HR1427MAY18

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SECTION-BY SECTION ANALYSIS

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

SUBTITLE A--IMPROVEMENT OF SAFETY AND SOUNDNESS

Section 101. Establishment of the Federal Housing Finance Agency

Creates an independent agency, the Federal Housing Finance Agency (FHFA or Agency) as an independent Agency of the Federal government, headed by a presidentially appointed Senate-confirmed Director, to oversee Fannie Mae, Freddie Mac and the Federal Home Loan Banks (collectively the `regulated entities'). This provision grants the FHFA general supervisory and regulatory authority over the regulated entities, including any joint office of the Federal Home Loan Banks, and requires the agency to ensure that the purposes of the Act, the authorizing statutes and other applicable laws are carried out. The Director has a term of 5 years and may be removed only for cause. The Director shall appoint three Deputy Directors: Deputy Director of the Division of Enterprise Regulation; Deputy Director of Federal Home Loan Bank Regulation; and Deputy Director for Housing.

Section 102. Duties and authorities of Director

The principal duties of the Director will be to oversee the operations of the regulated entities (and any joint office of the Federal Home Loan Banks) and ensure their safe and sound operation as well as oversee their respective housing or housing finance and community and economic development missions. Regarding their housing missions, the Director must ensure that `the operations and activities of each regulated entity foster liquid, efficient, competitive, and resilient national housing finance markets that minimize the cost of housing finance * * * .' This provision clarifies, consistent with existing authority, that the Director will establish prudential management and operations standards for each regulated entity comparable to standards established by the Federal bank regulatory agencies for depository institutions. This section provides an enforcement regime for the standards, which may require the regulated entity that fails to meet the prescribed standards to submit a corrective plan, restrict asset growth, or increase capital. The Director is authorized to testify before Congress without prior Administration review of the testimony and to review and, if warranted, reject any acquisition or transfer of a controlling interest in an enterprise. The Director also is granted independent litigating authority to enforce the government-sponsored enterprise provisions of the Housing and Community Development Act of 1992, as amended, any regulation or order thereunder, 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. This general independent litigation authority is supplemented by section 164, which grants specific authorization to the Director to enforce notices and orders issued under the capital and enforcement provisions of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992.

Section 103. Federal Housing Enterprise Board

A board, consisting of the Director, as chair, the Secretaries of Treasury and the Department of Housing and Urban Development (HUD), and two additional appointed members, will advise the Director on strategies and policies in carrying out the duties of the Director. The additional directors are presidentially appointed Senate confirmed, have a term of 4 years, and can be removed only for cause. The board meets by notice of the Director, but at least every three months. The Board is prohibited from exercising any `executive authority.' The Board is required to testify before Congress and submit an annual report regarding safety and soundness, any material deficiencies, overall operational status, and performance in carrying out housing mission with respect to the regulated entities, as well as the operations, resources, workforce diversity, mission fulfillment and performance of the Agency.

Section 104. Authority to require reports by regulated entities

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

Section 105. Disclosure of income and charitable contributions by enterprises

The enterprises must submit annually to the Director a report on the total value of contributions made by the enterprise to non-profit organizations during its previous fiscal year. This report must also include specific information about the value and recipients of substantial contributions and about substantial contributions given to charities affiliated with enterprise insiders. The Director shall make the information submitted in the reports publicly available.

Each enterprise must prominently disclose in its annual report the amount of income reported by the enterprise to the Internal Revenue Service for the most recent taxable year.

Section 106. Assessments

Permits the Agency to obtain funding for winding up the affairs of the Office of Federal Housing Enterprise Oversight (OFHEO) and the Federal Housing Finance Board (Finance Board) and for reasonable costs and expenses on an annual basis through assessments on the regulated entities. The amounts received by the Director are not to be considered government funds or appropriated monies. It is expected that, in making annual assessments and disbursing funds for agency expenses, the Director will, to the extent possible, have assessments from Fannie Mae and Freddie Mac be used for supervision of those regulated entities and assessments from the Federal Home Loan Banks be used for supervision of those entities. Each regulated entity is to be assessed in accordance with its total assets. The Director is permitted to adjust assessments to pay additional estimated costs of regulating a regulated entity that is not adequately capitalized, or to ensure that a regulated entity bears the cost of enforcement activity it generates. Consistent with current practice at OFHEO and the Finance Board, assessments will be deposited with the U.S. Department of the Treasury, and the Director may request the Secretary of the Treasury to invest amounts of the collected assessments.

Assessments are not subject to apportionment, and, although the Director must submit financial operating plans, forecasts, and reports of agency financial condition to OMB, the latter has no approval authority with regard to the reports or other related jurisdiction over the agency.

The Government Accountability Office (GAO) must annually audit the financial transaction of the Agency and submit a report to Congress of each annual audit conducted. The Agency must reimburse GAO for the costs of any CPA firms the GAO hires in connection with such audits.

Section 107. Examiners and accountants

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

Section 108. Prohibition and withholding of executive compensation

Grants the Director, when making a determination of whether to prohibit the payment of compensation to any executive officer of the regulated entities, authority to take into account any factors the Director considers relevant, including `any wrongdoing on the part of the executive officer.' The Director is authorized to direct a regulated entity to withhold any payment, transfer, or disbursement of compensation to an executive officer or to place such compensation into escrow during review of the reasonableness and comparability of compensation. The approval of an agreement or contract does not preclude the Agency's ability to make such a determination.

Section 109. Reviews of regulated entities

The Director may contract with any entity, including a nationally recognized statistical rating organization, that the Director considers appropriate to conduct a review of the regulated entities.

Section 110. Inclusion of minorities and women

Each regulated entity must have an Office of Minority and Women Inclusion responsible for matters relating to diversity in all aspects of the entity's management, employment, and business activities in accordance with requirements established by the Director. Each regulated entity must develop and implement standards and procedures to ensure, to the maximum extent possible, the inclusion and utilization of minorities and women, and minority- and women-owned businesses at all levels of the entity and in all business and activities of the entity. Processes for evaluation of all contract proposals and for service provider hires of any kind must give consideration to the diversity of the applicants. Each regulated entity must disclose in its annual report detailed information about actions taken by the Office.

The Agency must take affirmative steps to seek diversity in all levels of its workforce consistent with the demographic diversity of the United States.

Section 111. Regulations and orders

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

Section 112. Non-waiver of privileges

The submission by any person of any information to the Agency for any purpose in the course of any supervisory or regulatory process of the Agency shall not be construed as waiving, destroying, or otherwise affecting any privilege such person may claim with respect to such information under Federal or State law as to any person or entity other than the Agency. This provision may not be construed to imply or establish that any person waives any privilege applicable to information that is submitted or transferred under any circumstance to which the provision does not apply, or that any person would waive any privilege applicable to any information by submitting the information to the Agency, but for the provision.

Section 113. Risk-based capital requirements

The Agency is authorized to establish risk-based capital requirements for the regulated entities to ensure they operate in a safe and sound manner with sufficient permanent capital to support risk-taking. This section removes the current limitations on the form and content of risk-based capital rules included in the existing statute in order to provide the Agency with broad authority to adopt robust risk-based capital standards to ensure the safe and sound operation of the regulated entities. This section does not eliminate current risk-based capital regulations, which will remain in effect unless amended by the Director.

Section 114. Minimum and critical capital levels

This section authorizes the Director to raise the minimum capital requirements for the enterprises or federal home loan banks, or both, by regulation subject to notice and comment, from the current statutory levels to the extent such an increase is needed to ensure the regulated entities operate in a safe and sound manner, notwithstanding their capital classifications.

The section also provides the Director the authority to require a temporary increase in minimum capital for a regulated entity by order under certain circumstances related to the safety and soundness of the entity. A temporary increase in minimum capital may be required if the Director: (1) makes a determination for reclassification of capital category under the prompt corrective action provisions that an entity is engaging in conduct that could rapidly deplete its capital or significantly decrease the value of assets held, is engaged in an unsafe or unsound practice, or is in an unsafe and unsound condition; (2) determines that the regulated entity has violated any of the prudential standards and as a result of such violation determines that an unsafe or unsound condition exists; or (3) determines that an unsafe or unsound condition exists. A temporary increase in minimum capital ordered under this third provision, however, shall not remain in place for more than 6 months unless the Director makes a renewed determination of the existence of an unsafe and unsound condition.

Additionally, the Director may, at any time by order or regulation, establish such capital or reserve requirements with respect to any program or activity of a regulated entity that the Director considers appropriate to ensure that the regulated entity enterprise operates in a safe and sound manner with sufficient capital and reserves to support the risks that arise in the operations and management of the regulated entity.

This section provides for the periodic review of the capital of the regulated entities and any minimum capital level established under this section. If the Director determines that the circumstances justifying any temporary minimum capital increase made under this section are no longer present, the Director must rescind the temporary increase. The Director cannot lower minimum capital levels below current statutory levels.

Not later than 180 days after the effective date, the Director will establish by regulation critical capital levels for the Federal Home Loan Banks. In establishing critical capital levels for the Federal Home Loan Banks, the Director will take due consideration of the critical capital level established for the enterprises, with such modifications as the Director determines to be appropriate to reflect the difference in operations between the Federal Home Loan Banks and the enterprises.

