To establish the Office of Housing Finance Oversight in the Department of the Treasury to ensure the financial safety and soundness of Fannie Mae, Freddie Mac, and the Federal home loan banks.

July 21, 2003

Mr. ROYCE introduced the following bill; which was referred to the Committee on Financial Services

To establish the Office of Housing Finance Oversight in the Department of the Treasury to ensure the financial safety and soundness of Fannie Mae, Freddie Mac, and the Federal home loan banks.

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

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

(a) SHORT TITLE- This Act may be cited as the `Housing Finance Regulatory Restructuring Act of 2003'.

(b) TABLE OF CONTENTS-

Sec. 1. Short title and table of contents.

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

Sec. 101. Establishment of Office of Housing Finance Oversight.

Sec. 102. Financial safety and soundness of enterprises.

Sec. 103. Charter compliance of enterprises.

Sec. 104. Supervision of Federal Home Loan Bank System.

Sec. 105. Amendments to title 5, United States Code.

Sec. 106. Financial Institutions Examination Council.

Sec. 107. Effective date.

TITLE II--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY

Sec. 201. Abolishment of OFHEO and Federal Housing Finance Board.

Sec. 202. Continuation and coordination of certain regulations.

Sec. 203. Transfer and rights of employees of abolished agencies.

Sec. 204. Transfer of property and facilities.

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

SEC. 101. ESTABLISHMENT OF OFFICE OF HOUSING FINANCE OVERSIGHT.

(a) IN GENERAL- Part 1 of Subtitle A of title XIII of the Housing and Community Development Act of 1992 is amended by striking sections 1311 and 1312 (12 U.S.C. 4511, 4512) and inserting the following new sections:

`SEC. 1311. ESTABLISHMENT OF OFFICE OF HOUSING FINANCE OVERSIGHT.

`(a) ESTABLISHMENT- There is established the Office of Housing Finance Oversight, which shall be a bureau in the Department of the Treasury. The Office shall succeed to the authority of the Director of the Office of Federal Housing Enterprise Oversight of the Department of Housing and Urban Development and the Federal Housing Finance Board, and the general regulatory and any other authority of the Secretary of Housing and Urban Development with respect to the enterprises (except as specifically provided otherwise in this Act).

`(b) PROHIBITION OF MERGER OF OFFICE- Notwithstanding any other provision of this law, the Secretary of the Treasury may not merge or consolidate the Office, or any of the functions or responsibilities of the Office, with any other office or bureau of the Department of the Treasury or with any other function or program administered by the Secretary.

`SEC. 1312. DIRECTOR.

`(a) ESTABLISHMENT OF POSITION-

`(1) IN GENERAL- There is established the position of the Director of the Office of Housing Finance Oversight, who shall be the head of the Office of Housing Finance Oversight and shall be subject to the general oversight of the Secretary of the Treasury.

`(2) AUTHORITY TO PRESCRIBE REGULATIONS- The Director may prescribe such regulations and issue such orders as the Director may determine to be necessary for carrying out this Act and the functions assigned to the Director under the Federal National Mortgage Association Charter Act and the Federal Home Loan Mortgage Corporation Act.

`(3) AUTONOMY OF DIRECTOR- The Secretary of the Treasury may not intervene in any matter or proceeding before the Director (including agency enforcement actions) unless otherwise specifically provided by law.

`(4) RULEMAKING- The Secretary of the Treasury may not delay or prevent the issuance of any rule or the promulgation of any regulation by the Director.

`(b) APPOINTMENT; TERM-

`(1) APPOINTMENT- The Director shall be appointed by the President, by and with the advice and consent of the Senate, from among individuals who are citizens of the United States.

`(2) TERM- The Director shall be appointed for a term of 5 years.

`(3) VACANCY- A vacancy in the position of Director which occurs before the expiration of the term for which a Director was appointed shall be filled in the manner established in paragraph (1) and the Director appointed to fill such vacancy shall be appointed only for the remainder of such term.

`(4) SERVICE AFTER END OF TERM- An individual may serve as Director after the expiration of the term for which appointed until a successor Director has been appointed.

`(5) TRANSITIONAL PROVISION- Notwithstanding paragraphs (1) and (2), the Director of the Office of Federal Housing Enterprise Oversight of the Department of Housing and Urban Development on the effective date under section 107 of the Housing Finance Regulatory Restructuring Act of 2003 shall be the Director until the date on which that individual's term as Director of the Office of Federal Housing Enterprise Oversight would have expired.

`(c) PROHIBITION ON FINANCIAL INTERESTS- The Director shall not have a direct or indirect financial interest in any enterprise, any member of any Federal home loan bank, or any holding company of any such member.

`(d) DEPUTY DIRECTORS-

`(1) IN GENERAL- The Office shall have two Deputy Directors. An individual may not be appointed as Deputy Director if the individual has served as an executive officer or director of an enterprise, a Federal home loan bank, or a member of a Federal home loan bank at any time during the 3-year period ending upon the appointment of such individual as Deputy Director. In the event of the death, resignation, sickness, or absence of the Director, the Deputy Director for Safety and Soundness shall serve as acting Director until the return of the Director or the appointment of a successor pursuant to subsection (b).

