HR 1223

112th CONGRESS
1st Session

H. R. 1223

To amend the Securities Exchange Act of 1934 to ensure mortgages held or securitized by Fannie Mae and Freddie Mac and asset-backed securities issued by such enterprises are treated similarly as other mortgages and asset-backed securities for purposes of the credit risk retention requirements under such Act.

IN THE HOUSE OF REPRESENTATIVES

March 29, 2011

Mr. GARRETT (for himself, Mr. BACHUS, Mr. HENSARLING, and Mr. PEARCE) introduced the following bill; which was referred to the Committee on Financial Services

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A BILL

To amend the Securities Exchange Act of 1934 to ensure mortgages held or securitized by Fannie Mae and Freddie Mac and asset-backed securities issued by such enterprises are treated similarly as other mortgages and asset-backed securities for purposes of the credit risk retention requirements under such Act.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `GSE Credit Risk Equitable Treatment Act of 2011'.

SEC. 2. EQUITABLE TREATMENT OF FANNIE MAE AND FREDDIE MAC UNDER CREDIT RISK RETENTION REQUIREMENTS.

(a) In General- Section 15G of the Securities Exchange Act of 1934 (15 U.S.C. 78o-11) is amended--

(1) in subsection (c)(1)--

(A) in subparagraph (F), by striking `and' at the end;

(B) in subparagraph (G), by striking the period at the end and inserting `; and'; and

(C) by adding at the end the following new subparagraph:

`(H) provide for no difference in the treatment of an asset-backed security securitized by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation, solely because of securitization by such enterprise, from the treatment of asset-backed securities securitized by any other entity.'; and

(2) in subsection (e)--

(A) by redesignating paragraph (6) as paragraph (7); and

(B) by inserting after paragraph (5) the following new paragraph:

`(6) MORTGAGES OF FANNIE MAE AND FREDDIE MAC- The regulations issued under paragraph (4) shall provide that the purchase, holding, or securitization of any mortgage by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation shall not solely of itself have any effect on whether such mortgage qualifies as a qualified residential mortgage under such paragraph.'.

(b) Regulations- Not later than 90 days after the date of the enactment of this Act, the Federal banking agencies (as such term is defined in section 15G(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78o-11(a)), the Securities and Exchange Commission, the Secretary of Housing and Urban Development, and the Director of the Federal Housing Finance Agency, shall jointly issue regulations to carry out subsections (c)(1)(H) and (e)(6) of section 15G of the Securities Exchange Act of 1934, as added by the amendments made by subsection (a) of this section.

END