Section 115. Review of and authority over enterprise assets and liabilities

Section 115 provides the regulator with authority to establish standards for the safe and sound and mission-compliant operation of the enterprises' portfolios. Not later than 180 days after the effective date, the Director must establish standards, after a notice and comment rule making process, by which the portfolio holdings, or rate of growth of the portfolio holdings, of the enterprises will be deemed to be consistent with the mission and the safe and sound operations of the enterprises. The Committee intends that the standards established under this section be designed to support the safe and sound operation of the enterprises, as well as their compliance with their charters and the fulfillment of their missions to provide liquidity and stability to the secondary markets for home mortgages. The standards required under this section are not intended to address potential risks to the financial system that are unrelated to specific considerations of the safe and sound operation of the enterprises' portfolios, nor are they intended to limit the enterprises' portfolios predominantly to assets acquired for the purposes of meeting the enterprises' affordable housing goals.

In developing the standards, the Director must consider a list of factors related to both the safety and soundness of the enterprises and the roles they play in the secondary mortgages markets. The Director is required to consider: (1) the size or growth of the mortgage market; (2) the need for the portfolio in maintaining liquidity or stability of the secondary mortgage market; (3) the need for an inventory of mortgages in connection with securitizations; (4) the need for the portfolio to directly support the affordable housing mission of the enterprises; (5) the liquidity needs of the enterprises; (6) any potential risks posed by the nature of the portfolio holdings; and (7) any additional factors the Director determines to be necessary to carry out the purposes of this section to assess mission-compliance and safety and soundness of the operation of the enterprises. The purpose of the standards-setting required in this section is to provide standards for the safe and sound and mission-compliant operation of the portfolios and the factors therefore are limited to the safety and soundness and mission of the enterprises themselves, not other market participants.

While this section requires the establishment of standards for operation and growth of the portfolios, the Director is provided authority, by order, to make temporary adjustments to the portfolio standards, such as during times of economic distress or market disruption. Such authority could be used by the Director to ensure that the enterprises are able to provide adequate liquidity to the market as needed without violating the standards.

The section requires that the Director monitor the portfolios of the enterprises. Pursuant to this review, and notwithstanding the capital classifications of the enterprises, the Director may by order and subject to such terms and conditions the Director determines to be appropriate, require an enterprise to dispose of or acquire any assets, if the Director determines that such action is consistent with the safety and soundness or mission of the enterprise.

Section 116. Corporate governance of enterprises

This section codifies a 2005 rule making by OFHEO for improvements in corporate governance, regarding boards of directors, compensation, codes of conduct and ethics, conduct and responsibilities of boards of directors, audits, extensions of credit to board members and executive officers, compliance program requirements, change of audit partners, risk management, CEO and CFO certification of disclosure, and other matters.

Section 117. Required registration under Securities Exchange Act of 1934.

Each regulated entity shall be required to register at least one class of the entity's capital stock with the Securities and Exchange Commission (SEC).

Section 118. Liaison with Financial Institutions Examination Council

The Agency is to participate on the Federal Financial Institutions Examination Council (FFIEC) in a liaison capacity. The FFIEC prescribes uniform standards for examination of financial institutions, with federal financial regulators as members.

Section 119. Guarantee fee study

The Agency, in consultation with the federal bank regulatory agencies and HUD, will, within 18 months of enactment, submit to Congress a study concerning the pricing, transparency, and reporting of Fannie Mae, Freddie Mac, and the Federal Home Loan Banks regarding guarantee fees and the practices of other participants in the business of mortgage purchases and securitization.

Section 120. Conforming amendments

This section makes changes that are necessary to conform existing law with new provisions in H.R. 1427, such as eliminating references to the `Office of Federal Housing Enterprise Oversight' and replacing them with the `Federal Housing Finance Agency,' striking sections made unnecessary by earlier parts of the bill, and striking outdated provisions pertaining to the issuance of regulations.

SUBTITLE B--IMPROVEMENT OF MISSION SUPERVISION

Section 131. Transfer of product approval and housing goal oversight

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

Section 132. Review of enterprise products

This section strikes the `program' approval provisions of current law and replaces it with provisions under which the Director shall require each enterprise to submit a written request for and obtain the approval of the Director for a new product before the enterprise may initially offer the product. An enterprise may not offer any new product prior to obtaining approval of the Director, following public notice and 30-day comment period. The Director may approve, or conditionally approve, a new product if the Director determines that: (1) the product is authorized under the enterprise's chartering act; (2) the product is in the public interest; (3) the product is consistent with the safety and soundness of the enterprise and the mortgage finance system; and (4) the product does not materially impair the efficiency of the mortgage finance system.

Immediately upon receipt of a request for approval of a product, the Director is required to publish notice of the request and of the 30-day period for public comment. Not later than 30 days after the close of the public comment period, the Director must approve or deny the product and specify the grounds for the decision in writing. If the Director does not act within the 30-day period to approve or deny a product, the enterprise may offer the product.

This section provides for expedited review of any new activity, service, undertaking or offering that an enterprise determines is not a product. Immediately upon receipt of a notice from an enterprise that a new activity, service, undertaking or offering is not a product, the Director must determine if the activity, service, undertaking or offering consists of, relates to, or involves a product. If the Director determines that any new activity, service, undertaking, or offering consists of, relates to, or involves a product, the Director shall notify the enterprise of that determination, and the new activity, service, undertaking or offering shall be considered a product subject to the established approval process for new products.

The Director may conditionally approve the offering of any product and may establish terms, conditions, or limitations with respect to the product and with which the enterprise must comply.

The product review process does not apply to certain fundamental aspects of enterprise operation. The definition of the term `product' explicitly excludes the automated underwriting system of an enterprise in existence on the date of enactment, including any upgrade to the technology, operating system, or software to operate the system. The term `product' also does not include modifications to 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 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.

This section does not define specifically the term `product' other than by exclusion, due to the difficulty of adequately delineating the scope of offerings that the Director may determine are authorized under the enterprises' charters and meet the other criteria set forth for approval. In determining what offerings or changes to existing offerings rise to the level of a new product that should be subject to notice and approval, this section therefore provides the Director adequate flexibility to implement this provision in a manner that addresses both the need to provide notice to market participants of new products and the need for the enterprises to respond in a timely manner to market demands. The Committee expects that the Agency will establish procedures, similar to those developed by the federal bank regulatory agencies, to provide for a timely and efficient process that will minimize unnecessary burden on the enterprises and originating institutions while assuring prompt and appropriate public notice. As with the banking agencies, the Committee expects that the Agency will establish procedures that provide for appropriate treatment of proprietary business information.

The provision does not apply to existing products or activities that were commenced or offered prior to the enactment of this legislation, but does not limit the authority of the Agency to review products and activities for safety and soundness and compliance with the enterprises' respective charters.

Section 133. Conforming loan limits

This section updates statutory language from 1981 that set conforming loan limits for Fannie Mae and Freddie Mac, and provided for adjustments upward through an index/housing survey. While the conforming loan limit has been raised every year since 1981, this section inserts 2007 conforming loan limits that were set by the current regulator at $417,000 for a one-unit single family residence; $533,850 for a two-unit family residence; $645,300 for a three-unit family residence and $801,950 for a four-unit family residence. Allows for these limits to be adjusted annually, starting on January 1 after the effective date of this legislation, to reflect increases and, for the first time, decreases in housing prices, and a new method for establishing annual adjustments authorized in this section.

This section authorizes Fannie Mae and Freddie Mac to further increase loan limits above the conforming loan limits in areas in which the median home prices are greater than the conforming loan limits. The enterprises may adjust loan limits in any such area up to the lesser of 150 percent of the conforming loan limit or the area median home price. This increase applies only to mortgages on which are based securities issued and sold by an enterprise. This provision is different from current law, which provides similar loan limit adjustments for Alaska, Hawaii, Guam and the Virgin Islands set at 150 percent of the conforming loan limit, without any relationship to median home prices.

The Director must establish a Housing Price Index, which would be subject to a GAO audit on the methodology and timing of the index followed by a report to Congress. The Director will conduct a study, within six months of the effective date, of whether the securitization requirement raises the cost of high-cost area loans, and may terminate the requirement if it is found to raise costs to borrowers.

Section 134. Annual housing report regarding regulated entities

The Director must submit an annual report to Congress after reviewing the Affordable Housing Activities Reports (AHARs) submitted by Fannie Mae and Freddie Mac and certain reports on the Federal Home Loan Banks in supporting low income housing and community development.

The Director's report will examine the affordable housing goals and how each enterprise is complying with those goals and the housing fund provisions, the progress of the Federal Home Loan Banks in their Mfordable Housing Program (AHP) and Community Investment Program (CIP), and whether the regulated entities are achieving their respective missions. The bill requires detailed reporting by the Agency on housing and affordable housing issues and requires a detailed monthly survey of mortgage markets to assist the Agency in this report and in the establishment of the housing price index methodology to determine loan limits. Data collected for the monthly survey must be made public, but the Agency may modify the data in order to not reveal a borrower's identity.