`(2) DEPUTY DIRECTOR FOR SAFETY AND SOUNDNESS- One of the Deputy Directors referred to in paragraph (1) shall be the Deputy Director for Safety and Soundness, who shall be appointed by the Director from among individuals who are citizens of the United States and have a demonstrated understanding of finance. The Director shall assign to the Deputy Director for Safety and Soundness all functions, powers, and duties of the Director--

`(A) with respect to the enterprises, that--

`(i) before the effective date of the Housing Finance Regulatory Restructuring Act of 2003, were functions, powers, or duties of the Director of the Office of Federal Housing Enterprise Oversight of the Department of Housing and Urban Development; or

`(ii) are primarily related to the duty under section 1313; and

`(B) with respect to the Federal home loan banks, that--

`(i) before the effective date of the Housing Finance Regulatory Restructuring Act of 2003, were functions, powers, or duties of the Federal Housing Finance Board; or

`(ii) are related to the supervision, regulation, or oversight of the Federal home loan banks.

`(3) DEPUTY DIRECTOR FOR HOUSING ENTERPRISE CHARTER COMPLIANCE- One of the Deputy Directors referred to in paragraph (1) shall be the Deputy Director for Housing Enterprise Charter Compliance, who shall be appointed by the Director from among individuals who are citizens of the United States and have a demonstrated understanding of finance. The Director shall assign to the Deputy Director for Housing Enterprise Charter Compliance all functions, powers, and duties of the Director with respect to the enterprises that--

`(A) before the effective date of the Housing Finance Regulatory Restructuring Act of 2003, were the functions, powers, or duties of the Secretary of Housing and Urban Development; or

`(B) are primarily related to compliance of the enterprises with their chartering Acts.

`(e) DELEGATION AUTHORITY-

`(1) IN GENERAL- Subject only to the limitations in subsection (d) and paragraph (2) of this subsection, the Director may delegate to any employee, representative, or agent any power of the Director.

`(2) LIMITATION- Notwithstanding paragraph (1), the Director shall not, directly or indirectly, after October 10, 1989, delegate to any Federal home loan bank or to any officer, director, or employee of a Federal home loan bank, any power involving examining, supervising, taking enforcement action with respect to, or otherwise regulating any savings association, savings and loan holding company, or other person subject to regulation by the Director.'.

(b) APPOINTMENT OF DIRECTOR- Notwithstanding the effective date under section 107 or any other provision of law, the President may, at any time after the date of the enactment of this Act, appoint an individual to serve as the Director of the Office of Housing Finance Oversight in accordance with the provisions of the amendment made by subsection (a) of this section.

(c) PERSONNEL- Section 1315 of the Housing and Community Development Act of 1992 (12 U.S.C. 4515) is amended--

(1) in subsection (a)--

(A) by striking `The' and inserting `Subject to title II of the Housing Finance Regulatory Restructuring Act of 2003, the'; and

(B) by adding at the end the following new sentence: `Notwithstanding any other provision of this section, in no event shall the Director delegate any function to any employee, administrative unit of any Federal home loan bank, or joint office of the Federal Home Loan Bank System.';

(2) in subsection (d)--

(A) in the subsection heading, by striking `HUD' and inserting `DEPARTMENT OF THE TREASURY'; and

(B) by striking `Housing and Urban Development' and inserting `the Treasury'; and

(3) by striking subsection (f).

(d) FUNDING- Section 1316 of the Housing and Community Development Act of 1992 (12 U.S.C. 4516) is amended--

(1) by striking subsection (a) and inserting the following new subsection:

`(a) ANNUAL ASSESSMENTS-

`(1) DIRECTOR- The Director shall establish and collect from the enterprises annual assessments in an amount not exceeding the amount sufficient to provide for reasonable costs and expenses of the Director, with respect to regulation and supervision of the enterprises, including the expenses of any examinations under section 1317 and the expenses of obtaining any reviews under section 1319.

`(2) SECRETARY OF HUD- The Secretary of Housing and Urban Development shall establish and collect from the enterprises annual assessments in an amount not exceeding the amount sufficient to provide for reasonable costs and expenses of the Department of Housing and Urban Development in carrying out the responsibilities of the Secretary of Housing and Urban Development under this subtitle, the Federal National Mortgage Association Charter Act, and the Federal Home Loan Mortgage Corporation Act.';

(2) in subsection (b)--

(A) in paragraph (1)--

(i) by inserting `and to the Secretary of Housing and Urban Development' after `Director';

(ii) by inserting `paragraph (1) and (2), respectively, of' before `subsection (a)'; and

(iii) by inserting `under such paragraph' after `total annual assessment'; and

(B) in paragraph (2)--

(i) by striking `The annual assessment' and inserting `Each of the annual assessments pursuant to paragraphs (1) and (2) of subsection (a)'; and

(ii) by realigning paragraph (2) two ems from the left margin, so as to align the left margin of such paragraph with the left margins of paragraphs (1) and (3);

(3) in subsection (c)--

(A) by inserting `for an assessment under subsection (a)(1) that are' after `The semiannual payments'; and

