H.R. 1461 (109th): Federal Housing Finance Reform Act of 2005

Introduced:
Apr 05, 2005 (109th Congress, 2005–2006)
Status:
Died (Passed House)
Sponsor
Richard Baker
Representative for Louisiana's 6th congressional district
Party
Republican
Text
Read Text »
Last Updated
Oct 31, 2005
Length
338 pages
Related Bills
H.Res. 509 (rule)

Agreed To (Simple Resolution)
Oct 26, 2005

 
Status

This bill was introduced in a previous session of Congress and was passed by the House on October 26, 2005 but was never passed by the Senate.

Progress
Introduced Apr 05, 2005
Referred to Committee Apr 05, 2005
Reported by Committee May 25, 2005
Passed House Oct 26, 2005
 
Full Title

To reform the regulation of certain housing-related Government-sponsored enterprises, and for other purposes.

Summary

No summaries available.

Votes
Oct 26, 2005 2:57 p.m.
Agreed to 210/205
Oct 26, 2005 3:06 p.m.
Failed 36/378
Oct 26, 2005 4:31 p.m.
Failed 73/346
Oct 26, 2005 4:41 p.m.
Failed 47/371
Oct 26, 2005 4:49 p.m.
Failed 57/358
Oct 26, 2005 5:36 p.m.
Passed 331/90

Cosponsors
19 cosponsors (19R) (show)
Committees

House Financial Services

House Judiciary

Senate Banking, Housing, and Urban Affairs

The committee chair determines whether a bill will move past the committee stage.

 
Primary Source

THOMAS.gov (The Library of Congress)

GovTrack gets most information from THOMAS, which is updated generally one day after events occur. Activity since the last update may not be reflected here. Data comes via the congress project.

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Notes

H.R. stands for House of Representatives bill.

A bill must be passed by both the House and Senate in identical form and then be signed by the president to become law.

The bill’s title was written by its sponsor.

GovTrack’s Bill Summary

We don’t have a summary available yet.

Library of Congress Summary

The summary below was written by the Congressional Research Service, which is a nonpartisan division of the Library of Congress.


