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SA 4418. Mr. MARTINEZ (for himself and Mr. CARPER) submitted an amendment intended to be proposed by him to the bill H.R. 3221 moving the United States toward greater energy independence and security, developing innovative new technologies, reducing carbon emissions, creating green jobs, protecting consumers, increasing clean renewable energy production, and modernizing our energy infrastructure, and to amend the Internal Revenue Code of 1986 to provide tax incentives for the production
of renewable energy and energy conservation; which was ordered to lie on the table; as follows:


At the end, add the following:
TITLE VIII--REGULATION OF HOUSING ENTERPRISES


SEC. 800. SHORT TITLE.
This title may be cited as the ``Federal Housing Enterprise Regulatory Reform Act of 2008''.
Subtitle A--OFHEO


SEC. 801. DUTIES AND AUTHORITIES OF THE DIRECTOR OF OFHEO.
The Housing and Community Development Act of 1992 (12 U.S.C. 4513) is amended by striking section 1313 and inserting the following:
``SEC. 1313. DUTIES AND AUTHORITIES OF DIRECTOR.
``(a) Duties.--
``(1) PRINCIPAL DUTIES.--The principal duties of the Director shall be--
``(A) to oversee the operations of each enterprise; and
``(B) to ensure that--
``(i) each enterprise operates in a safe and sound manner, including maintenance of adequate capital and internal controls;
``(ii) the operations and activities of each enterprise foster liquid, efficient, competitive, and resilient national housing finance markets that minimize the cost of housing finance (including activities relating to mortgages on housing for low- and moderate- income families involving a reasonable economic return that may be less than the return earned on other activities);
``(iii) each enterprise complies with this title and the rules, regulations, guidelines, and orders issued under this title and the authorizing statutes; and
``(iv) each enterprise carries out its statutory mission only through activities that are consistent with this title and the authorizing statutes.
``(2) SCOPE OF AUTHORITY.--The authority of the Director shall include the authority--
``(A) to review and, if warranted based on the principal duties described in paragraph (1), reject any acquisition or transfer of a controlling interest in an enterprise; and
``(B) to exercise such incidental powers as may be necessary or appropriate to fulfill the duties and responsibilities of the Director in the supervision and regulation of each enterprise.
``(b) Delegation of Authority.--The Director may delegate to officers or employees of the Office, including each of the Deputy Directors, any of the functions, powers, or duties of the Director, as the Director considers appropriate.
``(c) Litigation Authority.--
``(1) IN GENERAL.--In enforcing any provision of this title, any regulation or order prescribed under this title, or any other provision of law, rule, regulation, or order, or in any other action, suit, or proceeding to which the Director is a party or in which the Director is interested, and in the administration of conservatorships and receiverships, the Director may act in the Director's own name and through the Director's own attorneys.
``(2) SUBJECT TO SUIT.--Except as otherwise provided by law, the Director shall be subject to suit (other than suits on claims for money damages) by an enterprise or director or officer thereof with respect to any matter under this title or any other applicable provision of law, rule, order, or regulation under this title, in the United States district court for the judicial district in which the enterprise has its principal place of business, or in the United States District Court for
the District of Columbia, and the Director may be served with process in the manner prescribed by the Federal Rules of Civil Procedure.
``SEC. 1313A. PRUDENTIAL MANAGEMENT AND OPERATIONS STANDARDS.
``(a) Standards.--The Director shall establish standards, by regulation, guideline, or order, for each enterprise relating to--
``(1) adequacy of internal controls and information systems taking into account the nature and scale of business operations;
``(2) independence and adequacy of internal audit systems;
``(3) management of credit and counterparty risk, including systems to identify concentrations of credit risk and prudential limits to restrict exposure of the enterprise to a single counterparty or groups of related counterparties;
``(4) management of interest rate risk exposure;
``(5) management of market risk, including standards that provide for systems that accurately measure, monitor, and control market risks and, as warranted, that establish limitations on market risk;
``(6) adequacy and maintenance of liquidity and reserves;
``(7) management of any asset and investment portfolio;
``(8) investments and acquisitions by an enterprise, to ensure that they are consistent with the purposes of this Act and the authorizing statutes;
``(9) maintenance of adequate records, in accordance with consistent accounting policies and practices that enable the Director to evaluate the financial condition of the enterprise;
``(10) issuance of subordinated debt by that particular enterprise, as the Director considers necessary;
``(11) overall risk management processes, including adequacy of oversight by senior management and the board of directors and of processes and policies to identify, measure, monitor, and control material risks, including reputational risks, and for adequate, well-tested business resumption plans for all major systems with remote site facilities to protect against disruptive events; and
``(12) such other operational and management standards as the Director determines to be appropriate.
``(b) Failure to Meet Standards.--
``(1) PLAN REQUIREMENT.--
``(A) IN GENERAL.--If the Director determines that an enterprise fails to meet any standard established under subsection (a)--
``(i) if such standard is established by regulation, the Director shall require the enterprise 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 enterprise to submit a plan described in clause (i).
``(B) CONTENTS.--Any plan required under subparagraph (A) shall specify the actions that the enterprise will take to correct the deficiency. If the enterprise is undercapitalized, the plan may be a part of the capital restoration plan for the enterprise under section 1369C.
``(C) DEADLINES FOR SUBMISSION AND REVIEW.--The Director shall by regulation establish deadlines that--
``(i) provide the enterprises with reasonable time to submit plans required under subparagraph (A), and generally require an enterprise to submit a plan not later than 30 days after the Director determines that the enterprise fails to meet any standard established under subsection (a); and
``(ii) require the Director to act on plans expeditiously, and generally not later than 30 days after the plan is submitted.
``(2) REQUIRED ORDER UPON FAILURE TO SUBMIT OR IMPLEMENT PLAN.--If an enterprise fails to submit an acceptable plan within the time allowed under paragraph (1)(C), or fails in any material respect to implement a plan accepted by the Director, the following shall apply:
``(A) REQUIRED CORRECTION OF DEFICIENCY.--The Director shall, by order, require the enterprise 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 enterprise from permitting its average total assets (as that 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 enterprise may increase from one calendar quarter to another.
``(ii) Require the enterprise, in the case of an enterprise, to increase its ratio of core capital to assets.
``(iii) Require the enterprise to take any other action that the Director determines will better carry out the purposes of this section than any of the actions described in this subparagraph.
``(3) MANDATORY RESTRICTIONS.--In complying with paragraph (2), the Director shall take one or more of the actions described in clauses (i) through (iii) of paragraph (2)(B) if--
``(A) the Director determines that the enterprise fails to meet any standard prescribed under subsection (a);
``(B) the enterprise has not corrected the deficiency; and
``(C) during the 18-month period before the date on which the enterprise first failed to meet the standard, the enterprise underwent extraordinary growth, as defined by the Director.
``(c) Other Enforcement Authority Not Affected.--The authority of the Director under this section is in addition to any other authority of the Director.''.
SEC. 802. AUTHORITY TO REQUIRE REPORTS BY ENTERPRISES.
Section 1314 of the Housing and Community Development Act of 1992 (12 U.S.C. 4514) is amended--
(1) in subsection (a)--
(A) in the subsection heading, by striking ``Special Reports and Reports of Financial Condition'' and inserting ``Regular and Special Reports'';
(B) in paragraph (1)--
(i) in the paragraph heading, by striking ``FINANCIAL CONDITION'' and inserting ``REGULAR REPORTS''; and
(ii) by striking ``reports of financial condition and operations'' and inserting ``regular reports on the condition (including financial condition), management, activities, or operations of the enterprise, as the Director considers appropriate''; and
(C) in paragraph (2), after ``submit special reports'' insert ``on any of the topics specified in paragraph (1) or such other topics''; and
(2) by adding at the end the following:
``(c) Reports of Fraudulent Financial Transactions.--
``(1) REQUIREMENT TO REPORT.--The Director shall require an enterprise to submit to the Director a timely report upon discovery by the enterprise that it has purchased or sold a fraudulent loan or financial instrument or suspects a possible fraud relating to a purchase or sale of any loan or financial instrument. The Director shall require the enterprises to establish and maintain procedures designed to discover any such transactions.
``(2) PROTECTION FROM LIABILITY FOR REPORTS.--
``(A) IN GENERAL.--If an enterprise makes a report pursuant to paragraph (1), or an enterprise-affiliated party makes, or requires another to make, such a report, and such report is made in a good faith effort to comply with the requirements of paragraph (1), such enterprise or enterprise-afffiliated party shall not be liable to any person under any law or regulation of the United States, any constitution, law, or regulation of any State or political subdivision of any State, or under
any contract or other legally enforceable agreement (including any arbitration agreement), for such report or for any failure to provide notice of such report to the person who is the subject of such report or any other person identified in the report.
``(B) RULE OF CONSTRUCTION.--Subparagraph (A) shall not be construed as creating--
``(i) any inference that the term `person', as used in such subparagraph, may be construed more broadly than its ordinary usage so as to include any government or agency of government; or
``(ii) any immunity against, or otherwise affecting, any civil or criminal action brought by any government or agency of government to enforce any constitution, law, or regulation of such government or agency.''.
SEC. 803. DISCLOSURE OF CHARITABLE CONTRIBUTIONS BY ENTERPRISES.
Section 1314 of the Housing and Community Development Act of 1992 (12 U.S.C. 4514), as amended by the preceding provisions of this Act, is further amended by adding at the end the following:
``(d) DISCLOSURE OF CHARITABLE CONTRIBUTIONS BY ENTERPRISES.--
``(1) Required disclosure.--The Director shall, by regulation, require each enterprise to submit a report annually, in a format designated by the Director, containing the following information:
``(A) TOTAL VALUE.--The total value of contributions made by the enterprise to nonprofit organizations during its previous fiscal year.
``(B) SUBSTANTIAL CONTRIBUTIONS.--If the value of contributions made by the enterprise to any nonprofit organization during its previous fiscal year exceeds the designated amount, the name of that organization and the value of contributions.
``(C) SUBSTANTIAL CONTRIBUTIONS TO INSIDER-AFFILIATED CHARITIES.--Identification of each contribution whose value exceeds the designated amount that were made by the enterprise during the enterprise's previous fiscal year to any nonprofit organization of which a director, officer, or controlling person of the enterprise, or a spouse thereof, was a director or trustee, the name of such nonprofit organization, and the value of the contribution.
``(2) Definitions.--For purposes of this subsection--
``(A) the term `designated amount' means such amount as may be designated by the Director by regulation, consistent with the public interest and the protection of investors for purposes of this subsection; and
``(B) the Director may, by such regulations as the Director deems necessary or appropriate in the public interest, define the terms officer and controlling person.
``(3) Public availability.--The Director shall make the information submitted pursuant to this subsection publicly available.''.
SEC. 804. ASSESSMENTS.
Section 1316 of the Housing and Community Development Act of 1992 (12 U.S.C. 4516) is amended--
(1) by striking subsection (a) and inserting the following:
``(a) Annual Assessments.--The Director shall establish and collect from the enterprises annual assessments in an amount not exceeding the amount sufficient to provide for reasonable costs and expenses of the Office, including--
``(1) the expenses of any examinations under section 1317;
``(2) the expenses of obtaining any reviews and credit assessments under section 1319; and
``(3) such amounts in excess of actual expenses for any given year as deemed necessary by the Director to maintain a working capital fund in accordance with subsection (e).'';
(2) in subsection (b)--
(A) by realigning paragraph (2) two ems from the left margin, so as to align the left margin of such paragraph with the left margins of paragraph (1); and
(B) in paragraph (3)--
(i) in subparagraph (B), by striking ``subparagraph (A)'' and inserting ``clause (i)'';
(ii) by redesignating subparagraphs (A), (B), and (C) as clauses (i), (ii) and (ii), respectively, and realigning such clauses, as so redesignated, so as to be indented 6 ems from the left margin;
(iii) by striking the matter that precedes clause (i), as so redesignated, and inserting the following:
``(3) DEFINITION OF TOTAL ASSETS.--For purposes of this section, the term `total assets' means as follows:
``(A) ENTERPRISES.--With respect to an enterprise, the sum of--''; and
(3) by striking subsection (c) and inserting the following:
``(c) Increased Costs of Regulation.--
``(1) INCREASE FOR INADEQUATE CAPITALIZATION.--The semiannual payments made pursuant to subsection (b) by any enterprise that is not classified (for purposes of subtitle B) as adequately capitalized may be increased, as necessary, in the discretion of the Director to pay additional estimated costs of regulation of the enterprise.
``(2) ADJUSTMENT FOR ENFORCEMENT ACTIVITIES.--The Director may adjust the amounts of any semiannual assessments for an assessment under subsection (a) that are to be paid pursuant to subsection (b) by an enterprise, as necessary in the discretion of the Director, to ensure that the costs of enforcement activities under subtitle B and C for an enterprise are borne only by such enterprise.
``(3) ADDITIONAL ASSESSMENT FOR DEFICIENCIES.--If at any time, as a result of increased costs of regulation of an enterprise that is not classified (for purposes of subtitle B) as adequately captitalized or as the result of supervisory or enforcement activities under subtitle B or C for an enterprise, the amount available from any semiannual payment made by such enterprise pursuant to subsection (b) is insufficient to cover the costs of the Office with respect to such enterprise, the
Director may make and collect from such enterprise 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 enterprise 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:
``(e) Working Capital Fund.--At the end of each year for which an assessment under this section is made, the Director shall remit to each enterprise any amount of assessment collected from such enterprise that is attributable to subsection (a)(3) and is in excess of the amount the Director deems necessary to maintain a working capital fund.
``(f) Treatment of Assessments.--
``(1) DEPOSIT.--Amounts received by the Director from assessments under this section may be deposited by the Director in the manner provided in section 5234 of the Revised Statutes 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 Office and for all other expenses of the Director and the Office.
``(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 on the day before the effective date of the Federal Housing Enterprise Regulatory Reform Act of 2008), shall, upon such effective date, be treated for purposes of this subsection as amounts received from assessments under this section.
``(g) Budget and Financial Management.--
``(1) FINANCIAL OPERATING PLANS AND FORECASTS.--The Director shall provide to the Director of the Office of Management and Budget copies of the Director's financial operating plans and forecasts as prepared by the Director in the ordinary course of the Office's operations, and copies of the quarterly reports of the Office's financial condition and results of operations as prepared by the Director in the ordinary course of the Office's operations.
``(2) FINANCIAL STATEMENTS.--The Office shall prepare annually a statement of assets and liabilities and surplus or deficit; a statement of income and expenses; and a statement of sources and application of funds.
``(3) FINANCIAL MANAGEMENT SYSTEMS.--The Office shall implement and maintain financial management systems that comply substantially with Federal financial management systems requirements, applicable Federal accounting standards, and that uses a general ledger system that accounts for activity at the transaction level.
``(4) ASSERTION OF INTERNAL CONTROLS.--The Director shall provide to the Comptroller General an assertion as to the effectiveness of the internal controls that apply to financial reporting by the Office, using the standards established in section 3512 (c) of title 31, United States Code.
``(5) RULE OF CONSTRUCTION.--This subsection may not be construed as implying any obligation on the part of the Director to consult with or obtain the consent or approval of the Director of the Office of Management and Budget with respect to any reports, plans, forecasts, or other information referred to in paragraph (1) or any jurisdiction or oversight over the affairs or operations of the Office.
``(h) Audit of Office.--
``(1) IN GENERAL.--The Comptroller General shall annually audit the financial transactions of the Office in accordance with the U.S. generally accepted government auditing standards as may be prescribed by the Comptroller General of the United States. The audit shall be conducted at the place or places where accounts of the Office 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 Office pertaining to its financial transactions and necessary to facilitate the audit, and such representatives shall be afforded full facilities for verifying transactions with the balances or securities held by depositaries, fiscal agents, and custodians. All such books, accounts, documents, records, reports, files,
papers, and property of the Office shall remain in possession and custody of the Office. 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 Office, 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 Office at the time submitted to the Congress.
``(3) ASSISTANCE AND COSTS.--For the purpose of conducting an audit under this subsection, the Comptroller General may, in the discretion of the Comptroller General, employ by contract, without regard to section 5 of title 41, United States Code, professional services of firms and organizations of certified public accountants for temporary periods or for special purposes. Upon the request of the Comptroller General, the Director of the Office 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. 805. EXAMINERS AND ACCOUNTANTS.
(a) Examinations.--Section 1317 of the Housing and Community Development Act of 1992 (12 U.S.C. 4517) is amended----
(1) in subsection (a), by adding after the period at the end the following: ``Each examination under this subsection of an enterprise shall include a review of the procedures required to be established and maintained by the enterprise pursuant to section 1314(c) (relating to fraudulent financial transactions) and the report regarding each such examination shall describe any problems with such procedures maintained by the enterprise.'';
(2) in subsection (b)--
(A) by inserting ``of an enterprise'' after ``under this section''; and
(B) by striking ``to determine the condition of an enterprise for the purpose of ensuring its financial safety and soundness'' and inserting ``or appropriate'' ; and
(3) in subsection (c)--
(A) in the second sentence, by inserting ``to conduct examinations under this section'' before the period; and
(B) in the third sentence, by striking ``from amounts available in the Federal Housing Enterprises Oversight Fund''.
(b) Enhanced Authority to Hire Examiners and Accountants.--Section 1317 of the Housing and Community Development Act of 1992 (12 U.S.C. 4517) is amended by adding at the end the following:
``(g) Appointment of Accountants, Economists, Specialists, and Examiners.--
``(1) APPLICABILITY.--This section applies with respect to any position of examiner, accountant, specialist in financial markets, specialist in technology, and economist at the Office, with respect to supervision and regulation of the enterprises, that is in the competitive service.
``(2) APPOINTMENT AUTHORITY.--The Director may appoint candidates to any position described in paragraph (1)--
``(A) in accordance with the statutes, rules, and regulations governing appointments in the excepted service; and
``(B) notwithstanding any statutes, rules, and regulations governing appointments in the competitive service.''.
SEC. 806. PROHIBITION AND WITHHOLDING OF EXECUTIVE COMPENSATION.