This provision also requires the Agency, by regulation, to establish standards by which mortgages purchased and/or securitized by the enterprises shall be characterized as subprime loans. These standards are solely to provide data for purposes of the Agency report to identify the extent to which each enterprise is engaged in purchasing or other secondary market activities involving subprime loans. In its reports, the Agency also must identify the extent to which each enterprise is purchasing and securitizing subprime loans, and compare the characteristics of subprime loans purchased and securitized by the enterprises with other loans.

Section 135. Annual reports by regulated entities on affordable housing stock

The regulated entities shall, pursuant to regulatory requirements established by the Director, conduct or provide for the conduct of an annual study to determine the levels and changes in levels of affordable housing inventory for the United States, each State, and each community in each State. Affordable housing inventory shall include affordable rental dwelling units and affordable homeownership dwelling units.

Section 136. Revision of housing goals

The Director is required to establish for the enterprises three single family housing goals and a multifamily special affordable housing goal. The bill adds a refinance subgoal to the single family goals, and a subgoal for single family rental housing units. In implementing these goals, the Director and the enterprises are required to address evidence of any disparities in interest rates between minorities and non-minorities of similar creditworthiness. The bill strengthens enforcement authority in the event that enterprises do not meet their housing goals. Compliance with the single-family goals for each year will be measured by whether the annual numerical targets established by the Director are met or exceeded.

Specifically, the bill replaces the three existing housing goals with three single family housing goals that measure the percentage of single family, owner-occupied purchase money mortgages for the following: (1) `low-income' families (families with incomes of 80 percent or less of area median income (AMI)); (2) `very low-income' families (families with incomes of 50 percent or less of AMI) and (3) families that reside in low-income areas (census tracts with median incomes of 80 percent or less of AMI and families with incomes less than 100 percent of AMI who reside in minority tracts). Separate statutory subgoals are established for refinancings, and for single family rental housing units. The Director will set the annual single family housing goal targets (both owner-occupied and rental) prospectively, using the prior three year average of market HMDA data as a baseline, and may increase the targets adjust to reflect expected changes in market performance based on factors similar to those in current law regarding goal establishment, including the ability of the enterprise to lead the industry in each goal area in making mortgage credit available. This provision should provide the Director flexibility to continue the practice of considering the enterprises' penetration into the subprime and other markets.

The Director continues to have discretion to set goals for a multi-year period. Setting multi-year goals allows the enterprises time to plan and incorporate goal-qualifying activities into their longer-term business strategies.

The newly created Multifamily Special Affordable Housing Goal measures mortgages that finance dwelling units for low-income families (families with incomes of 80 percent or less of AMI), very-low income families (families with incomes of 50 percent or less of AMI), and mortgages that finance dwelling units assisted by the low-income housing tax credit. The bill contains additional requirements to increase the purchase of small multifamily mortgages. The Director will give credit towards the Multifamily Special Affordable Housing Goal to dwelling units in multifamily housing that is financed by taxexempt or taxable bonds issued by a State or local housing finance agency if the bonds are secured by a guarantee of an enterprise or if the bonds are not investment grade and are purchased by an enterprise.

An enterprise may petition the Director, in writing, for a reduction in the housing goals. The Director may reduce the goal level only if market and economic conditions or the financial condition of the enterprise require such action, or if efforts to meet the goal would result in liquidity constraints, over-investment in certain market segments, or other consequences contrary to the enterprise's purpose. A denial from the Director to reduce the level of the goal may be appealed in the courts.

The Director shall assign added credit toward achievement of the housing goals for mortgage purchase activities of an enterprise that supports housing that includes a licensed childcare center, or that supports housing that meets energy efficiency or other Federal, State or local environmental standards for the geographic area where the housing is located. The availability of additional credit shall not be used to increase any housing goal, subgoal or target.

Section 137. Duty to serve underserved markets

This section adds a duty for each enterprise to serve underserved markets that lack adequate credit through conventional lending sources by increasing the liquidity of mortgage investments and improving the distribution of investment capital available for mortgage financing for underserved markets. This section instructs the enterprises to undertake activities relating to mortgages on housing for very low (50 percent and less of AMI), low (80 percent and less of AMI) and moderate (100 percent and less of AMI) income families.

The Enterprises are required to lead the industry in developing loan products and flexible underwriting guidelines to facilitate a secondary market in three specified markets--manufactured housing, affordable housing preservation (including through current government programs), and rural housing--and the Director may establish other underserved markets. However, it is not intended that the Director would create percent-of-business or other numeric goals under this section.

Within six months of the effective date, the Director must establish a manner for evaluating compliance of the enterprises under each of the three categories of the duty to serve provisions. When evaluating compliance, the Director will take into consideration: (1) the development of loan products and more flexible underwriting guidelines; (2) the extent of outreach to qualified loan sellers in underserved markets; and (3) the volume of loans purchased in such underserved markets.

The Director must report to Congress annually on this evaluation and the duty-to-serve provisions are enforceable under the same provisions as the housing subgoals.

Section 138. Monitoring and enforcing compliance with housing goals

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

Section 139. Affordable housing fund

This section creates an `Affordable Housing Fund,' to be managed by the Director. Funds are derived through contributions to be made by Fannie Mae and Freddie Mac each year from 2007 through 2012, with the fund sunsetting after this five year period. Contributions are to be made in amounts equal to 1.2 basis points on each enterprise's average total outstanding mortgages (including both those held in portfolio and those securitized) from the prior calendar year. Seventy-five percent of these funds are used for affordable housing fund purposes, and twenty-five percent are allocated to the federal government, to keep the bill deficit neutral. The Director can temporarily suspend allocations by an enterprise upon a finding that the allocation would contribute to the financial instability of the enterprise, would cause the enterprise to be undercapitalized or would prevent the enterprise from successfully completing a capital restoration plan.

Seventy-five percent of the affordable housing funds available in the first year will go to Louisiana and twenty-five percent of such funds will go to Mississippi for affordable housing needs arising out of Hurricanes Katrina and Rita. Thereafter, funds are allocated by formula to the states (including also D.C., federal territories, and federally recognized tribes). This formula is to be developed by HUD, and is to be based on a number of factors, including population, housing affordability, percentage of very and extremely low income families, cost of rehab, and extent of substandard and aging housing. If HUD fails to establish this formula on time, funds are distributed to states based on HOME allocations to states and Participating Jurisdictions.

One-hundred percent of funds must be used for the benefit of very low and extremely low income families. Funds may be used for both rental housing and homeownership, with at least ten percent of funds used by each state for home ownership. Families receiving homeownership assistance must have completed prepurchase counseling prior to buying the home. Funds also may be used for public infrastructure activities in conjunction with housing, but no more than 12.5 percent of funds in any state may be used for this purpose.

Affordable housing grants are to be made to eligible recipients, which can be any `organization, agency, or other entity (including a for-profit entity, a nonprofit entity, and a faith-based organization)' that has demonstrated experience and capacity to conduct an eligible activity, demonstrates the ability and financial capacity to undertake, comply, and manage the eligible activity, and demonstrates its familiarity with the requirements of any other Federal, State, or local housing program that will be used in conjunction with such grant amounts. Grantee funds may only be used for affordable housing uses, and not for administrative costs, except that by regulation the Director can limit the amount of any grant amounts a state, (or D.C. a territory or tribe) may use for administrative costs of carrying out the program to a percentage of such grant amounts, which may not exceed 10 percent of grant funds used.

Each state allocates funds under its own Allocation Plan, to be based on priority housing needs in each state, and on criteria that include greatest impact, geographic diversity, ability to obligate funds in a timely manner, and the extent to which rental housing projects are affordable, especially for extremely low income families. Funds are redistributed from any state that does not obligate funds within 2 years.

This section includes a number of provisions to ensure that the funds are used for housing and are not misused or used for other purposes. The Director is required to adopt regulations to set forth prohibited uses of Fund grant amounts, such as administrative, outreach or other costs of the grantee (other than administrative costs of carrying out the Fund program) or any grant recipient, and political activities, advocacy, lobbying, counseling, travel expense, or preparation or advice on tax returns. Grantees are required to submit annually a report to the Director to describe the activities funded during that year and the grantee's compliance with the allocation plan. These reports will be made publicly available. Other provisions to ensure appropriate use of Fund grant amounts include: (1) a requirement by the Director to establish program regulations; (2) authority for the Director to audit each state's compliance; (3) a requirement that each state develop systems to ensure program compliance and required annual state fund use reports; and (4) authority for the Director to impose penalties on states that do not comply with requirements, including requiring states and grantees to reimburse misused funds.

H.R. 1427 authorizes affordable housing funds allocated under the bill to be transferred at a later date to a national affordable housing trust fund that may be subsequently enacted into law. Although the establishment of an affordable housing fund with monies allocated from the GSEs will play a significant role in providing affordable housing, a national shortage of affordable housing will still exist. A trust fund would serve as a dedicated source of revenue for the production of new housing and the preservation and rehabilitation of existing housing that is affordable for low income people.

The GAO is required to conduct a study and report to Congress within one year of enactment concerning the effect the AHF will have on availability and affordability of credit for homebuyers, and the extent to which the costs to the enterprises of funding the AHF will be passed on to homebuyers.