(B) by adding at the end the following new sentence: `The Director may adjust the amounts of any semiannual assessments for an assessment under subsection (a)(1) that are to be paid pursuant to subsection (b) by an enterprise, as necessary in the discretion of the Director, to ensure that the costs of enforcement activities under subtitles B and C for an enterprise are borne only by that enterprise.';

(4) in subsection (d)--

(A) by inserting `by the Director or by the Secretary of Housing and Urban Development' before `from an enterprise'; and

(B) by inserting `by the Director or by the Secretary of Housing and Urban Development, as applicable,' before `for the following year';

(5) by striking subsection (f) and inserting the following new subsecton:

`(f) FUND-

`(1) ESTABLISHMENT- There is established in the Treasury of the United States a fund to be known as the Federal Housing Enterprises Oversight Fund.

`(2) DEPOSITS- Notwithstanding any other provision of law, the following amounts shall be deposited in the Fund:

`(A) DIRECTOR'S ASSESSMENTS ON ENTERPRISES- Any assessments collected by the Director from the enterprises pursuant to this section, which shall be deposited in an account of the Director for the enterprises.

`(B) DIRECTORS ASSESSMENTS ON FEDERAL HOME LOAN BANKS- Any receipts of the Director derived from assessments levied upon the Federal home loan banks pursuant to section 18(b) of the Federal Home Loan Bank Act and from other sources (other than receipts from the sale of consolidated Federal home loan bank bonds and debentures issued under section 11 of such Act), which shall be deposited in an account of the Director for the Federal home loan banks.

`(C) SECRETARY'S ASSESSMENTS ON ENTERPRISES- Any amounts collected by the Secretary of Housing and Urban Development, which shall be deposited in an account of such Secretary.

`(3) AVAILABILITY- Any amounts in the Fund are hereby made available, without fiscal year limitation, as follows:

`(A) DIRECTOR'S RESPONSIBILITIES FOR ENTERPRISES- To the Director, to the extent of amounts in the Director's account established pursuant to paragraph (2)(A), for carrying out the supervisory and regulatory responsibilities of the Director, with respect to the enterprises, including any necessary administrative and nonadministrative expenses of the Director in carrying out the purposes of this title, the Federal National Mortgage Association Charter Act, and the Federal Home Loan Mortgage Corporation Act.

`(B) DIRECTOR'S RESPONSIBILITIES FOR FEDERAL HOME LOAN BANKS- To the Director, to the extent of amounts in the Director's account established pursuant to paragraph (2)(B), for carrying out the supervisory and regulatory responsibilities of the Director, with respect to the Federal home loan banks.

`(C) SECRETARY'S RESPONSIBLITIES FOR ENTERPRISES- To the Secretary of Housing and Urban Development, to the extent of amounts in the Secretary's account established pursuant to paragraph (2)(C), for carrying out the regulatory responsibilities of the Secretary, with respect to the enterprises.'; and

(6) in subsection (g)--

(A) by striking paragraphs (1) and (2) and inserting the following new paragraphs:

`(1) FINANCIAL OPERATING PLANS AND FORECASTS- Before the beginning of each fiscal year--

`(A) the Director shall submit a copy of the financial operating plans and forecasts for the Director, with respect to regulation and supervision of the enterprises, to the Secretary of the Treasury and the Director of the Office of Management and Budget; and

`(B) the Secretary of Housing and Urban Development shall submit, to the Director, a copy of the financial operating plans and forecasts for the Department of Housing and Urban Development, with respect to responsibilities and activities of the Secretary under this subtitle.

`(2) REPORTS OF OPERATIONS- As soon as practicable after the end of each fiscal year and each quarter thereof--

`(A) the Director shall submit a copy of the report of the results of the operations of the Director, with respect to regulation and supervision of the enterprises, during such period to the Secretary of the Treasury and the Director of the Office of Management and Budget; and

`(B) the Secretary of Housing and Urban Development shall submit, to the Director, a report of the results of the operations of the Department of Housing and Urban Development, with respect to responsibilities and activities of the Secretary under this subtitle.'; and

(B) in paragraph (3)--

(i) by striking `(A)';

(ii) by striking `, and (B)' and inserting the following: `. The annual plans, forecasts, and reports required under paragraphs (1)(B) and (2)(B) shall be included'; and

(iii) by inserting `of Housing and Urban Development' before the period at the end.

(e) PUBLIC DISCLOSURE OF FINAL ORDERS AND AGREEMENTS- Section 1319C of the Housing and Community Development Act of 1992 (12 U.S.C. 4522) is amended--

(1) in subsection (a)--

(A) in paragraph (1), by inserting `or the Federal home loan banks, as the case may be' before the semicolon; and

(B) in paragraph (2), by inserting `or under the authority of the Director under the Federal Home Loan Bank Act' after `subtitle C';

(2) in subsection (c), by inserting `or the Federal home loan banks' after `the enterprise'; and

(3) in subsection (e), by inserting `or under the authority of the Director under the Federal Home Loan Bank Act' before the period at the end.