(a) In General.--Section 1318 of the Housing and Community Development Act of 1992 (12 U.S.C. 4518) is amended--
(1) in the section heading, by striking ``OF EXCESSIVE'' and inserting ``AND WITHHOLDING OF EXECUTIVE'';
(2) by redesignating subsection (b) as subsection (d); and
(3) by inserting after subsection (a) the following:
``(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 enterprise. 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 an enterprise 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:
``(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:
``(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).''.
SEC. 807. REVIEWS OF ENTERPRISES.
Section 1319 of the Housing and Community Development Act of 1992 (12 U.S.C. 4519) is amended--
(1) by striking the section designation and heading and inserting the following:
``SEC. 1319. REVIEWS OF ENTERPRISES.''; and
(2) by inserting after ``any entity'' the following: ``that the Director considers appropriate, including an entity''.
SEC. 808. REGULATIONS AND ORDERS.
Section 1319G of the Housing and Community Development Act of 1992 (12 U.S.C. 4526) is amended--
(1) by striking subsection (a) and inserting the following:
``(a) Authority.--The Director shall issue any regulations, guidelines, and orders necessary to carry out the duties of the Director under this title and each of the authorizing statutes to ensure that the purposes of this title and such Acts are accomplished.'';
(2) in subsection (b), by inserting ``, this title, or any of the authorizing statutes'' after ``under this section''; and
(3) by striking subsection (c).
SEC. 809. RISK-BASED CAPITAL REQUIREMENTS.
Section 1361 of the Housing and Community Development Act of 1992 (12 U.S.C. 4611) is amended to read as follows:
``SEC. 1361. RISK-BASED CAPITAL LEVELS FOR ENTERPRISES.
``(a) In General.--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.
``(b) Confidentiality of Information.--Any person that receives any book, record, or information from the Director or an enterprise to enable the risk-based capital requirements established under this section to be applied shall--
``(1) maintain the confidentiality of the book, record, or information in a manner that is generally consistent with the level of confidentiality established for the material by the Director or the enterprise; and
``(2) be exempt from section 552 of title 5, United States Code, with respect to the book, record, or information.
``(c) No Limitation.--Nothing in this section shall limit the authority of the Director to require other reports or undertakings, or take other action, in furtherance of the responsibilities of the Director under this Act.''.
SEC. 810. REVIEW OF AND AUTHORITY OVER ENTERPRISE ASSETS AND LIABILITIES.
Subtitle B of title XIII of the Housing and Community Development Act of 1992 (12 U.S.C. 4611 et seq.) is amended--
(1) by striking the subtitle designation and heading and inserting the following:
``Subtitle B--Required Capital Levels for Enterprises, Special Enforcement Powers, and Reviews of Assets and Liabilities''; and


(2) by adding at the end the following:
``SEC. 1369E. REVIEWS OF ENTERPRISE ASSETS AND LIABILITIES.
``(a) In General.--The Director shall conduct, on a periodic basis, a review of the on-balance sheet and off-balance sheet assets and liabilities of each enterprise.
``(b) Authority to Require Disposition or Acquisition.--Pursuant to such a review and notwithstanding the capital classifications of the enterprises, the Director may by order require an enterprise, under such terms and conditions as the Director determines to be appropriate, to dispose of or acquire any asset or liability, if the Director determines that such action is consistent with the safe and sound operation of the enterprise or with the purposes of this Act or any of the authorizing
statutes.''.
SEC. 811. CORPORATE GOVERNANCE OF ENTERPRISES.
The Housing and Community Development Act of 1992 is amended by inserting before section 1323 (12 U.S.C. 4543) the following:
``SEC. 1322A. CORPORATE GOVERNANCE OF ENTERPRISES.
``(a) Board of Directors.--
``(1) INDEPENDENCE.--A majority of seated members of the board of directors of each enterprise shall be independent board members, as defined under rules set forth by the New York Stock Exchange, as such rules may be amended from time to time.
``(2) FREQUENCY OF MEETINGS.--To carry out its obligations and duties under applicable laws, rules, regulations, and guidelines, the board of directors of an enterprise shall meet at least eight times a year and not less than once a calendar quarter.
``(3) NON-MANAGEMENT BOARD MEMBER MEETINGS.--The non-management directors of an enterprise shall meet at regularly scheduled executive sessions without management participation.
``(4) QUORUM; PROHIBITION ON PROXIES.--For the transaction of business, a quorum of the board of directors of an enterprise shall be at least a majority of the seated board of directors and a board member may not vote by proxy.
``(5) INFORMATION.--The management of an enterprise shall provide a board member of the enterprise with such adequate and appropriate information that a reasonable board member would find important to the fulfillment of his or her fiduciary duties and obligations.
``(6) ANNUAL REVIEW.--At least annually, the board of directors of each enterprise shall review, with appropriate professional assistance, the requirements of laws, rules, regulations, and guidelines that are applicable to its activities and duties.
``(b) Committees of Boards of Directors.--
``(1) FREQUENCY OF MEETINGS.--Any committee of the board of directors of an enterprise shall meet with sufficient frequency to carry out its obligations and duties under applicable laws, rules, regulations, and guidelines.
``(2) REQUIRED COMMITTEES.--Each enterprise shall provide for the establishment, however styled, of the following committees of the board of directors:
``(A) Audit committee.
``(B) Compensation committee.
``(C) Nominating/corporate governance committee.


Such committees shall be in compliance with the charter, independence, composition, expertise, duties, responsibilities, and other requirements set forth under section 10A(m) of the Securities Exchange Act of 1934 (15 U.S.C. 78j-1(m)), with respect to the audit committee, and under rules issued by the New York Stock Exchange, as such rules may be amended from time to time.
``(c) Compensation.--
``(1) IN GENERAL.--The compensation of board members, executive officers, and employees of an enterprise--
``(A) shall not be in excess of that which is reasonable and appropriate;
``(B) shall be commensurate with the duties and responsibilities of such persons,
``(C) shall be consistent with the long-term goals of the enterprise;
``(D) shall not focus solely on earnings performance, but shall take into account risk management, operational stability and legal and regulatory compliance as well; and
``(E) shall be undertaken in a manner that complies with applicable laws, rules, and regulations.
``(2) REIMBURSEMENT.--If an enterprise is required to prepare an accounting restatement due to the material noncompliance of the enterprise, as a result of misconduct, with any financial reporting requirement under the securities laws, the chief executive officer and chief financial officer of the enterprise shall reimburse the enterprise as provided under section 304 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7243). This provision does not otherwise limit the authority of the Office
to employ remedies available to it under its enforcement authorities.
``(d) Code of Conduct and Ethics.--
``(1) IN GENERAL.--An enterprise shall establish and administer a written code of conduct and ethics that is reasonably designed to assure the ability of board members, executive officers, and employees of the enterprise to discharge their duties and responsibilities, on behalf of the enterprise, in an objective and impartial manner, and that includes standards required under section 406 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7264) and other applicable laws, rules, and regulations.

``(2) REVIEW.--Not less than once every three years, an enterprise shall review the adequacy of its code of conduct and ethics for consistency with practices appropriate to the enterprise and make any appropriate revisions to such code.
``(e) Conduct and Responsibilities of Board of Directors.--The board of directors of an enterprise shall be responsible for directing the conduct and affairs of the enterprise in furtherance of the safe and sound operation of the enterprise and shall remain reasonably informed of the condition, activities, and operations of the enterprise. The responsibilities of the board of directors shall include having in place adequate policies and procedures to assure its oversight of, among other
matters, the following:
``(1) Corporate strategy, major plans of action, risk policy, programs for legal and regulatory compliance and corporate performance, including prudent plans for growth and allocation of adequate resources to manage operations risk.
``(2) Hiring and retention of qualified executive officers and succession planning for such executive officers.
``(3) Compensation programs of the enterprise.
``(4) Integrity of accounting and financial reporting systems of the enterprise, including independent audits and systems of internal control.
``(5) Process and adequacy of reporting, disclosures, and communications to shareholders, investors, and potential investors.
``(6) Extensions of credit to board members and executive officers.
``(7) Responsiveness of executive officers in providing accurate and timely reports to Federal regulators and in addressing the supervisory concerns of Federal regulators in a timely and appropriate manner.
``(f) Prohibition of Extensions of Credit.--An enterprise may not directly or indirectly, including through any subsidiary, extend or maintain credit, arrange for the extension of credit, or renew an extension of credit, in the form of a personal loan to or for any board member or executive officer of the enterprise, as provided by section 13(k) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(k)).
``(g) Certification of Disclosures.--The chief executive officer and the chief financial officer of an enterprise shall review each quarterly report and annual report issued by the enterprise and such reports shall include certifications by such officers as required by section 302 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7241).
``(h) Change of Audit Partner.--An enterprise may not accept audit services from an external auditing firm if the lead or coordinating audit partner who has primary responsibility for the external audit of the enterprise, or the external audit partner who has responsibility for reviewing the external audit has performed audit services for the enterprise in each of the five previous fiscal years.
``(i) Compliance Program.--
``(1) REQUIREMENT.--Each enterprise shall establish and maintain a compliance program that is reasonably designed to assure that the enterprise complies with applicable laws, rules, regulations, and internal controls.
``(2) COMPLIANCE OFFICER.--The compliance program of an enterprise shall be headed by a compliance officer, however styled, who reports directly to the chief executive officer of the enterprise. The compliance officer shall report regularly to the board of directors or an appropriate committee of the board of directors on compliance with and the adequacy of current compliance policies and procedures of the enterprise, and shall recommend any adjustments to such policies and procedures
that the compliance officer considers necessary and appropriate.
``(j) Risk Management Program.--
``(1) REQUIREMENT.--Each enterprise shall establish and maintain a risk management program that is reasonably designed to manage the risks of the operations of the enterprise.
``(2) RISK MANAGEMENT OFFICER.--The risk management program of an enterprise shall be headed by a risk management officer, however styled, who reports directly to the chief executive officer of the enterprise. The risk management officer shall report regularly to the board of directors or an appropriate committee of the board of directors on compliance with and the adequacy of current risk management policies and procedures of the enterprise, and shall recommend any adjustments to such
policies and procedures that the risk management officer considers necessary and appropriate.
``(k) Compliance With Other Laws.--
``(1) DEREGISTERED OR UNREGISTERED COMMON STOCK.--If an enterprise deregisters or has not registered its common stock with the Securities and Exchange Commission under the Securities Exchange Act of 1934, the enterprise shall comply or continue to comply with sections 10A(m) and 13(k) of the Securities Exchange Act of 1934 (15 U.S.C. 78j-1(m), 78m(k)) and sections 302, 304, and 406 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7241, 7243, 7264), subject to such requirements as provided
by subsection (l) of this section.
``(2) REGISTERED COMMON STOCK.--An enterprise that has its common stock registered with the Securities and Exchange Commission shall maintain such registered status, unless it provides 60 days prior written notice to the Director stating its intent to deregister and its understanding that it will remain subject to the requirements of the sections of the Securities Exchange Act of 1934 and the Sarbanes-Oxley Act of 2002, subject to such requirements as provided by subsection (l) of this
section.
``(l) Other Matters.--The Director may from time to time establish standards, by regulation, order, or guideline, regarding such other corporate governance matters of the enterprises as the Director considers appropriate.
``(m) Modification of Standards.--In connection with standards of Federal or State law (including the Revised Model Corporation Act) or New York Stock Exchange rules that are made applicable to an enterprise by section 1710.10 of the Director's rules (12 C.F.R. 1710.10) and by subsections (a), (b), (g), (i), (j), and (k) of this section, the Director, in the Director's sole discretion, may modify the standards contained in this section or in part 1710 of the Director's rules (12 U.S.C.
Part 1710) in accordance with section 553 of title 5, United States Code, and upon written notice to the enterprise.''.
SEC. 812. REQUIRED REGISTRATION UNDER SECURITIES EXCHANGE ACT OF 1934.
The Housing and Community Development Act of 1992 is amended by adding after section 1322A, as added by the preceding provisions of this Act, the following:
``SEC. 1322B. REQUIRED REGISTRATION UNDER SECURITIES EXCHANGE ACT OF 1934.
``(a) In General.--Each enterprise shall register at least one class of the capital stock of such enterprise, and maintain such registration with the Securities and Exchange Commission, under the Securities Exchange Act of 1934.
``(b) Enterprises.--Each enterprise shall comply with sections 14 and 16 of the Securities Exchange Act of 1934.''.
SEC. 813. FINANCIAL INSTITUTIONS EXAMINATION COUNCIL.
The Federal Financial Institutions Examination Council Act of 1978 is amended--
(1) in section 1003 (12 U.S.C. 3302)--
(A) in paragraph (1), by inserting ``Director of the Office of Federal Housing Enterprise Oversight of the Department of Housing and Urban Development,'' after ``Supervision,''; and
(B) in paragraph (3), by striking ``or a credit union;'' and inserting ``a credit union, or an enterprise (as that term is defined in section 1303 of the Housing and Community Development Act of 1992 (12 U.S.C. 4502)).'';
(2) in section 1004(a) (12 U.S.C. 3303)--
(A) in paragraph (4), by striking the comma at the end and inserting a semicolon;
(B) by redesignating paragraphs (5) and (6) as paragraphs (6) and (7), respectively; and
(C) by inserting after paragraph (4) the following:
``(5) the Director of the Office of Federal Housing Enterprise Oversight of the Department of Housing and Urban Development; and''; and
(3) in section 1006(d) (12 U.S.C. 3305(d)), by striking ``and employees of the Federal Housing Finance Board''.
Subtitle B--Improvement of Mission Supervision


SEC. 821. 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 II--ADDITIONAL AUTHORITIES OF THE DIRECTOR'';
and
(2) by striking sections 1321 and 1322.
SEC. 822. 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. 4501 et seq.), as amended by this Act, 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 Director determines that the product is authorized under paragraph (2), (3), (4), or (5) of section 302(b) or section 304 of the Federal National Mortgage Association Charter Act (12 U.S.C. 1717(b), 1719);
``(2) in the case of a product of the Federal Home Loan Mortgage Corporation, the Director determines that the product is authorized under paragraph (1), (4), or (5) of section 305(a) of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a));
``(3) the product is in the public interest;
``(4) the product is consistent with the safety and soundness of the enterprise or the mortgage finance system; and
``(5) the product does not impair the stability or competitiveness of the mortgage finance system.
``(c) Procedure for Approval.--
``(1) SUBMISSION OF REQUEST.--An enterprise shall submit to the Director a written request for approval of a product that describes the product in such form as prescribed by order or regulation of the Director.
``(2) REQUEST FOR PUBLIC COMMENT.--Immediately upon receipt of a request for approval of a product, as required under paragraph (1), the Director shall publish notice of such request and of the period for public comment pursuant to paragraph (3) regarding the product, and a description of the product proposed by the request. The Director shall give interested parties the opportunity to respond in writing to the proposed product.
``(3) PUBLIC COMMENT PERIOD.--During the 30-day period beginning on the date of publication pursuant to paragraph (2) of a request for approval of a product, the Director shall receive public comments regarding the proposed product.
``(4) OFFERING OF PRODUCT.--
``(A) IN GENERAL.--Not later than 30 days after the close of the public comment period described in paragraph (3), the Director shall approve or deny the product, specifying the grounds for such decision in writing.
``(B) FAILURE TO ACT.--If the Director fails to act within the 30-day period described in subparagraph (A), then the enterprise may offer the product.
``(d) Expedited Review.--
``(1) DETERMINATION AND NOTICE.--If an enterprise determines that any new activity, service, undertaking or offering is excluded from the definition of a product under subsection (f), then the enterprise shall provide written notice to the Director prior to the commencement of such activity, service, undertaking, or offering.
``(2) DIRECTOR DETERMINATION OF APPLICABLE PROCEDURE.--Immediately upon receipt of any notice pursuant to paragraph (1), the Director shall make a determination under paragraph (3).
``(3) DETERMINATION AND TREATMENT AS A PRODUCT.--If the Director determines that any new activity, service, undertaking, or offering consists of, relates to, or involves a product--
``(A) the Director shall notify the enterprise of the determination;
``(B) the new activity, service, undertaking, or offering described in the notice under paragraph (1) shall be considered a product for the purposes of this section; and
``(C) the enterprise shall withdraw its request or submit a written request for approval of the product pursuant to subsection (c).
``(e) Conditional Approval.--The Director may conditionally approve the offering of any product by an enterprise, and may establish terms, conditions, or limitations with respect to such product with which the enterprise must comply in order to offer such product.
``(f) Definition of Product.--As used in this section, the term `product'--
``(1) all programs, products, and activities, offered by the enterprise in the marketplace; and
``(2) does not include--
``(A) the automated loan underwriting system of an enterprise in existence as of the date of enactment of the Federal Housing Enterprise Regulatory Reform Act of 2008, including any upgrade to the technology, operating system, or software to operate the underwriting system; or
``(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 create significant new exposure to risk for the enterprise or the holder of the mortgage.
``(g) No Limitation.--Nothing in this section shall be deemed to restrict--
``(1) the safety and soundness authority of the Director over all new and existing products or activities; or
``(2) the authority of the Director to review all new and existing products or activities to determine that such products or activities are consistent with the statutory mission of an enterprise.''.
SEC. 823. MONITORING AND ENFORCING COMPLIANCE WITH HOUSING GOALS.
Section 1336(a)(1) of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4566(a)(1)) is amended by striking ``established'' and all that follows through ``1334'' and inserting ``under this subpart''.
SEC. 824. ASSUMPTION BY DIRECTOR OF 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, 1324, 1326, 1331, 1332, 1333, 1334, and 1336;
(2) in section 1332 (12 U.S.C. 4562), by striking subsection (d);
(3) in section 1333 (12 U.S.C. 4563), by striking subsection (d);
(4) in section 1334 (12 U.S.C. 4564), by striking subsection (d); and
(5) by striking sections 1337, 1338, and 1349 (12 U.S.C. 4567, 4562 note, 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. 825. ADMINISTRATIVE AND JUDICIAL ENFORCEMENT PROCEEDINGS.
(a) Director Authority.--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--
(1) section 1341 (12 U.S.C. 4581);
(2) section 1342 (12 U.S.C. 4582);
(3) section 1343 (12 U.S.C. 4583);
(4) section 1344 (12 U.S.C. 4584);
(5) section 1345 (12 U.S.C. 4585);
(6) section 1346 (12 U.S.C. 4586);
(7) section 1347 (12 U.S.C. 4587); and
(8) section 1348 (12 U.S.C. 4588).
