H.R. 4581 (111th): Fannie Mae and Freddie Mac Accountability and Transparency for Taxpayers Act of 2010

The text of the bill below is as of Feb 3, 2010 (Introduced).

Source: GPO

I

111th CONGRESS

2d Session

H. R. 4581

IN THE HOUSE OF REPRESENTATIVES

February 3, 2010

(for herself, Mr. Bachus, Mrs. Capito, Mr. Issa, Mr. Garrett of New Jersey, Mr. Paul, Mr. Neugebauer, and Mr. Hensarling) introduced the following bill; which was referred to the Committee on Financial Services

A BILL

To require the Inspector General of the Federal Housing Finance Agency to submit quarterly reports to the Congress during the conservatorship of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation.

1.

Short title

This Act may be cited as the Fannie Mae and Freddie Mac Accountability and Transparency for Taxpayers Act of 2010.

2.

Quarterly reports during conservatorship

(a)

Reporting requirement

For each reporting period, the covered officer shall submit to the Congress a report for each enterprise that summarizes the activities of the covered officer with respect to such enterprise, and the activities and condition of such enterprise, during such reporting period.

(b)

Contents

Each report required under this section for an enterprise for a reporting period shall include the following information:

(1)

A description, including dollar amount, of total liabilities of the enterprise as of the reporting date, with a detailed breakdown of the potential level of risk to the Federal Government inherent in the dollar amount of each separate type of liability and a quantification as to how the risk to the Federal Government has changed from the previous reporting period, distinguishing between changes attributable to volume and changes attributable to changes in risk levels.

(2)

An explanation of, including rationale for, all compensation and bonuses paid to any executive officer (as such term is defined in section 1303 of the Housing and Community Development Act of 1992 (12 U.S.C. 4502)) of the enterprise, and any retention decisions made, by the enterprise during such period regarding its executive officers.

(3)

A description of foreclosure mitigation activities of the enterprise during such period, including any related data, a list of law firms and attorneys approved or retained by the enterprise for handling foreclosure and bankruptcy matters relating to mortgages held or securitized by the enterprise, and the eligibility criteria used for such approval or retention and reasons for limiting such list, and the number of mortgage loans held by the enterprise that were refinanced in 2008 and 2009 through foreclosure mitigation activities of the enterprise that have, during such period, entered into default.

(4)

A description of any mortgage fraud prevention activities undertaken by the enterprise during such period and data describing the extent of mortgage fraud during such period, including descriptions of the efforts of the enterprise to prevent or detect mortgage fraud, of the pervasiveness of mortgage fraud, and of the most prevalent types of mortgage fraud detected.

(5)

A listing with description of any formal or informal communication between Governors and staff of the Board of Governors of the Federal Reserve System and executives in the enterprise and any formal or informal communication between officials and staff of the Department of the Treasury and the Governors and staff of the Board of Governors of the Federal Reserve System and executives in the enterprise regarding the purchase or sale of any enterprise-related securities.

(6)

A description of any investments, holdings, and activities of the enterprise during such period that are not consistent with the mission of the enterprise as provided under Federal law.

(7)

A description of the reasons for any equity investments in the enterprise by the Department of the Treasury during such period and any increase during such period in the authorized amount of equity investments by such Department.

(8)

An analysis of the capital levels and portfolio size of the enterprise during such period and their impacts on the safety and soundness of the enterprise.

(9)

A description and analysis of the underwriting standards of the enterprise applicable during such period, including the criteria for safety and soundness of mortgage loans for single-family, multi-family, and condominium residential homes securitized by the enterprise and the ability of such criteria to ensure such safety and soundness.

(10)

An analysis of actions taken by the enterprise that had a beneficial or harmful effect on holders of enterprise-related securities, in particular, preferred stock issued prior to September 6, 2008.

(11)

Any other information that the covered officer considers relevant or important with respect to the enterprise, and the activities and condition of the enterprise.

(c)

Reporting periods; timing of reports

(1)

Initial period

The first reporting period for each enterprise shall be the period that began upon the commencement of the conservatorship period for the enterprise and that ends upon the date of the enactment of this Act. The reports required under this section for such period shall be submitted not later than the expiration of the 60-day period beginning on the date of the enactment of this Act.

(2)

Quarterly periods

After the first reporting period, the reporting periods for each enterprise shall be each calendar quarter that concludes after the date of the enactment of this Act. Each report for each such reporting period shall be submitted not later than the expiration of the 60-day period beginning upon the conclusion of such reporting period.

(3)

Receivership

Notwithstanding paragraph (2), if at any time a receiver is appointed for an enterprise pursuant to section 1367 of the Housing and Community Development Act of 1992 (12 U.S.C. 4617), the reporting periods for the enterprise during such receivership shall be each calendar month (or such shorter period as the covered officer considers appropriate). Each report for each such reporting period shall be submitted not later than the expiration of the 30-day period beginning upon the conclusion of such reporting period.

(4)

Nationalization

Notwithstanding paragraph (2), if at any time the Federal Government or any agency or entity of the Federal Government obtains control of an enterprise under law or through ownership of voting stock of the enterprise, or the covered officer determines that the enterprise has otherwise been nationalized, the reporting periods for the enterprise after such nationalization occurs shall be the consecutive 6-month periods (the first such period beginning upon such nationalization (or such shorter period as the covered officer considers appropriate). Each report for each such reporting period shall be submitted not later than the expiration of the 60-day period beginning upon the conclusion of such reporting period.

(d)

Public availability

The covered officer shall—

(1)

make information regarding the activities of the covered officer, including each report submitted to the Congress pursuant to this section, available to the public, including through a World Wide Web site of the Federal Housing Finance Agency; and

(2)

establish an electronic mail address and a toll-free telephone number, and shall publicize the availability of such address and number, by which the public may report waste, fraud, or abuse by an enterprise.

(e)

Definitions

For purposes of this section, the following definitions shall apply:

(1)

Conservatorship period

The term conservatorship period means, with respect to an enterprise, the period that—

(A)

began upon appointment of the Federal Housing Finance agency as conservator for the enterprise on September 6, 2008, pursuant to section 1367 of the Housing and Community Development Act of 1992 (12 U.S.C. 4617); and

(B)

ends upon the termination of such conservatorship of the enterprise.

(2)

Covered officer

The term covered officer means—

(A)

the Inspector General of the Federal Housing Finance Agency, if one has been appointed pursuant to section 1317(d) of the Housing and Community Development Act of 1992 (12 U.S.C. 4517);

(B)

if the officer referred to in subparagraph (A) has not been appointed, any interim inspector general for the Federal Housing Finance Agency appointed pursuant to any provision of law providing for such office; or

(C)

if the officer referred to in subparagraph (A) has not been appointed and an officer referred to in subparagraph (B) has not been appointed, the Associate Director for Internal Audit of the Federal Housing Finance Agency.

(3)

Enterprise

The term enterprise means the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation.

(4)

Reporting period

The term reporting period means a period described in paragraph (1), (2), (3), or (4) of subsection (c).