(f) LIMITATION ON SUBSEQUENT EMPLOYMENT- Section 1319D of the Housing and Community Development Act of 1992 (12 U.S.C. 4523) is amended by inserting `or any Federal home loan bank' after `an enterprise'.

(g) INFORMATION, RECORDS, AND MEETINGS- Section 1319F of the Housing and Community Development Act of 1992 (12 U.S.C. 4525) is amended by striking `Code' and all that follows through `agencies' and inserting `Code, the Office shall be considered an agency'.

(h) REGULATIONS- Section 1319G of the Housing and Community Development Act of 1992 (12 U.S.C. 4526) is amended by striking subsection (a) and inserting the following new subsection:

`(a) AUTHORITY- The Director shall issue any regulations and orders necessary to carry out the duties of the Director and to carry out this title and the responsibilities of the Director under the Federal National Mortgage Association Charter Act, the Federal Home Loan Mortgage Corporation Act, and the Federal Home Loan Bank Act and to ensure that the purposes of this title and such Acts are accomplished.'.

(i) DEFINITIONS- Section 1303 of the Housing and Community Development Act of 1992 (12 U.S.C. 4502) is amended--

(1) in paragraph (5), by striking `Office of Federal Housing Enterprise Oversight of the Department of Housing and Urban Development' and inserting `Office of Housing Finance Oversight of the Department of the Treasury';

(2) in paragraphs (8), (10), and (19), by striking `Secretary' each place such term appears and inserting `Director';

(3) in paragraph (14), by striking `Office of Federal Housing Enterprise Oversight of the Department of Housing and Urban Development' and inserting `Office of Housing Finance Oversight of the Department of the Treasury';

(4) by striking paragraph (15); and

(5) by redesignating paragraphs (16) through (19) as paragraphs (15) through (18), respectively.

SEC. 102. FINANCIAL SAFETY AND SOUNDNESS OF ENTERPRISES.

(a) IN GENERAL- Subtitle A of title XIII of the Housing and Community Development Act of 1992 (12 U.S.C. 4513) is amended--

(1) in section 1313 (12 U.S.C. 4513)--

(A) by striking the section designation and section heading and all that follows through the end of subsection (d) and inserting the following:

`SEC. 1313. FINANCIAL SAFETY AND SOUNDNESS DUTY.

`(a) DUTY- It shall be the duty of the Director to ensure that the enterprises and the Federal home loan banks are adequately capitalized and operating safely, in accordance with this title.';

(B) in subsection (e), by inserting `of the Treasury' after `Secretary';

(C) by redesignating subsection (e) as subsection (b); and

(D) by adding at the end the following new subsections:

`(b) ENFORCEMENT AUTHORITY- In addition to any other authority of the Director to take an enforcement or remedial action with respect to an enterprise or a Federal home loan bank, the Director may issue cease-and-desist orders, temporary cease-and-desist orders (including orders to take affirmative action), and suspension and removal orders, and assess civil money penalties, with respect to the enterprises and the Federal Home Loan Banks to the same extent and under the same procedures and conditions as the appropriate Federal banking agencies are authorized under section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818) with respect to insured depository institutions.

`(c) SAFETY AND SOUNDNESS STANDARDS- The Director shall prescribe safety and soundness standards with respect to the enterprises and the Federal home loan banks pursuant to the same authority under section 39 of the Federal Deposit Insurance Act (12 U.S.C. 1831s) and that shall have the same force and effect with respect to the enterprises and the Federal home loan banks as is provided under such section for safety and soundness standards prescribed by the appropriate Federal banking agencies for insured depository institutions.'; and

(2) by striking the designation and heading for such subtitle and for part 1 of such subtitle and inserting the following:

`Subtitle A--Supervision and Regulation

`PART 1--ESTABLISHMENT OF REGULATOR'.

(b) CONFORMING AMENDMENTS TO HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1992- Title XIII of the Housing and Community Development Act of 1992 is amended--

(1) in section 1361(f) (12 U.S.C. 4611(f)), by inserting `of the Treasury' after `Secretary';

(2) in section 1367(c) (12 U.S.C. 4617(c)), by striking paragraph (1); and

(3) by striking section 1383 (12 U.S.C. 1451 note).

(c) AMENDMENTS TO FEDERAL NATIONAL MORTGAGE ASSOCIATION CHARTER ACT- The Federal National Mortgage Association Charter Act (12 U.S.C. 1716 et seq.) is amended by striking `Director of the Office of Federal Housing Enterprise Oversight of the Department of Housing and Urban Development' each place such term appears and inserting `Director of the Office of Housing Finance Oversight of the Department of the Treasury' in--

(1) section 303(c)(2) (12 U.S.C. 1718(c)(2));

(2) section 309(d)(3)(B) (12 U.S.C. 1723a(d)(3)(B)); and

(3) section 309(k)(1).