(b) Subpoena Enforcement by Director.--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''.
SEC. 826. CONFORMING LOAN LIMITS.
(a) Fannie Mae.--Section 302(b)(2) of the Federal National Mortgage Association Charter Act (12 U.S.C. 1717(b)(2)) is amended by striking ``The Corporation shall establish'' and all that follows through the end of the paragraph and inserting the following: ``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, or $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 under section 163 of the Federal Housing Enterprise Regulatory Reform Act of 2008, subject to the limitations in this paragraph. Such limitation shall be calculated with respect to the total original principal obligation of the mortgage, and not merely with respect to the interest purchased by the enterprise. Each adjustment
shall be made by adding to or subtracting from each such amount (as it may have been previously adjusted) a percentage thereof equal to the percentage increase or decrease, during the most recent 12-month or fourth quarter period ending before the time of determining
such annual adjustment, in the housing price index maintained by the Director of the Office of Federal Housing Enterprise Oversight (pursuant to section 1321 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4541)).''.
(b) Freddie Mac.--Section 305(a)(2) of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) is amended by striking ``The Corporation shall establish'' and all that follows through the end of the paragraph and inserting the following: ``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, or $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 under section 163 of the Federal Housing Enterprise Regulatory Reform Act of 2008, subject to the limitations in this paragraph. Such limitation shall be calculated with respect to the total original principal obligation of the mortgage and not merely with respect to the interest purchased by the enterprise. Each adjustment shall be made by adding
to or subtracting from each such amount (as it may have been previously adjusted) a percentage thereof equal to the percentage increase or decrease, during the most recent 12-month or fourth quarter period ending before the time of determining such
annual adjustment, in the housing price index maintained by the Director of the Office of Federal Housing Enterprise Oversight (pursuant to section 1321 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4541)).''.
(c) Housing Price Index.--The Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended by this Act, is amended by inserting before section 1323 the following:
``SEC. 1322. HOUSING PRICE INDEX.
``(a) Method of Assessment.--The Director shall establish, by regulation, and maintain a method of assessing the national average single-family housing price for use in adjusting the conforming loan limitations of the enterprises.
``(b) Considerations.--The Director shall take into consideration the monthly survey of all major lenders conducted by the Office to determine the national average single-family house price, the Housing Price Index maintained by the Office of Federal Housing Enterprise Oversight of the Department of Housing and Urban Development before the effective date under section 163 of the Federal Housing Enterprise Regulatory Reform Act of 2008, any appropriate housing price indexes of the Bureau
of the Census of the Department of Commerce, and any other indexes or measure that the Director considers appropriate.''.
SEC. 827. REPORTING OF MORTGAGE DATA; HOUSING GOALS.
(a) Reporting of Mortgage Data.--Section 1325 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4546), as so redesignated by this Act, 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:
``(d) Mortgage Data.--The Director shall, by regulation or order, provide that certain information relating to single family mortgage data of the enterprises shall be disclosed to the public in order to make available to the public the same data from the enterprises that is required of insured depository institutions under the Home Mortgage Disclosure Act.''.
(b) Definitions.--Section 1334 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4564), as amended by this Act, is amended by adding at the end the following:
``(d) Definitions.--For purposes of this section, the term `underserved area' means an urban census tract that has--
``(1) an average median family income of less than 80 percent of the area median family income; or
``(2) a minority population of at least 30 percent and a median family income of less than 100 percent of the area family median income.''.
SEC. 828. 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) by inserting ``and to carry out the duty under subsection (a)'' before ``, each enterprise shall'';
(B) in paragraph (3), by inserting ``and'' at the end;
(C) in paragraph (4), by striking ``; and'' and inserting a period; and
(D) by striking paragraph (5); and
(4) by redesignating subsection (a) as subsection (b);
(5) by inserting before subsection (b) (as so redesignated) the following:
``(a) Duty To Serve Underserved Markets.--
``(1) DUTY.--In accordance with the purposes of the enterprises under section 301(3) of the Federal National Mortgage Association Charter Act (12 U.S.C. 1716) and section 301(b)(3) of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1451 note) to undertake activities relating to mortgages on housing for very low-, low-, and moderate-income families, involving a reasonable economic return that may be less than the return earned on other activities, each enterprise shall have the
duty to increase the liquidity of mortgage investments and improve the distribution of investment capital available for mortgage financing for underserved markets.
``(2) UNDERSERVED MARKETS.--To meet its duty under paragraph (1), each enterprise shall lead the industry in developing loan products and flexible underwriting guidelines to facilitate a secondary market--
``(A) for mortgages on manufactured homes for very low-, low-, and moderate-income families;
``(B) to preserve housing affordable to very low-, low-, and moderate-income families, including housing projects subsidized under--
``(i) the project-based and tenant-based rental assistance programs under section 8 of the United States Housing Act of 1937;
``(ii) the program under section 236 of the National Housing Act;
``(iii) the below market interest rate mortgage program under section 221(d)(4) of the National Housing Act;
``(iv) the supportive housing for the elderly program under section 202 of the Housing Act of 1959;
``(v) the supportive housing program for persons with disabilities under section 811 of the Cranston-Gonzalez National Affordable Housing Act; and
``(vi) the rural rental housing program under section 515 of the Housing Act of 1949;
``(C) for mortgages on housing for very low-, low-, and moderate-income families in rural areas, and for mortgages for housing for any other underserved market for very low-, low-, and moderate-income families that the Director identifies as lacking adequate credit through conventional lending sources, which underserved markets may be identified by borrower type, market segment, or geographic area; and
``(D) for mortgages originated through State or local affordable or subsidized housing programs.''; and
(6) by adding at the end the following:
``(c) Evaluation and Reporting of Compliance.--
``(1) METHOD OF EVALUATION.--Not later than 6 months after the effective date of title I of the Federal Housing Enterprise Regulatory Reform Act of 2008, the Director shall establish a method 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.
``(2) ANNUAL EVALUATIONS.--Using the method established under paragraph (1), the Director shall, for each year, evaluate such compliance and rate the performance of each enterprise as to the 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).
``(3) SEPARATE EVALUATIONS.--In determining whether an enterprise has complied with the duty under subsection (a), the Director shall separately evaluate whether the enterprise has complied with such duty with respect to each of the underserved markets identified in subsection (a), taking into consideration--
``(A) the development of loan products and more flexible underwriting guidelines;
``(B) the extent of outreach to qualified loan sellers in each of such underserved markets; and
``(C) the volume of loans purchased in each of such underserved markets.''.
(b) Enforcement.--Section 1336(a) of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4566(a)) is amended--
(1) in paragraph (1), by inserting before the period ``and with the duty under section 1335A of each enterprise with respect to underserved markets''; and
(2) by adding at the end the following:
``(4) ENFORCEMENT OF DUTY TO PROVIDE MORTGAGE CREDIT TO UNDERSERVED MARKETS.--Compliance with the duty under section 1335(a) of each enterprise to serve underserved markets (as determined in accordance with section 1335(c)) shall be enforceable under this section to the same extent and under the same provisions that the housing goals established under sections 1332, 1333, and 1334 are enforceable. Such duty shall not be enforceable under any provision of this title (including subpart
C), other than this section, or under any provision of the Federal National Mortgage Association Charter Act or the Federal Home Loan Mortgage Corporation Act, as applicable.''.
SEC. 829. HOME PURCHASE GOAL.
The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is amended--
(1) by inserting after section 1334 the following:
``SEC. 1334A. HOME PURCHASE GOAL.
``(a) Establishment.--
``(1) IN GENERAL.--The Director shall establish an annual home purchase goal for the purchase by each enterprise of mortgage financing of owner-occupied single family dwelling units.
``(2) COMPONENTS.--The Director may, by regulation, establish components for the goal established under paragraph (1) to include any or all of the following:
``(A) First-time home buyers.
``(B) Low- and moderate-income home buyers.
``(C) Home buyers in central cities, rural areas, and other underserved areas.
``(D) Home buyers who obtain financing through State or local affordable or subsidized housing programs.
``(3) OTHER AUTHORITY.--The Director may, by regulation, establish the goal under paragraph (1) with components as percentages of enterprise business, or by such other means as necessary to increase the secondary market financing of mortgages by the enterprises for home purchases, consistent with the missions of the enterprises.
``(4) ENFORCEABILITY.--The components of the goal established by the Director under paragraph (1) shall be enforceable as goals under subpart C.
``(b) Factors To Be Considered.--In establishing the home purchase goal for an enterprise under this section, the Director shall consider--
``(1) national housing needs;
``(2) economic, housing, and demographic conditions;
``(3) the performance and effort of the enterprises toward achieving the home purchase goal in previous years;
``(4) the size of the conventional mortgage market serving home purchasers, relative to the size of the overall conventional mortgage market;
``(5) the ability of the enterprises to lead the industry in making mortgage credit available for home purchasers; and
``(6) the need to maintain the sound financial condition of the enterprises.
``(c) Transition.--In order to permit a transition to the establishment of the goal under this section, such goal shall not be effective or enforceable during the 1-year period beginning on the date of its establishment under subsection (a).
``(d) Implementation During Transition.--The Director shall establish, by rule, any requirements necessary to implement the transition provisions under subsection (c), after providing the enterprises with an opportunity to review and comment not less than 30 days before the issuance of such notice.
``SEC. 1334B HOUSING GOALS, ADDITIONS, MODIFICATIONS, AND RESCISSIONS.
``(a) In General.--
``(1) AUTHORITY TO ADDRESS GOALS.--The Director may, by regulation, establish additional annual housing goals, or modify or rescind existing housing goals, to address national housing needs consistent with the missions, of the enterprises and the authorizing statutes, for the purchase of mortgages, if the Director determines, by regulation, that the housing need is greatest.
``(2) METHODOLOGY.--The Director may issue a regulation which establishes or modifies any goal under this subsection--
``(A) as a percentage of the mortgage purchases of each enterprise;
``(B) as a dollar amount of each enterprise's mortgage purchases; or
``(C) by such other means as necessary to increase the enterprises' secondary market financing of mortgages addressed by the goal.
``(b) Factors To Be Considered.--In establishing any additional goals under this section, the Director shall consider--
``(1) national housing needs;
``(2) economic, housing, and demographic conditions;
``(3) the performance and effort of the enterprises toward achieving the need addressed by any such additional goal in previous years;
``(4) the size of the conventional mortgage market serving the need addressed by the goal, relative to the size of the overall conventional mortgage market;
``(5) the ability of the enterprises to lead the industry in making mortgage credit available to meet the need addressed by the goal; and
``(6) the need to maintain the sound financial condition of the enterprises.
``(c) Transition.--In order to permit a transition to the establishment of any goal under this section, such goal shall not be effective or enforceable during the 1-year period beginning on the date of its establishment under subsection (a).'';
(2) in section 1335 (12 U.S.C. 4565(a)), by striking ``meet the low-'' and all that follows through ``1334'' and inserting ``meet the goals under this subpart'';
(3) in section 1336 (12 U.S.C. 4566), by striking subsections (b) and (c) and inserting the following:
``(b) Notice and Preliminary Determination of Failure To Meet Goals.--
``(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.
``(3) CONSIDERATION OF INFORMATION AND FINAL DETERMINATION.--
``(A) IN GENERAL.--After the expiration of the response period under paragraph (2), or upon receipt of information provided during such period by the enterprise, whichever occurs earlier, the 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.
``(B) CONSIDERATIONS.--In making a final determination under subparagraph (A), the Director shall take into consideration any relevant information submitted by the enterprise during the response period.
``(C) NOTICE.--The Director shall provide written notice, including a response to any information submitted during the response period to the enterprise, the Committee on Banking, Housing, and Urban Affairs of the Senate, and the Committee on Financial Services of the House of Representatives, of--
``(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.
``(c) Cease and Desist, Civil Money Penalties, and Remedies Including Housing Plans.--
``(1) REQUIREMENT.--If the Director finds, pursuant to subsection (b), that there is a substantial probability that an enterprise will fail, or has actually failed, to meet any housing goal under this subpart, and that the achievement of the housing goal was or is feasible, the Director may require that the enterprise submit a housing plan under this subsection. If the Director makes such a finding and the enterprise refuses to submit such a plan, submits an unacceptable plan, fails to
comply with the plan, or the Director finds that the enterprise has failed to meet any housing goal under this subpart, in addition to requiring an enterprise to submit a housing plan, the Director may issue a cease and desist order in accordance with section 1341, impose civil money penalties in accordance with section 1345, or order other remedies as set forth in paragraph (7).
``(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) sufficiently specific to enable the Director to monitor compliance periodically.
``(3) DEADLINE FOR SUBMISSION.--The Director shall, by regulation, establish a deadline for an enterprise to comply with any remedial action or submit a housing plan to the Director, which may not be more than 45 days after the enterprise is provided notice. The regulations shall provide that the Director may extend the deadline to the extent that the Director determines necessary. Any extension of the deadline shall be in writing and for a time certain.
``(4) APPROVAL.--The Director shall review each submission by an enterprise, including a housing plan submitted under this subsection, and, not later than 30 days after submission, approve or disapprove the plan or other action. The Director may extend the period for approval or disapproval for a single additional 30-day period if the Director determines it necessary. The Director shall approve any plan that the Director determines is likely to succeed, and conforms with the Federal National
Mortgage Association Charter Act or the Federal Home Loan Mortgage Corporation Act (as applicable), this title, and any other applicable provision of law.
``(5) NOTICE OF APPROVAL AND DISAPPROVAL.--The Director shall provide written notice to any enterprise submitting a housing plan of the approval or disapproval of the plan (which shall include the reasons for any disapproval of the plan) and of any extension of the period for approval or disapproval.
``(6) RESUBMISSION.--If the initial housing plan submitted by an enterprise under this section is disapproved, the enterprise shall submit an amended plan acceptable to the Director not later than 30 days after such disapproval, or such longer period that the Director determines is in the public interest.
``(7) ADDITIONAL REMEDIES FOR FAILURE TO MEET GOALS.--In addition to ordering a housing plan under this section, issuing a cease and desist order under section 1341, and ordering civil money penalties under section 1345, the Director may seek other actions when an enterprise fails to meet a goal, including requesting that the Director exercise appropriate enforcement authority available to the Director under this title to prohibit the enterprise from entering into new activities, to freeze
any pending approval of new activities, and to order the enterprise to suspend activities pending its achievement of the goal.'';
(4) by striking section 1338 (12 U.S.C. 4568);
(5) by striking from the heading of subpart C ``of Housing Goals'';
(6) by striking section 1341 (12 U.S.C. 4581) and inserting 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 meet any housing goal established under subpart B, following a written notice and determination of such failure in accordance with section 1336;
``(2) the enterprise has failed to submit a report under section 1327, following a notice of such failure, an opportunity for comment by the enterprise, and a final determination by the Director;
``(3) the enterprise has failed to submit the information required under subsection (m) or (n) of section 309 of the Federal National Mortgage Association Charter Act, subsection (e) or (f) of section 307 of the Federal Home Loan Mortgage Corporation Act, or section 1337 of this title;
``(4) the enterprise has violated any provision of part 2 of this title or any order, rule, or regulation under part 2;
``(5) the enterprise has failed to submit a housing plan or perform its responsibilities under a remedial order that substantially complies with section 1336(c) within the applicable period; or
``(6) the enterprise has failed to comply with a housing plan under section 1336(c).
``(b) Procedure.--
``(1) NOTICE OF CHARGES.--Each notice of charges 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) comply with the goals;
``(B) submit a report under section 1327;
``(C) comply with any provision of part 2 of this title or any order, rule, or regulation under part 2;
``(D) submit a housing plan in compliance with section 1336(c);
``(E) comply with the housing plan in compliance with section 1336(c); or
``(F) provide the information required under subsection (m) or (n) of section 309 of the Federal National Mortgage Association Charter Act, or subsection (e) or (f) of section 307 of the Federal Home Loan Mortgage Corporation Act.
``(c) Effective Date.--An order under this section shall become effective upon the expiration of the 30-day period beginning on the date of service of the order upon the enterprise (except in the case of an order issued upon consent, which shall become effective at the time specified therein), and shall remain effective and enforceable as provided in the order, except to the extent that the order is stayed, modified, terminated, or set aside by action of the Director of or otherwise,
as provided in this subpart.''; and
(7) by striking section 1345 and inserting 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) meet any housing goal established under subpart B, following a written notice and determination of such failure in accordance with section 1336(b);
``(2) submit a report under section 1327, following a notice of such failure, an opportunity for comment by the enterprise, and a final determination by the Director;
``(3) submit the information required under subsection (m) or (n) of section 309 of the Federal National Mortgage Association Charter Act or subsection (e) or (f) of section 307 of the Federal Home Loan Mortgage Corporation Act;
``(4) comply with any provision of part 2 of this title or any order, rule, or regulation under part 2;
``(5) submit a housing plan or perform its responsibilities under a remedial order issued pursuant to section 1336(c) within the required period; or
``(6) comply with a housing plan for the enterprise under section 1336(c).
``(b) Amount of Penalty.--The amount of a penalty under this section, as determined by the Director, may not exceed--
``(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.
``(c) Procedures.--
``(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.
``(2) FACTORS IN DETERMINING AMOUNT OF PENALTY.--In determining the amount of a penalty under this section, the Director shall give consideration to factors including--
``(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.
``(d) Action To Collect Penalty.--If an enterprise fails to comply with an order by the Director imposing a civil money penalty under this section, after the order is no longer subject to review, as provided in sections 1342 and 1343, the Director may request the Attorney General of the United States to bring an action in the United States District Court for the District of Columbia to obtain a monetary judgment against the enterprise, and such other relief as may be available. The
monetary judgment may, in the court's discretion, include the attorneys' fees and other expenses incurred by the United States in connection with the action. In an action under this subsection, the validity and appropriateness of the order imposing the penalty shall not be subject to review.
``(e) Settlement by Director.--The Director may compromise, modify, or remit any civil money penalty which may be, or has been, imposed under this section.
``(f) Deposit of Penalties.--The Director shall deposit any civil money penalties collected under this section into the General Fund of the Treasury.''.
Subtitle C--Prompt Corrective Action


SEC. 831. CRITICAL CAPITAL LEVELS.
