUSING GOALS- Four single-family housing goals under section 1332.
‘(2) MULTIFAMILY SPECIAL AFFORDABLE HOUSING GOAL- One multifamily special affordable housing goal under section 1333.
‘(1) IN GENERAL- Upon request by the Director, an enterprise shall provide to the Director, in a form determined by the Director, data the Director may review to determine whether there exist disparities in interest rates charged on mortgages to borrowers who are minorities as compared with comparable mortgages to borrowers of similar creditworthiness who are not minorities.
‘(2) REMEDIAL ACTIONS UPON PRELIMINARY FINDING- Upon a preliminary finding by the Director that a pattern of disparities in interest rates with respect to any lender or lenders exists pursuant to the data provided by an enterprise in paragraph (1), the Director shall
‘(A) refer the preliminary finding to the appropriate regulatory or enforcement agency for further review; and
‘(B) require the enterprise to submit additional data with respect to any lender or lenders, as appropriate and to the extent practicable, to the Director who shall submit any such additional data to the regulatory or enforcement agency for appropriate action.
‘SEC. 1332. SINGLE-FAMILY HOUSING GOALS.
‘(a) In General- The Director shall, by regulation, establish annual goals for the purchase by each enterprise of the following types of mortgages for the following categories of families:
‘(1) PURCHASE-MONEY MORTGAGES- A goal for purchase of conventional, conforming, single-family, purchase money mortgages financing owner-occupied housing for each of the following categories of families:
‘(A) Low-income families.
‘(B) Families that reside in low-income areas.
‘(C) Very low-income families.
‘(1) IN GENERAL- The Director shall determine, for each year that the housing goals under this section are in effect pursuant to section 1331(a), whether each enterprise has complied with each such goal established under subsection (a) of this section and any additional requirements which may be established under subsection (c) of this section.
‘(2) PURCHASE-MONEY MORTGAGE GOALS- An enterprise shall be considered to be in compliance with a housing goal under subparagraph (A), (B), or (C) of subsection (a)(1) for a year only if, for the type of family described in such subparagraph, the percentage of the number of conventional, conforming, single-family, owner-occupied, purchase money mortgages purchased by the enterprise in such year that serve such families, meets or exceeds the target for the year for such type of family that is established under subsection (e).
‘(3) REFINANCE GOAL- An enterprise shall be considered to be in compliance with the refinance goal under subsection (a)(2) for a year only if the percentage of the number of conventional, conforming, single-family, owner-occupied refinance mortgages purchased by the enterprise in such year that serve low-income families meets or exceeds the target for the year that is established under subsection (e).
‘(1) IN GENERAL- The Director shall, by regulation, establish annual targets for each goal and subgoal under this section, provided that the Director shall not set prospective targets longer than three years. In establishing such targets, the Director shall not consider segments of the market determined to be unacceptable or contrary to good lending practices, inconsistent with safety and soundness, or unauthorized for purchase by the enterprises.
‘(2) GOALS TARGETS-
‘(A) CALCULATION- The Director shall calculate, for each of the types of families described in subsection (a), the percentage, for each of the three years that most recently precede such year and for which information under the Home Mortgage Disclosure Act of 1975 is publicly available--
‘(i) of the number of conventional, conforming, single-family, owner-occupied purchase money mortgages originated in such year that serve such type of family, or
‘(ii) the number of conventional, conforming, single-family, owner-occupied refinance mortgages originated in such year that serve low-income families,
‘(i) National housing needs.
‘(ii) Economic, housing, and demographic conditions, including expected market developments.
‘(iii) The performance and effort of the enterprises toward achieving the housing goals under this section in previous years.
‘(iv) The ability of the enterprise to lead the industry in making mortgage credit available.
‘(v) Such other reliable mortgage data as may be available.
‘(vi) The size of the purchase money conventional mortgage market, or refinance conventional mortgage market, as applicable, serving each of the types of families described in subsection (a), relative to the size of the overall purchase money mortgage market or the overall refinance mortgage market, respectively.
‘(vii) The need to maintain the sound financial condition of the enterprises.
‘(1) NOTICE- Within 30 days of making a determination under subsection (d) regarding compliance of an enterprise for a year with a housing goal established under this section and before any public disclosure thereof, the Director shall provide notice of the determination to the enterprise, which shall include an analysis and comparison, by the Director, of the performance of the enterprise for the year and the targets for the year under subsection (e).
‘(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.
‘SEC. 1333. MULTIFAMILY SPECIAL AFFORDABLE HOUSING GOAL.
‘(a) Establishment of Goal-
‘(1) IN GENERAL- The Director shall, by regulation, establish a single annual goal, by either unit or dollar volume, of purchases by each enterprise of mortgages on multifamily housing that finance dwelling units affordable to low-income families.
‘(2) ADDITIONAL REQUIREMENTS FOR UNITS AFFORDABLE TO VERY LOW-INCOME FAMILIES- When establishing the goal under this section, the Director shall establish additional requirements for the purchase by each enterprise of mortgages on multifamily housing that finance dwelling units affordable to very low-income families.
‘(3) REPORTING ON SMALLER PROPERTIES- The Director shall require each enterprise to report on the purchase by each enterprise of multifamily housing of a smaller or limited size that is affordable to low-income families, which may be based on multifamily projects of 5 to 50 units (as such numbers may be adjusted by the Director) or on mortgages of up to $5,000,000 (as such amount may be adjusted by the Director), and may, by regulation, establish such aditional requirements related to such units.
‘(4) FACTORS- In establishing the goal and additional requirements under this section, the Director shall not consider segments of the market determined to be inconsistent with safety and soundness or unauthorized for purchase by the enterprises, and shall take into consideration--
‘(A) national multifamily mortgage credit needs and the ability of the enterprise to provide additional liquidity and stability for the multifamily mortgage market;
‘(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 for housing affordable to low-income and very low-income families, including the size of the multifamily markets for housing of a smaller or limited size;
‘(D) the ability of the enterprise to lead the market in making multifamily mortgage credit available, especially for multifamily housing described in paragraphs (1) and (2);
‘(E) the availability of public subsidies; and
‘(F) the need to maintain the sound financial condition of the enterprise.
‘(1) are secured by a guarantee of the enterprise; or
‘(2) are purchased by the enterprise, except that the Director may give less than full credit for purchases of investment grade bonds, to the extent that such purchases do not provide a new market or add liquidity to an existing market.
‘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 or subgoal for such year established pursuant to this subpart.
‘(b) Standard for Reduction- The Director may reduce the level for a goal or subgoal 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 or subgoal 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(b)(3) of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1451 note), as applicable.
(1) in section 1335(a) (12 U.S.C. 4565(a)), in the matter preceding paragraph (1), by striking ‘low- and moderate-income housing goal’ and all that follows through ‘section 1334’ and inserting ‘housing goals established under this subpart’; and
(2) in section 1336(a)(1) (12 U.S.C. 4566(a)(1)), by striking ‘sections 1332, 1333, and 1334,’ and inserting ‘this subpart’.
(d) Definitions- Section 1303 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4502) is amended--
(1) by striking paragraph (24), as so designated by section 1002 of this Act, and inserting the following:
‘(A) IN GENERAL- The term ‘very low-income’ means--
‘(i) in the case of owner-occupied units, families having incomes not greater than 50 percent of the area median income; and
‘(ii) in the case of rental units, families having incomes not greater than 50 percent of the area median income, with adjustments for smaller and larger families, as determined by the Director.
‘(i) in the case of owner-occupied units, income in excess of 30 percent but not greater than 50 percent of the area median income; and
‘(ii) in the case of rental units, income in excess of 30 percent but not greater than 50 percent of the area median income, with adjustments for smaller and larger families, as determined by the Director.’; and
(2) by adding at the end the following:
‘(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.
‘(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 Director.
‘(A) IN GENERAL- The term ‘shortage of standard rental units both affordable and available to extremely low-income renter households’ means the gap between--
‘(i) the number of units with complete plumbing and kitchen facilities with a rent that is 30 percent or less of 30 percent of the adjusted area median income as determined by the Director that are occupied by extremely low-income renter households or are vacant for rent; and
‘(ii) the number of extremely low-income renter households.
‘(A) IN GENERAL- The term ‘shortage of standard rental units both affordable and available to very low-income renter households’ means the gap between--
‘(i) the number of units with complete plumbing and kitchen facilities with a rent that is 30 percent or less of 50 percent of the adjusted area median income as determined by the Director that are occupied by either extremely low- or very low-income renter households or are vacant for rent; and
‘(ii) the number of extremely low- and very low-income renter households.
SEC. 1129. DUTY TO SERVE UNDERSERVED MARKETS.
(a) Establishment and Evaluation of Performance- Section 1335 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4565) is amended--
(1) in the section heading, by inserting ‘duty to serve underserved markets and’ before ‘other’;
(2) by striking subsection (b);
(3) in subsection (a)--
(A) 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:
‘(1) DUTY- To increase the liquidity of mortgage investments and improve the distribution of investment capital available for mortgage financing for underserved markets, each enterprise shall provide leadership to the market in developing loan products and flexible underwriting guidelines to facilitate a secondary market for mortgages for very low-, low-, and moderate-income families with respect to the following underserved markets:
‘(A) MANUFACTURED HOUSING- The enterprise shall develop 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 develop loan products and flexible underwriting guidelines to facilitate a secondary market to preserve housing affordable to very low-, low-, and moderate-income families, including housing projects subsidized under
‘(i) the project-based and tenant-based rental assistance programs under section 8 of the United States Housing Act of 1937;
‘(ii) the program under section 236 of the National Housing Act;
‘(iii) the below-market interest rate mortgage program under section 221(d)(4) of the National Housing Act;
‘(iv) the supportive housing for the elderly program under section 202 of the Housing Act of 1959;
‘(v) the supportive housing program for persons with disabilities under section 811 of the Cranston-Gonzalez National Affordable Housing Act;
‘(vi) the programs under title IV of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11361 et seq.), but only permanent supportive housing projects subsidized under such programs;
‘(vii) the rural rental housing program under section 515 of the Housing Act of 1949;
‘(viii) the low-income housing tax credit under section 42 of the Internal Revenue Code of 1986; and
‘(ix) comparable state and local affordable housing programs.
‘(1) IN GENERAL- The Director shall, by regulation, establish effective for 2010 and thereafter 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 2010 and each year thereafter, 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, more flexible underwriting guidelines, and other innovative approaches to providing financing to each of such underserved markets;
‘(B) the extent of outreach to qualified loan sellers and other market participants in each of such underserved markets;
‘(C) the volume of loans purchased in each of such underserved markets relative to the market opportunities available to the enterprise, except that the Director shall not establish specific quantitative targets nor evaluate the enterprises based solely on the volume of loans purchased; and
‘(D) the amount of investments and grants in projects which assist in meeting the needs of such underserved markets.