(d) AMENDMENTS TO FEDERAL HOME LOAN MORTGAGE CORPORATION ACT- The Federal Home Loan Mortgage Corporation Act is amended--

(1) by striking `Director of the Office of Federal Housing Enterprise Oversight of the Department of Housing and Urban Development' each place such term appears and inserting `Director of the Office of Housing Finance Oversight of the Department of the Treasury' in--

(A) section 303(b)(2) (12 U.S.C. 1452(b)(2));

(B) section 303(h)(2) (12 U.S.C. 1452(h)(2)); and

(C) section 307(c)(1) (12 U.S.C. 1456(c)(1)); and

(2) in section 306(i) (12 U.S.C. 1455(i))--

(A) by striking `section 1316(c)' and inserting `section 306(c)'; and

(B) by striking `section 106' and inserting `section 1316'.

(e) AMENDMENT TO TITLE 18, UNITED STATES CODE- Section 1905 of title 18, United States Code, is amended by striking `Office of Federal Housing Enterprise Oversight' and inserting `Office of Housing Finance Oversight of the Department of the Treasury'.

(f) AMENDMENTS TO FLOOD DISASTER PROTECTION ACT OF 1973- Section 102(f)(3)(A) of the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a) is amended by striking `Director of the Office of Federal Housing Enterprise Oversight of the Department of Housing and Urban Development' and inserting `Director of the Office of Housing Finance Oversight of the Department of the Treasury'.

SEC. 103. CHARTER COMPLIANCE OF ENTERPRISES.

(a) AUTHORITY OF DIRECTOR- Part 2 of subtitle A of title XIII of the Housing and Community Development Act of 1992 (12 U.S.C. 4541 et seq.) is amended--

(1) by striking the designation and heading for the part and subpart A and inserting the following:

`PART 2--CHARTER COMPLIANCE AUTHORITY

`Subpart A--Authority of Director';

(2) by striking section 1321 (12 U.S.C. 4541);

(3) in section 1328--

(A) in the section heading, by striking `by secretary'; and

(B) by striking `Banking, Finance and Urban Affairs' and inserting `Financial Services'; and

(4) in subpart A, by striking `Secretary' each place such term appears (except in section 1324) and inserting `Director'.

(b) AUTHORITY OF SECRETARY OF HUD FOR HOUSING GOALS-

(1) IN GENERAL- Section 1331 of the Housing and Community Development Act of 1992 (12 U.S.C. 4561) is amended--

(A) in the first sentence of subsection (a), by inserting `of Housing and Urban Development' after `The Secretary'; and

(B) by adding at the end the following new subsection:

`(d) DEFINITION- For purposes of this part and subpart B, the term `Secretary' means the Secretary of Housing and Urban Development.'.

(2) ANNUAL REPORT ON HOUSING GOALS- Section 1324 of the Housing and Community Development Act of 1992 (12 U.S.C. 4544) is amended by inserting `of Housing and Urban Development' after `Secretary', each place such term appears.

(c) AMENDMENTS TO FEDERAL NATIONAL MORTGAGE ASSOCIATION CHARTER ACT- The Federal National Mortgage Association Charter Act is amended--

(1) in section 302(b)(6) (12 U.S.C. 1717(b)(6)), by striking `Secretary' and inserting `Director of the Office of Housing Finance Oversight of the Department of the Treasury';

(2) in section 309(m) (12 U.S.C. 1723a(m))--

(A) in paragraph (1), in the matter preceding subparagraph (A), by striking `Secretary' the first place such term appears and inserting `Director of the Office of Housing Finance Oversight of the Department of the Treasury'; and

(B) by striking `Secretary' each other place such term appears and inserting `Director'; and

(3) in section 309(n) (12 U.S.C. 1723a(n))--

(A) in paragraph (1)--

(i) by inserting `the Director of the Office of Housing Finance Oversight of the Department of the Treasury,' after `Senate,'; and

(ii) by inserting `of Housing and Urban Development' after `Secretary'; and

(B) in paragraphs (2) and (3), by striking `Secretary' each place such term appears, and inserting `Director'.

(d) AMENDMENTS TO FEDERAL HOME LOAN MORTGAGE CORPORATION ACT- The Federal Home Loan Mortgage Corporation Act is amended--

(1) in section 305(c) (12 U.S.C. 1454(c)), by striking `Secretary' and inserting `Director of the Office of Housing Finance Oversight of the Department of the Treasury';

(2) in section 307(e) (12 U.S.C. 1456(e))--

(A) in paragraph (1), in the matter preceding subparagraph (A), by striking `Secretary' the first place such term appears and inserting `Director of the Office of Housing Finance Oversight of the Department of the Treasury'; and

(B) by striking `Secretary' each other place such term appears and inserting `Director'; and

(3) in section 307(f) (12 U.S.C. 1456(f))--

(A) in paragraph (1)--

(i) by inserting `the Director of the Office of Housing Finance Oversight of the Department of the Treasury,' after `Senate,'; and

(ii) by inserting `of Housing and Urban Development' after `Secretary'; and

(B) in paragraphs (2) and (3), by striking `Secretary' each place such term appears, and inserting `Director'.