Section 1363 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4613) is amended--
(1) by redesignating paragraphs (1) through (3) as subparagraphs (A) through (C), respectively, and indenting appropriately;
(2) by striking ``shall be the sum of--'' and inserting the following: ``shall be--
``(1) the sum of--''; and
(3) in paragraph (1)(C), as so designated by this section, by striking the period at the end and inserting the following: ``; or
``(2) such other level as the Director shall establish, by regulation.''.
SEC. 832. CAPITAL CLASSIFICATIONS.
Section 1364 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4614) is amended--
(1) in subsection (a)--
(A) in paragraph (3)(A)--
(i) by striking clause (i); and
(ii) by redesignating clauses (ii) and (iii) as clauses (i) and (ii), respectively; and
(B) in paragraph (4)(A), by striking ``enterprise--'' and all that follows through ``(ii) does'' and inserting ``enterprise does'';
(2) by striking subsection (b) and inserting the following:
``(b) Discretionary Classification.--
``(1) GROUNDS FOR RECLASSIFICATION.--The Director may reclassify an enterprise under paragraph (2) if--
``(A) at any time, the Director determines in writing that an enterprise is engaging in conduct that could result in a rapid depletion of core capital, or that the value of the property subject to mortgages held or securitized by an enterprise, or the value of collateral pledged as security, has decreased significantly;
``(B) after notice and an opportunity for hearing, the Director determines that an enterprise is in an unsafe or unsound condition; or
``(C) pursuant to section 1371(b), the Director determines that an enterprise is engaging in an unsafe or unsound practice.
``(2) RECLASSIFICATION.--In addition to any other action authorized under this title, including the reclassification of an enterprise for any reason not specified in this subsection, if the Director takes any action described in paragraph (1), the Director may reclassify an enterprise--
``(A) as `undercapitalized', if the enterprise is otherwise classified as adequately capitalized;
``(B) as `significantly undercapitalized', if the enterprise is otherwise classified as undercapitalized; and
``(C) as `critically undercapitalized', if the enterprise is otherwise classified as significantly undercapitalized.''; and
(3) by striking subsection (d) and inserting the following:
``(d) Restriction on Capital Distributions.--
``(1) IN GENERAL.--An enterprise shall make no capital distribution if, after making the distribution, the enterprise would be undercapitalized.
``(2) EXCEPTION.--Notwithstanding paragraph (1), the Director may permit an enterprise 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 enterprise in at least an equivalent amount; and
``(B) will reduce the financial obligations of the enterprise or otherwise improve the financial condition of the enterprise.''.
SEC. 833. SUPERVISORY ACTIONS APPLICABLE TO UNDERCAPITALIZED ENTERPRISES.
Section 1365 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4615) is amended--
(1) 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:
``(1) REQUIRED MONITORING.--The Director shall--
``(A) closely monitor the condition of any undercapitalized enterprise;
``(B) closely monitor compliance with the capital restoration plan, restrictions, and requirements imposed on an undercapitalized enterprise under this section; and
``(C) periodically review the plan, restrictions, and requirements applicable to an undercapitalized enterprise to determine whether the plan, restrictions, and requirements are achieving the purpose of this section.''; and
(C) by adding at the end the following:
``(4) RESTRICTION OF ASSET GROWTH.--An undercapitalized enterprise shall not permit its average total assets during any calendar quarter to exceed its average total assets during the preceding calendar quarter, unless--
``(A) the Director has accepted the capital restoration plan of the enterprise;
``(B) any increase in total assets is consistent with the capital restoration plan; and
``(C) the ratio of tangible equity to assets of the enterprise increases during the calendar quarter at a rate sufficient to enable the enterprise to become adequately capitalized within a reasonable time.
``(5) PRIOR APPROVAL OF ACQUISITIONS AND NEW ACTIVITIES.--An undercapitalized enterprise shall not, directly or indirectly, acquire any interest in any entity or engage in any new activity, unless--
``(A) the Director has accepted the capital restoration plan of the enterprise, the enterprise 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.'';
(2) 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
(3) by striking subsection (c) and inserting the following:
``(c) Other Discretionary Safeguards.--The Director may take, with respect to an undercapitalized enterprise, any of the actions authorized to be taken under section 1366 with respect to a significantly undercapitalized enterprise, if the Director determines that such actions are necessary to carry out the purpose of this subtitle.''.
SEC. 834. SUPERVISORY ACTIONS APPLICABLE TO SIGNIFICANTLY UNDERCAPITALIZED ENTERPRISES.
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''; and
(2) 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:
``(5) IMPROVEMENT OF MANAGEMENT.--Take 1 or more of the following actions:
``(A) NEW ELECTION OF BOARD.--Order a new election for the board of directors of the enterprise.
``(B) DISMISSAL OF DIRECTORS OR EXECUTIVE OFFICERS.--Require the enterprise 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 enterprise 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 enterprise 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:
``(7) OTHER ACTION.--Require the enterprise to take any other action that the Director determines will better carry out the purpose of this section than any of the other actions specified in this subsection.''; and
(3) by striking subsection (c) and inserting the following:
``(c) Restriction on Compensation of Executive Officers.--An enterprise that is classified as significantly undercapitalized in accordance with section 1364 may not, without prior written approval by the Director--
``(1) pay any bonus to any executive officer; or
``(2) provide compensation to any executive officer at a rate exceeding 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 enterprise became significantly undercapitalized.''.
SEC. 835. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED ENTERPRISES.
(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 ENTERPRISES.
``(a) Appointment of the Office as Conservator or Receiver.--
``(1) IN GENERAL.--Notwithstanding any other provision of Federal or State law, the Director may appoint the Office as conservator or receiver for an enterprise in the manner provided under paragraph (2) or (4). All references to the conservator or receiver under this section are references to the Office acting as conservator or receiver.
``(2) DISCRETIONARY APPOINTMENT.--The Office may, at the discretion of the Director, be appointed conservator or receiver for the purpose of reorganizing, rehabilitating, or winding up the affairs of an enterprise.
``(3) GROUNDS FOR DISCRETIONARY APPOINTMENT OF CONSERVATOR OR RECEIVER.--The grounds for appointing conservator or receiver for any enterprise under paragraph (2) are as follows:
``(A) 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.
``(B) UNSAFE OR UNSOUND CONDITION.--An unsafe or unsound condition to transact business.
``(C) CEASE-AND-DESIST ORDERS.--Any willful violation of a cease-and-desist order that has become final.
``(D) CONCEALMENT.--Any concealment of the books, papers, records, or assets of the enterprise, or any refusal to submit the books, papers, records, or affairs of the enterprise, for inspection to any examiner or to any lawful agent of the Director.
``(E) INABILITY TO MEET OBLIGATIONS.--The enterprise is likely to be unable to pay its obligations or meet the demands of its creditors in the normal course of business.
``(F) LOSSES.--The enterprise has incurred or is likely to incur losses that will deplete all or substantially all of its capital, and there is no reasonable prospect for the enterprise to become adequately capitalized (as defined in section 1364(a)(1)).
``(G) VIOLATIONS OF LAW.--Any violation of any law or regulation, or any unsafe or unsound practice or condition that is likely to--
``(i) cause insolvency or substantial dissipation of assets or earnings; or
``(ii) weaken the condition of the enterprise.
``(H) CONSENT.--The enterprise, by resolution of its board of directors or its shareholders or members, consents to the appointment.
``(I) UNDERCAPITALIZATION.--The enterprise is undercapitalized or significantly undercapitalized (as defined in section 1364(a)(3)), and--
``(i) has no reasonable prospect of becoming adequately capitalized;
``(ii) fails to become adequately capitalized, as required by--
``(I) section 1365(a)(1) with respect to an enterprise; or
``(II) section 1366(a)(1) with respect to a significantly undercapitalized enterprise;
``(iii) fails to submit a capital restoration plan acceptable to the Office within the time prescribed under section 1369C; or
``(iv) materially fails to implement a capital restoration plan submitted and accepted under section 1369C.
``(J) CRITICAL UNDERCAPITALIZATION.--The enterprise is critically undercapitalized, as defined in section 1364(a)(4).
``(K) MONEY LAUNDERING.--The Attorney General notifies the Director in writing that the enterprise has been found guilty of a criminal offense under section 1956 or 1957 of title 18, United States Code, or section 5322 or 5324 of title 31, United States Code.
``(4) MANDATORY RECEIVERSHIP.--
``(A) IN GENERAL.--The Director shall appoint the Office as receiver for an enterprise if the Director determines, in writing, that--
``(i) the assets of the enterprise are, and during the preceding 30 calendar days have been, less than the obligations of the enterprise to its creditors and others; or
``(ii) the enterprise is not, and during the preceding 30 calendar days has not been, generally paying the debts of the enterprise (other than debts that are the subject of a bona fide dispute) as such debts become due.
``(B) PERIODIC DETERMINATION REQUIRED FOR CRITICALLY UNDERCAPITALIZED ENTERPRISE.--If an enterprise is critically undercapitalized, the Director shall make a determination, in writing, as to whether the enterprise meets the criteria specified in clause (i) or (ii) of subparagraph (A)--
``(i) not later than 30 calendar days after the enterprise initially becomes critically undercapitalized; and
``(ii) at least once during each succeeding 30-calendar day period.
``(C) DETERMINATION NOT REQUIRED IF RECEIVERSHIP ALREADY IN PLACE.--Subparagraph (B) does not apply with respect to an enterprise in any period during which the Office serves as receiver for the enterprise.
``(D) RECEIVERSHIP TERMINATES CONSERVATORSHIP.--The appointment of the Office as receiver of an enterprise under this section shall immediately terminate any conservatorship established for the enterprise under this title.
``(5) JUDICIAL REVIEW.--
``(A) IN GENERAL.--If the Office is appointed conservator or receiver under this section, the enterprise 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 enterprise is located, or in the United States District Court for the District of Columbia, for an order requiring the Office 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 Office to remove itself as such conservator or receiver.
``(6) DIRECTORS NOT LIABLE FOR ACQUIESCING IN APPOINTMENT OF CONSERVATOR OR RECEIVER.--The members of the board of directors of an enterprise shall not be liable to the shareholders or creditors of the enterprise for acquiescing in or consenting in good faith to the appointment of the Office as conservator or receiver for that enterprise.
``(7) OFFICE NOT SUBJECT TO ANY OTHER FEDERAL AGENCY.--When acting as conservator or receiver, the Office shall not be subject to the direction or supervision of any other agency of the United States or any State in the exercise of the rights, powers, and privileges of the Office.
``(b) Powers and Duties of the Office as Conservator or Receiver.--
``(1) RULEMAKING AUTHORITY OF THE OFFICE.--The Office may prescribe such regulations as the Office determines to be appropriate regarding the conduct of conservatorships or receiverships.
``(2) GENERAL POWERS.--
``(A) SUCCESSOR TO ENTERPRISE.--The Office shall, as conservator or receiver, and by operation of law, immediately succeed to--
``(i) all rights, titles, powers, and privileges of the enterprise, and of any stockholder, officer, or director of such enterprise with respect to the enterprise and the assets of the enterprise; and
``(ii) title to the books, records, and assets of any other legal custodian of such enterprise.
``(B) OPERATE THE ENTERPRISE.--The Office may, as conservator or receiver--
``(i) take over the assets of and operate the enterprise with all the powers of the shareholders, the directors, and the officers of the enterprise and conduct all business of the enterprise;
``(ii) collect all obligations and money due the enterprise;
``(iii) perform all functions of the enterprise in the name of the enterprise which are consistent with the appointment as conservator or receiver;
``(iv) preserve and conserve the assets and property of the enterprise; and
``(v) provide by contract for assistance in fulfilling any function, activity, action, or duty of the Office as conservator or receiver.
``(C) FUNCTIONS OF OFFICERS, DIRECTORS, AND SHAREHOLDERS OF AN ENTERPRISE.--The Office may, by regulation or order, provide for the exercise of any function by any stockholder, director, or officer of any enterprise for which the Office has been named conservator or receiver.
``(D) POWERS AS CONSERVATOR.--The Office may, as conservator, take such action as may be--
``(i) necessary to put the enterprise in a sound and solvent condition; and
``(ii) appropriate to carry on the business of the enterprise and preserve and conserve the assets and property of the enterprise.
``(E) ADDITIONAL POWERS AS RECEIVER.--In any case in which the Office is acting as receiver, the Office shall place the enterprise in liquidation and proceed to realize upon the assets of the enterprise in such manner as the Office deems appropriate, including through the sale of assets, the transfer of assets to a limited-life enterprise established under subsection (i), or the exercise of any other rights or privileges granted to the Office under this paragraph.
``(F) ORGANIZATION OF NEW ENTERPRISE.--The Office shall, as receiver for an enterprise, organize a successor enterprise that will operate pursuant to subsection (i).
``(G) TRANSFER OR SALE OF ASSETS AND LIABILITIES.--The Office may, as conservator or receiver, transfer or sell any asset or liability of the enterprise in default, and may do so without any approval, assignment, or consent with respect to such transfer or sale.
``(H) PAYMENT OF VALID OBLIGATIONS.--The Office, as conservator or receiver, shall, to the extent of proceeds realized from the performance of contracts or sale of the assets of an enterprise, pay all valid obligations of the enterprise that are due and payable at the time of the appointment of the Office as conservator or receiver, in accordance with the prescriptions and limitations of this section.
``(I) SUBPOENA AUTHORITY.--
``(i) IN GENERAL.--
``(I) OFFICE AUTHORITY.--The Office may, as conservator or receiver, and for purposes of carrying out any power, authority, or duty with respect to an enterprise (including determining any claim against the enterprise and determining and realizing upon any asset of any person in the course of collecting money due the enterprise), exercise any power established under section 1348.
``(II) APPLICABILITY OF LAW.--The provisions of section 1348 shall apply with respect to the exercise of any power under this subparagraph, in the same manner as such provisions apply under that section.
``(ii) SUBPOENA.--A subpoena or subpoena duces tecum may be issued under clause (i) only by, or with the written approval of, the Director, or the designee of the Director.
``(iii) RULE OF CONSTRUCTION.--This subsection shall not be construed to limit any rights that the Office, in any capacity, might otherwise have under section 1317 or 1379B.
``(J) INCIDENTAL POWERS.--The Office may, as conservator or receiver--
``(i) exercise all powers and authorities specifically granted to conservators or receivers, respectively, under this section, and such incidental powers as shall be necessary to carry out such powers; and
``(ii) take any action authorized by this section, which the Office determines is in the best interests of the enterprise or the Office.
``(K) OTHER PROVISIONS.--
``(i) SHAREHOLDERS AND CREDITORS OF FAILED ENTERPRISE.--Notwithstanding any other provision of law, the appointment of the Office as receiver for an enterprise 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 enterprise may have against the assets or charter of the enterprise or the Office
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 ENTERPRISE.--Notwithstanding any other provision of law, for purposes of this section, the charter of an enterprise shall not be considered an asset of the enterprise.
``(3) AUTHORITY OF RECEIVER TO DETERMINE CLAIMS.--
``(A) IN GENERAL.--The Office 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 enterprise, shall--
``(i) promptly publish a notice to the creditors of the enterprise to present their claims, together with proof, to the receiver by a date specified in the notice which shall be not less than 90 days after the date of publication of such notice; and
``(ii) republish such notice approximately 1 month and 2 months, respectively, after the date of publication under clause (i).
``(C) MAILING REQUIRED.--The receiver shall mail a notice similar to the notice published under subparagraph (B)(i) at the time of such publication to any creditor shown on the books of the enterprise--
``(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 enterprise, within 30 days after the discovery of such name and address.
``(4) RULEMAKING AUTHORITY RELATING TO DETERMINATION OF CLAIMS.--Subject to subsection (c), the Director may prescribe regulations regarding the allowance or disallowance of claims by the receiver and providing for administrative determination of claims and review of such determination.
``(5) PROCEDURES FOR DETERMINATION OF CLAIMS.--
``(A) DETERMINATION PERIOD.--
``(i) IN GENERAL.--Before the end of the 180-day period beginning on the date on which any claim against an enterprise is filed with the Office as receiver, the Office 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 Office.
``(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 enterprise;
``(II) in the claim filed by the claimant; or
``(III) in documents submitted in proof of the claim.
``(iv) CONTENTS OF NOTICE OF DISALLOWANCE.--If any claim filed under clause (i) is disallowed, the notice to the claimant shall contain--
``(I) a statement of each reason for the disallowance; and
``(II) the procedures available for obtaining agency review of the determination to disallow the claim or judicial determination of the claim.
``(B) ALLOWANCE OF PROVEN CLAIM.--The receiver shall allow any claim received on or before the date specified in the notice published under paragraph (3)(B)(i) by the receiver from any claimant which is proved to the satisfaction of the receiver.
``(C) DISALLOWANCE OF CLAIMS FILED AFTER FILING PERIOD.--Claims filed after the date specified in the notice published under paragraph (3)(B)(i), or the date specified under paragraph (3)(C), shall be disallowed and such disallowance shall be final.
``(D) AUTHORITY TO DISALLOW CLAIMS.--
``(i) IN GENERAL.--The receiver may disallow any portion of any claim by a creditor or claim of security, preference, or priority which is not proved to the satisfaction of the receiver.
``(ii) PAYMENTS TO LESS THAN FULLY SECURED CREDITORS.--In the case of a claim of a creditor against an enterprise which is secured by any property or other asset of such enterprise, 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 enterprise; 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 enterprise.
``(iii) EXCEPTIONS.--No provision of this paragraph shall apply with respect to--
``(I) any extension of credit from any Federal Reserve Bank or the United States Treasury; or
``(II) any security interest in the assets of the enterprise securing any such extension of credit.
``(E) NO JUDICIAL REVIEW OF DETERMINATION PURSUANT TO SUBPARAGRAPH (d).--No court may review the determination of the Office under subparagraph (D) to disallow a claim.
``(F) LEGAL EFFECT OF FILING.--
``(i) STATUTE OF LIMITATION TOLLED.--For purposes of any applicable statute of limitations, the filing of a claim with the receiver shall constitute a commencement of an action.
``(ii) NO PREJUDICE TO OTHER ACTIONS.--Subject to paragraph (10), the filing of a claim with the receiver shall not prejudice any right of the claimant to continue any action which was filed before the date of the appointment of the receiver, subject to the determination of claims by the receiver.