Section 140. Consistency with mission

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

Section 141. Enforcement

This section expands the enforcement authority currently provided the HUD Secretary with respect to enforcement of the enterprises' housing goals. The expanded authority allows the Director to issue and serve a notice of charges and to impose cease and desist orders and civil money penalties on an enterprise, if the Director determines that the enterprise has: (1) failed to meet a housing goal; (2) failed to submit certain required reports; (3) failed to submit mortgage data and other information and reports required under the chartering acts of the enterprises; (4) failed to submit an acceptable housing plan, if required; or (5) failed to comply with a housing plan or any other order, rule, or regulation under the applicable sections of the Housing and Community Development Act of 1992, as amended by this bill.

The amount of civil money penalties that may be imposed may not exceed $50,000 for each day a failure to meet a housing goal, submit or comply with a required housing plan occurs; and $20,000 per day for failure to submit required reports or information or failure to comply with any order, rule or regulation for each day a failure occurs.

The Director may directly seek enforcement in the United States District Court for the District of Columbia or the United States District Court within the jurisdiction of which the headquarters of the enterprise is located; or may request the Department of Justice to bring the action.

Section 142. Conforming amendments

Makes changes that are necessary to conform existing law with new provisions in H.R. 1427, such as eliminating references to the `Secretary of HUD' and replacing them with the `Director,' striking sections made unnecessary by earlier parts of the bill, and striking outdated provisions pertaining to the issuance of regulations.

SUBTITLE C--PROMPT CORRECTIVE ACTION

Section 151. Capital classifications

This section establishes capital classifications for the Federal Home Loan Banks as well as for Fannie Mae and Freddie Mac. The regulated entities can be classified as: adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized. The Director may reclassify a regulated entity at any time, if: (1) the Director determines in writing that a regulated entity is engaging in conduct that could result in a rapid depletion of core or total capital or, in the case of an enterprise, the value of the property securitized has decreased significantly; (2) after notice and hearing, the Director determines that the entity is in an unsafe or unsound condition; or (3) if the entity is engaging in an unsafe or unsound practice, as deemed by the Director under section 1371(b).

A regulated entity will make no capital distribution if, after making the distribution, the entity would be undercapitalized.

Section 152. Supervisory actions applicable to undercapitalized regulated entities

If a regulated entity is classified as undercapitalized, the Director must `closely monitor' the condition of the regulated entity and review and monitor the entity's compliance with a capital restoration plan. Additionally, the Director will have the authority to restrict the asset growth of an undercapitalized entity. Undercapitalized entities may not acquire any interest in any entity, offer any new product or engage in any new activity, service, undertaking or offering without prior approval from the Director. If the Director determines it is necessary, the Director also may use authority and take actions applicable to significantly undercapitalized enterprises.

Section 153. Supervisory actions applicable to significantly undercapitalized regulated entities

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

Section 154. Authority over critically undercapitalized regulated entities

The Director may establish a conservatorship or receivership over a critically undercapitalized entity for the purpose of reorganizing, rehabilitating, or winding up the affairs of a regulated entity. The grounds for appointing a conservator or receiver include: assets are insufficient to cover obligations; there is a substantial dissipation of assets due to violations of law or unsafe or unsound practices; an unsafe or unsound condition to transact business; willful violations of cease-and-desist orders; concealment of books, papers, records or assets; the inability to meet obligations; losses that will deplete all of the entity's capital; any violation of law likely to cause insolvency or substantial dissipation of assets or earnings; consent by resolution of a regulated entity's board of directors; undercapitalization with no reasonable prospect of becoming adequately capitalized or failure to submit or implement a capital restoration plan; critical undercapitalization; or a determination that an entity is guilty of money laundering.

The Director must appoint the Agency as receiver for a regulated entity if the Director determines in writing that the assets of the regulated entity are and have been for the past month less than its obligations, or that the regulated entity is not and has not been for the past month generally paying its debts as those debts become due. Receivership and conservatorship appointments may be challenged in federal court.

The Agency, as conservator or receiver, may issue regulations as appropriate for the conduct of the conservatorship or receivership. The Agency succeeds to all the rights, titles, powers, and privileges of the regulated entity and of any stockholder, officer, or director of such regulated entity, and title to the books, records, and assets of any other legal custodian of such regulated entity. The Agency shall take over all assets and obligations of the regulated entity, perform all functions of the regulated entity, and preserve and conserve the assets and property of the regulated entity.

The Agency, as conservator, may take such action as may be necessary to put the regulated entity into a sound and solvent condition, and to carry out the business of the entity. As receiver, the Agency may place a regulated entity into liquidation having due regard for the housing finance market and may organize a successor entity.

The Agency, as conservator or receiver, may transfer any asset or liability of the regulated entity in default without any approval, assignment or consent. Any Federal Home Loan Bank may acquire the assets of any Bank in conservatorship or receivership with the approval of the Agency. The Agency, as conservator or receiver, shall pay all valid obligations of the regulated entity, to the extent proceeds of operations or sales are available. The Agency shall have the authority to issue subpoenas for the purposes of carrying out its authorities, and may contract for services relating to the carrying out of its functions, actions, activities, or duties. The Agency also is granted any incidental authorities it may need to carry out its powers as conservator or receiver.

The Agency, as receiver, must promptly publish and mail notice to the creditors of the regulated entities to present their claims to the receiver. The receiver may allow or disallow claims by creditors according to the provisions set forth in this section. The right of a conservator or receiver shall be subject to the limitations on the powers of a receiver under section 402 through 407 of the Federal Deposit Insurance Corporation Improvement Act of 1991 concerning financial system risk.

Mortgages, or interests in pools of mortgages, held in trust, custodial, or agency capacity by a regulated entity shall not be available to satisfy the claims of creditors generally. Such mortgages or interest in a pool of mortgages shall be held by the conservator or receiver for the beneficial owners of such mortgages in accordance with the terms of the agreement creating such trust, custodial, or agency agreement. This provision is intended to protect the interests of holders of mortgage-backed securities by ensuring that the assets backing such securities do not become entangled in the insolvency estate of a regulated entity.

The Agency as conservator or receiver may disaffirm or repudiate any contract or lease to which the regulated entity is a party the performance of which the conservator or receiver determines to be burdensome and the repudiation of which will promote the orderly administration of the affairs of the regulated entity. Specific provisions are established for the treatment of qualified financial contracts, which include securities or commodity contracts, forward contracts, repurchase agreements, swap agreements and master agreements. No provisions of this subsection applies to extensions of credit from any Federal Home Loan Bank or Federal Reserve Bank to any regulated entity, or to any securities interest in the assets of the regulated entity securing such extension of credit.

The Agency may organize a limited-life regulated entity (LLRE) if a regulated entity is in default or it is in danger of default. The Director shall grant a temporary charter to the LLRE and the LLRE shall assume the liabilities of the regulated entity, purchase the assets of the regulated entity, and perform any other temporary functions which the Agency may prescribe. The Agency will not have the authority to revoke the charter of a regulated entity.

Section 155. Conforming amendments

This section makes changes that are necessary to conform existing law to the new provisions included in H.R. 1427.

SUBTITLE D--ENFORCEMENT ACTIONS

Section 161. Cease-and-desist proceedings

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

Section 162. Temporary cease-and-desist proceedings

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

Section 163. Prejudgment attachment

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

Section 164. Enforcement and jurisdiction

The Director is granted independent litigation authority to enforce notices and orders issued under the capital and enforcement provisions of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992. This is in addition to the general authority granted under section 102 to enforce the government-sponsored enterprise provisions of the Housing and Community Development Act of 1992, as amended, any regulation or order thereunder, 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.

Section 165. Civil money penalties

This section establishes three tiers of civil monetary penalties that can be imposed on regulated entities or regulated entity-affiliated parties for violations of this title, the authorizing statutes, or any order, condition, rule, regulation, or the engaging in unsafe or unsound practices.

Under the first tier, violations of this title, the authorizing statutes, or any order, condition, rule, regulation, or the engaging in unsafe or unsound practices shall result in civil money penalties of not more than $10,000 for each day the violation continues.

Under the second tier, if a regulated entity or regulated entity-affiliated party commits any violation described above, recklessly engages in an unsafe or unsound practice, or breaches any fiduciary duty and these actions are part of a pattern of misconduct, will result more than a minimal loss, or result in pecuniary gain or benefit, the party shall forfeit and pay a civil penalty of not more than $50,000 for each day the violation continues.

Under the third tier, if a regulated entity or regulated entity-affiliated party knowingly commits any violation described above, engages in unsafe or unsound practices, or breaches any fiduciary duty, and knowingly or recklessly causes a substantial loss to the regulated entity or a substantial pecuniary gain or benefit to such party, the party shall forfeit and pay a civil penalty not to exceed the maximum amount permitted for each day the violation continues. The maximum daily amount for any civil money penalty that can be assessed is not to exceed $2 million for any individual and for any regulated entity.