(1) in paragraph (1), by inserting ‘and with the duty under section 1335(a) of each enterprise with respect to underserved markets,’ before ‘as provided in this section’; and
(2) by adding at the end of such subsection, as amended by the preceding provisions of this title, the following new paragraph:
‘(4) ENFORCEMENT OF DUTY TO PROVIDE MORTGAGE CREDIT TO UNDERSERVED MARKETS- The duty under section 1335(a) of each enterprise to serve underserved markets (as determined in accordance with section 1335(c)) shall be enforceable under this section to the same extent and under the same provisions that the housing goals established under this subpart are enforceable. Such duty shall be enforceable only under this section, except that such duty shall not be subject to subsection (c)(7) of this section and shall not be enforceable under any other provision of this title (including subpart C of this part) or under any provision of the Federal National Mortgage Association Charter Act or the Federal Home Loan Mortgage Corporation Act.’.
(1) in paragraph (2), by inserting ‘, except as provided in paragraph (5),’ after ‘which’; and
(2) by adding at the end the following new paragraph:
‘(5) ADDITIONAL CREDIT- The Director may assign additional credit toward achievement, under this section, of the housing goals for mortgage purchase activities of the enterprises that comply with the requirements of such goals and support housing that includes a licensed childcare center. The availability of additional credit under this paragraph shall not be used to increase any housing goal, subgoal, or target established under this subpart.’.
SEC. 1130. MONITORING AND ENFORCING COMPLIANCE WITH HOUSING GOALS.
(a) In General- Section 1336 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4566) is amended by striking subsections (b) and (c) and inserting the following:
‘(1) NOTICE- If the Director preliminarily determines that an enterprise has failed, or that there is a substantial probability that an enterprise will fail, to meet any housing goal under this subpart, the Director shall provide written notice to the enterprise of such a preliminary determination, the reasons for such determination, and the information on which the Director based the determination.
‘(2) RESPONSE PERIOD-
‘(A) IN GENERAL- During the 30-day period beginning on the date on which an enterprise is provided notice under paragraph (1), the enterprise may submit to the Director any written information that the enterprise considers appropriate for consideration by the Director in finally determining whether such failure has occurred or whether the achievement of such goal was or is feasible.
‘(B) EXTENDED PERIOD- The Director may extend the period under subparagraph (A) for good cause for not more than 30 additional days.
‘(C) SHORTENED PERIOD- The Director may shorten the period under subparagraph (A) for good cause.
‘(D) FAILURE TO RESPOND- The failure of an enterprise to provide information during the 30-day period under this paragraph (as extended or shortened) shall waive any right of the enterprise to comment on the proposed determination or action of the Director.
‘(A) IN GENERAL- After the expiration of the response period under paragraph (2), or upon receipt of information provided during such period by the enterprise, whichever occurs earlier, the Director shall issue a final determination on--
‘(i) whether the enterprise has failed, or there is a substantial probability that the enterprise will fail, to meet the housing goal; and
‘(ii) whether (taking into consideration market and economic conditions and the financial condition of the enterprise) the achievement of the housing goal was or is feasible.
‘(i) each final determination under this paragraph that an enterprise has failed, or that there is a substantial probability that the enterprise will fail, to meet a housing goal;
‘(ii) each final determination that the achievement of a housing goal was or is feasible; and
‘(iii) the reasons for each such final determination.
‘(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, or fails to comply with the plan, the Director may issue a cease and desist order in accordance with section 1341 and impose civil money penalties in accordance with section 1345.
‘(2) HOUSING PLAN- If the Director requires a housing plan under this subsection, such a plan shall be--
‘(A) a feasible plan describing the specific actions the enterprise will take--
‘(i) to achieve the goal for the next calendar year; and
‘(ii) if the Director determines that there is a substantial probability that the enterprise will fail to meet a goal in the current year, to make such improvements and changes in its operations as are reasonable in the remainder of such year; and
(b) Conforming Amendment- The heading for subpart C of part 2 of subtitle A of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 is amended to read as follows:
‘Subpart C--Enforcement’.
(c) Cease and Desist Proceedings -
(1) REPEAL- Section 1341 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4581) is hereby repealed.
(2) CEASE AND DESIST PROCEEDINGS- The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 is amended by inserting before section 1342 the following:
‘SEC. 1341. CEASE AND DESIST PROCEEDINGS.
‘(a) Grounds for Issuance- The Director may issue and serve a notice of charges under this section upon an enterprise if the Director determines that--
‘(1) the enterprise has failed to submit a report under section 1327, following a notice of such failure, an opportunity for comment by the enterprise, and a final determination by the Director;
‘(2) 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;
‘(3) solely with respect to the housing goals established under sections 1332(a) and 1333(a)(1), the enterprise has failed to submit a housing plan that complies with section 1336(c) within the applicable period; or
‘(4) solely with respect to the housing goals established under sections 1332(a) and 1333(a)(1), the enterprise has failed to comply with a housing plan under section 1336(c).
‘(1) NOTICE OF CHARGES- Each notice of charges issued under this section shall contain a statement of the facts constituting the alleged conduct and shall fix a time and place at which a hearing will be held to determine on the record whether an order to cease and desist from such conduct should issue.
‘(2) ISSUANCE OF ORDER- If the Director finds on the record made at a hearing described in paragraph (1) that any conduct specified in the notice of charges has been established (or the enterprise consents pursuant to section 1342(a)(4)), the Director may issue and serve upon the enterprise an order requiring the enterprise to--
‘(A) submit a report under section 1327;
‘(B) solely with respect to the housing goals established under sections 1332(a) and 1333(a)(1), submit a housing plan in compliance with section 1336(c);
‘(C) solely with respect to the housing goals established under sections 1332(a) and 1333(a)(1), comply with the housing plan in compliance with section 1336(c); or
‘(D) 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.
(1) REPEAL- Section 1345 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4585) is hereby repealed.
(2) CIVIL MONEY PENALTIES- The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 is amended by inserting after section 1344 the following:
‘SEC. 1345. CIVIL MONEY PENALTIES.
‘(a) Authority- The Director may impose a civil money penalty, in accordance with the provisions of this section, on any enterprise that has failed to--
‘(1) submit a report under section 1327, following a notice of such failure, an opportunity for comment by the enterprise, and a final determination by the Director;
‘(2) 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;
‘(3) solely with respect to the housing goals established under sections 1332(a) and 1333(a)(1), submit a housing plan or perform its responsibilities under a remedial order issued pursuant to section 1336(c) within the required period; or
‘(4) solely with respect to the housing goals established under sections 1332(a) and 1333(a)(1), comply with a housing plan for the enterprise under section 1336(c).
‘(1) for any failure described in paragraph (1), (5), or (6) of subsection (a), $100,000 for each day that the failure occurs; and
‘(2) for any failure described in paragraph (2), (3), or (4) of subsection (a), $50,000 for each day that the failure occurs.
‘(1) ESTABLISHMENT- The Director shall establish standards and procedures governing the imposition of civil money penalties under this section. Such standards and procedures--
‘(A) shall provide for the Director to notify the enterprise in writing of the determination of the Director to impose the penalty, which shall be made on the record;
‘(B) shall provide for the imposition of a penalty only after the enterprise has been given an opportunity for a hearing on the record pursuant to section 1342; and
‘(C) may provide for review by the Director of any determination or order, or interlocutory ruling, arising from a hearing.
‘(A) the gravity of the offense;
‘(B) any history of prior offenses;
‘(C) ability to pay the penalty;
‘(D) injury to the public;
‘(E) benefits received;
‘(F) deterrence of future violations;
‘(G) the length of time that the enterprise should reasonably take to achieve the goal; and
‘(H) such other factors as the Director may determine, by regulation, to be appropriate.
(1) AUTHORITY TO BRING A CIVIL ACTION- Section 1344(a) of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4584) is amended by striking ‘The Secretary may request the Attorney General of the United States to bring a civil action’ and inserting ‘The Director may bring a civil action’.
(2) SUBPOENA ENFORCEMENT- Section 1348(c) of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4588(c)) is amended by inserting ‘may bring an action or’ before ‘may request’.
(3) CONFORMING AMENDMENTS- Subpart C of part 2 of subtitle A of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4581 et seq.) is amended by striking ‘Secretary’ each place that term appears and inserting ‘Director’ in each of--
(A) section 1342 (12 U.S.C. 4582);
(B) section 1343 (12 U.S.C. 4583);
(C) section 1346 (12 U.S.C. 4586);
(D) section 1347 (12 U.S.C. 4587); and
(E) section 1348 (12 U.S.C. 4588).
SEC. 1131. AFFORDABLE HOUSING PROGRAMS.
(a) Repeal- Section 1337 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4567) is hereby repealed.
(b) Annual Housing Report- The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 1301 et seq.) is amended by inserting after section 1336 the following:
‘SEC. 1337. AFFORDABLE HOUSING ALLOCATIONS.
‘(a) Set Aside and Allocation of Amounts by Enterprises- Subject to subsection (b), in each fiscal year--
‘(1) the Federal Home Loan Mortgage Corporation shall--
‘(A) set aside an amount equal to 4.2 basis points for each dollar of the unpaid principal balance of its total new business purchases; and
‘(B) allocate or otherwise transfer--
‘(i) 65 percent of such amounts to the Secretary of Housing and Urban Development to fund the Housing Trust Fund established under section 1338; and
‘(ii) 35 percent of such amounts to fund the Capital Magnet Fund established pursuant to section 1339; and
‘(A) set aside an amount equal to 4.2 basis points for each dollar of unpaid principal balance of its total new business purchases; and
‘(B) allocate or otherwise transfer--
‘(i) 65 percent of such amounts to the Secretary of Housing and Urban Development to fund the Housing Trust Fund established under section 1338; and
‘(ii) 35 percent of such amounts to fund the Capital Magnet Fund established pursuant to section 1339.
‘(1) are contributing, or would contribute, to the financial instability of the enterprise;
‘(2) are causing, or would cause, the enterprise to be classified as undercapitalized; or
‘(3) are preventing, or would prevent, the enterprise from successfully completing a capital restoration plan under section 1369C.
‘SEC. 1338. HOUSING TRUST FUND.
‘(a) Establishment and Purpose-
‘(1) IN GENERAL- The Secretary of Housing and Urban Development (in this section referred to as the ‘Secretary’) shall establish and manage a Housing Trust Fund, which shall be funded with amounts allocated by the enterprises under section 1337 and any amounts as are or may be appropriated, transferred, or credited to such Housing Trust Fund under any other provisions of law. The purpose of the Housing Trust Fund under this section is to provide grants to States (as such term is defined in section 1303) for use--
‘(A) to increase and preserve the supply of rental housing for extremely low- and very low-income families, including homeless families; and
‘(B) to increase homeownership for extremely low- and very low-income families.