``(6) PROVISION FOR JUDICIAL DETERMINATION OF CLAIMS.--
``(A) IN GENERAL.--The claimant may file suit on a claim (or continue an action commenced before the appointment of the receiver) in the district or territorial court of the United States for the district within which the principal place of business of the enterprise 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 an enterprise for which the Office is receiver; or
``(ii) the date of any notice of disallowance of such claim pursuant to paragraph (5)(A)(i).
``(B) STATUTE OF LIMITATIONS.--A claim shall be deemed to be disallowed (other than any portion of such claim which was allowed by the receiver), and such disallowance shall be final, and the claimant shall have no further rights or remedies with respect to such claim, if the claimant fails, before the end of the 60-day period described under subparagraph (A), to file suit on such claim (or continue an action commenced before the appointment of the receiver).
``(7) REVIEW OF CLAIMS.--
``(A) OTHER REVIEW PROCEDURES.--
``(i) IN GENERAL.--The Office 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 Office shall strive for procedures which are expeditious, fair, independent, and low cost.
``(iii) VOLUNTARY BINDING OR NONBINDING PROCEDURES.--The Office 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 Office, must agree to the use of the process in a particular case.
``(B) CONSIDERATION OF INCENTIVES.--The Office shall seek to develop incentives for claimants to participate in the alternative dispute resolution process.
``(8) EXPEDITED DETERMINATION OF CLAIMS.--
``(A) ESTABLISHMENT REQUIRED.--The Office 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 enterprise for which the Office has been appointed receiver; and
``(ii) allege that irreparable injury will occur if the routine claims procedure is followed.
``(B) DETERMINATION PERIOD.--Before the end of the 90-day period beginning on the date on which any claim is filed in accordance with the procedures established under subparagraph (A), the Director shall--
``(i) determine--
``(I) whether to allow or disallow such claim; or
``(II) whether such claim should be determined pursuant to the procedures established under paragraph (5); and
``(ii) notify the claimant of the determination, and if the claim is disallowed, provide a statement of each reason for the disallowance and the procedure for obtaining Office review or judicial determination.
``(C) PERIOD FOR FILING OR RENEWING SUIT.--Any claimant who files a request for expedited relief shall be permitted to file a suit, or to continue a suit filed before the date of appointment of the receiver, seeking a determination of the rights of the claimant with respect to such security interest after the earlier of--
``(i) the end of the 90-day period beginning on the date of the filing of a request for expedited relief; or
``(ii) the date on which the Office denies the claim.
``(D) STATUTE OF LIMITATIONS.--If an action described under subparagraph (C) is not filed, or the motion to renew a previously filed suit is not made, before the end of the 30-day period beginning on the date on which such action or motion may be filed under subparagraph (B), the claim shall be deemed to be disallowed as of the end of such period (other than any portion of such claim which was allowed by the receiver), such disallowance shall be final, and the claimant shall have no further
rights or remedies with respect to such claim.
``(E) LEGAL EFFECT OF FILING.--
``(i) STATUTE OF LIMITATION TOLLED.--For purposes of any applicable statute of limitations, the filing of a claim with the receiver shall constitute a commencement of an action.
``(ii) NO PREJUDICE TO OTHER ACTIONS.--Subject to paragraph (10), the filing of a claim with the receiver shall not prejudice any right of the claimant to continue any action that was filed before the appointment of the receiver, subject to the determination of claims by the receiver.
``(9) PAYMENT OF CLAIMS.--
``(A) IN GENERAL.--The receiver may, in the discretion of the receiver, and to the extent that funds are available from the assets of the enterprise, 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 Office pursuant to a final determination pursuant to paragraph (7) or (8); or
``(iii) determined by the final judgment of any court of competent jurisdiction.
``(B) AGREEMENTS AGAINST THE INTEREST OF THE OFFICE.--No agreement that tends to diminish or defeat the interest of the Office in any asset acquired by the Office as receiver under this section shall be valid against the Office unless such agreement is in writing and executed by an authorized officer or representative of the enterprise.
``(C) PAYMENT OF DIVIDENDS ON CLAIMS.--The receiver may, in the sole discretion of the receiver, pay from the assets of the enterprise dividends on proved claims at any time, and no liability shall attach to the Office by reason of any such payment, for failure to pay dividends to a claimant whose claim is not proved at the time of any such payment.
``(D) RULEMAKING AUTHORITY OF THE DIRECTOR.--The Director may prescribe such rules, including definitions of terms, as the Director deems appropriate to establish a single uniform interest rate for, or to make payments of post-insolvency interest to creditors holding proven claims against the receivership estates of any enterprise, following satisfaction by the receiver of the principal amount of all creditor claims.
``(10) SUSPENSION OF LEGAL ACTIONS.--
``(A) IN GENERAL.--After the appointment of a conservator or receiver for an enterprise, the conservator or receiver may, in any judicial action or proceeding to which such enterprise is or becomes a party, request a stay for a period not to exceed--
``(i) 45 days, in the case of any conservator; and
``(ii) 90 days, in the case of any receiver.
``(B) GRANT OF STAY BY ALL COURTS REQUIRED.--Upon receipt of a request by the conservator or receiver under subparagraph (A) for a stay of any judicial action or proceeding in any court with jurisdiction of such action or proceeding, the court shall grant such stay as to all parties.
``(11) ADDITIONAL RIGHTS AND DUTIES.--
``(A) PRIOR FINAL ADJUDICATION.--The Office shall abide by any final unappealable judgment of any court of competent jurisdiction which was rendered before the appointment of the Office as conservator or receiver.
``(B) RIGHTS AND REMEDIES OF CONSERVATOR OR RECEIVER.--In the event of any appealable judgment, the Office as conservator or receiver--
``(i) shall have all of the rights and remedies available to the enterprise (before the appointment of such conservator or receiver) and the Office, including removal to Federal court and all appellate rights; and
``(ii) shall not be required to post any bond in order to pursue such remedies.
``(C) NO ATTACHMENT OR EXECUTION.--No attachment or execution may issue by any court upon assets in the possession of the receiver, or upon the charter, of an enterprise for which the Office has been appointed receiver.
``(D) LIMITATION ON JUDICIAL REVIEW.--Except as otherwise provided in this subsection, no court shall have jurisdiction over--
``(i) any claim or action for payment from, or any action seeking a determination of rights with respect to, the assets or charter of any enterprise for which the Office has been appointed receiver; or
``(ii) any claim relating to any act or omission of such enterprise or the Office as receiver.
``(E) DISPOSITION OF ASSETS.--In exercising any right, power, privilege, or authority as conservator or receiver in connection with any sale or disposition of assets of an enterprise for which the Office has been appointed conservator or receiver, the Office shall conduct its operations in a manner which--
``(i) maximizes the net present value return from the sale or disposition of such assets;
``(ii) minimizes the amount of any loss realized in the resolution of cases; and
``(iii) ensures adequate competition and fair and consistent treatment of offerors.
``(12) STATUTE OF LIMITATIONS FOR ACTIONS BROUGHT BY CONSERVATOR OR RECEIVER.--
``(A) IN GENERAL.--Notwithstanding any provision of any contract, the applicable statute of limitations with regard to any action brought by the Office as conservator or receiver shall be--
``(i) in the case of any contract claim, the longer of--
``(I) the 6-year period beginning on the date on which the claim accrues; or
``(II) the period applicable under State law; and
``(ii) in the case of any tort claim, the longer of--
``(I) the 3-year period beginning on the date on which the claim accrues; or
``(II) the period applicable under State law.
``(B) DETERMINATION OF THE DATE ON WHICH A CLAIM ACCRUES.--For purposes of subparagraph (A), the date on which the statute of limitations begins to run on any claim described in such subparagraph shall be the later of--
``(i) the date of the appointment of the Office as conservator or receiver; or
``(ii) the date on which the cause of action accrues.
``(13) REVIVAL OF EXPIRED STATE CAUSES OF ACTION.--
``(A) IN GENERAL.--In the case of any tort claim described under subparagraph (B) for which the statute of limitations applicable under State law with respect to such claim has expired not more than 5 years before the appointment of the Office as conservator or receiver, the Office 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 subparagraph (A) is a claim arising from fraud, intentional misconduct resulting in unjust enrichment, or intentional misconduct resulting in substantial loss to the enterprise.
``(14) ACCOUNTING AND RECORDKEEPING REQUIREMENTS.--
``(A) IN GENERAL.--The Office as conservator or receiver shall, consistent with the accounting and reporting practices and procedures established by the Office, maintain a full accounting of each conservatorship and receivership or other disposition of an enterprise in default.
``(B) ANNUAL ACCOUNTING OR REPORT.--With respect to each conservatorship or receivership, the Office 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 Office upon request to any shareholder of an enterprise 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 Office may destroy any records of such enterprise which the Office, in the discretion of the Office, determines to be unnecessary, unless directed not to do so by a court of competent jurisdiction or governmental agency, or prohibited by law.
``(15) FRAUDULENT TRANSFERS.--
``(A) IN GENERAL.--The Office, as conservator or receiver, may avoid a transfer of any interest of an enterprise-affiliated party, or any person determined by the conservator or receiver to be a debtor of the enterprise, in property, or any obligation incurred by such party or person, that was made within 5 years of the date on which the Office 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 enterprise, the Office, 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 enterprise, 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 enterprise-affiliated party or person for whose benefit such transfer was made; or
``(ii) any immediate or mediate transferee of any such initial transferee.
``(C) RIGHTS OF TRANSFEREE OR OBLIGEE.--The conservator or receiver may not recover under subparagraph (B) from--
``(i) any transferee that takes for value, including satisfaction or securing of a present or antecedent debt, in good faith; or
``(ii) any immediate or mediate good faith transferee of such transferee.
``(D) RIGHTS UNDER THIS PARAGRAPH.--The rights under this paragraph of the conservator or receiver described under subparagraph (A) shall be superior to any rights of a trustee or any other party (other than any party which is a Federal agency) under title 11, United States Code.
``(16) ATTACHMENT OF ASSETS AND OTHER INJUNCTIVE RELIEF.--Subject to paragraph (17), any court of competent jurisdiction may, at the request of the conservator or receiver, issue an order in accordance with Rule 65 of the Federal Rules of Civil Procedure, including an order placing the assets of any person designated by the conservator or receiver under the control of the court, and appointing a trustee to hold such assets.
``(17) STANDARDS OF PROOF.--Rule 65 of the Federal Rules of Civil Procedure shall apply with respect to any proceeding under paragraph (16) without regard to the requirement of such rule that the applicant show that the injury, loss, or damage is irreparable and immediate.
``(18) TREATMENT OF CLAIMS ARISING FROM BREACH OF CONTRACTS EXECUTED BY THE CONSERVATOR OR RECEIVER.--
``(A) IN GENERAL.--Notwithstanding any other provision of this subsection, any final and unappealable judgment for monetary damages entered against the conservator or receiver for the breach of an agreement executed or approved in writing by the conservator or receiver after the date of its appointment, shall be paid as an administrative expense of the conservator or receiver.
``(B) NO LIMITATION OF POWER.--Nothing in this paragraph shall be construed to limit the power of the conservator or receiver to exercise any rights under contract or law, including to terminate, breach, cancel, or otherwise discontinue such agreement.
``(19) GENERAL EXCEPTIONS.--
``(A) LIMITATIONS.--The rights of the conservator or receiver appointed under this section shall be subject to the limitations on the powers of a receiver under sections 402 through 407 of the Federal Deposit Insurance Corporation Improvement Act of 1991 (12 U.S.C. 4402 through 4407).
``(B) MORTGAGES HELD IN TRUST.--
``(i) IN GENERAL.--Any mortgage, pool of mortgages, or interest in a pool of mortgages held in trust, custodial, or agency capacity by an enterprise for the benefit of any person other than the enterprise shall not be available to satisfy the claims of creditors generally.
``(ii) HOLDING OF MORTGAGES.--Any mortgage, pool of mortgages, or interest in a pool of mortgages described 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 in the regulations of the Director.
``(c) Priority of Expenses and Unsecured Claims.--
``(1) IN GENERAL.--Unsecured claims against an enterprise, 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 enterprise (which is not a liability described under subparagraph (C) or (D).
``(C) Any obligation subordinated to general creditors (which is not an obligation described under subparagraph (D)).
``(D) Any obligation to shareholders or members arising as a result of their status as shareholder or members.
``(2) CREDITORS SIMILARLY SITUATED.--All creditors that are similarly situated under paragraph (1) shall be treated in a similar manner, except that the receiver may take any action (including making payments) that does not comply with this subsection, if--
``(A) the Director determines that such action is necessary to maximize the value of the assets of the enterprise, to maximize the present value return from the sale or other disposition of the assets of the enterprise, or to minimize the amount of any loss realized upon the sale or other disposition of the assets of the enterprise assets; and
``(B) all creditors that are similarly situated under paragraph (1) receive not less than the amount provided in subsection (e)(2).
``(3) DEFINITION.--As used in this subsection, the term `administrative expenses of the receiver' includes--
``(A) the actual, necessary costs and expenses incurred by the receiver in preserving the assets of a failed enterprise or liquidating or otherwise resolving the affairs of a failed enterprise; and
``(B) any obligations that the receiver determines are necessary and appropriate to facilitate the smooth and orderly liquidation or other resolution of the enterprise.
``(d) Provisions Relating to Contracts Entered Into Before Appointment of Conservator or Receiver.--
``(1) AUTHORITY TO REPUDIATE CONTRACTS.--In addition to any other rights a conservator or receiver may have, the conservator or receiver for any enterprise may disaffirm or repudiate any contract or lease--
``(A) to which such enterprise 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 enterprise.
``(2) TIMING OF REPUDIATION.--The conservator or receiver shall determine whether or not to exercise the rights of repudiation under this subsection within a reasonable period following such appointment.
``(3) CLAIMS FOR DAMAGES FOR REPUDIATION.--
``(A) IN GENERAL.--Except as otherwise provided under subparagraph (C) and paragraphs (4), (5), and (6), the liability of the conservator or receiver for the disaffirmance or repudiation of any contract pursuant to paragraph (1) shall be--
``(i) limited to actual direct compensatory damages; and
``(ii) determined as of--
``(I) the date of the appointment of the conservator or receiver; or
``(II) in the case of any contract or agreement referred to in paragraph (8), the date of the disaffirmance or repudiation of such contract or agreement.
``(B) NO LIABILITY FOR OTHER DAMAGES.--For purposes of subparagraph (A), the term `actual direct compensatory damages' shall not include--
``(i) punitive or exemplary damages;
``(ii) damages for lost profits or opportunity; or
``(iii) damages for pain and suffering.
``(C) MEASURE OF DAMAGES FOR REPUDIATION OF FINANCIAL CONTRACTS.--In the case of any qualified financial contract or agreement to which paragraph (8) applies, compensatory damages shall be--
``(i) deemed to include normal and reasonable costs of cover or other reasonable measures of damages utilized in the industries for such contract and agreement claims; and
``(ii) paid in accordance with this subsection and subsection (e), except as otherwise specifically provided in this section.
``(4) LEASES UNDER WHICH THE ENTERPRISE IS THE LESSEE.--
``(A) IN GENERAL.--If the conservator or receiver disaffirms or repudiates a lease under which the enterprise was the lessee, the conservator or receiver shall not be liable for any damages (other than damages determined under subparagraph (B)) for the disaffirmance or repudiation of such lease.
``(B) PAYMENTS OF RENT.--Notwithstanding subparagraph (A), the lessor under a lease to which that subparagraph applies shall--
``(i) be entitled to the contractual rent accruing before the later of the date on which--
``(I) the notice of disaffirmance or repudiation is mailed; or
``(II) the disaffirmance or repudiation becomes effective, unless the lessor is in default or breach of the terms of the lease;
``(ii) have no claim for damages under any acceleration clause or other penalty provision in the lease; and
``(iii) have a claim for any unpaid rent, subject to all appropriate offsets and defenses, due as of the date of the appointment, which shall be paid in accordance with this subsection and subsection (e).
``(5) LEASES UNDER WHICH THE ENTERPRISE IS THE LESSOR.--
``(A) IN GENERAL.--If the conservator or receiver repudiates an unexpired written lease of real property of the enterprise under which the enterprise is the lessor and the lessee is not, as of the date of such repudiation, in default, the lessee under such lease may either--
``(i) treat the lease as terminated by such repudiation; or
``(ii) remain in possession of the leasehold interest for the balance of the term of the lease, unless the lessee defaults under the terms of the lease after the date of such repudiation.
``(B) PROVISIONS APPLICABLE TO LESSEE REMAINING IN POSSESSION.--If any lessee under a lease described under subparagraph (A) remains in possession of a leasehold interest under clause (ii) of subparagraph (A)--
``(i) the lessee--
``(I) shall continue to pay the contractual rent pursuant to the terms of the lease after the date of the repudiation of such lease; and
``(II) may offset against any rent payment which accrues after the date of the repudiation of the lease, and any damages which accrue after such date due to the nonperformance of any obligation of the enterprise under the lease after such date; and
``(ii) the conservator or receiver shall not be liable to the lessee for any damages arising after such date as a result of the repudiation, other than the amount of any offset allowed under clause (i)(II).
``(6) CONTRACTS FOR THE SALE OF REAL PROPERTY.--
``(A) IN GENERAL.--If the conservator or receiver repudiates any contract for the sale of real property and the purchaser of such real property under such contract is in possession, and is not, as of the date of such repudiation, in default, such purchaser may either--
``(i) treat the contract as terminated by such repudiation; or
``(ii) remain in possession of such real property.
``(B) PROVISIONS APPLICABLE TO PURCHASER REMAINING IN POSSESSION.--If any purchaser of real property under any contract described under subparagraph (A) remains in possession of such property under clause (ii) of subparagraph (A)--
``(i) the purchaser--
``(I) shall continue to make all payments due under the contract after the date of the repudiation of the contract; and
``(II) may offset against any such payments any damages which accrue after such date due to the nonperformance (after such date) of any obligation of the enterprise under the contract; and
``(ii) the conservator or receiver shall--
``(I) not be liable to the purchaser for any damages arising after such date as a result of the repudiation, other than the amount of any offset allowed under clause (i)(II);
``(II) deliver title to the purchaser in accordance with the provisions of the contract; and
``(III) have no obligation under the contract other than the performance required under subclause (II).