Section 166. Removal and prohibition authority

If the Director determines that a regulated entity-affiliated party, directly or indirectly, violated any law, regulation, final cease-and-desist order, written condition or written agreement or engaged in any unsafe or unsound practice, or breach of fiduciary duty and, by reason of the violation, practice or breach, the regulated entity has suffered or will probably suffer financial loss or other damage, or the enterprise-affiliated party received a financial gain or other benefit, and the violation involves personal dishonesty or willful or continuing disregard for the safety and soundness of the entity. Under those circumstances, the Director may by written order and after notice and opportunity for hearing, suspend any regulated entity-affiliated party from office, prohibit such party from further participation in the affairs of the regulated entity, or prohibit the payment of compensation to the party if the Director determines that such action is necessary for protection of the regulated entity and serves such party with written notice of the suspension or prohibition.

Additionally, the Director may suspend or remove any regulated entity-affiliated party who is indicted or convicted of a felony involving dishonesty or breach of trust where continued service poses a threat to the regulated entity or impairs public confidence therein.

A party that is suspended and/or prohibited from participation in the affairs of a regulated entity under this section may apply to the courts for a stay of such suspension.

Section 167. Criminal penalty

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

Section 168. Subpoena authority

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

Section 169. Conforming amendments

This section includes various conforming amendments.

SUBTITLE E--GENERAL PROVISIONS

Section 181. Boards of enterprises

The boards of Fannie Mae and Freddie Mac shall consist of 13 persons elected by the shareholders, or such other number that the Director determines.

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

Within a year, the Agency must submit a report to Congress on: the portfolio holdings of Fannie Mae and Freddie Mac; a description of risk implications for the enterprises of such holdings and the consequent risk management undertaken by the enterprises (including the use of derivatives for hedging purposes) compared with off-balance sheet obligations of the enterprises; analyses of portfolio holdings for safety and soundness, mission fulfillment, and potential systemic risk implications for the enterprises, the housing and capital markets and the financial system of portfolio holdings (including whether such holdings should be limited or reduced over time).

Section 183. Conforming and technical amendments

Makes changes necessary to conform existing law with new provisions included in H.R. 1427, such as setting the pay scale for the Director and Deputy Directors, striking sections made unnecessary by other parts of the bill, and establishing an Office of the Inspector General.

Section 184. Study of alternative secondary market systems

The Agency, in consultation with the Federal Reserve Board, the Department of the Treasury, and the Department of Housing and Urban Development, shall conduct a study of the effects on financial and housing finance markets of alternatives to the current secondary market system for housing finance. Issues specified in this section must be addressed in the study. The Agency will submit a report to Congress on the study within 24 months of the effective date.

TITLE II--FEDERAL HOME LOAN BANKS

Section 201. Definitions

New definitions are provided.

Section 202. Directors

The management of each Federal Home Loan Bank is vested in a board of 13 directors, or such other number as the Director determines appropriate, with terms of four years. All directors of a Bank who are not independent directors shall be elected by the members. Officers or directors of members of a Federal Home Loan Bank located in the district in which the Bank is located will have a majority of the board seats. This provision preserves the requirement in current law for the Agency to maintain the total number of elected directors representing members in any state at a number at least equal to the total number of elected directors representing that state as of December 31, 1960. This provision would not apply to directorships in any Federal Home Loan Bank resulting from the merger of one or more Banks. At least two-fifths of the directors will be independent members appointed by the Agency from a list recommended by the Federal Housing Enterprise Board, with at least 2 being public interest directors. In appointing independent members, the Agency may consult with each Federal Home Loan Bank about the knowledge, skills, and expertise needed on the Bank's board, and must take into consideration the demographic makeup of the community most served by the Affordable Housing Program of the Bank. Each Bank may pay directors for reasonable compensation and expenses, subject to the approval of the Director, which shall be reported to Congress in the Agency's annual report.

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

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

The Director may enforce Federal Home Loan Bank compliance with the Affordable Housing Program and Community Investment Program requirements in the same manner and to the same extent as the Director may monitor and enforce the housing goals for the enterprises.

Section 204. Joint activities of Banks

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

Section 205. Sharing of information between federal home loan banks

Not later than six months after the effective date, the Director shall prescribe rules to ensure that each Federal Home Loan Bank has access to information that the Bank needs to determine the nature and extent of its joint and several liability within the Bank System.

Section 206. Reorganization of banks and voluntary merger

Any two or more Federal Home Loan Banks may merge upon approval of their boards and of the Director of the Agency. The Director shall promulgate regulations establishing the conditions and procedures for the consideration and approval of any voluntary merger.

Section 207. Securities and Exchange Commission disclosure

This section exempts the Federal Home Loan Banks from compliance with some disclosure, reporting and other requirements under the Securities Exchange Act of 1934 (the `'34 Act'), the Securities Act of 1933 (the `'33 Act'), and the Investment Company Act of 1940. In particular, shares of Federal Home Loan Bank stock are deemed exempted securities under the '33 and '34 Acts; Federal Home Loan Bank obligations are deemed `exempted securities' under the '33 and '34 Acts, `government securities' under the '34 Act and the Investment Company Act of 1940, and are excluded from the definition of `government securities broker' and `government securities dealer' under the '34 Act and the Investment Company Act of 1940.

In issuing any final regulations to implement these provisions, the Securities and Exchange Commission must consider the `distinctive characteristics' of the Federal Home Loan Banks when evaluating the accounting treatment of REFCORP, the role of the Federal Home Loan Banks' combined financial statements, the accounting classification of redeemable capital stock, and the accounting treatment related to the joint and several liability for the Federal Home Loan Banks' consolidated obligations.

Section 208. Community financial institution members

The threshold amount of total assets necessary for a Federal Home Loan Bank member to qualify as a community financial institution, and thus to become eligible to obtain long-term advances for small business, small farm, and small agribusiness funding purposes, and to use such loans as collateral for advances, is raised from $500 million to $1 billion. Community financial institutions may also use advances for community development lending and such loans as collateral for advances.

Section 209. Technical and conforming amendments

Makes changes necessary to conform existing law with new provisions included in H.R. 1427, such as eliminating references to the `Office of Federal Housing Enterprise Oversight' and the `Federal Housing Finance Board' and replacing them with the `Director of the Federal Housing Finance Agency.' Amends the Sarbanes-Oxley Act of 2002 by adding the Agency to the list of those federal agencies with which the Public Company Accounting Oversight Board may share information without loss of confidentiality.

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

GAO is required to study the use of the Federal Home Loan Banks' Affordable Housing Program to fund long-term care facilities for low- and moderate-income individuals and its applicability to the affordable housing funds of the enterprises. Not later than one year from the date of enactment, GAO will submit a report to the Director and to Congress regarding the results of the study.

Section 211. Effective date

Except as specifically provided, this title will be effective 6 months from the date of enactment.

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

SUBTITLE A--OFFICE OF FEDERAL HOUSING ENTERPRISE OVERSIGHT

Section 301. Abolishment of OFHEO

The Office of Federal Housing Enterprise Oversight (OFHEO) and the positions of the Director and Deputy Director of OFHEO are abolished six months after the date of enactment. During that six-month period, the Director of OFHEO will, for the purpose of winding up the affairs of OFHEO, manage the Office. OFHEO also will fulfill all its current duties under law during this time period. The bill contains various provisions for an orderly transfer of functions.

Section 302. Continuation and coordination of certain regulations

All regulations, determinations and resolutions that were issued by OFHEO and in effect on the date of abolishment will continue to be in effect and enforceable by or against the Director of the Agency until modified, terminated, set aside or superseded by the Agency, any court of competent jurisdiction, or operation of law.

Section 303. Transfer and rights of employees of OFHEO

OFHEO employees are transferred to the Agency, will be guaranteed a position with the Agency and will retain their benefits for one year following the transfer. The Director has the right to decline a transfer of employees occupying positions in the excepted service or the Senior Executive Service or pursuant to any appointment authority established pursuant to law or Office of Personnel Management (OPM) regulations, to the extent that such authority relates to positions excepted on the basis of their confidential, policy-making, policy-determining or policy-advocating responsibilities, and noncareer positions in the Senior Executive Service. If the Director determines, at the end of the 1-year period that a reorganization of the combined workforce is required, that reorganization shall be deemed a major reorganization for purposes of affording affected employees' retirement.

Section 304. Transfer of property and facilities

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

SUBTITLE B--FEDERAL HOUSING FINANCE BOARD

Section 321. Termination of the Federal Housing Finance Board

The Federal Housing Finance Board is abolished six months after enactment. During that six-month period, the Finance Board, will for the purposes of winding up the affairs of the Finance Board, manage the Finance Board. The Finance Board also will fulfill all its current duties under law during this time period. The bill makes various provisions for an orderly transfer of functions.

Section 322. Continuation and coordination of certain regulations

All regulations, determinations and resolutions that were issued by the Finance Board and in effect on the date of abolishment will continue to be in effect and enforceable by or against the Director of the Agency until modified, terminated, set aside or superseded by the Agency, any court of competent jurisdiction, or operation of law.

