Federal Housing Enterprises Regulatory Reform Act of 1992

Summary

Federal Housing Enterprises Regulatory Reform Act of 1992 - Sets forth congressional findings and definitions. Title I: Supervision and Regulation of the Enterprises - Establishes within the Department of Housing and Urban Development (HUD) the Office of Federal Housing Enterprise Oversight, managed by a presidentially appointed Director, who shall ensure that the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal National Mortgage Association (Fannie Mae) (the enterprises) are adequately capitalized and operating safely. Authorizes the Director to levy annual assessments on the enterprises for the estimated expenses of the Office, including an initial assessment to cover its start-up costs. Requires the Director to report annually to the Secretary of HUD and specified congressional committees. Requires each enterprise to report quarterly and annually to the Director on its financial condition and operations. Requires each enterprise to establish a minority outreach program to ensure inclusion in its contracts of minorities and women and businesses owned by them. Amends the Department of Housing and Urban Development Act to prohibit the Secretary from merging or consolidating the Office of Federal Housing Enterprise Oversight, or any of its functions or responsibilities, with any function or program the Secretary administers. Prohibits the Director, and any former officer or employee of the Office who was compensated at certain levels higher than GS-15 while employed by the Office, from accepting compensation from any enterprise during the two years following separation from the Office. Declares that nothing in this Act shall be construed: (1) as obligating the Federal Government, either directly or indirectly, to provide any funds to Freddie Mac or Fannie Mae, or to honor, reimburse, or otherwise guarantee any of their obligations or liabilities; or (2) as implying that either enterprise or its securities are backed by the full faith and credit of the United States. Title II: Required Capital Levels for Enterprises and Special Enforcement Powers - Requires the Director to establish by regulation a risk-based capital test which shall require each enterprise to maintain positive capital during a ten-year period ("stress period") in which specified circumstances occur with respect to credit risk, interest rate risk, and new enterprise business. Declares that the risk-based capital level for an enterprise shall be 130 percent of the amount of capital required to meet the risk-based capital test. Requires the minimum capital level for each enterprise to be the sum of: (1) 2.5 percent of its aggregate on-balance sheet assets; (2) 0.45 percent of the unpaid principal balance of outstanding mortgage-backed securities and substantially equivalent instruments issued or guaranteed by it that are not included in (1); and (3) those percentages of other off-balance sheet obligations not included in (2) (excluding certain commitments), that best reflect the credit risk of such obligations or guarantees in relation to the instruments included in (2). Requires the critical capital level for each enterprise to be the sum of: (1) 1.25 percent of the aggregate on-balance sheet assets of the enterprise; (2) 0.25 percent of the unpaid principal balance of outstanding mortgage-backed securities and substantially equivalent instruments issued or guaranteed by it that are not included in (1); and (3) those percentages of other off-balance sheet obligations not included in (2) (excluding certain commitments), that best reflect the credit risk of such obligations or guarantees in relation to the instruments included in (2). Requires the Director to classify, on a quarterly basis, each enterprise as adequately capitalized (meeting or exceeding both its risk-based capital level and its minimum capital level), undercapitalized, significantly undercapitalized, or critically undercapitalized. Requires undercapitalized and significantly undercapitalized enterprises to submit capital restoration plans to the Director and, after approval, carry them out. Prohibits such enterprises from making any capital distribution that would result in a lower classification. Authorizes the Director, in the event an enterprise fails to submit a substantially compliant plan, win approval for a submitted plan, or make reasonable good-faith efforts to comply with an approved plan, to: (1) reclassify an undercapitalized enterprise as significantly undercapitalized, or a significantly undercapitalized enterprise as critically undercapitalized; and (2), with respect to significantly undercapitalized enterprises, limit increases in obligations, limit or prohibit asset growth, restrict certain activities, require new capital, and (in certain circumstances) appoint a conservator. Requires the Director to appoint a conservator for a critically undercapitalized enterprise, unless the public interest would be better served by some