``(C) ASSIGNMENT AND SALE ALLOWED.--
``(i) IN GENERAL.--No provision of this paragraph shall be construed as limiting the right of the conservator or receiver to assign the contract described under subparagraph (A), and sell the property subject to the contract and the provisions of this paragraph.
``(ii) NO LIABILITY AFTER ASSIGNMENT AND SALE.--If an assignment and sale described under clause (i) is consummated, the conservator or receiver shall have no further liability under the contract described under subparagraph (A), or with respect to the real property which was the subject of such contract.
``(7) SERVICE CONTRACTS.--
``(A) SERVICES PERFORMED BEFORE APPOINTMENT.--In the case of any contract for services between any person and any enterprise for which the Office has been appointed conservator or receiver, any claim of such person for services performed before the appointment of the conservator or receiver shall be--
``(i) a claim to be paid in accordance with subsections (b) and (e); and
``(ii) deemed to have arisen as of the date on which the conservator or receiver was appointed.
``(B) SERVICES PERFORMED AFTER APPOINTMENT AND PRIOR TO REPUDIATION.--If, in the case of any contract for services described under subparagraph (A), the conservator or receiver accepts performance by the other person before the conservator or receiver makes any determination to exercise the right of repudiation of such contract under this section--
``(i) the other party shall be paid under the terms of the contract for the services performed; and
``(ii) the amount of such payment shall be treated as an administrative expense of the conservatorship or receivership.
``(C) ACCEPTANCE OF PERFORMANCE NO BAR TO SUBSEQUENT REPUDIATION.--The acceptance by the conservator or receiver of services referred to under subparagraph (B) in connection with a contract described in such subparagraph shall not affect the right of the conservator or receiver to repudiate such contract under this section at any time after such performance.
``(8) CERTAIN QUALIFIED FINANCIAL CONTRACTS.--
``(A) RIGHTS OF PARTIES TO CONTRACTS.--Subject to paragraphs (9) and (10), and notwithstanding any other provision of this title (other than subsection (b)(9)(B) of this section), any other Federal law, or the law of any State, no person shall be stayed or prohibited from exercising--
``(i) any right of that person to cause the termination, liquidation, or acceleration of any qualified financial contract with an enterprise that arises upon the appointment of the Office as receiver for such enterprise at any time after such appointment;
``(ii) any right under any security agreement or arrangement or other credit enhancement relating to one or more qualified financial contracts; or
``(iii) any right to offset or net out any termination value, payment amount, or other transfer obligation arising under or in connection with 1 or more contracts and agreements described in clause (i), including any master agreement for such contracts or agreements.
``(B) APPLICABILITY OF OTHER PROVISIONS.--Subsection (b)(10) shall apply in the case of any judicial action or proceeding brought against any receiver referred to under subparagraph (A), or the enterprise for which such receiver was appointed, by any party to a contract or agreement described under subparagraph (A)(i) with such enterprise.
``(C) CERTAIN TRANSFERS NOT AVOIDABLE.--
``(i) IN GENERAL.--Notwithstanding paragraph (11), or any other provision of Federal or State law relating to the avoidance of preferential or fraudulent transfers, the Office, whether acting as such or as conservator or receiver of an enterprise, may not avoid any transfer of money or other property in connection with any qualified financial contract with an enterprise.
``(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 an enterprise if the Office determines that the transferee had actual intent to hinder, delay, or defraud such enterprise, the creditors of such enterprise, or any conservator or receiver appointed for such enterprise.
``(D) CERTAIN CONTRACTS AND AGREEMENTS DEFINED.--In this subsection the following definitions shall apply:
``(i) QUALIFIED FINANCIAL CONTRACT.--The term `qualified financial contract' means any securities contract, commodity contract, forward contract, repurchase agreement, swap agreement, and any similar agreement that the Office 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 Office determines by regulation, resolution, or order to include any such agreement within the meaning of that term;
``(III) means any option entered into on a national securities exchange relating to foreign currencies;
``(IV) means the guarantee by or to any securities clearing agency of any settlement of cash, securities, certificates of deposit, mortgage loans or interests therein, group or index of securities, certificates of deposit, or mortgage loans or interests therein (including any interest therein or based on the value thereof) or option on any of the foregoing, including any option to purchase or sell any such security, certificate of deposit, mortgage loan, interest, group or index, or option;
``(V) means any margin loan;
``(VI) means any other agreement or transaction that is similar to any agreement or transaction referred to in this clause;
``(VII) means any combination of the agreements or transactions referred to in this clause;
``(VIII) means any option to enter into any agreement or transaction referred to in this clause;
``(IX) means a master agreement that provides for an agreement or transaction referred to in subclause (I), (III), (IV), (V), (VI), (VII), or (VIII), together with all supplements to any such master agreement, without regard to whether the master agreement provides for an agreement or transaction that is not a securities contract under this clause, except that the master agreement shall be considered to be a securities contract under this clause only with respect to each agreement or transaction
under the master agreement that is referred to in subclause (I), (III), (IV), (V), (VI), (VII), or (VIII); and
``(X) means any security agreement or arrangement or other credit enhancement related to any agreement or transaction referred to in this clause, including any guarantee or reimbursement obligation in connection with any agreement or transaction referred to in this clause.
``(iii) COMMODITY CONTRACT.--The term `commodity contract' means--
``(I) with respect to a futures commission merchant, a contract for the purchase or sale of a commodity for future delivery on, or subject to the rules of, a contract market or board of trade;
``(II) with respect to a foreign futures commission merchant, a foreign future;
``(III) with respect to a leverage transaction merchant, a leverage transaction;
``(IV) with respect to a clearing organization, a contract for the purchase or sale of a commodity for future delivery on, or subject to the rules of, a contract market or board of trade that is cleared by such clearing organization, or commodity option traded on, or subject to the rules of, a contract market or board of trade that is cleared by such clearing organization;
``(V) with respect to a commodity options dealer, a commodity option;
``(VI) any other agreement or transaction that is similar to any agreement or transaction referred to in this clause;
``(VII) any combination of the agreements or transactions referred to in this clause;
``(VIII) any option to enter into any agreement or transaction referred to in this clause;
``(IX) a master agreement that provides for an agreement or transaction referred to in subclause (I), (II), (III), (IV), (V), (VI), (VII), or (VIII), together with all supplements to any such master agreement, without regard to whether the master agreement provides for an agreement or transaction that is not a commodity contract under this clause, except that the master agreement shall be considered to be a commodity contract under this clause only with respect to each agreement or transaction
under the master agreement that is referred to in subclause (I), (II), (III), (IV), (V), (VI), (VII), or (VIII); or
``(X) any security agreement or arrangement or other credit enhancement related to any agreement or transaction referred to in this clause, including any guarantee or reimbursement obligation in connection with any agreement or transaction referred to in this clause.
``(iv) FORWARD CONTRACT.--The term `forward contract' means--
``(I) a contract (other than a commodity contract) for the purchase, sale, or transfer of a commodity or any similar good, article, service, right, or interest which is presently or in the future becomes the subject of dealing in the forward contract trade, or product or byproduct thereof, with a maturity date more than 2 days after the date on which the contract is entered into, including a repurchase transaction, reverse repurchase transaction, consignment, lease, swap, hedge transaction,
deposit, loan, option, allocated transaction, unallocated transaction, or any other similar agreement;
``(II) any combination of agreements or transactions referred to in subclauses (I) and (III);
``(III) any option to enter into any agreement or transaction referred to in subclause (I) or (II);
``(IV) a master agreement that provides for an agreement or transaction referred to in subclauses (I), (II), or (III), together with all supplements to any such master agreement, without regard to whether the master agreement provides for an agreement or transaction that is not a forward contract under this clause, except that the master agreement shall be considered to be a forward contract under this clause only with respect to each agreement or transaction under the master agreement that
is referred to in subclause (I), (II), or (III); or
``(V) any security agreement or arrangement or other credit enhancement related to any agreement or transaction referred to in subclause (I), (II), (III), or (IV), including any guarantee or reimbursement obligation in connection with any agreement or transaction referred to in any such subclause.
``(v) REPURCHASE AGREEMENT.--The term `repurchase agreement' (including a reverse repurchase agreement)--
``(I) means an agreement, including related terms, which provides for the transfer of one or more certificates of deposit, mortgage-related securities (as that 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 Office determines by regulation, resolution, or order to include any such participation within the meaning of such term;
``(III) means any combination of agreements or transactions referred to in subclauses (I) and (IV);
``(IV) means any option to enter into any agreement or transaction referred to in subclause (I) or (III);
``(V) means a master agreement that provides for an agreement or transaction referred to in subclause (I), (III), or (IV), together with all supplements to any such master agreement, without regard to whether the master agreement provides for an agreement or transaction that is not a repurchase agreement under this clause, except that the master agreement shall be considered to be a repurchase agreement under this subclause only with respect to each agreement or transaction under the master
agreement that is referred to in subclause (I), (III), or (IV); and
``(VI) means any security agreement or arrangement or other credit enhancement related to any agreement or transaction referred to in subclause (I), (III), (IV), or (V), including any guarantee or reimbursement obligation in connection with any agreement or transaction referred to in any such subclause.
``(vi) SWAP AGREEMENT.--The term `swap agreement' means--
``(I) any agreement, including the terms and conditions incorporated by reference in any such agreement, which is an interest rate swap, option, future, or forward agreement, including a rate floor, rate cap, rate collar, cross-currency rate swap, and basis swap; a spot, same day-tomorrow, tomorrow-next, forward, or other foreign exchange or precious metals agreement; a currency swap, option, future, or forward agreement; an equity index or equity swap, option, future, or forward agreement;
a debt index or debt swap, option, future, or forward agreement; a total return, credit spread or credit swap, option, future, or forward agreement; a commodity index or commodity swap, option, future, or forward agreement; or a weather swap, weather derivative, or weather option;
``(II) any agreement or transaction that is similar to any other agreement or transaction referred to in this clause and that is of a type that has been, is presently, or in the future becomes, the subject of recurrent dealings in the swap markets (including terms and conditions incorporated by reference in such agreement) and that is a forward, swap, future, or option on one or more rates, currencies, commodities, equity securities or other equity instruments, debt securities or other debt
instruments, quantitative measures associated with an occurrence, extent of an occurrence, or contingency associated with a financial, commercial, or economic consequence, or economic or financial indices or measures of economic or financial risk or value;
``(III) any combination of agreements or transactions referred to in this clause;
``(IV) any option to enter into any agreement or transaction referred to in this clause;
``(V) a master agreement that provides for an agreement or transaction referred to in subclause (I), (II), (III), or (IV), together with all supplements to any such master agreement, without regard to whether the master agreement contains an agreement or transaction that is not a swap agreement under this clause, except that the master agreement shall be considered to be a swap agreement under this clause only with respect to each agreement or transaction under the master agreement that is referred
to in subclause (I), (II), (III), or (IV); and
``(VI) any security agreement or arrangement or other credit enhancement related to any agreements or transactions referred to in subclause (I), (II), (III), (IV), or (V), including any guarantee or reimbursement obligation in connection with any agreement or transaction referred to in any such subclause.
``(vii) TREATMENT OF MASTER AGREEMENT AS ONE AGREEMENT.--Any master agreement for any contract or agreement described in any preceding clause of this subparagraph (or any master agreement for such master agreement or agreements), together with all supplements to such master agreement, shall be treated as a single agreement and a single qualified financial contract. If a master agreement contains provisions relating to agreements or transactions that are not themselves qualified financial
contracts, the master agreement shall be deemed to be a qualified financial contract only with respect to those transactions that are themselves qualified financial contracts.
``(viii) TRANSFER.--The term `transfer' means every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with property or with an interest in property, including retention of title as a security interest and foreclosure of the equity of redemption of the enterprise.
``(E) CERTAIN PROTECTIONS IN EVENT OF APPOINTMENT OF CONSERVATOR.--Notwithstanding any other provision of this section, any other Federal law, or the law of any State (other than paragraph (10) of this subsection and subsection (b)(9)(B)), no person shall be stayed or prohibited from exercising--
``(i) any right such person has to cause the termination, liquidation, or acceleration of any qualified financial contract with an enterprise in a conservatorship based upon a default under such financial contract which is enforceable under applicable noninsolvency law;
``(ii) any right under any security agreement or arrangement or other credit enhancement relating to 1 or more such qualified financial contracts; or
``(iii) any right to offset or net out any termination values, payment amounts, or other transfer obligations arising under or in connection with such qualified financial contracts.
``(F) CLARIFICATION.--No provision of law shall be construed as limiting the right or power of the Office, or authorizing any court or agency to limit or delay in any manner, the right or power of the Office to transfer any qualified financial contract in accordance with paragraphs (9) and (10), or to disaffirm or repudiate any such contract in accordance with subsection (d)(1).
``(G) WALKAWAY CLAUSES NOT EFFECTIVE.--
``(i) IN GENERAL.--Notwithstanding the provisions of subparagraphs (A) and (E), and sections 403 and 404 of the Federal Deposit Insurance Corporation Improvement Act of 1991, no walkaway clause shall be enforceable in a qualified financial contract of an enterprise in default.
``(ii) WALKAWAY CLAUSE DEFINED.--For purposes of this subparagraph, the term `walkaway clause' means a provision in a qualified financial contract that, after calculation of a value of a party's position or an amount due to or from 1 of the parties in accordance with its terms upon termination, liquidation, or acceleration of the qualified financial contract, either does not create a payment obligation of a party or extinguishes a payment obligation of a party in whole or in part solely
because of the status of such party as a nondefaulting party.
``(9) TRANSFER OF QUALIFIED FINANCIAL CONTRACTS.--In making any transfer of assets or liabilities of an enterprise in default which includes any qualified financial contract, the conservator or receiver for such enterprise shall either--
``(A) transfer to 1 person--
``(i) all qualified financial contracts between any person (or any affiliate of such person) and the enterprise in default;
``(ii) all claims of such person (or any affiliate of such person) against such enterprise 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 enterprise);
``(iii) all claims of such enterprise against such person (or any affiliate of such person) under any such contract; and
``(iv) all property securing, or any other credit enhancement for any contract described in clause (i), or any claim described in clause (ii) or (iii) under any such contract; or
``(B) transfer none of the financial contracts, claims, or property referred to under subparagraph (A) (with respect to such person and any affiliate of such person).
``(10) NOTIFICATION OF TRANSFER.--
``(A) IN GENERAL.--The conservator or receiver shall notify any person that is a party to a contract or transfer by 5:00 p.m. (Eastern Standard Time) on the business day following the date of the appointment of the receiver in the case of a receivership, or the business day following such transfer in the case of a conservatorship, if--
``(i) the conservator or receiver for an enterprise in default makes any transfer of the assets and liabilities of such enterprise; and
``(ii) such transfer includes any qualified financial contract.
``(B) CERTAIN RIGHTS NOT ENFORCEABLE.--
``(i) RECEIVERSHIP.--A person who is a party to a qualified financial contract with an enterprise 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 enterprise (or the insolvency or financial condition of the enterprise for which the
receiver has been appointed)--
``(I) until 5:00 p.m. (Eastern Standard Time) on the business day following the date of the appointment of the receiver; or
``(II) after the person has received notice that the contract has been transferred pursuant to paragraph (9)(A).
``(ii) CONSERVATORSHIP.--A person who is a party to a qualified financial contract with an enterprise may not exercise any right that such person has to terminate, liquidate, or net such contract under paragraph (8)(E) of this subsection or under section 403 or 404 of the Federal Deposit Insurance Corporation Improvement Act of 1991, solely by reason of or incidental to the appointment of a conservator for the enterprise (or the insolvency or financial condition of the enterprise for
which the conservator has been appointed).
``(iii) NOTICE.--For purposes of this paragraph, the conservator or receiver of an enterprise shall be deemed to have notified a person who is a party to a qualified financial contract with such enterprise, if the conservator or receiver has taken steps reasonably calculated to provide notice to such person by the time specified in subparagraph (A).
``(C) BUSINESS DAY DEFINED.--For purposes of this paragraph, the term `business day' means any day other than any Saturday, Sunday, or any day on which either the New York Stock Exchange or the Federal Reserve Bank of New York is closed.
``(11) DISAFFIRMANCE OR REPUDIATION OF QUALIFIED FINANCIAL CONTRACTS.--In exercising the rights of disaffirmance or repudiation of a conservator or receiver with respect to any qualified financial contract to which an enterprise is a party, the conservator or receiver for such institution shall either--
``(A) disaffirm or repudiate all qualified financial contracts between--
``(i) any person or any affiliate of such person; and
``(ii) the enterprise in default; or
``(B) disaffirm or repudiate none of the qualified financial contracts referred to in subparagraph (A) (with respect to such person or any affiliate of such person).
``(12) CERTAIN SECURITY INTERESTS NOT AVOIDABLE.--No provision of this subsection shall be construed as permitting the avoidance of any legally enforceable or perfected security interest in any of the assets of any enterprise, except where such an interest is taken in contemplation of the insolvency of the enterprise, or with the intent to hinder, delay, or defraud the enterprise or the creditors of such enterprise.
``(13) AUTHORITY TO ENFORCE CONTRACTS.--
``(A) IN GENERAL.--Notwithstanding any provision of a contract providing for termination, default, acceleration, or exercise of rights upon, or solely by reason of, insolvency or the appointment of, or the exercise of rights or powers by, a conservator or receiver, the conservator or receiver may enforce any contract, other than a contract for liability insurance for a director or officer, or a contract or an enterprise bond, entered into by
the enterprise.
``(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 enterprise 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 an enterprise is a party, or to obtain possession of or exercise control over any property of the enterprise, or affect any contractual rights of the enterprise, without the consent of the conservator or receiver, as appropriate, for a period of--
``(I) 45 days after the date of appointment of a conservator; or
``(II) 90 days after the date of appointment of a receiver.
``(ii) EXCEPTIONS.--This subparagraph shall not--
``(I) apply to a contract for liability insurance for an officer or director;
``(II) apply to the rights of parties to certain qualified financial contracts under subsection (d)(8); and
``(III) be construed as permitting the conservator or receiver to fail to comply with otherwise enforceable provisions of such contracts.