10/26/2005--Passed House amended.
Federal Housing Finance Reform Act of 2005 -
Title I - Reform of Regulation of Enterprises and Federal Home Loan Banks
Subtitle A - Improvement of Safety and Soundness
Section 101 -
Amends the Housing and Community Development Act of 1992 (Act) to establish the Federal Housing Finance Agency (FHFA), which shall have supervisory and regulatory authority over the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) (both hereinafter referred to as the "enterprises") and the Federal Home Loan Banks.
Section 102 -
Sets forth duties and authorities of the Director of FHFA, which include regulating and overseeing the operations of Fannie Mae, Freddie Mac, and the Federal Home Loan Banks (all three of which referred to as "regulated entities").
Section 103 -
Establishes the Housing Finance Oversight Board to advise the Director.
Section 104 -
States that the Director, with respect to regulated entities: (1) may require regular reports on condition, management, activities, or operations, and any special reports; (2) shall require reports of fraudulent financial transactions; (3) shall require annual reports of charitable contributions; (4) shall collect annual assessments; and (5) shall establish risk-based capital requirements for the regulated entities.
Section 112 -
Authorizes the Director to: (1) raise minimum capital levels to ensure that regulated entities operate in a safe and sound manner; (2) establish temporary minimum capital increases; and (3) establish additional capital and reserve requirements for a particular program.
Requires the Director to periodically review, and adjust as necessary, the capital levels of regulated entities.
Section 113 -
Requires the Director to periodically review enterprise assets and liabilities. Authorizes the Director to require the disposition or acquisition of certain assets and liabilities as appropriate.
Section 114 -
Sets forth enterprise governing provisions.
Section 115 -
Requires each regulated entity to register at least one class of stock with the Securities and Exchange Commission (SEC).
Section 116 -
Amends the Federal Financial Institutions Examination Council Act of 1978 to include the Director on the Federal Financial Institutions Examination Council (FFIEC).
Section 117 -
Directs the Government Accountability Office (GAO) to study regulated entity pricing, transparency, and reporting of guarantee fees.
Subtitle B - Improvement of Mission Supervision
Section 121 -
Amends the Act to transfer authority to approve programs and to oversee the mission requirements of the enterprises from the Department of Housing and Urban Development (HUD) to FHFA.
Section 122 -
Requires Director review and approval of an enterprise's new programs and activities, including pilot programs. Sets forth review and approval provisions.
Section 123 -
Sets forth enterprise conforming loan limits for single-, two-family, three-family, and four-family residences.
Provides for: (1) annual loan limit increases or decreases; and (2) loan limit increases in areas where the median home price is greater than the conforming loan limit.
Requires the Director to: (1) develop a Housing Price Index, which shall be subject to a GAO audit on Index methodology and timing; and (2) conduct a study of issues related to loan limits in high cost areas.
Section 124 -
Requires the Director to report annually to the appropriate congressional committees respecting each regulated entity's activities.
Section 125 -
Replaces current housing goals with three single-family housing goals and a multifamily special affordable housing goal, to be established annually.
Requires: (1) an enterprise to disclose information to allow the Director to assess if there are interest rate disparities between minorities and non-minorities of similar creditworthiness; and (2) that if interest rate disparities exist, those findings must be reported to Congress and the Director must instruct the enterprise to take appropriate remedial action.
Requires the Director to establish (and authorizes increases of) an annual purchase goal for each enterprise for conventional, conforming, single-family, owner-occupied, and purchase money mortgages financing housing for: (1) low-income families; (2) families residing in low-income areas; and (3) very low-income families.
Requires the Director to establish a Multifamily Special Affordable Goal for mortgages that finance dwelling units: (1) for low-income families; (2) for very low-income families; and (3) assisted by the low-income housing tax credit. Requires the Director to establish additional requirements within the Multifamily Special Affordable Goal for small loans measured by either mortgage amounts or number of dwelling units in the project or both.
Authorizes an enterprise to petition the Director for a housing goal reduction.
Section 126 -
States that each enterprise shall: (1) undertake activities relating to mortgages on housing for very low-, low-, and moderate-income families involving a reasonable economic return that may be less than the return earned on other activities; and (2) have the duty to increase the liquidity of mortgage investments and improve the distribution of investment capital available for mortgage financing for underserved markets.
Section 127 -
Sets forth housing goal monitoring and enforcement provisions.
Section 128 -
Requires each enterprise to establish an affordable housing fund to:
(1) increase homeownership for extremely low- and very low-income families,
(2) increase investment in housing in low-income areas and areas designated as qualified census tracts or an area of chronic economic distress;
(3) increase and preserve the supply of rental and owner-occupied housing for extremely low- and very low-income families; and
(4) increase investment in economic and community development in economically underserved areas.
Sets forth fund allocation provisions. Sunsets such required funding five years after the sixth month after enactment of this Act.
Sets forth recipient (for-profit, governmental, and other than for-profit entities) and activity (including leveraged grants and homeownership) eligibility provisions.