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

Finance Board employees are transferred to the Agency, will be guaranteed a position with the Agency and will retain their benefits for one year following the transfer. The Director has the right to decline a transfer of employees occupying positions in the excepted service or the Senior Executive Service or pursuant to any appointment authority established pursuant to law or OPM regulations, to the extent that such authority relates to positions excepted on the basis of their confidential, policy-making, policy-determining or policy-advocating responsibilities, and noncareer positions in the Senior Executive Service. If the Director determines, at the end of the 1-year period that a reorganization of the combined workforce is required, that reorganization shall be deemed a major reorganization for purposes of affording affected employees' retirement.

Section 324. Transfer of property and facilities

The property of Finance Board will become the property of the Agency.

SUBTITLE C--DEPARTMENT OF HOUSING: AND URBAN DEVELOPMENT

Section 341. Termination of enterprise-related functions

The Secretary of HUD, in consultation with the Director of OFHEO, will determine, within three months of enactment, the HUD functions, duties and activities regarding oversight or regulation of the enterprises, and employees of HUD necessary to perform such functions, duties and activities. During the six-month period beginning on the date of enactment, HUD will, for the purpose of winding up the affairs of HUD regarding enterprise-related functions, manage the enterprise-related employees and functions of HUD. HUD also will fulfill all its current duties under law during this time period. The bill makes various provisions for an orderly transfer of functions.

Section 342. Continuation and coordination of certain regulations

All regulations, orders and determinations that were issued by HUD and in effect on the date of termination abolishment will continue to be in effect and enforceable by or against the Director of the Agency until modified, terminated, set aside or superseded by the Agency, any court of competent jurisdiction, or operation of law.

Section 343. Transfer and rights of employees of Department of Housing and Urban Development

Enterprise-related employees of HUD will be transferred to the Agency, will be guaranteed a position with the Agency and will retain their benefits for one year following the transfer. Enterprise-related employees of HUD may decline transfer to a position at the Agency, and in such case shall be guaranteed a position at HUD and shall not be involuntarily separated or reduced in grade or compensation for 12 months after the date that the transfer would otherwise have occurred, except for cause. The Director has the right to decline a transfer of employees occupying positions in the excepted service or the Senior Executive Service or pursuant to any appointment authority established pursuant to law or OPM regulations, to the extent that such authority relates to positions excepted on the basis of their confidential, policy-making, policy-determining or policy-advocating responsibilities, and noncareer positions in the Senior Executive Service. If the Director determines, at the end of the 1-year period that a reorganization of the combined workforce is required, that reorganization shall be deemed a major reorganization for purposes of affording affected employees' retirement.

Section 344. Transfer of appropriations, property, and facilities

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

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DISSENTING VIEWS

H.R. 1427 includes a number of important reforms which, if enacted, would significantly enhance the safety and soundness regulation of the housing Government Sponsored Enterprises (GSEs). The legislation also provides for the creation of an Affordable Housing Fund to be financed by Fannie Mae and Freddie Mac and distributed largely by state housing agencies. During the Committee's consideration of H.R. 1427, Republicans offered a number of amendments to address deficiencies in the current construction of the affordable Housing Fund. These amendments were designed to ensure that the funds were delivered more efficiently and effectively to their intended beneficiaries--extremely low-income Americans in desperate need of decent affordable housing options. By failing to adopt these amendments, the Committee missed an opportunity to build a broader bipartisan consensus for GSE reform as this legislation heads to the House floor and an uncertain future in the Senate.

There is general consensus on the Committee that serious affordable housing needs in our nation are going unmet. The disagreement arises over whether legislation designed to enhance regulatory oversight of the housing GSEs is a proper vehicle for a massive new government program that is extraneous to the bill's underlying purpose. Of equal concern is what effect assessing Fannie Mae and Freddie Mac over $500 million annually for the next five years will have on those Americans seeking to purchase a home or refinance an existing mortgage. As publicly traded companies accountable to their shareholders, Fannie Mae and Freddie Mac will inevitably seek to pass along these new assessments to their customers, resulting in what amounts to a middle-class mortgage tax on homeowners across America.

We are also concerned that, as presently constituted, the Affordable Housing Fund contains insufficient safeguards to ensure that grants will be distributed through a process that is objective, cost effective, competitive and fully transparent. Although the bill prohibits the use of funds for political purposes, political considerations could enter into the grant process administered by the States, with the potential to turn the program into a `slush fund' for influential politicians and advocacy groups. To address these concerns, we offered two amendments at the Committee markup of H.R. 1427.

The Bachus amendment would have redirected the proceeds from the Fund to the Affordable Housing Program administered by the Federal Home Loan Bank System. The amendment provided for the affordable housing funds to be allocated by the newly created GSE regulator among the twelve Federal Home Loan Banks, with all of the funds in the first year going to areas affected by Hurricane Katrina, as in the underlying legislation.

Established by statute in 1989, the Affordable Housing Program requires the Federal Home Loan Banks to direct 10 percent of their profits to affordable housing projects. Universally considered a success, the program features a locally-based, competitively-awarded--and most importantly, proven--delivery system. Indeed, in her testimony at the March 15 Full Committee hearing on GSE reform, Sheila Crowley of the National Low Income Housing Coalition praised the Affordable Housing Program as `highly successful' and a `conceptual cousin' of what the fund in H.R. 1427 hopes to accomplish.

In the Home Loan Bank program, member financial institutions propose projects to be supported by the fund as part of their own community outreach programs, in cooperation with nonprofit partners of their choice. The twelve individual Home Loan Banks fund and administer these grant projects in their respective regions.

This regionally based delivery system allows the funds to be tailored to localized housing and community development needs. In fact, local input is often cited as one of the most important reasons for the success of the Affordable Housing Program. There is just enough centralization in the program to maintain an organized structure, with rigorous checks and balances. Indeed, in its 16-year history, the Affordable Housing Program has distributed $2.3 billion in housing assistance grants with not one question raised as to the effectiveness and the integrity of the grant process. Moreover, the local public-private partnerships represent a common-sense way to utilize funding in a way that delivery directly to the states never could.

The Home Loan Banks already have the personnel, systems, and regulatory oversight in place to effectively implement a program that the Congressional Budget Office estimates will result in the distribution of $3 billion over the period 2008-2011. The Banks' Affordable Housing Program has a time-tested track record and enjoys the confidence of the affordable housing sector and financial services industry alike. This is truly an instance in which there is no need to `reinvent the wheel.'

Like the Bachus amendment, the Biggert amendment sought to establish a more effective delivery mechanism for the new affordable housing funds, by redirecting the GSEs' contributions to a competitive grant program administered by the Department of Housing and Urban Development (HUD) and modeled after the Federal Home Loan Bank Affordable Housing Program. To ensure timely disbursement of the funds, the amendment directed HUD to structure the grant program based on HUD's HOME program formula and criteria. In addition, the amendment capped the Fund at the lesser of 1.2 basis points of the GSEs' average total mortgage portfolios or $520 million per year, and set a cap on administrative fees of no more than 10 percent of Affordable Housing Fund dollars. Finally, the amendment created a level playing field for both non-profits and for-profits to apply for grants, and added a sixth criterion for selection of applications that included the ability to leverage the grants through use of other funding sources.

Like the Federal Home Loan Bank System, HUD has long experience in administering grant programs of the kind envisioned by H.R. 1427. HUD administers over one hundred housing programs aimed at increasing homeownership, supporting community development, and increasing access to affordable housing. Among HUD's many housing programs is the HOME program, which Congress created in 1990 and today is the largest Federal block grant to State and local governments designed exclusively to create affordable housing for low-income households, allocating approximately $2 billion annually among the States and hundreds of localities nationwide.

Unlike the new GSE regulator, which will have only one national office, HUD has a national headquarters, 10 regional offices, and 81 field offices. HUD's regional and field offices are primarily responsible for administering HUD's programs and act as the primary HUD point of contact for States, local public housing authorities, communities, organizations, and individuals. More importantly, HUD's regional and field offices have a firsthand understanding of the needs of local communities across the country and provide regional and local oversight of federally operated and funded housing programs.

In sum, adoption of either of the alternatives we offered in Committee would have significantly improved the underlying legislation, by establishing a more reliable, objective, and competitive system for funding affordable housing priorities. While we continue to oppose inclusion of an Affordable Housing Fund in H.R. 1427, if the provisions are to remain in the bill, we intend to work to ensure that this new $3 billion program is used not to subsidize the activities of political advocacy groups, but rather to address the very affordable housing needs that exist in our country.
Spencer Bachus.
Judy Biggert.

DISSENTING VIEWS OF REPRESENTATIVE PAUL

H.R. 1427 fails to address the core problems with the Government Sponsored Enterprises (GSEs). Furthermore, since this legislation creates new government programs that will further artificially increase the demand for housing, H.R. 1427 increases the economic damage that will occur from the bursting of the housing bubble. The main problem with the GSEs is the special privileges the federal government gives the GSEs. According to the Congressional Budget Office, the housing related GSEs received almost 20 billion dollars worth of indirect federal subsidies in fiscal year 2004 alone, while Wayne Passmore of the Federal Reserve estimates the value of the GSE's federal subsidies to be between $122 and $182 billion.