``(14) SAVINGS CLAUSE.--The meanings of terms used in this subsection are applicable for purposes of this subsection only, and shall not be construed or applied so as to challenge or affect the characterization, definition, or treatment of any similar terms under any other statute, regulation, or rule, including the Gramm-Leach-Bliley Act, the Legal Certainty for Bank Products Act of 2000, the securities laws (as that term is defined in section 3(a)(47) of the Securities Exchange Act
of 1934), and the Commodity Exchange Act.
``(e) Valuation of Claims in Default.--
``(1) IN GENERAL.--Notwithstanding any other provision of Federal law or the law of any State, and regardless of the method which the Office determines to utilize with respect to an enterprise in default or in danger of default, including transactions authorized under subsection (i), this subsection shall govern the rights of the creditors of such enterprise.
``(2) MAXIMUM LIABILITY.--The maximum liability of the Office, acting as receiver or in any other capacity, to any person having a claim against the receiver or the enterprise for which such receiver is appointed shall be not more than the amount that such claimant would have received if the Office had liquidated the assets and liabilities of the enterprise without exercising the authority of the Office under subsection (i).
``(f) Limitation on Court Action.--Except as provided in this section or at the request of the Director, no court may take any action to restrain or affect the exercise of powers or functions of the Office as a conservator or a receiver.
``(g) Liability of Directors and Officers.--
``(1) IN GENERAL.--A director or officer of an enterprise 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 Office, and prosecuted wholly or partially for the benefit of the Office--
``(A) acting as conservator or receiver of such enterprise; or
``(B) acting based upon a suit, claim, or cause of action purchased from, assigned by, or otherwise conveyed by such receiver or conservator.
``(2) ACTIONS ADDRESSED.--Paragraph (1) applies in any civil action for gross negligence, including any similar conduct or conduct that demonstrates a greater disregard of a duty of care than gross negligence, including intentional tortious conduct, as such terms are defined and determined under applicable State law.
``(3) NO LIMITATION.--Nothing in this subsection shall impair or affect any right of the Office under other applicable law.
``(h) Damages.--In any proceeding related to any claim against a director, officer, employee, agent, attorney, accountant, appraiser, or any other party employed by or providing services to an enterprise, recoverable damages determined to result from the improvident or otherwise improper use or investment of any assets of the enterprise shall include principal losses and appropriate interest.
``(i) Limited-Life Enterprises.--
``(1) ORGANIZATION.--
``(A) PURPOSE.--The Office, as receiver appointed pursuant to subsection (a), shall, in the case of an enterprise, organize a limited-life enterprise with respect to that enterprise in accordance with this subsection.
``(B) AUTHORITIES.--Upon the creation of a limited-life enterprise under subparagraph (A), the limited-life enterprise may--
``(i) assume such liabilities of the enterprise that is in default or in danger of default as the Office 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 enterprise to the limited-life enterprise;
``(ii) purchase such assets of the enterprise that is in default, or in danger of default as the Office may, in its discretion, determine to be appropriate; and
``(iii) perform any other temporary function which the Office may, in its discretion, prescribe in accordance with this section.
``(2) CHARTER AND ESTABLISHMENT.--
``(A) TRANSFER OF CHARTER.--
``(i) FANNIE MAE.--If the Office is appointed as receiver for the Federal National Mortgage Association, the limited-life enterprise established under this subsection with respect to such enterprise shall, by operation of law and immediately upon its organization--
``(I) succeed to the charter of the Federal National Mortgage Association, as set forth in the Federal National Mortgage Association Charter Act; and
``(II) thereafter operate in accordance with, and subject to, such charter, this Act, and any other provision of law to which the Federal National Mortgage Association is subject, except as otherwise provided in this subsection.
``(ii) FREDDIE MAC.--If the Office is appointed as receiver for the Federal Home Loan Mortgage Corporation, the limited-life enterprise established under this subsection with respect to such enterprise shall, by operation of law and immediately upon its organization--
``(I) succeed to the charter of the Federal Home Loan Mortgage Corporation, as set forth in the Federal Home Loan Mortgage Corporation Charter Act; and
``(II) thereafter operate in accordance with, and subject to, such charter, this Act, and any other provision of law to which the Federal Home Loan Mortgage Corporation is subject, except as otherwise provided in this subsection.
``(B) INTERESTS IN AND ASSETS AND OBLIGATIONS OF ENTERPRISE IN DEFAULT.--Notwithstanding subparagraph (A) or any other provision of law--
``(i) a limited-life enterprise shall assume, acquire, or succeed to the assets or liabilities of an enterprise only to the extent that such assets or liabilities are transferred by the Office to the limited-life enterprise in accordance with, and subject to the restrictions set forth in, paragraph (1)(B);
``(ii) a limited-life enterprise shall not assume, acquire, or succeed to any obligation that an enterprise for which a receiver has been appointed may have to any shareholder of the enterprise that arises as a result of the status of that person as a shareholder of the enterprise; and
``(iii) no shareholder or creditor of an enterprise shall have any right or claim against the charter of the enterprise once the Office has been appointed receiver for the enterprise and a limited-life enterprise succeeds to the charter pursuant to subparagraph (A).
``(C) LIMITED-LIFE ENTERPRISE TREATED AS BEING IN DEFAULT FOR CERTAIN PURPOSES.--A limited-life enterprise shall be treated as an enterprise in default at such times and for such purposes as the Office may, in its discretion, determine.
``(D) MANAGEMENT.--Upon its establishment, a limited-life enterprise shall be under the management of a board of directors consisting of not fewer than 5 nor more than 10 members appointed by the Office.
``(E) BYLAWS.--The board of directors of a limited-life enterprise shall adopt such bylaws as may be approved by the Office.
``(3) CAPITAL STOCK.--
``(A) NO REQUIREMENT.--The Office is not required to pay capital stock into a limited-life enterprise or to issue any capital stock on behalf of a limited-life enterprise established under this subsection.
``(B) AUTHORITY.--If the Director determines that such action is advisable, the Office may cause capital stock or other securities of a limited-life enterprise established with respect to an enterprise to be issued and offered for sale, in such amounts and on such terms and conditions as the Director may determine, in the discretion of the Director.
``(4) INVESTMENTS.--Funds of a limited-life enterprise shall be kept on hand in cash, invested in obligations of the United States or obligations guaranteed as to principal and interest by the United States, or deposited with the Office, or any Federal reserve bank.
``(5) EXEMPT TAX STATUS.--Notwithstanding any other provision of Federal or State law, a limited-life enterprise, its franchise, property, and income shall be exempt from all taxation now or hereafter imposed by the United States, by any territory, dependency, or possession thereof, or by any State, county, municipality, or local taxing authority.
``(6) WINDING UP.--
``(A) IN GENERAL.--Subject to subparagraphs (B) and (C), not later than 2 years after the date of its organization, the Office shall wind up the affairs of a limited-life enterprise.
``(B) EXTENSION.--The Director may, in the discretion of the Director, extend the status of a limited-life enterprise for 3 additional 1-year periods.
``(C) TERMINATION OF STATUS AS LIMITED-LIFE ENTERPRISE.--
``(i) IN GENERAL.--Upon the sale by the Office of 80 percent or more of the capital stock of a limited-life enterprise, as defined in clause (iv), to 1 or more persons (other than the Office)--
``(I) the status of the limited-life enterprise as such shall terminate; and
``(II) the enterprise shall cease to be a limited-life enterprise for purposes of this subsection.
``(ii) DIVESTITURE OF REMAINING STOCK, IF ANY.--
``(I) IN GENERAL.--Not later than 1 year after the date on which the status of a limited-life enterprise is terminated pursuant to clause (i), the Office shall sell to 1 or more persons (other than the Office) any remaining capital stock of the former limited-life enterprise.
``(II) EXTENSION AUTHORIZED.--The Director may extend the period referred to in subclause (I) for not longer than an additional 2 years, if the Director determines that such action would be in the public interest.
``(iii) SAVINGS CLAUSE.--Notwithstanding any provision of law, other than clause (ii), the Office shall not be required to sell the capital stock of an enterprise or a limited-life enterprise established with respect to an enterprise.
``(iv) APPLICABILITY.--This subparagraph applies only with respect to a limited-life enterprise that is established with respect to an enterprise.
``(7) TRANSFER OF ASSETS AND LIABILITIES.--
``(A) IN GENERAL.--
``(i) TRANSFER OF ASSETS AND LIABILITIES.--The Office, as receiver, may transfer any assets and liabilities of an enterprise in default, or in danger of default, to the limited-life enterprise in accordance with and subject to the restrictions of paragraph (1).
``(ii) SUBSEQUENT TRANSFERS.--At any time after the establishment of a limited-life enterprise, the Office, as receiver, may transfer any assets and liabilities of the enterprise in default, or in danger of default, as the Office 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 an enterprise in default or in danger of default to a limited-life enterprise 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 Office shall treat all creditors of an enterprise 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 Office under this subsection to transfer any assets or liabilities of the enterprise to the limited-life enterprise established with respect to such enterprise, except that the Office 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 enterprise, to maximize the present value return from the sale or other disposition of the assets of the enterprise, or to minimize the amount of any loss realized upon the sale or other disposition of the assets of the enterprise; and
``(II) all creditors that are similarly situated under subsection (c)(1) receive not less than the amount provided in subsection (e)(2).
``(v) LIMITATION ON TRANSFER OF LIABILITIES.--Notwithstanding any other provision of law, the aggregate amount of liabilities of an enterprise that are transferred to, or assumed by, a limited-life enterprise may not exceed the aggregate amount of assets of the enterprise that are transferred to, or purchased by, the limited-life enterprise.
``(8) REGULATIONS.--The Office may promulgate such regulations as the Office determines to be necessary or appropriate to implement this subsection.
``(9) POWERS OF LIMITED-LIFE ENTERPRISES.--
``(A) IN GENERAL.--Each limited-life enterprise created under this subsection shall have all corporate powers of, and be subject to the same provisions of law as, the enterprise in default or in danger of default to which it relates, except that--
``(i) the Office may--
``(I) remove the directors of a limited-life enterprise;
``(II) fix the compensation of members of the board of directors and senior management, as determined by the Office in its discretion, of a limited-life enterprise; and
``(III) indemnify the representatives for purposes of paragraph (1)(B), and the directors, officers, employees, and agents of a limited-life enterprise on such terms as the Office determines to be appropriate; and
``(ii) the board of directors of a limited-life enterprise--
``(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 Office; 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 Office.
``(B) STAY OF JUDICIAL ACTION.--Any judicial action to which a limited-life enterprise becomes a party by virtue of its acquisition of any assets or assumption of any liabilities of an enterprise in default shall be stayed from further proceedings for a period of not longer than 45 days, at the request of the limited-life enterprise. Such period may be modified upon the consent of all parties.
``(10) NO FEDERAL STATUS.--
``(A) AGENCY STATUS.--A limited-life enterprise 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 enterprise are not, solely by virtue of service in any such capacity, officers or employees of the United States. Any employee of the Office or of any Federal instrumentality who serves at the request of the Office as a representative for purposes of paragraph (1)(B), interim director, director, officer, employee, or agent of a limited-life
enterprise 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 enterprise in addition to such salary or benefits as are obtained through employment with the Office or such Federal instrumentality.
``(11) AUTHORITY TO OBTAIN CREDIT.--
``(A) IN GENERAL.--A limited-life enterprise may obtain unsecured credit and issue unsecured debt.
``(B) INABILITY TO OBTAIN CREDIT.--If a limited-life enterprise 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 enterprise--
``(i) with priority over any or all of the obligations of the limited-life enterprise;
``(ii) secured by a lien on property of the limited-life enterprise that is not otherwise subject to a lien; or
``(iii) secured by a junior lien on property of the limited-life enterprise that is subject to a lien.
``(C) LIMITATIONS.--
``(i) IN GENERAL.--The Director, after notice and a hearing, may authorize the obtaining of credit or the issuance of debt by a limited-life enterprise that is secured by a senior or equal lien on property of the limited-life enterprise 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 enterprise 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.
``(12) BURDEN OF PROOF.--In any hearing under this subsection, the Director has the burden of proof on the issue of adequate protection.
``(13) AFFECT ON DEBTS AND LIENS.--The reversal or modification on appeal of an authorization under this subsection to obtain credit or issue debt, or of a grant under this section of a priority or a lien, does not affect the validity of any debt so issued, or any priority or lien so granted, to an entity that extended such credit in good faith, whether or not such entity knew of the pendency of the appeal, unless such authorization and the issuance of such debt, or the granting of such
priority or lien, were stayed pending appeal.
``(j) Other Office Exemptions.--
``(1) APPLICABILITY.--The provisions of this subsection shall apply with respect to the Office in any case in which the Office is acting as a conservator or a receiver.
``(2) TAXATION.--The Office, 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 Office 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 Office shall be subject to levy, attachment, garnishment, foreclosure, or sale without the consent of the Office, nor shall any involuntary lien attach to the property of the Office.
``(4) PENALTIES AND FINES.--The Office shall not be liable for any amounts in the nature of penalties or fines, including those arising from the failure of any person to pay any real property, personal property, probate, or recording tax or any recording or filing fees when due.
``(k) Prohibition of Charter Revocation.--In no case may the receiver appointed pursuant to this section revoke, annul, or terminate the charter of an enterprise.''.
(b) Technical and Conforming Amendments.--The Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is amended by striking sections 1369, 1369A, and 1369B (12 U.S.C. 4619, 4620, and 4621).
Subtitle D--Enforcement Actions


SEC. 841. 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:
``(a) Issuance for Unsafe or Unsound Practices and Violations.--If, in the opinion of the Director, an enterprise or any enterprise-affiliated party is engaging or has engaged, or the Director has reasonable cause to believe that the enterprise or any enterprise-affiliated party is about to engage, in an unsafe or unsound practice in conducting the business of the enterprise or the Finance Facility, or is violating or has violated, or the Director
has reasonable cause to believe is about to violate, a law, rule, regulation, or order, or any condition imposed in writing by the Director in connection with the granting of any application or other request by the enterprise or the Finance Facility or any written agreement entered into with the Director, the Director may issue and serve upon the enterprise or enterprise-affiliated party a notice of charges in respect thereof.
``(b) Issuance for Unsatisfactory Rating.--If an enterprise receives, in its most recent report of examination, a less-than-satisfactory rating for credit risk, market risk, operations, or corporate governance, the Director may (if the deficiency is not corrected) deem the enterprise to be engaging in an unsafe or unsound practice for purposes of subsection (a).'';
(2) in subsection (c)--
(A) in paragraph (1), by inserting before the period at the end the following: ``, unless the party served with a notice of charges shall appear at the hearing personally or by a duly authorized representative, the party shall be deemed to have consented to the issuance of the cease-and-desist order''; and
(B) in paragraph (2)--
(i) by striking ``or director'' and inserting ``director, or enterprise-affiliated party''; and
(ii) by inserting ``or enterprise-affiliated party'' before ``consents'';
(3) in each of subsections (c), (d), and (e), by striking ``conduct'' each place that term appears and inserting ``practice'';
(4) in subsection (d)--
(A) in the matter preceding paragraph (1)--
(i) by striking ``or director'' and inserting ``director, or enterprise-affiliated party'';
(ii) by inserting ``to require a enterprise or enterprise-affiliated party'' after ``includes the authority'';
(B) in paragraph (1)--
(i) by striking ``to require an executive officer or a director to''; and
(ii) by striking ``loss'' and all that follows through ``person'' and inserting ``loss, if'';
(iii) in subparagraph (A), by inserting ``such entity or party or finance facility'' before ``was''; and
(iv) by striking subparagraph (B) and inserting the following:
``(B) the violation or practice involved a reckless disregard for the law or any applicable regulations or prior order of the Director;''; and
(C) in paragraph (4), by inserting ``loan or'' before ``asset'';
(5) in subsection (e), by inserting ``or enterprise-affiliated party''--
(A) before ``or any executive''; and
(B) before the period at the end; and
(6) in subsection (f)--
(A) by striking ``enterprise'' and inserting ``enterprise, finance facility,''; and
(B) by striking ``or director'' and inserting ``director, or enterprise-affiliated party''.
SEC. 842. TEMPORARY CEASE-AND-DESIST PROCEEDINGS.
Section 1372 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4632) is amended--
(1) by striking subsection (a) and inserting the following:
``(a) Grounds for Issuance.--
``(1) IN GENERAL.--If the Director determines that the actions specified in the notice of charges served upon an enterprise or any enterprise-affiliated party pursuant to section 1371(a), or the continuation thereof, is likely to cause insolvency or significant dissipation of assets or earnings of that enterprise, or is likely to weaken the condition of that enterprise prior to the completion of the proceedings conducted pursuant to sections 1371 and 1373, the Director may--
``(A) issue a temporary order requiring that enterprise or enterprise-affiliated party to cease and desist from any such violation or practice; and
``(B) require that enterprise or enterprise-affiliated party to take affirmative action to prevent or remedy such insolvency, dissipation, condition, or prejudice pending completion of such proceedings.
``(2) ADDITIONAL REQUIREMENTS.--An order issued under paragraph (1) may include any requirement authorized under subsection 1371(d).'';
(2) in subsection (b), by striking ``or director'' and inserting ``director, or enterprise-affiliated party''; and
(3) in subsection (d), by striking ``or director'' each place that term appears and inserting ``director, or enterprise-affiliated party''; and
(4) in subsection (e)--
(A) by striking ``request the Attorney General of the United States to''; and
(B) by striking ``or may, under the direction and control of the Attorney General, bring such action''.
SEC. 843. REMOVAL AND PROHIBITION AUTHORITY.
(a) In General.--Part 1 of subtitle C of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4631 et seq.) is amended--
(1) by redesignating sections 1377 through 1379B (12 U.S.C. 4637-4641) as sections 1379 through 1379D, respectively; and
(2) by inserting after section 1376 (12 U.S.C. 4636) the following:
``SEC. 1377. REMOVAL AND PROHIBITION AUTHORITY.
``(a) Authority To Issue Order.--
``(1) IN GENERAL.--The Director may serve upon a party described in paragraph (2), or any officer, director, or management of the Finance Facility a written notice of the intention of the Director to suspend or remove such party from office, or prohibit any further participation by such party, in any manner, in the conduct of the affairs of the enterprise.