Requires each enterprise to submit quarterly reports to the Director and the affordable housing board.
Requires the Director to appoint an affordable housing board.
Section 130 -
Authorizes the Director to issue cease and desist orders and impose civil money penalties on an enterprise that has failed to: (1) meet a housing goal; (2) submit certain reports; (3) submit an acceptable housing plan; or (4) comply with a housing plan.
Subtitle C - Prompt Corrective Action
Section 141 -
Amends the Act to require the Director to establish capital classifications for regulated entities.
Revises capital classification provisions. Prohibits, with a specified exception, a regulated entity from making a capital distribution that would result in such entity's undercapitalization.
Section 142 -
Sets forth supervisory action applicable to undercapitalized regulated entities, including restrictions on asset growth.
Section 143 -
Sets forth supervisory actions applicable to significantly undercapitalized regulated entities, including: (1) making current discretionary actions mandatory; and (2) limiting executive officer compensation or bonuses.
Section 144 -
Authorizes the Director to establish a conservatorship or receivership over a critically undercapitalized regulated entity in order to reorganize, rehabilitate, or terminate the entity's affairs. Requires that FHFA be appointed as conservator or receiver.
Sets forth provisions respecting: (1) grounds for conservator or receiver appointment; (2) FHFA duties and powers as conservator or receiver; and (3) judicial review.
Subtitle D - Enforcement Actions
Section 161 -
Authorizes the Director to: (1) issue a cease and desist order if a regulated entity or affiliated party is engaged in an unsafe or an unsound practice or is violating a rule or condition; and (2) deem a regulated entity to be engaged in unsafe and unsound practices if such entity receives a less than satisfactory rating for asset quality, management, earnings, or liquidity in its most recent exam.
Section 162 -
Authorizes the Director to: (1) issue a temporary cease and desist order if 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; and (2) enforce such orders by a court injunction.
Section 163 -
Authorizes the Director to seek prejudgment attachment.
Section 164 -
Authorizes the Director to seek judicial enforcement of this title in U.S. district court.
Section 165 -
Sets forth civil money penalties.
Section 166 -
Authorizes the Director to issue removal and prohibition orders against a party for the protection of the regulated entity, including suspension or removal of a party charged with a felony.
Section 167 -
Provides that a person who is subject to a removal or prohibition order and who knowingly participated in the conduct of the affairs of any regulated entity shall be fined not more than $1 million, imprisoned for up to five years, or both.
Section 168 -
Grants the Director subpoena authority.
Subtitle E - General Provisions
Section 181 -
States that the boards of directors of Fannie Mae and Freddie Mac, respectively, shall have between 7 and 15 members. (Current law requires 18 members.)
Section 182 -
Requires the Director to report to Congress respecting: (1) the portfolio holdings of Fannie Mae and Freddie Mac; and (2) alternative secondary market systems.
Title II - Federal Home Loan Banks
Section 201 -
Amends the Federal Home Loan Bank Act to define "Director" and "Agency" (FHFA) for purposes of such Act.
Section 202 -
Revises Federal Home Loan Bank board of director provisions, including the number of directors for each bank and their qualifications and terms of office.
Section 203 -
Replaces the Federal Housing Finance Board with FHFA.
Section 204 -
Authorizes two or more Federal Home Loan Banks to establish a joint office in order to perform functions for, or providing services to, the Banks on a common or collective basis.
Section 205 -
Requires the Director to prescribe rules to ensure that each Federal Home Loan Bank has access to information to determine the nature and extent of its joint and several liability.
Section 206 -
Authorizes Bank mergers.
Section 207 -
Exempts Federal Home Loan Banks from certain disclosure requirements respecting: (1) capital stock; (2) tender requirements; and (3) reporting requirements.
Section 208 -
Redefines "community financial institution" to raise the maximum asset level to $1 billion. Permits such institutions to use advances for community development lending.
Section 210 -
Directs that GAO study the use of the Federal Home Loan Banks' affordable housing program to fund long-term care facilities for low- and moderate-income individuals.
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 -
Abolishes the Office of Federal Housing Enterprise Oversight (OFHEO) of HUD and the positions of the Director and Deputy Director six months after enactment of this Act.
Section 302 -
Sets forth provisions respecting: (1) continuation and coordination of operations; and (2) transfer (and rights) of OFHEO employees, property, and facilities to FHFA.
Subtitle B - Federal Housing Finance Board
Section 321 -
Abolishes the Federal Housing Finance Board six months after enactment of this Act.
Section 322 -
Sets forth provisions respecting: (1) continuation and coordination of operations; and (2) transfer (and rights) of Board employees, property, and facilities to FHFA.
Subtitle C - Department of Housing and Urban Development
Section 341 -
Directs the Secretary of HUD to determine and transfer the enterprise-related functions and employees of HUD to FHFA within six months of enactment of this Act. Provides that during the six-month period after enactment of this Act HUD will continue to oversee the affordable housing goals, new programs, and mission of the enterprises.
Section 342 -
Sets forth provisions respecting: (1) continuation and coordination of operations; and (2) transfer (and rights) of employees, property, and facilities.

House Republican Conference Summary

The summary below was written by the House Republican Conference, which is the caucus of Republicans in the House of Representatives.


No summary available.

House Democratic Caucus Summary

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