One of the major privileges the federal government grants to the GSEs is a line of credit from the United States Treasury. According to some estimates, the line of credit may be worth over two billion dollars. GSEs also benefit from an explicit grant of legal authority given to the Federal Reserve to purchase the debt of the GSEs. GSEs are the only institutions besides the United States Treasury granted explicit statutory authority to monetize their debt through the Federal Reserve. This provision gives the GSEs a source of liquidity unavailable to their competitors.

This implicit promise by the government to bail out the GSEs in times of economic difficulty helps the GSEs attract investors who are willing to settle for lower yields than they would demand in the absence of the subsidy. Thus, the line of credit distorts the allocation of capital. More importantly, the line of credit is a promise on behalf of the government to engage in a massive unconstitutional and immoral income transfer from working Americans to holders of GSE debt. This is why I offered an amendment to cut off this line of credit.

The connection between the GSEs and the government helps isolate the GSEs' managements from market discipline. This isolation from market discipline is the root cause of the mismanagement occurring at Fannie and Freddie. After all, if investors did not believe that the federal government would bail out Fannie and Freddie if the GSEs faced financial crises, then investors would have forced the GSEs to provide assurances that the GSEs are following accepted management and accounting practices before investors would consider Fannie and Freddie to be good investments.

Former Federal Reserve Chairman Alan Greenspan has expressed concern that the government subsidies provided to the GSEs makes investors underestimate the risk of investing in Fannie Mae and Freddie Mac. Although he has endorsed many of the regulatory `solutions' being considered here today, Chairman Greenspan has implicitly admitted the subsidies are the true source of the problems with Fannie and Freddie.

H.R. 1427 compounds these problems by further insulating the GSEs from market discipline. By creating a `world-class' regulator, Congress would send a signal to investors that investors need not concern themselves with investigating the financial health and stability of Fannie and Freddie since a `world-class' regulator is performing that function.

However, one of the forgotten lessons of the financial scandals of a few years ago is that the market is superior at discovering and punishing fraud and other misbehavior than are government regulators. After all, the market discovered, and began to punish, the accounting irregularities of Enron before the government regulators did.

Concerns have been raised about the new regulator's independence from the Treasury Department. Although the Treasury now supports the creation of a new regulator, the compromise between Treasury and the drafters of H.R. 1427 does not address concerns that isolating the regulator from Treasury oversight may lead to regulatory capture. Regulatory capture occurs when regulators serve the interests of the businesses they are supposed to be regulating instead of the public interest. While H.R. 1427 does have some provisions that claim to minimize the risk of regulatory capture, regulatory capture is always a threat where regulators have significant control over the operations of an industry. After all, the industry obviously has a greater incentive than any other stakeholder to influence the behavior of the regulator.

The flip side of regulatory capture is that managers and owners of highly subsidized and regulated industries are more concerned with pleasing the regulators than with pleasing consumers or investors, since the industries know that investors will believe all is well if the regulator is happy. Thus, the regulator and the regulated industry may form a symbiosis where each looks out for the other's interests while ignoring the concerns of investors.

Furthermore, my colleagues should consider the constitutionality of an `independent regulator.' The Founders provided for three branches of govenment--an executive, a judiciary, and a legislature. Each branch was created as sovereign in its sphere and there were to be clear lines of accountability for each branch. However, independent regulators do not fit comfortably within the three branches; nor are they totally accountable to any branch. Regulators at these independent agencies often make judicial-like decisions, but they are not part of the judiciary. They often make rules, similar to the ones regarding capital requirements, that have the force of law, but independent regulators are not legislative. And, of course, independent regulators enforce the laws in the same way, as do other parts of the executive branch; yet independent regulators lack the day-to-day accountability to the executive that provides a check on other regulators.

Thus, these independent regulators have a concentration of powers of all three branches and lack direct accountability to any of the democratically chosen branches of government. This flies in the face of the Founders' opposition to concentrations of power and government bureaucracies that lack accountability. These concerns are especially relevant considering the remarkable degree of power and autonomy this bill gives to the regulator. For example, in the scheme established by H.R. 1427 the regulator's budget is not subject to appropriations. This removes a powerful mechanism for holding the regulator accountable to Congress. While the regulator is accountable to a board of directors, this board may conduct all deliberations in private because it is not subject to the sunshine act.

Ironically, by transferring the risk of widespread mortgage defaults to the taxpayers through government subsidies and convincing investors that all is well because a `world-class' regulator is ensuring the GSEs' soundness, the government increases the likelihood of a painful crash in the housing market. This is because the special privileges of Fannie and Freddie have distorted the housing market by allowing Fannie and Freddie to attract capital they could not attract under pure market conditions. As a result, capital is diverted from its most productive uses into housing. This reduces the efficacy of the entire market and thus reduces the standard of living of all Americans.

Despite the long-term damage to the economy inflicted by the government's interference in the housing market, the government's policy of diverting capital into housing creates a short-term boom in housing. Like all artificially created bubbles, the boom in housing prices cannot last forever. When housing prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of the mortgage debt will also have a loss. These losses will be greater than they would have been had government policy not actively encouraged over-investment housing.

H.R. 1427 further distorts the housing market by artificially inflating the demand for housing through the creation of a national housing trust fund. This fund further diverts capital to housing that, absent government intervention, would be put to use more closely matching the demands of consumers. Thus, this new housing program will reduce efficiency and create yet another unconstitutional redistribution program.

Perhaps the Federal Reserve can stave off the day of reckoning by purchasing the GSEs' debt and pumping liquidity into the housing market, but this cannot hold off the inevitable drop in the housing market forever. In fact, postponing the necessary and painful market corrections will only deepen the inevitable fall. The more people are invested in the market, the greater the effects across the economy when the bubble bursts.

Instead of addressing government polices encouraging the misallocation of resources to the housing market, H.R. 1427 further introduces distortion into the housing market by expanding the authority of federal regulators to approve the introduction of new products by the GSEs. Such regulation inevitably delays the introduction of new innovations to the market, or even prevents some potentially valuable products from making it to the market. Of Course, these new regulations are justified in part by the GSEs' government subsidies. We once again see how one bad intervention in the market (the GSEs' government subsidies) leads to another (the new regulations).

In conclusion, H.R. 1427 compounds the problems with the GSEs and may increases the damage that will be inflicted by a bursting of the housing bubble. This is because this bill creates a new unaccountable regulator and introduces further distortions into the housing market via increased regulatory power. H.R. 1427 also violates the Constitution by creating yet another unaccountable regulator with quasi-executive, judicial, and legislative powers. Instead of expanding unconstitutional and market distorting government bureaucracies, Congress should act to remove taxpayer support from the housing GSEs before the bubble bursts and taxpayers are once again forced to bail out investors who were misled by foolish government interference in the market.

RON PAUL.

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AMENDMENTS

1. H.AMDT.203 to H.R.1427 An amendment numbered 12 printed in the Congressional Record to strike section 139 pertaining to affordable housing fund.
Sponsor: Rep Bachus, Spencer [AL-6] (introduced 5/17/2007) Cosponsors (None)
Latest Major Action: 5/17/2007 House amendment not agreed to. Status: On agreeing to the Bachus amendment (A001) Failed by recorded vote: 148 - 269 (Roll no. 378).

2. H.AMDT.204 to H.R.1427 An amendment numbered 22(1) printed in the Congressional Record to clarify recommendations on criteria for the Federal Housing Enterprise Board when appointing individuals as directors.
Sponsor: Rep Kanjorski, Paul E. [PA-11] (introduced 5/17/2007) Cosponsors (None)
Latest Major Action: 5/17/2007 House amendment agreed to. Status: On agreeing to the Kanjorski amendment (A002) Agreed to by voice vote.

3. H.AMDT.205 to H.R.1427 An amendment numbered 29 printed in the Congressional Record to provide that the director shall temporarily suspend allocations if it is determined that allocations are contributing to an increase in the cost or mortgages to homebuyers.
Sponsor: Rep Hensarling, Jeb [TX-5] (introduced 5/17/2007) Cosponsors (None)
Latest Major Action: 5/17/2007 House amendment not agreed to. Status: On agreeing to the Hensarling amendment (A003) Failed by recorded vote: 164 - 253 (Roll no. 379).

4. H.AMDT.206 to H.R.1427 An amendment numbered 21 printed in the Congressional Record to permit the director, at the request of a State, to waive the requirement that homebuyers attend in-person financial management counseling before receiving affordable housing grants, and allows the homebuyers to receive the counseling through alternate forms such as online, or over the phone.
Sponsor: Rep Hinojosa, Ruben [TX-15] (introduced 5/17/2007) Cosponsors (None)
Latest Major Action: 5/17/2007 House amendment agreed to. Status: On agreeing to the Hinojosa amendment (A004) Agreed to by voice vote.

5. H.AMDT.207 to H.R.1427 An amendment numbered 4 printed in the Congressional Record to clarify that potential risks should be posed to the enterprises with respect to the nature of portfolio holdings.
Sponsor: Rep Neugebauer, Randy [TX-19] (introduced 5/17/2007) Cosponsors (None)
Latest Major Action: 5/17/2007 House amendment agreed to. Status: On agreeing to the Neugebauer amendment (A005) Agreed to by voice vote.