‘(1) IN GENERAL- Notwithstanding subsection (c), to help address the mortgage crisis, of the amounts allocated pursuant to clauses (i) and (ii) of section 1337(a)(1)(B) and clauses (i) and (ii) of section 1337(a)(2)(B) in excess of amounts described in section 1337(e)--
‘(A) 100 percent of such excess shall be used to reimburse the Treasury for payments made pursuant to section 257(w)(1)(C) of the National Housing Act in calendar year 2009;
‘(B) 50 percent of such excess shall be used to reimburse the Treasury for such payments in calendar year 2010; and
‘(C) 25 percent of such excess shall be used to reimburse the Treasury for such payments in calendar year 2011.
‘(1) IN GENERAL- Except as provided in subsection (b), the Secretary shall distribute the amounts allocated for the Housing Trust Fund under this section to provide affordable housing as described in this subsection.
‘(2) PERMISSIBLE DESIGNEES- A State receiving grant amounts under this subsection may designate a State housing finance agency, housing and community development entity, tribally designated housing entity (as such term is defined in section 4 of the Native American Housing Assistance and Self-Determination Act of 1997 (25 U.S.C. 4103)), or any other qualified instrumentality of the State to receive such grant amounts.
‘(3) DISTRIBUTION TO STATES BY NEEDS-BASED FORMULA-
‘(A) IN GENERAL- The Secretary shall, by regulation, establish a formula within 12 months of the date of enactment of the Federal Housing Finance Regulatory Reform Act of 2008, to distribute amounts made available under this subsection to each State to provide affordable housing to extremely low- and very low-income households.
‘(B) BASIS FOR FORMULA- The formula required under subparagraph (A) shall include the following:
‘(i) The ratio of the shortage of standard rental units both affordable and available to extremely low-income renter households in the State to the aggregate shortage of standard rental units both affordable and available to extremely low-income renter households in all the States.
‘(ii) The ratio of the shortage of standard rental units both affordable and available to very low-income renter households in the State to the aggregate shortage of standard rental units both affordable and available to very low-income renter households in all the States.
‘(iii) The ratio of extremely low-income renter households in the State living with either (I) incomplete kitchen or plumbing facilities, (II) more than 1 person per room, or (III) paying more than 50 percent of income for housing costs, to the aggregate number of extremely low-income renter households living with either (IV) incomplete kitchen or plumbing facilities, (V) more than 1 person per room, or (VI) paying more than 50 percent of income for housing costs in all the States.
‘(iv) The ratio of very low-income renter households in the State paying more than 50 percent of income on rent relative to the aggregate number of very low-income renter households paying more than 50 percent of income on rent in all the States.
‘(v) The resulting sum calculated from the factors described in clauses (i) through (iv) shall be multiplied by the relative cost of construction in the State. For purposes of this subclause, the term ‘cost of construction’--
‘(I) means the cost of construction or building rehabilitation in the State relative to the national cost of construction or building rehabilitation; and
‘(II) shall be calculated such that values higher than 1.0 indicate that the State’s construction costs are higher than the national average, a value of 1.0 indicates that the State’s construction costs are exactly the same as the national average, and values lower than 1.0 indicate that the State’s cost of construction are lower than the national average.
‘(A) NOTICE- Not later than 60 days after the date that the Secretary determines the formula amounts described in paragraph (3), the Secretary shall caused to be published in the Federal Register a notice that such amounts shall be so available.
‘(B) GRANT AMOUNT- In each fiscal year other than fiscal year 2009, the Secretary shall make a grant to each State in an amount that is equal to the formula amount determined under paragraph (3) for that State.
‘(C) MINIMUM STATE ALLOCATIONS- If the formula amount determined under paragraph (3) for a fiscal year would allocate less than $3,000,000 to any of the 50 States of the United States or the District of Columbia, the allocation for such State of the United States or the District of Columbia shall be $3,000,000, and the increase shall be deducted pro rata from the allocations made to all other of the States (as such term is defined in section 1303).
‘(A) IN GENERAL- For each year that a State or State designated entity receives a grant under this subsection, the State or State designated entity shall establish an allocation plan. Such plan shall--
‘(i) set forth a plan for the distribution of grant amounts received by the State or State designated entity for such year;
‘(ii) be based on priority housing needs, as determined by the State or State designated entity in accordance with the regulations established under subsection (g)(2)(D);
‘(iii) comply with paragraph (6); and
‘(iv) include performance goals that comply with the requirements established by the Secretary pursuant to subsection (g)(2).
‘(i) notify the public of the establishment of the plan;
‘(ii) provide an opportunity for public comments regarding the plan;
‘(iii) consider any public comments received regarding the plan; and
‘(iv) make the completed plan available to the public.
‘(i) a description of the eligible activities to be conducted using such assistance; and
‘(ii) a certification by the eligible recipient applying for such assistance that any housing units assisted with such assistance will comply with the requirements under this section.
‘(A) are eligible under paragraph (7) for such use;
‘(B) comply with the applicable allocation plan of the State or State designated entity under paragraph (5); and
‘(C) are selected for funding by the State or State designated entity in accordance with the process and criteria for such selection established pursuant to subsection (g)(2)(D).
‘(A) the production, preservation, and rehabilitation of rental housing, including housing under the programs identified in section 1335(a)(2)(B) and for operating costs, except that not less than 75 percent of such grant amounts shall be used for the benefit only of extremely low-income families or families with incomes at or below the poverty line (as such term is defined in section 673 of the Omnibus Budget Reconciliation Act of 1981 (42 U.S.C. 9902), including any revision required by such section) applicable to a family of the size involved, and not more than 25 percent for the benefit only of very low-income families; and
‘(B) the production, preservation, and rehabilitation of housing for homeownership, including such forms as down payment assistance, closing cost assistance, and assistance for interest rate buy-downs, that--
‘(i) 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 subsection be considered to refer to assistance from affordable housing fund grant amounts;
‘(A) laws relating to tenant protections and tenant rights to participate in decision making regarding their residences;
‘(B) laws requiring public participation, including laws relating to Consolidated Plans, Qualified Allocation Plans, and Public Housing Agency Plans; and
‘(C) fair housing laws and laws regarding accessibility in federally assisted housing, including section 504 of the Rehabilitation Act of 1973.
‘(A) has demonstrated experience and capacity to conduct an eligible activity under paragraph (7), as evidenced by its ability to--
‘(i) own, construct or rehabilitate, manage, and operate an affordable multifamily rental housing development;
‘(ii) design, construct or rehabilitate, and market affordable housing for homeownership; or
‘(iii) provide forms of assistance, such as down payments, closing costs, or interest rate buy-downs for purchasers;
‘(A) REQUIRED AMOUNT FOR HOMEOWNERSHIP ACTIVITIES- Of the aggregate amount allocated to a State or State designated entity under this subsection not more than 10 percent shall be used for activities under subparagraph (B) of paragraph (7).
‘(B) DEADLINE FOR COMMITMENT OR USE- Grant amounts allocated to a State or State designated entity under this subsection shall be used or committed for use within 2 years of the date that such grant amounts are made available to the State or State designated entity. The Secretary shall recapture any such amounts not so used or committed for use and reallocate such amounts under this subsection in the first year after such recapture.
‘(C) USE OF RETURNS- The Secretary shall, by regulation, provide that any return on a loan or other investment of any grant amount used by a State or State designated entity to provide a loan under this subsection shall be treated, for purposes of availability to and use by the State or State designated entity, as a grant amount authorized under this subsection.
‘(D) PROHIBITED USES- The Secretary shall, by regulation--
‘(i) set forth prohibited uses of grant amounts allocated under this subsection, which shall include use for--
‘(I) political activities;
‘(II) advocacy;
‘(III) lobbying, whether directly or through other parties;
‘(IV) counseling services;
‘(V) travel expenses; and
‘(VI) preparing or providing advice on tax returns;
‘(I) the State or State designated entity; or
‘(II) any other recipient of such grant amounts; and
‘(1) except as provided in paragraph (2)--
‘(A) the amount of the grant for the State or State designated entity for the succeeding year, as determined pursuant to this section, shall be reduced by the amount by which such amounts required to be reimbursed or returned exceed the amount actually reimbursed or returned; and
‘(B) the amount of the grant for the succeeding year for each other State or State designated entity whose grant is not reduced pursuant to subparagraph (A) shall be increased by the amount determined by applying the formula established pursuant to this section to the total amount of all reductions for all State or State designated entities for such year pursuant to subparagraph (A); or
‘(1) RECIPIENTS-
‘(A) TRACKING OF FUNDS- The Secretary shall--
‘(i) require each State or State designated entity to develop and maintain a system to ensure that each recipient of assistance under this section uses such amounts in accordance with this section, the regulations issued under this section, and any requirements or conditions under which such amounts were provided; and
‘(ii) establish minimum requirements for agreements, between the State or State designated entity and recipients, regarding assistance under this section, which shall include--
‘(I) appropriate periodic financial and project reporting, record retention, and audit requirements for the duration of the assistance to the recipient to ensure compliance with the limitations and requirements of this section and the regulations under this section; and
‘(II) any other requirements that the Secretary determines are necessary to ensure appropriate administration and compliance.
‘(i) REIMBURSEMENT REQUIREMENT- If any recipient of assistance under this section is determined, in accordance with clause (ii), to have used any such amounts in a manner that is materially in violation of this section, the regulations issued under this section, or any requirements or conditions under which such amounts were provided, the State or State designated entity shall require that, within 12 months after the determination of such misuse, the recipient shall reimburse the State or State designated entity for such misused amounts and return to the State or State designated entity any such amounts that remain unused or uncommitted for use. The remedies under this clause are in addition to any other remedies that may be available under law.
‘(ii) DETERMINATION- A determination is made in accordance with this clause if the determination is made by the Secretary or made by the State or State designated entity, provided that--
‘(I) the State or State designated entity provides notification of the determination to the Secretary for review, in the discretion of the Secretary, of the determination; and
‘(II) the Secretary does not subsequently reverse the determination.
‘(A) REPORT-
‘(i) IN GENERAL- The Secretary shall require each State or State designated entity receiving grant amounts in any given year under this section to submit a report, for such year, to the Secretary that--
‘(I) describes the activities funded under this section during such year with such grant amounts; and
‘(II) the manner in which the State or State designated entity complied during such year with any allocation plan established pursuant to subsection (c).
‘(i) reduce the amount of assistance under this section to the State or State designated entity by an amount equal to the amount of grant amounts which were not used in accordance with this section;
‘(ii) require the State or State designated entity to repay the Secretary any amount of the grant which was not used in accordance with this section;
‘(iii) limit the availability of assistance under this section to the State or State designated entity to activities or recipients not affected by such failure to comply; or
‘(iv) terminate any assistance under this section to the State or State designated entity.