(e) AMENDMENTS TO HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1980- The Housing and Community Development Act of 1980 is amended--

(1) in section 330 (12 U.S.C. 1723a note)--

(A) by striking `Secretary of Housing and Urban Development or the Secretary of the Treasury' each place such term appears and inserting `Director of the Office of Housing Finance Oversight of the Department of the Treasury'; and

(B) by striking `, as the case may be,'; and

(2) in subsections (a)(2) and (b)(2) of section 339 (12 U.S.C. 1717 note), by striking `Secretary of Housing and Urban Development' each place such term appears and inserting `Director of the Office of Housing Finance Oversight of the Department of the Treasury'.

(f) CONFORMING AMENDMENT- Part 3 of subtitle A of title XIII of the Housing and Community Development Act of 1992 (Public Law 102-550; 106 Stat. 3969) is hereby repealed.

SEC. 104. SUPERVISION OF FEDERAL HOME LOAN BANK SYSTEM.

(a) FEDERAL HOME LOAN BANK ACT- The Federal Home Loan Bank Act is amended--

(1) in section 2 (12 U.S.C. 1422), by striking paragraph (1) and inserting the following new paragraph:

`(1) DIRECTOR- The term `Director' means the Director of the Office of Housing Finance Oversight of the Department of the Treasury established under title XIII of the Housing and Community Development Act of 1992 (12 U.S.C. 4501 et seq.).';

(2) by striking section 2A (12 U.S.C. 1422a) and inserting the following new section:

`SEC. 2A. SUPERVISION AND REGULATION OF BANKS.

`The Federal home loan banks shall, to the extent provided in title XIII of the Housing and Community Development Act of 1992 (12 U.S.C. 4501 et seq.) and this Act, be subject to the supervision and regulation of the Director of the Office of Housing Finance Oversight of the Department of the Treasury.';

(3) in section 2B (12 U.S.C. 1422b)--

(A) in the section heading, by striking `powers and duties' and inserting `enforcement authority of director';

(B) in subsection (a)--

(i) by striking all of the matter that precedes paragraph (1) and inserting the following:

`The Director shall have the following powers:';

(ii) by striking paragraphs (3) and (4); and

(iii) by redesignating paragraphs (5), (6), and (7) as paragraphs (3), (4), and (5), respectively; and

(C) by striking subsections (b), (c), and (d);

(4) in section 8, in the section heading, by striking `by the board';

(5) in section 21 (12 U.S.C. 1441)--

(A) in subsection (b), in the heading for paragraph (8), by striking `FEDERAL HOUSING FINANCE BOARD' and inserting `DIRECTOR'; and

(B) in subsection (i), in the heading for paragraph (2), by striking `FEDERAL HOUSING FINANCE BOARD' and inserting `DIRECTOR';

(6) in section 23 (12 U.S.C. 1443), by striking `Board of Directors of the Federal Housing Finance Board' and inserting `Director';

(7) by striking `the Finance Board' each place it appears and inserting `the Director';

(8) by striking `Federal Housing Finance Board' each place it appears and inserting `Director';

(9) by striking `the Board' each place such term appears (except in subsections (a), (k)(2)(B)(i), and (n)(6)(C)(ii) of section 21A (12 U.S.C. 1441a), subsections (e)(7)(A) and (k)(7) of section 21B (12 U.S.C. 1441b), and the first two places such term appears in section 22 (12 U.S.C. 1442)), and inserting `the Director';

(10) by striking `The Board' each place such term appears and inserting `The Director';

(11) by striking `the Board's' each place such term appears and inserting `the Director's'; and

(12) by striking `The Board's' each place such term appears and inserting `The Director's'.

(b) FINANCING CORPORATION- The amendments made by this title shall not affect the appointment or term of any member, or of the chairperson, of the Directorate of the Financing Corporation who is serving on the date such amendments take effect.

(c) REFERENCES TO FHFB- Any reference in any Federal law enacted before the date of the enactment of this Act to the Federal Housing Finance Board shall be treated as referring to the Director of the Office of Housing Finance Oversight of the Department of the Treasury.

(d) TECHNICAL AMENDMENT- Section 111 of Public Law 93-495 (12 U.S.C. 250) is amended by striking `Federal Housing Finance Board' and inserting `Director of the Office of Housing Finance Oversight of the Department of the Treasury'.

SEC. 105. AMENDMENTS TO TITLE 5, UNITED STATES CODE.

(a) EXECUTIVE SCHEDULE PAY RATES- Subchapter II of chapter 53 of title 5, United States Code, is amended--

(1) in section 5313, by striking the item relating to the Director of the Office of Federal Housing Enterprise Oversight, Department of Housing and

Urban Development and inserting the following new item:

`Director of the Office of Housing Finance Oversight, Department of the Treasury.';

(2) in section 5314, by striking the item relating to the Chairperson of the Federal Housing Finance Board; and

(3) in section 5315, by striking the item relating to the Directors, Federal Housing Finance Board.

(b) DEFINITION OF AGENCY- Section 3132(a)(1)(D) of title 5, United States Code, is amended--

(1) by striking `the Federal Housing Finance Board,'; and

(2) by striking `Office of Federal Housing Enterprise Oversight of the Department of Housing and Urban Development' and inserting `Office of Housing Finance Oversight of the Department of the Treasury'.

SEC. 106. FINANCIAL INSTITUTIONS EXAMINATION COUNCIL.