6. H.AMDT.208 to H.R.1427 An amendment comprised of the following amendments offered en bloc: Amendments nos. 2, as modified, 3, 6, 7, 11, 20, and 31 printed in the Congressional Record.
Sponsor: Rep Frank, Barney [MA-4] (introduced 5/17/2007) Cosponsors (None)
Latest Major Action: 5/17/2007 House amendment agreed to. Status: On agreeing to the Frank (MA) amendments (A006) as modified Agreed to by voice vote.

7. H.AMDT.209 to H.R.1427 An amendment numbered 14 printed in the Congresssional Record to add a new subsection on determination and suspension of allocations.
Sponsor: Rep McHenry, Patrick T. [NC-10] (introduced 5/17/2007) Cosponsors (None)
Latest Major Action: 5/17/2007 House amendment not agreed to. Status: On agreeing to the McHenry amendment (A007) Failed by recorded vote: 176 - 240 (Roll no. 380).

8. H.AMDT.210 to H.R.1427 An amendment numbered 15 printed in the Congressional Record to clarify the director's authority to determine the appropriate size of the board of directors of the Federal National Mortgage Association between 7 and 15 members.
Sponsor: Rep Kanjorski, Paul E. [PA-11] (introduced 5/17/2007) Cosponsors (None)
Latest Major Action: 5/17/2007 House amendment not agreed to. Status: On agreeing to the Kanjorski amendment (A008) Failed by recorded vote: 154 - 263 (Roll no. 381).

9. H.AMDT.211 to H.R.1427 An amendment numbered 27 printed in the Congressional Record to add a new paragraph limiting contributions to affordable housing fund when the government has an on-budget and an off-budget surplus.
Sponsor: Rep Roskam, Peter J. [IL-6] (introduced 5/17/2007) Cosponsors (None)
Latest Major Action: 5/17/2007 House amendment not agreed to. Status: On agreeing to the Roskam amendment (A009) Failed by recorded vote: 173 - 245 (Roll no. 382).

10. H.AMDT.212 to H.R.1427 An amendment numbered 26 printed in the Congressional Record to add a new section providing for consideration of location and energy efficiency in enterprise underwriting guidelines.
Sponsor: Rep Blumenauer, Earl [OR-3] (introduced 5/17/2007) Cosponsors (None)
Latest Major Action: 5/17/2007 By unanimous consent, the Blumenauer amendment was withdrawn.

11. H.AMDT.213 to H.R.1427 An amendment numbered 17 printed in the Congressional Record to insert new language requiring GSEs to limit their retained portfolios to mortgages and mortgage backed securities that exclusivley support affordable housing, and particularly mortgages extended to households having incomes below the median income for the area in which the property subject to the mortgage is located.
Sponsor: Rep Garrett, Scott [NJ-5] (introduced 5/17/2007) Cosponsors (None)
Latest Major Action: 5/17/2007 House amendment not agreed to. Status: On agreeing to the Garrett (NJ) amendment (A011) Failed by recorded vote: 92 - 322 (Roll no. 383).

12. H.AMDT.214 to H.R.1427 An amendment numbered 5 printed in the Congressional Record to redistribute affordable housing grants for use in disaster areas that were allotted to Louisiana and Mississippi to include both Alabama and Texas in addition to Louisiana and Mississippi.
Sponsor: Rep Green, Al [TX-9] (introduced 5/17/2007) Cosponsors (None)
Latest Major Action: 5/17/2007 By unanimous consent, the Green, Al amendment was withdrawn.

13. H.AMDT.215 to H.R.1427 An amendment numbered 16 printed in the Congressional Record to strike low-income housing grants from the affordable housing fund and to insert housing assistance provisions for the areas affected by Hurricanes Katrina and Rita; strike language outlining affordable housing grant formulas for Indian tribal members and directs funds to be allocated "based on the formula used for the Continuum of Care competition of the Department of Housing and Urban Development"; and insert language requiring that affordable housing grants after 2007 be reserved only for rental housing voucher assistance in accordance with the Housing act of 1937.
Sponsor: Rep Feeney, Tom [FL-24] (introduced 5/17/2007) Cosponsors (None)
Latest Major Action: 5/17/2007 House amendment offered

14. H.AMDT.216 to H.R.1427 An amendment numbered 8 printed in the Congressional Record to prevent illegal immigrants from owning or renting housing built by funds from the affordable housing fund by requiring adult occupants of that housing to establish their legal residency through the use of secure forms of identification.
Sponsor: Rep Price, Tom [GA-6] (introduced 5/17/2007) Cosponsors (None)
Latest Major Action: 5/17/2007 House amendment offered

15. H.AMDT.217 to H.R.1427 An amendment numbered 10 printed in the Congressional Record to requrie the Director of the new GSE Regulator to provide information to mortgage originators about any added mortgage costs to consumers associated with the new Housing Fund; in turn, originators would have to furnish this written information to homebuyers at or before closing to qualify their mortgages for purchase, service, holding, lending on the security of or selling by the GSE's. The amendment provides that all of the costs associated with the new regulatory requirement created would be paid for with funds from the new Housing Fund.
Sponsor: Rep Sessions, Pete [TX-32] (introduced 5/17/2007) Cosponsors (None)
Latest Major Action: 5/17/2007 House amendment offered

16. H.AMDT.218 to H.R.1427 An amendment numbered 34 printed in the Congressional Record to redistribute the affordable housing grants for use in disaster areas from a ratio of 75% for Louisiana and 25% for Mississippi to create 10% for Texas by taking 5% each from the allotment for Louisiana and Mississippi.
Sponsor: Rep Brady, Kevin [TX-8] (introduced 5/17/2007) Cosponsors (None)
Latest Major Action: 5/17/2007 House amendment offered

17. H.AMDT.219 to H.R.1427 An amendment numbered 25 printed in the Congressional Record to make economically disadvantaged counties that receive payments under the Secure Rural Roads and Community Self-Determination Act eligible to receive Affordable Housing fund grants.
Sponsor: Rep Doolittle, John T. [CA-4] (introduced 5/17/2007) Cosponsors (None)
Latest Major Action: 5/17/2007 Mr. Frank (MA) raised a point of order against the Doolittle amendment (A017). Mr. Frank stated that the provisions of the Doolittle amendment exceed the scope of the bill and as such, the amendment is not germane. The Chair sustained the point of order.

18. H.AMDT.220 to H.R.1427 An amendment numbered 32 printed in the Congressional Record to strike the High Cost Area increases in Section 133 to the Conforming Loan Limit.
Sponsor: Rep Hensarling, Jeb [TX-5] (introduced 5/17/2007) Cosponsors (None)
Latest Major Action: 5/17/2007 By unanimous consent, the Hensarling amendment was withdrawn.

19. H.AMDT.221 to H.R.1427 An amendment numbered 33 printed in the Congressional Record.
Sponsor: Rep Miller, Gary G. [CA-42] (introduced 5/17/2007) Cosponsors (None)
Latest Major Action: 5/17/2007 By unanimous consent, the Miller, Gary amendment was withdrawn.

20. H.AMDT.222 to H.R.1427 An amendment numbered 9 printed in the Congressional Record to require that the director of a GSE study and certify to Congress that its contributions to the affordable housing fund wouldn't contribute to its financial instability or impair its safety and soundness.
Sponsor: Rep Price, Tom [GA-6] (introduced 5/17/2007) Cosponsors (None)
Latest Major Action: 5/17/2007 House amendment offered

21. H.AMDT.223 to H.R.1427 An amendment numbered 19 printed in the Congressional Record to prohibit all three mortgage lending government-sponsored enterprises (GSE's) from obtaining primary residential mortgages being granted to any person who does not have a valid Social Security number.
Sponsor: Rep Doolittle, John T. [CA-4] (introduced 5/17/2007) Cosponsors (None)
Latest Major Action: 5/17/2007 House amendment offered

22. H.AMDT.224 to H.R.1427 An amendment designated as the second amendment numbered 22 printed in the Congressional Record to prohibit GSE's from treating the costs of making allocations to the affordable housing funds as either regular business expenses or redirecting the costs through increased fees, decreased premiums, or any other manner.
Sponsor: Rep Garrett, Scott [NJ-5] (introduced 5/17/2007) Cosponsors (None)
Latest Major Action: 5/17/2007 House amendment agreed to. Status: On agreeing to the Garrett (NJ) amendment (A022) as modified Agreed to by voice vote.

23. H.AMDT.225 to H.R.1427 An amendment numbered 30 printed in the Congressional Record to strike the Affordable Housing Trust Fund budgetary placeholder language in the bill.
Sponsor: Rep Hensarling, Jeb [TX-5] (introduced 5/17/2007) Cosponsors (None)
Latest Major Action: 5/17/2007 House amendment offered

24. H.AMDT.226 to H.R.1427 An amendment numbered 1 printed in the Congressional Record to set a cap on the amount of funds available in the Affordable Housing Fund.
Sponsor: Rep Neugebauer, Randy [TX-19] (introduced 5/18/2007) Cosponsors (None)
Latest Major Action: 5/18/2007 House amendment offered

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