‘(1) EXTREMELY LOW-INCOME RENTER HOUSEHOLD- The term ‘extremely low-income renter household’ means a household whose income is not in excess of 30 percent of the area median income, with adjustments for smaller and larger families, as determined by the Secretary.
‘(2) RECIPIENT- The term ‘recipient’ means an individual or entity that receives assistance from a State or State designated entity from amounts made available to the State or State designated entity under this section.
‘(3) SHORTAGE OF STANDARD RENTAL UNITS BOTH AFFORDABLE AND AVAILABLE TO EXTREMELY LOW-INCOME RENTER HOUSEHOLDS-
‘(A) IN GENERAL- The term ‘shortage of standard rental units both affordable and available to extremely low-income renter households’ means for any State or other geographical area the gap between--
‘(i) the number of units with complete plumbing and kitchen facilities with a rent that is 30 percent or less of 30 percent of the adjusted area median income as determined by the Secretary that are occupied by extremely low-income renter households or are vacant for rent; and
‘(ii) the number of extremely low-income renter households.
‘(A) IN GENERAL- The term ‘shortage of standard rental units both affordable and available to very low-income renter households’ means for any State or other geographical area the gap between--
‘(i) the number of units with complete plumbing and kitchen facilities with a rent that is 30 percent or less of 50 percent of the adjusted area median income as determined by the Secretary that are occupied by very low-income renter households or are vacant for rent; and
‘(ii) the number of very low-income renter households.
‘(1) IN GENERAL- The Secretary shall issue regulations to carry out this section.
‘(2) REQUIRED CONTENTS- The regulations issued under this subsection shall include--
‘(A) a requirement that the Secretary ensure that the use of grant amounts under this section by States or State designated entities is audited not less than annually to ensure compliance with this section;
‘(B) authority for the Secretary to audit, provide for an audit, or otherwise verify a State or State designated entity’s activities to ensure compliance with this section;
‘(C) a requirement that, for the purposes of subparagraphs (A) and (B), any financial statement submitted by a grantee or recipient to the Secretary shall be reviewed by an independent certified public accountant in accordance with Statements on Standards for Accounting and Review Services, issued by the American Institute of Certified Public Accountants;
‘(D) requirements for a process for application to, and selection by, each State or State designated entity for activities meeting the State or State designated entity’s priority housing needs to be funded with grant amounts under this section, which shall provide for priority in funding to be based upon--
‘(i) geographic diversity;
‘(ii) ability to obligate amounts and undertake activities so funded in a timely manner;
‘(iii) in the case of rental housing projects under subsection (c)(7)(A), the extent to which rents for units in the project funded are affordable, especially for extremely low-income families;
‘(iv) in the case of rental housing projects under subsection (c)(7)(A), the extent of the duration for which such rents will remain affordable;
‘(v) the extent to which the application makes use of other funding sources; and
‘(vi) the merits of an applicant’s proposed eligible activity;
‘SEC. 1339. CAPITAL MAGNET FUND.
‘(a) Establishment- There is established in the Treasury of the United States a trust fund to be known as the Capital Magnet Fund, which shall be a special account within the Community Development Financial Institutions Fund.
‘(b) Deposits to Trust Fund- The Capital Magnet Fund shall consist of--
‘(1) any amounts transferred to the Fund pursuant to section 1337; and
‘(2) any amounts as are or may be appropriated, transferred, or credited to such Fund under any other provisions of law.
‘(1) the development, preservation, rehabilitation, or purchase of affordable housing for primarily extremely low-, very low-, and low-income families; and
‘(2) economic development activities or community service facilities, such as day care centers, workforce development centers, and health care clinics, which in conjunction with affordable housing activities implement a concerted strategy to stabilize or revitalize a low-income area or underserved rural area.
‘(1) a Treasury certified community development financial institution; or
‘(2) a nonprofit organization having as 1 of its principal purposes the development or management of affordable housing.
‘(1) To provide loan loss reserves.
‘(2) To capitalize a revolving loan fund.
‘(3) To capitalize an affordable housing fund.
‘(4) To capitalize a fund to support activities described in subsection (c)(2).
‘(5) For risk-sharing loans.
‘(1) IN GENERAL- The Secretary of the Treasury shall provide, in a competitive application process established by regulation, for eligible grantees under subsection (e) to submit applications for Capital Magnet Fund grants to the Secretary at such time and in such manner as the Secretary shall determine.
‘(2) CONTENT OF APPLICATION- The application required under paragraph (1) shall include a detailed description of--
‘(A) the types of affordable housing, economic, and community revitalization projects that support or sustain residents of an affordable housing project funded by a grant under this section for which such grant amounts would be used, including the proposed use of eligible grants as authorized under this section;
‘(B) the types, sources, and amounts of other funding for such projects; and
‘(C) the expected time frame of any grant used for such project.
‘(1) IN GENERAL- Any 1 eligible grantee and its subsidiaries and affiliates may not be awarded more than 15 percent of the aggregate funds available for grants during any year from the Capital Magnet Fund.
‘(2) GEOGRAPHIC DIVERSITY-
‘(A) GOAL- The Secretary of the Treasury shall seek to fund activities in geographically diverse areas of economic distress, including metropolitan and underserved rural areas in every State.
‘(B) DIVERSITY DEFINED- For purposes of this paragraph, geographic diversity includes those areas that meet objective criteria of economic distress developed by the Secretary of the Treasury, which may include--
‘(i) the percentage of low-income families or the extent of poverty;
‘(ii) the rate of unemployment or underemployment;
‘(iii) extent of blight and disinvestment;
‘(iv) projects that target extremely low-, very low-, and low-income families in or outside a designated economic distress area; or
‘(v) any other criteria designated by the Secretary of the Treasury.
‘(A) political activities;
‘(B) advocacy;
‘(C) lobbying, whether directly or through other parties;
‘(D) counseling services;
‘(E) travel expenses; and
‘(F) preparing or providing advice on tax returns;
‘(A) TRACKING OF FUNDS- The Secretary of the Treasury shall--
‘(i) require each grantee to develop and maintain a system to ensure that each recipient of assistance from the Capital Magnet Fund uses such amounts in accordance with this section, the regulations issued under this section, and any requirements or conditions under which such amounts were provided; and
‘(ii) establish minimum requirements for agreements, between the grantee and the Capital Magnet Fund, regarding assistance from the Capital Magnet Fund, which shall include--
‘(I) appropriate periodic financial and project reporting, record retention, and audit requirements for the duration of the grant to the recipient to ensure compliance with the limitations and requirements of this section and the regulations under this section; and
‘(II) any other requirements that the Secretary determines are necessary to ensure appropriate grant administration and compliance.
‘(i) reduce the amount of assistance under this section to the grantee by an amount equal to the amount of Capital Magnet Fund grant amounts which were not used in accordance with this section;
‘(ii) require the grantee to repay the Secretary any amount of the Capital Magnet Fund grant amounts which were not used in accordance with this section;
‘(iii) limit the availability of assistance under this section to the grantee to activities or recipients not affected by such failure to comply; or
‘(iv) terminate any assistance under this section to the grantee.
‘(1) IN GENERAL- The Secretary of the Treasury shall submit a report, on a periodic basis, to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives describing the activities to be funded under this section.
‘(2) REPORTS AVAILABLE TO PUBLIC- The Secretary of the Treasury shall make the reports required under paragraph (1) publicly available.
‘(1) IN GENERAL- The Secretary of the Treasury shall issue regulations to carry out this section.
‘(2) REQUIRED CONTENTS- The regulations issued under this subsection shall include--
‘(A) authority for the Secretary to audit, provide for an audit, or otherwise verify an enterprise’s activities, to ensure compliance with this section;
‘(B) a requirement that the Secretary ensure that the allocation of each enterprise is audited not less than annually to ensure compliance with this section;
‘(C) a requirement that, for the purposes of subparagraphs (A) and (B), any financial statement submitted by a grantee to the Secretary shall be reviewed by an independent certified public accountant in accordance with Statements on Standards for Accounting and Review Services, issued by the American Institute of Certified Public Accountants; and
‘(D) requirements for a process for application to, and selection by, the Secretary for activities to be funded with amounts from the Capital Magnet Fund, which shall provide that--
‘(i) funds be fairly distributed to urban, suburban, and rural areas; and
‘(ii) selection shall be based upon specific criteria, including a prioritization of funding based upon--
‘(I) the ability to use such funds to generate additional investments;
‘(II) affordable housing need (taking into account the distinct needs of different regions of the country); and
‘(III) ability to obligate amounts and undertake activities so funded in a timely manner.’.
SEC. 1132. FINANCIAL EDUCATION AND COUNSELING.
(a) Goals- Financial education and counseling under this section shall have the goal of--
(1) increasing the financial knowledge and decision making capabilities of prospective homebuyers;
(2) assisting prospective homebuyers to develop monthly budgets, build personal savings, finance or plan for major purchases, reduce their debt, improve their financial stability, and set and reach their financial goals;
(3) helping prospective homebuyers to improve their credit scores by understanding the relationship between their credit histories and their credit scores; and
(4) educating prospective homebuyers about the options available to build savings for short- and long-term goals.
(1) IN GENERAL- The Secretary of the Treasury (in this section referred to as the ‘Secretary’) shall make grants to eligible organizations to enable such organizations to provide a range of financial education and counseling services to prospective homebuyers.
(2) SELECTION- The Secretary shall select eligible organizations to receive assistance under this section based on their experience and ability to provide financial education and counseling services that result in documented positive behavioral changes.
(c) Eligible Organizations-
(1) IN GENERAL- For purposes of this section, the term ‘eligible organization’ means an organization that is--
(A) certified in accordance with section 106(e)(1) of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701x(e)); or
(B) certified by the Office of Financial Education of the Department of the Treasury for purposes of this section, in accordance with paragraph (2).
(2) OFE CERTIFICATION- To be certified by the Office of Financial Education for purposes of this section, an eligible organization shall be--
(A) a housing counseling agency certified by the Secretary of Housing and Urban Development under section 106(e) of the Housing and Urban Development Act of 1968;
(B) a State, local, or tribal government agency;
(C) a community development financial institution (as defined in section 103(5) of the Community Development Banking and Financial Institutions Act of 1994 (12 U.S.C. 4702(5)) or a credit union; or
(D) any collaborative effort of entities described in any of subparagraphs (A) through (C).
(d) Authority for Pilot Projects-
(1) IN GENERAL- The Secretary of the Treasury shall authorize not more than 5 pilot project grants to eligible organizations under subsection (c) in order to--
(A) carry out the services under this section; and
(B) provide such other services that will improve the financial stability and economic condition of low- and moderate-income and low-wealth individuals.