other enforcement action. Sets forth the contents of capital restoration plans. Requires written notification of an enterprise before any proposed capital classification may be made or discretionary enforcement action taken. Provides for judicial review of certain classifications or supervisory enforcement actions by the U.S. Court of Appeals for the District of Columbia Circuit. Requires the Director, for each enterpise, to contract with two nationally recognized statistical rating organizations: (1) to assess and rate, as a traditional credit rating, the likelihood that the enterprise will be unable to meet its obligations from its own resources with an assumption that there is no recourse to any implicit Government guarantee; and (2) to review the enterprise's rating as frequently as appropriate, but at least annually. Requires submission of comments to specified congressional committees on any difference between the Office's evaluation and the evaluation of the rating organizations, especially about capital adequacy. Requires the Director to define by regulation the meaning of "capital," excluding any amounts that an enterprise could be required to pay, at the option of investors, to retire capital instruments. Title III: Enforcement Actions - Sets forth general procedures for: (1) issuing temporary and permanent cease-and-desist orders against enterprises; (2) hearings; (3) judicial review; (4) civil money penalties; (5) notice after separation from service; (6) private rights of action; and (7) public disclosure of final orders and agreements. Title IV: Conservatorship - Provides a procedure for the appointment of a conservator, judicial review of such appointment, and termination of a conservatorship. Specifies the powers of a conservator, and provides for errors or omissions liability protection. Title V: Housing - Requires the Director to establish specified housing goals for each enterprise, including goals for purchase of mortgages on housing for low- and moderate-income families, and on housing located in underserved areas (both urban and rural). Requires an annual special affordable housing goal that is not less than one percent of the dollar amount of the mortgage purchases by the enterprise for the previous year. Sets forth factors to be applied in establishing such goals. Requires the Director to establish guidelines to measure the extent of compliance with housing goals established under this title. Requires each enterprise to collect and provide to the Director, in useful form, data relating to both its single family and multifamily housing mortgages, including certain information and annual reports to the Director and the Congress. Requires the Director to include in the annual report to specified congressional committees an evaluation of the extent to which each enterprise is achieving annual goals and general purposes. Requires the Director to monitor and enforce compliance with such goals, filing goal failure notices and requiring (of noncompliant enterprise) submission of housing plans. Prescribes deadlines for approval or disapproval of such housing plans. Requires each enterprise to appoint an Affordable Housing Advisory Council to advise it on possible methods to promote affordable housing for low- and moderate-income families. Amends the Federal National Mortgage Association Charter Act and the Federal Home Loan Mortgage Corporation Act to: (1) make it a purpose of such Acts to promote access to mortgage credit throughout the Nation (including central cities and rural areas) by increasing the liquidity of mortgage investments, including facilitating credit secured by mortgages to secondary market participants, and improving the distribution of investment capital available for residential mortgage financing; (2) indicate that each of their respective public purposes relates to both single-family and multifamily housing; and (3) require that at least one presidentially appointed member of each enterprise's board of directors has demonstrated a career commitment to the provision of low-income housing. Directs the Secretary, by regulation, to impose on the enterprises specified fair housing requirements and prohibitions. Prohibits the public disclosure of proprietary information. Title VI: Amendments to Charter Acts of Enterprises - Makes conforming amendments to the Federal National Mortgage Association Charter Act and the Federal Home Loan Mortgage Corporation Act. Title VII: Regulation of Federal Home Loan Bank System - Amends the Federal Home Loan Bank Act to declare that the primary duty of the Federal Housing Finance Board is to ensure that the Federal Home Loan Banks operate in a financially safe and sound manner. Requires the Federal Housing Finance Board, the Comptroller General of the United States, the Director of the Congressional Budget Office, and the Secretary to study and report to the Congress on specified aspects of the Federal Home Loan Bank System. Requires the Secretary of the Treasury and certain