The Federal Financial Institutions Examination Council Act of 1978 is amended--

(1) in section 1003 (12 U.S.C. 3302)--

(A) in paragraph (1), by inserting `Director of the Office of Housing Finance Oversight of the Department of the Treasury,' after `Supervision,'; and

(B) in paragraph (3), by striking `or a credit union;' and inserting `a credit union, a Federal home loan bank, or an enterprise (as such term is defined in section 1303 of the Housing and Community Development Act of 1992 (12 U.S.C. 4502)).';

(2) in section 1004 (12 U.S.C. 3303)--

(A) in paragraph (4), by inserting a semicolon at the end;

(B) by redesignating paragraph (5) as paragraph (6); and

(C) by inserting after paragraph (4) the following new paragraph:

`(5) the Director of the Office of Housing Finance Oversight of the Department of the Treasury; and'; and

(3) in section 1006(d) (12 U.S.C. 3305(d)), by striking `and employees of the Federal Housing Finance Board'.

SEC. 107. EFFECTIVE DATE.

Except as specifically provided otherwise in this title, the amendments made by this title shall take effect on, and shall apply beginning on, the expiration of the 6-month period beginning on the date of the enactment of this Act.

TITLE II--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY

SEC. 201. ABOLISHMENT OF OFHEO AND FEDERAL HOUSING FINANCE BOARD.

(a) IN GENERAL- Effective upon the effective date under section 107, the following entities and positions are abolished:

(1) The Office of Federal Housing Enterprise Oversight of the Department of Housing and Urban Development and the positions of the Director and Deputy Director of such Office.

(2) The Federal Housing Finance Board, any Office within such Board (including the Office of Finance), and the Board of Directors of such Board.

(b) DISPOSITION OF AFFAIRS-

(1) IN GENERAL- During the period beginning on the date of the enactment of this Act and ending on the effective date under section 107, the Director of the Office of Federal Housing Enterprise Oversight and the Chairperson of the Federal Housing Finance Board shall, solely for the purpose of winding up the affairs of the Office of Federal Housing Enterprise Oversight and the Federal Housing Finance Board, respectively--

(A) manage the employees of such Office and Board and provide for the payment of the compensation and benefits of any such employee which accrue before the effective date of the transfer of such employee pursuant to section 203; and

(B) take any other action necessary for the purpose of winding up the affairs of the Office and the Board.

(c) STATUS OF EMPLOYEES BEFORE TRANSFER- The amendments made by title I and the abolishment of the Office of Federal Housing Enterprise Oversight and the Federal Housing Finance Board under subsection (a) of this section may not be construed to affect the status of any employee of such Office or Board as employees of an agency of the United States for purposes of any other provision of law before the effective date of the transfer of any such employee pursuant to section 203.

(d) USE OF PROPERTY AND SERVICES-

(1) PROPERTY- The Director of the Office of Housing Finance Oversight of the Department of the Treasury may use the property of the Office of Federal Housing Enterprise Oversight and the Federal Housing Finance Board to perform functions which have been transferred to such Director for such time as is reasonable to facilitate the orderly transfer of functions transferred pursuant to any other provision of this Act or any amendment made by this Act to any other provision of law.

(2) AGENCY SERVICES- Any agency, department, or other instrumentality of the United States (including any Federal home loan bank), and any successor to any such agency, department, or instrumentality, which was providing supporting services to the Office of Federal Housing Enterprise Oversight or the Federal Housing Finance Board before the expiration of the period under subsection (a) in connection with functions that are transferred to the Director of the Office of Housing Finance Oversight of the Department of the Treasury shall--

(A) continue to provide such services, on a reimbursable basis, until the transfer of such functions is complete; and

(B) consult with any such agency to coordinate and facilitate a prompt and reasonable transition.

(e) SAVINGS PROVISIONS RELATING TO FHFB-

(1) EXISTING RIGHTS, DUTIES, AND OBLIGATIONS NOT AFFECTED- Subsection (a) shall not affect the validity of any right, duty, or obligation of the United States, the Federal Housing Finance Board, or any other person, which--

(A) arises under or pursuant to the Federal Home Loan Bank Act or any other provision of law applicable with respect to such Board; and

(B) existed on the day before the abolishment under subsection (a) of this section.

(2) CONTINUATION OF SUITS- No action or other proceeding commenced by or against the Federal Housing Finance Board, or any Federal home loan bank with respect to any function of the Board which was delegated to employees of such bank, shall abate by reason of the enactment of this Act, except that the Director of the Office of Housing Finance Oversight of the Department of the Treasury shall be substituted for the Federal Housing Finance Board or the Federal home loan bank as a party to any such action or proceeding.

(f) SAVINGS PROVISIONS RELATING TO OFHEO-

(1) EXISTING RIGHTS, DUTIES, AND OBLIGATIONS NOT AFFECTED- Subsection (a) shall not affect the validity of any right, duty, or obligation of the United States, the Director of the Office of Federal Housing Enterprise Oversight, or any other person, which--

(A) arises under or pursuant to title XIII of the Housing and Community Development Act of 1992, the Federal National Mortgage Association Charter Act, the Federal Home Loan Mortgage Corporation Act, or any other provision of law applicable with respect to such Office; and

(B) existed on the day before the abolishment under subsection (a) of this section.