(2) GOAL- The goal of the pilot project grants under this subsection is to--
(A) identify successful methods resulting in positive behavioral change for financial empowerment; and
(B) establish program models for organizations to carry out effective counseling services.
(e) Authorization of Appropriations- There are authorized to be appropriated to the Secretary such sums as are necessary to carry out this section and for the provision of additional financial educational services.
(f) Study and Report on Effectiveness and Impact-
(1) IN GENERAL- The Comptroller General of the United States shall conduct a study on the effectiveness and impact of the grant program established under this section. Not later than 3 years after the date of enactment of this Act, the Comptroller General shall submit a report on the results of such study to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives.
(2) CONTENT OF STUDY- The study required under paragraph (1) shall include an evaluation of the following:
(A) The effectiveness of the grant program established under this section in improving the financial situation of homeowners and prospective homebuyers served by the grant program.
(B) The extent to which financial education and counseling services have resulted in positive behavioral changes.
(C) The effectiveness and quality of the eligible organizations providing financial education and counseling services under the grant program.
(g) Regulations- The Secretary is authorized to promulgate such regulations as may be necessary to implement and administer the grant program authorized by this section.
SEC. 1133. TRANSFER AND RIGHTS OF CERTAIN HUD EMPLOYEES.
(a) Transfer- Each employee of the Department of Housing and Urban Development whose position responsibilities primarily involve the establishment and enforcement of the housing goals under subpart B of part 2 of subtitle A of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4561 et seq.) shall be transferred to the Federal Housing Finance Agency for employment, not later than the effective date of the Federal Housing Finance Regulatory Reform Act of 2008, and such transfer shall be deemed a transfer of function for purposes of section 3503 of title 5, United States Code.
(b) Guaranteed Positions-
(1) IN GENERAL- 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.
(2) NO INVOLUNTARY SEPARATION OR REDUCTION- An employee transferred under subsection (a) holding a permanent position on the day immediately preceding the transfer may not be involuntarily separated or reduced in grade or compensation during the 12-month period beginning on the date of transfer, except for cause, or, in the case of a temporary employee, separated in accordance with the terms of the appointment of the employee.
(c) Appointment Authority for Excepted and Senior Executive Service Employees-
(1) IN GENERAL- In the case of an employee occupying a position 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 position shall be transferred, subject to paragraph (2).
(2) DECLINE OF TRANSFER- The Director may decline a transfer of authority under paragraph (1) to the extent that such authority relates to--
(A) a position excepted from the competitive service because of its confidential, policymaking, policy-determining, or policy-advocating character; or
(B) a noncareer position in the Senior Executive Service (within the meaning of section 3132(a)(7) of title 5, United States Code).
(d) Reorganization- If the Director determines, after the end of the 1-year period beginning on the effective date of the Federal Housing Finance Regulatory Reform Act of 2008, that a reorganization of the combined workforce is required, that reorganization shall be deemed a major reorganization for purposes of affording affected employee 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 described under subsection (a) accepting employment with the 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 Agency or the Department of Housing and Urban Development, as applicable, including insurance, to which such employee belongs on such effective date, 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-
(A) IN GENERAL- The difference in the costs between the benefits which would have been provided by the Department of Housing and Urban Development and those provided by this section shall be paid by the Director.
(B) HEALTH INSURANCE- If any employee elects to give up membership in a health insurance program or the health insurance program is not continued by the Director, the employee shall be permitted to select an alternate Federal health insurance program not later than 30 days after the date of such election or notice, without regard to any other regularly scheduled open season.
Subtitle C--Prompt Corrective Action
SEC. 1141. CRITICAL CAPITAL LEVELS.
(a) In General- Section 1363 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4613) is amended--
(1) by striking ‘For’ and inserting ‘(a) Enterprises- For’; and
(2) by adding at the end the following new subsection:
‘(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.’.
(b) Regulations- Not later than the expiration of the 180-day period beginning on the date of enactment of this Act, the Director of the Federal Housing Finance Agency shall issue regulations pursuant to section 1363(b) of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (as added by this section) establishing the critical capital level under such section.
SEC. 1142. CAPITAL CLASSIFICATIONS.
(a) In General- Section 1364 of the Federal Housing Enterprises Financial Safety and Soundness 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:
‘(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.
‘(A) adequately capitalized;
‘(B) undercapitalized;
‘(C) significantly undercapitalized; and
‘(D) critically undercapitalized.
‘(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 the value of collateral pledged as security has decreased significantly or that the value of the property subject to mortgages held by the regulated entity (or securitized in the case of an 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.
‘(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
‘(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 date of enactment of this Act, the Director of the Federal Housing Finance Agency shall issue regulations to carry out section 1364(b) of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (as added by this section), relating to capital classifications for the Federal Home Loan Banks.
SEC. 1143. SUPERVISORY ACTIONS APPLICABLE TO UNDERCAPITALIZED REGULATED ENTITIES.
Section 1365 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4615) is amended--
(1) by striking ‘the enterprise’ each place that term appears and inserting ‘the regulated entity’;
(2) by striking ‘An enterprise’ each place that term appears and inserting ‘A regulated entity’;
(3) by striking ‘an enterprise’ each place that term appears and inserting ‘a regulated entity’;
(4) in subsection (a)--
(A) by redesignating paragraphs (1) and (2) as paragraphs (2) and (3), respectively;
(B) by inserting before paragraph (2), as redesignated, the following:
‘(A) closely monitor the condition of any undercapitalized regulated entity;
‘(B) closely monitor compliance with the capital restoration plan, restrictions, and requirements imposed on an undercapitalized regulated entity under this section; and
‘(C) periodically review the plan, restrictions, and requirements applicable to an undercapitalized regulated entity to determine whether the plan, restrictions, and requirements are achieving the purpose of this section.’; and
(C) by adding at the end the following:
‘(A) the Director has accepted the capital restoration plan of the regulated entity;
‘(B) any increase in total assets is consistent with the capital restoration plan; and
‘(C) the ratio of tangible equity to assets of the regulated entity increases during the calendar quarter at a rate sufficient to enable the regulated entity to become adequately capitalized within a reasonable time.
‘(A) the Director has accepted the capital restoration plan of the regulated entity, the regulated 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 subtitle.’;
(5) in subsection (b)--
(A) in the subsection heading, by striking ‘Discretionary’;
(B) in the matter preceding paragraph (1), by striking ‘may’ and inserting ‘shall’; and
(C) in paragraph (2)--
(i) by striking ‘make, in good faith, reasonable efforts necessary to’; and
(ii) by striking the period at the end and inserting ‘in any material respect.’; and
(6) by striking subsection (c) and inserting the following:
‘(c) Other Discretionary Safeguards- The Director may take, with respect to an undercapitalized regulated entity, any of the actions authorized to be taken under section 1366 with respect to a significantly undercapitalized regulated entity, if the Director determines that such actions are necessary to carry out the purpose of this subtitle.’.
SEC. 1144. SUPERVISORY ACTIONS APPLICABLE TO SIGNIFICANTLY UNDERCAPITALIZED REGULATED ENTITIES.
Section 1366 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4616) is amended--
(1) in subsection (a)(2), by striking ‘undercapitalized enterprise’ and inserting ‘undercapitalized’;
(2) by striking ‘the enterprise’ each place that term appears and inserting ‘the regulated entity’;
(3) by striking ‘An enterprise’ each place that term appears and inserting ‘A regulated entity’;
(4) by striking ‘an enterprise’ each place that term appears and inserting ‘a regulated entity’;
(5) in subsection (b)--
(A) in the subsection heading, by striking ‘Discretionary Supervisory’ and inserting ‘Specific’;
(B) in the matter preceding paragraph (1), by striking ‘may, at any time, take any’ and inserting ‘shall carry out this section by taking, at any time, 1 or more’;
(C) by striking paragraph (6);
(D) by redesignating paragraph (5) as paragraph (6);
(E) by inserting after paragraph (4) the following:
‘(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 date on which the regulated entity became undercapitalized. Dismissal under this subparagraph shall not be construed to be a removal pursuant to the enforcement powers of the Director under section 1377.
‘(C) EMPLOY QUALIFIED EXECUTIVE OFFICERS- Require the regulated entity to employ qualified executive officers (who, if the Director so specifies, shall be subject to approval by the Director).’; and
(F) by adding at the end the following:
(6) by striking subsection (c) and inserting the following:
‘(1) pay any bonus to any executive officer; or
‘(2) provide compensation to any executive officer at a rate exceeding the average rate of compensation of that officer (excluding bonuses, stock options, and profit sharing) during the 12 calendar months preceding the calendar month in which the regulated entity became significantly undercapitalized.’.
SEC. 1145. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED REGULATED ENTITIES.
(a) In General- Section 1367 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4617) is amended to read as follows:
‘SEC. 1367. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED REGULATED ENTITIES.
‘(a) Appointment of the Agency as Conservator or Receiver-
‘(1) IN GENERAL- Notwithstanding any other provision of Federal or State law, the Director may appoint the Agency as conservator or receiver for a regulated entity in the manner provided under paragraph (2) or (4). All references to the conservator or receiver under this section are references to the Agency acting as conservator or receiver.
‘(2) DISCRETIONARY APPOINTMENT- The Agency may, at the discretion of the Director, be appointed conservator or receiver for the purpose of reorganizing, rehabilitating, or winding up the affairs of a regulated entity.
‘(3) GROUNDS FOR DISCRETIONARY APPOINTMENT OF CONSERVATOR OR RECEIVER- The grounds for appointing conservator or receiver for any regulated entity under paragraph (2) are as follows:
‘(A) ASSETS INSUFFICIENT FOR OBLIGATIONS- The assets of the regulated entity are less than the obligations of the regulated entity to its creditors and others.
‘(B) SUBSTANTIAL DISSIPATION- Substantial dissipation of assets or earnings due to--
‘(i) any violation of any provision of Federal or State law; or
‘(ii) any unsafe or unsound practice.
‘(i) cause insolvency or substantial dissipation of assets or earnings; or
‘(ii) weaken the condition of the regulated entity.
‘(i) has no reasonable prospect of becoming adequately capitalized;
‘(ii) fails to become adequately capitalized, as required by--
‘(I) section 1365(a)(1) with respect to a regulated entity; or
‘(II) section 1366(a)(1) with respect to a significantly undercapitalized regulated entity;
‘(A) IN GENERAL- The Director shall appoint the Agency as receiver for a regulated entity if the Director determines, in writing, that--
‘(i) the assets of the regulated entity are, and during the preceding 60 calendar days have been, less than the obligations of the regulated entity to its creditors and others; or
‘(ii) the regulated entity is not, and during the preceding 60 calendar days has not been, generally paying the debts of the regulated entity (other than debts that are the subject of a bona fide dispute) as such debts become due.