``(2) APPLICABILITY.--A party described in this paragraph is an enterprise-affiliated party or any officer, director, or management of the Finance Facility, if the Director determines that--
``(A) that party, officer, or director has, directly or indirectly--
``(i) violated--
``(I) any law or regulation;
``(II) any cease-and-desist order which has become final;
``(III) any condition imposed in writing by the Director in connection with the grant of any application or other request by such enterprise; or
``(IV) any written agreement between such enterprise and the Director;
``(ii) engaged or participated in any unsafe or unsound practice in connection with any enterprise or business institution; or
``(iii) committed or engaged in any act, omission, or practice which constitutes a breach of such party's fiduciary duty;
``(B) by reason of the violation, practice, or breach described in subparagraph (A)--
``(i) such enterprise or business institution has suffered or will probably suffer financial loss or other damage; or
``(ii) such party has received financial gain or other benefit; and
``(C) the violation, practice, or breach described in subparagraph (A)--
``(i) involves personal dishonesty on the part of such party; or
``(ii) demonstrates willful or continuing disregard by such party for the safety or soundness of such enterprise or business institution.
``(b) Suspension Order.--
``(1) SUSPENSION OR PROHIBITION AUTHORITY.--If the Director serves written notice under subsection (a) upon a party subject to that subsection (a), the Director may, by order, suspend or remove such party from office, or prohibit such party from further participation in any manner in the conduct of the affairs of the enterprise, if the Director--
``(A) determines that such action is necessary for the protection of the enterprise; and
``(B) serves such party with written notice of the order.
``(2) EFFECTIVE PERIOD.--Any order issued under this subsection--
``(A) shall become effective upon service; and
``(B) unless a court issues a stay of such order under subsection (g), shall remain in effect and enforceable until--
``(i) the date on which the Director dismisses the charges contained in the notice served under subsection (a) with respect to such party; or
``(ii) the effective date of an order issued under subsection (b).
``(3) COPY OF ORDER.--If the Director issues an order under subsection (b) to any party, the Director shall serve a copy of such order on any enterprise with which such party is affiliated at the time such order is issued.
``(c) Notice, Hearing, and Order.--
``(1) NOTICE.--A notice under subsection (a) of the intention of the Director to issue an order under this section shall contain a statement of the facts constituting grounds for such action, and shall fix a time and place at which a hearing will be held on such action.
``(2) TIMING OF HEARING.--A hearing shall be fixed for a date not earlier than 30 days, nor later than 60 days, after the date of service of notice under subsection (a), unless an earlier or a later date is set by the Director at the request of--
``(A) the party receiving such notice, and good cause is shown; or
``(B) the Attorney General of the United States.
``(3) CONSENT.--Unless the party that is the subject of a notice delivered under subsection (a) appears at the hearing in person or by a duly authorized representative, such party shall be deemed to have consented to the issuance of an order under this section.
``(4) ISSUANCE OF ORDER OF SUSPENSION.--The Director may issue an order under this section, as the Director may deem appropriate, if--
``(A) a party is deemed to have consented to the issuance of an order under paragraph (3); or
``(B) upon the record made at the hearing, the Director finds that any of the grounds specified in the notice have been established.
``(5) EFFECTIVENESS OF ORDER.--Any order issued under paragraph (4) shall become effective at the expiration of 30 days after the date of service upon the relevant enterprise and party (except in the case of an order issued upon consent under paragraph (3), which shall become effective at the time specified therein). Such order shall remain effective and enforceable except to such extent as it is stayed, modified, terminated, or set aside by action of the Director or a reviewing court.
``(d) Prohibition of Certain Specific Activities.--Any person subject to an order issued under this section shall not--
``(1) participate in any manner in the conduct of the affairs of any enterprise or the Finance Facility;
``(2) solicit, procure, transfer, attempt to transfer, vote, or attempt to vote any proxy, consent, or authorization with respect to any voting rights in any enterprise;
``(3) violate any voting agreement previously approved by the Director; or
``(4) vote for a director, or serve or act as an enterprise-affiliated party of an enterprise or as an officer or director of the Finance Facility.
``(e) Industry-Wide Prohibition.--
``(1) IN GENERAL.--Except as provided in paragraph (2), any person who, pursuant to an order issued under this section, has been removed or suspended from office in an enterprise or the Finance Facility, or prohibited from participating in the conduct of the affairs of an enterprise or the Finance Facility, may not, while such order is in effect, continue or commence to hold any office in, or participate in any manner in the conduct of the affairs of, any enterprise or the Finance Facility.
``(2) EXCEPTION IF DIRECTOR PROVIDES WRITTEN CONSENT.--If, on or after the date on which an order is issued under this section which removes or suspends from office any party, or prohibits such party from participating in the conduct of the affairs of an enterprise or the Finance Facility, such party receives the written consent of the Director, the order shall, to the extent of such consent, cease to apply to such party with respect to the enterprise or such Finance Facility described
in the written consent. Any such consent shall be publicly disclosed.
``(3) VIOLATION OF PARAGRAPH (1) TREATED AS VIOLATION OF ORDER.--Any violation of paragraph (1) by any person who is subject to an order issued under subsection (h) shall be treated as a violation of the order.
``(f) Applicability.--This section shall only apply to a person who is an individual, unless the Director specifically finds that it should apply to a corporation, firm, or other business entity.
``(g) Stay of Suspension and Prohibition of Enterprise-Affiliated Party.--Not later than 10 days after the date on which any enterprise-affiliated party has been suspended from office or prohibited from participation in the conduct of the affairs of an enterprise under this section, such party may apply to the United States District Court for the District of Columbia, or the United States district court for the judicial district in which the headquarters of the enterprise is located,
for a stay of such suspension or prohibition pending the completion of the administrative proceedings pursuant to subsection (c). The court shall have jurisdiction to stay such suspension or prohibition.
``(h) Suspension or Removal of Enterprise-Affiliated Party Charged With Felony.--
``(1) SUSPENSION OR PROHIBITION.--
``(A) IN GENERAL.--Whenever any enterprise-affiliated party is charged in any information, indictment, or complaint, with the commission of or participation in a crime involving dishonesty or breach of trust which is punishable by imprisonment for a term exceeding 1 year under Federal or State law, the Director may, if continued service or participation by such party may pose a threat to the enterprise or impair public confidence in the enterprise, by written notice served upon such party,
suspend such party from office or prohibit such party from further participation in any manner in the conduct of the affairs of any enterprise.
``(B) PROVISIONS APPLICABLE TO NOTICE.--
``(i) COPY.--A copy of any notice under subparagraph (A) shall be served upon the relevant enterprise.
``(ii) EFFECTIVE PERIOD.--A suspension or prohibition under subparagraph (A) shall remain in effect until the information, indictment, or complaint referred to in subparagraph (A) is finally disposed of, or until terminated by the Director.
``(2) REMOVAL OR PROHIBITION.--
``(A) IN GENERAL.--If a judgment of conviction or an agreement to enter a pretrial diversion or other similar program is entered against an enterprise-affiliated party in connection with a crime described in paragraph (1)(A), at such time as such judgment is not subject to further appellate review, the Director may, if continued service or participation by such party may pose a threat to the enterprise or impair public confidence in the enterprise, issue and serve upon such party an order
removing such party from office or prohibiting such party from further participation in any manner in the conduct of the affairs of the enterprise without the prior written consent of the Director.
``(B) PROVISIONS APPLICABLE TO ORDER.--
``(i) COPY.--A copy of any order under subparagraph (A) shall be served upon the relevant enterprise, at which time the enterprise-affiliated party who is subject to the order (if a director or an officer) shall cease to be a director or officer of such enterprise.
``(ii) EFFECT OF ACQUITTAL.--A finding of not guilty or other disposition of the charge shall not preclude the Director from instituting proceedings after such finding or disposition to remove a party from office or to prohibit further participation in the affairs of an enterprise pursuant to subsection (a) or (b).
``(iii) EFFECTIVE PERIOD.--Unless terminated by the Director, any notice of suspension or order of removal issued under this subsection shall remain effective and outstanding until the completion of any hearing or appeal authorized under paragraph (4).
``(3) AUTHORITY OF REMAINING BOARD MEMBERS.--
``(A) IN GENERAL.--If at any time, because of the suspension of 1 or more directors pursuant to this section, there shall be on the board of directors of an enterprise less than a quorum of directors not so suspended, all powers and functions vested in or exercisable by such board shall vest in and be exercisable by the director or directors on the board not so suspended, until such time as there shall be a quorum of the board of directors.
``(B) APPOINTMENT OF TEMPORARY DIRECTORS.--If all of the directors of an enterprise are suspended pursuant to this section, the Director shall appoint persons to serve temporarily as directors pending the termination of such suspensions, or until such time as those who have been suspended cease to be directors of the enterprise and their respective successors take office.
``(4) HEARING REGARDING CONTINUED PARTICIPATION.--
``(A) IN GENERAL.--Not later than 30 days after the date of service of any notice of suspension or order of removal issued pursuant to paragraph (1) or (2), the enterprise-affiliated party may request in writing an opportunity to appear before the Director to show that the continued service or participation in the conduct of the affairs of the enterprise by such party does not, or is not likely to, pose a threat to the interests of the enterprise, or threaten to impair public confidence
in the enterprise.
``(B) TIMING AND FORM OF HEARING.--Upon receipt of a request for a hearing under subparagraph (A), the Director shall fix a time (not later than 30 days after the date of receipt of such request, unless extended at the request of such party) and place at which the enterprise-affiliated party may appear, personally or through counsel, before the Director or 1 or more designated employees of the Director to submit written materials (or, at the discretion of the Director, oral testimony)
and oral argument.
``(C) DETERMINATION.--Not later than 60 days after the date of a hearing under subparagraph (B), the Director shall notify the enterprise-affiliated party whether the suspension or prohibition from participation in any manner in the conduct of the affairs of the enterprise will be continued, terminated, or otherwise modified, or whether the order removing such party from office or prohibiting such party from further participation in any manner in the conduct of the affairs of the enterprise
will be rescinded or otherwise modified. Such notification shall contain a statement of the basis for any adverse decision of the Director.
``(5) RULES.--The Director is authorized to prescribe such rules as may be necessary to carry out this subsection.''.
(b) Conforming Amendments.--
(1) SAFETY AND SOUNDNESS ACT.--Subtitle C of title XIII of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (42 U.S.C. 4501 et seq.) is amended--
(A) in section 1317(f), by striking ``section 1379B'' and inserting ``section 1379D'';
(B) in section 1373(a)--
(i) in paragraph (1), by striking ``or 1376(c)'' and inserting ``, 1376(c), or 1377'';
(ii) in paragraph (2), by inserting ``or 1377'' after''1371''; and
(iii) in paragraph (4), by inserting ``or removal or prohibition'' after ``cease and desist''; and
(C) in section 1374(a)--
(i) by striking ``or 1376'' and inserting ``, 1376, or 1377''; and
(ii) by striking ``such section'' and inserting ``this title''.
(2) FANNIE MAE CHARTER ACT.--Section 308(b) of the Federal National Mortgage Association Charter Act (12 U.S.C. 1723(b)) is amended in the second sentence, by striking ``The'' and inserting ``Except to the extent that action under section 1377 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 temporarily results in a lesser number, the''.
(3) FREDDIE MAC CHARTER ACT.--Section 303(a)(2)(A) of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1452(a)(2)(A)) is amended, in the second sentence, by striking ``The'' and inserting ``Except to the extent action under section 1377 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 temporarily results in a lesser number, the''.
SEC. 844. ENFORCEMENT AND JURISDICTION.
(a) In General.--Section 1375 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4635) is amended--
(1) by striking subsection (a) and inserting the following:
``(a) Enforcement.--The Director may, in the discretion of the Director, apply to the United States District Court for the District of Columbia, or the United States district court within the jurisdiction of which the headquarters of the enterprise is located, for the enforcement of any effective and outstanding notice, order, or subpoena issued under this title, or request that the Attorney General of the United States bring such an action. Such court shall have jurisdiction and power
to order and require compliance with such notice, order, or subpoena.''; and
(2) in subsection (b)--
(A) by striking ``section 1371, 1372, or 1376 or'';
(B) by inserting ``subtitle C, or section 1313A'' after ``subtitle B,''; and
(C) by inserting ``, standard,'' after ``notice'' each place that term appears.
(b) Conforming Amendment.--Section 1379B of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4641) is amended by striking subsection (c) and redesignating subsection (d) as subsection (c).
SEC. 845. CIVIL MONEY PENALTIES.
Section 1376 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4636) is amended--
(1) by striking subsection (a) and inserting the following:
``(a) In General.--The Director may impose a civil money penalty in accordance with this section on any enterprise, or any executive offices of an enterprise or any enterprise-affiliated party.'';
(2) by striking subsection (b) and inserting the following:
``(b) Amount of Penalty.--
``(1) FIRST TIER.--An enterprise or enterprise-affiliated party shall forfeit and pay a civil penalty of not more than $10,000 for each day during which a violation continues, if such enterprise or party--
``(A) violates any provision of this title, the authorizing statutes, or any order, condition, rule, or regulation under this title or any authorizing statute;
``(B) violates any final or temporary order or notice issued pursuant to this title;
``(C) violates any condition imposed in writing by the Director in connection with the grant of any application or other request by such enterprise;
``(D) violates any written agreement between the enterprise and the Director; or
``(E) engages in any conduct that the Director determines to be an unsafe or unsound practice.
``(2) SECOND TIER.--Notwithstanding paragraph (1), a enterprise or enterprise-affiliated party shall forfeit and pay a civil penalty of not more than $50,000 for each day during which a violation, practice, or breach continues, if--
``(A) the enterprise or enterprise-affiliated party, respectively--
``(i) commits any violation described in any subparagraph of paragraph (1);
``(ii) recklessly engages in an unsafe or unsound practice in conducting the affairs of the enterprise; or
``(iii) breaches any fiduciary duty; and
``(B) the violation, practice, or breach--
``(i) is part of a pattern of misconduct;
``(ii) causes or is likely to cause more than a minimal loss to the enterprise; or
``(iii) results in pecuniary gain or other benefit to such party.
``(3) THIRD TIER.--Notwithstanding paragraphs (1) and (2), any enterprise or enterprise-affiliated party shall forfeit and pay a civil penalty in an amount not to exceed the applicable maximum amount determined under paragraph (4) for each day during which such violation, practice, or breach continues, if such enterprise or enterprise-affiliated party--
``(A) knowingly--
``(i) commits any violation described in any subparagraph of paragraph (1);
``(ii) engages in any unsafe or unsound practice in conducting the affairs of the enterprise; or
``(iii) breaches any fiduciary duty; and
``(B) knowingly or recklessly causes a substantial loss to the enterprise or a substantial pecuniary gain or other benefit to such party by reason of such violation, practice, or breach.
``(4) MAXIMUM AMOUNTS OF PENALTIES FOR ANY VIOLATION DESCRIBED IN PARAGRAPH (3).--The maximum daily amount of any civil penalty which may be assessed pursuant to paragraph (3) for any violation, practice, or breach described in paragraph (3) is--
``(A) in the case of any enterprise-affiliated party, an amount not to exceed $2,000,000; and
``(B) in the case of any enterprise, $2,000,000.'';
(3) in subsection (c)--
(A) by inserting ``or enterprise-affiliated party'' before ``in writing''; and
(B) by inserting ``or enterprise-affiliated party'' before ``has been given''; and
(4) in subsection (d)--
(A) by striking ``or director'' each place that term appears and inserting ``director, or enterprise-affiliated party'';
(B) by striking ``request the Attorney General of the United States to'';
(C) by inserting ``, or the United States district court within the jurisdiction of which the headquarters of the enterprise is located,'' after ``District of Columbia'';
(D) by striking ``, or may, under the direction and control of the Attorney General of the United States, bring such an action''; and
(E) by striking ``and section 1374''.
SEC. 846. CRIMINAL PENALTY.
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. 1378. CRIMINAL PENALTY.
``Whoever, being subject to an order in effect under section 1377, without the prior written approval of the Director, knowingly participates, directly or indirectly, in any manner (including by engaging in an activity specifically prohibited in such an order) in the conduct of the affairs of any enterprise shall, notwithstanding section 3571 of title 18, be fined not more than $1,000,000, imprisoned for not more than 5 years, or both.''.
SEC. 847. NOTICE AFTER SEPARATION FROM SERVICE.
Section 1379 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4637), as so designated by this Act, is amended--
(1) by striking ``2-year'' and inserting ``6-year''; and
(2) by inserting ``or an enterprise-affiliated party'' after ``enterprise'' each place that term appears.
SEC. 848. SUBPOENA AUTHORITY.
Section 1379B of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4641) is amended--
(1) in subsection (a)--
(A) in the matter preceding paragraph (1)--
(i) by striking ``administrative'';
(ii) by inserting ``, examination, or investigation'' after ``proceeding'';
(iii) by striking ``subchapter'' and inserting ``title''; and
(iv) by inserting ``or any designated representative thereof, including any person designated to conduct any hearing under this subtitle'' after ``Director''; and
(B) in paragraph (4), by striking ``issued by the Director'';
(2) in subsection (b), by inserting ``or in any territory or other place subject to the jurisdiction of the United States'' after ``State'';
(3) by striking subsection (c) and inserting the following:
``(c) Enforcement.--
``(1) IN GENERAL.--The Director, or any party to proceedings under this subtitle, may apply to the United States District Court for the District of Columbia, or the United States district court for the judicial district of the United States in any territory in which such proceeding is being conducted, or where the witness resides or carries on business, for enforcement of any subpoena or subpoena duces tecum issued pursuant to this section.
``(2) POWER OF COURT.--The courts described under paragraph (1) shall have the jurisdiction and power to order and require compliance with any subpoena issued under paragraph (1)'';
(4) in subsection (d), by inserting ``enterprise-affiliated party'' before ``may allow''; and
(5) by adding at the end the following:
``(e) Penalties.--A person shall be guilty of a misdemeanor, and upon conviction, shall be subject to a fine of not more than $1,000 or to imprisonment for a term of not more than 1 year, or both, if that person willfully fails or refuses, in disobedience of a subpoena issued under subsection (c), to--
``(1) attend court;
``(2) testify in court;
``(3) answer any lawful inquiry; or
``(4) produce books, papers, correspondence, contracts, agreements, or such other records as requested in the subpoena.''.


(As printed in the Congressional Record for the Senate on Apr 3, 2008.)