Federal agencies to submit opinions to the Congress to the extent that their views differ from those of the study participants. Requires the Board of Directors of each Federal Home Loan Bank to submit to the Congress its evaluation of the costs and benefits of consolidating the Federal Home Loan Bank System. Requires the Federal Home Loan Banks to set up a Study Committee to study and report to specified congressional committees, the Federal Housing Finance Board, and the presidents of the Federal Home Loan Banks on the same topics covered by the above study, as well as the costs and benefits of consolidating the System. Amends the Federal Home Loan Bank Act to require all Board directors to serve on a full-time basis beginning January 1, 1994. Title VIII: Study of National Consumer Cooperative Bank - Directs the Comptroller General to study and report to specified congressional committees on: (1) the extent to which the National Consumer Cooperative Bank has achieved its statutory purposes under the National Consumer Cooperative Bank Act; and (2) the financial safety and soundness of the activities of the Bank and its affiliates. Specifies items the study must cover. Title IX: Miscellaneous - Subtitle A: Miscellaneous - Directs the Comptroller General, the Director of the Congressional Budget Office, and the Secretary of the Treasury to study and report to specified congressional committees on the desirability and feasibility of eliminating Federal sponsorship of Fannie Mae and Freddie Mac. Amends the Housing and Community Development Act of 1974 to allow 500 low-rent housing assistance (section 8) certificates earmarked for use in the Park Central New Town in Town project (in Port Arthur, Texas) to be available for use generally in Jefferson County, Texas. Amends the Cranston-Gonzales Affordable Housing Act to authorize assistance to all non-profit organizations, including municipal and State-owned or -sponsored organizations (currently only private ones), to expand the supply of supportive housing for persons with disabilities (Shelter Plus Care program). Amends the Competitive Equality Banking Act of 1987 to apply only to home purchase and other consumer loans the maximum interest rate cap for adjustable rate mortgage loans. Amends a section of the Revised Statutes (National Bank Act) and the Federal Reserve Act to permit national banks and State member banks to make investments in community development projects or an entity primarily engaged in such investments. Requires the Comptroller General or the Federal Reserve Board, as appropriate, to limit the investment in any one project. Limits the aggregate investment of a bank to the sum of ten percent of its paid-in, unimpaired stock plus ten percent of its unimpaired surplus. Subtitle B: Presidential Insurance Commission - Presidential Insurance Commission Act of 1992 - Establishes a Presidential Commission on Insurance to: (1) assess the condition of the property and casualty insurance, life insurance, health insurance, and reinsurance industries; and (2) recommend any necessary legislative and regulatory changes that will improve the domestic and international financial health and competitiveness of such industries, and thereby assure consumers of the availability of adequate insurance coverage when an insured event occurs, and of the best possible range of products at competitive prices. Requires a report to the President and the Congress by a specified deadline. Terminates the Commission 60 days after submission of the report. Authorizes appropriations. Subtitle C: Secondary Market for Commerical Mortgage Loans - Secondary Market for Commercial Real Estate Mortgage Loans Act of 1992 - Directs the Secretary of the Treasury, the Director of the Congressional Budget Office, and the chairman of the Securities and Exchange Commission to study and report to specified congressional committees on the potential benefits of, and legal, regulatory, and market-based barriers to, developing a secondary market for commercial real estate mortgage loans. Directs the chief executive officer of the Resolution Trust Corporation (RTC) to study and report to the Congress on: (1) the RTC's efforts to standardize its disposition methods; (2) its success in marketing its commercial mortgage loan-backed securities; (3) the impact of its programs on the commercial real estate mortgage loan secondary market; and (4) the impact of its commercial real estate loan securitization program generally.

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4 official files

• Placed on Calendar Senate (text)

  Placed on Calendar Senate · EN

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• Engrossed in Senate (text)

  Engrossed in Senate · EN

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• Passed Senate amended

  summary · EN · 1 July 1992

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• Introduced in Senate

  summary · EN · 15 May 1992

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