‘(i) not later than 30 calendar days after the regulated entity initially becomes critically undercapitalized; and
‘(ii) at least once during each succeeding 30-calendar day period.
‘(A) IN GENERAL- If the Agency is appointed conservator or receiver under this section, the regulated entity may, within 30 days of such appointment, bring an action in the United States district court for the judicial district in which the home office of such regulated entity is located, or in the United States District Court for the District of Columbia, for an order requiring the Agency to remove itself as conservator or receiver.
‘(B) REVIEW- Upon the filing of an action under subparagraph (A), the court shall, upon the merits, dismiss such action or direct the Agency to remove itself as such conservator or receiver.
‘(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.
‘(i) take over the assets of and operate the regulated entity with all the powers of the shareholders, the directors, and the officers of the regulated entity and conduct all business of the regulated entity;
‘(ii) collect all obligations and money due the regulated entity;
‘(iii) perform all functions of the regulated entity in the name of the regulated entity which are consistent with the appointment as conservator or receiver;
‘(iv) preserve and conserve the assets and property of the regulated entity; and
‘(v) provide by contract for assistance in fulfilling any function, activity, action, or duty of the Agency as conservator or receiver.
‘(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.
‘(i) IN GENERAL-
‘(I) AGENCY AUTHORITY- The Agency may, as conservator or receiver, and for purposes of carrying out any power, authority, or duty with respect to a regulated entity (including determining any claim against the regulated entity and determining and realizing upon any asset of any person in the course of collecting money due the regulated entity), exercise any power established under section 1348.
‘(II) APPLICABILITY OF LAW- The provisions of section 1348 shall apply with respect to the exercise of any power under this subparagraph, in the same manner as such provisions apply under that section.
‘(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.
‘(i) SHAREHOLDERS AND CREDITORS OF FAILED REGULATED ENTITY- Notwithstanding any other provision of law, the appointment of the Agency as receiver for a regulated entity pursuant to paragraph (2) or (4) of subsection (a) and its succession, by operation of law, to the rights, titles, powers, and privileges described in subsection (b)(2)(A) shall terminate all rights and claims that the stockholders and creditors of the regulated entity may have against the assets or charter of the regulated entity or the Agency arising as a result of their status as stockholders or creditors, except for their right to payment, resolution, or other satisfaction of their claims, as permitted under subsections (b)(9), (c), and (e).
‘(ii) ASSETS OF REGULATED ENTITY- Notwithstanding any other provision of law, for purposes of this section, the charter of a regulated entity shall not be considered an asset of the regulated entity.
‘(A) IN GENERAL- The Agency may, as receiver, determine claims in accordance with the requirements of this subsection and any regulations prescribed under paragraph (4).
‘(B) NOTICE REQUIREMENTS- The receiver, in any case involving the liquidation or winding up of the affairs of a closed regulated entity, shall--
‘(i) promptly publish a notice to the creditors of the regulated entity to present their claims, together with proof, to the receiver by a date specified in the notice which shall be not less than 90 days after the date of publication of such notice; and
‘(ii) republish such notice approximately 1 month and 2 months, respectively, after the date of publication under clause (i).
‘(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.
‘(A) DETERMINATION PERIOD-
‘(i) IN GENERAL- Before the end of the 180-day period beginning on the date on which any claim against a regulated entity is filed with the Agency as receiver, the Agency shall determine whether to allow or disallow the claim and shall notify the claimant of any determination with respect to such claim.
‘(ii) EXTENSION OF TIME- The period described in clause (i) may be extended by a written agreement between the claimant and the Agency.
‘(iii) MAILING OF NOTICE SUFFICIENT- The requirements of clause (i) shall be deemed to be satisfied if the notice of any determination with respect to any claim is mailed to the last address of the claimant which appears--
‘(I) on the books of the regulated entity;
‘(II) in the claim filed by the claimant; or
‘(III) in documents submitted in proof of the claim.
‘(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.
‘(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.
‘(I) any extension of credit from any Federal Reserve Bank, Federal Home Loan Bank, or the United States Treasury; or
‘(II) any security interest in the assets of the regulated entity securing any such extension of credit.
‘(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.
‘(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).
‘(A) OTHER REVIEW PROCEDURES-
‘(i) IN GENERAL- The Agency shall establish such alternative dispute resolution processes as may be appropriate for the resolution of claims filed under paragraph (5)(A)(i).
‘(ii) CRITERIA- In establishing alternative dispute resolution processes, the Agency shall strive for procedures which are expeditious, fair, independent, and low cost.
‘(iii) VOLUNTARY BINDING OR NONBINDING PROCEDURES- The Agency may establish both binding and nonbinding processes under this subparagraph, which may be conducted by any government or private party. All parties, including the claimant and the Agency, must agree to the use of the process in a particular case.
‘(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.
‘(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
‘(i) the end of the 90-day period beginning on the date of the filing of a request for expedited relief; or
‘(ii) the date on which the Agency denies the claim.
‘(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.
‘(A) IN GENERAL- The receiver may, in the discretion of the receiver, and to the extent that funds are available from the assets of the regulated entity, pay creditor claims, in such manner and amounts as are authorized under this section, which are--
‘(i) allowed by the receiver;
‘(ii) approved by the Agency pursuant to a final determination pursuant to paragraph (7) or (8); or
‘(iii) determined by the final judgment of any court of competent jurisdiction.
‘(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.
‘(A) PRIOR FINAL ADJUDICATION- The Agency shall abide by any final unappealable judgment of any court of competent jurisdiction which was rendered before the appointment of the Agency as conservator or receiver.
‘(B) RIGHTS AND REMEDIES OF CONSERVATOR OR RECEIVER- In the event of any appealable judgment, the Agency as conservator or receiver--
‘(i) shall have all of the rights and remedies available to the regulated entity (before the appointment of such conservator or receiver) and the Agency, including removal to Federal court and all appellate rights; and
‘(ii) shall not be required to post any bond in order to pursue such remedies.
‘(i) any claim or action for payment from, or any action seeking a determination of rights with respect to, the assets or charter of any regulated entity for which the Agency has been appointed receiver; or
‘(ii) any claim relating to any act or omission of such regulated entity or the Agency as receiver.
‘(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.
‘(A) IN GENERAL- Notwithstanding any provision of any contract, the applicable statute of limitations with regard to any action brought by the Agency as conservator or receiver shall be--
‘(i) in the case of any contract claim, the longer of--
‘(I) the 6-year period beginning on the date on which the claim accrues; or
‘(II) the period applicable under State law; and
‘(I) the 3-year period beginning on the date on which the claim accrues; or
‘(II) the period applicable under State law.
‘(i) the date of the appointment of the Agency as conservator or receiver; or
‘(ii) the date on which the cause of action accrues.
‘(A) IN GENERAL- In the case of any tort claim described under clause (ii) for which the statute of limitations applicable under State law with respect to such claim has expired not more than 5 years before the appointment of the Agency as conservator or receiver, the Agency may bring an action as conservator or receiver on such claim without regard to the expiration of the statute of limitations applicable under State law.
‘(B) CLAIMS DESCRIBED- A tort claim referred to under clause (i) is a claim arising from fraud, intentional misconduct resulting in unjust enrichment, or intentional misconduct resulting in substantial loss to the regulated entity.
‘(A) IN GENERAL- The Agency as conservator or receiver shall, consistent with the accounting and reporting practices and procedures established by the Agency, maintain a full accounting of each conservatorship and receivership or other disposition of a regulated entity in default.
‘(B) ANNUAL ACCOUNTING OR REPORT- With respect to each conservatorship or receivership, the Agency shall make an annual accounting or report available to the Board, the Comptroller General of the United States, the Committee on Banking, Housing, and Urban Affairs of the Senate, and the Committee on Financial Services of the House of Representatives.
‘(C) AVAILABILITY OF REPORTS- Any report prepared under subparagraph (B) shall be made available by the Agency upon request to any shareholder of a regulated entity or any member of the public.
‘(D) RECORDKEEPING REQUIREMENT- After the end of the 6-year period beginning on the date on which the conservatorship or receivership is terminated by the Director, the Agency may destroy any records of such regulated entity which the Agency, in the discretion of the Agency, determines to be unnecessary, unless directed not to do so by a court of competent jurisdiction or governmental agency, or prohibited by law.
‘(A) IN GENERAL- The Agency, as conservator or receiver, may avoid a transfer of any interest of an entity-affiliated party, or any person determined by the conservator or receiver to be a debtor of the regulated entity, in property, or any obligation incurred by such party or person, that was made within 5 years of the date on which the Agency was appointed conservator or receiver, if such party or person voluntarily or involuntarily made such transfer or incurred such liability with the intent to hinder, delay, or defraud the regulated entity, the Agency, the conservator, or receiver.
‘(B) RIGHT OF RECOVERY- To the extent a transfer is avoided under subparagraph (A), the conservator or receiver may recover, for the benefit of the regulated entity, the property transferred, or, if a court so orders, the value of such property (at the time of such transfer) from--
‘(i) the initial transferee of such transfer or the entity-affiliated party or person for whose benefit such transfer was made; or
‘(ii) any immediate or mediate transferee of any such initial transferee.
‘(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.
‘(A) IN GENERAL- Notwithstanding any other provision of this subsection, any final and unappealable judgment for monetary damages entered against the conservator or receiver for the breach of an agreement executed or approved in writing by the conservator or receiver after the date of its appointment, shall be paid as an administrative expense of the conservator or receiver.
‘(B) NO LIMITATION OF POWER- Nothing in this paragraph shall be construed to limit the power of the conservator or receiver to exercise any rights under contract or law, including to terminate, breach, cancel, or otherwise discontinue such agreement.
‘(A) LIMITATIONS- The rights of the conservator or receiver appointed under this section shall be subject to the limitations on the powers of a receiver under sections 402 through 407 of the Federal Deposit Insurance Corporation Improvement Act of 1991 (12 U.S.C. 4402 through 4407).
‘(B) MORTGAGES HELD IN TRUST-
‘(i) IN GENERAL- Any mortgage, pool of mortgages, or interest in a pool of mortgages held in trust, custodial, or agency capacity by a regulated entity for the benefit of any person other than the regulated entity shall not be available to satisfy the claims of creditors generally, except that nothing in this clause shall be construed to expand or otherwise affect the authority of any regulated entity.
‘(ii) HOLDING OF MORTGAGES- Any mortgage, pool of mortgages, or interest in a pool of mortgages described in clause (i) shall be held by the conservator or receiver appointed under this section for the beneficial owners of such mortgage, pool of mortgages, or interest in accordance with the terms of the agreement creating such trust, custodial, or other agency arrangement.