(2) CONTINUATION OF SUITS- No action or other proceeding commenced by or against the Director of the Office of Federal Housing Enterprise Oversight shall abate by reason of the enactment of this Act, except that the Director of the Office of Housing Finance Oversight of the Department of the Treasury shall be substituted for the Director as a party to any such action or proceeding.

SEC. 202. CONTINUATION AND COORDINATION OF CERTAIN REGULATIONS.

All regulations, orders, determinations, and resolutions that--

(1) were issued, made, prescribed, or allowed to become effective by--

(A) the Office of Federal Housing Enterprise Oversight;

(B) the Federal Housing Finance Board;

(C) the Secretary of Housing and Urban Development and that relate to the Secretary's authority under title XIII of the Housing and Community Development Act of 1992, the Federal National Mortgage Association Charter Act, or the Federal Home Loan Mortgage Corporation Act; or

(D) a court of competent jurisdiction and that relate to functions transferred by this Act; and

(2) are in effect on the date of the abolishment under section 201(a) of this Act,

shall remain in effect according to the terms of such regulations, orders, determinations, and resolutions and shall

be enforceable by or against the Director of the Office of Housing Finance Oversight of the Department of the Treasury until modified, terminated, set aside, or superseded in accordance with applicable law by such Director, any court of competent jurisdiction, or operation of law.

SEC. 203. TRANSFER AND RIGHTS OF EMPLOYEES OF ABOLISHED AGENCIES.

(a) TRANSFER- Each employee of the Office of Federal Housing Enterprise Oversight and each employee of the Federal Housing Finance Board shall be transferred to the Office of Housing Finance Oversight of the Department of the Treasury for employment no later than the date of the abolishment under section 201(a) of this Act and such transfer shall be deemed a transfer of function for the purpose of section 3503 of title 5, United States Code.

(b) GUARANTEED POSITIONS- Each employee transferred under subsection (a) shall be guaranteed a position with the same status, tenure, grade, and pay as that held on the day immediately preceding the transfer. Each such employee holding a permanent position shall not be involuntarily separated or reduced in grade or compensation for 18 months after the date of transfer, except for cause or, if the employee is a temporary employee, separated in accordance with the terms of the appointment.

(c) APPOINTMENT AUTHORITY FOR EXCEPTED AND SENIOR EXECUTIVE SERVICE EMPLOYEES-

(1) IN GENERAL- In the case of employees occupying positions in the excepted service or the Senior Executive Service, any appointment authority established pursuant to law or regulations of the Office of Personnel Management for filling such positions shall be transferred, subject to paragraph (2).

(2) DECLINE OF TRANSFER- The Director of the Office of Housing Finance Oversight of the Department of the Treasury may decline a transfer of authority under paragraph (1) (and the employees appointed pursuant thereto) to the extent that such authority relates to positions excepted from the competitive service because of their confidential, policy-making, policy-determining, or policy-advocating character, and noncareer positions in the Senior Executive Service (within the meaning of section 3132(a)(7) of title 5, United States Code).

(d) REORGANIZATION- If the Director of the Office of Housing Finance Oversight of the Department of the Treasury determines, after the end of the 1-year period beginning on the date the transfer of functions to such Office is completed, that a reorganization of the combined workforce is required, that reorganization shall be deemed a major reorganization for purposes of affording affected employees retirement under section 8336(d)(2) or 8414(b)(1)(B) of title 5, United States Code.

(e) EMPLOYEE BENEFIT PROGRAMS- Any employee accepting employment with the Office of Housing Finance Oversight of the Department of the Treasury as a result of such transfer may retain, for 18 months after the date such transfer occurs, membership in any employee benefit program of the Federal Housing Finance Board or the Office of Federal Housing Enterprise Oversight, as applicable, including insurance, to which such employee belongs on the date of the abolishment under section 201(a) if--

(1) the employee does not elect to give up the benefit or membership in the program; and

(2) the benefit or program is continued by the Director of the Office of Housing Finance Oversight.

The difference in the costs between the benefits which would have been provided by such agency or entity and those provided by this section shall be paid by the Director of the Office of Housing Finance Oversight. If any employee elects to give up membership in a health insurance program or the health insurance program is not continued by such Director, the employee shall be permitted to select an alternate Federal health insurance program within 30 days of such election or notice, without regard to any other regularly scheduled open season.

(f) SENIOR EXECUTIVE SERVICE EMPLOYEES- A transferring employee in the Senior Executive Service shall be placed in a comparable position at the agency or entity to which such employee is transferred.

(g) NOTICE OF POSITIONS- Transferring employees shall receive notice of their position assignments not later than 120 days after the effective date of their transfer.

SEC. 204. TRANSFER OF PROPERTY AND FACILITIES.

Upon the abolishment under section 201(a), all property of the Office of Federal Housing Enterprise Oversight and the Federal Housing Finance Board shall transfer to the Director of the Office of Housing Finance Oversight of the Department of the Treasury.

END