‘(iii) LIABILITY OF CONSERVATOR OR RECEIVER- The liability of the conservator or receiver appointed under this section for damages shall, in the case of any contingent or unliquidated claim relating to the mortgages held in trust, be estimated in accordance with the regulations of the Director.
‘(1) IN GENERAL- Unsecured claims against a regulated entity, or the receiver therefor, that are proven to the satisfaction of the receiver shall have priority in the following order:
‘(A) Administrative expenses of the receiver.
‘(B) Any other general or senior liability of the regulated entity (which is not a liability described under subparagraph (C) or (D).
‘(C) Any obligation subordinated to general creditors (which is not an obligation described under subparagraph (D)).
‘(D) Any obligation to shareholders or members arising as a result of their status as shareholder or members.
‘(A) the Director determines that such action is necessary to maximize the value of the assets of the regulated entity, to maximize the present value return from the sale or other disposition of the assets of the regulated entity, or to minimize the amount of any loss realized upon the sale or other disposition of the assets of the regulated entity; and
‘(B) all creditors that are similarly situated under paragraph (1) receive not less than the amount provided in subsection (e)(2).
‘(A) the actual, necessary costs and expenses incurred by the receiver in preserving the assets of a failed regulated entity or liquidating or otherwise resolving the affairs of a failed regulated entity; and
‘(B) any obligations that the receiver determines are necessary and appropriate to facilitate the smooth and orderly liquidation or other resolution of the regulated entity.
‘(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.
‘(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.
‘(i) punitive or exemplary damages;
‘(ii) damages for lost profits or opportunity; or
‘(iii) damages for pain and suffering.
‘(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.
‘(A) IN GENERAL- If the conservator or receiver disaffirms or repudiates a lease under which the regulated entity was the lessee, the conservator or receiver shall not be liable for any damages (other than damages determined under subparagraph (B)) for the disaffirmance or repudiation of such lease.
‘(B) PAYMENTS OF RENT- Notwithstanding subparagraph (A), the lessor under a lease to which that subparagraph applies shall--
‘(i) be entitled to the contractual rent accruing before the later of the date on which--
‘(I) the notice of disaffirmance or repudiation is mailed; or
‘(II) the disaffirmance or repudiation becomes effective, unless the lessor is in default or breach of the terms of the lease;
‘(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.
‘(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
‘(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.
‘(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
‘(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).
‘(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.
‘(A) SERVICES PERFORMED BEFORE APPOINTMENT- In the case of any contract for services between any person and any regulated entity for which the Agency has been appointed conservator or receiver, any claim of such person for services performed before the appointment of the conservator or receiver shall be--
‘(i) a claim to be paid in accordance with subsections (b) and (e); and
‘(ii) deemed to have arisen as of the date on which the conservator or receiver was appointed.
‘(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.
‘(A) RIGHTS OF PARTIES TO CONTRACTS- Subject to paragraphs (9) and (10), and notwithstanding any other provision of this title (other than subsection (b)(9)(B) of this section), any other Federal law, or the law of any State, no person shall be stayed or prohibited from exercising--
‘(i) any right of that person to cause the termination, liquidation, or acceleration of any qualified financial contract with a regulated entity that arises upon the appointment of the Agency as receiver for such regulated entity at any time after such appointment;
‘(ii) any right under any security agreement or arrangement or other credit enhancement relating to one or more qualified financial contracts; or
‘(iii) any right to offset or net out any termination value, payment amount, or other transfer obligation arising under or in connection with 1 or more contracts and agreements described in clause (i), including any master agreement for such contracts or agreements.
‘(i) IN GENERAL- Notwithstanding paragraph (11), or any other provision of Federal or State law relating to the avoidance of preferential or fraudulent transfers, the Agency, whether acting as such or as conservator or receiver of a regulated entity, may not avoid any transfer of money or other property in connection with any qualified financial contract with a regulated entity.
‘(ii) EXCEPTION FOR CERTAIN TRANSFERS- Clause (i) shall not apply to any transfer of money or other property in connection with any qualified financial contract with a regulated entity if the Agency determines that the transferee had actual intent to hinder, delay, or defraud such regulated entity, the creditors of such regulated entity, or any conservator or receiver appointed for such regulated entity.
‘(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.
‘(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.
‘(I) a contract (other than a commodity contract) for the purchase, sale, or transfer of a commodity or any similar good, article, service, right, or interest which is presently or in the future becomes the subject of dealing in the forward contract trade, or product or byproduct thereof, with a maturity date more than 2 days after the date on which the contract is entered into, including a repurchase transaction, reverse repurchase transaction, consignment, lease, swap, hedge transaction, deposit, loan, option, allocated transaction, unallocated transaction, or any other similar agreement;
‘(II) any combination of agreements or transactions referred to in subclauses (I) and (III);
‘(III) any option to enter into any agreement or transaction referred to in subclause (I) or (II);
‘(IV) a master agreement that provides for an agreement or transaction referred to in subclauses (I), (II), or (III), together with all supplements to any such master agreement, without regard to whether the master agreement provides for an agreement or transaction that is not a forward contract under this clause, except that the master agreement shall be considered to be a forward contract under this clause only with respect to each agreement or transaction under the master agreement that is referred to in subclause (I), (II), or (III); or
‘(V) any security agreement or arrangement or other credit enhancement related to any agreement or transaction referred to in subclause (I), (II), (III), or (IV), including any guarantee or reimbursement obligation in connection with any agreement or transaction referred to in any such subclause.
‘(I) means an agreement, including related terms, which provides for the transfer of one or more certificates of deposit, mortgage-related securities (as such term is defined in section 3 of the Securities Exchange Act of 1934), mortgage loans, interests in mortgage-related securities or mortgage loans, eligible bankers’ acceptances, qualified foreign government securities (defined for purposes of this clause as a security that is a direct obligation of, or that is fully guaranteed by, the central government of a member of the Organization for Economic Cooperation and Development, as determined by regulation or order adopted by the appropriate Federal banking authority), or securities that are direct obligations of, or that are fully guaranteed by, the United States or any agency of the United States against the transfer of funds by the transferee of such certificates of deposit, eligible bankers’ acceptances, securities, mortgage loans, or interests with a simultaneous agreement by such transferee to transfer to the transferor thereof certificates of deposit, eligible bankers’ acceptances, securities, mortgage loans, or interests as described above, at a date certain not later than 1 year after such transfers or on demand, against the transfer of funds, or any other similar agreement;
‘(II) does not include any repurchase obligation under a participation in a commercial mortgage loan, unless the Agency determines by regulation, resolution, or order to include any such participation within the meaning of such term;
‘(III) means any combination of agreements or transactions referred to in subclauses (I) and (IV);
‘(IV) means any option to enter into any agreement or transaction referred to in subclause (I) or (III);
‘(V) means a master agreement that provides for an agreement or transaction referred to in subclause (I), (III), or (IV), together with all supplements to any such master agreement, without regard to whether the master agreement provides for an agreement or transaction that is not a repurchase agreement under this clause, except that the master agreement shall be considered to be a repurchase agreement under this subclause only with respect to each agreement or transaction under the master agreement that is referred to in subclause (I), (III), or (IV); and
‘(VI) means any security agreement or arrangement or other credit enhancement related to any agreement or transaction referred to in subclause (I), (III), (IV), or (V), including any guarantee or reimbursement obligation in connection with any agreement or transaction referred to in any such subclause.
‘(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.
‘(i) any right such person has to cause the termination, liquidation, or acceleration of any qualified financial contract with a regulated entity in a conservatorship based upon a default under such financial contract which is enforceable under applicable noninsolvency law;
‘(ii) any right under any security agreement or arrangement or other credit enhancement relating to 1 or more such qualified financial contracts; or
‘(iii) any right to offset or net out any termination values, payment amounts, or other transfer obligations arising under or in connection with such qualified financial contracts.
‘(i) IN GENERAL- Notwithstanding the provisions of subparagraphs (A) and (E), and sections 403 and 404 of the Federal Deposit Insurance Corporation Improvement Act of 1991, no walkaway clause shall be enforceable in a qualified financial contract of a regulated entity in default.
‘(ii) WALKAWAY CLAUSE DEFINED- For purposes of this subparagraph, the term ‘walkaway clause’ means a provision in a qualified financial contract that, after calculation of a value of a party’s position or an amount due to or from 1 of the parties in accordance with its terms upon termination, liquidation, or acceleration of the qualified financial contract, either does not create a payment obligation of a party or extinguishes a payment obligation of a party in whole or in part solely because of the status of such party as a nondefaulting party.
‘(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
‘(A) IN GENERAL- The conservator or receiver shall notify any person that is a party to a contract or transfer by 5:00 p.m. (Eastern Standard Time) on the business day following the date of the appointment of the receiver in the case of a receivership, or the business day following such transfer in the case of a conservatorship, if--
‘(i) the conservator or receiver for a regulated entity in default makes any transfer of the assets and liabilities of such regulated entity; and
‘(ii) such transfer includes any qualified financial contract.
‘(i) RECEIVERSHIP- A person who is a party to a qualified financial contract with a regulated entity may not exercise any right that such person has to terminate, liquidate, or net such contract under paragraph (8)(A) of this subsection or under section 403 or 404 of the Federal Deposit Insurance Corporation Improvement Act of 1991, solely by reason of or incidental to the appointment of a receiver for the regulated entity (or the insolvency or financial condition of the regulated entity for which the receiver has been appointed)--
‘(I) until 5:00 p.m. (Eastern Standard Time) on the business day following the date of the appointment of the receiver; or
‘(II) after the person has received notice that the contract has been transferred pursuant to paragraph (9)(A).
‘(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
‘(A) IN GENERAL- Notwithstanding any provision of a contract providing for termination, default, acceleration, or exercise of rights upon, or solely by reason of, insolvency or the appointment of, or the exercise of rights or powers by, a conservator or receiver, the conservator or receiver may enforce any contract, other than a contract for liability insurance for a director or officer, or a contract or a regulated entity bond, entered into by the regulated entity.
‘(B) CERTAIN RIGHTS NOT AFFECTED- No provision of this paragraph may be construed as impairing or affecting any right of the conservator or receiver to enforce or recover under a liability insurance contract for an officer or director, or regulated entity bond under other applicable law.
‘(C) CONSENT REQUIREMENT-
‘(i) IN GENERAL- Except as otherwise provided under this section, no person may exercise any right or power to terminate, accelerate, or declare a default under any contract to which a regulated entity is a party, or to obtain possession of or exercise control over any property of the regulated entity, or affect any contractual rights of the regulated entity, without the consent of the conservator or receiver, as appropriate, for a period of--
‘(I) 45 days after the date of appointment of a conservator; or
‘(II) 90 days after the date of appointment of a receiver.
‘(I) apply to a contract for liability insurance for an officer or director;
‘(II) apply to the rights of parties to certain qualified financial contracts under subsection (d)(8); and
‘(III) be construed as permitting the conservator or receiver to fail to comply with otherwise enforceable provisions of such contracts.
‘(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.
‘(1) IN GENERAL- Notwithstanding any other provision of Federal law or the law of any State, and regardless of the method which the Agency determines to utilize with respect to a regulated entity in default or in danger of default, including transactions authorized under subsection (i), this subsection shall govern the rights of the creditors of such regulated entity.
‘(2) MAXIMUM LIABILITY- The maximum liability of the Agency, acting as receiver or in any other capacity, to any person having a claim against the receiver or the regulated entity for which such receiver is appointed shall be not more than the amount that such claimant would have received if the Agency had liquidated the assets and liabilities of the regulated entity without exercising the authority of the Agency under subsection (i).
‘(1) IN GENERAL- A director or officer of a regulated entity may be held personally liable for monetary damages in any civil action described in paragraph (2) brought by, on behalf of, or at the request or direction of the Agency, and prosecuted wholly or partially for the benefit of the Agency--
‘(A) acting as conservator or receiver of such regulated entity; or
‘(B) acting based upon a suit, claim, or cause of action purchased from, assigned by, or otherwise conveyed by such receiver or conservator.
‘(1) ORGANIZATION-
‘(A) PURPOSE- The Agency, as receiver appointed pursuant to subsection (a)--
‘(i) may, in the case of a Federal Home Loan Bank, organize a limited-life regulated entity with those powers and attributes of the Federal Home Loan Bank in default or in danger of default as the Director determines necessary, subject to the provisions of this subsection, and the Director shall grant a temporary charter to that limited-life regulated entity, and that limited-life regulated entity may operate subject to that charter; and
‘(ii) shall, in the case of an enterprise, organize a limited-life regulated entity with respect to that enterprise in accordance with this subsection.
‘(i) assume such liabilities of the regulated entity that is in default or in danger of default as the Agency may, in its discretion, determine to be appropriate, except that the liabilities assumed shall not exceed the amount of assets purchased or transferred from the regulated entity to the limited-life regulated entity;
‘(ii) purchase such assets of the regulated entity that is in default, or in danger of default as the Agency may, in its discretion, determine to be appropriate; and
‘(iii) perform any other temporary function which the Agency may, in its discretion, prescribe in accordance with this section.
‘(A) TRANSFER OF CHARTER-
‘(i) FANNIE MAE- If the Agency is appointed as receiver for the Federal National Mortgage Association, the limited-life regulated entity established under this subsection with respect to such enterprise shall, by operation of law and immediately upon its organization--
‘(I) succeed to the charter of the Federal National Mortgage Association, as set forth in the Federal National Mortgage Association Charter Act; and
‘(II) thereafter operate in accordance with, and subject to, such charter, this Act, and any other provision of law to which the Federal National Mortgage Association is subject, except as otherwise provided in this subsection.
‘(I) succeed to the charter of the Federal Home Loan Mortgage Corporation, as set forth in the Federal Home Loan Mortgage Corporation Charter Act; and
‘(II) thereafter operate in accordance with, and subject to, such charter, this Act, and any other provision of law to which the Federal Home Loan Mortgage Corporation is subject, except as otherwise provided in this subsection.
‘(i) a limited-life regulated entity shall assume, acquire, or succeed to the assets or liabilities of a regulated entity only to the extent that such assets or liabilities are transferred by the Agency to the limited-life regulated entity in accordance with, and subject to the restrictions set forth in, paragraph (1)(B);
‘(ii) a limited-life regulated entity shall not assume, acquire, or succeed to any obligation that a regulated entity for which a receiver has been appointed may have to any shareholder of the regulated entity that arises as a result of the status of that person as a shareholder of the regulated entity; and
‘(iii) no shareholder or creditor of a regulated entity shall have any right or claim against the charter of the regulated entity once the Agency has been appointed receiver for the regulated entity and a limited-life regulated entity succeeds to the charter pursuant to subparagraph (A).
‘(A) NO AGENCY REQUIREMENT- The Agency is not required to pay capital stock into a limited-life regulated entity or to issue any capital stock on behalf of a limited-life regulated entity established under this subsection.
‘(B) AUTHORITY- If the Director determines that such action is advisable, the Agency may cause capital stock or other securities of a limited-life regulated entity established with respect to an enterprise to be issued and offered for sale, in such amounts and on such terms and conditions as the Director may determine, in the discretion of the Director.
‘(A) IN GENERAL- Subject to subparagraphs (B) and (C), not later than 2 years after the date of its organization, the Agency shall wind up the affairs of a limited-life regulated entity.
‘(B) EXTENSION- The Director may, in the discretion of the Director, extend the status of a limited-life regulated entity for 3 additional 1-year periods.
‘(C) TERMINATION OF STATUS AS LIMITED-LIFE REGULATED ENTITY-
‘(i) IN GENERAL- Upon the sale by the Agency of 80 percent or more of the capital stock of a limited-life regulated entity, as defined in clause (iv), to 1 or more persons (other than the Agency)--
‘(I) the status of the limited-life regulated entity as such shall terminate; and
‘(II) the entity shall cease to be a limited-life regulated entity for purposes of this subsection.
‘(I) IN GENERAL- Not later than 1 year after the date on which the status of a limited-life regulated entity is terminated pursuant to clause (i), the Agency shall sell to 1 or more persons (other than the Agency) any remaining capital stock of the former limited-life regulated entity.
‘(II) EXTENSION AUTHORIZED- The Director may extend the period referred to in subclause (I) for not longer than an additional 2 years, if the Director determines that such action would be in the public interest.
‘(A) IN GENERAL-
‘(i) TRANSFER OF ASSETS AND LIABILITIES- The Agency, as receiver, may transfer any assets and liabilities of a regulated entity in default, or in danger of default, to the limited-life regulated entity in accordance with and subject to the restrictions of paragraph (1).
‘(ii) SUBSEQUENT TRANSFERS- At any time after the establishment of a limited-life regulated entity, the Agency, as receiver, may transfer any assets and liabilities of the regulated entity in default, or in danger of default, as the Agency may, in its discretion, determine to be appropriate in accordance with and subject to the restrictions of paragraph (1).
‘(iii) EFFECTIVE WITHOUT APPROVAL- The transfer of any assets or liabilities of a regulated entity in default or in danger of default to a limited-life regulated entity shall be effective without any further approval under Federal or State law, assignment, or consent with respect thereto.
‘(iv) EQUITABLE TREATMENT OF SIMILARLY SITUATED CREDITORS- The Agency shall treat all creditors of a regulated entity in default or in danger of default that are similarly situated under subsection (c)(1) in a similar manner in exercising the authority of the Agency under this subsection to transfer any assets or liabilities of the regulated entity to the limited-life regulated entity established with respect to such regulated entity, except that the Agency may take actions (including making payments) that do not comply with this clause, if--
‘(I) the Director determines that such actions are necessary to maximize the value of the assets of the regulated entity, to maximize the present value return from the sale or other disposition of the assets of the regulated entity, or to minimize the amount of any loss realized upon the sale or other disposition of the assets of the regulated entity; and
‘(II) all creditors that are similarly situated under subsection (c)(1) receive not less than the amount provided in subsection (e)(2).
‘(A) IN GENERAL- Each limited-life regulated entity created under this subsection shall have all corporate powers of, and be subject to the same provisions of law as, the regulated entity in default or in danger of default to which it relates, except that--
‘(i) the Agency may--
‘(I) remove the directors of a limited-life regulated entity;
‘(II) fix the compensation of members of the board of directors and senior management, as determined by the Agency in its discretion, of a limited-life regulated entity; and
‘(III) indemnify the representatives for purposes of paragraph (1)(B), and the directors, officers, employees, and agents of a limited-life regulated entity on such terms as the Agency determines to be appropriate; and
‘(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.
‘(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.
‘(A) IN GENERAL- A limited-life regulated entity may obtain unsecured credit and issue unsecured debt.
‘(B) INABILITY TO OBTAIN CREDIT- If a limited-life regulated entity is unable to obtain unsecured credit or issue unsecured debt, the Director may authorize the obtaining of credit or the issuance of debt by the limited-life regulated entity--
‘(i) with priority over any or all of the obligations of the limited-life regulated entity;
‘(ii) secured by a lien on property of the limited-life regulated entity that is not otherwise subject to a lien; or
‘(iii) secured by a junior lien on property of the limited-life regulated entity that is subject to a lien.
‘(i) IN GENERAL- The Director, after notice and a hearing, may authorize the obtaining of credit or the issuance of debt by a limited-life regulated entity that is secured by a senior or equal lien on property of the limited-life regulated entity that is subject to a lien (other than mortgages that collateralize the mortgage-backed securities issued or guaranteed by an enterprise) only if--
‘(I) the limited-life regulated entity is unable to otherwise obtain such credit or issue such debt; and
‘(II) there is adequate protection of the interest of the holder of the lien on the property with respect to which such senior or equal lien is proposed to be granted.
‘(1) APPLICABILITY- The provisions of this subsection shall apply with respect to the Agency in any case in which the Agency is acting as a conservator or a receiver.
‘(2) TAXATION- The Agency, including its franchise, its capital, reserves, and surplus, and its income, shall be exempt from all taxation imposed by any State, county, municipality, or local taxing authority, except that any real property of the Agency shall be subject to State, territorial, county, municipal, or local taxation to the same extent according to its value as other real property is taxed, except that, notwithstanding the failure of any person to challenge an assessment under State law of the value of such property, and the tax thereon, shall be determined as of the period for which such tax is imposed.
‘(3) PROPERTY PROTECTION- No property of the Agency shall be subject to levy, attachment, garnishment, foreclosure, or sale without the consent of the Agency, nor shall any involuntary lien attach to the property of the Agency.
‘(4) PENALTIES AND FINES- The Agency shall not be liable for any amounts in the nature of penalties or fines, including those arising from the failure of any person to pay any real property, personal property, probate, or recording tax or any recording or filing fees when due.
(1) in section 1368 (12 U.S.C. 4618)--
(A) by striking ‘an enterprise’ each place that term appears and inserting ‘a regulated entity’; and
(B) by striking ‘the enterprise’ each place that term appears and inserting ‘the regulated entity’;
(A) by striking ‘an enterprise’ each place that term appears and inserting ‘a regulated entity’; and
(B) in subsection (a)(1), by striking ‘An enterprise’ and inserting ‘A regulated entity’; and
Subtitle D--Enforcement Actions
SEC. 1151. CEASE AND DESIST PROCEEDINGS.
Section 1371 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4631) is amended--
(1) by striking subsections (a) and (b) and inserting the following:
